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PETITIONER: HOSHNAK SINGH

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT27/02/1979

BENCH: DESAI, D.A. BENCH: DESAI, D.A. SHINGAL, P.N.

CITATION:  1979 AIR 1328            1979 SCR  (3) 399  1979 SCC  (3) 135  CITATOR INFO :  RF         1981 SC 960  (12)  D          1984 SC 463  (5)

ACT:      Displaced Persons  (Compensation & Rehabilitation) Act, 1954-Ss. 10 & 12-Scope of.      Res judicata-Principles  analogous to res judicata when could be invoked.

HEADNOTE:      A part  of the land allotted to the appellant on quasi- permanent basis as a displaced person from West Pakistan was acquired by  the Government. When the question of payment of compensation in  respect of  the land  acquired was pending, the Displaced Persons (Compensation and Rehabilitation) Act, 1954 was  passed which  enabled holders  of quasi-permanency rights to  obtain permanent  settlement  pursuant  to  which permanent settlement in respect of acquired land was made in favour of the appellant.      Alleging that  the land  allotted to  the appellant was not allottable  on a  permanent basis,  the Chief Settlement Commissioner, by his order dated 17th March, 1961, cancelled the allotment.  The  appellant’s  petition  questioning  the correctness of this decision was dismissed by the High Court in limine.      Thereupon the appellant preferred a petition under s.33 of the  Act to  the Joint  Secretary to  the  Government  of India, Rehabilitation  Department, challenging  the order of the Chief  Settlement Commissioner.  By his order dated 29th September, 1964  the Joint  Secretary rejected  the petition pointing  out  that  the  cancellation  of  the  appellant’s permanent settlement  rights in  the land  was in accordance with law and that no interference was called for.      The appellant  filed a writ petition in the High Court. In rejecting  the appellant’s  writ petition  impugning  the order dated  29th September,  1964 the High Court was of the view that  it was  barred by  principles  analogous  to  res judicata because  if that petition were allowed, it would in effect, amount  to cancellation  of the order dated the 17th March, 1961  which became  final as against the appellant on dismissal of his first petition.      Allowing the appeal,

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^      HELD: 1(a) Where a petition under Art. 226 is dismissed in limine  without a  speaking order, such a dismissal would not constitute  a  bar  of  res  judicata  to  a  subsequent petition on  the same  cause of  action. When  a petition is dismissed  on   the  ground   that  the  petitioner  has  an alternative remedy  by way  of appeal  or revision  under  a statute and  on failure  to get  relief after  pursuing  the remedy by  way of  appeal or  revision, he  moved  the  High Court, it  would be incorrect to dismiss the petition on the ground that  the order  made by the revisional authority had the effect  of merging  the original order with the order of the revisional  authority, and  that the  challenge  on  the fresh cause  of  action  to  the  order  of  the  revisional authority would  of necesity  be a challenge to the original order also  and that  therefore the petition would be barred by principles  analogous to  res judicata as the first order had become final. [407C-E] 400      Daryao & Ors. v. State of U.P. & Ors. [1962] 1 SCR 574; Virudhunagar Steel Rolling Mills Ltd. v. The Govt of Madras, [1968] 2  SCR 740;  Tilokchand Motichand  & Ors.  v.  H.  B. Munshi & Anr., [1969] 2 SCR 824; referred to.      In the  instant case  in the  first writ  petition  the appellant questioned  the correctness  of the  order of  the Chief Settlement Commissioner dated 17th March, 1961 without claiming therein  any compensation  for the  land  acquired. That  having   been  dismissed  in  limine  he  invoked  the revisional jurisdiction  under s.  33 of  the Act. When that petition  was  dismissed  by  the  revisional  authority  he preferred the  second writ  petition. What  he prayed in the second petition  was a  direction quashing  the order  dated 29th  September,   1964  of   the  Joint  Secretary  to  the Government of India. The High Court was, therefore, in error in rejecting the second petition on the sole ground that the order of  17th March,  1961 merged  into the  order of  29th September, 1964  and in  substance the  challenge was to the order dated 17th March, 1961 which had become final. [408 A- B]      (b) Secondly,  if the  claim for  compensation was  not raised in  the first petition but was specifically raised in the second,  it would not be dismissed on the ground that it was barred by principles analogous to res judicata. [408 D]      2(a) It  has been  well established  by a  long line of decisions of  this  Court  that  after  July  22,  1952  the Custodian had  no  authority  to  cancel  or  modify  quasi- permanent allotment, that the allottes of these rights could not be dispossessed at the whim or caprice of the Custodian, that the  quasi-permanent rights were heritable and that the holders were entitled to permanent settlement by issuance of sanad. Added  to this  was the  fact that  r. 14(6)  of  the Administration of  Evacuee Property (Central) Rules, 1950 as amended from  July 22,  1952 restricted  the  power  of  the Custodian to  resume or cancel quasi-permanent rights of the allottees except  in  the  circumstances  mentioned  in  the subrule and no material is placed on record to show that the Custodian had  exercised his  power under  r. 14(6)  of  the Rules. [411 D-E]      P. D.  Sharma v.  State Bank of India, [1968] 3 SCR 91; Amar Singh  v. Custodian,  Evacuee Property,  Punjab, [1957] SCR 801;  State of  Punjab v.  Suraj  Prakash  Kapur,  etc., [1962] 2  SCR 711; Joginder Singh & Ors. v. Deputy Custodian General of  Evacuee Property,  [1962]  2  SCR  738  at  740; referred to.      (b) Nor  again is  there any  material to show that the

