Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO…7784…… OF 2011 [Arising out of SLP [C] No.20741 of 2009]

Shri Ambya Kalya Mhatre (d)  Through legal heirs & Ors. … Appellants

Vs.

The State of Maharashtra … Respondents

J U D G M E N T

R.V.RAVEENDRAN, J.

Leave granted.

2. Lands  belonging  to  Ambya  Kalya  Mhatre  (‘A.K.Mhatre’  for  short,  now  

represented by his LRs.) situated at Dapoli village, Panvel taluk, Raigad district,  

bearing Sy. Nos.89/1, 85/1, 27/1, 41/1B, 41/1A, 152/3, 155/7, 18/7, 89/3, 23/2 and  

99/1 in all measuring 1.73.6 Hectares (17360 sq.m.) with a large number of fruit  

bearing  trees  and  a  well  therein,  were  acquired  for  New  Bombay  project  in  

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pursuance of preliminary notification dated 3.2.1970 (read with corrigendum dated  

5.9.1970) and final notification dated 29.7.1979.  

3. The special Land Acquisition Officer (for short ‘the Collector’) awarded the  

following compensation by award dated 4.7.1986:

S.No. Description Market  value

Solatium  (30%)

Additional amount  @ 12% per  

annum

Total

1. Land ` 24,898.32 ` 7469.49 ` 49,049.69 ` 81,417.50 2. Trees ` 83,629.00 ` 25,088.70 ` 1,65,586.40 ` 2,74,303.10 3. Well ` 500.00    ` 150.00       ` 990.00   `  1,640.00

Possession  of  the  land  was  taken  on  9.9.1986.  Not  being  satisfied  with  the  

compensation awarded, A.K.Mhatre made an application dated 10.11.1986 under  

section 18 of the Land Acquisition Act, 1894 (‘Act’ for short) to the Special Land  

Acquisition Officer (also referred as ‘Collector’ or ‘LAO’) seeking a reference to a  

District  Court  for enhancement  of  compensation by  `  90,273/-  in regard to the  

acquired lands and paid a court fee of  ` 1610/- in regard to the increase demanded.  

In pursuance of the said request, a reference was made to the Civil Court by the  

LAO on 25.11.1986. During the pendency of the reference before the reference  

court, A.K. Mhatre died and his legal representatives came on record on 30.9.1988.  

4. The appellants made an application on 13.9.1990 before the Reference Court  

seeking following amendments to the application for reference :

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(i) As against the compensation of ` 24,898.32 for the entire land (at the rate `  

6500, ` 7000 and ` 7500  per acre for different kinds of land) awarded by the  LAO,  

and the compensation claimed at the rate of ` 50,000/- per acre in regard to some of  

the lands, in the application seeking reference, the appellants sought compensation  

of ` 3,47,200/- for the acquired lands measuring 17360 sq.m. (at the rate of Rs.20  

per sq.m.) that is an increase of ` 3,22,302/-.   

(ii) As  against  the  compensation  of  ` 83,629/-  awarded  for  the  trees,  the  

appellants sought ` 10,48,400/-, that is an increase of ` 9,64,771/-. (The appellant  

had not sought any increase in regard to trees in the application for reference).  

(iii) As against the compensation of ` 500/- awarded for the well, the appellants  

sought  ` 50,000/-, that is an increase of  ` 49,500/- (Note: The appellant had not  

sought any increase in regard to the well in the application seeking reference).

The appellants  thus sought  in  all  `43,83,959/-  towards additional  compensation  

with solatium and additional amount. The appellants also paid the additional court  

fee  for  the  increase  in  the  claim.  The  reason  given  in  the  application  for  

amendment seeking increase was that A.K. Mhatre was not then in a position to  

pay the court fee on a higher claim, and had therefore restricted the claim for a  

lesser amount in the application for reference.   

5. The said application for amendment was allowed by the Reference Court on  

19.9.1990 and the claims in the reference application were modified as per the  

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amendment  application.  After  evidence,  the  Reference  Court  by  award  dated  

2.5.1991, determined the compensation as  ` 1,21,520/- (at  ` 7/- per sq.m.) for the  

land,  ` 4,46,600/- for the trees and  ` 2,000/- for the well, with statutory benefits.  

