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Bhagat Ram & Others v. State Of Punjab & Others .
Factual and Procedural Background
The petition, filed under Article 32 of the Constitution, challenges a consolidation scheme framed for Village Dolike Sunderpur in the State of Punjab. The scheme, confirmed on 11-3-1959 and published on 25-3-1959, set aside various parcels of land for village amenities (such as phirnis, paths and cremation grounds) and additionally reserved 100 kanals 2 marlas of cultivable land “for income of the Panchayat.” Although repartition orders were passed on 30-4-1959, actual physical possession never changed hands because of interim stay orders issued in related High Court proceedings. The present petition was heard after the Court had delivered its judgment in Ajit Singh v. State of Punjab, (1967) 2 SCR 143, which dealt with substantially similar questions.
Legal Issues Presented
- Whether the reservation of 100 kanals 2 marlas of land “for income of the Panchayat” constitutes an “acquisition by the State” hit by the second proviso to Article 31-A(1)(a) of the Constitution.
- Whether, alternatively, the alleged acquisition had been completed before the Constitution (Seventeenth Amendment) so as to fall outside the ambit of the second proviso to Article 31-A.
Arguments of the Parties
Petitioners' Arguments
- The reservation of cultivable land for Panchayat income is effectively an acquisition by the “State” (Panchayat being included in “State” under Article 12) and therefore offends the second proviso to Article 31-A because no compensation at market value is provided when the holding of a cultivating tenant is reduced below the statutory ceiling.
- Under Sections 23-A and 24 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948, acquisition is not complete until the allottees actually enter possession; since possession has never transferred, the State cannot rely on an earlier date to avoid constitutional scrutiny.
State's Arguments
- The consolidation scheme, including the reservation for Panchayat income, was finalised and confirmed in 1959—well before the Seventeenth Constitutional Amendment—so that any acquisition was complete and immune from the newly inserted second proviso to Article 31-A.
- Even though physical possession was delayed, the rights to the new holdings were irrevocably settled upon confirmation and repartition, thereby perfecting the acquisition.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Ajit Singh v. State of Punjab & Anr., (1967) 2 SCR 143 | Distinction between “acquisition by the State” and mere “modification/extinguishment” of rights under Article 31-A; validity of reserving land for village amenities. | Relied upon to hold that while land reserved for amenities is permissible, land reserved to create income for the Panchayat constitutes an acquisition by the State and therefore attracts the second proviso. |
Court's Reasoning and Analysis
Speaking for the majority, Sikri, J. noted that:
- Unlike land set aside for communal amenities, land reserved to generate Panchayat income benefits the Panchayat itself, which is “State” under Article 12; hence the beneficiary is the State.
- The statutory definition of “common purpose” (Section 2(bb) of the 1948 Act) cannot override the constitutional safeguard in the second proviso to Article 31-A.
- Sections 23-A and 24 show that ownership rights and control pass to the Panchayat only after actual transfer of possession; because possession never changed, acquisition was incomplete, making the scheme vulnerable to constitutional scrutiny.
- The State’s contention that rights were perfected on confirmation of the scheme was rejected; a perfected right to future possession is not tantamount to consummated “acquisition” within the meaning of Article 31-A.
Hidayatullah, J. concurred in the result but, by separate reasoning, emphasised that whenever acquisition reduces a cultivating tenant’s holding below the statutory ceiling, compensation at not less than market value must be paid, irrespective of the purpose for which the land is taken.
Holding and Implications
HELD: The consolidation scheme for Village Dolike Sunderpur is unconstitutional to the extent that it reserves 100 kanals 2 marlas of land for the income of the Panchayat; the State of Punjab is directed to modify the scheme in conformity with the second proviso to Article 31-A as interpreted by the Court. No order as to costs.
Implications: The decision clarifies that land reserved to augment Panchayat revenue constitutes an acquisition by the “State” and therefore triggers the constitutional requirement for compensation when holdings fall below the statutory ceiling. Consolidation authorities cannot circumvent Article 31-A safeguards by labeling such reservations as “common purposes.” The ruling affects only the present scheme and sets no broader new precedent beyond reinforcing the principle already articulated in Ajit Singh.
