Allahabad High Court
Smt. Ashma Dwivedi And Another vs Union Of India And 6 Others on 7 April, 2023
Bench: Sunita Agarwal, Vipin Chandra Dixit
HIGH COURT OF JUDICATURE AT ALLAHABAD
Reserved on:-17.01.2023
Delivered on:-07.04.2023
Court No. - 39
Case :- WRIT - C No. - 24297 of 2022
Petitioner :- Smt. Ashma Dwivedi And Another
Respondent :- Union Of India And 6 Others
Counsel for Petitioner :- Vinod Kumar Upadhyay,Santosh Kumar Upadhyay
Counsel for Respondent :- A.S.G.I.,Pranjal Mehrotra
Alongwith
WRIC/8928/2022,WRIC/26508/2022,WRIC/9796/2022,
WRIC/8868/2022WRIC/28268/2022,WRIC/27317/2022,
WRIC/26289/2022
Hon'ble Mrs. Sunita Agarwal,J.
Hon'ble Vipin Chandra Dixit,J.
1. Heard Sri Sanjeev Kumar Tyagi, learned Senior Advocate assisted by Sri Rahul Kumar Tyagi and Sri Pankaj Upadhyay, learned counsel for the petitioners in the connected petitions, Sri Apurva Hajela, learned Standing Counsel, Sri Pranjal Mehrotra, Sri Neeraj Dube, Ms. Akanksha Gaur, Sri Raghav Dwivedi and Sri Dinesh Kumar Mishra, Sri Vaibhav Tripathi learned counsels appearing on behalf of NHAI, on the issue of transfer of right to receive compensation after vesting of the land under Section 3D of the National Highways Act, 1956 (hereinafter referred as Act' 1956).
2. In the present of bunch of writ petitions, a dispute has been raised with regard to the right of the transferee of the original tenure holders of the acquired land after the declaration under Section 3D(1) of the Act' 1956, to receive compensation on the strength of his vendor's title. In some of the writ petitions, mandamus has been sought to issue direction to the competent authority to decide the claim of the petitioners who are subsequent transferees after the declaration under Section 3D of the Act, 1956 and to pay compensation for the portion of the acquired land purchased by the petitioners vide registered sale deeds. Some of the petitioners are subsequent purchasers of the original tenure holders of the acquired land after declaration of the award. They are also seeking disbursement of compensation in their name. On the other hand, the petitioners who are original tenure holders are claiming their right to receive compensation, by stating that their co-sharers had sold their shares in the joint property after declaration under Section 3D and the subsequent transferees are trying to get away by seeking disbursement of compensation of the acquired land, though the land in question is still recorded in the name of original tenure holders. There are claims of the tenure holders that the sale deeds pressed into service by the subsequent transferees are result of fraud and competent authority may be directed to release compensation in their favour.
3. In essence, there are rival claims of the original tenure holders and subsequent purchaser/transferees of the original tenure holders to seek disbursement of compensation for the land acquired for construction of National Highway under the Act, 1956.
4. The Counsels appearing for the transferees have relied upon the decision of the Full Bench of this Court in Sursati Vs. State of UP. & others1 dated 5.9.2022 wherein the issue with regard to the right of the purchaser/transferees after publication of the notification under Section 3D of the Act' 1956, to receive compensation on the strength of their vendor's title has been upheld, subject to notice to the vendors and No Objection given by them. The Full Bench has further held that the subsequent purchaser/transferee of the land after determination of compensation i.e. award under Section 3G of the Act, 1956 is not entitled to claim compensation from the competent authority. His remedy under the common law may be to claim damages or any other amount from his vendors.
5. The said legal position has been stated by the Full Bench by placing reliance upon the judgement of the Apex Court in V.Chandrashekar, Jal Nigam Vs. Kalra Properties Pvt. Ltd.2, Smt. Sneh Prabha Etc vs State Of U.P. & Anr3 and Shiv Kumar and another Vs. Union of India and others4, wherein it was held that the purchaser of the land after the publication of the notification under Section 4(1) of the Land Acquisition Act 1894 (hereinafter referred as Act' 1894) acquires no right, title or interest in the land as the sale deed is void against the State. He cannot challenge the validity of the notification or the irregularities if any, in taking possession of the land after publication of the declaration under Section 6. As the original owner has the right to receive compensation under Section 23 (1) of the Act, though the purchaser/ transferee acquires no title to the land, he may be a "person interested" in the compensation having stepped into the shoes of the erstwhile owner and can claim compensation.
6. While holding so, the Full Bench had considered the definition of "person interested" under Section 3(b) of the 1894 Act and section 3(x) of the Right of Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013 (hereinafter referred as Act' 2013). It was noted that the expression "person interested" though has not been defined under the Act' 1956, but it has been used repeatedly in various provisions of the 1956' Act, such as Section 3C, 3G(7)(b)(c) and (d). The expression "person interested" defined in Section 3(b) of 1894 Act and Section 3(x) of 2013' Act includes all persons, claiming an interest in the compensation to be made, on account of the acquisition of land under the said Act.
7. It was noted that the Apex Court in Nagpur trust Vs Vitthalrao5 , Dilawar Vs Union of India & others6, Union of India Vs Tarsem Singh and another7 has observed that it is immaterial whether it is one Acquisition Act or another Acquisition Act under which the land is acquired. The only difference between the statutes namely the 1894' Act and 2013' Act and 1956 Act is that the former provides for acquisition of land in general whereas the latter Act is for a specific purpose namely for construction of National Highways. There is difference with reference to the procedure adopted under the two sets of Act for acquisition. It was noted that the rule of construction of statutes, pari materia that is the words used in a statute must be construed in its context and the word "context" means not only the statute in which the word is used but also pari materia statute made at different times. It was further noted that the expression "building, maintenance or operation of National Highway" used in Section 3A of the 1956' Act has to be construed in the context of the provisions of the National Highways Act, 1988. It was, thus, concluded that the 1894 Act, 2013' Act and 1956' Act are pari materia. They have to be read in complementary manner so that they do not create contradiction while giving full effect to the intention of the Parliament as evinced by the statute or statutory scheme, considered as a whole. It was held that in a series of statutes dealing with the same subject, the rule of construction allows the use of an earlier statute to throw light on the later.
8. It was observed that under the Act' 1956 with the issuance of the notification for declaration under Section 3D(1), the land shall vests in the Central Government, whereas in the Act' 1894, vesting of the land takes place after acquisition in terms of Section 16, after the award is announced. However, for the limited purpose of right to receive compensation, the issue of vesting is not to be examined. It was further noted that the competent authority is required to pay compensation on account of acquisition of land to any person who may be entitled to it with reference to the acquisition of the land. The only issue is as to who will be paid that compensation. Applying the principle of law laid down in various decisions of the Apex Court noted above while dealing with the provisions of 1894' Act, it was held that the subsequent buyer of the land, after issuance of notification under Section 3D, but before announcement of the award, will certainly have the right to receive compensation. He will step into the shoes of the vendor only for the limited extent of receiving compensation, though he will not get any right to challenge the acquisition as such.
9. When the Full Bench was placed before us, a doubt was raised by the learned counsel for the petitioners who are the original tenure holders, about the view expressed by the Full Bench that the question of vesting of land is not relevant to decide the issue pertaining to the right to claim compensation by the subsequent transferee. It was argued that the question of vesting is required to be examined by the Court in order to determine the effect of vesting under Section 3D of the 1956 Act. It was argued that in the judgements of the Apex Court, which were relied upon by the Full Bench, it was held that after publication of the preliminary notification under Section 4(1) of the Act' 1894, the sale deed is void ab initio. Under the scheme of Act' 1894, the acquired land vests absolutely in the government free from all encumbrances, after declaration of award and taking of possession, in a case where there is no urgency, but where urgency under Section 17(4) of 1894' Act is invoked, the vesting is complete with the expiry of period of fifteen days of the publication of notice under Section 9(1) to take possession of the land. In any case, under the scheme of Act' 1894, there is no concept of vesting at the stage of declaration under Section 6 of the said Act, i.e. after the publication of the notification for declaration of acquisition. Whereas in the scheme of Act' 1956, the land vests with the publication of the declaration under Section 3D(1) of the Act, 1956. No person can deal with the government land, in as much as, with the vesting of the land with the Central Government 'free from all encumbrances', all rights, title and interest in the land stand transferred to the Central Government. The owner of the acquired land left with no right, title or interest, to transfer the same to any third party. The result is that the sale deed becomes viod ab initio.
