Bhagat Ram & Ors Vs. State of
Punjab & Ors  INSC 256 (2 December 1966)
02/12/1966 SIKRI, S.M.
RAO, K. SUBBA (CJ) HIDAYATULLAH, M.
CITATION: 1967 AIR 927 1967 SCR (2) 165
East Punjab Holdings (Consolidation and
Prevention of Fragmentation) Act (50 of 1948)-Scheme reserving land for income
of Panchayat-If acquisition-If hit by second proviso to Art. 31A(1) of the
Constitution of India.
A scheme under the East Punjab Holdings
(Consolidation and Prevention of Fragmentation Act) for consolidation of an
estate was prepared in 1959. The petitioner, who held land within the ceiling
limit, challenged it on the ground that in so far as it makes reservation of
land for the income of the Panchayat, it was hit by the second proviso to Art.
31A(1) of the Constitution.
HELD (per Subba Rao C.J., Sikri and Bachawat,
JJ.). The essential difference between "acquisition by the State" on
the one hand and "modification or extinguishment of rights" on the
other, is that in the first case, the beneficiary is the State while in the
second, the beneficiary is not the State. As the beneficiary in the instant
case was the Panchayat which falls within the definition of the word
"State" under Art. 12 of the Constitution, the reservation in the
scheme was contrary to the second proviso and must be modified appropriately.
[144 D-H] The repartition under s. 21 of the
Act would not amount to "acquisition" within the second proviso to
Art. 31A, because, under ss. 23A and 24 of the Act, till possession has
changed, the management and control do not vest in the Panchayat and
acquisition would not be complete. Therefore, it could not be said that the
acquisition had already taken place before the Seventeenth Amendment, which introduced
the second proviso to Art. 31A(1), came into force, and that the scheme was not
hit by that proviso. [146 E-H] Ajit Singh v. State of Punjab  2 S.C.R.
Per Hidayatullah and Shelat, JJ : Since the
land of the petitioner was reduced to something below the ceiling fixed by law,
compensation at a rate which was not lower than the market value must be paid
to him. [147 C-F]
ORIGINAL JURISDICTION : Writ Petition No. 125
Petition under Art. 32 of the Constitution of
India for the enforcement of fundamental rights.
Hardev Singh and S. S. Khanduja, for the
K. L. Gossain, O. P. Malhotra and R. N.
Sachthey, for the respondents.
The Judgment of SUBBA RAO C. J. and SIKRI and
was delivered by SIKRI, J. The separate
Judgment of HIDAYATULLAHH and SHELAT, JJ. was delivered by HIDAYATULLAH.
166 Sikri, J. This is a petition under art.
32 of the Constitution challenging the scheme made in respect of the
consolidation of village Dolike Sunderpur. We have today delivered judgment in
Ajit Singh v. State of Punjab(1) and most of the points in this appeal are
covered by the decision in that case. Two points remain to be dealt with in
The first question that arises is whether the
scheme ill so far as it makes reservations of land for income of the Panchayat
is hit by the second proviso to art. 3 1 A. The scheme reserves lands for
phirni, paths, agricultural paths, manure pits, cremation grounds, etc., and
also reserves an area of 100 kanals 2 marlas (standard kanals) for income of
the Panchayat. We have already held in Ajit Singh's(1) case that acquisition
for the common purposes such as phirnis, paths, etc., is not acquisition by the
State within the second proviso to art. 31A. But this does not dispose of the
question whether the reservation of land for income of the Panchayat is
acquisition of land by the state within the second proviso to art. 31 A. We
held in that case that there was this essential difference between
"acquisition by the State" on the one hand and "modification or
extinguishment of rights" on the other that in the first case the
beneficiary is the State while in the latter case the beneficiary of the
modification or the extinguishment is not the State. Here it seems to us that
the beneficiary is the Panchayat which falls within the definition of the word
"State" under art. 12 of the Constitution. The income derived by the
Panchayat is in no way different from its any other income. It is true that s.
2(bb) of the East Punjab Holdings (Consolidation and Prevention of
Fragmentation) Act, 1948, defines 'common purpose' to include the following
". . . providing income for the
Panchayat of the village concerned for the benefit of the village
community." Therefore, the income can only be used for the benefit of the
village community. But so is any other income of the Panchayat of a village to
be used. The income is the income of the Panchayat and it would defeat the
whole object of the second proviso if we were to give any other construction.
The Consolidation Officer could easily defeat
the object of the second proviso to art. 3 1 A by reserving for the income of
the Panchayat a major portion of the land belonging to a person holding land
within the ceiling limit. Therefore, in our opinion, the reservation of 100
kanals 2 marlas for the income of the Panchayat in the scheme is contrary to
the second proviso and the scheme must be modified by the competent authority
(1) 2 S.C.R. 143 167 This takes us to
the second question raised by the State, in the. alternative. On behalf of the
State it has been argued that acquisition had already taken place before the
Seventeenth Amendment came into force, and, therefore, the scheme is not bit by
the second proviso to art. 31A. The relevant facts are contained in the
affidavit of Jaswant Singh Bhutani, Officer on Special Duty, and are as follows
"The village was notified for
consolidation vide Punjab Government Notification No. 57/G/t7O4l-A dated
1-9-1956 which was duly published and a proper notice under rule 4 of the
Consolidation Rules was issued which was also published in the village in the
prescribed manner. The Scheme was prepared by the Consolidation Officer under
the Act in consultation with the rightholders and Advisory Committee of the
village on 15-1-1959 and the rightholders were invited to file objections under
section 19(1) of the Act against the draft scheme as required within 30 days of
the said publication. The objections were tendered which were duly considered
and after consideration of the same the scheme was confirmed under section
20(3) of the Act by the Settlement Officer, Consolidation of Holdings, on
11-3-1959. The confirmed scheme was also published in the village under section
20(4) of the Act on 25-3-1959. That an area meassuring 100 kanals 2 marlas
(standard) was reserved for the income of the Panchayat according to the
requirements of the village. So far as the reservation for the common purposes
of the village was concerned, neither the petitioner nor any rightholders of
the village filed any objections against the said reservation. In pursuance of
the same, the repartition of the land was effected on 30-4-59 and the plots of
land were allocated to the rightholders as required under the Act.
