M/S NEYVELY LIGNITE CORPN. LTD. ETC. ETC.versusSPECIAL TAHSILDAR (LAND ACQUISITION) NEYVELY AND ORS. ETC. ETC.

         M/S NEYVELY LIGNITE CORPN. LTD. ETC. ETC.                           A
                                      v.
          SPECIAL TAHSILDAR (LAND ACQUISffiON)
                NEYVELY AND ORS. ETC. ETC.

                          OCTOBER 19, 1994
                                                                             B
      [K RAMASWAMY, M.K. MUKHERJEE AND S.C. SEN, JJ.]

      LandAcquisitionAct, 1894: Sections 3(b), 4(1), 11, 18, 26, 50(2) and
54.
                                                                             c
      'Person interested'-Scope of

       Held authority for whose benefit land is acquired is person interested
within the meaning of Section 3(b )--Beneficiary for whose benefit land is
acquired is entitled to come on record to lead evidence for determination of
proper compensation-Denial of right to a person interested is in negation of D
fair and just procedure offending Article 14.

      Code of Civil Procedure, 1908 :

       Order I-Rule I 0-'Necessary party'-'P'roper· P'arty'-lmpleading E
oHand acquired for benefit of an authority-Such an authoritj is a proper
            •
party to be 1mpleaded.                                         •
       A Notification under section 4(1) of the Land Acquisition Act, 1894
was published acquiring 5200 acres of land for the benefit of the appellant-
Corporation. During the pendency of certain refe~ences-sought by the F
land-owners for enhancement of compensation--tl1e appellant-Corpora-
tion filed applications for being impleaded as respondent. In order to
adduce evidence for flXBtion of the proper compensation but the same were
dismissed by the Civil Court on. the ground that the a11pellant-Corporation
was not an interested person within the meaning of se<ction 3(b) of the Act.
In revisions the High Court uplneld the Order of the Civil Court. Further, · G
in the appeals filed by the State under Section 54 the High Court also held
that the appellant was not a person Interested. The appellant-Corporation
preferred appeals before this Court. They also filed writ petitions in the
High Court challenging the award and de!'ree made under Section 26 but
the Full Bench dismissed the same holdln,g that the appellant was not a H
                                     567
    568                   SUPREME COURT REPORTS [1994] SOPP. 4 S.C.R.

A person interested. Against the dismissal of writ petitions also appeals were
    preferred before this Court.

          In the connected appeals the appellant-Housing Board challenged
    the award made by the subordinate judge under section 26. Following the
    decision of the Full Bench a single judge of the High Court held that the
B   appellant was not a person interested within the meaning of section 3(b).
    The Housing Board preferred appeals to this Court.

          In appeals to this Court on the question whether the appellant is a
    "person interested" within the meaning of Section 3(b) of the Act:

c         Allowing the appeals and setting aside the orders of the High Court,
    this Conrt

          HELD: 1. The High Court had committed manifest error of law in
    holding that the appellant is not a person interested. [581-A)
D         2. When the beneficiary for whose benefit the land is acquired is
    served with the notice and brought on record at the stage of enquiry by the
    Collector and reference court under section 18 of the Land Acquisition Act
    or in an appeal under Section 54, it/they would be interested to defend the
    award under sections 11 or 26 or would file an appeal independently under
E   section 54 etc. against the enhanced compensation. As a necessary or
    proper p;pty affected by the determination of higher compensation, the
    beneficiary must have a right to challenge the correctness of the award
    made by the Reference Court under section 18 or in appeal under Section
    54 etc. Considered from this perspective the appellant-company is an
    interested person within the meaning of section 3(b) of the Act and is also
F   a proper party, if not a necessary party under Order 1 Rule 10 of the CPC.
                                                              [579-F-H, 580-A)
           Himalayan Tiles and Marbles (P) Ltd. v. Frencies Victor Coutinho
    (dead) by Lrs. and Ors., [1980) 3 SCR 235; Nee/agangabai and Anr. v. State
    of Kamataka and Ors., [1990) 3 SCC 617; Krishi Upaj Mandi Samiti v.Ashok
G   Singhal, [1991) Suppl. 2 SCC 419; Union of India and Anr. v. Distt. Judge,
    Udhampur and Ors., JT (1994) 3 SC 629; Union of India v. Sher Singh and
    Ors., [1993] 1 SCC 608; Bihar State Electricity Boord v. State of Bihar and
    Ors., [1994] 2 Scale 355; Union of India v.Kolluni Ramaiah and Ors., [1994)
    1 SCC 367 and Krishnamachari v. The Managing Director, APSR TC,
H   Hyderabad and Ors., JT (1994) 5 SC 391, relied on.
   NEYVELY LIGNITE CORPN. Lill. v. SPL. TAHSILDAR NEYVELY 569

