Writ Petition No.3955 of 2006

7th February, 2014.

Petitioner Counsel: Shri A.V. CHATUPHALE
Respondent Counsel: Shri V.S. GOKHALE

Cases Cited:
Babua Ram & Ors. Vs. State of U.P & Anr., (1995) 2 SCC 689 [Para 5,9,10,11,12,14]
Union of India & Anr. Vs. Pradeep Kumari & Ors., (1995) 2 SCC 736 [Para 6,11]
Kendriya Karamchari Sehkari Grah Nirman Samiti Limited, Noida, Vs. State of Uttar Pradesh & Anr., 2009 ALL SCR 674=(2009)1 SCC 754 [Para 12]

JUDGMENT

A. S. OKA, J. :- Heard learned counsel appearing for the Petitioners and the learned AGP for the Respondents.

2. The Petitioners were the owners of certain lands which were acquired under the Land Acquisition Act, 1894 (for short "the said Act"). In the year 1988, an award was made under Section 11 of the said Act in relation to the lands of the petitioners.

3. In the year 1999, the present Petitioners filed an Application under Sub-section (1) of Section 28A of the said Act praying for redetermination of compensation on the basis of a common Judgment and Award made by the District Court on 31st December 1998 in Land Acquisition Reference No.282 of 1991 and other connected Land Acquisition References. It appears that the State Government challenged the said common Judgment and Award by preferring First Appeals in this Court and the First Appeals are pending.

4. The grievance made in the Petition is that only on the ground of pendency of the Appeals in this Court, the Applications made by the Petitioners under Sub-section (1) of Section 28A of the said Act have been kept pending. It is pointed out that in case of some other Claimants, relying upon the Circular issued by the State Government on 25th March 1998, the Applications under Sub-section (1) of Section 28A of the said Act have been decided and the compensation has been paid. The substantive relief claimed in this Petition is for a direction to the Respondents to pay compensation as per the award of the Reference Court in Land Acquisition Reference No.282 of 1991. In the alternative, a prayer is made for issue of a writ of mandamus directing the Special Land Acquisition Officer to dispose of the Applications under Sub-section (1) of Section 28A of the said Act in accordance with law.

5. There is a reply filed by Shri Vijaykumar Nimbaji Ahire, the Special Land Acquisition Officer, Nashik. Reliance is placed in the reply to the Circular dated 21st August 1999 issued by the Secretary for the Revenue and Forest Department of the State Government addressed to the Divisional Commissioner, Konkan Division, Navi Mumbai. In the said Circular, a reference is made to the decision of the Apex Court in the case of Babua Ram & Others. v. State of U.P & Another, (1995)2 SCC 689. It is pointed out that though the earlier Circulars dated 20th October 1998 and 25th March 1998 provide that even if the Appeals against the awards under Section 18 of the said Act are pending, the Applications under Sub-section (1) of Section 28A of the said Act should be decided subject to Claimants furnishing a bank guarantee for amount of compensation. The Circular records that the Apex Court has directed that the Applications under Sub-section (1) of Section 28A of the said Act should be kept pending till the disposal of the Appeal against the award in a Reference under Section 18 of the said Act when the Application under Sub-section (2) of Section 28A is based on the Award in the Reference under Section 18 which is the subject matter of pending Appeal. The Circular provides that the decision of the Apex Court should be brought to the notice of the concerned officers. We must note here that in the present case, it is not even in dispute that, as of today, the Appeals against the Awards under Section 18 of the said Act are pending in this Court.

6. The submission of the learned counsel appearing for the Petitioners is that apart from the Circulars dated 20th October 1998 and 25th March 1998, a consistent view of this Court is that notwithstanding pendency of the Appeals against the awards made in the References under Section 18 of the said Act, the Applications under Sub-section (1) of Section 28A of the said Act can be decided with a rider that the Claimants should be put to a condition of furnishing a bank guarantee for the enhanced compensation amount. The decision of the Apex Court in the case of Babua Ram & Others appears to have been overruled by a larger Bench of the Apex Court in the case of Union of India & Another v. Pradeep Kumari & Others, (1995)2 SCC 736. He urged that what is annexed to the reply is a letter addressed by the State Government to the Revenue Commissioners and even from the said letter, it appears that the Circulars dated 20th October 1998 and 25th March 1998 have not been modified or set aside. He therefore, submitted that there is no impediment in the way of disposing of the pending Applications under Sub-section (1) of Section 28A of the said Act. He stated that the Petitioners are willing to furnish a bank guarantee.

