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Satluj Jal Vidyut Nigam Ltd. v. Raj Kumar Rajinder Singh (D) Thru LRs. & Ors.

Civil Appeal · 2018 INSC 858Decided 24 Sept 2018
Civil Appeal No. 9871 of 2018
Justice Arun Mishra · Justice S. Abdul Nazeer

Background

The late Rajinder Singh, son of a former ruler of Himachal Pradesh, had been Jagirdar of large tracts of land that vested in the State after Jagirs were abolished in 1953, leaving him only a small portion under his personal cultivation. Despite this, he and later his legal heirs ran a long sequence of litigation, withdrawing and refiling claims, and pursuing fresh references, to claim land acquisition compensation on land that had already vested in the State and for which compensation had already been paid under separate land-ceiling and abolition laws. Satluj Jal Vidyut Nigam Ltd. (the hydro-power company acquiring some of this land) and the State challenged the various compensation awards given to the family and to subsequent transferees.

Decision Breakdown

The Supreme Court found that the family had obtained compensation through a pattern of fraud and unjust enrichment, repeatedly re-litigating settled questions and concealing that the land had already vested in the State or that compensation had already been received elsewhere. Applying the principle that "fraud vitiates everything," the Court held the compensation already withdrawn by the family was not legally payable and had to be refunded with 12% annual interest within three months. On a related question about certain purchasers who claimed to be "bona fide transferees," the Court declined to give a final verdict since related first appeals on that specific issue were still pending in the High Court, and left that narrow sub-question open for the High Court to decide, while making clear compensation already paid to such transferees should not be recovered until those pending appeals are resolved.

Lesson Learnt

Compensation obtained through fraudulent or repetitive litigation, including by concealing that land has already vested in the State or that compensation was already received under another law, can be clawed back by the courts even years later, with interest.

Official source (sci.gov.in)View Judgment (PDF)

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