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CASE NO.:

Appeal (civil) 14198 of 1996

PETITIONER:

Sharda Devi

RESPONDENT:

State of Bihar & Anr.

DATE OF JUDGMENT: 08/01/2003

BENCH:

R.C. LAHOTI & BRIJESH KUMAR

JUDGMENT:

JUDGMENT

R.C. Lahoti, J.

The land, which is the subject matter of controversy in these

proceedings, is 36.86 acres area out of the total area of 45.92 acres of

land of plot Nos. 4, 5 and 10 appertaining to khata No. 151 of Village

Phulsari, District Lohardaga. Notification u/s 4(1) of the Land

Acquisition Act, 1894 (hereinafter 'the Act' for short) was issued on

16.02.1982 for acquiring the said land for the project called Phulsari

Sapathi Nala. Declaration u/s 6 of the Act was issued on 25.05.1982.

Objections u/s 9 of the Act were filed by the appellant herein. The

State through Circle Officer, Kuru filed reply to the objections. On

19.02.1986 the Collector made an award under Section 11 of the Act

directing the compensation, as appointed by him, to be paid to Smt.

Sharda Devi, the appellant.

The relevant facts, which are beyond the pale of controversy at

this stage and as would set out briefly the history of litigation, may be

noticed. According to the appellant, the said land was Gairmajrua

Malik land. It was a part of zamindari estate. Before vesting of

zamindari, the land was settled by the ex-landlord in the name of one

Deo Narain Prasad by means of a registered deed of settlement dated

24.04.1954. It was a raiyati settlement. The appellant purchased the

land from the said Deo Narain Prasad through a registered deed of

sale dated 07.09.1962. The appellant has developed the land and kept

it under cultivation raising the crops. Her name was mutated in the

revenue records by the Circle Officer. A correction slip was issued to

her in her name. The State realized revenue from her from the very

date of vesting, i.e. from 1955 till 1975. The rent receipts were

exhibited on record.

On 18.05.1979, the Circle Officer issued a notice u/s 3 of the

Bihar Public Land Encroachment Act, 1956 (Bihar Act XV of 1956)

calling upon the appellant to explain why she should not be treated as

an encroacher on the land and why her encroachment should not be

removed. The notice was issued on the premise that consequent upon

vesting of zamindaris, the said land had stood vested in the State of

Bihar and was, therefore, 'public land' within the meaning of clause

(3) of Section 2 of the Bihar Public Land Encroachment Act, 1956.

The appellant filed a Writ Petition in the High Court registered as

Civil Writ Jurisdiction Case No. 366 of 1979 (R), laying challenge to

the initiation of such proceedings. The counsel for the State made

appearance though a written counter affidavit was not filed. The High

Court after hearing both the parties, upheld the plea of the appellant

that the said land was Gairmajrua Malik and not Gairmajrua Aam land

and by virtue of the registered deed of transfer in favour of Deo

Narain Prasad, the predecessor-in-title of the appellant, the appellant

was justified in claiming that she was raiyat of the land in question

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and, therefore, could be ejected therefrom only in accordance with the

provisions of the Chota Nagpur Tenancy Act. Inasmuch as such

ejectment is permissible only on specified grounds, none of which

existed in the present case, the notice issued to the appellant was

without jurisdiction and liable to be quashed. The High Court by

order dated 23.07.1984 allowed the Writ Petition and directed the

proceedings initiated against the appellant under the provisions of the

Bihar Public Land Encroachment Act, 1956 to be quashed.

In the year 1981, proceedings u/s 4(h) of the Bihar Land

Reforms Act, 1950 proposing to annul the settlement of land in

question in favour of Deo Narain Prasad were initiated. The

proceedings were founded on the premise that the said settlement was

done with the object of defeating the provisions of the Act. An

inquiry was held. Once again the appellant filed a Writ Petition

seeking quashing of these proceedings. The petition was registered as

CWJC No. 1663 of 1981 (R) and disposed of by the High Court by

order dated 25.03.1987.

During the pendency of these proceedings, notification u/s 4(1)

of the Act was published on 16.02.1982 as already stated. It appears

that the Collector was reluctant to make an award in favour of the

appellant determining the quantum of compensation and directing its

release to the appellant. On 07.01.1985 the Collector (Addl.

