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       R.P. (C) NO.888 OF 2015 IN C.A. 1810 OF 2009 ETC.                               2

   J U D G M E N T

V. GOPALA GOWDA, J.

Review Petition (C) No. 888 of 2015:       

Delay condoned in filing the Review Petition.

2. This Review Petition is filed seeking review of

the  impugned  judgment  and  order  dated  28.11.2013

passed by this Court in Civil Appeal No. 1810 of

2009, whereby the said appeal was dismissed with a

direction to the Review Petitioners- Appellants to

make and publish an award in respect of the remaining

suit land within four months from the date of the

impugned judgment and pay compensation to Respondent

No.1. herein. I.A. No. 7 of 2014 was filed by the

Review Petitioners-Appellants praying that the order

dated 28.11.2013 be modified and suitable direction

be  given  to  the  appellants  with  regard  to  the

remaining extent of 5.33 hectares of land regarding

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which  no  acquisition  proceeding  was  considered

necessary by the Andaman and Nicobar Administration.

The I.A. was disposed of by this Court vide order

dated 11.12.2014, wherein liberty was granted to the

Review Petitioners-Appellants to file Review Petition

before  this  Court  within  six  weeks,  with  further

direction that the same would be heard in open court

and decided on merits of the case.

3. As the facts of the case are already stated in

the decision in Civil Appeal No. 1810 of 2009 and

I.A. 7 of 2014, for the sake of brevity, the same

need  not  be  reiterated  herein.  The  following

contentions  were  advanced  by  the  learned  senior

counsel appearing on behalf of the parties in support

of their case:

4. Mr. Mukul Rohatgi, the learned Attorney General,

appearing  on  behalf  of  the  Review

Petitioners-Appellants urged this Court to consider

reviewing  the  impugned  judgment  by  placing  strong

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       R.P. (C) NO.888 OF 2015 IN C.A. 1810 OF 2009 ETC.                               4

reliance  upon  the  lease  deed  dated  01.09.1960,

executed in respect of the property covered in the

acquisition  notifications  between  Krishi  Gopalan

Silpa Sikshalaya and M/S Andaman Timber Industries

Ltd.  (the  first  respondent  herein).  The  learned

Attorney  General  also  placed  reliance  upon  the

license deed dated 02.01.1990 executed in Form AG-3

under Sections 146 (ii) and 164 of the Andaman and

Nicobar  Islands  Land  Revenue  and  Land  Reforms

Regulation,  1966  (hereinafter  referred  to  as  the

“Regulation, 1966”), by way of which licensing rights

were granted to Respondent No.1 in respect of Survey

Nos.  22/3  and  23  measuring  8.86  hectares  for

commercial  purposes,  subject  to  the  general

provisions of the Regulation, 1966 and the Rules made

thereunder. The learned Attorney General submits that

it is a privilege conferred upon Respondent no.1, and

no absolute interest in the land is created by virtue

of the said license. The license period was for an

initial period of 30 years, with the option of a

further renewal for a maximum period of 60 years.

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Further, the said license could be terminated at the

will of the Review Petitioners- Appellants.

5. The  learned  Attorney  General  further  places

strong reliance upon the notifications under Sections

4(1)  and  17(1)  of  the  Land  Acquisition  Act,  1894

(hereinafter referred to as the “L.A. Act”) issued by

the  Union  Territory  of  Andaman  and  Nicobar

Administration  dated  23.07.2002  and  24.07.2002

respectively, to show that the building structures,

trees  and  crops  standing  on  the  suit  land  as

described in the Schedule to the said notifications

are required for the public purpose of development of

port related facilities.

6. The  learned  Attorney  General  further  contends

that the Award No. 5-39/LA/ADM/2002, passed by the

Land Acquisition Collector on 26.09.2002 was infact

contrary  to  the  aforementioned  acquisition

notifications.  The  notifications  classify  the

building structures, trees and crops standing on the

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       R.P. (C) NO.888 OF 2015 IN C.A. 1810 OF 2009 ETC.                               6

land mentioned in the Schedule including Survey Nos.

22/3 and 23 as commercial properties. Further, the

Land Acquisition Collector erred in not noticing the

fact that the acquisition notifications specifically

mention that Respondent No.1 is a licensee and not

the owner of the land, and thus erred in determining

the market value of the land as the same is not

legally permissible in law for the reason that the

land in question belongs to the government, on which

the licensing rights have been granted in respect of

the land in question for the purpose of establishing

timber industry, therefore, no interest upon the said

land has been created in favour of Respondent No.1.

