# PEERAPPA HANMANTHA HARIJAN (D) BY LRS. & ORS v. STATE OF KARNATAKA&ANR

- **Citation:** [2015] 9 S.C.R. 498
- **Court:** Supreme Court of India
- **Decided:** 2015
- **Case number:** Civil Appeal No. 5804 of2015
- **Bench:** V. Gopala Gowda, C. Nagappan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/peerappa-hanmantha-harijan-d-by-lrs-ors-v-state-of-karnataka-anr-31271
- **Pages:** 54

## Headnote

Land Acquisition - Acquisition of land by State - Under
c s.28(1) and (4) of Karnataka Industrial Area Development
Act- For the purpose of industrial development by Industrial
Area Development Board - Land was further allotted by the
Board to the appellant-Company on lease - Compensation
awarded to the land owners and further enhanced by the
D Reference Court - Writ petition by the allottee-Company
challenging the correctness of the award, taking the plea that
they being beneficiary of the acquisition, were the 'person
interested' and hence were the necessary party to the
reference proceedings - High Court setting aside the order
E of Reference Court, directed it to afford opportunity of hearing
to the Company- On appeal, held: In view of the clauses of
the lease agreement along with the provision in s.32(2) of
the Kamataka Industrial Area Development Act (KIAD Act)
and Regulations of Kamataka Industrial Area Development
F Board Regulations, it is clear that the Company is only the
lessee by way of allotment - Thus, the Company is neither
the beneficiary nor the 'person interested' in terms of s. 2(ii)
of the KIAD Act or uls.3(b)of Land Acquisition Act- Therefore,
G the claim of the Company to participate in the proceedings
for determination of the market value of the acquired land
and award of compensation is untenable in law- In view of
the provision in s. 54 of Land Acquisition Act also the
Company does not have right to file the writ petition - The
.H
498
PEERAPPAHANMANTHAHARIJAN (D) BYLRS. v. STATE499
OF KARNATAKA
writ petition filed by the Company was not maintainable in A
law - Kamataka Industrial Area Development Act, 1966 -
ss.2(11), 28 and 32(2) -
Karnataka Industrial Area
Development Board Regulations, 1969 - Reg.4, 7, 10(b),
(c) and (d) - Land Acquisition Act, 1894 - ss.3(b), 9, 20(b)
and54.
a
Land Acquisition Act, 1894- s.3(f)(viii) (as amended by
the Kamataka Legislature by Act No.17 of61) and s.50(1) &
(2) - Applicability of - To the acquisition of land under the
provisions of Kamataka Industrial Area Development Act,
C
1966 - Held: s.3(f)(viii) is not applicable to the acquisition
under 1966 Act - Kamataka Industrial Area Development
Act, 1966.
Land Acquisition - Compensation - Determination of - o
Acquisition of non-agricultural land -
Under s. 28 of
Kamataka Industrial Area Development Act, 1966 - For the
purpose of industrial development- Land further teased out
to a Company for the purpose of extracting sand-stone from
the land which was used as raw material for manufacture of E
cement and for providing infrastructure of the Company -
Competent authority awarded compensation fixing the
market value of the acquired land at Rs. 17001- per acre
a/ongwith other statutory benefits - Reference Court
enhanc;ed the compensation to Rs. 1, 37, 0001- per acre after F
redetermining the market value of the land - The High Court
upheld the determination by Reference Court - On appeal,
held: In the facts and circumstances of the case, it would be
just and proper to fix the compensation at Rs. 1, 92, 0001- per
acre with all statutory benefits from the date of taking G
possession of the land till the date of payment of
compensation - The land-owners are also entitled to costs
throughout as provided uls. 27 of Land Acquisition Act- Land
Acquisition Act, 1894 - ss. 27, 23(2), 23 (1-A) and 28 -
H
500
SUPREME COURT REPORTS
(2015) 9 S.C.R.
A Kamataka Industrial Area Development Act, 1966 - s. 28.
Land Acquisition - Land acquired - Market value of -
Determination -
Criteria for -
Held: The criteria for
determining the market value of the acquired land has to be
B by taking into consideration that the land has been put to
uses to which it is reasonably capable of being put to in the
future.
c
D
Words & Phrases :
'Person interested' - Meaning of, in the context of Land
Acquisition Act and Kamataka Industrial Area Development
Act, 1966.
Disposing of the appeals, the Court
HELD: 1.1 The provisions of the Karnataka Industrial
Area De

## Text

_Characters 0–39,804 of 101,760. This is a partial read: ask again with offset=39804 for what follows._

(2015] 9 S.C.R. 498
A
PEERAPPA HANMANTHA HARIJAN (D) BY LRS. & ORS.
B
v.
STATE OF KARNATAKA&ANR.
(Civil Appeal No. 5804 of2015 etc.)
JULY30, 2015
[V. GOPALA GOWDA AND C. NAGAPPAN, JJ.]
