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Judgment
Natarajan, J.—These writ Petitions and Writ Appeals have been filed by Messrs. Indian Rare Earths Limited, a company wholly owned by
the Government of India, for seeking reliefs in the awards passed by the Subordinate Judge of Padmanabhapuram in references made to him u/s
18 of the Land Acquisition Act. The writ petitions have been filed for issue of Writ of certiorari to quash the awards passed by the Subordinate
Judge in forty-nine original petitions taken on file u/s 18 of'' the Land Acquisition Act (hereinafter referred to as the Act.) The writ appeals have
been filed against the orders passed by a learned single Judge of this Court in twelve cases vacating earlier orders of stay relating to deposit of
enhanced compensation amounts.
The writ petitions and the writ appeals have come to be filed in the following circumstances: The petitioner company is a public limited company
incorporated under the Indian Companies Act, 1913 and wholly owned by the Government of India, Its main objects are to process beach raw
sands for producing rare minerals like limenite, monazite, zireon, rutile, sillimanite, etc. required for the purposes of atomic energy. The raw sands
have to be obtained from deposits from inland and coastal beaches. After obtaining technical advice, certain strips of land in villages like
Manavalakurchi and Kolachal were. identified near the sea-coast of Kanyakumari District as the area where the required quantities of rare earths
are likely to be found for large scale exploitation. The extent of land that was identified is 60.05 acres. The lands were in the possession of several
individuals. For acquiring the lands, the petitioner requested the State Government to take acquisition proceedings under Part II of the Land
Acquisition Act. The State Government, which was empowered by the Government of India to take the acquisition proceedings on its behalf,
agreed to acquire the lands and issued a notification according sanction for acquisition under Part II of the Act by contributing a token sum from
the public revenue. A notification u/s 4(1) of the Act was published in the Government Gazette. As the lands were urgently required for exploitation
of the minerals, the State Government conceded the need for expediency and exercised its powers u/s 17 and dispensed with the provisions of
Section 5-A of the Act. As a result of such dispensation, the petitioner took possession of the lands on two dates, viz., 21st July, 1979 and 14th
November, 1981.
The Land Acquisition Officer, after taking into consideration all the relevant factors computed the market value of the lands at certain rates and
fixed the total amount payable to the several owners of the lands as well as solatium of 15 per cent and also the compensation amount that should
be paid for trees, etc. The petitioner, in compliance with the awards passed by the Land Acquisition Officer, remitted the compensation amounts
together with the solatium etc., payable to each land owner.
As the owners of the lands were not agreeable to the rate of compensation fixed by the Land Acquisition Officer and wanted references u/s 18
of the Act to be made to the Civil Court, the Land Acquisition Officer referred the cases of all the land owners to the Subordinate Judge of
Padmanabhapuram. The Subordinate Judge passed orders in the several references in favour of the land owners and enhanced the compensation
amount payable to them. Consequently as against a compensation amount of Rs. 21,61,642.50 determined by the Land Acquisition Officer, the
Subordinate Judge enhanced the compensation amount to Rs. 68,81,268.65p. But, while conducting the enquiries on the references, the
Subordinate Judge had neither issued notice to the petitioner, nor afforded it any opportunity to defend the claim of the land owners for payment of
enhanced compensation.
Against the awards for enhanced compensation, passed by the Subordinate Judge, the State Government did not prefer appeals to this Court.
The petitioner, therefore filed writ petitions for mandamus being issued to the State Government directing them to file appeals to the High Court
against the awards passed by the Subordinate Judge. The writ petitions were admitted and interim stay of execution of the awards was granted
subject to the condition that the petitioner deposited 50 per cent of the compensation amount in court and furnished Bank guarantee for the
balance of compensation amount.
As the petitioner failed to deposit 50 per cent of the compensation amount, the interim stay was vacated. Against the orders of the single Judge
vacating the stay, the petitioner filed writ appeals. When the writ appeals were pending, the Government Pleader represented that the State had
since filed appeals to the High Court against the awards passed by the Subordinate Judge. In view of that representation, the writ appeals were
dismissed and the parties were directed to maintain status quo.
In spite of the State having filed appeals against the awards, the petitioner has filed these writ petitions for obtaining writs of certiorari to quash
the awards passed by the Subordinate Judge.
The main ground on which the petitioner assails the validity and enforceability of the awards passed by the Subordinate Judge is that even
though the petitioner is an interested party, it has not been issued any notice in the enquiry conducted by the Subordinate Judge in the reference
proceedings u/s 18 of the Act and, as such, the awards contravene the provisions of the Act and also the principles of natural justice. Since,
according to the petitioner, the awards are ab initio void, they should be quashed by this Court by means of writ of certiorari.
While filing the writ petitions, the petitioner had also filed writ miscellaneous petitions and obtained orders of stay of execution of the awards
passed by the Subordinate Judge. In twelve cases the orders of stay have been vacated and it is against those orders the writ appeals have been
filed.
No counter affidavit has been filed by any of the respondents. However, Mr. Srikumaran Nair, Mr. R. Gandhi and Mr. Selvaraj appearing for
the land-owners questioned the maintainability of the writ petitions and also advanced arguments to sustain the awards passed by the Subordinate
Judge. Their arguments were, adopted by the other counsel appearing for the rest of the claimants.
