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2023 DIGILAW 643 (GUJ)

Kamlaben D/O Mangalbhai Mathurbhai v. Special Land Acquisition Officer

2023-04-20

A.S.SUPEHIA, DIVYESH A.JOSHI

body2023
JUDGMENT : A.S. Supehia, J. 1. The present first appeals filed under section 54 of the Land Acquisition Act, 1894 (“the Act” for short) read with section 96 of the Code of Civil Procedure, 1908 emanate from the common judgment and order dated 23.09.2019 passed by learned Principal Senior Civil Judge, Dabhoi, District Vadodara in Land Reference Case Nos.519 of 2004 to 529 of 2004, wherein the Reference Court has dismissed the land reference cases filed by the present appellants-original claimants. Being aggrieved, the claimants have filed the captioned first appeals. 2. From the text and tenor of the judgment and order, it appears that the land reference cases have been dismissed on the substratum of the consent terms between the claimants, i.e. the appellants and the acquiring body, as recorded in the award dated 05.06.1992 passed by the sole arbitrator. 3. Learned senior advocate Mr. H.M. Parikh assisted by learned advocate Mr.Jinesh Kapadia has submitted that the judgment and order passed by the Reference Court, rejecting the reference proceedings on the basis of the consent is absolutely misconceived. It is submitted that the reference proceedings have been rejected on the basis of the award passed by the sole arbitrator dated 05.06.1992 in LAQ No.10 of 1990 without the same being produced on record by either of the parties. It is submitted that the Reference Court has observed that as none of the parties have produced the copy of the arbitral award, the reference proceedings are rejected and, hence, the Reference Court, without examining the value of the land which was acquired of Village Simaliya, Taluka Dabhoi, District Vadodara, the reference proceedings could not have been rejected. Learned senior advocate Mr. Parikh has submitted that for the purpose of acquisition of the land of the said village, Section 4 notification under the Act was published on 09.08.1990 and before the aforesaid notification was published, the award dated 16.07.1990 was passed by the arbitrator. It is submitted that after the aforesaid award was passed by the Arbitrator, the Land Acquiring Body should not have further issued Section 4 notification under the Act and if the same is issued, then the claims of the claimants should have been appropriately considered by assessing the value of the lands which were acquired. 4. Learned senior advocate Mr. It is submitted that after the aforesaid award was passed by the Arbitrator, the Land Acquiring Body should not have further issued Section 4 notification under the Act and if the same is issued, then the claims of the claimants should have been appropriately considered by assessing the value of the lands which were acquired. 4. Learned senior advocate Mr. Parikh has submitted that the claimants of six villages having a population of 556 residents, were represented by six persons from each village, and only upon their say, the arbitrator had passed the order fixing the compensation of the land which was acquired at Rs.23,000/- per Acre. The said price is inclusive of solatium and statutory interest. Learned senior advocate has further submitted that even if the aforesaid price is fixed, the same can only be binding to the persons who were parties to such arbitration proceedings and not to other claimants. Learned senior advocate has further submitted that right from the beginning, when Section 4 notification of the Act was issued, the appellants-claimants were raising objections with regard to the fixation of price by the arbitrator and, hence, the Reference Court was required to examine such aspect and the reference cases could not have been dismissed solely on the basis of the award of the arbitrator. Learned senior advocate Mr. Parikh has submitted that though the claimants, in support of their claim of compensation at Rs.144/- per sq. mtr. had placed reliance on the judgment and award passed by 8th Additional Senior Civil Judge, Vadodara in LRC (M) No.805 of 1992 at Exh.33 for the lands acquired at Village Dabhoi, the said evidence was disbelieved only for the reason that Dabhoi is a developed municipal area and Village Simaliya, which is at a distance of about 6.5 kilometer. It is submitted that notification under Section 4 of the Act for acquiring the lands of Village Dabhoi was published on 15.12.1986, whereas in the present case, Section 4 notification is published in the year 1990. Learned senior advocate has further submitted that thus the Reference Court was required to further allow the claimants to lead evidence in this regard so that they could satisfy that the claimants are entitled to get compensation at the rate of Rs.144/- per sq. mtr. 5. Learned senior advocate has further submitted that