1 71fa1578-11 rpa IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURSIDICTION FIRST APPEAL NO.1578 OF 2011 The Chief Executive Officer Sawantwadi Municipal Council .. Appellant V/s. The State of Maharashtra & Ors. .. Respondents ..... Mr. S. M. Railkar for the appellant. Mr. A. R. Patil, AGP for respondent Nos.1 and 2. Mr. A. S. Khandeparkar i/b. Mr. Mhandeparkar & Associates for the respondent No.3. ..... CORAM : A.S.OKA, J. DATE : DECEMBER 2, 2011. ORAL JUDGMENT : On 11th October, 2011, this Court has passed an order that the Appeal shall be heard finally at the stage of admission. The submissions were finally heard on 20th October, 2011. However, the Judgment was reserved. The appellant has taken an exception to the Judgment and Award dated 13th August, 2009 passed by the learned Civil Judge Senior Division, Sindhudurg at Oros in a Reference under Section 18 of the Land Acquisition Act, 1894 (hereinafter referred to as “the said Act”). The acquisition relates to the land bearing survey No. 72A, Hissa No.1, admeasuring 0-02-17 situated at Sawantwadi, 2 71fa1578-11 Taluka Sawantwadi, District Sindhudurg. The notification under Section 4(1) of the said Act dated 22nd June, 1998 was published in the Government Gazette on 24th September, 1998. The notification under Section 6 of the said Act was issued on 2nd January, 1999. The corrigendum dated 17th October, 2000 was issued to the said notification which was published in the Government Gazette on 23rd November, 2000. An Award under Section 11 of the said Act was made by the Special Land Acquisition Officer holding that area of the acquired land was 1400 square metres. Market value at the rate of Rs.395/- per square meter was determined under the said Award. 2. By the impugned Judgment and Award, the Reference Court fixed the market value of Rs.1,00,000/- per Guntha in respect of the land. Apart from the said market value of the land, a sum of Rs.2,00,000/- was ordered to be paid towards damages in respect of the ground floor of the house. Certain amounts were ordered to be paid on account of Mango trees and other trees. Statutory benefits were granted on the market value. 3. The main submission of the learned counsel appearing for the appellant is that the acquisition was at the instance of the appellant Municipal Council which is a local authority. 3 71fa1578-11 He submitted that appellant being a local authority had a right to participate in the proceeding of Reference under Section 18 of the said Act. He submitted that as the Reference Court has failed to issue notice of the reference to the appellant, the impugned Judgment and Award is completely vitiated in as much as the appellant was deprived of an opportunity to adduce evidence. He, therefore, submitted that by setting aside the impugned Award, the reference Court be directed to issue notice of the reference to the appellant and to decide the Reference a fresh. The learned AGP appearing for the State Government supported the appellant. The learned counsel appearing for the original claimant (third respondent) has opposed the prayer for remand. The learned counsel appearing for the third respondent submitted that there is enough evidence on record to show that the appellant was aware about the pendency of the Reference before the District Court. He relied upon the report of Shri Venkatesh Deshpande, the valuer. He submitted that the report shows that the appellant Municipal Council was aware of the pendency of the Reference. He, therefore, submitted that the Appeal at the instance of the appellant cannot be entertained. In the alternative, he submitted that by keeping the Appeal pending, the parties may be directed to appear before the trial Court for the purposes of 4 71fa1578-11 adducing evidence and the finding of the trial Court may be called for. 4. I have given carefully consideration to the submissions. At this stage, it must be noted that there appears to be hardly any dispute that acquisition of the land was at the instance of the appellate Municipal Council. The Award under Section 11 of the said Act clearly records that proposal for acquisition was submitted by the appellant and on the basis of the said proposal, the proceedings for acquisition were initiated. In the Award there is a reference to correspondence made by the Chief Officer of the appellant which shows that the appellate was heard on the question of determination of compensation. In fact the acquisition is made for the purposes of road widening. 