Full Judgment Text
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CASE NO.:
Appeal (civil) 5015 1999
PETITIONER:
STATE GOVT. HOUSELESS HARIJAN EMPLOYEES ASSOCIATION
Vs.
RESPONDENT:
STATE OF KARNATAKA & ORS.
DATE OF JUDGMENT: 11/12/2000
BENCH:
Ruma Pal, A.P.Misra
JUDGMENT:
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J U D G M E N T
RUMA PAL, J.
The question to be decided in this appeal relates to
the rights of the beneficiary of an acquisition under the@@
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Land Acquisition Act (hereinafter referred to as the Act)@@
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to resist withdrawal of acquisition proceedings. In the
course of the arguments before us, we were of the view that
the original records pertaining to this case should be
produced. This was directed on 14th September 2000. The
entire records have admittedly not been produced by the
State Government. We have been informed by the learned
counsel appearing on behalf of the State that one of the
files pertaining to the case has been destroyed on 3rd
February, 2000. On the basis of the records we have found
that the appellant is a Society registered under the
Karnataka Societies Registration Act, 1961. It has 360
members all of whom are State Government Employees belonging
to the Schedule Castes of Adidravida and Adikarnataka. It
wanted to provide house sites for its members all of whom
are houseless. In 1983, the appellant approached the
Government to acquire 15 acres of land at Maralur village.
The land belonged to respondents Nos. 5 to 7 herein. By a
letter dated 10.1.1983 the Planning Authority wrote to the
Assistant Commissioner, Tumkur stating that a resolution had
been passed to issue no objection certificate for
suitability of the land for house sites in favour of the
appellant. It further said that the land was earmarked
partly for residential and partly for open place in the
draft lay out plan of Tumkur. On 16.7.1984 a letter was
written by the Assistant Commissioner to the appellant in
which the appellant had been asked to furnish the following
particulars: 1. The lists of members of the Association
who are siteless and houseless. 2. The financial soundness
of the Association by way of the shares collected. The
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amount deposited in the Bank etc.; 3. The audit report for
the previous three years; 4. Whether the area proposed for
acquisition is treated as residential in the plan i.e.
outline development plan, or comprehensive development plan,
prepared by the Town Planning Department or not; 5.
Whether the layout plan proposed by the association fits in
the comprehensive plan of the city area, 6. Whether the
proposed area is in excess/less as compared to the demand
based on the number of eligible members.
On 17.8.1984 the particulars as required by the
Assistant Commissioner were furnished including a copy of
the lay out plan. According to the appellant, the State
Government required the appellant to make a deposit towards
the cost of acquisition. The appellant deposited the
required amount in 1984. According to the appellant, the
State Government granted prior approval to the acquisition
by letter dated 7th September 1986. A notification under
Section 4 (1) of the Act was published on 6th August 1987.
On 9th July 1987, the appellant was called upon to deposit a
further sum towards the cost of acquisition by the Land
Acquisition Officer. This amount was also deposited. The
records were then forwarded by the Assistant Commissioner,
Tumkur under cover of a letter dated 19.11.1987 to the
Revenue Commissioner and Secretary to Government, Revenue
Department. These were returned with the direction that the
recommendation of the District Level Committee should be
submitted. According to the appellant, on 13th May 1988 it
wrote to the Assistant Commissioner, Tumkur Sub-Division
giving particulars of the housing scheme and again enclosing
a proposed lay out plan. A letter dated 30.5.1988 was
written by the appellant to the Divisional Commissioner,
Tumkur requesting for expedition in which it was stated
the Association has already formed 361 sites as per the
draft plan measuring East to West and North to South 30ft.x
40 ft. respectively apart from road and park in 15 acres of
land acquired at SY No.49 as per the Government Order No.
RD/45/AQT/83 dated 27.3.1987. The District Level Committee
held a meeting on 17.6.1988. The minutes of the meeting
show that before recommending the appellants case all the
aspects were considered and in particular : An extent of
80 x 210 Sq. feet has been left for public amenities as per
the site plan, which is enclosed in the file. The Town
Planning Authority has pointed that 10% of the land should
be left for public amenities. The Society has agreed to
this.
At its meeting held on 28.7.1988 the State Level
Committee recommended the acquisition of the land in favour
of the appellant for providing house sites to its members.
On 10th August 1988, the State Government passed an order
directing the authorities to issue the final notification
under Section 6 (1) of the Act. As the statutory period
provided under Section 6(1-A) (which has been inserted by
way of amendment in the State of Karnataka) had already
expired, a fresh Notification under Section 4 (1) of the Act
was directed to be issued. Prior to the issuance of the
Notification, a detailed note was prepared by the Deputy
Secretary, Revenue Department which was forwarded to the
Secretary. On 1.2.90, the Secretary referred to his note
and proposed, We may give clearance in favour of the
Association. For approval. This was approved by the Chief
Secretary and placed before the Minister for Revenue who in
turn approved the note on 12th February 1990. On 14th
February, 1990 the Secretary, Revenue Department wrote to
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the Deputy Commissioner, Tumkur District: Sub: In the
matter of acquisition of 15 Acres of land in Survey No. 49
of Maralur Village, Tumkur Kasaba, for housing sites in
favour of Houseless Harijan-Girian Government Employees
Association.