      Santosh Kumar and Ors. v. Central Warehousing Coron. and Anr., A
[1986] 1 SCR 603, distinguished.

    Municipal Corporation of the City of Ahmedabad v. Chandu/a/
Shamaldas Patel, [1971] 3 SCC 821, held to longer good in law.

     Harish Chandra v. Dy. Land Acquisition Officer, [1962] 1 SCR 676            B
and Ezra v. Secretary of State for India, ILR 32 Cal. 605 P.C., referred to.

       Mis Neyve/y Lignite Corpn. Ltd. v. P. Ramaswami Naidu and Ors. etc.
etc., AIR (1990) Mad. 160, disapproved.

      3. It is true that section 50(2) of the Act gives to the local authority   C
or the company right to adduce evidence before the Collector or in the
reference under section 18 as it is specifically stated that in any proceed-
ings held before the Collector or the Court, the local authority or the
company may appear and adduce evidence for the purpose of determining
the am1mnt of compensation. However, it has no right to seek reference.          D
Court cannot limit the operation of section 3(b) in conjunction with
sub-section (2) of section 50 of the Act within a narrow compass. The right
given under sub-section (2) of section 50 is in addition to ;md not in
substitution of or in derogation to all the incidental, logical and conse·
quential rights flowing from the concept of fair and just procedure consis-
tent with the principle of natural justice. [578-A-C)                            E

       4. The beneficiary has the right to be heard by the Collector or the
Court. If the compensation is enhanced it is entitled to convass its correct·
ness by filling an appeal or defend the award of the Collector. If it is not
made a party, it is entitled to seek leave of the court and file the appeal
                                                                                 F
against the enhanced award and decree of the Civil Court under section
26 or of the jndgment and decree under section 54 or is entitled to file writ
petition under Article 226 and assail its legality or correctness. Moreover
in the language of Order 1 Rule 10 CPC, in the absence of the beneficiary
who ultimately is to bear the higher compensation, no complete and
effectual determination of binding just and proper compensation to the           G
acquired land would be made. So it is concommitently a proper party if
not a necessary party to the proceedings under Order 1 Rule 10 CPC.
                                                                   [578·E·G]
     S. The denial of the right to a person interested is in negation of fair
and just procedure offending Article 14 of the Constitution. [578-H]             H
    570                   SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.

A         6. In the connected appeals also the appellant-Housing Board is a
    person interested within the meaning of section 3(b) of the Act and also a
    proper party under Order 1 Rule 10 of the CPC. The writ petitions filed
    by the appellant are directed to treated as appeals under Section 54 of the
    Act and be dealt with and be disposed of according to law. [581-B]

B         CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 246 to
    893 of 1990 etc. etc.

          From the J11dgment and Order dated 7.4.89 of the Madras High
    Court in C.R.P. Nos. 1142-1341, 1343-1408, 1418-1517, 1523-1622, 1627-
C   1726, 1744-1825 of 1987.

         Vinod A. Bob<Je, C.S. Vaidyanathan, Shyam Mudlia, U.A. Rana,
    Anand Prasad, Rajiv Tayagi, V.Krishnamurthy, K.R. Choudhary, Manoj
    Swamp, Ms. Lalitha Kohli, P.R. Seetharaman, S. Balakrishnan, A.T.M.
    Sampath, A. Mariarputham, Ms. Aruna Mathur, Ashok Grover,
D   V.Balachandran, R.N. Keshwani, S. Sriniwasan, Raju Ramachandran,
    Ashok Kumar Srivastava, M.K.D. Namboodri, Irfan Ahmed, A.L. Trehan,
    K. Ram Kumar, B. Kanta Rao, Pravir Choudhary, R. Ayyam Perumal and
    R.B. Misra for the appearing parties.

