GREGORY PATRAO AND ORS.versusMANGALORE REFINERY AND PETROCHEMICALS LIMITED & ORS.

                        [2022] 12 S.C.R. 97                            97


                 GREGORY PATRAO AND ORS.                               A
                                 v.
                MANGALORE REFINERY AND
             PETROCHEMICALS LIMITED & ORS.
               (Civil Appeal Nos. 4105-4107 of 2022)                   B
                           JULY 11, 2022
        [M. R. SHAH AND B. V. NAGARATHNA, JJ.]
       Land Acquisition: Karnataka Industrial Areas Development
Act, 1966 (KIAD Act) – s.28 – Persons interested – Proper party –
                                                                       C
Right of subsequent allottee to participate in reference proceedings
– The lands of the appellants were acquired u/s.28(4) of the KIAD
Act for establishment of industrial areas – Land Acquisition Officer
after affording opportunity of hearing to the owners of the land
passed award on 06.10.2009 – References made to the Reference
Court at the instance of landowners – Reference Court enhanced         D
the amount of compensation – Respondent No.1 (MRPL) was allotted
the land as a lessee by the Karnataka Industrial Areas Development
Board (KIADB) – MRPL preferred the appeals before High Court
on the ground that it ought to have been heard by the Reference
Court as it was beneficiary of the acquisition and under the
                                                                       E
agreement between the KIADB and MRPL, MRPL has to pay the
additional amount of compensation – High Court held that MRPL
can be said to be a ‘person interested’ and therefore, ought to have
been heard before enhancing the amount of compensation – The
matter was remanded back to Reference Court for fresh decision
after giving an opportunity of hearing to all parties including MRPL   F
– On appeal, held: There is no reason to take a different view than
the view taken in the case of *Peerappa Hanmantha Harijan v. State
of Karnataka that MRPL being a subsequent allottee after the land
was acquired by KIADB, can neither be said to be a beneficiary
nor a ‘person interested’ for the purpose of determination of
                                                                       G
compensation – The judgment and order passed by the High Court
quashed.
      Constitution of India: Art.141 – Binding Precedent – Held:
Not following the binding precedents of Supreme Court by the High
Court is contrary to Art.141 of the Constitution of India.
                                                                       H
                                97
98           SUPREME COURT REPORTS                   [2022] 12 S.C.R.


A         Allowing the appeals, the Court
           HELD : The land has been acquired under the provisions
     of the KIAD Act, 1966 and the notification has been issued under
     Section 28(1) of the KIAD Act, 1966. The land has been acquired
     by the State Government for KIADB under three different
B    notifications. After the lands were acquired, respondent No.1 –
     MRPL has been allotted the lands acquired as per the agreements
     between the KIADB and the MRPL. The present is not an
     acquisition under the provisions of the Land Acquisition Act and
     therefore, as such, neither Section 50 of the Land Acquisition
     Act, 1894 nor any other provisions of the Land Acquisition Act,
C    1894 shall be applicable with respect to the lands acquired under
     the provisions of the KIAD Act, 1966. There is no reason to
     take a different view than the view taken by this Court in the
     case of Peerappa Hanmantha Harijan that the MRPL being a
     subsequent allottee after the land was acquired by KIADB, can
D    neither be said to be a beneficiary nor a “person interested” for
     the purpose of determination of compensation. Under the
     circumstances, the impugned judgment and order passed by the
     High Court taking a contrary view is unsustainable. [Paras 7,
     7.6][106-F-H; 107-A-B; 115-D]
E         *Peerappa Hanmantha Harijan v. State of Karnataka
          (2015) 10 SCC 469 : [2015] 9 SCR 498 – relied on.
          Himalayan Tiles and Marble (P) Ltd. v. Francis Victor
          Countinho (Dead) By LRs’ (1980) 3 SCC 223 : [1980]
          3 SCR 235; UP Awas Evam Vikas Parishad v. Gyan
F         Devi (Dead) by LRs. and Ors. (1995) 2 SCC 326 : [1994]
          4 Suppl. SCR 646 – distinguished.
          Neelagangabai & Another v. State of Karnataka &
          Others (1990) 3 SCC 617 : [1990] 3 SCR 20; Neyvely
          Lignite Corporation Ltd. v. Special Tahsildar (Land
G         Acquisition) Neyvely and Others (1995) 1 SCC 221 :
          [1994] 4 Suppl. SCR 567; Satish Kumar Gupta v. State
          of Haryana (2017) 4 SCC 760 : [2017] 1 SCR 767;
          Rashmi Metaliks Ltd. v. Kolkata Metropolitan
          Development Authority (2013) 10 SCC 95 : [2013] 17
          SCR 345; Bir Singh v. Mukesh Kumar (2019) 4 SCC
H         197 : [2019] 2 SCR 24 – referred to.
 GREGORY PATRAO AND ORS. v. MANGALORE REFINERY                              99
      AND PETROCHEMICALS LIMITED & ORS.

