Delhi High Court
Gyan Prakash (Now Deceased) Thr Lrs vs Union Of India on 1 October, 2018
Equivalent citations: AIRONLINE 2018 DEL 2586
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 1st October, 2018
+ LA.APP. 344/2017
GYAN PRAKASH (NOW DECEASED) THR LRS..... Appellant
Through: Mr. Dhruv Madan, Adv.
Versus
UNION OF INDIA ..... Respondent
Through: Mr. Yeeshu Jain & Ms. Jyoti Tyagi,
Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. This appeal under Section 54 of the Land Acquisition Act, 1894
impugns the order [dated 16th August, 2016 in LAC No.37/12 (81/16) of the
Court of Additional District Judge (ADJ)-02 (South)] on a Reference under
Section 30-31 of the Act as well as the order [dated 5 th September, 2017 in
LAC No.8946/2016 also of the Court of ADJ-02 (South)] of dismissal of an
application filed by the appellant for review of the order dated 16th August,
2016.
2. This appeal came up first before this Court on 13 th November, 2017
when record of the Reference Court was ordered to be requisitioned. Upon
the record being received, vide order dated 5th April, 2018, notice of the
appeal was issued to the sole respondent Union of India (UOI). The counsel
for the appellant and the counsel for the respondent UOI have been heard.
3. The subject land, being Khasra No.227 (7-18) and 67(1-4) of village
Saidulajab, was acquired and an Award No.13/87-88 dated 20th May, 1987
made with respect thereto. The Land Acquisition Collector (LAC) (South),
LA.APP. 344/2017 Page 1 of 23
on 7th August, 2012, made a Reference, under Section 30-31 of the Act,
reasoning that "the interested persons have not approached for
compensation despite passing of more than 24 years of Award and notices
sent to them for receiving of compensation" and naming (i) Gyan Prakash,
son of Sh. Chuttan, (ii) Shiv Narayan, son of Sh. Gareeb, (iii) Prem Raj, son
of Sh. Jeeta, (iv) Saroop Singh, son of Sh. Gareeb, and, (iv) Shri Ram, son
of Sh. Govind as the interested persons.
4. The requisitioned record received in this Court is only of the
application for review which was dismissed vide order dated 5 th September,
2017 and the record of the original Reference has not been received. The
counsel for the appellant has however handed over in the Court a certified
copy of the order sheets of the Reference Court and which are taken on
record.
5. A perusal of the said order sheets of Reference Court shows, (i) that
the Reference was taken up by the ADJ to whom it was assigned, on 14 th
August, 2012; (ii) on 9th October, 2012, the Reference Court ordered the
cheque for Rs.3,21,087.90 paise on record to be encashed and money
thereunder to be kept in interest bearing deposit and notice to be issued to
'interested persons'; (iii) on 19th November, 2013, the appellant appeared
before the Reference Court; (iv) though the interested persons shown in the
Reference were five as aforesaid, but only the appellant and Saroop Singh
appeared and none appeared for the remaining interested persons viz. Shiv
Narayan, Prem Raj and Shri Ram, who were proceeded against ex parte; (v)
the appellant died during the pendency of the Reference and was substituted
by his heirs who have filed the present appeal.
LA.APP. 344/2017 Page 2 of 23
6. The appellant, in the present appeal has not impleaded any of the
other interested persons, not even Saroop Singh who was appearing before
the Reference Court.
