# LACRBMAN DASS & OTHERS v. MUNICIPAL COMMITIEE, .JALALABAD & OTHERS

- **Citation:** [1969] 3 S.C.R. 645
- **Court:** Supreme Court of India
- **Decided:** 1968-02-12
- **Bench:** Jid>Ayatullah, S. M. SUCiu, R. S. Bachawat, Mitter, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/lacrbman-dass-others-v-municipal-commitiee-jalalabad-others-4621
- **Pages:** 8

## Headnote

Dlsplllad P•rsons (Compensation ond Rehabilitation) Act, 1954, S.
20 B-lf violative of Art. 31(2) of th• Constitlltion.
In 1949 certain property was treated as evacuee property and the
(!
District Rent and Managing Officer, Jalalabad, began to recover rent in
~
of it. The respondent Municipal Committee claimed the property
u its own and liled a suit for a: declaration to that effect.
By order of
the trial court the matte'r was referred to the OBtodian General who, in
"eurcile of bis powers under section 27 of the Administration of Evacuee
· Property Act t9SO, held that the property un<ler dispute had wronliY
been taken over u evacuee Pr:o!'"rty and drdered it to be reloued in
· favour of the respondent Mwiicipal Committee. . After the Committee
D
applied for restaration of poeseSSIOO of the property, the District Rent
and. Manallina Ofticer sent a memo to the respondent committee 1tating
that the propel~ under dispute had already been transferred to the occu1'8"ts and that its assessed price was Rs. 6,542.
He further stated that
'it· was not eqedient or practicable to restore the property to the respo~
dent committee and it had, therefore, been declded to transfer to it any
other immovable property in the compensation pool of the equivalent
amount in lieu thereof under section 20B
Of
the Displaced
Persons
:I
(Compensation and Rehabilitation Act) 1954.
By a writ petition, the
respoadent ehallenged the vires of section 20-B of 1954 Act as well as
the validity of the Memo· from the District Rent and Managing Oftioer,
Jalalabad. The High Court, following its early decision in Kirpol Singh
v. C•ntral Government; I.L.R. [1967) 2 P. & H., 514, held that section
2().B was unconstitutional being ultra vires Articles 14 and 19(l)(f) of
the Constitution. It held, however, that the section did not violate Art.
·I!'
31(2) of the Constitution.
G
B
On appeal to this Court,
HELD: Section 20-B of the Displaced Persons (Compensation and
Rehabilitation)
Act 1954 was violative of both provisions of Art. 31(2).
Although to provide for rehabilitation Of displaced persons was a public
purpose, it did not serve any public purpose to provide in Section 20-B
that if a displaced person wa& in occupation of some body's p'roperty he
could not be given other property because it would not be expedient or
P!"'¢cable to do so. A public purpose may be served if it had been provided that a displaced person may not be ousted because his businesa
would be ruined or that hi> would be completely thrown on the street,
but to provide in the section that if the Central Government does
not
tbi»:k it expedient or ~cticable for ~ts own c~nvenience or f~r the cdn-
-
of a lessee or ltccnsee who " not a dlSplaced person 1t may not
reatore. Property servea no public ,purchase. Under the section the Central
Oovemment •. was entitled not to restore property to serve a purpoee other .
than a public ~.
.
and consequently the section was ultra viru Art.
31(2). [650 HJ.
646
SUPREME COURT. REPORTS
(1969) 3 s.c.R.
The section .was also violative of Art. 31(2) as it did not lb: any
compensation or lay down any principle for compensation.
Amar Singh v. Custodian, Evacuee Property, Punjab, [1957] S.C.R.
801, referred to.
CIVIL APPELLATE JuR1so1cnoN : Civil Appeals Nos. 1~07
and 1569 of 1968.
Appeals from the order dated May 3, 1967 of the Punjab and
Haryana High Court in Letters Patent Appeal No. 37 of 1967.
S. K. Mehta, K. L. Mehta, for the appellants (in C.A. No.
1407 of 1968) and respondents Nos. 2 to 7 (in C.A. No. 1569 of
1968).
Bishan Narain, A. Sreedharan Nambiar and S. P. Nayar, for
the appellal!lts (in: C.A. No. 1569 of 1968) and respondents Nos.
2, 4 and 5 (in C.A. No. 1407 of 1968).
U. P. Singh, for respondent No. 1 (in C.A. No.
1407 of
1968).

## Text

845
LACRBMAN DASS & OTHERS
v.
