Citation Codes

Equivalent Citations

citation codes

Case Number

Civil Writ No. 426 of 1961

Attorney(S)

F. C. Mital
Prem Chand Jain and B. S. Gupta
S. M. Sikri Advocate General and H. S. Doabia
Addl. Advocate General

Judges

A.N Grover, J.

Acts

SECTION 4 LAND ACQUISITION ACT 1894
section 17 by the addition of clause (c) in sub-section (2).
Land Acquisition (Punjab Amendment) Act, 1953,
provisions of Article 31(2)
Indian Companies Act, 1956.
section 9, sub-section (1)
Sec. 5-A, sub-section (2),
Punjab Act 47 of 1956,

See more information ...

Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The petitioners are owners of various plots of land (some with structures) in Mauza Parnala and Mauza Bahadurgarh, Tehsil Jhajjar. By a petition under Article 226 of the Constitution they challenged acquisition proceedings initiated by the Punjab Government. On 16 February 1961 the Government issued a notification under Section 4 of the Land Acquisition Act, 1894 stating that land in the locality was likely to be required to set up a factory for manufacture of sanitary wares at Parnala and Bahadurgarh (District Rohtak). The Governor directed that action under Section 17(1) be taken on grounds of urgency and that Section 5-A would not apply. A declaration under Section 6 of the Act was issued on 17 February 1961 and the Governor directed, under Section 17(2)(c), that the Collector proceed to take possession.

Petitioners alleged multiple infirmities in the acquisition, principally that the acquisition was being made for the private benefit of Hindusthan Twyfords Limited (respondent No. 4), a company proposing to establish a sanitary-ware factory which had itself purchased adjacent plots; that respondent No.4's land was purposely left out of the notices; and that the acquisition was not being made at public expense and thus Part VII of the Act (Secs. 38–44) should have applied. The State filed a written statement asserting the acquisition was for a public purpose at public expense and that compensation would be paid from public funds; it also contended that the determination of "public purpose" was not justiciable and sought to justify the exercise of powers under Section 5-A and Section 17.

Legal Issues Presented

Whether the acquisition of the petitioners' land was being made for a "public purpose" within the meaning of the Land Acquisition Act, 1894, or whether it was being made solely for the private benefit of a company (Hindusthan Twyfords Ltd.).
Whether an acquisition said to be for a company can be validly made other than under Part VII (Secs. 38–44), particularly where the cost of acquisition is claimed to be borne out of public funds.
Whether the declaration under Section 6 of the Act is conclusive evidence of public purpose and creates a presumption that cannot be rebutted by the petitioners' factual allegations.
Whether the Governor's directions invoking Section 17(2)(c) (urgency powers) and the non-application of Section 5-A were valid, specifically as to taking possession of plots with existing structures.
Procedural: whether the petition in omnibus form (multiple petitioners without separating plot numbers) was maintainable for the relief sought.

Arguments of the Parties

Petitioners' Arguments

The acquisition was being made solely for the benefit of Hindusthan Twyfords Limited (a private company) and not for any public purpose.
The company itself had purchased adjacent plots; its land had been left out of the acquisition notices, demonstrating that the acquisition served the company's private interests.
There was no provision in the State budget for meeting acquisition costs; therefore the acquisition was not at public expense.
Acquisition for the benefit of a private company must follow the procedure in Part VII of the Act (Secs. 38–44); the present proceedings circumvented those provisions.
Section 17(1) (urgency) applies only to "waste or arable land" and cannot be used to take possession of plots with existing structures.
Relied on several authorities and scholarly discussion to argue that "public purpose" must be established and is justiciable.

