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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.1211 OF 2009
Percival Joseph Pareira ..Petitioner
Vs.
1 The Special Land Acquisition Officer
2 The State of Maharashtra
3 City & Industrial Development Corporation ..Respondents
Mr.S.S.Kulkarni, for petitioner.
Mr.A.P.Vanarase, AGP for respondents no.1 and 2.
Mr.A.A.Kumbhakoni, i/b Mr.A.M.Kulkarni,for respondent No.3.
CORAM : ABHAY S.OKA, J.
DATE : 7th November, 2009.
JUDGMENT :
1] The submissions of the learned counsel for the parties were
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heard on 7 October, 2009. The judgment was reserved.
Accordingly, the petition is today placed for judgment.
2] This Writ Petition under Article 227 of the Constitution of
India arises out of the proceedings of a reference under Section 18
of the Land Acquisition Act, 1894 (hereinafter referred to as “the
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said Act of 1894″). The petitioner is the claimant in the said
reference. By the impugned order, the third respondent (The City
Industrial Development Corporation of Maharashtra Limited
hereinafter referred to as “CIDCO”) has been directed to be added
as an opponent to the land acquisition reference under section 18
of the said Act of 1894.
3] A reference will have to be made to the facts of the case. The
notification under Section 4 of the said Act of 1894 in respect of
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the acquired land was issued on 24 September, 1986. The
declaration under section 6 of the said Act of 1894 was issued on
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17 September, 1987. After the award dated 18 September 1989
was made, an application under Section 18 of the said Act of 1894
was filed by the petitioner on the basis of which a reference under
section 18 of the said act of 1894 has been made to the Court. It
must be noted here that the third respondent (CIDCO) made an
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application at Exhibit 38 on 7 April, 2004 contending that the said
respondent was the beneficiary of the acquisition and on the basis
of an agreement made by the said respondent with the
government of Maharashtra ,compensation will be payable by the
said respondent. Reliance was placed on sub-section 2 of section
50 of the said Act of 1894 and it was contended that the CIDCO
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was a necessary party to the land acquisition reference under
Section 18 of the said Act of 1894. By the judgment and order
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dated 27 October, 2004 the said application was rejected.
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4] On 7 April, 2008, the State of Maharashtra represented by
the District Government Pleader moved an application exhibit 113
contending that the CIDCO being acquiring body was a
necessary party to the said reference under Section 18 of the said
Act of 1894. It was contended that the State has acquired the land
subject matter of reference and has transferred the land to CIDCO.
Therefore, a prayer was made for impleading the CIDCO as the
second opponent to the said reference. The petitioner opposed
the same on various grounds contending that the CIDCO was not
the acquiring body. It was contended that CIDCO was neither a
necessary nor a proper party. By the impugned order, the said
application made by the State of Maharashtra was allowed and the
petitioner was directed to implead the CIDCO as a party opponent
to the said reference.
5] The learned counsel for the petitioner has made detailed
submissions on this aspect. Submissions are made on the basis
of various provisions of the Maharashtra Regional Town Planning
Act, 1966 (hereinafter referred to as “the said Act of 1966”). It is
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submitted that under the provisions of the said Act of 1966 the
CIDCO being a New Town Development Authority, there is no
power vesting in CIDCO under Section 113-A to acquire a land for
the purpose of setting up a new town. The submission is that
CIDCO was merely an agency of the State of Maharashtra for
implementing the project of setting up the new township of New
Bombay. He submitted that the decision to acquire the lands
has not been taken by CIDCO but it is the decision of the State of
Maharashtra. It is submitted that sub-section 2 of Section 50 of
the said Act of 1894 has no application. He has placed reliance on
various notifications. He has also placed reliance on the
amendment made to the said Act of 1966 in the year 1971.
6] Learned counsel for the third respondent CIDCO submitted
that the CIDCO was established and appointed as a Special
Planning Authority in relation to New Bombay. He submitted that
the CIDCO is a government company and the same is established
under section 113 (A) of the said Act of 1966. He pointed out that
earlier the entire burden of paying the compensation on account of
acquisition of lands for the project of the twin city of the New
Bombay was of the State of Maharashtra. He placed reliance on a
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Government Resolution dated 12 February, 2008 and submitted
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that the entire responsibility for payment of enhanced
compensation of the lands acquired for the project is that of
CIDCO. He submitted that the issue involved in the present
petition is not whether the CIDCO is the acquiring body or local
authority or whether the CIDCO acts as an agent of the State
Government. But, the issue is whether the CIDCO was a “person
interested” and whether CIDCO is going to ultimately end up in
bearing the entire financial burden of paying whole amount of
compensation. He submitted that the CIDCO is required to pay
the compensation amount to the claimants. He submitted that
the term “company” appearing in section 3 of the said Act of
1894 excludes a government company, but the “company” referred
to in Section 50 is different and the same words used will have to
be construed differently. He has relied upon decisions of the Apex
Court which are dealt with in the later part of this judgment. He
submitted that the CIDCO, in any event, is a person interested,
and therefore, is entitled to a notice of reference under section 18
of the said Act of 1894 in view of clause “b” of Section 20 of said
Act of 1984. He submitted that the words “local authority” and
“company” in the said Act of 1894 would include all bodies on
whose behalf the land is acquired. He submitted that all such
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bodies are necessary and proper parties to a reference under
section 18. He submitted that no interference is called for with the
impugned order.
