Gujarat High CourtGujarat Narmada Valley Fertilizer Co. ... vs Parver Rustamji Kasad And Ors. on 30 April, 1993Equivalent citations: (1994)1GLR5JUDGMENT
 

S.D. Shah, J.1. This group of Civil Revision Applications is directed against the common judgment and order rendered by the Second Joint District Judge, Surat dated 12-2-1993 whereby application at Exh. 8 presented in Land Reference Cases No. 30 to 32 of 1991 and 37 to 65 of 1991 is dismissed.2. The present petitioner before this Court is a Joint Sector Company for whose benefit land admeasuring about 300 acres situated at village Borakhadi came to be acquired by Collector, Surat. The respondents in this proceeding are the owners of various parcels of land along with Special Land Acquisition Officer. It appears that acquisition proceedings with respect to the aforesaid parcels of land were initiated and various land owners had entered into an agreement with the petitioner-Company, namely, Gujarat Narmada Valley Fertilizer Company Limited (hereinafter referred to as "the Company"), for transfer of lands at the agreed rate of Rs. 10,751/- per acre. It also appears that the respective owners have accepted 90% of the amount of compensation. However, the owners were dissatisfied with such award which was passed in terms of the agreement between the parties and therefore they preferred 32 reference cases underSection 18of the Land Acquisition Act before the District Court, Surat. The said Land Reference Cases were thereafter transferred to Assistant Judge at Vyara and before Assistant Judge, applications were tendered by the present petitioner at Exh. 8 in each reference case to implead the present petitioner as party opponent. In such application, it was inter alia averred that the compensation payable to the land owners was already determined by agreement between the parties and that 90% of the amount payable was accepted by the land owners. It was further averred that the compensation payable to the land owners is to be paid out of the fund of petitioner-Company and that since prayer was made for enhancement of compensation by way of land reference underSection 18of the Act, the authority which is to bear the burden of compensation must be impleaded as a party opponent. It was. therefore, prayed before the Court of Assistant Judge that present petitioner should be impleaded as party opponent.3. Such applications in all the land reference cases were heard and decided by the common judgment and order dated 12-2-1993 which is under challenge in this group of civil revision applications whereby the Court has rejected the application holding that Gujarat Narmada Valley Fertilizer Company Limited cannot be impleaded in all land reference cases as third party under Order 1, Rule 10 of the Civil Procedure Code.4. Mr. K.S. Nanavati. learned Counsel appearing for the petitioner has strenuously urged before this Court that the party from whose fund compensation of land is to be paid is a "necessary party" in proceeding where liability to pay enhanced compensation is to be determined. He further submitted that the acquisition of the land is for the benefit of the petitioner-Company and liability to pay the compensation is also that of petitioner-Company, and therefore petitioner-Company is a necessary party or at least a proper party to the land reference cases. He further submitted that in view of the amendment ofSection 50(2)of the Land Acquisition Act by the State of Gujarat, even statutorily, an obligation is cast on the Court to call upon to appear and adduce evidence lo the local authority or any Company for whose benefit the land is acquired. He, therefore, submitted that the trial Court was not justified in rejecting such application.5. Mr. B.J. Jadeja, learned Counsel who appears for the owners of the land as well as Mrs. T.M. Shaikh, learned Assistant Government Pleader appearing for the Special Land Acquisition Officer, strenuously urged before the Court that ordinarily under Civil law, such a party is neither necessary nor proper party. Mr. B.J. Jadeja, learned Counsel for the land owners further submitted that in view of the special provision made inSection 50(2), only a limited right is conferred upon a Company for whose benefit the land is acquired and that limited right is a right to appear before the Court and to adduce evidence, if any. Beyond this right, no further right is conferred upon the Company or local authority for whose benefit the land is acquired and therefore audience to such company can be conceded to the aforesaid extent only and not beyond that. Mr. B.J. Jadeja further submitted that since there is a right to appear and lead evidence before the Court, incidental right to examine the witness may also be considered, but such a Company cannot become a party to the proceeding as of right, and therefore he submitted that the lower Court was justified in rejecting the application of the Company for being impleaded as party opponent.6. In order to appreciate the aforesaid rival contentions of the parties in their proper perspective, it is necessary, at this stage, to refer to some of relevant provisions of theLand Acquisition Act, 1894. UnderSection 4of the Act, power is given to the appropriate Government to acquire land by following the procedure stipulated therein. Whenever it appears to the appropriate Government that