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Case Number

C.M (M) No. 35 of 1970

Attorney(S)

Mr. Daljit Singh
Mr. S.S. Chadha

Judges

V.S Deshpande, J.

Acts

SECTION 18 LAND ACQUISITION ACT
Section 18(1).

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Smart Summary

Judgment Summary — Interpretation of Section 18 and Section 31 of the Land Acquisition Act

Factual and Procedural Background

The Government acquired the petitioner's land and the Land Acquisition Collector made an award on 13-6-1969 under Section 11 of the Act. The petitioner claimed substantially higher compensation (Rs. 1,56,650 plus solatium) while the award offered Rs. 30,951.33 P.

The petitioner submitted a written request on 10-7-1969 asking that the awarded compensation be paid to him and expressly stated: "I am accepting the payment under protest subject to my right for enhancement of compensation." On 22-7-1969 the petitioner applied under Section 18 to have the matter referred to the District Court for determination of his objections. The Collector paid the compensation on 24-7-1969; the prescribed Form CC receipt signed by the petitioner did not bear the words "under protest."

On 25-7-1969 the petitioner sought permission to write "under protest" on the receipt. The Collector issued a show-cause notice on 23-12-1969 and subsequently, by order (Annexure A-7), rejected the petitioner's Section 18 application on the ground that the petitioner had accepted payment without protest (because the receipt itself did not contain the words "under protest"). The petitioner challenged the Collector's order by filing a petition under Article 227 of the Constitution. The court quashed the Collector's order, directed the Collector to make the reference under Section 19, and allowed the petition with costs.

Legal Issues Presented

What is the precise nature of the right to claim enhanced compensation under Section 18 of the Land Acquisition Act and how may that right be destroyed under Section 31 of the Act?
Whether a pre-existing, timely application under Section 18 can be nullified by a subsequent acceptance of compensation in circumstances where the recipient did not write "under protest" in the receipt but had otherwise indicated acceptance "under protest" before or at the time of payment.
Whether the first proviso to Section 31(2) must be construed to require that the words "under protest" be written in the receipt itself in every case to preserve the right to apply under Section 18.

Arguments of the Parties

Petitioner's Arguments

The petitioner had applied on 10-7-1969 requesting payment "under protest" and on 22-7-1969 had applied under Section 18 for a reference to the Civil Court; these communications showed he had not accepted the award and did not intend to waive his right to seek enhancement.
The application for payment and the application under Section 18 formed part of the same transaction; the protest was incorporated into that transaction even though the words "under protest" were not written on the receipt itself.
After signing the receipt, the petitioner immediately on 25-7-1969 sought permission to write "under protest" on it and explained circumstances in subsequent correspondence and affidavit; the Collector filed no counter-affidavit denying these facts.

Respondent's Arguments (as recorded)

The respondent's counsel (Shri S.S. Chadha) argued that the proviso's phrase "receive such payment under protest" requires that the protest be recorded in the receipt itself at the time the money is received, and that failure to write "under protest" in the receipt operated as acceptance otherwise than under protest and barred a Section 18 claim.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Associated Hotels of India Ltd. v. Sardar Ranjit Singh, AIR 1968 SC 933	Principle that implied waiver requires conduct clearly inconsistent with retention of a right; mere conduct capable of alternative explanations will not be treated as waiver.	The court relied on this decision to hold that the petitioner's conduct was consistent with retention of the statutory right to apply under Section 18 and not tantamount to implied waiver.
Mrs. S. Thomas v. Collector of Madras, AIR 1958 Mad 186	Where a claimant unconditionally accepts compensation without indicating non-acceptance and intention to seek reference, failure to protest at time of acceptance borders statutory bar under Section 31(2).	The court distinguished that case on its facts, noting the petitioner's conduct there showed unconditional acceptance; thus that decision did not apply to the present facts.
Suresh Chandra Roy v. Land Acquisition Collector, AIR 1964 Cal 283	Where a claimant initially applied but later accepted compensation without protest and the Collector filed an affidavit that payment was received without protest, the original application was insufficient to preserve right.	The court differentiated the present case: here the petitioner consistently asserted acceptance under protest and the Collector filed no counter-affidavit; thus Suresh Chandra Roy was materially different.
K. Krishna Rao v. Land Acquisition Officer, AIR 1960 Mys 264	Acceptance of a voucher (without actually receiving the amount) before making a Section 18 application does not bar the application — the bar must arise before the application is made.	The court cited this case as supportive of the proposition that the bar to make a Section 18 application must have arisen prior to the application; it reinforced the petitioner's position that his right was not destroyed before he applied.
Md. Golam Ali Mina v. Land Acquisition Collector, AIR 1969 Cal 221	Where the application for payment explicitly stated that compensation was being received "under protest," acceptance was treated as under protest even though the receipt did not use those words.	The court relied on this later Division Bench decision to show that absence of the words "under protest" on the receipt does not necessarily bar a Section 18 application if the surrounding communication establishes acceptance under protest.

