MUNICIPAL COMMITTEE SIRHINDversusPARSHOTAM DASS AND ORS.

A                   MUNICIPAL COMMITTEE SIRHIND
                                       v.
                       PARSHOTAM DASS AND ORS.

                             FEBRUARY 15, 1996
B
              [K. RAMASWAMY A.1\lD G.B. PATTANAIK, JJ.]

         Land Acquisition Act 1894-Section 30.

          Gram Panchayat lands-Municipal limits extended to a pa1t of it by
C notification-Acquisition by State Govemment-Dispute as to apportion-
  ment-Held, when a part of the Sabha area gets included within the Municipal
  limits of any municipality, the property comprised therein vests with the
  Municipal Committee-17ie Punjab Municipal Act 1911-Section 56-17ie
  Punjab Gram Panchayat Act 1952-Section 4-17ie Punjab Village Common
D Lands (Regulation) Act 1961-Section 2(g), 3.

          Respondents are Khewatdars of village Brahman Majra. A repre-
    sentative suit was filed by !he respondents in respect of certain lands.
    According to respondents these lands were 'Shamlat deb' and were under
    Nagar Panchayat. Municipal Limits of Sirhind Municipality was extended
E   by a Notification and the disputed area came under the Municipal Limits.
    Respondents claimed that Gram Sabha of the village having been
    abolished, the lands reverted to the original Khewartdars under the
    Proviso to Rule 3 of the Gram Panchayat Rules 1965.

F         The said lands came to be acquired by Punjab Government for the
    construction of godown for storing foodgrains. The Collector passed an
    award and a reference was made to District Judge under Section 30 of the '
    Land Acquisition Act and the compensation was determined in favour of
    respondents. The Collector ordered for the mutation and in a revision, the
    Financial Commissioner set aside the above order and directed that
G   mutation be made in favour of Appellants. A declaratory suit was filed by
    the respondents in respect of the said lands together with permanent
    injunct~on against appellants and it was allowed by the Trial Judge.
    District Judge confirmed the finding of the Trial Court and dismissed the
    appeal of tlie appellants. Appellant's second appeal to the High Court was
H   also dismissed. Hence these appeals.
                                         678
      MUNICIPAL COMMIITEE SIRHIND v. PARSHOTAM DASS                    679

       Appellants contended that on the admitted position that the dis- A
puted land was part of 'Shamlat deb' and was owned by Gram Panchayat
of village Brahman Majra by operation of law, it stood vested in Sirhind
Municipality on and from the date of the notification issued extending the
Municipal Limits of Sirhind Municipality. Provision to Rule 3 of Gram
Panchayat Rules does not apply and therefore directions to revest the title
                                                                            B
with Khewatdars was wrong. It was also contended that under the
provisions of the punjab Municipal Act 1911, the disputed property be-
came a part of Sirhind Municipality and Municipal Committee of Sirhind
is the real owner.

      On behalf of the respondents it was contended that under the C
provisions of the Punjab Village Common Lands (Regulations) Act 1961
any land which vests in Panchayat under the shamlat law, the right, title
and interest in the same gets revested in the person or persons in whom
they were vested immediately before the commencement of the Shamlat law
and therefore the title vests in the respondents and not in the Municipality. D

      Allowing the appeal, this Cou!1·

       HELD : 1.1. The expression 'Whole' in Section 4(3) of the Punjab
Gram Panchayat Act must be held to be including a 'part' and therefore if
a part of the Sabha area is included within the municipal limits then that E
part of the Sabha area becomes a part of the municipality and it ceases to
be a part of the Gram Panchayat. Rule 3 of the Punjab Gram Panchayat
Rules 1965 is the rule for disposal of assets and liabilities of Gram Sabha.
The said rule provides that if the whole of the Sabha area is included in a
municipality, contonment, city, urban estate or notified area, rights, obliga-
tions, property,._ assets and liabilities, if any, whether arising out of any F
contract or otherwise shall vest in the Municipal Committee, Contonment
Board, Municipal Corporation, Chief Administrator or Notified Area
Committee as the case may be. Therefore in respect of the disputed proper-
ties in the case in hand which originally formed a part of sabha area of
Village Brahman Majra having been included in municipal limits of Sir- G
hind Municipality by notification dated 18.9.1968, it is the municipality on
whom the right, title, and interest of the property vested and it never
revested in the khewatdars as found by the courts below. [684-D-F, 685-G]

