Madhya Pradesh High Court
M.P. State Co-Operative Oilseed ... vs State Of Madhya Pradesh And Ors. on 15 July, 1986
Equivalent citations: AIR 1987 MADHYA PRADESH 174, (1986) 2 CIV LJ 681, (1987) 2 LANDLR 434, (1987) MPLJ 535
JUDGMENT C.P. Sen, J.
1. On there being difference of opinion between B. C. Varma, J. and Gulab Gupta, J. in this petition under Arts. 226 & 227 of the Constitution regarding interpretation of proviso to Section 50(2) of the Land Acquisition Act, 1894, as to whether a reference can be claimed by a local body or company at whose instance the acquisition has been made, the case has been referred to me for resolving the differences.
2. The petitioner M. P. State Co-operative Oilseed Growers Federation is a co-operative society registered under M. P. Co-operative Societies Act, I960. The Society has set up a Soyabeen processing plant at Banapura, Tahsil Seoni-Malwa, for extraction of Soyabeeji oil and manufacture of allied products and for that purpose had acquired 30 acres of land. The Society applied to the Collector on 1-8-1983 for acquisition of 1.90 acres of land out of khasra No. 138/1 and 138/2 area 4.75 acres belonging to the respondent No. 4 in village Damadiya adjacent to the Banapura railway station to be used as a railway siding for transport of its material. The Section D. O. Seoni-Malwa was appointed Land Acquisition Officer for this purpose and he directed the Society to deposit Rs. 3,33,224.28 p/- towards the compensation to be determined for the land under acquisition failing which an undertaking should be given that the compensation so determined will be paid by the Society. Accordingly, the Society gave an undertaking on 6-9-1983 that it will pay the compensation that may be determined by the Land Acquisition Officer. The Society then applied for possession of the land on 1-10-1983.
Notification under Section 4 of the Act was published in the M. P. Gazette on 4-11-1983 dispensing with the provision of Section 5A of the Act. The Society was delivered possession of the land on 29-11-1983. Notification under Section 6 was published in the M. P. Gazette on 13-1-1984. In the meanwhile, land acquisition proceedings continued for determination of the compensation and award of: Rs. 5,56,854.25p/- was given on 30-4-1984. However, the Society filed an application on 8-6-1984 under Section 18 for reference as it was not satisfied with the amount of compensation awarded. The application was returned by the Land Acquisition Officer saying that the Society has no locus standi to ask for a reference in view of proviso to Section 50(2) of the Act. The Society then filed the present petition on 18-7-84 for quashing of the order and for a direction for making a reference. By subsequent amendment, the petitioner challenged the acquisition proceedings on the grounds (i) that the Land Acquisition Officer erred in awarding compensation contrary to the provisions of Section 23 of the Act by treating purely agricultural lands as building sites, (ii) there was no compliance to the provisions of part VII of the Act inasmuch as no agreement was got executed from the Society before proceeding with the acquisition, (iii) the Land Acquisition Officer failed to exclude 30% of the land for construction of roads etc. and (iv) the Land Acquisition Officer failed to give any opportunity to the Society for participating in the proceeding and adducing evidence in rebuttal for determination of the compensation. The State in its return mainly contended that against the impugned order there is alternative remedy of revision and before exhausting the same, straightway writ petition has been filed. As the acquired land is a diverted land for non-agricultural purpose, its market price has rightly been determined as a building site. The award is in accordance with law. The respondent No. 4 in his return contended that the writ petition is not maintainable as no reference lies at the instance of the Society in view of proviso to Section 50(2) of the Act. The amount awarded is not at all excessive inasmuch as the market price of the land is 10 rupees square feet while the award has been given at the rate of Rs. 5.75/- per sq. feet. There is no illegality in the impugned award and the petition is misconceived.