the land in a locality is needed or is likely to be needed for any public purpose or for a Company, a notification to that effect shall be published in the Official Gazette and the further procedure stipulated bySection 4shall have to be followed.Section 5of the Act deals with payment for damage and is not relevant for the purpose of present discussion. Section 5A provides to any person interested in any land which has been notified underSection 4as being needed or likely to be needed for a public purpose, a right to object to the acquisition of land and an obligation is cast on the authority to consider such objection under Section 5A(2).Section 6of the Act deals with declaration to be made by the appropriate Government after considering the report if any made under Section 5A to the effect that the parcel of land covering notification underSection 4(1)is required for public purpose.Section 11of the Act deals with award andSection 12provides that the award of Collector shall become final.Section 18of the Act which finds its place in Part 111 of the Act deals with Reference to Court and Procedure thereon. "Any person interested" who has not accepted the award, may by written application to the Collector require that the matter be referred by the Collector for determination of the Court. It is under this provision that person interested in the land and therefore in the award has a right of getting the reference made to the competent Court.Section 18also stipulates as to who can make such application and what should such an application contain.Section 18is, however, silent as to who shall be the parties to such proceeding which are to be initiated by any person interested by making an application in writing to the Collector. What meaning should be given to the words "any person interested" occurring inSection 18(1)is now well settled by the decision of the Supreme Court as well as Full Bench of the High Court of Gujarat to which reference shall be made hereafter.7.Section 19provides that the Collector while making reference to the Court shall for the information of the Court in writing state the situation and extent of the land, the names of the persons whom he has reason to think interest in such land, the amount awarded for damages and paid or tendered underSections 5and17and if there were objections to the amount of compensation, the grounds on which the amount of compensation was determined. Even in such information, prima facie the Collector is not required to state as to who will be the necessary parties. However, it is even otherwise clear that from notification underSections 4and6it can be ascertained by the Court to which the reference is made as to for what purpose the land is acquired and, secondly, for whose benefit the land is acquired. Now, it cannot be disputed that when the acquisition is for a local authority or a company, State Government can while issuing notification provide that the body for whose benefit the acquisition is made shall provide compensation. Once such provision is made that the compensation for the acquisition shall come from the corpus of the acquiring body, the acquiring body can be said to have at least financial interest in the determination of the amount of compensation. To put it in other words, since determination of amount of compensation involves financial liability of the company for whose benefit the land is acquired, it can under ordinary law. slate to the Court that, since fund for payment of compensation is to come from it, it should be heard and that it should be made a party to the proceeding.8. The right of audience of such local authority or company for whose benefit acquisition is made is accepted by Legislature by enactingSection 50(2)of the Act.Section 50being relevant for the purpose of this discussion is reproduced hereunder:50. Acquisition of land at the cost of a local authority or Ccmpcny:(1) Where the provisions of this Act are put in force for the purpose of acquiring land at the cost of any fund controlled or managed by a local authority or of any company the charges of land incidental to such acquisition shall be defrayed from or by such fund or Company.(2) In any proceeding held before a Collector 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 underSection 18.State Amendments: Gujarat: In its application to the State of Gujarat inSection 50for the words "may appear and adduce evidence", the words shall be called upon to appear and adduce evidence, if any shall be substituted.From the aforesaid provision and more particularly Sub-section (2) ofSection 50, it becomes clear that both before the authority who is to decide the amount of compensation as well as before the Court to whom the reference is made underSection 18, the local authority or the company concerned, has an option to appear and adduce evidence, for the purpose of determining the amount of compensation. The word "may" was suggestive of the fact that local authority or company has an option to appear and adduce evidence. The right of appearance and adducing of evidence is restricted by the words "for the purpose of determining the amount of compensation". It becomes clear therefore that local authority or company for whose benefit the land is acquired can as a matter of right either before the authority determining compensation or before the Court to whom