Supreme Court of India
SARASWATI DEVI (D) BY LR.versusDELHI DEVT. AUTHORITY & ORS.
- Citation
- 2013 INSC 65
- Decided
- 29 January 2013
- Disposal
- Dismissed
- Bench
- RAJENDRA MAL LODHA
Holding
The acquisition was valid because an encumbrance arose from the provisional possession, allowing the Government to acquire the land under the Land Acquisition Act, and the appellant had no title at the time of acquisition.
Summary
The case concerned a 5‑bigha parcel of land that was an evacuee property acquired by the Central Government under the Displaced Persons (Compensation and Rehabilitation) Act, 1954 and later put up for public auction. The appellant’s husband was the highest bidder in 1958, received provisional possession in 1960, but the full purchase price was paid only in 1980, after the Delhi Administration had already acquired the land under the Land Acquisition Act, 1894 in 1962. The Supreme Court examined whether land owned by the Government could be acquired under the Act when an encumbrance—here, the provisional possession and binding contract—had been created. It held that such an encumbrance made acquisition permissible and that the appellant never held title at the date of acquisition, rendering the challenge untenable. Consequently, the appeal was dismissed, though the appellant’s claim for compensation was left to be decided separately.
Issues considered
- Whether the land was an evacuee property at the time of the 1962 acquisition under the Land Acquisition Act.
- Whether land owned by the Government can be acquired under the Land Acquisition Act when it is encumbered or a private interest has been created.
- Whether the provisional possession granted to the auction‑purchaser created an encumbrance sufficient to permit acquisition.
- Whether the appellant had any title or interest in the land at the date of acquisition.
- Whether the delay and laches in challenging the acquisition affect the validity of the acquisition.
Legislation cited
- Displaced Persons (Compensation and Rehabilitation) Act, 1954s. 12, s. 14, s. 20
- Displaced Persons (Compensation and Rehabilitation) Rules, 1955s. Rule 87, s. Rule 90
- Land Acquisition Act, 1894s. 16, s. 17(1)(iv), s. 4
Subjects
land acquisitionevacuee propertyencumbrancepublic auctionprovisional possessiondelaylachestitlecompensation
Judgment
[2013] 4 S.C.R. 922
A SARASWATI DEVI (D) BY LR.
v.
DELHI DEVT. AUTHORITY & ORS.
(Civil Appeal No. 4373 of 2009)
JANUARY 29, 2013
B
[R.M. LODHA AND ANIL R. DAVE, JJ.]
Land Acquisition - Acquisition of land owned by
Government - Whether pennissible - Held: If the Government
C has complete ownership, such land cannot be acquired, but
if some private rights have been created in such land or the
land has some encumbrances, such land can be acquired -
In the instant case, the subject land though owned by
Government, encumbrance was created by giving possessory
D rights to the private party, hence could have been acquired
under Land Acquisition Act - Land Acquisition Act, 1947 - s.4
rlw. s, 17(1)(iv).
Words and Phrases - 'Encumbrance' - Meaning of.
E The land in question was an evacuee property,
acquired by Central Government under s.12 of Displaced
Persons (Compensation and Rehabilitation) Act, 1954.
The property was sold in public auction and the
appellant's husband was the highest bidder therefore. In
F the year 1960, appellant's husband was given provisional
possession of the land. In the year 1980, title of the land
was transferred to the auction purchaser. In the meantime
i.e. in the year 1962, the land in question was acquired
by the respondent Authority. After 30 years of acquisition,
G the appellants filed a writ petition challenging the
acquisition proceedings. Single Judge of High Court
allowed the petition. In Writ Appeal, Division Bench of
High Court, set aside the judgment of Single Judge.
Hence the present appeal.
H 922
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 923
AUTHORITY & ORS.
Dismissing the appeal, the Court. A
HELD: 1. In respect of the property forming part of
the compensation pool put to public auction under Rule
90 of Displaced Persons (Compensation and
Rehabilitation) Rules, 1955, a binding contract for the sale B
of the property to the auction-purchaser comes into
existence on approval of the highest bid by the
Competent Authority. Once the payment of the full
purchase price is made, title in the property would pass
to an auction-purchaser. In other words, on the payment
of the full purchase price, the ownership in the property C
sold in public auction would stand transferred but the
transfer formally becomes complete on issuance of the
certificate of sale. If in the sale certificate, any particular
date is mentioned as provided in the proforma appended
to Rule 90, such date mentioned in the sale certificate D
may be presumed to be the date on which the purchase
has become effective but crucial date for transfer of
ownership in the property in favour of auction-purchaser
is the date when full purchase price has been paid by the
auction-purchaser. But this legal position does not help E
the appellant because of completion of acquisition
proceedings in 1962 i.e. much before the payment of full
purchase price by the appellant. In the absence of any
title in favour of the appellant or her husband on the date
of acquisition, the challenge to such acquisition could F
not have been allowed by the Single Judge. The Division
Bench rightly set aside the erroneous order of the Single
Judge. [Paras 32 and 47] [947-G-H; 948-A-C; 955-B-D]
Bishan Paul vs. Mothu Ram AIR 1965 SC 1994; Mis.
Bombay Salt and Chemical Industries vs. L.J. Johnson and G
· Ors. AIR 1958 SC 289; Jaimal Singh, slo Jawahar Singh and
Anr. vs. Smt. Gini Devi AIR (1964) Punjab 99 - referred to.
2. The word "encumbrance", according to its
ordinary significance, means any right existing in another H
924 SUPREME COURT REPORTS (2013] 4 S.C.R.
A to use the land or whereby the use by the owner is
restricted. The word "encumbrance" imports within itself
every right or interest in the land, which may subsist in
a person other than the owner; it is anything which places
the burden of a legal liability upon property. The word
B "encumbrance" in law has to be understood in the
context of the provision under consideration but
ordinarily its ambit and scope is wide. Seen thus, a
binding contract entered into between an auction-
purchaser and the Government on approval of the
c highest bid relating to sale of property, which is part of
compensation pool under Section 14 of Displaced
Persons (Compensation and Rehabilitation) Act, 1954
followed by provisional possession to the auction-
purchaser, should come within the purview of the word
"encumbrance". [Para 40] [951-A-C]
0
Mahadeo Prasad Sahu vs. Gajadhar Prasad Sahu AIR
1924 Patna 362; Collector of Bombay vs. Nusserwanji
Rattanji Mistri and Ors. AIR 1955 SC 298 M. Ratanchand
Chordia and Ors. vs. KasimKha/eeli AIR 1964 Madras 209
E - referred to.
Concise Oxford English Dictionary [Tenth Edition,
Revised]; Webster Comprehensive Dictionary [International
Edition; Volume I]; The Law Lexicon by P. Ramanatha
F Aiyar [Second Edition Reprint 2000] - referred to.
3. A person in possession of the property - though
not owner - is entitled to certain rights by virtue of his
possession alone. An auction-purchaser on provisional
possession being given to him, possesses possessory
G rights, though he does not have proprietary rights in the
auctioned property. Thus, there remains no doubt that in
October, 1960 or near about encumbrance in the subject
property came to be created. [Para 41] [951-D-E]
H
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 925
AUTHORITY & ORS.
Roshan Lal Goswami vs. Gobind Raj and Ors. AIR A
(1963) Punjab 532 • relied on.