                        Case Law Reference                                  A
[1980] 3 SCR 235                    distinguished       Para 2.1
[1994] 4 Suppl. SCR 646             distinguished       Para 2.1
[1990] 3 SCR 20                     referred to         Para 2.1
[1994] 4 Suppl. SCR 567             referred to         Para 2.1            B
[2015] 9 SCR 498                    relied on           Para 2.2
[2017] 1 SCR 767                    referred to         Para 3.7
[2013] 17 SCR 345                   referred to         Para 3.8
                                                                            C
[2019] 2 SCR 24                     referred to         Para 3.8
      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4105-
4107 of 2022.
      From the Judgment and Order dated 06.09.2021 of the High Court
of Karnataka at Bengaluru in M.F.A. No.259 of 2021 (LAC) c/w M.F.A.         D
No. 377 of 2021 (LAC) and M.F.A. No.247 of 2021 (LAC).
     Shailesh Madiyal, Vaibhav Sabharwal, Ms. Neha Jain, Rajan
Parmar, Advs. for the Appellants.
     Ms. Shalini Sati Prasad, Jeevan B. Panda, Meher Tandon for
M/s Khaitan & Co., Advs. for the Respondents.                               E
      The Judgment of the Court was delivered by
      M. R. SHAH, J.
       1. Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court of Karnataka at Bengaluru in First       F
Appeal No. 259 of 2021 and other allied first appeals, by which the High
Court has set aside the judgment and award passed by the learned
Reference Court and has remanded the matter to the Reference Court
to decide the references afresh after affording an opportunity to all the
parties including respondent No. 1 herein - M/s. Mangalore Refineries
& Petrochemicals Ltd., Mangalore (MRPL), the original claimants/            G
original landowners have preferred the present appeals.
     2. The lands belonging to the original claimants/original
landowners/appellants herein were acquired under Section 28(4) of the
Karnataka Industrial Areas Development Act, 1966 (hereinafter referred
                                                                            H
100            SUPREME COURT REPORTS                        [2022] 12 S.C.R.


A     to as “KIAD Act, 1966”) under three different notifications. The lands
      were sought to be acquired for the development of the Karnataka
      Industrial Areas Development Board (hereinafter referred to as
      “KIADB”) for establishment of industrial areas. The Land Acquisition
      Officer after affording an opportunity of hearing to the owners of the
      land passed an award on 06.10.2009. At the instance of the landowners,
B
      the references were made to the Reference Court. The Reference Court
      vide judgment dated 29.07.2020 enhanced the amount of compensation.
             2.1 Feeling aggrieved and dissatisfied with the judgment and award
      passed by the Reference Court dated 29.07.2020, enhancing the amount
      of compensation, respondent No.1 herein – MRPL, who was allotted
C     the land as a lessee by the KIADB, preferred the present appeals before
      the High Court and prayed for leave to appeal. It was the case on behalf
      of the MRPL that as the MRPL is the beneficiary of the acquisition and
      under the agreement between the KIADB and MRPL, the latter has to
      pay the additional amount of compensation and, therefore, the burden to
D     pay the additional compensation would be upon the MRPL, therefore,
      MRPL ought to have been heard by the Reference Court. It was the
      case on behalf of the MPRL that MRPL can be said to be a “person
      interested”. Heavy reliance was placed upon the decisions of this Court
      in the case of Himalayan Tiles and Marble (P) Ltd. Vs. Francis
      Victor Countinho (Dead) By LRs’, (1980) 3 SCC 223; UP Awas
E     Evam Vikas Parishad Vs. Gyan Devi (Dead) by LRs. and Ors.,
      (1995) 2 SCC 326; Neelagangabai & Another Vs. State of
      Karnataka & Others, (1990) 3 SCC 617; and Neyvely Lignite
      Corporation Ltd. Vs. Special Tahsildar (Land Acquisition) Neyvely
      and Others, (1995) 1 SCC 221.
F            2.2 On the other hand, it was the case on behalf of the original
      owners that the MRPL, being an allottee from the KIADB and the
      beneficiary of the land acquisition proceedings is the KIADB and not
      the MRPL and the amount awarded by the Land Acquisition Officer
      was deposited by the KIADB, MRPL cannot be said to be a ‘person
G     interested’. Relying upon the decision of this Court in the case of
      Peerappa Hanmantha Harijan Vs. State of Karnataka, (2015) 10
      SCC 469, it was prayed to dismiss the appeals.
            2.3 By the impugned common judgment and order and mainly
      relying upon the decision of this Court in the case of UP Awas Evam
H     Vikas Parishad (supra), the High Court has granted the permission to
 GREGORY PATRAO AND ORS. v. MANGALORE REFINERY                               101
 AND PETROCHEMICALS LIMITED & ORS. [M. R. SHAH, J.]

MRPL to file the appeals challenging the judgment and award passed by        A
the Reference Court and thereafter has quashed and set aside the
judgment and award passed by the Reference Court by holding that the
MRPL can be said to be a “person interested” and therefore, ought to
have been heard before enhancing the amount of compensation.
Thereafter, the High Court has remanded the matter back to the
                                                                             B
Reference Court for a decision afresh after affording an opportunity to
all the parties to adduce evidence including MRPL.
      2.4 Feeling aggrieved and dissatisfied with the impugned common
judgment and order passed by the High Court, the original claimants/
original landowners have preferred the present appeals.
                                                                             C
       3. Shri Shailesh Madiyal, learned counsel appearing on behalf of
the appellants – original claimants has vehemently contended that in the
facts and circumstances of the case, the High Court has erred in quashing
and setting aside the judgment and award/order passed by the Reference
Court in the appeals preferred by MRPL by holding that MRPL can be
said to be a “person interested” and therefore, MRPL ought to have           D
been heard by the Reference Court before enhancing the amount of
compensation.
       3.1 Shri Madiyal, learned counsel appearing on behalf of the
appellants has submitted that in the present case the real issue is as to
whether in an acquisition under KIAD Act, 1966, a post-acquisition           E
allottee of a parcel of land is a necessary party in the proceedings for
the determination of the compensation.
       3.2 It is urged that in terms of Section 28(1) of the KIAD Act,
1966, the acquisition is carried out by the State Government “for the
purpose of development by the Board, or for any other purpose, in            F
furtherance of the objects of the said Act”. That in the present case, the
acquisition was carried out by the State Government for the purposes of
“establishment of industry and to develop it” through the KIADB. It is
submitted that even the preliminary/final notifications do not mention
that the acquisition was for the MRPL. It is further urged that in terms     G
of Section 28(8) of the KIAD Act, 1966, the State Government, after it
has taken possession of the land, transfers the land to the KIADB and,
thereafter in terms of Section 32(2) of the KIAD Act, 1966, the KIADB
is empowered to deal with the land so transferred in accordance with
the regulations made and the directions given by the State Government
                                                                             H
102            SUPREME COURT REPORTS                          [2022] 12 S.C.R.