Land Acquisition - Acquisition of land by State - Under
c s.28(1) and (4) of Karnataka Industrial Area Development
Act- For the purpose of industrial development by Industrial
Area Development Board - Land was further allotted by the
Board to the appellant-Company on lease - Compensation
awarded to the land owners and further enhanced by the
D Reference Court - Writ petition by the allottee-Company
challenging the correctness of the award, taking the plea that
they being beneficiary of the acquisition, were the 'person
interested' and hence were the necessary party to the
reference proceedings - High Court setting aside the order
E of Reference Court, directed it to afford opportunity of hearing
to the Company- On appeal, held: In view of the clauses of
the lease agreement along with the provision in s.32(2) of
the Kamataka Industrial Area Development Act (KIAD Act)
and Regulations of Kamataka Industrial Area Development
F Board Regulations, it is clear that the Company is only the
lessee by way of allotment - Thus, the Company is neither
the beneficiary nor the 'person interested' in terms of s. 2(ii)
of the KIAD Act or uls.3(b)of Land Acquisition Act- Therefore,
G the claim of the Company to participate in the proceedings
for determination of the market value of the acquired land
and award of compensation is untenable in law- In view of
the provision in s. 54 of Land Acquisition Act also the
Company does not have right to file the writ petition - The
.H
498
PEERAPPAHANMANTHAHARIJAN (D) BYLRS. v. STATE499
OF KARNATAKA
writ petition filed by the Company was not maintainable in A
law - Kamataka Industrial Area Development Act, 1966 -
ss.2(11), 28 and 32(2) -
Karnataka Industrial Area
Development Board Regulations, 1969 - Reg.4, 7, 10(b),
(c) and (d) - Land Acquisition Act, 1894 - ss.3(b), 9, 20(b)
and54.
a
Land Acquisition Act, 1894- s.3(f)(viii) (as amended by
the Kamataka Legislature by Act No.17 of61) and s.50(1) &
(2) - Applicability of - To the acquisition of land under the
provisions of Kamataka Industrial Area Development Act,
C
1966 - Held: s.3(f)(viii) is not applicable to the acquisition
under 1966 Act - Kamataka Industrial Area Development
Act, 1966.
Land Acquisition - Compensation - Determination of - o
Acquisition of non-agricultural land -
Under s. 28 of
Kamataka Industrial Area Development Act, 1966 - For the
purpose of industrial development- Land further teased out
to a Company for the purpose of extracting sand-stone from
the land which was used as raw material for manufacture of E
cement and for providing infrastructure of the Company -
Competent authority awarded compensation fixing the
market value of the acquired land at Rs. 17001- per acre
a/ongwith other statutory benefits - Reference Court
enhanc;ed the compensation to Rs. 1, 37, 0001- per acre after F
redetermining the market value of the land - The High Court
upheld the determination by Reference Court - On appeal,
held: In the facts and circumstances of the case, it would be
just and proper to fix the compensation at Rs. 1, 92, 0001- per
acre with all statutory benefits from the date of taking G
possession of the land till the date of payment of
compensation - The land-owners are also entitled to costs
throughout as provided uls. 27 of Land Acquisition Act- Land
Acquisition Act, 1894 - ss. 27, 23(2), 23 (1-A) and 28 -
H
500
SUPREME COURT REPORTS
(2015) 9 S.C.R.
A Kamataka Industrial Area Development Act, 1966 - s. 28.
Land Acquisition - Land acquired - Market value of -
Determination -
Criteria for -
Held: The criteria for
determining the market value of the acquired land has to be
B by taking into consideration that the land has been put to
uses to which it is reasonably capable of being put to in the
future.
c
D
Words & Phrases :
'Person interested' - Meaning of, in the context of Land
Acquisition Act and Kamataka Industrial Area Development
Act, 1966.
Disposing of the appeals, the Court
HELD: 1.1 The provisions of the Karnataka Industrial
Area Development Act, 1966 (KIAD Act) and Karnataka
Industrial Area Development Board Regulations, 1969
(KIADB Regulations) make it abundantly clear that the
E acquisition of the agricultural land in the notified
Industrial Area vide notifications issued u/s. 28(1) and
(4) of the KIAD Act, empowers the State Government to
acquire the land for the purpose of industrial
development by the Karnataka Industrial Area
F Development Board (KIADB). A reading of Section 28(5)
of the KIAD Act makes it clear that the land which is
acquired by the State Government statutorily vests
absolutely with it. After following the procedure provided
under Sections 28(6) and (7) of the KIAD Act, the State
G Government takes possession of the acquired land from
the owners/person/persons who are in possession of
the land and transfers the same in favour of the KIADB
for its development and disposal of the same in
H accordance with Regulation 10(a) of the KIADB
PEERAPPAHANMANTHAHARIJAN (0) BYLRS. v. STATE501
OF KARNATAKA
Regulations. [Paras 41 and 49] [528-B, C; 533-B-C]
A
1.2 Sections 29 and 30 of the KIAD Act r/w. ss. 11, 18
and 30 of the Land Acquisition Act, 1894 (L.A. Act) would
clearly mandate that both, the State Government and the
KIADB are liable, jointly or severally, to pay the B
compensation to the owners or interested persons of
the acquired land. [Para 42] [528-D-E]
1.3 The KIADB Regulations make it abundantly clear
that the land acquired shall be disposed off by the KIADB c
by inviting applications from the eligible applicants,
notifying the availability of land, prescribing the manner
of such disposal and fixing the last date for submitting
applications and giving such particulars as it may
consider absolutely necessary by publishing it in the o
newspapers having wide circulation in and outside the
State of Karnataka. [Para 43] [528-G-H]
1.4 On a careful examination of the clauses of the
lease agreement executed between the parties in respect E
