applications were required to be disposed of on the basis of the Rules in force at the time of the disposal of the applications. = 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.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 10853 of 2018
(arising out of SLP (C) No.18959 /2017)
NAGPUR IMPROVEMENT TRUST …APPELLANT(S)
VERSUS
SHEELA RAMCHANDRA TIKHE ..RESPONDENT(S)
J U D G M E N T
ASHOK BHUSHAN,J.
Leave granted.
2. This appeal has been filed by Nagpur Improvement
Trust, challenging the judgment dated 14.03.2017 of High
Court of Judicature Bombay at Nagpur in Second Appeal
No. 122 of 2015, by which judgment the Second Appeal
filed by the respondent has been allowed by setting
aside the judgment of lower appellate court and
restoring the judgment of trial court decreeing the
suit.
3. Brief facts of the case necessary to be noted for
deciding this appeal are:­
2
The Nagpur Improvement Trust, the appellant has
been constituted under the Nagpur Improvement Trust
Act, 1936. For the purposes of Drainage and
Sewerage Scheme Part­II, notification under Section
39 of the Nagpur Improvement Trust Act, 1936 was
issued on 27.11.1953 for acquiring 44.61 acres of
land of the respondent. An award was passed on
31.12.1962 determining the compensation of
Rs.23,500/­ on the basis of compromise, which
compensation amount was paid to the respondent and
possession was taken over by the appellant of the
land. On taking up the possession, the land vested
in the appellant, which became the absolute owner.
A statutory rule namely, Nagpur Improvement Trust
Land Disposal Rules, 1955 was framed in exercise of
power under Nagpur Improvement Trust Act, 1936 for
disposal of land by the Nagpur Improvement Trust.
As per Rule 3 of the Statutory Rules, 1955, one of
the mode of transfer of trust land was by direct
negotiation with the party. With regard to land
admeasuring 44.61 acres as noted above, a policy
3
decision was taken by the Board of the Trust dated
03.05.1968 for disposal of land to the owners on
lease by charging the determined premium and the
ground rent. The appellant accordingly invited
application for re­allotment of the land on lease.
The respondent filed an application dated 03.09.1975
for re­allotment of entire 44.61 acres of land. A
decision dated 06.10.1975 was taken to re­allot the
44.61 acres to the respondent on the terms and
conditions stipulated in the Board Resolution dated
03.05.1968. By letter dated 16.10.1975, the
appellant informed the respondent in reference to
her application dated 03.09.1975 that land acquired
by the Trust may be allotted to her on the terms and
conditions as mentioned in the letter. The letter
dated 16.10.1975 communicated that amount of
consideration for allotment would be 1.5 times of
the amount received by them from the Land
Acquisition Officer. The lessee can use the land
only for Agriculture purposes and the amount of
consideration will have to be made in maximum 10
4
installments. The respondent was required to
deposit amount of Rs.3,525/­ towards first
installment and sign the form of terms and
conditions of the allotment, only after that the
Trust would be able to take further action in the
matter.
The respondent in reply to the aforesaid letter
wrote back to the appellant on 01.11.1975 requesting
to revise the amount of premium payable by her. The
respondent wrote further letters, lastly on
02.03.1982, again reiterating her request to reduce
the amount. It was further requested that she
should be given the land measuring 44.61 acres at
the cost of acquisition only. The letter dated
02.03.1982 was replied by the appellant vide letter
dated 09.06.1982 allocating land measuring 24 acres
out of 44.61 acres. The revised premium for
allotment of 24 acres was fixed as Rs.19,230/­ and
first installment of 10% was requested to be paid
immediately and to further accept terms and
conditions of allotment. The respondent acknowledged
5
the allotment letter dated 09.06.1982 and
communicated her acceptance on 15.06.1982. The
respondent accepted the allotment on revised
premium. In pursuance of the acceptance of
allotment letter dated 09.06.1982 allotting 24 acres
of land on terms and conditions mentioned therein,
the possession of 24 acres of land was also handed
over to the respondent on 11.11.1982. The respondent
after taking possession of 24 acres of land again
wrote a letter dated 17.06.1983 thanking the
appellant for allotment of 24 acres of land and
further requesting to release remaining 20.61 acres
of land. The appellant wrote on 31.12.1986 to the
respondent to pay Rs.4514.95 due from her. The
respondent thereafter sent various representations
for allotment of remaining 20.61 acres of land. On
09.02.1989, a lease was executed by the appellant in
favour of respondent for 24 acres of land as was
allotted by allotment letter dated 09.06.1982. The
respondent filed a suit – Regular Civil Suit No.
