Supreme Court of India

HARNEK SINGHversusFINANCIAL COMMISSIONER, APPEALS, PUNJAB AND ORS.

Citation: 2000 INSC 575
Decided: 6 December 2000
Disposal: Appeal(s) allowed
Bench: S S M QUADRIS N PHUKAN

Holding

Vesting of surplus land in the State Government occurs only on the date possession is taken by or on behalf of the State as per Section 8 of the Punjab Land Reforms Act; a mere declaration of surplus does not vest the land.

Summary

The appellant, legatee of the late Daljit Singh, challenged the allotment of land declared surplus under the PEPSU Tenancy and Agricultural Lands Act to respondents 5‑10. The landowner had been declared surplus in 1976, but the Punjab Land Reforms Act, 1972 came into force in 1973 and its Section 28 saved pending surplus‑determination proceedings. The Supreme Court examined whether surplus land vests in the State merely upon declaration or only when possession is taken as required by Section 8 of the Land Reforms Act. It held that vesting occurs only on taking possession; since possession was never taken, the land never vested in the State and the 1980 allotment was illegal. Consequently, the orders of the Financial Commissioner and the High Court confirming the allotment were set aside. The appeal was allowed.

Issues considered

When does surplus land declared under the PEPSU Tenancy and Agricultural Lands Act vest in the State Government under the Punjab Land Reforms Act, 1972?
Does Section 28(2) of the Punjab Land Reforms Act mandate vesting of surplus land determined before its commencement?
Is an allotment of surplus land valid without the State having taken possession of the land?
What is the effect of the repeal of the PEPSU Act by the Punjab Land Reforms Act on pending surplus‑determination proceedings?

Legislation cited

Pepsu Tenancy and Agricultural Lands Act, 1955s. 32E, s. 32-J
Punjab Land Reforms Act, 1972s. 11, s. 28(1), s. 28(2), s. 5(1), s. 8
Punjab Security of Land Tenures Act, 1953

Subjects

surplus landvestingPunjab Land Reforms ActPEPSU Actland tenurepossessionstate acquisitionallotmentrepealsaving provision

Judgment

HARNEK SINGH A
v.
FINANCIAL COMMISSIONER, APPEALS, PUNJAB AND ORS.

DECEMBER 6, 2000

[SYED SHAH MOHAMMED QUADRI AND S.N. PHUKAN, JJ.] B

Punjab land Reforms Act, 1972/PEPSU Tenancy Agricultural Lands
Act, 1955.

S.8(2), Proviso, and 28/ss. 320-F and 320-J--Vesting of surplus area C
in State Government and allotment thereof-land of tenure holder determined
surplus under PEPSU Act-Possession not taken-litigation pending-- -
Meanwhile Punjab land Reforms Act came into force-landowner filing
declaration-Collector holding that in view of s.5(1), landowner was entitled
to reserve two units of land, one for him and other for his major son; and D
there being no Slirp/us area, no action required to be taken-In the meantime
on the basis of decision under PEPSU Act allotment of surplus land made
infavour ofrespondents 5 to I 0 without notice to tenure holder-landowners
claim that possession of surplus land determined under PEPSU Act having
not been taken, land did not vest in the State-Held, proceedings for
determination ofsurplus area pending immediately before the commencement E
of land Reforms Act, under PEPSU Act and Punjab Security of Land Tenures
Act, 1953 to be continued and disposed of as if land Reforms Act had not
been passed and surplus area so determined shall vest in and be utilized by
the State Government in accordance with provisions of land Reforms Act-
Such proceedings shall be continued and disposed of from the stage they F
were pending immediately before commencement of land Reforms Act and in
accordance with the procedure specified under land Reforms Act-Under
land Reforms Act, vesting of surplus land in State is pre-requisite offraming
of scheme in respect of such land-Without taking possession of any surplus
land there can be no vesting of surplus land in State Government and a
fortiori no scheme can be framed in respect of such land much less can it be G
al/oued to any person-In the instant case, land in question did not vest in
State Government as possession thereof was not taken and as such the rights,
title and interest of land owner of the land continued with him, and, therefore,
allotment of the land in favour of respondents 5 to 10 is illegal and void.

429 H
430 SUPREME COURT REPORTS [2000] SUPP. 5 S.CR.

A Ranjit Ram v. The Financial Commissioner, Revenue, Punjab & Ors.,
(1981) 83 Punjab Law Reporter 492, approved.

