2006 Supreme(SC) 80

2006(1) Supreme 657
Supreme Court of India
(From Karnataka High Court)
B.P. Singh and Arun Kumar, JJ.
Smt. Bailamma @ Doddabailamma (Dead) and Ors. —Appellants
versus
Poornaprajna House Building Co-operative Society and Ors. —Respondents
Civil Appeal Nos. 2013-2015 of 1999
With
Civil Appeal Nos. 2016-2023 of 1999
And
Civil Appeal Nos. 2073-2077 of 2000
All Decided on 31-1-2006
Counsel for the Parties :
For the Appellants : A.K. Ganguly, L. Nageshwar Rao, Sr. Advocates, Naveen R. Nath, Mrs. Lalit Mohini Bhat, Ms. Anitha Shenoy Ms. Hetu Aroro, S. Udaya Kumar Sagar, V. Laxminarayana, Ms. A. Shivram, G. Ramakrishna Prasad, Mohd. Wasay Khan, Kasi Viswanatha and B.L. Kanti, Advocates.
For the Respondent : P.P. Rao, T.L.V. Iyer, Sr. Advocates, R.S. Hegde, Ms. Mahalaxmi Pavani, Balaji, P.P. Singh, N. Ganpathy, Ranjan Kumar and Sanjay R. Hegde, Advocates.

Important Point
Once an order of stay is obtained and the Government and the Collector are prevented from taking any further action pursuant to the declaration, they cannot be faulted for the delay, therefore, the period during which the order of stay operates must be excluded from the period provided u/s 11A of the Land Acquisition Act, for making the award.

Headnote:(i) Land Acquisition Act, 1894—Sections 11, 11A and 12 As Amended by Land Acquisition (Amendment) Act, 1984—Period within which an award shall be made—Explanation to Section 11A clarifies that in computing period of two years, the period during which action or proceedings to be taken in pursuance of the said declaration is stayed by an order of Court shall be excluded.

       Held : The scheme of the Land Acquisition Act, 1894 is that if a declaration is published under Section 6 of the Act, the Collector is to take an order for acquisition of the lands notified. For this purpose, the Collector is required to demarcate the lands proposed to be acquired, get the same measured and a plan to be prepared as required to be done by Sections 7 and 8 of the Act. Under Section 9 the Collector is required to get published a public notice stating that the Government intends to take possession of the land and that claims to compensation for all interested in such land may be made to him. The notice must enumerate the particulars mentioned in Sub-Section (2) of Section 9 of the Act. The said notice must also be served on the persons interested as provided in Sub-Sections (3) and (4) of Section 9. After notices have been issued under Section 9 of the Act, the Collector proceeds to enquire into all the matters specified in Section 11 of the Act. Sections 11, 11A and 12 of the Act as amended by Land Acquisition (Amendment) Act 1984 are crucial for deciding the questions involved in these appeals. (Para 6)

       Section 11 envisages that an enquiry may not be concluded on the very first day and, therefore, authorizes the Collector to adjourn the considerations of objections to any day fixed in the notice. However, after considering the objections he is obliged to make an award under his hand regarding (i) the true area of the land; (ii) the compensation which in his opinion should be allowed and (iii) the apportionment of the compensation amongst the persons interested. The first proviso to Section 11 provides that an award shall not be made by the Collector without the previous approval of the appropriate Government or of such officer as the appropriate Government may authorized. Thus before an award can be said to have been made it is mandatory that it must be approved by the Government or the officer authorized in this behalf. Section 11A provides the period within which an award shall be made. It prescribes a period of two years from the date of publication of declaration as the period within which an award must be made. If no award is made within that period the entire proceedings for the acquisition of the land shall lapse. The explanation to Section 11A clarifies that in computing the period of two years, the period during which action or proceedings to be taken in pursuance of the said declaration is stayed by an order of a Court shall be excluded. (Paras 7 to 9)

