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Structured Summary of the Opinion

Factual and Procedural Background

The lands of the six petitioners were acquired under the Kerala Land Acquisition Act, 1961 ("the Act"). The petitioners were served with notice of the award under section 12(2). They filed applications (Exts. P1 to P4) on different dates under Section 20 disputing the adequacy of compensation and requesting that the matter be referred to the competent Civil Court. Subsequent to filing these applications, the petitioners withdrew (received) the compensation from the Land Acquisition Officer. The petitioners did not formally state when they withdrew the amount that they were receiving it "under protest."

The 1st respondent rejected the reference applications by order Ext. P5 dated 7-3-1980. The petitioners filed this writ petition seeking quashing of Ext. P5 and a direction to the 1st respondent to refer the matter under Section 20 (and related provisions) to the Civil Court. The rejection of reference was presumably grounded on the view that the petitioners had accepted compensation without recording any protest despite previously filing applications seeking reference.

Legal Issues Presented

  1. What is the precise nature of the right to claim enhanced compensation under the Act, and to what extent is that right destroyed by the second proviso to Section 31(2) of the Act?
  2. Under what circumstances will the receipt of compensation disentitle an aggrieved party from seeking a reference under Section 20 (or equivalent provisions), i.e., when must a 'protest' be shown and in what form?
  3. Whether prior applications under Section 20 (filed before receipt of compensation) or other expressions of objection suffice as a 'protest' under the second proviso to Section 31(2), even if the receipt itself does not bear the words "under protest."

Arguments of the Parties

Petitioners' Arguments

  • The earlier applications for reference (Exts. P1 to P4) under Section 20 are sufficient to protect the petitioners from the operation of the second proviso to Section 31(2) of the Act.
  • Because the second proviso to Section 31(2) does not indicate the manner in which a protest must be stated, the prior written applications for reference should be deemed to constitute the required protest.
  • In their applications (Exts. P1–P4) the petitioners specifically stated that any acceptance of compensation would be "without prejudice" to their claim for enhanced compensation, which should be treated as a protest.

Government Pleader's Arguments

  • Unless the protest is shown at the time compensation is received, the petitioners cannot claim protection under the second proviso to Section 31(2).
  • Relied on the decision in State of Kerala v. Mariamma Raichal (1968 KLT. 637) which, it was submitted, held that receipt of compensation without protest incapacitates a party from moving under Section 18 (an analogous provision) of the Act.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court in this Opinion
State of Kerala v. Mariamma Raichal (1968 KLT. 637) Held that receipt of compensation without protest incapacitated a party to move under Section 18 (i.e., acceptance without protest defeats subsequent reference). The Government Pleader relied on this decision. The court observed that the Mariamma Raichal decision dealt with different facts and its principle could not be treated as of general application to the present facts.
Krishna Rao v. L.A. Officer and R.D. Officer (AIR 1960 Mysore 264) The application for payment (cheque) preceded the application for reference; that application expressed acceptance of the award without protest and thus disqualified the party from moving for reference (S.18 in that context). The court distinguished that case: it fell squarely within the vice of the second proviso because the cheque application preceded the reference application and manifested acceptance without protest. The court treated it as distinguishable from the present facts.
Md. Golam Ali v. L.A. Collector (AIR 1969 Calcutta 221) The Calcutta High Court held that the receipt for payment must be read in relation to the prior application (for payment) stating that payment would be received "under protest"; the receipt should be linked to that application and treated as receipt under protest even if the receipt itself lacks the endorsement. The opinion cites this decision as supporting the view that a receipt not bearing words "under protest" can nevertheless be treated as receipt under protest if linked to an earlier application that made the protest clear.
Tara Chand v. L.A. Collector (AIR 1971 Delhi 116) Where the application for reference was already made before payment, the subsequent acceptance of compensation could not be held to operate as a waiver or abandonment of the statutory right; acceptance without protest would not necessarily destroy a valid prior application for reference. The court relied on this decision for the broader principle that a valid application for reference made before receipt of compensation cannot be nullified by subsequent acceptance; the court described the Delhi decision as adopting a liberal view of the second proviso.
Shanta Bai v. Dy. Collector, L.A. (AIR 1971 A.P. 117) Where a petitioner had earlier filed a petition for reference and then later withdrew compensation, the earlier petition constituted a clear indication of protest and later acceptance did not disentitle her from reference; requirements of proviso were substantially complied with. The court relied on this case as authority that a prior application for reference is a clear indication of protest and that subsequent receipt of compensation does not necessarily disentitle a claimant when the reference application predated the receipt.