Collector, exercising powers of Collector) passed an order holding

that the land had vested in State and hence no award directing

payment of compensation to the appellant was called for. The

appellant filed a Writ petition in the High Court registered as CWJC

No. 147 of 1985 (R). By order dated 13.02.1985, the High Court after

hearing the learned counsel for the State, directed the Writ Petition to

be allowed. A mandamus was issued to the Collector to prepare the

award in the name of the appellant. The High Court went on to

observe "if there be any dispute thereafter, the matter be referred to

the Civil Court under Sections 18 and 30 of the Land Acquisition Act

for adjudication of any claim in accordance with law." The order

dated 07.01.1985 passed by Additional Collector, Lohardaga was

directed to be quashed. On 19.02.1986, the Collector (Land

Acquisition) prepared an award in the name of Smt. Sharda Devi

directing the amount of compensation as determined by him to be paid

to Smt. Sharda Devi, the appellant.

On 06.06.1986, much after the expiry of six weeks the time

appointed for seeking a reference to the Civil Court u/s 18 of the Act,

the Circle Officer, Kuru filed an application before the Collector

seeking a reference to the Civil Court. It was stated in the application

that a dispute existed in between the Circle Officer, Kuru Anchal (on

behalf of the State of Bihar) and Smt. Sharda Devi as to title over the

acquired land, which dispute may be referred for adjudication to the

Civil Court u/s 30 of the Act. The dispute as to whether the title to the

land vests in the appellant, so as to entitle her to payment of

compensation or whether the appellant's title had stood already

extinguished in view of the land having vested in State was referred

u/s 30 of the Act to the decisions of the Court. The reference was

numbered as L.A. Misc. Case No. 42/86 before the Civil Court. By

order dated 06.09.1986 the Civil Court directed the reference to be

rejected. During the course of its order, the learned Special

Subordinate Judge, Ranchi, which is the reference court, opined that

Smt. Sharda Devi was an occupancy raiyat of the land in question and,

therefore, the award prepared in her name was just and legal.

By order dated 25.03.1987, the High Court allowed the Writ

Petition filed by the appellant {CWJC 1663 of 1981 (R)} laying

challenge to the proceedings initiated u/s 4(h) of the Bihar Land

Reforms Act. The result of this decision of the High Court is that the

effort of the State seeking annulment of settlement and cancellation of

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the zamabandhi entries standing in the name of the appellant failed.

The appellant was held to have acquired the status of raiyat in respect

of the land in question.

Against the judgment dated 06.09.1986 passed by the learned

Special Subordinate Judge, the State Government preferred an appeal

to the High Court. A learned Single Judge of the High Court, by his

judgment dated 25.04.1988 affirmed the judgment of Special

Subordinate Judge and directed the appeal to be dismissed. The State

filed a Letters Patent Appeal, which came up for hearing before a

Division Bench of the High Court. The Division Bench framed five

questions of law and directed the matter to be placed before the Chief

Justice for constituting a Full Bench to answer the questions. One of

the questions framed by the Division Bench was : "Whether the

reference u/s 30 of the Land Acquisition Act, 1956 was maintainable

at the instance of the State of Bihar ?"

The questions of law framed, including the question referred to

herein above, were answered against the appellant. As a consequence,

the Letters Patent Appeal filed by the State was allowed and the case

was remanded to the learned Single Judge for decision of the case in

the light of the observations made by the Full Bench. Feeling

aggrieved by the order of remand, the appellant has preferred this

appeal by special leave under Article 136 of the Constitution of India.

The sole question which arises for decision in this appeal

centers around the question referred to herein above, i.e., whether in

the facts and circumstances of the case a reference u/s 30 of the Act

was competent ? In other words, the core question is when the State

proceeds to acquire land on an assumption that it belongs to a

particular person, can the award be called into question by the State

seeking a reference u/s 30 of the Act on the premise that the land did

not belong to the person from whom it was purportedly acquired and

was a land owned by the State having vested in it, consequent upon

abolition of proprietory rights, much before acquisition ?

