Civil Appeal No 1098 of 1971 
Appeal by Special Leave from the Judgment and order dated 23 7 1970 of the Bombay High Court in Appeal No 13 of 1965
Y section Chitale P G Gokhale and B R Agarwal for the Appellant
V section Desai Mrs Urmila Sirur far the Respondent Nos 2  3
Ex parte for the RR 4 and 5
The Judgment of the Court was Delivered by FAZALALI J
 This appeal by special leave is directed against a judgment dated November 3 1970 of the Bombay High Court dismissing the Letters Patent Appeal filed by the appellant Against a decision of a Single Judge allowing a writ petition filed by the first respondent
The facts of the case lie within a narrow Compass and may briefly summarized as follows The appellant was a private company which was carrying on the business of manufacture and sale of artificial marbles and tiles and other accessories at village Majas Mogra Jogeshwari East Bombay
The Company Was spread over about 10 acres of land
Sometime in 1957 or 1958 the company moved the Government for acquiring additional land for purposes of the Company
Accordingly on the 7th January 1958 the Government issued a notification under section 4 of the Land Acquisition Act 1894 hereinafter referred to 238 as the Act  which was followed by a separate notice by the Land Acquisition officer acquiring the land in dispute
This was followed by another notification under section 6 of the Act which was served on the respondent on the 25th January 1960
In pursuance of these notifications the acquisition proceedings went on which culminated in an award made under section 12 of the Act on April 11 1961 which was published in the State Gazette on April 18 1961
On December 11 1961 a letter was written on behalf of the Government informing the owner of the acquired land that possession would be taken on or about the 12th of January 1962
The purpose of the acquisition as mentioned in the notification was public purposes for which the land is needed for Himalayan Tiles  Marbles Pvt Ltd 
The first respondent in the writ petition filed in the High Court before a Single Judge prayed that the entire land acquisition proceedings should be quashed because the land was not acquired for any public purpose as contemplated by section 4 of the Act
It was contended before the Single Judge that the Government was not competent to acquire the land for purposes of a private company which could not be said to be a public purpose under section 4 of the Act
The plea taken by the first respondent found favour with the Single Judge who allowed the writ petition and quashed the land acquisition proceedings alongwith the notifications mentioned above
Thereafter the appellant filed an appeal before the Letters Patent Bench which confirmed the view taken by the Single Judge and dismissed the appeal mainly on the ground that the appellant had no locus standi to file the appeal before the Bench inasmuch as it was not a person interested within the meaning of section 181 of the Act
In support of this appeal the learned counsel for the appellant Dr Chitale has argued two points before us
In the first place it was submitted that the Division Bench of the High Court was wrong in holding that the appellant was not a person interested and therefore had no locus to file an appeal before the Letters Patent Bench
Secondly it was argued that in view of the various amendments in the Act particularly in sections 40 and 41 it could not be said that the acquisition under section 4 was ultra vires of the Act
We might mention here that in the case of RL Arora vs State of UP majority of the Judges of this Court took the view that a mere acquisition for the benefit of a company was not a public purpose and therefore the notification made in that case was struck down
Sarkar J however took a contrary view
In view of the decision Parliament amended certain provisions of the Act particularly sections 40 41 44A 44B and added a new sub 239 section 5A after section 5
In other words by virtue of the amendments the basis of the decision of the Supreme Court in the first Arora case was removed
By virtue of section 7 of the amending Act retrospective effect was given to the amendment superseding any judgment decree or order passed before July 20 1962
Section 7 of the amending Act may be extracted thus Validation of certain acquisitions 7
Notwithstanding any judgment decree or older of any Court every acquisition of land for a Company made or purporting to have been made under Part VII of the principal Act before the 20th day of July 1962 shall in so far as such acquisition is not for any of the purposes mentioned in clause a or clause b of sub section I of section 40 of the principal Act be deemed to have been made for the purpose mentioned in clause a of the said sub section and accordingly every such acquisition shall be and shall be deemed always to have been as valid as if the provisions of sections 40 and 41 of the principal Act as amended by this Act were in force at all material times when such acquisition was made or proceeding was held or order was made or agreement was entered into or action I was taken  This amending Act was also challenged in the case of RL Arora vs State of Uttar Pradesh  ors
 where this Court upheld its constitutional validity subject to certain corrosions The Appellant contended before us that in view of the later decision of the Supreme Court the previous decision of this Court stood superseded and the land acquisition proceedings taken even before the amendments were validated