7. The appellant filed objections dated 21st April, 2015 to the Reference
inter alia pleading, that (i) upon coming into force of Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act, 2013 (Right to Fair Compensation Act), a fresh cause of
action had accrued to the appellant; (ii) the Notification dated 5th
November, 1980 under Section 4 and the subsequent Notification under
Section 6 of the Land Acquisition Act and in respect of which Award
No.13/87-88 was passed, had lapsed by operation and effect of Section 24
of the Right to Fair Compensation Act; (iii) the physical possession of the
land had not been taken and continued to be with the appellant; (iv) the
compensation assessed vide the Award aforesaid was never tendered or
paid to the appellant or the other owners of the land as per the requirement
of Section 31 of the Land Acquisition Act; (v) the appellant had learnt from
information sought under the Right to Information Act, 2005, that till 6th
January, 2014, no notice had been issued to the land owners to receive
compensation; (vi) that though compensation has been deposited in the
Reference Court but such deposit would not meet the requirement of law as
compensation can only be deposited in a Reference, under Section 31(2) of
the Land Acquisition Act, when the owner refuses to accept compensation
or there is no person competent to alienate the land or when there is a
dispute as to the title to receive compensation or as to apportionment
thereof and which was not the case; and, (vii) even if the compensation has
LA.APP. 344/2017 Page 3 of 23
been deposited in the Court, the same would be of no avail to the
respondent UOI since the amount was never tendered. Reliance was placed
on Pune Municipal Corporation Vs. Harakchand Misirimal Solanki
(2014) 3 SCC 183.
8. The respondent UOI filed a reply to the aforesaid objections,
pleading (a) that the Reference Court has limited jurisdiction and there is no
provision in law for filing any objection in the Reference Court to the
making of the Reference and the only remedy against the Reference was to
prefer a writ petition and which had not been done; (b) under Section 63 of
the Right to Fair Compensation Act, the jurisdiction of the Civil Court, as
the Reference Court was / is, to decide the subject objection was/is barred;
(c) the possession of the land had already been taken and handed over to the
Delhi Development Authority (DDA) for public purpose development, as
far back as on 17th April, 1997 (the counsel for the respondent UOI states
that the correct date is 17th July, 1987); and, (d) the compensation had
already been deposited in the Reference Court on 19th August, 2012 and the
appellant was not entitled to take the shelter of Section 24(1) of the Right to
Fair Compensation Act.
9. The Reference Court, in the impugned order dated 16th August, 2016,
has found/observed/reasoned, that (a) reference was made to the Court,
since the interested persons were not coming forward to collect the
compensation; (b) reference for the said reason is permitted under Section
31(2) of the Land Acquisition Act; (c) copies of notices / reminders on
record corroborate the plea in the Reference that "the interested persons
have not applied for compensation despite passing of more than 24 years of
LA.APP. 344/2017 Page 4 of 23
Award and notices sent to them for receiving compensation"; (d) the
deposit made by the Collector in the Reference Court was/is covered by
Section 31 of the Land Acquisition Act and the deposit had been validly
made; (e) the object of such deposit, when there is refusal to accept or
receive or consent to receive compensation, is to prevent unnecessary
prolongation of the proceedings and accumulation of Collector's liability
for interest; and, (f) the deposit by the Collector in the present case was thus
deposit within Section 31(2) of the Act. Accordingly, the objections were
disposed of and the payment tendered treated under Section 31 and the
Reference disposed of.
10. The appellant sought review of the order dated 16 th August, 2016
aforesaid, pleading that (i) the notices which had been relied upon and
which formed the basis of the order are forged, fabricated and manipulated
and could not have been issued at the relevant time; (ii) even if it were to be
believed that the said notices were issued, even then, as per the LAC also
the said notices were never served upon the appellant and thus the question
of the appellant coming forward to take the compensation never arises; (iii)
Supreme Court in Pune Municipal Corporation Vs. Harakchand Misrimal
Solanki AIR 2014 SC 982 has held that the Land Acquisition Act being an
expropriatory legislation, has to be strictly followed; thus deposit under
Section 31(2) of the Land Acquisition Act could have been made only after
tender of compensation as provided in Section 31(1) of the Act; (iv)
Supreme Court in Ivo Agnelo Santimano Fernandes Vs. State of Goa
(2011) 11 SCC 506 has held that deposit of amount of compensation in the
State's revenue account is of no avail and the liability of LAC to pay
LA.APP. 344/2017 Page 5 of 23
interest subsists till the amount has not been deposited in the Court; and, (v)
the compensation deposited in the Reference Court would be of no avail to
the appellant since was previously never tendered to the appellant.
