2002 JTR(SC) 119
2002 AIR(SC) 817 ; 2002 AIR(SCW) 477 ; 2002 1 AWC 706 ; 2002 2 ICC 837 ; 2002 1 JT 652 ; 2002 2 MLJ 48 ; 2002 1 Scale 538 ; 2002 3 SCC 228 ; 2002 1 SCR 615 ; 2002 2 UPLBEC 1601 ; 2002 KHC 1184 ; 2002 1 Supreme 442
2002(1) Supreme 442
SUPREME COURT OF INDIA
(From Kerala High Court)
R.C. Lahoti and Brijesh Kumar, JJ.
Abdul Rasak & Ors. -Appellants
versus
Kerala Water Authority & Ors. -Respondents
Civil Appeal Nos. 704-726 of 2002
(@ SLP (C) Nos. 8244-8266/2000)
With
C.A. No. 727 of 2002
(@ SLP (C) 2519/2001)
Decided on 25-1-2002
Counsel for the Parties :
For the Appellants : T.L. Vishwanatha Iyer, Senior Advocate, Abhay Kumar, S.N. Jha and Subramonium Prasad, Advocates.
For the Respondents : C.N. Sree Kumar and Ramesh Babu M.R., Advocates.
IMPORTANT POINT
The order of remand by High Court is unavoidable but in the interest of justice order of remand is maintained subject to certain directions given by Apex Court in the judgment.
Act Referred :LAND ACQUISITION ACT : S.50(2), .
(A) The Land Acquisition Act, 1894, Section 50(2), provided the statutory basis for the State of Kerala to acquire land for the Public Health Engineering Department, with possession taken in 1982 and a compensation assessment finalized by a Collectors Award in 1986. Subsequently, under Section 6, a declaration was invoked, and the constitution of the Kerala Water Authority as a statutory Corporation from 1.4.1984 (with retrospective effect to 1.3.1984) altered the liability for compensation. The appeal proceedings before the High Court intersected with the Constitution Bench judgment in U.P. Awas Evam Vikas Parishad vs. Gyan Devi, which held that the local authority benefiting from the acquisition is a proper party entitled to notice, participation, and the right to contest compensation determinations under Section 50(2) of the Act, a principle that applies to cases pending beyond the date of its pronouncement.
(B) Key legal principles include that the local authority for whose benefit land is acquired has a statutory right to be impleaded as a party in compensation proceedings, must receive adequate notice, and may oppose enhancement of compensation; the doctrine does not reopen finally concluded matters; and successor authorities assume liability only for awards post-dating their creation, while existing procedural rights must be preserved even on remand.
Facts of the case:
Land was acquired by the State of Kerala for the Public Health Engineering Department, with possession taken in August 1982 and a compensation award made in June 1986. Appeals challenging the compensation were pending before the High Court at the time of the Constitution Bench decision in 1994, which held that the Kerala Water Authority, having become a statutory corporation, was a necessary party. The High Court remanded the case for retrial after affording the new authority an opportunity to be heard, leading to these appeals by the claimants.
Findings of Court:
The Supreme Court affirmed the High Courts order of remand, holding that the Kerala Water Authority must be joined as a party from the outset, that its prior awareness of proceedings does not substitute for mandatory notice under the Act, and that procedural fairness requires allowing the Authority to cross-examine witnesses while also ensuring that unavailable witnesses prior statements are not excluded, subject to the rights of cross-examination and adduction of new evidence by all parties.
Issues:
Whether the Kerala Water Authority, as a successor statutory corporation, is a necessary party to the compensation proceedings; whether the High Court correctly applied the Constitution Bench ruling; whether the claimants should be protected from procedural prejudice due to the delay in joining the Authority and the unavailability of certain witnesses; and what directions are necessary to ensure a fair retrial without re-litigating finally decided issues.
Ratio Decidendi:
The Constitution Bench mandate that a local authority benefiting from land acquisition is a proper party with full procedural rights binds the present case, necessitating remand with the Kerala Water Authority impleaded as defendant, but the Court tailored procedural safeguardsdeeming the Authority to be on record, preserving prior witness statements, and allowing cross-examination and fresh evidenceto balance fairness to the claimants with compliance to the Act.
Result:
The appeals are dismissed, the High Courts order of remand is upheld with specific directions for the Civil Court to conduct a retrial in compliance with the Constitution Bench judgment, ensuring the Kerala Water Authority participates as a party, that witnesses already examined need not be re-examined unless their evidence is contested, and that both parties retain full rights to adduce and cross-examine evidence.