3. B. C. Varma, J. by relying on a Division Bench decision of this Court in Municipal Council. Pipariya v. State of M. P. 1965 MPLJ 961 : (AIR 1967 Madh Pra 136) held (hat by force of proviso to Section 50(2) the local authority or the company at whose instance acquisition has been made, has only a right to appear in . proceedings before the Collector or a Court and adduce evidence for the purpose of determining the amount of compensation. The local authority or the company is not entitled to demand a reference under Section 18 of the Act. He further relied on a Full Bench decision of this Court in Town Improvement Trust, Gwalior v. S. C. Angre, AIR 1978 Madh Pra 218 that though proviso to Section 50(2) bars any reference at the instance of local authority or the company, it does not take away their right to seek redress under Article 226 of the Constitution against the award because it was a person aggrieved, so the writ petition was competent. However, the Land Acquisition Officer has rightly taken into account comparable sales and potentiality as building site but there is defect on the face of the award by failure to consider that some space shall have to be left out for approach roads, lands etc. and some deduction on this count has to be made. He suggested that the petition should be partly allowed by directing reduction in the amount of compensation by 10%. Gulab Gupta, J. interpreted the words 'no such' before the words 'local authority or company1 in proviso as meaning that no reference can lie at the instance of the local authority or the company who had participated in the proceedings for determination of compensation by the Land Acquisition Officer, but a reference will lie at the instance of the local authority or company which had neither participated nor had notice of the proceedings for determining compensation by the Land Acquisition Officer because it is a 'person interested' as mentioned in Section 18 which provides for making an application for reference. In view of the decision of the Supreme Court in Himalaya Tiles & Marble (P) Ltd. v. F. V. Coutinho AIR 1980 SC 1118 the words 'person interested' in S, 18 must be 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. If such an interpretation is not given, the provision of Section 18 becomes redundant and the word 'such' would not have been used in the proviso to Section 50(2). He distinguished the Division Bench decision in Municipal Council, Pipariya v. State of M. P. (AIR 1967 Madh Pra 136) (supra) on the ground that the decision did not take into consideration the word 'such' appearing in the proviso. Regarding the Full Bench decision in Town Improvement Trust, Gwalior v. S. C. Angre (supra), the interpretation of the proviso to Section 50(2) was not under consideration and some observations made in passing be treated as obiter.
4. Section 4 of the Land Acquisition Act enables the government, whenever land is needed for any public purpose or for a company to publish a notification to that effect in the Official Gazette. 'Company' has been defined under Section 3(e) to include a society or a co-operative society registered under Societies Registration Act, I860, or under any law relating to co-operative societies for the time being in force in any State. After hearing objections, or traightway, where such hearing is dispensed with on account of urgency, the government is required by Section 6 of the Act to make a declaration that any particular land is needed for a public purpose or for a company. Thereafter the Collector is required to invite claims to compensation for all interests in such land. The Collector is then required by Section 11 of the Act to enquire into the objections and the claims and determine and apportion the compensation by making an award. A proviso added by way of an amendment in 1984 stipulates that no award shall be made by the Collector without the previous approval of the goveminent or of the officer authorised by the government in that behalf. Section 18 enable! any person interested who has notaeceptedt leaward to require the Collector to refer the matter for the determination of the Court, whether his objection be to the measurement of the land, the amount of the compensation, the persons to whom it is payable, or the apportionment of the compensation among the persons interested. Here we must refer to Section 50(2) of the Act and the proviso thereto which are as follows :
50(2). In any proceeding held before a Collector or Court in such cases the local authority or company concerned may appear and adduce evidence for the purpose of determining the amount of compensation :
Provided that no such local authority or company shall be entitled to demand a reference under Section 18.
Section 25 further prescribes that the amount of compensation awarded by the Court shail not be less than the amount awarded by the Collector under Section 11. Section 54 provides for an appeal to the High Court from the award, or from any part of the award, of the Court but it does not prescribe who mayappeat to the High Court.
5. According to me, the matter is settled by the latest decision of the Supreme Court in Santosh Kumar v. Central Warehousing Corpn., (1986) 2 SCC 343 : (AIR 1986 SC 1164) wherein it has been held as under : -
"Sections 50(2) and 25 of the Act indicate that apart from fraud, corruption or collusion the amount of compensation awarded by the Collector under Section 11 may not be questioned in any proceeding either by the Government or by the company or local authority at whose instance the acquisition is made. The Collector, in making an award, acts as an agent of the Government, and the legal character of the award made by the Collector is that of a tender or offer by him on behalf of the Government. Therefore, the Government or any one who could claim through the Government, would not be entitled to question the award. It is. therefore, not permissible for the company or local authority to invoke the jurisdiction of the High Court under Article 226 to challenge the amount of compensation awarded by the Collector and to have it reduced. 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 under Article 226. Article 226 is not meant to avoid or circumvent the processes of the law and the provisions of the statute."
