UNION OF INDIA & ANR. versus M/S. K.C. SHARMA & CO. & ORS. on 14 August 2020

1. The Union of India through Secretary (Revenue) and another,have filed these appeals aggrieved by the judgment and decree dated21.05.2007 passed by the High Court of Delhi in R.F.A.Nos.204-8/2006.By the aforesaid impugned judgment, the High Court has allowed theRegular First Appeals, preferred by the respondents, by setting asidejudgment and decree dated 04.01.2006 passed in Suit No.203 of 2005 bythe Addl. District Judge, Delhi.

2. Necessary facts in brief are as under :

The land admeasuring 36 bighas 11 biswas comprising in KhasraNos.14/9, 12, 17, 18, 19, 20/1, 23 and 24 belonged to Gaon Sabha LuharHeri, Delhi. The large extent of land in the village, including the aforesaidland, was acquired by the Government by initiating proceedings underLand Acquisition Act, 1894 (for short, ‘the Act’). The notification underSection 4(1) of the Act was issued on 27.01.1984 and declaration underSection 6 of the Act came to be published on 20.09.1984. By passing theAward bearing No.101/86-87 on 19.09.1986, possession of the land wastaken by the Government. In the award proceedings, as the respondentshave claimed compensation on the ground that the land was given tothem on lease by Gaon Sabha, the matter was referred to the Civil Courtunder Sections 30 and 31 of the Act, for apportionment of the amount ofcompensation. In the aforesaid reference proceedings, preferred underSections 30 and 31 of the Act, it was the claim of the respondents that asthe land was not fit for cultivation, it was granted on lease to therespondents to remove the “shora” and to make the land fit for cultivation.It is their case that in view of the lease granted by the Gaon Sabha, theyhave spent huge amount for removal of “shora” and made the land fitfor cultivation, and continued in possession by cultivating the same formore than 30 years. In the aforesaid proceedings referred under Sections30 and 31 of the Act, the Civil Court has passed the judgment and decreeon 28.09.1989, declaring that the respondents-claimants are entitled for A

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Acompensation to the extent of 87% and remaining 13% is to be paid tothe panchayat/Gaon Sabha.

3. Nearly after three years of the aforesaid judgment and decreein the proceedings under Sections 30 and 31 of the Act, some villagershave filed Writ Petition No.1408/1992 alleging that the respondents wereBnot the lessees of the land in question and they have claimed compensationin collusion with ex-Pradhan of the Gaon Sabha. The said writ petitionwas disposed of by the High Court of Delhi on 21.02.1997. In theaforesaid order the High Court has permitted the Additional DistrictMagistrate to intervene in the pending proceedings under Section 18 ofthe Act and place on record the available material to substantiate theirCcase. At the same time it was kept open to the legal heirs of the originallessee to support their contention that there is a lease and they are entitledto claim compensation for the land acquired. The relevant portion of theorder dated 21.02.1997 passed in the writ petition reads as under :

“We are not to be understood as deciding anything regarding theDrights of the parties one way or the other. The A.D.M. is herebydirected to file his intervention application within one month fromthe date of receipt of this order and the leaned Addl. DistrictJudge is directed not to dispose of the application for enhancementbefore a decision is rendered on the intervention application ofEthe A.D.M. It will be open to the A.D.M. to consider, apart fromintervention in the matter, whether any separate proceedings areto be initiated or not for the recovery of the compensation alreadypaid.”

4. In view of the observations made by the High Court in the writFpetition, Gaon Sabha/Panchayat has filed application under Order 1 Rule10 of the Code of Civil Procedure to implead it in the proceedings underSection 18 of the Act. In the aforesaid proceedings it was held that inview of the judgment and decree passed in proceedings under Sections30 and 31 of the Act holding that the respondents-claimants are entitledfor compensation to the extent of 87%, the Civil Court has held thatGPanchayat is entitled only to seek enhancement of compensation to theextent of their 13% share.