     1.2. A combined reading of the provisions of the Punjab Gram
Panchayat Act, the Rules made thereunder and the Punjab Municipal Act H
    680                    SUPREME COURT REPORTS                     [1996) 2 S.C.R.

A unequivocally indicate that on and from the date of issuance of a notifica·
    tion extending the Municipal limits over a part of the Sabha area that part
    of the Sabha area forms part of the municipality and it is the municipality
    on whom rig.ht, title and interest over the area vests. It is difficult to accept
    the reasoning advanced by the Courts below that only when the entire
B   Sabha area comes within the municipal limits then the property vests in
    it and not otherwise. [685-E-F]

          2.1. Section 56 of the Municipal Act and Section 4 of the Gram
    Panchayat Act make the legislative intention clear that when a part of the
    sabha area gets included within the municipal limits of any municipality
C   the property comprised therein vests with that Municipal Committee. In
    this view of the matter, the plaintiffs who were the original Khewatdars
    cannot claim the property in question and it is the municipality which
    continues to be the owner of the disputed property. [686-B-D]

          2.2. Section 3(2) of Punjab Village Common Lands (regulation) Act
D   1961 would be attracted only when land vested in Municipal Committee
    Sirhind has been excluded from 'Shamlat deb' as defined in clause (g) of
    Section 2 of the Punjab Village Common Lands (Regulation) Act, 1961. But
    there is not an iota of material on record and in fact the case in hand has
    not been examined from that angle to establish that disputed property stood
E   excluded from 'Shamlat deb' by operation of any of the Sub clauses which
    excludes from the definition of'Shamlat deb' in Section 2(g). [687-E-F]

            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3432 of
    1996.

F        From the Judgment and Order dated 17.8.89 of the Punjab &
    Haryana High Court in R.SA. No. 1187of1989.

         Dhruv Mehta, S.K. Mehta, Fazlin Anam and E.M.S. Anam for the
    Appellants.
G
            Ujjagar Singh and P.N. Puri for the Respondents.

         K. Madhava Reddy, S.N. Chopra, Ms. Meera Agarwal, R.C. Misra,
    Rakesh Chopra, Sanjeev Chopra and M.K. Duar for the Intervenor.

H           The Judgment of the Court was delivered by
    MUNICIPALCOMMITIEESIRHINDv.PARSHOTAMDASS(G.B.PATTANAIK,J.)         681

