Gregory Patrao and Ors Versus Mangalore Refinery and Petrochemicals Limited & Ors.

Gregory Patrao and Ors Versus Mangalore Refinery and Petrochemicals Limited & Ors.

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 4105-4107 OF 2022
Gregory Patrao and Ors. …Appellant(s)
Versus
Mangalore Refinery and
Petrochemicals Limited & Ors. …Respondent(s)
J U D G M E N T
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court of Karnataka at Bengaluru in First
Appeal No. 259 of 2021 and other allied first appeals, by which the High
Court has set aside the judgment and award passed by the learned
Reference Court and has remanded the matter to the Reference Court to
decide the references afresh after affording an opportunity to all the
parties including respondent No. 1 herein - M/s. Mangalore Refineries &
Petrochemicals Ltd., Mangalore (MRPL), the original claimants / original
landowners have preferred the present appeals.
1
2. The lands belonging to the original claimants/original
landowners/appellants herein were acquired under Section 28(4) of the
Karnataka Industrial Areas Development Act, 1966 (hereinafter referred
to as “KIAD Act, 1966”) under three different notifications. The lands
were sought to be acquired for the development of the Karnataka
Industrial Areas Development Board (hereinafter referred to as “KIADB”)
for establishment of industrial areas. The Land Acquisition Officer after
affording an opportunity of hearing to the owners of the land passed an
award on 06.10.2009. At the instance of the landowners, the references
were made to the Reference Court. The Reference Court vide judgment
dated 29.07.2020 enhanced the amount of compensation.
2.1 Feeling aggrieved and dissatisfied with the judgment and award
passed by the Reference Court dated 29.07.2020, enhancing the
amount of compensation, respondent No.1 herein – MRPL, who was
allotted the land as a lessee by the KIADB, preferred the present
appeals before the High Court and prayed for leave to appeal. It was
the case on behalf of the MRPL that as the MRPL is the beneficiary of
the acquisition and under the agreement between the KIADB and MRPL,
the latter has to pay the additional amount of compensation and,
therefore, the burden to pay the additional compensation would be upon
the MRPL, therefore, MRPL ought to have been heard by the Reference
Court. It was the case on behalf of the MPRL that MRPL can be said to
2
be a “person interested”. Heavy reliance was placed upon the decisions
of this Court in the case of Himalayan Tiles and Marble (P) Ltd. Vs.
Francis Victor Countinho (Dead) By LRs', (1980) 3 SCC 223; UP
Awas Evam Vikas Parishad Vs. Gyan Devi (Dead) by LRs. and Ors.,
(1995) 2 SCC 326; Neelagangabai & Another Vs. State of Karnataka
& Others, (1990) 3 SCC 617; and Neyvely Lignite Corporation Ltd.
Vs. Special Tahsildar (Land Acquisition) Neyvely and Others, (1995)
1 SCC 221.
2.2 On the other hand, it was the case on behalf of the original owners
that the MRPL, being an allottee from the KIADB and the beneficiary of
the land acquisition proceedings is the KIADB and not the MRPL and the
amount awarded by the Land Acquisition Officer was deposited by the
KIADB, MRPL cannot be said to be a ‘person interested’. Relying upon
the decision of this Court in the case of Peerappa Hanmantha Harijan
Vs. State of Karnataka, (2015) 10 SCC 469, it was prayed to dismiss
the appeals.
2.3 By the impugned common judgment and order and mainly relying
upon the decision of this Court in the case of UP Awas Evam Vikas
Parishad (supra), the High Court has granted the permission to MRPL
to file the appeals challenging the judgment and award passed by the
Reference Court and thereafter has quashed and set aside the judgment
and award passed by the Reference Court by holding that the MRPL can
3
be said to be a “person interested” and therefore, ought to have been
heard before enhancing the amount of compensation. Thereafter, the
High Court has remanded the matter back to the Reference Court for a
decision afresh after affording an opportunity to all the parties to adduce
evidence including MRPL.
2.4 Feeling aggrieved and dissatisfied with the impugned common
judgment and order passed by the High Court, the original
claimants/original landowners have preferred the present appeals.

3. Shri Shailesh Madiyal, learned counsel appearing on behalf of the
appellants – original claimants has vehemently contended that in the
facts and circumstances of the case, the High Court has erred in
quashing and setting aside the judgment and award/order passed by the
Reference Court in the appeals preferred by MRPL by holding that
MRPL can be said to be a “person interested” and therefore, MRPL
ought to have been heard by the Reference Court before enhancing the
amount of compensation.
