SATLUJ JAL VIDYUT NIGAM versus RAJ KUMAR RAJINDER SINGH (DEAD) THROUGH LRS. & ORS. on 24 September 2018

SUPREME COURT REPORTS[2018] 12 S.C.R. 282

[2018] 12 S.C.R.

ASATLUJ JAL VIDYUT NIGAM

v.

RAJ KUMAR RAJINDER SINGH (DEAD) THROUGH LRS. &ORS.

(Civil Appeal No. 9871 of 2018)

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SEPTEMBER 24, 2018

[ARUN MISHRA AND S. ABDUL NAZEER, JJ.]

Land Acquisition – Claim for compensation – Whether afterthe abolition of jagirs by virtue of the Abolition Act, 1953, theCRespondent-Jagirdar or his legal representatives could have claimedthe compensation on the land acquisition being made, particularlywhen land vested in the State, the land was not under the personalcultivation, and when they have received the compensation underthe Abolition Act, and apart from that had also received theDcompensation under the provisions of the Ceiling Act, 1972 – Held:It was conclusively established that land in question had beendeclared surplus and compensation under the Ceiling Act had alsobeen received, even though the land had already vested in the Stateunder the Abolition Act – Once the disputed land had been admittedlydeclared surplus in Ceiling Act, there was no question of paymentEof compensation to Respondent or his legal representatives inproceedings initiated later on under the LA Act – In instant case,there were earlier proceedings which makes it clear that respondentwas not entitled to claim compensation under the LA Act – Therewas no subsisting right, title or interest left with respondent or hisFLRs, thus, they could not be permitted to obtain compensation –Land Acquisition Act, 1894 – ss.18 and 30 – Himachal PradeshAbolition of Big Landed Estates and Land Reforms Act, 1953 – s.27– H.P. Ceiling on Land Holdings Act, 1972 – s.11.

Administration of Justice – Abuse of process of law –GRespondent received compensation three times with respect to thesame land – Firstly, in 1966-67 he had received a sum of Rs.28,019as compensation due to the vesting of entire land in the StateGovernment and compensation was determined under the AbolitionAct – Second time the compensation of Rs.57,388/- had been received H

SATLUJ JAL VIDYUT NIGAM v. RAJ KUMAR RAJINDERSINGH (DEAD) THROUGH LRS.

in the year 1980-81 under the Ceiling Act, 1972 – For third time,the respondent received compensation under LA Act – Appellantcontended respondent had committed a serious fraud – Held: Theamount that had been withdrawn under the LA Act, was whollyimpermissible and tantamount to playing fraud upon the legal system – As a matter of fact, compensation was taken for the land in theproceedings under the Abolition Act – Even if compensation inrespect of certain land was not payable or paid, vesting would notdepend upon the same – Land not under personal cultivation ofJagirdars had vested in the State, as such it was not open even toobtain compensation for the very same land either under theprovisions of the Ceiling Act which has been received or under theprovisions of the LA Act – It was wholly impermissible and illegaland tantamount to scam committed by fraudster – Respondentdirected to refund the compensation withdrawn under landacquisition to the appellant-State – Land Acquisition Act, 1894 –ss.18 and 30 – Himachal Pradesh Abolition of Big Landed Estatesand Land Reforms Act, 1953 – s.27 – H.P. Ceiling on Land HoldingsAct, 1972 – s.11.

Word and Phrases – “Fraud” – Held: Fraud vitiates everysolemn proceeding and no right can be claimed by a fraudster onthe ground of technicalities.

Allowing the appeals, the Court

Conclusion

HELD: 1. The area under personal cultivation which wassaved in favour of respondent was 64 bighas 12 Biswas only asspecified. It is apparent from the order Khata No.1 Kita measuring1011 bighas 6 Biswas vested in the ownership of Government ofHimachal Pradesh in village Jhakri. The land revenue of land atJakhri as apparent from Jamabandi of 1955-56 at the time whenthe Himachal Pradesh Abolition of Big Landed Estates and LandReforms Act, 1953 came into force was Rs.155.58 it was morethan Rs.125 as such the land which was Banjar kadim or otherwisenot under personal cultivation had vested in the State. Under theAbolition Act compensation was determined under the provisionsof section 27(1) and was ordered to be paid by the CompensationOfficer. Though payment of compensation was not a conditionprecedent for vesting of land it was automatic, respondent was A

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Apaid compensation also for the land mentioned in the order ofCompensation Officer. Even if the compensation was not paid forsome land, as that was not under personal cultivation had alsoautomatically vested free from all encumbrances in the State.[Paras 44, 45] [303-D-H; 304-A]

BJadab Singh & Ors. v. The Himachal PradeshAdministration & Ors. AIR 1960 SC 1008 – referredto.

2. The fact is conclusively established that land in questionhad been declared as surplus and compensation under the H.P.CCeiling on Land Holdings Act, 1972 had also been received, eventhough the land had already vested in the State under theAbolition Act. Once the disputed land had been admittedlydeclared surplus in Ceiling Act, there was no question of paymentof compensation to repsondent or to his legal representatives inproceedings initiated later on in the year 1987 under the LandDAcquisition Act, 1894. The Land Acquisition Collector in 1989was justified in directing that the compensation determined shouldnot be paid due to the effect of the Ceiling Act and that questionwas raised in the Reference Court also, it was incumbent uponthe Reference Court to go into the aforesaid aspects. Thus, onceEland has been declared surplus and compensation has beenreceived. It was not open to receive it again in the land acquisitioncase. [Para 54] [309-D-G]

3. The Land Acquisition proceedings were initiated in theyear 1987 for the acquisition of land whereas the order of ceilingFwas passed earlier in 1980 and 1985 and subsequently the surplusarea was increased in 1993. By no stretch of any principle of law,respondent or his successors could have claimed compensationin the proceedings in question initiated under the LA Act in theyear 1987. The respondent and his family were not entitled toclaim any monetary compensation under the LA Act for the saidGland. The amount that had been withdrawn under the LA Act,was wholly impermissible and tantamount to playing fraud uponthe legal system. As a matter of fact, compensation has been takenfor the land in the proceedings under the Abolition Act. Even ifcompensation in respect of certain land was not payable or paid,Hvesting would not depend upon the same. Land not under personal cultivation of Jagirdars had vested in the State, as such it was notopen even to obtain compensation for the very same land eitherunder the provisions of the Ceiling Act which has been receivedor under the provisions of the LA Act. It was wholly impermissibleand illegal and tantamount to scam committed by fraudsters. Thecases were withdrawn one after the other just to perpetuate thefraud on the legal system by raising the inconsistent pleas andtaking unfair and undue advantage of the wrong continuation ofentries in the revenue papers. Resultantly, respondent or LRsshall refund the compensation withdrawn in the case of landacquisition to the appellant/State. [Paras 59 and 78] [312-E-G;313-A; 326-F-G]

Sharda Devi v. State of Bihar (2002) 3 SCC 705 : [2002]2 SCR 404; Meher Rusi Dalal v. Union of India (2004)7 SCC 362 : [2004] 1 Suppl. SCR 956; Ahad Brothersv. State of M.P. (2005) 1 SCC 545 : [2004] 6 Suppl.SCR 191 ; U.P. Awas Evam Vikas Parishad v. GyanDevi (1995) 2 SCC 326 : [1994] 4 Suppl. SCR 646;Sharda Devi v. State of Bihar (2003) 3 SCC 128; RamChandra Singh v. Savitri Devi, (2003) 8 SCC 319 :[2003] 4 Suppl. SCR 543; Madhukar Sadbha Shivarkarv. State of Maharashtra (2015) 6 SCC 557; Jai NarainParasrampuria v. Pushpa Devi Saraf (2006) 7 SCC756 : [2006] 5 Suppl. SCR 325; State of A.P. v.T. Suryachandra Rao, (2005) 6 SCC 149: 2005]1 Suppl. SCR 809; A.V. Papayya Sastry v. Govt. of A.P.(2007) 4 SCC 221 : [2007] 3 SCR 603; S.P.Chengalvaraya Naidu v. Jagannath (1994) 1 SCC 1 :[1993] 3 Suppl. SCR 422; K.K. Modi v. K.N. Modi(1998) 3 SCC 573 : [1998] 1 SCR 601; Ujjagar Singhv. Collector, Bhatinda (1996) 5 SCC 14 ; [1996]4 Suppl. SCR 239; State of H.P. v. Harnama (2004) 13SCC 534; Madan Kishore v. Major Sudhir Sewal(2008) 8 SCC 744: [2008] 12 SCR 1154 – referredto.

Case Law Reference

AIR 1960 SC 1008[2002] 2 SCR 404

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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9871Eof 2018

From the Judgment and Order dated 25.02.2008 of the HighCourt of Himachal Pradesh at Shimla in Regular First Appeal No. 243of 1991

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Civil Appeal Nos. 9872-9873, 9874, 9875, 9876, 9877, 9878, 9879,9880 of 2018.

Tushar Mehta, ASG, Abhinav Mukerji, AAG, Guru Krishan Kumar,Vinay Kuthiala, Yatinder Singh, Sr. Advs., Rama Kant Sharma, B. K.GSatija, K. K. Upadhaya, Shaurya Kuthiala, Yash Pal Dhingra, Ms. BihuSharma, Ms. Urnima Krishna, Siddharth Garg, Sumit Raj Sharma, DineshKumar Garg, Abhishek Garg, Dhananjay Garg, Deepak Mishra, NareshK. Sharma, Himinder Lal, Dr. Ashutosh Garg, Ms. Promila, Y. P. Dhingra,Advs. for the appearing parties.

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The Judgment of the Court was delivered by ARUN MISHRA, J. 1. Leave granted.

2. The question involved is whether after the abolition of Jagirs byvirtue of the Himachal Pradesh Abolition of Big Landed Estates andLand Reforms Act, 1953 (hereinafter referred to as ‘the Abolition Act’),the late Jagirdar or his legal representatives could have claimed thecompensation on the land acquisition being made particularly when landhas vested in the State of Himachal Pradesh, the land was not under thepersonal cultivation, and particularly when they have received thecompensation under the Abolition Act, apart from that had also receivedthe compensation under the provisions of H.P. Ceiling on Land HoldingsAct, 1972 (hereinafter referred to as “the Ceiling Act”).

3. The facts project how a litigant has filed a slew of litigationsone after the other and faced with a situation that it was likely to bedismissed, he would withdraw it; again, file it on new grounds, or havinglost it, would withdraw it again at appellate stage, and in the meantime,in different proceedings by playing fraud, getting unjust enrichment byreceiving compensation at the expense of public exchequer.

4. The facts in the instant case reveal that Late Rajinder Singh,son of erstwhile ruler Late Maharaja Padam Singh was Jagirdar of theland, and thus was recorded as owner of thousands of bighas of land inTehsil Rampur, Sub-Tehsil Nankhari and Tehsil Rohru of erstwhileMohasu district which is presently a part of Shimla district and TehsilNichhar of district Kinnaur of State of Himachal Pradesh.

