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CASE NO.:

Appeal (civil) 9521-22 of 1995

PETITIONER:

THE LAND ACQUISITION OFFICER CUM-DSWO, AP

Vs.

RESPONDENT:

M/S. B.V. REDDY & SONS

DATE OF JUDGMENT: 14/02/2002

BENCH:

G.B. Pattanaik, S.N. Phukan & S.N. Variava

JUDGMENT:

With

Writ Petition (Civil) No. 349 of 2001.

JUDGMENT

PATTANAIK,J.

These appeals are directed against the judgment of

Andhra Pradesh High Court in Letters Patent Appeals Nos.

351 and 352 of 1989. The land in question measuring 3.42

acres was acquired for construction of houses for Tribals and

Harijans by issuance of notification under Section 4(1) of the

Land Acquisition Act, published on 9.6.1976. A second

Notification was issued under said Section 4 to acquire an

extent of 1.06 acres by publication of Notification dated

27.12.1976. The Land Acquisition Officer determined the

market value of the acquired land @ Rs.11,000/- per acre by

his award dated 31.2.1977. Before the Land Acquisition

Officer, the land owners had claimed compensation @ Rs.

25,000/- to Rs. 30,000/- per acre. On a reference being made

under Section 18 of the Act, the Civil Court determined the

market value of the acquired land at Rs.75,000/- per acre,

but granted compensation @ Rs. 30.000/- per acre in view of

Section 25 of the Act, as it stood prior to its amendment in

the year 1984 and as the owners had claimed @ Rs.30,000/-

per acre. On appeal being carried, the learned Single Judge

also came to the conclusion that the market value of the land

would be Rs.75,000/- per acre, but did not enhance the

compensation in view of the un-amended provisions of

Section 25 of the Act and in view of the fact that the owners

had claimed only Rs.30,000/- per acre before the Land

Acquisition Officer. The matter being carried to the Division

Bench in Letters Patent Appeal, the Division Bench came to

the conclusion that Section 25 being procedural in nature and

the amendment having been made while the appeal was

pending, the amended provisions of Section 25 of the Land

Acquisition Act would apply and since under the amended

provisions, there is no bar for awarding compensation more

than the amount claimed by the claimants and the only

embargo being that the amount shall not be awarded less than

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the amount awarded by the Collector under Section 11, the

Court would be justified in enhancing the compensation if the

market value is determined at a higher rate. On the question

of determination of market value, the Division Bench, taking

into consideration Exhibits B-3, B-4 and B-7, came to hold

that the market value of the acquired land would be Rs. one

lakh per acre. The appeals having been allowed with the

aforesaid conclusions, the State is in appeal before this Court.

Mr. Guntur Prabhakar, the learned counsel appearing

for the appellant contended that the Division Bench of the

High Court committed serious error in holding that Section

25 is procedural in nature and thereby applying the amended

provisions of Section 25 of the Act. According to him, the

provisions of Section 25 mandates the parameters within

which the Court is required to determine the amount of

compensation and the act of awarding of compensation or

curtailing, restricting or adding to such right can never be

held to be procedural in nature. According to the learned

counsel the language itself reveals that it is substantive in

nature and it has been so held by this Court in the case of

Krishi Utpadan Mandi Samiti vs. Kanhaiya Lal and

Others., Vol. 2000 (7) SCC 756. That being the position,

the substantive right of the party would be governed by the

un-amended provisions of Section 25 of the Act.

Consequently, it is urged that the claimants having claimed

only Rs. 30,000/- per acre, the Court will not be entitled to

grant compensation beyond the amount claimed. According

to Mr. Prabhakar, the Division Bench of the Andhra Pradesh

High Court committed serious error of law, which has

vitiated the ultimate conclusion.

Mr. P.P. Rao, the learned senior counsel appearing for

the claimants-respondents on the other hand contended that

the lawyer for the claimants without any authority from the

claimants, made the application, even before the notice had

been served on the claimants and in such an application,

mentioned the claim at the rate of Rs.30,000/- per acre and

such a claim cannot be held to be a claim made by the

claimants, within the ambit of the un-amended provisions of

Section 25(1) of the Act. Mr. Rao further contended that the

very fact, the Parliament amended Section 25 of the Act and

took away the earlier embargo with regard to the quantum of

compensation, limiting the same to the amount claimed by

the claimants is indicative of the legislative intent. That

being the position and the Court having determined the

market value of the acquired land at Rs. one lakh per acre,

there is no justification to deny that amount to the claimants,

since under Article 31 of the Constitution, no person can be

deprived of his property, save by the authority of law. Mr.