3.1 Shri Madiyal, learned counsel appearing on behalf of the
appellants has submitted that in the present case the real issue is as to
whether in an acquisition under KIAD Act, 1966, a post-acquisition
allottee of a parcel of land is a necessary party in the proceedings for the
determination of the compensation.
4
3.2 It is urged that in terms of Section 28(1) of the KIAD Act, 1966, the
acquisition is carried out by the State Government “for the purpose of
development by the Board, or for any other purpose, in furtherance of
the objects of the said Act”. That in the present case, the acquisition
was carried out by the State Government for the purposes of
“establishment of industry and to develop it” through the KIADB. It is
submitted that even the preliminary/final notifications do not mention that
the acquisition was for the MRPL. It is further urged that in terms of
Section 28(8) of the KIAD Act, 1966, the State Government, after it has
taken possession of the land, transfers the land to the KIADB and,
thereafter in terms of Section 32(2) of the KIAD Act, 1966, the KIADB is
empowered to deal with the land so transferred in accordance with the
regulations made and the directions given by the State Government in
this behalf. It is submitted that therefore, the company to which a land is
allotted under the KIAD Act, 1966 cannot be said to be the beneficiary of
the acquisition. It is submitted that as such the beneficiary is in fact the
KIADB which in turn allots the acquired land to companies such as
MRPL.
3.3 It is submitted that as such the issue involved in the present
appeals is not res integra in view of the direct decision of this Court in
the case of Peerappa Hanmantha Harijan (supra). That this Court, in
the above case dealing with an acquisition under the KIAD Act, 1966
5
itself, repelled the claim of the post-acquisition allottee company that it
has a right to participate in the award proceedings for determination of
the market value of the land. It is submitted that this Court, after
considering, inter alia, the scheme of the KIAD Act, 1966 held that the
allottee company is not a beneficiary of the acquired land under the
KIAD Act, 1966. That in the said decision, it is further observed and held
that Section 54 of the Land Acquisition Act, which provides a right to
appeal is only available to the landowners, State Government and the
beneficiary of the acquired land and not the allottee company. It is
submitted that in the present case, KIADB can be said to be a
beneficiary of the acquired land and not the allottee company - MRPL. It
is submitted that therefore, the appeals filed by the respondent No.1 –
MRPL before the High Court were not at all maintainable and the High
Court ought to have dismissed the said appeals in view of the law laid
down in the case of Peerappa Hanmantha Harijan (supra).
3.4 Now, so far as, reliance placed by the High Court on the judgments
of this Court in UP Awas Evam Vikas Parishad (supra) and Himalayan
Tiles and Marble (P) Ltd. (supra) while passing the impugned common
judgment and order, it is vehemently submitted by learned counsel
appearing on behalf of the appellants – original landowners that the High
Court has committed a grave error in relying upon the aforesaid
decisions. That both the aforesaid decisions, which have been heavily
6
relied upon by the High Court while passing the impugned common
judgment and order are not applicable at all with respect to an
acquisition under the KIAD Act, 1966.
3.5 Hence, the aforesaid decisions do not apply to the facts and
circumstances of the present case, since the said judgments pertain to
the acquisition under Part VII of the Land Acquisition Act r/w Section 50
of the Land Acquisition Act, which provides for direct acquisition for a
company/local authority. It is submitted that the conclusion of this Court
at para 24 of UP Awas Evam Vikas Parishad (supra) clearly states that
a company or local authority for whom a land is being acquired has a
right to participate before the Reference Court. But in the present case,
the land has been acquired for the KIADB, which is neither a company
nor a local authority.
3.6 It is submitted that as such the decisions of this Court in the case
of UP Awas Evam Vikas Parishad (supra) and Himalayan Tiles and
Marble (P) Ltd. (supra) have been considered and distinguished by this
Court in the case of Peerappa Hanmantha Harijan (supra) (at paras 61
and 62).
3.7 It is further submitted that even in the subsequent decision, this
Court in the case of Satish Kumar Gupta Vs. State of Haryana, (2017)
4 SCC 760 relying upon the case of Peerappa Hanmantha Harijan
(supra) has distinguished the judgments in the case of UP Awas Evam
7
Vikas Parishad (supra) and Himalayan Tiles and Marble (P) Ltd.
(supra), and has held and taken a view that a post-acquisition allottee of
land is neither a necessary or proper party nor has any locus to be heard
in the matter of determination of compensation under the scheme of the
Land Acquisition Act.
