State Of Bihar And Another vs Kundan Singh And Another

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 219 of 1962

Decision Date: 25 April, 1963

Coram: P.B. Gajendragadkar, K.N. Wanchoo, K.C. Das Gupta

In this matter the State of Bihar and another party were the petitioners and Kundan Singh and another individual were the respondents. The judgment was delivered on 25 April 1963 by the Supreme Court of India, with P. B. Gajendragadkar, K. N. Wanchoo and K. C. Das Gupta forming the bench. The case was cited as 1964 AIR 350 and 1964 SCR (3) 382, and it was recorded in the citator as D 1975 SC1097 (7, 8). The dispute arose under the Land Acquisition Act of 1894, specifically sections 18, 23 and 49, concerning the acquisition of part of a property and the determination of compensation. The appellant, representing the State, had acquired a plot of land on which the respondent’s property stood; the respondent’s property comprised a main house, an outhouse and an open space in front of them. The acquisition also included a fifty‑foot‑wide strip of land required for an electric wire, which incorporated a portion of the open space and the outhouse. The Land Acquisition Officer fixed the compensation for this acquisition at Rs 4,451 5/6. Dissatisfied with this award, the respondents filed an appeal under section 18 of the Act. In their petition for reference they argued that the lands and buildings contiguous to the acquired parcel, which remained in their possession, had not been taken, causing them a substantial loss; they further contended that the electric rope‑line now passed close to the remaining property, rendering it unsafe for habitation. On that basis they claimed additional compensation of approximately Rs 21,765 8, representing the expense incurred in constructing the main house. Before the District Judge, the respondents presented evidence that an application had been made prior to the award seeking a higher compensation on the same grounds. The District Judge accepted that only a narrow strip of land remained in front of the main building, thereby diminishing its utility, and consequently awarded an extra Rs 1,000. The respondents then appealed to the High Court, seeking a declaration that the Land Acquisition Officer should also acquire the main building together with the other acquired properties. The appellant argued that the respondents could not raise this claim because it could be made only under section 49 of the Act, and that it lay outside the scope of the reference that formed the basis of the appeal; the appellant also maintained that the plea had never been presented to the Land Acquisition Officer. The High Court rejected the appellant’s objections, granting the declaration sought by the respondents. The present appeal before the Supreme Court arose from a certificate issued by the High Court, and the respondents reiterated substantially the same contentions before this Court.

The arguments that had been presented before the High Court were again presented in this appeal before this Court. The Court held that the respondents had made their claim under section 23 of the Act and not under section 49. In fact, the respondents were seeking additional compensation by relying on the provisions of section 23 paragraph 1. The scope of the enquiry under section 18 paragraph 1 was expressly defined by that provision and limited to the grounds specified therein. Accordingly, the Court could not consider pleas raised by the owner under section 49 within an enquiry that was conducted under section 18. The scheme of section 49 required the owner to express a desire that the entire house be acquired before any award was made. Once such a desire was expressed, the procedure laid down in section 49 had to be followed by the authorities. That procedure was distinct and separate from the procedure applicable to a reference made under section 18 of law. In the present case, the respondents had not taken any step to express a desire that the whole of their house be acquired. Consequently, the High Court was not authorized to permit them to raise that point in an appeal that arose from a district judge order under section 18. The Court reviewed the relevant case law and cited Pramatha Nath Mullick v Secretary of State for India in Council (1929) L R 57 I A 100. It distinguished The Secretary of State for India in Council v R Narayanaswami Chettiar (1931) I L R 55 Mad 391. The Court also referred to Krishna Das Roy v The Land Acquisition Collector of Pabna (1911) 16 C W N 327.

The matter was a civil appeal before the appellate jurisdiction of this Court, designated as Civil Appeal Number 219 of 1962. The appeal challenged the judgment and decree dated August 31, 1960 delivered by the Patna High Court in the original decree numbered 7 of 1955. Counsel for the appellants comprised senior advocates, and counsel for the respondents also appeared on their behalf in the proceedings. The judgment was delivered on April 25, 1963 by Justice Gajendragadkar of this Court after considering the submissions of both parties. The appeal originated from proceedings under the Land Acquisition Act of 1894, which the Court referred to as the Act. The respondents owned a parcel of land measuring 0.12 acre located in village Bermo Number 18 within the Hazaribagh district. The government required that land for constructing an aerial rope‑way intended for the Bokaro Thermal Power Plant, and consequently issued a declaration under section 4 of the Act on August 9, 1952. The property standing on the acquired plot comprised two structures, one being the main building and the other consisting of out‑houses together with an open area in front of them. The government notification indicated that a width of fifty feet of open space was necessary for the installation of an electric wire.