MUNICIPAL COMMITIEE, .JALALABAD & OTHERS
February 12, 1968
B
(:M, JID>AYATULLAH, C.J., S. M. SUCiu, R. S. BACHAWAT,
G. K, MITTER AND K. S. HEGDE, JJ,]
Dlsplllad P•rsons (Compensation ond Rehabilitation) Act, 1954, S.
20 B-lf violative of Art. 31(2) of th• Constitlltion.
In 1949 certain property was treated as evacuee property and the
(!
District Rent and Managing Officer, Jalalabad, began to recover rent in
~
of it. The respondent Municipal Committee claimed the property
u its own and liled a suit for a: declaration to that effect.
By order of
the trial court the matte'r was referred to the OBtodian General who, in
"eurcile of bis powers under section 27 of the Administration of Evacuee
· Property Act t9SO, held that the property un<ler dispute had wronliY
been taken over u evacuee Pr:o!'"rty and drdered it to be reloued in
· favour of the respondent Mwiicipal Committee. . After the Committee
D
applied for restaration of poeseSSIOO of the property, the District Rent
and. Manallina Ofticer sent a memo to the respondent committee 1tating
that the propel~ under dispute had already been transferred to the occu1'8"ts and that its assessed price was Rs. 6,542.
He further stated that
'it· was not eqedient or practicable to restore the property to the respo~
dent committee and it had, therefore, been declded to transfer to it any
other immovable property in the compensation pool of the equivalent
amount in lieu thereof under section 20B
Of
the Displaced
Persons
:I
(Compensation and Rehabilitation Act) 1954.
By a writ petition, the
respoadent ehallenged the vires of section 20-B of 1954 Act as well as
the validity of the Memo· from the District Rent and Managing Oftioer,
Jalalabad. The High Court, following its early decision in Kirpol Singh
v. C•ntral Government; I.L.R. [1967) 2 P. & H., 514, held that section
2().B was unconstitutional being ultra vires Articles 14 and 19(l)(f) of
the Constitution. It held, however, that the section did not violate Art.
·I!'
31(2) of the Constitution.
G
B
On appeal to this Court,
HELD: Section 20-B of the Displaced Persons (Compensation and
Rehabilitation)
Act 1954 was violative of both provisions of Art. 31(2).
Although to provide for rehabilitation Of displaced persons was a public
purpose, it did not serve any public purpose to provide in Section 20-B
that if a displaced person wa& in occupation of some body's p'roperty he
could not be given other property because it would not be expedient or
P!"'¢cable to do so. A public purpose may be served if it had been provided that a displaced person may not be ousted because his businesa
would be ruined or that hi> would be completely thrown on the street,
but to provide in the section that if the Central Government does
not
tbi»:k it expedient or ~cticable for ~ts own c~nvenience or f~r the cdn-
-
of a lessee or ltccnsee who " not a dlSplaced person 1t may not
reatore. Property servea no public ,purchase. Under the section the Central
Oovemment •. was entitled not to restore property to serve a purpoee other .
than a public ~.
.
and consequently the section was ultra viru Art.
31(2). [650 HJ.
646
SUPREME COURT. REPORTS
(1969) 3 s.c.R.
The section .was also violative of Art. 31(2) as it did not lb: any
compensation or lay down any principle for compensation.
Amar Singh v. Custodian, Evacuee Property, Punjab, [1957] S.C.R.
801, referred to.
CIVIL APPELLATE JuR1so1cnoN : Civil Appeals Nos. 1~07
and 1569 of 1968.
Appeals from the order dated May 3, 1967 of the Punjab and
Haryana High Court in Letters Patent Appeal No. 37 of 1967.
S. K. Mehta, K. L. Mehta, for the appellants (in C.A. No.
1407 of 1968) and respondents Nos. 2 to 7 (in C.A. No. 1569 of
1968).
Bishan Narain, A. Sreedharan Nambiar and S. P. Nayar, for
the appellal!lts (in: C.A. No. 1569 of 1968) and respondents Nos.
2, 4 and 5 (in C.A. No. 1407 of 1968).
U. P. Singh, for respondent No. 1 (in C.A. No.
1407 of
1968).
