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Advocates
  • For appellant: A.A Kumbhakoni with A.M Kulkami
  • For respondent No. 1: C.M Korde, Senior Advocate with S.S Kulkami
  • For respondent Nos. 2 and 3: C.R Sonawane, A.G.P
Judges
  • A.M Khanwilkar
  • K.K Tated, JJ.
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Advocates
  • For appellant: A.A Kumbhakoni with A.M Kulkami
  • For respondent No. 1: C.M Korde, Senior Advocate with S.S Kulkami
  • For respondent Nos. 2 and 3: C.R Sonawane, A.G.P
Judges
  • A.M Khanwilkar
  • K.K Tated, JJ.
Acts
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Smart Summary

Structured Summary of the Court Opinion

Factual and Procedural Background

This Letters Patent Appeal was brought by the original respondent No. 3, the City and Industrial Development Corporation (CIDCO), challenging the judgment dated 7 November 2009 of the learned Single Judge in Writ Petition No. 1211 of 2009. The Single Judge had set aside an order dated 29 September 2008 of the Reference Court in Application Exhibit 113 in Land Acquisition Reference No. 620 of 2000, which had directed that CIDCO be added as opponent No. 2 in the Reference, the Single Judge holding that CIDCO was neither a necessary nor a proper party.

The material steps leading to the dispute, as described in the opinion, are:

  • Notification under section 4 of the Land Acquisition Act, 1894 was issued on 24 September 1986; declaration under section 6 was issued on 17 September 1987; an Award was made on 18 September 1989.
  • Following the Award, an application under section 18 of the Land Acquisition Act was filed by the original claimant (respondent No.1).
  • CIDCO filed an application (Exhibit 38 dated 7 April 2004) in the reference claiming to be a beneficiary of the acquisition and asserting, relying on sub-section (2) of section 50 of the Land Acquisition Act, that compensation would be payable by CIDCO. That application was rejected by the Reference Court by an order dated 27 October 2004, and that order attained finality.
  • On 7 April 2008 the State of Maharashtra filed Application Exhibit 113 seeking impleading of CIDCO as second opponent on the ground that the land acquired by the State had been transferred to CIDCO and CIDCO was the acquiring body for development. The Reference Court allowed that Application on 29 September 2008 and directed CIDCO be added as opponent No.2.
  • The original claimant (respondent No.1) challenged the Reference Court's order by a writ under Article 227. The Single Judge allowed the writ on 7 November 2009, setting aside the Reference Court's direction to implead CIDCO. CIDCO filed this Letters Patent Appeal against that Single Judge judgment. The appeal was taken on board for final hearing by consent.

Legal Issues Presented

  1. Whether CIDCO (a corporation declared a New Town Development Authority under section 113(3A) of the Maharashtra Regional and Town Planning Act, 1966) is a necessary and/or proper party in the Land Acquisition Reference (Reference No. 620 of 2000) under section 18 of the Land Acquisition Act, 1894, where the land was acquired for the New Mumbai Project and/or activities of CIDCO.
  2. How the statutory position under section 113(2), section 113(3A) and section 116 of the Maharashtra Regional and Town Planning Act, 1966, and section 50 of the Land Acquisition Act, 1894, and relevant administrative resolutions/circulars, bear on whether CIDCO is an acquiring body, a person interested, or an agent of the State for the purposes of the Reference.

Arguments of the Parties

Appellant (CIDCO) — Principal Arguments

  • CIDCO submitted that the Single Judge erred in allowing the writ and setting aside the Reference Court's order dated 29 September 2008; the Single Judge should have confirmed the Reference Court's order impleading CIDCO as opponent No.2.
  • CIDCO argued it is not merely a planning authority but is liable to ultimately pay amounts awarded as compensation, and therefore is a necessary and/or proper party to proceedings under the Land Acquisition Act.
  • CIDCO relied on a Government Circular dated 12 April 2008 to show that, with effect from 1 April 2008, CIDCO would have to pay compensation amounts on account of acquisition for the New Mumbai Project, and that enhanced compensation granted by the Court would have to be paid by CIDCO.
  • CIDCO contended that it qualifies as a “person interested” under the Land Acquisition Act and pointed to section 20 and section 50 (including sub-section (3)) as permitting a local authority or company that bears acquisition expenses to appear and adduce evidence in proceedings.
  • CIDCO argued that the term “company” in section 50 should not be conflated with the definition of “company” in section 3 of the Land Acquisition Act and sought to rely on a series of authorities (listed in the record) to support its position.

