TMI Blog2009 (9) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... receive compensation for the lands belonging to the company under liquidation acquired by the State compulsorily at the rate of ₹ 2,50,000 per acre, within 30 days from today. - CA NO. 700 OF 2008 AND CP NO. 21 OF 2002 - - - Dated:- 11-9-2009 - NOOTY RAMAMOHANA RAO, J. M. Anil Kumar for the Official Appellant. Somasekhar for the Respondent. JUDGMENT Nooty Ramamohana Rao, J. This application has been taken out by the official liquidator acting on behalf of M/s. DCL Maritech Ltd., company under liquidation seeking directions to the first respondent, the Land Acquisition Officer and Revenue Divisional Officer, Nellore, to pay compensation at the rate of Rs. 2,50,000 per acre for land admeasuring acres 113.44 cents belonging to the company under liquidation which was acquired for a public purpose. This application has been taken out in terms of sub-section (1)( e ) of section 457 of the Companies Act, 1956, read with rule 9 of the Companies (Court) Rules, 1959. 2. M/s. DCL Maritech Ltd., was ordered by this court on February 19, 2003, to be wound up, entertaining C.P. No. 21 of 2002 instituted by M/s. Godavari Packaging Systems, one of the credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, to transmit the compensation amount deposited by the Land Acquisition Officer to this court. The said company application was ordered on February 11, 2008. In compliance with the directions issued therein, the learned Senior Civil Judge, Nellore, has remitted an amount of Rs. 1,93,34,816 being the amount of compensation deposited by the Land Acquisition Officer, together with the interest earned thereon, and the amount was remitted on May 22, 2008. 3. Thereafter, the State Bank of India through their letter dated May 30, 2008, intimated the official liquidator that one of its officers deputed by the bank had applied for and obtained copies of award passed in Form No. 8 on April 10, 2007, by the Land Acquisition Officer. From a perusal of the award dated April 10, 2007, it became clear that for a small extent of land comprising acres 4.15 cents, the parties appeared to have given their consent for passing an award determining the amount of compensation payable to them at the rate of Rs. 2,50,000 per acre. Accordingly, the amount of compensation has been paid to the said land owners determining the compensation payable at the rate of Rs. 2,50,000 per acre. Whereas, for the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls for draft notification in terms of section 4(1) of the Land Acquisition Act have been submitted to the District Collector on April 30, 2006. The District Collector, Nellore has approved the draft notification under section 4(1) on May 3, 2006, followed by approval to the draft notification under section 6 on June 24, 2006. It was pointed out by the Revenue Divisional Officer that the necessary notification has been got published for the lands falling in Reach No. 7 in Nellore District Gazette on May 6, 2006 and in two daily Telugu newspapers, viz., Andhra Bhoomi and Andhra Jyoti in their issues dated May 8, 2006 and May 9, 2006 and the substance of section 4(1) notification has been published in the locality on May 11, 2006. Similarly, for the lands falling in Reach No. 4, notification under section 4(1) was published in District Gazette on July 1, 2006 and the publication in two newspapers was carried out on July 5, 2006, while the substance was published on July 7, 2006. He has also furnished the details relating to the publication of the draft declaration under section 6 for these lands. The Land Acquisition Officer has averred that the notices under sections 9(1) and 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Acquisition Act was passed for an extent of acres 4.15 cents belongs to the above said two enjoyers at the above rate and the compensation was paid to the awardees." 6. It was further pointed out that there is no power available with the Land Acquisition Officer in terms of section 13A of the Land Acquisition Act to revise the award already passed. The entire material leading up to the award passed by him on April 10, 2007, bearing Award No. 5/07-08 and Award No. 7A/07-08 has been enclosed thereto. 7. In the above facts and circumstances, the questions that fall for consideration are : "(1) Whether, the Land Acquisition Officer is justified in passing the two awards on April 10, 2007, without putting the company on notice in terms of sub-section (3) of section 9 or not ? (2) Whether, the Land Acquisition Officer can re-determine the amount of compensation payable to the applicant-company duly entertaining consent on its behalf at par with the other land enjoyers, to whom a consent award was passed for fixing the compensation payable at the rate of Rs. 2,50,000 per acre or not ?" 8. I have heard Sri M. Anil Kumar, learned counsel appearing for the official liquid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wers and functions to be performed by the liquidators appointed for winding up of companies. Subsection (1)( e ) of section 457 specifically enables the liquidator to do all such things as may be necessary for winding up the affairs of the company and importantly for distributing its assets. Learned counsel therefore submits that the company law being a special piece of legislation and in particular the provisions contained therein relating to the winding up of the companies is again being a special procedure concerning winding up of the affairs of the company, it has got to be followed strictly. Learned counsel submits that the action of the Land Acquisition Officer in proceeding to pass the award on April 10, 2007, without complying with the mandatory requirement of serving the notice on the company has vitiated the entire exercise culminating in the award. In this context, learned counsel for the official liquidator would submit that section 51 of the Companies Act requires all notices meant to be served on any company are required to be served or delivered at its registered office by post under a certificate of posting or by registered post or by leaving it at its registered of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d passed under sub-section (2) of section 11 of the Land Acquisition Act being the result of a consent executed by the land owner, is incapable of being challenged later on in any respect before the civil court whereas an award passed under sub-section (1) of section 11 could have been challenged for its correctness with regard to the fixation of market value before the competent civil court. The official liquidator having failed to do so, cannot now turn around and seek for enhancement of the compensation for which the Land Acquisition Officer is not the competent authority. 