Full Judgment Text
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PETITIONER:
GENERAL GOVT. SERVANTS CO-OPERATIVE HOUSING SOCIETY LTD.,AGR
Vs.
RESPONDENT:
WAHAB UDDIN & ORS. ETC. ETC.
DATE OF JUDGMENT02/03/1981
BENCH:
ISLAM, BAHARUL (J)
BENCH:
ISLAM, BAHARUL (J)
PATHAK, R.S.
REDDY, O. CHINNAPPA (J)
CITATION:
1981 AIR 866 1981 SCR (3) 46
1981 SCC (2) 352 1981 SCALE (1)630
CITATOR INFO :
D 1985 SC 736 (20)
ACT:
Land Acquisition Act-Sections 4, 5A and 6-Land acquired
for a company-Part VII of the Act, if attracted-Requirement
of rule 4 of Land Acquisition (Companies) Rules 1963-If
mandatory-"Person interested"-Meaning of.
HEADNOTE:
The land in dispute originally belonged to a person who
had migrated to Pakistan. After acquiring the lessee rights
in the land under section 12 of the Displaced Persons
(Compensation and Rehabilitation) Act, 1954 the Central
Government sold these rights by auction. The first
respondent purchased a plot of land and a sale certificate
was issued to him. The respondent, however could not get
possession of the land as a result of litigation resorted to
by the person in possession of the land. In the meantime the
State Government filed a suit against the Custodian of
Evacuee Property and the auction purchasers for possession;
but the suit and later appeal were dismissed.
Before the respondent obtained possession of the land a
notification under section 4 of the Land Acquisition Act was
issued seeking to acquire the land for construction of
residential houses for the members of the appellant society.
Having had no knowledge of the notification the respondent
did not file any objection under section 5A. After the issue
of notification under section 6 of the Act proceedings
relating to determination of compensation for the lands were
started. A notice was served on the respondent under section
9(3) of the Act calling upon him to prefer his claim for
compensation.
Allowing the respondent’s petition impugning the action
of the Government the High Court held that the State
Government could acquire the land only after complying with
the provisions of Chapter VII of the Act and the Land
Acquisition (Companies) Rules, 1963 and this not having been
done there was a breach of the principle of natural justice
and that secondly the respondent was a "person interested"
within the meaning of section 3(b) of the Act.
On the question whether the respondent was a ’person
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interested’ and whether the notification issued under
section 6 was valid.
^
HELD: The expression "person interested" is defined in
section 3(b) as including all persons claiming an interest
in compensation to be made on account of acquisition of land
under the Act. That the first respondent had interest in the
land in question is warranted by the following
circumstances: (i) a sale certificate had been issued to him
after he purchased the land in auction sale; (ii) the
Collector knew that he had purchased the land for he had
himself filed a suit for ejectment against him from the land
and that the suit was dismissed and the appeal against that
order was also dismissed; (iii) the Collector called upon
the respondent to prefer his claim under section 9(3) of the
Act which showed that
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the Collector had admitted the first respondent’s interest
in the land; and (iv) before the High Court the Collector
had not denied the respondent’s right to compensation.