The Judgment of the Court was delivered by
Sikri, J, The Municipal Committee, Jalalabad, respondent be·
fore us in these appeals filed an application under Arts. 226 ajlld
227 of the Constitution praying that s. 20 B of the Displaced
Persons (Compensation and Rehabilitation) Act, 1954-herein·
after referred to as the Compensation Act-be declared ultra vires
the Constitution and that the memorandum dated March 14, 1963,
communicated by the District Rent and Managing Officer, Jalalabad, be quashed. The learned Single Judge, following an earlier
judgment of the Punjab and Haryana High Court in Kirpal Singh
· v. The Central Government('), held thats. 20B of the Compensation Act was ultra vires, and quashed the ,impugned order dated
March 14, 1963, and directed the restoration of the property in
dispute to the Municipal Committee. An appeal was taken to the
Letters Patent Bench but this was dismissed in
limine. Two
appeals have been filed against this judgment, one by the Union
of India and its officers who are interested only in the question of
the vires of the section, and 'the other by Lachhmandas a,nd others
to whom the shops in dispute have been transferred.
The relevant facts may be stated shortly. The Nawab of
Mamdot became an evacuee fin 1947 on the partition of the country
and his property was taken over by the Custodian as evacuee
property. In 1949, the District Rent and Managing Officer treated
five shops, situated in Chowk Kalan, Jalalabad, as belonging to
the Nawab of Mamdot and began to recover the rent of the shops
from the tenants. The Municipal Committee protested and lengthy
correspondence ensued between the Municipal Committee and
(t) 1.L.R. [1967] 2 P. & Ii. 574.
A
c·
E
F
G
H
A
B
c
D
E
F
G
H
I
LACHHMAN V. MUNICIPAL COMMITTEE (Sll!ri, J.)
647
the Custodian. Eventually the Municipal Committee filed a Civil
Suit in 1958 against the Union of India for a declaration that the
said shops were their own property and not
~vacuee property.
Ultimately. the Trial Court, by order dated January 8, 1962, made
a reference to the Custodian General for determining the question
wh.ether the shops in dispute were evacuee property or not. The
Deputy Custodian General, exercising his powers under s. 27 of
the Administration of Evacuee Property Act, 1950 . (hereinafter
referred io as the Evacuee Act) held that the property in dispute
had been wrongly taken over as evacuee property and ordered that
the five shops be released in favour of the Municipal CommiMe,
Jalalabad. On this. the Municipal Committee applied to the
Re~ional Settlement Commissioner, under r. 37 of the Administration of Evacuee Property (Central) Rules, 1950 for the restoration and possession of the five shops. On March 14, 1963, the
District Rent and Managing Officer, Jalalabad, sent a memorandum
to the Municipal Committee stating that the property in dispute
h2d already been transferred to the occupants and disposed of
under the Comoensation Act and that its assessed price was
Rs. 6,542. In the memorandum it was further stated :
"It is not, therefore, expedient or Rfacticable
to
restore the above property to you and ir has. therefore,
bee.n decided to transfer you any other immovable
property in the compensation pool of the equal amount
in lieu thereof under section 20B of the D.Ps. (C&R)
Act, 1954."
The memorandum also iisted some properties which were available for transfer to the Municipal Committee. This is the memorandum that has been quashed by the High Court.
Th~ above proposa_I was not acceptable <o the Municipal
Committee:
It 11:as pointed out by the Municipal Committee in
replv that it was mcorrect that all the five shoPS had been transferred and that the assessment price was Rs. 6 452.
Accordiag
to the .Municipal Committee onlv one shop o~t of these,
in
posseSSion of Dogar Mal Ram Chand, had been auctioned for
Rs. 10,100 although the sale had not matured .
. It appears that one shop was released in favour of the Municipal Committee but the Department refused to release the other
s~o~s. After unsuccessfully approaching the Settlement Officer,
with. de!egate oowers of the Settlement Commissioner, the writ
appl1cat1on under Art. 226 was filed in the High Court.
In Kirpal Singh
v.
The Central Government(') the High
C?ur.t had h~Jd that s. 20B of the Cornpen9ation Act was uncons!J~t1onal bem& ultra vires Arts. 14 and 19(1) (l) of the Constitutmn. _The High Court was, however, o~ the opinion that this
(]) I.LR. [1967] c P. & H. 574.
SUPREME COURT REPORTS
[1969] 3 S.C.R.
section did not violate Art. 31 (2) of the Constitution.
As we
A
have come to the conclusion that s. 20B violates Art. 31 (2) of
the Constitution, we need not consider whether the reasoning of
the High Court is correct regarding the section being ultra vires
Arts. 14 or 19 ( 1 )( f).
