Punjab-Haryana High Court
Smt. Niranjan Kaur And Others vs The Financial Commissioner on 17 January, 2012
Equivalent citations: AIR 2012 (NOC) 230 (P. & H.)
Author: K. Kannan
Bench: K. Kannan
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
Civil Writ Petition No.5662 of 1986 (O&M)
Date of decision:17.01.2012
Smt. Niranjan Kaur and others ....Petitioners
versus
The Financial Commissioner, Revenue & Secretary to Government,
Punjab, exercising the powers of the Central Government, under
Section 33 of the Displaced Persons (C & R) Act, 1954, Chandigarh,
and others.
....Respondents
CORAM: HON'BLE MR. JUSTICE K. KANNAN
----
Present: Mr. Arun Palli, Senior Advocate, with Mr. Rajbir Wasu,
and Mr. Sunil Garg, Mr. Tushar Sharma, Mr. Jai
Bhagwan, Advocates, for the petitioners 1, 6, 9, 13 and
14.
Mr. S.S.Sahu, Assistant Advocate General, Punjab.
Mr. J.S. Ahluwalia, Advocate, for respondent No.3.
Mr. Som Nath Saini, Advocate, for the private
respondents.
----
1. Whether reporters of local papers may be allowed to see the
judgment ? Yes.
2. To be referred to the reporters or not ? Yes.
3. Whether the judgment should be reported in the digest ? Yes.
----
K.Kannan, J. (Oral)
1. The writ petition challenges the order of the Financial Commissioner (Revenue) passed in exercise of powers under the Displaced Persons (Compensation & Rehabilitation) Act of 1954 (for short, 'the 1954 Act'), upholding the claim of certain purchasers Civil Writ Petition No.5662 of 1986 (O&M) -2- under the heirs of one Budha Singh and rejecting the claim of the petitioners. The persons at loggerheads were persons, who had also purchased certain properties allotted at Beri village, District Gurdaspur and the petitioners being the purchasers of other properties in Kapurthala district from the very same vendors, namely, the heirs of Budha Singh, who had obtained an allotment yet again in suppression of the fact that Budha Singh had earlier obtained an allotment in District Gurdaspur. Each set of purchasers was interested in contending that one or the other of the allotments had been either brought about by fraud or it had not taken effect in the manner required by law.
2. It becomes necessary to set forth certain other backgrounds facts. Budha Singh was a 'displaced person' at the time of partition, who fled from the place in District Sialkot, now in Pakistan, and as such, he was entitled to allotment of certain properties in lieu of the properties held by him before partition. A matter of fact which is admitted is that he was entitled to 14 standard acres and 7 ½ units of agricultural land and in satisfaction of his claim, the property of said extent was said to have been allotted in his favour at Beri village in Gurdaspur district. Budha Singh died in the year 1956 and his legal heirs had secured a fresh allotment of certain other properties in 4 villages in District Kapurthala in the year 1962. All the properties obtained on allotments had been sold by the heirs of Budha Singh and left it to the purchasers to fight Civil Writ Petition No.5662 of 1986 (O&M) -3- their rights before the authorities when action was initiated by the State authorities for cancellation of allotment obtained by Budha Singh's heirs in alleged suppression of fact of an earlier allotment. Initially the Managing Officer cancelled the allotment made in Gurdaspur district at Village Beri on the ground that the proprietary rights (P-rights) had not been granted to Budha Singh, while such rights had also been granted after the allotment was made at District Kapurthala. This cancellation was done without reference to the purchasers and the challenge was brought at the instance of the purchasers of property at District Gurdaspur from the legal heirs by Budha Singh by preferring an appeal under Section 22 of the 1954 Act. The Additional Settlement Commissioner and the Chief Settlement Commissioner, who took up the cases at the appellate level and in revisional jurisdiction respectively addressed the issue from the point of view of the nature of right that had been obtained by the allottee, one without reference to P-rights and another where the P-rights were also given contemporaneous to the allotment. The Chief Settlement Commissioner, who was dealing with the issue, obtained a report from the field officials that the allottees had not obtained P-rights in respect of the land allotted to them in Gurdaspur and that being so, the property could not be sold, while the allotment in respect of the property in Kapurthala district had been followed up with such P-rights and, therefore, the sale made in Gurdaspur district was alone required to be set aside. The State also conceded Civil Writ Petition No.5662 of 1986 (O&M) -4- before the Financial Commissioner that the dispute was inter se between the respective purchasers and the interest of the State itself was not involved. He had clarified that a quasi permanent allottee, who had not obtained proprietary rights, was not competent to sell the land without acquiring such rights. While disposing off the petition, the Financial Commissioner observed that the legal heirs of Budha Singh had played fraud on compensation pool in securing a second allotment in the district Kapurthala, their father having already been allotted the land in the Village Beri and it was, therefore, the second allotment which was required to be set aside. It is this order passed by the Financial Commissioner on 12th August 1986 that is in challenge before this Court.