Court's Reasoning and Analysis

The court began by setting out the statutory framework: the award is final save as provided in the Act; Section 20(1) gives a right to an aggrieved person who has not accepted the award to apply in writing for a reference to the Civil Court (time-limited); Section 21 requires the Collector to make the referral; Section 31 requires the Collector to tender payment and contains three provisos, the second of which disqualifies persons who "have received the amount otherwise than under protest" from making any application under Section 20.

The court focused principally on the second proviso to Section 31(2). It held that:

  • The second proviso does not prescribe the form or manner in which a protest must be indicated; there are many methods by which protest could be indicated.
  • A rigid, hyper-technical approach to the proviso is undesirable because the Act deals with compulsory deprivation of property and claimants may not be versed in procedural niceties; courts should adopt a liberal approach to secure adequate and reasonable compensation.
  • Authorities tendering payment should alert claimants to their rights so that even when amounts are received claimants can make necessary endorsements (e.g., endorse "under protest" on receipts) to avoid future technical objections.
  • It is only when the authority is satisfied that the claimant accepted compensation without any protest, or has waived or abandoned the right of reference, that the request for enhancement could be rejected.
  • If before acceptance of the amount the claimant had in any manner expressed objection to the award (for example, by filing a Section 20 application), such objection should be deemed a protest under the law. To insist upon the literal words "under protest" on the face of the receipt when an objection was otherwise clearly made is inconsistent with justice and fair play.
  • When a person files an application under Section 20 (which must be in writing) that is the clearest indication of non-acceptance of the award; if the amount is later received after such application, it is received "under protest." There is no necessity to repeat the words "under protest" in every subsequent document (such as the cheque application or the receipt).
  • The burden lies on the officer to establish satisfactorily that any earlier objection was withdrawn by the claimant if the officer seeks to sustain rejection of the reference on that basis.

The court considered the cited authorities. It distinguished Krishna Rao (AIR 1960 Mysore 264) where the cheque application preceded the reference application and contained statements expressing acceptance — a case squarely within the second proviso's vice. The court treated State of Kerala v. Mariamma Raichal as factually different and not of general application. Decisions in Calcutta, Delhi and Andhra Pradesh were treated as supporting a liberal reading of the proviso: where an applicant had made a clear written application for reference (or had stated receipt would be under protest), the subsequent mere receipt of the cheque without a formal endorsement on the receipt did not necessarily destroy the right to reference.

Applying these principles to the present facts, the court found that Exts. P1–P4 were applications under Section 20 which explicitly detailed objections to the award and included clear language that any acceptance of compensation would be "without prejudice" to the claim for enhanced compensation. The court concluded that these prior applications and statements were a sufficient protest under Section 31(2)'s second proviso, and that Ext. P5 (the rejection) was improper.

Holding and Implications

Holding: The court held Ext. P5 to be bad in law, quashed Ext. P5, and directed the respondents to make a reference on Exts. P1 to P4 applications to the appropriate Civil Court. The petition was allowed and no costs were awarded.

Implications:

  • Direct effect: The respondents are ordered to refer the petitioners' Exts. P1–P4 applications to the appropriate Civil Court for determination, i.e., the petitioners may pursue their claim for enhanced compensation notwithstanding that they subsequently received the awarded amount, because they had earlier made written objections and applications which constituted protest.
  • Procedural guidance: The opinion articulates a principle that a prior written application objecting to an award (for example, under Section 20) will normally be treated as a sufficient protest under the second proviso to Section 31(2), and that literal endorsement "under protest" on the receipt is not invariably necessary. Authorities tendering payment should, however, alert claimants to their rights and allow clear endorsements to avoid disputes.
  • Burden on authorities: If an authority rejects a reference on the basis that the claimant accepted payment without protest, the authority must satisfactorily establish that the claimant withdrew or abandoned earlier objections.