This works out to an increase of  `96,631/- for the land,  ` 3,62,971/- for the trees  

and ` 1500/- for the well. Both sides were aggrieved by the judgment and award of  

the  Reference  Court.  The  appellants  filed  Ap.  No.104/1992  seeking  further  

increase and the LAO filed FA No.226/1994 challenging the increase. The appeals  

came up for hearing on different dates before the High Court of Bombay.  

6. The appeal filed by the appellants came up for hearing first. On 4.3.2003, the  

said appeal was allowed in part and the compensation in regard to the land was  

increased  to  `10  per  sq.  m.,  by  following  its  earlier  decision  in  State  of   

Maharashtra  vs.  Tulsiram  Krishna  Mungaj  (FA  No.462  of  1990  decided  on  

18.7.2001).  The claim for increase in regard to the trees and well was rejected.

7. Subsequently the State’s appeal came up for hearing before another Bench  

of the High Court and was allowed by the impugned judgment dated 11.11.2008.  

The High Court held that the claim of appellants for enhanced compensation in  

regard to the trees and well, made by amending the application for reference under  

section 18 of the Act was barred by limitation prescribed under section 18 of the  

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Act, as A.K.Mhatre had sought in the application for reference, only increase in  

regard to the land and not in regard to the trees and well. The High Court also held  

that once compensation was awarded for the land, no separate compensation could  

be  awarded  for  the  trees.  However,  the  High  Court  did  not  disturb  the  

compensation  that  had  been  awarded  by  the  LAO for  the  trees  and  the  well,  

apparently  in  view  of  section  25  of  the  Act  which  provides  that  the  amount  

awarded by the  Collector  as  compensation  cannot  be reduced  by the  reference  

court. The High Court therefore set aside the award of additional compensation of  

`3,62,971/-  towards  the  trees  and  `  1500/-  towards  the  well  awarded  by  the  

Reference Court. The said judgment is challenged in this appeal by special leave.  

8. On  the  contentions  raised,  the  following  questions  arise  for  our  

consideration:

(i) Whether in a reference made to the Reference Court under section 18 of the  

Act, the land owner is barred from amending the amount claimed in the reference  

application  and  seeking  higher  compensation;  and  even  if  he  could  seek  

amendment,  whether  such  application  should  be  made  within  the  period  of  

limitation mentioned in section 18 of the Act?

(ii) Where the landowner has sought increase in compensation for only the land,  

in the application under section 18 of the Act, whether he can seek increase in  

compensation for the trees or structures also, before the Reference Court?

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 (iii) Where compensation is awarded for the land, whether no compensation can  

be awarded for trees or well separately?  

Re : Questions (i) and (ii)

9. The High Court held that the amendment was barred by limitation on the  

following reasoning :

“The Award of the Collector was made on 4th July, 1986. The possession of the  acquired  lands  was  taken  on  9th September,  1986  and  the  payment  of  compensation was made on 29th September, 1986. The reference came to be filed  within the prescribed period of limitation. However, about four years thereafter,  i.e. on 19th September, 1990 the reference was amended for enhancing the claim  of compensation for trees and well situate on the land. If the date of amendment  of the reference i.e. 19th September, 1990 is to be taken into consideration, the  claim for further enhancement made by way of amendment is clearly barred by  limitation. Even the respondents do not dispute that if the date of amendment of  reference is to be taken into consideration, the claim for enhanced compensation  in respect of the trees and well would be barred by limitation.  x x x x Ordinarily,  amendment  of pleadings relates  back to the date of  filing of  the proceedings.  However,  the  proposition  cannot  be  extended  to  the  question  of  limitation,  because despite grant of leave to amend proceedings, the court is duty bound to  consider whether the claim is within the prescribed period of limitation, just as the  original  claim.  Therefore,  we  find  no  substance  in  the  submission  that  the  appellant ought to have challenged the order of amendment of the reference to  enable  it  to  contend  that  the  claim  for  enhanced  compensation  is  barred  by  limitation.  Since  the  amendment  of  the  reference  for  claiming  enhanced  compensation fort he trees and the well situate on the land does not relate back to  the date of filing of the reference, for the purpose of limitation, it must be held  that  the claim made on 19th September,  1990 is  barred by limitation provided  under Section 18 of the Land Acquisition Act.”