of the land of the appellants, it becomes manifestly clear
that the said agreement is executed by the KIADB in
favour of the Company after allotment of land was made
in favour of the Company as provided under Regulation
10(a) and (c) of the KIADB Regulations respectively by F
following the procedure of inviting applications and
submission of the applications by the interested parties
along with the required deposits towards the cost of the
land. Further, Clauses 5 (a) and (b) of the lease
agreement, would clearly state that the premium G
indicated in Clause (1) of the lease agreement represents
the tentative cost of the land and in the event of the lessor
incurring payment of amounts to the land owners over
and above the awards made by the acquiring authority
by virtue of the award passed by the competent court of H
502
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A law or in view of the provisions of the L.A. Act in respect
of demised premises or any part thereof, the same shall
be met by the lessee. Clause 5(b) also makes similar
provision to that effect between the lessor and the
lessee. [Para 47] [532-A-E]
B
1.5 Thus, in view of the clauses of the lease
agreement along with the provision in Section 32(2) of
the KIAD Act and Regulation Nos. 4, 7, 10 (b), (c) and (d)
of the KIADB Regulations, it is clear that the Company is
C only the lessee by way of allotment of the land, as the
same has been allotted by the KIADB in its favour and
has executed the lease deed in its favour in respect of
the allotted land. [Para 48] [532-F-G]
o
1.6 The Company is neither a beneficiary nor an
interested person as claimed by them in terms of Section
2(11) of the KIADActor under Section 3(b) of the LA.Act
as per which, "person interested" includes all persons
claiming an interest in compensation to be made on
E account of the acquisition of land under the KIAD Act
and that a person shall be deemed to be interested in
the land if he is interested in an easement affecting the
land. Sections 3(b), 9 and 20(b) of the L.A. Act, which deal
with service of notice to all persons interested, do not .
F support the case of either the KIADB or the Company.
[Paras 50 and 56] [533-H; 534-A-B; 536-C-E]
1. 7 It cannot be said that in view of Section 3(f)(viii)
of the L.A. Act, as amended by the Karnataka legislature
G by Act No.17 of 61, the Company is an 'interested person'
in the proceedings of determination of the market value
of the acquired land and passing of an award. Section
· 3(f)(viii) includes the provision of land for acquisition in
favour of a company - a) where the land is needed for
· H the construction of some work, and such work is likely
PEERAPPAHANMANTHAHARIJAN (D) BYLRS. v. STATE503
OF KARNATAKA
to prove substantially useful to the public; or b) where A
the land is needed by a building co-operative society or
corporation for the construction of houses. The said
provision has no application to the fact situation. In the
present case, the acquisition of land involved in these
proceedings as the acquisition of land is under the B
provisions of KIAD Act and not under L.A. Act. The
definition of "public purpose" under the L.A. Act cannot
be imported to the . acquisition of land by the State
Government for the industrial development under the
provision of KIAD Act as the -words 'Development', C
'Industrial Area' and 'Industrial Estate' have been clearly
defined under sub-Sections(5), (6) and (7) of Section 2
of the KIAD Act. [Paras 53, 54 and 55) [534-H; 535-A-F]
1.8 Sections 50(1) and (2) of the L.A. Act, also are not D
applicable to the present case for the reason that Section
50 of the L.A. Act applies to the acquisition of land in
favour of a Company by the State Government by
following the mandatory procedure contemplated under
Part VII of the L.A. Act and relevant Rules framed for that E
purpose. [Para 57) [536-F, G]
1.9 Thus, the provisions of the L.A. Act, KIAD Act
and the KIADB Regulations would clearly go to show
that the Company is neither a beneficiary, nor an F
interested person in the land as on the date of
acquisition of the land, as the land was acquired by the
State Government in favour of KIADB who is the
beneficiary and it has allotted in favour of the Company
after the acquired land was transferred in its favour by G
the State Government and executed the lease agreement.
Therefore, the claim made by the Company that it has
got every right to participate in the proceedings for
determination and re-determination of the market value H
of the acquired land and award of compensation passed
504
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A by the Land Acquisition Officer or Deputy Commissioner
or before the Reference Court or the Appellate Court is
wholly untenable in law. [Paras 51 and 57] [534-C-E; 536H; 537-A]
B
1.10 Hence, the Writ Petition filed by the Company
questioning the correctness of the award passed by the
Reference Court which is affirmed by the High Court is
not at all maintainable in law. On this ground itself, the
Writ Petition filed by the Company should have been
C rejected by the High Court instead it has allowed and
remanded the case to the Reference Court for reconsideration of the claims after affording opportunity
to the Company which order suffers from error in law
and and in contravention of the provisions of the KIAD
D Act, L.A. Act, the KIADB Regulations and the lease
agreement, which has been executed by the KIADB in
favour of the Company. Therefore the same is liable to
be set aside. [Paras 58 and 59] [538-G-H; 539-A, C, D]
E
1.11 The High Court has also committed an error in
law in not appreciating Section 54 of the L.A. Act, which
provision provides the rightto appeal to the land owners,
or State Government and beneficiaries of the acquired
land, but not to the Company which is the lessee. When
F the company does not have the right to file an appeal
against the award it also has no right to file a writ petitjon.
