STATE OF GUJARAT ETC. ETC.versusDAYA SHAMJI BHAI ETC. ETC.

A                      STATE OF GUJARAT ETC. ETC.
                                   v.
                       DAYA SHAMJI BHAI ETC. ETC.

                                AUGUST 25, 1995

B               [K. RAMASWAM:V AND B.L. HANSARIA, JJ.]

          Land Acquisition Ac~ 1894: Sections 11, 12, 18 and 31(1).

          Reference Cowt-Power to enhance compensation-Agreement-Land-
    owner's agreeing to receive compensation in tenns of agreement and forego
c   the right of reference-Payment of compensation accordingly-Held land-
    owne1:s have no 1ight to seek reference-Civil Court has not jurisdiction to go
    into adequacy of the compensation--Agreement entered under Section 11(2)
    needs no regi.stratio1~.

D         Indian Registration Act, 1908 :

          Agreement under section 11 (2) of Land Acquisition Act, 1894-Regist-
    ration of-Held not required.

          THe respondents-land owners, whose lands were acquired, entered
E into agreements under section 11(2) of the Land Acquisition Act, 1894
    whereunder they consented to accept the compensation determined by the
    Land Acquisition Officer and 25% more thereof and agreed to forego their
    right to seek reference under Section 18. However, after accepting compen-
    sation in terms of the agreements, they sought reference under section 18
    of the Act. The reference Court enhanced the compensation and rejected
F   the State's reliance on the agreement on the ground that they were not
    registered under the Registration Act. On appeals preferred by State the
    High Court confirmed the judgment of the reference Court. Against the
    decision of the High Court State preferred appeals before this Court.

G         Allowing the appeals, this Court

          HELD : 1. The contract between the owners and the Collector regard-
    ing the terms to be included in the award of the Collector is conclusive and
    binds the parties. The award made under Section 11(2) of the Land Acquisi-
    tion Act in terms of the agreement between the parties is an award with
H   consent obviating the necessity of reference under Section 18. [92-D; A]
                                          88
                        STATE v. DAYASHAMJIBHAI                            89

          2. The entitlement to make reference to civil court under Section     A
    18(1) and within the period prescribed under sub-section (2) is condi-
    tioned upon non-acceptance of the award. Under the second proviso to
    sub-section (2) of Section 31 "no person who has received the amount
    otherwise than under protest shall be entitled to make any application
    under Section 18". Once an agreement was entered by the parties, the
    question of objection to receive Compensation under protest does not
                                                                                B
    arise. So, the respondents have no right to seek a reference to the civil
    court under Section 18 of the Act. [91-F-H; 92-A]

           3. Only a valid reference under Section 18 confers jurisdiction on the
    civil court to consider whether the compensation awarded by the Collector C
    is just and fair. Thereafter, when it finds that the Collector ought to have
    awarded higher compensation, the civil court gets jurisdiction to award
    statutory benefits on higher compensation from the date of taking posses-
    sion only. In view of the specific contract made by the respondents in terms
    of Section 11(2), they are not entitled to seek a reference. Consequently,
    the civil Court is devoid of jurisdiction to go into the adequacy of compen- D
    sation awarded by the Collector or prevailing market value as on the date
    of notification under Section 4(1) to determine the compensation under
    section 23(1) and to grant statutory benefits. (92-G-H; 93-A]

         4. By operation of Section 11(4), the need for registration of the     E
    agreement is obviated. (93-B]

         CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8117 of
    1995 Etc. Etc.

         From the Judgment and Order dated 3.7.92 of the Gujarat High           F
    Court in F.A. No. 17743 of 1991.

          D. Dave, N. Mukherjee and Ms. Hemantika Wahi for the Appellants.

          The following Order of the Court was delivered :
                                                                                G
          Cday condoned. Leave granted.

          Though notice has been served on all the respondents, none appears
    either in person or through counsel in all the appeals.

          Notification under Section 4(1) of the Land Acquisition Act, 1894     H


•
    90                   SUPREME COURT REPORTS (1995] SUPP. 3 S.C.R.

