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PETITIONER: SHRI MITHOO  SHAHANI AND ORS.

       Vs.

RESPONDENT: UNION OF INDIA AND ORS.

DATE OF JUDGMENT: 10/03/1964

BENCH: AYYANGAR, N. RAJAGOPALA BENCH: AYYANGAR, N. RAJAGOPALA GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. SHAH, J.C. SIKRI, S.M.

CITATION:  1964 AIR 1536            1964 SCR  (7) 103  CITATOR INFO :  D          1965 SC 134  (3)  RF         1969 SC1297  (8)

ACT: Evacuee  Property-Land Allotted to  respondents-Subsequently the  same  land  allotted  to  appellants-Sanad  issued   to appellants  under the Act-Allotment in favour of the  appel- lant  set aside-Can sanad subsist when allotment set  aside- Displaced  Persons  (Compensation and  Rehabilitation)  Act, 1954 (Act XLIV of 1954), s. 33.

HEADNOTE: The  appellants  and  the five  respondents  were  displaced persons.    The  Deputy  Custodian  of  Nizamabad   District allotted  about  60 acres of land to the  five  respondents. The  allotment was by way of lease.  There was no  condition imposed  upon  them  that they should  cultivate  the  lands personally.   While the lease was continuing in  force,  the Government of India issued a Press Note on November 13, 1953 by  which  they  announced that they had  decided  to  allot evacuee  agricultural land in Hyderabad State  to  displaced persons whose claims for agricultural land had been verified under  the  Displaced  Persons  (Claims)  Act,  1950.    The appellants made an application in pursuance of this  notifi- cation  and on May 4, 1954 the land now in  dispute,  though under  a subsisting lease in favour of the respondents,  was allotted to them. In  the  mean time the Displaced Persons  (Compensation  and Rehabilitation)  Act,  came into force on October  9,  1954. Under  Section 20 of this Act, the Regional Settlement  Com- missioner  issued Sanads in favour of appellants in  respect of  these  lands.  Both the appellants and  the  respondents claimed  these  disputed plots.  The matter went up  to  the Deputy Chief Settlement Commissioner.  He referred the  case of both parties to the Government of India for action  under s. 33 of the Act.  The matter was considered under s. 33  of the  Act  by  the Deputy  Secretary  in  the  Rehabilitation Ministry  who upheld the contentions of  these  respondents. The  result  was that the allotment made in  favour  of  the

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appellants was set aside.  It is the legality of this  order that is challenged in this appeal. Held-(i) The order of the Central Government was covered  by s. 33 of the Act as one dealing with and rectifying an error committed in relation to a "thing done or action taken" with respect  to  a rehabilitation grant to a  displaced  person. Not  merely the order of the Regional Settlement  Commission rebut  the entire question as to whether the respondents  as original  allottees  by way of lease were  entitled  to  the relief of restoration was referred to the Central Government by  reason  of  the order of  the  Deputy  Chief  Settlement Commissioner.  Both the parties were heard on all the points by the Central Government before the orders were passed  and it would not therefore be right to consider that the  matter in  issue  before  the Central  Government  was  namely  the correctness   of  the  order  of  the  Regional   Settlement Commissioner, which read in vacuo might not be  comprehended within s. 39 of the Act. (ii) It is manifest that a Sanad can be lawfully issued only on the basis of a valid order of allotment.  If an order  of allotment which is the basis upon which a grant is -made 104 is  set  aside  it  would  follow,  and  the  conclusion  is inescapable that the grant cannot survive, because in  order that grant should be valid, it should have been effected  by a competent officer under a valid order.  If the validity of that  order  is  effectively  put an end  to,  it  would  be impossible  to  maintain  unless  there  were  any   express provision  in the Act or in the rules, that the grant  still stands.  On the facts of this case it was held that where an order making any allotment was set aside the title which was obtained on the basis of the continuance of that order  also fell with it. Partumal  v. Managing Officer, Jaipur, I.L.R. 11 Raj.  1121, distinguished. Balwant  Kaur  v.  Chief  Settlement  Commissioner  (Lands), I.L.R. [1964] Punjab 36, approved.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 552 of  1963. Appeal by special leave from the order dated April 28,  1960 of the Deputy Secretary to the Government of India, Ministry of  Rehabilitation,  New Delhi, purporting to  exercise  the powers  of  Revision under s. 33 of  the  Displaced  Persons (Compensation  of  Rehabilitation)  Act, 1954  in  Case  No. 38(894)/59 Neg.  A.                             With Writ Petition No. 108 of 1960. Petition under Art. 32 of the Constitution of India for  the enforcement of Fundamental Rights. Achhru  Ram  and N. N. Keswani, for the appellants  and  the petitioners. N.   S. Bindra and B. R. G. K. Achar, for respondents Nos. 1 and 2   (in both the appeal and petition). M.   C.  Setalvad, K. Jairam and R. Ganapathy Iyer, for  the respondents Nos. 3 to 7 (in both the appeal and petition). March 10, 1964.  The Judgment of the Court was delivered by AYYANGAR,  J.-The appeal, by special leave, is  directed  to question  the correctness of an order passed by  the  Deputy Secretary   to   the  Government  of  India,   Ministry   of Rehabilitation  under s. 33 of the Displaced  Persons  (Com- pensation and Rehabilitation) Act, 1954 (Central Act XLIV of 1954) which for convenience will be referred to hereafter as