It was observed that the acquisition notice also covered a portion of the open space in front of the premises together with the respondents’ out‑houses. Pursuant to the procedures prescribed in the Act, the Land Acquisition Officer determined that the compensation payable to the respondents should be Rs 4,4511516, and he stated that this sum reflected a fair and reasonable amount for the land and the out‑houses that were being acquired. The respondents were dissatisfied with the award and consequently filed an application for reference under section 18 of the Act. In paragraph I(d) of their petition for reference, they argued that the remaining lands and buildings contiguous to the land and building that had been acquired were left unacquired, causing them a substantial loss because the rope‑line ran close to the remaining property and rendered it unsafe for habitation. On that basis, they claimed that they should be compensated in the amount of Rs 21,765/8/- which they had spent on constructing the principal building, and they also contended that they would lose the monthly rent of Rs 160/- received from tenants of that building and therefore deserved appropriate compensation for that loss as well. In effect, this ground invoked the provisions of section 23(3) of the Act. The Deputy Commissioner of Hazaribagh thereafter prepared the reference as urged by the respondents. In his reference letter, the Deputy Commissioner recorded that the respondents sought additional compensation on the ground that the other lands and buildings adjacent to the acquired property, which remained unacquired, had caused them a considerable loss. The matter was then placed before the District Judge of Hazaribagh. During the hearing, the respondent identified as Kundan Singh, respondent No. 1, testified that on 22 October 1952 he had submitted an application requesting that the additional quarters, which were contiguous to the acquired land and had become useless to him, also be acquired. The learned District Judge examined the respondents’ contentions and held that the narrow strip of land left in front of the larger building adversely affected the utility of that building as well as the other unacquired portions of the respondents’ property. Consequently, the Judge ordered that, in addition to the compensation of Rs 4 451/5/6 already determined by the Acquisition Officer, an additional sum of Rs 1,000/- should be awarded to the respondents, expressing the view that the amounts fixed for the land actually acquired were appropriate and that only the extra Rs 1,000/- was necessary to address the impact on the unacquired property.

The Court recorded that the property which had not been acquired was adversely affected by the acquisition that had been carried out. The respondents therefore filed an appeal before the High Court of Patna invoking section 54 of the Land Acquisition Act. In that appeal they relied on a single ground: they alleged that a rope‑way had completely ruined the main building and, consequently, the Land Acquisition Officer could not lawfully acquire the out‑houses without also acquiring the main building. On that basis the respondents sought a declaration that the Officer should acquire the main building together with the other parcels of land that were the subject of the acquisition.

When the High Court considered this plea, the appellants – namely the State of Bihar and the Deputy Commissioner of Hazaribagh – argued that the respondents were not entitled to claim a declaration for the acquisition of additional property in the present appeal. Their contention was that the appeal arose from a reference made under section 18 of the Act and that a claim of the kind the respondents were making could only be raised under section 49 of the Act, which was outside the scope of the matter before the Court. The appellants further maintained that the respondents had never raised this issue before either the Land Acquisition Officer or the District Judge. The High Court rejected the appellants’ arguments and issued a direction ordering the Land Acquisition Officer to take over the remaining area and the building and to assess compensation for them in accordance with law. The High Court also stipulated that, once the assessment was completed, the additional sum of one thousand rupees that the District Judge had allowed should be deducted from the total compensation, and the balance should be paid to the respondents.

The appellants challenged the High Court’s order before this Court, attaching a certificate issued by the High Court. The principal question presented to the Court, on behalf of the appellants, was whether the High Court had erred in permitting the respondents to invoke section 49 of the Act in their appeal. The first issue that the Court needed to examine was whether the respondents had, in fact, made an application to the Land Acquisition Officer under section 49, as alleged by the first respondent in his evidence before the District Judge. The Court noted that the first respondent had testified that on 22 October 1952 he had submitted an application requesting that the other quarters also be acquired. In effect, he claimed that this application had been made under the provisions of section 49 of the Act after the date of the notification and before the award was made on 27 November 1952. The judgment of the District Judge indicated that he did not accept this plea and proceeded to decide the case on the basis that the respondents were seeking additional compensation under either the third or the fourth clause of section 23(1) of the Act. Had the District Judge held that an application under section 49 had indeed been made, the course of his consideration would have been different.

