Interim stay does not destroy precedent; vesting under land reforms law cannot continue without lawful compensation.

An interim stay granted by the Supreme Court in proceedings arising from an earlier judgment does not erase that judgment or displace its precedential value; the earlier ruling continues to bind and may be relied on by persons who were not parties to the stayed proceedings. Applying that principle, the earlier Division Bench decision remained operative despite interim protection in special leave matters. The document also states that vesting under the West Bengal Land Reforms Act could not be continued where the statute lacked a lawful compensation mechanism, as continued enforcement in the absence of adequate compensation was incompatible with Article 300A. The writ petitioner succeeded and the State was restrained from proceeding on the existing statutory footing.

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Issues: (i) Whether an interim order of stay passed by the Supreme Court in proceedings arising out of an earlier judgment prevents that judgment from operating as binding precedent against persons who were not parties to those proceedings; and (ii) whether vesting under the West Bengal Land Reforms Act could be continued when the statutory scheme did not provide lawful compensation for such vesting.

Issue (i): Whether an interim order of stay passed by the Supreme Court in proceedings arising out of an earlier judgment prevents that judgment from operating as binding precedent against persons who were not parties to those proceedings.

Analysis: An interim stay suspends operation of the impugned judgment as between the parties before the higher court, but it does not erase the judgment from existence or destroy its precedential value. A stay order, especially at the interlocutory stage, does not amount to a declaration of law. The binding force of the earlier judgment as a precedent therefore continues until it is set aside, and strangers to the earlier litigation are not deprived of its benefit merely because the Supreme Court has granted interim protection in connected matters.

Conclusion: The earlier Division Bench decision remained a valid and binding precedent, and the State could not ignore it on the footing that interim stay orders had been passed in special leave proceedings.

Issue (ii): Whether vesting under the West Bengal Land Reforms Act could be continued when the statutory scheme did not provide lawful compensation for such vesting.

Analysis: Once the provision relating to vesting had been held ultra vires Article 300A for want of a just and lawful compensation mechanism, the State could not proceed to enforce the vesting provision against the petitioners unless the statute contained adequate lawful provision for compensation. The continued operation of vesting in the absence of such compensation could not be sustained.

Conclusion: The vesting process could not be proceeded with against the petitioners until adequate lawful provision for compensation was incorporated in the Act.

Final Conclusion: The writ petitioner succeeded, the Tribunal's order was set aside, and the State was restrained from proceeding with vesting on the existing statutory footing.

Ratio Decidendi: An interim stay of an earlier judgment does not extinguish that judgment or its precedential force, and a vesting provision found unconstitutional for want of lawful compensation cannot be enforced until the defect is cured by legislation.

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