D.D.A vs S.S. Aggarwal & Ors

Delhi Development Authority ......Appellant

Versus

S.S. Aggarwal and others ......Respondents

With

CIVIL APPEAL NO. 836 OF 2004

Union of India ......Appellants

Versus

S.S. Aggarwal and others ......Respondents

CIVIL APPEAL NOS.6264-6265 OF 2011

(Arising out of SLP (C) Nos. 18056-18057 of 2003)

S.S. Aggarwal and others etc. etc. ......Appellants

Versus

Union of India and another ......Respondents

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J U D G M E N T

G.S. Singhvi, J.

1. Leave granted in SLP(C) Nos. 18056-18057 of 2003.

2. These appeals are directed against judgment dated 21.2.2003 of the

Division Bench of the Delhi High Court whereby the appeals preferred by

two groups of persons i.e., S.S. Aggarwal and others and Om Prakash and

others under Section 54 of the Land Acquisition Act, 1894 (for short, "the

Act") were allowed and market value of the acquired land fixed by

Additional District Judge, Delhi (hereinafter described as, `the Reference

Court') was enhanced from Rs.102/- to Rs.7,390/- per square yard.

3. By notification dated 6.1.1995 issued under Section 4(1) read with

Section 17(1) of the Act, the Government of National Capital Territory of

Delhi proposed the acquisition of 27 bighas 5 biswas land situated at village

Jasola. After 4 days, the declaration was issued under Section 6 of the Act.

3 4. In response to the notice issued under Section 9 of the Act, the

landowners filed three claim petitions through the same Advocate, namely,

Ch. Sawrup Singh. One of the petitions was filed by Kishan Lal and 13

others. The other was filed by S.K. Sarogi and another and the third was

filed by Mangla Ram and 3 others. They pleaded that keeping in view the

prevailing market rates, they be paid compensation at least at the rate of

Rs.4,000/- per square yard. In support of their claim, the landowners relied

upon the allotments made by the Delhi Development Authority (for short,

`the DDA') at a concessional rate of Rs.2,200/- per square yard.

5. During the pendency of the matter before the Land Acquisition

Collector, Delhi, Mangla Ram and 3 others executed Assignment Deed

dated 21.9.1995 in favour of Om Prakash, Phire Ram and Vinod Kumar (all

sons of Ch. Swarup Singh, Advocate, who was representing the landowners

before the Land Acquisition Collector). The relevant portions of the

assignment deed are extracted below:

"WHEREAS, the Vendors are the actual owners of the

Acquired Land Total Measuring 8 Bighas and 5 Biswas, in

Khasra No. 133 situated in Revenue Estate of Village Jasola,

Tehsil Mehrauli, New Delhi.

That the above said land has been notified under Section 4 of

the Land Acquisition Act, 1894, on 6.1.1995, and declaration

under Section 6 and notification under 17(1) of the Land

Acquisition Act, 1894, has also been issued on 10th Jan. 1993

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but the compensation in respect of said land has not been

passed by Govt. to the Vendors so far.

AND WHEREAS, the possession of the said land has also been

taken by the Govt. on 22nd February, 1995.

AND WHEREAS, the Vendors have willingly agreed to sell

transfer the said compensation right of the said land measuring

8 bighas 5 biswas, in Khasra No. 133, of village Jasola, Tehsil

Mehrauli, New Delhi, whatsoever to be settled by the Land

Acquisition Collector in award or by the court in reference or in

revisions or appeals of the same in High Courts with all rights

to recover and receive the same from the concerned

authorities/deptts. for a sum of Rs.4,80,000/- [Rs. Four lacs and

eighty thousand only] and the Vendees have agreed to purchase

the same for said amount.

The entire consideration amount of Rs. 4,80,000/- [Rs

Four lacs and eighty thousand only], has already been received

in advance by the Vendors from the Vendees [the receipt

whereof, the Vendors admit and acknowledge] in full and final

settlement.

NOW THIS ASSIGMENT DEED WITNESSETH AS

UNDER:

1. That the Vendors do hereby sell, transfer, convey and

assign the compensation rights, whatsoever to be settled by the

Land Acquisition Collector inAward or by the courts in

reference perceptions, revisions as sale etc. of the same to be

filed in Delhi High Court and other higher courts with rights to

receive and recover the same from the concerned

authorities/Deptts. with each and every rights which vest in

their names as towards the above said award of the Land

Acquisition Collector and in reference, revisions, appeals etc.

upto the Vendees.

2. That the Vendors admit that they have no right left with

the compensation right to be settled in above said award or in

reference, revisions or appeals etc. and the same has become

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property of the Vendees, with the rights to receive and recover

the same.

