Punjab-Haryana High Court
Gram Panchayat vs State Of Haryana on 23 January, 2026
RSA-1401-1987 (O&M) and two connected cases 1
101 (3 cases)
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
RSA-1401-1987 (O&M)
Reserved on :14.01.2026
Pronounced on : 23.01.2026
Uploaded on : 23.01.2026
MUNICIPAL CORPORATION, GURUGRAM SUBSTITUTED FOR
GRAM PANCHAYAT, DUNDAHERA ...Appellant
Vs.
HARYANA STATE THROUGH COLLECTOR, GURGAON (NOW
GURUGRAM) AND OTHERS
...Respondents
2. RSA-1402-1987 (O&M)
MUNICIPAL CORPORATION, GURUGRAM SUBSTITUTED FOR
GRAM PANCHAYAT, DUNDAHERA ...Appellant
Vs.
KAMAL @ KAMLA (SINCE DECEASED) THROUGH LRS AND
OTHERS
...Respondents
3. RFA-2251-1987 (O&M)
GRAM PANCHAYAT, DUNDAHERA THROUGH ITS SARPANCH
...Appellant
Vs.
HOSHIAR SINGH (SINCE DECEASED) THROUGH LRS AND
OTHERS
...Respondents
CORAM:- HON'BLE MR. JUSTICE VIRINDER AGGARWAL
Present: Mr. Ashish Aggarwal, Senior Advocate with
Mr. Vishal Pundir Advocate for the appellant(s).
Mr. Mayank Vashishth, Advocate for
Mr. Prateek Mahajan, Advocate
for the appellant in RFA-2251-1987.
Mr. Ved Parkash, Sr. DAG, Haryana.
Mr. M.L. Sharma, Advocate with
Mr. Sunil K. Sharma, Advocate and
Ms. Meenakshi Sharma, Advocate
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RSA-1401-1987 (O&M) and two connected cases 2
for the respondents in RFA-2251-1987,
for respondents No. 3 to 13 in RSA-1401-1987 and
for respondents No. 1 to 11 in RSA-1402-1987.
VIRINDER AGGARWAL, J.
1. This order will dispose of two RSAs arising out of the same judgment dated 12.01.1987 passed by learned Additional District Judge (I), Gurgaon whereby the appeal filed by the respondents/defendants was allowed and objection to the report of Sub-Judge on additional issues was dismissed, as well as one RFA filed against the judgment dated 10.06.1987 passed by the learned District Judge, Gurgaon.
2. Briefly stated, the predecessor of the appellant, Municipal Corporation, Gurugram (substituted in place of Gram Panchayat Dundahera, Tehsil and District Gurugram), filed a civil suit for declaration and possession, claiming that the Gram Panchayat was the owner of the agricultural land described in paragraph 1 of the plaint, measuring a total of 110 kanals and 2 marlas, situated in the revenue estate of Village Dundahera, Tehsil and District Gurugram. The suit land was in possession of Defendant No. 3, Prem Dass @ Parveen Chela and Gulab Dass Chela, as dohlidars, who were granted the land by the biswedars of Village Dundahera on the condition that Defendant No. 3, and thereafter his predecessors-in-interest, would perform various religious duties for the biswedars. In consideration of performing these duties, the suit land was granted rent-free to the dohlidars. Being shamlat deh, the suit land vested in the plaintiff/Gram Panchayat by operation of law. In 1958, Gulab Dass, predecessor-in-interest of Defendant No. 3, submitted Form A to the concerned authorities illegally and without any lawful right, claiming that the suit land was surplus in his possession. Subsequently, in 1960, the Collector 2 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 3 Agrarian, acting without jurisdiction, illegally declared the suit land as surplus. The same land was then allotted to Defendant Nos. 4 to 14, who later acquired tenancy rights under the provisions of the Haryana Ceiling on Land Holdings Act, 1972, and got sanctioned mutations in their favour, which were also illegal. The plaintiff/Gram Panchayat challenged these proceedings before the Financial Commissioner, Haryana, contending that the declaration of the land as surplus and its allotment to Defendant Nos. 4 to 14 were illegal, null, and void, as no notice of the surplus proceedings was served on the plaintiff, who was the recorded owner in the revenue records. The suit land, vested in the Gram Panchayat as a local authority, is exempt from the operation of the Land Ceiling Act and, therefore, could not have been declared surplus. Moreover, land given to dohlidars in consideration of performing religious duties is also exempt from the Land Ceiling Act. It is further submitted that the predecessor-in-interest of Defendant No. 3 colluded with the authorities and signed Form A without the knowledge or consent of the plaintiff/Gram Panchayat, acting as the lawful owner, during the surplus proceedings. Since the predecessor-in-interest of Defendant No. 3 has ceased performing the religious duties for which the land was granted, they have forfeited all rights, title, and interest in the suit land by their own act and conduct, and the dohlidars rights stand extinguished.
