NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION   

CIVIL APPEAL NOS.10326-10327  OF 2010          (Arising out of S.L.P. (C) Nos.22025-22026 of 2001)

Delhi Development Authority …Appellant  

Versus

Bhola Nath Sharma (Dead) … Respondents by L.Rs. and others

With  

Civil Appeal No.10328 of 2010   [arising out of SLP(C)No.22027 of 2001  ],   Civil Appeal Nos. 6564 of 2001 and 6565 of 2001.  

J U D G M E N T

G.S. Singhvi,  J.

1. Whether the Delhi Development Authority (for short, ‘the DDA’), at  

whose  instance  land  of  the  respondents  and  others  situated  at  Village  

Bahapur  was  acquired  for  Planned  Development  of  Delhi  and  who  was  

asked  to  release  Rs.14,15,82,253/-  for  payment  of  compensation  can  be  

treated as  “person interested” within the meaning of Section 3(b) of the

Land Acquisition Act, 1894 (for short, ‘the Act’) and it was entitled to an  

opportunity  to  participate  in  the  proceedings  held  before  the  Land  

Acquisition  Collector  and  the  Reference  Court  for  determining  the  

compensation  is  the  question  which  arises  for  consideration  in  these  

petitions filed against the judgment of the Division Bench of the Delhi High  

Court whereby market value of the acquired land was fixed at Rs.2,000/- per  

sq.  yd.  and  direction  was  issued  for  payment  of  compensation  to  the  

contesting respondents with 15 per cent solatium and 6 per cent interest.   

2. Since the DDA was neither made a party to the proceedings held by  

the Land Acquisition Collector or the Reference Court nor it was given an  

opportunity  to  adduce  evidence  on  the  issue  of  determination  of  

compensation and the High Court substantially increased market value of the  

acquired land without issuing notice to it, an application has been filed on  

behalf of the DDA for permission to file the special leave petitions.  Another  

application has been filed for condonation of 372 days delay in filing the  

special leave petitions.

3. The case of the DDA is that its functionaries came to know about the  

impugned judgment only in June, 1999 when letter dated 3.6.1999 sent by  

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the Land Acquisition Collector for release of Rs.14,15,82,253/- was received  

by the Member (Finance).  According to the DDA, a clarification was sought  

from the Land Acquisition Collector on the issue of its liability to pay more  

than Rs.14 crores by pointing out that a portion of the acquired land was  

occupied by the Jal Board but without waiting for the latter’s response, Sub  

Divisional  Magistrate,  Kalkaji  issued  warrant  dated  14.10.1999  for  

attachment  of  the  bank  account  under  Section  70  of  the  Punjab  Land  

Revenue  Act,  1887 necessitating  challenge  to  the  direction  given  by  the  

High  Court  for  payment  of  enhanced  compensation  to  the  contesting  

respondents.  In the application for condonation of delay, it has been averred  

that the delay was occasioned because after having learnt about the judgment  

of the High Court, the concerned functionaries of the DDA took some time  

to collect the papers relating to the acquisition and the special leave petitions  

were  filed  after  obtaining  opinion  of  the  Advocate-on-Record  and  the  

Solicitor General.  

4. In the counter affidavit filed by Shambhu Nath Sharma (respondent  

No.2 in  SLP(C)  Nos.22025 of  2001),  reference has  been made to orders  

dated 12.4.1999 and 13.10.1999 passed by this Court whereby SLP(C) CC  

No.1608 of 1999 – Union of India and another v. Bhola Nath Sharma (Dead)  

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By L.Rs.  and another and Review Petition (C) No.1359 of 1999 filed in  

SLP(C) CC No.1608 of 1999 were dismissed and it has been pleaded that  

the  DDA  cannot  now  challenge  the  judgment  of  the  High  Court.  

Respondent No.2 has also questioned the locus of the DDA by asserting that  

even though the acquired land has been placed at its disposal under Section  

22(1) of the Delhi Development Act, 1957 (for short, ‘the 1957 Act’), the  

ownership thereof has not been transferred and as per the DDA’s own case,  

it is not obliged to pay compensation for the acquired land.  In support of  

this assertion, respondent No.2 has placed reliance on the contents of para  

(ix) of Civil Writ Petition No.6414 of 1999 filed by the DDA for quashing  

warrant of attachment dated 14.10.1999.  

5. Shri U.S. Jolly, Commissioner (Land Management) has filed rejoinder  

affidavit on behalf of the DDA.  In paragraph 7(a) of his affidavit, Shri Jolly  

has  categorically  averred  that  the  land  was  acquired  by  the  Lieutenant  

Governor,  Delhi  pursuant  to  requisition  sent  by  the  DDA  vide  D.O.  

No.F.14(36)/69/CRC/DD  dated  18.1.1973,  which  was  forwarded  by  the  

Land  and  Building  Department  of  Delhi  Administration  to  the  Land  

Acquisition  Collector  (North)  vide  letter  No.F.9(39)/70-L7B  dated  

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17.6.1975.  Copies of D.O. dated 18.1.1973 and letter dated 17.6.1975 have  

been annexed with the rejoinder affidavit.    

6. One  Jagdev  Singh,  son  of  Hari  Chand  claiming  himself  to  be  

respondent No.2 has filed counter affidavit dated 4.7.2002 and opposed the  

prayer of the DDA for condonation of delay by asserting that no explanation  

has been given for 150 days’ delay after the concerned authorities came to  

know about the impugned judgment.

7. We have heard learned counsel for the parties on the DDA’s locus  

standi to challenge the judgment of the High Court.  It is not in dispute that  

proposal  for acquisition of the land was initiated by the DDA vide D.O.  

dated 18.1.1973.  It is also not in dispute that neither the Land Acquisition  

Collector nor the Reference Court gave opportunity to the DDA to adduce  

evidence for the purpose of determining the amount of compensation.  The  

High Court did not issue notice to the DDA apparently because it was not a  

party  to  the proceedings held by the Land Acquisition Collector  and the  

Reference Court.  Notwithstanding this, the DDA has been asked to release  

Rs.14  crores  and  odd  for  payment  of  compensation  to  the  respondents.  

