Case: M/S. Neyvely Lignite Corpn. Ltd Vs. Special Tahsildar(Land Acquisition) Neyvely And Ors

These appeals arise from the judgments of the Madras High Court in one batch in C.R.P. Nos. 1141- 1351/87 and batch dated April 7, 1989 and another batch from a judgment of the full bench rendered in M/s. Neyvely Lignite Corpn. Ltd. v. P. Ramaswami Naidu and others, AIR 1990 Mad. 160 . Notification under Section 4(1) of the Land Acquisition Act 1 of 1894 for short `the Act was published in the year 1975 acquiring a large extent of 5200 acres of land for the purpose of excavating inferior quality of the coal in South Arcot District in the State of Tamil Nadu. The Tehsildar, the Land Acquisition Officer awarded compensation in the years 1977-80 under Section 11 of the Act. Dissatisfied therewith, the claimants sought and secured over 2000 references under Section 18 to the Civil Court, namely, the Subordinate Judge, Cuddalore. In some of which the Civil Court made awards and decrees under Section 26. In the pending references the appellant sought to be impleaded as a party respondent to adduce evidence for fixation of the proper compensation. The Civil Court dismissed the applications holding that the appellant is not an interested person by a common order dated November 28, 1986. The High Court in the revisions by judgment dated February 16, 1987 upheld the order of the Civil Court. In the appeals filed by the State under Section 54, the appellant sought to be impleaded as a party-respondent which were turned down holding that the appellant is not a person interested. Against that a batch of appeals have been filed here. The appellants also filed writ petitions challenging the validity of the award and decree made under Section 26 by filing writ petitions. The full bench held that the appellant is not a person interested. Therefore, dismissed the writ petitions. Thus these appeals have been filed by special leave2. When the appeals had come up on May 3, 1991 before a bench of two Judges, our learned brethren made a reference to three Judges Bench thus:think that it would be proper that the entire matter including right to seek reference, to adduce evidence or to claim to be impleaded as a party before the Civil Court or its right to file appeal before the High Court against the above orders and altogether allied questions are necessary to be considered by three Judges.Thus these appeals before this bench. It is not in dispute that the entire controversy hinges upon interpretation of Section 3(b) and Section 50(2) of the Act whether the appellant is a person interested either to be impleaded as at to the pending references under Section 18 to lead evidence, contest the reference and if the compensation is enhanced to file an appeal in the High Court under Section 54 or to get impleaded as a partyrespondent in the pending appeals filed by the land acquisition officer or to file a writ petition under Article 226 of the Constitution challenging the correctness of the award and the decree made by the Civil Court under Section 26 of the Act.

Reasoning:
13. If there is no right of hearing or appeal given to the beneficiary and if the State does not file the appeal or if filed with delay and it was dismissed, is it not the beneficiary who undoubtedly bears the burden of the compensation, would be the affected person ? Is it not interested to see that the appellate court would reassess the evidence and fix the proper and just compensation as per law ? For instance the reference court determined market value at Rs. 1,00,000/- while the prevailing market value of the land is only Rs. 10,000/-. Who is to bear the burden ? Suppose State appeal was dismissed due to refusal to condone the delay, is it not an unjust and illegal award ? Many an instance can be multiplied. But suffice it to state that when the beneficiary for whose benefit the land is acquired is served with the notice and brought on record at the stage of enquiry by the Collector and reference court under Section 18 or in an appeal under Section 54, it/they would be interested to defend the award under Sections 11 or 26 or would file an appeal independently under Section 54 etc. against the enhanced compensation. As a necessary or proper party affected by the determination of higher compensation, the beneficiary must have a right to challenge the correctness of the award made by the Reference Court under Section 18 or in appeal under Section 54 etc. Considered from this perspective we are of the considered view that the appellant-company is an interested person within the meaning of Section 3(b) of the Act and is also a proper party, if not a necessary party under Order 1 Rule 10 of the CPC. The High Court had committed manifest error of law in holding that the appellant is not a person interested. The orders of the High Court are accordingly set aside14. Since the writ petitions filed by the appellants were dismissed, we set aside the orders and