3. Defendant No. 3 failed to contest the suit and was consequently proceeded against ex parte. The remaining defendants/respondents contested the suit by filing written statements, raising several preliminary objections. These included objections regarding locus standi, the suit not having been filed by an authorized person, non-service of notice under Section 80 of the 3 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 4 Code of Civil Procedure, and that the Civil Court lacked jurisdiction. On merits, it was specifically denied that the plaintiff was the owner of the suit land, or that the land was given to the predecessor-in-interest of Defendant No. 3 by the biswedars of Village Dundahera on the condition of performing religious duties. It was also denied that the suit land was shamlat deh and vested in the Gram Panchayat by operation of law. It was further pleaded that Gulab Dass, being a large landowner, had rightly submitted Form A, the land was validly declared surplus, and was lawfully allotted to defendant Nos. 4 to 14, who are in possession of the same as owners, having purchased the suit land under the provisions of the Haryana Ceiling on Land Holdings Act, 1972. It was denied that the plaintiff/Gram Panchayat was entitled to any notice before the land was declared surplus, that the predecessor-in-interest of Defendant No. 3 colluded with revenue authorities, or that the suit land was exempted from the provisions of the Land Ceiling Act. Accordingly, the defendants/respondents prayed for dismissal of the suit. Defendant Nos. 4 to 14, in their joint written statements, also raised the same preliminary objections and adopted similar pleadings on merits.
4. In the replication to the written statements filed by the defendants, the plaintiff/Gram Panchayat denied all the averments made therein. On the basis of the pleadings of the parties, the following issues were accordingly framed:
1) Whether the suit has been filed by a duly
authorised person ?OPP.
2. Whether the plaintiff is the owner of the suit
land? OPP
3. Whether the surplus proceedings declaring the suit land as surplus land and consequentially its 4 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 5 allotment to defendant No.4 to 14 is illegal, void ineffective and without jurisdiction, as alleged? OPP.
4. Whether defendant No. 4 has ferefiether all his rights, title and interest in the suit land, as alleged ? OPP.
5. Whether the plaintiff has no locus standi to sue?OPD.
6. Whether the suit is barred by limitation ?0PD.
7. Whether the suit is not maintainable? OPD.
8. Whether the Civil court has got no jurisdiction to try the suit?OPD.
9. Relief.
5. In order to prove their respective cases, both parties were granted opportunities to lead evidence. Evidence was duly led, and after hearing the arguments, the learned Sub Judge, 1st Class, Gurgaon, decreed the suit in favour of the plaintiff/Gram Panchayat, Dundahera.
6. Aggrieved by the judgment and decree passed by the learned Sub Judge, 1st Class, Gurgaon, the appellants/respondent Nos. 4 to 14 filed an appeal. During the pendency of the appeal, the appellants/respondent Nos. 4 to 14 filed an application under Order VI, Rule 17 of the CPC seeking amendment of their written statement to raise the plea that they were bona fide purchasers for consideration without notice. The application was allowed, the amended written statement was taken on record, and the matter was remitted to the learned Trial Court for framing of additional issues, permitting the parties to lead evidence, and submission of the report on additional issues. The learned Sub Judge, 1st Class, Gurgaon, framed the following additional issues:
x 8A: Whether Defendant Nos. 4 to 14 are bona fide transferees for consideration, as alleged? OPD.