Court's Reasoning and Analysis

The court began by setting out the statutory framework: awards under Section 11 become final save as provided in the Act (Section 12(1)); Section 18(1) permits persons who have not accepted the award to apply within six weeks for a reference to the Civil Court; Section 19 requires the Collector to make such a reference; Section 31(1)-(2) govern tender of payment and deposit where a person does not consent to receive compensation, and include two provisos — one allowing receipt "under protest" and the other barring persons who have received the amount otherwise than under protest from applying under Section 18.

The court distilled two propositions from those provisions: (1) an award is final unless an application under Section 18 is timely made by an interested person who has not accepted the award, and (2) a person who has not accepted the award may nonetheless receive payment under protest and remain entitled to make an application under Section 18.

Applying the law to the facts, the court noted the petitioner had made two written communications before payment (10-7-1969 and 22-7-1969) expressly indicating acceptance "under protest" and seeking reference under Section 18. These applications were pending when payment was made on 24-7-1969. The Collector's rejection hinged on the absence of the words "under protest" in the receipt itself.

The court rejected an inflexible construction that the proviso to Section 31(2) requires the literal insertion of the words "under protest" on the receipt in every case. Such a construction, the court observed, would be made "in a vacuum" and ignore the statutory context — particularly Section 18(1) and Section 12(1) — and the fact that a valid Section 18 application had already been made before payment. The court emphasized that the provisos specify the only way a petitioner may expressly waive the right and that the case at hand did not involve express waiver.

The court then addressed implied waiver. It explained that implied waiver requires conduct clearly inconsistent with retention of the right. The petitioner's written communications before payment, his immediate application to add "under protest" to the receipt on 25-7-1969, and his affidavit all evidenced a continuing intention to press the Section 18 application. Importantly, the Collector filed no counter-affidavit denying the petitioner's sworn facts. Given that, the court accepted the petitioner's version.

The court distinguished authorities relied upon by the respondent where the claimant's conduct indicated unconditional acceptance (Mrs. S. Thomas; Suresh Chandra Roy) and relied on authorities (K. Krishna Rao; Md. Golam Ali Mina) that support the view that absence of the literal phrase on the receipt does not automatically destroy a prior valid Section 18 application.

In sum, the court concluded the Collector erred in treating the absence of the words "under protest" in the receipt as dispositive and thereby destroying a valid, pre-existing statutory application; that conclusion was not founded on any provision of the Act and constituted an error of law apparent on the record.

Holding and Implications

Holding: The court found that the Collector's order (Annexure A-7) involved an error of law and accordingly quashed the impugned order. The Land Acquisition Collector was directed to act upon the petitioner's application dated 22-7-1969 under Section 18 and to make the reference to the competent Civil Court under Section 19 of the Act. The petition was allowed with costs.

Implications: The direct effect of the decision is that the petitioner's Section 18 application must be processed and referred by the Collector to the appropriate Civil Court for determination. The court's reasoning restricts an overly literal construction of the proviso to Section 31(2) that would render a prior valid Section 18 application nugatory solely because the phrase "under protest" was not written on the receipt; instead, surrounding communications and conduct are relevant to determine whether compensation was accepted under protest. The opinion does not purport to lay down a novel binding precedent beyond its interpretation and application to the facts of this case.

End of summary — based exclusively on the provided opinion text.

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Tara Chand v. The Land Acquisition Collector, (Delhi Shahdara), Delhi .

1. The precise nature of the right to claim enhanced compensation under Section 18 of the Land Acquisition Act (hereinafter called the “Act”) and what exactly destroys such a right under Section 31 of the Act has to be considered in this case.

