IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWELVETH DAY OF MARCH, TWO THOUSAND EIGHT ONLY PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.26964 of 2003 Between: Kamma Nagaiagh and others. … Petitioners AND The Government of A.P., rep., by its Secretary, Irrigation and CAD Dept., Secretariat, Hyderabad & others. … Respondents Counsel for the petitioners : Sri R. Kameswara Rao Counsel for the respondents: AGP for Land Acquisition This Court made the following: THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.26964 of 2003 ORDER:- This writ petition is filed for a writ of mandamus to declare award No.RC.No.A/1392/94 dated 26.04.2003 passed vide G.O.Ms.No.1307, Revenue (Assignment-I) Department, dated 23.12.1993 by the Special Deputy Collector (L.A.) I.P.T. Railways, Khammam, as illegal and arbitrary. The petitioners also sought for a direction to the respondents to pass award under the provisions of the Land Acquisition Act, 1894 (for short, ‘the Act’) in respect of their lands acquired under notification dated 25.11.1991 issued under Section 4 of the Act. The facts, which are undisputed, are as under: The petitioners are the assignees of certain extents of land, which have been acquired by the respondents as they were subjected to submergence under Domalavagu Project of Tekulacheruvu Village and Mandal. Notification under Section 4(1) and declaration under Section 6 of the Act were published in the Gazette on 25.11.1991 and 24.02.1992 respectively. As only 80% of the market value was paid to the petitioners, though possession was taken as far back as the year 1977, one of the petitioners, namely, petitioner No.14 filed WP.No.22189 of 1995 in this Court. The said writ petition was disposed of by this Court along with WP.No.5383 of 1995 by order dated 19.06.2002 directing the respondents to pass appropriate award and finalize the acquisition proceedings. After the said petitioner filed CC.No.46 of 2003, respondent No.3 passed award dated 26.04.2003. In his award respondent No.3 observed that verification of the records found that the then Special Deputy Collector/LAO paid 80% of the market value to the assignees on par with the owners of patta lands and that under G.O.Ms.No.1307 dated 23.12.1993, the assignees are eligible only to the land value and the solatium. On that premise, respondent No.3 ordered for payment of compensation for assigned lands in accordance with G.O.Ms.No.1307 dated 23.12.1993. This award is assailed in this writ petition. Respondent No.3 filed a counter-affidavit in which all the abovementioned facts are admitted. It is stated in the counter- affidavit that out of the submerged land, Ac.83.14 guntas relate to patta lands and Ac.27.35½ guntas belong to the Government and are covered by assignments, that proposals were submitted to the Collector vide letter dated 20.06.1991 to delete the said Government land and declaration proposals were submitted only to the extent of Ac.83.14 guntas, that the Collector in turn submitted proposals to the State Government on 17.07.1991 and that the State Government issued G.O.Ms.No.3428 dated 29.07.1991 permitting submission of revised proposals and accordingly respondent No.3 submitted the revised draft notification and declaration proposals to the Collector on 24.09.1991 and the District Collector in turn forwarded the said proposals to the Government on 06.10.1991. It is further stated that the State Government approved the draft declaration on 01.02.1992 and accordingly an extent of Ac.83.14 guntas were declared as having been acquired. It is further stated that as per the report dated 24.01.1992 of Mandal Revenue Officer, Burgampadu, out of the said extent of Ac.83.14 guntas only an extent of Ac.26.33 guntas are patta lands and consequently it was found that while making payment of compensation, the amount in excess of the eligibility in respect of the assignees of the Government land was paid and the said excess amount is liable to be recovered. Heard Sri R. Kameswara Rao, learned counsel for the petitioners and the learned Assistant Government Pleader for Land Acquisition. After hearing the submissions of the learned counsel for the petitioners and the learned Assistant Government Pleader, the only issue that arises for consideration in this writ petition is whether the petitioners, who are assignees of Government land, are entitled to the payment of compensation in accordance with the provisions of the Act or as per G.O.Ms.No.1307 dated 23.12.1993? On this issue there was divergence of judicial opinion. The issue was referred to a three Judge Bench in State of A.P. v. P. Peda Chinnayya[1] and the Full Bench in its judgment held that where the Government acquires the assigned lands by resorting