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IN THE SUPREME COURT OF INDIA CIVIL  APPELLATE JURISDICTION

CIVIL  APPEAL  NO. 1505   OF 2003

STATE OF WEST BENGAL ... APPELLANT(S)

:VERSUS:

ANIL NASKAR ... RESPONDENT(S) WITH

CIVIL APPEAL NOs. 1509, 1511, 1512, 1513, 1514, 1515, 1516, 1517, 1518, 1519, 1520, 1521, 1522, 1523, 1524, 1525, 1526, 1527, 1528, 1529, 1530, 1531, 1532, 1533, 1534, 1535, 1536, 1537, 1538, 1539, 1540, 1541, 1542, 1543, 1544, 1555, 1556, 1557, 1558, 1559, 1560, 1561, 1562, 1563, 1564, 1565, 1566, 1567, 1568, 1569, 1570, 1571, 1572, 1573, 1574, 1575, 1576, 1577 and 1578 of 2003

O R D E R   

These appeals,  which are 60 in number, preferred by the State of West

Bengal and the West Bengal Housing Board, a body constituted and incorporated

under the West Bengal Housing Board Act, 1972, are before us aggrieved by and

dissatisfied  with  the  judgment  and order dated 21.12.2001 passed by a Division

Bench  of  the  Calcutta  High  Court,  refusing  to  interfere  with  an  award  dated

25.8.1992 passed by the Special Land Acquisition Judge, Alipore.   

The basic fact of the matter is not in dispute.

On the request made by the West Bengal Housing Board, a notification

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under Section 3(1) of the West Bengal Land (Requisition and Acquisition) Act, 1948

(“Act” for short) was issued on 3.12.1963, pursuant whereto possession of the lands

was taken on 29.12.1979.  The owners of  the lands were said to have been paid

rental  compensation  in  terms  of  the  provisions  of  the  said  Act,  for  the  period

29.12.1979 to 28.8.1988.   

On or before 28.2.1985, notice under Section 4(1A) of the Act was issued

declaring the intention of the State to acquire a vast tract of land.

Eventually, an award was passed by the Land Acquisition Collector on or

about 31.10.1988 awarding a total sum of Rs.1.42 crores. Although a large number

of land owners were satisfied therewith, 31 land owners filed applications before the

Collector for reference thereof in terms of Section 18 of the Act.   

Indisputably, the learned Judge of the Reference Court did not issue any

notice to the West Bengal Housing Board and in its absence, the parties adduced

their respective evidences.  

By  an  award  dated  25.8.1992,  the  Reference  Judge  awarded  a  sum of

Rs.59,41,337/- on the following premise:

“Sali lands (Agricultural land) @ Rs. 4726/- per Katha. Danga + Bagan + Bastu + Chunkhola (non-agricultural land) @ Rs. 5907/- per Katha. Tank + Doba (pond) @ Rs. 2362/- per Katha.”    

Aggrieved by and dissatisfied with the said award passed by the Reference

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Judge, the State of West Bengal preferred 31 appeals before the High Court and by

reason of  the  impugned  judgment dated  21.12.2001,  the  said  appeals  have  been

dismissed.  

Both the State of West Bengal as also the West Bengal Housing Board have

contended before us that only on 10.1.2002, the latter came to know of the said

judgment  of  the High  Court  when they were asked to  deposit  all  the  costs  and

expenditure incidental to and arising therefrom as the said expenses were required

to be borne by it, as per the order of the High Court.

The West Bengal Housing Board, thereafter, upon obtaining leave of this

Court, have preferred appeals.  Special leave petitions were also filed by the State of

West Bengal.

Mr. A. Sharan,  learned Additional  Solicitor General  for India  and Mr.

Tapas Ray, learned senior counsel appearing on behalf of the State of West Bengal

and the West Bengal Housing Board, inter alia, raised the following contentions:  

(1) The Reference Court failed to discharge its duties of issuing notice to the

requisitioning  authority,  namely,  the  Board  and  thus  it  has  been  denied  a

reasonable opportunity to place its case before the Reference Court;  

(2) The  lands  in  question  being  low  lands,  consisting  of  Shali,  Tank,

Chunkhola  and  Bastu,  the  Reference  Judge  and,  consequently,  the  High  Court,

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committed a serious error in so far as they relied upon the exemplars involving large

areas of land, whereas the land holders owned only small parcel of lands;  

(3) Both  the  High  Court  as  also  the  Reference  Court  failed  to  take  into

consideration that the State had to expend a huge amount for the development of

the area viz. a sum of Rs.2,82,32,532.00 which was required to be deducted from the

amount of compensation.   

(4) The High Court wrongly opined that as only a sum of Rs. 10 per sq. ft. has

been awarded to the land owners, no interference with the award of the Reference

Judge was called for.   

(5) The High Court by exercising its jurisdiction under Article 54 of the Land

Acquisition Act, 1894 should have considered the appeals on the merit of the matter

and, thus, should not have dismissed the same, almost summarily.

Mr.  Alok  Bhattacharya,  learned  counsel  appearing  on  behalf  of  the

respondents, on the other hand, supported the impugned judgments.  