The  learned  Attorney  General  contends  that  the

determination of market value by the Land Acquisition

Collector in respect of the land in question should

not have been done and is a mistake of fact. It is on

the basis of this determination of market value that

the  Writ  Petition  No.  197  of  2004  was  filed  by

Respondent  No.  1  before  the  Calcutta  High  Court,

Circuit Bench at Port Blair, claiming compensation in

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respect of the remaining land which was covered under

the acquisition notifications referred to supra. The

determination of market value of land which belongs

to the government was erroneous on the part of the

Land Acquisition Collector. The acquisition of land

which belongs to the government is impermissible in

law,  as has been held by    this     Court in a

catena of cases, including  The Collector of Bombay

v. Nusserwanji Rattanji Mistri & Ors.1, Special Land

Acquisition v. M.S. Seshagiri Rao & Anr.2 and Meher

Rusi Dalal  v.  Union of India & Ors.3.  The learned

Attorney  General  contends  that  not  bringing  this

particular factual aspect of the matter to the notice

of the High Court and this Court at the time of

examination of the claim made by Respondent No.1 in

the  writ  proceedings  and  the  Civil  Appeal  has

resulted in a serious error in law. Hence, this Court

1

 1955 SCR (1) 1311 2

 1968 SCR (2) 892 3

 (2004) 7 SCC 362

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       R.P. (C) NO.888 OF 2015 IN C.A. 1810 OF 2009 ETC.                               8

can review its impugned judgment passed in the Civil

Appeal.

7. On the other hand, Mr. C.A. Sundaram, learned

senior  counsel  appearing  on  behalf  of  Respondent

No.1,  M/S  Andaman  Timber  Industries  Ltd.  contends

that the impugned judgment does not suffer from any

infirmity, as the same is based upon the acquisition

notifications and the Award of the Land Acquisition

Collector. The acquisition notifications issued under

Sections 4(1) and 17(1) of the L.A. Act, expressly

mention that the total extent of the land along with

the building structures, the trees and crops, if any

standing thereon, described in the schedule is 8.86

hectares. The learned senior counsel contends that

the  aforementioned  notifications  prove  that

Respondent No.1 has an interest in the land which has

been acquired in the instant proceedings. Therefore,

Respondent No.1 is entitled for grant of compensation

in respect of the land, which claim has rightly been

accepted by the High Court and affirmed by this Court

in the impugned judgment.

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8. The learned senior counsel draws our attention

to Section 38 of the Regulation, 1966, which provides

that  all the lands in the Union Territory of the

Andaman and Nicobar Islands are vested absolutely in

the Government and save as provided by or under this

Regulation,  no  person  shall  be  deemed  to  have

acquired any property therein or any right to or over

the same by occupation, prescription or conveyance or

in any other manner whatsoever except by a conveyance

executed  by,  or  under  the  authority  of  the

Government.  Section  141  of  the  Regulation,  1966

classifies tenants into four categories, namely (i)

occupancy  tenants (ii)  non-occupancy tenants  (iii)

grantees and (iv)licensees. Sections 142 to 146 of

the  Regulation,  1966  further  define  all  the  four

categories of tenants. Section 146 of the Regulation

confers  upon  the  Chief  Commissioner  the  power  to

grant licenses. The learned senior counsel contends

that the license granted by the Chief Commissioner in

favour  of  Respondent  No.1  to  establish  timber

industry is a perpetual license, otherwise called as

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the  Lease  and  Conveyance  Deed  as  per  ‘Exh.  P-2’,

dated  02.01.1990  executed  by  the  Review

Petitioners-Appellants in favour of Respondent No.1.

The learned senior counsel further contends that a

careful reading of Section 162 of the Regulation,

1966 makes it abundantly clear that the interest of a

tenant in his holding or any part thereof shall be

extinguished  only  in  the  situations  as  enumerated

under Clauses (a) to (g) of Section 162.  

Clause (d) of the said Section reads as under:  “(d)  when  the  land  comprised  in the  holding  has  been  acquired under any law for the time being in force, relating to acquisition of land.”  

9. The learned senior counsel submits that licensing

rights have been granted in favour of Respondent No.1,

is entitled to use the same for maximum period of 60

years  for  commercial  purpose.  The  learned  senior

counsel further places strong reliance on the various

Forms  prescribed  under  the  Regulation,  1966,  namely

Form AG 1, - for Licence to occupy land for house

site,  Form  AF  for  Deed  of  Grant  of  Land  for

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       R.P. (C) NO.888 OF 2015 IN C.A. 1810 OF 2009 ETC.                               11

Cultivation of Long Lived Crops, Form AG-2 for License

to occupy  Agricultural Land, Form AG-3 for License to

occupy  Land  for  Non-Agricultural  Purpose.  Since  the

said Forms do not prescribe the period of licensing

right after expiry of the period stipulated in the

license  deed  in  the  prescribed  form,  it  clearly

support  the  contention  advanced  on  behalf  of

Respondent No.1 that since the license is perpetual in

nature, Respondent No.1 has acquired an interest upon

the land in question.