Therefore, the first respondent was a "person interested"
within the meaning of section 3(b). [50 F-H]
2. The notification under section 6 is invalid for non-
compliance with rule 4 of the Rules. [54 G]
The appellant society is a "company" within the meaning
of section 3(e) of the Act. When the land was acquired for
the purpose of a company, Part VII of the Act is attracted
and the provisions of that Chapter have to be followed. Rule
4 is mandatory and unless the directions enjoined by this
rule are complied with the notification under section 6
would be invalid. Its compliance precedes the notification
under section 4 as well as compliance of section 6 of the
Act. [51 F-G]
In the instant case on receipt of the notice under
section 9(3) the respondent objected to the acquisition on
the grounds that the land or lessee rights having been
acquired by the Central Government under the provisions of
the Displaced Persons (Compensation and Rehabilitation) Act,
1954 could not be acquired by the State Government, and that
the mandatory procedure for acquisition of land for private
companies had not been followed. No inquiry report had been
submitted by the Collector. The report submitted was under
section 5A and not under rule 4. There had therefore been a
failure of justice. [54 C-F]
3. The appellant’s contention that the first
respondent’s claim was barred by limitation under sections
45(f) and 180 of the Tenancy Act, has no force because there
is no evidence to show that the requirements of the section
have been satisfied. That apart, this is a mixed question of
fact and law requiring investigation into facts. Since it
had not been taken before the High Court but sought to be
urged for the first time in this Court, it cannot be allowed
to be urged in an appeal by special leave under Article 136
of the Constitution. [50 C-D]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2085 of
1978 and 7-8 of 1979.
Appeals by special leave from the Judgment and Order
dated 18.5.1977 of the Allahabad High Court in C.M.W. Nos.
5061/73, 5063/73 and 5080/73.
G.C. Lal, D.B. Vohra and O.P. Tewari for the Appellants
in all the Appeals.
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Probir Mitra for R.1 in CAs. 2085/78, 8/79 and RR 1-2
in CA 7/79.
G.N. Dixit, and Sobha Dikshit for RR. 2 to 4 in CA
2085/78 RR 2-4 in CA 8/79 and RR 3&5 in CA 7/79.
E.C. Aggarwala for R.4 in CA 7/79 and R. 3 in CA 8/79.
The Judgment of the Court was delivered by
BAHARUL ISLAM, J. The above appeals arise out of land
acquisition proceedings and involve similar questions of
fact and the same
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question of law. This common judgment, therefore, will
dispose of all the three appeals. It will be sufficient if
we refer to the material facts of Civil Appeal No. 2085 of
1978 only.
2. The land involved, belonged to one Imam Khan as an
occupancy tenant. Before the partition of India, he migrated
to Pakistan, whereafter his rights in the lands were
declared evacuee property. Subsequently, in pursuance of a
notification issued under Section 12 of the Displaced
Persons (Compensation and Rehabilitation) Act, 1954, the
Central Government acquired the lessee rights. As a result
of the notification, these rights vested in the Central
Government free from all encumbrances. The Central
Government thereafter sold these rights by auctions in
August/September 1962. The first Respondent purchased a plot
of land for a sum of Rs. 21,700. He deposited the entire
amount with the Managing Officer, Evacuee Property, Agra. A
sale certificate was issued to him on September 12, 1962.
3. It appears that one Ramlal Lamba was in the possessi
on of the land in question. He was asked by the Managing
Officer, Evacuee Property, to vacate the land, and deliver
possession to the first respondent. Instead of delivering
possession of the land to the first respondent Lamba, filed
a Writ Petition under Article 226 of the Constitution in the
Punjab High Court at Delhi. The Writ Petition was dismissed
on 4.12.69. He then filed an appeal which was also dismissed
on 2.2.70. He then filed a suit in the Court of the Munsiff
Agra, for restraining the Managing Officer, Evacuee
Property, from interfering in his possession. Thus the first
respondent could not get possession of the land.