4. Ordinarily, when the Government possesses an
interest in land, which is the subject of acquisition under
the Land Acquisition Act, that interest is outside such 8
acquisition because there can be no question of the
Government acquiring what is its own. But this rule is not
without an exception. There is no impediment in
acquisition of land owned by the Central Government by
invoking the provisions of the Land Acquisition Act C
where such land is encumbered or where in respect of
the land owned by the Government some private interest
has been created. In other words, if the Government has
complete ownership or the entirety of rights in the
property with it, such land cannot be acquired by the
Government by invoking its power of acquisition under D
the Land Acquisition Act, but if some private rights have
been created in such property or the property has
encumbrance(s), the acquisition of such land is not
beyond the pale of the Land Acquisition Act. [Para 42]
[951-F-H; 952-A-C] E
Collector of Bombay vs. Nusserwanji Rattanji Mistri and
Ors. AIR 1955 SC 298 • referred to.
5. In the instant case, by approval of the highest bid F
given by the appellant's husband followed with
provisional possession, an encumbrance was created in
1960 in the subject land which was part of the
compensation pool before the acquisition proceedings
were initiated and, therefore, it could have been acquired
by the Delhi Administration under.the Land Acquisition G
Act. Also the acquisition which was commenced by
Section 4 read with Section 17(1)(iv) Notification issued
on 07.03.1962 which ultimately culminated into an award
on 30.06.1962 was challenged for the first time after more
than thirty years of the passing of the award. The H
926 SUPREME COURT REPORTS (2013] 4 S.C.R.
A appellant has failed to show her title or her husband's title
in the property, on the date of the acquisition. As a matter
of fact, though the approval to the highest bid given by
the appellant's husband in respect of the subject property
was given on 31.10.1960, the payment of full price by the
B appellant was made pursuant to the communication
dated 16.06.1980 but by that time the subject land already
stood acquired by the Delhi Administration and,
therefore, despite the payment of full price by the
appellant in 1980 and the issuance of the sale certificate,
c no title came to be vested in the appellant. [Para 47] [954·
E-H; 955-A·B]
Delhi Administration and Ors. vs. Madan Lal Nangia and
. Ors. (2003) 10 SCC 321: 2003 (4) Suppl. SCR 360; Sharda
Devi vs. State of Bihar and Anr. (2003) 3 SCC 128: 2003 (1)
D SCR 73 • relied on.
Nanak Chand Sharma vs. Union of India and Ors. 29
(1986) DLT 246 Sham Sunder Khanna vs. Union of India
1997 Rajdhani Law Reporter 101; Dr. Bhargava and Co.
E and Anr. vs. Shyam Sunder Seth by LRS. (1994) 5 SCC 471:
1994 (1) Suppl. SCR 445; Hans Raj Banga vs. Ram Chander
Aggarwal (2005) 4 SCC 572: 2005 (3) SCR 994 • referred
to.
Case Law Reference:
F
29 (1986) DLT 246 referred to Para 12
1997 RLR 101 · referred to Para 12
1994 (1) Suppl. SCR 445 referred to Para 16
G 2005 (3) SCR 994 referred to Para 16
AIR 1965 SC 1994 referred to Para 29
AIR 1958 SC 289 referred to Para 30
H
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 927
AUTHORITY & ORS.
AIR (1964) Punjab 99 referred to Para 31 A
AIR 1924 Patna 362 relied on Para 37
AIR 1955 SC 298 referred to Para 38
AIR 1964 Madras 209 referred to Para 39 B
AIR (1963) Punjab 532 referred to Para 41
2003 (1) SCR 73 relied on Para 42
AIR 1955 SC 298 referred to Para 43
c
2003 (4) Suppl. SCR 360 relied on Para 43
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4373 of 2009.
From the Judgment & Order dated 31.05.2007 of the High D
Court of Delhi at New Delhi in LP.A. No. 388 of 2005.
Ranjit Kumar, Vijay Hansaria, P.P. Malhotra, Amarendra
Sharan, Rajiv K. Garg, Ashish Garg, Annam D.N. Rao, Rachna
Srivastava, Sonia Malhotra, Yasir Rauf, Utkarsh Sharma, E
Vishnu B. Saharya, Viresh B. Saharya, Dhruv Pal (for Saharya
& Co.) for the appearing parties.
The Judgment of the Court was delivered by
R.M. LODHA, J. 1. This is an appeal by the appellant F
against the decision of the Division Bench of the Delhi High
Court on 31.05.2007, in allowing the Letters Patent Appeal
(LPA) preferred by the Delhi Development Authority (DOA)
against the decision of the Single Judge dated 09.08.2002.
Leave to appeal was granted by this Court on 13.07.2009.
G
2. The facts which form the background of the appeal can
be briefly stated as follows : The controversy relates to a piece
of land admeasuring 5 Bighas 19 Biswas comprised in Khasra
No. 368 situate in the revenue village Masjid Moth, New Delhi.
H
928 SUPREME COURT REPORTS [2013] 4 S.C.R.
A The above property was an evacuee property which was
acquired by the central government under Section 12 of the
Displaced Persons (Compensation and Rehabilitation) Act,
1954 (for short, '1954 Act'). On acquisition of that property
under Section 12, it became part of the compensation pool
B under Section 14. By exercise of the power conferred under
Section 20, the above property was notified to be sold by way
of public auction on 21.06.1958.
3. Dev Prakash Jagwani, the appellant's husband being
a displaced person participated in the public auction for the sale
C of above property. His bid of Rs. 24,500/- which was the highest
bid was accepted.
4. On 31.10.1960, the office of the Assistant Settlement
Commissioner (Rural), Ministry of Rehabilitation intimated to the
D appellant's husband that it has been decided to give him
provisional possession of the auctioned property subject to the
terms and conditions stipulated in the indemnity bond and the
special affidavit already executed by him. He was also
informed that the issue of the above intimation did not constitute
E transfer of complete title in the property until the final letter of
adjustment of compensation was issued.
5. The appellant's husband is said to have died in 1970.
On 16.06.1980, a letter was received from the Ministry of
Rehabilitation by a friend of the appellant's late husband
F requiring the deposit of a sum of Rs. 14,992/- towards balance
price of auction sale within fifteen days. The appellant deposited
the balance price.
6. On 22.08.1980, a sale certificate as contemplated by
G the Displaced Persons (Compensation and Rehabilitation)
Rules, 1955 (for short, '1955 Rules') was issued. On
15.07.1981 the sale certificate was registered with the Sub-
Registrar.
7. Between 31.10.1960 when the appellant's husband was
H
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 929
AUTHORITY & ORS. [R.M. LODHA, J.]
intimated that his bid had been approved in respect of the A
above property; the payment of full price by the appellant
pursuant to the communication dated 16.06.1980; the issuance
of sale certificate dated 22.08.1980 and its registration thereof
on 15.07.1981, an important event took place. On 07.03.1962,
the Delhi Administration, Delhi issued a Notification under B
Section 4 read with Section 17(1 )(iv) of the Land Acquisition
Act, 1894 (for short, 'LA Act') proposing to acquire a large tract
of land admeasuring 198 Bighas and 11 Biswas which
included the subject land situate at Masjid Moth for the public
purpose, namely, for the plan development of Delhi. Since the c
urgency clause under Section 17(1)(iv) of the LA Act was
invoked, the provisions of Section SA were dispensed with. The
declaration under Section 6 was made and later on award was
passed on 30.06.1962.
