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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.6-7 OF 2013

(Arising out of SLP(C)Nos.11221-11222 of 2008) GHULAM NABI DAR & ORS.    … APPELLANTS

Vs. STATE OF J&K & ORS.    … RESPONDENTS

WITH CIVIL APPEAL NOS.8-9 OF 2013

(Arising out of SLP(C)Nos.14286-14287 of 2008)

J U D G M E N T ALTAMAS KABIR, CJI.

1. Leave granted.

2. The  disputes  between  the  parties  relate  to  

lands  measuring  37  Kanals  5  marlas  comprised  in  

several survey numbers forming the subject matter  

of OWP No. 480 of 2003 and OWP No. 454 of 2005.  On

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21st November,  1980,  the  Custodian  of  Evacuee  

Property,  Kashmir,  issued  a  Notification  under  

Section 6 of the Jammu and Kashmir State Evacuees'  

(Administration of Property) Act, 2006, hereinafter  

referred  to  as  "the  2006  Act",  declaring  the  

aforesaid land to be evacuee property, being in the  

ownership of one Qamar-ud-Din and other evacuees.  

Inasmuch as, the writ petitioners in OWP No. 480 of  

2003, claiming to the tenants-at-will of the land  

involved  in  the  writ  petition,  commenced  earth  

filling, they were stopped from doing so by the  

Evacuee Department.  It is the case of the writ  

petitioners  that  when  they  made  inquiries,  they  

were able to lay their hands on records indicating  

that the lands measuring 11 kanals 6 marlas out of  

the land comprised in the said survey numbers had  

been  taken  over  by  the  Evacuee  Department  and  

placed  at  the  supurdnama  of  the  Custodian  vide  

three seizure memos dated 22nd January, 2003 and 1st

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February,  2003.   Claiming  that  they  were  in  

possession of the land in the capacity of tenants-

at-will since before the aforesaid Act came to be  

enacted,  the  petitioner  in  OWP  No.  480  of  2003  

prayed for the following reliefs:-

"(i) it be declared that Section 6 of  the  J&K  Evacuee  (Administration  of  Property)  Act,  2006  is  unconstitutional;

(ii) it be declared that Section 3 of  the  Agrarian  Reforms  Act,  1976  in  so  far as it excludes the application of  Sections  4  and  8  of  the  tenants  of  evacuee  land  is  ultra  vires the  Constitution.

(iii) That  by  an  appropriate  writ,  direction or order including the writ  in the nature of certiorari following  notification/communication be quashed:-

1. Notification dated 21.11.1980

2. Communication  No.  CEPS/GE/2002/2766-70  dated  17.12.2002.

3. Communication  No.CG(EP)1020/  2003/ 167-Misc. K dated 23.1.2003

4. Three  seizure  memo  dated  2.2.2003

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5. Communication  No.  CEPE- JE/2002/3347-50 dated 6.2.2003

6. Communication  No.  DFI/SG/378  dated 22.2.2003

(iv) That  by  an  appropriate  writ,  direction or order including a writ in  the  nature  of  prohibition  respondents  be restrained from interfering in the  rights of possession of the petitioners  in the land and in their levelling of  land and from fencing.

(v) ........"

Along with the writ petition, the petitioners  

also filed a miscellaneous petition seeking interim  

relief in which it was ordered that the Respondents  

were not to dispossess the petitioners from the  

lands  in  dispute,  till  the  next  date.   The  

petitioners were also restrained from raising any  

construction or changing the nature and character  

of the said lands during the said period.  However,  

when during the pendency of the writ petition, the  

Custodian  started  construction  of  a  shopping

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complex,  in  violation  of  the  said  order  of  

injunction, the petitioners filed another CMP in  

which  notice  was  issued  on  22nd  April,  2004,  

returnable within four weeks, and till then the  

parties  were  directed  to  maintain  status  quo.  

Subsequently,  by  an  order  dated  30th September,  

2004, the Registrar (Judicial) of the High Court  

was appointed as Commissioner to visit and submit a  

report which he did on 7th October, 2004.