Ujjagar Singh (dead) by LRs. v. The Collector, Bhatinda & Am:, JT
(I 996) 6 SC 713, relied on.

B CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7156 of2000.

From the Judgment and Order dated 30.7.98 of the Punjab and Haryana
High Court in C.W.P. NO. 11100of1998.

P.C. Jain, D.S. Bali, Hiren Dasan, Nitin Bhardwaj, Manoj Swarup, Rajesh
C K. Sharma, Goodwill lndeevar, Ms. Jayshree Anand, Additional Advocate
General for State, G. Sivabalamurugan, R.S. Suri and U.U. Lalit and Rajeev
Kumar Sharma for the appearing parties.

The following Order of the Court was delivered :

D Leave is granted.

The appellant who claims to be the legatee of the owner of the land,
late Daljit Singh, assails the order of the High Court of Punjab & Haryana
passed in CWP No. 11100 of 1998 dated July 30, 1998. By the impugned order
the High Court confirmed the order of the Financial Commissioner Appeals-
E II dated June 26, 1998 in Case No. R.O.R. No. l 15 of 1997-98.

This appeal arises out of the proceeding initiated before the Collector
Agrarian, Dhuri by respondents 5 to 10 for delivery of possession of the land
in question on the ground that it was allotted to them on September 22, 1980.
F The Collector dismissed their application on April 17, 1997. They carried the
matter in appeal before the Commissioner, Patiala Division, who by order
dated September 22, I 997 allowed the appeal and remanded the case to the
Collector for passing a speaking order. Daljit Singh filed revision against that
order before the Financial Commissioner (Appeals-II) (East Punjab), which
was dismissed on June 26, 1998. The appellant claiming to be the legatee of
G Daijit Singh filed the aforementioned writ petition assailing the validity of the
said order of the Financial Commissioner passed on June 26, 1998. The writ
petition was dismissed by the High Court on July 30, 1998. It is against that
order that the appellant is in appeal before us.

Mr. P.C. Jain, the learned senior counsel appearing for the appellant,
H contends that after determination of surplus land under the Pepsu Tenancy
HAR:>iEK SINGH v. FINANCIAL COMMR. APPEALS, PUNJAB 431

Agricultural Lands Act, 1955 [for short, 'the Pepsu Act'] there has to be re- A
determination under the provisions of the Punjab Land Reforms Act, 1972 [for
short 'the Land Reforms Act']. Without such re-determination and without
taking possession of the surplus land, there is no vesting of the land in the
State Government as such the alleged allotment of the land in question in
favour of respondents 5 to 10, is without authority of law: the order passed B
by the Commissioner and the impugned order passed by the High Court, are
liable to be set aside.

Mr. D.S. Bali, the learned senior counsel appearing for respondents 5
to 10, on the other hand, contended that the land in question had vested in
the State Government; on June 29, 1976 when the Collector passed order C
declaring an extent of 16. 98 standard acre as surplus land under the Pepsu
Act. Learned counsel further submitted that .there was no necessity for any
re-determination under the provisions of Land Reforms Act and that Section
8 was not attracted to the facts of the case. According to him by virtue of
the first proviso to sub-section (2)(i) of Section 28, the land stood vested on
being declared as surplus land by the Collector. D
To appreciate the contentions raised by the learned counsel, it will be
necessary to refer to the facts leading to passing of the said order of the
Collector dated June 29, 1976 under the Pepsu Act and the developments
thereafter.
E
On the proceedings for determination of surplus land under the Pepsu
Act being initiated the Special Collector declared that Daljit Singh held 22.15
standard acres as surplus land on January 23, 1963. That order was carried
in appeal by him but 1t was dismissed on May, 27, 1963. Jn the revision filed
against that order, the said Daljit Singh raised a plea that there was orchard F
on the land and, therefore, the land comprising thereof could not be computed
in determining surplus land; but that plea was rejected and on January 27,
1965, the case was remanded back to the Collector for fresh consideration by
the Commissioner. That order was unsuccessfully challenged in Writ Petition
No. 1219 of 1965 which was dismissed on February 21, 1974.
G
In the meanwhile, the Land Reforms Act came into force on April 2,
1973. It appears under the Land Reforms Act, Daljit Singh filed a declaration
on October 3, 1973 on which the Collector, Agrarian, Malerkotla, passed order
on June 27, 1976 (hereinafter referred on as 'Pl') holding that according to
Section 5( I) of the said Act, the land owner was entitled to reserve two units
of land as permissible area i.e. one unit for himself and one unit for his major H
432 SUPREME COURT REPORTS [2000] SCPP. 5 S.C.R.

