Madhya Pradesh High Court
M.P. Grih Nirman Mandal And Anr. vs Umashankar Kunjilal And Anr. on 15 December, 1989
Equivalent citations: 1990(0)MPLJ780
JUDGMENT S.K. Dubey, J.
1. Aggrieved of a common award and decree dated 19-12-1986, passed by Third Additional Judge to the Court of District Judge, Morena, in Reference Cases Nos. 5/1984, 7/1984, 8/1984, 9/1984, 10/1984, 12/1984, 13/1984, 14/1984, 15/1984, 17/1984, 18/1984, 19/1984, 20/1984, 22/1984, 23/1984, 24/1984, 25/1984, 26/1984, 27/1984, 28/1984, 29/1984, 30/1984, 31/1984, the M. P. Grih Nirman Mandal, Bhopal (for short 'appellant No. 1'), has preferred separate appeals, being Miscellaneous Appeals Nos. 46/1984, 45/1984, 39/1984, 104/1987, 51/1987, 53/1987, 54/1987, 55/1987, 52/1987, 56/1987, 80/1987, 32/1987, 34/1987, 35/1987, 36/1987, 38/1987, 40/1987, 41/1987, 42/1987, 43/1987, 44/1987, 47/1987, 48/1987, 49/1987 50/1987 and 96/1987, under section 54 of the Land Acquisition Act, 1894, as amended (for short, the 'Act'). The respondents/land owners whose lands were acquired for appellant No. 1, have also filed their cross-objections under Order 41, Rule 22, Civil Procedure Code, for enhancement of compensation, solatium and interest in accordance with the amendments made in sections 23 and 28 of the Act by Amendment Act No. 68 of 1984. As a common award was passed and common submissions were made by learned counsel for the respective parties, all these appeals are disposed of by this judgment.
2. Material facts leading to these appeals are: A Notification under section 4(1) of the Act was issued on 16-6-1979 by the State Government for acquisition of land comprising 14.47 hectares in village Jora Khurd in the District of Morena for public purpose, that is, for providing residential accommodation to the general public on hire-purchase scheme prepared by appellant No. 1. This land was acquired by the Government of Madhya Pradesh, appellant No. 2, for appellant No. 1. A Notification under section 6 was issued on 19-3-1981. These Notifications were challenged by owners of the land in a writ petition (M. P. No. 134/1981), which was ultimately dismissed. According to the land owners, the possession was taken on 19-8-1981, but this Court observed in the writ petition that the possession so taken was not legal, hence, formal possession was again taken on 20-4-1983. The Collector vide award dated 7-10-1983 awarded Rs. 8,000/- per Bigha of land as compensation. The land owners applied for a Reference under section 18 of the Act. After recording evidence led by the parties, the Additional District Judge, vide impugned award dated 19-12-1986 enhanced the compensation from Rs. 8,000/- to Rs. 54,000/- per Bigha in all cases, except five cases i.e. Reference Cases Nos. 12/1984, 10/1984, 21/1984, 25/1984 and 28/1984, in which the compensation was enhanced from Rs. 8,000/- to Rs. 1,08,000/- per Bigha.
3. The appellant No. 1 preferred these appeals impleading the State of Madhya Pradesh through Collector, Morena, as respondent. This Court, on 7-5-1987, while hearing on admission of the appeals allowed the application of appellant No. 1 and granted leave to prefer the appeals. On 29-8-1988 a conditional order was passed on an application of appellant No. 1 dated 19-7-1988, allowing transposition of the State of M. P. from the array of respondent to appellant No. 2. As the prayer of transposition was opposed, the right of the respondents was reserved to object about the transposition at the time of hearing of the appeals.