Respondent No. 1 (Original Claimant) — Principal Arguments

  • The Single Judge correctly considered sections 113(2), 113(3A), 116 and 113-A of the Maharashtra Regional and Town Planning Act, 1966 and section 50 of the Land Acquisition Act, 1894, together with apex court authorities, and rightly concluded that CIDCO functions as an agent of the State and therefore is not a necessary or proper party to the Reference under section 18 of the Land Acquisition Act.
  • There is a statutory distinction: a New Town Development Authority constituted under section 113(2) does not function as an agent of the Government, whereas a corporation or company declared as a New Town Development Authority under section 113(3A) does function as an agent of the State Government.
  • When acquisition is done under section 116 for an authority constituted under section 113(2), that authority would be a proper party; but where a company/corporation is declared the New Town Development Authority under section 113(3A), it functions as an agent of the State and is not a necessary or proper party.
  • The State repeatedly held (including by administrative circulars and a Resolution dated 12 August 2010) that the Government is liable to pay compensation and had authorized CIDCO merely to appear on behalf of the State to defend the References. CIDCO has, in other proceedings (Income Tax Appellate Tribunal), admitted it acts as an agent of the State.
  • The ITAT decision and the earlier Percival Joseph Pareira decision (and other cited authorities) were relied upon to show CIDCO's status as agent and to support the Single Judge's conclusion that CIDCO is not an acquiring body for the purposes of the Land Acquisition Reference.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
State of Maharashtra v. Indian Medical Association (2002) 1 SCC 589 This authority was cited by the appellant (CIDCO) as part of a group of authorities relied upon regarding interpretation of statutory provisions and related principles. The opinion records that authorities cited by CIDCO (including this case) were considered by the Single Judge and found not applicable to the facts of the present case; the Division Bench respectfully concurred and did not rely on this authority for its decision.
U.P. Awas Evam Vikas Parishad v. Gyandevi (1995) 2 SCC 326 Cited, including by the respondent, in relation to the scope of section 50 of the Land Acquisition Act and the rights of a local authority or company which bears acquisition expenses to appear and adduce evidence. The Court noted this authority was relied upon by parties; the Single Judge considered it (paras cited in the record). The Division Bench found no reason to interfere with the Single Judge's conclusion and therefore did not build further reliance upon it beyond that consideration.
Regional Medical Research Centre v. Gokaran (2004) 13 SCC 125 Cited by the appellant among other authorities to support its contentions about statutory interpretation. The Single Judge had considered this authority and found it not applicable to the present facts; the Division Bench agreed and did not rely on it for its conclusion.
NTPC Limited v. State of Bihar (2004) 12 SCC 96 Cited by the appellant as one of several authorities pertaining to questions about which entity bears liabilities and related statutory interpretation. The Single Judge considered this authority but found it not applicable to the facts; the Division Bench accepted that view and did not rely on it in deciding the appeal.
Agra Development Authority v. Special Land Acquisition Officer (2001) 2 SCC 646 Cited by the appellant among the authorities referred to in argument on the meaning and application of statutory provisions concerning bodies involved in acquisition. The Single Judge considered it but found it not applicable to the present case; the Division Bench concurred and did not base its ruling on this precedent.
Tata Motors Limited v. Talathi of Village Chikhali (2011) 7 SCC 594 Relied upon by the respondent to support the proposition concerning the different treatment/implications where a company is declared a New Town Development Authority under section 113(3A) and functions as an agent of the State. The respondent relied on this Supreme Court decision; the opinion records the reliance but the Court's primary reasoning rests on statutory text (section 113(3A)) and the government resolutions and admissions in other proceedings. The Division Bench did not elaborate further reliance beyond noting the respondent's reliance.
Percival Joseph Pareira v. Special Land Acquisition Officer (W.P. No. 1211 of 2009) (Bombay High Court) Used in the record to show that the Hon'ble Bombay High Court had concluded CIDCO was appointed as an agent of the State Government for New Bombay development under section 113(3A). The ITAT and parties referred to the Percival decision as supporting a finding that CIDCO acts as the State's agent. The Division Bench refers to that factual finding being relied upon by the Income Tax Appellate Tribunal and by respondent counsel; it formed part of the material the Court accepted in concluding CIDCO is an agent and not the acquiring body.
City & Industrial Development Corporation of Maharashtra Ltd. v. ACIT, ITA No. 2985/M/2012 (Income Tax Appellate Tribunal, Mumbai ‘C’ Bench), decision dated 8 August 2012 The ITAT decision (paras 20,21,24,42,43 quoted in the opinion) found that CIDCO is to be regarded as the State or at least as an agent of the State, and noted CIDCO's functional relationship and the approach of revenue authorities in prior years. The Division Bench placed weight on the ITAT decision as evidence that CIDCO itself pleaded/acknowledged its status as agent of the State; the opinion uses this factual admission as support for holding CIDCO to be an agent and not the acquiring body for the Reference.

