L.P.A. No.215 of 1993 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH L.P.A. No.215 of 1993 DATE OF DECISION: JANUARY 13, 2011 Nirmal Singh and others …APPELLANTS VERSUS Faqir Singh and others …RESPONDENTS CORAM: HON’BLE MR.JUSTICE SATISH KUMAR MITTAL HON’BLE MR.JUSTICE M. JEYAPAUL --- PRESENT: Mr. S.N. Saini, Advocate, for the appellants. Mr. R.S. Chauhan, Advocate, for the respondents . … SATISH KUMAR MITTAL, J. Appellants Nirmal Singh, Avtar Singh and Mukhtiar Singh, who are purchasers of the land in dispute from Keser Singh (respondent No.3 in the writ petition), have filed the instant Letters Patent Appeal against the judgment dated 19.8.1992 passed by the learned Single Judge, whereby the writ petition filed by Faqir Singh (respondent No.1 herein) for setting aside the order dated 18.5.1977 passed by the Chief Settlement Commissioner, Punjab; order dated 6.5.1980 passed by the Financial Commissioner, Revenue & Secretary to Govt., Punjab; and order dated 10.12.1979 passed by the Chief Sales Commissioner, Ludhiana, was allowed and the aforesaid orders were set aside. In the present appeal, the dispute is with regard to only one killa number bearing No.23//21 measuring 7 kanals 8 marlas. L.P.A. No.215 of 1993 -2- The brief facts of the case are that in a restricted auction, respondent Faqir Singh purchased 79 kanals 13 marlas surplus rural evacuee agricultural land, including 7 kanals 8 marlas comprising Killa No.23//21, on 13.7.1970. Undisputedly, the said land was purchased on instalments. The auction was conducted by the Tehsildar (Sales)-cum-Managing Officer as a package deal property. According to Patwari Halqa report No.5 dated 3.9.1970, the factum of delivery of physical possession of the aforesaid land, including the disputed killa number, was recorded in the Report Roznamcha, but actually the respondent did not take possession of the land comprising disputed killa number. Instead of Killa No.23//21, respondent No.1 had taken possession of Killa Nos.18//2 and 22//3, which were of superior quality. In the meanwhile, on 26.1.1971 the Rehabilitation Department had allotted 221 kanals of land to Keser Singh, who was a displaced person against his verified claim under the provisions of Displaced Persons (Compensation & Rehabilitation) Act, 1954 (hereinafter referred to as `the Displaced Persons (Compensation & Rehabilitation) Act'). The actual possession of the land allotted to him, was delivered to him vide report No.158. The said land included land comprising in killa No.23//21, the possession of which was never taken by respondent No.1. Subsequently, in the year 1972, said Keser Singh, sold the said land, including the disputed killa number, to Ajnar Singh, father of the appellants and delivered physical possession to them. It is also undisputed fact that after purchase of the land in the restricted auction, respondent No.1 did not deposit the instalments from Kharif 1971 to Rabi 1972. Thereupon, Tehsildar (Sales), Ludhiana vide his L.P.A. No.215 of 1993 -3- order dated 12.7.1972 had forfeited the earnest money deposited by respondent No.1. Against the said order, respondent No.1 filed an appeal stating therein that the land sold to him in restricted auction was unfit for cultivation, therefore, his bid be cancelled and the earnest money deposited by him be refunded. But his appeal was dismissed by the Settlement Commissioner vide order dated 3.11.1972. Thereafter, instead of filing further appeal against the aforesaid order, respondent No.1 approached the Revenue and Rehabilitation Minister. His case was re-opened and the Additional Settlement Commissioner (Sales) vide his order dated 9.11.1973 allowed respondent No.1 to pay the instalments due along with interest. In the meanwhile, two Killa Nos., i.e., 18//2 and 22//3, which were taken into possession by respondent No.1, were acquired by the State Government. Therefore, respondent No.1 moved an application on 11.10.1976 to the Tehsildar (Sales)-cum-Managing Officer for delivery of the possession of Killa No.23//21 to him. When Tehsildar (Sales)-cum- Managing Officer came to know that the said killa number was allotted to a displaced person under the provisions of Displaced Persons (Compensation & Rehabilitation) Act, he made suo moto reference under Section 24 of the Displaced Persons (Compensation & Rehabilitation) Act for cancellation of the allotment of Keser Singh qua that Killa number. The learned Chief Settlement Commissioner vide his order dated 18.5.1977 rejected the reference and directed that the Tehsildar (Sales)-cum-Managing Officer should move to the competent quarter for de-confirmation of the auction qua that Killa number. Against that order, respondent-Faqir Singh filed a petition under Section 33 of the Displaced Persons (Compensation & Rehabilitation) Act. The Financial Commissioner, Revenue & Secretary to L.P.A. No.215 of 1993 -4- Govt., Punjab, exercising the powers under Section 33 of the said