10. With reference to the said rival legal contentions

advanced  on  behalf  of  both  the  parties,  we  have

examined the case of the Review Petitioners-Appellants

to assess whether the impugned judgment is required to

be reviewed.

11. Under the Regulation, 1966, the ownership of the

land vests absolutely in the Government, except by a

conveyance executed by the Chief Commissioner. In the

instant  case,  it  is  an  undisputed  fact  that  the

license has been granted under Section 146 (ii) of

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       R.P. (C) NO.888 OF 2015 IN C.A. 1810 OF 2009 ETC.                               12

Regulation, 1966 under Form AG3. The said prescribed

Form does not stipulate the period of licensing right.

In  the  absence  of  stipulation  of  period,  the

contention urged on behalf of Respondent No.1 that it

is a perpetual license in respect of the acquired land

is a tenable contention, particularly having regard to

the classes of tenants defined under Section 141 of

the Regulation, 1966 extracted supra. Respondent No.1

has acquired interest in the land in dispute, in terms

of the notifications under Sections 4(1), 4(2) read

with Section 17(1) of the L.A. Act, wherein the plots

and parcels of land along with building structures,

the trees and crops have been clearly mentioned. Such

an interest could only be extinguished in terms of

Section 162 of the Regulation, 1966. That is to say

that  the  right  of  Respondent  No.1  could  be

extinguished  only  in  terms  of  a  notification  to

acquire  the  land.  That  was  done  by  the  Lieutenant

Governor of Andaman and Nicobar Islands, who issued

notifications to acquire the land, building structures

including the standing trees and crops. The Award has

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       R.P. (C) NO.888 OF 2015 IN C.A. 1810 OF 2009 ETC.                               13

been passed on a part of this land. The Award on the

remaining 6 hectares of land was not passed by the

Land  Acquisition  Collector,  even  though  the  entire

land including the building structures, the trees and

crops had been acquired for the aforesaid purpose of

establishing  industry.  Not  awarding  compensation  as

provided under Section 11 of the L.A. Act amounts to

deliberate omission in discharge of statutory duty by

the Collector, despite the statutory right vesting in

Respondent No.1 for award of compensation in lieu of

losing the holding rights over the land on account of

acquisition of the same by the Government. Therefore,

Respondent  No.1  rightly  approached  the  High  Court

praying that the Writ of Mandamus be issued to the

Review  Petitioners-Appellants  to  pass  an  Award  of

compensation in its favour in respect of the remaining

land.  The  High  Court  granted  the  same  after

consideration of all the relevant facts, documents and

the rival legal contentions urged on behalf of the

parties. The Review Petitioners-Appellants, aggrieved

of the impugned judgment and order granting relief in

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favour of Respondent No.1, challenged the correctness

of the same before this Court in Civil Appeal. This

Court  rightly  dismissed  the  Civil  Appeal,  affirming

the  impugned  judgment  therein  after  considering  the

undisputed fact that the interest upon the land in

question has been acquired by the Lieutenant Governor

of  Andaman  and  Nicobar  Islands  for  the  purpose  of

establishment of industry.

12. The  contention  urged  on  behalf  of  the  Review

Petitioners-Appellants  that  the  Respondent  No.1  did

not acquire interest in the land in respect of which

licensing right given for establishing timber industry

and Section 146 of Regulation, 1966 is a privilege

traceable to Section 52 of the Indian Easement Act,

1882 is misplaced for the reason that Sections 38,

141,  145  and  146  read  with  Section  162  of  the

Regulation,  1966  and  the  prescribed  Forms  for

different  purposes,  clearly  show  that  the  licensees

are  also  tenure  holders  as  per  the  classification

under Section 141 of the Regulation, 1966, as has been

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rightly contended by    Mr. C.A. Sundaram, the learned

senior  counsel  appearing  on  behalf  of  M/S  Andaman

Timber Industries Ltd.

13. The  contention  urged  by  the  learned  Attorney

General that the license is a privilege, granted in

favour  of  Respondent  No.1  to  utilise  the  land  for

construction  of  building  and  establishing  timber

industry is wholly untenable in law for the reason

that  licensee  is  one  of  the  classes  of  tenants  as

specified under Section 161 of the Regulation, 1966.