10. It was argued that as far as the notification under Section 4(1) of the Act' 1894 is concerned, the same is only a proposal of publication of the intention of the appropriate government that the land in the locality is likely to be needed for any public purpose. At this stage, the land owner is entitled to hearing on raising objection, if any, to the acquisition of the land. The objection in writing made by the land owners are to be dealt with by the Collector by providing opportunity of hearing to the objector and a report has to be made by the Collector in respect of such land after dealing with the objections of the land owners, with his recommendation on the objection together with the record of the proceeding held by him. It was argued that the stages of acquisition after publication under Section 4(1) of the 1894 Act and declaration under Section 3D(1) of the Act' 1956 are absolutely different. Before publication of the notification under Section 3D(1) of the Act' 1956, the decision on the objection of the land owners to the competent authority in writing would have to be dealt with. It is not the proposal but a final declaration of the Central Government to acquire land for the purpose of construction of National Highway. No person can be allowed to deal with the property, at that stage, as the land vests absolutely in the Central Government 'free from all encumbrances'.
11. It was argued by Sri Sanjeev Kumar Tyagi learned counsel for the petitioner who is the original tenure holder, that a subsequent transferee of an acquired land, to whom no right, title or interest can be transferred on account of the sale deed in his favour being void, cannot be said to be "person interested" within the meaning of Section 3(b) of 1894 Act or Section 3(x) of 2013 Act, to be included as the person claiming an interest in compensation to be made on account of the acquisition of the land under the Land Acquisition Act. The submission is that the principle laid down by the Full Bench of this Court are required reconsideration in light of the effect of vesting of the acquired land in the Scheme of the Act' 1956.
12. The learned Counsels appearing for the purchasers as petitioners herein further submit that the conclusion drawn by the Full Bench that the purchaser will not be entitled to claim compensation from the competent authority, if the purchase is after the determination of compensation under Section 3G of the Act, 1956, has no rationale in view of the principle laid down by the Full Bench that the purchaser of acquired land after publication of the notification under Section 3D of the Act, 1956 would fall in the definition of the expression "person interested" and, as such, he is entitled to claim compensation from the competent authority.
13. It was argued that the conclusion drawn by the Full Bench that a purchaser of the land after determination of compensation under Section 3G of 1956' Act cannot be included in the definition of expression "person interested", as he has purchased the land when the entire proceedings have been concluded and the land vests with the Central Government, is without any justifiable differentia. It is submitted that once the Full Bench has held that "person interested" would include the transferee of the land after the same vests with the Central Government with the publication of the declaration notification under Section 3D(1), there is no rationale or intelligible differentia to create a class of those who had purchased the land after vesting is complete, from those who purchased the land after declaration of the award or completion of acquisition proceeding, in as much as, right to receive compensation includes 'right to receive enhanced compensation'.
14. It was argued that the transfer after declaration of the award under Section 3G of the Act' 1956 would entitle the purchaser to claim higher amount of compensation by approaching the Arbitrator under Section 3G(5), by raising a dispute relating to the determination of amount of compensation by the competent authority under sub-section(1) of section 3G. The contention, thus, is that the Full Bench decision requires consideration from this angle.
15. Learned Advocate for the NHAI, however, seeks to support the stand of the original owners that after vesting of the land acquired under the National Highways Act under Section 3D(2) of the said Act, the subsequent purchaser does not fall within the meaning of expression " person interested", in as much as, the sale deed after vesting is void-ab-initio and no interest, not only right and title, could pass on or transferred by virtue of such a sale deed. Learned counsel for the National Highway Authority of India relied on the decisions of the Division Bench of this Court in Vipin Agarwal Vs. Union of India & another8 decided on 27.03.2018, Riyazuddin and another versus Union of India & others9 decided on 30.04.2018 to assert that the difference in the scheme of two Acts namely the Act,' 1894 and the Act' 1956 has not been considered by the Full Bench in the correct perspective. The issue, therefore, requires reconsideration, from the angle of the concept of vesting in the Scheme of the Act' 1956.
16. Sri Sanjeev Kumar Tyagi learned counsel appearing for the original tenure holders relied upon the decisions of the Apex Court in Murugan vs Kesava Gounder (Dead) Thr Lrs & others10 and Winston Tan & another Vs. Union of India & another11; to place the concept of void transaction. It was argued that a void transaction is a nullity from the very beginning, void ab initio and for avoiding the same no declaration is necessary, law does not take any notice of the same and it can be disregarded in collateral proceeding or otherwise. Reliance is placed on the judgement of the Apex Court V.Chandrasekaran & Anr vs Administrative Officer & Ors12 to assert that the vendor of the sale after issuance of acquisition notification is not vested with any title over the acquired land as the sale itself was void. The land once vested in the State, 'free from all encumbrances' cannot be divested. The purchaser cannot claim title/relief better than what the original vendor was entitled to.
17. In order to explain the concept of vesting, reliance has been placed on the decision in Fruit and Vegetable Merchant Union Vs. Delhi Improvement Trust13 and Sulochana Chandrakant Galande vs Pune Municipal Transport & Ors decided on 03.08.2010. It was urged that the meaning of word 'vesting' though varies as per the context of the statute in which the property vests, however, considering the provisions of Section 3D of the Act' 1956 or Sections 16 & 17 of the Act' 1894, the property acquired becomes the property of the Government without any condition or limitations either as to title or possession. The legislature has made it clear that vesting of the property is not for any limited purpose or limited duration. The terminology "free from all encumbrances" as is used in Section 16 & 17 of the Act' 1894 has been held to mean that it is wholly unqualified and would en-compass the extinguishing of "all rights, title and interests including easementary rights" when the title vests in the State. Thus phrases "free from encumbrances" means vesting of land in the State without any charge or burden in it and, thus, the State has absolute title/ownership over it. It was argued that once land vests in the State 'free from all encumbrances', there cannot be any rider on the power of the State in any manner. The submission is that with the concept of vesting, under the Act' 1894 as explained by the Apex Court, the acquired land which vests with the Central Government under Section 3D(2) of the Act' 1956, "free from all encumbrances" would not confer any right, title or interest in the acquired land. The subsequent transferee after vesting of the acquired land absolutely in the Central Government cannot be said to be entitled to claim compensation even on the basis of vendor's title. The submission is that the decisions relied by the Full Bench of this Court to hold that the subsequent trasnferee is entitled to claim compensation were all in respect of purchases made prior to the stage of vesting of the acquired land, i.e. at the stage of preliminary notification only notifying the proposal of acquisition. The contention is that the petitioner who is the original tenure holder is at a better footing, in as much as, the purchase, in the instant case, has not only been claimed after vesting of the acquired land in the Central Government with the publication of the declaration notification but the petitioner/original holders also claim that the sale deed is a result of fraud and fabrication.
18. It is further argued that, in any case, the Collector has no power to finally adjudicate upon the right to receive compensation and the dispute raised by the petitioner with regard to the validity of the sale deed, the basis of the claim of the subsequent transferee for disbursement of compensation, has to be referred to the Competent Civil Court. Reliance is placed on the decisions in The Collector of Bombay Vs. Nusserwanji Rattanji Mistri & others14; Dr. G.H. Grant Vs. State of Bihar15, Sharda Devi Vs. State of Bihar & another16 and the decision of the Apex Court in Meher Rusi Dalal Vs. Union of India17 to substantiate the above submissions and to assert the meaning of "persons interested" as indicated in the award passed by the Collector. It was argued that the award is only conclusive between the Collector and the persons interested and not among the persons interested.
