IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA. RFA No. 197 of 2003 Reserved on : September 10, 2008 Date of Decision : October 1, 2008 H.P. Housing Board ……Appellant. Versus: Siri Ram Karan and others …Respondents. Coram: The Hon’ble Mr.Justice Sanjay Karol, Judge. Whether approved for reporting?1 Yes For the appellant: Mr. C. N. Singh, Advocate. For respondent No.1. Mr. Bhupinder Gupta, Sr. Advocate with Mr. Praneet Gupta, Advocate For respondents 2 & 3 Mr. Vivek Thakur, Addl. A.G. SANJAY KAROL, JUDGE. The appellant, beneficiary of the acquisition proceedings, is aggrieved with the order dated 21.5.2003 passed by the Additional District Judge, Solan, H.P. in Petition No. 1-S/4 of 2000 titled as H.P. Housing Board vs. Ram Karan and others, for the reasons that its application filed under Section 28-A(3) read with Section 18(2)-A of the Land Acquisition Act, 1894 (hereinafter referred to as ‘the Act’) stands dismissed. Primarily, the question which arises for consideration before this Court is as to whether the beneficiary’s application 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 under Section 28-A(3) of the Act, in effect being restitution proceedings, is maintainable or not and as to whether the claimants who have received the amount pursuant to an Award passed under Section 28-A are entitled to retain the amount received in excess of the final determination of the market value in an appeal under Section 54 of the Act or Article 136 of the Constitution of India. For the public purpose, namely, establishment of Parwanoo township, large chunk of land was acquired by the State vide Notification dated 1.9.1976 issued under Section 4 of the Act. As per the Collector’s Award dated 9.1.1978, different rates were awarded for different classifications of land. The highest rate being Rs.14,195/- per bigha for “Kuhal” and Rs.500/- per bigha for “Ghasni Charand Gair Mumkin” category of land. The appellant a statutory body was the beneficiary of the acquisition and hereinafter is referred to as the “beneficiary”. It appears that different land owners filed different land reference petitions under Section 18 of the Act and different rates were awarded in different awards. However, for the purpose of adjudication of the matter in hand, Land Reference Petition No.18-S/4 of 1984, the District Judge, Solan, H.P. on 23.5.1991 in case titled as Prabhu Dayal and others vs. Land Acquisition Collector & others, which determined the market value of the acquired land to be Rs.24,000/- per bigha regardless of the category and classification of the land is to be considered (hereinafter the 3 same is referred to as the “Court’s Award”). Relying upon the same, the present respondents (hereinafter referred to as the ”claimants”) who had not assailed the Collector’s Award under Section 18 of the Act by filing land reference petition, filed an application dated 20.8.1991 under Section 28-A of the Act, claiming compensation on the basis of the “Court’s Award” dated 23.5.1991. The “beneficiary” filed a reply categorically stating that the “Court’s Award” had not become final inasmuch as an appeal against the same had been filed and was pending before this Court. Therefore, the application was not maintainable. Notwithstanding the said objections and without even adverting to the same, the Collector, Land Acquisition in terms of its order dated 8.3.1994 allowed the application and enhanced the awarded compensation to Rs.24,000/- to bring it at par with the claimants covered under the “Court’s Award” dated 23.5.1991. It is a matter of record that in terms of the judgment dated 4.5.1995 passed in RFA No. 424/1991 (common judgment RFA No.461/1991), this Court set-aside the “Court’s Award” dated 23.5.1991 passed by the District Judge, Solan, in Land Reference Petition No.18-S/4 of 1984 and reduced the market value of the land from Rs.24,000/- to Rs.12,000/- per bigha regardless of the category and classification of the land. The matter, however, did not rest here and finally the Apex Court in Ram Piari and another v. Land Acquisition 4 Collector, Solan and others, 1996(8) SCC 338, put the controversy to rest by holding that the land owners shall be uniformly entitled to a sum of Rs.14,195/- per bigha. The net effect of the said judgment is that all land owners, covered by the said judgment, regardless of their classification and category of land were entitled to a sum of Rs.14,195/- per bigha. It is not in dispute that the claimants’ land is covered by the very same notification with which the Apex Court was dealing in Ram Piari (supra). It is also a matter of record that without any delay the “beneficiary” filed an application under Section 28-A(3) and the said