Rao further submitted that the unamended provisions of

Section 25 is ultra vires and such a prayer has been made in

the writ petition filed by the claimants under Article 32 of the

Constitution. Mr. Rao lastly submitted that in the peculiar

facts of this case, even if this Court may declare the law and

point out the error in the Division Bench Judgment of the

Andhra Pradesh High Court, yet ends of justice would not

require interference with the judgment of the Division Bench

of the High Court in exercise of power under Article 136 of

the Constitution. In support of this contention, reliance was

placed on the decision of this Court in Taherakhatoon vs.

Salambin Mohammad, 1999(2) S.C.C. 635.

Before embarking upon an inquiry as to the correctness

of the contentions raised, it would be appropriate to notice

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the provisions of Section 25 of the Land Acquisition Act, as

it stood prior to its amendment and the provisions of the Land

Acquisition Act, as it stand subsequent to the amendment.

"Section 25, prior to its amendment by Act 68

of 1984:

'25. Rules as to amount of Compensation- (1)

When the applicant has made a claim to

compensation, pursuant to any notice given under

Section 9, the amount awarded to him by the

Court shall not exceed the amount so claimed or

be less than the amount awarded by the Collector

under Section 11.

(4)When the applicant has refused to make such

claim or has omitted without sufficient reason (to

be allowed by the Judge) to make such claim, the

amount awarded by the Court shall in no case

exceed the amount awarded by the Collector.

(5)When the applicant has omitted for a sufficient

reason (to be allowed by the Judge) to make such

claim, the amount awarded to him by the Court

shall not be less than, and may exceed the amount

awarded by the Collector."

Section 25 after the amendment:-

"Section 25. Amount of compensation by Court

not be lower than the amount awarded by the

Collector:- The amount of compensation awarded

by the Court shall not be less than the amount

awarded by the Collector under Section 11."

At this stage it would be proper to notice the scheme of the

Act itself. After publication of preliminary notification under

Section 4 of the Act and causing pubic notice of the substance

of such notification by the Collector, objections are

entertained and heard, as provided under Section 5A of the

Act. The Appropriate Government then becomes satisfied

that the land is needed for public purpose and a declaration to

that effect is made under Section 6 of the Act. Such

declaration is the conclusive evidence that the land is needed

for a public purpose. The Appropriate Government or the

officer authorised by the Appropriate Government directs the

Collector to take order for the acquisition of the land, as

provided under Section 7 and the Collector then cause the

land to be marked and measured and also he is supposed to

make a plan of the same. The Collector thereafter cause

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

land, 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, as provided under Section 9.

The notice under Section 9(1) must state the necessary

particulars, as provided under sub-section (2) of said Section

and the Collector then serves notice on the occupier of the

land as well as on all such persons known or believed to be

interested therein or would be entitled to act for persons so

interested, or agents authorised to receive service on their

behalf within the revenue district in which the land is situate.

In case the person interested resides elsewhere and has no

such agent, the notice is required to be sent to him by post in a

letter addressed to him at his last known address, under sub-

section (4) of Section 9. Section 11 confers power on the

Collector to hold an inquiry with regard to the measurements

made as well as inquiry to the valuation of the land on the

date of Notification under Section 4(1) and thereafter it shall

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make an Award under his hand. Such Award of the Collector

is required to be filed in the Collector's Office and under law

is held to be final and conclusive evidence, as between the

Collector and the persons interested on the question of true

area and value of the land and apportionment of the

compensation among the persons interested. We are not

concerned with other provisions except Section 18 and

Section 25. Section 18 entitles the person interested who has

not accepted the award to make a written application to the

Collector, requiring that the matter of determination of

compensation be referred to a competent Court. Section 25

however, as it stood prior to its amendment by Act 68 of

1984, puts an embargo to the effect that if an applicant has

made a claim to compensation, pursuant to any notice given

under Section 9, then the amount awarded to him by the Court

shall not exceed the amount so claimed and shall not be less

than the amount awarded by the Collector under Section 11.

The aforesaid provision contained in sub-section (1) of

Section 25, thus limits the power of the reference Court on a

reference being made under Section 18 to the quantum of

compensation which could be awarded.

