AI Drafter 
TaxTMI 
TaxTMI 
2000 (8) TMI 1126
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.... which the protest contemplated by the first two provisos to Section 31(2) has to be lodged? Can such a protest be lodged subsequently, after receiving the payment without protest? (iii) If the acceptance of compensation under protest is the sine qua non as required by the second proviso to Section 31(2) to the making of an application under Section 18, can such a protest be made orally or whether it is necessary that such protest should always be in writing? (iv) If there is neither a written protest nor even an oral protest (assuming that oral protest is permissible) made at the time of receiving payment, is the mere making of an application under Section 18 of the Act, by itself, sufficient to infer that the claimant must be deemed to have accepted the amount under protest so as not to disentitle him of the remedy under Section 18 of the Act? In other words, can an oral protest be inferred to have been made merely because, subsequently, an application for reference has been made under Section 18 of the Act? 3. These petitions were initially heard by a learned Single Judge. He referred them to a Division Bench. His order refers to the apparent conflict in the....
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....rmination of just compensation. It was further held in Kannan's case that, "the fact that Appellant has sent Ext. P-1 on the very next day itself amply proves that he would not have received the amount on 20th May, 1996 without any protest". The Division Bench in Kannan's case decided on 24th June, 1999, preferred to rely upon the observations of the Apex Court in Ajit Singh's case (supra). 7. In view of the above, the Division Bench referred the matters to a Full Bench for resolving the conflicting views expressed by two Division Benches of this Court (i) in K. Raghavan's case and (ii) in Kannan's case. In order to answer the above questions, it is necessary to reproduce the provisions of Sections 18, 19, 20 and 31 of the Act. 8. Section 18 of the Act reads as under: 18. Reference to Court. Any person interested who has not accepted the award may, by written application to the Collector, require that the matter be referred by the Collector for the determination of the Court, whether his objection be to the measurement of the land, the amount of the compensation, the persons to whom it is payable, or the apportionment of the compensation among the....
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....ent of the compensation awarded by him to the persons interested entitled thereto according to the award, and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next Sub-section. (2) If they shall not consent to receive it, or if there be no person competent to alienate the land, or if there be any dispute as to the title to receive the compensation or as to the apportionment of it, the Collector shall deposit the amount of the compensation in the Court to which a reference under Section 18 would be submitted: Provided that any person admitted to be interested may receive such payment under protest as to the sufficiency of the amount: Provided also that no person who has received the amount otherwise than under protest shall be entitled to make any application under Section 18: Provided also that nothing herein contained shall affect the liability of any person, who may receive the whole or any part of any compensation awarded under this Act, to pay the same to the person lawfully entitled thereto. (3) Not with standing anything in this section, the Collector may, with the sanction of the appr....
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....asurement of the land; (ii) the amount of compensation; (iii) the persons to whom it is payable; or (iv) the apportionment of the compensation among the persons interested. Section 18(2) makes it clear that the application under Section 8(1) shall state the grounds on which the objection to the award is taken. Section 19 dealing with the Collector's statement to the Court enjoins the Collector to state for the information of the Court, in writing under his hand, several factors. Clause (d) of Sub-section (1) says that if the objection be to the amount of the compensation, the grounds on which the amounc of compensation was determined be stated. Section 20 dealing with 'service of notice' casts a duty on the Court to serve notices on several persons-(a) the applicant 5(b) all persons interested in the objection, except such (if any) of them as have consented without protest to receive payment of the compensation awarded; and (c) if the objection is in regard to the area of the land or to the amount of the compensation, the Collector. Reading the above provisions in Sections 31 and 18 together, there is no doubt in our mind that an application for reference under Section ....
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....t lodged any protest were also held entitled to enhanced compensation. 17. In Wardington's case (supra), the award was made on 17th May, 1989. The Appellants received the compensation on 5th July, 1989 under agreement Ext. B which was signed by them and the Collector. Thereafter, on 8th August 1989, they objected to the amount of compensation determined by the Collector and claimed enhanced compensation by way of reference. On appeal by the State, the High Court reversed the decree of the reference court and held that since the claimants had agreed in Ext. B and received the compensation subject to the terms and conditions in Ext. B, they were not entitled to make an application for reference. In agreement Ext. B, they had stated: "...the total amount of compensation arrived at is fully acceptable to us". A contention was raised before the Apex Court that despite the agreement Ext. B under which the compensation was accepted, there was later on a protest and hence, the application for reference was maintainable. Construing the scheme of the provisions of Section 31 read with Section 18 of the Act in Para 4 of the judgment, the Apex Court held in Para 5 of the judgment as und....