3.8 It is further submitted by learned counsel appearing on behalf of
the appellants that as such the High Court has committed a grave error
in not following a binding precedent of this Court rendered in the case of
Peerappa Hanmantha Harijan (supra). That the aforesaid judgment of
this Court was binding upon the High Court but the High Court has not
followed the same and has observed on the basis of an erroneous
reasoning that the decision of this Court in UP Awas Evam Vikas
Parishad (supra), being a decision of Three Judge Bench as compared
to a decision of Two Judge Bench in Peerappa Hanmantha Harijan
(supra) binds the High Court. It is submitted that the High Court has not
properly appreciated and considered the fact that the decision of this
Court in the case of UP Awas Evam Vikas Parishad (supra) was
subsequently considered and distinguished by this Court in the case of
Peerappa Hanmantha Harijan (supra). Therefore, the High Court was
bound by the decision of this Court in the case of Peerappa Hanmantha
Harijan (supra) even on the doctrine of stare decisis as embodied in
8
Article 141 of the Constitution and reliance is placed on the following
decisions of this Court:-
“Director of Settlements, A.P. Vs. M.R. Apparao, (2002)
4 SCC 638 (para 7); Rashmi Metaliks Ltd. Vs. Kolkata
Metropolitan Development Authority, (2013) 10 SCC
95 (para 7) and Bir Singh Vs. Mukesh Kumar, (2019) 4
SCC 197 (para 30).
3.9 Making the above submissions, it is prayed to allow the present
appeals.
4. Present appeals are vehemently opposed by Ms. Shalini Sati
Prasad, learned counsel appearing on behalf of the respondent No.1 –
MRPL.
4.1 It is submitted by learned counsel appearing on behalf of the
respondent No.1 – MRPL that the present appeals raise the question as
to whether respondent No.1 – MRPL can be said to be a “person
interested” for the purpose of Section 18(1) of the Land Acquisition Act,
1894 and consequently, whether the respondent No. 1 was a proper
party in the proceedings before the Learned Reference Court. It is
submitted that as such there is no infirmity in the impugned judgment
and order passed by the High Court as the High Court has relied upon
9
the direct judgments of this Court in the case of UP Awas Evam Vikas
Parishad (supra) and Himalayan Tiles and Marble (P) Ltd. (supra).
4.2 Learned counsel appearing on behalf of the MRPL has vehemently
submitted that the MRPL can be said to be a “person interested” for the
purpose of Sections 18 and 20 of the Land Acquisition Act and Section
29(4) of the KIAD Act, 1966 and therefore was a proper party in the
proceedings before the Reference Court.
4.3 It is submitted that there is no requirement under Section 28(1) or
Section 28(4) of the KIAD Act, 1966 to make a statement in the
notification as to the specific company for which the land is intended to
be acquired. It is submitted that even otherwise in the agreement
between KIADB and the MRPL, liability to pay the enhanced amount of
compensation would be upon the MRPL and therefore, before enhancing
the amount of compensation, the Reference Court ought to have heard
the MRPL. That the MRPL cannot be made liable to bear the financial
burden of the enhanced awarded amount without a fair chance of
contesting the enhancement by the Reference Court. Therefore, the
High Court has rightly remanded the matter to the Reference Court to
provide the MRPL, who is a “person interested”, an opportunity to be
heard before awarding the enhanced amount of compensation to the
landowners.
10
4.4 It is further submitted by the learned counsel appearing on behalf
of respondent No.1 – MRPL that as per Section 2(11) of the KIAD Act,
1966, the expression “person interested” has the same meaning
assigned to it in Section 3 of the Land Acquisition Act. That as per
Section 3(b) of the Land Acquisition Act, the expression “person
interested” includes all persons claiming an interest in compensation to
be made on account of the acquisition of the land under the said Act;
and a person shall be deemed to be interested in land if he is interested
in an easement affecting the land.
4.5 It is submitted that in the present case, KIADB constituted under
the KIAD Act, 1966 had executed an agreement with the MRPL dated
08.12.1994. Accordingly, in view of the said agreement with the KIADB,
the land was acquired pursuant to the three different notifications issued
by the State under Section 28(4) of the KIAD Act, 1966. That the land
was granted to respondent No. 1 - MRPL by the State Level Single
Window Clearance Committee whose approvals are binding on all
departments and authorities in terms of Section 8 of the Karnataka
Industries Facilitation Act 2002. It is submitted that therefore, MRPL can
be said to be a “person interested” in the acquired land.
