State and Another vs Amjad Hussain and Another

Y.P. Nargotra, J.—Whether state can maintain an appeal against a judgment and passed upon a reference u/s 18 of Land Acquisition Act in

which it was not a party; is the question arising for consideration. The relevant facts of the case are that under the provisions of Land Acquisition

Act (hereafter called the Act). Land situated at Sharief Abad, District Budgam was acquired for construction of Electric Grid Station. The part of

the land acquired. The Collector assessed the compensation at the rate of Rs. 34,600 per kanal. The owner/respondent did not accept the

compensation at that rate and requested the Collector for making a reference u/s 18 of the land Acquisition Act to the District Judge, Budgam.

Learned District Judge entered the reference in which Petitioner No. 2, Chief Engineer was also a party, and enhanced the rate of compensation

from Rs. 34,600 to Rs. 2,00,000 per kanal and assessed the compensation payable to the petitioner at Rs. 1,39,59,969 in which included the

compensation for fruit trees, two sheds etc. and solarium.

The Collector has not filed any appeal u/s 54 against the award and judgment of learned District Judge. However, the petitioner State and Chief

Engineer have sought leave to appeal mainly on the plea that Collector being hand-in-glove with the claimant failed to file the appeal whereby the

petitioner state has been prejudiced and consequently has been saddled with the liability and being as such an aggrieved and interested party

should be allowed to file appeal against the judgment and award dated 3.12.1998 passed by learned District Judge Budgam.

The respondent No. I/Owner has contested the application of the petitioners inter-alia on the grounds the State being not a necessary party in

the reference u/s 18 of the Act has no right to maintain the appeal.

The right of appeal is not an interest right or common law right but it is a statutory right. Against an order of award passed by the Court u/s 18

appeal lies to the High Court u/s 52 of the Act any of the parties to the proceedings u/s 18 of the Act if aggrieved of the award can maintain an

appeal in exercise of its statutory right. The petitioner No. 2 Chief Engineer was a party in the proceedings as such he can in the exercise of a

statutory right maintain the appeal and as such was not required to seek leave of this Court for that purpose.

The State of J&K is also seeking leave to appeal. Admittedly state was not a party to the proceedings taken on reference u/s 18 of the Act

before the Learned District Judge. So the question formulated above has arisen for consideration the provisions contained in Section 48 have a

bearing on this question which reads as under:

(1) When the provisions of this Act are put in force for the purpose of acquiring land and at the cost of any fund controlled or managed by a local

body or of any person or body of persons, whether corporate or not, the charges of and incidental to, such acquisition shall be defrayed from or

by such fund or such person or body of persons.

(2) In any proceedings held before a Collector or Court in such cases the local authority or the person or the body of persons concerned may

appear and adduce evidence for the purpose of determining the amount of compensation:

Provided that, no such person or a body of persons shall be entitled to demand a reference u/s 18.

Section 48 of Jammu & Kashmir Land Acquisition Act is in para materia with Section 50 of Central Land Acquisition Act. The scope and effect

of Section 50 qua the right of appeal of the authority on whose behalf land had been acquired came up for consideration before a constitution.

Bench of Hon'ble Supreme Court. Their Lordships of the majority view in case U.P Awas Evam Vikas Parishad Vs. Gyan Devi (Dead) by L.Rs.

and another, etc. etc., held as follows:

Sub-section (2) of Section 50 enables a local authority to appear in any acquisition proceeding at the stage of determination of compensation

before the Collector or the reference Court and adduce evidence for the purpose of determining the amount of compensation. The object

underlying the aforesaid provision appears to be to safeguard the interests of the local authority who would be required to pay the amount of

compensation that would be determined by the Collector or by the Reference Court by enabling it to adduce evidence having a bearing on the

amount of compensation before the Collector or the Court and thereby assist them in making a fair determination. Such protection was necessary

because in the matter of local authority for whom the land is acquired does not stand on the same footing as the Government. While making the

award the Collector acts as an agent of the Government and functions under its administrative Control. Prior to the insertion of the proviso in Sub-

section (1) of Section 11 of the LA. Act by the Land Acquisition (Amendment) Act, 1984, there were administrative instructions requiring

preliminary valuation by the Collector found that the eventual award would substantially exceed the provisional valuation he was required to obtain

further instructions from the higher authorities. Now the proviso inserted in Sub-section (1) of Section 11 by the Amendment Act of 1984 lays

down the statutory requirement that no award shall be made by the Collector without previous approval of the appropriate Government or of such