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....above, (i) Wardington and (ii) Shivabai that, on a consideration of the scheme of the provisions of Section 31 read with Section 18 of the Act, the court came to the conclusion that no person who has received the amount otherwise than under protest would be entitled to make an application under Section 18. In other words, the receipt of the amount under protest is a condition precedent for making an application for reference under Section 18 within the limitation prescribed. 20. In view of the decisions in Wardington's case and (ii) Shivabai's case, it is now well settled position in law that, claimants who receive the compensation under protest and who make application under Section 18(1) of the Act within the prescribed limitation alone are entitled to seek a reference. It is not, as if, a claimant can receive the compensation without protest and subsequently make an application for xeference under Section 18 and contend that making of application under Section 18 of the Act, itself, manifests his intention and, therefore, he must be deemed to have accepted the compensation under protest. To that extent, the observations made in para 5 of the judgment in Ajit Singh'....
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....When we come to Section 31, Sub-section (1) deals with the Collector tendering payment of compensation to the persons interested and entitled thereto according to the award and has to pay the amount to them. If, however, the Collector is prevented by one or more contingencies mentioned, in Section 31(2), then instead of paying the amount, he is obliged to deposit the amount in the Court to which a reference under Section 18 would be submitted. The contingencies mentioned in Section 31(2) are-(i) if the persons interested shall not consent to receive it; (ii) if there be no person competent to alienate the land; (iii) if there be any dispute as to the title to receive the compensation or as to the apportionment of it. The first proviso to Section 31 has obviously to be read with Sub-section (1) under which the payment is made to persons interested and entitled to compensation. They may receive the payment under protest as to the sufficiency of the amount. The words "protest as to the sufficiency of the amount" may take within their sweep several grounds on which a protest can be lodged regarding the amount not being sufficient. The grounds are already indicated in Section 18(1) disc....
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....m laid down by the Apex Court, our answer to the first question is as under: An application seeking a reference Under Section 18 of the Act is not maintainable, unless the applicant proves that he had received the payment under protest. It would, therefore, follow that if the compensation was received without protest, application seeking a reference Under Section 18 will n it be maintainable. 26. Question No. What is the stage at which the protest contemplated by the first two provisos to Section 31(2) has to be lodged? Can such a protest be lodged subsequently, after receiving the payment without protest? The opening words of Section 18(1) of the Act are, "any person interested who has not accepted the award may, by written application to the Collector require that The first proviso to Section 31(2) reads, "provided that any person admitted to be interested may receive such payment under protest as to the sufficiency of the amount". The second proviso to Section 31(2) of the Act says, "provided also that no person who has received the amount otherwise than under protest shall be entitled to make any a under Section 18". Reading the above provisions together, it a....
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....icated above, it was held that application for reference was not a proper document where the protest could be recorded for the first time. Hence, the claimants plea was rejected. 28. In S.M.A. Somasundaram Mudaliar v. District Collector Chittoor A.I.R. 1967 AP 126, the award was made on 16th July, 1960. The claimant received the bill drawn on the treasury for the amount payable to him on the same day at 10-30a.m, He received it without protest. Later on at 3.30 p.m., he appeared before the Land Acquisition Officer and filed a petition disputing the amount of compensation awarded to him and requiring that the matter be referred for determination by the court. He did state in the application that he had received the bill under protest, but that was an incorrect statement. The Land Acquisition Officer rejected his application on the ground that he had received the bill for the amount without protest. Claimant had cashed the bill on 18th July, 1960. Analysing the scheme of the provisions, the Andhra Pradesh High Court held that a protest is contemplated at the time of receipt of payment. It would not fit in with the scheme of the Act that the payment could be received today by a bil....
