10 December 1975
Supreme Court


Case number: Appeal Civil 1223 of 1972








CITATION:  1976 AIR  211            1976 SCR  (2) 988  1976 SCC  (1) 570

ACT:      Displaced Persons  (Compensation & Rehabilitation) Act, 1954-Section 40-Rules  16 to  21-Rules whether  to carry out purpose of  the act  or can  go beyond the objects for which they can  be framed-Whether  verified claims  of a displaced person can  be clubbed  with a legacy received by him or the purpose of  payment of  maximum compensation  under the act- Transfer of Property Act-Section 6-Meaning of Property-Right of transfer of property of inheritance how taken away.

HEADNOTE:      The respondent  a displace  person from  Pakistan had a verified claim  of more  than Rs.  32 lacs from compensation under the  Displaced Persons (Compensation & Rehabilitation) Act, 1954.  His uncle Jai Singh had also a verified claim of about Rs.  26 lacs.  Jai Singh  executed a  will by  which a portion of  his share  in the compensation was bequeathed to the respondent.  Jai Singh  died. The  Assistant  Settlement Officer  clubbed   together  the  individual  claim  of  the respondent and  the share  of the  legacy  and  awarded  the maximum compensation of Rs. 2 lacs under rule 16. Respondent objected to the clubbing on the ground that the character of the share  Jai Singh  was  that  of  a  legacy  and  not  of compensation.  On   an  appeal,   the  Assistant  Settlement Commissioner  accepted   the  respondent’s  contention.  The Regional Settlement Commissioner, however, revised the order of the  Assistant Settlement  Commissioner and  restored the order of the Assistant Settlement Officer. The appeal to the Settlement Commissioner  filed by the respondent failed. The High Court allowed the writ petition filed by the respondent and  quashed   the   orders   passed   by   the   Settlement Commissioner.      In an appeal by certificate under Article 133(1) (a) it was contended  by the  appellant that the purpose of the Act was to compensate and rehabilitate displaced persons subject to a  maximum limit.  Combined effect  of  rules  16  to  21 interpreted in  the light  of the scheme of the Act was said to  be  that  the  amount  of  compensation  payable  to  an individual cannot in any case exceed Rs. 2 lacs.      Dismissing the appeal,



^      HELD :  1. There  is nothing  in the  Act to  prevent a claimant from making a gift or will in respect of the amount he might  be entitled  to get. No provision of the Act takes away rights  of  transfer  of  or  inheritance  to  verified claims. Nothing  like an  abatement or  an extinction  of  a claim by  the death  of the  claimant is provided for by the Act. The  statutory rights  of claimants to compensation are covered by the wide definition of "property" in section 6 of the Transfer  of Property  Act.  They  cannot  evaporate  or vanish suddenly  with the  death of a claimant. Rules framed under section  40 of  the Act  have  to  be  and  are  those reasonably necessary  for carrying  out the  purposes of the Art. They cannot go beyond the objects for which they can be framed.  The   objects  are  determination  and  payment  of compensation and  do not  extend to  deprivation of anything acquired in India. [990-F-H, 991-A]      2. The  right  of  the  respondent  as  a  legatee  was different in character from his claim as a displaced person. There is  no provision for clubbing together of compensation to different  displaced persons each with a right of his own except as  members of  joint families  which are  treated as legal entities  by themselves.  The rights of a successor of another displaced person are outside the rule. The 989 judgment of the Punjab High Court in the case of Karam Singh v. Union  of   India I.I.R.  [1964] 1  Punjab 742, approved. [991 C, 992 A]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1223 of 1972.      From the  Judgment and Order dated the 19-8-1969 of the Delhi High Court in Civil Writ No. 117-D of 1961.      Shyamla Pappu and M. N. Shroff for the Appellants.      D. Goburdhan and R. Goburdhan for Respondent.      The judgment of the Court was delivered by.      BEG, J. The Union of India and the Commissioners of the Rehabilitation Department  of the  Govt. of  India  are  the appellants before us after certification of this case, under Article 133(1)  (a)  of  the  Constitution,  if  involves  a consideration of  the meaning  of some  rules  framed  under Section  40  of  the  Displaced  Persons  (Compensation  and Rehabilitation) Act  44 of  1954 (hereinafter referred to as ’the Act’).      The respondent  Iqbal Singh,  a displaced  person  from Rawalpindi, in  West Pakistan, had a verified claim assessed at over  Rs. 32  lacs from  compensation under  the Act. His uncle, Jai  Singh, had also a verified claim assessed at Rs. 26,06,413/- On  21st November,  1952, Jai  Singh executed  a will under  which he  gave various  legatees, including  the respondent, shares  in the  compensation which was due to be paid to  him. Jai  Singh died  on 7th  February, 1953. In an inquiry under  Section 9  of the Act the respondent was held to be  a beneficiary under Jai Singh’s will to the extent of 19% of the amount due to be paid to Jai Singh. The Assistant Settlement Officer, however, clubbed together the individual claim of over Rs. 32 lacs of Iqbal Singh respondent, and the share of  Rs. 4,95,028/-  as a legatee in the separate claim of Jai  Singh. He  then awarded  the maximum compensation of Rs. 2 lacs under Rule 16 which says:           "16. Scale  of compensation.-Compensation shall be      payable in  accordance  with  the  scale  specified  in