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7. After both parties led evidence on the additional issues, the learned Sub Judge, 1st Class, Gurgaon, discussed Issues 8A and 8B together and, vide report dated 28.08.1986, held that defendant Nos. 4 to 14, being bona fide transferees for consideration, were protected under Sections 41 and 53 of the Transfer of Property Act. Accordingly, both issues were decided in their favour. The Gram Panchayat filed objections against the report of the Sub Judge on the additional issues, which were treated as a separate appeal. Both appeals were heard, and the learned Additional District Judge, Gurgaon, vide the impugned judgment and decree, allowed the appeal of the appellants/defendants and dismissed the objections filed by the Gram Panchayat.
8. Aggrieved by the judgment and decree so passed, the present regular second appeals were preferred by the Gram Panchayat, Dundahera.
During the pendency of these appeals, the area under the jurisdiction of the Gram Panchayat, Dundahera, was merged into the Municipal Corporation, Gurugram, and accordingly, the Municipal Corporation, Gurugram, was substituted as the appellant. Subsequent to the allotment of the suit land in favour of defendant Nos. 4 to 14, the same land was acquired by the State Government. In the proceedings for grant of compensation, the Gram Panchayat, Dundahera, now represented by the Municipal Corporation, Gurugram, filed objections and claimed compensation, which were dismissed. Aggrieved by the order passed in the compensation proceedings, the Gram Panchayat, Dundahera, preferred a regular first appeal. The said appeal has 6 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 7 been clubbed with the regular second appeals already pending and is directed to be disposed of through a common judgment.
9. Learned counsel for the appellant, Municipal Corporation, Gurugram, contended that the impugned judgment and decree passed by the learned First Appellate Court is not sustainable. It was submitted that the learned First Appellate Court wrongly held that the order passed by the competent authority declaring the suit land as surplus, without issuing notice to the Gram Panchayat, Dundahera, is a voidable order and not a void order, and, as such, the jurisdiction of the Civil Court is barred by limitation. The findings of the learned Additional District Judge were based on the Full Bench judgment of this Court in Letters Patent Appeal No. 572 of 1968, Dhaunkal Vs. Man Kaur and another, decided on 10.04.1970, 1970 AIR (P&H) 431. However, it was subsequently held that this is not good law in view of the dicta of the Privy Council and the Hon'ble Supreme Court of India; therefore, the findings recorded by the learned First Appellate Court are not sustainable in this respect.
10. It was further contended that the learned First Appellate Court wrongly observed that the dohlidars were the owners of the suit land under the provisions of the Punjab Security of Land Tenure Act, 1953, and that the Gram Panchayat, Dundahera, is not the owner of the same. The appellant also assailed the finding of the learned First Appellate Court to the effect that the dohlidars continue to have right, title, or interest over the suit property and have not forfeited their rights. Additionally, it was contended that the learned First Appellate Court wrongly held that the suit land vested in the State under 7 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 8 Section 12(3) of the Haryana Ceiling on Land Holdings Act, 1972, and that Sections 5 and 5A of the said Act are not applicable to the present case.
11. It was further argued that the findings on Issues Nos. 8A and 8B, regarding the respondents/defendants being bona fide purchasers for consideration, are not sustainable in view of the Full Bench judgment of this Court in CWP-5662-1986, Smt. Niranjan Kaur and others Vs. The Financial Commissioner, Revenue & Secretary to Government, Punjab and others, decided on 16.07.2010, AIR (2011) Punjab and Haryana 1. On these grounds, it was contended that both appeals should be allowed, the judgment and decree of the learned First Appellate Court be set aside, and that of the learned Sub Judge, 1st Class, Gurugram, be restored. It was further prayed that the report submitted by the learned Sub Judge, 1st Class, Gurugram, on additional issues be set aside. It was also contended that the order passed by the authorities regarding the grant of compensation on acquisition of the land be set aside, the regular Second Appeals and regular first appeal be allowed.
