Appeal No 1345 of 1986
From the Judgment and Order dated 2981984 of the Madhya Pradesh High Court in Misc
Petition No613 of 1983
Avadh Behari Rohtagi
SK Gambhir Vivek Gambhir and KK Mohan for the Appellants
UR Lalit SS Khanduja YP Dhingra BK Satija and Surinder Karnai for the Respondents
The Judgment of the Court was delivered by 260 KASLIWAL J
In all the above appeals the parties are the same and the controversies raised are intimately con nected and dependent on each other hence all the cases are disposed of by one single order
Land measuring 19 bighas was granted by the ruler of the erstwhile State of Ratlam in favour of ancestors of respond ents Shantilal and Poonam Chand Pitaliyas hereinafter referred to as Pitaliyas  for installation of a Ginning factory
Ancestors of Kantilal Jhalani and other appellants hereinafter referred to as Jhalanis  entered into part nership with Pitaliyas and the partnership started a Ginning factory on a portion of the above 19 bighas of land
The names of Jhalanis and Pitaliyas were recorded in the revenue records in respect of the entire land
The above 19 bighas of land had some different survey numbers but subsequently at the time of settlement in Ratlam in the year 1956 57 the numbers were changed to survey numbers 120 and 121
Survey No 120 comprised of 2 biswas and survey No121 of 18 bighas and 18 biswas
According to the Jhalanis in execution of a decree against Pitaliyas the above land was sold and Jhala nis purchased the said land in an auction
Thereafter an application was moved by the Jhalanis on 13th April 1951 for mutation of their names before the Tehsildar in respect of the entire lands bearing survey Nos 120 and 121 leaving such portion of the land on which the Ginniing factory was standing
The Tehsildar vide his order dated 20th February 1953 allowed the application and passed an order mutating the names of Jhalanis on the entire 19 bighas of land
The said mutation was allowed on the basis of compromise between Pitaliyas and Jhalanis and also on the basis of a sale certificate issued by the Civil Court
The Town Improvement Trust Ratlam hereinafter referred to as the Trust  started acquisition proceedings for a housing scheme under the provisions of the Town Improvement Trust Act 1960 hereinafter referred to as the Act  and issued a notification on 28th August 1964 under Sec68 of the Act
Survey Nos 120 and 121 were shown in the notifica tion leaving out some area of survey No121
In the acquisi tion proceedings the Trust obtained possession of the acquired land on 21st March 1968
The Collector started svomotu proceedings under Sec50 of the Madhya Pradesh Land Revenue Code 1959 and issued a notice on 17th December 1970 to the Jhalanis stating that the mutation proceedings did not appear to be legal
It is not necessary to state the details of other proceedings by which the Jhalanis went to the higher authorities as ulti mately the matter came back to the Collector by remand
The Jhalanis contested the proceedings before the Collector and prayed for the cancellation of the 261 notice dated 15th February 1972 which was issued afresh by the Collector after the remand of the case to him
The Collector ultimately by an order dated 31st March 1977 set aside the order of mutation passed by the Tehsildar and gave a direction that the Tehsildar Ratlam will again make the same entry in the revenue records which was done previously in respect of disputed land
It was further directed that thereafter the Tehsildar will do proper investigation and analyse all the concerned facts and events which had hap pened in the case and take steps for making the record upto date
Particularly he will see by which lease and on what conditions originally how much land was given for factory purpose by the State and whether that lease is effective or lapsed
An appeal filed by the Jhalanis to the Additional Commissioner was dismissed by order dated 11th December 1981
The Jhalanis then filed an appeal before the Board of Revenue
This appeal filed by the Jhalanis was allowed in their favour by the Board of Revenue by order dated 26th March 1983
The Board inter alia held that pending mutation proceedings there was compromise between the parties objections were withdrawn by the Pitaliyas and no appeal or revision was filed against the mutation order nor any suit was filed challenging the order of the Tehsildar
The Pitaliyas then filed a writ petition before the High Court for setting aside the order of the Board of Revenue
The High Court by order dated 29th August 1984 allowed the Writ Petition and set aside the order of the Board of Revenue and restored the orders of the Additional Commissioner and the Collector
Aggrieved against the aforesaid judgment of the High Court the Jhalanis have filed Civil Appeal No 1345 of 1986 by grant of Special leave
