Collector Land Acquisition vs 3rd Additional District Judge and Others

V.K. Jhanji, J.—This revision petition is directed against order dated 16th May, 2001, passed by 3rd Additional District Judge, Srinagar,

whereby the objection raised by the judgment debtor to the execution has been dismissed.

In brief, facts are that an area of land, measuring 19 kanals and 3 marlas, situated at Rawalpora, Tehsil Budgam, was acquired for public

purposes, namely, construction of building for Geological Survey of India. Vide order dated 16th August, 1971, the Collector Land Acquisition,

Srinagar, awarded compensation of the land at the rate of Rs. 7,800/- per kanal and solatium at the rate of 15%. Interest on the compensation

amount was not awarded, as at the time of the award the possession of the land was with the land owners. Compensation as awarded was

disbursed except in respect of land measuring 5 kanals and 11 marlas as there was a dispute inter so between the respondents 3 to 5 and their

predecessor-in-interest with regard to the apportionment of compensation. The Collector referred the dispute to the court for adjudication of title

and apportionment of compensation thereof between the interested persons. Alongwith the reference, he sent a copy of the award as well as order

dated 24th May, 1972 and Revenue Deposit Refund Bill for Rs. 44,677.50 in favour of the District and Sessions Judge, Srinagar which was

payable on demand either to the District and Sessions Judge, Srinagar or to any one as per his order. Rs. 44,677.50 is in regard to the

compensation of 5 kanals and 11 marlas acquired for Geological Survey of India and payable to the concerned owners who shall be entitled to

receive the same under law and for which reference was sent to the court for proper adjudication. The Reference Court Decided the Reference

and held applicants 4 to 7 entitled to receive the compensation. The order of Reference Court was challenged before this Court. This Court set-

aside the order and referred the matter again to the Reference Court for re-determination of the issues. The record shows that the trial of the

reference continued till an order came to be passed on 8.11.1997 on the basis of the compromise arrived at between the parties. The reference

Court, while disposing of the case, also directed the Collector, Land Acquisition to pay interest to the claimants u/s 35 of the State Land

Acquisition Act No. X of 1990 at the rate of 6% for the first year and after taking of possession at the rate of 10% till the amount is realised.

When the order was sought to be executed against the Collector with regard to the amount of interest awarded by the Reference Court, the

Collector filed objections u/s 47 of the CPC on the ground that alongwith the reference a Revenue Deposit Refund Bill for an amount of Rs.

44,677.50/- was sent to the court for payment as back as on 31st July, 1972 and so the awarding of interest at the rate of 6% and 10% is without

jurisdiction and nullity in the eye of law. The Collector also stated that with the sending of Revenue Deposit Refund Bill in favour of the District and

Sessions Judge, Srinagar, the award stood satisfied and no execution proceedings could be carried out against the Collector. The Claimants filed

reply to the objections and stated that they are entitled to the interest as the amount had not been deposited by the Collector, as provided u/s 32 of

the State Land Acquisition Act, 1990 (1934 AD) (hereinafter for short referred to as 'the Act'). The learned District Judge vide the impugned

order held that merely by filing the Revenue Deposit Refund Bill and not depositing the actual amount, as was required under the law, the collector

cannot be deemed to have discharged the liability to deposit the amount of compensation in the court at the time of making the reference. The

learned District Judge has held that the Reference Court was fully justified in awarding the interest. Hence the present revision petition by the

Collector.

Learned counsel appearing on behalf of the petitioner has contended that the order of the Reference Court is totally without jurisdiction

inasmuch as the court cannot determine the question which has not been referred to it. He submitted that the court cannot extend the scope of

reference, or question a portion of the award which has become final. He further stated that the Revenue Refund Bill was payable on demand and

was sent alongwith reference in favour of District and Sessions Judge, Srinagar, but the parties concerned to the reference did not apply to the

court for investing the same in some Bank and, because of their own fault, the Collector cannot be held liable to pay interest. He stated that the

learned Executing Court is not correct in saying that the payment by Revenue Refund Bill is not a valid deposit. Learned counsel also cited Urban

Improvement Trust, Jodhpur Vs. Gokul Narain and another, for the proposition that question of nullity with regard to the order passed by the

Reference court can be set-up at any stage including execution.