19. Having heard learned counsel for the parties in three sets namely the original tenure holders, the subsequent transferee and the NHAI, i.e. the acquiring body and the Central Government and perused the record, we find that the statutory scheme of acquisition under the Act' 1956 and the Act' 1894 is to be gone into at the beginning. Under the scheme of the Act' 1894, the proposal for acquisition of land needed for any public purpose is to be published in accordance with the provisions of sub-section (1) of Section 4 and thereupon the designated officer may enter upon such land and survey, to dig or bore into sub soil, to do all such acts necessary to ascertain whether the land is adopted for such purpose and do all necessary acts to complete the survey.
20. Section 5-A provides for the opportunity to the person interested in any such land to make objection in writing to the Collector and the Collector is obliged to give an opportunity of being heard in person or to the authorized officer or pleader before taking decision on the objection of such person. The decision of the appropriate government on the recommendation of the Collector after hearing objection of the person interested is final.
21. The declaration of any land covered by the notification under Section 4(1) is published under Section 6. Sub-section (3) of Section 6 provides that the said declaration shall be conclusive evidence that the land is needed for the public purpose and after making such declaration, the appropriate government may acquire the land in the manner provided in the Act thereafter. Section 8 provides that the Collector shall thereupon cause the land to be marked out (unless it has been already marked out under Section 4) and also cause it to be measured and a plan to be made of the same.
22. Section 9 provides that the Collector shall then cause public notice to be given at convenient places or near the land to be taken, stating that the government intends to take possession of the land and that claims to compensation for all interest in such land may be made to him. In addition to the same, the Collector shall also serve notice to the same effect on the occupier (if any) of such land and all such persons known or believed to be interested therein, or to be entitled to act for persons so interested, as reside or have agents authorized to receive service on their behalf, within the revenue district in which the land is situate.
23. The enquiry and award to offer compensation to all persons claiming interest in such land after considering their objection to the notice given under Section 9 and measurement made under Section 8, is to be made by the Collector in accordance with the provisions of Section 11 of the Act' 1894.
24. Section 12 provides that after making an award, the Collector shall give immediate notice of his award to such of the persons interested as are not present personally or by their representatives when the award is made. After making an award under Section 11, the power to take possession has been conferred on the Collector under Section 16 which reads as under:-
"16 Power to take possession- When the Collector has made an award under Section 11, he may take possession of the land, which shall thereupon [vest absolutely in the [Government]], free from all encumbrances."
25. Section 17 provides for special powers of the appropriate government in cases of urgency and provide that though no award has been made, the Collector on expiration of 15 days from the publication of the notice mentioned in Section 9(1), can take possession of any land needed for a public purpose and such land shall thereupon vest absolutely in the government free from all encumbrances.
26. Section 18 of the Act' 1894 further confers right on any persons interested to make an application to the Collector requiring him to refer the matter for determination of the Court, on the objections in relation to the determination of compensation, and reads as under:-
"18 Reference to Court.
(1) Any person interested who has not accepted the award may, by written application to the Collector, require that the matter be referred by the Collector 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.
(2) The application shall state the grounds on which objection to the award is taken: Provided that every such application shall be made,
(a) if the person making it was present or represented before the Collector at the time when he made his award, within six weeks from the date of the Collector's award;
(b) in other cases, within six weeks of the receipt of the notice from the Collector under Section 12, sub-section (2), or within six months from the date of the Collector's award, whichever period shall first expire."
27. Under the scheme of the Act' 1956, the Central Government has been conferred with the power to acquire land for a public purpose for the building, maintenance, management or operation of a National Highway or part thereof. Section 3-A of the Act' 1956 provides for declaration of notification in the final Gazette by the Central Government, to declare its intention to acquire such land. Upon issuance of the notification under sub-section (1) of Section 3-A, the designated officer of the Central Government is authorize to make an inspection, survey, measurement, valuation, enquiry, take levels, dig or bore into sub-soil, set out boundaries and intended lines of work; and do such other acts or things as may be laid down by the rules made in this behalf. The procedure of making objection by the persons interested in such land and hearing on the same, decision thereon has been provided in Section 3-C. sub-section (3) of Section 3-C provides that the order of the competent authority, allowing or disallowing the objections under sub-section (2) shall be final.
28. The declaration notification is issued under Section 3-D and with the publication of the declaration under sub-section (1) thereof such land shall vest absolutely in the Central Government free from all encumbrances. Section 3-D relevant for our purpose is noted hereinunder:-
"3D. Declaration of acquisition.--
(1) Where no objection under sub-section (1) of section 3C has been made to the competent authority within the period specified therein or where the competent authority has disallowed the objection under sub-section (2) of that section, the competent authority shall, as soon as may be, submit a report accordingly to the Central Government and on receipt of such report, the Central Government shall declare, by notification in the Official Gazette, that the land should be acquired for the purpose or purposes mentioned in sub-section (1) of section 3A.
(2)On the publication of the declaration under sub-section (1), the land shall vest absolutely in the Central Government free from all encumbrances.
(3) Where in respect of any land, a notification has been published under sub-section (1) of section 3A for its acquisition but no declaration under sub-section (1) has been published within a period of one year from the date of publication of that notification, the said notification shall cease to have any effect: Provided that in computing the said period of one year, the period or periods during which any action or proceedings to be taken in pursuance of the notification issued under sub-section (1) of section 3A is stayed by an order of a Court shall be excluded.
(4) A declaration made by the Central Government under sub-section (1) shall not be called in question in any Court or by any other authority.]"
29. With the declaration under Section 3D and vesting of the land in the Central Government thereupon, the designated officer has a right to enter into the acquired land and do other acts necessary upon the land for carrying out the building, maintenance, management or operation of the National Highway or a part thereof, or any other work connected therewith.
30. The power to take possession, however, is governed by Section 3E which provides that with the vesting of the land in the Central Government, on the determination of the amount of compensation by the competent authority under Section 3G with respect to such land and deposit thereof under Sub-section (1) of Section 3H, with the competent authority by the Central Government, the competent authority be issue notice in writing directing the owner or any person in possession of such land to surrender or deliver possession thereof to the competent authority, or authorized person, within 60 days of service of notice. In case of refusal, forcible possession can be taken by taking appropriate steps in accordance with the provisions of sub-section (2) of Section 3E.
31. From the comparison of the scheme of the above noted two Acts, it is evident that the stage of vesting in the above two enactments is different. Under the National Highways Act' 1956 though vesting of the notified land is absolute with the declaration under Section 3D but dispossession of the land-owner or person in possession of such land, is differed till the determination of amount of compensation by the competent authority and deposit of the same in accordance with the provision of Section 3G read with sub-section (1) of Section 3H. However, right to enter into the land vested in the Central Government under Section 3D has been conferred by Section 3F, to do all necessary acts in relation to the building, maintenance, management or operation of National Highways or part thereof or any other work connected therewith.
32. The Act' 1894, however, provides two different stages for taking possession of the land and the vesting is absolute under the said Act only upon the possession being taken by the appropriate government. Under Section 16, the Collector is empowered to take possession of the land only after making an award under Section 11, whereas under Section 17, in case of urgency, the possession can be taken on the expiration of 15 days from the publication of the notice mentioned in Section 9. In both eventuality, however, with the taking of possession the land vests absolutely in the appropriate government and the divesting from the ownership of the State is not possible, as has been held by the Apex Court in the case of Satendra Prasad Jain Vs. State of U.P18 and has been clarified in a recent decision in Delhi Airtech Service Pvt. Ltd Vs. State of U.P. & another19.
