Holding

The State is not a "person interested" under Section 3(b) and therefore cannot maintain a reference under Section 30; such reference is void of jurisdiction.

Summary

The State of Bihar acquired land and the Collector awarded compensation to Sharda Devi, who claimed title as a raiyat. The State later sought a reference to the civil court under Section 30 of the Land Acquisition Act, 1894, asserting that the land actually belonged to the State and that the award was therefore void. The Supreme Court held that the State is not a "person interested" under Section 3(b) and cannot invoke Section 30 to contest its own acquisition. Consequently, the reference made by the Collector was without jurisdiction and all proceedings under Section 30 were declared a nullity. However, the Court clarified that the State may pursue other legal remedies outside the Section 30 reference. The appeal was allowed, setting aside the Division Bench decision and restoring the Single Judge's order.

Issues considered

Whether the State of Bihar qualifies as a "person interested" under Section 3(b) of the Land Acquisition Act, 1894 for the purpose of a reference under Section 30.
Whether a reference to the civil court under Section 30 is maintainable by the State when the dispute concerns a pre‑existing State interest in the land.
Whether proceedings initiated under Section 30 are void for lack of jurisdiction when the State is not a "person interested".
How the powers under Sections 18 and 30 of the Act differ with respect to limitation periods and the nature of the applicant.

Legislation cited

Bihar Land Reforms Act, 1950
Land Acquisition Act, 1894s. 11, s. 12, s. 16, s. 18, s. 20, s. 21, s. 26, s. 29, s. 30, s. 31, s. 3(b), s. 3(c), s. 4(1), s. 48, s. 5A, s. 6, s. 9

Subjects

Land acquisitionPerson interestedSection 30 referenceState pre‑existing rightNullity of proceedingsEminent domainCompensation

Judgment

-,

SHARDA DEVI A
v.
STATE OF BIHAR AND ANR.

JANUARY 8, 2003

[R.C. l..i\ttOTI AND BRIJESH KUMAR, JJ.] B

Land Acquisition A•t. 1894-Sections 30, 3(2) and I I-Dispute as to
pre-existing right or interest of State in the property sought to be acquired--
Reference to Civil Court by State-Maintainability of -Held, since State is C
not a 'person interested' under Section 3(b) and such dispute cannot be
adjudicated upon or referred to Civil Court, reference to the Court is wholly
without jurisdiction and proceedings 11nder Section 30 are a nullity-However,
State is not debarred from pursuing such other legal remedy before such other
forum as may be available.
D
Words and Phrases: 'Person interested'-Meaning of in the context of
Section 3(b) of the land Acquis#ion Act, I 894. ·

Respondent-State acquired the land in question. Collector made an
award and directed the amount of compensation as determined to be paid
to the appellant. Respondent filed an application before Collector seeking E
a reference to civil court under Section 30 of the Land Acquisition Act,
1894. It challenged the awud on the ground that the land did not belong
to the person from whom it was purportedly acquired and was a land
owned by the State having vested in it, consequent upon abolition of
proprietary rights, much before acquisition. Civil Court rejected the
reference. Respondent filed an appeal which was dismissed. It then filed F
a Letters Patent Appeal. Division Bench framed the question whether
reference under Section 30 of the Act was maintainable at the instance of
the respondent and placed the matter before the Full Bench. Full Bench
answered the question against the appellant and allowed the appeal. The
matter was remanded to the Single Judge for deciding the case in the light G
of the observations made by the Full Bench. Hence the present appeal.
Allowing the appeal, the Court.

HELD: State is not a 'person interested' as defined in Section 3(b)
of the Land Acquisition Act, 1894. It is not a party to the proceedings
before the Collector in the sense, which the expression 'parties to the . H
73
(' I "'

74 SUPREME COURT REPORTS (2003] I S.C.R.

A litigation' carries. Collector holds the proceedings and makes an award
as a representative of State Government. Land or an interest in land pre-
owned by State cannot be subject matter of acquisition by State. The
question of deciding the ownership of State or holding of any interest by
the State Government in proceedings before the Collector cannot arise in
B proceedings before the Collector as defined in Section 3(c) of the Act. If
it was a Government land there was no question of initiating the
proceedings for acquisition at all. The Government would not acquire the
land, which already vests in it. A dispute as to pre-existing right or interest
of State Government in the property sought to be acquired is not a dispute
capable of being adjudicated upon or referred to Civil Court for
C determination either under Section 18 or Section 30 of the Act. The
reference made by Collector to the Court was wholly without jurisdiction
and Civil Court ought to have refused to entertain the reference and ought
to have rejected the same. All the proceedings under Section 30 of the Act j... -

beginning from the reference and adjudication thereon by the Civil Court
suffer from lack of inherent jurisdiction and are, therefore, a nullity liable
D to be declared so. However, the quashing of the proceedings under Section
30 of the Act would not debar State from pursuing such other legal remedy
before such other forum as may be available to the State Government and
on the merits and the maintainability thereof. Further, the situation in law
would have been entirely different if the title of the appellant would have
E come to an end by any event happening or change taking place after the
making of the award by the Collector. [89-H; 90-A-EJ

Dr. G.H. Grant v. State of Bihar, (1965) 3 SCR 575 and Collector of
Bombay v. Nusurwanji Rattanji Mistri & Ors., AIR (1955) SC 298, relied
on.
F
Mohammad Wajeeh Mirza v. Secretary of State for India in Council,
AIR [19211 Oudh 31, approved.