Ref: 1. Your office letter No. LAW/CR/130/88-89,
dated 17.10.1989.
2. Your letter No. LAW/CR/18/88- 89, dated
26.10.1989: 5.12.1989.
After considering in great detail, the proposal
contained in your letter and requisition of Houseless
Government Servants Association, Tumkur and all other
aspects, the State Government has decided to commence afresh
the land acquisition proceedings. Therefore, I am directed
to request you to take steps for issue of notification under
Section 4(1) of the Land Acquisition Act.
A second notification under Section 4(1) of the Act
was issued on 27.2.90 proposing to acquire the land for
public purpose for the benefit of the appellant for housing
its members. Again the Government did not publish the
declaration under Section 6 of the Act within the time
prescribed. A letter was written on 15.3.1991 by the
Secretary, Revenue Department addressed to the Deputy
Commissioner. The unofficial translation of the letter
reads: Sub: Allotment of 15 Acres of Land in Survey No.49
in the Village Maralooru, Tumkur Disrtrict to Landless
Scheduled Castes State Government Employees Union (Regd.)
Reg.
Inviting attention to your letter No.LQCR- 72-90-91
dated 20th November, 1990 on the above subject, it is
brought to your notice that while keeping in mind the fact
that the matter of acquisition of these lands has been
dropped on earlier two occasions after the initiation of the
land acquisition proceedings, on examination of the
objections of the land owners, again the matter of
acquisition of land for being allotted to landless Scheduled
Castes State Government Employees Union has been minutely
examined in consultation with the Law Department. According
to the opinion of the Law Department the acquisition of land
in favour of the impugned Union is for a public cause. In
view of this it has been decided by the Government to
acquire 15 acres of land of Survey No. 49 in Maralooru
Village, Tumkur District/(Kasha) in favour of the Landless
Scheduled Caste State Government Employees Union, Tumkur.
Thererore, I am directed to convey the approval of the
Government to initiate action for issue of notification
under Column 4(1) for acquisition of the above mentioned
land in favour of the above mentioned Union.
A third notification under Section 4(1) was
accordingly published on 22.7.1991. This was challenged by
respondents 5 to 7 before the High Court (Writ Petition No.
21438 of 1991). It was contended that the appellant was not
duly registered under the Karnataka Societies Registration
Act, 1960 and, therefore, it was not lawful to acquire the
land for it. No interim order was passed and the
acquisition proceedings continued. The respondent owners
filed objections to the acquisition. All the objections
including the objection relating to the non-registerability
of the appellant under the Karnataka Society Registration
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Act were rejected. According to the noting on the file
dated 23.11.1991 the land owner can question the validity
of the registration of the Association on the housing
activities, before the appropriate authority and not before
this authority. Therefore, this objection is not tenable.
The rejection of the owner- respondents objection under
Section 5-A were affirmed on 3.12.1991 in the report
prepared by Deputy Secretary to Government, Revenue
Department which was approved both by the Minister of
Revenue as well as the Law Minister. Directions were
accordingly issued to proceed under Section 6(1) (a) of the
Act on 12.3.1992. The final Notification under Section 6 of
the Act was published on 15th May 1992 declaring that the
acquisition was for the public purpose of allotment of house
sites to the members of the appellant. On 7th September
1992, the Land Acquisition Officer made the Award under
Section 9 of the Act, issued a notice dated 15th September
1992 and directed the appellant to deposit the balance
amount representing the difference between the amounts
already deposited by the appellant and the amount of the
Award. The balance amount of Rs.7,36,231/- was deposited on
19th November 1992. A further sum of Rs.65,926/- was also
deposited on 4th January 1993 by the appellant pursuant to
the directions of the Land Acquisition Officer. The total
amount deposited by the appellant towards the cost of
acquisition is Rs.19,01,915/. The Award was approved by the
Divisional Commissioner by his O.M. dated 26th May 1993.
The approval records that an inquiry was held by the Deputy
Commissioner and Assistant Commissioner regarding the
members of the Society and that the authorities were
satisfied that the appellant-Association consisted of SC/ST
members. According to the orders of the Divisional
Commissioner, possession of the acquired land was to be
handed over to the appellant in accordance with law. At
this stage, a letter was written by the Department of
Revenue to the Land Acquisition Officer directing him not to
hand over possession of the land to the appellant until
further orders. According to the appellant-Society, the
Governments volte-face was because S.Shafiq Ahmed, the
local M.L.A.( respondent No. 2) had objected to the
finalisation of the land acquisition proceedings in favour
of the appellant. It is alleged that the respondent No.2
had sent his objections not only to the Divisional
Commissioner but also to the Revenue Minister. The Minister
instructed the Revenue Commission to stop the land
acquisition proceedings which in turn passed on the
instruction to the Secretary to the Revenue Department of
the State Secretariat as a consequence whereof the letter
dated 5th July 1993 was written. On 6th July 1993, the
respondents 5,6 and 7 withdrew Writ Petition No. 21438/91.
