State Of Gujarat vs Patel Kodarbhai Mohanbhai
2021 Latest Caselaw 16759 Guj

      C/FA/479/2021                                       IA ORDER DATED: 26/10/2021


            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

         CIVIL APPLICATION (FOR JOINING PARTY) NO. 1 of 2021
                   In R/FIRST APPEAL NO. 479 of 2021
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SONATA CERAMICA PVT LTD THROUGH DIRECTOR JAYANTIBHAI RAMANBHAI PATEL Versus STATE OF GUJARAT ========================================================== Appearance:

for the PETITIONER(s) No. MR DEVANG NANAVATI, SR. ADVOCATE WITH MR VANDAN K BAXI for the PETITIONER(s) No. MS PRACHITI V SHAH for the PETITIONER(s) No. NANAVATI & NANAVATI for the PETITIONER(s) No. MR MANAN MEHTA, AGP for the RESPONDENT(s) No. MR VIKRAM J THAKOR for the RESPONDENT(s) No. ========================================================== CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA

Date : /10/2021

CAV IA ORDER

Heard learned senior advocate Mr.Devang Nanavati with learned advocate Mr.Vandan Baxi for Nanavati & Nanavati for the applicant, learned Assistant Government Pleader Mr.Manan Mehta for respondent Nos.1 to 3 and learned advocate Mr.Vikram Thakor for respondent No.4.

2. The applicant herein seeks to implead himself as party respondent No.4 in the First Appeal. The further prayer is to stay the operation and implementation of order dated 16th February, 2021 as modified by order dated 26th February, 2021, whereby respondent No.4 is permitted to withdraw 50% of the amount deposited towards land acquisition compensation. An alternative prayer is advanced seeking to direct respondent No.4 to deposit back 50% of the enhanced compensation, in the event such amount is withdrawn by respondent No.4.

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3. The applicant herein, not party to the proceedings of First Appeal, which is preferred by the State against the judgment and award of the Reference Court enhancing the compensation in favour of respondent No.4, has come with the case that said respondent No.4 was appointed as Director in the applicant company named Sonata Ceramica Private Limited in the year 2002. The applicant stated that he is also Director of the said company. Respondent No.4 had purchased agricultural land bearing Survey No.270 Paiki 6, old Survey No.220 and 222, admeasuring 9106 Sq. Mtrs. situated at Village Hajipur, Himmatnagar, Sabarkantha, by registered sale deed dated 08th October, 2003.

3.1 It is stated that the said land was purchased for the use of applicant company. Respondent No.4 had applied for conversion of the said land in to non-agriculture and the District Development Officer granted the N.A. Permission by order dated 19th January, 2004 for utilising the land for the specific purpose of ceramic business. It is further stated by the applicant that in or around 2008, respondent authorities acquired 2220 Sq. Mtrs. of land cutting across the land in question, for that the compensation to the tune of Rs.07,30,736/- came to be calculated, which was accepted by respondent No.4 under protest.

3.2 Respondent No.4 filed reference proceedings under Section 18 of the Land Acquisition Act, 1894 for enhancement of the compensation. Land Reference

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Case No.7 of 2011 was one of the four reference cases filed by respondent No.4, decided by the court of learned Principal Senior Civil Judge, Sabarkantha at Himmatnagar, by common judgment and award in LAR Case Nos.4-7 of 2011.

3.3 It is stated that Revenue Entry No.3824 dated 24th April, 2014 of his family members was got mutated by respondent No.4 in respect of the land in question. In the year 2013, respondent No.4 resigned from the post of Director of the applicant - Sonata Ceramica Private Limited. Resignation letter is produced on record. It is further mentioned that since the land was originally purchased by him for use of the company, respondent No.4 and his family members entered into five sale deeds, all dated 14 th July, 2014 in respect of their 20% share each in the land. By virtue of the said sale deeds, the land came to be sold to the applicant company, thus stood transferred rights, title and interest over the said land to the applicant company. It is the say of the applicant that since the enhanced compensation came to be granted subsequent to the aforesaid sale deeds, applicant company exercises all rights over the enhanced compensation.

3.4 Reference Case No.7 of 2011 along with other cases was allowed as per common judgment and award to grant the total compensation of Rs.03,501.53 per Sq. Mtrs. From Rs.211/- per Sq. Mtrs. awarded by the Land Acquisition Officer, thus additionally granting Rs.03,290.53 per Sq. Mtrs. together with statutory

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benefits, solatim and interest.