reference is made, appear with a view to adducing evidence for the purpose of determining the amount of compensation. Such evidence would be to see that "compensation" in the real sense of the term is awarded and nothing more than compensation is awarded and acquiring body, local authority or company therefore shall come before the Court to see that the claim of the owner of the land for enhanced compensation is not straightway accepted by the Court and if such company or local authority finds that the claim is on higher side, it can object to such claim being enhanced and such objection shall have to be considered and determined by the Collector or the competent Court as the case may be. This Court is, therefore, of the opinion that there is a limited right of audience recognised by the Legislature itself in the local authority or the company to the extent of appearing before the Court and to the extent of leading evidence for the purpose of determination of compensation.9. Since Legislature has used the word "may" and since there was no obligation cast by the language of the statute either on the Collector or on the Court, in cases where no approach is made either by the local authority or by the company to the Collector or the Court, Court may even in absence of such party can proceed to decide compensation. The State of Gujarat, therefore, amendedSection 50(2)in its application to the State of Gujarat byGujarat ActNo. 20 of 1965 and substituted the words "shall be called upon to appear and adduce evidence, if any" in place of the words "may appear and adduce evidence". The substitution of these words by the State of Gujarat is suggestive of the fact that the State Legislature wanted that it shall be the duty of the Court as well as the Collector while determining the amount of compensation to call upon the local authority or company for whose benefit the acquisition is made to appear and adduce evidence before it. In my opinion, the aforesaid amendment by the State in the Central Legislation in its application to the State of Gujarat is meaningful and purposeful and idea behind such amendment is to provide a right of audience to the local authority or company for whose benefit the land is acquired, as well as a right to be a contesting party or advisory party. It appears to be intention of the Legislature to see that since compensation is to come from the fund of the local authority or company, it is vitally interested in safeguarding its finance and interest by pointing out to the Collector or the Court as the case may be, necessary evidence so as to resist the claim of enhanced compensation or compensation at a higher rate.10.In the case ofHimalaya Tiles and Marble (P) Ltd. v. Francis Victor Coutiho, the Supreme Court was called upon to decide the question as to whether appeal by a company for whose benefit the acquisition was made was by person interested within the meaning ofSection 18(1)of the Act. The High Court took the view that as the land was acquired by the Government, the company had no interest in the same and was, therefore, not entitled either to appear or defend the proceedings before the Court. It was in this context that the Court was called upon to decide the question as to whether local authority or any company for whose benefit the acquisition is made can fall within the meaning of the words "any person interested".The Supreme Court referred to its earlier decision in the case of Sundarlal v. Paramsukhadas 1968 (1) SCC 362 where the Supreme Court held that definition of the words "person interested" as given inSection 3(b)of the Land Acquisition Act is an inclusive definition. It is not necessary that in order to fall within the definition, a person must claim an interest in land, which has been acquired. A person becomes a person interested if he claims any interest in compensation to be awarded. The Court found that Paramsukhdas was a person interested because he claimed an interest in compensation. The Court accordingly held that be was entitled to be made a party to the proceeding before the Court in the land reference cases.11. The Supreme Court also noticed that there was a general consensus of judicial opinion that eventhough the company may not have any title to the property, yet it certainly has a right to appear and put forward its case in the matter of determination of the quantum of compensation. After referring to the decision of Punjab & Haryana High Court, in the case ofHindustan Sanitaryware and Industries Ltd. Bahadurgarh v. State of Haryana, the Court found that if the amount of compensation is increased on a reference underSection 18, it would be the company who would be prejudiced.The Court also referred to the decision of the Calcutta High Court in the case ofComilla Electric Supply Limited v. East Bengal Bank Limited, Comicaland noticed that a company undoubtedly has a right to appear and adduce evidence on the quantum of compensation.Section 50(2)purports to remedy the disability on the part of the company or a local authority by providing that it may appear and adduce evidence for the purpose of determining the amount of compensation. The reason is plain. It is the company or the local authority who has got to pay the money in such cases and it would be unjust to deny them the right to appear and adduce evidence which would have bearing