Holding

Res judicata applies only when the same parties and issues have attained finality, and statutory interest provisions are discretionary and may be waived; therefore the High Court’s orders were erroneous and are set aside.

Summary

The case concerned the acquisition of about 5,000 bighas of land in Masoodpur for the construction of Jawaharlal Nehru University. The Union of India appealed against the Delhi High Court’s award of compensation based on questionable valuation methods, the grant of interest during a stay, and the allowance of amendment of pleadings and additional evidence. The Supreme Court held that res judicata applies only when the same parties and issues have attained finality, that interest under Sections 28 and 34 of the Land Acquisition Act is discretionary and can be waived, and that the High Court erred in permitting amendment of the original claim. Consequently, the High Court’s judgments were set aside and the matter remitted to the High Court for fresh determination of market value compensation, mineral rights, and procedural compliance.

Issues considered

The applicability of the principle of res judicata to the compensation and valuation issues
Whether interest under Sections 28 and 34 of the Land Acquisition Act can be waived by the parties
The proper method for determining market value of the acquired land
The validity of allowing amendment of pleadings and adduction of additional evidence under Order 6 Rule 17 CPC
The relevance of Section 25 of the Land Acquisition Act and service of notice under Section 9
The ownership and exploitation rights over minor minerals (China clay) in the acquired land

Legislation cited

Code of Civil Procedure, 1908s. Order 41 Rule 27, s. Order 6 Rule 17, s. Order 6 Rule 18
Constitution of Indias. Article 142
Delhi Land Reforms Act, 1954
Land Acquisition Act, 1894s. 18, s. 23, s. 25, s. 28, s. 34, s. 4, s. 54, s. 6
Mines and Minerals (Regulation and Development) Act, 1957
Punjab Land Revenue Act, 1887s. 41, s. 42, s. 60-C

Subjects

Land acquisitionCompensationMarket value determinationRes judicataInterest under Land Acquisition ActWaiver of statutory rightsAmendment of pleadingsMineral rightsBhumidharDelhi Land Reforms ActPunjab Land Revenue Act

Judgment

A UNION OF INDIA
v.
"
PRAMOD GUPTA (D) BY LRS. AND ORS.

SEPTEMBER 7, 2005 ,,

B [ASHOK BHAN AND S.B. SINHA, JJ.]

'
Land Acquisition:

land Acquisition Act, 1894: Sections 4, 6, 18, 23, 25 and 54.
c
Compensation-Market value-Methods to determine-Principle of res
judicata-Applicability of-Notification to acquire lands for public purpose
ofconstructing a Universit;~A portion ofland admittedly contained minerals-
Reference Court awarded compensation for the lands and for minor mineral
viz. China Clay-High Court dismissed appeals filed by the Central Government
D on the ground that judgments and awards granting compensation for the \.

lands acquired in neighbouring villages which were upheld by it in appeal
would attract principle of res judicata-Central Government's application
under 0. 41 R. 27 CPC for bringing on record a sale deed rejected by High
Court-Held: The principle of res judicata would apply only when the !is was
E inter-parties and had attained finali~Even if the Central Government had
not filed any appeal against the earlier judgments of the High Court it would
not be estopped and precluded from raising the same question in a different
proceeding-The best method to determine compensation would be the amount
which a willing purchaser would pay to the owner-Hence, High Court not
justified in rejecting the application under 0. 41 R. 27 CPC-The area of the
F land, the nature thereof. advantages and disadvantages occurring therein are ·-
the relevant factors for determining the market value of the land acquired-
Hence, matter remitted to High Court for fresh consideration.

Sections 28 and 34-land acquisition-Compensation-Interest on
G enhanced compensation-Proceedings between the parties remained stayed
for a certain period-Claimants agreed not to claim interest on the enhanced
compensation, if any, during the period ofstay-However, High Court awarded
interest for the said period-Correctness of-Held: Grant of interest under S.
28 is discretionary-Only rate of interest is mandatory-Even a mandatory
provision of a statue can be waived-Once a claimant waived his right to
H 48
U.0.1. v. PRAMOD GUPTA (D) BY LRS. 49
...
claim interest with a view to obtaining an order of stay he is not entitled to A
any interest for the period of stay-High Court judgment set aside.

Constitution of India, 1950:
~
Article 142-Complete justice between the parties-Land acquisition
under Land Acquisition Act, 1894-0rders disallowing application for B
amendment filed by Central Government as also grant ofpermission to adduce
j additional evidence by the claimants not questioned-Effect of-Held: As a
large amount ofpublic money was involved in the land acquisition said orders
set aside with a view to doing complete justice between the parties.

Two notifications dated 24.10.1961 and 23.0l.1965 were issued for
acquisition of the lands measuring ll05.04 bighas and 3895.07 bighas
c
respectively for the public purpose of construction of a University. A
portion of the land admittedly contained minerals. Two awards were made
on 2.12.1967 and 8.04.1969. The Reference Court, under Section 18 of the
Land Acquisition Act, 1894, awarded compensation @ Rs. 18,000 per
bigha and Rs. 12,000 per bigha respectively. The Reference Court further D
granted compensation @ Rs. 10.000 per bigha for minor mineral i.e. China
Clay. The respondents were claiming their right, title and interest in the
lands in- question from one 'GS' who was said to be the proprietor of a
Pottery Works having a non-occupancy tenancy right therein. Several
proceedings had been initiated in respect of right, title and interest of
E
respective parties after coming into force of the Delhi Land Reforms Act,
1954. The said 'GS' had allegedly been declared Bhumidhar by the Deputy
Commissioner of Delhi.

On appeal, the High Court dismissed the appeals filed by the
>
appellants holding that the judgments and awards granting compensation
F
for the lands acquired in the neighbouring villages which were upheld by
it in different appeals, would attract the principle of res judicata. The High
Court also refused to entertain an application filed by the appellant under
Order 41 Rule 27 of the Code of Civil Procedure, 1908 for bringing on
record a sale deed whereby; one of the respondents had obtained
assignment of I/4th share of the amount of compensation. The High Court G
fixed the amount of compensation in respect of land with china clay and
without china clay @ Rs. 56 per sq yd and Rs. 30 per sq yd respectively
in relation to notification dated 24.10.1961 and @Rs. 98 per sq yd and
Rs. 72 per sq yd in relation to notification dated 23. l.1965.

The High Court also awarded interest for the period during which H
SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.
50
..
A the proceedings were stayed at the instance of the respondents on the
ground that grant of interest under Sections 28 and 34 of the Act being
mandatory in nature could not be waved. For computing the market value
of the lands in question the High Court proceeded on the basis of cost for
development of the lowest category of residential plots. Hence the appeal.

B Disposing of the appeal, the Court

HELD: I. I. While determining the amount of compensation payable
in respect of the lands acquired by the State, indisputably the market value
therfor has to be ascertained. There exist different modes therefor.
[66-D-E)
c
1.2. The best method would be the amount which a willing purchaser
would pay to the owner of the land. In absence of any direct evidence, the
court, how~ver, may take recourse to various other known methods.
Evidences admissible therefor inter alia would be judgments and awards
D passed in respect of acquisitions of lands made in the same village and/or
neighbouring villages. Such a judgment and award in the absence of any
other evidence like deed of sale, report of expert and other relevant
evidence would have only evidentiary value. [66-F-G)

2.1. Therefore, the contention that as the appellant was a party to
E the earlier awards would not by itself be a ground to invoke the principles
of res judicata and/or estoppel. Despite such awards it may be open to the
appellant to question the entitlement of the claimants-respondents to the
amount of compensation and/or the statut~ry limitations in respect thereof.
It would also be open to the appellant to raise other contentions relying
on or on the basis of other materials brought on the records. It was also
F open to the appellant to contend that the lands under acquisition are not
similar to the lands in respect whereof judgments have been delivered. The
area of the land, the nature thereof, advantages and disadvantages
occurring therein amongst others would be relevant factors for
determining the actual market value of the property although such
G judgments/awards, if duly brought on records, would be admissible in
evidence. (66-G-H; 67-A-B(

22. Even if the appellant had not preferred any appeal against the
earlier judgment and award, it would not be estopped and precluded from
raising the same question in a different proceeding as in a given case it is
H permissible in law to raise the same keeping in view larger public interest.
U.0.1. v. PRAMOD GUPTA (D) BY LRS. 51
Government of West Bengal v. Tarun K. Roy, [2004] l SCC 347, relied A
on.

Rameshwar Solanki v. Union of India, 57 (1995) DLT 410; Gaon Sabha
v. Nathi, JT (2004) 4 SC 36 and Sardar Amarjit Singh Kalra v. Pramod
Gupta, [2003[ 3 SCC 272, referred to.

3.1. The principle of res judicata would apply only when the lis was B
inter-parties and had attained finality in respect of the issues involved.
The said principle will, however, have no application inter alia in a case
where the judgment and/or order had been passed by a court having no
jurisdiction therefore and/or in a case involving pure question of law. It
will also have no application in a case where the judgment is not a speaking C
one. [68-B-C]

3.2. The courts while determining the amount of compensation for
the acquisition of land would be bound to take into consideration only the
materials brought on records. However, factors which would be relevant
for determining the amount of compensation would vary from case to case D
and no hard and fast rule can be laid down therefor. The principle of res
judicata will, therefore, have no application in the fact of the present
matter. [68-C-D[
4. It may be true that the principles of res judicata may be applicable
in respect of the question of title but even for the said purpose it was E
obligatory on the part of the High Court to refer to the previous judgments
whereupon reliance had been placed by the respondents for the purpose
of arriving at a decision as to whether they have been rendered by a
competent court or not. The question as to whether a civil court will have
jurisdiction in respect of declaration and/or cancellation of bhumidhari
right was not adverted to by the High Court. [68-D-E-F] F
5. From the impugned judgment of the High Court, it does not
appear that it had taken into consideration the relevant factors, viz., (i)
implication of the provisions of the Delhi Land Reforms Act, 1954 vis-a-
vis the nature of the land and/or the source of title; and (ii) the statutory
effect as regards the claim of the respondent on the subsoil mineral right G
in the light of several existing statutes. [69-8-C]

6. The provisions of the Punjab Land Revenue Act, 1887 govern the
rights of the tenants. The original deeds under which the right of
proprietorship, if any, said to be created in favour of one 'GS', in terms
whereof she became occupancy tenant as also the deeds of sale/grants made H
•

52 SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A in favour of her predecessors have not been produced before this Court,
in absence whereof it will not be prudent for this Court to venture to arrive
at a conclusion as regards the nature of the right of the proprietor or the
lessee as the case may be. Even the judgments and decrees passed by the ...
civil courts and the revenue courts are not before this Court and, thus,
B this Court may only briefly indicate the legal position, the application
whereof would depend on a finding of a court of competent jurisdiction
as regards the nature and extent of right..j70-F-G-H; 71-A-BI
F.F. Christian v. Tekaitni Narbada Koeri, (1914) CLJ (20) 527,
-
Bageswari Charan Singh v. Kumar Kamakhya Narain Singh, AIR (1931) PC
30, Ras Behari Manda! v. Raja Jagadish Chandra Deo Dhaubal Deb, (1936)
C IC (160) 114, Great Western Railways Co. v. Carpalla United China Clay
Co. Ltd, (1910) AC 83, Jagat Mohan Nath Sah Deo v. Pratap Udai Nath
Sah Deo, AIR (1931) PC 302, Gobinda Narayan Singh v. Sham Lal Singh,
AIR (1931) PC 89, H. VLow & Co. Ltd v. Raja Bhadur Jyoti Prasad Singh,
AIR (1959) PC 299, Onkannal Agarwal/av. Bireswar Hazra, AIR (1959)
D Cal. 195 and Bejoy Singh Dudhoria v. Surendra Narayan Singh, (1920) ILR
(56) Cal. 1, approved.
7. The lands in question indisputably were governed by the Punjab
Land Revenue Act, 1887 and the Punjab Tenants (Security of tenure) Act,
1950. The Punjab Land Revenue Act, 1887 is still applicable save and
E except those provisions which are inconsistent with the provisions of the
Delhi Land Reforms Act. The claim of the respondents is stated in their
counter-affidavit filed in this Court. The respondents claimed themselves
to be occupancy-tenants. [80-8-Cf
State ofPunjab v. Mis. Vishkarma, JT (1993) (1) SC 448, Raja Rajinder
Chand v. Mst. Sukhi, AIR (1957) SC 286, Shakuntala Devi v. Kam/a, JT
F (2005) 4 SC 315, Mathura Prasad Bajoo Jaiswal v. Dossibai N.B. Jeejeebhoy,
(1970) 1 SCC 613, Chief Justice ofA.P. v. L. VA. Dixitulu, [197912 SCC 34,
Ashok Leyland Ltd. v. State of T.N., 120041 3 SCC 1, Management of Mis.
Sonepat Cooperative Sugar Mills Ltd. v. Ajit Singh, JT (2005) 2 SC 481,
Ramnik Vallabhdas Madhvani v. Taraben Pravinlal Madhvani, (200411 SCC
G 497 and Municipal Corporation of Delhi v. International Security &
Intelligence Agency Ltd, (20041 3 SCC 250, relied on.
Prem Chand v. State of Haryana, AIR (P & H) 50 (DB), Man Chand
v. State of Haryana, 74 (1972) PLR 508, Chunni Lal v. State·of Harya_.na, 73
(1971) PLR 159, Gram Panchayat v. State of Himachal Pradesh, AIR 1973
H HP 7 and Bheemgari Bhaskar v. Revenue Divisional Officer, (2000) l ALT
U.0.l. v. PRAM OD GUPTA (D) BY LRS. 53
159, approved. A
8.1. One of the modes of computing the market value may be based
on a judgment or award in respect of acquisition of similar land, subject
of course to such increase or decrease thereupon as may be applicable
having regard to the accepted principle laid down therefor and as may
be found applicable. (85-G-Hf B
Delhi Development Authority v. Bali Ram Sharma, (2004) 6 SCC 533,
j
land Acquisition Officer v. Nookala Rajamallu, (2003) 12 SCC 334, Lila
Ghosh v. State of W.B., [2004) 9 SCC 337 and V. Hanumantha Reddy v. Land
Acquisition Officer and Manda! R. Officer, (2003) 12 SCC 642, relied on.
c
Atma Ram v. State of Punjab, AIR (1959) SC 519, Hingri Rampur Coal
Co. Ltd v. State of Orissa, (1961) 2 SCR 537, India Cement Ltd. v. State of
Tamil Nadu, [1990) I SCC 12, Bhagirath Ram Chandv. State ofPunjab, AIR
(1954) Punj 167 and State of Punjab v. Keshar Singh, AIR (1959) Punj. 8,
referred to.
D
8.2. It is also well-settled that for the purpose of determining the
market value of the acquired lands, the comparable sales method i.e. the
lands sought to be compared must be similar in potentiality and nature
may be adopted. [86-G-H)

Panna Lal Ghosh v. Land Acquisition Collector, [2004) I SCC 467, E
relied on.

8.3. It is also trite to state that the market value of agricultural land
is lower than that of land suitable for commercial purposes.

Om Prakash v. Union of India, (2004) IO SCC 627, relied on. F
Shaji Kuriakose v. Indian Oil Corporation ltd.,,(2001) 7 SCC 650, P.
Ram Reddy v. Land Acquisition Officer, [1995) 2 SCC 305, K.S.
Shivadevamma v. Assistant Commissioner and Land Acquisition Officer, (19961
2 SCC 62 and Basavva v. Sp!. Land Acquisition Officer, [1996) 9 SCC 640,
referred to. G
9. The High Court without assigning any reason discarded the
method of valuation adopted by the reference court. Before the reference
court, the respondents only relied upon the judgments and awards
granting compensation for acquisition of similar lands. The High Court
....., while allowing an application for adduction of additional evidence referred H
54 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A only to certain notifications issued by the appellant in the year 1965 which
were meant for the residential plots whereby allegedly the market value
was stated to be 150 per sq. yd. for lands situated at Vasant Vihar wherefor
certain deductions were made@ 12% per annum therefrom in respect of
the lands acquired under the notifications dated 24.10.1961. There is no
B basis on which the High Court took recourse to the said method wholly
ignoring the other materials on records. 190-C-D-E-F)

Jawajee Nagnataham v. Revenue Divisional Officer, 11994) 4 SCC 595,
Krishi Utpadan Mandi Samiti v. Bipin Kumar, 12004) 2 SCC 283, DDA v.
Joginder S. Monga, (20041 2 SCC 296 and Shakuntalabai v. State of
C Maharashtra, 11996) 2 SCC 152, referred to.