Officer as the appropriate Government may authorize in this behalf. There is no similar provision requiring the approval of the local authority. Sub-

section (2) of Section 50 is the only provision which affords a certain degree of protection to it in the matter of determination of the amount of

compensation by the Collector as well as the reference Court. Keeping these considerations in view we are of the opinion that Sub-section (2) of

Section 50 must be construed as conferring as right on the local authority for whom the land is being acquired to participate in the acquisition

proceedings at the stage of determination of the amount of compensation before the Collector as well as the reference Court.

The said right can be effectively exercised by the local authority only if it has information of the proceedings which are pending before the Collector

as well as the reference Court. In other words the right conferred u/s 50(2) of the L.A. Act carries with it the right to be given adequate notice by

the Collector as well as the reference Court before whom the acquisition proceedings are pending on the date on which the matter of determination

of the amount of compensation will be taken up. Service of such a notice, being necessary for effectuating the conferred on the local authority u/s

50(2} of L.A. Act, can, therefore, be regarded as an integral part of the said right and the failure to give such a notice would result in denial of the

said right unless it can be shown that the local authority had knowledge about the pendency of the acquisition proceedings before the Collector or

the reference Court and has not suffered by prejudice on account of failure to give such notice.

The only limitation on the right conferred by Section 50(2) is that contained in the proviso to Section 50(2) which precludes the local authority from

demanding a reference u/s 18, In the report of the Select Committee the policy underlying the proviso has been thus explained:

........We cannot however agree that the authority should be permitted to appeal from the Collector's award. We have not given to Government

itself the power to make this appeal because the Collector is only the agent of the Government in the acquisition of land; his action is taken under

the rules laid down for his guidance which include a preliminary valuation and these rules ordinarily provide and sought to provide, that when the

Collector finds cause to anticipate that his eventual provisional estimate, he shall stay all proceedings till he receives the further instructions of higher

authority. No local authority or company is compelled to proceed under the Land Acquisition Act. If it can procure land more cheaply by private

negotiations, it is certainly at liberty to do so but if elects to set in motion the very special power given to the Government for public objects, it can

expect no higher privileges and powers than those given to Government itself.

Having regard to the difference between the position of a local authority for whom the land is acquired and the Government in the matter of

determination of the amount of compensation by the Collector to which the reference has been made by us earlier and especially after the insertion

of the proviso in Section 11(1) in L.A. Act by the Amendment Act of 1984 the fact that no right has been conferred on the Government to seek a

reference u/s 18 may not be a sufficient justification for denial of such a right to a local authority. While it is true that a local authority is not

compelled to proceed under the L.A. Act and if it can procure land more cheaply by private negotiations it is certainly at liberty to do so but there

may be cases, as in the case of acquisition of land for the Board, where it is permissible for a local authority to take possession of the land which is

being acquired u/s 17(1) before the making of the award by the Collector. In such a case the local authority would have no choice but to pay the

amount of compensation as determined by the Collector. We have adverted to these aspects not with a view to find fault with the legislative policy

underlying the enactment of the proviso in Sub-section (2) of Section 50 of the L.A. Act but only to highlight the significance of the protection that

has been made available to a local authority in the matter of determination of compensation under Sub-section (2) of Section 50 of the L.A. Act.

Thus, on an interpretation of the proviso Section 50(2) of the L.A. Act, it must be concluded that, subject to the limitation contained in the proviso,

a local authority for whom land is being acquired has a right to participate in the proceedings for acquisition before the Collector as well as the

reference Court and adduce evidence for the purpose of determining the amount of obligation on the Collector as well as the reference Court to

give a notice to the local authority with regard to the pendency of those proceedings and the date on which the matter of determination of amount

of compensation would be taken up. The negotiation of this right raises the question whether the local authority, feeling aggrieved by the

determination of the amount of compensation by the Collector or the reference Court, can take recourse to any legal remedy. Before dealing with

this question we would take mote of the decisions of this Court having a bearing on the issue.