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...., 1956, payment was made to the claimant on L5th March, 1956 which was accepted without protest. On 24th April, 1956, the claimant made an application for reference under Section 18 of the Act. Question arose whether the application for reference was maintainable. It was held in para 10 of the judgment that if the person had accepted the payment without protest, the application for reference must be rejected without going into the merits thereof. 31. In Fateh Singh v. Land Acquisition Collector A.I.R. 1976 Delhi 162 it has been held that protest under second proviso to Section 31(2) of the Act must be made at the time when the Collector tenders the payment. Acceptance of cheque amounts to acceptance of payment, and if no protest was made at the time of such acceptance, no application will lie under Section 18 of the Act. It is immaterial that the cheque was encashed later. The cheque is looked upon as a p 3yment. Reliance was placed on the decision of Chagla, C.J. in Kirloskar Bros. Ltd. v. Commissioner of Income Tax, Bombay A.I.R. 1952 Bom 306 to hold that cheque is looked upon as a payment. If a creditor accepts the cheque in place of country's currenky, it was immaterial ....
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.... receiving the compensation. If the compensation was received without any protest, the application for reference would not be maintainable. Since, it was held that there was no protest at the time of receiving the compensation by cheque, the application for reference was rejected. Reliance was placed on the two decisions of the Apex Court, viz. (t) Wardington's and (ii) Shivabai's. Special Leave Petition (C) No. 20790/98 against the decision of this Court in K. Ragha van's case was summarily dismissed on 18th January, 1999. 35. In the light of the above catena of decisions, including the two decisions of the Apex Court and one of the Division Bench of this Court in K. Raghavan's case, with respect, the view taken in Kannan's case (para 6 supra) seems to be contrary to the settled legal position. In Kannan's case, the award was made on 15th April, 1996, and ser' on the claimant on 16th May, 1996. Possession of the property was handed over on 18th May, 1 and compensation was received by the claimant on 20th May, 19 without lodging any written protest. On 21st May, 1996, the claimant submitted application under Section 18. Though the claimant stated that....
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....or's statement to the court, clause (d) of Sub-section (1) requires the Collector to state if the objection be to the amount of compensation, thegrounds on which the amount of compensation was determined. Under Section 20 dealing with service of notice, the Court has to serve notice, inter alia, on persons interested in the objection, except such of them as have consented without protest to receive payment of the compensation awarded. 38. When we turn to Section 31, in none of the two proviso to Section 31(2) where the word "protest" occurs, is there any reference to the mode of lodging a protest or the fact that the protest should be in writing. All that is stated in the first proviso is that "provided that any person admitted to be interested may receive such payment under protest as to the sufficiency of the amount". Similarly the second proviso reads thus: Provided also that no person who has received the amount otherwise than under protest shall be entitled to make any application under Section 18. No rule or form prescribed either under the Central Act or the Kerala Land Acquisition Manual has been brought to our notice to contend that the protest must nece....
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..... 309 of 2000 decided on 29th March, 20C0, took a similar view. Relying upon the provisions of Sections 31 and 18 of the Act, it was held that, it was nowhere laid down that the piotest should be in writing. 42. In this view of the matter our answer to the third question is that protest contemplated by the provisos to Section 31(2) can be an oral protest and it is not neccstary that the protest should always be in writing. 43. Question No. (iv) If there is neither a written protest nor even an oral protest (assuming that oral protest is permissible) made at the time of receiving payment, is the mere making of an application under Section 18 of the Act, by itself, sufficient to infer that the claimant must be deemed to have accepted the amount under protest so as not to disentitle him of the remedy under Section 18 of the Act. In other words, can an oral protest be inferred to have been made merely because, subsequently, an application for reference has been made under Section 18 of the Act. As indicated earlier, under Section 31(1), on making an award under Section 11, the Collector has to Under payment of compensation to the persons entitled thereto unless he is preven....
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.... Protest. A formal declaration made by a person interested or concerned in some act about to be done, or already performed, whereby he expresses.his dissent or disapproval, or affirms the act against his will. The object of such a declaration is generally to save some right which would be lost to him if his implied assent could be made out, or to exonerate himself from some responsibility which would attach to him unless he expressly negatived his assent. * * * The formal statement, usually in writing, made by a person who is called upon by public authority to pay a sum of money, in which he declares that he does not concede the legality or justice of the claim or his duty to pay it, or that he disputes the amount demanded; the object being to save his right to recover or reclaim the amount, which right would be lost by his acquiescence. Thus, taxes may be paid under 'protest'. The word "objection" has been defined at page 967 and 968 in the same Dictionary as under: Objection. Act of objecting; that which is, or may be, presented in opposition; an adverse reason or argument; a reason for objecting or opposing; a feeling of disapproval. ....