10.1. The present case merited a different treatment at the hands of
the High Court. The land in question was acquired for a University. The
University was constructed in a large area. By reason of the two
notifications in question alone, about 5,000 bighas of lands were acquired.
D Out of the said 5,000 bighas, the lands needed for actual construction of
the building may be a few bighas only. A large portion of the land must
have been kept vacant for future development as also for other purposes
e.g. sport and other activities. The area consisting of stones might not have
been utilized for the purpose of raising any construction. A portion of land
admittedly contained minerals. A number of minerals were said to be
E deposited in the land in question, namely, mica, berill quards and china
clay. The respondents, however, having regard to the materials on records
confined their claim only to China clay.19% of the total minerals-bearing
land is said to have been exploited. How far these minerals bearing land
were suitable for raising construction is a matter of guess. As per the
F evidence on record the minerals can be up to a depth of 60 ft. It is not
necessary for this Court to go into this question in detail as the High Court
did not advert thereto; But suffice it to say that for the purpose of carrying
out mining operation, the respondents were required to comply with the
safety provisions contained in the Mines Act, 1952 and the rules and
regulations framed thereunder. 191-E-F-G-H; 93-A-B)
G
10.2. The Reference Court and the High Court did not consider the
question as to what amount was required to be expended for bringing the
said area back to the normal so as to enable the University authorities to
raise construction thereon. Minerals were evidently taken out by taking
H to recourse to the quarry method, but there is no evidence adduced by ,__
U.0.1. v. PRAM OD GUPTA (D) BY LRS. 55
the respondents to show that the pits caused by such mining activities have A
been filled up. [93-8-C-D)

10.3. In fact the Reference Court or the High Court did not address
themselves on the question that the market value of the acquired lands
was required to be determined having regard to the largeness of the area
and the purpose for which they are required, namely, for the University B
and not for the development of the township or the residential colony
wherefor different standards may have to be adopted. The Reference
Court and the High Court should have also taken into consideration the
fact that the lands in question being of different categories would fetch
different prices and same price might not have been available for all types C
of lands. Recourse taken by the High Court to the circulars issued for the
lands acquired for residential purpose only, therefore, will have no
application in the facts and c'rcumstances of the present case. [93-F-G[

11.1. It may not, thus, be correct to contend that Sections 28 and 34
of the Land Acquisition Act, 1984 are so imperative in character that D
waiver thereof is impermissible in law or would be against public interest.
Grant of interest in terms of Section 28 of the Act is discretionary. Only
rate of interest specified therein is mandatory. Section 34 of the Act ex
facie, however, appears to be imperative in character as the word 'shall'
has been used. A discretion vested in the court, it is trite, may not be
exercised where the right to claim interest has been waived expressly by E
the parties and/or their counsel. Even a mandatory provision of a statue
can be waived. [95-C-D-E)

Raghubans Narain Singh v. The Vilar Pradesh Government, AIR (1967)
/
SC 465 and State ofAssam v. Jitendra Kumar Senapati, AIR (1981) SC 969, F
relied on.

11.2. If a person alters his position pursuant to the representation
made by the other side, the principles of estoppel would be applicable and
by reason thereof, the person making the representation would not be
allowed to raise a plea contra thereto. [96-H; 97-A) G
Krishna Bhadur v. Purna Theatre, [2004) 8 SCC 229, Vijay Cotton and
Oil Mills Ltd. v. State a/Gujarat, [1969) 2 SCR 60 and State of Karnataka
v. Sangrappa Dvavappa Biradar, [2005) 4 SCC 264, relied on.

Supdt. a/Taxes v. Mis. Onkarmal Nathmal Trust, AIR (1975) SC 2065, H
56 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R. ...
A held inapplicable.

12.I. It is, therefore, not correct to contend that there cannot be any
waiver of the right to claim interest. Statutory provisions are made for
payment of interest with a view to compensating a party who had suffered
damages owing to a positive action or inaction of the other resulting in
B blockade of money which he would otherwise have received. A party who
himself represents before the court of law that he would not claim interest
with a view to obtaining an order of stay which would be for his own
benefit, could not be permitted to take advantage of his own wrong.
(98-G-H; 99-A-B)

C Sushi/ Kumar v. Rakesh Kumar, (2003) 8 SCC 673 and Laxminarayan
R. Bhattad v. State of Maharashtra, (2003) 5 SCC 413, relied on.

Ram Chandra Singh v. Savitri Devi, (2003( 8 SCC 319 and Board of
Control for Cricket in India v. Netaji Cricket Club, (2005) 4 SCC 741,
· referred to.
D
12.2. Therefore, the High Court committed a manifest error in
allowing interest for the period during which the proceedings before the
Reference Court remained stayed. (99-C-D)

13. It is not in dispute that in the proceeding before the Reference
E Court the respondent claimed compensation to the extent of I/4th share
in the entire land. It has also not been disputed that Section 25 of the Land
Acquisit!on Act, 1894 contains a substantive provision of law and not a
procedural one and, thus, the statutory provision as it existed prior to its
amendment in the year 1984 shall apply. (99-E-F)

p Land Acquisition Officer-cum-DSWO, A.P. v. B. V. Reddy, 12002) 3 SCC '
463 and Krishi Utpadan Mandi Samiti v. Kanhaiya Lal, 12000( 7 SCC 756;
relied on.
'
14. It becomes obligatory upon the State to pay compensation on the
basis of the market value of the land acquired. (100-E(

G Bhag Singh v. Union Territory a/Chandigarh, AIR (1985) SC 1576 and
Union of India v. Raghubir Singh, JT (1989) 2 SC 427, relied on.

15. Service of notice upon the recorded persons whose names appear
in the revenue records only would sub serve the purpose for which notice
is required to be served. (101-D-E)
H
U.0.1. v. PRAMOD GUPTA (D) BY LRS. 57
State of Punjab v. Sawaran Singh, (2005) SCALE 601 and A
Sureshchandra C. Mehta v. State of Karnataka, (19941 Supp. 2 SCC Sil,
relied on.

W.B. Housing Board v. Brijendra Prasad Gupta, [1997) 6 SCC 297,
referred to.
B
Uggar Sen Kashyap v. Union of India, (1973) 9 DL T 59, approved.
f
16. It is now well settled that if an owner himself has purchased the
land the same would be the best evidence for determining the amount of
compensation. (103-CJ
c
Shakuntalabai v. State of Maharashtra, [1996) 2 SCC 152, referred to.

17. The pleadings before the trial court are the basis for adduction
of evidence either before the trial court or before the Appellate Court.
By amending the memo of appeal the original pleadings cannot be
amended. The claimants-respondents made their claim before the D
Reference Court claiming compensation for the lands acquired under two
different references at a certain rate. They are bound by the said pleadings.
Section 53 of the Land Acquisition Act, 1894 merely provides for
applicability of the provisions of the Code of Civil Procedure, 1908
including the one under Order 6 Rule 17 thereof. Order 6 Rule 17 of the E
Code postulates amendment of pleadings at any stage of the proceedings.
Before an amendment can be carried out in terms of Order 6 Rule 17 of
the Code the Court is required to apply its mind on several factors
including viz., whether by reason of such amendment the claimant intends
to resile from an express admission made by him. In such an event the
application for amendment may not be allowed. [104-A-B-C-D) F
Mis. Modi Spinning and Weaving Mills Co. Ltd. v. Mis. Ladha Ram &
Co., AIR (1977) SC 680, Heerala v. Kalyan Mal, 11998) 1 SCC 278,
Sangramsinh P. Gaekwad v. Shantadevi P. Gaekwad, JT (2005) I SC 581
and Krishi Utpadan Mandi Samiti v. Kanhaiya Lal, [2000) 7 SCC 756, relied
on. G

18.1. The rights of the parties, it is well-settled, must be determined
on the basis of the case pleaded and proved by leading proper evidence
and just not on the basis of other reported judgments. 1106-C-D)

);•
H
58 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A Surendra Kumar Vakil v. Chief Executive Officer, [2004) 10 SCC 126
and Sanjay Gera v. Haryana Urban Development Authority, [2005) 3 SCC
207, relied on.

Bhooria v. Union of India, 95 (2002) DLT 100 (DB), referred to.

B 18.2. The purported amendments of the Memo of Appeal and the
reference applications, therefore, could not have been the basis for
allowing adduction of additional evidence as has been done by the High
Court. [106-E-F)

19.1. It has not been disputed that the claimant-respondent
C purchased 1/4th share of the land in question by a sale deed. The appellant
filed an application under Order 41Rule27 of the Code for bringing the
Xerox copy of the said sale deed on records but the same was rejected
inter alia on the ground that prior thereto no effort was made to rely upon
the said sale deed. [103-8-CJ
D 19.2. It is true that the appellant did not question the orders
disallowing the application for amendment filed by the appellants and
allowing the application for amendment as also adduction of additional
evidence by the respondents but having regard to the peculiar facts and
circumstances of the present case and in particular the fact that a large
E amount of public money is involved, it is a fit case where jurisdiction of
this Court under Article 142 of the Constitution should be invoked for
the purpose of setting aside the said orders with a view to doing complete
justice between the parties. [111-D-EJ

Deb Narayan Shyam v. State of WB., [2005) 2 SCC 286, relied on.
F
20. Therefore, the impugned judgments are set aside and the matters
are remitted to the High Court for fresh consideration. [112-D-E)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6825-6826 of
2003.
G
From the Judgment and Order dated 5.10.2001 of the Delhi High Court
in R.F.A. Nos. 85 and 86 of 1987.

With C.A. Nos. 6827-6832/2003, 950, 2661, 5566-5569 of 2005.

H WITH
U.0.1. v. PRAMODGUPTA (D) BY LRS. (S.B. SINHA, J.] 59
C.A. Nos. 6827-6832/2003, 950, 2661 of2005, Civil Appeal Nos. 5566- A
5569 of 2005•!arising out of SLP(C) Nos. 14383 of 2004, 17913, 17915,
17916 of2005]. '

Amrendra Sharan, Additional Solicitor General, M.P.S. Tomar, S. Wasim
A. Qadri, Mrs. Kiran Bhardwaj, Mrs. Rekha Pandey, Ms. Pareena Swamp,
Mrs. Asha G. Nair, Mrs. Sunita Sharma, Mrs. Anil Katiyar and D.S. Mahra B
for the Appellant.

K. Ramamoorthy, K.N. Bhat, Sriram J. Thalapathy, N.K.
Arulmurugandham, Manish Vashisht, Ashok K. Mathur, Vishnu B. Saharya,
Dhruv Mehta, Mohit Chaudhary, Harshvardhan Jha, Naresh Kaushik, Mrs.
Lalita Kaushik, Parmanand Gaur, S.K. Rout, Naresh Kumar, Jagjit Singh C
Chhabra, S.K. Dhingra, Ms. Shefali Dingra, Dr. Ms. Aparana Bhardwaj, Rajesh
Tyagi and Atishi Dipankar for the Respondents.

The Judgment of the Court was delivered by

S.B. SINHA, J. Leave granted in the special leave petitions.
D

INTRODUCTION :

These appeals are directed against a common judgment and order dated
5.10.2001 passed by a Division Bench of the High Court of Delhi in R.F.A. E
No. 85 and 86 of 1987 under Section 54 of the Land Acquisition Act, 1894
(for short "the Act") whereby and whereunder the amount of compensation
in respect of acquisition of land in village Masoodpur with china clay and
without china clay was fixed @ Rs. 56 per sq. yard and Rs. 30 per sq. yard
respectively in relation to the notification dated 24.10.1961 and Rs. 98 per·
sq. yard and Rs. 72 per sq. yard with China Clay and without China Clay F
respectively in relation to the notification dated 23.01.1965.

The basic fact of the matter is not in dispute. Two notifications dated
24. I 0.1961 and 23.01.1965 were issued for acquisition of the lands measuring
1105.04 bighas and 3895.07 bigha respectively situated in village Masoodpur
for the public purpose of planned development of Delhi, i.e., for construction G
of Jawahar Lal Nehru University. Declarations under Section 6 of the Act
were issued on 6.08.1966 and 6.12.1966. Two awards being award Nos.
2040 and 2225 were made on 2.12. I 967 and 8.04. I 969. The Land Acquisition
Collector for the purpose of computation of the amount of compensation
payable for acquisition of said land divided the acquired lands in three H
60 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A categories viz. Blocks A, B & C and awarded compensation @ Rs. l 000 per
.. c
bigha for Block A, Rs. 900 per bigha for Block B and Rs. 600 per bigha for
Block C in respect of the acquisition of land under notification dated
24.10.1961 and Rs. 1580 per bigha for Block A, Rs. 1175 per bigha for
Block B and Rs. 600 per bigha for Block C in respect of the acquisition of
land under notification dated 23.01.1965. The owners of the lands being
B aggrieved by and dissatisfied with the said awards filed applications seeking
reference in terms of Section 18 of the Act pursuant whereto and in furtherance
whereof the Reference Court by a judgment and award dated 28.07 .1986
awarded compensation @ Rs. 18000 per bigha for the lands covered by
Award No. 2225 and Rs. 12000 per bigha for the lands covered by Award ~

c No. 2040. The Reference Court further granted compensation @ Rs. l 0,000
per bigha for minor mineral, i.e., China Clay.

On or about 8.12.1986, the Appellants herein preferred appeals in terms
of Section 54 of the Act being aggrieved by and dissatisfied with the said
judgment and award which were marked as R.F.A. No. 85 & 86of1987. The
D Respondents herein upon service of notice filed cross objections seeking
enhancement of compensation both in respect of land as well as the mineral
China Clay.

HIGH COURT:

E The High Court by reason of the impugned judgment dismissed the
appeals filed by the Appellants herein holding, inter alia, that the judgments
and awards granting compensation for the lands acquired in the neighbouring
villages which were upheld by it in R.F.A. Nos. 567/1990 and 694/1990,
would attract the principle of res judicata and, thus, the appeals filed by the
Appellants were not maintainable. The High Court, however, allowed the
F
cross-objections filed by the Respondents h;:rein in part.

The High Court further refused to entertain an application filed by the
Appellants herein under Order XLI Rule 27 of the Code of Civil Procedure
for bringing on record inter alia a sale deed whereby and whereunder one of
G the Respondents herein obtained assignment of I/8th of the amount of
compensation in the year 1980 for a sum of Rs. 30,000 holding that the same
was not relevant for disposal of the appeals and in any event the same should
have been brought on records by the Appellants before the Reference Court.

The Appellants before the High Court, inter alia, had raised a contention
H that as the proceeding arising out of reference having remained stayed at the ...
U.O.I. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.] 61
• instance of the Respondents for the period January, 1972 and May, 1980; A
they were not entitled to any interest which was rejected opining that the
statutory provisions for grant of interest as contained under Sections 28 and
34 of the Act beirig mandatory in nature cannot be waived.

For computing the market value of the lands, the Hi&~ ~curt proceeded
on the basis that the lowest category of residential developecfplots, as in the B
year 1965, should be taken to' be the base therefor i.e. @Rs. 150 per ~
sq. yd.
f and directed deduction of 40% therefrom on the premise that some time
would have been necessary for excavating minor minerals and to make the
lands fully developed having regard to their tremendous building potential.
The High Court also directed further deduction of 20% from the wholesale c
price opining that Rs. 72 per sq. yard would be a fair market price for the
acquired land in the year 1965. However, as regard the lands which were the
subject matter of acquisition in tenns of notification dated 24.10.1961, relying
on or on the basis of a decision of the High Court in Rameshwar Solanki and
..., Anr. v. Union of India and Anr., 57 (1995) DLT 410, further deductions@
D
-- 12% p.a. were directed to be made therefrom working out the amount of
compensation at Rs. 30 per sq. yard for lands without China Clay and Rs. 56
per sq. yard with China Clay.

Aggrieved by and dissatisfied with the said judgment and order, the
Union of India and the Delhi Development Authority are before us.
E
SUBMISSIONS :

The learned Additional Solicitor General appearing for the Appellants
raised the following contentions in support of these appeals:
./
(i) The nature of the lands being 'Gainnumkin Pahad' and 'Banjar
F
Kadim ', as described in the entries made in the revenue record of rights for
the years 1907 and 1908, the Respondents were entitled to such amount of
compensation only payable to a holder of Bhumidari rights in terms of the
provisions of the Delhi Land Reforms Act and no other, wherefor Sections
5, 6, 7, 11, 22, 23 and 154 thereof were required to be read conjointly. G
(ii) China Clay being a minor mineral, in tenns of the provisions of the
Mines and Minerals (Regulation and Development) Act, 1957 as also the
Punjab Minor Mineral Rules, I 934, the same having vested in the Central
Government; no compensation was payable therefor.
' H
62 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.
..-
A (iii) Judgments and awards made in favour of other claimants having
only evidentiary value, the principle of res judicata ·.vas wholly inapplicable.
Q

In any event as such judgments and awards were passed by courts
having no jurisdiction therefor; the principle of res judicata was not applicable.

B (iv) Even if ithi fo!\ind that any amount of comp~~sation was payable
• r•
to the Respondents herein, the High Court misdirected itself in· passing the
impugned judgment insofar as it failed to take into consideration that the
Respondents having made a claim _of Rs. 25 per sq. yard before the Land
Acquisition Collector were estopped and precluded from claiming any higher

c amount in view of Section 25 of the Land Acquisition Act, as it then stood.

