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Ntpc Ltd. v. State Of Bihar And Others
Factual and Procedural Background
Large tracts of land were acquired for construction of a thermal power station at Kahalgaon, Bihar. 1,710 references were filed under the Land Acquisition Act by dissatisfied landowners; 704 of these were decided, with compensation enhanced in 492 cases. The acquiring body (the present appellants) twice sought impleadment before the Reference Court but were refused on the ground that they were neither necessary nor proper parties.
The appellants then filed a writ petition before the High Court seeking impleadment in all 1,006 pending references and quashing of the 492 decided references in which compensation had been enhanced. A learned Single Judge directed their impleadment in all pending references, permitted them to seek impleadment in 302 pending appeals, and allowed delayed appeals in 190 cases where no appeals had been filed. A Division Bench dismissed an intra-court appeal on 15-1-1998, leading to the present appeal before the Supreme Court.
Legal Issues Presented
- Whether the acquiring body is a necessary and proper party in all reference proceedings under the Land Acquisition Act and therefore entitled to be impleaded.
- If so, whether awards passed without notice or impleadment of the acquiring body must be set aside and the matters remitted to the Reference Court.
- Whether amounts of enhanced compensation already disbursed to claimants should be recalled pending fresh determination.
Arguments of the Parties
Appellants' Arguments
- The acquiring body is both a necessary and proper party in all reference proceedings; its absence vitiates the awards.
- All awards rendered without their impleadment should be quashed and the references reheard after bringing them on record.
Respondents' Arguments (per Mr Sanyal)
- In U.P. Awas Evam Vikas Parishad v. Gyan Devi the Supreme Court did not remit matters to the Reference Court but allowed impleadment at the appellate stage; the same course should be followed here.
- The High Court is competent to examine issues of notice and prejudice; hence the impugned order needs no interference.
- Even if remand is ordered, disbursed compensation should not be recalled until final re-fixation, relying on Agra Development Authority v. Special Land Acquisition Officer.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| U.P. Awas Evam Vikas Parishad v. Gyan Devi (1995) 2 SCC 326 | The acquiring body is both a necessary and proper party; absence of notice prejudices its rights. | Primary authority relied upon to hold that non-impleadment vitiates the awards. |
| Abdul Rasak v. Kerala Water Authority (2002) 3 SCC 228 | An award is vitiated for want of notice to the acquiring body; retrial before Reference Court is unavoidable. | Cited to reinforce that remand to the Reference Court is compulsory. |
| Kanak v. U.P. Avas Evam Vikas Parishad (2003) 7 SCC 693 | Reiterates the necessity of impleading the acquiring body. | Further confirmation of the principle applied. |
| Bihar SEB v. State of Bihar 1994 Supp (3) SCC 743 | Cases may be sent back to the High Court when appeals are pending. | Distinguished; Court held that circumstances here require remand to the Reference Court, not the High Court. |
| Agra Development Authority v. Special Land Acquisition Officer (2001) 2 SCC 646 | Disbursed compensation need not be recalled immediately. | Accepted in part; Court directed that amounts already paid shall not be recalled but will be adjusted after redetermination. |
Court's Reasoning and Analysis
The Supreme Court first identified the core question—whether the acquiring body must be impleaded in reference proceedings—and noted that the issue was settled by the Constitution Bench in Gyan Devi. That decision, together with Abdul Rasak and Kanak, unequivocally establishes that the acquiring body is not only a necessary but also a proper party, and that failure to give notice vitiates the proceedings.
The Court rejected Mr Sanyal’s reliance on Bihar SEB, observing that the earlier case dealt with appeals already pending before the High Court, whereas here the awards themselves were rendered without impleadment, defeating the appellants’ right to lead evidence and cross-examine witnesses. Consequently, mere impleadment at the appellate stage could not cure the defect.
On the question of financial prejudice, the Court held that enhanced compensation already paid demonstrates actual prejudice to the appellants. Accordingly, setting aside the awards and ordering a retrial was “absolutely unavoidable.”
Addressing the concern over recovery of disbursed sums, the Court invoked Agra Development Authority and directed that monies already paid need not be recalled; instead, they shall be finally adjusted after the Reference Court refixes compensation.
Holding and Implications
APPEAL ALLOWED IN PART; AWARDS SET ASIDE AND MATTERS REMITTED TO THE REFERENCE COURT.
The impugned High Court judgment was overturned except for its direction to implead the acquiring body in all pending references. In 492 decided references where compensation had been enhanced without the appellants’ participation, the awards were quashed and the cases sent back to the Reference Court. The appellants are deemed to be parties in all pending and remanded cases, with liberty to cross-examine existing witnesses and adduce further evidence. Enhanced compensation already disbursed shall not be recovered, but will be adjusted against the amount ultimately fixed.
Implications: The decision reaffirms the constitutional principle that the acquiring body must be impleaded in reference proceedings, strengthening procedural safeguards in land acquisition matters. While it does not create new law, it reinforces existing precedent and clarifies that non-impleadment mandates a de novo hearing before the Reference Court.
Order
1. This appeal is against the judgment of the High Court dated 15-1-1998.
2. Briefly stated, the facts are as follows:
Large tracts of lands were acquired for the purposes of constructing a thermal power station at Kahalgaon in the State of Bihar. Not being satisfied with the amounts awarded by the Land Acquisition Officer, 1710 references were filed. Out of this 704 references have already been decided. 1006 references are still pending. From the 704 references, which have already been decided, in 212 cases the compensation awarded by the Land Acquisition Officer has been confirmed. However, in 492 cases the Reference Court has enhanced the compensation. Out of 492 cases in which compensation has been enhanced the State has filed appeals in 302 cases and no appeals have been filed in 190 cases.