7. The learned AGP submitted that the decision of the Apex Court in the case of Babua Ram & Others clearly directs that when the Appeals are pending against the Awards made under Section 18 of the said Act on the basis of which the Applications under Sub-section (1) of Section 28A of the said Act have been filed, the Land Acquisition Officer or the Collector should stay their hands and that the Applications should be disposed of only after the disposal of the Appeals. He urged that this law laid down by the Apex Court in Babua Ram's case stands and therefore, a writ as prayed for cannot be issued. He submitted that by the communication dated 21st August 1999, the State Government has invited the attention of the Revenue Commissioners to the aforesaid decision of the Apex Court. He urged that notwithstanding the circulars, what will prevail is the decision of the Apex Court as the law laid down by the Apex Court binds everyone.

8. We have given careful consideration to the submissions. Section 28A of the said Act reads thus:

"28A. Re-determination of the amount of compensation on the basis of the award of the Court. - (1) where in an award under this part, the court allows to the applicant any amount of compensation in excess of the amount awarded by the collector under section 11, the persons interested in all the other land covered by the same notification under section 4, sub-section (1) and who are also aggrieved by the award of the Collector may, notwithstanding that they had not made an application to the Collector under section 18, by written application to the Collector within three months from the date of the award of the Court require that the amount of compensation payable to them may be re-determined on the basis of the amount of compensation awarded by the court:

Provided that in computing the period of three months within which an application to the Collector shall be made under this sub-section, the day on which the award was pronounced and the time requisite for obtaining a copy of the award shall be excluded.

(2) The Collector shall, on receipt of an application under sub-section (1), conduct an inquiry after giving notice to all the persons interested and giving them a reasonable opportunity of being heard, and make an award determining the amount of compensation payable to the applicants.

(3) Any person who has not accepted the award under sub-section (2) may, by written application to the Collector, required that the matter be referred by the Collector for the determination of the Court and the provisions of sections 18 to 28 shall, so far as may be, apply to such reference as they apply to a reference under section 18."

9. It will be necessary to make a reference to the decision of the Apex Court in the case of Babua Ram & Others (supra). The Apex Court considered various issues in relation to Section 28A of the said Act. The first issue considered by the Apex Court was as regards the prospective operation of the provisions of Section 28A which was brought on the Statute Book by Amendment Act No.64 of 1984. The second issue decided by the Apex Court was as regards the meaning of the words "person aggrieved" under Sub-section (1) of Section 28A of the said Act. The third issue was regarding the limitation of three months' period prescribed for making an Application for redetermination of compensation under Sub-section (1) of Section 28A of the said Act. While dealing with this issue, the Apex Court held that the period of three months must be computed from the date of the Award of the Reference Court made under Section 26 on a Reference under Section 18 of the said Act and not from the date of the Judgment and order of the Court of Appeal. The Apex Court held that the successive Awards made by the Reference Court at a different times, in respect of the lands covered by the same notification do not furnish a fresh cause of action. In short, the Apex Court held that only the Award under Section 18 which is made first in point of time in relation to another land in the notification under which the land is acquired will give a right to apply under Sub-section (1) of Section 28A of the said Act.

10. Another issue which was decided by the Apex Court was whether the pendency of the Appeal in a higher Court against the Award on a reference under Section 18 of the said Act on the basis of which an Application under Sub-section (1) of Section 28A has been made affects the power of the Land Acquisition Officer or the Collector to decide the Application. The said question is answered in Paragraph 39 of the decision of the Apex Court in the case of Babua Ram & Others (supra). The said question framed by the Apex Court reads thus:-

