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Smart Summary

Factual and Procedural Background

The appellant operates a saw mill and related business on municipal holding No. 16, Chatubabu's Ghat Lane, Howrah (about 212% acre). A notification under Section 4 of the Land Acquisition Act, 1894 was published in the Calcutta Gazette on November 3, 1960, stating that the land was likely required for a public purpose (extension of two schools) and that the acquisition would be paid partly from public funds and partly by the school authorities. The appellant filed objections (filed 12 February 1961, further objection 9 July 1962) and was notified of an inquiry under S.5A(2) fixed for 6 March 1961. A declaration under Section 6 of the Act dated 6 April 1962 was published on 26 April 1962. Having not obtained relief from his objections, the appellant moved under Article 226 of the Constitution and obtained a Rule Nisi; that Rule Nisi was discharged by D. Basu, J. on 11 September 1964. The present appeal challenges the discharge of the Rule Nisi, principally attacking the validity of the Section 4 notification on the ground that the statement about payment from public funds was false (a fraud on the statute) because, the appellant contended, any decision to contribute from public funds was taken only after the Section 4 notification.

Legal Issues Presented

  1. Whether the Section 4 notification must be struck down as a "fraud on the Statute" because the statement that part of the expenses would be paid out of public funds was allegedly false (i.e., whether the decision to contribute out of public funds must exist prior to publication of the Section 4 notification).
  2. Whether, alternatively, it is sufficient for validity that a decision to pay part of the acquisition expenses out of public funds be taken prior to publication of the Section 6 declaration (and whether the decision to contribute in this case satisfied that requirement).

Arguments of the Parties

Appellant's Arguments (Mr. Arun Kumar Dutt)

  • The Section 4 notification dated 26 October 1960 stated that acquisition expenses would be partly from public funds, but no decision to contribute from public funds had been taken by the Government prior to that date; therefore the statement was false and amounted to a fraud on the statute.
  • Reference was made to a letter of 17 April 1961 (Assistant Secretary to the Government of West Bengal to the Collector, Howrah) which, according to the appellant, showed that a decision to contribute from public funds was first suggested only on that date; hence there was no manifestation of intention to contribute before the Section 4 notification.
  • Even though a later letter (19 February 1962) recorded a decision to contribute Rs. 10, Mr. Dutt argued that the decision must have been taken before the Section 4 notification to validate that notification; the fact that the decision occurred before publication of the Section 6 declaration did not cure the alleged defect in the Section 4 notification.
  • Relied on Rajendra Kumar Ruia v. Govt. of West Bengal (AIR 1952 Cal 573) for the proposition that courts will set aside acquisitions that are frauds on the Act, and on Syed Dilawar Hussain v. Collector of Madras (AIR 1955 Mad 610) for the proposition that manifestation of intention to pay out of public revenues must be antecedent to the publication of the declaration under S.6(1) — read as supporting the need for antecedent manifestation — and on Sm. Hira Devi v. District Board (AIR 1952 SC 362) regarding limits on judicial construction where there are statutory lacunae.

Respondents' Arguments (Mr. N.C. Chakraborty, Government Pleader)