          The followiJ!g the Order of the Court was delivered :
E
          These appeals arise from the Judgments of the Madras High Court
    in one batch in C.R.P. Nos. 1141- 1351/87 and batch dated April 7, 1989
    and another batch from a judgment of the full bench rendered in M/s.
    Neyvely Lignite Corpn. Ltd. v. P. Ramaswami Naidu & Ors. etc. etc., AIR
p   (1990) Mad. 160. Notification under section 4(1) of the Land Acquisition
    Act 1 of 1894 for short 'the Act' was published in the year 1975 acquiring
    a large extent of 5200 acres of land for the purpose of excavating inferior
    quality of the coal in Soutli Arcot District in the State of Tamil Nadu. The
    Tehsildar, the Land Acquisition Officer awarded compensation in the
    years 1977-80 under s.11 of the Act. Dissatisfied therewith, the claimants
G   sought and secured over 2000 references under s.18 to the Civil Court
    namely, the Subordinate Judge, Cuddalore. In some of which the Civil
    Court made awards and decrees under s.26. In the pending references the
    appellant sought to be impleaded as a party respondent to adduce evidence
    for fixation of the proper compensation. The Civil Court dismissed the
H   applications holding that the appellant is not an interested person by a
   NEYVELY LIGNITE CORPN. LTD. v. SPL. TAHSILDAR NEYVELY 571

common order dated November 28, 1986. The High Court in the revisions f A
by judgment dated February 16, 1987 upheld the order of the Civil Court.
In the appeals filed by the State under S.54, the appellant sought to be
impleaded as a party-respondent which were turned down holding that the
appellant is not a person interested. Against that a batch of appeals have
been filed here. The appellants also filed writ petitions challenging the B
validity of the award and decree made under s.26 by filing writ petitions.
The full bench held that the appellant is not a person interested. Therefore,
dismissed. the writ petitions. Thus these appeals have been filed by special
leave.

      When the appeals had come up on May 3, 1991 before a bench of               C
two judges, our learned brethern made a reference to three judges' Bench
thus:

        "We think that it would be proper that the entire matter including
        right to seek reference, to adduce evidence or to claim to be
        impleaded as a party before the Civil Court or its right to file          D
        appeal before the High Court against the above orders and all
        other allied questions are necessary to be consider by three
        Judges."

Thus these appeals before this bench. It is not in dispute that the entire        E
controversy hinge upon interpretation of section 3(b) and s. 50(2) of the
Act whether the appellant is a person interested either to be impleaded as
a party-respondent to the pending references under s.18 to lead evidence,
contest the reference and if the compensation is enhanced to file an appeal
in the High Court under s.54 or to get impleaded as a party- respondent
in the pending appeals filed by the land acquisition officer <Jr to file a writ   F
petition under Art. 226 of the Constitution challenging the· correctness of
the award and the decree made by the Civil Court under s.26 of the Act.

      Section 3(b) defines person interested thus :
                                                                                  G
         'the expression "person interested' includes all persons claiming
         an interest in compensation to be made on account of the acquisi-
         tion of land under this Act; and a person shall be interested in
         land if he is interested in an easement affecting the land.'

      It is an inclusive definition and all persons claiming an interest in the   H
     572                   SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.

A compensati011 as well as an interest in the determination of the compensa-
     tion and easdmentry right affecting to acquired land. It is contended by
     Shri Bobde, learned Senior counsel for the appellant that this Court has
     consistently tf\ken the view that the word "person interested" is to be
     liberally interpreted to include the company or the local authority for
     whose benefit the land was acquired since the company or the local
B
     authority is tJie person ultimately to bear the burden of the compensation.
     So it is interested to determine proper compensation payable to the land
     and also the person to show that the title to the land is not clear and
     uncncumbere~ title is to be acquired. Shri G.L. Sanghi, learned Senior
     counsel supplemented by Shri S. Balakrishnan & Shri A.L. Trehan, learned
c    counsel appearing for the claimants, resisted the contention. In substance
     their contenti<j>n is that the word "person interested" should be interpreted
      in a restricted sense ejusdem generis to mean the persons who are entitled
      to receive the compensation awarded by the Collector or the Civil Court
      alone are persons interested and are entitled to contest the correctness of
D     the determination of the compensation or legality of the award. It is also
      contended that the right given under the Act is only a statutory right and
      not a commol) law right. The person interested is, therefore, the person
      whose interest is adversely affected by acquisition, namely, the owner of
      the land but not the person for whose benefit the land was acquired.
      Therefore, the: Act cognizant to these facts has given under s.50{2) to the
E     company or local authority only a limited right to adduce evidence in the
      pending references or before the Land Acquisition Collector. Therefore,
      the beneficial)\ cannot have any higher right than was given under s.50(2)
      of the Act.