Sikri, J.— This is a petition under Article 32 of the Constitution challenging the scheme made in respect of the consolidation of Village Dolike Sunderpur. We have today delivered judgment in Ajit Singh v. State of Punjab (1967) 2 SCR 143 and most of the points in this appeal are covered by the decision in that case. Two points remain to be dealt with in this case.
2. The first question that arises is whether the scheme insofar as it makes reservations of land for income of the Panchayat is hit by the second proviso to Article 31-A. The scheme reserves lands for phirni, paths, agricultural paths, manure pits, cremation grounds, etc., and also reserves an area of 100 kanals 2 marlas (standard kanals) for income of the Panchayat. We have already held in Ajit Singh case (1967) 2 SCR 143 that acquisition for the common purposes such as phirnis, paths, etc., is not acquisition by the State within the second proviso to Article 31-A. But this does not dispose of the question whether the reservation of land for income of the Panchayat is acquisition of land by the state within the second proviso to Article 31-A. We held in that case that there was this essential difference between “acquisition by the State” on the one hand and “modification or extinguishment of rights” on the other that in the first case the beneficiary is the State while in the latter case the beneficiary of the modification or the extinguishment is not the State. Here it seems to us that the beneficiary is the Panchayat which falls within the definition of the word “State” under Article 12 of the Constitution. The income derived by the Panchayat is in no way different from its any other income. It is true that Section 2(bb) of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948, defines “common purpose” to include the following purposes:
“ … providing income for the Panchayat of the village concerned for the benefit of the village community.”
Therefore, the income can only be used for the benefit of the village community. But so is any other income of the Panchayat of a village to be used. The income is the income of the Panchayat and it would defeat the whole object of the second proviso if we were to give any other construction. The Consolidation Officer could easily defeat the object of the second proviso to Article 31-A by reserving for the income of the Panchayat a major portion of the land belonging to a person holding land within the ceiling limit. Therefore, in our opinion, the reservation of 100 kanals 2 marlas for the income of the Panchayat in the scheme is contrary to the second proviso and the scheme must be modified by the competent authority accordingly.
3. This takes us to the second question raised by the State, in the alternative. On behalf of the State it has been argued that acquisition had already taken place before the Seventeenth Amendment came into force, and, therefore, the scheme is not bit by the second proviso to Article 31-A. The relevant facts are contained in the affidavit of Jaswant Singh Bhutani, Officer on Special Duty, and are as follows:
“The village was notified for consolidation vide Punjab Government Notification No. 1 57.G/t7O4l-A dated 1-9-1956 which was duly published and a proper notice under Rule 4 of the Consolidation Rules was issued which was also published in the village in the prescribed manner. The Scheme was prepared by the Consolidation Officer under the Act in consultation with the right holders and Advisory Committee of the village on 15-1-1959 and the right holders were invited to file objections under Section 19(1) of the Act against the draft scheme as required within 30 days of the said publication. The objections were tendered which were duly considered and after consideration of the same the scheme was confirmed under Section 20(3) of the Act by the Settlement Officer, Consolidation of Holdings, on 11-3-1959. The confirmed scheme was also published in the village under Section 20(4) of the Act on 25-3-1959. That an area meassuring 100 kanals 2 marlas (standard) was reserved for the income of the Panchayat according to the requirements of the village. So far as the reservation for the common purposes of the village was concerned, neither the petitioner nor any right holders of the village filed any objections against the said reservation. In pursuance of the same, the repartition of the land was effected on 30-4-59 and the plots of land were allocated to the right holders as required under the Act. There were 90 objections against repartition under Section 21(2) of the Act and all of them have been disposed of. In the meantime, some of the right holders in Village Dolike Sunderpur went to the High Court and filed a Writ Petition No. 531/1959 and the Hon'ble High Court by its judgment and order dated 25-11-1959 quashed the scheme but upon a Letters Patent Appeal filed by the respondents herein, the High Court restored the scheme. The possessions were not transferred in view of the stay orders obtained by the right holders of that village from the High Court.”
