UNION OF INDIA & ANR. versus M/S. K.C. SHARMA & CO. & ORS.
[2020] 6 S.C.R. 854, Supreme Court of India, 2020
Outcome: Dismissed (Dismissed)
Segment: Ratio
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[2020] 6 S.C.R.
UNION OF INDIA & ANR.
v.
M/S. K.C. SHARMA & CO. & ORS.
(Civil Appeal Nos. 9049-9053 of 2011)
AUGUST 14, 2020
[ASHOK BHUSHAN, R. SUBHASH REDDY AND
M. R. SHAH, JJ.]
Land Acquisition Act, 1894 – ss.30 and 31 – Reference
proceedings under – Decree passed – Allegation of fraud – When
not proved – Large extent of land including the land in question
belonging to Panchayat/Gaon Sabha was acquired – Respondents
claimed that they were lessees of the land in question and thus
entitled for compensation – Matter referred to Civil Court u/ss.30,
31 which passed decree holding respondents entitled for
compensation to the extent of 87% and gaon sabha for the remaining
13% – Suit filed by appellants inter alia for declaration that the
aforesaid decree was obtained by fraud – Decreed – Set aside by
High Court – Held: Decree passed by Civil Court became final and
was not questioned in any appeal – Land in question was banjar
land having shora and Panchayat wanted to give it on lease to
make the same fit for cultivation by removing shora – At every stage,
the proceedings for grant of lease to respondents were approved
by competent authority – It cannot be said that lease was obtained
by respondents in collusion with ex-Pradhan of Gaon Sabha – Fraud
has to be pleaded and proved – In the present case, except a vague
plea, there were no particulars of how the fraud was played – Fraud
not established – No case made out to interfere with the
well
reasoned judgment of High Court – Transfer of Property Act, 1882
– s.53A.
Transfer of Property Act, 1882 – s.53A – Defence under –
Discussed – Land Acquisition Act, 1894.
Dismissing the appeals, the Court
HELD: 1.1 The judgment and decree dated 28.09.1989
passed in the proceedings under Sections 30 and 31 of the Land
Acquisition Act, 1894 has become final. Same was not questioned
[2020] 6 S.C.R. 854
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in any appeal. Without filing any appeal against the judgment and
decree dated 28.09.1989, a separate suit is filed mainly on the
ground that the said judgment and decree is obtained by fraud.
The land in question was ‘banjar’ land having “shora” and Gram
Panchayat wanted to give the said land on lease to make the same
fit for cultivation by removing “shora”. The revenue records
produced also reveal that the name of the respondent was entered
as possessor and cultivator. In the light of documentary evidence
it cannot be said that lease was obtained by the respondents in
collusion with ex-Pradhan. [Para 11][862-C, E-F; 863-B]
1.2 When the judgment and decree is assailed only on the
ground that lease was created in collusion with the ex-Pradhan,
as the same is contrary to evidence, the only plea of the
respondents was rightly not accepted by the High Court. As at
every stage the proceedings for grant of lease were approved by
the competent authority/Dy. Director, Panchayat, as such it cannot
be said respondents have obtained lease in collusion with ex-
Pradhan of the Panchayat. Except such a vague plea, there were
no particulars how the fraud was played. Fraud has to be pleaded
and proved. More so, when a judgment and decree passed earlier
by the competent court is questioned, it is necessary to plead
alleged fraud by necessary particulars and same has to be proved
by cogent evidence. As the evidence on record discloses that
fraud, as pleaded, was not
established, in absence of any necessary
pleading giving particulars of fraud, no case is made out to
interfere with the well reasoned judgment of the High Court.
[Para 12][863-D-G]
Maneklal Mansukhbhai v. Hormusji Jamshedji
Ginwalla & Sons AIR 1950 SC 1 : [1950] SCR 75;
Hamzabi & Ors. v. Syed Karimuddin & Ors. (2001) 1
SCC 414 : [2000] 5 Suppl. SCR 99 – relied on.