2515 of 1989 against the Nagpur Improvement Trust,
6
praying for following reliefs:­
(a) Declare that the plaintiff is entitled to
re­allotment of 20.61 acres of her land to
her to the exclusion of anybody else as
the acquisition of the plaintiff’s land
for the purpose of defendant’s scheme is
not required by the defendant for its
scheme.
(b) Issue a mandatory injunction directing the
defendant to re­allot 20.61 acres of land
out of survey no.9/1, 11 and 9/2 of Mouza
Godani, Umrer Road, Nagpur, to the
plaintiff and execute a lease indenture
accordingly in favour of the plaintiff.
(c) Issue mandatory injunction directing the
defendant to make the offer of her land
admeasuring 20.61 acres of suit land
S/Nos.9/1, 11, 9/2 of Mouza Gondhani,
Umrer Road, Nagpur to the plaintiffs land
is not required by the defendant for its
scheme and the defendant a permanently
7
restrained from making offer of plaintiffs
remaining suit land to anybody else in any
manner and under any pretext.
(d) Declare that the plaintiffs suit land i.e.
20.6 acres of land in Survey Nos. 9/1, 11,
9/2 of Mouza Godhani, Umrer Road, Nagpur,
has been unnecessarily acquired with
malafide intention and that it was never
required and needed by the defendant for
its drainage and Sewerage Disposal Scheme
Part­II as firstly notified on 27.11.1983,
as per award dated 31.12.1962.
(e) Saddle the costs of the suit on the
defendant and
(f) Grant any other relief which this Hon’ble
Court deems fit in the facts and
circumstances of the case.
The trial court framed following issues:­
1) Does the plaintiff prove by abuse of
process of law, malafidely and under
colorabale exercise of power that
defendant has unnecessarily acquired her
8
land?
2) Does she further prove that she has the
preferential right to get reallotment of
remaining 20.61 acres of land?
3) Does she further prove that she had
deposited Rs.4515.95 for allotment of
remaining 20.61 acres of land?
4) Does she further prove that defendant is
avoiding to re­allot her remaining 20.61
acres of land?
5) Whether plaintiff is entitled to get
relief as prayed?
6) What order and decree?
The trial court held that Issue No. 1 does not
survive. Issue No.3 was decided against the
plaintiff, however, trial court answered the Issue
Nos. 2, 4 and 5 in favour of the plaintiff and
decreed the suit holding that plaintiff is entitled
for allotment of remaining 20.61 acres of land.
Plaintiff was directed to deposit remaining premium
amount of Rs.16,295/­ along with 10% p.a. interest
and the appellant was directed to execute the leasedeed
of land admeasuring 20.61 acres in favour of
9
the respondent.
The appellant aggrieved by the judgment and
decree of the trial court filed a Regular Civil
Appeal No. 632 of 2007. The District Judge, Nagpur
formulated following points for consideration:­
1) Whether respondent­plaintiff is entitled to
allotment of the suit land?
2) Is the suit barred by time?
3) Is the judgment and decree impugned herein
call for interference?
4) What order?
The learned District Judge held that plaintiff
was not entitled for allotment. The District Judge
further held that suit filed by the plaintiff was
virtually a suit for specific performance of the
letter of allotment dated 16.10.1975 and suit having
been filed beyond a period of 3 years is barred by
time. The District Judge vide judgment dated
26.08.2014 allowed the appeal, set aside the decree
of the trial court and dismissed the suit. Against
the judgment of the Appellate Court, second appeal
10
was filed by the respondent before the High Court.
The High Court framed following two substantial
questions of law in the appeal:­
(1) Whether the lower appellate Court erred in
applying and relying on the Nagpur
Improvement Trust Land Disposal Rules,
1983, when in fact what was sought to be
enforced by the appellant was the order
dated 16.10.1975 in consonance with
letter/order dated 06.10.1975 passed in
terms of Board Resolution dated
03.05.1968, i.e. decision taken by the
respondent much prior to the framing of
Rules of 1983?
(2) Once the Nagpur Improvement Trust, the
acquiring body chooses to re­allot the
land acquired, whether such action of reallotment
can be enforced in the Court of
Law?