  • There was no merit in the appellant's contention: at the time of the Section 4 notification there was no need to take or express any decision to contribute out of public funds because Section 4 is a preliminary notice that land may be required for a public purpose.
  • The Section 4 notification simply gives notice of possible need and relates to preliminary investigation and the powers of officers; it is not concerned with the question of the costs of acquisition.
  • The decision to pay acquisition expenses (in whole or part) only arises before publication of the Section 6 declaration, because the proviso to sub-section (1) of Section 6 prohibits publication of a declaration unless compensation is to be paid by a company or wholly or partly out of public revenues or certain local funds; therefore the statutory requirement is that the decision to contribute must be taken before the Section 6 declaration, not before Section 4 notification.
  • In this case the requirement of the proviso to Section 6(1) was satisfied because a decision to contribute Rs. 10 out of public revenues was in fact taken before the publication of the Section 6 declaration. Relied upon Smt. Somawanti v. State of Punjab (AIR 1963 SC 151) and Amarendra Nath Nath v. State of West Bengal (67 Cal WN 647) as supportive authority.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Rajendra Kumar Ruia v. Govt. of West Bengal, AIR 1952 Cal 573 The Court will scrutinise and set aside acquisition proceedings if they are shown to be not bona fide, a fraud on the Land Acquisition Act, or an evasion of the Act. The Court held this authority had no application to the present facts because the appellant's complaint was not about lack of bona fides in exercise of powers generally but about the timing of the decision to contribute from public funds (i.e., a different point).
Syed Dilawar Hussain v. Collector of Madras, AIR 1955 Mad 610 Held that to entitle the Government to make a declaration under S.6(1) there must be an unmistakable manifestation of intention to pay at least part of the compensation out of public revenues and such manifestation must be antecedent to the publication of the declaration under S.6(1). The Court stated the decision did not support the appellant's contention because in the present case manifestation of intention to contribute was made before publication of the Section 6 declaration; the case is not authority for requiring such a decision to be taken prior to the Section 4 notification.
Sm. Hira Devi v. District Board, Shahjanpur, AIR 1952 SC 362 Observation that courts should not supply lacunae in a statute by stretching words; i.e., judicial construction cannot fill gaps or omissions in legislative provisions. The Court considered this observation inapplicable to the facts and found it did not aid the appellant's argument.
Smt. Somawanti v. State of Punjab, AIR 1963 SC 151 Illustrative fact pattern: Section 4 notification dated 25 August 1961; government sanctioned Rs. 100 for acquisition expenses on 29 September 1961; majority of Supreme Court upheld acquisition proceedings. The respondents relied on this decision to support the proposition that a sanction or decision to contribute taken after a Section 4 notification (but before a Section 6 declaration) can be consistent with valid proceedings; the Court treated it as supportive of the respondents' position.
Amarendra Nath Nath v. State of West Bengal, 67 Cal WN 647 Held that a small contribution out of public funds does not necessarily render acquisition proceedings colourable. The Court noted this authority but observed the appellant did not argue that the Rs. 10 contribution was so small as to make the exercise of power colourable; therefore the Court did not further rely on this point.

Court's Reasoning and Analysis

The court's reasoning proceeds in these principal steps, drawn directly from the opinion:

  1. Characterisation of Section 4: The court treated Section 4 as a preliminary notice provision concerned with an initial investigation and with the powers of officers upon publication of such a notification. At the Section 4 stage the authority is giving notice that land may be required for a public purpose; there is nothing in Section 4 indicating that a decision to contribute out of public funds must be taken or expressed at that stage.
  2. Temporal focus of the decision to pay expenses: The court concluded that the question of payment of acquisition expenses out of public funds arises before the publication of the Section 6 declaration, not at the Section 4 stage. This conclusion rests on the plain text and structure of Section 6(1): the proviso to sub-section (1) prohibits publication of a declaration under Section 6 unless compensation is to be paid by a company or wholly or partly out of public revenues or certain local funds. Thus, the statutory requirement governs the timing for manifesting the decision to pay.
  3. Application to the facts: The court found that, in this case, there was a manifestation of intention to contribute out of public funds before publication of the Section 6 declaration. A letter dated 19 February 1962 from S.C. Chakraborty (Deputy Secretary to the Government of West Bengal) to the Commissioner of Burdwan Division recorded a decision to contribute Rs. 10 out of public funds; this decision preceded the declaration dated 6 April 1962 (published 26 April 1962). Accordingly, the proviso to Section 6(1) was complied with.
  4. Rejection of the appellant's legal reliance: The court examined the precedents relied upon by the appellant (including Rajendra Kumar Ruia, Syed Dilawar Hussain and Sm. Hira Devi) and explained why they did not support the contention that a decision to contribute must pre-exist the Section 4 notification. Rajendra Kumar Ruia dealt with bona fides and fraud/evasion of the Act — a different inquiry — and the Madras decision did not stand for the proposition that the decision to contribute must be taken before Section 4. The observation in Sm. Hira Devi about filling statutory lacunae by construction was likewise held inapposite.
  5. Conclusion on validity of Section 4 notification: Given that Section 4 is a preliminary notice and that the statutory requirement as to payment manifests itself under Section 6, absence of a decision to contribute at the Section 4 stage does not render the Section 4 notification invalid. Because the decision to contribute was taken prior to the Section 6 declaration, the court found sufficient compliance with the statute and upheld the acquisition proceedings against the appellant's challenge.