10. During the  pendency  of  the  special  leave  petition,  the  issue  whether  the  

reference court  can permit a claimant to amend his claim so as to increase the  

compensation  claimed,  came  up  for  consideration  before  a  Full  Court  of  the  

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Bombay High Court in State of Maharashtra v. Sitaram Narayan Patil [2010 (2)  

Mh.L.J. 387]. The Full Court overruled the impugned judgment dated 11.11.2008  

(which is reported in  State of Maharashtra vs. Ambya Kalya Mhatre– 2009 (1)  

Mh.LJ 781) and held that a claimant whose land is acquired, can be allowed to  

amend his  claim application  so  as  to  enhance  the  compensation claimed  in  an  

application for reference under section 18 of the Act and that the “amendment to  

increase the compensation claimed in the application for reference under section 18  

of the Act can be allowed before the Reference Court as well as at the stage of an  

Appeal in the High Court arising out of the decision of the Reference Court.” The  

Full Court further held that while granting an amendment so as to enhance the  

claim for compensation, the general principles for considering an application for  

amendment made under Order 6 Rule 17 of the Code of Civil Procedure, 1908  

would be applicable. The Full Bench arrived at the said findings on the following  

reasoning  :

“Section 18 can be invoked by any person interested who has not accepted the  award. He may by written application to the Collector require that the matter be  referred by Collector for determination of the Court and his objections are of the  nature  specified  in  section  18(1).  Sub-section  2  of  section  18  states  that  the  application which is to be made in writing shall state the grounds on which the  objections to the Award is raised. On receipt of this application, under section 19,  while making a reference, the Collector shall state for the opinion of the Court in  writing under his hand, the particulars of the case, …. Sub-clause (d) of section  19(1) states that if the objection be to the amount of compensation, the grounds on  which  the  amount  of  compensation  is  determined.  Thus,  the  Collector  in  his  statement  to  the  Court  gives  an  opinion  in  writing  under  his  hand  about  the  grounds on which the amount of compensation was determined by him……  

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Under the scheme of section 18 of the Act, the reference is required to be filed  within a period of limitation. The period of limitation depending upon the facts of  a given case would be six weeks to six months. Six months being outer limit, in  either of the events, when the applicant was present before the Collector at the  time when the award was made or when he was served with notice under sub- section (2) of section 12 of the Act. It is now fairly a settled law that this specific  period of limitation is mandatory and is not flexible. As stated above, in order to   refer the matter before the Collector for determination to the Court, the claimant   is required to raise objections regarding the amount of compensation. He is not   under an obligation to specify the amount of compensation. Once his objection as   to the amount of  compensation is filed within a prescribed period under sub- section (2) of section 18 of the said Act, before the Collector, then the Collector is   duty  bound  to  refer  the  matter  to  the  Court  along  with  his  statement  as  contemplated under section 19 of the said Act. The claimant thereafter,  cannot  introduce any other objections as contemplated under section 18 of the Act either  before the Court or in an appeal under section 54 of the said Act.  However, the  claimant  once  take  objection  to  amount  of  compensation  within  a  prescribed  period is at liberty to claim enhancement in the compensation, thereafter.”

(emphasis supplied)

The learned counsel  for  the respondent  contended that  the impugned judgment  

dated 11.11.2008 of the High Court lays down the correct legal position and that  

the reasoning in the full bench in Sitaram Narayan Patil is not sound.

11. Section 18 of the Land Acquisition Act, 1894 (as amended in Maharashtra)  

relating to reference to court  is extracted below :

“18. Reference to Court.—(1)  Any person interested who has not accepted the  award (or the amendment thereof) may, by written application to the Collector,  require that the matter be referred by the Collector for the determination of the  Court, whether his objection be to the measurement of the land, the amount of the  compensation,  the persons to whom it  is payable,  or the apportionment of the  compensation among the persons interested.

(2)  The application shall state the grounds on which objection to the award (or  the amendment) is taken:

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Provided that every such application shall be made,--

(a) if the person making it was present or represented before the Collector at the  time when he made his award (or the amendment), within six weeks from the  date of the Collector’s award;

(b) in other cases, within six weeks of the receipt of the notice from the Collector  under section 12, sub-section (2), or within six months from the date of the  Collector’s award (or the amendment), whichever period shall first expire.

(3)   Any order made by the Collector on an application under this section shall be  subject to revision by the High Court, as if the Collector were a court sub-ordinate  to  the  High  Court,  within  the  meaning  of  section  115  of  the  Code  of  Civil  Procedure, 1908.”  

