Holding

The Supreme Court held that compensation must be paid for land within the ceiling limit after the ceiling authorities determine the surplus, and that surplus land compensation is governed by the ceiling legislation, rendering the High Court's direction to pay compensation irrespective of pending ceiling cases unjustified.

Summary

The State of Rajasthan acquired about 1800 acres of land for defence purposes under the Rajasthan Land Acquisition Act, 1953. The Land Acquisition Officer (LAO) could not determine the compensation because portions of the land were in excess of limits prescribed by the Rajasthan Tenancy Act, 1955 and the Rajasthan Imposition of Ceiling on Agricultural Holdings Act, 1973, and the related ceiling proceedings were pending before the courts. The LAO therefore deferred payment of compensation, a decision that was challenged by the landowners. The Rajasthan High Court directed the LAO to pay compensation irrespective of the pending ceiling cases. On appeal, the Supreme Court held that the LAO could not defer payment but that compensation could be paid only for the portion of land within the ceiling limit after the ceiling authorities determine the surplus; surplus land compensation is governed by the ceiling legislation, not the acquisition act. The Court directed the ceiling authorities to act expeditiously and the LAO to pay the determined compensation within two months. The appeals were dismissed and the matter was disposed of without costs.

Issues considered

Whether the Land Acquisition Officer can defer payment of compensation pending the resolution of ceiling law proceedings.
Whether compensation for surplus land vested in the State under ceiling legislation is payable under the Land Acquisition Act.
What procedure should be followed to determine the extent of land subject to compensation when ceiling limits are in dispute.

Legislation cited

Rajasthan General Clauses Acts. 6
Rajasthan Imposition of Ceiling on Agricultural Holdings Act, 1973
Rajasthan Land Acquisition Act, 1953s. 11, s. 30, s. 4, s. 6
Rajasthan Tenancy Act, 1955s. 30-E

Subjects

land acquisitioncompensationceiling lawsurplus landRajasthandefence acquisitionpending litigationstatutory interpretation

Judgment

A STATE OF RAJASTHAN AND ORS.
~

v.
SARDAR PUSHPENDRA SINGH AND ORS.

APRIL 27, 1994

B [K. RAMASWAMY AND N. VENKATACHALA, JJ.]

Rajasthan Land Acquisition Act, 1953-Section +-Acquisition of ..
land-Determination of Compensati01t-Land owners governed by Land Ceil-
ing Laws-Ceiling proceedings pending in courts-Payment of compensation
c made subject to decision in ceiling cases-Direction issued to Ceiling
Authorities to take immediate action-LA 0 to work out amount of compen-
sation and make payment expeditiously.

By a notification issued u/s 4 of the Rajasthan Land Acquisition Act,
1953, land was acquired for defence purposes. While the Land Acquisition
D Officer determined the amount of compensation payable for the acquired
lands, it was observed that the ceiling proceedings were since pending
either in the High Court or in the Supreme Court, it was not possible to
decide the amounts of compensation payable to the respondents, since the
surplus lands were yet to be identified. Some of the areas were in excess
E of ceiling area under the Rajasthan Tenancy Act, 1955 and the Rajasthan
Imposition of Ceiling on Agricultural Holdings Act, 1973. The notification
therunder was published on April 1, 1966 u/s 30-E of 1955 Act. Thereby the
surplus land under the Acts stood vested in the State w.e.f. April 1, 1966.
But the actual extent of the lands which the respondents were entitled to
retain and which they had to surrender as surplus, was pending in the
F courts. Therefore, the LAO stated in the award that the payment of
compensation would be made to such land owners who were not affected "-
by the Ceiling Law prevailing in the State of Rajasthan.