3. That the Vendors admit that the Vendees are fully

entitled to substitute themselves before Land Acquisition

Collector in Award/reference as mentioned above and to

conduct the same. The vendors have handed over and delivered

the notices and other acquisition documents and all other

relevant papers/documents to the Vendees.

4. That the Vendors have assured the Vendees that they

have not entered into any agreement with anyone else for the

said transfer of the said compensation right to be settled in

award by the Land Acquisition Collector and references,

revisions, appeals, etc. and they further admit and declare that if

found and proved otherwise, then the Vendors shall be liable

and responsible to make good the losses suffered by the

Vendees and to repay the said received amount with costs and

damages to the Vendees. The Vendees then shall be entitled to

recover the said amount from the Vendors, their properties both

moveable and immovable.

5. That the Vendors declare that the Deed which is executed

by the Vendors in favour of the Vendees for that they are fully

entitled to execute the same without consent of any other

person/s are entitled owners of the same, they transferred their

rights, titles and interests and claims in the same for ever in

favour of the said Vendees. The heirs and successors of the

Vendors will have no right to challenge it."

6. The other landowners appear to have executed a similar assignment

deed in favour of S.S. Aggarwal and 5 others, who are appellants in the

appeal arising out of SLP(C) No.18056/2003.

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7. Although, the assignees were very much aware that claims filed by the

landowners were pending before the Land Acquisition Collector and in

terms of paragraph 3 of the assignment deeds, they could apply for

substitution, all of them deliberately kept quiet and did not produce

assignment deeds before the Land Acquisition Collector, who ultimately

passed award dated 11.10.1995 and fixed market value of the acquired land

at the rate of Rs.98/- per square yard.

8. After announcement of the award, S.S. Aggarwal and 5 others filed an

application under Section 18 of the Act for re-fixation of market value of the

acquired land at the rate of Rs.10,000/- per square yard by asserting that they

fall in the category of interested persons. Similar application was filed by

Om Prakash and two others. The Collector did not make any inquiry on the

issue of locus of S.S. Aggarwal and others to claim compensation and

referred the matter to the Court. The Reference Court too did not inquire

about the entitlement of S.S. Aggarwal and others to claim compensation

and disposed of the reference by fixing market value of the acquired land at

the rate of Rs.1,02,000/- per bigha.

9. Feeling dissatisfied with the determination made by the Reference

Court, S.S. Aggarwal and 5 others filed an appeal under Section 54 of the

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Act and claimed that even though they were entitled to enhanced

compensation at the rate of Rs.2,00,000/- per bigha, but due to paucity of

funds, they were limiting their claim to Rs.3,000/- per square yard. Similar

appeal was filed by Om Prakash and 2 others.

10. After four and a half years of filing the appeals, S.S. Aggarwal and 5

others filed C.M. No.1340 of 2002 under Order VI Rule 17 read with

Section 151 CPC for amendment of the memo of appeal so as to enable them

to claim compensation at the rate of Rs.7,000/- per square yard.

Simultaneously, they deposited court fee of Rs.4,98,000/- by assuming that

the High Court will necessarily accept their prayer for amendment. Notice

of the application was given to the counsel representing the Union of India

on 5.9.2002, but no order was passed granting or refusing the prayer for

amendment. The appeals were finally disposed of by the Division Bench of

the High Court vide judgment dated 21.2.2003 and market value of the

acquired land was fixed at Rs.7,390/- per square yard. By an order of the

same date, the Division Bench of the High Court allowed C.M. No.1340 of

2002 in the following terms:

"By this application amendment has been sought to the

memorandum of appeal. Such like applications have been

decided in a number of cases by this Court.

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Amendment to the memorandum of appeal to claim higher

amount of compensation has been sought on the ground that

while filing appeal, due to paucity of funds, the appellants

could not claim proper amount of compensation though in the

reference higher amount of compensation had been claimed by

them.

Considering the facts and circumstances of the case and the

principle that a claimant must be paid fair amount of

compensation in case his property is acquired for public

purpose by the State and relying upon the ratio of the decisions

of the Supreme Court in Harcharan Vs. State of Haryana AIR

1983 SC 43; Bhag Singh & Ors. Vs. Union Territory of

Chandigarh (1985) 3 SCC 737; Scheduled Caste Co-operative

Land Owing Society Ltd. Bhatinda vs. Union of India and

Others (1991) 1 SCC 174; Chand Kaur & Others Vs. Union of

India (1994) 4 SCC 663; Gokal vs. State of Haryana AIR 1992

S.C. 150 and Buta Singh (Dead) by L.Rs. Vs. Union of India

(1995) 5 SCC 284 the prayer made in the application is allowed

subject to the condition of the appellant making good the

deficiency in court fee within a period of four weeks, if not

already made good."