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Custodian had  the power  to cancel  the allotment under the State Rules.  It was not shown that the State Government had framed any  re-settlement scheme  and that the allotment was cancelled for that purpose. [412 H]      3 (a)  Under the  Evacuee Property  Act, 1950  property which  was  declared  us  evacuee  property  vested  in  the Custodian and  was allotted to displaced persons on a quasi- permanent basis. To obviate difficulties caused by continued unextinguished title  of  the  evacuee,  the  1954  Act  was passed, under  s.  12(2)  of  which  the  right,  title  and interest of any evacuee in the evacuee property specified in the notification issued under the section stood extinguished and the  evacuee  property  would  vest  absolutely  in  the Central Government. Evacuee property acquired in this manner formed  part   of  the  compensation  pool.  Therefore,  the appellant’s property which was acquired in 1953, much before the coming into force of the 1954 Act, could not have become part of the compensation pool. [413 G-H] 401      (b) Even  assuming that  though the  property was taken over by  the Central  Government in 1953 evacuee interest in it had not been extinguished till a notification under s. 12 of the 1954 Act had been issued and that on the issue of the notification it  became part  of the  compensation pool, the consequence envisaged  by s.  10 of the 1954 Act must ensue. It is  that so  long as  the property remained vested in the Central Government  it shall  continue in  possession of the person to  whom it  was allotted  on the  same conditions on which he  held the  property immediately  before the date of acquisition. [914 C-D]      In the present case if the property had been taken over by the Central Government much before the 1954 Act came into force neither  s. 12  of the  1954 Act  nor r.  49 would  be attracted. If  on the other hand the evacuee interest in the property  came   to  be  extinguished  on  the  issue  of  a notification under  s. 12,  s. 10 would be attracted and the appellant would  be entitled  to hold  the property  till it continued to  vest in the Central Government under s. 12. In other  words  in  either  event  he  would  be  entitled  to compensation. [415 C-D]      (c) Nor  again is it correct to say that it was a fresh allotment under s. 10 of the 1954 Act. The land was allotted in 1949  and  s.  10  does  not  purport  to  make  a  fresh allotment. [415 A]      4(a) The whole of chapter VIII of the 1955 Rules (which includes rr.  49 to  69) would  not apply  because the  land allotted was  agricultural land  and the  allotment was made under the notification of the Government of Punjab dated 8th July, 1949. [416 C]      (b) Once  chapter VIII of the 1955 Rules and especially r. 49 which provides for payment of compensation in the form of land is out of the way, there is nothing in the Act which would  debar   a   quasi-permanent   allottee   asking   for compensation in  cash and  the Govenment paying it. Moreover on the  former occasion  the appellant was paid compensation in cash for a part of the land acquired from him. [417 D-E]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2082 of 1969.      Appeal by  Special Leave  from the  Judgment and  Order dated 14-2-1969  of the  Punjab and  Haryana High  Court  in L.P.A. No. 103/68.

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    R. S. Narula, S. K. Mehta, T. S. Doabia, P. N. Puri and K. R. Nagaraja, for the Appellant.      Girish Chandra for Respondent No. 1.      Hardev Singh and R. S. Sodhi for Respondents 2-5.      The Judgment of the Court was delivered by      DESAI, J.-This  appeal by special leave arises from the dismissal of  the Civil  Writ Petition  filed by the present appellant by  a learned single Judge of the Punjab & Haryana High Court as also dismissal in limine of the Letters Patent appeal preferred by him.      Appellant is  a displaced person from West Pakistan. On his migration  to India  he was  allotted on quasi-permanent basis land  admeasuring  321/2  standard  acres  in  village Daulatpur, Tehsil Pathankot, 402 District Gurdaspur. First respondent Union of India acquired land admeasuring  1243 canals,  5 marlas  which included  15 acres of  land alloted  to the appellant, for constructing a railway line.  According to  the appellant  he was paid cash compensation for the same. First respondent further acquired in 1950  some land  for construction  National Highway  from Jammu to  Jullundur and the acquistion included a portion of the land  allotted to  the appellant  and along  with  other allottees he  was paid cash compensation for the same. First respondent wanted  an open  plot of  land for  setting up  a housing colony  for rehabilitating some refugees from Mirpur (Kashmir) and  in all  it took possession of land comprising 7.88 acres  of non-evacuee  land and  6.64 acres  of evacuee land. This  acquisition included land admeasuring 1 standard acre and  151/2 units  of land  allotted to  the  appellant. Possession of  the land  including the land of the appellant was admittedly  taken over  in July  1953.  Since  then  the appellant has been requesting the first respondent and other competent authorities  for payment  of compensation  for the same. In  the  mean  time  after  the  introduction  of  the Displaced Persons  (Compensation  and  Rehabilitation)  Act, 1954, (’1954 Act’ for short), allotment of land to appellant which was  till then  on quasi permanent basis was converted into permanent  basis. As  the appellant  was clamouring for compensation  for   the  land  taken  from  him,  the  Chief Settlement Commissioner, Punjab, made an order on 17th March 1961, Annexure  ’C’,  whereby  a  reference  made  from  the Evacuee Property  Department was  accepted and the permanent settlement rights conferred on the appellant in respect of 1 standard acre  and 151/2 units of land were cancelled on the ground that  there already  existed houses over that portion of the land and the land was described as ghair mumkin abadi and  was   not  allottable   on  permanent   settlement,  as agricultural  land   against  the   verified  claim  of  the appellant. The  appellant questioned the correctness of this order in  Writ Petition  No. 559/61  in the High Court which was dismissed in limine on 22nd March 1961 and which has led to a  contention on  behalf  of  the  respondents  that  the subsequent writ  petition  from  which  the  present  appeal arises  is   barred  by  the  principles  analogous  to  res judicata. After  the dismissal  of the  aforementioned  writ petition the appellant approached the Financial Commissioner (Rehabilitation  Department),   Chandigarh,   as   per   his representation Annexure ’D’ dated 15th March 1963 requesting him to  pay cash compensation for the land taken over by the first respondent which till such taking over was held by the appellant on  quasi permanent  allotment. On receipt of this representation the  appellant was  directed as  per Annexure ’E’ dated  25th April  1963 to  appear before  the Financial Commissioner (Taxation)  on 16th  March 1963  at Chandigarh.