3. On receipt of the report and on being satisfied  

that construction work had been undertaken by the  

Custodian  on  the  aforesaid  lands  and  was  being  

proceeded with, the High Court by its order dated  

19th November, 2004, restrained the Respondents from  

raising any construction on the spot.  Since its  

earlier orders had been violated by the Custodian,  

the Station House Officer of the concerned Police  

Station was directed to see that the order of the

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Court was duly complied with, till the petition was  

considered for admission, or until further orders.

4. Aggrieved by the aforesaid order of the learned  

Civil  Judge,  the  Custodian  of  Evacuee  Property  

filed LPA No. 169 of 2004.  Other writ petitioners,  

who also claimed to be in possession of their lands  

as tenants-at-will and as "protected tenants", have  

also challenged the validity of the provisions of  

Section  6  of  the  Jammu  and  Kashmir  Evacuee  

(Administration of Property) Act, 2006 and Section  

3 of the Agrarian Reforms Act, 1976, insofar as it  

excludes the application of Sections 4 and 8 to the  

tenants of evacuee properties.

5. While the matters were pending, serious efforts  

were  made  by  the  parties  for  an  out  of  court  

settlement which ultimately fructified in terms of  a settlement which was submitted before the Court  

by way of CMP No. 128 of 2006.  The Settlement  

presented before the Court was duly signed by the

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Custodian of Evacuee Property, Kashmir and by all  

the writ petitioners and their counsel. While the  

above  miscellaneous  petition  was  pending  

consideration,  the  Advocate  General  filed  an  

application  on  23rd May,  2006,  praying  that  the  

Settlement be not accepted, which application was  

later  withdrawn.   In  the  meantime,  there  was  a  

change in the Government and the Custodian was also  

transferred.  The new Custodian took a decision to  

refer the matter back to the State Government.  On  

10th October,  2006,  the  Custodian  filed  an  

application  praying  for  withdrawal  of  the  

Settlement contained in CMP No. 128 of 2006, and in  

support of such application, the Custodian placed  

reliance upon a letter of the Revenue Department in  

which it was stated that the Revenue Minister had  

accorded  approval  for  reversing  the  earlier  

decision taken on 27/28th March, 2005, for entering  

into a settlement with the occupants of the evacuee

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property.  The said application for withdrawal of  

the Settlement filed by the Custodian came to be  

registered as CMP No. 525 of 2006.

6. The two miscellaneous petitions, being CMP No.  

128 of 2006, filed by the parties for disposing of  

the  appeal  and  writ  petitions  in  terms  of  the  

compromise and CMP No. 525 of 2006, filed by the  

Custodian for withdrawal of the Settlement, came up  

for consideration before the Division Bench of the  

Hon’ble  Mr.  Justice  H.  Imtiaz  Hussain  and  the  

Hon’ble  Mr.  Justice  Mansoor  Ahmad  Mir,  on  15th  

September,  2007.  As  indicated  hereinbefore,  the  

Hon’ble Judges differed on the relief prayed for.  

While  H.  Imtiaz  Hussain,  J.  held  that  the  

Settlement  violated  Rule  13-C  of  the  Jammu  and  

Kashmir  State  Evacuees’  (Administration  of  

Property) Rules, 2008, hereinafter referred to as  

“the  2008  Rules”  and  could  not,  therefore,  be  

accepted by the Court,  Mansoor Ahmad Mir J. held

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that the aforesaid Rule did not apply to the facts  

of the case and that it was nobody’s case, that the  

Settlement arrived at was the outcome of fraud or  

unlawful. His Lordship was also of the view that  

the Settlement having been duly signed and acted  

upon by the parties, the same was binding on the  

parties and could not be withdrawn unilaterally.  

His Lordship, therefore, dismissed CMP No. 525 of  

2006, filed by the Custodian for withdrawal of the  

Settlement and directed the listing of LPA No. 169  

of  2004  and  CMP  No.  128  of  2006,  for  further  

arguments. In view of such differences, the matter  

was referred to Hon’ble the Chief Justice in terms  

of Rule 36(2) of the Jammu and Kashmir High Court  

Rules, for referring the matter to a Third Judge.