An analysis of section 18 of the Act would show that any person interested who  

does  not  accept  the  award can,  by  written  application  to  the  Land Acquisition  

Collector, require the matter to be referred for determination of the court in regard  

to any one of the following matters :

(a) Objection to the measurement of the land;

(b) Objection to the amount of compensation;

(c) Objection  as  to  the  persons  to  whom  the  compensation  is  payable; or

(d) Objection to the apportionment of the compensation among the            persons interested.

12. The  Land  Acquisition  Collector  is  not  a  court.  When  he  determines  the  

compensation, he does not adjudicate, but merely makes an offer for the acquired  

land, on behalf of the government. If the land owner considers the amount offered  

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by the Land Acquisition Collector to be inadequate and makes a request within the  

prescribed period, for reference to the civil court under section 18 of the Act, the  

Land Acquisition  Collector  is  bound to  refer  the  matter  to  the  Civil  Court  for  

determination  of  the  compensation.  He  has  no  choice  of  refusing  to  make  a  

reference, when the request is in time. Neither the act of making an award offering  

compensation nor the act of referring the matter to a civil court for determination  

of compensation at the request of the land owner are judicial functions, but are  

administrative functions. The legal position of an award by the Land Acquisition  

Officer vis-à-vis the proceedings in a reference to the civil court under section 18  

of the Act is explained thus by this Court in Chimanlal Hargovinddas vs. Special   

Land Acquisition Officer, Poona - 1988 (3) SCC 751 :-

“4. The following factors must be etched on the mental screen :

(1) A reference under Section 18 of the Land Acquisition Act is not an  appeal against the award and the court cannot take into account the material relied  upon by the Land Acquisition Officer in his award unless the same material is  produced and proved before the court.

(2) So also the award of  the Land Acquisition  Officer  is  not to  be  treated as a judgment of the trial court open or exposed to challenge before the  court hearing the reference. It is merely an offer made by the Land Acquisition  Officer  and  the  material  utilized  by  him for  making  his  valuation  cannot  be  utilized by the court unless produced and proved before it. It is not the function of  the court to sit in appeal against the award, approve or disapprove its reasoning, or  correct its error or affirm, modify or reverse the conclusion reached by the Land  Acquisition Officer, as if it were an appellate court.

(3) The  court  has  to  treat  the  reference  as  an  original  proceeding  before  it  and  determine  the  market  value  afresh  on  the  basis  of  the  material  produced before it.”    

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Sub-section (3) of section 18 of the Act (added in Maharashtra) providing that the  

Land Acquisition Collector shall be deemed to be a court sub-ordinate to the High  

Court, is therefore only for the limited purpose of enabling a revision under section  

115 of the Code to be filed against the order of the Collector under section 18 of  

the Act, and not for any other purpose.  

13. The assumption made by the High Court that when a reference is sought  

objecting to the amount of compensation, the claim for increase will have to be  

frozen with reference to the amount claimed in the application under section 18 of  

the Act and therefore the quantum of the claim cannot subsequently be revised or  

increased is misconceived. Similarly, the assumption that if the claim for increase  

in  an  application  for  reference  (relating  to  an  acquisition  involving  a  property  

consisting of land, building and trees), was only in regard to the compensation for  

the land, the land owner cannot thereafter make a grievance seeking increase in  

regard to the building or trees in the pleadings before the Reference Court and that  

in such a case,  the Reference Court  gets  the jurisdiction to determine only the  

market value in regard to the land and not in regard to the building and trees, is  

also not correct. Section 18 does not require a land owner objecting to the amount  

of compensation, to make a claim for any specific amount as compensation, nor  

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does it require him to state whether the increase in compensation is sought only in  

regard to the land, or land and building, or land, building and trees. A land owner  

can seek reference to civil court, with reference to any one or more of the four  

types of objections permissible under section 18 of the Act, with reference to the  

award. His objection can either be in regard to the measurement of the acquired  

land or  in regard to  the  compensation  offered by the  Collector  or  in regard to  

persons to whom it  is shown as payable or the apportionment of compensation  

among several claimants. Once the land owner states that he has objection to the  

amount of compensation, and seeks reference to the civil court, the entire issue of  

compensation is open before the Reference Court. Once the claimant satisfies the  

Reference Court that the compensation awarded by the Land Acquisition Officer is  

inadequate,  the  Reference  Court  proceeds  to  determine  the  compensation,  with  

reference to the principles in section 23 of the Act. As the Act does not require the  

person aggrieved/landowner to specify the amount of compensation sought, when  

objecting to the amount of compensation and seeking a reference, mentioning of  

the amount of compensation sought is optional. As there is no obligation to specify  

the  amount  in  the  application  for  reference,  it  can  be  specified  in  the  claim  

statement filed before the Reference Court. The period of limitation in section 18  

of the Act has nothing to do with specifying the amount of compensation claimed.  