    appendices VIII or IX as the case may be".      Appendix  VIII   is  the   relevant   appendix   giving percentages of  the assessed claims which were to be paid as "compensation" for  the verified claims ranging from Rs. 500 to Rs.  18 lacs and above. The maximum prescribed for Rs. 18 lacs and  above is  Rs. 2  lacs as  "compensation". Thus, no claimant could  get more  than that as compensation whatever be the amount at which his claim was assessed. The result of clubbing together  by the  Assistant Settlement  Officer was that the respondent was not to get more than Rs. 2 lacs even though his  own claim  as compensation  was for that much so that he  was, if  this decision  was correct,  to be totally deprived of  his share  in the legacy left by his uncle. His case is  that he  is entitled  to Rs. 2 lacs on his claim of Rs.32 lacs,  and, in addition, to his share of 19% also as a legatee of the will relating to the amount which was payable to Jai  Singh deceased  as claimant.  The character  of  the first was  "compensation" and  of the  second was  that of a "legacy" under a will. 990      In  appeal,   the  Assistant   Settlement  Commissioner accepted the  respondents case, by an order dated 29th July, 1957, and  directed that  the  respondent’s  claim  be  paid separately from the share in the claim he was entitled to as a beneficiary under the will mentioned above.      On  26th   April,  1957,,   the   Regional   Settlement Commissioner, however,  revised the  order of  the Assistant Settlement Commissioner  and held  that the respondent could not, under the existing rules, get any share of compensation separately as a legatee out of the estate of Jai Singh.      The respondent  appealed to the Settlement Commissioner who agreed  with  the  Regional  Commissioner.  The  Central Government  also   rejected  a   revision  petition  of  the respondent under Section 33 of the Act.      The respondent  then filed  a Writ  Petition before the Circuit Bench of the Punjab High Court which came up finally before a  Division Bench  of the  Delhi High  Court and  was allowed. Orders of the Central Government and the Settlement Commissioner were  quashed and  the order  of the  Assistant Settlement Commissioner was restored by the High Court.      It has  been urged on behalf of the appellants that the High  Court   overlooked  the   scheme  of   the   Act   and misinterpreted  the  relevant  rules.  The  main  contention advanced by  Mrs. Shymla  Pappu, appearing  on behalf of the appellants, is  that the  whole purpose  of the  Act was  to compensate and  rehabilitate  individual  displaced  persons with a  maximum limit  imposed on what could be awarded to a displaced person  for this  purpose. It  is urged  that  the respondent could  not obtain  more than  the maximum  amount prescribed by  Appendix VIII  under Rule 16. It is submitted that the  combined effect  of Rules 16 to 21, interpreted in the light  of the  scheme of  the Act, is that the amount of compensation payable  to an  individual cannot  in any case, exceed Rs.  2 lacs.  Rule 21  is especially  relied upon. It says:           "21. Mixed  claims.-Where a  person holds a number      of verified  claims in  different capacities, the total      compensation payable  to him  shall  be  determined  in      accordance with the provisions of rule 18, 19 and 20".      It is  true that  the Act  is intended  for payment  of compensation for  rehabilitation of  displaced  persons  and matters connected  therewith. There  is, however, nothing in the Act  to prevent  a claimant from making a gift or a will in respect  of the  amount he  may be  entitled to  get.  No provision of  the Act  takes away  rights of  transfer of or