Holding and Implications

Holding: The appeal is DISMISSED.

Direct effect on the parties: The trial court's order discharging the Rule Nisi was upheld; the appellant's challenge to the validity of the Section 4 notification failed. Costs were assessed against the appellant at three gold mohurs. The operation of the order was stayed for four weeks from the date of the judgment. Chief Justice Bose concurred.

Implications beyond the parties: The opinion addressed statutory timing for manifesting a decision to contribute to acquisition expenses and concluded that such a decision is required before publication of the Section 6 declaration rather than before the Section 4 notification. The Court did not purport to lay down any broader new principle beyond applying existing authorities and statutory construction to the facts; no new precedent beyond the application of these principles to the facts of the case was expressly announced in the opinion.

    Kalipada Banerjee v. State Of West Bengal And Others

    B.C Mitra, J.:— This appeal is directed against a judgment and order of D. Basu, J. dated September 11, 1964, whereby a Rule Nisi obtained by the appellant in an application under Article 226 of the Constitution was discharged.

    2. The appellant runs a Soorki Mill, Saw Mill etc. at Municipal holding No. 16, Chatubabu's Ghat Lane, measuring more or less. 212% acre, in the District of Howrah. A notice under Section 4 of the Land Acquisition Act, 1894, (hereinafter referred to as the Act) was published in the Calcutta Gazette on November 3, 1960 in which it was stated that the said land was likely to be needed for a public purpose, namely, extension of Salkia Anglo Sanskrit School and Ushangini Balika Vidyalaya. It was also stated in this notice that the land was to be acquired partly at public expenses and partly at the expenses of the authorities of Salkia Anglo Sanskrit School. By a notice dated February 28, 1961, the appellant was informed that the date of the enquiry under S. 5A(2) of the Act was fixed on March 6, 1961 and the appellant was asked to be present on the spot in support of his objections which were filed on February 12, 1961. On July 9, 1962, the appellant filed another objection in which he asked for cancellation of the said plot of land from the proceedings for acquisition thereof on the ground that the land was not required for a public purpose. A declaration dated April 6, 1962, under S. 6 of the Act was published in the Calcutta Gazette on April 26, 1962. In this declaration also it was stated that the land was needed for the public purpose hereinbefore mentioned and the acquisition was to be made partly at the public expenses and partly at the expenses of the authorities of the said school. As the appellant did not obtain any redress of his grievances on the basis of the objections filed by him, he moved an application under Article 226 of the Constitution and obtained a Rule Nisi which was discharged by the judgment and order hereinbefore mentioned. This appeal is directed against this judgment and order whereby the Rule Nisi was discharged.

    3. Various points were canvassed before the trial court in support of the petition. But the only contention raised and argued before us by Mr. Arun Kumar Dutt, learned Advocate for the appellant, was that the notification under S. 4 of the Act must be struck down, as it was a fraud on the Statute. It was argued that in this notification it was stated that the expenses of acquisition were to be paid partly out of public funds and partly by the Authorities of the said School. The notification under S. 4 of the Act was dated October 26, 1960. But by referring to a letter dated April 17, 1961, from the Assistant Secretary to the Government of West Bengal, to the Collector, Howrah, Mr. Dutt argued that up to the date of that letter, namely, April 17, 1961, no decision had been taken by the respondent No. 1 to contribute out of public funds, any part of the expenses of the acquisition. It was argued that in the said letter it was for the first time suggested that the Education Department of the respondent No. I would have to make a token grant towards the cost of the acquisition in order to legalise the land acquisition proceedings. It was, therefore plain that at no time prior to April 17, 1961, any decision was taken by the respondent No. I to pay any part of the expenses out of public funds. That being so, it was argued that the statement in the notification under S. 4 of the Act that part of the expenses was to be paid out of public funds was entirely false and such a false statement was a fraud on the Statute.

