Supreme Court of India
MOOTHA VENKATESWARA RAO (DEAD) TR. LRS.versusGODHAVARI CO-OP MILK P. UNION LTD. & ORS.
- Citation
- 2008 INSC 1393
- Decided
- 3 December 2008
- Disposal
- Dismissed
- Bench
- ALTAMAS KABIR
Holding
The acquisition proceedings do not stand set aside; the High Court’s extension of time was valid.
Summary
The State of Andhra Pradesh acquired five acres of land in 1978 under the Land Acquisition Act, 1894. After a series of writ petitions and appeals, the parties entered into a Memorandum of Settlement (MOU) in 1992, stipulating that compensation determined by a Subordinate Judge must be paid within eight weeks, otherwise the acquisition would be set aside. The Subordinate Judge fixed the compensation, but due to intervening stays and appeals, the State could not make the payment within the stipulated period. The High Court, however, extended the time for payment and refused to set aside the acquisition. The petitioners appealed to the Supreme Court, arguing that the acquisition should be void for default under the MOU. The Supreme Court held that the stay orders released the State from the eight‑week deadline, so the acquisition could not be set aside, and that the High Court’s extension of time was within its jurisdiction. Consequently, the appeal was dismissed.
Issues considered
- Whether the acquisition proceedings stand set aside due to the State's default in paying compensation within the eight‑week period stipulated in the Memorandum of Settlement.
- Whether the High Court erred in extending the time for payment and in refusing to set aside the acquisition.
Legislation cited
- Land Acquisition Act, 1894s. 4(1)
Subjects
Land acquisitionMemorandum of SettlementCompensation paymentDefaultSet aside of acquisitionExtension of timeSection 4(1) Land Acquisition Act
Judgment
[2008] 16 S.C.R. 1136
A MOOTHA VENKATESWARA RAO (DEAD) TR. LRS.
v.
GODHAVARI CO-OP MILK P. UNION LTD. & ORS.
(Civil Appeal No. 7083 of 2008)
DECEMBER 3, 2008
B
[ALTAMAS KABIR AND MARKANDEY KATJU, JJ.]
' Land Acquisition Act, 1894 - s.4(1) - Land acquisition
proceedings - Memorandum of settlement between parties
c ~ Condition therein that the Acquisition Authorities to deposit
the amount awarded within the stipulated time period and in
default, acquisition to be set aside - Payment not made in
terms of MOU - In appeal, High Court not setting aside the
acquisition proceedings and extending the time for making
D such deposit - Interference with - Held: Not called for - Due
to intervening circumstances, time schedule for depositing the
amount could not be followed - By order of the court,
Authorities stood released of the obligation of making deposit
within time specified in MOU - Hence, acquisition
E proceedings cannot be set aside.
\
By Notification dated 8. 7.1978, the State Government
acquired land of the appellant for construction purpose.
The Land Acquisition Officer passed an award fixing the
market value of the land at Rs.28,7501- per acre. Appellant
F~ challenged the acquisition by filing writ petition and the -
same was dismissed. However, the appeal was allowed.
Respondent then filed SLP and the· same was disposed "'
of, in view of the compromise between the parties. The
parties entered into Memorandum of Settlement that the
G date of Notification would be treated as 7.2.1991 for all
purposes; and that the compensation would be
determined by the Subordinate Judge which was to be
paid to the claimants within 8 weeks and in default the
acquisition would be set aside. Thereafter, the Reference
H 1136
MOOTHA VENKATESWARA RAO v. GODHAVARI CO-OP. 1137
MILK P. UNION LTD. & ORS.
-
Court fixed the market value at Rs.800/- per square yard. A
"' Aggrieved, respondents filed appeal contending that the
market value was wrongly fixed. High Court held t"at
even though the payment was not made in terms of the
MOU, since the main appeal was heard, the entire
acquisition could not be set aside. High Court direct~d B
the respondents to pay the compensation amount and
extended the time for depositing the same. Hence, the
present appeal.