Section 50 of the Land Acquisition Act provides that where the provisions

of the Act are put in force for the purpose of acquiring land, inter alia, at the cost of

any fund controlled or managed by a local authority, the charges for any incidental

to such acquisition shall be defrayed from the said fund.  Sub-section (2) of Section

50 lays down that in any proceeding held before the Court or Collector, in such

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cases,  the  local  authority  may  appear  and  adduce  evidence  for  the  purpose  of

determining the amount of compensation.  

Although  sub-section  (2)  of  Section  50  of  the  Land  Acquisition  Act

provides for an enabling provision, the question in regard to interpretation thereof

has come before this Court on a number of occasions.   

In U.P. Awas Evam Vikas Parishad v. Gyan Devi, (1995) 2 SCC 326, a

Constitution Bench of this Court opined:  

“24. To sum up, our conclusions are :  

1. 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.  

2. 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  on  the  date  on  which  the

matter of determination of compensation will be taken up.  

3. 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.

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4. 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.  

5. 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.  

6. 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 the determination of the

amount  of  compensation  by  the  Collector  and  oppose

enhancement of the said amount and also adduce evidence in that

regard.  

7. 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.  

8. In an appeal by the person having an interest in land seeking

enhancement  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.

9. Since a company for whom land is being acquired has the same

right as a local authority under Section 50(2), whatever has been

said with regard to a local authority would apply to a company

too.

10. The matters which stand finally concluded will, however, not

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be reopened.”

Yet again, in  Kanak & Anr. v. U.P. Avas Evam Vikas Parishad & Ors.,

(2003)  7  SCC  693, a  Division  Bench  of  this  Court,  following  the  aforesaid

Constitution Bench decision, held:

“37. Where an appeal has not been filed by the State, it was held

that such an appeal would be maintainable with the leave of the

Court.  However,  in  Gyan  Devi  this  Court  did  not  have  any

occasion to consider a provision like the one contained in Section

381 of the Mahapalika Adhiniyam and, thus, the observations of

the Court therein would not be relevant for the purpose of the

present  case.  The  High  Court,  having  regard  to  the  facts  and

circumstances of this case cannot be said to have committed any

illegality in allowing the writ petition.

38.  However,  having  said  so,  in  our  opinion,  the  High  Court

should have remitted the matter back to the Reference Court with

a direction that the respondent Parishad may be impleaded as a

party so as to enable it to cross-examine the witnesses examined on

behalf of the claimants and examine its own witnesses and bring

on record such other materials as it may deem fit and proper. It

goes  without  saying,  it  would  also  be  open  to  the  claimants  to

adduce evidence to the contra.”

Similar view was taken by this Court again in NTPC Ltd. v. State of Bihar

& Ors., (2004) 12 SCC 96, stating :  

“6.  The question  which  arises  for  consideration  is  whether  the

appellants  have a  right  to  be  impleaded in  all  references.  This

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question  is  no  longer  res  integra.  The  law  is  settled  by  a

Constitution Bench of this Court in the case of  U.P. Awas Evam

Vikas  Parishad  v.  Gyan  Devi.  In  that  case,  after  considering

various provisions of the Land Acquisition Act, it has been held

that the body on whose behalf the land is acquired is not just a

necessary party but is also a proper party before the Reference

Court. It has been held that not giving them notice either at the

stage of fixing compensation by the Collector or by the Reference

Court  affects  their  rights.  It  has  been  held  that  they  must  be

impleaded as a party in the reference proceedings.”

It  is  not  in  dispute  that  the  learned Reference  Judge  has  failed and/or

neglected to perform its statutory duty.  It is also a matter of some concern that even

the  State  of  West  Bengal  did  not  bring  the  same  to  the  notice  of  the  learned

Reference Judge or the High Court.  

Be that as it may, having regard to the fact that the Reference Court did

not issue any notice to the West Bengal Housing Board and as some arguable points

have been raised by the learned counsel for the appellants before us, in our opinion,

interest of justice will be subserved if the impugned judgments are set aside and the

matters  are  remitted  to  the  learned  Reference  Judge  for  consideration  thereof

afresh. It is directed accordingly.  

We place on record that although the learned counsel for the parties have

addressed  us,  also  on  the  merit  of  the  matters  and  pointed  out  that  both  the

Reference Judge as also the High Court had failed to consider the legal principles

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governing the grant of compensation, in view of the order proposed to be passed by

us, we do not intend to enter thereinto.  

We,  however,  direct  that  the  West  Bengal  Housing  Board  shall  file  its

written  statements  before  the  learned Reference Judge  within  three  weeks  from

date.  It shall  also file all other necessary documents which are in its power and

possession, within four weeks from date.   

If the parties intend to adduce any other or further evidence, they may be

permitted to do so wherefor a list of witnesses may be filed before the Court within

six weeks from date.  

The  Reference  Judge  is  hereby  directed  to  dispose  of  the  matter  as

expeditiously as possible and not later than three months from the date of receipt of

a copy of this order.  

We may place on record that it is stated before us that the appellants have

deposited about 50% of the enhanced amount before the learned Reference Court

and the said amount has been disbursed amongst the land owners.  

The  appeals  are  disposed  of  with  aforementioned  observations  and

directions.  

The costs of the appeals before the High Court as also before this Court

shall abide by the ultimate result of the matter before the Reference Court.  

..........................J (S.B. SINHA)

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..........................J   (CYRIAC JOSEPH)    NEW DELHI, NOVEMBER 6, 2008.