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REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.    10853        of 2018  (arising out of SLP (C) No.18959 /2017)

NAGPUR IMPROVEMENT TRUST                ...APPELLANT(S)  

  VERSUS  

SHEELA RAMCHANDRA TIKHE              ..RESPONDENT(S)  

J U D G M E N T ASHOK BHUSHAN,J.

Leave granted.

2. This appeal has been filed by Nagpur Improvement

Trust, challenging the judgment dated 14.03.2017 of High

Court of Judicature Bombay at Nagpur in Second Appeal

No. 122 of 2015, by which judgment the Second Appeal

filed by the respondent has been allowed by setting

aside the judgment of lower appellate court and

restoring the judgment of trial court decreeing the

suit.

3.  Brief facts of the case necessary to be noted for

deciding this appeal are:­

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The Nagpur Improvement Trust, the appellant has

been constituted under the Nagpur Improvement Trust

Act, 1936.   For the purposes of Drainage and

Sewerage Scheme Part­II, notification under Section

39 of the Nagpur Improvement Trust Act, 1936 was

issued on 27.11.1953 for acquiring 44.61 acres of

land of the respondent.   An award was passed on

31.12.1962 determining the compensation of

Rs.23,500/­ on the basis of compromise, which

compensation amount was paid to the respondent and

possession was taken over by the appellant of the

land.  On taking up the possession, the land vested

in the appellant, which became the absolute owner.

A statutory rule namely, Nagpur Improvement Trust

Land Disposal Rules, 1955 was framed in exercise of

power under Nagpur Improvement Trust Act, 1936 for

disposal of land by the Nagpur Improvement Trust.

As per Rule 3 of the Statutory Rules, 1955, one of

the mode of transfer of trust land was by direct

negotiation with the party.   With regard to land

admeasuring  44.61  acres  as  noted  above,  a  policy

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decision was taken by the Board of the Trust dated

03.05.1968 for disposal of land to the owners on

lease  by charging  the  determined  premium and  the

ground rent.   The appellant accordingly invited

application for re­allotment of the land on lease.

The respondent filed an application dated 03.09.1975

for re­allotment of entire 44.61 acres of land. A

decision dated 06.10.1975 was taken to re­allot the

44.61 acres to the respondent on the terms and

conditions stipulated in the Board Resolution dated

03.05.1968.   By letter dated 16.10.1975, the

appellant informed the respondent in reference to

her application dated 03.09.1975 that land acquired

by the Trust may be allotted to her on the terms and

conditions as mentioned in the letter.  The letter

dated 16.10.1975 communicated that amount of

consideration for allotment would be 1.5 times of

the amount received by them from the Land

Acquisition Officer.   The lessee can use the land

only for Agriculture purposes and the amount of

consideration will have to be made in maximum 10

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installments.   The respondent was required to

deposit amount of Rs.3,525/­ towards first

installment and sign the form of terms and

conditions of  the  allotment, only  after  that  the

Trust would be able to take further action in the

matter.

The respondent in reply to the aforesaid letter

wrote back to the appellant on 01.11.1975 requesting

to revise the amount of premium payable by her.  The

respondent wrote further letters, lastly on

02.03.1982, again reiterating her request to reduce

the amount.   It was further requested that she

should be given the land measuring 44.61 acres  at

the cost of acquisition only.   The letter dated

02.03.1982 was replied by the appellant vide letter

dated 09.06.1982 allocating land measuring 24 acres

out of 44.61 acres.   The revised premium for

allotment of 24 acres was fixed as Rs.19,230/­ and

first installment of 10% was requested to be paid

immediately and to further accept terms and

conditions of allotment. The respondent acknowledged

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the allotment letter dated 09.06.1982 and

communicated her acceptance on 15.06.1982. The

respondent accepted the allotment on revised

premium.   In pursuance of the acceptance of

allotment letter dated 09.06.1982 allotting 24 acres

of land on terms and conditions mentioned therein,

the possession of 24 acres of land was also handed

over to the respondent on 11.11.1982. The respondent

after taking possession of 24 acres of land again

wrote a letter dated 17.06.1983 thanking the

appellant for allotment of 24 acres of land and

further requesting to release remaining 20.61 acres

of land.  The appellant wrote on 31.12.1986 to the

respondent to pay Rs.4514.95 due from her. The

respondent thereafter sent various representations

for allotment of remaining 20.61 acres of land.  On

09.02.1989, a lease was executed by the appellant in

favour of respondent for 24 acres of land as was

allotted by allotment letter dated 09.06.1982.  The

respondent filed a suit – Regular Civil Suit No.