[Para 60] [539-E-F]
U.P Awas Evam Vikas Parishad v. Gyan Devi 1994 (4)
G Suppl. SCR 646: (1995) 2 SCC 326; Himalayan Tiles and
Marble Pvt. Ltd. v. Francis Victor 1980 (3) SCR 235: (1980)
3 SCC 223; P Narayanappa and Anr v. State of Karnataka &
Ors. 2006 (4) Suppl. SCR 716: (2006) 7 sec 578 -
distinguished.
H
2. The KIADB has fi!.;d the belated appeal after the
PEERAPPAHANMANTHAHARIJAN (D) BYLRS. v. STATE505
OF KARNATAKA
High Court dispose<:f of the appeal filed by the appellants. A
The High Court has rightly dismissed the belated appeal
filed by the KIADB. [Para 60) [539-F-G]
3.1 Market value of the land acquired has to be.
determined notwithstanding the fact that the date of the 8
notification issued under Section 28(1) of the KIAD Act
has not been taken into consideration, but the criteria
for determination of market value of the land put to uses
to which it is reasonably capable of being put to, in the
future, shall be considered by the Court. The market C
value of the land covered in another case(MFA No. 3796
of 2005 and Cross Objection No. 213 of 2005) has to be
applied to the land of the appellants in the present case
for the reason that in both the notifications as the
required land has been put to use for the industrial D
development by the KIADB, and the lands have been
allotted to the Company for the purpose of extracting
sand stone from the lands which is used as raw
material for manufacture of cement and for providing
infrastructure of the Company. [Para 7 4) [547-F-G; 549E
F-G]
3.2 As per the survey conducted by the State
Government, it is an undisputed fact that mineral is
available in the land and the Company is extracting the F
same to be used as raw material for the manufacture of
cement in its factory. Therefore, though the land in the
present case is a short distance away from the lands
covered in MFA No. 3796 of 2005 and Cross Objection
No. 213 of 2005, both have been acquired for the purpose G
of industrial development and sought to be used for the
same purpose by the Company. Thus, the land of the
appellants is acquired for the non-agricultural
potentiality and the same is used for commercial
purpose. The deductions towards de-escalation at 5% H
per year for 7 years and 10% towards waiting and other
506
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A incidental charges would justify the re-determination of
the market value of the land of the appellants. [Para 73]
[546-B-F]
3.3 (n view of the factthat the land in question has
B got non-agricultural potentiality, a 25% deduction
towards development charges and 5% deduction
towards waiting period for every year and expenses for
conversion by the Reference Court is definitely on the
higher side. Hence, the same is required to be rejected,
C as it is erroneous and suffers from error in law. [Para 73]
[545-F-G]
3.4 Having regard to the facts and circumstances
of the present case, considering the fact that acquisition
D of the land was made in the year 1981, it would be just
and proper to fix the compensation at Rs.1,92,000/-
per acre, with all statutory benefits such as solatium at
30% as provided under Section 23(2) and statutorily
payable interest under Sections 23(1-A) and 28 of the
E L.A. Act, from the date of taking possession of the land
. till the date of payment. The appellants are also entitled
to costs throughout as provided u/s. 27 of the L.A. Act.
[Para 74] [549-H; 550-A-B]
F
Raja Vyricherla Narayana Gajapatiraju v. Revenue
Divisional Officer, Vizagapatnam AIR 1939 Privy Council
98 - relied on.
G
Chandrashekar and Ors. v. L.and Acquisition Officer and
Anr. 2011 (15) SCR 414: (2012) 1SCC390-distinguished.
Olga Tellis & Ors. v. Bombay Municipal Corporation &
Ors.1985 (2) Suppl. SCR 51: (1985f 3 SCC 545;
Ramchandra Dahdu Sonavane (dead) by LRs and Ors. v.
Vithu Hira Mahar (dead) by LRs. and Ors. 2009 (15) SCR
H 222: (2009) 10 SCC 273; Hari Das v. Usha Rani Banik 2006
PEERAPPA HANMANTHA HARIJAN (D) BY LRS. v. STATE 507
OF KARNATAKA
(3) SCR 87: (2006) 4 SCC 78; Ba/larpur Industries Ltd &
KIADB v. Civil Judge (ILR) 1987 KAR 3445; DOA v. Bhola
Nath Sharma (2011) 2 SCC 54- referred to.
Case Law Reference
1985 (2) Suppl. SCR 51
referred to.
para 5
2009 (15) SCR 222
referred to.
para 18
2006 (3) SCR 87
referred to.
para 18
(ILR) 1987 KAR 3445
referred to.
para 18
(2011) 2 sec 54
referred to.
para 23
ILR 1987 Kar 3445
referred to.
Para 24
1994 (4) Suppl. SCR 646
distinguished. para 58
1980 (3) SCR 235
distinguished. para 58
2006 (4) Suppl. SCR 716
distinguished. para 58
2011 (15) SCR 414
distinguished. para 65
AIR 1939 Privy Council 98 relied on.
para 74
CIVIL APPELl:ATE JURISDICTION: Civil Appeal No.
5804 of 2015.
From the Judgment and Order dated 05.03.2013 of the
Karnataka Circuit Bench at Gulbarga in MFA No. 32157 of
2012 (LAC).