A     in this behalf. It is submitted that therefore, the company to which a land
      is allotted under the KIAD Act, 1966 cannot be said to be the beneficiary
      of the acquisition. It is submitted that as such the beneficiary is in fact
      the KIADB which in turn allots the acquired land to companies such as
      MRPL.
B             3.3 It is submitted that as such the issue involved in the present
      appeals is not res integra in view of the direct decision of this Court in
      the case of Peerappa Hanmantha Harijan (supra). That this Court,
      in the above case dealing with an acquisition under the KIAD Act, 1966
      itself, repelled the claim of the post-acquisition allottee company that it
      has a right to participate in the award proceedings for determination of
C     the market value of the land. It is submitted that this Court, after
      considering, inter alia, the scheme of the KIAD Act, 1966 held that the
      allottee company is not a beneficiary of the acquired land under the
      KIAD Act, 1966. That in the said decision, it is further observed and
      held that Section 54 of the Land Acquisition Act, which provides a right
D     to appeal is only available to the landowners, State Government and the
      beneficiary of the acquired land and not the allottee company. It is
      submitted that in the present case, KIADB can be said to be a beneficiary
      of the acquired land and not the allottee company - MRPL. It is submitted
      that therefore, the appeals filed by the respondent No.1 – MRPL before
      the High Court were not at all maintainable and the High Court ought to
E     have dismissed the said appeals in view of the law laid down in the case
      of Peerappa Hanmantha Harijan (supra).
            3.4 Now, so far as, reliance placed by the High Court on the
      judgments of this Court in UP Awas Evam Vikas Parishad (supra)
      and Himalayan Tiles and Marble (P) Ltd. (supra) while passing the
F     impugned common judgment and order, it is vehemently submitted by
      learned counsel appearing on behalf of the appellants – original
      landowners that the High Court has committed a grave error in relying
      upon the aforesaid decisions. That both the aforesaid decisions, which
      have been heavily relied upon by the High Court while passing the
G     impugned common judgment and order are not applicable at all with
      respect to an acquisition under the KIAD Act, 1966.
             3.5 Hence, the aforesaid decisions do not apply to the facts and
      circumstances of the present case, since the said judgments pertain to
      the acquisition under Part VII of the Land Acquisition Act r/w Section
H     50 of the Land Acquisition Act, which provides for direct acquisition for
 GREGORY PATRAO AND ORS. v. MANGALORE REFINERY                                 103
 AND PETROCHEMICALS LIMITED & ORS. [M. R. SHAH, J.]

a company/local authority. It is submitted that the conclusion of this Court   A
at para 24 of UP Awas Evam Vikas Parishad (supra) clearly states
that a company or local authority for whom a land is being acquired has
a right to participate before the Reference Court. But in the present
case, the land has been acquired for the KIADB, which is neither a
company nor a local authority.
                                                                               B
       3.6 It is submitted that as such the decisions of this Court in the
case of UP Awas Evam Vikas Parishad (supra) and Himalayan Tiles
and Marble (P) Ltd. (supra) have been considered and distinguished
by this Court in the case of Peerappa Hanmantha Harijan (supra) (at
paras 61 and 62).
                                                                               C
       3.7 It is further submitted that even in the subsequent decision,
this Court in the case of Satish Kumar Gupta Vs. State of Haryana,
(2017) 4 SCC 760 relying upon the case of Peerappa Hanmantha
Harijan (supra) has distinguished the judgments in the case of UP Awas
Evam Vikas Parishad (supra) and Himalayan Tiles and Marble
(P) Ltd. (supra), and has held and taken a view that a post-acquisition        D
allottee of land is neither a necessary or proper party nor has any locus
to be heard in the matter of determination of compensation under the
scheme of the Land Acquisition Act.
       3.8 It is further submitted by learned counsel appearing on behalf
of the appellants that as such the High Court has committed a grave            E
error in not following a binding precedent of this Court rendered in the
case of Peerappa Hanmantha Harijan (supra). That the aforesaid
judgment of this Court was binding upon the High Court but the High
Court has not followed the same and has observed on the basis of an
erroneous reasoning that the decision of this Court in UP Awas Evam            F
Vikas Parishad (supra), being a decision of Three Judge Bench as
compared to a decision of Two Judge Bench in Peerappa Hanmantha
Harijan (supra) binds the High Court. It is submitted that the High
Court has not properly appreciated and considered the fact that the
decision of this Court in the case of UP Awas Evam Vikas Parishad
(supra) was subsequently considered and distinguished by this Court in         G
the case of Peerappa Hanmantha Harijan (supra). Therefore, the
High Court was bound by the decision of this Court in the case of
Peerappa Hanmantha Harijan (supra) even on the doctrine of stare
decisis as embodied in Article 141 of the Constitution and reliance is
placed on the following decisions of this Court:-                              H
104            SUPREME COURT REPORTS                         [2022] 12 S.C.R.


