LI Network
Published on: 27 August 2023 at 12:00 IST
The Supreme Court has recently invoked the doctrine of harmonious construction to address ambiguity within consent terms between parties, which were documented by the High Court in connection with an award linked to a land acquisition dispute.
The Court stated that in line with the principles of the doctrine of harmonious construction, a document should be comprehended as a whole and in its entirety. If any ambiguity, whether overt or hidden, exists in any clause of the document, the courts must interpret that clause in a manner consistent with other clauses and aligned with the intent and purpose of the parties who executed it.
The case was heard by a bench comprising Justices Bela M Trivedi and Dipankar Dutta.
The appeal arose from a judgment of the Bombay High Court, which had annulled the entire award and sent the matter back to the Reference Court for fresh consideration in relation to a land acquisition case.
The dispute revolved around lands owned by the appellants, earmarked for the Agricultural Produce Market Committee (respondent).
The appellants and respondent had reached consent terms on October 20, 1997, following an award made under Section 11 on January 12, 1996.
These terms encompassed various elements of their agreement, including the assessment of compensation and the transfer of possession. Notably, the respondent had committed to paying the compensation awarded under Section 11 and taking over possession of the contested lands. Additionally, both parties had mutually agreed to refer the matter to the District Court for the valuation of the lands as of December 17, 1994.
The Court noted that both the consent terms and the High Court’s order failed to provide a specific timeframe within which the appellant was required to file an application with the respondent to initiate a Reference under Section 18 of the Land Acquisition Act, 1894.
The Court pointed out that the respondent exploited this lack of clarity to its advantage. Its challenge to the timing of the appellant’s application was inconsistent with the spirit of the consent terms.
The Court emphasized that this application requirement was more procedural than contentious, given that the date for determining market value had already been established and entrusted to the District Court, as per the High Court order recording the consent terms.
The Court concluded that raising such an objection after obtaining possession of the lands in question went against the tenor of the consent terms and appeared to have ulterior motives. Given the High Court’s directions in line with the consent terms, the issue of limitation under Section 18 of the Act became insignificant.
The respondent’s plea on this matter, raised before the Reference Court and the High Court, was considered inappropriate.
In light of the agreed-upon reference to the District Court for the determination of the market value as of December 17, 1994, the Court found the requirement to submit an application to the Collector for a Reference under Section 18 to be a mere procedural formality, which the appellant was expected to follow.
Considering the clear agreements reached between the parties, the Court concluded that the respondent’s claim that the appellant’s application to the District Court was beyond the stipulated limitation period under Section 18 was unfounded.
In light of the respondent’s explicit commitment to paying the compensation and initiating a reference to the District Court, the Court ruled that the respondent could not argue that the appellant’s application for the reference was outside the limitation period or inconsistent with the consent terms.
In its decision, the Supreme Court allowed the appeal and determined that the High Court had erred by interfering with the Reference Court’s findings and annulling the entire award.
