Holding

A determination under Section 49(1) of the Land Acquisition Act, 1894 is not a decree within the meaning of Section 2(2) CPC, and therefore an appeal under Section 96 CPC does not lie.

Summary

The State Government acquired 2 acres 46 cents of land belonging to Deep Chand, who objected under Section 49(1) of the Land Acquisition Act, 1894, insisting that the whole property, including his factory and office, should be taken. The Collector referred the dispute to the Civil Court, which held that the land to be acquired did not form an integral part of the factory and office and therefore could be acquired without the rest. The State argued that the Court's order was not a decree and hence not appealable under Section 96 of the Code of Civil Procedure, 1908; the High Court dismissed the appeal on that ground. On appeal, the Supreme Court examined the definition of a decree under Section 2(2) CPC and held that the determination under Section 49(1) does not adjudicate any substantive right between the parties, nor is it an award under Section 26 of the Act. Consequently, the Court ruled that the order is not a decree and an appeal under Section 96 CPC does not lie, dismissing the appeal.

Issues considered

Whether a determination under Section 49(1) of the Land Acquisition Act, 1894 constitutes a decree within the meaning of Section 2(2) of the Code of Civil Procedure, 1908.
Whether an appeal under Section 96 of the CPC is maintainable against such a determination.

Legislation cited

Code of Civil Procedure, 1908s. 2(2), s. 96
Land Acquisition Act, 1894s. 26, s. 4, s. 49(1), s. 54, s. 6

Subjects

Land acquisitionDecreeCPC Section 96Section 49(1)AppealabilityCivil ProcedureProperty rights

Judgment

~/

A DEEP CHAND AND ORS. ' '

v.
LAND ACQUISITION OFFICER AND ORS.

FEBRUARY 2, 1994
B
[K. RAMASWAMY AND N. VENKATACHALA, JJ.]

Land Acquisitin Act, 1894: Sectio'!s 4, 6, & 49(1)-Acquisition of r
Ian~ Land owner's objection that Act should not be put in pperation without
acquiring entire land including his factory and office buildings-Reference
c made to Civil Court-Civil Cowt detennining that Land proposed to be ac-
quired did not fonn integral part of claimant's factory and office build-
ings-Held, detennination under s. 49(1) not being a decree within the
meaning of s. 2(2), C.P.C. appeal under s. 96 C.P.C. does not lie.

D Code of Civil Procedure, 1908: S. 2(2)-Decree--Detennination under .~,
s. 49(1) of Land Acquisition Act, 1894 is not a decree.

Words and Phrases: "Adjudication"-Meaning of

The State Government acquired under the Land Acquisition Act,
E 1894, land measuring 2 acres 46 cents belonging to the appellant-land
owner. The appellant filed an objection under s. 49(1) of the Act contending
that the entire land including his factory and office buildings should also
be acquired without which the Act should not be put in operation. A
reference was made to the Civil Court which held that the land proposed
F to be acquired did not form an integral part of appellant's factory and
office buildings. The elaimant filed an appeal before the High Court. The
State contended that the order of Civil Court not being a decree was not
appealable under s. 96, C.P.C. Accordingly, the High Court dismissed the
appeal as not maintainable. Bence the appeal by special leave.
_._
G It was contended on behalf of the appellant that the reference under
second proviso to s. 49(1) of the Act made to the Civil Court was decided
by it in its ordinary civil jurisdiction; determination by the Civil Court bad
----
the trappings or characteristics of a final adjudication between the appel-
lant and the Land Acquisition Officer and, therefore, it was a decree within
H the meaning of S. 2(2), C.P.C.
530
r

DEEP CHAND v. LAND ACQN. OFFICER 531
·.-1--
Dismissing the appeal, this Court A

HELD: 1.1. The determination under Section 49(1) of the Land
Acquisition Act, 1894 is not a decree within the meaning of s. 2(2) C.P.C.
and, therefore, an appeal under s. 96 C.P.C. does not lie against such a
determination. [536-D]
B
Krishnamoorthi v. Sp/. D.C. Kumbakonam, A.I.R. 1936 Madras 514;
Mahesh Sissr v. Province of Bengal, A.I.R. 1939 Cal. 733 and Sarat Chandra
v. Secretary of State, A.I.R. 1919 Cl. 86, referred to.