It therefore follows that if the reference is in regard to objection to the amount of  

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compensation, the Reference Court can permit any application for amendment of  

the claim relating to compensation.

14. The High Court has lost sight of the scheme of the Act.  When a land is  

acquired,  the  Land  Acquisition  Officer  makes  an  offer  on  behalf  of  the  state  

government,  in  regard  to  the  compensation.  The  offer  made  by  the  Land  

Acquisition Officer is not an adjudication of the market value or the compensation  

payable to the land owner. When such offer is made, the land owner has the choice  

of  either  accepting the  compensation  in  full  and final  satisfaction  or  to  seek a  

reference  to  the  civil  court  for  determination  of  the  amount  of  compensation.  

Where  the  land  owner  does  not  seek  a  reference  within  the  time  specified  in  

section 18 of the Act, he is deemed to have accepted the award and the award of  

the Land Acquisition Officer attains finality under section 12 of the Act. Section  

18  of  the  Act  enables  the  land  owner  or  person  interested  to  make  a  written  

application to the Collector requiring his objection to the award, to be referred for  

determination by the court. In the application, he has to state whether his objection  

is  in  regard  to  measurement,  quantum  of  compensation,  persons  entitled  to  

compensation, or apportionment. He is also required to state the grounds on which  

the objection to the award, is taken. But the section does not require the land owner  

while seeking a reference, to specify the quantum of compensation demanded by  

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him. Section 18 merely requires a land owner who has an objection to the amount  

of compensation awarded by the Land Acquisition Officer to require the matter to  

be referred to reference court for determination of compensation by specifying the  

grounds of objections to the award.  

15. Section 19 of the Act provides that  on receipt  of the application seeking  

reference made in accordance with section 18 of the Act, the Collector is required  

to  make  the  reference  by  forwarding  the  application  for  reference  (or  a  copy  

thereof)  with  his  statement  setting  out  the  grounds  on  which  the  amount  of  

compensation was determined by him. Section 19 is extracted below :

“19.  Collector’s  statement  to  the  Court.—(1)  In  making  the  reference,  the  Collector shall state, for the information of the Court, in writing under his hand, --

(a) the situation and extent of the land, with particulars of any trees, buildings or  standing crops thereon;

(b) the names of the persons whom he has reason to think interested in such land;

(c) the amount awarded for damages and paid or tendered under sections 5 and  17, or either of them, and the amount of compensation awarded under section  11;

(cc)   the amount paid or deposited under sub-section (3A) or section    17; and

(d) if the objection be to the amount of the compensation, the grounds on  which the amount of compensation was determined.

(2) To the said statement, shall be attached a Schedule giving the particulars of  the notices served upon, and of the statements in writing made or delivered by, the  parties interested, respectively.”

(emphasis supplied)

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When the  reference  is  received,  the  court  causes  notice  specifying  the  date  of  

hearing for determining the objection of the land owner/person aggrieved (section  

20 of the Act). The Reference Court has to call upon the claimants to file their  

statement of claim and call upon the Collector to file his objections to the claim  

statement and then proceed with the matter. Where the application under section 18  

contains the necessary particulars, the Reference Court may treat the application  

for reference under section 18 and the Collector’s statement under section 19 of the  

Act as the pleadings. The land owner is entitled to specify the amounts claimed by  

him as compensation and the heads of compensation for the first time in such claim  

statement before the Reference Court. He can also file an application amending the  

claim. What is not permitted after the expiry of the period of limitation specified in  

section 18 of the Act, is changing the nature of objections from one category to  

another. If the reference had been sought with reference to objection to amount of  

compensation,  the  land  owner  cannot  after  the  period  of  limitation,  seek  

amendment  to  change  the  claim  as  objection  to  measurement  or  objection  to  

apportionment.  