Scindia Employees' Union v. State of Maharashtra and Ors., (1996) 10
SCC ISO; State of Maharashtra v. Sant Joginder Singh Kishan Singh and
G Ors., (1995) Supp. 2 SCC 475; Secretary ofState v. Sri Narain Khanna, AIR
[1942) PC 35; Govt. of Bombay v. Esufali Salebhai 34 Dom 618; Deputy
Collector, Calicut Division v. Aiyavu Pi/lay, 9 Ind Cas 341 (Mad.); Kothamasu
Kanakarathamma and Ors. v. State ofAndhra Pradesh and Ors., AIR (1965]
SC 304 and Nusserwanjee Pestonjee v. Meer Mynoodeen Khan Wullud Meer
H Sudroodeen Khan Bahadoor 6 Moo Ind App 134, referred to.
SHARDA DEVI v. STATE OF BIHAR [R.C. LAHOTI, J.} 75

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 14198/ A
1996 of 2002.

From the Judgment and Order dated 1.5.1996 of the High Court of
• Patna in LPA 39/88.

H.K. Lal, M.P. Jha, Ram Ekbal Roy and Gopal for the Appellant. B
B.B. Singh (N.P.) and Ashok Mathur, for the Respondent.

The Judgment of the Court was delivered by

R.C. LAHOTI, J. The land, which is the subject matter of controversy C
in these proceedings, is 36.86 acres area out of the total area of 45.92 acres
of land of plot Nos. 4, 5 and I 0 appertaining to khata No. 151 of Village
.~ Phulsari, District Lohardaga. Notification u/s 4(1) of the Land Acquisition
Act, 1894 (hereinafter 'the Act' for short) was issued on 16.02.1982 for
acquiring the said land for the project called Phulsari Sapathi Nala. Declaration
u/s 6 of the Act was issued on 25.05.1982. Objections u/s 9 of the Act were D
filed by the appellant herein. The State through Circle Officer, Kuru filed
reply to the objections. On 19.02.1986 the Collector made an award under
Section 11 of the Act directing the compensation, as appointed by him, to be
paid to Smt. Sharda Devi, the appellant.

The relevant facts, which are beyond the pale of controversy at this E
stage and as would set out briefly the history of litigation, may be noticed.
According to the appellant, the said land was Gairmajrua Malik land. It was
a part of zamindari estate. Before vesting of zamindari, the land was settled
by the ex-landlord in the name of one Deo Narain Prasad by means of a
registered deed of settlement dated 24.04.1954. It was a raiyati settlement. F
The appellant purchased the land from the said Deo Narain Prasad through
a registered deed of sale dated 07.09.1962. The appellant has developed the
land and kept it under cultivation raising the crops. Her name was mutated
in the revenue records by th~ Circle Officer. A correction slip was issued to
her in her name. The State realized revenue from her from the very date of
vesting, i.e. from 1955 till 1975. The rent receipts were exhibited on record. G
On 18.05.1979, the Circle Officer issued a notice u/s 3 of the Bihar
Public Land Encroachment Act, 1956 (Bihar Act XV of I 956) calling upon
the appellant to explain why she should not be treated as an encroacher on
the land and why her encroachment should not be removed. The notice was H
I

76 S.UPREME COURT REPORTS [2003) I S.C.R.

A issued on the premise that consequent upon vesting of zamindaris, the said
land had stood vested in the State of Bihar and was, therefore, 'public land'
within the meaning of clause (3) of Section 2 of the Bihar Public Land
Encroachment Act, 1956. The appellant filed a Writ Petition in the High
Court registered as Civil Writ Jurisdiction Case No. 366 of 1979 (R), laying
B challenge to the initiation of such proceedings. The counsel for the State
made appearance though a written counter affidavit was not filed. The High
Court after hearing both the parties, upheld the plea of the appellant that the
said land was Gainnajrua Malik and not Gairmajrua Aam land and by virtue
of the registered deed of transfer in favour of Deo Narain Prasad, the
predecessor-in-title of the appellant, the appellant was justified in claiming
C that she was raiyat of the land in question and, therefore, could be ejected
therefrom only in accordance with the provisions of the Chota Nagpur Tenancy
Act. Inasmuch as such ejectment is pennissible only on specified grounds,
none of which existed in the present case, the notice issued to the appellant
was without jurisdiction and liable to be quashed. The High Court by order
dated 23.07.1984 allowed the Writ Petition and directed the proceedings
D initiated against the appellant under the provisions of the Bihar Public Land
Encroachment Act, 1956 to be quashed.