A           “Director of Settlements, A.P. Vs. M.R. Apparao, (2002) 4
            SCC 638 (para 7); Rashmi Metaliks Ltd. Vs. Kolkata
            Metropolitan Development Authority, (2013) 10 SCC 95
            (para 7) and Bir Singh Vs. Mukesh Kumar, (2019) 4 SCC
            197 (para 30).
B           3.9 Making the above submissions, it is prayed to allow the present
      appeals.
            4. Present appeals are vehemently opposed by Ms. Shalini Sati
      Prasad, learned counsel appearing on behalf of the respondent No.1 –
      MRPL.
C            4.1 It is submitted by learned counsel appearing on behalf of the
      respondent No.1 – MRPL that the present appeals raise the question as
      to whether respondent No.1 – MRPL can be said to be a “person
      interested” for the purpose of Section 18(1) of the Land Acquisition Act,
      1894 and consequently, whether the respondent No. 1 was a proper
D     party in the proceedings before the Learned Reference Court. It is
      submitted that as such there is no infirmity in the impugned judgment
      and order passed by the High Court as the High Court has relied upon
      the direct judgments of this Court in the case of UP Awas Evam Vikas
      Parishad (supra) and Himalayan Tiles and Marble (P) Ltd. (supra).

E             4.2 Learned counsel appearing on behalf of the MRPL has
      vehemently submitted that the MRPL can be said to be a “person
      interested” for the purpose of Sections 18 and 20 of the Land Acquisition
      Act and Section 29(4) of the KIAD Act, 1966 and therefore was a
      proper party in the proceedings before the Reference Court.

F            4.3 It is submitted that there is no requirement under Section
      28(1) or Section 28(4) of the KIAD Act, 1966 to make a statement in
      the notification as to the specific company for which the land is intended
      to be acquired. It is submitted that even otherwise in the agreement
      between KIADB and the MRPL, liability to pay the enhanced amount
      of compensation would be upon the MRPL and therefore, before
G     enhancing the amount of compensation, the Reference Court ought to
      have heard the MRPL. That the MRPL cannot be made liable to bear
      the financial burden of the enhanced awarded amount without a fair
      chance of contesting the enhancement by the Reference Court.
      Therefore, the High Court has rightly remanded the matter to the
      Reference Court to provide the MRPL, who is a “person interested”, an
H
 GREGORY PATRAO AND ORS. v. MANGALORE REFINERY                               105
 AND PETROCHEMICALS LIMITED & ORS. [M. R. SHAH, J.]

opportunity to be heard before awarding the enhanced amount of               A
compensation to the landowners.
       4.4 It is further submitted by the learned counsel appearing on
behalf of respondent No.1 – MRPL that as per Section 2(11) of the
KIAD Act, 1966, the expression “person interested” has the same
meaning assigned to it in Section 3 of the Land Acquisition Act. That as     B
per Section 3(b) of the Land Acquisition Act, the expression “person
interested” includes all persons claiming an interest in compensation to
be made on account of the acquisition of the land under the said Act;
and a person shall be deemed to be interested in land if he is interested
in an easement affecting the land.
                                                                             C
       4.5 It is submitted that in the present case, KIADB constituted
under the KIAD Act, 1966 had executed an agreement with the MRPL
dated 08.12.1994. Accordingly, in view of the said agreement with the
KIADB, the land was acquired pursuant to the three different notifications
issued by the State under Section 28(4) of the KIAD Act, 1966. That
the land was granted to respondent No. 1 - MRPL by the State Level           D
Single Window Clearance Committee whose approvals are binding on
all departments and authorities in terms of Section 8 of the Karnataka
Industries Facilitation Act 2002. It is submitted that therefore, MRPL
can be said to be a “person interested” in the acquired land.
       4.6 On the submission that the MRPL can be said to be a “person       E
interested” under the relevant provisions of the Land Acquisition Act
and/or KIAD Act, 1966 and therefore a proper party before the
proceedings, the learned counsel appearing on behalf of the respondent
No.1 has heavily relied upon the judgments of this Court in the case of
UP Awas Evam Vikas Parishad (supra); Himalayan Tiles and                     F
Marble (P) Ltd. (supra) as well as another decision of this Court in
the case of Delhi Development Authority Vs. Bhola Nath Sharma
(Dead) by L.Rs. and Ors., 2011 (2) SCC 54.
       4.7 It is further submitted that as such and being well aware that
the land had been acquired for the MRPL, the appellants herein in fact       G
had impleaded MRPL as a party respondent in their petition challenging
the acquisition before the High Court. Therefore, thereafter in the
references made for enhancement of compensation, the landowners ought
to have impleaded the MPRL, being an affected and proper party.

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106            SUPREME COURT REPORTS                         [2022] 12 S.C.R.