(v) In view of the fact that the Respondents themselves prayed for stay
of the proceedings before the Reference Court, no interest was payable for
the period between 17th January, 1972 and 27th May, 1980.

D (vi) The High Court failed to take into consideration the fact that the ...
Respondents themselves purchased the land at the rate of Rs. 6 per sq. yard -
in the year 1960 and I/8th sha"e of the acquired land for a sum ofRs.36,000
in the year 1980 and the market value of the acquired lands should have been
determined only on that basis.

E (vii) In any view of the matter, as the appeal had been held to be not
maintainable by the High Court applying the principles of res judicata, the
cross objections filed by the Respondents were also not maintainable.

Mr. Harish Salve, Mr. P.P. Rao, and Mr. Ramamurthy, learned senior
counsel appearing on behalf of the Respondents, on the other hand, would
F support the impugned judgment.

At the outset we may notice that Mr. Salve conceded that the principles
of res judicata and/ or issue estoppel were not applicable to the fact of the
present case. The learned counsel would, however, point out that the High
Court in fact entertained the appeals preferred by the Appellants as regard :
G
(a) ownership of China Clay, (b) value of the land and (c) application of
Section 25 of the Act.

It was furthermore submitted :

(i) The Land Acquisition Act being an existing statute on the date of .,,
H c:
coming into force of the Constitution of India the right to property was a
U.O.I. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.) 63
~

fundamental right in terms of Article 19( 1)( f) and 31 of the Constitution of A
India when the notifications under Section 4 were issued and, thus all the
procedural requirements laid down therein were required to be scrupulously
complied with in fulfillment of the legislative purpose.

(ii) Section 25(2) of the Act has no application in the fact of the matter
as the High Court has arrived at a finding that 'admittedly no notice under B
Sections 9(3) and 10 was served on the Respondents', in which event only
the bar envisaged under Section 25(2) of the Act, would be attracted.

(iii) The Respondents having amended their Memo of Appeal as also
the Reference in terms of Order VI Rule 17 of the Code of Civil Procedure,
vis-a-vis Section 53 of the Act, the High Court had the requisite jurisdiction
c
to enhance the amount of compensation in favour of the Respondents.

(iv) The notifications issued by the Union of India were admissible in
evidence as no other admissible evidence was available on record.
,l D
(v) In view of the fact that the Respondents are armed with the four
decrees passed in their favour by courts of competent jurisdiction, it is not
open to the Appellant to contend that Bhumidhars had no right in the minor
mineral China Clay. Distinguishing the judgment of this Court in Gaon Sabha
and Anr. v. Nathi and Ors., JT (2004) 4 SC 36 : [2004] 12 SCC 555, the
learned counsel woutCl'::liubmit that the Respondents therein were not
E
Bhumidhars and, thus, the said decision must be held to have bew;rendered
in the fact situation obtaining therein. In any event, the question as regard
title is not an issue herein as the matters in relation thereto are pending
consideration, if any, before the High Court.
'·1
/ F
(vi) Mineral right contained in the land did not vest in the Government
in terms of Section 41 of the Punjab Land Revenue Act, 1887 and the said
right would be presumed to have vested in the recorded tenants in terms of
sub-section (2) of Section 42 thereof.

(vii) Punjab Minor Minerals Rules, 1934 and the Mines and Minerals G
(Regulation· and Development) Rules, 1957 or the Delhi Land Reforms Act,
1954 do not contain any provision divesting the right of the proprietor in the
minor minerals either expressly or by necessary implication and in that view
of the matter, the ownership on minor minerals continued to remain vested
in the landowners. H
SUPREME COURT REPORTS (2005) SUPP. 3 S.C.R.
64
..
A FACTUAL BACKGROUND:
As the fact of the matter has been noticed at some length by a
Constitution Bench in Sardar Amarjit Singh Katra (Dead) by LRs. and Ors.,
etc. v. Pramod Gupta (Smt.) Dead) by LRs. and Ors etc., (2003] 3 SCC 272,
it may not be necessary for us to traverse the same over again. Suffice it to
B notice that the Respondents herein claimed their right, title and interest in the
lands in question measuring 4307 bighas, 17 biswas from one Guiab Sundari
who was said to be the proprietor of M/s Kesri Pottery Works having a non-
occupancy tenancy right therein. It is not in dispute that several proceedings
had been initiated before different forums by Guiab Sundari on the one hand
C and the· Gaon Sabha of the village and the Union of India, on the other, in
respect of the right, title and interest of the respective parties after coming
into force of the Delhi Land Reforms Act.

The aforementioned Guiab Sundari had allegedly been declared
Bhumidhar by the Deputy Commissioner of Delhi.
D
It may be noticed that an intervention application has been filed on
behalf of Shri Madan Gopal Gupta and Shri Sudhir Jain contending that there
.. exists an inter se dispute as regard the ownership of the property in question
inasmuch as the applicants therein are proprietors/owners thereof. According
E to the said applicants the principal dispute between the parties is as to whether
·~ the said Guiab Sundari had had any right, title or interest as Bhumidhar or
otherwise in the said land and the same is pending determination before the
High Court of Delhi in RF A Nos. 309-310 of 1980. Briefly stated the
contention raised on behalf of the said applicants is that a lease was granted
by the proprietor in the year 1939 and the lessee in turn granted a sub-lease
F in favour of M/s Kesri Pottery Works, a partnership firm, in the year 1942.
The period of lease granted in favour of the lessee having expired, Guiab
Sundari ceased to have any interest in the property. In any event, a lessee or
a sub-lessee could not have been declared Bhumidhar in terms of Section 7
of the Delhi Land Reforms Act as only the proprietor of the village was
G entitled thereto and in that view of the matter the declaration of Bhumidhari
rights in favour of Guiab Sundari was wholly illegal and without jurisdiction.

The Appellants, however, contend that Guiab Sundari or for that matter
any person other than the Central Government or the Gaon Sabha in view of
the provisions contained in the Delhi Land Reforms Act, 1954 and other
H statutes, as referred to herein before, did not derive any right, title and interest
U.0.1. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.) 65
in the minor. minerals. In any event, right over mines and minerals in A
proprietors being limited under the provisions of the Punjab Land Revenue
Act, Punjab Minor Minerals Rules, 1934 and the Mines and Minerals
(Regulation and Development) Act, 1957, they did not derive any right to
exploit the area for commercial purposes and in that view of the matter, the
Reference Court and the High Court acted illegally and without jurisdiction
in computing the amount of compensation in respect of mineral rights on the B
premise that if they were entitled thereto.

PROCEEDINGS BEFORE THE REFERENCE COURT:

From the claim applications filed before the Reference Court, it appears
that there were five claimants, namely, Smt. Promod Gupta, Shri Rajiv Gupta, C
Sanjay Gupta, Smt. Sumangli Gupta and Shri LR. Gupta. However, in the
claim petitions Shri L. R.. Gupta did not put his signature. The Reference
Court in the proceedings under Section 18 of the Act framed the following
issues :
D
"(i) Whether the petitioners are the Bhumidars of the land in
dispute ?

.,,. (ii) To what enhancement in the amount of compensation, if any,
are the petitioners entitled?"

It was noticed : E

"One set of claimants in the reference against each award is Smt.
Parmod Gupta, Sri Ram Gupta, Mehar Chand Gupta and Babu Ram
Gupta and they jointly have claimed I/4th share in the land acquired
by these awards and the other set of claimants against each award F
was Surinder Gupta, who was substituted by Rattan Lall Gupta in
proceedings u/s 30/31 of the Act before Shri P.L. Singla. Now Rattan
Chand Gupta has been substituted by Rajiv Gupta, Sanjay Gupta,
Parmod Gupta and Sumangli Gupta. The first set of claimants, Sri
Ram Gupta, Mehar Chand Gupta and Babu Ram Gupta stand
substituted by Rajiv Gupta, Sanjay Gupta, Shri L.R. Gupta, Smt. G .·
Parmod Gupta and Sumangli Gupta being the members of the L.R.
Gupta HUF. They jointly have I/8th share in the land acquired by
both the awards."

The aforementioned five claimants, viz., Smt. Promod Gupta, Shri Rajiv
Gupta, Sanjay Gupta, Smt. Sumangli Gupta and Shri LR. Gupta have also H
66 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A been arrayed as Respondents in the appeals filed before the High Court by
the appellants herein.

RES JUD/CATA :

The principle of res judicata has been applied by the High Court in
B relation to two issues, viz., detennination of market value and title of the
Respondents in respect thereof.

We have noticed hereinbefore that Shri Salve conceded that the High
Court has committed an error in applying the principle of res judicata. Having
regard to the said concession, although it may not be necessary for us to
C delve deep into the said question but in view of the order proposed to be
passed by us, we think it fit and proper to deal briefly therewith.

A bare perusal of the judgments and awards passed by the Reference
Court would indicate that the amount of compensation was fixed on the basis
D of some judgments passed by the High Courts in matters which were said to
be involving similar lands.

DETERMINATION OF MARKET VALUE:

While determining the amount of compensation payable in restect of
E the lands acquired by the State, indisputably the market value therefor has to
be ascertained. There exist different modes therefor.

The best method, as is well-known, would be the amount which a
willing purchaser would pay to the owner of the land. In absence of any
direct evidence, the court, however, may take recourse to various other known
F methods. Evidences admissible therefor inter alia would be judgments and
awards passed in respect of acquisitions of lands made in the same village
and I or neighbouring villages. Such a judgment and award in absence of any
other evidence like deed of sale, report of expert and other relevant evidence
would have only evidentiary value.

G Therefore, the contention that as the Union of India was a party to the
said awards would not by itself be a ground to invoke the principles of res
judicata and/ or estoppel. Despite such awards it may be open to the Union
of India to question the entitlement of the claimants Respondents to the
amount of compensation and/or the statutory limitations in respect thereof. It
would also be open to it to raise other contentions relying on or on the basis .,.
H
.
U.O.l. v. PRAM OD GUPTA (D) BY LRS. [S.B. SINHA, J.] 67
of other materials brought on the records. It was also open to the Appellant A
to contend that the lands under acquisition are not similar to the lands in
respect whereof judgments have been delivered. The area of the land, the
nature thereof, advantages and disadvantages occurring therein amongst others
would be relevant factors for determining the actual market value of the
property although such judgments/ awards, if duly brought on records, as B
stated hereinbefore, would be admissible in evidence.

Even if the Union oflndia had not preferred any appeal against the said
judgment and award; it would not be estopped and precluded from raising the
said question in a different proceeding as in a given case it is permissible in
law to do the same keeping in view larger public interest. C
In Government of West Bengal v. Tarun K. Roy, [2004] l SCC 347
repelling the contention that the State is estopped from maintaining an appeal
while from a similar matter which has been implemented no appeal was filed,
it was observed :
D
"28. In the aforementioned situation, the Division Bench of the
Calcutta High Court manifestly erred in refusing to consider the
contentions of the appellants on their own merit, particularly, when
the question as regards difference in the grant of scale of pay on the
ground of different educational qualification stands concluded by a
judgment of this Court in Debdas Kumar!. If the judgment of Debdas E
Kumar is to be followed, a finding of fact was required to be arrived
at that they are similarly situated to the case of Debdas Kumar which
in turn would mean that they are also holders of diploma in
Engineering. They admittedly being not, the contention of the
appellants could not be rejected. Non-filing of an appeal, in any F
event, would not be a ground for refusing to consider a matter on its
own merits. (See State of Maharashtra v. Digambar.)

29. In State of Bihar v. Ramdeo Yadav, wherein this Court noticed
Debdas Kumar by holding: (SCC p. 494, para 4)

"4. Shri B.B. Singh, the learned counsel for the appellants, G
contended t~at though an appeal against the earlier order of the High
Court has not been filed, since larger public interest is involved in the
interpretation given by the High Court following its earlier judgment,
the matter requires consideration by this Court. We find force in this
contention. In the similar circumstances, this Court in State of H
A
68 SUPREME COU~T REPORTS [2005] SUPP. 3 S.C.R.

Maharashtra v. Digambar and in State of W.B. v. Debdas Kumar had
held that though an appeal was not filed against an earlier order,
-
when public interest is involved in interpretation of law, the Court is
entitled to go into the question.""

The principle of res judicata would apply only when the lis was inter-
B parties and had attained finality in respect of the issues involved. The said
principle will, however, have no application inter alia in a case where the
judgment and/or order had been passed by a court having no jurisdiction
therefor and/or in a case involving pure question of law. It will also have no
application in a case where the judgment is not a speaking one.

C The courts while determining the amount of compensation for acquisition
of land would be bound to take into consideration only the materials brought
on records. However, factors which would be relevant for determining the
amount of compensation would vary from case to case and no hard and fast
rule can be laid down therefor. The principle of res judicata will, therefore,
D have no application in the fact of the present matter.

RIGHT OVER MINES & MINERALS:

It may be true that the principles of res judicata may be applicable in
respect of the question of title but even for the said purpose it was obligatory
E on the part of the High Court to refer to the previous judgments whereupon
reliance had been placed by the Respondents for the purpose of arriving at
a decision as to whether they have been rendered by a competent court or
not. The question as to whether a civil court will have jurisdiction in respect
of declaration and /or cancellation of bhumidhari right was not adverted to
by the High Court. We may notice that this Court in Nathi (supra) held that
F in terms of the provisions of the Delhi Land Reforms Act, 1954 a person can
either be a Bhumidhar or Asami and there is no other class of proprietors or
tenure-holder after coming into force of the said Act. It was further opined:

"I I. I. Therefore, the legal position is absolutely clear that a person
can be either a bhumidhar or an asami of the agricultural land in a
G village. He can also be an owner of the property of the type which
is enumerated in Section 8 of the Act, like private wells, tanks, groves,
abadis, trees and buildings. Except for these, all other kinds of lands
and property would vest in the Gaon Sabha. The proprietors and the
concept of proprietors of land stands totally abolished with the
H enforcement of the Act. The respondents neither claimed to be
U.0.1. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.] 69
~

bhumidhar nor asami of the land which has been acquired. The A
acquired land does not come within the purview of Section 8 of the
Act. In such circumstances the only inference possible is that the land
stood vested with the Gaon Sabha on the date of the commencement
of the Act and it was the Gaon Sabha which was the owner thereof
and was entitled to receive the entire amount of compensation."
B
From the impugned judgment of the High Court, it does not appear that
' it had taken into consideration the relevant factors, viz., (i) implication of the
provisions of the Delhi Land Refonns Act vis-a-vis the nature of the land
and/ or the source of title; and (ii) the statutory effect as regard the claim of
the Respondent on the sub-soil mineral right in the light of several existing
statutes.
c
Even if the proprietors and consequently the bhumidhars were entitled
to mineral right, independently, the statutory interdicts limit the user of such
mineral. The question would have relevance not only for the purpose of
determination of the claim of ownership over such land and/ or mineral D
embedded therein but also the nature and extent 'thereof. Ordinarily, the
zamindar of the tauzi is the owner of the sub-soil mineral. Such zamindars
must be holders of revenue paying estate. If the zamindars had granted a
lease, the extent of right of lessee would depend upon the terms of the lease
and in absence of an express grant the lessee would have ~o right to work
quarries or mines other than those which were open when he entered. E
In F.F. Christian v. Tekaitni Narbada Koeri and Ors., (1914) CLJ (20)
527] where a maintenance grant was made for life, it was held that thereby
no right of mines and minerals had been conveyed, ,observing :

" ... This, it is contended, shows that the grantor Moharaj Singh was F
aware of the existence of mica mines when he made the maintenance
grant in 1894. Let such knowledge in his part be assumed for purposes
of argument; the fact is really inconclusive. The view may well be
maintained that if he intended to vest all the subsoil rights on the
grantee, he would have explicitly stated so, as he did in the mortgage
G
instrument of the 2nd December, 1889"

In Bageswari Charan Singh v. Kumar Kamakhya Narain Singh, (1931)
ILR (X) PC 296 : AIR (1931) PC 30, referring to the statutory presumption
as between zamindar and jagirdar, it was held that the former must be regarded
" as the owner of the minerals. It was further observed : H
70 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A " ... Apart from the statutory presumption arising in this case, there is
a general presumption that the land in a zamindari is the property of
the zamindar, and held under him"

Yet again in Ras Behari Manda! and Ors. v. Raja Jagadish Chandra
Deo Dhaubal Deb, (1936) JC 160 114, the Patna High Court reiterated the
B presumption that the lessor retains all rights in mines and quarries. It also
noticed the decision of House of Lords in Great Western Railway Co. v.
Carpal/a United China Clay Co. Ltd. ( 191 (J) AC 83, wherein a grant reserving
minerals was held to exclude a deposit of China clay despite the fact that the
same was found near the surface.
c In Jagat Mohan Nath Sah Dea v. Pratap Udai Nath Sah Deo and Ors.,
AIR (1931) PC 302, the Privy Council affirmed its earlier decision in Gobinda
Narayan Singh v. Sham Lal Singh, AIR (1931) PC 89 stating:

"A long series of recent decision by the Board has established that if
a claimant to subsoil rights holds under the zamindar or by a grant
D emanating from him, even though his powers may be permanent,
heritable and transferable, he must still prove the express irn;J,u.sion of
th~ subsoil rights."

