Case: Dr. G.H. Grant Vs. State Of Bihar

Dr. Gregor Hugh Granthereinafter called Dr. Grant was the proprietor of the Dumka Estate in the District of Santhal Parganas in the State of Bihar. By a notification under S. 4(1) of the Land Acquisition Act, 1894 published on June 8, 1949 the Government of Bihar notified for acquisition a large area of land of the estate of Dr. Grant for establishing "an agricultural farm". The Collector made on March 25, 1952 awards setting out the true area of the land notified for acquisition, compensation which in his opinion should be allowed for the land and apportionment of the compensation among all the persons known or believed to be interested in the land. The awards were filed in the Collectors office on the same day. In respect of Plot No. 142, Rs.0 were awarded by the Collector as compensation in equal shares to Dr. Grant and the members of the village community, who had also made a claim for compensation. In respect of Plot No. 68, the Collector awarded Rs.0 as compensation. In respect of acquisition of an area admeasuring 88.91 acres consisting of several plots, the Collector awarded Rs.0 as compensation and directed apportionment in the manner set out in the award8. On May 5, 1952 Dr. Grant applied to the Collector under S. 18 of the Land Acquisition Act that the three matters be referred for determination by the Court of the amount of compensation payable to the owners. Similar applications were filed in respect of Plots Nos. 68 and 142 by the members of the village community. In consequence of a notification issued under S. 3 of the Bihar Land Reforms Act 30 of 1950 the Dumka Estate vested on May 22, 1952 in the State of Bihar. In exercise of the power under S. 16 of the Land Acquisition Act, the Government of Bihar took over possession on August 21, 1952 of the lands notified for acquisition. On October 15, 1952 the Government Pleader submitted a petition before the Collector claiming that the compensation money awarded to Dr. Grant had since the publication of the notification under the Bihar Land Reforms Act become payable to the State Government, and the dispute between Dr. Grant and the State Government regarding the right to payment may be referred to the Court under S. 30 of the Land Acquisition Act9. The Collector made on November 5, 1952 three references to the District Court, Santhal Parganas. Two out of those references were made in exercise of powers under Ss. 30 and 18 of the Land Acquisition Act, and the third under S. 30. The District Judge by his order dated April 9, 1954 held that the State of Bihar had no interest in the property notified for acquisition when the award was filed before the Collector under S. 12 of the Land Acquisition Act, and the State could lay no claim to the compensation money awarded. The District Judge upheld the apportionment of compensation between Dr. Grant and the village community and enhanced the valuation of the land and directed that compensation at the enhanced rate be awarded10. Against the order of the District Judge in the references three appeals Nos. 401 of 1953, 297 of 1954 and 298 of 1954 were preferred by the State, to the High Court of Judicature at Patna. The High Court held that title of the owner to the land acquired under the Land Acquisition Act could not be extinguished under that Act till possession was taken under S. 16 of the Act, and that since the title of Dr. Grant in the land acquired stood statutorily vested in the State by virtue of the notification issued under the Bihar Land Reforms Act, he was not entitled to receive the compensation money. In the view of the High Court, title to the compensation money had vested in the State Government before possession was obtained by the State Government under S. 16 of the Land Acquisition Act, and that it was open to the Collector, on a dispute raised by the State about the right to receive the compensation money, to make a reference to the Court under S. 30 of the Act. With certificate granted by the High Court, these three appeals have been preferred by Dr. Grant.

