Union of India & Anr. Vs. M/s. K.C. Sharma and Company & Ors.

Case Number: Civil Appeal No. 9049-9053 of 2011

Judges Name: Hon’ble Justice ASHOK BHUSHAN J, R. SUBHASH REDDY J, M.R. SHAH J

Order dated: 14th August, 2020

Facts of the case:

The land admeasuring 36 bighas 11 biswas comprising in Khasra Nos.14/9, 12, 17, 18, 19, 20/1, 23 and 24 belonged to Gaon Sabha Luhar Heri, Delhi. The large extent of land in the village, including the aforesaid land, was acquired by the Government by initiating proceedings under Land Acquisition Act, 1894 (for short, ‘the Act’). The notification under Section 4(1) of the Act was issued on 27.01.1984 and declaration under Section 6 of the Act came to be published on 20.09.1984. By passing the Award bearing No.101/86-87 on 19.09.1986, possession of the land was taken by the Government. In the award proceedings, as the respondents have claimed compensation on the ground that the land was given to them on lease by Gaon Sabha, the matter was referred to the Civil Court under Sections 30 and 31 of the Act, for apportionment of the amount of compensation.

In the aforesaid reference proceedings, preferred under Sections 30 and 31 of the Act, it was the claim of the respondents that as the land was not fit for cultivation, it was granted on lease to the respondents to remove the “shora” and to make the land fit for cultivation. It is their case that in view of the lease granted by the Gaon Sabha, they have spent huge amount for removal of “shora” and made the land fit for cultivation, and continued in possession by cultivating the same for more than 30 years. In the aforesaid proceedings referred under Sections 30 and 31 of the Act, the Civil Court has passed the judgment and decree on 28.09.1989, declaring that the respondents-claimants are entitled for compensation to the extent of 87% and remaining 13% is to be paid to the panchayat/Gaon Sabha.

Nearly after three years of the aforesaid judgment and decree in the proceedings under Sections 30 and 31 of the Act, some villagers have filed Writ Petition No.1408/1992 alleging that the respondents were not the lessees of the land in question and they have claimed compensation in collusion with ex-Pradhan of the Gaon Sabha. The said writ petition was disposed of by the High Court of Delhi on 21.02.1997. In the aforesaid order the High Court has permitted the Additional District Magistrate to intervene in the pending proceedings under Section 18 of the Act and place on record the available material to substantiate their case. At the same time it was kept open to the legal heirs of the original lessee to support their contention that there is a lease and they are entitled to claim compensation for the land acquired.

In view of the observations made by the High Court in the writ petition, Gaon Sabha/ Panchayat has filed application under Order 1 Rule 10 of the Code of Civil Procedure to implead it in the proceedings under Section 18 of the Act. In the aforesaid proceedings it was held that in view of the judgment and decree passed in proceedings under Sections 30 and 31 of the Act holding that the respondents-claimants are entitled for compensation to the extent of 87%, the Civil Court has held that Panchayat is entitled only to seek enhancement of compensation to the extent of their 13% share.

Further, in view of the observations made by the High Court, a suit was filed by the appellants, initially before the High Court of Delhi, which was subsequently transferred to the Court of Additional District Judge, Delhi on the ground of pecuniary jurisdiction and same was numbered as Suit No.203 of 2005. The said suit was filed seeking declaration that the judgment and decree dated 28.09.1989 was obtained by fraud as such they are entitled for recovery of Rs.11,20,707/- with interest @ 18% p.a. In the aforesaid suit mainly it was the case of the appellants plaintiffs that the said decree was obtained by fraud in collusion with ex- Pradhan, and created a resolution showing that the said land was leased in their favour for a period of five years from 04.04.1981. It was their specific case that since the ex-Pradhan of the Gaon Sabha was in collusion with the respondents-defendants and due to such fraud committed by them upon the court they could obtain order and decree as such the same was assailed in the suit.

The said suit was decreed by judgment and decree dated 04.01.2006 and aggrieved by the same respondents-defendants have preferred First Appeals in R.F.A.Nos.204-8/2006 before the High Court of Delhi. The High Court, by appreciating the documentary and oral evidence on record, has come to the conclusion that appellants-plaintiffs have not pleaded necessary particulars so as to show how fraud was committed upon the court which decided the reference under Sections 30 and 31 of the Act. Further by recording a finding that Gram Panchayat wanted to give the said land on lease to make the land fit for cultivation by removing “shora” and the said proposal was signed by all the members of the Gaon Sabha and only after approval from the Dy. Director, Panchayat, it was put to auction.