The principal question that falls for consideration in the writ petitions is whether when a land is acquired for a company registered under the
Indian, Companies Act, notice to the said company u/s 20 of the Land Acquisition Act has got to be issued by the civil court before taking up for
enquiry a reference made to it u/s 18 of the Act. Before considering this question, certain preliminary objections raised by the counsel for the land -
owners require mention and consideration.
The first objection raised was that a petition under Article 226 of the Constitution of India cannot be filed against an award of a civil court, to
wit, the court of the Subordinate Judge of Padmanabhapuram in this case. So far as this contention is concerned, it has to be pointed out that a civil
court to which a reference is made u/s 18 of the Act, does not act as a court of plenary jurisdiction in dealing with the reference, but acts only as a
special tribunal. Its powers are not unrestricted nor does it have the power of remand or inherent powers available to a civil court u/s 151 of the
Code of Civil Procedure, but on the other hand, its powers and jurisdiction are restricted by the terms of the reference. Section 19 of the Act sets
out the particulars which should be furnished by the Collector when he makes a reference, u/s 18 for the information of the court. Section 20 to the
terms of which a detailed reference will be made in a later portion of the Judgment, enjoins the court to effect service of notice on the applicant and
all the persons interested in the determination of the references by. it. Section 21 indicates the parameters of the enquiry to be conducted by the
civil court. In. order to understand what the parameters are, we must look to the terms of Sub-Section (1) of Section 18. That sub-Section sets
out that any person interested, if he has not consented to the award, may apply in writing to the Collector requiring him to make a reference to the
court for determination of his objection regarding (i) the measurement of the land, (ii) the amount of the compensation, (iii) the persons to whom the
compensation is payable, and (iv) the manner of apportionment of the compensation among the persons interested. Incidentally, we may point out
here that the last two grounds of objection would, by themselves, give rise to a reference to the civil court by the Collector himself u/s 30 of the
Act. It therefore follows that the scope of enquiry in a reference to a civil court will stand restricted only to the four kinds of objections set out in
Section 18(1). There can be no such restriction on the scope of the enquiry if the court were to deal with a reference u/s 18 as a civil court of
plenary jurisdiction. It can also be appositely pointed out here that Section 22 while laying down that a proceeding arising out of a reference u/s 18
shall take place in open court, also sets out that ""all persons entitled to practise in any civil court in the State shall be entitled to appear, plead and
act (as the case may be) in such a proceeding"". This provision is another pointer to show that a court to which a reference is made u/s 18 does not
act as a civil court and exercise its powers as such, but only acts as a tribunal for determination of the limited questions referred to it for
consideration. One other feature would also throw light on the matter. u/s 18 of the Act, any person interested can move for a reference to the civil
court in respect of the subject - matter of the award. But, if any item in the land acquired is omitted and is not a subject - matter of the award, then
the person or persons interested cannot seek a reference u/s 18, because the left-out item is not a subject - matter of the award. The aggrieved
person in such a case will have to file an independent suit in the civil court. Vide: The State of Bihar and Others Vs. Nemdhari Singh and Others, .
Resort to an independent remedy beofre the civil court for securing compensation for items omitted to be included in the award, would also go to
show that a court to which a reference is made u/s 18 does not act as a civil court, but only acts as a special tribunal. This position has been
conclusively laid down by the Supreme Court in Mohammed Hasnuddin Vs. State of Maharashtra, by holding that the court functioning under the
Land Acquisition Act is a tribunal of special jurisdiction, and not a civil court. In such circumstances, the contention that the extraordinary
jurisdiction of the High Court under Article 226 of the Constitution cannot be invoked, to quash an award passed on a reference u/s 18 of the Act,
does not have any merit in it.
Mr. Thyagarajan, Learned Counsel for the petitioner submitted that even if it is held that the Sub Court, Padmanabhapuram had acted as a civil
court, and not as a special tribunal under the Act, the petitioner is entitled to seek the quashing of the award by means of a writ of certiorari if the
award is ex facie illegal and has been passed in clear violation of the law. In support of this contention, the counsel cited the decision in AIR 1977
1718 (SC) where it was held that where a court acts illegally and usurps jurisdiction and there is an error on the face of the record then the record
has to be corrected by certiorari. Resort to this ratio is not called for in the present case, because there is direct authority in Mohammed
Hasnuddin Vs. State of Maharashtra, that a court dealing with a reference u/s 18 of the Act only functions as a special tribunal and not as a civil
court as known to law. Consequently, an'' error committed by the tribunal can be corrected by certiorari. Therefore, what really falls for
consideration is whether the Sub Court has committed any error in passing the awards in the cases referred to it u/s 18 of the Act, without giving
notice to the petitioner.