           The question, therefore, is whether the appellant for whose benefit
F
     the land is acquired is a "person interested" within the meaning of s.3{b)
     of the Act. In Himalayan Tiles & Marbles (P) Ltd. v. Francis Victor
     Coutinho (deaif) by Lrs. & Ors., (1980] 3 SCR 235, Fazal Ali, J., speaking
     for the bench Of two judges considered the scope of s.3{b) and held that :

G             "It see)ns to us that the definition of 'a person interested' given in
              s.18 [obviously s.3{b)] is an inclusive definition and must be liberal-
              ly construed so as to embrace all persons who may be directly or
              indire¢tly interested either in the title to the land or in the quantum
              of compensation. In the instant case, it is not disputed that the
 H            lands were actually acquired for the purpose of the company and
        NEYVELY LIGNITE CORPN. LID. v. SPL. TAHSILDAR NEYVELY 573

            once the land vested in the Government, after acquisition, it stood    A
            transferred to the company under the agreement entered into
            between the company and the Government. Thus, it cannot be said
            that the company had no claim or title to the land at all. Secondly,
            since under the agreement the company had to pay the compen-
            sation, it was most certainly interested in seeing that a proper
            quantum of compensation was fixed so that the company may not
                                                                                   B
            have to pay a very heavy amount of money. For this purpose, the
            company could undoubtedly appear and adduce evidence on the
            question of the quantum of compensation."

            Art. 243 it was concluded that :                                       c
                 "Thus is preponderance of judicial opinion seenis to favour the
             view that the definition of 'person interested' must be liberally
             construed so as to include a body, local authority, or a company
             for whose benefit the land is acquired and who is bound under an D .
             agreement to pay the compensation. In our opinion, this view
             accords with the principles of equity, justice and good conscience.
             How can it be said that a person for whose benefit the land is
             acquired and who is to pay the compensation is not a person.
            interest even though it stake may be extremely vital? For instance,
             the land acquisition proceedings may be held to be invalid and E
             thus a person concerned is completely deprived of the benefit
             which is proposed to be given to him. Similarly, if such a person
            is not heard by the Collector or a Court, he may have to pay a ¥ery
            heavy compensation which in case he is allowed to appear before
            a court, he could have satisfied it that the compensation was far F
            too heavy having regard to the national and extent of the land. We
            are, therefore, unable to agree with the view taken by the Orissa
            High Court or even by the Calcutta High Court that a company,
            local authority or a person or whose benefit the land is acquired
            is not an interested person. We are satisfied that such a person is
            vitally interested both in the title to the property as also in the G
            compensation to be paid therefore because both these factors
            concern its future course of action and if decided against him,
            seriously prejudice his rights."

    It is true that in that case the facts were that the owners of the land        H


•
    574                   SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.