11. The Review Petition was dismissed vide order dated 5th September,
2017, reasoning that (a) the appellant was building up a case for seeking
setting aside of the acquisition proceedings; (b) the Reference Court has a
limited mandate; (c) while Section 30 of the Land Acquisition Act falls in
Part-IV thereof, Section 31 thereof falls in Part-V thereof; Section 31 is not
controlled by Section 30; while under Section 30, the compensation
awarded is deposited / forwarded to the Court to be apportioned amongst
true claimants, under Section 31 the compensation amount is forwarded in
situations where the compensation amount cannot be handed over to the
claimants; (d) if the appellant was aggrieved by the action of the LAC of
forwarding the Reference, the proper forum to challenge the improper
exercise of power by LAC was the Writ Court; and, (e) no ground for
review was made out and it was beyond the jurisdiction of the Reference
Court to touch upon Section 24(2) of the Right to Fair Compensation Act.
12. The counsel for the appellant has argued, (i) that the precursor to a
deposit under Section 31(2) of the Land Acquisition Act is 'tender' of
compensation under Section 31(1) of the Act; (ii) the Reference Court in
this regard has relied on notice produced by the respondent and copy of
which is at page 89 of the paper book; (iii) the said notice does not bear any
acknowledgment in receipt / delivery thereof by / on the appellant and only
contains a report of the official of the LAC, of not finding the appellant at
the address given and the whereabouts of the appellant having been not
LA.APP. 344/2017 Page 6 of 23
learnt and the appellant being reported to be out of Delhi; (iv) the same
does not amount to tender within the meaning of Section 31(1) of the Land
Acquisition Act; and, (v) if there was no tender, there could be no deposit
under Section 31(2) and the Reference Court ought to have returned the
Reference reasoning so and erred in disposing of the Reference as has been
done; the Reference ought to have been returned.
13. The counsel for the respondent UOI has argued that, (i) if the
appellant was not refusing the compensation, the appellant should have,
when first appeared in the Reference, received the compensation which was
also a form of tender and having not done so, cannot urge that there was no
proper Reference; (ii) the Reference Court was not entitled to decide the
question, whether the acquisition had lapsed under the Right to Fair
Compensation Act; (iii) in any case, since the compensation had been
deposited in the Reference Court prior to the coming into force on 1 st
January, 2014 of the Right to Fair Compensation Act, the question of
applicability of Section 24(2) thereof did not arise; (iv) when the appellant
appeared first in the Reference, the Right to Fair Compensation Act was
nowhere in picture; and, (v) the appellant, in the review application
admitted that the appellant was aware of the making of the award; it was the
duty of the appellant to collect the compensation.
14. The counsel for the appellant in rejoinder arguments confirms that
the appellant, throughout was aware of the making of the award and rather
states that it was pleaded by the appellant in the objections also that the
appellant was aware of the making of the award. It is however the
contention of the counsel for the appellant that it is the duty of the Collector
LA.APP. 344/2017 Page 7 of 23
to tender the compensation to the appellant and the Collector having not
done that, rights under the Right to Fair Compensation Act have accrued to
the appellant.
15. The counsel for the respondent UOI emphasises that once the
appellant admits being aware of the making of the award, there was no
obligation on the LAC to issue separate notice intimating passing of the
award.
16. I have considered the rival contentions. The questions which arise
for consideration are (i) whether the Collector, under Section 31(1) of the
Land Acquisition Act, is required to tender compensation to the persons
interested therein or entitled thereto in any particular mode; (ii) If the
persons interested in and entitled to compensation have participated in
determination of compensation by the Collector resulting in the making of
the award and are aware of making of the Award, whether the Collector is
still required to tender compensation to them also in any particular mode or
on their failure to collect compensation, the Collector is entitled to deposit
the same in Court, under Section 31 of the Act; (iii) whether the Court, to
which Reference under Section 31 of the Land Acquisition Act is made, is
entitled to return the Reference or to adjudicate the validity of the
Reference; (iv) whether an order disposing of a Reference under Section 31
of the Act, holding that the LAC was prevented by some one or any of the
contingencies mentioned in Section 31(2) from paying the compensation, is
appealable under Section 54 of the Land Acquisition Act; and, (v) whether
the High Court, in exercise of powers under Section 54, can hold the
Reference under Section 31 to be invalid.