In the year 1981, proceedings u/s 4(h) of the Bihar Land Reforms Act,
1950 proposing to annul the settlement of land in question in favour of Deo
E Narain Prasad were initiated. The proceedings were founded on the premise
that the said settlement was done with the object of defeating the provisions
of the Act. An inquiry was held. Once again the appellant filed a Writ Petition
seeking quashing of these proceedings. The petition was registered as CWJC
No. 1663 of 1981 (R) and disposed of by the High Court by order dated
25.03.1987.
F
During the pendency of these proceedings, notification u/s 4(1) of the
Act was published on 16.02.1982 as already stated. It appears that the Collector
was reluctant to make an award in favour of the appellant detennining the
quantum of compensation and directing its release to the appellant. On
07.01.1985 the Collector (Addi. Collector, exercising powers of Collector)
G passed an order holding that the land had vested in State and hence no award
directing payment of compensation to the appellant was called for. The
appellant filed a Writ petition in the High Court registered as CWJC No. 147
of 1985 (R). By order dated 13.02.1985, the High Court after hearing the
learned counsel for the State, directed the Writ Petition to be allowed. A
H mandamus was issued to the Collector to prepare the award in the name of
SHARDA DEVI v. STATE OF BIHAR [R.C. LAHOTI, J.] 77

the appellant. The High Court went on to observe "if there be any dispute A
thereafter, the maller be referred to the Civil Court under Sections 18 and
30 of the Land Acquisition Act for adjudication of any claim in accordance
with law." The order dated 07.01.1985 passed by Additional Collector,
Lohardaga was directed to be quashed. On 19.02.1986, the Collector (Land
Acquisition) prepared an award in the name of Smt. Sharda Devi directing B
the amount of compensation as determined by him to be paid to Smt. Sharda
Devi, the appellant.

On 06.06.1986, much after the expiry of six weeks the time appointed
for seeking a reference to the Civil Court u/s 18 of the Act, the Circle
Officer, Kuru filed an application before the Collector seeking a reference to C
the Civil Court. It was stated in the application that a dispute existed in
between the Circle Officer, Kuru Anchal (on behalfofthe State ofBihar) and
Smt. Sharda Devi as to title over the acquired land, which dispute may be
referred for adjudication to the Civil Court u/s 30 of the Act. The dispute as
to whether the title to the land vests in the appellant, so as to entitle her to
payment of compensation or whether the appellant's title had stood already D
extinguished in view of the land having vested in State was referred u/s 30
of the Act to the decisions of the Court. The reference was numbered as L.A.
Misc. Case No. 42/86 before the Civil Court. By order dated 06.09.1986 the
Civil Court directed the reference to be rejected. During the course of its
order, the learned Special Subordinate Judge, Ranchi, which is the reference E
court, opined that Smt. Sharda Devi was an occupancy raiyat of the land in
question and, therefore, the award prepared in her name was just and legal.

By order dated 25.03.1987, the High Court allowed the Writ Petition
filed by the appellant (CWJC 1663 of 1981 (R)} laying challenge to the
proceedings initiated u/s 4(h) of the Bihar Land Reforms Act. The result of F
this decision of the High Court is that the effort of the State seeking annulment
of settlement and cancellation of the zamabandhi entries standing in the name
of the appellant failed. The appellant was held to have acquired the status of
raiyat in respect of the land in question.

Against the judgment dated 06.09.1986 passed by the learned Special G
Subordinate Judge, the State Government preferred an appeal to the High
Court. A learned Single Judge of the High Court, by his judgment dated
. 25.04.1988 affirmed the judgment of Special Subordinate Judge and directed
the appeal to be dismissed. The State filed a Letters Patent Appeal, which
came up for hearing before a Division Bench of the High Court. The Division H
,,.\_
I

78 SUPREME COURT REPORTS [2003] 1 S.C.R.

A Bench framed five questions of law and directed the matter to be placed
before the Chief Justice for constituting a Full Bench to answer the questions.
One of the questions framed by the Division Bench was : "Whether the
reference u/s 30 of the Land Acquisition Act, 1894 was maintainable at the
instance of the State of Bihar ?"

B The questions of law framed, including the question referred to herein
above, were answered against the appellant. As a consequence, the Letters
Patent Appeal filed by the State was allowed and the case was remanded to 't- ....-
the learned Single Judge for decision of the case in the light of the observations
made by the Full Bench. Feeling aggrieved by the order of remand, the
C appellant has preferred this appeal by special leave under Article 136 of the
Constitution of India.

The sole question which arises for decision in this appeal centers around
the question referred to herein above, i.e., whether in the facts and
circumstances of the case a reference u/s 30 of the Act was competent ? In
D other words, the core question is when the State proceeds to acquire land on
an assumption that it belongs to a particular person, can the award be called
into question by the State seeking a reference u/s 30 of the Act on the
premise that the land did not belong to the person from whom it was
purportedly acquired and was a land owned by the State having vested in it,
consequent upon abolition of proprietory rights, much before acquisition ?
E
In order to appreciate the controversy, we will briefly examine the
scheme of the Land Acquisition Act, 1894, also extracting and reproducing
some of the statutory provisions as may be required.

'Person interested' is defined by clause (b) of Sec. 3 as under :-
F I
"the expression 'person interested' includes all persons claiming an ~
interest in compensation to be made on account of the acquisition of
land under this Act; and a person shall be deemed to be interested in
land if he is interested in an easement affecting the land."