2515 of 1989 against the Nagpur Improvement Trust,

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praying for following reliefs:­

(a) Declare that the plaintiff is entitled to

re­allotment of 20.61 acres of her land to

her to the exclusion of anybody else as

the acquisition of the plaintiff’s land

for the purpose of defendant’s scheme is

not required by the defendant for its

scheme.  

(b) Issue a mandatory injunction directing the

defendant to re­allot 20.61 acres of land

out of survey no.9/1, 11 and 9/2 of Mouza

Godani, Umrer Road, Nagpur, to the

plaintiff and execute a lease indenture

accordingly in favour of the plaintiff.

(c) Issue mandatory injunction directing the

defendant to make the offer of her land

admeasuring 20.61 acres of suit land

S/Nos.9/1, 11, 9/2 of Mouza Gondhani,

Umrer Road, Nagpur to the plaintiffs land

is not required by the defendant for its

scheme and the defendant a permanently

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restrained from making offer of plaintiffs

remaining suit land to anybody else in any

manner and under any pretext.

(d) Declare that the plaintiffs suit land i.e.

20.6 acres of land in Survey Nos. 9/1, 11,

9/2 of Mouza Godhani, Umrer Road, Nagpur,

has been unnecessarily acquired with

malafide intention and that it was never

required and needed by the defendant for

its drainage and Sewerage Disposal Scheme

Part­II as firstly notified on 27.11.1983,

as per award dated 31.12.1962.

(e) Saddle the costs of the suit on the

defendant and

(f) Grant any other relief which this Hon’ble

Court deems fit in the facts and

circumstances of the case.   

The trial court framed following issues:­

1) Does the plaintiff prove by abuse of

process of law, malafidely and under

colorabale exercise of power that

defendant has unnecessarily acquired her

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land?  

2) Does she further prove that she has the

preferential  right  to  get  reallotment  of

remaining 20.61 acres of land?

3) Does she further prove that she had

deposited Rs.4515.95 for allotment of

remaining 20.61 acres of land?

4) Does she further prove that defendant is

avoiding  to re­allot  her  remaining  20.61

acres of land?

5) Whether plaintiff is entitled to get

relief as prayed?

6) What order and decree?

The trial court held that Issue No. 1 does not

survive.   Issue No.3 was decided against the

plaintiff, however, trial court answered the Issue

Nos. 2, 4 and 5 in favour of the plaintiff and

decreed the suit holding that plaintiff is entitled

for allotment of remaining 20.61 acres of land.

Plaintiff was directed to deposit remaining premium

amount of Rs.16,295/­ along with 10% p.a. interest

and the appellant was directed to execute the lease­

deed of land admeasuring 20.61 acres in favour of

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the respondent.   

The appellant aggrieved by the judgment and

decree of the trial court filed a Regular Civil

Appeal No. 632 of 2007.  The District Judge, Nagpur

formulated following points for consideration:­

1) Whether respondent­plaintiff is entitled to

allotment of the suit land?

2) Is the suit barred by time?

3) Is the judgment and decree impugned herein

call for interference?

4) What order?

The learned District Judge held that plaintiff

was not entitled for allotment.  The District Judge

further held that suit filed by the plaintiff was

virtually  a  suit  for specific  performance  of  the

letter of allotment dated 16.10.1975 and suit having

been filed beyond a period of 3 years is barred by

time.   The District Judge vide judgment dated

26.08.2014 allowed the appeal, set aside the decree

of the trial court and dismissed the suit.  Against

the judgment of the Appellate Court, second appeal

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was filed by the respondent before the High Court.

The High Court framed following two substantial

questions of law in the appeal:­

(1) Whether the lower appellate Court erred in

applying and relying on the Nagpur

Improvement Trust Land Disposal Rules,

1983, when in fact what was sought to be

enforced by the appellant was the order

dated 16.10.1975 in consonance with

letter/order dated 06.10.1975 passed in

terms of Board Resolution dated

03.05.1968, i.e. decision taken by the

respondent much prior to the framing of

Rules of 1983?

(2) Once the Nagpur Improvement Trust, the

acquiring body chooses to re­allot the

land acquired, whether such action of re­

allotment can be enforced in the Court of

Law?

The High Court held that plaintiff was entitled

for allotment of 20.61 acres of land in view of

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resolution of the Board dated 03.05.1968.  The High

Court also held that the Rules namely Nagpur

Improvement Trust Land Disposal Rules, 1983 having

came into force on 18.05.1983 was not applicable to

the Board Resolution dated 03.05.1968 and the

decision taken on 06.10.1975 and 16.10.1975.   The

High Court further held that trial court having not

framed any issues regarding limitation, the first

appellate Court committed error in holding that the

suit was barred by limitation, consequently, the

second appeal has been allowed by the High Court,

restoring the judgment and decree of the trial

court. The Nagpur Improvement Trust being aggrieved

by the judgment of the High Court has come up in

this appeal.            

