Case BriefsSupreme Court

Supreme Court: The bench of MR Shah* and BV Nagarathna, JJ has held that in a case where on the date of commencement of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, no award has been declared under Section 11 of the Act, 1894, due to the pendency of any proceedings and/or the interim stay granted by the Court, such landowners shall not be entitled to the compensation under Section 24(1) of the Act, 2013 and they shall be entitled to the compensation only under the Act, 1894.

It was argued before the Court that there is no express provision in Section 24, that excludes the period during which any interim order was operative, preventing the State from making an award. The Court, however, rejected the contention and held that preventing the State from taking the possession of acquired land or from giving effect to the award, in a particular case or cases, cannot result in the inclusion of such period or periods for the purpose of reckoning the period of five years.

It cannot be disputed that there shall be a very huge difference between the quantum of compensation payable under the Act, 1894 and the compensation payable under the Act, 2013. It cannot be said that there was any inaction on the part of the Authority in not declaring the award because of the interim order passed by the Court.

“Therefore, should the State and the Public Exchequer be made to suffer when there is no inaction on the part of the Authority in declaring the Award? The intention of the Parliament while enacting Section 24(1) of the Act, 2013 cannot be to give benefit to a litigant, who has obtained a stay order and because of that the award could not be declared and thereafter the litigant may be awarded the compensation as per Act, 2013. It may even result in discrimination between the landowners, whose lands have been acquired under the same notification.”

Stating that no party could take advantage of a litigation, the Court held that the principle of restitution is a statutory recognition of the rule of justice, equity and fair play. The court has inherent jurisdiction to order restitution so as to do complete justice. This is also on the principle that an unsuccessful litigant who had the benefit of an interim order in his favour cannot encash or take advantage of the same on the enforcement of the Act, 2013 by initially stalling the acquisition process and later seeking a higher compensation under the provisions of Act, 2013.

The Court, hence, observed that

“If at the instance of a landowner, who has challenged the acquisition, an interim order has been passed by a Court is successful then the proceeding of acquisition or the acquisition notification would be quashed. Then there would be no occasion to determine any compensation. But on the other hand, if a landowner, who has the benefit of an interim order in his favour whilst a challenge is made to the acquisition, is unsuccessful, he cannot then contend that he must be paid compensation under the provision of the Act, 2013 on its enforcement, whereas a landowner, who did not have the benefit of any interim order is paid compensation determined under the provisions of the Act, 1894, which is lesser than what would be computed under the Act, 2013.”

[Faizabad-Ayodhya Development Authority v. Dr. Rajesh Kumar Pandey, 2022 SCC OnLine SC 679, decided on 20.05.2022]

*Judgment by: Justice MR Shah

Case BriefsHigh Courts

Karnataka High Court: Sachin Shankar Magadum J., disposed off the petition granting compensation to the petitioners as the defaulting land fell under the provisions of Rule 21(2) (a) of the Karnataka Land Revenue Rules, 1996.

The facts of the case are such that the respondents issued a preliminary notification under Section 4(1) of the Land Acquisition Act and thereby acquired the lands of the petitioner for the purposes of submergence in the backwater of Upper Krishna Project without compensating for the ‘phot- kharab’ area as it was not notified.  Aggrieved by the same, instant petition was filed seeking writ of mandamus against the respondents to pass a supplementary award along with statutory benefits in respect of ‘phot- kharab’ area being part of land.

Counsel for the petitioners submitted that after relying on the Aakar Bandh, it was evident that survey was carried out in the year 1965-66 and the ‘phot kharab’ area is classified as ‘A’ kharab and hence would squarely fall under the provisions of Rule 21(2) (a) of the Karnataka Land Revenue Rules, 1996. It was also submitted that other landowners has also been compensated for the same ‘phot kharab’ area and hence the petitioners are also liable to be compensated for the same.

Counsel for the respondents submitted that the petitioners have waived off their right to claim on the ‘phot- kharab’ area as it was not the subject matter of the consent award and herein the same consent award is being challenged and hence issue of compensation cannot be re-agitated and compensation thereby cannot be granted.

The Court relied on the judgment Sadashivaiah v. State of Karnataka, 2003 SCC OnLine Kar 539 wherein it was held that

“31. The words phut Kharab, therefore, mean and have reference to a land which is included in an assessed survey number but which is unfit for cultivation. After coming into the force of the Karnataka Land Revenue Act 1964 the word phut Kharab has been defined under Rule 21(2) as under:—

“during the process of classification, land included as unarable shall be treated as “Pot Kharab”. Pot Kharab land may be classified as follows.

