LAAS/84/2007 of Land Acquisition Officer, Vs K. Vijaya Rama Rao on 31 December 2010

THE HON’BLE SRI JUSTICE GODA RAGHURAMANDTHE HON’BLE SRI JUSTICE SANJAY KUMAR

L.A.A.S.NOS.826 OF 2005,10 OF 2006, 84 OF 2007,85 OF 2007 AND 233 OF 2008

DATED DECEMBER, 2010

BETWEEN

The Land Acquisition Officer,Special Deputy Collector, L.A. Unit,Sc.Co.Ltd., Godavarikhani.

And Others. … Appellants/

Referring Officers

And

Gosikka Lamaiah and Others … Respondents/

Claimants.

THE HON’BLE SRI JUSTICE GODA RAGHURAMANDTHE HON’BLE SRI JUSTICE SANJAY KUMAR

L.A.A.S.NOS.826 OF 2005,10 OF 2006, 84 OF 2007,85 OF 2007 AND 233 OF 2008

COMMON JUDGMENT: (Per SK,J)

The State is in appeal under Section 54 of the Land AcquisitionAct, 1894 (for brevity, ‘the Act of 1894’) assailing the correctness of theindividual Orders and Decrees passed by the reference Court of theSenior Civil Judge, Peddapalli, in O.P.Nos.13/2004, 102/1999,58/2002, 36/2000 and 38/2001, enhancing the market value of theacquired lands determined by the Land Acquisition Officer.

These appeals are amenable to a conjoined disposal on a shortground. Hence, this common order.

Various extents of lands in Karimnagar District belonging to therespondents/claimants were acquired by the State for the extension ofRamagundam Thermal Power Project by way of an additional Unit.However, the State thereafter decided to invite internationalcompetitive bids for setting up an individual Thermal Power Projectand in the process, the bid submitted by the BPL Group of Companieswas accepted. A letter of intent was also issued to M/s.BPL Limited,the flagship company of the Group. Pursuant thereto, the erstwhileAndhra Pradesh State Electricity Board entered into a PowerPurchase Agreement with M/s.BPL Limited. In terms of the saidagreement, M/s.BPL Power Projects (AP) Pvt. Ltd. (hereinafter referredto as ‘the Company’) was incorporated for the purpose of setting up thePower Project. As per the agreement, the State was required to acquire the land for the Project and make it available to the Company.After the division of the erstwhile Andhra Pradesh State ElectricityBoard, the Transmission Corporation of Andhra Pradesh(APTRANSCO) became the successor-in-interest of the Board in sofar as the above agreement is concerned.

In all, Ac.1779.38 guntas of land situated in various villages ofthe District were acquired, of which Ac.1279.10 guntas was privateland and the balance Ac.500.28 guntas belonged to the Government.Various G.Os. were issued by the Government of Andhra Pradeshfacilitating the transfer of the acquired land to the Company asprovided under Section 44-A of the Act of 1894. Consequently, theAPTRANSCO entered into a Memorandum of Understanding with theCompany with regard to these acquired lands, visiting the liability ofpaying the compensation therefor including the enhancement of thecost of land acquired, if any, upon the Company.

The Special Deputy Collector, L.A. Unit, RTPS (Extension),Ramagundam, Karimnagar District, being the Land Acquisition Officer,passed several Awards determining the compensation payable for thevarious extents comprising the acquired land of Ac.1279.10 guntas.Aggrieved by such determination of the market value, several of theland owners sought reference under Section 18 of the Act of 1894. TheO.Ps. from which the present appeals arise are some of the referencesso made.

Pertinent to note, the Company was not a party before thereference Court. It was only upon the filing of appeals by the Stateagainst the enhancement effected by the reference Court that theCompany was put on notice, requiring it to deposit 50% of theenhanced compensation as per the interim orders passed by this Courtin the appeals. The Company thereupon got itself impleaded in theseappeals as a party respondent. Its contention at the outset is that theOrders and Decrees passed by the reference Court are liable to be setaside on the ground of violation of the statute and the principles of

natural justice. The Company asserted that it was a proper andnecessary party to the reference proceedings and the failure toimplead it prior to adjudication vitiated the entire exercise undertakenby the reference Court.

Sri V.Ravinder Rao, learned counsel appearing for theCompany, asserted that Section 50(2) of the Act of 1894 vested hisclient with a right to appear before the reference Court and adduceevidence for the purpose of determining the compensation. Learnedcounsel submitted that this right could be exercised by his client only ifit was put on notice of the proceedings instituted before the Court. Asthere was a failure in this regard and his client remained ignorant allthrough, the learned counsel submitted that there is a statutoryviolation in addition to the breach of the principles of natural justice.The learned counsel relied upon the Judgments of the Supreme Courtin U.P.AWAS EVAM VIKAS PARISHAD v. GYAN DEVI (DEAD) BY

LRs.[[1]]and NTPC LTD. v. STATE OF BIHAR[[2]]to support hiscontention that the Orders and Decrees under challenge areunsustainable on the short ground stated surpa.

In U.P.AWAS EVAM VIKAS PARISHAD[1], the majority opinion(4:1) was that the object underlying Section 50(2) of the Act of 1894, inthe context of acquisition for a company and a reference underSection 18 of the Act of 1894, was to safeguard the interest of theCompany which would be required to pay the amount of compensationthat would be determined by the reference Court, by enabling it toadduce evidence having a bearing on the amount of compensationbefore the Court, thereby assisting it to make a fair determination. TheCourt was of the opinion that this provision afforded a certain degree ofprotection to the Company in the matter of determination of the amountof compensation and therefore, Section 50(2) of the Act of 1894 mustbe construed as conferring a right on the Company for whom the landis acquired to participate in the acquisition proceedings at the stage ofdetermination of the amount of compensation before the Collector as well as the reference Court.

