Supreme Court of India
AWAS EVAM VIKAS PARISHADversusGYAN DEVI (DEAD) BY L.RS. AND ORS.
- Citation
- 1994 INSC 476
- Decided
- 20 October 1994
Holding
Section 50(2) of the Land Acquisition Act grants a local authority (or company) the right to appear, adduce evidence, receive notice, and be impleaded as a proper party in compensation proceedings, and the proviso only bars a reference under Section 18, not other remedies.
Summary
The Uttar Pradesh Awas Evam Vikas Parishad (the Board), a statutory body acquiring land for a housing scheme, was not impleaded in the compensation proceedings before the tribunal and the High Court. The land owners challenged the compensation awarded, leading to enhanced awards by the High Court, which did not include amounts under Section 23(1‑A) of the Land Acquisition Act. The Board sought to be impleaded as a party, arguing that Section 50(2) of the Land Acquisition Act gives it a right to appear and adduce evidence in compensation determinations and to challenge such determinations. The Supreme Court held that Section 50(2) indeed confers on a local authority (or company) the right to appear before the Collector and the reference court, to be given notice of the proceedings, and to be impleaded as a proper party, while the proviso only bars a reference under Section 18. The Board may also seek judicial review under Article 226 and appeal if aggrieved. The Court allowed the Board’s applications to be impleaded, set aside the earlier High Court judgments, and remitted the matter to the High Court for fresh determination.
Issues considered
- Whether Section 50(2) of the Land Acquisition Act, 1894 confers on a local authority the right to participate in compensation determination proceedings.
- Whether the local authority is a proper or necessary party and must be impleaded in tribunal and appellate proceedings.
- Whether the proviso to Section 50(2) precludes the local authority from seeking any judicial remedy, including Article 226 or appeal.
- Whether failure to give notice to the local authority violates its statutory rights.
Legislation cited
- Code of Civil Procedures. 114, s. 151, s. Order 47 Rule 1
- Land Acquisition Act, 1894s. 11, s. 12, s. 12A, s. 18, s. 20, s. 21, s. 23(1-A), s. 28, s. 32, s. 50(2), s. 9
- Land Acquisition (Amendment) Act, 1984s. 23(1-A)
- Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965s. 15, s. 16, s. 28, s. 30, s. 31, s. 32, s. 55, s. 64
Subjects
Land acquisitionCompensation determinationSection 50(2)Local authorityImpleadmentNoticeJudicial reviewArticle 226Reference courtAppeal
Judgment
A U.P. AWAS EVAM VIKAS PARISHAD
v.
GYAN DEVI (DEAD) BY L.RS. AND ORS.
OCTOBER 20, 1994
B [M.N. VENKATACHALlAH, CJ, P.B. SAWANT, S.C. AGRAWAL,
R.M. SAHA! AND S.P. BHARUCHA, JJ.J
Land Acquisition Act, 1894-Section 50(2)-/nterpretation of,~Ac
quisition of land for a local authority-Right of local authority to participate
C in proceedings for acquisition-Legal remedies available to authority against
detennination of compensation.
Land Acquisition Act, 1894-Section 50(2), Proviscr-Acquisition of
land for local authority-f'roceedings before reference court-Local authority
is proper party-Right to adduce evidence.
D
The U.P. Avas Evam Vikas Parishad (Uttar Pradesh Housing and ~
Development Corporation) a statutory Board created under the Uttar
Pradesh Avas Evam Vlkas Parishad Adbinujam, 196S, framed a scheme
known as the 'Trans-Yamuna Housing and Accommodations Scheme'. The
E notifications u/s 28 and 32 of the U.P. Act (analogous to sections 4(1)and
6 of the Land Acquisition Act) were published. Amount of compensation
was f1Xed by adopting 'belting system'. At the instance of the land owners
reference was made. The Tribunal f1Xed the market value of the acquired
land at a Rat rate. Appeals filed against the award of the Tribunal were
allowed by the High Court whereby the belting system was restored. The
F High Court, however, did not award the amount payable u/s 23 (l·A) of
the Land Acquisition Act. The land owners filed appeals against the
judgment of the High Court. The Board was not impleaded as a party In
the reference before the Tribunal or in the appeals before the High Court.
The Board Ried applications for being impleaded as a party in the appeals.
G The question for determination was whether the Land Acquisition
Act conferred any right on the Board to participate at the stage of deter-
mination of compensation for the land which was sought to be acquired
u/s SS of the U.P. Act read with the provision of the Land Acquisition Act
and to assail such determination if the Board felt aggrieved by the same.
H Therefore, these appeals raised common questions involving the inter-
646
AWAS EVAM VIKAS PARISHAD v. GYAN DEVI 647
pretation of sub-section (2) of Section 50 of the Land Acquisition, 1894. A
Disposing of the matter, this Court
HELD: By the Court (Per Majority) (per S.C. Agarwal J. for himself
& M.N. Venkatachaliah, CJI, P.B. Sawant and S.P. Bharucha, JJ.)
B
1.1. Section 50(2) of the Land Acquisition Act confers on a local
authority for whom land is being acquired a right to appear in the
acquisition proceedings before the Collector and the reference court and
adduce evidence for the purpose of determining the amount of compensa-
tion. [664-C] c
1.2. The said right carries with it the right to be given adequate notice
by the Collector as well as the reference court before whom acquisition
proceedings are pending of the date on which the matter of determination
of compensation will be taken up. [664-D]
D-'
1.3. The proviso to Section 50(2) only precludes a local authority
from seeking a reference but it does not deprive the local anthority which
feels aggrieved by the determination of the amount of compensation by the
Collector or by the reference conrt to invoke the remedy under Article 226
of the Constitntion as well as the remedies available under the Land E
Acquisition Act. [664-E]
1.4. In the event of denial of the right conferred by Section 50(2) on
account of failure of the Collector to serve notice of the acquisition
proceedings the local authority can invoke the jurisdiction of the High
Court under Article 226 of the Constitution. [664-F] F
1.5. Even when notice has been served on the local anthority the
remedy under Article 226 of the Constitution would be available to the
local authority on grounds on which judicial review is permissible under
Article 226. [664-G]
G
1.6. The local authority is a proper party in the proceedings before
the reference court and is entitled to be impleaded as a party in those
proceedings wherein it can defend the determination of the amount com-
pensation by the Collector and oppose enhancement of the said amount
and also adduce evidence in that regard. [664-H] H
648 SUPREME COURT REPORTS [1994) SUPP. 4 S.C.R.
A 1.7. In the event of enhancement of the amount of compensation by
the reference court if the Government does not file an appeal the local
authority can file an appeal against the award in the High Court after
obtaining leave of the Court. (665-A]
1.8. In an appeal by the person having an interest in land seeking
B enhancement of the amount of compensation awarded by the reference
court the local authority should be impleaded as a party and is entitled to
the served notice of the said appeal. This would apply to an appeal in the
High Court as well as in this Court. (665-B]
c right as1.9.a Since a company for whom land is being acquired bas the same
local authority under Section 50(2), whatever has been said with
regard to a local authority would apply to a company too. [665-C]
1.10. The matters which stand finally concluded will, however, not be
reopened. (665-D]
D
Neelgangabhai and Anr. v. State of Kamataka and Ors., (1990] 3 SCC
617; Krishi Upaj Mandi Samiti v. Ashok Singha/ and Ors., [1991] Supp. 2
SCC 419; Union of India v. Sher Singh and Ors., (1993] 1 SCC 608; Union
of India v. Kolluni Ramaiah and Ors., (1994] 1 SCC 367 and Himalayan
7iles and Marbles Pvt. Ltd. v. Francis Victor Continho (Dead) by Lrs. and
E Ors., [1980] 3 SCR 235, relied on.
The Municipal Corporation of the Oty of Ahmedabad v. Chandulal
Shamaldas Patel and Ors. (1971] 3 SCC 821, overruled.
Per Sahai, J (Dissenting)
F
1.1 An acquiring body including local authority or company is not a
necessary party either before the Collector who makes the award or before
the Court which hears the reference. (687-E]
G 1.2 Any proceeding for determination of compensation is not vitiated
nor is liable to be set aside for non-impleadment or non-issuance of notice
to the acquiring body, including local authority or the company. (687-F]
1.3 (a) The Collector and the Court hereinafter shall be under an
obligation to intimaie the local authority or the company of pendency of
H the proceedings to enable it to lead evidence. (687-G]
AWAS EVAMVIKAS PARISHADv. GYAN DEVI 649
(b) Non-appearance by the local authority or company in pnrsuance A
of notice sent by the Collector would not absolve the reference court from
issuing any notice. [687-G]
1.4 (a) If a local authority or company appears in proceedings and
leads evidence as provided by sub-section (2) of Section 50 in proceedings
which were initiated earlier it shall be made party in subsequent proceed- B
ings and its non-impleadment shall render the proceedings as invalid.
[687-H]
(b) But if the local authority of the company on whom notice was
served or it had knowledge of the proceedings but it did not appear then
it shall not be entitled to claim at later stage or in appeal that the C
proceedings were vitiated dne to its non-impleadment. [688-B]
1.5 Any proceeding taken under the Land Acquisition Act as.
amended by the State law or if specifically provided iu the State enactment
under which the land is being acquired providing for issuance of notice or D
giving an opportunity of bearing is required to be followed and if such
notice is not issued or hearing is not afforded then the proceedings as in
the Karnataka Act or in the Krisbi Upaj Mandi Samiti Adhiniyam referred
to earlier are liable to be set aside. [688-C]
1.6 In appeal pending in the High Court or this Court the local E
authority or the company shall not be entitled to claim settling aside of
the order except if it establishes fraud or collusion. No order shall be set
aside on the ground if it is only in the realm of appreciation of evidence.
[688-D]
Himalaya Tiles and Marble (P) Ltd. v. Francis Victor Countinho F
(dead) by L.Rs., AIR (1980) SC 1118; Sunder Lal v. Paramsukhdas, [1968]
1 SCR 362; Union of India v. Sher Singh, JT (1993) SC 693, dissented from.
Santosh Kumar v. Central Warehousing Corporation, AIR (1986) SC
1164; Udit Narain Singh Malpaharia v. Additional Member, Board of
Revenue, [1963) Supp. 1 SCR 676, relied on. G
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7067 of
1994 etc. etc.
From the Judgment and Order dated 20.1.93 of the Allahabad High
Court in C. Misc. R.A. No. Nil/91 in F.A. No. 586 of 1985. H
650 SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.
A P.S. Poti, G. Visavanatha Iyer, Hardev Singh, V.B. Saharya, S. Balak-
rishnan, Ms. Madhu Moolchandani, Ms. Naresh Bakshi, M.T. George, E.C.
Agarwala, P.N. Gupta, T.V.S.N. Chari, Ms. Sushma Suri, Mrs. S. Bagga
M.K. Dua, N.D. Garg, R.B. Mishra, Balmokand Goyal, R.C. Pathak H.K.
Puri, C.V. Subba Rao, P.N. Puri, Dr. Meera Aggarwal, S.N. Terdol, M.K.
Garg, Manoj 5warup and K.K. Mohan for the appearing parties.
B
The Judgment of the Court was delivered by
S.C. AGRAWAL. J. : Leave granted.
These appeals arising out of proceedings for acquisition of land for
c the U.P. Awas Evam Vikas Parishad, hereinafter referred to as 'the Board',
raise common questions involving the interpretation of Sub-Section (2) of
Section 50 of the Land Acquisition Act, 1894 (hereinafter referred to as
'the LA. Act') and, therefore, they are being disposed of by this common
judgment.
