1984 INSC 0155
                                        SUPREME COURT OF INDIA

                                                     Kanaya Ram

                                                           Vs.

                                                   Rajender Kumar

                                              C.A.No.493(N) of 1971

                                    (A. P. Sen and V. Balakrishna Eradi, JJ.)

                                                      05.12.1984

                                                   JUDGEMENT

SEN, J.:-

1. This appeal by special leave is directed against the judgment of a Division Bench of the Punjab
High Court in Letters Patent Appeal No. 80 of 1967 dated September 9, 1969 upholding the
judgment and order of a learned single Judge dated July 27, 1967. It follows the earlier common
judgment delivered by the Division Bench in Letters Patent Appeal Nos. 357-359 of 1467. By the
judgment. the learned single Judge allowed three writ petitions filed by respondents Nos. 1 and 2
who are purchasers from the original landholder Kulwant Rai and have been held to be mere
benamidars in Civil Suit No, 23 of 1967 decided on January 6, 1967 brought by respondents Nos. 3
to 14, the legal heirs of the aforesaid Kulwant Rai.

2. The arguments in the appeal mainly revolved around the question as to the applicability of the
rule laid down by this Court in Rameshwar v. Jot Ram (1976) 1 SCR 847 : (AIR 1976 SC 49) to the
facts and circumstances of the present case. In Rameshwar's case. this Court held that the death of
the large landholder Teja during the pendency of the appeal before the Financial Commissioner
upon the happening of which event inheritance opened resulting in his legal heirs becoming small
landholders. had not the effect to stultify the rights acquired by his tenants who had applied for
purchase of their holdings under S. 18(1) of the Punjab Security of Land Tenures Act 1953 and
who, pursuant to the purchase order made by the Prescribed Authority, had already made the deposit
of the first instalment of the purchase price as required under S. 18(4)(a) and had thereupon by the
legal fiction contained in clause (b) thereof, to be deemed to have become the owners of the land
since they had acquired a vested right to the grant of relief on the day they made the applications
under S. 18(1). At the conclusion of the hearing, the case was adjourned to enable the parties to
explore the possibility of a settlement because it seemed that the decision in Rameshwar's case was
not really applicable to this case. Although learned counsel appearing for respondents Nos. 3 to 14
signified the willingness of his clients to accept the terms suggested which were fair and reasonable,
learned counsel for the appellant kept on asking for adjournments. Despite repeated opportunities
the parties did not reach any settlement. As there has been no settlement, we proceed to decide the
appeal on merits.

3. It appears that against the common judgment of the Division Bench in Letters Patent Appeal Nos.
357-359 of 1967. three special leave petitions were filed in this Court viz. 572-573 of 1969 and they
were all dismissed in limine on August 21, 1970. That being so, the present appeal has become
infructuous. The High Court had disposed of Letters Patent Appeal No. 80 of 1967 in terms of the
main judgment which has now become final.

4. Even apart from the above, there are no merits in the appeal. Admittedly, Harditta Ram the
predecessor, in. title of the appellants had made the application for purchase under S. 18(1) of the
Act without impleading Kulwant Rai, the original landowner, the predecessor, in- title of
respondents Nos. 3 to 14. During the pendency of the proceedings before the Assistant Collector
(Surplus) who is the Prescribed Authority under the Act, the aforesaid Kulwant Rai died on August
22, 1960 and on October 13, 1960 respondents Nos. 3 to 14 being the legal heirs of Kulwant Rai
made an application to be impleaded as parties to the proceedings and that application of theirs was
allowed by the Assistant Collector on November 8, 1960. The Assistant Collector however on
February 23, 1961 struck off the names of respondents Nos. 3 to 14 from the array of respondents
on the ground that they were not necessary parties to the proceedings. On the same day, he allowed
the purchase application of Harditta. Ram the predecessor, in title of the appellants against
respondents Nos. 1 and 2 Madan Lal and Rajender Kumar, the transferees from Kulwant Rai Both
of them were closely related to Kulwant Rai, the original landowner and obviously the transfers
were collusive Kulwant Rai purported to make oral sales of 10 bighas 10 biswas of land to his
brother-in-law Madan Lal, respondent No. 2 and of the remaining 39 bighas 5 biswas of land in
favour of his maternal uncle Rajender Kumar, respondent No. 1, and the so-called sales were
followed by mutation of their names as per mutation entries Nos. 205 and 206 dated April 14, 1955.
The alleged sales did not create any right or title in the transferees since the provisions of S. 54 of
the Transfer of Property Act, 1882 were extended by the State Government of Punjab by a
notification dated March 26, 1955 w.e.f. April 1, 1955 to the State. Respondents Nos. 1 and 2
preferred an appeal against the order of the Assistant Collector but the Collector rejected the same
on August 31, 1961. The Assistant Collector and the Collector both held that Harditta Ram having
fulfilled the requirements of S. 18(1) of the Act, he was entitled to purchase the lands from both the
transferees.

