L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **&** **THE HONOURABLE MR.JUSTICE P.G. AJITHKUMAR** **TUESDAY, THE 23[RD] DAY OF AUGUST 2022 / 1ST BHADRA, 1944 LA.APP.NO. 258 OF 2021** **AGAINST THE JUDGMENT AND DECREE DATED 24.11.2020 IN L.A.R.NO.21 OF 2017 OF II ADDITIONAL DISTRICT COURT,** ## **THIRUVANANTHAPURAM** ## **APPELLANT/THIRD PARTY:** **KERALA STATE INDUSTRIAL DEVELOPMENT, CORPORATION LIMITED (KSIDC), T.C. 10/402-1, KESTON ROAD, KAWDIAR, THIRUVANANTHAPURAM -695003, REPRESENTED BY ITS MANAGING DIRECTOR.** **BY ADV P.U.SHAILAJAN** ## **RESPONDENTS/CLAIMANT AND RESPONDENT:** - **1 BEENA SARASAN, C1 TENNIS CLUB, ENCLAVE, KOWDIAR P.O., THIRUVANANTHAPURAM-695003.** - **2 STATE OF KERALA, REPRESENTED BY THE DISTRICT COLLECTOR, CIVIL STATION, KUDAPPANAKUNNU, THIRUVANANTHAPURAM695043.** **R1 BY ADV BEENA SARASAN,(Party-In-Person) R2 BY SMT DEVISHRI R- GOVERNMENT PLEADER** **THIS LAND ACQUISITION APPEAL HAVING COME UP FOR FINAL HEARING ON 04.08.2022, ALONG WITH CO.21/2022, THE COURT ON 23.08.2022 DELIVERED THE FOLLOWING:** 2 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN & THE HONOURABLE MR.JUSTICE P.G. AJITHKUMAR TUESDAY, THE 23[RD] DAY OF AUGUST 2022 / 1ST BHADRA, 1944 CROSS OBJECTION NO. 21 OF 2022** **IN** **L.A.APP.NO. 258 OF 2021** **(AGAINST THE JUDGMENT AND DECREE DATED 24.11.2020 IN L.A.R.NO.21 OF 2017 OF II ADDITIONAL DISTRICT COURT, THIRUVANANTHAPURAM)** ## **CROSS OBJECTOR/1ST RESPONDENT:** **BEENASARASAN,** **AGED 69 YEARS, D/O. LATE BALAGANGADHARAN, CI TENNIS CLUB ENCLAVE, KAWDIAR P.O, THIRUVANANTHAPURAM-695 003.** **BY ADV BEENASARASAN,(Party-In-Person)** ## **RESPONDENTS/2ND RESPONDENT AND APPELLANT:** - **1 STATE OF KERALA, REPRESENTED BY THE DISTRICT COLLECTOR, CIVIL STATION, KUDAPPANAKKUNNU, THIRUVANANTHAPURAM695 043.** - **2 KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LIMITED (KSIDC), TC 10/402-1, KESTON ROAD, KAWDIAR, THIRUVANANTHAPURAM-695 003, REPRESENTED BY ITS MANAGING DIRECTOR.** **R1 BY SMT DEVISHRI R - GOVERNMENT PLEADER R2 BY ADV P.U.SHAILAJAN** **THIS CROSS OBJECTION HAVING COME UP FOR FINAL HEARING ON 04.08.2022, ALONG WITH LA.App..258/2021, THE COURT ON 23.08.2022 DELIVERED THE FOLLOWING:** 3 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 ## **JUDGMENT** ## Ajithkumar, J. The judgment of the Additional District Judge-II, Thiruvananthapuram in L.A.R.No.21 of 2017 is under challenge. The appeal was filed by the requiring body, which was not a party to the L.A.R. It filed an application for leave, which was accorded. The 1st respondent in the appeal is the claimant, and she filed the Cross Objection. 2. The appeal was filed under Section 54 of the Land Acquisition Act, 1894 (for short “the LA Act”) and Order XLI, Rule 1 of the Code of Civil Procedure, 1908. The Cross Objection was also filed invoking the provisions of Section 54 of the LA Act, besides Order XLI, Rule 22 of the Code. The judgment in the L.A.R. was passed under Section 64 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (for short “Fair Compensation Act”). Hence the appeal and the cross objection are treated as one filed under Section 74 of the Fair Compensation Act. 4 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 3. Heard the learned Standing Counsel appearing for the appellant, the cross objector in person and the learned Special Government Pleader. 4. 15.38 Ares of land comprised in Sy.185/1 of Veiloor village in Thiruvananthapuram Taluk owned by the cross objector was acquired for the purpose of the “Life Science Park” on the request of the appellant. Notification under Section 4(1) of the LA Act was issued on 22.07.2008. Since an award was not passed before the commencement of Fair Compensation Act, the acquisition was proceeded with under the new Act. The Land Acquisition Officer fixed land value at Rs.1,02,000/- per Are. The cross objector protested. The matter was referred to the Court as per Section 64 of the Fair Compensation Act. 5. In L.A.R.No.21 of 2017, the Land Acquisition and Resettlement Authority (Additional District Judge -II), Thiruvananthapuram, fixed the land value relying on Ext. A2, at Rs.5,47,264/- per Are. Fair compensation was accordingly refixed. The appellant contending that the enhancement was 5 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 exorbitant and Ext.A2 should not have been placed reliance on, filed this appeal. 6. The cross objector would contend that the land value awarded by the lower authority is much less. At any rate, Ext.A9 should have been relied on and the land value fixed at Rs.6,91,600/- per Are. It is further contended that the multiplying factor of 1.2 as per the provisions under Section 26(2) of the Fair Compensation Act should have been applied. But the authority failed. Accordingly, the cross objector claimed further enhancement. 