Parvathamma vs State Of Karnataka

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 17TH DAY OF DECEMBER, 2024

BEFORE THE HON'BLE MR JUSTICE HANCHATE SANJEEVKUMAR MISCELLANEOUS SECOND APPEAL NO. 47 OF 2022 (LA) BETWEEN:

1. PARVATHAMMA W/O LATE SHIVANNA AGED ABOUT 69 YEARS,

2. JAYAMMA W/O LATE MALLEHSAPPA AGED ABOUT 68 YEARS,

BOTH THE CLAIMANTS ARE R/AT HOOVINAHALLI KAVALU KUPPALLI POST, KASABA HOBLI HASSAN TALUK -573201 HASSAN DISTRICT ...APPELLANTS (BY SRI. SAMEER S.N., ADVOCATE)

Digitally signed AND: by RAMYA D Location: HIGH COURT OF KARNATAKA 1. STATE OF KARNATAKA BY SPECIAL LAND ACQUISITION OFFICER HRP -2 HASSAN HASSAN DISTRICT-573 201

2. THE DISTRICT/DEPUTY COMMISSIONER HASSAN DISTRICT HASSAN-573 201 3 MANAGING DIRECTOR CAUVERY NIRAVARI NIGAMA NIYAMITHA ANAND RAO CIRCLE, -2- NC: 2024:KHC:51959 MSA No. 47 of 2022

BENGALURURU-560 001. (RESPONDENT NO.3 IMPLEADED VIDE COURT ORDER DATED 17.12.2024) ...RESPONDENTS (BY SRI.RAJENDRA K.R., AGA; SRI K.S. BHEEMAIAH, ADV. FOR RESPONDENT NO.3)

THIS APPEAL FILED UNDER ORDER 54 (2) OF THE LAND ACQUISITION ACT, AGAINST THE JUDGMENT AND DECREE DATED 22.04.2021 PASSED IN LAC.APPEAL NO.255/2019 ON THE FILE OF THE V ADDL. DISTRICT AND SESSIONS JUDGE, HASSAN DISMISSING THE APPEAL FILED AGAINST THE JUDGMENT AND AWARD DATED 02.08.2005 PASSED IN LAC NO.29/2001 ON THE FILE OF THE PRINCIPAL CIVIL JUDGE (SR. DN.) HASSAN.

THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE HANCHATE SANJEEVKUMAR

ORAL JUDGMENT

This Miscellaneous Second appeal is filed by the

claimants challenging the judgment and award dated

22nd April 2021 in L.A.C. Appeal No.255/2019 passed

by 5th Additional District & Sessions Judge, Hassan

and judgment and award dated 2nd August 2005 in

LAC.No.29/2001 passed by the Prl. Civil Judge

(Sr.Dn.), Hassan, seeking enhancement of

compensation.

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2. Heard the argument of learned counsel from

both side and perused the records.

3. It is the case of the claimants that they are

the absolute owners of the wet land bearing Survey

No.45 measuring 1 acre, situated at Hoovinahali

village.

4. The relevant details of the compensation

awarded to the claimants are as under:

1 Preliminary Notification 17.08.1995 issued under Section 4(1) of Land Acquisition Act, 1894

2 Date of passing the award by 31.12.1997 SLAO

4 Award of SLAO @ Rs.28,000/- per acre

5. Being aggrieved by inadequate

compensation, reference was made under Section

18(1) of the Act and the Reference Court has fixed the

market value of the acquired wet land at Rs.40,000/-

per acre.

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6. Being aggrieved, the claimants filed an

appeal before the first appellate Court and the said

appeal came to be dismissed.

7. Learned Counsel for the appellant submitted

that the compensation awarded by both the Courts

below are on the lower side. He referred to the

judgment in various other cases passed by the

Reference Court, First Appellate Court and by this

Court in respect of the very same project and prays

for enhancement of compensation. Therefore, he

submitted that in the present case also, the

appellants/claimants are entitled for enhancement of

compensation on the ground of parity.

