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CASE NO.:

Appeal (civil) 7067 of 1994

PETITIONER:

U.P. AWAS EVAM VIKAS PARISHAD

RESPONDENT:

GYAN DEVI (DEAD) BY L.RS. AND ORS.

DATE OF JUDGMENT: 20/10/1994

BENCH:

M.N. VENKATACHALIAH CJ & P.B. SAWANT & S.C. AGRAWAL & R.M. SAHAI & S.P.

BHARUCHA

JUDGMENT:

JUDGMENT

1994 ( 4 ) Suppl. SCR 646

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 L.A. 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 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 when any housing 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 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 under sub-section (1) in respect of any

scheme shall be conclusive evidence that the scheme has been duly framed

and sanctioned. In cases where the scheme is sanctioned by the Board 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 acquisition of land or any interest

therein required by the 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 the State

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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 the L.A. Act. Some

of the said modifications which are relevant for the purpose of the present

case are :

(a) Clause (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

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 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) which provide

that 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 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 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 acquisition.

The Board framed a scheme known as the "Trans-Yamuna 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.A. Act) was published on January 31, 1970 and the notification

under Section 32 of the U.P. Act (analogous to declaration under 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 Rs. 3.75 per sq. yd. was awarded as for the first, second and

third belts respectively. The possession of the land was taken on April 27,

1978. At the instance 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

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 enhanced to Rs. 25.00 per sq. yd. for the lands falling in the first

belt, Rs. 23.50 per sq. for the lands falling in the second belt and Rs.

20.00 per sq. yd. for 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 the rate of 9% for the first year from the date of taking

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possession and at the rate of 15% per annum for the subsequent years has

been awarded. The High Court has, however, not awarded the amount payable

under sub-section (1-A) of Section 23 of the L.A. Act. Appeals 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 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 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 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 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.

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 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

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 :

"50. 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 cases the

local authority or Company concerned may appear and adduce evidence for the

purpose of determining the amount of compensation :

Provided that no such local authority or Company shall be entitled to

demand a reference under Section 18."

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 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

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determined by the Collector or by the Reference Court by enabling it to

adduce evidence having a bearing on the amount of compensation before the

Collector or the Court and thereby assist them in making a fair

determination. Such protection was necessary 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 insertion of the

Proviso in sub-section (1) of Section 11 of the L.A. Act by the Land

Acquisition (Amendment) Act, 1984, there were administrative instructions

requiring preliminary valuation by the Collector of the land being acquired

and if the Collector found that the eventual award would substantially

exceed the provisional valuation he was required to obtain further

instructions from the higher authorities. Now the proviso inserted in sub-

section (1) of Section 11 by the Amendment Act of 1984 lays down the

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 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 as the reference court.

The said right can be effectively 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 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 the 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,

therefore, be regarded as an integral part of the said right and the

failure to give such a notice would result in denial of the said right

unless it can be shown that the local authority had knowledge about the

pendency of the acquisition proceedings before the Collector or the

reference court and has not suffered any prejudice on account of failure to

give such notice.

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

:

"........ 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 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 more 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 and powers than those given to

Government itself."

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(See : V.G. Ramachandran - Law of Land Acquisition and Compensation, 7th

Edn., Vol.-l at p. 1045)

Having regard to the difference between the position of a local authority

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 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 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 LA. Act but only to highlight the

significance 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 L.A.

Act, it must be concluded that, subject to the limitation contained in the

proviso, a local authority for whom land is being acquired has a right 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 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.

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 interested 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 Karnataka & Ors., [1990] 3 SCC 617, the

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 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 civil court'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 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 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

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binding on the corporation. We are in agreement with this view." (p. 618)

Similarly, in Krishi Upaj Mandi Samiti v. Ashok Singhal & Ors., 1991 Supp.

(2) SCC 419, there was a requirement to serve a notice on the person or

body for whose benefit the acquisition was made. Such a notice was not

served on the Krishi Upaj Mandi Samiti by the reference court which

enhanced 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 Samiti. In that case the

court did not set aside the award of the reference court, although no

notice was served by that court, for the reason that the Samiti had

accepted and was satisfied with the award of the reference court.

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

reversed the said order of the High Court and allowed the application of

Union 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. Kolluni Ramaiah & Ors., [1994] 1 SCC 367, acquisition

was made under the provisions of the Requisitioning and Acquisition of

Immovable Property Act, 1952 for the purpose of Union of India and 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 High Court in this Court.

After observing that : "Properly speaking the Union of 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 Constitution,

remitted the matter to the High Court with the direction that the special

leave petitions filed by the Union of India in this Court must be treated

as cross-objections before the High Court against the award of the

arbitrator.

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.

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

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 this Court against the said

decision of the High Court. A preliminary objection was raised with regard

to the maintainability of the said appeal on the ground that the Municipal

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 did not confer

any interest in the Municipal Corporation so as to enable it to file an

appeal against the order of the High Court allowing the petition.

In Himalayan Tiles & Marbles (P) Ltd. v. Francis Victor Countinho (Dead) by

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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 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 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-sation, 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 agreement to pay the compensation. According to this Court:

"How can it be said that a person for whose benefit the land is acquired

and 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 heavy 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 Court 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 also

considered 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 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 the

Collector which would run counter to the proviso to Section 50(2). It was,

therefore, not correct to place reliance on Section 18(1). But the

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 by the proviso

on the right conferred by Section 50(2) of the L.A. Act cannot be so

construed as to deprive the local authority which feels aggrieved by the

determination of the amount of compensation by the Collector or by the

Reference Court to invoke the remedy under Article 226 of the Constitution

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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 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

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

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 Corporation

in Neelgangabai & 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 L.A.

Act, Since the failure to give a notice would result in denial of the right

conferred on the local authority under Section 50(2) it would be open to

the local authority to invoke the jurisdiction of the High Court under

Article 226 of the Constitution to challenge the award made by the

Collector as was done in Neelgangabai case (supra). In a case where notice

has been served on the local authority and it has appeared before the

Collector the local authority may feel aggrieved on account of it being

denied opportunity to adduce 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

the said amount, which has been given recognition in Section 50(2) of the

L.A. Act, the local authority would be a person aggrieved who can invoke

the jurisdiction of 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 reference. Such a challenge will, however, be limited to the

grounds on which judicial review is permissible under Article 226 of the

Constitution. In a case where the local authority has failed to appear

inspite of service of notice the local authority can have no cause for

grievance. Even in such a case it may be permissible for the local

authority to invoke the jurisdiction of the High Court under Article 226 of

the Constitution to assail the award if it is vitated by malafides or is

perverse.

We may now come to the stage of the proceedings before the court in a

reference under Section 18 of the L.A. Act made at the instance of a person

having interest in the land being acquired. At this stage also Section

50(2) of the L.A. Act envisages that the local authority has a right to

appear and adduce evidence before the Court. This right is independent of

the right that is available to the local authority to appear and adduce

evidence before the Collector. Even though the local authority had failed

to appear before the Collector inspite of notice or had appeared in

response to notice and had adduced evidence the local authority may

consider it necessary to adduce evidence to rebut the evidence adduced by

the person who has sought the reference and to defend the award made by the

Collector. Failure to give notice at this stage would result in denial of

the said right of the local authority. Before we consider the remedy that

is available for seeking redress against the denial of this right we may

examine whether the local authority has a right to be impleaded as a party

in the proceedings before the reference court. That raises the question

whether the local authority can be regarded as a necessary or a proper

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party. The law is well settled that a necessary party is one without whom

no order can be made effectively and a proper party is one in whose absence

an effective order can be made but whose presence is necessary for a

complete and final decision of the question involved in the proceeding.

