Full Judgment Text
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PETITIONER:
TULSI CO-OPERATIVE HOUSING SOCIETY, HYDERABAD. ETC. ETC.
Vs.
RESPONDENT:
STATE OF ANDHRA PRADESH & ORS.
DATE OF JUDGMENT: 14/09/1999
BENCH:
K.T.Thomas, M.Srinivasan
JUDGMENT:
SRINIVASAN, J.
There are three sets of appeals. Civil Appeal Nos.
6986-87 of 1994 are filed by Tulsi Co-operative Housing
Society, Hyderabad (hereinafter referred to as the
‘Society’). Civil Appeal Nos. 6988-6991 of 1994 are by the
State of Andhra Pradesh (hereinafter referred to as the
‘Government’). Civil Appeal Nos. 6992-6993 of 1994 are by
Syed Azam (hereinafter referred to as the ‘landowner’). 2.
The Society entered into an agreement in April 1975 with the
land owner for purchase of an extent of 24 acres of land and
paid in advance a sum of Rs.20,000/-. In June 1975, the
Govt. issued a Notification under Section 4 (1) of the Land
Acquisition Act (hereinafter referred to as ‘Acquisition
Act’) for acquiring an extent of 18.03 acres out of the
subject-matter of these proceedings for purposes of Housing
Project under HUDCO Scheme. The Notification included an
extent of 2 acres belonging to another person with which we
are not concerned. The Government also invoked urgency
clause under Section 17 (4) of the Acquisition Act and
dispensed with enquiry under Section 5A of the said Act.
The acquisition proceedings were at the instance of
Municipal Corporation of Hyderabad. The Urband Land
(Ceiling & Regulations) Act, 1976 (hereinafter referred to
as the ‘Ceiling Act’) came into force on 17.2.1976. The
land owner and the Society filed an application in May 1976
for grant of exemption from the provisions of the Ceiling
Act under Section 20(1)(b) of the said Act. It was followed
by a similar application in June 1977. In April 1978 the
Government issued a Notification under Section 6 of the
Acquisition Act. In October 1978 the applications for
exemption filed under the Ceiling Act were rejected.
Towards the end of August 1979 further proceedings under
Section 9 of the Acquisition Act were taken by the
Government. Meanwhile, a fresh application for exemption
under the Ceiling Act was filed in December 1978. That was
partly granted by the Government to the extent of 14000 sq.
mtrs. of land. Another application was filed in May 1980
for grant of exemption of all the lands from the provisions
of the Ceiling Act. That was granted in September 1980 in
GOMS No. 4093. 3. The Notifications under the Acquisition
Act were challenged in two writ petitions - one by the
Society and the other by the land owner. By interim orders
passed by the High Court, further proceedings were stayed.
However, on 28.1.1982 both the writ petitions were
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dismissed. Two appeals were filed. The miscellaneous
petition for stay of further proceedings in acquisition
pending the appeals was dismissed by Division Bench on
4.2.82. The Government took possession of the lands on
12.2.1982. 4. It should be mentioned here that the
proceedings under the Acquisition Act were for the benefit
of Bagh Amverpet Welfare Society (hereinafter to be referred
to as ‘BAW Society’). The said BAW Society got impleaded as
party in the writ petitions in which the acquisition
proceedings were challenged. The writ appeals were referred
to a Full Bench which allowed the same by judgment dated
2.8.83. The acquisition proceedings were quashed.
Aggrieved by the said judgment BAW Society obtained Special
Leave and filed Civil Appeal Nos. 5784-85 of 1983. 5. In
June, 1983 the Government cancelled the exemption granted
under the Ceiling Act by GOMS No. 5964. The landowner and
the Society filed writ petitions 5498 and 6500 of 1983. 6.
The Civil Appeals filed by BAW Society came up for hearing
on 7.8.85 and the following order was passed:
"Mr. P.P. Rao commenced his arguments at 12.45 P.M.
and argued till 1.00 P.M. Thereafter Court asked Mr. Divan
to raise preliminary objections and Shri Divan argued from
2.00 P.M. to 2.25 P.M. Thereafter Mr. P.P. Rao resumed
his arguments.