WITH
Civil Appeal Nos. 5806-5807 and 5808-5810 of 2015.
A
B
c
D
E
F
G
Ranjit Kumar, S. G., Kiran Suri, Mohan Parasaran,
Abhishek Manu Singhvi, Basava Prabhu Patil, Sharanbos;:ippa
H
508
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A
V. Nisty, Ameet Kumar Deshpandey, S. J. Amith, Dr. Vipin
Gupta, Nishanth Patil, Anup Jain, Ashwin Kumar, Abhijat P.
Medh, V. N. Raghupathy, Parikshit P.Angadi, Vanita Bhargava,
Arvind Kumar Ray, Abhishar Bairagi (For Khaitan & Co.) for
B
c
the appearing parties.
The Judgment of the Court was delivered by
V. GOPALA GOWDA, J. 1. Leave granted in all the special
leave petitions.
2. Challenge in the appeal arising out of SLP No. 19819
of 2013 is arising out of the impugned judgment and order
dated 05.03.2013 passed in Misc. FirstAppeal No.32157 of
2012 (LAC) by the High Court of Karnataka, Circuit Bench at
D Gulbarga (filed against the judgment and order dated
29.09.2012 of Principal Civil Judge (Sr. Divn.), Gulbarga,
Reference Court in LAC No. 943 of 1997) whereby, the High
Court upheld the quantum of compensation awarded by the
Principal Civil Judge (Sr. Divn.) and declined to interfere with
E the same and dismissed the appeal filed by the appellants.
3. Challenge in the appeals arising out of the SLP
Nos.31624-31625 of 2014 is preferred against the judgment
and order dated 22.09.2014 passed in Review Petition No.
F 2537 of2013 in MFA No. 32157 of2012 (filed by the KIADB)
and Writ Petition No. 100860 of 2013 (filed by the Company)
of the Karnataka High Court, Gulbarga Bench whereby the High
Court has remanded the matter to the Reference Court for
reconsideration of the case.
G
4. Challenge in the appeals arising out of SLP Nos.34823484 of 2015, filed by the Karnat2ka Industrial Area
Development Board is arising out of the judgment and order
dated 22.09.2014 passed by the High Court of Karnataka,
H Gulbarga bench, in Review Petition No. 2537 of 2013 in MFA
No.-32157 of 2012, Misc. First Appeal No. 30702 of 2013
PEERAPPA HANMANTHA HAR I JAN (D) BY LRS. v. STATE 509
OF KARNATAKA[V. GOPALAGOWDA, J.]
and writ petition No. 100860 of 2013, whereunder the High A
Court was pleased to dispose of the above mentioned appeal
and petitions by remitting the matter to the Reference Court to
give an opportunity of hearing to the beneficiary and incidentally
to the petitioner therein (the allottee Company). The said
appeals were filed by the KIADB as it was aggrieved of certain
B
observations made in the judgment, while remanding the case,
which affects the merits of the case.
5. This is the most pathetic case of a land owner, and after his death his legal heirs, who have been made to litigate C
the case for more than three decades to get just and reasonable compensation, after having lost their land in the acquisition proceedings at the instance of the Karnataka Industrial
Areas Development Board (in short 'KIADB') which was their
only source of income and livelihood, which right to livelihood D
is a fundamental right guaranteed under Article 21 of the Constitution of India as held by this Court Constitution Bench in the
case of Olga Tellis & Ors. v. Bombay Municipal Corporation & Ors.1The matter has been pending before the courts
.for more than three decades. The appellant-landowners have E
been crying for justice for enforcement of their legitimate right
of getting just and reasonable compensation under the Land
Acquisition Act, 1894 (for short "the L.A. Act"). The land in the
instant case has been acquired by the State Government of F
Karnataka in exercise of its power of eminent domain under
Section 28 of the Karnataka lndustrialAreas DevelopmentAct,
1966 (in short 'the KIAD Act') at the instance of KIADB. The
said acquisition of land had been done by the State Government for the purpose of establishment of industries in the land G
vide notifications under Section 28(1) and 28(4) of the KIAD
Act. By an earlier notification issued by the State Government
under Section 3 of the KIAD Act, the land involved in these
1 (1985) 3 sec 545
H
510
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A
proceedings had also been included in the an Industrial Area.
B
c
The KIAD Act provides for securing the establishment of industrial area in the State of Karnataka with a view to promote
the establishment and orderly development of industries therein
after formation of Industrial Estate in the acquired land.
The relevant facts which are required for the purpose of
considering the rival legal contentions urged on behalf of the
parties in these appeals are stated in brief hereunder.
6, The appellant (s'ince deceased), represented by his
legal representatives was the absolute owner of the land bearing survey No. 306/9/1, measuring 5 acres 20 guntas at
Malkhed village in Sedam Taluka, Gulbarga District,
Karnataka. It is claimed that on 12.2.1981, the predecessor
o of M/s Rajashree Cement Works, a unit of M/s Ultra Tech Cement Ltd. (originally a unit of India Rayon & Industries ltd.)
made a proposal to the State of Karnataka-respondent to set
up a cement manufacturing plant and applied for acquisition
and allotment of 1187 acres and 5 guntas of land towards setE ting up of a factory, residential colony etc at Malkhed, Gulbarga.
