2015 Supreme(SC) 955

SUPREME COURT OF INDIA
VIKRAMAJIT SEN, PRAFULLA C. PANT, JJ.
STATE OF HARYANA & ORS. – APPELLANTS
VERSUS
NORTHERN INDIAN GLASS INDUSTRIES LTD. – RESPONDENT
CIVIL APPEAL NO. 8378 OF 2015 [Arising out of SLP (Civil) No. 29250 of 2008]
Decided On : 07-10-2015

IMPORTANT POINTS
Mere inclusion of a party in a proceeding does not men its participation.
A party indulging in fraud, malpractice and malfeasance cannot demand natural justice in action by the opposite party.
Beneficiary breaching terms of conveyance enables State to resume the acquired land.
Purchasers of acquired land from the company without appreciating that such sale/purchase was contrary to purpose of acquisition can be presumed to have purposefully transgressed the law. They have no right to be heard in the matter of resumption by the State.

Headnote:(a) Land Acquisition Act, 1894 – Section 41 and 44A r/w Rule 5(2), Land Acquisition (Companies) Rules, 1963 and clause 2(iv) and clause 4(i), Deed of Conveyance – Respondent company precluded from alienating the land without prior written permission of appellant State – Respondent selling the land without such permission – Clause and 2(iv) and 4(i) empowering State to resume the land in the event of breach of conditions by respondent company – Respondent company trying to defend its conduct by asserting that State impliedly consented to the sales being a party to execution proceedings – Appellant State neither notified of the Execution proceedings nor was represented and heard by the Executing Court – Mere inclusion of a party in a proceeding does not men its participation. (Para 7, 8)

       (b) Land Acquisition Act, 1894 – Section 41 and 44A r/w Rule 5(2), Land Acquisition (Companies) Rules, 1963 and clause 2(iv) and clause 4(i), Deed of Conveyance – Respondent company contending that it applied to the executing court for sale of subject land after being saddled with enhanced compensation – It did not apprise the executing court that primary burden of satisfying compensation was that of State – Secondly, enhanced compensation amounting to 8.8 lacs against planned outlay of 4 crores – Respondent also neither asked by executing court nor proffered details of its other properties – Respondent company should have gone for arbitration instead of private sale – Further, respondent was precluded from alienating the subject land but it could raise loan from financial institutions/Banks. (Para 9, 10, 11)

       (c) Land Acquisition Act, 1894 – Section 41 and 44A r/w Rule 5(2), Land Acquisition (Companies) Rules, 1963 and clause 2(iv) and clause 4(i), Deed of Conveyance – Conduct of respondent company – Smacking of fraud, malpractice and malfeasance – Plotting the subject land in small plots and executing 118 sale deeds in favour of third parties – After paying cost of the land to Appellant State and enhanced compensation to original landowners respondent company treating itself as absolute owner of the land – Respondent company challenging the resumption notice by State on ground of natural justice – Respondent company forfeiting all rights including right to be heard by its conduct – Resumption of subject land not unjustified. (Para 19, 21)

       (1994) 3 SCC 552; (2009) 13 SCC 600; (2013) 8 SCC 20; (1977) 2 SCC 256 – Referred

       (d) Land Acquisition Act, 1894 – Section 41 and 44A r/w Rule 5(2), Land Acquisition (Companies) Rules, 1963 and clause 2(iv) and clause 4(i), Deed of Conveyance – Resumption of subject land – Possession delivered to Respondent on 20.06.1974 – Factory required to be constructed within two years – Nothing has been done till date – Not making a single representation before the State even for extension of time – Appellant State rightly resuming the subject land. (Para 13, 14)

       (e) Property law – Purchase of subject land under acquisition – Purchasers from respondent company not exercising due diligence – Not appreciating that such sale/purchase was contrary to purpose of acquisition – They can be presumed to have purposefully transgressed the law – Impleadment in the case denied. (Para 20)

       Facts of the case:

       Acquisition proceedings were initiated for the Respondent and Notification and a Declaration under Sections 4 and 6 respectively of the Land Acquisition Act, 1894 were issued in 1973. The Award came to be passed in the following year 1974 which computed the compensation for the landowners at 3,93,688.12. Immediately after the passing of the Award on 16.10.1974, the Appellant State executed a Deed of Conveyance in favour of the Respondent.

       The landowners approached the Additional District Judge in Reference proceeding under Section 18 of the Act, who enhanced the compensation by 59,349/-. The compensation was thereafter further enhanced to 8.10 lakh by the High Court which attained finality.

       In the interregnum some of the landowners filed Execution proceedings against the Respondent and the Appellant State for recovery of the enhanced compensation awarded to them

       The Additional District Judge proceeded to attach the acquired land and then directed its sale by way of auction.

       The application of the Respondent for private sale seems to have received the imprimatur of the District Judge and thence several portions of the subject land had been sold by the Respondent. Knowledge of these execution proceedings has been denied by the Appellant State which asserts that it came to know about them only in 1991, when some of the original landowners successfully challenged the acquisition proceedings on the ground of non-utilization of the subject land in. The High Court quashed the acquisition proceedings in its entirety vide Judgment dated 5.3.1992 and directed that the land be returned to the original landowners.

       These Orders were overturned by Supreme Court.

       The Appellant State thereupon initiated resumption proceedings.

       Notice of Resumption issued by the Appellant State to the Respondent was challenged by the Respondent before the High Court.

       This Notice has been annulled by the High Court since the Respondent and the subsequent purchasers had not been given an opportunity of hearing.

       Finding of the Court:

       Impugned judgment cannot be sustained.

       Result: Appeal allowed with cost.