"39. .....It is settled law that the decree of the trial Court gets merged in the decree of the appellate Court which alone is executable. The finality of the determination of the compensation is attained with the decree of the appellate forum, be it the High Court or this Court. Take for instance that 'A', 'B' and 'C are interested persons in the land notified under Section 4(1) and the compensation determined in the award under s. 11. 'A' received the compensation without protest. 'B' and 'C received the compensation from the Collector's award of Rs. 10,000/- to Rs. 20,000/-. 'B' did not file appeal under Section 54 while 'C filed the appeal. The High Court, suppose, further enhances the compensation to Rs. 25,000/- or reduces the compensation to Rs. 15,000/- per acre. "A' is a person aggrieved only to the extent of the excess amount awarded either by the award and decree of the court under Section 26 but he will not get the enhancement of further sum of Rs. 5,000/- granted by the High Court in favour of 'C' The decree of the High Court is the executable decree made in favour of 'C' Unless redetermination is kept back till the appeal by the High Court is disposed of incongruity would emerge. Suppose the State filed appeal in this Court under Article 136 against the High Court decree and this Court confirms the award of the Collector and sets aside the decree of civil court under Section 26 and of the High Court under Section 54. There is nothing left for redetermination. With a view to save 'A', or 'B' or the State from the consequences of such incongruous situations the Collector/L.A.O. should stay his hands in the matter of redetermination of compensation till the appeal is finally disposed of and he should redetermine the compensation only on the basis of the final judgment and decree of the appellate forum. Adoption of such course, would not merely avoid the chance element in the claimants getting the amounts of redetermined compensation but also avoids needless burden on public exchequer. As soon as the award of the civil Court is carried in appeal, it becomes obligatory for the Collector to keep the application/applications for redetermination of compensation filed within limitation pending, awaiting decision by the appellate forum and to redetermine the compensation on the basis of the final judgment and decree. Normally the LAO would file the appeal against the enhanced compensation in a decree of either the civil Court or the High Court and will know their pendency. In the case of appeal filed by the interested persons, the latter should inform the Collector/ LAO of the pendency of appeal or otherwise comes to know of it should keep the applications for redetermination, received under sub-section (1) of Section 28-A within limitation pending, awaiting the decision by the appellate Court. Before proceeding with the determination, he should obtain an affidavit from the party making the application under Section 28-A that no appeal against the award made under Section 26 relied upon by him was filed or if had been filed was disposed of by the appellate Court and to produce the certified copy of decree and judgment, if already disposed of." (Underline added)

11. We have perused the decision of the Larger Bench of the Apex Court in the case of Union of India and Another v. Pradeep Kumari and Others. The issue with which we are concerned, which was dealt with in Paragraph 39 by the Apex Court in its decision in the case of Babua Ram, did not arise in the said subsequent case of Pradeep Kumari. The decision in the case of Union of India v. Pradeep Kumari is on the short point regarding the limitation for filing an Application under Sub-section (1) of Section 28A of the said Act. The decision in the case of Babua Ram (supra) on the said question was held as not correct by the Larger Bench of the Apex Court in the case of Pradeep Kumari and to that extent, the decision in the case of Babua Ram (supra) was overruled. The Apex Court held that the benefit of redetermination can be availed of on the basis of any successive awards made by the Court after coming into operation of Section 28A of the said Act. However, the law laid down by the decision in the case of Babua Ram in Paragraph 39 was not disturbed by the Larger Bench.

12. At this stage, we must make a useful reference to the subsequent decision of the Apex Court in the case of Kendriya Karamchari Sehkari Grah Nirman Samiti Limited, Noida, v. State of Uttar Pradesh and Another, [(2009)1 SCC 754] : [2009 ALL SCR 674] a/w other connected matters. The issue of legality and validity of the orders issued by the Government of Uttar Pradesh on 14th January 1994 and 13th June 2001 arose before the Apex Court. The Government Orders were to the effect that the Collectors shall keep the Applications under Sub-section (1) of Section 28A pending when the decision rendered by the Reference Court is under challenge before the superior Courts. In Paragraphs 40 to 45, the Apex Court reiterated the law laid down in Paragraph 39 of the decision in the case of Babua Ram (supra). The Paragraphs 40 to 45 read thus:

"40. It is true that once Reference Court decides the matter and enhances the compensation, a person who is otherwise eligible to similar relief and who has not sought Reference, may apply under Section 28A of the Act. If the conditions for application of the said provision have been complied with, such person would be entitled to the same relief which has been granted to other persons seeking Reference and getting enhanced compensation. But, it is equally true that if Reference Court decides the matter and the State or acquiring body challenges such enhanced amount of compensation and the matter is pending either before the High Court or before this Court (Supreme Court), the Collector would be within his power or authority to keep the application under Section 28A of the Act pending till the matter is finally decided by the High Court or the Supreme Court as the case may be. The reason being that the decision rendered by the Reference Court enhancing compensation has not attained 'finality' and is sub judice before a superior Court. It is, in the light of the said circumstance that the State of U.P. issued two Government orders on January 14, 1994 and June 13, 2001.

