Full Judgment Text
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PETITIONER:
KRISHI UTPADAN MANDI SAMITI, MUZAFFARNAGAR (U.P.), ETC.
Vs.
RESPONDENT:
RATAN PRAKASH MANGAL & ORS., ETC.
DATE OF JUDGMENT06/05/1988
BENCH:
OJHA, N.D. (J)
BENCH:
OJHA, N.D. (J)
VENKATARAMIAH, E.S. (J)
CITATION:
1988 AIR 1459 1988 SCR Supl. (1) 182
1988 SCC (3) 225 JT 1988 (2) 549
1988 SCALE (1)1170
ACT:
Land Acquisition Act, 1894 Challenging notification
issued under section 4(1) read with section 17(4) and
consequential notification issued under section 6-of-For
acquisition of plot of land.
HEADNOTE:
These two appeals-Civil Appeal No. 3446 of 1987 and
Civil Appeal No. 3447 of 1987-were filed in this Court
against the judgment of the High Court in the Writ Petition
No. 6789 of 1982. Ratan Prakash Mangal and Kuldip Singh,
respondents Nos. 1 and 2 in the Civil Appeal No. 3446 of
1987 and the appellants in Civil Appeal No. 3447 of 1987,
had filed the said writ petition challenging a notification
dated 20th May, 1982, issued under section 4(1) read with
section 17(4) of the Land Acquisition Act, 1894 (the Act)
and also the consequential notification dated 21st May,
1982, issued under section 6 of the Act with regard to a
plot No. 289. The notification under section 4(1) of the Act
was quashed in part in so far as it invoked Section 17(4) of
the Act, and the notification under section 6 was quashed as
a whole with regard to the said plotNo. 289. The Civil
Appeal No. 3446 of 1987 was preferred by Krishi Utpadan
Mandi Samiti, Muzaffar Nagar for which the said plot had
been acquired, for setting aside the judgment of the High
Court. Civil Appeal No. 3447 of 1987 was preferred by Ratan
Prakash Mangal and Kuldip Singh afore-mentioned hereinafter
referred to as respondents Nos. 1 & 2 asserting that the
notification under section 4(1) should have been quashed by
the High Court in its entirety and not only in so far it
invoked section 17(4) of the Act.
Initially, a Notification dated 20th March, 1975 was
issued under section 4(1) of the Act for acquiring land,
including the plot No. 289, for construction of a market
yard for the appellant Krishi Utpadan Mandi Samiti. Later,
this Notification was superseded by another Notification
dated 30th August, 1975 issued under section 4(1) with
regard to land which did not include the said plot.
Subsequently, another Notification dated 26th October, 1978,
was issued under section 4(1) read with Section 17(4) of the
Act with regard to land, including the plot abovementioned.
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The Notification dated 26th October, 1978 was followed by
183
a Notification dated 27th October, under section 6.
Prior to the issue of these Notifications, respondents
Nos. 1 and 2 had purchased the said plot No. 289. The said
respondents Nos. 1 and 2 had challenged the Notifications
dated 26th October, 1978 and 27th October, 1978 by a writ
petition in the High Court. The High Court had quashed the
two Notifications in so far as Plot No. 289 was concerned.
This Judgment of the High Court had been challenged by
Krishi Utpadan Mandi Samiti before this Court in Civil
Appeal No. 2970 of 1979.
This Court had held that even though the quashing of
the Notification under Section 6 had been justified, the
High Court had not been right in quashing the Notification
under section 4(1) in its entirety, and had set aside the
Judgment of the High Court in so far as it had quashed the
Notification under section 4(1) in its entirety, while
maintaining the rest of the Judgment with a direction
regarding inquiry under Section 5A into the objections of
the respondents Nos. 1 and 2 to the proposed acquisition
etc. In pursuance of the said direction, inquiry under
section 5A had been made and the Land Acquisition Officer
had submitted a report on 20th January, 1981, after about 15
months of the direction above-said of this Court, to the
effect that the Plot No. 289 might be exempted from
acquisition. The Government did not agree with the said
report and issued the Notifications impugned in present
appeals.
Allowing Civil Appeal No. 3446 of 1987, and dismissing
Civil Appeal No. 3447 of 1987, the Court,
^
HELD: There was no doubt with regard to the legal
position that the Report dated 20th January, 1981 of the
Land Acquisition Officer was not binding on the State
Government and it was still open to it to continue the
proceedings for the acquisition of the Plot No. 289
notwithstanding the said report. The Government had its
reason why in place of issuing a Notification under section
6(1) of the Act in continuation of the Notification dated
26th October, 1978 under section 4(1), fresh notifications
under section 4 and 6 had to be issued as also the reason
for the delay in issuing the fresh Notifications, as was
apparent from the record. As regards the submission that
section 17(4) of the Act had been erroneously invoked in
fresh Notification under section 4(1) dated 20th May, 1982
also and that inquiry under Section 5A had again to be made
before issuing this Notification, it was enough to point out
that once an inquiry under the said section had already been
made and the parties had been given full opportunity to
substantiate their case in the enquiry and the State
Government had not been inclined to agree with the
184
report of the Land Acquisition Officer submitted in
pursuance of that inquiry, it would have been a futile
exercise to repeat the whole performance again. After the
issue of the earlier Notification dated 26th October, 1978,
a period of nearly 3 1/2 years had expired when the fresh
Notification dated 20th May, 1982 above-said was issued and
apparently the necessity to acquire the plot No. 289 during
this period became more acute due to this delay. Further, as
stated in the said Notification itself, the urgency had
become more imminent on account of the direction issued by
this Court on 2nd March, 1982 in Writ Petition No. 1318 of
1982 filed by the traders in gur, khandseri and foodgrains,
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Muzaffar Nagar, challenging the Notification under Section
7(2)(b) of the U.P. Act No. 25 of 1964. Consequently, it was
diffcult to hold that the opinion of the State Government
that it was a fit case to invoke section 17(4) of the Act
was invalid on the ground that there was no basis or
material in support of the opinion. On the facts of the
case, it was not possible to hold that the Notification
dated 20th May, 1982 had been issued by the State Government
in colourable exercise of its power. [194A-F]
The Notification dated 20th May, 1982 and 21st May,
1982 had not been challenged by respondents Nos. 1 and 2 on
the basis of mala fides of any particular officer of the
State Government. What was urged was that it was a case of
legal mala fides inasmuch as in issuing the said fresh
Notification dated 20th May, 1982, an attempt had been made
by the State Government to circumvent the direction of this
Court issued in the Civil Appeal No. 2970 of 1979 to make
inquiry under Section 5A of the Act and to proceed
thereafter in accordance with law, the State Government did
make an inquiry under Section 5A of the Act in pursuance of
the direction of this Court after giving full opportunity to
the concerned parties to substantiate their case. It was
difficult to agree with the submission of respondents 1 and
2 that the government attempted to circumvent the direction
of this Court. A case of legal mala fide was not made out.
