# U.P. AWAS EVAM VIKAS PARISHAD v. GYAN DEVI (DEAD) BY L.RS. AND ORS

- **Citation:** [1994] Supp. 4 S.C.R. 646
- **Court:** Supreme Court of India
- **Decided:** 1994-10-20
- **Case number:** Civil Appeal No. 7067 of 1994
- **Bench:** M.N. VENKATACHALlAH, P.B. Sawant, S.C. Agrawal, R.M. Saha!, S.P. Bharucha
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/u-p-awas-evam-vikas-parishad-v-gyan-devi-dead-by-l-rs-and-ors-12598
- **Pages:** 47

## Headnote

Land Acquisition Act, 1894-Section 50(2)-/nterpretation of,~Ac
quisition of land for a local authority-Right of local authority to participate
C in proceedings for acquisition-Legal remedies available to authority against
detennination of compensation.
D
Land Acquisition Act, 1894-Section 50(2), Proviscr-Acquisition of
land for local authority-f'roceedings before reference court-Local authority
is proper party-Right to adduce evidence.
The U.P. Avas Evam Vikas Parishad (Uttar Pradesh Housing and ~
Development Corporation) a statutory Board created under the Uttar
Pradesh Avas Evam Vlkas Parishad Adbinujam, 196S, framed a scheme
known as the 'Trans-Yamuna Housing and Accommodations Scheme'. The
E notifications u/s 28 and 32 of the U.P. Act (analogous to sections 4(1)and
6 of the Land Acquisition Act) were published. Amount of compensation
was f1Xed by adopting 'belting system'. At the instance of the land owners
reference was made. The Tribunal f1Xed the market value of the acquired
land at a Rat rate. Appeals filed against the award of the Tribunal were
allowed by the High Court whereby the belting system was restored. The
F High Court, however, did not award the amount payable u/s 23 (l·A) of
the Land Acquisition Act. The land owners filed appeals against the
judgment of the High Court. The Board was not impleaded as a party In
the reference before the Tribunal or in the appeals before the High Court.
The Board Ried applications for being impleaded as a party in the appeals.
G
The question for determination was whether the Land Acquisition
Act conferred any right on the Board to participate at the stage of determination of compensation for the land which was sought to be acquired
u/s SS of the U.P. Act read with the provision of the Land Acquisition Act
and to assail such determination if the Board felt aggrieved by the same.
H Therefore, these appeals raised common questions involving the inter646
AWAS EV AM VIKAS P ARISHAD v. GY AN DEVI
647
pretation of sub-section (2) of Section 50 of the Land Acquisition, 1894.
A
Disposing of the matter, this Court
HELD: By the Court (Per Majority) (per S.C. Agarwal J. for himself
& M.N. Venkatachaliah, CJI, P.B. Sawant and S.P. Bharucha, JJ.)
1.1. Section 50(2) of the Land Acquisition Act confers on a local
authority for whom land is being acquired a right to appear in the
acquisition proceedings before the Collector and the reference court and
adduce evidence for the purpose of determining the amount of compensation. [ 664-C]
1.2. The said right carries with it the right to be given adequate notice
by the Collector as well as the reference court before whom acquisition
proceedings are pending of the date on which the matter of determination
of compensation will be taken up. [664-D]
1.3. The proviso to Section 50(2) only precludes a local authority
from seeking a reference but it does not deprive the local anthority which
feels aggrieved by the determination of the amount of compensation by the
Collector or by the reference conrt to invoke the remedy under Article 226
B
c
D-'
of the Constitntion as well as the remedies available under the Land E
Acquisition Act. [664-E]
1.4. In the event of denial of the right conferred by Section 50(2) on
account of failure of the Collector to serve notice of the acquisition
proceedings the local authority can invoke the jurisdiction of the High
Court under Article 226 of the Constitution. [664-F]
1.5. Even when notice has been served on the local anthority the
remedy under Article 226 of the Constitution would be available to the
local authority on grounds on which judicial review is permissible under
Article 226. [664-G]
1.6. The local authority is a proper party in the proceedings before
the reference court and is entitled to be impleaded as a party in those
proceedings wherein it can defend the determination of the amount compensation by the Collector and oppose enhancement of the said amount
F
G
and also adduce evidence in that regard. [664-H]
H
A

## Text

_Characters 0–39,967 of 114,015. This is a partial read: ask again with offset=39967 for what follows._

A
U.P. AWAS EVAM VIKAS PARISHAD
v.
GYAN DEVI (DEAD) BY L.RS. AND ORS.
OCTOBER 20, 1994
B
[M.N. VENKATACHALlAH, CJ, P.B. SAWANT, S.C. AGRAWAL,
R.M. SAHA! AND S.P. BHARUCHA, JJ.J
Land Acquisition Act, 1894-Section 50(2)-/nterpretation of,~Ac
quisition of land for a local authority-Right of local authority to participate
C in proceedings for acquisition-Legal remedies available to authority against
detennination of compensation.
