1 IN THE HIGH COURT OF KARNATAKA, KALABURAGI BENCH DATED THIS THE 28TH DAY OF MARCH, 2025 PRESENT THE HON'BLE JUSTICE R DEVDAS AND THE HON'BLE JUSTICE G BASAVARAJA WRIT APPEAL NO.200188 OF 2021 (LA-RES) BETWEEN SHIVABASAPPA S/O SHIVARAYA AGE 63 YEARS, OCC. AGRICULTURE, R/O GOUDGAON, TQ AFZALPUR, DIST KALABURAGI ...APPELLANT (BY SRI. HARSHAVARDHAN R MALIPATIL., ADVOCATE) AND 1 . KARNATAKA NEERAVARI NIGAM REGD OFFICE, 4TH FLOOR, COFFEE BOARD, BUILDING, AMBEDKAR ROAD, BANGALORE-02 NOW REPRESENTED BY ITS THE EXECUTIVE ENGINEER KNNL IPC DIVISION-1, KALABURAGI DIST KALABURAGI-585102 2 . THE STATE THROUGH SPECIAL LAND ACQUISITION OFFICER FOR M AND MIP R 2 KALABURAGI-585102 3 . THE DEPUTY COMMISSIONER MINI VIDHANA SOUDHA KALABURAGI-585102. …….RESPONDENTS (BY SRI.NAVEEN R NATH., SR. COUNSEL A/W SRI. SANJEEV KUMAR C PATIL, SRI. SUDARSHAN M., MS. LALIT MOHINI BHAT, SRI. ABHIMANYU VERMA., ADVOCATES FOR R1 SRI. MALLIKARJUN C BASAREDDY, GA FOR R2 & R3) THIS WRIT APPEAL IS FILED U/S.4 OF THE KARNATAKA HIGH COURT ACT, PRAYING TO ALLOW THE PRESENT WRIT APPEAL BY SETTING ASIDE THE ORDER OF THE LEARNED SINGLE JUDGE IN W.P.NO.200605/2019 DATED 15.11.2021 AND CONSEQUENTLY DISMISS, THE WRIT PETITION, IN THE INTEREST OF JUSTICE AND EQUITY AND ETC. THIS WRIT APPEAL HAVING BEEN HEARD AND RESERVED ON 17.01.2025 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY, R.DEVDAS.J., DELIVERED THE FOLLOWING: CORAM: HON'BLE MR JUSTICE R DEVDAS AND HON'BLE MR JUSTICE G BASAVARAJA CAV JUDGMENT (PER: HON'BLE MR JUSTICE R DEVDAS) The appellant is aggrieved by the impugned order passed by the learned Single Judge in W.P.No.200605/2019 dated 15.11.2021. The writ petition was filed by Karnataka Neeravari Nigam Limited (for short hereinafter referred to as ‘KNNL’) 3 assailing the order dated 06.10.2017 passed by the learned I Addl. District Judge, Kalaburagi in LAC Appeal No.8/2017, whereby the judgment and award passed by the Reference Court in LAC No.670/2007 was set aside and the compensation was enhanced and fixed at the rate of Rs.2,10,260/- per acre along with interest and statutory benefits as per the relevant law and rules. The Reference Court had enhanced the compensation to Rs.42,600/- per acre. Though objections were raised at the hands of the appellant-claimant regarding the maintainability of the writ petition at the hands of KNNL, which was not a party to the proceedings either before the Reference Court or the Appellate Court, the learned Single Judge held that the decisions relied upon by the appellant herein are not applicable to the facts and circumstances of the case. It was held that in the said decisions, the lands were either not acquired under the Land Acquisition Act and/or were cases where the lands acquired for the public purpose were subsequently alienated in favour of private parties. The writ petition was allowed and the matter was remitted back to the Appellate Court for fresh consideration while also directing the KNNL to deposit 25% of the 4 compensation amount awarded in LAC Appeal No.8/2017, before the Appellate Court. 2. Sri Harshavardhan R. Malipatil, learned counsel appearing for the appellant has raised the following contentions regarding maintainability of the writ petition at the hands of the respondent KNNL: I) Regarding maintainability of writ petition: 1) That Sec. 54(2) of the Land Acquisition Act 1894 (LA Act) provides for second appeal against the award of first appellate court. 2) UP Awas Evam Vikas Parishad vs Gyan Devi (1995) 2 SCC
326, (Constitution Bench) at paragraph 22 and conclusion at paragraph 24 (7) on page 160 and 161 of KNNL Compilation, procedure to challenge enhancement by reference court is held to be by filing an appeal. 3) Neyvely Lignite vs Spl. Tahasildar (1995) 1 SCC 221, (3Judge Bench) at para 15 has remanded the matters to High Court and directed that the WPs filed against awards to be treated as appeals and they be heard. 5 4) Shrachi Burdwan vs State AIR Online 2021 SC 844, para 9, at pg.37 of Appellant compilation dated 05-11-2024, writ petition not to be entertained when appeal remedy available for beneficiary. 