Union of India Vs. District Judge [1994] INSC 214 (5 April 1994)
Ramaswamy,
K. Ramaswamy, K. Venkatachala N. (J)
CITATION:
1994 SCC (4) 737 JT 1994 (3) 629 1994 SCALE (2)822
ACT:
HEAD NOTE:
ORDER
1.This
appeal arises from a case which had a chequered career. The appellant addressed
a letter on 8-2-1968 to the Deputy Commissioner, Udhampur,
State of Jammu and
Kashmir enquiring
about the availability of land for extension of Air Field, Udhampur. The
Additional Secretary, Government of Jammu and Kashmir, wrote a letter to the
Ministry of Defence that 2027 kanals and 18 marlas of land was available for
acquisition at an approximate cost of Rs 12,62,655.32 paise subject to normal
rise or decrease in that amount, which may occur on the determination of the market
value.
The
Government had agreed and accorded sanction on 27-7-1970 for a 739 sum of Rs 13,34,056 for acquisition of the land.
Thereafter the Government of Jammu and Kashmir issued notification under Section 21 on 16-12-1971 requisitioning 2134 kanals of the said land situated in
Village and Tehsil Udhampur. A notification under Section 7 of the Jammu and Kashmir Requisitioning and
Acquisition of Immovable Property Act, 1968 (J & K Act 35 of 1968) (for
short 'the Act') was published in SRO No. 843 dated 16-12-1972. Thereafter exercising the power under Section 16 of the
Act the Deputy Commissioner, Udhampur was appointed as a competent authority
under the Act. He determined market value @ Rs 5100 per kanal for Class 'A'
lands in all the villages, Rs 4500 per kanal for Class 'B' lands in all the
villages and Rs 4800 per kanal for Class 'C' in all the villages. In addition
he awarded 15% solatium and interest at 4% from 16- 12-1972 to 25-6-1973, the date on which possession was
taken. The compensation had come to about Rs 1,21,00,000.
A
letter was issued to the subordinate officers for their approval. Since the
appellants had not approved the determination of the market value at the said
rate, they sought a reference under Section 8 of the Act. The District Judge
was appointed as an Arbitrator under Section 8(1)(b).
At the
beginning of the enquiry proceeding, held by the District Judge to determine
the market value, the respondents filed an objection before the arbitrator
contending that the award passed by the competent authority was an offer and it
was acceptable to them. Since the requisition and acquisition had been made by
the competent authority for and on behalf of the appellants they had no right
to object to the award made by the competent authority. Therefore, the enquiry
to be held by the District Judge as Arbitrator was without jurisdiction. But
when the enquiry of the Arbitrator proceeded, without deciding the respondents'
objections, they filed a writ petition in 1975. The learned Single Judge in his
order dated 22-2-1979 held that the award passed by the competent authority
being an offer, when the respondents had accepted that offer, it must be deemed
to be one made under Rule 9 read with Section 8(1)(a) of the Act. Therefore,
the appellants had no right to object to the offer made by the competent
authority. Accordingly he directed the competent authority to enter into an
agreement with the respondents in Form 'K'- Dissatisfied with that order the
appellants filed LPA No. 35 of 1979. The Division Bench, by its order dated
27-4-1983, while upholding the view of the Single Judge that the award of the
competent authority was an offer and that the appellants were bound by the
offer, set aside the direction given to enter into an agreement in Form 'K',
instead directed the District Judge to decide the objections filed by the
appellants. Thereafter, the District Judge overruled the objections and held
that the respondents had accepted the offer. Though no direct finding was
recorded that the offer became enforceable in consequence of rejecting the
reference under Section 8(1)(b), it must be concluded that the appellants were
bound by the offer made by the competent authority and it would be one
enforceable under Section 8(1)(a) of the Act. The appellants filed WP No. 295
of 1984 and the Division Bench by its order dated 8- 5-1985 while affirming the
view of the Single Judge and the Division Bench in the earlier 740 proceedings
held that the order passed by the District Judge is valid and the locus standi
of the appellants to file the writ petition was doubted accepting the stand
taken by the respondents that the appellants were not the persons interested
under Section 2(d) of the Act and dismissed the writ petition. Thus this appeal
by special leave.
2.
Section 2(b) defines competent authority to mean any person or authority
appointed by the Government by notification published in the Government Gazette
to perform the functions of the competent authority under the Act for such area
as may be specified in the notification. Section 16 of the Act empowers the
Government to delegate to the authorised officer the exercise of its powers and
duties under the Act, subject to such circumstances and under such conditions,
if any, as may be specified in the notification.