7. A preliminary point that since the appellant was not impleaded in the L.A.R. an opportunity to contest the matter was denied to it was raised. Therefore, the question now requires consideration is whether the impugned judgment is vitiated for the reason that the appellant was not made a party to the reference case. 8. The learned counsel appearing for the appellant would submit that the appellant has every right to participate in the proceedings before the lower authority in the light of 6 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 the provisions under Section 50 of the LA Act. The relevant provision is Section 95 of the Fair Compensation Act. It is contended that the appellant knew about the proceedings only after passing of the impugned judgment and immediately it has filed the appeal. 9. The learned Standing Counsel by placing reliance on the decisions in **U.P.Awas Evam Vikas Parishad v. Gyan Devi (Dead) by LRs. and others [(1995) 2 SCC 326]** and the subsequent decisions of the Apex Court, contended that the impugned judgment is liable to be set aside and the matter remanded to the lower authority for deciding the matter afresh. 10. The cross objector, on the other hand, would contend that Section 50 of the LA Act ensures a right to appear and adduce evidence in the proceedings before the Reference Court to local authorities and companies alone. The appellant, being an organ of the Government, it is not entitled to fall upon Section 50 of the LA Act and claim right to be heard. The cross objector has produced Annexure R1(a) to 7 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 R1(d) along with IA No.1 of 2022 in order to substantiate her contention that the proceedings for acquisition was initiated by the Government itself and hence the appellant cannot claim that it has an independent stake in the matter. 11. Section 50 of the Land Acquisition Act reads as follows: “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 any 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.” 12. A company is defined in Section 3(e) of the LA Act. Section 3(e) excludes Government companies from its purview. Decisions of the Apex Court by interpreting the provisions of Section 50 are placed reliance by the learned 8 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 Standing Counsel appearing for the appellant to fortify his contention that the appellant has a right to participate in the proceedings before the lower authority. As stated above, reference was under Section 64 of the Fair Compensation Act. Therefore, the provisions in the said Act govern the proceedings. The provision corresponding to Section 50 of the LA Act, is Section 95 of the Fair Compensation Act. Section 95 reads as follows: "95. Acquisition of land at cost of a local authority or Requiring Body.- (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 Requiring Body, the charges of land incidental to such acquisition shall be defrayed from or by such fund or Requiring Body. (2) In any proceeding held before a Collector or Authority concerned in such cases the local authority or Requiring Body concerned may appear and adduce evidence for the purpose of determining the amount of compensation: Provided that no such local authority or Requiring Body shall be entitled to demand a reference to the Authority concerned under section 64.” 9 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 ## 13. “Requiring Body” is defined in Section 3(zb) which reads thus: ““Requiring Body” means a company, a body corporate, an institution, or any other organisation or person for whom land is to be acquired by the appropriate Government, and includes the appropriate Government, if the acquisition of land is for such Government either for its own use or for subsequent transfer of such land is for public purpose to a company, body corporate, an institution, or any other organisation, as the case may be, under lease, licence or through any other mode of transfer of land.” 14. As against the definition of company in Section 3(e) of the LA Act, which excludes a Government company, requiring body as defined in Section 3(zb) of the Fair Compensation Act takes in its fold not only a company, but also a body corporate, or institution or any other person for whom the land is acquired. The right of the appellant which is the requiring body to participate in the proceedings before the lower authority has to be decided in the light of the aforesaid provisions and of course, the law laid down by the Apex Court and also this Court while interpreting Section 50 of the LA Act. 10 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 15. In **Gyan Devi** (supra), a Constitution Bench of the Apex Court, by majority, laid down the parameters for deciding the right of companies to participate in the proceedings before the Collector as well as the Reference Court. The majority view contained in paragraph 24 and reiterated in paragraph Nos.48 to 57 are stated below: “24. To sum up, our conclusions are: 1. Section 50(2) of the L.A. Act confers on a local authority for whom land is being acquired a right to appear in the acquisition proceedings before the Collector and the reference court and adduce evidence for the purpose of determining the amount of compensation. 