4. We have heard Shri Shyam Divan, learned senior

counsel and Shri Huzefa Ahmadi, learned senior counsel

for the appellant.   We have also heard Shri Mukul

Rohtagi, learned senior counsel, who   has appeared for

the respondent.  

5. Learned counsel for the appellant submitted that

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suit filed by the plaintiff was barred by limitation.

The appellant had claimed re­allotment of 44.61 acres of

land as per Resolution of the Board dated 03.05.1968.

The Board having taken a decision to allot only 24 acres

of land, which was communicated by letter dated

09.06.1982,  the  cause  of action  with regard  to  20.61

acres of land arose on the said very date and suit

having been filed in the year 1989 is barred by time.

It is further submitted that after enforcement of Rules,

1983, Rule 5 provided for manner of disposal of land and

there being no statutory provision for re­allotment of

land to the land owner from whom land was acquired, the

suit filed by the plaintiff for claiming re­allotment

could not have been decreed.  Earlier Rules, 1955, which

permitted allotment by direct negotiations having been

rescinded and statutory Rules, 1983 created a

prohibition for allotment of any land of the Trust

except as Rule 5(2), the claim of the plaintiff was

liable to  be  dismissed  and the  trial  court  committed

error in decreeing the suit.   It is further submitted

that even the Rules 1955, Rule 3(a), which provided for

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allotment of land by direct negotiations was struck down

by a Division Bench of the Bombay High Court vide its

judgment dated 7/20.09.2004  Transport Nagar Free Zone

Co­operative Society Limited Vs. Nagpur Improvement

Trust, 2005(3) Bom.C.R.485. The plaintiff could not have

relied on Rules, 1955 claiming allotment. The High Court

committed error in observing that First Appellate Court

erred in considering the question of limitation when no

issue was framed by the trial court.   It is submitted

that suit having been barred by limitation, the

Appellate Court was well within its jurisdiction to

enter into the issue of limitation and hold that the

suit was barred by time.   The suit filed in the year

1989 was clearly barred by time and was rightly

dismissed by the First Appellate Court.  The High Court

committed error in holding that Statutory Rules, 1983

were not applicable.     

6.  Shri Mukul Rohatgi, learned senior counsel refuting

the submission of counsel for the appellant contends

that plaintiff was clearly entitled for allotment of

20.61 acres of balance area of land as was already

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allotted by letter dated 16.10.1975. The allotment of

land to the plaintiff was under Rule 5 of Rules, 1955.

Hence, Division Bench judgment relied by the appellant

in  Transport Nagar Free Zone Co­operative Society

Limited (supra) is not applicable. The resolution having

been passed by the Board to re­allot area acquired from

plaintiff, it was no longer a matter of contract. The

letter dated 09.06.1982 allotting 24 acres of land

cannot be said to be letter denying allotment of 44.61

acres, hence no cause of action arose to the plaintiff

in the year 1982 and first time cause of action arose in

the year 1989 when lease­deed was executed. Hence, the

suit of the plaintiff was not barred by limitation. The

suit of the plaintiff was filed under Section 39 of the

Specific Relief Act, 1963 by which plaintiff was

enforcing her entitlement.  

7. Learned counsel for the respondent further contends

that present is not a case where this Court may exercise

its jurisdiction under Article 136 of the Constitution

of India by interfering in the judgment of the High

Court. The total area of land was 44.61 acres which was

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owned by the plaintiff and was acquired and Trust having

taken a decision to return the land to land owner since

it was no longer required for the scheme, the plaintiff

has every right to receive acquired area of 44.61 acres

and no error has been committed by the trial court in

decreeing the suit.

8. We have considered the submissions of the learned

counsel for the parties and perused the records.

9. The principal issue which needs to be decided is as

to whether trial court was right in holding that

plaintiff was entitled for allotment of 20.61 acres of

land for which decree was granted. From the facts

noticed above, there is no dispute between the parties

that in pursuance of resolution dated 03.05.1968 of the

Board, plaintiff had made an application on 03.09.1975

for allotment of entire 44.61 acres of land and a letter

of allotment dated 16.10.1975 for 44.61 acres of land

was issued. The allotment letter dated 16.10.1975

contains certain conditions. It is useful to extract the

communication dated 16.10.1975 which is to the following

effect:

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“With reference to the above application letter this is to inform you that under the drainage and sewage disposal scheme allotment of 44.61 acres land in Khasra NO.9­1,9­2 and 11 out of excess land acquired by the Trust may be allotted to you on the terms and conditions as mentioned in lease deed subjected to using it only for agricultural purpose.