8. On the other hand, learned Counsel for

respondent No.3 - 'Cauveri Niravari Nigama

Niyamitha' submitted that 3rd respondent is the

beneficiary of the land acquisition, but it was not

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First Appellate Court and 3rd respondent was deprived

of taking contention before both the Courts below.

Therefore, he opposed the enhancement of

compensation by contending that compensation is to

be assessed on the basis of nature of soil, situation of

land, distance between nearest town or city, whether

the land is abutting to any highway or situated at

distance from the highway, whether highway is a state

highway or national highway or district road, what are

the ages of trees situated on the land, how much

quantity of trees are fruit bearing etc. are to be

adduced in evidence and then only a determination of

proper compensation would be arrived at. But the 3rd

respondent who was not a party before the courts

below was straightaway impleaded as a party in this

appeal. Therefore, he prayed for remanding the

matter to the Reference Court so as to enable 3rd -6- NC: 2024:KHC:51959 MSA No. 47 of 2022

respondent to cross-examine the witnesses of the

claimant and also to adduce evidence.

9. Upon hearing the rival contentions, the

points that arise for consideration are as follows:

i. Whether under the facts and circumstances of the case, the 3rd respondent who is a beneficiary of the land acquisition is a necessary and proper party before the Reference Court in the land acquisition proceedings?

ii. What orders?

10. The claimants are claiming that they are the

owners of the land and their land was acquired for

Hemavathi Reservoir Project. Being dissatisfied with

the quantum of compensation awarded by the first

respondent-the SLAO, the claimants made the

application under Section 18(1) of the Act and SLAO

referred the case to the Reference Court. The

claimants have prosecuted the case before the -7- NC: 2024:KHC:51959 MSA No. 47 of 2022

Reference Court without making the 3rd respondent as

a party, though the 3rd respondent is beneficiary to

land acquisition. Even in the appeal before the First

Appellate Court, 3rd respondent was not made a party.

The 3rd respondent is the beneficiary of the land

acquisition and first respondent is only the acquiring

authority but not the beneficiary. The first respondent

being acquiring authority has initiated land acquisition

proceedings for the purpose of Hemavathi Reservoir

project on behalf of the beneficiary and ultimately,

beneficiary is entitled to take over the land acquired

by the first respondent and form the project and

therefore, compensation would be given by the

beneficiary party, but not by the first respondent.

Therefore, in this context, the beneficiary on whose

behalf of the land is acquired is a proper and

necessary party. Though the proceedings can be

adjudicated in the absence of proper party, but -8- NC: 2024:KHC:51959 MSA No. 47 of 2022

necessary party is one in whose absence, there could

not be effective adjudication between the parties.

Therefore, 3rd respondent beneficiary is not only

proper party, but also necessary party.

11. Order I Rule 10 of CPC stipulates regarding

filing of suit in the name of wrong plaintiff and the

Court may strike out or add parties dealing with

necessary and proper party in the suit.

"A "necessary party" is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the court.

If a "necessary party" is not impleaded, the suit itself is liable to be dismissed.

A "proper party" is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in dispute in the suit, though he need not be a person in favour of or against whom the decree is to be made.

Distinction between necessary and proper parties. The distinction between the two terms can be noted as follows:

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NECESSARY PARTY PROPER PARTY

Necessary party is the party In case of proper parties, the whose presence is presence or absence is no indispensable for the suit to ground for determining be adjudicated upon whether the suit should be dismissed or not

Necessary party is the party The passing of a decree is not which is essential for an order dependent on the demands of to be passed, since the order proper parties. (However, the is based upon the relief asked decree is applicable upon for by such party proper party as well)

For example: In a suit For Example: In a suit regarding partition of land or between landlord and tenant, property, all the people who a sub - tenant would be a have a share in the property proper party (though he is are necessary parties; In a affected by the decree, his suit regarding selection and presence is not indispensable) appointment, all those who In a suit regarding land or have been selected or property acquisition between a appointed are considered as father and son, the other necessary parties. relatives, like grandfather, uncle, aunt etc. would be proper parties.

