Important point
Right of a landholder to obtain an order of reference u/s 18 of Land Acquisition Act would arise only when he had not accepted the award.

Headnote:Land Acquisition Act, 1894—Section 18—Consent award passed by Land Acquisition Officer after parties negotiated as regards price of land and Respondents received the amount in full satisfaction of their claim—Application for reference—Prayer was rejected by Collector—Writ petition dismissed by High Court on ground that parties having entered into settlement and consent award having been passed, reference was impermissible—Division Bench allowed appeal taking a view that amount of compensation was not paid in terms of agreement and that Respondents could not be deprived of their statutory right of solatium and interest—Appeal—In consent award compensation included solatium and additional market value and claimants waived their right to file application for enhancement of compensation—Right of claimant to obtain order of reference could arise only when he had not accepted the award—Respondents having accepted the award were estopped from maintaining reference application—Division Bench acted illegally and without jurisdiction and impugned judgment was liable to be set aside.
       Held : A right of a landholder to obtain an order of reference would arise only when he has not accepted the award. Once such award is accepted, no legal right in him survives for claiming a reference to the Civil Court. An agreement between the parties as regard the value of the lands acquired by the State is binding on the parties. So long as such agreement and consequently the consent awards are not set aside in an appropriate proceeding by a court of law having jurisdiction in relation thereto, the same remain binding. It is one thing to say that agreements are void or voidable in terms of the provisions of the Indian Contract Act having been obtained by fraud, collusion, etc., or are against public policy but it is another thing to say that without questioning the validity thereof, the Respondents could have maintained their writ petitions. We have noticed hereinbefore that even in the writ petitions, the prayers made by the Respondents were for quashing the order dated 23.8.1999 passed by the Special Land Acquisition Officer and for issuance of a direction upon him to refer the matter to the Civil Court. The High Court while exercising its jurisdiction under Article 226 of the Constitution of India, thus, could not have substituted the award passed by the Land Acquisition Officer by reason of the impugned judgment. Furthermore, the question as regard the validity of the agreements had not been raised before the High Court. As indicated hereinbefore, the Division Bench of the High Court had also rejected the contention raised on behalf of the Respondents herein to the effect that the agreements did not conform to the requirements of Article 299 of the Constitution of India or had not been drawn up in the prescribed proforma. (Para 12)
       The Respondents having accepted the award without any demur were estopped and precluded from maintaining an application for reference in terms of Section 18 of the Act. It is also trite that by reason of such agreement, the right to receive amount by way of solatium or interest etc. can be waived. (Para 14)
       Keeping in view the fact that the condition precedent for maintaining application for reference under Section 18 is non-acceptance of the award by the awardee, in our considered opinion, the Division Bench acted illegally and without jurisdiction in passing the impugned judgment. The learned Single Judge was right in concluding that the writ petitions were not maintainable. (Para 18)

Judgment

S.B. Sinha, J.—Leave granted.

2. These appeals are directed against the judgment and order dated 18.2.2003 passed by a Division Bench of the High Court of Karnataka, Bangalore in Writ Appeal Nos. 1677, 2500 and 2501 of 2000 whereby and whereunder the writ appeals filed by the Respondents herein were allowed, reversing the judgment and order passed by a learned Single Judge of the said court dismissing the writ petitions filed by the Respondents herein.

3. Keeping in view the point involved in these appeals, it is not necessary to state the fact of the matter in great details. Suffice it to point out that for the purpose of submergence and construction of canal for the Upper Krishna Project, the Appellant State intended to acquire some lands including the lands belonging to the Respondents herein. The parties entered into negotiations as regard the price of the lands; pursuant whereto and in furtherance whereof consent awards were passed by the Special Land Acquisition Officer. The amount of compensation awarded in terms of the consent award was also received by the Respondents in full satisfaction of their claim. The Respondents, however, filed applications for reference to the Civil Court in terms of Section 18 of the Land Acquisition Act, 1894 (hereinafter referred to as “the Act”) claiming enhanced compensation. The said prayer was rejected by the Collector by an order dated 23.8.1999. The Respondents thereafter filed writ petitions before the High Court which were marked as Writ Petition No. 41354, 36840 and 36748 of 1999 praying therein for quashing of the said order as also for a direction upon the Respondent No.2 to refer the applications filed by them to the Civil Court for determining the amount of compensation in respect of the acquired lands.

4. By reason of judgments and orders dated 6.1.2000 and 19.1.2000, the said writ petitions were dismissed on the ground that the parties having entered into settlement as regard the price of the lands acquired and as a consent award had been passed pursuant thereto, recourse to Section 18 of the Act was impermissible. The Respondents herein filed writ appeals against the said judgments. The Division Bench of the High Court rejected the contention of the Respondents herein to the effect that the agreement between the parties had not been drawn up in terms of the form prescribed under Rule 10(b) of the Land Acquisition Rules and furthermore did not conform to the requirements of Article 299 of the Constitution of India. It, however, allowed the said writ appeals on the premise that the amount of compensation was not paid to the Respondents herein in terms of the agreement entered into by and between the parties and in any event, the Respondents could not have been deprived of their statutory right of obtaining solatium and interest in terms of the Act, directing:

“....We direct the respondents to compute the balance amounts payable to the claimants within an outer limit of twelve weeks from today and to disburse the same to the claimants immediately thereafter. With these directions, the appeals to stand disposed of. Parties to bear their own costs.

We clarify, that the claimants would be entitled to not only the statutory benefits but whatever interest that they are lawfully entitled to.”

The Appellants are, thus, before us.

5. Mr. Sanjay R. Hegde, the learned Counsel appearing on behalf of the Appellants, would submit that the Division Bench of the High Court committed a gross error in passing the impugned judgment insofar as it failed to take into consideration the scope, object and purport of Section 18 of the Act. Relying on the judgments of this Court in State of Gujarat and Others vs. Daya Shamji Bhai and Others [(1995) 5 SCC 746] and Ishwarlal Premchand Shah and Others vs. State of Gujarat and Others [(1996) 4 SCC 174], the learned counsel would contend that as the awards passed by the Land Acquisition Officer were consent awards, reference to the Civil Court in terms o

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2005 Supreme(SC) 521

Important pointRight of a landholder to obtain an ­order of reference u/s 18 of Land Acquisition Act would arise only when he had not accepted the award.

Cases Referred (3)

Important point
Right of a landholder to obtain an order of reference u/s 18 of Land Acquisition Act would arise only when he had not accepted the award.