Court's reasoning:
14. We are unable to agree with the view expressed by the Mysore High Court in Boregowda v. Subbaramiah, AIR 1959 Mys 265, that if the Collector has made apportionment of the compensation money by his award his power to refer a dispute under S. 30 cannot be exercised. Clause (iii) of S. 11 enjoins the Collector to apportion the compensation money among persons known or believed to be interested in the land: he has no discretion in the matter. Exercise of the power under S. 30 to refer the dispute relating to apportionment or as to the persons to whom it is payable is, it is true, discretionary: the Collector may, but is not bound to exercise that power. It is however not predicated of the exercise of that power that the collector has not apportioned the compensation money by his award. We are also unable to agree with the Mysore High Court that the power under S. 30 of the Land Acquisition Act has to be exercised on a motion within the period prescribed by S. 18(2) of the Land Acquisition Act.In our judgment the powers exercisable by the Collector under S. 18(1) and under S. 30 are distinct and may be invoked in contingencies which do not overlap15. By virtue of the notification issued under the Bihar Land Reforms Act the right of Dr. Grant vested in the State of Bihar. On March 25, 1952 when the Collector made an award under S. 11, the only persons interested in the award were Dr. Grant and the members of the village community, but the title of Dr. Grant in the land notified for acquisition stood, by operation of the Bihar Land Reforms Act, transferred as from May 22, 1952 to the State of Bihar. A dispute then arose between the State Government and Dr. Grant "as to the persons to whom" compensation was payable. The State had no right to the compensation payable for the land under a title existing before the date of the award of the Collector, and no application for reference could be made by the State, as a person interested within the meaning of S. 18 (1). The title of the State to receive compensation arose only when in consequence of the notification under S. 3 of the Bihar Land Reforms Act, the title of Dr. Grant to the Estate was divested16. An award by the Collector is strictly speaking an offer made to the person interested in the land notified for acquisition: the latter may accept the offer, but is not bound to accept it. He may ask for a reference to the Court for adjudication of his claim for adequate compensation. The person interested may even accept the compensation under protest as to the sufficiency of the amount and ask for a reference. It is also open to the Government, even after the award is made, but before possession is taken, to withdraw from acquisition of any land in exercise of the powers conferred by S. 48 of the Land Acquisition Act. It is, therefore, not the award of the Collector which is the source of the right to compensation; the award quantifies the offer of the appropriate Government, which is made because the Government has taken over, or intends to take the land of the owner under the authority conferred by the Land Acquisition Act17. The right of the State of Bihar arose on May 22, 1952 when the title to the land vested in it by virtue of the notification issued under the Bihar Land Reforms Act. There is nothing in the Land Acquisition Act which prohibits the Collector from making a reference under S. 30 for determination of the title of the person who has since the date of the award acquired a right to the compensation. If after a reference is made to the Court the person interested dies and his title devolves upon another person, because of inheritance, succession, insolvency, forfeiture, compulsory winding up or other form of statutory transfer, it would be open to the party upon whom the title has devolved to prosecute the claim which the person from whom the title has devolved could have prosecutedThis contention stands refuted by the plain terms of S. 30.The Collector is not authorised to decide finally the conflicting rights of the persons interested in the amount of compensation: he is primarily concerned with the acquisition of the land. In determining the amount of compensation which may be offered, he has, it is true, to apportion the amount of compensation between the persons known or believed to be interested in the land, of whom, or of whose claims, he has information, whether or not they have appeared before him. But the scheme of apportionment by the Collector does not finally determine the rights of the persons interested in the amount of compensation: the award is only conclusive between the Collector and the persons interested and not among the persons interested. The Collector has no power to finally adjudicate upon the title to compensation: that dispute has to be decided either in a reference under S. 18 or under S. 30 or in a separate suit. Payment of compensation, therefore, under S. 31 to the person declared by the award to be entitled thereto discharges the State or its liability to pay compensation (Subject to any modification by the Court), leaving it open to the claimant to compensation to agitate his right in a reference under S. 30 or by a separate suit20. The dispute between the State of Bihar and Dr. Grant has been expressly referred by the Collector to the Court for decision. Under the Bihar Land Reforms Act, the title of Dr. Grant to the land notified for acquisition became vested in the State, and, therefore, the right to compensation for the land acquired devolved upon the State. A dispute between Dr. Grant and the State as to their conflicting claims to the compensation money was clearly a dispute which could be referred under S. 30 of the Land Acquisition Act to the Court and was in fact referred to the Court. We are unable to agree with counsel for Dr. Grant that the reference made by the Collector under S. 30 was incompetent, because the State was not interested in the compensation money on the date when the award was made. The right of the State of Bihar has undoubtedly arisen after the award was made, but once the title which was originally vested in Dr. Grant stood statutorily transferred to the State, it was open to the State to claim a reference, not because the State was a person interested in the compensation money before the date of the award, but because of the right which has arisen since the award was made.