The appellant filed a writ petition challenging the legality
of the letter dated 5th July 1993. Although an interim
order had been granted not to take further action pursuant
to the letter, in the office note dated 25.6.93, the
Minister of Revenue has recorded, In view of the opinion
offered by the Law Deptt., it is not permissible to acquire
land on behalf of the Govt. Houseless employees Association
registered under Sec. 3 of the Karnataka Societies
Registration Act. Hence withdrawal notification u/s 48(1)
of the LA Act may be issued. And on 2nd August 1993, the
Government issued a Notification under Section 48(1) of the
Act withdrawing the acquisition. This was published in the
Official Gazette on 5th August 1993. The appellant amended
the writ application by seeking quashing of the Notification
dated 2nd August 1993. A second writ petition was also
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filed by the appellant for the same reliefs. However both
writ petitions were dismissed. It is not necessary for us
to consider the order dismissing the second petition.
Suffice it to say that by virtue of an order passed by this
Court, the appellant was permitted to proceed with the first
writ petition filed by it on 9th July 1993. The writ
petition was dismissed by the Single Judge holding that
there was no approval to the acquisition under Section
3(f)(iv) of the Act and that the letter dated 7th September
1986 relied upon by the appellant in this connection did not
amount to such approval. It was also held that malafides
had not been established, as respondent No. 2 had filed
statement of objections denying all such allegations and
that the appellant had not produced any material to
establish that the release from the acquisition was at the
instance of the second respondent in collusion with the land
owners. The Single Judge also held that the Government had
the absolute power to withdraw from the acquisition since
possession had not been handed over to the appellant. The
appellants appeal was given short shrift by the Division
Bench of the High Court. It was said that no reasons were
required to be given by the Government when it withdrew the
acquisition proceedings in the absence of any pleadings with
respect to malafides. It was also said that the decision of
this Court in Special Land Acquisition Officer, Bombay V.
Godrej & Boyce 1988 (1) SCR 590 which had been relied upon
by the appellant did not apply as this Court had, according
to the High Court, held that reasons were required to be
given by the Government for withdrawing from the acquisition
only in connection with acquisition proceedings initiated
under Part VIII of the Act and not in cases where the
proceedings had been initiated under Part II. Before
concluding the narration of facts, we note that according to
the appellant, during the pendency of these proceedings,
respondents 5, 6 and 7 sold the land to the respondents 8 to
34. The respondents 5,6 and 7 have denied this. We do not
propose to go into this dispute. The arguments have been
wide ranging and the parties have submitted written notes of
their arguments. But the basic grievance of the appellant
is that the order withdrawing the acquisition under Section
48(1) of the Act was passed without any notice or hearing
the appellant. According to the appellant, the right of the
beneficiary to be heard has been recognized by the decision
of this Court in Larsen & Toubro Ltd. v. State of Gujarat
and Others 1998 (4) SCC 387. According to the respondents,
the decision in Larsen & Toubro Ltd. is limited to the case
of a company for which land had been acquired after
formalities under Part VII of the Act had been completed.
It was submitted that the principles of natural justice
should not be extended to withdrawal of an acquisition for
public purpose. This Court has consistently held that the
requirements of natural justice will be read into statutory
provisions unless excluded expressly or by necessary
implication. In the case of Union of India V. Col. J.N.
Sinha 1970 (2) SCC 458, this Court said: . It is true@@
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that if a statutory provision can be read consistently with
the principles of natural justice, the courts should do so
because it must be presumed that the Legislatures and the
statutory authorities intend to act in accordance with the
principles of natural justice. But if on the other hand a
statutory provision either specifically or by necessary
implication excludes the application of any or all the
principles of natural justice then the court cannot ignore
the mandate of the Legislature or the statutory authority
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and read into the concerned provision the principles of
natural justice.
The Constitution Bench in Olga Tellis V. Bombay
Municipal Corporation 1985 (3) SCC 545 placed the onus to
prove the exclusion of the rules of natural justice by way
of exception and not as a general rule on the person who
asserted it. The ordinary rule which regulates all
procedure is that persons who are likely to be affected by
the proposed action must be afforded an opportunity of being
heard as to why that action should not be taken. The
hearing may be given individually or collectively, depending
upon the facts of each situation. A departure from this
fundamental rule of natural justice may be presumed to have
been intended by the Legislature only in circumstances which
warrant it. Such circumstances must be shown to exist, when
so required, the burden being upon those who affirm their
existence.
