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PETITIONER: THE GOVT. OF ANDHRA PRADESH

       Vs.

RESPONDENT: H.E.H., THE NIZAM, HYDERABAD.

DATE OF JUDGMENT:       22/03/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. G.B. PATTANAIK (J)

CITATION:  1996 SCC  (3) 282        JT 1996 (3)   629  1996 SCALE  (3)140

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T K . Ramaswamy,J.      Leave granted.      This appeal  by special  leave arises from the judgment and decree  dated November  11, 1992 made in A.S. No.2470/86 by the  High Court  of Andhra  Pradesh.  Notification  under Section 4(1)  of the  Land Acquisition  Act 1894 (for short, the fact’)  was published  in the  State Gazette on July 27, 1978   for   public   Purpose,   namely,   construction   of Residential-cum-Commercial Complex  in Saroonnagar, Phase-II in out-skirts  of Hyderabad  city  by  the  Hyderabad  Urban Development Authority. The total extent of the land notified for acquisition  was 25  acres 12  gunthas. After conducting enquiry under  Section 5A  declaration under  Section 6  was published on May 3, 1979. The respondent filed Writ Petition No.2510/82 in the High Court to quash the notification under Section 4(1). A learned single Judge by Order dated June 30, 1983 directed  the Land  Acquisition Officer [LAO] either to pass  an  award  or  issue  notification  under  Section  48 withdrawing the  acquisition within  a period  of six  weeks from that date. In furtherance thereof, the LAO by his award dated  August   6,  1983   determined  the   compensation  @ Rs.10,000/- per  acre. On  reference under  Section 18,  the District Judge  by his award and decree dated March 31, 1986 determined the  compensation @  Rs.30/- per  square yard. On appeal it  was confirmed  by the  Division Bench of the High Court. Hence this appeal by special leave.      It may  be relevant  to notice  at this  stage that the lands are  within the  Hyderabad Urban Agglomeration covered by Urban  Land Ceiling  and Regulation Act, 1976 (for short, the ’Ceiling  Act’) which  came into  force on  February 17, 1976. The  respondent filed  the statement  under Section  6 thereof  By   notification  dated  November  27,  1982,  the competent authority  under the  Ceiling  Act  issued  notice under Section 9 of the Act determining excess vacant land to

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be acquired  by the  Government. By  further  State  Gazette notification dated February 23, 1983 published under Section 10(3) of  the Ceiling  Act the  competent authority declared the acquired  land notified on November 4, 1982 in the State Gazette under  Section 10(1)  of the Act as excess land with effect from the said date to be deemed to have been acquired by and  wested in  the State  Government and  that it  stood vested absolutely in it free from all encumbrances.      Possession of  the acquired  land was  taken on June 2, 1984 and the compensation of a sum of Rs.8,43,778/- was paid in Form No.C on June 7, 1984.      The  first  contention  raised  by  Shri  Sitharamaiah, learned  senior   counsel  for  the  appellant  is  that  by operation of  Section 3  of the  Ceiling Act which came into force in relation to Andhra Pradesh on February 17, 1976, no person shall be entitled "to hold" any vacant land in excess of the  ceiling limit  on and  from  that  date.  Section  4 envisages ceiling  limit and  every holder of vacant land in excess of  the ceiling  limit shall  file a  statement on or before six  months  from  February  17,  1976.  By  conjoint operation of  Section 6,  Rule 3  and Form  I,  holder  must specify vacant  land which  he desires  to retain within the ceiling limit.  A draft  statement should  be  filed  before competent authority who, after considering the objections to the draft statement, makes necessary alteration in the draft statement and prepares a final statement made under Sections 8 and  9 of the Act giving particulars of the vacant land in excess of  the ceiling limit which should be published under Section 10  [1] of the Act.. If any person interested in the vacant  land   makes  claimed  under  Section  10  [2],  the competent  authority,   after  considering   the  same  will determine the nature and extent of the right. Section 10 [3] requires the  competent authority  to publish  a declaration that the  excess vacant  land shall  be deemed  to have been acquired  by  the  Government  with  effect  from  the  date specified therein  and that the same shall be deemed to have been vested  in the  Government free  from all encumbrances. Under Section  10 [5], the competent authority may order any person in  possession of  the vacant  land to  surrender  or deliver possession  of the excess land within thirty days of service of notice. If he refuses, the competent authority is empowered under  Section 10  [6] to take possession by using such force  as may  be  necessary  .  Section  11  envisages payment of  compensation for  the excess land deemed to have been  acquired.   By  operation  of  the  declaration  under Sections 10(3)  and 10(1)  referred  to  hereinbefore,  such land, the  subject of the acquisition is deemed to have been vested  in   the  State  free  from  all  encumbrances.  The respondent/claimants are  entitled only  to the  payment  of compensation as  provided in  Section 11 of the Ceiling Act. The Civil  Court, therefore,  is devoid  of jurisdiction  to determine the compensation under the Act, since the field is already  occupied  by  the  Ceiling  Act.  Determination  of compensation at  the  enhanced  rate  by  the  Civil  Court, therefore, is  clearly an  error apparent on the face of the record. The  Government, therefore, does not have to acquire land since  the land  already vested  in it under Section 10 [3] free  from all encumbrances. The vesting shall be deemed to have  taken place  from February  17, 1976,  the date  on which the Urban Ceiling Act came into force. Sri Sitamaraiah also contended  that the  District Court  and the High Court committed grave  error in  determining the  market  value  @ Rs.35/- per  square yard. In Ex.A1 to A4, the market rate of the lands  sold was  Rs.6/- per  square yard  only  and  the remaining price  of Rs.29/-  was for development. The courts