thus the Reference Court was required to further allow the claimants to lead evidence in this regard so that they could satisfy that the claimants are entitled to get compensation at the rate of Rs.144/- per sq. mtr. 5. While placing reliance on the judgment of the Apex Court in the case of Sukalu Ram Gond vs. State of M.P. & Ors., (1994) 5 S.C.C. 570 , it is contended that the award passed by the arbitrator was clearly without jurisdiction and authority and the same cannot bind the present appellants-claimants who are not parties to such proceedings. It is submitted that the Reference Court could not have placed reliance on such award and the claim of the appellants was required to be independently examined. While referring to the provisions of Section 14 of the Arbitration Act, 1940, it is submitted that while passing the final decree or award, notice was required to be given to the parties who are pursuing the arbitration, in the present case, while passing the decree, a public notice was issued by the concerned court on the award which is impermissible and, hence, since no personal notice has been given to the appellants, the award and the decree could not have been made binding to the appellants and, hence, it is submitted that the impugned judgment and award may be quashed and set aside and the matter may be remanded so that appropriate evidence may be led. Finally, it is submitted that as on today the decree which is drawn on the basis of arbitral award is not yet executed. 6. Per contra, learned AGP Mr. Aditya Jadeja appearing for the Land Acquisition Officer has urged that the impugned judgment and award passed by the Reference Court does not require any interference since the same is appropriately passed. It is submitted by learned AGP that the appellants and all other villagers were being represented by six persons before the Arbitrator and, accordingly, after hearing those parties, the Arbitrator has fixed the price of the lands which were acquired and the award was passed by the sole arbitrator on 16.07.1990. It is submitted by learned AGP that the appellants and all other villagers were being represented by six persons before the Arbitrator and, accordingly, after hearing those parties, the Arbitrator has fixed the price of the lands which were acquired and the award was passed by the sole arbitrator on 16.07.1990. It is submitted by learned AGP that the award itself reveals that all the owners of the lands were being represented by six representatives and after agreeing and giving consent, it is not open for the appellants or other claimants to file further proceedings, claiming the enhanced amount of compensation. Learned AGP has further submitted that the said award passed by the sole Arbitrator on 16.07.1990 is confirmed and subsequent challenge by the claimants in a writ petition being Special Civil Application No.14445 of 2013, which was dismissed on 08.01.2014, hence the claimants cannot further file any proceedings or claim the enhanced compensation. Learned AGP has further submitted that the Reference Court has also precisely considered further claim of the claimants on the basis of the evidence below Exh.33 and after considering the same, it has been held that the claimants or the appellants are not entitled to the enhanced compensation. Thus, it is submitted that the impugned order does not require any interference. 7. We have heard the learned advocates appearing for the respective parties. The controversy and the issue raised in the present appeal hinges on the aspect of the award passed by the sole arbitrator with regard to the compensation determined by the Arbitrator for the lands acquired of Village Simaliya, Taluka Dabhoi. The facts which are emerging from the record are that the respondent No.2 acquiring body, i.e. Sardar Sarovar Nigam Limited acquired the lands of the aforesaid villagers covering an aggregate area of 4540 Acres of land of 556 land owners. It appears that there was some agreement between the Sardar Sarovar Nigam Limited and such land owners with regard to fixation of the price of the land and, accordingly, a sole Arbitrator – Hon’ble The Chief Justice B.J. Diwan (as he then was) was appointed as the Arbitrator. It appears that there was some agreement between the Sardar Sarovar Nigam Limited and such land owners with regard to fixation of the price of the land and, accordingly, a sole Arbitrator – Hon’ble The Chief Justice B.J. Diwan (as he then was) was appointed as the Arbitrator. It is not in dispute and is also established fact from the record that six representatives of each of the six villages of which the lands were acquired being – Simaliya, Akotadar, Pansoli, Dabhoi, Kukkad and Samshedpura were being represented by each of the representatives from such villages. The agriculturists of the villages were approximately 550 in number. 