In the view of the Court, if the learned District Judge had received an application from the respondents that invoked section 49 of the Act before he made the award, the Judge would inevitably have examined that application and would have recorded his conclusion on the matter. Consequently, it was reasonable to infer that the District Judge either did not give any weight to the declaration of respondent No. I that he had filed such an application under section 49, or that the respondents simply pursued their claim for extra compensation under section 23 of the Act before the District Judge. When the controversy was later presented before the High Court, the appellants vigorously denied the respondents’ assertion that an application had been lodged with the Land Acquisition Officer under section 49. Although the statement of respondent No. 1 that he had made the application was not contested during cross‑examination, it was striking that the same statement had not been brought before the District Judge, and when an attempt was made to introduce it before the High Court, no copy of the alleged application was produced or shown to that Court. Moreover, the paper‑book prepared for the present appeal did not contain any printed copy of the purported application. The High Court also appeared not to have reached a definite finding that the statement of respondent No. I could be accepted as true. Nonetheless, the High Court held that the claim made by the respondents when they sought a reference under section 18 indicated that they were seeking protection under section 49, and on the basis of the allegation contained in paragraph I(d) of the respondents’ petition under section 18, the High Court concluded that the respondents had relied upon section 49 before the Land Acquisition Officer. The Court noted, however, that the ground advanced by the respondents in paragraph I(d) of their petition related to compensation under section 23 of the Act and not to any relief under section 49. Accordingly, the Court could not accept the argument that the present appeal should be dealt with on the premise that the respondents had filed an application under section 49 before the award was pronounced. By filing an application for reference, the respondents merely sought additional compensation pursuant to section 23(1), and that was the basis on which the learned District Judge considered and decided the claim. In light of these observations, the Court found it necessary to examine whether the High Court was competent to entertain the respondents’ plea under section 49 in the appeal that had been filed against the District Judge’s decision in the reference proceedings conducted under section 18 of the Act.

To ascertain the extent of the enquiry permitted by section 18, the Court examined the pertinent provisions of the Land Acquisition Act. Section 4 requires the publication of a preliminary notification when acquisition proceedings are contemplated. Section 5‑A stipulates that objections to the proposed acquisition must be heard. Section 6 provides for the declaration that a particular parcel of land is needed for a public purpose. Section 9 obliges the authorities to give notice to persons who have an interest in the land concerned. Section 11 prescribes the manner in which the enquiry must be conducted and authorises the Collector to make an award. Section 12 mandates that once made, the award be filed in the Collector’s office and that it be final in the terms prescribed. Section 16 empowers the Collector to take possession of the land that has been acquired. Section 18 deals with the procedure for referring a matter to the Court. In dealing with a claim for compensation made by the owner, the Court must also refer to the matters enumerated in section 23. The third clause of section 23(1) directs the Court, when fixing the amount of compensation, to consider any damage suffered by the interested person at the time the Collector takes possession because the land has been severed from his other holdings. The fourth clause further requires the Court to consider any damage caused at the time of possession by the acquisition’s injurious effect on the person’s other immovable or movable property or on his earnings. Section 18(1) states that any interested person who has not accepted the award may, by a written application to the Collector, request that the matter be referred either by the Collector or by the Court for determination, whether the objection relates to the measurement of the land, the amount of compensation, the persons entitled to receive it, or the apportionment of compensation among interested parties. Consequently, the scope of the enquiry under section 18(1) is expressly defined by that provision. The Court may consider objections concerning measurement, compensation amount, payable persons, and apportionment, and in assessing compensation it must account for the factors specified in section 23. The Privy Council, in Pramatha Nath Mullick v. Secretary of State for India, observed that the section clearly sets out four distinct grounds of objection that may be examined in reference proceedings. Accordingly, the Court found it difficult to accept the argument that reference proceedings under section 18(1) could also entertain pleas raised under section 49.