The learned third Judge framed three questions  

for consideration, namely,

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(a) whether Rule 13-C of the 2008 Rules is   

attracted to the Settlement arrived at by  

the parties?

(b) whether the Settlement contravenes Rule   

13-C?

(c) whether the Custodian can withdraw from   

the Settlement unilaterally?

7. Before the learned third Judge it was sought to  

be urged on behalf of the State that the chunk of  

the land in question belonged to one Qamar-ud-Din  

who had two brothers, namely, Ahmad Din and Imam  

Din. In the disturbances of 1947, Qamar-ud-Din left  

the State and became an evacuee and his property  

was declared as evacuee property. In 1949 or 1950  

there  was  no  such  record  available  in  the  

Custodians  Department.  Subsequently,  Ahmad  Din  

submitted three applications dated 11th Assuj 2009,  

before the Custodian of Evacuee properties with a

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request  that  three  bungalows  along  with  the  

premises be declared as non-evacuee property as the  

entire  property  was  held  by  the  three  brothers,  

Qamar-ud-Din,  Ahmad  Din  and  Imam  Din.  The  said  

three  applications  were  dismissed  on  grounds  of  

default  on  28th  July,  1956.  An  application  for  

review  of  the  said  order  was  filed  on  20th  

November,  1956,  which  was  disposed  of  by  the  

Custodian by his Order dated 5th September, 1963,  

whereby the close relatives of the evacuees were  

appointed as managers of the properties provided  

they  gave  an  undertaking  that  they  would  submit  

yearly accounts of income and expenditure to the  

Department  and  deposit  the  income  from  the  

properties  regularly  so  that  the  same  could  be  

credited against the names of the evacuees. It was,  

therefore, contended on behalf of the State that in  

terms of the above Orders, the property came under  

the control of the Evacuee Department and was being

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administered  through  its  allottees  and  managers  

appointed by it. It was also the stand of the State  

that once the Custodian came into control of the  

evacuee  properties,  he  decided  to  construct  a  

Shopping Mall over the land and allotted the work  

of  construction  to  a  contractor,  who  started  

raising  the  construction  thereupon.  It  was  also  

urged that notwithstanding the claim of the writ  

petitioners to be in possession of the lands as  

tenants, their rights, if any, in the land, were  

extinguished  once  the  Evacuee  Property  Act  came  

into  effect  and  in  any  case  by  virtue  of  the  

declaration issued under Section 6 of the 2006 Act.

8. It was also the case of the State that any  

allotment of lands belonging to the State could not  

have  been  settled  without  complying  with  the  

provisions of Rule 13-C of the 2008 Rules and such  

contravention invalidated the Settlement which was,

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therefore, illegal and was rightly declared to be  

so by H. Imtiaz Hussain, J.

On  the  other  hand,  it  was  contended  by  Mr.  

Shah, appearing for the writ petitioners, that the  

Settlement between the parties was in the nature of  

a contract and had been arrived at by the parties  

who enjoyed the freedom to contract. It was also  

submitted by him that Rule 13-C could have applied  

if the land to be allotted was vacant. According to  

Mr. Shah, since the writ petitioners were holding  

the land as tenants, it was not vacant for the  

purposes of Rule 13-C of the Rules. According to  

Mr.  Shah,  the  views  expressed  by  the  Hon’ble  

Justice Mansoor Ahmad Mir was in consonance with  

Rule 13-C, which in the facts of the case, could  

not have any application to the lands in question.

9. It was also contended by Mr. Shah that even  

assuming that Rule 13-C was applicable, even then  

there was no violation of its provisions as the

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premium was fixed in the present case by taking  

into  consideration  the  fact  that  the  writ  

petitioners were surrendering all their rights in  

respect of the whole land. The premium was fixed by  

the members of a committee headed by none else than  

the Minister-in-Charge of the Custodian Department.  