Another preliminary objection raised was that inasmuch as appeals have been preferred to this Court against the awards passed by the
Subordinate Judge, the petitioner cannot legitimately contend that it is left with no other remedy but to file petitions under Article 226 of the
Constitution to seek redressal against the awards. It is, no doubt, true that Sub-article (3) of Article 226 interdicts the entertainment of a petition
under Article 226 if any other remedy for redressal of the injury is provided for by or under any other law for the time being in force. It is equally
true that at the instance of the petitioner, the State has preferred appeals to this Court against the awards passed by the Subordinate Judge. Even
so, we cannot lose sight of the fact that the nature and scope of the two proceedings are entirely different. An appeal preferred against an award
can only raise for consideration the question whether the court was justified in enhancing the compensation amount or in refusing to enhance the
compensation amount on the basis of the materials placed before it. On the other hand, a petition filed under Article 226 of the Constitution to
quash an award passed by the court will go to the root of the matter, viz., whether the award is sustainable at all irrespective of the question
whether the court was justified in enhancing or refusing to enhance the compensation amount on the face of the materials placed before it. To put it
differently an appeal against an award can have reference only to the quantum of compensation that was awarded or refused to be awarded by the
court, but it cannot go beyond and call for examination of the validity and legality of the award itself. On the other hand'', a petition under Article
226 of the Constitution to quash an award will call for examination of the more fundamental question of the validity and legality of the award itself.
Therefore, having regard to the difference in the scope of the two proceedings, there is no room for a technical objection being raised regarding the
maintainability of a writ petition on the ground that an alternative remedy is available and, in fact, that has been availed of.
The question of alternative remedy being available, also calls for a look from a different perspective. Though the petitioner has succeeded in
making the State Government file appeals to the High Court against the awards passed by the Sub Court the petitioner can only be a passive
spectator in the appeal proceedings and it cannot take a direct or active part and seek reduction of the compensation amount. This is because of
the fact that in a reference u/s 18 there can only be two parties, viz., the Collector and the claimant who has raised the objection to the award. The
person for whom the land is acquired has no locus standi to demand a reference u/s 18 and he can only appear and adduce evidence for the
purpose of determining the amount of compensation. The proviso to Section 50(2) of the Act makes this position clear. Therefore, the petitioner
cannot seek intervention in the appeal and advance independent arguments to assail the correctness of the award passed by the civil court. This
position has been sufficiently pointed out by a Division Bench of this Court in Sri Kanyaka Parameswari Devasthanam and Charities Vs. His
Holiness Sri La Sri Ambalavana Pandara Sannadhi Avl. Adheena Kartha Thiruvaduthurai Adheenam and Another, and also in Indo Swiss Time
Limited Vs. Umrao and Others, . It may therefore be seen that the filing of appeals by the Collector to the High Court against the awards passed
by a civil Court cannot strictly be called an effective alternative remedy for the petitioner. From that point of view also, the petitioner is entitled to
invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution to seek quashing of the awards passed by a civil court on
grounds of illegality and violation of the principles of natural justice.
Learned Counsel for the respondents relied on the decision in S. Jagadeesan Vs. Ayya Nadar Janaki Ammal College and Another, to reiterate
their objection that since an alternative remedy by way of appeal against the award of the civil court was available under the statute, to the
petitioner, and in fact, such a remedy has also been availed of, the petitioner is precluded from filing petitions under Article 226 to seek quashing of
the awards. We are unable, to see merit in this contention. The decision relied on was concerned with a writ petition filed to quash a resolution
passed by the Syndicate of the Madurai Kamaraj University directing reinstatement of a member of the teaching staff. Since a direct remedy by
way of an appeal u/s 37 of the Tamil Nadu Private Colleges (Regulation) Act, 1976 was available to the aggrieved party, the Supreme Court held
that the High Court ought not to have entertained the writ petition, but should have called upon the party to seek the alternative remedy of filing an
appeal for redressal of his grievance. The facts here are perceptibly different. The petitioner cannot, by itself, file an appeal against the award
passed by the civil court, nor can it even seek impleadment in an appeal preferred by the State or by the owner of the land against an award.
Hence, even if an appeal is filed, the petitioner cannot directly voice its grievance or put forth its contentions, but has only to rely upon good offices
of the State to protect its interests. It this position is realised, it can never be said that the indirect remedy available to the petitioner by inducing the
State Government to file an appeal will constitute an alternative remedy as equal to and effective as the filing of a petition under Article 226 for the
issue of a writ of certiorari or other appropriate order.
The maintainability of the writ petitions was assailed by Mr. Gandhi on a different ground. Learned Counsel argued that in the affidavits filed in
support of the writ petitions, the petitioner had deliberately refrained from stating that appeals have already been filed against the awards, but
notwithstanding the resort to the alternative remedy, the petitioner was constrained to file the writ petitions for compelling reasons. The counsel
therefore argued that the petitioner is guilty of material suppression and because of this deliberate lapse, the petitioner ought not to be permitted to
invoke the extraordinary jurisdiction of this Court under Article 226. Since we have already held that the filing of appeals will not amount to an
effective alternative remedy for the petitioner, we are unable to countenance this argument of the counsel.