In the circumstances described, the owner of land that is subject to acquisition could seek additional compensation under section 23 of the Act when the portion taken materially reduces the value or usefulness of the remaining land that has not been acquired. When such a claim for extra compensation is made, it appropriately falls within the matters that may be examined in a reference proceeding made under section 18(1). However, if the owner asserts that the entire parcel of his property should be acquired and relies upon the provisions of section 49 to support that assertion, the claim cannot be introduced in a reference under section 18(1). The case reported in (1929) L. R. 57 I. A. 100 confirms that a claim of this nature must be pursued as a separate proceeding brought under section 49 itself.

Section 49 of the Act therefore governs the situation where an owner prefers total acquisition of a house, manufactory or other building rather than a partial taking. Sub‑section (1) provides that the provisions of the Act shall not be applied to acquire only a part of any such structure if the owner has expressed a desire that the whole building be taken. The owner may, at any time before the Collector makes his award under section 11, withdraw or modify his expressed desire by giving written notice. The provision also stipulates that if any doubt arises as to whether the land proposed to be taken forms part of a house, manufactory or building within the meaning of the section, the Collector must refer the question to the Court and may not take possession of the land until the Court has decided the issue. In determining the reference, the Court must consider whether the land proposed to be taken is reasonably required for the full and unimpaired use of the building in question.

Sub‑section (2) deals with claims made under section 23 where a person interested contends that the severance of the land to be acquired from his remaining land makes the claim unreasonable or excessive. If the appropriate Government shares that opinion, it may, at any time before the Collector makes his award, order the acquisition of the entire land of which the initially sought portion forms a part. Sub‑section (3) provides that, in such a case, no fresh declaration or further proceedings under sections 6 to 10 are required. The Collector must promptly furnish a copy of the Government’s order to the interested person and then proceed to make his award under section 11 in accordance with the provisions of sub‑section (1).

The Court observed that the statute expressly prohibited the enforcement of any provision of the Act for the purpose of acquiring only a portion of a house when the owner had expressed a desire that the entire house should be taken. That prohibition made it clear that, once an owner indicated a wish for total acquisition, the authorities could not proceed under the Act to acquire merely a part of the dwelling. Consequently, when a proposal was made to acquire a part of a house and a notification was issued on that basis, the owner was required to decide whether he would permit the partial acquisition. If the owner elected to permit the acquisition of only a part of the house, the authorities would continue the proceedings under the relevant provisions of the Act, issue an award directing payment of adequate compensation, and thereafter take possession of the portion acquired. Conversely, if the owner desired that the whole house be acquired, he was required to communicate that desire to the Land Acquisition Officer, and all further proceedings under the Act had to be halted. The provision therefore indicated that any objection to the acquisition of a part of the house had to be raised before an award was made under section eleven of the Act.

The Court further explained that such an objection should be made promptly after the initial notification was published under section four, because allowing the proceedings to continue and an award to be made before the objection was raised would cause unnecessary confusion and complications. Although the owner could later claim compensation under section twenty‑three of the Act, that issue was separate. The first proviso to section forty‑nine paragraph one reinforced the same principle. It permitted the owner, after having objected to the partial acquisition, to withdraw or modify that objection before the award under section eleven was rendered. If the objection was withdrawn, the acquisition process would resume; if the objection was modified, the steps prescribed in the other provisions of section forty‑nine would have to be followed. Accordingly, the objection to the partial acquisition had to be considered and resolved before any award was made under section eleven. The Court noted that, upon receiving an objection under section forty‑nine paragraph one, the Collector could accept the objection and accede to the owner’s wish for total acquisition of the house.