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below, therefore, were in error in awarding the compensation @ Rs.30/- per square yard.      Shri K.  Madhava Reddy,  learned senior counsel for the respondent, contended that the appellant having proceeded to acquire the  land under  the Acts  has no  power, unless the acquisition is  withdrawn Section  48, to  contend that  the excess vacant under the Ceiling Act vests in the Government. notification  published  under  Section  6  of  the  Act  is conclusive of  the public purpose which would be crystalized by making  an award  under Section  11. Compensation  having been determined  under Section  11, as  directed by the High Court and  possession thereof  having been  taken, it  is no longer open  to the  appellant to  contend that they are not required to pay compensation under Section 23 of the Act nor is the  respondent entitled  to fall back upon Section 11 of the Ceiling  Act which is contrary to the Scheme of the Act. It cannot,  therefore, be  contended that  the respondent is entitled to  compensation  only  under  Section  11  of  the Ceiling Act.  He also  contended  that  the  Government  had exempted the  lands from the Ceiling Act.Therefore, the High Court was  right in  determining the  compensation under the Act.  He   further  contended   that  the   Hyderabad  Urban Development Authority  [for short,  ’HUDA’] itself  had sold the lands in the neighborhood @ Rs.30/- per square yard and, therefore, that  would form  basis for  determination of the compensation in  respect of the acquired land. The reference Court, therefore,  was right  in placing  reliance  on  that piece of evidence.      The  rival   contentions  give   rise  to  the  primary question: whether  the excess  vacant land  covered  by  the Ceiling Act  stood vested  in the  State  is  liable  to  be acquired under the Act? It is seen that Section 3 in Chapter III of  the Ceiling  Act declares  that except  as otherwise provided in the Act, on and from the commencement of the Act [February 17, 1976 in relation to Andhra Pradesh) "no person shall be  entitled to  hold any vacant land in excess of the ceiling  limit".  The  ceiling  limit  for  Hyderabad  Urban Agglomeration is  1000 sq. meters prescribed in category ’B’ of Schedule  I referred in Section 4. "Hold" means own. This expression connotes  two concepts, i.e., physical possession or legal  title to the vacant lands. Both the concepts stand attracted to  the concept  ’hold’ under the Ceiling Act. The owner or  excess vacant  land in excess of the ceiling limit is required  to file  a statement  under Section  6  and  by operation of  Section 3,  he ceases  to hold the said vacant land subject  to the  operation of  the  provisions  of  the Ceiling Act.      Section 5  prohibits transfer  of vacant land in excess of the ceiling limit at any time between commencement of the appointed day  and the  commencement of  the Act.  Section 6 enjoins the  holder of  the vacant land in excess of ceiling limit to  file a statement within the prescribed time in the manner laid  under  the  Act  the  rules  and  in  the  form prescribed  therefor.   Section  8   enjoins  the  competent authority to  prepare a  draft statement  as regards  vacant land  held  in  excess  of  the  ceiling  limit.  Section  9 envisages final  statement after  disposal of objections, if any, received  in that  behalf and  service of the notice in that behalf  on the  person concerned  as envisaged therein. Under Section  10(1), after  service of  the statement under Section 9  on the  concerned person, the competent authority should cause  publication of  a notification  in  the  State Gazette with particulars of the vacant land in excess of the ceiling limit,  for information of the general public. After considering claims,  if any  laid under  sub-Section (2) and