In the acquisition proceedings the question of compensa tion was decided by the Tribunal constituted under Sec73 of the Act
The Tribunal by its order dated 30th November 1973 held that Pitaliyas had no right to claim compensation and the Jhalanis alone were entitled to the entire amount of compensation
The Order of the Tribunal was challenged by Pitaliyas for apportionment of the amount of compensation also by Jhalanis for increasing the amount of compensation and by the trust for reducing the amount of compensation by filing separate appeals in the High Court
The High Court by its order dated 29th July 1984 allowed the appeal filed by the Pitaliyas and held that they were entitled to claim compensation in equal proportion with Jhalanis
The High Court dismissed the appeal filed on behalf of the Trust
The High Court allowed the appeal filed by Jhalanis in part and increased the rate of compensation from 065 paisa per Sq
10 075 paisa per Sq
Aggrieved against the afore said judgment of the High Court in acquisition proceedings the Jhalanis have filed Civil Appeal No 1346 of 1986 and the Trust has flied appeal No3426 of 1987 by grant of special leave
262 We have heard learned counsel for the parties and have thoroughly perused the record
The land in question was given by the Ruler of erstwhile State of Ratlam for establishing a Cotton Ginning factory at Ratlam
The deed of partnership between the Pitaliyas and Jhalanis has not been produced on the record of this case but the admitted position is that the Janlabandi entries in the revenue records of the year 1921 22 show tllat survey Nos 1326 to 1336 13372 and 1340 to 1342 subsequently changed to Survey Nos 120 and 121 stood in the name of Keshrimal Vardhman Pitaliya and Keshrimalji Dhanrajji Jhala ni in equal shares
Keshrimal Vardhman Pitaliya proprietor of firm Vardhman Keshrimal died sometime prior to 1932 and he left behind two sons Sagarmal and Vinayakrao Pitaliya who became the proprietors of Hindu Undivided Family firm Vard human Keshrimal
Sagarmal and Vinayakrao Pitaliyas did not apply for the mutation of their names in the revenue re cords after the death of their father Keshrimal Pitaliya
Keshrimal Dhanraj Jhalani had to recover some amount from the firm Vardhman Keshrimal and he filed a civil suit for the recovery of the money against Sagarmal and Vinayakrao Pitaliyas
A degree was passed in favour of Keshrimal Dhan raj Jhalani and they filed an application for execution of the decree
In the execution case No 16142 the right title and interest of Pitaliyas in the Ginning Factory were sold in auction for Rs6541 and which was purchased by Keshrimal Dhanraj Jhalani on 2nd November 1946
A sale certificate was also issued in favour of Keshrimal Dhanraj Jhalani by the Civil Court Ratlam on 3rd October 1950
On the basis of this sale certificate Keshrimal Dhanraj Jhalani applied for mutation in the revenue records on 3rd April 1951 before the Tehsildar Ratlam
Alongwith the application Keshrimal Jhalani filed a copy of the sale certificate and a certified copy of the Jamabandi of the land of Samwar year 2035 1948 49 AD
During the pendency of this mutation application Vinayakrao Pitaliya died leaving no heirs
Sagarmal who was Karta of the Joint Hindu Family filed objections to the mutation application on 17th March
It is important to note that in these objections Sagannal clearly raised the ground that in the auction proceedings only movable property of the factory was sold and as such Keshrimal Dhanraj Jhalani had no right to clam mutation of the entire agricultural land in his favour
Thereafter an agreement took place between Sagarmal Pitaliya and Keshrimal Dhanraj Jhalani on 16th October
This agreement made in writing was filed before the Tehsildar in which Sagarmal Pitaliya agreed to with draw his objections for the mutation of his share in 19 bighas of land
in favour of Shri Keshri mal Dhanraj Jhalani in lieu of Shri Keshrimal Dhanraj JhaIa ni having agreed not to recover Rs4941
being the balance amount of decree passed in suit No2 of 1932 against Pita liyas
Apart from the 263 aforesaid compromise application the statement of Sagarmal Pitaliya was also recorded on 16th October 1952 itself and Sagarmal clearly made a statement that he was withdrawing his objections as regards mutation in respect of his share in the land of 19 bighas and that he had no objection to the mutation of Shri Keshrimal Dhanraj Jahalani s name in re spect of the land in dispute
Thereafter the Teshsildar rejected the objections filed by Sagarmal and passed an order on 20th February 1953 granting mutations in the name of Shri Keshrimal Dhanraj Jhalani
After this order of mutation passed by the Tehsildar on 20th February 1953 Sagaramal or any other member of the family of Pitaliyas did not take any steps for challenging the aforesaid order of the Tehsildar