4. A preliminary objection was raised by the land owners/respondents that the appeals are incompetent, as in view of the provisions of section 50(2) of the Act, a local authority or a company concerned cannot file an appeal and, as the appeals were incompetent, transposition of the State of M. P. as appellant No. 2 beyond the period of limitation for filing an appeal will not make the appeals competent. Learned counsel Sarvashri Swamisaran, J. P. Sharma and K. K. Lahoti, for the land owners, appearing in different appeals, placed reliance on Santosh Kumar v. Central Warehousing Corporation, AIR 1986 SC 1164; a Single Bench decision of this Court in F. A. No. 11 1964, decided on 4-11-1966, Municipal Committee, Mungaoli v. Babulal short-noted in 1987 MPLJ as Note 54, Division Bench decision in Municipal Council, Piparia v. State of M. P., 1965 MPLJ 961 - AIR 1967 MP 136; a decision on difference of opinion in case of M. P. State Co.-Op.O.G. Federation v. State of M. P., 1987 MPLJ 535 = AIR 1987 M.P. 174 and Gautamlal v. Land Acquisition Officer, AIR 1970 Guj. 81.
5. Shri H.D. Gupta, learned Government Advocate appearing for appellant No. 2, State of Madhya Pradesh, and Shri N. P. Mittal, learned counsel for appellant No. 1, contended that the provision of appeal under section 54 being subject to the provisions of the Code of Civil Procedure, 1908, which is applicable to appeals from original decrees, clearly gives a right to the person interested and aggrieved to file an appeal. Appellant No. 1 is a person interested, as the land after acquisition has vested in State, who, thereafter, transferred to appellant No. 1, who has to pay the amount of compensation. The expression "person interested" in section 3(b) of the Act includes all persons claiming an interest in compensation to be made on account of the acquisition of land under the Act. Learned counsel placed reliance on decisions of the apex Court in Himalaya Tiles and Marble (P.) Ltd. v. F.V. Coutinho, AIR 1980 SC 1118; Vijai Pratap v. Dukh Haran Nath, AIR 1962 SC 941; Saila Bala v. Nirmala Sundari, AIR 1958 SC 394 and two Division Bench decisions of Karnataka and Kerala High Courts in Assistant Commr. and Land Acquisition Officer v. Basappa, AIR 1985 Kant. 75 and K.S.E. Board v. Cyriac Stephen, AIR 1982 Ker. 61.
6. Before we deal with the preliminary objection, it is necessary to mention that this Court, on an application, granted leave to appellant No. 1 to file appeals and thereafter the appeals were admitted. It is not in dispute that appellant No. 1 is "a person interested" within the ambit of section 3(b) of the Act. It is also not in dispute that appellant No. 1 for whom the land was acquired, came to know of the award only when it was asked to pay the enhanced compensation. It is also beyond doubt that on vesting of the land in State Government, it stood transferred to appellant No. 1 who has title to the land. Therefore, when the compensation is to be paid by appellant No. 1, certainly, appellant No. 1 is interested in seeing that a proper quantum of compensation is fixed so that it may not have to pay a very large amount of money. On these facts it cannot be doubted that appellant No. 1 who is vitally interested in seeing that a just and not a heavy compensation is paid for the land acquired, as the award was made without notice to appellant No. 1, who is a person interested and aggrieved of the award passed by the Court, and can prefer an appeal under section 54 of the Act, after seeking leave to the Court. Though the right of filing an appeal by a local authority or company has not been settled by the Supreme Court in any of the cases, cited before us, in case of Himalaya Tiles and Marble (P.) Ltd. v. F.V. Coutinho (supra), while considering a case of acquisition of land for a Company, provisions of section 18(1) of the Act and the definition of "a person interested given in section 18, the Supreme Court in para 7 observed as under:
"It seems to us that the definition of 'a person interested' given in section 18 is an inclusive definition and must be liberally construed so as to embrace all persons who may be directly or indirectly interested either in the title to the land or in the quantum of compensation. In the instant case, it is not disputed that the lands were actually acquired for the purpose of the company and once the land vested in the Government, after acquisition, it stood transferred to the company under the agreement entered into between the company and the Government. Thus, it cannot be said that the company had no claim or title to the land at all. Secondly, since under the agreement the company had to pay the compensation, it was most certainly interested in seeing that a proper quantum of compensation was fixed so that the company may not have to pay a very heavy amount of money. For this purpose, the company could undoubtedly appear and adduce evidence on the question of the quantum of compensation."