A            4.8 Learned counsel appearing on behalf of the MRPL has further
      submitted that MRPL cannot be made liable to bear the financial burden
      of the enhanced amount of compensation without being given a fair
      chance of contesting the enhancement of the amount of compensation.
      Reliance is placed upon paras 22 and 41 of the case of UP Awas Evam
      Vikas Parishad (supra). It is submitted that the ratio of this Court in
B
      the case of UP Awas Evam Vikas Parishad (supra) in paras 22 and
      41 has not been considered and distinguished by this Court in the case of
      Peerappa Hanmantha Harijan (supra). It is submitted that therefore,
      even if it is presumed that the respondent No. 1 - MRPL does not have
      any right to be impleaded in the proceedings before the learned Reference
C     Court, the principles of natural justice and the doctrine of legitimate
      expectation would be attracted so as to ensure that the respondent No.
      1 – MRPL is not rendered remediless while being burdened with the
      financial implications of the orders passed by the learned Reference
      Court in the absence of any opposition to the enhancement.
D           4.9 Making above submissions and relying upon the above
      decisions, it is prayed to dismiss the present appeals.
            5. Heard the learned counsel for the respective parties at length.
             6. The short question, which is posed for the consideration of this
      Court is, whether, respondent No.1 – MRPL, who is simply an allottee
E     of the land by the KIAD Board, after the acquisition of the lands under
      Section 28 of the KIAD Act, 1966, which was for the benefit of
      Karnataka Industrial Areas Development Board (KIADB) can be said
      to be a “person interested” under the provisions of KIAD Act, 1966 and
      therefore, was a proper party in the reference proceedings initiated at
F     the instance of the original landowners?
             7. While answering the aforesaid issue/question, it is required to
      be noted that in the present case, the land has been acquired under the
      provisions of the KIAD Act, 1966 and the notification has been issued
      under Section 28(1) of the KIAD Act, 1966. The land has been acquired
G     by the State Government for KIADB under three different notifications.
      After the lands were acquired, respondent No.1 – MRPL has been
      allotted the lands acquired as per the agreements between the KIADB
      and the MRPL. The present is not an acquisition under the provisions of
      the Land Acquisition Act and therefore, as such, neither Section 50 of
      the Land Acquisition Act, 1894 nor any other provisions of the Land
H
 GREGORY PATRAO AND ORS. v. MANGALORE REFINERY                                 107
 AND PETROCHEMICALS LIMITED & ORS. [M. R. SHAH, J.]

Acquisition Act, 1894 shall be applicable with respect to the lands            A
acquired under the provisions of the KIAD Act, 1966. Taking into
consideration, the aforesaid factual aspects, the impugned judgment and
order passed by the High Court in which it has heavily relied upon the
decisions of this Court in the case of UP Awas Evam Vikas Parishad
(supra) and Himalayan Tiles and Marble (P) Ltd. (supra) are required
                                                                               B
to be considered.
       7.1 At the outset, it is required to be noted that as such, the issue
involved in the present appeal in respect of the acquisitions under the
KIAD Act, 1966 and the right of the subsequent allottee to participate in
the reference proceedings and whether the subsequent allottee can be
said to be a “person interested” under the provisions of the KIAD Act,         C
1966 is no longer res integra. While deciding the acquisition under the
very KIAD Act, 1966 and the right of the subsequent allottee, who has
been allotted the land by the KIADB in the case of Peerappa
Hanmantha Harijan (supra) after distinguishing the decision of this
Court in the case of UP Awas Evam Vikas Parishad (supra) and                   D
Himalayan Tiles and Marble (P) Ltd. (supra), it is specifically
observed and held by this Court that an allottee company cannot be said
to be a beneficiary or a “person interested” entitled for hearing before
determination of compensation. By observing and holding so, this Court
had an occasion to consider the entire scheme of acquisition under the
KIAD Act, 1966 and has distinguished the acquisition under the Land            E
Acquisition Act, 1894. Before this Court also, the High Court remanded
the matter at the instance of the allottee company in the writ petition
filed by the allottee company to the Reference Court. This Court set
aside the same while holding that the allottee company, who has been
allotted the land under the provisions of the KIAD Act, 1966, can neither      F
be said to be a beneficiary nor a “party interested” entitled for hearing
before determination of compensation. This Court in the case of
Peerappa Hanmantha Harijan (supra) considered in detail the
allotment/lease agreement in favour of the allottee/lessee and also the
relevant provisions of the KIAD Act, 1966 and has observed in paragraphs
50 to 54 as under:-                                                            G

      “50. On a careful examination of the aforesaid clauses of the
      lease agreement executed between the parties in respect of the
      land of the appellants, it becomes manifestly clear that the said
      agreement is executed by KIADB in favour of the Company after
                                                                               H
108      SUPREME COURT REPORTS                         [2022] 12 S.C.R.


A     allotment of land was made in favour of the Company as provided
      under Regulations 10(a) and (c) of the K IADB Regulations
      respectively by following the procedure of inviting applications
      and submission of the applications by the interested parties along
      with the required deposits towards the cost of the land. Further,
      Clauses 5(a) and (b) of the lease agreement referred to supra,
B
      would clearly state that the premium indicated in Clause 1 of the
      lease agreement represents the tentative cost of the land and in
      the event of the lessor incurring payment of amounts to the
      landowners over and above the awards made by the acquiring
      authority by virtue of the award passed by the competent court of
C     law or in view of the provisions of the LA Act in respect of demised
      premises or any part thereof, the same shall be met by the lessee
      within one month from the date of receipt of the communication
      signed by the Executive Member or any other officer authorised
      by the lessor. Clause 5(b) also makes similar provision to that
      effect between the lessor and the lessee.
D
      51. From a careful reading of the aforesaid clauses of the lease
      agreement along with the provisions of Section 32(2) of the KIAD
      Act and Regulations 4, 7, 10(b), (c) and (d) of the K IADB
      Regulations, it is clear that the Company is only the lessee by way
      of allotment of the land as the same has been allotted by KIADB in
E     its favour and has executed the lease deed in its favour in respect
      of the allotted land.
      52. In view of the aforesaid documents, namely, the notifications
      issued under Sections 28(1) and 28(4) of the KIAD Act by the
      State Government, it can be safely concluded by us that the
F     acquisition of the land involved in these proceedings is for the
      purpose of industrial development by KIADB in Sedam Taluk.
      Therefore, the beneficiary of the acquired land is only KIADB but
      not the Company as claimed by it. A reading of Section 28(5) of
      the KIAD Act makes it clear that the land which is acquired by
G     the State Government statutorily vests absolutely with it. After
      following the procedure provided under Sections 28(6) and (7) of
      the KIAD Act, the State Government takes possession of the
      acquired land from the owners/person/persons who are in
      possession of the land and transfers the same in favour of KIADB for
      its development and disposal of the same in accordance with
H     Regulation 10(a) of the KIADB Regulations, referred to supra.
GREGORY PATRAO AND ORS. v. MANGALORE REFINERY                             109
AND PETROCHEMICALS LIMITED & ORS. [M. R. SHAH, J.]