2. The petitioner's land was duly acquired by the Government and an award offering compensation to the petitioner was made by the Land Acquisition Collector under Section 11 of the Act Under section 12(1) of the Act, such an award is final except as thereinafter provided in the Act, Under Section 18(1) any person who has not accepted the award may, by a written application to the Collector, require that the matter be referred by the Collector to the Civil Court for the determination by that Court of his objections as to the amount of the compensation etc within six weeks of the delivery of the award or of the receipt of the notice of the award by him as the case may be Under Section 19, the Collector shall make a reference to the Civil Court stating the objections raised by the applicant under Section 18. Pending such determination of the claim to enhanced compensation by the Civil Court, the Collector on making the award under S. 11 shall tender payment of the compensation awarded by him to the persons interested under Section 31(1) of the Act. Under Section 31(2) if such a person shall not consent to receive the compensation, the Collector shall deposit the same in the Court to which a reference under Section 18 is submitted. Then follow the two provisos to Section 31(2) which are as follows and which have also to be read along with Section 18(1) of the Act;

“Provided that any person admitted to be interested may receive such payment under protest as to the sufficiency of the amount:

Provided also that no person who has received the amount otherwise than under protest shall be entitled to make any application under S. 18;”

3. The effect of the above legal provisions may be stated as follows:—

(1) An award and the compensation offered by it are final unless an application within time for reference to the Civil Court is made by the interested person who does not accept the award including the compensation offered by it.

(2) A person who has not accepted the award may nevertheless receive the payment of compensation offered by the award under protest, shall be entitled to make any application under Section 18 of the Act.

4. Let us now apply the above law to the facts of the present case. The award was made on 13-6-1969. The claim of the petitioner for compensation under Sections 9 and 10, of the Act was for Rs. 1,56,650 00 in addition to the usual solatium of 15 per cent The amount offered as compensation by the award was only Rs. 30,951,33 P. The petitioner therefore made an application to the Collector on 10-7-1969 (Annexure A1) requesting that the compensation as award may please be paid to him early specifically stating as follows:

“I am accepting the payment under protest subject to my right for enhancement of compensation.”

5. On 22-7-1969, the petitioner made an application to the Collector under Section 18 of the Act for making a reference to the District Court for enhancement of compensation specifically stating as follows:

“………that reference as required by law for enhancement of the amount of compensation award by the said award be made to the District Judge, Delhi.”

6. On 24-7-1969 the compensation was paid to the petitioner who signed the receipt of having received the same in the prescribed Form CC, It immediately occurred to the petitioner that, though his previous applications dated 10-7-1969 and 22-7-1969 had already made it dear that he had not accepted the award and wanted the reference to be made to the Civil Court he had not written the words “under protest” in the receipt. Therefore, immediately on the day following, namely, on 25-7-1969 he made an application to the Collector for permission to write those words to remove any doubt The Collector however issued the petitioner a notice on 23-12-1969 to show cause why his application dated 22-7-1969 for reference to the Civil Court should not be rejected as he had accepted the payment of compensation without any protest. The petitioner again wrote to the Collector on 16-1-1970 as per Annexure A-6 that the circumstances under which the compensation was received by the petitioner were set out in his letter dated 25-7-1969, namely, the applications made by the petitioner on 10-7-1969 and 22-7-1969 already showed that the petitioner never intended to waive his right of reference to the Civil Court for enhancement of the compensation. By his order at Annexure A-7, the Collector however rejected the petitioner's application for reference to the Civil Court for enhancement of compensation mainly on the ground that the protest as contemplated by the second proviso to Section 31(2) of the Act had to be in the receipt itself and not in the application for payment of the compensation. Despite the petitioner's application dated 10-7-1969 therefore the petitioner was deemed to have accepted the compensation without protest as he did not write the words “under protest” in the receipt while accepting the compensation.

7. The abovementioned order is challenged as illegal by the petitioner by this petition filed under Article 227 of the Constitution. In my view the Impugned order is open to the grave objection that it fails to consider the real question at issue, Instead of considering whether the statutory right of the petitioned to apply under Section 18 could be said to have been barred or destroyed even after the application under Section 18 was made, it wrongly places a disproportionate emphasis on the question whether the protest by the petitioner was entered in the receipt itself or outside. It forgets that the acceptance of compensation without protest is only one of the ways in which his right to apply under Section 18 would be barred. It also fails to see that the statute does not say that the protest must be entered in the receipt itself. Lastly it ignores the application made by the petitioner on 10-7-1969 for payment of compensation without prejudice to his right to apply under Section 18. The payment was made in response to that application and the application and the payment must be considered to form the same transaction. In that transaction, the protest was incorporated along with the receipt of the compensation with the result that the payment could only be viewed as accepted under protest.