In order to appreciate the controversy, we will briefly examine

the scheme of the Land Acquisition Act, 1894, also extracting and

reproducing some of the statutory provisions as may be required.

'Person interested' is defined by clause (b) of Sec. 3 as under :-

"the expression 'person interested' includes all

persons claiming an interest in compensation to be

made on account of the acquisition of land under this

Act; and a person shall be deemed to be interested in

land if he is interested in an easement affecting the

land."

Government is not a person interested within the meaning of

the above definition (See Collector of Bombay v. Nusurwanji

Rattanji Mistri & Others, AIR 1955 SC 298). In Dr. G.H. Grant Vs.

State of Bihar (1965) 3 SCR 576 this Court observed (vide page

584 G): "A dispute then arose between the State

Government and Dr. Grant "as to the persons whom" compensation

was payable. The State had no right to the compensation payable for

the land under a title existing before the date of the award of the

Collector, and no application for reference could be made by the

State, as a person interested within the meaning of Section 18(1)".

Whenever it appears to the appropriate Government that land in

any locality is needed or is likely to be needed for any public purpose

etc. a notification to that effect shall be published u/s 4 of the Act.

Any person interested in any land which has been notified u/s 4(1)

may prefer objections u/s 5A. After the objections have been

determined, a declaration u/s 6 shall be made which shall be published

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in the Official Gazette and in such other manner as prescribed by sub-

section (2) of Section 6. The appropriate Government shall thereafter

direct the Collector to make order for the acquisition of the land. The

land shall be demarcated. 'Persons interested' shall be noticed u/s 9

of the Government's intention to take possession of the land and

inviting claims to compensation for all interests in such land. Enquiry

into the objections preferred by persons interested shall be made under

Section 11 by the Collector followed by an award. The award is a

determination by Collector of disputes based on objections relating

to:-

(1) the true area of the land acquired,

(2) the compensation which, in his opinion, should be allowed for

the land by reference to the value of the land on the date of

publication of the notification u/s 4(1), and

(3) the respective interests of the persons claiming the

compensation and directing the apportionment of the

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.

Section 12 attaches finality to the award making it a conclusive

evidence as between the Collector and the persons interested whether

they have respectively appeared before the Collector or not on three

points: (i) the true area of the land, (ii) the value of the land, and (iii)

the apportionment of the compensation amount among the persons

interested.

The Collector may, after making the award u/s 11, take

possession of the land. On such taking possession, the acquired land

shall vest absolutely in the Government, free from all encumbrances.

Part III of the Act deals with reference to Court and procedure

thereupon. Disputes as to apportionment of compensation are dealt

with in Part IV. Part III consists of Sections 18 to 28. Section 18

provides as under :-

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

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

require that the matter be referred by the Collector for the

determination of the Court, whether his objection be to the

measurement of the land, the amount of the compensation, the

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

compensation among the persons interested.

(2) The application shall state the grounds on which objection

to the award is taken:

Provided that every such application shall be made

(a) if the person making it was present or represented before

the Collector at the time when he made his award, within

six weeks from the date of the Collector's award;

(b) in other cases, within six weeks of the receipt of the

notice from the Collector under Section 12, sub-section

(2); or within six months from the date of the Collector's

award, whichever period shall first expire.

Section 19 prescribes the contents of the statement to be made

by the Collector to the Court while making reference, which has to be

in writing. Under Section 20, the following persons shall be noticed

by the Court :-

(a) the applicant;

(b) all persons interested in the objection, except such (if any) of

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them as have consented without protest to receive payment of

the compensation awarded; and

(c) if the objection is in regard to the area of the land or to the

amount of compensation, the Collector.

The scheme of Section 20 also suggests that Collector (or State)

does not fall within the meaning of 'persons interested'; Collector

becomes a necessary party to reference and is required to be noticed

by the Court when the reference relates to objection in regard to area

of land or to the quantum of compensation.

Section 21 restricts the scope of the inquiry in proceedings

initiated on reference by Collector to a consideration of the interests

of the persons affected by the objections. Section 26 prescribes the

form of award to be made by the Reference Court.