1.2. Decree means a formal expression of an adjudication wherein C
the court conclusively and finally determines the rights of the parties with
regard to all or any of the matters in controversy in the suit. [534-B]

1.3. In the determination under s. 49(1) of the Act no rights of the
parties to adjudication are involved. Howev~r, a right is given to the land
owner to object only to acquisition of part of the building, etc. without D
acquiring the whole of the house, manufactory or building. The Court has
to examine whether the objection is sustainable requiring the whole of the
property, including the house, manufactory or other building, to be ac-
quired or portion of the property proposed for acquisition, should be left
out of acquisition for full and unimpaired use of the house, manufactory E
or building. It is one of determination of the convenient use and enjoyment
of the unacquired portion of the land or a building, manufactory or the
~ other house. If the answer is in favour of the land owner, the only choice
left to the Government is either to acquire the whole property or drop the
proposed acquisition. It brings about no other consequence. Obviously, the F
decision by the Civil Court only hinges upon the convenient or unimpaired
use and enjoyment of the house, manufactory or building with the residue
of the land left over after acquiring the other property. In that behalf it
cannot be said to be an adjudication of any dispute or a right finally
settling any claim between the parties. [535-D-G]
G
Black's Law Dictionary, (Sixth Edn.) p. 42, referred to.

2. The order under section 49(1) is not an award. Amendment of ss.
26 and 54 of the Act has made no difference in this regard. Section 26(2)
specifies that an award.is a decree and appealable under s. 54. [536-B, CJ H
j
'"'
/

532 SUPREME COURT REPORTS (1994] 1 S.C.R.

A Secretary of State v. R. Narayanaswami Chettiar & Ors., A.I.R. 1932
Madras 55 and Kali Prasad v. Govt.· of Bihar, A.I.R. 1954 l'atna 461~
disapproved.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1042 of
1975.
B
From the Judgment aml Order dated 30.7.74 of the Madhya Pradesh
High Court in Misc. Appeal No. 55 of 1969.

P.S. Poti, S.K. Gambhir and Vivek Gambhir for the Appellants.

C B.Y. Kulkarni, S.K. Agnihotri and A.G. Ratnaparkhi for the Respon-
dents.

The following Order of the Court was delivered :

1. This appeal by special leave arises from the order of the Division
D Bench of Madhya Pradesh High Court dated July 30, 1974 in which it was
held that an order passed by the Civil Court on reference under s. 49(1)
of the Land Acquisition Act 1of1894 (for short 'the Act') is not a decree
and, therefore, an appeal would not lie therefrom under s. 96 of C.P.C.

E 2. The facts lie in ·a short compass. N~tification under s. 4(1) and
declaration under s. 6, of the Act were published in the State Gazette
acquiring land measuring 2 acres 46 cents (approximately) on Biaora
village in Rajgarh District. The appellant had objected under s. 49(1) of
the Act to the acquisition, contending that the entire land including his
factory and office building should be acquired, without which the Act
F should not be put in operation. Thereon, reference under s. 49(1) was
made to the Civil Court which by order dated April 29, 1969 held that the
land proposed to be acquired did not form an integral part of appeallants
factory and office buildings and answered the reference accordingly. The
appellants carried the matter in appeal to the High Court. In the High
G Court, when an objection was raised on behalf of the State, that the order
of the Civil Court is not a decree and as such it is not appealable obviously
under s. 96 of C.P .C., if upheld the objection and dismissed the appeal as
not maintainable.