4. After the auction sale, the State of U. P.
(Respondent No. 2 herein) filed a suit under Section 171 of
U. P. Tenancy Act, 1939 (hereinafter ’the Tenancy Act’)
against the Custodian of the Evacuee Property, and the four
auction purchasers including the first respondent, for
possession. This suit was dismissed by the Assistant
Collector, Ist Class, on 24.3.69 on the ground that it was
not maintainable. An appeal was filed. This was also
dismissed on 24.10.70. Thus before the petitioner could
obtain possession of the land, the Collector of Agra
(Respondent No.3 herein) issued a notification under Section
4 of the Land Acquisition Act (hereinafter ’the Act’) on
March 1, 1970, notifying that the plots in dispute (and
several other plots) were intended to be acquired by the
State Government for construction of residential houses for
the members of the General Servants Co-operative Housing
Society Ltd., Agra, the appellant
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before us. The first respondent did not have any knowledge
or information of the said notification under Section 4 of
the Act and so he did not, as he could not, file any
objection under section 5A of the Act. The notification
under section 4 was followed by a notification under section
6 of the Act on May 4, 1973. After the said notifications,
proceedings relating to determination of compensation for
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the lands were started. In that connection the first
Respondent was served with a notice under section 9(3) of
the Act, calling upon him to prefer his claim for
compensation. Thereupon the first Respondent filed
objections, but before the objections were disposed of he
filed a writ petition before the High Court of Allahabad.
The High Court allowed the writ petition and struck down the
notification dated 5th May 1973, under Section 6 of the Act.
The High Court held that as the acquisition was made by the
State Government for the benefit of a Co-operative Society,
it could do so only after complying with the provisions of
Chapter VII of the Act, and the Land Acquisition (Companies)
Rules, 1963 (hereinafter called ’the rules’), but as the
State Government did not do so, there was a breach of the
principle of natural justice. Repelling the argument of the
appellant to the contrary, the High Court also held that the
first respondent was a ’person interested’ within the
meaning of section 3 (b) of the Act.
5. Respondents No. 2, 3 and 4 who are co-respondents
appearing through Mr. Dikshit before us have supported the
case of the appellant.
6. The first question for determination is whether the
first respondent is not a ’person interested’ within the
meaning of section 3(b) of the L.A. Act and as such he had
no locus standi to file the writ petition before the High
Court, as contended by the appellant.
Section 3 (b) of the Act is in the following terms
(material portions only):
"3. In this Act, unless there is something repugnant in
the subject or context:-
(a)..............
(b) the expression "person interested" includes all
persons claiming an interest in compensation to be made
on account of the acquisition of land under this Act;
and a person shall be deemed to be interested in land
if he is interested in an easement affecting the land."
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In support of the argument the appellant refers to
section 45 (f) and section 180 of the Tenancy Act, 1939.
Clause (f) of section 45 provides that the interest of the
tenant shall be extinguished where the tenant has been
deprived of possession and his right to recover possession
is barred by limitation. The limitation provided is for a
period of twelve years, for a suit for ejectment of a person
occupying the land without title and for damages-if the land
is contiguous to any other land lawfully occupied by such
other person-(a) if such person has, at the commencement of
the Tenancy Act, occupied the land for more than six years,
the period runs from the time the land holders first knew of
the unauthorised occupation. In any other case the period of
limitation is six years. This point which has been urged for
the first time before us is a mixed question of fact and
law. It does not appear to have been taken before the High
Court. A mixed question of law and fact needing
investigation into facts cannot be allowed to be urged for
the first time in an appeal by special leave under Art. 136
of the Constitution.
It is true that admittedly the first respondent was out
of possession at the relevant time but there is no evidence
before us to show whether or not the land in question was
contiguous to any other land occupied by the person who is
in possession and that his possession had been lawful. We
are therefore not in a position to accept the submission of
the appellant that the first respondent’s claim was barred
by limitation. On the contrary there is ample evidence
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before us to show that the first respondent had interest in
the land in question. We come to this conclusion from the
following circumstances:
(I) A sale certificate had been issued to the first
respondent after the purchase of the land in auction sale
held in 1962; (2) the Collector, Agra, knew that the first
respondent had purchased the land in auction, for he had
himself filed a suit for ejectment from the land in question
under section 171 of the Tenancy Act against the first
respondent, and that the suit was dismissed by the Assistant
Collector Ist Class, on 24th March, 1969; the appeal
preferred against the said order had also been dismissed by
the Commissioner on the 27th of October, 1970; (3) the
Collector issued notice under section 9 (3) of the Act
calling upon the first respondent to prefer his claim, if
any for compensation of the land acquired. (This amounts to
an admission of the first respondent’s interest in the land
by the Collector) and (4) that in the counter affidavit
filed by the Collector, in reply to the affidavit filed by
the first respondent before the High Court
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the claim of the petitioner to get compensation for the
rights acquired by the Government was not denied by the
appellant. We therefore agree with the High Court that the
first respondent was a ’person interested’ within the
meaning of clause (b) of section 3 of the Act.