G Government is not a person interested within the meaning of the above
definition (See Collector of Bombay v. Nusurwanji Rattanji Mistri & Ors.,
AIR 1955 SC 298). In Dr. G.H. Grant v. State of Bihar, [1965) 3 SCR 576_· ..,,..•
this Court observed (vide page 584 G): " ...................... A dispute then arose -
between the State Government and Dr. Grant "as to the persons whom"
H compensation was payable. The State had no right to the compensation payable
SHARDA DEVI v. STATE OF BIHAR [RX. LAHOTJ, J.) 79

for the land under a title existing before the date of the award of the Collector, A
and no application for reference could be made by the State, as a person
interested within the meaning of Section 18( I)".

Whenever it appears to the appropriate Government that land in any
locality is needed or is likely to be needed for any public purpose etc. a
notification to that effect shall be published u/s 4 of the Act. Any person B
interested in any land which has been notified u/s 4(1) may prefer objections
u/s 5A. After the objections have been determined, a declaration u/s 6 shall
be made which shall be published in the Official Gazette and in such other
manner as prescribed by sub-section (2) of Section 6. The appropriate
Government shall thereafter direct the Collector to make order for the C
acquisition of the land. The land shall be demarcated. 'Persons interested'
shall be noticed u/s 9 of the Government's intention to take possession of the
land and inviting claims to compensation for all interests in such land. Enquiry
into the objections preferred by persons interested shall be made under Section
I I by the Collector followed by an award. The award is a determination by
Collector of disputes based on objections relating to:- D
(I) the true area of the land acquired,

(2) the compensation which, in his opinion, should be allowed for
the land by reference to the value of the land on the date of
publication of the notification u/s 4(1 ), and E
(3) the respective interests of the persons claiming the compensation
and directing the apportionment of the compensation among all
the persons known or believed to be interested in the land, of
whom, or of whose claims, he has information, whether or not
they have respectively appeared before him.
F
Section 12 attaches finality to the award making it a conclusive evidence
as between the Collector and the persons interested whether they have
respectively appeared before the Collector or not on three points: (i) the true
area of the land, (ii) the value of the land, and (iii) the apportionment of the
compensation amount among the persons interested.
G
The Collector may, after making the award u/s 11, take possession of
the land. On such taking possession, the acquired land shall vest absolutely
in the Government, free from all encumbrances.

Part III of the Act deals with reference to Court and procedure thereupon. H
I~

80 SUPREME COURT REPORTS [2003) l S.C.R.

A Disputes as to apportionment of compensation are dealt with in Part IV. Part
Ill consists of Sections 18 to 28. Section 18 provides as under :-

18. Reference to Court. (I) Any person interested who has not
accepted the award may, by written application to the Collector,
require that the matter be referred by the Collector for the
B determination of the Court, whether his objection be to the
measurement 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.

(2) The application shall state the grounds on which objection to the
c award is taken:

Provided that every such application shall be made
..l
(a) if the person making it was present or represented before the
Collector at the time when he made his award, within six weeks
D from the date of the Collector's award;

(b) in other cases, within six weeks of the receipt of the notice from
the Collector under Section 12, sub-section (2); or within six
months from the date of the Collector's award, whichever period
shall first expire.
E
Section 19 prescribes the contents of the statement to be made by the
Collector to the Court while making reference, which has to be in writing.
Under Section 20, the following persons shall be noticed by the Court :-

(a) the applicant;
F I
(b) all persons interested in the objection, except such (if any) of ~

them as have consented without protest to receive payment of
the compensation awarded; and

(c) if the objection is in regard to the area of the land or to the
G amount of compensation, the Collector.

The scheme of Section 20 also suggests that Collector (or State) does
not fall within the meaning of 'persons interested'; Collector becomes a
necessary party to reference and is required to be noticed by the Court when
the reference relates to objection in regard to area of land or to the quantum
H of compensation. ·
SHARDA DEVI v. STATE OF BIHAR [R.C. LAHOTI, J.) 81

Section 21 restricts the scope of the inquiry in proceedings initiated on A
reference by Collector to a consideration of the interests of the persons affected
by the objections. Section 26 prescribes the form of award to be made by the
Reference Court.

Under Part IV, Section 29 contemplates the compensation being
apportioned between several persons interested in accordance with the B
agreement arrived at between them. The particulars of apportionment as
specified in the award shall be conclusive as between the persons who have
expressed their agreement in the apportionment of the compensation. In case
of dispute, Section 30 provides as under :-

S.30 • When the amount of compensation has been settled under C
Section II, if any dispute arises as to the apportionment of the same
or any part thereof, or as to the persons to whom the same or any part
thereof, is payable, the Collector may refer such dispute to the decision
of the court.
D
Under Section 3 l, the Collector is obliged to tender payment of the
compensation to the persons interested in accordance with the award. The
Collector is obliged to withhold distribution of the awarded amount to the
awardee or amongst the awardees and deposit the amount of compensation
_..l in the reference court in three situations:-
E
(i) if awardees do not consent to receive the amount of compensation,

(ii) if there be no person competent to alienate the lands, or

(iii) if there be any dispute as to the title to receive the compensation
or as to the apportionment of it.
F
The two provisions contemplating power of the Collector to make
reference as contained in Section 18 and Section 30 of the Act need a
comparative study. Under Section 18 the subject-matter of reference can be
a dispute as to any one or more of the following: (i) as to the measurement
of the land, (ii) as to the amount or the quantum of the compensation, (iii) G
as to the persons to whom the compensation is payable, (iv) as to the
apportionment of the compensation among the persons interested. Under
Section 30 the subject matter of dispute can be: (i) the apportionment of the
amount of compensation or any part thereof, (ii) the persons to whom the
amount of compensation or any part thereof is payable. Though the expression
employed in Section 18 is 'the amount ofcompensation' while the expression H
82 SUPREME COURT REPORTS [2003) I S.C.R.