In the course of the arguments, it was brought to our notice that in one reference, viz., L.A.O.P. No. 7 of 1981, the petitioner has accepted the
award passed by the Civil Court and paid enhanced compensation to the landowner in terms of the award. An argument, was therefore advanced
that when in one case the petitioner has suffered the award and paid the compensation amount at revised rates to the landowner, it is estopped in
law from disputing the validity of the awards passed in the other cases or to deny its liability to pay compensation at enhanced rates in terms of the
awards. The petitioner''s counsel met the argument by saying that in that particular case the increase in the compensation amount was negligible,
viz., Rs. 693.15p. and since the landowner had taken out execution, the compensation amount was paid under protest. We find the explanation
acceptable. More than that, we are of the view that payment of the compensation amount cannot act as an estoppel, especially when the petitioner
is not a party to the reference proceedings, when the challenge is on the validity of the award and not merely on the quantum of increase in the
compensation amount.
Coming now to the main question, viz., whether the award passed by the civil court without giving notice to the petitioner to adduce evidence
for the purpose of determining the amount of compensation as envisaged in Sub-section (2) of Section 50 of the Act, is proper we may briefly
refer to the scheme of the Act and some of its relevant provisions. For this purpose, we may reproduce with advantage the following
summarisation by the Privy Council in Samullah v. Collector, Aligarh L.R. 73 IndAp 44 : (1946) 1 M.L.J. 333 : AIR 1946 75 : 59 L.W. 312.
Under Section 4 of the Act it is provided that where it appears to the Provincial Government that land is needed for any public purpose, a
notification to that effect is to be published as directed. u/s 5(a) persons interested in the land which has been notified may object to its acquisition,
and the Collector has to hear the objection and make a report thereon to Government. u/s 6, if the Government is satisfied, after considering the
Collector''s report, that the land is needed for a public purpose or for a company (a subject dealt with in later Sections of the Act) a declaration to
that effect has to be made and published. u/s 9 notice has to be published by the Collector stating that the Government intend to take the land and
that claims to compensation for all interest in such land may be made to him. u/s 11 the Collector has to inquire into the value of the land at the date
of the publication of the notification u/s 4 and into the respective interests of persons claiming compensation and to make an award of (inter alia)
the compensation which in his opinion should be allowed for the land. u/s 12 notice of the award has to be given. u/s 18 any person interested who
has not accepted the award may, by written application to the Collector, require him to refer the matter (which may include the amount of
compensation) to the court. u/s 19(1)(d) the Collector in making the reference, is required to state for the information of the court, if the objection
be to the amount of compensation, the grounds on which the amount of compensation was determined. u/s 23, the court is required to take into
consideration (inter alia) the market value of the land at the date of the publication of the notification u/s 4 and to add 15 per cent to the market
value for the compulsory acquisition. u/s 26 the award is to be deemed a decree. ''Collector is defined in the Act as including a Deputy Collector
and any officer specially appointed by the provincial Government to perform the functions of a Collector under the Act''.
For the purposes of these petitions, a reference to some more sections of the Act is also called for. After entertaining a reference u/s 18, the Court
is enjoined u/s 20 to cause notice to be served on (i) the appellant, (ii) all persons interested in the objection (underpinning ours) except such of
those as have consented to receive payment of the compensation amount, and (iii) the Collector, if the objection raised by the claimant is with
regard to the area of the land or to the amount of compensation. Section 21 lays down that the scope'' of the enquiry in every such proceeding
shall be restricted to a consideration of the interests of the persons affected (underlining ours) by the objection. Then, we come to Section 50
which pertains to acquisition of land at the Cost of a local authority or a company. Sub-section (1) of Section 50 provides that if the provisions of
the Act are made use of for acquiring a land for a local authority or a company, then the charges of and incidental to, such acquisition shall be
defrayed from or by the funds of the local authority or company. Sub-section (2) of Section 50 and the proviso thereto are important provisions
and therefore, we extract them hereunder:
Section 50: (1)....
(2) in any proceeding held before a Col lector or court in such cases, the local authority or company concerned may appear and adduce evidence
for the purpose of determining the amount of compensation:
Provided that no such local authority or company shall be entitled to demand a reference u/s 18.
As per the terms of Section 50(2), when the land is acquired on behalf of a local authority or a company, then the concerned local authority or
company has been given a right to appear in the land acquisition proceedings or adduce evidence for the purpose of determining the amount of
compensation. The proviso however, makes it clear that as against an award passed by the Collector or the Land Acquisition Officer, the local
authority or the company will not be entitled to demand a reference u/s 18. Section 54 provides for an appeal to the High Court against awards
passed by the civil court, subject to the provisions of the CPC relating to appeals from origional decree and a further appeal to the Supreme Court
subject to the provisions of Section 110 of the CPC and Order 45 thereof.
In the light of these provisions, what falls for consideration is whether the petitioner company is a person interested in the acquisition
proceedings and if so, whether it is entitled to notice of hearing u/s 20(b) of the Act, and the further question would be whether, if such notice was
not issued and the non-issue of notice had deprived the petitioner an, opportunity of adducing evidence for proper determination of the amount of
compensation,. such non-issue would amount to contravention of the Act and violation of the principles of natural justice.
