Law Web: Supreme Court: Person in possession of the immovable property under an agreement of lease is entitled to get the benefit of the doctrine of part performance

On the other hand in the case of Maneklal

Mansukhbhai10 relied on by learned senior counsel for the respondents it

is clearly held by this Court that defence under Section 53A of the

Transfer of Property Act, 1882 is available to a person who has

agreement of lease in his favour though no lease has been executed

and registered. Similar proposition is also approved in the judgment of

this Court in the case of Hamzabi11 wherein this Court has held that

Section 53A of the Transfer of Property Act, 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.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.9049-9053 OF 2011

Union of India Vs M/s. K.C. Sharma & Co.

R. Subhash Reddy, J.

Dated:August 14, 2020.

1. The Union of India through Secretary (Revenue) and another,

have filed these appeals aggrieved by the judgment and decree dated

21.05.2007 passed by the High Court of Delhi in R.F.A.Nos.204-8/2006.

By the aforesaid impugned judgment, the High Court has allowed the

Regular First Appeals, preferred by the respondents, by setting aside

judgment and decree dated 04.01.2006 passed in Suit No.203 of 2005

by the Addl. District Judge, Delhi.

2. Necessary facts in brief are as under :

The land admeasuring 36 bighas 11 biswas comprising in Khasra

Nos.14/9, 12, 17, 18, 19, 20/1, 23 and 24 belonged to Gaon Sabha

Luhar Heri, Delhi. The large extent of land in the village, including the

aforesaid land, was acquired by the Government by initiating

proceedings under Land Acquisition Act, 1894 (for short, ‘the Act’). The

notification under Section 4(1) of the Act was issued on 27.01.1984 and

declaration under Section 6 of the Act came to be published on

20.09.1984. By passing the Award bearing No.101/86-87 on

19.09.1986, possession of the land was taken by the Government. In

the award proceedings, as the respondents have claimed compensation

on the ground that the land was given to them on lease by Gaon Sabha,

the matter was referred to the Civil Court under Sections 30 and 31 of

the Act, for apportionment of the amount of compensation. In the

aforesaid reference proceedings, preferred under Sections 30 and 31 of

the Act, it was the claim of the respondents that as the land was not fit

for cultivation, it was granted on lease to the respondents to remove the

“shora” and to make the land fit for cultivation. It is their case that in

view of the lease granted by the Gaon Sabha, they have spent huge

amount for removal of “shora” and made the land fit for cultivation, and

continued in possession by cultivating the same for more than 30 years.

In the aforesaid proceedings referred under Sections 30 and 31 of the

Act, the Civil Court has passed the judgment and decree on 28.09.1989,

declaring that the respondents-claimants are entitled for compensation

to the extent of 87% and remaining 13% is to be paid to the

panchayat/Gaon Sabha.

3. Nearly after three years of the aforesaid judgment and decree in

the proceedings under Sections 30 and 31 of the Act, some villagers

have filed Writ Petition No.1408/1992 alleging that the respondents were not the lessees of the land in question and they have claimed

compensation in collusion with ex-Pradhan of the Gaon Sabha. The

said writ petition was disposed of by the High Court of Delhi on

21.02.1997. In the aforesaid order the High Court has permitted the

Additional District Magistrate to intervene in the pending proceedings

under Section 18 of the Act and place on record the available material to

substantiate their case. At the same time it was kept open to the legal

heirs of the original lessee to support their contention that there is a

lease and they are entitled to claim compensation for the land acquired.

The relevant portion of the order dated 21.02.1997 passed in the writ

petition reads as under :

“We are not to be understood as deciding anything regarding

the rights of the parties one way or the other. The A.D.M. is

hereby directed to file his intervention application within one

month from the date of receipt of this order and the leaned

Addl. District Judge is directed not to dispose of the

application for enhancement before a decision is rendered on

the intervention application of the A.D.M. It will be open to the

A.D.M. to consider, apart from intervention in the matter,

whether any separate proceedings are to be initiated or not for

the recovery of the compensation already paid.”

4. In view of the observations made by the High Court in the writ

petition, Gaon Sabha/ Panchayat has filed application under Order 1

Rule 10 of the Code of Civil Procedure to implead it in the proceedings

under Section 18 of the Act. In the aforesaid proceedings it was held

that in view of the judgment and decree passed in proceedings under

Sections 30 and 31 of the Act holding that the respondents-claimants

are entitled for compensation to the extent of 87%, the Civil Court has held that Panchayat is entitled only to seek enhancement of

compensation to the extent of their 13% share.