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The appellant accordingly appeared before the 403 Financial Commissioner  (Taxation) and  represented his case for cash  compensation. Subsequent thereto, Secretary to the Government of  Punjab, Rehabilitation  Department, wrote  to his counterpart  in the  Central Government  requesting  the first respondent  to concur  with the decision of the Punjab Government for payment of cash compensation to the appellant adding  that  the  land  held  by  the  appellant  on  quasi permanent basis  was taken over for the purpose of the first respondent and  that as  the area  involved was  less than 2 acres, the  decision to  pay cash compensation in respect of such area  arrived  at  in  the  meeting  held  between  the officers of  the  Punjab  Government  and  the  Ministry  of Rehabilitation on  27th August,  1957 would govern the case. Presumably in response to this communication from the Punjab Government the  then Home  Minister wrote  a  demi  official letter to  the then Chief Minister of Punjab in which it was admitted that  the land  allotted to  the appellant  was  in rural areas  and a  part of  it was  required later  on  for public purpose  and that  in view of the decision arrived at the meeting  on 27th  August, 1957  the appellant  would  be entitled  to  cash  compensation  and  requested  the  Chief Minister to  process the case accordingly. Thus, even though both the  Governments  agreed  in  their  inter-departmental communications that  the appellant would be entitled to cash compensation, nothing tangible came out with the result that the appellant  preferred a  petition under s. 33 of the 1954 Act challenging  the order dated 17th March 1961 of the then Settlement Commissioner  cancelling the permanent settlement rights conferred  upon the  appellant. This  application was rejected by  the Joint  Secretary to the Government of India observing that  the cancellation of the permanent settlement rights was  in accordance  with law  and no interference was called for. Thereafter the appellant filed the writ petition from which the present appeal arises.      After the  writ petition  was filed  and rule  nisi was issued, a return was filed as per the affidavit of one R. C. Aggarwal,  Under   Secretary  to   Government   of   Punjab, Rehabilitation Department,  presumably on  behalf of all the respondents which  undoubtedly amongst  others, include  the Union of  India, the  first respondent,  and  the  State  of Punjab, the  second  respondent.  It  must  be  specifically mentioned that  the Union of India did not file any separate return and accepted the return filed by and on behalf of the State of Punjab and other officers of the Punjab Government. There are  certain averments  in this  return which  must be noticed. Appellant is a displaced person and he was allotted 32-1/2 standard acres of land on quasi permanent basis is in fact admitted.  It is  equally admitted  that the land which was taken over for setting up a colony for rehabilitation of some families from Kashmir included one 404 standard acre  and 15-1/2  units of land which was till then held by  the appellant  and that  the land was taken over in July 1953.  It was  contended that  when land is allotted on quasi permanent  basis, the  allotment can  be cancelled and the land  can be  resumed and  that when  such a  resumption takes place the allottee is only entitled to compensation in the form of land and not in cash. It was also contended that the cancellation of the permanent settlement rights was just and legal  because the  conferment was the result of a fraud between the  appellant  and  some  officers  of  the  Punjab Government and  proceeded on  the erroneous  assumption that the land was used as agricultural land though in fact it can

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be appropriately described as ghair mumkin abadi. The manner in which the preliminary objection was raised at the hearing of the  writ petition  that in  view of the dismissal of the earlier petition  bearing on  the same  subject the  present petition is barred by the principles of res judicata was not in terms  taken up  in the  return filed  on behalf  of  the respondents.  The  High  Court,  however,  appears  to  have permitted the respondents to raise that contention.      The learned  single  Judge  held  that  the  effect  of dismissal of  the earlier  petition  filed  by  the  present appellant was that the order dated 17th March, 1961 by which permanent settlement  rights conferred on the appellant were cancelled became  final  and  if  the  present  petition  is allowed the  only thing  the court would have to do would be to cancel  the order dated 17th March, 1961 which has become final against  the appellant and, therefore, the petition is barred by the principles analogous to res judicata.      Mr. Girish  Chandra for  the first  respondent and  Mr. Hardev Singh  for the  remaining respondents  urged that the appeal must  fail for  the same reason for which the earlier petition of  the appellant  was dismissed  inasmuch  as  the cause of  action for  both the petitions being the same, the subsequent  petition  would  be  barred  by  the  principles analogous to res judicata.      In the  earlier petition  the appellant  questioned the correctness of  the decision  dated 17th March 1961 by which permanent settlement  rights conferred  on the appellant for the land held by him on quasi permanent basis, including the land admeasuring 1 standard acre and 15-1/2 units taken over by the  first respondent  in Joly 1953, and the appellant in the earlier petition did not claim any cash compensation for the land  taken over by the first respondent. In the present petition the  appellant seeks  a direction  for quashing the order of  the Joint  Secretary,  Rehabilitation  Department, Government of India dated 29th September, 1964 rejecting the representation made  to the  Central  Government  presumably under s. 33 of the 1954 Act question- 405 ing the  correctness of  the order  dated 17th  March  1961. Under s. 33 the Central Government has power to call for the record of  any proceeding  under the  Act and  to pass  such order  in   relation  thereto   as  in   its   opinion   the circumstances of the case require and as is not inconsistent with any of the provisions contained in the Act or the rules made thereunder.  Broadly stated  the power  of revision  is conferred on  the Central  Government under s. 33. Appellant invoked this revisional jurisdiction under s. 33 against the order dated 17th March 1961 which he challenged in the first petition. After  the dismissal  of  the  first  petition  he preferred revision  application under  s. 33  and when  this revision petition  was dismissed  he  preferred  the  second petition. The  High Court  was of  the view  that the  order dated 17th  March 1961  merged into  the  order  dated  29th September  1964  passed  by  the  Central  Government  while dismissing the  revision application  of the  appellant and, therefore, if  now the petition is allowed it would have the effect of  setting aside  the order  dated 17th  March  1961 which in  view of  the dismissal  of the earlier petition of the appellant had become final. The High Court is clearly in error in reaching this conclusion.      The earlier  petition was  dismissed by a non-speaking, one word,  order ’dismissed’.  The High  Court may  as  well dismiss the  petition in  limine on  the ground  of delay or laches or  on the  ground of  alternative remedy. The second petition after  pursuing the alternative remedy would not be