State / Advocate-General's Arguments

The acquisition was for a public purpose and would be at public expense; compensation would be paid from public funds.
The determination of what constitutes a "public purpose" is primarily for the State government and, to an extent, not susceptible to judicial interference (though the court proceeded on issues raised).
Section 17 and Section 5-A powers were properly exercised, and the urgency direction under Section 17(2)(c) justified taking possession.
Where precedents cited by petitioners did not arise under the Act, they were of limited assistance; the State sought to distinguish those decisions from the present statutory context.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
State of Bombay v. R. S. Nanji, (S) AIR 1956 SC 294	Relied on by petitioners in connection with the justiciability and meaning of "public purpose".	The Advocate-General submitted that this and similar early cases were of limited assistance because they did not relate to proceedings under the Land Acquisition Act; the Court noted the submission and did not treat the case as determinative for the present statutory context.
Satya Narayan v. State of West Bengal, (S) AIR 1957 Cal 310 (61 Cal WN 420)	Relied upon by petitioners regarding interpretation of "public purpose".	Cited by petitioners as supportive of their contention; the Court referred to it among other decisions but relied primarily on later Supreme Court authority directly addressing acquisitions under the Act.
Gobardhan Jayaswal v. First Land Acquisition Collector, 62 Cal WN 158	Another Calcutta decision referenced on issues relating to acquisitions and public purpose.	Mentioned by petitioners; the Court did not rely on it as the decisive authority but treated it as part of the body of decisions relied on by petitioners.
Bhagwat Dayal v. Union of India, AIR 1959 Punj 544	A Bench decision of the Punjab & Haryana High Court on acquisition and public purpose.	The Court acknowledged this Bench decision but considered the subsequent Supreme Court authorities as binding; it noted the Bench's view that State's determination is presumptive but rebuttable.
Jhandu Lal v. State of Punjab, AIR 1961 SC 343	Discussed in relation to Article 31 and whether the Land Acquisition Act could be attacked under Article 31(2) savings; also considered in relation to the Act's procedure.	The Advocate-General relied on observations in Jhandu Lal to distinguish some earlier cases; the Court noted the decision but nonetheless followed the Bench view that courts must determine the nature of the purpose when challenged, subject to a rebuttable presumption in favour of the State's determination.
Barkya Thakur v. State of Bombay (now Maharashtra), AIR 1960 SC 1203	Held that acquisition for a company could in substance be for a public purpose (for example, providing housing and amenities for workers), and interpreted "public purpose" broadly (including any purpose benefiting even a fraction of the community).	The Court relied significantly on this Supreme Court decision: it accepted that setting up a factory producing sanitary wares could be a work of public utility and that a declaration under Section 6 raises a presumption of public purpose; this authority supported the Court's conclusion that the acquisition was for a public purpose.

Court's Reasoning and Analysis

The court's analysis proceeded in the following steps, based strictly on the material and authorities quoted in the opinion:

Presumption from Section 6: The court treated the declaration under Section 6 as raising at least a presumption that the acquisition was for a public purpose. The Advocate-General relied on the Section 6 declaration and the written statement's assertion that compensation would be borne from public funds.
Authority of Barkya Thakur: The court relied on the Supreme Court's reasoning in Barkya Thakur v. State of Bombay (AIR 1960 SC 1203) which stated that acquisition for a company could be in substance a public purpose (for example, by providing amenities for workmen and creating a work of public utility). The opinion quoted the Chief Justice's broad, generic sense of "public purpose" (including purposes benefiting even a fraction of the community).
Distinction from acquisitions "for a company simpliciter": The court considered the later Supreme Court pronouncement (Jhandu Lal, AIR 1961 SC 343) which held that where an acquisition is for a company simpliciter, a Section 6 declaration cannot be made without satisfying Part VII. But the court applied Sinha, C.J.'s formulation: if the cost of acquisition is borne wholly or in part from public funds, the acquisition may be for a public purpose under the Act and need not follow Part VII.
Application of the facts to the legal standard: The State's written statement specifically asserted that the cost of acquisition would be borne from public funds. The court held that on that assertion (and given the Section 6 declaration and the Barkya Thakur authority), the petitioners' factual allegations were insufficient to rebut the presumption of public purpose. Accordingly, the acquisition was held to be for a public purpose and not a company-only acquisition requiring Part VII procedure.
Section 17 (urgency) and buildings on acquired plots: Petitioners pointed to a Tehsildar's report acknowledging structures on many plots and argued Section 17 applies only to waste or arable land. The court observed that Section 17 had been amended by Punjab Act 47 of 1956 to add clause (c) in sub-section (2), permitting the Collector, with prior sanction, to take immediate possession for urgent public purpose and containing a proviso requiring at least forty-eight hours' notice before taking possession of any building or part thereof. The Advocate-General submitted that clause (c) covered the present case, and the court accepted that submission.
Procedural defect of the petition: The court noted a procedural problem: the petition was omnibus (multiple petitioners without separate identification of plot numbers), making it impossible to grant relief tailored to particular petitioners or plots. The court observed that, had one petitioner been singled out, relief might have been considered, but no such selection was made in oral argument or by counsel.
Conclusion from combined analysis: Because the acquisition was found, on the available material and authoritative guidance, to be for a public purpose and because the urgency provisions of Section 17 (as amended) applied, the petitioners' challenge failed on both substantive and procedural grounds.

Holding and Implications

Holding: Petition dismissed.