It was further held by the High Court that in the auction proceedings there were as many as six bidders and as the bid of the respondents was highest at Rs.89/- per acre same was accepted. It is further held by the High Court that the proposal regarding acceptance of the bid was also approved by the Dy. Director vide letter dated 16.04.1981 and only thereafter respondents took possession of the land and paid the money through various receipts which are part of the record. Further the High Court has held that the entries made in the revenue records support the plea of the respondents that they continued in possession by cultivating the land and as, every action of the Gaon Sabha from the stage of proposal to create lease and acceptance of lease was approved by Dy. Director, there is no case made out by the appellants to show that lease was created only with the collusion of the ex-Pradhan of the Gaon Sabha. With the aforesaid findings the appeals filed by the respondents were allowed and judgment and decree of the trial court was set aside.

Supreme Court held:

  • In this case we are not concerned with the correctness of the judgment and decree dated 28.09.1989 passed in the proceedings under Sections 30 and 31 of the Act. In the suit filed in Suit No.203 of 2005 a declaration is sought to the effect that the judgment and decree dated 28.09.1989 is obtained by playing fraud. In support of their case the only pleading was that there was no lease in fact and same was created by creating resolution in collusion with the ex-Pradhan of Panchayat. From the material and evidence on record we are in agreement with the view taken by the High Court. In view of the rival claims for compensation matter was referred under Sections 30 and 31 of the Act and it was held that respondents are entitled to compensation to the extent of 87% whereas Gaon Sabha was held entitled only to the extent of 13%.
  • The said judgment has become final. Same was not questioned in any appeal. Without filing any appeal against the judgment and decree dated 28.09.1989, a separate suit is filed mainly on the ground that the said judgment and decree is obtained by fraud. From the material placed and evidence produced, it is clear that the land in question was ‘banjar’ land having “shora” and Gram Panchayat wanted to give the said land on lease to make the same fit for cultivation by removing “shora”. Such proposal was agreed to by all the members of Gaon Sabha and proposal as such was sent to Dy. Director, Panchayat for approval. The Dy. Director of Panchayat has approved the same by deciding that the minimum bid should be for Rs.75/- per acre. Only after receipt of such approval from the Dy. Director, Panchayat, land was auctioned on 04.04.1981 for grant of leasehold rights.
  • In the auction conducted there were as many as six bidders and bid of the respondent was the highest which was at Rs.89/- per acre and was accepted. Even such acceptance of proposals was again sent to Dy. Director for approval and the Dy. Director vide letter dated 16.04.1981 approved the acceptance of the bid in favour of the respondent for a period of five years. Thereafter the respondent was put in possession and he continued in possession by paying bid amount to the Gram Panchayat. The revenue records produced also reveal that the name of the respondent was entered as possessor and cultivator. In the light of such documentary evidence it cannot be said that lease was obtained by the respondents in collusion with ex-Pradhan. It is to be noted that it was not an act of ex-Pradhan of the Gaon Sabha and from the stage of proposal same was approved by the Dy. Director, only thereafter by conducting open auction respondents were granted lease.
  • As it is clear from the evidence that the respondents were put in possession and they continued in possession by cultivating the land the said judgments would not render any assistance in support of the case of the appellants. On the other hand in the case of Maneklal Mansukhbhai10 relied on by learned senior counsel for the respondents it is clearly held by this Court that defence under Section 53A of the Transfer of Property Act, 1882 is available to a person who has agreement of lease in his favour though no lease has been executed and registered. Similar proposition is also approved in the judgment of this Court in the case of Hamzabi11 wherein this Court has held that Section 53A of the Transfer of Property Act, 1882 protects the possession of persons who have acted on a contract of sale but in whose favour no valid sale deed is executed or registered. As it is clear that respondents were put in possession and the Panchayat has acted upon their proposal for grant of lease said case law supports the case of the respondents.

Accordingly, these civil appeals are dismissed with no order as to costs.

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