3. At the initial stage among other contentions, it has been urged on behalf of the purchaser that he had been a bonafide transferee for value without notice of any defect in title and, therefore, he was entitled to be protected in the purchase by the operation of Section 41 of the Transfer of Property Act. There were other contentions as well, but before we turn on to them, this contention must be stated only to be rejected, in view of an authoritative pronouncement that has been rendered on a reference in this case to a Full Bench for consideration whether permission under Section 41 of the Transfer of Property Act would be available to a purchaser from an allottee of land under the 1954 Act. The Full Bench has answered the reference through its judgment dated Civil Writ Petition No.5662 of 1986 (O&M) -5- 16.07.2010 that the purchaser will get no protection under Section 41 of the Transfer of Property Act and the subsequent vendee would have only a right to claim refund or damages from his vendor. After answering the reference, the matter has again been placed before this Court for consideration of the case on merits.
4. In terms of the judgment of the Full Bench, a contention that the petitioner was entitled to be protected as a bonafide purchaser does not any longer avail to the petitioner. The matter has to be therefore examined only from the other contentions raised viz., whether the absence of proprietary rights or P-rights to the allottee Budha Singh would make a difference and if such rights had been obtained by Budha Singh's representatives in a subsequent allotment, would that obtain better rights to the petitioner to sustain the subsequent allotment. The issue of whether the grant of P-rights alone would conclude the issue of title would obtain meaning only with reference to the Rules and what the proprietary rights mean under the Rules. The Displaced Persons (Compensation and Rehabilitation) Rules of 1955, sets out a procedure for carrying out the provisions of the 1954 Act including the procedure for sale of the property. As per Rule 49 of Chapter VIII of the Rules, the compensation which a displaced person is entitled to, shall be considered when the displaced person makes a verified claim in respect of agricultural land setting out the details of property which he had held prior to partition and the Rules provides for sale of Civil Writ Petition No.5662 of 1986 (O&M) -6- properties by auction. Where a person wishes to have his claim satisfied against property other than agricultural land, he may purchase such property by bidding at an open auction. Rule 68 contemplates that any agricultural land that is transferred to any person under the Rules shall be granted a sanad in the form specified under Appendix XV. Rule 68 is reproduced as under:-
"68. Grant of sanad for transfer of agricultural land.- Where any agricultural land is transferred to any person under these rules, the transferee shall be granted a sanad in the form specified in Appendix XV with such modifications as may be necessary in the circumstances of any particular case or the transfer may be effected in any other manner in conformity with the provisions of any local or special law relating to transfer of agricultural land in force in the area where such agricultural land is situated."
The sanad in Appendix XV is usually called as the P-rights, for, it is this form which registers the actual effect of transfer of land from the Central Government to the allottee. The preamble reads as under:
"Whereas by the notification of the Government of India in the Ministry of Rehabilitation No. dated issued under Section 12 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 (44 of 1954) (hereinafter Civil Writ Petition No.5662 of 1986 (O&M) -7- referred to as the said Act, the Central Government has acquired the evacuee property described in the Schedule to this Sanad (hereinafter referred to as the said property).
AND WHEREAS the said property may be transferred to the said........S/o of for the purpose of the compensation payable to him under the said Act.
AND WHEREAS the said........Son of.........Died on..........at...........leaving behind him........as his successors-in-interest;
THE PRESIDENT IS HEREBY PLEASED TO transfer the right, title and interest acquired by the Central Government in the said property to..... (hereinafter referred to as the transferee) subject to the following terms and conditions:......."
Reading these provisions together, it becomes clear that the title becomes complete for an allottee, when the sanad is issued.
5. The 1954 Act is a central enactment which sought to fulfill the objective of payment of compensation and rehabilitation to displaced persons after partition. Before the 1954 Act came under way, the rights of displaced persons were protected through certain notifications under Administration of Evacuee Property Act of 1950. Section 10 of the 1954 Act itself recognizes such transfers effected to persons who had been displaced under the said notifications. Civil Writ Petition No.5662 of 1986 (O&M) -8- Section 10 contains a special procedure for compensation in certain cases where a property had been leased or allotted to a displaced person by the Custodian under the conditions published by the notification of the Government of Punjab in the Department of Rehabilitation, dated 18th July,1949 or by notification of the Government of Patiala and East Punjab by notification dated 23rd July, 1949 and published in the official gazette of the State dated 7th August, 1949. The transfer that was contemplated through the notification was either a lease or allotment to a displaced person. This was recognized as going to satisfy the claim of a displaced person under the 1954 Act through Section 10. The Rules which were framed subsequently in the year 1955 contemplates the issue of sanad to a person, who obtains a transfer otherwise than under an allotment secured under Section 10. Rule 69 of the 1955 Rules specially contains a saving clause that reads thus:-
"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."