1. The amount of consideration for the above land would be 1.50 times of the amount   received from Land Acquisition Officer.

2. The allotment from the Trust Layout would be done on  the  basis of lease for which Land Rent of 2% of the value of   consideration will have to be paid.

3. The lessee can use the said land only for agricultural purpose. For irrigating the  land the water of sewage flow would be   provided by Nagpur Improvement Trust   and/or Nagpur Municipal Corporation as   per the rate fixed up by Nagpur Municipal Corporation whenever possible.

4. The amount of consideration will have to  be made in maximum 10 instalments and on  the remaining unpaid amount of the   consideration interest would be charged  at the  rate of 10% p.a.

Hence you are required to deposit amount of Rs.3,525/­ towards first instalment of the consideration in this office at the earliest and sign the form of terms and conditions of the allotment. Only after that the Trust would be able to take further action in the matter which please note.”

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10. On receipt of letter dated 16.10.1975 appellant

requested for reduction of proportionate value of the

premium from the total amount and further wrote on

02.03.1982 to the Trust wherein rate of 1.5 times of the

amount of compensation was asked to be reduced. In the

letter dated 02.03.1982 following request was made by

the plaintiff:

"Considering all the situation stated above, how can I give you more amount as cost of field which you acquired I would like to request you to give the same at the cost of acquisition only. Further terms are acceptable to me, at any time.

If you do not consider my above request, I will have to move the Govt. for shelter.”

11. After  receipt  of the letter dated  02.03.1982 the

Trust by letter dated 09.06.1982 made allotment of 24

acres out of 44.61 acres of land to the following

effect:

"With reference to your application mentioned above this is to inform that the Chairman is pleased to consider your request for allotment of land measuring about 24 acres out of 44.61 acres of land   acquired under drainage and sewerage disposal scheme on the same terms and conditions informed to you vide No.ES/7821 dated 16.10.1975. The revised premium for allotment of 24 acres would be

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about Rs.19.230/­ and you will have to pay 1st

installment 10% of the premium immediately and accept the terms and conditions for allotment and sign necessary lease indenture etc.”

12. The possession of 24 acres of land was also handed

over to the respondent on 11.11.1982. The plaintiff thus

was well aware that her request for allotment of entire

44.61 acres was not acceded to and only 24 acres have

been allotted. Subsequent execution of the lease dated

09.02.1989 was in continuation of the allotment dated

09.06.1982.   

13. As noted above the allotment of land of the Trust

was subject to statutory Rules, namely, Nagpur

Improvement Trust Land Disposal Rules, 1955. Rule 3 of

the Rules provides as follows:

"Rule 3. The transfer of Trust land shall be­

(a) by direct negotiation with the party; or (b) by public auction;  or (c) by inviting tenders; pr (d) by concessional rated.”

14. Rule 5 of the 1955 Rules which has also been

referred is as follows:

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"Rule 5. The Trust may lease out on concessional rates any Trust land to any (i) Public institution or body registered under any law for the time being in force or to (ii) the evictees (which means persons whose lands in some locality have been compulsorily acquired by the Trust and includes tenants in occupation of such lands) which vests or is to vest in the Trust, or to (iii) the poor persons residing within the limits of the Nagpur Corporation who have no house of their own within the limits either individually or as a member of a joint family and whose annual income from all sources either individually or of the joint family, as the case may be does not exceed Rs.1,800/­ per annum.”

15. The Resolution dated 03.05.1968 was passed by the

Board for disposal of surplus land acquired for the

drainage and sewage disposal scheme, during the period

of enforcement of 1955 Rules. The allotment letter dated

16.10.1975 to the plaintiff of 44.61 acres of land was

in furtherance of Resolution dated 03.05.1968. The

plaintiff after receipt of the letter dated 16.10.1975

prayed for reduction of amount of premium demanded,

several letters were written by the plaintiff regarding

premium and allotment, last being letter dated

02.03.1982 as extracted above, in which the plaintiff

herself was not ready to accept the terms as

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communicated by letter dated 16.10.1975. The Trust on

09.06.1982, thus, has alloted only 24 acres out of 44.61

acres of land. The facts of the case and correspondence

as noticed above clearly indicate that at no point of

time allotment of 44.61 acres was made in favour of the

plaintiff. The decision to allot 44.61 acres was

communicated on 16.10.1975 on terms and conditions

mentioned therein. The plaintiff having expressed

certain reservation with the conditions   and asked for

relaxation of conditions and the Trust after taking into

consideration the entire facts and circumstances took a

decision to allot only 24 acres of land out of 44.61

acres on 09.06.1982, there was never any firm allotment

of 44.61 acres of land to the plaintiff giving any

indefeasible right of allotment of 44.61 acres of land

and the plaintiff herself has to be blamed for not

getting allotment of entire 44.61 acres of land on

account of she having raised request for the reduction

of the premium and she having not communicated her

consent to accede to the terms and conditions of

allotment as proposed by the Trust.