D
The Board has been constituted under Section 3 of the U.P. Awas
Evam Vikas Parishad Adhiniyam, 1965 (U.P. Act No. 1 of 1966),
hereinafter referred to as 'the U.P. Act'. Under Section 15 of the U.P. Act
one of the functions of the Board is to frame and execute housing and
improvement schemes and other projects. Section 16 .provides that the
E Board may on its own or at the instance of a local authority frame a housing
or improvement scheme and that the Board shall frame such a scheme
when so directed by the State Government. Section 17 prescribes the
matters which are required to be provided for such schemes. Sub-section
(1) of Section 28 makes provision of preparation of a notice by the Board
F when any honsing or improvement scheme has been framed and the said
notice is required to be published in the manner as prescribed in sub-sec-
tion (2) of Section 28. Section 30 makes provision for filing of objections
against the scheme and section 31 provides for sanction of the scheme, with
or without modifications, after considering the objections, if any, received
under Section 30. Such sanction is to be given by the Board when the
G estimates cost of the schemes does not exceed Rs. 20,00,000 and by the
State Government where the estimated costs exceeds that amount. Sub-sec-
tion (1) of Section 32 provides that whenever the Board or the State
Government sanctions a housing or improvement scheme, it shall be
notified in the Gazette and sub-section (2) lays down that the notification
H under sub-section (1) in respect of any scheme shall be conclusive evidence
AWASEVAMVIKASPARISHADv. GYANDEVI [S.C.AGGARWAL.J.] 651
that the scheme has been duly framed and sanctioned. In cases where the A
scheme is sanctioned by the Baaed and appeal lies to the State Government
against the decision of the Board under sub-section (3) of Section 32 and
if the scheme is altered or cancelled by the State Government on such
appeal the cancellation or alteration is required to the notified in the
Gazette under sub-section ( 4) of section 32. Section 55 makes provision for B
acquisition of land or any interest therein required by th.e Board for any
of the purposes of the U.P. Act and lays down that such acquisition may
be made under the provisions of the L.A. Act as amended in its application
to Uttar Pradesh and further provides that the L.A. Act for this purpose
shall be subject to the modifications specified in the Schedule to the U.P.
Act. Section 64 provides for the constitution of one or more tribunals by C
the State Government for the purpose of performing the functions of the
court with reference to the acquisition of land for the Board under the L.A.
Act, as modified by the Schedule to the U.P. Act. In the Schedule to the
U .P. Act modifications have been introduced in the provisions of tbe L.A.
Act. Some of the said modifications which are relevant for the purpose of D
the present case are :
(a) Claus,e (i) has been added in Section 3 whereby the 'local
authority' has been defined to include 'the Board'.
(b) The first publication in the Official Gazette of a notice of any E
housing or improvement scheme under Section 28 or clause (a) of sub-sec-
tion (3) of Section 31 of the U.P. Act is to have the same effect as
publication in the official Gazette of a notification under sub-section (1)
of Section 4 of the L.A. Act.
(c) The publication of a notification under sub-section (1) or, as the F
case may be, under sub-section (4) of section 32 of the U.P. Act is to have
the same effect as a declaration by the Government under Section 6 of the
L.A. Act.
(d) Sub-sections (1) and (1-A) of Section 17 of the L.A. Act as
applicable in the State of U.P. have been substituted by sub-section (1) G
which provide tbat whenever the State Government so directs in the
interest of the expeditious execution of a housing or improvement scheme
under U.P. Act, the Collector, though no such award has been made, may
on the expiration of fifteen days from the publication of the notice men-
tioned in sub-section (1) of Section 9 take possession of any land needed H
652 SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.
A for the purposes of the U .P. Act and such land shall thereupon vest
absolutely in the Government free from all encumbrances.
(e) Section 17-A has been added whereby it has been provided that
in every case referred to in Section 16 or Section 17, the Collector shall
B upon payment of the cost of acquisition make over charge of the land to
the Housing Commissioner, or an officer authorised in this behalf under
the U .P. Act and the land shall, thereupon vest in the board subject to the
liability of the Board to pay any further costs which may be incurred on
account of its ~cquisition.
C The Boatd framed a scheme known as the "Trans-Yamuna Housing
& Accommodation Scheme" and notice under Section 28 of the U.P. Act
in respect of the said scheme (analogous to a notification under section
4(1) of the L.;\. Act) was published on January 31, 1970 and the notifica-
tion under Section 32 of the U .P. Act (analogous to declaration under
D Section 6 of the LA. Act) was published on August 21, 1974. The Special
Land Acquisition Officer made an award on April 15, 1978, wherein
amount of compensation was fixed by adopting 'belting system'. The land
under acquisition was divided in three belts and bye-pass road which lay
in the south was made the basis for such belting. Compensation@ Rs. 7.50,
Rs. 5.00 and R15. 3.75 per sq. yd. was awarded as for the first, second and
E third belts respectively. The possession of the land was taken on April 27,
1978. At the in$tance of the land owners reference was made to the tribunal
constituted under Section 64 of the U .P. Act. The tribunal by a common
award dated June 28, 1985 fixed the market value of the acquired land of
the appellants in the appeals at a flat rate of Rs. 16.54 per sq. yd. First
F Appeals Nos. 586, 587 and 641 of 1985 were filed by the appellants in
appeals arising out of S.L.P. (C) Nos. 391-393 of 1992 against the said
award of the tribunal. The appeals were allowed by a division bench of the
High Court (K.P. Singh and P.P. Gupta, JJ.) by judgment dated April 18,
1991 whereby the belting system was restored and compensation amount
has been enh"!lced to Rs. 25.00 per sq. yd. for the lands falling in the first
G belt, Rs. 23.50 per sq. for the lands falling in the second belt and Rs. 20.00
per sq. yd. fol the lands falling in the third belt. Solatium at the rate of
30% on the amount of enhanced compensation has been awarded and
interest at th~ rate of 9% for the first year from the date of taking
possession and at the rate of 15% per annum for the subsequent years has
H been awarded, The High Court has, however, not awarded the amount
AWASEVAMVIKASPARISHADv. GYANDEVI(S.C.AGGARWAL,J.] 653
payable under sub-section (1-A) of Section 23 of the L.A. Act. Appeals A
arising out of S.L.P. (C) Nos. 391-393 of 1992 have been filed by the land
owners against the said judgment of the High Court In this Court. The
appellants in appeals arising out of SLP (C) Nos. 15810-12/91 filed First
Appeals Nos. 584, 585 and 642 of 1985 in the High Court against the award
the tribunal. The said appeals were, however, dismissed by another division B
bench of the High Court (N.N. Mithal and K.K. Chaubey JJ.) by Judgment
dated December 21, 1990 and the award of the tribunal awarding com-
pensation @ Rs. 16.50 per sq. yd. was maintained. The High Court also
negatived the claim of the land owners for the amount payable under
Section 23 (1-A) of the L.A. Act. Feeling aggrieved by the said judgment
of the High Court, appeals arising out of S.L.P. (C) Nos. 15810-12/91 have C
been filed by the land owners.
The Board was not impleaded as a party in the reference before the
tribunal or in the appeals before the High Court.
On September 9/10, 1991, the Board filed review petitions in the D
High Court for the review of the judgment dated April 18, 1991 in First
Appeals Nos. 586, 587 and 641 of 1985 and the delay in filing of the said
review petitions was explained on the ground that the Board become aware
of the decision of the High Court only on August 19, 1991 when the then
Legal Advisor of the Board read the said judgment of the High Court in E
the law reports. The said review petitions were dismissed by the High Court
by order dated January 20, 1993 on the ground of delay and for want of
paying proper court fees Appeals arising out of S.L.P. (C) Nos. 15085/93,
15057/93 and 13858/93 have been filed by the Board against the said order
of the High Court.
F
The Board has also filed applications for being impleaded as a party
in the appeals filed by the land owners in this Court.
The question which needs to be determined is whether the L.A. Act
confers any right on the Board to participate at the stage of determination G
of compensation for the land which is sought to be acquired under Section
55 of the U.P. Act read with the provisions of the L.A. Act, as modified
by the Schedule to the U.P. Act and to assail such determination if the
Board feels aggrieved by the same. As indicated earlier, by virtue of Section
3(i) that has been introduced in the L.A. Act by the U.P. Act the Board
is a local authority for the purpose of the L.A. Act. The question H
654 SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.
A aforementioned has, therefore, to be examined in the light of the provisions
contained in the L.A. Act relating to acquisition of land for a local
authority. The provisions which have a bearing on this question are con-
tained in Section 50 of the L.A. Act which reads as under :
"$0. Acquisition of land at cost of a local authority or Company. -
B (1) Where the provisions of this Act are put in force for the
purpose of acquiring land at the cost of any fund controlled or
managed by a local authority or of any Company, the charges of
and incidental to such acquisition shall be defrayed from or by
such fund or Company.
c (2) In any proceeding held before a Collector or Court in such
¢ases the local authority or Company concerned may appear and
adduce evidence for the purpose of determining the amount of
compensation :
D Provided that no such local authority or Company shall be
~ntitled to demand a reference under Section 18.'
Sub-section (2) of Section 50 enables a local authority to appear in any
acquisition proceeding at the stage of determination of compensation
before the Collector or the reference court and adduce evidence for the
E purpose of determining the amount of compensation. The object underly-
ing the aforesaid provision appears to be to safeguard the interests of the
local authority who would be required to pay the amount of compensation
that would be determined by the Collector or by the Reference Court by
enabling it to adduce evidence having a bearing on the amount of compen-
F sation ~fore the Collector or the Court and thereby assist them in niiling
a fair determination. Such protection was n~cessary because in the matter
of acquisition under the Land Acquisition· Act a local authority for whom
the land is acquired does not stand on the same footing as the Government.
While making the award the Collector acts as an agent of the Government
and functions under its administrative control. Prior to the iDsertion of the
G Proviso in sub-section (1) of Section 11 of the L.A. Act by the Land
Acquisition (Amendment) Act, 1984; there were administrative instruc-
tions r¢quiring preliminary valuation by the Collector of the land being
acquired and if the Collector found that the eventual aware! would substan-
tially exceed the provisional valuation he was required to obtain further
H instructions from the higher authorities. Now the proviso inserted in sub-
AWASEVAMVIKASPARISHADv. GYANDEVI [S.C.AGGARWAL,J.] 655
section ( 1) of Section 11 by the Amendment Act of 1984 lays down the A
statutory requirement that no award shall be made by the Collector without
previous approval of the appropriate Government or of such officer as the
appropriate Government may authorize in this behalf. There is no similar
provision requiring the approval of the local authority. Sub-section (2) of
Section 50 is the only provision which affords a certain degree of protection B
to it in the matter of determination of the amount of compensation by the
Collector as well as the Reference Court. Keeping these considerations in
view we are of the opinion that sub-section (2) of Section 50 must be
construed as conferring a right on the local authority for whom the land is
being acquired to participate in the acquisition proceedings at the stage of
determination of the amount of compensation before the Collector as well C
as the reference court.
The said right can be effeetively exercised by the local authority only
if it has information for the proceedings which are pending before the
Collector as well as the reference court. In other words the right conferred D
under Section 50(2) of the L.A. Act carries with it the right to be given
adequate notice by the Collector as well as the ·reference court before
whom the acquisition proceedings are pending of ihe date on which the
matter of determination of the amount of compensation will be taken up.
