Dismissing the petition the Court held that  the property having been acquired under section 269F(6) from MCK in the year 1978, the Additional District Judge had correctly held in the order that it would only be the legal heir of MCK, who would be entitled to payment of compensation, upon their filing any application before that court. Though the petitioners’ claim was that they had purchased half of the property in question for a consideration in 1991 from the original owner thereof, even so, such owner having lost any right to the property in 1978 itself (and finally in 1981 and again in 1983 with the dismissal of his petitions before the court), he had ceased to be its owner, with no right to sell that property to the petitioners, it having vested in the Union of India for about 13 years as on the date the sale deed was executed in 1991. The suit earlier filed by the petitioners seeking a declaration that they were the owners in possession of the suit property had been dismissed. Hence, if the petitioners were still in occupation of the suit property, such occupation was illegal, with the property vesting in the respondents and an order for taking possession having been passed in the year 1989. Court held that whether it was one Department of the Union of India or the other that had deposited the compensation, would be immaterial, the property having vested in the Union of India. Even though according to the letter addressed on May 1, 1978 by the Inspecting Assistant Commissioner to the Executive Engineer, Central Public Works Department it was that Department that was only to arrange for the compensation, which was not the concern of the person receiving the compensation, but only the concern of the Income-tax Department, as to from which source it is to be paid. Court also held that  the order acquiring the property having attained finality on October 5, 1981, and in any case the petitioners having finally “lost their suit” 10 years ago, the judgment in Mathew M. Thomas v. CIT  * 1999) 236 ITR 691 (SC) was not applicable, acquisition proceedings having become final even before this court much before September 30, 1986.

The petitioners themselves having continuously litigated for the acquired property for the third round after having lost the two earlier rounds and also being fully aware of the fact that, earlier, two rounds of litigation by the original owners had been “lost”, a cost of Rs. 25,000 was imposed upon them.