Union Of India vs Pramod Gupta (D) By Lrs.

& Ors on 7 September, 2005

Supreme Court of India

Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005
Author: S.B. Sinha
Bench: Ashok Bhan, S.B. Sinha
CASE NO.:
Appeal (civil) 6825-26 of 2003

PETITIONER:
Union of India

RESPONDENT:
Pramod Gupta (D) by LRs. & Ors..

DATE OF JUDGMENT: 07/09/2005

BENCH:
Ashok Bhan & S.B. Sinha

JUDGMENT:

J U D G M E N T WITH C.A. Nos. 6827-6832/2003, 950, 2661 of 2005, CIVIL APPEAL NOS.
5566-5569 OF 2005 [arising out of SLP(C) Nos. 14383 OF 2004, 17913, 17915, 17916 OF 2005] S.B.
SINHA, J :

Leave granted in the special leave petitions.

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. 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 respectively in relation to the notification dated 23.01.1965.

The basic fact of the matter is not in dispute. Two notifications dated 24.10.1961 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 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 2.12.1967
and 8.04.1969. 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 categories
viz. Blocks A, B & C and awarded compensation @ Rs. 1000/- per 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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

23.01.1965. The owners of the lands being 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 No. 2040. The Reference Court further granted compensation @ Rs.
10,000/- 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 & 86 of 1987. The 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:

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 cross-objections filed by the
Respondents herein 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 the Respondents herein obtained assignment of 1/8th 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 that as the proceeding
arising out of reference having remained stayed at the instance of the Respondents for the period
January, 1972 and May, 1980; 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 being
mandatory in nature cannot be waived.

For computing the market value of the lands, the High Court proceeded on the basis that the lowest
category of residential developed plots, as in the year 1965, should be taken to be the base therefor
i.e. @ Rs. 150/- per sq. yd. 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 price opining that Rs. 72/- per sq. yard would be a fair market
price for the acquired land in the year1965. However, as regard the lands which were the subject
matter of acquisition in terms of notification dated 24.10.1961, relying on or on the basis of a
decision of the High Court in Rameshwar Solanki & Anr. Vs. Union of India & Anr. [57 (1995) DLT
410], further deductions @ 12% p.a. were directed to be made therefrom working out the amount of

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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.

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 'Gairmumkin Pahad' and 'Banjar 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.

(ii) China Clay being a minor mineral, in terms of the provisions of the Mines and Minerals
(Regulation and Development) Act, 1957 as also the Punjab Minor Mineral Rules, 1934, the same
having vested in the Central Government; no compensation was payable therefor.

(iii) Judgments and awards made in favour of other claimants having only evidentiary value, the
principle of res judicata was wholly inapplicable.

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

(iv) Even if it be found that any amount of compensation was payable 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 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.

(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 1/8th share of the
acquired land for a sum of Rs.36,000/- in the year 1980 and the market value of the acquired lands
should have been determined only on that basis.

(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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 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 :
(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 coming into force of the
Constitution of India the right to property was a fundamental right in terms of Article 19(1)(f) and 31
of the Constitution of 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 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- `-vis Section 53 of the Act, the High Court had
the requisite jurisdiction 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.

(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. Vs. Nathi and Ors. [JT 2004 (4) SC 36 : (2004) 12 SCC 555], the learned counsel would
submit that the Respondents therein were not Bhumidhars and, thus, the said decision must be held
to have been 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.

(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 (Regulation and Development)
Rules, 1957 or the Delhi Land Reforms Act, 1954 do not contain any provision divesting the right of

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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.

FACTUAL BACKGROUND:

As the fact of the matter has been noticed at some length by a Constitution Bench in Sardar Amarjit
Singh Kalra (Dead) by Lrs. and Others etc. vs. Pramod Gupta (Smt.) Dead) by Lrs. and Others etc.
[(2003) 3 SCC 272], it may not be necessary for us to traverse the same over again. Suffice it to
notice that the Respondents herein claimed their right, title and interest in the lands in question
measuring 4307 bighas, 17 biswas from one Gulab 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 Gulab Sundari on the one hand 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 Gulab Sundari had allegedly been declared Bhumidhar by the Deputy
Commissioner of Delhi.

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 to the said applicants the principal dispute between the parties is as to whether the said
Gulab 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 RFA 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 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, Gulab 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 entitled thereto and in that view of the matter the
declaration of Bhumidhari rights in favour of Gulab Sundari was wholly illegal and without
jurisdiction.