No costs were awarded.

    Annamma Chacko v. Land Acquisition Officer

    1. The lands belonging to the six petitioners herein were acquired under the provisions of the Kerala Land Acquisition Act, 1961, for short, the Act. They were served with notice of the award, under S. 12(2). Thereafter they filed Exts. P1 to P4 applications, on different dates, disputing the adequacy of the compensation awarded, and requesting the 1st respondent to refer the matter to the competent court. Subsequent to these applications, the petitioners withdrew the amount of compensation from the Land Acquisition Officer. The petitioners did not formally state when they withdrew the amount that they were receiving the compensation under protest. The first respondent rejected the applications for reference as per Ext. P5 order dated 7-3-1980. In this writ petition, the petitioners seek to quash Ext. P5 and pray for an appropriate direction to the 1st respondent to refer the matter under S. 20 of the Act. Applications for reference were presumably rejected on the ground that the petitioners accepted the compensation from the Land Acquisition Officer without recording any protest about its adequacy, despite the fact that the petitioners had earlier filed applications under S. 20 of the Act, seeking reference of this question to the appropriate Civil Court. The petitioners' counsel submits that the earlier applications for reference are sufficient to protect them from the vice of the second proviso to S. 31(2) of the Act and that since the said proviso does not indicate the manner in which the protest has to be stated, the applications for reference should in law be deemed to be a protest under the second proviso to S. 31(2) of the Act Government Pleader on the other hand submits that unless protest is shown when compensation is received, the petitioners cannot get the protection from the said proviso. He rested largely on the decision reported in State of Kerala v. Mariamma Raichal (1968 KLT. 637) rendered by Maahavan Nair, J. which held that the receipt of compensation without protest incapacitated a party to move under S. 18 of the Act. That decision deals with a set of facts different from the one that I have before me, and hence the principle enunciated there cannot be said to be of general application. If it were so, I would have been persuaded to refer the question to a Division Bench.

    2. The Act clothes the authorities with powers which an ordinary citizen does not have The properties belonging to the citizens are compulsorily acquired by resort to provisions of the Act. Citizens do not have any remedy against such deprivation except on limited grounds. Therefore those who are deprived of property should be compensated adequately. They should be permitted to make liberal use of the relevant provisions of the Act to secure reasonable compensation. A rigid approach to the provisions of the Act is neither helpful nor desirable. Adequate and reasonable compensation, to which such persons are entitled, should not be denied to them on hyper-technical pleas.

    3. The award made by the officer concerned is final except as is provided in the Act. S. 20(1) gives the right to aggrieved person who has not accepted the award to make an application in writing requiring the matter in dispute to be referred for determination of the Court. This has to be done within six weeks of the receipt of notice of the making of the award by the Collector or within six months from the date of Collector's Award, whichever period shall first expire, except in cases where the person objecting was present or was represented before the Collector at the time when he made his award. Under S. 21, the Collector is required to make a reference to the Civil Court stating in writing the necessary points on which a decision of the Civil Court is invited. Under S. 31, the Collector shall tender payment of compensation awarded by him to the persons interested in the land. If such persons do not consent to receive the same or if there is any dispute as to title to receive compensation, the Collector shall deposit the amount in Court. S. 31(2) contains three provisos. I shall read the three provisos:

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

    Provided further that no person who has received the amount otherwise than under protest shall be entitled to make any application under section 20:

    Provided also that nothing herein contained shall affect the liability of any person who may receive the whole or any part of any compensation awarded under this Act, to pay the same to the person lawfully entitled thereto”.