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16. After the allotment of 24 acres of land on

09.06.1982, a new set of Rules for disposal of land of

Nagpur Improvement Trust was framed, namely, Nagpur

Improvement Trust Land Disposal Rules, 1983 which came

into force w.e.f. 18.05.1983. Part III of the Rules

dealt with manner of disposal of land. Rule 5(1) & (2)

which are relevant for the present case are as follows:

“Rule 5. General.­ (1) No piece of Government land vested in or managed by the Trust shall be transferred except with the general or special sanction of the Government given in that behalf.  

(2) Except as otherwise provided in sub­rule (1) and in Part VI of these rules, all other lands vested in and acquired by the Trust shall be disposed of by the Trust by ­

(i) holding public auction; or

(ii) inviting tenders by public    advertisement; or

(iii) making offers to or accepting offers from any Government, Local Authority, Public Sector Undertaking or a body corporate which is owned or controlled by Government;

(iv) inviting applications from persons or bodies of persons who are eligible for allotment of plots under rule 4, by public advertisement to be published at

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least in one leading local news paper each in Marathi, Hindi and English on the basis of predetermined premium or other considerations or both and deciding these applications by drawing lots, if necessary, as it may determine, from time to time in accordance with the rules hereinafter appearing.

(v) Land for public amenities such as for primary school, vehicle stand, public latrine or urinal, public library, reading room, hospital, dispensary or such other purpose may be transferred to the Corporation of the City of Nagpur, either free of premium and ground rent or at nominal premium and ground rent as the Trust may determine in each case.”

17. The present is a case where for the disposal of the

land in question Rule 5(2) became applicable   from

18.05.1983. The earlier Resolution of the Board dated

03.05.1968 would no longer have been availed after the

enforcement  of  1983  Rules  for  allotment  of land. Sub

­rule (2) of Rule 5 which provides for no exception

except as otherwise provided in sub­rule (1) and Part VI

of these Rules. Sub­rule (1) of Rule 5 referred to

general or special sanction of the Government which is

not applicable in the present case. Part VI dealt with

grant of land for religious, educational, charitable and

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public purposes which also is not applicable in the

facts of the present case. Hence, after the enforcement

of the Rules of land vested and acquired by the Trust

was to be disposed of only in the manner as indicated in

sub­rule (2) of Rule 5. Admittedly 24 acres out of 44.61

acres of land was already allotted to the plaintiff on

09.06.1982 and Trust has taken a decision not to allot

any further land in view of its subsequent decision

dated 24.04.1983 to keep the remaining 20.61 acres of

land for Department of Social Forest Trees for Central

Nursery and for Nursery of the Nagpur Improvement Trust

was taken by the Board. Thus, there was decision of

Trust to set apart land of 20.61 acres for Department of

Social Forest Trees for Central Nursery and for Nursery

of the  Trust.  After  enforcement  of  Rules,  1983  which

were brought into force on 18.05.1983, 20.61 acres of

land could not be allotted to the plaintiff except by

following Rule 5 of the Rules, 1983. The First Appellate

Court has categorically made note of the Rules, 1983 and

held that the plaintiff was not entitled for any further

allotment. After referring to Rules, 1983 specifically

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Rules 5, 4 and 23, the First Appellate Court in

paragraph 22 laid down following:

"22) In the present case, admittedly land adm.24 acres was already allotted to the respondent by the appellant before coming into force of the Rules of 1983 and therefore, the appellant is not even entitled to claim 500 sq. meter of land. Except the aforesaid provision there is no other provision in these Rules empowering the Trust to allot land to the respondent without the sanction of State Government.”

18. Rules, 1983 were also relied by the appellant before

the High Court in the Second Appeal filed by the

plaintiff. The High Court held that Rules, 1983 had no

retrospective effect so as to nullify the actions taken

in accordance with the earlier Rules, hence, Rules,1983

were not relied. The High Court held that lower

Appellate Court committed error in relying on Rule 5 of

Rules, 1983. The High Court in paragraph 18 of the

judgment has held following:

"18.  The lower Appellate Court has committed an error in holding that the defendant­NIT could not have disposed of the land in favour of the appellant­plaintiff without there being any authority of law. The reliance was placed by the lower Appellate Court on the provision of Rule 5 of the Nagpur Improvement

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Trust Land Disposal Rules, 1982 to hold that there was no compliance and the allotment was not in conformity with it. In my view, such reliance was misplaced. The reason being that the said Rules wee brought in force on 18.05.1983 and the decision to re­allot 44.61 acres of land to the appellant­plaintiff was taken on 6.10.1975 and 16.10.1975, i.e. prior to coming into force of these Rules. The Rules had no retrospective effect so as to nullify the actions taken in accordance with the earlier Rules prevailing. The substantial question of law at serial No.(I) is, therefore, answered accordingly.”