11. It is not in dispute that the land belonging to the company has been proposed for acquisition after the order made by this court on February 19, 2003, for winding up the said company. According to the Land Acquisition Officer, the draft notification under sub-section (1) of section 4 proposing the acquisition of the land has been got notified in the Nellore District Gazettes of May 6, 2006 and July 1, 2006, respectively. By these dates, the winding up order against the company has been made and the official liquidator attached to this court has been appointed as its liquidator and the official liquidat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or believed to be interested therein is mandatory. Further, sub-section (4) of section 9 makes it clear that in case any such person who is interested in the land resides elsewhere and he has no agent to receive the notice, who resides within the revenue district in which the land is situate, then the notice shall be sent to the person interested by post in a letter addressed to him at his last known residential, address or place of business and registered under sections 28 and 29 of the Indian Post Office Act, 1898. In fact, the sender of a postal article can have the article registered at the post office at which it is posted and require a receipt issued therefor, in terms of section 28 of the Indian Post Office Act, 1898. Sub-section (4) therefore, amplifies by making it obligatory for the Collector to serve the notice under sub-section (3) through a registered post sent to the address or place of business of the person interested. The Collector is not in doubt that the company being the owner, hence is interested in the lands, The "person" interested in these lands in question is a body corporate and hence section 51 of the Companies Act required all such notices to be delivere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly after service of notice under section 9. It would be a different matter that the person interested in spite of service of notice under section 9 may not turn up to participate in the enquiry and may not raise any objections either with regard to the measurements or its valuation. It is no doubt true that the enquiry and the award that follows under section 11 do not involve any quasi judicial exercise on the part of the Collector/Land Acquisition Officer. The enquiry and the award passed under section 11 are purely acts of the executive and they are pure and simple administrative functions and actions. The award is merely an offer which is sought to be made by the Collector on behalf of the State for the payment of compensation which represents, according to his decision the true prevailing market value for the lands so compulsorily acquired. There is no finality attached to this exercise. It can be validly challenged for the correctness of its contents before the competent civil court. But, nonetheless, this administrative exercise must proceed on a reasonable basis. It cannot be a whimsical exercise nor can it be perverse in its content and scope. Further, the award if it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interested in the land or whom he believes to be interested in the land. Therefore, the Legislature has made a clear distinction between occupiers of the land and persons who are interested in the land. As far as occupiers are concerned, the Collector must serve a notice upon the occupier. As far as persons interested are concerned, the obligation is cast upon him only if he knows of such persons or believes that there are such persons. With regard to the first class the obligation is absolute; with regard to the second class the obligation is not absolute but is relative and it only arises provided the Collector has knowledge or belief with regard to the existence of the second class of persons. Therefore, it is clear that a person who has not been served with a notice under section 9(3) and who is interested in the land to be acquired can only have a grievance provided he satisfies the court that the Collector wilfully or fraudulently or perversely omitted to serve the notice contemplated by section 9(3)." 15. Also, at paragraph 6 of the same judgment it was held as under (page 336) : "(6) We also wish to make it clear that in a proper case the Collector might be faxed wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and if that civil court enhances the amount of compensation payable to such an individual, the same yardstick for determining the compensation payable to the rest of the land owners whose land is sought to be acquired by the same notification issued under sub-section (1) of section 4 is liable to be adopted, even though such land owners have not bothered to agitate about the correctness and validity of the award passed by the Land Acquisition Officer by instituting proceedings under section 18 of the Act. This provision essentially addresses the concept of payment of equal amount of compensation for all the land losers covered by the same notification and simultaneously it is also intended to reduce the litigation in the courts. When once one common yardstick is adopted for determining the market value of a land in respect of one land owner, the same principle should be adopted in the matter of determination of the market value of the land of the rest of the land owners covered by the same notification. Such treatment is intended to bring about parity of treatment. Therefore, one can derive inspiration from the principle enunciated under section 28A of the Land Acquisition Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would also help in appropriately and rateably distributing the assets amongst the creditors of the company in winding up as well as observing the priority amongst them as spelt out under section 529A of the Companies Act properly and correctly also. For the aforesaid reasons, I find merit in the contentions canvassed on behalf of the company under liquidation and I therefore direct the first respondent to re-determine the amount of compensation payable for the land of an extent of acres 113.44 cents belonging to it which stood acquired in terms of the notifications published in the District Gazettes of Nellore under sub-section (1) of section 4 on May 6, 2006 and July 1, 2006, at the rate of Rs. 2,50,000 per acre. 20. For this purpose, I direct the official liquidator to convey his unequivocal consent to accept and receive compensation for the lands belonging to the company under liquidation acquired by the State compulsorily at the rate of Rs. 2,50,000 per acre, within 30 days from today. Thereafter, the Land Acquisition Officer shall pass a fresh award of compensation payable to the company under liquidation. Since the first respondent has already deposited the amount of co ..... 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