& Anr Vs. State of Karnataka & Ors  INSC 182 (3 May 1990)
L.M. (J) Sharma, L.M. (J) Punchhi, M.M.
1990 AIR 1321 1990 SCR (3) 20 1990 SCC (3) 617 JT 1990 (2) 330 1990 SCALE
Acquisition Act, 1894: Sections 18 and 20 (As applicable to State of Karnataka)--Land Acquisition--Compen- sation--Reference
to Court--Determination of reference without notice to authority for Whom
acquisition was made--Validity of.
to the acquisition of the appellant's land for meeting the requirements of the
respondent-Corporation, a reference was made to the Civil Court, under section
18 of the Land Acquisition Act, 1894, when was determined without notice to the
respondent-Corporation. and by allowing higher compensation to the appellants.
State preferred an appeal against the decision of the Civil Court which was dismissed and the
respondent- Corporation's intervention in the appeal was not allowed.
the respondent-Corporation filed a writ petition challenging the validity of
the Civil Court's judgment. The High Court set
aside the award of compensation and directed the Civil Court to re-open the proceedings.
the appellant's appeal, this Court,
1. In view of the clear language used in clause (c) of section 20 of the Land
Acquisition Act, 1894 there cannot be any doubt that the respondent-Corporation
was entitled to be heard before the reference could be deter- mined. [22H]
Himalayan Tiles and Marbles (P) Ltd. v. Francis Victor Coutinho,  3 SCR
235, referred to.
land was acquired for the purpose of the respondent Corporation, and the burden
of payment of compensation is on the Corporation. Therefore, the High Court's
view that it was mandatory for the Court of reference to have caused a notice
to be served on the respondent-Corporation is correct. Non-service of notice
deprived the 21 Corporation of an opportunity to place its case before the
Court, and the judgment so rendered in the reference case was illegal and not
binding on the respondent-Corporation. [22D-E]
High Court's direction to the Civil Judge to re- open the proceedings and
decide the matter afresh after giving the Corporation a chance to lead its
evidence on the question of valuation is confirmed. [23B]
APPELLATE JURISDICTION: Civil Appeal No. 1561 of 1988.
the Judgment and Order dated 4.3.1987 of the Karna- taka High Court in W.P. No.
10292 of 1980.
Raju and N. Ganpathy for the Appellant.
Rajeshwar Thakur, Ms. C.K. Sucharita and P.R. Ramasesh for the Respondents.
Judgment of the Court was delivered by SHARMA, J. This appeal by special leave
is directed against the judgment of the High Court of Karnataka dated 4.3.1987
in W.P. No. 10292 of 1980 filed by the respondent No. 3, HubIi Dharwar
Municipal Corporation, setting aside an award made under the Land Acquisition
Act, 1897 in respect of the compensation payable to the present appellants and
directing to re-open the proceeding before the civil court on a reference under
s. 18 of the Act, for fresh disposal in accordance with law. The appellants
were the owners of the land in question. In a proceeding under the Urban Land (Ceiling and Regulation) Act, 1976, the appellants were
held to be having surplus land, which by virtue of the provisions of the Act
vested in the State Government. However, before the publication of the
aforesaid declaration in the official gazette, steps for acquisition were taken
for meeting the requirements of the respondent-Corporation. The appellants thus
escaped the consequences of the declaration made under the Ceiling Act, and
became entitled to the compensation payable in accordance with the provisions
of the Land Acqui- sition Act. Steps were accordingly taken for determination
of the compensation, and on an application by the appellants under s. 18 of the
Land Acquisition Act, reference was made to the civil court.
is common ground that after the case was received by the 22 civil court on
reference, no notice was issued to the respondent Corporation. The court did
not, however, proceed to take evidence and record its own finding on the
valuation, as it was conceded on behalf of the State Government that the market
value of the land could be calculated at the rate of Rs.3,800 per guntha. The
court answered the reference on the basis of the consent of the land owners and
the State. The State, however, was not satisfied with the award and filed an
appeal which was dismissed on ground of being not maintainable as the impugned
Judgment was held to be a compromise decree. An attempt by the
respondent-Corporation to intervene also failed. The Corporation thereafter
moved the High Court with a writ petition under Article '226 of the
Constitution, inter alia, challenging the validity of the civil court.'s
judgment directing higher compensation to be paid.
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 served on the respondent- Corporation before
proceeding to determine the compensation claim. Since no notice was given to
the respondent Corporation and it was thus deprived of an opportunity to place
its case before the court, the judgment rendered in the reference case was
illegal and not binding on the Corporation. We are in agreement with this view.
Section 20 of the Land Acquisition Act as applicable to the State of Karnataka reads as follows:
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 interested in the reference; and
the acquisition is not made for Government, the person or authority for whom it
view of the clear language used in clause (c) of s. 20, mentioned above, there
cannot be any doubt that the respond- ent-Corporation was entitled to be heard
before the refer- ence could be determined.
High Court has also relied upon the decision in Himalay- an Tiles and Marbles
(P) Ltd. v. Francis Victor Coutinho (dead) by Lrs. and others,  3 SCR
235, wherein the expression "person interested" was interpreted
liberally so as to include an authority like the Corporation in the present
case, but in view of the further provision specifi- cally mentioning in clause
(c) the authority for whom the acquisition is made it is not necessary to
interpret clause (b) of s. 20 in the present appeal. We accordingly confirm the
direction of the High Court as contained in the impugned judgment that the Principal
Civil Judge, Hubli, should re- open the proceedings in the L.A. Case No. 64 of
1979 and decide the matter afresh after giving the Corporation a chance to lead
its evidence on the question of valuation.
the matter is an old one, the respondent-Corporation is hereby directed to
appear in the said case within 3 weeks from today without waiting for any
further notice. The appeal is dismissed with costs.
Appeal dis- missed.