2. The said right carries with it the right to be given adequate notice by the Collector as well as the reference court before whom acquisition proceedings are pending of the date on which the matter of determination of compensation will be taken up. 3. The proviso to Section 50(2)only precludes a local authority from seeking a reference but it does not deprive the local authority which feels aggrieved by the determination of the amount of compensation by the Collector or by the reference court to invoke the remedy under Article 226 of the Constitution as well as 11 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 the remedies available under the L.A.Act. 4. In the event of denial of the right conferred by Section 50(2) on account of failure of the Collector to serve notice of the acquisition proceedings the local authority can invoke the jurisdiction of the High Court under Article 226 of the Constitution. 5. Even when notice has been served on the local authority the remedy under Article 226 of the Constitution would be available to the local authority on grounds on which judicial review is permissible under Article 226. 6. The local authority is a proper party in the proceedings before the reference court and is entitled to be impleaded as a party in those proceedings wherein it can defend the determination of the amount of compensation by the Collector and oppose enhancement of the said amount and also adduce evidence in that regard. 7. In the event of enhancement of the amount of compensation by the reference court if the Government does not file an appeal the local authority can file an appeal against the award in the High Court after obtaining leave of the court. 8. In an appeal by the person having an interest in land seeking enhancement of the amount of compensation awarded by the reference court the local authority, the should be impleaded as a party and is 12 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 entitled to be served notice of the said appeal. This would apply to an appeal in the High Court as well as in this Court. 9. Since a company for whom land is being acquired has the same right as a local authority under Section 50(2), whatever has been said with regard to a local authority would apply to a company too. 10. The matters which stand finally concluded will, however, not be reopened.” 16. In **Abdul Rasak and others v. Kerala Water Authority and others [(2002) 3 SCC 228]** , the question was whether Kerala Water Authority has a right to participate in the proceedings before the Reference Court. The acquisition proceedings was initiated by the State Government and subsequently only the Kerala Water Authority came into existence. The Water Authority raised the contention that since the liability on account of enhancement in the compensation would have to be incurred by the authority, claimed right to participate in the proceedings. The Apex Court accepted the contention and held that the Water Authority was entitled to notice and right to participate in the proceedings before the Reference Court. For that, the 13 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 principle in **Gyan Devi** (supra) was relied on. 17. In **NTPC Ltd. v. State of Bihar and others** **[(2004) 12 SCC 96]** , the National Thermal Power Corporation Ltd. was the Acquiring Body. The Apex Court applying the principle in **Gyan Devi** (supra) held that the Acquiring Body, National Thermal Power Corporation Ltd., should have been made a party to the proceedings before the Reference Court. 18. In **Regional Medical Research Centre, Tribals v. Gokaran and others [(2004) 13 SCC 125]** , also a similar question was considered. The objection raised was that the appellant, Regional Medical Research Centre, was not a local authority or a company, and therefore, had no right to participate in the proceedings. The Apex Court took the view that the definitions of local authority and company in the LA Act are inclusive definitions and they include all bodies on whose behalf land is acquired. Again in **Vidarbha Irrigation** **Development Corporation v. Santosh Janba Warghane and another [(2019) 12 SCC 650]** , the question was 14 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 considered by the Apex Court. A creature under the Government being the acquiring body, after referring to **Gyan Devi** (supra) and also other decisions of the Apex Court on the point, held that the appellant Vidarbha Irrigation Development Corporation, was a necessary party to the proceedings before the Reference Court. 19. This Court in **Steel Authority India Ltd. v. State of Kerala [1995 (2) KLT 683]** also took the same view. Of course, following the principle in **Gyan Devi** (supra) only. It was held that the definition of the person interested in Section 50 of the LA Act 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. It was further held that every person whether it is a Government owned company or a private company was also be regarded as a 'person' for the purpose of participating in the proceedings if he or it is really interested in the outcome. 