Lok Adalat Award Cannot Be The Basis For Redetermination Of Compensation U/Sec 28A Land Acquisition Act, 1894: Supreme Court

The Supreme Court has held that the Award passed by a Lok Adalat under Section 20 of the Legal Services Authorities Act, 1987 cannot be the basis for redetermination of compensation as contemplated under Section 28A of the the Land Acquisition Act, 1894.

The award which is passed by the Lok Adalat cannot be said to be an award passed under Part III of the Land Acquisition Act 1894 where adjudication is contemplated, the bench comprising Justices KM Joseph and PS Narasimha  said.

Background

In this case, a notification came to be issued under Section 4(1) of the Act on 21.03.1983 in respect of villages situated in Tehsil Dadri (Situation in District Ghaziabad) for planned industrial development contemplated by the NOIDA. By the Award of the Land Acquisition Officer, the compensation was fixed for the lands belonging to the some persons inter alia at the rate of Rs.24,033 per bigha. These persons did not seek enhancement under Section 18 of the Act.

One Fateh Mohammed filed an application seeking reference against the Award, which was made over to a Lok Adalat. Lok Adalat then fixed the compensation at Rs.297 per square yard as against Rs.20 per square yard which was fixed by the Land Acquisition Officer by his Award dated 28.11.1984. This made the other land owners file applications before Additional District Magistrate under Section 28A of the Act. The Additional District Magistrate rejected the applications on the basis that the Award dated 12.03.2016 passed by the Lok Adalat was on the basis of the compromise. 

Later, the High Court, allowed the writ petitions filed by these land owners by holding that since an Award passed by the Lok Adalat is to be taken as a decree of a Civil Court, it is to be conflated to the adjudication contemplated under Section 28A of the Act i.e. redetermination of compensation by the Civil Court.

Rival Contentions/Issue 

NOIDA approached the Apex Court essentially contending that an Award passed by the Lok Adalat is not a decree as contemplated in Section 28A of the Act. The Land owners respondents contended that being a decree of a Civil Court, the Award of the Lok Adalat would provide firm foundation for similarly circumstanced persons to claim benefit of Section 28A. 

So the issue considered by the bench was whether the Award passed by a Lok Adalat under Section 20 of the Legal Services Authorities Act, 1987 can form the basis for redetermination of compensation as contemplated under Section 28A of the the Land Acquisition Act, 1894?

The Apex Court bench, at the outset, noticed that there is a divergence of judicial opinion on this subject among the High Courts.

Section 28A 

Section 28A provides for re-determination of the amount of compensation on the basis of the award of the Court. It provides that where in an award under this part, the court allows to the applicant any amount of compensation in excess of the amount awarded by the collector under section 11, the persons interested in all the other land covered by the same notification and who are also aggrieved by the award of the Collector may, notwithstanding that they had not made an application to the Collector under section 18, by written application to the Collector within three months from the date of the award of the Court require that the amount of compensation payable to them may be re-determined on the basis of the amount of compensation awarded by the court.

The bench noted the scheme of Land Acquisition Act as follows

The proceedings are commenced by a notification under Section 4. Compensation is determined with reference to the date of the said notification. After the procedures are undergone, an Award is passed.

While Section 18 provides for a right with a person dissatisfied with the amount inter alia awarded by the Land Acquisition Officer to seek enhancement, Section 28A contemplates situations where a person has not availed of the right under Section 18 but any other person has utilized the provisions of Section 18 and obtained an enhancement. Other conditions obtaining in Section 28A being present, a person who has not filed application under Section 18 inter alia is entitled to claim redetermination of the compensation.

The scheme of Section 28A of the Act is unmistakably clear from its very opening words. What section 28A contemplates is a redetermination of compensation under an award passed under Part III. Part III takes in Section 23. Section 23 deals with the matters to be taken into consideration. Various aspects including the market value on the date of the notification under Section 4(1) are indicated.

Lok Adalat Award

The court then noticed that the jurisdiction of the Lok Adalat under Section 20 is to facilitate a settlement of disputes between the parties in a case.

It has no adjudicatory role. It cannot decide a lis. All that it can do is to bring about a genuine compromise or settlement. Sub-Section (4) of Section 20 is important insofar as the law giver has set out the guiding principles for a Lok Adalat. The principles are justice, equality, fair play and other legal principles.

