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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2008
@ SPECIAL LEAVE PETITION (CIVIL) NO. 5983 OF 2007
Mootha Venkateswara Rao (Dead)
Tr. Lrs. ...
Appellants
Vs.
Godhavari Co-op Milk P. Union
Ltd. & Ors. ...
Respondents
J U D G M E N T
ALTAMAS KABIR, J.
1. Leave granted.
2. Pursuant to a notification under Section 4
(1) of the Land Acquisition Act, 1894 dated
8th June, 1978, the Government of Andhra
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Pradesh acquired 5 acres of land in Survey
No. 212/1B of Ramanayyapeta in Kakinada
Municipality for the purpose of
construction of a mini-dairy. The appellant
herein was the claimant before the Land
Acquisition Officer, who passed an award
fixing the market value of the land at
Rs.28,750/- per acre. Possession of the
lands was taken on 31st August, 1978. The
appellant, herein, challenged the
acquisition itself by way of a Writ
Petition No.4082 of 1979, which was
dismissed on 9th July, 1984. The appeal,
which was preferred from the judgment of
the learned Single Judge, being Writ Appeal
No. 670 of 1985, was allowed on 7th
February, 1991. The matter was carried to
this Court by the respondents herein in SLP
(C) No.19302 of 1991, which ultimately
ended in a compromise. The Special Leave
Petition was disposed of on 1st September,
1992, in pursuance of the Memorandum of
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Settlement filed by the parties, wherein it
was agreed that the date of Notification
would be treated as 7th February, 1991, for
all purposes, and, accordingly, the market
value of the lands as prevailing on the
said date was to be taken for determination
of compensation.
3. Subsequent to the said order passed by this
Court, the matter was again taken up by the
Reference Court. After taking into
consideration further evidence which was
led and the materials on record, the
Reference Court fixed the market value at
Rs.800/- per square yard and aggrieved by
the same the respondents herein preferred
an appeal to the High Court, being First
Appeal No. 836 of 2003. During the hearing
of the appeal, the Memorandum of Settlement
arrived at between the parties was referred
to and while on behalf of the respondents
herein, it was contended that the Reference
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Court had wrongly fixed the market value of
the acquired lands at Rs.800/- per square
yard, on behalf of the appellant herein,
particular emphasis was laid on the fourth
paragraph of the Memorandum of Settlement,
which reads as follows:-
“The compensation determined by
the learned Subordinate Judge,
Kakinada will have to be paid to the
respondent within a period of eight
weeks thereafter. In default, the
Acquisition will stand set aside the
rights and liabilities of the parties
will be determined in accordance with
law.”
4. The High Court was, however, of the view
that despite the fact that payment had not
been made in terms of the Memorandum of
Settlement, since the main appeal was being
heard, the entire acquisition as such could
not be washed away, which would be
detrimental to both the parties. It is on
such note that the appeal was taken up for
final decision though, ultimately, the same
was dismissed.
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5. This appeal has been filed by the heirs of
the original claimant, who had died in the
meantime, mainly on the question as to
whether the High Court had erred in not
setting aside the acquisition proceedings in
terms of the compromise which had been
arrived at between the parties and recorded
in the order dated 1st September, 1992 passed
in SLP(C) No.19302 of 1991. The other
ground, which had been taken by the
appellant is whether the High Court acted
correctly in directing the respondents to
pay the compensation amount, which amounted
to extending the time for making such
deposit which was contrary to the terms of
the Memorandum of Settlement.
6. Appearing for the appellants, Mr. R.
Nariman, learned Senior Advocate, confined
his submissions to the two points indicated
hereinabove. Learned counsel urged that once
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a compromise had been arrived at between the
parties, the terms whereof had been reduced
to writing in the form of a Memorandum of
Settlement, it was not open to the High
Court to ignore the terms and conditions
contained therein upon observing that since
the main appeal was being heard, the
acquisition proceedings could not be washed
away. Mr. Nariman submitted that the
approach of the High Court was entirely
wrong since by operation of law the
acquisition proceedings stood set aside on
the failure of the respondents to comply
with the terms of the Memorandum of
Settlement.