5. The land in village ‘Jhakri’ of 393 khasra numbers admeasuring1011 bighas, 6 Biswas was declared to have vested in the State undersection 27 of the Abolition Act and the intermediary Rajinder Singh asper order dated 14.11.1962 was permitted to retain only 64.12 bighas ofland which was under his personal cultivation. In Himachal Pradesh,one acre comprises 5 bighas of land. Vide order dated 19.9.1964 passedby the Assistant Collector, the order of vesting was modified to the extentthat he was given 13 bighas 12 Biswas of land comprised in KhatauniNo.1 out of 14 Khasra numbers, i.e., 14, 122, 125, 142, 143, 165, 212,238, 241, 288, 423, 494, 511 and 512. Some of the aforesaid surveynumbers were unmeasured. However, the fact remains that the totalarea which was found to be under personal cultivation, was 13 bighas,12 Biswas.

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6. Late Jagirdar Rajinder Singh assailed the order of vesting dated14.11.1962 by filing W.P. [C] No. 15/1962. Before the JudicialCommissioner who used to hear writ petitions at the relevant time, heldthat the land which was not under personal cultivation, would not vest inthe State unless and until compensation was paid.

B7. Pursuant to the order of vesting, the competent authority underthe Abolition Act i.e. Compensation Officer, Mahasu, vide order dated12.4.1966 determined the compensation of Rs.28,019.45. Since theZamindar had already received an amount of Rs.1,703.25 in excess fromthe tenants who had acquired proprietary rights under section 11 of theAbolition Act, same was deducted from the amount and the amountCpayable was found to be Rs.26,316.20 and it was actually paid on6.5.1966.

8. As against the order passed by the Compensation Officer dated12.4.1966, the appeal was preferred before the District Judge, Mahasu.The appeal was partly allowed and the direction which was made ofDdeduction of Rs.1703.25 was set aside and the payment of entireRs.28,019.45 was ordered without aforesaid deduction.

9. As against the decision of the Judicial Commissioner dated14.11.1962, the matter travelled to this Court in C.A. Nos.1186-1191/1966. This Court held that vesting under section 27, the right, title andEinterest of the owner in landholding in case land revenue of the holdingexceed Rs.125 per year, would vest free from all encumbrances in theState Government and the vesting is automatic and without beingcontingent on the happening of any other event. Compensation andrehabilitation grant can be determined and paid later. This Court in theForder dated 17.9.1969 made the following observations:

“It is apparent that S.27 deals with lands the annual land revenueof which exceeds Rs.125 per year. It says in unequivocal termsthat the right. title and interest of the owner in such lands shall bedeemed to have been transferred land vested in the StateGovernment free from all encumbrances. This essentially meansthat on the enforcement of the Act the vesting takes placeautomatically and without being contingent on the happening ofany other event. The High Court in the full Bench decision referredto above took the same view and was right in observing thatwherever the legislature intended to defer the date of vesting such G

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as in S.11 and 15 clear provisions were made to that effect andthe reasons thereof were obvious. In 8.11 the tenant had to exercisethe option to acquire the right. title and interest of the landowner.The vesting of such rights-would necessary depends on the timeof the exercise of such option. Similarly in 8.15. a future date hadto be provided in view of its special provisions. We do not considerthat the provisions of sub S.53 (3) and (4) of S.27 contain anyindication that the vesting of rights of ownership in the Governmentwould be dependent on the determination of compensation. Thevesting takes place under sub-S. (1) immediately on theenforcement of the Act. Thereafter, under sub-S. (3) compensationhas to be paid to the landowner in accordance with the provisionsmentioned therein. Under sub 8(4) the State Government shalltransfer the rights of ownership to a tenant who cultivates theland only on payment of compensation. That cannot prevent orhave any bearing on the vesting which takes place under subS(1). The payment of rehabilitation grant which is provided bysub 8(5) to a small landowner strengthens the reasoning in favourof vesting being automatic and immediate under sub S(1). Therecan be no manner of doubt that in respect of land which fallswithin the ambit of S.27(1) transfer and vesting of the rights ofownership to and in the Government takes place immediately onthe enforcement of the Act and thereafter compensation andrehabilitation grant are payable.

For all these reasons, the appeals are allowed and the decision ofthe learned Judicial Commissioner is set aside. The cases areremanded to the High Court for disposal of the questions whichwere not decided. In view of the entire circumstances, there willbe no order as to costs.”

This Court remitted the matter to the High Court for disposal ofthe questions which were not decided. In particular, the question ofpersonal cultivation of Jagirdar as that land was only saved from vesting.

10. Faced with the observation made by this Court that the landwhich is not under personal cultivation vested automatically in the Stateand as after remand the High Court was required to decide the matter inview of the said observations of this Court, Rajinder Singh prayed for AB

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Awithdrawal of W.P. No.15/1962 with permission to file a civil suit. TheHigh Court vide order dated 9.7.1970 permitted to withdraw the writpetition with liberty to file a civil suit. Thus, the mandate of this Court inthe order dated 17.9.1969 to decide the question of personal cultivationwas avoided by the withdrawal of writ petition.

B11. Late Rajinder Singh then filed Civil Suit No.15/1970 in whichhe took a somersault and prayed for a declaration of title and sought adeclaration that the suit property was not the ‘land’ under Section 2(5)of the Abolition Act and as such it did not vest in the State of HimachalPradesh. The case of personal cultivation was abandoned by him. Thetrial court framed the issues; whether the plaintiff was in possession ofCthe land in dispute and whether the disputed land, in whole or in part,vested in the State Government? The issue was also framed whetherthe land in dispute is covered under the definition of ‘land’ in the AbolitionAct. What is the effect of the decision dated 12.4.1966? The issue wasalso framed with respect to the finality of the decision of the CompensationDOfficer dated 12.4.1966, and whether the suit was barred as the orderhad attained finality. The trial court also framed the issue with respect tothe aspect whether the plaintiff had received compensation of the partof the area in dispute and, as such, estopped from filing the suit.

12. The suit 15/1970 filed in the High Court was dismissed onE26.6.1973. The High Court has held that the suit land was within thepurview of the term ‘land’ as defined in the Abolition Act and the plaintiffwas not in the personal cultivation of the said land. Hence, the entireland had vested in the State Government under section 27 of the Act on26.1.1955, the date on which the Abolition Act came into force. It washeld that the plaintiff was not the owner of the said land. The High CourtFhas recorded the following findings:

“25. In this view of the matter I hold, that the land in dispute isdecidedly land as defined in the Abolition Act and the plaintiff notbeing in the personal cultivation of such land, the entire of it hasvested in the State Government under section 27 of the Act. TheGtwo issues are thus decided against the plaintiff.

41. In view of my decision given above for respective issues, therelief of declaration cannot be granted. The disputed land hasautomatically vested in the State Government under section 27 on 26[th] January 1955, when the Abolition Act came into force. Assuch the plaintiff is not the owner of such land. Since the plaintiffhas not proved his “personal cultivation” for such land, the sameis not exempt from vestment under sub-section (2) of section 27.The executive instructions issued by the defendants, for this reason,cannot be considered to be wrong or illegal. The plaintiff is notentitled to any relief.”

The High Court in C.S. No.15 of 1970 also decided issue Nos.5,11 and 12 and held that the suit was expressly barred by estoppel andalso by res judicata. The suit being for the mere declaration was notmaintainable and was barred under section 34 of the Specific ReliefAct, 1963.

13. Rajinder Singh filed the appeal before Division Bench of theHigh Court as against the judgment and decree dated 26.6.1973 of SingleJudge. The first appeal was ultimately withdrawn by making a statementby his counsel that the disputed land had been acquired under theprovisions of section 8 of the H.P. Ceiling on Land Holdings Act, and thecompensation had been paid to the appellant. In view of the subsequentevent, prayer was made to withdraw the suit and appeal as it had becomeinfructuous. However, the High Court on 23.6.1986 permitted theappellant to withdraw the suit with permission to file a fresh suit in respectof the subject matter of the suit on the same cause of action in casethere was any necessity to file such a subsequent suit, and the appealwas dismissed as infructuous. It is apparent that the appellant has acceptedthe factual position that land was declared surplus and he has receivedcompensation of the disputed land under the provisions of the CeilingAct, 1972. From which actual factual position and admission, he hastried to wriggle out falsely in the instant matter.

14. The withdrawal of suit C.S. No.15 of 1970 was aimed atdefrauding the court as the trial court has held that the suit land was notpersonally cultivated as such, it had vested automatically in the StateGovernment and it was the ‘land’ as defined in the Abolition Act and theplaintiff was estopped from filing a suit. During the pendency of theaforesaid matter in spite of the land having been vested in the State,under Abolition Act compensation was obtained second time under theprovisions of the Ceiling Act, though the compensation was earlier toopaid to him as determined by the Compensation Officer in 1966.

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A15. The Ceiling Act was enacted in the year 1972 and it providedfor consolidation of holding and amend the laws relating to ceiling onland holdings. Section 11 of the Act of 1972 provided that the surplusland would vest in the State, and would be deemed to have been acquiredby the State Government free from all encumbrances for a public purposeon payment of a certain amount.B

16. On 10.6.1980 the Collector (Ceiling) that is the Sub-DivisionalOfficer declared 10,027.5 bighas of land as surplus. It was not questionedby Rajinder Singh. Compensation was determined and also paid. Thereference was made by the department that the additional land wasrequired to be declared as surplus. On 5.9.1985, Financial CommissionerC(Appeals) decided references and did not interfere in the aforesaiddeclaration of land as surplus, however conclusively held that additionalland was required to be declared surplus. The declaration of 10,027.5bighas of land as surplus vide order dated 10.6.1980 was not sufficient.The case was accordingly remanded. The limited remand order alsoDattained finality. Ultimately order was passed by the Collector, RampurBushahr, Distt. Shimla, on 10.11.1993. It was observed that thecompensation of Rs.57,888.80 had been received for the land that hadalready been declared surplus i.e. 10027.5 bighas. It was also held thatin the order dated 10.6.1980, two units of permissible area to thelandowner and his minor son were erroneously allowed, therefore, theEadditional area of one unit given to minor son was declared as surplus. Itwas held that family of Rajinder Singh was entitled only for one unit andthe final draft statement was accordingly published.

17. The area in question has also declared a surplus in 1980 andacquired by State under section 11 of Ceiling Act before the landFacquisition was started in 1987 and the order dated 10.6.1980 declaring10,027.5 Bighas of land as surplus so far as Rajinder Singh was concernedattained finality as it was not questioned by him.

18. As against the order dated 10.11.1993 declaring additionalapproximately 9000 bighas of land as surplus, the appeal was filed, theGsame was dismissed by the Commissioner on 30.8.1996. Against thesaid appellate order revision was filed before the Financial Commissionerand the same was dismissed on 18.1.2002. On 1.8.2013 the Commissionerpassed an order upholding the mutation order against which revisionwas filed before the Financial Commissioner. Ultimately the review H

petition was also dismissed as not maintainable which the appellant isstated to have questioned.