4.6 On the submission that the MRPL can be said to be a “person
interested” under the relevant provisions of the Land Acquisition Act
and/or KIAD Act, 1966 and therefore a proper party before the
11
proceedings, the learned counsel appearing on behalf of the respondent
No.1 has heavily relied upon the judgments of this Court in the case of
UP Awas Evam Vikas Parishad (supra); Himalayan Tiles and Marble
(P) Ltd. (supra) as well as another decision of this Court in the case of
Delhi Development Authority Vs. Bhola Nath Sharma (Dead) by
L.Rs. and Ors., 2011 (2) SCC 54.
4.7 It is further submitted that as such and being well aware that the
land had been acquired for the MRPL, the appellants herein in fact had
impleaded MRPL as a party respondent in their petition challenging the
acquisition before the High Court. Therefore, thereafter in the
references made for enhancement of compensation, the landowners
ought to have impleaded the MPRL, being an affected and proper party.
4.8 Learned counsel appearing on behalf of the MRPL has further
submitted that MRPL cannot be made liable to bear the financial burden
of the enhanced amount of compensation without being given a fair
chance of contesting the enhancement of the amount of compensation.
Reliance is placed upon paras 22 and 41 of the case of UP Awas Evam
Vikas Parishad (supra). It is submitted that the ratio of this Court in the
case of UP Awas Evam Vikas Parishad (supra) in paras 22 and 41 has
not been considered and distinguished by this Court in the case of
Peerappa Hanmantha Harijan (supra). It is submitted that therefore,
even if it is presumed that the respondent No. 1 - MRPL does not have
12
any right to be impleaded in the proceedings before the learned
Reference Court, the principles of natural justice and the doctrine of
legitimate expectation would be attracted so as to ensure that the
respondent No. 1 – MRPL is not rendered remediless while being
burdened with the financial implications of the orders passed by the
learned Reference Court in the absence of any opposition to the
enhancement.
4.9 Making above submissions and relying upon the above decisions,
it is prayed to dismiss the present appeals.
5. Heard the learned counsel for the respective parties at length.
6. The short question, which is posed for the consideration of this
Court is, whether, respondent No.1 – MRPL, who is simply an allottee of
the land by the KIAD Board, after the acquisition of the lands under
Section 28 of the KIAD Act, 1966, which was for the benefit of Karnataka
Industrial Areas Development Board (KIADB) can be said to be a
“person interested” under the provisions of KIAD Act, 1966 and
therefore, was a proper party in the reference proceedings initiated at
the instance of the original landowners?
7. While answering the aforesaid issue/question, it is required to be
noted that in the present case, the land has been acquired under the
provisions of the KIAD Act, 1966 and the notification has been issued
under Section 28(1) of the KIAD Act, 1966. The land has been acquired
13
by the State Government for KIADB under three different notifications.
After the lands were acquired, respondent No.1 – MRPL has been
allotted the lands acquired as per the agreements between the KIADB
and the MRPL. The present is not an acquisition under the provisions of
the Land Acquisition Act and therefore, as such, neither Section 50 of
the Land Acquisition Act, 1894 nor any other provisions of the Land
Acquisition Act, 1894 shall be applicable with respect to the lands
acquired under the provisions of the KIAD Act, 1966. Taking into
consideration, the aforesaid factual aspects, the impugned judgment and
order passed by the High Court in which it has heavily relied upon the
decisions of this Court in the case of UP Awas Evam Vikas Parishad
(supra) and Himalayan Tiles and Marble (P) Ltd. (supra) are required
to be considered.
