IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:21.01.2011 CORAM: THE HON'BLE MR.JUSTICE P.JYOTHIMANI WRIT PETITION Nos.4048 & 4049 of 2003 and connected miscellaneous petitions. 1.L.Jegannath 2.J.Thulasidaran .. Petitioner in both the Wps. vs. 1.The Land Acquisition Officer & Revenue Divisional Officer Palani. 2.The Chief Engineer, PWD Pollachi Region Office at Coimbatore. 3.The Superintending Engineer PWD, Palani. 4.The Executive Engineer, PWD Nanganjiyar Reservoir Project Palani. 5.M/s.Narendra Dairy Farms (P) Ltd., by its Managing Director & Directors. 6.V.Duraisinga Lakshmana Naicker 7.Santhana Lakshmi 8.Devika 9.Rajesh 10.Pankajavalai 11.Yamini Mahalakshmi 12.Sathishkumar ..Respondents in both the Wps. Writ Petitions filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorarified Mandamus as stated therein. For petitioners : Mr.T.R.Rajagopal,Sr.Counsel for Mr.T.R.Rajaraman https://hcservices.ecourts.gov.in/hcservices/ For respondents : Mr.N.Senthilkumar,AGP for R.1 to 4 Mr.R.Thiagarajan,Sr.Counsel for Mr.R.S.Pandiyaraj for R.5toR.12 COMMON ORDER The writ petitions are directed against the award of the first respondent, the Land Acquisition Officer/Revenue Divisional Officer, Palani dated 10.2.1993 passed in Award No.8 of 1992 and Award No.7 of 1992 respectively and the subsequent judgment and decree in L.A.O.P.Nos.7 of 1996 and 6 of 1996 respectively on the file of Sub Court, Palani in respect of an extent of 63.83.5 hectares of lands of Pudachu village, Palani taluk and an extent of 102.51.0 hectares of lands in Balasamudram village, Palani taluk, insofar as they relate to the entitlement and disbursement of money in favour of respondents 5 to 12 and also for direction against the respondents 1 to 4 to determine the apportionment of compensation between the petitioners and other respondents for disbursing the amount in respect of acquisition of land in 63.83.5 hectares in Padachu village and in 102.51.0 hectares in Balasumudram village. 2. The lands of an extent of 63.83.5 hectares (160.13 acres) in survey Nos.407/1, 409, 410, 444, 445, 446, 447, 448, 450, 452/2 and 453/2 in Pudachu village, Palani taluk and the lands in extent of 102.51.0 hectares (253.41 acres) in survey Nos.581, 582, 583, 586, 588, 589, 591, 592, 593, 602, 603, 605/2, 614, 615, 616, 619, 622, 623, 624 and 625 in Balasamudram village, Palani taluk originally belonged to Sri M.Kullamma Naicker, one of the founders of M/s.Narendra Dairy Farms (P) Ltd., the 5th respondent herein. a) During his life time, the said M.Kullamma Naicker executed a Will, bequeathing many of the properties including his interest in the above mentioned properties in favour of the second petitioner, J.Thulasidaran and also in favour of one Rajendran, son of the first petitioner who were then minors. Since the said Rajendran passed away, his estate devolved on the petitioners. b) The 5th respondent company resolved to purchase immovable properties stated above along with an extent of 31.79 acres in Ayyampulli village, Palani taluk from Kullamma Naicker for a total consideration of Rs.1,75,000/-. The 5th respondent company purchased the said 445 acres in Padachu village, Balasamudram village and Ayyampulli village for the said consideration of Rs.1,75,000/- under a sale deed dated 23.12.1959. Since the company was unable to use the lands in Ayyampulli village, the 5th respondent reconveyed the lands in 31.79 acres in Ayyampulli village under a sale deed dated 30.3.1960 in favour of the said Kullamma Naicker. Out of the total consideration of Rs.1,75,000/- under the sale deed dated 23.12.1959, https://hcservices.ecourts.gov.in/hcservices/ the 5th respondent paid only Rs.10,000/- to the vendor Kullamma Naicker and the balance amount was withheld. c) It is stated that the balance sale consideration was agreed to be payable as per document dated 23.12.1959 with interest 4% p.a. Under the reconveyance effected in respect of the lands at Ayyampulli village, the value of which was arrived at Rs.16,000/-, the said amount was adjusted and there was an amount of Rs.1,52,412.71 liable to be paid by the 5th respondent to M.Kullamma Naicker and that was recorded as a secured liability of the 5th respondent towards the unpaid purchase money. The said Kullamma Naicker was put in possession of the entire lands under an arrangement by which any income from the said properties was to be received and retained by Kullamma Naicker towards interest payable by the company and the balance unpaid sale consideration. d) After the demise of Kullamma Naicker, the possession continued with the second petitioner and the said Rajendran (son of the 1st petitioner) and the same was recognized by the 5th respondent company by resolution to the effect that as legal heirs of the said Kullamma Naicker, the above said persons may enjoy the properties till the balance unpaid sale considerations are paid. There were some