After hearing him for a shortwhile the Court adjourned
the matter to 16.8.85 in order to enable the parties to
explore the possibility of a settlement on the basis that a
part of the land sought to be acquired is released from
acquisition and members of Bagh Amverpet Society may be able
to build on a part of the land and owners may also keep some
part of the land. We would request the concerned officer of
the Municipal Corporation of Hyderabd to take initiative in
this matter for bringing the parties at the negotiating
table and help them so that on the above basis or on any
other basis which may be acceptable to the parties so that
settlement may be arrived at".
7. When the matters came up again on August 23, 1988
this court passed an order holding that the Acquisition
proceedings were valid and the Writ Petitions filed by the
landowner and the society challenging the same were rightly
dismissed by the Civil Judge. This court held that the
appellate judgment of the Full Bench of the High Court could
not be sustained and the Acquisition proceedings had to be
revived. In the same order, the court referred to the
suggestions made on the earlier ocassion on 7.8.1985 for
effecting a settlement between the parties and set out the
subsequent events in the following words:-
"Pursuant to the view expressed by the court, the two
societies have filed terms of settlement, which are on
record. The State Government of Andhra Pradesh which also
has filed independent appeals against the same appellate
judgment of the High Court has agreed to accept the terms of
settlement and their counsel states that fact to us in
Court. While other terms are acceptable, one of the terms
regarding the valuation of the land to be determined by
Government requires alteration. Learned counsel for the
appellant too has agreed to offer at the rate of Rs.3 lacs
per acre and that term is acceptable to the writ petitioners
respondents as also the landowner. In view of the fact the
parties have agreed to the said amount of Rs.3 lacs per acre
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as the value of the land, under acquisition, the terms in
the settlement for fixation of the compensation shall be
substituted by the offer made by Mr. Iyer for the
appellant. All parties agree to these terms being altered
by us. Mr. Iyer has further agreed that the entire amount
of compensation for 9 acres and 1-1/2 gunthas, which under
the terms of settlement would be available to the appellants
shall be paid at the rate of Rs.3 lacs per acre (all
liabilities included) within three months hence. Failing
payment of this amount within the time undertaken, interest
at 15% payable on the amount shall be payable. This order
shall not be effective until counsel for the State of Andhra
Pradesh takes instructions and files a memorandum within a
week from today that Government including the Urban Ceiling
authorities accept this arrangement. After the State
indicates its ratification, the matter shall be placed for
further directions on 31st August, 1988 in the Chamber for
further directions".
8. The matter was posted on 31.8.1988 and the Court
passed the following order:-
"When we made the order on 23rd August, 1988, the
letter of Secretary, Housing, Municipal Administration &
Urban Development Deptt. Govt of Andhra Pradesh dated
15.2.88 was not placed before us. We find, that letter
specifically refers to the proceedings before this Court and
the terms of compromise and indicate Government’s reaction
and response thereto. Counsel for the parties suggest that
we should modify our direction of August 23, 1988, taking
the compromise terms on record and proceed to dispose of the
dispute. Mr. TVSN Chari who has just appeared on behalf of
Govt. of Andhra Pradesh says that he may be given one
week’s time to obtain instructions from the Govt. In these
circumstances, we adjourn the appeals to 13th September,
1988 to be taken up in Chamber at 1.30 p.m. ".
9. In the meanwhile, the Writ Petition filed by the
land owner challenging the cancellation of exemption granted
under the Ceiling Act was dismissed by the High Court on
30.6.1988. He filed S.L.P.(C) No. 1679 of 1989 in this
Court. The other Writ Petition filed by the Society namely
Writ Petition (C) No. 6500 of 1983 was withdrawn to this
Court to be heard along with Civil Appeal Nos. 5784-85 of
1983 and S.L.P(C) No. 1679 of 1989. That was taken on file
as Transfer Case No. 29 of 1989. All the matters were
heard together and the final order was passed on 17.8.1990
after setting out the facts and extracting the relevant
portions of the earlier order dated 7.8.1985, the court
said:
"This Court, however, gave time to the counsel for the
State of Andhra Pradesh to take instructions as to the
application of the Urban Land Ceiling Act as exemption
granted under Section 20 had been withdrawn in June, 1983.
The State of Andhra Pradesh thereafter did not accept the
compromise by taking the stand that proceedings under the
Urban Land Ceiling Act were pending and in view of the fact
that there was no exemption, the property was liable to vest
in Government under the Act as surplus land".