The matter is no longer res integra, because these identical questions have come to be considered by the Supreme Court as well as the High
Court of Madhya Pradesh. We shall therefore proceed M refer to those decisions and the dictum contained therein. In Town Improvement Trust,
Gwalior Vs. Sahajirao Angre and Another, the Town Improvement Trust, Gwalior filed a petition under Articles 226 and 227 of the Constitution
for issuance of a writ to set aside an award passed by the Land Acquisition Officer in respect of a land acquired for it. The writ petition was
allowed and it was held that the Town Improvement Trust, Gwalior was a person interested in the proceedings and it therefore, had the requisite
locus standi to seek quashing of the award. On the merits of the case, the award was quashed and the matter was remitted for fresh determination
of the amount of compensation. In Himalaya Tiles and Marble (P) Ltd. Vs. Francis Victor Coutinho (dead) by LR''s., one of the questions which
fell for consideration was whether a private company on whose behalf certain lands were acquired under the provisions of the Land Acquisition
Act. had locus standi to file a writ appeal against a rule issued at the instance of the owner of the land for quashing the acquisition proceedings.
Dealing with the matter, the Supreme Court, after reviewing various earlier pronouncements has held as follows:
Thus the preponderance of judical opinion seems to favour the view that the definition ''of the person interested'' must be liberally construed so as
to include 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, We are, therefore, unable to agree with the view taken by the Orissa High Court or even by the Calcutta High Court
that a company; local authority or a person for whose benefit the land is acquired is not an interested person. We are satisfied that such a person is
vitally interested both in the title to the property as also in the compensation to be paid therefore because both these factors concern its future
course of action'' and if decided against him, seriously prejudice his rights. Moreover, in view of the decision of this Court referred to above R.L.
Arora Vs. State of Uttar Pradesh and Others, . We hold that the appellant was undoubtedly a person interested as contemplated by Section 18(1)
of the Act. The High Court, therefore, committed an error in throwing out the appeal of the appellant on the ground that it had no locus standi to
file an appeal before the Bench.
Mr. Thyagarajan also brought to our notice two unreported judgments of the Supreme Court, the first being in U.G.E.P. Ltd. v. State of
Mysore and Ors. Civil Appeal No. 1045/77 (Supreme Court Judgment, dated July 31, 1980). The Bench held as follows:
The question of compensation had to be decided after hearing the necessary parties. The party most affected with regard to the payment of
compensation was the appellant before us, because the funds had to be found by the appellant for whose benefit the land was being acquired
.....
The absence of the appellant before the Civil Court had a disastrous impact on it because while the land acquisition officer had ordered a sum of
Rs. 46,000 by way of compensation, the civil Judge raised it to Rs. 2,39.000. We are not making any observation about the merits of the
contentions. All that we need say is that there is an imperative obligation to give notice and hear the appellant''s petition before the High Court, and
on the strength of Section 20 referred to above, the High Court should have allowed the writ petition and set aside the decision of the civil Judge.
Instead of doing so, the High Court dismissed the writ petition in limine.
This view has been reiterated in the second case, in Town Municipal Council, Harihar v. The Secretary to the Government of Karnataka and Ors.
CA. No. 2665 of 1980 (S.C.) : dated 5th March 1980. Learned Counsel for the respondents sought to distinguish N.G.E.F. Ltd. v. State of
Mysore and Ors. C.A. No. 1045 of 1977 (S.C), dated 31st 3uly, 1980 on the ground that the State of Mysore had amended Sub-section (2) of
Section 20. of the Act and specifically provided that if the acquisition was not made for Government, then notice should be issued to the authority
or the person for whom it is. made. We may deal with this contention at this stage itself, because there is no room for differentiating the judgment
on the subtle ground put forward by the respondents counsel. In the very judgment under consideration, the Supreme Court has held that the party
most affected by enhancement of the compensation by the civil court would be the company or the local authority and it is in realisation of this
position, the Karnataka Government has introduced a specific provision for notice to the company or local authority u/s 20(c). The judgement,
therefore, makes it clear that even without the amendment to Section 20(c), the Supreme Court would have sustained the grievance expressed by
the company and allowed the appeal.
In view of these clear and authoritative pronouncements of the Supreme Court and a Division Bench of the Madhya Pradesh High Court, we
do not think there is any scope for the respondents to contend that the petitioner is not a ''person interested'' in the objection and therefore, it is not
entitled to issue of notice or a right of hearing before the civil court when it dealt with the references under S.I8 of the Act. In our opinion, the
position of law is now well-settled and that is why we have prefaced our discussion with the observation that the matter is no longer res integra.
Even so, the Learned Counsel for the respondents, sought to canvass before us by means of various arguments that the position of law on the
question is yet to receive judicial pronouncement and that the decisions referred to above, do not conclude the matter.
