Full Judgment Text
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PETITIONER:
AMRITSAR IMPROVEMENT TRUST ETC.
Vs.
RESPONDENT:
BALDEVA INDER SINGH AND ORS. ETC.
DATE OF JUDGMENT17/11/1971
BENCH:
HEGDE, K.S.
BENCH:
HEGDE, K.S.
GROVER, A.N.
CITATION:
1972 AIR 182 1972 SCR (2) 386
1972 SCC (1) 165
ACT:
Punjab Town Improvement Act 1922--Scheme prepared by
Amritsar Improvement Trust under ss. 24, 25 & 28 of Act and
sanctioned by Government under s. 41--Scheme purporting to
be ’development scheme’ and ’housing accommodation scheme’
including areas outside municipal limits--Scheme was invalid
since it was an expansion scheme--Acceptance by Government
did not make scheme valid--Being one and indivisible scheme
must be struck down as a whole.
HEADNOTE:
The Amritsar Improvement Trust by its resolution dated April
19, 1962 framed a development-cum-housing accommodation
scheme under ss. 24, 25 and 28 of the Punjab Town
Improvement Act 1922. After notice was issued under s. 36
of the Act several objections were received. the objections
were rejected by the Improvement Trust. Thereafter the
scheme was submitted to the government and sanctioned by it
under s. 41. The High Court in writ petitions filed before
it challenging the scheme held that the Improvement Trust
had no power to include in a ’development scheme’ areas
outside the municipality for the purpose of development. In
appeals to this Court against the judgment of the High
Court,
HELD : (i) The legislature has given specific names to the
schemes to be prepared by the Improvement Trust. Hence when
the Improvement Trust says that it has prepared ’a
development scheme’, it is not possible to hold that in fact
it has prepared ’an expansion scheme’. The power conferred
on the Improvement Trust is not a plenary power. It is a
power that has to be exercised in accordance with the
conditions laid down in the Act. If the Improvement Trust
wanted to prepare ’at,. expansion scheme’ it should have
formed an opinion in the terms of s. 24(2) "that it is
expedient and for the public advantage to promote and
control the development of and to provide for the expansion
of a municipality in a locality adjacent thereto within the
local area of such trust". [391 H]
From the resolutions passed by the improvement Trust it did
not appear that it had formed any such opinion. Under these
circumstances it was not possible to accept the contention
of the appellants that as the resolutions of the Improvement
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Trust refer to s. 24 it could be concluded that the scheme
prepared was ’an expansion scheme’. The resolutions of the
Improvement Trust did not merely refer to s. 24. They also
said that the scheme prepared was ’a development scheme’ cum
’housing scheme’. It these resolutions were read as a whole
it was clear that the Improvement Trust purported to Act
under its power under P.. 24(1) which dealt with
’development scheme’ and, s. 25 which dealt with ’housing
accommodation scheme’ and not under s. 24(2). [392 B-C]
(ii) it is a well established principle that if an authority
has a valid power to do a particular act, the fact that it
purported to do that act under a provision of law which did
not confer power to do that act, would not invalidate that
act. But that rule was inapplicable to the facts of this
particular case. [393 B.]
387
Before taking action under s. 24(2), the Improvement Trust
had to form a particular opinion. The formation of that
opinion was a condition precedent. Until the Improvement
Trust forms that opinion it is incompetent to take action
under that section. The Act has not conferred any blanket
power on the Improvement Trust, to frame any scheme which it
thought fit. That being so it was not possible to uphold
the contention of the appellants that the impugned scheme
could be traced to a valid power. [393 C-D]
L. Hazari Mal Kuthiala v. Income-tax Officer, Special Circle
Ambala Cantt. and Anr., 41 I.T.R. 12 and Hukumchand Mills
Ltd. v. State of Madhya Pradesh & Anr.. 52 I.T.R. 583,
distinguished.
(iii) The schemes framed by the Improvement Trusts do not
come into force automatically. They have to be sanctioned
by the Government. Hence it is necessary for the government
to know before sanctioning the scheme as to what the scheme
is, so that it may examine whether that scheme is necessary
or feasible. In the present case the government was
informed that the scheme in question was ’a development-cum-
housing accommodation scheme’. It approved the scheme. It
cannot be said whether it would have sanctioned ’an
expansion scheme’. The mere acceptance of the scheme by the
Government did not alter the legal position. [393 B-F]
(iv) The scheme was one and indivisible. It was not
possible to hold that it was partly valid and partly
invalid. It had to stand or fall as a whole. [394 A-B]
The appeals must accordingly be dismissed.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeals No. 1418. 1419
and 1662 of 1968.