application dated 8.3.1994 was dismissed vide impugned order dated 21.5.2003 by assigning the following reasons:- “No doubt, the Supreme Court has further held that the direction may not be treated to be a precedent, but it remains a fact that in the instant case, the Land Acquisition Collector has offered a sum of Rs.24,000/- per bigha which was affirmed by the ld. District Judge, Solan on reference moved to him, but the Hon’ble High Court of H.P. reduced the same to Rs.12,000/- per bigha in other case, but it remains a fact that it is well settled law that the award made by the Collector is an offer made by him on behalf of the Government and the State is bound by the offer and even in reply filed by the State Government has accepted that the Land Acquisition Collector has rightly decided the award and therefore, State of H.P. through Collector has prayed that the petition under Section 28-A(3) read with 5 Section 18(2)-A of the Land Acquisition Act may be dismissed.” From the facts, it is evident that the claimants have been benefited by receiving the amounts in excess of what finally stands adjudicated and determined in an appeal under Section 54 by this Court and thereafter by the Apex Court. Under the Act, the Court has been defined in Section 3(d) to mean principal civil court of original jurisdiction within specified local limits to perform the functions of the court under the Act. The Civil Court is to follow the procedure prescribed in Part III of the Act and the Code of Civil Procedure in determining the compensation as envisaged under Section 23 of the Act and determine the market value of the lands acquired and award the compensation in terms of the provisions of the Act. By operation of Section 25 the amount of compensation to be awarded by the Court is not less than the amount awarded by the Collector under Section 11. Under Section 26, the Civil Court is to make the award as enjoined in sub-section (1) which becomes a decree under sub-section (2) thereof. The Act is a complete Code in itself and provides a complete mechanism for determination of the compensation and adjudication of disputes between the parties. The Award passed by the Land Acquisition Collector under Section 11 of the Act is in fact the offer made by the Collector, determining the market value of the land and compensation payable to the claimants for 6 acquisition of their land. The person aggrieved, however, is entitled to seek adjudication and enhancement thereof by filing a land reference petition under Section 18 of the Act. However, the Legislature with the laudable object to bring uniformity in determining and paying adequate compensation introduced under Section 28-A of the Act. The Apex Court in Babua Ram and others v. State of U.P. and another, 1995(2) SCC 689, after taking into account the legislative purpose and intent held that for the purpose of Section 28-A, the person aggrieved must be the one, who has suffered a legal grievance because of a decision pronounced by a Civil Court giving higher compensation for the acquired lands similar to his own while he is denied of such compensation for his land because of operation of Section 18 read with Section 31 of the Act resulting in affectation of his pecuniary interest in his acquired land directly and adversely by the Award of the Collector issued under Section 11 of the Act. It has further been held as under:- “18. The person aggrieved must, therefore, be one who has suffered a legal grievance because of a decision pronounced by civil court giving higher compensation for the acquired lands similar to his own while he is denied of such higher compensation for his land because of operation of Section 18 read with Section 31 of the Act resulting in affectation of his pecuniary interest in his acquired land directly and adversely by that award of the Collector made under Section 11. As such he becomes an aggrieved person 7 entitled to avail of the right and remedy conferred upon him under Section 28-A (1) to make good his denied right to receive compensation in excess of the amount awarded by the Collector/LAO. Acceptance of the contention of Shri G.L.Sanghi, learned senior counsel and his companions, that persons who under protest received payment of compensation for their lands but failed to avail of the right and remedy under Section 18 waiting in the wings for success of the landowners of the adjoining lands to get higher compensation under Section 28-A(1) as person aggrieved robs the poor and inarticulate who by reason of their poverty or ignorance failed to avail of the right and remedy under Section 18, and creates not only invidious discrimination between same class of persons similarly situated but