Summary
Land acquired by the State under Section 28 of the Karnataka Industrial Areas Development Act, 1966 for the KIADB was allotted on lease to MRPL. When the Reference Court enhanced compensation without hearing MRPL, the Karnataka High Court held it a 'person interested', relying on U.P. Awas Evam Vikas Parishad and Himalayan Tiles, and remanded the references. The Supreme Court allowed the landowners' appeals and restored the award. Peerappa Hanmantha Harijan, decided under the KIAD Act, had distinguished those decisions, which concerned acquisition for companies under Part VII and Section 50 of the Land Acquisition Act, and held that a post-acquisition allottee is neither beneficiary nor person interested. That later decision bound the High Court under Article 141 and could not be bypassed because the earlier cases were decided by a larger Bench.
Issues
- Whether a company allotted land by the KIADB after acquisition under Section 28 of the KIAD Act, 1966 is a 'person interested' entitled to be heard by the Reference Court and to appeal against enhancement of compensation.
- Whether U.P. Awas Evam Vikas Parishad v. Gyan Devi and Himalayan Tiles v. Francis Victor Coutinho, concerning acquisitions under the Land Acquisition Act, 1894, apply to acquisitions under the KIAD Act.
- Whether a High Court may decline to follow a later Supreme Court decision that has considered and distinguished earlier decisions, on the ground that the earlier decisions were by a larger Bench.
Provisions considered
- Sections 2(11), 28(1), 28(4), 28(5), 28(8) and 32(2), Karnataka Industrial Areas Development Act, 1966Land acquired by the State vests in it and is transferred to the KIADB, which develops and disposes of it under its Regulations; the acquisition is for the Board, not for the allottee company, and the notifications need not and did not name MRPL. As held in Peerappa Hanmantha Harijan, the allottee is only a lessee and is neither beneficiary nor 'person interested' within Section 2(11), which borrows the meaning in Section 3(b) of the Land Acquisition Act. (¶¶ 3.2, 7, 7.1, 7.6)
- Sections 3(b), 18, 50 and 54 and Part VII, Land Acquisition Act, 1894The provisions governing acquisition for a company, on which U.P. Awas Evam Vikas Parishad and Himalayan Tiles turned, do not apply to an acquisition under the KIAD Act; the right of appeal under Section 54 belongs to the landowners, the State and the beneficiary, not the allottee lessee. (¶¶ 3.3, 3.5, 7, 7.2, 7.5)
- Article 141, Constitution of IndiaThe subsequent decision in Peerappa Hanmantha Harijan, which considered and distinguished the earlier decisions, was binding on the High Court; declining to follow it on the ground that the earlier case was decided by three Judges was contrary to Article 141. (¶¶ 3.8, 7.3, 7.4)
Held
- The question is no longer res integra. In Peerappa Hanmantha Harijan this Court, examining the KIAD Act scheme, the Board's Regulations and the lease agreement, held that the acquisition is for industrial development by the KIADB, which alone is the beneficiary; the allottee company is a lessee whose obligation under the lease to bear enhanced compensation does not make it a beneficiary or person interested, and it has no right to participate in determination of compensation or to appeal or file a writ petition against the award. (¶¶ 7.1, 7.2, 7.6)
- The decisions in U.P. Awas Evam Vikas Parishad and Himalayan Tiles concerned acquisitions under the Land Acquisition Act, 1894, particularly Section 50 and Part VII, for a company or local authority; acquisition under the KIAD Act is distinct, and those decisions were expressly distinguished in Peerappa Hanmantha Harijan. Satish Kumar Gupta v. State of Haryana followed the same view. (¶¶ 3.5, 3.7, 7.3, 7.5)
- Once a later decision of this Court has considered and distinguished earlier decisions, the later decision binds the High Court; it was not open to the High Court to observe that the earlier three-Judge decision prevailed or that Peerappa had not considered it. The High Court committed a grave error in granting MRPL leave to appeal and remanding the references. (¶¶ 7.3, 7.4, 8)
Result
Appeals allowed; the Karnataka High Court's common judgment of 06.09.2021 setting aside the Reference Court's award and remanding the references quashed, and the Reference Court's judgment and award of 29.07.2020 restored. No order as to costs.