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Therefore, there is ample justification for entertaining its prayer for grant of  

permission to file the special leave petitions.   

8. We  are  further  of  the  view  that  delay  in  filing  the  special  leave  

petitions  deserves  to  be  condoned  because  after  having  learnt  about  the  

impugned judgment, the concerned functionaries of the DDA took steps to  

collect the papers relating to the acquisition proceedings, sought opinion of  

the Advocate-on-Record and the Solicitor General and then filed the special  

leave  petitions.   In  the  facts  of  this  case,  it  is  appropriate  to  invoke the  

principles  laid  down in  Collector,  Land Acquisition  v.  Katiji (1987)  2  

SCC 107 and State of Haryana v. Chandra Mani (1996) 3 SCC 132 for  

the purpose of condonation of delay.  Accordingly, the application filed by  

the  DDA for grant  of  permission to  challenge the  judgment of  the  High  

Court  is  allowed  and  delay  in  filing  of  the  special  leave  petitions  is  

condoned.

9. Leave granted.

10. By notification dated 30.6.1978 issued under Section 4(1) of the Act,  

the Lieutenant Governor of Delhi proposed the acquisition of 70 bighas 13  

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biswas  land  situated  at  Village  Bahapur  including  that  of  the  contesting  

respondents for a public purpose, namely, Planned Development of Delhi.  

After considering the objections  filed by the land owners,  the Lieutenant  

Governor  issued  declaration  under  Section  6  of  the  Act,  which  was  

published in the official gazette dated 19.2.1979 for acquisition of 62 bighas  

1 biswas land.   

11. The  Land  Acquisition  Collector  passed  award  dated  25.6.1979  

whereby he divided the acquired land into three Blocks i.e. ‘A’, ‘B’, ‘C’ and  

fixed market value thereof at the rate of Rs.84/- per sq. yd., Rs.63/- per sq.  

yd. and Rs.42/- per sq. yd. respectively.   

12. Feeling dissatisfied with the award of the Land Acquisition Collector,  

the respondents filed applications under Section 18 of the Act for making  

reference to the Court  for determination of  the  amount of  compensation.  

Thereupon,  the  Collector  made  reference  to  the  concerned  Court.   Vide  

judgment dated 27.9.1980, the Reference Court disposed of L.A.C. No.2 of  

1980 – Bhola Nath and another v. Union of India and held that the claimants  

are entitled to compensation at the rate of Rs.175 per sq. yd. with 15 per cent  

solatium and 6 per cent interest w.e.f. 30.6.1978.  L.A.C. No.105 of 1984 –  

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Smt. Narbada Devi and others v. Union of India was disposed of by the  

Reference Court vide judgment dated 14.5.1984 by dividing the land of the  

claimants into two Blocks i.e. ‘B’ and ‘C’ and fixing market value of the two  

blocks at Rs.129/- per sq. yd. and Rs.108/- per sq. yd. respectively.   

13. The contesting respondents challenged the judgments of the Reference  

Court  in RFA Nos.65 of  1981 and 266 of 1984 and prayed for  grant  of  

compensation at the rate of Rs.575/- per sq. yd.  After 17 years of filing the  

appeal,  Bhola  Nath  and  another  sought  leave  of  the  court  to  amend the  

memo of appeal so as to enable them to claim compensation at the rate of  

Rs.3000/- per sq. yd.  Similar prayer was made on behalf of Smt. Narbada  

Devi and others by filing separate application sometime in 1996.  The Land  

Acquisition Collector opposed the prayer for amendment but the High Court  

allowed the applications.    

14. Thereafter, the Division Bench of the High Court disposed of both the  

appeals  and held that  the contesting respondents are entitled to enhanced  

compensation at the rate of Rs.2000/- per square yard with 15% solatium  

and 6% interest from the date of dispossession.   

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15. Before proceeding further, we consider it proper to mention that the  

Union  of  India  and  the  Land  Acquisition  Collector  had  unsuccessfully  

challenged the impugned judgment inasmuch as S.L.P.(C) No.1608 of 1999  

filed by them was dismissed by this Court on 12.4.1999 and Review Petition  

No.1359 of 1999 was dismissed on 13.10.1999.  For the sake of convenient  

reference,  the  relevant  portions  of  order  dated  12.4.1999  are  extracted  

below.

“Delay condoned.

We  asked  learned  counsel  whether  it  was  correct  that  possession of the land had been taken in 1972.  His reply  was  that  there  was  no  evidence  in  support  of  this  statement in the judgment and order under appeal.  We  asked him whether that had been taken as a ground in the  S.L.P.  His answer was to refer to ground (L) which says,  “whether  the  High  Court  could  grant  interest  to  the  Respondents for 6 years prior to the issue of section 4  Notification?  That  is  by  no  means  an  answer  to  the  question that we asked.

The special leave petition is dismissed.”

16. Bhola Nath Sharma (Dead) by LRs. and another and Smt. Narbada  

Devi and others also filed special leave petitions, which were registered as  

S.L.P. (C) Nos.19729 of 1998 and 18433 of 1998.  After issuing notice, the  

Court granted leave in both the cases and the special leave petitions were  

converted into Civil Appeal Nos.6564 and 6565 of 2001.  After some time,  

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the respondents applied for and they were granted permission to withdraw  

the appeals with the rider that the cross objections filed by the Union of  

India and the Land Acquisition Collector shall remain pending.   