Associated Hotels of India Ltd. v. R.N. Kapoor (1960)
1 SCR 368; C.M. Beena & Anr. v. P.N. Ramachandra
Rao (2004) 3 SCC 595 : [2004] 3 SCR 306 – held
inapplicable.
S. P. Chengalvaraya Naidu (Dead) by LRs v. Jagannath
(Dead) by LRs & Ors. (1994) 1 SCC 1 : [1993] 3 Suppl.
UNION OF INDIA & ANR. v. M/S. K. C. SHARMA
& CO. & ORS.
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SCR 422; A. V. Papayya Sastry & Ors. v. Govt. of A. P.
& Ors. (2007) 4 SCC 221 : [2007] 3 SCR 603;
Madhukar Sadbha Shivarkar (Dead) by LRs v. State of
Mahrashtra & Ors. (2015) 6 SCC 557; Satluj Jal Vidyut
Nigam v. Raj Kumar Rajinder Singh (Dead) through
Lrs. (2019) 14 SCC 449 : [2018] 12 SCR 282; Shrist
Dhawan (Smt.) v. M/s. Shaw Brothers (1992) 1 SCC
534 : [1991] 3 Suppl. SCR 446; Meghmala & Ors. v.
G. Narasimha Reddy & Ors. (2010) 8 SCC 383 : [2010]
10 SCR 47; Bharat Petroleum Corporation Ltd. v.
Chembur Service Station (2011) 3 SCC 710 : [2011] 3
SCR 632; Ranganayakamma & Anr. V. K.S. Prakash
(D) by LRs & Ors. (2008) 15 SCC 673 : [2008] 9 SCR
297 – referred to.
Case law Reference
[1993] 3 Suppl. SCR 422
referred to
Para 8
[2007] 3 SCR 603
referred to
Para 8
(2015) 6 SCC 557
referred to
Para 8
[2018] 12 SCR 282
referred to
Para 8
[1991] 3 Suppl. SCR 446
referred to
Para 8
[2010] 10 SCR 47
referred to
Para 8
[1960] 1 SCR 368
held inapplicable
Para 8
[2004] 3 SCR 306
held inapplicable
Para 8
[2011] 3 SCR 632
referred to
Para 8
[1950] SCR 75
relied on
Para 9
[2000] 5 Suppl. SCR 99
relied on
Para 9
[2008] 9 SCR 297
referred to
Para 9
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 9049-
9053 of 2011.
From the Judgment and Order dated 21.05.2007 of the High Court
of Delhi at New Delhi in RFA Nos. 204-8 of 2006.
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Ms. Aishwarya Bhati, ASG, Jayant Bhushan, Siddharth
Bhatnagar, Sr. Advs., Ms. Sunita Sharma, Ms. Neela Kedar Gokhale,
B. V. Balaram Das, Nikilesh Ramachandran, Aakash Chaudhari, Advs.
for the appearing parties.
The Judgment of the Court was delivered by
R. SUBHASH REDDY, J.
1. The Union of India through Secretary (Revenue) and another,
have filed these appeals aggrieved by the judgment and decree dated
21.05.2007 passed by the High Court of Delhi in R.F.A.Nos.204-8/2006.
By the aforesaid impugned judgment, the High Court has allowed the
Regular First Appeals, preferred by the respondents, by setting aside
judgment and decree dated 04.01.2006 passed in Suit No.203 of 2005 by
the Addl. District Judge, Delhi.
