The State of Madras vs B.V. Subramania Iyer

Anantanarayanan, J.—The question involved n this second appeal is a simple but interesting one whether, when the officer acquiring property under the Land Acquisition Act (Collector) refers a dispute to the decision of the civil court u/s 30 of the Act, firstly, he should he should as the party respondent in the records of the civil court, and secondly whether, in the in any event, costs could be awarded against him. Actually in the matter before me, there appears to have been an ample justification for the officer to make the reference u/s 30 though admittedly there was only one claimant in the case (B. V. Subramania Aiyar). The officer seems to have made the reference because he thought that the title of the claimant was not clearly established by the documentary evidence before him. and that he could not decide, upon that evidence whether the claimant was the true and only person entitled to the compensation amount. The justification I am referred to learned principal Subordinate Judge he actual held that the evidence in favour of the title of the claimant was not satisfactory and ordered "the compensation amount will therefore lie in court deposit "

The matter went up in appeal to the learned Additional District Judge of Salem and it is he who held, after a lengthy analysis of the documentary evidence, that the benamidars in whose some of the plots were purchased were not true owners of these properties and that claimant (appellant) was the real owner entitled to compensation amount with the usual solatim. Throughout, the referring officer (Collector) was shown as a party respondent in the record. The learned Subordinate judge awarded costs against the referring officer, and that is the reason why this second appeal has been preferred.

I think it is very clear that the judgment of the appellate Court in this respect cannot be sustained. It is no doubt true that costs are awarded in the exercise of the discretion vested in the Court. But that discretion has to be exercised in a judicial manner, and not in violation of any fundamental judicial concept. In Sanjiva Rao''s Land Acquisition and Compensation, 4th Edn. (by Singal) the learned author observed at page 527, that in the context of a reference u/s 30 "the Government is nether interested, nor is it a proper party to an apportionment proceeding but only the contesting claimant are." Again at page 529 of the same edition, the learned author refers to costs in the proceedings, and points out that in England the usual practice is that the acquiring body is not liable for costs incurred by parties with regard to establishing their title, and that in India also the rule is the same.

The learned council for the respondent (claimant) urges that the reference itself as incompetent, because there was really no "dispute" within the meaning of the section 30; the claimant alone made the actual claim and not the others benamidars. Ido not think that this view is at all suitable. The word "dispute" is used in the context of that section in a wide and not a literal sense, and implies any controversy as to title, whether as between the actual claimants, or as appearing from the documents made available by the Goverment. It is obvious that when the government exercises his powers of eminent domain and acquires property, public funds have to be utilised for the payment of compensation to the true owner and not merely to any claimant who cares to appears on the screen. The Government have a special responsibility in this regard. and cannot later take refuge behind the pretext that the compensation was pain to the claimant who actually appeared while others did not appear. So long as that is the situation the acquiring officer has aright to make such a reference, even if a dispute or controversy as to title arises on the documents before him. He cannot be made liable for costs, and it is the party who has to bear the costs incurred in establishing the title of the party to receive the compensation amount.

According, I allow the second the appeal and direct that award of costs against the Government by the learned Additional District Judge be set aside. The parties will bear their costs here. No leave. Appeal allowed.