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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1361 OF 2006

Tarabai (Dead) Through L.Rs. … Appellant (s)

Versus

Govt. of Karnataka & Ors. … Respondent  (s)

WITH

CIVIL APPEAL NO.3789-3791 OF 2007

J U D G  E M E N T

H.L. Gokhale J.

These appeals  are  filed  to  challenge  a  common  

judgment and order dated 30.9.2005 passed by a learned  

Single  Judge  of  Karnataka  High  Court  in  Regular  Second  

Appeal  No.137/2001  and  RSA  No.215/2001.   Both  the  

appeals,  which were decided by the learned Single Judge,  

were concerning the land which was owned by the appellant  

Tarabai (now deceased) along with her family members.  The

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land consisted of 2 acres 16 guntas in Survey No.16/1A and  

1B in Jangamarakoppa Village in District Hubli.  The Assistant  

Commissioner,  Dharwad  had  initiated  acquisition  

proceedings  for  acquiring  the  said  land  by  publishing  a  

notification  under  the  Land  Acquisition  Act,  1894,  for  the  

purposes of constructing an administrative building for the  

benefit  of  the  Small  Scale  Industries  Development  

Corporation.   The  Chief  Manager,  Industrial  State  Zone-2,  

Hubli,  of  this  corporation  is  respondent  no.2  in  these  

appeals.

2. Initially  the  acquisition  proceedings  were  

challenged by the above referred appellant by filing a Writ  

Petition bearing No.   366/1969 before the Karnataka High  

Court, but during the pendency of the petition a compromise  

was arrived at, whereby, the respondent No.2 agreed to re-

convey the land to the extent of 1.16 acres to the appellant.  

This was on the condition that the respondent No.2 would  

use the remaining 1 acre land for building the administrative  

block.   The  appellant  was  also  required  to  use  the  re-

conveyed  parcel  of  land  for  industrial  purposes.   The  

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compromise was taken on record and the said Writ Petition  

was  disposed  of  by  the  High  Court  by  its  order  dated  

11.12.1970.

3. The appellant received the compensation for the 1  

acre of land, and a deed of reconveyance was executed on  

25.8.1971 with respect to the remaining parcel of land.  It,  

however, so transpired that the administrative block was not  

constructed immediately.  On the other hand, the said parcel  

of land was allotted to one M/s Basanth Tiles (appellant in  

RSA  No.137/2001).   On  coming  to  know  about  this  

development, the appellant filed Original Suit No.519/1984  

on 8.10.1984 in the Court of First Additional Munsiff at Hubli.  

The appellant contended that the respondent No.2 had acted  

in  contravention of  the compromise,  and the allotment  of  

land in favour of M/s Basanth Tiles was illegal. The appellant,  

therefore, sought specific performance of the compromise,  

and  return  of  the  said  land  of  1  acre.   It  was,  however,  

pointed out by Deputy Commissioner, Dharwad, respondent  

No.3 herein (defendant No.3 in the suit) that the allotment in  

favour of M/s Basanth Tiles was in fact a mistake, and they  

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had taken steps to withdraw the same on 16.8.1984 i.e. well  

before the filing of  the suit.   M/s  Basanth Tiles who were  

defendant  No.4  in  the  said  suit  contested  the  same  by  

contending that they were bona-fide purchasers of the said  

parcel of land, and had carried out certain developments on  

the land.  It was claimed that they had constructed a bore  

well and a compound wall around the property.

4. The  Trial  Court  framed  various  issues,  recorded  

the  evidence  thereon,  and  examined  the  relevant  

documents,  particularly  the  compromise  memo arrived  at  

between the parties, and dismissed the suit by its judgment  

and order dated 22.2.1992.  

(i)  The Trial Court held that the Government had become  

absolute owner in view of the compulsory acquisition of the  

property, and since the respondent No.2 had not obtained  

the  sanction  of  the  State  Government  to  enter  into  the  

compromise, the memo of compromise had no legal force.  It  

was further held that the respondent No.2 could not have  

withdrawn  the  land  from  acquisition.   The  Trial  Court,  

therefore, held that the appellant had failed to establish the  

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necessary  ingredients  to  get  a  decree  of  specific  

performance.   