Both these views were affirmed by the Constitution
Bench in C.B. Gautam V. Union of India 1993 (1) SCC 78.
Admittedly, the ap pellant was given no opportunity of
being heard before the decision was taken by the respondent-
Section authorities to withdraw the acquisition in exercise
of 48 (1) of the Act. Section 48 (1) of the Act provides:
48. Completion of acquisition not compulsory, but
compensation to be awarded when not completed. (1) Except
in the case provided for in Section 36, the Government shall
be at liberty to withdraw from the acquisition of any land
of which possession has not been taken.
The section does not in terms exclude the principles
of natural justice. However, the section has been construed
to exclude the owners right to be heard before the
acquisition is withdrawn. This is because the owners
grievances are redressable under Section 48 (2). No
irreparable prejudice is caused to the owner of the land
and, if at all the owner has suffered any damage in
consequence of the acquisition proceedings or incurred costs
in relation thereto, he will be paid compensation thereof
under Section 48 (2) of the Act. [See: Amar Nath Ashram
Trust Society V. Governor of U.P 1988 1 SCC 591 at p. 596]
. [See: also Special Land Acquisition Collector v. Godrej
Boyce : 1988 1 SCR 590]. But as far as the beneficiary of
the acquisition is concerned there is no similar statutory
provision. In contrast with the owners position the
beneficiary of the acquisition may by withdrawal from the
acquisition suffer substantial loss without redress
particularly when it may have deposited compensation money
towards the cost of the acquisition and the steps for
acquisition under the Act have substantially been proceeded
with. An opportunity of being heard may allow the
beneficiary not only to counter the basis for withdrawal,
but also, if the circumstances permitted, to cure any defect
or shortcoming and fill any lacuna. No reason has been put
forward by the respondents to exclude the application of the
principle of natural justice to Section 48 (1) of the Act.
The decision in Larsen & Toubro which relied upon an earlier
decision in Amarnath Ashram Trust Society and Another V.
Governor of U.P. and Others (supra) to hold that a
beneficiary has a right to be heard before a notification
under Section 48 (1) is issued, does not appear to be
limited to acquisition for companies under Part VII of the
Act as is contended by the respondents although the
acquisition in that case had been made for a company for the
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purpose of setting up a housing colony. Both cases have
also drawn a distinction between the rights of an owner and
the beneficiary of the acquisition to object to withdrawal
from the acquisition for the reasons noted earlier.. It may
be noted that as in the case of the company, under Section 3
(f)(vi) the prior approval to the acquisition is required if
an acquisition is made for the purpose of providing land for
carrying out, inter-alia, any housing scheme sponsored by a
Society registered under the Society Registration Act, 1860.
This approval must be made after adequate enquiry. Again
the issuance of the Notification under Section 4 is followed
by filing and hearing of objections under Section 5 -A by
the Collector. With the publication of declaration under
Section 6, the Collector is to take steps for holding an
inquiry under Section 9 after giving notice to all the
persons interested. After completing the inquiry under
Section 11, the Collector is required to pass an Award with
the approval of the State government giving (i) the true
area of the land; (ii) the compensation which in his
opinion should be allowed for the land; and
(iii) the apportionment of the said compensation among
all the persons known or believed to be interested in the
land, of whom, or of whose claims, he has information,
whether or not they have respectively appeared before him.
All these steps had been taken in the Appellants case
. As said in Larsen & Toubro: After having done all this,
the State Government cannot unilaterally and without notice
to the company withdraw from acquisition. Opportunity has
to be given to the company to show cause against the
proposed action of the State Government to withdraw from
acquisition.
A distinction may perhaps be drawn with beneficiaries
who do not bear the cost of acquisition as the appellant has
done in this case. But in the circumstances of this case,
the State Government could not have withdrawn from the
acquisition without hearing the appellant. This finding is
sufficient to decide the appeal in favour of the appellant.
In any event the decision to withdraw the acquisition under
Section 48(1) is justiciable. This Court in Amarnaths case
said: . the decision of the Government to withdraw from
acquisition was based upon a misconception of the correct
legal position. Such a decision has to be regarded as
arbitrary and not bona fide. Particularly in a case where
as a result of a decision taken by the Government the other
party is likely to be prejudicially affected, the Government
has to exercise its power bona fide and not arbitrarily.
Even though Section 48 of the Act confers upon the State
wide discretion it does not permit it to act in an arbitrary
manner. Though the State cannot be compelled to acquire
land compulsorily for a company its decision to withdraw
from acquisition can be challenged on the ground that power
has been exercised mala fide or in an arbitrary manner.
Therefore, we cannot accept the submission of the learned
counsel for the State that the discretion of the State
Government in this behalf is absolute and not justiciable at
all.