This fact is not supported by the original land acquisition record
of the government produced before this Court by the State
government's counsel.
F
7. The state government issued preliminary notification
dated 18.06.1981 under Section 28(1) of the KIAD Act for
acquisition of land measuring 1187 .15 acres in favour of the
KIADB which included the land of the appellants. The
notification also stated that the acquisition of land was for the
G purpose of establishment of industries. The State Government
on 24.11.1981 issued declaration as contemplated under
. section 28(4) of the KIAD Act. The state government on
03.12.1981 issued notices upon the interested parties under
Section 28(6) of the KIADAct.
. H
PEE RAPPA HANMANTHA HARIJAN (D) BY LRS. v. STATE511
OF KARNATAKA [V. GOPALA GOWDA, J.]
8. The Special Deputy Commissioner, Gulbarga, vide A
award dated 28.05.1982 fixed the market value of the acquired
land at Rs.1700/- per acre along with other statutory payments
such as 15% solatium and statutory interest payable on the
compensation amount
9. On 07.06.1990, the state government took possession
of the acquired land from the landowner and transferred the
same to the KIADB which in turn, allottea the same in favour of
B
the Company as per the provisions of the KIAD Act and relevant
provisions of the Karnataka Industrial Areas Development C
Board Regulations, 1969 (hereinafter the "KIADB
Regulations"). The appellants received the compensation
under protest and made an application on 20.06.1982 to the
Special Deputy Commissioner to make reference of the award
to the Reference Court for enhancement of compensation D
under Section 18( 1) of the L.A. Act. The reference application
filed by the appellants before the Deputy Commissioner under
Section 18(3) of the Act dated 12.4.1991 was numbered as
Misc. Petition No.101 of 1991. The Special Deputy
Commissioner, vide supplementary awards dated 30.12.1992
E
and 02.01.1993 granted solatium at the rate of 30% in view of
the provisions under the Land Acquisition (Amendment) Act
(No.68 of 1984 ). The reference papers were sent by the Land
Acquisition Officer to PrinCipal Civil Judge (Sr. Divn.),
F
Gulbarga, was registered as .LAC No. 943 of 1997. The
learned judge refused to condone the delay of the application
filed by the appellants under Section 18(3) of the L.A. Act on
the ground that the date of first application had been
interpolated. A Civil Revision Petition was filed by the G
appellants before the High Court against the order of the
Principal Civil Judge, which was dismissed by the learned
single judge of the Karnataka High Court vide order dated
21.08.2003.
H
10. Aggrieved by the same, the appellants filed an appeal
512
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A
before this Court being Civil Appeal No.3244 of 2005. This
Court set aside the order of the Reference Court and
remanded the case to it with a direction to re-decide the
application of the appellants on merits and to re-determine
the market value of the acquired land and award compensation
B accordingly. This Court further held that the Reference Court
erred in holding that the petition of the appellants was barred
by limitation as the award could be said to have been passed
only on 07.06.1990, the date on which the state government
took possession of the acquired land and compensation was
C offered to the appellants. It was further held by this Court that
the Deputy Commissioner did not have the jurisdiction to pass
the award in the first place on 28.05.1982, as all the acquisition
proceedings with respect to the notifications of the state
0
government dated 24.11.1981 had been stayed by the learned
single Judge of the Karnataka High Court vide an interim order
dated 05.03.1982 in Writ Petition Nos. 9356 to 9361 of 1982,
filed by the appellants and other land owners who were affected
by the acquisition of land and the interim order was operating
E on the date of passing of the award referred to supra, which
fact was neither noticed by the Reference Court nor by the
High Court.
11. Accordingly, the amended claim petition was filed by
F the appellant (since deceased) before the Reference Court
after remand order passed by this Court seeking compensation
at the rate of Rs.2,50,000/- per acre before the Principal Civil
Judge, Gulbarga, who relied upon the judgment and order of
the Karnataka High Court dated 27.02.2005 in MFA No. 3796
G of2005 and Cross Objection No. 213 of2005, which had relied
upon the sale deeds of the sites carved out in Sy. No,389 at
the rate of Rs.7.5/-persq. feet. The reference of the Sy. No.414/
2 of the same village according to which the sale deed had
been executed at the rate of Rs.13/- per sq. feet in the year
H 1985-1986.was also relied on, on the bm;is of which the learned
PEERAPPAHANMANTHAHARIJAN (D) BY LRS. v. STATE513
OF KARNATAKA[V. GOPALAGOWDA, J.]
Principal Civil Judge allowed the claim petition of the appellants A
in part and enhanced the compensation awarded initially from
Rs.1,700/- per acre of land to Rs.1,37,000/- per acre of land
after re-determination of the market value of the land and
awarded the other statutory benefits payable to the owners
under the provisions of the L.A. Act vide order dated B
29.09.2012 passed in LAC No. 943of1997.