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....ceived the compensation under protest; and (ii) he must make an application under Section 18(1). These two decisions, therefore, make it clear that lodging of a protest at tiie time of receiving the payment and making of an application under Section 18(1) are two different and distinct events. The fact that an application seeking a reference under Section 18(1) is made does not, by itself, indicate that the claimant must have lodged the protest when he received the payment. 47. We will now refer to a few High Court decisions on the point In Mrs. S. Thomas v. The Collector of Madras A.I.R. 1958 Mad 186, the claimant had received the payment without protest. He thereafter filed an application for reference under Section 18. A contention was raised that the filing of an application for reference must be taken to mean that the claimant had not accepted the award and further that he had protested. The contention was rejected. It was held that the acceptance of an award under Section 18 and the consent referred to in Section 31(2) connote the same idea and is an inference to be drawn from the same facts. 48. In BakshiRam Jain v. State of Haryana 1997 (2) L.A.C.C. 590,(para 40 supra....
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..... Reliance was also placed by him on the observations in para 9 of the judgment in Shivabai's case reproduced in para 18 above. Mr. Philip Mathew also placed reliance on the judgment of the Gujarat High Court in Machabhai Bakorbhai v. State of Gujarat 1998 (2) L.A.C.C. 157, where it has been held that when an application was made by the claimant requesting the Collector to refer the matter to the competent court, it was incumbent on the Collector to refer the matter in accordance with the provisions of Section 18 to a competent court. The claimant's case was that he never accepted the award. In this view of the matter, it is held that the application was maintainable under Section 18 as the acceptance of the amount offered by the Land Acquisition Officer would not preclude the claimant from raising a distpute and getting the matter referred to a competent court in accordance with law. These obseivations are made in paiagraph 4 of the judgment at page 158. 51. It is true that relying upon the observations of the Apex Court in Ajit Singh's case, a Division Bench of this Court in Kannan's case has taken the view that though there was a word against word on the quest....
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....cepted the amount under protest. There is no doubt that the making of an application under Section 18 is a must for seeking a reference by the Collector to the Court. But when the statute makes it clear in the second proviso to Section 31(2) that no person who has received the amount otherwise than under protest, shall be entitled to make any application under Section 18, it is difficult to see how the making of an application under Section 18 is itself an evidence of a prior event that the protest must have been made when the compensation was received. There are cases where compensation has been received without protest and subsequently protest was lodged. The courts have refused to entertain the applications. In Mrs. S. Thoma's case (para 47 supra) the Madras High Court refused to accept the contention ihat the making of an application under Section 18 must be taken to mean that the claimant had not accepted the amount without protest. Similarly in S.M.A. Somasundaram Mudaliar's case (para 28 supra) the claimant received the amount at 10.30 a.m. without protest and later on at 3.30 p.m. appeared before the Land Acquisition Officer and raised the objection as to the amount....
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....n oral protest was made at the time of receipt of the payment, which would be a question depending upon the facts of each case, the mere making of an application under Section 18 must lead to the necessary inference that the claimant must have received the payment under proti st as to the sufficiency of the amount within the meaning of the first proviso to Section 31(2). Such a person would therefore, not be hit by the second proviso. One can well imagine the consequence of such an interpretation. Persons receiving the amount without protest, indeed in certain cases, accepting the amount willingly and signing an agreement to that effect, as was done in Wardington's case, would later on be entitled to make an application under Section 18. If it is held that merely because a person claims to be dissatisfied with the sufficiency of the amount in the sense that he has made an application under Section 18 claiming a reference, one cannot necessarily come to the conclusion that he had accepted the amount under protest. We are afraid, such a proposition would amount to rewriting the second proviso to Section 31(2). In our view this will be wholly impermissible in the scheme of Section....