[See· also H V. Low and Company ltd. v. Raja Bahadur Jyoti Prasad
E Singh Dea, AIR (1931) PC 299 and Onkarmal Agarwal/a and Ors. v. Bireswar
Hazra and Ors., AIR (1959) Calcutta 195 and Bageswari Charan Singh,
(supra)]

Yet again in Bejoy Singh Dudhoria v. Surendra Narayan Singh, (1929)
!LR 56 Cal. I, it was held that in absence of any reference to minerals or to ',
F the subsoil; or to the right to excavate for making bricks or to anything in the
deed of lease, even the patni tenure-holder did not derive any right in the
mines and minerals.

The provisions of Punjab Land Revenue Act govern the rights of the
tenants. Before us, the original deeds under which the right of proprietorship,
G if any, said to be created in favour of Smt. Guiab Sundari, in terms whereof
she became occupancy tenant as also the deeds of sale/ grants made in favour
of her predecessors have not been produced, in absence whereof it will not
be prudent for this Court to venture to arrive at a conclusion as regard the
nature of the right of the proprietor or the lessee as the case may be. Even
H the judgments and decrees passed by the civil courts and the revenue courts
U.0.1. v. PRAMOD GUPTA.(D) BY LRS. [S.B. SINHA, J.] 71

are not before us and, thus, this Court may only briefly indicate the legal A
position, the application whereof would depend on a finding of a court of
competent jurisdiction as regard the nature and extent of right.

Sections 41, 42(2), 60-C of the Punjab Land Revenue Act, 1887 read
as under:
B
"41. Right of the Government in mines and minerals. All mines of
f metal and coal, and all earth-oil and gold washings shall be deemed
to be the property of the Government for the purpose of the State and
the State Government shall have all powers necessary for the proper
enjoyment of the Government's rights thereto.
c
42. Presumption as to ownership of forests, quarries and waste land
(!)When in any record-of-rights completed before the eighteenth day
ofNovember, 1871, it is not expressly provided that any forest, quarry,
unclaimed, unoccupied, deserted or waste-land, spontaneous produce
or other accessory interest in land belong to the landowners, it shall D
be presumed to belong to the Government.

(2) When in any record-of-rights completed after that date it is not
expressly provided that any forest or quarry or any such land or
interest belongs to the Government, it shall be presumed to belong to
the landowners. E
(3) The presumption created by sub-section (I) may be rebutted by
showing:-

(a) from the records or report made by the assessing officer at the
time of assessment; or F
(b) if the record or report, is silent, then from a comparison between
the assessment of villages in which there existed, and the assessment
of villages of similar character in which there did not exist, any forest
or quarry, or any such land or interest.
G
That the forest, quarry, land or interest was taken into account in the
assessment of the land-revenue.

(4) Until the presumption is so rebutted, the forest, quarry, land or
interest shall be held to belong to the Government.
H
60-C. Power to issue instructions. The State Government or the
72 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A Financial Commissioner with the approval of the State Government
may, for the guidance of Revenue-officers, from time to time issue
executive instructions relating to all matters to which the provisions
of this chapter apply, provided that such instructions shall be consistent
with the provisions of this Act and the rules made thereunder."

B Section 60-C of the Punjab Land Revenue Act, 1887 empowers the
State to issue general instructions which are binding on the tenure-holders.
Pursuant to or in furtherance of the said power, the State of Punjab made
rules known as Punjab Minor Minerals Rules, 1934, Rules 3, 5 and 7 whereof
read, thus:
c "3. (1) No person shall quarry any minerals belonging to Government
from land, whether privately owned or otherwise included within any
revenue estate, or situated in land the property of Government not
included within the limits of a revenue estate, unless he has first
obtained a permit in the manner hereinafter prescribed.
D
(2) A person, not being a permit-holder, who is found in possession
of any recently quarried mineral, shall be deemed to have quarried
the said mineral without a permit, unless he furnishes proof to the
satisfaction of the Collector, that the said mineral was quarried by a
permit-holder.
E
5. Any person being an owner or occupancy tenant of agricultural
land desiring to quarry in the revenue estate within which his land is
situated for use within such revenue estate any mineral

(a) for his own personal, agricultural or domestic purposes, and not
F for alienation by sale or otherwise, nor for contract work; or

(b) for construction, otherwise than by contract, a hospital, school,
dharamsala, well, piao, tank, mosque, temple, or any other work of
public utility or religious worship, within the said estate,

G shall make an application in form M. I to the Collector either directly
or through the patwari of revenue estate. If the land. from ~hich the
mineral is to be quarried is not in the applicant's possession the
application shall also be signed by the owner or occupancy tenant
thereof as a token of consent.
H 7. (i) A person who desires to quarry minerals in circumstances other
than those related in paragraph 5 shall make his application to the
U.0.1. v. PRAM OD GUPTA (D) BY LRS. [S.B. SINHA, J.] 73

Collector. A
(ii) Every application by a contractor for quarrying minerals on behalf
of a Government Department or a local body shall be made to the
Collector in form M. 2, through the Executive Engineer or other
official of corresponding authority concerned, or through the Secretary
of the local body concerned, as the case may be. B

)
(iii) Application in cases other than those provided for in the rule 5
and in sub-rule (ii) of the rule, shall be made in form M. 3 ."

Validity of the said Rules has not been questioned by the Respondents
in an appropriate proceeding. c
Rule 3 is not applicable in the instant case. But in terms of Rule 5 even
if a mineral is found in the agricultural land, the sarne could be extracted only
for personal, agricultural or domestic purposes and not for any commercial
one including carrying out any contract. Even for the permissible purposes, D
an application for grant of permit was necessary. Assuming that the
Bhumidhars were entitled to the mineralright in the lands in question, minor
minerals could have been extracted therefrom only for their personal use and
that too after obtaining a requisite permit in terms of the Rules.

Government of India Act came into force in the year 1935. Entry 36 E
of List I of the Seventh Schedule contained in the Government of India Act
empowered the Governor General in Council to make laws relating to
regulation of mine and mineral development. Pursuant to or in furtherance of
the said power, Mines and Minerals (Development and Regulation) Act, 1948
was enacted; in terms of Section 4 whereof mining operation could be carried F
)
out only under a licence or lease to be granted in the manner prescribed
under the rules framed thereunder.

The Parliament thereafter enacted Mines and Minerals (Development
and Regulation) Act, 1957; section 4 whereof reads as under:
G
"4. Prospecting or mining operations to be under licence or lease.-
(1) No person shall undertake any reconnaissance, prospecting or
mining operations in any area, except under and in accordance with
the terms and conditions of a reconnaissance permit or of a prospecting
licence or, as the case may be, of a mining lease, granted under this
Act and the rules made thereunder: H
74 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A Provided that nothing in this sub-section shall affect any
•
prospecting or mining operations undertaken in any area in accordance
with the terms and conditions of a prospecting licence or mining
lease granted before the commencement of this Act which is in force
at such commencement:

B Provided further that nothing in this sub-section shall apply to
any prospecting operations undertaken by the Geological Survey of
India, the Indian Bureau of Mines, the Atomic Minerals Directorate
for Exploration and Research of the Department of Atomic Energy of
the Central Government, the Directorates of Mining and Geology of
c any State Government (by whatever name called), and the Mineral
Exploration Corporation Limited, a Government company within the
meaning of section 617 of the Companies Act, 1956:

Provided also that nothing in this sub-section shall apply to any
mining lease (whether called mining lease, mining concession or by
D any other name) in force immediately before the commencement of
this Act in the Union Territory of Goa, Daman and Diu.

(I A) No person shall transport or store or cause to be transported
or stored any mineral otherwise than in accordance with the provisions
of this Act and the rules made thereunder.
E
(2) No reconnaissance permit, prospecting licence or mining lease
shall be granted otherwise than in accordance with the provisions of
this Act and the rules made thereunder.

(3) Any State Government may, after prior consultation with the
F Central Government and in accordance with the rules made under
section 18, undertake reconnaissance, prospecting or mining operations
with r~spect to any mineral specified in the First Schedule in any area
within that State which is not already held under any reconnaissance
permit, prospecting licence or mining lease"
G In terms of Section 14 of the said Act, Sections 5 to 13 will have no
application in relation to minor minerals. Section 15 of the said Act empowers
the respective State Governments to make rules in respect of minor minerals.
Sub-section (2) of Section 15 provides that so long as no rules are framed by
the State in terms of sub-section (I) of Section 15 the old rules would continue
H to govern the field. Pursuant to or in furtherance of the said power, the State
of Punjab framed rules known as Punjab Minor Mineral Rules, 1964 in terms
,.,.
U.0.1. v. PRAM OD GUPTA (D) BY LRS. [S.B. SINHA, J.] 75
whereof the Punjab Minor Mineral Rules, 1934 were repealed. In terms of A
Rule 2 of the 1934 Rules China Clay was declared to be a minor mineral. The
State of Delhi, however, made rules only in the year 1969. Prior thereto,
presumably the rules made by the State of Punjab were governing the field.

The attention of the High Court and the Reference Court was not drawn
to the aforementioned statutes and the statutory rules. The application of the B
' said rules will go a long way in not only determining the question of res
judicata but also the question as regard to the limited nature of right the
Respondents under the aforementioned statutes, if any. Determination on the
said issues would be relevant for the purpose of computing the amount of
compensation. c
"Ownership" in respect of an immovable property would mean a bundle
of rights. Only a proprietor of a surface land will have the sub-soil right. But
such rights may also have certain limitations. Tenure holder or sub-tenure
holder and/or an agricultural tenant created for carrying out agricultural
operation per se would not become the owner of the sub-soil right. The right D
granted in favour of such sub-tenure holder, tenure holder or the agricultural
tenant would, thus, depend upon the concerned statute and/ or the relevant
covenants contained in the grant.

A three-Judge Bench of this Court in the State of Punjab v. Mis
Vishkarma and Co. etc.. JT (1993) 1 SC 448, construing the provisions of E
Sections 31, 41 and 42 of the Punjab Land Revenue Act, 1887, held :

"Brick-earth with which we are concerned in the present appeals,
j is a minor mineral was not disputed, although it is not any of the
mines or minerals covered by Section 41 of the Revenue Act as F
would make it become the property of the State. If the owner of such
brick-earth is the State of Punjab, liability to pay royalty for removal
of such brick-earth and to obtain permit or licence for such removal,
necessarily arises because of the operation of the Act and the Rules.
But the courts below have concurrently found that the brick-earth
concerned in the suits out of which the present appeals have arisen G
was in lands which formed the estates of the private owners and as
such the same belonged to such landowners. It is so found on their
reading of the entries in Wajib-ul-arz pertaining to the concerned

-- estates. That Wajib-ul-arz is a document included in the record-of-
rights cannot be disputed since it contains the statements on matters H
76 SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A envisaged under clauses (a) and (b) of sub-section (2) of Section 31
of the Act. According to the courts below Wajib-ul-arz document
being record-of-rights of estates completed after November 18, 1871,
and there being nothing expressly stated in them that the forest or
quarry or land or interest in the estates belong to the Government, the
lands in such estates including brick-earth in them shall be presumed
B to belong to the concerned landowners as is declared in sub-section
(2) of Section 42 of the Revenue Act."

From the aforementioned passage it is evident that the brick-earth was
the subject matter of transfer in favour of the land owners which was apparent
C from the entries in Wazib-ul-arz pertaining to the concerned estates.
The entry in the Wazib-ul-arz in the instant case reads as under:

"Section Detail Subject

D IO Ownership of the Nazul land or Except the 29 bighas land of road
Forest or without ownership or not any other land of Forest,
unpossessed or untitled or non- Mines, buildings, Nazal, self-
residential land or Mines or fertile, Marbal, metals, stones,
Ruins or old buildings or self- coal, sand is under the ownership ·
fertile and no other land which of the Government. But within the
E give natural fertility is situated bound ires of this village mountain
within the revenue estate village is stated to be existed. If the
Masood Pur. Government wants to take the
stone then the Govt. will not liable
to pay the price of that stone. If
F any mine is found then the same
will be property of the
Government. "

The evidentiary value of wazib-ul-arz is no longer res integra in view
of the decisions cited at the bat including Prem Chand v. State of Haryana,
G AIR (1972) (P&H) 50 DB; Man Chand v. State of Haryana, 74 ( 1972) PLR
508, Chunni Lal v. State of Haryana, 73 (1971) PLR 159, Gram Panchayat
v. State of Himacha/ Pradesh, AIR (1973) HP 7.

The said decisions lay down the principle that in absence of any entry
H made in favour of the Government, with respect to mines and minerals a
presumption shall be drawn that the same belongs to the landowner being a
U.0.1. v. PRAMOD GUPTA (D)BY LRS. [S.B. SINHA, J.] 77

tenure-holder. A
We have noticed hereinbefore a large number of decisions of the Judicial
Committee and different High Courts which lay down the principle that only
the landowners have subsoil rights but so fa'l',,as the sub-tenureholders and
others are concerned no such presumption shall be raised unless it is proved
from 'the express covenants made in the grant and/or the deed of assignment B
or sale that such right has expressly been conveyed. Section 42(2) of the
i Punjab Land Revenue Act merely states that in absence of any entry made
in the record-of-rights after 18.11.1971, it shall be presumed that the right in
any forests, quarries or any such land or interest would be in the landowners.
'Wazib-ul-arz' also indicates the custom prevailing in the village. The entry C
in the Wazib-ul-arz is categorical about the fact that the Government is not
the owner of any forest, mines, buildings nazul, self-fertile, marble, metals,
stones, coal or sand. It, however, categorically states that there are mountains
in the village and the Government can extract stones without paying any

.. price therefor. It further categorically states that if any mine (in future) is
found, the same would be the property of the Government. The entry ex facie D
does not show that china clay as a minor mineral was available in the land
in question. Existence of the said mineral having not been expressly recorded
in the record of rights, no presumption can be raised that the granter had an
intention to pass on title ofthe subsoil in relation to china clay in favour of
the grantee. It is one thing to say that the Government or the State did not E
have any right over the minor minerals per se but it is another thing to say
that the Government did not have any right in respect of the minerals or
metals which had been mentioned therein but in the event a new mine is
found, the same would vest in the Government. The presumption envisaged
J under sub-section (2) of Section 42, therefore, in our considered opinion may
not be raised in favour of the grantee as it is not shown that mines of china F
clay were existing at the relevant time. The expression 'Mine' having regard
to its definition contained in Section 20) of the Mines Act, 1952 is of wide
import. In the village in question there may exist one mine for extracting one
mineral at one point of time but other mines containing either the same or
different minerals might not be existing in other parts of the same village at G
the relevant time and may be found in other part of the village at the later
part of time. The expression 'mine', thus, may have to be given its natural
meaning having regard to the purpose for which such entries are made. It is

-
true that the legislature used two different phraseologies 'shall be presumed'
-----(
and 'may be presumed' in Section 42 of the Punjab Land Revenue Act and
furthermore although provided for the mode and manner of rebuttal of such G
78 SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A presumption as regards right to mines and minerals said to be vested in the
Government vis-a-vis absence thereof in relation to the lands presumed to be
retained by the landowners but the same would not mean that the words
'shall presume' would be_ conclusive. The meaning of expressions 'may
presume' and 'shall presurn~'have been explained in Section 4 of the Indian
B Evidence Act, 1874, from a perusal whereof it would be evident that whenever
it is directed that the court shall presume a fact it shall regard such fact as
proved unless disproved. In terms of the said provision, thus, the expression
'shall presume' cannot be held to be synonymous with 'conclusive proof'. It
is interesting to note that this Court in Raja Rajinder Chand v. Mst. Sukhi
and Ors., AIR ( 1957) SC 286 whereupon Mr. Rao has placed strong reliance
C observed:

" ...... Whether the statutory presumption attaching to an entry in the
Wajib-ul-arz has been properly displaced or not must depend on the
facts of each case. In cases under our consideration, we hold, for the
reasons already given by us, that the entries in the Wazib-ul-arz with
D regard to the right of the Raja in respect of chi! trees standing on .,
cultivated and proprietary lands of the adna-maliks, do not and cannot
show any existing custom of the village, the right being a sovereign
right; nor do they show in unambiguous terms that the sovereign
right was surrendered or relinquished in favour of the Raja. In our
view, it would be an unwarranted stretching of the presumption to
E hold that the entries in the Wajib-ul-arz make out a grant of a sovereign
right in favour of the Raja: to do so would be to hold that the Wajib-
ul-arz creates a title in favour of the Raja which it obviously cannot".