In Gurmit Singh Bhatia v. Kiran Kant Robinson, (2020) 13 SCC 773 : 2019 SCC OnLine SC 912 at page 778, the Supreme Court has observed:

It is further observed and held by this Court that two tests are to be satisfied for determining the question as to who is a necessary party. The tests are:

(1) there must be a right to some relief against such party in respect of the controversies involved in the proceedings; (2) no effective decree can be passed in the absence of such party. It is further observed and held that in a suit for specific performance the first test that can be formulated is, to determine whether a party is a necessary party there must be a right to the same relief against the party claiming to be a necessary party, relating to the same subject-matter involved in the proceedings for specific performance of

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contract to sell. It is further observed and held by this Court that in a suit for specific performance of the contract, a proper party is a party whose presence is necessary to adjudicate the controversy involved in the suit. It is further observed and held that the parties claiming an independent title and possession adverse to the title of the vendor and not on the basis of the contract, are not proper parties and if such party is impleaded in the suit, the scope of the suit for specific performance shall be enlarged to a suit for title and possession, which is impermissible. It is further observed and held that a third party or a stranger cannot be added in a suit for specific performance, merely in order to find out who is in possession of the contracted property or to avoid multiplicity of the suits. It is further observed and held by this Court that a third party or a stranger to a contract cannot be added so as to convert a suit of one character into a suit of different character.

In U.P. Awas Evam Vikas Parishad v. Gyan Devi, (1995) 2 SCC 326 at page 343, the Supreme Court has observed:

21. The law is well settled that a necessary party is one without whom no order can be made effectively and a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision of the question involved in the proceeding.

In Vidur Impex & Traders (P) Ltd. v. Tosh Apartments (P) Ltd.,(2012) 8 SCC 384 : (2012) 4 SCC (Civ) 1 : 2012 SCC OnLine SC 616 at page 413, the Supreme Court has observed:

41. Though there is apparent conflict in the observations made in some of the aforementioned judgments, the broad principles which should govern disposal of an application for impleadment are:

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41.1. The court can, at any stage of the proceedings, either on an application made by the parties or otherwise, direct impleadment of any person as party, who ought to have been joined as plaintiff or defendant or whose presence before the court is necessary for effective and complete adjudication of the issues involved in the suit.

41.2. A necessary party is the person who ought to be joined as party to the suit and in whose absence an effective decree cannot be passed by the court.

41.3. A proper party is a person whose presence would enable the court to completely, effectively and properly adjudicate upon all matters and issues, though he may not be a person in favour of or against whom a decree is to be made.

41.4. If a person is not found to be a proper or necessary party, the court does not have the jurisdiction to order his impleadment against the wishes of the plaintiff.

41.5. In a suit for specific performance, the court can order impleadment of a purchaser whose conduct is above board, and who files application for being joined as party within reasonable time of his acquiring knowledge about the pending litigation.

41.6. However, if the applicant is guilty of contumacious conduct or is beneficiary of a clandestine transaction or a transaction made by the owner of the suit property in violation of the restraint order passed by the court or the application is unduly delayed then the court will be fully justified in declining the prayer for impleadment."

12. The 3rd respondent being the beneficiary on

whose behalf lands are acquired for the purpose of

Hemavathi Reservoir project, therefore, beneficiary

will take control over the lands acquired and every

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title, right and interest would be vested with the

beneficiary and ultimately, while determining the

compensation, beneficiary must be heard by giving

opportunity to the beneficiary. Therefore, without

making beneficiary a party, determining compensation

and thereafter directing the beneficiary to pay

compensation is violation of principles of audi alteram

partem. Therefore, beneficiary on whose behalf land

is acquired is a necessary party and in whose absence,

there could not be effective adjudication. Without

making the beneficiary as a party in the proceedings,

determining the compensation and compelling the

beneficiary to pay compensation is nothing but

violation of principles of natural justice as ultimately,

it is beneficiary who has to pay compensation to the

claimants/land loosers.