In support of this argument Dr Chitale drew our attention to various provisions of the Act
Before however deciding the question as to whether or not the proceedings taken under section 4 were cured by the amending Act we would first deal with the contention of Dr Chitale that the High Court w IS wrong in holding that the company had no locus standi to file an appeal before the Letters Patent Bench
Learned counsel submitted that the definition of a person interested  in section 18 is an inclusive one and is wide enough to include the appellant for whose benefit the land was acquired and who had to pay the entire compensation in accordance with the agreement entered into by the Government with the appellant
He argued that it could not be said that the appellant was not interested in defending the acquisition or in the 240 quantum of compensation which was to be awarded by the Court on a Reference made by the Collector
The High Court was of the view that as the land was acquired by the Government the company had no interest in the same and was therefore not entitled either to appear or to defend the proceedings before the court
In order to decide this question it may be necessary to extract the relevant part of section 181 which runs thus 181
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
 It seems to us that the definition of a person interested  given in section 18 is an inclusive definition and must be liberally construed so as to embrace all persons who may be directly or indirectly interested either in the title to the land or in the quantum of compensation
In the instant case it is not disputed that the lands were actually acquired for the purpose of the company and once the land vested in the Government after acquisition it stood transferred the company under the agreement entered into between the company and the Government
Thus it cannot be said that the company had no claim or title to the land at all
Secondly since under the agreement the company had to pay the compensation it was most certainly interested in seeing that a proper quantum of compensation was fixed so that the company may not have to pay a very heavy amount of money
For this purpose the company could undoubtedly appear and adduce IF evidence on the question of the quantum of compensation
So far as this aspect of matter is concerned there appears to be a general consensus of judicial opinion that even though the company may not have any title to the property yet it certainly has a right to appear and put forward its case in the matter of determination of the quantum of compensation
In the case of Sunder Lal vs Paramsukh dasl this Court observed as follows It will be noticed that it is an inclusive definition
It is not necessary that in order to fall within the definition a person should claim an interest in land which has been acquired
A person becomes a person interested if he claims an interest in compensation to be awarded
It seems 241 to us that Paramsukhdas is a person interested within section 3b of the Act because he claims an interest in compensation
     It seems to us that Paramsukhdas was clearly a person interested in the objections which were pending before the Court in the references made to it and that he was also a person whose interest would be affected by the objections within s2l
He was accordingly entitled to be made a party
 In the case of The Hindustan Sanitaryware and Industries Ltd Bhadurgarh  Anr
vs The State of Haryana  Ors Pandit J observed as follows From the facts stated above it is apparent that the compensation amount has to be paid by the two companies
If the said amount is increased by the learned Additional District Judge on a reference under section 18 of the Land Acquisition Act it would be the two companies who would be prejudiced 
No authority even was cited by him that under similar circumstances any Court had ever held that the persons who had actually to pay the compensation could not be allowed to lead evidence and say that the compensation amount be not enhanced
 In the case of Comilla Electric Supple Ltd vs East Bengal Bank Ltd Comila  Ors while the High Court took the view that the company for whose benefit the land was acquired may not strictly be an interested person yet it had undoubtedly a right to appear and adduce evidence on the quantum of compensation
In this connection Mukherjea J Observed thus Section 50 cl
2 purports to remedy this disability and it lays down that in any proceeding held before a Collector or Court in such cases the local authority or company concerned may appear and adduce evidence for the purpose of determining the amount of compensation
The reason is plain
It is the company or the local authority who has got to pay the money in such cases and it would be unjust to deny them the right to appear and adduce 242 evidence which would have a bearing on the amount of the compensation money
 Roxburgh J made the following observations Thus the first question for decision is clearly settled by the above decision and there can be no doubt that in the circumstances at present being considered the company is a person interested as defined in the Act and is entitled to require a reference under section 18 unless that right is restricted by the terms of the proviso to section 502