Again after extracting a portion of the Order dated
23.8.1988 the Court said thus:
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"This order virtually disposed of the appeals but as
the parties were negotiating a settlement the Court did not
record a formal disposal of the disputes. If the settlement
does not fructify, the effect of our decision that the
acquisition proceedings are to revive, would be that the
claim to the land by Tulsi Cooperative Housing Society would
come to an end. In that event, at the most that Society
would only be entitled to such compensation as may be
awardable in law. If the acquisition proceeds the Bagh
Amverpet Welfare Soceity and the Municipal Corporation would
have to work out their mutual rights. Apart from these, the
two writ petitions challenging the withdrawal of the
exemption by order dated 23.6.1983 would also have to be
disposed of on the merits. The owner’s application has been
dismissed upon the High Court taking the view that the
matter was before this Court and, therefore, the High Court
would not entertain the dispute. The challenge by Tulsi
Cooperative Housing Society against the said withdrawal was
before the High Court for adjudication. In view of the fact
that the owner’s writ petition was dismissed not on merits
but on other considerations, we are of the view that the
said dismissal should be vacated and that writ petition
should be heard along with Writ Petition No. 6500/83 as a
common question arises for determination. We, therefore,
set aside the order of the High Court dated 13th of June,
1988, and direct that the said writ petition shall be
disposed of afresh on merits.
We are of the view that the entire litigation should
go back to the High Court for appropriate disposal. The
transferred writ petition, therefore, shall also go back to
the High Court and shall be dealt with as Writ Petition No.
6500 of 1983. The two petitions challenging the withdrawal
of exemption shall be clubbed together and be heard. The
proposals undertaken relating to a settlement in regard to
the 18 acres and 3 gunthas of land may be considered by the
High Court in the light of all relevant material and
circumstances. If the High Court is of the opinion that the
matter should be settled and the entire land of the owners
amounting to 18 acres and 3 gunthas should be divided
between the two Societies, it will be free to do so if
Government also agrees thereto. Since that arrangement
would be with the consent of the State Government it would
in such an event be open to the High Court to nullify the
acquisition. The observations which we have made at
different stages during the pendency of the proceedings in
this Court may not be taken to be expression of opinion on
the merits and the High Court would be free to deal with the
matter in its own discretion and in accordance with law.
In the event of the settlement not coming through the
acquisition proceedings would continue under the law and be
concluded by the Land Acquisition Officer in accordance with
law. In the event of the acquisition working out, the two
writ petitions against the withdrawal of exemption would not
be sustainable as the land would vest in Government as a
result of acquisition. It would be open to the Government
of the acquiring authority to take into account the effect
of the laws of urban ceiling.
The civil appeals are remitted to the High Court
limited to the consideration of the proposals for settlement
in the light of the observations hereinabove. Otherwise,
they must be taken to have been concluded in this Court on
our finding that acquisition proceedings are valid and shall
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be entitled to continue. The special leave petition of Azam
is disposed of with a direction that the writ petition in
the High Court shall be re-heard. The transferred writ
petition is remitted to the High Court to be disposed of as
Writ Petition No.6500 of 1983. The hearing of the writ
petition would depend upon the fate of the settlement as
indicated above".
10. After remand, the High Court by its judgment
dated 21.11.1992 dismissed the two Writ Appeals under the
Acquisition Act and disposed of the two writ peti- tions
under the Ceiling Act with the following directions: "1)
The Land Acquisition proceedings covered by the Sec. 4(1)
notification issued in G.O.Rt. No. 68 dated 4.6.75 in
respect of Ac.18-03 gunthas of land shall revive and be
completed as expeditiously as possible preferably within
three months from today, the beneficiaries being the 374
members of the Bagh Amverpet Welfare Association who have
already remitted a total sum of Rs.40,20,649.04.
2) The compensation amount the land owners are
entitled to shall be limited only to Rs.25,49,131.75 and
nothing more.
3) M/s. Tulsi Co-operative Housing Society is at
liberty to work out its rights vis-a-vis the land owners.
4) The applications filed under Sec.20 of the
U.L.C.Act seeking exemptions from the operation of the Act
and now pending with the Government since 1976 shall be
disposed of as indicated supra". 11. Aggrieved by the said
judgment, the Society has filed Civil Appeal Nos. 6986-87
of 1994. The Government has filed Civil Appeal Nos.
