BHAGAT RAM & ORS. versus STATE OF PUNJAB & ORS.

Citation: [1967] 2 S.C.R. 165 · Decided: 02-12-1966 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Directions issued
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Judgment (excerpt)

A 
BHAGAT RAM & ORS. 
l'. 
STATE OF PUNJAB & ORS. 
December, 2, 1966 
B 
[K. SUBBA RAO, C. 1., M. HIDAYATULLAH, S. M. SIKRI, 
c 
D 
E 
F. 
G 
H 
R. S. BAC'HAWAT AND J. M. SHELAT, JJ.J 
Ease Punjab Holdings (Consolidation and Prevention of Fragmentation) 
Act (50 of 1948)-Scheme reservi11g land for income of Panchayat-lf 
acquisition-If hit by second provi.w to Art, 31A (I) of the Comtitution 
of India. 
A scheme under the East Punjab Holdings (Consolidation and Preven-
tion of Fragmentation Act) for consolidation of an estate was prepared 
in 1959. The petitioner, who held land within the ceiling limit, challenged 
it on the ground that in so far as it makes reservation of land (or the 
income of the Panchayat,. it was hit by the second proviso to Art. 3 IA( l) 
of 1he Constitution. 
HELD (per Subba Rao C.J., Sikri and Bachawat, JJ.). The e.sentia! 
difference between "acquisition by the State'' on the one hand and "modi-
ficarion or extinguishment of rights" on the other, is that in the first case, 
the beneficiary is the State while in the second, the beneficiary is not the 
State. 
As the beneficiary in the instant case was the Panchayat which falls 
within the definition of the word "State" und•.r Art, 12 of the Constitution, 
the reservation in the scheme was contrary to the second proviso and must 
be modified appropriately. [144 D-Hl 
The repartition unde.r s, 21 of the Act would not amount to "acquisi-
tion" within the second proviso to Art. 31A, because, under ss. 23A and 
24 of the Act, till possession has changed, the managen;ent and rontrol 
do not vest in the Panchayat and acquisition would not be complete. 
Therefore, it could not be said that the acquisition had already taken place 
before the Seventeenth Amendment, which introduced the second proviso 
lo Art. JIA(I), came into force, and that the scheme was not hit by that 
proviso. [146 E-HJ 
Ajit Singh v. State of Punjab [1967] 2 S.C.R, 143, followed. 
Per Hidayatullah and Shela!, JJ : Since the land of the petitioner was 
reduced to something below the ceiling fixed by law, compensation at a 
rate which \vas not lower than the market value must fn paid to him. fl47 
C-F] 
ORIGINAL JURISDICTION : Writ Petition No. 125 of 1966. 
Petition und;r Art. 32 of the Constitution of India for the en-
forcement of fundamental rights. 
Hardev Singh and S. S. Khanduja, for the petitioners. 
K. L. Gossain, 0. P. Malhotra and R. N. Sachthey, for the 
respondents. 
The Judgment of SunBA RAO c. J. and SJKRI and BACHAWAT 
JJ. WAS de!iverd by SIKRI, J. The separate Judgment of HIDAYA-
TULLAH and SHELAT, JJ. was delivered by HIDAYATULLAH. 
166 
SUPllBME COUJlT REPORTS 
[1967] 2 S.C.R. 
Sikri, J. This is a petition under art. 32 of the Constitution 
ch?!lenging the scheme made in respect of the consolidation of 
village Dolike Sunderpur. We have today delivered judgment in 
Ajit Singh v. State of Punjab(') and most of the points in this 
appeal are covered by the decision in that case. Two points remain 
to be dealt with iri this case. 
The first question that arises is wh~ther the scheme in so far 
as it makes reservations of land for income of the Panchayat 1, 
hit by the second proviso to art. 3 lA. The scheme reserves lands for 
phirni, paths, agricultural paths, manure pits, cremation grounds, 
etc., and also reserves an area of 100 kanals 2 marlas (standard ka-
nals) for income of the Panchayat. 
W~ have already held in 
Ajit Singh's(') case that acquisition for the common purposes such 
as phirnis, paths, etc., is not acquisition by the State within the 
second proviso to an. 31A. But this does not dispose of the question 
whether the reservation of land for income of the Panchay3t is 
acquisition of land by the state within the second proviso to art. 31 A. 
We held in that case that there was this essential ..!ifference be-
tween "acquisition by the State" on the one hand and "modification 
or extinguishment of rights" on the other that in the first case the 
beneficiary is the State while in the latter case the beneficiary of 
the modification or the extinguishment is not the State. 
Here it 
seems to i;s that the beneficiary is the Panchayat which falls within 
the definition of the word "State" under art. 12 of the Constitution. 
The income derived by the Panchayat is in no way different from its 
any other income. It is true that s. 2(bb) of the East Punjab Hold-
ings (Consolidation and Prev~ntion of FragmentatiC':!) Act, 1948, 
defines 'common purpose' to i
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