5. Against the order of the Collector, respondents Nos. 1 and 2 preferred a revision to the
Commissioner who by his order dated June 18, 1962 made a reference to the Financial
Commissioner holding that since Harditta Ram made a statement before the Assistant Collector on
December 22, 1960 by which he confined his application for purchase under S. 18(1) of the Act
against respondent No. 2 Rajender Kumar alone; the Assistant Collector had no jurisdiction to make
an order for the purchase of land belonging to respondent No. 1 Madan Lal. He opined that the
order of the, Assistant Collector as well as that of the Collector affirming the same were therefore
without jurisdiction. The Financial Commissioner by his order dated December 18, 1962 however
declined to interfere with the orders of the Assistant Collector and the Collector and directed that
the reference papers be filed He held that the alleged transfers in favour of respondents Nos. 1 and 2
were apparently collusive and therefore the Assistant Collector and the Collector were justified in
ignoring the same. As regards the objection that Kulwant Rai having died during the pendency of
the proceedings on August 22, 1960, there was a change in status of the landowners against whom
the application under S. 18(1) of the Act was made as on that date inheritance opened and his legal
heirs became small landowners, he held that admittedly the application as made by Harditta Ram
was competent on the day it was filed and the rights of the parties had to be adjudicated upon that
basis and that the objection that there was a change of status as his legal heirs became small
landowners could not prevail since the death of Kulwant Rai was subsequent to the making of the
application.

6. The impugned order of the Financial Commissioner was assailed by respondent No. 1 Rajender
Kumar before the High Court by a petition under Art. 226 of the Constitution. A learned single
Judge by his judgment dated December 16, 1966 quashed the impugned order of the Assistant,
Collector, as affirmed in appeal by the Collector and in revision by the Financial Commissioner on
the ground that once the transfers effected by Kulwant Rai were ignored, the changed situation
brought about by the death of the big landowner had to be taken into account in determining the
rights of the tenant under S. 18(1) of the Act when as a result of inheritance his legal heirs became
small landowners. He held that the original landowner Kulwant Rai. should be deemed to have
continued to own the lands in question tiff August 22, 1960 when he died and in view of the order
of the 'Collector dated July 17, 1961 declaring respondents Nos. 3 to 14 to be small landowners the
rights of the tenant under S. 18(1) of the Act abated The learned single Judge was evidently of the
view that under the scheme of the Act devolution of interest by inheritance or survivorship had to be
taken into account for purposes of determining the rights of tenants under S. 18(1) of the Act.

7. Aggrieved by the judgment of the learned single Judge the appellants who are the legal heirs of
Harditta Ram filed Letters. Patent Appeal No. 80 of 1967 on February 27, 1967, with which we are
concerned Respondents Nos. 3 to 14, the legal heirs of Kulwant Rai had in the meanwhile brought a
suit on January 6, for declaration that they were the owners of the lands in dispute inasmuch as the
transferees Madan Lal and Rajender Kumar, respondents Nos. 1 and 2, were mere benamidars of
Kulwant Rai and further that no title passed in them as the alleged sales were not effected by any
registered instrument as required by S. 54 of the Transfer of Property Act, with consequential prayer
for delivery of possession of lands to them That suit of theirs was decreed by the Subordinate Judge,
Fazilka on February 20, 1967. On July 1, 1968 they applied for being impleaded as parties on the
ground that the Collector, Ferozepur by his order dated July 17, 1961 while determining the surplus
area of the landowner Kulwant Rai held that the alleged sales in favour of respondents Nos. 1 and 2
Madan lal and Rajender Kumar were benami and consequently they had no right or title in the
lands. The Collector further held that upon the death of Kulwant Rai on August 22, 1960, the lands
were inherited by respondents Nos. 3 to 14 and that they were small landowners thereof. On July
17, 1968 they were impleaded as party- respondents in Letters Patent Appeal No. 80 of 1967.

