Landowner Cannot Seek Redetermination Of Compensation Based On Enhancement In Appeal If Reference Court Had Dismissed Claim: Bombay HC

The Bombay High Court has held that landowners could not seek redetermination of compensation under Section 28-A of the Land Acquisition Act, 1894 based on an enhanced compensation awarded for the first time in appeal, if the Reference Court had originally dismissed the claim arising out of the same notification.

Their right to redetermination arose only from the Reference Court's award and not from the Appellate Court's decision, added the Court.

The High Court held so while answering a key question as to whether landowners could seek redetermination of compensation under Section 28-A of the Act of 1894 based on an enhanced compensation awarded for the first time in appeal, even if the Reference Court had dismissed their claim originally.

The Division Bench comprising of Justice Rohit B. Deo and Justice M.W. Chandwani observed that “While we do appreciate the predicament of the petitioners and similarly situated land owners, who may conceivably be justified in nurturing a deep sense of hurt and resentment since the land owners covered under the same notification whose claim for enhanced compensation is dismissed by the reference may have secured higher compensation in appeal, and the petitioners and other similarly situated land owners may perhaps feel that the refusal to pay the enhanced compensation at par with the enhanced compensation allowed in an appeal is unjust and iniquitous, we are fettered by the plain language of the statutory provision which is authoritatively construed by the Supreme Court in the decisions supra.”

The Bench stated that the principle that welfare, beneficent or social justice-oriented legislation must be construed liberally and not in a narrow or pedantic manner can however, be invoked only if two interpretations are reasonably permissible, in which situation the interpretation which furthers the beneficial object should be preferred.

“If the language of the statutory provision is plain and admits only of one interpretation, it would be impermissible for the constitutional court to substitute, alter or add any word and to virtually re-legislate”, added the Bench.

Advocate S. U. Nemade appeared for the Petitioners, whereas AGP M. K. Pathan appeared for the Respondent.

In the present case, the petitioners' land was proposed to be acquired for an irrigation project in 1976. The compensation awarded was Rs. 2800 per acre in 1978. The petitioners did not seek a reference under Section 18 of the Act of 1894 at that time and stated that due to illiteracy and the disadvantages and disabilities from which persons residing in remote rural areas suffer, reference was not sought.

Another landowner, who was covered under the same notification, sought a reference which was dismissed. The High Court in the First Appeal enhanced the compensation enhanced to Rs 5000 per acre in 1996. The petitioners then applied Section 28-A in 1996 seeking the same enhanced compensation awarded to him. However, their application was rejected on the grounds of the limitation period.

The petitioners argued that their right to seek redetermination under Section 28-A was triggered only after the High Court's enhanced compensation in appeal since the Reference Court had dismissed their claim originally.

The Bench referred to a catena of Supreme Court cases wherein it was unequivocally held that the award referred to in subsection (1) of section 28-A meant the award made under Chapter-III by the Court defined under Section 3(d) of the Act and not the Appellate Court which rendered judgment in appeal under Section 54, which provision was included in Part III of the Act.

The High Court stated that while the Reference Court under Section 18 dismissed the claim in entirety, with the result that a land owner covered by the same notification had no cause of action to make an application under Section 28-A, and the decision in appeal under Section 54 which for the first time enhanced the compensation was not treated as an award within the meaning of sub-section (1) of Section 28, in a given case the aggrieved person shall be deprived of the remedy to seek parity in payment of compensation unless the judgment in Appeal was treated as an award made under Chapter-III of the Act on the principle of a merger.

“While the resultant situation made indeed be iniquitous and unfortunate, we are not persuaded to clothe the decision in appeal with the character and status of “award” under Chapter III on the principle of a merger. While the award of the reference court whether of dismissal of the claim or enhancement of compensation indeed merges into the appellate judgment and decree, the plain language of the statutory provision precludes us from equating the judgment and decree in appeal with the award under Chapter-III of the Act. Section 28-A is indeed a welfare, beneficent and social justice-oriented legislation and must receive liberal construction”, added the Court.

The Bench further added that about the doctrine of merger, the award of the Reference Court under Section 18 undoubtedly merged into the appellate decree, given the plain language of Section 28-A.

Accordingly, the High Court dismissed the petition.

Cause Title: Shankarrao Pandoji Shendge and Ors. v. State of Maharashtra and Anr.

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