Case: Union of India Vs. M/s. Mundra Salt and Chemical Industries

3. On 22nd May, 1952 Tehsildar issued a notification for sale of Khajan (Marshy) land on ownership basis through public auction. In the public auction dated 12th June, 1952 Hanumanbux Lalchand Mundra offered highest bid and deposited the part amount on the same day towards the price of land. The balance amount was deposited on 26th June, 1952. On 5th May, 1955 the Collector confirmed the said auction sale. As a consequence, on 25th May, 1955 an agreement was executed with the said purchaser and on 24th November, 1955 the Circle Officer handed over the possession of the land. Through mutation Entry No. 227 dated 24th February, 1970 the names of all the partners of Respondent No. 1 were entered in the revenue records. In the land acquisition proceedings for the construction of highway a portion of land bearing Sl. No. 386 (p) Mulund through the award, ownership of Respondent No. 1 was recognised and compensation was held to be payable to the said Hanumanbux Lalchand Mundra. The Municipal Corporation of Greater Bombay also acquired a portion of the land purchased in public auction held on 12th June, 1952 and through an award dated 13th April, 1972 accepted the title of the respondents and paid compensation to the partners of the Respondents. A notification under Section 4 of the Land Acquisition Act, 1894 read with Section 128 of the Maharashtra Regional and Town Planning Act, 1966 (hereinafter referred to as `the said Act) was issued by the Government of Maharashtra for acquiring land measuring 32,506 Sq. Mtrs. out of Gat. No. 86(p). A notification dated 11th November, 1980 under Section 126 of the said Act read with Section 6 of the Land Acquisition Act, 1894 was issued. The respondents challenged these notifications through a writ petition, in which respondents agreed to hand over possession of the aforesaid area. The respondents accordingly handed over possession of the said area and submitted their claim for compensation.4. It is at this stage, the Salt Department of the Union of India challenged the ownership of the respect of this acquired land. The Land Acquisition Officer referred the matter of ownership to the Collector who held respondents to be the owners. However, on 19th September, 1986 the Collector in review proceedings held, Union of India to be the owner and respondents were only the lessees who were entitled to receive compensation only for the loss of their business. The respondents challenged this order through a writ petition. The High Court quashed the aforesaid order and directed the District Judge to decide this question of ownership of land in pending Land Acquisition Ref. Nos. 90 and 91 of 1986. In this, only Union of India and not the Government of Maharashtra filed written statement. The aforesaid references of the respondent were allowed. The Court held that respondents were the owners and were entitled for the compensation calculated at the market value of Rs. 80/- per sq. mtr. Aggrieved by this the appellants filed the first appeal before the High Court, which was also dismissed. The High Court confirmed respondents to be owners of the acquired land. However, the rate of compensation was reduced from Rs. 80/- per sq. mtr. to Rs. 70/- per sq. mtr. The High Court held, that Section 37 of the Bombay Land Revenue Code of 1879 (hereinafter referred to as "the 1879 Code") on which strong reliance was placed, cannot confer title on the appellants.

Court's reasoning:
12. The legal position which emerges from the aforesaid laws appears to be that unless an individual proves his claim and title over the land, where the salt work is being carried on, such land was deemed to be that of the Government. It is in these set of laws, Section 37 of the 1879 Code also projects itself in the same manner. Under it, if any individual fails to establish his title, the Union Government is presumed to be the owner of the land. However, we have to keep in mind, when 1879 Code was promulgated federalism was not even born. In other words, then there was no question of any right of two Governments to hold the properties between them as it is now between the Union and the State Governments. Then the right over the land was confined to that of the Crown and an individual. That is why Section 37 of the 1879 Code recognises peremptory right of the Crown in respect all lands which are not the property of individuals. This conception of exclusive ownership over all land by the Crown stood dissolved after coming into force of the Constitution of India, under which right over such land was conferred both on the Union and the State Governments.The question of title of the Union in the proceedings under the Land Acquisition Act, which is under consideration, admittedly is after the enforcement of the Constitution of India hence the title over the land in question could not be that of the Union of India.15. Lastly, learned counsel for the Union submits that significantly the very High Court in another set of contest, which is subject matter of consideration in Civil Appeal Nos. 2286-2343 of 1998 has held, Union of India to be the owner over such land. We have perused the said judgment, we find, the High Court merely relies for drawing such inference on Section 37 of 1879 Code. We have already held after Government of India Act, 1935, in any case after the Constitution of India, Section 37 of the 1879 Code would have no application for the claim by the Union. Hence this submission has no merit. Hence we do not find any sustainable submission to hold Union of India to be the owner of the suit land. Consequently, we find no error in the impugned judgment of the High Court.