    4. It appears from a letter dated February 19, 1962, from S.C Chakraborty, Deputy Secretary to the Government of West Bengal, to the Commissioner of the Burdwan Division that a decision was taken to contribute a sum of Rs. 10 only out of public funds. It is to be noted that this decision was taken before publication of the declaration under S. 6 of the Act which is dated April 6, 1962. Mr. Dutt, however, argued that it was not enough that a decision to pay part of the expenses out of the public funds should be taken before publication of the declaration under S. 6 of the Act, but such a decision must be taken before publication of the notification under S. 4 of the Act to validate an acquisition proceeding.

    5. In this case Mr. Dutt argued that it was quite plain that the decision to make a contribution out of the public funds was not taken before publication of the notification under S. 4, which, therefore, must be struck down. Mr. Dutt further argued that the declaration under's. 6 of the Act could not be assailed, as a decision to pay part of the expenses out of public funds was taken before publication of the declaration. But, he argued, that the notification under S. 4 could not be sustained as there was no manifestation of any intention of the respondent No. 1 to contribute any sum out of the public funds towards the expenses of the Acquisition.

    6. In support of this contention Mr. Dutt firstly relied upon a decision of this Court in Rajendra Kumar Ruia v. Govt. of West Bengal, AIR 1952 Cal 573 in which ray Lord the Chief Justice (Bose, J. as he then was) held that if there are sufficient materials before the Court to show that the acquisition was not made bona fide but was a fraud on the Land Acquisition Act, or was an evasion of the Act the Court would be astute to scan such act with disfavour and would set it aside if necessary. Relying upon these observations Mr. Dutt argued that the S. 4 notification in this case was a fraud on the Statute and it should, therefore, be held that the acquisition was not sought to be made bona fide. This decision in our opinion has no application to the facts of this case. The question raised by Mr. Dutt is not one of lack of bona fides in exercise of the powers under the Land Acquisition Act, but that the Notification under S. 4 of the Act was bad as the intention to contribute out of public funds was not taken prior to publication of this Notification. The next case relied upon by Mr. Dutt is a decision of the Madras High Court reported in AIR 1955 Mad 610 Syed Dilawar Hussain v. Collector of Madras, in which it was held that in order to entitle the Government to make a declaration under S. 6(1) there must be an unmistakable manifestation of the intention of the Government to pay at least a part of the compensation out of the public revenues and such manifestation must be antecedent to the publication of the declaration under Section 6(1) of the Act. This decision also does not support Mr. Dutt's contention as in this case the manifestation of the intention to contribute out of the public funds was in fact made before publication of the declaration under Section 6(1) of the Act. This decision is no authority for the proposition that the decision to contribute out of the public funds must be taken and expressed before publication of the notification under S. 4 of the Act. Mr. Dutt next relied upon a decision of the Supreme Court in Sm. Hira Devi v. District Board, Shahjanpur, AIR 1952 SC 362. The observations in this decision relied upon by Mr. Dutt are to the effect that if there is any lacuna in a Statute, such lacuna cannot be supplied by a liberal construction of the Statute and though it was the duty of the Court to try and harmonise the various provisions in an Act, it is not the duty of the Court to stretch the words used by the Legislature to fill in gaps and omissions in the provisions of the Act. This observation in our opinion has no application in the facts of this case and in any event it does not support the contention of Mr. Dutt.