7. Mr. Nariman urged that in accordance with
the terms of the Memorandum of Settlement
the learned Subordinate Judge, Kakinada, was
directed to determine the compensation
payable to the appellant herein for the land
acquired, in accordance with the provisions
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of the Land Acquisition Act, 1894. Certain
other benefits to which the appellant was
entitled was also indicated in the said
order. However, what was of utmost
importance was the condition that the
compensation which was to be determined by
the learned Subordinate Judge, Kakinada,
would have to be paid to the appellant
within a period of 8 weeks thereafter, in
default the acquisition would stand set
aside and the rights and liabilities of the
parties would be determined in accordance
with law. Mr. Nariman submitted that in
accordance with the terms of the Memorandum
of Settlement the learned Subordinate Judge
determined the compensation payable to the
appellant on 23.1.2003 and payment of the
compensation amount, as per the
determination of the value of the acquired
lands by the Subordinate Judge, was to be
made on or before 23.3.2003. However, even
when the Special Leave Petition was filed on
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2.3.2007, no deposit had been made in terms
of the Memorandum of Settlement.
8. Mr. Nariman submitted that since the
acquisition itself stood set aside in terms
of the Memorandum of Settlement, the only
course left open to the respondents was to
issue a fresh Notification for acquisition
of the lands in question and to proceed in
accordance with law, thereafter, in
computing the compensation payable for the
land on account of such acquisition. Mr.
Nariman also submitted that the High Court
had acted beyond its jurisdiction and
authority in unilaterally extending the time
for depositing the compensation amount,
since according to the terms of the same
Memorandum of Settlement the acquisition
proceedings had been set aside.
9. On the other hand, Mr. L. Nageshwar Rao,
learned Senior Advocate, submitted that
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attempts had been made to deposit the
compensation amount with the Divisional
Officer, Kakinada, by sending Demand Drafts
for amounts of Rs.2,13,87,500/- and
Rs.11,14,34,033. An application was also
moved on behalf of the respondent State
before the Second Additional Senior Civil
Judge, Kakinada, seeking permission to
deposit the said amount, but such prayer was
rejected on 22.8.2007, on the ground that
the Special Leave Petition was pending
before this Court. A Civil Revision Petition
filed against the said order is still
pending decision in the High Court. Mr. Rao
submitted that ultimately by an order dated
11.10.2007 the High Court granted leave to
the State authorities to deposit the
decretal amount before the Second Additional
Senior Civil Judge, Kakinada, without
prejudice to the rights and contentions of
the parties. Pursuant thereto, the amount
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was said to have been deposited on
22.10.2007.
10. It was submitted that admittedly there was a
delay in making the deposit in terms of the
Memorandum of Settlement which formed the
basis of the order dated 1.9.1992 passed by
this Court in Civil Appeal No. 3476 of 1992
filed by the Andhra Pradesh Dairy
Development Corporation, but such delay was
not intentional as various proceedings
intervened in the meantime. Mr. Rao
submitted that in the appeal, being F.A.
No.836 of 2003, filed by Andhra Pradesh
Dairy Development Corporation, the
respondent No.2 herein, an interim order was
passed by the High Court on 23rd April, 2003,
staying the operation of the Order dated 23rd
January, 2003, passed by the Principal
Senior Civil Judge, Kakinada, fixing the
market value of the acquired land at
Rs.800/- per square yard as on 7.2.1991,
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which continued to be operative till the
appeal itself was dismissed by the High
Court on 9.6.2006. It was also submitted
that immediately after the pronouncement of
the Judgment by the High Court, steps were
taken to deposit the compensation amount as
per the Memorandum of Settlement by making
an application before the Second Additional
Senior Civil Judge, Kakinada, praying for
leave to make such deposit in the execution
proceedings which had been commenced in the
meantime. While granting such prayer, the
High Court directed that stay of the
execution would be subject to the condition
of the respondent herein depositing 1/4th of
the enhanced compensation in two equal
instalments within four months from the date
of the order, failing which the said
petition would stand dismissed. Since the
respondents were unable to deposit the said
amount they filed an application before the
High Court seeking extension of time to make
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such deposit. On the other hand, the
appellant herein filed Writ Petition No.6832
of 2003 for restitution of the possession of
the acquired land. However, the High Court
by its order dated 30.4.2003 dismissed the
Writ Petition and granted the respondents a
further period of two months for making
payment of Rs.2 crores in instalments within
a period of two months and stayed further
proceedings pursuant to the order dated
23.1.2003 passed by the Principal Senior
Civil Judge, Kakinada.
