kbp 1 wp1211-09.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.1211 OF 2009 Percival Joseph Pareira ..Petitioner Vs. 1 The Special Land Acquisition Officer 2 The State of Maharashtra 3 City & Industrial Development Corporation ..Respondents Mr.S.S.Kulkarni, for petitioner. Mr.A.P.Vanarase, AGP for respondents no.1 and 2. Mr.A.A.Kumbhakoni, i/b Mr.A.M.Kulkarni,for respondent No.3. CORAM : ABHAY S.OKA, J. DATE : 7th November, 2009. JUDGMENT : 1] The submissions of the learned counsel for the parties were heard on 7 th October, 2009. The judgment was reserved. Accordingly, the petition is today placed for judgment. 2] This Writ Petition under Article 227 of the Constitution of India arises out of the proceedings of a reference under Section 18 of the Land Acquisition Act, 1894 (hereinafter referred to as “the kbp 2 wp1211-09.sxw said Act of 1894”). The petitioner is the claimant in the said reference. By the impugned order, the third respondent (The City Industrial Development Corporation of Maharashtra Limited hereinafter referred to as “CIDCO”) has been directed to be added as an opponent to the land acquisition reference under section 18 of the said Act of 1894. 3] A reference will have to be made to the facts of the case. The notification under Section 4 of the said Act of 1894 in respect of the acquired land was issued on 24 th September, 1986. The declaration under section 6 of the said Act of 1894 was issued on 17 th September, 1987. After the award dated 18 th September 1989 was made, an application under Section 18 of the said Act of 1894 was filed by the petitioner on the basis of which a reference under section 18 of the said act of 1894 has been made to the Court. It must be noted here that the third respondent (CIDCO) made an application at Exhibit 38 on 7 th April, 2004 contending that the said respondent was the beneficiary of the acquisition and on the basis of an agreement made by the said respondent with the government of Maharashtra ,compensation will be payable by the said respondent. Reliance was placed on sub-section 2 of section 50 of the said Act of 1894 and it was contended that the CIDCO kbp 3 wp1211-09.sxw was a necessary party to the land acquisition reference under Section 18 of the said Act of 1894. By the judgment and order dated 27 th October, 2004 the said application was rejected. 4] On 7 th April, 2008, the State of Maharashtra represented by the District Government Pleader moved an application exhibit 113 contending that the CIDCO being acquiring body was a necessary party to the said reference under Section 18 of the said Act of 1894. It was contended that the State has acquired the land subject matter of reference and has transferred the land to CIDCO. Therefore, a prayer was made for impleading the CIDCO as the second opponent to the said reference. The petitioner opposed the same on various grounds contending that the CIDCO was not the acquiring body. It was contended that CIDCO was neither a necessary nor a proper party. By the impugned order, the said application made by the State of Maharashtra was allowed and the petitioner was directed to implead the CIDCO as a party opponent to the said reference. 5] The learned counsel for the petitioner has made detailed submissions on this aspect. Submissions are made on the basis of various provisions of the Maharashtra Regional Town Planning Act, 1966 (hereinafter referred to as “the said Act of 1966”). It is kbp 4 wp1211-09.sxw submitted that under the provisions of the said Act of 1966 the CIDCO being a New Town Development Authority, there is no power vesting in CIDCO under Section 113-A to acquire a land for the purpose of setting up a new town. The submission is that CIDCO was merely an agency of the State of Maharashtra for implementing the project of setting up the new township of New Bombay. He submitted that the decision to acquire the lands has not been taken by CIDCO but it is the decision of the State of Maharashtra. It is submitted that sub-section 2 of Section 50 of the said Act of 1894 has no application. He has placed reliance on various notifications. He has also placed reliance on the amendment made to the said Act of 1966 in the year 1971. 6] Learned counsel for the third respondent CIDCO submitted that the CIDCO was established and appointed as a Special Planning Authority in relation to New Bombay. He submitted that the CIDCO is a government company and the same is established under section 113 (A) of the said Act of 1966. He pointed out that earlier the entire burden of paying the compensation on account of acquisition of lands for the project of the twin city of the New Bombay was of the State of Maharashtra. He placed reliance on a Government Resolution dated 12 th February, 2008 and submitted kbp 5 wp1211-09.sxw that the entire responsibility for payment of enhanced compensation of the lands acquired for the project is that of CIDCO. He submitted that the issue involved in the present petition is not whether the CIDCO is the acquiring body or local authority or whether the CIDCO acts as an agent of the State Government. But, the issue is whether the CIDCO was a “person interested” and whether CIDCO is going to ultimately end up in bearing the entire financial burden of paying whole amount of compensation. He submitted that the CIDCO is required to pay the compensation amount to the claimants. He submitted that the term “company” appearing in section 3 of the said Act of 1894 excludes a government company, but the “company” referred to in Section 50 is different and the same words used will have to be construed differently. He has relied upon decisions of the Apex Court which are dealt with in the later part of this judgment. He submitted that the CIDCO, in any event, is a person interested, and therefore, is entitled to a notice of reference under section 18 of the said Act of 1894 in view of clause “b” of Section 20 of said Act of 1984. He submitted that the words "local authority" and "company" in the said Act of 1894 would include all bodies on whose behalf the land is acquired. He submitted that all such kbp 6 wp1211-09.sxw bodies are necessary and proper parties to a reference under section 18. He submitted that no interference is called for with the impugned order. 