Service of such a notice, being necessary for effectuating the right con-
ferred on the local authority under Section 50(2) of the L.A. Act, can, E
therefore, be regarded as an integral part of the said right and the failure
to give snch a notice would result in denial of the said right unless it can
be shown that the local anthority had knowledge about the pendency of
the acquisition proceedings before the Collector or the reference court and
has not suffered any prejudice on &ccount of failure to give such notice. F
The only limitation on the right conferred by Section 50(2) is that
contained in the proviso to Section 50(2) which precludes the local
authority from demanding a reference under Section 18. In the report of
the Select Committee the policy underlying the proviso has been thus
explained : G
'........ We cannot however agree that the authority should be
permitted to appeal from the Collector's award. We have not given
to Government itself the power to make this appeal because the
Collector is only the agent of the Government in the acquisition H
656 SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.
A of land; his action is taken under the rules laid down for his
guidance which include a preliminary valuation and these rules
ordinarily provide and sought to provide, that when the Collector
finds cause to anticipate that his eventual provisional estimate, he
shall stay all proceedings till he receives the further instructions of
higher authority. No local authority or company is compelled to
B proceed under the Land Acquisition Act. If it can procure land
m,bre cheaply by private negotiations, it is certainly at liberty to do
so but if elects to set in motion the very special power given to the
Government for public objects, it can expect no higher privileges
aiid powers than those given to G<lvernment itself."
c
(See : V.G. Ramachandran - Law of Land Acquisition and Com-
pensation, 7th Edn., Vol.-1 at p. 1045)
Having regard to the difference between the position of a local authority
D , for whom the land is acquired and the Government in the matter of
determination of the amount of compensation by the Collector to which
the reference has been made by us earlier and especially after the insertion
of the proviso in Section 11(1) in L.A. Act by the Amendment Act of 1984
the fact that no right has been conferred on the Government to seek a
reference under Section 18 may not be a sufficient justification for denial
E of such, a right to a local authority. While it is true that a local authority is
not compelled to proceed under the L.A. Act and if it can procure land
more cheaply by private negotiations it is certainly at liberty to do so but
there may be cases, as in the case of acquisition of land for the Board,
where it is permissible for a local authority to take possession of the land
F which ,is being acquired under Section 17(1) before the making of the
award, by the Collector. In such a case the local authority would have no
choice but to pay the amount of compensation as determined by the
Collector. We have adverted to these aspects not with a view to find fault
with the legislative policy underlying the enactment of the proviso in
sub-section (2) of Section 50 of the L.A. Act but only to highlight the
G signifJ.cance of the protection that has been made available to a local
authority in the matter of determination of compensation under sub-section
(2) of Section 50 of the L.A. Act
Thus, on an interpretation of the provisions of Section 50(2) of the
H L.A. Act, it must be concluded that, subject to the limitation contained in
AWASEVAMVIKASPARISHADv. GYANDEVI [S.C.AGGARWAL,J.] 657
the proviso, a local authority for whom land is being acquired has a right A
to participate in the proceedings for acquisition before the Collector as
well as the reference court and adduce evidence for the purpose of
determining the amount of compensation and the said right imposes an
obligation on the Collector as well as the reference court to give a notice
to the local authority with regard to the pendency of those proceedings and B
the date on which the matter of determination of amount of compensation
would be taken up. The recognition of this right raises the question whether
the local authority, feeling aggrieved by the determination of the amount
of compensation by the Collector or the reference court, can take recourse
to any legal remedy. Before dealing with this question we would take note
of the decisions of this Court have a bearing on the issue. C
In the State of Karnataka, Section .20 of the L.A. Act has been
modified by Land Acquisition (Mysore Extension Amendment) Act, 1961
(17 of 1961) and an express provision has been made that the reference
court shall serve a notice on the Deputy Commissioner, all persons inter- D
ested in the reference and, if the acquisition is not made for Government,
the reference court shall serve a notice on the person or authority for whom
it is made. In Neelgangabai & Anr. v. State of Kamataka & Ors., [1990) 3
SCC 617, tl\e said provision came up for consideration before this Court.
Land was acquired for the Hubli-Dharwar Municipal Corporation but no
notice as required by Section 20 was issued to the municipal corporation E
by the reference court which enhanced the amount of compensation. The
municipal corporation moved the High Court by filing a writ petition under
Article 226 of the Constitution challenging the validity of the civiLcourt's
judgment directing higher compensation to be paid. The said writ petition
was allowed by the High Court and the said judgment was affirmed in F
appeal by this Court. It was observed :
"Admittedly the land was acquired for the purpose of the respon-
dent-Corporation and the burden of payment of the compensation
is on the Corporation. In this background the High Court has held G
that it was mandatory for the court of reference to have caused a
notice to be served on the respondent-Corporation before
proceeding to determine the compensation claim. Since no notice
was given to the respondent-Corporation and it was thus deprived
of an opportunity to place its case before the court, the judgment
· rendered in the reference case was illegal and not binding on the H
658 SUPREME COURT REPORTS (1994) SUPP. 4 S.C.R.
A corp(uation. We are in agreement with this view." (p. 618)
Similarly, in Krishi Upaj Mandi Samiti v. Ashok Singhal & Ors., 1991
Snpp. (2) SCC 419, there was a requirement to serve a notice on the
person or bo,dy for whose benefit the acquisition was made. Such a notice
was not ser\'.ed on the Krishi Upaj Mandi Samiti by the reference court
B which enhar\ced the amount of compensation awarded by the Land Ac-
quisition Officer and the said amount was further enhanced by the High
Court which also did not serve a notice on the Krisi Upaj Mandi Samiti.
The said decision of the High Court was set aside by this Court in appeal
and the matter was remitted to the High Court for a fresh disposal in
accordance with law after affording a hearing to the Krishi Upaj Mandi
C Samiti. In that case the court did not set aside the award of the reference
court, although no notice was served by that cour~ for the reason that the
Samiti had accepted and was satisfied with the award of the reference
court.
D In Union of India v. Sher Singh & Ors., (1993] 1 SCC 608, land was
acquired for the purpose of Union of India and Union of India had moved
an application before the reference court for being impleaded in the array
of the respondents. The said application was rejected by the reference
court and the said order was affirmed by the High Court in revision. This
Court rev¢rsed the said order of the High Court and allowed the applica-
E tion of Ul)ion of India for impleadment and held that it was entitled to file
an appeal in the High Court against the judgment of the reference court.
In Union of India v. Kol/uni Ramaiah & Ors., (1994) 1 SCC 367,
acquisition was made under the provisions of the Requisitioning and
F Acquisition of Immovable Property Act, 1952 for the purpose of Union of
India an!! the arbitrator had enhanced the amount of compensation that
was awarded by the competent authority. The said amount was further
enhanced in appeal by the High Court. The Union of India was not
impleaded as a party to the proceedings either before the arbitrator or
before the High Court. The Union of India challenged the judgment of the
G High Court in this Court. After observing that : "Properly speaking the
Union Qf India ought to have been made a party both before the arbitrator
and the High Court" this Court, exercising its powers under Article 142 of
the Col)stitution, remitted the matter to the High Court with the direction
that the special leave petitions filed by the Union of India in this Court
H must be treated as cross-objections before the High Court against the
AWASEVAMVIKASPARISHADv. GYANDEVI[S.C.AGGARWAL,J.] 659
award of the arbitrator. A
At this stage we may also refer to two other decisions which, though
not relating to determination of the amount of compensation, have a
bearing on the locus standi of a local authority for whom land is being
acquired to file an appeal against an adverse order of the High Court under
Article 226 of the Constitution. B
In The Municipal Corporation of the City of Ahmedabad v. Chandulal
Shamaldas Patel & Ors., [1971) 3 SCC 821, land was sought to be acquired
for the purpose of the Ahmedabad Municipal Corporation. Notifications
issued under Sections 4 and 6 were , however, challenged by the land owner C
before the High Court under Article 226 of the Constitution wherein the
Municipal Corporation was also impleaded as respondent but no relief was
claimed against it. The said Notifications were quashed by the High Court.
The Municipal Corporation filed an appeal to thi$ Court against the said
decisfon of the High Court. A preliminary objection was raised with regard
to the maintainability of the said appeal on the ground that the Municipal D
Corporation was not aggrieved by the said order. The said objection was
upheld by this Court on the view that although the property was notified
for acquisition by the State Government for use of the Municipal Corpora-
tion after it was acquired by the Government, that clid not confer any
interest in the Municipal Corporation so as to enable it to file an appeal E
against the order of the High Court allowing the petition.
In Himalayan Tiles & Marbles (P) Ltd. v. Francis Victor Countinho
(Dead) by Lrs. & Ors., [1980) 3 SCR 235, land was sought to be acquired
for the purpose of a company. After the award had been made and the
land had vested in the Government and stood transferred to the company F
the land acquisition proceedings alongwith the notifications under Sections
4 and 6 of the L.A. Act were quashed by the learned Single Judge of the
High Court on a writ petition filed by the owner of the land under Article
226 of the Constitution. The Letters Patent Appeal filed by the Company
against the said decision of the learned Single Judge was dismissed by the G
division bench of the High Court on the ground that the company had no
locus standi to file the appeal as it was not a person interested within
Section 18(1) of the L.A. Act. The said view was reversed by this Court
and it was observed :
"Since under the agreement the company had to pay the compen- H
660 SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.
A sati()n, it was most certainly interested in seeing that a proper
quantum of compensation was fixed so that the company may not
have to pay a very heavy amount of money. For this purpose, the
company could undoubtedly appear and adduce evidence on the
question of the quantum of compensation." (p. 240)
B This Court further observed that the definition of the word "person inter-
ested" must be liberally construed so as to include a body, local authority,
or a company for whose benefit the land is acquired and who is bound
under an agteement to pay the compensation. According to this Court:
c "How can it be said that a person for whose benefit the land is
acqµired .nd who is to pay the compensation is not a person
interested even though its stake may be extremely vital? For
instance, the land acquisition proceedings may be held to be invalid
and thus a person concerned is completely deprived of the benefit
which is proposed to be given to him. Similarly, if such a person
D
is not heard by the Collector or a court, he may have to pay a very
heary compensation which, in case he is allowed to appear before
a court, he could have satisfied it that the compensation was far
too heavy having regard to the nature and extent of the land." (p.
243)
E
The <;:ourt has taken note of "general consensus of judicial opinion
that even though a company may not have any title to the property yet it
certainly has a right to appear and put forward its case in the matter of
determination of the quantum of compensation" (p.240). The Court has
F also consid~red the definition of "person interested" contained in Section
3(b) of the L.A. Act and has held that the company for whom the. land is
acquired is a "person interested" for the purpose of Section 18(1) of the
L.A. Act. The Court appears to have gone into this question for the reason
that the Letters Patent Bench in the High Court had held that the company
G was not a "person interested" within the meaning of Section 18(1) of the
L.A. Act. Having regard to the express provision contained in the proviso
to Section 50(2) of the L.A. Act, it would not be correct to say that a local
authority or a company for whom land is acquired is a "person interested"
under Section 18(1) of the L.A. Act because on that view a local authority
or a company would be entitled to seek a reference against the award of
H the Collector which would run counter to the proviso to Section 50(2). It
AWASEVAMVIKASPAR!SHADv. GYANDEVI (S.C.AGGARWAL,J.] 661
was, therefore, not correct to place reliance on Section 18(1). But the A
conclusion in Himalayan Tiles's case (supra) that the company had the
locus standi to file an appeal is right when the said judgment is read in the
context of Section 50(2). For that reason, we are unable to endorse the
view taken in Municipal Corporation of City of Ahmedabad v. Chandulal
Shamaldas Patel (supra).
B
We would now revert to the question regarding the legal remedies
that are available to a local authority which feels aggrieved by the deter-
mination of the amount of compensation by the Collector or by the
Reference Court. In this context, it may be stated that the limitation placed
by the proviso on the right conferred by Section 50(2) of the L.A. Act C
cannot be so construed as to deprive the local authority which feels
aggrieved by the determination of the amount of compensation by the
Coll.ector or by the Reference Court to invoke the remedy under Article
226 of the Constitution as well as the remedies available under .the L.A.
Act. The proviso to section'50(2) only takes away the remedy of a reference
under Section 18 of the L.A. Act. Examining this question in the context D
of the proceedings before the Collector we can envisage the following
situations :
(i) No notice was given to the local authority under sub-section (2)
of Section 50 of the L.A. Act and as a result the local authority could not E
appear before the Collector to adduce evidence;
(ii) Notice was served on the local authority and in response to said
notice the local authority appeared before the Collector; and
(iii) Notice was served on the local authority but inspite of service of F
such notice the local authority failed to appear and adduce evidence before
the Collector.
