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Judgment
Heard, Mrs. Sweety Toppo, learned counsel for the appellants and Mr. Gautam Kumar, learned counsel for the Respondent-State.
The appellants-NHAI have preferred these First Appeals against the judgment and Award dated 12.02.2009 passed by Land Acquisition Judge,
Dhanbad in L.A. Ref. Cases No.24/2004, 25/2004, 28/2004, 26/2004 and 23/2004 respectively.
The main ground of challenging the award by the appellants is that these appellants were not made party-respondents in the learned Court below and
the learned Court below without providing any opportunity of hearing to these appellants, has passed the impugned Award. By an order dated
29.01.2014 the application of the appellants seeking leave to contest and challenge the award was allowed and the leave was granted to the
appellants.
Mr. Gautam Kumar, learned counsel appearing for the respondent-State fairly admitted that these appellants were not heard by the learned Court
below before passing of the said award.
Learned counsel for the appellants relied upon a judgment passed by the Hon’ble Apex Court in the Case of Delhi Development Authority vs.
Bhola Nath Sharma (Dead) By Lrs. and Others as reported in (2011) 2 SCC 5.4 Relevant Paragraph Nos. 32, 33, 34 and 38 of the said judgment are
quoted herein below:-
Section 50(2) represents statutory embodiment of one of the facets of the rules of natural justice. The object underlying this section is to afford an
opportunity to the local authority or company to participate in the proceedings held before the Collector or the court for determining the amount of
compensation and to show that claim made by the landowner for payment of compensation is legally untenable or unjustified. This is possible only if
the Collector or the court concerned gives notice to the local authority or the company concerned. If notice is not given, the local authority or the
company cannot avail the opportunity envisaged in Section 50(2) to adduce evidence for the purpose of determining the amount of compensation.
Therefore, even though the plain language of that section does not, in terms, cast a duty on the Collector or the court to issue notice to the local
authority or the company to appear and adduce evidence, the said requirement has to be read as implicit in the provision, else the same will become
illusory.
In Himalayan Tiles and Marble (P) Ltd. v. Francis Victor Coutinho15 , this Court, while examining the scope of Section 18 of the Act, referred to
the definition of the expression “person interested†contained in Section 3(b) of the Act and some of the judicial precedents and observed: (SCC
p. 228, para 14)
“14. Thus, the preponderance of judicial opinion seems to favour the view that the definition of ‘person interested’ must be
liberally construed 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 thus 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 it that the
compensation was far too heavy having regard to the nature and extent of the land.†(emphasis supplied)
In Union of India v. District Judge, Udhampur16 , this Court held that the Union of India for whose benefit the land was acquired was a
“person interested†in the fixation of the proper and just compensation and was entitled to challenge the determination made by the competent
authority/court.
The Constitution Bench also considered the nature of remedies available to the local authority and observed: (Gyan Devi case-4, SCC pp. 342-44,
paras 19-22)
“19. We would now revert to the question regarding the legal remedies that are available to a local authority which feels aggrieved by
the determination of the amount of compensation by the Collector or by the Reference Court. In this context, it may be stated that the
limitation placed by the proviso on the right conferred by Section 50(2) of the LA Act cannot be so construed as to deprive the local
authority which feels aggrieved by the determination of the amount of compensation by the Collector or by the Reference Court to invoke
the remedy under Article 226 of the Constitution as well as the remedies available under the LA Act. The proviso to Section 50(2) only takes
away the remedy of a reference under Section 18 of the LA Act. Examining this question in the context of the proceedings before the
Collector we can envisage the following situations:
(i) No notice was given to the local authority under sub-section (2) of Section 50 of the LA Act and as a result the local authority could not
appear before the Collector to adduce evidence;
(ii) Notice was served on the local authority and in response to said notice the local authority appeared before the Collector; and
(iii) Notice was served on the local authority but in spite of service of such notice the local authority failed to appear and adduce evidence
before the Collector.