[194G-H; 195B]
The Government all through was of the opinion that Plot
No. 289 did not deserve to be released from acquisition.
Also, this plea lost significance and became almost of
academic value inasmuch as the State Government had not
issued a notification under section 6(1) of the Act in
continuation of the Notification dated 26th October, 1978
under Section 4(1). After the issue of the fresh
Notification what was really to be seen was whether there
was justification for invoking section 17(4) of Act or not.
There was such a justification. There had been a material
change in the circumstances after the report of the Land
Acquisition
185
Officer dated 20th January, 1981, to justify Section 17(4)
of the Act being invoked and to dispense with a further
inquiry under section 5A of the Act. [196D-E; 198C]
The submission of the respondents 1 and 2 about the
lack of application of mind before issuing the Notification
dated 20th May, 1982 with regard to plot No. 289 had no
substance, as indicated by the original record produced by
counsel for the State Government. The effect of issuing a
fresh Notification under Section 4(1) and the delay in
issuing it had benefited the respondents 1 and 2 inasmuch as
now they would be entitled to compensation not on the basis
of market value of plot No. 289 as on 26.10.78 when the
earlier Notification under Section 4(1) was issued but as on
20th May, 1982 when the fresh Notification under the said
section was issued. [200G-H; 201A]
Civil Appeal No. 3446 of 1987 was allowed and the
judgment of the High Court in the Writ Petition No. 6789 of
1982 was set aside, and as a consequence, Civil Appeal No.
3447 of 1987 was dismissed. [201B]
State of Punjab v. Gurdial Singh & Ors., [1980] 1 SCR
1071; The Collector (District Magistrate) Allahabad and Anr.
v. Raja Ram Jaiswal, etc., [1985] 3 S.C.R. 995; P.L.
Lakhanpal v. Union of India & Ors., [1967] 1 SCR 443;
Siemens Engineering & Manufacturing Co. of India Limited v.
Union of India & Anr., [1976] Suppl. S.C.R. 489; Narayan
Govind Gavate v. State of Maharashtra, [1977] 1 S.C.R. 763
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and State of U.P. v. Pista Devi, [1986] 4 S.C.C. 251,
referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3446 &
3447 of 1987.
From the Judgment and Order dated 11.3.87 of the High
Court of Allahabad in Civil Misc. Writ Petition No. 6789 of
1982.
Satish Chandra, Ms. Purnima Bhat and E.C. Agarwala for
the Appellants.
P.P. Rao, B.D. Agarwal, P.K. Chakraverty, Ms. Sandhya
Goswami and R.C. Verma for the Respondents.
The Judgment of the Court was delivered by
OJHA, J. These two appeals have been preferred against
the judgment dated 11th March, 1987 of the Allahabad High
Court in Writ
186
Petition No. 6789 of 1982. In the said writ petition a
Notification dated 20th May, 1982 issued under Section 4(1)
read with Section 17(4) of the Land Acquisition Act, 1894
(hereinafter referred to as the Act) and also the
consequential Notification dated 21st May, 1982 under
Section 6 of the Act with regard to Plot No. 289 with an
area of 3 bighas 14 biswa situate in village Kukra, District
Muzaffarnagar in the State of Uttar Pradesh were challenged
by Ratan Prakash Mangal and Kuldeep Singh who are
Respondents 1 and 2 in Civil Appeal No. 3446 of 1987 and the
appellants in Civil Appeal No. 3447 of 1987. For the sake of
convenience these two persons shall hereinafter be referred
to as Respondents 1 and 2. The Notification under Section
4(1) of the Act was quashed in part in so far as it invoked
Section 17(4) of the Act and thereby dispensed with inquiry
under Section 5A of the Act whereas the Notification under
Section 6 was quashed as a whole with regard to the
aforesaid Plot No. 289. Civil Appeal No. 3446 of 1987 has
been preferred by the Krishi Utpadan Mandi Samiti,
Muzaffarnagar for whom the aforesaid plot had been acquired
with a prayer that the judgment of the High Court may be set
aside. Civil Appeal No. 3447 of 1987 on the other hand has
been preferred by Respondents 1 and 2 asserting that even
the Notification under Section 4(1) of the Act should have
been quashed by the High Court in its entirety and not only
in so far as it invoked Section 17(4) of the Act.
