TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 1354
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....of the SLP Nos. 31624-31625 of 2014 is preferred against the judgment and order dated 22.09.2014 passed in Review Petition No. 2537 of 2013 in MFA No. 32157 of 2012 (filed by the KIADB) and Writ Petition No. 100860 of 2013 (filed by the Company) of the Karnataka High Court, Gulbarga Bench whereby the High Court has remanded the matter to the Reference Court for reconsideration of the case. 4. Challenge in the appeals arising out of SLP Nos. 3482-3484 of 2015, filed by the Karnataka Industrial Area Development Board is arising out of the judgment and order dated 22.09.2014 passed by the High Court of Karnataka, Gulbarga bench, in Review Petition No. 2537 of 2013 in MFA No. 32157 of 2012, Misc. First Appeal No. 30702 of 2013 and writ petition No. 100860 of 2013, whereunder the High Court was pleased to dispose of the above mentioned appeal and petitions by remitting the matter to the Reference Court to give an opportunity of hearing to the beneficiary and incidentally to the Petitioner therein (the allottee Company). The said appeals were filed by the KIADB as it was aggrieved of certain observations made in the judgment, while remanding the case, which affects the merits of the cas....
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....oposal to the State of Karnataka-Respondent to set up a cement manufacturing plant and applied for acquisition and allotment of 1187 acres and 5 guntas of land towards setting up of a factory, residential colony etc at Malkhed, Gulbarga. This fact is not supported by the original land acquisition record of the government produced before this Court by the State government's counsel. 7. The state government issued preliminary notification dated 18.06.1981 Under Section 28(1) of the KIAD Act for acquisition of land measuring 1187.15 acres in favour of the KIADB which included the land of the Appellants. The notification also stated that the acquisition of land was for the purpose of establishment of industries. The State Government on 24.11.1981 issued declaration as contemplated Under Section 28(4) of the KIAD Act. The state government on 03.12.1981 issued notices upon the interested parties Under Section 28(6) of the KIAD Act. 8. The Special Deputy Commissioner, Gulbarga, vide award dated 28.05.1982 fixed the market value of the acquired land at Rs. 1700/- per acre along with other statutory payments such as 15% solatium and statutory interest payable on the compensation amoun....
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....8.05.1982, as all the acquisition proceedings with respect to the notifications of the state government dated 24.11.1981 had been stayed by the learned single Judge of the Karnataka High Court vide an interim order dated 05.03.1982 in Writ Petition Nos. 9356 to 9361 of 1982, filed by the Appellants and other land owners who were affected by the acquisition of land and the interim order was operating on the date of passing of the award referred to supra, which fact was neither noticed by the Reference Court nor by the High Court. 11. Accordingly, the amended claim petition was filed by the Appellant (since deceased) before the Reference Court after remand order passed by this Court seeking compensation at the rate of Rs. 2,50,000/- per acre before the Principal Civil Judge, Gulbarga, who relied upon the judgment and order of the Karnataka High Court dated 27.02.2005 in MFA No. 3796 of 2005 and Cross Objection No. 213 of 2005, which had relied upon the sale deeds of the sites carved out in Sy. No. 389 at the rate of Rs. 7.5/- per sq. feet. The reference of the Sy. No. 414/2 of the same village according to which the sale deed had been executed at the rate of Rs. 13/- per sq. feet in....
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....ted MFA No. 30702 of 2013 against the judgment and Award passed by the Reference Court in LAC No. 943 of 1997 M/s. Ultra Tech Cement Ltd. through its Unit M/s. Rajashree Cement Ltd. filed Writ Petition No. 100860 of 2013 before the High Court on 19.03.2013 questioning the correctness of the award of compensation passed in favour of the land owners on the ground that they are the necessary party to the reference proceedings before the Reference Court and they were not notified in the said proceedings. The learned single Judge set aside the judgment and award order of the Reference Court by allowing the above writ petition and directed it to afford an opportunity of hearing to the alleged beneficiary-Company to participate in the proceedings and to decide the matter on merits in accordance with law after affording opportunity to the Company. 15. Aggrieved by the supplementary awards passed by the Special Deputy Commissioner dated 30.12.1992 and 02.01.1993, the Company filed Writ Petition No. 8707 of 1993 before the High Court of Karnataka challenging the legality and validity of the same. The learned single judge held that after the amendment in the L.A. Act, the land owners were en....