8. According to the legal position analysed at the outset of this judgment, the petitioner had a legal right to the enhancement of the compensation offered to him by the award, He could be deprived of this legal right only in accordance with the provisions of the Act and not otherwise. Firstly, he may have lost the right if he had failed to make the application under Section 18 within the prescribed period of limitation. Secondly, he may have lost his right if he had received the compensation under the award, otherwise than under protest. Had be done so then he would have been barred from making the application for reference itself.

9. In the present case however the application for reference for enhancement of compensation was already made by the petitioner on 22-7-1969. The making of the said application on that date had not been barred either by limitation or by acceptance of the compensation otherwise than under protest. What the Collector has virtually decided is that a valid application filed by the petitioner could be destroyed later by his acceptance of the compensation under the award. It is to be noted that this conclusion of the Collector is not based on any provision of the Act. It is for consideration therefore whether on any general principles of law, such as waiver or abandonment of a statutory right, the application already made by the petitioner could be dismissed by the Collector for a cause which has arisen after the making of the application though the application when made was valid.

10. A waiver may be express or implied. First as well as the second provisos to Section 31(2) specify the only manner in which the petitioner could expressly waive his right to make an application under Section 18. They do not apply to the present case inasmuch as the petitioner did not receive the compensation under the award before the making of the application under Section 18. The impugned order can therefore be supported, if at all, only on the ground of implied waiver. We must therefore carefully examine the conduct and the intention of both the petitioner and the Collector in the present case. On the side of the petitioner, the application dated 10-7-1969 as well as the application dated 22-7-1969 both expressly stated that the petitioner was accepting the payment of compensation under protest while at the same time wanting the case to be referred to the Civil Court for enhancement of compensation.

11. In view of these express statements in writing, there is absolutely no ground on which any intention to waive the statutory right could be attributed to the petitioner. On 10-7-1969 and 22-7-1969 therefore the petitioner was a person “who had not accepted the award” within the meaning of Section 18(1). Both these applications were pending before the Collector on 24-7-1969 when the petitioner accepted the compensation. On the side of the Collector, it can be pointed out that the petitioner did not write the words “under protest” in the receipt itself. Shri S.S Chadha, learned counsel for the respondent, argued that the words “under protest” must be written on the receipt itself if the petitioner wanted to claim the benefit of the first proviso to Section 31(2). He argued that the words “receive such payment under protest” necessarily meant that at the time of the receipt of the money itself the petitioner must protest. I agree that the conduct and the intention of the petitioner to accept the compensation under protest must be made clear at the time of the receipt of the money itself. It is also true that in most cases, the words “under protest” might be written on the receipt itself.

I am unable however to construe the first proviso to Section 31(2) to mean that in every case, the words “under protest” must be written in the receipt itself and that unless this is done, the compensation would be deemed to have been accepted unconditionally. Such a construction would be open to the charge that it is made in vacuum. It ignores the context in which the first proviso to Section 31(2) stands. It is preceded by Section 18(1) under which the petitioner was a person “who had not accepted the award”. It also ignores that the application for reference for enhancement of the compensation was already made by the petitioner under Sec. 18. It also ignores section 12(1) under which the award was to be final “except as hereinafter provided”. The words within inverted commas refer to all those provisions of the Act which prevent the award from becoming final and include the making of the application for reference under Section 18. There is no warrant for the extreme contention that the mere failure to write the words “under protest” in the receipt under the first proviso to Section 31(2) would be sufficient to destroy the pre-existing facts that the petitioner had not accepted the award and that the award had not become final against the petitioner because the petitioner had already made an application for reference under Section 18 of the Act.

12. In view of the applications made by the petitioner on 10-7-1969 and 22-7-1969, the continuing representation which the petitioner was making on 24-7-1969 at the time of the acceptance of the compensation was that he was accepting the compensation under protest and was at the same time pressing his application under Section 18. This continued state of his mind was further proved by his application dated 25-7-1969 explaining why the words “under protest” were not written on the receipt. He has stated these facts on affidavit. The Collector has not filed any counter-affidavit denying these facts. The Collector has not come forward with the case that in fact the petitioner had by his conduct shown any intention of waiving his statutory right. In the absence of any reply from the Collector the sworn case of the petitioner must be accepted.

