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2013 DIGILAW 2576 (BOM)

Sushma Murlidhar Ghadge v. State of Maharashtra

2013-12-13

A.S.OKA, S.C.GUPTE

body2013
JUDGMENT (A.S. Oka, J.) 1. On 16th September 2013, this Court directed final disposal of these Petitions at the admission stage. The facts leading to filing of these petitions are more or less identical. For the sake of convenience, we are making a reference to the facts of Writ Petition No.4121 of 2013. A notice under Subsection (2) of Section 32 of the Maharashtra Industrial Development Act, 1961 (for short “the said Act”) was issued on 16th August 1988. A notice under Subsection (1) of Section 32 of the said Act was issued on 27th March 1989. A notice/order under Subsection (2) of Section 33 of the said Act was issued on 1st September 1989 unilaterally fixing compensation. In Writ Petitions filed by some of the owners, the notices/orders dated 1st September 1989 were set aside and a direction was issued to the State to refer the cases to the Collector under Subsection (3) of Section 33 of the said Act. Ultimately, the notices under Subsection (3) of Section 33 of the said Act were issued calling upon the petitioners to remain present on 19th February 2001. On 19th March 2010, again a notice under Subsection (3) of Section 33 of the said Act was issued. It is undisputed that the negotiations were held between the Petitioners in these Petitions and the State Government on 17th April 2010 when an agreement was arrived at by which the Petitioners/Claimants agreed to accept total compensation at the rate of 2,50,000/(Rupees Two Lakhs Fifty Thousand ) per Hectare inclusive of interest from the date on which the possession was taken over. The present Petitions have been filed for seeking a writ of mandamus directing the Respondents to immediately release the amount of compensation as agreed in terms of the Settlement dated 17th April 2010. Another prayer is for directing the Respondents to pay interest at the rate of 10% per annum on the compensation agreed between the parties from 17th April 2010 till the date of realization of the amount. 2. There is a common reply filed by Mrs. Shakuntala Vishwanath Gaikwad, Deputy Collector, Special Land Acquisition Officer No.1, Solapur, wherein, it is stated that the awards have been made on 22nd May 2013 under Subsection (5) of Section 33 of the said Act. Details of the awards have been incorporated in the chart enclosed with the said affidavit. 2. There is a common reply filed by Mrs. Shakuntala Vishwanath Gaikwad, Deputy Collector, Special Land Acquisition Officer No.1, Solapur, wherein, it is stated that the awards have been made on 22nd May 2013 under Subsection (5) of Section 33 of the said Act. Details of the awards have been incorporated in the chart enclosed with the said affidavit. Learned counsel appearing for the Maharashtra Industrial Development Corporation ( for short “MIDC”) has tendered across the bar a letter dated 3rd December 2013 addressed to the Chief Executive Officer of MIDC by which the State Government has permitted release of compensation in terms of the awards. 3. Learned senior counsel appearing for the Petitioners submitted that undisputedly the agreements between the Petitioners and the State Government reached on 17th April 2010 under which the Petitioners agreed to accept total compensation of Rs.2,50,000/per hectare. He urged that notwithstanding the orders of this Court, the awards in terms of the said Agreements were not made and the awards have been belatedly made on 22nd May 2013. He pointed out that the present Petitions have been filed in the month of April 2013. He invited our attention to the judgment and order dated 18th November (2009 Writ Petition No.2419 of 2009 (Ashok Appasaheb Sathe & Ors v. The collector, Pune & Ors with other connected Writ Petitions).He relied upon the law laid down by the said decision. He submitted that in the present cases, there is inordinate delay in passing the awards from the date of agreements i.e. 17th April 2010 and therefore, as held by the Division Bench of this Court, the Petitioners are entitled to interest at the rate of 10% per annum on the unpaid amount of compensation payable under the awards from 17th April 2010 till the date of payment of compensation. He pointed out that the said decision of this Court has been affirmed by the Apex Court in a Special Leave Petition filed by the MIDC. He invited our attention to the various provisions of the said Act and in particular Section 33 of the said Act. He submitted that Subsection (3A) of Section 33 of the said Act starts with a non-obstante clause. He invited our attention to the various provisions of the said Act and in particular Section 33 of the said Act. He submitted that Subsection (3A) of Section 33 of the said Act starts with a non-obstante clause. He urged that the compensation ought to have been awarded in terms of the agreements immediately on 1 Writ Petition No.2419 of 2009 (Ashok Appasaheb Sathe & Ors v. The collector, Pune & Ors with other connected Writ Petitions). execution of the agreements and in any event, within a reasonable period from the date of the Agreements. He submitted that in the facts of these cases, the actual agreements in writing were executed two months after 17th April 2010 but the agreements contemplated by Subsection (3A) of Section 33 of the said Act were reached on 17th April 2010. He, therefore, urged that there is a delay of more than three years in passing the awards and that is the reason why the Petitioners should be compensated by ordering payment of interest. 