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.... land before the Reference Court. 18. The learned senior Counsel has further contended that the State Government through KIADB should not have been allowed to file either MFA or writ petition after the same matter had already been decided by the High Court at the instance of the Appellants. In support of her above legal submission she has placed reliance upon the decision of this Court in the case of Ramchandra Dahdu Sonavane (dead) by L.Rs. and Ors. v. Vithu Hira Mahar (dead) by L.Rs. and Ors. (2009) 10 SCC 273. on the question of res judicata wherein this Court has observed that once the matter which was the subject matter of lis stood determined by a competent court, no party thereafter can be permitted to reopen it in a subsequent litigation. Such rule was brought into the statute book with a view to bring such litigation to an end whose ultimate purpose is to harass the other party. It is further contended by the learned senior Counsel that the matter is concluded by the High Court in the MFA filed by the Appellants and as such the question of reviewing the judgment and order passed by it does not arise unless there is an error apparent on the face of the record. She has plac....
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.... It is further submitted by the learned senior Counsel on behalf of the Appellants that this specific issue was raised before the High Court, the same was not answered and therefore, there is no question of remanding the matter back to the Reference Court without recording the finding with valid and cogent reasons. 21. It is further contended by the learned senior Counsel appearing on behalf of Appellants that the High Court has committed a serious error in law in remanding of matter to the Reference Court after about 33 years of initiation of acquisition proceedings in a casual manner without examining the relevant provisions of the KIAD Act, L.A. Act, Regulations and the law laid down by this Court in this regard. It is impermissible in law for the High Court to entertain a non maintainable Writ Petition filed by the Company which is an allottee, and it has no right under the provisions of the L.A. Act to get impleaded as a party either in the reference proceedings or avail appeal remedy provided Under Section 54 of the L.A. Act against the award passed by the Reference Court as it has no right under the provisions of the L.A. Act to question the correctness of the award with re....
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....nds acquired in favour of KIADB. The material documents produced in these proceedings either by the state government or KIADB to assume the fact that the acquisition of the land is made at the behest of and at the expense of the Company is not factually correct. This fact is evident from the acquisition notifications issued by the state government under the provisions of the KIAD Act. On the contrary, as per the acquisition notifications it is acquired in favour of the KIADB for the formation of an Industrial Estate in the Industrial Area. Therefore, the Company cannot assert that it is either a beneficiary of the acquisition of land or a person interested for the purposes of KIAD Act or L.A. Act to give an opportunity for it to participate in the proceedings to determine the market value of the acquired land either before the Special Deputy Commissioner or Reference Court to pass an award, awarding just and reasonable compensation in favour of the Appellants in respect of their acquired land. 22. It is further contended by the learned senior Counsel on behalf of the Appellants that as per Section 29 of the KIAD Act, where any land is acquired by the State Government, it shall pay....
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....ion or agreement in this regard. Similarly, no other private person like the Company has a say in this matter. 29. It is only when such an agreement cannot be reached, State Government has to refer the case to the 'Deputy Commissioner' for determination of the amount of compensation. On receipt of reference, the Dy. Commissioner has to issue notice Under Section 29(4) on the owner or occupier of the land and on all persons known or believed to be interested herein to appear before him and state their respective interests in the said land. Here, again, no provision to notify the KIADB or the Company is contemplated." (Emphasis laid by this Court) 25. Further, it is contended by the learned senior Counsel on behalf of the Appellants that this Court issued notice and permitted Dasti in SLP No. 19819 of 2013 arising out of the judgment and order passed by the High Court in MFA 32157 of 2012 vide order dated 11.07.2013. This Court has also additionally mentioned in the said order that the notice shall indicate that this Court is likely to grant leave, set aside the impugned order and enhance the compensation awarded by the Reference Court. 26. On the other hand, Mr. Ranjit....