(A) The Land Acquisition Act, 1894, Section 50(2), provided the statutory basis for the State of Kerala to acquire land for the Public Health Engineering Department, with possession taken in 1982 and a compensation assessment finalized by a Collectors Award in 1986. Subsequently, under Section 6, a declaration was invoked, and the constitution of the Kerala Water Authority as a statutory Corporation from 1.4.1984 (with retrospective effect to 1.3.1984) altered the liability for compensation. The appeal proceedings before the High Court intersected with the Constitution Bench judgment in U.P. Awas Evam Vikas Parishad vs. Gyan Devi, which held that the local authority benefiting from the acquisition is a proper party entitled to notice, participation, and the right to contest compensation determinations under Section 50(2) of the Act, a principle that applies to cases pending beyond the date of its pronouncement.
(B) Key legal principles include that the local authority for whose benefit land is acquired has a statutory right to be impleaded as a party in compensation proceedings, must receive adequate notice, and may oppose enhancement of compensation; the doctrine does not reopen finally concluded matters; and successor authorities assume liability only for awards post-dating their creation, while existing procedural rights must be preserved even on remand.
Facts of the case:
Land was acquired by the State of Kerala for the Public Health Engineering Department, with possession taken in August 1982 and a compensation award made in June 1986. Appeals challenging the compensation were pending before the High Court at the time of the Constitution Bench decision in 1994, which held that the Kerala Water Authority, having become a statutory corporation, was a necessary party. The High Court remanded the case for retrial after affording the new authority an opportunity to be heard, leading to these appeals by the claimants.
Findings of Court:
The Supreme Court affirmed the High Courts order of remand, holding that the Kerala Water Authority must be joined as a party from the outset, that its prior awareness of proceedings does not substitute for mandatory notice under the Act, and that procedural fairness requires allowing the Authority to cross-examine witnesses while also ensuring that unavailable witnesses prior statements are not excluded, subject to the rights of cross-examination and adduction of new evidence by all parties.
Issues:
Whether the Kerala Water Authority, as a successor statutory corporation, is a necessary party to the compensation proceedings; whether the High Court correctly applied the Constitution Bench ruling; whether the claimants should be protected from procedural prejudice due to the delay in joining the Authority and the unavailability of certain witnesses; and what directions are necessary to ensure a fair retrial without re-litigating finally decided issues.
Ratio Decidendi:
The Constitution Bench mandate that a local authority benefiting from land acquisition is a proper party with full procedural rights binds the present case, necessitating remand with the Kerala Water Authority impleaded as defendant, but the Court tailored procedural safeguardsdeeming the Authority to be on record, preserving prior witness statements, and allowing cross-examination and fresh evidenceto balance fairness to the claimants with compliance to the Act.
Result:
The appeals are dismissed, the High Courts order of remand is upheld with specific directions for the Civil Court to conduct a retrial in compliance with the Constitution Bench judgment, ensuring the Kerala Water Authority participates as a party, that witnesses already examined need not be re-examined unless their evidence is contested, and that both parties retain full rights to adduce and cross-examine evidence.
ORDER
Leave granted.
2. Under Notification dated 19.07.1981, issued under Section 4 of Land Acquisition Act, 1894, the State of Kerala acquired land for the benefit of Public Health Engineering Department of the State Government. On 27.08.1982, possession was taken over the acquired land. Sometime in June, 1983, a declaration under Section 6 of the Land Acquisition Act was made. The Collector (Land Acquisition) initiated proceedings for assessing the amount of compensation payable and made an Award on 15th June, 1986. The claimants sought for a reference to the Civil Court seeksation which was made. These reference applications came to be decided by different awards made by the Civil Court between 1989 and 1991.
3. With effect from 1st April, 1984, the State of Kerala, through an executive order, constituted Kerala Water Authority (K.W.A., for short) as a statutory Corporation. The Kerala Water Supply and Sewerage Act, 1986 (Act No. 14 of 1986), which was given a retrospective operation with effect from 1st day of March, 1984 declared Kerala Water Authority to have been constituted under the Act.
4. The State of Kerala and Kerala Water Authority preferred appeals, laying challenge to the several awards made by the Civil Court and for enhancing the amount of compensation. During the pendency of appeals before the High Court, came the Constitution Bench decision of this Court in U.P. Awas Evam Vikas Parishad vs. Gyan Devi (Dead) By L.Rs. and Others, (1995(2) SCC 326), wherein it was held that the company for whose benefit the land was acquired was also entitled to appear and adduce evidence for the purpose of determining the compensation. One of the grounds which persuaded the Constitution Bench in forming that opinion was that the amount shall have to be paid by the local authority and, therefore, it was a proper party entitled to contest the proceedings. We need not reproduce in extenso the law laid down by the Constitution Bench. For our purpose, it would suffice to note that in the opinion of the Constitution Bench, the right conferred on the local authority under Section 50(2) of the Land Acquisition Act, in the light of the scheme of the Act, carried with it the right to be given adequate notice by the Collector as well as the reference court before whom acquisition proceedings are pending of the date on which the matter of determination of compensation will be taken up; the local authority is a proper party in the proceedings before the reference court and is entitled to be impleaded as a party in those proceedings wherein it can defend the determination of the amount of compensation by the Collector and oppose enhancement of the said amount and also adduce evidence in that regard; in the event of enhancement of amount of compensation by the reference court if the Government does not file any appeal, the local authority can file an appeal against the award in the High Court after obtaining leave of the Court. The Constitution Bench, however, added a rider to its judgment that the law laid down by it would not have the effect of re-opening the matters which stand finally concluded.