4. Learned counsel appearing for the MIDC urged that firstly the agreements contemplated by Subsection (3A) of Section 33 of the said Act have to be in writing. Secondly, he contends that on the basis of the agreements in writing, the awards cannot be mechanically made and notices have to be issued in terms of Subsection (4) of Section 33 of the said Act. He invited our attention to the awards made in these cases. He pointed out that the rate arrived at by way of agreements was treated as a proposal which was sent for approval of the MIDC and that the MIDC approved it on 24th August 2011. He submitted that the procedure contemplated by Subsection (4) of Section 33 of the said Act, the Claimants as well as MIDC are entitled to a notice and the Collector will have to confirm the existence of the agreements before passing the Awards. He invited our attention to Section 38 of the said Act. He submitted that the interest is payable in accordance with Section 38 the said Act at the rate of 4% per annum from the date of taking over possession till the date of payment of compensation. He submitted that there is no provision under the said Act for grant of interest on the compensation till the date of payment. He submitted that the interest is payable in accordance with Section 38 the said Act at the rate of 4% per annum from the date of taking over possession till the date of payment of compensation. He submitted that there is no provision under the said Act for grant of interest on the compensation till the date of payment. He submitted that interest cannot be ordered to be paid. In any event, he submitted that the decision relied upon by the Petitioners of the Division Bench of this Court is not a binding precedent as the attention of this Court was not drawn to Section 38 of the said Act. He, therefore, submitted that the said decision was per incuriam. He submitted that unless there is an approval of the State Government, the amount of compensation cannot be disbursed and that the approval of the State Government has been granted only on 3rd December 2013. The learned AGP reiterated that interest is payable under the said Act only in accordance with Section 38 of the said Act and in any case, interest at the rate of 10% per annum cannot be granted. He submitted that the date of the agreement will have to be taken as the date on which the written agreement was executed by and between the parties. He would, therefore, urge that no interest is payable. 5. We have carefully considered the submissions. It will be necessary to make a reference to Section 33 of the said Act which reads thus:- “33.(1) Where any land is acquired by the State Government under this Chapter, the State Government shall pay for such acquisition compensation the amount of which shall be determined in accordance with the provisions of this section. (2) Where the amount of compensation has been determined by agreement between the State Government and the person to be compensated, it shall be determined in accordance with such agreement. (3) Where no such agreement can be reached, the State Government shall refer the case to the Collector for determination of the amount of compensation to be paid for such acquisition as also the person or persons to whom such compensation shall be paid. (3) Where no such agreement can be reached, the State Government shall refer the case to the Collector for determination of the amount of compensation to be paid for such acquisition as also the person or persons to whom such compensation shall be paid. [Provided that, no compensation exceeding such amount as the State Government may by general order specify, to be paid for such acquisition shall be determined by the Collector without the previous approval of the State Government or such officer as the State Government may appoint in this behalf.] [(3A) Notwithstanding anything contained in subsection (3), if after the case is referred to the Collector under that subsection but before he has finally determined the amount of compensation, such amount is determined by agreement between the State Government and the person to be compensated, the compensation shall be determined by the Collector in accordance with such agreement]. (4) Before finally determining the amount of compensation, the Collector shall give an opportunity to every person to be compensated to state his case as to the amount of compensation.' [(5) In determining the amount of compensation, the Collector shall be guided by the provisions contained in sections 23 and 24 and other relevant provisions of the Land Acquisition Act, 1894, subject to the modifications that the references in the said sections 23 and 24 to the date of the publication of the notification under section 4, subsection (J), were references to the date 4(of the service or publication of the notice under sub section (2) of section 32 of this Act in the manner for the time being laid down under this Act], and the references to the time or date of the publication of the declaration under section 6 were references to the date of the publication of the notice under Subsection (l) of section 32 of this Act in the Official Gazette.]