The High Court held that plaintiff was entitled
for allotment of 20.61 acres of land in view of
11
resolution of the Board dated 03.05.1968. The High
Court also held that the Rules namely Nagpur
Improvement Trust Land Disposal Rules, 1983 having
came into force on 18.05.1983 was not applicable to
the Board Resolution dated 03.05.1968 and the
decision taken on 06.10.1975 and 16.10.1975. The
High Court further held that trial court having not
framed any issues regarding limitation, the first
appellate Court committed error in holding that the
suit was barred by limitation, consequently, the
second appeal has been allowed by the High Court,
restoring the judgment and decree of the trial
court. The Nagpur Improvement Trust being aggrieved
by the judgment of the High Court has come up in
this appeal.
4. We have heard Shri Shyam Divan, learned senior
counsel and Shri Huzefa Ahmadi, learned senior counsel
for the appellant. We have also heard Shri Mukul
Rohtagi, learned senior counsel, who has appeared for
the respondent.
5. Learned counsel for the appellant submitted that
12
suit filed by the plaintiff was barred by limitation.
The appellant had claimed re­allotment of 44.61 acres of
land as per Resolution of the Board dated 03.05.1968.
The Board having taken a decision to allot only 24 acres
of land, which was communicated by letter dated
09.06.1982, the cause of action with regard to 20.61
acres of land arose on the said very date and suit
having been filed in the year 1989 is barred by time.
It is further submitted that after enforcement of Rules,
1983, Rule 5 provided for manner of disposal of land and
there being no statutory provision for re­allotment of
land to the land owner from whom land was acquired, the
suit filed by the plaintiff for claiming re­allotment
could not have been decreed. Earlier Rules, 1955, which
permitted allotment by direct negotiations having been
rescinded and statutory Rules, 1983 created a
prohibition for allotment of any land of the Trust
except as Rule 5(2), the claim of the plaintiff was
liable to be dismissed and the trial court committed
error in decreeing the suit. It is further submitted
that even the Rules 1955, Rule 3(a), which provided for
13
allotment of land by direct negotiations was struck down
by a Division Bench of the Bombay High Court vide its
judgment dated 7/20.09.2004 Transport Nagar Free Zone
Co­operative Society Limited Vs. Nagpur Improvement
Trust, 2005(3) Bom.C.R.485. The plaintiff could not have
relied on Rules, 1955 claiming allotment. The High Court
committed error in observing that First Appellate Court
erred in considering the question of limitation when no
issue was framed by the trial court. It is submitted
that suit having been barred by limitation, the
Appellate Court was well within its jurisdiction to
enter into the issue of limitation and hold that the
suit was barred by time. The suit filed in the year
1989 was clearly barred by time and was rightly
dismissed by the First Appellate Court. The High Court
committed error in holding that Statutory Rules, 1983
were not applicable.
6. Shri Mukul Rohatgi, learned senior counsel refuting
the submission of counsel for the appellant contends
that plaintiff was clearly entitled for allotment of
20.61 acres of balance area of land as was already
14
allotted by letter dated 16.10.1975. The allotment of
land to the plaintiff was under Rule 5 of Rules, 1955.
Hence, Division Bench judgment relied by the appellant
in Transport Nagar Free Zone Co­operative Society
Limited (supra) is not applicable. The resolution having
been passed by the Board to re­allot area acquired from
plaintiff, it was no longer a matter of contract. The
letter dated 09.06.1982 allotting 24 acres of land
cannot be said to be letter denying allotment of 44.61
acres, hence no cause of action arose to the plaintiff
in the year 1982 and first time cause of action arose in
the year 1989 when lease­deed was executed. Hence, the
suit of the plaintiff was not barred by limitation. The
suit of the plaintiff was filed under Section 39 of the
Specific Relief Act, 1963 by which plaintiff was
enforcing her entitlement.
7. Learned counsel for the respondent further contends
that present is not a case where this Court may exercise
its jurisdiction under Article 136 of the Constitution
of India by interfering in the judgment of the High
Court. The total area of land was 44.61 acres which was
15
owned by the plaintiff and was acquired and Trust having
taken a decision to return the land to land owner since
it was no longer required for the scheme, the plaintiff
has every right to receive acquired area of 44.61 acres
and no error has been committed by the trial court in
decreeing the suit.
8. We have considered the submissions of the learned
counsel for the parties and perused the records.