2. Necessary facts in brief are as under :
The land admeasuring 36 bighas 11 biswas comprising in Khasra
Nos.14/9, 12, 17, 18, 19, 20/1, 23 and 24 belonged to Gaon Sabha Luhar
Heri, Delhi. The large extent of land in the village, including the aforesaid
land, was acquired by the Government by initiating proceedings under
Land Acquisition Act, 1894 (for short, ‘the Act’). The notification under
Section 4(1) of the Act was issued on 27.01.1984 and declaration under
Section 6 of the Act came to be published on 20.09.1984. By passing the
Award bearing No.101/86-87 on 19.09.1986, possession of the land was
taken by the Government. In the award proceedings, as the respondents
have claimed compensation on the ground that the land was given to
them on lease by
Gaon Sabha, the matter was referred to the Civil Court
under Sections 30 and 31 of the Act, for apportionment of the amount of
compensation. In the aforesaid reference proceedings, preferred under
Sections 30 and 31 of the Act, it was the claim of the respondents that as
the land was not fit for cultivation, it was granted on lease to the
respondents to remove the “shora” and to make the land fit for cultivation.
It is their case that in view of the lease granted by the Gaon Sabha, they
have spent huge amount for removal of “shora” and made the land fit
for cultivation, and continued in possession by cultivating the same for
more than 30 years. In the aforesaid proceedings referred under Sections
30 and 31 of the Act, the Civil Court has passed the judgment and decree
on 28.09.1989, declaring that the respondents-claimants are entitled for
UNION OF INDIA & ANR. v. M/S. K. C. SHARMA
& CO. & ORS.
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compensation to the extent of 87% and remaining 13% is to be paid to
the panchayat/Gaon Sabha.
3. Nearly after three years of the aforesaid judgment and decree
in the proceedings under Sections 30 and 31 of the Act, some villagers
have filed Writ Petition No.1408/1992 alleging that the respondents were
not the lessees of the land in question and they have claimed compensation
in collusion with ex-Pradhan of the Gaon Sabha. The said writ petition
was disposed of by the High Court of Delhi on 21.02.1997. In the
aforesaid order the High Court has permitted the Additional District
Magistrate to intervene in the pending proceedings under Section 18 of
the Act and place on record the available material to substantiate their
case. At the same time it was kept open to the legal heirs of the original
lessee to support their contention that there is a lease and they are entitled
to claim compensation for the land acquired. The relevant portion of the
order dated 21.02.1997 passed in the writ petition reads as under :
“We are not to be understood as deciding anything regarding the
rights of the parties one way or the other. The A.D.M. is hereby
directed to file his intervention application within one month from
the date of receipt of this order and the leaned Addl. District
Judge is directed not to dispose of the application for enhancement
before a decision is rendered on the intervention application of
the A.D.M. It will be
open to the A.D.M. to consider, apart from
intervention in the matter, whether any separate proceedings are
to be initiated or not for the recovery of the compensation already
paid.”
4. In view of the observations made by the High Court in the writ
petition, Gaon Sabha/Panchayat has filed application under Order 1 Rule
10 of the Code of Civil Procedure to implead it in the proceedings under
Section 18 of the Act. In the aforesaid proceedings it was held that in
view of the judgment and decree passed in proceedings under Sections
30 and 31 of the Act holding that the respondents-claimants are entitled
for compensation to the extent of 87%, the Civil Court has held that
Panchayat is entitled only to seek enhancement of compensation to the
extent of their 13% share.
5. Further, in view of the observations made by the High Court, a
suit was filed by the appellants, initially before the High Court of Delhi,
which was subsequently transferred to the Court of Additional District
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Judge, Delhi on the ground of pecuniary jurisdiction and same was
numbered as Suit No.203 of 2005. The said suit was filed seeking
declaration that the judgment and decree dated 28.09.1989 was obtained
by fraud as such they are entitled for recovery of Rs.11,20,707/- with
interest @ 18% p.a.  In the aforesaid suit mainly it was the case of the
appellants-plaintiffs that the said decree was obtained by fraud in collusion
with ex-Pradhan, and created a resolution showing that the said land
was leased in their favour for a period of five years from 04.04.1981. It
was their specific case that since the ex-Pradhan of the Gaon Sabha
was in collusion with the respondents-defendants and due to such fraud
committed by them upon the court they could obtain order and decree as
such the same was assailed in the suit.