would be highly unjust and arbitrary offending Article 14 of the Constitution, apart from flying in the face of express animation of the statute as espoused in its Statement of Objects and Reasons and the Financial Memorandum. In this context, we make it clear that we have looked into Statement of Objects and Reasons and the Financial Memorandum to know what is it that induced the introduction of the Bill but not as an aid to interpret Section 28-A(1). Therefore, we have no hesitation to hold that any interested person in the land acquired under the same notification published under Section 4(1) who failed to avail the right and remedy under Section 18(1) read with second proviso to Section 31(2), becomes a person aggrieved under Section 28-A(1) of the Act when the owner of the other land covered by the same notification is awarded higher 8 compensation by the civil court on a reference got made by him under Section 18.” “39. The next question is whether the Collector/LAO on receipt of the application under sub-section (1) of Section 28-A is bound to redetermine the compensation while the award and decree under Section 26 is pending consideration in the appeal in the High Court or appellate forum. If he does so, whether award under Section 28-A(2) is illegal? It is settled law that the decree of the trial court gets merged in the decree of the appellate court which alone is executable. The finality of the determination of the compensation is attained with the decree of the appellate forum, be it the High Court or this Court. Take for instance that ‘A’, ‘B’ and ‘C’ are interested persons in the land notified under Section 4(1) and the compensation determined in the award under Section 11. “A” received the compensation without protest. ‘B’ and ‘C’ received the compensation under Section 31 under protest and sought and secured reference under Section 18. The court enhanced the compensation from the Collector’s award of Rs.10,000 to Rs.20,000. ‘B’ did not file appeal under Section 54 while ‘C’ filed the appeal. The High Court, suppose, further enhances the compensation to Rs.25,000 or reduces the compensation to Rs.15,000 per acre. “A” is a person aggrieved only to the extent of the excess amount awarded either by the award and decree of the court under Section 26 but he will not get the enhancement of further sum of Rs.5000 granted by the High Court in favour of “C’. The decree of the High Court is the executable decree made in favour 9 of ‘C’. Unless redetermination is kept back till the appeal by the High Court is disposed of, incongruity would emerge. Suppose the State filed appeal in this Court under Article 136 against the High Court decree and this Court confirms the award of the Collector and sets aside the decree of civil court under Section 26 and of the High Court under Section 54. There is nothing left for redetermination. With a view to save ‘A’ or ‘B’ or the State from the consequences of such incongruous situations, the Collector/LAO should stay his hands in the matter of redetermination of compensation till the appeal is finally disposed of and he should redetermine the compensation only on the basis of the final judgment and decree of the appellate forum. Adoption of such course, would not merely avoid the chance element in the claimants getting the amounts of redetermined compensation but also avoids needless burden on public exchequer. As soon as the award of the civil court is carried in appeal, it becomes obligatory for the Collector to keep the application/ applications for redetermination of compensation filed within limitation pending, awaiting decision by the appellate forum and to redetermine the compensation on the basis of the final judgment and decree. Normally the LAO would file the appeal against the enhanced compensation in a decree of either the civil court or the High Court and will know their pendency. In the case of appeal filed by the interested persons, the latter should inform the Collector/LAO of the pendency of appeal or otherwise comes to know of it should keep the applications for redetermination, received under sub-section (1) of Section 28-A within limitation pending, awaiting the 10 decision by the appellate court. Before proceeding with the determination, he should obtain an affidavit from the party making the application under Section 28-A that no appeal against the award made under Section 26 relied upon by him was filed or if had been filed was disposed of by the appellate court and to produce the certified copy of decree and judgment, if already disposed of.” (Emphasis supplied) Babua Ram (supra) came up for consideration before the Apex Court again in Union of India and another vs. Pradeep Kumari