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barred by  the principles  analogous to  res judicata.  More often a  petition under  Article 226  is  dismissed  on  the ground that  before invoking  the extraordinary jurisdiction of the  High Court,  if the  petitioner has  an  alternative remedy under  a statute  under which the right is claimed by the petitioner,  the Court expects the petitioner to exhaust the remedy and in such a situation the petition is dismissed in limine.      If after  preferring an  appeal or  revision under  the statute under which the right is claimed by the petitioner a petition under Article 226 is filed irrespective of the fact that the  revision or  appeal was dismissed and the original order which  was challenged in the first petition had merged into the  appellate or  revisional  order,  nonetheless  the second petition  in the circumstances would not be barred by the principles  analogous to  res judicata because the cause of action  is entirely different and the merger of the order cannot stand  in the  way of  the  petitioner  invoking  the jurisdiction of the High Court under Article 226.      In the leading case of Daryao & Ors. v. State of U.P. & Ors.(1) this  Court in terms said that if the petition filed in the High Court under 406 Article 226  is dismissed  not on  the merits but because of the laches  of the party applying for the writ or because it is held  that the  party had an alternative remedy available to it  then the  dismissal of  the writ  petition would  not constitute a  bar to  the subsequent  petition under Art. 32 except in  cases where the facts found by the High Court may themselves be  relevant  even  under  Art.  32.  If  a  writ petition is  dismissed in  limine and an order is pronounced in that behalf whether or not the dismissal would constitute a bar  would depend  upon the  nature of  the order.  If the order is  on the merits it would be a bar; if the order says that the  dismissal was  for the  reason that the petitioner was guilty of laches or that he had an alternative remedy it would not  be  a  bar  except  in  cases  indicated  in  the judgment. Then  comes an  observation which  may  better  be quoted:           "It the  petition is  dismissed in  limine without      passing a  speaking order then such dismissal cannot be      treated as  creating a  bar of res judicata. It is true      that, prima  facie, dismissal  in limine  even  without      passing a  speaking order  in that  behalf may strongly      suggest that  the Court took the view that there was no      substance in the petition at all, but in the absence of      a speaking  order it  would not  be easy to decide what      factors weighed in the mind of the Court and that makes      it difficult  and unsafe  to hold  that such  a summary      dismissal  is   a  dismissal  on  merits  and  as  such      constitutes a  bar of  res judicata  against a  similar      petition filed under Art. 32".      In  Virudhunagar   Steel  Rolling  Mills  Ltd.  v.  The Government of  Madras,(1) rejecting  the contention  that if the petition  under Art.  226 is dismissed without issuing a notice to  the other  side though by a speaking order such a dismissal would  not bar  the subsequent  petition for  same cause of action or for the same relief, it was observed that this Court in Daryao’s case(2) did not mean to lay down that if the  petition is dismised in limine without notice to the opposite side  it would  not bar a subsequent petition. This Court only ruled that if the petition is dismissed in limine but with  a speaking order which order itself indicates that the petition  was dismissed on merits, the absence of notice to other  side by itself would not be sufficient to negative

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the plea of res judicata in a subsequent petition in respect of the  same cause  of action. However, while negativing the contention on  the facts  of the  case this Court reaffirmed that if  the petition is dismissed in limine without passing a speaking  order than such a dismissal cannot be treated as creating a  bar of  res judicata.  Similarly  in  Tilokchand Motichand & Ors. v. H. B. 407 Munshi &  Anr.,(1) a  majority of  the Judges  affirmed  the ratio in Daryao’s case (supra) that if a petition under Art. 226 is  dismissed not  on merits  but because an alternative remedy was  available to the petitioner or that the petition was dismissed  in  limine  without  a  speaking  order  such dismissal is not a bar to the subsequent petition under Art. 32.  It   must  follow  as  a  necessary  corollary  that  a subsequent petition  under Art.  226 would  not be barred by the principles  analogous to  res judicata. Re-affirming the view taken  on this  point in Daryao’s case, in P. D. Sharma v. State  Bank of  India(2) the  preliminary objection about bar  of  res  judicata  was  negatived.  It  is,  therefore, incontrovertible that  where a  petition under  Art. 226  is dismissed  in   limine  without  a  speaking  order  such  a dismissal would  not constitute  a bar  of res judicuta to a subsequent petition  on the  same cause  of action, more so, when on  the facts in this case it appears that the petition was dismissed  presumably  because  the  petitioner  had  an alternative remedy by way of a revision petition under s. 33 of the 1954 Act which remedy he availed of and after failure to get  the relief  he moved  the High  Court again  for the relief. It would be incorrect in such a situation to dismiss the petition  on the  ground that  the  order  made  by  the revisional authority  dismissing the  revision petition  had the effect  of merging  the original order against which the revision was preferred with the order made by the revisional authority and,  therefore, the  challenge on the first cause of action  to the  order made  by the  revisional  authority would of necessity be a challenge to the original order also and the petition would be barred by the principles analogous to res judicata as the rest order had become final. The High Court was  clearly in  error in  dismissing the  petition on this short ground.      There is  yet another  fallacy in  the approach  of the High Court  while dismissing the petition as being barred by the principles  analogous to res judicata because the second relief claimed  by the  appellant in the second petition was never claimed  in the  first petition  and is an independent and separate  relief which  the High  Court was  invited  to grant if  the appellant  was otherwise  entitled to  it. The appellant, by prayer (b) of the petition, sought a direction that the  respondents be ordered to pay cash compensation to the appellant for the area of land which had been taken over by the  respondents. It  is nobody’s case that such a prayer was ever  made in  the first petition. In the first petition the grievance of the appellant was that the order dated 17th March,  1961  made  by  the  Chief  Settlement  Commissioner cancelling the  permanent settlement rights conferred on the appellant in  respect of  his land  was illegal and invalid. There was no claim for 408 compensation. A  claim for compensation was being separately pursued  by   the  appellant  and  he  did  not  invoke  the jurisdiction of  the High  Court praying  for a direction to pay him compensation. In the second petition from which this appeal arises  there is  a specific  prayer for compensation and Mr.  Narula, learned  counsel for  the appellant, stated