7] The learned AGP appearing for the State supported the impugned judgment and order and submitted that as the CIDCO is required to bear the burden of payment of the compensation as well as the enhanced compensation, as rightly held by the trial court , the CIDCO was a necessary and proper party to the reference and therefore no interference is called for. The learned counsel for the petitioner pointed out from the Government Resolution dated 12 th February, 2008 relied upon by CIDCO that even under the said Government Resolution , the CIDCO is required to pay the compensation amount on behalf of the Government of Maharashtra. He pointed out that the said resolution further provides that at the time of final settlement of the account , an adjustment would be made to give the credit to the CIDCO of the amount paid by way of compensation to the claimants. 8] I have given careful consideration to the submissions. Before dealing with the submissions, it will be necessary to consider the relevant provisions of Act of 1966. Under Sub-section kbp 7 wp1211-09.sxw (1) of Section 113, the State Government is empowered to issue a notification in the official gazette designating any area as a site for the proposed New Town which shall be named in the notification. Under sub-section (2), after publication of the notification under sub-section (1), for the purpose of acquiring, developing and disposing of land in the area of a New Town, the State Government is empowered to constitute a New Town Development Authority. Sub-section 3(A) of the Section 113 reads thus:- “(3A) Having regard to the complexity and magnitude of the work involved in developing any area as a site for the new town, the time required for setting up new machinery for undertaking and completing such work of development, and the comparative speed with which such work can be undertaken and completed in the public interest, if the work is done through the agency of a corporation including a company owned or controlled by the State or a subsidiary company thereof, set up with the object of developing an area as a new kbp 8 wp1211-09.sxw town, the State Government may, notwithstanding anything contained in sub- section (2), require the work of developing and disposing of land in the area of a new town to be done by any such-corporation, company or subsidiary company aforesaid, as an agent of the State Government; and thereupon, such corporation or company shall, in relation to such area, be declared by the State Government, by notification in the Official Gazette, to be the New Town Development Authority for that area]”. It must be stated here that aforesaid sub-section 3(A) as well as Section 113 A were brought on the statute book by way of an amendment made by the Maharashtra Act No.21 of 1971. Section 113(A) of the said Act read thus:- “113A.Notwithstanding anything contained in this Act, or in any law for the time being in force, where any corporation or company is declared to be the New Town Development Authority under sub-section (3A) of section 113, the State kbp 9 wp1211-09.sxw Government shall acquire either by agreement or under the Land Acquisition Act, 1894 (and such acquisition may have been commenced before the coming into force of this section) any land within the area designated under this Act, as the site of the new town, any land adjacent to that area which is required for the purposes connected with the development of the new town, and any land whether adjacent to that area or not, which is required for provisions of services or amenities for the purposes of the new town; and vest such land in such Authority for the purposes of this Chapter]” In the light of the relevant provisions of the said Act of 1966 , the factual aspects of the case will have to be considered. On 20 th March, 1971, a notification was issued by the State Government which was published in the gazette by which the area mentioned in the schedule was designated as the site for the proposed new town known as “New Bombay”. The said notification was issued in exercise of powers under sub-section (1) of Section 113 of the said kbp 10 wp1211-09.sxw Act of 1966. On the same day, another notification was issued by the State Government which was published in the same gazette. The said notification was issued in exercise of powers conferred by the sub-section 3A of the Section 113 of the said Act of 1966 by which the CIDCO was appointed as the New Town Development Authority for the area comprised in the site of New Bombay. The said notification records that the CIDCO was a subsidiary company of the State Government which was owned and controlled by the State Government. Thus, the appointment of the CIDCO is under sub-section 3A of Section 113, and therefore, the CIDCO as a New Town Development Authority was required to do the work of developing and disposing of land in the area of new town of New Bombay as an agent of the State Government. 