When these appeals had been listed before a Bench of

two learned Judges of this Court, the decision of this Court in

Krishi Utpadan Mandi Samiti, 2000 (7) SCC 756, had been

placed before the Bench and it was contended that since the

award in the case in hand is between 30th of September, 1982

and 24th of September, 1984, the compensation could be

awarded under the amended provisions of Section 25. Since

that decision prima facie supported the contention of the

claimants-respondents and the Bench was of the view that the

said decision requires re-consideration, the matter had been

referred to a Bench of three learned Judges and that is how the

matter has been placed before us. On the rival submissions

made by the counsel for the parties, the following questions

arise for our consideration:

(1) Can the provision of Section 25 of the Land

Acquisition Act be construed to be procedural in nature

or is substantive?

(2) If it is held to be substantive in nature, then can the

amended provisions of Section 25 of the Act would

apply to a case where the award of the Land

Acquisition Collector had been made much prior to the

amendment in question?

(3) Whether the Judgment of this Court in Krishi Utpadan

Mandi Samiti's case can be held to be correctly

decided?

(4) Whether at all it would be appropriate for this Court to

lay down the law and yet not to interfere with the

judgment of the Division Bench of Andhra Pradesh

High Court with regard to the quantum of compensation

awarded?

(5) Whether the petition under Article 32 can be

entertained for deciding the validity of un-amended

provisions of Section 25?

So far as the first question is concerned, on a plain reading of

the same, it is difficult for us to hold that it is procedural in

nature. On the other hand, it unequivocally limits the power

of the Court on a reference being made to award

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compensation, more than the amount claimed by the

claimants and less than the amount awarded by the Collector.

In other words, the substantive right of a claimant who has

made a claim to the compensation, pursuant to a notice under

Section 9, cannot be more than the amount claimed and under

any circumstances, would not be less than the amount which

the Land Acquisition Collector has awarded under Section

11, since that award of the Collector is the offer that is made

to the claimant. In course of the arguments, Mr. Rao, the

learned counsel for the claimants submitted before us that

sub-section (5) of Section 25, as it stood prior to its

amendment gives sufficient power to the reference Court to

entertain a claim if the claimant had omitted to make such

claim pursuant to notice issued under Section 9 and

determine the compensation on that. Consequently, Mr. Rao

contends that there should not be any embargo on the power

of the Court even if the claimant makes a claim pursuant to

the notice issued under Section 9. We are unable to accept

this submission inasmuch as sub-section (5) of Section 25

contemplates a situation where the claimant for sufficient

reason had omitted to make a claim and the reference Court

on being satisfied about the same may permit the claimant to

make a claim. But the unambiguous and clear language of

sub-section (1) of Section 25, as it stood prior to the

amendment, makes it explicitly clear that if the claimant has

made a claim pursuant to a notice under Section 9, then the

Court would be incompetent to award any amount exceeding

the said claim. In our considered opinion, sub-section (5) of

Section 25 will be of no assistance to the claimants-

respondents in the present case. Incidently, we may deal

with the submission of Mr. Rao that the amount claimed was

by the lawyer and not by the claimant himself and therefore,

cannot be held to be claim by the claimants, pursuant to

notice under Section 9 of the Act. On examining the records

of the case, we do not find any justification to entertain this

submission, inasmuch even in the application made for

reference under Section 18, the claimant had not taken such a

stand. It would, therefore, be futile for us to entertain this

contention and hold that the claim made by the claimants

through his lawyer cannot be held to be a claim by the

claimants. This Court in the very case of Krishi Utpadan

Mandi Samiti, 2000(7) SCC 756, on which the learned

counsel for the respondents had placed reliance, considered

the provisions of Section 25 and held that the said provision

can never be held to be procedural and it is substantive in

nature. We approve of the said conclusion and hold that the

provision of Section 25 of the Land Acquisition Act is

substantive in nature.

Coming to the second question, it is a well settled

principle of construction that a substantive provision cannot

be retrospective in nature unless the provision itself indicates

the same. The amended provision of Section 25 nowhere

indicates that the same would have any retrospective effect.

