Satluj Jal Vidyut Nigam Ltd. vs Raj Kumar Rajinder Singh(D)Thru … on 24 September, 2018

                                              1


                                                                   REPORTABLE

                            IN THE SUPREME COURT OF INDIA

                             CIVIL APPELLATE JURISDICTION

                             CIVIL APPEAL No.  9871    OF 2018
                         (Arising out of S.L.P. [C] NO.23292 OF 2008)


          SATLUJ JAL VIDYUT NIGAM                             …  APPELLANT(S)

                                          VERSUS

          RAJ KUMAR RAJINDER SINGH (DEAD) 
          THROUGH LRS.  ORS.                                 … RESPONDENTS

WITH  
  C.A. NO.9874 OF 2018 @ SPECIAL LEAVE PETITION [C] NO.9281
OF 2014
C.A. NO. 9875 OF 2018 @ SPECIAL LEAVE PETITION [C] NO.9284
OF 2014
C.A. NO.9876 OF 2018 @ SPECIAL LEAVE PETITION [C] NO.9288
OF 2014
C.A. NO. 9877 OF 2018 @ SPECIAL LEAVE PETITION [C] NO.9289
OF 2014
C.A. NO. 9878 OF 2018 @ SPECIAL LEAVE PETITION [C] NO.9287
OF 2014
C.A. NO. 9879  OF 2018 @ SPECIAL LEAVE PETITION [C] NO.9285
OF 2014
C.A. NO. 9880 OF 2018 @ SPECIAL LEAVE PETITION [C] NO.9283
OF 2014
AND
C.A. NOS. 9872­73 OF 2018 @ SPECIAL LEAVE PETITION [C] NOS.

22539­22540 OF 2008

Signature Not Verified

Digitally signed by
NEELAM GULATI
Date: 2018.09.24
16:24:53 IST
Reason:

2

J U D G M E N T

ARUN MISHRA, J.

1. Leave granted.

2. The question involved is whether after the abolition of Jagirs by

virtue of the Himachal Pradesh Abolition of Big Landed Estates and

Land Reforms Act, 1953 (hereinafter referred to as ‘the Abolition Act’),

the late Jagirdar or his legal representatives could have claimed the

compensation on the land acquisition being made particularly when

land has vested in the State of Himachal Pradesh, the land was not

under   the   personal   cultivation,   and   particularly   when   they   have

received   the   compensation   under  the   Abolition   Act,   apart   from   that

had   also   received   the   compensation   under   the   provisions   of   H.P.

Ceiling   on   Land   Holdings   Act,   1972   (hereinafter   referred   to   as   “the

Ceiling Act”). 

3. The facts project how a litigant has filed a slew of litigations one

after   the   other   and   faced   with   a   situation   that   it   was   likely   to   be

dismissed,   he   would   withdraw   it;   again,   file   it   on   new   grounds,   or

having lost it, would withdraw it again at appellate stage, and in the

meantime,   in   different   proceedings   by   playing   fraud,   getting   unjust

enrichment   by   receiving   compensation   at   the   expense   of   public

exchequer.

3

4. The facts in the instant case reveal that Late Rajinder Singh, son

of   erstwhile   ruler   Late   Maharaja   Padam   Singh   was   Jagirdar   of   the

land, and thus was recorded as owner of thousands of bighas of land

in Tehsil Rampur, Sub­Tehsil Nankhari and Tehsil Rohru of erstwhile

Mohasu district which is presently a part of Shimla district and Tehsil

Nichhar of district Kinnaur of State of Himachal Pradesh.

5. The land in village ‘Jhakri’ of 393 khasra numbers admeasuring

1011 bighas, 6 Biswas was declared to have vested in the State under

section 27 of the Abolition Act and the intermediary Rajinder Singh as

per order dated 14.11.1962 was permitted to retain only 64.12 bighas

of   land   which   was   under   his   personal   cultivation.   In   Himachal

Pradesh,   one   acre   comprises   5   bighas   of   land.   Vide   order   dated

19.9.1964 passed by the Assistant Collector, the order of vesting was

modified to the extent that he was given 13 bighas 12 Biswas of land

comprised in Khatauni No.1 out of 14 Khasra numbers, i.e., 14, 122,

125, 142, 143, 165, 212, 238, 241, 288, 423, 494, 511 and 512. Some

of the aforesaid survey numbers were unmeasured. However, the fact

remains   that   the   total   area   which   was   found   to   be   under   personal

cultivation, was 13 bighas, 12 Biswas.

6. Late Jagirdar Rajinder Singh assailed the order of vesting dated

14.11.1962   by   filing   W.P.   [C]   No.   15/1962.   Before   the   Judicial

Commissioner  who  used  to   hear  writ  petitions   at  the   relevant  time,
4

held that the land which was not under personal cultivation, would

not vest in the State unless and until compensation was paid. 

7. Pursuant to the order of vesting, the competent authority under

the Abolition Act i.e. Compensation Officer, Mahasu, vide order dated

12.4.1966   determined   the   compensation   of   Rs.28,019.45.   Since   the

Zamindar had already received an  amount of Rs.1,703.25 in excess

from the tenants who had acquired proprietary rights under section

11 of the Abolition Act, same was deducted from the amount and the

amount   payable   was   found   to   be   Rs.26,316.20   and   it   was   actually

paid on 6.5.1966.

8. As against the order passed by the Compensation Officer dated

12.4.1966,   the   appeal   was   preferred   before   the   District   Judge,

Mahasu. The appeal was partly allowed and the direction which was

made of deduction of Rs.1703.25 was set aside and the payment of

entire Rs.28,019.45 was ordered without aforesaid deduction.

9. As   against   the   decision   of   the   Judicial   Commissioner   dated

14.11.1962,   the   matter   travelled   to   this   Court   in   C.A.   Nos.1186­

1191/1966. This Court held that vesting under section 27, the right,

title and interest of the owner in landholding in case land revenue of

the   holding   exceed   Rs.125   per   year,   would   vest   free   from   all

encumbrances in the State Government and the vesting is automatic

and   without  being contingent  on   the  happening  of   any  other  event.
5

Compensation   and   rehabilitation   grant   can   be   determined   and   paid

later.   This   Court   in   the   order   dated   17.9.1969   made   the   following

observations:

“It is apparent that S.27 deals with lands the
annual   land   revenue   of   which   exceeds   Rs.125   per
year. It says in unequivocal terms that the right. title
and   interest   of   the   owner   in   such   lands   shall   be
deemed to have been transferred land vested in the
State Government free from all encumbrances. This
essentially means that on the enforcement of the Act
the   vesting   takes   place   automatically   and   without
being   contingent   on   the   happening   of   any   other
event.   The   High   Court   in   the   full   Bench   decision
referred to above took the same view and was right in
observing   that   wherever   the   legislature   intended   to
defer the date of vesting such as in S.11 and 15 clear
provisions were made to that effect and the reasons
thereof   were   obvious.   In   8.11   the   tenant   had   to
exercise   the   option   to   acquire   the   right.   title   and
interest of the landowner. The vesting of such rights­
would necessary depends on the time of the exercise
of such option. Similarly in 8.15. a future date had
to be provided in view of its special provisions. We do
not consider that the provisions of sub S.53 (3) and
(4) of S.27 contain any indication that the vesting of
rights   of   ownership   in   the   Government   would   be
dependent   on   the   determination   of   compensation.
The vesting takes place under sub­S. (1) immediately
on   the   enforcement   of   the   Act.   Thereafter,   under
sub­S.   (3)   compensation   has   to   be   paid   to   the
landowner   in   accordance   with   the   provisions
mentioned   therein.   Under   sub   8(4)   the   State
Government shall transfer the rights of ownership to
a tenant who cultivates the land only on payment of
compensation.   That   cannot   prevent   or   have   any
bearing on the vesting which takes place under sub
S(1).   The   payment   of   rehabilitation   grant   which   is
provided   by   sub   8(5)   to   a   small   landowner
strengthens the reasoning in favour of vesting being
automatic and immediate under sub S(1). There can
6

be no manner of doubt that in respect of land which
falls within the ambit of S.27(1) transfer and vesting
of the rights of ownership to and in the Government
 takes   place   immediately   on   the   enforcement   of   the
Act   and   thereafter   compensation   and   rehabilitation
grant are payable.

For all these reasons, the appeals are allowed
and   the   decision   of   the   learned   Judicial
Commissioner is set aside. The cases are remanded
to the High Court for disposal of the questions which
were   not   decided.   In   view   of   the entire
circumstances, there will be no order as to costs.”
(emphasis supplied)

This Court remitted the matter to the High Court for disposal of

the questions which were not decided. In particular, the question of

personal   cultivation   of   Jagirdar   as   that   land   was   only   saved   from

vesting.

10. Faced   with   the   observation   made   by   this   Court   that   the   land

which   is   not   under   personal   cultivation   vested   automatically   in   the

State and as after remand the High Court was required to decide the

matter in view of the said observations of this Court, Rajinder Singh

prayed  for  withdrawal of  W.P.  No.15/1962  with  permission  to  file  a

civil   suit.   The   High   Court   vide   order   dated   9.7.1970   permitted   to

withdraw   the   writ   petition   with   liberty  to   file   a  civil  suit.   Thus,   the

mandate   of   this   Court   in   the   order   dated   17.9.1969   to   decide   the

question of personal cultivation was avoided by the withdrawal of writ

petition.  

7

11. Late Rajinder Singh then filed Civil Suit No.15/1970 in which he

took a somersault and prayed for a declaration of title and sought a

declaration that the suit property was not the ‘land’ under Section 2(5)

of   the   Abolition   Act   and   as   such   it   did   not   vest   in   the   State   of

Himachal Pradesh. The case of personal cultivation was abandoned by

him. The trial court framed the issues;  whether the plaintiff was in

possession of the land in dispute and whether the disputed land, in

whole or in part, vested in the State Government? The issue was also

framed whether the land in dispute is covered under the definition of

‘land’   in   the   Abolition   Act.   What   is   the   effect   of   the   decision   dated

12.4.1966? The issue was also framed with respect to the finality of

the   decision   of   the   Compensation   Officer   dated   12.4.1966,   and

whether the suit was barred as the order had attained finality. The

trial court also framed the issue with respect to the aspect whether the

plaintiff had received compensation of the part of the area in dispute

and, as such, estopped from filing the suit.

12. The   suit   15/1970   filed   in   the   High   Court   was   dismissed   on

26.6.1973. The High Court has held that the suit land was within the

purview   of   the   term   ‘land’   as   defined   in   the   Abolition   Act   and   the

plaintiff was not in the personal cultivation of the said land. Hence,

the entire land had vested in the State Government under section 27

of the Act on 26.1.1955, the date on which the Abolition Act came into
8

force. It was held that the plaintiff was not the owner of the said land.

The High Court has recorded the following findings:

“25.  In this view of the matter I hold, that the land in
dispute is decidedly land as defined in the Abolition Act
and the plaintiff not being in the personal cultivation of
such   land,   the   entire   of   it   has   vested   in   the   State
Government   under   section   27   of   the   Act.     The   two
issues are thus decided against the plaintiff.

41.   In view of my decision given above for respective
issues, the relief of declaration cannot be granted.  The
disputed   land   has   automatically   vested   in   the   State
Government   under  section   27   on   26 th  January   1955,
when the Abolition Act came into force.   As such the
plaintiff   is   not   the   owner   of   such   land.     Since   the
plaintiff   has   not   proved   his   “personal   cultivation”   for
such   land,   the   same   is   not   exempt   from   vestment
under   sub­section   (2)   of   section   27.     The   executive
instructions issued by the defendants, for this reason,
cannot   be   considered   to   be   wrong   or   illegal.     The
plaintiff is not entitled to any relief.” 