3.5 The present application came to be opposed by respondent No.4 who, in his affidavit-in-reply dated 24th March, 2021 inter alia contending that the applicant was not a party before the Land Acquisition Officer, nor before the Reference Court, therefore, has no locus standi for impleadment in the First Appeal. It was contended that the applicant had no concern with the compensation as the acquisition has taken place before execution of the sale deeds which were of 14th July, 2014. It was submitted that the applicant had filed application under Section 30 of the Land Acquisition Act for apportionment, which was also not maintainable.

4. Learned advocate for the applicant relied on several decision of the Supreme Court to submit that even though the right to challenge the acquisition proceedings is not available to the subsequent purchaser of the land, such person has the right to receive compensation.

4.1 On the other hand, learned advocate for the respondent No.4 relied on the following decisions - Ram Prakash Agarwal v. Gopi Krishan [(2013) 11 SCC 296], Prayag Upnivesh Awas Evam Nirman Sahakari Samiti Ltd. v. Allahabad Vikas Pradhikaran [(2003) 5 SCC 561], Shyamali Das v. Illa Chowdhry [(2006) 12 SCC 300], Shiv Kumar v. Union of India [(2019) 10 SCC 229], State of Haryana v. Northern Indian Glass Industries Limited [(2015) 15 SCC 588] and Kalra Properties (P) Ltd. (supra) and submitted on the

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basis thereof that the applicant had not made any application before the Land Acquisition Officer for making reference under Section 30 of the Act, therefore he cannot get himself impleaded directly before the Reference Court.

4.2 Dealing with the decisions relied on by respondent No.4 at this stage itself, in Ram Prakash Agarwal (supra) Supreme Court held that direct impleadment of or application for apportionment of compensation by a third party in the pending Reference proceedings would not be permissible and that the aggrieved party may maintain application before the Land Acquisition Officer for Reference under Section 18 or under Section 30 of the Act.

4.2.1 In Prayag Upnivesh Awas Evam Nirman Sahakari Samiti Ltd. (supra), the Apex Court held that the Reference Court had no jurisdiction to decide the matter not referred to it and that it has no power to convert Reference under Section 30 into one under Section 18.

4.2.2 In Shyamali Das (supra) it was held that the appellant claiming title to the acquired land was not interested person within the meaning of Section 3(b) of the Act and his application for impleadment of the Reference proceeding was not maintainable.

4.2.3 Decision in Shiv Kumar (supra) is in the context of the provisions of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, stating

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that purchasers subsequent to Section 4 Notification are not given right to receive higher compensation. In State of Haryana (supra), it was observed that conduct of a party is relevant consideration for considering entitlement to be joined as a party.

4.3 While none of the decisions pressed into service by respondent No.4 operate on or apply to the issue involved here, the decisions on the aspect of rights and entitlement of the subsequent purchaser in the acquisition proceedings may be surveyed.

5. In U.P. Jal Nigam v. Kalra Properties [(1996) 3 SCC 124], the lands were acquired by issuing Notifications under Section 4 and under Section 6 of the Land Acquisition Proceedings in the year 1973 and the award was also passed in the year 1973. Respondent - Kalra Properties purchased the acquired land by sale deed dated 03rd February, 1989, subsequent to the acquisition. The Supreme Court observed that it is settled that after Notification under Section 4(1) is published, any encumbrance created by the owner does not bind the government and the purchaser does not acquire any title in the property, however it hold that the respondent would be entitled to receive the compensation, stating thus.

"The next question is: whether the respondent is entitled to compensation and, if so, from what date and at what rate? The original owner has the right to the compensation under Section 23(1) of the Act.

Consequently, though the respondent acquired no title to the land, at best he would be entitled to step into the shoes of the owner and claim payment of the compensation, but according to the

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provisions of the Act. It is settled law that the price prevailing as on the date of the publication of the notification under Section 4(1) is the price to which the owner or person who has an interest in the land is entitled to. Therefore, the purchaser as a person interested in the compensation, since he steps into the shoes of erstwhile owner, is entitled to claim compensation." (Para 4)

5.1 In Meera Sahni v. Lieutenant Governor of Delhi [(2008) 9 SCC 177], while holding that the subsequent purchaser of the land cannot challenge the acquisition proceedings, it was observed in paragraph No.21 that he would be entitled to get the compensation. The same proposition is laid down in Ajay Krishan Singhal v. Union of India [(1996) 10 SCC 721].

5.2 The decision in Jal Sansthan v. Krishna Kumari [2016 SCC Online All 2944] was referred to in which the decision in the Kalra Properties (P) Ltd. (supra) was relied on to reiterate the proposition that the purchaser can claim compensation payable to the original owner of the land. In Soran Singh v. Collector [2018 SCC Online All 5936] the High Court held that right for compensation would include enhancement in the compensation also.