8. It is the appellant's case that somewhere in 1981, after D
the sale certificate was registered, one Mr. Chhugani, a friend
of the appellant's late husband, learnt about the acquisition of
the subject land and he made representations to the authorities.
It is further case of the appellant that a notice in Land
Acquisition Case No. 72/85 was received by Mr. Chhugani for E
11.08.1992 which was communicated to the appellant. The
appellant initially filed a suit but later on challenged the above
acquisition before the Delhi High Court by filing a writ petition
on 10.08.1993.
F
9. The challenge to the acquisition after more than 30 years
of the passing of the award was principally founded on the
ground that at the relevant time in 1962, the land belonged to
the central government being an evacuee land acquired under
Section 12 of the 1954 Act and as such the said land could G
not have been acquired under the LA Act.
10. ODA was not impleaded as party respondent initially
but later on it was impleaded as Respondent No. 4 in the writ
petition. ODA filed its written response in opposition to the writ
H
930 SUPREME COURT REPORTS [2013] 4 S.C.R.
A petition and raised the plea of delay and !aches. In its reply,
ODA submitted that the physical vacant possession of the land
was taken on 11.07.1962 after the award was passed on
30.06.1962 and the subject land was placed at its disposal on
09.02.1981. It was also submitted by ODA that though the
B property was conveyed to the petitioner (appellant herein) on
22.08.1980 but she was declared purchaser of the said
property with effect from 11.12.1960 and, thus, the subject land
ceased to be government land with effect from 11.12.1960 and
whatever rights the appellant had could be acquired under the
C LA Act.
11. In light of the rival position set up by the parties, the
Single Judge framed two questions for consideration:
(i) Whether the land in question was an evacuee land
D on the date of issue of Notification under Section
4 of the LA Act on 07.03.1962?
(ii) Whether the land, if it was an evacuee property,
could have been acquired under the law?
E 12. The Single Judge was not persuaded by the plea of
delay and !aches. He considered the provisions of the 1954 Act
and the relevant procedure of auction sale prescribed in the
1955 Rules. He referred to a decision of this Court in Bishan
Paul v. Mothu Ram', few decisions of his own High Court
F including Nanak Chand Sharma v. Union of India and Others2
and Sham Sunder Khanna v. Union of lndia 3 and a decision
of the Punjab High Court. On consideration of the above
provisions and the precedents, the Single Judge allowed the
writ petition; quashed the Notification dated 07 .03.1962 issued
G under Section 4 of the LA Act and the subsequent proceedings
in the Land Acquisition Case No. 72/85.
1. AIR 1965 SC 1994.
2. 29 (1986) DLT 246
H 3. 1997 Rajdhani Law Reporter 101
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 931
AUTHORITY & ORS. [R.M. LODHA, J.]
13. DOA challenged the decision of the Single Judge in A
LPA and since it suffered from the delay of 760 days, an
application was made for condonation of delay.
14. The Division Bench of the Delhi High Court observed
that there was delay of about 760 days in filing the LPA against
8
the decision of the Single Judge but, at the same time, there
was delay of more than 31 years on the part of the writ petitioner
in challenging the acquisition proceedings and since there was
delay on the part of both sides and the question related to
valuable rights in the land, the delay on the part of either of the C
parties should not come in the way of doing justice. This is what
the Division Bench observed:
"6. There is delay of about 760 days in filing of this appeal.
The appellant has filed an application (CM No. 2093/2005)
for condonation of the said delay. This application is D
supported by the affidavit of Mr. S.P. Pandey, Director, LM
(HQ) ODA. The appellant had contended in its application
for condonation of delay that the delay of 760 days in filing
of the appeal was neither willful nor due to negligence but
was due to the time consuming and unavoidable E
administrative procedures which have to be gone through
in cases like the preset one, where the Government is the
litigant and decisions have to be taken collectively. It is
further contended that the appellant had to collate
documents, administrative orders, judgments of the F
Supreme Court and various other records for preparation
of the present appeal. The request made by the appellant
for condonation of the delay is opposed by the counsel
appearing on behalf of the respondent No. 1 on the ground
that the explanation given by the appellant for delay in filing G
of the present appeal is unsatisfactory. We have given our
anxious consideration to this aspect relating to
condonation of delay. While considering the delay on the
part of the appellant in filing of the present appeal, we have
also taken into account the delay of more than 31 years H
932 SUPREME COURT REPORTS (2013) 4 S.C.R.
A on the part of respondent No. 1 in challenging the
acquisition proceedings by way of writ petition in which the
impugned order which is the subject matter or challenge
in this appeal has been opposed. We are of the view that
since the question in the present proceedings relates to
B valuable rights of the parties in the land in question, the
delay on the part of either of the parties cannot be allowed
to come in the way of doing justice. We are further of the
view that when substantial justice and technical
consideration are pitted against each other, cause of
substantial justice deserves to be preferred. We feel that
c
by delay, the appellant would not stand to gain anything and
at best he would only be entitled to get his claim
adjudicated on merits instead of it being thrown to winds
on technical consideration of delay in filing of the appeal.
Having regard to the circumstances of the case, we are
D
inclined to condone the delay in filing of the present appeal.
The delay is accordingly condoned and the appeal is taken
up for disposal on merits."
15. On consideration of the matter on merits, the Division
E Bench was of the view that the decision of Single Judge was
unsustainable in view of the Division Bench decision of that
Court in M.S. Dewan<. The Division Bench also relied upon a
decision of this Court in Delhi Administration and Others v.
Madan Lal Nangia and Others5 . The consideration of the
F matter by the Division Bench is reflected in paragraphs 10, 11
and 12 of the judgment which read as under:
"10. It may be seen from the above judgment in Madan
Lal Nagia's case (Supra) that the Supreme Court has
categorically held that even if there is a finding that the
G
property acquired was an evacuee property on the date
of Notification under Section 4 of the Land Acquisition Act,
4. M.S. Dewan v. Union of India & Ors. [C.W.P. No. 1400/1986]; Decided on
06.02.2003
H s. o sec 32.
(2003) 1
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 933
AUTHORITY & ORS. [R.M. LODHA, J.]
the acquisition in respect of the said land would still be valid. A
11. The acquisition of land on similar facts, as are in the
present case, was upheld by a Division Bench of this
Court in case titled 'M.S. Dewan v. UOI & Ors., CWP No.
1400/1986 decided on 06.02.2003. In M.S. Dewan's case B
(Supra) a Division Bench of this Court had upheld the
acquisition of evacuee property and dismissed the writ
petition of the auction purchaser. Even S.L.P. (Civil) No.
71152/2003 filed by the auction purchaser against the
aforementioned decision of this Court was also dismissed C
by the Hon'ble ·supreme Court. Hence the view taken by
this Court in M.S. Dewan's case became final. Hence it
would be relevant and necessary to refer to para 23 of the
said judgment which is extracted here-in-below:-
"We have already held above that the title in the D
property passed in favour of the petitioner on 14.11.1961.
Even assuming that the title had not passed to the
petitioner till 22.07 .1963, when sale certificate was issued,
in that case also we do not find any substance in the
submission made on behalf of the petitioner that the E
property could not have been notified for being acquired
being the property of the Government till 22.07 .1963 and
the Government could not have acquired its own property.
