State
of Karnataka & Anr Vs. Sangappa Dyavappa Biradar
& Ors [2005] Insc 202 (30 March 2005)
N. Santosh
Hegde & S.B. Sinha
[Arising
out of S.L.P. (Civil) Nos.5216-5218 of 2004] S.B. SINHA, J:
Leave
granted.
These
appeals are directed against the judgment and order dated 18.2.2003 passed by a
Division Bench of the High Court of Karnataka, Bangalore in Writ Appeal Nos.
1677, 2500 and 2501 of 2000 whereby and whereunder the writ appeals filed by
the Respondents herein were allowed, reversing the judgment and order passed by
a learned Single Judge of the said court dismissing the writ petitions filed by
the Respondents herein.
Keeping
in view the point involved in these appeals, it is not necessary to state the
fact of the matter in great details. Suffice it to point out that for the
purpose of submergence and construction of canal for the Upper Krishna Project,
the Appellant State intended to acquire some lands including the lands
belonging to the Respondents herein. The parties entered into negotiations as
regard the price of the lands; pursuant whereto and in furtherance whereof consent
awards were passed by the Special Land Acquisition Officer. The amount of
compensation awarded in terms of the consent award was also received by the
Respondents in full satisfaction of their claim. The Respondents, however,
filed applications for reference to the Civil Court in terms of Section 18 of
the Land Acquisition Act, 1894 (hereinafter referred to as "the Act")
claiming enhanced compensation. The said prayer was rejected by the Collector
by an order dated 23.8.1999. The Respondents thereafter filed writ petitions
before the High Court which were marked as Writ Petition Nos. 41354, 36840 and
36748 of 1999 praying therein for quashing of the said order as also for a direction
upon the Respondent No.2 to refer the applications filed by them to the Civil
Court for determining the amount of compensation in respect of the acquired
lands.
By
reason of judgments and orders dated 6.1.2000 and 19.1.2000, the said writ
petitions were dismissed on the ground that the parties having entered into
settlement as regard the price of the lands acquired and as a consent award had
been passed pursuant thereto, recourse to Section 18 of the Act was
impermissible. The Respondents herein filed writ appeals against the said
judgments. The Division Bench of the High Court rejected the contention of the
Respondents herein to the effect that the agreement between the parties had not
been drawn up in terms of the form prescribed under Rule 10(b) of the Land
Acquisition Rules and furthermore did not conform to the requirements of
Article 299 of the Constitution of India. It, however, allowed the said writ
appeals on the premise that the amount of compensation was not paid to the
Respondents herein in terms of the agreement entered into by and between the
parties and in any event, the Respondents could not have been deprived of their
statutory right of obtaining solatium and interest in terms of the Act,
directing :
"We
direct the respondents to compute the balance amounts payable to the claimants
within an outer limit of twelve weeks from today and to disburse the same to
the claimants immediately thereafter. With these directions, the appeals to
stand disposed of. Parties to bear their own costs.
We
clarify, that the claimants would be entitled to not only the statutory
benefits but whatever interest that they are lawfully entitled to." The
Appellants are, thus, before us.
Mr.
Sanjay R. Hegde, the learned Counsel appearing on behalf of the Appellants,
would submit that the Division Bench of the High Court committed a gross error
in passing the impugned judgment insofar as it failed to take into
consideration the scope, object and purport of Section 18 of the Act. Relying
on the judgments of this Court in State of Gujarat and Others vs. Daya Shamji Bhai
and Others [(1995) 5 SCC 746] and Ishwarlal Premchand Shah and Others vs. State
of Gujarat and Others [(1996) 4 SCC 174], the learned counsel would contend
that as the awards passed by the Land Acquisition Officer were consent awards,
reference to the Civil Court in terms of Section 18 thereof was impermissible.
Ms. Kiran
Suri, the learned counsel appearing on behalf the Respondents, on the other
hand, would contend that the reference in terms of Section 18 of the Act was
maintainable as the Respondents were made to sign certain forms which contained
blank columns as regard the amount of compensation payable to them. The learned
counsel would submit that the Respondents were, in any event, entitled to the
amount of solatium as also interest on the awarded amount. Even in relation to
a consent award, it was argued, the Land Acquisition Officer is required to
exercise a statutory power in terms of the provisions of the Act and the same
having not been done, the Appellant was entitled to obtain an order of
reference to the Civil
Court. Reliance, in
this connection, has been placed on Assam Railways & Trading Co. Ltd. vs.