The provision that contemplates a grant of sanad under Rule 68 is, therefore, possible only in cases where allotment is made under the 1955 Rules which would require to be followed up by grant of sanad in the manner referred to under the said Rules in the form mentioned in Appendix XV. The saving clause makes what is Civil Writ Petition No.5662 of 1986 (O&M) -9- otherwise obvious that as a person he has obtained an allotment before the coming into force of the 1954 Act would require to obtain no more than the allotment, which itself constitutes the transfer. If there should be a fresh grant of sanad, it would be necessary under the Rules only in respect of allotments that come about under the Rules.
6. The petitioner's contention was that since his vendors have obtained a sanad they had a transferable interest in respect of only the properties at District Kapurthala. The property which was sold by the vendors in the Village Beri had not been shown to have been impressed with proprietary rights with the vendors and, therefore, in the manner contended by the State before the Financial Commissioner himself, there was no scope for any transfer of title to the purchase of the property in Village Beri. The learned senior counsel appearing on behalf of the petitioner would also contend that if there was any allotment which was required to be set aside, it can be only in respect of the allotment which had not obtained legal fruition through any valid transaction of transfer from the State.
7. In my view, such a consideration is untenable. It is not denied that Budha Singh was entitled to 14 standard acre and 7 ½ units. If there was a cause of action for the State to undertake the issue of cancellation of allotment, the State ought to be concerned about such allotment which was obtained by fraud. If we also exclude the issue of bona fides of purchase by the inapplicability of Civil Writ Petition No.5662 of 1986 (O&M) - 10 - Section 41 of the Transfer of Property Act, the fact that the purchasers had no part to play in the fraud is of no significance. The issue of cancellation of either one of the allotment has to be considered without reference to the purchasers. As far as the State was concerned, the simple fact was, Budha Singh had secured an allotment in 1949-1950 at Village Beri and the heirs of Budha Singh had secured an allotment over again in the year 1961 by practice of fraud. The question to be raised was also only whether the allotment secured at Village Beri or the allotment secured at Kapurthala district was the result of fraud. The first allotment could never be said to be by practice of fraud, for the allotment in Gurdaspur was barely the allotment which a displaced person was entitled to by law. It was the subsequent allotment which was fraudulent and, therefore, that was the only allotment which was required to be considered for cancellation. It is irrelevant for the State to see whether the allotment made first had gone to the next stage of grant of the proprietary rights or not. I cannot accept an argument that the property in Gurdaspur district in Village Beri continued to vest with the State, notwithstanding the allotment to Budha Singh. The State had never retained control over the property. On the other hand, the property had been admittedly enjoyed by Budha Singh, after his life time by his legal heirs and had passed to the hands of its purchasers. If there was a requirement for issue of sanad, it could have been merely a surplusage and not a necessary legal incident to prefect the Civil Writ Petition No.5662 of 1986 (O&M) - 11 - title. In any event, it will be a matter for the purchaser from Budha Singh's legal representatives, who would be concerned about making his title more perfect by obtaining the grant and the title would be fed by such grant to estop the Government from pleading that the properties still vests with the Government. As far as the subsequent purchaser from the second allotment, he could get nothing from the Government or against the transferee of the properties from the first allotment. The very allotment secured and the proprietary rights guaranteed under the second allotment, in terms of a clause in the sanad itself shows the vulnerability of such a purchase. The sanad contains in clause 1 that any transferee, who obtains compensation in any form by fraud or misrepresentation will suffer a right of resumption by the President. The clause reads:
"(1) 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 record a decision in writing to that effect (the decision of the Central Government in this behalf being final) that the transferee or his predecessors obtained or obtains any other compensation in any form whatsoever under the said Act by fraud or misrepresentation."
If the subsequent allotment was the result of fraud or misrepresentation by the transferee, namely, the legal heirs of Budha, it is that property which would require to be resumed and Civil Writ Petition No.5662 of 1986 (O&M) - 12 - that was precisely what the Financial Commissioner did, when he held that the transfer made by the subsequent allotment to Budha's heirs was required to be set aside.
8. The fact that the Government had made a statement before the Financial Commissioner that it was merely an inter se dispute between the transferees and that the title in favour of the allottee at Gurdaspur had not become complete ought not to conclude the issue against the respondents. The State's concession or a statement through a counsel on a point of law can never be binding. I would hold that the issue was not merely whether the purchaser of the property at Beri village or the purchaser of the property at Kapurthala should be preferred. The issue was, which allotment was obtained by fraud and that was the allotment which ought to go. In the manner of discussion that I have undertaken, I have no doubt in my mind that the second allotment was not a valid allotment and the orders setting aside the sale was under the circumstances justified.
9. The petitioner's remedy shall be only to claim the refund of the sale consideration or damages in the manner pronounced by the Full Bench in the order by reference and the cause of action would commence through this order when the rights of parties are finally determined.
10. It will be also open to the petitioner if he is so advised, to approach the Government for any consideration for allotment of Civil Writ Petition No.5662 of 1986 (O&M) - 13 - the very same property if the Rules so permit and if the discretion of the State makes possible for such consideration.
11. The writ petition is disposed off with the above observations.
(K. KANNAN) JUDGE 17.01.2012 sanjeev