Before dealing with the respective submissions made by
learned counsel for the parties it is necessary to give some
more facts. Initially a Notification dated 20th March, 1975
was issued under Section 4(1) of the Act for acquiring
nearly 80 acres of land for the public purpose of
construction of a market yard for the appellant, Krishi
Utpadan Mandi Samiti, Muzaffarnagar. About 5 months
thereafter, however, this Notification was superseded and
another Notification was issued under Section 4(1) with
regard to only 60 acres of land. The Notification issued on
20th March, 1975 included Plot No. 289 aforesaid whereas the
subsequent Notification which is dated 30th August, 1975 did
not include the said plot along with several other plots.
Subsequently, however, another Notification was issued on
26th October, 1978 under Section 4(1) read with Section
17(4) of the Act with regard to 19.47 acres of land
including Plot No. 289. This Notification really seems to be
with regard to that portion of land which even though
included in the earlier Notification dated 20th March, 1975
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had been excluded in the subsequent Notification dated 30th
August, 1975. The Notification dated 26th October, 1978 was
followed by a Notification under Section 6 dated 27th
October, 1978. About four months prior to the issue of these
Notifications Respondents 1 and 2 had purchased
187
Plot No. 289 aforesaid on 7th June, 1978, The purpose for
which Respondents 1 and 2 purchased Plot No. 289 was shown
by them in their writ petition filed before the High Court
as construction of a residential colony. According to them
in furtherance of that purpose they executed three sale
deeds one each on 10th November, 1978, 16th November, 1978
and 7th December, 1978. The first of these three sale deeds
had been executed in favour of one Smt. Dhanwanti Agarwal,
the second one in favour of Smt. Santosh Kumari and the
third one in favour of Shri Janardhan Das and Ram Kumar. The
writ petition filed by Respondents 1 and 2 in the High Court
indicates that Smt. Dhanwanti Agarwal and Smt. Santosh
Kumari were wives of two gazetted officers and the third
purchaser Ram Kumar too was a Government servant.
The Respondents 1 and 2 challenged the Notification
dated 26th October, 1978 and 27th October, 1978 referred to
above before the High Court in Writ Petition No. 163 of
1979. The plea raised by them was that there was no urgency
and consequently the inquiry contemplated by Section 5-A of
the Act could not be dispensed with by invoking Section
17(4) thereof. This plea found favour with the High Court
and the two Notifications mentioned above were quashed on
6th June, 1979 in so far as Plot No. 289 was concerned. This
judgment of the High Court was challenged by the Krishi
Utpadan Mandi Samiti, Muzaffarnagar before this Court in
Civil Appeal No. 2970 of 1979. This Court agreed with the
High Court in so far as it had held that the urgency clause
had been wrongly applied. But it was held that on that
ground even though quashing of the Notification under
Section 6 of the Act was justified the High Court was not
right in quashing the Notification under Section 4(1) in its
entirety. On this view the appeal was allowed in part and
the judgment of the High Court was set aside in so far as it
quashed the Notification under Section 4(1) of the Act in
its entirety. The rest of the judgment was, however,
maintained with a direction "that copies of the
Notifications be served personally on Respondents Nos. 1 and
2 and their transferees so that Respondents Nos. 1 and 2 and
their transferees may have an opportunity to file their
objections to the proposed acquisition within three weeks
from the date of service of the copy of the notification
upon each of them. The appropriate authority will then hold
an inquiry into the objections under Section 5A and proceed
with the matter in accordance with law. Since the appellant
has obtained possession of the land from Respondent Nos. 1
and 2 and their transferees by invoking the urgency clause
which has been set aside, the appellant will restore
possession of the same to Respondents Nos. 1 and 2 and their
transferees within a week from today."
188
In pursuance of the aforesaid direction inquiry under
Section 5A of the Act was made and the Land Acquisition
Officer after giving the parties an opportunity to file
their objections and produce evidence and hearing the
arguments of their learned counsel, submitted a report on
20th January, 1981, that is, after about 15 months of the
direction referred to above issued by this Court in Civil
Appeal No. 2970 of 1979. The report submitted by the Land
Acquisition Officer was to the effect that Plot No. 289 may
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be exempted from acquisition. In submitting the said report,
a copy of which has been placed on record, it appears that
the Land Acquisition Officer was impressed mainly by two
circumstances: (1) That Smt. Dhanwanti Agarwal and Smt.
Santosh Kumari who had purchased portions of Plot No. 289
had made a declaration saying that there was no house in
their names in Muzaffarnagar and (2) that even though Mandi
Samiti had constructed a building it was lying idle inasmuch
as no trader was prepared to shift to these premises. The
Government, as is apparent from the counter-affidavit filed
on its behalf in this Court as also from the original record
which was produced before us, did not seem to agree with the
report of the Land Acquisition Officer and issued the
Notifications which are the subject-matter of the present
appeals. We shall deal with the details in this behalf as
also with regard to the delay between 20th January, 1981,
the date of the report and 20th May, 1982, the date of the
issue of Notification under Section 4(1) of the Act while
considering the submissions made by learned counsel for the
parties on this point.