   53. In the instant case, a perusal of the provisions of the lease      A
   agreement executed between the parties referred to supra and
   Regulation 10 clauses (a), (c), (d) and (e) of the KIADB Regulations
   make it abundantly clear that the Company is only the allottee/
   lessee of the acquired land and as per Clauses 5(a) and (b) of the
   lease agreement referred to supra, the premium indicated in the
                                                                          B
   lease agreement in respect of the allotted land in its favour
   represents the tentative cost of the land. It has been further
   specified in the lease agreement that in the event of the lessor
   incurring the payment of amounts to the landowners over and
   above the awards made by the acquiring authority by virtue of
   awards passed by the competent court of law in view of the             C
   provisions of the Land Acquisition (Amendment) Act, 1984 in
   respect of demised premises or any part thereof, the same shall
   be met by the lessee within one month from the date of receipt of
   communication signed by the Executive Member or any other
   officer authorised by the lessor. In view of the above conditions
                                                                          D
   of the lease agreement, neither KIADB nor the Company can
   contend that the acquisition of the land involved in these
   proceedings is in favour of the lessee Company. Therefore, the
   Company is neither a beneficiary nor an interested person as
   claimed by them in terms of Section 2(11) of the KIAD Act or
   under Section 3(b) of the LA Act as per which, “person interested”     E
   includes all persons claiming an interest in compensation to be
   made on account of the acquisition of land under the KIAD Act
   and that a person shall be deemed to be interested in the land if he
   is interested in an easement affecting the land. It is necessary to
   examine Section 3(b) read with Section 9 of the LA Act, which
                                                                          F
   deals with notice to persons interested and Section 11, which deals
   with enquiry and award to be passed by the Deputy Commissioner/
   Land Acquisition Officer.
   54. A careful reading of the aforesaid provisions of the LA Act,
   the KIAD Act and the KIADB Regulations would clearly go to show
   that the Company is neither a beneficiary, nor an interested person    G
   in the land as on the date of acquisition of the land, as the land
   was acquired by the State Government in favour of KIADB who is
   the beneficiary and it has allotted in favour of the Company after
   the acquired land was transferred in its favour by the State
   Government and executed the lease agreement referred to supra.”        H
110            SUPREME COURT REPORTS                        [2022] 12 S.C.R.


A           7.2 Thereafter, this Court distinguished the nature of acquisition
      under the Land Acquisition Act from the acquisition under the KIAD
      Act, 1966 by observing as under in paragraphs 57, 58 and 60 to 65:-
            “57. For the acquisition of land under the provisions of the LA
            Act in favour of a company the mandatory procedure as provided
B           under Part VII of the LA Act and Rules must be adhered to, that
            is not the case in the acquisition of land involved in these
            proceedings as the acquisition of land is under the provisions of
            the KIAD Act and therefore the reliance placed upon the provision
            of Section 3(f)(viii) of Karnataka LA Amended Act 17 of 1961 is
            not applicable to the facts of the case on hand and therefore, the
C           said provision cannot be made applicable to the case on hand.
            58. The definition of “public purpose” under the LA Act cannot
            be imported to the acquisition of land by the State Government
            for the industrial development under the provision of the KIAD
            Act as the words “development”, “industrial area” and “industrial
D           estate” have been clearly defined under sub-sections (5), (6) and
            (7) of Section 2 of the KIAD Act which reads thus:
               “2. (5) ‘Development’ with its grammatical variations means
               the carrying out of levelling, digging, building, engineering,
               quarrying or other operations in, on, over or under land, or the
E              making of any material change in any building or land, and
               includes redevelopment; and ‘to develop’ shall be construed
               accordingly;
               (6) ‘Industrial area’ means any area declared to be an
               industrial area by the State Government by notification which
F              is to be developed and where industries are to be
               accommodated; and industrial infrastructural facilities and
               amenities are to be provided and includes, an industrial estate;
               (7) ‘Industrial estate’ means any site selected by the State
               Government where factories and other buildings are built for
G              use by any industries or class of industries.”
                              X        X       X        X
            60. The reliance placed upon the provisions of Sections 50(1)
            and (2) of the LA Act, also are not applicable to the case on hand
            for the reason that Section 50 of the LA Act applies to the
H
GREGORY PATRAO AND ORS. v. MANGALORE REFINERY                             111
AND PETROCHEMICALS LIMITED & ORS. [M. R. SHAH, J.]