A son. Therefore, it was clear that there was no surplus area with the land owner
and as such no action was required to be taken in that case.

While so, the Collector, Malerkotla, after remand of the case pending
under the Pepsu Act, by order dated September 26, 1974 declared that the
land owner was having surplus land of 20. 75 standard acres. On appeal of
B Daljit Singh against that order, the Commissioner, Patiala, on May 30, 1975,
remanded the case to the Collector to consider the effect of the decree of the
Civil Court. On fresh consideration the Collector. Malerkotla, by his order
dated June 29, 1976 (hereinafter referred to as 'P2') declared the owner was
in possession of 16.98 standard acres as surplus land. We are told that an
C appeal from the said order was dismissed by the Commissioner on November
15, 1979.

It may be noticed here that at that stage allotment of the surplus land
in favour of respondents 5 to I 0, was made without notice to Daljit Singh.
Yet another development that took place is that on July 30, 1982. Gurbirender
D Singh son of Daljit Singh (respondent No. 11) filed application before the
Collector to stop all further proceedings under the Pepsu Act. It seems that
in view of the order passed by the Supreme Court in the appeal filed by the
State against the order of the High Court of Punjab & Haryana in Writ Petition
No. 3746 of 1970 (Ranjeet Ram v. The State) all further proceedings were
stayed by the Collector on July 30, 1982 (hereinafter referred to as 'P3').
E
Now, adverting to narration of case ofDaljit Singh, it may be noted that
aggrieved by the order of the Additional Commissioner dated 15.11.1979, he
filed a revision before the Financial Commissioner (Appeals) who by his order
passed on 1.9.1983 referred the case to the Commissioner Patiala Division.
Inasmuch as copies of those two orders are n0! filed for our perusal, we do
F not propose to deal with the same. What is placed before us is the order of
the Commissioner dated 4.9.84 who set aside two orders i.e. Pl & P3 and
upheld the order P2, referred to above. On further revision, on March 5, 1997,
the Financial Commissioner (Appeals), set aside the order of the Commissioner
dated 4.9.84, insofar as it related to PI and P3. and confirmed the order in
G regard to P-2. Thereafter there was a lull till respondent Nos. 5 to I0 filed
application seeking delivery of possession of the land in question on December
16, 1996 which gave rise to the present appeal.

Here the germane question is : When did the surplus land, if any, of
Daljit Singh, the land owner, vest in the State Government to deal with and
H allot the same to respondents 5 to IO?
HARNEK SINGH v. FINANCIAL COMMR. APPEALS, PCNJAB 433

As the proceedings for determination of surplus land were completed A
under the PEPSU Act, even assuming that it applies, for vesting of the land
in the State Government; it may be necessary to refer to Section 32-J(l) of
the Act which reads as under :

"32-J. Disposal ofSurplus Area.- {I) the surplus Area acquired under
section 32E shall be at the disposal of the State Government." B
Sub-section ( l) of Section 32-J states that the surplus area acquired
under Section 32E shall be at the disposal of the State Government. It is thus
evident that only on acquisition under Se.:tion 32E, the surplus land will be
at the disposal of the State Government. Section 32E of the Pepsu Act deals
with vesting of surplus area in the State Government. A perusal of the said C
provision shows, inter alia, that after the date of publication of the final
statement in respect of a land owner or tenant in the Official Gazette and on
the date on which possession of surplus land is taken by or on behalf of the
State Government, such surplus area of the land owner shall be deemed to
have been acquired by the State Government for a public purpose and all D
rights, title and interest of all persons in such land be extinguished and such
rights, title and interest shall vest in the State Government free from
encumbrances created by any persons.

It may be pointed out here that long before the order of the Collector,
Malerkotla, P2 was passed on 29th June, 1976, the Land Reforms Act came E
into force on April 2, 1973. Section 28 of the Land Reforms Act, which is
relevant for our purpose, reads as under :

"Section 28 : Repeal and Saving. -{I) The Punjab Security of Land
Tenures Act, 1953 and the Pepsu Tenancy and Agricultural Land Act,
1955, in so far as these are inconsistent with the provisions of the F
Act, are hereby repealed.