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that the  appellant is  not interested  in the  first prayer questioning the  validity of  the order  made by  the  Joint Secretary to  Government of  India dated 29th September 1964 affirming the  order dated  17th March,  1961 which  was the subject-matter of  the first  petition. Now,  if  claim  for compensation was  not raised in the first petition and if it is  specifically  raised  in  the  second  petition  on  the allegation that  as the land of the appellant has been taken over by  the Government  for its own use, if compensation is not  paid  it  would  be  deprivation  of  property  without compensation and  would be  denial of  fundamental right  to hold property,  it is  unthinkable that the present petition for this  particular relief  can ever  be dismissed  in  the facts of  this case  on the  ground that it is barred by the principles analogous  to res  judicata. For  this additional reason the order of the High Court is unsustainable.      And now  to the  facts of  the case.  The appellant  is admittedly a  displaced person to whom 32-1/2 standard acres of land  was allotted  and the  allotment admittedly  was on quasi permanent basis. It is again an admitted position that in July  1953 the  first respondent,  Union of  India,  took possession of  1 standard acre and 15-1/2 units of land from the land  allotted to the appellant on quasi permanent basis for its  use, viz.,  for  setting  up  a  colony.  Appellant contends that  he must  be paid compensation in cash for the land taken  over from  him. Respondents  on the  other  hand contend that  an allotment  of land on quasi permanent basis could be  resumed by  the first respondent when the land was required  for  its  own  use  and  on  such  resumption  the appellant  would   only  be  entitled  to  allotment  of  an equivalent area  of land  but in no case the appellant would be entitled to compensation in cash.      This  necessitates   examination  as  to  what  is  the interest of  the appellant  in the  land allotted  to him on quasi permanent basis and when and in what circumstances and for what  purpose it  can be  resumed or allotment cancelled and if  so resumed, to what relief the appellant is entitled to.      There has been a flood of enactments on the taking over and administration  of evacuee property as also compensation payable to  displaced persons.  This Court  in Amar Singh v. Custodian, Evacuee 409 Property,  Punjab,(1)   exhaustively  and   stage  by  stage examined  the  measures  taken  by  the  Central  and  State Governments  first  for  rehabilitating  displaced  persons, taking over  of properties  left by  those who  migrated  to Pakistan,  its   distribution  and  allotment  to  displaced persons who  came over to India on partition, and ultimately extinguishment of  the evacuee  interest in such properties. To recapitulate  them here  would be  merely adding  to  the length of this judgment. We would, therefore, only take note of the  conclusion reached in Amar Singh’s case (supra) with regard to  the interest  of the  displaced persons  to  whom agricultural land  was allotted  on quasi permanent basis up to July 22, 1952. Says the Court at page 823:           "(1) The allottee  is entitled to right of use and                occupation of property until such time as the                property remains vested in the Custodian;           (2)  The benefit  of such  right will enure to his                heirs and successors;           (3)  His enjoyment of the property is on the basis                of paying  land revenue  thereupon and cesses                for the  time being.  Additional rent  may be                fixed thereupon by the Custodian. If and when

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              he does  so, the allottee is bound to pay the                same;           (4)  He  is  entitled  to  quiet  and  undisturbed                enjoyment of the property during that period;           (5)  He is  entitled to  make improvements  on the                land with  the assent of the Custodian and is                entitled  to   compensation  in   the  manner                provided in the Punjab Tenancy Act;           (6)  He is  entitled to  exchange the whole or any                part of  the land for other evacuee land with                the consent of the Custodian;           (7)  He is entitled to lease the land for a period                not  exceeding   three  years   without   the                permission of  the Custodian  and for  longer                period  with  his  consent.  But  he  is  not                entitled to  transfer his  rights by  way  of                sale, gift,  will, mortgage  or other private                contract;           (8)  His rights  in the  allotment are  subject to                the fairly  extensive powers  of cancellation                under the  Act and  rules as  then  in  force                prior to July 22, 1952, on 410                varied  administrative   considerations   and                actions    such     as     the     following:                ..................."      Undoubtedly this  Court held that these quasi permanent rights in  land would  not be property within the meaning of Article  31   of  the   Constitution  and,   therefore,   if deprivation of  property is  complained of  a petition under Art. 32  would not  lie. However,  after concluding  in this manner this  Court summed up the position with regard to the interest of quasi permanent holder in his holding as under :           "In holding  that quasi-permanent  allotment  does      not carry with it a fundamental right to property under      the Constitution  we are  not to be supposed as denying      or weakening  the scope  of the rights of the allottee.      These rights  as recognised  in the statutory rules are      important and  constitute  the  essential  basis  of  a      satisfactory rehabilitation and settlement of displaced      land-holders. Until  such time  as  these  land-holders      obtain sanads  to the  lands, these rights are entitled      to  the   zealous   protection   of   the   constituted      authorities  according   to  administrative  rules  and      instructions binding  on them,  and of  the  courts  by      appropriate proceedings  where there  is usurpation  of      jurisdiction or abuse of exercise of statutory powers". After re-affirming  the  position  of  the  quasi  permanent allottees as herein quoted, this Court in State of Punjab v. Suraj Prakash Kapur, etc.,(1) held that after July 22, 1952, the Custodian  ceases to  have any  authority to  cancel  or modify quasi  permanent allotment.  This enunciation  of the interest of  the  quasi  permanent  allottees  in  the  land allotted  to  them  should  dispel  any  doubt  about  their entrenched interest  in the  land. Nor could it be said that those allottees  were at  the mercy of the Custodian and can be dispossessed at his whim or caprice. These were heritable rights and  the holders  were  entitled  in  due  course  to permanent settlement  by issuance of sanads. But even before this situation  was reached a fundamental change occurred in the position  of the Custodian vis-a-vis the quasi permanent allottees about  the right of the former to cancel allotment and resume  land. In  exercise of the powers conferred by s. 56 of  the Administration of Evacuee Property Act, 1950, the Central Government enacted what are styled as Administration