16. A land owner, particularly a rural agriculturist, when he loses the land may  

not know the exact value of his land as on the date of the notification under section  

4(1) of the Act. When he seeks reference he may be dissatisfied with the quantum  

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of compensation but may not really know the actual market value. Many a time  

there may not be comparable sales, and even the courts face difficulty in assessing  

the compensation.  There is no reason why a land owner who has lost his land,  

should  not  get  the  real  market  value  of  the  land  and  should  be  restricted  by  

technicalities  to  some  provisional  amount  he  had  indicated  while  seeking  the  

reference. As noticed above, the Act does not require him to specify the quantum  

and all that he is required to say is that he is not satisfied with the compensation  

awarded and specify generally the grounds of objection to the award. Under the  

scheme  of  the  Act,  it  is  for  the  court  to  determine  the  market  value.  The  

compensation depends upon the market value established by evidence and does not  

depend upon what the land owner thinks is  the value of his land. If he has an  

exaggerated notion of the value of the land, he is not going to get such amount, but  

is going to get the actual market value. Similarly if the land owner is under an  

erroneous low opinion about the market value of his land and out of ignorance  

claims lesser amount, that can not be held against him to award an amount which is  

lesser than the market  value. When the Act does not require the land owner to  

specify the amount of compensation, but he voluntarily mentions some amounts,  

and subsequently, if the market value is found to be more than what was claimed,  

the land owner should get the actual market value. We fail to see why the land  

owner  should  get  an  amount  less  than  the  market  value,  as  compensation.  

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Consequently, it follows that if the land owner seeks amendment of his claim, he  

should be permitted to amend the claim as and when he comes to know about the  

true market value. When the Act is silent in regard to these matters, to impose any  

condition to the detriment of an innocent and ignorant land owner who has lost his  

land, would be wholly unjust.  

17. The Collector making the offer of compensation on behalf of the state is  

expected to be fair and reasonable. He is required to offer compensation based on  

the market value. Unfortunately Collectors invariably offer an amount far less than  

the real market value, by erring on the safer side, thereby driving the land owner  

first to seek a reference and prove the market value before the reference court and  

then approach the  High Court  and many a  time this  Court,  if  he does not  get  

adequate compensation.  In most land acquisitions, the land acquired is the only  

source of his livelihood of the land owner. If the compensation as offered by the  

Collector is very low, he cannot buy any alternative land. By the time he fights and  

gets the full market value, most of the amount would have been spent in litigation  

and living expenses and the price of lands would have appreciated enormously,  

making it impossible to buy an alternative land. As a result, the land owner seldom  

has a chance of acquiring a similar land or an equal area of similar land. It would  

be adding insult to injury, if the land owner should be tied down to a lesser value  

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claimed by him in the reference application, even though he was not required by  

law to  mention  the  amount  of  compensation  when seeking  reference.  The  Act  

contemplates  the land owner getting the market  value as  compensation  and no  

technicalities should come in the way of the land owner getting such market value  

as compensation.   

18. It is relevant to notice the definition of land in section 3(a) of the Act. It  

provides  that  the  expression  “land”  includes  benefits  to  arise  out  of  land,  and  

things attached to the earth or permanently fastened to anything attached to the  

earth. Therefore when the Act refers to acquisition of ‘land’, the reference is not  

only to land but also to land, building, trees and anything attached to the earth. In  

the absence of any restriction in section 18 of the Act, and the respective roles  

assigned by the Act to the Land Acquisition Collector and the Reference Court in  

the context of making a reference and determining the compensation, we are of the  

view that once the reference is made in regard to amount of compensation, the  

Reference Court will have complete jurisdiction to decide the compensation for the  

land, buildings and trees and other appurtenances. The Reference Court will also  

have the power to entertain any application for increasing the compensation under  

whatever head. The fact that the landowner had sought increase only in regard to  

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the land in the application for reference, will not come in the way of the landowner  

seeking increase even in regard to trees or structures, before the Reference Court.

19. We are conscious of the fact  that  the State  of Maharashtra has a special  

provision in the Bombay Court Fees Act, 1959 (Entry 15 in Schedule I) which  

requires every claimant who makes an application to the Collector for a reference  

to court under section 18 of the Act to pay one half the ad valorem fee on the  

difference between the amount awarded by the Collector and the amount claimed  

by  the  claimant.  Thus  the  application  under  section  18  objecting  to  the  

compensation by implication is required to disclose the amount of compensation  

sought and pay court fee on the increase sought. But this is only a requirement in  

regard to the Court Fees Act. This only means that if the claim is amended later,  

additional court fee may have to be paid. This requirement under the Court Fees  

Act cannot be read as a requirement under the Land Acquisition Act. So long as  

Land Acquisition Act is not amended to require the person aggrieved to specify the  

amount of compensation claimed by him in the reference application, the bar of  

limitation will  not  apply  even if  the  amount  is  specified in  the  application  for  

reference and subsequently a higher amount is sought by way of amendment.  