(See: Udit Narain Singh Malpaharia v. Additional Member, Board of Revenue,

[1963] Supp. 1 SCR 676, at p. 681. A local authority for whom land is being

acquired has a right to participate in the acquisition proceedings in the

matter of determination of the amount of compensation while they are

pending before the Collector and to adduce evidence in the said

proceedings. While it is precluded from seeking a reference against the

award of the Collector it can defend the award and oppose the enhancement

of the amount of compensation sought before the reference court by the

person interested in the land. Moreover the local authority has a right to

appear and adduce evidence before the reference court. Having regard to the

aforesaid circumstances, we are of the opinion that the presence of the

local authority is necessary for the decision of the question involved in

the proceedings before the reference court and it is a proper party in the

proceedings. The local authority is, therefore, entitled to be impleaded as

a party in the proceedings before the reference court.

In case the amount of compensation has been enhanced by the court and no

appeal is filed by the Government the local authority if adversely affected

by such enhancement may file an appeal with the leave of the court. This

right of the local authority does not depend on its being impleaded as a

party in the proceedings before the reference court. Even if the local

authority is not impleaded as a party before the reference court it can

file an appeal against the award of the reference court in the High Court

after obtaining leave if it is prejudicially affected by the award. In case

the Government files an appeal against the enhancement of the award the

local authority is entitled to support the said appeal and get itself

impleaded as a party. When the person having an interest in the land files

an appeal in the High Court against the award of the reference court and

seeks enhancement of the amount of compensation the local authority should

be impleaded as a party in the said appeal and it is entitled to be served

the notice of the said appeal so that it can defend the award of the.

reference court and oppose enhancement of the amount of compensation before

the High Court. The same will be the situation in case of an appeal to this

Court from the decision of the High Court. Under Section 50(2) of the L.A.

Act the company for whom land is being acquired is also entitled to appear

and adduce evidence for the purpose of determining the compensation. Since

the company for whom land is acquired stands on the same footing as a local

authority whatever has been said with regard to an local authority would

apply to a company. It is, however, made clear that matters which stand

finally concluded will not be reopened.

To sum up, our conclusions are :

1. Section 50(2) of the L.A. 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.

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.

3. The proviso to Section 50(2) only precludes a local authority from

seeking a reference but it does not deprive the local authority which feels

aggrieved by the determination of the amount of compensation by the

Collector 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.

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

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proceedings the local authority can invoke the jurisdiction of the High

Court under Article 226 of the Constitution.

5. Even when notice has been served on the local authority 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.

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

proceed-ings wherein it can defend the determination of the amount of

compensa-tion by the Collector and oppose enhancement of the said amount

and also adduce evidence in that regard.

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.

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, the should be impleaded as a party and is entitled to

be served notice of the said appeal. This would apply to an appeal in the

High Court as well as in this Court.

9. Since a company for whom land is being acquired has 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.

10. The matters which stand finally concluded will, however, not be

reopened.

We may now consider whether in the facts of the present case the Board can

be held entitled to any relief. It is not disputed that no notice under

sub-section (2) of Section 50 of the L.A. Act was served on the Board

either 'by the Special Land Acquisition Officer or by the Tribunal. The

Board, however, did not feel aggrieved by the award made by the Special

Land Acquisition Officer or by the Tribunal. It felt aggrieved only by the

decision of the High Court dated April 18, 1991 in First Appeals Nos. 586,

587 and 641 of 1985 whereby the amount of compensation as determined by the

Tribunal was enhanced. The Board does not seem to be aggrieved by the

judgment of the High Court dated December 21, 1990 in First Appeals Nos.

584, 585 and 642 of 1985 whereby the High Court has maintained the award of

the Tribunal. In these circumstances, it would be just and proper that the

Board is heard by the High Court in the appeals filed by the land owners

who are seeking enhancement of the amount of compensation awarded by the

Tribunal before any such enhancement is made in the said appeals.

We, therefore, allow the applications submitted by the Board for being

impleaded as a respondent in the appeals filed by the land owners in this

Court and direct that the Board be also impleaded as a respondent in the

appeals filed by the land owners in the High Court. The judgment of the

Allahabad High Court dated December 21, 1990 in First Appeals Nos. 584, 585

and 642 of 1985 and the judgment of the said High Court dated April 18,

1991 in First Appeals Nos. 586, 587 and 641 of 1985 as well as the order

dated January 20, 1993 on the review applications filed against the

judgment dated April 18, 1991 are set aside and the said appeals are

remitted to the High Court for decision in accordance with law. The appeals

are disposed of accordingly. There will be no order as to costs.

R.M. SAHAI, J. The U.P. Avas Evam Vikas Parishad (Uttar Pradesh Housing and

Development Corporation) a statutory Board created under the Uttar Pradesh

Avas Evam Vikas Parishad Adhiniyam, 1965 (U.P. Act No. 1 of 1966)

(hereinafter referred to as 'the Act') with power to frame and execute

housing scheme and other projects, to plan and co-ordinate various housing

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activities and perform other functions as provided in the Act seeks

adjudication on the question of law whether the Corporation/Board is a

necessary party in proceedings for determination of compensation of the

land acquired under the Land Acquisition Act, 1894 (referred as 'the L.A.

Act') as amended by the Act.

Facts even though short and simple are necessary to be mentioned, in brief,

at this stage only for deciding the issue of non- impleadment of the

appellant, a local authority in compensation proceedings. Suffice it to

mention that the Board did not appear before the Collector nor any

opportunity was sought by it to lead evidence on compensation, as provided

by section 50 of the L.A. Act, consequently it was not made a party either

before the Tribunal which under the Act is empowered to hear reference

against the award made by the Collector or in first appeal in the High

Court. What is claimed is that the Board came to known of the decisions of

the High Court and of the Tribunal after the claimants filed special Lave

Petitions in this Court claiming additional compensation under Section

23(1-A) of the Land Acquisition (Amendment) Act of 1984. Consequently it

filed an application before the High Court for recall and review of the

order passed by it but the applications having been rejected it has

approached this Court by way of these appeals. The Board has also filed

application in other Special Leave Petitions filed by the claimants for

being impleaded and seeks same relief, namely, setting aside the order of

the High Court as it was passed without impleading necessary party. The

ground for seeking recall of the order passed by the High Court was founded

on the right of the acquiring body, a local authority, to be impleaded as a

party in the reference. The entire proceedings are said to be vitiated as

in absence of the Board which is a statutory body and which has to pay

compensation for the land acquired the proceedings could not have been

decided and no order could have been passed adversely affecting it as it

has to pay compensation and is statutorily entitled to lead evidence. Non-

implementation or failure to give notice amounted to denial of natural

justice.

To appreciate the controversy it appears necessary to give, in brief, the

provisions of the Act itself to ascertain the nature and duty which the

Board is expected to perform, the extent and power it enjoys in acquiring

the land and the manner in which such power is to be implemented. As the

preamble of the Act shows it was enacted to provide for the establishment

and functioning of a housing and development board. Section 15 of the Act

prescribes the functions of such Board which includes power to frame and

execute housing activities, improvement schemes and other projects and

discharge various other functions. Clause (k) of sub-section (1) of Section

15 empowers the Board to acquire moveable and immovable properties for any

of the purposes mentioned in the Section. Section 16 provides that the

Board may make a housing or improvement scheme on its own motion or at the

instance of a local authority. Section 17 provides those matters which

could be provided in the scheme. Sections 18 to 27 describe the various

types of housing or improvement schemes which the Board may undertake.