Mr. Srikumaran Nair argued that the petitioner may be aggrieved and affected person on account of the enhancement of compensation by the
civil court, but it will not be a person ''interested'' within the meaning of Section 3(b) or Section 20(b) of the Act, and unless the petitioner is a
person interested, it is not entitled to notice in the reference proceedings u/s 18 to the civil court. Learned Counsel argued that the term ''person
interested'' has been defined in Section 3(b) of the Act and as per the definition, the expression includes all persons claiming an interest in
compensation to be made on account of the acquisition of the land under the Act. According to the counsel, the petitioner is not a person claiming
compensation, nor is it a claimant to any easementary right over the acquired land, and as such, the petitioner is not a person interested within the
meaning of Section 3(b). Arguing further, the counsel referred to Section 18(1) and submitted that only a person-interested can apply to the
Collector provided he has not accepted the award for a reference being made to the civil court for consideration of his objection about the
measurement of the land, the amount of compensation, etc. Placing reliance upon Section 3(b) and Section 18(1), Mr. Srikumaran Nair argued
that the expression ''persons interested'' occurring in Section 20(b) of the Act should be construed in conformity with the abovesaid provisions, and
so construed the petitioner has no locus standito insist upon notice from the civil court before it dealt with the references u/s 18. We are not
persuaded by the argument of the counsel, because �the argument contains a fallacy. The expression ''person interested'' defined in Section 3(b),
will have application only to Section 18 of the Act, but not to Section 20(b) because the words used in Section 20(b) are different. While Section
18 refers only to ''persons interested'' the words used in Section 20(b) are ''person interested in the objection''. It cannot therefore be said that the
expression in Section 20(b) should be construed in terms of the definition contained in Section 3(b). Moreever, it should also be noticed that
Section 18(1) restricts the types of objections which could be raised by a person interested in the acquisition proceedings. Only four kinds of
objections can be raised to an award passed by the Collector, viz., objections regarding (i) measurement of the land, (ii) amount of compensation,
(iii) person to whom the compensation is payable, and (iv) the manner of apportionment of the compensation among the persons interested. It is
only on these matters a person interested'' can ask the Collector to make a reference u/s 18. When an objection is raised about the inadequacy of
the compensation amount, it goes without saying that the court will have to find out whether the compensation awarded by the Collector is
reasonable and, if not, what is the higher compensation amount that should be given. When such a matter is considered by the court, the company
or the local authority, for whose benefit the land is acquired will undoubtedly be interested in the objection raised by the claimant, because any
enhancement of the compensation amount will directly affect the company or the local authority inasmuch as it has to pay the compensation amount
for the land. It is on account of this fact, the Supreme Court had held in the decisions referred to above that if notice is not given to the company or
local authority and the said company or local authority is not afforded opportunity to participate in the reference proceedings, then it will have
disastrous consequences for the company or local authority and therefore, it is imperative that notice should be given to the affected party before
the reference proceedings are enquired into and an award is passed.
We may also usefully refer to another decision of the Supreme Court in Sunder Lal Vs. Paramsukhdas, . In that case, the compensation
amount for a land which was acquired was apportioned equally between the landowner and the lessee. Both of them raised objections, the
landowner claiming the entire compensation amount and the lessee claiming a higher share. In the meanwhile, a decree-holder of the lessee
attached'' the compensation amount allotted to the lessee and withdrew the money from court. Subsequent to that, the landowner and the lessee
filed a compromise petition before the civil court. The decree-holder, sought impleadment in the reference proceedings u/s 18 which were pending.
The court held that he was not a person interested and refused impleadment. On revision, the High Court ordered impleadment of the decree-
holder. Against the order of the High Court, an appeal was preferred to the Supreme Court. The Supreme Court held that a person claiming
interest in the compensation need hot necessarily be a person claiming interest in the land, that the definition of ''person interested'' in Section 3(b)
is an inclusive definition, and that any person, whose interest is likely to be affected by an objection raised to the amount of compensation or the
apportionment of the compensation will also be a person interested and hence such a person is entitled to be heard by the court in the proceedings
u/s 18. When even a decree-holder of one of the claimants to the compensation amount has been held to be a person interested, it goes without
saying that the petitioner who has to bear the burden of the additional compensation should be considered all the more a person interested. In such
circumstances, if notice is not issued to the petitioner and it is deprived of an opportunity of making representations, before the civil court it would
amount to a violation of the rule of audi alteram partem.
Learned Counsel for the respondents sought to contend that as per Section 20(c), if an objection is in regard to the area of the land or to the
amount of compensation, then the Court is enjoined to serve notice only on the Collector and not on the company or local authority for whose
benefit the land is acquired. We do not find any merit in this contention, because it overlooks the specific provision made in Section 50(2) for a
company or local authority appearing before the Collector or court and adducing evidence for the purposes of determining the compensation. We
have also to bear in mind that a person interested may refuse to receive the compensation amount awarded by the Collector and seek a reference
u/s 18 for determination of one or more of the four kinds of objections specified therein. The first two objections pertain to the extent of the land
and to the amount of compensation, while the third and fourth objections pertain to the persons to whom the compensation amount is to be
distributed and the manner of apportionment among the several claimants if the objection is only with reference to the persons to whom the
compensation amount is to be paid or the manner of apportionment of the same among the vaious claimants, then the Collector is not a necessary
party and the court need not issue notice to him or call upon him to controvert the objections. In fact, those cases will fall u/s 30 of the Act and the
Collector himself will have to make a reference to the court u/s 30. No separate provisions has been made in the Act specifying the procedure to
be followed by the Court in dealing with a reference u/s 30. Therefore, Section 20 will cover not only references made u/s 18, but also references
made u/s 30. It therefore follows that when a reference is made Only for determination of the question as to who are the persons entitled to the
payment of compensation or the manner in which the apportionment of the compensation is to be made, the court need not give'' notice to the
Collector. In order to make this position clear, it has been specifically stated in Section 20(c) that notice need be given to the Collector only when
the objection is in regard to the area of the land or the amount of the compensation. Hence Section 20(c) cannot be construed to mean that in a
reference made u/s 18 for determining a dispute regarding the area of the land or the amount of compensation, the court should give notice only to
the Collector and to none else and in such circumstantces, a company or a local authority for which a land is acquired is not entitled to notice under
Section0, even if the award by the court will prejudicially affect the interests of the company or the local authority.