5) The present WP is filed by the KNNL represented by Executive Engineer which is not maintainable since Sec. 21 of Companies Act 2013 provides any proceedings by against the companies has to be signed by key managerial personal. II) Regarding KNNL not being the Beneficiary and part of Government: 1) That is part of Government working under Ministry of Water Resource pg.76 (Annexure R1) of WA, which is represented. 2) Government proceedings dated 11-04-2005 Annexure A to compilation dated 04-11-2024 only administrative control of project transferred. 3) Respondent Spl. LAO is part of office of KNNL using his letter head and designated as SLAO, KNNL, Kalaburagi, at pg. 133, 134, 148, 149 6 etc. of WA. Hence officer of KNNL participated in proceedings and KNNL was aware of awards. 4) Beneficiary of acquisition is one for whose benefit land is acquired, admittedly in this case land acquired for benefit of Government, Sec. 20 (a) and (c) of LA Act, Karnataka Amendment makes clear that Deputy Commissioner is required to be given notice for acquisition is for Government. 5) Satish Kumar Gupta vs State of Haryana AIR 2017 SC 1072 at para 2,9 and 18, held that subsequent transferee has no locus to challenge award. 6) Peerappa Harijan vs State (2015) 10 SCC 469 at para 63 and 7) 65 (page 227 of KNNL compilation) held that subsequent allottee is not a beneficiary hence dismissal of WP upheld. 8) This Hon’ble Court in MFA No.200925 of 2019 and connected cases at para 7 at pg. 36 of Appellant compilation dated 02-12-2024 has set-aside award against NHAI on the count that 7 the 4(1) and 6 (1) notification was not issued at their instance. 9) Learned Single Judge in MSA No. 200056 of 2018 Annappa vs The Spl. LAO at para 7 has held that KNNL is not a necessary party based on Satish Kumar Gupta case. 3. The learned counsel for the appellant would further contend that the respondent-KNNL had approached the Hon’ble Supreme Court in Civil Appeals No.6159/2021 and 2591/2022. Civil Appeal No.6159/2021 where the KNNL had raised the ground of non-joinder of necessary party before the Reference Court, the plea was not accepted and the Civil Appeal was dismissed, while holding that, in similarly placed matters the respondents had satisfied the enhanced compensation. Civil Appeal No.2591/2022 was disposed of while directing this court to consider the effect of satisfaction of similar awards at the hands of the respondents. The learned counsel would therefore submit that even if this Court were to hold that the writ petition is maintainable, nevertheless, this Court is required to consider as to whether the respondents have satisfied similar enhanced 8 awards, as directed by the Hon’ble Supreme Court, to ensure uniformity in payment of compensation. It is also contended that the Hon’ble Supreme Court in Civil Appeal No.2694/2023 and connected matters, has held that the State and its instrumentalities cannot be permitted to adopt the method of pick and choose, in the matter of challenging awards. 4. Per contra, learned Senior Counsel Sri Naveen.R.Nath, appearing for the respondent - KNNL submitted that in Neyvely Lignite Corporation Ltd., vs. Special Tahasildar (Land Acquisition)1 as well as the Constitutional Bench judgment in U.P.Awas Evam Vikas Parishad vs. Gyan Devi2, the Hon’ble Apex Court has held, having regard to the definition of the term “Person interested” in Section 3(b) of the Land Acquisition Act and Section 50(2) of the Act that the beneficiary, be it a local authority or company or registered co- operative society or statutory authority is a person interested in the matter of determination of just and proper compensation for the acquired land and is an aggrieved person. The beneficiary 1 (1995) 1 SCC 221 2 (1995) 2 SCC 326 9 has the right to be heard by the Collector or the Court. If compensation is enhanced, such beneficiary/interested person is entitled to canvass its correctness either by filing an appeal or by filing the writ petition under Article 226 and assail its legality or correctness. It was held that these are valuable and salutary rights. It was also pointed out that in paragraph No.24 and paragraphs No.48 to 56 in U.P.Awas Evam Vikas Parishad (supra) has summed up circumstances under which the local authority/company/beneficiary has a right to appear in the acquisition proceedings before the Collector and the Reference Court and adduce evidence for the purpose of determining the amount of compensation. It