Case: Himalayan Tile &amp; Marble Private Limited Vs. Francis V. Coutinho

2. The three petitioners who are brothers were the owners of survey Nos. 6/3, 8/1, 9/1 and 9/2 at village Majas Mogra, Jogeshwari, Bombay admeasuring 2 acres. The Himalayan Tile and Marble (Private) Ltd. , the Respondent No. 3 in the Petition are the appellant before us, They carried on the business of manufacture and sale of artificial marbles and tiles. They have a factory on the land adjoining the land of the original petitioners. Some time in 1957 or 1958 at the instance of the third respondents and for their purposes the law was set in motion for the acquisition of the petitioners lands. On 7th of January 1953 a notification under Section 4 of the Land Acquisition Act was issued and a separate notice thereafter was also issued by the Land Acquisition Officer, to the 1st and the 2nd petitioners. It was alleged on behalf of the petitioners that no notice was served upon the 3rd petitioner. On the 31st of December 1959, the Land Acquisition Officer, similarly issued a notification purporting to be under Section 6 of the Act. According to the petitioners a notice was also issued but was served on the 1st petitioner only on the 25th of January 1960. The acquisition proceedings went on and an award came to be made on the 11th of April 1961 under Section 12 of the Act. It was published in the State Gazette on the 18th of April 1961. On the 11th of December 1961 a letter was written on behalf of the Government, the 1st respondent in the petition, threatening to take possession of the land acquired and soon after on the 12th of January 1962 the present petition, out of which the appeal arises, was filed on the Original Side of this Court.The petitioners challenged the proceedings taken for the acquisition of their lands as also the award made on 11th April 1961 on several grounds. Initially they alleged that the whole acquisition proceedings were inspired by the Himalayan Tiles and Marbels (Pvt.) Ltd. the 3rd respondent whose officers in collusion with one K. I. Hathi, a surveyor in the office of the Special Land Acquisition Officer, Bombay, the 2nd respondent, wanted to acquire the lands at a cheap rate by using the machinery under the Land Acquisition Act. The petitioners alleged that they are ignorant and illiterate people and that this Hathi "promised and represented to the 1st petitioner that the petitioners would be getting a large amount by way of compensation and that there was no harm or prejudice to them in allowing the said lands to be acquired". On this representation the officers of the land acquisition office and Hathi took various signatures of the petitioners or some of them on different papers. The petitioners alleged that the said officers of the department "were interested in the said lands being acquired at the instance and instigation of the 3rd respondent" and that a fraud had been played upon the petitioners by obtaining their signatures on various papers and by holding out promises and inducements not to resist the acquisition proceedings. Pursuant to these representations and due to the fraud the petitioners at no stage participated in the enquiries or proceedings as they were not aware of the same. They also challenged the proceedings as invalid and not binding on them and illegal for other reasons. They stated inter alia that the alleged purpose of the acquisition was not a public purpose, that the Himalayan Tile and Marble Private Ltd. , was not a company which had any charitable or public purpose as one of its objects, that it was a purely commercial venture carried on by some businessmen for the purpose of their own private profit and they were merely manufacturing and dealing in artificial marbles and tiles; that the public was in no way interested in the business of the 3rd respondent or the manufacture and the profits of the 3rd respondents are shared only amongst the shareholders of the 3rd respondent company who are a few individuals, that their activities are in no way advantageous to the community and the use of their work was merely for particular individuals namely the shareholders of the 3rd respondent company. Thus they alleged that the acquisition proceedings culminating in the award were illegal and should be so declared. They also challenged the award and the proceedings on the ground of mala fides.5. In the petition the petitioners joined the Himalayan Tile and Marble (Pvt.) Ltd. , the 3rd respondent as a party, the first two respondents being the State of Bombay and the Special Land Acquisition Officer. In paragraph 2 of the petition however they stated "no relief is being claimed against them (the 3rd respondents)". The principal reliefs which they claimed are set forth in prayer Clauses (a), (b) and (c) and these reliefs are only claimed against the 1st and the 2nd respondents. The first relief is to quash and set aside the notifications under Sections 4, 6 and 12. The second relief claimed is against the 1st respondent, its officers, subordinates and agents from giving effect to or enforcing the acquisition proceedings and/or taking any further steps pursuant to the impugned notification. The third prayer is for restraining by an order and injunction the first two respondents from proceeding further with the acquisition proceedings.6. After the petition was filed the petitioners prayed for amendment of the petition in view of the Validating Act XXXI of 1962 having been passed and in view of the decision of the Supreme Court in the second Arora case. AIR 1964 SC 1230. They challenged the acquisition proceedings and the award as violative of Articles 14, 19 and 31 (2) of the Constitution.