19. With respect to the present acquisition proceedings out ofwhich appeal arises, notification under section 4 was issued on 9.1.1987for the acquisition of land for H.P. State Electricity Board for constructionof an approach road at Jhakri. The Electricity Board was later onreplaced by Nathpa Jhakri Power Corporation (NJPC) and later on bythe appellant Satluj Jal Vidyut Nigam. The Land Acquisition Collectorpassed an award on 24.2.1989 determining the rate of compensation atthe rate of Rs.20,000 per bigha. However, it was observed in the awardthat there was a dispute about the ownership of Rajinder Singh. Hence,it was ordered that compensation should not be disbursed in view of thependency of ceiling proceedings. It be deposited in a bank instead ofcourt. A reference was sought under section 18 of the Land AcquisitionAct, 1894 (hereinafter referred to as ‘the LA Act’). The ReferenceCourt vide award dated 23.7.1991 determined the compensation at therate of Rs.1 lakh per bigha.

20. Another acquisition proceeding was initiated by issuance ofnotification under section 4 which was published in the Official Gazettefor the acquisition of land for the purpose of construction of residentialcolony for the Jhakri Hydel Power Project. On 11.7.1988 amendednotification under section 4 was issued. On 27.2.1991 award was passedaccording to the classification of the land. On 4.7.1991, a supplementaryaward was passed. The references were made to the Court. TheReference Court awarded Rs.1 lakh per bigha vide award dated27.3.1997.

21. As against the award passed by the Reference Court appealswere preferred before the High Court. It was contended that the landacquisition proceedings were commenced in collusion with theGovernment officials. The land stood vested in the Government underthe Abolition Act. There was no question of acquiring the same. A prayerwas made in the appeals to file additional documents under Order 41Rule XXVII and to amend the written statement. The High Courtdismissed the said applications along with appeals.

22. As against the dismissal of the appeals and the applications,C.A. Nos.3741-52 and 3753-57 of 2001 were filed in this Court by theappellant. They were decided on 3.5.2001. The judgment of the High A

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ACourt was set aside. The applications under Order 41 Rule XXVII andOrder 6 Rule XVII were allowed. This Court in the final order dated3.5.2001 observed:

“In course of hearing of the appeals it was fairly agreed bylearned counsel for the parties that keeping in view the facts andcircumstances of the case and the contentions raised it will be aptand proper to remand the matter to the High Court for fresh disposaltaking into consideration the averments in the amendment petitionand the documents filed as additional evidence. Such an order inthe fact situation of the case will serve the ends of justice.

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C In view of the agreed position fairly stated by learned counselfor the parties and in our view, rightly, we allow these appeals, setaside the judgment of the High court which is under challenge;allow the petitions filed by the appellants under Order 6 Rule XVIICPC and under Order 41 Rule XXVII CPC and remand the matterto the High Court for fresh disposal in accordance with law afterDgiving opportunity of hearing to the parties.”

23. After the case was remitted to the High Court, appeals havebeen dismissed vide impugned judgment and order dated 25.2.2008.Aggrieved thereby the appeals have been preferred by Satluj Jal VidyutNigam.E

24. The Reference Court decided 72 land reference cases whereinit was held that the respondents were neither the owner nor in possessionof the land under acquisition, and the land in question stood vested in theState of Himachal Pradesh. The award was challenged by way of RegularFirst Appeal and the same is stated to be pending in the High Court.

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25. Civil Appeals arising out of SLP [C] No.9281/2014 arise outof a common judgment dated 18.9.2013 passed by the High Court. Writpetitions were filed before the High Court by one of them by Sita Devi& Ors. being CWP No.2931/2010 with respect to a redetermination ofcompensation. They were decided by a common judgment and orderGdated 18.9.2013 and it has been held that notwithstanding the fact thatRajinder Singh may not have a title, the status of the appellants had beenheld to be that of bona fide transferees earlier and that order has attainedfinality and was not questioned in appropriate proceedings. Thus, theywere entitled to the re-determination of compensation under section 28A

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of the LA Act. Satluj Jal Vidyut Nigam has filed the appeals impugningthe judgment in the year 2014.

26. It was urged on behalf of the appellant that the respondentRajinder Singh has received compensation 3 times with respect to thesame land. Firstly, in 1966-67 he had received a sum of Rs.28,019 ascompensation due to the vesting of entire land in the State Governmentand the Compensation Officer had determined the same under theAbolition Act. The land, in any event, had vested in the State. The secondtime the compensation of Rs.57,388/- had been received in the year1980-81 under the Ceiling Act, 1972. For the third time, the respondenthas received compensation in a sum of Rs.60 lakhs. The respondent hascommitted a serious fraud. It was also urged that Rajinder Singh hasfiled W.P. No.256/1979, the High Court dismissed the writ petition andobserved that the respondent has acted unfairly knowing fully well thatthe land had already vested in the State and made other observationsregarding successive litigations preferred by the respondent and thewithdrawal of RFA No.9/1973.

27. Learned Additional Solicitor General appearing on behalf ofthe appellants further urged that as per the principle, fraud vitiates, therespondents are not entitled to any compensation. They could not bepermitted to take advantage of the continuance of wrong entry. Therewas no title left with Rajinder Singh as the land had vested automaticallyin the State under the Abolition Act. The LAO had also directed not topay the compensation owing to the ceiling case in which Late RajinderSingh has already received the compensation and land had been declaredsurplus. The question involved is not of determination of title under sections18 and 30 of the LA Act but the title stood extinguished is apparent fromSection 27 and ceiling proceedings of which evidence has been permittedto be adduced by this Court. Even the LAO and the Reference Courthave ordered that there was no title with Rajinder Singh, as such,compensation was not to be paid. The effect of previous proceedingsand the overall conduct of Rajinder Singh ought to have been taken intoconsideration by the High Court. The observation made by the HighCourt that it could not go into the question of the title of Rajinder Singh inthe proceedings is wholly incorrect as it is the serious case of fraud, thetitle has already been adjudicated conclusively and lost in otherproceedings. It was not a case of an adjudication of title in the presentproceedings. The effect of Section 27 proceeding and that of ceiling A

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AActcase was required to be considered. The High Court could not havepermitted the perpetuation of fraud while dismissing the first appeal afterthis Court has remitted the matter to it.

28. It was further urged that the observation made by the LAC inhis award in 1989 not to make payment of compensation, due to ceilingBcase was wholly legal and valid. Even the Reference Court has held inthe cases that there was no title with the respondents and the appealagainst the same R.F.A. is pending in the High Court. The High Courtought to have exercised the supervisory power as there was an errorapparent on the face of the record and to prevent abuse of process oflaw. When the principle of ‘fraud vitiates’ is attracted, the label ofCproceedings is not material and the court is bound to look into same andrelegation to a remedy of the civil suit could not be said to be appropriatein the facts of the instant case.

29. It was contended by learned senior counsel on behalf of LRs.of Late Rajinder Singh that the question of the pre-existing right of theDState cannot be gone into in these proceedings. The land in question didnot vest in the State under the Abolition Act. Even if the amendment ofpleadings and additional evidence had been allowed by this Court, thepre-existing right of the State over the property cannot be gone into inproceedings under section 18 or 30 of the LA Act. It was not open to theEState Government to question the title of the land-owners in referenceproceedings. The State had filed an appeal against the reference orderwhich was dismissed on 3.6.2004 as barred by limitation. It was alsocontended that the land did not vest in the State as it was under personalcultivation. Under the Abolition Act, there was vesting of land whichwas under tenancy only. Land in question was not within the purview ofFthe term ‘land’ as defined in section 2(5) in the Abolition Act, as such,there was no vesting of the same in the State. Though, 1011 bighas and6 Biswas of land in village Jhakri vested in the State and mutation-orderwas made on 27.2.1962. However, certain other lands which were underpersonal cultivation had been excluded, later on, the Compensation OfficerGalso passed an order determining compensation on 12.4.1966 which wasin respect of tenancy land and not in respect of land under personalcultivation or the land not assessed to land revenue. Tenants have beengiven the rights over the land mentioned in the order dated 12.4.1966passed by the Compensation Officer.

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30. It was also contended that the land under personal cultivationwas mentioned in the revenue records as ‘Banjar Kadim’ which couldnot be said to be ‘land’ within the meaning of Abolition Act nor it vestedin the State Government. The area of Village Jhakri which was left withRajinder Singh was 2119 bighas and 19 Biswas. The said land did notvest in the State. After remand of the case from this Court under Section27 of Abolition Act, the writ petition was withdrawn and civil suit No.15/1970 was filed and the same was dismissed by the High Court. The suitwas also withdrawn in appeal as such there was no adjudication of therights in the previous rounds of proceedings.

31. Learned counsel on behalf of the respondents furthercontended that at the time of land acquisition neither the land was finallydeclared surplus nor possession was taken under the Ceiling Act, assuch it did not vest in the State unless the possession was taken. Theacquisition of land under the LA Act is protected under the Ceiling Act.The statement made by the counsel on behalf of the Power of Attorney-holder of Rajinder Singh during the course of the first appeal withdrawingSuit No.15/1970 was incorrect. As the order passed by the Collector inceiling case declaring the land surplus had been set aside by the FinancialCommissioner. As such an incorrect statement was made before theHigh Court; maybe it was made in ignorance of the facts. Earlier videorder dated 10.6.1980, 10027.5 bighas of land was declared surplus andvide order dated 10.11.1993, additional 9679 bighas total 19706.5 bighaswas declared as surplus. Even if compensation was collected, it wouldnot make any difference as the land did not vest in the State unlesspossession was taken.

32. Following questions arise for consideration:

(i) whether land has vested in State under the Abolition Act, andeffect of acceptance of compensation under the said Act?

(ii) Effect of the proceedings under the Ceiling Act?

(iii) Effect of withdrawal of Civil Suit No.15/1970 in appeal.

(iv) Whether the question of right, title or interest of Late RajinderSingh or his successors to obtain compensation can be consideredin the proceedings under sections 18 and 30 of the LA Act?Particularly, on the basis of the principle “fraud vitiates”.

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A(v) Whether the respondents who are claiming on the basis ofpatta /transfer made by Rajinder Singh, are bona fide transfereesand entitled to compensation?

Question No.1: In Re. the effect of the H.P. Abolition of BigLanded Estates, Act, 1953

B

33. After Independence was achieved, in order to bring the agrarianreforms, the Abolition Act was enacted in the State of Himachal Pradeshwhich came into force on Republic Day w.e.f. 26.1.1955. The AbolitionAct has been enacted to provide for the abolition of the big landed estatesand to reform the law relating to tenancies and to make provisions forCmatters connected therewith in Himachal Pradesh. ‘Estate’, ‘land-owner’and ‘holdings’ have been defined in section 2(3) of the Abolition Act andhave the meanings respectively assigned to these words in the PunjabLand Revenue Act, 1887 as in force in Himachal Pradesh immediatelybefore 26.1.1950.