The High Court in C.S. No.15 of 1970 also decided issue Nos.5,

11 and 12 and held that the suit was expressly barred by estoppel and

also by  res judicata. The suit being for the mere declaration was not

maintainable and was barred under section 34 of the Specific Relief

Act, 1963.

13. Rajinder Singh filed the appeal before Division Bench of the High

Court as against the judgment and decree dated 26.6.1973 of Single

Judge.   The   first   appeal   was   ultimately   withdrawn   by   making   a

statement by his counsel that the disputed land had been acquired
9

under the provisions of section 8 of the H.P. Ceiling on Land Holdings

Act, and the compensation had been paid to the appellant. In view of

the   subsequent   event,   prayer   was   made   to   withdraw   the   suit   and

appeal   as   it   had   become   infructuous.   However,   the   High   Court   on

23.6.1986   permitted   the   appellant   to   withdraw   the   suit   with

permission to file a fresh suit in respect of the subject matter of the

suit on the same cause of action in case there was any necessity to file

such a subsequent suit, and the appeal was dismissed as infructuous.

It is apparent that the appellant has accepted the factual position that

land was declared surplus and he has received compensation of the

disputed   land   under   the   provisions   of   the   Ceiling   Act,   1972.   From

which actual factual position and admission, he has tried to wriggle

out falsely in the instant matter.

14. The   withdrawal   of   suit   C.S.   No.15   of   1970   was   aimed   at

defrauding the court as the trial court has held that the suit land was

not personally cultivated as such, it had vested automatically in the

State Government and it was the ‘land’ as defined in the Abolition Act

and the plaintiff was estopped from filing a suit. During the pendency

of the aforesaid matter in spite of the land having been vested in the

State,   under   Abolition   Act   compensation   was   obtained   second   time

under the provisions of the Ceiling Act, though the compensation was
10

earlier too paid to him as determined by the Compensation Officer in

1966. 

15. The Ceiling Act was enacted in the year 1972 and it provided for

consolidation of holding and amend the laws relating to ceiling on land

holdings. Section 11 of the Act of 1972 provided that the surplus land

would vest in the State, and would be deemed to have been acquired

by   the   State   Government   free   from   all   encumbrances   for   a   public

purpose on payment of a certain amount. 

16. On 10.6.1980  the Collector (Ceiling) that is the Sub­Divisional

Officer   declared   10,027.5   bighas   of   land   as   surplus.   It   was   not

questioned by Rajinder Singh. Compensation was determined and also

paid. The reference was made by the department that the additional

land was required to be declared as surplus. On 5.9.1985, Financial

Commissioner (Appeals) decided references and did not interfere in the

aforesaid   declaration   of   land   as   surplus,   however   conclusively   held

that   additional   land   was   required   to   be   declared   surplus.     The

declaration   of   10,027.5   bighas   of   land   as   surplus   vide   order   dated

10.6.1980   was   not   sufficient.   The   case   was   accordingly   remanded.

The limited remand order also attained finality. Ultimately order was

passed   by   the   Collector,   Rampur   Bushahr,   Distt.   Shimla,   on

10.11.1993. It was observed  that the compensation of Rs.57,888.80

had been received for the land that had already been declared surplus
11

i.e. 10027.5 bighas. It was also held that in the order dated 10.6.1980,

two units of permissible area to the landowner and his minor son were

erroneously allowed, therefore, the additional area of one unit given to

minor son was declared as surplus. It was held that family of Rajinder

Singh was entitled only for one unit and the final draft statement was

accordingly published. 

17. The area in question has also declared a surplus in 1980 and

acquired   by   State   under   section   11   of   Ceiling   Act   before   the   land

acquisition   was   started   in   1987   and   the   order   dated   10.6.1980

declaring 10,027.5 Bighas of land as surplus so far as Rajinder Singh

was concerned attained finality as it was not questioned by him. 

18. As   against   the   order   dated   10.11.1993   declaring   additional

approximately 9000 bighas of land as surplus, the appeal was filed,

the same was dismissed by the Commissioner on 30.8.1996. Against

the   said   appellate   order   revision   was   filed   before   the   Financial

Commissioner   and   the   same   was   dismissed   on   18.1.2002.   On

1.8.2013 the Commissioner passed an order upholding the mutation

order   against   which   revision   was   filed   before   the   Financial

Commissioner.   Ultimately  the   review   petition   was   also   dismissed   as

not maintainable which the appellant is stated to have questioned.
12

19. With respect to the present acquisition proceedings out of which

appeal arises, notification under section 4 was issued on 9.1.1987 for

the acquisition of land for H.P. State Electricity Board for construction

of   an   approach   road   at   Jhakri.   The   Electricity   Board   was   later   on

replaced by Nathpa Jhakri Power Corporation (NJPC) and later on by

the appellant Satluj Jal Vidyut Nigam. The Land Acquisition Collector

passed an award on 24.2.1989 determining the rate of compensation

at the rate of Rs.20,000 per bigha. However, it was observed in the

award   that   there   was   a   dispute   about   the   ownership   of   Rajinder

Singh.   Hence,   it   was   ordered   that   compensation   should   not   be

disbursed   in   view   of   the   pendency   of   ceiling   proceedings.   It   be

deposited in a bank instead of court. A reference was sought under

section 18 of the Land Acquisition Act, 1894 (hereinafter referred to as

‘the   LA   Act’).   The   Reference   Court   vide   award   dated   23.7.1991

determined the compensation at the rate of Rs.1 lakh per bigha.

20. Another   acquisition   proceeding   was   initiated   by   issuance   of

notification   under   section   4   which   was   published   in   the   Official

Gazette for the acquisition of land for the purpose of construction of

residential colony for the Jhakri Hydel Power Project. On 11.7.1988

amended notification under section 4 was issued. On 27.2.1991 award

was passed according to the classification of the land. On 4.7.1991, a

supplementary award  was  passed. The  references  were made  to the
13

Court. The Reference Court awarded Rs.1 lakh per bigha vide award

dated 27.3.1997. 

21. As   against   the   award   passed   by   the   Reference   Court   appeals

were preferred before the High Court. It was contended that the land

acquisition   proceedings   were   commenced   in   collusion   with   the

Government officials. The land stood vested in the Government under

the   Abolition   Act.   There   was   no   question   of   acquiring   the   same.   A

prayer was  made  in  the  appeals  to  file  additional  documents  under

Order 41 Rule XXVII and to amend the written statement. The High

Court dismissed the said applications along with appeals. 

22. As   against   the   dismissal   of   the   appeals   and   the   applications,

C.A. Nos.3741­52 and 3753­57 of 2001 were filed in this Court by the

appellant. They were decided on 3.5.2001. The judgment of the High

Court was set aside. The applications under Order 41 Rule XXVII and

Order 6 Rule XVII were allowed. This Court in the final order dated

3.5.2001 observed:

         “In course of hearing of the appeals it was fairly
agreed by learned counsel for the parties that keeping
in view the facts and circumstances of the case and the
contentions raised it will be apt and proper to remand
the matter to the High Court for fresh disposal taking
into   consideration   the   averments   in   the   amendment
petition   and   the   documents   filed   as   additional
evidence.     Such   an   order   in   the   fact   situation   of   the
case will serve the ends of justice.

14

          In   view   of   the   agreed   position   fairly   stated   by
learned counsel for the parties and in our view, rightly,
we allow these appeals, set aside the judgment of the
High   court   which   is   under   challenge;   allow   the
petitions   filed   by   the   appellants   under   Order   6   Rule
XVII   CPC   and   under   Order   41   Rule   XXVII   CPC   and
remand the matter to the High Court for fresh disposal
in   accordance   with   law   after   giving   opportunity   of
hearing to the parties.”

23. After the case was remitted to the High Court, appeals have been

dismissed   vide   impugned   judgment   and   order   dated   25.2.2008.

Aggrieved thereby the appeals have been preferred by Satluj Jal Vidyut

Nigam.

24. The Reference Court decided 72 land reference cases wherein it

was   held   that   the   respondents   were   neither   the   owner   nor   in

possession   of   the   land   under   acquisition,   and   the   land   in   question

stood   vested   in   the   State   of   Himachal   Pradesh.   The   award   was

challenged by way of Regular First Appeal and the same is stated to be

pending in the High Court.

25. Civil Appeals arising out of SLP [C] No.9281/2014 arise out of a

common judgment dated 18.9.2013 passed by the High Court. Writ

petitions were filed before the High Court by one of them by Sita Devi

 Ors. being CWP No.2931/2010 with respect to a redetermination of

compensation. They were decided by a common judgment and order

dated 18.9.2013 and it has been held that notwithstanding the fact
15

that Rajinder Singh may not have a title, the status of the appellants

had been held to be that of bona fide transferees earlier and that order

has   attained   finality   and   was   not   questioned   in   appropriate

proceedings.   Thus,   they   were   entitled   to   the   re­determination   of

compensation   under   section   28A   of   the   LA   Act.   Satluj   Jal   Vidyut

Nigam has filed the appeals impugning the judgment in the year 2014.

26. It   was   urged   on   behalf   of   the   appellant   that   the   respondent

Rajinder Singh has received compensation 3 times with respect to the

same land. Firstly, in 1966­67 he had received a sum of Rs.28,019 as

compensation   due   to   the   vesting   of   entire   land   in   the   State

Government and the Compensation Officer had determined the same

under   the   Abolition   Act.   The   land,   in   any   event,   had   vested   in   the

State.   The   second   time   the   compensation   of   Rs.57,388/­   had   been

received   in   the   year  1980­81   under  the   Ceiling  Act,   1972.     For   the

third   time,   the   respondent   has   received   compensation   in   a   sum   of

Rs.60 lakhs. The respondent has committed a serious fraud. It was

also urged that Rajinder Singh has filed W.P. No.256/1979, the High

Court dismissed the  writ petition and  observed  that  the  respondent

has acted unfairly knowing fully well that the land had already vested

in   the   State   and   made   other   observations   regarding   successive

litigations   preferred   by   the   respondent   and   the   withdrawal   of   RFA

No.9/1973. 

16

27. Learned Additional Solicitor General appearing on behalf of the

appellants further urged that as per the principle, fraud vitiates, the

respondents are not entitled to any compensation. They could not be

permitted to take advantage of the continuance of wrong entry. There

was   no   title   left   with   Rajinder   Singh   as   the   land   had   vested

automatically in the State under the Abolition Act. The LAO had also

directed   not   to   pay   the   compensation   owing   to   the   ceiling   case   in

which Late Rajinder Singh has already received the compensation and

land   had   been   declared   surplus.   The   question   involved   is   not   of

determination of title under sections 18 and 30 of the LA Act but the

title   stood   extinguished   is   apparent   from   Section   27   and   ceiling

proceedings of which evidence has been permitted to be adduced by

this Court. Even the LAO and the Reference Court have ordered that

there was no title with Rajinder Singh, as such, compensation was not

to be paid. The effect of previous proceedings and the overall conduct

of Rajinder Singh ought to have been taken into consideration by the

High Court. The observation made by the High Court that it could not

go into the question of the title of Rajinder Singh in the proceedings is

wholly incorrect as it is the serious case of fraud, the title has already

been adjudicated conclusively and lost in other proceedings. It was not

a case of an adjudication of title in the present proceedings. The effect

of Section 27 proceeding and that of ceiling Act  case was required to
17

be   considered.   The   High   Court   could   not   have   permitted   the

perpetuation of fraud while dismissing the first appeal after this Court

has remitted the matter to it. 