7] The learned AGP appearing for the State supported the
impugned judgment and order and submitted that as the CIDCO
is required to bear the burden of payment of the compensation as
well as the enhanced compensation, as rightly held by the trial
court , the CIDCO was a necessary and proper party to the
reference and therefore no interference is called for. The learned
counsel for the petitioner pointed out from the Government
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Resolution dated 12 February, 2008 relied upon by CIDCO that
even under the said Government Resolution , the CIDCO is
required to pay the compensation amount on behalf of the
Government of Maharashtra. He pointed out that the said
resolution further provides that at the time of final settlement of the
account , an adjustment would be made to give the credit to the
CIDCO of the amount paid by way of compensation to the
claimants.
8] I have given careful consideration to the submissions.
Before dealing with the submissions, it will be necessary to
consider the relevant provisions of Act of 1966. Under Sub-section
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(1) of Section 113, the State Government is empowered to issue a
notification in the official gazette designating any area as a site for
the proposed New Town which shall be named in the notification.
Under sub-section (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 is empowered to constitute a New Town
Development Authority. Sub-section 3(A) of the Section 113
reads thus:-
“(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 or a subsidiary company thereof, set up
with the object of developing an area as a new
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kbp 8 wp1211-09.sxwtown, 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]”.
It must be stated here that aforesaid sub-section 3(A) as well as
Section 113 A were brought on the statute book by way of an
amendment made by the Maharashtra Act No.21 of 1971. Section
113(A) of the said Act read thus:-
“113A.Notwithstanding anything contained in this
Act, or in any law for the time being in force,
where any corporation or company is declared to
be the New Town Development Authority under
sub-section (3A) of section 113, the State
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kbp 9 wp1211-09.sxwGovernment shall acquire either by agreement or
under the Land Acquisition Act, 1894 (and such
acquisition may have been commenced before
the coming into force of this section) any land
within the area designated under this Act, as the
site of the new town, any land adjacent to that
area which is required for the purposes
connected with the development of the new
town, and any land whether adjacent to that area
or not, which is required for provisions of
services or amenities for the purposes of the new
town; and vest such land in such Authority for the
purposes of this Chapter]”
In the light of the relevant provisions of the said Act of 1966 , the
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factual aspects of the case will have to be considered. On 20March, 1971, a notification was issued by the State Government
which was published in the gazette by which the area mentioned in
the schedule was designated as the site for the proposed new
town known as “New Bombay”. The said notification was issued in
exercise of powers under sub-section (1) of Section 113 of the said
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kbp 10 wp1211-09.sxwAct of 1966. On the same day, another notification was issued by
the State Government which was published in the same gazette.
The said notification was issued in exercise of powers conferred by
the sub-section 3A of the Section 113 of the said Act of 1966 by
which the CIDCO was appointed as the New Town Development
Authority for the area comprised in the site of New Bombay. The
said notification records that the CIDCO was a subsidiary company
of the State Government which was owned and controlled by the
State Government. Thus, the appointment of the CIDCO is under
sub-section 3A of Section 113, and therefore, the CIDCO as a
New Town Development Authority was required to do the work of
developing and disposing of land in the area of new town of New
Bombay as an agent of the State Government.
9] At this juncture, it will be worth making a reference to a
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notification dated 24 September, 1986 under section 4 of thesaid Act of 1894 by which the land subject matter of the reference
in the present case has been notified for acquisition. There is a
recital in the notification that under the provisions of Section 113A
of the said Act of 1966 read with Section 4 of said Act of 1894, the
land described in the schedule under the said notification was
likely to be needed for the development of the area designated as
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kbp 11 wp1211-09.sxwthe site of the New Town of New Bombay. The notification under
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Section 6 of the said Act of 1894 issued on 10 September, 1987is also placed on record. The notification specifically records the
satisfaction of the Commissioner of the Konkan Division that it was
necessary to acquire the land described in the schedule to the
notification under section 4 referred to earlier . The notification
states that the same was issued under the provisions of the
section 6 of the said Act of 1894 read with section 113-A of the
said Act of 1966. The material recital in the said notification read
thus:-
” And whereas, the Commissioner Konkan
Division, is now satisfied that the said lands are
needed to be acquired at the expenses of State
Government for the said public purpose;”
The aforesaid recital makes it very clear that the land was
decided to be acquired “at the expenses of the State Government”
for public purpose. This factual aspect has some bearing on the
decision of this petition.