LA.APP. 344/2017 Page 8 of 23
17. I will first take up the answer to questions (iii), (iv) and (v) above
which are found to be not res integra. A Division Bench of the High Court
of Jammu & Kashmir, as far back as in Swami Sukhanand Vs. Samaj
Sudhar Samiti AIR 1962 J&K 59, after noticing a plethora of earlier
judgments held that there was an abundance of authority for holding that a
land acquisition court is entitled to go behind a reference made to it by a
Collector, to determine whether the reference fell within the scope and
ambit of the jurisdiction conferred upon him by the statutory provision
under which the reference was purported to be made and that if the Court
comes to the conclusion that the reference was ultra vires, the Court will
have no jurisdiction to proceed further with the reference and is bound to
reject it in limine. Supreme Court also in Mohammed Hasnuddin Vs. State
of Maharashtra (1979) 2 SCC 572, though in the context of reference
under Section 18 of the Land Acquisition Act, held that (i) while the
Collector in making an Award under Section 11 acts as an agent of the
Government, in making a reference to the Court under Section 18(1), acts
as a statutory authority exercising his own powers under Section; (ii) the
Collector has to act subject to the conditions prescribed in Section 18; (iii)
accordingly, the making of an application for reference within the time
prescribed by proviso to Section 18 (2) is sine qua non for the making of a
valid reference by him; (iv) the Court, being a Tribunal of special
jurisdiction, has the duty and power to see that the reference made to it by
the Collector under Section 18 complies with the conditions laid down
therein so as to give the court jurisdiction to hear the reference; (v) in doing
so, the Court is certainly not acting as a court of appeal; it is only
LA.APP. 344/2017 Page 9 of 23
confirming if a valid and proper reference has been made. Again, in P.K.
Sreekantan Vs. P. Sreekumaran Nair (2006) 13 SCC 574 it was held in
the context of reference under Section 30 of the Land Acquisition Act, that
(i) every tribunal of limited jurisdiction is not only entitled but bound to
determine whether the matter in which it is asked to exercise its jurisdiction
comes within the limits of its special jurisdiction and whether the
jurisdiction of such tribunal is dependent on the existence of certain facts or
circumstances; (ii) it's obvious duty is to see that these facts and
circumstances exist, to invest it with jurisdiction, and where a tribunal
derives its jurisdiction from the statute that creates it and that statute also
defines the conditions under which the tribunal can function, before that
tribunal assumes jurisdiction in a matter, it must be satisfied that the
conditions requisite for its acquiring seisin of that matter have in fact arisen;
(iii) there is no time limit for seeking reference under Section 30 of the Act,
though it should always be done within a reasonable time; the
reasonableness of time flows from the need for a finality to judicial
proceedings; (iv) the Reference Court derives its jurisdiction from the
reference made; references under Section 18 and Section 30 are
conceptually different from each other; the jurisdiction of the court under
the Land Acquisition Act is a special one and strictly limited to the terms
of Sections 18, 20 and 21; it only arises when a specific objection has been
taken to the Collector's Award and it is confined to a consideration of that
objection; (v) therefore, it is certain that when the only objection taken is to
the amount of compensation, that alone is the matter referred and the Court
has no jurisdiction to determine or consider anything beyond it; and, (v)
LA.APP. 344/2017 Page 10 of 23
Reference Court has no power to convert the reference under Section
30 into one in Section 18 of the Act at the instance of those who did not
apply for reference earlier.
18. There is no reason to not apply what has been held qua reference
under Section 18 and 30, to a reference under Section 31 of the Act. Thus
there can be no iota of doubt that the Court, to which reference under
Section 31 of the Land Acquisition Act is made, is entitled to return/reject
the reference and to adjudicate the validity of the reference. Once that is so,
Section 54 of the Land Acquisition Act, whereunder this Court has been
approached, permits appeals to this Court from an Award. An order on
reference under Section 31 of the Act on the ground of the persons
interested or entitled to, not consenting to receive the compensation,
constitutes an Award. The Full Bench of this Court in Daryodh Singh Vs.