28. It was further urged that the observation made by the LAC in his

award in 1989 not to make payment of compensation, due to ceiling

case was wholly legal and valid. Even the Reference Court has held in

the cases that there was no title with the respondents and the appeal

against the same R.F.A. is pending in the High Court. The High Court

ought to have exercised the supervisory power as there was an error

apparent on the face of the record and to prevent abuse of process of

law.   When   the   principle   of   ‘fraud   vitiates’   is   attracted,   the   label   of

proceedings is not material and the court is bound to look into same

and  relegation to  a remedy of  the civil suit could not be  said  to  be

appropriate in the facts of the instant case. 

29. It was contended by learned senior counsel on behalf of LRs. of

Late Rajinder Singh that the question of the pre­existing right of the

State cannot be gone into in these proceedings. The land in question

did   not   vest   in   the   State   under   the   Abolition   Act.   Even   if   the

amendment of pleadings and additional evidence had been allowed by

this Court, the pre­existing right of the State over the property cannot

be gone into in proceedings under section 18 or 30 of the LA Act. It

was not open to the State Government to question the title of the land­
18

owners in reference proceedings. The State had filed an appeal against

the   reference   order   which   was   dismissed   on   3.6.2004   as   barred   by

limitation. It was also contended that the land did not vest in the State

as it was under personal cultivation. Under the Abolition Act, there

was vesting of land which was under tenancy only. Land in question

was not within the purview of the term ‘land’ as defined in section 2(5)

in the Abolition Act, as such, there was no vesting of the same in the

State.   Though,   1011   bighas   and   6   Biswas   of   land   in   village   Jhakri

vested   in   the   State   and   mutation­order   was   made   on   27.2.1962.

However,  certain  other lands  which  were  under  personal  cultivation

had been excluded, later on, the Compensation Officer also passed an

order determining compensation on 12.4.1966 which was in respect of

tenancy land and not in respect of land under personal cultivation or

the land not assessed to land revenue. Tenants have been given the

rights over the land mentioned in the order dated 12.4.1966 passed by

the Compensation Officer. 

30. It was also contended that the land under personal cultivation

was mentioned in the revenue records as ‘Banjar Kadim’ which could

not   be   said   to   be   ‘land’   within   the   meaning   of   Abolition   Act   nor   it

vested in the State Government. The area of Village Jhakri which was

left   with   Rajinder  Singh   was   2119   bighas   and   19   Biswas.   The   said

land did not vest in the State. After remand of the case from this Court
19

under Section 27 of Abolition Act, the writ petition was withdrawn and

civil suit No.15/1970 was filed and the same was dismissed by the

High Court. The suit was also withdrawn in appeal as such there was

no adjudication of the rights in the previous rounds of proceedings. 

31. Learned counsel on behalf of the respondents further contended

that   at   the   time   of   land   acquisition   neither   the   land   was   finally

declared surplus nor possession was taken under the Ceiling Act, as

such it did not vest in the State unless the possession was taken. The

acquisition  of  land   under  the  LA  Act  is   protected   under  the  Ceiling

Act.   The   statement   made   by   the   counsel   on   behalf   of   the   Power   of

Attorney­holder of Rajinder Singh during the course of the first appeal

withdrawing Suit No.15/1970 was incorrect. As the order passed by

the Collector in ceiling case declaring the land surplus had been set

aside by the Financial Commissioner. As such an incorrect statement

was made before the High Court; maybe it was made in ignorance of

the facts. Earlier vide order dated 10.6.1980, 10027.5 bighas of land

was   declared   surplus   and   vide   order   dated   10.11.1993,   additional

9679   bighas   total   19706.5   bighas   was   declared   as   surplus.   Even   if

compensation was collected, it would not make any difference as the

land did not vest in the State unless possession was taken.

32. Following questions arise for consideration:
20

(i) whether land has vested in State under the Abolition Act, and effect

of acceptance of compensation under the said Act?

(ii) Effect of the proceedings under the Ceiling Act?

(iii) Effect of withdrawal of Civil Suit No.15/1970 in appeal.

(iv) Whether the question of right, title or interest of Late Rajinder

Singh or his successors to obtain compensation can be considered in

the proceedings under sections 18 and 30 of the LA Act? Particularly,

on the basis of the principle “fraud vitiates”.

(v) Whether   the   respondents   who   are   claiming   on   the   basis   of

patta /transfer made by Rajinder Singh, are bona fide transferees and

entitled to compensation? 

Question   No.1:   In   Re.   the   effect   of   the   H.P.   Abolition   of   Big
Landed Estates, Act, 1953

33. After Independence was achieved, in order to bring the agrarian

reforms,   the   Abolition   Act   was   enacted   in   the   State   of   Himachal

Pradesh which came into force on Republic Day w.e.f. 26.1.1955. The

Abolition Act has been enacted to provide for the abolition of the big

landed estates and to reform the law relating to tenancies and to make

provisions   for   matters   connected   therewith   in   Himachal   Pradesh.

‘Estate’, ‘land­owner’ and ‘holdings’ have been defined in section 2(3)

of the Abolition Act and have the meanings respectively assigned to

these   words   in   the   Punjab   Land   Revenue   Act,   1887   as   in   force   in

Himachal Pradesh immediately before 26.1.1950. 
21

34. The terms ‘estate’, ‘land­owner’ and ‘holding’ have been defined

under sections  3(1),   3(2)  and   3(3)  of   the  Punjab   Land   Revenue   Act,

1867are extracted hereunder:

“3.                 Definition:   ­   In   this   Act,   unless   there   is
something   repugnant   in   the   subject   or   context;   (1)
“estate”  means   any  area—   (a)                        for  which   a
separate record­of­rights has been made; or (b) which
has been separately assessed to land revenue, or would
have   been   so   assessed   if   the   land­revenue   had   not
been   released,   compounded   for   or   redeemed;   or   (c)
which the   State Government may, by general rule or
special order, declare to be an estate;

 

(2)   “land­owner”   does   not   include   a   tenant   or   an
assignee   of   land­revenue,   but   does   not   include   a
person to whom a holding  has been transferred, or an
estate or holding has been let in farm, under this Act
for the recovery of an arrear   of land­revenue or of a
sum   recoverable     as   such   an   arrear   and   every   other
person not hereinbefore in this clause mentioned  who
is  in possession  of  an  estate or any share  or portion
thereof , or in the enjoyment of any part of the profits
of an estate;

 

                     (3) “holding” means a share or portion of an
estate held by the land­owner or jointly by two or more
land­owners.”

35. Estate means any area for which a separate record of rights has

been made; or which has been separately assessed to land revenue or

would   have   been   so   assessed   if   the   land   revenue   had   not   been

released, compounded for or redeemed. Definition of ‘land­owner’ does

not   include   a   tenant   or   an   assignee   of   land   revenue,   and   holding
22

means a share or portion of an estate held by the landowner or jointly

by two or more persons.

36. The word ‘holding’ as defined in the Punjab Land Revenue Act,

1887   would   mean   an   estate   which   means   any   area   for   which   a

separate record of rights has been made or which has been separately

assessed   to   land   revenue,   or   would   have   been   so   assessed   to   land

revenue   in   case   it   had   not   been   released,   compounded   for   or

redeemed,   or   has   been   declared   to   be   an   estate   by   the   State

Government. Thus, expression ‘holding’ would include the area of an

estate   also   if   it   is   assessed   or   would   have   been   assessed   but   for

release,   compounding   or   redeeming   of   land   revenue.   As   per   the

definition of the estate in section 3(1) of the Punjab Act, estate means

any   area   for   which   separate   record   of   rights   has   been   made.   The

expression   land­owner   used   in   Section   27   has   to   be   understood   as

defined in section 3(2) of the Punjab Act. Similarly, the definitions of

‘estate’ and ‘holding’ in the Punjab Act assume significance.

37. The ‘land’ has been defined in section 2(5) of the Abolition Act

thus:

“(5)   “land”   means   land   which   is   not
occupied   as   the   site   of   any   building   in   a
town or village and is occupied or has been
let for agricultural purposes or for purposes
subservient   to   agriculture,   or   for   pasture,
and includes – 

(a)     the   sites   of   buildings   and   other
structures on such land,
23

(b)  orchards,

(c)  ghasnies;”

38. The ‘landlord’ has been defined in section 2(6) of Abolition Act to

mean a person under whom a tenant holds land, and to whom the

tenant is or but for a contract to the contrary, would be liable to pay

rent for the land. Chapter II of the Abolition Act deals with the rights

of occupancy of a tenant. Acquisition of proprietary rights by tenants

has been dealt with  in Chapter III from sections 9 to  27. Section 9

provides   for   the   appointment   of   Compensation   Officer.   Section   11

deals   with   the   right   of   the   tenant   to   acquire   the   interests   of   the

landowner. A tenant other than a sub­tenant can apply under section

11 for the acquisition of right, title, and interest of the landowner in

the   land   of   tenancy   held   by   him   under   the   landowner.   Section   12

deals with the determination of the amount of compensation payable

by a tenant for the acquisition of the right, title and interest of the

landowner.   Section   15   deals   with   the   acquisition   by   the   State

Government   of   the   rights   of   the   landowner.   Same   is   extracted

hereunder:

“15.     (1)     Notwithstanding   anything
contained in the foregoing provisions of this
Chapter   but   subject   to   the   provisions   of
clause (d) and clause (g) of sub­section (1) of
Section   54,   the   State   Government   may   by
notification   in   the   Gazette   declare   that   as
from such date and in respect of such area
as may be specified in the notification, the
24

right, title and interest of the landowner in
the lands of any tenancy held under him by
a tenant shall stand transferred to and vest
in   the   State   Government   free   from   all
encumbrances created in such lands by the
landowner.

(2)  With effect from the aforesaid date – 

(a)   the landowner shall cease to have any
right to collect or to receive any rent or any
share of the land revenue in respect of such
lands   and   his   liability   to   pay   the   land
revenue   in   respect   of   the   lands   shall   also
cease;

(b)   the tenant shall pay direct to the State
Government the rent he was liable to pay to
the   landowners   before   the   date   of   the
notification; and 

(c)   the consequences mentioned in clauses

(b)   to   (f)   of   section   84   shall  mutatis
mutandis ensue.”

39. Section 16 of Abolition Act deals with payment of compensation

to   the   landowners   for   the   acquisition   of   their   rights.   Section   16   is

extracted hereunder: 

“16.   The landowner whose right, title and
interest in lands have been acquired by the
State Government under Section 15 shall be
entitled   to   compensation   which   shall   be
calculated as far as practicable according to
the provisions of sections 12 and 13.”

40. Interest   on   compensation   is   payable   under   section   18   of

Abolition Act. Section 19 deals with the claims for compensation and

determination of such claims and in case of a dispute, it has to be
25

referred to civil court under section 20. Where the landowner is minor,

it has to be deposited with the Collector or in any bank selected in this

behalf   by   the   State   Government   as   provided   in   section   22.   The

Compensation Officer shall have the powers of a civil court under the

Code of Civil Procedure for the purposes enumerated therein. Section

26 deals with the power to frame rules to carry out the purposes of the

Chapter.

