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2004 Supreme(SC) 522

Supreme Court Of India
S.N. VARIA VA AND H.K. SEMA, JJ.
RAMESH DUTTAAppellant;
Versus
STATE OF PUNJAB AND OTHERSRespondents.
Civil Appeal No. 5349 of 1998,
Decided on April 20, 2004

Headnote:

Land Acquisition Act, 1894, Sections 5 17 and 23(1) fourthly and fifthly - Damages for loss of business due to acquisition of land- Appellant running poultry on the land was acquired- . Section 17 invoked and no objections were invited under Section 5 and possession taken- Award granted compensation apart for the land, an amount towards loss of business also granted- Financial Commissioner refused compensation towards loss of business as it was not established that poultry/eggs hatchery or machinery were damaged when possession of the land was taken - High Court observed that as approval under Section 11 was not taken compensation was not payable- Contention that as Section 17 was invoked the proviso to Section 11(1) would not apply not accepted- In determining compensation, the damage sustained by a person, at the time of taking possession by reason of his earnings being affected is to be computed and paid- Appellant, held entitled to compensation for loss of business-Reference Court directed to consider the amount of compensation payable for loss of earning and expenses incurred for change of place of business.[Paras 7 to 13]

ORDER

1. This appeal is against the judgment of the High Court dated20-8-1997.

2. Briefly stated, the facts are as follows:

The appellant was running a poultry farm on land admeasuring approximately 10,000 sq feet in Village Bhatinda. On 6-4-1992 a notification under Section 4 of the Land Acquisition Act was published proposing to acquire, amongst others, the land of the appellant. Section 17 of the Land Acquisition Act was invoked and no-objections were invited under Section 5. The notification under Section 6 was issued on 8-4-1992. The appellant was then given a notice to vacate on 17-4-1993 and possession was taken on

21-4-1993.

3. The Deputy Director, Animal Husbandry by his report assessed the loss to the appellant. The report of the Deputy Director was reconsidered by the Director of Animal Husbandry who reassessed the loss caused to the appellant by his having to close down his poultry business at such short notice. Based on the reports and other material an award came to be a published on 3-6-1994 wherein apart from the compensation for the land, an amount was awarded towards loss of business.

4. On 6-6-1994 the Financial Commissioner grants post facto approval to the award. However, while granting approval, the following observation was made:

"No compensation is payable under Section 23(1) fourthly of the Land Acquisition Act to the poultry as nowhere is it established that poultry/eggs, hatchery or machinery were damaged when possession of the land was taken over by PSIEC."

As a result of this, the appellant has not paid the compensation awarded towards loss of business.

5. The appellant thus filed a writ petition in the Punjab High Court. The Punjab High Court has, by the impugned judgment, held that under Section 11 of the Land Acquisition Act, previous approval of the appropriate Government is required for publishing an award. It is held that as approval has not been granted to payment of compensation for loss of business that portion of the award could not be .enforced. It is held that if the appellant feels aggrieved then he can apply for a reference under Section 18 of the Land Acquisition Act.

8. We have heard the parties at great length.

7. On behalf of the appellant it is submitted that as Section 17 was invoked the proviso to Section 11(1) would not apply. It is submitted that once the possession is taken, the Land Acquisition Officer is bound to pass an award. It is submitted that in such cases it would not be necessary to seek approval. We are unable to accept this submission. Section 17 merely permits taking of possession in case of urgency. However, even in such cases an award has to be passed. The award can only be under Section 11. Therefore, the proviso to Section 11(1) would apply even in such cases.

8. The next question that arises is whether the Financial Commissioner was correct in not giving approval to payment of compensation in respect of loss of business. We have already extracted the reasoning of the Financial Commissioner. That reasoning shows that compensation is refused on the ground that it is not established that poultry/eggs, hatchery or machinery were damaged when possession of the land was taken over. We are afraid that in so commenting the Financial Commissioner has displayed a total non-

g application of mind on his part. He has also ignored statutory provisions. As there was total non-application of mind on his part we adjourned this matter to give to the Financial Commissioner an Opportunity to reconsider. Even after reconsideration, we are told that the Financial Commissioner is sticking to his decision for the same reasons. It, therefore, becomes necessary to see the law. Section 23(1), inter alia provides as follows:

fourthly, the damage (if any) sustained by the person interested, at the time of the Collectors taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings;

fifth





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