17. Shri  Amarendra  Sharan,  learned  senior  counsel  argued  that  the  

impugned judgment is liable to be set aside because the Land Acquisition  

Collector and the Reference Court did not give opportunity to the DDA to  

participate in the proceedings held before them for determining the amount  

of compensation despite the fact that the land was acquired at its instance  

and was transferred to it under Section 22(1) of the 1957 Act. Learned senior  

counsel  further  argued that  the  DDA is  covered by  the  definition of  the  

expression “person interested” and the Land Acquisition Collector and the  

Reference Court committed grave illegality by fixing market value of the  

acquired land and the amount of compensation payable to the respondents  

without giving it an opportunity to adduce evidence in terms of the mandate  

of Section 50(2).  Shri Amarendra Sharan submitted that the Division Bench  

of  the  High Court  also  committed  serious  error  by  directing  payment  of  

compensation to the contesting respondents at the rate of Rs.2,000/- per sq.  

yd. without giving opportunity of hearing to the DDA and ignoring that it  

will have to provide funds for payment of compensation to the land owners.  

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In  support  of  this  argument,  Shri  Amarendra  Sharan  relied  upon  the  

judgments of this Court in  Neyvely Lignite Corporation Ltd. v. Special  

Tahsildar (Land Acquisition) Neyvely (1995) 1 SCC 221 and U.P. Awas  

Eveam Vikas Parishad v. Gyan Devi (1995 (2) SCC 326.  Learned senior  

counsel then referred to the master plan of Delhi for 1961 and 2001 and the  

map produced by him during the course of hearing to show that the acquired  

land forms part of the Green Belt and argued that the High Court committed  

serious error by ordering payment of enhanced compensation ignoring the  

mandate of Section 24 of the Act, which debars the Court from taking into  

consideration  illegal  use  of  the  land  while  determining  the  amount  of  

compensation. Learned senior counsel emphasized that the Land Acquisition  

Collector and the Reference Court had concurrently held that the acquired  

land  does  not  have  commercial  value  and  argued  that  the  High  Court  

committed serious error by increasing market value thereof on the premise  

that land in the surrounding areas has already been put to commercial use.  

Shri Amarendra Sharan referred to judgment dated 18.7.1995 rendered by  

the High Court in RFA No. 132 of 1980 whereby market value of the land  

situated  at  Village  Bahapur,  which  was  acquired  vide  notification  dated  

30.11.1972  was  fixed  at  Rs.65,000/-  per  bigha  and  argued  that  even  if  

principle  of  12%  increase  per  annum  was  applied  for  the  purpose  of  

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determining market value of the land in question, the High Court could not  

have awarded compensation at the rate of Rs.2,000/- per sq. yd.   

18. Shri  Dhruv  Mehta,  learned  counsel  appearing  for  the  respondents  

argued that the appeals are liable to be dismissed because the DDA has not  

approached  the  Court  with  clean  hands.   Learned  counsel  referred  to  

apparently contradictory statements made at pages `J’ and `L’ of the List of  

Dates and contents of letters dated 30.6.1999 and 8.7.1999 sent by Director  

(LM) (HQ), DDA to the Land Acquisition Collector/SDM on the issues of  

payment of compensation and transfer of possession under Section 22(1) of  

the 1957 Act and submitted that failure of the DDA to candidly disclose all  

the facts should be treated as sufficient for non suiting it.  Learned counsel  

pointed  out  that  even  in  para  (B)  of  the  grounds  taken  in  Writ  Petition  

No.6414  of  1999  filed  in  the  High  Court  for  quashing  the  warrant  of  

attachment, the DDA has claimed that possession of the acquired land was  

neither  taken by the land acquisition authorities  nor  transferred to  it  and  

argued  that  by  filing  these  appeals,  the  DDA has  made  an  unwarranted  

attempt to  deprive  the  land owners  of  their  right  to  receive  just  and fair  

compensation.  Shri Mehta then argued that the DDA cannot challenge the  

judgment  of  the  High  Court  on  the  ground  of  denial  of  opportunity  of  

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hearing because with the dismissal of SLP (C) CC No.1608 of 1999 jointly  

filed by the Union of India and the Land Acquisition Collector, the same  

will  be  deemed to  have  become final.   Shri  Mehta  also  relied  upon the  

judgments of this Court in  N.P. Venkateswara Prabhu v. N.P. Krishna  

Prabhu (1977) 2 SCC 181 and Kunhayammed v. State of Kerala (2000) 6  

SCC 359  and  argued  that  if  these  appeals  are  allowed,  two  inconsistent  

decrees will come into existence and that is legally impermissible.

19. The argument of Shri Dhruv Mehta that the appellant-DDA should be  

denied  relief  because  it  has  made  contradictory  statements  and  has  not  

disclosed  correct  and  full  facts  on  the  issues  of  initiation  of  acquisition  

proceedings and transfer of possession of the acquired land does not merit  

acceptance.  A careful reading of the statements made at pages ‘J’ and ‘L’ of  

the  List  of  Dates  and  contents  of  letters  dated  30.6.1999  and  8.7.1999  

written by Director (LM) (HQ), DDA does not support the assertion of the  

learned counsel that the appellant has made an attempt to mislead the Court.  

The  minor  inconsistencies  here  and  there  appear  to  be  due  to  lack  of  

coordination between various functionaries of the DDA, a phenomena not  

unusual  in  the  functioning  of  Government  departments  and  the  

agencies/instrumentalities of the State.  However, such errors, omissions and  

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inconsistencies  do  not  justify  a  conclusion  that  the  DDA  is  guilty  of  

contumacious conduct.

20. The apprehension expressed by the learned counsel that acceptance of  

appellant’s  prayer  for  setting  aside  the  impugned  judgment  may  lead  to  

passing  of  two  inconsistent  decrees  and  his  argument  that  dismissal  of  

Special Leave Petition (Civil) No.1608/1999 – Union of India and another v.  