The Collector of Lakhimpur and Another [(1976) 3 SCC 24].
By
reason of the Government Order No. Kam.E.140 AKW 98 dated 19.6.1998, it was
directed that the lands should be classified mainly into two categories i.e.
dry land and wet land, the amount of compensation payable therefor were
specified therein. The parties thereafter entered into agreements culminating
in passing of the consent awards, the relevant stipulations whereof are as
under:
"Whereas
the S.L.A.O. has negotiated the market price of the land to be acquired with
the owner of the above land and the owner has agreed to the rate of Rs.1,14,000/-
per acre for the land in question, including the other statutory benefits of
30% solatium and 12% additional market value which rate fixed as above and it
does not include the compensation payable to the owner for the structures,
trees and other improvements made on the land in question. Which compensation
would be subsequently assessed by the competent technical authority and the
value so arrived at would be added to the price of the land determined through
this consent.
The
above compensation has been arrived at by mutual consent and as a consequence
the owner hereby agrees to execute an indemnity bond and also agrees with the
Government as follows:
1. The
owner is agreeable to the rate of Rs.1,14,000/- inclusive of 30% Solatium and
12% Additional Market Value per acre which is fixed by mutual consent between
the Government and the owner.
The
owner binds himself to this compensation and undertakes not to seek any
enhancements hereafter." After the said consent awards were passed, statements
were also made by the respective villagers declaring that they would not
approach 'any court for enhancement of the compensation for any other reason'.
It is
not in dispute that in terms of the said consent awards, the amount of
compensation included solatium and additional market value.
The
landholders, as noticed hereinbefore, also waived their right to file any
application for enhancement of the amount of compensation.
The
sole question, thus, which arose for consideration before the High Court was as
to whether the applications filed by the Respondents herein in terms of Section
18 of the Act before the Special Land Acquisition Officer seeking reference to
the Civil Court for determination of quantum of compensation, were
maintainable.
Section
18 of the Act reads 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 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." A right of a
landholder to obtain an order of reference would arise only when he has not
accepted the award. Once such award is accepted, no legal right in him survives
for claiming a reference to the Civil Court. An agreement between the parties as regard the value of
the lands acquired by the State is binding on the parties. So long as such
agreement and consequently the consent awards are not set aside in an
appropriate proceeding by a court of law having jurisdiction in relation
thereto, the same remain binding. It is one thing to say that agreements are void
or voidable in terms of the provisions of the Indian Contract Act having been
obtained by fraud, collusion, etc, or are against public policy but it is
another thing to say that without questioning the validity thereof, the
Respondents could have maintained their writ petitions. We have noticed
hereinbefore that even in the writ petitions, the prayers made by the
Respondents were for quashing the order dated 23.8.1999 passed by the Special
Land Acquisition Officer and for issuance of a direction upon him to refer the
matter to the Civil
Court. The High Court
while exercising its jurisdiction under Article 226 of the Constitution of
India, thus, could not have substituted the award passed by the Land
Acquisition Officer by reason of the impugned judgment.
Furthermore,
the question as regard the validity of the agreements had not been raised
before the High Court. As indicated hereinbefore, the Division Bench of the
High Court had also rejected the contention raised on behalf of the Respondents
herein to the effect that the agreements did not conform to the requirements of
Article 299 of the Constitution of India or had not been drawn up in the
prescribed proforma.
An
award under the Act is passed either on consent of the parties or on
adjudication of rival claims. For the purpose of passing a consent award, it
was not necessary to comply with the provisions of Article 299 of the
Constitution of India. An agreement between the parties need not furthermore be
strictly in terms of a prescribed format.
The
Respondents having accepted the award without any demur were estopped and
precluded from maintaining an application for reference in terms of Section 18
of the Act. It is also trite that by reason of such agreement, the right to
receive amount by way of solatium or interest etc. can be waived.