on the amount of compensation.12. The expression 'person interested is very comprehensive and does not profess to give an exhaustive definition. The expression does not require that a person must really have an interest in the land sought to be acquired. It is enough if he claims an interest in compensation as distinguished from an interest in the property sought to be acquired. As long as a person claims an interest in the compensation is a person interested within the meaning of the definition of that expression. Vide M. Kuppuswamy v. Special Tehsildar 1967 (1) Mad.LJ 329.13. Having considered the aforesaid decision, the Supreme Court in the case ofHimalaya Tiles(supra) observed as under:7. It seems to us that the definition of a person interested given inSection 18is an inclusive definition and must be liberally construed so as to embrace all persons who may be directly or indirectly interested either in the title to the land or in the quantum  of compensation. In the instance case, it is not disputed that the lands were actually acquired for the purpose of the Company and once the land vested in the Government, after acquisition, it stood transferred to the Company under the agreement entered into between the Company and the Government. Thus it cannot be said that the Company had no claim or title to the land at all. Secondly, since under the 'agreement the Company had to pay the compensation, it was most certainly interested in seeing that a proper quantum of compensation was fixed so that the Company may not have to pay a very heavy amount of money. For this purpose, the Company could undoubtedly appear and adduce evidence on the question of the quantum of compensation.14. The Court further observed:Thus, the preponderance of judicial opinion seems to favour the view that the definition of person interested must be liberally construed so as to include a 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 it's stake may be extremely vital? For instance, the land acquisition proceedings may be held to be invalid and thus a person concerned is completely refused 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.The Court thereafter observed that: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 therefor 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 Courtreferred to above, we hold that the appellant was undoubtedly a person interested as contemplated bySection 18(1)of the Act.15. The matter is no longer res Integra and is now concluded for this Court by the decision of the Full Bench of this Court in the case ofGujarat Housing Board v. Nagajibhai Laxmanbhai and Ors.. The learned single Judge of this Court noticed that there was a conflict of opinion.The decision of this Court in the case ofMahwa Municipality v. Mehta Kiritkumar Umedchand and Ors.and that of Supreme Court in the case of The Municipal Corporation of the City of Ahmedabad v. Chandulal Shamaldas Patel and Ors. 1973 (3) SCC 821 took the view that the body for the benefit of which the acquisition is made is not a necessary party.While the Supreme Court in the case ofHimalaya Tiles(supra) took the view that local body or company is a necessary party and therefore the matter was referred to a larger bench.The Hon'ble Chief Justice P.R. Gokulakrishnan speaking for the Full Bench considered at length the decision of the Supreme Court under Order I, Rule 10 of the Civil Procedure Code in the case ofRazia Begum v. Anwar BegumAIR 1958 SC 886 and also the decision of the Supreme Court in the case ofHimalaya Tiles(supra).After referring to the aforesaid decision, the Full Bench of this High Court concluded that the decision of the Supreme Court inHimalaya Tiles(supra) holds the field and a local authority or company for whose benefit the acquisition is made is an interested party whose presence is necessary to effectively and completely decide the issue in question. If the Court in its discretion feels that such company is an interested party and its presence is necessary to actually and completely decide the issue and settle all question involved in the suit, it has ample power to add such company as party defendant in the suit. The Court found that when the acquisition is for the benefit of a company and when the entire amount of compensation is to come out of the funds of the company, such company has all the stake in the result of litigation and therefore it can be said to be an interested party in the litigation. A proceeding tan be effectively and completely decided only in presence of such company.The Court in the alternative held that even if it is considered that such a company is not a necessary party, there cannot be any two opinions in view of the decision of the Supreme Court of India in the case ofHimalaya Tiles(supra) that the company is a proper party to be added as party defendant to the suit.16. From the aforesaid decision of the Full Bench of the Gujarat High Court, in my opinion, no scope is left for any controversy and it must be held that the present petitioner, namely, Gujarat Narmada Valley Fertilizer Company limited for whose benefit the acquisition was made was necessary party and was required to be impleaded as party opponent in land reference cases.17. Before I conclude my discussion, it would be necessary to refer to the decision of Allahabad High Court in the case of Gorakhpur