9. The principal issue which needs to be decided is as
to whether trial court was right in holding that
plaintiff was entitled for allotment of 20.61 acres of
land for which decree was granted. From the facts
noticed above, there is no dispute between the parties
that in pursuance of resolution dated 03.05.1968 of the
Board, plaintiff had made an application on 03.09.1975
for allotment of entire 44.61 acres of land and a letter
of allotment dated 16.10.1975 for 44.61 acres of land
was issued. The allotment letter dated 16.10.1975
contains certain conditions. It is useful to extract the
communication dated 16.10.1975 which is to the following
effect:
16
“With reference to the above application
letter this is to inform you that under the
drainage and sewage disposal scheme allotment
of 44.61 acres land in Khasra NO.9­1,9­2 and
11 out of excess land acquired by the Trust
may be allotted to you on the terms and
conditions as mentioned in lease deed
subjected to using it only for agricultural
purpose.
1. The amount of consideration for the above
land would be 1.50 times of the amount
received from Land Acquisition Officer.
2. The allotment from the Trust Layout would
be done on the basis of lease for which
Land Rent of 2% of the value of
consideration will have to be paid.
3. The lessee can use the said land only for
agricultural purpose. For irrigating the
land the water of sewage flow would be
provided by Nagpur Improvement Trust
and/or Nagpur Municipal Corporation as
per the rate fixed up by Nagpur Municipal
Corporation whenever possible.
4. The amount of consideration will have to
be made in maximum 10 instalments and on
the remaining unpaid amount of the
consideration interest would be charged
at the rate of 10% p.a.
Hence you are required to deposit amount of
Rs.3,525/­ towards first instalment of the
consideration in this office at the earliest
and sign the form of terms and conditions of
the allotment. Only after that the Trust
would be able to take further action in the
matter which please note.”
17
10. On receipt of letter dated 16.10.1975 appellant
requested for reduction of proportionate value of the
premium from the total amount and further wrote on
02.03.1982 to the Trust wherein rate of 1.5 times of the
amount of compensation was asked to be reduced. In the
letter dated 02.03.1982 following request was made by
the plaintiff:
“Considering all the situation stated
above, how can I give you more amount as cost
of field which you acquired I would like to
request you to give the same at the cost of
acquisition only. Further terms are
acceptable to me, at any time.
If you do not consider my above request,
I will have to move the Govt. for shelter.”
11. After receipt of the letter dated 02.03.1982 the
Trust by letter dated 09.06.1982 made allotment of 24
acres out of 44.61 acres of land to the following
effect:
“With reference to your application mentioned
above this is to inform that the Chairman is
pleased to consider your request for
allotment of land measuring about 24 acres
out of 44.61 acres of land acquired under
drainage and sewerage disposal scheme on the
same terms and conditions informed to you
vide No.ES/7821 dated 16.10.1975. The revised
premium for allotment of 24 acres would be
18
about Rs.19.230/­ and you will have to pay 1st
installment 10% of the premium immediately
and accept the terms and conditions for
allotment and sign necessary lease indenture
etc.”
12. The possession of 24 acres of land was also handed
over to the respondent on 11.11.1982. The plaintiff thus
was well aware that her request for allotment of entire
44.61 acres was not acceded to and only 24 acres have
been allotted. Subsequent execution of the lease dated
09.02.1989 was in continuation of the allotment dated
09.06.1982.
13. As noted above the allotment of land of the Trust
was subject to statutory Rules, namely, Nagpur
Improvement Trust Land Disposal Rules, 1955. Rule 3 of
the Rules provides as follows:
“Rule 3. The transfer of Trust land shall be­
(a) by direct negotiation with the party; or
(b) by public auction; or
(c) by inviting tenders; pr
(d) by concessional rated.”
14. Rule 5 of the 1955 Rules which has also been
referred is as follows:
19
“Rule 5. The Trust may lease out on
concessional rates any Trust land to any (i)
Public institution or body registered under
any law for the time being in force or to
(ii) the evictees (which means persons whose
lands in some locality have been compulsorily
acquired by the Trust and includes tenants in
occupation of such lands) which vests or is
to vest in the Trust, or to (iii) the poor
persons residing within the limits of the
Nagpur Corporation who have no house of their
own within the limits either individually or
as a member of a joint family and whose
annual income from all sources either
individually or of the joint family, as the
case may be does not exceed Rs.1,800/­ per
annum.”