D
Land Acquisition Act, 1894-Section 50(2), Proviscr-Acquisition of
land for local authority-f'roceedings before reference court-Local authority
is proper party-Right to adduce evidence.
The U.P. Avas Evam Vikas Parishad (Uttar Pradesh Housing and ~
Development Corporation) a statutory Board created under the Uttar
Pradesh Avas Evam Vlkas Parishad Adbinujam, 196S, framed a scheme
known as the 'Trans-Yamuna Housing and Accommodations Scheme'. The
E notifications u/s 28 and 32 of the U.P. Act (analogous to sections 4(1)and
6 of the Land Acquisition Act) were published. Amount of compensation
was f1Xed by adopting 'belting system'. At the instance of the land owners
reference was made. The Tribunal f1Xed the market value of the acquired
land at a Rat rate. Appeals filed against the award of the Tribunal were
allowed by the High Court whereby the belting system was restored. The
F High Court, however, did not award the amount payable u/s 23 (l·A) of
the Land Acquisition Act. The land owners filed appeals against the
judgment of the High Court. The Board was not impleaded as a party In
the reference before the Tribunal or in the appeals before the High Court.
The Board Ried applications for being impleaded as a party in the appeals.
G
The question for determination was whether the Land Acquisition
Act conferred any right on the Board to participate at the stage of determination of compensation for the land which was sought to be acquired
u/s SS of the U.P. Act read with the provision of the Land Acquisition Act
and to assail such determination if the Board felt aggrieved by the same.
H Therefore, these appeals raised common questions involving the inter646
AWAS EV AM VIKAS P ARISHAD v. GY AN DEVI
647
pretation of sub-section (2) of Section 50 of the Land Acquisition, 1894.
A
Disposing of the matter, this Court
HELD: By the Court (Per Majority) (per S.C. Agarwal J. for himself
& M.N. Venkatachaliah, CJI, P.B. Sawant and S.P. Bharucha, JJ.)
1.1. Section 50(2) of the Land Acquisition Act confers on a local
authority for whom land is being acquired a right to appear in the
acquisition proceedings before the Collector and the reference court and
adduce evidence for the purpose of determining the amount of compensation. [ 664-C]
1.2. The said right carries with it the right to be given adequate notice
by the Collector as well as the reference court before whom acquisition
proceedings are pending of the date on which the matter of determination
of compensation will be taken up. [664-D]
1.3. The proviso to Section 50(2) only precludes a local authority
from seeking a reference but it does not deprive the local anthority which
feels aggrieved by the determination of the amount of compensation by the
Collector or by the reference conrt to invoke the remedy under Article 226
B
c
D-'
of the Constitntion as well as the remedies available under the Land E
Acquisition Act. [664-E]
1.4. In the event of denial of the right conferred by Section 50(2) on
account of failure of the Collector to serve notice of the acquisition
proceedings the local authority can invoke the jurisdiction of the High
Court under Article 226 of the Constitution. [664-F]
1.5. Even when notice has been served on the local anthority the
remedy under Article 226 of the Constitution would be available to the
local authority on grounds on which judicial review is permissible under
Article 226. [664-G]
1.6. The local authority is a proper party in the proceedings before
the reference court and is entitled to be impleaded as a party in those
proceedings wherein it can defend the determination of the amount compensation by the Collector and oppose enhancement of the said amount
F
G
and also adduce evidence in that regard. [664-H]
H
A
B
c
D
648
SUPREME COURT REPORTS [1994) SUPP. 4 S.C.R.
1.7. In the event of enhancement of the amount of compensation by
the reference court if the Government does not file an appeal the local
authority can file an appeal against the award in the High Court after
obtaining leave of the Court. (665-A]
1.8. In an appeal by the person having an interest in land seeking
enhancement of the amount of compensation awarded by the reference
court the local authority should be impleaded as a party and is entitled to
the served notice of the said appeal. This would apply to an appeal in the
High Court as well as in this Court. (665-B]
1.9. Since a company for whom land is being acquired bas the same
right as a local authority under Section 50(2), whatever has been said with
regard to a local authority would apply to a company too. [665-C]
1.10. The matters which stand finally concluded will, however, not be
reopened. (665-D]
Neelgangabhai and Anr. v. State of Kamataka and Ors., (1990] 3 SCC
617; Krishi Upaj Mandi Samiti v. Ashok Singha/ and Ors., [1991] Supp. 2
SCC 419; Union of India v. Sher Singh and Ors., (1993] 1 SCC 608; Union
of India v. Kolluni Ramaiah and Ors., (1994] 1 SCC 367 and Himalayan
7iles and Marbles Pvt. Ltd. v. Francis Victor Continho (Dead) by Lrs. and
E Ors., [1980] 3 SCR 235, relied on.
F
The Municipal Corporation of the Oty of Ahmedabad v. Chandulal
Shamaldas Patel and Ors. (1971] 3 SCC 821, overruled.