If the contention of the respondents is given acceptance, then sub-Section (2) of Section 50 will be rendered otiose. The well established
principle is to interpet the provisions of a statute as harmoniously as possible so that there is no conflict of the provisions and likewise, that no
provision is rendered otiose. We cannot, therefore, sustain the argument that the petitioner is not a person interested in the objection and as such, it
cannot assail the award on the ground of non issue of notice to it by the court when it dealt with the reference u/s 18.
A somewhat curious argument was advanced by Mr. Selvaraj to contend that even if the petitioner is entitled to notice in the award
proceedings, it must be deemed to have given up its right because of its failure to have adduced evidence before the Land Acquisition Officer prior
to his passing an award u/s 11 of the Act. We see no force in this contention because Section 20 does not restrict the issuance of notice only to
those persons who participated in the enquiry u/s 11. Further, it has to be remembered that as against an award passed by the Collector, a
company or local authority has no right to seek a reference u/s 18. Objections regarding the compensation amount fixed by the Collector can arise
only after an award is passed u/s 11 and the landowners feel that the compensation awarded is low and inadequate. It is only then the company or
the local authority will be faced with the necessity of considering those objections. It cannot, therefore be said that the failure of a company or local
authority to have participated in the enquiry u/s 11 will preclude it from seeking a notice from court when a reference is made u/s 18 or from
claiming a right of representation in such a proceeding. The reference proceedings u/s 18 are different from the award proceedings u/s 11 and as
such, there can be no argument that non-participation in the enquiry held u/s 11 will constitute waiver of notice u/s 20 as well.
Lastly, it was contended by Mr. Selvaraj that the petitioner, being a company wholly owned by the Government of India, must be equated with
the Union Government itself and that it cannot claim the status of a separate entity and raise an objection that the Court should not have passed
awards on the references without giving notice to the company. For advancing such a contention, Mr. Selvaraj placed reliance on the amendment
made to Section 3(e) of the Act, by the Amending Act 68 of 1984. Prior to the amendment, Section 3(a) of the Act read as follows:
The expression ''company'' means a company registered under the Indian Companies Act, 1882 or under the (English) Companies Acts, 1862 to
1890, or incorporated by an Act of Parliament of the United Kingdom or by an Indian Law, or by Royal Charter or Letters Patent and includes a
society registered under the Societies Registration Act, 1869, and a registered society with in the meaning of the Co-operative Societies Act,
1912, or any other law relating to co-operative societies for the time being in force in any State.
As per the amendment effected by Act 68 of 1984, the relevant provisions read as follows:
The expression ''Company'' means -
(1) a company as defined in Section 3, of the Companies Act, 1956, other than a Government company referred to in Section 3, Clause (cc) of
the Land Acquisition Act, - Section 3, Clause (a)
Clause 3(cc) of the Act is to the following effect:
The expression ''Corporation owned or controlled by the State'' means any body corporate established by or under a Central, Provincial or State
Act, and includes a Government company as defined in Section 617 of the Companies Act, 1956 (1 of 1956), a society registered under the
Societies Registration Act, 1860 (21 of 1860), or under any corresponding law for the time being in force in any State, being a society established
or administered by Government and a co-operative society within the meaning of any law relating to co-operative societies for the time being in
force in any State, being a cooperative society in which not less than fifty-one per centum of the paid-up share capital is held by the Central
Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments.
Since, as per the amended clause, a Government company as defined in Clause (cc) has been taken away from the expression ''company, the
Learned Counsel argued that the petitioner cannot claim the status of a company and invoke Section 50(2) to its aid and insist upon issue of notice
to it by the court in the reference made u/s 18. Even though the acquisition proceedings had taken place long prior to the enactment of the
Amending Act 68 of 1984, Mr. Selvaraj argued that the Court is bound to take notice of subsequent events and mould the relief to the parties in
the light of the subsequent events. In support of the argument that the Court is entitled to take notice of the subsequent events and mould the relief
accordingly. Mr. Selvaraj placed reliance on AIR 1941 5 (Federal Court); Pasupuleti Venkateswarlu Vs. The Motor and General Traders, ,
M.M. Quasim Vs. Manohar Lal Sharma and others, and Hasmat Rai and Another Vs. Raghunath Prasad, . It was alternatively contended that
even without the amendment, the petitioner company should be construed as a State within the meaning of Article 12 of the Constitution as it is a
company wholly owned by the Government of India and from that standpoint also, the petitioner cannot claim the status of an independent
company and a right of hearing in the reference proceedings in that capacity. By way of judicial authority for this proposition, Mr. Selvaraj referred
to the decision in Som Prakash Rekhi v. Union of India and Raman, C.V. v. The Management of Bank of India (1985) WL.R. 360.
