Union Of India & Ors V. Shiv Raj & Ors.

Union Of India & Ors V. Shiv Raj & Ors. [2014] Insc 249 (7 May 2014)

Court Judgment Information

Year: 2014
Date: 7 May 2014
Court: Supreme Court of India
INSC: [2014] INSC 249

Text of the Court Opinion

(Refortable) IN THE SUPREME COURT OF INDIA

Civil Appelate Jurisdiction

CIVIL APPEAL NOS. 5478-5483 OF 2014 (Arising out of S.L.P.(C) Nos.

24297-24302 of 2007) Union of India & Ors. ` . Appellants Versus Shiv Raj & Ors. .

Respondents

DR. B.S. CHAUHAN, J.

1. These appeals have arisen from the impugned judgment and order dated 11.5.2007 passed by the High Court of Delhi in Writ Petition (Civil) Nos. 2529 of 1985; 889 of 1986; 988 of 1986; 2155 of 1987;

2645 of 1987; and 2747 of 1987, by which and whereunder, the High Court has quashed the land acquisition proceedings in view of the fact that the objections filed by the respondents-tenure holders under Section 5A of Land Acquisition Act, 1894 (hereinafter referred to as `the Act 1894â€™), had not been considered by the statutory authorities in strict compliance of principles of natural justice and thus, the subsequent proceedings stood vitiated, relying on the main judgment and order of the same date passed in Writ Petition (Civil) No.424 of 1987 titled Chatro Devi v. Union of India.

2. Facts and circumstances giving rise to these appeals are that:

A. The land of the respondents-tenure holders being survey no.

619/70, etc. admeasuring 50,000 bighas situated in revenue village Chhatarpur, stood notified under Section 4 of the Act 1894 on 25.11.1980 for public purposes, namely, the â€œplanned development of Delhiâ€ and objections under Section 5A were invited from the persons interested within 30 days of the said Notification.

B. Respondents – persons interested, filed their objections under Section 5A of the Act 1894. However, without considering and disposing of the same, declaration under Section 6 of the Act 1894 was made on 7.6.1985. Notices under Sections 9 of the Act 1894 were also issued on 30.12.1986 to the persons interested. It was at this stage that the tenure holders filed writ petitions before the High Court challenging the acquisition proceedings contending that proceedings could not be continued without disposing of the objections filed by them under Section 5A of the Act 1894. Admittedly, the Award No. 15/1987-88 was made by the Land Acquisition Collector on 5.6.1987. C. In respect of the land covered by the same notification under Section 4 of the Act 1894, a very large number of writ petitions had been filed. The said writ petitions filed on different grounds were decided by different Benches at different points of time. So far as the present group of cases is concerned, the matter was heard at length and a Division Bench of the Delhi High Court examined the contentions raised on behalf of the tenure holders/persons interested which vide judgment and order dated 3.3.2005 held that the notification under Section 6 of the Act 1894 was within the period stipulated for the purpose after excluding the period during which the interim stay order passed by the High Court remained into operation and where the objections have not been filed, the impugned declaration under Section 6 of the Act 1894 could not be assailed on the ground of invalidity of inquiry under Section 5A of the Act 1894. However, on the said issue in the cases where the objections had been filed by the tenure holders and they had been given personal hearing by one Collector but the report was submitted by his successor i.e. another Collector, the Division Bench differed in opinion whether the report could be held to be legal or not, mainly relying upon the Constitution Bench judgment of this Court in Gullapalli Nageswara Rao & Ors. v. Andhra Pradesh State Road Transport Corporation & Anr., AIR 1959 SC 308 wherein it has categorically been held that the Authority which hears the objectors must pass the order. In case an Authority hears the objectors and demits the office or stands transferred, his successor should hear the parties afresh and not giving the opportunity of fresh hearing by the successor officer would amount to failure of principles of natural justice and his order would stand vitiated.

D. In view thereof, the matter was referred to the third Judge vide order dated 3.3.2005 and vide judgment and order dated 20.12.2006, the Honâ€™ble third Judge held that in such a situation where objections had been filed and had been heard by one Collector and the report had been submitted by another Collector, the proceedings stood vitiated being in violation of principles of natural justice.