19. The High Court took the view that since the decision

to allot 44.61 acres of land was taken on 06.10.1975 and

16.10.1975 i.e. prior to Rules, 1983, the Rules had no

retrospective effect which shall not nullify the actions

taken in accordance with the earlier Rules then

prevailing. There is no question of nullifying the

decision taken on 06.10.1975 and 16.10.1975 which was

taken earlier to the subsequent Rules, 1983. In

pursuance of earlier decision i.e. taken on 06.10.1975

and 16.10.1975 the entire allotment which took place

prior to Rules, 1983 were completely saved but allotment

which could not culminate before enforcement of Rules,

1983, would not have been made after the enforcement of

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Rules, 1983 except in accordance with Rules, 1983. We

have already noticed that the plaintiff was allotted

only 24 acres of land in pursuance of decision dated

06.10.1975 and 16.10.1975 and request of the plaintiff

to allot entire 44.61 acres of land was not acceded to

and only 24 acres of land was allotted possession of

which was handed over to the plaintiff on 11.11.1982.

There being no allotment of rest 20.61 acres of land

prior to 18.05.1983 on the basis of earlier decision no

allotment would have been made after the enforcement of

the Rules   in disregard to the statutory Rules. The

statutory Rules enforced w.e.f 18.05.1983 substantially

changed the manner of allotment and more rigorous

conditions were put on the land of the Trust. There

cannot be any dispute with the proposition that after

the land is acquired for public purpose it vests in the

acquiring body and the land holder has no right to claim

the land acquired. In this context reference has been

made to State of Kerala and others vs. M. Bhaskar Pillai

and another, (1997) 5 SCC 432. In paragraph 4 following

has been laid down:

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“4. In view of the admitted position that the land in question was acquired under the Land Acquisition Act, 1894 by operation of Section 16 of the Land Acquisition Act, it stood vested in the State free from all encumbrances. The question emerges: whether the Government can assign the land to the erstwhile owners? It is settled law that if the land is acquired for a public purpose, after the public purpose was achieved, the rest of the land could be used for any other public purpose. In case there is no other public purpose for which the land is needed, then instead of disposal by way of sale to the erstwhile owner, the land should be put to public auction and the amount fetched in the public auction can be better utilised for the public purpose envisaged in the Directive Principles of the Constitution. In the present case, what we find is that the executive order is not in consonance with the provision of the Act and is, therefore, invalid. Under these circumstances, the Division Bench is well justified in declaring the executive order as invalid. Whatever assignment is made, should be for a public purpose. Otherwise, the land of the Government should be sold only through the public auctions so that the public also gets benefited by getting higher value. ”

20. This Court again in  Sulochana Chandrakant Galande

vs. Pune Municipal Transport and others, (2010) 8 SCC

467, held that after vesting of land in State free from

all encumbrances after acquisition, landowner becomes

persona non grata after vesting and has right to

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compensation only and cannot claim right of restoration

of land on any ground, whatsoever. In paragraph 22

following has been laid down:

“22. In view of the above, the law can be summarised that once the land is acquired, it vests in the State free from all encumbrances. It is not the concern of the land owner how his land is used and whether the land is being used for the purpose for which it was acquired or for any other purpose. He becomes persona non grata once the land vests in the State. He has a right to get compensation only for the same. The person interested cannot claim the right of restoration of land on any ground, whatsoever. ”

21. The plaintiff's case at the highest is that her

application  for  allotment  of 20.61 acres of  land was

pending consideration when Rules, 1983 were enforced.