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.... valid? 4) Whether the owners of the land are entitled for the enhanced compensation? 5) If so, what award? 29. The point Nos. 1, 2 and 3 are answered together as they are inter-related by assigning the following reasons: It is an undisputed fact that the acquisition of land of the Appellants was acquired along with the lands of the other owners at the instance of the KIADB by the state government in exercise of its power Under Section 28 of the KIAD Act in favour of the KIADB for the purpose of formation of industrial estate in the Industrial Area to establish industries at Sedam Taluk, Gulbarga District. 30. Section 28(1) of the KIAD Act, envisages that if, at any time, the State Government is of the opinion that any land is required for the purpose of development by KIADB or for any other purpose in furtherance of the objects of this Act, it may by notification, give notice of its intention to acquire such land. The Land Acquisition Officer after considering the cause, if any, shown by the owner of the land and by any other person interested therein and after giving such owner and person an opportunity of being heard, may pass such orders as it may deem fit for acquiring....
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.... the KIAD Act states that the provisions of the L.A. Act shall mutatis mutandis apply in respect of holding enquiry and to pass an award of compensation by the Deputy Commissioner by determining the market value of the land. The case may be referred to the Reference Court for the apportionment of the compensation payable to such person or persons if there is any dispute regarding claims and the payment of compensation in respect of the acquired land under Chapter VII of the KIAD Act. In view of the above statutory provisions of the KIAD Act, the provisions of Sections 11, 18 and 30 of the L.A. Act are applicable for the purpose of determination of just and reasonable compensation of the acquired land payable to the land owners either by the Deputy Commissioner or Reference Court. 34. Further, it is necessary for us to examine Section 32(2) of the KIAD Act, which provides that any land transferred in favour of the KIADB by the State Government, developed by or under the control and supervision of the KIADB shall be dealt with by it in accordance with the Regulations framed by it after approval by the state government and as per directions given by the state government in that behal....
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....he KIADB Regulations provides that the KIADB after being satisfied that the person, firm or Company who makes an application is likely to start production within a reasonable period, and is not one which is declared obnoxious Under Regulation 14, may make an allotment in his/their favour thereafter. Clause (b) of the Regulation 10 of the KIADB Regulations empowers the KIADB to constitute sub-committees for considering the applications for allotment of plots and also delegate its power to the Executive Member of the Board; if necessary for the purpose of allotment of industrial plant/shed. Clause (c) of the Regulation 10 of the KIADB Regulations empowers Executive Member to notify such applicant to whom an allotment is made and to execute the agreement in Form 3 or 4 or 5 as the case may be with such modification as may be required in each case on such date, time and place. Clause (d) of Regulation 10 of the KIADB Regulations provides that failure to execute the agreement or to pay the sums demanded by the Executive Member as per notice given Under Regulation 10(c) will render the allottee to have deemed to have declined the allotment; Clause (e) of Regulation 10 grants the discreti....
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....to acquire the said land in favour of industrial development by the KIADB. 45. Clause 1 of Annexure P-5, which is a copy of the agreement made between KIADB and M/S. Rajshree Cements reads thus: An agreement made at Gulbarga the Second day of April, 2005 between the Karnataka Industrial Area Development Board having its office at Kapnoor 1st Stage Industrial Area Humnabad Road Gulbarga represented by Sr. G.H. SREEDHARA, Deputy Development Officer hereinafter called the 'lessor' (which term shall wherever the context so permits, and include its successors in interest) of the one part M/s. Rajashree Cement, Aditya Nagar, Malkhed, represented) by Sri Sunil Kothari Vice-President (F&C) hereinafter called the 'lessee' (which term shall wherever the context so permits, mean and include his/her/its heirs, executor, administrators, assignee and legal representatives) of the other part.... NOW IT IS HEREBY AGREED BETWEEN THE PARTIES HERETO as follows: 1. In consideration of the sum of Rs. 65,704.00 paid by the lessee to the lessor as premium and of the rent hereby reserved and of the covenants and agreements on the part of the lessee hereinafter contained the lessor h....
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.... amounts to the land owners for the Malkies and structures existing on the demised premises, the same shall be met by the lessor within one month from the date of receipt of communication signed by the Executive Member or any other officer authorised by the lessor. b) As soon as it may be convenient the lessor will fix the price of the demised premises at which it will be sold to the lessee and communicate it to the lessee and decision of the lessor in this regard will be final and binding, on, the lessee. The lessee shall pay the balance of the value of the property, if any after adjusting the premium and the total amount of rent paid by the lessee and earnest money deposit within one month from the date of receipt of communication signed by the lessor or any other officer authorised in this behalf by the lessor. On the other hand, if any sum is determined as payable by the lessor to the lessee after the adjustment as aforesaid, such sum shall be refunded to the lessee before the date of execution of the sale deed. (Emphasis laid by this Court) 47. On a careful examination of the aforesaid clauses of the lease agreement executed between the parties in respect of the land of t....