In this matter, it was noted that the Collector could accept an owner's assertion that the entire house was to be acquired; consequently, the proceeding would continue on the premise that the whole house was subject to acquisition. The Collector also held the authority to abandon the acquisition entirely if it appeared unwise to acquire the whole house, in which event the original notification would simply be withdrawn or cancelled. However, where the Collector refused to accept the owner's claim that only a portion of the house was being taken, the dispute required judicial determination in accordance with the second proviso to section 49(1). Under that proviso, the Collector was obligated to refer the issue to the Court and was prohibited from taking possession of the land until the Court resolved the question. The Court was instructed to consider whether the tract of land proposed for acquisition was reasonably necessary for the full and uninterrupted use of the house. Sub‑section (2) of section 49 appeared to envisage that, when land forming part of a house was acquired, the owner could seek additional compensation under the third clause of section 23. That sub‑section dealt with situations where the owner's claim under the third clause of section 23 was excessive or unreasonable, permitting the appropriate Government to acquire the entire parcel of land rather than pay an unreasonable amount of compensation. The provision further stressed that, when acquisition of land results in acquisition of a part of the house, the owner possessed two alternative remedies. The first remedy allowed the owner to claim additional compensation under section 23, making such a claim the subject of an enquiry under section 18. The second remedy enabled the owner to demand acquisition of the whole house before the acquisition proceeded, thereby creating a separate claim that had to be addressed under section 49 itself. Although both types of disputes were referred to the same Court by the Collector, the proceedings were distinct and had to be conducted separately. A claim under section 49, properly tried on the Collector’s reference under the second proviso, could not be conflated with a claim referred to the Court under section 18. Section 49(3) merely removed the necessity of issuing a fresh declaration or initiating other proceedings under sections 6 to 10 for cases falling within section 49(2). Consequently, the scheme of section 49 required the owner to express a desire for acquisition of the whole house before any award was made, after which the specific procedure prescribed by section 49 had to be followed, a procedure that remained separate from the procedure applicable to references made under section 18.

The Court explained that a claim made under section 49, which may be properly tried by the Court on a reference made by the Collector under the second proviso to section 49(1), must not be confused with a claim that is made in reference proceedings sent to the Court under section 18 by the Collector. Section 49(3) merely removes the requirement of issuing a fresh declaration or commencing other proceedings under sections 6 to 10 in cases that fall within section 49(2). Consequently, the Court observed that the design of section 49 requires the owner to state, before an award is made, that he desires the entire house to be acquired; once that desire is expressed, the procedure prescribed by section 49 must be followed. This procedure is distinct and separate from the procedure that applies when a reference is made under section 18 of the Act. In the instant matter, the respondents had taken no steps to express a desire that the whole of their house should be acquired, and therefore the High Court was not authorised to permit them to raise that issue on appeal from the order passed by the District Judge on a reference under section 18. Accordingly, the Court considered it unnecessary to examine the respondents’ contention that the property acquired in the present proceedings was subject to the provisions of section 49(1). The Court then turned to two relevant decisions that had been cited. In Secretary of State for India in Council v. Narayanaswamy Chettiar, the Madras High Court appeared to hold that section 49 does not obligate the claimant to put forward the specific claim that the whole house should be acquired at any particular stage of the proceedings. Referring to the case, C. J. Ramesam observed that the clause could not be read to imply that the claims covered by it must be made before the Collector makes his award, and Justice Cornish, delivering a concurrent judgment, agreed. Both judges, the Court noted, based their conclusion on the special circumstances in which the claimant made his claim under section 49 on 29 September, that is, after the award, and those circumstances clearly showed that the claimant was not at fault for the delay in expressing his desire under section 49(1). In the Court’s opinion, however, the scheme of section 49 is clear: section 49(1) imposes a prohibition on taking any further action under any provision of the Act where the owner expresses a desire that the whole of his house should be acquired, and this indication must be made after the relevant notifications are issued under sections 4 and 6 if it appears that…

If a portion of a landowner’s house is subject to acquisition, the owner must state his desire under section 49 (1) before any award is made under section 11. If the owner allows the acquisition proceedings to continue and an award is later issued, permitting a later declaration under section 49 (1) would create unnecessary complications. In such a case, the reference would have to be made under the second proviso to section 49 (1), which the statute does not envisage. Logically, any enquiry contemplated by section 49 must occur before any further action is taken under the other provisions of the Act. That requirement forms the main basis of the mandatory prohibition contained in section 49 (1). When this prohibition is read together with the first proviso to section 49 (1), it follows that the owner cannot rely on section 49 after an award has been made. That award would be one issued under section 1 1 of the Act. In our view, the High Court did not correctly interpret the effect of section 49 (1). It held that the provision did not require the claimant to present his claim before the award was made. In Krishna Das Roy v. The Land Acquisition Collector of Pabna (1), the Calcutta High Court took the opposite view, and we think that view is correct. That court held that if an owner wishes to make an application expressing his desire under section 49 (1), the application must be filed sometime before the award is actually made. Accordingly, this appeal is allowed, the order of the High Court is set aside, and the order of the District Judge is restored. No order as to costs will be made, and the appeal is allowed.