. [Explanation.- For the purposes of this subsection the date of the service of a notice under subsection (2) of section 32 of this Act shall before the 8th day of June 1967mean the date on which the notice is served in the manner laid down in section 52 of this Act; and on and after the 8th day of June 1967 the date of the publication of a notice under the said subsection (2) of section 32 shall be the date on which the notice is published in the Official Gazette.]. (6) For the purpose of determining the amount of compensation- (a) the Collector shall have power to require any person to deliver. to him such returns and assessments as he considers necessary; (b) the Collector shall also have power to require any person known or believed to be interested in the land to deliver to him a statement containing, as far as may be practicable, the name of every other person having any interest in the land as co-owner, mortgagee, tenant, or otherwise, and the nature of such interest, and of the rents and profits (if any) received or receivable on account thereof for three years next preceding the date of the statement. (7) Every person required to deliver a return, assessment or statement under subsection (6) shall be deemed to be legally bound to do so within the meaning of section 175 and section 176 of the Indian Penal Code. (8) The Collector may hear expert witnesses if it be necessary to do so in any particular case. (9) The Collector or any officer authorised by him in this behalf shall be entitled to enter in and inspect any land which is subject to proceedings before him. (10) The Collector shall dispose of every case referred to him under subsection (3) for determination of compensation as expeditiously as possible and in any case within such time as may be prescribed by rules. (11) The Collector shall determine the amount or cost incurred in any case disposed of by him under the section, and by what persons and in what proportions they are to be paid. (11) The Collector shall determine the amount or cost incurred in any case disposed of by him under the section, and by what persons and in what proportions they are to be paid. "[(12) Where any case is referred to any Collector under subsection (3), the State Government may, at any stage, by order in writing and for reasons to be recorded therein, transfer it to any other Collector, and upon such transfer, unless some special directions are given in the order, the Collector to whom the case is transferred may hear and dispose of the case from the stage at which it was transferred or the case may be heard and disposed of by him de novo.]”. 6. Sub-section (1) of Section 32 of the said Act provides that if any land is required for the purposes of development, the State Government is entitled to acquire the land by publishing a notice in the official gazette giving necessary particulars. Before publishing a notice under Subsection (1) thereof, the State Government is under an obligation to issue notice calling upon the owner or the person interested to show cause as to why the land should not be acquired. Subsection (4) of Section 32 of the said Act provides that when a notice under Subsection (1) is published in the official gazette, from the date of publication, the land notified therein vests in the State Government free from all encumbrances. After vesting as aforesaid, under Subsection (5) thereof, the State Government is empowered to issue notice calling upon the person in possession to surrender or deliver the possession of the said land to the State Government. 7. Now coming to Section 33 of the said Act, Subsection (2) thereof provides that amount of compensation can be determined by an agreement between the State Government and the person to be compensated. If there is such an agreement, the amount of compensation shall be determined in accordance with such agreement. If no such agreement can be reached, under Subsection (3) of Section 33 of the said Act, the State Government is under an obligation to refer the case to the Collector for determination of the amount of compensation to be paid for such acquisition. If no such agreement can be reached, under Subsection (3) of Section 33 of the said Act, the State Government is under an obligation to refer the case to the Collector for determination of the amount of compensation to be paid for such acquisition. Proviso to Sub-section (3) of Section 33 of the said Act makes it clear that, no compensation