disputes between the legal heirs of the founder members of the 5th respondent company and ultimately there was a family settlement on 5.2.1969 and as per the said settlement, the liability of the company to the extent of Rs.1,52,412.71 shown in the balance sheet of the 5th respondent company as on 30.6.1961 was recognized towards unpaid balance purchase money to the petitioners being the heirs of Kullamma Naicker payable by the 5th respondent company and its shareholders who are respondent 6 to 12. e) The Government, in the year 1972, initiated acquisition proceedings for Palar-Porunthalaru Scheme for construction of a dam for which in the 5A Enquiry, the petitioners were given notice and the wife of the first petitioner made a representation to the Government. Pursuant to the notification issued under section 4(1) of the Land Acquisition Act, possession was taken due to urgency from the petitioners. The acquisition proceedings had not been proceeded further and nothing happened between 1972 and 1988 and after lapse of acquisition proceedings originally initiated, there were fresh proceedings initiated by the Government by issuing section 4(1) notification, in respect of which no notice was issued to the petitioners. Notification under section 4(1) was issued on 11.1.1990 by dispensing with the enquiry under section 5A of the Act by virtue of section 17 of the Act and the declaration under section 6 of the Act came to be passed on 7.6.1991 published in the Gazette on 10.6.1991. f) In spite of the fact that under the previous proceedings the petitioners were shown as persons interested, in the subsequent https://hcservices.ecourts.gov.in/hcservices/ land acquisition proceedings, the petitioners were ignored and without any notice, the proceedings under the Act were commenced behind their back and none of the representations given by the petitioners in respect of previous land acquisition proceedings was considered, in spite of the fact that the possession under the earlier acquisition proceedings was taken from the petitioners. The petitioners made representations in the award proceedings before the Land Acquisition Officer in respect of second acquisition viz., the first respondent who failed to consider the case of the petitioners and the petitioners came to know only recently that the award had been passed and the same was referred to the Civil Court under section 18 of the Land Acquisition Act in LAOP Nos.6 and 7 of 1996. g) As against the order passed in LAOPs., the respondents 1 to 4 filed an appeal before this Court and it was at that stage, the petitioner came to know about the award passed under the second acquisition proceedings. Therefore, the delay in approaching the Court is not on account of negligence or default on the part of the petitioners, but it is due to the deliberate conduct of the first respondent to favour the interested parties. A copy of the award has not been furnished to them and the petitioners have understood that the matter is now pending in appeal before this Court in A.S.Nos.132 and 133 of 2002 and the petitioners have filed applications immediately to implead them as parties. Since the award copy was not furnished to them, they were not able to file the writ petition earlier challenging the award even though the award was of the year 1993 and the copy of the award was obtained recently which has been filed along with the writ petition challenging the award. h) It is also now submitted that the impleading petitions filed by the petitioners in the first appeal against the orders passed in LAOP Nos.7 and 6 of 1996 respectively in C.M.P.Nos.648 and 659 of 2009 came to be dismissed and ultimately, the appeals filed by the Government in A.S. Nos.132 and 133 of 2002 also came to be dismissed while the cross objection filed by the 5th respondent came to be partly allowed. The review applications filed by the petitioners in Rev.Appln.Nos.140 and 141 of 2003 in respect of dismissal of the impleading petition also came to be dismissed and the SLP filed before the Hon’ble Apex Court was also dismissed. 3. In the present writ petitions filed by the petitioners questioning the award, it is their case that as per section 3(b) of the Land Acquisition Act,1894, the petitioners are the "persons interested" and as legal heirs of the vendor who was given possession against the unpaid sale consideration, they are the usufructuary mortgagees and therefore, they should have been heard when the second acquisition proceedings were initiated. The claim of the respondents 5 to 12 is under the registered sale deed dated 23.12.1959 under which the petitioners, being the unpaid vendors, got a right to retain the possession for the repayment of the amount of https://hcservices.ecourts.gov.in/hcservices/ Rs.1,52,412.71 and the possession was given to the petitioners as per the resolution of the 5th respondent company itself in lieu of interest payable for the unpaid sale consideration and they are entitled for protection under section 55 (4)(b) of the Transfer of Property Act,1882. The award is challenged also on the ground that inasmuch the notice of award has not been issued to the persons interested, the entire award becomes invalid in the eye of law. The petitioners under section 28 of the Land Acquisition Act are entitled for compensation since the possession was taken from them and as per section 19 of the Land Acquisition Act, the first respondent ought to have informed about the petitioners’ interest while making reference to the Court. 