A   (for short, 'the Act') was published on December 18, 1980 acquiring large
    extent of lands for the purpose of irrigation dam No. 2 Project. The land
    owners had given their consent in writing on March 11, 1983 agreeing to
    accept the compensation determined by the land Acquisition Officer and
    25 per cent more thereof and also agreed not to seek any reference under
    Section 18. The market value was determined by the Collector on March
B
    25, 1983, and 25 per cent in addition thereto wa_s awarded. Respondents
    were paid in terms of the consent agreements signed by the respondents
    and sanctioned by the Superintending Engineer, Rajkot. Subsequent there-
    to, the respondent sought for reference under Section 18 on April 26, 1986.
    The Assistant Judge, Morbi in Rajkot by his award and decree dated June·
c   29, 1991 enhanced compensation to the rate Rs. 200 per acre for the
    Bagayat land and Rs. 140 per acre for Jirayat land. Feeling aggrieved, when
    the appellants filed appeals, the Gujarat High Court confirmed the same
    by the impugned judgment and decree dated July 3, 1992. Thus these
    appeals by special leave.
D         The only question is whether the claimants of the land are entitled
    to seek reference under section 18 and the civil court can determine higher
    compensation. Section 11(2) of the Act empowers the parties to enter into
    an agreement and an award in terms thereof is permissible. In the agree-
    ment they had specifically accepted that owners would receive compensa-
E   tion and 25 per cent of the compensation in addition and had agreed to
    forego their right to seek reference under Section 18 of the Act. The
    owners and the Special Land Acquisition Officer had agreed under Sec-
    tionll(2) of the Act that the Land Acquisition Officer would make the
    award ·in terms of the contract. Clause 14 of the agreement reads thus :

F           "The land owners will not go to any Court under Section 18 of the
            Act."

          In the award, it is seen that the Land Acquisition Officer while
    awarding the compensation, had also worked out the addition of 25% and
G   awarded total compensation to the Land owners. It is not in dispute that
    they had been paid accordingly. In the award, the Land Acquisition Officer
    has specifically stated that :

            "As discussed in para 9-A and as mentioned in para 9-B, I fix the
            value of the lands, under acquisition in this case, for Bagayat Lands
H           at Rs. 110 per acre, for Jirayat Lands at Rs. 80 and for waste lands


                                                                                    •
                    STATE v. DAYASHAMJIBHAI                           91

        at Rs. 10 per acre and further order to pay as such. Moreover, in   A
        this case, the persons interested has demanded for 25% consent
        more. The consent rate is sanctioned by the Superintending En-
        gineer, Rajkot Irrigation Circle, Rajkot vide his letter No.
        PB/4/General/LA0/1519, dated 25.3.1983 and accordingly I also
        order to pay the amount of 25% consequent rate.
                                                                            B
       ''In view of the above agreement and in view of the discussion made
by the Land Acquisition Officer in the award and working details given in
the annexures made therein, it is clear that the parties having contracted
to receive compensation the question emerges whether they are entitled to
seek a reference. On making an award under Section 11 and issuance of       c
the notice under Section 12 of the Act, the Collector is enjoined under
Section 31(1) to tender payment of the compensation awarded by him to
the interested persons entitled thereto to receive the compensation accord-
ing to the terms of the award. Under the section proviso to sub-section (2)
of Section 31 "no person who has received the amount otherwise than D
under protest shall be entitled to make any application under Section 18 11 •
The entitlement to make reference to civil court under Section 18(1) and
within the period prescribed under sub-section (2) is conditioned upon
non-acceptance of the award. Sub-section (1) of Section 18 makes the
matter clear thus : "Any person interested who has not accepted the award
may, by written application to the Collector, require that the matter be E
referred by the Collector for the determination of the Court regarding his
objection, be it to the measurement of the land, the amount of the com-
pensation, the persons to whom it is payable, or the apportionment of the
compensation among the persons interested." The right and entitlement to
seek reference would, therefore, arise when the amount of compensation F
was received under protest in writing which would manifest the intention
of the owner of non-acceptance of the award. Section 11 (2) opens with an
non-obstante clause "notwithstanding anything contained in sub-section
(1)" and provides that "if at any stage of the proceedings, the Collector is
saLisficd that all the persons interested in the land who appeared before G
him have agreed in writing on the matters to be included in the award of
the Collector in the form prescribed by rules made by the appropriate
Government, he may, without making further enquiry, make an award
according to the terms of such agreement. By virtue of sub-section (4),
"notwithstanding anything contained in the Registration Act, 1908, no
agreement made under sub-section (2) shall be liable to registration under H
    92                    SUPREME COURT REPORTS (1995) SUPP. 3 S.C.R.