Implications and immediate consequences:

The court held that, on the record before it (including the Section 6 declaration and the State's written assertion that acquisition costs would be met from public funds), the acquisition was for a public purpose and not an acquisition solely for the private benefit of the company requiring the Part VII procedure.
The court accepted that the urgency powers under Section 17(2)(c) (as introduced by Punjab Act 47 of 1956) could properly be invoked even where some plots had existing structures, subject to the statutory proviso of giving at least forty-eight hours' notice before taking possession of buildings or parts of buildings.
Procedurally, the omnibus nature of the petition (lack of separate identification of plot numbers for each petitioner) was a fatal defect insofar as individualized relief could not be ordered; the Court noted that relief could have been pursued for an individual petitioner but none was selected for determination.
No order as to costs was made.
The opinion does not purport to lay down a new precedent beyond applying existing Supreme Court authority to the facts; its effect is to uphold the impugned acquisition on the particular record before the Court rather than to announce a novel legal principle.

Summary prepared strictly on the basis of the provided opinion. No information beyond the opinion has been added or inferred.

Show full summary ...

Jaishi Ram Goel And Others v. State Of Punjab, Through Secretary, Industries Department, Punjab Government, Chandigarh And Others

1. The petitioners are owners of varies plots of land with structures erected on some of them, which are situated in Mauza Pamala or Mauza Bahadurgarh Tehsil Jhajjar, and by the present petition under Article 226 of the Constitution they have challenged the acquisition proceedings relating to the aforesaid land. A notification toed 16th February 1961 was issued by the Punjab Government under Section 4 of the Land Acquisition Act, 1894 (hereinafter called the Act), wherein it was stated that the land in question was likely to be required by the Government at public expense for a public purpose, namely, for setting up a factory for the manufacture of sanitary wares etc. at villages Parnala and Bahadurgarh Tehsil Jhajjar, District Rohtak, and it was notified that the land in the locality, of which description was given, was likely to be required for the above purpose. Further in exercise of the powers under the Act, the Governor of the Punjab directed that action under Sec. 17(1) shall be taken in this case on the grounds of urgency and provisions of Sec. 5-A shall not apply in regard to this acquisition (Annexure ‘C’). This was followed by another notification dated 17th February 1961 which contained a declaration under the provisions of Section 6 of the Act, the opening part being the same as has already been set out in respect of the notification under Sec. 4. In this notification it was further stated that in view of the urgency of the acquisition the Governor, in exercise of the powers under Section 17(2)(c) of the Act, had directed that the Collector, Rohtak, shall proceed to take possession of the land (Annexure ‘B’).

2. According to the allegations in the petition the entire acquisition proceedings initiated, taken and proposed to be taken in pursuance of the aforesaid notifications suffered from a number of infirmities. It is alleged inter alia that the acquisition proceedings are being taken for the sake of and at the cost of “Hindusthan Twyfords Limited” incorporated on 8th February 1950 at Calcutta under the Indian Companies Act, 1956. This Company has been impleaded as respondent No. 4. This respondent proposed to set up and construct a plant or a factory for the purpose of manufacture and production of sanitary-wares near Bahadurgarh. The prospectus shows that it was intended to acquire about 30 or more acres of land for that purpose by the Company. Certain plots of land had been purchased by the Company by private treaty, those plots being adjacent to or surrounded by the plots of land notified for acquisition.

3. According to the petitioners, the land of respondent No. 4 had been purposely left out of the notices for acquisition because the acquisition was being made for the benefit of respondent No. 4 and the entire cost was being met by the aforesaid respondent. The petitioners asserted that the acquisition was not to be made out of whole or any part of public funds as there was no provision in the budget of the State in respect of the costs involved in the said acquisition. Thus the case of the petitioners substantially is that the acquisition of the land in question is being made for the aforesaid Company and this is being done by circumventing the entire provisions contained in Part VII of the Act which alone were applicable in this case. That part of the notification directing that the provisions of section 5-A shall not apply as also the exercise of powers under Section 17 of the as amended by the Land Acquisition (Punjab Amendment) Act, 1953, have been challenged.

4. The written statement filed on behalf of the State is not a very illuminating one. However, it is stated that the land was being acquired for public purpose at public expense, the compensation for which would be paid from public funds. An objection was also raised that the determination of “public purpose” was not justiciable. The exercise of powers under Sec. 5-A and Sec. 17 is sought to be justified. The arguments have, however, proceeded on the assumption that ultimately the land will be placed at the disposal of the aforesaid company.