in excess of such amount as the State Government may by general order specify, to be paid for such acquisition shall be determined by the Collector. If the Collector wants to determine an amount in excess of the amount specified by the State Government, he is required to obtain prior approval from the State Government in that behalf. The proviso to Subsection (3) will operate only when Sub-section (3) is applicable. The Sub-section (3) of Section 33 will apply only when there is a failure to arrive at an Agreement. In the present case, we are concerned with Sub-section (3A) of Section 33 of the said Act. It provides that even after the State Government refers the case in accordance with Sub-section (3) to the Collector for determination of compensation, there can be an agreement executed between the State Government and the person to be compensated. If there is such an agreement, the compensation shall be determined by the Collector in accordance with the said agreement. Looking to the language of the Sub-section (3A) which starts with a non-obstante clause, once there is an agreement between the State Government and the person to be compensated after the matter is referred to the Collector in accordance with Sub-section (3) of Section 33 of the said Act, there is no choice for the Collector but to determine compensation in accordance with such agreement. Thus, there can be an Agreement between the State Government and person to be compensated at two stages. The first stage is before making a reference to the Collector under Subsection (3) of Section 33 of the said Act. If there is no such Agreement, the State Government is under an obligation to make a reference to the Collector in accordance with Sub-section (3) for determination of compensation. Even after such a reference but before passing an Award under Subsection (5), there can be an Agreement between the State Government and the person to be compensated as regards the compensation on account of acquisition of the land. Even after such a reference but before passing an Award under Subsection (5), there can be an Agreement between the State Government and the person to be compensated as regards the compensation on account of acquisition of the land. In both the cases, it is mandatory that the compensation shall be paid in accordance with such Agreement. 8. A submission was canvassed that even after execution of such Agreement which is covered by Subsection (3A), the provisions of Subsection (4) will have to be followed by giving opportunity of being heard to the persons concerned. We must note here that Subsection (4) of Section 33 of the said Act contemplates opportunity to be given only to the person to be compensated to state his case as to the amount of compensation. The notice under Subsection (4) of Section 33 of the said Act to a person to be compensated is contemplated to enable the said person to state his case as to the amount of compensation. Obviously, once there is an agreement governed by Subsection 3A, the inquiry contemplated by Subsection (5) of the said Act is dispensed with inasmuch as the Collector is under an obligation to determine compensation in terms of the agreement between the State Government and the person to be compensated. In case of such agreement executed before the determination of the compensation in accordance with Subsection (5), the prior approval of the State Government is not contemplated. The prior approval of the State Government is contemplated only when the Collector determines the compensation in accordance with Subsection (3) of Section 33 of the said Act when there is no agreement reached between the State Government and the person to be compensated. Therefore, we find that once there is a legal and valid agreement as contemplated by Subsection (3A) of Section 33, the MIDC has no role to play and all that remains to be done by the Collector is to pass a formal award in terms of the agreement. 9. At this stage, we turn to the awards made in the present cases as an argument is canvassed that the Collector issued notice under Subsection (4) of Section 33 after the Agreement. Perusal of Paragraph 4 of the awards shows that after the matter was referred to the Collector, the affected persons applied for negotiations. 9. At this stage, we turn to the awards made in the present cases as an argument is canvassed that the Collector issued notice under Subsection (4) of Section 33 after the Agreement. Perusal of Paragraph 4 of the awards shows that after the matter was referred to the Collector, the affected persons applied for negotiations. Thereafter, a notice under Subsection (4) of Section 33 of the said Act was issued. It is true that there is a reference in the awards to the grant of approval to the proposal to pay compensation at Rs.2,50,000/per Hectare by the MIDC but according to us, the said approval is irrelevant as such approval for compensation payable in terms of Agreements is not contemplated by the scheme of Section 33 of the said Act. 10. Therefore, once there is a lawful agreement contemplated by