Court's reasoning:
9. Having heard counsel on this preliminary objection, we are inclined to hold that there is much substance in the objection which is entitled to succeed and it is clear upon the authorities that the party for whom acquisition is being undertaken has no locus standi whatever except as provided in Section 50,(2) to intermeddle with the acquisition proceedings or to claim to set aside the award under Section 18. Therefore, such a party would not be entitled to challenge the same proceedings indirectly in a writ petition. We would first refer to some provisions of the law, relied on by either side, Section 18,(1) merely gives the right to have a reference made only to "any person interested" who has not accepted the award. Therefore the person who can demand a reference must be a "person interested". That expression is defined by the Act in Section 3,(b) as including "all persons claiming an interest in compensation to be made on account of the acquisition of land under this Act; and a person shall be deemed to be interested in land if he is interested in an easement affecting the land;" It was urged, therefore, that the 3rd respondent for whom the land is being acquired would be a "person interested" because it has an interest in the compensation we cannot accept this conclusion because Section 50,(2) indicates what is the nature of the interest of such a person. Itany proceeding held before a Collector or Court in such cases the local authority or company concerned may appear and adduce evidence for the purpose of determining the amount of compensation: "provided that no such local authority or company shall be entitled to demand a reference under Section 18. "therefore in express terms Section 50 takes away the right to demand a reference from the party for whom the acquisition is set on foot. Not merely does the parentby implication limit the scope and extent to which such a person can intermeddle with the land acquisition proceedings by the words "may appear and adduce evidence, for the purpose of determining the amount of compensation" but the proviso expressly takes away the right to demand a reference.Counsel sought to avoid the impact of the decisions to which we have referred above by urging that though no doubt it may not be open to the Company for whom the land is being acquired to intermeddle with the land acquisition proceedings while they are before the Land Acquisition Officer and prior to the award being made, there is nothing to bar such a person from challenging the proceedings and the award otherwise, if he can do so, that is to say, as for instance in a writ matter. We do not think that the Miscellaneous petition which was preferred in this case was any ancillary or different proceeding. In fact it was undertaken in order to challenge those very proceedings and to set aside the very award which was passed, and if a party is deprived of the right to challenge those proceedings or to question the award by the special law by which it is governed, we cannot acting under our constitutional power permit that which the law Itself has prohibited.It seems to us that despite the fact that an award was made the position of the 3rd respondent remained the same as before namely that it was still merely a company for which land acquisition proceedings had been undertaken. In this respect, considerable controversy was raised as to whether the Government had been put in possession of a part of the land thus feeding their title and completing it to that extent. We may first of all dispose of this small ancillaryas we have stated the 3rd respondents fortunately for them were made parties to the writ petition but they did not only not contest the proceedings but did not even appear and were throughout ex parte. If they had intended to controvert any statement in the petition, surely it was their duty to have controverted the statements in the petition. That they have not done so would entitle the Court to hold that this allegation made in paragraphs 1 and 15 of the petition is true at least so far as the 3rd respondent is concerned and unchallengeable so far as they are concerned, but we do not propose merely to rely upon such a technicality. The party most concerned with the land acquisition proceedings namely the Land Acquisition Officer has filed an affidavit on 22nd December, 1962 and in reply to paragraph 15 he stated in paragraph 21 "with reference to paragraph 15 of the petition I believe the contents thereof to be substantially correct". Similarly with reference to paragraph 1 of the petition also he stated in paragraph 8 of his affidavit that the contents thereof he believed were substantially correct. Therefore the only person who should be in the know of facts namely the Land Acquisition Officer has categorically admitted that what the petitioners had stated as to their possession was true. In the face of this admission of the Land Acquisition Officer himself and in the face of theof any affidavit on the part of the 3rd respondent, there can be only one conclusion namely that on the date of the petition the petitioners were in possession of the lands underthe second place, we may say that it is this same officer against whom the gravest allegations have been made in the