3. It must be mentioned that the appellants, who are the body on whose behalf land has been acquired, had made applications for being impleaded in two references. However, their applications for impleadment had been dismissed on 4-9-1992 and 6-1-1993 on the ground that they were neither necessary nor proper party.
4. The appellants then filed a writ petition in the High Court claiming that they were necessary and proper parties in all references and that they should be impleaded in all references which were pending. They further claimed that awards of the Reference Court by which compensation has been enhanced should be quashed and that those cases be referred back to the Reference Court with a direction that the appellants be impleaded as a party.
5. A learned Single Judge of the High Court, by his judgment dated 28-4-1995, held that in all the pending references i.e the 1006 cases the appellants were to be impleaded as a party if not already impleaded. It was further held that in 302 appeals, which were pending before the High Court, the appellants could make an application for being impleaded. The learned Single Judge opined that if such applications were made, they were bound to be allowed unless and until it was shown that the appellants had notice of the reference proceedings and were not prejudiced. The learned Single Judge further gave liberty to the appellants to file appeals in the remaining 190 cases in which the Reference Court had enhanced the compensation. The delay in filing appeals was condoned. An appeal against this order was dismissed by the Division Bench by the impugned order dated 15-1-1998.
6. The question which arises for consideration is whether the appellants have a right to be impleaded in all references. This question is no longer res integra. The law is settled by a Constitution Bench of this Court in the case of U.P Awas Evam Vikas Parishad v. Gyan Devi (1995) 2 SCC 326. In that case, after considering various provisions of the Land Acquisition Act, it has been held that the body on whose behalf the land is acquired is not just a necessary party but is also a proper party before the Reference Court. It has been held that not giving them notice either at the stage of fixing compensation by the Collector or by the Reference Court affects their rights. It has been held that they must be impleaded as a party in the reference proceedings.
7. Thereafter, in the case of Abdul Rasak v. Kerala Water Authority (2002) 3 SCC 228 a Bench of this Court, relying on the abovementioned judgment, has held that an award given by the civil court on reference stands vitiated for want of notice to the acquiring body. It has been held that as the acquiring body had to be impleaded as a party to the proceedings before the civil court from the very beginning, a retrial becomes unavoidable. It has been held that in such cases the matters must be referred back to the Reference Court.
8. Again in the case of Kanak v. U.P Avas Evam Vikas Parishad (2003) 7 SCC 693 the abovementioned position has been reiterated.
9. Mr Sanyal, however, submitted that the Constitution Bench in Gyan Devi case (1995) 2 SCC 326 had not referred the matter back to the Reference Court. He submitted that the matters were pending before the High Court. He submitted that since there was a direction that the appellants were to be impleaded in all the pending appeals and that they had a right to file appeals in the remaining cases, this Court should not interfere. He submitted that the High Court was competent to and would undoubtedly consider whether or not any prejudice had been caused to the appellants for want of notice. He submitted that the High Court would also consider whether notice had been issued to them or not. He submitted that the impugned order, therefore, needs no interference. In support of the above submission he relied upon a case in Bihar SEB v. State of Bihar 1994 Supp (3) SCC 743 to point out that even in that case the matter was only sent back to the High Court. He pointed out that in both the abovementioned cases, the awards were not quashed.
10. We are unable to accept this submission. As set out hereinabove, the law has been settled by the Constitution Bench judgment of this Court. In cases relied upon by Mr Sanyal, the application of the acquiring body was to be impleaded in the appeals which were pending before the High Court. It was in those circumstances that the matters were referred back to the High Court. Otherwise, as set out in the other two cases as mentioned above, it becomes absolutely unavoidable that the cases be referred back to the Reference Court. The right which the acquiring body has is not just a right to lead evidence before the Reference Court. The acquiring body also has a right to support the award which has been made by the Land Acquisition Officer. This can be done by cross-examining witnesses led by the claimants. Non-impleadment of the body on whose behalf acquisition has taken place, defeats this right.
11. Mr Sanyal next submitted that even if the award is quashed and the matter is remitted back to the Reference Court, there should be a direction that amounts which have been disbursed should not be recalled till after the compensation is refixed by the Reference Court. He submitted that at that stage the amounts could be finally adjusted. In support of this submission he relies upon the case of Agra Development Authority v. Special Land Acquisition Officer (2001) 2 SCC 646.
12. In our view, as the appellants were entitled to be impleaded in the reference proceedings, the High Court was in error in not setting aside the awards and referring the cases back to the Reference Court with a direction that they be impleaded. The fact that amounts have been enhanced, shows that prejudice has been caused to the appellants. We, therefore, set aside the impugned judgment except to the extent that it directs that in all pending references the appellants will be impleaded as parties. The awards made by the Reference Court in the 492 cases, where the amounts have been enhanced, are set aside. These cases are remitted back to the Reference Court. The appellants shall be deemed to have been brought on record in all these cases as well as all other pending cases. The Reference Court shall try to dispose of the references as expeditiously as possible. The statement of witnesses already recorded on behalf of the claimants need not be recorded afresh. However, the appellants shall have a right to cross-examine the witnesses, if they so desire. For that purpose those witnesses shall be recalled. If, however, those witnesses cannot be recalled for a valid reason e.g because they have died or cannot be found then their statements shall not be excluded from consideration and shall be read in evidence. All claimants shall also be entitled to adduce further evidence, if they so desire. The appellants will be entitled to adduce evidence if they so desire.
13. We further direct that if the enhanced compensation has been paid to the claimants then the same shall not be recalled but shall finally be adjusted in the amount which may be fixed by the Reference Court. It goes without saying that if the enhanced compensation has not been paid, then the same shall not be paid.
14. The appeal stands disposed of accordingly. No order as to costs.
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