 In the case of M Kuppuswami vs The Special Tahsildar LA II Industrial Estate Anzbathur at Saidapet Madras Venkatadri J interpreting the definition of interested person  observed as follows The only question for consideration therefore is whether the petitioner is a person interested as defined in section 3b of the Land Acquisition Act
The definition section says that the expression person interested  includes all persons claiming an interest in compensation to be made on account of the acquisition of land under the Act
The expression person interested  is Every comprehensive and it does not profess to give an exhaustive definition
The expression person interested  has been interpreted by various Courts and the trend of the opinion seems to be that I should give a liberal interpretation 
On a review of the case law on the subject it seems to me that the expression person interested  does not require that a person must really have an interest in the land sought to be acquired
It is enough if he claims an interest in compensation as distinguished from an interest in the property sought to be acquired
As long as a person claims a interest in the compensation he is a person interested within the meaning of the definition of that expression
 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 through the Land Acquisition Collector Sambalpur vs Amarandra Pratap Singh  Anr 2 where the High Court held that 243 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 or 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 therefor 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 181 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
The next point that was argued before us was as to whether the land acquisition proceedings are cured by section 7 of the amending Act referred to above
Mr VS Desai appearing for the respondents submitted that in the second Arora case supra while upholding the constitutional validity of section 4 and other amendments this Court laid down certain conditions which had to be fulfilled if an acquisition made prior to July 20 1962 was held to be valid
In this connection 11 reliance was placed by learned counsel for the respondents on the following passage from RL Arrora s case supra 244 Therefore before section 7 can validate an acquisition made before July 20 1962 it must first be shown that the acquisition is complete and the land acquired has vested in Government
This means that the land acquired has vested in Government either under section 16 or section 171 of the Act
Thus section 7 of the Amendment Act validates such acquisitions in which property has vested absolutely in Government either under section 16 or section 171
Secondly section 7 of the Amendment Act provides that where acquisition has been made for a company before July 20 1962 or purported to have been made under cla or cl
b of section 401 and those clauses do not apply in view of the interpretation put thereon in RL Arora s case 1962 2 Supp
SCR 149 it shall be deemed that the acquisition was for the purpose mentioned in cl
aa as inserted in s401 of the Act by the Amendment Act
Thirdly section 7 of the Amendment Act provides that every such acquisition and any proceeding order agreement or action in connection with such acquisition shall be and shall be deemed always to have been as valid as if the provisions of sections 40 and 41 of the Act as amended by the Amendment Act were in force at all material times when any action was taken for such acquisition
Finally this validity is given to such acquisitions and to all actions taken in connection therewith not with standing any judgment decree or order of any court
 A perusal of these observations would manifestly reveal that even under section 7 of the amending Act an acquisition made for a company prior to July 20 1962 must fulfil the following conditions a that the land has been acquired and is vested in Government  b that the acquisition has been made under clauses a and b of section 40I c that every such acquisition and any proceeding order etc shall be deemed always as valid as if the pro visions of sections 40 and 41 of the Act as amending by the amending Act were in force at all material times and d that by virtue of section 7 validity to the acquisition is given to all actions taken in connection therewith inspite of any judgment
decree or order of any court to the contrary
245 We are however satisfied that in the instant case the first condition adumbrated by this Court viz that there must be a complete acquisition before section 7 could validate the same has not been fulfilled at all
In this view of the matter we need not go into the other conditions indicated by this Court
It was contended by Mr Desai that according to the unchallenged pleadings of the respondents including the Government which was a party before the District Court and also before the Single Judge of the High Court there is nothing to show that after the issue of notification the Government had taken possession of the land so that it could be said that the land had vested in the Government in which case alone the acquisition proceedings would have been completed
In this connection our attention was drawn to para 1 of the petition filed by the respondents before the High Court which runs thus The petitioners have
become the owners of the said lands by inheritance and the present lands records in respect of the said lands stand in the name of the petitioners
There is no dispute between the petitioners and the respondents that the petitioners are the owners of the said immovable property