34. The terms ‘estate’, ‘land-owner’ and ‘holding’ have beendefined under sections 3(1), 3(2) and 3(3) of the Punjab Land RevenueAct, 1867are extracted hereunder:

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“3. Definition: - In this Act, unless there is something repugnant inthe subject or context; (1) “estate” means any area— (a) forwhich a separate record-of-rights has been made; or (b) whichhas been separately assessed to land revenue, or would have beenso assessed if the land-revenue had not been released, compoundedfor or redeemed; or (c) which the State Government may, bygeneral rule or special order, declare to be an estate; E

(2) “land-owner” does not include a tenant or an assignee of land-Frevenue, but does not include a person to whom a holding hasbeen transferred, or an estate or holding has been let in farm,under this Act for the recovery of an arrear of land-revenue or ofa sum recoverable as such an arrear and every other person nothereinbefore in this clause mentioned who is in possession of anGestate or any share or portion thereof , or in the enjoyment of anypart of the profits of an estate;

(3) “holding” means a share or portion of an estate held by theland-owner or jointly by two or more land-owners.”

35. Estate means any area for which a separate record of rightshas been made; or which has been separately assessed to land revenueor would have been so assessed if the land revenue had not been released,compounded for or redeemed. Definition of ‘land-owner’ does not includea tenant or an assignee of land revenue, and holding means a share orportion of an estate held by the landowner or jointly by two or morepersons.

36. The word ‘holding’ as defined in the Punjab Land RevenueAct, 1887 would mean an estate which means any area for which aseparate record of rights has been made or which has been separatelyassessed to land revenue, or would have been so assessed to land revenuein case it had not been released, compounded for or redeemed, or hasbeen declared to be an estate by the State Government. Thus, expression‘holding’ would include the area of an estate also if it is assessed orwould have been assessed but for release, compounding or redeemingof land revenue. As per the definition of the estate in section 3(1) of thePunjab Act, estate means any area for which separate record of rightshas been made. The expression land-owner used in Section 27 has to beunderstood as defined in section 3(2) of the Punjab Act. Similarly, thedefinitions of ‘estate’ and ‘holding’ in the Punjab Act assume significance.

37. The ‘land’ has been defined in section 2(5) of the AbolitionAct thus:

“(5) “land” means land which is not occupied as the site of anybuilding in a town or village and is occupied or has been let foragricultural purposes or for purposes subservient to agriculture,or for pasture, and includes –

(a) the sites of buildings and other structures on such land, (b) orchards,

(c) ghasnies;”

38. The ‘landlord’ has been defined in section 2(6) of AbolitionAct to mean a person under whom a tenant holds land, and to whom thetenant is or but for a contract to the contrary, would be liable to pay rentfor the land. Chapter II of the Abolition Act deals with the rights ofoccupancy of a tenant. Acquisition of proprietary rights by tenants hasbeen dealt with in Chapter III from sections 9 to 27. Section 9 provides A

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Afor the appointment of Compensation Officer. Section 11 deals with theright of the tenant to acquire the interests of the landowner. A tenantother than a sub-tenant can apply under section 11 for the acquisition ofright, title, and interest of the landowner in the land of tenancy held byhim under the landowner. Section 12 deals with the determination of theamount of compensation payable by a tenant for the acquisition of theBright, title and interest of the landowner. Section 15 deals with theacquisition by the State Government of the rights of the landowner. Sameis extracted hereunder:

“15. (1) Notwithstanding anything contained in the foregoingprovisions of this Chapter but subject to the provisions of clauseC(d) and clause (g) of sub-section (1) of Section 54, the StateGovernment may by notification in the Gazette declare that asfrom such date and in respect of such area as may be specified inthe notification, the right, title and interest of the landowner in thelands of any tenancy held under him by a tenant shall standDtransferred to and vest in the State Government free from allencumbrances created in such lands by the landowner.

(2) With effect from the aforesaid date –

(a) the landowner shall cease to have any right to collect or toreceive any rent or any share of the land revenue in respect ofEsuch lands and his liability to pay the land revenue in respect ofthe lands shall also cease; (b) the tenant shall pay direct to the State Government the renthe was liable to pay to the landowners before the date of thenotification; and F

(c) the consequences mentioned in clauses (b) to (f) of section84 shall mutatis mutandis ensue.”

39. Section 16 of Abolition Act deals with payment ofcompensation to the landowners for the acquisition of their rights. Section16 is extracted hereunder:G

“16. The landowner whose right, title and interest in lands havebeen acquired by the State Government under Section 15 shall beentitled to compensation which shall be calculated as far aspracticable according to the provisions of sections 12 and 13.”

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40. Interest on compensation is payable under section 18 ofAbolition Act. Section 19 deals with the claims for compensationand determination of such claims and in case of a dispute, it has tobe referred to civil court under section 20. Where the landowneris minor, it has to be deposited with the Collector or in any bankselected in this behalf by the State Government as provided insection 22. The Compensation Officer shall have the powers of acivil court under the Code of Civil Procedure for the purposesenumerated therein. Section 26 deals with the power to framerules to carry out the purposes of the Chapter.

41. Section 27 of the Abolition Act deals with the vesting of rightsof ownership in the Government. The right of the landowner whoselandholding exceeds the annual land revenue of Rs.125 per year,the right, title and interest of such owner shall be deemed to betransferred and vested in the State Government free from allencumbrances. The vesting of such holding of the landowner isautomatic in case revenue of the landholding is exceeded byRs.125 per year. However, the only saving grace is provided undersection 27(2) to the extent the land is under the personal cultivationof the landowner. The rights of intermediaries get automaticallyvested in the State Government under section 27(1), the landowneris entitled to receive compensation under section 27(3) to bedetermined by the Compensation Officer having regard to theprovisions of sections 17 and 18 of the Abolition Act. Section 27 isextracted hereunder:

“27. (1) Notwithstanding anything contained in the foregoingprovisions of this Chapter, a landowner who holds land, theannual land revenue of which exceeds Rs.125 per year, theright, title and interest of such owner in such land shall bedeemed to have been transferred and vested in the StateGovernment free from all encumbrances.

(2) Nothing contained in sub-section (1) shall apply in respectof such land which is under the personal cultivation of thelandowner.

(3) The landowner whose rights are acquired under sub-section(1) by the State Government, shall be entitled to receivecompensation which shall be determined by the Compensation AB

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Officer having regard to Sections 17 and 18 of this Act, inaccordance with the provisions of Schedule II, but in the caseof such occupancy tenant who is liable to pay rent in terms ofland revenue or the multiple of land revenue, the compensationpayable to his landowner shall be computed in accordance withSchedule I.

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(4) The right, title and interest of the land-owner acquired undersub-section (1) or (2) shall be transferred by the StateGovernment on the payment of compensation in accordancewith Schedule I to such tenant who cultivates such land.

(5) The State Government shall give rehabilitation grantaccording to the rules framed under this Act, to such smalllandowner whose right, title and interest have been extinguishedand who does not have any other means of livelihood.”

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It is apparent from section 27 that it contains non-obstante clauseDand it is applicable to the land as defined in section 2(5) which is notoccupied as the site of any building in a town or village and is occupiedor has been let for agricultural purposes or for purposes subservient toagriculture, or for pasture. The definition is inclusive and wide and itcovers the sites of buildings and other structures on such land, orchards,and ghasnies too. Thus, the definition of land being inclusive is very wideEand in case the land revenue of the holding of Zamindar exceeds Rs.125per year except for the land under personal cultivation, entire land holdingwould vest in the State Government and such vesting is automatic.

42. A reading of section 27 makes it clear that on the abolition ofestates except for the land which is under personal cultivation of theFlandowner, vests in the State. Vesting is automatic and would not dependupon the payment of compensation and this has already been held bythis Court vide order dated 17.9.1969 in the case filed by Late RajinderSingh. It is crystal clear that vesting of the land is not confined to theland held under the tenancy right. The expression used in section 27 isG“landowner” who holds the land. Thus, there is no scope for the submissionthat section 27 is applicable only to a land held by the tenant in tenancy.It is applicable to all kinds of land as defined in the Abolition Act held bythe landowner and the definition of the land in Abolition Act is inclusiveand would include all kinds of land in a town or village which is notoccupied by any site of the building. Thus, all land which is not occupied H

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by any building situated in a town or building would vest in the State anda land which has been let for agricultural purpose or for purposessubservient to agriculture or for pasture including the sites of buildingand other structure of the land, orchard, and ghasnies would vest in theState. Thus, it is apparent that the land which is Banjar, Abadi, Gharat,Kalhu, and Gair-Mumkin are all covered under the definition of land.

43. The big estates were sought to be abolished by the H.P.Abolition Act. When section 27 of the Abolition Act and definition ofland is read with ‘holding’ and ‘estate’ and ‘landowner’ as defined in thePunjab Land Revenue Act, 1887 it is clear that the land held by lateRajinder Singh definitely exceeded revenue of Rs.125 per year as isapparent from documents and various orders passed in the case. Theobject of the Abolition Act is to provide for the abolition of big landedestates and to bring land reform in the law relating to tenancies and tomake provisions for matters connected therewith. The land holding ofLate Rajinder Singh was a big estate and was definitely covered underthe purview of the Act and in particular under section 27 and all thelands vested in the State except the land under his personal cultivation.

44. Thus, we are of the considered opinion that the area underpersonal cultivation which was saved in favour of Rajinder Singh was64 bighas 12 Biswas only as specified. It is apparent from the orderdated 27.2.1962 Khata No.1 Kita measuring 1011 bighas 6 Biswas vestedin the ownership of Government of Himachal Pradesh in village Jhakri.In the review on 19.9.1964, there was only partial modification withrespect to area 14 bighas 12 Biswas. The land revenue of land at Jakhrias apparent from Jamabandi of 1955-56 at the time when the AbolitionAct came into force was Rs.155.58 it was more than Rs.125 as suchthe land which was Banjar kadim or otherwise not under personalcultivation had vested in the State.

45. Under the Abolition Act compensation was determined underthe provisions of section 27(1) and was ordered to be paid by theCompensation Officer, Mahasu District, Kasumpti vide order dated12.4.1966. Sum of Rs.28,019 had been paid to Rajinder Singh. Thoughpayment of compensation was not a condition precedent for vesting ofland it was automatic, Rajinder Singh was paid compensation also forthe land mentioned in the order of Compensation Officer. Even if thecompensation was not paid for some land, as that was not under personal AB

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Acultivation had also automatically vested free from all encumbrances inthe State.