was also held that the said right carried with it right to be given adequate notice by the Collector as well as the Reference Court before whom acquisition proceedings are pending. It was also held that the proviso to Section 50(2) only precludes the local authority from seeking a reference, but it does not deprive the local authority which feels aggrieved by the determination of compensation by the Collector of the Reference Court to invoke the remedy under Article 226 of the Constitution as well as the remedies available under the LA 10 Act. It was also held since a company for whom the land being acquired has the same right as a local authority under Section 50(2) of the Act, whatever has been said with regard to a local authority would apply to a company also. 5. Moreover, it is submitted that in many such matters where learned Counsel Sri Harshavardan R.Malipatil, had appeared for the claimants, learned Counsel has made concessions on behalf of the claimants and the respondent-KNNL was permitted to contest the matter. However, the petitioners or the learned Counsel for the petitioners should not be permitted to pick and choose, inasmuch as make concessions in few cases and permit the respondent-KNNL to contest the matter and in other such cases like the one on hand, the participation of respondent-KNNL is seriously opposed. It is therefore submitted by the learned Senior Counsel that the issue as to whether respondent-KNNL is a beneficiary or person interested which has a right to participate in the proceedings since it is paying the compensation, should be decided without leaving it to the mercy of the claimants to pick and choose the 11 matters in which respondent-KNNL should be permitted to contest the matter. 6. The learned Senior Counsel appearing for the respondent-KNNL would draw the attention of this Court to the judgment of the Apex Court in the case of Neyvely Lignite Corporation Ltd. (supra), more particularly paragraph Nos.12 and 13 to contend that the consistent thread, which was noticed in the said decision, commencing from Himalayan Tiles and Marble (P) Ltd., Vs. Francis Victor Coutinho3, is that the beneficiary i.e., local authority or Company or a co-operative society registered under the state law or statutory authority is a person interested to determine just and proper compensation for the acquired land and is an aggrieved person. It was held that if such an entity is not made a party, it is entitled to seek leave of the Court and file an appeal against the enhanced award and decree of the Civil Court under Section 26 or of the judgment and decree under Section 54 or is entitled to file writ petition under Article 226 and assail its legality or correctness. It was 3 (1980) 3 SCC 223 12 held that the language of Order I Rule 10 of the Code of Civil Procedure, in the absence of the beneficiary who ultimately is to bear the higher compensation, no complete and effectual determination of binding just and proper compensation to the acquired land could be made. It was therefore held that it is concomitantly a proper party if not a necessary party to the proceeding under Order 1 Rule 10 of the Code of Civil Procedure. The denial of the right to a person interested is in negation of fair and just procedure offending Article 14 of the Constitution. 7. In order to substantiate his contention, the learned Senior Counsel drew the attention of this Court to the Memorandum of Articles of Association of KNNL which provides that the main objects to be pursued by the Company on its incorporation are to build, operate and maintain irrigation projects and the works of Command Area Development Authority (CADA) in any part of the State of Karnataka (excluding the Upper Krishna Project being built by the Krishna Bhagya Jala Nigam Limited). It was pointed out that KNNL is a Government Company. By Government Order No.WRD 29 MTZ 2004, Bangalore dated 18.04.2005 the Amarja Medium 13 Irrigation Project under construction was transferred to KNNL so that the said project comes under the jurisdiction of the Nigam with immediate effect, with an instruction to Nigam that all the works of the said project shall be completed during the year 2005-06. All the assets and liabilities relating to the project stood transferred