(ii) It was also held by the Trial Court that since the notice  

under  Section  80  of  C.P.C.  was  sent  on  31.10.1978,  and  

since it was replied to on 12.3.1979, the suit which was filed  

on 8.10.1984 was clearly  beyond the  period of  limitation.  

Thus on both these counts the Trial Court dismissed the suit.

5. The  appellant  filed  a  Regular  Appeal  bearing  

no.56/1992 against this judgment in the Court of Additional  

Civil Judge (Sr. Division), Hubli.  

(i)  The Appellate Court reversed the findings of the Trial  

Court.   The First Appellate Court held that the respondent  

No.2  had  admitted  in  the  written  statement  that  the  

compromise  was  legal,  and  had  been  acted  upon,  and  

therefore  it  could  not  be  contended that  the  compromise  

was not enforceable.  In para 20 of the judgment it was also  

observed that though the Government of Karnataka was not  

a signatory to the compromise, it had not opposed it, and its  

consent  could  always  be  deemed  and  inferred  from  its  

conduct.  The Appellate Court also did not accept the plea of  

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the respondent No.2 that the plot was kept for constructing  

an administrative building. If that was so, it would not have  

been allotted to  M/s  Basanth Tiles.   The Court,  therefore,  

held that the respondents had acted in contravention of the  

compromise  and,  therefore,  the  appellant  was  entitled  to  

enforce the same.   

(ii) As  far  as  limitation  is  concerned,  the  First  Appellate  

Court held that the limitation will have to be calculated from  

the date of allotment of said land to M/s Basanth Tiles which  

was  30.5.1984,  and  therefore  the  filing  of  the  suit  on  

8.10.1984 was within limitation.   (iii) The  First  Appellate  

Court,  however,  accepted  the  contention  of  M/s  Basanth  

Tiles  that  it  had  effected  improvement  on  the  land  and,  

therefore,  directed  the  appellant  to  pay  an  amount  of  

Rs.1,50,000/- to them to get possession of the suit land.  The  

Court also directed the appellant to refund the amount of  

compensation to respondents No.1 to 3 which the appellants  

had  received.   On  these  terms,  the  First  Appellate  Court  

directed the land to be re-conveyed to the appellants.   

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(iv) The Court held that the appellants were always ready  

and willing to perform their part of the contract but there  

was a breach on the part of respondent No.2 and, therefore,  

the  decree  had to  be  passed.   The appeal  was  therefore  

allowed by its  judgment and order dated 30.10.2000, and  

thereby the suit filed by the appellant was decreed.

6. The Government of Karnataka carried the matter  

to the High Court in Regular Second Appeal No. 215/2001,  

and  M/s  Basanth  Tiles  also  filed  RSA  No.137/2001.   Both  

these appeals were heard and decided by a Single Judge of  

the Karnataka High Court together.  The questions of law,  

though not very precisely spelt out, but considered by the  

High Court in its judgment were as follows:-

“(i) Whether  the  First  Appellate  Court  is   justified  in  law  in  granting  a  decree  for   reconveyance  in  the  absence  of  any  de- notification made by the State Govt. under Section   48 of the Land Acquisition Act ?

(ii) Whether in the facts and circumstances   of the case, the respondent No.6 being a bonafide   purchaser and when the petitioners were entitled   only for  damages,  was the First  Appellate  Court   justified in decreeing the suit for reconveyance ?

(iii) Whether  the  suit  was  barred  by  limitation?

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(iv) Whether  there  is  any  mandatory  compliance  of  Section  80  C.P.C,  prior  to  the   institution of suit?

(v) Whether  the  compromise  memo,   alleged to have been filed before the Court in Writ   Petition  No.366/1969  is  not  binding  on  the  respondent  –  Govt.  since  it  had  not  signed  the   compromise memo?”