9] At this juncture, it will be worth making a reference to a notification dated 24 th September, 1986 under section 4 of the said Act of 1894 by which the land subject matter of the reference in the present case has been notified for acquisition. There is a recital in the notification that under the provisions of Section 113A of the said Act of 1966 read with Section 4 of said Act of 1894, the land described in the schedule under the said notification was likely to be needed for the development of the area designated as kbp 11 wp1211-09.sxw the site of the New Town of New Bombay. The notification under Section 6 of the said Act of 1894 issued on 10 th September, 1987 is also placed on record. The notification specifically records the satisfaction of the Commissioner of the Konkan Division that it was necessary to acquire the land described in the schedule to the notification under section 4 referred to earlier . The notification states that the same was issued under the provisions of the section 6 of the said Act of 1894 read with section 113-A of the said Act of 1966. The material recital in the said notification read thus:- “ And whereas, the Commissioner Konkan Division, is now satisfied that the said lands are needed to be acquired at the expenses of State Government for the said public purpose;” The aforesaid recital makes it very clear that the land was decided to be acquired “at the expenses of the State Government” for public purpose. This factual aspect has some bearing on the decision of this petition. 10] The learned counsel for the CIDCO has relied upon the decision of the State Government which is reflected from the kbp 12 wp1211-09.sxw circular dated 12 th February, 2008 which is placed on record by the learned counsel for the CIDCO. In the preamble, it refers to the aforesaid notification dated 20 th March, 1971. It also notes that the CIDCO has been appointed by the State Government as the New Town Development Authority for New Bombay. The said government resolution notes that the CIDCO was newly formed in the year 1971 and at the time funds were not available with the CIDCO. It is further stated that as the funds were not available with CIDCO, it was decided that the State Government will acquire privately owned lands in the site of New Bombay and will thereafter transfer the same to the CIDCO. The said government resolution further notes that the State Government has acquired various lands under the provisions of the said Act of 1894 and has transferred the same to the CIDCO. The said lands are being developed and sold through the CIDCO .It is further noted that considering the present financial condition of the State Government , hereafter it will not be possible for the State Government to make available funds for payment of compensation/enhanced compensation in respect of land acquired for the project of the New Bombay. The said government resolution refers to earlier decision of the Government dated 2nd kbp 13 wp1211-09.sxw January 1985 by which the State Government decided to acquire private land for the project of New Bombay and thereafter to transfer the same to CIDCO. It is further noted that the said earlier decision has been modified and with effect from the 1 st April 2008 , the CIDCO will have to pay the compensation amount on account of the acquisition of land for the New Bombay project and even the enhanced compensation amount granted by the Court will have to be paid by the CIDCO . It records that with effect from 1 st April, 2008 the amount of compensation paid by the CIDCO will be “on account of the Government”. It further records that when an account of the amounts paid by the State Government towards compensation and enhanced compensation as well as the amounts paid by the CIDCO in that behalf will be made, the amounts paid by the CIDCO will be taken into consideration. Further part of the government decision records that for the acquisition of the land for the purpose of New Bombay project , the Town Development Department of the State of Maharashtra is the acquiring body. However, by a letter dated 20 th March, 2006 issued by the State Government , the Managing Director, Joint Managing Director, Chief Land Survey Officer of the CIDCO have been authorized to submit the proposals for acquisition on behalf kbp 14 wp1211-09.sxw of the Government. Therefore, the government resolution directs that the CIDCO should actively participate in the Court proceedings relating to the payment of compensation in respect of the land acquired for the New Bombay project. Under the said decision, a direction was issued to the CIDCO that in the proceeding of a reference under section 18 of the said Act 1894 , the CIDCO shall oppose the claim for enhancement by pointing out that apart from compensation , allotment of developed plots is being made to the affected persons. 11] From consideration of the aforesaid documents the following factual position emerges: a) For setting up of the new town of New Bombay, in exercise of powers under sub-section 3(A) of section 113 of the said Act of 1966 under notification dated 20 th March 1971, the CIDCO was appointed as the New Town Development Authority. Thus, the State Government decided to get the work of development of the site of the city of New Bombay done through CIDCO as an agent of the State Government. b) The acquiring body for the acquisition of land for New Bombay project was the Town Development kbp 15 wp1211-09.sxw Department of the State Government and with effect from 20 th March, 2006 certain Officers of the CIDCO have been empowered to submit the proposals for the acquisition of land on behalf of the State Government. c) Till 1st April, 2008 not only that the CIDCO was not the acquiring body, but, even the compensation on account of acquisition of lands for the said project was paid by the State Government and not by the CIDCO. d) The effect