Full Judgment Text
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PETITIONER:
STATE OF WEST BENGAL AND ANR.
Vs.
RESPONDENT:
SURENDRA NATH BHATTACHARYA AND ANR.
DATE OF JUDGMENT24/04/1980
BENCH:
FAZALALI, SYED MURTAZA
BENCH:
FAZALALI, SYED MURTAZA
KAILASAM, P.S.
CITATION:
1980 AIR 1316 1980 SCR (3) 783
1980 SCC (3) 237
ACT:
Land Acquisition Act, 1894 as amended by Act 31 of
1962, Section 40(aa)-Interpretation of Section 40(aa) and
also Section 7 of the Amending Act of 1962-Acquisition of
land for company engaged in industry or work which is for
public purpose is valid and does not offend Article 14 of
the Constitution-Section 44B of the Act is prospective and
does not relate to acquisition.
HEADNOTE:
Respondent 2 known as Calcutta Mineral Supply Company
having its office at 31, Jackson Lane, Calcutta was carrying
on the business of manufacturing sodium silicate, plaster of
paris etc., which were formerly imported on a very large
scale from foreign countries. The manufactured goods of the
Company are widely used all over India saving considerable
foreign exchange which otherwise would have had to be spent
in importing these materials. With a view to extend its
business and improve the standard of its manufacture but for
want of space for big underground storage tanks, the Company
was handicapped, the Company applied to the Collector for
acquiring for public purpose, the lands in dispute which
were contiguous to the lands on which the existing factory
of the company stood was best suited. Consequent to the
application an agreement was executed between the Government
and the Company on the 29th of November 1954. On December 9,
1954, a notification under section 6 of the Land Acquisition
Act, 1894 was published and the first respondent filed his
objection which was rejected and was followed by a
notification under section 9 of the Act.
After the land acquisition proceedings were complete a
writ petition was filed by the first respondent before the
High Court on January 14, 1957 which was dismissed by a
single Judge of the High Court and therefore the first
respondent filed an appeal to the Division Bench of the High
Court on February 21, 1957. While the appeal was pending
before the High Court the Collector made an Award dated 14-
10-1957 and after taking possession from the owners of the
land, delivered the same to the company-respondent No. 2 on
October 22, 1957. The first respondent filed an application
for permission to urge additional grounds before the High
Court which was permitted and ultimately the Division Bench
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of the High Court by the order under appeal allowed the
appeal and quashed the Land acquisition proceedings taken
under the Act. Hence, this appeal before this Court after
getting a certificate from the High Court.
Allowing the appeal by certificate, the Court
^
HELD: 1. Analysing the ratio of the decision of this
Court in (Second) R. L. Arora v. State of U.P., [1964] 6
S.C.R. and followed in Himalayan Tiles & Marbles v. Francis
Victor Continho (dead) by 1.rs., [1980] 3 S.C.R. 235,
784
the following conditions must be satisfied before an
acquisition made prior to July 20, 1962 could be said to be
constitutionally valid-
(a) that the acquisition had taken place before
July 20, 1962, the date when the Amending Act
came into force;
(b) that the said acquisition should have been
fully completed in that property said to have
been acquired had vested absolutely in the
Government;
(c) that the acquisition was made for purposes
mentioned in clause (aa) of the amended
clause added to s. 40;
(d) that if these conditions were satisfied, then
any acquisition proceeding, order, agreement
or action in connection with much acquisition
would be deemed to have been valid as if the
amended provisions were in force at the time
when the acquisition was made. [788 E-G]
The facts of the present case squarely fall within the
ambit of the conditions laid down by section 7 of the
Amending Act and hence the challenge on the ground of the
constitutional validity of the acquisition must necessarily
fail. The proceedings for acquisition were started long
before July 20, 1962 that is, as early as December 9, 1954
when notification under section 6 of the Act was issued.
