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Girdhrilal Amratlal Shodan And Others v. State Of Gujarat And Others .
Factual and Procedural Background
The State of Gujarat issued a notification on 3 August 1960 under Section 4 of the Land Acquisition Act, 1894 (“the Act”) proposing to acquire about 7,151 sq. yards in Final Plot No. 460, Elisbridge, Ahmedabad, for construction of houses for the Shri Krishnakunj Government Servants Co-operative Housing Society Ltd. The land formed part of a trust administered by Appellant 1 for the benefit of Appellants 2–6.
Following the Section 5-A enquiry, a declaration under Section 6 was made on 18 July 1961 stating that compensation would be paid entirely by the Housing Society. The appellants filed a writ petition in the Gujarat High Court to quash that declaration. During the pendency of the petition, the Government cancelled the 18 July 1961 declaration on 28 April 1964 and, on 14 August 1964, issued a new Section 6 declaration specifying that the acquisition would now be “at public expense.” The writ petition was amended to challenge both the original Section 4 notification and the fresh Section 6 declaration. On 2 April 1965 the High Court dismissed the petition. The present appeal to the Supreme Court was preferred on a certificate granted by the High Court.
Legal Issues Presented
- Whether cancellation of the invalid Section 6 declaration dated 18 July 1961 amounted to a withdrawal from the acquisition under Section 48 of the Act, thereby necessitating a fresh Section 4 notification and a new Section 5-A enquiry before issuing the declaration dated 14 August 1964.
- Whether the State Government’s power under Section 6 is exhausted after issuing one declaration, even if that declaration is later found invalid.
- Whether the interval between the Section 4 notification (3 August 1960) and the fresh Section 6 declaration (14 August 1964) was so unreasonable as to vitiate the latter declaration.
- Whether the “public purpose” described in the second Section 6 declaration differed materially from that in the first declaration, thus requiring a new Section 4 notification (an issue raised in the High Court but not pursued before the Supreme Court).
Arguments of the Parties
Appellants’ Arguments
- Section 21 of the General Clauses Act, 1897, permits cancellation of a Section 6 declaration only if the Government withdraws from the acquisition under Section 48; hence cancellation of the 1961 declaration implicitly cancelled the 1960 Section 4 notification, making the 1964 Section 6 declaration void for want of a fresh Section 4 notification and enquiry.
- The statutory power to make a declaration under Section 6 can be exercised only once; having issued the 1961 declaration, the Government’s power was exhausted.
- The 1964 declaration was issued after an unreasonable delay following the 1960 Section 4 notification and is therefore invalid.
Respondents’ Arguments
- The 1961 declaration was void ab initio because it contemplated compensation wholly at the expense of a private company, contrary to the proviso to Section 6; its cancellation merely acknowledged that voidness and did not constitute withdrawal under Section 48.
- Because the first declaration was invalid, the Government’s power under Section 6 remained unexercised and could be validly exercised in 1964.
- Any alleged delay is not justiciable at this stage, especially as interim injunctions obtained by the appellants impeded progress of the acquisition.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Shyam Behari v. State of Madhya Pradesh (1964) 6 SCR 636; AIR 1965 SC 427 | A Section 6 declaration is incompetent if compensation is to be paid entirely by a private company. | Used to hold that the 18 July 1961 Section 6 declaration was invalid because compensation was to be paid wholly by the co-operative society. |
Court's Reasoning and Analysis
The Court began by declaring the 18 July 1961 Section 6 notification “invalid and of no effect” because it contravened the proviso to Section 6, which permits acquisition for a public purpose only where compensation is to be paid wholly or partly from public revenues or funds controlled by a local authority. Citing Shyam Behari, the Court observed that acquisition funded entirely by a private company is ultra vires.
Because the first declaration was void, its cancellation on 28 April 1964 was merely a formal acknowledgement of that voidness, not a withdrawal from acquisition under Section 48. Consequently, Section 48 posed no bar to issuing a fresh, valid Section 6 declaration.
The Court rejected the exhaustion argument, reasoning that an invalid exercise of power under Section 6 does not preclude a subsequent valid exercise; the State had never effectively exercised its Section 6 power until the valid declaration of 14 August 1964.
On the allegation of unreasonable delay, the Court declined to entertain the point because it had not been raised or investigated in the High Court. It also noted that interim injunctions obtained by the appellants had impeded the acquisition process, further complicating any assessment of delay.
The contention that the second declaration stated a different public purpose had already been decided against the appellants in the High Court and was expressly abandoned before the Supreme Court.
Holding and Implications
DISMISSED. The Supreme Court affirmed the Gujarat High Court’s dismissal of the writ petition and ordered the appellants to pay costs.
Practical consequence: the acquisition may proceed on the basis of the 14 August 1964 Section 6 declaration. Broader implication: where a Section 6 declaration is invalid owing to statutory non-compliance, the Government may treat it as nullity and issue a fresh, valid declaration without first issuing a new Section 4 notification, provided the earlier declaration was void ab initio and there has been no withdrawal under Section 48. The decision does not set new precedent but clarifies the interaction between Sections 6 and 48 when the initial declaration is legally defective.