These observations were noted with approval in Larsen@@
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& Toubro.(supra) In the notification under Section 48(1)@@
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impugned in this appeal no reason whatsoever has been given
for withdrawal of the acquisition. All that said is: In
exercise of the powers conferred by Sub-section (1) of
Section 48 of the Land Acquisition Act, 1984, (Central act 1
of 1894) as amended by Karnataka Act No. 17 of 1961, the
Government of Karnataka hereby withdraw from the acquisition
of the Land specified below in the schedule in respect of
which a Notification No. RD:177:AQT:91 dated 15th May 1992
issued under Section 6 of the Land Acquisition Act was
published in Karnataka Gazette dated 21st May 1992 and 3rd
September 1992 as required for public purpose, namely for
formation and distribution to the Members of Houseless
Harijans Employees Association [R] Tumkur. In the affidavit
affirmed on behalf of respondents, 1,3 and 4 on 3rd December@@
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1998 it is said that the decision to withdraw was taken on@@
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the basis of the opinion of the Law Department. The Law
Department had opined that the acquisition had been sought
to be made for a public purpose in terms of Section 3 (f)
(vi) of the Act, which required the housing scheme to be
sponsored by any society registered under the Societies
Registration Act. According to the Law Department, a
society could be registered only in respect of the objects
specified in clauses (a) to (g) of Section 3 of the
Karnataka Society Registration Act. None of the objects
mentioned in the Memorandum of Association of the appellant
fell within these clauses of Section 3 of the State act. In
the result, the acquisition of land on behalf of the
Society in question for the purpose of forming layouts and
distribution of sites to its members (which are not
contemplated under Section 3 of the K.S.R. Act) is not
permissible. Section 3(f) of the Act defines the
expressions public purposes as including, inter-alia:
(vi) the provision of land for carrying out any educational,
housing, health or slum clearance scheme sponsored by
Government or by any authority established by Government for
carrying out any such scheme, or, with the prior approval of
the appropriate Government, by a local authority, or a
society registered under the Societies Registration Act,
1860, or under any corresponding law for the time being in
force in a State, or a co-operative society within the
meaning of any law relating to co-operative societies for
the time being in force in any State;
but does not include acquisition of land for
Companies.
In order therefore that an acquisition may be for a
public purpose within the meaning of sub-section 3(f)(vi) as
far as the case before us is concerned, the acquisition (1)
should have been done with the prior approval of the
appropriate Government; (2) must have provided for land for
any housing scheme and (3) the housing scheme should have
been sponsored by a Society registered under the Societies
Registration Act, 1860 or any other corresponding law in the
State. Of these three requirements, according to the Law
Department, the third requirement was lacking. The opinion
of the Law Department and consequently the basis of the
impugned order are unacceptable for several reasons.
Admittedly the appellant is registered under the Karnataka
Societies Registration Act. What appears to be the
contention of the respondents is that the appellant could
not have been registered under the State Act. It is
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nobodys case that the registration of the appellant has in
fact been withdrawn or cancelled under the Karnataka Act.
Section 3 of the Karnataka Act specifies the Societies to
which the Karnataka Act applies. The Societies must be
formed for any one or more of the seven objects mentioned.
The last two objects mentioned in the Karnataka Act are in
fact included in the Memorandum of Association of the
appellant as being two of the aims and objects of the
appellant. The opinion of the Law Department that none of
the objects of the Appellant were within the objects
specified in Section 3 was factually incorrect. It has not
been shown that if some of the objects with which a Society
is established are invalid and others are valid, the
registration of the Society is ipso facto vitiated. On the
contrary, it appears from the records that on petitions
being filed for cancellation of the appellants
registration, by letter dated 23rd March 1991, the District
Registrar did not cancel the registration but said,
Therefore, it is hereby endorsed that the objects which are
in accordance with Section 3 of the said Act are valid and
remained (sic) not valid. Thus, it cannot be asserted with
any certainty that the appellant could not have been and
cannot continue to be registered under the Karnataka Act.
It is to be noted that under Section 8 (2) of the Karnataka
Act, a society may be registered only after the Registrar is
satisfied that all the requirements of the Act and the rules
made thereunder have been complied with. One cannot assume,
that the appellants case did not come within Section 3 (f)
(vi) of the Act. It is therefore unnecessary to determine
whether there is a conflict between Section 3 (f)(vi) of the
Act and Section 3 of the Karnataka Act nor do we propose to
decide which of the two would prevail under Article 254 of
the Constitution. Indeed the learned Single Judge found no
impediment in an acquisition for the appellant despite
Section 3 of the Karnataka Act when he said: all the
members of the Society belong to the weaker section of the
society and they do not have residential sites to have a
roof over their head. When such being the case it is
appropriate for the State Government to take steps to
acquire lands having got deposited substantial amount
towards the cost of acquisition with a view to acquire
certain extent of land to provide residential sites to the
members of the society. Therefore, in the event if the
petitioner society come forward with a scheme and submit the
same to the State Government, the State Government may take
necessary steps to initiate acquisition proceedings after
sanctioning the prior approval provided if the
petitioner-society does not withdraw the amount so deposited
by it for the purpose of acquisition of the land.