Thereafter, after considering the consensus of judicial opinion, the apex Court held in para 13:
"Thus, the preponderance of judicial opinion seems to favour the view that the definition of 'person interested' must be liberally construed so as to include a body, local authority, or a company for whose benefit the land is acquired and who is bound under an agreement to pay the compensation. In our opinion, this view accords with the principles of equity, justice and good conscience. How can it be said that a person for whose benefit the land is acquired and who is to pay the compensation is not a person interested even though its stake may be extremely vital? For instance, the land acquisition proceedings may be held to be invalid and thus a person concerned is completely deprived of the benefit which is proposed to be given to him. Similarly, if such a person is not heard by the Collector or a court, he may have to pay a very heavy compensation which, in case he is allowed to appear before a court, he could have satisfied it that the compensation was far too heavy having regard to the nature and extent of the land. We are, therefore, unable to agree with the view taken by the Orissa High Court or even by the Calcutta High Court that a company, local authority or a person for whose benefit the land is acquired is not an interested person. We are satisfied that such a person is vitally interested both in the title to the property as also in the compensation to be paid therefore because both these factors concern its future course of action and if decided against him, seriously prejudice his rights. Moreover, in view of the decision of this Court referred to above, we hold that the appellant was undoubtedly a person interested as contemplated by Section 18(1) of the Act. The High Court, therefore, committed an erro in throwing out the appeal of the appellant on the ground that if had no locus to file an appeal before the Bench."
Following this decision of the apex Court, a Division Bench of Karnataka High Court in Asstt. Commr. and Land Acquisition Officer v. Basappa (supra) held that Market Committee is "a person interested" and is entitled to be impleaded in the appeal against the enhancement of compensation. A Division Bench of Kerala High Court in K.S.E. Board v. Cyriac Stephen (supra) held that the Kerala State Electricity Board for which land was acquired has a right of appeal because the right of appeal is dependent on the question as to whether the appellant/Board is 'either bound by the order of the inferior Court or is aggrieved by it or is prejudicially affected by it.
7. The decisions relied by learned counsel for land owners are based on section 50(2) of the Act, which, in our opinion, are not applicable to the preliminary objection raised in the case. The decision of Shivdayal, J. (as he then was) in Municipal Committee, Mungaoli v. Babulal (supra), which is based on the reasoning under section 50(2) of the Act that a local authority only may appear and adduce evidence for the purpose of determining the amount of compensation and that such local authority is not entitled to demand a reference under section 18, and that because of the proviso to section 50 of the Act, such local authority is not a party to the proceedings although the land is being acquired for its benefit, is that from an order made on reference, an appeal can be preferred only by the Collector or the State Government but not by the local authority; with due respect, we disagree with the view, in view of the law enunciated by the apex Court in Himalaya Tiles and Marble (P.) Ltd v. F. V. Coutinho (supra), and the language used in section 54 of the Act, which deals with appeals and which is not governed by section 50 of the Act, object of which is quite different. The case of the Division Bench of this Court in Municipal Council, Piparia v. State of M. P. (supra) does not deal with the question of right of filing of an appeal but deals with the entitlement of a local authority for demanding a reference against an award made by Land Acquisition Officer. In case of Santosh Kumar v. Central Warehousing Corporation (supra) the apex Court held that a company cannot challenge the amount of compensation by a writ petition in view of the bar contained in section 50(2) of the Act. It was also held that a Government or any one that claimed through the Government would not be entitled to question the award. The apex Court further observed that it is, therefore, not permissible for a company or a local authority to invoke the jurisdiction of the High Court under Article. 226 of the Constitution to challenge the amount of compensation awarded by the Collector and to have it reduced. It was held that what may not be done under the provisions of the Act may not be permitted to be done by invoking the jurisdiction of the High Court. Article 226 is not meant to avoid or circumvent the law. Thus, this case also does not deal with the right or entitlement of the local authority or company to file an appeal against the award passed by a Court on a reference under section 18 of the Act.