Court's Reasoning and Analysis

The court's analysis followed a layered, statutory and factual approach. The salient steps in the court's reasoning, as reflected in the opinion, are:

  1. Statutory text: The court started from the plain language of section 113(3A) of the Maharashtra Regional and Town Planning Act, 1966, which expressly contemplates that where the work of developing a new town is done through the agency of a corporation or company owned or controlled by the State, such corporation or company shall be declared the New Town Development Authority and shall act as an agent of the State Government. The court described this statutory status as "crystal clear."
  2. Administrative instruments and admissions: The court examined government resolutions/circulars. It noted the Government Resolution dated 12 February 2008 stating that the entire costs of compensation for land acquisition for CIDCO would be borne by the State Government, and a Government Resolution dated 12 August 2010 authorizing CIDCO merely to appear on behalf of the State in Land Acquisition References. The court treated these instruments as consistent with CIDCO's role as agent of the State.
  3. Application of section 50 and the practical bearing of who bears costs: The court observed that section 50 of the Land Acquisition Act entitles the authority which bears the expenses of acquisition to appear and defend in Reference proceedings. In the present case the State Government, not CIDCO, admittedly borne the entire expenses of acquisition; CIDCO received a token administrative allowance (Rs. 5,00,000/- per year), and in other proceedings CIDCO had itself pleaded that it acted as an agent of the State.
  4. Reliance on admissions and the ITAT decision: The court placed significance on CIDCO's own pleading before the Income Tax Appellate Tribunal (wherein CIDCO was held to be an agent of the State). The court treated CIDCO's admissions in such proceedings and the ITAT finding as matters that could not now be disowned (the opinion used the phrase approbate and reprobate to describe CIDCO's inability to now contend the opposite).
  5. Treatment of other authorities: The court noted that the authorities cited by CIDCO (other than the ITAT decision) had been considered by the Single Judge and were found not applicable to the facts of this case. The Division Bench respectfully concurred with the Single Judge's application of those authorities and therefore saw no reason to add further discussion or to disturb the Single Judge's conclusion.
  6. Conclusion from the combined analysis: Given the statutory position under section 113(3A) (company declared as New Town Development Authority acts as agent), the government resolutions showing the State bore compensation costs and authorized CIDCO to represent the State, and CIDCO's own admissions in other fora, the court concluded it was not possible to hold that CIDCO was the acquiring body for the purposes of the Reference or that CIDCO was a necessary or proper party to the Reference.

Holding and Implications

APPEAL DISMISSED.

Implications and immediate consequences (as stated in the opinion):

  • The judgment of the learned Single Judge dated 7 November 2009 (which set aside the Reference Court's order of 29 September 2008 impleading CIDCO) stands and requires no interference by the Division Bench.
  • In the facts of this case, CIDCO is treated as functioning as an agent of the State Government (by virtue of section 113(3A) of the Maharashtra Regional and Town Planning Act and supported by government resolutions and CIDCO's own admissions) and therefore is not a necessary or proper party in the Land Acquisition Reference under section 18 (and/or section 28A) of the Land Acquisition Act, 1894.
  • No order as to costs was made by the Division Bench.
  • The Division Bench explicitly stated that it did not find it necessary to elaborate further on authorities the Single Judge had already considered and found not applicable; accordingly the decision is confined to the statutory reading and the facts before the court, and the opinion does not purport to establish a broader new precedent beyond the conclusions in this appeal.
Appeal dismissed.