33. As a consequence of vesting being absolute in the appropriate government, it was held by the Apex Court in the above noted decisions that the consequence of lapsing in respect of absolutely vested land cannot be occurred, in cases, where urgency clause under Section 17(1) is invoked and pre-requisite condition to tender mandatory payment of 80% of estimated compensation to the land owner is fulfilled. There is a difference of opinion about the position stated in Satendra Prasad Jain (supra) in the decision in Delhi Airtech Services (supra), about the mandatory requirement of pre-requisite condition under Section 3A of Section (17), but the said issue is not of concern to us.
34. The question before us is as to what would be the effect of absolute vesting of the acquired land, in cases, where the land owner/(land looser) alienate his right and interest in the land subsequent to the vesting of the same absolutely in the Central Government under the scheme of the Act' 1956 in view of sub-section (2) of Section 3D.
35. To examine this question, we are required to understand the concept of the word "vested"/"vests" as has been interpreted by the Courts. We find the decision of the Apex Court in Fruit and Vegetables Merchant Union (supra) placed by the learned counsel for the original tenure holders quite helpful. With reference to the decision in Lord Cranworth in Richardson v. Robertson20 at page '78-A' it was observed therein that the word "vests" has several meaning with reference to the context in which it is used. It was noted that:-
" ...The word 'vest' is a word, at least of ambiguous import. Prima facie 'vesting ' in possession is the more natural meaning. The, expressions 'investiture' -'clothing'-and whatever else be the explanation as to the origin of the word, point prima facie rather to the enjoyment than to the obtaining of a right.
36. In paragraph No.19 it was further noted that:-
"That the word "vest" is a word of variable import is shown by provisions of Indian statutes also. For example, s. 56 of the Provincial Insolvency Act (V of 1920) empowers the court at the time of the making of the order of adjudication or thereafter to appoint a receiver for the property of the insolvent and further provides that " such property shall thereupon vest in the receiver." The property vests in the receiver for the purpose of administering the estate of the insolvent for the payment of his debts after realising his assets. The property of the insolvent vests in the receiver not for all purposes but only for the purpose of the Insolvency Act and the receiver has no interest of his own in the property. On the other hand, ss. 16 and 17 of the Land Acquisition Act. (Act I of 1894), provide that the property so acquired, upon the happening of certain events, shall " vest absolutely in the Government free from all encumbrances'. In the cases contemplated by ss. 16 and 17 the property acquired becomes. the property of Government without any conditions or limitations either as to title or possession. The legislature has made it clear that the vesting of the property is not for any limited purpose or limited duration. It would thus appear that the word "vest" has not got a fixed connotation, meaning in all cases that the property is owned by the person or the autho- rity in whom it vests. It may vest in title, or it may vest in possession, or it may vest in a limited sense, as indicated in the context in which it may have been used in a particular piece of legislation. The provisions of the Improvement Act, particularly ss. 45 to 49 and 54 and 54A when they speak of a certain building or street or square or other land vesting in a municipality or other local body or in a trust, do not necessarily mean that ownership has passed to any of them."
37. In Municipal Corporation of Greater Bombay Vs. Hindustan Petroleum Corporation & others21 it was held that the word "vest" means vesting in title, vesting in possession or vesting in a limited sense, as indicated in the context in which it is used in a particular provision of the Act. With reference to Section 16 of the Act' 1894, it was held therein that the right, interest and title to the land holders in the land including the easmentary right, if any, stood extinguished and such right came to be vested in the State Government with the completion of the acquisition under the Land Acquisition Act.
38. In the National Textile Corp. Ltd vs Nareshkumar Badrikumar Jagad & others22 in the context of Textile Undertaking (Taking Over of Management) Act' 1983 it was held that though vesting is ordinarily understood as meaning having obtained absolute indefeasible right and of transfer or conveyance with possession, but in law "vesting" does not necessarily and always means possession but includes vesting of interest as well. "Vesting" may mean vesting in title, vesting in possession or vesting in a limited sense, as indicated in the context in which it is used in a particular provision of the Act. The word "vest" has different shades, taking colour from the context in which it is used.
39. In V. Chandrasekaran (supra) in the context of the right of the subsequent purchaser to challenge the acquisition proceedings under the Act' 1894, it was held that it is settled legal position that once the land is vested in the State, free from all encumbrances, it cannot be divested and proceedings under the Act would not lapse, even if an award is not made within the statutorily stipulated period. Once the land is acquired and it vests in the State, the land owner (land looser) becomes persona non-grata and he has a right to only receive compensation for the same, unless the acquisition proceedings is itself challenged. Noticing the concept of vesting in the context of the Act' 1894, it was further noted therein that the general rule of law undoubtedly is that no-one can transfer a better title than he himself possesses; Nemo dat quod non habet. Thus, the persons who purchase the land subsequent to a notification being issued under Section 4 of the Act cannot challenge the acquisition, the reason being that anyone who deals with the land subsequent to notification under Section 4, does so, at his own peril. The alienation does not bind the State or the beneficiaries under the acquisition. The purchaser may be a 'persons interested' in compensation, since he steps into the shoes of the erstwhile owner, he, therefore, merely claim compensation. A person who purchases land after the publication of Section 4 notification with respect to it is not entitled to challenge the proceedings for the reason that his title is void.
40. Thus, considering the concept of vesting in the context of the Act' 1894, as stated by the Apex Court in V. Chandrasekaran (supra), it may further be noted that in the scheme of the Act' 1894, the owner/land looser has a right to receive compensation for expropriation of his property in view of the Constitutional scheme of Article 300-A. Thus, it can be said that though vesting in the context of Section 11-A has been considered by the Apex Court in Delhi Airtech Services (supra) and it is held therein that the right of the land looser would be to enforce passing of award post dispossession and thus, to get adequately compensated in terms of Section 23 and 34 of the Act' 1894, but it cannot be argued that "vesting" in the context of the Act' 1894 or Section 3D (2) of the Act' 1956 would include vesting of interest in the land as well.
41. The vesting in the context of the Land Acquisition Act or the National Highways Act can only mean the vesting in title at the stage of Section 3D(2) of the Act' 1956 and vesting in title and possession, on transfer of possession in accordance with Section 16 or 17 of the Act' 1894.
42. It may further be noted that considering the meaning of vesting in the Fruit and Vegetables Merchant Union (supra), the Apex Court in Sulochna Chandrakant Galande (supra) has considered the meaning of "free from encumbrances" as occurred in Section 16 of the Act' 1894. The decision of the Apex Court in State of Himanchal Vs. Tarsem Singh & others23 has been considered to note the meaning assigned to the terminology "free from all encumbrances" used in Section 16 of the said Act. As noted in the foregoing paragraphs of this judgement, it was held therein that the said term wholly encompass the extinguishing of "all rights title and interest including easementary right" when the title vests in the State. The meaning of vesting of land in the State "free from all encumbrances" is that the State has absolute title/ownership over it without any charge or burden in it and there cannot be any rider on the power of the State to deal with the land or change the user in the manner it chooses. The said interpretation given to the meaning of the terminology "free from all encumbrances" as in Sulochna Chandrakant Galande (supra) cannot be considered to mean that all interest including the interest to receive compensation of the land owners/land looser stood extinguished, as any such interpretation would be antethesis to the basic concept of acquisition of private property and the Constitutional mandate under Article 300-A.
43. The submission of the learned counsel for the original tenure holders that after the declaration under Section 3D of the Act' 1956 being issued, the land having been vested absolutely in the Central Government and the land owner (land looser) has left with no right or title in the land though is correct, but it cannot be accepted that the land-owner even looses interest in the land in as much as, under the scheme of the Act' 1956, the land owner is entitled to retain possession of the acquired land, even after vesting under sub-section (2) of Section 3D, till the notice is issued in accordance with the provisions of sub-section (1) of Section 3E, after determination of compensation under Section 3G(1) and deposit of the same under sub-section (1) of Section 3H.