7.1 At the outset, it is required to be noted that as such, the issue
involved in the present appeal in respect of the acquisitions under the
KIAD Act, 1966 and the right of the subsequent allottee to participate in
the reference proceedings and whether the subsequent allottee can be
said to be a “person interested” under the provisions of the KIAD Act,
1966 is no longer res integra. While deciding the acquisition under the
very KIAD Act, 1966 and the right of the subsequent allottee, who has
been allotted the land by the KIADB in the case of Peerappa
Hanmantha Harijan (supra) after distinguishing the decision of this
14
Court in the case of UP Awas Evam Vikas Parishad (supra) and
Himalayan Tiles and Marble (P) Ltd. (supra), it is specifically observed
and held by this Court that an allottee company cannot be said to be a
beneficiary or a “person interested” entitled for hearing before
determination of compensation. By observing and holding so, this Court
had an occasion to consider the entire scheme of acquisition under the
KIAD Act, 1966 and has distinguished the acquisition under the Land
Acquisition Act, 1894. Before this Court also, the High Court remanded
the matter at the instance of the allottee company in the writ petition filed
by the allottee company to the Reference Court. This Court set aside
the same while holding that the allottee company, who has been allotted
the land under the provisions of the KIAD Act, 1966, can neither be said
to be a beneficiary nor a “party interested” entitled for hearing before
determination of compensation. This Court in the case of Peerappa
Hanmantha Harijan (supra) considered in detail the allotment/lease
agreement in favour of the allottee/lessee and also the relevant
provisions of the KIAD Act, 1966 and has observed in paragraphs 50 to
54 as under:-
“50. On a careful examination of the aforesaid clauses
of the lease agreement executed between the parties
in respect of the land of the appellants, it becomes
manifestly clear that the said agreement is executed
by KIADB in favour of the Company after allotment of
15
land was made in favour of the Company as provided
under Regulations 10(a) and (c) of
the KIADB Regulations respectively by following the
procedure of inviting applications and submission of
the applications by the interested parties along with the
required deposits towards the cost of the land. Further,
Clauses 5(a) and (b) of the lease agreement referred
to supra, would clearly state that the premium
indicated in Clause 1 of the lease agreement
represents the tentative cost of the land and in the
event of the lessor incurring payment of amounts to the
landowners over and above the awards made by the
acquiring authority by virtue of the award passed by
the competent court of law or in view of the provisions
of the LA Act in respect of demised premises or any
part thereof, the same shall be met by the lessee
within one month from the date of receipt of the
communication signed by the Executive Member or
any other officer authorised by the lessor. Clause 5(b)
also makes similar provision to that effect between the
lessor and the lessee.
51. From a careful reading of the aforesaid clauses of
the lease agreement along with the provisions of
Section 32(2) of the KIAD Act and Regulations 4, 7,
10(b), (c) and (d) of the KIADB Regulations, it is clear
that the Company is only the lessee by way of
allotment of the land as the same has been allotted
by KIADB in its favour and has executed the lease deed
in its favour in respect of the allotted land.
52. In view of the aforesaid documents, namely, the
notifications issued under Sections 28(1) and 28(4) of
the KIAD Act by the State Government, it can be safely
concluded by us that the acquisition of the land
involved in these proceedings is for the purpose of
industrial development by KIADB in Sedam Taluk.
16
Therefore, the beneficiary of the acquired land is
only KIADB but not the Company as claimed by it. A
reading of Section 28(5) of the KIAD Act makes it clear
that the land which is acquired by the State
Government statutorily vests absolutely with it. After
following the procedure provided under Sections 28(6)
and (7) of the KIAD Act, the State Government takes
possession of the acquired land from the
owners/person/persons who are in possession of the
land and transfers the same in favour of KIADB for its
development and disposal of the same in accordance
with Regulation 10(a) of the KIADB Regulations,
referred to supra.
53. In the instant case, a perusal of the provisions of
the lease agreement executed between the parties
referred to supra and Regulation 10 clauses (a), (c),
(d) and (e) of the KIADB Regulations make it
abundantly clear that the Company is only the
allottee/lessee of the acquired land and as per Clauses
5(a) and (b) of the lease agreement referred to supra,
the premium indicated in the lease agreement in
respect of the allotted land in its favour represents the
tentative cost of the land. It has been further specified
in the lease agreement that in the event of the lessor
incurring the payment of amounts to the landowners
over and above the awards made by the acquiring
authority by virtue of awards passed by the competent
court of law in view of the provisions of the Land
Acquisition (Amendment) Act, 1984 in respect of
demised premises or any part thereof, the same shall
be met by the lessee within one month from the date of
receipt of communication signed by the Executive
Member or any other officer authorised by the lessor.
In view of the above conditions of the lease
agreement, neither KIADB nor the Company can
contend that the acquisition of the land involved in
these proceedings is in favour of the lessee Company.
17
Therefore, the Company is neither a beneficiary nor an
interested person as claimed by them in terms of
Section 2(11) of the KIAD Act or under Section 3(b) of
the LA Act as per which, “person interested” includes
all persons claiming an interest in compensation to be
made on account of the acquisition of land under the
KIAD Act and that a person shall be deemed to be
interested in the land if he is interested in an easement
affecting the land. It is necessary to examine Section
3(b) read with Section 9 of the LA Act, which deals with
notice to persons interested and Section 11, which
deals with enquiry and award to be passed by the
Deputy Commissioner/Land Acquisition Officer.
