1. The appellants and the respondents were claimants of money deposited in Court under Section 31 of the Land Acquisition Act. They represented different branches of one family which owned originally certain lands handed over under Ex. XVIII to one Ramaswami Aiyar the ancestor of the respondents, who was to perform certain charitable trusts and keep any surplus which there might be after the performance of those trusts. The lands now acquired by the Government consist of a portion of the land covered by this dedication; another portion has been previously acquired and out of the proceeds arrangement has been made for the income necessary to carry out the trusts. The respondents as descendants of the original manager of the trust claimed an exclusive right in the proceeds of the present acquisition. The appellants on the other hand claimed that they were entitled to a share. The trial Court went into the matter and decided that the appellants were not entitled to any share in the compensation amount and that it was payable entirely to the respondents descendants of Ramaswami Aiyar. There was an appeal by the present appellants (claimants 7 and 8) to the District Judge, who dismissed the appeal with a very short judgment in the course of which he observes that neither the contention of the appellants nor the contention of the respondents appears to him to be unsubstantial and accordingly while confirming the award made by the Subordinate Judge he leaves it open to the parties to sue in regular form for the adjustment of their mutual claims and remarks that the appellants may, if so advised, ask for the attachment pendente lite of the disputed amount.
2. Now whatever this order was intended to mean, it appears to me to have the effect of confirming the decision of the Subordinate Judge which recognises the title of the respondents and at the same time of leaving it open to the appellants to canvass the correctness of that decision by means of a separate suit. It seems to me that the learned District Judge had no power to come to such an ambiguous decision. When rival claimants come before the Court on a reference under Section 31 of the Land Acquisition Act, the Court has a duty to decide which of the two claimants is entitled to the money deposited in Court. The Act makes provision for the securing of funds in cases where the person entitled to the custody of them is incompetent to alienate them; but it does not, so far as I am aware, make any provision, whereunder the Court can say,
Claimant A has a good case. Claimant B also has a good case. I direct them to go to a Civil Court to establish their case, but meanwhile I confirm the decision of the lower Court in favour of claimant A.
3. The Court must decide the matter which is before it. In the case of Babujan v. The Secretary of State for India in Council and the Chairman, Gay a Municipality (1906) 4 C.L.J. 256 when the Court was asked to leave the question of title between the claimants open for determination in a regular suit, the learned Judges observed:
We think that wherever a question of title arises between rival claimants, it must under the terms of the Act be decided in that case and cannot be made the subject of a separate suit.
4. It is moreover well established that the decision on a reference under the Land Acquisition Act on a question of title operates as res judicata to bar persons who are parties to that decision from agitating their title in separate proceedings. If the District Judge's order were left as it stands, the appellants suing to establish their title to this money as the learned District Judge seems to think they can sue, would be met by the plea that the learned District Judge's own decision confirming the decision of the trial Court operates as res judicata to bar the suit. Clearly the rights of the parties in this money must be decided by the Land Acquisition Court itself and by the District Court in Appeal from the Court which heard the actual reference. The District Judge was therefore wrong in confirming the trial Court's decision while at the same time referring one party of claimants to a separate suit. The appeal is therefore allowed and remanded to the District Court for disposal in the light of these observations. Costs will abide by the result. The court-fee will be refunded to the appellants.