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disposal thereof,  the competent  authority shall  determine the nature  and extent of such claim and pass such orders as it  deems   fit.  Thereafter   the  competent  authority  by notification under  Section 10(3)  published  in  the  State Gazette may  declare that  the excess  land published  under sub-Section (1) shall he deemed to have been acquired by the State Government  with effect from the date specified in the declaration and  such land  shall "be  deemed to have vested absolutely  in   the  State   Government   free   from   all encumbrances with  effect from  the date  so specified". The word "deemed"  is used  to give  effect to  the operation of Section 3  from the  date the Act was brought into force. In other words,  the deemed  vesting under  Section 10(3) would date back  to February 17, 1976 and the date specified under Section 10 [3]. In Vatticherukuru Village Panchayat vs. Nori Venkatarama Deekshithulu  & Ors.  [(1991) Supp. 2 SCC 228 at 239] this  Court in  para 10  had held  that the word ’vest’ takes varied  colors from the context and situation in which the word  came to  be used  in the  statute.  It  is  common knowledge that under the Act, the acquired lands vest in the State from  the date  of taking possession  under Section 16 of 17  [2]. Under  the land reforms like abolition of estate and taking  over thereof  the vesting  takes effect from the date of  publication of  the notification  in  the  official gazette. In  Consolidated Coffee Ltd. & Anr. etc. vs. Coffee Board, Bangalore  etc. etc.  [1980) 3  SCR 625  at 645] this Court had  held that  the word ’deemed’ is used a great deal in modern legislation in different senses and it is not that a deeming  provision is  every time  made for the purpose of creating a  fiction. A  deeming provision is made to include what is  obvious or  what is  uncertain or to impose for the purpose of a statute an artificial construction of a word or phrase that would not otherwise prevail, but in each case it would be  a question  as to with what object the Legislature has made  such a  deeming provision.  It would  thus be seen that determination  of the  excess ceiling  land pursuant to the statement  filed under  Section 6  becomes conclusive by publication of  the notification  under sub-Section  (3)  of Section 10  and the  excess lands were prohibited to be held under sub-Section 3 on and from the date of the commencement of the  Act. Such  excess and  shall vest  in the State only from a date specified in the notification. The vesting under Section 10  [3] takes effect from the date of publication of the notification  under sub-Section (3) of Section 10 in the State Gazette  with effect  from the date specified therein. It would  thus be  apparent that the State acquired absolute right, title and interest in the excess urban vacant land in the  State   from  the   date  of  the  publication  of  the notification under  Section 10  [3] of  the Ceiling  Act and from February 28, 1983 that date the State Government became absolute owner  of the  excess vacant  land  free  from  all encumbrances.      The question,  therefore, is:  whether it  is necessary for the  Government to  determine compensation under Section 23 of  the Ceiling  Act for the land which already vested in it under  the Ceiling Act. In Maharao Sahib Sri Bhim Singhli etc. etc. vs. Union of India & Ors. etc. etc. [(1985) Supp.1 SCR 862], where the constitutionality of the Ceiling Act was questioned, the Constitution Bench had held that the primary object and  purpose of  the Ceiling  Act is  to acquire such land as may be in excess of the ceiling limit with a view to prevent concentration  of urban  land in  the hands of a few persons and speculation and profiteering therein and also to bring about  an equitable  distribution  of  land  in  urban agglomerations to subserve the common good in furtherance of