Under Part IV, Section 29 contemplates the compensation being

apportioned between several persons interested in accordance with the

agreement arrived at between them. The particulars of apportionment

as specified in the award shall be conclusive as between the persons

who have expressed their agreement in the apportionment of the

compensation. In case of dispute, Section 30 provides as under :-

S.30 - When the amount of compensation has been settled under

Section 11, if any dispute arises as to the apportionment of the

same or any part thereof, or as to the persons to whom the same

or any part thereof, is payable, the Collector may refer such

dispute to the decision of the court.

Under Section 31, the Collector is obliged to tender payment of

the compensation to the persons interested in accordance with the

award. The Collector is obliged to withhold distribution of the

awarded amount to the awardee or amongst the awardees and deposit

the amount of compensation in the reference court in three situations:-

(i) if awardees do not consent to receive the amount of

compensation,

(ii) if there be no person competent to alienate the lands, or

(iii) if there be any dispute as to the title to receive the compensation

or as to the apportionment of it.

The two provisions contemplating power of the Collector to

make reference as contained in Section 18 and Section 30 of the Act

need a comparative study. Under Section 18 the subject-matter of

reference can be a dispute as to any one or more of the following: (i)

as to the measurement of the land, (ii) as to the amount or the

quantum of the compensation, (iii) as to the persons to whom the

compensation is payable, (iv) as to the apportionment of the

compensation among the persons interested. Under Section 30 the

subject matter of dispute can be: (i) the apportionment of the amount

of compensation or any part thereof, (ii) the persons to whom the

amount of compensation or any part thereof is payable. Though the

expression employed in Section 18 is 'the amount of compensation'

while the expression employed in Section 30 is 'the amount of

compensation or any part thereof', this distinction in legislative

drafting is immaterial and insignificant and a dispute as to entitlement

or apportionment of part of the compensation would also be covered

by Section 18 of the Act on the principle that the whole includes a part

too. Thus, at the first blush, it seems that Section 30 overlaps Section

18 in part; but as will be seen shortly hereinafter, it is not so.

Dr. G.H. Grant Vs. State of Bihar (supra) is a three-Judge

Bench decision of this Court wherein the scheme of the Act by

reference to the power vesting in the Collector to make a reference

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came up for the consideration of the Court. The three-Judge Bench by

a majority of 2:1 laid down the following principles :

(i) There are two provisions in the Act under which the Collector

can make a reference to the Court, namely, Section 18 and Section 30.

The powers under the two sections are distinct and may be invoked in

contingencies which do not overlap. A person shown in that part of

the award which relates to apportionment of compensation who is

present either personally or through a representative or on whom

notice is issued under Section 12(2), must, if he does not accept the

award, apply to the Collector to refer the matter to the Court under

Section 18 within the time prescribed thereunder. But a person who

has not appeared in the acquisition proceedings before the Collector

may, if he is not served with notice of filing, raise a dispute as to

apportionment or as to the persons to whom it is payable and apply to

the Court for a reference under Section 30, for determination of his

right to compensation which may have existed before the award, or

which may have devolved upon him since the award. For a reference

under Section 30, no period of limitation is prescribed.

(ii) It is not predicated of the exercise of the power to make a

reference under Section 30 that the Collector has not apportioned the

compensation money by his award.

(iii) The award made by the Collector under Section 11 is not the

source of the right to compensation. An award is strictly speaking

only an offer made by the Government to the person interested in the

land notified for acquisition; the person interested is not bound to

accept it and the Government can also withdraw the acquisition u/s

48. It is only when possession of the land has been taken by the

Government u/s 16 that the right of the owner of the land is

extinguished. Therefore the appellant's contention that title to

compensation is derived solely from and on the date of the award

could not be accepted.

(iv) The liability of the Government u/s 31 to pay compensation to

the person entitled thereto under the award does not imply that only

the persons to whom compensation is directed to be paid under the

award may raise a dispute u/s 30. The scheme of apportionment by

the Collector under Section 11 is conclusive only between the

Collector and the persons interested and not among the persons

interested. Payment of compensation u/s 31 to the persons declared in

the award to be entitled thereto discharges the State of its liability to

pay compensation leaving it open to the claimant to compensation to

agitate his right in a reference u/s 30 or by a separate suit.