5. It cannot be doubted that on 20th October, 1994, the date on which the Constitution Bench delivered its judgment, the matters relating to compensation in the present case had not achieved the finality and had not stood finally concluded inasmuch as the same were pending in appeal in the High Court and appeal is a continuation of original proceedings. So far as the award given by the Collector is concerned, that can be said to have become final before the date of decision of Constitution Bench but not the award given by the Civil Court on reference.
6. The High Court, in its impugned judgment, formed an opinion that the law laid down by the Constitution Bench governed the cases at hand and, therefore, the award given by the Civil Court on reference, stood vitiated for want of notice to K.W.A. The High Court allowed all the appeals pending before it and remanded the case for decision afresh by the reference court, after affording the parties an opportunity of adducing evidence in support of their respective contentions. Feeling aggrieved by the order of remand, the claimants have filed these appeals, by special leave.
7. Shri T.L.V. Iyer, the learned senior counsel for the claimant-appellants has submitted that Kerata Water Authority is 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. K.W.A. came into existence as a statutory Corporation on 1st April, 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 the K.W.A. 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.
8. Learned counsel for the claimant-appellants also submitted that Superintending Engineer of the K.W.A. had appeared as a witness in the proceedings before the Civil Court and, therefore, it can be inferred that the Authority was aware of the proceedings and if it did not promptly take steps for impleadment, it should not have been heard to complain before the High Court that it did not have notice of the proceedings and, that it was denied participation in the proceedings before the Civil Court. It has been held by this Court in Agra Development Authority vs. Special Land Acquisition Officer and Others (2001 (2) SCC 646) that where land was acquired at the cost of local Development Authority, a notice to it was mandatory and simply because the local authority was aware of the proceedings and had participated in the meetings where matters as to compensation were discussed, was not a sufficient compliance with Section 50 of the Land Acquisition Act.
9. In our opinion, the High Court has not erred in taking the view which it has taken and directing the reference cases to be remitted to the Civil Court consistently with the law laid down by the Constitution Bench, as K.W.A. shall have to be impleaded as party to the proceedings before civil court from very beginning a retrial becomes unavoidable.
10. However, the learned counsel for the appellants submitted that certain directions are called for inasmuch as some of the witnesses examined by the claimants may not now be available and the claimants should not be made to suffer if the K.W.A. were to contend before the Civil Court for the evidence of such witnesses being excluded from consideration because their statements were not recorded in the presence of the Authority. He further submitted that in the peculiar facts and circumstances of these cases, when the Authority has succeeded to the State Government (Public Health Engineering Department), and the cases are being remitted to Civil Court for no fault of claimants, some protection deserves to be given to the claimants for protecting them from any likely injustice. We find merit in the submission so made.
11. Keeping in view the fact that the Constitution Bench judgment of this Court was delivered during the pendency of appeals before the High Court and the manner in which K.W.A. also came to be constituted after commencement of land acquisition proceedings and the delay which has already taken place in the conclusion of the proceedings for finalising compensation which delay is not attributable to the claimants though, we maintain the order of remand made by the High Court but make the following directions :
1. The Kerala Water Authority shall be deemed to have been brought on record in the reference cases as defendant. The cause-title of the reference cases shall be amended accordingly. The K.W.A. may file its written statement to the claim petition filed by the claimants;
2. The Civil Court shall expeditiously
in compliance with the order of remand made by the High Court;
3. The statement of the witnesses already recorded on behalf of the claimants need not be recorded afresh;
4. The Kerala Water Authority shall be allowed an opportunity of cross-examining the witnesses which have already been examined. However, such of the witnesses as are not available, and, therefore, cannot be called before the Court, their statements shall not be excluded from consideration and shall be read in evidence;
5. The claimants may adduce such other evidence as they may propose to do and both the State of Kerala and Kerala Water Authority shall have the liberty of cross-examining such witnesses who are now examined by the claimants;
6. The Kerala Water Authority shall have the liberty of adducing such evidence as it may propose to do.
12. The Kerala Water Authority shall not be entitled to a separate notice of the proceedings. All the parties present in this Court are directed through their respective counsel to appear before the Trial Court on 05.03.2002.
13. The appeals stand disposed of accordingly.
(N.K.R.) Appeals disposed of accordingly.
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