11. Ms. Gita Luthra, learned senior counsel appearing for the Union of

India assailed the impugned judgment mainly on the ground that the High

Court committed serious error by entertaining the amendment application

filed after a long time gap of four and a half years. She relied upon the

judgments of this Court in Buta Singh v. Union of India (1995) 5 SCC 284

and Union of India v. Pramod Gupta (2005) 12 SCC 1 and argued that the

High Court should not have granted the prayer for amendment because the

applicants had not given any tangible explanation for the long delay of four

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and a half years. Ms. Luthra further argued that the High Court was not

justified in disposing of the appeals without first deciding the amendment

application and giving an opportunity to the acquiring authority and the

ultimate beneficiary i.e. the DDA to contest the prayer made by S.S.

Aggarwal and others for fixation of market value at the rate of Rs.7,000/- per

square yard. Learned senior counsel then argued that the assignment deeds

executed by the landowners constituted the best piece of evidence for

determination of market value but the assignees deliberately withheld the

same from the Land Acquisition Officer, the Reference Court and the High

Court and this, by itself, should be treated as a ground for remitting the

matter to the Reference Court. Ms. Luthra further argued that the High

Court committed serious error by awarding compensation over and above

what was claimed in the amendment application and that too without taking

into consideration the fact that Om Prakash and others had not even filed an

application for amendment of the memo of appeal.

12. Shri Amarendra Sharan, learned senior counsel appearing for the

DDA argued that the impugned judgment is liable to be set aside because the

assignees had deliberately kept the Land Acquisition Collector, the

Reference Court and the High Court in dark about the assignment deeds

under which they claim to have purchased the right to get compensation by

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paying a meager sum of Rs.58/- per square yard to the landowners. Shri

Sharan referred to Sections 23 and 28 of the Contract Act and argued that

the assignment deeds are liable to be treated as void because the same are

not only opposed to public policy, but have the effect of defeating the

objects of the Delhi Lands (Restrictions on Transfer) Act, 1972, which

prohibit transfer of land after issue of notification under Section 4(1). In

support of this argument, Shri Amarendra Sharan relied upon the judgments

of this Court in Rattan Chand Hira Chand v. Askar Nawaz Jung (1991) 3

SCC 67, Murlidhar Dayandeo Kesekar v. Vishwanath Pandu Barde

(1995) Supp. 2 SCC 549, Central Inland Water Transport Corporation

v. Brojo Nath Ganguly (1986) 3 SCC 156 and Jayamma v. Maria Bai

(2004) 7 SCC 459. Shri Sharan lastly submitted that the landowners are

entitled to just and reasonable compensation as of right and the assignees

cannot take advantage of their better financial position to unduly enrich

themselves by getting huge compensation.

13. Shri Dhruv Mehta, learned senior counsel appearing for S.S.

Aggarwal and other assignees argued that the DDA does not have the locus

to question the assignment deeds by invoking Article 14 of the Constitution

and Sections 23 and 28 of the Contract Act because it was not a party before

the Reference Court. Shri Mehta emphasised that the assignment deeds are

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registered documents which were executed by the landowners with full

knowledge of the consequence of assignment and it is not open to the Union

of India and the DDA to indirectly question the transaction involving

transfer of the right to receive compensation. Shri Mehta relied upon the

judgments in Dawson v. Great Northern and City Railway Company

(1905) 1 KB 260, Sunrise Associates v. Government of NCT of Delhi

(2006) 5 SCC 603 and unreported judgment of the Delhi High Court in

Appeal No.140 of 1972-Laxmi Narayan v. Union of India and another

decided on 24.11.1977 and argued that the right to receive compensation is

in the nature of property right and the same can be assigned by the owner of

the property. Shri Mehta strongly supported the order passed by the High

Court granting leave for amendment of the claim by pointing out that the

landowners had claimed compensation at the rate of Rs.4,000/- and in the

applications filed under Section 18, the assignees had clearly indicated that

market value of the acquired land is at least Rs.10,000/- but due to paucity of

funds, they had restricted the claim to Rs.3,000/- per square yard.

14. We have considered the respective submissions in the back drop of

the fact that even though in terms of the assignment deeds, S.S. Aggarwal

and others became entitled to seek substitution before the Land Acquisition

Collector, they neither sought impleadment in the award proceedings nor

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produced the assignment deeds to show that the landowners had transferred

the right to receive compensation.

15. Learned senior counsel appearing for the assignees could not offer any

tangible explanation as to why his clients chose to keep the Land

Acquisition Collector, the Reference Court and the High Court in dark about

the execution of the assignment deeds by the landowners. Therefore, it is

reasonable to presume that they had done so deliberately and the only

possible reason for this could be to avoid a proper scrutiny by the Land

Acquisition Collector and two judicial forums about their entitlement to

receive compensation at a rate higher than Rs.58/- per square yard paid to

the landowners. If the assignment deeds had been produced before the Land

Acquisition Collector or the Reference Court, either of them could have held

an inquiry and given an opportunity to the landowners and/or assignees to

explain the position. By withholding the assignment deeds, the assignees

succeeded in avoiding proper scrutiny of their claim for compensation at the

hands of the Land Acquisition Collector, the Reference Court and the High

Court.