Note: This summary is based exclusively on the contents of the provided court opinion. No information beyond the opinion's text has been added or inferred.

Show full summary ...

    City And Industrial Development Corporation v. Percival Joseph Pareira And Others

    K.K Tated, J.:— Heard learned counsel for the parties.

    2. By consent, the matter is taken on board for final hearing.

    3. This Letters Patent Appeal is preferred by the original respondent No. 3 - City and Industrial Development Corporation (CIDCO) against the judgment dated 7th November, 2009 passed by the learned Single Judge in Writ Petition No. 1211 of 2009 by which the learned Single Judge has set aside the order dated 29th September, 2008 passed by the Reference Court in Application Exhibit 113 in Land Acquisition Reference No. 620 of 2000 holding that the appellant is neither a necessary nor a proper party in the Land Acquisition Reference Application.

    4. A few facts of the matter are as under:

    In the present proceeding, the notification under section 4 of the Land Acquisition Act, 1894 in respect of the acquired land was issued on 24th September, 1986. Thereafter, the declaration under section 6 of the Land Acquisition Act, 1894 was issued on 17th September, 1987. After the Award dated 18th September, 1989 was made, an Application under section 18 of the Land Acquisition Act, 1894 was filed by the respondent No. 1-original claimant. In the said Reference, the appellant - CIDCO made an Application at Exhibit 38 on 7th April, 2004 contending that they are the beneficiaries of the acquisition and on the basis of agreement made by them with the Government of Maharashtra, compensation will be payable by the appellant - CIDCO. They relied on sub-section (2) of section 50 of the Land Acquisition Act, 1894. In the said Application, CIDCO contended that they were necessary party to the Land Acquisition Reference under section 18 of the Land Acquisition Act, 1894. The said Application was rejected by the Reference Court by an order dated 27th October, 2004. This order has been allowed to attain finality. As a result, the issue could not have been raised by the State.

    5. However, on 7th April, 2008, the State of Maharashtra moved an Application Exhibit 113 contending that CIDCO being acquiring body was necessary party to the said Reference under section 18 of the Land Acquisition Act, 1894. The State contended in the said Application that the subject matter of Reference is the land acquired by them and which has been transferred to the CIDCO and, therefore, they made prayer for impleading the CIDCO as second opponent in the said Reference. The same was opposed by the respondent No. 1 - original claimant on various grounds contending that CIDCO was not the acquiring body. They stated that acquisition was not done by the State at the instance of CIDCO. The State has made acquisition on its own and thereafter, decided to transfer the said land to CIDCO for development. The Reference Court by an order dated 29th September, 2008 allowed the Application below Exhibit 113 preferred by the State of Maharashtra and directed respondent No. 1- original claimant to add CIDCO as opponent No. 2 in Land Acquisition Reference No. 620 of 2000.

    6. The order dated 29th September, 2008 was challenged by the respondent No. 1 original claimant by preferring Writ Petition under Article 227 of the Constitution of India. The said Writ Petition was allowed by the learned Single Judge by judgment dated 7th November, 2009. Hence, the present Letters Patent Appeal.

    7. The learned counsel Mr. Kumbhakoni appearing on behalf of the appellant - CIDCO submits that the impugned judgment dated 7th November, 2009 passed by the learned Single Judge in Writ Petition No. 1211 of 2009 is against justice, equity and good conscience and the same is liable to be set aside. He submits that the learned Single Judge erred in allowing the Petition and ought to have rejected the same in toto. The learned Single Judge erred in quashing and setting aside the order dated 29th September, 2008 passed by the trial Court in Application at Exhibit 113 in Land Acquisition Reference No. 620 of 2000 and rejecting the said Application. He submits that on the contrary, the learned Single Judge ought to have confirmed the said order dated 29th September, 2008. He submits that the learned Single Judge ought to have held that the appellant-CIDCO (being not only a Planning or Development Authority for the project of Navi Mumbai but also being liable to ultimately pay the amounts awarded as and by way of compensation towards compulsory acquisition of landed property) is necessary and/or proper party in relation to the proceedings (including Appeals) initiated by the claimants by claiming compensation under the Land Acquisition Act. He submits that the learned Single Judge erred in holding that CIDCO is not a necessary and/or proper party in the facts and circumstances of the case before the learned Single Judge.