Section 28 requires the Board to give notice of the scheme by publication

in Gazette and two daily newspapers having circulation in the area

comprised in the scheme. Sub- section (3) of Section 28 requires the

Housing Commissioner to deliver copy of the map, details of land proposed

to be acquired to any person who applies for the same. Section 29 requires

the Board to serve notice within six weeks of the publication of notice

under section 28 on classes of persons whose land is to be acquired

intimating them that the Board proposes to .acquire the land. Section 30

entitles the person concerned to file objection and under Section 31 the

Board may after giving opportunity of hearing to the objector either

abandon the scheme or sanction it and if the scheme exceeds Rs. Twenty

lakhs then submit to the State Government for sanction with such

modifications as the Board may suggest. Section 32 requires the Board to

notify the scheme as sanctioned by the Board or the State Government. The

effect of such notification under Section 32 is that the scheme comes into

force from the date of the notification.

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For purposes of acquiring land to implement the notified scheme the Act

empowers the Board to take action under L.A. Act to the extent it is

modified by the Act. Section 55 of the Act is extracted below :

"55. Power to acquire land - (1) Any land or any interest therein required

by the Board for any of the purposes of this Act, may be acquired under the

provisions of the Land Acquisition Act, 1984 (Act No. 1 of 1894), as

amended in its application to Uttar Pradesh, which for this purpose shall

be subject to the modifications specified in the Schedule to this Act.

(2) If any land in respect of which betterment fee has been levied under

this Act is subsequently required for any of the purposes of this Act, such

levy shall not be deemed to prevent the acquisition of the land under the

Land Acquisition Act, 1894 (Act No. 1 of 1894)."

The modifications in the L.A. Act by the Schedule are reproduced to the

extent they are relevant :

"2. Effect of notices under this Act. - (1) The first publication, in the

Official Gazette, of a notice of any housing or improvement scheme under

Section 28 or under clause (a) of sub-section (3) of Section 31 of the Act

shall be substituted for and have, in relation to any land proposed to be

acquired under the scheme, the same effect as publication in the Official

Gazette, and in the locality, of a notification under sub-section (1) of

Section 4 of the said Act, except where a notification under Section 4 or a

declaration under Section 6 of the said Act has previously been made and is

still in force, and the provisions of Section 5-A of the said Act shall be

inapplicable in the case of such land.

(2) The issue of a notice under clause (c) of sub-section (3) of Section 23

of this Act in the case of land acquired under a Bhavi Sarak Yojana and the

publication of a notification under sub-sec-tion (1), or as the case may be

under sub-section (4) of Section 32 of this Act in the case of land

acquired under any other housing or improvement scheme under this Act shall

be substituted for and have the same effect as a declaration by the State

Government under Section 6 of the said Act, unless a declaration under the

last mentioned section has previously been made and is still in force.

(3) In a case to which sub-paragraph (1) or sub- paragraph (2) applies, a

notification under sub-section (2) of Section 33 or under sub-section (3)

of Section 49 of the Act involving alteration of the extent of the land

proposed to be acquired shall have the effect of correspondingly modifying

the notification under sub-section (1) of Section 4 and declaration under

Section 6 of the said Act, so, however, that any such modification shall be

without prejudice to the validity of anything previously done under the

original notification or declaration."

"5. Amendment of Section 23 of the said Act - In Section 23 of the said Act

-

(i) for existing explanation to the clause "firstly", the following shall

be deemed to be substituted :

"Explanation - In judging the market value aforesaid in any case were a

land is acquired under a housing or improvement scheme under the Uttar

Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965, if any building has been

erected, re- erected, added or altered in contravention of the provisions

of clause (a) of sub-section (3) of Section 23, sub-section (3) of Section

24 or Section 35 of the said Adhiniyam, any increase in the market value

resulting from such erection, re-erection, addition or alteration shall be

disregarded.";

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(ii) after the existing sub-section (1) the following shall be added as

sub-section (2), namely -

"(2) In addition to the market value of the land as above provided, the

court shall in every case award a sum of fifteen percentum of such market

value in consideration of the compulsory nature of the acquisition."

The acquisition as is clear from Section 55 of the Act is under the

provisions of the L.A. Act except to the extent it has been modified by the

Schedule. Proceedings under Section 28 and notification under Section 32

are analogous to Sections 4 and 6 of the L.A. Act. But once notification

under Section 32 of the Act has been issued it is the L.A. Act which comes

into operation. The Collector takes over for acquisition under Section 7 of

the L.A. Act for marking out, measuring and planning under Section 8 and

issuing notices under Section 9 to the persons interested intimating them

that the Government intends to take possession and claims for compensation

may be made to him who after making enquiries is required to make award

under Section 11 of the L.A. Act. But for reference to the Court against

the award the Act has made a departure and provided for creation of

Tribunal under Section 64 of the which is reproduced below :

"64. Functions and constitution of Tribunal - (1) The State Government may,

by notification in the Gazette, constitute one or more Tribunals for the

purposes of -

(a) performing the functions of the Court with reference to the

acquisition of land for the Board under the Land Acquisition Act, 1894 (Act

No. 1 of 1894), as modified by the Schedule to this Act;

(b) determining, in case of dispute and on reference in the prescribed

manner the compensation payable by the Board under the various provisions

of this Act;

(c) deciding appeals relating to levy or assessment of betterment fee;

(d) deciding appeals under Sections 36 and 37; and

(e) deciding such other matters as may be prescribed.

(2) The Tribunal shall exercise jurisdiction with respect of such area as

may be specified in the notification under sub section (1).

(3) The Tribunal shall consist of a civil judicial officer not below the

rank of District Judge.

Explanation - The expression "District Judge" includes an addi-tional

District Judge.

(4) Except as otherwise provided by or under this Act, the Tribunal shall

have the same powers as are vested in a civil court under the Code of Civil

Procedure, 1908 (Act No. VI of 1908), shall follow the same procedure as

laid down in that Code, and shall be deemed to be a civil court within the

meaning of Sections 480 and 482 of the Code of Criminal Procedure, 1898

(Act No. V of 1898), and any proceeding before the tribunal shall be deemed

to be a judicial proceeding within the meaning of Sections 193 and 228 of

the Indian Penal Code (Act No. XLV of 1860).

(5) The judicial officer appointed as Tribunal shall be paid such

remuneration as may be prescribed.

(6) The Tribunal may, with the previous sanction of the State Government,

appoint such officers and servants as it considers necessary for the

conduct of its business, and the remuneration and other conditions of

service of such officers and servants shall be such as may be prescribed.

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(7) The remuneration payable to the judicial officer appointed as Tribunal

and other officers and servants of the Tribunal shall be paid out of the

fund of the Board."

The award by the tribunal becomes an award of the Court under L.A. Act as

is clear from Section 66(1) of the Act which is extracted below:

"66. Finality of decisions of Tribunal - (1) An award of the Tribunal in a

case relating to the acquisition of land under the Land Acquisition Act,

1894 (Act No. 1 of 1894), as modified by the Schedule to this Act, shall be

deemed to be an award of the court under that Act and shall, subject to the

provisions of Section 54 of that Act, be final.