The said decision, therefore, is an authority for the proposition that no
F title can be claimed on the basis of an entry made in the revenue records as
it is for the grantee to show that such title has been conveyed to him by the
owner thereof.

We may, however, point out that in Mis Vishkarma and Co., (supra),
the effect of the provisions of the Punjab Minor Minerals Rules, 1934 or the
G provisions of the Mines and Minerals (Regulation & Development) Act, 1957
did not fall for consideration.

In Bheemagari Bhaskar and Ors. v. Revenue Divisional Officer, Bhongir
and Ors., (2002) I ALT 159 the Division Bench of the Andhra Pradesh High
Court, wherein one of us was a member, while analyzing the provisions of
H the A.P. (A.A.) Estates (Abolition and Conversion into Ryotwari) Act, 1948
U.0.1. v. PRAMOD GUPTA (D)BY LRS. [S.B. SINHA, J.] 79
vis-a-vis Mines and Minerals (Regulation and Development) Act, 1957 and A
A.P. Minor Mineral Concession Rules, 1966, held that the agriculturists could
not have had any right ov~r minor mineral stating:
,
"In terms ofEntry 54 of List I of the VII Schedule of the Constitution
of India, by enacting the said Act, the Parliament has taken over
control over mines and minerals. Keeping in view the declaration B
made in that regard under Sections 18 and 20 thereof, as envisaged
in Entry 54 <if List I of the VII Schedule of the Constitution of India,
the State has no legislative competence even to make any law in this
regard, far less grant any settlement except in terms of the provisions
of the said Act, for the rules framed therein."
c
In Shakuntala Devi v. Kamla and Ors., JT (2005) 4 SC 315, this Court
referring to various decisions of this Court including Mathura Prasad Bajoo
Jaiswal and Ors. v. Dossibai N.B. Jeejeebhoy, (1970] I SCC 613, Chief
Justice of Andhra Pradesh and Ors. v. l. V.A. Dixitulu and Ors., (1979] 2
SCC 34, Ashok Leyland Ltd. v. State of T.N. and Anr., (2004] 3 SCC 1, D
Management of Mis. Sonepat Cooperative Sugar Mills Ltd. v. Ajit Singh, JT
(2005) 2 SC 481 observed :

"15. From the above principles laid down by this Court, it is clear
that if the earlier judgment which is sought to be made t~e basis of
res judicata is delivered by a court without jurisdiction or is contrary E
to the existing law at the time the issue comes up for reconside'ration
such earlier judgment cannot be held to be res"jUtlfi:'Gta in the
subsequent case unless, of course, protected by any special enactment."

In Ramnik Vallab'hdas Madhvani and Ors. v. Taraben Pravinlal
Madhvani, (2004] I SCC 497, in which one of us (S.B. Sinha, J:) was a F
member, it was observed:

" ... Principles of res judicata is a procedural provision. The same has
no application where there is inherent lack of jurisdiction."

The question of application of principle of res judicata, thus, is required G
to be considered afresh in the light of the discussions made hereinbefore.

For the views we have taken, it is axiomatic, the principles of res
judicata shall have no application in respect of the cross-objections filed by
the Respondents. In that view of the matter, the decision of this Court in
Municipal Corporation of Delhi and Ors. v. International Security & H
80 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A Intelligence Agency Ltd, [2004] 3 SCC 250, relied upon by the Additional
Solicitor General, is not applicable.

PUNJAB LAND REVENUE ACT AND DELHI LAND REFORMS ACT:

The lands in question indisputably were governed by the Punjab Land
B Revenue Act, 1887 and the Punjab Tenants (Security of Tenure) Act, 1950.
The Punjab Land Revenue Act 1887 is still applicable save and except those
provisions which are inconsistent with the provisions of the Delhi Land
Refonns Act. The claim of the Respondents is stated in their counter-affidavit
filed in this Court. The Respondents claimed themselves to be occupancy
C tenants.

Punjab Land Revenue Act, I 887 was enacted to amend and declare the
law in force in the State of Punjab with respect to "making and maintenance
of record-of-rights in land, the assessment and collection of land-revenue and
other matters relating to land and the liabilities incident thereto". The said
D Act provides for preparation of record of rights of different types of land held
by the owners or tenure holders. For our purpose the definitions of "estate",
"land-owner" and "holding" may be noticed :

"(!) "estate" means any area

(a) for which a separate record-of-rights has been made; or
E
(bLwhich has been separately assessed to land revenue, or would
have bee.!1,,'1'o assessed if the land-revenue had not been released,
compounded for or redeemed; or

(c) which the State Government may, by general rule or special order,
F declare to be an estate;

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

(3) "holding" means a share or portion of an estate held by one land-
owner or jointly by two or more land-owners;"
H
U.0.1. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.] 81
Section 61 of the Land Revenue Act provided for security for payment A
of land revenue. In terms of the provisions thereof, the land owners need not
necessarily be the owners of the land. The term "land-owner" is a wider term
and it does not include a tenant as specifically mentioned in the definition.

What was the actual status of Smt. Guiab Sundari vis-a-vis her
predecessors is not known. B
Section 31 of the Punjab Land Revenue Act, 1887 provides for
preparation of record of rights and other documents in respect of an estate
including the nature and extent of the interest of the land owners and the
conditions and liabilities attached thereto. Section 32 provides for special C
provision for record of rights in the situations specified therein. Section 41
provides that minerals mentioned therein shall vest in the Government. Section
42, however, provides that when such right has not been stated to be vested
in the land owners, the same would be presumed to be belonging to the
Government although such presumption is not absolute. Sub-section (2) of
Section 42, however, states that when in any record of rights it is expressly D
provided that any forest or quarry or any such land or interest does not
belong to the Government, the same shall be presumed to be belonging to the
land owner.

In the aforementioned backdrop, the provisions of the Delhi Land
Reforms Act are required to be interpreted considered. E
The Delhi Land Reforms Act, 1954 was enacted to provide for
modification of zamindari system so as to create an uniform body of peasant
proprietors without intermediaries for the unification of the Punjab and Agra
systems of tenancy laws in force in the State of Delhi and to make provision
for other matters connected therewith. F

In terms of Section 2 of the said Act, the Punjab Tenancy Act, 1887 as
also the Punjab Land Revenue Act, 1887 are repealed insofar as they are
inconsistent with the said Act, the effect whereof would be that the right of
the land owners, proprietors, zamindars or other superior landlords which G
were conferred upon them under the provisions of the said two Acts would
no longer exist. The Delhi Land Reforms Act contemplates creation of a new

- right in two classes of the land owners, viz., only one class of tenure holder,
that is to say, Bhumidhar and one class of sub-tenure holder, that is to say,
Asami.
H
82 SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A We in this case are concerned with bhumidhari rights. A bhumidhar
would be a person who is liable to pay land revenue directly to the State.
Section 5 provides that every person belonging to any of the following classes
shall be a bhumidhar and shall have all the rights and be subject to all the
liabilities conferred or imposed upon a bhumidhar by or thereunder:

B "(a) a proprietor holding sir or khudkasht land a proprietor's grove
holder, an occupancy tenant under section 5 of the Punjab Tenancy
Act, 1887, paying rent at revenue rates or a person holding land
under Patta Dawami or lstamrari with rights of transfer by sale, who
are declared Bhumidhars on the commencement of this Act;

C (b) every class of tenants other than those referred to in clause (a) and
sub-tenants who are declared Bhumidhars on the commencement of
this Act; or

(c) every person who, after the commencement of this Act, is admitted
to land as Bhumidhar or who acquires Bhumidhari rights under any
D provisions of this Act."

Section 7 provides for termination of rights of individual proprietors as
specified therein. Such rights vest in Gaon Sabha. Section 11 provides for
declaration of bhumidhari rights by the Deputy Commissioner. Such
declaration is said to have been made in case of the aforementioned Smt.
E Guiab Sundari but it is not on record of the case. The effect of such declaration
is also required to be considered for the purpose of determining the questions
arising in these matters. Section 22 confers a right upon a bhumidhar in
exclusive possession of all land comprised in his respective holding so as to
enable him to use the land for any purpose connected with agriculture,
F horticulture or animal husbandry which includes pisciculture and poultry
farming and to make any improvement thereupon. Section 23 provides use
of holding for industrial purposes. Section 154 provides for vesting of certain
lands in Gaon Sabha.

By Section 185 a hierarchy of courts has been created for the purpose
G of determination of the question relating to rights and liabilities regarding
such lands in terms whereof the jurisdiction of the Civil Court is ousted for
certain purposes.

Interpretation of the provisions of the Delhi Land Reforms Act came up
for consideration before this Court in Nathi (supra). It opined that the Act
H contemplates only bhumidhari or asami right of an agricultural land in a
U.0.1. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.] 83
village subject of course to the i:.ight conferred upon them in terms of Section A
8 of the Act. It was held that Gair mumkin pahar land is not a khudkasht
land.

It may be true that as submitted by the learned counsel for the
Respondents that in that case the Respondent was not favoured with any
declaration of the bhumidhari right in terms of Section 11 of the Act nor the B
question of the effect of the provisions thereof as regard the right of the land
owner in relation to mines and minerals was raised, but there cannot be doubt
that therein the law as regard extent of right of a Bhumidhar has been
delineated.

The Act maintains a silence about the right of the land owners in C
respect of mines and minerals. In absence of the documents which would
throw a light on the right of Smt. Guiab Sundari, we think that it would not
be proper for us to determine the question finally and we must leave the
matter at the hands of the High Court for the said purpose. We may, however,
observe that such a question may have to be determined having regard to the D
provisions contained in Article 3 IA of the Constitution of India vis-a-vis the
repeal of the Punjab Land Tenure Act on one hand and the Delhi Land
Reforms Act, on the other. It is possible to hold that as by reason of the said
provision only limited rights were conferred upon them, all other rights stood
excluded. We, however, would clarify that as the said question has not been
raised specifically before us and keeping in view of the fact that Smt. Guiab E
Sundari might not have any proprietary rights over mines and minerals, as
had been claimed, having regard to the provisions of the Punjab Tenants
(Security of Tenure) Act, we would refrain ourselves from determining the
question dt this stage.
F
We may, however, notice a few decisions cited at the bar.

In Atma Ram v. State of Punjab, AIR (1959) SC 519, this Court
considered the conflict of opinion between two Full Benches of the High
Court of Punjab in Bhagirath Ram Chand v. State of Punjab, AIR 1954 Punj
167 and State of Punjab v. Keshar Singh, AIR (1959) Punj 8, holding that G
the view taken by the earlier Full Bench was correct. It was stated:

"12 .... The judgment of the Full Bench on this part of the case is
based entirely upon the definition of an estate, as contained in the
Punjab Land Revenue Act, set out above. It has not stopped to consider
the further question why a holding, which is a share or a portion of H
84 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A an estate, as defined in the Punjab Act, should not partake of the
characteristics of an estate. Keeping in view the background of the
legislative history and the objective of the legislation, is there any
rational reason for holding that the makers of the Constitution thought
of abolishing only intennediaries in respect of an area constituting
one entire estate but not of a portion thereof? On the other hand, as
B indicated above, they have used the expression "estate" in an all-
inclusive sense. They have not stopped at that; they have also added
the words "or any rights therein". The expression "rights" in relation
to an estate again has been used in a very comprehensive sense of
including not only the interests of proprietors or sub-proprietors but
c also of lower grade tenants, like raiyats or under-raiyats, and then
they added, by way of further emphasizing their intention, the
expression "other intermediary", thus, clearly showing that the
enumeration of intennediaries was only illustrative and not exhaustive.
If the makers of the Constitution have, thus, shown their intention of
saving all laws of agrarian reform, dealing with the rights of
D intennediaries, whatever their denomination may be, in our opinion,
no good reasons have been adduced in support of the view that portions
or shares in an estate are not within the sweep of the expression "or
any rights therein". A recent decision of this Court in the case of Ram
Narain Medhi v. State of Bombay, dealt with the constitutionality of
E the Bombay Tenancy and Agricultural Lands (Amendment) Act, 1956,
which contains similar provisions with a view to doing away with
intennediaries, and establishing direct relationship between the State
and tillers of the soil. In that case also, the contention had been raised
that the expression "estate" had reference to only alienated lands and
not to unalienated lands, and this Court was invited to limit the meaning
F of the expression in the narrower sense."

We are not suggesting, as at present advised, that mineral rights or
rights over minerals can in no situation remain in the hands of the private
individuals. There may be cases where having regard to the statutory
provisions, the mineral rights may continue to remain in the hands of the
G private owners. But while examining the question of computing the quantum
of compensation, the Courts are required to bear in mind the extent of such
rights and in particular the statutory provisions which prohibit carrying out
mining operations without obtaining appropriate mining lease, prospective
licence or permits. The Courts must also bear in mind that even in a case
H where owners are entitled to the minerals having regard to the provisions
U.0.1. v. PRAMODGUPTA (D) BY LRS. [S.B. SINHA, J.] 85
contained in the Punjab Minor Mineral Rules, 1934, the amount of A
compensation would be much less and with the acquisition of land the right
to use the minerals would come to an end. Compensation for such minerals
may not be computed on the basis of the profits earned by a mining lessee
having a valid mining lease therefor. Furthermore, a person having a right to
use mines and minerals for his personal use and not for sale will still have B
to obtain an appropriate permit in terms of the statutory provisions. It may
not be out of'place to notice that right to receive royalty is a mineral right
as has been held by Wanchoo, J. in Hingir Rampur Coal Co. Ltd. v. State of
Orissa, (1961] 2 SCR 537 [See also India Cement Ltd. and Ors. v. State of
Tamil Nadu and Ors, (1990] 1 SCC 12].

Mineral may be found in the mineral-bearing land. Mineral-bearing
c
land may, thus, contain mineral as the product of nature.

Thus, in a case it may be theoretically possible for the State to grant
a mining lease of quarry or permit, in favour of an applicant in respect of an
area over which a mineral right is also held by a private owner but in that D
event the private owner would be only entitled to royalty. The legislative
intent contained in the 1957 Act envisages that even in certain cases the
Central Government or the State Government, as the case may be, in the
event;~f their undertaking of mining operations from the land belonging to
the pri_vate owners may have to pay royalty to them. The rate of royalty,
however, will be limited to the amount prescribed in the 1957 Act or the E
rules framed thereunder

The amount of compensation, therefore, in view of the statutory
provisions will depend upon several factors, as noticed hereinbefore. In any
I
event, the profit earned by illegal mining i.e. carrying on mining operations F
contrary the 1957 Act or the rules framed thereunder, would by no means be
a safe criteria for determining the amount of compensation.

COMPENSATION

We have earlier noticed that one of the modes of computing the market G
value may be based on a judgment or award in respect of acquisition of
,; similar land, subject of course to such increase or decrease thereupon as may
be applicable having regard to the accepted principles laid down therefor and
as may be found applicable.

We may notice some precedents in this behalf: H
86 SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A In Delhi Development Authority v. Bali Ram Sharma and Ors., [2004]
6 sec 533], 5% increase in the market value was granted having regard to
the fact that the notification in question was issued about five years after the
notification involved in the earlier judgment.

In Land Acquisition Officer, Kammarapally Village, Nizamabad District,
B A.P. v. Nookala Rajamallu and Ors., [2003] 12 sec 334, it was observed :

"Where large area is the subject-matter of acquisition, rate at which
small plots are sold cannot be said to be a safe criterion"

It was further observed:
c " ...... While determining the market value of the land acquired it has
to be correctly determined and paid so that there is neither unjust
enrichment on the part of the acquirer nor undue deprivation on the
part of the owner. It is an accepted principle as laid down in .the case
of Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer,
D , that the compensation must be determined by reference to the price
which a willing vendor might reasonably expect to receive from the
willing purchaser... "
c', ,.

In Lila Ghosh (Smt.) (Dead) Through LR Tapas Chandra Roy v. Slate
of W.B., [2004] 9 SCC 337, a Division Bench of this Court has observed that
E if a plot is large, then there must be depreciation for largeness, as large plots
always fetch less than small plots. [See also Viluben Jhalejar Contractor
(Dead) By LRs. v. State of Gujarat, [2005] 4 SCC 789.

In V. Hanumantha Reddy (Dead) by LRs. v. Land Acquisition Officer
F and Manda! R. Officer, [2003] 12 SCC 642, the law is stated in the following
terms :

" .. .It is now a well-established principle of law that the land abutting
the national highway will fetch far more higher price than the land
lying interior"
G It is also well-settled that for the purpose of determining the market
value of the acquired lands, the comparable sales method i.e. the lands sought
to be compared must be similar in potentiality and nature may be adopted.
[See Panna Lal Ghosh and Ors. v. Land Acquisition Collector and Ors.,
r2004 J 1 sec 467].
H
U.O.l. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.) 87

It is also trite to state that the market value of agricultural land is lower A
than that of land suitable for commercial purposes [See Om Prakash (Dead)
By LRs. and Ors. v. Union of India and Anr., [2004] 10 SCC 627].