A   questioned the correctness and the kgality of the acquisition proceedings
    and the notifik:ation issued under s.4(1) of the Land Acquisition Act. The
    appellant therein was a company for whose benefit the land was sought to
    be acquired. Therein the company sought to be impleaded as a partly
    respondent. The learned single Judge quashed the notification under s.4(1)
    and when a J,.P.A was filed, the division bench held that the appellant had
B
    no locus standi to file the appeal. Accordingly it dismissed the appeals.
    When its co(rectness was questioned this Court laid down that law as
    extracted hereinbefore. It is to be seen that this Court had not restricted
    the question for being impleaded in the proceedings under Art. 226, when
    s.4(1) was q11ashed. The entire gamut of controversy has been gone into
C   and held that the person for whose benefit the land is to be acquired or
    was acquired' was a person interested in the determination of the proper
    compensation and to acquire perfect title to the land. Therefore, such
    interested person is entitled to come on record to lead evidence for
    determination of proper compensation and also to secure valid title to the
D   land acquired for its benefit. This decision is consistently being followed
    by this Court: In Neetagangabai & Anr. v. State of Kamataka & Ors., (1990]
    3 SCC 617. The facts were that-the Civil Court on reference under s.18
    without notice to the Corporation for whose benefit the land was acquired,
    recorded the 'evidence and enhanced the compensation. The State had filed
    the appeal. An attempt made by the Corporation to intervene in the
E   appeals was rejected. Therefore, the Corporation filed the writ petitions
    under Art. 2;26 of the Constitution questioning the award passed by the
    Civil Court. On those facts, this held that:

            "Since no notice was given to the respondent-Corporation and it
            was thus deprived of a opportunity to place its case before the
F
            Court, the judgment rendered in the reference case was illegal and
            not binding on the Corporation."

    It may be nqted that the Karnataka Legislature made local amendment to
    s.20 of the Act and inserted therein clause 'c' that "if the acquisition is not
G   made for government, the person or authority for whom it is made, the
    notice also s!iall be served under s.20 of the Act''. Taking that fact and also
    the general principles, this Court held that the Corporation was a person
    interested under s.3(b) of the Act. The writ petition was held maintainable
    and directed the High Court to consider the matter on merits. In Krishi
H   Upaj Mandi Samiti v. Ashok Singhal & Ors., [1991] Supp. (2) SCC 419 in
   NEYVELY LIGNITE CORPN. LID. v. SPL. TAHSILDAR NEYVELY 575

similar facts as in Neelagangbai's case, when the reference court enhanced       A
the market value without notice to the Samiti and on appeal, this Court set
aside the judgment of the High Court remitted to it for its fresh disposal.

       In Union of India & Anr. v. Dist. Judge, Udhampur & Ors., J.T. 1994
(3) SC 629, the land was acquired for the benefit of Union of India for          B
laying the airport at Udhampur. The award made by the arbitrator under
J .& K.A. & R. of Immovable Property Act was questioned by filing an
appeal by the Union of India. The High Court held that the Union of India
is not a person interested in determination of the compensation. When its
correctness canvassed, this Court held that when the land was acquired for
the benefit of the Union of India, it is a person interested, since it is        C
interested in the fixation of. the proper and just compensation of the land
acquired for its benefit as well as to see that the true extent of the land is
acquired and is free from all encumbrances. Accordingly the appeal was
held maintainable at its instance.

                                                                                 D
       In Union of India v. Sher Singh & Ors., (1993] I SCC 608, the facts
were that the acquisition made by the State Government for the purpose
of National Security Guard. The Union of India sought to be intervened
by making an application in the pending reference on the ground that if
enhancement of the compensation would be made by the Dist. Judge, it
would adversely affect the Union of India and it would be deprived of an E
opportunity to file an appeal, in case it is not impleaded as a party. The
Additional Dist. Judge dismissed the application filed by the U.0.1. and
when the revision applications were heard, a full bench offive Judges held
that the Union was not a person interested. On appeal this Court held that
there is no necessity to resolve the conflict in the Himalayan Tiles case and F
of Municipal Corporation of the City of Ahmedabad v. Chandulal Shamaldas
Patel, (1971] 3 SCC 821 and followed the ratio in Himalayan Tiles case and
was held that Union of India was a person interested. It would be certainly
interested to see that the proper compensation was fixed so that a very
heavy compensation may not have to be paid. It was also held that on the
principles of equity, justice and good conscience, the Union of India should G
be impleaded as a person interested in the pending references.

      In the case of Bihar State Electricity Board v. State of Bihar & Ors.,
[1994] (2) Scale 355, the facts were that the land was acquired by the State
Government for the purpose of construction of 33/11 KV Mohania Sub-              H
    576                   SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.