The Appellants, however, contend that Gulab 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 statutes, as referred to hereinbefore, did not derive any right, title and
interest in the minor minerals. In any event, right over mines and minerals in 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 premise that if they were entitled thereto.

PROCEEDINGS BEFORE THE REFERENCE COURT :

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

From the claim applications filed before the Reference Court, it appears that there were five
claimants, namely, Smt. Promod Gupta, Shri Rajiv Gupta, 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 :

"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 :

"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 1/4th share in the land
acquired by these awards and the other set of claimants against each award 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. Parmod Gupta and
Sumangli Gupta being the members of the L.R. Gupta HUF. They jointly have 1/8th 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 been arrayed as Respondents in the appeals filed
before the High Court by the appellants herein.

RES JUDICATA :

The principle of res judicata has been applied by the High Court in relation to two issues, viz.,
determination 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 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 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 respect of the lands acquired by the
State, indisputably the market value therefor has to be ascertained. There exist different modes
therefor.

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 methods. Evidences admissible therefor inter alia would be judgments and
awards passed in respect of acquisitions of lands made in the same village and / 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.

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 of other materials brought on the records.
It was also 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 judgments/ awards, if duly
brought on records, as stated hereinbefore, would be admissible in evidence.

Even if the Union of India 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.

In Government of West Bengal vs. Tarun K. Roy [(2004) 1 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 :

"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 Kumar1. If the judgment of
Debdas 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 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, contended that 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 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.""

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The principle of res judicata would apply only when the lis was 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
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.

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, 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 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 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:

"11.1. Therefore, the legal position is absolutely clear that a person can be either a bhumidhar or an
asami of the agricultural land in a 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 enforcement of
the Act. The respondents neither claimed to be bhumidhar nor asami of the land which has been
acquired. The 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."

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 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.

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 embedded therein but also the nature and extent thereof. Ordinarily, the zamindar of the

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 no right to work quarries or
mines other than those which were open when he entered.

In F.F. Christian vs. Tekaitni Narbada Koeri and Others [(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 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 instrument of the 2nd December, 1889 "

In Bageswari Charan Singh vs. 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 :

"...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 Mandal and Others vs. Raja Jagadish Chandra Deo Dhaubal Deb, [1936 IC
(160) 114], the Patna High Court reiterated the 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. vs.
Carpalla United China Clay Co. Ltd. [(1910) 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.

In Jagat Mohan Nath Sah Deo vs. Pratap Udai Nath Sah Deo and Others [AIR 1931 PC 302], the
Privy Council affirmed its earlier decision in Gobinda Narayan Singh vs. 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 emanating from him, even though his powers may be
permanent, heritable and transferable, he must still prove the express inclusion of the subsoil
rights."

[See also H.V. Low and Company Ltd. vs. Raja Bahadur Jyoti Prosad Singh Deo AIR 1931 PC 299;
Onkarmal Agarwalla and Others vs. Bireswar Hazra and others, AIR 1959 Calcutta 195; and
Bageswari Charan Singh (supra)] Yet again in Bejoy Singh Dudhoria vs. Surendra Narayan Singh
[1929 ILR (56) Cal. 1], it was held that in absence of any reference to minerals or to 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.

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

The provisions of Punjab Land Revenue Act govern the rights of the tenants. Before us, the original
deeds under which the right of proprietorship, if any, said to be created in favour of Smt. Gulab
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 the judgments and decrees passed by the civil courts and the
revenue courts are not before us and, thus, this Court may only briefly indicate the legal 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:

"41. Right of the Government in mines and minerals. All mines of 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.

42. Presumption as to ownership of forests, quarries and waste land (1) When in any
record-of-rights completed before the eighteenth day of November, 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 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.

(3) The presumption created by sub-section (1) may be rebutted by showing:-

(a) from the records or report made by the assessing officer at the time of assessment; or

(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.

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.

60-C. Power to issue instructions. The State Government or the 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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

that such instructions shall be consistent with the provisions of this Act and the rules made
thereunder."

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:

"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.

(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.

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 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, shall
make an application in form M. 1 to the Collector either directly or through the patwari of revenue
estate. If the land from which 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.

7. (i) A person who desires to quarry minerals in circumstances other than those related in
paragraph 5 shall make his application to the Collector.