4. It is clear from this affidavit that possession has not been transferred in pursuance of the repartition. The learned Counsel for the petitioners relies on this fact and says that in view of Section 23-A and Section 24 the “acquisition” does not take place till all the persons entitled to possession of holdings under the Act have entered into possession of the holdings. Sections 23-A and 24 read as follows:
“23-A. As soon as a scheme comes into force, the management and control of all lands assigned or reserved for common purposes of the village under Section 18, shall vest in the Panchayat of that village which shall also be entitled to appropriate the income accruing therefrom for the benefit of the village community, and the rights and interest of the owners of such lands shall stand modified and extinguished accordingly.
24. (1) As soon as the persons entitled to possession of holdings under this Act have entered into possession of the holdings respectively allotted to them, the scheme shall be deemed to have come into force and the possession of the allottees affected by the scheme of consolidation, or, as the case may be, by repartition, shall remain undisturbed until a fresh scheme is brought into force or a change is ordered in pursuance of provisions of sub-section (2), (3) and (4) of Section 21 or an order passed under Section 36 or 42 of this Act.
(2) A Consolidation Officer shall be competent to exercise all or any of the powers of a Revenue Officer under the Punjab Land Revenue Act, 1887 (Act 17 of 1887), for purposes of compliance with the provisions of sub-section (1).”
5. It seems to us clear from these provisions that till possession has changed under Section 24, the management and control does not vest in the Panchayat under Section 23-A. Not only does the management and control not vest but the rights of the holders are not modified or extinguished till persons have changed possession and entered into the possession of the holdings allotted to them under the scheme. Mr Gossain, the learned Counsel for the State, tried to meet this point by urging that by virtue of repartition under Section 21, the rights to possession of the new holdings were finalised and could be enforced. This may be so; but this cannot be equivalent to “acquisition” within the second proviso to Article 31-A.
6. In the result we hold that the scheme is hit by the second proviso to Article 31 A insofar as it reserves 100 kanals 2 marlas for the income of the Panchayat. We direct the State to modify the scheme to bring it into accord with the second proviso as interpreted by us, proceed according to law. There would be an order as to costs.
Hidayatullah, J.— This is a petition under Article 32 of the Constitution challenging the scheme made in respect of the consolidation of the Village Dolike Sunderpur. We have in our judgment, in the companion case, dealt with the second proviso to Article 31-A(1)(a). Here too land is reserved for the Panchayat. We have indicated in our judgment in the companion case that no matter for what purpose the acquisition takes place, if the land of a tenant cultivating the land is reduced to something below the ceiling fixed by law compensation at a rate which is not lower than the market rate must be paid to him. We have also indicated how this compensation must be worked out. When the Constitution speaks of market value, it is not possible to find compensation in advantages which might accrue indirectly.
8. Our brethren have held that the reservation of 100 kanals 2 marlas to enable the Panchayat to raise an income is contrary to the second proviso and that the scheme must be modified accordingly. Our approach to the problem is different. We have shown in the judgment in the companion case that the test is the deprivation of land which makes the land of a cultivating tenant go below the ceiling fixed for such land by law. If this happens then compensation for the acquisition of land which brings down the holding to something below the ceiling must be paid at rates which are not below the market rate. We would accordingly have made the declaration and left the party concerned to demand compensation for land by which his ceiling is reduced. There is no question of looking to the end to which the income may be used and to differentiate between deprivation of one kind and deprivation of another kind. According to us the ceiling fixed by law is not to be reduced by acquisition by the State unless compensation at market rate is paid. No other compensatory factor can be taken note of under the proviso. Nor can it avail that the land of which the tenant is deprived is to be put to some other use by the Panchayat thereafter. Such acquisition without compensation is unconstitutional and we cannot add a proviso of our own to the proviso enacted in the Constitution. We would accordingly allow the petition making a declaration on the lines indicated and leaving the party to demand compensation if his land is reduced below the ceiling.
9. In the circumstances we would award no costs.
ORDER
10. The scheme made in respect of the consolidation of Village Dolike Sunderpur is hit by the second proviso to Article 31-A of the Constitution insofar as it reserves 100 kanals 2 marlas for the income of the Panchayat. The State is directed to modify the scheme to bring it into accord with the second proviso as interpreted in the majority judgment in Civil Appeal No. 1018 of 1966 and to proceed according to law. There would be no order as to costs.
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