    8. He submits that the learned Single Judge ought to have appreciated the Government Circular dated 12th April, 2008 which was relied upon by the appellant-CIDCO before the learned Single Judge. The said Circular records that with effect from 1st April, 2008, the CIDCO will have to pay compensation amount on account of the acquisition of the land for the New Mumbai Project and even the enhanced compensation amount granted by the Court will have to be paid by the CIDCO. He submits that the learned Single Judge erred in relying upon the words “on account of the Government” occurring in the said Circular and holding that the Government only continues to be acquiring body. He submits that the learned Single Judge further ought to have appreciated properly the definition of “person interested” occurring in the Land Acquisition Act, 1894 and ought to have held that CIDCO is a person interested. In this regard, the learned Single Judge ought to have appreciated the provisions of section 20 of the Land Acquisition Act, 1894.

    9. He further submits that section 50 of the Land Acquisition Act, 1894 deals with acquisition of the land at the costs of local authority or a company. This position in clear terms deals with the cases where the land is being acquired at the costs of any fund controlled or managed by local authority or the charges incidental to such acquisition are defrayed from or by such firm or company. Sub-section (3) section 50 of the Land Acquisition Act, 1894 provides that in any proceedings held before the Collector or Court in such cases the local authority or company concerned may appear and adduce evidence for the purpose of determining the amount of compensation. It is important to note the meaning of the word “Company” appearing in this section as compared to the definition of the term “Company” appearing in section 3 of the Land Acquisition Act, 1894. The definition of the term “company” appearing in section 3 of the Land Acquisition Act, 1894 excludes Government Company. However, the word “company” appearing in section 50 of the Land Acquisition Act, 1894 cannot be equated with the definition of the term “Company” appearing in the said section 3 of the Land Acquisition Act, 1894. In support of his contention, he relied on following authorities:

    1) State of Maharashtra v. Indian Medical Association, reported in (2002) 1 SCC 589, 2) U.P Awas Evam Vikas Parishad v. Gyandevi, reported in (1995) 2 SCC 326, 3) Regional Medical Research Centre v. Gokaran, reported in (2004) 13 SCC 125, 4) NTPC Limited v. State of Bihar, reported in (2004) 12 SCC 96, 5) Agra Development Authority v. Special Land Acquisition Officer, reported in (2001) 2 SCC 646.

    10. On the basis of these submissions, the learned counsel appearing on behalf of the appellant states that the impugned judgment passed by the learned Single Judge dated 7th November, 2009 in Writ Petition No. 1211 of 2009 is liable to be set aside.

    11. On the other hand, the learned Senior Counsel Mr. Korde appearing on behalf of respondent No. 1 - original claimant vehemently opposed the present Appeal. He submits that the learned Single Judge has considered sections 113(2), 113(3A), 116 and 113 A of the Maharashtra Regional And Town Planning Act, 1966 and section 50 of the Land Acquisition Act, 1894 and after considering the various authorities of Apex Court rightly held that the appellant CIDCO is acting as an Agent of the State of Maharashtra and, therefore, it is not a necessary nor a proper party in the Reference under section 18 of the Land Acquisition Act, 1894. He submits that once distinction between the New Town Development Authority constituted under section 113(2) of the Maharashtra Regional And Town Planning Act, 1966 and the company/corporation declared as a New Town Development Authority under section 113(3 A) of the Maharashtra Regional And Town Planning Act, 1966 is appreciated the issue raised resolves itself. The crucial point of defence is that New Town Development Authority constituted under section 113(2) of the Maharashtra Regional And Town Planning Act, 1966 does not function as an Agent of the Government, whereas the New Town Development Authority declared as such under section 113(3A) of the Maharashtra Regional And Town Planning Act, 1966 functions as an Agent of the State Government.

