BHAGAT RAM & ORS. l'. STATE OF PUNJAB & ORS. December, 2, 1966 [K. SUBBA RAO, C. 1., M. HIDAYATULLAH, S. M. SIKRI, c R. S. BAC'HAWAT AND J. M. SHELAT, JJ.J Ease Punjab Holdings (Consolidation and Prevention of Fragmentation) Act (50 of 1948)-Scheme reservi11g land for income of Panchayat-lf acquisition-If hit by second provi.w to Art, 31A (I) of the Comtitution of India.
A scheme under the East Punjab Holdings (Consolidation and Preven- tion 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 (or the income of the Panchayat,. it was hit by the second proviso to Art. 3 IA( l) of 1he Constitution.
HELD (per Subba Rao C.J., Sikri and Bachawat, JJ.). The e.sentia! difference between "acquisition by the State'' on the one hand and "modi- ficarion 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" und•.r Art, 12 of the Constitution, the reservation in the scheme was contrary to the second proviso and must be modified appropriately. [144 D-Hl
The repartition unde.r s, 21 of the Act would not amount to "acquisi- tion" within the second proviso to Art. 31A, because, under ss. 23A and 24 of the Act, till possession has changed, the managen;ent and rontrol 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 lo Art. JIA(I), came into force, and that the scheme was not hit by that proviso. [146 E-HJ
Ajit Singh v. State of Punjab [1967] 2 S.C.R, 143, followed. Per Hidayatullah and Shela!, JJ : Since the land of the petitioner was reduced to something below the ceiling fixed by law, compensation at a rate which \vas not lower than the market value must fn paid to him. fl47 C-F]
ORIGINAL JURISDICTION : Writ Petition No. 125 of 1966. Petition und;r Art. 32 of the Constitution of India for the en- forcement of fundamental rights. Hardev Singh and S. S. Khanduja, for the petitioners.
K. L. Gossain, 0. P. Malhotra and R. N. Sachthey, for the respondents. The Judgment of SunBA RAO c. J. and SJKRI and BACHAWAT JJ. WAS de!iverd by SIKRI, J. The separate Judgment of HIDAYA- TULLAH and SHELAT, JJ. was delivered by HIDAYATULLAH.
SUPllBME COUJlT REPORTS Sikri, J. This is a petition under art. 32 of the Constitution ch?!lenging the scheme made in respect of the consolidation of village Dolike Sunderpur. We have today delivered judgment in Ajit Singh v. State of Punjab(') and most of the points in this appeal are covered by the decision in that case. Two points remain to be dealt with iri this case.
The first question that arises is wh~ther the scheme in so far as it makes reservations of land for income of the Panchayat 1, hit by the second proviso to art. 3 lA. 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 ka- nals) for income of the Panchayat.
W~ have already held in Ajit Singh's(') case that acquisition for the common purposes such as phirnis, paths, etc., is not acquisition by the State within the second proviso to an. 31A. But this does not dispose of the question whether the reservation of land for income of the Panchay3t 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 ..!ifference be- tween "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 i;s 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 Hold- ings (Consolidation and Prev~ntion of FragmentatiC':!) Act, 1948, defines 'common purpose' to include the following purposes : " …. 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 vil-
lage 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 Consolidatior\ Officer
could easily defeat the object of the second proviso to art. 31 A by reser- ving for the income of the Panchayat a major portion of the land belonging to a person holding land within the ceiling limit. There- fore, 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 accNdingly.
(I) 11967] 2 S.C.R. 143 c c BHAGAT RAM v. PUNJAn (Sikri, J.) This takes us to the second question raised by the State, in the alternative. On behalf of the State it has been argued that acqui· sition had already taken place before the Seventeenth Amendment came into force, and, therefore, the scheme is not hit by the second proviso to art. 3IA. The relevant facts arc contained in the affi- davit of Jaswant Singh Bhutani, Officer on Special Duty, and arc as follows :
"The village was notified for consolidation l'ide Pun- jab Government Notification No. 57/G/17041 -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 J 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 Offi- cer, Consolidation of Holdings, on 11-3-1959. The con-
firmed scheme was also published in the village under section 20(4) of the Act on 25-3-1959. That an area meas- suring 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 pur- poses 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 !!959 and the Hon'ble
High Cnurt by it :udgment ai…i 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 trans- ferred 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 SUPRBMI! COURT
REPORTS [1967) 2 s.c.R. 10 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 I 8, shall vest 'in the Panchayat of that village which shall also be entitled to appropriate the income accruing therefrom for
the benefit of the villagecommunity, and the rights and interest of the owners of such lands shall stand modified and extinguished accordingly. 24. (I) As soon as the persons entitled to possession of
holdings under 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 allottecs affected by the scheme of consolidation, or, as the case may be, by repartition, shall remain undis-
turbed 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 I 887), for purposes of compliance with the provisions of
sub-section (!)." 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. Gosain, the learned counsel for the State, tried to meet this point by urging that by virtue of repartition under s. 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 "acqui- sitior.' within the second proviso to art. 31A.
Jn the result we hold that the scheme is hit by the second pro- viso to art. 31 A in so far as it reserves I 00 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, and proceed according to law. There would be an order as to ~osts. Hidayatullah, J. This is a petition under Art. 32 of the Cons- titution challenging the scheme made in respect of the consolidation c
c r BHAGAT RAM v. PUNJAB (Hidayatullah, J.) of the villa~ Dolike Sunderpur. We have in our judgment, in the compamon case, dealt with the ~ond proviso to Art. 31A(l) {a). Here too land is reserved for the Panchayat. We have in- dicated 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 com· pensation 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 mar/as 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 ceil· ing fixed for such land by law. If this happens then compensation for the acquisition of land which brings down the holding to some- thing 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 reduced. 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 bylaw is not to be reduced by acquisitioa by the State unless compensation at market rate is paid. No other com- pensatory 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 with- out 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 mar las for the in· come 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(') in Civil Appeal No. 1018 of 1966 and to proceed according to law. There would be.no order as to costs. V.P.S.
(I) (1967) 2 S.C.R.143. Ml9Sup CI/66-12