20. We therefore hold that the time limit under section 18 of the Act is only for  

seeking the reference by raising the objection to the amount of compensation or  

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any of the other three objections. The land owner or persons aggrieved will have to  

give only the nature of objection to the award, that is whether it is with reference to  

measurement or compensation or person to whom it is payable or apportionment,  

and briefly mention the grounds in support of it. Though the land owner can give  

the details of his claim and quantum, he is not bound to do so. When the reference  

is made, he can give the particulars of the claim for compensation or additional  

particulars or even increase the claim.   

Re : Question (iii)

21. The High Court has also held that once the compensation is awarded for the  

land, there cannot be additional or separate compensation for the trees. For this  

purpose, the High Court has relied upon the following observations of this Court in  

State of Haryana vs. Gurcharan Singh – 1995 Supp (2) SCC 637 :  

“It is settled law that the Collector or the court who determines the compensation  for the land as well as fruit bearing trees cannot determine them separately. The  compensation is to the value of the acquired land. The market value is determined  on  the  basis  of  the  yield.  Then  necessarily  applying  suitable  multiplier,  the  compensation  needs  to  be  awarded.  Under  no  circumstances  the  court  should  allow the compensation on the basis of the nature of the land as well as fruit- bearing trees. In other words, market value of the land is determined twice over;  once on the basis of the value of the land and again on the basis of the yield got  from the fruit-bearing trees. The definition of land includes the benefits which  accrue from the land as defined in section 3(a) of the Act. After compensation is  determined on the  basis  of  the  value  of  the  land as  distinct  from the  income  applying suitable multiplier, then the trees would be valued only as firewood and  necessary compensation would be given.”  

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22. We are afraid that the High Court has misread the said decision in regard of  

valuing the land and trees separately. If the land value had been determined with  

reference to the sale statistics or compensation awarded for a nearby vacant land,  

then necessarily, the trees will have to be valued separately. But if the value of the  

land  has  been  determined  on  the  basis  of  the  sale  statistics  or  compensation  

awarded  for  an  orchard,  that  is  land  with  fruit-bearing  trees,  then  there  is  no  

question of again adding the value of the trees. Further, if the market value has  

been determined by capitalizing the income with reference to yield, then also the  

question of making any addition either for the land or for the trees separately does  

not arise. In this case, the determination of market value was not with reference to  

the yield. Nor was the determination of market value in regard to the land with  

reference to the value of any orchard but was with reference to vacant agricultural  

land. In the circumstances, the value of the trees could be added to the value of the  

land.  

A suggestion to the State Government  

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23. In all other States,  ad valorem court-fee is payable only when an appeal is  

filed against the award of the Reference Court, seeking higher compensation and  

not in regard to applications for reference under section 18 of LA Act. Only in  

Maharashtra and Gujarat, the land losers are required to pay half of the ad valorem  

court-fee while seeking reference to the civil court.  Most of the land-losers are  

agriculturists. For many of them, the only source of livelihood is taken away by  

acquisition  of  their  lands.  Though,  the  Collector  is  expected  to  award  

compensation  based  on  the  market  value,  quite  often,  it  is  seen  that  in  actual  

practice,  the  compensation  offered  by  the  Collector  is  far  less  than  the  actual  

market value, thereby forcing the land-losers to seek references to civil court. In  

such cases, the amount awarded by the Collector being comparatively small, the  

requirement to pay ad-valorem court-fee on the application for reference causes  

irreparable hardship, forcing the land loser to seek a lesser increase than what is  

warranted. The State Government may therefore consider giving appropriate relief  

to the land losers by providing for a nominal fixed court-fee, on the application for  

reference, instead of ad valorem court fee.  

24. We therefore allow this appeal, set aside the judgment dated 11.11.2008 of  

the High Court, and remand the matter to the High Court for consideration of the  

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appeal on merits.   As the matter relates to a 1970 acquisition and the appeal was of  

the year 1994, we request the High Court to dispose of the appeal expeditiously.

………………………….J. (R. V. Raveendran)

………………………….J. (H. L. Gokhale)

New Delhi; ………………………….J. September 12, 2011 (Gyan Sudha Misra)

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