Mr. Shah also submitted before the learned third  

Judge that the rate of Rs.30 lakhs per kanal, as  

indicated by the Appellants, was not based on any  

relevant material.

10. As mentioned hereinbefore, the controversy in  

this case related to the applicability of Rule 13-C  

in regard to the land in question.

In his judgment and order dated 25th March,  

2008, the learned third Judge, Y.P. Nargotra. J.  

agreed with the view taken by H. Imtiaz Hussain, J.  

that  the  parties  had  violated  Rule  13-C  of  the  

above-mentioned  Rules  and  the  Custodian  was,

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therefore, competent to unilaterally withdraw the  

same. The Learned Judge came to such a conclusion  

on  the  ground  that  in  terms  of  the  Settlement  

arrived  at,  the  writ  petitioners  would  have  to  

surrender all their rights over the entire land,  

which  would  render  the  land  vacant  within  the  

meaning of Rule 13-C.  

11. On the question as to whether the Settlement  

contravened Rule 13-C, the learned third Judge was  

of the view that the premium to be paid for the  

lease  to  be  granted  to  the  respondents/writ  

petitioners  under  the  Settlement  had  not  been  

determined by putting the lease to an open auction  

which  was  in  contravention  of  the  mandatory  

requirement  of  Rule  13-C.  The  learned  Judge,  

therefore,  held  that  the  Settlement  contravened  

Rule 13-C on the point of determining the premium  

payable.

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12. On  the  third  question  as  to  whether  the  

Custodian  could  withdraw  from  the  Settlement  

unilaterally,  the  learned  third  Judge  held  that  

Rule 3 of Order 23 CPC, which related to compromise  

of suits, would have application provided it was  

proved to the satisfaction of the Court that the  

suit had been adjusted wholly or in part by any  

lawful agreement or compromise. In such case, the  

Court  would  have  the  discretion  to  order  such  

agreement or compromise to be recorded and shall  

pass a decree in accordance therewith in so far as  

it related to the parties to the suit. The learned  

third Judge took note of the Explanation to Rule 3  

of Order 23 CPC, which provides that an agreement  

or compromise which is void or voidable under the  

Contract  Act  shall  not  be  deemed  to  be  lawful  

within  the  meaning  of  the  Rule.  Accordingly,  in  

terms of the above Explanation, an agreement not

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found to be lawful, could be rejected by the Court  

for the purpose of passing a decree.  

The  learned  third  Judge  then  referred  to  

Section 23 of the Contract Act, 1872, whereby any  

agreement  which  the  Court  regards  as  immoral  or  

opposed  to  public  policy,  is  void.  The  learned  

third Judge held that the Settlement was directly  

hit  by  Section  23  of  the  Contract  Act  as  it  

defeated  the  object  of  Rule  13-C  and  was,  

therefore, unlawful for the purposes of Rule 3 of  

Order 23 CPC. The Learned Third Judge held that the  

Settlement  being  unlawful,  the  Custodian  was  

entitled  to  withdraw  from  the  Settlement  

unilaterally. Agreeing with the views expressed by  

H.  Imtiaz  Hussain,  J.,  the  learned  third  Judge  

observed that by consent or agreement, the parties  

cannot achieve what is contrary to law and that the  

Settlement arrived at between the parties could not  

be accepted.

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13. As  a  result  of  the  above,  while  the  two  

miscellaneous  petitions  were  disposed  of  by  the  

High Court, LPA No. 169 of 2004 and OWP No. 480 of  

2003,  filed  by  the  Appellants  challenging  the  

Notification dated 21st November, 1980, are still  

pending decision in the High Court.

14. These two Appeals arise from the final judgment  

and  order  dated  25th March,  2008,  passed  by  the  

learned third Judge of the Jammu & Kashmir High  

Court  at  Srinagar,  in  the  said  miscellaneous  

applications.   

15. Briefly stated, the grievance of the Appellants  

is directed against the order passed by H. Imtiaz  

Hussain, J., holding that the Settlement violated  

Rule  13-C  of  the  2008  Rules  and  could  not,  

therefore, be accepted by the Court.  