41. Section 27 of the Abolition Act deals with the vesting of rights of

ownership   in   the   Government.   The   right   of   the   landowner   whose

landholding exceeds the annual land revenue of Rs.125 per year, the

right,   title   and   interest   of   such   owner   shall   be   deemed   to   be

transferred   and   vested   in   the   State   Government   free   from   all

encumbrances.   The   vesting   of   such   holding   of   the   landowner   is

automatic in case revenue of the landholding is exceeded by Rs.125

per   year.   However,   the   only   saving   grace   is   provided   under   section

27(2) to the extent the land is under the personal cultivation of the

landowner. The rights of intermediaries get automatically vested in the

State   Government   under   section   27(1),   the   landowner   is   entitled   to

receive   compensation   under   section   27(3)   to   be   determined   by   the

Compensation Officer having regard to the provisions of sections 17

and 18 of the Abolition Act. Section 27 is extracted hereunder:

“27.     (1)     Notwithstanding   anything
contained in the foregoing provisions of this
26

Chapter,   a  landowner  who   holds   land,   the
annual   land   revenue   of   which   exceeds
Rs.125 per year, the right, title and interest
of such owner in such land shall be deemed
to have been transferred and vested in the
State   Government   free   from   all
encumbrances.

(2)     Nothing   contained   in   sub­section   (1)
shall apply in respect of such land which is
under   the   personal   cultivation   of   the
landowner.

(3)     The   landowner   whose   rights   are
acquired under sub­section (1) by the State
Government,   shall   be   entitled   to   receive
compensation which shall be determined by
the   Compensation   Officer   having  regard   to
Sections   17   and   18   of   this   Act,   in
accordance with the provisions of Schedule
II, but in the case of such occupancy tenant
who   is   liable   to   pay   rent   in   terms   of   land
revenue or the multiple of land revenue, the
compensation   payable   to   his   landowner
shall   be   computed   in   accordance   with
Schedule I.

(4)  The right, title and interest of the land­
owner acquired under sub­section (1) or (2)
shall   be   transferred   by   the   State
Government   on   the   payment   of
compensation in accordance with Schedule
I to such tenant who cultivates such land.

(5)     The   State   Government   shall   give
rehabilitation   grant   according   to   the   rules
framed   under   this   Act,   to   such   small
landowner   whose   right,   title   and   interest
have   been   extinguished   and   who   does   not
have any other means of livelihood.”

It   is   apparent   from   section   27   that   it   contains   non­obstante

clause and it is applicable to the land as defined in section 2(5) which
27

is not occupied as the site of any building in a town or village and is

occupied   or   has   been   let   for   agricultural   purposes   or   for   purposes

subservient to agriculture, or for pasture. The definition is inclusive

and wide and it covers the sites of buildings and other structures on

such  land,  orchards,   and   ghasnies   too.   Thus,  the   definition  of  land

being   inclusive   is   very   wide   and   in   case   the   land   revenue   of   the

holding   of   Zamindar   exceeds   Rs.125   per   year   except   for   the   land

under personal cultivation, entire land holding would vest in the State

Government and such vesting is automatic.

42. A reading of section 27 makes it clear that on the abolition of

estates except for the land which is under personal cultivation of the

landowner,   vests   in   the   State.   Vesting   is   automatic   and   would   not

depend upon the payment of compensation and this has already been

held by this Court vide order dated 17.9.1969 in the case filed by Late

Rajinder   Singh.   It   is   crystal   clear   that   vesting   of   the   land   is   not

confined   to   the   land   held   under   the   tenancy   right.   The   expression

used in section 27 is “landowner” who holds the land. Thus, there is

no  scope  for  the  submission   that  section  27  is   applicable  only to   a

land held by the tenant in tenancy. It is applicable to all kinds of land

as   defined   in   the   Abolition   Act   held   by   the   landowner   and   the

definition of the land in Abolition Act is inclusive and would include all

kinds of land in a town or village which is not occupied by any site of
28

the   building.   Thus,   all   land   which   is   not   occupied   by   any   building

situated   in   a   town   or   building   would   vest   in   the   State   and   a   land

which   has   been   let   for   agricultural   purpose   or   for   purposes

subservient to agriculture or for pasture including the sites of building

and other structure of the land, orchard, and ghasnies would vest in

the State. Thus, it is apparent that the land which is Banjar, Abadi,

Gharat, Kalhu, and Gair­Mumkin are all covered under the definition

of land. 

43. The big estates were sought to be abolished by the H.P. Abolition

Act. When section 27 of the Abolition Act and definition of land is read

with   ‘holding’   and   ‘estate’   and   ‘landowner’   as   defined   in   the   Punjab

Land Revenue Act, 1887 it is clear that the land held by late Rajinder

Singh definitely exceeded revenue of Rs.125 per year as is apparent

from documents and various orders passed in the case. The object of

the Abolition Act is to provide for the abolition of big landed estates

and to bring land reform in the law relating to tenancies and to make

provisions for matters connected therewith. The land holding of Late

Rajinder Singh was a big estate and was definitely covered under the

purview of the Act and in particular under section 27 and all the lands

vested in the State except the land under his personal cultivation.

44. Thus,   we   are   of   the   considered   opinion   that   the   area   under

personal cultivation which was saved in favour of Rajinder Singh was
29

64 bighas 12 Biswas only as specified. It is apparent from the order

dated   27.2.1962   Khata   No.1   Kita   measuring   1011   bighas   6   Biswas

vested in the ownership of Government of Himachal Pradesh in village

Jhakri. In the review on 19.9.1964, there was only partial modification

with respect to area 14 bighas 12 Biswas.  The land revenue of land at

Jakhri as apparent from Jamabandi of 1955­56 at the time when the

Abolition Act came into force was Rs.155.58 it was more than Rs.125

as   such   the   land   which   was   Banjar   kadim   or   otherwise   not   under

personal cultivation had vested in the State.

45. Under the Abolition Act compensation was determined under the

provisions   of   section   27(1)   and   was   ordered   to   be   paid   by   the

Compensation   Officer,   Mahasu   District,   Kasumpti   vide   order   dated

12.4.1966.   Sum   of   Rs.28,019   had   been   paid   to   Rajinder   Singh.

Though payment of compensation was not a condition precedent for

vesting   of   land   it   was   automatic,   Rajinder   Singh   was   paid

compensation   also   for   the   land   mentioned   in   the   order   of

Compensation Officer. Even if the compensation was not paid for some

land,   as   that   was   not   under   personal   cultivation   had   also

automatically vested free from all encumbrances in the State. 

46. The subsequent attempt made by Rajinder Singh to claim that

the   land   was   not   covered   under   the   definition   of   land,   was   wholly

frivolous, unacceptable and was rightly rejected in C.S. No.15/1970
30

filed by Rajinder Singh. This Court in proceedings under section 27 of

Abolition Act vide order dated 17.9.1969 ordered that the land only

under   personal   cultivation   was   saved   and   not   any   other   land.   The

finding recorded in the remand order on the question of law is binding

otherwise also the position of law is what was held by this Court in the

aforesaid   decision.   After   this   Court   remitted   the   matter   for

examination   of   the   question   which   was   the   land   under   personal

cultivation that would only be saved from vesting. To avoid rigor of the

order   the   writ   petition   was   withdrawn   by   Late   Rajinder   Singh   with

liberty to   file  a civil  suit and  Suit  No.15/1970  was  filed.  The  stand

taken was that the said land was Banjar, Abadi, Gharat, Kohlu, and

Gair­Mumkin.   The   stand   taken   that   the   land   was   Ghasni   that   is

wasteland   and   Banjar   land   itself   indicated   that   the   land   was   not

under personal cultivation  and  thus as per the case  set up in Civil

Suit   by   the   plaintiff,   Rajinder   Singh   it   was   clear   that   he   has

abandoned the stand that the land was under personal cultivation and

took the aforesaid stand. The said stand itself made clear that the land

was not under personal cultivation, at the time of abolition and had

vested  in   the   State  and   we  have  no   hesitation   to   arrive  at  the  said

conclusion based on the case set up by the plaintiff in the course of

civil suit No.15/1970.

31

47. The   Banjar   land   or   Banjar   Kadim   is   nonetheless   the   land   as

defined in section 2(5) of the Abolition Act. Apart from that, it is clear

that ghasni land is also included in the definition of land, no doubt

about it that growing of grass is for agriculture purpose. However, the

pasture or grassland cannot be said to be under personal cultivation

and such land would also vest in the State. The expression used is

personal cultivation i.e. the cultivation by dint of his own labour. The

agriculture   is   a   wider   term   than   personal   cultivation   and   would

include   several   aspects   such   as   dairy­farming,   the   use   of   land   as

grazing,   meadow   or   pasture   land   or   orchard   or   other   land   or   for

market   gardens   or   nursery   grounds.   The   fructus   naturales   is   the

outcome of nature  alone but such land cannot be said to be under

personal cultivation as envisaged in the Abolition Act.   

48. In Jadab Singh  Ors. v. The Himachal Pradesh Administration 

Ors.   AIR   1960   SC   1008,   this   Court   considered   the   question   of   the

abolition of estates which was declared invalid as having been passed

by the State legislature which was not duly constituted. A validating

Act   was   passed   by   the   Parliament.   This   Court   considered   the

legislature competence and constitutional validity of the Abolition Act.

It was held that in view of Article 240 as it stood before its amendment

by the Constitution (Seventh Amendment) Act, 1956, the Parliament

was   competent   to   enact   the   validating   Act.   The   provisions   of   the
32

Abolition Act did not infringe Articles 19 and 31 of the Constitution of

India and the Abolition Act fell within the protection of Article 31A of

the Constitution and it was not open to challenge on the ground that

it infringed Articles 19 and 31 of the Constitution. The intent of the

Abolition Act is that the agrarian reforms by Abolition of Big Landed

Estates have to be given the full effect. Once land has vested in the

State, it was not open to Rajinder Singh on the basis of continuation

of wrong entries in revenue records, to claim any right, title or interest

much less compensation under the Ceiling Act as well as under the

provisions of the LA Act. Thus, the entire land on the condition being

satisfied   with   the   landed   holdings   of   a   landowner   the   annual   land

revenue of which is Rs.125 or more, land vested in the State and not

excess part over and above the land to which the said land revenue is

ascribed, with the saving of personally cultivated land.

2. In Re effect of proceedings under the Ceiling Act:

49. We advert to the question as it has relevance though it is not

necessary, in view of the findings recorded that land had vested in the

State under the provisions of the Abolition Act.

50. The Ceiling Act came into force in 1972 providing a ceiling on

agricultural   holdings.   Section   11   of   the   Ceiling   Act   is   extracted

hereunder:

33

“11. Vesting of surplus area in the State 
Government­
The surplus area of a person shall, on the date
on   which   possession   thereof   is   taken   by  or  on
behalf   of   the   State   Government,   be   deemed   to
have been acquired by the State Government for
a   public   purpose   on   payment   of   amount
hereafter   provided   and   all   rights,   title,   and
interests   (including   the   contingent   interest,   if
any), recognised by any law, custom or usage for
the   time   being   in   force,   of   all  persons   in   such
area shall stand extinguished  and such rights,
title   and   interests   shall   vest   in   the   State
Government free from any encumbrance:

Provided   that   where   any   land   within   the
permissible area of the mortgagor is mortgaged
with   possession   and   falls   within   the   surplus
area of the mortgagee, only the mortgagee rights
shall   be   deemed   to   have   been   acquired   by   the
State Government and the same shall vest in it.”

51. Section 4 deals with the permissible ceiling area and section 6

defines a ceiling area in excess of the permissible area. The provisions

of sections 4 and 6 are extracted hereunder: 

 “4. Permissible area­
(1)   The   permissible   area   of   a   landowner   or   a
tenant or a mortgagee with possession or partly
in one capacity or partly in another of person or
a family consisting of husband, wife and up to
three minor children shall be in respect of­

(a) land under assured irrigation capable of
growing two crops in a year­ 10 acres.