Act, dismissed the said petition and upheld the order of the chief Settlement Commissioner. Meanwhile, on a reference made by the Tehsildar (Sales)-cum- Managing Officer, under Section 10(2) of the Punjab Package Deal Properties (Disposal) Act, 1976 (hereinafter referred to as `the Package Deal Properties (Disposal) Act') for cancellation of allotment of land measuring 7 kanals 8 marlas purchased by respondent No.1 in open auction, Chief Sales Commissioner, Ludhiana vide order dated 10.12.1979 allowed the said reference and cancelled the transfer of the said land comprising Killa No.23//21 made to respondent-Faqir Singh as the same was not found in order, while observing as under:- “I have heard the learned counsel for Shri Faqir Singh. He could not advance and valid reason against the proposed cancellation of land. He pleaded that appeal had been filed before the Financial Commissioner against cancellation of land. It is not understood how the appeal has been filed when the land is yet to be cancelled. Even if any appeal is pending in the High Court, this does not preclude this court to decide this case on merit. As stated in the preceding paragraph land measuring 7 kanals 8 marlas comprising killa No.23/21 had already been allotted to one Keser Singh. The sale of Faqir Singh through auction was thus not in order. In the circumstances I cancel transfer of 7 kanals 8 marlas land comprising killa No.23/21 made to Shri Faqir Singh. Keser Singh will continue to be the owner of this land. Of course Shri Faqir Singh will be entitled to proportionate reduction in the bid price as a result of the cancellation of the aforesaid land, which should be made by the Tehsildar (Mahal)-cum-Sales, Ludhiana.” L.P.A. No.215 of 1993 -5- It is mentioned here that in case of sale of package deal property, the Tehsildar (Sales)-cum-Managing Officer has been empowered under Section 10(2) of the Punjab Package Deal Properties (Disposal) Act to make a reference to the competent authority in that regard for setting aside the sale. Respondent No.1 filed the writ petition challenging the order dated 18.5.1977 passed by the Chief Settlement Commissioner, Punjab; order dated 6.5.1980 passed by the Financial Commissioner, Revenue & Secretary to Govt., Punjab; and order dated 10.12.1979 passed by the Chief Sales Commissioner, Ludhiana. The learned Single Judge by the impugned judgment has allowed the writ petition filed by respondent No.1 and set aside the aforesaid orders. We have heard the learned counsel for the parties. Learned counsel for the appellants argued that the learned Single Judge has set aside the aforesaid orders mainly on the ground that under Section 24 of the Displaced Persons (Compensation & Rehabilitation) Act and under Section 10(2) of the Punjab Package Deal Properties (Disposal) Act, any allotment or a sale can only be set aside on the ground of fraud or misrepresentation. If in an auction there is no fraud and misrepresentation played by the auction purchaser, his sale should not have been cancelled by the competent authority under the aforesaid Act. Learned counsel further argued that though the learned Single judge has noticed the fact that after the purchase, respondent No.1 had not taken possession of the disputed killa number and instead of that he had taken possession of two other killa numbers and when those killa numbers were acquired after six years of the sale, he moved an application for delivery of possession. He L.P.A. No.215 of 1993 -6- further argued that it has also been noticed by the learned Single Judge that respondent No.1 did not make the payment of the instalments and at one point of time the earnest money deposited by him was forfeited and against the said order he filed an appeal claiming that the land sold to him in restricted auction was unfit for cultivation, therefore, he prayed that the bid be cancelled and the earnest money deposited by him be refunded. His appeal was dismissed by the Settlement Commissioner on 3.11.1972. He did not challenge that order in appeal. However, he approached the Revenue and Rehabilitation Minister. On his directions, the case of respondent Faqir Singh was re-opened and Additional Settlement Commissioner (Sales) vide his order dated 9.11.1973 allowed him to pay the instalments due along with interest. In spite of all these facts, learned Single Judge has set aside the orders of the revenue authorities while observing that the conduct and impropriety on the part of respondent No.1 was not of such a nature on which he can be deprived of his ownership of Killa No.23//21. It has been further observed by the learned Single Judge that when the land was allotted to respondent No.1, the said land could not have been allotted to Keser Singh. Learned counsel argued that the learned Single Judge has totally ignored the aspect that Keser Singh was a displaced person and he was allotted the land including the disputed killa number against his verified