Union of India 1965 SCC OnLine P&H 89, in the context of court fees,
held that an appeal under Section 54 of the Act lies against an order on a
Reference under Sections 30-31 of the Act. I have followed the said dicta
recently in Sarkar Daulat Madar Makbuja Vs. Union of India 2018 SCC
OnLine Del 11540. Thus an appeal under Section 54 of the Land
Acquisition Act lies against the order disposing of the reference under
Section 31 on such grounds and this Court, in exercise of its powers under
Section 54, can re-consider the decision of the Reference Court of
entertaining and allowing the reference.
19. To find answers to the questions (i) & (ii) framed in para 16 above, it
is necessary to understand the Scheme of the Land Acquisition Act in the
context of the present controversy. The same is as under:
LA.APP. 344/2017 Page 11 of 23
(a) The Act, as per its Preamble, was enacted to amend the law for
acquisition of land needed for public purpose and for
determining the amount of compensation to be made on
account of such acquisition. The word used is "made" and "not
paid".
(b) Section 3(b) defines "person interested" as including all
persons claiming an interest in compensation 'to be made' on
account of acquisition of the land and further provides that a
person shall be deemed to be interested in land if he is
interested in an easement affecting the land.
(c) The process of acquisition begins with the publication in the
Official Gazette and two daily newspapers circulating in the
locality and by affixation at convenient places in the locality,
of a public notice under Section 4 of the Act, of the land in
such locality being likely to be needed for any public purposes.
After such public notice, the officers of the appropriate
government are entitled to enter upon and survey the land and
carry out other works thereon for determining the need of the
land for public purpose.
(d) Section 5A of the Act permits the persons interested in the
land qua which public notice aforesaid has been issued, to
object to the acquisition of the land and requires the Collector
to give such objectors an opportunity of being heard and to
make a report to the appropriate government containing his
recommendations on the said objections.
LA.APP. 344/2017 Page 12 of 23
(e) If the appropriate government, after considering the reports
submitted under Section 5A is satisfied that the land is needed
for public purpose, a declaration under Section 6 is required to
be made to the said effect, by publication in Official Gazette
and in two daily newspapers circulating in the locality and
affixation at convenient places in the locality.
(f) Thereafter the appropriate Government, under Section 7 is
required to direct the Collector to take order for acquisition of
the land and Section 8 requires the Collector to cause the land
to be measured and demarcated.
(g) Section 9 requires the Collector to cause public notice to be
given at convenient places on or near the land, stating that the
Government intends to take possession of the land and that
claims for compensation for all interest in such land may be
made to him; only if the person interested resides elsewhere,
does Section 9(4) require notice to be sent to him by post at the
last known place of residence.
(h) Section 11 requires the Collector to thereafter enquire into
objections if any which the person interested has made
pursuant to notice under Section 9, and to make an Award of
compensation determined with respect to the said land.
(i) Section 12(2) requires the Collector to give notice of the
making of the Award only to such of the persons interested as
are not present personally or by their representatives when the
Award is made.
LA.APP. 344/2017 Page 13 of 23
(j) Section 31 is as under:-
"31. Payment of compensation or deposit of
same in Court. - (I) On making an award under,
Section 11, the Collector shall tender payment of the
compensation awarded by him to the persons
interested entitled thereto according to the award, and
shall pay it to them unless prevented by some one or
more of the contingencies mentioned in the next sub-
Section.
(2) If they shall not consent to receive it, or if
there be no person competent to alienate the land, or if
there be any dispute as to the title to receive the
compensation or as to the apportionment of it, the
Collector shall deposit the amount of the compensation
in the Court to which a reference under Section 18
would be submitted:
Provided that any person admitted to be
interested may receive such payment under protest as
to the sufficiency of the amount:
Provided also that no person who has received
the amount otherwise than under protest shall be
entitled to make any application under Section 18:
Provided also that nothing therein contained
shall affect the liability of any person, who may receive
the whole or any part of any compensation awarded
under this Act, to pay the same to the person lawfully
entitled thereto.