5. Further, in view of the observations made by the High Court, a suit

was filed by the appellants, initially before the High Court of Delhi, which

was subsequently transferred to the Court of Additional District Judge,

Delhi on the ground of pecuniary jurisdiction and same was numbered

as Suit No.203 of 2005. The said suit was filed seeking declaration that

the judgment and decree dated 28.09.1989 was obtained by fraud as

such they are entitled for recovery of Rs.11,20,707/- with interest @

18% p.a. In the aforesaid suit mainly it was the case of the appellantsplaintiffs

that the said decree was obtained by fraud in collusion with ex-

Pradhan, and created a resolution showing that the said land was

leased in their favour for a period of five years from 04.04.1981. It was

their specific case that since the ex-Pradhan of the Gaon Sabha was in

collusion with the respondents-defendants and due to such fraud

committed by them upon the court they could obtain order and decree

as such the same was assailed in the suit.

6. The said suit was decreed by judgment and decree dated

04.01.2006 and aggrieved by the same respondents-defendants have

preferred First Appeals in R.F.A.Nos.204-8/2006 before the High Court

of Delhi. The High Court, by appreciating the documentary and oral

evidence on record, has come to the conclusion that appellants-plaintiffs

have not pleaded necessary particulars so as to show how fraud was

committed upon the court which decided the reference under Sections 30 and 31 of the Act. Further by recording a finding that Gram Panchayat wanted to give the said land on lease to make the land fit for cultivation by removing “shora” and the said proposal was signed by all the members of the Gaon Sabha and only after approval from the Dy. Director, Panchayat, it was put to auction. It was further held by the High Court that in the auction proceedings there were as many as six bidders and as the bid of the respondents was highest at Rs.89/- per

acre same was accepted. It is further held by the High Court that the

proposal regarding acceptance of the bid was also approved by the Dy.

Director vide letter dated 16.04.1981 and only thereafter respondents

took possession of the land and paid the money through various receipts

which are part of the record. Further the High Court has held that the

entries made in the revenue records support the plea of the respondents

that they continued in possession by cultivating the land and as, every

action of the Gaon Sabha from the stage of proposal to create lease and

acceptance of lease was approved by Dy. Director, there is no case

made out by the appellants to show that lease was created only with the

collusion of the ex-Pradhan of the Gaon Sabha. With the aforesaid

findings the appeals filed by the respondents were allowed and

judgment and decree of the trial court was set aside. Hence, these civil

appeals, by plaintiffs.

7. We have heard Ms. Aishwarya Bhati, learned Additional Solicitor

General for the appellants and Sri Jayant Bhushan, learned senior

advocate appearing for the respondents-defendants.

8. Learned Additional Solicitor General appearing for the appellants

has mainly contended that respondents have claimed compensation by

playing fraud. It is submitted that there is no lease deed as such in

favour of the respondents and the only rights which were conferred on

the respondents were to remove the “shora” on the land in question so

as to make the land fit for cultivation. It is submitted that in absence of

any lease deed executed by the Gram Panchayat in favour of the

respondents, at best it can be treated as a licence for removal of “shora”

only and same cannot be treated as a lease. The learned ASG has

submitted that as the judgment and decree which was questioned in the

suit was obtained by fraud, the suit was rightly decreed by the trial court

but same was reversed by the High Court without appreciating their

case in proper perspective. It is submitted by learned ASG that in any

event having regard to claim made by the respondents-defendants they

are not entitled for compensation to the extent of 87%. In support of her

pleading that as much as the judgment and decree dated 28.09.1989 is

obtained by fraud and the same is a nullity and it is vitiated, she has

placed reliance on the following judgments of this Court :

1. S.P. Chengalvaraya Naidu (Dead) by LRs v. Jagannath (Dead)

by LRs & Ors.1

2. A.V. Papayya Sastry & Ors. v. Govt. of A.P. & Ors.2

3. Madhukar Sadbha Shivarkar (Dead) by LRs v. State of

Mahrashtra & Ors.3

1 (1994) 1 SCC 1

2 (2007) 4 SCC 221

3 (2015) 6 SCC 557

4. Satluj Jal Vidyut Nigam v. Raj Kumar Rajinder Singh (Dead)

through LRs4

5. Shrist Dhawan (Smt.) v. M/s. Shaw Brothers5

6. Meghmala & Ors. V. G. Narasimha Reddy & Ors.6

It is submitted that above said case law supports the case of the

appellants that as the decree was obtained by fraud, same is a nullity

and vitiated and same can be set aside at any point of time. Further

learned ASG, in support of her argument that the transaction from the

Gaon Sabha is to be construed as a licence but not a lease and to draw

the difference between ‘lease’ and ‘licence’, placed reliance on the

judgments of this Court in the case of Associated Hotels of India Ltd. v.

R.N. Kapoor7; C.M. Beena & Anr. V. P.N. Ramachandra Rao8; and

Bharat Petroleum Corporation Ltd. v. Chembur Service Station9.