The question which arose for consideration in this
appeal was whether having regard to the conditions
c
imposed in the Memorandum of Settlement, the
~ acquisition proceedings would stand set aside in view of
the default committed by the State and its authorities in
depositing the amount awarded within the time stipulated
in the Settlement. D
Dismissing the appeal, the Court
HELD: 1. The Order passed by the Second Senior
Civil Judge was to be the basis of the compensation to
E
', be awarded to the appellants. However, the said order
also came to be challenged in the High Court and a stay
was also granted to the execution thereof, which lasted
till the appeal was finally dismissed. It is only after the
dismissal of the appeal and the vacation of the stay order
that the respondents began to take steps for deposit of F
-.. the compensation amount as per the Memorandum of ·
Settlement. Therefore, it is obvious that because of
intervening circumstances, the time schedule conte-
mplated in the Memorandum of Settlement for deposit of
the compensation amount by the respondent stood G
disturbed. Because of the stay order granted by the High
,) . Court, the respondents were released from the obligation
of making such deposit within eight weeks from the date
on which the compensation was determined by the
H
"
1138 SUPREME COURT REPORTS [2008) 16 S.C.R.
A Subordinate Judge. Once the respondents stood
released of the obligation of making the deposit within the
time specified in the Memorandum of Settlement by the
orders of Court, it will no longer be available to· the
appellant to claim that because of the default In making
B the deposit, the acquisition should stand set aside in
terms of the Memorandum of Settlement. Therefore, the
acquisition proceeding does not stand set aside on
account of the default on the part of the respondents in
making the deposit within 8 weeks from the. determination
c of the value of the acquired land by the Subordinate
Judge. Consequentially it cannot be said that the High
Court had acted without jurisdiction in extending the time
for making the deposit. [Para 13] [1144-C-H; 1145-A]
2. There is no reason to interfere with the impugned
D judgment of the High Court. Stnce, the deposits are said
to have already been made pursuant to the permission
granted by the High Court, the claimants to the said
compensation will be entitled to withdraw the same upon
proper identification. [Para 14] [1145-B]
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7083 of 2008.
From the final Judgment and Order dated 9.6.2006 of the
F High Court of Andhra Pradesh at Hyderabad in First Appeal
No. 836 of 2003.
R.F. Nariman, L. Nageshwar Rao, M. Srinivas R. Rao,
Satyanarayana Murthy, Abid Ali Beeran, Sudha Gupta, Manoj
Saxena, Rajneesh Kr. Singh, Rahul Shukla, T.V. George, R.
G Santhan Krishnan, K. Radha Rani, Vijay Kumar and Mahesh
Babu for the appearing parties.
The Judgment of the Court was delivered by
AlTAMAS KABIR, J. 1. Leave granted.
H
MOOTHA VENKATESWARA RAO v. GODHAVARI CO-OP.1139
MILK P. UNION LTD. & ORS. [ALTAMAS KABIR, J.]
_. 2. Pursuant to a notification under Section 4(1) of the Land A
Acquisition Act, 1894 dated 8th June, 1978, the Government
of Andhra Pradesh acquired 5 acres of land in Survey No. 212/
1B of Ramanayyapeta in Kakinada Municipality for the purpose
of construction of a mini-dairy. The appellant herein was the
claimant before the Land Acquisition Officer, who passed an B
award fixing the market value of the land at Rs.28, 750/- per
acre. Possession of the lands was taken on 31st August, 1978.
~
The appellant, herein, challenged the acquisition itself by way
of a Writ Petition No.4082 of 1979, which was dismissed on
9th July, 1984. The appeal, which was preferred from the
judgment of the learned Single Judge, being \Nrit Appeal No.
c
670 of 1985, was allowed on 7th February, 1991. The matter
was carried to this Court by the respondents herein in SLP (C)
No.19302 of 1991, which ultimately ended in a compromise.