41. We see no illegality in keeping the applications under Section 28A of the Act pending till the issue is finally settled by the Court and a decision has been arrived at.

42. The point is no longer res integra. In Babua Ram, a similar contention was raised before this Court. It was submitted on behalf of the claimant invoking Section 28A of the Act that once a Reference Court enhances the compensation and a person similarly situated makes an application under Section 28A of the Act, the Collector is bound to decide the application and grant enhanced compensation. It was, therefore, submitted that the Collector/ Land Acquisition Officer was under obligation to re-determine compensation by granting benefit of the order of the Reference Court. Negativing the contention, this Court observed; (Babua Ram Case, SCC pp. 721-22, para 38)

38. However, with a view to avoiding uncertainty and fluctuation, it would be appropriate that, the Collector, while paying compensation under Section 31, should explain in vernacular language of the claimant informing all persons interested in the compensation that they have a right to protest the compensation determined under s. 11 before receiving the same; has right to seek reference in writing under Section 18 to the civil court and that the application should be made expressing the specific objections in writing within the limitation prescribed under Section 18. In case of his failure to avail of the same, he would not be entitled to further right and remedy to seek higher compensation. In case the claimant to be illiterate, it should be properly explained to him in his mother tongue. The statement made in this behalf by the Collector should be in the mother tongue of the claimant. The Collector should append a certificate that it was truly, correctly and properly explained and obtain the signature or thumb impression in token thereof and this should be kept as part of the record of the award proceedings. He should also maintain a regular register in his office in the serietum duly signed by him and sealed and be kept in the personal custody of the Collector. This would not only obviate the hardship to the interested persons but also prevent corrupt practices in fabricating the applications for reference after the bar of limitation. In this behalf, it is also necessary that the Collector/L.A.O. should also maintain another register for receipt of the applications under Section 28A indicating the date of its receipt, seal of the office and personal signature of the Collector/L.A.O. concerned and the receipt thereof duly communicated to the government or the authorised officer in proviso to Section 11 of the Act.

43. The view in Babua Ram was reiterated in U.P. State Industrial Development Corporation Ltd. v. MANU/SC/0639/1995: State of U.P. and Ors. (1995)2 SCC 766. There, the Court stated;

"3. The entire controversy has been considered by this Court in Babua Ram and Ors. v. State of U.P. dated 4.10.1994 rendered in C.A. Nos. 563/94 & batch and held that since an appeal has been preferred by the State against the award of the Dist. Judge made under Section 26 of the Act, the proper course open to the L.A.O., on an application made under Section 28A(1) of the Act, would be to keep the applications under Section 28A(1) pending till the appeal filed against the award of the Dist. Judge is disposed of by the High Court and then to take action as per Section 28A(2) of the Act. Following the law laid down therein and subject to directions contained therein, we hold that the High Court was not right in dismissing the writ petitions. Therefore, the order of the High Court is set aside. The award of the Collector made under Section 28A(2) is quashed. The Collector/L.A.O. is directed to keep the application filed under Section 28A(1) of the Act pending till the disposal of the appeal. On receipt of the judgment from the High Court or in an appeal by this Court the L.A.O. is directed to determine the compensation based on the final judgment according to law."

44. In our opinion, therefore, the Collector was right in not deciding the application in view of the fact that the order passed by the Reference Court was challenged by the New Okhla Industrial Development Authority (NOIDA) by filing first appeals before the High Court. The High Court had entertained the appeals and also passed interim order.

45. The contention of the appellants before the High Court that Government Orders dated January 14, 1994 and June 13, 2001 were illegal, arbitrary and ultra vires has no force. In fact, those Government Orders are in consonance with law laid down by this Court in Babua Ram and other cases. We, therefore, see no infirmity in the action of the Collector in not deciding the applications." (Underlines added)

Thus, the Apex Court proceeded to uphold the validity of the Government Circulars. The Apex Court specifically observed that there is no illegality in keeping the Applications under Sub-section (1) of Section 28A of the said Act pending till the issue is finally settled by the Court.