claim, therefore, his claim on the land, which was an surplus evacuee property, was superior to that of respondent No.1, who was merely an auction purchaser. Learned counsel further argued that the learned Single Judge has failed to appreciate that once the surplus agricultural property is allotted to a person, then such property could not have been sold under the Package Deal Properties (Disposal) Rules. He argued that once the Tehsildar L.P.A. No.215 of 1993 -7- (Sales) came to know about the fact that the land was wrongly auctioned because the same was to be allotted to the displaced person and was actually allotted to him, Tehsildar (Sales) was within his right under Section 10(2) of the Punjab Package Deal Properties (Disposal) Act for making suo moto reference for setting aside the sale of the disputed killa number. Therefore, the Chief Sales Commissioner vide his order dated 10.12.1979 rightly cancelled the transfer of 7 kanals 8 marlas of land to Faqir Singh and ordered to proportionate reduction in the bid price. Learned counsel further argued that the transfer in favour of Faqir Singh was not complete. According to the learned counsel, the auction purchaser cannot claim any title to the property till he makes payment of the full price. He further argued that even if there was no specific order of cancelling the sale yet the auction purchaser, who had not paid the instalments, cannot claim the property and the sale in his favour is deemed to be cancelled. The learned counsel further argued that the allotment of the land in question in favour of Keser Singh being a displaced person was not by any mistake. Actually when he was allotted the land against verified claim, the disputed killa number was vacant. Faqir Singh had never taken possession of the said killa number. Therefore, the said killa number was allotted to the appellants. Thus, according to the learned counsel, the impugned judgment passed by the learned Single Judge setting aside the orders of the revenue authorities in favour of the appellants is not sustainable. On the other hand, learned counsel for the respondents supported the impugned judgment on the reasoning which has been entioned therein. L.P.A. No.215 of 1993 -8- We have gone through the impugned judgment and have considered the submissions of the learned counsel for the parties. Undisputedly, the land in question, i.e., measuring 7 kanals 8 marlas comprising in killa No.23//21 is the surplus evacuee property which was purchased by the State Government from the Central Government under a package deal. In a restricted auction, respondent Faqir Singh purchased 79 kanals 13 marlas surplus evacuee property, including the disputed land measuring 7 kanals 8 marlas comprising in killa No.23//21 on 13.7.1970. The said land was purchased by him on instalments. Admittedly, respondent Faqir Singh had taken physical possession of the aforesaid land, excluding the disputed killa number. Instead of that killa number, he had taken possession of Killa Nos.18//2 and 22//3, which were of superior quality. It is further undisputed fact that respondent Faqir Singh only paid the earnest amount and did not pay the instalments in time. Therefore, the Tehsildar (Sales)-cum-Managing Officer vide his order dated 12.7.1972 had forfeited his earnest money and cancelled the sale. Against the said order, respondent Faqir Singh filed an appeal stating therein that the land sold him in the restricted auction was unfit for cultivation, therefore, the auction be cancelled and earnest money deposited by him be refunded. His appeal was dismissed by the Settlement Commissioner on 3.11.1972. He did not challenge that order in further appeal. However, he approached the Revenue and Rehabilitation Minister. On his directions, the case of respondent Faqir Singh was re-opened and Additional Settlement Commissioner (Sales) vide his order dated 9.11.1973 allowed him to pay the instalments due along with interest. It is further admitted position that even after three years he did not ask for possession of the disputed killa No.23//21 measuring 7 kanals 8 L.P.A. No.215 of 1993 -9- marlas. But, later on, when two Killa Nos., i.e., 18//2 and 22//3, which were taken into possession by him, were acquired, he moved an application on 11.10.1976 to Tehsildar (Sales)-cum-Managing Officer for delivery of the possession of disputed Killa No.23//21. It is further undisputed position that when the Tehsildar (Sales)-cum-Managing Officer came to know that the disputed killa number was allotted to a displaced person, he made a suo moto reference under Section 24 of the Displaced Persons (Compensation & Rehabilitation) Act for cancellation of the allotment to Keser Singh qua that Killa number. The learned Chief Settlement Commissioner vide his order dated 18.5.1977 rejected the reference and directed the Tehsildar (Sales)- cum-Managing Officer to move to the competent authority for de- confirmation of the auction sale qua the