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....ansfers the same in favour of the KIADB for its development and disposal of the same in accordance with Regulation 10(a) of the KIADB Regulations, referred to supra. 50. In the instant case, a perusal of the provisions of the lease agreement executed between the parties referred to supra and Regulation 10 Clauses (a), (c), (d) and (e) of the KIADB Regulations make it abundantly clear that the Company is only the allottee-lessee of the acquired land and as per Clauses 5(a) and (b) of the lease agreement referred to supra, the premium indicated in the lease agreement in respect of the allotted land in its favour represents the tentative cost of the land. It has been further specified in the lease agreement that in the event of the lessor incurring the payment of amounts to the land owners over and above the awards made by the acquiring authority by virtue of awards passed by the competent court of law in view of the provisions of the Land Acquisition (Amendment) Act, 1984 in respect of demised premises or any part thereof, the same shall be met by the lessee within one month from the date of receipt of communication signed by the Executive Member or any other officer authorized by t....
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....d is needed for the construction of some work, and such work is likely to prove substantially useful to the public; or b) where the land is needed by a building co-operative society or corporation for the construction of houses. The said contention of the learned senior Counsel is wholly misconceived as the said provision has no application to the fact situation. 54. The acquisition of land under the provisions of the L.A. Act in favour of a Company the mandatory procedure as provided under part VII of the L.A. Act and Rules must be adhered to, that is not the case in the acquisition of land involved in these proceedings as the acquisition of land is under the provisions of KIAD Act and therefore the reliance placed upon the provision of Section 3(f)(viii) of the Karnataka L.A. Amended Act of 17/1961 is not applicable to the facts of the case on hand and therefore, the said provision cannot be made applicable to the case on hand. 55. The definition of "public purpose" under the L.A. Act cannot be imported to the acquisition of land by the State Government for the industrial development under the provision of KIAD Act as the words 'Development', 'Industrial Area' a....
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....Commissioner or before the Reference Court or the Appellate Court is wholly untenable in law and therefore, the submissions made on behalf of the Company cannot be accepted and the same is rejected. 58. Further, both the learned senior Counsel on behalf of KIADB and the Company have placed reliance on various decisions rendered by this Court in support of their above respective legal submissions that the Company is an interested person and therefore it has got right to participate in the proceedings before the Reference Court for determination of compensation before passing the award either by Land Acquisition Officer or Deputy Commissioner or the Reference Court at the instance of the owner or any other interested person. These include judgments rendered by this Court in the cases of U.P. Awas Evam Vikas v. Gyan Devi (1995) 2 SCC 326, Himalayan Tiles and Marble Pvt. Ltd. v. Francis Victor (1980) 3 SCC 223, and P. Narayanappa and Anr. v. State of Karnataka and Ors. (2006) 7 SCC 578 and other decisions which are not required to be mentioned in this judgment as they are all reiteration of the law laid down in the above cases. The reliance placed on the various decisions of this Cou....
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....tainable in law. On this ground itself, the Writ Petition filed by the Company should have been rejected by the High Court instead it has allowed and remanded the case to the Reference Court for re-consideration of the claims after affording opportunity to the Company which order suffers from error in law and therefore the same is liable to be set aside. 59. Further, the learned Judge of the High Court has erroneously held that the allottee Company is a beneficiary of the acquired land of the Appellants, which finding of the learned Judge is not correct both on facts and in law. The findings and reasons recorded by the High Court in the impugned judgment in allowing the Writ Petition and quashing the award of the Reference Court and remanding it back to the Reference Court and allowing the Company to participate in the proceedings for re-determination of compensation for the acquired land is wholly impermissible in law and the same are in contravention of the provisions of the KIAD Act, L.A. Act, the KIADB Regulations and the lease agreement, which has been executed by the KIADB in favour of the Company and therefore, the impugned judgment and order is liable to be set aside by al....