(b) land under assured irrigation capable of
growing one crop in a year­ 15 acres.

(c)   land   of   classes   other   than   described   in
clauses   (a)   and   (b)   above   including   land
under orchards­30 acres.

34

(2)   The   permissible   area   for   the   purposes   of
clause   (c)   of   sub­section   (1)   for   the   districts   of
Kinnaur and Lahaul and Spiti, Tehsil Pangi and
Sub­Tehsil   Bharmaur   of   Chamba   district,   area
of   Chhota   Bhangal   and   Bara   Bhangal   of
Baijnath   Kanungo   Circle   of   Tehsil  Palampur  of
Kangra district, and area of Dodra Kowar Patwar
Circle of Rohru Tehsil and Pandrabis Pargana of
Rampur   Tehsil   of   Shimla   district   shall   be   70
acres.

(3) The permissible area of a family under sub­
section (1) shall be increased by one­fifth of the
permissible area under sub­sections (1) and (2)
for   each   additional   minor   member   of   a   family
subject   to   the   condition   that   the   aggregate
permissible   area   shall   not   exceed   twice   the
permissible area of family under sub­sections (1)
and (2).

(4) Every adult son of a person shall be treated
as a separate unit and he shall be entitled to the
land   up   to   the   extent   permissible   to   a   family
under   sub­sections   (1)   and   (2)   subject   to   the
condition   that  the   aggregate   land   of   the  family
and that of the separate units put together shall
not exceed twice the area permissible under the
said sub­sections:

Provided that where the separate unit owns any
land, the same shall be taken into account for
calculating the permissible area for that unit.

(5) If   a   person   holds   land   of   two   or   more
categories described in clauses (a), (b) and (c) of
sub­section   (1)   and   sub­section   (2)   of   this
section   then   the   permissible   area   shall   be
determined on the following basis: ­

(i) in the areas mentioned in sub­section (2) of
this   section,   one   acre   of   land   mentioned   in
clause (a) of sub­section (1) shall count as one
and a half acres of land mentioned in clause (b)
of   sub­section   (1)   and   seven   acres   of   land
mentioned in clause (c) of sub­section (1); 1976.
35

(ii) in the areas other than the areas mentioned
in   sub­section   (2)   of   this   section,   one   acre   of
land  mentioned  in  clause  (a) of  sub­section  (1)
shall   count   as   one   and   a   half   acres   of   land
mentioned in clause (b) of sub­section (1), and
three   acres   of   land   mentioned   in   clause   (c)   of
sub­section (1):

Provided that on the basis of ratio prescribed in
clauses (i) and (ii), the permissible area shall be
converted into the category of land mentioned in
sub­section   (2)  and   in   clause (c)  of   sub­section
(1)   as   the   case   may   be,   and   the   total   area   so
converted   shall  not   exceed   70   acres   in   case   of
clause (i) and 30 acres in case of clause (ii)].

(6)  Where  a  person  is  a member  of  the  family,
the land held by such person together with the
land held by all the members of the family shall
be   taken   into   account   for   the   purpose   of
calculating the permissible area.”

“6. Ceiling on land­
Notwithstanding   anything   to   the   contrary
contained   in   any   law,   custom,   usage   or
agreement,   no   person   shall   be   entitled   to   hold
whether   as   a   landowner   or   a   tenant   or   a
mortgagee   with   possession   or   partly   in   one
capacity and partly in another, the land within
the   State   of   Himachal   Pradesh   exceeding   the
permissible area on or after the appointed day.”

52. The proceedings were initiated under the Ceiling Act and order

was   passed   by   Collector   (Ceiling)   on   10.6.1980   declaring   10,027

bighas 5 Biswas of land as surplus. It was mentioned in the order that

the   owner   had   taken   compensation   of   Rs.57,888.80   which   was
36

calculated   under   section   14   of   the   Act.   Voucher   details   have   been

given as follows:


V.No. Amount Date of receiving compensation
61 18620­60 3.11.80
62 10900­00 5.11.80
63 15000­00 29.1.81
64 3935­65 20.3.81
65 9600­00 31.3.81

53. Now, the factum of withdrawal of the amount of compensation

was disputed before us by contending that the compensation under

the Ceiling Act had not been received. It passes comprehension that

how it lies in the mouth to even contend in view of the clear statement

made   in   the   order   passed   by   the   competent   authority   and   voucher

numbers with the date on which payment had been made. Rajinder

Singh   did   not   question   order   dated   30.6.1980.   On   the   contrary,

reference was made by the Settlement Officer with respect to the order

of   the   Competent   Authority   on   the   ground   that   his   minor   son   was

illegally   allotted   one   unit.   Financial   Commissioner   has   taken   the

matter   in   Revision   No.224/1982   against   the   aforesaid   order.   It   was

pointed   out   by   the   Settlement   Officer   that   Rajeshwar   Singh   son   of

Rajinder   Singh   was   minor   and   was   not   entitled   to   any   land

independently but was allotted one unit by the Collector (Ceiling). He

was   minor   on   the   appointed   day   i.e.   24.1.1971   and   Rajinder   Singh

and his family consisting of children including minor Rajeshwar Singh
37

were   entitled   to   only   one   unit   of   permissible   area.   The   Financial

Commissioner in the order dated 5.9.1985 has held against Rajinder

Singh   that   his   minor   son   Rajeshwar   Singh   could   not   have   been

allotted one unit vide order of competent authority dated 10.6.1980,

as   such   one   unit   more   land   has   been   allotted   to   the   family   than

permissible   under   the   ceiling   law.   It   was   also   held   that   without

enquiry transfers were held to be bona fide. Thus, the order passed by

the SDO was set aside and the case was remanded to pass fresh order

to declare the additional land as surplus than the one determined in

the earlier order. The order of Competent Authority dated 10.6.1980

was not questioned by Late Rajinder Singh or his family members nor

the   order   of   Financial   Commissioner   passed   on   5.9.1985   was

questioned.   It   was   not   an   order   in   favour   of   Rajinder   Singh   as

contended on behalf of the respondents but was against his interest

and remand order of 5.9.1985 directing additional land to be declared

surplus also has attained finality. After remand, Collector (Ceiling) has

declared additional land as surplus and total 19706 bighas 5 Biswas

had   been   declared   as   surplus.   As   against   the   order   passed   by

Collector (Ceiling) dated 10.11.1993, the appeal was preferred to the

Commissioner   which   was   dismissed   on   30.8.1996.   Revision   filed

against   the   said   order   was   also   dismissed   on   18.1.2002   by   the

Financial Commissioner. 

38

54. The   fact   is   conclusively   established   that   land   in   question   had

been declared as surplus and compensation under the Ceiling Act had

also  been  received,  even  though  the  land  had  already  vested  in  the

State   under   the   Abolition   Act.   Once   the   disputed   land   had   been

admittedly declared surplus in Ceiling Act vide order dated 30.6.1980,

there was no question of payment of compensation to Rajinder Singh

or to his legal representatives in proceedings initiated later on in the

year 1987 under the L.A. Act. The Land Acquisition Collector in 1989

was   justified   in   directing   that   the   compensation   determined   should

not be paid due to the effect of the Ceiling Act and that question was

raised   in   the   Reference   Court   also,   it   was   incumbent   upon   the

Reference   Court   to   go   into   the   aforesaid   aspects.   It   was   not   fact

situation that question of the title has been disputed and decided in

reference   proceedings   but   whether   Rajinder   Singh   or   his   LRs.   were

entitled   to   claim   compensation   in   view   of   the   proceedings   and   that

orders passed under the Abolition Act and Ceiling Act were definitely

required to be gone into. Thus, we are of the considered opinion that

once   land   has   been   declared   surplus   and   compensation   has   been

received.  It was  not  open  to  receive  it  again   in  the  land   acquisition

case.

(iii) In Re: Effect of withdrawal of C.S. No.15/1970 in appeal
39

55. Civil Suit No.15/1970 was dismissed on merits. Thereafter in the

first appeal, it was withdrawn by Rajinder Singh before the Division

Bench on 23.6.1986. Order dated 23.6.1986 passed by the High Court

of   withdrawal   of   C.S.   No.15   of   1970   in   first   appeal   No.9/1973   is

extracted hereunder:

     

“In the present appeal, the learned counsel for
the appellant has given the statement that by an
order   dated   10.06.1980   passed   by   the   Collector
Rampur   Bushahar   in   case   State   of   Himachal
Pradesh   vs.   Rajkumar   Rajender   Singh
,   under
section   8   of   Himachal   Pradesh   Land   Ceiling   Act,
the   disputed   land   has   been   acquired   by   the
Respondent   and   the   Appellant   has   been   paid
compensation for the same. He has further stated
that in the view of this subsequent event he may
be permitted to withdraw the suit and the appeal
may be dismissed as having become infructuous.

It is not disputed that the land in dispute in this
appeal is also the subject matter of dispute in the
order   dated   10.06.1980   passed   by   the   Collector
Rampur   Bushahar.   As   the   land   in   dispute   has
been acquired and the appellant has been paid the
compensation   for   the   same,   therefore,   we   are   of
the view that due to the subsequent events there
are sufficient grounds for allowing the plaintiff to
institute a fresh suit for the subject matter and on
the same cause of action. As a result, we allow the
Plaintiff   to   withdraw   the   suit   with   permission   to
file a fresh suit in respect of the subject matter of
the suit on the same cause of action in case there
is any necessity to file such a subsequent suit. The
suit   is   dismissed   as   withdrawn   and   the   present
appeal is dismissed as having become infructuous.
The parties are left to bear their own costs of this
appeal.”

40

It was stated by the counsel for Late Rajinder Singh before the

High Court in RFA No.9/1973 that compensation had been received

by Rajinder Singh  and  order had  been  passed  on  10.6.1980   by the

Collector, Rampur under the Ceiling Act. The disputed land had been

acquired by the State as such, the permission was sought to withdraw

the suit and it was prayed that appeal be dismissed as infructuous. In

our   opinion,   factually   it   was   not   an   incorrect   statement   but   it   was

correctly made in the High Court that land had been declared surplus

and     compensation   had   been   received,   the   fact   was   supported   by

vouchers mentioned in the order dated 10.6.1980, and it was totally

frivolous   contention   to   the   contrary   raised   by   the   respondents   that

compensation had not been received. It appears that the respondents

have no respect for the truth and have tried to hoodwink the court at

several stages by making false averments and statements to perpetrate

fraud.

56. In essence, after this Court has remitted the matter to the High

Court in the proceedings under the Abolition Act this Court has clearly

held as per order dated 17.9.1969 in the case of Rajinder Singh that

only the land under personal cultivation would be saved. Thereafter he

has   withdrawn   the   writ   application   of   1962,   on   the   ground   that

disputed question of fact was raised in the writ application. It was in

order   to   avoid   adjudication   in   view   observation   of   this   Court   made
41

against interest of Rajinder Singh in aforesaid order and the fact that

as the land was not under personal cultivation, the writ petition was

withdrawn and thereafter in C.S. No.15/1970 that was filed in which,

Rajinder Singh had abandoned the case of land being under personal

cultivation. On the contrary, raised the plea that it was not the “land”

at all and as such it was not within the clutches of the Abolition Act.