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the Act. The  facts necessary to appreciate the points urged be  fore us  are briefly these: The property in dispute  is  agricul- tural land of an extent of about 60 acres situated at Nizam- abad in the former State of Hyderabad and now in the State 105 of  Andhra  Pradesh.  On September 7, 1950 the  Deputy  Cus- todian of Nizamabad District allotted 44 acres of this  land to  five  persons who are the respondents  before  us.   All these five were displaced persons and were entitled to  this allotment.   By  a  further order dated July  21,  1951  the balance  of the 16 acres and odd was also allotted  to them. The   allotment  was  by  way  of  lease  and  one  of   its stipulations  was  that  the terms of  the  lease  would  be revised only after five years.  The only point that needs to be  stated about the terms of this lease is, that there  was no  condition  imposed  upon the lessees  that  they  should cultivate  the  lands  personally.   While  the  lease   was continuing in force, the Government of India issued a  press note on November 13, 1953 by which they announced that  they had decided to allot evacuee agricultural land in  Hyderabad State  to  displaced persons whose claims  for  agricultural lands had been verified under the Displaced Persons (Claims) Act,  1950.  It further stated that the allotments would  be towards  the  settlement  of  claims  in  respect  of  their agricultural  lands.   The allotment was to be on  the  same terms  as under the quasi-permanent allotment scheme in  the Punjab  and  applications for allotment  were  invited  from persons   residing  inter-alia  in  Hyderabad  State   whose verified  claims  included a claim for  agricultural  lands. The  press note prescribed the 31st of December as the  last date for the receipt of these applications.  The  appellants made an application in pursuance of this notification and on May  4,  1954 the land now in dispute, though under  a  sub- sisting lease in favour of the respondents, was allotted  to them on quasi-permanent tenure.  It is not disputed that the appellants   satisfied   the   qualifications   for   making applications  under  the press note and for  being  allotted evacuee property thereunder.  The order of allotment, a copy of  which  was  forwarded  to  the  Collector  of  Nizamabad district, contained a request that the allottees may be  put in  possession  of the land and the fact  intimated  to  the office of the Regional Settlement Commissioner.  The revenue authorities acting on this request or direction dispossessed the  respondents from the lands leased to them and  put  the appellants in possession thereof. Thereafter,  the  respondents made a representation  to  the Regional  Settlement Commissioner, Bombay pointing out  that they were displaced persons who having been rehabilitated by the allotment by way of lease were now being uprooted.  They also  pointed out that they had incurred large  expenses  in improving the land and bringing it into proper  cultivation. These   applications   were  considered  by   the   Regional Settlement Commissioner who by his order dated July 10, 1954 rejected their application. It is not necessary 106 to  set out the reasons for making this order except to  say that one of them was the failure on the part of the  lessees to  personally cultivate the lands.  The respondents,  then, moved the Regional Settlement Commissioner requesting him to review  his order and they also sought relief from the  Gov- ernment of India seeking intervention in their favour. Subsequent to this date the Act was enacted and it came  in- to  force  on October 9, 1954.  Section 12 of  the  Act  em- powered  the Central Government to acquire evacuee  property