16. Appearing for the Appellants, Mr. Zaffar Ahmad  

Shah,  learned  senior  counsel,  reiterated  the

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submissions  made  before  the  High  Court  and  

submitted  that,  although,  the  Evacuee  Department  

issued the Notification dated 21st November, 1980,  

the same was neither gazetted nor implemented till  

1999, when an entry was made in the Revenue Records  

in  that  regard.   Mr.  Shah  urged  that  all  the  

Appellants were occupancy tenants in respect of the  

lands in which they were in possession and such  

possession was protected under Section 16 of the  

2006  Act.   The  impugned  order  of  the  Custodian  

General, being contrary to the said provisions, was  

illegal and liable to be quashed.

17. Mr. Shah contended that the lands in question  

and the lands comprised in the surrounding areas  

were agricultural lands and had been utilised for  

cultivation  of  paddy  for  decades.   There  was  a  

change in user of the surrounding lands, when a  

bye-pass road and a new airport was constructed.  

As a result of such developments and the expansion

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of the city, a large number of residential houses  

and  commercial  establishments  came  to  be  

constructed in and around the area called Hyder  

Pora.  On account of such unrestrained construction  

activities, the level of land used in construction  

work was raised considerably on account of earth  

filling.  The lands of the Appellants, on the other  

hand,  continued  to  be  low-lying  and  gradually  

became receptacles of water, making them unfit for  

cultivation.  In order to render the lands usable,  

the Appellants also resorted to earth filling to  

prevent collection and stagnation of water.  It is,  

at  this  stage,  that  the  functionaries  of  the  

Evacuee  Department  intervened  and  stopped  the  

Appellants  continuing  with  earth  filling  of  the  

lands in question.   

18. Mr.  Shah  submitted  that  after  purported  ex  

parte enquiries  were  made  by  the  Custodian  

General's  Office,  letters  were  issued  to  the

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Custodian  of  Evacuee  Property  directing  him  to  

resume possession of the lands under the occupation  

of the Appellants.  However, the Appellants were  

kept completely in the dark regarding such enquiry  

and  the  procedure  adopted  by  the  Office  of  the  

Custodian  General,  in  arriving  at  a  final  

conclusion regarding the status of the land behind  

the  back  of  the  Appellants,  was  without  legal  

sanction and was liable to be quashed.

19. Mr. Shah urged that the Appellants and their  

predecessors-in-interest  had  been  holding  and  

possessing the lands in question much before 14th  

August, 1947, in their capacity as tenants and are,  

therefore, protected in law against any action of  

the Respondents.  Mr. Shah urged that, although,  

the  Respondents  claimed  that  the  property  in  

question belongs to one Qamer-ud-Din, he was never  

in possession of the lands as on 1st March, 1947, or  

on  14th August,  1947  and  the  predecessors-in-

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interest  of  the  Appellants  were  all  along  in  

occupation of the property as tenants and, at no  

stage, did they cease to occupy the said property.  

20. Mr. Shah urged that under Section 5 of the 2006  

Act, all evacuee property situated in the State  

would be deemed to have vested in the Custodian.  

However, in order to vest in the Custodian, the  

properties had to be evacuee property.  Mr. Shah  

submitted that in the instant case, Qamer-ud-Din  

was not an evacuee within the meaning of Section  

2(c)  of  the  above  Act,  nor  did  he  acquire  the  

property in the manner indicated in Section 2(c)

(iii)  thereof.   Mr.  Shah  submitted  that  the  

property  has  not  been  registered  as  evacuee  

property by the Custodian, in terms of Section 5 of  

the 2006 Act.

21. The learned counsel then submitted that Section  

6  of  the  2006  Act  was  unconstitutional  and  was  

liable to be struck down.  It was urged that before

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issuing a notification under Section 6 of the 2006  

Act, it was only incumbent upon the authorities to  

ensure that the principles of natural justice were  

followed.   

