Tehri Hydro Development Corporation v. Abdul Gaffar & Ors.

situation, this Court in Gyan Devi held: ‘In other words the right conferred under Section 50(2) of the LA Act Carries with it the right to be given adequate notice by the Collector as well as the Reference Court before whom the acquisition proceedings are pending of the date on which the matter of determination of the amount of compensation will be taken up. Service of such a notice, being necessary for effectuating the right conferred on the local authority under Section 50(2) of the LA Act, can, therefore, be regarded as an integral par of the said right and the failure to give such a notice would result in denial of the said right unless it can be shown that the local authority had knowledge about the pendency of acquisition proceedings before the Collector or the Reference Court and has not suffered any prejudice on account of failure to give such notice.’

It is not correct to contend that by reason of non-service of notice the respondent was not prejudiced. The exception carried out by this Court in the matter of service of notice to the local authority is not only confined to its knowledge about the pendency of the acquisition proceedings before the Collector or the Reference Court but also any prejudice on account thereof. The said two conditions are to be read conjunctively and not disjunctively.

The respondent filed a writ petition because it was seriously prejudiced. This Court in Gyan Devi envisaged the following legal situations: (1) No notice was given to the local authority under sub-section (2) of Section 50 of the LA Act and as a result the local authority could not appear before the Collector to adduce evidence; (ii) Notice was served on the local authority and in response to said notice the local authority papered before the Collector; and (iii) Notice was served on the local authority but in spite of service of such notice the local authority failed to appear and adduce evidence before the Collector:

The Court laid down the criteria where the local authority would be a necessary party of proper party. It was observed: ‘Since the amount of compensation is to be paid by the local authority and it has an interest in the determination of the said amount, which has been given recognition in Section 50(2) of the LA Act, the local authority would be a person aggrieved who can invoke the jurisdiction of the High Court under Article 226 of the Constitution to assail the award in spite of the proviso precluding the local authority from seeking a reference. Such a challenge will, however, be limited to the grounds on which judicial review is permissible under Article 226 of the Constitution. In a case where the local authority has failed to appear in spite of service of notice the local authority can have no cause for grievance. Even in such a case it may be permissible for the local authority to invoke the jurisdiction of the High Court under Article 226 of the Constitution to assail the award if it is vitiated by mala fides or is perverse.’

It was further held that presence of the local authority is necessary for a just decision on the question involved in the proceedings before the Reference Court as that would enable it to adduce evidence therein and as such it was entitled to be impleaded as a party.