The Reference Court, it is trite, has to apply the comparable sales
method as also the situation of the land which is to be appreciated keeping
in view the fact as to whether acquired land is similar to any land sold in the B
vicinity.

In Shaji Kuriakose and Anr. v. Jndian Oil Corpn. Ltd. and Ors., [2001]
7 sec 650, this court observed:

"3. It is no doubt true that courts adopt comparable sales method of C
valuation of land while fixing the market value of the acquired land.
While fixing the market value of the acquired land, comparable sales
method of valuation is preferred than other methods of valuation of
land such as capitalisation of net income method or expert opinion
method. Comparable sales method of valuation is preferred because D
it furnishes the evidence for determination of the market value of the
acquired land at which a willing purchaser would pay for the acquired
land if it had been sold in the open market at the time of issue of
notification under Section 4 of the Act. However, comparable sales
method of valuation of land for fixing the market value of the acquired
land is not always conclusive. There are certain factors which are E
required to be fulfilled and on fulfilment of those factors the
compensation can be awarded, according to the value of the land
reflected in the sales. The factors laid down inter alia are: (I) the sale
must be a genuine transaction, (2) that the sale deed must have been
/
executed at the time proximate to the date of issue of notification F
under Section 4 of the Act, (3) that the land covered by the sale must
be in the vicinity of the acquired land, (4) that the land covered by
the sales must be similar to the acquired land, and (5) that the size
of plot of the land covered by the sales be comparable to the land
acquired. If all these factors are satisfied, then there is no reason why
the sale value of the land covered by the sales be not given for the G
acquired land. However, ifthere is a dissimilarity in regard to locality,
shape, site or nature of land between land covered by sales and land
acquired, it is open to the court to proportionately reduce the
compensation for acquired land than what is reflected in the sales
depending upon the disadvantages attached with the acquired land." H
88 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A [See also P. Ram Reddy and Ors v. land Acquisition Officer, Hyderabad
Urban Development Authority, Hyderabad and Ors., [1995) 2 SCC 305.j

The Courts will also have to take into consideration the enormity of the
financial implication of enhancement in view of the size of the land acquired
for a particular project.
B
In Viluben Jhalejar Contractor, (supra), this Court held :

"18. One of the principles for determination of the amount of
compensation for acquisition of land would be the willingness of an
informed buyer to offer the price therefor. It is beyond any cavil that
C the price of the land which a willing and informed buyer would offer
would be different in the cases where the owner is in possession and
enjoyment of the property and in the cases where he is not.

19. Market value is ordinarily the price the property may fetch in the
open market if sold by a willing seller unaffected by the special needs
D of a particular purchase. Where definite material is not forthcoming
either in the shape of sales of similar lands in the neighbourhood at
or about the date of notification under Section 4(1) or otherwise,
other sale instances as well as other evidences have to be considered.

20. The amount of compensation cannot be ascertained with
E mathematical accuracy. A comparable instance has to be identified
having regard to the proximity from time angle as well as proximity
from situation angle. For determining the market value of the land
under acquisition, suitable adjustment has to be made having regard
to various positive and negative factors vis-a-vis the land under
\
acquisition by placing the two in juxtaposition. The positive and
F
negative factors are as under:

Positive factors Negative factors

(i) smallness of size (i) largeness of area

G (ii) proximity to a road (ii) situation in the interior at a
distance from the road

(iii) frontage on a road (iii) narrow strip of land with
very small frontage compared
to depth
H
U.O.I. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.] 89
(iv) nearness to developed area (iv) lower level requiring the A
depressed portion to be
filled up

(v) regular shape (v) remoteness from developed
locality
B
(vi) level vis-a-vis land under (vi) some special disadvantageous
acquisition factors which would deter a
purchaser

(vii) special value for an owner of an adjoining property to whom it
may have some very special advantage C
21. Whereas a smaller plot may be within the reach of many, a large
block of land will have to be developed preparing a layout plan,
carving out roads, leaving open spaces, plotting out smaller plots,
waiting for purchasers and the hazards of an entrepreneur. Such
development charges may range between 20% and 50% of the total D
price."

It was further observed :

"24. The purpose for which acquisition is made is also a relevant
factor for determining the market value. In Basavva v. Sp/. Land E
Acquisition Officer1 deduction to the extent of 65% was made towards
development charges."

The Court noticed a large number of decisions wherein deductions had
been made at different rates varying from 20% to 53%. The Court also
I
noticed an earlier decision of this Comt in K.S. Shivadevamma v. Assistant F
Commissioner and Land Acquisition Officer, [1996] 2 SCC 62, wherein it
was opined :

"It is then contended that 53% is not automatic but depends upon the
nature of the development and the stage of development. We are
inclined to agree with the learned counsel that the extent of deduction G
depends upon development need in each case. Under the Building
Rules 53% of land is required to be left out. This Court has laid as
a general rule that for laying the roads and other amenities 33-1/3%
is required to be deducted. Where the development has already taken
place, appropriate deduction needs to be made. In this case, we do H
90 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A not find any development had taken place as on that date. When we
are determining compensation under Section 23(1), as on the date of
notification under Section 4( I), we have to consider the situation of
the land development, if already made, and other relevant facts as on
that date. No doubt, the land possessed potential value, but no
development had taken place as on. the date. In view of the obligation
B on the part of the owner to hand over the land to the City Improvement
Trust for roads and for other amenities and his requirement to expend
money for laying the roads, water supply mains, electricity etc., the
deduction of 53% and further deduction towards development charges
@ 33-113%, as ordered by the High Court, was not illegal."
c [See also Basavva (Smt.) and Ors. v. Sp/. Land Acquisition Officer and
Ors., [ 1996] 9 sec 640]

The High Court, as has been noticed hereinbefore, without assigning
any reason discarded the method of valuation adopted by the reference court.
D Before the reference court, the Respondents herein only relied upon the
judgments and awards granting compensation for acquisition of similar lands.
The High Court while allowing an application for adduction of additional
evidence referred only to certain notifications issued by the Union of India
in the year 1965 which were meant for the residential plots whereby allegedly
the market value was stated to be 150 per sq. yd. for lands situated at Vasant
E Vihar wherefor certain deductions were made @ 12% p.a. therefrom in respect
of the lands acquired under the notification dated 24. l 0.1961.

We fail to understand as to how or on what basis, the High Court took
recourse to the said method wholly ignoring the other materials on records.

F We may also obServe that the High Court failed to take into consideration
that recourse to such circulars may be impermissible and particularly in the
facts and circumstances of the present case.

In Jawajee Nagnatham v. Revenue Divisional Officer, Adilabad, A.P.
G and Ors., [1994] 4 sec 595], this Court observed :
"........ The market value of the land for proper stamp duty has to be
determined as per the law under Section 47-A itself. That view was
followed by another learned Single Judge in P. Sasidar v. Sub-
Registrar It is, therefore, clear that the Basic Valuation Register
H prepared and maintained for the purpose of collecting stamp duty has
U.0.1. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.] 91

no statutory base or force. It cannot form a foundation to determine A
the market value ~entioned thereunder in instrument brought for
registration. Equally it would not be a basis to determine the market
value under Section 23 of the Act, of the lands acquired in that area
or town or the locality or the taluk etc. Evidence of bona fide sales
between willing prudent vendor and prudent vendee of the lands B
acquired or situated near about that land possessing same or similar
advantageous features would furnish basis to determine market value."

See also in Krishi Utpadan Mandi Samiti, Sahaswan, District Badaun
through its Secretary v. Bipin Kumar and Anr., [2004] 2 SCC 283.

We may at this juncture notice a decision of this Bench relied upon by C
Mr. Harish Salve being DDA and Ors. v. Joginder S. Monga and Ors.,
[2004] 2 SCC 296. Therein this Court was not concerned with valuation of
land under the Land Acquisition Act. In that case DOA granted lease in
favour of a cooperative society in terms of the Delhi Development Act, 1957
and the rules framed thereunder, known as the Delhi Development Authority D
(Disposal of Developed Nazul Land) Rules, 1981. Some members of the
"
cooperative society intended to sell the land wherefor the DOA was entitled
to recover a portion of unearned increase in value i.e. difference between the
premium paid and market value of plot at the time of sale. The Government
of India, however without enforcing any increase in the sale price of the land
extended the validity of the land rates in force till 31.3 .1996 by a circular E
dated 11.11.1994. A case of discrimination was raised by Monga vis-a-vis
one Raj iv Gupta. Although the latter received the benefit of priority under the
policy of conversion from leasehold to freehold, the respondent therein was
denied the same. The said decision, therefore, will have no application to the
fact of the present matter, as therein 50% of the unearned increase was to be F
paid to the DOA in terms of the covenant contained in the deed of lease; and
while determining the amount DOA was required to take into account the
amount of consideration specified in the agreement and/or clearance certificate
issued by the Income Tax Officer, which was not done.

In Shakuntalabai (Smt.) and Ors. v. State of Maharashtra, [1996] 2 G
SCC 152, this Court categorically held that ifthe owner himself has purchased
some lands, the same should be taken into consideration having regard to the
admission on market value of the land made by him stating :

"5. It is seen that the reference court blissfully overlooked the
admission of the owner on the surmise that it is an estimate made by H
92 StJPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A the claimant and the evidence of the sale deeds under Exs. 38 and 44
being prevailing prices, it acted th~reon and determined the
compensation. The approach of the reference court is clearly illegal
and that of the High Court is quite correct and it was the only way
in which the market value could be determined on the face of the
evidence on record. The reference court committed manifest error in
B determining the compensation on the basis of sq. ft. When lands of
an extent of 20 acres are offered for sale in an open market, no
willing and prudent purchaser would come forward to purchase that
vast extent of land on sq. ft. basis. Therefore, the reference court has
to consider the valuation sitting on the armchair of a willing prudent
c hypothetical vendee and to put a question to itself whether in given
circumstances, he would agree to purchase the land on sq. ft. basis.
No feat of imagination is necessary to reach the conclusion. The
answer is obviously no. This aspect of the matter was totally ignored
by the reference court and mechanically accepted the two sale deeds
to enhance the compensation at a value of nearly Rs 35,000 per acre.
D In State of MP. v. Shantabhai and V.M Salgoacar & Brother Ltd
v. Union of India, this Court had accepted the principle that when the
owner himself has purchased the land under acquisition, the
consideration mentioned in the sale deed would form the basis to
determine the market value. Though the High Court has relied on the
E sale deeds under Exs. 65 and 66 relating to the lands in Nitya11and
Nagar Colony, it is also necessary to go into that aspect of the matter
in the view we have stated above."

Having noticed the legal principles, we are of the opinion that this case
merited a different treatment at the hands of the High Court. The land in
F question was acquired for a University. The University was constructed in a
large area. By reason of the two notifications in question alone, about 5000
bighas of lands were acquired. Out of the said 5000 bighas, the lands needed
for actual construction of the building may be a few bighas only. A large
portion of the land must have been kept vacant for future development as
also for other purposes e.g. sport and other activities. The area consisting of
G stones might not have been utilized for the purpose of raising any construction.
A portion of land admittedly contained minerals. A number of minerals were
said to be deposited in the land in question, namely, mica, berill quards and
china clay. The Respondents, however, having regard to the materials on
records confined their claim only to China clay. 19% of the total minerals
H bearing land is said to have been exploited. How far these minerals bearing
U.0.1. v. PRAMOD GUPTA(D) BY LRS. [S.B. SINHA, J.] 93

land were suitable for raising construction is a matter of guess. As per the A
evidence on record the minerals can be found upto a depth of 60 ft. It is not
necessary for us to go into this question in details as the High Court did not
advert thereto. But suffice it to say that for the purpose of carrying out
mining operation, the Respondents were required to comply with the safety
provisions contained in the Mines Act, 1952 'and the rules and regulations
framed thereunder. B
The Reference Court and the High Court unfortunately did not consider
the question as to what amount was required to be expended for bringing the
said area back to the normal so as to enable the University authorities to raise
construction thereon. Minerals were evidently taken out by taking recourse C
to the quarry method, but there is no evidence adduced by the Respondents
to show that the pits caused by such mining activities have already been
filled up.
We have been taken through the evidence adduced on behalf of the
Respondents. The witnesses examined on behalf of the Respondents did not
state as to when the pits had been filled up or what was the costs incurred D
. therefor. It is also difficult to rely on the said evidence as witnesses examined
on behalf of the Respondents were not expert witnesses. No document has
. also been filed in support of the case of the Respondents. Mr. Ramamurthi
when confronted with this question, conceded that there does not exist any
satisfactory evidence on the said issue. ··-E'
In fact the Reference Court or the High Court did not address themselves
on the question that the market value of the acquired lands was required to
be determined having regard to the largeness of area and the purpose for
) which they are required, namely, for the University and not for the development
of the township or the residential colony wherefor different standards may F
have to be adopted. The Reference Court and the High Court should have
also taken into consideration the fact that the lands in question being of
different categories would fetch different prices and same price might not
have been available for all types of lands. Recourse taken by the High Court
to the circulars issued for the lands acquired for residential purpose only
therefore will have no application in the facts and circumstances of the present G
case.

PAYMENT OF INTEREST DURING THE PERIOD 17TH JANUARY, 1972
TO 27TH M4Y, 1980
It is not in dispute that the proceedings between 17th January, 1972 to H
94 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A 27th May, 1980 remained stayed on the representation of the Respondents
that they would not be claiming interest at the enhanced amount of
compensation, if any, during the period of stay. By an order dated I ?th
January, 1972, the Refer~ncec..Court recorded:
. •:"! h·
"Shri Gupta learned Counsel for the petitioners states that the petition
B may be st~yed sin~ die and that the petitioner would not be claiming
any interest on the enhanced amount of compensation money, if any,
for the period of stay. Counsel for UOI has no objection to the proposed
. stay on the terms stated. I would accordingly stay the proceedings in
this case sine die on the condition that no interest will be awarded to
the petitioners on the enhanced compensation which may be eventually
c granted to him, for the period of stay."

Similar orders were passed on 25th February, 1981 and 5th March,
1923 in Land Acquisition Case Nos. 189/81 and 188/81 respectively.

D It appears that in the reference arising out of the award No. 2225 Smt.
Pramod Gupta and Ors. v. Union of India and Ors., proceedings were stayed
suo moto by the court, presumably having regard to the orders passed in
other cases.

The contention of the Appellant was negatived on the ground that
E Sections 28 and 34 being imperative in character the purpmted undertaking
/representation made on behalf of the Respondents would not amount to
estoppel or waiver.

Sections 28 and 34 of the Act read as under:
\
"28. Collector may be directed to pay interest on excess
F
compensation.-[[ the sum which, in the opinion of the court, the
Collector ought to have a awarded as compensation is in excess of
the sum which the Collector did award as compensation, the award
of the Court may direct that the Collector shall pay interest on such
excess at the rate of nine per centum per annum from the date on
G which he took possession of the land to the date of payment of such
excess into Court.

Provided that the award of the Court may also direct that where such
excess or any part thereof is paid into Court after the date of expiry
of a period of one year from the date on which possession is taken,
H interest at the rate of fifteen per centum per annum shall be payable
U.0.1. v. PRAM OD GUPTA (0) BY LRS. [S.B. SINHA, J.] 95
from the date of expiry of the said period of one year on the amount A
of such excess or part thereof which has not been paid into Court
before the date of such expiry.

34. Payment of interest.-When the amount of such compensation is
not paid or deposited on or before taking possession of the land, the
·, Collector shall pay the amount awarded with interest thereon at the B
rate of nine per centum per annum from the time of so taking
possession until it shall have been so paid or deposited.

Provided that if such compensation or any part thereof is not paid or
deposited within a period of one year from the date on which
possession is taken, interest at the rate of fifteen per centum per C
annum shall be payable from the date of expiry of the said period of
one year on the amount of compensation or part thereof which has
not been paid or deposited before the date of such expiry"."

It may not, thus, be correct to contend that the said provisions are so
imperative in character that waiver thereof is impermissible in law or would D
be against public interest. Grant of interest in terms of Section 28 of the Land
Acquisition Act is discretionary. Only rate of interest specified therein is
mandatory. Section 34 of the Act ex facie, however, appears to be imperative
in character as the word 'shall' has been used. A discretion vested in the
court, it is trite, may not be exercised where the right to cfaim interest has E
been waived expressly by the parties and/or their counsel. Even a mandatory
provision of a statute can be waived. . ''"·· ·•· 'l
.-.,_;;,1J. _"\; •

The effect of Section 28 of the Act came up for consideration before
I this Court in Raghubans Narain Singh v. The Uttar Pradesh Government,
through Collector of Bijnor, AIR (1967) SC 465 wherein this Court held the F
said provision to be discretionary in character observing that it is for the
court to consider whether in the facts and circumstances of the case, such
interest should be directed to be paid at all. It is now trite that the court
having regard to the facts and circumstances of a particular case as, for
example, where there is a short interval between the award and the payment, G
may not direct grant of any interest.

