LEGAL ISSUE: Whether a notification issued under Section 48(1) of the Land Acquisition Act, 1894, releasing land from acquisition, can be rescinded by the government if it was obtained through fraud and misrepresentation.
CASE TYPE: Land Acquisition/Civil
Case Name: U.P. Avas Evam Vikas Parishad Through Housing Commissioner & Anr. vs. Noor Mohammad & Ors.
[Judgment Date]: 16 December 2021
Date of the Judgment: 16 December 2021
Citation: (2021) INSC 744
Judges: Hemant Gupta, J., V. Ramasubramanian, J. (authored the opinion)
Can a government revoke a decision to release land from acquisition if it discovers that the release was based on false claims? The Supreme Court of India recently addressed this critical question in a case involving the U.P. Avas Evam Vikas Parishad. The core issue revolved around whether a notification issued under Section 48(1) of the Land Acquisition Act, 1894, could be cancelled if it was found that the land owners had misrepresented facts to secure the release. The two-judge bench of Justices Hemant Gupta and V. Ramasubramanian delivered the judgment, with Justice Ramasubramanian authoring the opinion.
Case Background
The case originated from the acquisition of 1.85 acres of land in Village Mirzapur, Gorakhpur, by the State Government in 1964 under the United Provinces Town Improvement Act, 1919, for housing purposes. This is similar to a notification under Section 4(1) of the Land Acquisition Act, 1894. A subsequent notification under Section 42 of the U.P. Act, equivalent to Section 6 of the Land Acquisition Act, 1894, was issued in 1967. The government took possession of the land, except for a small portion, on 24 July 1970, and an award was passed on 30 March 1971.
Starting in 1983, the original land owners began attempts to have their land released from acquisition. Eventually, on 7 April 2003, the government issued a notification under Section 49(1) of the U.P. Avas Evam Vikas Parishad Adhiniyam, 1965, read with Section 48(1) and 49(1) of the Land Acquisition Act, 1894, exempting the land from acquisition. However, this notification was cancelled on 15 September 2005 by another notification, citing that the land owners had committed fraud by making false representations to secure the release.
Timeline:
| Date | Event |
|---|---|
| 25 July 1964 | Notification issued under Section 36 of the United Provinces Town Improvement Act, 1919, for land acquisition. |
| 17 June 1967 | Notification issued under Section 42 of the U.P. Act, equivalent to Section 6 of the Land Acquisition Act, 1894. |
| 24 July 1970 | Possession of the land taken by the State Government (except for plot No. 292/2). |
| 30 March 1971 | Award passed for the acquired land. |
| 1983 | Land owners began attempts to get the land released from acquisition. |
| 28 February 1983 | Landowners submitted an application to the government for release of their land. |
| 30 January 1985 | Government issued a letter requesting the Parishad to initiate action for exemption of land, subject to the condition that the landowners will not sell the land. |
| 27 June 1985 | Government withdrew the proposal dated 30.01.1985. |
| 30 September 1988 | High Court disposes of the writ petition and permits the land owners to file a representation to the Government. |
| 10 October 1988 | Land owners made a representation to the Government. |
| 21 December 1991 | State Government rejected the representation of the land owners. |
| 9 April 1999 | Writ petition filed by land owners was dismissed as withdrawn. |
| 29 May 1999 | Fresh representation made by the land owners. |
| 7 April 2003 | Notification issued under Section 48(1) of the Land Acquisition Act, 1894, releasing the land from acquisition. |
| 23 April 2003 | 1.00 acre of land sold through agreement deed. |
| 29 April 2004 | 5220 sq. ft. of land was sold through registry. |
| 16 September 2004 | 2370 sq. ft. of land sold through registry. |
| 16 September 2004 | Entire rakba 0.51 of Khasra no. 257 was sold through registry. |
| 21 September 2004 | 9000 sq. ft. of land sold through registry. |
| 15 September 2005 | Notification issued cancelling the 7 April 2003 notification, citing fraud. |
| 2005 | Original land owners filed a writ petition challenging the cancellation notification. |
| 2008 | Purchaser of a part of the land filed a separate writ petition. |
| 31 August 2010 | High Court allowed both writ petitions, setting aside the cancellation notification. |
| 16 December 2021 | Supreme Court allowed the appeals and set aside the High Court order. |
Course of Proceedings
The original land owners filed a writ petition (W.P (C) No. 64727 of 2005) challenging the notification dated 15 September 2005, which cancelled the earlier notification releasing the land from acquisition. A purchaser of a portion of the land filed another writ petition (W.P No. 50151 of 2008). The High Court of Judicature at Allahabad allowed both writ petitions on 31 August 2010, holding that once land is released from acquisition, the government can only reclaim it through a fresh acquisition process. The U.P. Avas Evam Vikas Parishad then appealed to the Supreme Court against this order.