A employed in Section 30 is 'the amount of compensation or any part thereof,
this distinction in legislative drafting is immaterial and insignificant and a
dispute as to entitlement or apportionment of part of the compensation would
also be covered by Section 18 of the Act on the principle that the \V_hole
includes a part too. Thus, at the first blush, it seems that Section 30 overlaps
B Section 18 in part; but as will be seen shortly hereinafter, it is not so.

Dr. G.H. Grant v. State of Bihar (supra) is a three-Judge Bench decision
of this Court wherein the scheme of the Act by reference to the power vesting
in the Collector to make a reference came up for the consideration of the
Court. The three-Judge Bench by a majority of 2:1 laid down the following
C principles :

(i) There are two provisions in the Act under which the Collector can
make a reference to the Court, namely, Section 18 and Section 30. The
powers under the two sections are distinct and may be invoked in contingencies
which do not overlap. A person shown in that part of the award which relates
D to apportionment of compensation who is present either personally or through
a representative or on whom notice is issued under Section 12(2), must, if he
does not accept the award, apply to the Collector to refer the matter to the
Court under Section I 8 within the time prescribed thereunder. But a person
who has not appeared in the acquisition proceedings before the Collector
may, ifhe is not served with notice of filing, raise a dispute as to apportionment
E or as to the persons to whom it is payable and apply to the Court for a
reference under Section 30, for detennination of his right to compensation
which may have existed before the award, or which may have devolved upon
him since the award. For a reference under Section 30, no period of limitation
is prescribed.
F (ii) It is not predicated of the exercise of the power to make a reference
under Section 30 that the Collector has not apportioned the compensation
money by his award.

(iii) The award made by the Collector under Section I I is not the
G source of the right to compensation. An award is strictly speaking only an
offer made by the Government to the person interested in the land notified
for acquisition; the person interested is not bound to accept it and the
Government can also withdraw the acquisition u/s 48. It is only when
possession of the land has been taken by the Government u/s 16 that the right
of the owner of the land is extinguished. Therefore the appellant's contention
H that title to compensation·is derived solely from and on the date of the award
SHARDA DEVI v, STATE OF BIHAR [R.C. LAHOTI, J.) 83
could not be accepted. A
--l (iv) The liability of the Government u/s 31 to pay compensation to the
person entitled thereto under the award does not imply that only the persons
to whom compensation is directed to be paid under the award may raise a
dispute u/s 30. The scheme of apportionment by the Collector under Section
11 is conclusive only between the Collector and the persons interested and B
not among the persons interested. Payment of oompensation u/s 31 to the
~ ...,. persons declared in the award to be entitled thereto discharges the State of
its liability to pay compensation leaving it open to the claimant to compensation
to agitate his right in a reference u/s 30 or by a separate suit.

(v) Under the Bihar Land Reforms Act the title of the appellant to the
c
land noticed for acquisition became vested in the State and therefore the right
to compensation for the land acquired devolved upon the State. A dispute
then arose between the State Government and the appellant "as to the persons
to whom" compensation was payable. The State had no right to the
compensation payable for the land under a title existing before the date of the D
award of the Collector and no application could be made by it as a person
interested within the meaning of Section 18. But a dispute between the
appellant and the State as to their conflicting claims to the compensation
money was clearly a dispute which could be referred u/s 30 of the Act to the
Court. There is nothing in Section 30 which excludes a reference to the Court
-~ E
ofa dispute raised by a person on whom the title of the owner ofthe land has
since the award, devolved (emphasis supplied).

Keeping in view the principles laid down by this Court in Dr. G.H.
Grant's case (supra) and analyzing in-depth the provisions of the Act the
difference between reference under Section 18 and the one under Section 30 F
can be summarized and set out as under:-
_,\---
By reference to locus

Under Section 18(1) a reference can be made by Collector only upon
an application in writing having been made by (i) any person interested (ii) G
who has not accepted the award (iii) making application in writing, to the
Collector, requiring a reference by the Collector to the Court (iv) for
determination of any one of the four disputes (specified in the provision), and
'y
(v) stating the grounds on which objection to the award is taken. For reference
under Section 30 no application in writing is required. The prayer may be
made orally or in writing or the reference may be made suo motu by the
H
84 SUPREME COURT REPORTS {2003) l S.C.R.

A Collector without any one having invited the attention of the Collector for
making the reference.