44. For the above, discussion, it is clear that the "vesting" under the Land Acquisition Act' 1894 is "with possession" whereas under Section 3D of 1956 Act, the "vesting" is "without possession".
45. The question, therefore, is the effect of transfer by the tenure holders, after vesting under Section 3D(1) is made absolute "even without dispossession" of the tenure holders.
46. Taking note of the scheme of 1956' Act under Section 3D, 3E and 3F, in a case where dispute was raised with regard to the notice calling upon the petitioners therein (land holders) to deliver possession of the land under Section 3E, the Delhi High Court in Purshottam Behl Vs. Union of India & others24 has considered the effect of vesting under Section 3D of the Act' 1956. It was held therein that the said provision only signifies acquisition of title in the land, leaving only the ministerial task of determination and deposit of compensation and taking over possession of the land, and otherwise does not vest possession of the land in the Central Government. The erstwhile owner/holders of the land, upon such vesting, is not left with any right or ownership or otherwise or any transferable title in the land, save right to remain in possession of the land, till determination and deposit of compensation but which right of possession also is subject to Section 3F of the Act' 1956. It was, thus, held that post-section 3D declaration, the acquisition of the land is concluded and, thereafter, acquisition cannot be challenged or lapsed on any ground and only taking over of possession of the land remains. This also follows from Section 3E of the Act' 1956, which empowers taking over of possession by issuance of 60 days notice and empowers forcible taking over of possession, only on the failure of the person in occupation/possession to so deliver possession.
47. It was observed therein that it, thus, follows that notwithstanding the vesting of the land in the Central Government on making of declaration under Section 3D of the Act' 1956, the possession of the land remains with whosoever may be in possession thereof and possession does not stand transferred to the Central Government. It was further observed that this interpretation also follows that Section 3F of the Act' 1956 empowers the Central Government, to notwithstanding possession of the land having not been taken, enter upon the land and do all acts, deeds and things thereon to fulfill the purpose of acquisition, without any limitation to carryout the building, maintenance, management or operation of National Highway or a part thereof (as is clear from the language of the said provision). Thus, on Section 3F powers being exercised, de-facto possession of the land would be of Central Government/National Highway Authority of India/any other person authorized, but dejure possession of the land remains with the erstwhile owner/holders of the land, till determination and deposit of compensation. It was, thus, held that any other interpretation of Section 3D of the Act' 1956 would make the provision of Section 3E of the Act' 1956 for taking over of possession and all Section 3F of the Act' 1956 empowering the Central Government to notwithstanding not being in possession, carryout the prescribed works over the land, otios.
48. Thus, under the scheme of the acquisition under the Act' 1956, the Central Government become entitled to take possession of the acquired land only on determination of compensation under Section 3G and deposit thereof with the competent authority under Section 3H(1) of the said Act.
49. Thus, what follows is that the land owner/tenure holders has a right to retain possession in law (dejure possession) over the acquired land and can resist his actual dispossession, in case there is non compliance of Section 3E(1), i.e. there is no determination of compensation by the competent authority under Section 3G with respect to the such land or the deposits required under Section 3H(1) has not been made with the competent authority.
50. It further follows from the above discussion that the transfer by sale deed executed after vesting of the land with the Central Government under Section 3D is void. No right, title or possession (in such land) could be transferred after vesting under Section 3D is complete as de-facto possession of the land is with the Central Government. The Central Government is also empowered to carry out the works of building, maintenance, management or operation of the National Highways or a part thereof, or any work connected therewith, without waiting for determination of the compensation amount.
51. The right to receive compensation of the land owner is his interest in the land which survives after vesting under Section 3D or dispossession under Section 3E, as he has a right to participate in the proceedings of determination of compensation by virtue of sub-section (3) and sub-section (4) of Section 3G and further to challenge the determination made by the competent authority before the Arbitrator under sub-section (5) of Section 3G. Section 3G(3) provides for publication of notice inviting the claims from "all persons interested in the land to be acquired". Sub-section (4) states that such notice shall require all persons interested in such land to appear in person or by an agent or by a legal practitioner before the competent authority, at a time and place to state the nature of their respective interest in such land.
52. It is observed by the Full Bench in case Sursati (supra) that the words used in sub-section (3) of Section 3G "all persons interested" and the land to be acquired, established that the land has not been acquired. The claim can be filed by all "persons interested". A person in whose favour a sale deed has been registered before announcement of award, will certainly fall in that category and further noted that despite the fact that the phrase "persons interested" has been used in the 1956' Act in a number of Sections but the same has not been defined therein. The meaning of expression "persons interested" under Section 3(b) of the 1894' Act and 3(x) of the Act' 2013 has been considered to draw analogy of the expression "person interested" as occurring in Section 3G of the Act' 1956. It was noted that the only difference between the Act' 1894 or 2013 Act providing for acquisition with the amendments brought in the 1894 Act and the 1956 Act is that two former statutes were/are general in nature providing for acquisition of land in general whereas under the 1956 Act, the acquisition was for specific purpose, namely for construction of national highways.
53. The Apex Court in Nagpur Improvement Trust (supra) has held that it is immaterial whether it is one Acquisition Act or another Acquisition Act under which the land is acquired. If the existence of two Acts could enable the State to give one owner different treatment from other equally situated, the owner who is discriminated against, can claim the protection of Article 14 of the Constitution. This principle has been taken note of by the Tarsem singh (supra) to hold that the principle contained in Nagpur improvement Trust as also the notification issued by the Central Government under 2013 Act would similarly place land owners whose lands are acquired under the Act' 1956. The principle of solatium and interest payable under the Land Acquisition Act (2013 Act) would apply to acquisition which takes under the National Highways Act. The provision of Section 3-J of the Act' 1956 to that extent, was held violative of Article 14 of the Constitution of India and has been declared to be unconstitutional.
54. The Full Bench, thus, held that the Act' 1894, 2013' Act and 1956' Act being pari materia, the meaning of "person interested" in 1894 Act and 2013 Act would have to be borrowed for the expression "person interested" used in Section 3G(3) and (4) of the Act' 1956.
55. In a long line of decisions of the Apex Court noted above, it is held that the purchaser is a "person interested" in the compensation, since he steps into the shoes of the erstwhile owner and is entitle to claim compensation. The expression "person interested" includes all persons claiming an interest in compensation to be made on account of the acquisition of the land under the Land Acquisition Act, as defined under Section 3(b), of 1894' Act. Section 3(x) provides an exhaustive definition of "person interested" including all persons claiming interest in compensation on account of acquisition of land.
56. There remains no doubt, thus, that the transferee of a land acquired under the National Highways Act is a "person interested" in the claim of compensation and has a right to put his claim in such lands before the competent authority on receipt of the notice by the land owners or himself to put-forth his claim, i.e. his respective interest in such lands. He also has a right to contest the determination made by the competent authority by moving an application for appointment of Arbitrator under Section 3G(5), that means he will have a right to receive higher compensation, if determined by the Arbitrator and to take up the issue relating to determination of compensation by initiating further proceedings under the Arbitration and Conciliation Act' 1956 which is applicable to the proceedings to be conducted by the Arbitrator appointed by the Central Government in view of the sub-section (6) of Section 3G.
57. The only issue left for consideration is as to whether the right to receive compensation at the market value on the dates of the relevant notifications accrued to the land owners of acquisition, is transferable.
58. It is held in a decision of the Apex Court in Laxmi Kant Jha Vs. Commissioner of Wealth Tax Bihar & others25, a case under the Wealth Tax' 1957, the right to receive compensation in respective of the Zamindari estate which was acquired by the government under the Bihar Land Reforms Act' 1950, is property and constitute an asset for the purpose of that taxing statute.
