Steel Authority of India Ltd. Bhilai Steel Plant Bhilai vs Collector, Durg and Others

P.K. Mishra, J.—The present petition under Article 227 of the Constitution of India has been preferred by the Steel Authority of India Limited, Bhilai Steel Plant, for whose benefit subject land belonging to one late Shri Mahadeo Prasad Tiwari, now represented by his legal heir respondent No.3 Smt. Geeta Tiwari was acquired. Prayer has been made in the writ petition for affording an opportunity of hearing in the proceedings pertaining to ascertainment of actual amount payable respondent No.3. Facts of the case, in short, are that notification u/s 4 of the Land Acquisition Act, 1894 (henceforth ''the Act, 1894'') was published on 20-5-1949 while the notification u/s 6 of the Act, 1894 was published on 25-1-1956. The Land Acquisition Officer assessed the compensation at Rs. 3,582.60 Paisa, which was increased to Rs.28,356.25 Paisa by an order passed in a reference by the learned Additional District Judge. The original claimant Mahadeo Prasad Tiwari preferred an appeal bearing First Appeal No.124/ 1960 in the High Court seeking further amount of Rs.15,874.37 Paisa. This appeal was partly allowed vide order dated 5-9-1969 and some additional amount was allowed together with interest @ 6% per annum from, the date on which possession was taken over to the date of payment. Prayer for correction of the order dated 5-9-1969 was made in M.C.C. No.413/1975. The said M.C.C. was allowed and it was directed that the amount earlier enhanced by the Additional District Judge shall also carry interest @ 6% from the date of taking over possession to the date of payment.

In execution proceeding initiated by the claimant, the 2nd Additional District Judge passed an order on 30-9-1977 (Annexure P-3) directing the parties to submit an agreed calculation of the amount after calculating the interest in terms of the order passed by the High Court. In this order Annexure P-3, learned counsel for the Bhilai Steel Plant also entered appearance and assisted the Court, which is recorded in paragraph 3 of the order.

The claimant again preferred Miscellaneous Appeal No.288/1977 in the High Court challenging the order dated 30-9-1977 passed by the executing Court. It needs to be referred that in the meanwhile, proceeding challenging the acquisition was also going on and the same was ultimately quashed in Vishnu Prasad Sharma and Others Vs. State of Madhya Pradesh and Others, and The State of Madhya Pradesh and Others Vs. Vishnu Prasad Sharma and Others, . This led to passing of a Validation Act. Miscellaneous Appeal No.288/1977 was ultimately dismissed inter alia holding that the order passed by the executing Court on 30-9-1977 does not call for any interference and that interest on the award amount is payable in terms of sub-section (3) of Section 4 of the Validation Act from the date following 3 years immediately after the publication of notices under sub-section (1) of Section 4 of the principal Act and upto the date of tender of compensation awarded by the Collector u/s 11 or paid u/s 31 of the principal Act. The interest is to be calculated upon the market value as determined u/s 23 of the principal Act. (Paragraph 5 of the order dated 25-8-1983 in Miscellaneous Appeal No.288/1977).

The executing Court passed an order on 19-12-1986 (Annexure P-5) holding that as against the amount of Rs.36,267.75 Paisa for which the claimant is entitled, he has already received amount of Rs.44,987.91 Paisa. However, the executing Court allowed the claimant/decree holder to retain the access amount. Challenging this order, the claimant again preferred Miscellaneous Appeal No.149/1987 in the High Court, which was allowed by an order annexed as Annexure P-6 in the writ petition. The High Court, while setting aside the order, remanded back the matter to the executing Court for calculation of interest as per amended provision of Section 34 of the Act, 1894.

It appears that the claimant continued the execution by presenting a calculation that he is entitled to an amount of Rs.23,06,795.63 Paisa (as mentioned in paragraph 7 of the application presented by the petitioner Bhilai Steel Plant u/s 151 of the CPC -- Annexure P-8) and the executing Court has also issued warrant of attachment against the judgment-debtor, i.e., the present respondents No.1 and 2, the Collector, Durg and the Land Acquisition officer, Durg, respectively.

According to Dr. N. K. Shukla, learned Senior Advocate appearing for the petitioner, the land having been acquired for the benefit of the Bhilai Steel Plant and it is mandatory for the State to recover any amount of compensation paid to the claimant, from the petitioner, the petitioner is a necessary party and that the executing Court should have permitted the petitioner to assist in calculating the true amount for which the claimant is entitled, if any. He would submit that the petitioner is only seeking an opportunity of hearing before the executing Court in this petition under Article 227 of the Constitution of India.