(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.

(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.

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 same could be extracted only for personal, agricultural or domestic purposes

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

and not for any commercial one including carrying out any contract. Even for the permissible
purposes, an application for grant of permit was necessary. Assuming that the Bhumidhars were
entitled to the mineral right 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 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 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:

"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:

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:

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 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 any other name) in force immediately before the commencement of
this Act in the Union Territory of Goa, Daman and Diu.

(1A) 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.

(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.

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(3) Any State Government may, after prior consultation with the Central Government and in
accordance with the rules made under section 18, undertake reconnaissance, prospecting or mining
operations with respect 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"

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 (1) of Section 15 the old rules would continue 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 whereof the Punjab Minor Mineral Rules, 1934 were repealed.
In terms of 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 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.

"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 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 vs. M/s Vishkarma and Co. etc. [JT 1993 (1)
SC 448], construing the provisions of Sections 31, 41 and 42 of the Punjab Land Revenue Act, 1887,
held :

"Brick-earth with which we are concerned in the present appeals, 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
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 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 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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 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 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 Ownership of the Nazul land or Forest or without ownership or unpossessed
or untitled or non-residential land or Mines or Ruins or old buildings or self-fertile and no other
land which give natural fertility is situated within the revenue estate village Masood Pur.

Except the 29 bighas land of road not any other land of Forest, Mines, buildings, Nazal, self-

fertile, Marbal, metals, stones, coal, sand is under the ownership of the Government. But within the
boundires of this village mountain is stated to be existed.

If the Government wants to take the stone then the Govt. will not liable to pay the price of that
stone. If 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 bar
including Prem Chand vs. State of Haryana [AIR 1972 (P&H) 50 (DB)]; Man Chand vs. State of
Haryana [74 (1972) PLR 508], Chunni Lal vs. State of Haryana [73 (1971) PLR 159], Gram
Panchayat vs. State of Himachal Pradesh [AIR 1973 HP 7].

The said decisions lay down the principle that in absence of any entry 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 tenure-holder.

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 far 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 or sale that
such right has expressly been conveyed. Section 42(2) of the 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 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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 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 grantor had an intention to pass on title of
the 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 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 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
clay were existing at the relevant time. The expression 'Mine' having regard to its definition
contained in Section 2(j) 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 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 presumption as regards right to mines and
minerals said to be vested in the Government vis-`-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 presume' have
been explained in Section 4 of the Indian Evidence Act, 1872, 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 vs. Mst. Sukhi and Others [AIR 1957 SC 286] whereupon Mr. Rao has placed strong
reliance 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 regard to the right of
the Raja in respect of chil 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 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 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.

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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

In Bheemagari Bhaskar and others Vs. Revenue Divisional Officer, Bhongir and others [2002 (1)
ALT 159] the Division Bench of the Andhra Pradesh High Court, wherein one of us was a member,
while analyzing the provisions of the A.P. (A.A.) Estates (Abolition and Conversion into Ryotwari)
Act, 1948 vis-`-vis Mines and Minerals (Regulation and Development) Act, 1957 and A.P. Minor
Mineral Concession Rules, 1966, held that the agriculturists could not have had any right over minor
mineral stating:

"In terms of Entry 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
made in that regard under Sections 18 and 20 thereof, as envisaged in Entry 54 of 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."

In Shakuntala Devi Vs. Kamla & Ors. [JT 2005 (4) SC 315], this Court referring to various decisions
of this Court including Mathura Prasad Bajoo Jaiswal & Ors. Vs. Dossibai N.B. Jeejeebhoy [(1970) 1
SCC 613], Chief Justice of Andhra Pradesh & Ors. Vs. L.V.A. Dixitulu & Ors. [(1979) 2 SCC 34],
Ashok Leyland Ltd. Vs. State of T.N. & Anr. [(2004) 3 SCC 1], Management of M/s. Sonepat
Cooperative Sugar Mills Ltd. Vs. 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 the basis of res judicata is delivered by a court without jurisdiction or is
contrary to the existing law at the time the issue comes up for reconsideration such earlier judgment
cannot be held to be res judicata in the subsequent case unless, of course, protected by any special
enactment."