In answer to these submissions, learned counsel appearing on behalf of the claimants submitted that the learned Executing Court has not

committed any error in finding that the amount had not been deposited, because sending of the Revenue Deposit Refund Bill will not amount to

deposit of money as envisaged u/s 32 of the Act. He further submitted that this Court in exercise of its jurisdiction u/s 115 of the CPC should, be

reluctant to interfere with the order of the trial court whereby discretion has been exercised in granting the interest.

I have heard the learned counsel at length and have carefully gone through the record of this case.

Chapter IV of the Act deals a with the apportionment of compensation. Section 30 of the Act provides that where there are several persons

interested, if such persons agree to the apportionment of the compensation, the particulars of such apportionment shall be specified in the award

and as between such persons the award shall be conclusive evidence of the correctness of the apportionment. In case there is a dispute as to the

apportionment, Section 31 provides that when the amount of compensation has been settled u/s 11, if any dispute arises as to the apportionment of

the same or any part thereof or as to the persons to whom the same or any part thereof is payable, the Collector may refer such dispute to the

decision of the Court. A reading of Section 31 of the Act makes it very clear that the jurisdiction of the Reference Court in a reference under this

section is confined to the dispute as to the apportionment of the amount of compensation or any part thereof or as to the persons to whom the

same or any part thereof is payable and it is that dispute which is referred to the decision of the court. The Reference Court has not to go into the

question in regard to the adequacy of the total amount awarded. In other words, on a reference under this section, the court cannot determine a

question which has not been referred to it and the court has to confine itself to the consideration of the dispute that is expressly referred to it by the

Collector. The dispute in regard to the adequacy of the amount awarded is beyond the reference to be determined u/s 31 of the Act.

In Mohammad Anwar Hasan Vs. Land Acquisition Officer and Others, it was held that court on a reference u/s 30 cannot determine a question

which has not been referred to it. It has no power to order the Collector to pay or deposit the amount of interest payable u/s 34.

In Special Land Acquisition Officer Vs. Puttaiah and others, , their lordships of the Supreme Court opined that on making award u/s 11, the

Collector is enjoined to make a reference u/s 30, if there is any dispute as to the person entitled to receive the compensation and the

apportionment thereof. On making such reference, the Collector is further enjoined u/s 31 to deposit the amount of the compensation in the court

to which reference u/s 18 would be submitted. In other words, on deposit of the amount into the court and pending decision of the reference, the

liability of the State to pay interest thereon ceased with effect from the date of the deposit. Their lordships observed that the Reference Court

cannot award interest on the compensation amount during the pendency of the reference.

Faced with this situation, learned counsel appearing on behalf of the claimants contended that the liability of the State to pay interest would

cease with effect from the date of the deposit of the compensation amount, but in this case, as found by the Executing Court, the deposit has not

been made and, therefore, the Executing Court committed no illegality in awarding interest.

On the other hand, learned counsel appearing on behalf of the Collector stated that the payment by Revenue Deposit Refund bill was a valid

deposit and the finding of the Executing Court to the contrary is totally unsustainable.

It is not in dispute that alongwith the reference, the Collector sent the Revenue Deposit Refund Bill favouring District and Sessions Judge,

Srinagar. The amount of Rs. 44,677.50/- mentioned therein was payable on demand.

Section 5 of the Negotiable Instruments Act, 1981 defines 'bill of exchange' to be an instrument in writing containing an unconditional order, signed

by the maker, directing a certain person to pay a certain sum of money only, or to the order of, a certain person or to the bearer of the instrument.

Section 6 states that a 'cheque' is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.

Section 19 states that a 'promisory note' or 'bill of exchange', in which no time for payment is specified, and a 'cheque', are payable on demand.