5. Further, in view of the observations made by the High Court, asuit was filed by the appellants, initially before the High Court of Delhi,which was subsequently transferred to the Court of Additional DistrictH

Judge, Delhi on the ground of pecuniary jurisdiction and same wasnumbered as Suit No.203 of 2005. The said suit was filed seekingdeclaration that the judgment and decree dated 28.09.1989 was obtainedby fraud as such they are entitled for recovery of Rs.11,20,707/- withinterest @ 18% p.a. In the aforesaid suit mainly it was the case of theappellants-plaintiffs that the said decree was obtained by fraud in collusionwith ex-Pradhan, and created a resolution showing that the said landwas leased in their favour for a period of five years from 04.04.1981. Itwas their specific case that since the ex-Pradhan of the Gaon Sabhawas in collusion with the respondents-defendants and due to such fraudcommitted by them upon the court they could obtain order and decree assuch the same was assailed in the suit.

6. The said suit was decreed by judgment and decree dated04.01.2006 and aggrieved by the same respondents-defendants havepreferred First Appeals in R.F.A.Nos.204-8/2006 before the High Courtof Delhi. The High Court, by appreciating the documentary and oralevidence on record, has come to the conclusion that appellants-plaintiffshave not pleaded necessary particulars so as to show how fraud wascommitted upon the court which decided the reference under Sections30 and 31 of the Act. Further by recording a finding that Gram Panchayatwanted to give the said land on lease to make the land fit for cultivationby removing “shora” and the said proposal was signed by all the membersof the Gaon Sabha and only after approval from the Dy. Director,Panchayat, it was put to auction. It was further held by the High Courtthat in the auction proceedings there were as many as six bidders and asthe bid of the respondents was highest at Rs.89/- per acre same wasaccepted. It is further held by the High Court that the proposal regardingacceptance of the bid was also approved by the Dy. Director vide letterdated 16.04.1981 and only thereafter respondents took possession ofthe land and paid the money through various receipts which are part ofthe record. Further the High Court has held that the entries made in therevenue records support the plea of the respondents that they continuedin possession by cultivating the land and as, every action of the GaonSabha from the stage of proposal to create lease and acceptance oflease was approved by Dy. Director, there is no case made out by theappellants to show that lease was created only with the collusion of theex-Pradhan of the Gaon Sabha. With the aforesaid findings the appealsfiled by the respondents were allowed and judgment and decree of thetrial court was set aside. Hence, these civil appeals, by plaintiffs.

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A7. We have heard Ms. Aishwarya Bhati, learned AdditionalSolicitor General for the appellants and Sri Jayant Bhushan, learned senioradvocate appearing for the respondents-defendants.

8. Learned Additional Solicitor General appearing for the appellantshas mainly contended that respondents have claimed compensation byBplaying fraud. It is submitted that there is no lease deed as such in favourof the respondents and the only rights which were conferred on therespondents were to remove the “shora” on the land in question so as tomake the land fit for cultivation. It is submitted that in absence of anylease deed executed by the Gram Panchayat in favour of the respondents,at best it can be treated as a licence for removal of “shora” only andCsame cannot be treated as a lease. The learned ASG has submitted thatas the judgment and decree which was questioned in the suit was obtainedby fraud, the suit was rightly decreed by the trial court but same wasreversed by the High Court without appreciating their case in properperspective. It is submitted by learned ASG that in any event havingDregard to claim made by the respondents-defendants they are not entitledfor compensation to the extent of 87%. In support of her pleading thatas much as the judgment and decree dated 28.09.1989 is obtained byfraud and the same is a nullity and it is vitiated, she has placed relianceon the following judgments of this Court :

E1. S.P. Chengalvaraya Naidu (Dead) by LRs v. Jagannath (Dead)by LRs & Ors.[1]

2. A.V. Papayya Sastry & Ors. v. Govt. of A.P. & Ors.[2]

3. Madhukar Sadbha Shivarkar (Dead) by LRs v. State ofMahrashtra & Ors.[3]

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4. Satluj Jal Vidyut Nigam v. Raj Kumar Rajinder Singh (Dead)through LRs[4]