22. Mr. Shah contended that the 2008 Rules provide  

that in respect of any evacuee property which vests  

in the Custodian, but is in the possession of some  

other  person  having  no  lawful  title  to  such  

possession, the Custodian may evict the person from  

such property in the manner indicated in the 2006  

Act and the 2008 Rules.    

23. Mr. Bhaskar Gupta, learned Senior Advocate, who  

appeared for the Appellants, Ghulam Mohammad Dar  

and others, emphasised the use of the expression  

"vacant" in Rule 13-C of the 2008 Rules.  Mr. Gupta  

submitted  that  the  expression  "vacant"  has  been  

defined in Black's Law Dictionary to mean "empty,  

unoccupied,  absolutely  free,  and  unclaimed".  

Accordingly, land in possession of any person prior

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to coming into force of the Act and the Rules,  

could  not  be  said  to  be  vacant  land  and,  

accordingly, Rule 13-C of the 2008 Rules would have  

no application to the lands in question at all.   

24. Mr.  Gupta  submitted  that  in  terms  of  the  

Settlement which has been arrived at between the  

Appellants and the State agencies, the Appellants  

had surrendered possession of 22 kanals of prime  

land out of 37 kanals and 5 marlas in favour of the  

Custodian Department and the Appellants continued  

to  be  in  possession  of  the  remaining  lands.  

Furthermore, according to Mr. Gupta, by the raising  

of  constructions  on  the  surrendered  land,  the  

Settlement had been duly acted upon and the State  

could not, therefore, now resile therefrom.  It was  

no longer open for the State to contend that they  

had wrongly arrived at the Settlement.  Mr. Gupta  

also pointed out that the fact that the Appellants  

were and continued to be in possession of the lands

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in question, would be evident also from a letter  

written on behalf of the State Government, in its  

Revenue  Department,  to  the  Custodian  General  on  

10th October, 2006 regarding the Settlement to be  

filed in LPA No. 169 of 2004 and OWP No. 480 of  

2003.  It was pointed out that, in the said letter,  

the State Government had acknowledged the fact that  

the Appellants were the occupants of the property  

in  question,  even  though  such  occupation  was  

referred to as illegal.  Mr. Gupta submitted that  

what was important was the acknowledgement of the  

fact that the Appellants were in actual possession  

of the lands in question.   

25. It was lastly submitted that Rule 3 of Order 23  

CPC permits compromise of suits and where it is  

proved to the satisfaction of the Court that the  

same had been adjusted wholly or in part by any  

lawful  agreement  or  compromise  in  writing  and  

signed by the parties, the Court shall order such

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agreement,  compromise  or  satisfaction  to  be  

recorded and then proceed to pass a decree.

26. Mr.  Sunil  Fernandes,  learned  counsel,  who  

appeared  for  the  State  of  Jammu  and  Kashmir,  

submitted  that  the  two  writ  petitions  regarding  

resumption of possession of the lands in question  

were still pending before the High Court and the  

validity  of  Section  6  of  the  2006  Act  was  the  

subject matter of challenge therein.  The ambit of  

the dispute between the parties before the High  

Court was confined to the question of validity of  

Section 6 of the 2006 Act, as also the challenge to  

the Settlement arrived at between the parties.

27. Mr.  Fernandes  urged  that  the  view  of  the  

learned third Judge represented the majority view  

in  the  matter,  which  did  not  warrant  any  

interference. These appeals were, therefore, liable  

to be dismissed.

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28. The  main  plank  of  the  submissions  made  on  

behalf  of  the  Appellants  is  that  the  lands  in  

question are not evacuee property, and, that, the  

Appellants were tenants thereof since before the  

Act came into force.  In fact, it is the case of  

some of the Appellants that their predecessors-in-

interest  were  in  occupation  of  the  lands  in  

question even  prior to  1st March,  1947, and  14th  

August, 1947, which clearly excluded the Appellants  

from the operation of the provisions of the 2006  

Act and the 2008 Rules.  On the other hand, as  

"protected tenants", the Appellants were entitled  

to  continue  in  possession  of  the  lands  and,  

particularly so, in view of the Settlement arrived  

at  between  the  Appellants  and  the  State  

authorities.