Appeals from the judgments and orders dated July 29, 1966
and January 3, 1966 of he Punjab High Court in Civil Writ
Nos. 2052 and 2053 of 1965.
S. K. Mehta, K. L. Mehta and K. R. Nagaraja, for the appel-
lant (in C.As.Nos. 1418 and 1419 of 198).
V. C. Mahajan. and R. N. Sachthey, for the appellant (in
C.A. No. 1662 of 1968).
Bishan Narain, O. P. Sharma, B. Datta, and J. B. Dadaclwni.
for respondents Nos. 1 to 5 (in C.As. Nos. 141 8 nd 1662 of
1968).
Frank Anthony and E. C. Agrawala, for respondent No. 1 (in
C.A. No. 1419 of 1968).
The Judgment of the Court was delivered
Hegde, J. In these appeals by certificates, just one
question of law arises for decision and that question is
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whether the scheme prepared by the Amrittsar Improvement
Trust under ss. 24, 25 and 28 and sanctioned by the
government under S. 41 of the Punjab Town Improvement Act
1922 (to be hereinafter called the Act)
388
is an invalid scheme. The High Court of Punjab and Haryana
has held in two writ petitions that the scheme in question
is an invalid scheme and has consequently set aside that
scheme. Aggrieved by those decisions, the Amritsar
Improvement Trust as well as the State government of Punjab
have come up in appeal.
The Amritsar Improvement Trust at its meeting held on April
19, 1962 resolved as follows:
"70. Item
For consideration. Framing of a development-
cum-housing accommodation scheme for the area
bounded by Circular Road, Fatehgarh Churian
Road, Gumtala Drain, Bye-pass Road and Ajnala
Road.
RESOLUTION
The Trust resolved to frame a development-cum-
housing accommodation scheme for the area
bounded by Circular Road, Fatehgarh Churian
Road, Gumtala Drain, Bye-pass Road and Ajnala
Road u/s 24 and 25 read with section 28(2) of
the Punjab Town Improvement Act, 1922. The
Area will be developed as a Commercial-cum-
residential area and an industrial colony will
also be provided. Sites will be ear-marked
for the construction of houses for services
men and also for labour and harijan colonies.
The scheme should now be notified under s. 36
of the Punjab Town Improvement Act, 1922, for
inviting objections."
That resolution was amended by the Improvement Trust at its
meeting held on May 1, 1962. The amendment reads thus
"92. Item.
Reference Trust Resolution No. 70 dated 19-4-
1962.
Dev. Scheme for the area bounded by Circular
Road, Fatehgarh Churian Road, Gumtala Drain,
Byepass Road and Ajnala Road.
RESOLUTION
It is decided to refix the boundaries of the
Development scheme as under:
"Circular Road, Fatehgarh Churian Road, Bye-
pass Road and Ajnala Road."
Resolution No. 70 dated 19-4-1962 be and is
amended accordingly."
389
Thereafter on May 4, 1962, it issued the following notice
under s. 36 of the Act.
"The Amritsar Improvement Trust, Amritsar.
Notice under section 36 of the Punjab Town Im-
provement Act, 1922.
Notice is hereby given that in accordance with
Resolution No. 70 dated 19-4-1962, as amended
by Resolution No. 92 dated 1-5-1962, passed by
the Amritsar Improvement Amritsar, the Trust
has framed a development-cum-Housing
accommodation scheme for an area measuring
approximately 860 acers, bounded by Circular
Road, Fatehgarli Churian Road, By-pass Road
and Ajnala Road, within the local area of the
Amritsar Improvement Trust, under section 24
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and 25 read with section 28(2) of the Punjab
Town Improvement Act, 1922. The area will be
developed as Commercial-cum-residential area
and an industrial colony will also be
provided. Sites will be ear-marked for the
construction of colonies for service-men and
also for labourers and Harijans. The
boundaries of the scheme are as under:
NORTH.-Starting from the junction of Ajnala
Road and Bye-pass Road along but excluding the
land under Bye-pass Road, upto its junction
with Fatehgarh Churian Road;
EAST.-Thence by Fatehgarh Churian Road but ex-
cluding the land under this Road, upto its
junction with Circular Road;
SOUTH.-Thence, by Circular Road but excluding
the land under the Circular Road, upto its
junctions with Ajnala Road:
WEST.-Thence by Ajnala Road but excluding the
land under the Ajnala Road, upto its junction
with Byepass Road, the point of start.