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of Evacuee  Property (Central)  Rules, 1950  Rule 14 recites the power  of the  Custodian to  vary or cancel the lease or allotment under  certain  circumstances  mentioned  therein. Initially sub-rule  (6) was  added to this rule and later on it was modified where- 411 by the  power to  cancel any  allotment  or  resume  evacuee property allotted on quasi permanent basis was circumscribed and was  available in the circumstances mentioned in amended sub-rule (6).  The amendment  effective from  22nd July 1952 had  undoubtedly   the  effect   of  modifying  and  thereby restricting the  power of  resumption or cancellation vested in the Custodian in respect of quasi permanent allottees and the power was confined within very narrow limits. Therefore, subsequent to  July  22,  1952,  the  Custodian  of  Evacuee Property   would have  the power to cancel an allotment only upon a  ground which  falls within the exceptions enumerated in sub-rule  (6) (vide  Joginder  Singh  &  Ors.  v.  Deputy Custodian General  of Evacuee  Property). (1)  We  need  not examine   the   circumstances   in   which   resumption   or cancellation can  be ordered  under the amended sub-rule (6) of rule  14 because  it is  not the  case of the respondents that the land was resumed in exercise of the power conferred by rule  14  and  in  one  or  other  of  the  circumstances mentioned in  sub-rule (6)  thereof. Suffice  it to say that after July  22, 1952,  the Custodian  had  no  authority  to cancel quasi  permanent allotment  and resume land except in the circumstances  and contingencies  mentioned in  sub-rule (6) of  rule 14  and that having not been done, it cannot be contended on behalf of the respondents that the land in this case allotted  on quasi  permanent basis  to  appellant  was resumed by  the Custodian.  Two fact situations material and necessary for  raising this  contention are  absent in  this case. There  is no  material placed on record, including the counter-affidavit,  which  would  show  that  the  Custodian resumed the  land of  the appellant in exercise of the power conferred by  rule  14  and  in  one  of  the  circumstances mentioned in  sub-rule (6).  And secondly,  no such order of Custodian is  forth-coming even  after  time  was  given  to produce the file.      Mr. Hardev  Singh, however,  contended that even though sub-rule (6) of rule 14 as amended up to July 22, 1952 would not enable  the Custodian to resume land or cancel allotment granted on quasi permanent basis except in the circumstances mentioned in  sub-rule (6), yet the State Government had the requisite power  under a  rule  made  by  the  Punjab  State Government on  29th August,  1951. It  was contended that in exercise of  the powers  delegated by the Central Government under sub-s.  (1) of  s. 55 of the Administration of Evacuee Property Act,  1950, to  make rules under clause (i) of sub- section (2)  of s.  56, the Punjab Government made the rule, the relevant portion of which reads as under : 412           "The Custodian  shall be  competent to  cancel  or      terminate any  lease or  allotment or vary the terms of      any lease,  allotment or agreement and evict the lessee      allottee in any one of the following circumstances;      ..             ..                  ..             ..           (h) that it is necessary or expedient to cancel or      vary  the   terms  of   a   lease/allotment   for   the      implementation  of   resettlement  schemes-and/or-rules      framed by the State Government or for such distribution      amongst displaced  persons as  appears to the Custodian      to be equitable and proper".      Mr.  Hardev   Singh  contended   that  presumably   the

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Custodian at  the State  level cancelled  the  allotment  in respect  of   the  land  taken  over  for  resettlement  and rehabilitation  of  refugees  from  Kashmir  and  that  this cancellation and  resumption must  be for  implementation of resettlement scheme  or under  the  rules  framed  for  such resettlement schemes by the State Government and, therefore, the resumption  was one  under the Administration of Evacuee Property Act  and it was not a case of either acquisition or taking over of the land of the petitioner.      There is  no material  placed before us to support this submission.  In  the  counter-affidavit  on  behalf  of  the respondents not  one word has been stated that the Custodian at State level cancelled the allotment and resumed the land. The stand  taken in  the return  filed in  the High Court is that evacuee area measuring 7.88 acres was taken over by the Government for  construction and development of a colony for rehabilitation of  300 Kashmiri  displaced persons  and that such land  included an  area of  1 standard  acre and 15-1/2 units of the land allotted to the petitioner. It was further stated that  this land of the appellant stood acquired under s.   12   of   the   Displaced   Persons   (Compensation   & Rehabilitation)  Act,  1954.  There  is  not  the  slightest suggestion that the Custodian in exercise of the power under the aforementioned rule cancelled the allotment in favour of the appellant and resumed the land. If such is not the case, the  power   claimed  under   the  rule   cannot  help   the respondents.  Assuming   that  there  was  power  to  cancel allotment and  resume land under the State Rules, it must be shown that  the State  Government had  framed a resettlement scheme and  for the  purpose of the scheme the allotment was cancelled and  land was  resumed. The fact pleaded is to the contrary that the Union of India took possession of the land for setting  up a  colony. This  also becomes clear from the letter written  by the  Secretary to  Government of  Punjab, Rehabilitation Department,  Annexure ’F’  wherein it  was in terms stated that 413 the  land   in  question  was  not  acquired  by  the  State Government but  stood acquired  by the Central Government in terms of  the  general  notification  issued  in  1955  and, therefore,  the  Government  should  concur  in  payment  of compensation out of the funds allotted for setting up of the colony. From  the contents of the letter which have remained uncontroverted the  situation that  emerges is that the land was acquired  by the Central Government for its own use. The Central Government  could exercise  powers under the Central Rules. It  had not asked the State Government to acquire the land. Therefore,  the power conferred on the State Custodian under the  State Rules  would not  help the  respondents  as contended by Mr. Hardev Singh.      It was  next contended  that on the introduction of the 1954 Act  and the  issuance of Notification under s. 12, all evacuee property  was acquired by the Central Government and under sub-s.  (4) of  s. 12  such acquired  evacuee property formed part  of the  compensation pool.  It was further said that if  acquisition was  under s.  12 of  the 1954 Act, the allottee of  land on quasi permanent basis would be entitled to compensation  as provided by rule 49 of Displaced Persons (Compensation &  Rehabilitation) Rules,  1955, and  in  that event he  would be  entitled to compensation by allotment of agricultural land  but not  cash compensation. To understand the full  import of  the submission it is necessary to state that when  there was  migration of  large number  of persons both the  ways  from  India  to  Pakistan  and  vice  versa, initially such  property left  by  migrants  from  India  to