59. A question came up for consideration before the Apex Court in Mrs. Khorshed Shapoor Chenai etc. vs. Assistant Controller, Estate Duty26 that after compensation had been awarded by the Collector under Section 11 of the Act' 1894, filing of reference under Section 18 of the 1894' Act or appeal before the High Court challenging the determination, would be mere exercise of a right to sue for further compensation, i.e. a mere hope or a chance that the compensation might be enhanced and that such hope or chance could not be elevated to the status of an asset or property and as such no asset or property chargeable to estate duty could be said to have escaped assessment.
60. In the context of the Land Acquisition Act' 1894, it was argued therein that no sooner the Collector made his award determining the amount of compensation payable to the claimants under Section 11 of the Act' 1894, the right to receive compensation must be regarded as having merged in the award, the determination having been made by a statutory public official, and what the claimants would be left with thereafter was merely a right to agitate the correctness of such determination, and this right to claim further compensation cannot be said to be a separate or different right independent of "the right to receive compensation". Rejecting the said argument, it was held therein that there are no two separate rights, (i) a right to receive compensation and another a right to receive extra or further compensation. Upon acquisition of his land under the Land Acquisition Act, the claimant has only one right, which is to receive compensation for the land at the market value on the date of relevant notification and it is this right which is quantified by the Collector under Section 11. It is impossible to accept that no sooner the Collector has made his award under Section 11, the right to receive compensation is destroyed or ceases to exists or is merged in the award, or what is left with the claimant is a mere right to litigate in the correctness of the award. The contention that the right to agitate the correctness of such determination or the right to claim further compensation is a mere right to litigate or sue has been turned down by holding that the claimants can litigate the correctness of the award because his right to compensation is not fully redeemed but remains alive which he prosecutes in further proceedings.
61. Further question before us as to whether the 'right to receive extra compensation' which is included in the 'right to receive compensation' of a land holders can be transferred after declaration of the award under Section 3G of the Act' 1956. This is necessary to examine as to whether the Full Bench decision in holding that the purchasers who purchase the land after determination of compensation under Section 3G of 1956' Act could not be included in the definition of word "persons interested" as he purchased the land after the entire proceedings has been concluded and the lands stood vested with the government, requires reconsideration.
62. The Full Bench has held that such a purchaser has no right to claim compensation from the competent authority and he may have remedy under Common laws to claim damages or the sale consideration paid by him to the vendors, as the transaction is void-ab-initio. This part of the decision of the Full Bench is placed before us to submit that the said part requires reconsideration for recognition of the right to receive compensation as property in view of the above noted decision of the Apex Court. If a land holders can transfer his interest in the land, i.e. the "right to receive compensation", he would have a right to transfer his further interest, i.e. the "right to receive extra compensation", after determination of the amount of compensation by the competent authority. The contention is that subsequent transferee who purchases the right to receive extra compensation after determination of amount by the competent authority is to be included in the definition of the word "person interested" within the meaning of Section 3G of the Act' 1956, in as much as, the tenure holder being aggrieved by the determination made by the competent authority has a right to challenge the same before the Arbitrator and, as such, a "right to receive extra compensation", which being a part of right to receive compensation, recognized as property, can be transferred. The subsequent purchaser, thus, has a right to pursue the claim to receive higher compensation before the Arbitrator, in case the application is moved by the land owner aggrieved by the determination made by the competent authority or he himself would have a right to move application claiming higher compensation by invoking the provisions of sub-section (5) of Section 3G of the Act' 1956.
63. To answer this contention, we would be required to have another look to the scheme of the determination of compensation and dispossession under the Act' 1956 after the declaration under Section 3D, as noted above in detail. Sub-section (1) of Section 3G provides for payment of an amount as compensation with respect to the land acquired under the said Act, which shall be determined by an order of the competent authority. The mode and manner of determination of compensation has been provided in sub-section (3) and sub-section (4) of Section 3-G. Section 3-I empowers the competent authority to exercise certain powers of the Civil Court in respect of the proceeding to be conducted by it under sub-section 3G for the purposes of the Act. Sub-section (5) of Section 3G provides remedy against the determination made by the competent authority and states that if the amount determined by the competent authority under sub-section (1) is not acceptable to either of the parties, on an application by either of the parties, the amount shall be determined by the Arbitrator to be appointed by the Central Government. To challenge the order of appointment of Arbitrator, the recourse has to be taken to the provisions of the Arbitration and Conciliation Act' 1996 (hereinafter referred as Act' 1996), by moving an application before the competent Court under Section 34 of the Act' 1996.
64. This means that the determination of amount payable as compensation by the competent authority under sub-section (1) of sub-section (2) is not final, as it is made subject to the decision of the Arbitrator appointed by the Central Government, in case, of any dispute relating to determination raised by any of the parties. The parties herein means the parties to the proceedings before the competent authority namely the "persons interested" and the beneficiaries namely the National Highway Authority.
65. We can take judicial notice of the fact that we have come across many cases where on determination of compensation by the competent authority under Section 3G(1), dispute has been raised by the National Highway Authority about the determination and the matter has been referred to the Arbitrator.
66. Section 3H which pertains to deposit and payment of amount determined as compensation provides that the amount determined under Section 3G shall be deposited by the Central Government in such manner as may be laid down by rules made in this behalf by that government, with the competent authority before taking possession of the land. As noted above, power to take possession by issuing notice calling the owner and person in possession of the acquired land, asking him to surrender or deliver possession, can be exercised by the Central Government only on determination of the amount by the competent authority under Section 3G and deposit of the same under sub-section (1) of Section 3H. Forcible possession can be taken in case of refusal by the person to surrender or deliver possession.
67. This brings us to the position that if the amount determined by the competent authority under sub-section (1) is not acceptable to the acquiring body namely National Highway Authority of India under the Act' 1956, it may refuse to deposit the same, as mandated by Section 3E(1). We may take judicial notice of the fact that the determination by the Arbitrator sometime take a longer time than expected. Further no time period has been provided for determination under sub-section (5) of Section 3G by the Arbitrator, in case of dispute about the determination, raised before it.
68. As noted above, by virtue of Section 3D, 3E, 3F, upon vesting of the land with the Central Government, the possession of the tenure holders is de-jure and defacto possession of the acquired land is with the Central Government, as it has right to enter into the land in accordance with the provision of Section 3F. The result would be that the tenure holders has been deprived of his right to deal with his land in any manner with the vesting of the ownership/title in the Central Government, though he is in de-jure possession of the acquired land. The tenure holders also cannot utilize his land in case the Central Government enters into it for doing acts necessary for carrying out the work related to the construction of the National Highway. The tenure holders, however, would be deprived of his right to receive compensation timely, because of the dispute raised by the National Highway Authority before the Arbitrator as the amount determined by the competent authority under sub-section (1) of Section 3G is not acceptable to it. Faced with this situation, the anxiety of the tenure holders whose land has been acquired, to deal with it, cannot be ignored. The result is that in many cases before us, the tenure holders have executed sale deeds after the determination of compensation by the competent authority under Section 3G(1).
69. In Khorshed Shapoor Chenai etc. Vs. Assistant Controller of Estate Duty, AP. Etc27, it is held that the right to receive compensation for the lands acquired by the Government, at their market value at the date of the acquisition, is one and indivisible right. There is no right to 'receive compensation' and a separate right to receive 'extra compensation'. The only right is to receive the compensation for the lands acquired by the Government, which is the fair market value on the date of acquisition.
70. At this stage, it may be noted that under the scheme of the Act' 1894, the compensation determined by the Collector under Section 11 of the Act' 1894 by fixing the market value of the land, guided by the provisions of Section 23 and 24 of the Act, is nothing more than an offer for compensation made by the government to the claimants whose property is acquired. (Reference Privy Council decisions in Ezra v. Secretary of State for India28 and the decision of the Apex Court in Raja Harish Chandra v. Dy. Land Requisition Officer29 and Dr. G. H. Grant v. State of Bihar30.