5. Therefore, it cannot be disputed that the appellant is the local authority at whose instance the acquisition has been made. The law on the aspect is well settled. A right is conferred on the local authority under Sub-Section 2 of Section 50 of the said Act to be given an adequate notice by the Collector as well as the Reference Court about the pendency of the proceedings regarding determination of the market value. In the case of U.P. Avas Avam Vikas Parishad V/s. Gyandevi (deceased by LR's) and others [1995 (2) SCC 326], the Apex 5 71fa1578-11 Court has held that a failure to give such notice would result in denial of the said right unless it is established that the local authority had knowledge about the pendency of the proceeding before the Reference Court and that the local authority has not suffered any prejudice on account of failure to give such notice. The knowledge of an officer of the appellant Municipal Council of the visit of the Architect appointed by the third respondent to the acquired land cannot be treated as a notice to the appellant of the pendency of proceedings. In the present case, there is no direct evidence on record to show that the concerned authority i.e. the Chief Officer of the appellant had notice about the pendency of the Reference. The Apex Court has held that the failure to serve notice will not result into illegality only if it is shown that the local authority had knowledge of the pendency of the Reference and that the local authority has not suffered any prejudice on account of the failure to serve notice. In the present case, substantial enhancement has been granted in the market value. Hence, prejudice has been caused to the appellant as the appellant could not adduce evidence on the market value. The amount of enhancement granted by the reference Court will have to be paid by the appellant. Therefore, one of the two conditions is not satisfied and, hence, this is a case where the failure to serve notice of the Reference 6 71fa1578-11 has resulted into deprivation of the right of the local authority. 6. Now the other issue is whether an order of remand will have to be passed or whether the parties can be permitted to adduce evidence before the trial Court and a finding of the trial Court can be called for. 7. The option of allowing the parties to appear before the trial Court and to lead evidence by keeping the Appeal pending is available only under Rules 25 and 28 of Order XLI of the Code of Civil Procedure, 1908. Rule 28 will apply when by exercising powers under Rule 27 of Order XLI of the said Code, the Appellate Court permits additional evidence to be produced by one of the parties to the Appeal. Hence, Rule 28 will have no application. As far as Rule 25 of Order XLI is concerned, where the trial Court has ommitted to frame any issue or to determine any question of fact, the Appellate Court is empowered to frame issues and refer the same to the trial Court with liberty to the parties to adduce evidence before the trial Court. In such a case, trial Court is required to record the findings on issues and the said findings are tested by the Appellate Court. 8. However, in the present case, the appellant was entitled to a notice of Reference. Obviously, the appellant was entitled 7 71fa1578-11 to file necessary pleadings dealing with the claim for enhancement. The appellant will be entitled to cross-examine the witnesses examined by the third respondent and also to lead evidence. As the appellant was not before the Reference Court, even the third respondent-claimant will be entitled to lead further evidence, if any, in the light of the stand which may taken by the appellant. Therefore, the option of keeping the Appeal pending and inviting a finding of the trial Court cannot be adopted. 9. Hence, I pass the following order: :: O R D E R :: i. The impugned Judgment and Award dated 13th August, 2009 is quashed and set aside and the Land Acquisition Reference No.66 of 2003 is restored to the file of the learned Civil Judge Senior Division,Sindhudurg at Oros. ii. The parties are directed to appear before the learned Trial Judge on 23rd January, 2012 for fixing the scheduled of hearing. It is made clear that as the appellant is represented before this Court, it will not be necessary for the Trial Court to issue 8 71fa1578-11 notice of reference to the appellant. iii. The appellant shall file reply/written statement to the Reference Application within a period of six weeks from the date of appearance. iv. The Reference Court shall give an opportunity to the third respondent of adducing further evidence. The Reference Court shall also give an opportunity to the appellant to adduce evidence. The third respondent shall be entitled to recall the witnesses examined by him for further examination. The appellant shall be entitled to recall of the witnesses examined by the third respondent for cross-examination. v. After considering the evidence which is already on record and the evidence which will be adduced after remand, the Reference shall be decided afresh. vii. The Reference shall be decided expeditiously and preferably on or before 30th September, 2012. viii. Record and proceedings as well as writ be forthwith transmitted to the trial Court with a 9 71fa1578-11 special messenger. ix. Civil Application No.1373 of 2011 is hereby disposed of. (A.S.OKA, J.)