57. A Single Bench of the High Court dismissed the suit on merits

and has recorded the finding that the land was not under personal

cultivation   and   it   had   vested   in   the   State   and   it   was   the   “land”   as

defined  in  section 2(5) of the  Abolition  Act.  Thereafter Regular First

Appeal which was preferred before the Division Bench was dismissed

as   infructuous   and   suit   was   withdrawn   by   aforesaid   order   dated

23.6.1986 on the ground that compensation had been received under

the Ceiling Act, and land has been declared surplus. It is clear that

once land has been declared surplus and compensation had been paid

under the  Ceiling Act.  It was  not the  reason  for withdrawal of Civil

Suit   No.15/1970   by   the   plaintiff   Rajinder   Singh   that   the   land   was

personally cultivated by him. It was not at all open to Rajinder Singh

or   his   LRs.   to   take   inconsistent   stands   and   contend   in   the   present

proceedings   that   land   was   under   personal   cultivation.   They   are

estopped   from   doing   it   not   only   by   conduct   but   by   way   of

abandonment of the plea, having not taken it in C.S. No.15/1970. It
42

was not the ground made for withdrawal of suit that land was under

personal cultivation.  The effect is that order of  vesting  has  attained

finality even otherwise withdrawal of suit does not check running of

limitation as provided in Order 23 Rule 2 CPC.  It is futile and too late

in the day to allow the respondent to lay such a claim. 

58. As a matter of fact, the withdrawal of civil suit No.15/1970 was

made   on   the   statement   of   learned   counsel   on   behalf   of   plaintiff

Rajinder Singh that disputed land had been declared as surplus in the

ceiling  proceedings,  compensation  had  been  received  and  under the

provisions of the Ceiling Act. The suit was permitted to be withdrawn

with liberty to file fresh suit whereas there was no such formal defect.

Be that as it may. Once suit has been withdrawn on the ground that

land had been declared surplus and compensation had been received

it   would   create   estoppel  against   the   plaintiff   to   contend   to   contrary

and   from   claiming   compensation   under   the   LA   Act   notwithstanding

permission to file suit because as a matter of fact also, the disputed

land had been declared surplus on 30.6.1980 and additional land in

1993. The land declared as surplus in 1980 attained finality, as well

as order of the Financial Commissioner on 5.9.1985. Both the orders

also   attained   finality.   Thus,   the   order   of   remand   dated   5.9.1985

having attained finality, and it would not be possible to reopen it at

any subsequent stage. Thus, the orders dated 30.6.1980 and 5.9.1985
43

having attained finality vis a vis to Rajinder Singh and compensation

having been received, as the land in question was declared surplus

under the Ceiling Act. No right, title or interest survived with Rajinder

Singh   or   his   successors   to   claim   compensation   under   Land

Acquisition Act.

59. The   proceedings   were   initiated   in   the   year   1987   for   the

acquisition of land whereas the order of ceiling was passed earlier in

1980 and 1985 and subsequently the surplus area was increased in

1993. By no stretch of any principle of law, Late Rajinder Singh or his

successors   could   have   claimed   compensation   in   the   proceedings   in

question   initiated   under   the   LA   Act   in   the   year   1987.   In   our

considered   opinion   the   respondents   Rajinder   Singh   and   his   family

were not entitled to claim any monetary compensation under the LA

Act for the said land. The amount that had been withdrawn under the

LA   Act,   was   wholly   impermissible   and   tantamount   to   playing   fraud

upon   the   legal  system.  As   a  matter  of   fact,   compensation  has   been

taken for the land in the proceedings under the Abolition Act. Even if

compensation   in   respect   of   certain   land   was   not   payable   or   paid,

vesting would not depend upon the same. Land not under personal

cultivation of Jagirdars had vested in the State, as such it was not

open even to obtain compensation for the very same land either under

the provisions of the Ceiling Act which has been received or under the
44

provisions of the LA Act. It was wholly impermissible and illegal and

tantamount   to   scam   committed   by   fraudsters.   The   cases   were

withdrawn one after the other just to perpetuate the fraud on the legal

system by raising the inconsistent pleas and taking unfair and undue

advantage of the wrong continuation of entries in the revenue papers.

(iv) In Re: Question of title under sections 18 and 30 of LA Act
and effect of fraud : 

60. Learned counsel on behalf of the respondents contended that the

existing right of the State cannot be decided in the proceedings under

section   18   or   30   of   the   LA   Act.   Even   if   the   amendment   has   been

allowed,  it  will  not  prohibit  the  respondents   to  raise   untenability  of

such an objection.  Even if amendment along with additional evidence

had been allowed, it will not prohibit the raising of the plea that State

cannot   challenge   the   title   in   such   proceedings.     Reliance   has   been

placed on the decisions of this Court in Sharda Devi v. State of Bihar,

(2002) 3 SCC 705,  Meher Rusi Dalal v. Union of India, (2004) 7 SCC

362, Ahad Brothers v. State of M.P., (2005) 1 SCC 545, and U.P. Awas

Evam Vikas Parishad v. Gyan Devi, (1995) 2 SCC 326, to contend that

only the quantum of compensation can be questioned by local bodies

and not the title of the landowners.

61. In the instant case, as already discussed, the LAO in the award

dated 24.2.1989 has ordered compensation not to be paid as the land
45

has   been   declared   surplus   in   the   ceiling   matter   and   further

proceedings were pending after remand of the case in which additional

land was declared surplus which was allotted illegally to minor  son

Rajeshwar Singh.  The position further worsened in 1993. 

62. In Sharda Devi v. State of Bihar, (2003) 3 SCC 128, the question

arose   whether   Reference   under   Section   30   of   Land   Acquisition   Act,

1894 was maintainable at the instance of the State of Bihar as it was

the owner of the land and the land vested in the State.   It was held

that the State is not a person interested as defined under Section 3(b)

of the Land Acquisition Act, 1894.  This Court observed:

“26. The scheme of the Act reveals that the remedy of reference
under   Section  18   is  intended   to  be   available  only   to  a  ’person
interested’.   A   person   present   either   personally   or   through
representative or on whom a notice is served under Section 12(2)
is obliged, subject to his specifying the test as to locus, to apply
to the Collector within the time prescribed under Section 18(2) to
make a reference to the Court. The basis of title on which the
reference would be sought for under Section 18 would obviously
be a pre­existing title by reference to the date of the award. So is
Section  29,   which  speaks  of  ‘person   interested’.   Finality  to  the
award   spoken   of   by   Section   12(1)   of   the   Act   is   between   the
Collector on one hand and the ’person interested’ on the other
hand and attaches to the issues relating to (i) the true area i.e.
measurement   of   the   land,   (ii)   the   value   of   the   land,   i.e.   the
quantum   of   compensation,   and   (iii)   apportionment   of   the
compensation   among   the   ‘persons   interested’.   The   ‘persons
interested’ would be bound by the award without regard to the
fact whether they have respectively appeared before the Collector
or not. The finality to the award spoken of by Section 29 is as
between   the   ‘persons   interested’   interse   and   is   confined   to   the
issue as to the correctness of the apportionment. Section 30 is
not confined in its operation only to ’persons interested’. It would,
therefore,   be   available   for   being   invoked   by   the   ‘persons
interested’   if   they   were   neither   present   nor   represented   in
proceedings before the Collector, nor were served with a notice
under Section 12(2) of the Act or when they claim on the basis of
46

a title coming into existence post award. The definition of ’person
interested’ speaks of ’an interest in compensation to be made’. An
interest coming into existence post­award gives rise to a claim in
compensation which has already been determined. Such a person
can also have recourse to Section 30. In any case, the dispute for
which Section 30 can be invoked shall remain confined only (i) as
to the apportionment of the amount of compensation or any part
thereof,   or   (ii)   as   to   the   persons   to   whom   the   amount   of
compensation (already determined) or any part thereof is payable.
The State claiming on the basis of a pre­existing right would
not   be   a   ‘person   interested’,   as   already   pointed   out
hereinabove   and  on  account   of  its  right   being  pre­existing,
the  State,   in   such   a   case,   would   not   be   entitled   to  invoke
either Section 18 or Section 30 seeking determination of its
alleged   pre­existing   right.  A   right   accrued   or   devolved   post­
award   may   be   determined   in   a   reference   under   Section   30
depending on Collector’s discretion to show indulgence, without
any bar as to limitation. Alternatively, such a right may be left
open by the Collector to be adjudicated upon in any independent
legal proceedings. This view is just, sound and logical as a title
post­award could not have been canvassed up to the date of the
award   and   should   also   not   be   left   without   remedy   by   denying
access to Section 30. Viewed from this angle, Section 18 and 30
would not overlap and would have fields to operate independent
of each other.”           (emphasis supplied)

63. The question in the instant case is as to whether an incumbent

can be permitted to play blatant fraud time and again and court has to

be   silent   spectator   under   the   guise   of   label   of   the   various   legal

proceedings   at   different   stages   by   taking   different   untenable   stands

whether  compensation   can  be  claimed   several  times   as  done   in  the

instant   case   and   its   effect.     Before   the   land   acquisition   had   been

commenced   in   1987,   the   land   more   than   1000   bighas   had   been

declared a surplus in ceiling case and compensation collected, which

indeed disputed land at Jhakari, it would be a perpetuating fraud in

case such a person is permitted to claim compensation for same very
47

land. Fraud vitiates the solemn proceedings; such plea can be set up

even in collateral proceedings.   The label on the petition is not much

material and this Court has already permitted the plea of fraud to be

raised. Moreover, Appeal arising out of 72 awards is still pending in

the High Court in which Reference Court has declined compensation

on the aforesaid ground.

64. Reliance   has   also   been   placed   on   the   observations   made   in

Meher Rusi Dalal v. Union of India, (2004) 7 SCC 362, in which this

Court has dealt with the issue of apportionment of compensation for

which claim was raised by the Union of India, not in the capacity of

the owner but as a protected tenant.   The claim of tenancy was not

put   forth   before   the   LAO,   though   represented   in   the   acquisition

proceedings.     This   Court   observed   that   in   such   a   case   it   could

reasonably be inferred that no right was being claimed and it ought to

have been made before the LAO if it had any such claim in respect of

pre­existing right.  The LAO was not under a duty to make an enquiry.

The   claim   of   tenancy   at   the   belated   stage   was   an   afterthought   to

frustrate the payment.  The decision has no application to the instant

case   as   the   LAO   in   the   awards   passed,   noted   the   factum   of   ceiling

proceedings as such the effects of the same can always be considered.
48

65. In  Ahad Brothers v. State of M.P.,  (2005) 1 SCC 545, this Court

observed that question of the title of the State over the acquired land,

cannot  be   decided   under  Section  18  of  Land   Acquisition   Act,  1894.

This Court considered that when an award has been passed and the

appellant   was   recorded   as   owner   in   the   revenue   papers,   he   was

entitled to receive compensation.  There is no dispute in the aforesaid

proposition,   however,   in   the   instant   case   facts   are   different   and   a

person cannot be permitted to receive the compensation of vested land

in State under the Abolition Act and when the land had been declared

surplus and compensation paid on wrong entry continued.  The same

wrong entry could not have been permitted to be utilised for award of

compensation to a person under the LA Act.  In the instant case, there

had been earlier proceedings which makes it clear that Rajinder Singh

was   not   entitled   to   claim   compensation   under   the   LA   Act.     It   is

apparent that there was no subsisting right, title or interest left with

Rajinder Singh or his LRs., thus, they could not be permitted to obtain

the compensation.