4. In the counter affidavit filed by the 4th respondent, the Executive Engineer, Public Works Department, Palani, which is in the form of an affidavit to the petition filed to vacate the interim order granted by this Court, it is stated that the Government in G.O.Ms.No.2008, Public Works Department dated 8.10.1970 sanctioned a scheme for construction of a dam across Palar Porundalar River for an extent of 1527.07 acres and the dam covers various villages viz., Periyammapatty, Pudachu and Balasamudram of Palani taluk. The construction work was started in the year 1970 and an extent of 102.51.0 hectares of dry lands in survey No.581 etc. in Balasamudram village and an extent of 63.83.5 hectares of dry lands in S.No.401/1 etc., of Pudachu village of Palani taluk which belonged to 5th respondent were also covered in the acquisition proceedings. a) The entire lands at the time of acquisition proceedings stood in the name of 5th respondent, M/s.Narendra Dairy Farms (P) Ltd. by its Managing Directors, Duraisinga Lakshmana Naicker and Sethupathy Subbanaicker. Earlier in the year 1971-72, under the Land Reforms Act, the authorized officer (Land Reforms) declared the above said lands as surplus lands and therefore, the land acquisition proceedings were withheld to obtain clearance from the Land Reforms Officer concerned. b) It was, against the declaration of lands as surplus under the Land Reforms Act, the 5th respondent approached this Court by filing W.P.Nos.119 and 120 of 1974 praying for direction to the State Government to continue the land acquisition proceedings and in the order dated 9.4.1979, this Court ordered to continue the land acquisition proceedings of the lands belonging to the 5th respondent. The Government filed W.A.Nos.677 and 678 of 1979 and in the judgment dated 17.9.1986, the writ appeals were dismissed. c) The land acquisition proceedings were initiated to acquire the lands belonging to the 5th respondent under section 17(1) of the Land Acquisition Act by invoking the urgency clause. The notification under section 4(1) was approved and published in the Gazette on 11.9.1990 and the substance of the notification was https://hcservices.ecourts.gov.in/hcservices/ published in the locality on 24.10.1990. Thereafter, the declaration under section 6 of the Act was approved and published in the Government Gazette on 10.6.1991 and direction under section 7 of the Act was published in the Gazette on 13.11.1991. d) The general notice under sections 9(1) and 10 of the Act was published on 10.10.1992 to file objections by 19.10.1992. There was no objection from any one during the award enquiry conducted on 19.10.1992. Therefore, the draft award was passed as unobjectionable and submitted to the Collector on 9.11.1992 and after getting proper approval, the award came to be passed in favour of land owners on 10.2.1993. While the petitioners admitted that Kullamma Naicker sold the entire properties to the 5th respondent under sale deed dated 23.12.1959 for a consideration of Rs.1,75,000/-, the non-payment of sale consideration is not a bar or restriction to the Government to proceed to acquire the lands in the administrative action. e) At the time of initiation of land acquisition proceedings, the title of the lands was with the 5th respondent and therefore, there was no necessity to consider the claim of the petitioners at all. Under the original acquisition proceedings, the records were perused which showed that the 5th respondent was the registered owner of the lands, however, during oral enquiry, it came to know that the petitioners were having some interest in the lands and hence, 5A Enquiry notice was issued by the then Special Tahsildar, Land Acquisition. f) In the meantime, since the Authorized Officer (Land Reforms) informed that the lands belonging to the 5th respondent attracted by the Land Ceiling Act, the original land acquisition proceedings were withheld for want of clearance under the Land Ceiling Act. It is therefore stated that the petitioners have no right over the properties. The original land acquisition proceedings against the 5th respondent company was dropped because of the land ceiling proceedings. g) Between 1972 and 1988, the petitioners did not choose to approach any forum for the purpose of enforcing their