The question came up directly for consideration before a Division Bench
of this Court in State of Assam and Anr. v. Jitendra Kumar Senapati and
Ors., AIR (1981) SC 969: [1981] 2 SCC 221 wherein the claimants agreed
to the amount awarded to them subject to Government making payment H
96 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A within the 31st March, 1969 stating:
"We further agree that we will make no further claim in regard to
compensation for the same land provided actual payment is received
. within the above period of 31st March, 1969"

B In that case, before the High Court a plea was raised that the
representation of the claimants was confined to the amount of compensation
but the High Court negatived the same stating:

"Although it is true that in the agreement dated February 24, 1969
. which the respondents signed and sent to the government along with
C their letter of that date they stated that they would not make any
further claim in regard to "compensation", but that expression, in our
opinion, was clearly used by them not in the sense in which it is used
in Sections 23 and 34 of the Act but more comprehensively, meaning
reimbursement in full satisfaction of their claim in respect of the
acquisition. That this was so was made clear in the letter addressed
D to them by the Under-Secretary in which he expressly stated that
"you and your co-sharers will make no further claim for the land thus
acquired by the Government".

The Under-Secretary did not use the word "compensation" in his
letter nor did the respondents use it in their reply in which, on the
E .·' other hand, they made a grouse of the hardship which the delay in
·payment had caused to them and brought it to the pointed attention
of the Under-Secretary that immediate payment was an essential part
cif the bargain. In the agreement signed by them (as pointed out ·
above) they. no doubt used the word "compensation" but they added \
F that they would make no further claim in regard to it if actual payment
was received by them before March 31, 1969. The condition thus
attached by them to the agreement would show that by the acceptance
of the quantified sum of Rs 4,41,202.45 they condoned the delay in
payment and also relinquished all future claims to interest. If it were
otherwise, there is no reason why the respondents would not have
G expressly reserved their right to claim interest under Section 34 of the
Act. The tenor of the two letters coupled with the agreement leads to
no other conclusion."

H
It is not in dispute that if a person alters its position pursuant to the
representation made by the other side, the principles of estoppel wo~ld be
-
,
U.0.1. v. PRAMOD GUPTA (D)BY LRS. [S.B. SINHA, J.] 97

applicable and by reason thereof, the person making the representation would A
not be allowed to raise a plea contra thereto. In Krishna Bahadur v. Puma
Theatre and Ors., [2004] 8 SCC 229 this Court held:

"9. The principle of waiver although is akin to the principle of estoppel;
the difference between the two, however, is that whereas estoppel is
not a cause of action; it is a rule of evidence; waiver is contractual B
and may constitute a cause of action; it is an agreement between the
parties and a party fully knowing of its rights has agreed not to assert
a right for a consideration.
'(

10. A right can be waived by the party for whose benefit certain
requirements or conditions had been provided for by a statute subject C
to the condition that no public interest is involved therein. Whenever
waiver is pleaded it is for the party pleading the same to show that
an agreement waiving the right in consideration of some compromise
came into being. Statutory right, however, may also be waived by his
conduct."
D
[See also Vijay Cotton and Oil Mills Ltd. v. The State of Gujarat,
(1969] 2 SCR 60 at 63].

Yet again recently in State of Karnataka and Anr. v. Sangappa Dyavappa
Biradar and Ors., [2005) 4 sec 264, the principles of estoppel was applied E
in relation to a consent award holding that once a consent award had been
passed, the claimants were precluded from applying for a reference under
Section 18 of the Act.

The High Court has relied upon a decision of this Court in Suptd. Of
Taxes, Dhubri and Ors. v. Mis. Onkarmal Nathmal Trust, AIR (1975) SC F
2065 : [1976] I sec 766. In that case the proceedings were not stayed
pursuant to any undertaking or representation made by the claimant. The
order of interim injunction was passed whereunder the claimants enjoyed
certain benefits and in that fact situation the plea of waiver was raised. The
Constitution Bench observed:
G
"23. The third contention of the Solicitor-General is that the .
respondents waived service of a notice within two years of the expiry
of the return period by reason of the order of injunction obtained by
them. Waiver is either a form of estoppel or an election. The doctrine
of estoppel by conduct means that where one by words or conduct H
98 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A wilfully causes another to believe in the existence of certain state of
things and induces him to act on that belief, or to alter his own
previous position, the former is concluded from averring against the
latter a different state of things as existing at that time. The fundamental
requirement as to estoppel by conduct is that the estoppel must concern
an existing state of facts. There is no common law estoppel founded
B on a statement of future intention. The doctrine of promissory estoppel
is applied to cases where a promiser has been estopped from acting
inconsistently with a promise not to enforce an existing legal
obligation. This doctrine differs from estoppel properly so called in
(·
that the presentation relied upon need not be one of present fact. The \
c second requirement of an estoppel by conduct is that it should be
unambiguous. Finally, an estoppel cannot be relied on if the result of
giving effect to it would be something that is prohibited by law.
Estoppel is only a rule of evidence. One cannot found an action upon
estoppel. Estoppel is important as a step towards relief on the
hypothesis that the defendant is estopped from denying the truth of
D something which he has said."

The ratio of the said decision, therefore, runs counter to the opinion
of the High Court. In that case a question as regard the jurisdiction of the
court was raised as is explicit from the following observations:

E "28. In the present case, the respondent cannot be said to have waived
the provisions of the statute. There cannot be any waiver of a statutory
requirement or provision which goes to the jurisdiction of assessment.
The origin of the assessment is either an assessee filing a return as
contemplated in the Act or an assessee being called upon to file a
F return as contemplated in the Act. The respondents challenged the
Act. The order of injunction does not amount to a waiver of the
statutory provisions. The issue of a notice under the provisions of the
Act relates to the exercise of jurisdiction under the Act in all cases.
Revenue statutes are based on public policy. Revenue statutes protect
the public on the one hand and confer power on the State on the
G other."

It is, therefore, not correct to contend that there cannot be any waiver
of the right to claim interest. Statutory provisions are made for payment of
interest with a view to compensate a party who had suffered damages owing
to a positive action or inaction of the other resulting in blockade of money
H which he would otherwise have received. A party who himself represents e
U.0.1. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.) 99
before the court of law that he would not claim interest with a view to obtain A
an order of stay which would be for his own benefit, in our opinion, could
not be permitted to take advantage of his own wrong. [See Sushi/ Kumar v.
Rakesh Kumar, [2003] 8 SCC 673 and Laxminarayan R. Bhattad and Ors. v.
State of Maharashtra and Anr., [2003] 5 SCC 413.

Even otherwise it is now well-settled that a person cannot be made to B
suffer owing to an action by the Court. (Actus curiae neminem gravabit) [See
Ram Chandra Singh v. Savitri Devi and Ors., [2003] 8 SCC 319 and Board
of Control For Cricket in India and Anr. v. Netaji Cricket Club and Ors.,
[2005J 4 sec 741].

We, therefore, are of the view that the High Court committed a manifest
c
error in allowing interest for the said period. In fact, Mr. Ramamoorthy,
learned senior counsel appearing for the Respondents frankly conceded that
interest for the said period shall not be payable.

We are not oblivious of various decisions of different High Courts D
taking one view or the other as regard the mandatory or directory character
of Sections 28 and 34 but in view of our findings aforementioned, it may not
be necessary to advert thereto.

APPLICABILITY OF SECTION 25 OF THE ACT
E
It is not in dispute that in the proceeding giving rise to Award No. 2040
dated 2.12.1967 a claim was made by the Respondent - Smt. Pramod Gupta
claiming compensation to the extent of I/4th share in the entire land. It has
also not been disputed before us that Section 25 contains a substantive
provision of law and not a procedural one and, thus, the statutory provision
as it existed prior to its amendment in the year 1984 shall apply. [See Land F
Acquisition Ofjicer-cum-DSWO, A.P. v. B. V Reddy and Sons, [2002] 3 SCC
463 and Krishi Utpadan Mandi Samiti v. Kanhaiya Lal and Ors., [2000] 7
sec 756].
Section 25 of the Act, as it stood prior to its amendment reads:
G
"25. Rules as to amount of compensation.-{ I) When the applicant
has made a claim to compensation, pursuant to any notice given
under Section 9, the amount awarded to him by the court shall not
exceed the amount so claimed or be less than the amount awarded by
the Collector under Section 11.
H
100 SUPREME COURT REPORTS [2005] SUP!". 3 S.C.R.

A (2) When the applicant has refused to make such claim or has omitted
without sufficient reason (to be allowed by the Judge) to make such
claim, the amount awarded by the court shall in no case exceed the
amount awarded by the Collector.

(3) When the applicant has omitted for a sufficient reason (to be
B allowed by the Judge) to make such claim, the amount awarded to
him by the court shall not be less than, and may exceed, the amount
awarded by the Collector."

The High Court negatived the contention of the Appellant in regard to
the bar under sub-section (2) of Section 25 of the Act opining :
c
(i) For attracting the said provision service of notice upon the occupier
or the person interested as envisaged under Section 9(3) is mandatory and
admittedly no notice under Sections 9 and l 0 had been served by the Collector
upon the Claimant-Respondent.

D (ii) Having regard to the Parliamentary amendment carried out by reason
of Land Acquisition Act, 1984, the bar ceases to exist.

(iii) In view of the decision of this Court in Bhag Singh v. Union
Territory of Chandigarh, AIR ( 1985) SC 1576 and Union of India and Anr.
E v. Raghubir Singh (dead) by L.R.s etc., JT (1989) 2 SC 427, it becomes
obligatory upon the State to pay compensation on the basis of the market
value of the land acquired and in particular having regard to the judgments
of the courts operating in the field.

It is not necessary for us to dilate on the second and third reasonings
F of the High Court in view of the authoritative pronouncement of the court in
B. V. Reddy (supra) wherein the applicability of unamended provision of
Section 25 in a case arising prior to amendment has been upheld.

So far as non-service of notice under Sub-section (3) of Section 9 is
concerned, we may, however, notice that in the awards of the Collector, it
G was categorically stated that the notice under Sections 9 and I 0 of the Act
had been issued. Before the High Court only the records of the Reference .·
Court were available. The learned counsel appearing on behalf of the
Respondents stated before us that the fact as to whether such notices had
been served or not could only be ascertained from the records of the Collector.

H Although the question as regard service of notice is a pure question of
U.0.1. v. PRAMOD GUPTA (D) BYLRS. [S.B. SINHA, J.] 101
fact, we may observe that the said question may have to be answered keeping A
in view certain legal principles, viz., (i) the object for which Section 9 has
been enacted; (ii) the situation in which the Respondent had filed a claim
having knowledge of the proceedings under the Land Acquisition Act as also
service of notice in terms of Sub-section (I) of Section 9 thereof; (iii) service
of notice under Sub-section (I) of Section 9 together with service upon those B
persons may substantially serve the purpose; and (iv) the prejudice doctrine.

In the report submitted before the Reference Court, the Land Acquisition
Collector stated that such notices had been served. Presumption, thus, may be
raised as regard their proper service.

In Uggar Sen Kashyap v. Union of India and Ors., (1973) 9 DLT 59, C
the Delhi High Court held that if the petitioner has taken part in a proceedings
although the claimant has not been served with any notice, he cannot raise
any grievance in this behalf. In a situation of this nature, even the doctrine
of prejudice may be invoked [See State of Punjab v. Sawaran Singh, (2005)
5 SCALE 601]. D
We may furthermore notice that in Sureshchandra C. Mehta v. State of
Karnataka and Ors., [1994] Supp 2 SCC 511, this Court held that service of
notice upon the recorded persons whose names appear in the revenue records
only would subserve the purpose for which notice is required to be served.
E
In a case where the Calcutta High Court distinguished the said decision
arising out of the West Bengal Land (Requisition and Acquisition) Act, 1948
stating that the said decision was not applicable having regard to the statutory
provisions contained in Section 17(5) of the Bangalore Development Authority
Act, 1976, this Court in W.B. Housing Board and Ors. v. Brijendra Prasad
Gupta and Ors., [1997] 6 SCC 207 differing with the view of the Calcutta F
High Court opined:

"21 ...... The Calcutta High Court in the impugned judgment
distinguished this judgment of the Supreme Court in Sureshchandra
C. Mehta case on the ground that in that case the law itself prescribed G
notice to be served on a person whose name was entered in the
revenue record. But the observations of the Supreme Court in that
case that "the authority is not required to make a roving inquiry as
to who is the person entitled to a notice" is quite apt and has to be
given due weight and consideration."
H
A
102 SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

Although the question is to be considered by the High Court afresh, we
..
may point that in the event it is found that the unamended provision of
Section 25 of the Act is held to be applicable, the High Court could not have
awarded compensation <it the rate of Rs. 98 per sq. yard whereas the claim
was made only for Rs. 25 or Rs. 50 per sq. yard by the claimants.

B At this juncture, it would also be relevant to note that before the
Reference Court the Respondents made their claim only on the basis of
certain awards/judgments made by the Reference Court/High Court. Before
the Reference Court in relation to the notification dated 24.10.1961 it was
contended that the compensation at the rate of Rs. 12,000 per bigha should
C have been awarded by the Land Acquisition Collector. It is true that a faint
argument was advanced before the Reference Court that the lands under
acquisition were superior to those situated in Munirka and Ber Sarai. Even
for the purpose of determination as regard superior quality of land under
acquisition vis-a-vis the lands situated in the villages which were the subject
matter of the other acquisition cases, it was obligatory on the part of the High
D Court to consider the contra plea raised by the Appellants herein. Furthermore,
it was also obligatory on the part of the High Court to consider the question
that a pati of the lands consisted of hills and furthermore pits have been dug
up while extracting minerals; the same may not be equated with the land,
which had potential for building purposes. The High Court in its impugned
E judgment has not adverted to this aspect of the matter at all.
It is relevant to notice the following observati9ns of the Reference
Court:

"But even if we take that the land in dispute is superior to the land
acquired in village Ber Sarai because of the factors pointed out above
F by the Id. Counsel for the claimants, the claimants cannot be given
compensation at a rate higher than Rs. 12,000 per bigha because the
claimants have not been able to produce any evidence on record with
regard to higher compensation having been given in respect of any
other superior land in village Munirka or Ber Sarai nor is there any
G measure to increase the compensation over and above Rs. 12,000 per
bigha because of the superiority of this land over the land in village
Munirka and Ber Sarai."

Nothing has been shown before the High Court that the said findings
of the Reference Court were unfounded. The High Court in its judgment has
H proceeded computing the amount of compensation on the basis of the circle
U.0.1. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.] 103
rates without considering this aspect of the matter. A
AMENDMENT OF REFERENCE AND ADDITIONAL EVIDENCE :

It has not been disputed before us that the claimant Smt. Pramod Gupta
purchased I/4th share of the land in question by a deed dated 14.4.1960. The
Appellants filed an application under Order 41, Rule 27 of the Code of Civil B
Procedure for bringing xerox copy of the said sale deed on records but the
same was rejected inter a/ia on the ground that prior thereto no effort was
made to rely upon the said sale deed.

It is now well-settled that if an owner himself has purchased the land,
the same would be the best evidence for· determining the amount of C
compensation. [See Shakuntalabai, (supra)]

The High Court furthermore committed a serious error in coming to the
conclusion that the said deed was executed prior to the date of acquisition
inasmuch as the notification under Section 4 was issued on 24.10.1961.
D
It further appears that Shri Rajiv Gupta purchased I/8th share of the
amount of compensation payable to his predecessors-in-interest for a sum of
Rs. 30,000 by a deed of sale dated 23.1.1980, a copy whereof has been
annexed with I.A. 8 of 2005.

We have noticed hereinbefore that before the Land Acquisition Collector E
the Respondents had claimed only a sum of Rs. 12,000 per bigha. Despite the
same the Respondents filed an application purported to be under Order 6,
Rule 17 of the Code of Civil Procedure praying for amendment of Memo of
Appeal and the Reference claiming higher compensation. The Respondents
appear to have further filed applications under Order 41, Rule 27 of the Code F
for adduction of additional evidence in support of their amended claim. The
High Court while rejecting the claim application filed by the Appellants
allowed the application for amendment as also the application for adduction
of additional evidence filed by the Respondents.

Mr. Salve submitted that the bar under Section 25 of the Act must be G
considered having regard to Section 53 thereof which provides for applicability
of the provisions of the Code of Civil Procedure. The learned counsel urged
that the Respondents had already filed an application for amendment of Memo
of Appeal in terms of Order 41, Rule 3 of the Code of Civil Procedure, which
having been allowed, would amount to amendment of the claim application H
104 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A in the reference case itself. Strong reliance in this behalf has been placed on
Harcharan v. State of Haryana, [1982] 3 SCC 408 and Ghaziabad
Development Authority v. Anoop Singh and Anr., [2003] 2 SCC 484.