12. Learned counsel for the respondents contended that there is no illegality, irregularity, or infirmity in the findings recorded by the learned First Appellate Court. It was submitted that the learned First Appellate Court has rightly held that the order passed by the competent authority declaring the suit land as surplus, at the most, can be termed as voidable and not void. In such a situation, the plaintiff could have approached the appropriate authority for setting aside the order; however, instead of following the prescribed remedy, the plaintiff filed a civil suit, which was rightly held to be not maintainable. It was further contended that the learned First Appellate Court correctly held that the dohlidars were the lawful owners of the suit property under the provisions 8 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 9 of the Punjab Security of Land Tenure Act, 1953, and that the Gram Panchayat, Dundahera, was not entitled to any notice of the surplus proceedings. The rights, title, and interest of the dohlidars in the suit property have not come to an end, and the respondents/defendants, being bona fide purchasers for consideration, are entitled to the protection of their ownership and related rights under law. Therefore, the learned counsel prayed that the appeals and the regular First Appeal filed be dismissed.
13. The learned First Appellate Court recorded a finding that since the suit land was in the possession of the predecessor-in-interest of defendant No. 3 as a dohlidars, the dohlidars were the owners of the suit property under the Punjab Security of Land Tenures Act, 1953, and, therefore, the Gram Panchayat, Dundahera, was not entitled to any notice. It was further observed that the material date under the provisions of the Punjab Security of Land Tenures Act, 1953, is 14.04.1953, and on that date, the suit land was recorded as Shamlat Deh and was in the possession of Gulab Dass as a dohlidar. It was further held that the suit land vested in the plaintiff/Gram Panchayat, Dundahera, only after the coming into operation of the Punjab Village Common Lands (Regulation) Act, 1953, with effect from 09.01.1954. Consequently, the suit land vested in the Gram Panchayat, Dundahera, only from 09.01.1954, and mutation was sanctioned in its favour on 10.04.1955, as is evident from Ex. PW-3/1, being the Jamabandi for the year 1955-56. On this basis, it was concluded that on the relevant date, i.e. 15.04.1953, the Gram Panchayat, Dundahera, was not the owner of the suit land.
14. For the proper adjudication of this controversy, certain other dates are also material. The order passed by the Collector Agrarian, Gurugram, is 9 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 10 dated 07.01.1960, as per Ex. P-4, and the land was allotted to defendant Nos. 4 to 14 under the Punjab Security of Land Tenures Act, 1953, on 18.06.1963. Thus, it is evident that on the date when the impugned order declaring the suit land as surplus was passed, the Gram Panchayat, Dundahera, was the recorded owner of the suit land in the revenue record. The suit land had vested in the Gram Panchayat, Dundahera, with effect from 09.01.1954, and the proceedings for declaring the suit land as surplus were initiated only after the land had so vested in the Gram Panchayat, Dundahera.
15. The learned First Appellate Court has further recorded a finding that dohlidars are the owners of the suit land in view of the provisions of the Punjab Security of Land Tenures Act, 1953. No doubt, for certain purposes and proceedings, the rights of dohlidars are treated as equivalent to those of owners of the suit land; however, a Division Bench of this Court has categorically held that dohlidars can be ejected from the property in case they fail to discharge the duties attached to their office.
16. In this regard, reliance was placed on RSA No. 904 of 1983, Dharam Vir Vs. Bahadur Singh and another, decided on 25.08.2006, reported as 2007 (2) RCR (Civil) 217. After relying upon the judgment of the Division Bench of the Lahore High Court in Seva Ram Vs. Udegir, AIR 1922 Lahore 126, the following observations were made:
"The dohli tenure is a peculiar kind of tenure to be found in the south-eastern districts of Punjab. It is a rent-free grant of a small plot of land by the village community for the benefit of a temple, mosque or shrine, or to a person for a religious purpose. In the revenue records the proprietary body are recorded as the owners of the property, and the grantee is recorded as a tenant in the column of cultivation. So long as the purpose, for which the grant is made, is carried out, it cannot be resumed, but should the holder fail to carry 10 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 11 out the duties of his office, the proprietors can eject him and put in some one else under a like tenure."