The plaintiff's own case is that refusal to allot 20.61

acres of land took place only on 09.02.1989 when the

Trust executed lease of 24 acres of land only. Thus, at

best the application for re­allotment of 20.61 acres of

land was pending at the time when new Rules came in

force. New  Rules,  thus,  were  fully  attracted  for any

further disposal of land by the Trust as per Rule 5 and

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as per sub­Rule (2) of Rule 5 the land would have been

disposed of except as otherwise provided in sub­Rule (1)

only by holding public auction; inviting tenders by

public advertisement; making offers to or accepting

offers from any Government, Local Authority, Public

Sector Undertaking or a body corporate which is owned or

controlled by Government; inviting applications from

persons or bodies of persons who are eligible for

allotment of plots under Rule 4, by public advertisement

and land for  public amenities such as for primary

school, vehicle stand, public latrine or urinal, public

library, reading room, hospital, dispensary or such

other purpose, etc. Plaintiff's claim is not covered  in

any manner of disposal under Rule 5(2), hence no decree

would have been passed by the trial court contrary to

the statutory Rules as envisaged by Rule 5(2). The view

of the High Court that Rules, 1983 are prospective and

shall not effect the allotment made in favour of the

plaintiff on 06.10.1975 and 16.10.1975 was erroneous. As

observed above the allotments which were finalised in

pursuance of Resolution dated 06.10.1975 and 16.10.1975

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were saved, but allotment of any land which could not

take place finally before enforcement of Rules, 1983 has

to be in accordance with the Rules, 1983. In this

context, reference is made to the judgment of this Court

in State of Tamil Nadu vs. M/s. Hind Stone and others,

(1981) 2 SCC 205.  In that case, the applications by

various persons desirous of taking mining lease were

pending when the Rules for grant of lease were amended.

The Rules were amended on 02.12.1977 by introducing Rule

8­C, it was contended by several applicants that Rule

8­C was not applicable to the applicants whose

applications were pending. The relevant facts were

mentioned in paragraph 4 which are to the following

effect:

“4. Several persons who held leases for quarrying black granite belonging to the State Government and whose leases were about to expire, applied to the Government of Tamil Nadu for renewal of their leases. In some of the cases applications were made long prior to the date of G.O. Ms. No. 1312 by which Rule 8C was introduced. Some applications were made after Rule 8C came into force. There were also some applications for the grant of fresh leases for quarrying black granite. All the applications were dealt with after Rule 8C came into force and all of them

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were rejected in view of Rule 8C Several Writ Petitions were filed in the High Court questioning the vires of Rule 8C on various grounds. Apart from canvassing the vires of Rule 8C, it was contended that Rule 8C did not apply to grant of renewals of lease at all. It was also argued that in any event, in those cases in which the applications for renewal had been made prior' to the coming into force of Rule 8C, their applications should have been dealt with without reference to Rule 8C. The Madras High Court while not accepting some of the contentions raised on behalf of the applicants, struck down Rule 8C on the ground that it exceeded the rule making power given to the State Government under Section 15 which, it was said, was only to regulate and not to prohibit the grant of mining leases. As a consequence all the applications were directed to be disposed of without reference to Rule 8C. It was also observed that even if Rule 8C was valid it applied only to the grant of fresh leases and not to renewals. It was also held that it was not open to the Government to keep the applications pending for a long time and then to dispose them of on the basis of a rule which had come into force later. The State Government has come in appeal against the judgment of the Madras High Court while the respondent­applicants have tried to sustain the judgment of the Madras High Court on grounds which were decided against them by the Madras High Court. ”

22. Rejecting the argument that Rule 8­C is not

attracted on the applications which were pending on date

of amendment, it was held that applications were

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required to be disposed of on the basis of the Rules in

force at the time of the disposal of the applications.

Following was laid down in paragraph 13:

"13. Another submission of the learned Counsel in connection with the consideration of applications for renewal was that applications made sixty days or more before the date of G.O. Ms. No. 1312 (December 2, 1977) should be dealt with as if Rule 8C had not come into force. It was also contended that even applications for grant of leases made long before the date of G.O. Ms. No. 1312 should be dealt with as if Rule 8C had not come into force. The submission was that it was not open  to the Government to keep applications for the grant of leases and applications for renewal pending for a long time and then to reject them on the basis of Rule 8C notwithstanding the fact that the applications had been made long prior to the date on which Rule 8C came into force. While it is true that such applications should be dealt with within a reasonable time, it cannot on that account be said that the right to have an application disposed of in a reasonable time clothes an applicant for a lease with a right to have the application disposed of on the basis of the rules in force at the time of the making of the application. No one has a vested right to the grant or renewal of a lease and none can claim a vested right to have an application for  the  grant or renewal of  a lease  dealt with in a particular way, by applying particular provisions. In the absence of any vested rights in anyone, an application for a lease has necessarily to be dealt with according to the rules in force on the date

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of the disposal of the application despite the fact that there is a long delay since the making of the application. We are, therefore, unable to accept the submission of the learned Counsel that applications for the grant or renewal of leases made long prior to the date of G.O. Ms. No. 1312 should be dealt with as if Rule 8­C did not exist. ”

23. We, thus, are of the considered opinion that the

claim of plaintiff for allotment of additional land of

20.61 acres which can be at best said to be pending  on

the date of enforcement of Rules, 1983 would have been

only dealt with in accordance with Rule 5 of Rules, 1983

and disregard of said Rules the trial court would not

have  decreed the  suit  directing  the  Trust  to execute

lease in   favour of the plaintiff of 20.61 acres of

land. The decree of the trial court was clearly in the

teeth of the statutory Rules and the High Court

committed error in taking the view that Rules, 1983 were

not applicable in the present case.  