After inviting objections an Award was made by the Collector
on October 14, 1957 and after the property in dispute fully
rested in the Government, the Collector then delivered the
same to the Company-respondent 2 on October 22, 1957. [789
A-B]
Himalayan Tiles and Marbles v. Francis Victor Countinho
(dead) by I.rs., [1980] 3 SCR 235; applied.
2. To hold that section 40(aa) of the Act also requires
proof of public purpose in the restricted sense in that it
must be for the general good of the people at large, then
the very object sought to be achieved by the amendment would
be completely frustrated and the provisions of Section 7
would become otiose. [789 D-F]
3. The words "public purpose" are not to be interpreted
in a restrictive sense but take colour from the nature of
the industry itself, the articles it manufactures and the
benefit to the people that it subserves. The land should be
acquired for building or work which would serve the public
purpose of the Company and not public purpose as it is
generally understood. [791 C-D]
In the instant case the articles produced by the
Company are used for the benefit of the people and as it
saves a lot of foreign exchange, it is unmistakably for the
general good of the country particularly from the economic
point of view. The object of the Company in extending its
operations by enlarging the area of its production was for
the public purpose of the Company. Taking an overall picture
of the nature of the products of the company, its various
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activities, the general public good that it seeks to achieve
and the great benefit that the people derive, the
acquisition was for a public purpose. [791 C-F]
785
4. Section 44B of the Land Acquisition Act is purely
prospective in character and has absolutely no application
to acquisition proceedings taken before July 20, 1962, the
date when the amendment was enacted. [791 F-G]
5. Section 40(aa) of the Act does not violate Article
14 of the Constitution, by permitting acquisition of land
for a Company but not for an individual or a private Company
through these persons may also be engaged in an industry
which was for a public purpose. [792 A-B]
P. Girdharan Prasad Missair and Anr. v. State of Bihar
and Anr., A.I.R. 1968 Pat 77; Chhotubhai Babarbhai Patel v.
State of Gujarat and Anr., I.L.R. Gujarat 1964 p. 472;
approved.
R. L. Arora (II) v. State of U.P., [1964] 6 S.C.R. 784;
followed.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 140 of
1969.
From the Judgment and Order dated 3-5-1966 of the
Calcutta High Court in F.M.A. No. 71/57.
P. K. Chatterjee & Rathin Dass for the Appellant.
V. S. Desai, S. C. Majumdar and Miss Kirobi Banerjee
for Respondent No. 1.
P. K. Mukherji for Respondent No. 2.
The Judgment of the Court was delivered by
FAZAL ALI, J.-This appeal is directed against a
judgment dated May 3, 1966 of the Calcutta High Court
quashing the acquisition proceedings taken as also the
notifications made by the State of West Bengal under the
provisions of the Land Acquisition Act, 1894 (hereinafter
referred to as the Act’) in respect of the lands in dispute
which comprised 73 acres in village Kanpura, P.S. Dum Dum.
Although the case had a rather chequered career and was
preceded by a full-fledged litigation starting from the
trial court and ending with the High Court regarding the
question of title, we are not, however, concerned with the
past history in view of the short point on the basis of
which the appeal was decided by the Division Bench of the
High Court. The case of the Government was that on December
16, 1949, respondent No. 2 known as Calcutta Mineral Supply
Company having its office at 31, Jackson Lane, Calcutta,
applied to the Collector for acquiring the land in question
in order to extend its business. The company was carrying on
the business of manufacturing sodium silicate, plaster of
Paris, etc., which were formerly imported on a very large
scale from foreign countries. The manufactured goods of the
Company are widely used all over India saving considerable
foreign exchange which otherwise would have had to be spent
in importing
786
these materials. The company pleaded that it wanted to
extend its business and improve the standards of its
manufacture but for want of space for big underground
storage tanks, the company was seriously handicapped. The
company, therefore, prayed that the lands in dispute which
were contiguous to the lands on which the existing factory
of the company stood was best suited for this purpose and
hence the Collector was requested to acquire the lands for
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public purpose. Consequent to the application, an agreement
was executed between the Government and the company on the
29th of November 1954. On December 9, 1954, a notification
under s. 6 of the Act was published and the first respondent
filed his objection which was rejected and was followed by a
notification under s.9 of the Act. After the land
acquisition proceedings were complete a writ petition was
filed by the first respondent before the High Court on
January 14, 1957 which was dismissed by a single Judge on
the High Court and therefore the first respondent filed an
appeal to the Division Bench of the High Court on February
21, 1957. While the appeal was pending before the High Court
the Collector made an Award dated 14-10-1957 and after
taking possession from the owners of the land, delivered the
same to the company-respondent No. 2 on October 23, 1957.