8. The decision in M. P. State Co-op.O.G. Federation v. State of M. P. (supra) is also not applicable, as in that case on a difference of opinion between B. C. Verma and Gulab Gupta, JJ., C. P. Sen, J., while considering the right of local authority or company to apply for a reference under section 18 of the Act against an award of the Land Acquisition Officer, held that in view of the bar under the proviso to section 50(2) of the Act, the local authority or company cannot apply for a reference. It was also held that writ petition is also not maintainable against the award of the Collector by such company or local authority. In this case too, the question was not dealt with in respect of the right of filing an appeal against an award and decree passed by the Court on a reference under section 18 of the Act.
9. The decision of the Division Bench of Gujarat High Court in Gautamlal v. Land Acquisition Officer (supra) is also to the same effect that a company has no right to demand a reference. No doubt, in this case it has been observed that such a company or local authority has not been given a right to appeal against the award of the Court, but for observing so the reasoning adopted is also on the basis of the expression used in section 50(2) of the Act. We respectfully disagree with the view taken by the DB of Gujarat High Court because of the law enunciated in Himalaya Tiles and Marble (P.) Ltd. v. F. V. Coutinho (supra).
10. In case of Chimanlal Hargovinddas, (1988) 3 SCC 751 the apex Court (sic) riving at a market value laid down factors which must be attached on the mental screen. For the question involved in the present appeals all factors are not necessary for consideration but from the above case it is clear that a reference under section 18 of the Act is not an appeal against the award, nor the award of Land Acquisition Officer can be treated as judgment of the trial Court open or exposed to challenge before the Court hearing the reference. It is merely an offer made by the Land Acquisition Officer of compensation for the land acquired. A reference under section 18 has to be treated as an original proceeding before the Court for determining market value, the claimants therein are in a position of plaintiffs. Therefore, the proceedings in a Court on a reference under section 18 of the Act are quite independent and original proceedings. The said proceedings have no relation with the proceedings before Land Acquisition Officer, who on evaluation of material adduced, determines the compensation for making an offer. Such compensation offered in view of the proviso to section 50 of the Act cannot be challenged by a local authority or company by making a demand of reference under section 18, as the offer is on behalf of the company or local authority for which the land is acquired.
11. Section 54 of the Act, which has been amended by Act No. 68 of 1984, reads as under:
"54. Appeals in proceedings before Court. - Subject to the provisions of the Code of Civil Procedure, 1908 (5 of 1908), applicable to appeals from original decrees, and notwithstanding anything to the contrary in any enactment for the time being in force, an appeal shall only lie in any proceedings under this Act to the High Court from the award, or from any part of the award, of the Court and from any decree of the High Court passed on such appeal as aforesaid an appeal shall lie to the Supreme Court subject to the provisions contained in Section 110 of the Code of Civil Procedure, 1908, and in Order XLV thereof."
A bare reading of section 54 shows that the appeals under the Act against original decrees of the Court are subject to the provisions of the Code of Civil Procedure, 1908, applicable to appeals from original decrees. Under section 96, Civil Procedure Code, an aggrieved and vitally interested party, against a decree of the Court, can prefer an appeal with the leave of the Court, even if it is not a party to the decree so appealed against. Provisions of Order 1, Rule 10, Civil Procedure Code, are also applicable to appeals under the Code of Civil Procedure, which are not inconsistent with the provisions of the Act, hence, when, under section 54 of the Act, appeals are subject to the provisions of the Code of Civil Procedure, applicable to appeals from original decrees, the provisions of section 96 and Order 1, Rule 10, Civil Procedure Code, are also applicable to appeals under Section 54 of the Act.
12. As held by the apex Court in Chimanlal's case (supra), the proceedings on behalf of claimants/plaintiffs are original proceedings, and the award of the Court is a decree which can be appealed under section 54 of the Act. The local authority, though not a party to the proceedings under section 18, is vitally interested and is bound by the award and that it has to pay the amount of compensation so enhanced under the award; on an application by it for invoking the appellate jurisdiction for leave to appeal, appellate Court on being satisfied that such a party is bound by the award, has to satisfy the award, of which the party is aggrieved and is seriously prejudiced and, of course, in appeal the Collector is found as a party, subject to all other laws pertaining to limitation, court-fees, etc., may grant leave. If leave is granted it relates back to the date when the appeal was filed in accordance with other laws governing such an appeal.