The appeal to the Supreme Court arose out of an order of the Division Bench in a writ petition setting aside the award given by the Land Acquisition Officer on the grounds (i) while determining the compensation at least l/3rd of the land should have been left out for the purposes of roads etc. and (ii) the sale of small plots of land could not have been taken as conclusive to determine the compensation of the land in question which was quite a large area. Therefore, in view of the decision of the Supreme Court neither the petitioner-society, at whose instance the land was acquired, can make a reference under Section 18 of the Act because of the bar in proviso to Section 50(2) of the Act nor this Court can entertain this writ petition against the impugned award at the instance of the society. However, the learned counsel for the petitioner contended that under Sub-section (2) of Section 50 the society was entitled to be noticed in the proceedings for determination of compensation by the Land Acquisition Officer but no such notice was given. Under the subsection, the society could have appeared and adduced evidence for the purpose of determining the amount of compensation and so the award should be quashed and the case remitted back for re-determination of the amount of compensation. In order to satisfy myself, the record of the Land Acquisition Officer was requisitioned and on going through the record I am satisfied that the society had notice of the proceedings for determination of compensation though there is no notice as such on record intimating the society about the proceedings, but the society was given a notice on 1-9-83 to deposit Rs. 3.33,224.28 p/- tentatively pending determination of compensation to be awarded for acquisition of the land in question. According to me, this was the notice to the society about the proceeding. The society in reply submitted a written undertaking to pay the compensation that may be awarded by the Land Acquisition Officer. Nothing prevented the society at that stage to have intervened and contend as to what is to be the market price of the land under acquisition and also could have disputed the amount tentatively determined. So after the award is given, it is not open to the society to claim that it has no notice of the proceed ings and a fresh opportunity should be given by remitting the award to the Land Acquisition Officer for redetermination of the compensation. Relief could have been in this writ petition in case the society had no notice of the proceedings for determination of the compensation.
6. Section 18 permits a person interested to apply for a reference to the Civil Court if he has not accepted the award. But proviso to Section 50(2) provides that the local authority or the company at whose instance the acquisition is made, shall not be entitled to demand a reference. Both these sections are to be read together and proviso to Section 50(2) is by way of exception to Section 18. It is true that the Supreme Court in Himalaya Tiles & Marble (P) Ltd., (AIR 1980 SC 1118) (supra) has held that the definition of 'person interested' in Section 18 must be construed so as to include a body, local authority or a company for whose benefit the land is acquired. But the Supreme Court was not considering the effect of the proviso to Section 50(2) to Section 18. The observation of the Supreme Court has to be read in the light of the facts of that case. There the land-owner challenged the acquisition in a writ petition and the single Bench of the Bombay High Court quashed the acquisition as the acquisition was not for public purpose. Section 4 has since been amended, an acquisition can be made for a public purpose or for a company. The company at whose instance the acquisition was made filed Letters Patent appeal which was dismissed by the Division Bench on the ground that the appellant has no locus standi to file the appeal. The Supreme Court also dismissed the appeal as there was no compliance to Section 7 but held that the Letters Patent appeal was competent as the company was a person interested to support the acquisition and to see that it is not required to pay a very heavy amount as compensation. The Supreme Court has not said that a reference will lie at the instance of a local authority or a company. This means that a local authority or a company is a person aggrieved and has a right to challenge any order quashing the acquisition as at its instance the acquisition was made. So Gulab Gupta, J. was not right in saying that a reference will lie at the instance of a local authority or a company at whose instance the acquisition was made provided it had no notice or had not participated in the proceedings for determination of compensation. B.C. Verma, J. was also not right in reducing the amount of compensation in the writ petition. In case the society had no notice of the proceedings before the Land Acquisition Officer, he could have only remanded the case for re determination of the compensation after giving opportunity to the society to adduce evidence. The Full Bench decision of this Court in Town Improvement Trust v. S.C. Angre, (AIR 1978 Madh Pra 218) (supra) stands impliedly overruled by the latest Supreme Court decision in Santosh Kumar v. Central Warehousing Corpn., (AIR 1986 SC 1164) (supra).
7. With the result, the petition fails and it is dismissed. Under the circumstances, there shall be no order as to costs. The outstanding security amount be refunded to the petitioner.