16. In the aforesaid scenario, it will be just and proper to set aside the

impugned judgment and remit the case to the Reference Court for fresh

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determination of the amount of compensation payable to the landowner

and/or assignee after giving them reasonable opportunity of adducing

evidence in support of their respective cases.

17. We also find merit in the submission of Ms. Gita Luthra that the High

Court committed serious error by entertaining and allowing the amendment

application filed by S.S. Aggarwal and others. What has surprised us is that

the High Court first decided the appeals filed by the assignees and then

disposed of the amendment application and that too without going through

the records. If this was not so, there was no occasion for the High Court to

incorporate the condition of making good the deficiency in court fee. By

this process, the Union of India and the DDA were deprived of an important

opportunity to make a request to the High Court to remit the case to the

Reference Court or at least allow them to adduce evidence on the issue of

correct market value of the acquired land. Another grave error committed

by the High Court in this regard was that it allowed the amendment

application without even adverting to the issue of unexplained delay of 4 and

half years.

1 18. In Union of India v. Pramod Gupta (supra), this Court considered

the legality and propriety of granting prayer for amendment in a case

somewhat similar to the present one and observed:

"Delay and laches on the part of the parties to the proceedings

would also be a relevant factor for allowing or disallowing an

application for amendment of the pleadings. The High Court

neither assigned sufficient or cogent reasons nor applied its

mind as regards the relevant factors while allowing the said

application for amendment. It has also not been taken into

consideration that the application for amendment of pleadings

might not have been maintainable in view of statutory interdict

contained in sub-section (2) of Section 25 of the Act, if the

same was applicable.

In Anoop Singh whereupon reliance has been placed by Mr

Salve, the Division Bench of this Court did not have any

occasion to consider that decisions of this Court in Krishi

Utpadan Mandi Samiti v. Kanhaiya Lal and B.V. Reddy which,

it will bear repetition to state, are authorities for the proposition

that once it is held that Section 25(2) of the Act would be

attracted in a given case, the parties are estopped and precluded

from claiming any amount higher than that claimed in their

claim petition before the Collector. An observation made to the

effect that an application under Order 6 Rule 17 would be

maintainable having regard to Section 53 of the Act, with

utmost respect, does not constitute a binding precedent. No

ratio has been laid down therein and the observations made

therein are without any discussion. Furthermore no reason has

been assigned in support of the said proposition of law.

In Harcharan also this Court did not address the question as to

whether Order 6 Rule 17 would be applicable in relation to the

original claim petition or memo of appeal.

It may be true that not only the memorandum of appeal but also

the reference was amended. Mr Rao pointed out that the

necessary amendments have been carried out in the application

for reference or memorandum of appeal. In terms of Order 6

1 Rule 18 of the Code of Civil Procedure, such amendments are

required to be carried out in the pleadings by a party which has

obtained leave to amend his pleadings within the time granted

therefor and if no time was specified then within fourteen days

from the date of passing of the order. The consequence of

failure to amend the pleadings within the period specified

therein as laid down in Order 6 Rule 18 of the Code is that the

party shall not be permitted to amend its pleadings thereafter

unless the time is extended by the court. It is not in dispute that

such an order extending the time specified in Order 6 Rule 18

has not been passed."

19. In the result, the appeals are disposed of in the following terms:

(i) The impugned judgment as also the one passed by the

Reference Court are set aside.

(ii) The matter is remitted to the Reference Court for fresh

determination of the compensation payable to the landowners

and/or assignees. While doing so, the Reference Court should

first decide the issue of locus of the assignees to claim

compensation. If it is held that the assignees are entitled to step

into the shoes of the landowners, then the Reference Court shall

consider the value of the land mentioned in the assignment

deeds and decide what compensation should be paid for

the acquired land.

(iii) The Reference Court shall give opportunity to the parties to

lead additional evidence in support of their respective cases.

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(iv) In view of the law laid down in Delhi Development Authority

v. Bhola Nath Sharma (2011) 2 SCC 54, the DDA shall be

entitled to participate in the proceedings of the Reference Court

and raise objections against the claim made by the assignees for

payment of compensation. The DDA shall also be entitled to

raise all other legally permissible objections to contest the claim

of the assignees.

20. Since the case is sufficiently old, we direct the Reference Court to

decide the matter within a maximum period of one year from the date of

receipt/production of copy of this judgment.

..............................................J.

[G.S. Singhvi]

................................

..............J.

[Asok Kumar Ganguly]

New Delhi

August 02, 2011.