Deve' lopmenlAuthority v. District Judgewhere the Division Bench of Allahabad High Court speaking through Chief Justice B.P. Jeevan Reddy (as His Lordship then was) took the view that provisions of Order I, Rule 10 does not apply to proceedings underSection 18of the Land Acquisition Act, and further held that when acquisition is for local authority or company, beneficiary cannot apply for impleading nor can it be impleaded as party. It took the view that such beneficiary has a restricted right to appear and adduce evidence in support of his case. In my opinion, it is not possible for this Court to agree with the view expressed by the learned Judge of the Division Bench of the Allahabad High Court inasmuch as so far this Court is concerned, the matter is finally concluded by the decision of the Full Bench of this Court. The decision of Allahabad High Court in so far as it runs counter to the decision of the Full Bench of this Court cannot, therefore, be accepted as laying down correct law and I hold that the petitioner-Company is a necessary party and was required to be impleaded as party defendant in each land reference case pending before the trial Court.The decision of the trial Court placing reliance upon the decision of Allahabad High Court shall have to be quashed and set aside because the decision of the Full Bench of this Court which is in every respect binding upon the trial Court is ignored by it.17.1. In my opinion, even otherwise, the controversy as to whether a local authority or any company for whose benefit the land is acquired, can be said to be "person interested" within the meaning ofSection 18and whether such party has a right of being impleaded as respondent in reference proceedings on the ground that its interest would be adversely affected in case of enhancement of compensation, is now finally solved by recent decision of the Supreme Court of India in the case of Union of India v. Shersingh . In the case before the Supreme Court, the State of Haryana acquired land for National Security Guard as desired by the Union of India. During pendency of land owners' reference petitions underSection 18of the Land Acquisition Act, application was moved by Union of India through the Deputy Inspector General, National Security Guard for being impleaded as respondent on the ground that its interest would be adversely affected in case of enhancement of rate of compensation and that it would also be deprived of opportunity to file appeal in case of its non-inapleadment. Such application was rejected by reference Court as well as by High Court.On appeal to the Supreme Court after referring to the earlier decision of the Supreme Court in the case ofHimalaya Tiles(supra), the Supreme Court held that the person in whose benefit land is acquired would fall within the meaning of expression "any person interested" and is entitled to be impleaded as party respondent.The Court referred to the contrary view taken by the Court of Punjab & Haryana in Kulbhushankumar & Co. v. State of Punjab  as well as another Pull Bench decision of the same High Court in the case ofIndo-Swiss Times Limited v. Umrao.The Court thereafter extensively referred to its earlier decision in the case ofHimalaya Tiles(supra) and also referred to the provisions ofSection 18andSection 20(2)of the Land Acquisition Act and also Order I, Rule 10 of the Civil Procedure Code.The contention that the decision of the Supreme Court inHimalaya Tiles(supra) was in conflict with its earlier decision in the case of Municipal Corporation of the City of Ahmedabad (supra) was not accepted and it was held that the decision of the Supreme Court in the said case cannot be said to be a decision on the question which was raised before the Supreme Court inHimalaya Tiles(supra).The Court found that the view which was taken by the Supreme Court inHimalaya Tiles(supra) has been consistently followed by the Supreme Court in subsequent cases, namely, in the case of Neelgaganbhai v. State of Karnataka  and in the case of Knshi Upaj Mandi Samiti v. Ash ok Singhal (1991 Suppl. (2) SCC 419.The Supreme Court held that the Full Bench decision of Punjab and Haryana High Court was contrary to the law laid down by the Supreme Court inHimalaya Tiles(supra) and it hi Id that local authority and/or company for whose benefit the lacd is acquired is a person interested within the meaning ofSection 18and is entitled to be impleaded as party respondent to the proceeding for compensation.In view of the lancet decision of the Supreme Court which has expressly overruled, the view of the Punjab and Haryana High Court which is same as that of Allahabad High Court in the case ofGorakhpw Development Authority(supra), I am of the opinion that it shall have to be held with respect to the Judges of Allahabad High Court that the decision of Allahabad High Court inGorakhpw Development Authority(supra) is no longer good law and it stands impliedly overruled by the recent decision of the Supreme Court in the case of Union of India v. Shersingh (supra).18. In the result, this group of Civil Revision Applications succeeds. The judgment and order of Second Joint District Judge dated 12-2-1993 is quashed and set aside and present petitioner is ordered to be impleaded as party opponent in Lind Reference Cases Nos. 30 to 32 of 1991 and 37 to 65 of 1991. Rule made absolute. No order as to costs.