10] The learned counsel for the CIDCO has relied upon the
decision of the State Government which is reflected from the
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circular dated 12 February, 2008 which is placed on record by thelearned counsel for the CIDCO. In the preamble, it refers to the
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aforesaid notification dated 20 March, 1971. It also notes that theCIDCO has been appointed by the State Government as the New
Town Development Authority for New Bombay. The said
government resolution notes that the CIDCO was newly formed in
the year 1971 and at the time funds were not available with the
CIDCO. It is further stated that as the funds were not available with
CIDCO, it was decided that the State Government will acquire
privately owned lands in the site of New Bombay and will
thereafter transfer the same to the CIDCO. The said government
resolution further notes that the State Government has acquired
various lands under the provisions of the said Act of 1894 and has
transferred the same to the CIDCO. The said lands are being
developed and sold through the CIDCO .It is further noted that
considering the present financial condition of the State
Government , hereafter it will not be possible for the State
Government to make available funds for payment of
compensation/enhanced compensation in respect of land acquired
for the project of the New Bombay. The said government
resolution refers to earlier decision of the Government dated 2nd
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kbp 13 wp1211-09.sxwJanuary 1985 by which the State Government decided to acquire
private land for the project of New Bombay and thereafter to
transfer the same to CIDCO. It is further noted that the said earlier
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decision has been modified and with effect from the 1 April 2008 ,the CIDCO will have to pay the compensation amount on account
of the acquisition of land for the New Bombay project and even the
enhanced compensation amount granted by the Court will have to
be paid by the CIDCO . It records that with effect from 1 April,
st2008 the amount of compensation paid by the CIDCO will be “on
account of the Government”. It further records that when an
account of the amounts paid by the State Government towards
compensation and enhanced compensation as well as the
amounts paid by the CIDCO in that behalf will be made, the
amounts paid by the CIDCO will be taken into consideration.
Further part of the government decision records that for the
acquisition of the land for the purpose of New Bombay project ,
the Town Development Department of the State of Maharashtra is
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the acquiring body. However, by a letter dated 20 March, 2006issued by the State Government , the Managing Director, Joint
Managing Director, Chief Land Survey Officer of the CIDCO have
been authorized to submit the proposals for acquisition on behalf
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kbp 14 wp1211-09.sxwof the Government. Therefore, the government resolution directs
that the CIDCO should actively participate in the Court
proceedings relating to the payment of compensation in respect of
the land acquired for the New Bombay project. Under the said
decision, a direction was issued to the CIDCO that in the
proceeding of a reference under section 18 of the said Act 1894 ,
the CIDCO shall oppose the claim for enhancement by pointing out
that apart from compensation , allotment of developed plots is
being made to the affected persons.
11] 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 3(A) of section
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113 of the said Act of 1966 under notification dated 20March 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.
b) The acquiring body for the acquisition of land for New
Bombay project was the Town Development
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kbp 15 wp1211-09.sxwDepartment of the State Government and with effect
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from 20 March, 2006 certain Officers of the CIDCOhave been empowered to submit the proposals for the
acquisition of land on behalf of the State Government.
c) Till 1st April, 2008 not only that the CIDCO was not the
acquiring body, but, even the compensation on account
of acquisition of lands for the said project was paid by
the State Government and not by the CIDCO.
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d) The effect of the decision dated 12 February, 2008 is
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that from 1 April, 2008 the CIDCO will have to pay thecompensation amount “on account of Government”.
However , the Town Development department of the
State Government continues to be the acquiring body.
e) As far as the present acquisition is concerned, the
notification under section 6 of the said Act 1894 makes
it clear that the land was acquired under Section 113A
at the instance of the State Government and at the
expenses of State Government.