and others, reported in (1995) 2 SCC 736. The Court held that no restrictive meaning should be given to the provisions of Section 28-A of the Act and held as under:- “10 ...The object underlying Section 28-A would be better achieved by giving the expression ‘an award’ in Section 28-A its natural meaning as meaning the award that is made by the court in Part III of the Act after the coming into force of Section 28-A. If the said expression in Section 28-A(1) is thus construed, a person would be able to seek redetermination of the amount of compensation payable to him provided the following conditions are satisfied: (i) An award has been made by the court under Part III after the coming into force of Section 28-A; (ii) By the said award the amount of compensation in excess of the amount awarded by the Collector under Section 11 has been allowed to the applicant in that reference; 11 (ii) The person moving the application under Section 28-A is interested in other land covered by the same notification under Section 4(1) to which the said award relates; (iii) The person moving the application did not make an application to the Collector under Section 18; (iv) The application is moved within three months from the date of the award on the basis of which the redetermination of amount of compensation is sought; and (v) Only one application can be moved under Section 28-A for redetermination of compensation by an applicant.” “11. Since the cause of action for moving the application for redetermination of compensation under Section 28-A arises from the award on the basis of which redetermination of compensation is sought, the principle that ‘once the limitation beings to run, it runs in its full course until its running is interdicted by an order of the court’ can have no application because the limitation for moving the application under Section 28-A will begin to run only from the date of the award on the basis of which redetermination of compensation is sought.” Even the Constitution Bench of the Apex Court in Union of India and another v. Hansoli Devi and others, reported in (2002) 7 SCC 273, did not interfere with the aforesaid findings. 12 Relying upon the decision delivered by this Court in Bhakra Beas Management Board and another vs. State of H.P. and others, 2003(2) Shim. L.C.362, Mr. Bhupender Gupta, learned Senior Counsel has vehemently argued that the application filed by the beneficiary under Section 28-A(3) of the Act was not maintainable, hence the appeal be dismissed. In Bhakra Beas Management Board (supra), this Court referred to and relied upon the following passage from the decision of the Apex Court in Babua Ram (supra) :- “No doubt Section 28-A(2) speaks of interested persons and Section 28-A(1) of persons aggrieved. As interpreted by this Court of the said expressions, the beneficiary is also an interested person to see that proper compensation is determined by the Court, gets right to hearing before award is made and to carry in appeal under Section 54 and has a right to appear before the Collector during award inquiry which right is only limited to participation in the inquiry and to adduce evidence or to file an appeal to determine just and proper compensation for the lands under acquisition. Sub-section (2) of Section 28-A equally gives right of an opportunity of hearing to an interested person in the inquiry under Section 28-A(1). The State and the beneficiary are persons interested in determination of just and proper compensation. However, acceptance of the award under sub- section (3) appeals to us to be, an acceptance by the claimant and not by the beneficiary or the State, as the Collector acts on their behalf as an 13 agent. It is true that the award under Section 11 was made with prior approval of the State Government or its authorized officer and that limitation expressly was not laid in Section 28- A(2) but the legal effect does not get altered by virtue of the above distinction or omission in Section 28-A(2). The participation in the proceedings and right to an opportunity of hearing including the right to adduce evidence by the beneficiary though in normal parlance carries with it the right to an appeal, in view of the scheme and the language of Section 11 under Section 28- A(2) does not clothe the beneficiary with a right to seek reference when he does not have such a right under Section 18. The award of the Collector under sub-section (2) of Section 28-A though as (sic at) a post-Section 11 stage, nonetheless, the award under Section 28-A(2) is award and partakes the same character as an offer and not a decision. Therefore, if the applicant accepts the award, the award becomes complete and acceptance brings the proceedings