Per Sahai, J (Dissenting)
1.1 An acquiring body including local authority or company is not a
necessary party either before the Collector who makes the award or before
the Court which hears the reference. (687-E]
G
1.2 Any proceeding for determination of compensation is not vitiated
nor is liable to be set aside for non-impleadment or non-issuance of notice
to the acquiring body, including local authority or the company. (687-F]
1.3 (a) The Collector and the Court hereinafter shall be under an
obligation to intimaie the local authority or the company of pendency of
H the proceedings to enable it to lead evidence. (687-G]
AWAS EVAMVIKAS PARISHADv. GYAN DEVI
649
(b) Non-appearance by the local authority or company in pnrsuance A
of notice sent by the Collector would not absolve the reference court from
issuing any notice. [687-G]
1.4 (a) If a local authority or company appears in proceedings and
leads evidence as provided by sub-section (2) of Section 50 in proceedings
which were initiated earlier it shall be made party in subsequent proceedB
ings and its non-impleadment shall render the proceedings as invalid.
[687-H]
(b) But if the local authority of the company on whom notice was
served or it had knowledge of the proceedings but it did not appear then
it shall not be entitled to claim at later stage or in appeal that the C
proceedings were vitiated dne to its non-impleadment. [688-B]
1.5 Any proceeding taken under the Land Acquisition Act as.
amended by the State law or if specifically provided iu the State enactment
under which the land is being acquired providing for issuance of notice or D
giving an opportunity of bearing is required to be followed and if such
notice is not issued or hearing is not afforded then the proceedings as in
the Karnataka Act or in the Krisbi Upaj Mandi Samiti Adhiniyam referred
to earlier are liable to be set aside. [688-C]
1.6 In appeal pending in the High Court or this Court the local E
authority or the company shall not be entitled to claim settling aside of
the order except if it establishes fraud or collusion. No order shall be set
aside on the ground if it is only in the realm of appreciation of evidence.
[688-D]
Himalaya Tiles and Marble (P) Ltd. v. Francis Victor Countinho F
(dead) by L.Rs., AIR (1980) SC 1118; Sunder Lal v. Paramsukhdas, [1968]
1 SCR 362; Union of India v. Sher Singh, JT (1993) SC 693, dissented from.
Santosh Kumar v. Central Warehousing Corporation, AIR (1986) SC
1164; Udit Narain Singh Malpaharia v. Additional Member, Board of
Revenue, [1963) Supp. 1 SCR 676, relied on.
G
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7067 of
1994 etc. etc.
From the Judgment and Order dated 20.1.93 of the Allahabad High
Court in C. Misc. R.A. No. Nil/91 in F.A. No. 586 of 1985.
H
A
B
c
D
650
SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.
P.S. Poti, G. Visavanatha Iyer, Hardev Singh, V.B. Saharya, S. Balakrishnan, Ms. Madhu Moolchandani, Ms. Naresh Bakshi, M.T. George, E.C.
Agarwala, P.N. Gupta, T.V.S.N. Chari, Ms. Sushma Suri, Mrs. S. Bagga
M.K. Dua, N.D. Garg, R.B. Mishra, Balmokand Goyal, R.C. Pathak H.K.
Puri, C.V. Subba Rao, P.N. Puri, Dr. Meera Aggarwal, S.N. Terdol, M.K.
Garg, Manoj 5warup and K.K. Mohan for the appearing parties.
The Judgment of the Court was delivered by
S.C. AGRAWAL. J. : Leave granted.
These appeals arising out of proceedings for acquisition of land for
the U.P. Awas Evam Vikas Parishad, hereinafter referred to as 'the Board',
raise common questions involving the interpretation of Sub-Section (2) of
Section 50 of the Land Acquisition Act, 1894 (hereinafter referred to as
'the LA. Act') and, therefore, they are being disposed of by this common
judgment.
The Board has been constituted under Section 3 of the U.P. Awas
Evam Vikas Parishad Adhiniyam, 1965 (U.P. Act No. 1 of 1966),
hereinafter referred to as 'the U.P. Act'. Under Section 15 of the U.P. Act
one of the functions of the Board is to frame and execute housing and
improvement schemes and other projects. Section 16 .provides that the
E Board may on its own or at the instance of a local authority frame a housing
or improvement scheme and that the Board shall frame such a scheme
when so directed by the State Government. Section 17 prescribes the
matters which are required to be provided for such schemes. Sub-section
(1) of Section 28 makes provision of preparation of a notice by the Board
F
when any honsing or improvement scheme has been framed and the said
notice is required to be published in the manner as prescribed in sub-section (2) of Section 28. Section 30 makes provision for filing of objections
against the scheme and section 31 provides for sanction of the scheme, with
or without modifications, after considering the objections, if any, received
under Section 30. Such sanction is to be given by the Board when the
G estimates cost of the schemes does not exceed Rs. 20,00,000 and by the
State Government where the estimated costs exceeds that amount. Sub-section (1) of Section 32 provides that whenever the Board or the State
Government sanctions a housing or improvement scheme, it shall be
notified in the Gazette and sub-section (2) lays down that the notification
H under sub-section (1) in respect of any scheme shall be conclusive evidence
AWASEVAMVIKASPARISHADv. GYANDEVI [S.C.AGGARWAL.J.]