   acquisition of land in favour of a company by the State Government     A
   by following the mandatory procedure contemplated under Part
   VII of the LA Act and relevant rules framed for that purpose.
   Therefore, the claim made by the Company that it has got every
   right to participate in the proceedings for determination and
   redetermination of the market value of the acquired land and award
                                                                          B
   of compensation passed by the Land Acquisition Officer or Deputy
   Commissioner or before the Reference Court or the appellate
   court is wholly untenable in law and therefore, the submissions
   made on behalf of the Company cannot be accepted and the same
   is rejected.
   61. Further, both the learned Senior Counsel on behalf of KIADB and    C
   the Company have placed reliance on various decisions rendered
   by this Court in support of their above respective legal submissions
   that the Company is an interested person and, therefore, it has got
   right to participate in the proceedings before the Reference Court
   for determination of compensation before passing the award either      D
   by the Land Acquisition Officer or the Deputy Commissioner or
   the Reference Court at the instance of the owner or any other
   interested person. These include judgments rendered by this Court
   in U.P. Awas Evam Vikas Parishad v. Gyan Devi [(1995) 2 SCC
   326] , Himalayan Tiles and Marble (P) Ltd. v. Francis Victor
   Coutinho [(1980) 3 SCC 223] and P. Narayanappa v. State of             E
   Karnataka [(2006) 7 SCC 578] and other decisions which are
   not required to be mentioned in this judgment as they are all
   reiteration of the law laid down in the above cases.
   62. The reliance placed on the various decisions of this Court by
   both the learned Senior Counsel on behalf of KIADB and the             F
   Company, is misplaced as none of the said judgments relied upon
   are applicable to the fact situation in the present case for the
   reason that those cases dealt with reference to the acquisition of
   land under the provisions of the LA Act, either in favour of the
   company or development authorities, whereas in the case on hand,       G
   the acquisition proceedings have been initiated under the KIAD
   Act for industrial development by KIADB. Further, the original
   acquisition record in respect of the acquired land involved in the
   proceedings by the learned Standing Counsel on behalf of the
   State of Karnataka as per our directions issued vide our orders
                                                                          H
112      SUPREME COURT REPORTS                         [2022] 12 S.C.R.


A     dated 17-11-2014 [Peerappa Hanmantha Harijan v. State of
      Karnataka, 2014 SCC OnLine SC 1678, wherein it was directed:
      “Issue notice to the State Government. The learned counsel for
      the petitioners to take out notice to the learned Standing Counsel
      appearing for the State Government. Dasti, in addition, is also
      permitted. Mr V.N. Raghupathy, learned counsel accepts notice
B
      for the State of Karnataka and Mr Nishanth Patil, learned counsel
      accepts notice for Karnataka Industrial Area Development Board
      (for short ‘KIADB’). The learned counsel appearing for the State
      Government and the learned counsel appearing for KIADB are
      directed to produce the relevant records in respect of the
C     proceedings relating to land acquisition involved in these matters.
      There shall be stay of the effect and operation of the impugned
      order during the pendency of these petitions. List the matters after
      four weeks. In the meanwhile, all the respondents are at liberty to
      file written statements, if any.”] and 24-3-2015 [Peerappa
      Hanmantha Harijan v. State of Karnataka, 2015 SCC OnLine
D
      SC 1707, wherein it was directed: “Heard Ms Kiran Suri, learned
      Senior Counsel for the petitioners in SLPs (C) Nos. 31624-25 of
      2014 in part. List all the matters as part for further hearing. Vide
      order dated 17-11-2014, learned counsel for the State as well as
      the learned counsel for KIADB were directed to produce the
E     relevant records in respect of the proceedings relating to land
      acquisition involved in these matters, record as well as the records
      relating to allotment of land. However, as per office records,
      nothing has been produced so far. In this view of the matter, the
      learned counsel for the State as well as the learned counsel
      for KIADB are directed to comply with the order dated 17-11-2014
F
      and produce the relevant records in respect of the proceedings
      relating to land acquisition and the allotment of land involved in
      these matters before the next date of hearing. List the matters on
      15-4-2015.”], do not disclose the fact that the acquisition of lands
      covered in the acquisition notifications are in favour of the
G     Company. Thus, the acquisition of land in favour of K IADB is
      abundantly clear from the preliminary and final notifications issued
      by the State Government and thereafter following the procedure
      under sub-sections (6) and (7) of Section 28 of the KIAD Act, it
      took possession of the acquired land from the owners who were
      in possession of the same and was transferred in favour
H
GREGORY PATRAO AND ORS. v. MANGALORE REFINERY                              113
AND PETROCHEMICALS LIMITED & ORS. [M. R. SHAH, J.]

   of KIADB for its disposal for the purpose for which lands were          A
   acquired as provided under Section 32(2) of the KIAD Act read
   with the Regulations referred to supra framed by KIADB under
   Section 41(2)(b) of the KIAD Act. Therefore, the reliance placed
   upon the judgments of this Court by the learned Senior Counsel
   on behalf of the Company and KIADB, are wholly inapplicable to
                                                                           B
   the fact situation and do not support the case of the Company.
   63. In view of the foregoing reasons recorded by us on the basis
   of the acquisition notifications issued by the State Government
   under the statutory provisions of the KIAD Act and therefore,
   we have to answer Points (i), (ii) and (iii) in favour of the
   landowners holding that the Company is neither the beneficiary          C
   nor interested person of the acquired land, hence, it has no right to
   participate in the award proceedings for determination of the
   market value and award the compensation amount of the acquired
   land of the appellants. Hence, the writ petition filed by the Company
   questioning the correctness of the award passed by the Reference        D
   Court which is affirmed by the High Court is not at all maintainable
   in law. On this ground itself, the writ petition filed by the Company
   should have been rejected by the High Court, instead it has allowed
   and remanded the case to the Reference Court for reconsideration
   of the claims after affording opportunity to the Company, which
   order suffers from error in law and therefore, the same is liable to    E
   be set aside.
   64. Further, the learned Judge of the High Court has erroneously
   held that the allottee Company is a beneficiary of the acquired
   land of the appellants, which finding of the learned Judge is not
   correct both on facts and in law. The findings and reasons recorded     F
   by the High Court in the impugned judgment in allowing the writ
   petition and quashing the award of the Reference Court and
   remanding it back to the Reference Court and allowing the
   Company to participate in the proceedings for redetermination of
   compensation for the acquired land is wholly impermissible in law       G
   and the same are in contravention of the provisions of the KIAD
   Act, the LA Act, the KIADB Regulations and the lease agreement,
   which has been executed by KIADB in favour of the Company and
   therefore, the impugned judgment and order [State of
   Karnataka v. Peerappa Hanmantha Harijan, Review Petition
                                                                           H
114            SUPREME COURT REPORTS                            [2022] 12 S.C.R.


