Government grant of lease of land is governed entirely by the terms of the grant
The present matter before the Apex Court was to determine rights of Union of India over a property under the provisions of Government Grants Act, 1895 vis-à-vis applicability of provisions of Transfer of Property Act apart from provisions of the Code of Civil Procedure and Specific Performance Act.
The subject land (in the present matter) belonged to the Appellant – Union of India (“Pune Cantonment Board”). The said land was leased by way of grant originally to ‘N’ under conditions of the relevant order of Governor General of India passed in the year 1827. The super structure including bungalow, garage and servant quarter on the plot was constructed by ‘N’. Later in the year 1891, the super structure was bequeathed to ‘M’, son of ‘N’.
‘M’ and two others sold their right, title and interest over the super structure in favour of ‘D’ and two others. Thus except the title of land the super structure was transferred in favour of ‘D’ and two others. ‘D’, the purchaser of the property signed admission certificate with certain conditions defining status of rights occupancy besides rights of resumption exercisable by Government. The conditions also stated that no buildings would be erected on the ground other than those now existing and the ground, being the property of Government cannot be sold by the grantee; the buildings may be sold by house owners of the previous permission of the Officer Commanding the Station and the Military Authorities would have the power to cancel the grant incase ground is used for any purpose other than for which it was originally granted. Later, ‘D’ and two others were informed that the land belongs to the President of India i.e. the Government and is held on Old Grant terms under which the Government is entitled to resume the same and the Government has resumed the said property under the terms of the Old Grant for its use and therefore, in exercise of power conferred under the provisions of the Act agreed to offer a compensation towards the value of the authorized erection standing on the said land. It was further intimated that in case if the amount of compensation offered was not acceptable, a committee of arbitration would be convened to assess the value of the erection on the land.
The Court held that the Transfer of Property Act is not applicable to the Government grants. Government grant of lease of land is governed entirely by the terms of the grant. As per Section 3 of the Government Grants Act, 1895 which is to take effect according to its tenor notwithstanding any other law to the contrary. As the legal position stands, grantee under the old grant terms is a mere occupier/licensee having no title over the land so as to entitle him to transfer the land or to another person without prior consent of the authorities concerned. It is always open to the Union of India to resume the land held on old grant terms and the Union of India cannot be prevented from resuming the said land.
The Government thus has unfettered discretion and under Section 3 can impose any condition, limitation or restriction in its grants and the rights, privileges and obligations of the grantee would be regulated only according to the terms of the grant itself though they may be inconsistent with the provisions of any Statute or Common Law.
It was further clarified that the grants of lands situated in cantonment area under Old Grants form a self contained provision prescribing the procedure as to the grant and resumption of the land and hence recourse to the Code of Civil Procedure or the Specific Relief Act will not be applicable.
[Union of India & Anr. vs. Dinshaw Shapoorji Anklesari & Ors.]