It was urged by learned counsel for the appellant that
even Plot No. 289 was urgently needed by the appellant and
the High Court has erred in taking a contrary view and
holding that dispensing with inquiry under Section 5A was
not bona fide or rational. For the Respondents 1 and 2 on
the other hand it was urged by their learned counsel that
consequent upon the report of the Land Acquisition Officer
dated 20th January, 1981 in proceedings under Section 5A of
the Act to the effect that Plot No. 289 may be exempted from
the acquisition, it was incumbent upon the Government to
give a decision in this behalf as contemplated by the said
Section 5A and until a decision was given, the direction of
this Court referred to above given in Civil Appeal No. 2970
of 1979 remained unimplemented and the issue of fresh
Notifications under Sections 4(1) and 6 was in colourable
exercise of power. In this connection it was pointed out
that the only course open to the Government was to give a
decision that notwithstanding the report of the Land
Acquisition Officer dated 20th January, 1981 it was
necessary to acquire Plot No. 289 and to issue a
189
Notification under Section 6 of the Act on the basis of such
decision in continuation of the earlier Notification dated
26th October, 1978 under Section 4(1) of the Act. According
to him since the Notification dated 26th October, 1978 had
initially been quashed by the High Court in its entirety on
6th September, 1979 in so far as Plot No. 289 is concerned
and was partly maintained by this Court vide its judgment in
Civil Appeal No. 2970 of 1979 with a direction to make
inquiry under Section 5A of the Act and to proceed
thereafter in accordance with law, the second proviso to
Section 6(1) of the Act as inserted by the State of Uttar
Pradesh by the Land Acquisition (U.P. Amendment) Act 28 of
1972 was clearly attracted. It was urged that since the said
proviso contemplated that in computing the period of three
years for issuing a Notification under Section 6 prescribed
by the first proviso to sub-section (1) thereof the time
during which the State Government was prevented by or in
consequence of any order of any court from making such
declaration shall be excluded, it was open to the State
Government to issue a Notification under Section 6 even on
20th May, 1982 when the fresh Notification under Section
4(1) was issued and the issue of the fresh Notification
under Section 4(1) invoking Section 17(4) of the Act was not
bona fide and was apparently a case of colourable exercise
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of power. It was also pointed out by learned counsel for the
Respondents 1 and 2 that undue delay had been caused in
issuing the fresh Notification under Section 4(1) of the Act
on 20th May, 1982 after the report of the Land Acquisition
Officer dated 20th January, 1981 which itself indicated that
there was no occasion for invoking Section 17(4) of the Act.
In this connection it was further submitted by learned
counsel for the Respondents 1 and 2 that no material change
in the factual position had taken place between 20th
January, 1981 and 20th May, 1982 and for this reason also
Section 17(4) of the Act could not have been invoked.
According to learned counsel there was in any case no
justification for the Government to include even that
portion of the land other than Plot No. 289 which was the
subject-matter of Notifications dated 26th October, 1978 and
27th October, 1978 and with regard to which the said
Notifications had not been quashed. According to him the
Government by including that portion of the land also in
these Notifications dated 20th and 21st May, 1982 really
took steps to acquire its own land which indicated lack of
application of mind at the time of issuing these
Notifications. On the basis of these submissions it was
urged by learned counsel for the Respondents 1 and 2 that
not only the judgment of the High Court under appeal
deserved to be confirmed, Civil Appeal No. 3447 of 1987
filed by Respondents 1 and 2 deserves to be allowed and the
Notification dated 20th May, 1982 under Section 4(1) of the
Act deserves to be quashed in its
190
entirety in substitution of the judgment of the High Court
quashing the same only in so far as it invoked Section 17(4)
of the Act.
Having heard learned counsel for the parties we are of
the opinion that Civil Appeal No. 3446 of 1987 filed by the
Krishi Utpadan Mandi Samiti, Muzaffarnagar deserves to be
allowed and as a consequence thereof Civil Appeal No. 3447
of 1987 filed by the Respondents 1 and 2 deserves to be
dismissed. At this place another intervening circumstance
may be noticed. A Notification dated 20th November, 1981 was
issued by the State Government under clause (b) of
subsection (2) of Section 7 of the Uttar Pradesh Krishi
Utpadan Mandi Adhyniyam, 1964 (hereinafter referred to as
U.P. Act No. 25 of 1964) declaring that with effect from the
date of publication of the Notification in the Gazette the
wholesale transactions of agricultural produce in respect of
Muzaffarnagar market area specified in Schedule A shall be
conducted only on the place within the Muzaffarnagar
Principal Market Yard. A copy of this Notification forms
part of the record of Civil Appeal No. 3446 of 1987 and it
indicates that Schedule A thereto contains 54 commodities of
agricultural produce. The effect of the issue of the said
Notification was that dealers of the said 54 commodities had
to shift their existing place of business to the Principal
Market Yard.
An association of traders in gur, khandsari and
foodgrains, namely, the Gur, Khandsari and Grain Merchants
Association (Regd.), Muzaffarnagar filed Writ Petition
(Civil) No. 1318 of 1982 in this Court challenging the
aforesaid Notification. The grievance of the petitioners was
that once the impugned Notification became operative no one
could carry on wholesale business in the specified
agricultural produce except at a place declared as a Market
yard and any business being carried on at any other place
would be contrary to law rendering persons carrying on such
business liable to prosecution. According to the petitioners
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in this view of the matter and in view of the circumstance
that in the new Market Yard mentioned in the Notification
shops were not available, the whole business of the
petitioners would be ruined if the said Notification was
implemented. Notices were issued to the respondents and
statements were made by learned counsel appearing for the
concerned respondents that the Mandi Samiti had undertaken
planned programme of constructing shops and that 120 more
shops can be constructed within two months apart from the
shops which had been constructed and allotted to the
intending traders and dealers. On the basis of the aforesaid
statements this Court ordered on 2nd March, 1982:-
191
"We, therefore, record the statements of Mr. Rana
and Mr. Garg that within a period of six months
from today the Samiti will construct required
number of shops. If some vacant shops are
available proceedings for allotment must be taken
forthwith. Those of the traders/dealers who are
allotted shops must shift to the notified market
yard within a week from the date of the receipt of
the allotment order. Till any trader/dealer is not
allotted a shop he can carry on his business in
the old market yard and is not to be prosecuted,
on the ground that he is doing business in the old
market yard which is denotified."
A further direction was given that the shops to be
constructed must be in accordance with the plan according to
which the existing shops had been constructed.