In fact neither the Single Judge nor the Division
Bench of the High Court appear to have accepted this reason
as ground for withdrawing the acquisition. Furthermore,
this very objection had been considered at every level and
rejected on 14th November 1991 after which the Notification
under Section 6 was issued and published declaring that the
land was required for a public purpose. Once this was done,
under sub-Section (3) of Section 6, the said declaration was
conclusive evidence that the land is needed for a public
purpose... The stage for questioning the public
purpose aspect of the acquisition is over and cannot be
reopened by the State nor can the respondents/owners raise
this issue without challenging the Notification under
Section 6. They had challenged it under Art. 226 but then
withdrew their writ petition. In this context it may be
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noted that the appellants allegation that the sudden
volte-face of the State Government was by reason of the
pressure brought by respondent No. 2 appears to have some
substance. Although the respondent No. 2, both before the
High Court and before us, denied his involvement in the
matter, the records reveal that at least by letter dated
30th December 1991, the respondent No. 2 had written to the
Revenue Department espousing the cause of respondent owners
seeking withdrawal of the acquisition. The basis on which
the learned Single Judge dismissed the appellants writ
petition was that there was no approval of the appropriate
Government to the acquisition, namely, the absence of the
third factor noted above. This was not the ground on which
withdrawal from the acquisition had been made and it was not
open to the State Government to justify its decision on any
other ground. As held by this Court in Mohinder Singh Gill
and Another v. The Chief Election Commissioner, New Delhi
and Others 1978 (1) SCC 405 at p. 417: ..when a
statutory functionary makes an order based on certain
grounds, its validity must be judged by the reasons so
mentioned and cannot be supplemented by fresh reasons in the
shape of affidavit or otherwise. Otherwise, an order bad in
the beginning may, by the time it comes to Court on account
of a challenge, get validated by additional grounds later
brought out.
Besides, what had been stated in the affidavit of the
State- respondents is the petitioner society has not
submitted any housing scheme and as such there could not
have been prior approval from the Government. In other
words, the fact of prior approval has not been denied. What
is said is because no housing scheme had been submitted by
the appellant there could not have been prior approval.
No finding was however given by the Single Judge on this.
All that was said was: The learned Govt. Advocate
submitted that in the instant case there is no scheme
submitted by the society and there is no such approval of
the State Government. If that is so, the entire acquisition
proceedings initiated treating it as a public purpose itself
is vitiated.
The Division Bench did not at all address itself to
this aspect of the matter. In the absence of any finding on
the existence of the scheme, the submission of the State
Government regarding prior approval should have been
rejected. In fact it appears from the records a housing
scheme had been submitted by the appellant. Apart from the
lay out plan, the number, the sizes and positions of the
plots, the user, the number of allottees, the basis of
allotment, the finances for the purposes, the particulars of
the membership had all been submitted by the appellant. The
organisational set up to administer the scheme was indicated
in its Memorandum of Association, which also ensures that
the land would be utilised for the purposes for which it was
being acquired. The clearance of the Town Planning
Authority had been obtained. The particulars were verified
and found satisfactory in all respects by the authorities.
Nothing more could be asked for from the propounder of a
housing scheme. The respondents then submitted that the
letter dated 15th March, 1991 did not amount to a prior
approval because ( i ) it did not indicate that the scheme
was approved (ii) it was not in accordance with Art. 166 of
the Constitution and (iii ) the Government could not rely on
material collected by it before the first notification under
Section 4(1) of the Act was issued. No form of the prior
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approval required under Section 3(f)(vi) of the Act has been
specified in the Act itself. What the section in terms
requires is the prior approval to the acquisition for the
purpose specified. This was expressly given. That the
letter dated 15.3.91 was issued by the Government is not in
dispute. The lack of compliance with Article 166 did not
render it a nullity. As held by the Constitution Bench of
this Court in 1964 (6) SCR 368: it is, therefore,
settled law that provisions of Art.166 of the Constitution
are only directory and not mandatory in character and, if
they are not complied with, it can be established as a
question of fact that the impugned order was issued in fact
by the State Government or the Governor... [See also
Dattatreya v. The State of Bombay (1952 SCR 612) Major E.G.
Barsay v. State of Bombay: AIR (1961) SC 1762]
No doubt, in Gulabra v. State of Gujarat 1996 (2) SCC
26, it was held that a decision of Revenue Minister was not
an order of the Government because of non compliance with
Article 166. But in that case there was a conflict between
the Revenue Department and the Urban Development & Urban
Housing Department whether proceedings under S. 4(1) of the
Act were to be dropped or not. The Revenue Minister was of
the view that it should be dropped. The Urban Development
Department disputed this. The Rules of Business framed by
the State under Art. 166(3) specifically provided that in
such a controversy , the matter was to be submitted to the
Chief Minister for placing before the Cabinet. This was not
done nor was the order of the Revenue Minister communicated
to the appropriate authority. The Revenue Ministers
decision which was noted on the file was sought to be
enforced by the owners. This was negatived by the Court.