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for  rehabilitation  of displaced persons and  in  pursuance thereof  the  properties  now in dispute  were  acquired  by Government by a notification dated January 18, 1955.  During the  pendency  of the proceedings by which  the  respondents ,sought  to  obtain a reversal of the order dated  July  10, 1954 and without reference to them, the Regional  Settlement Commissioner issued sanads in favour of appellants 1 to 4 on January 12, 1956 acting under s. 20 of the Act. The Deputy Chief Settlement Commissioner who dealt with  the representations  made by the respondents passed an order  on August  22, 1958 after obtaining a report from the  Regional Settlement Commissioner.  He pointed out in his ,order  that there was no indication from the papers on the file that the land  was originally leased to the respondents on  condition that  they  should  cultivate  the  lands  personally.    He therefore  set  aside the order of the  Regional  Settlement Commissioner dated July 10, 1954 and remanded it for further enquiry  directing  the  passing of  fresh  orders  after  a thorough  enquiry.  Thereafter a report was called  for  and obtained  from the Collector who conducted this enquiry  and in his report dated June 13, 1959 he recorded a finding that there  had  been personal cultivation of the  lands  by  the respondents.  He pointed out that of the 60 acres comprising the  entire  extent,  26 guntas were allotted  on  a  quasi- permanent basis to other displaced persons in 1954 and  this extent was therefore out of the controversy.  It ought to be mentioned  that  the order of the  Deputy  Chief  Settlement Commissioner  which  was  of the date August  22,  1958  was apparently  by  inadvertence passed without  notice  to  the appellants.   When this was brought to his notice after  the remand  he  issued notice to them and  after  hearing  them, referred  the  case to the Government of  India  for  action under  s. 33 of the Act.  The matter was considered  by  the Deputy  Secretary in the Rehabilitation Ministry  who  heard all  the  parties and recorded the following  findings:  (1) that the order dated July 10, 1954 refusing to transfer  the lands  to the respondents was wrong, and (2) that there  was no justification for terminating the lease and depriving the respondents of possession of the 107 property  now in dispute and on these findings directed  the sanads granted to the appellants to be revoked and the  res- pondents  be put in possession of the property.  It  is  the legality of this order that is challenged in this appeal. Three  points were urged by Mr. Achhru  Ram-learned  Counsel for  the appellant: (1) that the Central Government  had  no power under s. 33 of the Act to revise      the order of the Regional   Settlement Commissioner dated July 10, 1954,  (2) that even assuming that that order was capable of  revision, the  land in dispute had been transferred to the  appellants irrevocably  by way of quasi-permanent allotment and  sanads issued and that thereafter the title under the sanads  which had been granted in the name of the President of India could not be disturbed except in accordance with the terms of  the sanads,  (3) that the Deputy Secretary in the Government  of India  had no materials before him on the basis of which  he could find that the order dated July 10, 1954 was  erroneous and required to be revised. We shall deal with these points in the same order.   Section 33 under which the order under appeal was made reads:               "The  Central Government may at any time  call               for  the record of any proceeding  under  this               Act  and  may  pass  such  order  in  relation               thereto as in its opinion the circumstances of               the  case require and as is  not  inconsistent

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             with  any of the provisions contained in  this               Act or the rules made thereunder." In considering the argument addressed to us under this  head there  are  two points to be borne in mind.   If  the  order dated  July 10, 1954 passed by the Regional Settlement  Com- missiooner was "a proceeding under this Act" then  obviously there  is no limitation on the power of the Central  Govern- ment to pass "such order as in the circumstances of the case was  required".   Of course, the Central  Government  cannot pass  an  order  which  is  inconsistent  with  any  of  the provisions contained in the Act or the Rules made thereunder and subject to the objection made that after the transfer of property  and  the grant of a sanad under s. 20 of  the  Act read with r. 91(8) in the form specified in Appendix XXIV to the  Rules  which  is the second  point  raised  by  learned Counsel,  it was not suggested that the order  now  impugned was  inconsistent with any of the provisions of the  Act  or the  Rules made thereunder.  Whether the opinion  which  the Central  Government entertained was correct or incorrect  on the evidence would, of course, not fall for consideration by this  Court in an appeal under Art. 136 but as  regards  the contention that 108 the  order is illegal or invalid as distinct from its  being incorrect,  we shall deal with it in considering the last of the arguments submitted to us by learned Counsel. It  was  urged  that the order of  the  Regional  Settlement Commissioner  which the Central Government revised under  s. 33  was not "a proceeding under the Act" having been  passed before the Act came into force and was therefore outside its jurisdiction under s. 33 of the Act.  The answer to this is, however  furnished by s. 39 of the Act.  That section  deals with orders passed prior to the commencement of the Act  and renders "all things done" or "action taken" in the  exercise of powers conferred by or under this Act as if the Act  were in  force  on the date when such thing was  done  or  action taken.  Section 39 enacts:               "Anything done or any action taken  (including               any  order  made)  by  the  Chief   Settlement               Commissioner,     Settlement     Commissioner,               Additional    Settlement   Commissioners    or               Settlement   Officers  for  the  purposes   of               payment  of  compensation  or   rehabilitation               grants  or other grants to  displaced  persons               shall,  in  so far as it is  not  inconsistent               with the provisions of this Act, be deemed  to               have been done or taken in the exercise of the               powers  conferred by or under this Act  as  if               this  Act were in force on the date  on  which               such thing was done or action was taken." It  was then suggested that since the order dated  July  10, 1954 had merely rejected an application filed by the respon- dents  for restoring them to possession of lands from  which they complained they had been unjustly dispossessed, it  was not  "a  thing  done" or "action taken for  the  purpose  of payment  of  compensation or rehabilitation grants  to  dis- placed  persons"  so as to be deemed to be taken  under  the provisions  of  this  Act.  The same point was  urged  in  a slightly  different form by saying that even if the  Central Government  could interfere and set aside the order  of  the Regional  Settlement Commissioner dated July 10, 1954  still they  could  not direct the cancellation of  the  sales  and grants of sanads to the appellants and that as this was  not a  matter  pending before them, the order in so  far  as  it directed   the   cancellation   of  the   sanads   and   the