(2).............".

It is thus clear that except for certain modifications and the constitution

of a tribunal for purposes of deciding the reference the entire proceedings

are taken under the L.A. Act. The Act does not provide the procedure in

accordance with which the tribunal has to function except that it shall

have the powers as are vested in the civil court. Section 64(b) no doubt

provides for determining in case of dispute and on reference in the

prescribed manner the compensation payable by the Board but the rules which

have been framed in exercise of power under Section 94 of the Act have not

provided any procedure as to how the reference has to be heard and what

procedure has to be followed. The Act is thus silent on affording any

opportunity of hearing to the Board while hearing the reference under

Section 64 of the Act.

Before proceeding further it would be appropriate to examine the decisions

of this Court on this aspect. In Himalaya Tiles and Marble (P) Ltd. v.

Francis Victor Countinho (dead) by Lrs, AIR 1980 SC 1118 this Court

expanded the meaning of expression 'person interested' in Section 18 of the

L.A. Act and construed it to include a person who is required to pay

compensation. It was' held,

"It seems to us that the definition of 'a person interested' given in

Section 18 is an inclusive definition and must be liberally construed so as

to embrace all persons who may be directly or indirectly interested either

in the title to the land or in the quantum of compensation. In the instant

case, it is not disputed that the lands were actually acquired for the

purpose of the company and once the land vested in the Government, after

acquisition, it stood transferred to the company under the agreement

entered into between the company and the government. Thus it cannot be said

that the company had to claim or tide to the land at all. Secondly since

under the agreement the company had to pay the compensation 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."

Support was drawn by the Bench for this from Sunder Lal v. Paramsukhdas,

[1968) 1 SCR 362 where observations were made to the following effect :

"It will be noticed that it is an inclusive definition. It is not necessary

that in order to fall within the definition a person should claim an

interest in land, which has been acquired. A person becomes a person

interested if he claims an interest in compensation to be awarded. It seems

to us that Paramsukhdas is a "person interested" within Sec. 3(b) of the

Act because he claims an interest in compensation.........."

The context in which these observation were made were entirely different.

Land of one Sunder Lal was acquired. Khushal Singh was a lessee. In

proceedings for compensation Khushal Singh also staked his claim. It was

accepted. One Paramsukhdas in the meantime had obtained a decree against

Khushal Singh. He, therefore, made an application that he may be impleaded

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and' the amount of compensation determined to be paid to Khushal Singh may

be paid to him in satisfaction of his money decree. It was it this context

that the Court observed,

"It seems to us that Paramsukhdas was clearly a person interested in the

objections which were pending before the Court in the references made to it

and that he was also a person whose interest would be affected by the

objections within Sec. 21. He was accordingly entitled to be made a

party............."

This observation by the Court made in entirely different context could not

have been extended to a case like Himalaya Tiles (supra). The observation

that the words 'person interested' is inclusive definition cannot be

disputed. But with profound respect to the Bench in Himalaya Tiles the

words 'person interested' used in Section 18 were read in isolation. In

fact this expression derives its colour from Section 9 which requires the

Collector to issue notice to 'persons interested'. In Section 9 it means

only those who are either owners or in any manner interested in

compensation for the land. No different meaning could be given to it in

Section 18. It could not be construed reversely. That is including not only

those persons who were interested in compensation but even those who were

opposed to compensation. In Union of India v. Sher Singh & Ors., JT (1993)

SC 693 wherein it was held that the 'person interested' in Section 18(1) of

the L.A. Act. should be construed liberally so as to include a body, local

authority or a company for whose benefit the land was acquired under who

was bound under the agreement to pay the compensation. The Bench mainly

relied on the decision on Himalaya Tiles (supra) which has been adverted

earlier. It is not necessary to advert to various decisions rendered by the

High Court of Punjab and Haryana either in Full Bench or Division Bench to

which reference is made. But it is necessary to advert to Neelgangabai v.

State of Kamataka, [1990] 3 SCC 617 which was referred and followed by the

Bench in Sher Singh (supra) as the decision given by the Karnataka High

Court that in Land Acquisition proceedings it was necessary to give notice

to the acquiring body was taken to be laying down correct law as it was

approved by this Court as well. In that decision even though the reference

was decided on the basis of consent of the land owners and the State yet

the order was set aside by the High Court in writ petition and it was held

that since the land was acquired for purposes of the corporation and the

burden of payment of compensation was on it it was necessary to issue show

cause notice on it. But the reason for the taking the view was not burden

of compensation as understood by the Bench in Sher Singh (supra) but the

statutory provision of Section 20 of the L. A. Act as applicable to the

State of Karnataka. It is reproduced below :

"20. service of notice - The court shall thereupon cause a notice,

specifying the day on which the court will proceed to determine the

reference, and directing their appearance before the court on that day, to

be served on the following persons, namely : -

(a) the Deputy Commissioner;

(b) all persons interested in the reference; and

(c) if the acquisition is not made for government, the person or authority

for whom it is made."

The decision was thus rendered on specific provision of the Act and this

important finding does no appear to have been brought to the notice of the

Court. What is necessary to be mentioned is that the Bench deciding the

case of Neelgangabai (supra) did not base its decision on Himalaya Tiles

(supra) as in view of clear provisions in clause (c) for issuing notice to

the authority for whom the acquisition was being made it did not consider

it necessary to enter into any other controversy. The decision thus turned

on specific provisions of the Karnataka Act and no assistance could have

been derived from it for deciding if issuing of notice to acquiring body

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was mandatory in every case where the land was acquired for company or

local authority. Similarly in Krishi Upaj Mandi Samiti v. Ashok Singhal &

Others, [1991] Supp. 2 SCC 419 Section 54 of the Krishi Upaj Act required

notice to be issued to persons interested which included the body for which

the land was being acquired and, therefore, it was conceded before this

Court that the Judgment given by the High Court was liable to be set aside

as it was rendered in violation of the mandatory provisions of the Act. No

such local amendment to the L.A. Act appears to have been made by the State

of Haryana. Yet the Bench relying on the ratio mainly in Himalaya Tiles

(supra) and the two decisions one, on the Karnataka Act and the other under

Krishi Upaj Mandi Samiti Adhiniyam, was of the view that no reference by

the Court could be decided without impleading the acquiring body as party

to the proceedings. The decision thus rendered in Union of India v. Sher

Singh (supra) does not lay down the correct law. Nor the interpretation in

the Himalaya Tiles based on construction of the expression 'persons

interested' under Section 18(1) without adverting to Section 9 or any other

principle of law can be said to lay down correct law.

Having dealt with the decisions and noticed their peculiar features the

principal issue may be reverted whether there is any provision from which

it can be inferred that a local authority much less an acquiring body is a

necessary or even a proper party whose impleadment is necessary and failure

to do so vitiates the proceedings. Allied to this is the issue whether even

in absence of such provision can the local authority be impleaded on

principle of nature justice or fair hearing and if this be so then to what

extent it is available and how far it affects the proceedings. The relevant

provisions of the Act which are silent on this aspect have already been

noticed. There is no express provision for impleading the acquiring body or

local body in the compensation proceedings. Award is made by the Collector

under Section 11 of the L.A. Act whereas reference is heard and decided

under Section 64 of the Act. No notice or opportunity of hearing is

contemplated at either stage to the Board or to put it more precisely the

acquiring body. At the award stage it is the Collector who is directed to

take over under directions of the appropriate authority. From the

publication of notification under section 32, that is Section 6 of the L.A.

