Judgment

SIKRI, J. (For himself, Subba Rao, CJI. and R. S. Bachawat, J.): This is a petition under Art. 32 of the Constitution challenging the scheme made in respect of the con solidation of village Dolike Sunderpur. We have to-day delivered judgment in Ajit Singh v. State of Punjab, Civil Appeal No. 1018 of 1966, D/- 2-12-1966: and most of the points in this appeal are covered by the decision in that case. Two points remain to be dealt with in this case.

2. The first question that arises is whether the scheme in so far as it makes reservations of land for income of the Panchayat is hit by the second proviso to Art. 31-A. 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 kanals) for income of the Panchayat. We have already held in Ajit Singh s case, Civil Appeal No. 1018 of 1966, D/- 2-12-1966: that acquisition for the common purposes such as phirnis, paths, etc., is not acquisition by the State within the second proviso to Art. 31A. But this does not dispose of the question whether the reservation of land for income of the Panchayat is acquisition of land by the State within the second proviso to Art. 31A. We held in that case that there was this essential difference between "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 us 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 Holdings (Consolidation and Prevention of Fragmentation) Act, 1948, defines common purpose to include the following purposes:

"....providing income for the Panchayat of the village concerned for the benefit of the village community."

Therefore, the income can only be used for the benefit of the village community. But so is any other income of the Panchayat of a village to be used. The income is the income of the Panchayat and it would defeat the whole object of the second proviso if we were to give any other construction. The Consolidation Officer could easily defeat the object of the second proviso to Art. 31A by reserving for the income of the Panchayat a major portion of the land belonging to a person holding land within the ceiling limit. Therefore, in our opinion, the reservation of 100 kanals 2 marlas for the income of the Panchayat in the scheme is contrary to the second proviso and the scheme must be modified by the competent authority accordingly.

3. This takes us to the second question raised by the State, in the alternative. On behalf of the State it has been argued that acquisition had already taken place before the Seventeenth Amendment came into force, and, therefore, the scheme is not hit by the second proviso to Art. 31A. The relevant facts are contained in the affidavit of Jaswant Singh Bhutani, Officer on Special Duty, and are as follows:

"The village was notified for consolidation, vice Punjab Government Notification No. 57/G/17041-A, dated 1-9-1956 which was duly published and a proper notice under R. 4 of the Consolidation Rules was issued which was also published in the village in the prescribed manner. The Scheme was prepared by the Consolidation Officer under the Act in consultation with the right holders and Advisory Committee of the village on 15-1-1959 and the right holders were invited to file objections under S. 19 (1) of the Act against the draft scheme as required within 30 days of the said publication. The objections were tendered which were duly considered and after consideration of the same the scheme was confirmed under Section 20 (3) of the Act by the Settlement Officer, Consolidation of Ho