7. The High Court answered the above questions as  

follows:-  

“(i) That  the  lower  Appellate  Court  had   committed  an  error  in  granting  a  decree  for   reconveyance  although  there  was  no  cause  of   action for the plaintiff to move to the Civil Court to   seek an order of reconveyance. This was because   the  respondent  authorities  took  steps  to  revoke  the allotment made in favour of Basanth Tiles, and   proceeded to act in terms of the compromise well   before  the  suit  was  filed.  Besides  there  was  no   notification withdrawing the concerned land from  the  acquisition  under  Section  48  of  the  Land   Acquisition  Act.  The  first  question  of  law  was   therefore held in favour of the Government.

(ii)  Neither  was  the  plaintiff  entitled  to   reconveyance, nor was M/s Basanth Tiles entitled  to retain possession of the suit property,  having   regard to the stand of the Government and also   the  circumstances  in  which  the  allotment  was   made in their favour.  As far as the claim of M/s   Basanth  Tiles  for  the  improvements  was  concerned, the High Court found that the suit had  been  filed  immediately  after  coming  to  know  about  the  allegedly  illegal  allotment  made  in   favour  of  M/s  Basant  Tiles.   Therefore,  the  improvements if any, would be minimal, and if any   

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improvement had been so made after filing of the   suit,  those  would  be at  the  risk  of  M/s  Basanth   Tiles.   The  High  Court,  therefore,  rejected  the   contention of M/s Basanth Tiles for any damages.

(iii) On  the  issue  of  limitation,  the  High   Court held in favour of the appellant that the real   starting point of the limitation was the date of the   alleged breach by respondent Nos.  1 to 3 when   they allotted the suit land to M/s Basanth Tiles on   30.5.1984.   The  suit  was  therefore  held  to  be   within limitation.

(iv) The High Court held that the issue of a   mandatory notice under Section 80 C.P.C. was not   seriously  contested  by  the  respondents  at  the   appropriate stage, and in fact there was a notice   issued  as  early  as  in  1978,  calling  upon  the   respondents to re-convey the property in terms of   the compromise. The conduct of the respondents   throughout  showed  that  the  suit  had  not  been  seriously objected to or  contested on this point.   Under  such  circumstances  the  contention  could   not be permitted to be raised for the first time in   the  Second  appeal.   The  issue  was  therefore  decided in favour of the appellants.  

(v) It could not be said that the compromise   entered into between the parties was not binding   on the Government.  However, the requirement of   the third defendant/respondent was shown to be   still  surviving,  and  the  allotment  of  land to  M/s   Basanth  Tiles  was  made erroneously,  and  steps   were  taken  for  canceling  this  allotment  even   before  filing  of  the  suit.   Besides  there  was  no   time  limit  provided  for  constructing  the   administrative building. Such being the case, the   petitioner-plaintiff had no cause of action.”  

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8. For the aforesaid reasons the High Court allowed  

the appeal in RSA No. 215 of 2001 filed by the Government,  

and dismissed RSA No.  137 of  2001 filed by M/s Basanth  

Tiles.  No order was made with respect to cost.  The High  

Court held that the Government was entitled to take back  

possession of the said land from M/s Basanth Tiles.  Being  

aggrieved by this judgment and order the Civil Appeal No.  

1361 of 2006 has been filed by Tarabai (Dead) through her  

L.Rs., and Civil Appeal No. 3789-3791 of 2007 is filed by M/s  

Basanth Tiles.

9. As  far  as  the  Civil  Appeal  No.1361  of  2006  

preferred  on  behalf  of  Tarabai  by  her  L.Rs.  is  concerned,  

these appellants can not have any grievance with respect to  

the finding of the High Court that the suit filed by her was  

within limitation. The High Court has rendered a finding that  

the contention with respect to the alleged non-issue of the  

notice under Section 80 could not be permitted to be raised  

for the first time in the second appeal, when this contention  

was  not  raised  seriously  at  any  stage  earlier.  These  

appellants can certainly not have any objection with respect  

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thereto.  In fact a finding was rendered in their favour by the  

High Court that there was a notice issued as early as in 1978  

for  seeking reconveyance of  the property  in  terms of  the  

compromise concerned.