Challenging this part of Award, the land owners filed writ petitions.
Allowing the petitions, High Court held that the Land Acquisition Officer
G
could not have deferred the payment of compensation till the ceiling cases
were decided. The LAO was directed to make payment of the amount of
compensation determined u/s 11 of the Land Acquisition Act to each of the
petitionets who might be entitled for the same under the award.
•
H These appeals were filed against the.judgment of the High Court.
780
STATEOFRAIASTHAN v. S.P.SINGH 781

Allowing the appeals, this Court A
HELD : l.l. In the instant case since the land owners were governed
by the Ceiling laws and as the ceiling proceedings were pending in the
Courts, the LAO while making the award, could not decide to which extent
or the land he could make the award for the payment or compensation. He,
therefore, stated that such payment would be subject to the decision by the B
High Court or this court in the ceiling cases. It is informed that this Court
had already disposed or the cases of the respondents under ceiling law and
so the matter, had to, necessarily go back to the ceiling authorities to
determine the excess area which the land owners were liable to surrender
after opting to retain the labd within ceiling limit for which they would be c
entitled to obtain payment of compensation under the Land Acquisition
Act. Until that was determined, the question of payment of compensation
would remain uncertain and in a nabulous state. Considering from this
perspective, the High Court was not justified in giving the impugned
directions. [783-E-G]
D
1.2. The Ceiling Authorities are directed to take immediate action
under the Ceiling law; give notices to the land owners, calling upon them
to exercise their option of retaining the land within the ceiling limit and
to surrender the lands in excess of ceiling areas. To the extent of surplus
lands, the need to make payment of their market value under the Rajas- E
than Land Acquisition Act does not arise. The amount payable for such
surplus land would be as was perscribed under the Land Ceiling Act. If
the ceiling authorities had already done this exercise, then the need to
make fresh determination does not arise. [784-A-B)

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.1760-82 F
of 1988.

From the Judgment and Order dated 17.9.87 of the Rajasthan High
Court in D.B.C.W.P. Nos. 65, 53, 55, 60, 66, 69, 70, 71, 74, ·75, 76, 54, 67,
68, 78, 56, 72, 59, 51, 52, 73 & 77 of 1982.
G
Aruneshwar Gupta for the Appellants.

A.K. Sen, K.B. Rohatgi and Ms. Aparna Rohatgi for the Respon-
dents.

The following Order of the Court was delivered : H
782 SUPREME COURT REPORTS j 1994] 3 S.C.R.

A In December 1971, an extent of 2519 Bighas 03 Bis\vas, equivalent to
1801-1875 acres of land comprised in Chak Nos. 2Z and 3Z, situated in
Sriganganagar, Stale of Rajasthan, it is said, \Vere required for defence
purposes. Possession of the said land appears to have been taken thcre-
Jfter, even \Vithout issuance of a formal notification of requisition. Ho\v-
evcr, by a notification issued under s.4 of the Rajasthan Land Acquisition
B Act, 1953, for short 'the Act' and published in the State Gazette on July
21, 1978, the self-same land has been proposed for acquisition. That has
been followed by the declaration made under s.6 thereof on August 23,
1979. While the Land Acquisition Officer (the LAO) determined the
amount of compensation payable for the acquired lands, by his Award
dated March 31, 1980, observed in para 20 thereof, that the ceiling
c proceedings were since pending either in the High Court or in this Court,
it was not possible to decide the amounts of compensation payable to
respondents, in that, what were the surplus lands were yet to be identified.
Admittedly some of the areas in Chak Nos. 2Z and 3Z were in excess of
ceiling areas under the Rajasthan Tenancy Act, 1955 and the Rajasthan
D Imposition of Ceiling on Agriculatural Holdings Act, 1973. The Act had
come into force on January 1, 1973 and the notification thereunder was
published on April 1, 1966 under s.30-E of 1955 Act. Thereby the surplus
land under the Acts stood vested in the State with effect from April 1, 1966.
But the actual extents of the lands which the respondents were entitled to
retain and which they had to surrender as surplus, was pending in the
E courts due to stay orders granted either by the High Court or this Court
and the cases could not be settled. It is why, the LAO had stated in para
20 of the award that the payment of compensation would be made to such
land owners who are not affected by the Ceiling Law prevailing in the State
of Rajasthan.
F
Challenging this part of Award in para 20, the land owners filed writ
petitions in the High Court. By a common judgment, the division bench of
Rajasthan High Court at Jaipur in W.P. No.65/82 and batch, dated Sep-
tember 17, 1987 directed thus:

G "Consequently, we allow all the writ petitions and hold that the
Land Acquisition Officer could not have deferred the payment of
compensation till the ceiling cases, if any, of any of the petitioners
are decided. We direct the Land Acquisition Officer to make
payment of the amount of compensation determined under Sec.
H 11 of the Act to each of the petitioners who may be entitled fqr
-,'(
'

STATEOFRAJASTI!AN v. S.P.SINGH 783

;.;:, the same under the award. Because the ceiling cases are pending, A
we leave it open to the competent authority to make any order in
respect of the amount of compenstation and for that purpose we
make a further order that to enable the State to secure any order
from the competent authority against payment to the petitioners,
the amount of compensation shall not be paid within a period of
two months only .11
B

... The present appeals have been filed against the abovequoted direction of
the High Court.

It was held by a constitution bench of this court in Bansidhar & Ors.
v. State of Rajasthan & Ors. [1989] 2 SCR 152, that the effect of operation
c
of s.6 of the Rajasthan General Clauses Act read with s.30-E of the 1955
Act, is that the rights and obligations needed to be determined was with
reference to the notified date i.e. 1.4.1966. So the right of the State to take
over surplus land arose as on the appointed date, and only the quantifica-
tion remained to be worked out. The liability of the land owner to sur- D
render the surplus land as on 1.4.1966 was a liability "incurred" within the
meaning of the said provision. Accordingly it was held that the determina-
tion of the surplus land dates back to 1.4.1966, the date on which the
' .
notification was issued, and the surplus land stood vested in the State on
and w.e.f. 1.4.1966.
E
Since the respondents, land owners, are governed by the Ceiling laws
and as the ceiling proceedings are pending in the courts, the LAO while
making the award, could not decide as to which extent of the land he could
make the award for the payment of compensation. He, therefore, stated
that such payment would be subject to the decision by the High Court or
this court in the ceiling cases. We are informed that this Court had already F
disposed of the cases of the respondents under the ceiling law and so the
matter, has to, necessarily go back to the ceiling authorities to determine
the excess area which the land owners are liable to surrender after opting
· to ret<1in l he land within ceiling limit for which they would he entitled to
obtain payment of compensation under the Land Acquisition Act. Until G
that is determined, the question of payment of compensation would remain
uncertain and in a nebulous state. Considering from this perspective, we
think that the High Court was not justified in giving the impugned direc-
tions extracted hereinbefore.
• '
Instead, and on the facts and in the circumstances of this case, the H
784 SUPREME COURT REPORTS (1994] 3 S.C.R.

A appropriate course to be adopted would be, that a direction should be
issued and accordingly issued to the Ceiling Authorities to take immediate
action under the Ceiling Law; give notices to the land owners, calling upon
them to exercise their option of retaining the land within the ceiling limit
and to surrender the lands in excess of ceiling areas. To the extent of
surplus lands, the need to make payment of their market value under the
B Rajasthan Land Acquisition Act does not arise. That the amount payable
for such surplus land would be as is prescribed under the Land Ceiling
Act. If the ceiling authorities had already done this exercise, then the need
to make fresh determination does not arise. In case, it was not done, it
should be done within a period of six months from the date of the receipt
c of this order. This order should be communicated to the ceiling authorities
to take expeditious action in this behalf. After this exercise is done, in case
it has not already been done, the matter should be reported to the Land
Acquisition Officer. The LAO in turn should work out the amount of
compensation payable to the owners to the extent of the land within the
D ceiling area and make. payment of compensation under the Act to them
expeditiously. In case there is any dispute as to the person who is entitled
to receive the compensation, then recourse could be had to s.30 of the Act.
In cases where there is no dispute, then the compensation determined
under his Award should be paid lo the land owners within a period of two
months from the date of receipt of the proceedings form the land ceiling
E authorities.

The appeals are accordingly disposed of. No costs.

A.G. Appeals disposed of.