17. It was also observed that the principles laid down by the Lahore High Court in Seva Ram (supra) continued to be followed in:
1. Khema Nand and others v. Kundan and another, AIR 1937 Lahore 805;
2. Tirkha and others v. Dwarka Parshad, 1972 Punjab Law Journal 614;
3. Baba Nand Ram v. Gram Panchayat of Village Malkos, 1976 Punjab Law Journal 586;
4.Dharma v. Smt. Harbai, 1976 PLJ 617;
5. Dalip Singh and others v. Puran Dass and another, 1977 Punjab Law Journal 178;
6. Dhani Ram and another v. Gram Sabha and Gram Panchayat of Village Jatmalpur and others, 1984 Punjab Law Journal 234;
7. Sittal Dass and another v. Financial Commissioner Haryana and others, 1989 Punjab Law Journal 148;
8. Bhím Singh v. Dalip Singh, 1993(1) Recent Revenue Reports 606,
9. Lakshmi Chand v. Basanti alias Kailash, 2003(1) Recent Civil Reports 298: 2003(1) PLJ 321;
10. Ghisa Ram v. Surat Singh & Co., 2003(4) RCR (Civil) 23 (P&H):
2003(2) Punjab Law Journal 565;
11. Dharam Singh and others v. Smt. Phullan Devi and others, 2005 (3) RCR (Civil) 832 (P&H): 2005(3) Punjab Law Reporter 175:
12. Dev Dutt and others v. Gram Panchayat Ranila, 1993(3) RRR 54 (P&H): 1993 PLJ 437 (SB) Para 8.
18. In the present cases, it cannot be concluded that the dohlidars permanently left the village or ceased to perform the duties in lieu of which 11 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 12 the property was allotted to the dohlidars. Therefore, it cannot be held that the right, title, or interest of the dohlidars in the suit property stood extinguished. However, on the basis of the authorities cited above, it also cannot be concluded that the Gram Panchayat, Dundahera, in whom the suit land had vested as owner and which was so reflected in the revenue record lost every right over the suit land merely on account of the dohli created in favour of the predecessor-in-interest of defendant No. 3.
19. On the contrary, the authorities clearly spell out that the owner retains certain rights over such land, and that the rights of a dohlidar can be extinguished if the dohlidar fails to perform the duties in lieu of which the land was allotted. Thus, the landowner retains rights over the land, and all such rights are not extinguished by the creation of a Dohli.
20. The Gram Panchayat, Dundahera, being the recorded owner of the suit property at the time of commencement of the proceedings for declaring the suit land as surplus, was certainly entitled to notice as required under Rule 6(3) of the Punjab Security of Land Tenures Rules, 1956. Admittedly, no such notice was served upon the Gram Panchayat. The question that now arises is whether such proceedings are void or merely voidable. The learned First Appellate Court recorded a finding that, in view of the Full Bench judgment of this Court in Dhaunkal's case (supra), the proceedings conducted without notice would be voidable. The conclusion was recorded as under:
"Where a decree or order is void, it is nonest, and may be ignored altogether, but, when it is voidable, the aggrieved party has to proceed to get rid of it in accordance with law, and where it fails to do so, it being within jurisdiction remains and the party is them not in a position to say that it is nonest.
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When the surplus area collector had the jurisdiction to decide the question of surplus area, if any, with the land owner, and he has committed breach of statutory rules in not hearing the tenant, the breach does not render the order of the surplus Area Collector void or a nullity but only voidable and liable to be quashed or set aside at the instance of the aggrieved party i.e. the tenant. It is an order ex parte made in the absence of the tenant which does not bind the tenant insasmuch as the tenant could by a move in the proper forum have it readily set aside or quashed, but if inspite of having an opportunity to quashed according to law he fails to do so, either because he does not move against the order at all even after knowledge, or because he moves against it after the expiry of time prescribed by law within which he must move, then such an order cannot be treated as non-existent in law.''
21. On the basis of this law, coupled with the judgments of the Division Bench of this Court in AIR 1975 (Punjab & Haryana) 369 and AIR 1972 (Punjab & Haryana) 232, it was concluded that the order in question is not void and is at the most voidable.