direct the High Court to treat them as appeals properly filed under Section 54 of the Act and be dealt with along with the appeals filed by the State pending disposal in the High Court. In the pending references under Section 18, in the Court of the Subordinate Judge, Cuddalore, it is directed to order impleading the appellant as a party-respondent and would give reasonable opportunity to cross examine the witnesses examined by the claimants and to examine witnesses on its behalf to rebut the evidence for higher compensation, the appellant is entitled to be heard in support of the determination of just and proper compensation. In this view, the need to implead the appellant as a party-respondent in the pending appeals in the High Court does not arise15. Against the interim orders refusing unconditional stay and directing the payment of the entire compensation, the appellants have sought leave of this court and this court by order dated March 18, 1989 directed the appellant to deposit 90 per cent of the enhanced amount and 40 per cent of the amount was directed to be withdrawn without security and 50 per cent shall be withdrawn on furnishing bank guarantee to the satisfaction of the Registrar of the High Court. The above order and the bank guarantee now pending before the Registrar of the High Court would be treated to be the conditional order in the pending appeals in the High Court and the appeals of the appellant and the appropriate orders will be passed by the High Court on the basis of the decision that would be rendered at the time of final disposal of the appeals.IN CIVIL APPEAL NOS. 3094/90 AND 4448/9116. The appellant is the Housing Board and challenged the award of the Subordinate Judge made under Section 26 of the Land Acquisition Act. The contention raised by the appellant is that it is an interested party within the meaning of Section 3(b) of the Land Acquisition Act and without notice to it, the award and decree made under Section 26 is not valid in law. The learned single Judge of the High Court following the full bench decision held that the appellant is not a person interested. Accordingly dismissed the writ petitions. Following the judgment just now rendered in C.A. Nos.0 and batch, the judgments of the High Court are set aside and the appellant is a person interested within the meaning of Section 3(b) of the Act and also a proper party under Order 1 Rule 10 of the CPC11. It is true that Section 50(2) of the Act gives to the local authority or the company right to adduce evidence before the Collector or in the reference under Section 18 as it was specifically stated that in any proceedings held before the Collector or the Court, the local authority or the company may appear and adduce evidence for the purpose of determining the amount of compensation. However, it has no right to seek reference. Based thereon, the contention is that the limited right of adduction of evidence for the purpose of determining the compensation does not carry with it the right to participate in the proceedings or right to be heard or to file an appeal under Section 54. We cannot limit the operation of Section 3(b) in conjunction withn (2) of Section 50 of the Act within a narrow compass. The right given undern (2) of Section 50 is in addition to and not in substituting of or in derogation to all the incidental, logical and consequential rights flowing from the concept of fair and just procedure consistent with the principles of natural justice. The consistent thread that runs through all the decisions of this Court starting from Himalayan Tiles case is that the beneficiary, i.e., local authority or company, a coop. society registered under the relevant State law, or statutory authority is a person interested to determine just and proper compensation for the acquired land and is an aggrieved person. It flows from it that the beneficiary has the right to be heard by the Collector or the Court. If the compensation is enhanced it is entitled to canvass its correctness by filing an appeal or defend the award of the Collector. If it is not made a party, it is entitled to seek leave of the court and file the appeal against the enhanced award and decree of the Civil Court under Section 26 or of the judgment and decree under Section 54 or is entitled to file writ petition under Article 226 and assail its legality or correctness. When the award made under Section 11 of the Collector is vitiated by fraud, collusion or corruption, the beneficiary is entitled to challenge it in the writ petition apart from the settled law that the conduct of the Collector or Civil Judge is amenable to disciplinary enquiry and appropriate action. These are very valuable and salutary rights. Moreover in the language of Order 1 Rule 10 CPC, in the absence of the beneficiary who ultimately is to bear the higher compensation, no complete and effectual determination of binding just and proper compensation to the acquired land