JUDGMENT

Misra, J.-The present appeals are directed against the judgment and order of the High Court dismissing the appellants appeal, challenging the order of the District Judge holding that the respondents are owners of the suit land 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.

2. The question raised in these appeals is : who is the owner of the suit land, whether the appellant - Union of India or the State Government? This is raised in the land acquisition proceeding, in the context of adjudication of the apportionment of the compensation. In order to appreciate the controversy it is necessary to give certain facts.

3. On 22nd May, 1952 Tehsildar issued a notification for sale of Khajan (Marshy) land on ownership basis through public auction. In the public auction dated 12th June, 1952 Hanumanbux Lalchand Mundra offered highest bid and deposited the part amount on the same day towards the price of land. The balance amount was deposited on 26th June, 1952. On 5th May, 1955 the Collector confirmed the said auction sale. As a consequence, on 25th May, 1955 an agreement was executed with the said purchaser and on 24th November, 1955 the Circle Officer handed over the possession of the land. Through mutation Entry No. 227 dated 24th February, 1970 the names of all the partners of Respondent No. 1 were entered in the revenue records. In the land acquisition proceedings for the construction of highway a portion of land bearing Sl. No. 386 (p) Mulund through the award, ownership of Respondent No. 1 was recognised and compensation was held to be payable to the said Hanumanbux Lalchand Mundra. The Municipal Corporation of Greater Bombay also acquired a portion of the land purchased in public auction held on 12th June, 1952 and through an award dated 13th April, 1972 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 read with Section 128 of the Maharashtra Regional and Town Planning Act, 1966 (hereinafter referred to as the said Act ) was issued by the Government of Maharashtra for acquiring land measuring 32,506 Sq. Mtrs. Out of Gat. No. 86 (p). A notification dated 11th November, 1980 under Section 126 of the said Act read with Section 6 of the Land Acquisition Act, 1894 was issued. The respondents challenged these notifications through a writ petition, in which respondents agreed to hand over possession of the aforesaid area. The respondents accordingly handed over possession of the said area and submitted their claim for compensation.

4. It is at this stage, the Salt Department of the Union of India challenged the ownership of the respondents in respect of this acquired land. The Land Acquisition Officer referred the matter of ownership to the Collector who held respondents to be the owners. However, on 19th September, 1986 the Collector in review proceedings held, Union of India to be the owner and respondents were only the lessees who were entitled to receive compensation only for the loss of their business. The respondents challenged this order through a writ petition. The High Court quashed the aforesaid order and directed the District Judge to decide this question of ownership of land in pending Land Acquisition Ref. No. 90 and 91 of 1986. In this, only Union of India and not the Government of Maharashtra filed written statement. The aforesaid references of the respondent were allowed. The Court held that respondents were the owners and were entitled for the compensation calculated at the market value of Rs. 80/- per sq. mtr. Aggrieved by this the appellants filed the first appeal before the High Court, which was also dismissed. The High Court confirmed respondents to be owners of the acquired land. However, the rate of compensation was reduced from Rs. 80/- per sq. mtr. to Rs. 70/- per sq. mtr. The High Court held, that Se