In a case where no notice is given to the local authority the position
of the local authority is not different from that of the Municipal Corpora- G
lion inNeelgangabai &Anr. v. State of Kamataka, (supra). In that case there
was an express provision in section 20 of L.A. Act as modified by Land
Acquisition (Mysore Extention Amendment) Act, 1961 providing for ser-
vice of notice on the person or local authority for whom the acquisition is
made. On a construction of Section 50(2) we have found that service of
such a notice is implicit in the right conferred under Section 50(2) of the H
•
662 SUPREMECOURTREPORTS (1994)SUPP.4S.C.R.
A L.A. Act, Since !the failure to give a notice would result in denial of the
right conferred qn the local authority under Section 50(2) it would be open
to the local autJlority to invoke the jurisdiction of the High Court under
Article 226 of thjo Constitution to challenge the award made by the Collec-
tor as was done :in Neelgangabai case (supra). In a case where notice has
B been served on the local authority and it has appeared before the Collector
the local autho~ity may feel aggrieved on account of it being denied
opportunity to a!lduce evidence or the evidence adduced by it having not
been considered by the Collector while making the award or the award
being vitiated by! malafides. Since the amount of the compensation is to be
paid by the local authority and it has an interest in the determination of
C the said amount, which has been given recognition in Section 50(2) of the
L.A. Act, the lo¢al authority would be a person aggrieved who can invoke
the jurisdiction c)f the High Court under Article 226 of the Constitution to
assail the award !in spite of the proviso precluding the local authority from
seeking a refer~nce. Such a challenge will, however, be limited to the
D grounds on whi4h judicial review is permissible under Article 226 of the
*
Constitution. In case where the local authority has failed to appear inspite
of service of nopce the local authority can have no cause for grievance.
Even in such a dase it may be permissible for the local authority to invoke
the jurisdiction <!>f the High Court under Article 226 of the Constitution to
assail the award: if it is vitated by malafides or is perverse.
E
We may npw come to the stage of the proceedings before the court
in a reference uµder Section 18 of the L.A. Act made at the instance of a
person having interest in the land being acquired. At this stage also Section
50(2) of the L.A, Act envisages that the local authority has a right to appear
F and adduce evidence before the Court. This right is independent of the
right that is available to the local authority to appear and adduce evidence
before the Collector. Even though the local authority had failed to appear
before the Collector inspite of notice or had appeared in response to notice
and had adduce!! evidence the local authority may consider it necessary to
adduce evidenc~ to rebut the evidence adduced by the person who has
G sought the reference and to defend the award made by the Collector.
Failure to give qotice at this stage would result in denial of the said right
of the local aut4ority. Before we consider the remedy that is available for
seeking redress :against the denial of this right we may examine whether
the local author\ty has a right to be irnpleaded as a party in the proceedings
H before the refetence court. That raises the question whether the local
I
'
I
I
AWASEVAMV!KASPARISHADv. GYANDEV! (S.C.AGGARWAL,J.] 663
authority can be regarded as a necessary or a proper party. The l~w is well A
settled that a necessary. party is one without whom no order can be made
effectively and a proper party is one in whose absence an effective order
can be made but whose presence is necessary for a complete and final
decision of the question involved in the proceeding. (See: Udit Narain Singh
Malpaharia v. Additional Member, Board of Revenue, (1963] Supp. 1 SCR B
676, at p. 681. A local authority for whom land is being acquired has a right
to participate in the acquisition proceedings in the matter of determination
of the amount of compensation while they are pending before the Collector
and to adduce evidence in the said proceedings. While it is precluded from
seeking a reference against the award of the Collector it C"Jl defend the
award and oppose the enhancement of the amount of compensation sought C
before the reference court by the person interested in the land. Moreover
the local authority has a right to appear and adduce evidence before the
reference court. Having regard to the aforesaid circumstances, we are of
the opinion that the presence of the local authority is necessary for the
decision of the question involved in the proceedings before the reference D
court and it is a proper party in the proceedings. The local authority is,
therefore, entitled to be impleaded as a party in the proceedings before
the reference court.
In case the amount of compensation has been enhanced by the court
and no appeal is filed by the Government the local authority if adversely E
affected by such enhancement may file an appeal with the leave of the
court. This right of the local authority does not depend on its being
impleaded as a party in the proceedings before the reference court. Even
if the local authority is not impleaded as a party before the reference court
it can file an appeal against the award of the reference court in the High F
Court after obtaining leave if it is prejudicially affected by the award. In
case the Government files an appeal against the enhancement of the award
the local authority is entitled to support the said appeal and get itself
impleaded as a party. When the person having an interest in the land files
an appeal in the High Court against the award of the reference court and
seeks enhancement of the amount of compensation the local authority G
should be impleaded as a party in the said appeal and it is entitled 'to be
served the notice of the said appeal so that it can defend the award of the
reference court and oppose enhancement of the amount of compensation
before the High Court. The same will be the situation in case of an appeal
to this Court from the decision of the High Court. H
664 SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.
A Under Section 50(2) of the L.A. Act the company for whom land is
being acquired is also entitled to appear and adduce evidence for the
purpose of determining the compensation. Since the company for whom
land is acquire!i stands on the same footing as a local authority whatever
has been said with regard to an local authority would apply to a company.
It is, however, made clear that matters which stand finally concluded will
B not be reopened.
To sum up, our conclusions are :
1. Section 50(2) of the L.A. Act confers on a local authority for whom
C land is being acquired a right to appear in the acquisition proceedings
before the Collector and the reference court and adduce evidence for the
purpose of determining the amount of compensation.
2. The said right carries with it the right to be given adequate notice
by the Collector as well as the reference court before whom acquisition
',) proceedings are pending of the date on which the matter of determination
'of compensation will be taken up.
3. The proviso to Section 50(2) only precludes a local authority from
seeking a reference but it does not deprive the local authority which feels
aggrieved by the determination of the amount of compensation by the
E Collector or by the reference court to invoke the remedy under Article 226
of the Constitution as well as the remedies available under the LA. Act.
4. In the event of denial of the right conferred by Section 50(2) on
account of failure of the Collector to serve notice of the acquisition
proceedings the local authority can invoke the jurisdiction of the High
F Court under Article 226 of the Constitution.
5. Even when notice has been served on the local authority the
remedy under Article 226 of the Constitution would be available to the
local authority on grounds on which judicial review is permissible under
G Article 226.
6. The local authority is a proper party in the proceedings before the
reference court and is entitled to be impleaded as a party in those proceed-
ings wherein it can defend the determination of the amount of compensa-
tion by the Collector ·and oppose enhancement of the said amount and also
H adduce evidence in that regard.
AWASEVAMVIKASPARISHADv. GYANDEVI [S.C.AGGARWAL,J.] 665
7. In the event of enhancement of the amount of compensation by A
the reference court if the Government ~oes not file an appeal the local
authority can file an appeal against the award in the High Court after
obtaining leave of the court.
8. In an appeal by the person having an interest in land seeking
enhancement of the amount of compensation awarded by the reference B
court the local authority, the should be impleaded as a party and is entitled
to be served notice of the said appeal. This would apply to an appeal in
the High Court as well as in this Court.
9. Since a company for whom land is being acquired has the same C
right as a local authority under Section 50(2), whatever has ~een said with
regard to a local authority would apply to a company too.
10. The matters which stand finally concluded will, however, not be
reopened.
D
We may now consider whether in the facts of the present case the
Board can be held entitled to any relief. It is not disputed that no notice
under sub-section (2) of Section 50 of the L.A. Act was served on the
Board either ·by the Special Land Acquisition Officer or by the Tribunal.
The Board, however, did not feel aggrieved by the award made by the E
Special Land Acquisition Officer or by the Tribunal. It felt aggrieved only
by the decision of the High Court dated April 18, 1991 in First Appeals
Nos. 586, 587 and 641 of 1985 whereby the amount of compensation as
determined by the Tribunal was enhanced. The Board does not seem to be
aggrieved by the judgment of the High Court dated December 21, 1990 in
First Appeals Nos. 584, 585 and 642 of 1985 whereby the High Court has F
maintained the award of the Tribunal. In these circumstances, it would be
just and proper that the Board is heard by the High Court in the appeals
filed by the land owners who are seeking enhancement of the amount of
compensation awarded by the Tribunal before any such enhancement is
made in the said appeals. G
We, therefore, allow the applications submitted by the Board for
being impleaded as a respondent in the appeals filed by the land owners
in this Court and-direct that the Board be also impleaded as a respondent
in the appeals filed by the land owners in the High Court. The judgment
of the Allahabad High Court dated December 21, 1990 in First Appeals H
666 SUPREME COURT REPORTS (1994) SUPP. 4 S.C.R.
A Nos. 584, 585 and 642 of 1985 and the judg:nent of the said High Court
dated April 18, 1991 in First Appeals Nos. 586, 587 and 641of1985 as well
as the order dated January 20, 1993 on the review applications filed against
the judgment dated April 18, 1991 are set aside and the said appeals are
remitted to the High Court for decision in accordance with law. The
appeals are disposed of accordingly. There will be no order as to costs.
B
R.M. SAflAI, J. The U.P. Avas Evam Vikas Parishad (Uttar Pradesh
Housing and Development Corporation) a statutory Board created under
the Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965 (U.P. Act
No. 1 of 1966) (hereinafter referred to as 'the Act') with power to frame
C and execute !lousing scheme and other projects, to plan and co-ordinate
various housing activities and perform other functions as provided in the
Act seeks adjudication on the question of law whether the Corpora-
tion/Board is a necessary party in proceedings for determination of com-
pensation of :the land acquired under the Land Acquisition Act, 1894
D (referred as 'the L.A. Act') as amended by the Act.
Facts even though s!i.ort and simple are necessary to be mentioned,
in brief, at this stage only for deciding the issue of non- impleadment of
the appellant, a local authority in compensation proceedings. Suffice it to
mention that the Board did not appear before the Collector nor any
E opportunity was sought by it to lead evidence on compensation, as
provided by section 50 of the L.A. Act, consequently it was not made a
party either before the Tribunal which under the Act is empowered to hear
reference against the award made by the Collector or in first appeal in the
High Court. What is claimed is that the Board came to known of the
F decisions of the High Court and of the Tribunal after the claimants filed
special Lave Petitions in this Court claiming additional compensation
under Section 23(1-A) of the Land Acquisition (Amendment) Act of 1984. 1
Consequently it filed an application before the High Court for recall and
review of the order passed by it but the applications having been rejected
it has approa~hed this Court by way of these appeals. The Board has also
G filed application in other Special Leave Petitions filed by the claimants for
being impleaded and seeks same relief, namely, setting aside the order of
the High Court as it was passed without impleading necessary party. The
ground for seeking recall of the order passed by the High Conrt was
founded on the right of the acquiring body, a local authority, to be
H impleaded as a party in the reference. The entire proceedings are said to
AWAS EVAMVIKAS PARISHADv. GYAN DEVI [R.M.SAHAl,J.] 6fJ7
. be vitiated as in absence of the Board which is a statutory body and which A
I has to pay compensation for the land acquired the proceedings could not
I have been decided and no order could have been passed adversely affect-
ing it as it has to pay compensation and is statutorily entitled to lead
evidence. Non- implementation or failure to give notice amounted to denial
of natural justice.
B
To appreciate the controversy it appears necessary to give, in brief,
the provisions of the Act itself to ascertain the nature and duty which the
Board is expected to perform, the extent and power it enjoys in acquiring
the land and the manner in which such power is to be implemented. As
the preamble of the Act shows it was enacted. to provide for the .es tab- C
lishment and functioning of a housing and development board. Section 15
of the Act prescribes the functions of such Board which includes power to
frame and execute housing activities, improvement schemes and other
projects and discharge various other functions. Clause (k) of sub-section
(1) 'of Section 15 empowers the Board to acquire moveable and immovable
properties for any of the purposes mentioned in the Section. Section 16 D
provides that the Board may make a housing or improvement scheme on
its own motion or at the instance of a local authority. Section 17 provides
those matters which could be provided in the scheme. Sections 18 to 27
describe the various types of housing or improvement schemes which the'
Board may undertake. Section 28 requires the Board to give notice of the E
scheme by publication in Gazette and two daily newspapers having circula-
tion in the area comprised in the scheme. Sub- section (3) of Section 28
requires the Housing Commissioner to deliver copy of the map, details of
land proposed to be acquired to any person who applies for the same.
Section 29 requires the Board to serve notice within six weeks of the
publication of notice under section 28 on classes of persons whose land is F
to be acquired intimating them that the Board proposes to acquire the
land. Section 30 entitles the person concerned to file objection and under
Section 31 the Board may after giving opportunity of hearing to the
objector either abandon the scheme or sanction it and if the scheme
exceeds Rs. Twenty lakhs then submit to the State Government for sanction
with such modifications as the Board may suggest. Section 32 requires the G
Board to notify the scheme as sanctioned by the Board or the State
Government. The effect of such notification under Section 32 is that the
scheme comes into force from the date of the notification.
