2018 (10) TMI 2061 - SC - Indian Laws

Appeal allowed; 1983 Rules Rule 5(2) applies to pending 20.61-acre allotment, lease execution set aside

NAGPUR IMPROVEMENT TRUST Versus SHEELA RAMCHANDRA TIKHE

SC allowed the appeal, set aside the HC judgment and dismissed the plaintiff's suit. The Court held that the claim for allotment of 20.61 acres was only ... Entitlement for allotment of 20.61 acres of land for which decree was granted - plaintiff's own case is that refusal to allot 20.61 acres of land took place only on 09.02.1989 when the Trust executed lease of 24 acres of land only - HELD THAT:- At best the application for reallotment of 20.61 acres of land was pending at the time when new Rules came in force. New Rules, thus, were fully attracted for any further disposal of land by the Trust as per Rule 5 and as per sub-Rule (2) of Rule 5 the land would have been disposed of except as otherwise provided in sub-Rule (1) only by holding public auction; inviting tenders by public advertisement; making offers to or accepting offers from any Government, Local Authority, Public Sector Undertaking or a body corporate which is owned or controlled by Government; inviting applications from persons or bodies of persons who are eligible for allotment of plots under Rule 4, by public advertisement and land for public amenities such as for primary school, vehicle stand, public latrine or urinal, public library, reading room, hospital, dispensary or such other purpose, etc. Plaintiff's claim is not covered in any manner of disposal under Rule 5(2), hence no decree would have been passed by the trial court contrary to the statutory Rules as envisaged by Rule 5(2). The view of the High Court that Rules, 1983 are prospective and shall not effect the allotment made in favour of the plaintiff on 06.10.1975 and 16.10.1975 was erroneous. The allotments which were finalised in pursuance of Resolution dated 06.10.1975 and 16.10.1975 were saved, but allotment of any land which could not take place finally before enforcement of Rules, 1983 has to be in accordance with the Rules, 1983. The claim of plaintiff for allotment of additional land of 20.61 acres which can be at best said to be pending on the date of enforcement of Rules, 1983 would have been only dealt with in accordance with Rule 5 of Rules, 1983 and disregard of said Rules the trial court would not have decreed the suit directing the Trust to execute lease in favour of the plaintiff of 20.61 acres of land. The decree of the trial court was clearly in the teeth of the statutory Rules and the High Court committed error in taking the view that Rules, 1983 were not applicable in the present case. No error was committed by the Appellate Court in entering into the issue as to whether application was barred by time. The Appellate Court was well within its jurisdiction in considering the question of limitation - thus, even without entering into the question of limitation we are of the clear opinion that plaintiff was not entitled for the decree as has been granted by the trial court and affirmed by the High Court. The appeal is allowed, the judgment of the High Court is set aside and the suit of the plaintiff stands dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether a person from whom land has been acquired and which has vested in the acquiring body can claim re-allotment of the acquired land as of right when the acquiring body subsequently decides to re-allot surplus land. 2. Whether a decision or provisional allotment taken prior to the coming into force of new statutory disposal rules operates to create a vested, indefeasible right enforceable after the new rules are notified, where final allotment (or completion of allotment formalities) did not occur before the new rules came into force. 3. Whether the Nagpur Improvement Trust Land Disposal Rules, 1983 (the 1983 Rules) apply to disposal/re-allotment of land where earlier Board resolutions and correspondence pre-dated those Rules but final disposal had not been completed before the 1983 Rules became effective. 4. Whether a court of first appeal may raise and decide limitation under the Limitation Act notwithstanding that limitation was not specifically framed as an issue at trial. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Entitlement of erstwhile owner to re-allotment after vesting (legal framework) Legal framework: Once land is acquired for a public purpose and vests in the acquiring body, the land vests free from encumbrances and the former owner's right is limited to compensation; restoration or re-vesting is not a general legal right. Disposal of vested land is governed by statutory rules promulgated under the relevant Trust/Act. Precedent treatment: The Court relied on established authorities holding that after acquisition the owner becomes persona non grata with respect to use of land and has only a right to compensation; restoration is not generally available (following the principles in the cited precedents addressing vested public land and disposal policy). The precedents were followed, not distinguished or overruled. Interpretation and reasoning: The decision to re-allot surplus land is an executive act subject to the statutory scheme for disposal. A resolution or executive intention to re-allot does not displace the statutory framework that governs disposal of vested land. Consequently, claims for allotment that conflict with statutory disposal procedures cannot be enforced by decree (unless the allotment had been finally concluded before the new statutory regime took effect and the allotment falls within saved actions). Ratio vs. Obiter: Ratio - a person whose land has vested in the acquiring authority has no absolute right to restoration; any re-allotment must comply with the statutory disposal rules then in force. Obiter - ancillary policy observations about public auction maximizing public benefit. Conclusion: The plaintiff could not claim a right to compulsory restoration/re-allotment of the remaining area except in accordance with the statutory rules applicable at the time the Trust finally disposed of the land. Issue 2 - Effect