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Pakistan was  taken over  for the  purpose of administration under  the  provisions  of  the  Administration  of  Evacuee Property  Act,   1950.  This   Act  broadly   provided   for appointment of  Custodian General  of Evacuee  Property  and other authorities subordinate to him. The authorities set up under the  Act were  empowered to declare certain properties to be  evacuee property  and any  property  so  declared  as evacuee property  would, under  s. 8,  vest in the Custodian for the State. The Custodian was empowered to administer the property and  the powers  and duties  of the  Custodian were enumerated in s. 10. In exercise of this power the Custodian allotted  lands   on  quasi  permanent  basis  to  displaced persons. But  this was  an unsatisfactory  situation because the interest of the evacuee in the evacuee property remained intact and  till such evacuee interest was extinguished, the evacuee property could not be settled on permanent basis. In order to  obviate  this  difficulty  the  Displaced  Persons (Compensation &  Rehabilitation) Act,  1954, was  enacted by Parliament.  Section   12  provided   for  issuance   of   a notification as  hereinabove mentioned  and sub-s. (2) of s. 12  amongst  others  provided  that  the  right,  title  and interest of any evacuee in the evacuee property specified in 414 the notification  shall, on  and from  the beginning  of the date  on   which  the   notification  is  so  published,  be extinguished and  the evacuee property shall vest absolutely in  the  Central  Government  free  from  all  encumbrances. Evacuee properties  acquired in  this manner would form part of the compensation pool.      If the  scheme of  the  1954  Act  is  as  hereinbefore mentioned, we  fail  to  see  how  the  property  which  was admittedly allotted  to the  appellant  on  quasi  permanent basis and  which was taken over by the Central Government in July 1953,  i.e. much  before the  introduction of  the 1954 Act, became property of the compensation pool. Assuming that even though  it was  taken over by the Central Government in July 1953,  the evacuee  interest therein  having  not  been extinguished till the issue of a notification under s. 12 of the 1954  Act and, therefore, on the issue of a notification the property  became part  of  the  compensation  pool,  the consequences provided  in 1954 Act must ensue, viz., that so long  as   the  property  remained  vested  in  the  Central Government it  shall continue in possession of the person to whom it was allotted on the same conditions on which he held the property  immediately before the date of acquisition. In this connection  reference to s. 10 of the 1954 Act would be advantageous. The relevant portion reads as under :           "10. Where  any immovable property has been leased      or allotted  to a  displaced person  by  the  Custodian      under the conditions published :-           (a)  by the  notification  of  the  Government  of                Punjab in  the Department  of  Rehabilitation                No. 4891-S  or 4892-S,  dated  the  8th  July                1949; or           (b)  by the  notification  of  the  Government  of                Patiala and  East Punjab  States Union in the                Department of  Rehabilitation No.  8R or  9R,                dated the  23rd July,  1949, and published in                the Official Gazette of that State, dated the                7th  August   1949,  and   such  property  is                acquired under the provisions of this Act and                forms part  of  the  compensation  pool,  the                displaced  person   shall,  so  long  as  the                property  remains   vested  in   the  Central                Government, continue  in possession  of  such

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              property on  the same  conditions on which he                held the property immediately before the date                of   the   acquisition,   and   the   Central                Government may, for the purpose of payment of                compensation  to   such   displaced   person,                transfer to  him such  property on such terms                and conditions as may be prescribed." 415      Now,  indisputably   the  appellant  was  allotted  the property on  quasi  permanent  basis  under  the  conditions published by the notification of the Government of Punjab in the Department of Rehabilitation, dated 8th July 1949. If he had continued to hold the property on the clate on which the notification under  s. 12 of the 1954 Act was issued, by the operation of s. 10 he would be entitled to hold the property till the  property remained vested in the Central Government and would be entitled to payment of compensation by transfer to him  of such property on terms and conditions that may be prescribed. Therefore,  if 1954 Act is not attracted because the property  in question  was already  taken  over  by  the Central Government  in July  1953 much  before the  1954 Act came  into  force  neither  s.  12  nor  Rule  49  would  be attracted. If  on the other hand the evacuee interest in the property  came   to  be  extinguished  on  the  issue  of  a notification under  s. 12  of the 1954 Act, its consequences would be  as provided  in s.  10 and  the appellant would be entitled to  hold the  property till it continues to vest in the Central Government under s. 12. In either event he would be entitled to compensation.      Mr. Hardev Singh, however, urged that assuming that the appellant is entitled to compensation for taking over of his land the land having formed part of the compensation pool on the issue of a notification under s. 12 and the allotment in this case  being one  not  under  the  notification  of  the Government of  Punjab  dated  8th  July  1949  but  a  fresh allotment under  s.  10,  the  compensation  would  only  be payable in  the form  of land under rule 49. There is a two- fold fallacy  in this  submission. Indisputably the land was allotted to  the appellant under the conditions published by the notification of the Government of Punjabs dated 8th July 1949 and  s. 10  does not purport to make a fresh allotment. It merely  takes note  of the  earlier allotment and assures that  if  the  displaced  person  has  continued  to  be  in possession  of   the  land  allotted,  on  the  issue  of  a notification under  s. 12  and the land becoming part of the compensation  pool,  such  allottee  would  be  entitled  to continue  in   possession  of  such  property  on  the  same conditions on  which he held the property immediately before the date of acquisition by issue of notification under s. 12 till  the   property  continues   to  vest  in  the  Central Government and  further he would be entitled to the transfer of such  property to  him presumably on permanent settlement basis as  and by  way of  compensation. Section  10 does not permit a  construction as  canvassed for by Mr. Hardev Singh that a fresh allotment could be made under s. 10 416      Further, rule 49 which provides that compensation shall be in the from of land will have to be read with r. 69 which reads as under:           "69. Saving-Nothing in this Chapter shall apply to      agricultural land  allotted in the States of Punjab and      Patiala and  East Punjab  States Union under section 10      of the Act."      It will  immediately appear  that where  allotment  was made under  the conditions  published by the notification of