Bhola Nath (Dead) through L.Rs. and another operates as res judicata does  

not commend acceptance for the simple reason that the special leave petition  

filed by the Union of India and another was summarily dismissed and the  

question  whether  the  DDA at  whose  instance  the  land  was  acquired  for  

Planned Development  of  Delhi  was  entitled  to  notice  and opportunity  to  

adduce  evidence  in  the  proceedings  held  before  the  Collector  and  the  

Reference Court for the purpose of determining the amount of compensation  

was neither raised in the S.L.P. (C) CC No.1608 of 1999 nor decided by this  

Court.  In Kunhayammed v. State of Kerala (supra), a three-Judge Bench  

considered the questions whether  summary dismissal  of the special  leave  

petition and that too without deciding any question of law operates as  res  

judicata qua  the  special  leave  petition  filed  by  other  party  and  the  

judgment/order of the High Court merges in the order of this Court.  After  

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examining various facets of the doctrines of  res judicata and merger, the  

Court laid down seven propositions including the following:

“(i)  The  jurisdiction  conferred  by  Article  136  of  the  Constitution is divisible into two stages. The first stage is upto  the disposal of prayer for special leave to file an appeal. The  second stage commences  if  and when the leave  to  appeal  is  granted  and  the  special  leave  petition  is  converted  into  an  appeal. (ii)  The  doctrine  of  merger  is  not  a  doctrine  of  universal  or  unlimited  application.  It  will  depend  on  the  nature  of  jurisdiction exercised by the superior forum and the content or  subject-matter of challenge laid or capable of being laid shall be  determinative  of  the  applicability  of  merger.  The  superior  jurisdiction  should  be  capable  of  reversing,  modifying  or  affirming the order put in issue before it. Under Article 136 of  the  Constitution  the  Supreme  Court  may  reverse,  modify  or  affirm  the  judgment-decree  or  order  appealed  against  while  exercising its appellate jurisdiction and not while exercising the  discretionary jurisdiction disposing of petition for special leave  to appeal. The doctrine of merger can therefore be applied to  the former and not to the latter.  (iii) An order refusing special leave to appeal may be a non- speaking  order  or  a  speaking one.  In  either  case  it  does  not  attract the doctrine of merger. An order refusing special leave to  appeal  does not stand substituted in place of the order under  challenge. All that it means is that the Court was not inclined to  exercise its discretion so as to allow the appeal being filed. (iv) If the order refusing leave to appeal is a speaking order, i.e.,  gives reasons for refusing the grant of leave, then the order has  two implications. Firstly, the statement of law contained in the  order is a declaration of law by the Supreme Court within the  meaning  of  Article  141  of  the  Constitution.  Secondly,  other  than the declaration of law, whatever is stated in the order are  the findings recorded by the Supreme Court which would bind  the parties thereto and also the court,  tribunal or authority in  any  proceedings  subsequent  thereto  by  way  of  judicial  

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discipline,  the  Supreme  Court  being  the  Apex  Court  of  the  country. But, this does not amount to saying that the order of  the court, tribunal or authority below has stood merged in the  order of the Supreme Court rejecting the special leave petition  or that the order of the Supreme Court is the only order binding  as res judicata in subsequent proceedings between the parties.”

21. In our view, proposition Nos. (iii) and (iv) extracted herein above are  

attracted in the present case because Special Leave Petition (C) No. 1608 of  

1999 filed by the Union of India and the Land Acquisition Collector was  

summarily  dismissed  without  going  into  the  merits  of  the  petitioners’  

challenge to the judgment of the High Court and no question of law was  

decided by this Court.  That apart, this Court neither had the occasion nor  

did it decide the question whether the DDA, at whose instance the land was  

acquired as a part of the exercise undertaken for development of the area  

around Kalkaji temple, was entitled to participate in the proceedings held  

before  the  Land  Acquisition  Collector  and  the  Reference  Court  for  

determination  of  the  amount  of  compensation  because  no  such  plea  was  

raised in Special Leave Petition(C) No.1608/1999.

22. We may now consider the question framed in the opening paragraph  

of  this  judgment.   For  deciding that  question,  it  will  be useful  to  notice  

Sections 3(aa), 3(b) and 50 of the Act, which read as under:

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“3(aa).  the  expression  “local  authority’  includes  a  town  planning authority (by whatever name called) set up under any  law for the time being in force.  

3(b).   the expression “person interested” includes all persons  claiming an interest in compensation to be made on account of  the acquisition of land under this  Act;  and a person shall  be  deemed  to  be  interested  in  land  if  he  is  interested  in  an  easement affecting the land.”

50.  Acquisition  of  land  at  cost  of  a  local  authority  or  Company – (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  and  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 under section 18.”

23. The  definition  of  the  expressions  “local  authority”  and  “person  

interested”  are  inclusive  and  not  exhaustive.  The  difference  between  

exhaustive and inclusive definitions has been explained in P. Kasilingam v.  

P.S.G. College of  Technology (1995) Supp 2 SCC 348 in the following  

words:

“A particular expression is often defined by the Legislature by  using the word ‘means’ or the word ‘includes’. Sometimes the  words  ‘means  and  includes’  are  used.  The  use  of  the  word  

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‘means’ indicates that “definition is a hard-and-fast definition,  and no other meaning can be assigned to the expression than is  put down in definition”. (See :  Gough v. Gough;  Punjab Land  Development and Reclamation Corpn. Ltd. v. Presiding Officer,  Labour  Court.)  The word ‘includes’  when used,  enlarges  the  meaning  of  the  expression  defined  so  as  to  comprehend  not  only  such  things  as  they  signify  according  to  their  natural  import but also those things which the clause declares that they  shall  include.  The words “means and includes”,  on the other  hand,  indicate  “an  exhaustive  explanation  of  the  meaning  which, for the purposes of the Act, must invariably be attached  to  these  words  or  expressions”.  (See:  Dilworth v.  Commissioner  of  Stamps (Lord  Watson);  Mahalakshmi  Oil  Mills v. State  of  A.P. The  use  of  the  words  “means  and  includes”  in  Rule  2(b)  would,  therefore,  suggest  that  the  definition  of  ‘college’  is  intended  to  be  exhaustive  and  not  extensive  and  would  cover  only  the  educational  institutions  falling  in  the  categories  specified  in  Rule  2(b)  and  other  educational  institutions  are  not  comprehended.  Insofar  as  engineering colleges are concerned, their exclusion may be for  the  reason  that  the  opening  and  running  of  the  private  engineering  colleges  are  controlled  through  the  Board  of  Technical Education and Training and the Director of Technical  Education  in  accordance  with  the  directions  issued  by  the  AICTE from time to time.”