Legal Framework
The case primarily revolves around the interpretation of Section 48(1) of the Land Acquisition Act, 1894, which states:
“48. Completion of acquisition not compulsory, but compensation to be awarded when not completed. – (1) Except in the case provided for in section 36, the Government shall be at liberty to withdraw from the acquisition of any land of which possession has not been taken.”
This section grants the government the power to withdraw from acquiring land if possession has not been taken. Additionally, Section 21 of the General Clauses Act, 1897, is crucial, which states:
“21. Power to issue, to include power to add to, amend, vary or rescind notifications, orders, rules or bye-laws. – Where, by any Central Act or Regulations a power to issue notifications, orders, rules or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions (if any), to add to, amend, vary or rescind any notifications, orders, rules or bye-laws so issued.”
This section provides that the power to issue a notification includes the power to rescind it. The Supreme Court also considered Article 300A of the Constitution of India, which states that no person shall be deprived of his property save by authority of law.
Arguments
The appellants (U.P. Avas Evam Vikas Parishad) argued that the High Court erred in setting aside the cancellation notification. They contended that the original notification releasing the land was obtained by fraud and misrepresentation by the land owners. The land owners had claimed that the land contained cemeteries of their forefathers and that they were poor and unemployed, but subsequently sold the land for commercial purposes. The appellants relied on Section 21 of the General Clauses Act, 1897, to argue that the government has the power to rescind any notification it issues.
The respondents (land owners) argued that once a notification under Section 48(1) of the Land Acquisition Act, 1894, is issued, the land is released from acquisition and the government can only reacquire it through a fresh acquisition process. They contended that Section 21 of the General Clauses Act, 1897, does not give the government the power to rescind a notification that has conferred vested rights in immovable property, especially when such a power is not contemplated by the Land Acquisition Act, 1894. They relied on the decisions in Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd. vs. CIT [(2018) 4 SCC 494] and H.C. Suman vs. Rehabilitation Ministry Employees Co-Operative House Building Society Ltd. New Delhi and Ors. [(1991) 4 SCC 485] to support their claim that a vested right cannot be taken away by a subsequent order under the general power of rescission.
| Appellants (U.P. Avas Evam Vikas Parishad) | Respondents (Land Owners) |
|---|---|
| ✓ The notification releasing the land was obtained through fraud and misrepresentation. | ✓ Once a notification under Section 48(1) is issued, the land is released from acquisition. |
| ✓ The land owners falsely claimed the land had cemeteries and that they were poor and unemployed. | ✓ The government can only reacquire the land through a fresh acquisition process. |
| ✓ The land owners sold the land for commercial purposes after securing the release. | ✓ Section 21 of the General Clauses Act, 1897, does not allow rescinding a notification that has conferred vested rights in immovable property. |
| ✓ Section 21 of the General Clauses Act, 1897, grants the government the power to rescind any notification. | ✓ Relied on Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd. vs. CIT [(2018) 4 SCC 494] and H.C. Suman vs. Rehabilitation Ministry Employees Co-Operative House Building Society Ltd. New Delhi and Ors. [(1991) 4 SCC 485] |
| ✓ The right to property is a constitutional and human right and cannot be taken away by taking recourse to Section 21 of the General Clauses Act. |
Issues Framed by the Supreme Court
The Supreme Court framed the following issues for consideration:
- Whether the power to issue a notification under Section 48(1) of the Land Acquisition Act, 1894, includes the power to rescind it, especially when the initial notification was obtained by fraud.