13. In the present appeals, this Court on being satisfied, granted leave, and it is not disputed that the appeals so filed are not incompetent in any other manner. Besides, this Court has also granted leave to transpose State of M. P. from respondent to appellant, and this transposition is riot affected by the period of limitation. Therefore, the preliminary objection has no force and the appeals cannot be held to be not entertainable.
14. On quantum, the contention of Shri Mittal and Shri Gupta that the learned Additional District Judge without any rhyme or reason has enhanced the value per Bigha three times and six times taking into consideration a sale deed executed on 7-9-1974. It is true that except this sale deed there is no comparable sale of land in blocks in the vicinity; though six sale-deeds have been produced, they are of small plots, which cannot be a safe guide for determining the market value. The Additional District Judge has also rightly not taken into consideration these sales in view of the law enunciated by the apex Court in Collector of Lakhimpur v. B. C. Dutta, AIR 1971 SC 2015; Padma Uppal v. State of Punjab, AIR 1977 SC 580 and Prithvi Raj v. State of M. P., AIR 1977 SC 1560.
15. The land is within the limits of Municipal Council; it is an agricultural land and at a little distance to it, there is a housing colony; because of the absence of any sale of the land in the vicinity, the Court is not helpless to determine the market value. In land acquisition matters, the Court is bound to determine compensation by doing some mental exercise considering the relevant factors, i.e., speculative advantage, potentialities, size, shape and frontage of the land. As the land is situated limits and near a housing colony and there is a pressure on the land for building activity, the land is suitable for building purposes; though the land in an blocks and is an undeveloped land, it will not fetch the same value as the land of a developed area fetches. A hypothetical purchaser would not offer the same market value for the developed and undeveloped lands. If a hypothetical purchaser opts to purchase the land situated in an undeveloped area, he would take into account the factor pertaining to approximate estimated time for development. For his capital would be unprofitably locked up for a very long time till the land is developed. He would also suffer the interest; in such a situation a thorugh, precise or scientific valuation is not possible, but some gueses work has to be done to make the best of the situation. Though the claimants have stated that the prices of land have gone four-five time high, their statement, though unrebutted and not cross-examined coupled with the fact that the State has not produced any evidence, cannot be accepted ipse dixit. In such a situation, the Judges must call in aid their experience in life, and on the available material, guess work is permissible. (See Chimanlal Hargovinddas (supra); Rajendra Kumar v. Collector, Raipur, 1979 MPLJ Note 56) and P. R. Modi v. Collector, Durg, 1974 MPLJ 824.
16. In the year 1974 the land adjacent to the acquired land was sold for Rs. 18,000/- per Bigha, this land was sold in blocks. After this a sale, there is a time gap of five years, hence, it can safely be presumed that the value of such undeveloped land has also increased and such increase, in our opinion cannot be more than double the amount of Rs. 18,000/- that is, Rs. 36,000/- per Bigha. Therefore, the market value at the time of Notification, in our opinion, at Rs. 36,000/- per Bigha is just and proper which, without any categoriation, the claimants/land owners are entitled and not more than that.
17. The next question which arises is with respect to solatium and interest according to the amendments made in sections 23 and 28 of the Act. On behalf of the appellants, it was submitted that the State Amendment, that is, C. P. Act XXVII of 1939, the Act is applicable; therefore, interest under section 28 of the Act cannot be more than 6% per- annum and solatium under section 23 cannot be awarded more than 10% of the market value. In our opinion, the contention of learned counsel for the appellants cannot be accepted. Section 23 of the Act, which' stands, amended, wherein Clause (1-A) is added whereby in addition to the market value of the land, as provided, the Court in every case has to award an amount calculated at the rate of twelve per centum per annum on such market value for the period commencing on and from the date of the publication of the Notification under section 4, sub-section (1) in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier. Further, there is an Explanation to this Clause (1-A) that the period during which the proceedings for acquisition of the land were held up on account of any stay or injunction by the order of any Court shall be excluded. Sub-clause (2) of section 23, in addition to the market value of the land, as provided, provides that the Court in every case has to award a sum of thirty per centum on such market value, in consideration of the compulsory nature of the acquisition. Under section 28, a provision has been made to make the payment of interest at the rate of nine per cent per annum from the date on which the possession was taken of the land on the excess amount awarded by the Court. The Proviso provides that the court may direct that where such excess or any part thereof is paid into Court after the date of expiry of a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the amount of such excess or part thereof, which has not been paid into Court before the date of such expiry. These amendments were made by the Land Acquisition (Amendment) Act, 1984, and have come into force. Recently, the apex Court in case, of Raghuvir Singh Yadav, AIR 1989 SC 1933, made the position crystal clear that the amendments apply only to awards made by the Collector or Court between April 30, 1982 and September 30, 1984 and not before, and the benefits also extended to appeals pending or decided any time after 30th April 1982. In the present cases, the awards were made on 19-12-1986; therefore, the benefit of the amended provisions is available to the land owners.