right or interest over the properties and the 5th respondent alone moved the High Court to establish its right over the lands by filing writ petitions. It is stated that the subsequent land acquisition proceedings were initiated based on the direction given by the High Court in W.P.Nos.119 and 120 of 1974 filed by the 5th respondent and the High Court found that the properties stood in the name of 5th respondent and it was, thereafter, notice under sections 9(1) and 10 of the Land Acquisition Act was published. h) The petitioners did not file any representation at any point of time. Even when the matter was referred to the Civil Court for decision regarding compensation under section 18 of the Land https://hcservices.ecourts.gov.in/hcservices/ Acquisition Act, the petitioners did not take any steps. It is stated that the petitioners were aware that the lands sold to the 5th respondent attracted by the Land Ceiling Act and the acquisition proceedings were dropped and the petitioners were not connected with the lands and the lands were sold and there was no application on the part of the respondents to serve award copies to the petitioners. Therefore, there is no reasonable justification for condoning such a huge delay in approaching this Court after the award was passed even in the year 1993. i) The High Court in the order dated 9.4.1979 held that the 5th respondent was the owner, and the land acquisition proceeding was completed as per the provisions of the Act and Rules and the award was also passed and therefore, it cannot be stated that the award is illegal. It is reiterated that the land acquisition proceedings itself were initiated as per the judgment of this Court in W.P.Nos.119 and 120 of 1994. j) While the notification under section 4(1) of the Act was issued and subsequent notice was issued under sections 9(1) and 10 of the Act as stated above, the 4th respondent has reiterated that the petitioners had never raised any objection. It is stated that after the sale by Kullamma Naicker on 23.12.1959 to the 5th respondent, the entire revenue records stand in the name of the 5th respondent without any encumbrance and the petitioners’ names have never been declared as interested persons in respect of the lands and the petitioners never filed any objection to the Tahsildar within the stipulated time. k) In respect of unpaid sale consideration, if the petitioners have any right against the 5th respondent, it is for them to proceed against the 5th respondent and it does not mean that the petitioners have any right over the lands which are the subject matter of acquisition. It is stated that the petitioners have not explained the delay of such long period and any right of the petitioners in civil court to recover damages or any money due to them towards unpaid sale consideration does not hamper the land acquisition proceedings. It is stated that inasmuch as the judgment in LAOP was confirmed in the appeals, the writ petitions are not maintainable. 5. In the counter affidavit filed by the 5th respondent also on behalf of the respondents 6 to 12, while it is admitted that there is unpaid sale consideration to the extent of Rs.1,52,412.71 in respect of properties sold by M.Kullamma Naicker in favour of the 5th respondent by registered deed dated 23.12.1959, since the said Kullamma Naicker had doubts over the realization of the amount, the said amount was converted into secured liability and shown in the balance sheet of the 5th respondent with 4% interest per annum. It is stated that in lieu of payment of 4% interest, the petitioners were https://hcservices.ecourts.gov.in/hcservices/ permitted to receive the lease amount from third parties who were lessees in possession of the lands of the 5th respondent company cultivating the lands by paying lease amount to the petitioners. a) There was a family settlement entered on 5.2.1969, recognizing the unpaid balance sale consideration as secured liability and that was shown in the balance sheet of the 5th respondent company. It is also admitted that the liability had to be discharged by the 5th respondent within three years of signing the above said family settlement with interest at 4% p.a. It is stated that except such right to get back the said liability with 4% interest, the petitioners have no right in the properties. b) It is an admitted fact that the ownership of the land was transferred to the 5th respondent. It is stated that in lieu of interest at 4% p.a. payable on the secured liability, the lands were leased out to third parties by the 5th respondent with an arrangement that the third parties should pay lease amount to the petitioners. It is stated that when once the unpaid sale consideration is reflected in the balance sheet of the 5th respondent as secured liability as on 30.6.1961, which is admitted by the petitioners, the petitioners have no right over the properties sold under the