(2) The repeal of the enactment mentioned in sub-section ( 1),
hereinafter referred to as the said enactments, shall not affect- --

(i) The proceedings for the determination of the surplus area G
pending immediately before the commencement of this Act
under either of the said enactment, which shall be continued
and disposed of as if this Act had not been passed, and
the surplus area so determined shall vest in, and be utilised
by, the State Government in accordance with the provisions
of this Act : H
434 SUPREME COURI' REPORTS (2000] SUPP. 5 S.C.R.

A Provided that such proceedings shall, as far as may be, be continued
and disposed of from the stage these were iminediately before and
commencement of this Act, in accordance with the procedure specified
by or under this Act (and the cases pending before the commencement
of this act shall stand transferred to the collector of the district
concerned for disposal).
B
(ii) the previous operation of the said enactments or anything duly
done or suffered thereunder;

(iii) any right, privilege, obligation or liability acquired, accrued or
incurred under the said enactments, in so far as such right,
-
c privilege, obligation or liability is not inconsistent with the
provisions of this Act and any proceeding or remedy in respect
of such right, privilege, obligation or liability may be instituted,
continued or enforced as if this Act had not been passed.
Section 28 of the Act does not confer any right or new rights
D on the landlords. This section merely clothes determination of
surplus area under the Punjab and Pepsu Laws with continued
legality as a measure of abundant caution."
A plain reading of sub-section ( 1) shows that the provisions of the
Punjab Security of Land Tenures Act, 1953 and the Pepsu Tenancy and
E Agricultural Lands Act, 1955 in so far as they were inconsistent with the
provisions of the Land Reforms Act, were repealed. Sub-section (2) which is
a saving provision enacts that the proceedings for determination of the
surplus area pending immediately before the commencement of the Land
Reforms Act, under either of the said enactment referred to above, shall be
continued and disposed of as if the Land Reforms Act had not been passed
F and the surplus area so determined shall vest in and be utilised by the State
Government in accordance with the provisions of the Land Reforms Act. The
language of this clause is unambiguous and plain. It enjoins continuation and
disposal of proceedings for the determination of the surplus area under
various Acts mentiom:d in sub-section (I), including the Pepsu Act, which
G were pending before the commencement of the Act in accordance with the
provisions of those Acts, as if the Land Reforms Act had not been passed.
It further directs that vesting in and utilisation of the land determined as
surplus, by the State Government, in the aforementioned proceedings, shall
be in accordance with the provisions of the Land Reforms Act. To this clause
are appended two provisos. The first proviso says that as far as may be such
H proceedings shall be continued and disposed of from the stage they were
HARNEK SINGH v_ FINANCIAL COMMR. APPEALS. PL:NJAB 435

pending immediately before the commencement of the land Reforms Act and A
in accordance with the procedure specified thereunder (i.e. under the Land
Reforms Act) and that the cases pending before Pepsu Land Commission
immediately before that date shall stand transferred to the Collector of the
District concerned for disposal. The second proviso, which is not really in
dispute, provide that nothing in that section shall affect the determination and B
the utilisation of the surplus area other than the surplus area refem:d to above
in accordance with the provisions of the Land Reforms Act.

What Mr. Bali contends is that Clause (i) of sub-section (2) should be
understood to direct vesting of the surplus area determined under the
provisions of the Pepsu Act immediately on passing of the order declaring C
surplus. We are afraid, we cannot accede to the contention of the learned
counsel. We have pointed out above that even under the provisions of the
Pepsu Act the surplus land does not vest in the State Government immediately
on passing of an order by the Collector declaring the surplus land and that
it vests in the State Government only on taking possession of such land by
or on behalf of the State Government. A literal interpretation of the said D
provisions of the Land Reforms Act, as indicated above, shows that the
surplus area as determined, would vest in and can be utilised by the State
Government in accordance with the provisions of that Act. The relevant
provision of the Land Reforms Act dealing with vesting in and utilisation of
surplus land by the State uovernment is Section 8 which reads as under :

"Section 8 : Vesting of unutilised surplus area in the State
Government. Notwithstanding anything contained in any law, custom
or usage for the time being in force, but subject to the provisions of
Section 15, the surplus area declared as such under the Punjab law
or the Pepsu law, which has not been utilised till the commencement F
of this Act and the surplus an:a declared as such under this Act,
shall, on the date on which possession thereof is taken by or on
behalf of the State Government, vest in the State Government free
from aH encumbrances and in the case of surplus area of a tenant,
which is included within the permissible area· of the landov.ner, the ( i
right and interest of the tenant !n such area shall stand terminated on
the aforesaid date :