8. After hearing and negotiating with five representatives being – Hasmukhbhai Mathurbhai Patel, Rameshbhai Ravadas Patel, Jitendrakumar Shankarlal Patel, Rohitkumar Parshottamdas Patel, and Thakorebhai Kasurdas Patel, and respondent no.2, the sole Arbitrator decided compensation payable to the owners and fixed the price of Rs.23,000/- per Acre. 9. It is surprising to note that after the aforesaid award was passed by the sole Arbitrator, Section 4 notification under the Act was published on 09.08.1990 and Section 6 notification was published on 17.01.1991. Thereafter, notice under Section 9(3)(4) has been issued. As per the aforesaid arbitral award passed under Section 11(2) of the Act, the present appellants and other claimants, who are not parties to the arbitral proceedings, strongly objected and filed their objections on 11.02.1992. The award under Section 11 was published on 05.06.1992 and all the claimants had filed an application on 14.08.1992 under Section 18 of the Act for claiming the enhanced amount of compensation. It is very shocking to note that the same remained with the Special Land Acquisition Officer till the year 2004 and, thereafter, the same was referred to the Civil Court in the month of December, 2004, which culminated into the aforenoted reference proceedings and after a period of 15 years, the reference has been rejected by the common impugned judgment and order dated 23.09.2019. 10. The Reference Court, in the reference proceedings, has framed three issues which are as under: “[6] Considering the pleadings of the parties and documents, my predecessor has framed following issues. (i) Whether the claimants prove that the compensation awarded by the Special Land Acquisition Officer is inadequate and not proper? (ii) Whether the claimants are entitled to get additional compensation? If yes, at what amount? (iii) What award and decree?” 11. (i) Whether the claimants prove that the compensation awarded by the Special Land Acquisition Officer is inadequate and not proper? (ii) Whether the claimants are entitled to get additional compensation? If yes, at what amount? (iii) What award and decree?” 11. Upon perusal of the common impugned judgment and award, it is noticed by us that the Reference Court is impressed primarily with the arbitral award passed by the Hon’ble The Chief Justice B.J. Diwan (as he then was). It is observed that since the aforesaid award was passed with consent and is binding to all the claimants, including the present appellants, hence, the subsequent proceedings or compensation cannot be granted or claimed by them. Thus, the reference cases are primarily rejected on the consent award entered into between the land owners and the acquiring body and, hence, the reference proceedings under Section 18 of the Act is held to be not maintainable. 12. Thus, the issue which falls for deliberation before this Court is that whether the aforesaid arbitral award passed by the sole Arbitrator under the Arbitration Act will be binding to the present appellants, who are not the parties to such arbitral proceedings or not. At this stage, it would be apposite to refer to the observations made by the Apex Court in the case of Sukalu Ram Gond (supra). The Supreme Court has held thus: “4. As seen, when the reference was confined only to the petitioner and Vinod Jain, whether the Arbitrator, without the order of reference being amended, could have gone into the liability of the fifth respondent, Anoop Chand Setia, and made him liable to pay the amount indicated in the Award. An award derives its force from the original contract. Parties to the contract, by consent, refer their dispute for settlement to a tribunal of their choosing, instead of to a court. Therefore, there should exist an agreement showing consent to refer a dispute for settlement by the arbitrator. In cases where the arbitrator enters into the consideration of the matters which are not referred to him or over which he has no jurisdiction to try, the question is not one of waiver or estoppel but of authority. Therefore, there should exist an agreement showing consent to refer a dispute for settlement by the arbitrator. In cases where the arbitrator enters into the consideration of the matters which are not referred to him or over which he has no jurisdiction to try, the question is not one of waiver or estoppel but of authority. The question is whether a person, not a party to a reference but who participated in the award proceeding with objection and continued to participate in the proceedings under protest, as was done in this case, whether is bound by the award? Our answer is no. He is not bound by the award, as being without authority. After taking objection to the authority of the arbitrator and making protest, unless a proper reference was made by this Court, the arbitrator does not get the authority and jurisdiction to make the award against a non-party to the contract. In the Law of Arbitration by Justice Bachawat, p. 19, it is stated that "to constitute an arbitration agreement, there must be an agreement, that is to say, the parties must be ad idem ... agreement must be made by the free consent of the parties". Admittedly, there is no such agreement or consent given by fifth respondent. His participation in the Award at best after protest, would protect his interest or a witness and no more. It is settled law that acquiescence does not confer jurisdiction. 