The reason in our holding so is that the property on being
put to auction on 28.12.1960, the petitioner was declared F
to be the highest bidder against his verified claims of the
property left behind in Pakistan the verified claims were
surrendered by him as a part of consideration for purchase
of the property in q\jestion in public auction. The balance
consideration was paid in cash. The entire consideration G
stood paid by 14.1 f1961. The right of the petitioner in the
property on being declared to the highest bidder was a
valuable right, which the petitioner could enforce against
the respondents in compelling the respondent to transfer
the property in his name. Such a right could be acquired.
H
934 SUPREME COURT REPORTS [2013] 4 S.C.R.
A The property on being put to auction and on the petitioner
being declared to be the highest bidder and on receipt of
entire sale consideration went out of compensation pool.
The petitioner alone had interest in the property. This
interest could definitely be acquired pursuant to the
B notification issued under Section 4 of the Act. Therefore,
it cannot be said that the notification under section 4 of the
Act was non est. It was for the petitioner to have raised a
claim. Proceedings for acquisition thus cannot be
challenged on the ground that such interest could not have
c been acquired. Therefore, no fault can be found in the
notification under Section 4 of the Act."
12. The question that needs our consideration in the
present appeal is squarely covered by the above judgment
of this Court in M.S. Dewan's case. The facts of the
D present case as well as that of M.S. Dewan's case are
almost same. It has been categorically held in M.S.
Dewan's case that the right held by the auction purchaser
can be legally acquired by way of Notification under
Section 4 of the Land Acquisition Act notwithstanding the
E transfer of title in respect of land in question in his favour.
We respectfully agree with the view already taken by this
Court in the aforesaid case. Hence we have no hesitation
in holding that Learned Single Judge erred in holding that
the property in question was an evacuee property on the
F date of Notification dated 07 .03.1962 and in quashing the
said Notification for that reason. The view so taken by
Learned Single Judge in the impugned order thus cannot
be sustained in law particularly in view of the above
referred judgment of the Supreme Court and of this Court."
G
15.1. The Division Bench, accordingly, set aside the order
of the Single Judge passed on 09.08.2002 and allowed the
appeal of DOA with cost throughout.
16. Before us, Mr. Ranjit Kumar, learned senior counsel
H for the appellant, vehemently argued that the appellant acquired
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 935
AUTHORITY & ORS. [R.M. LODHA, J.]
the title in the land on the day the full sale consideration was A
paid in 1980 and prior to that date the land belonged to the
central government and as such it could not have been acquired
under the LA Act by the Delhi Administration. He highlighted
the facts relating to auction of the subject land which was·
conducted on 21.06.1958; approval of the highest bid of the B
appellant's husband by the Settlement Commissioner on
31.10.1960, communication from the Ministry of Rehabilitation
dated 16.06.1980 requiring the deposit of Rs. 14,992/- as
balance sale consideration, deposit of that amount by the
appellant within fifteen days thereof; issuance of sale certificate c
on 22.08.1980 and its registration on 15.07.1981 and
submitted that until the full price was paid, the appellant (auction
purchaser) acquired no right in the land of any nature and the
land remained with the central government. In this regard, he
relied upon decisions of the Punjab High Court in Roshan Lal D
Goswami v. Gobind Raj & Ors. 6 and Jaimal Singh, s/o
Jawahar Singh & Anr. v. Smt. Gini Devi7 and the decisions of
this Court in Mis. Bombay Salt & Chemical Industries v. L.J.
Johnson & Ors.•, Bishan Paul1, Dr. Bhargava & Co. and
Another v. Shyam Sunder Seth by LRS. • and Hans Raj Banga E
v. Ram Chander Aggarwal'".
17. Mr. Ranjit Kumar heavily relied upon the decision of
this Court in Sharda Devi v. State of Bihar and Another11 in
support of his argument that so long as title vests with the central
government, the land cannot be acquired under the LA Act. He F
argued that under the LA Act, the acquisition is of land and not
the 'rights in the land' which are not even absolute and which
are subject to certain obligations.
6. AIR (1963) Punjab 532. G
7. AIR (1964) Punjab 99.
8. AIR 1958 SC 289.
9. (1994) 5 sec 471.
10. (2005) 4 sec 572.
11. (2003) 3 sec 128. H
936 SUPREME COURT REPORTS [2013] 4 S.C.R.
A 18. Mr. P.P. Malhotra, learned Additional Solicitor General
and Mr. Amarendra Sharan, learned senior counsel for ODA
conversely not only supported the final conclusion of the Division
Bench in upsetting the judgment of the Single Judge but also
vehemently argued that writ petition filed by the appellant was
B liable to be dismissed on the grounds of delay and !aches of
more than 30 years and suppression of material facts
inasmuch as the writ petition in the High Court was supported
by an affidavit of J.K. Jagwani claiming himself to be power of
attorney holder while one Devi Dayal Jagwani is a registered
c power of attorney holder of the appellant. It was also submitted
that present appeal is a proxy appeal at the instance of J.K.
Jagwani who has purchased the subject property by a
registered sale deed dated 28.02.2003.
19. Mr. P.P: Malhotra, learned Additional Solicitor General
D further argued that on approval of the bid of the appellant's
husband a binding contract came into existence between the
central government and him which amounted to 'encumbrance'
and, therefore, there was no impediment in acquisition of the
subject land under the LA Act.
E
20. On behalf of the respondents, heavy reliance was
placed on the decision of this Court in Madan Lal Nangia 5 •
21. Mr. Amarendra Sharan, learned senior counsel for the
DOA also submitted that the subject land was placed at the
F disposal of ODA way back in 1981 and subsequently it has
been allotted to All India Institute of Medical Sciences (AllMS)
which has also taken possession of the said land.
22. In rejoinder, Mr. Ranjit Kumar and Mr. Vijay Hansaria,
G learned senior counsel for the appellant submitted that there
was nothing to show that AllMS has been allotted the above
land. In the written submissions filed by the appellant, it is stated
that there is no land in Masjid Moth ever given to AllMS. In this
regard, reference has been made to the reply received pursuant
H to the query made by the appellant under Right to Information
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 937
AUTHORITY & ORS. [R.M. LODHA, J.]
Act. They denied that appeal was a proxy litigation. It was A
submitted that J.K. Jagwani, power of attorney holder, was one
of the family members residing in Delhi; the family had
purchased the property from their verified claim and the sale
certificate was issued in favour of Smt. Saraswati Devi who
under the family settlement transferred part of land in favour of B
J.K. Jagwani and other family members.
23. The approach of the Division Bench of the High Court
in offsetting the delay and laches of more than 30 years in
challenging the acquisition proceedings with the delay of 760 C
days in filing the LPA is a little strange and though does not
commend to us but we do not intend to disturb the finding of
the Division Bench on this aspect in view of the appropriate
final conclusion in the matter.
24. The principal cQntention on behalf of the appellant D
raised before us (which was also argued before the Single
Judge and the Division Bench of the High Court) is that on the
date of the acquisition, the subject property vested in the central
government having beei:kacquired urider Section 12 of the
1954 Act; the title in that land did not transfer in favour of the E
appellant's husband despite public auction conducted on
21.06.1958 and the approval of the highest bid given by the
appellant's husband on 31.10.1960, as the full price had only
been paid in 1980 by the appellant (her husband had died in
the meanwhile), and, therefore, acquisition of the subject land F
in 1962 under the LA Act at the instance of the Delhi
Administration was bad in law. In this regard, heavy reliance
has been placed on behalf of the appellant upon the decision
of this Court in Sharda Devi". We shall first refer to the
decision of this Court in Sharda DevP'.