Act, till making of the award, determining compensation and taking over

possession every proceeding is between Collector and the claimant or the

person interested. The Collector acts for and on behalf of the Government

as the acquisition is at the instance of the Government. The Act does not

contemplate presence or absence of the acquiring body in the proceedings

taken by the Collector, except of the local authority to limited extent

which shall be referred presently. Inquiry under the L.A. Act for

determination of compensation is contemplated both at the stage of making

of award by the Collector under Section 11 or Court under Action 18 of the

L.A. Act and Section 64 of the Act. The scope of the inquiry under Section

11 of the L.A. Act is confined to the objections, if any, filed by the

persons interested in pursuance of the notice issued under Section 9 of the

L.A. Act. Who such person is and what objections can be filed by him are

mentioned in Section 9 itself. Section 9 read as under :

"S.9. Notice to persons interested - (1) The Collector shall then cause

public notice to be given at convenient places on or near the land to be

taken, stating that the Government intends to take possession of the land,

and that claims to compensation for all interests in such land may be made

to him.

(2) Such notice shall state the particulars of the land so needed, and

shall require all persons interested in the land to appear personally or by

agent before the Collector at a time and,place therein mentioned (such time

not being earlier than fifteen days after the date of publication of the

notice), and to state the nature of their respective interests in the land

and the amount and particulars of their claims to compensation for such

interests, and their cbjections (if any) to the measurements made under

Section 8. The Collector may in any case require such statement to be made

in writing and signed by the party or his agent.

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(3) The Collector shall also serve notice to the same effect on the

occupier (if any) of such land and on all such persons known or believed to

be interested therein, or to be entitled to act for persons so interested,

as reside, or have agents authorised to receive service on their behalf,

within the revenue district in which the land is situate.

(4) In case any person so interested resides elsewhere, and has no such

agent, the notice shall be sent to him by post in a letter addressed to him

at his last known residence, address or place of business and registered

under Sections 28 and 29 of the India Post Office Act, 11898."

Sub-section (1) itself makes it clear that an interested person is one who

has an interest in the land which is intended to be taken possession of by

the Government. This has been extended by sub-section (3) even to occupiers

of land. An acquiring body cannot by stretching of language be deemed to be

person interested within Section 9 of the L.A. Act. It further stands

clarified by sub-section (2) as the particulars mentioned in the notice by

the Collector on which a person interested is required to stake his claim

in" his respective interest in the land and the amount and particulars of

claim on compensation and to measurement of land under Section 8. The

provision does not even remotely apply to an acquiring body. Section 10(1)

further throws light on it. It is extracted below : S.10(l) Power to

require and enforce the making of statements as to means and interests -

The Collector may also require any such person to make or deliver to him,

at a time and place mentioned (such time not being earlier than fifteen

days after the date of the requisition), a statement containing, so far as

may be practicable the name of every other person possessing any interest

in the land or any part thereof as a co-proprietor, sub-proprietor,

mortgagee, tenant or otherwise, and of the nature of such interest, and of

the rents and profits (if any) received or receivable on account thereof

for three years next preceding the date of the statement."

It again emphasises person interested to be a person having interest in the

land who is entitled to receive compensation. After the objections are

filed by the persons interested an inquiry is held by the Collector and

award is made under Section 11 of the L.A. Act. Section 11 as extracted

below ;

"S.ll. Enquiry and award by Collector - (1) On the day so fixed, or on any

other day to which the enquiry has been adjourned, the Collector shall

proceed to enquire into the objections (if any) which any person interested

has stated pursuant to a notice given under Section 9 to the measurements

made under Section 8, and into the value of the land at the date of the

publication of the notification under Section 4, sub-section (1), and into

the respective interests of the persons claiming the compensation and shall

make an award under his hand of -

(i) the true area of the land;

(ii) the compensation which in his opinion should be allowed for the land;

and

(iii) the apportionment of the said compensation among all the persons

known or believed to be interested in the land, of whom, or of whose

claims, he has information, whether or not they have respectively appeared

before him."

Provided that no award shall be made by the Collector under this sub-

section without the previous approval of the appropriate Government or of

such officer as the appropriate Government may authorise in this behalf.:

Provided further that it shall be competent for the appropriate Government

to direct that the Collector may make such award without such approval in

such class of cases as the appropriate Government may specify in this

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behalf.

(2) Notwithstanding anything contained in sub-section (1), if at any stage

of the proceedings, the Collector is satisfied that all the persons

interested in the land who appeared before him have agreed in writing on

the matters to be included in the award of the Collector in the form

prescribed by rules made by the appropriate Government, he may, without

making further enquiry, make an award according to the terms of such

agreement.

(3) The determination of compensation for any land under subsection (2)

shall not in any way affect the determination of compensation in respect of

other lands in the same locality or elsewhere in accordance with the other

provisions of this Act.

(4) Notwithstanding anything contained in the Registration Act, 1908 (16

of 1908), no agreement made under sub-section (2) shall be liable to

registration under that Act."

The scope of inquiry is confined to the objections raised under Section 9

of the L.A. Act. The acquiring body does not figure anywhere. There is no

Us between acquiring body and the Collector. The Collector acts for and on

behalf of the acquiring body. No adversorial lis arises between the two.

The acquiring body is not a person interested within meaning of Sections 9

and 10. Even the award that is made under Section 11 is in respect of the

land for which objection was raised. When the statute does not permit an

acquiring body to raise objection, if any, it cannot claim to be party. An

award made under Section 11 is made final and conclusive under Section 12

between the Collector and the persons interested. It can be reopened under

Section 12A to the limited extent mentioned therein. If the acquiring body

is permitted to claim that it too is covered in the person interested, it

would not only destroy the legislative conclusiveness visualised to an

award but result in uncertainity of the proceedings till the end.

Same conclusion follows from Sections 18, 19 and 20 of the L.A. Act which

deal with reference to the Court, the person to whom notice has to be

issued and the matters which have to be decided. Sub-section (1) of Section

18 is extracted below : -

"S. 18. Reference to Court. - (1) Any person interested who has not

accepted the award may, by written application to the Collector, require

that the matter be referred by the Collector for the determination of the

Court, whether his objection be to the measurement of the land, the amount

of the compensation, the persons to whom it is payable, or the

apportionment of the compensation among the persons interested."

The right to seek reference is a limited right to the person interested who

has not accepted the award. The person interested in the Section cannot

mean any one other than the one who is visualised in Sections 9 and 10 of

the L.A. Act. The scope of reference under Section 18 is the same as under

Section 11. Therefore, person interested cannot have any meaning different

than what it is under Sections 9 and 10. Section 19 prescribes the

procedure when an objection is made to the award. It requires the Collector

that in making the reference he shall state for information of the Court,

(a) the situation and extent of the land, with particulars of any trees,

buildings or standing crops thereon; (b) the names of the persons whom he

has reason to think interested in such land; (c) the amount awarded for

damages and paid or tendered under Sections 5 and 17, or either of them,

and the amount of compensation awarded under Section 11; and (d) if the

objection be to the amount of the compensation, the grounds on which the

amount of compensation was determined. Section 21 restricts the scope of

proceedings to, 'the scope of the enquiry in every such proceeding shall be

restricted to a consideration of the interests of the persons affected by

the objection'. It is thus clear that an acquiring body is not contemplated

to be impleaded or made a party as the proceedings, whether at the stage of

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inquiry by the Collector and making of award or when the matter is pending

in the Court in reference, are between the Collector and the person

interested and not the acquiring body.