6. The said suit was decreed by judgment and decree dated
04.01.2006 and aggrieved by the same respondents-defendants have
preferred First Appeals in R.F.A.Nos.204-8/2006 before the High Court
of Delhi. The High Court, by appreciating the documentary and oral
evidence on record, has come to the conclusion that appellants-plaintiffs
have not pleaded necessary particulars so as to show how fraud was
committed upon the court which decided the reference under Sections
30 and 31 of the Act. Further by recording a finding that Gram Panchayat
wanted to give the said land on lease to make the land fit for cultivation
by removing “shora” and the said proposal was
signed by all the members
of the Gaon Sabha and only after approval from the Dy. Director,
Panchayat, it was put to auction. It was further held by the High Court
that in the auction proceedings there were as many as six bidders and as
the bid of the respondents was highest at Rs.89/- per acre same was
accepted. It is further held by the High Court that the proposal regarding
acceptance of the bid was also approved by the Dy. Director vide letter
dated 16.04.1981 and only thereafter respondents took possession of
the land and paid the money through various receipts which are part of
the record. Further the High Court has held that the entries made in the
revenue records support the plea of the respondents that they continued
in possession by cultivating the land and as, every action of the Gaon
Sabha from the stage of proposal to create lease and acceptance of
lease was approved by Dy. Director, there is no case made out by the
appellants to show that lease was created only with the collusion of the
ex-Pradhan of the Gaon Sabha. With the aforesaid findings the appeals
filed by the respondents were allowed and judgment and decree of the
trial court was set aside. Hence, these civil appeals, by plaintiffs.
UNION OF INDIA & ANR. v. M/S. K. C. SHARMA
& CO. & ORS. [R. SUBHASH REDDY, J.]
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7. We have heard Ms. Aishwarya Bhati, learned Additional
Solicitor General for the appellants and Sri Jayant Bhushan, learned senior
advocate appearing for the respondents-defendants.
8. Learned Additional Solicitor General appearing for the appellants
has mainly contended that respondents have claimed compensation by
playing fraud. It is submitted that there is no lease deed as such in favour
of the respondents and the only rights which were conferred on the
respondents were to remove the “shora” on the land in question so as to
make the land fit for cultivation. It is submitted that in absence of any
lease deed executed by the Gram Panchayat in favour of the respondents,
at best it can be treated as a licence for removal of “shora” only and
same cannot be treated as a lease. The learned ASG has submitted that
as the judgment and decree which was questioned in the suit was obtained
by fraud, the suit was rightly decreed by the trial court but same was
reversed by the High Court without appreciating their case in proper
perspective. It is submitted by learned ASG that in any event having
regard to claim made by the respondents-defendants they are not entitled
for compensation to the extent of 87%.  In support of her pleading that
as much as the judgment and decree dated 28.09.1989 is obtained by
fraud and the same is a nullity and it is vitiated, she has placed reliance
on the following judgments of this Court :
1.
S.P. Chengalvaraya Naidu (Dead) by LRs v. Jagannath (Dead)
by LRs & Ors.1
2. A.V. Papayya Sastry & Ors. v. Govt. of A.P. & Ors.2
3. Madhukar Sadbha Shivarkar (Dead) by LRs v. State of
Mahrashtra & Ors.3
4. Satluj Jal Vidyut Nigam v. Raj Kumar Rajinder Singh (Dead)
through LRs4
5. Shrist Dhawan (Smt.) v. M/s. Shaw Brothers5
6. Meghmala & Ors. V. G. Narasimha Reddy & Ors.6
1 (1994) 1 SCC 1
2 (2007) 4 SCC 221
3 (2015) 6 SCC 557
4 2018 (11) SCALE 383 = (2019) 14 SCC 449
5 (1992) 1 SCC 534
6 (2010) 8 SCC 383
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It is submitted that above said case law supports the case of the
appellants that as the decree was obtained by fraud, same is a nullity
and vitiated and same can be set aside at any point of time. Further
learned ASG, in support of her argument that the transaction from the
Gaon Sabha is to be construed as a licence but not a lease and to draw
the difference between ‘lease’ and ‘licence’, placed reliance on the
judgments of this Court in the case of Associated Hotels of India Ltd. v.