24. It is also relevant to notice that lower Appellate

Court has held that suit of the plaintiff was barred by

time it having been filed more than three years after

the refusal to allot the land. The High Court has held

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that the Appellate Court has committed error of law in

considering the issue of limitation which was not the

question raised before the trial court. In paragraph 17

of the judgment following has been held:

"17. Though the allotment of 44.61 acres of land was on 16.10.1975, the lease­deed in respect of 24 acres of land was executed on 09.02.1989. Thus, there was refusal on 09.02.1989 to execute the lease­deed in respect of 20.61 acres of land. Hence, the cause of action in terms of Article 54 of the Limitation Act would start running from 09.02.1989 when the defendant­NIT refused to execute the lease­deed. The suit in question having filed on 15.12.1989 was not, therefore, barred by the law of limitation. In fact, this was not the question raised before the trial court and no issue was framed in respect of it. The lower Appellate Court has committed an error of law in considering such issue and holding that the suit in  question was barred  by the law of limitation. The finding of the lower Appellant Court, therefore, needs to be set aside.”

25. In so far as view of the High Court that Appellate

Court committed error in entertaining the question of

limitation which was not the issue framed by the trial

court, suffice is to refer the  provision of Section 3

of the Limitation Act, 1963. Section 3(1) of the

35

Limitation Act provides as follows:

“Section 3. Bar of limitation.­(1) Subject to the provisions contained in sections 4 to 24(inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence.”

26. This Court in Foreshore Cooperative Housing Society

Limited vs. Praveen D. Desai(dead) through Legal

Representatives and others, (2015) 6 SCC 412,  had

considered the question of jurisdiction of Court in

reference to provisions of Limitation Act. Noticing

Section 3 of the Act following was observed:

“48. Section 3 of the Limitation Act, 1963 clearly provides that every suit instituted, appeal preferred and application made after the prescribed period of limitation, subject to the provisions contained in Sections 4 to 24, shall be dismissed although the limitation has not been set up as a defence.  

49. A Constitution Bench of five Judges of this Court in the case of Pandurang Dhondi Chougule v. Maruti Hari Jadhav, AIR 1966 SC 153, while dealing with the question of jurisdiction, observed that a plea of limitation or plea of res judicata is a plea of law which concerns the jurisdiction of the court which tries the proceeding. The Bench held(AIR p.155, para 10):

36

10. The provisions of Section 115 of the Code have been examined by judicial decisions on several occasions. While exercising its jurisdiction Under Section 115, it is not competent to the High Court to correct errors of fact however gross they may, or even errors of law, unless the said errors have relation to the jurisdiction of the court to try the dispute itself. As Clauses (a), (b) and (e) of Section 115 indicate, it is only in cases where the subordinate court has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity that the revisional jurisdiction of the High Court can be properly invoked. It is conceivable that points of law may arise in proceedings instituted before subordinate courts which are related to questions of jurisdiction. It is well settled that a plea of limitation or a plea of res judicata is a plea of law which concerns the jurisdiction of the court which tries the proceedings. A finding on these pleas in favour of the party raising them would oust the jurisdiction of the court, and so, an erroneous decision on these pleas can be said to be concerned with questions of jurisdiction which fall within the purview of Section 115 of the Code. But an erroneous decision on a question of law reached by the subordinate court which has no relation to questions of jurisdiction of that court, cannot be corrected by the High Court Under Section 115. ”

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27. No error was committed by the Appellate Court in

entering into the issue as to whether application was

barred by time. The Appellate Court was well within its

jurisdiction in considering the question of limitation.

We, however, for the present case need not express any

opinion  with regard  to  the question  of limitation  in

view of we having held that plaintiff was not entitled

for  the  decree.  Thus,  even without  entering  into the

question of limitation we are of the clear opinion that

plaintiff was not entitled for the decree as has been

granted by the trial court and affirmed by the High

Court.

28. In the result, the appeal is allowed, the judgment

of the High Court is set aside and the suit of the

plaintiff stands dismissed.  

..........................J. ( A.K. SIKRI )

..........................J.     ( ASHOK BHUSHAN )

NEW DELHI, OCTOBER 31, 2018.