Bachawat, J.— On August, 3, 1960, the Government of Gujarat issued a notification under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as “the Act”) stating that the land measuring about 7151 sq. yards in Final Plot No. 460 of the Town Planning Scheme No. III of Elisbridge in Ahmedabad taluka city, village Changispur, was likely to be needed for a public purpose viz. for construction of houses for Shri Krishnakunj Government Servants Cooperative Housing Society, Ltd., Ahmedabad. The land is the subject-matter of a trust of which Appellant 1 is the trustee and Appellants 2 to 6 are the beneficiaries. An enquiry under Section 5-A of the Act was duly held, and a report under section 5-A(2) was made to the Government. On July 18, 1961, the State Government issued a notification under Section 6 of the Act stating that the land was needed to be acquired for the aforesaid public purpose at the expense of Shri Krishnakunj Government Servants co-operative Housing Society Ltd. On September 22, 1961, the appellants filed a writ application in the High Court of Gujarat praying for an order quashing the notification under Section 6 dated July 18, 1961. During the pendency of this application, the Government issued a notification dated April 28, 1964 cancelling the aforesaid notification dated July 18, 1961. On August 14, 1964, the Government issued a fresh notification under Section 6 stating that the land was needed to be acquired at the public expense for a public purpose viz. for the housing scheme undertaken by Shri Krishnakunj Government Servants Cooperative Housing Society, Ltd., Ahmedabad with the sanction of the Government. The appellants were thereupon allowed to amend the writ petition, and by the amended writ petition, they prayed for an order quashing the notification under Section 6 dated August 14, 1964 as also the notification under Section 4 dated August 3, 1960. On April 2, 1965, the High Court dismissed the application. The appellants now appeal to this Court on a certificate granted by the High Court.
2. Counsel for the appellants submitted that the power of the State Government to cancel a notification under Section 6 of the Act implied by Section 21 of the General Clauses Act, 1897 is subject to the condition that the Government should withdraw from the acquisition as provided for in Section 48 of the Act, by cancelling the notification under Section 6 dated July 18, 1961, the Government must be taken to have withdrawn from the acquisition and cancelled the notification under Section 4 dated August 3, 1960 also and consequently the Government could not issue the notification under Section 6 dated August 14, 1964 without issuing a fresh notification under Section 4 and making a fresh enquiry under Section 5-A. Counsel for the respondents disputed the correctness of this submission.
3. It is to be noticed that the notification under Section 6 dated July 18, 1961 stated that the land was required for a public purpose at the expense of Shri Krishnakunj Government Servants Cooperative Housing Society Ltd. The Government had no power to issue this notification. Having regard to the proviso to Section 6 of the Act, a declaration for acquisition of the land for a public purpose could only be made if the compensation to be awarded for it was to be paid wholly or partly out of public revenues or some fund controlled or managed by a local authority. The Government had no power to issue a notification for acquisition for a public purpose where the compensation was to be paid entirely by a company. The notification dated July 18, 1961 was, therefore, invalid and of no effect, see Shyam Behari v. State of Madhya Pradesh (1964) 6 SCR 636, AIR 1965 SC 427. The appellants filed the writ petition challenging the aforesaid notification on this ground. The challenge was Justified and the notification was liable to be quashed by the Court. The State Government realised that the notification was invalid, and without waiting for an order of Court, cancelled the notification on April 28, 1964 The cancellation was in recognition of the invalidity of the notification. The Government had no intention of withdrawing from the acquisition. Soon after the cancellation, the Government issued a fresh notification under Section 6 where, as in this case, the notification under Section 6 is incompetent and invalid, the Government may treat it as ineffective and issue a fresh notification under Section 6. This is what, in substances the Government did in this case. The cancellation on April 28, 1964 was no more than a recognition of the invalidity of the earlier notification. There is nothing in Section 48, which precluded the Government from treating the earlier invalid notification as ineffective and issuing in its place an effective notification under Section 6. Where the notification under Section 6 is lawful and valid, a question may well arise whether the Government can cancel it without withdrawing from the acquisition, as provided for under Section 48. But no such question arises in this case and we express no opinion on it.
4. Counsel for the appellants next submitted that on issuing the notification dated July 18, 1961 the power of the State Government to issue a notification under Section 6 was exhausted and the Government could not issue a fresh notification under Section 6. There is no substance in this contention. The notification dated July 18, 1961 was invalid. By the issue of this notification, the Government had not effectively exercised its power under Section 6. In the circumstances, the Government could well issue the fresh notification under Section 6 dated August 14, 1964.
5. Counsel for the appellants next submitted that the notification under Section 6 must be issued without unreasonable delay after the issue of the notification under Section 4 and consequently, the notification dated August 14, 1964 is invalid, as it was issued after unreasonable delay. This contention was not raised in the High Court. On September 25, 1961, soon after the filing of the writ petition, the appellants obtained an injunction restraining the Government from proceeding with the acquisition. We are informed that this injunction continued for some time and was modified at a later date. Until the modification of the injunction, the Government could not take further steps in the acquisition. The question whether there was unreasonable delay in the issuing of the notification dated August 14, 1964 was not put in issue and was not investigated in the court below. We, therefore, indicated in the course of the argument that the appellants cannot be allowed to urge this point for the first time in this Court. We express no opinion one way or the other whether the Government is bound to issue the notification under Section 6 without reasonable delay after the issue of the notification under Section 4.
6. In the High Court, the appellants contended that the public purpose set out in the notification dated August 14, 1964 was different from the public purpose set out in the notification dated July 18, 1961 and the Government could not issue the notification dated August 14, 1964 without issuing a fresh notification under Section 4. The High Court repelled this contention. It found that the public purpose set out in the notification dated August 14, 1964 was identical with the public purpose set out in the notification dated July 18, 1961. This finding is no longer challenged before us.
7. The appeal fails and is dismissed with costs.
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