651
that the scheme has been duly framed and sanctioned. In cases where the A
scheme is sanctioned by the Baaed and appeal lies to the State Government
against the decision of the Board under sub-section (3) of Section 32 and
if the scheme is altered or cancelled by the State Government on such
appeal the cancellation or alteration is required to the notified in the
Gazette under sub-section ( 4) of section 32. Section 55 makes provision for B
acquisition of land or any interest therein required by th.e Board for any
of the purposes of the U.P. Act and lays down that such acquisition may
be made under the provisions of the L.A. Act as amended in its application
to Uttar Pradesh and further provides that the L.A. Act for this purpose
shall be subject to the modifications specified in the Schedule to the U.P.
Act. Section 64 provides for the constitution of one or more tribunals by C
the State Government for the purpose of performing the functions of the
court with reference to the acquisition of land for the Board under the L.A.
Act, as modified by the Schedule to the U.P. Act. In the Schedule to the
U .P. Act modifications have been introduced in the provisions of tbe L.A.
Act. Some of the said modifications which are relevant for the purpose of D
the present case are :
(a) Claus,e (i) has been added in Section 3 whereby the 'local
authority' has been defined to include 'the Board'.
(b) The first publication in the Official Gazette of a notice of any
E
housing or improvement scheme under Section 28 or clause (a) of sub-section (3) of Section 31 of the U.P. Act is to have the same effect as
publication in the official Gazette of a notification under sub-section (1)
of Section 4 of the L.A. Act.
(c) The publication of a notification under sub-section (1) or, as the
F
case may be, under sub-section (4) of section 32 of the U.P. Act is to have
the same effect as a declaration by the Government under Section 6 of the
L.A. Act.
(d) Sub-sections (1) and (1-A) of Section 17 of the L.A. Act as
applicable in the State of U.P. have been substituted by sub-section (1) G
which provide tbat whenever the State Government so directs in the
interest of the expeditious execution of a housing or improvement scheme
under U.P. Act, the Collector, though no such award has been made, may
on the expiration of fifteen days from the publication of the notice mentioned in sub-section (1) of Section 9 take possession of any land needed H
652
SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.
A
for the purposes of the U .P. Act and such land shall thereupon vest
absolutely in the Government free from all encumbrances.
( e) Section 17-A has been added whereby it has been provided that
in every case referred to in Section 16 or Section 17, the Collector shall
B upon payment of the cost of acquisition make over charge of the land to
the Housing Commissioner, or an officer authorised in this behalf under
the U .P. Act and the land shall, thereupon vest in the board subject to the
liability of the Board to pay any further costs which may be incurred on
account of its ~cquisition.
C
The Boatd framed a scheme known as the "Trans-Y amuna Housing
& Accommodation Scheme" and notice under Section 28 of the U.P. Act
in respect of the said scheme (analogous to a notification under section
4(1) of the L.;\. Act) was published on January 31, 1970 and the notification under Section 32 of the U .P. Act (analogous to declaration under
D Section 6 of the LA. Act) was published on August 21, 1974. The Special
Land Acquisition Officer made an award on April 15, 1978, wherein
amount of compensation was fixed by adopting 'belting system'. The land
under acquisition was divided in three belts and bye-pass road which lay
in the south was made the basis for such belting. Compensation@ Rs. 7.50,
Rs. 5.00 and R15. 3.75 per sq. yd. was awarded as for the first, second and
E third belts respectively. The possession of the land was taken on April 27,
1978. At the in$tance of the land owners reference was made to the tribunal
constituted under Section 64 of the U .P. Act. The tribunal by a common
award dated June 28, 1985 fixed the market value of the acquired land of
the appellants in the appeals at a flat rate of Rs. 16.54 per sq. yd. First
F
Appeals Nos. 586, 587 and 641 of 1985 were filed by the appellants in
appeals arising out of S.L.P. (C) Nos. 391-393 of 1992 against the said
award of the tribunal. The appeals were allowed by a division bench of the
High Court (K.P. Singh and P.P. Gupta, JJ.) by judgment dated April 18,
1991 whereby the belting system was restored and compensation amount
has been enh"!lced to Rs. 25.00 per sq. yd. for the lands falling in the first
G belt, Rs. 23.50 per sq. for the lands falling in the second belt and Rs. 20.00
per sq. yd. fol the lands falling in the third belt. Solatium at the rate of
30% on the amount of enhanced compensation has been awarded and
interest at th~ rate of 9% for the first year from the date of taking
possession and at the rate of 15% per annum for the subsequent years has
H been awarded, The High Court has, however, not awarded the amount
AWASEVAMVIKASPARISHADv. GYANDEVI(S.C.AGGARWAL,J.]