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the Government  of Punjab  dated 8th July 1949, the whole of Chapter VIII of the 1955 Rules which includes Rules 49 to 69 would  not  apply.  In  this  case  appellant  was  allotted agricultural  land   and  the   allotment  was   under   the notification hereinbefore  mentioned which  has been set out in rule  10(a) and in that situation provisions contained in Chapter VIII of the Rules would not be attracted. Therefore, rule 49 cannot be called in aid by the respondents.      The last  contention, however, is that if the appellant is a displaced person and he was being allotted land against a verified claim in respect of agricultural land held by him in Pakistan,  ordinarily compensation  for land  taken  over must be  in the  form of  land and  not  in  form  of  cash. Ordinarily it  should be  so. But  in  this  connection  the experience gained  by the  Government in  disposing  of  the claims cannot  be overlooked.  There were allottees of small plots of  land. Once  allotment is  made and  thereafter the land is  taken over  by the  Government  a  fresh  allotment cannot be  in a  compact area and if a small plot of land is allotted at  a distant  place the allottee would be put to a serious disadvantage.  Realising this position, at a meeting between the  officers  of  the  Punjab  Government  and  the Ministry of Rehabilitation of the Central Government held on 27th August 1957, a decision was taken which was notified by the Press  Note Annexure  ’A’ of  the very date. It provides that there  are large  number of  displaced  land  allottees whose whole  or part  of  the  land  were  acquired  by  the Government for  various public  purposes and their claim for cash compensation is pending. Such of the allottees who have acquired permanent rights and others who are quasi permanent allottees and small pieces of their land are acquired by the Government, should  send their  applications to  the  Deputy Secretary  to   the  Government  of  Punjab,  Rehabilitation Department, Jullundur,  giving various  details therein. The decision further provided that quasi permanent land allottes whose land  exceeding two  standard acres have been acquired should apply  for alternative  allotment to  the Land Claims Officer, and  those whose  land admeasuring  less  than  two standard acres  is acquired  should  apply  for  payment  of compensation in  cash. The  decision was the decision of the Central 417 Government and  the Punjab  State Government  that displaced persons to  whom lands  were  allotted  on  quasi  permanent basis, part  of which  was taken over for public purposes by the Government and where the land acquired was less than two standard acres  in area, payment of compensation would be in cash  and   applications  were   accordingly  invited.  This decision was  affirmed in  the letter  of the  Secretary  to Government of  Punjab, Rehabilitation  Department, addressed to his  counterpart in  the Central Government wherein after referring to  the meeting  dated 27th  August, 1957  and the decision arrived  at it, he requested the Central Government that the  appellant would  be entitled  to cash compensation because the  land taken  over from  him was  less  than  two standard acres  and was  covered by the decision arrived at, at the meeting and that the Central Govermnent should concur in payment  of compensation  out of  the funds  allotted for setting up  the colony  for which  the land was acquired. In the face  of this  position it is difficult to entertain the contention that  compensation in  cash was never payable for agricultural  land   taken  over   from  a  quasi  permanent allottee. It  was said  that  such  a  decision  which  runs counter to  the statute  cannot be  given effect  to by  the Court. Once  Chapter VIII  of 1955 Rules and especially rule

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49 which provides for payment of compensation in the form of land is  out of the way, we see nothing in the statute which would  debar   a   quasi-permanent   allottee   asking   for compensation in  cash and the Government paying the same. In fact the  appellant has  averred in  his petition and in his affidavit that  on former  occasion he was paid compensation in cash  and the denial is on the ground of want information which can frankly be styled as a vague one.      Now it  is indisputable  that the appellant was a quasi permanent allottee  and that his land admeasuring 1 standard acre and  151/2 units  had been  taken over  by the  Central Government in July 1953. In view of the decision recorded in the Press  Note referred  to above  he would  be entitled to compensation in  cash which  has not  been paid  to him. The appellant would  be entitled to compensation in cash for the interest that he had in the land because land was taken away from him.  What is  the quantum of compensation will have to be worked  out  according  to  law  and  the  modalities  of determining the compensation.      This appeal  accordingly succeeds  and is  allowed. The respondents are  directed to pay the compensation in cash to the appellant  for the  land admeasuring 1 standard acre and 151/2 units taken over in July 418 1953.  As   there  is  a  delay  of  nearly  25  years,  the respondents should  pay the  compensation as directed herein within a period of six months from today. Respondents should also pay  the costs  of the  appellant and  bear  their  own costs. P.B.R.                                       Appeal allowed. 419