By reference to the disputes referable

Under Section 18(1) there are four types of disputes which can be
B referred to Civil Court for determination. They are the disputes: (i) as to the
measurement of the land, (ii) as to the amount of the compensation, (iii) as
to the persons to whom the compensation is payable, or (d) as to the
apportionment of the compensation among the persons interested. Under
Section 30 the only disputes which are referable are : (i) any dispute as to
the apportionment of the amount of compensation or any part thereof, or (ii)
C a dispute as to the persons to whom the amount of compensation or any part
thereof is payable. A dispute as to the measurement of the land or as to the
·quantum of compensation or a dispute of a nature not falling within Section
30, can neither be referred by the Collector under Section 30 of the Act nor
would the Civil Court acquire jurisdiction to enter into and determine the
D same.

By reference to nature of power

Under Section 18 of the Act the Collector does not have power to
withhold the reference. Once a written application has been made satisfying
E the requirements of Section 18, the Collector shall make a reference. The
Collector has no discretion in the matter; whether the dispute has any merit
or not is to be left for the determination of the Court. Under Section 30 the
Collector may refer such dispute to the decision of the Court. The Collector
has discretion in the matter. Looking to the nature of the dispute raised, the
person who is raising the dispute, the delay in inviting the attention of the
F Court, and so on are such illustrative factors which may enter into the
consideration by the Collector while exercising the discretion. If the Collector
makes the reference it may be decided by the Court subject to its forming an
opinion that the dispute was capable of reference and determination under
Section 30 of the Act. In case the Collector refuses to make a reference under
G Section 30 of the Act, the person adversely affected by withholding of the
reference or refusal to make the reference shall be atJiberty to pursue such
other remedy as may be available to him under the law such as filing a writ
petition or a civil suit.

By reference to limitation
H Under Section 18 the written application requiring the matter to be
SHARDA DEVI v. STATE OF BIHAR [R.C. LAHOTI, J.] 85
referred by the Collector for the detennination of the Court shall be filed A
within six weeks from the date of the Collector's award if the person making
it was present or represented before the Collector at the time when he made
his award or within six weeks of the notice from the Collector under Section
12(2) or within six months from the date of the Collector's award, whichever
period shall first expire. There is no such limitation prescribed under Section B
30 of the Act. The Collector may at any time, not bound by the period of
limitation, exercise his power to make the reference. The expression 'the
person present or represented' before the Collector at the time when he made
his award would include within its meaning a person who shall be deemed
to be present or represented before the Collector at the time when the award
is made. No one can extend the period of limitation by taking advantage of C
his own wrong. Though no limitation is provided for making a reference
under Section 30 of the Act, needless to say, where no period of limitation
for exercise of any statutory power is prescribed the power can nevertheless
be exercised only within a reasonable period; what is a reasonable period in
a given case shall depend on the facts and circumstances of each case.
D
-·-- - .. The scheme of the Act reveals that the remedy of reference u/s 18 is
to
inte;;;J;,d ·be available only to a 'person interested'. A person present either
personally or through representative -or on whom a notice is served u/s 12(2}
is obliged, subject to his specifying the test as to locus, to apply to the
Collector within the time prescribed u/s 18(2) to make a reference to the E
Court. The basis of title on which the reference would be sought for u/s 18
would obviously be a pre-existing title by reference to the date of the award.
So is Section 29, which speaks of 'persons interested'. Finality to the award
spoken of by Section 12(1) of the Act is between the Collector on one hand
and the 'persons interested' on the other ·hand and attaches to the issues
relating to (i) the true area, i.e. measurement of the land, (ii} the value of the F
land, i.e. the quantum of compensation, and (iii) apportionment of the
compensation among the 'persons interested'. The 'persons interested' would
be bound by the award without regard to the fact whether they have
respectively appeared before the Collector or not. The finality to the award
spoken of by Section 29 is as between the 'persons interested' inter se and
is confined to the issue as to the correctness of the apportionment. Section G
30 is not confined in its operation only to 'persons interested'. It would,
therefore, be available for being invoked by the 'persons interested' if they
were neither present nor represented in proceedings before the Collector, nor
were served with notice u/s 12(2) of the Act or when they claim on the basis
of a title coming into existence post award. The definition of 'person interested' H
86 SUPREME COURT REPORTS (2003) 1 S.C.R.

A speaks of 'an interest in compensation to be made'. An interest coming into
existence post award gives rise to a claim in compensation which has already
been determined. Such a person can also have recourse .to Section 30. In any
case, the dispute for which Section 30 can be invoked shall remain confined
only (i) as to the apportionment of the amount of compensation or any part
B thereof, or (ii) as to the persons to whom the amount of compensation (already
determined) or any part thereof is payable. The State claiming on the basis
of a pre-existing right would not be a 'person interested', as already pointed
out hereinabove and on account of its right being pre-existing, the State, in
such a case, would not be entitled to invoke either Section 18 or Section 30
seeking determination of its alleged pre-existing right. A right accrued or
C devolved post award may be determined in a reference u/s 30 depending on
Collector's discretion to show indulgence, without any bar as to limitation.
Alternatively, such a right may be left open, by the Collector to be adjudicated
upon in any independent legal proceedings. This view is just; sound and
logical as a title post award could not have been canvassed upto the date of
the aware and should also not be left without remedy 'by denying access to
D Section 30. Viewed from this angle, Section 18 and 30' would not overlap and
would have fields to operate independent of each other.