(a) That which is classified as unfit for agriculture at the time of survey including the farm buildings or threshing flours of the holder;

 (b) That which is not assessed because, (i) it is reserved or assigned for public purpose; (ii) it is occupied by a road or recognised footpath or by a tank or stream used by persons other than the holders for irrigation, drinking or domestic purposes; (iii) used as burial ground or cremation ground; (iv) assigned for villager potteries.”

  1. Therefore, it becomes clear if the land falls within the category of 21(2)(a) it is not a government land, it belongs to the ownership of the petitioners. If it falls under 21(2)(b) then it belongs to the government and the petitioners cannot have a claim over the said land. However, when the petitioners claim that the said land falls within 21(2)(a) and therefore they are entitled to the compensation LAO proceeds on the assumption that it falls within Section 22(1)(b) and therefore they are not entitled to compensation as it belongs to the government and accordingly he has declined to pass any award. It is not in dispute that before arriving at such a conclusion the LAO has not given an opportunity to the petitioners in the enquiry under Section 11 of the Act to substantiate their contention. Without any such enquiry, without affording an opportunity to the petitioners he proceeds on the assumption that the said Kharab land falls within 22(1)(b) and therefore petitioners have no claim, as such he has declined to pass the award. On that ground also, the impugned orders passed by the LAO cannot be sustained and is liable to be set aside.”

The Court thus observed that if the land falls within the category of Rule 21(2) (a) of the Karnataka Land Revenue Rules, 1996, the said ‘phot kharab’ area is not a government ladn and the same would confirm the ownership on the land owners to which this ‘phot kharab’ area is attached and the same would be classified as phot kharab ‘A’ land.

In view of the above, writ petition was disposed off.[Sadappa v. General Manager, WP No. 201108 of 2018, decided on 22-01-2020]

Arunima Bose, Editorial Assistant ahs put this story together

Case BriefsHigh Courts

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): A Division Bench of Anil Choudhary (Judicial Member) and P. Venkata Subba Rao (Technical Member), allowed an appeal which was filed on being aggrieved by the dismissal of the appeal by the Commissioner (Appeals).

The appellant is registered with the Service Tax Department and was engaged in the business of civil construction classifiable under ‘Works Contract Services’. During verification of the records and accounts maintained by the appellant and on reconciliation with the ST-3 returns filed by the appellant, it appeared that the appellant had not paid service tax on some part of their turnover during the period 2011-12 to 2014-15 particularly in respect of service provided to organizations like Andhra Pradesh Power Generation Corporation (AP GENCO), Andhra Pradesh Tourism Development Corporation (APTDC), etc. It further appeared that in respect of service rendered the recipient(s) did not fall under the category of Government/ local authority/ Government authority. The show-cause notice was adjudicated on the contest and the aforementioned demands were confirmed along with penalty of Rs 1,03,83,141/- under Section 78 of the Act and a further penalty of Rs 10,000/ under Section 77(2) of the Finance Act, 1994. Aggrieved by which the appellant had filed an appeal with the Commissioner (Appeals) who had dismissed the appeal but had reduced the penalty. Thus, the instant appeal was filed.

The Tribunal while allowing the appeal explained that admittedly all the companies / Corporations have been established by the Government of Andhra Pradesh under the various Acts and /or ‘Government order’, as aforementioned and thus held that the appellant had provided service to Governmental authority. Thus, the service recipients were covered under sub-clause (i) of clause (5), of the definition of the term ‘Govt. Authority’, in Notification No. 25/2012-ST, as amended by Notification No. 2/2014-ST (by way of substitution). Accordingly, the appellant is entitled to exemption and the demand of Rs 97,63,710 is set aside. Further, in the second issue, it was found that the construction of flats under the ‘development agreement’ with the landowner by the appellant is on principal to principal basis. In such a transaction, there is neither any element of service provided to the landowner, nor any element of sale, thus, the Tribunal held that the service tax was not imposable setting aside the demand of Rs 5,55,458/-. Lastly, in the third issue, the Tribunal held that the appellant had already provided the service as well as raised the invoice before the due date. Further, admittedly appellant had not given the option for payment of tax as per the date of receipt of consideration. Thus, the Tribunal held that demand of tax, relying on Rule 11 of Point of Taxation Rules was bad, setting aside the penalty of Rs 63,973. [Krishi Constructions (P) Ltd. v. Commr. of Central Tax, 2020 SCC OnLine CESTAT 199, decided on 22-09-2020]

Suchita Shukla, Editorial Assistant has put this story together