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13. The Special Land Acquisition Officer who is

the acquiring authority has been vested with power by

the Government to acquire the land for the purpose of

some projects of the Government on behalf of the

beneficiary. After acquisition, the beneficiary shall

hold, control, supervise, monitor and use the said land

for the purpose of carrying out the project. Therefore,

the beneficiary will become owner of the said land for

the purpose of carrying out the project after

completion of the acquisition proceedings. Then the

role of the beneficiary will start. It is actually the

beneficiary is interested party. Thus, he is taking over

right to participate in the acquisition proceedings and

in the process of adjudication determining

compensation where the claimants are claiming

compensation based on the nature of soil, potentiality

of the land, whether it is vicinity to the town and city

and whether it is adjacent to National Highway/State

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Highway/District Road, whether in the surrounding

any potential commercial activities are there, fertility

of the land, standing trees thereon, fruit bearing yield

of trees, age of trees etc., are to be considered by

both the claimants and beneficiary. Therefore, the

beneficiary is a necessary party. Ultimately, the

beneficiary is disbursing compensation to the

claimants/land loosers. Therefore, the beneficiary is

not only proper party, but also necessary party. In

this regard, I place reliance on the judgment of the

Hon'ble Supreme Court in the case of U.P.AWAS

EVAM VIKAS PARISHAD VS. GYAN DEVI (DEAD) BY

1 LRS. AND OTHERS , wherein at paragraph Nos.21 and 22

observed as follows:

"21. We may now come to the stage of the proceedings before the court in a reference under Section 18 of the L.A. Act made at the instance of a person having interest in the land being acquired. At this stage also Section 50(2) of the L.A. Act

1 (1995) 2 SCC 326

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envisages that the local authority has a right to appear and adduce evidence before the court. This right is independent of the right that is available to the local authority to appear and adduce evidence before the Collector. Even though the local authority had failed to appear before the Collector in spite of notice or had appeared in response to notice and had adduced evidence, the local authority may consider it necessary to adduce evidence to rebut the evidence adduced by the person who has sought the reference and to defend the award made by the Collector. Failure to give notice at this stage would result in denial of the said right of the local authority. Before we consider the remedy that is available for seeking redress against the denial of this right we may examine whether the local authority has a right to be impleaded as a party in the proceedings before the reference court. That raises the question whether the local authority can be regarded as a necessary or a proper party. The law is well settled that a necessary party is one without whom no order can be made effectively and a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision of the question involved in the proceeding. (See Udit Narain Singh Malpaharia v. Additional Member, Board of Revenue.) A local authority for whom land is being acquired has a right to participate in the acquisition proceedings in the matter of determination of the amount of compensation while they are pending before the Collector and to adduce evidence in the said proceedings. While it is precluded from seeking a reference against the award of the Collector it can defend the award and oppose the enhancement of the amount of compensation sought before the reference

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court by the person interested in the land. Moreover the local authority has a right to appear and adduce evidence before the reference court. Having regard to the aforesaid circumstances, we are of the opinion that the presence of the local authority is necessary for the decision of the question involved in the proceedings before the reference court and it is a proper party in the proceedings. The local authority is, therefore, entitled to be impleaded as a party in the proceedings before the reference court.