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dispossession  of the appellants from the disputed  property was  without jurisdiction.  We do not see any  substance  in the points stated in either form.  In the first place,  even if  learned Counsel is right in submitting that the  Central Government should have stopped with setting aside the  order dated  July  10, 1954 the result would have been  the  same, because  the  prayer  which was  rejected  by  the  Regional Settlement Commissioner when he 109 passed  that order was that contained in an  application  by the  respondents  that  they  should  be  restored  to   the possession   of   the  lands  from  which  they   had   been dispossessed.   If  that  prayer had to be  granted  on  the reversal  of  the  order  dated  July  10,  1954  it   would inevitably  have meant that the appellants should have  been deprived  of possession which is exactly what the order  now impugned   has  directed.   As  the  dispossession  of   the appellants  was  consequential on the setting aside  of  the order  dated July 10, 1954 the appellants do not obtain  any advantage  by  raising  the  contention  that  the   Central Government should have confined itself to setting aside that order  and  doing nothing more.   Besides,  this  submission proceeds  from  not appreciating the matters that  were  the subject  of consideration before the Central Government  and were considered by them at the time when the impugned  order was passed.  The facts were that there had been an allotment by  way  of lease as a rehabilitation grant to  persons  who were  admittedly displaced persons in 1950-51. It was  "this thing  done"  that  had been upset in  1954  and  which  was restored  by the order of July, 1954 being set aside by  the order  under  s.  33 of the Act.  In  substance  and  effect therefore the impugned order was dealing with and rectifying an  error committed in relation to a "thing done  or  action taken" with respect to a rehabilitation grant to a displaced person.   Not merely the order dated July 10, 1954  but  the entire  question as to whether the respondents  as  original allottees  by  way of lease were entitled to the  relief  of restoration was referred to the Central Government by reason of  the order of the Regional Settlement Commissioner  dated November  3, 1959.  Both the parties were heard on  all  the points  by  the Central Government before  the  orders  were passed and it would not therefore be right to consider  that the  matter  in  issue before  the  Central  Government  was technically  merely  the  correctness of the  order  of  the Regional Settlement Commissioner dated July 10, 1954,  which read in vacuo might not be comprehended within s. 39. The  next  point that was urged was that the  appellant  had been  granted  sanads  on January 12, 1956  and  that  their sanads could. not be cancelled and the title acquired there- displaced- except in accordance with the terms of the sanads The  term  of  the sanad which is  relevant  and  which  was referred  to  as the sole ground on which it  could  be  set aside and the title of the appellants displaced reads:               "It  shall  be  lawful for  the  President  to               resume  the  whole  or any part  of  the  said               property if the Central Government is, at  any               time,  satisfied  and records  a  decision  in               writing  to that effect (the decision  of  the               Central Government in this behalf               110               being  final)  that  the  transferee  or   his               predecessor   in-interest  had   obtained   or               obtains  any  other compensation in  any  form               whatsoever  under  the said Act  by  fraud  or               misrepresentation."