653
payable under sub-section (1-A) of Section 23 of the L.A. Act. Appeals A
arising out of S.L.P. (C) Nos. 391-393 of 1992 have been filed by the land
owners against the said judgment of the High Court In this Court. The
appellants in appeals arising out of SLP (C) Nos. 15810-12/91 filed First
Appeals Nos. 584, 585 and 642 of 1985 in the High Court against the award
the tribunal. The said appeals were, however, dismissed by another division B
bench of the High Court (N.N. Mithal and K.K. Chaubey JJ.) by Judgment
dated December 21, 1990 and the award of the tribunal awarding compensation @ Rs. 16.50 per sq. yd. was maintained. The High Court also
negatived the claim of the land owners for the amount payable under
Section 23 (1-A) of the L.A. Act. Feeling aggrieved by the said judgment
of the High Court, appeals arising out of S.L.P. (C) Nos. 15810-12/91 have C
been filed by the land owners.
The Board was not impleaded as a party in the reference before the
tribunal or in the appeals before the High Court.
On September 9/10, 1991, the Board filed review petitions in the D
High Court for the review of the judgment dated April 18, 1991 in First
Appeals Nos. 586, 587 and 641 of 1985 and the delay in filing of the said
review petitions was explained on the ground that the Board become aware
of the decision of the High Court only on August 19, 1991 when the then
Legal Advisor of the Board read the said judgment of the High Court in
E
the law reports. The said review petitions were dismissed by the High Court
by order dated January 20, 1993 on the ground of delay and for want of
paying proper court fees Appeals arising out of S.L.P. (C) Nos. 15085/93,
15057 /93 and 13858/93 have been filed by the Board against the said order
of the High Court.
The Board has also filed applications for being impleaded as a party
in the appeals filed by the land owners in this Court.
F
The question which needs to be determined is whether the L.A. Act
confers any right on the Board to participate at the stage of determination G
of compensation for the land which is sought to be acquired under Section
55 of the U.P. Act read with the provisions of the L.A. Act, as modified
by the Schedule to the U.P. Act and to assail such determination if the
Board feels aggrieved by the same. As indicated earlier, by virtue of Section
3(i) that has been introduced in the L.A. Act by the U.P. Act the Board
is a local
authority for the purpose of the L.A. Act. The question H
654
SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.
A aforementioned has, therefore, to be examined in the light of the provisions
contained in the L.A. Act relating to acquisition of land for a local
authority. The provisions which have a bearing on this question are contained in Section 50 of the L.A. Act which reads as under :
B
c
"$0. Acquisition of land at cost of a local authority or Company. -
(1) Where the provisions of this Act are put in force for the
purpose of acquiring land at the cost of any fund controlled or
managed by a local authority or of any Company, the charges of
and incidental to such acquisition shall be defrayed from or by
such fund or Company.
(2) In any proceeding held before a Collector or Court in such
¢ases the local authority or Company concerned may appear and
adduce evidence for the purpose of determining the amount of
compensation :
D
Provided that no such local authority or Company shall be
~ntitled to demand a reference under Section 18.'
Sub-section (2) of Section 50 enables a local authority to appear in any
acquisition proceeding at the stage of determination of compensation
before the Collector or the reference court and adduce evidence for the
E purpose of determining the amount of compensation. The object underlying the aforesaid provision appears to be to safeguard the interests of the
local authority who would be required to pay the amount of compensation
that would be determined by the Collector or by the Reference Court by
enabling it to adduce evidence having a bearing on the amount of compenF sation ~fore the Collector or the Court and thereby assist them in niiling
a fair determination. Such protection was n~cessary because in the matter
of acquisition under the Land Acquisition· Act a local authority for whom
the land is acquired does not stand on the same footing as the Government.
While making the award the Collector acts as an agent of the Government
and functions under its administrative control. Prior to the iDsertion of the
G Proviso in sub-section (1) of Section 11 of the L.A. Act by the Land
Acquisition (Amendment) Act, 1984; there were administrative instructions r¢quiring preliminary valuation by the Collector of the land being
acquired and if the Collector found that the eventual aware! would substantially exceed the provisional valuation he was required to obtain further
H instructions from the higher authorities. Now the proviso inserted in sub-
AWASEVAMVIKASPARISHADv. GYANDEVI [S.C.AGGARWAL,J.]
655
section ( 1) of Section 11 by the Amendment Act of 1984 lays down the A
statutory requirement that no award shall be made by the Collector without
previous approval of the appropriate Government or of such officer as the
appropriate Government may authorize in this behalf. There is no similar
provision requiring the approval of the local authority. Sub-section (2) of
Section 50 is the only provision which affords a certain degree of protection B
to it in the matter of determination of the amount of compensation by the
Collector as well as the Reference Court. Keeping these considerations in
view we are of the opinion that sub-section (2) of Section 50 must be
construed as conferring a right on the local authority for whom the land is
being acquired to participate in the acquisition proceedings at the stage of
determination of the amount of compensation before the Collector as well C
as the reference court.