8. This appeal was heard along with Letters Patent Appeal Nos. 357-359 of 1967 as they were all
directed against the same judgment of the learned. single Judge. It appears that it was conceded by
learned Counsel appearing for the appellant before the learned Judges that the findings reached by
the learned single Judge were unassailable. The learned Judges held that in view of S. 54 of the
Transfer of Property Act having been made applicable to the State of Punjab w.e.f. April 1, 1955, no
oral sale of the lands could be effected and therefore the transfers made by Kulwant Rai in favour of
respondents Nos. 1 and 2 could not and did not pass any title whatsoever. In that view of the matter,
the learned Judges expressed no opinion on the question whether the claim of a tenant under S.
18(1) of the Art could be defeated by original landowner subsequent to the making of the
application when by reason of inheritance or survivorship his heirs became small landowners.

9. We are at a loss to comprehend the nature of relief that can be granted to the appellants. This
Court having refused to grant special leave under Art. 136 of the Constitution against the main
judgment in Letters Patent Appeals Nos. 357-59 of 1967 this appeal is no longer tenable. The
Division Bench in dismissing Letters Patent Appeal No. 80 of 1967 had merely followed the main
judgment in the connected Letters Patent Appeals which now has attained a finality that cannot be
upset. Besides, Harditta Ram the predecessor-in-title of the appellants for reasons best known to hint
did not implead the original landholder Kulwant Rai in this application made under S. 18(1) of the
Act. The aforesaid Kulwant Rai died on August 22, 1960 and respondents Nos. 3 to 14 made an
application as his heirs to be impleaded as parties to the proceedings. That application of theirs was
allowed by the Assistant Collector on November 8, 1960. But the Assistant Collector by his order
dated February 23, 1961 deleted their names from the array of respondents presumably on the
objection raised by the appellants that they were not necessary parties to the proceedings, Thus,
neither the original landlord Kulwant Rai nor respondents Nos. 3 to 14 who are his heirs and legal
representatives, are bound by the order of the Assistant Collector dated February 23, 1961 allowing
the application of Harditta Ram under S. 18(1) of the Act. Furthermore, the respondents had already
been declared to be small landholders by the Collector, Ferozepur by his order dated July 17, 1961
and the learned Subordinate Judge of Fazilka by his judgment and decree dated February 10, 1967
declared their right and title to the lands in dispute holding that respondents Nos. 1 and 2, the
transferees of Kulwant Rai, were mere benamidars as also granted them a decree for possession
thereof. In the premises, the judgment of the High Court does not warrant any interference.

10. Much reliance was placed on the decision of this Court in Rameshwar's case, (AIR 1976 SC 49)
(supra), but it is clearly distinguishable on facts There, the Court was dealing with a case where the
tenants who had applied for purchase of their holdings under S. 18(1) of the Act had in compliance
with the order made by the Prescribed Authority in their favour, made the requisite deposits of the
first instalment of the purchase price as required by S. 18(4)(a) and thereupon were deemed to have
become owners of the lands by reason of the legal fiction contained in Cl. (b) thereof. The Court
was therefore dealing with a case where the tenants had acquired a vested right to purchase the lands
and the case had gone beyond the stage of a mere application under S. 18(1). The Court accordingly
held that the death of Teja, the large landholder, during the pendency of the appeal before the
Financial Commissioner, on the happening of which event inheritance opened resulting in his legal
heirs becoming small landholders, would not nullify or annul the order made by the Prescribed
Authority in favour of the tenants who had acquired a vested right to the grant of relief on the day
they made their application under S. 18(1) of the Act. The observations made by Krishna Iyer, J.
that 'the right of parties are determined by the facts as they exist on the date the action is instituted,
must be read in the context in which they were made and do not lay down any rule of universal
application. The decision in each case must depend on its own facts. In the present case. Harditta
Ram the predecessor-in-title of the appellants, when he made the application for purchase under
S.18(1) of the Act had a mere 'hope or expectation of or liberty to apply for, acquiring a right' and
not a 'right acquired or accrued under S. 18(1). It has been held ever since the leading case of Abbot
v. Minister for Lands 1895 AC 425 that a mere right to take advantage of the provisions of an Act is
not an accrued right Abbot's case has been followed by this Court in a number of decisions. In such
a situation, the Court is bound to take into consideration the subsequent events and mould the relief
accordingly. The decision in Rameshwar's case clearly turned on the legal fiction contained in S.
18(4)(b) of the Act and the death of the large landholder Teja during the pendency of the appeal
before the Financial Commissioner on which inheritance opened, and his legal heirs became small
landholders could not impair the vested rights acquired by the tenants by virtue of the order passed
by the Prescribed Authority and the deposit by them of the first instalment of the purchase price as
required under S. 18(4)(a).

11. In view of the foregoing the appeal must fail and is dismissed without any order as to costs.

Appeal dismissed