petition that it was he who made false representations to the petitioners and that it was with his connivance that the 3rd respondents played a fraud upon the petitioners. We can hardly therefore accept the statement of this officer. At any rate it cannot be accepted in the face of the categorical admission of his superior officer, the special Land Acquisition Officer himself. Then it is further urged on behalf of the appellants that there is no doubt or dispute that proceedings were taken under Section 17 (2) relying upon the urgency clause which empowers the State Government to take possession in anticipation of acquisition. It was urged that if those proceedings did take place some lands must have been taken possession of and that fact supports the affidavit of Hathi. If possession had been taken we have no doubt that adequate documents must have been prepared but none has been filed. Apart from all that, we will assume for the sake of argument that documents may have been prepared as to possession. If they were prepared by Hathi they would in our opinion be very suspicious. What is more, it is common knowledge that in spite of receipt of possession being filed in Court and reports being made of delivery of possession the facts as to actual possession are often different. The possession according to the affidavit of Hathi of one acre of land was said to have been taken on 22nd February, 1960, but the petition was filed on 12th January, 1962, more than two years later and it is in the petition that the petitioners specifically averred that they were in possession of all the lands under acquisition. To that allegation there was not merely no reply on the part of the 3rd respondent but a positive admission on the part of the Land Acquisition Officer. It may be therefore that the fact as to possession had changed in the meanwhile between 1960 and 1962  therefore the Land Acquisition Officer admitted that possession of all the lands was with the petitioners. At any rate in this state of the record we cannot but conclude that on the date of the petition the lands under acquisition were in the possession of the petitioners.19. with this comment upon the ancillary point we turn to consider the main contention namely that the 3rd respondent acquired an interest or right de hors the Land Acquisition Act by virtue of the agreement entered into between them and the Government, which they could protect in the writ petition and therefore no provision of the Land Acquisition Act can bar them from protecting that right. We have already said that in our opinion the writ petition was nothing more or less than a continuation of the proceedings in land acquisition, for the whole purpose and the object of the writ petition was to challenge the entire land acquisition proceedings and the award made. It was not a different or new proceeding and the right which the 3rd respondent claimed was not a separate and an independent right. It was a right which they claimed as a party for whom the land acquisition proceedings were undertaken. It was this right as such a party which they were seeking to protect and it was precisely such a right which does not make them "a person interested" within the meaning of the Land Acquisition Act, and in regard to whom Section 50 bars interference with the proceedings. The agreement which the appellants made with the State Government was made under the provisions of the land acquisition Act and is therefore subject to its provisions.20. We may also say that there are other strong reasons why the 3rd respondent would have no right to file and pursue the present appeal. As we have already said they took no part in the writ petition at all. They were made a party though they were not a necessary party probably because they were given the right to adduce evidence and assist the Government under Section 50 (2 ). Thus they certainly had an opportunity to contest these proceedings but they did not do so and remained ex parte. The real party and upon the authorities the only party who is interested in the land acquisition proceedings namely the Government does not choose to file an appeal. In fact counsel on their behalf categorically stated before us that they did not wish to urge anything in appeal and would abide by the orders of the Court. That was their attitude also before the learned single Judge, and for a very good reason. They had realised that the acquisition and the award must be set aside having regard to the second Arora case. The petitioners in the petition were substantially challenging the notices and the notifications under Section 4, Section 6 and Section 12 of the Act. None of these notices were served upon the 3rd respondents nor were they at all connected with them. In the petition itself no relief has been asked for against the 3rd respondents. Whatever reliefs have been asked for are against the 1st and the 2nd respondents. We cannot, therefore, understand how under these circumstances the 3rd respondents can claim that they have a right of appeal. They are taking advantage of the fact that they have been made a party to the petition, to prefer this appeal. Under the circumstances, we hold that the appellants have no right of appeal and no locus standi to prefer the appeal