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It  is  not disputed that this condition has not  been  ful- filled but the question, however, is whether when the  order of allotment on the basis of which the property was  granted to the appellant and the sanad issued, is itself reversed or set  aside can the sanad and the title  obtained  thereunder survive?  On this point there are two decisions to which our attention  was invited-the first is a decision of  the  High Court  of  Rajasthan in Partumal v. Managing  Officer,  Jai- pur(1),  being  a decision of a Full Bench  of  that  Court. That  case was concerned With the construction of s.  24  of the  Act which deals with the power of the Chief  Settlement Commissioner  to  revise  orders  passed  by  a   Settlement Officer, Assistant Settlement Officer, Assistant  Settlement Commissioner,  Additional Settlement Commissioner etc.   The relevant  part of the head-note brings out the point of  the decision.  It reads:               "Section   24   of   the   Displaced   Persons               (Compensation  and Rehabilitation) Act,  1954,               no doubt confers very wide powers of  revision               on  the Chief Settlement Commissioner, but  it                             does not authorise cancellation of sal es  after               they are completed.  No doubt, allotments  can               be set aside under s. 24 of the Act, but after               such allotments ripen into sales, they  cannot               be    cancelled.    The    Chief    Settlement               Commissioner,  but  it  does  not  authosioner               exercising  his  power  has  no  authority  to               cancel  sale  of  property  and  an  order  of               cancellation  of sale of property  is  without               jurisdiction  and  invalid.  It would  be  too               much to read in s. 24 of the Act to hold  that               it   extends  to  cancellation  of  sales   by               expressly   providing  for   cancellation   of               allotments.  The execution of a sale deed can-               not be regarded as only a formal expression of               an order of allotment dependent on its subsis-               tence." Subsequent  to  this decision a case arose before  the  High Court of  Punjab: Balwant Kaur v. Chief Settlement Commiss- ioner  (Lands)(2  )  and a Full Bench of  that  Court  by  a majority  dissented  from this view and held that  where  an order making an allotment was set aside the title which  was obtained on the basis of the continuance of that order  also well with it We are clearly of the opinion that the judgment (1)  I.L.R. 11 Rajasthan 1121. (2) I.L.R. [1964] Punjab 36. 111 of   the  Punjab  High  Court  is  correct.   The   relevant provisions of the Act and the Rules have all been set out in the decision of the Punjab High Court and we do not consider it  necessary  to  refer  to them  in  any  detail.   It  is sufficient  to  say that they do not contain  any  provision which  militates  against the position which  is  consistent with  principle and logic.  It is manifest that a sanad  can be  lawfully  issued only on the basis of a valid  order  of allotment.  If an order of allotment which is the basis upon which a grant is made is set aside it would follow, and  the conclusion  is  inescapable that the grant  cannot  survive, because  in order that that grant should be valid it  should have  been  effected by a competent officer  under  a  valid order.  If the validity of that order is effectively put  an end to it would be impossible to maintain unless there  were any  express provision in the Act or in the rules  that  the grant still stands.  It was not suggested that there was any

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provision  in  the Act or in the rules  which  deprives  the order, setting aside an order of allotment, of this  effect. We do not therefore consider that there is any substance  in the second point urged by learned Counsel. The  last of the points urged was that the Deputy  Secretary who passed the impugned order had no materials upon which he could find that the order dated July 10, 1954 was  erroneous or justified being set aside.  Learned Counsel is not  right in this submission because if the respondents were  entitled to remain in possession of the property originally leased to them  by way of allotment and their leasehold  interest  had not  been validly terminated a fact which on  the  materials the Deputy Secretary was competent to find-the order that he passed  restoring  them to possession could not be  said  to lack material.  We consider therefore that there is no merit in this submission. The  result is that the appeal fails and is  dismissed  with costs. Writ Petition 108 of 1960: This  petition  under Art. 32 of the Constitution  has  been filed  by  the appellants in Civil Appeal 552  of  1963  and seeks  the issue of a writ of certiorari to quash  the  same order  of  the Deputy Secretary to the Union  Government  as that  whose legality is challenged in the appeal.  Both  the Writ  Petition as well as the application for special  leave came  on  for preliminary hearing on November 30,  1960  and while  the leave prayed for was granted, rule nisi was  also issued  in the petition and the two matters have been  heard together.   In view of our decision in the appeal, the  writ petition will stand dismissed, but there will be no order as to costs. Appeal and Writ petition dismissed. 112