(v) Under the Bihar Land Reforms Act the title of the appellant to

the land noticed for acquisition became vested in the State and

therefore the right to compensation for the land acquired devolved

upon the State. A dispute then arose between the State Government

and the appellant "as to the persons to whom" compensation was

payable. The State had no right to the compensation payable for the

land under a title existing before the date of the award of the Collector

and no application could be made by it as a person interested within

the meaning of Section 18. But a dispute between the appellant and

the State as to their conflicting claims to the compensation money was

clearly a dispute which could be referred u/s 30 of the Act to the

Court. There is nothing in Section 30 which excludes a reference to

the Court of a dispute raised by a person on whom the title of the

owner of the land has since the award, devolved (emphasis supplied).

Keeping in view the principles laid down by this Court in Dr.

G.H. Grant's case (supra) and analyzing in-depth the provisions of

the Act the difference between reference under Section 18 and the one

under Section 30 can be summarized and set out as under:-

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By reference to locus

Under Section 18(1) a reference can be made by Collector only

upon an application in writing having been made by (i) any person

interested (ii) who has not accepted the award (iii) making application

in writing, to the Collector, requiring a reference by the Collector to

the Court (iv) for determination of any one of the four disputes

(specified in the provision), and (v) stating the grounds on which

objection to the award is taken. For reference under Section 30 no

application in writing is required. The prayer may be made orally or

in writing or the reference may be made suo motu by the Collector

without any one having invited the attention of the Collector for

making the reference.

By reference to the disputes referable

Under Section 18(1) there are four types of disputes which can

be referred to Civil Court for determination. They are the disputes: (i)

as to the measurement of the land, (ii) as to the amount of the

compensation, (iii) as to the persons to whom the compensation is

payable, or (d) as to the apportionment of the compensation among

the persons interested. Under Section 30 the only disputes which are

referable are : (i) any dispute as to the apportionment of the amount of

compensation or any part thereof, or (ii) a dispute as to the persons to

whom the amount of compensation or any part thereof is payable. A

dispute as to the measurement of the land or as to the quantum of

compensation or a dispute of a nature not falling within Section 30,

can neither be referred by the Collector under Section 30 of the Act

nor would the Civil Court acquire jurisdiction to enter into and

determine the same.

By reference to nature of power

Under Section 18 of the Act the Collector does not have power

to withhold the reference. Once a written application has been made

satisfying the requirements of Section 18, the Collector shall make a

reference. The Collector has no discretion in the matter; whether the

dispute has any merit or not is to be left for the determination of the

Court. Under Section 30 the Collector may refer such dispute to the

decision of the Court. The Collector has discretion in the matter.

Looking to the nature of the dispute raised, the person who is raising

the dispute, the delay in inviting the attention of the Court, and so on

are such illustrative factors which may enter into the consideration by

the Collector while exercising the discretion. If the Collector makes

the reference it may be decided by the Court subject to its forming an

opinion that the dispute was capable of reference and determination

under Section 30 of the Act. In case the Collector refuses to make a

reference under Section 30 of the Act, the person adversely affected

by withholding of the reference or refusal to make the reference shall

be at liberty to pursue such other remedy as may be available to him

under the law such as filing a writ petition or a civil suit.

By reference to limitation

Under Section 18 the written application requiring the matter to

be referred by the Collector for the determination of the Court shall be

filed within six weeks from the date of the Collector's award if the

person making it was present or represented before the Collector at

the time when he made his award or within six weeks of the notice

from the Collector under Section 12(2) or within six months from the

date of the Collector's award, whichever period shall first expire.

There is no such limitation prescribed under Section 30 of the Act.

The Collector may at any time, not bound by the period of limitation,

exercise his power to make the reference. The expression 'the person

present or represented' before the Collector at the time when he made

his award would include within its meaning a person who shall be

deemed to be present or represented before the Collector at the time

when the award is made. No one can extend the period of limitation

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by taking advantage of his own wrong. Though no limitation is

provided for making a reference under Section 30 of the Act, needless

to say, where no period of limitation for exercise of any statutory

power is prescribed the power can nevertheless be exercised only

within a reasonable period; what is a reasonable period in a given case

shall depend on the facts and circumstances of each case.