9. On the other hand Sri Jayant Bhushan, learned senior counsel

appearing for the respondents has contended that judgment and decree

passed in proceedings under Sections 30 and 31 of the Act has become

final. It is submitted that in view of the finality attained to such judgment

and decree, only question which arose for consideration in the suit was

whether such judgment and decree was obtained by fraud or not. In

support of the plea of fraud, the only contention of the appellants was

that there was no lease and resolution for grant of lease was obtained in

collusion with the ex-Pradhan of the Gaon Sabha. It is submitted by

4 2018 (11) SCALE 383 = (2019) 14 SCC 449

5 (1992) 1 SCC 534

6 (2010) 8 SCC 383

7 (1960) 1 SCR 368

8 (2004) 3 SCC 595

9 (2011) 3 SCC 710

learned senior counsel that it is clear from the evidence on record that

the decision to grant lease of the land was taken by Gaon Sabha and all

the members are signatories and only after approval of the Dy. Director,

Panchayat land was leased. It is submitted that lease was granted by

conducting auction and as much as the original respondent-defendant

was the highest bidder lease was granted by parting possession to the

respondents. It is submitted that as the respondents continued in

possession which is evident from the evidence produced as reflected in

the revenue records, it is not open for the appellants to plead that

respondents are to be considered only as licensees but not lessees. It

is submitted that as the trial court has not properly appreciated the

evidence on record and decreed the suit, same is rightly set aside by the

High Court and there are no grounds to interfere with the same. The

learned senior counsel has submitted that though no lease deed has

been executed and registered, respondents are entitled to the benefit of

Section 53A of the Transfer of Property Act, 1882. To support his

contention, he has relied on judgments of this Court in the case of

Maneklal Mansukhbhai v. Hormusji Jamshedji Ginwalla & Sons10 and

Hamzabi & Ors. v. Syed Karimuddin & Ors.11. Further, in support of his

argument that the fraud has to be established by pleading with sufficient

proof, he has relied on judgment of this Court in the case of

Ranganayakamma & Anr. V. K.S. Prakash (D) by LRs & Ors.12.

10 AIR 1950 SC 1

11 (2001) 1 SCC 414

12 (2008) 15 SCC 673

10. Having heard the learned counsel on both sides, we have perused

the material on record.

11. In this case we are not concerned with the correctness of the

judgment and decree dated 28.09.1989 passed in the proceedings

under Sections 30 and 31 of the Act. In the suit filed in Suit No.203 of

2005 a declaration is sought to the effect that the judgment and decree

dated 28.09.1989 is obtained by playing fraud. In support of their case

the only pleading was that there was no lease in fact and same was

created by creating resolution in collusion with the ex-Pradhan of

Panchayat. From the material and evidence on record we are in

agreement with the view taken by the High Court. In view of the rival

claims for compensation matter was referred under Sections 30 and 31

of the Act and it was held that respondents are entitled to compensation

to the extent of 87% whereas Gaon Sabha was held entitled only to the

extent of 13%. The said judgment has become final. Same was not

questioned in any appeal. Without filing any appeal against the

judgment and decree dated 28.09.1989, a separate suit is filed mainly

on the ground that the said judgment and decree is obtained by fraud.

From the material placed and evidence produced, it is clear that the land

in question was ‘banjar’ land having “shora” and Gram Panchayat

wanted to give the said land on lease to make the same fit for cultivation

by removing “shora”. Such proposal was agreed to by all the members

of Gaon Sabha and proposal as such was sent to Dy. Director,

Panchayat for approval. The Dy. Director of Panchayat has approved the same by deciding that the minimum bid should be for Rs.75/- per acre. Only after receipt of such approval from the Dy. Director,

Panchayat, land was auctioned on 04.04.1981 for grant of leasehold

rights. In the auction conducted there were as many as six bidders and

bid of the respondent was the highest which was at Rs.89/- per acre and

was accepted. Even such acceptance of proposals was again sent to

Dy. Director for approval and the Dy. Director vide letter dated

16.04.1981 approved the acceptance of the bid in favour of the

respondent for a period of five years. Thereafter the respondent was put

in possession and he continued in possession by paying bid amount to

the Gram Panchayat. The revenue records produced also reveal that

the name of the respondent was entered as possessor and cultivator. In

the light of such documentary evidence it cannot be said that lease was

obtained by the respondents in collusion with ex-Pradhan. It is to be

noted that it was not an act of ex-Pradhan of the Gaon Sabha and from

the stage of proposal same was approved by the Dy. Director, only

thereafter by conducting open auction respondents were granted lease.

12. Though the learned Additional Solicitor General appearing for the

appellants has relied on several judgments in support of her plea that as

the judgment and decree was obtained by fraud same is a nullity 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 pleadings and

the evidence on record. When the judgment and decree is assailed only

on the ground that 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

proceedings for grant of lease were approved by the competent

authority/Dy. Director, Panchayat, as such it cannot be said respondents

have obtained lease in collusion with ex-Pradhan of the Panchayat.

Except such a vague plea, there were no particulars 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 same has to be proved by cogent evidence. There

cannot be any inference contrary to record. As the evidence on record discloses that fraud, as pleaded, was not established, in absence of any necessary pleading giving particulars of fraud, we are of the view 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 ASG for the appellants would not render assistance to support their plea.

Further cases referred in the case of Associated Hotels7 and C.M.

Beena8 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