29. That, there was a settlement arrived at between  

the parties is not in issue.  It is also not in  

issue that after filing the Settlement in Court and

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asking  the  Court  to  take  action  thereupon,  an  

application was made on behalf of the Custodian of  

Evacuee Property, Jammu and Kashmir, for leave to  

withdraw CMP No. 128 of 2006 on the ground that the  

Chief Minister had reversed the earlier decision  

taken on 27/28th March, 2005 and, that, accordingly,  

the deponent, in the affidavit, was not competent  

to enter into the Settlement, as the decision to do  

so had been withdrawn by the competent authority.

30. The question to be decided is whether having  

entered into a Settlement, which stood concluded  

and had been acted upon by the State Government by  

raising  constructions  on  the  surrendered  lands,  

could  the  Settlement  have  been  withdrawn  

unilaterally  only  at  the  instance  of  the  State  

Government?  

31.  The other branch of submissions made on behalf  

of the Appellants, which merits consideration, is  

whether on Section 8 of the 2006 Act having been

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declared ultra vires, a party could be left without  

a remedy as the right to challenge a Notification  

issued under Section 6 stood extinguished by such  

declaration?

32. In addition to the above, the provisions of  

Section 16 of the 2006 Act may also be noticed.  

Section 16, which deals with occupancy and tenancy  

rights provides as follows :-

"16. Occupancy or tenancy right not  to be extinguished - Notwithstanding  anything contained in any other law  for  the  time  being  in  force,  the  right of occupancy in any land of an  evacuee  which  has  vested  in  the  Custodian shall not be extinguished,  nor  shall  an  evacuee  or  the  Custodian,  whether  as  an  occupancy  tenant, or a tenant for a fixed term  of any land, be liable to be ejected  or deemed to have become so liable on  any ground whatsoever for any default  of the Custodian."

It is clear from Section 16 that on account of  

the non-obstante clause, the provisions of Section  

16 will prevail over any other law for the time

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being in force and the right of occupancy in any  

land  of  an  evacuee  shall  not  be  extinguished.  

Accordingly, in the event the tenants were enjoying  

occupancy rights in respect of the lands in their  

possession, they could not be evicted therefrom by  

virtue of the Notification published under Section  

6 of the 2006 Act.

However, the protection under Section 16 will  

be available only in respect of evacuee property  

after a determination to such effect is made.  A  

unilateral declaration is clearly opposed to the  

principles  of  natural  justice  and  administrative  

fair play and cannot be supported.

33. As far as the second limb of Mr. Shah and Mr.  

Gupta's submissions is concerned, the same being  

the subject matter of the writ proceedings pending  

before the High Court, it would not be proper on  

our part to express any opinion in respect thereof.

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34. Having  considered  the  submissions  made  on  

behalf of the respective parties, we are inclined  

to  accept  the  submission  made  on  behalf  of  the  

Appellants that the Notification published on 21st  

November, 1980, under Section 6 of the 2006 Act,  

declaring the lands under the possession of the  

Appellants to be vested in the Custodian of Evacuee  

Property,  stood  vitiated,  as  the  Appellants  had  

been denied an opportunity of explaining that they  

were  not  mere  occupants  of  the  property  in  

question,  but  tenants  thereof,  in  which  case,  

neither the provisions of Rule 9 nor Rule 13-C of  

the 2008 Rules would have any application to the  

facts of this case.