22. Counsel for the appellants relied upon the subsequent Full Bench judgment of this Court in State of Haryana and others vs. Vinod Kumar and others, 1986 PLJ 161, wherein it was observed that the judgment in Dhaunkal (supra) had been impliedly overruled by the Apex Court in Katikara Chintamani Dora vs. Guatreddi Annamanaidu, AIR 1974 SC 1069. The relevant portion of the judgment was concluded as follows:
There is an express bar to the jurisdiction of the Civil Court to adjudicate upon the question whether 'any in am village' is an ín am estate or not, and to the extent of the question stated in Section 9(1) Madras Act 26 of 1948, the jurisdiction of the Settlement Officer and of the Tribunal are exclusive. But this exclusion of the jurisdiction of the Civil Court would be subject to two limitations. First the Civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with or the 13 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 14 statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. The second is as regards the exact extent to which the powers to statutory tribunals are exclusive."
23. In paragraph No. 8, the Full Bench of this Court held that where there is a statutory violation of the provisions of the Act, a suit challenging an order passed by the competent authority cannot be barred under Section 25 of the Punjab Act. The relevant paragraph is reproduced below:
"Though according to the rule laid down in Amar Singh's case (Supra) respondents had not right to file either an appeal or a petition for review or revision against the impugned order of the Collector to which they were not parties, but even if it may be accepted for the sake of arguments that that they could file appeal with the permission of the Appellate Authority or move for review even then it cannot be said that concurrent or alternative remedy of filing a suit for getting the declaration that the impugned was nonest so far as they were concerned would be barred by the provisions of the saidi Section 25 of the Punjab Act. It is well established that in the case of alternative or concurrent remedies it is open to the party to choose anyone of them. The existence of the remedy under the Act, if any, therefore, would not bar the remedy of the suit if it otherwise was available to the respondents. Not a single case could be cited by learned counsel for the State at the bar wherein it may have been held that the remedy of suit by a person who is not a party to the order nor has been served with any notice, for declacation that such an order was nonest so far as he was concerned was held to be barred even though the validity and legality of the orders passed were expressly stated to be not open to challenge under the statute. All the decisions relied upon by the learned counsel for the State were such in which the suit was filed by the person who was a party before the Tribunal of exclusive jurisdiction. The observations made in all those decisions, therefore, have to be understood in the contest of the situation available there and in none of these decisions, as observed in Dhaunkal Sheo Ram's casel AIR 1970 Punjab and 14 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 15 Haryana 431) (FB) (supra) the rule laid down in Mask Co's case (supra) was adversely commented upon. We would, therefore, hold that the present suit was not barred by the provisions of Section 25 of the Punjab Act and answer the question referred to Full Bench in the affirmative."
24. Subsequently, the same principle was followed by this Court in RSA-1012-1991, Chhabil Dass and others vs. Hem Raj and others, decided on 08.03.2018, 2018 (3) RCR (Civil) 800; RSA-2019-1991, Tansukh vs. State of Haryana and others, decided on 29.05.2024, 2024 NCPHHC 77399; and RSA-367-1999, Smt. Khazani and others vs. State of Haryana and others, decided on 13.02.2025, 2025 NCPHHC 20471. The Full Bench judgment relied upon by the learned First Appellate Court is no longer considered good law. It is now settled that a Civil Court has no jurisdiction where there is a violation of statutory provisions of the Act in passing the impugned order. In the present case, it is duly established on record that the order declaring the suit land as surplus was passed by the competent authority without issuing any notice to the Gram Panchayat, Dundahera, which was recorded as the owner of the suit land in the revenue records at the commencement of the proceedings. Accordingly, the findings recorded by the learned First Appellate Court are unsustainable and liable to be set aside.