The scheme of the Act reveals that the remedy of reference u/s

18 is intended to be available only to a 'person interested'. A person

present either personally or through representative or on whom a

notice is served u/s 12(2) is obliged, subject to his specifying the test

as to locus, to apply to the Collector within the time prescribed u/s

18(2) to make a reference to the Court. The basis of title on which the

reference would be sought for u/s 18 would obviously be a pre-

existing title by reference to the date of the award. So is Section 29,

which speaks of 'persons interested'. Finality to the award spoken of

by Section 12(1) of the Act is between the Collector on one hand and

the 'persons interested' on the other hand and attaches to the issues

relating to (i) the true area, i.e. measurement of the land, (ii) the value

of the land, i.e. the quantum of compensation, and (iii) apportionment

of the compensation among the 'persons interested'. The 'persons

interested' would be bound by the award without regard to the fact

whether they have respectively appeared before the Collector or not.

The finality to the award spoken of by Section 29 is as between the

'persons interested' inter se and is confined to the issue as to the

correctness of the apportionment. Section 30 is not confined in its

operation only to 'persons interested'. It would, therefore, be

available for being invoked by the 'persons interested' if they were

neither present nor represented in proceedings before the Collector,

nor were served with notice u/s 12(2) of the Act or when they claim

on the basis of a title coming into existence post award. The

definition of 'person interested' speaks of 'an interest in compensation

to be made'. An interest coming into existence post award gives rise

to a claim in compensation which has already been determined. Such

a person can also have recourse to Section 30. In any case, the dispute

for which Section 30 can be invoked shall remain confined only (i) as

to the apportionment of the amount of compensation or any part

thereof, or (ii) as to the persons to whom the amount of compensation

(already determined) or any part thereof is payable. The State

claiming on the basis of a pre-existing right would not be a 'person

interested', as already pointed out hereinabove and on account of its

right being pre-existing, the State, in such a case, would not be

entitled to invoke either Section 18 or Section 30 seeking

determination of its alleged pre-existing right. A right accrued or

devolved post award may be determined in a reference u/s 30

depending on Collector's discretion to show indulgence, without any

bar as to limitation. Alternatively, such a right may be left open by

the Collector to be adjudicated upon in any independent legal

proceedings. This view is just, sound and logical as a title post award

could not have been canvassed upto the date of the award and should

also not be left without remedy by denying access to Section 30.

Viewed from this angle, Section 18 and 30 would not overlap and

would have fields to operate independent of each other.

We have entered into examining the scheme of the Act and

exploring the difference between reference under Section 18 and the

one under Section 30 of the Act as it was necessary for finding out

answer to the core question staring before us. The power to acquire

by State the land owned by its subjects hails from the right of eminent

domain vesting in the State which is essentially an attribute of

sovereign power of the State. So long as the public purpose subsists

the exercise of the power by the State to acquire the land of its

subjects without regard to the wishes or willingness of the owner or

person interested in the land cannot be questioned. (See Scindia

Employees' Union Vs. State of Maharashtra and Ors., (1996) 10

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SCC 150, para 4 and State of Maharashtra Vs. Sant Joginder Singh

Kishan Singh and Ors. 1995 Supp (2) SCC 475, para 7). The State

does not acquire its own land for it is futile to exercise the power of

eminent domain for acquiring rights in the land, which already vests

in the State. It would be absurdity to comprehend the provisions of

Land Acquisition Act being applicable to such land wherein the

ownership or the entirety of rights already vests in the State. In other

words, the land owned by the State on which there are no private

rights or encumbrances is beyond the purview of the provisions of the

Land Acquisition Act. The position of law is so clear as does not

stand in need of any authority to support. Still a few decided cases in

point may be referred since available.