In Ramnik Vallabhdas Madhvani and Others Vs. Taraben Pravinlal Madhvani [(2004) 1 SCC 497],
in which one of us (S.B. Sinha, J.) was a 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 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 Others Vs. International Security & Intelligence
Agency Ltd. [(2004) 3 SCC 250], relied upon by the Additional Solicitor General, is not applicable.

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

PUNJAB LAND REVENUE ACT AND DELHI LAND REFORMS ACT:

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 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.

Punjab Land Revenue Act, 1887 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 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 :

"(1) "estate" means any area

(a) for which a separate record-of-rights has been made; or

(b) which has been separately assessed to land revenue, or would have been so assessed if the land-
revenue had not been released, compounded for or redeemed; or

(c) which the State Government may, by general rule or special order, 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 farm, under this Act
for the recovery of an arrear of land-revenue or a sum recoverable as such an arrear and every other
person not hereinbefore in this clause mentioned who is in possession of an estate or any share or
portion thereof, or in the enjoyment of any part of the profits of an estate;

(3) "holding" means a share or portion of an estate held by one land-owner or jointly by two or more
land- owners;"

Section 61 of the Land Revenue Act provided for security for payment 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. Gulab Sundari vis-`-vis her predecessors is not known.

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 provision
for record of rights in the situations specified therein. Section 41 provides that minerals mentioned

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 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.

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.

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 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.

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:

"(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 Istamrari with rights of transfer by sale, who are declared Bhumidhars
on the commencement of this Act;

(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 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. Gulab
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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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, 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 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 contemplates only bhumidhari or asami right of an
agricultural land in a village subject of course to the right conferred upon them in terms of Section 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 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 respect of mines and minerals. In
absence of the documents which would throw a light on the right of Smt. Gulab 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 provisions contained in Article 31A of the
Constitution of India vis-`-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. Gulab 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 at this stage.

We may, however, notice a few decisions cited at the bar.

In Atma Ram Vs. 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 Vs. State of Punjab,
AIR 1954 Punj 167 and State of Punjab Vs. Keshar Singh [AIR 1959 Punj 8], holding that 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 an estate, as defined in

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 intermediaries in respect
of an area constituting one entire estate but not of a portion thereof? On the other hand, as 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 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 intermediaries 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 intermediaries, 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 the
Bombay Tenancy and Agricultural Lands (Amendment) Act, 1956, which contains similar provisions
with a view to doing away with intermediaries, 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 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 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 where owners
are entitled to the minerals having regard to the provisions contained in the Punjab Minor Mineral
Rules, 1934, the amount of 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 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. vs. State of Orissa [1961 (2) SCR 537] [See also India Cement Ltd. and
Others Vs. State of Tamil Nadu and Others, (1990) 1 SCC 12] Mineral may be found in the
mineral-bearing land. Mineral-bearing 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 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 of their undertaking of mining operations from

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

the land belonging to the private 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 rules framed thereunder
The amount of compensation, therefore, in view of the statutory provisions will depend upon several
factors, as noticed hereinbefore. In any event, the profit earned by illegal mining i.e. carrying on
mining operations 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 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:

In Delhi Development Authority vs. Bali Ram Sharma and Others [(2004) 6 SCC 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, A.P. vs. Nookala Rajamallu
and Others [(2003) 12 SCC 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:

" 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 that the compensation must be determined by reference
to the price which a willing vendor might reasonably expect to receive from the willing purchaser..."

In Lila Ghosh (Smt.) (Dead) Through LR Tapas Chandra Roy vs. State of W.B. [(2004) 9 SCC 337], a
Division Bench of this Court has observed that 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. vs. State of Gujarat, (2005) 4 SCC 789] In V. Hanumantha Reddy (Dead) by Lrs. vs.
Land Acquisition Officer & Mandal 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 "

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

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nature may be adopted. [See Panna Lal Ghosh and Others vs. Land Acquisition Collector and Others
(2004) 1 SCC 467].

It is also trite to state that the market value of agricultural land is lower than that of land suitable for
commercial purposes [See Om Prakash (Dead) By LRs. and Others vs. Union of India and Another
(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 vicinity.

In Shaji Kuriakose and Another Vs. Indian Oil Corpn. Ltd. and Others [(2001) 7 SCC 650], this court
observed:

"3. It is no doubt true that courts adopt comparable sales method of 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 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 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: (1) 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 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 acquired
land. However, if there 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 ."