       (ii) Land Acquisition Act, 1894—Sections 11, 11A and 12—Compensation claim—Computation of period of two years for making the award in accordance with Section 11A of the Act—Collector signed his award after an enquiry on 13-3-1990 and sent the same on the same date for approval of Government—Award was approved by the Government on 16-11-1992—In a writ petition filed by respondent Society, an interim order was made on 29-6-1990 staying operation of declaration dated 30-6-1988 for a period of two weeks from the date of the order—On 7-2-1991, order of stay was modified only to the extent that it shall not prevent the Government from granting approval to the award, submitted to it by the Collector—However, other steps could not be taken till the order of stay finally stood vacated on 18-11-1992—High Court upheld the award made by the Collector holding that award was approved within the period of two years by excluding the period during which the stay order operated—Submission made by appellants that stay order having been obtained by the Society itself, period should not have been excluded—Whether acceptable—(No)—Exclusion of period during which order of stay obtaining is not dependant upon the party obtaining such an order.

       Held : A mere reading of the order of stay of June 29, 1990 makes it abundantly clear that the operation of the declaration made under Section 6 of the Act was itself stayed, that is to say, as if no declaration has been made under Section 6 of the Act. Such being the position no steps required to be taken under the Act after publication of the declaration under Section 6 could be taken either by the Collector or by the Government. The Government was, therefore, prevented from approving the award submitted to it by the collector. Thus, it was on account of the order of stay passed by the High Court that the Government was prevented from granting approval earlier than February 7, 1991, when it was clarified that the order will not prevent the Government only from giving approval to the draft award pending consideration before it. Once, the order of stay was so modified, the Government granted approval on November 16, 1992. It was not disputed before us that if the period from June 6, 1990 to November 18, 1992 is excluded from the time taken in making the award, the award must be held to have been made within two years from the day of last publication of the declaration under Section 6 of the Act. The submission that the stay order was obtained by the Society itself is of no consequence, having regard to the language of explanation to Section 11A of the Act. The exclusion of the period during which the order of stay operated is not dependant upon the party obtaining such an order. An order passed by the Court must be obeyed by all concerned. In the instant case the Society moved the High Court and obtained an order of stay. In effect, the order operated in such a manner that the Government was prevented from granting approval to the award even if it so desired, nor could it refuse approval during the period the order of stay operated. Therefore, explanation to Section 11A came into operation and in accordance therewith the period during which the order of stay operated must be excluded from the total time taken to make the award. (Paras 12 and 13)

       (iii) Land Acquisition Act, 1894—Section 11A—Object of the provision—Computation of period of two years for making the award—Period during which an order of stay operated must be excluded.

       Held : Section 11-A was enacted with a view to prevent inordinate delay being made by Land Acquisition Officer in making the award which deprived owners of the enjoyment of the property or to deal with the land whose possession has already been taken Delay in making the award subjected the owner of the land to untold hardship. The objects and reasons for introducing Section 11-A into the Act were that “the pendency of acquisition proceedings for long periods often causes hardship to the affected parties and renders unrealistic the scale of compensation offered to them” and “it is proposed to provide for a period of two years from the date of publication of the declaration under Section 6 of the Act within which the Collector should make his award under the Act”. The emphasis, therefore, was on the Collector making his award within the period prescribed. However, the legislature was also aware of the reality of the situation and was not oblivious of the fact that in many cases acquisition proceedings were stalled by stay orders obtained from courts of law by interested parties. It, therefore, became imperative that in computing the period of two years, the period during which an order of stay operated, which prevented the authorities from taking any action or proceeding in pursuance of the declaration, must be excluded. If such a provision was not made, an acquisition proceeding could be easily defeated by obtaining an order of stay and prolonging the litigation thereafter. Explanation to Section 11-A was meant to deal with situations of this kind. The explanation is in the widest possible terms which do not limit its operation to cases where an order of stay is obtained by a land-owner alone. One can conceive of cases where apart from land-owners others may be interested in stalling the land acquisition proceeding. It is no doubt true that in most of the reported decisions the party that obtained the stay order happened to be the owner of the land acquired. But that will not lead us to the conclusion that the explanation applied only to cases where stay had been obtained by the owners of the land. There may be others who may be interested in obtaining an order of stay being aggrieved by the acquisition proceeding. It may be that on account of development of that area some persons in the vicinity may be adversely affected, or it may be for any other reason that persons in the locality are adversely affected by the project for which acquisition is being made. One can imagine many instances in which a person other than the owner may be interested in defeating the acquisition proceeding. Once an order of stay is obtained and the Government and the Collector are prevented from taking any further action pursuant to the declaration, they cannot be faulted for the delay, and therefore, the period during which the order of stay operates must be excluded. In a sense, operation of the order of stay provides a justification for the delay in taking further steps in the acquisition proceeding for which the authorities are not to blame. (Para 16)