The  same  is  perpetual  in  nature  and  hence  the

contention  urged  on  behalf  of  the  Review

Petitioners-Appellants  that  since  no  interest  in

favour of Respondent No.1 has been created upon the

land in question vests in the Government is wholly

untenable in law. The learned Attorney General placed

reliance upon the judgment in Saraswati Devi v. Delhi

Development Authority & Ors.4 wherein the four Judge

Bench  judgment  of  this  Court  in  the  case  of

4

(2013) 3 SCC 571

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Nusserwanji Rattanji Mistri (supra) has been adverted

to  and  distinguished,  and  adverted  to

Delhi Administration v. Madan Lal Nangia5 wherein this

Court held that merely because the properties vest in

the Custodian as an evacuee property, it does not mean

that  the  same  cannot  be  acquired  for  some  other

purposes. In the case of Saraswati Devi (supra), this

Court  observed  that  at  the  time  of  acquisition  of

evacuee  property  under  Section  12  of  the  Displaced

Persons (Compensation and Rehabilitation) Act, 1954,

if a private person has an interest in such property,

then  the  interest  of  the  private  person  can  be

acquired under the L.A. Act even though the land is

owned by the Government. 14. In view of the aforesaid statements of law laid

down by this Court in  Saraswati Devi  (supra) after

adverting  to  the  four  Judge  Bench  judgment  in

Nusserwanji Rattanji Mistri case (supra), holding that

even  if  the  land  absolutely  vests  with  the  State,

interest  of  private  individuals  can  certainly  be 5

 (2003) 10 SCC 321

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created on the same by executing conveyance in their

favour.  The  said  interest  of  the  Respondent  No.1

has rightly been recognised by the Collector of Land

Acquisition  after  issuing  notifications  which  is

traceable to Section 3(b) of the L.A. Act which states

as hereunder :- “3(b).  The  expression  “person interested”  includes  all  persons claiming an interest in compensation to  be  made  on  account  of  the acquisition of land under this Act; and a person shall be deemed to be interested  in  land  if  he  is interested in an easement affecting the land.”

15. Further, the learned Attorney General in support

of his submissions places reliance upon the Division

Bench judgment of the Mysore High Court in the case of

M.S. Seshagiri Rao & Anr v. Special Land Acquisition &

Rehabilitation Officer, Sagar6, which judgment has been

affirmed by this Court in the case of  Special Land

Acquisition & Rehabilitation Officer, Sagar  v.  M.S.

Seshagiri Rao & Anr.7, wherein it was held as under :  

6

 AIR 1965 Mysore 222 7

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“3. The Government of Mysore did not purport to exercise the power reserved by the terms of the grant, and adopted the procedure prescribed by the Land Acquisition  Act.  The  High  Court observed, relying upon the decision of the House of Lords in Attorney-General v.  De  Kayser's  Royal  Hotel  Ltd.(1) that the Government could not, after adopting  the  procedure  prescribed  by the  Land  Acquisition  Act,  seek  to resort to the conditions of the grant and  claim  that  no  compensation  for acquisition of the land was payable. It  is  true  that  after  obtaining possession of the land in pursuance of statutory  authority  under  Section 17, the Government of Mysore could not seek to exercise the option conferred by the terms of the grant. But on that account  in  assessing  compensation payable to the grantees, existence of the  condition  which  severely restricted  their  right  could  not  be ignored. The grantees were entitled to compensation  for  the,  land  of  which the ownership was vested in them. The measure  of  that  compensation  is  the market value of the land at the date of the notification, and the measure of that market value is what a willing purchaser  may  at  the  date  of  the notification  under  S.4 pay for  the right  to  the  land  subject  to  the option vested in the Government.

4. The High Court also placed reliance upon the judgment of the Madras High Court in The State of Madras v. A.Y.S. Parisutha Nadar. In that case the main

 AIR 1968 SC 1045

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question  decided  was  whether  it  was open to a claimant to compensation for land under acquisition to assert title to the land notified for acquisition as against the State Government when the  land  had  become  vested  in  the Government  by  the  operation  of  the Madras  Estates  (Abolition  and Conversion  into  Ryotwari)  Act  26  of 1948. On behalf of the State it was contended that once an estate is taken over by the State in exercise of its powers  under  the  Estates  Abolition Act, the entire land in the estate so taken  over  vested  in  the  State  'in absolute ownership, and that no other claim of ownership in respect of any parcel of the land in the estate could be put forward by any other person as against  the  State  Government  without obtaining a ryotwari patta under the machinery of the Act. The High Court rejected  that  contention  observing that the Government availing itself of the  machinery  under  the  Land Acquisition  Act for  compulsory acquisition  and  treating  the subject-matter  of  the  acquisition  as not belonging to itself but to others, is  under  an  obligation  to  pay compensation as provided in the Act, and  that  the  Government  was incompetent  in  the  proceeding  under the  Land  Acquisition.  Act  to  put forward its own title to the property sought to be acquired so as to defeat the rights of persons entitled to the compensation.  The  propositions  so broadly stated are, in our judgment, not  accurate.  The  Act contemplates acquisition  of  land  for  a  public