    12. He further submits that the provisions with regard to the Land Acquisition are different in respect of the New Town Development Authority constituted under section 113(2) of the Maharashtra Regional And Town Planning Act, 1966 and the Company/Corporation declared is New Town Development Authority under section 113 (3A) of the Maharashtra Regional And Town Planning Act, 1966. He submits that when an acquisition is done under section 116 of the Maharashtra Regional And Town Planning Act, 1966 for New Town Development Authority constituted under section 113(2) of the Maharashtra Regional And Town Planning Act, 1966, the New Town Development Authority would be a proper party in Land Acquisition Reference under section 18 of the Land Acquisition Act, 1894. When an acquisition is done under section 113A of the Maharashtra Regional And Town Planning Act, 1966 a company like CIDCO which has been declared to be New Town Development Authority under section 113(3-A) of the Maharashtra Regional And Town Planning Act, 1966 is neither necessary nor proper party. The reason is that CIDCO is functioning merely as an Agent of the State Government. In support of these contentions, he relies on judgment of the Supreme Court in the case of Tata Motors Limited v. Talathi of Village Chikhali, reported in 2011 (6) Mh.L.J (S.C) 99 : (2011) 7 SCC 594.

    13. The learned counsel for the respondent No. 1-original claimant submits that admittedly, in the present case, the burden of payment of compensation is on Government only. He states that time and again, the State of Maharashtra issued Circular, holding that the Government is liable to pay compensation in respect of acquired land. He further states that the State of Maharashtra by Resolution dated 12th August, 2010 specifically held that to contest the Land Acquisition References under the Land Acquisition Act, 1894 CIDCO has been given power to appear on behalf of the State for defending the cases in the interest of the Government and, therefore, CIDCO is not a necessary or proper party in a proceeding under section 18 and/or 28A of the Land Acquisition Act, 1894. They can represent through the State Government to protect their interest. He further submits that the CIDCO before Income Tax Appellate Tribunal, Mumbai ‘C’ Bench, in ITA No. 2985.M/2012 (Assessment Year : 2006–07) categorically admitted that they are acting as Agent of the State Government. For that purpose the learned Senior Counsel appearing on behalf of respondent No. 1 - original claimant relied on the decision dated 8th August, 2012 (City and Industrial Development Corporation of Maharashtra Limited, “Nirmal”, 2nd Floor, Nariman Point, Mumbai - 400 021 v. ACIT 10(3), R. No. 451, 4th Floor, Aayakar Bhavan, Mumbai - 400 020.) passed by the Income Tax Appellate Tribunal, Mumbai ‘C’ Bench in Income Tax Appeal preferred by CIDCO. Mainly he relied on paragraph Nos. 20, 21, 24, 42 and 43 which read thus:

    “20. The Senior Counsel submitted, taking into all these factual aspects, which are linked totally to the authorization by the State, the assessee can only be regarded as the State on its own terms. If not the State, then it has to be held to be the agent of the State, which has been held as, by the State Government of Maharashtra and which has used the word “agent”. It has been pointed out that even an agency relationship, may not be a formal relationship, but herein in the instant case, the assessee is a legal agent, who is very closely held, guarded and monitored by its principal, to the extent to providing immunity from or all legal action against it.

    21. The Senior Counsel, to demonstrate that CIDCO is an agent of the Government of Maharashtra, took us through the decision of Hon'ble Bombay High Court in the case of Percival Joseph Pareira v. Special Land Acquisition Officer, in W.P No. 1211 of 2009, where CIDCO is the 3rd respondent, wherein it was held as under:

    From consideration of the aforesaid documents the following factual position emerges:

    a) For setting up of the new town of New Bombay, in exercise of powers under sub-section (3A) of section 113 of the said Act of 1966 under notification dated 20th March, 1971, the CIDCO was appointed as the New Town Development Authority. Thus, the State Government decided to get the work of development of the site of the city of New Bombay done through CIDCO as an agent of the State Government.

    He submitted that even the Hon'ble jurisdictional High Court also examined the functional test of CIDCO, wherein the Hon'ble High Court came to the conclusion that CIDCO, the assessee in the instant case, is an agent of the State Government. He further demonstrated that all the relevant sections of MR and TP Act, 1966, i.e sections 113, 113(3A), 113 A were also examined in detail in this case.