There were 90 objections against repartition
under section 21(2) of the Act and all of them have been disposed of. In the
meantime, some of the rightholders in village Dolike Sunderpur went to the High
Court and filed a writ petition No. 531/1959 and the Hon'ble High Court by its
judgment and order dated 25- 11-1959 quashed the scheme but upon a Letters
Patent Appeal filed by the respondents herein, the High Court restored the
scheme. The possessions were not transferred in view of the stay orders
obtained by the rightholders of that village from the High Court." It is
clear from this affidavit that possession has not been transferred in pursuance
of the repartition. The learned counsel for the petitioners relies on this fact
and says that in view of s. 23A and s. 24 the "acquisition" does not
take place till all the persons entitled 168 to possession of holdings under
the Act have entered into possession ,of the holdings.
Sections 23A and 24 read as follows :
"23A. As soon as a scheme comes into
force, the management and control of all lands assigned or reserved for common
purposes of the village under section 18, shall vest in the Panchayat of that
village which shall also be entitled to appropriate the income accruing
therefrom for the benefit of the village community, and the rights and interest
of the owners of such lands shall stand modified -and extinguished accordingly.
24.(1) As soon as the persons entitled to
possession of 'holdingsunder this Act have entered into possession of the
holdings,respectively allotted to them, the scheme shall be deemed to have come
into force and the possession of the allottees affected by the scheme of
consolidation, or, as the case may be, by repartition, shall remain undisturbed
until a fresh scheme is brought into force or a change is ordered in pursuance
of provisions of sub-section (2), (3) and (4) of section 21 or an order passed
under section 36 or 42 of this Act.
(2)A Consolidation Officer shall be competent
to exercise all or any of the powers of a Revenue Officer under the Punjab Land
Revenue Act, 1887 (Act XVII of 1887), for purposes of compliance with the
provisions of sub-section (1)." It seems to us clear from these provisions
that till possession has changed under s. 24, the management and control does
not vest in the Panchayat under s. 23A. Not only does the management and
control not vest but the rights of the holders are not modified or extinguished
till persons have changed possession and entered into the possession of the
holdings allotted to them under the scheme. Mr. Gossain, the learned counsel
for the State, tried to meet this point by urging that by virtue of repartition
21, the rights to possession of the new
holdings were finalised and could be ,enforced. This may be so; but this cannot
be equivalent to "acquisition" within the second proviso to art. 31A.
In the result we hold that the scheme is hit
by the second proviso to art. 31 A in so far as it reserves 100 kanals 2 marlas
for the income of the Panchayat. We direct the State to modify the scheme to
bring it into accord with the second proviso as interpreted by us, proceed
according to law.
There would be an order as to costs.
Hidayatullah, J. This is a petition under
Art. 32 of the Constitution challenging the scheme made in respect of the
consolidation 169 of the village Dolike Sunderpur. We have in our judgment, in
the companion case, dealt with the second proviso to Art.
31A(1) (a). Here too land is reserved for the
We have indicated in our judgment in the
companion case that no matter for what purpose the acquisition takes place, if
the land of a tenant cultivating the land is reduced to something below the
ceiling fixed by law compensation at a rate which is not lower than the market
rate must be paid to him. We have also indicated how this compensation must be
worked out. When the Constitution speaks of market value, it is not possible to
find compensation in advantages which might accrue indirectly.
Our brethren have held that the reservation
of 100 kanals 2 marlas to enable the Panchayat to raise an income is contrary
to the second proviso and that the scheme must be modified accordingly. Our
approach to the problem is different. We have shown in the judgment in the
companion case that the test is the deprivation of land which makes the land of
a cultivating tenant go below the ceiling fixed for such land by law. If this
happens then compensation for the acquisition of land which brings down the
holding to something below the ceiling must be paid at rates which are not
below the market rate. We would accordingly have made the. declaration and left
the party concerned to demand compensation for land by which his ceiling is
There is no question of looking to the end to
which the income may be used and to differentiate between deprivation of one
kind and deprivation of another kind. According to us the ceiling fixed by law
is not to be reduced by acquisition by the State unless compensation at market
rate is paid. No other compensatory factor can be taken note of under the
proviso. Nor can it avail that the land of which the tenant is deprived is to
be put to some other use by the Panchayat thereafter. Such acquisition without
compensation is unconstitutional and we cannot add a proviso of our own to the
proviso enacted in the Constitution. We would accordingly allow the petition
making a declaration on the lines indicated and leaving the party to demand
compensation if his land is reduced below the ceiling.
In the circumstances we would award no costs.
ORDER The scheme made in respect of the
consolidation of village Dolike Sunderpur is hit by the second proviso to Art.
31A of the Constitution in so far as it reserves 100 kanals 2 marlas for the
income of the Panchayat. The State is directed to modify the scheme to bring it
into accord with the second proviso as interpreted in the majority judgment(1)
in Civil Appeal No. 1018 of 1966 and to proceed V.P.S.
(1) 2 S.C.R.143.