5.3 The proposition emanates from the aforesaid decisions is that the subsequent purchaser has no right to challenge the acquisition proceedings. However as far as the compensation aspect is concerned, would step into the shoe of the erstwhile owner. As a subsequent purchaser, the applicant may have the stake in compensation, and enhanced compensation in accordance with law.

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5.4 The subsequent purchaser will fall within the expression 'person interested' as defined in Section 3(b) of the Land Acquisition Act to claim the compensation to be awarded for the land in acquisition under the Act. On such considerations and the right conferred in law, the applicant can be said to be a person who could legitimately in law be permitted to be impleaded as party in the proceedings of the First Appeal, he being the purchaser of the land.

5.5 Having noticed the proposition of law in respect of the entitlement of the subsequent purchaser in the land acquisition proceedings, reverting back to the facts of the case, the acquisition is of the year 2003, award was made in the year 2010. It is the case that land in question was purchased for the purposes of and for utilisation of the company, of which the applicant and respondent No.4 are Directors. Respondent No.4 resigned from Directorship on 31st March, 2013.

5.6 The sale deed in favour of the applicant company by the family members of respondent No.4 is subsequent to the acquisition proceedings. It is dated 14th July, 2014. Copy of the sale deed is on record of the application. It could be gathered from the contents thereof that the same include the acquired portion of land. The applicant is a Director of the company.

5.7 The applicant in his capacity of purchaser of the land, even though subsequent to the

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acquisition, would be entitled to be joined as party. They could be therefore said to be proper and necessary party, to be permitted to be joined in the proceedings of the First Appeal of the State which is in respect of compensation and enhancement thereof.

6. Therefore, the prayer in the application seeking impleadment deserves to be granted.

6.1 As far as the second part of the prayer is concerned, it relates to the orders passed on 16 th February, 2021 read with order dated 26th February, 2021. These orders are passed by the co-ordinate Bench.

6.2 In the First Appeal preferred by the State wherein the applicant is to be impleaded, at the time of admission thereof on 16th February, 2021, following order was passed in Civil Application.

"Rule returnable forthwith.

Learned advocate Mr.Vikram Thakor, service of notice of rule on behalf of the respective respondents - claimants.

It is stated that out of the amount deposited by the appellant - applicant, 50% of the amount has been withdrawn by the claimants after due verification. The remaining 50% amount shall be invested in cumulative fixed deposit in any nationalized bank initially for the period of five years, to be renewed from time to time till final disposal of the appeals. The claimants shall not be allowed premature withdrawal thereof or to raise any borrowings on the basis of such investment. Original of the Fixed Deposit may be retained in the custody of the Reference Court. Civil Applications for stay accordingly are allowed. Rule is made absolute."

6.3 The said order was thereafter corrected as per order dated 26th February, 2021 passed upon a Note

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for Speaking to Minutes. The said order reads as under.

"Perused the Note for Speaking to Minutes dated 24.2.2021.

In paragraph No.3, the words "it is stated that out of the amount deposited by the appellant-applicant, 50% of the amount has been withdrawn by claimants after due verification" shall be substituted by the words "it is stated that entire amount is deposited by the appellant-applicant. In view of said statement 50% amount, out of deposited amount, is directed to be paid to the claimants after due verification."

Rest of the order portion shall remain the same.

The note for speaking to minutes stands disposed of accordingly.

The Registry to communicate this order through email."

6.4 The second prayer in the present Civil Application is with reference to the said orders and in the nature of seeking modification thereof. Such prayer cannot be considered by this Court in the present Civil Application.

7. In view of foregoing discussion, the following order is passed, allowing the application in part.

(i) The applicant is permitted to be joined as party respondent No.4 in First Appeal No.479 of 2021. The present application is allowed to the extent of granting of the said prayer;

(ii) As far as the second part of the prayer including the alternative prayer is concerned, granting the same wholly or in part would tantamount

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to modification in the said order dated 16th February, 2021 read with order dated 26th February, 2021;

(iii) In that view, for the said part of the prayer, it would be open for the applicant to move appropriate application on or before 22nd November, 2021 before the appropriate Bench;

(iv) In order that in such proceedings which may be filed, both the parties can raise their contentions effectively, status quo shall be granted with regard to the disbursement of the amount, to be subject to the orders which may be passed in such proceeding;

(v) This Court has not gone into the aspect of grantability or otherwise of the second part of the prayer as above.

FURTHER ORDER

At this stage, learned advocate Mr.Vikram Thakor for the respondent prays for stay of the aforesaid order.

Having regard to the reasons recorded and the nature of directions issued, the Court does not see any good reason to grant the request. The same is rejected.

(N.V.ANJARIA, J) ANUP