    24. The Senior Counsel pointed out that the instant assessee had to file a writ before the Hon'ble Bombay High Court for the stay on demand, pending disposal of appeal before the CIT (A) for the year under consideration. He submitted that the Hon'ble Bombay High Court cited the case of Percival Joseph Pareira v. Special Land Acquisition Officer and accepted the fact that in Percival's case, the Single Judge has held that CIDCO was appointed as an agent of the State Government for the work of development of the site of the city of New Bombay. This according to the Senior Counsel was a fact, arrived at, in Percival's case, which has been accepted in the Writ Petition filed by the assessee, for the early hearing of the appeal by the first appellate authority, that the assessee was an agent of the State Government of Maharashtra.

    42. In tune with these observations, read with sections 113 and 113 A of MR and tp act along with articles 289(1) and 289(3) and holding that the assessee corporation is not doing any trade activity on its own accord, we hold, relying on the decision of the Hon'ble Bombay High Court in the assessee's own case, in the Writ Petition, following the decision Percival case (supra), wherein it has been held, that CIDCO, the assessee herein, is an agent of the State Government of Maharashtra. We, therefore, respectfully follow the Hon'ble jurisdictional High Court of Bombay, as held in the case of Percival (supra), and hold, the assessee to be the “agent” of the State Government of Maharashtra, read with the entire overwhelming documents, suggesting that there is no income to the assessee as such, and whatever is, generated, it gets deposited in the Consolidated Fund of the State. We also cannot ignore the fact that the department has been assessing the assessee as a State Government undertaking for the last three years, therefore, even this cannot be called as an afterthought and applying the ‘rule of consistency’, we hold that the department cannot be allowed to take a distinctive approach in the current year.

    43. The revenue authorities were thus, clearly in error, in assessing the business income in the hands of the assessee at Rs. 63,786.58 lakhs. We delete this income, as not belonging to the assessee.”

    14. He further pointed out that the Income Tax Appellate Tribunal held that the income to the CIDCO by way of remuneration received from the State Government Rs. 5,00,000/- per year only and that has to be assessed in the hands of CIDCO. He submits that the appellant CIDCO on their own admitted that they are Agent of the Government for establishment of New Township and, therefore, they are not necessary and/or proper party. He submits that as per section 50 of the Land Acquisition Act, 1894 the local authority or company which bears the expenses for acquisition may appear and adduce evidence for the purposes of determining the amount of compensation. He also relied on the judgment in the matter of U.P Awas Evam Vikas Parishad v. Gyandevi, reported in (1995) 2 SCC 326. (Paras 2 to 26 and Paras 48 to 58). On the basis of these submissions the learned Senior Counsel for the respondent No. 1 - original claimant submits that the learned Single Judge has considered all these facts and rightly held that the appellant - CIDCO is not necessary or proper party in the Land Acquisition Reference under section 18 and/or 28 A of the Land Acquisition Act, 1894 and, therefore, there is no substance in the present Letters Patent Appeal and the same is liable to be dismissed with costs.

    15. After hearing both the sides, in our view, the short point that arises for consideration in the present Letters Patent Appeal is: “whether the appellant CIDCO is a necessary and/or a proper party in the acquisition proceeding, where the lands are acquired for New Mumbai Project and/or for the activities of CIDCO”.

    16. To consider this point, it is necessary to reproduce sections 113(2), 113(3A) and 116 of the Maharashtra Regional And Town Planning Act, 1966 and section 50 of the Land Acquisition Act, 1894 which read thus:

    “113. Designation of site for new town:

    113. (2) After publication of the notification under sub-section (1) for the purpose of acquiring, developing and disposing of land in the area of a new town, the State Government shall by another notification in the Official Gazette constitute a New Town Development Authority. The New Town Development Authority shall consist of a Chairman, a Vice-Chairman, [two members representing the local authorities functioning in the Region and such numbers of other members not exceeding seven] as in the opinion of State Government have special knowledge or practical experience in matters relating to town and country planning, an officer to be called the Town Planning Officer and Chief Executive Officer. The Chairman and the Vice-Chairman and all other members shall be appointed by the State Government.

    113. (3A) Having regard to the complexity and magnitude of the work involved in developing any area as a site for the new town, the time required for setting up new machinery for undertaking and completing such work of development, and the comparative speed with which such work can be undertaken and completed in the public interest, if the work is done through the agency of a corporation including a company owned or controlled by the State as a new town, the State Government may, notwithstanding anything contained in sub-section (2), require the work of developing and disposing of land in the area of a new town to be done by any such corporation, company or subsidiary company aforesaid, as an agent of the State Government: and thereupon, such corporation or company shall, in relation to such area, be declared by the State Government, by notification in the Official Gazette, to be the New Town Development Authority for that area.