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....mpensation from Rs. 1,700/- per acre to Rs. 1,37,000/- per acre. The Reference Court relied on the judgment and order of the Karnataka High Court dated 27.02.2005 in MFA No. 3796 of 2005 and Cross Objection No. 213 of 2005, which pertains to the same village, where the lands of the owners were acquired for establishment of industries under notification in the year 1988. The High Court in the said case questioned the correctness of determination of market value by the Reference Court at Rs. 5.7/- per sq. ft. in Cross Objection No. 213 of 2005 filed by the Respondent-landowner in the said appeal. In arriving at the market value of the land under acquisition, the said compensation was made on the basis of the average of the various rates covered under various sale-deeds under different sites, carved out from the lands in survey numbers which lands are adjacent to the land covered in the said MFA and Cross Objection, located at different places and sold on different dates, which had been taken at Rs. 6.33 per sq. ft. The same had been escalated by 10% on the ground that the date of preliminary notification in that case was issued on 03.11.1988. The said sites under the said sale-deeds ....
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....on to be made from the value of the acquired land to be kept aside for providing developmental infrastructures like roads, parks etc and second component under the head of "development" should not exceed upper benchmark of 67%. It was further contended that the deductions towards the de-escalation and waiting charges can be made at appropriate rates but all the deductions put together should not exceed upper benchmark of 75%. In the Chandrashekar case referred to supra, the High Court had allowed 55% under the heading of development, 10% under de-escalation and 5% under waiting period which works out cumulatively to 70%. This Court had held that it did not call for any interference which is well within the upper benchmark of 75%. 66. It is further contended by the learned Solicitor General that the lands acquired by way of notification Sy. No. 389 were acquired in 1988, which could not be compared to the land in the instant case, which had been acquired by way of notification seven years earlier in 1981. It is further contended by him that the lands covered in this case are situated at 4 kms away from the land in Sy. No. 414/2, by relying on the village map. Hence, it is contended....
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....vailable for our perusal. 70. The statutory notifications of acquisition of land would clearly go to show that the land of the Appellants was acquired way back in the year 1981 for the purpose of establishment of industries The land of the Appellants has non-agricultural potentiality, which fact is proved from the notifications published by the State Government Under Sections 28(1) and (4) of the KIAD Act, as the State Government specifically mentioned therein that the acquisition of the land of the Appellants is for the industrial development and establishment of industries which is for non agricultural and commercial purpose. 71. Further, the land which has been covered under notification in 1988 is also adjacent to the residential sites which were formed. The land owners in that case produced the sale deeds of the year 1986 and 1988 respectively, which was 2 years and 2 months earlier respectively to the notification issued in the year 1988 and some of which were two to three years earlier. Taking the said relevant facts into consideration, the High Court of Karnataka re-determined the compensation at Rs. 7.5/- per sq. ft of land bearing Sy. No. 389 covered in award passed in ....
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....herein along with other lands that was acquired vide notification in 1981 have been allotted in favour of the Company for the purpose of extracting the mineral of limestone which is the raw material used for the purpose of manufacturing the cement used for the commercial purpose. Therefore, the land of the Appellants is acquired for the non-agricultural potentiality and the same is used for commercial purpose. Therefore, determining deductions towards de-escalation at 5% per year for 7 years and 10% towards waiting and other incidental charges would justify the re-determination of the market value of the land of the Appellants. There is no need to deduct the developmental charges as has been done by the Reference Court and Appellate Court in respect of the land covered under MFA No. 3796 of 2005 and Cross Objection No. 213 of 2005 upon which strong reliance has been placed by the learned senior Counsel for the Appellants, for the reason that there is no development activities involved in respect of the land involved in these appeals, as the same is being used by the Company for extraction of minerals from the land, which are used as a raw material for the purpose of manufacturing c....
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....timental value far in excess of its "market value". But the compensation must not be increased by reason of any such consideration. The vendor is to be treated as a vendor willing to sell at "the market price", to use the words of Section 23 of the Indian Act. It is perhaps desirable in this connection to say something about this expression "the market price". There is not in general any market for land in the sense in which one speaks of a market for shares or a market for sugar or any like commodity. The value of any such article at any particular time can readily be ascertained by the prices being obtained for similar articles in the market. In the case of land, its value in general can also be measured by a consideration of the prices that have been obtained in the past for land of similar quality and in similar positions, and this is what must be meant in general by "the market value" in Section 23. But sometimes ii happens that the land to be valued possesses some unusual, and it may be, unique features as regards its position or its potentialities. In such a case the arbitrator in determining its value will have no market value to guide him, and he will have to ascertain a....