For purposes of acquiring land to implement the notified scheme the H
668 SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.
A Act empoweri the Board to take action under LA Act to the extent it is
modified by t~e Act. Section 55 of the Act is extracted below :
"55. Power to acquire land • (1) Any land or any interest therein
required by the Board for any of the purposes of this Act, may be
acquired under the provisions of the Land Acquisition Act, 1984
B (Act No. 1of1894), as amended in its application to Uttar Pradesh,
whic4 for this purpose shall be subject to the modifications
specified in the Schedule to this Act.
(2) If any land in respect of which betterment fee has been levied
unde~ this Act is subsequently required for any of the purposes of
c this A.ct, such levy shall not be deemed to prevent the acquisition
of th¢ land under the Land Acquisition Act, 1894 (Act No. 1 of
1894)."
The modifications in the L.A. Act by the Schedule are reproduced
D to the extent (hey are relevant :
"2, Effect of notices under this Act. • (1) The first publication,
in the Official Gazette, of a notice of any housing or improvement
scheme under Section 28 or under clause (a) of sub-section (3) of
Section 31 of the Act shall be substituted for and have, in relation
E · to any land proposed to be acquired under the scheme, the same
effeci as publication in the Official Gazette, and in the locality, of
a notification under sub-section (1) of Section 4 of the said Act,
except where a notification under Section 4 or a declaration under
Section 6 of the said Act has previously been made and is still in
F force, and the provisions of Section 5-A of the said Act shall be
inapplicable in the case of such land.
(~The issue of a notice under clau5e (c) of sub-section (3) of
Section 23 of this Act in the case of land acquired under a Bhavi
Sarak Yojana and the publication of a notification under sub-sec·
G tion (1), or as the case may be under sub-section (4) of Section 32
of this Act in the case of land acquired under any other housing
or improvement scheme under this Act shall be substituted for and
have 'the same effect as a declaration by the State Government
under Section 6 of the said Act, unless a declaration under the last
H mentioned section has previously been made and is still in force.
AWASEVAMVIKASPARISHADv. GYANDEVI[R.M.SAHAl,J.] 669
{3) In a case to which sub-paragraph (1) or sub- paragraph (2) A
applies, a notification under sub-section (2) of Section 33 or under
sub-section {3) of Section 49 of the Act involving alteration of the
extent of the land proposed to be acquired shall have the effect of
correspondingly modifying the notification under sub-section (1)
of Section 4 and declaration under Section 6 of the said Act, so,
however, that any such modification shall be without prejudice to
B
the validity of anything previously done under the original notifica-
tion or declaration.'
"5. Amendment of Section 23 of the said Act - In Section 23
of the said Act - c
(i) for existing explanation to the clause "firstly", the following shall
be deemed to be substituted :
'Explanation - In judging the market value aforesaid in any case
were a land is acquired under a housing or improvement scheme D
under the Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam,
1965, if any building has been erected, re- erected, added or altered
in contravention of the provisions of clause (a) of sub-section (3)
of Section 23, sub-section (3) of Section 24 or Section 35 of the
said Adhiniyam, any increase in the market value resulting from E
such erection, re-erection, addition or alteration shall be dis-
regarded.';
(ii) after the existing sub-section (1) the following shall be added
as sub-section {2), namely -
F
"{2) In addition to the market value of the land as above
provided, the court shall in every case award a sum of fifteen
percentum of such market value in consideration of the compulsory
nature of the acquisition.'
The acquisition as is clear from Section 55 of the Act is under the
G
provisions of the L.A. Act except to the extent it has been modified by the
Schedule. Proceedings under Section 28 and notification under Section 32
are analogous to Sections 4 and 6 of the L.A. Act. But once notification
under Section 32 of the Act has been issued it is the L.A. Act which comes
into operation. The Collector takes over for acquisition under Section 7 of H
670 SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.
A the L.A. Act for marking out, measuring and planning under Section 8 and
issuing notices under Section 9 to the persons interested intimating them
that the Government intends to take possession and claims for compensa-
tion may be made to him who after making enquiries is required to make
award under Section 11 of the L.A. Act. But for reference to the Court
against the award the Act has made a departure and provided for creation
B of Tribunal under Section 64 of the which is reproduced below :
"64. Functions and constitution of Tribunal - (1) The State Govern-
ment may, by notification in the Gazette, constitute one or more
Tribunals for the purposes of -
c (a) performing the functions of the Court with reference to
the acquisition of land for the Board under the Land Acquisi-
tion Act, 1894 (Act No. 1 of 1894), as modified by the
Schedule to this Act;
D (b) determining, in case of dispute and on reference in the
prescribed manner the compensation payable by the Board
under the various provisions of this Act;
(c) deciding appeals relating to levy or assessment of better-
ment fee;
E
( d} deciding appeals under Sections 36 and 37; and
( e) deciding such other matters as may be prescribed.
(2) The Tribunal shall exercise jurisdiction with respect of such
F area as may be specified in the notification under sub section (1).
(3) The Tribunal shall consist of a civil judicial officer not below
the rank of District Judge.
Explanation - The expression "District Jud~e" includes an addi-
G tional District Judge.
(4) Except as otherwise provided by or under this Act, the Tribunal
shall have the same powers as are vested in a civil court under the
Code of Civil Procedure, 1908 (Act No. VI of 1908), shall follow
H the same procedure as laid down in that Code, and shall be deemed
AWASEVAMVIKAS PARISHADv. GYANDEVI[R.M.SAHA!,J.] 671
to be a civil court within the meaning of Sections 480 and 482 of A
the Code of Criminal Procedure, 1898 (Act No. V of 1898), and
any proceeding before the tribunal shall be deemed to be a judicial
proceeding within the meaning of Sections 193 and 228 of the
Indian Penal Code {Act No. XLV of 1860).
(5) The judicial officer appointed as Tribunal shall be paid such B
remuneration as may be prescribed.
(6) The Tribunal may, with the previous sanction of the State
Government, appoint such officers and servants as it considers
necessary for the conduct of its business, and the remuneration C
and other conditions of service of such officers and servants shall
be such as may be prescribed.
(7) The remuneration payable to the judicial officer appointed as
Tribunal and other officers and servants of the Tribunal shall be
paid out of the fund of the Board.' D
The award by the tribunal becomes an award of the Court under L.A. Act
as is clear from Section 66{1) of the Act which is extracted below:
'66. Finality of decisions of Tribunal - (1) An award of the Tribunal
/ in a case relating to the acquisition of land under the Land E
Acquisition Act, 1894 (Act No. 1 of 1894), as modified by the
Schedule to this Act, shall be deemed to be an award of the court
under that Act and shall, subject to the provisions of Section 54
of that Act, be final.
(2) .............'. F
It is thus clear that except for certain modifications and the constitu-
tion of a tribunal for purposes of deciding the reference the entire proceed-
ings are taken under the L.A. Act. The Act does not provide the procedure
in accordance with which the tribunal has to function except that it shall G
have the powers as are vested in the civil court. Section 64{b) no doubt
provides for determining in case of dispute and on reference in the
prescribed manner the compensation payable by the Board but the rules ·
whiCh have been framed in exercise of power under Section 94 of the Act
have not provided any procedure as to how the reference has to be heard
and what procedure has to be followed. The Act is thus silent on affording H
672 SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.
A any opportuni.ty of hearing to the Board while hearing the reference under
Section 64 of the Act.
Before proceeding further it would be appropriate to examine the
decisions of this Court on this aspect. In Himalaya Tiles and Marole (P)
Ltd. v. Francif Victor Countinho (dead) by Lrs, AIR 1980 SC 1118 this Court
B expanded tht meaning of expression 'person interested' in Section 18 of
the L.A. Act and construed it to include a person who is required to pay
compensation. It was· held,
. "It seems to us that the definition of 'a person interested' given
in Section 18 is an inclusive definition and must be liberally
c coru;trued so as to embrace all persons who may be directly or
inditectly interested either in the title to the land or in the quantum
of compensation. In the instant case, it is not disputed that the
lands were actually acquired for the purpose of the company and
on~ the land vested in the Government, after acquisition, it stood
D transferred to the company under the agreement entered into
be!Ween the company and the government. Thus it cannot be said
tha\ the company had to claim or title to the land at all. Secondly
since under the agreement the company had to pay the compen-
satipn it was most certainly interested in seeing that a proper
E quantum of compensation was fixed so that the company may not
have to pay a very heavy amount of money. For this purpose, the
company could undoubtedly appear and adduce evidence on the
qu~tion of the quantum of compensation.'
Support was drawn by the Bench for this from Sunder Lal v. Paramsukhdas,
F [1968) 1 SCR 362 where observations were made to the following effect :
'It ·will be noticed that it is an inclusive definition. It is not
necessary that in order to fall witbin the definition a person sbould
clajm an interest in land, which has been acquired. A person
becomes a person interested if he claims an interest in compensa-
G tioji to be awarded. It seems to us that Paramsukhdas is a 'person
interested' witbin Sec. 3(b) of the Act because he claims an interest
in compensation. ........."
The context in which these observation were made were entirely different.
H Land of one Sunder Lal was acquired. Khusbal Singh was a lessee. In
AWAS EVAMVIKASPARISHADv. GYAN DEVI [R.M.SAHAI,J.] 673
proceedings for compensation Khushal Singh also staked his claim. It was A
accepted. One Paramsukhdas in the meantime had obtained a decree
against Khushal Singh. He, therefore, made an application that he may be
impleaded and· the amount of compensation determined to be paid to
Khushal Singh may be paid to him in satisfaction of his money decree. It
was it this context that the Court observed,
B
"It seems to us that Paramsukhdas was clearly a person inter-
ested in the objections which were pending before the Court in
the references made to it and that he was also a person whose
interest would be affected by the objections within Sec. 21. He was
accordingly entitled to be made a party............. " C
This observation by the Court made in entirely different context could not
have been extended to a case like Himalaya Tiles (supra). The observation
that the words 'person interested' is inclusive definition cannot be disputed.
But with profound respect to the Bench in Himalaya Tiles the words D
'person interested' used in Section 18 were read in isolation. Jn fact this
expression derives its rnlour from Section 9 which requires the Collector
to issue notice to 'persons interested'. In Section 9 it means only those who
are either owners or in any manner interested in compensation for the land.
No different meaning could be given to it in Section 18. It could not be
construed reversely. That is including not only those persons who were E
interested in compensation but even those who were opposed to compen-
sation. In Union of India v. Sher Singh & Ors., JT (1993) SC 693 wherein
it was held that the 'person interested' in Section 18(1) of the L.A. Act. .
should be construed liberally so as to include a body, local authority or a
company for whose benefit the land was acquired under who was bound F
under the agreement to pay the compensation. The Bench mainly relied on
the decision on Himalaya Tiles (supra) which has been adverted earlier. It
is not necessary to advert to various decisions rendered by the High Court
of Punjab and Haryana either in Full Bench or Division Bench to which
reference is made. But it is necessary to advert to Neelgangabai v. State of G
Kamataka, [1990] 3 SCC 617 which was referred and followed by the Bench
in Sher Singh (supra) as the decision given by the Karnataka High Court
that in Land Acquisition proceedings it was necessary to give notice to the
acquiring body was taken to be laying down correct law as it was approved
by this Court as well. In that decision even though the reference was
decided on the basis of consent of the land owners and the State yet the H
674 SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.
A order was set aside by the High Court io writ petition and it was held that
sioce the land was acquired for purposes of the corporation and the burden
of payment of compensation was on it it was necessary to issue show cause
notice on it. But the reason for the taking. the view was not burden of
compensation as understood by the Bench io Sher Singh (supra) but the
statutory provision of Section 20 of the L. A. Act as applicable to the State
B of Karnataka. It is reproduced below :
"20. service of notice - The court shall thereupon cause a notice,
spetjfying the day on which the court will proceed to determioe
the reference, and directiog their appearance before the court on
c that day, to be served on the followiog persons, namely : -
(a) the Deputy Commissioner;
(b) all persons interested in the reference; and
D (c) !f the acquisition is not made for government, the person or
authority for whom it is made."