       (iv) Land Acquisition Act, 1894—Sections 11, 11A, 12 and 18—Award—Legal requirements for making of—Mere fact that the Collector did not pronounce the award after notice in the presence of the parties interested will not invalidate the award—Award which has already been signed by the Collector becomes an award as soon as it is approved by the Government without any alteration.

       Held : The Collector is required to hear the persons interested and enquire into the objections, if any, raised by them on the points which he is required to determine. It is possible to conceive that he may hear the objections on several dates having regard to the number of objectors and the nature of the dispute that may arise, where-after he must make up his mind and prepare his award. It is not expected of him that he should prepare his award in presence of the persons interested, since the Collector may take some time to make up his mind on the matters he is required to incorporate in his award. Thereafter, he is required to send his award to the Government for approval. The approval of the award may take sometime, and it is not known to the Collector as to when the Government will approve the award. However, after the award is approved, if there is no alteration in the award, he is required to notify the parties concerned about the award. He may do so by fixing a date on which the parties may be required to appear for pronouncement of the award, or he may inform them by giving them written notice of the award. This is because an award is in the nature of an offer and must be communicated to the persons to whom the offer is made. There is nothing in Section 11 which expressly requires the Collector to announce his award in the presence of the persons interested, though there is nothing which prevents him from declaring the award on a date fixed by him for the purpose. However, having regard to the provisions of Section 12(2) of the Act, he must give immediate notice to such of the persons interested as are not present personally or by their representative when the award is made. Thus viewed, there can be no doubt that after the award is approved the same becomes an offer to be made to the persons interested, and this can be done by either giving notice to the persons interested of the date on which he may orally pronounce the award, or by giving written notice of the award to the persons interested. The question of limitation for filing a reference under Section 18 or Section 30 of the Act has to be determined by reference to the date on which the award was either pronounced before the parties who were present, or the date of the receipt of notice of the award by those not present. The mere fact that the Collector did not pronounce the award after notice in the presence of the parties interested will not invalidate the award, though it may have a bearing on the question of limitation in the matter of seeking a reference under Section 18 or 30 of the Act. The award which has already been signed by the Collector becomes an award as soon as it is approved by the Government without any alteration. At best the appellants can contend that it becomes an award when notice is given to the parties interested. Viewed from any angle, having regard to the fact that there is no dispute that the Government granted its approval on 16.11.1992 and notices were issued under Section 12(2) of the Act on November 20, 1992, it must be held that the award was made within the period prescribed by Section 11A of the Act. There was really no necessity for the Collector to sign the award again, nor does Section 11 require that for the purpose of pronouncing the award notice should be given by the Collector to the persons interested. Section 11 requires notice to be given for the purpose of hearing objections. After the objections are heard, the Collector has to apply his mind to all the relevant facts and circumstances and prepare an award whereafter he is required to send it to the Government for approval. There is nothing in Section 11 which requires him to give notice to the persons interested of the date for pronouncement of the award, though, as we have observed earlier, there is also nothing which prevents him from giving such notice. We agree with the finding of the High Court that once it is shown that the award was made and signed and approved by the Government within the period prescribed by Section 11A of the Act an award is validly made. In the instant case, we have satisfied ourselves that the award was received by the Deputy Commissioner after approval, and notice was thereafter issued under Section 12(2) of the Act on November 20, 1992. (Para 24)