The impugned Notification dated 20th May, 1982 under
Section 4(1) of the Act contained inter alia the following
recital as is apparent from a copy thereof placed on the
record of Civil Appeal No. 3446 of 1987:
"Being of the opinion that the provisions of sub-
section (1) and (1A) of section 17 of the Act are
applicable to the said land inasmuch as the said
land which is arable and banjar Atirikt is
urgently required for the construction of market
yard of Krishi Utpadan Mandi Samiti, Muzaffarnagar
under a planned development scheme and that in
view of the directions of the Supreme Court
additional shops are to be constructed most
urgently. It is as well necessary to eliminate the
delay likely to be caused by an enquiry under
Section 5A of the said Act."
In the counter-affidavit filed on behalf of the State
of U.P. which forms part of Civil Appeal No. 3447 of 1987 it
has been stated that after the receipt of the report of the
Land Acquisition Officer dated 20th January, 1981 the State
Government called for comments from the Director, Mandi
Parishad, Uttar Pradesh, who vide his letter dated 27th
June, 1981 informed the State Government that Plot No. 289
deserved to be acquired and there was no justification to
release it from acquisition. After the said letter had been
received Smt. Dhanwanti Agarwal, one of the vendees from
Respondents 1 and 2 referred to above requested the State
Government vide her letter dated 2nd September, 1981 to
reconsider the matter. On the receipt of
192
the said letter a meeting was convened at Government level
on 16th November, 1981 attended by the District Magistrate,
Muzaffarnagar, Agriculture Secretary and Director, Mandi
Parishad. In pursuance of the deliberations of that meeting
the District Magistrate was requested to look into the
matter and send his comments vide letter dated 21st
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November, 1981 and in response to that letter the District
Magistrate vide his letter dated 3rd December, 1981 informed
the State Government that for reasons stated therein it was
not advisable to exempt or exclude Plot No. 289 from the
acquisition proceedings. Copies of these letters have been
annexed to the counter-affidavit. In his letter dated 3rd
December, 1981 the District Magistrate inter alia pointed
out that the land of Plot No. 289 was situated in the middle
of the land acquired under the Notifications in question and
that it was necessary to acquire the land of the said plot
also for a smooth construction of the market yard. The
District Magistrate by his letter made a request that
Notification under Section 6(1) of the Act may be issued
immediately. The counter-affidavit further indicates that
while the matter was under consideration Smt. Santosh Kumari
the other vendee from Respondents 1 and 2 referred to above
made an application before the State Government stating that
Plot No. 289 should not be acquired in view of the report of
the Land Acquisition Officer and further that since the
Notification dated 26th October, 1978 under Section 4(1) had
been published on 25th November, 1978 and a period of three
years had elapsed any acquisition would be invalid.
We have already indicated above that the original
record was produced before us by learned counsel appearing
for the State Government and from its perusal it appeared
that after Smt. Santosh Kumari had made the said application
the question as to whether a Notification under Section 6(1)
of the Act could be issued in continuation of the
Notificition dated 26th October, 1978 under Section 4(1) of
the Act came up for consideration before the State
Government. The matter was ultimately referred to the Law
Department. The record further indicated that there appeared
to be a divergence of opinion in regard to the applicability
of the second proviso to Section 6(1) of the Act inserted by
the State of U.P. and the ultimate view which prevailed was
that it was expedient to issue a fresh Notification under
Section 4(1) also and it was thus that in place of issuing a
Notification under Section 6(1) in continuation of the
Notification dated 26th October, 1978 under Section 4(1),
fresh Notifications both under Sections 4(1) and 6 of the
Act were issued on 20th May, 1982 and 21st May, 1982
respectively. The original record also indicated that after
the receipt of the report of the Land Acquisition Officer
the file was
193
moving above for sometime to ensure as to whether possession
over Plot No. 289 had been restored back or not in pursuance
of the direction of the Supreme Court in Civil Appeal No.
2970 of 1979 and to take steps to ensure compliance of the
said direction. As seen above it was the own case of
Respondents 1 and 2 in their writ petition before the High
Court that Smt. Dhanwanti Agarwal and Smt. Santosh Kumari
were wives of two gazetted officers. In the counter-
affidavit which was filed on behalf of the Krishi Utpadan
Mandi Samity, Muzaffarnagar in the said writ petition it was
stated in paragraph 20 with regard to the report of the Land
Acquisition Officer dated 20th January, 1981 that some of
the land being of gazetted officers, they succeeded in
exerting pressure on the Land Acquisition Officer to submit
a wrong report. As already pointed out in the counter-
affidavit filed on behalf of the State Government in this
Court reference has been made to the two letters given by
Smt. Dhanwanti Agarwal and Smt. Santosh Kumari on the basis
of which further inquiry had to be made by the State
Government and ultimately a decision had to be taken that in
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place of issuing a Notification under Section 6(1) of the
Act in continuation of the Notification dated 26th October,
1978 under Section 4(1) fresh Notifications under Sections
4(1) and 6 may be issued.
The original record which was produced before us also
indicated that at no stage after the receipt of the report
of the Land Acquisition Officer dated 20th January, 1981 had
the Government taken a decision that it was not necessary to
acquire the plot. Indeed, as seen above, the Government was
not inclined to agree with the report of the Land
Acquisition Officer because had it been so there would have
been no occasion either for calling for a report from the
Director Mandi Parishad or convening a meeting to consider
the matter or to require the District Magistrate to submit
his own report. After making necessary inquiries the
Government ultimately decided not to release Plot No. 289
from acquisition proceedings. However, before a Notification
could be issued under Section 6(1) of the Act in
continuation of the Notification dated 26th October, 1978
under Section 4(1) a question was raised by Smt. Santosh
Kumari that three years having expired from the date of the
publication of the Notification under Section 4(1) Plot No.