A           No. 2537 of 2013 in MFA No. 32157 of 2012, order dated 22-9-
            2014 (KAR)] is liable to be set aside by allowing the appeals of
            the owners.
            65. Further, the learned Single Judge of the High Court has further
            committed an error in law in not appreciating Section 54 of the
B           LA Act, which provision provides the right to appeal to the
            landowners, or State Government and beneficiaries of the acquired
            land but not to the company which is the lessee. When the company
            does not have the right to file an appeal against the award it also
            has no right to file a writ petition. KIADB has filed the belated appeal
            after disposal of the appeal filed by the appellants by the High
C           Court and against which award it has filed the present appeal
            questioning the correctness of the same and prayed for
            enhancement of compensation and the said appeal is being
            disposed of by this common judgment after adverting to the rival
            legal contentions urged on behalf of the parties. The High Court
D           has rightly dismissed the belated appeal filed by KIADB.”
            7.3 This Court thereafter had considered the decisions in the case
      of UP Awas Evam Vikas Parishad (supra) and Himalayan Tiles
      and Marble (P) Ltd. (supra) and has distinguished the same and has
      observed and held that the decisions in the case of UP Awas Evam
E     Vikas Parishad (supra) and Himalayan Tiles and Marble (P) Ltd.
      (supra) shall not be appliable with respect to the acquisition under the
      KIAD Act, 1966. Once, this Court in the subsequent decision in the
      case of Peerappa Hanmantha Harijan (supra) dealt with and
      considered the earlier decisions in the case of UP Awas Evam Vikas
      Parishad (supra) and Himalayan Tiles and Marble (P) Ltd. (supra)
F     and distinguished the same and observed and held with respect to the
      acquisition under the KIAD Act, 1966 that the allottee company can
      neither be said to be a “person interested” nor entitled for hearing before
      determination of compensation, the said ratio was binding upon the High
      Court. Thus, it was not open for the High Court to not follow the binding
G     decision of this Court in the case of Peerappa Hanmantha Harijan
      (supra) by observing that in the subsequent decision in the case of
      Peerappa Hanmantha Harijan (supra), the earlier decisions in the
      case of UP Awas Evam Vikas Parishad (supra) and Himalayan Tiles
      and Marble (P) Ltd. (supra) have not been considered. The High
      Court has not noted that as such while deciding the case of Peerappa
H
 GREGORY PATRAO AND ORS. v. MANGALORE REFINERY                                 115
 AND PETROCHEMICALS LIMITED & ORS. [M. R. SHAH, J.]

Hanmantha Harijan (supra), this Court did consider the earlier                 A
decisions in the case of UP Awas Evam Vikas Parishad (supra) and
Himalayan Tiles and Marble (P) Ltd. (supra) and had clearly
distinguished the same. Not following the binding precedents of this Court
by the High Court is contrary to Article 141 of the Constitution of India.
Being a subsequent decision, in which the earlier decisions were
                                                                               B
considered and distinguished by this Court, the subsequent decision of
this Court was binding upon the High Court and not the earlier decisions,
which were distinguished by this Court.
      7.4 Under the circumstances, the High Court has committed a
grave/serious error in passing the impugned judgment and order by relying
upon the judgments of this Court in the case of UP Awas Evam Vikas             C
Parishad (supra) and Himalayan Tiles and Marble (P) Ltd. (supra)
and by not following the subsequent decision of this Court in the case of
Peerappa Hanmantha Harijan (supra).
       7.5 Now, so far as the reliance placed upon the decisions of this
Court in the case of UP Awas Evam Vikas Parishad (supra) and                   D
Himalayan Tiles and Marble (P) Ltd. (supra) relied upon by the
respondent No.1 – MRPL and even relied upon by the High Court is
concerned, at the outset, it is required to be noted that the said decisions
were with respect to the acquisition under the Land Acquisition Act,
1894 and the provisions of Land Acquisition Act, 1894, more particularly,      E
Section 50 of the Land Acquisition Act fell for consideration before this
Court. As observed and held by this Court in the subsequent decision in
the case of Peerappa Hanmantha Harijan (supra), the acquisition
under the Land Acquisition Act, 1894 and the acquisition under the KIAD
Act, 1966 are both distinct and the provisions under both the Acts are
distinguishable.                                                               F

       7.6 We see no reason to take a different view than the view
taken by this Court in the case of Peerappa Hanmantha Harijan (supra)
that the MRPL being a subsequent allottee after the land was acquired
by KIADB, can neither be said to be a beneficiary nor a “person
interested” for the purpose of determination of compensation. Under            G
the circumstances, the impugned judgment and order passed by the High
Court taking a contrary view is unsustainable and the same deserves to
be quashed and set aside.
      8. In view of the above and for the reasons stated above, present
appeals succeed. The impugned common judgment and order passed by              H
116             SUPREME COURT REPORTS                    [2022] 12 S.C.R.


A     the High Court setting aside the judgment and award/order passed by
      the Reference Court and remanding the matter to the Reference Court
      is hereby quashed and set aside. The judgment and order passed by the
      Reference Court Is hereby restored.
            Present appeals are allowed accordingly. However, in the facts
B     and circumstances of the case, there shall be no order as to costs.

      Devika Gujral                                          Appeals allowed.
      (Assisted by : Neha Sharma, LCRA)


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