Supreme Court Directs Sale of Displaced Person’s Land at Revised Rate: Gurdev Singh vs. Union of India (2019)

Date of the Judgment: 12 April 2019

Citation: 2019 INSC 341

Judges: L. Nageswara Rao, J., M.R. Shah, J.

Can a displaced person be allotted land at the price fixed decades ago, or should the current market value be considered? This question was at the heart of a recent Supreme Court case concerning the sale of land to the heirs of a displaced person. The Court had to balance the rights of displaced persons with the current economic realities. The judgment was delivered by a two-judge bench comprising Justice L. Nageswara Rao and Justice M.R. Shah, with Justice M.R. Shah authoring the opinion.

Case Background

The case revolves around Hem Singh, a migrant from Pakistan who was registered as a displaced person after the partition of India in 1947. His claims for properties left behind in Pakistan were assessed in 1951. The Displaced Persons (Compensation & Rehabilitation) Act, 1954, was enacted to compensate and rehabilitate displaced persons. In 1985, a property was offered to Hem Singh for ₹26,01,846, based on the then-prevailing market value as per Rule 24 of the Act.

Hem Singh challenged this valuation, appealing to the Settlement Commissioner under Section 22 of the Displaced Persons (Compensation & Rehabilitation) Act, 1954. His appeal was dismissed because the offer had lapsed due to non-acceptance within 30 days. Subsequent revision petitions under Section 24 of the Displaced Persons (Compensation & Rehabilitation) Act, 1954, were also dismissed. Hem Singh then filed a writ petition before the High Court. Initially, he argued for the application of 1955 rates but later agreed to pay the 1985 amount. The High Court’s single judge directed the sale of the property to Hem Singh upon payment of the 1985 price plus 10% interest from 1.4.1985. However, this decision was overturned by a Division Bench of the High Court, leading to the current appeal before the Supreme Court by Hem Singh’s heirs.

Timeline

Course of Proceedings

Hem Singh initially challenged the valuation of the property offered to him in 1985. After his appeal and revisions were dismissed, he approached the High Court. The single judge of the High Court ruled in his favor, directing the sale of the property at the 1985 price with 10% interest. However, the Union of India appealed this decision, and the Division Bench of the High Court overturned the single judge’s order, leading to the appeal before the Supreme Court.

Legal Framework

The case is primarily governed by the Displaced Persons (Compensation & Rehabilitation) Act, 1954, which was enacted to provide compensation and rehabilitation to individuals who migrated from Pakistan due to the partition of India. The relevant provisions include:

• Section 22 of the Displaced Persons (Compensation & Rehabilitation) Act, 1954: This section provides for appeals against orders made under the Act.
• Section 24 of the Displaced Persons (Compensation & Rehabilitation) Act, 1954: This section pertains to the revision of orders passed under the Act.
• Rule 24 of the Displaced Persons (Compensation & Rehabilitation) Act, 1954: This rule, mentioned in the judgment, relates to the valuation of properties for transfer to displaced persons.

Arguments

Appellants’ Arguments (Heirs of Hem Singh):

• The appellants argued that Hem Singh’s entitlement to the land as a displaced person was undisputed, as the authority had allotted the land to him in 1985.
• They submitted that the dispute was initially only about the valuation of the property.
• They contended that before the single judge of the High Court, Hem Singh had agreed to pay the 1985 price.
• The appellants highlighted that the single judge had rightly directed payment of the 1985 price with 10% interest, considering the time elapsed.
• They also pointed out that they had already deposited ₹89 lakhs, which had grown to ₹1.41 crores with interest.
• The appellants offered to pay a further reasonable amount, considering the objections raised by the respondents.

Respondents’ Arguments (Union of India and others):

• The respondents argued that the single judge erred in directing the sale of the property at the 1985 price in 2009-10.
• They contended that the market price in 2009-10 was significantly higher than the 1985 price, which should be the criteria under the rules.
• The respondents maintained that selling the property at the 1985 price would be unfair to the government.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section, but the core issue was:

1. Whether the property should be sold to the appellants at the 1985 price with interest, as directed by the single judge, or at the current market value?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court did not cite any specific cases or books in this judgment. The judgment primarily relied on the specific facts of the case, the provisions of the Displaced Persons (Compensation & Rehabilitation) Act, 1954, and principles of equity.

Judgment

How each authority was viewed by the Court?

The Court considered the Displaced Persons (Compensation & Rehabilitation) Act, 1954 and Rule 24 of the Displaced Persons (Compensation & Rehabilitation) Act, 1954 to understand the legislative intent behind compensating displaced persons. However, the Court did not solely rely on the 1985 valuation, as it was deemed inequitable given the significant increase in market value over time. The court also did not rely on the current market value, as it would be unfair to the displaced person. The court balanced the rights of the displaced person with the current economic realities.

What weighed in the mind of the Court?

The Supreme Court aimed to strike a balance between the rights of displaced persons and the current market realities. The Court acknowledged Hem Singh’s entitlement to the land as a displaced person and the initial dispute over valuation. However, it also recognized that the market value of the property had increased significantly since 1985. The Court found that directing the sale of the property at the 1985 price would be unreasonable, as would directing the sale at the current market price. Thus, the Court decided on a revised amount that was fair to both parties.

Logical Reasoning:

The Court considered the arguments of both parties and the specific facts of the case. It rejected the argument that the property should be sold at the 1985 price, as this would not reflect the current market value. It also rejected the argument that the property should be sold at the current market value, as this would be unfair to the displaced person. The Court therefore arrived at a middle ground, directing the sale at a revised price that was deemed fair and equitable.

The Court stated, “if the appellants are directed to pay Rs.3,66,30,000/- towards the cost of the land and Rs.20,00,000/- towards the cost of construction of the existing building, it will meet the ends of justice.”

The Court also noted, “At the same time, to direct the appellants to pay the present market value/market price would also be unreasonable.”

The Court further stated, “Therefore, taking into over all facts and circumstances of the case, we are of the opinion that if the appellants are directed to pay Rs.3,66,30,000/- towards the cost of the land and Rs.20,00,000/- towards the cost of construction of the existing building, it will meet the ends of justice.”

Key Takeaways

• The Supreme Court balanced the rights of displaced persons with current economic realities.
• The Court did not accept the 1985 price or the current market value as the sole criteria for sale.
• The Court directed a revised price that was deemed fair and equitable.
• This case highlights the importance of considering both historical context and current market conditions in property disputes involving displaced persons.

Directions

The Supreme Court directed that the appellants pay a total sum of ₹3,86,30,000 minus ₹1.41 crores (already deposited) to the authority within four weeks. Upon payment, the respondents were directed to sell the property to the appellants and hand over possession. The appellants were also directed to pay any stamp duty or registration fees. The respondents were permitted to withdraw the ₹89 lakhs deposited by the appellants, along with accrued interest.

Development of Law

The ratio decidendi of this case is that in cases involving the sale of land to displaced persons, the price should be determined by balancing the historical context with the current market value. This judgment clarifies that neither the original offer price nor the current market value should be the sole determining factor. This is a departure from the strict application of either the original offer or the prevailing market value, and introduces an element of equity in such matters.

Conclusion

The Supreme Court’s judgment in Gurdev Singh vs. Union of India provides a balanced approach to resolving property disputes involving displaced persons. The Court recognized the need to consider both the historical context of the allotment and the current market value of the property. By directing a revised payment, the Court ensured that the displaced persons were not unduly burdened while also protecting the interests of the government. This case serves as an important precedent for similar disputes, emphasizing the need for equity and fairness.