The said right can be effeetively exercised by the local authority only
if it has information for the proceedings which are pending before the
Collector as well as the reference court. In other words the right conferred D
under Section 50(2) of the L.A. Act carries with it the right to be given
adequate notice by the Collector as well as the ·reference court before
whom the acquisition proceedings are pending of ihe date on which the
matter of determination of the amount of compensation will be taken up.
Service of such a notice, being necessary for effectuating the right conferred on the local authority under Section 50(2) of the L.A. Act, can,
E
therefore, be regarded as an integral part of the said right and the failure
to give snch a notice would result in denial of the said right unless it can
be shown that the local anthority had knowledge about the pendency of
the acquisition proceedings before the Collector or the reference court and
has not suffered any prejudice on &ccount of failure to give such notice.
F
The only limitation on the right conferred by Section 50(2) is that
contained in the proviso to Section 50(2) which precludes the local
authority from demanding a reference under Section 18. In the report of
the Select Committee the policy underlying the proviso has been thus
explained :
G
'........ We cannot however agree that the authority should be
permitted to appeal from the Collector's award. We have not given
to Government itself the power to make this appeal because the
Collector is only the agent of the Government in the acquisition H
A
B
c
656
SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.
of land; his action is taken under the rules laid down for his
guidance which include a preliminary valuation and these rules
ordinarily provide and sought to provide, that when the Collector
finds cause to anticipate that his eventual provisional estimate, he
shall stay all proceedings till he receives the further instructions of
higher authority. No local authority or company is compelled to
proceed under the Land Acquisition Act. If it can procure land
m,bre cheaply by private negotiations, it is certainly at liberty to do
so but if elects to set in motion the very special power given to the
Government for public objects, it can expect no higher privileges
aiid powers than those given to G<lvernment itself."
(See : V.G. Ramachandran - Law of Land Acquisition and Compensation, 7th Edn., Vol.-1 at p. 1045)
Having regard to the difference between the position of a local authority
D , for whom the land is acquired and the Government in the matter of
determination of the amount of compensation by the Collector to which
the reference has been made by us earlier and especially after the insertion
of the proviso in Section 11(1) in L.A. Act by the Amendment Act of 1984
the fact that no right has been conferred on the Government to seek a
reference under Section 18 may not be a sufficient justification for denial
E of such, a right to a local authority. While it is true that a local authority is
not compelled to proceed under the L.A. Act and if it can procure land
more cheaply by private negotiations it is certainly at liberty to do so but
there may be cases, as in the case of acquisition of land for the Board,
where it is permissible for a local authority to take possession of the land
F
which ,is being acquired under Section 17(1) before the making of the
award, by the Collector. In such a case the local authority would have no
choice but to pay the amount of compensation as determined by the
Collector. We have adverted to these aspects not with a view to find fault
with the legislative policy underlying the enactment of the proviso in
sub-section (2) of Section 50 of the L.A. Act but only to highlight the
G signifJ.cance of the protection that has been made available to a local
authority in the matter of determination of compensation under sub-section
(2) of Section 50 of the L.A. Act
Thus, on an interpretation of the provisions of Section 50(2) of the
H L.A. Act, it must be concluded that, subject to the limitation contained in
AWASEVAMVIKASPARISHADv. GYANDEVI [S.C.AGGARWAL,J.]
657
the proviso, a local authority for whom land is being acquired has a right A
to participate in the proceedings for acquisition before the Collector as
well as the reference court and adduce evidence for the purpose of
determining the amount of compensation and the said right imposes an
obligation on the Collector as well as the reference court to give a notice
to the local authority with regard to the pendency of those proceedings and B
the date on which the matter of determination of amount of compensation
would be taken up. The recognition of this right raises the question whether
the local authority, feeling aggrieved by the determination of the amount
of compensation by the Collector or the reference court, can take recourse
to any legal remedy. Before dealing with this question we would take note
of the decisions of this Court have a bearing on the issue.
C
In the State of Karnataka, Section .20 of the L.A. Act has been
modified by Land Acquisition (Mysore Extension Amendment) Act, 1961
(17 of 1961) and an express provision has been made that the reference
court shall serve a notice on the Deputy Commissioner, all persons inter- D
ested in the reference and, if the acquisition is not made for Government,
the reference court shall serve a notice on the person or authority for whom
it is made. In Neelgangabai & Anr. v. State of Kamataka & Ors., [1990) 3
SCC 617, tl\e said provision came up for consideration before this Court.