In Collector of Bombay v. Nusurwanji Rattanji Mistri &

Others (supra) this Court held that when the Government acquires

lands under the provisions of the Land Acquisition Act, it must be for

a public purpose, and with a view to put them to that purpose, the

Government acquires the sum total of all private interests subsisting in

them. If the Government has itself an interest in the land, it has only

to acquire the other interests outstanding thereof so that it might be in

a position to pass it on absolutely for public user. An interesting

argument was advanced before the Supreme Court. It was submitted

that the right of the Government to levy assessment on the lands is an

'encumbrance' and that encumbrance is capable of acquisition. The

Court held that the word 'encumbrance' as occurring in Section 16

can only mean interests in respect of which a compensation was made

under Section 11 or could have been claimed. It cannot include the

right of the Government to levy assessment on the lands. The Act

does not contemplate the interest of the Government in any land being

valued or compensation being awarded therefor.

In Secretary of State Vs. Sri Narain Khanna AIR 1942 PC

35 it was held that where the Government acquires any property

consisting of land and buildings and where the land was subject-

matter of the Government grant, subject to the power of resumption

by Government at any time on giving one month's notice, then the

compensation was payable only in respect of such buildings as may

have been authorized to be erected and not in respect of the land.

In 'In the matter of the Land Acquisition Act : Govt. of

Bombay Vs. Esufali Salebhai' 34 Bom 618 (at page 636), Batchelor,

J held that the Government are not debarred from acquiring and

paying for the only outstanding interests merely because the Act,

which primarily contemplates all interests as held outside

Government, directs that the entire compensation based upon the

market value of the whole land must be distributed among the

claimants. The Government was held liable to acquire and pay only

for the super-structure as it was already the owner of the land.

In 'Deputy Collector, Calicut Division Vs. Aiyavu Pillay, 9 Ind

Cas 341 (Mad), Wallis, J. observed that the Act does not contemplate

or provide for the acquisition of any interest which already belongs to

Government in land which is being acquired under the Act but only

for the acquisition of such interests in the land as do not already

belong to the Government.

In Collector of Bombay v. Nusurwanji Rattanji Mistri &

Others (supra), the decision in Esufali Salebhai's case and Aiyavu

Pillay's case were cited with approval. Expressing its entire

agreement with the said views the Court held that when Government

possesses an interest in land which is the subject of acquisition under

the Act, that interest is itself outside such acquisition because there

can be no question of Government acquiring what is its own. An

investigation into the nature and value of that interest is necessary for

determining the compensation payable for the interest outstanding in

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the claimants but that would not make it the subject of acquisition. In

land acquisition proceedings there is no value of the right of the

Government to levy assessment on the lands and there is no award of

compensation therefor. It was, therefore, held by a Division Bench of

Judicial Commissioners in Mohammad Wajeeh Mirza Vs. Secretary

of State for India in Council AIR 1921 Oudh 31 that the question

of title arising between the Government and another claimant cannot

be settled by the judge in a reference under Section 18 of the Act.

When the Government itself claims to be owner of the land there can

be no question of its acquisition and the provisions of the Land

Acquisition Act cannot be applicable. In our opinion the statement of

law so made by the learned judicial commissioners is correct.

The Collector acts as a representative of the State whilst

holding proceedings under the Land Acquisition Act. In fact, he

conducts the proceedings on behalf of the State. The award of the

Collector is not the source of the right to compensation; it is the pre-

existing right which is recognized by the Collector and guided by the

findings arrived at in determining the objections, if any, the Collector

quantifies the amount of compensation to be placed as an offer of the

appropriate Government to the owner recognized by the State. The

offeree may accept or decline the offer. It he accepts the offer and the

Government takes possession over the land, the title of the offeree is

extinguished and vests absolutely in the Government free from all

encumbrances. The power to make an award under Section 11 and to

make a reference under Sections 18 or 30 of the Act is a statutory

power. The sweep of jurisdiction of Court to determine the disputes is

also statutory and is controlled by the bounds created by Section 17 or

30 whereunder the reference has been made to the Court. The power

has to be exercised to the extent to which it has been conferred by the

Statute and on availability of pre-existing conditions on the

availability of which and which alone the power can be exercised.