It is further proved on record that thereaf ter names of Jhalanis alone was continued in the revenue records in respect of the entire 19 bighas of land
The land acquisition proceedings then commenced in the year 1964 and possession over the land was taken by the Trust on 21st March 1968 from Jhalanis
The Collector took suo motu proceedings in 1970 and passed an order on 31st March 1977 setting aside the order of the Tehsildar
In the above set of circumstances Pitaliyas came forward and claimed half share in the compensation amount in land acquicition pro ceedings before the Tribunal
The Tribunal rejected the claim of the Pitaliyas but High Court by order dated 29th August1984 granted half share in favour of Pitaliyas taking the view that they were persons interested under the Town Improvement Trust Act
On the same day by a separate judg ment the High Court set aside the order of Board of Revenue and maintained the order of the Additional Commissioner and the Collector passed in mutation proceedings
After going through the entire record  red hearing the arguments at length we are clearly of the view that the High Court went wrong in passing the impugned orders
As already mentioned above from the year 1922 onwards the entries in the Revenue records in respect of 19 bighas of land was made in favour of Jhalanis and Pitaliyas both in equal share
Jhalanis had a decree against Pitaliyas and in execution of said decree share of Pitaliyas was auctioned and was purchased by Jhalanis for a sum of Rs 6541
Sale certificate was also issued in favour of Jhalanis
According to Jhalanis the half share of Pitaliyas in the land was also sold and on that basis an application was filed before the Tehsildar for ranration of the entire land in their favour
According to Sagarmal Pitaliya who was also Karta of Joint Hindu Family no such land was sold in auction
11 may be noted that the bid in auction was for an amount of Rs6541 but it did not satisfy the entire decretal amount and the balance of Rs4941 still remained due against the Pitaliyas Judgment debtors
In view of these circumstances a compromise took place between the parties according to which Sagarmal agreed to withdraw his objections in consid eration of 264 satisfaction of the aforesaid amount of Rs4941 outstanding against him
On 16th October 1952 the compromise applica tion was filed in writing and statement of Sagarmal
was also recorded in which he clearly agreed that he will not claim any right in the land and withdraw his objections and the amount of Rs4941 was taken as satisfied and Jhalanis agreed not to recover the aforesaid amount of Rs4941
It is an admitted position that the order passed by the Tehsildar on 20th February 1953 rejecting the objections of Sagarmal Pitaliya and mutating the name of Jhalanis for the entire land was not challenged and the same became final
MrURLalit learned Sr
Advocate appearing on behalf of Pitaliyas did not argue that the compromise application filed on 16th October 1952 and the statement recorded on the same day were forged or not genuine
The only submission made by Mr Lalit was that any order passed in mutation proceedings cannot confer any legal title in favour of Jhalanis nor such order can divest the ownership rights of Pitaliyas in the agricultural land
We do not find any force in this submission
Admittedly there was a decree of a Civil Court and in execution of the same the properties were auctioned
Even if there was any dispute as to whether any share of Pitaliyas in the land was sold or not in the auc tion proceedings the same was settled at rest by making a compromise between the parties
Not only that after the order of the Tehsildar passed as back as 20th February 1953 the Jhalanis alone were recorded as full owners of the properties and also continued to remain in possession
It is also proved that the Trust took possession from Jhalanis on 21st March 1968 in the land acquisition proceedings
It is no where proved on record that the Pitaliyas ever remained in possession of the land in question after 20th February 1953 till the time they made a claim of half share in the compensation before the Tribunal
The Collector in our view had no justification at all to have initiated such proceed ings suo motu in 1970 after 17 years of the order passed by the Tehsildar
Even under the law of limitation no suit for possession could have been maintained after 12 years by Pitaliyas and they were not entitled to any share in the amount of compensation
There was also no Justification for entering the names of pitaliyas in the revenue records and to set aside the order of the Tehsildar dated 20th Febru ary1953 after 17 years As already mentioned above Tehsil dar was perfectly justified in passing the order dated 2021953 on the basis of the sale certificate as well as compromise application and the statement of Sagarmal marie before him on 161052