15. The Resolution dated 03.05.1968 was passed by the
Board for disposal of surplus land acquired for the
drainage and sewage disposal scheme, during the period
of enforcement of 1955 Rules. The allotment letter dated
16.10.1975 to the plaintiff of 44.61 acres of land was
in furtherance of Resolution dated 03.05.1968. The
plaintiff after receipt of the letter dated 16.10.1975
prayed for reduction of amount of premium demanded,
several letters were written by the plaintiff regarding
premium and allotment, last being letter dated
02.03.1982 as extracted above, in which the plaintiff
herself was not ready to accept the terms as
20
communicated by letter dated 16.10.1975. The Trust on
09.06.1982, thus, has alloted only 24 acres out of 44.61
acres of land. The facts of the case and correspondence
as noticed above clearly indicate that at no point of
time allotment of 44.61 acres was made in favour of the
plaintiff. The decision to allot 44.61 acres was
communicated on 16.10.1975 on terms and conditions
mentioned therein. The plaintiff having expressed
certain reservation with the conditions and asked for
relaxation of conditions and the Trust after taking into
consideration the entire facts and circumstances took a
decision to allot only 24 acres of land out of 44.61
acres on 09.06.1982, there was never any firm allotment
of 44.61 acres of land to the plaintiff giving any
indefeasible right of allotment of 44.61 acres of land
and the plaintiff herself has to be blamed for not
getting allotment of entire 44.61 acres of land on
account of she having raised request for the reduction
of the premium and she having not communicated her
consent to accede to the terms and conditions of
allotment as proposed by the Trust.
21
16. After the allotment of 24 acres of land on
09.06.1982, a new set of Rules for disposal of land of
Nagpur Improvement Trust was framed, namely, Nagpur
Improvement Trust Land Disposal Rules, 1983 which came
into force w.e.f. 18.05.1983. Part III of the Rules
dealt with manner of disposal of land. Rule 5(1) & (2)
which are relevant for the present case are as follows:
“Rule 5. General.­ (1) No piece of Government
land vested in or managed by the Trust shall
be transferred except with the general or
special sanction of the Government given in
that behalf.
(2) Except as otherwise provided in sub­rule
(1) and in Part VI of these rules, all other
lands vested in and acquired by the Trust
shall be disposed of by the Trust by ­
(i) holding public auction; or
(ii) inviting tenders by public
advertisement; or
(iii) 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;
(iv) inviting applications from persons
or bodies of persons who are eligible for
allotment of plots under rule 4, by
public advertisement to be published at
22
least in one leading local news paper
each in Marathi, Hindi and English on the
basis of predetermined premium or other
considerations or both and deciding these
applications by drawing lots, if
necessary, as it may determine, from time
to time in accordance with the rules
hereinafter appearing.
(v) 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 may be transferred to
the Corporation of the City of Nagpur,
either free of premium and ground rent or
at nominal premium and ground rent as the
Trust may determine in each case.”
17. The present is a case where for the disposal of the
land in question Rule 5(2) became applicable from
18.05.1983. The earlier Resolution of the Board dated
03.05.1968 would no longer have been availed after the
enforcement of 1983 Rules for allotment of land. Sub
­rule (2) of Rule 5 which provides for no exception
except as otherwise provided in sub­rule (1) and Part VI
of these Rules. Sub­rule (1) of Rule 5 referred to
general or special sanction of the Government which is
not applicable in the present case. Part VI dealt with
grant of land for religious, educational, charitable and
23
public purposes which also is not applicable in the
facts of the present case. Hence, after the enforcement
of the Rules of land vested and acquired by the Trust
was to be disposed of only in the manner as indicated in
sub­rule (2) of Rule 5. Admittedly 24 acres out of 44.61
acres of land was already allotted to the plaintiff on
09.06.1982 and Trust has taken a decision not to allot
any further land in view of its subsequent decision
dated 24.04.1983 to keep the remaining 20.61 acres of
land for Department of Social Forest Trees for Central
Nursery and for Nursery of the Nagpur Improvement Trust
was taken by the Board. Thus, there was decision of
Trust to set apart land of 20.61 acres for Department of
Social Forest Trees for Central Nursery and for Nursery
of the Trust. After enforcement of Rules, 1983 which
were brought into force on 18.05.1983, 20.61 acres of
land could not be allotted to the plaintiff except by
following Rule 5 of the Rules, 1983. The First Appellate
Court has categorically made note of the Rules, 1983 and
held that the plaintiff was not entitled for any further
allotment. After referring to Rules, 1983 specifically
24
Rules 5, 4 and 23, the First Appellate Court in
paragraph 22 laid down following:
“22) In the present case, admittedly land
adm.24 acres was already allotted to the
respondent by the appellant before coming
into force of the Rules of 1983 and
therefore, the appellant is not even entitled
to claim 500 sq. meter of land. Except the
aforesaid provision there is no other
provision in these Rules empowering the Trust
to allot land to the respondent without the
sanction of State Government.”