13. In Associated Hotels of India Ltd. v. Sardar Ranjit Singh, AIR 1968 SC 933, the question was whether the landlord had consented to the subletting of the premises by the tenant. It was argued for the tenant that the term in the lease deed that the tenant was to use the premises for running a first class hotel implied a consent by the landlord to the subletting of the premises. This contention was negatived on the ground that a first class hotel could be run without subletting. Similarly the request by the landlord to the Land and Development Officer that the premises were to be used for a first class hotel in which counters of air-lines and showrooms of jewellery and curios were always provided, was not considered as an implied consent to subletting as the show-rooms could be provided without subletting. The decision of the Supreme Court shows that so long as the conduct of a person is not utterly inconsistent with the continuing possession of a statutory right by him it would not be taken to amount to an implied waiver. Before a person can be held to have lost his right by implied waiver, the conduct of such a person must be clearly inconsistent with the retention of such a right by him. The conduct of the petitioner in the present case is not only consistent with the possession of the right to make a reference under Section 18 but is utterly inconsistent with the theory of waiver of such a right by him.

14. Shri S.S Chadha, learned counsel for the respondent, relied upon the following decisions wMch are however clearly distinguishable. In Mrs. S. Thomas v. Collector of Madras, AIR 1958 Mad 186, the petitioner had unconditionally accepted the amount of compensation and subsequently applied for reference under Section 18. Her application deservedly failed inasmuch as on the date on which she accepted the compensation she had not indicated her non-acceptance of the award and the intention to apply for reference under Section 18. In that context her failure to enter a protest at the time of the acceptance of the compensation was directly covered by the provisos to Section 31(2) and operated as a bar to the making of an application under Section 18.

15. In Suresh Chandra Roy v. Land Acquisition Collector, AIR 1964 Cal 283 the petitioner had applied for reference under Section 18 on 18-7-1958. But he did not continue to show this intention when on 12-8-1958 he made an application for payment of compensation without reserving his right to make an application under Section 18 and without any protest. Again on 18-8-1958, the petitioner applied for payment of compensation. On 30-1-1959 his counsel received the compensation without protest. In view of this conduct, his old application on 18-7-1958 was not deemed to be sufficient to show an intention that the compensation was accepted by him under protest. Further, the Collector filed an affidavit specifically stating that the petitioner had received payment of compensation without protest. The petitioner did not deny this allegation which was therefore deemed to be admitted by nontraverse. In every material circumstance, this case is different from the present case.

16. In K. Krishna Rao v. Land Acquisition Officer, AIR 1960 Mys 264 the petitioner had accepted only the voucher but had not actually received the amount of compensation before he made an application for reference under Section 18. It was held that he was not barred from making an application under Section 18. This case actually supports the petitioner in the present case in emphasising that the bar to make the application under Section 18 must arise before the application is made under second proviso to Section 31(2) and therefore the petitioner in the present case also was not barred from making the application.

17. Insofar as the decision in Suresh Chandra's case referred to above is relied upon for the proposition that a protest must be made in the receipt for compensation itself, a later Division Bench decision of the same High Court negatives this proposition. In Md. Golam Ali Mina v. Land Acquisition Collector, AIR 1969 Cal 221 the application for payment of compensation itself stated that the compensation was being received under protest. The receipt on the back of the application however did not use the words “under protest”. In these circumstances, the acceptance of the compensation was held to have been “under protest” even though these words were not used in the receipt itself.

18. For the above reasons the impugned order at Annexure A-7 discloses an error of law patent on the face of the record. It is therefore quashed and the Land Acquisition Collector is directed to act upon the petitioner's application dated 22-7-1969 under Section 18 of the Act and to make the reference to the competent Civil Court under Section 19 of the Act. The petition is therefore allowed with costs in the above terms.

19. Petition allowed.

Tara Chand v. The Land Acquisition Collector, (Delhi Shahdara), Delhi .

Judgment Summary — Interpretation of Section 18 and Section 31 of the Land Acquisition Act

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioner's Arguments

Respondent's Arguments (as recorded)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Tara Chand v. The Land Acquisition Collector, (Delhi Shahdara), Delhi .

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