[See also P. Ram Reddy and Others Vs. Land Acquisition Officer, Hyderabad Urban Development
Authority, Hyderabad and Others, (1995) 2 SCC 305] 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.

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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 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 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-`-vis the land
under acquisition by placing the two in juxtaposition. The positive and negative factors are as under:

Positive factors Negative factors

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

(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

(iv) nearness to developed area (iv) lower level requiring the depressed portion to be filled up

(v) regular shape (v) remoteness from developed locality

(vi) level vis-`-vis land under acquisition (vi) some special disadvantageous 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

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 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. Spl. Land Acquisition Officer7 deduction to the extent of 65% was made towards
development charges."

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The Court noticed a large number of decisions wherein deductions had been made at different rates
varying from 20% to 53%. The Court also noticed an earlier decision of this Court in K.S.
Shivadevamma vs. Assistant 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 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 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(1), 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 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 @ 33-1/3%, as ordered by the
High Court, was not illegal."

[See also Basavva (Smt.) and Others vs. Spl. Land Acquisition Officer and Others - [(1996) 9 SCC
640] The High Court, as has been noticed hereinbefore, without assigning any reason discarded the
method of valuation adopted by the reference court. 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 Vihar wherefor certain deductions were made @ 12% p.a. therefrom in respect of
the lands acquired under the notification dated 24.10.1961.

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.

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 vs. Revenue Divisional Officer, Adilabad, A.P. and Others [(1994) 4 SCC
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 prepared and maintained for
the purpose of collecting stamp duty has no statutory base or force. It cannot form a foundation to
determine the market value mentioned thereunder in instrument brought for registration. Equally it

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 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 vs. Bipin
Kumar and Another [(2004) 2 SCC 283].

We may at this juncture notice a decision of this Bench relied upon by Mr. Harish Salve being DDA
and Others vs. Joginder S. Monga and Others [(2004) 2 SCC 296]. Therein this Court was not
concerned with valuation of land under the Land Acquisition Act. In that case DDA 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 (Disposal of Developed Nazul Land) Rules,
1981. Some members of the cooperative society intended to sell the land wherefor the DDA 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 dated 11.11.1994. A case of discrimination was raised by Monga vis-`-vis one Rajiv
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 paid to the DDA in terms of the covenant contained in the deed of lease; and while determining
the amount DDA 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 Others vs. State of Maharashtra [(1996) 2 SCC 152], this Court
categorically held that if the 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 the claimant and the evidence of the sale deeds under Exs. 38 and 44
being prevailing prices, it acted thereon 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 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 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. In State of
M.P. 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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

mentioned in the sale deed would form the basis to determine the market value. Though the High
Court has relied on the sale deeds under Exs. 65 and 66 relating to the lands in Nityanand 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 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 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
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 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.

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 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 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.

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 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 case.

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

PAYMENT OF INTEREST DURING THE PERIOD 17TH JANUARY, 1972 TO 27TH MAY, 1980 It is
not in dispute that the proceedings between 17th January, 1972 to 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 17th January, 1972, the
Reference Court recorded: "Shri Gupta learned Counsel for the petitioners states that the petition
may be stayed sine 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 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.

It appears that in the reference arising out of the award No. 2225 Smt. Pramod Gupta and Ors. Vs.
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 Sections 28 and 34 being
imperative in character the purported 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 compensation.--If 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 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, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry
of the said period of one year on the amount 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 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
annum shall be payable from the date of expiry of the said period of one year on the amount of

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 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 claim interest has been waived expressly by the parties and/or their counsel. Even a
mandatory provision of a statute can be waived.

The effect of Section 28 of the Act came up for consideration before this Court in Raghubans Narain
Singh Vs. The Uttar Pradesh Government, through Collector of Bijnor [AIR 1967 SC 465] wherein
this Court held the 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, 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 another Vs. Jitendra Kumar Senapati and others [AIR 1981 SC 969 : (1981) 2 SCC 221]
wherein the claimants agreed to the amount awarded to them subject to Government making
payment 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"

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 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 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 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 of the bargain. In the
agreement signed by them (as pointed out above) they no doubt used the word "compensation" but
they added 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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

also relinquished all future claims to interest. If it were otherwise, there is no reason why the
respondents would not have 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."

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 would be applicable and by reason thereof, the person making
the representation would not be allowed to raise a plea contra thereto. In Krishna Bahadur Vs.
Purna Theatre and Others [(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 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 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."