A   station and staff quarters. After the reference made under s.18, the civil
    court had ~nhanced the compensation. The State filed the appeals and the
    Board sought to be impleaded as a party-respondent in the pending
    appeals but was rejected. They filed the writ petitions and questioned the
    award of the civil court but the High Court dismissed writ petitions. This
    Court he!~ that the Electricity Board for whose benefit the land was
B   acquired was not only a person interested under s3(b) of the Act but also
    a necessary and proper party under Order 1 Rule 10 of C.P.C. The Board
    is entitled to file even an appeal by leave of the court. Accordingly instead
    of directing to maintain the writ petitions, this Court directed the board to
    be impleaded as party-respondent in the pending appeals, filed by the
C   State and to raise all the contentions impugning the legality of the en-
    hanced aw<jrd of the Civil court in Union of India v. Ko/luniramiah & Ors.,
    [1994] 1 sqc 367 in an acquisition for Union of India under R. & A. of
    Immovable Property Act, 1952, the arbitration and in first appeal the High
    Court enhanced the compensation without irnpleading the Central Govt.
D   On appeal ~bench of three Judges of this Court set aside the High Court
    Order holciltig that Union of India ought to have been impleaded before,
    the arbitration and the High Court had remitted the case to the High Court
    treating it as cross objection and directed the High Court to dispose it of.

           In N. IKrishnamachari v. The Managing Director, APSRTC, Hyderabad
E   & Ors., JT (1994) 5 SC 391, when the land was acquired for the benefit of
    the AP. State Road Transport Corporation, the Notification under s.4(1)
    of the Land Acquisition Act was challenged by filing a writ petition under
    Art. 226 ir( the High Court. When the Corporation was sought to be
    irnpleaded as a party-respondent to the writ petition the High Court held
F   that the Corporation was not a person interested. Therefore, it dismissed
    the petition~. This Court held that the Corporation was a person interested
    and entitled to come on record. In that behalf, it was hdd that starting
    from Himalayan Tile case, this Court has consistently been holding that the
    beneficiary is a person interested to protect the interest which the
    beneficiary seeks to acquire in the land under the notification including
G   perfect title to the property and payment of proper compensation. There-
    fore, it is entitled to challenge the award when it was made without notice
    to it even by filing a writ petition under Art. 226 of the Constitution, apart
    from being, impleading itself as a party respondent in the acquisition
    proceedings or pending appeal or independently filing an appeal under s.54
H   of the Act. Accordingly, it was held that the Corporation was a person
   NEYVEL Y LIGNITE CORPN. LTD. v. SPL. TAHSILDAR NEYVEL Y 577

interested within the meaning of s.3{b) of the Act and was entitled to be . A
impleaded as a party respondent to the writ petition to defend the validity
of the notification under s.4(1) of the Act. In that case also, an attempt to
make a reference for the larger bench was turned down holding that in the
Municipal Corpn. of the City of Ahmedabad's case, the bench did not
advert to the definition of the person interested under s.3{b) of the Act
                                                                              B
which had led to the bench holding that the Municipal Corporation had
no locus standi to question the legality of the award of reference court.

       Shri Sanghi placed a strong reliance on Santosh Kumar & Ors., v.
Central Warehousing Corpn. & Anr., [1986] 1 SCR 603. The facts therein
were that the award made under s.11 was challenged in the writ petition C
contending that the Corporation is the affected person by determination
of the compensation and without impleading it, the award made was illegal.
The High Court exercising its jurisdiction under Art. 226 of the Constitn-
tion reduced the compensation. On an appeal, this Court had held that
when the acqnisition was made on behalf of the Corporation, the Collector D
h~d acted as an agent on behalf of the Government. The award seek a
reference under s.18, the beneficiary also cannot seek a reference. In those
circumstances, it was held that award made by the Collector could not be
questioned except when the award was vitiated by fraud, corruption or
collusion. The ratio is clearly consistent with the view taken by this Court E
in Harish Chandra v. Deputy Land Acquisition Officer, [1962] 1 SCR 676. It
is well settled law laid in Ezra v. Secretary of State of India, !LR 32 Calcutta
605 (P.C) an catena of precedents that the award made by the Collector
is only an offer made on behalf of the State and that, therefore, the State
is bound by the offer made by the Collector. If the owner accepts it without
protest no further proceedings was required to be pursued. But if the
                                                                                 F
owner received under protest and made a valid application for reference,
the amount determined by the civil Court under s.26 binds the parties and
concludes the proceedings subject to appeal. In that view, there is no
inconsistency with the view taken in Himalayan Tiles case with the view in
Santosh Kumar's case. The facts therein do not touch the controversy now G
in this case. Under these circumstances; the ratio in the Santosh Kumar's
case renders little assistance to the respondents. However, the Ahmedabad
Municipal Corpn's case is not good law. In this view it is hardly necessary
to burden the order with copious citations of contra view in plathora of
precedents of the High Courts.                                              H
    578                   SUPREME COURT REPORTS 11994] SUPP. 4S.C.R.

