THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE SANJAY KUMAR L.A.A.S.NOS.826 OF 2005, 10 OF 2006, 84 OF 2007, 85 OF 2007 AND 233 OF 2008 DATED DECEMBER, 2010 BETWEEN The Land Acquisition Officer, Special Deputy Collector, L.A. Unit, Sc.Co.Ltd., Godavarikhani. And Others. … Appellants/ Referring Officers And Gosikka Lamaiah and Others … Respondents/ Claimants. THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE SANJAY KUMAR L.A.A.S.NOS.826 OF 2005, 10 OF 2006, 84 OF 2007, 85 OF 2007 AND 233 OF 2008 COMMON JUDGMENT: (Per SK,J) The State is in appeal under Section 54 of the Land Acquisition Act, 1894 (for brevity, ‘the Act of 1894’) assailing the correctness of the individual Orders and Decrees passed by the reference Court of the Senior Civil Judge, Peddapalli, in O.P.Nos.13/2004, 102/1999, 58/2002, 36/2000 and 38/2001, enhancing the market value of the acquired lands determined by the Land Acquisition Officer. These appeals are amenable to a conjoined disposal on a short ground. Hence, this common order. Various extents of lands in Karimnagar District belonging to the respondents/claimants were acquired by the State for the extension of Ramagundam Thermal Power Project by way of an additional Unit. However, the State thereafter decided to invite international competitive bids for setting up an individual Thermal Power Project and in the process, the bid submitted by the BPL Group of Companies was accepted. A letter of intent was also issued to M/s.BPL Limited, the flagship company of the Group. Pursuant thereto, the erstwhile Andhra Pradesh State Electricity Board entered into a Power Purchase Agreement with M/s.BPL Limited. In terms of the said agreement, M/s.BPL Power Projects (AP) Pvt. Ltd. (hereinafter referred to as ‘the Company’) was incorporated for the purpose of setting up the Power Project. As per the agreement, the State was required to acquire the land for the Project and make it available to the Company. After the division of the erstwhile Andhra Pradesh State Electricity Board, the Transmission Corporation of Andhra Pradesh (APTRANSCO) became the successor-in-interest of the Board in so far as the above agreement is concerned. In all, Ac.1779.38 guntas of land situated in various villages of the District were acquired, of which Ac.1279.10 guntas was private land and the balance Ac.500.28 guntas belonged to the Government. Various G.Os. were issued by the Government of Andhra Pradesh facilitating the transfer of the acquired land to the Company as provided under Section 44-A of the Act of 1894. Consequently, the APTRANSCO entered into a Memorandum of Understanding with the Company with regard to these acquired lands, visiting the liability of paying the compensation therefor including the enhancement of the cost of land acquired, if any, upon the Company. The Special Deputy Collector, L.A. Unit, RTPS (Extension), Ramagundam, Karimnagar District, being the Land Acquisition Officer, passed several Awards determining the compensation payable for the various extents comprising the acquired land of Ac.1279.10 guntas. Aggrieved by such determination of the market value, several of the land owners sought reference under Section 18 of the Act of 1894. The O.Ps. from which the present appeals arise are some of the references so made. Pertinent to note, the Company was not a party before the reference Court. It was only upon the filing of appeals by the State against the enhancement effected by the reference Court that the Company was put on notice, requiring it to deposit 50% of the enhanced compensation as per the interim orders passed by this Court in the appeals. The Company thereupon got itself impleaded in these appeals as a party respondent. Its contention at the outset is that the Orders and Decrees passed by the reference Court are liable to be set aside on the ground of violation of the statute and the principles of natural justice. The Company asserted that it was a proper and necessary party to the reference proceedings and the failure to implead it prior to adjudication vitiated the entire exercise undertaken by the reference Court. Sri V.Ravinder Rao, learned counsel appearing for the Company, asserted that Section 50(2) of the Act of 1894 vested his client with a right to appear before the reference Court and adduce evidence for the purpose of determining the compensation. Learned counsel submitted that this right could be exercised by his client only if it was put on notice of the proceedings instituted before the Court. As there was a failure in this regard and his client remained ignorant all through, the learned counsel submitted that there is a statutory violation in addition to the breach of the principles of natural justice. The learned counsel relied upon the Judgments of the Supreme Court in U.P.AWAS EVAM VIKAS PARISHAD v. GYAN DEVI (DEAD) BY LRs.[1] and NTPC LTD. v. STATE OF BIHAR[2] to support his contention that the Orders and Decrees under challenge are unsustainable on the short ground stated surpa. In U.P.AWAS EVAM VIKAS PARISHAD1, the majority opinion (4:1) was that the object underlying Section 50(2) of the Act of 1894, in the context of acquisition for a company and a reference under Section 18 of the Act of 1894, was to safeguard the interest of the Company which would be required to pay the amount of compensation that would be determined by the reference Court, by enabling it to adduce evidence having a bearing on the amount of compensation before the Court, thereby assisting it to make a fair determination. The Court was of the opinion that this provision afforded a certain degree of protection to the Company in the matter of determination of the amount of compensation and therefore, Section 50(2) of the Act of 1894 must be construed as conferring a right on the Company for whom the land is acquired to participate in the acquisition proceedings at the stage of determination of the amount of compensation before the Collector as well as the reference Court. In the context of notice being given to the Company, the Supreme Court observed that the right afforded by Section 50(2) of the Act