10. The  main  grievance  which  Tarabai  through  her  

L.Rs  have  with  respect  to  the  High  Court  judgment  is  

concerning the finding that there was no cause of action for  

Tarabai  to  move  the  Civil  Court  to  seek  an  order  of  

reconveyance.  This observation of the High Court was based  

on  a  finding  of  fact  that  the  Government  had  moved  to  

revoke the allotment made to M/s Basanth Tiles even before  

the filing of the suit by Tarabai.  In fact the Trial Court had  

held that the Government and its officers had not acted in  

contravention of the compromise.  Therefore, there was no  

reason for the First Appellate Court to reverse this finding of  

fact which is based on the material on record. Thus, there  

was  no  breach  of  the  compromise  on  the  part  of  the  

Government which would necessitate her to file  a suit  for  

specific performance.    Once it is held that the Government  

retracted  its  steps  well  in  time,  there  could  not  be  any  

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decree of specific performance based on the alleged breach  

of the compromise.   The finding of the High Court in this  

behalf, therefore, cannot be disturbed at the instance of the  

appellant-Tarabai.

11. Similarly, it cannot be disputed that there was no  

notification issued for withdrawing the land from acquisition  

as required under Section 48 of  the Land Acquisition Act.  

The concerned parcel of land, therefore, continued to remain  

with the Government.  There was undoubtedly delay on the  

part  of  the  Government  in  taking  steps  which  it  was  

expected to  take,  namely,  to  construct  the  administrative  

building, but that by itself cannot be a ground for decree of  

specific  performance.   In  the  circumstances,  there  is  no  

substance in the appeal filed by Tarabai through her L.Rs.

12. (i) As far as the appeal filed by M/s Basanth Tiles is  

concerned,  they  cannot  be  unhappy  with  respect  to  the  

dismissal of the suit filed by Tarabai.  Their only grievance  

can be with respect to the observations of the High Court  

that Government can recover the land from M/s Basant Tiles.  

It is submitted on their behalf that these observations could  

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not  be  made  in  a  suit  filed  by  Tarabai  against  the  

Government.  Here we must  note that  the sole  reason for  

Tarabai  to  file  her  suit  was this  very  allotment.  Once the  

Government  specifically  contended  and  established  that  

steps for cancellation of the allotment were initiated before  

filing of the suit, the suit had to fail. It was accepted by the  

Government that there was an error in allotting the land to  

M/s Basanth Tiles.  The claim of M/s Basanth Tiles could only  

be through the Government.  If there was an error on the  

part  of  Government  in  making  the  allotment,  the  

Government  could  certainly  retract  its  steps,  cancel  the  

allotment and proceed to recover the land, by due process.  

M/s Basanth Tiles has not raised any plea such as that of  

promissory estoppel  against the Government to claim any  

right.  The observations made by the High Court are to be  

seen in this context.   

(ii) M/s Basanth Tiles were essentially aggrieved by these  

observations  and  not  so  much  with  respect  to  the  

observations that  they were not  entitled to any damages.  

The High Court has explained as to why no such claim for  

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damages  could  be  made  against  the  Government  in  the  

present suit.  

13. Although various authorities were cited on behalf  

of both the appellants on certain peripheral issues, inasmuch  

as  the  principal  issues  involved  in  the  matter  were  as  

discussed  earlier  hereinabove,  and  since  there  was  no  

effective challenge on those aspects, it is not necessary for  

us to go into those submissions. We may, however, add that  

though  the  impugned  decision  arrived  at  by  the  learned  

Judge is  a correct one,  we wish that he would have been  

more careful in the manner in which the judgment is written.  

14. Both the appeals are, therefore, dismissed, though  

without any order as to costs.    

…………..………………………..J.  [ H.L. Gokhale ]

      ………………………………….…..J.          [ Ranjana Prakash Desai ]

New Delhi Dated : September 3, 2013

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