The first respondent filed an application for permission to
urge additional grounds before the High Court which was
permitted and ultimately the Division Bench of the High
Court by the Order under appeal allowed the appeal and
quashed the land acquisition proceedings taken under the
Act. Hence, this appeal before this Court after getting a
certificate from the High Court.
The only point that has been canvassed before us by
counsel for the parties is as to whether or not the
acquisition of the land in dispute was valid in law. The
appellant contended that in view of the amendment of section
40 by Act. No. 31 of 1962, acquisition of land for the
purpose of the company was validated and all acquisitions
made before the amendment were validated retrospectively
provided certain conditions laid down under s. 7 of the
Amending Act were fulfilled.
We might mention here that prior to the amendment, this
Court in R. L. Arora v. State of U.P. had held that any
acquisition under the Act for purposes of a Private Company
would not be a public purpose and would, therefore, be void.
It was on the basis of this decision, which is usually known
as the ’first Arora case’, that the first respondent filed a
petition in the High Court for quashing the land acquisition
proceedings. The legislature, however, intervened by the
Amending Act, as mentioned aforesaid, and removed the basis
of the judgment of
787
this Court by adding clause (aa) to s. 40 of the Act so as
to validate all acquisitions of private lands for purposes
of a private company provided the conditions laid down in s.
7 were fulfilled. This amendment was also challenged before
this Court in what is known as the ’second Arora case’
where this Court by majority of 4: 1 held that the Amending
Act was valid and that under s. 40(aa) an acquisition could
be made even for a private company if it was engaged in an
industry which was for a public purpose. We are not
concerned with the other amendments made which do not apply
to the facts of the present case.
The High Court undoubtedly referred to the "first Arora
case" as also to the "second Arora case" but, with due
respect, we might observe that the High Court relied mainly
on the observations made in the "first Arora case" and has
not correctly interpreted the later decision of this Court
and the effect of the amendment which completely superseded
the "first Arora case". The argument of the learned counsel
before us centered round the interpretation of s. 40(aa) as
amended by the amendment as also s. 7 of the Amending Act.
In order to understand the scope of the argument it may be
necessary to extract both s. 40(aa) and s. 7 of the Amending
Act, which run thus:
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"7. Validation of certain acquisitions.-
Notwithstanding any judgment, decree or order of any
court, every acquisition of land for a company made or
purporting to have been made under Part VII of the
principal Act before the 20th day of July 1962, shall,
in so far as such acquisition is not for any of the
purposes mentioned in clause (a) or clause (b) of sub-
section (1) of section 40 of the principal Act, be
deemed to have been made for the purpose mentioned in
clause (aa) of the said sub-section, and accordingly
every such acquisition and any proceeding, order,
agreement or action in connection with such acquisition
shall be, and shall be deemed always to have been, as
valid as if the provisions of sections 40 and 41 of the
principal Act, as amended by this Act, were in force at
all material times when such acquisition was made or
proceeding was held or order was made or agreement was
entered into or action was taken.
Explanation-In this section "Company" has the same
meaning as in clause (e) of section 3 of the principal
Act, as amended by this Act."
"40(aa) that such acquisition is needed for the
construction of some building or work for a Company
which is engaged or is taking steps for engaging itself
in any industry or work which is for a public purpose."