71. Under the Act' 1894, the award made by the Collector is final and conclusive between the Collector and "persons interested" in the land, irrespective of the fact that they appeared before the Collector, of the market value of the property. The right to challenge the determination made by the Collector under Section 11 is only with the "person interested" as defined under Section 3(b), who has not accepted the award by making a written application to the Collector, in accordance with the provision of Section 18 of the Act' 1894. It is equally well settled that the government cannot challenge the determination made by the Collector, i.e. award passed by it under Section 11 which is nothing but an offer given by the government for deprivation of the land of a tenure holder.
72. The proviso of sub-section (1) of Section 11 takes care of concern of the government for any infirmity in making award by the Collector under sub-section (1), as no award can be made by the Collector without previous approval of the appropriate government. There the finality attached to the determination made, i.e. the award passed by the Collector under Section 12 addresses the concern of the landholders who has a choice either to accept the award or to challenge the same in a reference under Section 18.
73. It is held in Khorshed Shapoor (supra) that if the offer is acquiesced in by total acceptance, the right to receive compensation will not survive but if the offer is not accepted or is accepted under protest and a reference is sought by the claimant under Section 18, the right to receive compensation must be regarded as having survived and kept alive which the claimant prosecutes in Civil Court. It is held that :-
"It is impossible to accept the contention that no sooner the Collector has made his award under s.11 the right to compensation is destroyed or ceases to exist or is merged in the award, or what is left with the claimant is a mere right to litigate the correctness of the award. The claimant can litigate the correctness of the award because his right to compensation is not fully redeemed but remains alive which he prosecutes in Civil Court."
74. Under the scheme of the Act 1894, the government is not a "person interested" within the definition of Section 3B as is held by the Apex Court in the The Collector of Bombay (supra).
75. However, the position is not the same in the matter of determination by the competent authority under Section 3G(1). No finality has not been attached either to the determination made by the competent authority or by the Arbitrator under Section 3G(1) and 5 of the Act' 1956. The dispute can further be raised in the proceedings drawn under the Arbitration and Conciliation Act before the Civil Court under Section 34 and in appeal under Section 37 of the Act' 1996. And in all such proceedings, the amount determined by the competent authority is not paid to the tenure holders.
76. Before the Division Bench of this Court in Soran Singh Vs. Collector & others31, in a land acquisition appeal under the Act' 1894, an issue had arisen as to whether the Reference Court was correct and justified in rejecting reference under Section 18 of the 1894' Act on the ground that the applicant therein seeking reference, being a subsequent transferee, cannot maintain a reference for enhancement of compensation, as the sale deed is nothing but transfer of a right to sue and not property and further whether right to receive compensation including right to seek enhancement of compensation is a transfer of property or a mere transfer or right to sue", in the light of relevant provisions of the Transfer of Property Act, 1882 (hereinafter referred to as "Act, 1882). Taking note of the provisions of Section 6(e) of the Act' 1882 in light of the decision of the Apex Court in Khorshed Shapoor (supra) as also the earlier decision in Laxmi Kant Jha (supra), U.P. Avas Evam Vikas Parishad vs. Kanak and others32, it was noted therein that right to receive compensation must be regarded as having survived and kept alive, which the claimant prosecutes in Civil Court.
77. In an earlier Division Bench in U.P. Avas Vikas Parishad (supra) it has been held that the sale deeds whereby the claimants therein have acquired property rights in the land acquired and the right to receive compensation did not envisage transfer of mere right to sue. Transfer of property in the acquired land is not of champertous nature, hit by the provisions of Section 6 of the Transfer of Property Act and Section 23 of the Indian Contract Act." The said Division Bench has been relied in Soran Singh (supra). Another earlier Division Bench in Agra Development Authority vs. State of U.P. 2004 (3) AWC 2195 wherein it was held that transferees of original claimants have no right to get compensation as a mere right to sue cannot be transferred, has been distinguished, being against the binding authority of the Apex Court decision in Khorshed Shapoor (supra) and Division Bench judgement in U.P. Avas Evam Vikas Parishad (supra), which were not noticed by the Division Bench in Agra Development Authority (supra) though it was a much subsequent adjudication to the aforesaid decisions.
78. It was noted in Soran Singh (supra) that the issue stands covered by the Apex Court decision which is binding on the Division Bench decided later.
79. In another Division Bench in Fruit Corporation of India Vs. Kailash Chand & others33, taking note of various decisions of the Apex Court (noted above), it was observed that the transferee of a land after issuance of notification under Section 4(1) steps into the shoes of the owner and is entitled to claim compensation.
80. It was, thus, finally held in Soran Singh (supra) that since a subsequent transferee has not only 'right to receive compensation' but 'right to seek extra compensation' and 'right to receive compensation' is 'right to property' assignable under Section 6 of the Act' 1882, the sale-deeds executed by erstwhile owners to subsequent transferee may not create any encumbrance on acquired land but would be valid so as to transfer of right to claim compensation, from erstwhile land owners to subsequent purchasers. The same principle stated by a Division Bench of this Court in Jal Sansthan, Agra Vs. Smt. Krishna Kumari34 decided previously was quoted in the said decision. The rejection of reference by the Court concerned on the ground that the right to claim extra compensation could not have been transferred by erstwhile owner to the appellant therein as it amounts to mere right to sue, was held unsustainable. While answering the question in favour of the appellants therein, setting aside the judgement of the reference Court, the matter was remanded back for adjudication on merits.
81. From the above noted long line of decisions beginning from the year 1980 of the Apex Court to the year 2018 of the Division Bench of this Court, it is evident that a tenure holder who does not acquiesce in by total acceptance of the award passed by the Collector, by not accepting it or accepting it under protest, is entitled to claim higher compensation and on sale deed executed by him, the subsequent transferee will also have a right to seek higher compensation by moving a reference under Section 18 of the Act' 1894. The stage at which the sale deed is executed by the erstwhile owner/land holders, i.e. whether the sale deed is executed prior to making of award by the Collector or thereafter, is immaterial. The relevant is that the erstwhile owner/land looser did not acquiesce with the award passed by the Collector.
82. When the above legal position is considered in the light of the scheme of the determination of compensation under the Act' 1956 under Section 3G(5), the erstwhile owner/land holders has a right to move an application for determination by the Arbitrator to be appointed by the Central Government, in case, the amount determined by the competent authority under sub-section (1) is not acceptable to him. There is no embargo in moving an application under Section 3G(5) by a tenure holders/erstwhile owner, who has received the amount determined by the competent authority under Section 3H(1) under protest and moved application for determination of higher compensation. Even otherwise, under the scheme of the Act' 1956, as against the scheme of the Act' 1894, the amount determined by the competent authority under sub-section (1) of Section 3G is not final and is subject to further determination by the Arbitrator appointed by the Central Government, on a challenge made by any of the parties namely the tenure holders or the acquiring authority namely the National Highway Authority. In such situation, even if the amount determined by the competent authority under sub-section (1) of Section 3G is received by the tenure holders, he is entitled to raise a protest about the determination by putting a caveat at the time of receipt that the determination made by the competent authority was not just and fair and, therefore, is not acceptable to him. The question of acquiescence with the determination made by the competent authority under Section 3H(1), thus, would not arise.
83. Having considered the above scheme and the effect of determination of compensation by the competent authority under Section 3G of the Act' 1956, we may note that we find it difficult to accept the conclusion drawn by the Full Bench that the transferee who has purchased the land after determination of compensation under Section 3G of the Act' 1956, cannot be included in the definition of the words "person interested", as he had purchased the land when the entire proceedings had been concluded and the land was vested with the government. He has no right to claim compensation from the government/competent authority. Such a person only have remedy under Common laws to claim damages or the sale consideration paid by him to the vendors as the transaction is void-ab-initio.