Land was acquired for the Hubli-Dharwar Municipal Corporation but no
notice as required by Section 20 was issued to the municipal corporation E
by the reference court which enhanced the amount of compensation. The
municipal corporation moved the High Court by filing a writ petition under
Article 226 of the Constitution challenging the validity of the civiLcourt's
judgment directing higher compensation to be paid. The said writ petition
was allowed by the High Court and the said judgment was affirmed in
F
appeal by this Court. It was observed :
"Admittedly the land was acquired for the purpose of the respondent-Corporation and the burden of payment of the compensation
is on the Corporation. In this background the High Court has held G
that it was mandatory for the court of reference to have caused a
notice to be served on the respondent-Corporation before
proceeding to determine the compensation claim. Since no notice
was given to the respondent-Corporation and it was thus deprived
of an opportunity to place its case before the court, the judgment
· rendered in the reference case was illegal and not binding on the H
658
SUPREME COURT REPORTS (1994) SUPP. 4 S.C.R.
A
corp(uation. We are in agreement with this view." (p. 618)
Similarly, in Krishi Upaj Mandi Samiti v. Ashok Singhal & Ors., 1991
Snpp. (2) SCC 419, there was a requirement to serve a notice on the
person or bo,dy for whose benefit the acquisition was made. Such a notice
was not ser\'.ed on the Krishi Upaj Mandi Samiti by the reference court
B which enhar\ced the amount of compensation awarded by the Land Acquisition Officer and the said amount was further enhanced by the High
Court which also did not serve a notice on the Krisi Upaj Mandi Samiti.
The said decision of the High Court was set aside by this Court in appeal
and the matter was remitted to the High Court for a fresh disposal in
accordance with law after affording a hearing to the Krishi Upaj Mandi
C Samiti. In that case the court did not set aside the award of the reference
court, although no notice was served by that cour~ for the reason that the
Samiti had accepted and was satisfied with the award of the reference
court.
D
E
In Union of India v. Sher Singh & Ors., (1993] 1 SCC 608, land was
acquired for the purpose of Union of India and Union of India had moved
an application before the reference court for being impleaded in the array
of the respondents. The said application was rejected by the reference
court and the said order was affirmed by the High Court in revision. This
Court rev¢rsed the said order of the High Court and allowed the application of Ul)ion of India for impleadment and held that it was entitled to file
an appeal in the High Court against the judgment of the reference court.
In Union of India v. Kol/uni Ramaiah & Ors., (1994) 1 SCC 367,
acquisition was made under the provisions of the Requisitioning and
F
Acquisition of Immovable Property Act, 1952 for the purpose of Union of
India an!! the arbitrator had enhanced the amount of compensation that
was awarded by the competent authority. The said amount was further
enhanced in appeal by the High Court. The Union of India was not
impleaded as a party to the proceedings either before the arbitrator or
before the High Court. The Union of India challenged the judgment of the
G High Court in this Court. After observing that : "Properly speaking the
Union Qf India ought to have been made a party both before the arbitrator
and the High Court" this Court, exercising its powers under Article 142 of
the Col)stitution, remitted the matter to the High Court with the direction
that the special leave petitions filed by the Union of India in this Court
H must be treated as cross-objections before the High Court against the
AWASEVAMVIKASPARISHADv. GYANDEVI[S.C.AGGARWAL,J.]
659
award of the arbitrator.
A
At this stage we may also refer to two other decisions which, though
not relating to determination of the amount of compensation, have a
bearing on the locus standi of a local authority for whom land is being
acquired to file an appeal against an adverse order of the High Court under
Article 226 of the Constitution.
B
In The Municipal Corporation of the City of Ahmedabad v. Chandulal
Shamaldas Patel & Ors., [1971) 3 SCC 821, land was sought to be acquired
for the purpose of the Ahmedabad Municipal Corporation. Notifications
issued under Sections 4 and 6 were , however, challenged by the land owner C
before the High Court under Article 226 of the Constitution wherein the
Municipal Corporation was also impleaded as respondent but no relief was
claimed against it. The said Notifications were quashed by the High Court.
The Municipal Corporation filed an appeal to thi$ Court against the said
decisfon of the High Court. A preliminary objection was raised with regard
to the maintainability of the said appeal on the ground that the Municipal D
Corporation was not aggrieved by the said order. The said objection was
upheld by this Court on the view that although the property was notified
for acquisition by the State Government for use of the Municipal Corporation after it was acquired by the Government, that clid not confer any
interest in the Municipal Corporation so as to enable it to file an appeal E
against the order of the High Court allowing the petition.
In Himalayan Tiles & Marbles (P) Ltd. v. Francis Victor Countinho
(Dead) by Lrs. & Ors., [1980) 3 SCR 235, land was sought to be acquired
for the purpose of a company. After the award had been made and the
land had vested in the Government and stood transferred to the company
F
the land acquisition proceedings alongwith the notifications under Sections
4 and 6 of the L.A. Act were quashed by the learned Single Judge of the
High Court on a writ petition filed by the owner of the land under Article
226 of the Constitution. The Letters Patent Appeal filed by the Company
against the said decision of the learned Single Judge was dismissed by the G
division bench of the High Court on the ground that the company had no
locus standi to file the appeal as it was not a person interested within
Section 18(1) of the L.A. Act. The said view was reversed by this Court
and it was observed :
"Since under the agreement the company had to pay the compen- H
A
B
c
D
E
660
SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.