66. Fraud   vitiates   every   solemn   proceeding   and   no   right   can   be

claimed by a fraudster on the ground of technicalities. On behalf of

appellants,   reliance   has   been   placed   on   the   definition   of   fraud   as

defined in the Black’s Law Dictionary, which is as under: 
49

“Fraud means: (1) A knowing misrepresentation of the truth or
concealment of a material fact to induce another to act to his or
her detriment.   Fraud is usually a tort, but in some cases (esp.

when   the   conduct   is   willful)   it   may   be   a   crime.     (2)   A
misrepresentation made recklessly without belief in its truth to
induce another person to act.   (3) A tort arising from a knowing
misrepresentation,   concealment   of   material   fact,   or   reckless
misrepresentation  made to  induce  another  to  act   to  his or her
detriment.  (4) Unconscionable dealing; esp., in contract law, the
unconscientious   use   of   the   power   arising   out   of   the   parties’
relative positions and resulting in an unconscionable bargain.”

Halsbury’s Law of England has defined fraud as follows:

“Whenever a person makes a false statement which he does not
actually   and   honestly   believe   to   be   true,   for   purpose   of   civil
liability, the statement is as fraudulent as if he had stated that
which he did know to be true, or know or believed to be false.

Proof   of   absence   of   actual   and   honest   belief   is   all   that   is
necessary   to   satisfy   the   requirement   of   the   law,   whether   the
representation   has   been   made   recklessly   or   deliberately,
indifference   or   reckless   on   the   part   of   the   representor   as   the
truth or falsity of the representation affords merely an instance of
absence of such a belief.”

In KERR on the Law of Fraud and Mistake, fraud has been defined

thus:

“It is not easy to give a definition of what constitutes fraud in the
extensive significance in which that term is understood by Civil
Courts of Justice.   The Courts have always avoided hampering
themselves by defining or laying down as a general proposition
what   shall   be   held   to   constitute   fraud.     Fraud   is   infinite   in
variety… Courts have always declined to define it, … reserving to
themselves the liberty to deal with it under whatever form it may
present itself.  Fraud … may be said to include property all acts,
omissions, and concealments which involve a breach of legal or
equitable   duty,   trust   or   confidence,   justly   reposed,   and   are
injurious to another, or by which an undue or unconscientious
advantage   is   taken   of   another.     Al   surprise,   trick,   cunning,
dissembling and other unfair way that is used to cheat anyone is
considered as fraud.   Fraud in all cases implies a willful act on
the part of anyone, whereby another is sought to be deprived, by
illegal or inequitable means, of what he is entitled too.” 

67. In Ram Chandra Singh v. Savitri Devi, (2003) 8 SCC 319, wherein

it   was   observed   that   fraud   vitiates   every   solemn   act.     Fraud   and
50

justice never dwell together and it cannot be perpetuated or saved by

the application of any equitable doctrine including res­judicata.  This

Court observed as under:

“15.  Commission of fraud on court and suppression of material
facts are the core issues involved in these matters.   Fraud, as is
well­known,  vitiates   every   solemn   act.   Fraud  and   justice   never
dwell together.

16. Fraud is a conduct either by letter or words, which induces
the   other   person,   or   authority   to   take   a   definite   determinative
stand as a response to the conduct of former either by word or
letter.

17. It is also well settled that misrepresentation itself amounts to
fraud. Indeed, innocent misrepresentation may also give reason
to claim relief against fraud.

18. A fraudulent misrepresentation is called deceit and consists
in leading a man into damage by willfully or recklessly causing
him to believe and act on falsehood. It is a fraud in law if a party
makes   representations  which  he  knows   to  be   false,  and  injury
ensues   therefrom   although   the   motive   from   which   the
representations proceeded may not have been bad.

*** *** ***

23.   An   act   of   fraud   on   court   is   always   viewed   seriously.   A
collusion or conspiracy with a view to deprive the rights of the
others in relation to a property would render the transaction void
ab initio. Fraud and deception are synonymous.

*** *** ***

25.  Although   in   a   given   case   a   deception   may   not   amount   to
fraud, fraud is anathema to all equitable principles and any affair
tainted   with   fraud   cannot   be   perpetuated   or   saved   by   the
application of any equitable doctrine including res­judicata.”

(emphasis supplied)

68. In Madhukar Sadbha Shivarkar v. State of Maharashtra, (2015) 6

SCC 557, this Court observed that fraud had been played by showing

the   records   and   the   orders   obtained   unlawfully   by   the   declarant,
51

would be a nullity in the eye of law though such orders have attained

finality.  Following observations were made:

“27.   The said order is passed by the State Government only to
enquire into the landholding records with a view to find out as to
whether original land revenue records have been destroyed and
fabricated   to   substantiate   their   unjustifiable   claim   by   playing
fraud upon the Tehsildar and appellate authorities to obtain the
orders   unlawfully   in   their   favour   by   showing   that   there   is   no
surplus land with the Company and its shareholders as the valid
subleases   are   made   and   they   are   accepted   by   them   in   the
proceedings   Under   Section   21   of   the   Act,   on   the   basis   of   the
alleged   false   declarations   filed   by   the   shareholders   and   sub­
lessees Under Section 6 of the Act.  The plea urged on behalf of
the State Government and the de­facto complainants­owners, at
whose instance the orders are passed by the State Government
on the alleged ground of fraud played by the declarants upon the
Tehsildar   and   appellate   authorities   to   get   the   illegal   orders
obtained   by   them   to   come   out   from   the   clutches   of   the   land
ceiling   provisions   of   the   Act   by   creating   the   revenue   records,
which   is   the   fraudulent   act   on   their   part   which   unravels
everything   and   therefore,   the   question   of   limitation   under   the
provisions to exercise power by the State Government does not
arise at all. For this purpose, the Deputy Commissioner of Pune
Division was appointed as the Enquiry Officer to hold such an
enquiry   to   enquire   into   the   matter   and   submit   his   report   for
consideration   of   the   Government   to   take   further   action   in   the
matter.  The   legal   contentions   urged   by   Mr.   Naphade,   in
justification of the impugned judgment and order prima facie at
this stage, we are satisfied that the allegation of fraud in relation
to getting the land holdings of the villages referred to supra by
the   declarants   on   the   alleged   ground   of   destroying   original
revenue   records   and   fabricating   revenue   records   to   show   that
there are 384 sub­leases of the land involved in the proceedings
to   retain   the   surplus   land   illegally   as   alleged,   to   the   extent   of
more   than   3000   acres   of   land   and   the   orders   are   obtained
unlawfully   by   the   declarants   in   the   land   ceiling   limits   will   be
nullity   in   the   eye   of   law   though   such   orders   have   attained
finality, if it is found in the enquiry by the Enquiry Officer that
they are tainted with fraud, the same can be interfered with by
the State Government and its officers to pass appropriate orders.
The landowners are also aggrieved parties to agitate their rights
to get the orders which are obtained by the declarants as they are
vitiated  in   law   on  account   of  nullity  is  the tenable  submission
and   the   same   is   well   founded   and   therefore,   we   accept   the
submission  to  justify the impugned judgment and order of  the
Division Bench of the High Court.”

(emphasis supplied)
52

69. In Jai Narain Parasrampuria v. Pushpa Devi Saraf, (2006) 7 SCC

756,  this  Court  observed  that fraud  vitiates  every  solemn  act.    Any

order or decree obtained by practicing fraud is a nullity.   This Court

held as under:

“55. It is now well settled that fraud vitiated all solemn act. Any
order or decree obtained by practicing fraud is a nullity. [See ­ (1)
Ram Chandra Singh v. Savitri Devi and Ors., (2003) 8 SCC 319
followed   in   (2)   Vice   Chairman,   Kendriya   Vidyalaya   Sangathan,
and Anr. v. Girdhari Lal Yadav, (2004) 6 SCC 325; (3) State of
A.P.   and   Anr.   v.   T.   Suryachandra   Rao
,   (2005)   6   SCC   149;   (4)
Ishwar Dutt v. Land Acquisition Collector and Anr., (2005) 7 SCC
190; (5) Lillykutty v. Scrutiny Committee, SC  ST Ors., (2005) 8
SCC   283;   (6)   Chief   Engineer,   M.S.E.B.   and   Anr.   v.   Suresh
Raghunath Bhokare
, (2005) 10 SCC 465; (7) Smt. Satya v. Shri
Teja   Singh
,   (1975)   1   SCC   120;   (8)   Mahboob   Sahab   v.   Sayed
Ismail
, (1995) 3 SCC 693; and (9) Asharfi Lal v. Koili, (1995) 4
SCC 163.]”

(emphasis supplied)

70. In State of A.P. v. T. Suryachandra Rao, (2005) 6 SCC 149, it was

observed that where land which was offered for surrender had already

been acquired by the State and the same had vested in it.  It was held

that   merely   because   an   enquiry   was   made,   the   Tribunal   was   not

divested of the power to correct the error when the respondent had

clearly committed a fraud.  Following observations were made:

“7. The order of the High Court is clearly erroneous. There is no
dispute   that   the   land   which   was   offered   for   surrender   by   the
respondent had already been acquired by the State and the same
had vested in it. This was clearly a case of fraud. Merely because
an enquiry was made, Tribunal was not divested of the power to
correct the error when the respondent had clearly committed a
fraud.

8. By ”fraud” is meant an intention to deceive; whether it is from
any expectation of advantage to the party himself or from the ill
will   towards   the   other   is   immaterial.   The   expression   “fraud”
involves two elements, deceit, and injury to the person deceived.

53

The   injury   is   something   other   than   economic   loss,   that   is,
deprivation   of   property,   whether   movable   or   immovable   or   of
money and it will include and any harm whatever caused to any
person in body, mind, reputation or such others. In short, it is a
non­economic or non­pecuniary loss. A benefit or advantage to
the   deceiver,   will   almost   always   call   loss   or   detriment   to   the
deceived.   Even   in   those   rare   cases   where   there   is   a   benefit   or
advantage   to   the   deceiver,   but   no   corresponding   loss   to   the
deceived, the second condition is satisfied. [See Dr. Vimla v. Delhi
Administration
,   1963   Supp   (2)   SCR   585   and   Indian   Bank   v.
Satyam Febres (India) Pvt. Ltd
., (1996) 5 SCC 550]

9. A ”fraud” is an act of deliberate deception with the design of
securing something by taking unfair advantage of another. It is a
deception   in   order   to   gain   by   another’s   loss.   It   is   a   cheating
intended to get an advantage. (See S.P. Changalvaraya Naidu v.
Jagannath
, (1994) 1 SCC 1.)

10. ”Fraud” as is well known vitiates every solemn act. Fraud and
justice never dwell together. Fraud is a conduct either by letter or
words,   which   includes   the  other   person   or  authority   to   take   a
definite determinative stand as a response to the conduct of the
former   either   by   words   or   letter.   It   is   also   well   settled   that
misrepresentation   itself   amounts   to   fraud.   Indeed,   innocent
misrepresentation   may   also   give   reason   to   claim   relief   against
fraud.   A   fraudulent   misrepresentation   is   called   deceit   and
consists in leading a man into damage by willfully or recklessly
causing him to believe and act on falsehood. It is a fraud in law if
a party makes representations, which he knows to be false, and
injury   enures   therefrom   although   the   motive   from   which   the
representations   proceeded   may   not   have   been   bad.   An   act   of
fraud   on   court   is   always   viewed   seriously.   A   collusion   or
conspiracy   with   a   view   to   deprive   the   rights   of   the   others   in
relation to a property would render the transaction void ab initio.
Fraud and deception are synonymous. Although in a given case a
deception   may   not   amount   to   fraud,   fraud   is   anathema   to   all
equitable principles and any affair tainted with fraud cannot be
perpetuated or saved by the application of any equitable doctrine
including res judicata. (See Ram Chandra Singh v. Savitri Devi
and Ors
., (2003) 8 SCC 319.)
*** *** ***

13.   This  aspect   of   the   matter   has  been   considered   recently   by
this Court in Roshan Deen v. Preeti Lal, (2002) 1 SCC 100, Ram
Preeti   Yadav   v.   U.P.   Board   of   High   School   and   Intermediate
Education
,   (2003)   8   SCC   311,   Ram   Chandra   Singh   v.   Savitri
Devi
, (2003) 8 SCC 319 and Ashok Leyland Ltd. v. State of T.N.
and Anr
., (2004) 3 SCC 1.