6988-91 of 1994 while the Land Owner has filed Civil Appeal
NOs. 6992-93 of 1994. All the above appeals were heard
together. 12. Mr. D.D.Thakur, the learned senior counsel
for the Society contended that the High Court has failed to
decide the crucial question arising in this case, though
this Court remanded the matter for that purpose. According
to him the facts and circumstances of the case proved a
complete concluded tripartite compromise among the Society,
the Government and BAW Society. He took us through some of
the documents which came into existence after this Court
passed the Order dated 7.8.85 and adjourned the matter for
effecting a settlement. He also relied upon the memo of
compromise and the petition filed in this Court by BAW
Society for granting sanction to the compromise arrived at
between the parties. It was contended that the records
established that the Government had also agreed to the said
compromise whereby the lands which were the subject-matter
of the acquisition were to be divided into two halves, one
to be taken by the Society and the other by the BAW Society.
He argued that even if this Court holds that there was no
express agreement on the part of the Government, the same
could be inferred from the available records. Hence it
should be held that there was a concluded compromise to
which the Government was a party by implication. Learned
counsel also invoked the doctrine of legitimate expectation
and contended that the same should be applied in the present
case and the Court should not allow the Government to go
back upon the concluded agreement. 13. We are uenable to
accept any of the aforesaid contentions. The Order passed
by this Court on 17.8.90 is itself sufficient to negative
the above arguments. In fact, the said order precludes the
Society from contending that there was a concluded
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compromise. If there was such a compromise it ought to have
been pressed into service before this Court and if the same
had been accepted, there would have been no necessity for a
remand. On the other hand, the following observation in the
Order of this Court shows clearly that there was no
concluded compromise and this Court proceeded only on that
footing: "If the High Court is of the opinion that the
matter should be settled and the entire land of owners
amounting to 18 acres and 3 gunthas should be divided
between the two societies, it will be free to do so if
Government also agrees thereto". The next sentence in the
order of this Court reads as follows:- "Since that
arrangement would be with the consent of the State
Government it would in such an event be open to the High
Court to nullify the acquisition". 14. The above two
observations show that if a compromise was to be effected it
was only to be brought into existence after the said order
of this Court and only if the Government consented thereto.
Admittedly, the Government did not express any consent after
the said order of this Court and on the other hand,
vehemently opposed the proposed settlement between the
parties. The contention that there was a concluded
compromise to which the Government was party is untenable in
view of the aforesaid observations in the order of remand
made by this Court on 17.8.90. We have no hesitation at all
to hold that the view expressed by the High Court in this
regard is correct and there was no necessity for the High
Court to decide to the question whether there was a complete
concluded compromise. 15. In view of the said position we
consider it unnecessary to deal with the contention of
learned counsel based on the provisions of Order 23 Rule 3
C.P.C. and Rule 24 of the Andhra Pradesh High Court Rules.
Nor is it necessary to refer to Section 13 of the Contract
Act relied on by the learned counsel. There is also no
warrant in this case to invoke the doctrine of legitimate
expectation. 16. The learned counsel for the Society
contended that in any event the sale in favour of the
Society of an extent of 5 acres of land comprising lands
other than the subject- matter of the acquisition
proceedings was valid and should be upheld. That question
is wholly extraneous to the present proceedings and does not
arise for our consideration. In these proceedings we are
concerned only with the validity of the acquisition
proceedings and the validity of the order of the Government
cancelling the exemption granted under the provisions of the
Ceiling Act. 17. Learned counsel contended that the
cancellation of exemption under the Ceiling Act was
unsustainable and at any rate it was bad with reference to
the extent of 5 acres of land which did not form part of the
subject-matter of acquisition under the Acquisition Act.
There is no merit in this contention. The High Court has
considered in detail the question whether the cancellation
of exemption under the Ceiling Act was valid or not. The
High Court has found that there was ample justification for
cancellation of the exemption. It has been found that the
land-owner as well as the Society had violated the
conditions subject to which exemption was granted. As the
High Court has dealt with the matter at length and upheld
the cancellation of exemption, it is unnecessary for us to
repeat the reasoning of the High Court. We do not find any
justification whatsoever to interfere with the conclusion of
the High Court that the cancellation of exemption was valid
and that the writ petitions filed by the land-owner and the
Society were liable to be dismissed. 18. The next
contention of learned counsel for the Society was that the
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land acquired under the Acquisition Act should be
distributed equitably not merely among the members of BAW
Society but also among the members of the appellant Society.