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purpose.  By  acquisition  of  land  is intended the purchase of such interest outstanding  in  others  as  clog  the right  of  the  Government  to  use  the land for the public purpose. Where the land is owned by a single person, the entire  market  value  payable  for deprivation  of  the  ownership  is payable  to  that  person:  if  the interest  is  divided,  for  instance, where it belongs to several persons, or  where  there  is  a  mortgage  or  a lease outstanding on the land, or the land  belongs  to  one  and  a  house thereon  to  another,  or  limited interests in the land are vested in different  persons,  apportionment  of the compensation is contemplated. The Act is, it is true, silent as to the acquisition  of  partial  interests  in the land, but it cannot be inferred therefrom  that  interest  in  land restricted because of the existence of rights of the State in the land cannot be acquired. When land is notified for acquisition for a public purpose and the  State  has  no  interest  therein, market  value  of  the  land  must  be determined  and  apportioned  among  the persons  entitled  to  the  land.  Where the interest of the owner is clogged by  the  right  of  the  State,  the compensation  payable  is  only  the market value of that interest, subject to the clog.

5.  We  are  unable  to  agree  with  the High Court of Madras that when land is notified for acquisition, and in the land the State has an interest, or the ownership of the land is subject to a

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restrictive covenant in favour of the State,  the  State  is  estopped  from setting up its interest or right in the  proceedings  for  acquisition.  The State in a proceeding for acquisition does not acquire its own interest in the land, and the Collector offers and the Civil Court assesses compensation for acquisition of the interest of the private  persons  which  gets extinguished by compulsory acquisition and  pays  compensation  equivalent  to the  market  value  of  that  interest. There  is  nothing  in  the  Act  which prevents  the  State  from  claiming  in the proceeding for acquisition of land notified  for  acquisition  that  the interest proposed to be acquired is a restrictive interest.”  

16. The aforesaid judgments have no application to the

fact situation and the reliance placed upon the same

by the learned Attorney General is misplaced. For the

reasons  stated  supra,  no  case  is  made  out  in  this

Review Petition for review of the impugned judgment

passed in Civil Appeal No. 1810 of 2009 by this Court

as the same does not suffer from any error of law

which requires interference by this Court. Hence, the

review  petition  must  fail  and  is  accordingly

dismissed.

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Review Petition (C) No. 890 of 2015 in I.A. No. 7 of 2014 in C.A. No. 1810 of 2009

17. In view of dismissal of Review Petition (C) No.

888 of 2015, this review petition is disposed of.

Review Petition (C)……D. No. 1093 of 2015 in I.A. No. 7 of 2014 in C.A. No. 1810 of 2009

18. Permission to file Review Petition is granted.  

19. We have heard Mr. Ashok K. Parija, the learned

senior counsel appearing on behalf of the ATI Union

Non Political Labour Union, who adopts the submissions

advanced  by  Mr.  C.A.  Sundaram,  the  learned  senior

counsel  appearing  on  behalf  of  M/s  Andaman  Timber

Industries Ltd. in Review Petition (C) No.888 of 2009.

Mr.  Ashok  K.  Parija  further  submits  that  the

respondent  Company  be  directed  that  the  amount  of

compensation which will be received by it must be paid

to the workmen towards the arrears of their wages and

Page 23

       R.P. (C) NO.888 OF 2015 IN C.A. 1810 OF 2009 ETC.                               23

terminal benefits etc., as the same amounts to first

charge on the property acquired under Section 549A of

the Companies Act, 1956. Accordingly, his submissions

are taken on record and it is open for the ATI Union

to work-out the workmen’s right to get the arrears

including  terminal  benefits  out  of  the  compensation

amount that will be determined by the Collector in

respect of the acquired property. The Review Petition

is accordingly disposed of.     All pending applications in the Review Petitions

are disposed of.

…………………………………………………J. [V. GOPALA GOWDA]      

…………………………………………………J.      [C. NAGAPPAN]

New Delhi, February 22,2016