In the context of notice being given to the Company, theSupreme Court observed that the right afforded by Section 50(2) of theAct of 1894 can be effectively exercised only if the Company hasinformation of the proceedings which are pending before the referenceCourt. Therefore, the right conferred under the said Section carrieswith it the right to be given adequate notice by the reference Courtbefore whom the acquisition proceedings are pending, of the date onwhich the matter of determination of the amount of compensationwould be taken up. The Court held that service of such notice, beingnecessary for effectuating the right conferred on the Company underSection 50(2) of the Act of 1894, can therefore be regarded as anintegral part of the said right and the failure to give such notice wouldresult in denial of the said right, unless it can be shown that theCompany had knowledge about the pendency of the acquisitionproceedings before the reference Court and had not suffered anyprejudice on account of the failure to give such notice.

The Court further observed that the presence of the Company isnecessary for the decision on the question involved in the proceedingsbefore the reference Court and it is a proper party in the proceedings. Ifit is not impleaded as a party before the reference Court, the SupremeCourt was of the opinion that it could file an appeal against the Awardof the reference Court in the High Court after obtaining leave, ifprejudicially affected by such Award. In case the Government itselffiled an appeal against such enhancement, the Company would beentitled to support the State’s appeal and get itself impleaded as aparty.

I n NTPC LTD.[2], the Supreme Court having considered itsearlier view in U.P.AWAS EVAM VIKAS PARISHAD[1], observed:

“10. ……… The right which the acquiring body has isnot just a right to lead evidence before the Reference Court. Theacquiring body also has a right to support the award which has beenmade by the Land Acquisition Officer. This can be done by cross- examining witnesses led by the claimants. Non-impleadment of thebody on whose behalf acquisition has taken place, defeats this right.

11. ………

12. In our view, as the appellants were entitled to beimpleaded in the reference proceedings, the High Court was in errorin not setting aside the awards and referring the cases back to theReference Court with a direction that they be impleaded. The fact thatamounts have been enhanced, shows that prejudice has beencaused to the appellants. We, therefore, set aside the impugnedjudgment except to the extent that it directs that in all pendingreferences the appellants will be impleaded as parties. The awardsmade by the Reference Court in the 492 cases, where the amountshave been enhanced, are set aside. These cases are remitted backto the Reference Court. The appellants shall be deemed to have beenbrought on record in all these cases as well as all other pendingcases. The Reference Court shall try to dispose of the references asexpeditiously as possible. The statement of witnesses alreadyrecorded on behalf of the claimants need not be recorded afresh.However, the appellants shall have a right to cross-examine thewitnesses, if they so desire. For that purpose those witnesses shallbe recalled. If, however, those witnesses cannot be recalled for avalid reason e.g. because they have died or cannot be found thentheir statements shall not be excluded from consideration and shallbe read in evidence. All claimants shall also be entitled to adducefurther evidence, if they so desire. The appellants will be entitled toadduce evidence if they so desire.

13. We further direct that if the enhanced compensationhas been paid to the claimants then the same shall not be recalledbut shall finally be adjusted in the amount which may be fixed by theReference Court. It goes without saying that if the enhancedcompensation has not been paid, then the same shall not be paid.”

There is no evidence in the present cases that the Companywas aware of the reference proceedings initiated under Section 18 ofthe Act of 1894. The prejudice caused to it by such ignorance ismanifest as it has to foot the liability arising out of the enhancementeffected by the reference Court. That being so, the law laid down bythe Supreme Court in NTPC LTD.[2] leaves no room to doubt that theOrders and Decrees under challenge in these appeals before us mustnecessarily be set aside. The Company was deprived of an opportunity to cross-examine witnesses and adduce independentevidence for the determination of the market value. The statutory rightafforded to it by Section 50(2) of the Act of 1894 therefore stoodnegated.

We accordingly set aside the Orders and Decrees inO.P.Nos.13/2004, 102/1999, 58/2002, 36/2000 and 38/2001 and remitthe matters to the reference Court for consideration afresh giving dueopportunity to the Company, which shall be deemed to have beenimpleaded in the reference proceedings. The Company shall be givenfull opportunity as indicated in para 12 of NTPC LTD.[2 ]extracted suprain the process of determination of the market value of the acquiredlands.

As a portion of the enhanced amount under the Orders andDecrees under challenge has already been paid to therespondents/claimants, the same shall not be recalled pending thefinal adjudication by the reference Court and shall be adjusted againstthe amounts determined in this exercise. The enhanced unpaidamount shall not be paid and will abide by the final decision of thereference Court.

As the exercise undertaken by the reference Court is set atnaught and is now to commence from scratch, it is in the interest of therespondents/claimants as well as the Company that the matter begiven a quietus expeditiously. The reference Court shall accordinglygive priority to these matters and dispose of the same in accordancewith the observations made supra within six (6) months from the dateof receipt of a copy of this order.

The Appeals are accordingly allowed but in the circumstancesof the case, without any order as to costs.

_______________________

GODA RAGHURAM, J.

_________ DECEMBER, 2010.

VGSR

[1] (1995) 2 SCC 326 (1995) 2 SCC 326

[2] (2004) 12 SCC 96

____________________

SANJAY KUMAR, J.