11. Mr. Rao submitted that in view of the
aforesaid proceedings and the interim order
staying the execution proceedings, the
respondents were unable to keep to the
timing in making the deposit. Mr. Rao
submitted that keeping in mind all the
aforesaid facts, the High Court had rightly
not bound itself to the time period
stipulated in the Memorandum of Settlement
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for depositing the compensation amount. Mr.
Rao urged that if the submission made on
behalf of the appellant was to be accepted,
the only effect will be that a fresh
Notification under Section 4(1) of the 1894
Act would have to be issued and the date for
calculation of the compensation amount would
have to be taken from the fresh date of
publication, which was likely to result in a
substantial enhancement of the compensation
payable for acquisition of the land in
question.
12. On a careful consideration of the
submissions made on behalf of the respective
parties, it is clear that the only question
which we are called upon to decide is
whether having regard to the conditions
imposed in the Memorandum of Settlement, the
acquisition proceedings would stand set
aside in view of the default committed by
the State and its authorities in depositing
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the amount awarded within the time
stipulated in the Settlement.
13. Admittedly, the order passed by the Second
Senior Civil Judge, Kakinada, was to be the
basis of the compensation to be awarded to
the appellants herein. However, the said
order also came to be challenged in the High
Court and a stay was also granted to the
execution thereof, which lasted till the
appeal was finally dismissed on 9.6.2006. It
is only after the dismissal of the appeal
and the vacation of the stay order that the
respondents began to take steps for deposit
of the compensation amount as per the
Memorandum of Settlement. It is, therefore,
obvious that because of intervening
circumstances, the time schedule
contemplated in the Memorandum of Settlement
for deposit of the compensation amount by
the respondent stood disturbed. Because of
the stay order granted by the High Court,
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the respondents were released from the
obligation of making such deposit within
eight weeks from the date on which the
compensation was determined by the learned
Subordinate Judge, Kakinada (Second
Additional Senior Civil Judge). In our view,
once the respondents stood released of the
obligation of making the deposit within the
time specified in the Memorandum of
Settlement by the orders of Court, it will
no longer be available to the appellant to
claim that because of the default in making
the deposit, the acquisition should stand
set aside in terms of the Memorandum of
Settlement. The questions posed by Mr.
Nariman at the beginning of the submissions,
have therefore, to be answered against the
appellant and in favour of the respondent.
Firstly, the acquisition proceeding does not
stand set aside on account of the default on
the part of the respondents in making the
deposit within 8 weeks from the
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determination of the value of the acquired
land by the learned Subordinate Judge,
Kakinada. Consequentially, even the second
question raised by Mr. Nariman that the High
Court had acted without jurisdiction in
extending the time for making the deposit
cannot also be sustained.
14. We, therefore, see no reason to interfere
with the impugned judgment of the High Court
and the appeal is accordingly dismissed.
Since, the deposits are said to have already
been made pursuant to the permission granted
by the High Court, the claimants to the said
compensation will be entitled to withdraw
the same upon proper identification.
15. There will be no order as to costs.
……………………………………….J.
(ALTAMAS KABIR)
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……………………………………….J.
(MARKANDEY KATJU)
New Delhi
Dated 3.12.2008