289 could not be acquired in pursuance of the said
Notification. The Government thereafter referred the matter
to the Law Department and it was ultimately decided to issue
fresh Notifications under Sections 4(1) and 6 of the Act.
There seems to be no doubt with regard to the legal
position that
194
the report dated 20th January, 1981 submitted by the Land
Acquisition Officer was not binding on the State Government
and it was still open to it to continue the proceedings for
acquisition of Plot No. 289 notwithstanding the said report.
The reason why in place of issuing a Notification under
Section 6(1) of the Act in continuation of the Notification
dated 26th October, 1978 under Section 4(1) fresh
Notifications under Sections 4 and 6 had to be issued as
also the reason for the delay in issuing the fresh
Notifications have already been indicated above. As regards
the submission that Section 17(4) of the Act has been
erroneously invoked in the fresh Notification under Section
4(1) dated 20th May, 1982 also and that inquiry under
Section 5A had again to be made before issuing this
Notification, suffice it to point out that once an inquiry
under the said Section had already been made and the parties
had been given full opportunity to substantiate their case
in the said inquiry and the State Government was not
inclined to agree with the report of the Land Acquisition
Officer submitted in pursuance of that inquiry it would have
been a futile exercise to repeat the whole performance
again. After the issue of the earlier Notification dated
26th October, 1978 a period of nearly 3 1/2 years had
expired when the fresh Notification dated 20th May, 1982
under Section 4(1) was issued and apparently the necessity
to acquire Plot No. 289 during this period became more acute
due to this delay. Further, as stated in the Notification
dated 20th May, 1982 itself the urgency had become more
imminent on account of the direction issued by this Court on
2nd March, 1982 in Writ Petition No. 1318 of 1982 filed by
the traders challenging the Notification under Section
7(2)(b) of U.P. Act No. 25 of 1964. Consequently, we find it
difficult to hold that the opinion of the State Government
that it was a fit case to invoke Section 17(4) of the Act
was invalid on the ground that there was no basis or
material in support of that opinion. We are further of the
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view that on the facts indicated above it is also not
possible to hold that the Notification dated 20th May, 1982
had been issued by the State Government in colourable
exercise of its power.
At this place it would be relevant to notice that the
Notifications dated 20th May, 1982 and 21st May, 1982 had
not been challenged by Respondents 1 and 2 on the basis of
mala fides of any particular officer of the State
Government. What was urged was that it was a case of legal
mala fides inasmuch as in issuing the fresh Notification
dated 20th May, 1982 under Section 4(1) of the Act, an
attempt was made by the State Government to circumvent the
direction issued by this Court in Civil Appeal No. 2970 of
1979 to make inquiry under Section 5A of the Act and to
proceed thereafter in accordance with law. Suffice it to
say,
195
so far as this submission is concerned that the State
Government in pursuance of the aforesaid direction given by
this Court did make an inquiry under Section 5A of the Act
and in the said inquiry full opportunity was given to the
concerned parties to substantiate their case. It is,
therefore, difficult to agree with the submission of learned
counsel for Respondents 1 and 2 that an attempt was made by
the State Government to circumvent the direction of this
Court. As seen above, the State Government was not bound to
agree with the report of the Land Acquisition Officer and it
has not been disputed even by learned counsel for the
respondents that it was open to the State Government to take
a contrary decision and to issue a Notification under
Section 6(1) of the Act on the receipt of the report dated
20th January, 1981 of the Land Acquisition Officer. That the
State Government in the instant case was not inclined to
agree with the report of the Land Acquisition Officer has
already been indicated above. The reasons for the delay in
taking further steps as also for issuing fresh Notifications
under Sections 4(1) and 6 have also been indicated. On these
facts we are of the opinion that a case of even legal mala
fides is not made out. The decision of this Court in the
case of State of Punjab v. Gurdial Singh & Ors., [1980] 1
S.C.R. page 1071 on which reliance has been placed by
learned counsel for Respondents 1 and 2 is of no assistance
inasmuch as the plea of mala fides in that case was based on
personal malice. So also is the position with regard to the
decision of this Court in The Collector (Distt. Magistrate)
Allahabad and Anr. v. Raja Ram Jaiswal etc., [1985] 3 S.C.R.
Page 995. That was a case where land had been acquired for a
cinema theatre in the vicinity of the building housing the
Hindi Sahitya Sammelan. It was pointed out that the power to
acquire land is to be exercised for carrying out the public
purpose. If the authorities of the Sammelan cannot tolerate
the existence of a cinema theatre in its vicinity it could
not be said that such a purpose would be a public purpose.
May be, the authority of the Sammelan may honestly believe
that the existence of a cinema theatre may have the
pernicious tendency to vitiate the educational and cultural
environment of the institution and therefore, it will like
to wish away a cinema theatre in its vicinity. But that
hardly constitutes public purpose. Such is not the situation
in the instant case.
The learned counsel for Respondents 1 and 2 in support
of his submission that since this Court by its order dated
22nd October, 1979 in Civil Appeal No. 2970 of 1979 had
issued a direction to hold an inquiry under Section 5A of
the Act and to proceed with the matter in accordance with
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law it was incumbent on the Government to take a decision
that notwithstanding the report of the Land Acquisition
196
Officer dated 20th January, 1981 it was necessary to acquire
Plot No. 289, placed reliance on the decision of this Court
in P.L. Lakhanpal v. Union of India & Ors., [1967] 1 S.C.R.
page 433 where while dealing with Rule 30A of the Defence of
India Rules, 1962 it was held that according to dictionary
"decision" means "settlement, (of question etc.),
conclusion, formal judgment, making up one’s mind, resolve,
resoluteness, decided character." and on Siemens Engineering
& Manufacturing Co. of India Limited v. Union of India &
Anr., [1976] (Supplementary) S.C.R. page 489 where while
dealing with the provisions of the Indian Customs Tariff it
was held that if courts of law are to be replaced by
administrative authorities and tribunals, as indeed, in some
kinds of cases, with the proliferation of Administrative
Law, they may have to be replaced, it is essential that
administrative authorities and tribunals should accord fair
and proper hearing to the persons sought to be affected by
their orders and give sufficiently clear and explicit
reasons in support of the orders made by them. Reliance was
placed on some other cases also but we do not find it
necessary to deal with them in detail inasmuch as to us it
appears firstly, that the Government in the instant case was
all through of the opinion that Plot No. 289 did not deserve
to be released from acquisition as already indicated above.