(3) Notwithstanding anything in this Section,
the Collector may with the sanction of the appropriate
Government, instead of awarding a money
compensation in respect of any land, make any
arrangement with a person having a limited interest in
such land, either by the grant of other lands in
exchange, the remission of land-revenue on other lands
held under the same title, or in such other way as may
LA.APP. 344/2017 Page 14 of 23
be equitable having regard to the interest of the parties
concerned.
(4) Nothing in the last foregoing sub-Section
shall be construed to interfere with or limit the power
of the Collector to enter into any arrangement with any
person interested in the land and competent to contract
in respect thereof."
20. As would immediately become evident from the aforesaid scheme of
the Act, it is not as if the proceedings for acquisition of land and
determination of compensation with respect thereto is behind the back and
without the involvement of the interested persons. They, from stage one till
the last stage, are involved in the process and have several opportunities to
object, to the acquisition, to the measurements, and to determination of
compensation by the Collector before making of the Award as well as after
the making of the Award. It is in this light that, in my opinion, we have to
adjudicate the question, whether in the present case the Collector, within
the meaning of Section 31(1) supra tendered payment of compensation
awarded by him to the appellant and whether the appellant did not consent
to receive it, all within the meaning of Section 31 supra.
21. Another factor which has to be kept in mind in deciding the aforesaid
question is, that acquisition for public purpose, generally is of large tracts of
land in which large number of persons have interest; such persons, being
tillers of the land, are generally present at the land and not only from the
initial notification under Section 4, subsequent notification under Section 6
and publication of the Award, but also from the activities carried on with
respect to the land viz. of measurements, survey etc. under Section 4,
demarcation after notification under Section 6 and by word of mouth as
LA.APP. 344/2017 Page 15 of 23
well, are aware of the acquisition proceedings. Notification/s for acquisition
of land is a sensational event in the life of tillers of the land and there is
much public debate about the same; considering the large number of
persons involved and difficulties in knowing their addresses, inasmuch as
the Revenue Records maintained with respect to the land are generally not
found to contain the addresses and also there is no system prevalent, as in
urban areas, of colonization and numbering of houses, service of individual
notices on each of the said large number of persons is not practical and is a
challenge.
22. In the present case, the appellant as well as heirs no. 1,2,3&5 of the
appellant, even in the memorandum of this appeal, have given their address
as that of village Saidulajab, agricultural land whereof was acquired vide
the subject notification. Only the address of heir no.4, who is a married
daughter of the appellant, is of the colony of Janak Puri, New Delhi. The
appellant and his heirs were thus very much resident of the village, land
whereof was acquired. As aforesaid, the deceased appellant was only one of
the interested persons named in the reference. Though initially, besides the
appellant another one of them appeared in the reference, but it is only the
appellant/his heirs who are pursuing the same. The other interested persons
did not come forward to the Court and state that they were not tendered the
compensation.
23. The appellant also admits being aware of the making of the Award.
The appellant has not pleaded that he was not aware of the notification
under Section 4 or of the notification under Section 6. It is not the case of
the appellant that though he desired to challenge the acquisition but was
LA.APP. 344/2017 Page 16 of 23
prevented from doing so owing to lack of knowledge. The appellant thus
acquiesced in acquisition of the land and determination of compensation
with respect thereto and did not challenge the same.
24. The question which arises is, whether in these circumstances it can
be said that the appellant was not tendered compensation of his share.
25. In my opinion, the appellant was tendered compensation within the
meaning of Section 31(1).
26. Once the appellant admits knowledge of the making of the Award,
compensation is deemed to have been tendered to him.