to KNNL from the day and date on which the order was issued. It was pointed out that the Apex Court in Civil Appeal (D) No.13231/2023 arising out of SLP (C) No.13065/2022 in the case of Executive Engineer, KNNL Vs. Subhashchandra and Others4 dated 12.03.2024, has noticed that KNNL has been entrusted with the assignment to plan, execute and operate drinking water and irrigation projects and schemes in the State of Karnataka. About 13000 acres of land was acquired by the State of Karnataka for the Corporation for various projects like 1) Bennethora Project, 2) Gandori Nala Project, 3) Lower Mullamari Project and 4) Amarja Project. Although it was contended at the hands of the claimants that some matters pertaining to some of the notifications referred to before the Apex Court have attained finality, having reached the 4 (2024) SCC OnLine SC 306 14 Apex Court and the respondent-KNNL have paid compensation in many cases, and therefore, the matters should not be remanded, nevertheless the matters were remanded back to this Court. It was directed that since earlier too, many such matters were remanded by the Apex Court for consideration by this Court, however directions were issued to this Court to take a holistic view pertaining to the subject acquisition, at least project wise and make an endeavour to infuse uniformity in the matter of award of compensation to the extent it is possible. The learned Senior Counsel would therefore submit that it would be futile for the respondent-claimants to contend that the writ petition filed at the hands of the respondent-KNNL is not maintainable. 8. Heard learned Counsel Sri Harshavardan R.Malipatil, for the appellant and learned Senior Counsel Sri Naveen R.Nath, appearing for the respondent-KNNL and learned Government Advocate Sri Mallikarjun C.Basareddy for the respondent-State and perused the appeal papers. 15 9. Since vehement contentions are raised by the appellant regarding the maintainability of the writ petition filed at the hands of the respondent-KNNL and since learned Senior Counsel appearing for the respondent-KNNL also sought for a decision on the said issue, this Court would take up the said issue for consideration. Both the sides have placed reliance on many judgments of the Hon'ble Supreme Court which include Neyvely Lignite Corporation Ltd., (supra); U.P.Awas Avam Vikas Parishad (supra) which have exclusively considered the issue regarding appeals or petitions filed at the hands of entities which claimed to be beneficiary or person interested, having regard to the definition in Section 3(b) of the Land Acquisition Act and Section 50(2) of the Act. The Apex Court, in U.P. Avas Avam Vikas Parishad Adhiniyam was basically considering the question whether the Land Acquisition Act confers any right on the Board (beneficiary) to participate at the stage of determination of compensation for the land which was acquired under Section 55 of the U.P. Avas Avam Vikas Parishad Adhiniyam, read with the provisions of the Land Acquisition Act, as modified by the Schedule of the U.P.Act. For that purpose, the provisions 16 contained in Section 50 of the Land Acquisition Act was considered by the Apex Court. The Apex Court noticed and answered the question as to why is it so that no provision is made for giving any notice or hearing to the acquiring body for whom the land is acquired, while the Collector is determining the compensation. It was noticed that in sub-section (2) of Section 50 of Land Acquisition Act and the proviso therein enables the local authority or company to appear and adduce evidence for the purpose of determining the amount of compensation, but the local authority or company is not entitled to demand a reference under Section 18. Having regard to the provisions contained in Section 50 of the Land Acquisition Act, it was held that the absence of any provision for impleading the acquiring body appears to be based on equity and justice. A company or local authority seeking acquisition of land displacing an individual is concerned more with the land. Compensation no doubt has to be paid by it but the legislature being aware that its determination is on the date the notification is issued under Section 4 of the Land Acquisition Act and the long delay it takes in court, it considered it just and proper to exclude impleadment of 17 acquiring body as it was not only unnecessary but even unfair as it might result in delay to the prejudice of the owner of the land. However, the Apex Court also noticed that there is a difference between the rights of the acquiring body/beneficiary in contesting the matter while determination of compensation, when compared to the appellate remedy available when the Reference Court enhances the compensation. 