A        It is true that s.50(2) of the Act gives to the local authority or the
  company right to adduce evidence before the Collector or in the reference
  under s.18 as it was specifically slated that in any proceedings held before
  the Collectqr or the Court, the local authority or the company may appear
  and adduce evidence for the purpose of determining the amount of com-
B pensation. IIIowever, it has no right to seek reference. Based thereon, the
  contention is that the limited right of adduction of evidence for the purpose
  of determining the compensation does not carry with it the right to par-
  ticipate in the proceedings or right to be heard or to file an appeal under
  s.54. We callnot limit the operation of s.3(b) in conjunction with sub-s.(2)
  of s.50 of the Act within a narrow compass. The right given under sub-s.
c (2) of s.50 is in addition to and not in substituting of or in derogation to
  all the incid~ntal, logical and consequential right flowing from the concept
  of fair and just procedure consistent with the principles of natural justice.
  The consistent thread that runs through all the decisions of this Court
  starting from Himalayan Tiles case is that the beneficiary, i.e., local
D authority or company, a coop. society registered under the relevant State
  law, or statutory authority is a person interested to determine just and
   proper compensation for the acquired land and is an aggrieved person. It
  flows from it that the beneficiary has the right to be heard by the Collector
   or the Cour~. If the compensation is enhanced it is entitled to canvass its
E  correctness   by filing an appeal or defend the award of the Collector. If it
   is not made a party, it is entitled to seek leave of the court and file the
   appeal against the enhanced award and decree of the Civil Court under
   s.26 or of the judgment and decree under s.54 or is entitled to file writ
   petition under Art. 226 and assail its legality or correctness. When the
   award made under s.11 of the Collector is vitiated by fraud, collusion or
F
   corruption, ~e beneficiary is entitled to challenge it in the writ petition
   apart from lhe settled law that the conduct of the collector or Civil Judge
   is amenable to disciplinary enquiry and appropriate action. These are very
   valuable under salutary rights. Moreover in the language of Order 1 Rule
   10 CPC, in the absence of the beneficiary who ultimately is to bear the
G higher com!lensation, no complete and effectual determination of binding
   just and proper compensation to the acquired land would be made. So it
   is concommitently a proper party if not a necessary party to the proceed-
    ings under Order 1 Rule 10 CPC. The denial of the right to a person
    interested is; in negation of fair and just procedure offending Art. 14 of the
H Constitution.
   NEYVELY LIGNITE CORPN. Lill. v. SPL. TAHSILDAR NEYVELY 579

       The reasons are not far to seek. It iS4Ilotorious that though the Stakes A
involved are heavy, the Govt. plead or the instructing officer do not
generally adduce; much less proper and relevant, evidence to rebut the
claims for higher compensation. Even the cross examination will be formal,
haulting and ineffective. Generally, if not invariably the governmental
agencies involved in the process take their own time and many a time in B
collusion, file the appeals after abnormal or inordinate delay. They remain
insensitive even if the sfates involved run into several crores 'of public
money. The courts insist upon proper explanation of every days' delay. In
this attitudenal situation it would be difficult to meet strict standards to fill
the unbridgeable gaps of the delay in filing the appeals and generally entail
with dismissal of the appeals at the threshold without adverting to the C
merits in the hike in the compensation. On other hand if the notice is
issued to the local authority et~. it/they would participate in the award
proceedings under ss.11 & 18 adduce necessary and relevant evidence and
be heard before the Collector and the court before determining compen-
sation. For instance that without considering the evidence in the proper D
perspective, the court determined the compensation.