35.  Apart from the above, the Settlement which was  

entered into between the writ petitioners and the  

State, was dependent on several factors, including  

the  fact  that  the  occupants  of  the  lands  in  

question had surrendered 22 kanals of prime land

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out of 37 kanals and 5 marlas in favour of the  

Custodian Department while remaining in possession  

of 15 kanals and 5 marlas, which were to be settled  

with  them.  While,  on  the  one  hand,  the  State  

authorities took advantage of the Settlement and  

constructions were raised on the surrendered lands,  

a stand was later taken on behalf of the State  

Government that the Settlement stood vitiated on  

account of non-compliance with the provisions of  

Rule 13-C of the 2008 Rules.  The fact situation of  

this  case  is  different  from  the  circumstances  

contemplated under Rule 13-C of the 2008 Rules.  In  

the  present  case,  the  lands  covered  by  the  

Settlement were not vacant and were not, therefore,  

within the ambit of Rule 13-C when the Settlement  

was at the gestation stage. It is only under the  

Settlement that the claims and rights, if any, of  

the  writ  petitioners  were  required  to  be  

surrendered and, therefore, the question of actual

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surrender of possession of 22 kanals of land out of  

37 kanals and 5 marlas, was to follow, leaving a  

balance of 15 kanals and 5 marlas to be allotted to  

the occupancy rights and tenants-at-will in respect  

thereof.

36. The special facts of the case set the present  

Agreement/Settlement apart from the cases of grant  

of lease of vacant lands in terms of Rule 13-C and  

has,  therefore,  to  be  treated  differently.  

Firstly, as the lands were not vacant, the very  

first criterion of Rule 13-C, was not satisfied and  

the lease of the lands were to be granted as part  

of the settlement packet, which included surrender  

of 22 kanals of prime land.  We are inclined to  

agree with the views expressed by Mansoor Ahmad  

Mir, J. that in the special facts of this case,  

Rule  13-C  of  the  2008  Rules  would  have  no  

application to the Settlement arrived at between  

the  parties  and  the  same  were  not,  therefore,

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vitiated for not putting the lands to auction to  

determine the premium to be paid for the leases to  

be granted in respect thereof.  As observed by His  

Lordship, it was nobody's case that the Settlement  

was the outcome of any fraud or was unlawful and  

the same, having been signed and acted upon, was  

binding on the parties and could not be withdrawn  

unilaterally.  

37. In our view, the Settlement arrived at between  

the parties and filed before the High Court for  

acceptance by way of CMP No.128 of 2006 is lawful  

and within the scope of Sub-Rule (3) of Order 23 of  

the Code of Civil Procedure.  The decision holding  

the Settlement to be contrary to the provisions of  

Rule 13-C of the 2008 Rules, as held by H. Imtiyaz  

Hussain, J. on 15th September, 2007, and affirmed  

by the third learned Judge, Y.P. Nargotra, J. by  

his  judgment  and  order  dated  25th  March,  2008,  

cannot  be  sustained  and  is  set  aside.

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Consequently, the view expressed by Mansoor Ahmad  

Mir,  J.  is  upheld.   CMP  No.525  of  2006  is,  

accordingly, dismissed and CMP No.128 of 2006 is  

allowed.  The  High  Court  shall  proceed  to  pass  

appropriate orders for acceptance of the out-of-

Court settlement and for adjustment of the rights  

of the parties in terms thereof in the LPA as well  

as in OWP No.480 of 2003 and OWP No.454 of 2005.   

38. Since,  in  these  appeals  we  have  only  been  

called  upon  to  consider  as  to  whether  the  

Settlement  arrived  at  between  the  parties  stood  

vitiated  on  account  of  non-compliance  with  the  

provisions of Rule 13-C of the 2008 Rules, we have  

not expressed any opinion with regard to the second  

limb  of  the  submissions  advanced  regarding  the  

constitutionality of Section 6 of the 2006 Act.  

The said issue is, accordingly, left to the High  

Court for decision.  We make it clear that whatever  

has been expressed in this judgment, shall not in

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any way prejudice and/or affect the outcome of the  

decision of the High Court in the said matter.  

39.  The  appeals  are,  accordingly,  disposed  of.  

There will, however, be no order as to costs.

...................CJI.    (ALTAMAS KABIR)

.....................J.    (SURINDER SINGH NIJJAR)

.....................J.  (J. CHELAMESWAR)

New Delhi Dated: January 03, 2013.