27. In Raja Harish Chandra Raj Singh Vs. Deputy Land Acquisition
Officer 1961 SC 1500, Supreme Court though concerned with the question
of limitation for seeking reference under Section 18 of the Act, held (i) that
in dealing with this question it is relevant to bear in mind the legal character
of the award made by the Collector under Section 12; (ii) in a sense it is a
decision of the Collector reached by him after holding an enquiry as
prescribed by the Act; (iii) it is a decision, inter alia, in respect of the
amount of compensation which should be paid to the person interested in
the property acquired; (iv) but legally the award cannot be treated as a
decision; it is in law an offer or tender of the compensation determined by
the Collector to the owner of the property under acquisition; (v) if the
owner accepts the offer, no further proceeding is required to be taken; the
amount is paid and compensation proceedings are concluded; (vi) it is
however essential that the said decision should be communicated to the
persons interested in the land; (vii) knowledge of the party affected by such
a decision, either actual or constructive, is a essential element which must
LA.APP. 344/2017 Page 17 of 23
be satisfied before the decision can be brought into force; (viii) thus
considered, the making of the Award is complete only when it is
communicated to the person interested in the land, either actually or
constructively; (ix) if the Award is pronounced in the presence of the party
whose rights are affected by it, it can be said that it has been made when
pronounced; and, (x) knowledge of the party affected by the Award, either
actual or constructive being essential, the date of Award means the date
when the Award is communicated.
28. In Bhagwan Das Vs. State of Uttar Pradesh (2010) 3 SCC 545 it
was reiterated that the Award of the Collector is an offer/tender and that if
the Award is made in the presence of the person interested, he has to make
the applications seeking reference from the date of making of the Award
and only if the person interested, is not present at the time of making of the
Award, is a notice under Section 12(2) of the Land Acquisition Act
required.
29. In Rajasthan Housing Board Vs. New Pink City Nirman Sahkari
Samiti Limited (2015) 7 SCC 601 it was held that if the persons interested
in the land were aware of land acquisition process and determination of
compensation, constructive knowledge of making of the Award is
attributable to them.
30. As far back as in M/s. Vishnu Agencies (Pvt.) Ltd. Vs. Commercial
Tax Officer (1978) 1 SCC 520, though not in the context of Land
Acquisition Act but as a principle of Contract Law (and which would apply
once the Award is an offer) also, it was held that offer and acceptance
need not be always in an elementary form, nor indeed does the law of
LA.APP. 344/2017 Page 18 of 23
contract or of sale of goods require that consent to a contract must express.
It was further held that offer and acceptance can be spelt out from the
conduct of the parties which covers not only their acts but omissions as
well.
31. If the Award of the Collector is tender, then once the appellant
admitted knowledge of Award it has but to be held that compensation was
tendered to the appellant and the appellant refused to accept the same and
therefore Section 31(2) became applicable. In this context it may also be
stated that Section 31(1) does not provide any mode of tender of
compensation.
32. The refusal of the appellant to receive the compensation is also
evident from the appellant, inspite of reference having been made on 7 th
August, 2012 i.e. well before coming into force on 1 st January, 2014 of the
Right to Fair Compensation Act, having not collected the compensation
from the Reference Court either.
33. In Pune Municipal Corporation supra relied on by the counsel for
the appellant, the Pune Municipal Corporation had approached the Supreme
Court in the year 2008 against the judgment of the High Court quashing the
acquisition proceedings in writ petitions filed by the land owners; however
by the time the matter was heard in the Supreme Court, the Right to Fair
Compensation Act had come into force. It was thus the contention of the
respondents land owners that the acquisition proceedings had lapsed. It was
in the said context that Section 24(2) of the Right to Fair Compensation Act
was for interpretation therein and while interpreting the same, the question
arose, whether compensation had been tendered under Section 31(i) of the
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Land Acquisition Act and it was held; (i) simply put, Section 31 makes the
provision for payment of compensation or for deposit of the same in the
Court;(ii) this provision requires the Collector to tender payment of
compensation; (iii) if due to happening of any contingency as contemplated
in Section 31(2), the compensation has not been paid, the Collector should
deposit the amount of compensation in Court; (iv) the mandatory nature of
the provision in Section 31(2) with regard to deposit of compensation in the
Court is further fortified by the provisions contained in Sections 32, 33 &
34; Section 33 gives power to the Court, on an application by the person
interested or claiming a interest in such money, to pass an order to invest
the amount so deposited in an interest bearing security so that the parties
interested may have the benefit thereof; (iv) for the purposes of Section
24(2) of the Right to Fair Compensation Act, compensation shall be
recorded as paid if the compensation has been offered to the persons
interested and such compensation has been deposited in the Court; in other
words, the compensation may be said to have been paid within the meaning
of Section 24(2) of the Right to Fair Compensation Act when the Collector
has discharged his obligation and deposited the amount of compensation in
the Court and made that amount available to the interested person to be
dealt with as provided in Sections 32 and 33; (v) the Land Acquisition Act
being an expropriatory legislation has to be strictly followed; (vi) the
Collector, with regard to payment of compensation, can only act in the
manner so provided; (vii) in the facts of that case, Award was made on 31st
January, 2008 and notices issued to the land owners to receive the
compensation and since they did not receive the compensation the amount
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was deposited in the Government Treasury; (viii) the deposit of the amount
of compensation in the Government Treasury is not equivalent to the
amount of compensation paid to the owners/persons interested; and, (ix)
deposit of the amount of compensation in the States Revenue Account is of
no avail and the liability of the State to pay interest subsists till the amount
has not been deposited in the Court. Thus, even in the said judgment,
deposit in the Court was held to be tender of compensation to the interested
persons. This Court also in Life Insurance Corporation of India Vs. Union
of India 1998 (47) DRJ 659 treated deposit of compensation in Court as
tender of compensation.