Smt. Fouzia Mirza, learned counsel appearing for respondent No.3 and Shri Ajay Dwivedi, learned Deputy Government Advocate appearing for the State/respondents No.1 and 2 have opposed the prayer made by learned Senior Advocate for the petitioner. They would submit that the order-sheets of the trial Court recorded from the year 1997 to 2010 would clearly demonstrate that learned counsel for the Bhilai Steel Plant was regularly appearing before the executing Court, therefore, it cannot be said that the petitioner has not been heard before calculating the amount of compensation. They would submit that calculation of interest under the amended provisions of Sections 34 and 28 of the Act, 1894 has already been decided by the High Court in its order passed in Miscellaneous Appeal No.149/1987 (Annexure P-6), therefore, petitioner''s assistance is not required before the executing Court. It is also contended that the application before the executing Court and the present petition have been submitted to protract the execution proceeding, which is pending for decades. Reliance has been placed by Smt. Fouzia Mirza, learned counsel for respondent No.3 on Mahuva Municipality, Mahuva vs. Mehta Kiritkumar Umedchand and others, AIR 1973 Guj 97, Kanyaka Parameswari Devasthanam and Charities Vs. Srila Sri Ambalawana Pandara Sannadhi and Another, Neyveli Lignite Corporation Ltd. Vs. Rangaswamy and Others, , State of Orissa through the Land Acquisition Collector, Sambalpur vs. Amarandra Pratap Singh and another, AIR 1967 Orissa 180, Vasudev Dhanjibhai Modi Vs. Rajabhai Abdul Rehman and Others, Santosh Kumar and Others Vs. Central Warehousing Corporation and Another, and Jaya Chandra Mohapatra Vs. Land Acquisition Officer, Rayagada,

I have heard learned counsel appearing for the parties at length and perused the record including the order-sheets of the executing Court. Undisputedly, the land was acquired for the benefit of the petitioner Steel Authority of India Limited, Bhilai Steel Plant, Bhilai. When land is acquired for any beneficiary other than the State, the amount of compensation is required to be deposited by the said beneficiary, though the amount is initially paid by the State Government in course of land acquisition proceeding or before the executing Court. It is probably because of this statutory position, learned counsel for the Bhilai Steel Plant was allowed to assist the executing Court as mentioned in paragraph 9 of the written submission filed by respondent No.3. Respondent No.3 has also filed a document Annexure D-4 along with the written submission, which is a letter written by the petitioner to the Additional Collector on 8-7-2010. In paragraph 2 of the communication, it is mentioned that the Additional Collector, Durg, by his letter dated 5-5-2005 has directed the Bhilai Steel Plant to deposit sum of Rs.10,97,742!-. Thus, it is established that the State, on the one hand is not contesting before the executing Court and on the other hand, the amount is sought to be recovered from the petitioner.

The judgments relied by learned counsel for respondent No.3 are to the effect that the beneficiary is not a person interest and that the beneficiary cannot challenge the amount of compensation by filing a writ petition or that the executing Court cannot go behind the decree, however, in the present case, the facts are quite different. The beneficiary is neither challenging the execution nor is contesting the entitlement of the claimant to receive compensation in terms of the award and the order passed by the High Court. Its only contention is that the claimant has not presented true calculation of the amount of interest in terms of statutory provision keeping in view the earlier payment made by the Bhilai Steel Plant. Thus, the contention of the petitioner is for giving opportunity of hearing to submit true calculation of the amount of interest for which respondent No.3 is entitled, if any.

The legal position as to the right of the beneficiary at whose instance and at whose cost the land is acquired is no longer res integra in view of the latest judgment of the Hon''ble Supreme Court in Delhi Development Authority Vs. Bhola Nath Sharma (Dead) by L.Rs. and Others, . While holding that such beneficiary is a person interested" within the meaning of Section 3(b) of the Act, 1894 and, therefore, entitled to participate in proceeding before the Land Acquisition Officer as also before the reference Court, the Hon''ble Supreme Court, after following several of its earlier judgments, has held in paragraphs 32, 42 and 43 of Delhi Development Authority vs. Bhola Nath Sharma (Dead) By L.Rs. and others (supra) thus:

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 view of the above discussion, we hold that:

(i) DDA falls within the definition of the expressions local authority" [Section 3(aa) and "person interested" [Section 3(b)] of the Act;

(ii) DDA was entitled to participate in the proceedings held before the Land Acquisition Collector;

(iii) the failure of the Land Acquisition Collector to issue notice to DDA and give an opportunity to it to adduce evidence for the purpose of determining the amount of compensation payable to the landowners was fatal to the award passed by him; (iv) DDA was entitled to notice and opportunity to adduce evidence before the Reference Court could enhance market value of the acquired land entitling the respondents to claim higher compensation and, as no notice or opportunity was given to DDA by the Reference Court, the judgments rendered by it are liable to be treated as nullity;

(v) the Division Bench of the High Court also committed serious error by further enhancing the amount of compensation payable to the contesting respondents without requiring them to implead DDA as party- respondent so as to enable it to contest their prayer for grant of higher compensation.

In the result, the appeals are allowed. The impugned judgment of the Division Bench of the High Court as also the judgments of the Reference Court are set aside and the matters are remitted to the Reference Court for deciding the two references 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 the judgment of the High Court and this judgment.

In view of the law settled by the Hon''ble Supreme Court relating to the entitlement of the beneficiary, i.e., the petitioner in the present case, to participate in the proceeding before the Land Acquisition Officer as well as before the executing Court, which necessarily include the executing Court of the reference Court, it is held that the petitioner is entitled to be heard before the learned Court below, i.e., the executing Court and is also entitled to raise its objection and to submit calculation questioning the calculation made by the claimant regarding the amount of interest for which the said claimant/respondent No.3 is entitled. The executing Court is, therefore, directed to decide the execution after giving proper opportunity of hearing to the petitioner. However, keeping in view the long pendency of the execution proceeding, it is directed that the executing Court shall do well to dispose of the execution proceeding as early as possible preferably within period of four months from the date of receipt of certified copy of this order. The writ petition stands allowed.