The decision is factually distinguishable and cannot be
construed as upsetting the settled law as noted in
Chitralekhas case. The approval in this case was a
culmination of a lengthy exercise which started in 1983 with
two prior abortive attempts to complete the acquisition.
This is evident from the language of the letter dated
15.3.1991 itself. The genuineness of the need of the
appellant has not been doubted even by the High Court,
unlike the case of HMT House Building Cooperative Society v.
Syed Khader & Ors. (1995)2 SCC 677 where it was found that
the Government had acted at the instance of a middleman and
the acquisition was sought for the ultimate commercial
utilization of the land. But, the respondents contend, the
materials on which the appellant sought to rely to show that
the prior approval in 1991 was granted after being satisfied
about the housing scheme, were submitted prior to the
earlier notifications under Section 4(1). According to the
respondents, with the dropping of the earlier notifications,
the entire proceedings on the basis of which they were
issued became non est. They have cited State of Gujarat V.
Patel Chaturbhai Narsibhai 1975 1 SCC 583 in support of this
submission. The owner- respondents further submission was
that the acquisition was commenced under Part VII and that
the material gathered may have been relevant for an
acquisition under Part VII but could not be relied upon for
proceedings under Part II. These are not pleas which were
taken by the respondents at any stage. Both issues raise@@
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
mixed questions of law and fact. As far as questions of@@
JJJJJJJJJJJJJJJJJJJJJJJJJJJJ
fact are involved we cannot entertain them and as principles
of law both submissions are untenable. Patel Chaturbhai
Nasirbhai (supra) cited by the respondents dealt with
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acquisition for a company in accordance with Part VII of the
Act and the Land Acquisition (Companies) Rules, 1963. Part
VII of the Act contains sections relevant to the acquisition
of land for Companies, namely, Section 38-A to Section 44-B.
Section 39 provides that the procedure commencing with the
declaration under Section 6 and terminating with the
distribution of compensation and possession of the land
would not put into force to acquire land for any company
under Part-VII without: (i) the previous consent of the
appropriate Government, and
(ii) execution of an agreement between the company and
the appropriate Government under Section 41.
It is only after both the requirements are satisfied
that further steps in the acquisition of land for the
company can be taken. In Patel Chaturbhai Narsibhai and
Others(supra) the first notification under Section 4 of the
Act was issued on 4th March 1961. After an inquiry was
held, the State Government gave its consent. On 22nd August
1961 an agreement was entered into between the State
Government and the Company. On 9th July 1965, the Land
Acquisition (Gujarat Unification and Amendment) Act, 1965
came into force amending Section 39 of the Act. The
Notification dated 4th March 1961 was cancelled on 28th
September 1965. The next day a fresh notification under
Section 4 was issued. The dispute before this Court was
whether the conditions for the issuance of the second
Notification had been satisfied. Admittedly, a second
agreement was entered into between the Company and the State
Government after the second Notification under Section 4 (1)
on 13th January 1969 i.e. subsequent to the second
Notification. The State Government sought to rely upon the
earlier agreement dated 22nd August 1961. This was
negatived. It was said: The enquiry pursuant to the
notifications in the year 1961 and previous to the fresh
notifications in 1965 is of no effect in law for two
principal reasons. First, the 1961 notification was
cancelled, and, therefore, all steps taken thereunder became
ineffective. Second, the enquiry under Rule 4 in 1961 was
held without giving opportunity to the land owner
respondent, and, therefore, the enquiry is invalid in law.
To begin with as far as the case before us is
concerned there is no basis for the submission that the
acquisition was originally commenced under Part VII. The
first Notification is not on record. The State has given no
reason for destruction of the file when the matter was
pending for consideration before this Court. However, after
the publication of the first notification under Section 4(1)
on 6th August 1987 the respondents-owners had objected. The
objections included a submission that the Society is not a
registered Society. The second objection was that the
acquisition was not for a public purpose. In dealing with
these objections by letter dated 12th /19th November 1987
written by the Assistant Commissioner, Tumkur to the Revenue
Commissioner it was affirmed that the appellant was
registered and the purpose of acquisition is housing. As
such the proposed acquisition falls under Section 3(e)(vi)
read with Section 3 (e) (vii). Presumably the Assistant
Commissioner meant Section 3 (f) (vi) and 3(f) (vii). The
respondents then relied upon a letter dated 27th March 1987
sent by the Under Secretary, Revenue Department to the
Special Deputy Commissioner, Tumkur District, Tumkur which
reads as follows: While returning the records, I am
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directed to convey the approval of Government to initiate
acquisition proceedings under Karnataka Land Acquisition
(Company) Rules to acquire an extent of 15-00 acres of land
in S.No.49 of Maralur village, Tumkur taluk in favour of
State Government Employees Association, Tumkur.