disputed killa number in favour of Faqir Singh.The said order was challenged by Faqir Singh in appeal under Section 33 of the Displaced Persons (Compensation & Rehabilitation) Act. The said petition was dismissed by the Financial Commissioner, Revenue & Secretary to Govt., Punjab and the order of the Chief Settlement Commissioner was upheld. In terms of the order of the Chief Settlement Commissioner, a reference was made by the Tehsildar (Sales)-cum- Managing Officer to the Chief Sales Commissioner, Ludhiana under Section 10(2) of the Punjab Package Deal Properties (Disposal) Act for de- confirmation of sale qua land measuring 7 kanals 8 marlas. The said reference was allowed by the Chief Sales Commissioner vide order dated 10.12.1979 and transfer of 7 kanals 8 marlas of land was cancelled and the proportionate was ordered to be reduced from the bid price. The above orders of the revenue authorities have been set aside by the learned Single Judge primarily on the ground that under Section 24 L.P.A. No.215 of 1993 -10- of the of the Displaced Persons (Compensation & Rehabilitation) Act and under Section 10(2) of the Punjab package Deal Properties (Disposal) Act the sale of the surplus evacuee property could only be set aside on the ground of fraud, false representation and concealment of any material fact. Since in the instant case there was no misrepresentation or fraud, therefore, setting aside the sale qua the disputed killa number in favour of Faqir Singh was illegal. The learned Single Judge though had noticed other facts regarding non-deposit of the instalments, the order of forfeiture of the earnest money, not taking possession of the disputed land and raising grouse about non-delivery of possession after a long time when the two killa numbers, whose possession was taken at the initial stage, were acquired and thereafter for moving the application for delivery of possession of the disputed killa number, but in our opinion, the learned Single Judge has not properly appreciated the effect and consequences of those facts. It is well settled that against the evacuee property, including the surplus evacuee property, the displaced person, who has a verified claim, has a superior right for allotment. Such land could have also been disposed by a public restricted auction. In the present case, on 13.7.1970, 79 kanals 13 marlas land was sold in a restricted public auction and the respondent Faqir Singh purchased the said land on instalments. First two factors are to be noticed here. Firstly, the auction purchaser did not take physical possession of the disputed killa number. Instead of that, he had taken possession of Killa Nos.18//2 and 22//3, which were of superior quality. Secondly, he did not make the payment of the due instalments. In the meanwhile, Keser Singh, who was a displaced person, having satisfied and verified claim, was allotted 221 kanals of land, including the disputed killa No. 23//21, on L.P.A. No.215 of 1993 -11- 13.7.1970. Though his allotment was subsequent but the aforesaid two factors go to the root of the matter because on the day of allotment of the disputed land to respondent Keser Singh, neither title of the disputed land was passed to Faqir Singh nor he had taken possession of the same. Rather, subsequently, vide order dated 12.7.1972, Tehsildar (Sales), Ludhiana had forfeited the earnest money deposited by respondent Faqir Singh because of non-payment of the instalments. The appeal against the said order was also dismissed by the Settlement Commissioner on 3.11.1972. Subsequently, Additional Settlement Commissioner (Sales) vide his order dated 9.11.1973 permitted respondent No.1 to pay the instalments due along with interest. But before that order, the allotment of the disputed land in favour of Keser Singh, who was a displaced person, was final and the possession of the said land was delivered to him. For three years after the said order, respondent No.1 remained silent and only on 11.10.1976 he moved an application for delivery of possession of the land comprising in disputed killa number. In that situation, in our view the Chief Sales Commissioner, Ludhiana was fully justified in allowing the suo moto reference moved by Tehsildar (Sales)-cum-Managing Officer under Section 10(2) of the Punjab Package Deal Properties Act, 1976 and ordered for cancellation of auction sale only qua 7 kanals 8 marlas of land with proportionate reduction in the sale price. In our opinion, when 221 kanals of land, including the disputed land, was allotted to Keser Singh (predecessor of the appellants) on 26.1.1971, no title in the disputed land can deem to have been transferred in favour of Faqir Singh. In Dr. Bhargava and Co. Versus Shayam Sunder Seth by L.Rs., 1994(5) S.C.C. 471, the Supreme Court by following its earlier decision in L.P.A. No.215 of 1993 -12- Bishan Paul Versus Mothu Ram, AIR 1965 SC 1994 has held that title in the evacuee property cannot pass to the auction purchaser