3. The question, therefore, is whether the decision of the Civil Court
H on reference under s. 49(1) of the Act is a decree. It is not in doubt that
DEEP CHAND v. LANDACQN. OFFICER 533

the order of the Civil Court on a reference under s. 49,{i) is not an award A
-~. within the meaning of sub-s. (2) of s. 26. Therefore, an appeal under s. 54
of the Act would not lie. The only question is whether it is a decree within
the meaning of s. 2(2) of C.P.C. so as make it appealable under s. 96 of
C.P.C.

4. The contention of Sri P.S. Poti, learned senior counsel for the B
appellant is that s. 49(1) of the Act confers a substantive right on a party
to object to acquisition on only a part of any house, manufactory or other
building. On such objection being raised, when a reference under s. 49(1)-
second proviso was made to civil court, which it would decide a dispute in
its ordinary civil jurisdiction. It is an adjudication of the right of the owner, c
who objects to the continuance of the proceeding under the Act in relation
to part qf his house, manufactory or other building. It has all the trappings
or characteristics of a final adjudication between the appellant and the
Land Acquisition Officer and that, therefore, it is a decree within the
meaning of s. 2(2) of C.P.C. What is provided for under s. 49(b) is the right
of the owner to ask for acquisition of the whole property if it is not D
proposed for acquisition; and where the question whether the property left
out of acquisition is part of their property, has to be adjudicated by Court,
it is an adjudication on an issue relating to the question whether the
property is a part of the building or not. When it is finally decided, it
becomes conclusive between the parties and binds them. Therefore, it has E
all the trappings or characterisitics of a decree. He contended that apart
from s. 49(1) reference, similar right arises under ss. 18 and 30 of the Act.
In support thereof, he placed reliance Secretary of State v. R. Narayanas-
~-+
wami Chettiar & Ors., A.I.R. 1932 Madras 55 and Kali Prasad v. Govt. of
Bihar, A.LR. 1954 Patna 461. When the same decisions have been cited,
the Division Bench dissented from the ratio in those cases holding that: F

"To hold a decision by a Court under s. 49(1) of the Act
amounts to a 'decree' would be to slur over the require-
ments of a 'decree' as defined ins. 2(2) C.P.C.".
G
The learned Judges sought support for their view from the decision in

... ~
Krishnamoorthi v. Spl. D.C. Kumbakonam, A.I.R. 1936 Madras 514;
Mahesh Sissr v. Province of Benga~ A.I.R. 1939 Cal. 733 and Sarat Chandra
v. Secretary of State, A.LR. 1919 Cal. 86.

5. The question, therefore, is whether the decision by the Civil Court H
534 SUPREME COURT REPORTS (1994] 1 S.C.R.

A on a reference under s. 49(1), second proviso of the Act is a decree within
the meaning of s. 2(2) of C.P.C. There can be no doubt that where a legal
right of a party to a dispute, has to be adjudicated by courts of ordinary
civil jurisdiction ordinary rules of civil procedure become applicable, and
an appeal lies, if not otherwise provided for by such rules, that is to say,
B notwithstanding that the legal right claimed arises under a special statute
which does not in terms confer right of appeal an appeal lies. Decree
means a'formal expression of an adjudicatrion which the court conclusively
and finally determines the rights of the parties with regard to all or any of
the matters in controversy in the suit. We need not decide whether a
reference under s. 49(1) is a suit. However, the immediate question that
C arises is whether the objection raised for acquisition on the premise that
the property proposed for acquisition is a part only of the house, manufac-
tory or building is decided, does it amount to an adjudication. In Black's
Law Dictionary (Sixth Edition) at page 42 "adjudication" is defined as:

"Adjudication - the legal process of. resolving a dispute.
D The formal giving or pronouncing a judgment or decree
in a court proceedings; also the judgment or decision
given. The entry of a decree by a court in respoect to the
parties in a case. It implies a hearing by a court, after
notice, of legal evidence on the factual issue(s) involved".
E
Section 49 of the Act reads thus:

"49. Acquisition of part of house or building :-(1) The
provisions of this Act shall not be put in force for the
purpose of accuiring a part only of any house, manufactory
F or other building, if the owner desires that the whole of
such house, manufactory or building shall be so acquired.

xxx xxx xxx

Provided also that, if any question shall arise as to
G whether any land proposed to be taken under this Act
does or does not form part of a house, manufactory or
bµilding within the meaning of this section, the Collector
shall refer the determination of such question to the Court
and shall not take possessi'?]il of such land until after the
H , question has been d~termin~d. \
f

DEEP CHAND v. LAND ACQN. OFFICER 535

In deciding on such a reference the Court shall have A
regard to the question whether the land proposed to be
taken is reasonably required for the full and unimpaired
use of the house, manufactory or building.

(2) xxx xxx xxx
B
(3) xxx xxx xxx

A reading of the above section shows that a right is been given to the owner
of the land to object to the putting of the Act into force when only a part
of any house, manufactory or other building is being is sought to be C
acquired and call upon the State to acquire whole of such house, manufac-
tory or building. Therefore, what has been given is a right to object only
to acquisition of part of the building, etc. without acquiring the whole of
the house, manufactory building. In determining the question whether the
land proposed to be taken was reasonably required for the full and unim- D
paired use of the house, manufactory or building left out of acquisition all
that the Court has to examine is whether the objection is sustainable
requiring the whole of the property, including the house, manufactory or
other building, should be acquired or portion of the property proposed for
acquisition, should be left out. of acquisition for full and unimpaired use of
the house, manufactory or building, of the property proposed for acquisi- E
tion. It is one of determination of the convenient use and enjoyment of the
unacquired portion of the land or a building, manufactory or the other
house. If the answer is in favour of the land owner, the only choice left to
the Government is either to acquire the whole property or drop the
proposed acquisition; It brings about no other consequence. In other words F
the law says that acquire the whole property or to leave it. But for the
acquisition the owner is entitled to use the property in any manner he
intends to make use or enjoy it. Obviously the decision by the Civil Court
only hinges upon the convenient or unimpaired use and enjoyment of the
house, manufactory or building with the residue of the land left over after G
acquiring the other property. In that behalf it cannot be said to be an
adjudication of any dispute or a right finally settling any claim between the
parties. The analogy which Shri P.S. Poti seeks from the adjudication under
section 30 of the Act is no assistance. The title t~ receive compensation
would be in issue under section 30 and such a decision attains finality and
binds the parties. The decision therein is conclusive between the parties H
536 SUPREME COURT REPORTS (1994] 1 S.C.R.

A unless it is varied -or reversed by any competent court on appeal. Under
those circumstances, the courts have held that it is a decree under section
2(2) of C.P.C. So, that analogy is inapplicable to the determination under
section 49(1) of the Act in which no rights of the parties to adjudication
are involved. The facts in Secretary of State v. R. Narayanaswami Chettiar
·B & Ors., (1932) A.I.R. Madras 55, though squarely covers the facts in this
case, the learned judges appears to have proceeded on the premise that
after the amendment of Sections 26 and 54, it made a world of difference
and that therefore determination under sect'ion 49(1) of the Act is decree.
We are unable to appreciate the reasoning therein. Section 26(2) specifies
that an award is a decree and appealable under section 54. The order
C under section 49(1) is not an award. So the assumption of the Court is
erroneous. Similar is the view expressed by Patna High Court which
followed the ratio in Narayanaswami's case without any further discussion
or reasoning. Under these circumstances, we cannot uphold the view
expressed by the Madras and Patna High Courts.
D 6. Therefore, we hold that the determination under section 49(1) of
the Act is not a decree within the meaning of Section 2(2) C.P.C. and that
therefore, an appeal under section 96 C.P.C. does not lie. The appeal is
accordingly dismissed, but in the circumstances, without costs.

R.P. Appeal dismissed.