Why it is so that no provision is made for giving any notice or hearing to

the acquiring body for whom the land is acquired. The reason is that

whenever a company, an industrial unit or any Government department needs

any land for any purpose it moves the Government and it is after

examination of the proposal made by the person concerned that a decision is

taken whether the land should be acquired or not and, thereafter so far the

acquiring body is concerned it is not required to be impleaded in the

proceedings as under the Act it is duty and responsibility of the Collec-

tor/Land Acquisition Officer to take up the matter, proceed in accordance -

with the procedure provided under the Act and determine compensation

payable to the claimant. That is why the Act permits only the claimant or

person interested in determination of compensation to seek a reference. In

reference it is not the validity of the notification which is in issue but

the only lis is about the amount of compensation and, therefore, again the

person for whose benefit the land is acquired is not required to be

impleaded or given any notice. It is appropriate to reproduce Section 50 of

the L.A. Act at this stage :

"50. 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 cases the

local authority or company concerned may appear and adduce evidence for the

purpose of determining the amount of compensation :

Provided that no such local authority or company shall be entitled to

demand a reference under Section 18."

This Section enables a local authority to appear and adduce evidence for

purpose of determining compensation. It has been permitted to participate

for a limited purpose only as is apparent from the report of the Select

Committee of 23rd March 1893 which is extracted below :

"To Section 50 we have added at the desire of the Government of Bombay a

clause permitting the appearance before the Collector or the Court, of the

representative of a Local Authority or Com-pany on whose behalf land is

being acquired. We can not, however agree that the authority should be

permitted to appeal from the Collector's award. We have not given to

Government itself power to make this appeal because the Collector is only

the agent of Government in the acquisition 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 ought to provide, that

when the Collector finds cause to anticipate that his eventual award will

substantially exceed his provisional estimate he shall stay proceedings

till he receives the further instructions of higher authority. No local

authority or company is compelled to prove under the Land Acquisition Act.

If it can procure land more cheaply by private negotiation it is certainly

at liberty to do so but it elects to set in motion the very special power

given to Govern-ment or if the public objects, it can expect no higher

privileges and powers than those given to Government itself."

But option to participate does not mean right to be impleaded. When the

Legislation precludes such person from being made a party obviously because

the-Collector acts on its behalf then such a person cannot claim it as a

matter of right. Permitting participation of the local authority for the

limited purpose visualised by sub-section (2) of Section 50 cannot be

stretched to make the local authority a necessary party by giving extended

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meaning to the expression 'person interested' used in Section 18 of the

L.A. Act. No provision in the local Act makes the Board a necessary party.

It only empowers it to assist the Collector or Court in determining compen-

1 sation by adducing evidence. A person is impleaded or can claim to be

impleaded if it has any interest or lis. An acquiring body including the

local authority has no lis except to assist the Collector or the Court in

determin-ing compensation. The Legislative anxiety to preclude any such

person from being impleaded is clearly brought out by the proviso to sub-

section (2) of Section 50 as it specifically debars the local authority or

the company from demanding any reference. The determination of compensation

by the Collector is final and conclusive under Section 12 of the L.A. Act

as between the Collector and the persons interested. This as explained

earlier, is subject to provisions of the L.A. Act. And those provisions are

Section 12A, 18 or appeal etc. It cannot be disturbed at the instance of

the local authority. In Udit Narain Singh Malpaharia v. Additional Member

Board of Revenue, Bihar, AIR (1963) SC 786 this Court observed thus,

"To answer the question raised it would be convenient at the outset to

ascertain who are necessary or proper parties in a proceeding. The law on

the subject is well settled : it is enough if we state the principle. A

necessary party is one without whom no order can be made effectively; a

proper party is one in whose absence an effective order can be made but

whose presence is necessary for a complete and final decision on the

question involved in the proceeding."

A local authority is not even a proper party in the sense that the court or

the claimant or the interested person seeking reference or filing appeal

are not required to implead them as in absence of their appearance and

leading any evidence their presence is immaterial for complete and final

decision of the proceedings.

Absence of any provision for impleading acquiring body appears to be based

on equity and justice. A company or local authority seeking acquisition of

land and displacing an individual is more concerned with the land.

Compensation no doubt has to be paid by it but the Legislature being aware

of that its determination is on the date the notification is issued under

Section 4 of the L.A. Act and the long delay it takes in court it

considered it just and proper to exclude impleadment of acquiring body as

it was not only unnecessary but even unfair as it might result in delay to

the prejudice of the owner of the land. Between the date when notification

is issued and the date when possession is acquired the value of the land

goes up but the land owner does not get any benefit of it whereas the

acquiring body by paying the value of the land determined at least three

years earlier after amendment, gets the land which becomes more valuable.

Further the acquiring body is permitted to appear and adduce evidence. But

if one does not exercise the option the Legislature does not grant any

further indulgence. If some one is interested in appearing before the Court

to assist in determination of compensation, the Court may permit it. An

acquiring body may have locus to appear on its own but so long it does not

appear it is not a necessary party the non-impleadment of which vitiates

the proceedings. Between the locus and right of impleadment there is world

of difference. The two cannot be equated. A person having locus may not be

denied appearance but a person who is necessary party cannot be denied

impleadment. The former is permissive the latter is mandatory. A local body

may have locus to appear for the limited purpose purpose but once it opts

to keep out it cannot claim to be necessary party whose non-impleadment

renders the proceedings invalid. More important than this is the grave

injustice involve in such construction. An acquiring body or a local

authority cannot be permitted to sit on the fence wait and watch and then

appear after finalisation of compensation to claim that it may be permitted

second innings as it would result in undue advantage to the stronger party

between the two and ruinous to the weaker. He who after waiting and

fighting for the compensation for years in the courts, which takes

considerable time, is faced with the danger of being reduced to naught and

face the litigative process once again. His land is gone, compensation is

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not paid, and above all courts hazard are once more thrust on him. Many may

not be able to stand the strain. The real worth of the compensation already

devalued, the expenditure in the court having ruined him it would not be

just and proper to set aside the order at the instance of a person who is

not a necessary party and for whose impleadment there is no provision in

the L.A. Act and for which neither he is responsible nor the court and

above all who having been given right to participate chose to be a watcher

only.

The submission advanced on behalf of the appellant that it being

statutorily entitled to lead evidence it was incumbent on the Collector and

the Court to issue notice to it and if they failed to discharge their

obligation the appellant was entitled to challenge the determination of

compensation in higher court by filing appeal or writ petition under

Article 226 of the Constitution of India was under complete

misapprehension. Right to notice in proceedings in court of law or quasi-

judicial proceedings are different than the right of appeal. The former may

arise either under the statutory provision or the principle of natural

justice may require it or it may be necessary on principle of legitimate

expectation. That shall be adverted later. But right of appeal is always

statutory. The courts cannot confer or infer it. The report of the Select

Committee has already been extracted. Its recommendation was against

granting any right of appeal or reference to a local authority or company.

