Sam Hiring Co. v. A.R Bhujbal And Others, Supreme Court Of India, Judgment, Law, casemine.com

Factual and Procedural Background

The appellant is a tenant of a structure situated on City Survey No. 56 in Bombay. The Maharashtra Housing and Area Development Board determined that the superstructures on this plot were dilapidated and, under the Maharashtra Housing and Area Development Act, 1976 (“the Act”), formulated a reconstruction scheme that required acquisition and demolition of the existing buildings. In 1981, all structures on the plot—except the one occupied by the appellant—were demolished, and the other occupants have since been housed in a transit camp.

During the acquisition process, notices under Section 5-A of the Act were issued. The appellant objected, claiming its premises were an independent building outside City Survey No. 56 and therefore not subject to acquisition. The Land Acquisition Officer sought a factual report from the Executive Engineer, ultimately recommending that acquisition proceed. The Division Bench of the Bombay High Court rejected the appellant’s challenge in Appeal No. 893 of 1992. The present appeal before the Supreme Court is from that decision.

Legal Issues Presented

Whether the appellant’s structure is an independent building outside City Survey No. 56 or a part of it, and thus liable to acquisition under the Act.

Whether the building’s classification as a “non-cess payable” structure under Sections 2(7) and 2(9) of the Act exempts it from acquisition if the cost of reconstruction is ≤ Rs 500 per sq. m.

Whether principles of natural justice were violated because the Land Acquisition Officer did not grant a further personal hearing or allow cross-examination of the Executive Engineer after receiving his report.

Whether the Land Acquisition Officer was obliged to give detailed findings on each individual objection before forwarding the proposal for acquisition.

Arguments of the Parties

Appellant's Arguments

Under Sections 2(7) and 2(9) of the Act, the premises are a “non-cess payable” building; if reconstruction cost is ≤ Rs 500 per sq. m., the structure cannot be demolished or acquired. A certificate to that effect had already been obtained.

The premises form an independent building separate from City Survey No. 56; therefore, they fall outside the scope of the reconstruction scheme.

The Land Acquisition Officer violated natural justice by not granting a fresh hearing after receiving the Executive Engineer’s report and by denying the appellant an opportunity to cross-examine the Engineer.

The Officer failed to record specific findings on each objection raised, rendering the decision procedurally defective.

Respondent's Position

The respondent, represented by Shri M. L. Verma, opposed all the appellant’s contentions. Detailed arguments were not specified in the opinion.

Court's Reasoning and Analysis

The Supreme Court first addressed whether the appellant’s structure is part of City Survey No. 56. It noted that counsel for the appellant in the High Court had already conceded that the shed was located within that plot. The Court relied on Section 2(7) of the Act, whose definition of “building” expressly includes tenements, sheds, and similar structures. Accordingly, the appellant’s premises fall within the reconstruction scheme, and their “non-cess payable” status under Section 2(9) is immaterial once the structure is acknowledged as part of City Survey No. 56.

Turning to procedural objections, the Court observed that the Land Acquisition Officer is an administrative—not judicial—authority exercising powers under Section 5-A. The Officer afforded the appellant a hearing, considered its objections, and, for factual clarity, obtained a report from the Executive Engineer. The report was described as beneficial—not adverse—to the appellant, negating any requirement for an additional hearing or cross-examination. The Court concluded that principles of natural justice were satisfied; the Officer was not obliged to give elaborate written findings on every objection.

Because the structures on the plot were found to be dilapidated, demolition and reconstruction were considered necessary. No error of law or procedural irregularity warranting interference was identified.

Holding and Implications

HOLDING: The appeal is dismissed.

Implications: The demolition and acquisition of the appellant’s structure may proceed under the reconstruction scheme. The decision resolves the dispute between these parties but does not purport to create new legal precedent; it chiefly applies established principles of statutory interpretation and natural justice to the facts at hand.