54. A careful reading of the aforesaid provisions of the
LA Act, the KIAD Act and the KIADB Regulations would
clearly go to show that the Company is neither a
beneficiary, nor an interested person in the land as on
the date of acquisition of the land, as the land was
acquired by the State Government in favour
of KIADB who is the beneficiary and it has allotted in
favour of the Company after the acquired land was
transferred in its favour by the State Government and
executed the lease agreement referred to supra.”
7.2 Thereafter, this Court distinguished the nature of acquisition under
the Land Acquisition Act from the acquisition under the KIAD Act, 1966
by observing as under in paragraphs 57, 58 and 60 to 65:-
“57. For the acquisition of land under the provisions of the
LA Act in favour of a company the mandatory procedure as
provided under Part VII of the LA Act and Rules must be
adhered to, that is not the case in the acquisition of land
involved in these proceedings as the acquisition of land is
under the provisions of the KIAD Act and therefore the
reliance placed upon the provision of Section 3(f)(viii) of
18
Karnataka LA Amended Act 17 of 1961 is not applicable to
the facts of the case on hand and therefore, the said
provision cannot be made applicable to the case on hand.
58. The definition of “public purpose” under the LA Act
cannot be imported to the acquisition of land by the State
Government for the industrial development under the
provision of the KIAD Act as the words “development”,
“industrial area” and “industrial estate” have been clearly
defined under sub-sections (5), (6) and (7) of Section 2 of
the KIAD Act which reads thus:
“2. (5) ‘Development’ with its grammatical
variations means the carrying out of levelling,
digging, building, engineering, quarrying or other
operations in, on, over or under land, or the
making of any material change in any building or
land, and includes redevelopment; and ‘to
develop’ shall be construed accordingly;
(6) ‘Industrial area’ means any area declared to
be an industrial area by the State Government by
notification which is to be developed and where
industries are to be accommodated; and
industrial infrastructural facilities and amenities
are to be provided and includes, an industrial
estate;
(7) ‘Industrial estate’ means any site selected
by the State Government where factories and
other buildings are built for use by any industries
or class of industries.”
X X X X
60. The reliance placed upon the provisions of Sections
50(1) and (2) of the LA Act, also are not applicable to the
case on hand for the reason that Section 50 of the LA Act
applies to the acquisition of land in favour of a company by
19
the State Government by following the mandatory procedure
contemplated under Part VII of the LA Act and relevant rules
framed for that purpose. Therefore, the claim made by the
Company that it has got every right to participate in the
proceedings for determination and redetermination of the
market value of the acquired land and award of
compensation passed by the Land Acquisition Officer or
Deputy Commissioner or before the Reference Court or the
appellate court is wholly untenable in law and therefore, the
submissions made on behalf of the Company cannot be
accepted and the same is rejected.
61. Further, both the learned Senior Counsel on behalf
of KIADB and the Company have placed reliance on various
decisions rendered by this Court in support of their above
respective legal submissions that the Company is an
interested person and, therefore, it has got right to
participate in the proceedings before the Reference Court for
determination of compensation before passing the award
either by the Land Acquisition Officer or the Deputy
Commissioner or the Reference Court at the instance of the
owner or any other interested person. These include
judgments rendered by this Court in U.P. Awas Evam Vikas
Parishad v. Gyan Devi [(1995) 2 SCC 326] , Himalayan Tiles
and Marble (P) Ltd. v. Francis Victor Coutinho [(1980) 3 SCC
223] and P. Narayanappa v. State of Karnataka [(2006) 7
SCC 578] and other decisions which are not required to be
mentioned in this judgment as they are all reiteration of the
law laid down in the above cases.