In  Bharat  Cooperative  Bank  (Mumbai)  Ltd.  v.  Employees  Union  

(2007)  4  SCC 685,  this  Court  again  considered  the  difference  between  the  

inclusive and exhaustive definitions and observed:

“When  in  the  definition  clause  given  in  any  statute  the  word  “means” is used, what follows is intended to speak exhaustively.  When the word “means” is used in the definition it is a “hard-and- fast” definition and no meaning other than that which is put in the  definition can be assigned to the same.  On the other hand, when  the word “includes” is used in the definition, the legislature does  not  intend  to  restrict  the  definition:  it  makes  the  definition  

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enumerative but not exhaustive.  That is to say, the term defined  will retain its ordinary meaning but its scope would be extended to  bring within it matters, which in its ordinary meaning may or may  not comprise.  Therefore, the use of the word “means” followed by  the  word  “includes”  in  the  definition  of  “banking  company” in  Section 2(bb) of the ID Act is clearly indicative of the legislative  intent  to  make  the  definition  exhaustive  and  would  cover  only  those  banking  companies  which  fall  within  the  purview  of  the  definition and no other.”

In  N.D.P.  Namboodripad v.  Union of  India (2007) 4 SCC 502, the  

Court observed :

“The word “includes” has different meanings in different contexts.  Standard dictionaries assign more than one meaning to the word  “include”.  Webster’s  Dictionary defines  the  word  “include”  as  synonymous  with  “comprise”  or  “contain”.  Illustrated  Oxford  Dictionary defines the word “include” as: (i) comprise or reckon in  as a part of a whole; (ii) treat  or regard as so included.  Collins  Dictionary of English Language defines the word “includes” as: (i)  to  have  as  contents or  part  of  the  contents;  be  made  up  of  or  contain; (ii) to add as part of something else; put in as part of a set,  group  or  a  category;  (iii)  to  contain  as  a  secondary  or  minor  ingredient or element. It is no doubt true that generally when the  word “include” is used in a definition clause, it is used as a word  of enlargement, that is to make the definition extensive and not  restrictive.  But  the  word  “includes”  is  also  used  to  connote  a  specific meaning, that is, as “means and includes” or “comprises”  or “consists of”.”

In  Hamdard  (Wakf)  Laboratories  v.  Dy.  Labour  Commissioner  

(2007) 5 SCC 281, it was held as under:

“When  an  interpretation  clause  uses  the  word  “includes”,  it  is  prima  facie  extensive.  When  it  uses  the  word  “means  and  

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includes”, it will afford an exhaustive explanation to the meaning  which for the purposes of the Act must invariably be attached to  the word or expression.”  

24. Undisputedly, the DDA is an authority constituted under Section 3 of  

the 1957 Act for promoting and securing development of Delhi according to  

plan and for this  purpose it  has the power to acquire,  hold,  manage and  

dispose  of  land  and  other  property,  to  carry  out  building,  engineering,  

mining and other operations, to execute works in connection with supply of  

water  and  electricity,  disposal  of  sewage,  etc.   Therefore,  it  is  clearly  

covered by the definition of the expression “local authority”.

25. The definition of the expression “person interested” is in two parts.  

The first part includes all persons claiming an interest in the compensation to  

be made on account of the acquisition of land under the Act.  The second  

part contains a deeming provision and declares that a person shall be deemed  

to be interested in land if he is interested in an easement affecting the land.  

Section 50(1) lays down that where the provisions of the Act are invoked for  

the purpose of acquiring land at the cost of any fund controlled or managed  

by a local authority or of any company, the incidental charges are required to  

be defrayed from or by such fund or company.  Section 50(2) lays down that  

in  the  cases  covered  by  sub-section  (1),  the  local  authority  or  company  

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concerned may appear in any proceeding held before a Collector or Court  

and  adduce  evidence  for  the  purpose  of  determining  the  amount  of  

compensation.  However, by virtue of proviso to sub-section (2), the local  

authority or company is barred from seeking reference under Section 18 of  

the Act.   

26. Section 50(2) represents statutory embodiment of one of the facets of  

the rules of natural justice. The object underlying this section is to afford an  

opportunity  to  the  local  authority  or  company  to  participate  in  the  

proceedings  held  before  the  Collector  or  the  Court  for  determining  the  

amount of compensation and to show that claim made by the land owner for  

payment  of  compensation  is  legally  untenable  or  unjustified.   This  is  

possible only if the Collector or the concerned Court gives notice to the local  

authority  or  the  concerned  company.   If  notice  is  not  given,  the  local  

authority or the company cannot avail the opportunity envisaged in Section  

50(2)  to  adduce  evidence  for  the  purpose  of  determining  the  amount  of  

compensation.   Therefore, even though the plain language of that section  

does not, in terms, cast a duty on the Collector or the Court to issue notice to  

the local authority or the company to appear and adduce evidence, the said  

requirement has to be read as implicit in the provision, else the same will  

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become illusory.   In  Himalayan Tiles and Marble (P) Ltd. v. Francuis  

Victor Coutinho (1980) 3 SCC 223, this Court, while examining the scope  

of Section 18 of the Act, referred to the definition of the expression `person  

interested’  contained in Section 3(b) of the Act and some of the judicial  

precedents and 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 its stake  may  be  extremely  vital?  For  instance,  the  land  acquisition  proceedings  may  be  held  to  be  invalid  and  thus  a  person  concerned  is  completely  deprived  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.”  

(emphasis supplied)

In  Union of India v. District Judge (1994) 4 SCC 737, this Court  

held that the Union of India for whose benefit the land was acquired was a  

`person interested’ in the fixation of the proper and just compensation and  

was  entitled  to  challenge  the  determination  made  by  the  competent  

authority/Court.   