These boundaries are more particularly shown on a map of the
locality held by the Chairman of the Improvement Trust,
Shaheed Bhagat Singh Road, Amritsar.
2. Details of the Scheme and a statement of the land to be
acquired and the general map of the locality comprised in
the scheme may be inspected at the office of the Trust,
Shaheed Bhagat Singh Road, Amritsar, during office hours, on
any working day.
390
3. Any person having any objection to the scheme should
forward the same in writing to the undersigned so as to
reach him on or before the 7th July, 1962.
Dated, 4th May, 1962.
Sd/- Shashpal Singh,
Chairman,
Amritsar Improvement Trust, Amritsar.
In response to that notice. several interested persons
submitted their objections. One of the objectors pleaded
that the Improvement Trust had no competence to include in
"a development scheme" areas outside the municipality. The
Improvement Trust rejected all the objections and approved
the prepared scheme. Thereafter the same was submitted to
the government and the government sanctioned the same.
There is no dispute that the impugned scheme includes both
areas inside the Amritsar municipality as well as areas
outside that municipality. It is also seen from the
resolutions passed by the Improvement Trust as well as the
notice issued by it under S. 36 of the, Act that the
Improvement Trust purported to frame "a development" cum
"housing accommodation scheme". It did not purport to frame
"an expansion scheme".
The High Court has come to the conclusion that the Improve-
ment Trust had no power to include in "a development scheme"
areas outside the municipal limits for the purpose of
development.
From the resolutions passed by the Improvement Trust, in
particular the resolution passed by it on May 1, 1962, it is
seen that the areas bounded by "Circular Road, Fatehgarh
Churian Road, Bye-pass Road and Ajnala Road" were included
for the purpose of development. It is conceded that the
area included within those boundaries partly lies within the
municipal limits and partly outside the municipal limits.
It is urged on behalf of the writ petitioners that the areas
outside the municipal limits can be taken over either under
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"an expansion scheme" or under "a housing accommodation
scheme". They cannot be taken over for "a development
scheme". There is force in this contention.
Let us now read the relevant provisions. Section 24 of tile
Act provides
"(1) The trust may, for the purpose of
development of any locality within the
municipal limits contained in its local area,
prepare "a development scheme", and
391
(2) Such trust may, if it is of opinion that
it is expedient and for the public advantage
to promote and control the development of and
to provide for the expansion of a municipality
in any locality adjacent thereto. within the
local area of such trust prepare "an expansion
scheme".
(3) "A development scheme" or "an expansion
scheme" may provide for the lay-out of the
locality to be developed, the purposes for
which particular portions of such locality are
to be utilised, the prescribed street
alignment and the building line on each side
of the streets proposed in such locality, the
drainage of insanitary localities and such
other details as may appear desirable."
Section 24(1) deals with preparation of "a development
scheme". Section 24(2) deals with the preparation of "an
expansion scheme". Section 24(3) prescribes what all things
could be included in "a development scheme" or "an expansion
scheme". Section 25 reads thus :
"lf the trust is of opinion that it is
expedient and for the public advantage to
provide housing accommodation for any class of
the inhabitants within its local area such
trust may frame "a housing accommodation
scheme" for the purpose aforesaid........"
(Proviso omitted).
Section 28(1) provides that the scheme under the Act may
combine one or more types of scheme or any special features
thereof.
It is clear from s. 24(1) that "a development scheme" cannot
include areas outside the municipal limits. Therefore if a
scheme includes both areas outside municipal limits and
inside its limits, such a scheme cannot be prepared under s.
24(1). As seen earlier, from the resolutions of the
Improvement Trust, it is clear that it purported to prepare
"a development scheme" cum "housing accommodation scheme".
It did not purport to prepare "expansion scheme".
The legislature has given specific names to the various
schemes to be prepared by the Improvement Trust. Hence when
the Improvement Trust says that it has prepared "a
development scheme", it is not possible to hold that in fact
it has prepared "an expansion scheme." The power conferred
on the lmprovement Trust is not a plenary power. It is a
power that has to be exercised in accordance with the
conditions laid down in the Act. If the Improvement Trust
desired to prepare "an expansion scheme"
392
it should have formed an opinion "that it is expedient and
for the public advantage to promote and control the
development of and to provide for the expansion of a
municipality in a locality adjacent thereto within the local
area of such trust".