7. The next point urged before us by the appellants is
that the first respondent in fact filed objection which was
inquired into and he was given an opportunity of being
heard. The High Court, therefore, it is contended, was not
right in holding that there was a breach of the principle of
natural justice. In our opinion, the real question, as urged
by the first respondent, is not whether there has been any
violation of any principle of natural justice but whether
Rule 4 of the Rules has been complied with by the Collector.
Sub-section (1) of Section 4 of the Act provides that
whenever it appears to the appropriate Government that land
in any locality is needed or is likely to be needed for any
public purpose a notification to that effect shall be
published in the official gazette and that he shall also
cause a public notice of the substance of the notification
to be given at convenient places in the said locality.
Section 5A of the Act provides that any person
interested in any land which has been notified under sub-
section (1) of section 4, as being needed or likely to be
needed for a public purpose or for a Company may, within
thirty days (twenty-one days according to the U.P.
amendment) after the issue of the notification object to the
acquisition of the land or of any land in the locality as
the case may be. Under section 3 (e), the expression
’Company’, inter alia, includes a society registered under
the Societies Registration Act, 1860 and a registered
society within the meaning of the Co-operative Societies
Act, 1912 or any other law relating to co-operative society
for the time being in force in any State. The appellant-The
General Govt. Servants Co-operative Housing Society Ltd.,
Agra, is a Company. The appellant has not contended to the
contrary. It is also not disputed that when land is acquired
for the purpose of a company, Part VII of the Act is
attracted and the provisions of that chapter have to be
followed.
Rule 4 of the Rules which is material and falls for our
interpretation runs thus:
"4. Appropriate Government to be satisfied with
regard to certain matters before initiating acquisition
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proceedings.- (1) Whenever a Company makes an
application to the appro-
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priate Government for acquisition of any land, that
Government shall direct the Collector to submit a
report to it on the following matters, namely:-
(i) that the Company has made its best endeavour to
find out lands in the locality suitable for the
purpose of the acquisition;
(ii) that the Company has made all reasonable efforts
to get such lands by negotiation with the persons
interested therein on payment of reasonable price
and such efforts have failed;
(iii) that the land proposed to be acquired is suitable
for the purpose;
(iv) that the area of land proposed to be acquired is
not excessive;
(v) that the Company is in a position to utilise land
expeditiously; and
(vi) where the land proposed to be acquired is good
agricultural land, that no alternative suitable
site can be found so as to avoid acquisition of
that land.
(2) The Collector shall, after giving the Company
a reasonable opportunity to make any representation in
this behalf, hold an enquiry into the matters referred
to in sub-rule (1) and while holding such enquiry he
shall,-
(i) in any case where the land proposed to be acquired
is agricultural land, consult the Senior
Agricultural Officer of the district whether or
not such land is good agricultural land ;
(ii) determine, having regard to the provisions of
sections 23 and 24 of the Act, the approximate
amount of compensation likely to be payable in
respect of the land which in the opinion of the
Collector, should be acquired for the Company ;
and
(iii) ascertain whether the Company offered a reasonable
price (not being less than the compensation so
determined), to the persons interested in the land
proposed to be acquired.
Explanation :-For the purpose of this rule "good
agricultural land" means any land which, considering
the level of agricultural production and the crop
pattern of the area in which
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it is situated, is of average or above average
productivity and includes a garden or grove land.