      G.B. PATIANAIK, J. Leave granted.                                       A

       This appeal by way of special leave is directed against the judgment
of Punjab and Haryana High Court in Regular Second Appeal No. 1187
of 1989 arising out of a suit against the defendant Municipal Committee
for a declaration that the land entered in Khewat No. 391 measuring 321
Kanals 14 Marlas and in Khewat No. 392 measuring 1197 Kanals 5 Marlas
                                                                              B
in village Brahman Majra, Tehsil Sirhind as fully described in para A and
B of the plaint are the properties of the plaintiffs and they are the
 khewatdars and defendant should be permanently injuncted from dispos-
sessing the plaintiffs.
                                                                              c
       The plaintiffs' case in nutshell is that they are khewatdars of village
Brahman Majra and they filed the suit in representative capacity under
Order I Rule 8 C.P.C. It was alleged that Khasra No. 391 and 392
measuring 321Kanals14 Marlas in Khewat No. 392measuring1197 Kanals
5 Marlas respectively are 'Shamlat deh' and it was under Nagar Panchayat. D
By a Notification dated 18.9.1968 the Municipal Limits of Sirhind
Municipality was extended covering a part of Gram Sabha area of Nagar
Panchayat and the disputed area came under the Municipal Limit~. It is
further averred that Gram Sabha of the village having been abolished, the
lands in questionreverted to the original khewatdars under the proviso to
Rule 3 of the Gram Panchayat Rules, 1965 (hereinafter referred to as 'the E
Rules'). When Punjab Government acquired a portion of the said land for
construction of godown for storing foodgrains, an award was passed on
19.3.1977 by Collector, Patiala and thereafter the reference having been
made to the District Judge under Section 30 of the Land Acquisition Act,
the said District Judge determined the compensation to be payable to the F
plaintiffs even though the defendant - Municipal Committee also claimed
compensation. The said decision therefore operates as res judicata against
the defendant iq the present proceeding. It was also further averred that
mutation was ordered in favour of the plaintiffs by the Collector by Order
dated 8.8.1975. A revision being carried out by the Municipal Committee,
the Financial Commissioner set aside the said order by his order dated G
13.5.1982 and directed mutation in f~our of Municipal Committee and
therefore the plaintiffs filed the suit for the relief as already stated. The
defendant - Municipal Committee in the written statement took the stand
that the disputed property though 'Shamlat deh' was a part of Gram Sabha.
But on and from the date of issuance of notification extending the H
    682                   SUPREME COURT REPORTS                   [1996] 2 S.C.R.

A Municipal limits of Sirhind over the area, it formed a part of the
   Municipality and therefore the Municipal Committee has right, title and
   interest to the land. It was also further averred that the compensation
   amount having been awarded in favour of the plaintiffs on a finding that
   the acquired land forms a part of plaintiffs proprietary interest, the prin-
B ciple of res judicata will not apply. On these pleadings the learned Trial
   Judge framed as many as 7 issues and on issues 1 to 3 came to c.onclusion
   that the plaintiffs are the khewatdars of village Brahman Majra, and are
  ·owners of the suit land and the ownership of the land vests with the
   proprietor of the village and not in the Municipal Committee. On issue no.
   4 the Trial Judge found that the question of title to the suit land has finally
C and conclusively been decided by the learned Additional District Judge,
   Patiala in reference under Section 30 of the Land Acquisition Act and the
   said decision operates as res judicata in the present proceedings. On issue
   No. 6 the learned Trial Judge came to hold that valid notice under Section
   49 of the Punjab Municipal Act had been duly served upon the defendant
D before filing of the present suit. With these findings the suit having been
   decreed. The defendant carried the matter in appeal. The learned Addi-
   tional District Judge, Patiala confirmed the findings of the Trial Judge and
   dismissed the appeal. The defendant - Municipal Committee then carried
   the matter to the High Court in Second Appeal and the same having been ·
   dismissed, the defendant - Municipal Committee has approached this
E Court.

          Learned counsel for the appellant contended that on the admitted
    position that the disputed land was a part of 'Shamlat deh' and was owned
    by Gram Panchayat of village Brahman Majra by operation of law it stood
F vested in Sirhind Municipality on and from the date the notification was
    issued extending the Municipal Limits of Sirhind Municipality. The Courts
    below committed serious error in applying proviso to Rule 3 of the Gram
    Panchayat Rules and directing revesting of the title with khewatdars. The
    learned counsel also contended that in the proceedings under Section 30
G · of the Land Acquisition Act the court having specifically found that the
    acquired land belonged to the proprietor. It was not necessary for the court
    to examine the question as to whether 'Shamlat deh' vests in the
    Municipality or not and any finding on that score is without jurisdiction
    and therefore it does not operate as res judicata in the. present proceedings.
    Lastly learned counsel submitted that under the provisions of the Punjab
H Municipal Act, 1911 the disputed property became a part of Sirhind
     MUNICIPAL COMMITTEE SIRHIND v. PARSHOTAM DASS [G.B. PATIANAIK, J.)   683

Municipality and therefore Municipal Committee of Sirhind is the real A
owner and courts below was in error in declaring the plaintiffs - khewatdars
to be the owner of the disputed property.