inheritance to verified claims. Nothing like an abatement or extinction of  a claim  by the  death  of  the  claimant  is provided for  by the  Act. Inheritance  to and devolution of rights of claimants are clearly beyond the purview or scheme of the  Act. They are untouched by the provisions of the Act and are  governed by  other provisions of law. The statutory rights of  claimants to  compensation, which  crystallize on assessment and  verification of  claims, are separate rights to property  of each claimant covered by the wide definition of "property"  in Section 6 of the Transfer of Property Act. They cannot evaporate or vanish suddenly with the 991 death of  a claimant.  Rules framed  under Section 40 of the Act have  to be  and  are  those  reasonably  necessary  for carrying out  the purposes of the Act. They cannot go beyond the objects  for which they can be framed. Those objects are confined to  determination and  payment of  compensation for what was  left in  Pakistan and do not extend to deprivation of anything acquired in India in capacities other than those relevant for purposes of compensation.      In the  instant case,  the right of the respondent as a legatee  under   the  will   of  Jai  Singh  was  recognised separately in  proceedings under  Section 9  of the Act. The respondent thus  acquired a  right which  was  different  in character from his claim as a displaced person. After having gone through  the Rules  17 to 20, we are unable to construe Rule 21  as an authority for clubbing together of a claim as well as  a separate right of a claimant as a legatee under a will which  is distinct from the displaced person’s claim to Compensation as  a displaced  person. The  right of  such  a legatee stands  on a  different footing  from a  claim  made under Section  4 of the Act for payment of compensation or a rehabilitation  grant.  The  amount  of  compensation  or  a rehabilitation grant  is payable to a displaced person under the provisions of the Act. A dispute decided under Section 9 of the  Act is  very different in character from a claim for compensation or  rehabilitation as  a displaced  person.  It could relate  to a  right by inheritance to or by succession under a will of another claimant. But, each person has to be paid separately as indicated by Rule 17.      Great reliance  was placed  on Rule 18 on behalf of the appellants. This rule lays down:           "18. Compensation  to be  determined on  the total      value of all claims.-For the purpose of determining the      compensation payable  to  an  applicant,  the  Regional      Settlement Commissioner  shall,,  except  as  otherwise      provided in  these rules,  add up the assessed value of      all claims  of the applicant in respect of all kinds of      properties, other  than agricultural land situated in a      rural area,  left by  him  in  West  Pakistan  and  the      compensation shall  be assessed  on the  total value of      all such claims". This rule  shows that only different kinds of claims of each displaced person  in properties left by him in West Pakistan which can  be clubbed together. It does not deal with rights or claims of another genus which may devolve upon a claimant in his capacity as an heir or a legatee of another displaced person who  may have acquired a separate right of his own as a claimant  to compensation under the Act. Clubbing together of "claims"  in different  kinds of properties has reference to   an    individual’s   claim   to   "compensation",   and rehabilitation and  not to  claims  of  different  displaced persons  which   could,  by  transfer  or  devolution,  vest separately in an individual.      Rule  19  deals  with  compensation  payable  to  joint



families and  Rule 19A prescribes maximum amounts payable in such cases.  Rule  19B  refers  to  compensation  ordinarily payable to  kartas of  joint families.  Rule 20 provides for the assessment of compensation of a co-owner. 992 These  are  the  different  types  of  claims  of  the  same displaced person  in different  capacities as  claimant,  in each capacity,  to compensation  due to himself alone. There is no  provision for  clubbing together  of compensation  to different displaced  persons each  with a  right of  his own except as  members of  joint families,  which are treated as legal entities  by themselves.  The rights of a successor of another displaced  person are  outside the  rule.  There  is nothing in  the  Act  or  the  rules  framed  thereunder  to conflict with  this natural  and ordinary  interpretation of fairly clear and simple language used.      The judgment  of the  Division Bench  of the Delhi High Court (H. R. Khanna, C.J. and S. N. Shankar J.) by which the Writ Petition  of the  respondent was allowed, shows that it had been  conceded in  the High  Court,  on  behalf  of  the Rehabilitation Department,  that Rule  18 would not apply to the case of the respondent before us. The Division Bench had relied upon  an earlier decision of the Punjab High Court in Karam Singh v. Union of India & Ors. (1) where, upon similar facts, it had been held:           "It is  significant that  in Rule 18 it is clearly      stated that  the compensation  has to  be determined on      the total  value of all claims pertaining to properties      left by  a claimant  in West  Pakistan. Therefore it is      the property  left by  a  claimant  in  West  Pakistan.      Therefore it  is the property left by the petitioner to      which he  can make  a claim.  The property  left by his      uncle cannot  be said  to be  the property  left by him      within rule  18. Properties  left by a joint family are      properties which  the claimant,  who  claims  to  be  a      member of  the joint  family, can  properly be  said to      have left  in West  Pakistan. Though  the  capacity  in      which he  held those properties and so also in the case      of properties  held by  him as  a co-sharer  with other      persons is  different from  the capacity  in which  the      properties left by him in West Pakistan in his personal      and exclusive  occupation are concerned. This cannot be      said to  be the  case where  he gets  the  property  of      another displaced person by reason of inheritance or by      transfer. The  capacities contemplated  by Rule  21 are      set out  in Rule  18, 19 and 20 and in any case have to      be analogous to them".      We find  ourselves in  entire agreement  with the  view adopted by  the Division  Bench of  the Delhi High Court and dismiss this appeal with costs. P.H.P.                                     Appeal dismissed. 993