13. Thus, what is held by the Apex Court in the aforesaid two decisions is that if an Appeal against the Award on a reference under Section 18 of the said Act on the basis of which an Application under Sub-section (1) of Section 28A of the said Act is made is pending, there is every justification for the Land Acquisition Officer or the Collector not to proceed with the hearing of the Application under Sub-section (1) of Section 28A of the said Act and normally, the Collector or the Land Acquisition Officer should stay the proceedings pending the Appeal.

14. At this stage, we must make a reference to the Government Circular dated 20th October 1995. The said Circular records that if the award under Section 18 of the said Act has been stayed by the Appellate Court, an Award on Application under Sub-section (1) of Section 28A of the said Act should not be made. If an Appeal is merely pending, even if the Application under Sub-section (1) of Section 28A of the said Act is decided, the compensation should be disbursed subject to the Claimants furnishing a bank guarantee for the amount awarded. The said Circular was amended by a further Circular dated 25th March 1998 by providing that a bank guarantee must be of a nationalised bank and the bank guarantee shall be kept valid till the decision of the Appellate Court in the Appeal. The letter dated 21st August 1999 addressed by the State Government to the Divisional Commissioner takes a note of the fact that the said Government Circulars may be contrary to the decision in the case of Babua Ram (supra).

15. In view of the law laid down by the Apex Court, in the facts of this case, we are of the view that the stand taken by the Land Acquisition Officer cannot be said to be erroneous. If an Appeal against the award in a Reference under Section 18 is pending in the higher Court and if the Appellate Court has stayed the execution and operation of the award, the Land Acquisition Officer or the Collector cannot proceed with the hearing of the Application under Sub-section (1) of Section 28A of the said Act which is filed on the basis of the said award.

16. However, there is another aspect which warrants consideration. In all the States and in particular the State of Maharashtra, a judicial notice can be taken of the fact that there are large number of development projects for which the vast lands have been acquired under the said Act. Therefore, there is a large pendency of the Land Acquisition References under Section 18 of the said Act in the Civil Courts and consequently, a large number of pendency of the First Appeals in High Courts. In the case of Pradeep Kumari, the Apex Court held that the award under Sub-section (2) of Section 28A of the said Act is on par with an Award under Section 11 of the said Act and, therefore, the interest as provided under Section 34 of the said Act can be granted while making an award under Sub-section (2) of Section 28A of the said Act. The interest under Section 34 of the said Act is payable at the rate of 9% per annum on the excess amount of compensation, if not paid to the Claimants on the date of dispossession. The interest at the rate of 9% per annum is payable for one year from the date of dispossession and for the subsequent period, the interest is payable at the rate of 15% per annum. If the Applications under Sub-section (1) of Section 28A of the said Act are kept pending till the final disposal of the pending Appeals, in the event of dismissal of the Appeals, the Acquiring Body or the State Government, as the case may be, will end up in paying a huge amount by way of interest payable under Section 34 of the said Act at the rate of 15% per annum on the entire compensation amount consisting of components of market value, solatium and interest under Sub-section (1) of Section 23 of the said Act.

17. The law laid down by the Apex Court binds the Collectors or the Land Acquisition Officers. There will be a justification for the Land Acquisition Officers or the Collectors staying their hands when the Appeals are pending against the Awards made on References under Section 18 of the said Act.

18. However, in those limited cases where the Appeals are pending, but the Appellate Court has not stayed the operation and execution of the award made in a Reference under Section 18 of the said Act, the Collector or the Land Acquisition Officer can consider of proceedings with inquiry in accordance with Sub-section (2) of Section 28A provided the Claimant gives an undertaking not to claim amount payable under Sub-section (2) of Section 28A of the said Act unless he furnishes a bank guarantee of any nationalized bank for the entire amount payable under the award under Sub-section (2) of Section 28A of the said Act. In such a case, the Claimant will have to furnish a bank guarantee of any nationalized Bank which shall be valid till the disposal of the Appeal as a condition precedent for withdrawal of compensation amount payable as per an Award under Sub-section (2) of Section 28A of the said Act.

19. The Government Circulars dated 20th October 1995 and 25th March 1998 are contrary to the law laid down by the Apex Court. In the fact of this case, the Appeals against the Awards on Reference under Section 18 of the said Act which are relied upon by the Petitioners in Applications under Sub-section (2) of Section 28A of the said Act are pending. In view of the law laid down by the Apex Court, we are unable to issue a writ as prayed for.

20. Subject to what is observed above, the Petition is rejected. The Rule is discharged with no orders as to costs.

Petitions dismissed.