    7. Mr. N.C Chakraborty, learned Government Pleader, appearing for the respondents contended that there was no merit in the contention raised on behalf of the appellant. He argued that at the time when the S. 4 notification was published, there was no occasion either to take a decision or to express any intention of making a contribution out of the public funds. He further argued that S. 4 notification merely gave notice that a particular plot of land was likely to be needed for a public purpose and there was no question at this stage of taking any decision to make a contribution out of the public funds. It might be it was argued by Mr. Chakraborty, that upon hearing of the objections under S. 5A of the Act the Government might decide to release the land together. It was next argued that S. 4, as the heading indicated was concerned with a preliminary investigation and with the powers of officers upon publication of such a notification. This section, it was further argued, was not in any way concerned with the question of costs of acquisition. It was next argued that the proviso to sub-s. (1) of S. 6 of the Act required that a declaration uncles' that section should not be made unless the compensation for the property was to be paid by a Company or wholly or partly out of public revenues or some funds controlled or managed by a local authority. This proviso required that before the declaration under S. 6(1) was made the decision to contribute the expenses out of public funds must be taken. In this case it was argued by Mr. Chakraborty that the requirement of the proviso to sub-s. (1) of S. 6 of the Act was quite clearly complied with as the decision to make a contribution of Rs. 10 out of the public revenues was in fact taken before the publication of the declaration under S. 6(1).

    8. In our opinion this contention of Mr. Chakraborty is well founded. The question of taking a decision to contribute the whole or part of the expenses of acquisition out of public funds does not arise at or before the publication of the notification under S. 4 of the Act. Such a decision is, indeed, entirely unnecessary at the stage of a publication of that notification. It may be that upon hearing of the objections under S. 5-A of the Act the Authorities ma)’ decide not to acquire any part of the land or to acquire a part only of the same. A decision to make a contribution out of public fund at this stage would be altogether purposeless and where the acquisition proceedings are dropped altogether, will be redundant. Indeed, there is nothing in S. 4 to warrant a conclusion that a decision to contribute must be taken before publication of the notification under that section.

    9. The question of payment of the expenses of the acquisition either entirely or in part out of the public fund arises before publication of the declaration under Section 6(1) of the Act. The proviso to that sub-section prohibits publication of a declaration unless the compensation was paid by a company or wholly or partly out of public revenues. In this case the intention to contribute a sum of Rs. 10 out of the public revenues was expressed by the respondent No. 1 before publication of the declaration under S. 6(1) of the Act, There was, therefore, sufficient compliance with the requirement of the statute. Mr. Chakraborty referred to the decision of the Supreme Court in Smt. Somawanti v. State of Punjab, AIR 1963 SC 151 and contended that in that case the notification under S. 4 of the Act was dated August 25, 1961 and the Government of Punjab sanctioned a sum of Rs. 100 for the expenses of acquisition on September 29, 1961, yet the majority of the Supreme Court upheld the acquisition proceedings. Mr. Chakraborty also relied upon a Bench decision of this Court reported in 67 Cal WN 647 Amarendra Nath Nath v. State of West Bengal, in which it was held that if the amount contributed out of public funds was small, that would not necessarily give rise to the inference that the acquisition proceedings were colourable. In this case, however, no such contention was raised by the learned Advocate for the appellant, namely, that the contribution by the respondent No. 1 being only of a small sum of Rs. 10, the exercise of the powers under the Act is colourable. We, therefore, need say nothing more on this question. In our opinion the trial court was right in rejecting the appellant's contention that the notification under S. 4 of the Act was bad and should be struck down as the intention to contribute to the expenses of the acquisition was not manifested before publication of the notification.

    10. For the reasons mentioned above this appeal is dismissed with costs assessed at three gold mohurs.

    11. Let the operation of this order remain stayed for four weeks from this date.

    Bose, C.J:— I agree.

    EJ/RKC/G.G.M

    12. Appeal dismissed.

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    Kalipada Banerjee v. State Of West Bengal And Others
    (Feb 4, 1966)