registered sale deed. Therefore, as per the land acquisition authorities, the petitioners are third parties and they are no way connected with the properties. c) It is stated that even under section 55(4)(b) of the Transfer of Property Act relied upon by the petitioners, it is only in respect of unpaid sale price, the right for payment of 4% interest lies with the petitioners and therefore, the petitioners cannot claim any ownership over the properties except the right to recover the amount. It is stated that even under section 55 of the Transfer of Property Act, the said right is subject to the family settlement entered on 5.2.1969 and even the claim as per the said provision is hopelessly barred by limitation. The statutory charge can be enforced only within a period of 12 years and the said 12 years period has already came to an end. d) It is stated that even under the original land acquisition proceedings during the year 1972, when possession was taken from the petitioners, the petitioners did not raise any objection from 1972 and for 30 years the petitioners kept quiet. After the family settlement dated 5.2.1969, the petitioners’ position got changed and they had lost the statutory charge and thereafter, their claim was only in respect of claiming interest at the rate of 4% on the unpaid sale consideration and that also got lapsed after a period of three years. e) It is stated that the properties were leased out to third parties and as per notice of the 5th respondent dated 9.6.1960, https://hcservices.ecourts.gov.in/hcservices/ Kullamma Naicker was authorized to collect the rent by way of lease and appropriate the same towards interest. It is also stated that when once the title to the properties was passed on to the 5th respondent under registered sale deed, the petitioners are not entitled to have any interest in the properties. f) It is stated that the petitioners are not parties to the award made by the first respondent and therefore, there is no legal obligation on the part of the first respondent to submit a copy of the award to them. It is also stated that the petition has been filed after a long delay and from 1993 when the award was passed, the petitioners slept over the issue and filed the writ petitions only in 2003. It is not correct to state that the petitioners were not aware of the proceedings at all and the objection by the petitioners was made on 30.11.1992. g) It is stated that the petitioners were unable to get any interim orders and the impleading petition filed by them came to be dismissed after elaborate arguments holding that the petitioners are not necessary parties in the first appeal and therefore, they have no right to file the present writ petitions. The petitioners rights are only to file a civil suit for money and in the circumstances, having failed to do so, it is not open to them to file the writ petitions. 6. Mr.T.R.Rajagopalan, learned senior counsel appearing for the petitioners would submit that the land acquisition proceedings originally initiated in 1972 had never been followed up to 1998 and even though in the original land acquisition proceedings, the petitioners were parties and notices were given, the proceedings got lapsed and there was absolutely no notice in respect of second acquisition proceedings. a) It is his submission that when the petitioners were given notice in the original acquisition proceedings, when subsequent acquisition proceedings were initiated as per orders of the High Court, in all fairness, notice should have been given to the petitioners being the persons interested in the award proceedings. By referring to the provisions of the Land Acquisition Act, particularly section 9, wherein the words, ‘person interested’ is used, it is his submission that the persons who are interested are entitled for notice and inasmuch as the notice has not been given, the entire award proceedings have to be set aside. b) It is his submission that what was dismissed in the first appeal was only a petition for impleading the petitioners in the proceedings under section 18 of the Act and that is not a bar for the petitioners to challenge the award proceedings on the basis of legal requirements having not been followed. https://hcservices.ecourts.gov.in/hcservices/ c) It is his submission that as an unpaid vendor, the petitioners’ predecessor in title, Kullamma Naicker was a mortgagee entitled to be in possession of the properties and therefore, he got legal right over the properties and even as secured creditor, the petitioners’ predecessor in title was entitled to have interest over the properties and recover the money from the properties. It is submitted that the possession was taken from the petitioners and therefore, they should be deemed to be the persons interested. He would rely upon the judgment in Raja Harish Chandra Raj Singh vs. The Deputy Land Acquisition Officer [AIR 1961 SC 1500]. d)