E. In view of the majority opinion, as is evident from the order dated 11.5.2007, the proceedings in such an eventuality stood quashed by the impugned judgment and order.

Hence, these appeals.

3. Shri P.P. Malhotra, learned Additional Solicitor General, Ms.

Geeta Luthra and Shri Sanjay Poddar, learned Senior Counsel, have addressed a large number of legal and factual issues and also submitted that the judgment and order of the High Court are not sustainable in the eyes of law. Therefore, the question quashing the land acquisition proceedings in such circumstances did not arise.

More so, the commencement of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as the Act 2013) would not take away the proceedings initiated under the Act 1894 by operation of law as provided under Section 24 of the Act 2013. In the instant case, in case, the appeals succeed on the main ground as to whether the successor officer could submit the report on 5A objections there could be no prohibition for the appellants to proceed with the land acquisition proceedings initiated in 1980. The objections raised were vague and had been in respect of limitation and were not specific in nature. None of the writ petitioners had raised the issue about violation of principles of natural justice in the writ petitions, though some of them amended their writ petitions but at a subsequent stage. Some of the writ petitions had been filed by persons who came into possession of the land subsequent to Section 4 notification.

4. On the contrary, Shri Mukul Rohatgi, Shri Shyam Diwan and Shri Vinay Bhasin, learned senior counsel appearing on behalf of the respondents, have vehemently opposed the appeals contending that in view of the fact that the acquisition proceedings stood quashed finally by the impugned judgment dated 11.5.2007 and a period of 7 years has lapsed and the possession is still with the tenure holders.

In view of the Act 2013 coming into force, the proceedings have lapsed by virtue of the provisions contained in Section 24 of the said Act.

The issues raised herein on behalf of the Union of India had not been raised before the High Court. Amendments were allowed by the High Court in a very large number of writ petitions about violation of principles of natural justice i.e. the objections under Section 5-A were not disposed of in accordance with law.

5. We have considered the rival submissions made by the learned counsel for the parties and perused the record.

6. Section 5-A of the Act 1894 was not there in the original statute.

In J.E.D. Ezra v. Secy. of State for India (1902-1903) 7 CWN 249, the Calcutta High Court expressed its inability to grant relief to the owner of the property whose land was sought to be acquired without giving any opportunity of hearing observing that there was no provision in the Act requiring observance of the principles of natural justice. It was subsequent to the said judgment that the Act was amended incorporating Section 5-A w.e.f. 1.1.1924. The Statement of Objects and Reasons for the said amendment provided that the original Act did not oblige the Government to enquire into and consider any objection of the persons interested nor the Act provided for right of hearing to the person whose interest stands adversely affected.

7. In Nandeshwar Prasad v. U.P. Government, AIR 1964 SC 1217, this Court dealt with the nature of objections under Section 5-A of the Act 1894 observing as under:

â€œ13. The right to file objections under Section 5-A is a substantial right when a personâ€™s property is being threatened with acquisition and we cannot accept that that right can be taken away as if by a side wind.â€

8. The rules of natural justice have been ingrained in the scheme of Section 5-A of the Act 1894 with a view to ensure that before any person is deprived of his land by way of compulsory acquisition, he must get an opportunity to oppose the decision of the State Government and/or its agencies/instrumentalities to acquire the particular parcel of land.

Section 5-A(2) of the Act 1894, which represents statutory embodiment of the rule of audi alteram partem, gives an opportunity to the objector to make an endeavour to convince the Collector that his land is not required for the public purpose specified in the notification issued under Section 4(1) of the Act 1894 or that there are other valid reasons for not acquiring the same. Thus, section 5-A of the Act 1894 embodies a very just and wholesome principle that a person whose property is being or is intended to be acquired should have a proper and reasonable opportunity of persuading the authorities concerned that acquisition of the property belonging to that person should not be made.