We have entered into examining the scheme of the Act and exploring
the difference between reference under Section 18 and the one under Section
E 30 of the Act as it was necessary for finding out answer to the core question
starting before us. The power to acquire by State the land owned by its
subjects hails from the right of eminent domain vesting in the State which is
essentially an attribute of sovereign power of the State. So long as the public
purpose subsists the exercise of the power by the State to acquire the land of
its subjects without regard to the wishes or willingness of the owner or
F person interested in the land cannot be questioned. (See Scindia Employees'
Union v. State of Maharashtra and Ors., (1996) 10 SCC 150, para 4 and
State of Maharashtra v. Sant Joginder Singh Kishan Singh and Ors., (1995)
Supp. 2 SCC 475, para 7). The State does not acquire its own land for it is
futile to exercise the power of eminent domain for acquiring rights in the
G land, which already vests in the State. It would be absurdity to comprehend
the provisions of Land Acquisition Act being applicable to such land wherein
the ownership or the entirety of rights already vests in the State. In other
words, the land owned by the State on which there are no private rights or
encumbrances is beyond the purview of the provisions of the Land Acquisition
Act. The position of law is so clear as does not stand in need of any authority
H to support. Still a few decided cases in point may be referred since available.
SHARDA DEVI v. STATE OF BIHAR [R.C. LAHOTI. J.] 87
In Collector of Bombay v. Nusurwanji Rattanji Mistri & Ors., (supra) A
this Court held that when the Government acquires lands under the provisions
of the Land Acquisition Act, it must be for a public purpose, and with a view
to put them to that purpose, the Government acquires the sum total of all
private interests subsisting in them. If the Government has itself an interest
in the land, it has only to acquire the other interests outstanding thereof so B
that it might be in a position to pass it on absolutely for public user. An
interesting argument was advanced before the Supreme Court. It was submitted
that the right of the Government to levy assessment on the lands is an
'encumbrance' and that encumbrance is capable of acquisition. The Court
held that the word 'encumbrance' as occurring in Section 16 can only mean
interests in respect of which a compensation was made under Section 11 or C
could have been claimed. It cannot include the right of the Government to
levy assessment on the lands. The Act does not contemplate the interest of
the Government in any land being valued or compensation being awarded
therefor.

In Secretary of State v. Sri Narain Khanna, AIR 1942 PC 35 it was D
held that where the Government acquires any property consisting of land and
buildings and where the land was subject-matter of the Government grant,
subject to the power ofresumption by Government at any time on giving one
month's notice, then the compensation was payable only in respect of such
buildings as may have been authorized to be erected and not in respect of the E
land.

In 'In the matter of the land Acquisition Act : Govt. of Bombay v.
Esufa/i Salebhai' 34 Bom 618 (at page 636), Batchelor, J held that the
Government are not debarred from acquiring and paying for the only
outstanding interests merely be.:ause the Act, which primarily contemplates F
all interests as held outside Government, directs that the entire compensation
based upon the market value of the whole land must be distributed among the
claimants. The Government was held liable to acquire and pay only for the
super-structure as it was already the owner of the land.

Jn 'Deputy Collector, Calicut Division v. Aiyavu Pi/lay, 9 Ind Cas 341 G
(Mad}, Wallis, J. observed that the Act does not contemplate or provide for
the acquisition of any interest which already belongs to Government in land
which is being acquired under the Act but only for the acquisition of such
interests in the land as do not already belong to the Government.

In Collector of Bombay v. Nusurwanji Rattanji Mistri & Ors., (supra), H
88 SUPREME COURT REPORTS [2003] I S.C.R.

A the decision in Esufali Salebhai's case and Aiyavu Pillay's case were cited
with approval. Expressing its entire agreement with the said views the Court
held that when Government possesses an interest in land which is the subject
of acquisition under the Act, that interest is itself outside such acquisition
because there can be no question of Government acquiring what is its own.
B An investigation into the nature and value of that interest is necessary for
determining the compensation payable for the interest outstanding in the
claimants but that would not make it the subject of acquisition. In land
acquisition proceedings there is no value of the right of the Government to
levy assessment on the lands and there is no award of compensation therefor.
It was, therefore, held by a Division Bench of Judicial Commissioners in
C Mohammad Wajeeh Mirza v. Secretary of State for India in Council, AIR
l 92 l Oudh 31 that the question of title arising between the Government and
another claimant cannot be settled by the judge in a reference under Section
· 18 of' the Act. When the Government itself claims to be owner of the land
there can be no question of its acquisition and the provisions of the Land
Acquisition Act cannot be applicable. In our opinion the statement of law so
D made by the learned judicial commissioners is correct.
The Collector acts as a representative of the State whilst holding
proceedings under the Land Acquisition Act. In fact, he conducts the
proceedings on behalf of the State. The award of the Collector is not the
E source of the right to compensation; it is the pre-existing right which is
recognized by the Collector and guided by the findings arrived at in
determining the objections, if any, the Collector quantifies the amount of
compensation to be placed as an offer of the appropriate Government to the
owner recognized by the State. The offeree may accept or decline the offer.
If he accepts the offer and the Government takes possession over the land,
F the title of the offeree is extinguished and vests absolutely in the Government
free from all encumbrances. The power to make an award under Section 11
and to make a reference under Sections 18 or 30 of the Act is a statutory
power. The sweep of jurisdiction of Court to determine the di~putes is also
statutory and is contr(,)lled by the bounds created by Section 17 or 30
whereunder the reference has been made to the Court. The power has to be
G exercised to the· extent to which it has been conferred by the Statute and on
availability of pre-existing conditions on the availability of which and which
alone the power can be exercised.