In
pursuance thereof, the competent authority was appointed to exercise the powers
of the Government and to perform its duties under the Act. Section 21 of the
Act provides the mode and procedure to requisition the immovable property
situated in the State of Jammu and Kashmir "required by the Union
Government in connection with the purpose of the Union" and when the
requisition in this behalf is received by the State Government it shall notify
that such property be requisitioned. Exercising the power under Section 21
followed by a notification issued under Section 7(1)(a), State Government
acquired the said property for extension of the Air Field at Udhampur. Section
8 provides the procedure to determine the compensation, which reads thus:
"8.
Principles and methods of determining compensation.- (1) Where any property is
requisitioned or acquired under this Act, there shall be given compensation
which shall be determined in the manner and in accordance with the principles
hereinafter set out, that is to say:
(a)Where
the compensation can be fixed by agreement, it shall be given in accordance
with such agreement;
(b)Where
no such agreement can be reached, the Government shall appoint as arbitrator a
person, who is a District Judge or Additional District Judge;" Sub-section
(3) of the Act provides:
"The
compensation for the acquisition of any property under Section 7, in the
absence of an agreement, shall be- (a)the price which the requisitioned
property would have fetched in the open market, if it had remained in the same
condition as it was at the time of requisitioning and been sold on the date of
acquisition, or (b)twice the price which the requisitioned property would have
fetched in the open market if it had been sold on the date of requisition,
whichever is less." 3.The Government framed the rules, namely
Requisitioning and Acquisition of Immovable Property Rules, 1969 which came
into effect from 741 5-1-1970 (for short 'the Rules'). Rule 9 is
the relevant rule concerned in this case and reads thus:
"9.
Compensation.- (1) An authority to whom the powers of the Government have been
delegated shall, as far as may be associate with itself the local officer of
the Government concerned with the property in fixing compensation under clause
(a) of sub- section (1) of Section 8, -and obtain the approval of the
Government in the Administrative Department concerned (or) any officer authorised
by the Government in this behalf.
(3)The
competent authority shall, as soon as may be practicable after the making of a
requisitioning order or the service of a notice of acquisition, communicate to
each person interested an offer of what in the opinion of the competent
authority, is a fair amount of compensation payable to such person in respect
of the property requisitioned or acquired.
(5)(i)
Every person interested to whom an offer is made under subrule (3) shall,
within fifteen days of the receipt of the offer, communicate in writing to the
competent authority his acceptance or otherwise of the offer. If he accepts the
offer, the competent authority shall enter into an agreement with him on behalf
of the Government in Form 'K'.
(ii)In
the following circumstances, the competent authority may at his discretion make
to an eligible claimant 'on-account' payment up to 80 per cent of the amount
which, in his opinion is likely to be assessed as compensation or recurring
compensation, as the case may be:
(a) when
there is likely to be delay in assessing compensation;
(b) where
the competent authority has made an assessment but there is delay in reaching
an agreement though there is a reasonable prospect of agreement being reached;
or (c) where it is clear that an agreement cannot be reached.
(iii)If
the competent authority makes an 'on- account' payment under clause (ii), he
shall enter into an agreement with the person to whom payment is made on behalf
of the Government in Form 'L' with such modification as the nature of the case
may require.
(6)If
any person to whom an offer is made under sub-rule (3) does not accept the
offer or does not within fifteen days of the receipt of the offer communicate
in writing to the competent authority his acceptance or otherwise of the offer
the competent authority shall, as soon as may be, submit to the Government a
report setting forth the full facts of the case. Particularly as regards the
nature and extent of disagreement between himself on the one hand and the said
person on the other hand and he shall also forward with the report all
connected papers. The competent authority shall at the same time deposit in
Court the amount offered by him to the said person under sub-rule (3)."
742 A reading of Section 8(1)(a) and Rule 9 would clearly indicate that the
competent authority appointed under Section 16 is enjoined to associate himself
with the local officer of the Government concerned, i.e., when acquired for the
Union Government, its officer, in fixing the compensation. The contention of Mr
Bhim Singh learned counsel for the respondents that the officer of the
Government concerned would necessarily mean only the officer of the State
Government who is empowered to act under the Act; the officers of the
appellant, Union of India have no right or authority to associate with the
competent authority, to determine the compensation, is devoid of substance. The
phrase "local officers of the Government concerned with the property"
in Rule 9(1) read with Sections 8 and 21 brings out the distinction. Therefore,
the delegated competent authority, when is enjoined to determine compensation
in association with local officer of the Government concerned when it comes to
Union of India, must associate himself with the local officers of the Central
Government and obtain the approval of the Department of Central Government or
the approval of any officer of the Central Government as may have been authorised.
