Case: Union of India Vs. District Judge, Udhampur

so as to include a body, local authority, or a company for whose benefit the land is acquired and who is bound under an agreement to pay the compensation. In our opinion, this view accords with the principles of equity, justice and good conscience. How can it be said that a person for whose benefit the land is acquired and who is to pay the compensation is not a person interested even though its stake may be extremely vital ? For instance, the land acquisition proceedings may be held to be invalid and this a person concerned is completely deprived of the benefit which is proposed to be given to him. Similarly, if such a person is not heard by the Collector or a Court, he may have to pay a very heavy compensation which, in case he is allowed to appear before a Court, he could have satisfied is that the compensation was far too heavy having regard to the nature and extent of the land. We are, therefore, unable to agree with the view taken by the Orissa High Court or even by the Calcutta High Court that a company, local authority or a person or whose benefit the land is acquired is not an interested person. We are satisfied that such a person is vitally interested both in the title to the property as also in the compensation to be paid therefore because both these factors concern its future course of action and if decided against him seriously prejudice his rights. Moreover, in view of the decision of this Court referred to above, we hold that the appellant was undoubtedly a person interested as contemplated by section 18(1) of the Act. The High Court, therefore, committed an error in throwing out the appeal of the appellant on the ground that it had no locus standi to file an appeal before the Bench." 8. This view was reiterated in Neelagangabhai v. State of Karnataka, 1990(2) RRR 37 (SC) : 1990(3) SCC 617; Krishi Upaj Mandi Samiti v. Ashok Sighal and Ors., 1991 Suppl. 2 SCC 419 ; Union of India v. Sher Singh and Ors., 1993(1) RRR 630 (SC) : 1993(1) SCC 609 : and Bihar State Electricity Board v. State of Bihar and Ors., Civil Appeal Nos. 1577-1600/94 dated February 21, 1994. Thus it is settled law that the requisitioning authority is a person interested since it is interested in the fixation of the proper and just market value or compensation of the land acquired on its behalf as well as to see that the true extent of the land is acquired and is free from encumbrances. The participation in the proceedings by the local officers is to enable not only the determination of the proper and just market value or compensation in their presence after laying necessary and relevant evidence but also to secure valid title to the land acquired so that Land Acquisition Officer and the court determines just and proper market value of the lands. It is, therefore, clear that the appellant is a proper and necessary party under Order 1 Rule 10 CPC. It is also the person interested under S. 2(d) of the Act. Accordingly the view of the High Court that the appellants are not interested person is clearly illegal. It is accordingly set aside. 9. The question then is what is the procedure to be adopted in this case. In view of the fact that there is no agreement between the parties as contemplated under S. 8(1)(a) read with Rule 9 of the Rules, as seen earlier, the only course open to the authorities is to appoint an arbitrator under S. 8(1)(b) of the Act and the arbitrator is enjoined to determine the market value as contemplated under sub-section (3) of S. 8 of the Act. In that view, necessarily, the matter has to be remitted for the decision by the arbitrator to be appointed by the State Govt. under S. 8(1)(b) fresh. But on the facts in this case since 23 years have elapsed, we find no jurisdiction to remit the matter. The competent authority had fixed the market value at the rate specified earlier and admittedly local offices had associated themselves with the competent officer at that time of fixation of the market value. This court had held in Union of India v. Harikrishna Khosla, 1993 Suppl. 2 SCC 149 that the property acquired under the acquisition and requisition of the Immovable Property Act, 1952 (for short `Central Act), the arbitrator has no power to award solatium and interest. The same principle would apply proprio vigore to the principle laid down under S. 8(3) of the Act. Accordingly we conclude that the determination of the solatium at 15% and interest at 4% by the competent authority under S. 8(3) of the Act is illegal. Therefore, to that extent it is set aside. However, fixation to market value at the rates specified above are upheld in the peculiar circumstances of the case. This court has given interim directions from time to time and directed the appellant to deposit half of the amount determined together with the solatium and interest etc. In the light of the decision now given, the competent authority is directed towork out the total compensation payable to the lands, acquired at the rate specified by it as now upheld, deduct the amount already paid to the respondents in pursuance of the directions issued by this court from time to time. If any balance amount is found due and payable by the appellant, it should be so determined, and would communicate the same to the local officer of the appellant. The competent authority is directed to decide the matters as above within a period of two months from the date of receipt of this order and the appellant is directed to deposit the balance amount, if any, within a further period of three months from the date of the receipt of the notice by the local officer.