He took exception to the direction contained in the judgment
of the High Court that the beneficiaries of the proceedings
were 374 members of the BAW Society who had already remitted
a total amount of Rs.40,20,649.04. This particular
contention urged by the learned counsel is also supported by
learned counsel for the State Government which has filed
Civil Appeal Nos.6988-91/94. In fact, learned Senior
Counsel Mr. P.A. Chaudhary appearing for the Government
raised a contention that the lands acquired should be
utilised for public purposes other than those for which the
lands were acquired. He argued that the lands should be
kept as water tank and be utilised as such. 19. While we
find justification in the contention put forward by the
learned counsel for the Society that the High Court has
exceeded its jurisdiction in giving a direction confining
the benefit of the acquisition proceedings to the 374
members of the BAW Society, we are unable to accept the
extreme contention urged by the learned senior advocate for
the Government that the land should be permitted to be
utilised for purposes other than those for which it was
acquired. Once we uphold the validity of the proceedings
for acquisition under the Acquisition Act, it has to follow
that the lands have to be utilised for the purposes for
which they were acquired. We would set aside Direction No.1
contained in the penultimate para of the judgment of the
High Court and substitute it with a direction that the lands
acquired under the Acquisition Act should be properly
utilised by the Government in order to achieve the purpose
for which they were acquired. The Government may nominate a
suitable Committee comprising at least three Secretaries to
the Government for the purpose of carrying out the objects
of the acquisition in an appropriate manner.
20. Mr. Gopal Subramaniam, learned senior counsel
for the land owner addressed his arguments against Direction
No.2 given by the High Court in the impugned judgment. By
the said direction the High Court has held that the
compensation amount to which the land owner is entitled
shall be limited only to Rs.25,49,131.75 and nothing more.
Learned counsel submitted that the validity of the
acquisition proceedings having been upheld, the Court has no
jurisdiction to fix the compensation ignoring the specific
procedure prescribed in the Acquisition Act. It was also
his contention that the High Court arrived at the figure
arbitrarily on a wrong premise that there were some special
equities in favour of the members of the BAW Society and the
price of the land should be fixed at Rs.25 per sq. yd. It
was pointed out by him that there was no material before the
High Court for fixing the market value of the land on the
date of the notification under Section 4(1) of the
Acquisition Act and in any event, the parties had no
opportunity to place the relevant evidence before the Court
to enable it to fix the market value. 21. In our view, the
contention is well founded and unanswerable. Once the
proceedings under the Acquisition Act have been held to be
valid, the prescribed procedure in the Act for fixing the
compensation payable to the land owner should have been
followed and the High Court could not usurp the functions of
the hierarchy of authorities constituted under the Act. The
two reasons given by the High Court for taking up the task
of fixing the compensation upon itself are that the
litigation should not be allowed to drag on any further and
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that there are special equities in favour of the members of
the BAW Society. Neither reason is sustainable. The fact
that the proceedings have been pending for long would not
justify the Court to exceed its jurisdiction. The question
whether there are special equities in favour of the members
of the BAW Society and whether such equities would be
relevant at the time of fixing the market value of the land
under the provisions of the Acquisition Act are matters to
be decided by the concerned authorities in accordance with
the procedure prescribed in the Act. Hence the conclusion
of the High Court fixing the compensation for the land at
Rs.25,49,131.75 and the direction that the land owners are
not entitled to anything more has to be upset. 22. Learned
counsel also pointed out the facts and circumstances in the
case which speak against the contentions urged by Mr. D.D.
Thakur. It is unnecessary for us to refer to them as we
have already dealt with the said contentions and found that
they are not sustainable. 23. Mr. Gopal Subramaniam next
contended that the High Court is wrong in holding that the
Government can proceed under the provisions of the Ceiling
Act as the latter are over-riding and will have effect
notwithstanding any other provision of law. According to
him once the land had vested in the Government under the
provisions of the Acquisition Act, before vesting under the
Ceiling Act could take place, there is no question of
withdrawing the proceedings under the Acquisition Act and
proceeding further under the provisions of the Ceiling Act.