Now we shall deal with Civil Appeal No3426 of 1987 filed by the Trust
It was argued on behalf of the appel lant Trust that in the erstwhile State of Ratlam one bigha was equivalent to 21511 Sq
as per Jantri 265 Milan Bigha Va Ekad prepared in 1911 and the lower courts wrongly calculated the area acquired by treating one bigha equivalent to 22500 Sq
as now prevalent according to the prescribed standards
We do not find any force in the abvoe contention
No such argument was raised before the Tribunal and it was raised for the first time before the High Court
The High Court rejected the aforesaid argument on the ground that admittedly at present one bigha was equivalent to 22500 Sq
and no contention was raised before the Tribunal that one bigha was equivalent to 21511 Sq
prevalent in the erstwhile State of Ratlam
This being a controvercial question of fact and the other side having given no chance to lead any evidence on this point it was difficult to rely on the Jantri Milan Bigha Va Ekad
The High Court thus held that the compensation for one Bigha of land would be calculated as equivalent to 22500 Sq
We do not find any error in the aforesaid view taken by the High Court
It was next contended on behalf of the Trust that the Tribunal had awarded compensation at the rate of 065 paisa per Sq
and there was no ground or justification for the High Court to have increased the same at the rate of 075 paisa per sq
There is some force in the above conten tion raised on behalf of the Trust
The High Court in in creasing the rate of compensation to 075 paise per Sq
Ft has given no reason
The High Court in this regard observed as under Thus after going through the oral as well as documentary evidence and material placed on record and after beatifing the learned counsel for the Trust as also appellant No 1 and also after going through the case law cited the question arises at what rate compensation should be paid for the land which is compulso rily acquired
It cannot be disputed that either party No 1 nor party No2 was making any use of the land at the time of acquisi tion
On the contrary it was being treated as a waste and fallow land having no importance
There is no satisfactory evidence placed on record to prove that in fact the land was being used as an agricultural land from which certain income was derived
It appears this land gained importance only when the trust proposed to acquire the same
Therefore though the principles enunciated in the various authorities cited and referred to above are not disputed we are of opinion that considering the facts and circumstances of the case it would be just proper and reasonable to award compensation for the land at the rate of 075 p per square feet and not more be cause the price fetched for the developed lands also the price fetched for the small plots of land cannot be taken 266 into consideration for purposes of comparision in respect of such big lands
After all for a developed plot of land the cost of development has also to be taken into consideration which cannot be said to be quite meagre Besides admittedly there is a big nala in the land in question that there was no direct independent road to approach this land and that even the factory was also not working for several years before the acquisition
All these facts indi cate that the potential value of the land even as a building site was not so high
 Learned Distt
Judge after considering large number of documentary evidence placed on record by both the parties arrived to the conclusion that the fair market price of the acquired land on 22nd August 1964 was 065 p per Sq
The finding recorded by the Distt
Judge in this regard was based on adequate material placed on record and supported by good reasons
In our view the High Court went wrong in increasing the rate from 065p
to 075p
without any valid reasons whatsoever
As a result of the findings recorded above the appeal Nos 1345 and 1346 of 1986 filed by Kanti lal  Ors are allowed
The appellants therein would alone be entitled to claim the entire amount of compensation
The orders of the High Court Addl
Commissioner and Collector in the matter of mutation proceedings are set aside and that of the Board of Revenue is upheld
The appeal No3426 of 1987 filed by the Trust is allowed in part
The market value determined by the High Court at the rate of 075p
per Sq
is set aside and the rate determined by the District Judge at 065p
per Sq
Ft is maintained
In the facts and circumstances of the case there would be no order as to costs
GN Appeals allowed


Summary:
The appellant was alleged to have misap propriated a sum of Rs 1216350 though acquitted of the charge of misappropriation and for the recovery thereof his 1307 acres of coffee estate was brought to sale under the Tamil Nadu Revenue Recovery Act 1894