In Daya
Shamji Bhai (supra), this Court held :
"The
right and entitlement to seek reference would, therefore, arise when amount of
compensation was received under protest in writing which would manifest the
intention of the owner of non-acceptance of the award. Section 11(2) opens with
a non-obstante clause "notwithstanding anything contained in sub- section
(1)" and provides that "if at any stage of the proceedings, the
Collector is satisfied that all the persons interested in the land who appeared
before him have agreed in writing on the matters to be included in the award of
the collector in the form prescribed by rules made by the appropriate
Government, he may, without making further enquiry, make an award according to
the terms of such agreement. By virtue of sub-section (4),
"notwithstanding anything contained in the Registration Act, 1908, no
agreement made under sub-section (2) shall be liable to registration under that
Act". The award made under Section 11(2) in terms of the agreement is,
therefore, an award with consent obviating the necessity of reference under Sectin
18." In Ishwarlal Premchand Shah (supra), it was held:
"8.
It is true that on determination of compensation under sub-section (1) for the
land acquired, Section 23(2) enjoins to award, in addition to the market value,
30% solatium in consideration of compulsory nature of acquisition. Equally,
Parliament having taken notice of the inordinate delay in making the award by
the Land Acquisition Officer from the date of notification published under
Section 4(1) till passing the award under Section 11, to offset the price
pegged during the interregnum, Section 23(1-A) was introduced to award an
amount calculated @ 12% per annum on such market value, in addition to the
market value of the land, for the period commencing on and from the date of the
publication of Section 4(1) notification to the date of award of the Collector
or date of taking possession of the land whichever is earlier. Under Section
28, interest was directed to be paid on the excess compensation at the rate
specified therein from the date of taking possession of the land to the date of
deposit into court of such excess compensation. These three components are in
addition to the compensation determined under sub-section (1) of Section 23.
They intended to operate in different perspectives. One for compulsory
acquisition, the other for the delay on the part of the Land Acquisition
Officer in making the award and the third one for deprivation of the enjoyment
of the land from the date of taking possession till determination of the
compensation. The three components are in addition to the determination of
market value under sub-section (1) of Section 23. They are not integral to
determination of compensation under sub-section (1) of Section 23 but in
addition to, for the circumstances enumerated hereinbefore. In a private sale
between a willing vendor and a willing vendee, parties would arrive at
consensus to pay and receive consolidated consideration which would form the
market value of the land conveyed to the vendee. For public purpose, compulsory
acquisition under the Act gives absolute title under Section 16 free from all
encumbrances. Determination of the compensation would be done under Section
23(1) on the basis of market value prevailing as on the date of the publication
of the notification under Section 4(1). It would, therefore, be open to the
parties to enter into a contract under Section 11(2), without the necessity to
determine compensation under Section 23(1) and would receive market value at
the rates incorporated in the contract signed under Section 11(2) in which
event the award need not be in Form 14.
9.
This Court in State of Gujarat v. Daya Shamji Bhai1 had considered the similar
contentions and held that once the parties have agreed under Section 11(2) of
the Act, the Land Acquisition Officer has power under Section 11(2) to pass the
award in terms thereof and that the award need not contain payment of interest,
solatium and additional amount unless it is also part of the contract between
the parties. The same ratio applies to the facts in this case. In view of the
above clauses in the agreements the appellants are not entitled to the payment
of additional amounts by way of solatium, interest and additional amount under
the provisions of the Act." Assam Railways & Trading Co. Ltd. (supra)
whereupon Ms. Suri placed reliance is not applicable to the fact of the present
case. Therein negotiations had taken place between the parties whereupon the
Railway Administration became prepared to pay Rs.2500/- per bigha towards the
sale price of the land but the transaction was not completed, having regard to
the fact that under the State Railway Rules, land from private parties could be
acquired only by taking recourse to acquisition proceedings. Thereafter, in the
land acquisition proceedings, an award was made by the Land Acquisition
Collector allowing compensation at the rate of Rs.1000/- per bigha. It is in
that situation, the negotiation between the parties was highlighted stating
that although the same did not fructify into a binding contract, there was at
least a "gentleman's agreement" regarding the price which indicated
what a willing purchaser was ready to pay for the land. In the factual backdrop
of that case this Court observed:
"Assuming
this was an agreement which bound the parties, the Collector had still the
jurisdiction to determine the market value of the land..."Keeping in view
the fact that the condition precedent for maintaining application for reference
under Section 18 is non-acceptance of the award by the awardee, in our
considered opinion, the Division Bench acted illegally and without jurisdiction
in passing the impugned judgment. The learned Single Judge was right in concluding
that the writ petitions were not maintainable.
For
the reasons aforementioned, the impugned judgments cannot be sustained which
are set aside accordingly. The appeals are allowed.
However,
in the facts and circumstances of the case, there shall be no order as to
costs.
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