R.N. Kapoor7; C.M. Beena & Anr. V. P.N. Ramachandra Rao8; and
Bharat Petroleum Corporation Ltd. v. Chembur Service Station9.
9. On the other hand Sri Jayant Bhushan, learned senior counsel
appearing for the respondents has contended that judgment and decree
passed in proceedings under Sections 30 and 31 of the Act has become
final. It is submitted that in view of the finality attained to such judgment
and decree, only question which arose for consideration in the suit was
whether such judgment and decree was obtained by fraud or not. In
support of the plea of fraud, the only contention of the appellants was
that there was no lease and resolution for grant of lease was obtained in
collusion with the ex-Pradhan of the Gaon Sabha. It is submitted by
learned senior counsel that it is clear from the evidence on record that
the decision to grant lease of the land was taken by Gaon Sabha and all
the members are signatories and only after approval of the Dy. Director,
Panchayat land
was leased. It is submitted that lease was granted by
conducting auction and as much as the original respondent-defendant
was the highest bidder lease was granted by parting possession to the
respondents. It is submitted that as the respondents continued in
possession which is evident from the evidence produced as reflected in
the revenue records, it is not open for the appellants to plead that
respondents are to be considered only as licensees but not lessees. It is
submitted that as the trial court has not properly appreciated the evidence
on record and decreed the suit, same is rightly set aside by the High
Court and there are no grounds to interfere with the same. The learned
senior counsel has submitted that though no lease deed has been executed
and registered, respondents are entitled to the benefit of Section 53A of
the Transfer of Property Act, 1882. To support his contention, he has
relied on judgments of this Court in the case of Maneklal Mansukhbhai
UNION OF INDIA & ANR. v. M/S. K. C. SHARMA
& CO. & ORS. [R. SUBHASH REDDY, J.]
7 (1960) 1 SCR 368
8 (2004) 3 SCC 595
9 (2011) 3 SCC 710
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v. Hormusji Jamshedji Ginwalla & Sons10 and Hamzabi & Ors. v. Syed
Karimuddin & Ors.11. Further, in support of his argument that the fraud
has to be established by pleading with sufficient proof, he has relied on
judgment of this Court in the case of Ranganayakamma & Anr. V. K.S.
Prakash (D) by LRs & Ors.12.
10. Having heard the learned counsel on both sides, we have
perused the material on record.
11. In this case we are not concerned with the correctness of the
judgment and decree dated 28.09.1989 passed in the proceedings under
Sections 30 and 31 of the Act. In the suit filed in Suit No.203 of 2005 a
declaration is sought to the effect that the judgment and decree dated
28.09.1989 is obtained by playing fraud. In support of their case the only
pleading was that there was no lease in fact and same was created by
creating resolution in collusion with the ex-Pradhan of Panchayat. From
the material and evidence on record we are in agreement with the view
taken by the High Court. In view of the rival claims for compensation
matter was referred under Sections 30 and 31 of the Act and it was held
that respondents are entitled to compensation to the extent of 87%
whereas Gaon Sabha was held entitled only to the extent of 13%. The
said judgment has become final.  Same was not questioned in any appeal.
Without filing any appeal against the judgment and decree dated
28.09.1989, a separate suit is filed mainly on the ground
that the said
judgment and decree is obtained by fraud. From the material placed and
evidence produced, it is clear that the land in question was ‘banjar’ land
having “shora” and Gram Panchayat wanted to give the said land on
lease to make the same fit for cultivation by removing “shora”. Such
proposal was agreed to by all the members of Gaon Sabha and proposal
as such was sent to Dy. Director, Panchayat for approval. The Dy.