On March 301979 the sale by public auc tion was held by the Tehsildar
The first respondent purchased the said estate for a sum of Rs 12225 and deposited a sum of Rupees 2000 being 15 of the sale price
Under sec tion 36 of the Act he should have deposited the balance consideration within 30 days from the date of the auction
This sale was con firmed on October 231981 and the balance amount was deposited on November 4 1981
So the appellant filed an application to set aside the sale but the Revenue Divisional Officer overruled the objections and dismissed the application
On appeal to Additional District Collector on October 13 1982 the sale was set aside
So the first respondent filed writ petition in the High Court and the single High Court Judge quashed the order of the Additional District Collector
The writ appeal by the appellant to the Division Bench was also dismissed
Hence the appellant came to this Court
The appellant urged that under section 36 of the Act it is mandatory that the date and place of sale shall  be published in the Gazetee and that the publication did not mention the place of sale so the sale is invalid in law
It was further submitted that it was equally mandatory that the balance sale consideration of 85 should be deposited within 30 days from the date of sale which was done by the first respondent only on November 4 1981 long after one year 182 and eight months of the date of sale and therefore illegal
While the first respondent contended that it was Form 7 and not Form 7A that would be applicable to the facts of the instant case and that Form 7 contains the place o sale and that it was complied with
Therefore the said sale is not illegal
It was further submitted that the deposit was made after protracted correspondence and that the non deposit within 30 days from the date of sale is not illegal since the deposit was accepted by the authority
Therefore the confirmation of the sale is not illegal
Granting the special leave dismissing the writ Petition setting aside the Judgment of the High Court and restoring the order of the Additional District Collector the Court HELD That in the instant case the High Court has wholly misconceived section 36 of the Act
A reading of the said section mani fests that the word shall  is mandatory in the context
The publication is an invitation to the intending bidders to prepare an partic ipate at the bid
Unless there is due publica tion of the date and the place of sale the intending purchasers cannot be expected to run after the sale officer
The sale officer has a statutory duty and a responsibility to have the date and place of sale mentioned in the notice giving due publication in terms of the Act and the Rules
Public auction is one of the modes of sale intending to get highest competitive price for the property and it also ensures fairness in actions of the public authorities or the sale officers who should act fairly objectively and kindly
Nothing should be suggestive of bias favouritism nepotism or beset with suspicious features of under bidding detrimental to the legitimate interest of the debtor
184 F G 1 85 A Further it is settled law that the word shall  be construed in the light of the purpose of the Act or Rule that seeks to serve
Even though the word shall  be ordi narily mandatory but in the context or if the intention is otherwise it may be construed to be directory
The construction ultimately depends upon the provision itself
Considered from this prospective of non compliance of section 35 that is comission to mention the place of sale would visit the deprivation of the property to the debtor for an adequate consideration due to absence of competing bidders
Hence the specification of the date  place of sale shall  be mandatory
The forms either 7 or 7A are only procedural and they should be in conformity with section 36
The form cannot prevail over the statute
The omission of specification of the place of sale in the form renders the sale not merely irreg ular but also invalid
185 C H 186 B 183 Equally the second objection is insur mountable
It is mandatory that the balance of the sale amount shall be remitted within 30 days from the date of auction and if not the earnest money deposited is liable to forfei ture
Section 36 mandates remittance of the balance of 85 of the sale consideration within 30 days from the date of auction
It is obligatory on the purchaser to deposit the amount within the period unless prevented by an order of the Court or Tribunal
So the confirmation of sale without compliance is illegal and the sale is vitiated by manifest error of Law  rightly set aside by the Addi tional District Magistrate
The High Court has committed error in law in interfering with the order of the appellate authority
186 B D