4.In
this case, the compensation was fixed with the association of the local
officers of the appellant. The contention that the appellants have no locus standi
is equally no longer res integra. In addition he also contends that for the
second limb of Rule 9(1) i.e. the approval of the Government in the
administrative department, it is only of the State Government of Jammu and Kashmir or an officer authorised by the
State Government in that behalf. Since the competent authority having been authorised
in the notification, there is no need for further authorisation or the approval
needed in this behalf and that, therefore, the award made by the competent
authority is only an offer as held by the High Court in the previous
litigation. It binds the appellants and that, therefore, they cannot question
the offer made by the competent authority. We find no force in the contention.
The language of Rule 9(1), namely, the delegated authority shall "as far
as may be associated with itself the local officer of the Government concerned
with the property in fixing compensation" would necessarily mean that the
local officer of the Government of India that is apparent when we read the
language closely with the language used in Section 21 of the Act. Section 21
expressly postulates that when the requisition is sought on behalf of the Union
of India, the Government of Jammu and Kashmir acts under Section 21 requisitioning the land for the public purposes
of the Union of India. Admittedly when the notification under Section 21 was
issued requisitioning the land for defence purpose and the land was acquired
under Section 7, association with the competent authority, is only of the local
officer of the Government of India and not of the State Government. The reason
is obvious that the officers of the appellant are interested to collect the
best evidence of the prevailing market value and would place that evidence
before the competent authority to fix true and correct compensation.
5.The
second limb, namely, the necessity to obtain "the approval of the
Government in the administration department concerned" would also 743
necessarily mean the approval of the Government of India in its administration
department i.e. the department for which requisition was made. The object
appears to be that when the compensation determined by the competent authority
under Section 8(1)(a) is sought to be made a binding contract on the Union of
India or its department for which requisition was done, its approval is a
necessary condition precedent so as to bind the department for which
requisition was done on the Union of India.
6.The
next question which we have to see is whether the High Court was right in its
view taken in the earlier proceedings that there was an offer made by the
competent authority and the same was accepted. It is not in dispute that after
the determination of the compensation by the competent authority, a letter was
addressed about the market value determined by him. The local officer had
admittedly stated that though he was agreeable to the amount determined, unless
the approval of the Government of India is obtained, he cannot give his
concurrence. Thereafter no concurrence of the Government of India had been
obtained nor was any offer communicated to the respondents for their
acceptance. No record has been placed even in the earlier proceedings before
the High Court of such a communication by the officer and its acceptance. It is
seen that under Rule 9(5) it is mandatory that every person interested in the
offer shall "within 15 days of the receipt of the offer communicate in
writing to the competent authority his acceptance or otherwise of the
offer". It is thereby clear that the communication of the offer to the
person concerned and his acceptance within 15 days thereafter from the date of
the receipt of the offer are mandatory requirements and should be complied
with. It is seen that the procedure has been prescribed in a mandatory language
to ensure that the offer must be made after the approval by the Government
concerned or with the approval of its officer specifically authorised in that
behalf. The acceptance also should be in writing and must be made within the
time prescribed.
Otherwise
the offer does not bind the requisitioning department for which acquisition was
done or the Union of India or the owner whose land had been acquired for the
public purpose. The High Court, therefore, was not right in its conclusion that
there must be deemed acceptance by the respondents since they had so stated in
their objection petitions in the enquiry proceedings held for the determination
of the compensation by the arbitrator appointed under Section 8(1)(b) of the
Act.
7.The
next question, therefore, is whether the appellants have locus standi to object
to the compensation determined by the competent authority under Section 8(3) of
the Act.
Section
2(d) of the Act defines:
"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." This point is no longer res integra. Dealing
with a pari materia definition of "person interested" in Central Act
this Court in Himalayan Tiles & Marbles 744 (P) Ltd. v. Francis Victor
Countinho1 had laid down thus: (SCR pp. 242-43: SCC pp. 228-29, paras 13-14)
"The only case which appears to have taken a contrary view is a Division
Bench decision of the Orissa High Court in the case of State of Orissa v. Amarandra Pratap Singh2 where
the High Court held that the expression 'person interested' did not include a
local authority or a company on whose behalf acquisition is made by the State.