Award made by the Collector is final and conclusive as between

the Collector and the 'persons interested', whether they have appeared

before the Collector or not, on two issues : (i) as to true area, i.e.

measurement of land acquired, (ii) as to value of the land, i.e. the

amount of compensation, and (iii) as to the apportionment of the

compensation among the 'persons interested' again, between the

Collector and the 'persons interested' and not as amongst the 'persons

interested' inter se. In the event of a reference having been sought for

u/s 18, the Collector's award on these issues; if varied by Civil Court,

shall stand superseded to that extent. The scheme of the Act does not

attach a similar finality to the award of the Collector on the issue as to

the person to whom compensation is payable; in spite of the award by

Collector and even on failure to seek reference, such issue has been

left available to be adjudicated upon by any competent forum.

In Nusserwanjee Pestonjee Vs. Meer Mynoodeen Khan

Wullud Meer Sudroodeen Khan Bahadoor, 6 Moo Ind App 134 their

Lordships of the Privy Council have held that wherever jurisdiction is

given by a Statute and such jurisdiction is only given upon certain

specified terms contained therein it is a universal principle that those

terms should be complied with, in order to create and raise the

jurisdiction, and if they are not complied with the jurisdiction does not

arise. The Privy Council decision above-said was followed and the

statement of law made therein approved by this Court in Kothamasu

Kanakarathamma and Ors. Vs. State of Andhra Pradesh and Ors.

AIR 1965 SC 304. This Court held that under the Land Acquisition

Act the matter goes to the Court only upon a reference made by the

Collector and there is no doubt that the jurisdiction of the Court arises

solely on the basis of a reference made to it. The Court can adjudicate

upon the matter referred to it but the Court is certainly not invested

with the jurisdiction to consider a matter not directly connected with it

and this is not a matter of mere technicality. A case of lack of

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inherent jurisdiction will not be cured by mere failure to object to the

proceedings before the Court on the ground of an absence of reference

on matters not referred. There can be no waiver or acquiescence.

Indeed, when there is an absence of inherent jurisdiction, the defect

cannot be waived nor can be cured by acquiescence,

To sum up the State is not a 'person interested' as defined in

Section 3(2) of the Act. It is not a party to the proceedings before the

Collector in the sense, which the expression 'parties to the litigation'

carries. The Collector holds the proceedings and makes an award as a

representative of the State Government. Land or an interest in land

pre-owned by State cannot be subject matter of acquisition by State

the question of deciding the ownership of State or holding of any

interest by the State Government in proceedings before the Collector

cannot arise in proceedings before the Collector (as defined in Section

3(c) of the Act). If it was a government land there was no question of

initiating the proceedings for acquisition at all. The Government

would not acquire the land, which already vests in it. A dispute as to

pre-existing right or interest of the State Government in the property

sought to be acquired is not a dispute capable of being adjudicated

upon or referred to the Civil Court for determination either under

Section 18 or Section 30 of the Act. The reference made by the

Collector to the Court was wholly without jurisdiction and the Civil

Court ought to have refused to entertain the reference and ought to

have rejected the same. All the proceedings under Section 30 of the

Act beginning from the reference and adjudication thereon by the

Civil Court suffer from lack of inherent jurisdiction and are therefore

a nullity liable to be declared so.

However, we would like to clarify our decision by sounding

two notes of caution. Firstly, the quashing of the proceedings under

Section 30 of the Land Acquisition Act would not debar the State

from pursuing such other legal remedy before such other forum as

may be available to the State Government and on the merits and the

maintainability thereof we express no opinion herein. Secondly, the

situation in law would have been entirely different if the title of the

appellant would have come to an end by any event happening or

change taking place after the making of the award by the Collector as

was the case in Dr. G.H. Grant Vs. State of Bihar (1965) 3 SCR

576. The title of Dr. Ghosh had come to an end by change of law

referable to a date subsequent to the making of the award. In this

context it was held "there is no reason why the right to

claim a reference of a dispute about the person entitled to

compensation may not be exercised by the person on whom the title

has devolved since the date of the award" and "there is nothing in

Section 30 which excludes a reference to the Court of a dispute raised

by a person on whom the title of the owner of land has, since the

award, devolved".

For the foregoing reasons, the appeal is allowed, the judgment

of the Division Bench is set aside and that of the learned Single Judge

restored with costs throughout.