1980 (4) TMI 315 - HC - Companies Law

Summary

Issues Involved:
1. Rate of interest on compensation under the Land Acquisition Act for lands acquired for the Central Government in 1963.
2. Applicability of the Land Acquisition (Madras Amendment) Act, 1953.
3. Interpretation of administrative instructions versus statutory provisions.
4. Estoppel against the government.
5. Grounds for review under Order 47, Rule 1, Civil Procedure Code.
6. Discrimination and violation of Article 14 of the Constitution.

Detailed Analysis:

1. Rate of Interest on Compensation:
The primary issue in this case was the rate of interest to be awarded on the compensation amount for lands acquired for the Central Government in 1963. The petitioners argued that the interest should be 6% per annum as per paragraph 21 of Schedule IV of Part III of the Land Acquisition Manual, which was applicable before its amendment in 1966. The court initially awarded 4% per annum, which was confirmed in the appeal sought to be reviewed.

2. Applicability of the Land Acquisition (Madras Amendment) Act, 1953:
The petitioners contended that the Madras Amendment Act, 1953, which reduced the interest rate from 6% to 4%, applied only to lands acquired for the State Government and not for the Central Government. This was supported by the Board's proceedings and Government Memos issued in 1953. The counter-argument was that the Amendment Act did not distinguish between lands acquired for the State or Central Government, and subsequent government orders clarified that the 4% rate applied to all acquisitions.

3. Interpretation of Administrative Instructions vs. Statutory Provisions:
The court noted that administrative instructions, such as those in the Land Acquisition Manual, do not confer legal rights and cannot override statutory provisions. The Supreme Court's decisions in similar cases reinforced that administrative instructions are only for guidance and cannot be used to interpret statutes. Therefore, the 1953 Amendment Act's provision of 4% interest was upheld, regardless of the administrative instructions suggesting otherwise.

4. Estoppel Against the Government:
The petitioners argued that the government was estopped from questioning paragraph 21 of the Board's Standing Order 90 because it had been acted upon until its amendment in 1966. The court rejected this contention, stating that there cannot be any estoppel against a statute, and the statutory provision of 4% interest must prevail.

5. Grounds for Review Under Order 47, Rule 1, Civil Procedure Code:
The petitioners sought review on the grounds that their counsel had made an honest mistake by not bringing paragraph 21 of the Board's Standing Order 90 to the court's notice during the original appeal. The court acknowledged that a mistake by counsel could be a sufficient ground for review if it leads to an error apparent on the face of the record. The court cited precedents where similar mistakes had warranted a review.

6. Discrimination and Violation of Article 14:
The petitioners argued that the Madras Amendment Act, 1953, was discriminatory and violated Article 14 of the Constitution because it resulted in different interest rates for land acquired for the Central Government in different states. The court agreed, stating that the Amendment Act was discriminatory as it did not provide an intelligible differentia or a rational nexus with the object sought to be achieved. Consequently, the court held the Amendment Act void as it was violative of Article 14.

Conclusion:
The review petitions were allowed, and the court ruled that the interest rate on compensation for lands acquired for the Central Government should be 6% per annum, as per the pre-1966 provisions. The court also certified that the case involved a substantial question of law of general importance, granting leave to appeal to the Supreme Court. An interim suspension of the review judgment was granted for four weeks, conditional upon the government depositing the enhanced interest amount.