to the provisions of the Act, the assignees are entitled to the payment of compensation in accordance with the provisions of the Act. If the lands are resumed in terms of the conditions of assignment, the assignees are entitled to claim compensation equal to the market value, but without solatium and interest on the amount of compensation from the date of dispossession till the date of payment of compensation. In cases where the assignees are dispossessed from their lands without either resuming in terms of the assignment or initiation of proceedings under the Act, the Government may be directed to initiate proceedings under the Act and to pay compensation in accordance therewith. In State of Andhra Pradesh v. Bondapalli Sanyasi and others[2] the learned Single Judge, before whom one of the civil appeals came up, referred the matter to a Division Bench, finding that in a connected case, the Division Bench disposed of the appeal without noticing the judgment in Peda Chinnayya (1 supra). The Division Bench then referred the matter to the Full Bench, which in turn referred the case to the five Judge Bench. In the five Judge Bench, Bilal Nazki, J, speaking for the majority, framed the following question: “Now the only question before this Court is, whether persons who are dispossessed from assigned lands are entitled to compensation on market rates, or, are they at all entitled to any compensation or not and if they are entitled, are they entitled to the market rates of the land on the date of requisition of the land. There were certain contradictory judgments on this issue and the matter was placed earlier before a Full Bench and the Full Bench decided the issue by a judgment in Peda Chinnayya (1 supra).” In para 8 it is held as under: “The Full Bench in State of A.P. v. P. Peda Chinnayya (1 supra) laid down the law correctly when it stated that where the Government resorts to the provisions of the Land Acquisition Act for acquisition of the patta lands without resorting to the terms of the grant for resumption it is liable to pay compensation under the Act and such compensation would be only the value of the interest of the owner or assignee of the land subject to clog, but, it was not correct inlaying down that in case where the patta lands were resumed by the Government the assignees can also claim compensation equal to the market value of their interest in the lands subject to the clog. It futher stated that in such cases no solatium may be payable but interest may be claimed on the amount of compensation from the date of dispossession till the date of payment of compensation. So, in a way in both the case the compensation would be almost the same, however, in view of the latest judgment of Supreme Court i.e., Union of India v. A. Ajit Singh (AIR 1997 SC 2669) it is equally settled law that if the Government is the owner of the land before initiating the acquisition it is entitled to terminate the lease and take possession of the land in terms of the lease and necessarily in the above case tenant cannot have any right to compensation as he is bound by the terms of the lease. Therefore, in our view the Full Bench did not lay down the law correctly in cases where the land assigned is taken possession of by the Government in terms of the assignment/patta. So, we summarise our conclusions in answer to the reference as follows: Where the assigned land is taken possession of by the State in accordance with the terms of the grant or patta that right of the assignee to any compensation will have to be determined in accordance with the conditions in patta itself and where the State does not resort to the covenant of the grant and resorts to the Land Acquisition Act the assignee shall be entitled to compensation in terms of the Land Acquisition Act not as an owner but as an interested person for the interest he held in the property.” (Emphasis added) The law laid down by the five Judge Bench in Bondapalli Sanyasi (2 supra) was reconsidered by a seven Judge Bench of this Court in LAO-cum-Revenue Divisional Officer, Chevella Division, Domalaguda, Hyderabad and others v. Mekala Pandu and others[3]. B. Sudershan Reddy, J, as he the then was speaking for the Bench held that ‘no compensation’ clause, restricting the right of the assignees to claim full compensation in respect of the land resumed equivalent to the market value of the land, is unconstitutional and the same infringes the fundamental rights guaranteed by Articles 14 and 31-A of the Constitution. In paragraph 109, he concluded as under: “In the circumstances, we hold that the assignees of the Government lands are entitled to payment of compensation equivalent to the full market value of the land and other benefits on par