Section 20B is in the following terms :
"20B. ( 1.) Where any person is entitled to the restoration of any' property by virtue of an order made
by the Custodian-General under section
27 of the
Administration of Evacuee Property Act, 1950, or by
the competent officer or the appellate officer under the
Evacuee Interest Separation Act, 1951, and the Central Government is of opinion that it is not expedient
or practicable to restore the whole or any part of such
property to that person by reason of the property or part
thereof being in occupation of a displaced person or
otherwise, then, notwithstanding anything contained
in the said Acts or this Act, it shall be lawful for the
Central Government :-
(a) to transfer to that person in lieu of the property to be restored or any part thereof, any immovable property in the compensation pool or any part
thereof, being in the opinion of the Central Government
as nearly as may be of the same value as the property
to be restored or, as the case may be, any part thereof,
{)f
(b) to pay to that person such amount in cash from
the compensation pool in lieu of the property to be
restored or part thereof, as the Central Government having regard to the value of the property to be restored
or part thereof, may in the circumstances deem fit.
(2) Where in pursuance of sub-section (I)
a11y
person has 'been granted any immovable pmperty from
the compensation pool or has been paid any amount in
cash from the compensation. pool, his right, title and
interest in the property to be restored shall be deemed
to have been extinguished.
Before we deal with the constitutionality of this section, we
may. briefly refer to its background. 'This is set out in detail by
B
c
D
E
F
G
-this Court in Amar Singh
v.
Custodian,
Evacuee Property,
Punjab('). In brief, a number of steps were taken by Government to rehabilitate the displaced persons coming from
West_ H
Pakistan.
The first legislative measure enacted to achieve this
-purpose was the East Punjab Evacuees'
(Administration of
(I) [1957] S.C.R. 801.
A
B
c
D
E
F
G
H
LACHHMAN v. MUNICIPAL COMMITTEE (Sikri, J.)
649
Property) Ordinance, 1947. Various other acts were passed
which are set out at p. 809 of the above judgment. It is enough
for the purposes of this case to consider the effect of the provisions of the Compensation Act and the Evacuee Act. Under s. 7
of the Evacuee Act property was notified as being evacuee property, and under s. 8 the property declared to be evacuee property
vested in the Custodian. Under s. 9, the Custodian was empowered to take possession of the property vested in him, and
the Custodian was entitled under s. 10 to administer, preserve and
manage any evacuee property.
In exercise of the powers he
granted leases and made allotments out of the evacuee property,
in favour of displaced persons.
By 1954 it was decided that displaced persons should be paid
compensation in respect of the property left by them in the territories now forming part of West Pakistan.
With that end in
view the Compensation Act was passed. Section 12 enabled the
Central Government to acquire property which had been declared evacuee property and vested in the Custodian. After acquisition the title of the evacuee was extinguished and the evacuee
property vested absolutely in ihe Central Government free from
all encumbrances. All the property acquired under this section
formed part of the compensation pool. Cash balances lying with
the Custodian and certain other contributions and assets
were
also thrown in the compensation pool. Elaborate rules
were
framed under the Compensation Act for the purpose of paying
compensation to displaced persons out of the compensation pool.
One of the ways of paying compensation was transfer of property.
It is not disputed that Lachhman Dass
and others were
granted sanads under the Compensation Act and thus purported
to acquire ownership rights in the shops.
The objects and reasons for enacting s. 20B ,were given as
follows :
"Instances have come to notice where some properties were wrongly declared to be evacuee property and
they were also acquired. In such cases, the CustodianGeneral is empowered under section 27 of the Administration of Evacuee Property Act, 1950 to restore
such property to the non-evacuee owner. Similarly, a
competent officer has also power under the Evacuee.-- -
Interest Separation Act, 1951, to declare a share in a
property to be non-evacuee after the whole of it has
been declared to be evacuee property and has been acquired.
It is not sometimes possible· to restore the
original property to the non-evacuee owner
because
of its transfer to a displaced person. To overcome this
~50
SUPREME COURT REPORTS
[1969] 3 S.C.R.
difficulty; it is proposed to insert a new section 20-B
on the lilll:s of section 20-A."
We may first analyse the provisions of s. 20-B. It proceeds
on the basis that the property to be restored had in fact not properly vested in the displaced persons or tbe Central Government.
Ordinarily, the rightful owner would be entitled to have
the property restored to him. But the section enables the Central Government to deprive him of that property if it is of the opinion that it is not expedient or practicable to restore tbe whole or
part of the property.