of 1894 can be effectively exercised only if the Company has information of the proceedings which are pending before the reference Court. Therefore, the right conferred under the said Section carries with it the right to be given adequate notice by the reference Court before whom the acquisition proceedings are pending, of the date on which the matter of determination of the amount of compensation would be taken up. The Court held that service of such notice, being necessary for effectuating the right conferred on the Company under Section 50(2) of the Act of 1894, can therefore be regarded as an integral part of the said right and the failure to give such notice would result in denial of the said right, unless it can be shown that the Company had knowledge about the pendency of the acquisition proceedings before the reference Court and had not suffered any prejudice on account of the failure to give such notice. The Court further observed that the presence of the Company is necessary for the decision on the question involved in the proceedings before the reference Court and it is a proper party in the proceedings. If it is not impleaded as a party before the reference Court, the Supreme Court was of the opinion that it could file an appeal against the Award of the reference Court in the High Court after obtaining leave, if prejudicially affected by such Award. In case the Government itself filed an appeal against such enhancement, the Company would be entitled to support the State’s appeal and get itself impleaded as a party. I n NTPC LTD.2, the Supreme Court having considered its earlier view in U.P.AWAS EVAM VIKAS PARISHAD1, observed: “10. ……… The right which the acquiring body has is not just a right to lead evidence before the Reference Court. The acquiring body also has a right to support the award which has been made by the Land Acquisition Officer. This can be done by cross- examining witnesses led by the claimants. Non-impleadment of the body on whose behalf acquisition has taken place, defeats this right. 11. ……… 12. In our view, as the appellants were entitled to be impleaded in the reference proceedings, the High Court was in error in not setting aside the awards and referring the cases back to the Reference Court with a direction that they be impleaded. The fact that amounts have been enhanced, shows that prejudice has been caused to the appellants. We, therefore, set aside the impugned judgment except to the extent that it directs that in all pending references the appellants will be impleaded as parties. The awards made by the Reference Court in the 492 cases, where the amounts have been enhanced, are set aside. These cases are remitted back to the Reference Court. The appellants shall be deemed to have been brought on record in all these cases as well as all other pending cases. The Reference Court shall try to dispose of the references as expeditiously as possible. The statement of witnesses already recorded on behalf of the claimants need not be recorded afresh. However, the appellants shall have a right to cross-examine the witnesses, if they so desire. For that purpose those witnesses shall be recalled. If, however, those witnesses cannot be recalled for a valid reason e.g. because they have died or cannot be found then their statements shall not be excluded from consideration and shall be read in evidence. All claimants shall also be entitled to adduce further evidence, if they so desire. The appellants will be entitled to adduce evidence if they so desire. 13. We further direct that if the enhanced compensation has been paid to the claimants then the same shall not be recalled but shall finally be adjusted in the amount which may be fixed by the Reference Court. It goes without saying that if the enhanced compensation has not been paid, then the same shall not be paid.” There is no evidence in the present cases that the Company was aware of the reference proceedings initiated under Section 18 of the Act of 1894. The prejudice caused to it by such ignorance is manifest as it has to foot the liability arising out of the enhancement effected by the reference Court. That being so, the law laid down by the Supreme Court in NTPC LTD.2 leaves no room to doubt that the Orders and Decrees under challenge in these appeals before us must necessarily be set aside. The Company was deprived of an opportunity to cross-examine witnesses and adduce independent evidence for the determination of the market value. The statutory right afforded to it by Section 50(2) of the Act of 1894 therefore stood negated. We accordingly set aside the Orders and Decrees in O.P.Nos.13/2004, 102/1999, 58/2002, 36/2000 and 38/2001 and remit the matters to the reference Court for consideration afresh giving due opportunity to the Company, which shall be deemed to have been impleaded in the reference proceedings. The Company shall be given full opportunity as indicated in para 12 of NTPC LTD.2 extracted supra in the process of determination of the market value of the acquired lands. As a portion of the enhanced amount under the Orders and Decrees under challenge has already been paid to the respondents/claimants, the same shall not be recalled pending the final adjudication by the reference Court and shall be adjusted against the amounts determined in this exercise. The enhanced unpaid amount shall not be paid and will abide by the final decision of the reference Court. As the exercise undertaken by the reference Court is set at naught and is now to commence from scratch, it is in the interest of the respondents/claimants as well as the Company that the matter be given a quietus expeditiously. The reference Court shall accordingly give priority to these matters and dispose of the same in accordance with the observations made supra within six (6) months from the date of receipt of a copy of this order. The Appeals are accordingly allowed but in the circumstances of the case, without any order as to costs. _______________________ GODA RAGHURAM, J. ____________________ SANJAY KUMAR, J. _________ DECEMBER, 2010. VGSR [1] (1995) 2 SCC 326 [2] (2004) 12 SCC 96