Issues

46. The subsequent attempt made by Rajinder Singh to claim thatthe land was not covered under the definition of land, was wholly frivolous,unacceptable and was rightly rejected in C.S. No.15/1970 filed byBRajinder Singh. This Court in proceedings under section 27 of AbolitionAct vide order dated 17.9.1969 ordered that the land only under personalcultivation was saved and not any other land. The finding recorded inthe remand order on the question of law is binding otherwise also theposition of law is what was held by this Court in the aforesaid decision.After this Court remitted the matter for examination of the questionCwhich was the land under personal cultivation that would only be savedfrom vesting. To avoid rigor of the order the writ petition was withdrawnby Late Rajinder Singh with liberty to file a civil suit and Suit No.15/1970was filed. The stand taken was that the said land was Banjar, Abadi,Gharat, Kohlu, and Gair-Mumkin. The stand taken that the land wasDGhasni that is wasteland and Banjar land itself indicated that the landwas not under personal cultivation and thus as per the case set up inCivil Suit by the plaintiff, Rajinder Singh it was clear that he has abandonedthe stand that the land was under personal cultivation and took theaforesaid stand. The said stand itself made clear that the land was notunder personal cultivation, at the time of abolition and had vested in theEState and we have no hesitation to arrive at the said conclusion based onthe case set up by the plaintiff in the course of civil suit No.15/1970.

47. The Banjar land or Banjar Kadim is nonetheless the land asdefined in section 2(5) of the Abolition Act. Apart from that, it is clearthat ghasni land is also included in the definition of land, no doubt aboutFit that growing of grass is for agriculture purpose. However, the pastureor grassland cannot be said to be under personal cultivation and suchland would also vest in the State. The expression used is personalcultivation i.e. the cultivation by dint of his own labour. The agriculture isa wider term than personal cultivation and would include several aspectsGsuch as dairy-farming, the use of land as grazing, meadow or pastureland or orchard or other land or for market gardens or nursery grounds.The fructus naturales is the outcome of nature alone but such land cannotbe said to be under personal cultivation as envisaged in the AbolitionAct.

48. In Jadab Singh & Ors. v. The Himachal PradeshAdministration & Ors. AIR 1960 SC 1008, this Court considered thequestion of the abolition of estates which was declared invalid as havingbeen passed by the State legislature which was not duly constituted. Avalidating Act was passed by the Parliament. This Court considered thelegislature competence and constitutional validity of the Abolition Act. Itwas held that in view of Article 240 as it stood before its amendment bythe Constitution (Seventh Amendment) Act, 1956, the Parliament wascompetent to enact the validating Act. The provisions of the AbolitionAct did not infringe Articles 19 and 31 of the Constitution of India andthe Abolition Act fell within the protection of Article 31A of theConstitution and it was not open to challenge on the ground that it infringedArticles 19 and 31 of the Constitution. The intent of the Abolition Act isthat the agrarian reforms by Abolition of Big Landed Estates have to begiven the full effect. Once land has vested in the State, it was not opento Rajinder Singh on the basis of continuation of wrong entries in revenuerecords, to claim any right, title or interest much less compensation underthe Ceiling Act as well as under the provisions of the LA Act. Thus, theentire land on the condition being satisfied with the landed holdings of alandowner the annual land revenue of which is Rs.125 or more, landvested in the State and not excess part over and above the land to whichthe said land revenue is ascribed, with the saving of personally cultivatedland.

2. In Re effect of proceedings under the Ceiling Act:

49. We advert to the question as it has relevance though it is notnecessary, in view of the findings recorded that land had vested in theState under the provisions of the Abolition Act.

50. The Ceiling Act came into force in 1972 providing a ceiling onagricultural holdings. Section 11 of the Ceiling Act is extracted hereunder:

“11. Vesting of surplus area in the State Government- The surplus area of a person shall, on the date on which possessionthereof is taken by or on behalf of the State Government, bedeemed to have been acquired by the State Government for apublic purpose on payment of amount hereafter provided and allrights, title, and interests (including the contingent interest, if any),recognised by any law, custom or usage for the time being in AB

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force, of all persons in such area shall stand extinguished andsuch rights, title and interests shall vest in the State Governmentfree from any encumbrance:

Provided that where any land within the permissible area of themortgagor is mortgaged with possession and falls within the surplusarea of the mortgagee, only the mortgagee rights shall be deemedto have been acquired by the State Government and the sameshall vest in it.”

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51. Section 4 deals with the permissible ceiling area and section 6defines a ceiling area in excess of the permissible area. The provisionsCof sections 4 and 6 are extracted hereunder:

“4. Permissible area-

(1) The permissible area of a landowner or a tenant or a mortgageewith possession or partly in one capacity or partly in another ofperson or a family consisting of husband, wife and up to threeDminor children shall be in respect of- (a) land under assured irrigation capable of growing two cropsin a year- 10 acres.

(b) land under assured irrigation capable of growing one cropin a year- 15 acres.

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(c) land of classes other than described in clauses (a) and (b)above including land under orchards-30 acres.

(2) The permissible area for the purposes of clause (c) of sub-section (1) for the districts of Kinnaur and Lahaul and Spiti, TehsilPangi and Sub-Tehsil Bharmaur of Chamba district, area of ChhotaBhangal and Bara Bhangal of Baijnath Kanungo Circle of TehsilPalampur of Kangra district, and area of Dodra Kowar PatwarCircle of Rohru Tehsil and Pandrabis Pargana of Rampur Tehsilof Shimla district shall be 70 acres.

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(3) The permissible area of a family under sub-section (1) shallbe increased by one-fifth of the permissible area under sub-sections (1) and (2) for each additional minor member of a familysubject to the condition that the aggregate permissible area shallnot exceed twice the permissible area of family under sub-sections(1) and (2).

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(4) Every adult son of a person shall be treated as a separate unitand he shall be entitled to the land up to the extent permissible toa family under sub-sections (1) and (2) subject to the conditionthat the aggregate land of the family and that of the separate unitsput together shall not exceed twice the area permissible under thesaid sub-sections:

Provided that where the separate unit owns any land, the sameshall be taken into account for calculating the permissible area forthat unit.

(5) If a person holds land of two or more categories described inclauses (a), (b) and (c) of sub-section (1) and sub-section (2) ofthis section then the permissible area shall be determined on thefollowing basis: -

(i) in the areas mentioned in sub-section (2) of this section, oneacre of land mentioned in clause (a) of sub-section (1) shall countas one and a half acres of land mentioned in clause (b) of sub-section (1) and seven acres of land mentioned in clause (c) ofsub-section (1); 1976.

(ii) in the areas other than the areas mentioned in sub-section (2)of this section, one acre of land mentioned in clause (a) of sub-section (1) shall count as one and a half acres of land mentionedin clause (b) of sub-section (1), and three acres of land mentionedin clause (c) of sub-section (1):

Provided that on the basis of ratio prescribed in clauses (i) and(ii), the permissible area shall be converted into the category ofland mentioned in sub-section (2) and in clause (c) of sub-section(1) as the case may be, and the total area so converted shall notexceed 70 acres in case of clause (i) and 30 acres in case ofclause (ii)].

(6) Where a person is a member of the family, the land held bysuch person together with the land held by all the members of thefamily shall be taken into account for the purpose of calculatingthe permissible area.”

“6. Ceiling on land-

Notwithstanding anything to the contrary contained in any law,custom, usage or agreement, no person shall be entitled to hold A

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308SUPREME COURT REPORTS

Awhether as a landowner or a tenant or a mortgagee withpossession or partly in one capacity and partly in another, the landwithin the State of Himachal Pradesh exceeding the permissiblearea on or after the appointed day.”

52. The proceedings were initiated under the Ceiling Act and orderBwas passed by Collector (Ceiling) on 10.6.1980 declaring 10,027 bighas5 Biswas of land as surplus. It was mentioned in the order that theowner had taken compensation of Rs.57,888.80 which was calculatedunder section 14 of the Act. Voucher details have been given as follows:

53. Now, the factum of withdrawal of the amount of compensationwas disputed before us by contending that the compensation under theCeiling Act had not been received. It passes comprehension that how itlies in the mouth to even contend in view of the clear statement made inEthe order passed by the competent authority and voucher numbers withthe date on which payment had been made. Rajinder Singh did not questionorder dated 30.6.1980. On the contrary, reference was made by theSettlement Officer with respect to the order of the Competent Authorityon the ground that his minor son was illegally allotted one unit. FinancialFCommissioner has taken the matter in Revision No.224/1982 against theaforesaid order. It was pointed out by the Settlement Officer thatRajeshwar Singh son of Rajinder Singh was minor and was not entitledto any land independently but was allotted one unit by the Collector(Ceiling). He was minor on the appointed day i.e. 24.1.1971 and RajinderSingh and his family consisting of children including minor RajeshwarGSingh were entitled to only one unit of permissible area. The FinancialCommissioner in the order dated 5.9.1985 has held against Rajinder Singhthat his minor son Rajeshwar Singh could not have been allotted one unitvide order of competent authority dated 10.6.1980, as such one unitmore land has been allotted to the family than permissible under the H

ceiling law. It was also held that without enquiry transfers were held tobe bona fide. Thus, the order passed by the SDO was set aside and thecase was remanded to pass fresh order to declare the additional land assurplus than the one determined in the earlier order. The order ofCompetent Authority dated 10.6.1980 was not questioned by LateRajinder Singh or his family members nor the order of FinancialCommissioner passed on 5.9.1985 was questioned. It was not an orderin favour of Rajinder Singh as contended on behalf of the respondentsbut was against his interest and remand order of 5.9.1985 directingadditional land to be declared surplus also has attained finality. Afterremand, Collector (Ceiling) has declared additional land as surplus andtotal 19706 bighas 5 Biswas had been declared as surplus. As againstthe order passed by Collector (Ceiling) dated 10.11.1993, the appealwas preferred to the Commissioner which was dismissed on 30.8.1996.Revision filed against the said order was also dismissed on 18.1.2002 bythe Financial Commissioner.

54. The fact is conclusively established that land in question hadbeen declared as surplus and compensation under the Ceiling Act hadalso been received, even though the land had already vested in the Stateunder the Abolition Act. Once the disputed land had been admittedlydeclared surplus in Ceiling Act vide order dated 30.6.1980, there was noquestion of payment of compensation to Rajinder Singh or to his legalrepresentatives in proceedings initiated later on in the year 1987 underthe L.A. Act. The Land Acquisition Collector in 1989 was justified indirecting that the compensation determined should not be paid due to theeffect of the Ceiling Act and that question was raised in the ReferenceCourt also, it was incumbent upon the Reference Court to go into theaforesaid aspects. It was not fact situation that question of the title hasbeen disputed and decided in reference proceedings but whether RajinderSingh or his LRs. were entitled to claim compensation in view of theproceedings and that orders passed under the Abolition Act and CeilingAct were definitely required to be gone into. Thus, we are of theconsidered opinion that once land has been declared surplus andcompensation has been received. It was not open to receive it again inthe land acquisition case.