The Special Leave Petition was disposed of on 1st September,
1992, in pursuance of the Memorandum of Settlement filed by D
the parties, wherein it was agreed that the date of Notification
would be treated as 7th February, 1991, for all purposes, and,
accordingly, the market value of the lands as prevailing on the
said date was to be taken for determination of compensation.
E
3. Subsequent to the said order passed by this Court, the
matter was again taken up by the Reference Court. After taking
into consideration further evidence which was led and the
materials on record, the Reference Court fixed the market value
, at Rs.800/- per square yard and aggrieved by the same the F
--\
~
respondents herein preferred an appeal to the High Court, being
First Appeal No. 836 of 2003. During the hearing of the appeal,
the Memorandum of Settlement arrived at between the parties
was referred to and while on behalf of the respondents herein,
it was contended that the Reference Court had wrongly fixed
G
the market value of the acquired lands at Rs.800/- per square
;
yard, on behalf of the appellant herein, particular emphasis was
laid on the fourth paragraph of the Memorandum of Settlement,
which reads as follows:-
H
1140 SUPREME COURT REPORTS [2008] 16 S.C.R.
'
A "The compensation determined by the learned l
Subordinate Judge, Kakinada will have to be paid to the
respondent within a period of eight weeks thereafter. In
default, the Acquisition will stand set aside the rights and
liabilities of the parties will be determined in accordance
B with law."
4. The High Court was, however, of the view that despite ~
the fact that payment had not been made in terms of the
Memorandum of Settlement, since the main appeal was being
heard, the entire acquisition as such could not be washed
c away, which would be detrimental to both the parties. It is on
such note that the appeal was taken up for final decision though,
ultimately, the same was dismissed.
5. This appeal has been filed by the heirs of the original
D claimant, who had died in the meantime, mainly on the question
as to whether the High Court had erred in not setting aside the
acquisition proceedings in terms of the compromise which had
been arrived at between the parties and recorded in the order
dated 1st September, 1992 passed in SLP(C) No.19302 of
E 1991. The other ground, which had been taken by the appellant
is whether the High Court acted correctly in directing the
respondents to pay the compensation amount, which amounted
to extending the time for making such deposit which was
contrary to the terms of the Memorandum of Settlement.
F 6. Appearing for the appellants, Mr. R. Nariman, learned
~
Senior Advocate, confined h.is submissions to the two points
indicated hereinabove. Learned counsel urged that once a
compromise had been arrived at between the parties, the terms
whereof had been reduced to writing in the form of a
G Memorandum of Settlement, it was not open to the High Court
to ignore the terms and conditions contained therein upon
~
observing that since the main appeal was being heard, the
acquisition proceedings could not be washed away. Mr.
Nariman submitted that the approach, of the High Court was
H
MOOTHA VENKATESWARA RAO v. GODHAVARI CO-OP. 1141
MILK P. UNION LTD. & ORS. [AL TAMAS KABIR, J.]
entirely wrong since by operation of law the acquisition A
proceedings stood set aside on the failure of the respondents
to comply with the terms of the Memorandum of Settlement.
7. Mr. Nariman urged that in accordance with the terms of
the Memorandum of Settlement the learned Subordinate Judge, 8
Kakinada, was directed to determine the compensation
payable to the appellant herein for the land acquired, in
accordance with the provisions of the Land Acquisition Act,
1894. Certain other benefits to which the appellant was entitled
was also indicated in the said order. However, what was of
utmost importance was the condition that the compensation
c
which was to be determined by the learned Subordinate Judge,'
Kakinada, would have to be paid to the appellant within a period
of 8 weeks thereafter, in default the acquisition would stand set'
aside and the rights and liabilities of the parties would be,
determined in accordance with law. Mr. Nariman submitted that, D
in accordance with the terms of the Memorandum of Settlement
the learned Subordinate Judge determined the compensation.
payable to the appellant on 23.1.2003 and payment of the ·
compensation amount, as pei" the determination of the value
of the acquired lands by the Subordinate Judge, was to be E
made on or before 23.3.2003. However, even when the
Special Leave Petition was filed on 2.3.2007, no deposit had
been made in terms of the Memorandum of Settlement.