A that Act". The award made under Section 11 (2) in terms of the agreement
    is, therefore, an award with consent obviating the necessity of reference
    under Section 18.

          The Reference Court negatived the contention of the State and its
    reliance on agreement of the parties on the ground that since the said
B   agreements were not registered utjtder Registration Act, they cannot con-
    tract out from statute. Therefore the Reference Court has the power to
    award higher compensation. It is seen that in the contract had agreed to
    receive compensation and 25 per cent more in addition thereto. They had
    also agreed not to seek any reference under Section 18. In the light of the
c   above, no option is left to the parties under Section 18 to seek reference.
    Sub- section (2) of Section 11 gives right to the parties to enter into an
    agreement to receive award compensation awarded under Section 11 in
    terms of the contract. In fact, it would be more expeditious to have the
    dispute sorted out so as to avoid delay in determination of proper com-
D   pensation. The contract between the owners and the Collector in writing
    of the terms to be included in the award of the Collector is conclusive and
    binds the parties. They would not be entitled to seek any reference for
    enhancement of the compensation required to be adjudicated under Sec-
    tion 23(1) of the Act. It would be seen that when compensation was
    received under protest, Section 18 gets attracted.
E
           The question of awarding interest and statutory benefits arises when
    the civil court finds that the amount of compensation awarded to the land
    owners by the Collector is not adequate and the prevailing market value is
    higher than the market value determine<! by the Land Acquisition Officer
F   under Section 23(1). For entitlement to solatium under Section 23(2). "in
    addition to" market value the court shall award solatium; Under Section
    28, if the court gets power to award interest, when court opines that the
    Collector "ought to have awarded compensation in excess of the sum which
    the collector did award the compensation". In other words, valid reference
    under Section 18 confers jurisdiction on the civil court to consider whether
G   the compensation awarded by the Collector is just and fair. Thereafter,
    when it finds that the Collector ought to have awarded higher compensa-
    tion, the civil court gets jurisdiction to award statutory benefits on higher
    compensation from the date of taking possession only. In view of the
    specific contract made by the respondents in terms of Section 11(2), they
H   are not entitled to seek a reference. Consequently, the civil court is devoid
                      STATE v. DAYASHAMJIBHAI                            93

of jurisdiction to go into the adequacy of compensation awarded by the         A
Collector or prevailing market value as on the date of notification under
Section 4(1) to determine the compensation under Section 23(1) and to
grant statutory benefits.

       By operation of Sectionll(4), the need for registration of the agree-
ment is obviated. As seen in the contract, the respondents have foregone       B
their right of seeking reference in lieu of 25% more than the compensation
determined by the Collector under Section 11(2) of.the Act. In fact, 25 per
cent in addition to the market value determined by the Collector in his
award under section 11 (1) had been paid as the consideration to forego
reference. Even otherwise, once an agreement was entered by the parties,       C
the question of objection to receive compensation under protest does not
arise. So, they have no right to seek a reference to the civil court under
Section 18 of the Act.

      The appeals are accordingly allowed. The orders of the reference
court as confirmed by the High Court are set aside but, in the circumstan- D
ces, without costs.

      SLP (C) No. 20637 of 1995 (CC 3519/95)

      Issue notice.

T.N.A.                                                    Appeals allowed.