(Per B. Sudershan Reddy, J)

The common question of law that arises for consideration in these matters is:

'Whether the claimants are entitled to payment of compensation under the provisions of the Land Acquisition Act, 1894 (for short 'the Act') when the assigned lands are resumed by the Government for a public purpose?'

A Full Bench of this Court in State of A.P. v. P. Peda Chunnayya 1997 (1) ALT 498 (F.B.) held:

'Where the Government resorts to the provisions of the Act for acquisition of the patta lands without resorting to the terms of the grant for resumption, it is liable to pay compensation under the Act, but such compensation will be only the market value of the interest of the owner or the assignee of the land, subject to the clog. In such cases of acquisition, the claimant would also be entitled to consequential reliefs, such as those of solatium and interest etc., under the Act. In a case where the patta lands are resumed by the Government, the assignees cannot claim compensation under the Act, but can claim compensation equal to the market value of their interest in the land, subject to the clog. In such cases, no solatium may be payable but interest may be claimed on the amount of compensation from the date of dispossession and till the date of payment of compensation. In a case where the assignees are dispossessed from their patta lands without resuming the lands in terms of the grant and/or initiation of proceedings under the Act, the Government may be directed to initiate proceedings under the Act and to pay compensation under the Act as indicated.'

The same issue once again came up for consideration before another Full Bench of this Court on a reference made by a Division Bench and the Full Bench in its turn considered it appropriate to refer the matter to a Larger Bench by order dated 20-9-2001, the relevant portion of which reads thus:

'Furthermore, we are prima facie of the opinion that part of the law laid down by the judgment of the Full Bench that the plaintiffs would be entitled to the market value together with interest may not be correct, particularly, in view of that fact that the right of assignees of the Government land is subordinate to the State. The lands assigned under such patta are resumable. In that view of the matter, they may not be treated to be owners of the lands so as to claim entire compensation calculated at the market value for acquisition thereof under the Land Acquisition Act.'

That is how the matter once again came up for consideration before a Larger Bench in State of A.P. v. Bondapalli Sanyasi 2002 (1) ALT 543 (L.B.), wherein it is held:

'. The Full Bench committed error insofar as it held that where patta lands are resumed by the Government, the assignee would be entitled to compensation which would be equal to the market value of their interest in the land subject to the clog. Quantum of damages has to be ascertained having regard to the fact situation of each case. The right of the State to resume land is conditional only to the extent referred to in D-Form patta. Once such conditions are fulfilled, which have been done in the instant case, no grant of compensation would be payable towards resumption of land. Compensation may, however, be payable if lands have not been resumed by following due process of law. The act of the State in such cases would be tortuous in nature. The views of the Larger Bench are summarized in the following manner:

'Where the assigned land is taken possession of by the State in accordance with the terms of the grant or patta the right of the assignee to any compensation will have to be determined in accordance with the conditions in patta itself and where the State does not resort to the covenant of the grant and resorts to the Land Acquisition Act the assignee shall be entitled to compensation in terms of the Land Acquisition Act not as an owner but as an interested person for the interest he held in the property.' Dr. Motilal B. Naik, J.