On the consideration of the said objection, the Collector is required to make a report. The State Government is then required to apply mind to the report of the Collector and take final decision on the objections filed by the landowners and other interested persons.

Then and then only, a declaration can be made under Section 6(1) of the Act 1894.

9. Therefore, Section 5-A of the Act 1894 confers a valuable right in favour of a person whose lands are sought to be acquired. It is trite that hearing given to a person must be an effective one and not a mere formality. Formation of opinion as regard the public purpose as also suitability thereof must be preceded by application of mind having due regard to the relevant factors and rejection of irrelevant ones. The State in its decision making process must not commit any misdirection in law. It is also not in dispute that Section 5-A of the Act, 1894 confers a valuable important right and having regard to the provisions, contained in Article 300A of the Constitution of India has been held to be akin to a fundamental right.

10. Thus, the limited right given to an owner/person interested under Section 5-A of the Act, 1894 to object to the acquisition proceedings is not an empty formality and is a substantive right, which can be taken away only for good and valid reason and within the limitations prescribed under Section 17(4) of the Act, 1894.

11. The Land Acquisition Collector is duty-bound to objectively consider the arguments advanced by the objector and make recommendations, duly supported by brief reasons, as to why the particular piece of land should or should not be acquired and whether the plea put forward by the objector merits acceptance. In other words, the recommendations made by the Land Acquisition Collector should reflect objective application of mind to the entire record including the objections filed by the interested persons.

(See : Munshi Singh & Ors. v. Union of India, AIR 1973 SC 1150; Union of India & Ors. v. Mukesh Hans, AIR 2004 SC 4307; Hindustan Petroleum Corporation Ltd v. Darius Shahpur Chenai and Ors., AIR 2005 SC 3520;

Anand Singh & Anr v. State of U.P. & Ors., (2010) 11 SCC 242; Dev Sharan v. State of U.P., (2011) 4 SCC 769; Raghbir Singh Sehrawat v. State of Haryana, (2012) 1 SCC 792; Usha Stud and Agricultural Farms (P) Ltd. v. State of Haryana, (2013) 4 SCC 210; and Womenâ€™s Education Trust v. State of Haryana, (2013) 8 SCC 99).

12. This Court in Gullapalli Nageswara Rao (supra), held:

â€œPersonal hearing enables the authority concerned to watch the demeanour of the witnesses and clear up his doubts during the course of the arguments, and the party appearing to persuade the authority by reasoned argument to accept his point of view. If one person hears and another decides, then personal hearing becomes an empty formality. We therefore hold that the said procedure followed in this case also offends another basic principle of judicial procedure.â€ (Emphasis added)

13. This Court in Rasid Javed & Ors. v. State of U.P. & Anr., AIR 2010 SC 2275 following the judgment in Gullapalli (supra), supra held that a person who hears must decide and that divided responsibility is destructive of the concept of hearing is too fundamental a proposition to be doubted.

14. A similar view has been re-iterated by this Court in Automotive Tyre Manufacturers Association v. Designated Authority & Ors., (2011) 2 SCC 258, wherein this Court dealt with a case wherein the Designated Authority (DA) under the relevant Statute passed the final order on the material collected by his predecessor in office who had also accorded the hearing to the parties concerned. This court held that the order stood vitiated as it offended the basic principles of natural justice.

15. In view of the above, the law on the issue can be summarised to the effect that the very person/officer, who accords the hearing to the objector must also submit the report/ take decision on the objection and in case his successor decides the case without giving a fresh hearing, the order would stand vitiated having been passed in violation of the principles of natural justice.

16. Before proceeding further, it is desirable to refer to the relevant statutory provisions of the Act 2013 which reads as :

?â€œ24. (1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (a) Where no award under Section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply or (b) Where an award under said Section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.

(2) Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 where an award under the said section 11 has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act.