(3) As soon as may be after holding the enquiry
under sub-rule (2), the Collector shall submit a report
to the appropriate Government and a copy of the same
shall be forwarded by that Government to the Committee.
(4) No declaration shall be made by the
appropriate Government under section 6 of the Act
unless-
(i) the appropriate Government has consulted the
Committee and has considered the report submitted
under this rule and the report, if any submitted
under section 5A of the Act; and
(ii) the agreement under section 41 of the Act has been
executed by the Company.’
Sub-rule (1) requires the Government to direct the
Collector to submit a report to it on the matters enumerated
in clauses (i) to (vi) of the sub-rule (1) which is for the
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benefit of the Company. The purpose is to avoid acquisition
of land not suitable for a Company. Clause (ii) of sub-rule
(1) requires that the Company has to make all reasonable
efforts to get such lands by negotiation with the person
interested therein on payment of reasonable prices and that
such efforts have failed. The purpose of clause (ii) seems
to be to avoid unnecessary land acquisition proceedings and
payment of exorbitant prices. The purpose of clauses (iii),
(iv) and (v) is obvious. The purpose of clause (vi) is to
avoid acquisition of good agricultural land, when other
alternative land is available for the purpose. Subrule 2 of
rule 4 requires the Collector to give reasonable opportunity
to the Company so that the Collector may hold an inquiry
into the matters referred in sub-rule (1). The Collector has
to comply with Clauses (i), (ii) and (iii) of sub-rule 2
during the course of the inquiry under sub-rule (1). The
Collector under sub-rule 3 then has to send a copy of his
report of the inquiry to the appropriate Government and a
copy of the report has to be forwarded by the Government to
the Land Acquisition Committee constituted under Rule 3 for
the purpose of advising the Government in relation to
acquisition of land under Part VII of the Act, the duty of
the Committee being to advise the Government on all matters
relating to or arising out of acquisition of land under Part
VII of the Act (Sub-rule (5) of Rule 3). No declaration
shall be made by the
54
appropriate Government under section 6 of the Act unless the
Committee has been consulted by the Government and has
considered the report submitted by the Collector under
section 5A of the Act. In addition, under clause (ii) of
sub-rule (4) of rule 4, the Company has to execute an
agreement under section 41 of the Act. The above
consideration shows that rule 4 is mandatory; its compliance
is no idle formality, unless the directions enjoined by rule
4 are complied with, the notification under section 6 will
be invalid. A consideration of rule 4 also shows that its
compliance precedes the notification under section 4 as well
as compliance of section 6 of the Act.
8. In the instant case, as stated earlier, the first
respondent on receipt of the notice under section 9(3) of
the Act submitted a representation. After the
representation, a brief written note of the arguments was
also supplied (Annexure 6). The first respondent’s
objections, inter alia against the acquisition of the land
were: (1) that the land being that of the Government cannot
be legally acquired ; (2) that the land or lessee rights
having been once acquired by the Central Government under
the provisions of the Displaced Persons (Compensation and
Rehabilitation) Act, 1954, it cannot be acquired by the
State Government ; and (3) that the proceedings for the
acquisition of the land for the appellant were illegal as
the mandatory procedure for acquisition of land for private
companies has not been followed. It was also stated in the
representation that no efforts to purchase the rights of the
first respondent by negotiation were made. The inquiry
report submitted by Collector does not show that he applied
his mind to the provisions of rule 4 as stated above, or to
the objections of the first respondent. In fact there was no
report under rule 4. The report that was submitted was one
under section 5A of the Act. We have examined this aspect of
the matter to see that although the enquiry was belated and
not in accordance with law, there has been no failure of
justice. In our opinion there has been failure of justice.
Agreeing with the finding of the High Court, although for
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different reasons, we hold that the notification under
section 6 is invalid for non-compliance of rule 4 of the
Rules. As a result we dismiss the appeals with costs.
P.B.R. Appeals dismissed.
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