The petitioners were at all times and still are in possession of the said immovable properties
 According to this averment it is clearly pleaded that inspite of the notifications the possession had not been given to the Government and the respondents petitioners before the High Court were still in possession of the properties in question
A similar averment has been made in para 15 of the petition which may be extracted thus The petitioners say that they are still in possession of the said lands and possession of the said lands has not been taken away from them and the tenants of the petitioners numbering about 53 at present are in physical occupation of the same
 It was also alleged that the Government had threatened the petitioners in the High Court that possession would be taken through police but despite such threats given by the Government the petitioners were still in possession of the said lands and the structures were in possession of the tenants
The Government in its reply affidavit did not deny these averments
On the other hand they admitted the same
Para 8 of the reply affidavit may be extracted thus with reference to paragraph 1 of the petition I believe the contents thereof to be substantially correct though as stated above the petitioners  names do not appear as 246 occupants or owners in the record of rights relating to the land in question
 Similarly in para 21 of the reply the contents of para 15 of the petition were admitted and further the fact that possession was with the petitioners was not denied but was admitted to be correct
Para 21 of the reply affidavit runs thus 21
With reference to paragraph 15 of the petition I believe the contents thereof to be substantially correct Learned counsel for the appellant however drew our attention to a letter sent by the respondents and went on to show that possession of only one acre of land has been taken by the Government
Even the High Court clearly found that possession had not been fully delivered to the Government after the notification
In this connection the Division Bench observed as follows on the question of possession being delivered to the Government the petitioners specifically averred at the end of paragraph 15 of the petition
The Petitioners further say that notwithstanding the said letter and the threat therein contained the petitioners are still in possession of the said lands and their tenants are occupying the said structures standing thereon and possession thereof has not been taken by the respondents
They made similar averments at the end of paragraph l of the petition that the petitioners were at all times and still are in possession of the said immovable properties
 Admittedly the appellant did not appear before the Single Judge in the writ petition filed by the respondents and the petition was con tested only by the State
Perhaps the appellant may have thought that as its interests were fully safeguarded by the Government it was not necessary for it at that stage to appear before the High Court
Even so the pleas of both the parties taken together clearly show that the entire possession of the property did not pass to the Government and thus no title vested in the Government despite the notification acquiring the land
In these circumstances therefore it is unmistakably clear that the properties not having vested in the Government the acquisition was not complete and its invalidity could not be cured by section 7 of the amendment Act as pointed out by this Court in the case referred to above
On this ground alone the appellant must fail
Dr Chitale however suggested that out of 22 acres possession of one acre may have been taken by the Government
Assuming that to be so until the possession of the entire land acquired was taken 247 by the Government the acquisition could not be a complete acquisition so as to attract the operation of section 7 of the amending Act
In this view of the matter we are satisfied that the appellant has failed to prove that one of the essential conditions for application of section 7 of the amending Act which would cure the infirmities from which the acquisition proceedings suffer has been fulfilled
The inescapable conclusion therefore is that the land acquisition proceedings were void and no benefit accrued to the appellant from the amending Act
The result is that the appeal fails and is dismissed but in the circumstances of the case there will be no orders as to costs
NVK Appeal dismissed


Summary:
The appellant a private company was carrying on the business of manufacture and sale of artificial marbles and tiles
In or about 1957 the company moved the Government for acquiring additional land for purposes of the company and the Government on January 7 1958 issued a notification under section 4 of the Land Acquisition Act 1894 which was followed by a separate notice by the Land Acquisition officer acquiring the land in dispute
This was followed by another notification under section 6 of the Act which was served on the respondent on January 25 1960
The purpose of the acquisition was mentioned in the notification as public purposes for which the land is needed for Himalayan Tiles and Marble Pvt Ltd The acquisition proceedings culminated in an award made under section 12 of the Act on April 11 1961 which was published in the State Gazette on April 18 1961
On December 11 1961 a letter was written on behalf of the Government informing the owner of the acquired land that possession would be taken on or about the 12th of January 1962