In Ashok Yeshwant Badave Vs. Surendra Madhavrao Nighojakar and Another, , their lordships of the Supreme Court, while interpreting

Sections 5 and 6 of the Negotiable Instruments Act, 1981, held as under:

From Sections 5 and 6 it is clear that bill of exchange is a negotiable instrument in writing, containing an instruction to a third party to pay a stated

sum of money at a designated future date or on demand. On the other hand a cheque is also bill of exchange but it is drawn on a banker and

payable on demand. A bill of exchange even through drawn on a banker, if it is not payable on demand, it is not a cheque. 'post-dated' cheque is

not payable till the date which is shown thereon arrives and will become cheque on the said date and prior to that date same remains bill of

exchange.

In K. Saraswathy alias K. Kalpana (Dead) by Lrs. Vs. P.S.S. Somasundaram Chettiar, , the Supreme Court held that payment by cheque is a

valid deposit. In Damadilal and Others Vs. Parashram and Others, , the Supreme court held that a cheque sent by a tenant to the landlord towards

payment of arrears of rent is a valid tender.

In Fateh Singh Vs. Land Acquisition Collector and Others, , a bench of the Delhi High Court, after referring to the judgments of various High

Courts, held that a cheque being a negotiable instrument, unless denied, is a payment. In S.M.A. Somassundaram Madalia v. District Collector

AIR 1967 AP 125, petitione's land was acquired under the Act. The Land Acquisition Officer awarded compensation to the petitioner. The

petitioner received the bill drawn on the treasury for the amount payable to him without protest on the day the award was announced. Later on, in

the evening, the petitioner appeared before the Land Acquisition Officer and filed a petition disputing the amount of compensation awarded to him

and requiring the matter to be referred for determination by the court. The Land Acquisition Officer rejected the application under the proviso to

Section 31(2) of the Act, holding that the petitioner having received the bill amount without protest, was not entitled to make an application for

referring the case to the Court. The contention of the petitioner that the receipt of bill did not amount to receiving the amount was rejected, holding

that the receipt of bill, representing the amount payable, was tantamount to receiving the amount, further observing that the protest must necessarily

be made to the Land Acquisition Officer who tenders payment of compensation and by necessary implication at the time when he so tenders the

payment.

In the present case, the Revenue Deposit Refund Bill, being a negotiable instrument, was payable on demand and with the deposit of the same

favouring District and Sessions Judge, Srinagar, the Collector stood absolved of his liability to pay the compensation. The deposit was valid as

provided u/s 32 of the Act.

The last question, which requires determination, is whether the order passed by the Executing Court is a nullity. As observed earlier, the

jurisdiction of the court in a reference made by the Collector u/s 31 is confined to the consideration of the dispute that is expressly referred to it by

the Collector and since the adequacy of compensation, or awarding of interest was not a dispute referred to the Reference Court, the order

awarding interest is totally without jurisdiction. In Urban Improvement Trust, Jodhpur Vs. Gokul Narain and another, , the Reference Court by

applying the provisions of the Land Acquisition (Amendment) Act, 1984, awarded solatium, interest and additional amount under Sections 23(2),

28 and 23(1A). It was contended that the order awarding additional benefits has become final and even if the court has wrongly applied the

Amendment Act, it did not lack the inherent jurisdiction. The contention was rejected by their lordships of the Supreme Court. It was held that if

the decree strikes at the jurisdiction of the court or the court lacks jurisdiction, it strikes at the very root of the authority to pass the order or the

decree. Since the Amendment Act 68 of 1984 had no application to the land acquired under the Act, as it was made applicable only to the

pending proceedings, it was held that an order awarding additional benefits was clearly without jurisdiction and, therefore, was a nullity. It was also

said that the finality of the decree can be assailed at any stage, including at the execution, or in a collateral proceedings, since it strikes at the very

jurisdiction and authority of the court.

The facts of the present case are similar to these involved in the case (supra) before the Supreme Court. The Executing Court, while awarding

interest, has certainly gone beyond the scope of the reference and, therefore, the order in this regard, being without jurisdiction, cannot be

sustained.

For the reasons recorded above, this revision petition is allowed. The order of the Executing Court dated 16th May, 2001 is set-aside.

In consequence thereof, the execution application filed by the claimants is dismissed.