The court observed that the elements of Section 23 are not in consonance as such with the guiding principles set out in Section 19(4) of the '1987 Act' which are to guide a Lok Adalat. It said:

"19(4) of the '1987 Act' which are to guide a Lok Adalat. When the Court deals with the matter under Section 18, in other words, it is bound to look into the evidence and arrive at findings based on the evidence applying the legal principles which have been enunciated and arrive at the compensation. While it may be true that there is reference to 'other legal principles' in Section 19(4) of the 1987 Act, the Lok Adalat also can seek light from the principles of justice, equity, and fair play. The Lok Adalat by virtue of the express provisions is only a facilitator of settlement and compromise in regard to matters which are referred to it. It has no adjudicatory role"

The bench then proceeded to address the contention that when there is a consent decree, the parties to the consent decree would be estopped by its terms from resiling from its impact. The contention was that since the Lok Adalat award is based on the consent of the NOIDA, NOIDA is estopped.  In this regard, the court said:

"There can be no quarrel with the said proposition. It is, however, a far cry therefrom to hold that the fact that parties to such a consent decree would be estopped as against each other, can yet form the premise for a redetermination of the compensation qua persons who are not parties to an award which is the offspring of a compromise between the parties. In other words, when Section 28A provides for what undoubtedly is a benefit to those who have not availed of their right under Section 18 of the Act, a beneficial view can be taken, the Court cannot shut its eyes to the command of the law giver."

"A plea founded on estoppel arising out of a consent decree or from an Award passed by a Lok Adalat which can perhaps be even likened to a consent decision cannot be the basis for redetermination of the compensation. What Section 28A indeed insists is on decision by a Civil Court as defined in Section 2(l). In other words what is made the only basis for invoking Section 28A of the Act is an adjudication by the Court as defined in the Act. The plea of estoppel which, ordinarily, arises from a consent decree or Award passed by the Lok Adalat which, as already noticed, does not involve any adjudication by a Court, would hardly suffice. The estoppel which is referred to by this Court applies as between the parties to the consent decree."

The bench then dealt with the contention that the award of the Lok Adalat passed in these cases by the Reference Court under Section 18 executing the Lok Adalat must be treated as an order passed by the Court under Section 28A of the Act. The bench gave the following reasons for holding that the Lok Adalat award cannot be the basis to file application under Section 28A:

Adjudication is contemplated under Section 28A

The award which is passed by the Lok Adalat cannot be said to be an award passed under Part III. It is the compromise arrived at between the parties before the Lok Adalat which culminates in the award by the Lok Adalat. In fact, an award under Part III of the Act contemplates grounds or reasons and therefore, adjudication is contemplated and Section 26(2) of the Act is self-explanatory

The Award passed by the Lok Adalat in itself without anything more is to be treated by the deeming fiction to be a decree. It is not a case where a compromise is arrived at under Order XXIII of the Code of Civil Procedure, 1908, between the parties and the court is expected to look into the compromise and satisfy itself that it is lawful before it assumes efficacy by virtue of Section 21. Without anything more, the award passed by Lok Adalat becomes a decree. The enhancement of the compensation is determined purely on the basis of compromise which is arrived at and not as a result of any decision of a 'Court' as defined in the Act.

'The Court' is not the same as a Lok Adalat.

Not only must it be an award passed as a result of the adjudication but it must be passed by 'the Court' allowing compensation in excess of the amount awarded by the collector. The word 'Court' has been defined in the Act as the Principal Civil Court of original jurisdiction unless the appropriate Government has appointed a Special Judicial Officer to perform judicial functions of the court under this Act. We have noticed the composition of a Lok Adalat in Section 19(2) of the '1987 Act'. The Court is not the same as a Lok Adalat.

 Award passed by the Lok Adalat is not a compromise decree

An Award passed by the Lok Adalat is not a compromise decree. An Award passed by the Lok Adalat without anything more, is to be treated as a decree inter alia. We would approve the view of the learned Single Judge of the Kerala High Court in P.T. Thomas (supra). An award unless it is successfully questioned in appropriate proceedings, becomes unalterable and non-violable. In the case of a compromise falling under Order XXIII Code of Civil Procedure, it becomes a duty of the Court to apply its mind to the terms of the compromise. Without anything more, the mere compromise arrived at between the parties does not have the imprimatur of the Court. It becomes a compromise decree only when the procedures in the Code are undergone.

An Award passed under Section 19 of the 1987 Act is a product of compromise. Sans compromise, the Lok Adalat loses jurisdiction. The matter goes back to the Court for adjudication. Pursuant to the compromise and the terms being reduced to writing with the approval of the parties it assumes the garb of an Award which in turn is again deemed to be a decree without anything more. We would think that it may not be legislative intention to treat such an award passed under Section 19 of the 1987 Act to be equivalent to an award of the Court which is defined in the Act as already noted by us and made under Part III of the Act. An award of the Court in Section 28A is also treated as a decree. Such an Award becomes executable. It is also appealable. Part III of the Act contains a definite scheme which necessarily involves adjudication by the Court and arriving at the compensation. It is this which can form the basis for any others pressing claim under the same notification by invoking Section 28A. We cannot be entirely oblivious to the prospect of an 'unholy' compromise in a matter of this nature forming the basis for redetermination as a matter of right given under Section 28A.

Case details

Case name: New Okhla Industrial Development Authority (NOIDA) vs Yunus

Citation: 2022 LiveLaw (SC) 123

Case no.| date: CA 901 OF 2022 | 3 Feb 2022

Coram: Justices KM Joseph and PS Narasimha

Counsel: Adv Anil Kaushik for appellant, Sr. Adv Dhruv Mehta and Sr.Adv V. K. Shukla, for respondents