Award made by the Collector is final and conclusive as between the
H Collector and the 'persons interested', whether they have appeared before the
SHARDA DEVI v. STATE OF BIHAR [R.C. LAHOTI, J.] 89
Collector or not, on two issues : (i) as to true area, i.e. measurement of land A
acquired, (ii) as to value of the land, i.e. the amount. of compensation, and
-+
(iii) as to the apportionment of the compensation among the 'persons interested'
again, between the Collector and the 'persons interested' and not as amongst
the 'persons interested' inter se. In the event of a reference having been
sought for u/s 18, the Collector's award on these issues; if varied by Civil
Court, shall stand superseded to that extent. The scheme of the Act does not
B
attach a similar finality to the award of the Collector on the issue as to the
. .,. ,
person to whom compensation is payable; in spite of the award by Collector
and even on failure to seek reference, such issue has been left available to
be adjudicated upon by any competent forum.

In Nusserwanjee Pestonjee v. Meer Mynoodeen Khan Wullud Meer
c
Sudroodeen Khan Bahadoor, 6 Moo Ind App J34 their Lordships of the Privy
Council have held that wherever jurisdiction is given by a Statute and such
-~
jurisdiction is only given upon certain specified terms contained therein it is
a universal principle that those terms should be complied with, in order to
create and raise the jurisdiction, and if they are not complied with the D
jurisdiction does not arise. The Privy Council decision above-said was followed
and the statement of law made therein approved by this Court in Kothamasu
Kanakarathamma and Ors. v. State ofAndhra Pradesh and Ors., AIR (1965)
SC 304. This Court held that under the Land Acquisition Act the matter goes
to the Court only upon a reference made by the Collector and there is no E
doubt that the jurisdiction of the Court arises solely on the basis of a reference
made to it. The Court can adjudicate upon the matter referred to it but the
Court is certainly not invested with the jurisdiction to consider a matter not
directly connected with it and this is not a matter of mere technicality. A case
of lack of inherent jurisdiction will not be cured by mere failure to object to
the proceedings before the Court on the ground of an absence of reference F
on matters not referred. There can be no waiver or acquiescence. Indeed,
-~
when there is an absence of inherent jurisdiction, the defect cannot be waived
nor can be cured by acquiescence,

To sum up the State is not a 'person interested' as defined in Section G
3(b) of the Act. It is not a party to the proceedings before the Collector in
the sense, which the expression 'parties to the litigation' carries. The Collector
holds the proceedings and makes an award as a representative of the State
'<·
Government. Land or an interest in land pre-owned by State cannot be subject
matter of acquisition by State the question of deciding the ownership of State
or holding of any interest by the State Government in proceedings before the H
90 SUPREME COURT REPORTS (2003] 1 S.C.R.

A Collector cannot arise in proceedings before the Collector (as defined in
Section 3(c) of the Act). If it was a government land there was no question
of initiating the proceedings for acquisition at all. The Government would
not acquire the land, which already vests in it. A dispute as to pre-existing
right or interest of the State Government in the property sought to be acquired
B is not a dispute capable of being adjudicated upon or referred to the Civil
Court for determination either under Section 18 or Section 30 of the Act. The
reference made by the Collector to the Court was wholly without jurisdiction
and the Civil Court ought to have refused to entertain the reference and ought
to have rejected the same. All the proceedings under Section 30 of the Act
beginning from the reference and adjudication thereon by the Civil Court
C suffer from lack of inherent jurisdiction and are therefore a nullity liable to
be declared so.

However, we would like to clarify our decision by sounding two notes
of caution. Firstly, the quashing of the proceedings under Section 30 of the
Land Acquisition Act would not debar the State from pursuing such other
D legal remedy before such other forum as may be available to the State
Government and on the merits and the maintainability thereof we express no
opinion herein. Secondly, the situation in law would have been entirely
different if the title of the appellant would have come to an end by any event
happening or change taking place after the making of the award by the
E Collector as was the case in Dr. G.H. Grant v. State of Bihar, (1965] .3 SCR
576. The title of Dr. Ghosh had come to an end by change of law referable
to a date subsequent to the making of the award. In this context it was held
"there is no reason why the right to claim a reference of a dispute about the
person entitled to compensation may not be exercised by the person on whom
the title has devolved since the date of the award" and "there is nothing in
F Section 30 which excludes a reference to the Court of a dispute raised by a
person on whom the title of the owner of land has, since the award, devolved".

For the foregoing reasons, the appeal is allowed, the judgment of the
Division Bench is set aside and that of the learned Single Judge restored with
costs throughout.
G
N.J. Appeal allowed.