5. The learned counsel for the petitioners has referred to the relevant provisions of the Act to indicate that there are three ways of making a valid acquisition. The first one is where it is made for a Public purpose by the State. Secondly, it can be made for a Company for the purpose of public e.g whether the Government subsidizes a scheme or promotes and itself contributes towards the development of a scheme for the benefit of the community. Thirdly, there can be acquisition for the benefit and use of a Company alone. It is submitted that in the present case the acquisition is not being made for any public purpose and that it is solely being done for the benefit and use of a private Company that has been promoted for making profit for its members. It is not denied that acquisition could be made for such a Company but it is vehemently urged that can be done only under the provisions contained in Part VII which begins with S. 38 and ends with Sec. 44.

6. According to the points canvassed on behalf of the petitioners an acquisition can be validly made under lie Act, apart from the provisions contained an Part VII, only when it is made for a public purpose that being a justiciable issue. Reliance in this connection has been placed on State Of Bombay … v. R. S. Nanji…, (S) AIR 1956 SC 294, Satya Narayan v. State of West Bengal, 61 Cal WN 420 : ((S) AIR 1957 Cal 310) and Gobardhan Jayaswal v. First Land Acquisition Collector, 62 Cal WN 158, as also a Bench decision of this Court in Bhagwat Dayal v. Union of India, AIR 1959 Punj 544. The learned Advocate-General submits that the first three cases would not be of such assistance as they did not relate to proceedings under the Act. He has sought to distinguish them by referring to the observations made in Jhandu Lal v. State of Punjab, AIR 1961 SC 343, with regard to the applicability of Article 31 of the Constitution, the suggestion being that the Act was immune from the attack based on the provisions of Article 31(2) owing to the provisions contained in clause 5(a) of that Article which saved an existing law of the nature of the Act.

7. The Bench decision of this Court, however related to the Act but its correctness is assailed for the aforesaid reason. The Bench has held that the State Government must initially determine whether a particular purpose is or is not a public purpose and whether the acquisition of a particular piece of land would serve that public purpose. This determination is not final and when the question is raised before Courts of law then it is their duty to determine the nature of the purpose for which the land is being acquired. There is, however, a presumption that the decision of the State Government on this question is correct, though this presumption is rebuttable. Sitting singly it is not possible for me to take a view different from the one expressed by the Bench. Even if it be assumed that the correctness of that view is not shaken by the decision of the Supreme Court in AIR 1961 SC 343 and Barkya Thakur v. State of Bombay (now Maharashtra), AIR 1960 SC 1203, the learned Advocate-General has sought to argue that both the requirement of public purpose as also the requirement that the acquisition should be at public expense have been fully satisfied in the present case.

8. My attention has been invited to AIR 1960 SC 1203 where the notification under Sec. 4 was in similar terms, namely, that the land was stated to be needed for a Company for its factory buildings etc. Their Lordships observed that acquisition for a Company would in substance be for a public purpose inasmuch as it could not be seriously contended that constructing dwelling houses and providing amenities for the benefit of the workmen employed by it and construction of some work of public utility did not serve a public purpose. Their Lord shit proceeded further to observe:

“It is not necessary for the purposes of this case to go into the question whether acquisition for a Company, even apart from the provisions of S. 40, will be for a public purpose, or justifiable under the provisions of the Act even on the assumption that it will not serve a public purpose. The facts or the present case have not been investigated, as this Court was moved when only a notification under Section 4 of the Act had been issued; and the purpose of the acquisition in question was still at the enquiry stage.”

9. In the present case, however, the purpose was declared under Sec. 6 and that declaration, so it is said by the learned Advocate-General shall be taken to be conclusive evidence that the land is needed for a public purpose in accordance with sub-section (3) of Sec. 6 of the Act Alternatively the submission made is that setting up of an industry which would provide modern conveniences in the shape of sanitary-wares would be a work of public utility and thus one of the tests indicated by the Supreme Court in AIR 1960 SC 1203 would be satisfied. Reference is also made to S. 40(1)(b) which appears in Part VII of the Act and which is to the following effect:

“40. Previous enquiry. (1) Such consent shall not be given unless the appropriate Government be satisfied, either on the report of the Collector under Sec. 5-A, sub-section (2), or by an enquiry held as hereinafter provided:

(a) * * * * * * * * * * * * * * *

(b) that such acquisition is needed for the construction of some work and that such work is likely to prove useful to the public.”