The decisiml was thus rendered on specific provision of the Act and this
important finding does no appear to have been brought to the notice of
the Court. What is necessary to be mentioned is that the Bench deciding
E the case of Neelgangabai" (supra) did not base its decision on Himalaya
Tiles (supra) as io view of clear provisions io·clause (c) for issuing notice
to the authority for whom the acquisition was being made it did not
consider it necessary to enter into any other controversy. The decision thus
turned on specific provisions of the Karnataka Act and no assistance could
F have been derived from it for deciding if issuiog of notice to acquiriog body
was mandatory io every case where the land was acquired for company or
local authority. Similarly io Krishi Upaj Mandi Samiti v. Ashok Singhal &
Others, [1991] Supp. 2 SCC 419 Section 54 of the Krishi Upaj Act required
notice to be issued to persons interested which included the body for which
the land was being acquired and, therefore, it was conceded before this
G Court that tbe Judgment given by the High Court was liable to be set aside
as it was rertdered io violation of the mandatory provisions of the Act. No
such local amendment to the L.A. Act appears to have been made by the
State of Haryana. Yet the Bench relying on the ratio mainly in Himalaya
Tiles (supra) and the two decisions one, on the Karnataka Act and the
H other under Krishi Upaj Mandi Samiti Adhiniyam, was of the view that no
AWAS EVAMVIKAS PARISHADv. GYANDEVI [R.M. SAHAf,J.] 675
reference by the Court could be decided without impleading the acquiring A
body as party to the proceedings. The decision thus rendered in Union of
India v. Sher Singh (supra) does not lay down the correct law. Nor the
interpretation in the Himalaya Tiles based on construction of the expres-
sion 'persons interested' under Section 18(1) without adverting to Section
9 or any other principle of law can be said to lay down correct law.
B
Having dealt with the decisions and noticed their peculiar features
the principal issue may be reverted whether there is any provision from
which it can be inferred that a local authority much less an acquiring body
is a necessary or even a proper party whose impleadment is necessary and
failure to do so vitiates the proceedings. Allied to this is the issue whether C
even in absence of such provision can the local authority be impleaded on
principle of nature justice or fair hearing and if this be so then to what
extent it is available and how far it affects the proceedings. The relevant
provisions of the Act which are silent on this aspect have already been
noticed. There is no express provision for impleading the acquiring body
or local body in the compensation proceedings. Award is made by the I)
Collector under Section 11 of the L.A Act whereas reference is heard and
decided under Section 64 of the Act. No notice or opportunity of hearing
is contemplated at either stage to the Board or to put it more precisely the
acquiring body. At the award stage it is the Collector who is directed to
take over under directions of the appropriate authority. From the publica- E
lion of notification under section 32, that is Section 6 of the L.A Act, till
making of the award, determining compensation and taking over possession
every proceeding is between Collector and the claimant or the person
interested. The Collector acts for and on behalf of the Government as the
acquisition is at the instance of the Government. The Act does not con-
template presence or absence of the acquiring body in the proceedings F
taken by the Collector, except of the local authority to limited extent which
shall be referred presently. Inquiry under the L.A. Act for determination
of compensation is contemplated both at the stage of making of award by
the Collector under Section 11 or Court under Action 18 of the L.A. Act
and Section 64 of the Act. The scope of the inquiry under Section 11 of
the L.A. Act is confined to the objections, if any, filed by the persons G
interested in pursuance of the notice issued under Section 9 of the L.A.
Act. Who such person is and what objections can be filed by him are
mentioned in Section 9 itself. Section 9 read as under :
"S.9. Notice to persons interested - (1) The Collector shall then H
676 SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.
A cause public notice to be given at convenient places on or near the
land to be taken, stating that the Government intends to take
p¢ssession of the land, and that claims to compensation for all
interests in such land may be made to him.
(2) Such µotice shall state the particulars of the land so needed,
B and shall require all persons interested in the land to appear
personally or by agent before the Collector at a time and. place
therein mentioned (such time not being earlier than fifteen days
after the date of publication of the notice), and to state the nature
of their respective interests in the land and the amount and
c particulars of their claims to compensation for such interests, and
their cbjections (if any) to the measurements made under Section
8. The Collector may in any case require such statement to be
made in writing and signed by the party or his agent.
(3) The Collector shall also serve notice to the same effect on the
D occupier (if any) of such land and on all such persons known or
believed to be interested therein, or to be entitled to act for persons
so interested, as reside, or have agents authorised to receive service
1
on their behalf, within the revenue district in which the land is
sitµate.
E (4) In case any person so interested resides elsewhere, and has no
such agent, the notice shall be sent to him by post in a letter
addressed to him at his last known residence, address or place of
business and registered under Sections 28 and 29 of the India Post
Oflice Act, 11898."
F
Sub-section (1) itself makes it clear that an interested person is one who
has an interest in the land which is intended to be taken possession of by
the Government. This has been extended by sub-section (3) even to oc·
cupiers of land. An acquiring body cannot by stretching of language be
G deemed to be person interested within Section 9 of the L.A. Act. It further
stands clarified by sub-section (2) as the particulars mentioned in the
notice by the Collector on which a person interested is required to stake
his claim ir)"his respective interest in the land and the amount and par·
ticulars of claim on compensation and to measurement of land under
Section 8. The provision does not even remotely apply to an acquiring
H body. Section 10(1) further throws light on it. It is extracted below :
AWAS EVAMVIKAS PARISHADv. GYANDEVI [R.M.SAJW,J.] 677
S.10(1) Power to require and enforce the making of statements A
as to means and interests - The Collector may also require any
such person to make or deliver to him, at a time and place
mentioned (such time not being earlier than fifteen days after the
date of the requisition), a statement containing, so far as may be
practicable the name of every other person possessing any interest B
in the land or any part thereof as a co-proprietor, sub-proprietor,
mortgagee, tenant or otherwise, and of the nature of such interest,
and of the rents and profits (if any) received or receivable on
account thereof for three years next preceding the date of the
statement."
c
It again emphasises person interested to be a person having interest in the
land who is entitled to receive compensation. After the objections are filed
by the persons interested an inquiry is held by the Collector and award is
made under Section 11 of the L.A. Act. Section 11 as extracted below ;
"S.11. Enquiry and award by Collector - (1) On the day so fixed, D
or on any other day to which the enquiry has been adjourned, the
Collector shall proceed to enquire into the objections (if any)
which any person interested has stated pursuant to a notice given
under Section 9 to the measurements made under Section 8, and
into the value of the land at the date of the publication of the E
notification under Section 4, sub-section (1), and into the respec-
tive interests of the persons claiming the compensation and shall
make an award under his hand of -
(i) the true area of the land;
F
(ii) the compensation which in his opinion should be allowed for
the land; and
(iii) the apportionment of the said compensation among all the
persons known or believed to be interested in the land, of G
whom, or of whose claims, he has information, whether or
not they have respectively appeared before him."
Provided that no award shall be made by the Collector under
this sub-section without the previous approval of the appropriate
Government or of such officer as the appropriate Government may H
678 SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.
A authorise in this behalf.:
Provided further that it shall be competent for the appropriate
Government to direct that the Collector may make such award
without such approval in such class of cases as the appropriate
Government may specify in this behalf.
B
(2) Notwithstanding anything contained in sub-section (1), if at any
stage of the proceedings, the Collector is satisfied that all the
persoru; interested in the land who appeared before him have
agreed lin writing on the matters to be included in the award of
c the Collector in the form prescribed by rules made by the ap-
propriate Government, he may, without making further enquiry,
make an award according to the terms of such agreement.
(3) The determination of compensation for any land under sub-
section (2) shall not in any way affect the determination of com-
D pensation in respect of other lands in the same locality or
elsewhere in accordance with the other provisions of this Act.
(4) Notwithstanding anything contained in the Registration Act,
1908 (16 of 1908), no agreement made under sub-section (2) shall
be liable to registration under that Act."
E
The scope of inquiry is confined to the objections raised under Secti.on 9
of the L.A. Act. The acquiring body does not figure anywhere. There is no
!is between acquiring body and the Collector. The Collector acts for and
on behalf of the acquiring body. No adversarial !is arises between the two.
F The acquiring body is not a person interested within meaning of Sections
9 and 10. Even the award that is made under Section 11 is in respect of
the land for which objection was raised. When the statute does not permit
an acquiring body to raise objection, if any, it cannot claim to be party. An
award made under Section 11 is made final and conclusive under Section
G 12 between the Collector and the persons interested. It can be reopened
under Section 1;2A to the limited extent mentioned therein. If the acquiring
body is permitted to claim that it too is covered in the person interested,
it would not oply destroy the legislative conclusiveness visualised to an
award but result in uncertainity of the proceedings till the end.
H Sarne conclusion follows from Sections 18, 19 and 20 of the L.A. Act
AWASEVAMVIKASPARISHADv. GYANDEVI [R.M.SAHAI,J.] 679
which deal with reference to the Court, the person to whom notice has to A
be issued and the matters which have to be decided. Sub-section (1) of
Section 18 is extracted below : -
"S. 18. Reference to Court. - (1) Any person interested who has
not accepted the award may, by written application to the Collec- B
tor, require that the matter be referred by the Collector for the
determination of the Court, whether his objection be to the meas-
urement of the land, the amount of the compensation, the persons
to whom it is payable, or the apportionment of the compensation
among the persons interested."
c
The right to seek reference is a limited right to the person interested who
has not accepted the award. The person interested in the Section cannot
mean any one other than the one who is visualised in Sections 9 and 10 of
the L.A. Act. The scope of reference under Section 18 is the same as under
. ·section 11. Therefore, person interested cannot have any meaning different D
than what it is under Sections 9 and 10. Section 19 prescribes the procedure
when an objection is made to the award. It requires the Collector that in
making the reference he shall state for information of the Court, (a) the
situation and extent of the land, with particulars of any trees, buildings or
standing crops thereon; (b) the names of the persons whom he has reason
to think interested in such land; (c) the amount awarded for damages and E
paid or tendered under Sections 5 and 17, or either of them, and the
amount of compensation awarded under Section 11; and ( d) if the objec-
tion be to the amount of the compensation, the grounds on which the
amount of compensation was determined. Section 21 restricts the scope of
proceedings to, 'the scope of the enquiry in every such proceeding shall be F
restricted to a consideration of the interests of the persons affected by the
objection'. It is thus clear that an acquiring body is not contemplated to be
irnpleaded or made a party as the proceedings, whether at the stage of
inquiry by the Collector and making of award or when the matter is
pending in the Court in reference, are between the Collector and the
person interested and not the acquiring body. G
Why it is so that no provision is made.for giving any notice or hearing
to the acquiring body for whom the land is acquired. The reason is that
whenever a company, an industrial unit or any Government department
needs any land for any purpose it moves the Government and it is after H
680 SUPREME COURT REPORTS [1994) SUPP. 4 S.C.R.
A examination of the proposal made by the person concerned that a decision
is taken whether the land should be acquired or not and, thereaf~er so far
the acquiring body is concerned it is not required to be impleaded in the
proceedings as under the Act it is duty and responsibility of the Collec-
tor/Land Acquisition Officer to take up the matter, proceed in accordance
B .with the procedure provided under the Act and. determine compensation
payable to the claimant. That is why the Act permits only the claimant or
person intere$ted in determination of compensation to seek a reference. In
reference it is not the validity of the notification which is in issue but the
only lis is about the amount of compensation and, therefore, again the
person for \'/hose benefit the land is acquired is not required to be
C impleaded or given any notice. It is appropriate to reproduce Section 50
of the L.A. Act at this stage :
"50. Acquisition of land at cost of a local authority or company -
(1) Where the provisions of this Act are put in force for the
purpose of acquiring land at the cost of any fund controlled or
D managed by a local authority or of any company, the charges of
and incidental to such acquisition shall be defrayed from or by
such Wund or company.
(2) In any proceeding held before a Collector or Court in such
E cases. the local authority or company concerned may appear and
adduce evidence for the purpose of determining the amount of
compensation :
Provided that no such local authority or company shall be
entitled to demand a reference under Section 18."
