Case: Lachhman Dass &amp; Ors Vs. Municipal Committee Jalalbad &amp; Ors

2. The relevant facts may be stated shortly. The Nawab of Mamdot became an evacuee in 1947 on the partition of the country and his property was taken over by the Custodian as evacuee property. In 1949, the District Rent and Managing Officer treated five shops, situated in Chowk Kalan, Jalalabad, as belonging to the Nawab of Mamdot and began to recover the rent of the shops from the tenants. The Municipal Committee protested and lengthy correspondence ensued between the Municipal Committee and the Custodian. Eventually the Municipal Committee filed a Civil Suit in 1958 against the Union of India for a declaration that the said shops were their own property and not evacuee property. Ultimately, the Trial Court, by order dated January 8, 1962, made a reference to the Custodian General for determining the question whether the shops in dispute were evacuee property or not. The Deputy Custodian General, exercising his powers under Section 27 ofthe Administration of Evacuee Property Act, 1950 (hereinafter referred to as the Evacuee Act) held that the property in dispute had been wrongly taken over as evacuee property and ordered that the five shops be released in favour of the Municipal Committee, Jalalabad. On this, the Municipal Committee applied to the Regional Settlement Commissioner, under Rule 37 of the Administration of Evacuee Property (Central) Rules, 1950 for the restoration and possession of the five shops. On March 14, 1963, the District Rent and Managing Officer, Jalalabad, sent a memorandum to the Municipal Committee stating that the property in dispute had already been transferred to the occupants and disposed of under the Compensation Act and that its assessed price was Rs. 6542/-. In the memorandum it was furtheris not, therefore, expedient or practicable to restore the above property to you and it has, therefore, been decided to transfer you any other immovable property in the compensation pool of the equal amount in lieu thereof under Section 20B of the D. Ps. (C and R) Act, 1954."The memorandum also listed some properties which were available for transfer to the Municipal Committee. This is the memorandum that has been quashed by the High Court.3. The above proposal was not acceptable to the Municipal Committee. It was pointed out by the Municipal Committee in reply that it was incorrect that all the five shops had been transferred and that the assessment price was Rs. 6452/-. According to the Municipal Committee only one shop out of these, in possession of Dogar Mal Ram Chand, had been auctioned for Rs. 10,100/- although the sale had not matured.4. It appears that one shop was released in favour of the Municipal Committee but the Department refused to release the other shops. After unsuccessfully approaching the Settlement Officer, with delegated powers of the Settlement Commissioner, the writ application under Article 226 was filed in the High Court.

Court's reasoning:
12. In our view, Section 20B violates both these provisions of the article. There is no doubt that to provide for rehabilitation of displaced persons was a public purpose but it does not serve any public purpose to provide that if a displaced person is in occupation of somebodys property he should not be given other property because it will not be expedient or practicable to do so.A public purpose may be served if it had been provided that a displaced person may not be ousted because his business would be ruined or that he would be completely thrown on the street, but to provide in the Section that if the Central Government does not think it expedient or practicable for its own convenience or for the convenience of a lessee or licensee who is not a displaced person it may not restore property serves no public purpose. In our view, under the Section the Central Government is entitled got to restore property to serve a purpose other than a public purpose and consequently the Section is ultra vires Article 31 (2).13. Further, in our opinion, the Section does not fix any compensation or lay down any principles for compensation Sub-section (1) (a) of Section 20B may perhaps be taken as laying down some principle, namely, that the value should be the same but it does not prescribe the point of time at which the value is to be ascertained. In sub-clause (b) nothing is said about the cash being equivalent to the value of the property which is sought not to be restored. The Central Government might, having regard to the value of the property, decide that cash to the extent of 50 per cent of its value should be paid. In doing this it would be having regard to the value of the property but it would be following another rule, namely, that the cash should be half of the value of the property which is laid down in the Section .14. We are quite aware that the Central Government was faced with the problem mentioned in the "objects and reasons" set out above, and this problem had to be tackled, but the problem should and can be tackled in accordance with law and the Constitution.15. It was sought to be argued before us that Article 31 (2A) applied in this case, but it seems to us that insofar is the property was still part of the compensation pool the effect of, the extinguishment of the title of the rightful owner would be to vest the property in the Central Government.It may be that insofar as the title vested in the displaced person the case would come within Article 31 (2A), but then the Section is not severable and it has to be declared void as a whole.We need not consider the point that even if the Section is severable it would be void under Article 19(1) (f). The points we have mentioned above would also be relevant in considering the reasonableness of the restrictions.16. We may mention that the learned counsel on behalf of Lachhman Dass and others, the displaced persons to whom the shops had been purported to have been transferred under the sanads, tried to attack the validity of the order of the Custodian General under Section 27 of the Evacuee Act on the ground that they were not heard. This point was not taken in the High, Court and we cannot allow it to be raised before us at this stage.