The recommendation found expression in sub-section (2) of Section 50. The

specific bar against seeking reference brings out the legislative intention

of precluding the local authority from filing any appeal against

determination of compensation by the Court. What is legislatively not

permitted cannot be read by implication. Not in respect of right of appeal

as it, 'is a creature of Statute' Shankar Kerba Jadhav & Ors. v. The State

of Maharashtra, [1969] 2 SCC 793. 'A right oi appeal is conferred by

statute or equivalent legislative authority; it is not a mere matter of

practice or procedure, and neither the superior nor the inferior court or

tribunal nor both combined can create or take away such a right'.

(Halsbury's Laws cf England Vol. 37 Para 677). Granting right of appeal to

local authority against order of reference court would be legislating and

not interpreting. Nor a writ petition can be held to be maintainable for

enforcing right to participate where the local authority did not appear

even though it had knowledge or it was informed but opted to remain absent.

It may be available in those exceptional cases where the proceedings are

found to be vitiated by fraud or collusion.

Thus the local authority is neither a necessary not a proper party in the

proceedings for compensation under the L.A. Act. Therefore, the non-

impleadment of the appellant was not fatal and the proceedings could not be

said to be vitiated for failure to implead it. This answers the issue

raised on behalf of the appellant, the local authority. But what is of some

concern is noticeable lack of objective assessment of compensation, at

times, when the acquisition is for a local authority. When sub- section (2)

of Section 50 was enacted acquisitions were not many. Price of land, too,

was not very high. But with multiplication of local bodies constituted

under various State Acts to carry out development activities resulting in

large scale acquisition coupled with rise in the market value of land the

provisions in the statute have to be so interpreted as to eliminate, as far

as possible, any chance of injustice and fairness specially to a public

body as in such matters it ultimately recoils on the society. As is clear

from the Select Committee's report, extracted earlier, the Legislature was

aware, even then, that an exception was to be made in favour of a local

authority or company as, at times, such authority may be in a better

position, than the Collector, to bring evidence on record which may be of

assistance in determination of compensation. It has become more necessary,

in the present day, as the acquisition proceeding under various local acts

till the stage of issuing notification analogous to Section 6 of the L.A.

Act are taken under the local Act. And the Collector takes over, as in the

case of appellant, from the stage of Section 7 of the L.A. Act. Further in

such acquisitions namely for the Local body there is absence of any

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personal involvement. And the possibility of best evidence being withheld

or prevented from coming on record due to vested interest, the number of

which is growing every day cannot be ruled out. What, therefore, requires

examination is that even though the right of impleadment or appeal was not

allowed to the local body and what was assured was an option to

participation only, is there any principle on which this assurance can be

given legal shape. If so in what circumstances and on what conditions. But

before proceeding further it is necessary to be clarified that if in any

proceeding for determination of compensation initiated earlier the local

authority appeared and led evidence then it was required to be impleaded in

subsequent proceedings. The right of impleadment after appearance is

founded on the principle that the person aggrieved by the order must have

the remedy in the higher court. For instance if the local authority lead

evidence before the Collector or the Court for determination of

compensation and that evidence is totally ignored then even though such a

person had no Us against the Collector but there being conflict of interest

between person interested and the person entitled to lead evidence such a

person would be entitled to claim in higher court that the order was

violative in law, for non-consideration of material on record.

Corning back to the issue, what flows from the entitlement to lead

evidence? The principle of natural justice, as a part of procedural law,

developed by this Court and English courts had been applied and extended to

quasi-judicial proceedings and administrative matters to ensure that no one

is adversely affected without reasonable opportunity and fair hearing. No

order can be passed without hearing a person if it entails civil

consequences. But what about those situations where, as in the present

case, the Legislature stops short by providing an option to appear only.

The local body cannot claim to be impleaded as a matter of right. Nor it

can invoke the principle of Natural justice. Yet it is entitled to lead

evidence. It may or may not. Latter does not present any difficulty. But if

it intends to lead evidence then no mechanism has been provided to enable

it to exercise its option. In situations where even though a person has no

enforceable right yet he is affected or likely to be affected by the order

passed by a public authority the courts have evolved the principle of

legitimate expectations. The expression which is said to have originated

from the judgment of Lord Denning in Schmidt v. Secretary of State for Home

Affairs, (1969) 2 Ch. 149 is now well established in public law. In

Attorney-General of Hong Kong v. Ng Yuen Shiu, (1983) 2 A.C. 629 Privy

Council applied this principle where expectations were, 'based upon some

statement or undertaking by or on behalf of, the public authority', and

observed, 'Accordingly "legitimate expectations" in this context are

capable of including expectations which go beyond enforceable legal rights,

provided they have come reasonable basis'. 'A person may have a legitimate

expectation of being treated in a certain way by an administrative

authority even though he has no legal right in private law to receive such

treatment' (Halsbury's Laws of England Vol. 1(1) 4th Edn. Re-issue Para

81). Fair procedure and just treatment is the core of our jurisprudence. No

one should suffer for omission in law or technicalities in rules. Therefore

when the law permits the local body to lead evidence then it is implicit in

it that the local authority can legitimately expect to be informed or

intimated of the proceedings. It would be in consonance with principle of

fairness. Otherwise the right to lead evidence shall hand on the oft chance

of the authority having come to know of the proceedings. In English cases

referred earlier inference was drawn on existence of such right as it would

have otherwise worked harshly against the person who was affected even

though there were no legal provisions or rules permitting any hearing. Sub-

section (2) of Section 50 stands on a higher footing. It entitles the local

body to lead evidence. This furnishes reasonable basis to infer that the

local body legitimately expects to be informed or intimated of the

proceedings. It is an assurance in law of intimation about pendency of the

proceedings. How else it is going to exercise the right of assisting in

determination of compensation. The entitlement to lead evidence in absence

of intimation may, at times, turn out to be empty formally. Consequently

the Collector and the Court are impliedly obliged to intimate the local

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authority about the pendency of the proceedings and its right to lead

evidence. The expression, 'may appear and adduce evidence' can be effective

and meaningful, only, if the person who is entitled to lead evidence is

either aware or made aware of it. If such a person is aware and does not

choose to appear then it may be said that it cannot at a subsequent stage

claim that even though it was aware and did not appear yet the order

against it may be set aside as it should have been made aware. But if he is

not aware and if he would have been made aware then he would have led

evidence which would have assisted the authority in determination of

compensation could be possible only if such person is informed or intimated

of the proceedings. Therefore, to obviate any dispute in future proceedings

it appears appropriate to hold that even though the language of the Section

does not provide for issuance of any notice it is incumbent on the

Collector or the Court while determining compensation to intimate the local

body by issuing notice to lead evidence, if any. The submission that the

local authority must be presumed to know would not be in consonance either

with principle of fairplay or with legislative objective of permitting such

body to appear and lead evidence. But if the local body does not appear

even after intimation by the Collec-tor or the Court then it shall have no

right to claim that the order may be set aside as it was not impleaded as a

party. In Santosh Kumar v. Central Warehousing Corporation, AIR (1986) SC

1164 it was held that the company or the local authority at whose instance

the acquisition is made is not entitled to challenge the determination of

compensation except on the ground of fraud, corruption of collusion,

therefore, it is in the interest of the person whose land has been acquired

that the necessary intimation should be given to the acquiring body at the

earliest so that it may not raise the plea of fraud, corruption or

collusion after conclusion of the proceedings either before the Court or in

appeal. But the obligation of the Collector or the court to issue notice

shall be prospective in operation. That is it shall apply to only those

proceedings which are initiated hereinafter or are pending before the

Collector or Court. It shall not be available in appeals pending against

the order passed in reference in High Court or this Court except in those

rare cases where the local authority is able to establish that it had no

knowledge about the proceedings at any stage and the proceedings were

vitiated because of fraud or collusion.