At the same time, it was clearly held that it was open to the company in any
proceeding before the Collector or court to appear and adduce evidence for the
purpose of determining the amount of compensation.
Thus,
the preponderance of judicial opinion seems to favour the view that the
definition of '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. In our opinion,
this view accords with the principles of equity, justice and good conscience.
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. We are, therefore, unable to agree
with the view taken by the Orissa High Court or even by the Calcutta High Court
that a company, local authority or a person for whose benefit the land is
acquired is not an interested person. We are satisfied that such a person is
vitally interested both in the title to the property as also in the
compensation to be paid therefore because both these factors concern its future
course of action and if decided against him, seriously prejudice his rights.
Moreover, in view of the decision of this Court referred to above, we hold that
the appellant was undoubtedly a person interested as contemplated by Section
18(1) of the Act. The High Court, therefore, committed an error in throwing out
the appeal of the appellant on the ground that it had no locus to file an
appeal before the Bench." 8.This view was reiterated in Neelagangabai v.
State of Kamataka3; Krishi Upaj Mandl Samiti v. Ashok Singha14; Union of India
v. Sher Singh5 and Bihar State Electricity Board v. State of Bihar6. Thus it is
settled law 1 (1980) 3 SCC 223 : (1980) 3 SCR 235 2 AIR 1967 Ori 180: ILR 1967
Cut 510 3 (1990) 3 SCC 617 4 1991 Supp (2) SCC 419 5 (1993) 1 SCC 608 6 Civil
Appeal Nos. 1577-1600 of 1994, decided on Feb. 21, 1994 745 that the
requisitioning authority is a person interested since it is interested in the
fixation of the proper and just market value or compensation of the land
acquired on its behalf as well as to see that the true extent of the land is
acquired -and is free from encumbrances. The participation in the proceedings
by the local officers is to enable not only the determination of the proper and
just market value or compensation in their presence after laying necessary and
relevant evidence but also to secure valid title to the land acquired so that
land acquisition officer and the court determine just and proper market value
of the lands. It is, therefore, clear that the appellant is a proper and
necessary party under Order 1 Rule 10 CPC. It is also the person interested
under Section 2(d) of the Act.
Accordingly
the view of the High Court that the appellants are not interested persons is
clearly illegal. It is accordingly set aside.
9.The
question then is what is the procedure to be adopted in this case. In view of
the fact that there is no agreement between the parties as contemplated under,
Section 8(1)(a) read with Rule 9 of the Rules, as seen earlier, the only course
open to the authorities is to appoint an arbitrator under Section 8(1)(b) of
the Act and the arbitrator is enjoined to determine the market value as
contemplated under sub-section (3) of Section 8 of the Act.
In
that view, necessarily, the matter has to be remitted for the decision by the
arbitrator to be appointed by the State Government under Section 8(1)(b)
afresh. But on the facts in this case since 23 years have elapsed, we find no
justification to remit the matter. The competent authority had fixed the market
value at the rate specified earlier and admittedly local officers had
associated themselves with the competent officer at the time of fixation of the
market value. This Court had held in Union of India v. Hari Krishan Khosla7
that the property Acquired under the Requisitioning and Acquisition of
Immovable Property Act, 1952 (for short the 'Central Act'), the arbitrator has
no power to award solatium and interest. The same principle would apply proprio
vigore to the principles laid down under Section 8(3) of the Act. Accordingly
we conclude that the determination of the solatium at 15% and interest at 4% by
the competent authority under Section 8(3) of the Act is illegal. Therefore, to
that extent it is set aside.
However,
fixation of market value at the rates specified above are upheld in the
peculiar circumstances of the case.
This
Court has given interim directions from time to time and directed the-appellant
to deposit half of the amount determined together with the solatium and
interest etc. In the light of the decision now given, the competent authority
is directed to work out the total compensation payable for the lands acquired
at the rate specified by it as now upheld; deduct the amount already paid to
the respondents in pursuance of the directions issued by this Court from time
to time. If any balance amount is found due and payable by the appellant, it
would be so determined and would communicate the same to the local officer of
the appellant.
The
competent authority is directed to decide the matters as above within a period
of two months from 7 1993 Supp (2) SCC 149 746 the date of receipt of this
order and the appellant is directed to deposit the balance amount, if any,
within a further period of three months from the date of the receipt of the
notice by the local officer.
10.The
appeal is accordingly allowed as indicated above, but in the circumstances
without costs.
Back