788
In this connection, this Court observed as follows:-
"Therefore before s. 7 can validate an acquisition
made before July 20, 1962, it must first be shown that
the acquisition is complete and the land acquired has
vested in Government. This means that the land acquired
has vested in Government either under s. 16 or s. 17(1)
of the Act. Thus s. 7 of the Amendment Act validates
such acquisitions in which property has vested
absolutely in Government either under s. 16 or s.
17(1). Secondly’s. 7 of the Amendment Act provides that
where acquisition has been made for a company before
July 20, 1962 or purported to have been made under cl.
(a) or cl. (b) of s. 40(1) and those clauses do not
apply in view of the interpretation put thereon in R.
L. Arora’s case (1962 Supp. 2 SCR 149), it shall be
deemed that the acquisition was for the purpose
mentioned in cl. (aa) as inserted in s. 40(1) of the
Act by the Amendment Act. Thirdly, s. 7 of the
Amendment Act provides that every such acquisition and
any proceeding, order, agreement or action in
connection with such acquisition shall be, and shall be
deemed always to have been, as valid as if the
provisions of ss.40 and 41 of the Act as amended by the
Amendment act were in force at all material times when
any action was taken for such acquisition. Finally,
this validity is given to such acquisitions and to all
actions taken in connection therewith notwithstanding
any judgment, decree or order of any court".
Thus, analysing the ratio or the "second Arora case",
the following conditions must be satisfied before an
acquisition made prior to July 20, 1962 could be said to be
constitutionally valid-
(a) that the acquisition had taken place before July
20, 1962, the date when the Amending Act came into
force;
(b) that the said acquisition should have been fully
completed in that the property said to have been
acquired had vested absolutely in the Government;
(c) that the acquisition was made for purposes
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mentioned in clause (aa) of the amended clause
added to s. 40;
(d) that if these conditions were satisfied, then any
acquisition proceeding, order, agreement or action
in connection with such acquisition would be
deemed to have been valid as if the amended
provisions were in force at the time when the
acquisition was made.
On this aspect of the matter, the view taken by this
Court in the "second Arora case" was followed in a recent
decision of this Court in
789
Himalayan Tiles and Marbles v. Francis Victor Coutinho
(dead) by Lrs. In the instant case, it is not disputed that
the proceedings for acquisition were started long before
July 20, 1962, that is to say, as early as December 9, 1954
when notification under s. 6 of the Act was issued.
Secondly, it is also not disputed that after inviting
objections, etc., an Award was made by the Collector on
October 14, 1957 and after the property in dispute fully
vested in the Government, the Collector then delivered the
same to the company-respondent No. 2 on October 23, 1957.
For these reasons, the facts of the present case squarely
fall within the ambit of the conditions laid down by s. 7 of
the Amending Act and hence the challenge on the ground of
the constitutional validity of the acquisition must
necessarily fail.
Mr. V. S. Desai, appearing for respondent No. 1,
however, submitted that s. 7 itself was violative of Art.
31(2) of the Constitution. It is not necessary to examine
this argument in detail because a similar argument was urged
in the "second Arora case" (supra) and rejected.
It was then contended that even if we assume that s. 7
validated the present land acquisition proceedings, the
conditions prescribed in clause (aa) of s. 40 were not
fulfilled in this case inasmuch as the acquisition could not
be said to be for a public purpose. It was submitted by the
counsel for respondent No. 1 that as the company was a
private one and there is nothing to show that there was any
direct connection or close nexus between the articles
produced by the company and the general good of the public,
it could not be said that the acquisition was made for a
company which was engaged in an industry which was for
public purpose. This argument, in our opinion, is based on a
misconception of the concept of the Amending Act and the
introduction of clauses (aa) to s. 40. If we are persuaded
to hold that s. 40 (aa) also requires proof of a public
purpose in the restricted sense, in that it must be for the
general good of the people at large, then the very object
sought to be achieved by the amendment would be completely
frustrated and the provisions of s. 7 would become otiose. A
similar argument was advanced in the "second Arora case"
(supra) and was fully considered by this Court which
observed as follows:-
"In approaching the question of construction of
this clause, it cannot be forgotten that the amendment
was made in consequence of the decision of this Court
in R. L. Arora’s case (1962 Supp. 2 SCR 149) and the
intention of Parliament was to fill the lacuna, which,
according to that decision, existed in the Act in the
matter of acquisitions for a company..... Further, a
literal interpretation is not always the only
interpretation of a provision
790
in a statute and the court has to look at the setting
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in which the words are used and the circumstances in
which the law came to be passed to decide whether there
is something implicit behind the words actually used
which would control the literal meaning of the words
used in a provision of the statute.