12. Aggrieved by the said judgment and order of Reference
Court passed in LAC No. 943of1997, the appellants preferred
MFA No. 32157 of 2012 before ttie Karnataka High Court, C
Gulbarga Bench. The State Government, through KIADB
belatedly preferred MFA 30702 of 2013 before the High Court
after the dismissal of the above Miscellaneous appeal of the
appellants seeking for enhancement. The learned single Judge
of the High Court held that the Reference Court while fixing the D
market value of the acquired land had taken into consideration
the fact that it has got the Non-Agricultural (NA) potential and
had also deducted charges towards the waiting period as well
as development charges at the rate of 30%. and had redetermined the market value of the acquired land at E
Rs.1,37,000/- per acre. Therefore, t~e learned single Judge
of the High Court has held that the same did not call for its
interference and accordingly dismissed the appeal of the
appellants vide judgment and order dated 05.03.2013:
F
13. Aggrieved by the said judgment and order, the
appellants-land owners filed the present appeal arising out of
special leave petition No. 19819 of 2013 before this Court
seeking for enhancement of compensation after redetermination of the market value of the land on the basis of G
the award passed by the High Court in MFA No. 3796 of 2005
and Cross Objection No. 213 of 2005 on the ground that on an
examination of Ext. P.5, which is the village map of the land, it
becomes abundantly clear that the land covered in the award
H
passed in the Cross Objection NO. 213 of 2005 is comparable
514
SUPREMECOURT REPORTS
[2015] 9 S.C.R.
A to the land of the appellants which were acquired by the State
Government for industrial development at the instance of
KIADB.
14. While the matter was yetto be heard by this Court, the
B respondent-State through KIADB filed Review Petition
No.2537 of 2013 before the High Court in MFA No.32157 of
2012. It had also filed belated MFA No. 30702 of 2013 against
the judgment and Award passed by the Reference Court in
LAC No. 943of1997 M/s Ultra Tech Cement Ltd. through its
C Unit M/s. Rajashree Cement Ltd. filed Writ Petition No. 100860
of 2013 before the High Court on 19.03.2013 questioning the
correctness of the award of compensation passed in favour of
the land owners on the ground that they are the necessary party
to the reference proceedings before the Reference Court and
D they were not notified in the said proceedings. The learned
single Judge set aside the judgment and award order of the
Reference Court by allowing the above writ petition and
directed it to afford an opportunity of hearing to the alleged
. beneficiary-Company to participate in the proceedings and to
E decide the matter on merits in accordance with law after
affording opportunity to the Company.
15. Aggrieved by the supplementary awards passed by
the Special Deputy Commissioner dated 30.12.1992 and
F 02.01.1993, the Company filed Writ Petition No. 8707of1993
before the High Court of Karnataka challenging the legality ,
and validity of the same. The learned single judge held that
after the amendment in the L.A. Act, the land owners were
entitled for 30% of solatium and additional benefits under
G Sections 23(1-A), 23(2) and 28 for the reason that the
acquisition proceedings in the case were pending as on
30. 04 .1982 in respect of the lands as no award had been
passed by the Special Deputy Commissioner on or before
H 30.04.1982. The learned single judge further held that the
Special Deputy Commissioner was justified in passing a
PEERAPPA HANMANTHA HARIJAN (D) BY LRS. v. STATE515
OF KARNATAKA[V. GOPALAGOWDA, J.]
supplementary award, awarding benefits under the above said A
provisions of the L.A. Act. Hence, it was concluded by the
learned single judge that the Company cannot have any
grievance as against the supplementary awards and
dismissed the Writ Petition.
B
16. Being aggrieved, the Company filed Writ Appeal No.
4321 of 1998 before the Division Bench of the Karnataka High
Court for setting aside the order of dismissal dated 17 .06.1998
passed in the writ petition by the learned single judge. The
learned Division Bench allowed the appeal of the Company C
and set aside the supplementary awards dated 30.12.1992
and 02.01.1993 of the Special Deputy Commissioner by
judgment and order dated 29.05.2000 holding that since the
appellants had entered into an agreement with the State
Government and KIADB as well as the Company as regards
D
the compensation, the initial award had attained finality and
thus, the Special Deputy Commissioner did not have the
jurisdiction to pass the supplementary awards. The Division
Bench further held that the said land had been allotted by KIADB
in favour of the Company and that the Special Deputy E
Commissioner had no power to pass supplementary awards
when no reference was pending. However, the rejection order
passed in the reference case by the Reference Court affirmed
by the High Court in the above Civil Revision Petition was set F
aside by this Court in the Civil Appeal No.3244 of 2005 vide
its judgment and order dated 27.04.2011. Thereafter, the
Reference Court re-determined the market value of the
acquired land of the appellants-landowners as directed by this
Court in which proceedings the state government through G
KIADB was a party.
17. The learned senior counsel on behalf of the appellants
Ms. Kiran Suri has contended that the Company need not be
party to the proceedings as it is not the beneficiary of the H
acquired land in terms of the provisions of the KIAD Act and
516
SUPREME COURT REPORTS
[2015) 9 S.C.R.
A L.A. Act to be party in the proceedings for determination of the
market value of the acquired land before the Reference Court.
18. The learned senior counsel has further contended that
the State Government through KIADB should not have been
s allowed to file either MFA or writ petition after the same matter
had already been decided by the High Court at the instance of
the appellants. In support of her above legal submission she
has placed reliance upon the decision of this Court in the case
of Ramchandra Dahdu Sonavane (dead) by LRs and Ors.