22. In case the amount of compensation has been enhanced by the court and no appeal is filed by the Government the local authority if adversely affected by such enhancement may file an appeal with the leave of the court. This right of the local authority does not depend on its being impleaded as a party in the proceedings before the reference court. Even if the local authority is not impleaded as a party before the reference court it can file an appeal against the award of the reference court in the High Court after obtaining leave if it is prejudicially affected by the award. In case the Government files an appeal against the enhancement of the award the local authority is entitled to support the said appeal and get itself impleaded as a party. When the person having an interest in the land files an appeal in the High Court against the award of the reference court and seeks enhancement of the amount of compensation the local authority should be impleaded as a party in the said appeal and it is entitled to be served with the notice of the said appeal so that it can defend the award of the reference court and oppose enhancement of the amount of compensation before the High Court. The same will be the situation in case of an appeal

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to this Court from the decision of the High Court."

14. Further, in these proceedings, if the

compensation is enhanced by referring to judgments

and awards rendered in other cases, what would be

the difference in factual matrix in those cases and

present case are to be ascertained. Though reference

is made of the awards/orders passed in other cases by

contending that lands are similarly situated as in the

present case, but the evidence adduced in those

proceedings are to be considered regarding

ascertainment of nature of land, standing trees

thereon, quantum of fruit bearing trees according to

age of the trees, whether there are state highway or

national highway abutting to the land, what is the

distance between aforesaid land and near by town or

city, potentiality of land etc. Therefore, in this regard,

the beneficiary must be made as party and

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opportunity of tendering evidence is to be given and

shall be heard and in the absence of beneficiary,

determining the compensation is not correct.

Therefore, when the compensation is determined

without beneficiary but ultimately, beneficiary is liable

to pay compensation, then without making beneficiary

a party amount to denial of right to the beneficiary at

the time of determining the compensation.

15. The Government has also issued Circular

bearing No.RD 04 LCA2024(E-1351620) dated

07.03.2024 stating that on whose behalf land is

acquired, they must be made a party in the

proceedings. When the Courts have determined the

compensation and execution of said awards are made,

unnecessarily, there will be orders from the Courts

attaching the movable properties of SLAO/State

authorities. But the SLAO/State authorities are only

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acquiring authority and ultimately, the compensation

will have to be paid by the beneficiaries but they are

not made as parties. This would cause unnecessary

delay in executing the award, affecting right of the

claimants/land owners. Therefore, in this way,

beneficiary will have to be made as a party in the

acquisition proceedings.

16. Therefore, for the aforesaid reasons and in

view of the principle of law laid down by the Hon'ble

Supreme Court in U.P.AWAS EVAM VIKAS

PARISHAD's case (stated supra), the point is answered

in the affirmative holding that beneficiary must be

made a party in the land acquisition proceedings while

determining the compensation as beneficiary is not

only proper party, but also necessary party. But in

the present case, 3rd respondent - beneficiary was not

made party in the Reference Court as also before the

First Appellate Court and straightaway 3rd respondent

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is made a party in this appeal by way of impleadment.

Therefore, this court is of the opinion that the matter

must be remanded to the Reference Court and

impugned award passed by the Reference Court and

the First Appellate Court will have to be set aside. The

3rd respondent beneficiary will have to be made as a

party in the Reference Court and parties are to be

given opportunity to adduce their further evidence, if

they are so advised, either oral, documentary or both.

17. Hence, I pass the following:

ORDER

i) Miscellaneous Second Appeal is allowed;

ii) The judgment of the First Appellate Court dated 22.04.2021, passed in L.A.C. Appeal No.255/2019 and the judgment of the Reference Court dated 2.8.2005 in LAC No.29/2001 are set aside and the matter is

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remanded to the Reference Court for fresh disposal in accordance with law;

iii) 3rd respondent herein shall be made as a party in the Reference Court;

iv) Liberty is reserved to both parties to adduce evidence in further if they are so advised, either oral, documentary or both;

v) All parties in the case shall be present before the Reference Court on 27.01.2025;

vi) The Reference Court shall decide the case and pass appropriate orders within six months from 27.01.2025;

vii) All contentions of parties are kept open.

viii) Court fee paid by the claimants in this appeal shall be refunded to the claimants with proper identification.

SD/-

(HANCHATE SANJEEVKUMAR) JUDGE

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