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]4. In this case, the compensation was fixed with the association of the local officers of the appellant. The contention that the appellants have no locus standi is equally no longer res integra. In addition he also contends that for the second limb of Rule 9(1) i.e. the approval of the Govt. in the administrative department, it is only of the State Govt. of Jammu and Kashmir or an officer authorised by the State Govt. in that behalf. Since the competent authority having been authorised in the notification, there is no need of further authorisation or the approval needed in this behalf and that, therefore, the award made by the competent authority is only an offer as held by the High Court in the previous litigation. It binds the appellants and that, therefore, they cannot question the offer made by the competent authority. We find no force in the contention. The language of Rule 9(1), namely, the delegated authority shall "as far as may be associated with itself the local officer of the Govt. concerned with the property in fixing compensation" would necessarily mean that the local officer of the Govt. of India that is apparent when we read the language closely with the language used in S. 21 of the Act. Section 21 expressly postulates that when the requisition is sought on behalf of the Union of India, the Govt. of Jammu and Kashmir acts under S. 21 requisitioning the land for the public purposes of the Union of India. Admittedly when the notification under S. 21 was issued requisitioning the land for defence purpose and the land was acquired under S. 7, association with the competent authority, is only of the local officer of the govt. of India and not of the State Govt. The reason is obvious that the officers of the appellant are interested to collect the best evidence of the prevailing market value and would place that evidence before the competent authority to fix true and correctlocal officer had admittedly stated that though he was agreeable to the amount determined, unless the approval of the Govt. of India is obtained, he cannot give his concurrence. Thereafter no concurrence of the Govt. of India had been obtained nor was any offer communicated to the respondents for their acceptance. No records has been placed even in the earlier proceedings before the High Court of such a communication by the officer and acceptance. It is seen that under Rule 9(5) it is mandatory that every person interested in the offer shall "within 15 days of the receipt of the offer communicate in writing to the competent authority his acceptance or otherwise of the offer". It is thereby clear that the communication of the offer to the person concerned and his acceptance within 15 days thereafter from the date of the receipt of the offer are mandatory requirements and should be complied with. It is seen that the procedure has been prescribed in a mandatory language to ensure that the offer must be made after the approval by the Government concerned or with the approval of its officer specifically authorised in that behalf. The acceptance also should be in writing and must be made within the time prescribed. Otherwise the offer does not bind the Requisitioning Department for which acquisition was done or the Union of India or the owner whose land had been acquired for the public purpose. The High Court, therefore, was not right in its conclusion that there must be deemed acceptance by the respondents since they had so stated in their objection petitions the enquiry proceedings held for the determination of the compensation by the arbitrator appointed under S. 8(1)(b) of theit is settled law that the requisitioning authority is a person interested since it is interested in the fixation of the proper and just market value or compensation of the land acquired on its behalf as well as to see that the true extent of the land is acquired and is free from encumbrances. The participation in the proceedings by the local officers is to enable not only the determination of the proper and just market value or compensation in their presence after laying necessary and relevant evidence but also to secure valid title to the land acquired so that Land Acquisition Officer and the court determines just and proper market value of the lands. It is, therefore, clear that the appellant is a proper and necessary party under Order 1 Rule 10 CPC. It is also the person interested under S. 2(d) of the Act. Accordingly the view of the High Court that the appellants are not interested person is clearly illegal. It is accordingly setview of the fact that there is no agreement between the parties as contemplated under S. 8(1)(a) read with Rule 9 of the Rules, as seen earlier, the only course open to the authorities is to appoint an arbitrator under S. 8(1)(b) of the Act and the arbitrator is enjoined to determine the market value as contemplated under(3) of S. 8 of the Act. In that view, necessarily, the matter has to be remitted for the decision by the arbitrator to be appointed by the State Govt. under S. 8(1)(b) fresh. But on the facts in this case since 23 years have elapsed, we find no jurisdiction to remit the matter. The competent authority had fixed the market value at the rate specified earlier and admittedly local offices had associated themselves with the competent officer at that time of fixation of the marketwe conclude that the determination of the solatium at 15% and interest at 4% by the competent authority under S. 8(3) of the Act is illegal. Therefore, to that extent it is set aside. However, fixation to market value at the rates specified above are upheld in the peculiar circumstances of the case. This court has given interim directions from time to time and directed the appellant to deposit half of the amount determined together with the solatium and interest etc. In the light of the decision now given, the competent authority is directed towork out the total compensation payable to the lands, acquired at the rate specified by it as now upheld, deduct the amount already paid to the respondents in pursuance of the directions issued by this court from time to time. If any balance amount is found due and payable by the appellant, it should be so determined, and would communicate the same to the local officer of the appellant. The competent authority is directed to decide the matters as above within a period of two months from the date of receipt of this order and the appellant is directed to deposit the balance amount, if any, within a further period of three months from the date of the receipt of the notice by the local officer.