62. The reliance placed on the various decisions of this
Court by both the learned Senior Counsel on behalf
of KIADB and the Company, is misplaced as none of the said
judgments relied upon are applicable to the fact situation in
the present case for the reason that those cases dealt with
reference to the acquisition of land under the provisions of
the LA Act, either in favour of the company or development
authorities, whereas in the case on hand, the acquisition
20
proceedings have been initiated under the KIAD Act for
industrial development by KIADB. Further, the original
acquisition record in respect of the acquired land involved in
the proceedings by the learned Standing Counsel on behalf
of the State of Karnataka as per our directions issued vide
our orders dated 17-11-2014 [Peerappa Hanmantha
Harijan v. State of Karnataka, 2014 SCC OnLine SC 1678,
wherein it was directed: “Issue notice to the State
Government. The learned counsel for the petitioners to take
out notice to the learned Standing Counsel appearing for the
State Government. Dasti, in addition, is also permitted. Mr
V.N. Raghupathy, learned counsel accepts notice for the
State of Karnataka and Mr Nishanth Patil, learned counsel
accepts notice for Karnataka Industrial Area Development
Board (for short ‘KIADB’). The learned counsel appearing for
the State Government and the learned counsel appearing
for KIADB are directed to produce the relevant records in
respect of the proceedings relating to land acquisition
involved in these matters. There shall be stay of the effect
and operation of the impugned order during the pendency of
these petitions. List the matters after four weeks. In the
meanwhile, all the respondents are at liberty to file written
statements, if any.”] and 24-3-2015 [Peerappa Hanmantha
Harijan v. State of Karnataka, 2015 SCC OnLine SC 1707,
wherein it was directed: “Heard Ms Kiran Suri, learned
Senior Counsel for the petitioners in SLPs (C) Nos. 31624-
25 of 2014 in part. List all the matters as part for further
hearing. Vide order dated 17-11-2014, learned counsel for
the State as well as the learned counsel for KIADB were
directed to produce the relevant records in respect of the
proceedings relating to land acquisition involved in these
matters, record as well as the records relating to allotment of
land. However, as per office records, nothing has been
produced so far. In this view of the matter, the learned
counsel for the State as well as the learned counsel
for KIADB are directed to comply with the order dated 17-11-
2014 and produce the relevant records in respect of the
proceedings relating to land acquisition and the allotment of
21
land involved in these matters before the next date of
hearing. List the matters on 15-4-2015.”], do not disclose the
fact that the acquisition of lands covered in the acquisition
notifications are in favour of the Company. Thus, the
acquisition of land in favour of KIADB is abundantly clear from
the preliminary and final notifications issued by the State
Government and thereafter following the procedure under
sub-sections (6) and (7) of Section 28 of the KIAD Act, it took
possession of the acquired land from the owners who were
in possession of the same and was transferred in favour
of KIADB for its disposal for the purpose for which lands were
acquired as provided under Section 32(2) of the KIAD Act
read with the Regulations referred to supra framed
by KIADB under Section 41(2)(b) of the KIAD Act. Therefore,
the reliance placed upon the judgments of this Court by the
learned Senior Counsel on behalf of the Company
and KIADB, are wholly inapplicable to the fact situation and
do not support the case of the Company.
63. In view of the foregoing reasons recorded by us on the
basis of the acquisition notifications issued by the State
Government under the statutory provisions of the KIAD Act
and therefore, we have to answer Points (i), (ii) and (iii) in
favour of the landowners holding that the Company is neither
the beneficiary nor interested person of the acquired land,
hence, it has no right to participate in the award proceedings
for determination of the market value and award the
compensation amount of the acquired land of the appellants.
Hence, the writ petition filed by the Company questioning the
correctness of the award passed by the Reference Court
which is affirmed by the High Court is not at all maintainable
in law. On this ground itself, the writ petition filed by the
Company should have been rejected by the High Court,
instead it has allowed and remanded the case to the
Reference Court for reconsideration of the claims after
affording opportunity to the Company, which order suffers
from error in law and therefore, the same is liable to be set
aside.
22
64. Further, the learned Judge of the High Court has
erroneously held that the allottee Company is a beneficiary
of the acquired land of the appellants, which finding of the
learned Judge is not correct both on facts and in law. The
findings and reasons recorded by the High Court in the
impugned judgment in allowing the writ petition and
quashing the award of the Reference Court and remanding it
back to the Reference Court and allowing the Company to
participate in the proceedings for redetermination of
compensation for the acquired land is wholly impermissible
in law and the same are in contravention of the provisions of
the KIAD Act, the LA Act, the KIADB Regulations and the
lease agreement, which has been executed by KIADB in
favour of the Company and therefore, the impugned
judgment and order [State of Karnataka v. Peerappa
Hanmantha Harijan, Review Petition No. 2537 of 2013 in
MFA No. 32157 of 2012, order dated 22-9-2014 (KAR)] is
liable to be set aside by allowing the appeals of the owners.