sati()n, it was most certainly interested in seeing that a proper
quantum of compensation was fixed so that the company may not
have to pay a very heavy amount of money. For this purpose, the
company could undoubtedly appear and adduce evidence on the
question of the quantum of compensation." (p. 240)
This Court further observed that the definition of the word "person interested" must be liberally construed so as to include a body, local authority,
or a company for whose benefit the land is acquired and who is bound
under an agteement to pay the compensation. According to this Court:
"How can it be said that a person for whose benefit the land is
acqμired .nd who is to pay the compensation is not a person
interested even though its stake may be extremely vital? For
instance, the land acquisition proceedings may be held to be invalid
and thus a person concerned is completely deprived of the benefit
which is proposed to be given to him. Similarly, if such a person
is not heard by the Collector or a court, he may have to pay a very
heary compensation which, in case he is allowed to appear before
a court, he could have satisfied it that the compensation was far
too heavy having regard to the nature and extent of the land." (p.
243)
The <;:ourt has taken note of "general consensus of judicial opinion
that even though a company may not have any title to the property yet it
certainly has a right to appear and put forward its case in the matter of
determination of the quantum of compensation" (p.240). The Court has
F
also consid~red the definition of "person interested" contained in Section
3(b) of the L.A. Act and has held that the company for whom the. land is
acquired is a "person interested" for the purpose of Section 18(1) of the
L.A. Act. The Court appears to have gone into this question for the reason
that the Letters Patent Bench in the High Court had held that the company
G was not a "person interested" within the meaning of Section 18(1) of the
L.A. Act. Having regard to the express provision contained in the proviso
to Section 50(2) of the L.A. Act, it would not be correct to say that a local
authority or a company for whom land is acquired is a "person interested"
under Section 18(1) of the L.A. Act because on that view a local authority
or a company would be entitled to seek a reference against the award of
H the Collector which would run counter to the proviso to Section 50(2). It
•
AWASEVAMVIKASPAR!SHADv. GYANDEVI (S.C.AGGARWAL,J.]
661
was, therefore, not correct to place reliance on Section 18( 1). But the A
conclusion in Himalayan Tiles's case (supra) that the company had the
locus standi to file an appeal is right when the said judgment is read in the
context of Section 50(2). For that reason, we are unable to endorse the
view taken in Municipal Corporation of City of Ahmedabad v. Chandulal
Shamaldas Patel (supra).
We would now revert to the question regarding the legal remedies
that are available to a local authority which feels aggrieved by the determination of the amount of compensation by the Collector or by the
Reference Court. In this context, it may be stated that the limitation placed
B
by the proviso on the right conferred by Section 50(2) of the L.A. Act C
cannot be so construed as to deprive the local authority which feels
aggrieved by the determination of the amount of compensation by the
Coll.ector or by the Reference Court to invoke the remedy under Article
226 of the Constitution as well as the remedies available under .the L.A.
Act. The proviso to section'50(2) only takes away the remedy of a reference
under Section 18 of the L.A. Act. Examining this question in the context D
of the proceedings before the Collector we can envisage the following
situations :
(i) No notice was given to the local authority under sub-section (2)
of Section 50 of the L.A. Act and as a result the local authority could not E
appear before the Collector to adduce evidence;
(ii) Notice was served on the local authority and in response to said
notice the local authority appeared before the Collector; and
(iii) Notice was served on the local authority but inspite of service of
F
such notice the local authority failed to appear and adduce evidence before
the Collector.
In a case where no notice is given to the local authority the position
of the local authority is not different from that of the Municipal Corpora- G
lion inNeelgangabai &Anr. v. State of Kamataka, (supra). In that case there
was an express provision in section 20 of L.A. Act as modified by Land
Acquisition (Mysore Extention Amendment) Act, 1961 providing for service of notice on the person or local authority for whom the acquisition is
made. On a construction of Section 50(2) we have found that service of
such a notice is implicit in the right conferred under Section 50(2) of the H
662
SUPREMECOURTREPORTS (1994)SUPP.4S.C.R.
A
L.A. Act, Since !the failure to give a notice would result in denial of the
right conferred qn the local authority under Section 50(2) it would be open
to the local autJlority to invoke the jurisdiction of the High Court under
Article 226 of thjo Constitution to challenge the award made by the Collector as was done :in Neelgangabai case (supra). In a case where notice has
B been served on the local authority and it has appeared before the Collector
the local autho~ity may feel aggrieved on account of it being denied
opportunity to a!lduce evidence or the evidence adduced by it having not
been considered by the Collector while making the award or the award
being vitiated by! malafides. Since the amount of the compensation is to be
paid by the local authority and it has an interest in the determination of
C the said amount, which has been given recognition in Section 50(2) of the
L.A. Act, the lo¢al authority would be a person aggrieved who can invoke
the jurisdiction c)f the High Court under Article 226 of the Constitution to
assail the award !in spite of the proviso precluding the local authority from
seeking a refer~nce.