Sam Hiring Co. v. A.R Bhujbal And Others

Order

1. Leave granted.

2. We have heard the learned counsel on both sides. This appeal arises from the order of the Division Bench of the Bombay High Court made in Appeal No. 893 of 1992. The facts lying in a short compass are stated as under:

The appellant is the tenant of the land which is a part of City Survey No. 56, which was sought to be acquired under the Maharashtra Housing and Area Development Act, 1976, (for short ‘Act’). The superstructure in City Survey No. 56 was in a dilapidated condition. Therefore, the Bombay Housing and Area Development Board had examined the position and decided that a scheme was required to be framed under the Act for reconstruction and thereafter for allotment to the persons in occupation. When the acquisition proceedings were initiated after finalisation of the scheme, notices were given under Section 5-A to the interested persons including the appellant. The appellant had raised the contention that the tenement in which it was carrying on the business was not part of the City Survey No. 56. It is an independent building and, therefore, it is not liable to be demolished for acquisition. Based upon that objection, a report was called for from the Executive Engineer who submitted the report thereon to the Land Acquisition Officer. After considering the report, he submitted a proposal for proceeding with the acquisition. It is not in dispute that except this structure, all other structures have been demolished in 1981 and the construction is yet to start. Ever since all others are, unfortunately, in transit camp.

3. Shri S.K Dholakia, learned Senior Counsel for the appellant, has contended that by operation of the provisions of Section 2(7) read with Section 2(9), the building in occupation of the appellant is non-cess payable building. Consequently, the building which is in exclusive possession in Chapter VIII, is not liable to be proceeded with, if the value of the reconstruction is Rs 500 per sq. m. or below. Since a certificate in that behalf has already been issued in support thereof, the action taken for demolition and acquisition is not according to law. After the report submitted by the Executive Engineer, the Land Acquisition Officer had not given any independent hearing nor called the Executive Engineer for cross-examination. Therefore, it is violative of the principles of natural justice. The third contention raised is that the Land Acquisition Officer should have considered all the objections and given a finding on each of the objections before submitting his proposal for further action. Shri M.L Verma, learned Senior Counsel resisted all these contentions.

4. Having given our consideration to the respective contentions, the question arises whether the structure of which the appellant is tenant is an independent building in City Survey No. 56? Before the Division Bench of the High Court, the counterpart of Shri S.K Dholakia had conceded that the principal contention raised was that the shed only “is not liable to be acquired even though the shed is a part of the plot, City Survey No. 56”. The gravamen of the complaint is that the Board can move the Government only to acquire the building for the purpose of reconstruction exercising power under Section 76(d) of the Act. The Division Bench has held that a plain reading of Section 2(7) of the definition of ‘building’ makes it clear that it includes a tenement let or intended to be let or occupied separately and a house, outhouse, stable, shed, hut and every other such structure. On account of that finding, it was held that the structure in which the appellant has been carrying on the business is part of City Survey No. 56 as has been conceded by the learned counsel who appeared for the appellant in the High Court and as such is liable to be acquired. Once it is concluded that he is a tenant or that his shed is part of the building, the question whether the tenant is independently paying cess under the Act as defined under Section 2(9) is not of much relevance. It must, therefore, be concluded that the structure in which the appellant is carrying on his business is a part of the City Survey No. 56. The finding of the authorities cannot be disputed that the structures are in a dilapidated condition and require demolition for reconstruction. It being a finding of fact, the necessary conclusion is that restructure requires to be done in accordance with law.

5. The question then is: Whether the appellant is entitled to the further hearing? After the report was submitted by the Executive Engineer with regard to the objections raised by the appellant, the Division Bench of the High Court has pointed out that the Land Acquisition Officer had considered the objections after hearing him and with a view to satisfy himself whether the objections raised by the appellant were tenable, he required factual material and so he called for the report from the Executive Engineer. The Executive Engineer's report was submitted clearing the position and the finding is not adverse to the appellant but beneficial to him. Therefore, the need to give further opportunity does not arise nor is there any need to call the Executive Engineer for cross-examination. Accordingly, the principle of natural justice has not been violated.

6. The Land Acquisition Officer is not a judicial authority or a quasi-judicial authority. He exercised the power under Section 5-A, as an administrative authority. But the Act requires that he should consider the objections and, if asked, to give an opportunity of hearing. In this case, opportunity of hearing was given and the objections raised were considered. The principle of natural justice has been complied with. He was not required to elaborately deal with each of the objections and submit the report. Considered from this perspective, we do not think that there is any error of law warranting interference.

7. The appeal is accordingly dismissed. No costs.

Civil Appeal No. 2503 of 1996, decided on January 12, 1996

Sam Hiring Co. v. A.R Bhujbal And Others

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Respondent's Position

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Sam Hiring Co. v. A.R Bhujbal And Others

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