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Union Of India And Others v. Harish Chand Anand .
Factual and Procedural Background
The dispute concerns land granted to the respondent under Section 3 of the Government Grants Act, 1895. The grant expressly allowed the Government to resume the land “at any time” upon giving one month's notice and paying the value of authorised structures erected by the grantee.
The Government issued a notice of resumption. The respondent contended that resumption could occur only after the Government had first determined and paid compensation for the structures. The High Court accepted that contention and, under Article 133(1) of the Constitution, certified the following question for appeal:
“Whether the only right of the grantee is to claim compensation and whether the Government can take possession at any time after expiry of one month in view of Governor General's Order No. 179 dated 12-9-1836?”
The State appealed to the Supreme Court. Although served, the respondent did not appear. The Court proceeded with the assistance of counsel for the appellant and by referring to the judgments of the Delhi High Court (Raj Singh v. Union of India) and the Allahabad High Court (Bhagwati Devi v. President of India).
Legal Issues Presented
- Whether the State may resume land granted under Section 3 of the Government Grants Act, 1895 upon expiry of one month's notice, without first determining and paying compensation for authorised structures.
- Whether the grantee’s sole remedy upon such resumption is to claim compensation, in light of Governor General's Order No. 179 of 1836 and the terms of the grant.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Raj Singh v. Union of India, AIR 1973 Del 169; 1972 Rev CR 718 (Delhi High Court) | Held that issuance of the prescribed notice is sufficient for resumption; determination of compensation may follow. | The Supreme Court approved this view as “pragmatic and realistic,” adopting it as the correct interpretation of the grant. |
| Bhagwati Devi v. President of India, (1974) 72 All LJ 43 (Allahabad High Court) | Held that the Government must first determine and pay compensation after giving the grantee an opportunity to be heard, before taking possession. | The Supreme Court expressly disagreed and overruled this approach, finding that it would “defeat the public purpose.” |
Court's Reasoning and Analysis
1. The Court analysed the express covenants of the grant, which retained the Government’s “power of resumption at any time” upon:
- (a) giving one month's notice, and
- (b) payment of the value of authorised buildings.
2. Governor General's Order No. 179 of 1836, issued under statutory authority, affirmed the validity of such covenants.
3. Interpreting these instruments, the Court concluded that the sole condition precedent to resumption is the issuance and expiry of the one-month notice. Determination and payment of compensation, although mandatory, are subsequent ministerial acts.
4. The Court observed that Standing Order No. 241 provides an administrative mechanism—valuation by a Military Engineer—but does not require advance notice for the valuation process itself. Nevertheless, natural justice entitles the erstwhile licensee to be heard during valuation.
5. Requiring valuation and payment before resumption, as held by the Allahabad High Court, would “defeat the public purpose” by delaying Government use of the land. The Delhi High Court’s contrary view better aligned with the statutory scheme and practical considerations.
6. Accordingly, the High Court’s insistence on prior determination and payment was found erroneous.
Holding and Implications
Holding: The appeal is allowed; the Government may lawfully resume the granted land upon giving and exhausting one month's notice. Determination and payment of compensation for authorised structures may occur thereafter, with an opportunity for the grantee to participate in valuation.
Implications: The decision clarifies the procedure for resumption of Government-granted land under the Government Grants Act, 1895. It endorses a notice-first, valuation-later framework, facilitating timely governmental use of land while safeguarding the grantee’s right to fair compensation. No new statutory rule was created, but the judgment harmonises conflicting High Court views and sets a precedent on the sequencing of notice, possession, and compensation.
Order
1. This is an appeal by certificate granted by the High Court by order dated 14-12-1978 with a question as under:
“Whether the only right of the grantee is to claim compensation and whether the Government can take possession at any time after expiry of one month in view of Governor General's Order No. 179 dated 12-9-1836?”
2. In view of the certificate granted by the High Court under Article 133(1) of the Constitution, the question arises whether the State is entitled to resume land granted under Section 3 of the Government Grants Act, 1895 without prior determination of the amount for the structure. Though the respondent has been served, he has not appeared, either in person or through counsel. We have taken the assistance of counsel for the appellant and we have perused the judgment of the Delhi High Court reported in Raj Singh v. Union of India AIR 1973 Del 169, 1972 Rev CR 718, and the Division Bench judgment of the High Court of Allahabad reported in Bhagwati Devi v. President of India (1974) 72 All LJ 43 which was relied on and followed by the Division Bench in this case to hold that it is a condition precedent that the State should give notice to the respondent, determine the compensation and then resume the property granted to the respondent. The question, therefore, is whether it is a condition precedent for the Government to resume the land only after determination of the compensation and payment thereof or on the issuance of the notice as required under the grant and on expiry thereof. To appreciate the contention, it is necessary to look to the provisions of the grant itself. Under Section 3 of the Act, the Governor General-in-Council exercised the power and granted licence to the respondent to erect the structure on the government land. The conditions of the grant are:
“No ground will be granted except on the following conditions, which are to be subscribed by every grantee as well as by those to whom his grant may subsequently be transferred:
First: The Government to retain the power of resumption at any time on giving one month's notice and payment of the value of such buildings as may have been authorised to be erected.”
The other clauses are not relevant for the purpose of this case. Hence they are omitted.
3. In the Order No. 179 of 1836, the Governor General-in-Council had issued the regulation empowering the Governor General to rescind authorised orders in force till then and to substitute for them by regulations. The regulations in Order No. 179 of 1836 are statutory regulations made by the Governor General-in-Council in exercise of his statutory power. The covenants for the grant clearly empower the Government retaining its power of resumption at any time. The conditions precedent are — to issue one month's notice and payment of the value of such building as may have been authorised to be erected.
4. The Division Bench of the Delhi High Court has left open the question of mode of determination of the value of the building to be determined in accordance with the relevant provisions of the law. The Division Bench of the Allahabad High Court in Bhagwati Devi case (1974) 72 All LJ 43 in para 7, had held that though the Government is entitled to resume the land, the grantee is entitled to a prior opportunity to represent his case before the competent authority in determination of the value of the building and for payment of the value of such building resumed by the State.
5. It would appear that detailed instructions in that behalf were made in the Standing Order No. 241 which was produced before the Division Bench of the High Court of Allahabad in which the Military Engineer was instructed to evaluate the value of the building which was resumed by the Government for payment of the amount to the erstwhile licensee. We are not concerned in this appeal as to the method of valuation. Suffice it to state that the Order No. 241 though does not contemplate issuing of prior notice to erstwhile licensee whose licence has been determined under clause 1 of the grant, before determination of the actual amount, the erstwhile grantee is entitled to a notice, so that the grantee would be at liberty to place before the competent authority all relevant material for determining the value of the building and for payment of the amount thereof. It is seen that it is not a condition precedent to determine, at the first instance, the compensation after giving an opportunity; make payment thereof and then to resume the property. What is a condition precedent is issuance of one month's notice and on expiry thereof the Government is entitled to resume the land. The amount is to be determined as required under the relevant provisions after giving opportunity and which could be done thereafter. After all, the property would be resumed for public use and determination of value of the building erected is a ministerial act and payment thereof is the resultant consequence. This process would take some time and if the reasoning of the High Court of Allahabad is given effect to, it would defeat the public purpose. The view of the Delhi High Court is consistent with the scheme and appears to be pragmatic and realistic. The High Court, therefore, was not right in its conclusion that it is a condition precedent to determine the amount of the value of the building in the first instance and payment thereof before resumption of the property.
6. The appeal is accordingly allowed, but since the respondent is not present, without costs.
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