5. Shrist Dhawan (Smt.) v. M/s. Shaw Brothers[5]

6. Meghmala & Ors. V. G. Narasimha Reddy & Ors.[6]

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1 (1994) 1 SCC 12 (2007) 4 SCC 2213 (2015) 6 SCC 557

4 2018 (11) SCALE 383 = (2019) 14 SCC 449

5 (1992) 1 SCC 534H6 (2010) 8 SCC 383

It is submitted that above said case law supports the case of theappellants that as the decree was obtained by fraud, same is a nullityand vitiated and same can be set aside at any point of time. Furtherlearned ASG, in support of her argument that the transaction from theGaon Sabha is to be construed as a licence but not a lease and to drawthe difference between ‘lease’ and ‘licence’, placed reliance on thejudgments of this Court in the case of Associated Hotels of India Ltd. v.R.N. Kapoor[7]; C.M. Beena & Anr. V. P.N. Ramachandra Rao[8]; andBharat Petroleum Corporation Ltd. v. Chembur Service Station[9].

9. On the other hand Sri Jayant Bhushan, learned senior counselappearing for the respondents has contended that judgment and decreepassed in proceedings under Sections 30 and 31 of the Act has becomefinal. It is submitted that in view of the finality attained to such judgmentand decree, only question which arose for consideration in the suit waswhether such judgment and decree was obtained by fraud or not. Insupport of the plea of fraud, the only contention of the appellants wasthat there was no lease and resolution for grant of lease was obtained incollusion with the ex-Pradhan of the Gaon Sabha. It is submitted bylearned senior counsel that it is clear from the evidence on record thatthe decision to grant lease of the land was taken by Gaon Sabha and allthe members are signatories and only after approval of the Dy. Director,Panchayat land was leased. It is submitted that lease was granted byconducting auction and as much as the original respondent-defendantwas the highest bidder lease was granted by parting possession to therespondents. It is submitted that as the respondents continued inpossession which is evident from the evidence produced as reflected inthe revenue records, it is not open for the appellants to plead thatrespondents are to be considered only as licensees but not lessees. It issubmitted that as the trial court has not properly appreciated the evidenceon record and decreed the suit, same is rightly set aside by the HighCourt and there are no grounds to interfere with the same. The learnedsenior counsel has submitted that though no lease deed has been executedand registered, respondents are entitled to the benefit of Section 53A ofthe Transfer of Property Act, 1882. To support his contention, he hasrelied on judgments of this Court in the case of Maneklal Mansukhbhai 7 (1960) 1 SCR 368

8 (2004) 3 SCC 595

9 (2011) 3 SCC 710

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Av. Hormusji Jamshedji Ginwalla & Sons[10] and Hamzabi & Ors. v. SyedKarimuddin & Ors.[11]. Further, in support of his argument that the fraudhas to be established by pleading with sufficient proof, he has relied onjudgment of this Court in the case of Ranganayakamma & Anr. V. K.S.Prakash (D) by LRs & Ors.[12].

B10. Having heard the learned counsel on both sides, we haveperused the material on record.

11. In this case we are not concerned with the correctness of thejudgment and decree dated 28.09.1989 passed in the proceedings underSections 30 and 31 of the Act. In the suit filed in Suit No.203 of 2005 aCdeclaration is sought to the effect that the judgment and decree dated28.09.1989 is obtained by playing fraud. In support of their case the onlypleading was that there was no lease in fact and same was created bycreating resolution in collusion with the ex-Pradhan of Panchayat. Fromthe material and evidence on record we are in agreement with the viewtaken by the High Court. In view of the rival claims for compensationDmatter was referred under Sections 30 and 31 of the Act and it was heldthat respondents are entitled to compensation to the extent of 87%whereas Gaon Sabha was held entitled only to the extent of 13%. Thesaid judgment has become final. Same was not questioned in any appeal.Without filing any appeal against the judgment and decree datedE28.09.1989, a separate suit is filed mainly on the ground that the saidjudgment and decree is obtained by fraud. From the material placed andevidence produced, it is clear that the land in question was ‘banjar’ landhaving “shora” and Gram Panchayat wanted to give the said land onlease to make the same fit for cultivation by removing “shora”. Suchproposal was agreed to by all the members of Gaon Sabha and proposalFas such was sent to Dy. Director, Panchayat for approval. The Dy.Director of Panchayat has approved the same by deciding that theminimum bid should be for Rs.75/- per acre. Only after receipt of suchapproval from the Dy. Director, Panchayat, land was auctioned on04.04.1981 for grant of leasehold rights. In the auction conducted thereGwere as many as six bidders and bid of the respondent was the highestwhich was at Rs.89/- per acre and was accepted. Even such acceptanceof proposals was again sent to Dy. Director for approval and the Dy.