The conclusions, thus, that can be drawn from the discussion may be

summarised as under :

(i) 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.

(ii) 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.

(iii) (a) The Collector and the Court hereinafter shall be under an

obligation to intimate the local authority or the company of pendency of

the proceedings to enable it to lead evidence.

(b) Non-appearance by the local authority or company in pursuance of notice

sent by the Collector would not absolve the reference court from issuing

any notice.

(iv) (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 proceedings and

its non-impleadment shall render the proceedings as invalid.

(b) But if the local authority or 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 proceedings were

vitiated due to its non-implead-ment.

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(v) Any proceeding taken under the L.A. Act as amended by the State law or

if specifically provided in the State enactment under which the land is

being acquired providing for issuance of notice or giving an opportunity of

hearing 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 Krishi Upaj Mandi Samiti Adhiniyam referred to earlier are liable to be

set aside.

(vi) In appeal pending in the High Court or this Court the local authority

or the company shall not be entitled to claim setting 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.

Law having been decided it appears necessary to refer to the facts as it

shall demonstrate that how unfair it would be if such construction as is

claimed by the Board is placed on the provisions of the L.A. Act. A scheme

was notified by the Avas Vikas Parishad Adhiniyam, 1965 called Trans Yamuna

Grihsthan and Sarak Yojana, Agra. It was a combination of a housing

accommodation and street scheme. The finalised scheme was published under

Section 32 of the Adhiniyam and the land of the owners was notified to be

acquired. An award was made by the Land Acquisition Officer who adopted

belting system for determining the market value and divided the land

covered by the award into three belts fixing definite amount for each belt.

In reference, the Tribunal determined the market value and enhanced the

compensation. The High Court in first appeal doubled it nearly. It also

awarded solatium at the rate of 30% on the amount of enhanced compensation

and interest at the rate of 12% under sub-section (1-A) of Section 23 of

the L.A. Act. The High Court decided the appeal on 18th April 1991. The

owners were still not satisfied and consequently filed the special leave

petitions in this Court, for grant of interest under Section 23-A added to

the L.A. Act in 1984. The Board claims to have come to know of these

proceedings after the judgment of the High Court and filing of special

leave petitions by the claimants and, therefore, it move applications under

Section 114 and Order 47 Rule 1 read with Section 151 of the Code of Civil

Procedure before the High Court for the review of its order. The

application was dismissed on 3rd December 1992 as it was filed after long

delay without proper explanation and even the court fee paid was deficient.

The High Court observed that even though this was brought to the notice of

the learned counsel for the Board yet the deficiency was not made goods.

Another effort was made in 1993 but the Court refused to recall its order

as it was not disputed that the court fee was not made good for long time

and even no application as contemplated under section 149 of the C.P.C. for

extension of time was made.

Facts speak for themselves. Preliminary notification was issued on 31st of

January 1971. Notification under Section 32 analogous to Section 6 was

issued in 1974. Award was made on 15th April 1978. Possession was taken on

27th of April 1978. Reference was decided by the Tribunal on 28th of June

1985. The High Court decided the appeal on 18th of April 1991 and now after

23 years from the date of preliminary notification and 15 years from the

date of award the Board claims recall of the order as no notice was issued

to it and that also by paying deficient court fee. Law and justice both

stare at such fruitless litigation at the expense of the public money.

But this is not the end. Having laid down the law and having come to the

conclusion at the Avas Vikas Parishad was not a necessary party nor it

could have moved an application for recall of the order passed by the High

Court not only due to the long delay but even because it had no right in

law to file such an application it is proposed to exercise power suo motu

under Article 142 of the Constitution for sake of justice as the other side

of the picture is disturbing. The claimant had claimed compensation at the

rate of Rs. 15 per sq. yrd. Yet the Tribunal awarded it at Rs. 16.44 p. as

the respondent appears to have moved an amendment application claiming Rs.

25 per sq. yrd. which was allowed. It is not clear at what stage the

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amendment application was moved and allowed but assuming it to be so the

finding of the High Court in this regard is worth extracting : "Therefore,

while determining the market rate of the land conjectures will have to be

done. Taking into consideration the factors, such as nearness to the bye-

pass, nearness to the inhabited area and superiority in fact in location

and also keeping in view the fact that the tribunal has awarded Rs. 16.54

p. per sq. yard for further land lying in the South of the bye-pass and the

rates fixed by the Special Land Acquisition Officer for the land falling in

three different belts, we are of the view that the rates for the land for

each of the three belts as specified by S.L.O. in his award should

reasonably be fixed as below :

1. For the land falling in First Belt......Rs. 25 per sq. yd.

2. For the land falling in Second Belt........Rs. 23.50 per sq. yd.

3. For the land falling in Third Belt.....Rs. 20 per sq. yd."

Not an iota of evidence has been discussed. No material has been noticed.

No reason has been given for such enhancement. Determination of

compensation undoubtedly involves guess work but what is meant by guess

work and to what extent the courts can indulge in such guess work has been

laid down in numerous decisions of this Court. But the finding extracted

above, to say the least, is not only arbitrary without basis but in utter

disregard of the statutory law and the judicial expositions of it. It is

not necessary to say further but the finding and the reasoning recorded by

the High Court is indeed a matter of concern. It is accordingly set aside

and the High Court is requested to decide it afresh after hearing the

parties. It is necessary to clarify that the Board shall not have a right

of being heard as it nsver appeared before the Land Acquisition Officer or

the Tribunal nor filed any application for leading any evidence. Nor it

claims any fraud or collision. It is left open to the High Court if it

feels necessary in the facts and circumstances of the case to permit the

parties to lead any evidence to do justice.

ORDER OF THE COURT (PER MAJORITY) Leave granted.

1. Section 50(2) of the L.A. 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.

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.

3. The proviso to Section 50(2) only precludes a local authority from

seeking a reference but it does not deprive the local authority which feels

aggrieved by the determination of the amount of compensation by the

Collector 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.

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.

5. Even when notice has been served on the local authority 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.

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

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proceedings wherein it can defend the determination of the amount of

compensation by the Collector and oppose enhancement of the said amount

and also adduce evidence in that regard.

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.

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 be

served notice of the said appeal. This would apply to an appeal in the High

Court as well as in this Court.

9. Since a company for whom land is being acquired has 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.

\007.

10. The matters which stand finally concluded will, however, not be

reopened.

We, therefore allow the applications submitted by the Board for being

impleaded as a respondent in the appeals filed by the land owners in this

Court and direct that the Board be also impleaded as a respondent in the

appeals filed by the land owners in the High Court. The judgment of the

Allahabad High Court dated December 21, 1990 in First Appeals Nos. 584, 585

and 642 of 1985 and the judgment of the said High Court dated April 18,1991

in First Appeals Nos. 586, 587 and 641 of 1985 as well as the order dated

January 20, 1993 on the review applications filed against the judgment

dated April 18, 1991 are set aside and the said appeals are remitted to the

High Court for decision in accordance with law. The appeals are disposed of

accordingly. There will be no order as to costs.

A.G.

Appeals Disposed of.