14. Suppression of a material document would also amount to a
fraud on the court, (see Gowrishankar v. Joshi Amba  Shankar
54

Family Trust, (1996) 3 SCC 310 and S.P. Chengalvaraya Naidu v.
Jagannath
, (1994) 1 SCC 1).

15. ”Fraud” is a conduct either by letter or words, which induces
the   other   person   or   authority   to   take   a   definite   determinative
stand as a response to the conduct of the former either by words
or letter. Although negligence is not fraud it can be evidence of
fraud; as observed in Ram Preeti Yadav, (2003) 8 SCC 311.

16.     In   Lazarus   Estate   Ltd.   v.   Beasley   (1956)   1   QB   702,   Lord
Denning observed at pages 712  713: (All ER p. 345C)

“No  judgment   of  a   Court,  no   order  of  a  Minister
can be allowed to stand if it has been obtained by fraud.
Fraud unravels everything.”

In   the   same   judgment,   Lord   Parker   LJ   observed   that   fraud
“vitiates   all   transactions   known   to   the   law   of   however   high   a
degree of solemnity”.

(emphasis supplied)

71. In  A.V. Papayya Sastry v. Govt. of A.P., (2007) 4 SCC 221, this

Court as to the effect of fraud on the judgment or order observed thus:

19. Now, it is well­settled principle of law that if any judgment or
order is obtained by fraud, it cannot be said to be a judgment or
order in law. Before three centuries, Chief Justice Edward Coke
proclaimed;

Fraud avoids all judicial acts, ecclesiastical or temporal.

*** *** ***

22.  It is thus settled proposition of law that a judgment, decree
or   order   obtained   by   playing   fraud   on   the   Court,   Tribunal   or
Authority   is   a   nullity   and   non­est   in   the   eye   of   law.   Such   a
judgment,   decree   or   order   ­­by   the   first   Court   or   by   the   final
Court­­ has to be treated as nullity by every Court, superior or
inferior. It can be challenged in any Court, at any time, in appeal,
revision, writ or even in collateral proceedings.

*** *** ***

38.   The matter can be looked at from a different angle as well.
Suppose,  a  case is  decided  by  a  competent   Court  of Law   after
hearing   the   parties   and   an   order   is   passed   in   favour   of   the
applicant/plaintiff which is upheld by all the courts including the
final Court. Let us also think of a case where this Court does not
dismiss Special Leave Petition but after granting leave decides the
55

appeal finally by recording reasons. Such order can truly be said
to be a judgment to which Article 141 of the Constitution applies.
Likewise,   the   doctrine   of   merger   also   gets   attracted.   All   orders
passed by the courts/authorities below, therefore, merge in the
judgment of this Court and after such judgment, it is not open to
any party to the judgment to approach any court or authority to
review, recall or reconsider the order.

39.     The   above   principle,   however,   is   subject   to   exception   of
fraud.  Once  it   is established that   the order was obtained  by  a
successful   party   by   practising   or   playing   fraud,   it   is   vitiated.
Such order cannot be held legal, valid or in consonance with law.
It   is  non­existent   and  nonest   and  cannot   be  allowed   to   stand.
This  is  the  fundamental   principle  of  law   and  needs  no   further
elaboration. Therefore, it has been said that a judgment, decree
or order obtained by fraud has to be treated as nullity, whether
by the court of first instance or by the final court. And it has to
be treated as nonest by every Court, superior or inferior.

Supervisory jurisdiction of the court can be exercised in case of

error apparent on the face of the record, abuse of process and if the

issue goes to the root of the matter.  

72. In S.P. Chengalvaraya Naidu v. Jagannath, (1994) 1 SCC 1, this

Court noted that the issue of fraud goes to the root of the matter and

it exercised powers under Article 136 to cure the defect.   The Court

observed:

“5. The High Court, in our view, fell into patent error. The short
question   before   the   High   Court   was   whether,   in   the   facts   and
circumstances of this case, Jagannath obtained the preliminary
decree by playing fraud on the court. The High Court, however,
went haywire and made observations which are wholly perverse.
We do not agree with the High Court that ”there is no legal duty
cast   upon   the   plaintiff   to   come   to   court   with   a   true   case   and
prove it by true evidence”.  The principle of ”finality of litigation”
cannot   be   pressed   to   the   extent   of   such   an   absurdity   that   it
becomes an engine of fraud in the hands of dishonest litigants.
The  courts   of  law   are  meant  for   imparting   justice   between   the
parties.   One   who   comes   to   the   court   must   come   with   clean
hands. We are constrained to say that more often than not, the
process   of   the   court   is   being   abused.   Property­grabbers,   tax­
evaders,   bank­loan­dodgers   and   other   unscrupulous   persons
from all walks of life find the court ­ process a convenient lever to
retain the illegal­gains indefinitely. We have no hesitation to say
56

that a person, who’s case is based on falsehood, has no right to
approach   the   court.   He   can   be   summarily   thrown   out   at   any
stage of the litigation.

6. The facts of the present case leave no manner of doubt that
Jagannath obtained the preliminary decree by playing fraud on
the   court.     A   fraud   is   an   act   of   deliberate   deception   with   the
design   of   securing   something   by   taking   unfair   advantage   of
another. It is a deception in order to gain by another’s loss. It is a
cheating intended to get an advantage.   Jagannath was working
as a clerk with Chunilal Sowcar. He purchased the property in
the court auction on behalf of Chunilal Sowcar. He had, on his
own volition, executed the registered release deed (Exhibit B­1S)
in favour of Chunilal Sowcar regarding the property in dispute.
He knew that the appellants had paid the total decretal amount
to his master Chunilal Sowcar. Without disclosing all these facts,
he filed the suit for the partition of the property on the ground
that he had purchased the property on his own behalf and not on
behalf   of   Chunilal   Sowcar.   Non­production   and   even   non­
mentioning of the release deed at the trial tantamounts to playing
fraud on the court. We do not agree with the observations of the
High   Court   that   the   appellants­defendants   could   have   easily
produced the certified registered copy of Exhibit B­15 and non­
suited   the   plaintiff.     A   litigant,   who   approaches   the   court,   is
bound to produce all the documents executed by him which are
relevant   to   the   litigation.     If   he   withholds   a   vital   document   in
order to gain advantage on the other side then he would be guilty
of playing fraud on the court as well as on the opposite party.”

73. In K.K. Modi v. K.N. Modi, (1998) 3 SCC 573, it was observed that

one of the examples cited as an abuse of the process of the court is re­

litigation.   It is an abuse of the process of the court and contrary to

justice and public policy for a party to re­litigate the same issue which

has already been tried and decided earlier against him.

74. Learned counsel for the respondent has placed reliance on the

decision rendered in Ujjagar Singh v. Collector, Bhatinda, (1996) 5 SCC

14,   wherein   this   Court   examined   the   effect   of   coming   into   force   of

Punjab Land Reforms Act, 1972 and vesting of the surplus area in the

State.   In this case, the area in possession of landlord was declared
57

surplus under the Pepsu Act, but possession had not been taken by

the State.  It was held that area did not vest finally as the surplus area

under the Pepsu Act, owing to coming into force of the new Act, the

ceiling area must be determined afresh under the new Punjab Act.  In

the instant case, the order was passed in ceiling matter in the year

1980   and   the   adjudication   order   of   Collector   (Ceiling)   was   not

questioned nor  the order of remand to  declare  land as  surplus and

then the additional land was declared surplus in 1993.  It was not the

case of re­opening of the case. In fact, the land has vested in the State

under the Abolition Act.  Thereafter, compensation has been obtained,

obviously once land has vested in the State, the possession of such

land/open land is deemed to be that of the owner.  In any view of the

matter,   in   the   facts   and   circumstances   of   the   instant   case,

compensation could not have been claimed.  

75. In  State   of   H.P.   v.   Harnama,  (2004)   13   SCC   534,   this   Court

observed that possession of land was not taken and the tenant was in

occupation of the land and had acquired ownership rights before the

land   was   declared   surplus   as   against   the   landlord.     It   was   further

observed that the land in question had been notified as surplus and

the   fact   that   the   original   owner   of   the   land   had   been   paid

compensation, would be of no avail to the State if before the date of
58

actual   vesting   non­occupant   tenant   in   possession   of   the   land   had

acquired ownership rights.  It is totally distinguishable and cannot be

applied to the instant case. 

76. Learned counsel on behalf of the respondent has referred to the

decision rendered in  Madan Kishore v. Major Sudhir Sewal, (2008) 8

SCC 744, wherein question arose with respect to entitlement of sub­

tenant to apply under Section 27(4).  It was held that the expression in

Section 27(4), such tenant who cultivates such land, does not entitle a

sub­tenant   either   to   claim   proprietary   rights   or   apply   for   the   same

under Section 27(4).   It was held that he was not a sub­tenant.   The

decision   is   of   no   help   to   the   cause   espoused   on   behalf   of   LRs.   of

Rajinder Singh.

In   the   peculiar   facts   projected   in   the   case   the   principle   fraud

vitiates is clearly applicable it cannot be ignored and overlooked under

the guise of the scope of proceedings under Section 18/30 of the LA

Act.

In Re Q. No.5 Bona fide Transferees :   

77. With   respect   to   the   appeals   filed   by   SJVN   Ltd.   arising   out   of

judgment  and  order of  2013  in   the  matter  of   bona  fide  transferees,

filed in the year 2014, the High Court has held that the respondents

are bona fide transferees from Rajinder Singh. However, it was pointed
59

out on behalf of the appellants that in 72 reference cases, the regular

first appeal is still pending in the High Court. It has been held by the

Reference   Court   that   the   claimants   are   not   entitled   to   any

compensation.   In   case   regular   first   appeal   is   pending   in   the   High

Court as against the order of reference court against the respondents

who claim to be bona fide transferees, obviously, the question of bona

fide transferee has to be decided finally in the pending regular first

appeal before the High Court. In case appeal has not been filed or has

been   decided,   the   compensation   to   follow   the   decision.   We   do   not

propose   to   give   final   verdict   on   issue   at   this   stage.   We   leave   the

question   open   to   the   High   Court   to   adjudicate.   However,   in   case

compensation   has   been   paid   to   transferees,   the   compensation   paid

shall not be recovered till such time  pending appeal is  decided.   In

case   no   matter  against  transferees   is   pending  and   appeal   has   been

decided in favour of land owners, obviously they have to be paid and

this Order will not come in the way.

78. Resultantly,   we   allow   the   appeals   and   direct   that   the

compensation that has been withdrawn by Late Rajinder Singh or his

LRs. in the case of land acquisition, in original proceedings or under

section 28­A shall be refunded along with interest at the rate of 12

percent   per   annum   within   3   months   from   today   to   the
60

appellants/State, as the case may be, and compliance be reported to

this Court. The appeals are accordingly allowed. We leave the parties

to bear their own costs.

…………………………. J.

                                            (Arun Mishra)


New Delhi;                                  …………………………. J.
September 24, 2018.                         (S. Abdul Nazeer) 

Article source: Supreme Court

EmailEmail
PrintPrint
WP Socializer Aakash Web