Mukesh Kumar Mishra | Institute of Law, Jiwaji University, Gwalior | 6th April 2020
BURDWAN DEVELOPMENT AUTHORITY V. ARIFA KHATUN & ANR. (AND OTHER CONNECTED)
FACTS OF THE CASE
The Calcutta High Court, in its recent ruling has held that, under section 3 (b) of the Land Acquisition Act of 1894, the term “person interested” in any land acquisitions, not only include persons who has interest in the acquisitions but will also include the person who has interest in the subsequent compensation proceedings.
ISSUES
The issues raised in this case :-
- Whether a ‘juristic entity’ should be included under the purview of the term ‘person interested’ or not?
- Whether Shrachi was a necessary party and had any interest in payment of compensation for the acquisition process, and not the acquisition process itself ?
JUDGEMENT GIVEN BY THE HON’BLE HIGH COURT
The court answered these questions in the affirmative and said that “…[o]ne has to see through the process to the source of finance and not merely the paying hand and If [a]n entity is interested in the compensation on subsequent proceeding, then it will come within the purview of person interested…..”.
This observation was made by the single judge bench headed by the Justice Sabyasachi Bhattacharyya revisional proceeding filed by the ‘Shrachi Burdwan Developers Pvt. Ltd.’ (Hereinafter as Shrachi) in counter to the, order for enhancement of compensation. According to the facts given in this case, approx. 248 acres of lands in the district named Burdwan was acquired by the Government authority i.e. Burdwan Development Authority (Hereinafter as BDA), with the objective of developing the satellite township in that particular area. The land was acquired in the name of the company ‘Bengal Shrachi Developers Pvt. Limited’ ( Hereinafter as BS) as a part of their Public Private Partnership. After that, BS and Shrachi entered into an agreement named ‘development rights assignment agreement’. This agreement was made with regard to the said project. The clauses of the agreement specifically mentioned that on one hand, the Shrachi will do the financing of the project and will also construct and develop the project while on the other hand the BDA will oversee or watch over the acquisition proceedings. Having these types of terms in the agreement, the questions were raised by the Private Respondents that how come a ‘mere-finance provider’, whose job is only to giving money, can be included under the garb of interested parties in the land acquisition proceedings and if Shrachi does not come under the definition of ‘person interested’ then it cannot be a part of compensation enhancement procedures under the garb of necessary party as well. On the response of this the petitioner, Shrachi had argued that since Shrachi was never made or treated as party (although being the necessary party) to the proceedings, although repeatedly requested, and also not given proper time and opportunity of representation. Then order of enhancement of compensation with regard to the acquired land, payable to respondents, is void and non est. Section 3(b) of the Land Acquisition Act, 1894, clearly mentioned that, “the expression “person interested” includes all persons claiming an interest in the compensation proceedings and this definition is the inclusive definition not exhaustive in nature, so that the persons whose fate had a direct connection with the actions of the other parties, with regard to the acquisition of land, will come under this section”.
As such, the embargo in clause 3(g) of the memorandum of agreement signed between the BDA and BS dated March 8, 2006, which expressly permitted BS to take care of all the matters of technology and finance related to implementation of the project and restricted the BS to take action in the matters related to “ the land acquisition”. This clause itself makes Shrachi, to step into the shoes of BS. This clause of the agreement shifting the financial liabilities towards the Sharachi due to which it came under the definition of “person interested” in the suit, Although the Shrachi was not considered as ‘interested party’ in the acquisition proceedings. Since in this case, the Shrachi has to face the brunt of the enhancement of compensation and BDA was here only to channelize those funds. “The interest of Shrachi in the compensation or its quantum, as envisaged under Section 3(b) and also in the Section 20(b) of the Land Acquisition Act, cannot be gauged merely by its interest in the acquisition proceeding itself”. whereby compensation would go out of the pocket of Shrachi and not the BDA.
“..[I]t is clear as daylight that in the event the amount of compensation was enhanced, as done in the present cases, Shrachi had to be considered as a necessary party, since it was evidently interested in the quantum of compensation,” the high court observed. The Calcutta High Court observed that, the intention of the legislature was never to confine the term ‘persons interested’ in land acquisition proceedings and use it only for the requiring body or the land‐losers and not for the ‘financer’, “[the] language used in Section 3(b) and Section 20(b) would not be so comprehensive and all – inclusive that it will restrict the persons interested in the compensation (which includes its quantum)to come within its fold.“
CONCLUSION
In the present revisional applications the Shrachi Burdwan Developers Pvt. Ltd is the necessary party and the awards passed in all the reference proceedings by the lower court, due to non-joinder of the Shrachi , with regard to enhancement of the compensation is null and void. Negating the Respondents’ stance , the high court held that the, impugned orders passed by the earlier court, for enhancement of compensation, which was coming out of Shrachi pocket, had directly affected Shrachi. The court further held that, “The entity will come within the purview of ‘person interested’. Although an entity (Shrachi) was interested in the compensation and not directly interested in the acquisition proceeding” . Shrachi was definitely a necessary party to the all reference proceeding itself, since it was Shrachi who was taking all the burden. The court has however granted liberty to the Private Respondents to initiate fresh proceedings under Section 18 of the LA Act, impleading Shrachi as a party.
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