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In  Neyvely Lignite Corporation Ltd. v. Special  Tahsildar (L.A.)  

(supra), the Court was called upon to consider whether the appellant was  

entitled  to  be  impleaded  as  party  respondent  in  the  proceedings  pending  

before the Reference Court.  The Reference Court dismissed the application  

for impleadment holding that the appellant is not an `interested person’.  The  

High  Court  upheld  the  order  of  the  Reference  Court  and  dismissed  the  

revision filed by the appellant.  The three-Judge Bench of this Court referred  

to Sections 3(b) and 50 of the Act and held:

“12.  It is true that Section 50(2) of the Act gives to the local  authority or the company right to adduce evidence before the  Collector  or  in  the  reference  under  Section  18  as  it  was  specifically  stated  that  in  any  proceedings  held  before  the  Collector or the Court, the local authority or the company may  appear and adduce evidence for the purpose of determining the  amount  of  compensation.  However,  it  has  no  right  to  seek  reference. Based thereon, the contention is that the limited right  of  adduction  of  evidence  for  the  purpose  of  determining the  compensation does not carry with it the right to participate in  the proceedings or right to be heard or to file an appeal under  Section 54.  We cannot limit the operation of Section 3(  b  )  in    conjunction with sub-section (2) of Section 50 of the Act within  a  narrow compass.  The  right  given  under  sub-section  (2)  of  Section  50  is  in  addition  to  and  not  in  substitution  of  or  in  derogation to all the incidental, logical and consequential rights  flowing from the concept of fair and just procedure consistent  with the principles of natural justice. The consistent thread that  runs  through  all  the  decisions  of  this  Court  starting  from  Himalayan Tiles case is that the beneficiary, i.e., local authority  or company, a cooperative society registered under the relevant  

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State  law,  or  statutory  authority  is  a  person  interested  to  determine just and proper compensation for the acquired land  and is an aggrieved person. It flows from it that the beneficiary  has the right to be heard by the Collector or the Court. If the  compensation  is  enhanced  it  is  entitled  to  canvass  its  correctness  by  filing  an  appeal  or  defend  the  award  of  the  Collector. If it is not made a party, it is entitled to seek leave of  the court and file the appeal against the enhanced award and  decree of the Civil Court under Section 26 or of the judgment  and decree under Section 54 or is entitled to file writ petition  under Article 226 and assail its legality or correctness.  

13. The reasons are not far to seek. It is notorious that though  the  stakes  involved  are  heavy,  the  Government  plead  or  the  instructing officer do not generally adduce, much less proper  and  relevant,  evidence  to  rebut  the  claims  for  higher  compensation.  Even  the  cross-examination  will  be  formal,  halting  and  ineffective.  Generally,  if  not  invariably  the  governmental agencies involved in the process take their own  time  and  many  a  time  in  collusion,  file  the  appeals  after  abnormal or inordinate delay. They remain insensitive even if  the States involved run into several crores of public money. The  courts insist upon proper explanation of every day’s delay. In  this  attitudinal  situation  it  would  be  difficult  to  meet  strict  standards to fill the unbridgeable gaps of the delay in filing the  appeals  and generally  entails  dismissal  of  the  appeals  at  the  threshold  without  adverting  to  the  merits  of  the  hike  in  the  compensation. On other hand if the notice is issued to the local  authority etc. it/they would participate in the award proceedings  under  Sections  11  and  18,  adduce  necessary  and  relevant  evidence and be heard before the Collector and the court before  determining  compensation.  For  instance  that  without  considering the  evidence in the  proper  perspective,  the court  determined the compensation.

14. If  there  is  no  right  of  hearing  or  appeal  given  to  the  beneficiary and if the State does not file the appeal or if filed  with delay and it was dismissed, is it not the beneficiary who  

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undoubtedly bears the burden of the compensation, who would  be  the  affected  person?  Is  it  not  interested  to  see  that  the  appellate court would reassess the evidence and fix the proper  and just compensation as per law? For instance the reference  court  determined  market  value  at  Rs.1,00,000  while  the  prevailing market value of the land is only Rs.10,000. Who is to  bear the burden? Suppose State appeal  was dismissed due to  refusal  to  condone  the  delay,  is  it  not  an  unjust  and  illegal  award? Many an instance can be multiplied. But suffice it to  state  that  when the beneficiary for whose benefit  the land is  acquired is served with the notice and brought on record at the  stage  of  enquiry  by  the  Collector  and  reference  court  under  Section 18 or in an appeal under Section 54, it/they would be  interested to defend the award under Section 11 or Section 26  or  would file  an  appeal  independently  under  Section  54  etc.  against the enhanced compensation. As a necessary or proper  party affected by the determination of higher compensation, the  beneficiary must have a right to challenge the correctness of the  award  made  by  the  reference  court  under  Section  18  or  in  appeal under Section 54 etc.”

(emphasis supplied)

The same issue was considered by the  Constitution Bench in  U.P.  

Awas Evam Vikas Parishad v. Gyan Devi (supra).  The facts show that the  

acquisition of land `Trans-Yamuna Housing and Accommodation Scheme’  

led to lot of litigation.  The appellant, who had not been impleaded as party  

in  the  reference  proceedings  or  in  the  appeal  before  the  High  Court,  

unsuccessfully sought review of the High Court’s judgment and then filed  

special  leave  petitions.   This  Court  considered  the  question  whether  the  

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Board was entitled to participate in the proceedings held for determination of  

compensation, referred to Section 50(2) of the Act and observed:

“The  said  right  can  be  effectively  exercised  by  the  local  authority only if it has information of the proceedings which are  pending before the Collector as well as the reference court. In  other words the right conferred under Section 50(2) of the L.A.  Act carries with it the right to be given adequate notice by the  Collector  as  well  as  the  reference  court  before  whom  the  acquisition proceedings are pending of the date on which the  matter of determination of the amount of compensation will be  taken up. Service  of  such  a  notice,  being  necessary  for  effectuating  the  right  conferred  on  the  local  authority  under  Section 50(2) of the L.A. Act, can, therefore, be regarded as an  integral  part  of  the  said  right  and the  failure  to  give such a  notice would result in denial of the said right unless it can be  shown  that  the  local  authority  had  knowledge  about  the  pendency of the acquisition proceedings before the Collector or  the  reference  court  and  has  not  suffered  any  prejudice  on  account of failure to give such notice.   Thus, on an interpretation of the provisions of Section 50(2) of  the L.A. Act, it must be concluded that, subject to the limitation  contained  in  the  proviso,  a  local  authority  for  whom land is  being acquired has a right to participate in the proceedings for  acquisition before the Collector as well as the reference court  and adduce evidence for the purpose of determining the amount  of compensation and the said right imposes an obligation on the  Collector as well as the reference court to give a notice to the  local  authority  with  regard  to  the  pendency  of  those  proceedings and the date on which the matter of determination  of amount of compensation would be taken up.”  

(emphasis supplied)

The Constitution Bench also considered the nature of remedies available to  

the local authority and observed:

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“We  would  now  revert  to  the  question  regarding  the  legal  remedies  that  are  available  to  a  local  authority  which  feels  aggrieved by the determination of the amount of compensation  by the Collector or by the reference court.  In this context,  it  may be stated that the limitation placed by the proviso on the  right conferred by Section 50(2) of the L.A. Act cannot be so  construed  as  to  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. The proviso to Section 50(2) only  takes away the remedy of a reference under Section 18 of the  L.A.  Act.  Examining  this  question  in  the  context  of  the  proceedings before the Collector we can envisage the following  situations :  

(i) No notice was given to the local authority under  sub-section (2) of Section 50 of the L.A. Act and as a  result  the  local  authority  could  not  appear  before  the  Collector to adduce evidence;  

(ii) Notice  was  served  on the  local  authority  and in  response  to  said  notice  the  local  authority  appeared  before the Collector; and  (iii) Notice  was  served  on  the  local  authority  but  in  spite of service of such notice the local authority failed to  appear and adduce evidence before the Collector.

In a case where no notice is  given to the local authority the  position of the local authority is not different from that of the  Municipal Corporation in Neelagangabai v. State of Karnataka.  In that  case there was an express provision in Section 20 of  L.A. Act as modified by Land Acquisition (Mysore Extension  Amendment) Act, 1961 providing for service of notice on the  person or local authority for whom the acquisition is made. On  a construction of Section 50(2) we have found that service of  such a notice is  implicit  in the right conferred under Section  50(2) of the L.A. Act. Since the failure to give a notice would  result  in  denial  of  the  right  conferred  on  the  local  authority  under Section 50(2) it would be open to the local authority to  

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invoke the jurisdiction of the High Court under Article 226 of  the Constitution to challenge the award made by the Collector  as was done in Neelagangabai case. In a case where notice has  been served on the local authority and it has appeared before  the Collector the local authority may feel aggrieved on account  of  it  being  denied  opportunity  to  adduce  evidence  or  the  evidence  adduced  by  it  having  not  been  considered  by  the  Collector while making the award or the award being vitiated  by mala fides. Since the amount of the compensation is to be  paid  by  the  local  authority  and  it  has  an  interest  in  the  determination  of  the  said  amount,  which  has  been  given  recognition in Section 50(2) of the L.A. Act, the local authority  would be a person aggrieved who can invoke the jurisdiction of  the High Court under Article 226 of the Constitution to assail  the award in spite of the proviso precluding the local authority  from seeking a reference.  

We may now come to the stage of the proceedings before the  court in a reference under Section 18 of the L.A. Act made at  the  instance  of  a  person  having  interest  in  the  land  being  acquired.  At  this  stage  also  Section  50(2)  of  the  L.A.  Act  envisages  that  the  local  authority  has  a  right  to  appear  and  adduce evidence before the court. This right is independent of  the right that is available to the local authority to appear and  adduce evidence before the  Collector.  Even though the local  authority had failed to appear before the Collector in spite of  notice or had appeared in response to notice and had adduced  evidence,  the  local  authority  may  consider  it  necessary  to  adduce evidence to rebut the evidence adduced by the person  who has sought the reference and to defend the award made by  the Collector. Failure to give notice at this stage would result in  denial  of  the  said  right  of  the  local  authority.  Before  we  consider the remedy that is available for seeking redress against  the  denial  of  this  right  we  may  examine  whether  the  local  authority  has  a  right  to  be  impleaded  as  a  party  in  the  proceedings before the reference court. That raises the question  whether the local authority can be regarded as a necessary or a  proper party. The law is well settled that a necessary party is  one  without  whom no  order  can  be  made  effectively  and  a  

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proper party is one in whose absence an effective order can be  made but whose presence is necessary for a complete and final  decision of the question involved in the proceeding. (See Udit   Narain  Singh  Malpaharia v.  Additional  Member,  Board  of   Revenue.)  A local authority for whom land is being acquired  has a right to participate in the acquisition proceedings in the  matter of determination of the amount of compensation while  they are pending before the Collector and to adduce evidence in  the  said  proceedings.  While  it  is  precluded  from  seeking  a  reference against the award of the Collector it can defend the  award  and  oppose  the  enhancement  of  the  amount  of  compensation sought before the reference court by the person  interested in the land. Moreover the local authority has a right  to  appear  and  adduce  evidence  before  the  reference  court.  Having regard  to  the  aforesaid  circumstances,  we are  of  the  opinion that the presence of the local authority is necessary for  the decision of the question involved in the proceedings before  the reference court and it is a proper party in the proceedings.  The local authority is, therefore, entitled to be impleaded as a  party in the proceedings before the reference court.  