would be made. So it is concommitently a proper party if not a necessary party to the proceedings under Order 1 Rule 10 CPC. The denial of the right to a person interested is in negation of fair and just procedure offending Article 14 of the Constitution12. The reasons are not far to seek. It is notorious that though the stakes involved are heavy, the Govt. plead or the instructing officer do not generally adduce, much less proper and relevant, evidence to rebut the claims for higher compensation. Even the cross examination will be formal, haulting and ineffective. Generally, if not invariably the governmental agencies involved in the process take their own time and many a time in collusion, file the appeals after abnormal or inordinate delay. They remain insensitive even if the states involved run into several crores of public money. The courts insist upon proper explanation of every days delay. In this attitudinal situation it would be difficult to meet strict standards to fill the unbridgeable gaps of the delay in filing the appeals and generally entail with dismissal of the appeals at the threshold without adverting to the merits in the hike in the compensation. On other hand if the notice is issued to the local authority etc. it/they would participate in the award proceedings under Sections 11 and 18 adduce necessary and relevant evidence and be heard before the Collector and the court before determining compensation. For instance that without considering the evidence in the proper perspective, the court determined the compensation13. If there is no right of hearing or appeal given to the beneficiary and if the State does not file the appeal or if filed with delay and it was dismissed, is it not the beneficiary who undoubtedly bears the burden of the compensation, would be the affected person ? Is it not interested to see that the appellate court would reassess the evidence and fix the proper and just compensation as per law ? For instance the reference court determined market value at Rs. 1,00,000while the prevailing market value of the land is only Rs.. Who is to bear the burden ? Suppose State appeal was dismissed due to refusal to condone the delay, is it not an unjust and illegal award ? Many an instance can be multiplied. But suffice it to state that when the beneficiary for whose benefit the land is acquired is served with the notice and brought on record at the stage of enquiry by the Collector and reference court under Section 18 or in an appeal under Section 54, it/they would be interested to defend the award under Sections 11 or 26 or would file an appeal independently under Section 54 etc. against the enhanced compensation. As a necessary or proper party affected by the determination of higher compensation, the beneficiary must have a right to challenge the correctness of the award made by the Reference Court under Section 18 or in appeal under Section 54 etc. Considered from this perspective we are of the considered view that they is an interested person within the meaning of Section 3(b) of the Act and is also a proper party, if not a necessary party under Order 1 Rule 10 of the CPC. The High Court had committed manifest error of law in holding that the appellant is not a person interested. The orders of the High Court are accordingly set aside14. Since the writ petitions filed by the appellants were dismissed, we set aside the orders and direct the High Court to treat them as appeals properly filed under Section 54 of the Act and be dealt with along with the appeals filed by the State pending disposal in the High Court. In the pending references under Section 18, in the Court of the Subordinate Judge, Cuddalore, it is directed to order impleading the appellant as at and would give reasonable opportunity to cross examine the witnesses examined by the claimants and to examine witnesses on its behalf to rebut the evidence for higher compensation, the appellant is entitled to be heard in support of the determination of just and proper compensation. In this view, the need to implead the appellant as at in the pending appeals in the High Court does not arise15. Against the interim orders refusing unconditional stay and directing the payment of the entire compensation, the appellants have sought leave of this court and this court by order dated March 18, 1989 directed the appellant to deposit 90 per cent of the enhanced amount and 40 per cent of the amount was directed to be withdrawn without security and 50 per cent shall be withdrawn on furnishing bank guarantee to the satisfaction of the Registrar of the High Court. The above order and the bank guarantee now pending before the Registrar of the High Court would be treated to be the conditional order in the pending appeals in the High Court and the appeals of the appellant and the appropriate orders will be passed by the High Court on the basis of the decision that would be rendered at the time of final disposal of the appeals.