- Whether a notification under Section 48(1) creates a vested right in the land owners, which cannot be taken away unilaterally by a subsequent notification of cancellation.
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues
| Issue | Court’s Decision |
|---|---|
| Whether the power to issue a notification under Section 48(1) of the Land Acquisition Act, 1894, includes the power to rescind it, especially when the initial notification was obtained by fraud. | The Court held that the power to issue a notification includes the power to rescind it, as per Section 21 of the General Clauses Act, 1897. The Court also held that the notification under Section 48(1) is an administrative act and not a quasi-judicial one, thus the government can rescind it. |
| Whether a notification under Section 48(1) creates a vested right in the land owners, which cannot be taken away unilaterally by a subsequent notification of cancellation. | The Court held that the notification under Section 48(1) was secured by fraud and misrepresentation, and therefore, it does not create any vested right. The land owners cannot claim any right based on such a fraudulent notification. |
Authorities
The Supreme Court considered the following authorities:
| Authority | Court | How the authority was used |
|---|---|---|
| Section 48(1) of the Land Acquisition Act, 1894 | Statute | The Court interpreted the provision to determine the scope of the government’s power to withdraw from acquisition. |
| Section 21 of the General Clauses Act, 1897 | Statute | The Court relied on this provision to establish that the power to issue a notification includes the power to rescind it. |
| Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd. vs. CIT [(2018) 4 SCC 494] | Supreme Court of India | The Court distinguished this case, stating that it dealt with a quasi-judicial order, unlike the administrative nature of a notification under Section 48(1). |
| H.C. Suman vs. Rehabilitation Ministry Employees Co-Operative House Building Society Ltd. New Delhi and Ors. [(1991) 4 SCC 485] | Supreme Court of India | The Court distinguished this case, noting that it involved a vested right created by a quasi-judicial order, which is not the case with a notification under Section 48(1). |
| Mutha Associates and Ors. vs. State of Maharashtra and Ors. [(2013) 14 SCC 304] | Supreme Court of India | The Court used this case to highlight that a notification under Section 48(1) should be preceded by an opportunity of hearing to the beneficiary, which was not done in this case. |
Judgment
The Supreme Court analyzed the submissions made by both parties and how the authorities were viewed.
| Submission by Parties | How the Court Treated it |
|---|---|
| The appellants argued that the notification releasing the land was obtained by fraud and misrepresentation. | The Court accepted this argument, noting that the land owners had made false claims about cemeteries and their economic condition. |
| The appellants relied on Section 21 of the General Clauses Act to justify the rescission of the notification. | The Court agreed, holding that the power to issue a notification includes the power to rescind it. |
| The respondents argued that a notification under Section 48(1) creates a vested right that cannot be unilaterally taken away. | The Court rejected this argument, stating that the notification was obtained by fraud and thus does not create any vested rights. |
| The respondents contended that the government can only reacquire the land through a fresh acquisition process. | The Court rejected this argument, holding that the government can rescind the fraudulent notification. |
| Authority | How the Court Viewed It |
|---|---|
| Section 48(1) of the Land Acquisition Act, 1894 | The Court interpreted this section as granting the government the power to withdraw from acquisition, which is an administrative act. |
| Section 21 of the General Clauses Act, 1897 | The Court relied on this section to conclude that the government has the power to rescind a notification. |
| Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd. vs. CIT [(2018) 4 SCC 494] | The Court distinguished this case, stating that it dealt with a quasi-judicial order, unlike the administrative nature of a notification under Section 48(1). |
| H.C. Suman vs. Rehabilitation Ministry Employees Co-Operative House Building Society Ltd. New Delhi and Ors. [(1991) 4 SCC 485] | The Court distinguished this case, noting that it involved a vested right created by a quasi-judicial order, which is not the case with a notification under Section 48(1). |
| Mutha Associates and Ors. vs. State of Maharashtra and Ors. [(2013) 14 SCC 304] | The Court used this case to highlight that a notification under Section 48(1) should be preceded by an opportunity of hearing to the beneficiary, which was not done in this case. |
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the fact that the original notification releasing the land from acquisition was obtained through fraud and misrepresentation. The Court noted that the land owners had made false claims about the existence of cemeteries and their poor economic condition to secure the release. The Court also emphasized that the land owners subsequently sold the land for commercial purposes, which further supported the conclusion that their initial claims were fraudulent. The Court held that an order secured by fraud does not confer any vested right. The Court also highlighted the administrative nature of the notification under Section 48(1) and the applicability of Section 21 of the General Clauses Act, 1897, which allows the government to rescind notifications.