Secondly, this plea loses its significance and becomes
almost of academic value inasmuch as the State Government in
the instant case has not issued a Notification under Section
6(1) of the Act in continuation of the Notification dated
26th October, 1978 under Section 4(1). After the issue of
the fresh Notifications under Sections 4(1) and 6, what is
really to be seen is whether there was justification for
invoking Section 17(4) of the Act or not. We have already
indicated above that there was such justification.
In support of the submission that there was no material
change in the factual position between 20th January, 1981
and 20th May, 1982, learned counsel for the Respondents 1
and 2 has urged that the direction contained in the judgment
of this Court dated 2nd March, 1982 in Writ Petition No.
1318 of 1982 filed by the traders was confined to the
question of allotment of 200 shops only. And since the land
which had already been acquired was sufficient for
constructing as many shops it was not necessary to acquire
Plot No. 289. As seen above, the Notification under Section
7(2)(b) of the U.P. Act No. 25 of 1964 which had been
challenged before this Court in Writ Petition No. 1318 of
1982 was in regard to 54 commodities. The writ petition
aforesaid had been filed by an association of traders
dealing in gur, khandsari and foodgrains only. Even though
technically it may be said that the direction issued by this
Court was relevant with regard to about 200 shops only,
197
in substance, however, that does not appear to be the
correct position. The effect of the direction issued by this
Court was that no trader could be compelled to come to the
market yard unless shops were provided. The Krishi Utpadan
Mandi Samiti, Muzaffarnagar could not afford to act contrary
to this direction with regard to any of the traders who were
dealing in any of the aforesaid 54 commodities. As seen
above, one of the two main circumstances relied upon by the
Land Acquisition Officer in giving his report dated 20th
January, 1981 was that no trader was willing to come to the
premises which had already been constructed and were lying
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idle. This circumstance had ceased to exist with the issue
of the Notification under Section 7(2) of the U.P. Act No.
25 of 1964 as a consequence whereof on shops being made
available in the market yard all the traders doing wholesale
business in the 54 commodities mentioned in the Notification
were bound to shift to the shops in the market yard. For
this provision had to be made by the Krishi Utpadan Mandi
Samiti, Muzaffarnagar. In paragraph 15 of the counter-
affidavit filed on behalf of the Krishi Utpadan Mandi
Samiti, Muzaffarnagar in the writ petition in the High Court
it was stated that the Mandi Samiti had completed
construction of 120 shops and there was further scope for
constructing only 90 more shops in the 60 acres of land
originally acquired whereas Mandi Samiti had to construct
540 shops. In this Court a supplementary affidavit has been
filed on behalf of the said Mandi Samiti in which it has
been stated that so far 348 shops had been constructed and 4
shops are incomplete on account of the impugned judgment of
the High Court relating to Plot No. 289. A site plan has
been attached as Annexure D indicating that land on three
sides of Plot No. 289 has already been acquired and on the
fourth side lies a road. Annexure E to the said
supplementary affidavit is a sketch map indicating the
various requirements of the Mandi Samiti in connection with
the construction of the market yard. The said sketch plan
indicates that apart from construction of shops provision
has been made for roads and parking grounds, godowns,
auction platforms, open space in front of the shops, staff
quarters, rest house, police chowki, check post, a building
for bank as well as a post office, toilets, canteens and so
on. The affect of the Notification under Section 7(2) of
U.P. Act No. 25 of 1964 is that wholesale business in 54
commodities mentioned therein can be carried out only in the
principal market yard. It is common knowledge that trucks,
tractors with trollies and even bullock carts are used for
transporting the various commodities to the principal market
yard. To accommodate them provision has necessarily to be
made for roads and parking grounds etc. Likewise,
arrangement has also to be made for storage of the various
commodities and for their auction as well as for lodging
198
such of the cultivators, drivers, cleaners etc. who may have
to stay on due to the exigencies of the situation. Some if
not all employees attached with the principal market yard
have to be provided with accommodation. Section 19 of U.P.
Act No. 25 of 1964 deals with Market Committee funds and its
utilisation. Sub-section (3)(vii) authorises the Market
Committee to utilise its funds for payment of "cost of
construction and repairs of buildings necessary for the
market yards and for the health, convenience and safety for
the persons using them". It gives clue to the nature of some
of buildings which are to be constructed by a Market
Committee and for which land has to be provided for. The
requirement of the Mandi Samiti, therefore, has to be
construed in this background and not in isolation with
regard to its requirement for land to be covered by shops
alone. Apparently, therefore, there has been a material
change in the circumstances after the report of the Land
Acquisition Officer dated 20th January, 1981 so as to
justify Section 17(4) of the Act being invoked. In this
connection reliance was placed by learned counsel for the
Respondents 1 and 2 on the decision of this Court in Narayan
Govind Gavate etc. v. State of Maharashtra, [1977] 1 S.C.R.
