Case: Collector of Land Acquisition & Others Vs. M/s. Andaman Timber Industries

1. This appeal is directed against judgment dated 21.7.2006 of the Circuit Bench of Calcutta High Court at Port Blair whereby the appeal preferred by the appellants against the order of the learned Single Judge was dismissed and the cross-objection filed by the respondent was allowed.2. Respondent - M/s. Andaman Timber Industries owned 8.86 hectares land comprised in Survey Nos. 23/3 and 23 in Shorepoint Village, Bambooflat, South Andaman. In furtherance of the request made by the Port Management Board, Port Blair for acquisition of the respondents land for the purpose of creating Foreshore Port facilities, the Andaman and Nicobar Administration issued notification dated 23.7.2002 under Section 4(1) of the Land Acquisition Act, 1894 (hereinafter referred to as "the Act"). On the next day, i.e., 24.7.2002 another notification was issued under Section 17(4) and the application of Section 5A of the Act was dispensed with. The declaration under Section 6 read with Section 17(1) was issued on 30.7.2002. The Land Acquisition Collector issued notice dated 6.8.2002 under Section 9(1) to the respondent for taking possession. Simultaneously, the requisitioning body was directed to deposit an estimated amount of L 14,20,97,426. However, due to paucity of funds, the requisitioning body represented that it is in a position to deposit only L 3.10 crores towards a portion of the acquired land in the first phase of acquisition. Thereafter, the Land Acquisition Collector passed an award in respect of 3.64 hectares land out of total 8.86 hectares land and the amount payable under the said part, i.e., L 3,03,03,567 was paid to the respondent. No further steps were taken for the acquisition of the remaining land despite the fact that the Administration had invoked Section 17 of the Act. In the meanwhile, the workers of the respondent company, who had not received their Voluntary Retirement Scheme compensation, raised an industrial dispute which culminated into an award providing for payment of the compensation out of the compensation to be received by the respondent company from acquisition of its land. The respondent then filed Writ Petition No.197/2004 for issue of a direction to the Administration to pass final award in respect of balance land measuring 5.22 hectares. By an order dated 25.11.2004, the learned Single Judge allowed the writ petition and directed the appellants herein to complete the land acquisition proceedings within four months from the date of order. M.A.T.No.001/2005 filed by the appellants was dismissed by the Division Bench of the High Court. Learned counsel for the appellants argued that due to non-compliance of the mandate of Section 17(3-A) of the Act the acquisition proceedings in respect of 5.22 hectares will be deemed to have lapsed after two years prescribed under Section 11(A) of the Act. He further argued that after lapse of the acquisition proceedings, the land cannot be treated to have vested with the appellants.3. Learned counsel for the respondent controverted the aforesaid argument and submitted that land had vested in the appellants because possession was taken by invoking Section 17(1) of the Act. He further argued that once the possession vested with the appellants, the same cannot be withdrawn even by invoking Section 48 of the Act. In support of this argument, learned counsel relied upon the judgment of this Court in Satendra Prasad Jain and others v. State of U.P. and others (1993) 4 SCC 369. 4. We have considered the rival arguments and carefully perused the record. 5. Ordinarily, the Government can take possession of the acquired land only after an award in respect thereof has been made under Section 11. The provisions of Section 11-A are intended to benefit the landowner and ensure that the award must be made within two years from the date of the Section 6 declaration. Therefore, if an award is not made within two years, the land cannot be treated to have vested in the Government and its title continues with the owner. However, in cases where urgency clause enshrined in Section 17 is invoked and the competent authority takes possession of the land prior to the making of the award under Section 11, the owner is divested of his title to the land and the same vests in the Government. In the instant case, 80 per cent of the estimated compensation for the land was not paid to the respondent company although Section 17(3-A) stipulates that it should have been paid before possession of the said land was taken. 6. However, this by itself is not sufficient for holding that the acquired land did not vest with the appellants. A similar argument raised in Satendra Prasad Jains case, Satendra Prasad Jain v. State of U.P., (1993) 4 SCC 369 was repelled by a three Judge Bench in the following terms: "15......Clearly, Section 11-A can have no application to cases of acquisitions under Section 17 because the lands have already vested in the Government and there is no provision in the said Act by which land statutorily vested in the Government can revert to the owner. 16. Further, Section 17(3-A) postulates that the owner will be offered an amount equivalent to 80 per cent of the estimated compensation for the land before the Government takes possession of it under Section 17(1). Section 11-A cannot be so construed as to leave the Government holding title to the land without the obligation to determine compensation, make an award and pay to the owner the difference between the amount of the award and the amount of 80 per cent of the estimated compensation. 17. In the instant case, even that 80 per cent of the estimated compensation was not paid to the appellants although Section 17(3-A) required that it should have been paid before possession of the said land was taken but that does not mean that the possession was taken illegally or that the said land did not thereupon vest in the first respondent."7. Besides it has to be pointed out that the Government after taking possession pursuant to the notification under Section 17 of the Act cannot withdraw itself from acquisition even under Section 48 of the Act. This Court in the very same decision in Satendra Prasad Jains case has dealt with this aspect. The relevant paragraph of the judgment is extracted below:"14. There are two judgments of this Court which we must note. In Rajasthan Housing Board v. Shri Kishan 1993(2) SCC 84 it was held that Government could not withdraw from acquisition under Section 48 once it had taken possession of the land. In Lt. Governor of H.P. v. Avinash Sharma 1970(2) SCC 149 it was held that:"8. ...after possession has been taken pursuant to a notification under Section 17(1) the land is vested in the Government, and the notification cannot be cancelled under Section 21 of the General Clauses Act, nor can the notification be withdrawn in exercise of the powers under Section 48 of the Land Acquisition Act. Any other view would enable the State Government to circumvent the specific provision by relying upon a general power. When possession of the land is taken under Section 17(1), the land vests in the Government. There is no provision by which land statutorily vested in the Government reverts to the original owner by mere cancellation of the notification."8. In view of the aforesaid judgment, we hold that there is no merit in the contention of the learned counsel for the appellants.

Decision reasoning: 0[ds]17. In the instant case, even that 80 per cent of the estimated compensation was not paid to the appellants although Sectionrequired that it should have been paid before possession of the said land was taken but that does not mean that the possession was taken illegally or that the said land did not thereupon vest in the first respondent."7. Besides it has to be pointed out that the Government after taking possession pursuant to the notification under Section 17 of the Act cannot withdraw itself from acquisition even under Section 48 of the Act. This Court in the very same decision in Satendra Prasad Jains case has dealt with this aspect. The relevant paragraph of the judgment is extracted below:"14. There are two judgments of this Court which we must note. In Rajasthan Housing Board v. Shri Kishan 1993(2) SCC 84 it was held that Government could not withdraw from acquisition under Section 48 once it had taken possession of the land. In Lt. Governor of H.P. v. Avinash Sharma 1970(2) SCC 149 it was held that:"8. ...after possession has been taken pursuant to a notification under Section 17(1) the land is vested in the Government, and the notification cannot be cancelled under Section 21 of the General Clauses Act, nor can the notification be withdrawn in exercise of the powers under Section 48 of the Land Acquisition Act. Any other view would enable the State Government to circumvent the specific provision by relying upon a general power. When possession of the land is taken under Section 17(1), the land vests in the Government. There is no provision by which land statutorily vested in the Government reverts to the original owner by mere cancellation of the notification."8. In view of the aforesaid judgment, we hold that there is no merit in the contention of the learned counsel for the appellants.