Arguing contra, Mr. Thyagarajan submitted that the petitioner, in spite of being a company wholly owned by the Government of India, is a
distinct entity and its status as such cannot be refuted. The Learned Counsel argued that merely because the shares of the company are wholly
owned by the Government of India, the company will not cease to be a company, within the meaning of the Indian Companies Act or become part
and parcel of the Government of India. So far as the amendment to Section 3(3) is concerned, the counsel submitted that the amendment has been
effected long after the acquisition proceedings had been completed and furthermore, the amendment cannot have retrospective effect. To lend
authority to his contention, Mr. Thyagarajan cited Punjab Tin Supply Co., Chandigarh and Others Vs. Central Government and Others, where it
was held that retrospective effect to an amendment may be given only where there are express words giving retrospective effect or where the
language used necessarily implies that such retrospective operation was intended.
On an examination of these contentions, we find that the petitioner company can by no stretch of imagination, be identified with the
Government of India and to have no separate legal existence of its own. It is true that the petitioner is a company wholly owned by the Government
of India. Even so, its status in law prior to the amendment is only that of a Company registered under the Indian Companies Act, 1882. It has a
separate seat and juristic personality of it own. In the two cases cited above, viz., Som Prakash Rekhi v. Union of India and Raman C.V. v. The
Management of the Bank of India (1985) W.L.R. 360 what was contended was that the Bharat Petroleum Corporation Ltd. in the first case,
constitution an authority under Article 12 of the Constitution so as to be amenable to the writ jurisdiction of the High Court and the Supreme Court
and in the second case, the Bank of India constituted an authority under the control of the Government India so as to dispel the application of the
provisions of the Tamil Nadu Shops and Establishments Act to its employees. The controversy raised in those two cases was therefore entirely
different. Hence the dictum contained in those decisions has no relevance to the question posed before us. On the other hand, the pronouncement
of the Supreme Court in Western Coalfields Limited Vs. Special Area Development Authority, Korba and Another, will apply on all fours to this
case. Therein it has been laid down that even if the entire share -capital of a company has been subscribed by the Government of India, it cannot
be predicated that the company is itself owned by the Government, but on the contrary the company incorporated under the Companies Act has a
corporate personality of its own distinct from that of the Government of India. It was further held that any lands and buildings owned by the
company will stand vested only in the company in spite of the Government of India owning the entire share capital.
So far as the retrospective application of the amended Section 3(e) is concerned, it is needless to discuss the matter in detail because the
amendment does not contemplate either expressly or impliedly a retrospective application of the amended Section. The acquisition proceedings
had come to a conclusion long before the Amendment Act came into force. Possession of the lands had also been handed over to the petitioner
long back and the award u/s 11 had also been passed before Act 68 of 1984 was enacted. What remained to be done was only the payment of
compensation after examining the objections raised by the landowners regarding the compensation amount fixed by the Collector. The pendency of
those proceedings cannot be taken to mean that the acquisition proceedings themselves we''re inchoate or incomplete.
In the light of the conclusions reached by us, we are clearly of opinion that all the writ petitions should succeed. Learned Counsel for the
respondents raised a poser as to what would become of the appeals preferred by the State against the awards passed by the civil court. It goes
without saying that once the awards of the Civil Court are quashed by means of certiorari, then the appeals will have to be necessarily withdrawn.
Learned Counsel for the petitioner conceded this position. We have. to therefore observe that once the references are taken for fresh enquiry by
the Subordinate Judge, the appeals preferred to this Court will become infructuous and will therefore, have to be withdrawn.
In the result, we hold that all the writ petitions will stand allowed and there will be a rule in each of them quashing the awards passed by the
Subordinate Judge, Padmanabhapuram in the references made u/s 18 of the Act. All the references will stand restored to the file of the
Subordinate Judge, Learned Counsel for the petitioner states that formal notice is not necessary and that the petitioner will enter appearance within
four weeks from the date the references stand restored to the file of the Subordinate Judge. After appearance by the petitioner, the Subordinate
Judge will dispose of the references afresh after giving opportunity to the petitioner herein to make whatever representations it wants and
opportunity to the claimants also to adduce further evidence if they so desire. Since all the awards are quashed by means of the rule, the need for
ordering stay of payment of the additional compensation amount does not arise. The writ appeals therefore become infructuous and, accordingly,
they will stand dismissed.
There will be no order as to costs in the writ petitions as well as the writ appeals.
Having regard to the long drawn out nature of the proceedings the Subordinate Judge, Padmanabhapuram is directed to dispose of the
references within a period of three months from the date of receipt of the records.