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kbp 16 wp1211-09.sxw 12] Where any company or Corporation is declared to bethe New Town Development Authority under sub- section
(3A) of section 113 the said At Of 1966, as per section
113A , the State Government is required to acquire, either by
an Agreement or under the said Act of 1894 , any land within
the area designated as the site of the new town. The section
113A requires the State Government to vest the acquired
lands in such New Town Development Authority for the
purposes of the development of the New Town. Thus, even
if a New Town Development Authority is appointed under
sub-section (3A) of Section 113 , the acquisition of the lands
for the purpose of setting up the New Town the has to be by
the State Government. The reason is that under sub-section
(3A) of section 113 , the New Town Development Authority
acts as an agent of the State Government. In the present
case , the CIDCO has been admittedly appointed under sub-
section (3A) of section 113 of the said Act of 1966.
Therefore, as reflected from the notifications under sections
4 and 6 of the said Act of 1894, the acquisition of the land is
under section 113A of the said Act of 1966 at the instance of
the state government. The notification under section 6 makes
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kbp 17 wp1211-09.sxwit very clear that the acquisition is at the cost of the State
Government. The acquisition has been made and completed
prior to first April 2008 and therefore, going by the
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government resolution dated 12 of February 2008, thecompensation and enhanced compensation is payable by
the state government.
12A] A reliance has been placed by the learned counsel for the
CIDCO on the decision of the Constitution Bench of the Apex
Court in the case of U.P.Awas Evan Vikas Parishad Vs. Gyandevi
[1995(2)SCC 326]. The question before the Apex Court was re-
garding the interpretation of Section 50 of the Act of 1894. The
conclusions of the decision of the Apex Court are summed up in
paragraph 24 of the decision. The relevant conclusions read
thus :-
“24. To sum up, our conclusions are :
1. Section 50(2) of the L.A. Act confers on a local authority for
whom land is being acquired a right to appear in the acquisition
proceedings before the Collector and the reference court and ad-
duce evidence for the purpose of determining the amount of com-
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2. The said right carries with it the right to be given adequate no-
tice by the Collector as well as the reference court before whom ac-
quisition proceedings are pending on the date on which the matter of
determination of compensation will be taken up.”(emphasis added)
There are subsequent decisions of the Apex Court which consider
the said decision in the case of U.P. Awas (Supra). In the case of
Agra Development Authority Vs. Special Land Acquisition Officer
and others [(2001)2 SCC 646] the Apex Court considered the
same question. In paragraph 7, the Apex Court held thus:-
“. …….What is required by Section 50 of the Land Ac-
quisition Act is that the body for whom the property is
being acquired is given an opportunity to appear and ad-duce evidence for the purposes of determining the
amount of compensation. Nothing could be shown to us that
this had been done. On this point the matter requires to be
sent back to the Special Land Acquisition Officer for refixingcompensation payable. “
(emphasis added) ::: Downloaded on - 09/06/2013 15:16:41 ::: kbp 19 wp1211-09.sxw 13] Learned counsel for the second respondent CIDCO invitedmy attention to the decision of the Apex Court in the case of NTPC
Ltd. Vs. State of Bihar and others [(2004)12 SCC 96]. In
paragraph 6 of the judgment, the Apex Court reiterated that the
body on whose behalf the land has been acquired is not just a
necessary party, but, is the proper party before the reference
court. In the decision relied upon by the learned counsel for the
CIDCO in the case Regional Medical Research Centre, Tribal
Vs.Gokaran and others [(2004) (13)SCC 125], The Apex Court
reiterated the settled law on the point. The Apex Court observed
that
“The definitions of “local authority” and “company” in the Land
Acquisition Act are inclusive definitions. They include all bodies
on whose behalf land is acquired.”Therefore, to that extent the learned counsel for CIDCO is right
when he made a submission that the aforesaid definitions are
sufficiently wide to include all bodies on whose behalf the land is
required.
14] Thus, in short, the Apex Court has laid down that the body
on whose behalf the land was acquired is either a necessary or a
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kbp 20 wp1211-09.sxwproper party to the reference under section 18 of the said Act of
1884. On facts, as already held earlier, the acquisition in the
present case is in exercise of the powers under Section 113A by
the State Government. The notification under Section 6 of the Act
of 1984 makes it very clear that the acquisition is on behalf of the
State Government at the cost of the State Government. Moreover,
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in view of the notification dated 24 March, 1971 the CIDCO beingthe New Town Development Authority appointed under Section 3A
of Section 113 is doing the work of developing and disposing of the
land in the area as an agent of the State Government. Therefore,
the acquisition cannot be said to be at the instance of the CIDCO.
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As stated in government resolution dated 12 April 2008 , theacquiring body is admittedly the town development department of
the State Government. After the acquisition, the acquired land may
have been transferred to CIDCO. But as stated earlier , the
appointment of the CIDCO being under sub-section (3A) of section
113 of the said Act of 1966, the CIDCO acts as an agent of the
State Government. The work of development of the site of the New
Bombay is being carried out by the CIDCO on behalf of the State
Government. Therefore, the acquisition of land in exercise of
powers under section 113A of the said Act of 1966 cannot be said
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kbp 21 wp1211-09.sxwto have been made for the benefit of or on behalf of CIDCO.