under Section 28-A(1) to a terminus and the award binds the claimant and the Collector. On non-acceptance and seeking a reference under Section 28-A(3), the award made under Section 28-A(2) is at large subject to the decision by the Court by application of Section 18 to 26 as is envisaged in Section 28-A (3) itself. Section 2-A of the local amendment made by the Haryana State Legislature adopting the Amendment made by the Legislature of Himachal Pradesh, manifests that despite the offer made by the Collector under Section 11, the State is entitled to seek reference 14 under Section 18 but sub-section (2) expressly excludes the right of reference under Section 18 to the Union when the land was acquired on behalf of the Union of India. Thereby it is clear that the right to such reference under Section 28- A(3) by the beneficiary does not arise and stands excluded. Though not apposite, but we can have a clue from Section 50 of the Act which prohibits reference at the behest of the beneficiary when the acquisition was made on behalf of a local authority or a company. It is true that there arises an anomalous situation when an award is made under Section 28-A(2) the Collector may award compensation in excess of amount given under Section 26, while the claimant was provided with remedy under 28 (3), the beneficiary or the State is left with no remedy under the Act. However, the Collector being an authority under the Act, the award of the Collector made under Section 28-A is not totally immune from jurisdiction of the High Court under Articles 226 and 227 of the Constitution, if required to be challenged by the State or the beneficiary, who have no other legal remedy in the matter.” Strictly speaking in Babua Ram (supra), this was not an issue at all and only on the basis of the aforesaid passage this Court held that the beneficiary’s application under Section 28-A was not maintainable. Be that as it may be, the fact is that after Babua Ram, the Apex Court has held that “a person aggrieved”, to fall 15 within the ambit and scope of Section 18 as well as Section 54 of the Act, would include the beneficiary on whose behalf the land is acquired. The said person would have the right of participation and adjudication of the Reference Petition. {U.P.Awas Evam Vikas Parishad vs. Gyan Devi (dead) by LRs. and others, (1995) 2 SCC 326, National Aluminum Co. Ltd. vs. Raj Kishore alias Sahu Jena and another, (1996) 3 SCC 44, Modi Spinning & Weaving Mills vs. Virendra and others, (1998) 5 SCC 718, Abdul Rasak and others vs. Kerala Water Authority and others, (2002) 3 SCC 228, Kanak (Smt.) and another vs. U.P.Avas Evam Vikas Parishad and others, (2003) 7 SCC 693 and Regional Medical Research Centre Tribals vs. Gokaran and others, (2004) 13 SCC 125.} Consequently, the person aggrieved or “any person” envisaged under Section 28-A of the Act has to necessarily include the beneficiary as the Collector has to re- determine the amount of compensation payable to the claimants. The whole object and purpose being that the beneficiary may have a right in determination of the market value as ultimately it is he who has to pay the money. In fact the issue is no longer res integra as subsequent to the decision of Bhakra Beas Management Board (supra), this Court in H. P. Housing & Urban Development Authority vs. Smt. Shakuntla Devi and others, RFA No.163 of 1999, decided on 1.9.2008, has specifically dealt with the issue and held as under:- 16 “…Since the order dated 29.12.1997 passed by learned Collector is illegal and erroneous and beyond the jurisdiction of Land Acquisition Collector; the persons claiming compensation including the respondents No.1 and 2 as well as the appellant for whose benefit the land has been acquired being a ‘persons interested’ if not have accepted the award filed reference petition under Section 28 A(2) of the L.A. Act by way of written application then the Collector was required to refer the matter for determination of the court and the appellant being a relevant person as provided under Section 28-A(3) of the L.A. Act shall not be precluded to get the verdict of the reference court under Section 28-A(3) of the L.A. Act in respect of erroneous re-determination and rectification of incorrect amount of compensation indicated by the Land Acquisition Collector in his order dated 29.12.1997. The appellant however may be precluded to avail remedy under Section 50(2) by way of reference but cannot be precluded from preferring reference under Section 28-A(3) of the L. A. Act”. Further, subsequent to Babua Ram, the Apex Court itself in Union of India vs. Munshi Ram (dead) by LRs and others, (2006) 4 SCC 538, has taken a view that under Section 28-A of the