10 AIR 1950 SC 111 (2001) 1 SCC 414H12 (2008) 15 SCC 673

Director vide letter dated 16.04.1981 approved the acceptance of thebid in favour of the respondent for a period of five years. Thereafter therespondent was put in possession and he continued in possession bypaying bid amount to the Gram Panchayat. The revenue records producedalso reveal that the name of the respondent was entered as possessorand cultivator. In the light of such documentary evidence it cannot besaid that lease was obtained by the respondents in collusion with ex-Pradhan. It is to be noted that it was not an act of ex-Pradhan of theGaon Sabha and from the stage of proposal same was approved by theDy. Director, only thereafter by conducting open auction respondentswere granted lease.

12. Though the learned Additional Solicitor General appearing forthe appellants has relied on several judgments in support of her plea thatas the judgment and decree was obtained by fraud same is a nullity andvitiated, but in a given case whether such decree was obtained by fraudor not, is a matter which is to be judged with reference to pleadings andthe evidence on record. When the judgment and decree is assailed onlyon the ground that lease was created in collusion with the ex-Pradhan,as the same is contrary to evidence, the only plea of the respondentswas rightly not accepted by the High Court. As at every stage theproceedings for grant of lease were approved by the competent authority/Dy. Director, Panchayat, as such it cannot be said respondents haveobtained lease in collusion with ex-Pradhan of the Panchayat. Exceptsuch a vague plea, there were no particulars how the fraud was played.It is fairly well settled that fraud has to be pleaded and proved. More so,when a judgment and decree passed earlier by the competent court isquestioned, it is necessary to plead alleged fraud by necessary particularsand same has to be proved by cogent evidence. There cannot be anyinference contrary to record. As the evidence on record discloses thatfraud, as pleaded, was not established, in absence of any necessarypleading giving particulars of fraud, we are of the view that no case ismade out to interfere with the well reasoned judgment of the High Court.The case law in this regard submitted by the learned ASG for theappellants would not render any assistance to support their plea. Furthercases referred in the case of Associated Hotels[7] and C.M. Beena[8] alsowill not come to the rescue of the case of the appellants in any manner.As it is clear from the evidence that the respondents were put inpossession and they continued in possession by cultivating the land thesaid judgments would not render any assistance in support of the case of AB

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Athe appellants. On the other hand in the case of Maneklal Mansukhbhai[10]relied on by learned senior counsel for the respondents it is clearly heldby this Court that defence under Section 53A of the Transfer of PropertyAct, 1882 is available to a person who has agreement of lease in hisfavour though no lease has been executed and registered. Similarproposition is also approved in the judgment of this Court in the case ofBHamzabi[11] wherein this Court has held that Section 53A of the Transferof Property Act, 1882 protects the possession of persons who have actedon a contract of sale but in whose favour no valid sale deed is executedor registered. As it is clear that respondents were put in possession andthe Panchayat has acted upon their proposal for grant of lease said case Claw supports the case of the respondents.

13. For the aforesaid reasons, we do not find any merit in theseappeals so as to interfere with the impugned judgment. Accordingly,these civil appeals are dismissed with no order as to costs.

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Divya Pandey

Appeals dismissed.

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