Therefore, we have to see whether the provision in
cl. (aa) bears another construction also in the setting
in which it appears and in the circumstances in which
it was put on the statute book and also in view of the
language used in the clause. The circumstances in which
the amendment came to be made have already been
mentioned by us and the intention of Parliament clearly
was to fill up the lacuna in the Act which became
evident on the decision of this Court in R. L. Arora’s
case (1962 Supp. 2 SCR 149)...... It was only for such
a company that land was to be acquired compulsorily and
the acquisition was for the construction of some
building or work for such a company, i.e., a company
engaged or about to be engaged in some industry or work
which is for a public purpose. In this setting it seems
to us reasonable to hold that the intention of
Parliament could only have been that land should be
acquired for such building or work for a company as
would subserve the public purpose of the company; it
could not have been intended, considering the setting
in which cl. (aa) was introduced, that land could be
acquired for a building or work which would not
subserve the public purpose of the company....Further,
acquisition is for the construction of some building or
work for a company and the nature of that company is
that it is engaged or is taking steps for engaging
itself in any industry or work which is for a public
purpose. When therefore the building or work is for
such a company it seems to us that it is reasonable to
hold that the nature of the building or work to be
constructed takes colour from the nature of the company
for which it is to be constructed. We are therefore of
opinion that the literal and mechanical construction
for which the petitioner contends is neither the only
nor the true construction of cl. (aa) and that when cl.
(aa) provides for acquisition of land needed for
construction of some building or work it implicitly
intends that the building or work which is to be
constructed must be such as to subserve the public
purpose of the industry or work in which the company is
engaged or is about to be engaged. In short, the words
"building or work" used in cl. (aa) take their colour
from the adjectival clause which governs the company
791
for which the building or work is being constructed....
It is only in these cases where the company is engaged
in an industry or work of that kind and where the
building or work is also constructed for a purpose of
that kind, which is a public purpose, that acquisition
can be made under cl. (aa). As we read the clause we
are of opinion that the public purpose of the company
for which acquisition is to be made cannot be divorced
from the purpose of the building or work and it is not
open for such a company to acquire land under cl. (aa)
for a building or work which will not subserve the
public purpose of the company."
(Emphasis ours)
The effect of the observations made above leads to the
irresistible conclusion that the words ’public purpose’ are
not to be interpreted in a restricted sense but take colour
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from the nature of the industry itself, the articles that it
manufactures and the benefit to the people that it
subserves. This Court clearly indicated that the land should
be acquired for building or work which would serve the
public purpose of the company and not public purpose as it
is generally understood. In the instant case, we have also
set out the nature of the products of the company and have
stressed the fact that the articles produced by the company
are used for the benefit of the people and as it saves lot
of foreign exchange, it is unmistakably for the general good
of the country particularly from the economic point of view.
In these circumstances, it cannot be said that the object of
the company in extending its operations by enlarging the
area of its production was not for the public purpose of the
company. Taking an overall picture of the nature of the
products of the company, its various activities, the general
public good that it seeks to achieve and the great benefit
that the people derive, it cannot be said that the
acquisition, in the present case, was not for a public
purpose. According to the test laid down by this Court it is
sufficient if it is shown that the building sought to be
built or the work undertaken subserves the public purpose of
the company which is completely fulfilled in this case. The
High Court seems to have been impressed by the argument
advanced before it that the land acquisition proceedings in
the instant case are hit by s. 44B of the Act. The High
Court, however, has failed to consider that s. 44B is purely
prospective in character and has absolutely no application
to acquisition proceedings taken before July 20, 1962, the
date when the amendment was enacted.