    4. In this case, we are concerned principally with the second proviso. The question that arises in this petition is the precise nature of the right to claim enhanced compensation and to what extent this right is destroyed by the second proviso. In other words, under what circumstances will the receipt of the amount awarded disentitle the aggrieved party from seeking a reference under S. 20. It has to be first borne in mind that the second proviso does not lay down the manner in which the protest has to be indicated. There are many methods by which the protest contemplated under the second proviso could be indicated. Courts and other authorities exercising powers under the Act should be careful to see that the right for reference is not denied to an aggrieved party unless the facts of the particular case lead to the only conclusion that the receipt of compensation was without any protest Invariably properties are taken from persons who are not well-versed with their rights, nor with the procedure to claim enhancement of compensation. In my view, it is necessary for the authorities concerned while tendering the payment of compensation awarded to persons interested, to alert them about their rights so that even when amounts are received such persons could make the necessary endorsements that the amounts are received under protest on the back of the receipt itself to avoid future technical plea based on the second proviso to section 31(2). It is only when the authority is satisfied that the claimant has accepted the amount without any protest or where he is satisfied that the claimant has waived the right of reference or abandoned the claim for enhanced compensation that a request for enhancement could be rejected. If before acceptance of the amount of compensation, the claimant had in any manner expressed his objection to the award, such objection should be deemed to be a protest under the law. To insist upon written words ‘under protest’ on the receipt itself when payment is made, when the party had objected to the award earlier is not in consonance with justice or fair play. When a person files an application under S. 20, that is the clearest indication that he has not accepted the award. An application under S. 20 has to be in writing. If amount of compensation awarded is received subsequent to the application under S. 20, it goes without saying that the amount is received under protest. It is not necessary for a person to write the words ‘under protest’ every time he files an application. If such an application is made, it is not necessary to make a statement in the cheque application that it is made under protest. Nor is it necessary thereafter to put down the words ‘under protest’ in the receipt when the cheque is received. To insist to do so will be to take an extreme view of the matter. When before an application for cheque is made a party had unequivocally stated that the award is not accepted, it is for the officer concerned to establish satisfactorily that such objection to the award was subsequently withdrawn by the party, to sustain the order for rejection of reference.

    5. Now I shall consider the authorities cited before me. In 1968 KLT. 637 (supra), the facts are these: The award was on 18th August, 1960. On 19th September, 1960 application was made for payment of compensation awarded. The Land Acquisition Officer gave the claimant a cheque for the amount on September 24, 1960. The claimant filed an application on the same day for reference to the District Court for enhancement of compensation. It was complied with. An objection was taken as to the maintainability of the reference subsequently. The Additional District Judge, Quilon, overruled the objection and the compensation was enhanced. In appeal the State contended that the claimant's application for cheque for the compensation awarded was an unconditional acceptance of the award since there was no protest as to its adequacy and that the acceptance of the cheque without protest rendered the subsequent motion for reference bad in law. This contention found acceptance at the hands of this Court. The learned Judge was persuaded to accept this case for the reason that at the time the application for reference was made, cheque had been received without any protest by the claimant. Even so, he found a distinction in the decision reported in Krishna Rao v. L.A Officer and R.D Officer (AIR 1960 Mysore 264). There, the application for reference was made after the claimant received the cheque sent to him by the Land Acquisition Officer without any request by him The learned Judge felt that there was a distinction between receipt of the cheque without any volition on the part of the claimant and its receipt after an application, and observed that in that case (Mysore case) the first act that proceeded from his volition was the application for reference for enhanced compensation. The learned Judge held thus:

    “This application expresses an acceptance of the award by the respondent, as it refets to the award and claims the amount under the award, without any expression of protest or challenge to its rectitude. As I read the application to express an acceptance of the award I have to find the respondent disqualified for moving an application for reference under S. 18; and on that sole ground the reference has to be held incompetent”.

    6. The above observation clearly sets out the background in which that decision was rendered. There, the cheque application preceded the application for reference and the cheque application clearly contained statements accepting the award without any challenge to the adequacy of compensation. That case squarely falls within the vice of the 2nd proviso to S. 31(2). Not so in this case.