    116. Acquisition of land by Development Authority constituted under section 113(2): A Development Authority [constituted under sub-section (2) of section 113] shall have all the powers of a Planning Authority under this Act as provided in Chapter VII for the purpose of acquisition either by agreement or under the Land Acquisition Act, 1894 (I of 1894) of

    (a) any land within the area designated under this Act as the site of the new town;

    (b) any land adjacent to that area which is required for purposes connected with the development of the new town; and

    (c) any land whether adjacent to that area or not which is required for provision of services of amenities for the purposes of the new town.”

    (emphasis supplied)

    “50. Acquisition of land at cost of a local authority or Company.— (1) Where the provisions of this Act are put in force for the purpose of acquiring land at the cost of any fund controlled or managed by a local authority or of any company, the charges of and incidental to such acquisition shall be defrayed from or by such fund or company.

    (2) In any proceeding held before a Collector or Court in such cases the local authority or company concerned may appear and adduce evidence for the purpose of determining the amount of compensation.

    Provided that no such local authority or company shall be entitled to demand a reference under section 18.”

    17. From bare reading of section 113(3A) of the Maharashtra Regional And Town Planning Act, 1966 it is crystal clear that the New Town Development Authority is declared as an Agent of the State Government. This statutory status bestowed on the appellant cannot be whittled down nor can be elevated to any other position by an administrative decision. Notably, the State Government by Government Resolution, dated 12th February, 2008 specifically stated that the entire costs of compensation for acquisition of land for CIDCO will be borne by the State Government. Not only that the State Government by Government Resolution dated 12th August, 2010 has merely authorized the CIDCO to appear on behalf of the State Government, to protect the interest of the State in the References under section 18 and/or 28A of the Land Acquisition Act, 1894. This itself shows that the acquiring body is the State Government and it has appointed CIDCO is its Agent. Even bare reading of section 50 of the Land Acquisition Act, 1894 shows that the Authority which bears the expenses of acquisition is entitled to appear and defend in Reference Application. In the present case, admittedly, the State Government is bearing the entire expenses of acquisition of the land. CIDCO is getting only Rs. 5,00,000/- per year towards administrative expenses. Further, the appellant - CIDCO on its own pleaded before the Income Tax Appellate Authority that it was acting as an Agent of the State Government and nothing more. On accepting that contention, it has been held that CIDCO was not liable to pay income tax on the income derived from the development activities. Thus, it is not open to the appellant to now contend to the contrary, or for that matter, approbate and reprobate. In any way, considering the provisions of section 113 (3A) of the Maharashtra Regional And Town Planning Act, 1966 it is not possible to hold that the appellant-CIDCO is the acquiring body. It is specifically stated in this section that such Company/Corporation or subsidiary company acts as an Agent of the State Government.

    18. It is to be noted that Government Resolution dated 12th February, 2008 does not support the case of CIDCO and in fact goes contrary to the CIDCO's case. The said Government Resolution makes it clear that payment to be made by CIDCO as compensation/enhancement of compensation will be on account of Government. Thus, the payment so made by CIDCO will be in the capacity of agent of the State Government. This position is consistent with the provisions of section 113(3A) and section 113-A of the Maharashtra Regional And Town Planning Act, 1966. In similar way, the Government Resolution dated 12th August, 2010 also supports the contention of respondent No. 1-original claimant. This Resolution shows that the Government has accepted the judgment of the learned Single Judge and has authorised CIDCO to represent the Government in the References under sections 18 and 28A of the Land Acquisition Act, 1894. Therefore, the view taken by the Single Judge is correct.

    19. The authorities cited by the appellant CIDCO and the respondents, except the judgment of the Income Tax Appellate Authority, have been considered by the learned Single Judge and found the same not applicable to the facts of the present case. As we respectfully concur with the reasoning of the learned Single Judge, it is not necessary for us to dilate on the same. Consequently, we find that the judgment of the learned Single Judge needs no interference. Hence, the Letters Patent Appeal is dismissed. No order as to costs.

    Appeal dismissed.
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