with full owners of the land even in cases where the assigned lands are taken possession of by the State in accordance with the terms of grant or patta, though such resumption is for a public purpose. We further hold that even in cases where the State does not invoke the covenant of the grant or patta to resume the land for such public purpose and resorts to acquisition of the land under the provisions of the Land Acquisition Act, 1894, the assignees shall be entitled to compensation as owners of the land and for all other consequential benefits under the provisions of the Land Acquisition Act, 1894. No condition incorporated in patta/deed of assignment shall operate as a clog putting any restriction on the right of the assignee to claim full compensation as owner of the land.” The Bench held that the view taken by this Court in Bondapalli Sanyasi (2 supra) that whenever the land is taken possession of by the State invoking the terms of the grant or patta the right of an assignee to any compensation may have to be determined in accordance with the conditions in patta itself is unsustainable. Learned Assistant Government Pleader for Land Acquisition stated that the said judgment of the Larger Bench was questioned before the Supreme Court in civil appeal Nos.670 to 678 of 2005 and the Supreme Court passed order dated 24.01.2005 staying further payment of compensation. She also submitted that though the claim of the petitioners for payment of compensation in accordance with the provisions of the Act is supported by the judgments of this Court both in Bondapalli Sanyasi (2 supra) and Mekala Pandu (3 supra), in view of the pendency of the appeals in SLPs before the Supreme Court and the interim order passed by it, the petitioners are not entitled to the relief of payment of full compensation. I have carefully considered the submission of the learned Assistant Government Pleader and I am not inclined to accept the same. As noted above, even the five Judge Bench in Bondapalli Sanyasi (2 supra) while holding that the assignee is not entitled to full market value as per the provisions of the Act wherever the Government resume the assigned lands in accordance with the conditions of the assignment affirmed the view of the Full Bench in P. Peda Chinnaiah to the extent where the Government resorts to the provisions of the Act for acquisition of the assigned lands without resorting to the terms of grant of resumption, the Government is liable to pay compensation under the Act. The Larger Bench of seven Judges went a step further and held that even if the land was resumed in terms of the conditions of assignment, there can be no restriction on payment of compensation and that the assignees in such cases are also entitled to full compensation in terms of the provisions of the Act. It is only the issue, namely, whether even in a case of resumption in terms of the terms and conditions of an assignment the assignee is entitled to compensation under the Act that appeared to be a subject matter of the SLP before the Supreme Court. Even if the judgment of the seven Judge Bench is overruled by the Supreme Court, still the petitioners will be entitled to the payment of compensation according to the Act because they fall in the first category of cases where this Court in all its judgments, namely, P. Peda Chinnaiah (1 supra), Bondapalli Sanyasi (2 supra) and Mekala Pandu (3 supra) consistently held that once the State chose to acquire the assigned land by following the provisions of the Act, the assignees are entitled to compensation on par with the owners of the patta lands. It is clear from the record and also admitted by the learned Assistant Government Pleader for Land Acquisition that the petitioners’ lands are covered by revised notification dated 11.01.1992 and declaration dated 24.02.1992 issued under Sections 4(1) and 6 of the Act respectively. Thus, the petitioner’s lands are acquired under the provisions of the Act. Therefore, applying the ratio contained in all the above judgments, the petitioners are entitled to full compensation as determined under the provisions of the Act. In this view of the matter, the writ petition is allowed and the impugned award is set aside. The respondents are directed to make a fresh award in accordance with the provisions of the Act in respect of the petitioners’ lands, within a period of two months from the date of receipt of a copy of this order. On such award being made, the petitioners shall be paid the balance of the compensation along with all other statutory benefits payable under the provisions of the Act. ____________________________ C.V.NAGARJUNA REDDY, J Date: 12.03.2008 ES [1] 1996 (2) ALD 1215 [2] 2002 (2) ALD 1 (LB) [3] 2004 (2) ALD 451 (LB)