The section mentions one reason why it
may not be expedient or practicable, and that is that the property
is in the occupation of a displaced person. Even if this is assumed
to be an adequate reason, it makes it almost non-controlling by
saying that any other reason will be good enough.
This is the
only meaning we can give to the word "otherwise". In other
words, this ineans that if the Central Government likes the property or its lessee or licensee or transferee and it finds it irksome or
does not want to annoy that person it could deprive the rightful
owner of his property. The Central Government is not concerned with justness but whether it would be politic to restore the
property. If the Central Government has decided to deprive the
rightful owner of the property it may transfer to that person any
property being, again in tbe opinion of the Central Government,
as nearly as may be, of the same value as the property to be restored, but the secti9n does not say value at what point of time;
whether at the time the property was taken possession of by the
Custodian, the Central Government or the displaced person, or
at the time. the title of the rightful owner is extinguished. The
section further gives an alternative to the Central Government to
offer cash from the compensation pool, having regard to the value
of the property. Here again no indication is given whether the
cash has to 4e equivalent to the full value of the property and
no indication as to the point of time at which value is to be ascertained.
Under sub-s. (2) after the rightful owner has·· been
granted any immovable property from the compensation pool or
has been paid any cash then his title is extinguished.
It seems to us that the High Court was not right in holding
that the section did not violate Art. 31(2). of the Constitution.
Art. 31"(2) provides for two things; (1 ) the acquisition or requiJ
sition should be for a public purpose; and (2) the law should
provide for compensation and either it should fix the amount of
compensation or specify the principles on which and the manner
in which the compensation has to be determined or given.
In our view, s. 20B violates both these provisions of' the
article. There is no doubt that to provide for rehabilitation of
displaced persons was a public purpose but it does not serve any
A
B
c
D
E
F
G
H
A
B
c
G
H
LACHHMAN v. MUNICIPAL COMMITTEE (Sikri, J.)
651
public purpose to provide that if a displaced person is in occupation of somebody's property he should not be given other property because it will not be expe~ient or practicab~e to do so. _A
public purpose may be served 1f 1( had been provided that a displaced person may not be ousted because his business would be
ruined or that he would be completely thrown on the street, but
to provide in the section that if the Central Government does not
think it expedient or practicable for its own convenience or for
the convenience of a lessee or licensee who is not a displaced
person it may not restore property serves no public purpose. In
our view under the section the Central Government is entitled
not to re;tore property to serve a purpose other than a public
purpose and consequently the section is ultra vi res Art. 31 (2).
Further, in our opinion, the section does not fix any compensation or lay down any principles for compensation.
Sub-s.
( l )(a) of s. 20B may perhaps be taken as laying down some
principle, namely, that the value should be the same but it does
not prescribe the point of time at which the value is to be ascertained. In sub-cl.(b) nothing is said about the cash being equivalent to the value of the property which is sought not to be restored. The Central Government might, having regard to
the
value of the property, decide that cash to the extent of 50 per
cent of its value should be paid. In doing this it would be having regard to the value of the property but it would be following
another rule, namely, that the cash should be half of the value of
the property which is laid down in the section.
We ar¢ quite aware that the Central Government was faced
with the problem mentioned in the "objects and reasons" set out
above, and this problem had to be tackled, but the problem
'~ould and can be tackled in accordance with law and the Constitution.
It was sought to be argued before us that Art. 31 ( 2A) applied
m. this case, but it seems t? us that insofar as the property was
still part of the compensatmn pool the effect of the extinguishment ?f the title of the rightful owner would be to vest the property m the Central Government. It may be that insofar as the
title vested in the displaced person the case would come within
Art. 31 ( 2A), but then the section is not severable and it has to be
declared void as a whole.
We need not consider the point that
even if the section is severable, it would be void ooder Art 19 ( l )
(f). The points we have mentioned above would also b~ relevant in considering the reasonableness of the restrictions.
We may mention that the learned counsel on behalf of
Lachhman Dass and others, the displaced persons to whom the
shops had been purported to have been transferred under the
sanads, tried to attack the validity of the order of the Custodian-
652
SUPREME COURT REPORTS
[1969] 3 S.C.R.
General under s. 27 of the Evacuee Act on· the ground that they
A
were not heard. This point was not taken in the High Court and
we cannot allow it to be raised before us at this stage.
In the result the appeals fail and are dismissed with costs;
one hearing fee.
R.K.P.S.
Appeals dismissed.
B