       Mr. K. Madhava Reddy, learned senior counsel appearing for the
plaintiffs - respondents on the other hand contended that under the
provisions of The Punjab Village Common Lands (Regulation) Act, 1961
                                                                                 B
(hereinafter referred to as 'the Common Lands Act'), any land which vests
in Panchayat under the shamilat law, the right, title and interest in the same
ge;ts revested in the person or persons in whom they were vested immedi-
 ately before the commencement of the shamilat law and therefore the title
vests in the plaintiffs and not in the Municipality.                             c
       In view of the rival stand of the parties and on the admitted position
that the disputed land was 'Shamlat deh' and had formed a part of Gram
Sabha, the question for consideration is whether the said land vested with
the Municipality by virtue of provisions contained in the Punjab Municipal D
Act, 1911 and The Punjab Gram Panchayat Act, 1952 or it revested with
the khewatdars under the The Punjab Village Common Lands (Regulation)
Act, 1961 ? The answer to the aforesaid question depends upon scrutiny
and analysis of different provisions of the Punjab Municipal Act, 1911, The
Punjab Gram Panchayat Act, 1952 and The Punjab Village Common Lands
(Regulation) Act, 1961. It would also be necessary to examine the E
provisions of Gram Panchayat Rules, 1965 as courts below have decided
the question by applying proviso to Rule 3 of the aforesaid Rules. Under
the Gram Panchayat Act the expression 'Sabha' is defined in Section
2(mm) to mean a Gram Sabha established under Section 5. The expression
'Gram Panchayat' is defined in Section 2(g) to mean the Panchayat con- p
stituted under Section 6. The expression 'Sabha area' is defined in Section
2(mmm) to mean an area declared to be a sabha area under Section 4.
Under Section 4 occurring in Chapter II the State Government is em-
powered by notification to declare any village or group or contiguous
villages with a population of not less than one hundred to constitute a sabha
area. Sub-Section (2) of Section 4 empowers the State Government by G
notification to include any area or exclude any area from the Sabha area.
Sub- Section (3) of Section 4 provides for the consequences of issuance of
notification u/s 4(2) which is extract.ed hereinbelow in extenso :-

         "If whole of the Sabha area is included in an urban estate to which H
                                                                                         ,Jr.
                                                                                         , -,
    684                    SUPREME COURT REPORTS                     [1996] 2 S.C.R.

A            the provisions of the Punjab Municipal Act, 1911 area applicable
             or in a City, municipality cantonment or notified area under any
             law for the time being in force, the Sabha and the Gram Panchayat
             for that area shall cease to exist and the assets and liabilities of
             the Gram Panchayat, shall be disposed of in the prescribed man-
             ner.
B
           But a contention has been advanced which found favour with the
    courts below that unless the whole land of the Sabha area is included in
    an urban estate under the provisions of Punjab Municipal Act, then no
    vesting of the Sabha area with the municipality. We are unable to accept
C this contention since the expression 'whole' in sub-section (3) of Section 4
    of the Punjab Gram Panchayat Act must be held to be including a 'part'
    and therefore if a part of the Sabha area is included within the municipal
    limits then that part of the Sabha area becomes a part of the municipality
    and it ceases to be a part of the Gram Panchayat. Section 8 of the Gram
    Panchayat Act stood deleted from the Gram Panchayat Act in the year
D 1962. Section 4(3) extracted above was added to the Punjab Gram
    Panchayat Act with effect from 14.7.1978. The Punjab Gram Panchayat
    Rules, 1965 had been framed in exercise of power under Section 101 of the
  · Punjab Gram Panchayat Act by the State Government. Rule 3 is the rule
    for disposal of assets and liabilities of Gram Sabha. The said rule provides
E that if the whole of the Sabha area is included in a municipality, canton-
    ment city, urban estate or notified area, rights, obligations, property, assets
    and liabilities, if any; whether arising out of any contract or otherwise shall
    vest in the Municipal Committee, Cantonment Board (Municipal Corpora-
    tion, Chief Administrator or Notified Area Committee, as the case may
F be).
         Section 3 of the rules together with the proviso is extracted herein-
    below in extenso .:-