(iii) In Re: Effect of withdrawal of C.S. No.15/1970 in appeal

55. Civil Suit No.15/1970 was dismissed on merits. Thereafter inthe first appeal, it was withdrawn by Rajinder Singh before the Division AB

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ABench on 23.6.1986. Order dated 23.6.1986 passed by the High Courtof withdrawal of C.S. No.15 of 1970 in first appeal No.9/1973 is extractedhereunder:

“In the present appeal, the learned counsel for the appellanthas given the statement that by an order dated 10.06.1980 passedBby the Collector Rampur Bushahar in case State of HimachalPradesh vs. Rajkumar Rajender Singh, under section 8 ofHimachal Pradesh Land Ceiling Act, the disputed land has beenacquired by the Respondent and the Appellant has been paidcompensation for the same. He has further stated that in the viewCof this subsequent event he may be permitted to withdraw the suitand the appeal may be dismissed as having become infructuous.

It is not disputed that the land in dispute in this appeal is also thesubject matter of dispute in the order dated 10.06.1980 passed bythe Collector Rampur Bushahar. As the land in dispute has beenDacquired and the appellant has been paid the compensation forthe same, therefore, we are of the view that due to the subsequentevents there are sufficient grounds for allowing the plaintiff toinstitute a fresh suit for the subject matter and on the same causeof action. As a result, we allow the Plaintiff to withdraw the suitwith permission to file a fresh suit in respect of the subject matterEof the suit on the same cause of action in case there is any necessityto file such a subsequent suit. The suit is dismissed as withdrawnand the present appeal is dismissed as having become infructuous.The parties are left to bear their own costs of this appeal.”

It was stated by the counsel for Late Rajinder Singh before theFHigh Court in RFA No.9/1973 that compensation had been received byRajinder Singh and order had been passed on 10.6.1980 by the Collector,Rampur under the Ceiling Act. The disputed land had been acquired bythe State as such, the permission was sought to withdraw the suit and itwas prayed that appeal be dismissed as infructuous. In our opinion,Gfactually it was not an incorrect statement but it was correctly made inthe High Court that land had been declared surplus and compensationhad been received, the fact was supported by vouchers mentioned in theorder dated 10.6.1980, and it was totally frivolous contention to thecontrary raised by the respondents that compensation had not beenreceived. It appears that the respondents have no respect for the truth H

and have tried to hoodwink the court at several stages by making falseaverments and statements to perpetrate fraud.

56. In essence, after this Court has remitted the matter to theHigh Court in the proceedings under the Abolition Act this Court hasclearly held as per order dated 17.9.1969 in the case of Rajinder Singhthat only the land under personal cultivation would be saved. Thereafterhe has withdrawn the writ application of 1962, on the ground that disputedquestion of fact was raised in the writ application. It was in order toavoid adjudication in view observation of this Court made against interestof Rajinder Singh in aforesaid order and the fact that as the land was notunder personal cultivation, the writ petition was withdrawn and thereafterin C.S. No.15/1970 that was filed in which, Rajinder Singh had abandonedthe case of land being under personal cultivation. On the contrary, raisedthe plea that it was not the “land” at all and as such it was not within theclutches of the Abolition Act.

57. A Single Bench of the High Court dismissed the suit on meritsand has recorded the finding that the land was not under personalcultivation and it had vested in the State and it was the “land” as definedin section 2(5) of the Abolition Act. Thereafter Regular First Appealwhich was preferred before the Division Bench was dismissed asinfructuous and suit was withdrawn by aforesaid order dated 23.6.1986on the ground that compensation had been received under the CeilingAct, and land has been declared surplus. It is clear that once land hasbeen declared surplus and compensation had been paid under the CeilingAct. It was not the reason for withdrawal of Civil Suit No.15/1970 bythe plaintiff Rajinder Singh that the land was personally cultivated byhim. It was not at all open to Rajinder Singh or his LRs. to takeinconsistent stands and contend in the present proceedings that landwas under personal cultivation. They are estopped from doing it not onlyby conduct but by way of abandonment of the plea, having not taken it inC.S. No.15/1970. It was not the ground made for withdrawal of suit thatland was under personal cultivation. The effect is that order of vestinghas attained finality even otherwise withdrawal of suit does not checkrunning of limitation as provided in Order 23 Rule 2 CPC. It is futile andtoo late in the day to allow the respondent to lay such a claim.

58. As a matter of fact, the withdrawal of civil suit No.15/1970was made on the statement of learned counsel on behalf of plaintiff A

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ARajinder Singh that disputed land had been declared as surplus in theceiling proceedings, compensation had been received and under theprovisions of the Ceiling Act. The suit was permitted to be withdrawnwith liberty to file fresh suit whereas there was no such formal defect.Be that as it may. Once suit has been withdrawn on the ground that landhad been declared surplus and compensation had been received it wouldBcreate estoppel against the plaintiff to contend to contrary and fromclaiming compensation under the LA Act notwithstanding permission tofile suit because as a matter of fact also, the disputed land had beendeclared surplus on 30.6.1980 and additional land in 1993. The landdeclared as surplus in 1980 attained finality, as well as order of theCFinancial Commissioner on 5.9.1985. Both the orders also attained finality.Thus, the order of remand dated 5.9.1985 having attained finality, and itwould not be possible to reopen it at any subsequent stage. Thus, theorders dated 30.6.1980 and 5.9.1985 having attained finality vis a vis toRajinder Singh and compensation having been received, as the land in question was declared surplus under the Ceiling Act. No right, title orDinterest survived with Rajinder Singh or his successors to claimcompensation under Land Acquisition Act.

59. The proceedings were initiated in the year 1987 for theacquisition of land whereas the order of ceiling was passed earlier in1980 and 1985 and subsequently the surplus area was increased in 1993.EBy no stretch of any principle of law, Late Rajinder Singh or his successorscould have claimed compensation in the proceedings in question initiatedunder the LA Act in the year 1987. In our considered opinion therespondents Rajinder Singh and his family were not entitled to claim anymonetary compensation under the LA Act for the said land. The amountFthat had been withdrawn under the LA Act, was wholly impermissibleand tantamount to playing fraud upon the legal system. As a matter offact, compensation has been taken for the land in the proceedings underthe Abolition Act. Even if compensation in respect of certain land wasnot payable or paid, vesting would not depend upon the same. Land notunder personal cultivation of Jagirdars had vested in the State, as such itGwas not open even to obtain compensation for the very same land eitherunder the provisions of the Ceiling Act which has been received or underthe provisions of the LA Act. It was wholly impermissible and illegal andtantamount to scam committed by fraudsters. The cases were withdrawnone after the other just to perpetuate the fraud on the legal system by H

raising the inconsistent pleas and taking unfair and undue advantage ofthe wrong continuation of entries in the revenue papers.

(iv) In Re: Question of title under sections 18 and 30 of LA Actand effect of fraud :

60. Learned counsel on behalf of the respondents contended thatthe existing right of the State cannot be decided in the proceedings undersection 18 or 30 of the LA Act. Even if the amendment has been allowed,it will not prohibit the respondents to raise untenability of such an objection.Even if amendment along with additional evidence had been allowed, itwill not prohibit the raising of the plea that State cannot challenge thetitle in such proceedings. Reliance has been placed on the decisions ofthis Court in Sharda Devi v. State of Bihar, (2002) 3 SCC 705, MeherRusi Dalal v. Union of India, (2004) 7 SCC 362, Ahad Brothers v.State of M.P., (2005) 1 SCC 545, and U.P. Awas Evam Vikas Parishadv. Gyan Devi, (1995) 2 SCC 326, to contend that only the quantum ofcompensation can be questioned by local bodies and not the title of thelandowners.

61. In the instant case, as already discussed, the LAO in the awarddated 24.2.1989 has ordered compensation not to be paid as the land hasbeen declared surplus in the ceiling matter and further proceedings werepending after remand of the case in which additional land was declaredsurplus which was allotted illegally to minor son Rajeshwar Singh. Theposition further worsened in 1993.

62. In Sharda Devi v. State of Bihar, (2003) 3 SCC 128, thequestion arose whether Reference under Section 30 of Land AcquisitionAct, 1894 was maintainable at the instance of the State of Bihar as itwas the owner of the land and the land vested in the State. It was heldthat the State is not a person interested as defined under Section 3(b) ofthe Land Acquisition Act, 1894. This Court observed:

“26. The scheme of the Act reveals that the remedy of referenceunder Section 18 is intended to be available only to a ‘personinterested’. A person present either personally or throughrepresentative or on whom a notice is served under Section 12(2)is obliged, subject to his specifying the test as to locus, to apply tothe Collector within the time prescribed under Section 18(2) tomake a reference to the Court. The basis of title on which the A

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reference would be sought for under Section 18 would obviouslybe a pre-existing title by reference to the date of the award. So isSection 29, which speaks of ‘person interested’. Finality to theaward spoken of by Section 12(1) of the Act is between theCollector on one hand and the ‘person interested’ on the otherhand and attaches to the issues relating to (i) the true area i.e.measurement of the land, (ii) the value of the land, i.e. the quantumof compensation, and (iii) apportionment of the compensationamong the ‘persons interested’. The ‘persons interested’ wouldbe bound by the award without regard to the fact whether theyhave respectively appeared before the Collector or not. The finalityto the award spoken of by Section 29 is as between the ‘personsinterested’ interse and is confined to the issue as to the correctnessof the apportionment. Section 30 is not confined in its operationonly to ‘persons interested’. It would, therefore, be available forbeing invoked by the ‘persons interested’ if they were neitherpresent nor represented in proceedings before the Collector, norwere served with a notice under Section 12(2) of the Act or whenthey claim on the basis of a title coming into existence post award.The definition of ‘person interested’ speaks of ‘an interest incompensation to be made’. An interest coming into existence post-award gives rise to a claim in compensation which has alreadybeen determined. Such a person can also have recourse to Section30. In any case, the dispute for which Section 30 can be invokedshall remain confined only (i) as to the apportionment of the amountof compensation or any part thereof, or (ii) as to the persons towhom the amount of compensation (already determined) or anypart thereof is payable. The State claiming on the basis of apre-existing right would not be a ‘person interested’, asalready pointed out hereinabove and on account of its rightbeing pre-existing, the State, in such a case, would not beentitled to invoke either Section 18 or Section 30 seekingdetermination of its alleged pre-existing right. A right accruedor devolved post-award may be determined in a reference underSection 30 depending on Collector’s discretion to show indulgence,without any bar as to limitation. Alternatively, such a right may beleft open by the Collector to be adjudicated upon in any independentlegal proceedings. This view is just, sound and logical as a titlepost-award could not have been canvassed up to the date of the award and should also not be left without remedy by denyingaccess to Section 30. Viewed from this angle, Section 18 and 30would not overlap and would have fields to operate independentof each other.” (emphasis supplied)

63. The question in the instant case is as to whether an incumbentcan be permitted to play blatant fraud time and again and court has to besilent spectator under the guise of label of the various legal proceedingsat different stages by taking different untenable stands whethercompensation can be claimed several times as done in the instant caseand its effect. Before the land acquisition had been commenced in1987, the land more than 1000 bighas had been declared a surplus inceiling case and compensation collected, which indeed disputed land atJhakari, it would be a perpetuating fraud in case such a person is permittedto claim compensation for same very land. Fraud vitiates the solemnproceedings; such plea can be set up even in collateral proceedings.The label on the petition is not much material and this Court has alreadypermitted the plea of fraud to be raised. Moreover, Appeal arising out of72 awards is still pending in the High Court in which Reference Courthas declined compensation on the aforesaid ground.