18. The question only remains whether the State Amendment will debar these land owners or not. A learned Single Judge of this Court in Second Appeal No. 55 197I, decided on 21-10-1981, State of M. P. v. Abdul Karim, reported in 1982 MPLJ Note 19, held that the C. P. and Berar amendments made under section 28 have no applicability while awarding interest in respect of the land acquired in the erstwhile State of Madhya Bharat. The C. P. and Berar Amendment made in the Act was not extended by the M. P. Extension of Laws Act, 1956 (Act No. 23/1956), which provided for the extension of certain laws in force in some of the regions of Madhya Pradesh to the other regions thereof. Section 3 of the Extension of Laws Act deals with the extension and amendment of certain Acts. By section 3(1) the Acts specified in Part A of the Schedule were extended to all other regions of the State from the appointed day, but State amendments in the Act were not extended to Madhya Bharat and Sironj regions nor any adaptation was made of the said State amendments in the Act by M. P. Adaptation of Laws (State and Concurrent Subjects) Order, 1956. Therefore, no benefit of the provisions of C. P. Act II of 1922 and C. P. and Berar Act XXVII of 1939, whereby the Act was amended in its application to Central Provinces and Berar is available to appellants and the appellants are bound to pay additional amount, solatium and interest in accordance with section 23 and section 28 of the Act.
19. Before we conclude, we make it clear that appellant No. 1, who was not a party to the proceedings before the Court and to whom leave to file appeal was granted by this Court, has not asked for a remand and made submissions on the material produced by the parties before the Court.
20. In the result, the appeals are partly allowed. Cross-objections in respect of payment of additional amount, solatium and interest are also allowed. The award and decree of the learned Third Additional Judge to the Court of District Judge, Morena, in respect of all the cases are modified to the extent indicated hereinabove. As the calculations are to be made, all the cases are sent back to the Court of Third Additional Judge to the Court of District Judge with a direction that the amount of market value in each case be calculated at the rate of Rs. 36,000/- per Bigha for the lands acquired of the land owners, and on that, according to section 23(1-A) of the Act an amount calculated at the rate of 12 per centum per annum be awarded from the date of the Notification under section 4 of the Act, i.e. 16-6-1979 till the date of taking of possession i.e. 19-8-1981. In addition to the market value of the land, as above provided, mandatory solatium at the rate of 30 per centum on such market value in consideration of compulsory nature of acquisition be also calculated under section 23(2) of the Act. Statutory interest at the rate of 9% per annum on excess amount of the compensation as awarded by the Collector be also calculated from the date of taking over possession till the date of payment of such excess amount into Court. If the amount has already been deposited by appellant No. l in accordance with the impugned award, adjustment be made accordingly, and thereafter balance, if any, be directed to be paid to the land owners. In case any of the land owners has received the amount more than the amount on the market value, solatium and interest, as directed by this Court, such land owner/claimant be directed to restitute the amount by depositng the same.
21. In the circumstances of the case, both parties are left to bear their own costs.
22. A decree be prepared accordingly in all the appeals.
23. Let the records of all the cases go to the Court of Third Additional Judge to the Court of District Judge, Morena, to calculate the amount accordingly and for that purpose, parties are directed through their counsel to appear before the said Court on 29th January 1990.