Provided that where an award has been made and compensation in respect of a majority of land holding has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under Section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act”

17. The provisions of the Act 2013 referred to hereinabove have been considered by a three judge bench of this court in Pune Municipal Corporation and Anr. v. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183. In the said case, the tenure-holders had challenged the acquisition proceedings before the Bombay High Court by filing nine writ petitions, although two of such writ petitions had been filed before making the award and seven had been filed after the award. The land acquisition proceedings had been challenged on various grounds. The High Court allowed the writ petitions and quashed the land acquisition proceedings and issued certain directions including restoration of possession as in the said case the possession had been taken from the tenure-holders. This Court in the appeal filed by the authority for whose benefit the land had been sought to be acquired, and who had been handed over the possession as the land vested in the State, approached this Court but the Court did not enter into the merit regarding the correctness of the judgment impugned therein rather held that it was not so necessary to deal with the correctness of the judgment in view of the provisions of the Act 2013 which provide for re-compulsory acquisition of land from the very beginning.

The Court held as under:

â€œ11. Section 24(2) also begins with non obstante clause. This provision has overriding effect over Section 24(1).

Section 24(2) enacts that in relation to the land acquisition proceedings initiated under 1894 Act, where an award has been made five years or more prior to the commencement of the 2013 Act and either of the two contingencies is satisfied, viz.; (i) physical possession of the land has not been taken or (ii) the compensation has not been paid, such acquisition proceedings shall be deemed to have lapsed. On the lapse of such acquisition proceedings, if the appropriate government still chooses to acquire the land which was the subject matter of acquisition under the 1894 Act then it has to initiate the proceedings afresh under the 2013 Act. The proviso appended to Section 24(2) deals with a situation where in respect of the acquisition initiated under the 1894 Act an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries then all the beneficiaries specified in Section 4 notification become entitled to compensation under 2013 Act.

X X X

19. Now, this is admitted position that award was made on 31.01.2008. Notices were issued to the landowners to receive the compensation and since they did not receive the compensation, the amount (Rs. 27 crores) was deposited in the government treasury. Can it be said that deposit of the amount of compensation in the government treasury is equivalent to the amount of compensation paid to the landowners/persons interested? We do not think so. In a comparatively recent decision, this Court in Ivo Agnelo Santimano Fernandes and Ors.

v. State of Goa and Anr. (2011) 11 SCC 506, relying upon the earlier decision in Prem Nath Kapur v. National Fertilizers Corpn. of India Ltd. (1996) 2 SCC 71, has held that the deposit of the amount of the compensation in the state's revenue account is of no avail and the liability of the state to pay interest subsists till the amount has not been deposited in Court.

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21. The argument on behalf of the Corporation that the subject land acquisition proceedings have been concluded in all respects under the 1894 Act and that they are not affected at all in view of Section 114(2) of the 2013 Act, has no merit at all, and is noted to be rejected. Section 114(1) of the 2013 Act repeals 1894 Act. Sub-section (2) of Section 114, however, makes Section 6 of the General Clauses Act, 1897 applicable with regard to the effect of repeal but this is subject to the provisions in the 2013 Act. Under Section 24(2) land acquisition proceedings initiated under the 1894 Act, by legal fiction, are deemed to have lapsed where award has been made five years or more prior to the commencement of 2013 Act and possession of the land is not taken or compensation has not been paid. The legal fiction under Section 24(2) comes into operation as soon as conditions stated therein are satisfied. The applicability of Section 6 of the General Clauses Act being subject to Section 24(2), there is no merit in the contention of the Corporation.â€ (Emphasis supplied)

18. The judgment of Bharat Kumar v. State of Haryana & Ors, 2014 (3) SCALE 393 was a reverse case wherein the land owner had lost before the High Court. The Court held:

â€œSub-section (2) of Section 24 commences with a non-obstante clause. It is a beneficial provision. In view of this provision, if the physical possession of the land has not been taken by the Acquiring Authority though the award is passed and if the compensation has not been paid to the land owners or has not been deposited before the appropriate forum, the proceedings initiated under the Act, 1894 is deemed to have been lapsed.â€ (See also: Bimla Devi & Ors. v. State of Haryana & Ors., Civil Appeal Nos. 3871-3876 of 2014 decided on 14.3.2014)

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