It was contended that the High Court has mis-understood the
ruling of this Court in Dattatraya Shankarbhat Ambalgi and
others versus State of Maharashtra and others AIR 1989
Supreme Court 1796 and pointed out that in the said case,
the land had vested in the Government under the Ceiling Act
pursuant to the final statement under Section 9 of the said
Act. It was submitted that in the present case such stage
under the Ceiling Act had not reached. There is
considerable force in this contention of the learned
counsel. But it is unnecessary for us to pronounce on the
said contention in view of the categoric statement made by
the learned senior advocate for the Government that he has
obtained written instructions from the Government that the
compensation in the present case would be paid under the
provisions of the Acquistion Act and the provisions of the
Ceiling Act would not be invoked therefor. 24. As a matter
of fact, the judgment of the High Court appears to be
somewhat inconsistent in this respect. The High Court has
upheld the cancellation of exemption under the Ceiling Act
and dismissed the writ petitions filed by the land-owner and
the Society. The High Court has also upheld the validity of
the land acquisition proceedings and has gone to the extent
of holding that the beneficiaries of the acquisition were
374 members of the BAW Society. The High Court has further
held that the compensation amount paybale to the land owners
shall be limited to Rs.25,49,131.75. In that situation,
there was no necessity for the High Court to express its
opinion that the provisions of the Ceiling Act were not
excluded by the acquisition proceedings and that they were
over-riding. The conclusion of the High Court on that
question is wholly unnecessary for the prupose of this case
and we set aside the same. We make it clear that we do not
express any opinion on the question of law in the present
case in view of the statement made by the learned senior
advocate for the Government and recorded as above. 25. The
High Court has chosen to issue a direction which is
Direction No.4 that the applications filed under Section 20
of the Ceiling Act seeking exemption from the operation of
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the Act and pending with the Government since 1976 shall be
disposed of as indicated in the judgment. We do not
understand how such a direction could be issued in the
present case which is between the concerned parties. The
direction relates obviously to parties who were not before
the Court in the present case. It is for the Government to
consider applications for exemption and dispose of the same
in accordance with law. 26. We have already adverted to
the contention put forward by learned senior counsel for the
Government in C.A. Nos.6988-91/94 and said that it was not
possible to accept the extreme contention. Learned counsel
for the BAW Society urged that the procedings for
acquisition were exclusively for the benefit of the members
of the said society and they had deposited the price of the
land as demanded by the Municipal Corporation several years
back. It was argued that the lands could not be given to
any person other than the members of the said Society. Even
in the order passed by this Court on 17.8.1990 remanding the
matter to the High Court, it was made clear that if the
acquisition proceeded, the BAW Society and the Municipal
Corporation would work out their mutual rights. Hence, it
is unnecesary for us to express any opinion on the claim
made by the BAW Society. As observed already by us the
Government shall take appropriate proceedings by appointing
a suitable Committee to utilise the lands acquired
appropriately for the purposes for which they were acquired.
27. In the result, the Civil Appeals are disposed of
with the following directions: (I) The directions contained
in the judgment of the High Court are set aside;
(II) The land acquisition proceedings covered by the
Notification under Section 4(1) of the Acquisition Act
issued in G.O.Rt. No.68 dated 4.6.75 in respect of 18 acres
03 guntas of land stand revived and shall be completed as
expeditiously as possible within a period of three months
from today; (III) The concerned authorities constituted
under Acquisition Act shall decide the compensation payable
to the land owner in accordance with the provisions of the
Act.; (IV) The Government shall nominate a Committee
comprising at least three Secretaries to the Government for
distributing the acquired land equitably among deserving
persons in order to carry out the purposes of the
acquisition and to balance the equities between various
persons whether they belong to one or the other society or
are not members of either society.; (V) M/s. Tulsi
Cooperative Housing Society is at liberty to work out its
rights as against the land owner in appropriate proceedings;
(VI) Applications under Section 20 of the Ceiling Act
seeking exemption from the operation of the Act said to be
pending with the Government since 1976 shall be disposed of
in accordance with law as expeditiously as possible and
preferably within a period of three months from today.