             "Disposal of assests and liabilities of Gram Sabha, Section 4(3) :
             If the whole of Sabha area is included in a municipality contonment
G
             or notified area, all rights, obligations property assets and liabilities
             if any, whether arising out of any contract or otherwise shall vest
             in the Municipal Committee contonment board and/or N.A.C. as
             the case may be ..

H                Provided that the land which vests in the Panchayat under the
     MUNICIPALCOMMfITEESIRHINDv.PARSHOTAMDASS(G.B.PATTANAIK,J.)             685

         Punjab village Common Lands (Regulation) Act, 1961 or the land A
         management and control of which vests in the Panchayat under
         the East Punjab Holdings (Consolidations and preventions of
         fragmentation) Act, 1948 shall revert to the co- sharers and owners
         thereof."

       Under the Punjab Municipal Act, 1911 chapter II deals with the
                                                                                   B
procedure for constituting municipalities. Section 4(2) provides for defin-
ing the limits of the local area of the municipality by issuance of notifica-
tion. Section 4(9) empowers the State Government by notification to
constitute a Municipal Committee. Section 5 of the Act empowers the State
Government to alter the limits of the municipality. Sub-Section (6) of C
Section 5 provides the effect of an area being included in the municipality.
Sub- Section (6)(e)(iii) of Section 5 provides that all properties, movable
and immovable, together with all interests of whatsoever nature and kind
therein, vested in the Municipal Committee or notified area committee, as
the case may be, of such local area, immediately before the aforesaid date, D
shall vest in the successor Municipal Committee. Section 56 provides that
all property situated within the municipality shall vest in and be under the
control of the committee.

      A combined reading of the aforesaid provlSlons of the Gram
Panchayat Act, the Rules made thereunder and the Punjab Municipal Act              E
unequivocally indicate that on and from the date of issuance of a notifica-
tion extending the municipal limits over a part of the sabha area that part
of the sabha area forms a part of the municipality and it is the municipality
on whom right, title and interest over the area vests. It is difficult to accept
the reasoning advanced by the courts below that only when the entire sabha         F
area comes within the municipal limits then the property vests and not
otherwise. In our considered opinion the expression 'whole' in Section 4(3)
of the Gram Panchayat Act brings within its sweep also a part of the Sabha
area and theref9re the disputed properties in the case in hand which
originally formed a part of sabha area of village Brahman Majra having
been included in municipal limits of Sirhind Municipality by notification          G
dated 18.9.1968, it is the municipality on whom the right, title and interest
of the property vested and it never revested at the khewatdars as found by
the courts below. The courts below including the High Court not only
committed error in interpreting Section 4(3) of the Gram Panchayat Act
but also committed error in relying upon proviso to Rule 3 of the Gram             H
    686                   SUPREME COURT REPORTS                     [1996} 2 S.C.R.

A   Panchayat Rules since on the date when the notification was issued extend-
    ing the municipal limits of Sirhind Municipality on 18.9.1968, Section 4(3)
    of the Gram Panchayat Act was not in force and therefore the Rule 3 could
    not have operated upon. As has been stated earlier Section 56 of the
    Municipal Act and Section 4 of the Gram Panchayat Act. make the legis-
B   lative intention clear that when a part of the sabha area gets included within
    the municipal limits of any municipality the property comprised therein
    vests with the Municipal Committee. In this view of the matter the plaintiffs
    who were the original khewatdar cannot claim the property in question and
    it is the municipality which continues to be the ·owner of the disputed
    property.
c
          In this connection it would be appropriate to notice the arguments
    advanced by Mr. Madhava Reddy, the learned counsel for the respondents.
    The learned counsel urged that the property being admittedly a 'Shamlat
    deh', by virtue of Section 3 of the Punjab Village Common Lands (Regula-
    tion) Act, 1961, which has been given retrospective effect, the 'Sharnlat deb'
D   property· stand reverted to khewatdars. Section 3(2) of Punjab Village
    Common Lands (Regulation) Act, 1961 is extracted hereinbelow in exten-
    so:-