F
This Se¢tion enables a local authority to appear and adduce evidence
for purpose of determining compensation. It has been permitted to par-
ticipate for a limited purpose only as is apparent from the report of the
Select Committee of 23rd March 1893 which is extracted below :
G "To Section 50 we have added at the desire of the Government of
Bombay a clause permitting the appearance before the Collector
or the Court, of the representative of a Local Authority or Com-
pany pn whose behalf land is being acquired. We can not, however
agree that the authority should be permitted to appeal from the
H Collector's award. We have not given to Government itself power
AWAS EVAMVIKAS PARISHADv. GYANDEVI [R.M. SAHAI,J.] 681
to make this appeal because the Collector is only the agent of A
Government in the acquisition of land: his action is taken under
the rules laid down for his guidance which include a preliminary
valuation and these rules ordinarily provide, and ought to provide,
that when the Collector finds cause to anticipate. that his eventual
award will substantially exceed his provisional estimate he shall B
stay proceedings till he receives the further instructions of higher
authority. No local authority or company is compelled to prove
under the Land Acquisition Act. If it can procure land more
cheaply by private negotiation it is certainly at liberty to do so but
it elects to set in motion the very special power given to Govern-
ment or if the public objects, it can expect no higher privileges and C
powers than those given to Government itself."
But option to participate does not mean right to be impleaded. When the
Legislation prech1des such person from being made a party obviously
because theCollector acts on its behalf then such a person cannot claim it D
as a matter of right. Permitting participation of the local authority for the
limited purpose visualised by sub-section (2) of Section 50 cannot be
stretched to make the local authority a necessary party by giving extended
meaning to the expression 'person interested' used in Section 18 of the L.A.
Act. No provision in the local Act makes the Board a necessery p,.;ty. It
only empowers it to assist the Collector or Court in determining compen- E
sation by adducing evidence. A person is impleaded or can claim to be
implcaded if it has any interest or !is. An acquiring body including the local
authority has no !is except to assist the Collector or the Court in determin-
ing compensation. The Legislative anxiety to preclude any such person
from being impleaded is clearly brought out by the proviso to sub-section F
(2) of Section 50 as it specifically debars the local authority or the company
from demanding any reference. The determination of compensation by the
Collector is final and conclusive under Section 12 of the L.A. Act as
between the Collector and the persons interested. This as explained earlier,
is subject to provisions of the L.A. Act. And those provisions are Section
· 12A, 18 or appeal etc. It cannot be disturbed at the instance of the local G
authority. In Udit Narain Singh Malpaharia v. Additional Member Board of
Revenue, Bihar, AIR (1963) SC 786 this Court observed thus,
"To answer the question raised it would be convenient at the outset
to ascertain who are necessary or proper parties in a proceeding. H
682 SUPREME COURT REPORTS (1994) SUPP. 4 S.C.R.
A The law on the subject is well settled : it is enough if we state the
principle. A necessary party is one without whom no order can be
made effectively; a proper party is one in whose absence an
effective order can be made but whose presence is necessary for
a complete and final decision on the question involved in the
11
proceeding.
B
A local authority is not even a proper party io the sense that the court or
the claimant or the ioterested person seeking reference or filiog appeal are
not required to implead them as in absence of their appearance and
leading any evidence their presence is immaterial for complete and final
C decision of the proceedings.
Absence of any provision for impleadiog acquiriog body appears to
be based on equity and justice. A company or local anth.ority seeking
acquisition of land and displaciog an iodividnal is more concerned with the
D land. Compensation no doubt has to be paid by it but the Legislature beiog
aware of that its determination is on the date the notification is issued
under Section 4 of the L.A. Act and the long delay it takes io court it
considered it just and proper to exclude impleadment of acquiriog body as
it was not only unnecessary but even unfair as it might result io delay to
the prejudice of the owner of the land. Between the date when notification
E is issued and the date when possession is acquired the value of the land
goes up but the land owner does not get any benefit of it whereas the
acquiriog body by payiog the value of the land determined at least three
years earlier after amendment, gets the land which becomes more valu-
able. Further the acquiriog body is . permitted to appear and adduce
F evidence. But if one does not exercise the option the Legislature does not
grant any further iodulgence. If some one is ioterested io appeariog before
the Court to assist io determination of compensation, the Court may permit
it. An acquiriog body may have locus to appear on its own but so long it
does not appear it is not a necessary party the non-impleadment of which
vitiates the proceedings. Between the locus and right of impleadment there
G is world of difference. The two cannot be equated. A person having locus
may not be denied appearance but a person who is necessary party cannot
be denied impleadment. The former is permissive the latter is mandatory.
A local body may have locus to appear for the limited purpose purpose
but once it opts to keep out it cannot claim to be necessary party whose
H non-impleadment renders the proceediogs iovalid.
AWAS EVAMViKAS PARISHADv. GYAN DEVI [R.M.SAHAI,J.] 683
More important than this is the grave injustice involve in such A
construction. An acquiring bo..\y or a local authority cannot be permitted
to sit on the fence wait and watch and then appear after finalisation of
compensation to claim that it may be permitted second innings as it would
result in undue advantage to the stronger party between the two and
ruinous to the weaker. He who after waiting and fighting for the compen- B
sation for years in the courts, which takes considerable time, is faced with
the danger of being reduced to naught and face the litigative process once
again. His land is gone, compensation is not paid, and above all courts
hazard are once more thrust on him. Many may not be able to stand the
strain. The real worth of the compensation already devalued, the expendi-
ture in the court having ruined him it would not be just and proper to set C
aside the order at the instance of a person who is not a necessary party
and for whose impleadment there is no provision in the LA. Act and for
which neither he is responsible nor the court and above all who having
been given right to participate chose to be a watcher only.
D
The submission advanced on behalf of the appellant that it being
statutorily entitled to lead evidence it was incumbent on the Collector and
the Court to issue notice to it and if they failed to discharge their obligation ,,
the appellant was entitled to challenge the determination of compensation
in higher court by filing appeal or writ petition under Article 226 of the
Constitution of India was under complete misapprehension. Right to notice E
in proceedings in court of liiw or quasi-judicial proceedings are different
than the right of appeal. The former may arise either under the statutory
provision or the principle of natural justice may require it or it may be
necessary on principle of legitimate expectation. That shall be adverted
liiter. But right of appeal is always statutory. The courts cannot confer or F
infer it. The report of the Select Committee has already been extracted. Its
recommendation was against granting any right of appeal or reference to
a local authority or company. The recommendation found expression in
sub-section (2) of Section 50. The specific bar against seeking reference
brings out the legislative intention of precluding the local authority from G
filing any appeal against determination of compensation by the Court.
What is legislatively not permitted cannot be read by implication. Not in
respect of right of appeal as it, 'is a creature of Statute' Shankar Kerba
Jadhav & Ors. v. The State of Maharashtra, [1969] 2 SCC 793. 'A right of
· appeal is conferred by statute or equivalent legislative authority; it is not a
mere matter of practice or procedure, and neither the superior nor the H
684 SUPREME COURT REPORTS [1994] SUPP. 4S.C.R.
A inferior court or tribunal nor both combined can create or take away such
a right'. (Halsbury's Laws of England Vol. 37 Para 677). Granting right of
appeal to local authority against order of reference court would be legis-
lating and not interpreting. Nor a writ petition can be held to be main-
tainable for enforcing right to participate where the local authority did not
appear even th¢ugh it had knowledge or it was informed but opted to
B remain absent. )t may be available in those exceptional cases where the
proceedings are found to be vitiated by fraud or collusion.
Thus the local authority is neither a necessary not a proper party in
the proceedings for compensation under the L.A. Act. Therefore, the
C non-impleadment of the appellant was not fatal and the proceedings could
not be said to be vitiated for failure to implead it. This answers the issue
raised on behalf of the appellant, the local authority. But what is of some
concern is noticeable lack of objective assessment of compensation, at
times, when the acquisition is for a local authority. When sub- section (2)
D of Section 50 was enacted acquisitions were not many. Price of land, too,
was not very high. But with multiplication of local bodies constituted under
various State Acts to carry out development activities resulting in large
scale acquisition coupled with rise in the market value of land the
provisions in the statute have to be so interpreted as to eliminate, as far as
possible, any chance of injustice and fairness specially to a public body as
E in such matters it ultimately recoils on the society. As is clear from the
Select Committee's report, extracted earlier, the Legislature was aware,
even then, that ~ exception was to be made in favour of a local authority
or company as, at times, such authority may be in a better position, than
the Collector, to bring evidence on record which may be of assistance in
F determination of compensation. It has become more necessary, in the
present day, as the acquisition proceeding under various local acts till the
stage of issuing notification analogous to Section 6 of the L.A. ·Act are
taken under the.local Act. And the Collector takes over, as in the case of
appellant, from the stage of Section 7 of the L.A. Act. Further in such
acquisitions na$ely for the Local body there is absence of any personal
G involvement. A,nd the possibility of best evidence being withheld or
prevented from coming on record due to vested interest, the number of
which is growing every day cannot be ruled out. What, therefore, requires
examination is that even though the right of impleadment or appeal was
not allowed to the local body and what was assured was an option to
H participation only, is there any principle on which this assurance can be
AWAS EVAMVIKAS PARISHADv. GYANDEVI [R.M.SAHAI,J.] 685
given legal shape. If so in what circumstances and on what conditions. But A
before proceeding further it is necessary to be clarified that if in any
proceeding for determination of compensation initiated earlier the local
authority appeared and led evidence then it was required to be irnpleaded
in subsequent proceedings. The right of irnpleadment after appearance is
founded on the principle that the person aggrieved by the order must have B
the remedy in the higher court. For instance if the local authority lead
evidence before the Collector or the Court for determination of compen-
sation and that evidence is totally ignored then even though such a person
had no tis against the Collector but there being conflict of interest between
person interested and the person entitled to lead evidence such a person
would be entitled to claim in higher court that the order was violative in C
law, for non-consideration of material on record.
Coming back to the issue, what flows from the entitlement to lead
evidence? The principle of natural justice, as a part of procedural law,
developed by this Court and English courts had been applied and extended D
to quasi-judicial proceedings and administrative matters to ensure that no
one is adversely affected without reasonable opportunity and fair hearing.
No order can be passed without hearing a person if it entails civil conse-
quences. But what about those situations where, as in the present case, the
Legislature stops short by providing an option to appear only. The local
body cannot claim to be irnpleaded as a matter of right. Nor it can invoke E
the principle of Natural justice. Yet it is entitled to lead evidence. It may
or may not. Latter d9es not present any difficulty. But if it intends to lead
evidence then no mechanism has been provided to enable it to exercise its
option. In situations where even though a person has no enforceable right
yet he is affected or likely to be affected by the order passed by a public F
authority the courts have evolved the principle of legitimate expectations.
The expression which is said to have originated from the judgment of Lord
Denning in Schmidt v. Secretary of State for Home Affairs, {1969) 2 Ch. 149
is now well established in public law. In Attorney-General of Hong Kong v.
Ng Yuen Shiu, {1983) 2 A.C. 629 Privy Council applied this principle where G
expectations were, 'based upon some statement or undertaking by or on
behalf of, the public authority', and observed, 'Accordingly "legitimate
expectations" in this context are capable of including expectations which
go beyond enforceable legal rights , provided they have come reasonable
basis'. 'A person may have a legitimate expectation of being treated in a
certain way by an administrative authority even though he has no legal right H
686 SUPREME COURT REPORTS [1994) SUPP. 4 S.C.R.
A in private law to receive such treatment' (Halsbury's Laws of England Vol.