Director of Panchayat has approved the same by deciding that the
minimum bid should be for Rs.75/- per acre. Only after receipt of such
approval from the Dy. Director, Panchayat, land was auctioned on
04.04.1981 for grant of leasehold rights. In the auction conducted there
were as many as six bidders and bid of the respondent was the highest
which was at Rs.89/- per acre and was accepted. Even such acceptance
of proposals was again sent to Dy. Director for approval and the Dy.
10 AIR 1950 SC 1
11 (2001) 1 SCC 414
12 (2008) 15 SCC 673
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Director vide letter dated 16.04.1981 approved the acceptance of the
bid in favour of the respondent for a period of five years. Thereafter the
respondent was put in possession and he continued in possession by
paying bid amount to the Gram Panchayat. The revenue records produced
also reveal that the name of the respondent was entered as possessor
and cultivator. In the light of such documentary evidence it cannot be
said that lease was obtained by the respondents in collusion with ex-
Pradhan. It is to be noted that it was not an act of ex-Pradhan of the
Gaon Sabha and from the stage of proposal same was approved by the
Dy. Director, only thereafter by conducting open auction respondents
were granted lease.
12. Though the learned Additional Solicitor General appearing for
the appellants has relied on several judgments in support of her plea that
as the judgment and decree was obtained by fraud same is a nullity and
vitiated, but in a given case whether such decree was obtained by fraud
or not, is a matter which is to be judged with reference to pleadings and
the evidence on record. When the judgment and decree is assailed only
on the ground that lease was created in collusion with the ex-Pradhan,
as the same is contrary to evidence, the only plea of the respondents
was rightly not accepted by the High Court. As at every stage the
proceedings for grant of lease were approved by the competent authority/
Dy. Director, Panchayat, as such it cannot be said
respondents have
obtained lease in collusion with ex-Pradhan of the Panchayat. Except
such a vague plea, there were no particulars how the fraud was played.
It is fairly well settled that fraud has to be pleaded and proved. More so,
when a judgment and decree passed earlier by the competent court is
questioned, it is necessary to plead alleged fraud by necessary particulars
and same has to be proved by cogent evidence. There cannot be any
inference contrary to record. As the evidence on record discloses that
fraud, as pleaded, was not established, in absence of any necessary
pleading giving particulars of fraud, we are of the view that no case is
made out to interfere with the well reasoned judgment of the High Court.
The case law in this regard submitted by the learned ASG for the
appellants would not render any assistance to support their plea. Further
cases referred in the case of Associated Hotels7 and C.M. Beena8 also
will not come to the rescue of the case of the appellants in any manner.
As it is clear from the evidence that the respondents were put in
possession and they continued in possession by cultivating the land the
said judgments would not render any assistance in support of the case of
UNION OF INDIA & ANR. v. M/S. K. C. SHARMA
& CO. & ORS. [R. SUBHASH REDDY, J.]
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the appellants. On the other hand in the case of Maneklal Mansukhbhai10
relied on by learned senior counsel for the respondents it is clearly held
by this Court that defence under Section 53A of the Transfer of Property
Act, 1882 is available to a person who has agreement of lease in his
favour though no lease has been executed and registered. Similar
proposition is also approved in the judgment of this Court in the case of
Hamzabi11 wherein this Court has held that Section 53A of the Transfer
of Property Act, 1882 protects the possession of persons who have acted
on a contract of sale but in whose favour no valid sale deed is executed
or registered. As it is clear that respondents were put in possession and
the Panchayat has acted upon their proposal for grant of lease said case
law supports the case of the respondents.
13. For the aforesaid reasons, we do not find any merit in these
appeals so as to interfere with the impugned judgment. Accordingly,
these civil appeals are dismissed with no order as to costs.
Divya Pandey
Appeals dismissed.