25. As regards the suit land in the hands of Respondent Nos. 4 to 14, being protected under Section 41 of the Transfer of Property Act, and the respondents being bona fide purchasers for consideration, is concerned the learned First Appellate Court has recorded its findings in paragraph No. 23 of the impugned order, which reads as under:
"23. The learned counsel appearing for plaintiff Gram Panchayat challenged the findings of the learned trial court on additional issue Nos. 8-A and 8-
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B, which were rendered by the learned trial court in its report dated 28.8.86, which was called upen by Shri B.R.Vohra, Additional District Judge, Gurgaon, in his order dated 6.6.86, while allowing the application of defendant Nos. 4 to 14 to amend the written statement. It was submitted that the learned trial court decided the additional issue Nos. 8-A and 8-B wrongly, in as much as, neither defendant Nos. 4 to 14 could have been termed as bonafide transferee, nor defendant Nos. 4 to 14 were protected under Sections 41 and 53 of the Transfer of Property Act. Reliance was placed on 1986 P.L.J 354-Balvinderiit Kaur Vs. Financial Commissioner Appeals. However, I find no force in this submission of the learned counsel for plaintiff- respondent Gram Panchayat. The order declaring the suit land as surplus was passed by the Collecter Aggrarian on 7.1.1960. Subsequent thereto, the suit land was duly utilized by the State Government in as much as, the same was allotted to defendant Nos. 4 to 14 on 18.6.63. Thereafter, defendant Nos. 4 to 14 made an application in U.S.2-form on 25.7.1976 to the competent authority, as a result of which, the certificates of allotment in Form US-3 were issued in their favour and thereafter, the defendant Nos. 4 to 14 had deposited the entire amount of instalments amounting to 15450/- on 21.1.1977, as a result of which, the sale deeds Ex D4W1/A te Ex, D4W1/C were issued in their favour. The above said proceedings had taken place in pursuance of Haryana Utilisation of Surplus Area Scheme, 1976, Thus, so far as defendant Nos. 4 to 14 are concerned, they are certainly bonafide purchasers for consideration of the suit land from the State Govt. who was the ostensible owner of the suit property, inasmuch as, the suit land was declared as surplus on 7.1.1960 and by virtue of coming into force of the Haryana Ceiling on Land Holdings Act, 1972, the surplus land had vested in the Government and thereafter, the defendant Nos. 4 to 14 had purchased the suit land from the State 16 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 17 Government, in pursuance of Haryana Utilisation of Surplus Area Scheme, 1976. Under these circumstances, in my opinion, the defendant Nos. 4 to 14 are certainly protected under the provisions of Sections 41 and 53 of the Transfer of Property Act. In my opinion, no fault can be found with the findings of the learned trial court on additional issues Nos.8-A and 8-B. The authority 1986 P.L.J. 354 (Supra), relied upon by the learned counsel for plaintiff-respondent Gram Panchayat, in my opinion, would not apply to the facts of the present case, in asmuch as, in the reported case, the transferees had purchased the suit property during the pendency of the suit and the said transfer was hit by the doctrine ef lis-pendens. However, the facts of the present case are entirely different and no litigation was pending at the time when defendant Nos. 4 to 14 had purchased the suit property from the State Govt, with whom the suit property had vested under the Provisions of law. Accordingly, I affirm the findings of the learned trial court on additional issue Nos.8-A and 8-B."
26. The position regarding the defendants as bona fide purchasers for consideration has been settled by the Full Bench of this Court in Niranjan Kaur's case (supra), wherein it was held as follows:
"28 .........
Before considering the respective contention of the parties, it may be noticed that the provisions of Section 41 of the Act are not applicable to the States of Punjab, Haryana and U.T. Chandigarh, i.e. in respect of the area over which this Court exercises territorial jurisdiction. It is equally well settled that even if the provisions of the Act are not applicable, the principles of the Act which are in consonance with equity, Justice and good consciousness will be applicable. With the said background, Section 41 of the Act reads as under:
"Where with the consent, express or implied, of the persons interested in immovable property, a person is the ostensible 17 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 18 owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it:provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith."
Thus, the following are the ingredients of Section 41 of the Act, which are required to be satisfied before the benefit of purchase in the case of sale by a person who is not the owner is given to the purchaser:
(i) that the transferor is the ostensible owner;
(ii) he is so by the consent, express or implied, of the real owner;
(iii) the transfer is for consideration; and
(iv) that transferee has acted in good faith, taking
reasonable care to ascertain tha transferor had power to transfer.