34. In Delhi Development Authority Vs. Sukhbir Singh (2016) 16 SCC
258, pertaining to acquisition of land in the State of Delhi, Supreme Court
noticed Standing Order No.28 of 1909 which applied to Delhi and Clause
71 whereof as under:-
"71. Payment of compensation when made - As
soon as the award has been announced the acquiring
officer will proceed to pay the compensation awarded
to those persons who are present and who accept the
award. Sufficient notice should be given to enable all
payees to assemble at the place where they will receive
their dues but no time should be wasted on useless
endeavours to secure the attendance of absentees. A
note shall be made of the names of those persons who
refused to accept the amount awarded or who accept it
under protest. Much trouble will be avoided if the
principle that payment of compensation should be
made at the time of award, is strictly observed. Most of
the persons interested will then be present and
immediate payment will save them the necessity of
making frequent journeys to the tehsil. It will usually
be found of advantage to draw in advance a sum
LA.APP. 344/2017 Page 21 of 23
sufficient to cover the probable amount of the award
and to make payments against this especially when the
award is announced at a place distant from the
headquarters."
A perusal of the aforesaid also shows that there is no need for tender
of payment by service of any notice.
35. The appellant in the present case, inspite of knowledge of acquisition
proceedings and of the Award, did not come forward to collect the
compensation and the Collector had no other option but to deposit the same
in the Court under Section 31 of the Act.
36. Before parting, I may add that in Indore Development Authority Vs.
Shailendra (2018) 3 SCC 412, Pune Municipal Corporation supra was
held to be per incurium and it was further held i) once there is tender of
compensation, then in case of refusal to accept the same, the obligation to
pay under Section 31(1) is complete by tender and that is tantamount to
making payment; ii) Section 31(2) only contemplates certain exigencies, in
such cases, compensation has to be deposited in court; it is only when
reference is sought that Reference Court comes into picture; it is only when
court comes into play, then deposit in Reference Court is required; iii)
deposit in treasury is not invalid; and, iv) by conduct also, there can be non
acceptance of compensation. Vide subsequent order reported in Indore
Development Authority Vs. Shyam Verma (2018) 3 SCC 405, the matter
was referred to Constitution Bench.
37. I therefore hold that if the land owner/person interested in the land is
aware of the acquisition proceedings and of the making of the Award, the
making of the Award constitutes tender of compensation within the
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meaning of Section 31 of the Act and if the land owner or the person
interested in the land does not come forward to accept the said
compensation, the Collector, under Section 31(2), is entitled to make a
reference to the Court and to deposit the compensation in the Court. It
cannot be lost sight of that under Section 34 of the Act the compensation
incurs interest at a rate of 9% per annum from for the first year and at a rate
of 15% per annum thereafter if not paid or deposited. It is to prevent the
appropriate Government from being subjected to liability for such interest
that provision for deposit has been made under Section 31(2).
38. There is thus no merit in this appeal.
Dismissed.
No costs.
RAJIV SAHAI ENDLAW, J.
OCTOBER 01, 2018 'gsr' / pp..
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