Provided that where any land falling with the surplus area is mortgaged
with posse~sion, only the mortgagee rights shall vest in the State
Government." H
436 SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A A careful reading of Section 8, in so far as it relates to land owner,
discloses, inter alia, that the surplus area declared under the Pepsu Act which
had not been utilised till the commencement of the Land Reforms Act and the
surplus area declared as such under the Land Reforms Act, shall on the date
on which possession thereof is taken by or on behalf of the State Government,
vest in the State Government free from all encumbrances. Thus it is evident
B that vestir.g in of the surplus land takes place on taking possession of the
land by or on behalf of the State Government.

It will be useful to notice that Section I l of the Land Reforms Act
provides that the surplus area which has vested in the State Government
C under Section 8, shall be at the disposal of the State Government to frame the
scheme for utilisation of the surplus area declared as such under the Punjab
Law, the Pepsu Law or the Land Reforms Act. It is, thus clear that under the
Land Reforms Act, vesting of the surplus land in the State Government is pre-
requisite of framing of the scheme in respect of such land. The allotment of
the land under the scheme is a subsequent step. Without taking possession
D of any surplus land there can be no vesting of surplus land in the State
Government and a fortiori no scheme can be framed in respect of such land
much less can it be allotted to any person.

Here it would be apt to mention that the prov1s1ons of these two
enactments came up for consideration of a full bench of the Punjab and
E Haryana High Court in Ranjit Ram v. The Financial Commissioner, Revenue,
Punjab & Ors., (1981) 83 Punjab Law RcJjorter 492. In para 7, it was held.

"even if the I~';',~ ot a land owner has been declared surplus, either
under the Punjab Law or under the Pepsu Law, and ifthe land of land-
owner has not been utilised and further has not been purchased by
F the tenants in case of Punjab Law, and if the land-owner has not been
dispossessed by the Government under the provisions of the Pepsu
Law, he continues to be a land-owner of the land and also holds the
same even though his land has been declared surplus, till he is
divested of its ownership by taking possession of the land under
G section 8 of the Reforms Act, where it has been provided that the
surplus area declared as such under the Punjab Law or the f'epsu Law
which has not been utilised till the commencement of the Reforms Act,
shall on the date or the date on which the possession thereof is taken
by or on behalf of the State Government, vests in the State Government
free from all encumbrances. It would thus be seen that such land
H owners' surplus area shall vest in the State Government on the date
HARNEK SINGH v. FINANCIAL COMMR. APPEALS, PUNJAB 437
of taking of possession by the State Government under section 8 of A
the Reforms Act and till then the land-owners are not divested of the
ownership of the surplus land."

A Constitution Bench of this Court in Ujjagar Singh (dead) by L.Rs.
v. The Collector, Bhatinda & Am:, JT (1996) 6 SC. 713 having quoted para
7 of the said judgment of the Full Bench approved the same and held that B
once the lands declared as surplus under the Pepsu Act did not vest in the
State Government, as possession thereof had not been taken, there had to be
a fresh determination in respect of the area which the appellant was entitled
to hold in the light of the Punjab Act.

In the instant case the land in question did not vest in the State C
Government, as admittedly, the possession of the land was not taken by or
on behalf of the State Government. This is also clear from the averment made
in the reply filed by the State Government in the special leave petition. It is
admitted the land had been declared surplus and that the allotment order was
passed in the year 1980. It is also admitted that the possession of the land D
·owner continued and still continues to he that of the land owners. In view
of the averments it cannot be legitimately contended that the land had vested
in the State Government and therefore the allottees acquired right to get
possession of land which is said to have been allotted on 22nd September,
1980.
E
From the above discussion it follows that the rights, title and interest
of the land owner of the land in question continued with him and in law the
land did not vest in the State Government, therefore, the allotment of the land
in question in favour of respondent Nos. 5 to I 0 is illegal and void and is
of no legal consequence. The order of the Financial Commissioner Appeals- F
II dated 26.6.98 and the impugned order of the High Court confirming the said
order of the Financial Commissioner Appeals-II are, therefore, unsustainable
and are accordingly set aside. The appeal is allowed but in the circumstances
of the case we make no order as to costs.

R.P. Appeal allowed.

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