From the resolutions passed by the Improvement Trust, it
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does not appear that it had formed any such opinion. Under
these circumstances, it is not possible to accept the
contention of the appellants that as the resolutions of the
Improvement Trust refer to S. 24, we may conclude that the
scheme prepared is "an expansion scheme". The resolutions
of the Improvement Trust do not merely refer to s. 24. They
also say that scheme prepared is "a development scheme" cum
"housing scheme". If these resolutions are read as a whole,
it is clear that the Improvement Trust purported to act
under its power under s. 24(1) and 25 and not under S.
24(2).
It was urged on behalf of the appellants that if the
exercise of a power can be traced to a valid power, the fact
that the power is purported to have been exercised under
non-existing power, does not invalidate the exercise of that
power. In that connection reliance was placed on the
decisions of this Court in L. Hazari Mal Kuthiala v. Income-
tax Officer, Special Circle Ambala Cantt. and anr. (1) and
Hukumchand Mills Ltd. v. State of Madhya Pradesh and anr.
(2).
The former case considered the validity of a transfer of an
income-tax proceeding ordered by the Commissioner of Income-
tax, Punjab. He purported to make the order in question
under s. 5(5) and 7(A) of the Indian Income--tax Act, 1922
instead of making that order under S. 5(5) of the Patiala
Income-tax Act. Under both those provisions, he had similar
powers. This Court held that once it is established that
the Commissioner had power to transfer the proceeding, the
fact that he purported to exercise that power under a wrong
provision of law would not vitiate his order. The exercise
of that power would be referable to a jurisdiction which
conferred validity upon it and not to a jurisdiction under
which it would be nugatory.
In Hukumchand Mills case(2) this Court again ruled that it
is well established that wrong reference to the power under
which action was taken by the government would not per se
vitiate that action if it could be justified under some
other power under which the government could lawfully do
that act : and therefore, even though the notification dated
December 28, 1949, by which amendments were made to the
Indore Industrial Tax Rules, 1927, was
(1) 41 I.T.R. 12.
(2) 52 I.T.R. 583.
393
purported to be made under rule 17 of those rules, the
amendments were valid because the government had power to
make the amendments under s. 5(1) and (3) of Act I of 1948.
Failure to refer to s. 5 did not invalidate the
notification.
The legal principle enunciated in those decisions is a well
established principle. If an authority has a valid power to
do a particular act, the fact that it purported to do that
act under a provision of law which did not confer power to
do that act, would not invalidate the Act. But that rule is
inapplicable to the, facts of the present case.
Before taking action under s. 24(2), the Improvement Trust
had to form a particular opinion. The formation of ,hat
opinion is a condition precedent. Until the Improvement
Trust forms that opinion, it is incompetent to take action
under that section. The Act has not conferred any blanket
power on the Improvement Trust, to frame any scheme which it
thought fit. That being so, it is not possible to uphold
the contention of the appellants that the impugned scheme
can be traced to a valid power.
There is yet another difficulty in the way of the
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appellants. The schemes framed by Improvement Trusts do not
come into force automatically. They have to be sanctioned
by the government. The government may accept them. It may
reject them. It may amend them and it may even send them
back to the Improvement Trusts for reconsideration. Hence,
it is necessary for the government to know before
sanctioning the scheme as to what the scheme is, so that it
may examine whether that scheme is necessary or feasible.
Unless’ the government is informed as to the nature of the
scheme, it would not be possible for the government to
consider whether the scheme should be sanctioned or not. In
the present case, the government was informed that the
scheme in question was "a development cum housing
accommodation scheme,. It has approved that scheme. We do
not know whether it would have sanctioned "an expansion
scheme".
Mr. V. C. Mahajan learned counsel for the State of Punjab
contends that the government must be presumed to have known
the true facts before sanctioning the scheme and the
government has no objection for the scheme in question.
Even if we accept that contention that does not alter the
legal position. We should not mix up the facts of this case
with the scope of the relevant provisions in the Act. We
cannot confine our attention to the facts of a particular
case. Our conclusion that the power conferred on the
Improvement Trust is a limited power is reached on the basis
of the nature of the power conferred and not on the basis of
the facts
394
of this case. The fact that the government is prepared to
bless a particular scheme does not change the nature of the
power.
The scheme before us is one and indivisible. It is not
possible to hold that it is partly valid and partly invalid.
It has to stand or fall as a whole.
For the reasons mentioned above, these appeals are dismissed
with costs-hearing fee one set.
G.C. Appeals dismissed.
395