1(1) 4th Edn. Re-issue Para 81). Fair procedure and just treatment is the
core of our jurisprudence. No one should suffer for omission in law or
technicalities in rules. Therefore when the law permits the local body to
lead evidence then it is implicit in it that the local authority can legitimately
expect to be informed or intimated of the proceedings. It would be in
B consonance with principle of fairness. Otherwise the right to lead evidence
shall hand on the oft chance of the authority having come to know of the
proceedings. In English cases referred earlier inference was drawn on
existence of such right as it would have otherwise worked harshly against
the person who was affected even though there were no legal provisions or
C rules permitting any hearing. Sub-section (2) of Section 50 stands on a
higher footing. It entitles the local body to lead evidence. This furnishes
reasonable basis to infer that the local body legitimately expects to be
informed or intimated of the proceedings. It is an assurance in law of
intimation about pendency of the proceedings. How else it is going to
D exercise the right of assisting in determination of compensation. The
entitlement to lead evidence in absence of intimation may, at times, turn
out to be empty formally. Consequently the Collector and the Court are
impliedly obliged to intimate the local authority about the pendency of the
proceedings and its right to lead evidence. The expression, 'may appear
and adduce evidence' can be effective and meaningful, only, if the person
E who is entitled to lead evidence is either aware or made aware of it. If such
a person is aware and does not choose to appear then it may be said that
it cannot at a subsequent stage claim that even though it was aware and
did not appear yet the order against it may be set .Side as it should have
been made aware. But if he is not aware and if he would have been made
aware then he would have led evidence which would have assisted the
F
authority in determination of compensation could be possible only if such
person is informed or intimated of the proceedings. Therefore, to obviate
any dispute In future proceedings it appears appropriate to hold that even
though the language of the Section does not provide for issuance of any
notice it is incumbent on the Collector or the Court while determining
G compensation to intimate the local body by issuing notice to lead evidence,
0
if any. The submission that the local authority must be presumed to know
would not be in consonance either with principle of fairplay or with
legislative objective of permitting such body to appear and lead evidence.
But if the local body does not appear even after intimation by the Collec-
H
AWAS EVAM VIKAS PARISHAD v. GYAN DEVI [RM. SAJW, J.] 687
tor or the Court then it shall have no right to claim that the order may be A
set aside as it was not impleaded as a party. In Santosh Kumar v. Central
Warehousing Corporation, AIR (1986) SC 1164 it was held that the com-
pany or the local authority at whose instance the acquisition is made is not
entitled to challenge the determination of compensation except on the
ground of fraud, corruption of collusion, therefore, it is in the interest of B
the person whose land has been acquired that .the necessary intimation
should be given to the acquiring body at the earliest so that it may not raise
the plea of fraud, corruption or collusion after conclusion of the proceed-
ings either before the Court or in appeal. But the obligation of the
Collector or the court to issue notice shall be prospective in operation.
That is it shall apply to only those proceedings which are initiated C
hereinafter or are pending before the Collector or Court. It shall not be
available in appeals pending against the order passed in reference in High
Court or this Court except in those rare cases where the local authority is
able to establish that it had no knowledge about the proceedings at any
stage and the proceedings were vitiated becanse of fraud or collusion. D
The conclusions, thus, that can be drawn from the discussion may be
summarised as under :
(i) An acquiring body including local authority or company is not
a necessary party either before the Collector who makes the award E
or before the Court which hears the reference.
(ii) Any proceeding for determination of compensation is not
vitiated nor is liable to be set aside for non-impleadment or
non-issuance of notice to the acquiring body, including local
authority or the company. F
(iii) (a) The Collector and the Court hereinafter shall be under an
obligation to intimate the local authority or the company of pen-
dency of the proceedings to enable it to lead evidence.
G
(b) Non-appearance by the local authority or company in
pursuance of notice sent by the Collector would not absolve the
reference court from issuing any notice.
(iv) (a) If a local authority or company appears in proceedings and
leads evidence as provided by sub-section (2) of Section 50 in H
688 SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.
A ptoceedings which were initiated earlier it shall be made party in
s11bsequent proceedings and its non-impleadment shall render the
proceedings as invalid.
(b) But if the local a11thority or the company on whom notice
was served or it had knowledge of the proceedings but it did not
B appear then it shall not be entitled to claim at later stage or in
appeal that the proceedings were vitiated due to its non-implead-
ment.
(v) Any proceeding taken under the L.A Act as amended by the
c State law or if specifically provided in the State enactment under
which the land is being acquired providing for issuance of notice
pr giving an opportunity of hearing is required to be followed and
\f such notice is not issued or hearing is not afforded then the
,proceedings as in the Karnataka Act or in the Krishi Upaj Mandi
Samiti Adhiniyam referred to earlier are liable to be set aside.
D
(vi) In appeal pending in the High Court or this Court the local
authority or the company shall not be entitled to claim setting aside
of the order except if it establishes fraud or collusion. No order
shall be set aside on the ground if it is only in the realm of
appreciation of evidence.
E
Law having been decided it appears necessary to refer to the facts
as it shall demonstrate that how unfair it would be if such construction as
is claimed by the Board is placed on the provisions of the L.A. Act. A
scheme was notified by the Avas Vikas Parishad Adhiniyam, 1965 called
F Trans Yamuna Grihsthan and Sarak Yojana, Agra. It was a combination
of a hQusing accommodation and street scheme. The finalised scheme was
published under Section 32 of the Adhiniyam and the land of the owners
was notified to be acquired. An award was made by the Land Acquisition
Officer who adopted belting system for determining the market value and
divided the land covered by the award into three belts fixing definite
G amount for each belt. In reference, the Tribunal determined the market
value and enhanced the compensation. The High Court in first appeal
doubl.ed it nearly. It also awarded solatium at the rate of 30% on the
amount of enhanced compensation and interest at the rate of 12% under
sub-section (1-A} of Section 23 of the L.A. Act. The High Court decided
H the appeal on 18th April 1991. The owners were still not satisfied and
AWASEVAMVIKASPAR!SHADv. GYANDEVI[R.M.SAHAI,J.] 689
consequently filed the special leave petitions in this Court, for grant of A
interest under Section 23-A added to the L.A. Act in 1984. The Board
claims to have come to know of these proceedings after the judgment of
the High Court and filing of special leave petitions by the claimants and,
therefore, it move applications under Section 114 and Order 47 Rule 1 read
with Section 151 of the Code of Civil Procedure before the High Court for B
the review of its order. The application was dismissed on 3rd December
1992 as it was filed after long delay without proper explanation and even
the court fee paid was deficient. The High Court observed that even though
this was brought to the notice of the learned counsel for the Board yet the
deficiency was not made goods. Another effort was made in 1993 but the
Court refused to recall its order as it was not disputed that the court fee C
was not made good for long time and even no application as contemplated
under section 149 of the C.P.C. for extension of time was made.
Facts speak for themselves. Preliminary notification was issued on
31st of January 1971. Notification under Section 32 analogous to Section 6 D
was issued in 1974. Award was made on 15th April 1978. Possession was
taken on 27th of April 1978. Reference was decided by the Tribunal on
28th of June 1985. The High Court decided the appeal on 18th of April
1991 and now after 23 years from the date of preliminary notification and
15 years from the date of award the Board claims recall of the order as no E
notice was issued to it and that also by paying deficient court fee. Law and
justice both stare at such fruitless litigation at the expense of the pnblic
money.
But this is not the end. Having laid down the law and having come
to the conclusion at the Avas Vikas Parishad was not a necessary party nor
F
it could have moved an application for recall of the order passed by the
High Court not only due to the long delay but even because it had no right
in law to file such an application it is proposed to exercise power suo motu
under Article 142 of the Constitution for sake of justice as the other side
of the picture is disturbing. The claimant had claimed compensation at the G
rate of Rs. 15 per sq. yid. Yet the Tribunal awarded it at Rs. 16.44 p. as
the respondent appears to have moved an amendment application claiming
Rs. 25 per sq. yrd. which was allowed. It is not clear at what stage the
amendment application was moved and allowed bnt assnming it to be so
the finding of the High Court in this regard is worth extracting : H
690 SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.
A "Therefore, while determining the market rate of the land conjec-
tures will have to be done. Taking into consideration the factors,
such as nearness to the bye-pass, nearness to the inhabited area
and superiority in fact in location and also keeping in view the fact
that the tribunal has awarded Rs. 16.54 p. per sq. yard for further
land lying in the South of the bye-pass and the rates fixed by the
B Special Land Acquisition Officer for the land falling in three
diff~rent belts, we are of the view that the rates for the land for
each of the three belts as specified by S.L.O. in his award should
re.Sonably be fixed as below :
c 1. For the land falling in First Belt... ... Rs. 25 per sq. yd.
2. For the land falling in Second Belt... ..... Rs. 23.50 per sq. yd.
3. for the land falling in Third Belt ..... Rs. 20 per sq. yd."
Not an iota of evidence has been discussed. No material has been
D noticed. No reason has been given for such enhancement. Determination
of compen$ation undoubtedly involves guess work but what is meant by
guess work, and to what extent the courts can indulge in such guess work
has been laid down in numerous decisions of this Court. But the fmding
extracted above, to say the least, is not only arbitrary without basis but in
E utter disregard of the statutory law and the judicial expositions of it. It is
not necessary to say further but the finding and the reasoning recorded by
the High Court is indeed a matter of concern. It is accordingly set aside
and the High Court is requested to decide it afresh after hearing the
parties. It is necessary to clarify that the Board shall not have a right of
being heard as it never appeared before the Land Acquisition Officer or
F
the Tribunal nor filed any application for leading any evidence. Nor it
claims any fraud or collision. It is left open to the High Court if it feels
necessary in the facts and circumstances of the case to permit the parties
to lead any evidence to do justice.
G OR.(JER OF THE COURT (PER MAJORITY)
Leave granted.
1. Section 50(2) of the LA. Act confers on a local authority for whom
land is being acquired a right to appear in the acquisition proceedings
H before the Collector and the reference court and adduce evidence for the
AWAS EVAMVIKASPARISHADv. GYANDEVI [R.M.SAHA!,J.] 691
purpose of determining the amount of compensation. A
2. The said right carries with it the right to be given adequate notice
by the Collector as well as the reference court before whom acquisition
proceedings are pending of the date on which the matter of determination
of compensation will be taken up.
B
3. The proviso to Section 50(2) only precludes a local authority from
seeking a reference but it does not deprive the local authority which feels
aggrieved by the determination of the amount of compensation by the
Collector or by the reference court to invoke the remedy under Article 226
of the Constitution as well as the remedies available under the L.A. Act.
c
4. In the event of denial of the right conferred by Section 50(2) on
account of failure of the Collector to serve notice of the acquisition
proceedings the local authority can invoke the jurisdiction of the High
Court under article 226 of the Constitution.
D
5. · Even when notice has been served on the local authority the
remedy under Article 226 of the Constitution would be available to the
local authority on grounds on which judicial review is permissible under
Article 226.
6. The Local authority is a proper party in the proceedings before E
the reference court and is entitled to be impleaded as a party in those
proceedings wherein it can defend the determination of the amount of
compensation by the Collector and oppose enhancement of the said
amount and also adduce evidence in that regard.
7. In the event of enhancement of the amount of compensation by F
the reference court if the Government does not file an appeal the local
authority can file an appeal against the award in the High Court after
obtaining leave of the court.
8. In an appeal by the person having an interest in land seeking G
enhancement of the amount of compensation awarded by the reference
court the local authority should be impleaded as a party and is entitled to
be served notice of the said appeal. This would apply to an appeal in the
High Court as well as in this Court.
9. Since a company for whom land is being acquired has the same H
692 SUPREME COURT REPORTS (1994) SUPP. 4 S.C.R.
A right as a lo¢al authority under Section 50(2), whatever has been said with
regard to a local authority would apply to a company too.
10. Tiie matters which stand finally concluded will, however, not be
reopened.
B We, t)ierefore allow the applications submitted by the Board for
being impleaded as a respondent in the appeals filed by the land owners
in this Court and direct that the Board be also impleaded as a respondent
in the appeals filed by the land owners in the High Court. The judgment
of the Allahabad High Court dated December 21, 1990 in First Appeals
Nos. 584, 585 and 642 of 1985 and the judgment of the said High Court
C dated April 18, 1991 in First Appeals Nos. 586, 587 and 641of1985 as well
as the order dated January 20, 11J<l3 on the review applications filed against
the judgment dated April 18, 1991 are set aside and the said appeals are
remitted IQ the High Court for decision in accordance with law. The
appeals are disposed of accordingly. There will be no order as to costs.
D
A.G. Appeals Disposed of.
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