Their Lordships after taking note of various judgments further held in para 23:

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 of 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 and 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 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 Section of the High Court.

And their Lordships summed up the conclusions as follows in para 25:

Section 50(2) of the L.A. Act confers on a local authority for whom land is being acquired a right to appear in the acquisition proceedings

before the Collector and the reference Court and adduce evidence for the purpose of determining the amount of compensation.

The said right carries with it the right to be given adequate notice by the Collector as well as the reference Court before whom acquisition

proceedings are pending of the date on which the matter of determination of compensation will be taken up.

The proviso to Section 50(2) only precludes a local authority from seeking a reference but it does not 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 L.A. Act.

In the event of denial of the right conferred by Section 50(2) on account of failure of the Collector to serve notice of the acquisition proceedings

the local authority can invoke the jurisdiction of the High Court under Article 226 of the Constitution.

Even when notice has been served on the local authority the remedy under Article 226 of the Constitution would be available to the local

authority on grounds on which judicial review is permissible under Article 226.

The local authority is a proper party in the proceedings before the reference Court and is entitled to be impleaded as a party in those

proceedings wherein it can defend that determination of the amount of compensation by the Collector and oppose enhancement of the said amount

and also adduce evidence in that regard.

In the event of enhancement of the amount of compensation by the reference Court if the Government does not file an appeal the local authority

can file an appeal against the award in the High Court after obtaining leave of the Court.

In an appeal by the person having an interested in land seeking enhancements of the amount of compensation awarded by the reference Court,

the local authority should be impleaded as a party and is entitled to be served notice of the said appeal. This would apply to an appeal in the High

Court as well as in this Court.

Since a company for whom land is being acquired has the same right as a local authority u/s 50(2), whatever has been said with regard to a local

authority would apply to a company too.

The matters which stand finally concluded will, however, not be reopened.

From the above quoted judgment law laid down appears to be that the authority at whose instance the land is acquired and the Government, if

feels aggrieved by the enhancement of compensation can maintain an appeal with the leave of the Court despite the fact that they were not parties

before the reference Court. In the present case, Chief Engineer, Petitioner No. 2 was a party as such can maintain the appeal in his own right

without leave. The State however, was not a party but in my view is the most interested party in the matter because it is the State who ultimately

has to pay the enhanced amount of compensation and therefore can maintain appeal with the leave of the Court. Especially so because State after

all is the principal and Chief Engineer applicant No. 2 its functionary is its agent and what an agent can legally, do can also be done by the principal

under the doctrine of agency.

Learned counsel for the respondent contends that the State through its Principal Secretary is seeking the leave to appeal which is not

permissible in view of Section 79 of C.P.C. as according to him it can be sued though its Chief Secretary.

Section 79 simply provides the Government when sues or is used it shall be named 'State of Jammu & Kashmir' Rules 1 & 2 of Order XXVII

provide as follows:

Suits by or against Government: -- In any suit by or against [the Government], the plaint or written statement shall be signed by such persons as

the Government may, by general or special order, appoint in this behalf, and shall be verified by any person whom the Government may so appoint

and who is acquainted with the facts of the case.

Persons authorized to act for Government: -- Persons being ex officio or otherwise authorized to act for the Government in respect of any

judicial proceedings shall be deemed to be the recognized agents by whom appearances, acts and applications under this Code may be made or

done on behalf of the Government.

Learned counsel for the respondents has not cited any rule to show that State can sue or be sued only through Chief Secretary and not by the

Principal Secretary of the concerned department. Therefore, there is no merit in the objection.

In the totality of the circumstances of this case prayer of the petitioners deserves to be allowed. Therefore, the State through Principal

Secretary Power Development Department is granted leave to appeal. The petitioner No. 2, Chief Engineer being a party to the proceedings

before the reference Court is in his own right also found competent to maintain the appeal. The C.M.P. No. 74/2003 is as such allowed. The

Registry shall list the appeal in due course.