G
25. In Sharda Dev11 ', this Court was concerned with the
question whether the State could proceed to acquire land on
an assumption that it belonged to a particular person, whether
in such situation the award passed by the land acquisition
officer could be called. in question by the State seeking a H
938 SUPREME COURT REPORTS (2013] 4 S.C.R.
A reference under Section 30 of the LA Act on the premise that
the land did not belong to the person from whom it was
purportedly acquired and was a land owned by the State having
vested in it, consequent upon abolition of proprietary rights,
much before the acquisition. This Court examined and analysed
B provisions of the LA Act and also considered few earlier
decisions of this Court and the decisions of some high courts.
Considering the question in light of the above, this Court held
as under:
"27. We have entered into examining the scheme of the
c Act and exploring the difference between reference under
Section 18 and the one under Section 30 of the Act as it
was necessary for finding out answer to the core question
staring before us. The power to acquire by the State the
land owned by its subjects hails from the right of eminent
D domain vesting in the State which is essentially an attribute
of sovereign power of the State. So long as the public
purpose subsists, the exercise of the power by the State
to acquire the land of its subjects without regard to the
wishes or willingness of the owner or person interested in
E the land cannot be questioned. (See Scindia Employees'
Union v. State of Maharashtra ((1996) 10 SCC 150], SCC
para 4 and State of Maharashtra v. Sant Joginder Singh
Kishan Singh (1995 Supp (2) SCC 475], SCC para 7.)
The State does not acquire its own land for it is futile to
F exercise the power of eminent domain for acquiring rights
in the land, which already vests in the State. It would be
absurdity to comprehend the provisions of the Land
Acquisition Act being applicable to such land wherein the
ownership or the entirety of rights already vests in the
G State. In other words, the land owned by the State on which
there are no private rig lits or encumbrances is beyond the
purview of the provisions of the Land Acquisition Act. The
position of law is so clear as does not stand in need of
any authority for support. Still a few decided cases in point
H may be referred since available.
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 939
AUTHORITY & ORS. [R.M. LODHA, J.]
28. In Collector of Bombay v. Nusserwanji Rattanji Mistri A
[AIR 1955 SC 298] this Court held that when the
Government acquires lands under the provisions of the
Land Acquisition Act, it must be for a public purpose, and
with a view to put them to that purpose, the Government
acquires the sum total of all private interests subsisting in B
them. If the Government has itself an interest in the land, it
has only to acquire the other interests outstanding thereof
so that it might be in a position to pass it on absolutely for
public user. An interesting argument was advanced before
the Supreme Court. It was submitted that the right of the c
Government to levy assessment on the lands is an
"encumbrance" and that encumbrance is capable of
acquisition. The Court held that the word "encumbrance"
as occurring in Section 16 can only mean interests in
respect of which a compensation was made under Section D
11 or could have been claimed. It cannot include the right
of the Government to levy assessment on the lands. The
Act does not contemplate the interest of the Government
in any land being valued or compensation being awarded
therefor.
E
29. In Secy. of State v. Sri Narain Khanna [AIR 1942 PC
35: 44 Born LR 788] it was held that where the Government
acquires any property consisting of land and buildings and
where the land was the subject-matter of the government
grant, subject to the power of resumption by the F
Government at any time on giving one month's notice, then
the compensation was payable only in respect of such
buildings as may have been authorized to be erected and
not in respect of the land.
G
30. ·in the matter of the Land Acquisition Act: Govt. of
Bombay v. Esufali Sa/ebhai [ILR (1910) 34 Born 618: 12
Born LR 34] ILR (at p. 636) Batchelor, J. held that the
Government are not debarred from acquiring and paying
for the only outstanding interests merely because the Act,
H
940 SUPREME COURT REPORTS [2013] 4 S.C.R.
A which primarily contemplates all interests as held outside
the Government, directs that the entire compensation
based upon the market value of the whole land must be
distributed among the claimants. The Government was
held liable to acquire and pay only for the superstructure
B as it was already the owner of the land.
31. In Dy. Collector, Calicut Division v. Aiyavu Pi/lay [9
IC 341: (1911) 2 MWN 367: 9 MLT 272] Wallis, J.
observed that the Act does not contemplate or provide for
the acquisition of any interest which already belongs to the
c Government in land which is being acquired under the Act
but only for the acquisition of such interests in the land as
do not already belong to the Government.
32. In Collector of Bombay v. Nusserwanji Rattanji Mistri
D [AIR 1955 SC 298] the decisions in Esufali Salebhai case
[ILR (1910) 34 Bern 618 : 12 Born LR 34] and Aiyavu
Pi/lay case [9 IC 341: (1911) 2 MWN 367 : 9 MLT 272]
were cited with approval. Expressing its entire agreement
with the said views, the Court held that when the
E Government possesses an interest in land which is the
subject of acquisition under the Act, that interest is itself
outside such acquisition because there can be no
question of the Government acquiring what is its own. An
investigation into the nature and value of that interest is
F necessary for determining the compensation payable for
the interest outstanding in the claimants but that would not
make it the subject of acquisition. In the land acquisition
proceedings there is no value of the right of the
Government to levy assessment on the lands and there is
no award of compensation therefor. It was, therefore, held
G
by a Division Bench of Judicial Commissioners in Mohd.
Wajeeh Mirza v. Secy. of State for India in Council [AIR
1921Oudh31: 24 Oudh Cas 197]thatthe question of title
arising between the Government and another claimant
cannot be settled by the Judge in a reference under
H
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 941
AUTHORITY & ORS. [R.M. LODHA, J.]
Section 18 of the Act. When the Government itself claims A
to be the owner of the land, there can be no question of
its acquisition and the provisions of the Land Acquisition
Act cannot be applicable. In our opinion the statement of
law so made by the learned Judicial Commissioners is
correct." B
26. This Court answered the question under consideration
in the negative and held that the acquisition of land wherein the
ownership or the entirety of rights already vested in the State
on which there were no private rights or encumbrances, such C
(and was beyond the purview of LA Act. We agree with the
position of law highlighted in Sharda Devi11 but the question
is of its applicability on the factual situation of the present case.
Before we consider this aspect, we may also deal with the
statutory provisions and the decisions of this Court and the two
decisions of the Punjab High Court upon which strong reliance D
has been placed on behalf of the appellant in support of the
argument that acceptance of the highest bid in public auction
under Rule 90 of the 1955 Rules for sale of the property forming
part of the compensation pool does not create any title or right
in favour of the auction-purchaser unless the full auction price E
is paid/deposited.
27. By virtue of Section 14 of the 1954 Act, an evacuee
property acquired under Section 12 becomes part of the
compensation pool. The compensation pool vests in the central F
government free from all encumbrances. Section 20 empowers
the managing officer or managing corporation to transfer any
property out of the compensation pool subject to the 1955
Rules. Chapter XIV of the 1955 Rules provides for the
procedure for sale of property in the compensation pool. Rule G
87 provides that the property forming part of compensation pool
may be sold by public auction or by inviting tenders. Rule 90
provides for the procedure for sale of property by public auction.