64. Reliance has also been placed on the observations made inMeher Rusi Dalal v. Union of India, (2004) 7 SCC 362, in which thisCourt has dealt with the issue of apportionment of compensation forwhich claim was raised by the Union of India, not in the capacity of theowner but as a protected tenant. The claim of tenancy was not put forthbefore the LAO, though represented in the acquisition proceedings. ThisCourt observed that in such a case it could reasonably be inferred thatno right was being claimed and it ought to have been made before theLAO if it had any such claim in respect of pre-existing right. The LAOwas not under a duty to make an enquiry. The claim of tenancy at thebelated stage was an afterthought to frustrate the payment. The decisionhas no application to the instant case as the LAO in the awards passed,noted the factum of ceiling proceedings as such the effects of the samecan always be considered.

65. In Ahad Brothers v. State of M.P., (2005) 1 SCC 545, thisCourt observed that question of the title of the State over the acquiredland, cannot be decided under Section 18 of Land Acquisition Act, 1894.This Court considered that when an award has been passed and the A

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Aappellant was recorded as owner in the revenue papers, he was entitledto receive compensation. There is no dispute in the aforesaid proposition,however, in the instant case facts are different and a person cannot bepermitted to receive the compensation of vested land in State under theAbolition Act and when the land had been declared surplus andcompensation paid on wrong entry continued. The same wrong entryBcould not have been permitted to be utilised for award of compensationto a person under the LA Act. In the instant case, there had been earlierproceedings which makes it clear that Rajinder Singh was not entitled toclaim compensation under the LA Act. It is apparent that there was nosubsisting right, title or interest left with Rajinder Singh or his LRs., thus,Cthey could not be permitted to obtain the compensation.

66. Fraud vitiates every solemn proceeding and no right can beclaimed by a fraudster on the ground of technicalities. On behalf ofappellants, reliance has been placed on the definition of fraud as definedin the Black’s Law Dictionary, which is as under:D“Fraud means: (1) A knowing misrepresentation of the truth orconcealment of a material fact to induce another to act to his orher detriment. Fraud is usually a tort, but in some cases (esp.when the conduct is willful) it may be a crime. (2) Amisrepresentation made recklessly without belief in its truth toEinduce another person to act. (3) A tort arising from a knowingmisrepresentation, concealment of material fact, or recklessmisrepresentation made to induce another to act to his or herdetriment. (4) Unconscionable dealing; esp., in contract law, theunconscientious use of the power arising out of the parties’ relativepositions and resulting in an unconscionable bargain.”F

Halsbury’s Law of England has defined fraud as follows:

“Whenever a person makes a false statement which he does notactually and honestly believe to be true, for purpose of civil liability,the statement is as fraudulent as if he had stated that which he didGknow to be true, or know or believed to be false. Proof of absenceof actual and honest belief is all that is necessary to satisfy therequirement of the law, whether the representation has been maderecklessly or deliberately, indifference or reckless on the part ofthe representor as the truth or falsity of the representation affordsmerely an instance of absence of such a belief.”

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In KERR on the Law of Fraud and Mistake, fraud has beendefined thus:

“It is not easy to give a definition of what constitutes fraud in theextensive significance in which that term is understood by CivilCourts of Justice. The Courts have always avoided hamperingthemselves by defining or laying down as a general propositionwhat shall be held to constitute fraud. Fraud is infinite in variety…Courts have always declined to define it, … reserving to themselvesthe liberty to deal with it under whatever form it may presentitself. Fraud … may be said to include property all acts, omissions,and concealments which involve a breach of legal or equitableduty, trust or confidence, justly reposed, and are injurious to another,or by which an undue or unconscientious advantage is taken ofanother. Al surprise, trick, cunning, dissembling and other unfairway that is used to cheat anyone is considered as fraud. Fraud inall cases implies a willful act on the part of anyone, wherebyanother is sought to be deprived, by illegal or inequitable means,of what he is entitled too.”

67. In Ram Chandra Singh v. Savitri Devi, (2003) 8 SCC 319,wherein it was observed that fraud vitiates every solemn act. Fraud andjustice never dwell together and it cannot be perpetuated or saved bythe application of any equitable doctrine including res-judicata. ThisCourt observed as under:

“15. Commission of fraud on court and suppression of materialfacts are the core issues involved in these matters. Fraud, as iswell-known, vitiates every solemn act. Fraud and justice neverdwell together.

16. Fraud is a conduct either by letter or words, which inducesthe other person, or authority to take a definite determinative standas a response to the conduct of former either by word or letter.

17. It is also well settled that misrepresentation itself amounts tofraud. Indeed, innocent misrepresentation may also give reasonto claim relief against fraud.

18. A fraudulent misrepresentation is called deceit and consists inleading a man into damage by willfully or recklessly causing himto believe and act on falsehood. It is a fraud in law if a party AB

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makes representations which he knows to be false, and injuryensues therefrom although the motive from which therepresentations proceeded may not have been bad.

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23. An act of fraud on court is always viewed seriously. A collusionor conspiracy with a view to deprive the rights of the others inrelation to a property would render the transaction void ab initio.Fraud and deception are synonymous.

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25. Although in a given case a deception may not amount to fraud,fraud is anathema to all equitable principles and any affair taintedwith fraud cannot be perpetuated or saved by the application of-”any equitable doctrine including resjudicata.

68. In Madhukar Sadbha Shivarkar v. State of Maharashtra,(2015) 6 SCC 557, this Court observed that fraud had been played byshowing the records and the orders obtained unlawfully by the declarant,would be a nullity in the eye of law though such orders have attainedfinality. Following observations were made:

“27. The said order is passed by the State Government only toenquire into the landholding records with a view to find out as towhether original land revenue records have been destroyed andfabricated to substantiate their unjustifiable claim by playing fraudupon the Tehsildar and appellate authorities to obtain the ordersunlawfully in their favour by showing that there is no surplus landwith the Company and its shareholders as the valid subleases aremade and they are accepted by them in the proceedings UnderSection 21 of the Act, on the basis of the alleged false declarationsfiled by the shareholders and sub-lessees Under Section 6 of theAct.The plea urged on behalf of the State Government and thede-facto complainants-owners, at whose instance the orders arepassed by the State Government on the alleged ground of fraudplayed by the declarants upon the Tehsildar and appellate authoritiesto get the illegal orders obtained by them to come out from theclutches of the land ceiling provisions of the Act by creating the revenue records, which is the fraudulent act on their part whichunravels everything and therefore, the question of limitation underthe provisions to exercise power by the State Government doesnot arise at all. For this purpose, the Deputy Commissioner ofPune Division was appointed as the Enquiry Officer to hold suchan enquiry to enquire into the matter and submit his report forconsideration of the Government to take further action in thematter. The legal contentions urged by Mr. Naphade, in justificationof the impugned judgment and order prima facie at this stage, weare satisfied that the allegation of fraud in relation to getting theland holdings of the villages referred to supra by the declarants onthe alleged ground of destroying original revenue records andfabricating revenue records to show that there are 384 sub-leasesof the land involved in the proceedings to retain the surplus landillegally as alleged, to the extent of more than 3000 acres of landand the orders are obtained unlawfully by the declarants in theland ceiling limits will be nullity in the eye of law though suchorders have attained finality, if it is found in the enquiry by theEnquiry Officer that they are tainted with fraud, the same can beinterfered with by the State Government and its officers to passappropriate orders.The landowners are also aggrieved parties toagitate their rights to get the orders which are obtained by thedeclarants as they are vitiated in law on account of nullity is thetenable submission and the same is well founded and therefore,we accept the submission to justify the impugned judgment andorder of the Division Bench of the High Court.”

69. In Jai Narain Parasrampuria v. Pushpa Devi Saraf, (2006)7 SCC 756, this Court observed that fraud vitiates every solemn act.Any order or decree obtained by practicing fraud is a nullity. This Courtheld as under:

“55. It is now well settled that fraud vitiated all solemn act. Anyorder or decree obtained by practicing fraud is a nullity.[See - (1)Ram Chandra Singh v. Savitri Devi and Ors., (2003) 8 SCC 319followed in (2) Vice Chairman, Kendriya Vidyalaya Sangathan,and Anr. v. Girdhari Lal Yadav, (2004) 6 SCC 325; (3) State ofA.P. and Anr. v. T. Suryachandra Rao, (2005) 6 SCC 149; (4)

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AIshwar Dutt v. Land Acquisition Collector and Anr., (2005) 7 SCC190; (5) Lillykutty v. Scrutiny Committee, SC & ST Ors., (2005)8 SCC 283; (6) Chief Engineer, M.S.E.B. and Anr. v. SureshRaghunath Bhokare, (2005) 10 SCC 465; (7) Smt. Satya v. ShriTeja Singh, (1975) 1 SCC 120; (8) Mahboob Sahab v. Sayed Ismail,(1995) 3 SCC 693; and (9) Asharfi Lal v. Koili, (1995) 4 SCCB163.]”

70. In State of A.P. v. T. Suryachandra Rao, (2005) 6 SCC 149,it was observed that where land which was offered for surrender hadalready been acquired by the State and the same had vested in it. It washeld that merely because an enquiry was made, the Tribunal was notdivested of the power to correct the error when the respondent hadclearly committed a fraud. Following observations were made:

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“7. The order of the High Court is clearly erroneous. There is nodispute that the land which was offered for surrender by therespondent had already been acquired by the State and the samehad vested in it. This was clearly a case of fraud. Merely becausean enquiry was made, Tribunal was not divested of the power tocorrect the error when the respondent had clearly committed afraud.

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8. By “fraud” is meant an intention to deceive; whether it is fromany expectation of advantage to the party himself or from the illwill towards the other is immaterial. The expression “fraud”involves two elements, deceit, and injury to the person deceived.The injury is something other than economic loss, that is, deprivationof property, whether movable or immovable or of money and itwill include and any harm whatever caused to any person in body,mind, reputation or such others. In short, it is a non-economic ornon-pecuniary loss. A benefit or advantage to the deceiver, willalmost always call loss or detriment to the deceived. Even in thoserare cases where there is a benefit or advantage to the deceiver,but no corresponding loss to the deceived, the second condition issatisfied. [See Dr. Vimla v. Delhi Administration, 1963 Supp (2)SCR 585 and Indian Bank v. Satyam Febres (India) Pvt. Ltd.,(1996) 5 SCC 550]

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9. A “fraud” is an act of deliberate deception with the design ofsecuring something by taking unfair advantage of another. It is adeception in order to gain by another’s loss. It is a cheating intendedto get an advantage. (See S.P. Changalvaraya Naidu v. Jagannath,(1994) 1 SCC 1.)

