By – Saurabh Srivastava

Name Of the Case	Union Of India vs M/S K.C.Sharma And Co.
Citation	CIVIL APPEAL NO.9049-9053 OF 2011
Judgement on	14th August 2019
Appellant	Union of India Anr.
Respondent	M/s K.C. Sharma & Co. & Ors.
Court	In Supreme Court of India Civil Appellant Jurisdiction
Bench/ Judge	Justice R. Subhash Reddy
Statutes	The Land Acquisition Act, 1894,  The Transfer of Property Act, 1882
Important Section Involved	Section 18 The Land Acquisition Act, 1894 Section 30 The Land Acquisition Act, 1894 Section 31 The Land Acquisition Act, 1894 Section 53A Transfer of Property Act, 1882

Abstract

Our Legislatures main intention behind the enactment of “the transfer of property Act” was to protect prospective transferees by allowing them to retain possession as against the rights of Transferor if the terms necessary to constitute a transfer can be reasonably ascertained and Transferee has done some act in furtherance of the contract and transferee has performed or willing to perform his part of the contract, then even if the transferor has not completely executed the instrument of transfer as prescribed the law, the transferor any person claiming under him shall not be allowed to enforce any right against the transferee. This is a beneficial statute for honest and bonafide buyers or lessees who are less educated and can be easily exploited by fraudsters.

Introduction

As a developing nation, India needs to execute various projects that will serve economic as well as social development. Every year, large quantity lands are acquired by the Government of India for public purposes. The land acquisition act was enacted for this purpose, it laid down the procedure as to how the government should acquire a particular land and determine as to what extent it has the obligation to pay fair compensation to the owner of the land or who has the possession of the land at the time of acquisition.   

Background of the Case

The land measuring 36 Bighas 11 Biswas which was situated in Khasra Luhar Heri, Delhi was acquired by the government initiating proceeding under the Land acquisition act 1894. The notification was issued in two newspapers circulating in the locality, one of which is in local language whilst the collector caused public notice at conspicuous places in locality according to section 4(1) of the Land Acquisition Act, 1894. It was declared that land was being used for public purposes according to section 6 of the land acquisition act, 1894.

In the award proceeding, the respondent claimed compensation on the ground that the acquired land was given to them on lease for removal of “Shora” to make land fit for cultivation by Goan Saba and they are in possession of the land. The aforesaid proceeding was referred to under sections 30 and 31 of the land acquisition act, 1894. The civil court heard the case and passed a judgment and decree in favour of the respondent declaring that respondents are entitled to compensation to the extent of 87% and the remaining 12% is to be paid to the Panchayat.

Facts of the Case

About 3 years after the judgment and decree of the civil suit under section 30 and section 31 of the land acquisition act 1894, some aggrieved villagers filed a writ petition in the High Court alleging that the respondent was not lessees of the land that they claimed to be. The respondent has claimed compensation in collusion with Ex- Pradhan of Panchayat. The high court by order permitted to Additional District Magistrate to intervene in the proceedings under section 18 of the land acquisition Act 1894 and place on the record the available facts and material to substantiate their case. The legal heir of the original lessee was allowed to support their contentions regarding lessee and compensation for aforesaid land.

Consequently, Goan Sabha filed for its application under Order 1 Rule 10 of the Civil Procedure Code in the aforementioned proceeding which resultant in finding that the panchayat was entitled only to seek enhancement of the compensation up to 13 % of the share.

Pursuant to the High court observation of permitting Additional District Magistrate to intervene in the proceeding section 18 of the land acquisition Act, 1894, the Appellant approaches High court seeking a declaration of the decree and judgment of the Civil court was obtained by Fraud. The respondent and ex-Pradhan colluded together to misled the court to receive enhanced compensation. The Additional District Judge decided the case in Appellant Favour.

Thus, aggrieved Respondents/ Defendant preferred 1st appeal before the High court. The High court set aside the trial court’s judgment and decree and held that the appellant failed to show how the fraud was committed upon the civil court and the respondent has proved that due procedure was followed in giving the lease of the land which is duly signed and approved by the Deputy Director of the Goan Sabha.

Hence this appeal was initiated in the Hon’ble Supreme court by the appellant.  

Issue Raised

1. Whether the Respondent and ex-Pradhan colluded to defraud the government for enhanced compensation?

2. Whether Section 53A of the Transfer of the Property Act is available to a person in possession of the property even if he/she doesn’t have a lease deed registered in his favour?