    7. Exts. P1 to P4 are the applications under S. 20. In all these applications the petitioners clearly state after detailing their objections to the compensation as follows:

    8. Protest cannot be made more clear. In Exts. P1 to P4 they have detailed their objections to the award. In the above quoted paragraph they have unquivocally stated that they will accept compensation, without prejudice to their claim for enhanced compensation. This statement clearly takes them out of the second proviso. When they made the cheque application, they did not say that they would receive the amount under protest, but they had already stated that the acceptance of the amount by them would be without prejudice to their right to claim enhanced compensation. Due weight should be given to this. Refusal to refer under these circumstances was improper.

    9. The same question was considered in the decisions reported in Md. Golam Ali v. L.A Collector (AIR. 1969 Calcutta 221), Tara Chand v. L.A Collector (AIR. 1971 Delhi 116) and in Shanta Bai v. Dy. Collector. L.A (AIR. 1971 A.P 117). In 1969 Calcutta 221, the Calcutta High Court was considering the case of an application for reference. There the claimants had made an application for cheque, specifically stating that they would receive the same under protest. In the receipt for cheque, these was no endorsement that the amount was being received under protest. It was on this ground that the Collector refused to make a reference. The Division Bench of the Calcutta High Court held that receipt must be related to the application and must be held to be linked with the same and therefore receipt must be held to be one made under protest. The contention that the receipt should bear on its face an endorsement to the effect that the amount was received under protest was repelled.

    10. In AIR. 1971 Delhi 116, the facts areas follows: The award was made on 13-6-1969. The petitioner made an application on 10-7-1969 for compensation On 22-7-1969 he made another application under S. 18 of the Act for making a reference. In the cheque application occurs the following sentence:

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

    11. On 24-7-1969 compensation was paid to the petitioner, who signed a receipt for having received the same in the prescribed form. It was under these circumstances that the question came up for considration before the Delhi High Court. The contention that the acceptance of compensation without protest would disentitle the claimant to seek a reference was repelled. The learned Judge observed as follows:—

    “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 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”.

    12. The facts of the case are slightly different from the case on hand. There the application for cheque contained a statement that the receipt of the amount would be under protest. The application for reference followed. When the amount of compensation was received by the claimant, the application for reference was pending The learned Judge held that the acceptance of the amount could not amount either to a waiver or abandonment of a statutory right Though on facts, the case could be distinguished, the principle enunciated there is to take a liberal view of the embargo contained in the second proviso to section 31(2)

    13. In AIR. 1971 A.P 117 the petitioner objected to adequacy of compensation and sought reference of her claim to civil Court under S. 18 of the Act and 11 days later withdrew the compensation. The court held that the mere fact that the petitioner had earlier filed a petition for reference was a clear indication of her protest. The acceptance of the amount of compensation after such an application would not disentitle her from getting the relief of reference under S. 18. It was held in that case that the requirements of the proviso to sub-section (2) of S. 31 of the Act were substantially complied with.

    14. To sum up, the principle, according to me, is this: If before acceptance of the amount the claimants had in any manner indicated that they do no accept the award and a reference application had been made, acceptance of the amount thereafter will not disentitle them from getting a reference from the Collector. The mere fact that the receipt does not contain an endorsement that the amount was being received under protest will not deny to the claimant the statutory right to get a reference, when at the time of such receipt applications for reference were pending. From the applications, it is clear that the petitioners did not accept the award. All the applications contained a paragraph that the acceptance of the amount by them would be without prejudice to their rights to object to the award. This, according to me, is sufficient. The absence of such a statement in the cheque application will not disentitle them to get a reference under S. 18. In the result, I hold that Ext. P5 is bad in law. I quash Ext. P5 and direct respondents to make a reference on Exts. P1 to P4 applications to the appropriate Civil Court. No costs.

    15. Allowed.

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    Annamma Chacko v. Land Acquisition Officer
    (Sep 30, 1980)