page 763 where dealing with Section 17(4) of the Act it was
pointed out that the purpose of the said section was
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obviously not merely to confine action under it to waste and
arable land but also to situations in which an inquiry under
Section 5A will serve no useful purpose or for some
overruling reason which should be dispensed with. The mind
of the officer or authority concerned has to be applied to
the question whether there is an urgency of such a nature
that even the summary inquiry under Section 5A of the Act
should be eliminated. It is not just the existence of an
urgency but the need to dispense with an inquiry under
Section 5A which is to be considered. It was also held in
that case that the development of an area for industrial and
residential purposes in itself, on the face of it does not
call for any such action barring exceptional circumstances,
as to make immediate possession without holding even a
summary inquiry under Section 5A of the Act, imperative. On
the other hand such schemes generally take sufficient period
of time to enable summary inquiry under Section 5A of the
Act to be completed without any impediment whatsoever to the
execution of the scheme. The aforesaid decision was
considered in a subsequent decision of this Court in State
of U.P. v. Pista Devi, [1986] 4 SCC 251 and it was
distinguished. It was held:
"Now it is difficult to hold that in the case of
proceedings relating to acquisition of land for
providing house sites it is unnecessary to invoke
Section 17(1) of the Act and to dispense with the
compliance with Section 5A of the Act.
199
Perhaps, at the time to which the decision in
Narayan Govind Gavate v. State of Maharashtra,
[1977] 1 SCR 763 related the situation might have
been that the schemes relating to development of
residential areas in the urban centres were not so
urgent and it was not necessary to eliminate the
inquiry under Section 5A of the Act. The
acquisition proceedings which had been challenged
in that case related to the year 1963. During this
period of nearly 23 years since then the
population of India has gone up by hundreds of
millions and it is no longer possible for the
Court to take the view that the schemes of
development of residential areas do not ‘appear to
demand such emergent action as to eliminate
summary inquiries under Section 5A of the Act’. In
Kasireddy Papaiah (died) v. Government of A.P.,
AIR 1975 AP 269: 1975 1 APLJ 70 Chinnappa Reddy,
J. speaking for the High Court of Andhra Pradesh
dealing with the problem of providing housing
accommodation to Harijans has observed thus:
That the housing conditions of Harijans all
over the country continue to be miserable
even today is a fact of which courts are
bound to take judicial notice. History has
made it urgent that, among other problems,
the problem of housing Harijans should be
solved expeditiously. The greater the delay
the more urgent becomes the problem.
Therefore, one can never venture to say that
the invocation of the emergency provisions of
the Land Acquisition Act for providing house
sites for Harijans is bad merely because the
officials entrusted with the task of taking
further action in the matter are negligent or
tardy in the discharge of their duties,
unless, of course, it can be established that
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the acquisition itself is made with an
oblique motive. The urgent pressures of
history are not to be undone by the inaction
of the bureaucracy. I am not trying to make
any pontific pronouncements. But I am at
great pains to point out that provision for
house sites for Harijans is an urgent and
pressing necessity and that the invocation of
the emergency provisions of the Land
Acquisition Act cannot be said to be
improper, in the absence of mala fides,
merely because of the delay on the part of
some government officials.
(italicising by us)
200
What was said by the learned Judge in the
context of provision of housing accommodation to
Harijans is equally true about the problem of
providing housing accommodation to all persons in
the country today having regard to the enormous
growth of population in the country. The
observation made in the above decision of the High
Court of Andhra Pradesh is quoted with approval by
this Court in Deepak Pahwa v. Lt. Governor of
Delhi, [1985] 1 SCR 588 even though in the above
decision the Court found that it was not necessary
to say anything about the post-notification delay.
We are of the view that in the facts and
circumstances of this case the post-notification
delay of nearly one year is not by itself
sufficient to hold that the decision taken by the
State Government under Section 17(1) and (4) of
the Act at the time of the issue of the
notification under Section 4(1) of the Act was
either improper or illegal."
Apart from what has been pointed out above we have
already held that on the facts of the instant case there was
sufficient justification for invoking the provisions of
Section 17(4) of the Act and dispensing with a further
inquiry under Section 5A of the Act.
With regard to the submission made by learned counsel
for Respondents 1 and 2 that since land other than land of
Plot No. 289 which already stood acquired had also been
included in the fresh Notification dated 20th may, 1982
under Section 4(1) of the Act it indicated lack of
application of mind suffice it to say that the original
record produced before us by learned counsel for the State
Government indicates that the deliberations which took place
after the direction of this Court dated 22nd October, 1979
in Civil Appeal No. 2970 of 1979 were with regard to Plot
No. 289 and the inclusion of the other land in the
Notification seems to be not the result of lack of
application of mind on the part of the officers concerned
but dute to inadvertent copying out of the entire plots
included in the Notification under Section 4(1) dated 26th
October, 1978 at some clerical level and it does not in any
way have the effect of invalidating the fresh Notifications
with regard to Plot No. 289. The submission about the lack
of application of mind before issuing the said Notification
has also, therefore, no substance. The effect of issuing a
fresh Notification under Section 4(1) and the delay in
issuing it has really benefited Respondents 1 and 2 inasmuch
as now they will be entitled to compensation not on the
basis of the market value of Plot No. 289 as on 26.10.1978
when the earlier
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201
Notification under Section 4(1) was issued but as on 20th
May, 1982 when the fresh Notification under the said Section
was issued.
In the result, Civil Appeal No. 3446 of 1987 is
allowed, the judgment dated 11th March, 1987 of the High
Court in Writ Petition No. 6789 of 1982 is set aside and the
said writ petition is dismissed. As a consequence Civil
Appeal No. 3447 of 1987 is dismissed. In the circumstances
of the case there shall be no order as to costs.
S.L. C.A. No. 3446/87 is allowed and
C.A. No. 3447/87 is dismissed.
202