unless the full price of the sale is paid. The learned Single Judge in Darshanjit Kaur Versus Financial Commissioner Planning), Punjab, Chandigarh 1994(3) PLR 596 has held that a defaulting auction purchaser would not have any claim to the evacuee property purchased by him in the auction. In such cases, even no order of cancellation of the sale is required to be passed. Such sale is deemed to be automatically cancelled. It was further held that the authorities will be well within their rights to allot the property in dispute to the persons entitled in accordance with law. Thus, in our view, in the present case, the transfer in favour of respondent Faqir Singh became perfect in the year 1973 when he had deposited all the instalments with interest in terms of the order dated 9.11.1973 passed by the Additional Settlement Commissioner (Sales). But before the said order, the disputed killa number was already allotted to Keser Singh, who was a displaced person and was having a preferential right on the evacuee property. Therefore, the Chief Settlement Commissioner vide his order dated 18.5.1977 rightly declined to accept the suo moto reference made by Tehsildar (Sales)-cum-Managing Officer under Section 24 of the Displaced Persons (Compensation & Rehabilitation) Act and directed the Tehsildar (Sales)-cum-Managing Officer to move to the competent authority under Section 10(2) of the Punjab Package Deal Properties (Disposal) Act for de-confirmation of the sale of the land qua disputed killa number in favour of Faqir Singh. The said order of the Chief Settlement Commissioner was affirmed by the Financial Commissioner, Revenue & Secretary to Govt., Punjab while dismissing the petition filed by Faqir Singh under Section 33 of the Displaced Persons (Compensation & L.P.A. No.215 of 1993 -13- Rehabilitation) Act. We do not find any illegality in the said order because the allotment in favour of Keser Singh was perfectly valid. On that date neither any title was passed in favour of Faqir Singh nor he was in physical possession of the disputed killa number. Now the question arises for consideration is that in the facts and circumstances of the case, as discussed above, the Chief Sales Commissioner was justified in cancelling the sale qua land in favour of Faqir Singh and ordering for proportionate reduction in the sale price in exercise of the power under Section 10(2) of the Punjab Package Deal Properties (Disposal) Act. In this case, the sale qua 7 kanals 8 marlas of land was not cancelled under Section 24 of the Displaced Persons (Compensation & Rehabilitation) Act. Vide order dated 10.12.1979 the Chief Sales Commissioner had set aside that portion of the sale with proportionate reduction in the sale price in exercise of the power conferred on him under Section 10(2) of the Punjab Package Deal Properties (Disposal) Act. Section 10 of the Punjab Package Deal Properties (Disposal) Act is reproduced below:- "10. Power of revision.-(1) The Chief Sales Commissioner may at any time call for the record of any proceedings under this Act in which a Tehsildar (Sales) or a Naib-Tehsildar (Sales) or Sales Commissioner (in his district) has passed an order for the purpose of satisfying himself to the legality or propriety of any such order and may pass such order in relation thereto as he may deem fit. (2) Without prejudice to the generality of the foregoing power under sub-section (1), if the Chief Sales Commissioner is satisfied that any order whether passed before or after the commencement of this Act, for the transfer of package deal property to any person, has been obtained by him by means of L.P.A. No.215 of 1993 -14- fraud, false representation or concealment of any material facts, then, notwithstanding anything contained in this Act, the Chief Sales Commissioner may pass an order cancelling or modifying the order of such transfer. (3) No order which prejudicially affects any person shall be passed under this section without giving him a reasonable opportunity of being heard. (4) Any person aggrieved by an order made under sub-section (2) may, within thirty days from the date of the order, make an application for the revision of the order, in such form and manner as may be prescribed, to the Commissioner and the Commissioner may pass such order thereon as it think fit." A perusal of sub section (2) reveals that if the Chief Sales Commissioner is satisfied that any order whether passed before or after the commencement of this Act, for the transfer of package deal property to any person has been obtained by him by means of fraud, false representation, then, notwithstanding anything contained in this Act, the Chief Sales Commissioner may cancel or modify the said order. In the present case, the conduct of respondent Faqir Singh is to be seen. The learned Single Judge while noticing his conduct has observed "it is undisputedly true that the conduct of petitioner does not inspire any sentiment or feeling in his