Consequently, therefore, it would apply to all acquisitions

made subsequent to 24.9.84, the date on which Act 68/1984

came into force. The Land Acquisition (Amendment) Bill of

1982 was introduced in Parliament on 30th of April, 1982 and

came into operation with effect from 24th of September,

1984. Under the amendment in question, the provisions of

Section 23(2) dealing with solatium was amended and

Section 30(2) of the amended Act provided that the

provisions of sub-section (2) of Section 23 of the Principal

Act as amended by clause (b) of Section 15 shall apply and

shall be deemed to have applied, also to and in relation to

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any award made by the Collector or Court or to any order

passed by the High Court or Supreme Court in appeal against

any such award under the provisions of the principal Act,

after the 30th April, 1982 and before the commencement of

the Act. It is because of the aforesaid provision, the question

cropped up as to whether in respect of an award passed by

the Collector between the two dates, the amended provision

will have an application or not and that question has been

answered by this Court in the Constitution Bench decision in

Union of India and anr. Vs. Raghubir Singh, 1989(2)

S.C.C. 754. Sub-section (2) of Section 30 has at all no

reference to the provisions of Section 25 of the Act. In that

view of the matter, question of applicability of the amended

provisions of Section 25 of the Act to an award of the

Collector made earlier to the amendment and the matter was

pending in appeal, does not arise. In our considered opinion,

the amended provisions of Section 25 of the Act, not being

retrospective in nature, the case in hand would be governed

by the unamended provisions of Section 25 of the Act.

Coming to the third question, we find that on a review

application being filed, this court relying upon the case of

Union of India vs. Raghubir Singh, 1989(2) SCC 754, held

that the amended provisions would be applicable under

which there is no restriction that the award would only be

upto the amount claimed by the claimant. In Raghubir

Singh's case, the Constitution Bench was dealing with sub-

section (2) of Section 30 which had got absolutely no

relevance or connection with the provisions of Section 25 of

the Land Acquisition Act. For the reasons already indicated,

we have no hesitation to come to the conclusion that the

enunciation of law made by this Court in Krishi Utpadan

Mandi Samiti's case, in para (17) of the Judgment relying

upon the case of Union of India vs. Raghubir Singh, is not

correct and to that extent the aforesaid case must be held not

to have been correctly decided.

Coming to the next question as to whether this Court

would interfere with the impugned judgment of the Division

Bench of the Andhra Pradesh High Court or not, the answer

would depend on the provision of law which was under

consideration and whether there was any ambiguity in the

law which is being decided for the first time. It is no doubt

true that in Teherakhatoon vs. Salambin Mohammad,

1999(2) S.C.C. 635, this Court has held that even if the

special leave has been granted under Article 136, unless and

until, it is shown that a substantial and grave injustice will be

caused if no interference is made out, the Court may refuse to

interfere with the judgment under challenge. This principle

would mainly depend upon the facts of each case which

comes up for decision before the Court. To the case in hand,

it is difficult for us to apply the aforesaid principle. On the

date the land was notified for acquisition under Section 4(1)

of the Act, the un-amended provision of Section 25 was in

force and it was made known to all concerned that the

reference Court will have no power to award the amount in

excess of the amount claimed by the claimants. Not only the

language of the Statute was clear and unambiguous, but also

the question was not res- integra, in view of the decision of

this Court in Dadoo Yogendrenath Singh vs. The

Collector, AIR 1977 SC 1128. Until the statutory rigour

contained in sub-section (1) of Section 25 stood obliterated

by the amended provisions of Section 25 and until all

restraints and embargoes placed for the Court stood totally

liberated, the reference Court had no jurisdiction to award

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the amount in excess of the amount claimed by the claimant.

Such being the position of law, we are unable to persuade

ourselves to agree with the submission of Mr. Rao to hold

that it would not be in the interest of justice to interfere with

the judgment of the Division Bench of the Andhra Pradesh

High Court. In our considered opinion, the High Court had

no jurisdiction on the law as it stood, to award any amount in

excess of the amount claimed and in the case in hand in

excess of Rs.30,000/- per acre and, therefore, the principles

enunciated in the decision of this Court in Teherakhatoon

vs. Salambin Mohammad, 1999(2) S.C.C. 635, cannot be

applied to the case in hand.

So far as the last submission is concerned, we are afraid

that the validity of unamended provision of Section 25 of the

Land Acquisition Act which was there on the statute book

since inception can at all be examined at a point of time when

that provision no longer subsists since, 24.9.84, the date on

which Act 68/1984 came into force. We, therefore, decline

to entertain the petition under Article 32 at the behest of the

claimants. In the net result, therefore, these civil appeals are

allowed. The Judgment of the Division Bench of the Andhra

Pradesh High Court is set aside and it is held that the

claimants-respondents would be entitled to compensation for

the acquired land @ Rs.30,000/- per acre, which they claimed

pursuant to service of notice under Section 9. The writ

petition filed by the claimants stands dismissed.

..........................................J.

(G.B. PATTANAIK)

..........................................J.

(S.N. PHUKAN)

..J.

(S.N. VARIAVA)

February 14, 2002.

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