In case the amount of compensation has been enhanced by the  court  and  no  appeal  is  filed  by  the  Government  the  local  authority if adversely affected by such enhancement may file an  appeal  with  the  leave  of  the  court.  This  right  of  the  local  authority does not depend on its being impleaded as a party in  the  proceedings  before the reference  court.  Even if  the local  authority is not impleaded as a party before the reference court  it can file an appeal against the award of the reference court in  the  High  Court  after  obtaining  leave  if  it  is  prejudicially  affected by the award. In case the Government files an appeal  against  the  enhancement  of  the  award  the  local  authority  is  entitled to support the said appeal and get itself impleaded as a  party. When the person having an interest in the land files an  appeal  in  the  High Court  against  the  award of  the  reference  court and seeks enhancement of the amount of compensation  the local authority should be impleaded as a party in the said  appeal and it is entitled to be served with the notice of the said  appeal so that it can defend the award of the reference court and  

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oppose enhancement of the amount of compensation before the  High Court. The same will be the situation in case of an appeal  to this Court from the decision of the High Court.”  

(emphasis supplied)

In  Agra  Development  Authority  v.  Special  Land  Acquisition  

Officer (2001) 2 SCC 646, this Court held that as the land was acquired on  

behalf  of  the  appellant,  it  was  entitled  to  an  opportunity  to  appear  and  

adduce  evidence  on  the  issue  of  determination  of  the  amount  of  

compensation and the mere fact that it was aware of the proceedings and had  

participated  in  the  meetings  with  the  Government  and Collector  was  not  

sufficient compliance with Section 50 of the Act.

In  Abdul Rasak v. Kerala Water Authority (2002) 3 SCC 228, a  

two-Judge  Bench considered  the  question  whether  the  local  authority  on  

whose behalf the land was initially not acquired but to whom the land was  

subsequently  transferred  is  entitled  to  be  heard  in  the  matter.   While  

rejecting the argument that the Kerala Water Authority being a successor of  

the  Public  Health  Department  for  whose  benefit  the  land  was  initially  

acquired is not a necessary party, the Court observed:

“Shri T.L.V. Iyer, the learned Senior Counsel for the claimant- appellants  has  submitted  that  Kerala  Water  Authority  is  the  

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successor of Public Health Engineering Department of the State  Government,  and bound by the proceedings conducted by or  against the State Government and, therefore, the Constitution  Bench decision does not have any applicability to the facts of  the present case and the High Court ought not to have set aside  the awards and remanded the cases to the reference court. We  find it difficult to subscribe to the view so forcefully canvassed  by the learned Senior Counsel for the appellants. KWA came  into existence as a statutory corporation on 1-4-1984. It may be  said  to  have  succeeded  to  the  liability  incurred  by  the  State  Government so far as the quantum of compensation awarded by  the Collector is concerned but so far as the enhancement in the  quantum of compensation is concerned, it will be a liability of  KWA  incurred  by  it  after  its  coming  into  existence  and,  therefore,  to  the  extent  of  enhancement,  the  authority  was  certainly  entitled  to  notice  and  right  to  participate  in  the  proceedings before the reference court leading to enhancement  of compensation.”

(emphasis supplied)

The view expressed by the Constitution Bench in  Gyan Devi’s case  

was reiterated in Kanak v. U.P. Avas Evam Vikas Parishad (2003) 7 SCC  

693 and Regional Medical Research Centre, Tribals v. Gokaran (2004)  

13 SCC 125.

27. In view of the above discussion, we hold that :

(i) the  DDA falls  within  the  definition  of  the  expressions  

“local  authority”  [Section  3(aa)]  and  “person  interested”  

[Section 3(b)] of the Act;

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(ii) the DDA was entitled to participate in the proceedings  

held before the Land Acquisition Collector;  

(iii) the  failure  of  the  Land  Acquisition  Collector  to  issue  

notice  to  the  DDA and  give  an  opportunity  to  it  to  adduce  

evidence  for  the  purpose  of  determining  the  amount  of  

compensation payable to the land owners was fatal to the award  

passed by him;   

(iv) the DDA was entitled to notice and opportunity to adduce  

evidence  before  the  Reference  Court  could  enhance  market  

value of  the  acquired land entitling  the  respondents  to claim  

higher compensation and, as no notice or opportunity was given  

to the DDA by the Reference Court, the judgments rendered by  

it are liable to be treated as nullity;   

(v) the  Division  Bench of  the  High Court  also  committed  

serious error by further enhancing the amount of compensation  

payable to the contesting respondents without requiring them to  

implead  the  DDA as  party  respondent  so  as  to  enable  it  to  

contest their prayer for grant of higher compensation.   

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28. In the result, the appeals are allowed.  The impugned judgment of the  

Division Bench of the High Court as also the judgments of the Reference  

Court are set aside and the matters are remitted to the Reference Court for  

deciding the two references afresh after giving opportunity of hearing to the  

parties, which shall necessarily include opportunity to adduce evidence for  

the purpose of determining the amount of compensation.   The Reference  

Court shall decide the matter without being influenced by the observations  

contained in the judgment of the High Court and this judgment.

29. In view of the above conclusions, the cross-objections filed on behalf  

of the Union of India and the Land Acquisition Collector in C.A. Nos.6564  

and 6565 of 2001 are disposed of as infructuous.  However, as the judgments  

of  the  Reference  Court  and  the  High  Court  have  been  set  aside  and  a  

direction  has  been  given  for  fresh  determination  of  the  amount  of  

compensation payable to the respondents, the Union of India and the Land  

Acquisition Collector shall be free to participate in the proceedings before  

the Reference Court.

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30. Since the matter is more than 32 years old, we direct the Reference  

Court to decide the matter as early as possible but latest within 9 months  

from the of date of receipt of the copy of this judgment.   

31. We  further  direct  that  if  the  amount  of  enhanced  compensation  

determined  by  the  Reference  Court  vide  judgments  dated  27.7.1980  and  

14.5.1994 has already been paid to the respondents or their predecessors,  

then they shall not be required to refund the same.

….………………….…J. [G.S. Singhvi]

…..…..………………..J. [Asok Kumar Ganguly]

New Delhi December 08, 2010

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