[See also Vijay Cotton & Oil Mills Ltd. Vs. The State of Gujarat, 1969 (2) SCR 60 at 63].

Yet again recently in State of Karnataka and Another Vs. Sangappa Dyavappa Biradar and Others
[(2005) 4 SCC 264], the principles of estoppel was applied 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 others Vs.
M/s. Onkarmal Nathmal Trust [AIR 1975 SC 2065 : (1976) 1 SCC 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:

"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 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 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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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
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:

"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 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 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
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 obtain 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 Sushil
Kumar Vs. Rakesh Kumar, (2003) 8 SCC 673 and Laxminarayan R. Bhattad and Others Vs. State of
Maharashtra and Another (2003) 5 SCC 413] Even otherwise it is now well-settled that a person
cannot be made to suffer owing to an action by the Court. (Actus curiae neminem gravabit) [See
Ram Chandra Singh Vs. Savitri Devi and Ors., (2003) 8 SCC 319 and Board of Control For Cricket in
India and Another Vs. Netaji Cricket Club and Others [(2005) 4 SCC 741] We, therefore, are of the
view that the High Court committed a manifest 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 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 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 1/4th 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
Acquisition Officer cum DSWO, A.P. Vs. B.V. Reddy and Sons, (2002) 3 SCC 463 and Krishi

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

Utpadan Mandi Samiti Vs. Kanhaiya Lal and Others, (2000) 7 SCC 756] Section 25 of the Act, as it
stood prior to its amendment reads:

" 25. Rules as to amount of compensation. (1) 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.

(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 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 :

(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 10 had
been served by the Collector upon the Claimant- Respondent.

(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 Vs. Union Territory of Chandigarh [AIR 1985
SC 1576] and Union of India and Anr. Vs. 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 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 was categorically stated that the notice under Sections 9
and 10 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.

Although the question as regard service of notice is a pure question of fact, we may observe that the
said question may have to be answered keeping in view certain legal principles, viz., (i) the object for

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 (1) of Section 9 thereof; (iii) service of notice under Sub-section (1) of Section 9
together with service upon those 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 vs. Union of India & Ors. [1973) 9 DLT 59], 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 vs. Sawaran Singh [2005 (5) SCALE 601].

We may furthermore notice that in Sureshchandra C. Mehta Vs. State of Karnataka and Others
[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.

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 Others Vs. Brijendra
Prasad Gupta and Others [(1997) 6 SCC 207] differing with the view of the Calcutta 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 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."

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 at 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.

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 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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

purpose of determination as regard superior quality of land under acquisition vis-`-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 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 part
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 judgment has not adverted to this aspect of the matter at all.

It is relevant to notice the following observations 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 by the ld. 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 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 proceeded computing the amount of compensation
on the basis of the circle rates without considering this aspect of the matter.

AMENDMENT OF REFERENCE AND ADDITIONAL EVIDENCE :

It has not been disputed before us that the claimant Smt. Pramod Gupta purchased 1/4th 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 Procedure for bringing 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.

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. [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.

It further appears that Shri Rajiv Gupta purchased 1/8th 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 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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

further filed applications under Order 41, Rule 27 of the Code 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 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 in the reference case itself. Strong
reliance in this behalf has been placed on Harcharan Vs. State of Haryana [(1982) 3 SCC 408]
Ghaziabad Development Authority Vs. Anoop Singh and Another [(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 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 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 him. In such an event
the application for amendment may not be allowed. [See. M/s. Modi Spinning & Weaving Mills Co.
Ltd. and another Vs. M/s. Ladha Ram & Co. [AIR 1977 SC 680], Heeralal Vs. Kalyan Mal and Others
[(1998) 1 SCC 278] and Sangramsinh P. Gaekwad & Ors. Vs. Shantadevi P. Gaekwad (Dead) thr. Lrs.
& Ors.[JT 2005 (1) SC 581] Delay and laches 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
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 that decisions of this Court in Krishi Utpadan
Mandi Samiti Vs. Kanhaiya Lal and Others [(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 in their claim petition before the Collector. An observation
made to the effect that an application under Order 6, Rule 17 would be maintainable having 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.