In a case where no notice is given to the local authority the position of the local authority is not different from that of the Municipal
Corporation in Neelagangabai v. State of Karnataka17. In that case there was an express provision in Section 20 of LA Act as modified by
Land Acquisition (Mysore Extension Amendment) Act, 1961 providing for service of notice on the person or local authority for whom the
acquisition is made. On a construction of Section 50(2) we have found that service of such a notice is implicit in the right conferred under
Section 50(2) of the LA Act. Since the failure to give a notice would result in denial of the right conferred on the local authority under
Section 50(2) it would be open to the local authority to invoke the jurisdiction of the High Court under Article 226 of the Constitution to
challenge the award made by the Collector as was done in Neelagangabai case17. In a case where notice has been served on the local
authority and it has appeared before the Collector the local authority may feel aggrieved on account of it being denied opportunity to
adduce evidence or the evidence adduced by it having not been considered by the Collector while making the award or the award being
vitiated by mala fides. Since the amount of the compensation is to be paid by the local authority and it has an interest in the determination of
the said amount, which has been given recognition in Section 50(2) of the LA Act, the local authority would be a person aggrieved who can
invoke the jurisdiction of the High Court under Article 226 of the Constitution to assail the award in spite of the proviso precluding the
local authority from seeking a reference. …
We may now come to the stage of the proceedings before the court in a reference under Section 18 of the LA Act made at the instance of
a person having interest in the land being acquired. At this stage also Section 50(2) of the LA Act envisages that the local authority has a
right to appear and adduce evidence before the court. This right is independent of the right that is available to the local authority to appear
and adduce evidence before the Collector. Even though the local authority had failed to appear before the Collector in spite of notice or
had appeared in response to notice and had adduced evidence, the local authority may consider it necessary to adduce evidence to rebut
the evidence adduced by the person who has sought the reference and to defend the award made by the Collector. Failure to give notice at
this stage would result in denial of the said right of the local authority. Before we consider the remedy that is available for seeking redress
against the denial of this right we may examine whether the local authority has a right to be impleaded as a party in the proceedings before
the Reference Court. That raises the question whether the local authority can be regarded as a necessary or a proper party. The law is well
settled that a necessary party is one without whom no order can be made effectively and a proper party is one in whose absence an effective
order can be made but whose presence is necessary for a complete and final decision of the question involved in the proceeding. (See Udit
Narain Singh Malpaharia v. Board of Revenue18.) A local authority for whom land is being acquired has a right to participate in the
acquisition proceedings in the matter of determination of the amount of compensation while they are pending before the Collector and to
adduce evidence in the said proceedings. While it is precluded from seeking a reference against the award of the Collector it can defend the
award and oppose the enhancement of the amount of compensation sought before the Reference Court by the person interested in the land.
Moreover the local authority has a right to appear and adduce evidence before the Reference Court. Having regard to the aforesaid
circumstances, we are of the opinion that the presence of the local authority is necessary for the decision of the question involved in the
proceedings before the Reference Court and it is a proper party in the proceedings. The local authority is, therefore, entitled to be
impleaded as a party in the proceedings before the Reference Court.
In case the amount of compensation has been enhanced by the court and no appeal is filed by the Government the local authority if
adversely affected by such enhancement may file an appeal with the leave of the court. This right of the local authority does not depend on
its being impleaded as a party in the proceedings before the Reference Court. Even if the local authority is not impleaded as a party before
the Reference Court it can file an appeal against the award of the Reference Court in the High Court after obtaining leave if it is
prejudicially affected by the award. In case the Government files an appeal against the enhancement of the award the local authority is
entitled to support the said appeal and get itself impleaded as a party. When the person having an interest in the land files an appeal in the
High Court against the award of the Reference Court and seeks enhancement of the amount of compensation the local authority should be
impleaded as a party in the said appeal and it is entitled to be served with the notice of the said appeal so that it can defend the award of
the Reference Court and oppose enhancement of the amount of compensation before the High Court. The same will be the situation in case
of an appeal to this Court from the decision of the High Court.â€
By way of relying upon the aforesaid judgment, learned counsel for the appellants submits that the case of the appellants are fully covered by the said
judgment. She further submits that the law is well settled that a necessary party is one without whom no order can be made effectively and a proper
party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision of the question
involved in the proceeding.
In the result, the appeals are allowed. The impugned judgment passed by Land Acquisition Judge, Dhanbad in L.A. Case No.24 of 2004 and other
aforesaid analogous cases are set-aside and the matters are remitted to the Reference Court/Land Acquisition Judge, Dhanbad for deciding the issue
afresh after giving opportunity of hearing to the parties, which shall necessarily include opportunity to adduce evidence for the purpose of determining
the amount of compensation. The Reference Court shall decide the matter without being influenced by the observations contained in this Judgment.
Since the matters relate to payment of compensation to the land-losers, the Court below shall decide the matter as early as possible but not later than 9
months from the date of receipt/production of a copy of this order.
It is made clear that if the amount of compensation determined by the Court below has already been paid to the respondents or their predecessors,
then they shall not be required to refund the same.
With the aforesaid directions and observations, these appeals are allowed. If there is any petition pending in these appeals the same are also stand
disposed of.
Office is directed to send back the Lower Court Records forthwith along with a copy of this judgment to the learned Court below.