The first respondent in his writ petition to the High Court contended that the Government was not competent to acquire the land for purposes of a private company which could not be said to be a public purpose under section 4 of the Act and prayed that the entire land acquisition proceedings should be quashed
A Single Judge of the High Court accepted the plea allowed the writ petition and quashed the land acquisition proceedings along with the notifications
The appellant filed an appeal before the Letters Patent Bench which confirmed the view of the Single Judge and dismissed the appeal on the ground that the appellant had no locus standi to file the appeal as it was not a person interested  within the meaning of section 181 of the Act
In the appeal to this Court it was contended on behalf of the appellant 1 the Letters Patent Bench of the High Court was wrong in holding that the appellant was not a person interested  and therefore had no locus standi to file an appeal and 2 in view of the various amendments in the Land Acquisition Act 1894 particularly in sections 40 and 41 it could not be said that the acquisition under section 4 was ultra vires of the Act
236 Dismissing the appeal  HELD 1i The appellant was undoubtedly a person interested  as contemplated by section 181 of the Act
The High Court committed an error in throwing out the appeal of the appellant on the ground that it had no locus standi to file an appeal before the Bench
243F ii The definition of a person interested  given in Section 18 is an inclusive definition and must be liberally construed so as to embrace all persons who may be directly or indirectly interested either in the title to the land or in the quantum of compensation
240D In the instant case the lands were actually acquired for the purpose of the Company and once the land vested in the Government after acquisition it stood transferred to the Company under the agreement entered into between the Company and the Government
Thus it cannot be said that the Company had no claim or title to the land at all
Secondly since under the agreement the Company had to pay the compensation it was most certainly interested in seeing that a proper quantum of compensation was fixed so that the Company may not have to pay a very heavy amount of money
For this purpose the Company could undoubtedly appear and adduce evidence on the question of the quantum of compensation
240E F iii 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
This view accords with the principles of equity justice and good conscience
243 B iv 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 is not correct
Such a person is vitally interested both in the title to the property as also in the compensation to be paid thereof because both these factors concern its future course of action and if decided against him seriously prejudice his rights
243E Sunder Lal vs Paramsukhdas  referred to The Hindustan Sanitryware and Industries Ltd Bahadurgarh  Anr
vs The State of Haryana  Ors AIR 1972 Punjab  Haryana 59 M Kurpuswami vs The Special Tahsildar LA II Industrial Estate Ambathur at Saidapet Madras 1967 approved Comilla Electric Supply Ltd vs East Bengal Bank Ltd Comilla  ors
AIR 1939 Calcutta 669 State of orissa through the Land Acquisition Collector Sambalpur vs Amarandra Pratap Singh  Anr
AIR 1967 orissa 180 over ruled
2i The properties not having vested in the Government the acquisition was not complete and its invalidity could not be cured by section 7 of the amendment Act
246 G ii The basis of the decision in R L Arora vs State of U P 1962 Supp 2 SCR 149 was removed by the 
By virtue of Section 7 of the amending Act retrospective effect was given to the amendment superseding any judgment decree or order passed before July 20 1962
The validity of the amending Act was upheld in R L Arora vs State of Uttar Pradesh  239 A E iii Even under section 7 of the amending Act an acquisition made by a company prior to July 20 1962 must fulfil the following conditions a that 237 the land has been acquired and is vested in Government b that the acquisition has been made under Clauses a and b or section 41 c that every such acquisition and any proceeding order etc
shall be deemed always as valid as if the provisions of sections 40 and 41 of the Act as amended by the amending Act were in force at all material times and d that by virtue of section 7 validity to the acquisition is given to all actions taken in connection there with in spite of any judgment decree or order of any court to the contrary
244F H In the instant case the first condition that there must be a complete acquisition before section 7 could validate the same has not been fulfilled at all
245A iv Until the possession of the entire land acquired was taken by the Government the acquisition could not be a complete acquisition so as to attract the operation of section 7 of the amending Act
246H 247A In the instant case the appellant did not appear before the Single Judge in the writ petition filed by the respondents and the petition was contested only by the State
Perhaps the appellant may have thought that as his interests were fully safeguarded lay the Government it was not necessary for it at that stage to appear before the High Court
The pleas of both the parties taken together clearly show that the entire possession of the property did not pass to the Government and thus no title vested in the Government despite the notification acquiring the land
246F G