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

In Harcharan (supra) also this Court did not address the question as 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 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 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 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 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 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 judgments were brought on record in accordance with law. There is also 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
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 of Vasant Vihar, Defence Enclave
and several other areas, without arriving at any finding that 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 Others Vs. Chief Executive Officer, M.P. and Others, (2004) 10 SCC 126
and Sanjay Gera vs. Haryana Urban Development Authority and Another (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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

complied with the 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.

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.

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 :

"1. Stay the operation of the judgment and order dated October 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.

3) To stay the payment to L.R. Gupta HUF decree holder in Execution Petitions No. 117/2002,
119/2002 titled Rajiv Gupta & Others vs. U.O.I. and Ex. No. 114/2002 & 118/2002 entitled Pramod
Gupta & Ors. vs. U.O.I. before the Court of Shri A.K. Pahak, A.D.J. Tis Hazari Courts, Delhi.

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 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 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 by Shri L.R. Gupta HUF has authorized it to collect the entire amount of
compensation directing :

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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

It is interesting to note that the said direction had been passed on an application filed by Shri Rajiv
Gupta for deletion of the three names of Shri Sanjay Gupta, Smt. Sumangli Gupta and Shri L.R.
Gupta and for continuing 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 of Smt. 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 application made by Shri Rajiv 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 :

"

Name Compensation Amount Interest Received upto 31.03.91 Interest refundable 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 Deficit

1. Sh. L.R. Gupta 2,87,72,757.60 68,09,404/-

1,54,66,355/-

86,55,951

2. Mrs. Pramod Gupta 10,07,04,651.23 2,87,05,730/-

5,41,28,748/-

2,54,23,018/-

3. Sh. Rajiv Gupta 5,27,50,055.56 1,25,11,387/-

2,83,53,153/-

1,58,41,766/-

4. Sh. Sanjay Gupta 5,27,50,055.56 1,15,22,534/-

2,83,53,153/-

1,68,30,619/-

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

5. Ms. Sumangli Gupta 5,27,50,055.60 1,47,26,420/-

2,83,53,153/-

1,36,26,733/-

Total 28,27,27,575.55 7,42,75,475/-

15,46,53,562/-

8,03,78,087/-

"

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 notice the third proviso appended to sub- section (2) of Section 31 of the
Land Acquisition Act which reads as under :

"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."

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 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 and Shri Sudhir Jain. The
contention of the interveners in the aforementioned application, is that no Bhumidhari right could
be granted in favour of Gulab Sundari and in that view of the matter any finding on Issue No.1 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 determination 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 question as has been contended by the applicants herein, we would
observe that this Court had not determined the question that the Respondents herein being

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

successors of Gulab Sundari were entitled to the Bhumidhari rights by reason of the alleged deed of
sale executed in their favour, but we only have proceeded on the basis that assuming they are
Bhumidhars; in what manner their claim for awarding compensation should be dealt with. Any
observation made herein by us should not be taken to mean that we have determined the 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 of 2004 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 of India 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 herein but having regard to the peculiar facts and circumstances of
this case and in particular the fact that a large amount of public money is involved, we are of the
opinion that it is a fit case where our 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 do complete justice
between the parties.

In a case where the lis 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 Others Vs. State of W.B. and
Others [(2005) 2 SCC 286] invoked its inherent jurisdiction under Article 142 of the Constitution
stating:

"26 Therefore, in order to do complete justice to the parties, it is a fit case where we need to invoke
our inherent power under Article 142 of the Constitution. Learned Senior Counsel appearing for the
State of West Bengal has made a categorical submission that all the Amins irrespective of their
qualifications will be entitled to Pay Scale 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 directed by the Division
Bench of the High Court. Therefore, we direct that all the Amins irrespective of their qualification in
the minimum scale 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 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

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 Union Of India vs Pramod Gupta (D) By Lrs. & Ors on 7 September, 2005

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 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 1-10-2001, the said
cut-off date is extended till this date because we are invoking the inherent jurisdiction under Article
142 of the Constitution."

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 costs.

CIVIL APPEAL NOS. 950, 2661 OF 2005, CIVIL APPEAL NOS m66-5569 OF 2005 [Arising out
of SLP (Civil) No. 14383 of 2004, CC Nos. 5724, 9371, 11751 of 2004] These appeals were disposed of
by the High Court on the basis of the judgment rendered by a Division Bench of the Delhi High
Court in Bhooria & Ors. vs. Union of India [95 (2002) DLT 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 set aside on the same lines. The Appeals are disposed of accordingly. No costs.

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