10. “Fraud” as is well known vitiates every solemn act. Fraudand justice never dwell together. Fraud is a conduct either byletter or words, which includes the other person or authority totake a definite determinative stand as a response to the conductof the former either by words or letter. It is also well settled thatmisrepresentation itself amounts to fraud. Indeed, innocentmisrepresentation may also give reason to claim relief againstfraud. A fraudulent misrepresentation is called deceit and consistsin leading a man into damage by willfully or recklessly causinghim to believe and act on falsehood. It is a fraud in law if a partymakes representations, which he knows to be false, and injuryenures therefrom although the motive from which therepresentations proceeded may not have been bad. An act offraud on court is always viewed seriously. A collusion or conspiracywith a view to deprive the rights of the others in relation to aproperty would render the transaction void ab initio. Fraud anddeception are synonymous. Although in a given case a deceptionmay not amount to fraud, fraud is anathema to all equitableprinciples and any affair tainted with fraud cannot be perpetuatedor saved by the application of any equitable doctrine including resjudicata. (See Ram Chandra Singh v. Savitri Devi and Ors., (2003)8 SCC 319.)

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13. This aspect of the matter has been considered recently by thisCourt in Roshan Deen v. Preeti Lal, (2002) 1 SCC 100, RamPreeti Yadav v. U.P. Board of High School and IntermediateEducation, (2003) 8 SCC 311, Ram Chandra Singh v. Savitri Devi,(2003) 8 SCC 319 and Ashok Leyland Ltd. v. State of T.N. andAnr., (2004) 3 SCC 1.

14. Suppression of a material document would also amount to afraud on the court, (see Gowrishankar v. Joshi Amba Shankar A

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Family Trust, (1996) 3 SCC 310 and S.P. Chengalvaraya Naidu v.Jagannath, (1994) 1 SCC 1).

15. “Fraud” is a conduct either by letter or words, which inducesthe other person or authority to take a definite determinative standas a response to the conduct of the former either by words orletter. Although negligence is not fraud it can be evidence of fraud;as observed in Ram Preeti Yadav, (2003) 8 SCC 311.

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16. In Lazarus Estate Ltd. v. Beasley (1956) 1 QB 702, LordDenning observed at pages 712 & 713: (All ER p. 345C)

“No judgment of a Court, no order of a Minister can beallowed to stand if it has been obtained by fraud. Fraud unravelseverything.”

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71. In A.V. Papayya Sastry v. Govt. of A.P., (2007) 4 SCC 221,this Court as to the effect of fraud on the judgment or order observedthus:

19. Now, it is well-settled principle of law that if any judgment ororder is obtained by fraud, it cannot be said to be a judgment ororder in law. Before three centuries, Chief Justice Edward Cokeproclaimed; E

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22. It is thus settled proposition of law that a judgment, decree ororder obtained by playing fraud on the Court, Tribunal or Authorityis a nullity and non-est in the eye of law. Such a judgment, decreeor order —by the first Court or by the final Court— has to beGtreated as nullity by every Court, superior or inferior. It can bechallenged in any Court, at any time, in appeal, revision, writ oreven in collateral proceedings.*********

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38. The matter can be looked at from a different angle as well.Suppose, a case is decided by a competent Court of Law afterhearing the parties and an order is passed in favour of the applicant/plaintiff which is upheld by all the courts including the final Court.Let us also think of a case where this Court does not dismissSpecial Leave Petition but after granting leave decides the appealfinally by recording reasons. Such order can truly be said to be ajudgment to which Article 141 of the Constitution applies. Likewise,the doctrine of merger also gets attracted. All orders passed bythe courts/authorities below, therefore, merge in the judgment ofthis Court and after such judgment, it is not open to any party tothe judgment to approach any court or authority to review, recallor reconsider the order.

39. The above principle, however, is subject to exception of fraud.Once it is established that the order was obtained by a successfulparty by practising or playing fraud, it is vitiated. Such order cannotbe held legal, valid or in consonance with law. It is non-existentand nonest and cannot be allowed to stand. This is the fundamentalprinciple of law and needs no further elaboration. Therefore, ithas been said that a judgment, decree or order obtained by fraudhas to be treated as nullity, whether by the court of first instanceor by the final court. And it has to be treated as nonest by everyCourt, superior or inferior.

Supervisory jurisdiction of the court can be exercised in case oferror apparent on the face of the record, abuse of process and if theissue goes to the root of the matter.

72. In S.P. Chengalvaraya Naidu v. Jagannath, (1994) 1 SCC1, this Court noted that the issue of fraud goes to the root of the matterand it exercised powers under Article 136 to cure the defect. The Courtobserved:

“5. The High Court, in our view, fell into patent error. The shortquestion before the High Court was whether, in the facts andcircumstances of this case, Jagannath obtained the preliminarydecree by playing fraud on the court. The High Court, however,went haywire and made observations which are wholly perverse.We do not agree with the High Court that “there is no legal dutycast upon the plaintiff to come to court with a true case and prove A

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it by true evidence”. The principle of “finality of litigation” cannotbe pressed to the extent of such an absurdity that it becomes anengine of fraud in the hands of dishonest litigants. The courts oflaw are meant for imparting justice between the parties. One whocomes to the court must come with clean hands. We are constrainedto say that more often than not, the process of the court is beingabused. Property-grabbers, tax- evaders, bank-loan-dodgers andother unscrupulous persons from all walks of life find the court -process a convenient lever to retain the illegal-gains indefinitely.We have no hesitation to say that a person, who’s case is basedon falsehood, has no right to approach the court. He can besummarily thrown out at any stage of the litigation.

6. The facts of the present case leave no manner of doubt thatJagannath obtained the preliminary decree by playing fraud onthe court. A fraud is an act of deliberate deception with the designof securing something by taking unfair advantage of another. It isa deception in order to gain by another’s loss. It is a cheatingintended to get an advantage. Jagannath was working as a clerkwith Chunilal Sowcar. He purchased the property in the courtauction on behalf of Chunilal Sowcar. He had, on his own volition,executed the registered release deed (Exhibit B-1S) in favour ofChunilal Sowcar regarding the property in dispute. He knew thatthe appellants had paid the total decretal amount to his masterChunilal Sowcar. Without disclosing all these facts, he filed thesuit for the partition of the property on the ground that he hadpurchased the property on his own behalf and not on behalf ofChunilal Sowcar. Non-production and even non-mentioning of the release deed at the trial tantamounts to playing fraud on the court.We do not agree with the observations of the High Court that theappellants-defendants could have easily produced the certifiedregistered copy of Exhibit B-15 and non-suited the plaintiff. Alitigant, who approaches the court, is bound to produce all thedocuments executed by him which are relevant to the litigation.If he withholds a vital document in order to gain advantage on theother side then he would be guilty of playing fraud on the court aswell as on the opposite party.”

73. In K.K. Modi v. K.N. Modi, (1998) 3 SCC 573, it was observedthat one of the examples cited as an abuse of the process of the court is re-litigation. It is an abuse of the process of the court and contrary tojustice and public policy for a party to re-litigate the same issue whichhas already been tried and decided earlier against him.

74. Learned counsel for the respondent has placed reliance onthe decision rendered in Ujjagar Singh v. Collector, Bhatinda, (1996)5 SCC 14, wherein this Court examined the effect of coming into forceof Punjab Land Reforms Act, 1972 and vesting of the surplus area in theState. In this case, the area in possession of landlord was declaredsurplus under the Pepsu Act, but possession had not been taken by theState. It was held that area did not vest finally as the surplus area underthe Pepsu Act, owing to coming into force of the new Act, the ceilingarea must be determined afresh under the new Punjab Act. In theinstant case, the order was passed in ceiling matter in the year 1980 andthe adjudication order of Collector (Ceiling) was not questioned nor theorder of remand to declare land as surplus and then the additional landwas declared surplus in 1993. It was not the case of re-opening of thecase. In fact, the land has vested in the State under the Abolition Act.Thereafter, compensation has been obtained, obviously once land hasvested in the State, the possession of such land/open land is deemed tobe that of the owner. In any view of the matter, in the facts andcircumstances of the instant case, compensation could not have beenclaimed.

75. In State of H.P. v. Harnama, (2004) 13 SCC 534, this Courtobserved that possession of land was not taken and the tenant was inoccupation of the land and had acquired ownership rights before theland was declared surplus as against the landlord. It was further observedthat the land in question had been notified as surplus and the fact that theoriginal owner of the land had been paid compensation, would be of noavail to the State if before the date of actual vesting non-occupant tenantin possession of the land had acquired ownership rights. It is totallydistinguishable and cannot be applied to the instant case.

76. Learned counsel on behalf of the respondent has referred tothe decision rendered in Madan Kishore v. Major Sudhir Sewal, (2008)8 SCC 744, wherein question arose with respect to entitlement of sub-tenant to apply under Section 27(4). It was held that the expression inSection 27(4), such tenant who cultivates such land, does not entitle asub-tenant either to claim proprietary rights or apply for the same under A

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ASection 27(4). It was held that he was not a sub-tenant. The decision isof no help to the cause espoused on behalf of LRs. of Rajinder Singh.

In the peculiar facts projected in the case the principle fraud vitiatesis clearly applicable it cannot be ignored and overlooked under the guiseof the scope of proceedings under Section 18/30 of the LA Act.

B

In Re Q. No.5 Bona fide Transferees :

77. With respect to the appeals filed by SJVN Ltd. arising out ofjudgment and order of 2013 in the matter of bona fide transferees, filedin the year 2014, the High Court has held that the respondents are bonafide transferees from Rajinder Singh. However, it was pointed out onCbehalf of the appellants that in 72 reference cases, the regular first appealis still pending in the High Court. It has been held by the ReferenceCourt that the claimants are not entitled to any compensation. In caseregular first appeal is pending in the High Court as against the order ofreference court against the respondents who claim to be bona fideDtransferees, obviously, the question of bona fide transferee has to bedecided finally in the pending regular first appeal before the High Court.In case appeal has not been filed or has been decided, the compensationto follow the decision. We do not propose to give final verdict on issue atthis stage. We leave the question open to the High Court to adjudicate.However, in case compensation has been paid to transferees, theEcompensation paid shall not be recovered till such time pending appeal isdecided. In case no matter against transferees is pending and appealhas been decided in favour of land owners, obviously they have to bepaid and this Order will not come in the way.

78. Resultantly, we allow the appeals and direct that theFcompensation that has been withdrawn by Late Rajinder Singh or hisLRs. in the case of land acquisition, in original proceedings or undersection 28-A shall be refunded along with interest at the rate of 12 percentper annum within 3 months from today to the appellants/State, as thecase may be, and compliance be reported to this Court. The appeals areGaccordingly allowed. We leave the parties to bear their own costs.

Ankit Gyan

Appeals allowed.

H