10. The learned counsel for the petitioners has relied on a discussion with regard to the meaning of the expression “public purpose” in Mr. D.N Bannerjee's Fundamental Rights, pages 362 to 373, where a number of Indian and American decisions have been mentioned, but the law has been laid down for our propose in the above decision of the Supreme Court (Barkya Thakur's case) AIR 1960 SC 1203) in which at page 1205 the learned Chief Justice has observed:

“It will thus be noticed that the expression ‘public purpose’ has been used in its generic sense of including any purpose in which even a fraction of the community may be interested or by which it may be benefited.”

11. Now, this cannot be denied that whenever a factory for manufacturing purposes is to be set up, dwelling houses will also have to be constructed for workers and other buildings will have to be built up for providing amenities for their benefit. The Supreme Court itself expressed that view, to which reference has already been made. Moreover, it will not be inaccurate to say that certain members of the community would benefit by the setting up of such a factory where a new industry will be developed, the cost of sanitary wares which are; imported being very high and thus a work of public utility would be established. As a declaration under section 6 has already been made at least a presumption must be raised that the acquisition is being made for a public purpose. The facts alleged by the petitioners to the extent they are not disputed are not sufficient to rebut that presumption. I would, accordingly, hold that the acquisition in the present case is being made for a public purpose. Once that conclusion is reached, the ratio of the decision in AIR 1961 SC 343 will at once become applicable.

12. In that case it has been laid down in categorical terms that in case of an acquisition for a Company simpliciter, a declaration under section 6 of the Act cannot be made without satisfying the requirements of Part VII. But, that does not necessarily mean that an acquisition for a Company for a public purpose cannot be made otherwise than under the provisions of Part VII, if the cost or a portion of the cost of the acquisition is to come out of public funds. According to Sinha, C.J:

“In other words, the essential condition for acquisition for a public purpose is that the cost of the acquisition should be borne, wholly or in part out of public funds. Hence, an acquisition for a Company may also be made for a public purpose, within the meaning of the Act, if a part or the whole of the cost of acquisition is met by public funds. If on the other hand, the acquisition for a Company is to be made at the cost entirely of the Company itself, such an acquisition comes under the provisions of Part VII. As in the present instance, it appears that part at any rate of the compensation to be awarded for the acquisition is to come eventually from out of public revenues, it must be held that the acquisition is not for a Company simpliciter. It was not, therefore, necessary to go through the procedure prescribed by Part VII.”

13. In the present case the written statement contains a definite assertion that the cost of acquisition shall be borne out of the public funds. It cannot consequently be held according to the above Supreme Court decision that the acquisition is for a Company simpliciter and it is necessary to go through the procedure prescribed by Part VII.

14. The learned counsel for the petitioner has drawn my attention to a report made by the Tehsildar which is attached as ‘R/1’ to the written statement wherein it is stated that quite a number of plots which are being acquired have structures of various natures and some of, them are residential plots. It is pointed out that under section 17(1) it is only waste or arable land in respect of which powers can be exercised. It is submitted that it is not possible to regard the aforesaid plots on which structures are admitted to be existing as waste or arable. By the Punjab Act 47 of 1956, however, an amendment has been introduced in section 17 by the addition of clause (c) in sub-section (2). That provision is to the effect that whenever land is required for a public purpose which, in the opinion of the appropriate Government is of urgent importance, the Collector may, immediately after the publication of the notice mentioned in sub-section (1) and with the previous sanction of the appropriate Government enter upon and take possession of such land, provided he shall not take possession of any building or part of the building without giving to the occupier thereof at least forty-eight hours notice of his intention to do so.

15. It is submitted by the learned Advocate-General that clause (c) covers the present case as notice under section 9, sub-section (1) as mentioned in section 17(1) was duly published and it is implicit in the proviso to clause (c) that possession can be taken even of those lands on which buildings exist. The learned counsel for the petitioners has not been able to controvert this position. Moreover, it is not possible to take any serious notice of the contention advanced on behalf of the petitioners. In respect of the exercise of powers under section 17 for the simple reason that since a number of petitioners have preferred the petition, the numbers of their plots are not stated separately and individually, and such an omnibus petition on behalf of these petitioners cannot be entertained. All that could be done was to grant relief to one petitioner whomsoever the learned counsel might have selected for pressing the claim but that has neither been done nor indeed it was possible to do in the absence of separating the numbers of the plots belonging to that petitioner. In the result, this petition fails and it is dismissed, but in view of all the circumstances I make no order as to costs.

JE/M/D.R.R

16. Petition dismissed.

Jaishi Ram Goel And ... v. State Of Punjab, Thr...