Subsection (3A) of Section 33 of the said Act, the Collector is under an obligation to make an award directing payment of compensation in terms of the agreement. It is obvious that such award has to be made expeditiously and atleast within a reasonable time from the date on which the Agreement is reached. On this aspect, the scheme of the said Act is completely different from the Land Acquisition Act, 1894. In view of Subsection (1) of Section 32 of the said Act, on the basis of a notice published in Government Gazette, there is a vesting of the land in the State Government. Under the provisions of the Land Acquisition Act, 1894, vesting can be in terms of Section 16 when the possession of the acquired land is taken over only after passing of the Award under Section 11 and only after the compensation is offered in terms of the Award. Only in exceptional cases, when Section 17 is invoked, the possession can be taken over of the acquired land even before an Award is made. But, in such a case, before the possession is taken, 80% of the estimated compensation has to be offered to the owner or the person interested. In case of acquisition under the said Act, the owner or person interested is divested of his rights in respect of the acquired land immediately on publication of a notice under Subsection (1) of Section 32 of the said Act in Gazette. 11. There is a second aspect which is more important. In case of acquisition under the said Act, the owner or person interested is divested of his rights in respect of the acquired land immediately on publication of a notice under Subsection (1) of Section 32 of the said Act in Gazette. 11. There is a second aspect which is more important. Once there is an award made in accordance with the agreement under Subsection (3A) of Section 33 of the said Act, the Claimant or the person to be compensated is deprived of his remedy under Section 34 of the said Act of making an application for Reference to the Court for claiming enhancement in the compensation. The reason being that once the compensation is determined in terms of the agreement under Subsection (3A), the person to be compensated cannot be said to be a person aggrieved by the decision of the Collector as the compensation is determined in accordance with the agreement. 12. Coming back to the facts of the cases in hands, it is undisputed that the negotiations were concluded on 17th April 2010 when the rate of Rs.2,50,000/per Hectare was agreed. The awards ought to have been made in terms of the agreement within a reasonable time. It is an admitted position that the agreements reached on 17th April 2010 were executed in writing two months after 17th April 2010. There is an inordinate delay in making awards in terms of the settlement as the awards were belatedly made on 22nd May 2013. When the agreements were arrived at on 17th April 2010, by no stretch of imagination, it can be said that the awards made three years thereafter were made within a reasonable time. As we have held earlier, once there is an agreement contemplated under Subsection (3A) of Section 33 of the said Act, nothing further is required to be done by the Collector and he has to grant compensation in terms of the agreement. In the cases in hands, this formal process has taken a long period of more than three years. We must note here that the vesting of the acquired lands in the cases in hands is of the year 1989. The relevant date for determination of the compensation is 16th August 1988 as stated in the Awards. 13. Now we deal with the arguments based on Section 38 of the said Act. We must note here that the vesting of the acquired lands in the cases in hands is of the year 1989. The relevant date for determination of the compensation is 16th August 1988 as stated in the Awards. 13. Now we deal with the arguments based on Section 38 of the said Act. Section 38 applies to cases where amount of compensation is not paid or deposited before the possession of the acquired land is taken over in accordance with Subsection (5) or (6) of Section 32 of the said Act. In such a case, there is a provision to compensate the person to be compensated by paying interest at the rate of 4% per annum. The Petitioners are not seeking interest under the provisions of the said Act. Their contention is that after having agreed to accept a lumpsum amount by way of compensation, for a period of more than three years, the compensation was not paid. This has to be understood in the context of the fact that the vesting relates back to the year 1989. Moreover, the agreements in writing which are executed record that a lumpsum compensation of Rs.2,50,000/per Hectare will include interest from the date on which the possession was taken till the date of the agreements. Going by the submissions canvassed by the learned counsel appearing for the MIDC and the learned AGP, even in terms of Section 38 of the said Act, the interest at the rate of 4% per annum will be payable from the date of agreements i.e. 17th April 2010, till the date on which the compensation is paid to the Claimants as the agreements provide that the interest only upto the date of agreements is included in the agreed amount. 