5. This Court in Tarapore & Co. v. State of M.P. I specifically dealt with the aspect of acquiescence and we need not further elaborate it. It was held that the jurisdiction cannot be assumed by the arbitrator on the basis of either acquiescence of the parties or consent to the adjudication of the dispute without any reference. Accordingly, we hold that the Award of the Arbitrator is clearly without jurisdiction and authority and is accordingly set aside. Parties in terms of the order of reference shall pal, the fee of the Arbitrator.” 13. While answering the question as referred in the aforenoted observations as regards whether a person, not party to a reference but who participated in the award proceedings with objection and continued to participate in the proceedings under protest, as was done therein, whether is bound by the award or not?. The Supreme Court has answered it in the negative. While answering the question as referred in the aforenoted observations as regards whether a person, not party to a reference but who participated in the award proceedings with objection and continued to participate in the proceedings under protest, as was done therein, whether is bound by the award or not?. The Supreme Court has answered it in the negative. It is declared that he is not bound by the award as being without authority. It is further held that after taking objection to the authority of the Arbitrator and making protect, unless a proper reference was made, the Arbitrator does not get the authority and jurisdiction to make the award against a non-party to the contract. Thus, the Supreme Court has gone a step further and has held that the award would not be binding to a person though who is not party but who also participated in the award proceedings with objection and continued to participate in the proceedings, would not be bound by such award. In the present case, it is an established fact that for the six villages, there were only five persons who were parties to the proceedings before the Arbitrator. 14. Except these five persons, the present appellants or other land owners were not the parties to the proceedings and in fact after the Arbitrator had decided and finalized the aforesaid amount of the value of the land which was acquired, other claimants like the present appellants had immediately objected. It is not in dispute that the Arbitration award was declared prior to issuance of Section 4 notification. After Section 4 notification and Section 6 notification were published in the Gazette and the compensation awarded under section 11 is objected by the appellants, their intention was unambiguous that they did not want to accept the price of the land fixed by the Arbitrator. After the application under Section 18 was made by the claimants on 14.08.1992, the price which was determined by the sole Arbitrator would not be binding to the present appellants or the claimants and would confine to the five representatives who had participated in the proceedings since they had accepted such amount fixed by the Arbitrator. 15. Interestingly, it is noticed by this Court that the reference court has recorded that neither of the parties have produced the arbitral award dated 16.07.1990 or the decree drawn on such award. 15. Interestingly, it is noticed by this Court that the reference court has recorded that neither of the parties have produced the arbitral award dated 16.07.1990 or the decree drawn on such award. Thus, the reference proceedings have proceeded and decided on the document which is not produced and given exhibit. The appellants have also asserted before this Court that as on today, the decree based on the arbitral award is not yet executed. It is also stated that the appellants were also not issued any individual notice as envisaged under section 14 of the Arbitration Act before the trial court has drawn the decree and the public notice cannot meet the requirement of statute. When the claimants-appellants were disputing that the arbitral award was not binding to them since they did not participate and have not signed, it was obligatory on the part of the reference proceedings to establish the binding effect of the award and decree by leading evidence. The claims of the rest of the claimants for the lands which they have acquired cannot get diluted and eclipsed by the award of the Arbitrator as their claims would be distinct from the claims of those five representatives who agreed to accept the amount determined by the Arbitrator. The award passed by the Arbitrator would operate in personam and not in rem in view of the distinct claim made by other claimants. There would be different aspects of deciding the value of the lands acquired of six villages one of which is village Simaliya which is subject matter of reference cases. 