The said rule, to the extent it is relevant, reads as under:
"90. Procedure for sale of property by public auction-(1) H
942 SUPREME COURT REPORTS [2013] 4 S.C.R.
A Where any property is to be sold by public auction-
(a) The property shall be sold through firms of repute
who have been approved as auctioneer by the Chief
Settlement Commissioner or through the officers
appointed by the Central Government in this behalf;
B
(b) the terms and conditions on which auctioneers may
be appointed shall, from time to time, be
determined by the Chief Settlement Commissioner.
c (2) to (7) xxx xxx xxx xxx
(8) The person declared to be the highest bidder for
the property at the public auction shall pay in cash or by a
cheque drawn on a scheduled bank and endorsed "good
for payment upto six months" or in such other form as may
D be required by the Settlement Commissioner, immediately
on the fall of the hammera deposit not exceeding 20 per
cent of the amount of his bid to the officer conducting the
sale and in default of such deposit the property may be
resold:
E
Provided that where the highest bidder is a displaced
person having a verified claim, the compensation in
respect of which exceeds the amount of the deposit
required under this sub-rule, he may, instead of making a
F deposit, execute an indemnity bond in the form specified
in Appendix XX.I-A.
(9) )()()( )()()( )()()( )()()(
(9)(A) xxx xxx xxx xxx
G
(9) (B). xxx xxx xxx xxx
(10) The bid in respect of which the initial deposit
has been accepted shall be subject to the approval of the
Settlement Commissioner or an officer appointed by him
H
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 943
AUTHORITY & ORS. [R.M. LODHA, J.]
for the purpose. A
Provided that no bid shall be approved until after the
expiry of a period of seven days from the date of the
auction.
(11) Intimation of the approval of a bid or its rejection B
shall be given to the highest bidder (hereinafter referred
to as the auction purchaser) by registered post
acknowledgement due and the auction purchaser shall
where the bid has been accepted be required within fifteen
days of the receipt of such intimation to send by registered C
post"acknowledgement due or to produce before the
Settlement Commissioner or any other officer appointed
by him for the purpose a treasury challan in respect of the
deposit of the balance of the purchase money:
D
Provided that the Settlement Commissioner or other
officer appointed by him in this behalf may, for reasons to
be recorded in writing, extend the aforesaid period of
fifteen days by such period, not exceeding fifteen days, as
the Settlement Commissioner or such other officer may E
think fit.
Provided further that the period extended under the
preceding proviso may further be extended (without any
limit of time) by the Chief Settlement Commissioner.
F
(12) The balance of the purchase money may, subject
to the other provisions of these rules be adjusted against
the compensation payable to the auction purchaser in·
respect of any verified claim held by him. In any such case
the auction purchaser shall be required to furnish within G
seven days of the receipt of intimation about the approval
of the bid, particulars of the compensation application filed
by him:
Provided that the Settlement Commissioner or any
H
944 SUPREME COURT REPORTS (2013] 4 S.C.R.
A officer appointed by him in this behalf may, for reasons to
be recorded in writing, extend the aforesaid period of
seven days by such further period not exceeding fifteen
days as the Settlement Commissioner or such other officer
may deem fit:
B
Provided further that the period extended under the
preceding proviso may further be extended (without any
limit of time) by the Chief Settlement Commissioner.
(13) If the Regional Settlement Commissioner, on
c scrutiny of the compensation application of the auction
purchaser finds that further sum is due to make up the
purchase price, he shall send an intimation to that effect
to the auction purchaser calling upon him to deposit the
balance in cash within fifteen days of the receipt of such
D intimation.
(14) If the auction purchaser does not deposit the
balance of the purchase money within the period specified
in sub-rule (11) or does not furnish particulars of his
compensation application as specified in sub-rule (12), or
E
if that net compensation admissible to the auction
purchaser is found to be less than the balance of the
purchase mone:t and the auction purchaser does not make
up the deficiency as provided in sub-rule (13), the initial
deposit made by the auction purchaser under sub-rule (8)
F shall be liable to forfeiture and he shall not have any claim
to the property.
(15) When the purchase price has been rgalised in
full from the auction purchaser, the Managing Officer shall
G issue to him a sale certificate in the form specified in
Appendix XX.II or XX.Ill, aq the case may be. A certified
copy of the sale certificate shall be sent by him to the
Registering Officer within the local limits of whose
jurisdiction the wholo/o or any part of the property to which
H
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 945
AUTHORITY & ORS. [R.M. LODHA, J.)
the certificate relates is situated. If the auction purchaser A
has associated with himself any other displaced person
having a verified claim whose net compensation is to be
adjusted in whole or in part against the purchase price, the
sale certificate shall be made out jointly in the name of all
such persons, and shall specify the extent of interest of B
each in the property.
Provided that if every such displaced person who
has associated himself with the auction-purchaser sends
an intimation in writing to the Regional Settlement C
Commissioner that the sale certificate may be made out
in the name of the auction-purchaser, the sale certificate
may be made out in the name of the auction-purchaser."
28. In Bombay Salt & Chemical lndustries1', this Court with
reference to the public auction of certain salt pans which were D
evacuee property and formed part of the compensation pool
constituted under the 1954 Act held in para 10 of the Report
as under:
"10. It is clear from the rules and the conditions of sale set E
out above that the declaration that a person was the highest
bidder at the auction does not amount to a complete sale and
transfer of the prop,erty to him. The fact that the bid has to be
approved by the Settlement Commissioner shows that till such
approval which the Commissioner is not bound to give, the
F
auction-purchaser has no right at all. It would further appear that
even the approval of the bid by the Settlement Commissioner
does not amount to a transfer of property for the purchaser has
yet to pay the balance of the purchase money and the rules
provide that if he fails to do that he shall not have any claim to
the property. The correct position is that on the approval of the G
bid by the Settlement Commissioner, a binding contract for the
sale of the property to the auction-purchaser comes into
existence. Then the provision as to the sale certificate would
indicate that only upon the issue of it a transfer of the property
takes place. Condition of Sale No. 7 in this case, furthermore, H
946 SUPREME COURT REPORTS (2013] 4 S.C.R.
A expressly stipulated that upon the payment of the purchase
price in full the ownership would be transferred and a sale
certificate issued. It is for the appellants to show that the
property had been transferred. They have not stated that the
sale certificate was issued, nor that the balance of the purchase
B money had been paid. In those circumstances, it must be held
that there has as yet been no transfer of the salt pans to
Respondents 4 and 5. The appellants cannot therefore claim
the benefit of Section 29 and ask that they should not be
evicted. Mr. Purshottam Trikamdas contended that the sale
c certificate will in any event be granted and that once it is
granted, as the form of this certificate shows, the transfer will
relate back to the date of the auction. It is enough to say in
answer to this contention that assuming it to be right, a point
which is by no means obvious and which we do not decide, till
it is granted no transfer with effect from any date whatsoever
0
takes place and none has yet been granted."
29. In Bishan Paul', a two-Judge Bench of this Court
observed that in Bombay Salt & Chemical Industries• this
Court did not directly decide the question when title would pass
E to an auction-purchaser. It was held that title would pass when
the full price was realized. This Court observed having regard
to the time lag between acceptance of the highest bid, payment
of full price and the issuance of certificate, that title must be
deemed to have been passed when the sale became absolute
F and the sale certificate must relate back to that date, i.e., when
the sale became absolute.
30. In Roshan Lal Goswamf', a Division Bench of the
Punjab High Court, on examination of the provisions of the 1954
G Act and Rule 90 of the 1955 Rules, held that till a sale certificate
was issued to the highest bidd6r and till the balance of the
purchase money had been paid, rights of ownership would not
vest in the auction-purchaser and the proprietary rights,
therefore, would not stand transferred by the mere fact that the
highest bid of the auction-purchaser has been accepted. The
H
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 947
AUTHORITY & ORS. [R.M. LODHA, J.]