Even if the benefit of 3rd and 4th ingredient is granted to the purchaser in the present appeal, the question is whether the 1st and 2nd ingredient is satisfied by the appellant. The first and foremost ingredient is that the transferor is ostensible owner. The allotment in favour of transferor has been set aside. The cancellation of allotment can be on account of fraud or for any other reason. The transferor loses title from the date of allotment and not from the date of order. The transferor by virtue of the original alltoment can be said to be permissible user of the land before the allotment was cancelled but such transferor cannot be said to be ostensible owner as the ownership itself has been set side either as a result of fraud or for some other irregularity. The transfer in favour of the transferor was invalid and void from the date of transfer though factum of fraud or irregularity came to the notice of the real owner (Central Government) subsequently. Therefore, it cannot be said that the transferor of the appellant was the ostensible owner.
Once the allotment is cancelled, such cancellation is not prospective ie., from the date of order, but as if allotment was never made. A Full Bench of this Court in Balwant Kaur v. Chief Settlement Commissioner(Lands) Punjab, 1963 18 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 19 Punjab Law Report, 1141, has held that the Chief Settlement Commissioner is competent to cancel or set aside the order of transfer if the sanad is granted or the sale deed has been executed. It has been held that on such order being made, sanad or sale deed will automatically fall with it. The majority has upheld the earlier judgment of Division Bench of this Court reported as Bara Singh v. Joginder Singh, 1959 PLR 127. The majority opinion reads as under:-
"49. As regards the second additional ground, the learned Judges have not given any reasons for the same. Moreover, I have already held above that the sale-deed was not, in any way, independent of the order of transfer. If the order of transfer is reversed, the sale-deed must automatically go with it. Of course, title is created by the execution of the sale-deed, but if the transaction behind the deed is set aside, the deed has got no value in the eye of law. Just as under the Civil Procedure Code when the sale is set aside, the sale certificate automatically goes and is a waste paper, similar is the case of a sale-deed or a sanad, when the order of transfer, on the basis of which the sale deed or sanad was granted, is reversed."
27. The same law was followed by the Division Bench judgment in CWP-286-2012, Ishar Singh and another Vs. Director, Rural Development & Panchayat, Punjab and others, decided on 30.08.2012, 2012 (67) RCR (Civil) 933 wherein it has been held as under:
"8. The petitioners claim that as they purchased the land, in dispute, from a proprietor after an order of partition was passed by the Director Consolidation, they are bona fide purchasers and should, therefore, be protected. The order passed by the Director Consolidation was without jurisdiction and 'void-ab-initio. The foundation of the sale deed, is a void order, passed on an illegal assumption of jurisdiction and, therefore, does not divest the Gram Panchayat of its rights, or confer rights upon the petitioners as bona fide purchasers."
28. In CWP-5661-1984, Gram Panchayat, Johar Majra through Nar Singh, Panch vs. Union of India, decided on 21.12.1995, 1996 PLJ 167, 19 of 20 ::: Downloaded on - 24-01-2026 11:25:47 ::: RSA-1401-1987 (O&M) and two connected cases 20 a Division Bench of this Court held that land purchased by petitioners from persons with defective title, who were not entitled to claim the land in any manner, could not confer any valid rights, as the lands were held to be vested in the Gram Panchayat. Allotments made to persons who had migrated were held void, as the title had never vested in the custodian.
29. In the present cases, since the proceedings declaring the suit land as surplus are held to be void, and the order Ex. P-4, whereby the suit land was declared surplus and subsequently allotted to Defendant Nos. 4 to 14, cannot survive, the subsequent allotment also fails. Consequently, Defendant Nos. 4 to 14 cannot be regarded as bona fide purchasers for consideration. At most, they may be entitled to claim compensation from the competent authority that allotted the land based on illegal proceedings, declaring it surplus and available for allotment. Accordingly, the impugned judgment and decree of the learned First Appellate Court is unsustainable and is hereby set aside. Both appeals filed by the Municipal Corporation, Gurugram are allowed, the suit of the plaintiff is decreed, and the findings of the learned First Appellate Court declaring the surplus proceedings as legal and valid, and declaring Defendant Nos. 4 to 14 as bona fide purchasers entitled to protect their interest in the suit property, are reversed. The Regular First Appeal filed by the appellant/Municipal Corporation, Gurugram, is also allowed, and the impugned order denying the claim of the Municipal Corporation is set aside.
30. A photocopy of the order be placed on the file of other connected cases.
(VIRINDER AGGARWAL)
23.01.2026 JUDGE
kv Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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