Acquisition of land for a company under the Land Acquisition Act, 1894 - Interpretation of provisions - Legality of acquisition proceedings - Res judicata.

R.L.Narasimham, J.

1. This is an application under Articles 226 and 227 of the Constitution to quash the entire land acquisition proceeding. No. 23 of 1959-60 of Champaran Collectorate, the award given on the 24th, July, 1962, and the delivery of possession made in favour of respondent No. 2, and for other consequential reliefs.

2. The disputed plots are plots Nos. 449 and 447 of khata no. 29, tauji no. 951, of village Narapur, Police station Begaha. in the district of Champaran.

3. The recorded tenants of the two plots were some Ahirs who had usufructuarily mortgaged them with one Bindbasini Sao who assigned the mortgage in favour of Ganga Devi Sugar Mills, The said Mills sold the mill along with the lands to respondent No. 2, the North Bihar Sugar Mills, sometime in 1950. Thus respondent No. 2 is the successor-in-interest of the original usufructuary mortgagee. The petitioners purchased the equity of redemption from the mortgagors sometime in 1936. and thus became the mortgagors of the property. In Title suit no. 186 of 1947 brought by the petitioners in the Court of the Munsif of Bettiah, a decree was obtained and the Court directed delivery of possession of the disputed lands to the petitioners. An appeal against the Munsifs Judgment was dismissed by the Additional Subordinate Judge of Motihari. Thereupon respondent No. 2 filed a second appeal, No. 669 of 1958. in the High Court. and that appeal was disposed of on the 20th February, 1962, (Annexure E), by Ah-mad, J., who, while affirming the judgments of the lower courts, gave further extension of time for a period of three months for giving up delivery of possession of plot no. 449 to the plaintiff. Though both the plots mentioned above were in dispute, the real controversy was as regards plot no. 449, on which alone some of the machinery of the sugar mill, such as chimney, spray pond, etc., had been installed. So far as plot no. 447 is concerned, it was urged by respondent No. 2 that it was in the possession of the petitioners until it was duly delivered to respondent No. 2 on the 27th. August, 1962. This fact is not admitted by the petitioners. It is unnecessary to discuss this point at length as nothing turns on it. This plot is said to be a mere sugarcane field with no structures or machineries standing on the same.

4. Apprehending that if the decree for delivery of possession be allowed to stand, respondent No. 2 may be put to very heavy financial loss due to the dismantling of the machinery and closure of the sugar mill, the latter applied to the Collector of Champaran for acquiring both the plots for the mill, which was a "company" as defined in Clause (e) of Sec.3 of the Land Acquisition Act. The application was actually made on the 7th, June, 1955, during the pendency of the aforesaid mortgage litigation. Objections of the parties were heard and eventually the Land Acquisition Officer by his award dated the 24th July, 1962, completed the acquisition proceeding and directed payment of compensation to various parties interested in the plots, namely, (1) the State of Bihar, (2) the petitioners, and (3) respondent No. 2. The compensation payable to respondent No. 2 was estimated at Rs. 2,55,664/ 73 (see Annexure D1). This large amount of compensation to respondent No. 2 was due mainly to the cost of the machineries and other structures standing on the land. It is admitted by the petitioners in paragraph 31 of their petition that this sum was actually paid to respondent No. 2 on the 31st. July 1962. Apart from paying the said compensation amount, the Collector took steps to deliver possession of the lands also to the respondents on the 27th August, 1962, as admitted in paragraph 32 of the petition. To some extent the payment of compensation and delivery of possession to respondent No. 2 was nominal inasmuch as the entire acquisition proceedings were initiated at the instance of respondent No. 2 for the Companys benefit and the entire cost of the acquisition wa