Division Bench of the Punjab High Court noticed the lacuna in A
the 1954 Act about transitional stage after the acceptance of
the highest bid at the auction and till the sale certificate was
granted. Pertinently, with regard to the provisional possession
given to the auction-purchaser on acceptance of the highest bid,
the Division Bench of the Punjab High Court observed as B
under:
"8. After provisional possession has been given, the
auction-purchaser, even though he does not possess
proprietary rights, has possessory rights. He has the right C
of possession which can exist independently of ownership.
Possession and ownership may co-exist but in a number
of cases a person may be the owner of a thing and not
possess it; and conversely, a person may be the
possessor without being the owner. A person, who is a
possessor but not the legal owner, is entitled to certain D
rights by virtue of his possession alone .........."
31. In Jaimal Singh7 , the Punjab High Court, after noticing
Rule 90 of the 1955 Rules, in para 16 of the Report, inter alia,
held as under: E
" ........... In my view, title passes when the sale is
confirmed, because it is that date on which the auction-
purchaser is recognised officially as the owner and is
entitled to obtain possession of the property. The issue of
the sale certificate is invariably delayed because certain F
routine formalities have to be complied with and it is in very
rare cases that an office can be so prompt as to issue the
sale certificate on the very day the sale is confirmed. But
when a sale certificate is issued, it dates back to the date
when the sale was confirmed." G
32. The legal position with regard to transfer of title in
respect of the property forming part of the compensation pool
put to public auction under Rule 90 of the 1955 Rules may be
summarized thus : on approval of the highest bid by the H
948 SUPREME COURT REPORTS [2013] 4 S.C.R.
A Competent Authority, a binding contract for the sale of the
property to the auction-purchaser comes into existence. Once
the payment of the full purchase price is made, title in the
property would pass to an auction-purchaser. In other words,
on the payment of the full purchase price, the ownership in the
B property sold in public auction would stand transferred but the
transfer formally becomes complete on issuance of the
certificate of sale. If in the sale certificate, any particular date
is mentioned as provided in the proforma appended to Rule
90, such date mentioned in the sale certificate may be
c presumed to be the date on which the purchase has become
effective but crucial date for transfer of ownership in the property
in favour of auction-purchaser is the date when full purchase
price has been paid by the auction-purchaser.
33. The above being the legal position, let us recapitulate
D the facts and the effect of provisional possession given to the
appellant's husband. The auction of the subject land was
conducted on 21.06.1958. The highest bid submitted by the
appellant's husband was approved by the Settlement
Commissioner and a communication to that effect was sent on
E 31.10.1960 intimating to him that it has been decided to give
him provisional possession of the auctioned property. It is an
admitted case that provisional possession was in fact given to
the appellant's husband. On 16.06.1980, the concerned
authority asked the auction-purchaser to deposit Rs. 14,992/-
F as balance sale consideration which was done by the appellant
within the prescribed time (appellant's husband had died in the
meanwhile) and sale certificate was issued in favour of the
appellant on 22.08.1980. The said sale certificate was
registered on 15.07 .1981. It may be noticed here that the sale
G certificate mentions that the appellant has been declared
purchaser of the subject property with effect from 11.12.1958
but as a matter of law as indicated above, the ownership could
have transferred in favour of the appellant only in 1980 when
she paid full purchase price. In fact no ownership was
H transferred in favour of the appellant even on that date. We shall
SARASWATI DEVI (D} BY LR. v. DELHI DEVT. 949
AUTHORITY & ORS. [R.M. LODHA, J.]
indicate the reason therefor a little later. A
34. What is the effect of provisional possession which was
given to the appellant's husband in 1960 on approval of his
highest bid? Does it amount to creation of an encumbrance in
the property? If the provisional possession given to the
B
appellant's husband amounted to creation of an encumbrance,
whether the said property could have been acquired under the
LA Act although the ownership vested in the central
government? The fate of the appeal significantly will depend
upon answer to these questions.
c
35. Concise Oxford English Dictionary [Tenth Edition,
Revised] defines "encumbrance" - 1. a burden or impediment.
2. Law a mortgage or other charge on property or assets.
36. Webster Comprehensive Dictionary [International D
Edition; Volume I] defines "encumbrance" as follows:
"1. That which encumbers. 2. Law Any lien or liability
attached to real property. 3. One's wife, child or dependent.
Also spelled incumbrance. See synonyms under
IMPEDIMENT, LOAD [<OF encumbrance <encombrer. E
See ENCUMBER.]"
37. In P. Ramanatha Aiyar's The Law Lexicon [Second
Edition Reprint 2000] with reference to a decision of the Patna
High Court in Mahadeo Prasad Sahu v. Gajadhar Prasad F
Sahu 12, the term "encumbrance" is explained as follows :
"Encumbrance. Burden or property; impediment; mortgage
or other claim on property. Grant of lands rent free or the
grant of the landlords zarait land to a tenant for the
purposes of cultivation does amount to an encumbrance G
of the estate. Apart from mere dealings such as
mortgages which create a charge upon the land, there are
other dealings which amount to an encumbrance. Anything
12. AIR 1924 Patna 362 H
950 SUPREME COURT REPORTS [2013] 4 S.C.R.
A which interferes with the unrestricted rights of the
proprietors as they then existed would be an encumbrance
upon the land, even the granting of a lease of zarait lands,
that is to say the lands which the landlord is entitled to hold
in direct possession and to cultivate for his own purposes.
A lease of such lands granted to an occupier in
B
circumstances which would give him a right of occupancy
over the land, would amount to an encumbrance."
38. In Collector of Bombay v. Nusserwanji Rattanji Mistri
and Others 13, the term "encumbrance" as occurring in Section
C 16 of the LA Act has been explained by this Court to mean
interests in respect of which a compensation was made under
Section 11 or could have been claimed thereunder.
39. In M. Ratanchand Chordia & Ors. v. Kasim Khalee/i14,
D a Division Bench of the Madras High Court had an occasion
to consider the meaning of the word "encumbrances" with
reference to the 1954 Act and the LA Act in the context of the
easemantary right of way. The Division Bench considered the
word "encumbrances" thus :
E "18. The word "Encumbrances" in regard to a person or
an estate denotes a burden which ordinarily consists of
debts, obligations and responsibilities. In the sphere of law
it connotes a liability attached to the property arising out
of a claim or lien subsisting in favour of a person wl.o is
F not the owner of the property. Thus a mortgage, a charge
and vendor's lien are all instances of encumbrances. The
essence of an encumbrance is that it must bear upon the
property directly and in-directly and not remotely or
circuitously. It is a right in realiena circumscribing and
G subtracting from the general proprietary right of another
person. An encumbered right, that is a right subject to a
limitation, is called servient while the encumbrance itself
13. AIR 1955 SC 298.
H 14. AIR 1964 Madras 209.
SARASWATI DEVI (D} BY LR. v. DELHI DEVT. 951
AUTHORITY & ORS. [R.M. LODHA, J.]
is designated as dominant. ......." A
40. The word "encumbrance", according to its ordinary
significance, means any right existing in another to use the land
or whereby the use by the owner is restricted. The word
"encumbrance" imports within itself every right or interest in the 8
land, which may subsist in a person other than the owner; it is
anything which places the burden of a legal liability upon
property. The word "encumbrance" in law has to be understood
in the context of the provision under consideration but ordinarily
its ambit and scope is wide. Seen thus, it is difficult to see why C
a binding contract entered into between an auction-purchaser
and the government on approval of the highest bid relating to
sale of property, which is part of compensation pool under
Section 14 of the 1954 Act followed by provisional possession
to the auction-purchaser, should not come within the purview D
of the word "encumbrance".