16. It is also noticed by us that the Reference Court has brushed aside the evidence produced by the claimants in support of their case below Exh.33. The claimants had placed reliance on the judgment and award passed by 8th Additional Senior Civil Judge, Vadodara delivered in LRC (M) No.805 of 1992 for the lands acquired of the adjoining Village Dabhoi, for which, the compensation of Rs.96/- per square meter was finalized till the Apex Court. It is also not in dispute that Section 4 notification under the Act for the lands acquired of Village Dabhoi was issued in the year 1986, whereas in the present case, notification under Section 4 of the Act has been issued on 09.08.1990. It is also not in dispute that Section 4 notification under the Act for the lands acquired of Village Dabhoi was issued in the year 1986, whereas in the present case, notification under Section 4 of the Act has been issued on 09.08.1990. The Reference Court has not accepted such evidence only on the basis of the certificate at Exh.36 issued by Talati-cum-Mantri showing that the distance between the village Simaliya and Dabhoi is about 6.5 kilometers and Dabhoi is a developed municipal area having taluka headquarter, railway station etc. 17. When such evidence was being produced by the claimants, the Reference Court was further required to examine the aspect as to whether Village Dabhoi was merged in the municipal area at the relevant time when Section 4 notification was issued for the lands acquired at Village Simaliya. The Reference Court though has observed that Village Simaliya is adjacent to Dabhoi, has not calculated or determined the amount of compensation only for the reason that the same is developed municipal area. The law is well settled in this regard that even if lands of the village which are acquired and falls adjacent to any municipal area, the amount of compensation can always be determined by adopting the appropriate formula which has been adopted and followed in the various judgments rendered by different courts. Thus, in absence of any exercise undertaken in this regard, the Reference Court could not have rejected the evidence, upon which, reliance has been placed by the claimants. It is very curious to note that on one hand, the Reference Court has refused to entertain the reference proceedings by observing that the arbitral award was passed with the consent of the claimants, and on the other hand, the Reference Court has examined the evidence produced by the claimants and held that the same cannot be placed reliance in view of the topography of the village Simaliya. 18. Learned AGP has placed reliance on the order dated 08.01.2014 passed by this Court in Special Civil Application No.14445 of 2013. A perusal of the said order reveals that the petitioners-claimants therein had challenged the judgement and award dated 29.09.2007 after a period of 6-7 years. 18. Learned AGP has placed reliance on the order dated 08.01.2014 passed by this Court in Special Civil Application No.14445 of 2013. A perusal of the said order reveals that the petitioners-claimants therein had challenged the judgement and award dated 29.09.2007 after a period of 6-7 years. The facts recorded therein suggest that the writ petition has been filed by the representatives of six villages questioning the award, and the learned single judge has not entertained the writ petition on the ground of delay. Thus, the order passed by this Court in the case of such representatives will not come to the rescue of the State authority and the rights/claims of the appellants cannot get eclipsed on rejection of the writ petition. 19. Under the circumstances, we find that the impugned judgment and award suffers from patent infirmity and illegality and the same is required to be quashed and set aside. 20. In the result, all the matters are hereby remanded to the Reference Court. The reference proceedings are ordered to be restored to their original file. Since the acquisition is of the year 1990, it would be appropriate that the Reference Court shall decide the reference proceedings within a period of six months. It is also clarified that it will be open for either of the parties to lead fresh evidence in support of their case, and after such evidence is established, the Reference Court shall decide the same in accordance with law. Record & proceedings shall be returned to the concerned trial court. 21. With the aforesaid observations, all the appeals are disposed of to the aforesaid extent. No orders as to costs.