of the decision dated 12 th February, 2008 is that from 1 st April, 2008 the CIDCO will have to pay the compensation amount “on account of Government”. However , the Town Development department of the State Government continues to be the acquiring body. e) As far as the present acquisition is concerned, the notification under section 6 of the said Act 1894 makes it clear that the land was acquired under Section 113A at the instance of the State Government and at the expenses of State Government. kbp 16 wp1211-09.sxw 12] Where any company or Corporation is declared to be the New Town Development Authority under sub- section (3A) of section 113 the said At Of 1966, as per section 113A , the State Government is required to acquire, either by an Agreement or under the said Act of 1894 , any land within the area designated as the site of the new town. The section 113A requires the State Government to vest the acquired lands in such New Town Development Authority for the purposes of the development of the New Town. Thus, even if a New Town Development Authority is appointed under sub-section (3A) of Section 113 , the acquisition of the lands for the purpose of setting up the New Town the has to be by the State Government. The reason is that under sub-section (3A) of section 113 , the New Town Development Authority acts as an agent of the State Government. In the present case , the CIDCO has been admittedly appointed under sub- section (3A) of section 113 of the said Act of 1966. Therefore, as reflected from the notifications under sections 4 and 6 of the said Act of 1894, the acquisition of the land is under section 113A of the said Act of 1966 at the instance of the state government. The notification under section 6 makes kbp 17 wp1211-09.sxw it very clear that the acquisition is at the cost of the State Government. The acquisition has been made and completed prior to first April 2008 and therefore, going by the government resolution dated 12 th of February 2008, the compensation and enhanced compensation is payable by the state government. 12A] A reliance has been placed by the learned counsel for the CIDCO on the decision of the Constitution Bench of the Apex Court in the case of U.P.Awas Evan Vikas Parishad Vs. Gyandevi [1995(2)SCC 326]. The question before the Apex Court was re- garding the interpretation of Section 50 of the Act of 1894. The conclusions of the decision of the Apex Court are summed up in paragraph 24 of the decision. The relevant conclusions read thus :- “24. To sum up, our conclusions are : 1. Section 50(2) of the L.A. Act confers on a local authority for whom land is being acquired a right to appear in the acquisition proceedings before the Collector and the reference court and ad- duce evidence for the purpose of determining the amount of com- pensation. kbp 18 wp1211-09.sxw 2. The said right carries with it the right to be given adequate no- tice by the Collector as well as the reference court before whom ac- quisition proceedings are pending on the date on which the matter of determination of compensation will be taken up.” (emphasis added) There are subsequent decisions of the Apex Court which consider the said decision in the case of U.P. Awas (Supra). In the case of Agra Development Authority Vs. Special Land Acquisition Officer and others [(2001)2 SCC 646] the Apex Court considered the same question. In paragraph 7, the Apex Court held thus:- “. .......What is required by Section 50 of the Land Ac- quisition Act is that the body for whom the property is being acquired is given an opportunity to appear and ad- duce evidence for the purposes of determining the amount of compensation. Nothing could be shown to us that this had been done. On this point the matter requires to be sent back to the Special Land Acquisition Officer for refixing compensation payable. “ (emphasis added) kbp 19 wp1211-09.sxw 13] Learned counsel for the second respondent CIDCO invited my attention to the decision of the Apex Court in the case of NTPC Ltd. Vs. State of Bihar and others [(2004)12 SCC 96]. In paragraph 6 of the judgment, the Apex Court reiterated that the body on whose behalf the land has been acquired is not just a necessary party, but, is the proper party before the reference court. In the decision relied upon by the learned counsel for the CIDCO in the case Regional Medical Research Centre, Tribal Vs.Gokaran and others [(2004) (13)SCC 125], The Apex Court reiterated the settled law on the point. The Apex Court observed that “The definitions of “local authority” and “company” in the Land Acquisition Act are inclusive definitions. They include all bodies on whose behalf land is acquired.” Therefore, to that extent the learned counsel for CIDCO is right when he made a submission that the aforesaid definitions are sufficiently wide to include all bodies on whose behalf the land is required. 14] Thus, in short, the Apex Court has laid down that the body on whose behalf the land was acquired is either a necessary or a kbp 20 wp1211-09.sxw proper party to the reference under section 18 of the said Act of 1884. On facts, as already held earlier, the acquisition in the present case is in exercise of the powers under Section 113A by the State Government. The notification under Section 6 of the Act of 1984 makes it very clear that the acquisition is on behalf of the State Government at the cost of the State Government. Moreover, in view of the notification dated 24 th March, 1971 the CIDCO being the New Town Development Authority appointed under Section 3A of Section 113 is doing the work of developing and disposing of the land in the area as an agent of the State Government. Therefore, the acquisition cannot be said to