We do not agree. The pleadings before the Trial Court are the basis for
adduction of evidence either before the Trial Court or before the Appellate
B Court. By amending the memo of appeal the original pleadings cannot be
amended. The claimants - Respondents made their claim before the Reference
Court claiming compensation for the lands acquired under two different
references at a certain rate. They are bound by the said pleadings. Section 53
merely provides for applicability of the provisions of the Code of Civil
C Procedure including the one containing Order 6, Rule 17 thereof. Order 6,
Rule 17 of the Code of Civil Procedure postulates amendment of pleadings
at any stage of the proceedings. Before an amendment can be carried out in
terms of Order 6, Rule 17 of the Code of Civil Procedure the court is required
to apply its mind on several factors including, viz., whether by reason of such
amendment the claimant intends to resile from an express admission made by
D him. In such an event the application for amendment may not be allowed.
[See. Mis. Modi Spinning & Weaving Mills Co. Ltd. and Anr. v. Mis. Lad.ha
Ram & Co. AIR (1977) SC 680, Heeralal v. Kalyan Mal and Ors., [1998]
I SCC 278] and Sangramsinh P. Gaekwad and Ors. v. Shantadevi P. Gaekwad
(Dead) thr. LRs. and Ors., JT (2005) l SC 581].

E Delay and !aches on the part of the parties to the proceedings would
also be a relevant factor for allowing or disallowing an application for
amendment of the pleadings. The High Court neither assigned sufficient or
cogent reasons nor applied its mind as regard the relevant factors while
allowing the said application for amendment. It has also not been taken into
p consideration that the application for amendment of pleading might not have
been maintainable in view of statutory interdict contained in Sub-section (2)
of Section 25 of the Act, if the same was applicable.

In Anoop Singh, (supra), whereupon reliance has been placed by Mr.
Salve, the Division Bench of this Court did not have any occasion to consider
G that decisions of this Court in Krishi Utpadan Mandi Samiti v. Kanhaiya Lal
and Ors., [2000] 7 SCC 756 and B. V. Reddy, (supra), which, it will bear
repetition to state, are authorities for the proposition that once it is held that
Section 25(2) of the Act would be attracted in a given case, the parties are
estopped and precluded from claiming any amount higher than that claimed
H in their claim petition before the Collector. An observation made to the effect
U.0.1. v. PRAM OD GUPTA (D) BY LRS. [S.B. SINHA, J.] I05
that an application under Order 6, Rule 17 would be maintainable having A
regard to Section 53 of the Act, with utmost respect, does not constitute a
binding precedent. No ratio has been laid down therein and the observations
made therein are without any discussion. Furthermore no reason has been
assigned in support of the said proposition of law.

In Harcharan (supra) also this Court did not address the question as B
to whether Order 6, Rule 17 would be applicable in relation to the original
claim petition or memo of appeal.

It may be true that not only the memorandum of appeal but also the
reference was amended. Mr. Rao pointed out that the necessary amendments C
have been carried out in the application for reference or memorandum of
appeal. In terms of Order VI Rule 18 of the Code of Civil Procedure, such
amendments are required to be carried out in the pleadings by a party who
has obtained leave to amend his pleadings within the time granted therefor
and if no time was specified then within fourteen days from the date of
passing of the order. The consequence of failure to amend the pleadings D
{ within the period specified therein as laid down in Order VI Rule 18 of the
Code is that the party shall not be permitted to amend his pleadings thereafter
unless the time is extended by the court. It is not in dispute that such an order
extending the time specified in Order VI Rule 18 has not been passed.

Mr. Rao, however, would contend that in any event, three Respondents E
claimed compensation @Rs. 50 per sq. yd and one@ Rs. 25 per sq. yd. and
in that view of the matter having regard to the cross-objections filed by them,
the High Court could have exercised its jurisdiction while allowing the cross-
objections to enhance the amount of compensation to the extent of Rs.50 per
sq. yd. The said argument was advanced on the premise that the Respondents F
had, as noticed hereinbefore, raised a specific contention before the Reference
Court that the land situated in Village Masoodpur was better than the land
situated at Munirka or Ber Sarai. We are not persuaded. The finding of fact
arrived at by the Reference Court to the effect that the Appellants had not
been able to show that the land situated at the aforementioned village are not
only inferior to the land situated at village Masoodpur and which finding G
having not been reversed by the High Court, any consideration other than
those which found favour with the Reference Court could not have been
entertained. The High Court in its judgment has referred to various decisions
showing that the rates specified in the notification issued by the Union of
India would be admissible in evidence. There is nothing to show that the said H
106 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A judgments were brought on record in accordance with law. There is al.so
nothing to show that any application under Order VI Rule 17 of the CPC was
filed and allowed by the High Court permitting the Respondents to bring the
said judgment on records. In fact, several reported judgments have been
referred to by the High Court not for the purpose of applying the ratio therein
B as precedent that such notifications are admissible in evidence but for the
purpose of computing the amount of compensation on the basis of the rates
at which the market price was fixed therein. The High Court had referred to
the judgments whereby the market value of the land had been calculated on
the basis of the rates specified in such notification in respect ofVasant Vihar,
Defence Enclave and several other areas, without arriving at any finding that
C the said judgments are admissible in evidence or otherwise have relevance
for determination of the market value of the land in question. The rights of
the parties, it is well-settled, must be determined on the basis of the case
pleaded and proved by leading proper evidence and just not on the basis of
other reported judgments [See Surendra Kumar Vakil and Ors. v. Chief
Executive Officer, MP. and Ors., (2004] 10 SCC 126 and Sanjay Gera v.
D Haryana Urban Development Authority and Anr., (2005] 3 SCC 207].

We have noticed hereinbefore that the amendments have not been carried
out in the pleadings in terms of Order VI, Rule 18 of the Code of Civil
Procedure. The said provision being mandatory, if not complied with the
E consequences flowing therefrom shall ensue.

The purported amendments of the Memo of Appeal and the Reference
applications, therefore, could not have been the basis for allowing adduction
of additional evidence as has been done by the High Court.

F The submission of Mr. Rao that all the procedural requirements contained
in the Land Acquisition Act were required to be strictly complied with having
regard to the fact that at the relevant point of time, the right to property was
a fundamental right, is misconceived. We are not, in these appeals, concerned
with the action of the State in acquiring the properties but only concerned
with determination of the market value thereof.
G
I.A. NOS. 7-8 OF 2004 :

One of the claimants Shri Rajiv Gupta s/o Shri L.R. Gupta filed an
application marked as I.A. Nos. 7-8 of 2004 wherein the following prayers
were made:
H
U.0.1. v. PRAM OD GUPTA (D) BY LRS. [S.B. SINHA, J.] I 07

"(I). Stay the operation of the judgment and order dated October A
5, 2001 passed by the Hon'ble High Court of Delhi in RFA Nos. 83/
87, 84/87, 85/87 and 86/87.

(2) Set aside the judgment and order dated October 5, 2001 and
to remand the case back to the High Court of Delhi for fresh disposal.
B
(3) To stay the payment to L.R. Gupta HUF decree holder in
Execution Petitions No. 1I7/2002, I I 9/2002 titled Raj iv Gupta and
Ors. v. U.0.1. and Ex. No. I 14/2002 & I 18/2002 entitled Pramod
Gupta and Ors. v. U.0.1. before the Court of Shri A.K. Pahak, A.DJ.
Tis Hazari Courts, Delhi.
c
(4) To pass any other order which this Hon'ble Court deems just,
fit and proper in the circumstances of the case."

The contention of the applicant is that the High Court committed a
serious error in issuing a direction to the effect that the amount of compensation
deposited by the Appellants should be disbursed in favour of Shri L.R. Gupta D
HUF as in relation thereto a lis is pending in a partition suit between the
parties in a competent court of civil jurisdiction.

It is not in dispute that the inter se disputes between the parties are
pending decision in several first appeals before the High Court in terms of E
Sections 30 and 31 of the Land Acquisition Act. The Respondents herein as
also the interveners are persons interested but the question as regard their
entitlement to the amount of compensation determined by the High Court is
yet to be determined. The Division Bench of the High Court, however, despite
noticing that the first appeals are pending wherein the inter se dispute/claims
,., between the parties are to be adjudicated upon, without any application made F
by Shri L.R. Gupta HUF has authorized it to collect the entire amount of
compensation directing :

"The amount of compensation has thus to be realized, received and
withdrawn only by the Karla of L.R. Gupta HUF, through Shri L.R.
Gupta. The amount of compensation, therefore, deserves to be paid G
to L.R. Gupta, HUF through its Karla Shri L.R. Gupta. Ordered
accordingly."

It is interesting to note that the said direction had been passed on an
application filed by Shri Raj iv Gupta for deletion of the three names of Shri H
Sanjay Gupta, Smt. Sumangli Gupta and Shri L.R. Gupta and for continuing
108 SUPREME COURT REPORTS [2005} SUPP. 3 S.C.R.

A with the proceedings in his name and in the name:of Smt. Pramod Gupta, inter
alia, on the ground that the bhumidhari rights continued to remain in his name
and in the name ofSmt. Pramod Gupta only and not on any application filed by
any party to the said proceeding in this behalf. We fail to appreciate as to how
the aforementioned directions had been made by the High Court on the
B application made by Shri Raj iv Gupta. We may also notice that Shri L.R. Gupta
had already withdrawn a sum of money as awarded by the Reference Court, the
details whereof are as under : (As shown on next page)

c

,..
'

1::JoO.L.11J>R.AM-O&~(DTBY-LRS:{S:B:SINID'i;T.)

I.
"Name Compensation Interest Interest upto Deficit
Amount Received 3 J.03.91refundable
upto 31.03.91 At the rate of 15%
p.a. in case of
restitution as
per terms of
order dated
23.03.87 passed
by this Hon'ble
Court
I. Sh. L.R. Gupta 2,87,72,757.60 68,09,404 1,54,66,355 86,55,951
2. Mrs. Pramod I 0,07,04,651.23 2,87,05,730 5,41,28,748 2,54,23,018
Gupta '.> ·-·

3. Sh. Rajiv 5,27,50,055.56 1,25,11,387 2,83,53,153 1,58,41, 766
Gupta
4. Sh. Sanjay 5,27,50,055.56 1, 15,22,534 2,83,53, 153 1,68,30,619
Gupta
5. Ms. Sumangli 5,27,50,055.60 1,47,26,420 2,83,53,153 1,36,26,733
Gupta
Total 28,27,27,575.55 7,42,75,475 15,46,53,562 8,03,78,087"
110 SUPREME COURT REPORTS (2005) SUPP. 3 S.C.R.

A The aforementioned direction, as has been rightly submitted by the
learned counsel Mr. Bhat, is wholly unjustified and unwarranted. The said
direction is, therefore, set aside.

It will also be relevant to noti~e the",third proviso appended to sub-
~
section (2) of Section 31 of the Land' Acquisition Act which reads as under
B
"Provided also that nothing herein contained shall affect the
liability of any person, who may receive the whole or any part of any
compensation awarded under this Act, to pay the same to the person
lawfully entitled thereto."
c
In view of the aforementioned provision there cannot be any doubt
whatsoever that if and when an occasion arises either on the basis of an
application filed by the interested parties or otherwise and/or upon disposal
of the pending appeals, in the event Shri L.R. Gupta, HUF is found to have
no title over the land in question, it would be bound to refund the entire
D amount of compensation received by it together with such interest thereon,
as may be determined applying the doctrine of 'restitution'.

I.A. NOS. 17-18 OF 2005:

We have hereinbefore noticed the claim of Shri Madan Gopal Gupta
E and Shri Sudhir Jain. The contention of the interveners in the aforementioned
application, is that no Bhumidhari right could be granted in favour of Guiab
Sundari and in that view of the matter any finding on Issue No. I as framed
by the Reference Court and affirmed by the High Court, should be set aside
by this Court. In these appeals, this Court is concerned only with the
F determ_i!iation of the question raised before us and not the inter se dispute of
title between the parties. Such a question as and when adjudicated upon by
the competent courts in appropriate proceedings will be binding on the parties
thereto inasmuch as only who succeeds in the said proceedings will be entitled
to the amount of compensation. Keeping in view the fact that neither the
Reference Court nor the High Court had any opportunity to examine the said
G questio"ij as has been contended by the applicants herein, we would observe
that this Court had not determined the question that the Respondents herein
being ·successors of Guiab Sundari were entitled to the Bhumidhari rights by
teason oftQ,e:alleg~q dee_<!, ~f sa\e,.exe7uted in their favour, but we only h~ve
proceeded-on-the basis-that-assuming-they-are Bhumidhars; in what manner
their claim for awarding compensation should be dealt with. Any observation _,..
H
U.0.1. v. PRAMOD GUPTA (D) BY LRS. [S.B. SINHA, J.) 111
made herein by us should not be taken to mean that we have determined the A
question of entitlement of the Respondents herein as Bhumidhar under the
Delhi Land Reforms Act finally or otherwise. Such a finding has to be arrived
at by the courts determining the said question in the pending proceedings.

CONNECTED MATTERS:

We may, however, notice that in the appeal arising out of SLP (Civil)
CC No. 5724 of2004 an award was made@ Rs. 1.74 per sq. yard, although
the claim of Rs. 30 per sq. yard was made and the High Court despite the fact
that neither application for amendment nor adduction of additional grounds
was filed, blindly followed its decision in other appeals filed by the Union '.(!:
of India. No finding therein has also been arrived as to how the judgment and.
award of the Reference Court was unsustainable.

CONCLUSION:

It is true that Union oflndia did not question the orders disallowing, the
application for amendment filed by the Appellants and allowing the applicatio~
for amendment as also adduction of additional evidence by the Respondents
herein but having regard to the peculiar facts and circumstances of thi~ ~%!!
and in particular the fact that a large amount of public money is involveg,:1Yi:
are of the opinion that it is a fit case where our jurisdiction of this ·C:.'!Yf.l
under Article 142 of the Constitution should be invoked for the purpose of ~E
setting aside the said orders with a view to do complete justice between the
parties. .(h1::: ·to

i (\ j J
In a case where the !is was mishandled by the State and different courts
passed different orders, this Court relying upon a decision of this Court in
Deb Narayan Shyam and Ors. v. State of W.B. and Ors., [2005] 2 SGC;l!S§ ·:p
invoked its inherent jurisdiction under Article 142 of the Constitution stating:

"26 ... Therefore, in order to do complete justice to the parties1 it is a
fit case where we need to invoke our inherent power undeP;ArJ;i.cle
142 of the Constitution. Learned Senior Counsel appearing fot·.:tlte r ·
State of West Bengal has made a categorical submission .,tharalltJJ.e rQJ
Am ins irrespective of their qualifications will be entitled to Pay.:Sqile
6 and no money which has been drawn by the Amins in the 36 writ
petitions will be recovered from them prior to 1-10-2001 as dlfect'e'd
by the Division Bench of the High Court. Therefore, we direct that
all the Am ins irrespective of their qualification in the minimum scale H
112 SUPREME COURT REPORTS (2005) SUPP. 3 S.C.R.

A of pay will be given Scale 6 and they will be entitled to promotion
as per rules in Scales 7 and 8 as the case may be. Though the Division
Bench has directed that no recovery shall be made from the Amins
drawing higher pay scale for the period prior to 1-10-2001 but since
the law has now been declared by this Court, we extend that period
till this date i.e. no recovery shall be effected from all these Amins
B in 36 writ petitions and' they shall be properly fixed in the pay scale
provided for Amins in the ROPA Rules and their pay should be
protected in the respective pay scales. This is being done because of
the fact that the State Government is responsible for creating such
anomalous situation. Had the State Government contested the matter
c and consequently pursued the remedies available under law, then this
•
anomalous situation would not have been created. Though the Division
Bench has given the benefit of the pay scales up to 1-10-200 I, the
said cut-off date is extended till this date because we are invoking the
inherent jurisdiction under Article 142 of the Constitution."

D CIVIL APPEAL NOS. 6825- 6832 OF 2003
For the reasons aforementioned, the impugned judgments are set aside
and the matters are remitted'to the High Court for fresh consideration, in the
light of the observations made hereinbefore. The appeals are disposed of
accordingly. No wsts.
E
Civil Appeal Nos. 950, 2661 of2005, Civil Appeal Nos ..... 5566-5569......
of2005 [!\.rising outof.SLP (Civil) No. 14383 of2004, CC Nos. 5724, 9371,
11751 of2004]

These appeals were disposed of by the High Court on the basis of the
F judgment rendered by a Division Bench of the Delhi High Court in Bhooria
and Ors. v. Union of India, 95 (2002) DL T 100 (DB).

In view of the fact that in Civil Appeal Nos. 6825-26 of 2003 etc., the
impugned judgments are being set aside and the matter is remitted to the
High Court, the judgments and awards passed in these appeals must also be
G set .aside on the same lines, The Appeals are dispos.ed of accordingly. No
costs.

v.s.s. Appeal disposed of.