Supreme Court holds a Section 28A application cannot be founded on a First Appeal order, rejecting a claim filed 40 years on

Justices J.B. Pardiwala and K. Vinod Chandran hold that redetermination requires an award of the Reference Court, and that a rejected reference is not a situation the legislature contemplated.

Landowners whose predecessors had taken the compensation offered in the 1970s and never asked for a reference sought to have it redetermined in 2022 — relying on a First Appeal that the Allahabad High Court disposed of that year, arising from a reference by other owners under the same notification that had been rejected in 1981. The Supreme Court has rejected the application. Justices J.B. Pardiwala and K. Vinod Chandran held that Section 28A of the Land Acquisition Act, 1894 is founded on an award of the Reference Court under Section 18, that an order in a First Appeal under Section 54 cannot supply that foundation, and that the rejection of a reference is not a situation the legislature contemplated at all.

Forty years between the two orders

The appellant is the acquiring authority. The respondents' predecessors-in-interest had, admittedly, received the entire compensation and had never filed any application for a reference under Section 18 of the Act of 1894.

Others whose lands were acquired by the very same notification did seek a reference. It was referred, and then rejected by the Additional District Judge, Ghaziabad, by a judgment and decree of 25 November 1981. An appeal was filed from that under Section 54 of the Act, as First Appeal No. 458 of 1982 — and that appeal was disposed of on 18 April 2022, forty years later.

Within three months of that disposal, in May 2022, the respondents filed an application under Section 28A seeking redetermination of their own compensation. No decision having been taken on it, they filed a writ petition and obtained a direction for an expeditious decision. The Collector then rejected the application as not maintainable, on the ground that it was founded on a decision passed in First Appeal and not on an order of the Reference Court under Section 18.

The High Court took the opposite view. It held the issue was regulated by the three-judge Bench decision in Union of India v. Pradeep Kumari, which had found that the benefit under Section 28A accrues not only from the first award passed on a reference under Section 18 but from any one of the awards made after Section 28A came into force, the right of determination not being confined to the earliest award. It read that as reaffirmed in Banwari v. Haryana State Industrial and Infrastructure Development Corporation, where on what it regarded as an identical situation of a reference being rejected, entitlement to apply within three months of an award passed in appeal by the High Court had been permitted.

What Section 28A rests on

The Supreme Court's answer works through the authorities rather than around them, because they have come from Benches of varying strength.

It accepted that Babua Ram was overruled in Pradeep Kumari insofar as it had restricted an application under Section 28A to the first award made after a reference under Section 18, and that Pradeep Kumari held successive awards of the Reference Court could also found such an application. But the Bench drew attention to what Pradeep Kumari actually did on its facts. One of the appeals before that Court concerned an applicant who sought enhancement as per the award of the High Court in a first appeal. The High Court, in extending the benefit of enhanced compensation, referred instead to an award made by a District Judge in another land reference — impliedly rejecting the contention that an application would lie from an order in appeal by the High Court. That approach was upheld.

The Bench also addressed the proposition that had been read out of Babua Ram: that where an application is filed in time from an award of the Reference Court enhancing compensation and an appeal from that award is pending, the application should be kept pending until the appeal is decided, since the doctrine of merger might confer the benefit of further enhancement by the High Court. That proposition, the Court observed, in fact recognises the disability of an applicant who has once applied under Section 28A and obtained redetermination from filing a further application after the High Court decides the first appeal. It would also run against Pradeep Kumari's own stipulation that only one application under Section 28A for redetermination is permitted to an applicant.

Read with sub-section (3) of Section 28A, and with the decisions in Jose Antonio Cruz and Hansoli Devi, the position the Bench arrived at is that an application under Section 28A is not available from an order in appeal under Section 54 where enhancement has been granted under Section 26. The provision looks to the Reference Court's award, not to what happens to that award on appeal.

What the provision was inserted to do

Section 28A was introduced into the Act of 1894 to cure an inequality that the reference machinery produced on its own.

Compensation was fixed by the Collector's award. An owner dissatisfied with it could ask for a reference to the court under Section 18, and if the court enhanced the compensation, he got the higher figure. An owner who did not ask — often because he was poorer, or less advised, or simply accepted what he was offered — kept the Collector's figure, even though his land had been taken under the very same notification for the very same purpose. Section 28A allows that owner to apply to the Collector for his compensation to be redetermined on the basis of the court's award in his neighbour's reference, within three months of the date of the award.

Every element of the provision therefore keys to a court award enhancing compensation on a reference. The Bench noted sub-section (3) in support of the conclusion that an order in appeal under Section 54 does not qualify where enhancement has been granted under Section 26. And the stipulation in Pradeep Kumari that only one application for redetermination is permitted to an applicant assumes a single identifiable starting point — which successive appellate orders over four decades would not supply.

A rejected reference gives nothing to rely on

There is a further difficulty with this case that goes beyond which order can be relied upon, and the Bench identified it directly.

Section 28A exists so that a landowner who did not seek a reference may have his compensation redetermined on the basis of an award by which the court has enhanced compensation for someone else whose land was taken under the same notification. The mechanism presupposes an enhancement.

Here the reference by the other owners was rejected. There was no award enhancing anything. A situation in which the Section 28A claim is traced to a reference that failed is, as the judgment puts it, one not contemplated by the legislature.

The Bench added a point of some practical reach about successive orders. There is no question of successive orders in First Appeal conferring a fresh cause of action under Section 28A, since in First Appeal the High Court, being a Court of Record, is bound by an order passed at the first instance by a Coordinate Bench. If each order in appeal restarted the three-month clock, the provision would have no closing date at all — which is precisely what the forty-year gap in this case illustrates.

Finality, and what the forty-year gap shows

Underneath the construction of Section 28A there is a point about finality that the dates in this case make vivid.

The respondents' predecessors took their compensation and did not ask for a reference. On the ordinary principles that would have been the end of it. Section 28A gives such an owner a second chance, but a defined one: it opens for three months from a court award enhancing compensation on somebody else's reference, and closes again.

The reading the High Court adopted would have removed the closing. A reference rejected in 1981 generated an appeal decided in 2022, and if that appellate order restarted the clock, so would any further order in any further proceeding. Acquisitions from the 1970s would remain open to redetermination indefinitely, decades after possession was taken and the land built on, against authorities that have no way of knowing what liabilities remain. The Court's observation that the High Court, as a Court of Record, is bound in First Appeal by an order of a Coordinate Bench at first instance is directed at precisely that: there is no series of fresh causes of action to be harvested from the same litigation.

Order

The appeal was allowed. The impugned order of the High Court was set aside, and the application under Section 28A of the Act of 1894 was rejected.

Pending applications stand rejected.

The practical effect is that landowners who accepted compensation without seeking a reference cannot revive the question decades later by attaching themselves to an appellate order in somebody else's failed reference. The gateway to Section 28A remains an award of the Reference Court enhancing compensation, and the three months run from that.

The acquiring authority therefore keeps the position it had before the application was entertained, and the respondents are left where their predecessors left themselves when they accepted the Collector's award and did not ask for a reference.