Therefore, none of the aforesaid decisions will apply in the present
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case. At least, till 1 April, 2008, the compensation amount inrespect of the land acquired for the project of New Bombay was
being paid by the State Government and now the decision of the
State Government says that the CIDCO will pay the compensation
amount “on account of the State Government”. Even assuming
that the Government decision of April, 2008 brings about certain
change , the said decision is of no relevance here as the
acquisition has been initiated and an award has been made much
prior to the said decision. Even assuming that the acquisition is
governed by the government resolution dated 12th April 2008, the
enhanced compensation will be payable by the CIDCO on account
of the State Government. In the circumstances, the CIDCO is
neither the acquiring body nor the authority which is liable to pay
compensation.
14A] Now an argument made by the learned counsel for the third
respondent that the CIDCO is a “person interested” will have to
be considered. The said argument was advanced as under the
clause “b” of section 20 of the said Act of 1894 a person interested
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kbp 22 wp1211-09.sxwis required to be issued a notice of the reference. Section 20 of
the said Act of 1894 read thus:-
“20.Service of Notice.- The Court shall
thereupon cause a notice specifying the day on
which the Court will proceed to determining the
objection, and directing their appearance before
the Court on that day, to be served on the
following persons, namely:-
(a)the applicant;
(b)all persons interested in the
objection, except such (if any) of
them as have consented without
protest to receive payment of the
compensation awarded; and
(c) in the objection is in regard to the
area of the land or to the amount of
compensation, the Collector.”
Clause “b” contemplates a notice to all persons interested in the
objection. In a reference under section 18, the objections
contemplated are as regards (a) the measurement of the land
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kbp 23 wp1211-09.sxwacquired ,(b) the amount of compensation,(c) the persons to whom
it is payable, or (d) the apportionment of the compensation among
the persons interested. In the facts of the case, the CIDCO is not
concerned with any of the four categories of objections which can
be raised in a reference under section 18. The CIDCO is not
interested even in the amount of compensation as the same is
payable by the State Government. A reference will have to be
made to clause “b” of section 3 of the said Act of 1894 which
reads thus:-
“(b) the expression “person interested” includes
all persons claiming an interest in compensation
to be made on account of the acquisition of land
under this Act: and a person shall be deemed to
be interested in land if he is interested in an
easement affecting the land;”
A person can be said to be a person interested provided that he is
the person claiming an interest in the compensation to be made on
account of acquisition . Thus, the person who claims to be
entitled to compensation or a share in the compensation can only
be a person who can be said to be claiming interest in the
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kbp 24 wp1211-09.sxwcompensation. Here the CIDCO is not claiming interest in the
compensation. In fact, the CIDCO has no concern with the
payment of compensation. Therefore, the CIDCO cannot claim
right of audience on the ground that it is a “person interested”.
15] Only possible provision under which the CIDCO could have
claimed is Section 50 of the said Act of 1894 which reads thus:-
“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 any 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:
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kbp 25 wp1211-09.sxw
Provided that no such local authority or
Company shall be entitled to demand a
reference under section 18.
In the present case, admittedly, land is not being acquired at the
cost of any fund controlled or managed by the CIDCO. As held
earlier, the acquisition cannot be said to be on behalf of CIDCO or
for benefit of CIDCO in as much as while developing the site of
New Bombay, the CIDCO is acting as an agent of the State
Government. Therefore, sub-section (2) of Section 50 will have no
application in the present case.
15A] Keeping in mind the aforesaid legal and factual position ,
now a reference will have to be made to the impugned order. The
only ground on which the CIDCO is ordered to be impleaded is
that the CIDCO is a local authority, and therefore, it is a proper
party to the reference. The local authority can become necessary
or proper party provided sub-section 1 of Section 50 is applicable
which is not the case here. In the circumstances, the impugned
order will have to be quashed and set aside being completely
illegal. Therefore, the petition must succeed.
16] Hence, I pass the following order:-
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kbp 26 wp1211-09.sxw
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a) The impugned order dated 29 September, 2008
is quashed and set aside and the application
exhibit 113 in LAR No.620/2000 stands
dismissed.
b) The petition is allowed accordingly.
c) No order as to the costs.
d) On the prayer made by the learned counsel for
the third respondent, it is directed that the
reference court shall not proceed with the
hearing of the reference till the end of January ,
2010.
[ A.S. OKA, J.]
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