20. The contention of the cross objector is that as could be seen from Exts.R1(a) to R1(d), only on sanction by the 15 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 Government and approval for making payment of the award amount, the acquisition proceedings was initiated. It would show that the requiring body is none other than the Government and there is absolutely no reason or purpose for giving an opportunity to the appellant of being heard in the reference proceedings. 21. The appellant is a Corporation functioning under the State Government. However, having been constituted as a Corporation, with a limited liability, it has a separate legal entity. Interpreting Section 50 of the Act, the Apex Court and this Court held that even a Government owned company is regarded as a person for the purpose of participating in the proceedings before the Reference Court. The law laid down by interpreting the terms, the “local authority and company” in Section 50 of the LA Act is that even a Government company, despite the exclusion clause contained in Section 3(e) of the LA Act, has the right to participate in the proceedings before the Reference Court. 16 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 22. As per Section 11(1) of the LA Act, the District Collector can pass an award when a land is acquired only with previous approval of the appropriate Government. Therefore, in every case, before passing of an award, sanction of the Government is required. On a perusal of Ext.R1(d), it can be seen that such a sanction was accorded in respect of the acquisition of the land in question. Exts.R1(a) to R1(d) cannot be interpreted to mean in any other way. It would not imply that the entire obligation to pay the compensation was of the Government alone and the appellant does not have any role in the matter. 23. As pointed out above, as per Section 95(2) of the Fair Compensation Act, every requiring body; not merely a local authority and a company, has the right to participate in the proceedings before the Collector as well as the authority constituted under Section 51 of the Fair Compensation Act. Going by the wordings of the definition of “Requiring Body” contained in Section 3(zb) of the Fair compensation Act, every corporation, institution, organisation or person for whom land is acquired by 17 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 the appropriate Government has the right provided under Section 95(2) of the Fair Compensation Act. Therefore, the law laid down in **Gyan Devi** (supra) by the Constitution Bench of the Apex Court by interpreting Section 50 of the LA Act has been given a more expansive meaning in the Fair Compensation Act while including such a definition for the requiring body. 24. In the circumstances, we are of the view that the Requiring Body as used in Section 95(2) of the Fair Compensation Act takes in all bodies or persons for whom the land is acquired and such bodies and persons are necessary parties to the references under Section 64. There is no distinction whether the company or corporation is Government owned or not. 25. Viewed so, the appellant should have been a party to L.A.R.No.21 of 2017 before the Additional District Judge-II, Thiruvananthapuram. Since the impugned judgment was passed without the appellant as a party, same is not sustainable in law and is liable to be set aside. Going by the principle laid down in **Abdul Rasak** and **Regional Medical** 18 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 **Research Centre** referred to supra **,** the matter has to be remitted to the lower authority for fresh determination of the compensation after giving an opportunity to the appellant. 26. In the circumstances, we do not propose to consider the correctness of the compensation awarded by the lower authority. This appeal and cross objection are disposed of accordingly. The judgment dated 24.11.2020 of the Additional District Judge-II, Thiruvananthapuram in L.A.R.No.21 of 2017 is set aside. The matter is remitted. The appellant-Corporation shall be deemed to have been made a respondent in the proceedings. After carrying out necessary correction in the cause title of the reference case, the authority will proceed to dispose of the matter in accordance with law, after giving opportunity to both sides to submit pleadings and to adduce evidence in addition to the pleadings and evidence already placed on record. Considering the nature and circumstances of the case, there shall be a direction to dispose of L.A.R.No.21 of 2017 within a period of six months from the date of production of a certified copy of 19 L.A.A.No.258 of 2021 and Cross Objection No.21 of 2022 this judgment. Court fees paid by both the appellant and cross objector will be refunded. **Sd/-** **ANIL K. NARENDRAN, JUDGE** **Sd/-** **P.G. AJITHKUMAR, JUDGE** dkr