14. In the present cases, the Petitioners have taken recourse to a public law remedy under Article 226 of the Constitution of India. The Petitioners have suffered serious prejudice. They solemnly agreed to accept the compensation at a particular rate way back on 17th April 2010, obviously with the hope that they will receive the compensation within a reasonable time. But they were deprived of the same for a period of more than three years. By entering into an agreement, they forfeited their right to apply for enhancement of compensation as per Section 34 of the said Act. But they were deprived of the same for a period of more than three years. By entering into an agreement, they forfeited their right to apply for enhancement of compensation as per Section 34 of the said Act. As held by the Division Bench in the decision relied upon by learned senior counsel appearing for the Petitioners, the Petitioners deserve to be compensated on account of inaction on the part of the Collector in complying with the mandatory provisions under Subsection (3A) of Section 33 of the said Act under which he was under an obligation to make an award within a reasonable time from the date of the agreement. Thus, the Petitioners who were admittedly held to be entitled to receive compensation have lost their title to the acquired land in the year 1989. With the legitimate expectation of receiving compensation within a reasonable time, they entered into agreements on 17th April 2010. They agreed to accept a lumpsum compensation at the agreed rate which was inclusive of interest under Section 38 of the said Act. In the bargain, they forfeited their right to apply for enhancement under Section 34 of the said Act. 15. In the facts of these cases, we find that the agreements in writing were formally executed two months after 17th April 2010 and in some cases, the agreements were executed on 29th September 2010. The written agreements contain a specific recital that the agreements were infact arrived at on 17th April 2010. Therefore, undisputed position which emerges is that the concluded agreements were reached on 17th April 2010. As a reasonable time was available to the Collector from 17th April 2010 to make awards, in the facts of these cases, we propose to grant interest from the dates on which the agreements were executed in writing. 16. Therefore, in exercise of powers under Article 226 of the Constitution of India, this is a fit case to direct payment of interest on the unpaid amount of compensation from the respective dates of the written agreements. The question is what should be the rate of interest. The interest has to be reasonable, but it must adequately compensate the Petitioner for the delay. Therefore, we are of the view that the interest will be payable at par with maximum rate of interest paid by the State Bank of India on the fixed deposits as of 2010. The question is what should be the rate of interest. The interest has to be reasonable, but it must adequately compensate the Petitioner for the delay. Therefore, we are of the view that the interest will be payable at par with maximum rate of interest paid by the State Bank of India on the fixed deposits as of 2010. In the year 2010, rate of interest of the State Bank of India on the fixed deposits for a period of 3 to 5 years was 8.25% per annum. We propose to grant three months' time to the Respondents to pay compensation to the Petitioners/Claimants together with interest as stated above. 17. We must note here that in Writ Petition Nos.4125 of 2013, 4126 of 2013 and 4130 of 2013, the compensation amount has been already disbursed and, therefore, in these three Writ Petitions, a direction will have to be given only for payment of interest till the date of payment of compensation i.e. 24th January 2013 18. Hence, we dispose of the Writ Petitions by passing the following order: ORDER: (a) We direct the Respondents to pay compensation to the Petitioners/Claimants in terms of the awards dated 22nd May 2013 within a period of three months from today; (b) The amount of compensation shall carry interest at the rate of 8.25% per annum from the respective dates on which the Petitioners have executed the agreements in writing with the State Government till the actual date of payment of compensation to the Petitioners; (c) We make it clear that the aforesaid directions will apply to all the Writ Petitions except the Writ Petition Nos.4125, 4126 and 4130 of 2013 and in these Writ Petitions, interest will be payable on above terms upto the date on which the compensation has been paid to the Petitioners, which is 24th January 2013; (d) There will be no orders as to costs; (e) Considering the fact that the Petitioners have been deprived of the compensation for a long time, we expect that the principal amount of compensation shall be released to the Petitioners as expeditiously as possible without waiting for expiry of period of three months; (f) The Petitions are disposed of on above terms.