18. Rules, 1983 were also relied by the appellant before
the High Court in the Second Appeal filed by the
plaintiff. The High Court held that Rules, 1983 had no
retrospective effect so as to nullify the actions taken
in accordance with the earlier Rules, hence, Rules,1983
were not relied. The High Court held that lower
Appellate Court committed error in relying on Rule 5 of
Rules, 1983. The High Court in paragraph 18 of the
judgment has held following:
“18. The lower Appellate Court has committed
an error in holding that the defendant­NIT
could not have disposed of the land in favour
of the appellant­plaintiff without there
being any authority of law. The reliance was
placed by the lower Appellate Court on the
provision of Rule 5 of the Nagpur Improvement
25
Trust Land Disposal Rules, 1982 to hold that
there was no compliance and the allotment was
not in conformity with it. In my view, such
reliance was misplaced. The reason being that
the said Rules wee brought in force on
18.05.1983 and the decision to re­allot 44.61
acres of land to the appellant­plaintiff was
taken on 6.10.1975 and 16.10.1975, i.e. prior
to coming into force of these Rules. The
Rules had no retrospective effect so as to
nullify the actions taken in accordance with
the earlier Rules prevailing. The substantial
question of law at serial No.(I) is,
therefore, answered accordingly.”
19. The High Court took the view that since the decision
to allot 44.61 acres of land was taken on 06.10.1975 and
16.10.1975 i.e. prior to Rules, 1983, the Rules had no
retrospective effect which shall not nullify the actions
taken in accordance with the earlier Rules then
prevailing. There is no question of nullifying the
decision taken on 06.10.1975 and 16.10.1975 which was
taken earlier to the subsequent Rules, 1983. In
pursuance of earlier decision i.e. taken on 06.10.1975
and 16.10.1975 the entire allotment which took place
prior to Rules, 1983 were completely saved but allotment
which could not culminate before enforcement of Rules,
1983, would not have been made after the enforcement of
26
Rules, 1983 except in accordance with Rules, 1983. We
have already noticed that the plaintiff was allotted
only 24 acres of land in pursuance of decision dated
06.10.1975 and 16.10.1975 and request of the plaintiff
to allot entire 44.61 acres of land was not acceded to
and only 24 acres of land was allotted possession of
which was handed over to the plaintiff on 11.11.1982.
There being no allotment of rest 20.61 acres of land
prior to 18.05.1983 on the basis of earlier decision no
allotment would have been made after the enforcement of
the Rules in disregard to the statutory Rules. The
statutory Rules enforced w.e.f 18.05.1983 substantially
changed the manner of allotment and more rigorous
conditions were put on the land of the Trust. There
cannot be any dispute with the proposition that after
the land is acquired for public purpose it vests in the
acquiring body and the land holder has no right to claim
the land acquired. In this context reference has been
made to State of Kerala and others vs. M. Bhaskar Pillai
and another, (1997) 5 SCC 432. In paragraph 4 following
has been laid down:
27
“4. In view of the admitted position that the
land in question was acquired under the Land
Acquisition Act, 1894 by operation of Section
16 of the Land Acquisition Act, it stood
vested in the State free from all
encumbrances. The question emerges: whether
the Government can assign the land to the
erstwhile owners? It is settled law that if
the land is acquired for a public purpose,
after the public purpose was achieved, the
rest of the land could be used for any other
public purpose. In case there is no other
public purpose for which the land is needed,
then instead of disposal by way of sale to
the erstwhile owner, the land should be put
to public auction and the amount fetched in
the public auction can be better utilised for
the public purpose envisaged in the Directive
Principles of the Constitution. In the
present case, what we find is that the
executive order is not in consonance with the
provision of the Act and is, therefore,
invalid. Under these circumstances, the
Division Bench is well justified in declaring
the executive order as invalid. Whatever
assignment is made, should be for a public
purpose. Otherwise, the land of the
Government should be sold only through the
public auctions so that the public also gets
benefited by getting higher value. ”
20. This Court again in Sulochana Chandrakant Galande
vs. Pune Municipal Transport and others, (2010) 8 SCC
467, held that after vesting of land in State free from
all encumbrances after acquisition, landowner becomes
persona non grata after vesting and has right to
28
compensation only and cannot claim right of restoration
of land on any ground, whatsoever. In paragraph 22
following has been laid down:
“22. In view of the above, the law can be
summarised that once the land is acquired, it
vests in the State free from all
encumbrances. It is not the concern of the
land owner how his land is used and whether
the land is being used for the purpose for
which it was acquired or for any other
purpose. He becomes persona non grata once
the land vests in the State. He has a right
to get compensation only for the same. The
person interested cannot claim the right of
restoration of land on any ground,
whatsoever. ”
21. The plaintiff’s case at the highest is that her
application for allotment of 20.61 acres of land was
pending consideration when Rules, 1983 were enforced.