10. In Himalayan Tiles and Marbles (supra), it was held that that the term ‘person interested’ is an inclusive definition and must be liberally construed so as to embrace all persons who may be directly or indirectly interested either in the title to the land or to the quantum of compensation. It was held that since under the agreement the company has to pay the compensation, it was most certainly interested in seeing that a proper quantum of compensation was fixed so that the company may not have to pay a very heavy amount of money. For this purpose, the company would undoubtedly adduce evidence on the question of quantum of compensation. It noticed that similar view was taken earlier by the Apex Court in the case of 18 Sundarlal Vs. Paramsukhdas5; Hindustan Sanitary ware and Industries Ltd. Vs. State of Haryana6; Comilla Electric Supply Ltd. Vs. East Bengal Bank Ltd7; M.Kuppuswamy Vs. Special Tahsildar8; State of Orissa Vs. Amarandra Pratap Singh9. The Apex Court therefore held that this view accords with the principles of equity, justice and good conscience. In a rhetoric, “how can it be said that a person for whose benefit the land is acquired and who is to pay the compensation is not a person interested even though its stake may be extremely vital?”, the issue was answered in favour of the Company. In Neyvely Lignite Corporation (supra), a Three Judges Bench of the Apex Court considered cases where the Corporation, for whose benefit the acquisition notifications were issued, sought to implead itself in the Reference cases before the civil court to adduce evidence for fixation of the proper compensation. It was noticed that a consistent thread that runs through all the decision of the Apex 5 AIR 1968 SC 366 6 AIR 1972 P & H 59 7 AIR 1939 Cal. 669 8 (1967) 1 MLJ 329 9 AIR 1967 Ors. 180 19 Court starting from Himalayan Tiles and Marbles case, was that the beneficiary that is the local authority, a company, a cooperative society registered under the relevant State Act or the statutory authority is a person interested to determine just and proper compensation for the acquired land and is an aggrieved person. If the compensation is enhanced it is entitled to canvass its correctness by filing an appeal or defend the award of the Collector. If it is not made a party, it is entitled to seek leave of the court and to file an appeal against the enhanced award and decree of the civil court under Section 26 or of the judgment and decree under Section 54 and or it is entitled to file writ petition under Article 226 and assail its legality or correctness. 11. Here, it is sought to be contended by the learned Counsel for the appellant-landowners that the Apex Court has clearly held that a writ petition under Article 226 is held maintainable, if the award made under Section 11 is vitiated by fraud, collusion or corruption. It was held that the beneficiary is entitled to challenge it in the writ petition apart from the settled law that the conduct of the Collector or civil judge is amenable 20 to disciplinary enquiry or appropriate action. However, no such allegation is made by the petitioner company and therefore, it is not entitled to file a writ petition. 