Referencing Officer can be made liable for the costs.

The question involved in this Second Appeal is a simple but interesting one whether, when the officer acquiring property under the Land Acquisition Act (Collector) refers a dispute to the decision of the civil Court under section 30 of the Act, firstly, he should be shown as a party respondent in the records of the civil Court, and, secondly, whether, in any event, costs could be awarded against him. Actually in the matter before me, there appears to have been ample justification for the officer to make a reference under section 30, though admittedly there was only one claimant in the case (B.V. Subramania Iyer). The Officer seems to have made the reference because he thought that the title of the claimant was not clearly established by the documentary evidence before him, and that he could not decide upon that evidence, whether the claimant was the true and only person entitled to the compensation amount. The justification I am referring to is that, when the matter came up before the learned Principal Subordinate Judge, he actually held that the evidence in favour of the title of the claimant was not satisfactory, and ordered “the compensation amount will therefore lie in Court deposit.”

The matter went up in appeal to the learned Additional District Judge of Salem and it is he who has held, after a lengthy analysis of the documentary evidence that the benamidars in whose names some of the plots were purchased were not true owners of these properties, and that the claimant (Appellant) was the real owner entitled to compensation amount with the usual solatium. Throughout the Referring Officer (Collector) was shown as a party respondent in the record. The learned Subordinate Judge awarded costs against the Referring Officer, and that is the reason why this Second Appeal has been preferred.

I think it is very clear that the judgment of the appellate Court in this respect cannot be sustained. It is no doubt true that costs are awarded in the exercise of the discretion vested in the Court. But that discretion has to be exercised in a judicial manner, and not in violation of any fundamental judicial concept. In Sanjiva Row’s Land Acquisition and Compensation, Fourth Edition (by Singhal) the learned author observes at page 527 that in the context of a reference under section 30

“ the Government is neither interested, nor is it a proper party to an apportionment proceeding, but only the contesting defendants are.”

Again at page 529 of the same edition, the learned author refers to costs in the proceedings, and points out that in England the usual practice is that the acquiring body is not liable for costs incurred by parties with regard to establishing their title, and that in India also the rule is the same.

The learned counsel for the respondent (claimant) urges that the reference itself was incompetent, because there was really no ‘dispute’ within the meaning of section 30; the claimant alone made the actual claim, and not the other benamidars. I do not think that this view is at all sustainable. The word ‘dispute’ is used in the context of that section in a wide and not a literal sense, and implies any controversy as to title, whether as between the actual claimants, or as appearing from the documents made available by the Government. It is obvious that, when the Government exercises its powers of eminent domain and acquires property, public funds have to be utilised for the payment of compensation to the true owner, and not merely to any claimant who cares to appear on the scene. The Government have a special responsibility in this regard, and cannot later take refuge behind the pretext that the compensation was paid to the claimant who actually appeared, while others did not appear. So long as that is the situation, the Acquiring Officer has a right to make such a reference, even if a dispute or controversy as to title arises on the documents before him. He cannot be made liable for costs, and it is the party who has to b