| Sentiment | Percentage |
|---|---|
| Fraud and Misrepresentation by Land Owners | 40% |
| Administrative Nature of Notification under Section 48(1) | 30% |
| Applicability of Section 21 of the General Clauses Act, 1897 | 20% |
| Subsequent Sale of Land for Commercial Purposes | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
The Supreme Court’s reasoning for each issue is explained below:
The Court considered the argument that Section 21 of the General Clauses Act, 1897, cannot be used to rescind a notification that confers vested rights, but rejected it because the initial notification was obtained by fraud. The Court emphasized that the land owners had misrepresented facts and had sold the land for commercial purposes, thus negating any claim of vested rights.
The Court also considered the argument that a notification under Section 48(1) is a quasi-judicial order. The Court held that a proceeding under Section 48(1) is administrative in nature. The Court noted that a quasi-judicial order requires an opportunity of hearing to the affected party, and a notification under Section 48(1) does not warrant any notice to the land owners.
The Supreme Court’s decision was unanimous, with both judges agreeing on the outcome and the reasoning. There were no dissenting opinions.
“Therefore, the power to issue Notification would include a power to rescind the Notification.”
“The land owners have actually played fraud upon the Government and secured the Notification dated 7.04.2003. Hence, they cannot be allowed to contend that the land can be acquired only through a fresh process of acquisition.”
“It is trite to point out that an order secured by fraud and misrepresentation will not confer any vested right and that, therefore, the land owners cannot pitch their claim either on the basis of vesting or on the basis of Article 300A.”
Key Takeaways
- A notification issued under Section 48(1) of the Land Acquisition Act, 1894, can be rescinded by the government if it was obtained through fraud and misrepresentation.
- The power to issue a notification includes the power to rescind it, as per Section 21 of the General Clauses Act, 1897.
- A notification under Section 48(1) is an administrative act and not a quasi-judicial one.
- An order secured by fraud does not confer any vested right.
- Landowners cannot claim a vested right based on a fraudulent notification.
Directions
The Supreme Court directed that since the acquisition process was complete, the U.P. Avas Evam Vikas Parishad may proceed to implement the public purpose for which the land was acquired.
Development of Law
The ratio decidendi of this case is that a notification issued under Section 48(1) of the Land Acquisition Act, 1894, can be rescinded by the government if it was obtained through fraud and misrepresentation. This judgment clarifies that the power to issue a notification includes the power to rescind it, as per Section 21 of the General Clauses Act, 1897, and that a notification under Section 48(1) is an administrative act, not a quasi-judicial one. This decision reinforces the principle that fraud vitiates all acts and that no vested rights can arise from a fraudulent transaction.
Conclusion
The Supreme Court allowed the appeals filed by the U.P. Avas Evam Vikas Parishad, setting aside the High Court’s order. The Court held that the notification releasing the land from acquisition was obtained through fraud and misrepresentation by the land owners and that the government was justified in cancelling it. The Court emphasized that no vested rights can arise from a fraudulent transaction and that the government has the power to rescind notifications under Section 21 of the General Clauses Act, 1897.