3. Was due procedure followed in the allotment of the lessee for the land? 

Arguments

Appellant

1. Learned Additional Solicitor General for Appellant argued that the judgment and decree of the civil court were obtained by fraud. The Ex- Pradhan colluded with the respondent to mislead the court as the lease deed was not executed in favour of the respondent at the time of acquisition.
2.  Learned Additional Solicitor General for Appellant further argued that according to the case of Shrist Dhawan v. M/s Shaw Brother and Meghmala & Ors v. V.G Narasimha Reddy & Ors., it was held that the Judgement and decree obtained by the fraud shall be declared Null and vitiated and shall be set aside by the court.
3. Learned Additional Solicitor General for Appellant further argued that a mere license was provided by Goa Sabha to the respondent for the removal of “Shora” to make the land cultivable. And therefore respondent is not entitled to compensation of 87% as decreed by the civil court.

Respondent 

1. Learned counsel for Respondent argued that proper procedure was followed in the allotment of the lease. The proposal for auction was signed and approved by all members of Panchayat then the auction was held with six bidders among whom the respondent bid was the highest. And finally, the proposal regarding the bid was approved by the Dy. Director. Only thereafter the respondent took possession and performed his part of the contract.

.

2.  Learned counsel for Respondent relied upon the judgment in Maneklal Mansukhbhai v. Hormusji Jamshedji Ginwalla and sons and Hamzabi & Ors. V. Syed Karimuddin & Ors which held that in absence of lease deed, the respondent entitled to the benefit of the section 53A Of the transfer of the property act.

3. Learned counsel for Respondent further argued the perusal of Section 53A of the transfer of property act clearly emphasizes on even if the transfer of the property has not been completed in accordance with law but “there was a contract between the transferor and transferee “ “where the transferee had taken possession and done some act in furtherance of the contract and the transferee has performed or willing to perform his part of the contract” then “transferor or any person claiming under him is debarred from enforcing against transferee or any person claiming under him any right against the property”. This implies that even in absence of a lease deed, the conduct of the respondent to perform his part of the contract i.e. removal of “shore” and agreement between them and Panchayat establishes that he is entitled to the compensation that Civil Court had decreed.  

Judgement

The Hon’ble Supreme Court held that “Though the learned Additional Solicitor General appearing for the appellants has relied on several judgments in support of her plea that if the judgment and decree were obtained by fraud then the same would be declared null 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 facts, circumstances and the evidence on record.

When the judgment and decree are assailed only on the ground that the 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 due procedure for granting a lease was followed. The lease was approved by the competent authority/Dy. Director, Panchayat. And therefore, it cannot be said respondents have obtained a lease in collusion with ex-Pradhan of the Panchayat. 

Except for such a vague plea, there were no particulars on 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 the same has to be proved by cogent evidence. There cannot be any inference contrary to the record. As the evidence on record was not sufficient to prove the fraud on the part of the respondent, the court is of the opinion 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 Additional Solicitor General for the appellants would not render any assistance to support their plea. Further cases referred in the case of Associated Hotels and C.M. Beena 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 the appellants.

On the other hand in the case of Maneklal Mansukhbhai relied on by learned senior counsel for the respondents it is held by this Court that defence under Section 53A of the Transfer of the property, 1882 is available to a person who has the agreement of lease in his favour though no lease has been executed and registered. A similar proposition is also approved in the judgment of this Court in the case of Hamzabi & Ors. V. Syed Karimuddin & Ors wherein this Court has held that “Section 53A of the Transfer of the property, 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”

 Therefore the Supreme Court due to lack of merit dismissed the appeal without any cost.

Related Provision

Section 18 of the Land acquisition act 1894 refers to Reference to Court

Section 30 of the Land acquisition act 1894 refers to Dispute as to apportionment.

Section 31 of the Land acquisition act 1894 refers to Payment of compensation or deposit of same in Court

Section 53A of the Transfer of the property act, 1882 refers to the Part performance

Conclusion

In the above case, The absence of a lease deed has cast a doubt whether the respondent had fraudulently availed compensation from the government under the land acquisition act It was also established by relying on various Case laws that the judgment and decree of the court obtained by fraud became nullity and vitiated and liable to be set aside by the court. But the beneficial provision of the section 53A of the Transfer of the property act came to the rescue of the respondent which protects the transferee if he/she has been in possession of the property and has done an act in furtherance of the contract then even if the instrument of transfer is incomplete according to the procedure of the law, he will be regarded as lessor or owner as the case may be. This decision has set a precedent for all bonafide purchasers or lessors that they are shielded from exploitation by powerful and greedy people.