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Article 39(c) and (b) respectively of the Constitution. this view was reiterated in Union of India vs. Valluri Basavaiah Chaudhary [(1979)  3 SCR  802]  and  State  of  Gujarat  vs. Parshottamdas Ramdas  [(1988)  1  SCR  997].  In  Dattatrava Shankarbhat Ambalgi  & Ors.  vs. State of Maharashtra & Ors. [AIR 1989  SC 1796], a Bench of two Judges of this Court had held that  the land  to the  extent which  falls within  the ceiling area stands as a class different from the land which is in  excess of  the ceiling  area.  It  is  liable  to  be declared surplus  to give  effect to  the purpose and object envisaged under the Act. The Ceiling Act is a self-contained Code. As  far as  the acquisition of surplus of ceiling land and payment  of compensation is concerned, it is governed by the provisions  of the  Ceiling Act. It was, therefore, held that it would not be necessary to acquire the land under the Maharashtra Act  No.37 of 1966 resulting in misuse of public funds by  granting higher  compensation, when the purpose of acquisition could be achieved on payment of lesser amount of compensation prescribed in Section 11 of the Ceiling Act. In Parshottamdas’s case  [supra], the same question had arisen. Another Bench  of two  Judges had  held therein at page 1007 that it  is open  to the  State Government  to withdraw from acquisition under  the Land  Acquisition Act  and  when  the lands under  the Ceiling  Act could  be acquired  by  paying compensation as  provided thereunder, it would not be proper to  compel   the  Government   to  acquire  them  under  the provisions of  the Land  Acquisition Act,  1894. As  already stated, the  Act has  the overriding  effect  on  all  other laws". In  State of M.P. vs. Surendra Kumar & Anr. [(1995) 2 SCC 627],  a Bench  of two  Judges  [to  which  one  of  us, K.Ramaswamy, J.,  was a  member] was  to consider whether it would be open to the Government to purchase the land pending proceedings under  the Ceiling  Act and  publication of  the declaration under  Section 10 [3]. This Court at page 629 in para 3 had held that two courses were open to the Government in  that   situation.  The   Government  could   return  the application for permission for sale; finalize the process in Chapter Ill or it could purchase the lands. It was held that there was  no prohibition  for the  State  to  purchase  the property though the declaration was not finalized.      It would,  thus, be  clear that when the vacant land is declared under  the Ceiling Act, it is not necessary for the State to  acquire the  excess vacant land vested in it under the Act.  But unfortunate  to the  appellant that benefit of the declaration  was unavailable  for the  reason  that  the Government  in  GOMs  No.1552/MA  dated  May  20,  1981  had permitted  HUDA  to  acquire  the  surplus  land  under  the provisions of  the Act.  In consequence, having exempted the excess vacant lands from the purview of the Ceiling Act, the appellant had  denied itself of the benefit of Section 11 of the  Ceiling   Act  to   pay  compensation   as   prescribed thereunder. The result is that the appellant would determine the compensation under the Land Acquisition Act.      The next  question is:  whether determination of market value at  Rs. 30/- per sq. yd. is valid in law? The District Judge had  proceeded  on  the  premise  that  the  HUDA  had acquired adjacent  land under the Act and had sold @ Rs.35/- per sq. yd. and that, therefore, the compensation claimed at Rs.30 per  square yard  should be  paid to  the respondents. That found  favour with  the High Court. It is stated in the evidence adduced  on behalf of the appellant that out of the sale consideration  of Rs.35/-  per sq. yd., the cost of the land was Rs.6/- per sq.yd. and Rs. 29/ was collected towards tentative development  charges. They  were tentative  prices fixed thereunder.  In  other  words,  Rs.29/-  was  incurred

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towards developmental  charges and Rs.6/- per sq.yd. was the actual cost.  The sales  took place  in the year 1976. It is seen that  the lands  were being  used as  horse-stable. The respondent claimed  compensation @  Rs.30 per  sq. yd. It is seen that the notification under Section 4(1) of the Act was issued on  July 27, 1978. The sales by the HUDA of the plots of the  neighboring lands  took place in the year 1976 after full development.  The lands  required  development.  It  is well-settled law  that deduction  of  developmental  charges varies  between  33-1/3%  to  65%  depending  on  facts  and circumstances in each case. view of the fact that we have in evidence  tentative   developmental  charges  of  Rs.29  per incurred in  1975-76, taking  a pragmatic view we that after deducting developmental  charges respondent  is entitled  to compensation @  Rs.8/-  sq.yd.  with  a  statutory  rate  of solatium on  enhanced compensation @ 30% and 9% interest for one year  from the  date of taking possession, i.e., June 2, 1984 and  after expiry  of one  year, @ 15% till the date of deposit. The respondent is not entitled to additional amount under Section  23 [1-A]  for the  reason that the respondent had filed  W.P No.2510  of 1982 and  kept the matter pending till the Amendment Act became operative. The award could not be made  on account  of the  pending proceedings in the High Court and  the same  was made  as per  the directions of the High Court.      The  appeal   is  accordingly   allowed  but,   in  the circumstances, without costs.