65. Further, the learned Single Judge of the High Court has
further committed an error in law in not appreciating Section
54 of the LA Act, which provision provides the right to appeal
to the landowners, or State Government and beneficiaries of
the acquired land but not to the company which is the
lessee. When the company does not have the right to file an
appeal against the award it also has no right to file a writ
petition. KIADB has filed the belated appeal after disposal of
the appeal filed by the appellants by the High Court and
against which award it has filed the present appeal
questioning the correctness of the same and prayed for
enhancement of compensation and the said appeal is being
disposed of by this common judgment after adverting to the
rival legal contentions urged on behalf of the parties. The
High Court has rightly dismissed the belated appeal filed
by KIADB.”
23
7.3 This Court thereafter had considered the decisions in the case of
UP Awas Evam Vikas Parishad (supra) and Himalayan Tiles and
Marble (P) Ltd. (supra) and has distinguished the same and has
observed and held that the decisions in the case of UP Awas Evam
Vikas Parishad (supra) and Himalayan Tiles and Marble (P) Ltd.
(supra) shall not be appliable with respect to the acquisition under the
KIAD Act, 1966. Once, this Court in the subsequent decision in the case
of Peerappa Hanmantha Harijan (supra) dealt with and considered the
earlier decisions in the case of UP Awas Evam Vikas Parishad (supra)
and Himalayan Tiles and Marble (P) Ltd. (supra) and distinguished the
same and observed and held with respect to the acquisition under the
KIAD Act, 1966 that the allottee company can neither be said to be a
“person interested” nor entitled for hearing before determination of
compensation, the said ratio was binding upon the High Court. Thus, it
was not open for the High Court to not follow the binding decision of this
Court in the case of Peerappa Hanmantha Harijan (supra) by
observing that in the subsequent decision in the case of Peerappa
Hanmantha Harijan (supra), the earlier decisions in the case of UP
Awas Evam Vikas Parishad (supra) and Himalayan Tiles and Marble
(P) Ltd. (supra) have not been considered. The High Court has not
noted that as such while deciding the case of Peerappa Hanmantha
Harijan (supra), this Court did consider the earlier decisions in the case
24
of UP Awas Evam Vikas Parishad (supra) and Himalayan Tiles and
Marble (P) Ltd. (supra) and had clearly distinguished the same. Not
following the binding precedents of this Court by the High Court is
contrary to Article 141 of the Constitution of India. Being a subsequent
decision, in which the earlier decisions were considered and
distinguished by this Court, the subsequent decision of this Court was
binding upon the High Court and not the earlier decisions, which were
distinguished by this Court.
7.4 Under the circumstances, the High Court has committed a
grave/serious error in passing the impugned judgment and order by
relying upon the judgments of this Court in the case of UP Awas Evam
Vikas Parishad (supra) and Himalayan Tiles and Marble (P) Ltd.
(supra) and by not following the subsequent decision of this Court in the
case of Peerappa Hanmantha Harijan (supra).
7.5 Now, so far as the reliance placed upon the decisions of this Court
in the case of UP Awas Evam Vikas Parishad (supra) and Himalayan
Tiles and Marble (P) Ltd. (supra) relied upon by the respondent No.1 –
MRPL and even relied upon by the High Court is concerned, at the
outset, it is required to be noted that the said decisions were with respect
to the acquisition under the Land Acquisition Act, 1894 and the
provisions of Land Acquisition Act, 1894, more particularly, Section 50 of
25
the Land Acquisition Act fell for consideration before this Court. As
observed and held by this Court in the subsequent decision in the case
of Peerappa Hanmantha Harijan (supra), the acquisition under the
Land Acquisition Act, 1894 and the acquisition under the KIAD Act, 1966
are both distinct and the provisions under both the Acts are
distinguishable.
7.6 We see no reason to take a different view than the view taken by
this Court in the case of Peerappa Hanmantha Harijan (supra) that the
MRPL being a subsequent allottee after the land was acquired by
KIADB, can neither be said to be a beneficiary nor a “person interested”
for the purpose of determination of compensation. Under the
circumstances, the impugned judgment and order passed by the High
Court taking a contrary view is unsustainable and the same deserves to
be quashed and set aside.
8. In view of the above and for the reasons stated above, present
appeals succeed. The impugned common judgment and order passed
by the High Court setting aside the judgment and award/order passed by
the Reference Court and remanding the matter to the Reference Court is
hereby quashed and set aside. The judgment and order passed by the
Reference Court Is hereby restored.
26
Present appeals are allowed accordingly. However, in the facts
and circumstances of the case, there shall be no order as to costs.
………………………………….J.
 [M.R. SHAH]
NEW DELHI; ………………………………….J.
JULY 11, 2022. [B.V. NAGARATHNA]
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