            "(2) Notwithstanding anything contained in sub-section (1) of sec-
E           tion 4 -

            (i) where any land has vested in a Panchayat under the shamlat
            law, but such land has been excluded from sharnlat deh under
            clause (g) of section 2 other than the land so excluded under ·
            sub-clause (ii-a) of that clause, all rights, title and interest of the
F           Panchayat in such land as from the commencement of the Punjab
            Village Common Lands (Regulation) Amendment Act, 1995, shall
            cease and all such rights, title and interest shall vest in the person
            or persons in whom they were vested, immediately before the
            commencement of the shamlat law;
G            (ii) where any iand has vested in a Panchayat under this Act, but
             such land has been .excluded from shamlat deh under sµb-clause
             (ii-a) of clause (g) of section 2, all rights, title and interest of the
             Panchayat in such land, as from the commencement of the Punjab
             Village Common Lands (Regulation) Amendment Act, 1995, shall,
H           .cease, and all such rights, title and interest shall on or before the
     MUNICIPALCOMMITTEESIRHINDv.PARSHOTAMDASS(G.B.PAITANAIK,J.)           687

         9th day of July, 1985, revest in the person or persons to whom the     A
         land so excluded has been allotted or otherwise transferred by sale
         or by any other manner whatsoever, subject to the condition that


         (a) any sum of money realised by the Rehabilitation Department
         of the Government of Punjab as a result of allotment or transfer       B
         of such land shall alongwith interest at the rate of three per cent
         payable from the date of such allotment or transfer; or

         {b) where no money was realisable by the Rehabilitation Depart-
         ment of the Government of Punjab as a result of allotment or           c
         transfer of such land, the amount of compensation in respect of
         such land as determined by the Collector of the District in which
         such a land is situated alongwith interest at the rate of three per
         cent payable- from the date of allotment or transfer, as the case
         may be;
                                                                                D
        shall be paid by the Rehabilitation Department of the Government
        of Punjab to the Department of Rural Development and
        Panchayats for onward disbursement to the Panchayat to which
        such shamlat deh belonged."

      Sub-section {2) of Section 3 would be attracted only when land vested
                                                                                E
in Municipal Committee Sirhind has been excluded from 'Shamlat deh' as
defined in clause (g) of Section 2 of the said Act. Section 2{g) has 9
exclusion clauses but there is not an iota of materials on record and in fact
the case in hand has not been examined from that angle to establish that
the disputed property stood excluded from 'Shamlat deh' by operation of         F
any of the sub clauses which excludes from the definition of 'Shamlat deh'
in Section 2 (g). In that view of the matter the contention of Mr. Madhava
Reddy cannot be sustained.

       The courts below erroneously came to conclusion that the findings        G
of the court in the earlier proceeding under Section 30 of the Land
Acquisition Act would operate as res judicata, since on examination of the
orders of the court under Section 30, we find that positive finding have
been arrived at to the effect that the disputed land which had been
                                                                     In
acquired belong to the claimants and not the Municipal Committee. view
of this fmding it was not necessary for the court to examine the question       H
    688                  SUPREME COURT REPORTS                  (1996] 2 S.C.R.

A   of title of Municipal Committee and therefore anything stated on that score
    is wholly without jurisdiction and as such the findings thereon cannot
    operate as res judicata in the present proceeding.

          In the aforesaid premise, the judgment and decrees of the courts
    below are set aside. It is held that the Municipal Committee Sirhind is the
B   proprietor with whom the disputed land vested. The plaintiffs suit accord-
    ingly stand dismissed. This appeal is allowed but in the circumstances
    without any order as to costs.

    M.K.                                                      Appeal allowed.




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