Case Note & Summary
The dispute arose from a grant of government land made to the respondent under Section 3 of the Government Grants Act, 1895, which permitted the erection of a structure subject to conditions. The grant conditions expressly reserved to the Government the power of resumption at any time on giving one month's notice and payment of the value of such buildings as may have been authorised to be erected. The High Court of Delhi, by order dated 14 December 1978, granted a certificate under Article 133(1) of the Constitution for appeal to the Supreme Court, framing the question whether the only right of the grantee was to claim compensation and whether the Government could take possession at any time after expiry of one month in view of Governor General's Order No.179 dated 12 September 1836. Before the Supreme Court, the respondent did not appear despite service. The Court took assistance of counsel for the appellant and examined the Delhi High Court decision in Raj Singh v. Union of India and the Allahabad High Court decision in Bhagwati Devi v. President of India, which the Division Bench had relied upon. The Division Bench had held that it was a condition precedent for the State to give notice, determine the compensation, and then resume the property. The core legal issue was whether prior determination and payment of compensation for the structure were conditions precedent to resumption, or whether a one-month notice and its expiry sufficed to enable the Government to take possession, with valuation and payment to follow. The Supreme Court analysed the grant conditions and noted that the Government retained the power of resumption at any time on giving one month's notice and payment of the value of authorised buildings. It held that the only condition precedent to resumption was issuance of one month's notice and expiry of that period. The determination of the amount of compensation and its payment were not preconditions to resumption; they could be undertaken after possession was taken. The Court reasoned that the property would be resumed for public use, and determination of the value of the building was a ministerial act, while payment was the resultant consequence. Requiring prior determination and payment would defeat the public purpose. The Court approved the Delhi High Court's view as consistent with the scheme and pragmatic, while rejecting the High Court's conclusion that prior determination and payment were necessary. However, the Court noted that the erstwhile grantee was entitled to a notice and an opportunity to place relevant material before the competent authority for determining the value of the building before payment. Accordingly, the Supreme Court allowed the appeal, set aside the High Court's requirement of prior determination and payment, and held that the Government could resume the land after one month's notice, with valuation and payment to be completed thereafter after giving the grantee an opportunity. No costs were awarded because the respondent was absent.
Headnote
A) Government Grants - Resumption of Land - Condition Precedent - Government Grants Act, 1895, Section 3 - The grant conditions reserved to the Government the power of resumption at any time on giving one month's notice and payment of the value of authorised buildings. The Supreme Court held that the only condition precedent to resumption is issuance of one month's notice and its expiry; determination and payment of compensation for structures are not preconditions and may be undertaken after resumption. The High Court's contrary requirement of prior determination and payment would defeat public purpose. Held that the Government is entitled to resume land after one month's notice without prior quantification of compensation (Paras 1-3). B) Natural Justice - Opportunity in Valuation - Prior Hearing - Government Grants Act, 1895, Section 3 - Though prior determination and payment of compensation are not preconditions to resumption, the erstwhile grantee is entitled to notice and opportunity to place relevant material before the competent authority for determining the value of the building before payment. The Court approved the Allahabad High Court's view that grantee should have prior opportunity in valuation, while rejecting the condition that payment must precede resumption. Held that valuation is a ministerial act to be done after resumption, but with prior opportunity to grantee (Paras 1-3).
Issue of Consideration
Whether the only right of the grantee is to claim compensation and whether the Government can take possession at any time after expiry of one month in view of Governor General’s Order No.179 dated 12th September, 1836; whether prior determination of compensation for structures and payment thereof are conditions precedent to resumption of land under Section 3 of Government Grants Act, 1895
Final Decision
Appeal allowed; Supreme Court held that the condition precedent for resumption of government land under the grant is issuance of one month's notice and expiry of that period; determination and payment of value of authorised buildings are not conditions precedent and may be done after resumption with prior opportunity to the grantee; no costs as respondent absent.
Law Points
- Government grant under Section 3 of Government Grants Act
- 1895 may reserve power of resumption at any time on one month's notice and payment of value of authorised buildings
- condition precedent to resumption is issuance of one month's notice and expiry of notice
- determination and payment of compensation for structures need not precede resumption and can be done thereafter
- erstwhile grantee entitled to prior opportunity to place material before competent authority for valuation
- valuation is a ministerial act
- public purpose would be defeated if prior payment required