Whatever may be said in the internal correspondence,
there is no evidence that the matter was proceeded with
under Part VII at all. After the first notification under
Section 4(1) was issued by letter dated 16th April 1988 sent
by the Under Secretary to the Deputy Commissioner, Tumkur,
it was stated: While enclosing the records received from
the Assistant Commissioner, Tumkur under his letter cited
above, I am directed to request you to send the
recommendation of the District Level Committee constituted
in G.O.No. RD 193 AQW 185, dated 20.1.1986, keeping in view
the guidelines issued in Circular of even number dated
23.4.1986, including the existent of land to be acquired to
provide house sites to its members.
It was pursuant to this directive that enquiries were
held and the District and State Level committees enquired
into and verified the appellants case before recommending
it. The material was relevant not only to the question of
public purpose under Section 4 but could also form the basis
of an approval under Section 3 (f)(vi). It is not disputed
that the material was considered when the second and the
third notifications under Section 4(1) were issued and both
these Notifications clearly state that the acquisition was
being made for a public purpose and not under Part VII of
the Act. Therefore, even if the acquisition was originally
commenced under Part-VII it was continued under Part II. A
converse situation occurred in Amarnath Ashram Trust Society
(supra), where although the notification under Section 4 (1)
was issued for a public purpose, the declaration under
Section 6 showed that it was under Part VII. The
declaration clearly referred to the inquiry made under Rule
4 of the Land Acquisition (Companies) Rules, 1963 and the
agreement entered into between the appellant-Society and the
State. Moreover, it was not pleaded by the State before the
High Court that the acquisition was for a public purpose and
not under Chapter VII of the Act. Therefore, it was held
that it was not open to the counsel for the state to raise a
contention which was contrary to the case pleaded before the
High Court. In this case the earlier notifications were not
cancelled nor is there any question of any agreement under
Section 41 being superseded by another. No further steps
could be taken on the earlier notifications only because of
administrative delay which crossed the period of limitation
provided under Section 6(1)(A). While the proceedings under
Section 4 (1) may come to an end as a matter of law, it does
not mean that the material on the basis of which the earlier
Notification was issued ceased to exist as a matter of fact.
Section 4 (1) read with Section 3 (f) (vi) of the Act
indicates that there are two separate functions to be
performed by the State Government. Under Section 4 (1) it
must prima facie come to the conclusion that the land
proposed to be acquired is required for a public purpose and
under Section 3 (f)(vi), such tentative conclusion must be
coupled with specific approval to acquire the land for the
purposes specified for the benefit of the registered society
or co- operative society, as the case may be. The Act does
not specify the material on which either the tentative
conclusion to Section 4 (1) or approval under Section
3(f)(vi) are to be based. In M/s Fomento Resorts and Hotels
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Ltd. V. Gustavo Ranato DA Cruz Pinto and Others 1985 (2)
SCC 152 it was held that the view of the Government that
land is needed either for public purpose or for a company
may be based either on independent enquiry or from reports
and information received by the government or even from an
application by the company concerned. The same sources may
provide information for granting prior approval under
Section 3(f) (vi). There is no prohibition on the State
Government acting on the basis of material already on record
provided the material is sufficient, relevant and genuine.
The material in this case although collected prior to the
issuance of the second Notification was all these and
according to the letter of approval, the matter was
minutely examined by the State Government in consultation
with the Law Department before granting the approval for the
third and final notification in 1991. The final submission
of the owner respondents was that the present acquisition
was in fact being made under Part VII and that none of the
provisions in Part-VII had been followed. The third
Notification ex facie states that it was issued for public
purposes under Part II of the Act. The finding of the
learned Single Judge also was: it is clear that the
acquisition proceedings are initiated under Part II of the
Act and not under Part VII of the Act. Furthermore, the
only stumbling-block raised by the respondent-owners all
along was the issue of the applicability of Section 3
(f)(vi) only because the acquisition was under Part II. It
was commenced and continued as such. The respondents
argument that the procedure followed was a hybrid procedure
of Part II and Part VII, therefore, is erroneous. From all
this, the ultimate position which emerges is that the
acquisition in favour of the appellant was properly
initiated by publication of the Notification under Section 4
(1) and by the declaration issued under Section 6. The
withdrawal of the acquisition under Section 48 (1) was
vitiated not only because the appellant was not heard but
also because the reason for withdrawal was wrong. The High
Court erred in dismissing the appellants writ petition.
The decision of the High Court is accordingly set aside.
The impugned Notification under Section 48(1) is quashed and
the appeal is allowed with costs.