of subsequent statutory rules (1983 Rules) on pending/provisional allotments (legal framework) Legal framework: Statutory rules governing disposal of Trust land set out the permissible modes of transfer and the conditions to be met. Where rules are amended, applications or proposals pending at the time of amendment are to be disposed of according to the rules in force at the time of disposal unless there is a vested right or explicit saving. Precedent treatment: The Court applied and followed precedent holding that applications for grants/renewals pending when rules are amended must be disposed of under the rules prevailing at the time of disposal (citing the decision concerning Rule 8C and applications for leases). Earlier decisions emphasizing lack of vested rights in applicants for leases or allotments were followed. Interpretation and reasoning: The Board's 1968 resolution and the 1975 communications constituted a decision in principle, but the execution of a final allotment/lease in respect of the entire area did not occur prior to the effective date of the 1983 Rules. The allotment of 24 acres was finalized pre-1983, but the remaining 20.61 acres was not finally allotted before 18.05.1983. Therefore, any disposal of the balance had to conform to Rule 5(2) of the 1983 Rules which prescribes specific modes (auction, tenders, offers to governmental/public bodies, public advertisement etc.). The 1983 Rules substantially changed and restricted the modes of disposal available under the prior Rules and thus governed the ultimate fate of pending requests for allotment. Ratio vs. Obiter: Ratio - pending applications for allotment which are not finally concluded before the effective date of new disposal rules must be dealt with under those new rules; the prior in-principle decision does not create a vested entitlement to deviation from the new statutory modes of disposal. Obiter - commentary that statutory changes reflect policy choices favouring public disposal mechanisms. Conclusion: The 1983 Rules applied to the disposal of the unallotted 20.61 acres and precluded a private re-allotment except by compliance with the modes specified in the 1983 Rules; the trial court's decree directing a lease in contravention of those Rules could not stand. Issue 3 - Whether earlier communications/resolutions created an indefeasible entitlement enforceable after 1983 (legal framework) Legal framework: An in-principle decision or conditional offer does not necessarily give rise to a vested right enforceable against a statutory authority; finality of allotment and completion of requisite formalities are critical to creation of enforceable proprietary rights. Precedent treatment: Followed authority that no vested right arises merely from an application or pending proposal; the absence of a completed grant or lease before rule change negates a claim to immunity from later rule changes. Interpretation and reasoning: The 16.10.1975 communication set out terms and required deposit and signing of terms as prerequisites. The plaintiff repeatedly sought modification of the premium and did not accept terms; thereafter the Trust allotted only 24 acres by communication dated 09.06.1982 and possession of 24 acres was given. Thus there was never a firm, unconditional allotment of the entire 44.61 acres prior to the 1983 Rules; the plaintiff's own conduct (seeking reduction) and absence of completed formalities meant no indefeasible right vested in her to compel allotment of the remaining area outside the statutory disposal procedure applicable at the time of final disposal. Ratio vs. Obiter: Ratio - conditional/provisional communications do not confer a vested proprietary right where conditions precedent remain unfulfilled and statutory procedure governs ultimate disposal. Obiter - reflections on applicant's responsibility to accept terms to secure allotment. Conclusion: The earlier communications and in-principle decision did not create an enforceable right to the entire 44.61 acres after 1983; only the 24 acres for which allotment and possession were completed fell within pre-1983 finality. Issue 4 - Jurisdiction to raise limitation at first appellate stage (legal framework) Legal framework: Section 3 of the Limitation Act bars suits instituted after the prescribed period even if limitation is not pleaded. A plea of limitation affects jurisdiction; appellate or revisional courts may entertain and decide limitation even if not framed as an issue at trial where the question relates to jurisdiction. Precedent treatment: The Court relied on authoritative treatment establishing that limitation is a question of law affecting jurisdiction and may be considered by higher courts notwithstanding its omission as a trial issue. The cited precedent was followed. Interpretation and reasoning: The appellate court was thus competent to consider limitation even though the trial court did not frame an issue on it. However, the Court did not finally decide limitation here because dismissal on substantive statutory noncompliance (failure to follow 1983 Rules) rendered determination of limitation unnecessary for disposal of the appeal. Ratio vs. Obiter: Ratio - appellate/revisional courts may raise and decide limitation because limitation is jurisdictional; Obiter - the Court's observation that it need not decide limitation given the substantive ground for dismissal. Conclusion: The first appellate court acted within jurisdiction in considering limitation; nonetheless, the appeal was disposed on the statutory-rules ground without adjudicating the limitation question. Final Disposition (consolidated conclusion) The decree of the trial court directing allotment/lease of the remaining 20.61 acres contrary to the statutory disposal procedure enacted by the 1983 Rules could not stand. The appeal is allowed, the High Court's order restoring the trial decree is set aside, and the suit for mandatory relief of allotment of the balance land is dismissed because any further disposal had to comply with the 1983 Rules and no vested right to the unallotted portion had crystallized prior to the new Rules.