8. Mr. Nariman submitted that since the acquisition its'elf F
stood set aside in terms of the Memorandum of 'Settlement, the
_only course left open to the respondents was to issue a fresh
Notification for acquisition of the lands in question and to
proceed in accordance with law, thereafter, in computing the
compensation payable for the land on account of such ,G
acquisition. Mr. Nariman also submitted that the High Court had
acted beyond its jurisdiction and authority in unilaterally
extending the time for depositing the compensation amount,
since according to the terms of the same Memorandum of
Settlement the acquisition proceedings had been set aside.
H
1142 SUPREME COURT REPORTS [2008] 1&.S.C.R.
A 9. On the other hand, Mr. L. Nageshwar Rao, learned
Senior Advocate, submitted that attempts had been made to
deposit the compensation amount with the Divisional Officer,
Kakinada, by sending Demand Drafts for amounts of
Rs.2, 13,87,500/- and Rs.11, 14,34,033. An application was
B also moved on behalf of the respondent State before the
Second AdditiO'nal Senior Civil Judge, Kakinada, seeking
permission to deposit the said amount, but such prayer was
rejected on 22.8.2007, on the ground that the Special Leave
Petition was pending before this Court. A Civil Revision
c Petition filed against the said order is still pending decision in
the High Court. Mr. Rao submitted that ultimately by an order
dated 11. f0.2007 the High Court granted leave to the State
authorities to deposit the decretal amount before the Second
Additional Senior Civil Judge, Kakinada, without pre.judice to
D the rights and contentions of the parties. Pursuant thereto, the
amount was said to have been deposited on 22.10.2007.
10. It was submitted that admittedly there was a delay in
making the deposit in terms of the Memorandum of Settlement
which formed the basis of the order dated 1.9.1992 passed by
E this Court in Civil Appeal No. 3476 of 1992 filed by the Andhra
Pradesh Dairy Development Corporation, but such delay was
not intentional as various proceedings intervened in the
meantime. Mr. Rao submitted that in the appeal, being F.A.
No.836 of 2003, filed by Andhra Pradesh Dairy Development
F Corporation, the respondent No.2 herein, an interim order was
passed by the High Court on 23rd April, 2003, staying the
operation of the Order dated 23rd January, 2003, passed by .
the Principal Senior Civil Judge, Kakinada, fixing the market
value of the acquired land at Rs.800/- per square yard as on
G 7.2.1991, which continued to be· operative till the appeal itself
was dismissed by the High Court on 9.6.2006. It was also
submitted that immediately after the. pronouncement of the
Judgment by the High Court, steps were taken to deposit the
compensation amount as per the Memorandum of Settlement
H by making an application before the Second Additional Senior
MOOTHA VENKATESWARA RAO v. GODHAVARI CO-OP. 1143.
MILK P. UNION LTD. & ORS. [ALTAMAS KABIR, J.]
Civil Judge, Kakinada, praying for leave to make such deposit A
in the execution proceedings which had been commenced in
the meantime. While granting such· prayer, the High Court
directed that stay· of the execution would be subject to the
condition of the respondent herein depositing 1/4th of the
enhanced compensation in two equal instalments within four B
_j months from the date of the order, failing which the said petition
~ would stand dismissed. Since the respondents were unable to
deposit the said. amount they filed an application before the
High Court seeking extension of tim~ to make such deposit.
On the other hand, the appellant herein filed Writ Petition c
No.6832 of 2003 for restitution of the possession of the
acquired land. However, the High Court by its order dated
30.4.2003 dismissed the Writ Petition and granted the
respondents a further period of two months for making payment
of Rs.2 crores in instalments within a period of two months and
D
stayed further proceedings pursuant to the order dated
23.1.2003 passed by the Principal Senior Civil Judge,
~
Kakinada.
