State of Punjab vs Natha Singh

G.C. Garg, J.—This judgment will dispose of Regular Second Appeal Nos. 1361, 1362, 1364 to 1366 and 1713 of 1989 as these are

directed against the single judgment of the learned Additional District Judge, Ropar dated 17111988. For facility of reference, the facts are taken

from RSA No. 1364 of 1989.

One Hazara Singh son of Chhota was allotted land on 1.7.1975 under the Punjab Utilisation of Surplus Area Scheme, 1973 (for short the

Scheme). The mutation of the said land was sanctioned in his favour on 14.7.1975. Hazara Singh sold a part of the land allotted to him to Nath a

Singh and others through a registered sale deed dated 2.11.1979. Mutation of this sale was sanctioned in favour of the vendees in November,

1979. After about 5 years the allotment in favour of Hazara Singh was cancelled on the ground that he could not sell the land allotted to him, in

view of the provisions of the Scheme and he had not become the owner thereof. On the cancellation of the allotment mutation was again

sanctioned in favour of the Punjab Government in the year 1985. On the basis of the mutation sanctioned in favour of the State Government, the

plaintiffvendees were sought to be dispossessed and consequently they filed a suit for declaration to the effect that they were the owners in

possession. The relief of permanent injunction was also prayed.

The State of Punjab contested the suit on various grounds amongst others that the suit land had been allotted to Hazara Singh under the Scheme

and in view of the provisions of the Scheme, the allottee was not competent to transfer the rights in the land for a period of 15 years. It was also

alleged that neither the allotment certificate had been issued nor the payments of all the instalments had been made by Hazara Singh allottee.

The learned trial court after considering the entire matter recorded a finding under Issue No. 1 that the allottee was not competent to alienate the

property in question and Hazara Singh allottee was not having any legal title which he could pass on to the plaintiffs and that the plaintiffs would,

however, be entitled to recover the sale consideration from the allottee. Under issue No. 2, it was held that the defendant itself had stated in the

written statement that the plaintiffs shall not be dispossessed except in accordance with law. It was thus held that the defendant would be bound by

its admission.

On appeal, the learned Additional District Judge opined that there was no denying the fact that Hazara Singh was incompetent to sell the suit

land for a period of 15 years or till he paid the instalments in full, but up held the sale in favour of the plaintiffs as the State Government allowed the

mutation to be sanctioned in favour of Hazara Singh. The sale in favour of the plaintiffs was thus up held. The appeal was accepted, judgment and

decree of the lower Court set aside and the suit of the plaintiffs was decreed with costs throughout. It is against this judgment and decree of the

lower appellate are Court that the present appeal has been filed.

Before dealing with the contention of the learned counsel for the appellant, I wouldlike to notice some of the provisions of the Scheme under

which the land had been allotted to Hazara Singh. Under the Scheme, surplus land is allotted to eligible person either by initiating suo motu,

proceedings or on an application made by an eligible person. Clause 5 of the Scheme provides the procedure to be observed by the Circle

Revenue Officer before drawing the list of the eligible persons. Clause 6 of the Scheme prescribes that after the procedure required to be observed

under Clause 5 has been followed, a list of the eligible persons shall be prepared in terms of the criteria laid down in this clause. Clause 8 of the

Scheme provides that each allottee shall be given a certificate in formII by the Collector. Clause 9 deals with the delivery of possession. It provides

that after the allotment is made the Collector shall pass an order delivering possession to the allottee and the allottee shall be delivered possession.

Clause 9A deals with entry of mutation and provides that when possession of the surplus area is taken on behalf of the State Government, the

mutation in respect of such area shall first be entered in favour of the State Government and when the allottee has become the owner in accordance

with subclause (d) of clause 10 the mutation, shall be entered in favour of the allottee. Clause 10 provides for the conditions of allotment and

subclause (b) thereof provides that the allottee shall become the owner of land allotted to him when full payment of the amount due from him has

been made and subclause (e) provides that the allottee shall not be competent to transfer his rights in the land allotted to him to any person till he

becomes the owner or before the expiry of a period of 15 years from the date of possession, whichever is later. Clause 11 of the Scheme provides

for cancellation of allotment in certain cases and, in particular, it provides that if an allottee makes any default in the payment due from him or

infringes any of the conditions of allotment, he shall render himself liable for cancellation of the allotment.

The learned counsel appearing for the State of Punjab has strenuously argued that the allottee, Hazara Singh in this case could not transfer the

land in favour of the plaintiffs in view of sub clause (e) of Clause 10 of the Scheme till he became the owner or before the expiry of 15 years of the

date of possession, whichever was later. He submitted that in the present case, land was allotted on 171975 and the instalments having not been

paid till the date of the suit, the allottee could not sell the land in favour of the plaintiffs and the State Government was within its rights under Clause

11 of the Scheme to cancel the allotment and seek possession thereof. The learned counsel further submitted that no notice of cancellation was

required to be issued either to Hazara Singh or his vendees before passing the order under Clause 11 of the Scheme. He, thus, submitted that the

judgment and decree passed by the lower appellate Court deserves to be set aside and plaintiffs'' suit dismissed.