       If there is no right of hearing or appeal given to the beneficiary and
if the State does not file the appeal or if filed with delay and it was
dismissed, is it not the beneficiary who undoubtedly bears the burden of
the compensation, would be the effected person? Is it not interested to see E
that the appellant court would reasses the evidence and fix the proper and
just compensation as per law? For instance the reference court determined
market value at Rs. 1,00,000 while the prevailing market value of the land
is only Rs. 10,000. Who is to bear the burden? Suppose State appeal was
dismissed due to refusal to condone the delay, is it not an unjust and illegal F
award? Many an instance can be multiplied. But suffice it to state that when
the beneficiary for whose benefit the land is acquired is served with the
notice and brought on record at the stage of enquiry by the Collector and
reference court under s.18 or in an appeal under s.54, it/they would be
interested to defend the award under ss.11 or 26 or would file an appeal
independently under s.54 etc. against the enhanced compensation. As a G
necessary or proper party affected by the determination of higher compen-
sation, the beneficiary must have a right to challenge the correctness of
the award made by the Reference Court under s.18 or in appeal under s.54
etc. Considered from this perspective we are of the considered view that
 the appellant-company is an interested person within the meaning of s.3(b) H
    580                  SUPREME COURT REPORTS [1994) SUPP. 4 S.C.R.

A   of the Act and is also a proper party, if not a necessary party under Order
    1 Rule 10 of the CPC. The High Court had committed manifest error of
    law in holding that the appellant is not a person interested. The orders of
    the High Court are accordingly set aside.

          Since the writ petitions filed by the appellants were dismissed, we set
B   aside the orders and direct the High Court to treat them as appeals
    properly filed under s.54 of the Act and be dealt with along with the
    appeals filed by the State pending disposal in the High Court. In the
    pending references under s.18, in the Court of the Subordinate Judge,
    Cuddalore, it is directed to order impleading the appellant as a party
C   respondent and would give reasonable opportunity to cross examine the
    witness examined by the clai"1ants and to examine witness on its behalf to
    rebut the evidence for higher compensation, the appellant is entitled to be
    heard in support of the determination of just and proper compensation. In
    this view, the need to implead the appellant as a party-respondent in the
    pending appeals in the High Court does not arise.
D
          Against the interim orders refusing unconditional stay and directing
    the payment of the entire compensation, the appellants have sought leave
    of this court and this court by order dated March 18, 1989 directed the
    appellant lo deposit 90 per cent of the enhanced amount and 40 per cent
E   of the amount was directed to be withdrawn without security and 50 per
    cent shall be withdrawn on furnishing bank guarantee to the satisfaction of
    the Registrar of the High Court. The above order and the bank guarantee
    now pending before the 'Registrar of the High Court would be treated to
    be the conditional order in the pending appeals in the High Court and the
    appeals of the appellant and the appropriate orders will be passed by the
F   High Court on the basis of the decisions that would be rendered at the
    time of final disposal e>f the appeals. The appeals are accordingly allowed.
    But in the circumstances without costs.

     IN CIVIL APPEAL NOS. 3094/90 & 4448/91.
G           The appellant is the Housing Board and challenged the award of the
     Subordinate Judge made under s.26 of the Land Acquisition Act. The
     contention raised by the appellant is that it is an interested party within
     the meaning of s.3(b) of the Land Acquisition Act and without notice to
     it, the award and decree made under s.26 is not valid in law. The learned
H    single Judge of the High Court following the full bench decision held that
   NEYVELY LIGNITE CORPN. LID. v. SPL. TAHSILDAR NEYVELY 581

the appellant is not a person interested. Accordingly dismissed the writ A
petitions. Following the Judgment just now rendered in C.A. Nos. 246-
839/90 & batch, the Judgment of the High Court are set aside and the
appellant is a person interested within the meaning of s.3(b) of the Act and
also a proper party under Order 1 Rule 10 of the CPC. Accordingly the
appeals are allowed. The order of the High Court is set aside. The writ B
petitions filed by the appellant are directed to be treated as appeals under
s.54 of the Act and be dealt with and be disposed of according to law.

T.N.A.                                                 Appeals allowed.