The 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. Thus, 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
29
as per sub­Rule (2) of Rule 5 the land would have been
disposed of except as otherwise provided in sub­Rule (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. As
observed above the allotments which were finalised in
pursuance of Resolution dated 06.10.1975 and 16.10.1975
30
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. In this
context, reference is made to the judgment of this Court
in State of Tamil Nadu vs. M/s. Hind Stone and others,
(1981) 2 SCC 205. In that case, the applications by
various persons desirous of taking mining lease were
pending when the Rules for grant of lease were amended.
The Rules were amended on 02.12.1977 by introducing Rule
8­C, it was contended by several applicants that Rule
8­C was not applicable to the applicants whose
applications were pending. The relevant facts were
mentioned in paragraph 4 which are to the following
effect:
“4. Several persons who held leases for
quarrying black granite belonging to the
State Government and whose leases were about
to expire, applied to the Government of Tamil
Nadu for renewal of their leases. In some of
the cases applications were made long prior
to the date of G.O. Ms. No. 1312 by which
Rule 8C was introduced. Some applications
were made after Rule 8C came into force.
There were also some applications for the
grant of fresh leases for quarrying black
granite. All the applications were dealt with
after Rule 8C came into force and all of them
31
were rejected in view of Rule 8C Several Writ
Petitions were filed in the High Court
questioning the vires of Rule 8C on various
grounds. Apart from canvassing the vires of
Rule 8C, it was contended that Rule 8C did
not apply to grant of renewals of lease at
all. It was also argued that in any event, in
those cases in which the applications for
renewal had been made prior’ to the coming
into force of Rule 8C, their applications
should have been dealt with without reference
to Rule 8C. The Madras High Court while not
accepting some of the contentions raised on
behalf of the applicants, struck down Rule 8C
on the ground that it exceeded the rule
making power given to the State Government
under Section 15 which, it was said, was only
to regulate and not to prohibit the grant of
mining leases. As a consequence all the
applications were directed to be disposed of
without reference to Rule 8C. It was also
observed that even if Rule 8C was valid it
applied only to the grant of fresh leases and
not to renewals. It was also held that it was
not open to the Government to keep the
applications pending for a long time and then
to dispose them of on the basis of a rule
which had come into force later. The State
Government has come in appeal against the
judgment of the Madras High Court while the
respondent­applicants have tried to sustain
the judgment of the Madras High Court on
grounds which were decided against them by
the Madras High Court. ”
22. Rejecting the argument that Rule 8­C is not
attracted on the applications which were pending on date
of amendment, it was held that applications were
32
required to be disposed of on the basis of the Rules in
force at the time of the disposal of the applications.
Following was laid down in paragraph 13:
“13. Another submission of the learned
Counsel in connection with the consideration
of applications for renewal was that
applications made sixty days or more before
the date of G.O. Ms. No. 1312 (December 2,
1977) should be dealt with as if Rule 8C had
not come into force. It was also contended
that even applications for grant of leases
made long before the date of G.O. Ms. No.
1312 should be dealt with as if Rule 8C had
not come into force. The submission was that
it was not open to the Government to keep
applications for the grant of leases and
applications for renewal pending for a long
time and then to reject them on the basis of
Rule 8C notwithstanding the fact that the
applications had been made long prior to the
date on which Rule 8C came into force. While
it is true that such applications should be
dealt with within a reasonable time, it
cannot on that account be said that the right
to have an application disposed of in a
reasonable time clothes an applicant for a
lease with a right to have the application
disposed of on the basis of the rules in
force at the time of the making of the
application. No one has a vested right to the
grant or renewal of a lease and none can
claim a vested right to have an application
for the grant or renewal of a lease dealt
with in a particular way, by applying
particular provisions. In the absence of any
vested rights in anyone, an application for a
lease has necessarily to be dealt with
according to the rules in force on the date
33
of the disposal of the application despite
the fact that there is a long delay since the
making of the application. We are, therefore,
unable to accept the submission of the
learned Counsel that applications for the
grant or renewal of leases made long prior to
the date of G.O. Ms. No. 1312 should be dealt
with as if Rule 8­C did not exist. ”