On the other hand, the learned counsel appearing for the respondents argued that mutation of allotment in favour of Hazara Singh had been

sanctioned on 14.7.1975. This mutation could only be sanctioned after Hazara Singh had paid all the instalments, or any other amount due from

him. He submitted that in view of the mutation having been sanctioned, the plaintiffs could reasonably believe that Hazara Singh had already

become the owner of the land. The next contention of the learned counsel was that though no notice is contemplated by Clause 11 before passing

the order of cancellation yet the principles of natural justice required that such a notice should have been given before passing the order of

cancellation both to the allottee and the vendee. Still another contention of the learned counsel was that the vendees are bona fide purchasers for

consideration in view of the contents of the allotment letter Exhibit D. 4 and mutation Exhibit D. 6.

After hearing learned counsel for the parties I am of the view that the allottee was not competent to sell the suit land which had been allotted to

him under the Scheme till he became the owner thereof or before the expiry of a period of 15 years from the date of possession, whichever was

later. In the present case, the allotment was made on 1.7.1975 and the sale was effected on 2.11.1979 The sale is thus is clear violation of

subclause (e) of Clause 10 of the Scheme. Even otherwise, in my view, the plaintiffs cannot be said to be bona fide purchasers for consideration. It

is true that mutation in favour of Hazara Singh had been entered and sanctioned on 14.7 1 975 though it could not have been sanctioned at that

time in his favour as the instalments had not been paid. Even assuming that the instalments had been paid and the mutation had been rightly

sanctioned in favour of the allottee yet he was incompetent to sell the land for a period of 15 years from the date of allotment. Mutation Exhibit D.6

clearly refers to the order dated 1.7.1975 passed by the Collector and the mutation further mentions that the said order was available on the

record. The order of allotment Exhibit DA states that the compensation was yet to be determined and that allotment had been made under the

Punjab Utilisation of Surplus Area Scheme, 1973 to Hazara Singh allottee. If the vendees had taken a little care to examine the mutation and the

allotment letter, it would have been immediately clear to them that the allotment had been made to Hazara Singh under the Scheme and that in view

of the provisions of the Scheme he was not competent to sell the same. I do not agree with the observations of the appellate Court that after the

mutation had been sanctioned, an ordinary citizen who hails from a village was not supposed to know about the provisions of the Scheme. As

observed earlier, the mutation itself referred to the allotment letter and it was available on the record. The allotment letter clearly talks of allotment

under the Scheme. Though the mutation seems, to have been entered and sanctioned wrongly yet the plaintiffs cannot derive any benefit therefrom

as even otherwise the allottee could not sell the land for a period of 15 years from the date of allotment. The view of the learned Additional District

Judge that under Clause 9(a) of the Scheme, mutation in favour of the allottee could be sanctioned only when lie had paid all the instalments could

not lead to the conclusion that the allottee became entitled to sell the land. It could also not be presumed only from Mutation having been

sanctioned'' in favour of Hazara Singh that he had paid the instalments or that lie became entitled to sell the land. 1, thus, reverse the finding of the

lower appellate Court that the vendees could not be punished for the lapse of the officials of the State Government. In fact, there a clear bar

contained in Clause 10 of the Scheme to sell the land allotted to an allottee for a period of at least 15 years and if a sale is effected by an allottee of

land allotted to him, earlier thereto the State Government is within its right to cancel the allotment in exercise of its power under Clause 11 of the

Scheme.

There is, however, I another aspect of the matter. In the present case, admittedly, no notice was issued to the allottee or to the vendee before

passing the order of cancellation, cancelling the allotment of the surplus area allotted to Hazara Singh. The submission of the learned counsel

appearing for the appellant that no notice is require to be issued as there is no provision made in Clause 11 of the Scheme in that behalf cannot be

accepted. In my view, the principles of natural justice will apply in this case. A notice is the requirement of the principles of natural justice when the

State Government wants to exercise its power under Clause 11 of the Scheme for cancellation of allotment on any ground available to it. It is then

open to the allottee to show cause that the basis of notice is wrong. The State Government can thereafter pass an order either withdrawing the

notice or pass such other order, as it may deem fit after considering the reply to the show cause notice. In my view, the other Exhibit P.11 passed

under Clause 11 of the Scheme is against the principles of natural justice and on this ground the order of cancellation Exhibit D.11 deserves to be

quashed which I hereby do. It shall, however, be open to the State Government to take recourse to recover the balance amount of instalments, if

any, either from the allottee or the vendees. Since Exhibit D.11 the order of cancellation of allotment has been quashed by me, the plaintiffs shall

not be dispossessed from the suit land except in accordance with law. Even otherwise, it is the case of the appellant that it will not dispossess the

plaintiffs except in due course of law.

For the reasons recorded above, the appeals fail and are dismissed though on a different ground. The plaintiffs'' suit for permanent injunction is

decreed and they shall not be dispossessed from the suit land except in due course of law. No costs.