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..... Particulars of amount entered in column 8 of the award statement are split up into four sub columns; (a) amount accepted without protest; [b) amount accepted under protest; (c) amount deposited in court and (d) amount undisbursed owing to non-attendance and the treasury in which it is deposited. This column reads as under: Particulars of amount entered in column 8 of the award statement 57. Thus, on the facts of an individual case, it would depend on the actual evidence produced to come to the conclusion whether the amount was accepted under protest or without protest. Needless to say that such an excrcise can be undertaken by the Court as was done by the Apex Court itself in Shivabai's case (supra). The acquittance register was sent for and it transpired that the concerned officer himself had acted in collusion with the claimants and had made a reference at the behest of persons who could not make an application under Section 18(1) of the Act. The relevant observations are in para 9 of the judgment of the Apex Court in Shivabai's case reproduced in para 18 above. It is not unknown, though fortunately in few cases, that officers of the State Government may act....
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.... manifest their intention. Therefore, the protest against the award of the Collector is implied notwithstanding the acceptance of compensation. With great respect, the above quoted observation can neither be construed as the ratio or even an obiter in that case. Mr. Philip Mathew, the learned Counsel for the Petitioners contended that since the decision in Ajit Singh's case is also a two Judge Bench decision, it should be preferred to the subsequent two decisions of equal strength, namely, Wardington's case and Shivabai's case each of which was decided by two learned Judges. Our attention was invited by Mr. Philip Mathew to a decision in Indian Oil Corporation Ltd. v. Municipal Corporation (1995) 4 S.C.C 96. The facts of that case are clearly distinguishable and hence its ratio can have no application to the question raised before us. Under Article 141 of the Constitution, it is the law declared by the Apex Court which would undoubtedly be binding on all courts within the territory of India. Article 141 reads as under: 141. Law declared by Supreme Court to be binding on all courts. The law declared by the Supreme Court shall be binding on all the courts with....
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....ut any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law. * * * * Law declared is not that can be culled out, but that which is stated as law to be accepted and applied. A conclusion without reference to relevant provision of law is weaker than even casual observation. (emphasis ours) 60. K. S. Radhakrishnan, J. speaking for the Court in Alavi's case then observed: It is therefore well settled that what is the essence of a decision is its ratio and not every observation, nor what logically follows from various observations made in it. Reference was made to the decision in Quinn v. Leathern (1901) A.C. 495 , where the observations of Lord Halsbury, L.C. appeared to the following effect: ...there are two observations of a general character which I wish to make and one is to repeat what I have every often said before, that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the ....
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....es of the Apex Court consist of equal number of Judges, the later of the two decisions should be followed by the High Courtc and other courts. This opinion of the Full Bench is to be found in para 12 at page 95. (iii) In Amar Singh Yadav v. Shanti Devi A.I.R. 1987 Pat 191, a Full Bench of the Patna High Court held that where there is a direct conflict between two decisions of the Apex Court rendered by Benches of equal strength, the High Court must follow that judgment which appears to it to state the law more elaborately and accurately. The said observations are to be found in para 24 of the judgment at page 201. 62. Applying the above principles we have no hesitation in coming to the conclusion that the observation in Ajit Singh's case decided by the Apex Court on 18th March, 1994 namely: "Inasmuch as the Appellants have filed an application for reference under Section 18 of the Act, that will manifest their intention. Therefore, the protest against the award of the Collector is implied notwithstanding the acceptance of compensation" cannot be taken to be the law declared by the Apex Court so as to be binding on us by virtue of Article 141. It appears to us to be ....
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....ery next day of receiving the compensation amount will manifest his intention...protest against the award of the Collector is implied notwithstanding the acceptance of compensation. It is true that the learned Judges were dealing with the situation where there was a word against word on the question of oral protest. But, as indicated earlier, it is one thing to accept the evidence of the claimant on the question of oral protest and reject the contention of the Land Acquisition Officer. It is quite a different thing, to conclude that the making of an application for reference on the very next day, by itself, proves that the claimant must not have accepted the amount earlier without any protest. To that extent the decision in Kannan's case must be held to be limited to the facts of that case and not laying down any general proposition of law. Indeed it would be contrary to the ratio of the decisions of the Apex Court in Wardington's case and in Shivabai's case quoted in para 62 above. 64. In view of the above our answer to the fourth question is as under: If there is neither a written protest nor an oral protest at the time of receiving the compensation, the mere ma....