41. It is well known in law that a person in possession of
the property - though not owner - is entitled to certain rights by
virtue of his possession alone. We are in agreement with the
view of the Punjab High Court in Roshan Lal Goswami' that E
an auction-purchaser on provisional possession being given to
him possesses possessory rights, though he does not have
proprietary rights in the auctioned property. Thus, there remains
no doubt that in October, 1960 or near about encumbrance in
the subject property came to be created. F
42. The next question is whether on creation of an
encumbrance, the subject property could have been acquired
under the LA Act although the ownership in the land vested in
the central government. Ordinarily, when the government
possesses an interest in land, which is the subject of acquisition G
under the LA Act, that interest is outside such acquisition
because there can be no question of the government acquiring
what is its own. This is what this Court said in Nusserwanji
Rattanji Mistn" 3 but this rule is not without an exception. There
H
952 SUPREME COURT REPORTS [2013] 4 S.C.R.
A is no impediment in acquisition of land owned by the central
government by invoking the provisions of the LA Act where
such land is encumbered or where in respect of the land owned
by the government some private interest has been created. As
a matter of fact, Sharda Devi" does not hold to the contrary. It
B is so because what Sharda Devi"' holds is this : the acquisition
of land wherein the ownership or the entirety of rights already
vested in the State on which there are no private rights or
encumbrance such land is beyond the purview of the LA Act.
In other words, if the government has complete ownership or
c the entirety of rights in the property with it, such land cannot be
acquired by the government by invoking its power of acquisition
under the LA Act but if some private rights have been created
in such property or the property has encumbrance(s), the
acquisition of such land is not beyond the pale of the LA Act.
D 43. Madan Lal Nangia 5 has been relied upon by the
Division Bench in the impugned order in upsetting the decision
of the Single Judge. Mr. Ranjit Kumar, learned senior counsel
for the appellant sought to distinguish this judgment. He
submitted that Madan Lal Nangia 5 was a case where this
E Court was concerned with the properties which vested in the
custodian and having regard to this aspect, this Court said that
merely because the properties vest in the custodian as an
evacuee property it does not mean that the same cannot be
acquired for some other purpose.
F
44. It .is true that facts in Madan Lal Nangia5 were little
different but, in our view, the legal position highlighted therein
does not become inapplicable to the present case on that
ground. In paragraphs 16, 17 and 18 of the Report (Pgs. 334-
G 335), this Court observed as follows:
"16 ............. A property is a composite property because
a private party has an interest in that property. The scheme
of separation, to be framed under Section 10 of the
Evacuee Interest (Separation) Act, is for the purpose of
H separating the interest of the evacuee from that of the
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 953
AUTHORITY & ORS. [R.M. LODHA, J.]
acquired under Section 12, the interest of the private A
person could have been acquired under the Land
Acquisition Act. Further, if the land stood acquired by the
notification dated 7-7-1955 then the question would arise
as to how the respondents acquired title to these lands. If
they purchased after the date of notification dated 7-7- B
1955, they would get no title. They then would not be able
to maintain the writ petition. Dr Dhavan submitted that the
appellants had admitted the title of the respondents and
thus this question would not arise. We are unable to accept
the submission. It is only a person who has an interest in c
the land who can challenge acquisition. When a challenge
is made to an acquisition at a belated stage, then even if
the court is inclined to allow such a belated challenge, it
must first satisfy itself that the person challenging
acquisition has title to the land. Very significantly, in their D
writ petition the respondents do not state when they
acquired title.
17....... Undoubtedly, the evacuee properties vested in the
Custodian for the purposes of distribution as per the
provisions of the various Acts. However, it is to be noted E
that under the various Acts in lieu of properties,
compensation in terms of money can also be paid. Thus,
merely because the properties vest in the Custodian as
evacuee properties does not mean that the same cannot
be acquired for some other public purpose............... F
18 ........ It would be open to the Government to acquire
evacuee property and give to the Custodian compensation
for such acquisition. Section 4 notification dated 23-1-1965
not having excluded evacuee properties the respondents
can get no benefit from the fact that in the 1959 notification G
evacuee properties had been excluded."
45. From the judgment in Madan Lal Nangia 5 , three
propositions of law emerge:
(i) At the time of acquisition of evacuee property under H
954 SUPREME COURT REPORTS [2013] 4 S.C.R.
A Section 12 of the 1954 Act if such property has
interest of a private person, the interest of private
person can be acquired under the LA Act even
though the land is owned by the government.
(ii) The properties that vest in the Custodian as
B
evacuee properties can be acquired for some other
public purpose.
(iii) When a challenge is laid to the acquisition of the
land at a belated stage then if the court is inclined
C to allow such a belated challenge, it must first satisfy
itself that the person challenging acquisition has title
to the land.
46. What follows from proposition (i) is also this that after
0 the acquisition of evacuee property under Section 12, if any
encumbrance is created or interest of a private person
intervenes therein, such land even if owned by the government
can be acquired under the LA Act. This is in congruity and
consonance with Sharda Devi'' as well.
E 47. When the facts of the instant case are seen in light of
the above legal position, we are of the considered view that
the appeal must fail. In the first place, as noticed above, by
approval of the highest bid given by the appellant's husband
followed with provisional possession, an encumbrance was
F created in 1960 in the subject land which was part of the
compensation pool before the acquisition proceedings were
initiated and, therefore, it could have been acquired by the Delhi
Administration under the LA Act. Secondly, and equally
important, the acquisition which was commenced by Section
G 4 read with Section 17(1)(iv) Notification issued on 07.03.1962
which ultimately culminated into an award on 30.06.1962 was
challenged for the first time after more than thirty years of the
passing of the award. The appellant has failed to show her title
or her husband's title in the property on the date of the
H acquisition. As a matter of fact, though the approval to the
SARASWATI DEVI (D) BY LR. v. DELHI DEVT. 955
AUTHORITY & ORS. [R.M. LODHA, J.]
highest bid given by the appellant's husband in respect of the A
subject property was given on 31.10.1960, the payment of full
price by the appellant was made pursuant to the communication
dated 16.06.1980 but by that time the subject land already stood
acquired by the Delhi Administration and, therefore, despite the
payment of full price by the appellant in 1980 and the issuance B
of the sale certificate, no title came to be vested in the appellant.
The legal position that we have summarised with regard to
transfer of title in respect of the property forming part of the
compensation pool put to public auction under Rule 90 of the
1955 Rules in the earlier part of the judgment does not help c
the appellant at all because of completion of acquisition
proceedings in 1962 much before the payment of full purchase
price by the appellant. In the absence of any title in favour of
the appellant or her husband on the date of acquisition, the
challenge to such acquisition could not have been allowed by D
the Single Judge. The Division Bench rightly set aside the
erroneous order of the Single Judge.
48. In view of the above, appeal has no merit and is liable
to be dismissed and is dismissed with no order as to costs.
E
49. It is, however, clarified that appellant's claim for
compensation, refund or any other monetary claim shall be
considered and/or decided on its own merits in accordance
with law and the present judgment shall have no bearing in
relation to such claim. F
K.K.T. Appeal dismissed.
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