C v. Vithu Hira Mahar (dead) by LRs. And Ors2 on the question
of res judicata wherein this Court has observed that once the
matter which was the subject matter of /is stood determined
by a competent court, no party thereafter can be permitted to
reopen it in a subsequent litigation. Such rule was brought into
D the statute book with a view to bring such litigation to an end
whose ultimate purpose is to harass the other party. It is further
contended by the learned senior counsel that the matter is
concluded by the.High Court in the MFA filed by the appellants
and as such the question of reviewing the judgment and order
E passed by it does not arise unless there is an error apparent
on the face of the record. She has placed reliance on the case
of Hari Das v. Usha Rani Banik3. Reliance has also been
placed on the decision in the case of Ballarpur Industries
F Ltd & KIADB v. Civil Judge4 in support of the contention that
the lessee/ allottee need not be a party to the proceedings
either before the Land Acquisition Collector or before the
Reference Court as provided under Section 20 (c) of the L.A.
Act, 1894.
G
19. Referring to the Review Petition and the appeal filed
by the State of Karnataka, represented by KIADB before the
2 (2009) 10 sec 273
3 (2006) 4 sec 78
H • (ILR) 1987 KAR 3445
PEERAPPAHANMANTHAHARIJAN (D) BY LRS. v. STATE517
OF KARNATAKA[V. GOPALAGOWDA, J.]
High Court, it is further contended by the learned senior counsel A
on behalf of the appellants that at the relevant point of time
when the matter was decided in MFA of the appellanUowners
by the High Court at the instance of the land owners, no appeal
was filed by the KIADB questioning the correctness of the redetermination of the market value of the acquired land and the
B
award passed by the Reference Court, which has been
confirmed by the High Court holding that the market value of
the land of the owners at Rs.1,37,000 per acre. The same could
not have been interfered with by the High Court in the writ
petition as the Company is not entitled to challenge the award C
by filing writ petition. The belated MFA filed by the KIADB was
rightly dismissed by the High Court. It was further contended
by the learned senior counsel that neither the review petition
filed by the KIADB nor the Writ Petition filed by the Company . 0
should have been entertained by the High Court as the same
was not maintainable for more than one reason. Firstly, the
Company had no locus standito challenge the award passed
by the Reference Court in the Writ Petition, when the remedy
of appeal was provided to the aggrieved party viz. to the State
E
Government and the KIADB. Secondly, the High Court had
rightly rejected the review petition and belated Misc. First
Appeal filed by the KIADB after disposal of the MFA filed by
the landowners seeking for enhancement of compensation.
20. It is further contended by the learned senior counsel F
on behalf of the appellants that the High Court has committe.d
a serious error in law by remanding the matter back to the
Reference Court to give an opportunity to the Company without
recording the specific finding as to whether the Company is a G
beneficiary of the acquired land either"under the provisions of
KIAD Act or the L.A. Act. It is further submitted by the learned
senior counsel on behalf of the appellants that this specific
issue was raised before the High Court, the same was not
answered and therefore, there is no question of remanding
H
518
SUPREME COURT REPORTS
[2015] 9 S.C.R.
A the matter back to the Reference Court without recording the
finding with valid and cogent reasons.
21. It is further contended by the learned senior counsel
appearing on behalf of appellants that the High Court has
B committed a serious error in law in remanding of matter to the
Reference Court after about 33 years of initiation of acquisition
proceedings in a casual manner without examining the relevant
provisions of the KIAD Act, L.A. Act, Regulations and the law
laid down by this Court in this regard. It is impermissible in law
C for the High Court to entertain a non maintainable Writ Petition
filed by the Company which is an allottee, and it has no right
under the provisions of the L.A. Act to get impleaded as a
party either in the reference proceedings or avail appeal
remedy provided under Section 54 of the L.A. Act against the
D award passed by the Reference Court as it has no right under
the provisions of the L.A. Act to question the correctness of
the award with regard to the re-determination of quantum of
compensation as it is governed by the terms and conditions
of the order of allotment and lease deed executed by it when
E the law on this aspect is clear with regard to the right of the
Company as it is an allottee and therefore, the Writ Petition
filed by it questioning the correctness of award passed by the
Reference Court is not maintainable in law and the order of
F remand passed by the High Court in exercise of its
extraordinary, discretionary and supervisory jurisdiction under
_Articles 226 and 227 of the Constitution of India, is void ab
initio in law as the Writ Petitiol} proceedings before the High
Court are not at all maintainable in law. Further, the order of
G remand passed by the High Court without even deciding the
legal right of the Company which was claimed by it stating that
it is a beneficiary even though it is admittedly a lessee of the
acquired land, which was allotted in its favour by the KIADB
on the market value of the acquired land as per the provisions
H of the KIADActand Regulations. The letter dated 07.04.1982
PEERAPPA HANMANTHA HARIJAN (D) BY LRS. v. STATE519
OF KARNATAKA[V. GOPALAGOWDA, J.]
relied upon by the state government clearly shows that the A
KIADB had intimated the Indian Rayon Corporation Ltd., that
the land to an approximate extent of 971.07 acres has been
decided to be allotted in favour of the Company on lease cum
sale basis for a period of 21 years. One of the conditions at
No.14 of the above said letter shows that the KIADB, on being
B
satisfied that the land is not being put to use for the purpose
for which it was asked for will be free to re-enter upon ancj
take possession of tl;le whole or that part of the land which has
not been put to proper use by the Company.