11. Mr. Rao submitted that in view of the aforesaid
proceedings and the interim order staying the execution E
proceedings, the respondents were unable to keep to the timing
in making the deposit. Mr. Rao submitted that keeping·in mind
all the aforesaid facts, the High Court had rightly not bound itself
"- to the time period stipulated in· the Memorandum of Settlement
for depositing the compensation amount. Mr. Rao urged that if F
~ the submission made on behalf of the appellant was to be
accepted, the only effect will be that a fresh Notification under
Section 4( 1) of the 1894 Act would have· to be issued and the
date for calculation of the compensation amount would have to
be taken from the fresh date of publication, which was likely to G
result in a substantial enhancement of the compensation
; payable for acquisition of the land in question.
12. On a careful consideration of the submissions made
on behalf of the respective parties, it is clear that the only
H
1144 :-,_, SUf>REME COURT ·REPORTS [2008) 16 S.C.R
A question woicn we ar~ called upon to decide is Whether having
regardJo the conditions .imposed tn the Memorandun;i of . ·
Settlement, the acquisition proceedings would stand.set aside
in view of the default committed by the :state and its authorities
in depositing the amount awarded whhin the t.ime stipulated in
B the Settlement. . •. · ' ·
13. Admittediy, the .order passed by the Second· Senior .
Civil Judge, Kakinada, was to be the basis of the
to
. compensation to be awarded ·the appellants herein. However,
the said order also came to be challenged in the High C9urt
· C and a stay was also granted to the· execution thereof, Which
lasted till the app~al was finally dismissed ori 9.6:2006. It is only ·
after the dismissal of the appeal arid the vacatioh of the stay ·
.order that the re~pondents began to take steps for deposit of
the com.pensation amount .as pe( the Memorandum of ·.
D Settlement It is, therefore, obvious that because of intervening
_circumstances, tti'e .time- sc;hedule contemplated in the
Memorand1JnfofSettfe111ent for deposit of the· compensation ·
'amou_nti:Jy .the respontt~nt stood disturt>~d . Because of the stay
order·granted by the High C.ourt, the respondents were ·released
E from fhe obligation ·Of!Jlaldn'g such deposit within eight weeks
from the date a.n which' the coh1pensation was determined by
· ·the. learned Sllbordinate Judge, Kak_inada (Second Additional
Senior Civil Judge). In our view, once the respondents stood
· ·released of the obligation .o f making the. deposit within the time
F specified ·ir:i the Memorandum of-Settlement by the orders of
Court, itwill no longer:be available .to the appellant to claim that
becau~e ·of the default in making the deposit, the acquisition
.should :stand set aside in terms of the ·Memorandum of
Settlement The. questions posed by · Mr~ Nariman at the
G beginning of the submis~ions, hav~:therefore , to be answered
.against the appellant .and .;n favour.ofthe .respondent. Firstly,
the acquisition proceeding does not stand set aside on account
of the default on the part of the respohdents in making the
deposit within 8 weeks from the determination of the value of
H the acquired .land by the learned Subordinate Judge, Kakinada.
MOOTHA VENKATESWARA RAO v. GODHAVARI CO-OP. 1145
MILK P. UNION LT~. & ORS. [ALTAMAS KABIR, J.]
Consequentially, even the second question raised by Mr. A
Nariman that the High Court had acted without jurisdiction in
extending the time for making the deposit cannot also be
sustained.
14. We, therefore, see no reason to interfere with the 8
impugned judgment of the High Court and the appeal is
., accordingly dismissed. Since, the. deposits are said to have
already been made pursuant to the permission granted by the
High Court, the claimants to the said compensation will be
entit.led to withdraw the same upon proper identification.
c
'ts. There' will be no order as to costs.
\~.
N:J. ,Appeal dismissed.
,.
.>
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "Land acquisition"Sign in to search