The High Court also seems to have accepted the argument
of the first respondent that s. 40(aa) violates Art. 14 of
the Constitution inasmuch as it permits acquisition of land
for a company but
792
not for an individual or a private company though these
persons may also be engaged in an industry which was for a
public purpose. This argument was repelled by this Court and
it was held that s. 40(aa) was not violative of Art. 14. In
this connection, this Court observed as follows:-
"Therefore a distinction in the matter of
acquisition of land between public companies and
Government companies on the one hand and private
individuals and private companies on the other is in
our opinion justified, considering the object behind
cl. (aa) as introduced into the Act. The contention
under this head must therefore also fail."
Some of the High Courts also have taken a similar view
which has found favour with us in view of the second Arora
case, referred to above. In the case of P. Girdharan Prasad
Missir and Anr. v. State of Bihar & Anr. a Division Bench of
the Patna High Court while dealing with this question
observed as follows:-
"Thirdly, it was urged that the acquisition was
not for a public purpose but merely for the purpose of
helping a person (here the company) to make profits.
This argument, however, is no longer available. It is
well known that sugar industry is one of the important
industries of India engaged in the production of an
essential commodity, and the fostering of the growth of
that industry is undoubtedly for a public purpose. A
company engaged in the manufacture of sugar would,
therefore, come within the scope of clause (a) of sub-
section (1) of section 40 of the Act."
A Division Bench of the Gujarat High Court in
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Chhotubhai Babarbhai Patel v. State of Gujarat and Anr.
while construing the second Arora case referred to above
clearly held that s. 40(aa) contemplated that the building
or work which the company intended to construct was to
subserve the public purpose of the industry or work for
which it was being constructed. In that case also, the
company concerned was manufacturing caustic soda, dyes,
chemicals, colours and drugs (caustic soda is one of the
products of the company in the instant case also). Dwelling
on the importance of the public purpose of the industry
concerned in that case, Shelat, C. J., observed as follows:-
"Taking all these factors into consideration, it
is not possible to deny that the industry in which the
second respondent company is already engaged and is
about to be engaged in, and for the
793
buildings or works for which the lands in question are
being acquired is such that it will promote public
purpose and will be in the interest of the public."
We find ourselves in complete agreement with the
aforesaid observations of the learned Chief Justice.
Finally, even in the second Arora case, it would appear
that the company in question was engaged in the production
of textile machinery and its parts which were for the use of
the general public. This was held by this Court to be a
definite public purpose behind the acquisition. In this
connection, this Court observed as follows:-
"We are concerned here with acquisition for a
public purpose, which is undisputed. This is not a case
of a house of one person being requisitioned for
another; this is a case of constructing some work which
will be useful to the public and will subserve the
public purpose of the production of textile machinery
and its parts for the use of the general public. In the
circumstances we are of opinion that there being a
definite public purpose behind the acquisition in the
present case, the acquisition would be justified under
the Act irrespective of the intention of the previous
owner of the land to use it for some other public
purpose."
The industrial venture in which respondent No. 2 was
engaged was undoubtedly of much greater use than a company
producing textile machinery because apart from being useful
to the people at large and producing chemicals it has also
resulted in saving lot of foreign exchange and thus
improving the economy of our country so as to be an
efficient instrument of economic benefit. We are satisfied
that all the conditions of s. 7 of the Amending Act as also
that of s. 40(aa) have been fulfilled in the instant case
and the High Court was wrong in law in quashing the said
proceedings. The appeal is accordingly allowed, the judgment
of the High Court is quashed and the Award of the Collector
as also the proceedings before the Award are restored. In
the circumstances of the case, the appellant will be
entitled to costs in this Court against respondent No. 1.
S.R. Appeal allowed.
794