UNION OF INDIA AND ANR. versus MIS. MUNDRA SALT & CHEMICAL INDUSTRIES AND ORS.

Citation: [2000] SUPP. 4 S.C.R. 580 · Decided: 14-11-2000 · Supreme Court of India · Bench: AJAY PRAKASH MISRA · Disposal: Dismissed

Judgment (excerpt)

A 
B 
UNION OF INDIA AND ANR. 
v. 
MIS. MUNDRA SALT & CHEMICAL INDUSTRIES AND ORS. 
NOVEMBER 14, 2000 
[A.P. MISRA AND RUMA PAL, JJ.] 
Constitution of India, 1950-Article 294, Entry 18 and 45 of List II of 
-Seventh Schedule-Government of India Act, 
1935~Section 99 & JOO, 
C Legislative entries-Bombay Land Revenue Code of 1879-Section 37-
Question of ownership of the suit land between the Union of India and the 
State Government-Union basing its claim upon Section 37 of the 1879 code 
according to which the Union Government was presumed to be the owner of 
the land if any individual failed to establish his title-Maintainability of_:_ 
Held, Article 294 of the Constitution of India read with Sections 99 and JOO 
D and legislative entries under the Government of India Act, 1935 makes the 
legal position clear that it is not the Union but the State Government which 
is the owner of the suit land-After the implementation of the 1935 Act and 
the Constitution of India, both 'land' and 'land revenue' fall under State list 
and are governed by the State-Thus, Section 37 of the 1879 Code would 
have no application-The question of ownership between the Union and the 
E State Government is to be tested under Article 294 of the Constitution and 
not under the obsolete Section 37 of 1879 Code-Land Acquisition Act, 
1894-Sections 4,6-Maharashtra Regional and Town Planning Act, 1966-
Sections 126,128. 
F 
Respondent no. 1 purchased the land in question on ownership basis 
through public auction to manufacture salt on the said land. Subsequently, 
the names ofall the partners of Respondent no. 1 were entered in the revenue 
records. 
In the land #lcquisition proceedings for a part of the said land for 
G construction of highway, ownership of Respondent no. 1 was recognised and 
compensation was held to be payable. The Municipal Corporation of Greater 
Bombay also acquired a portion of the said land and through an award accepted 
the title of the respondents and paid compensation to the partners of the 
respondents. A notification under Section 4 of the Land Acquisition Act, 1894 
H read with Section 128 of the Maharashtra Regional and Town Planning Act, 
580 
U.0.1. v. MUNDRA SALT & CHEMICAL INDUSTRIES 
581 
1966 was issued by the State Government for acquiring a portion of the land A 
in question. A notification under Section 126 of the Maharashtra Regional 
and Town Planning Act, 1966 read with Section 6 of the Land Acquisition 
Act, 1894 was also issued. 
The respondents challenged these notifications through a writ petition. 
During the course of hearing of the said writ petition, respondents agreed to 
hand over possession of the aforesaid area which was done accordingly and 
submitted their claim for compensation. At this stage, the Salt Department 
of the Union of India challenged the O'Vnership of the respondents in respect 
B 
of this acquired land. The Land Acquisition Officer referred the matter of 
own.ership to the Collector who held respondents to be the owners. Howevet, C 
in review proceedings, the Collector held Union of India to be the owner and 
that respondents were only the lessees who were entitled to receive 
compensation only for the loss of their business. The respondents challenged 
this order in a writ petition. The said order was quashed by the High Court 
with a direction to the District Judge to decide the question of ownership of 
land in the pending Land Acquisition References. The said references of the 
respondents were allowed by the District Judge and it was held that 
respondents were the owners of the land in question and the grant made by 
the Government in their favour was in fact a sale and not merely lease or 
licence to manufacture salt on the suit land. The respondents were held entitled 
D 
for the compensation calculated at the market value. Aggrieved, the appellz.nts E 
filed the first appeal before the High Court, which was dismissed and 
respondents were confirmed to be owners of the acquired land. However, the 
rate of compensation was reduced. Hence the present appeals. 
On behalf of the appellants, it was contended that the High Court fell 
into error in not applying Section 37 of the Bombay Land Revenue Code, 1879; F 
that application of this Section clearly recognises title of the Union, hence 
any finding to the contrary is liable to be set aside; that having regard to the 
proclamation issued for selling the land on ownership basis through public 
auction including the agreem

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