23. We, thus, are of the considered opinion that 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.
24. It is also relevant to notice that lower Appellate
Court has held that suit of the plaintiff was barred by
time it having been filed more than three years after
the refusal to allot the land. The High Court has held
34
that the Appellate Court has committed error of law in
considering the issue of limitation which was not the
question raised before the trial court. In paragraph 17
of the judgment following has been held:
“17. Though the allotment of 44.61 acres of
land was on 16.10.1975, the lease­deed in
respect of 24 acres of land was executed on
09.02.1989. Thus, there was refusal on
09.02.1989 to execute the lease­deed in
respect of 20.61 acres of land. Hence, the
cause of action in terms of Article 54 of the
Limitation Act would start running from
09.02.1989 when the defendant­NIT refused to
execute the lease­deed. The suit in question
having filed on 15.12.1989 was not,
therefore, barred by the law of limitation.
In fact, this was not the question raised
before the trial court and no issue was
framed in respect of it. The lower Appellate
Court has committed an error of law in
considering such issue and holding that the
suit in question was barred by the law of
limitation. The finding of the lower
Appellant Court, therefore, needs to be set
aside.”
25. In so far as view of the High Court that Appellate
Court committed error in entertaining the question of
limitation which was not the issue framed by the trial
court, suffice is to refer the provision of Section 3
of the Limitation Act, 1963. Section 3(1) of the
35
Limitation Act provides as follows:
“Section 3. Bar of limitation.­(1) Subject to
the provisions contained in sections 4 to
24(inclusive), every suit instituted, appeal
preferred, and application made after the
prescribed period shall be dismissed,
although limitation has not been set up as a
defence.”
26. This Court in Foreshore Cooperative Housing Society
Limited vs. Praveen D. Desai(dead) through Legal
Representatives and others, (2015) 6 SCC 412, had
considered the question of jurisdiction of Court in
reference to provisions of Limitation Act. Noticing
Section 3 of the Act following was observed:
“48. Section 3 of the Limitation Act, 1963
clearly provides that every suit instituted,
appeal preferred and application made after
the prescribed period of limitation, subject
to the provisions contained in Sections 4 to
24, shall be dismissed although the
limitation has not been set up as a defence.
49. A Constitution Bench of five Judges of
this Court in the case of Pandurang Dhondi
Chougule v. Maruti Hari Jadhav, AIR 1966 SC
153, while dealing with the question of
jurisdiction, observed that a plea of
limitation or plea of res judicata is a plea
of law which concerns the jurisdiction of the
court which tries the proceeding. The Bench
held(AIR p.155, para 10):
36
10. The provisions of Section 115 of the
Code have been examined by judicial
decisions on several occasions. While
exercising its jurisdiction Under Section
115, it is not competent to the High
Court to correct errors of fact however
gross they may, or even errors of law,
unless the said errors have relation to
the jurisdiction of the court to try the
dispute itself. As Clauses (a), (b) and
(e) of Section 115 indicate, it is only
in cases where the subordinate court has
exercised a jurisdiction not vested in it
by law, or has failed to exercise a
jurisdiction so vested, or has acted in
the exercise of its jurisdiction
illegally or with material irregularity
that the revisional jurisdiction of the
High Court can be properly invoked. It is
conceivable that points of law may arise
in proceedings instituted before
subordinate courts which are related to
questions of jurisdiction. It is well
settled that a plea of limitation or a
plea of res judicata is a plea of law
which concerns the jurisdiction of the
court which tries the proceedings. A
finding on these pleas in favour of the
party raising them would oust the
jurisdiction of the court, and so, an
erroneous decision on these pleas can be
said to be concerned with questions of
jurisdiction which fall within the
purview of Section 115 of the Code. But
an erroneous decision on a question of
law reached by the subordinate court
which has no relation to questions of
jurisdiction of that court, cannot be
corrected by the High Court Under Section
115. ”
37
27. 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.
We, however, for the present case need not express any
opinion with regard to the question of limitation in
view of we having held that plaintiff was not entitled
for the decree. 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.
28. In the result, the appeal is allowed, the judgment
of the High Court is set aside and the suit of the
plaintiff stands dismissed.
……………………..J.
( A.K. SIKRI )
……………………..J.
( ASHOK BHUSHAN )
NEW DELHI,
OCTOBER 31, 2018.