12. It is very necessary to notice the fact that the petitioner company is not the beneficiary for whose benefit the acquisition notifications were issued. In fact, it is undisputed that the petitioner company was established by the State Government subsequent to the issuance of the acquisition notifications. It is also true that by various Government Orders, the State Government has thought it fit to transfer the irrigation projects along with all the assets and liabilities relating to the projects with instruction to the Nigam that all the works of the respective projects shall be completed within the time stipulated therein. It is also a fact that the petitioner company has satisfied the claim of the land owners by depositing the award amount/enhanced compensation. It is also noticeable that the Hon’ble Apex Court, in several matters including Civil Appeal (D) No.13231/2023 arising out of SLP (C) No.13065/2022 in the case of Executive Engineer, KNNL (supra) dated 12.03.2024, has issued directions while remanding the matter back to this 21 Court in the matter of reconsidering the claim of enhancement of compensation. In this background and having regard to the consistent view taken by the Apex Court, as noticed hereinabove, the person interested, who is also satisfying the compensation, is entitled to canvas its correctness or defend the award of the Collector. In that view of the matter, there can be no doubt that the petitioner company is entitled to question an order of enhancement of compensation. The petitioner company cannot be equated to a subsequent allottee, who is merely paying the value of the property allotted. 13. Having said so and for the same reason, that the petitioner company is not notified as the beneficiary in the acquisition notifications, the petitioner company may meet with stiff opposition, if it files appeals questioning the enhancement of compensation. The Appellate courts may have to deal with the issue as to whether the appellant company is a beneficiary or person interested and whether such an appeal could be maintainable at its hands. It is also a fact that several hundreds of reference petitions have been filed and several hundreds of reference orders have been passed by the competent courts. 22 There is a danger of the appellate courts having to decide the issue regarding the maintainability of the appeals that could be filed by the petitioner company and there is also a danger of foreseeing conflicting decisions. In that view of the matter, this Court is of the considered opinion that it is better that this Court would decide the said issue, rather than leaving it to be decided by several appellate courts. The issue regarding maintainability of the writ petition is accordingly answered in favour of the petitioner company. 14. However, we should give credit to the submission made by the learned counsel for the respondents land owners, who contended that that the petitioner company should not be permitted to pick and chose the matters for filing appeals. It is also noticeable that the Hon’ble Apex Court in the case of Executive Engineer, KNNL (supra) dated 12.03.2024 has issued directions to this court to take a holistic view pertaining to the subject acquisition, at least project wise and make an endeavour to infuse uniformity in the matter of award of compensation to the extent possible. 23 15. During the course of these proceedings, this Court called upon the appellant to place on record matters where the respondent company has satisfied the payment of compensation, in terms of the orders passed by the Reference Courts. Satisfactory information in that regard has not been placed before this Court. 16. Consequently, this Court proceeds to pass the following: ORDER (i) The writ appeal is disposed of while partially modifying the impugned order dated 15.11.2021 passed by the learned Single Judge in W.P.No.200605/2019. (ii) On remand, the learned I Addl. District Judge, Kalaburagi, shall call for information from the land owners as well as the respondent KNNL, as to whether the KNNL or the SLAO has satisfied payment of enhanced compensation in respect of similarly placed lands. (iii) If the learned I Addl. District Judge, Kalaburagi, is satisfied that the enhanced compensation has been satisfied by the KNNL or the SLAO, then the 24 reference in respect of the appellant herein shall also be disposed of in similar terms. (iv) If the learned I Addl. District Judge is satisfied that the respondents have not satisfied the enhanced compensation, in respect of any other lands similarly placed, then the learned Judge may proceed to reconsider the reference, while also considering the objections permitted to be filed at the hands of the respondent KNNL. (v) All other directions issued by the learned Single Judge shall be complied. Ordered accordingly. Sd/- (R. DEVDAS) JUDGE Sd/- (G BASAVARAJA) JUDGE KLY/JT/DL CT: JL