84. In our considered opinion, this observations of the Full Bench while answering Question No.1B in negative, has wide ramifications, in as much as, a subsequent transferee who has paid valuation of the land to the erstwhile owner, which the tenure holder was otherwise entitled to as a right to receive compensation, is entitled to claim higher compensation by moving an application before the Arbitrator under Section 3G(5) against the determination made by the competent authority under Section 3H(1). The word "person interested" as used in sub-section (3) and (4) of Section 3G is the tenure holder interested in the determination made by the competent authority under sub-section (1) or the Arbitrator within the meaning of sub-section (5). The transferee of the tenure holder cannot be excluded from the meaning of the expression "parties" under sub-section (5) of Section 3-G from raising a dispute with regard to the determination after transfer by the original tenure holder. The only exclusion could be of those subsequent purchaser, who had got the sale deed from the land owner after he has received compensation determined by the competent authority under sub-section (1) of Section 3G, without raising any protest or, in other words, the tenure holders/erstwhile owner is acquiesced in by total acceptance of the amount determined by the competent authority, resulting in frustration of right to receive compensation, which would not survive thereafter. The erstwhile owner, in such situation, cannot litigate the correctness of the determination made by the competent authority because his right to compensation is fully redeemed by total acceptance of the amount determined as compensation. He cannot prosecute further either before the Arbitrator or in the Civil Court in accordance with the provision of the Act' 1996. The subsequent purchaser who stepped into the shoes of the erstwhile owner/land owner cannot have a better claim than that of his vendor.
85. Further, the 'right to receive compensation' has been recognized as 'right to property' and the transfer of 'right to receive compensation' or 'right to receive extra compensation' is not hit by Section 6(e) of the Act' 1882 as a mere right to sue, rather it is an actionable claim which is transferable and, as such, the transaction though may not confer right on the subsequent purchaser to challenge the acquisition proceedings, but it is not void-ab-initio in so far as the exercise of right to receive compensation which includes right to receive extra compensation. Saying that the subsequent transferee will only have a right to claim damages under Common laws after the determination of compensation under Section 3G of the Act' 1956 and the transaction would be void-ab-initio after such determination, in our considered opinion, would be contrary to the law laid down by the Apex Court discussed above.
86. For all angles discussed above, the arguments of the learned counsels for the original tenure holders/erstwhile owner that the subsequent transferee after publication of the notification under Section 3D of the Act' 1956 shall not be entitled to receive compensation, as a result of vesting of the land with the Central Government by virtue of sub-section (2) of Section 3D, are liable to be turned down. The doubt raised about the answer to Question No.1A by the Full Bench is accordingly, not entertainable.
87. However, the answer to Question No.1B having wide ramifications, in our considered opinion, requires reconsideration.
88. We, therefore, deem it fit and proper to place the matter before Hon'ble the Chief Justice for making a reference to consider the matter by constituting a Larger Bench. The questions, in our opinion, for consideration by the Larger Bench would be:-
(i) Whether with the determination of compensation under Section 3G by the competent authority under sub-section (1) or the Arbitrator under sub-section (5), the proceedings in relation to the determination of compensation can be said to have been concluded, when no finality has been attached to either the determination made by the competent authority or the Arbitrator, under the scheme of the Act' 1956?
(ii) Whether the subsequent transferee after determination of compensation by the competent authority under Section 3G of the Act' 1956 would be included in the expression "persons interested" or "parties" under Section 3G of the Act' 1956, so as to claim higher compensation before the Arbitrator, in case, the erstwhile owner/tenure holders has not been acquiesced with the determination made by the competent authority under Section 3H(1)?
(iii) Whether the subsequent purchaser will only have a right under common laws to claim damages for the sale consideration paid by him to the vendors for the transaction being void-ab-initio, when the 'right to compensation' has been recognized as a right akin to property and the transfer by the erstwhile owner/tenure holders is not hit by Section 6(e) of the Act' 1882, and the right to receive compensation and right to receive extra compensation has been held to be one and indivisible right?
89. Lastly, in the matter of disbursement of compensation, it may be noted that in case of any dispute as to the apportionment of the amount or any part thereof to any person, the competent authority is required to refer the dispute to the Principal Civil Court of original jurisdiction within whose jurisdiction the land acquired is situate. Where there are more than one claimants in the amount deposited under sub-section (1) of Section 3H, the competent authority can determine the persons which in its opinion are entitled to receive the amount payable to each of them. However, in case of any dispute about the entitlement to receive compensation, the competent authority shall be under obligation to refer the dispute to the civil Court. The reason being that the disputed questions of fact which would require evidence of the contesting parties, cannot be determined by exercising limited powers of the Civil Court conferred on the competent authority by virtue of Section 3-I of the Act' 1956.
90. In the present bunch of the writ petitions, the dispute has been raised by the original tenure holders that the persons who moved application before the competent authority for disbursement of compensation, got the sale deed executed by illegal means or the sale deed was a result of fraud and forgery or coercion on the part of the transferee. They claim that the subsequent transferee has no right to receive compensation as the sale deed is not a genuine and legally accepted document. In such a situation, a caution is added to the competent authority, to exercise its power strictly in accordance with Section 3H(3) and (4) of the Act' 1956, in the matter of disbursement of compensation on the claim of the subsequent transferee based on the sale deed. In case, the vendor raises an objection to the validity of the sale deed, the matter is required to be referred to the Civil Court. Even in case where any doubt arises in the mind of the competent authority about the validity of the sale deed and where the original tenure holder/erstwhile owner does not come forward to give his No-objection, the subsequent transferee may be relegated to approach the Civil Court seeking appropriate relief for payment of compensation based on the transfer in their favour as in such a situation, the validity or the correctness of the sale deed is to be ascertained by the competent Court before issuing any such direction. Only in cases where the notice is given to the vendor and he comes forward and gives his consent for payment of compensation to the subsequent transferee, such transferree would have a right to receive compensation from the competent authority even after publication of the notification under Section 3D of the Act' 1956, on the strength of his vendor's title.
91. In the crux, in case of any dispute in relation to the correctness/genuineness/validity of the sale deed, the subsequent transferee will not be able to receive compensation from the competent authority and his right to receive compensation can only be determined by the Civil Court.
(A) With the above observations, the original tenure holders in this bunch are given liberty to raise a dispute before the competent authority about the validity of the sale deeds and on such dispute being raised, reference may be made to the Civil Court under Section 3H(4) of the Act' 1956.
(B) The writ petitions filed by the subsequent transferees seeking payment of compensation on the basis of the sale deeds executed after publication of the notification under Section 3D of the Act' 1956, are also disposed of in light of the answer to Question No.1A by the Full Bench that their right to receive compensation shall be subject to notice to the vendor and his NO-Objection.
It is, however, clarified that in case of any objection of the original tenure holder or if the notice could not be delivered on the address given by the subsequent transferee, the competent authority will have to be refer the subsequent transferee to approach the Civil Court.
(C) With regard to the third category, i.e. the subsequent trasnferees in whose favour the sale deed had been executed by the erstwhile owner after determination of compensation under Section 3G of the Act' 1956, their claim is subject to the answer by the Larger Bench on the reference made above.
92. It is further clarified that the above noted third category of claimants shall not be entitled to receive compensation from the competent authority or the government, till the issue is decided by the Larger Bench.
93. Subject to the above observations and directions, all the writ petitions in this bunch are disposed of, leaving it open for the subsequent transferee of the land after determination of the compensation under Section 3G of the Act' 1956, to initiate a fresh round of claim depending upon the answer of the Larger Bench.
(Vipin Chandra Dixit,J.) (Sunita Agarwal, J.)
Order Date:-07.04.2023
Himanshu