Mr. Kadidal Manjappa, Mr. V. Tarakaram, Mr. C.R.V Swamy, Mr. Y.K Narayana Sharma for Appellants.

Mr. S.V Jagannath, Govt

NOTE: ORDER IN ILR 1987 KAR 3008 AFFIRMED C.A NOS. 2323-38 of 1988 DISMISSED VIDE REPORT HEREINBELOW

The Judgment of the Court was delivered by

Shivashankar Bhat, J.:— These appeals are by the Writ Petitioners, whose Writ Petitions were dismissed by the learned Single Judge. The petitioners challenged the land acquisition proceedings by questioning the Notification issued under Section 4(1) of the Land Acquisition Act and the Declaration made under Section 6(1) thereof.

2. Petitioners, assert that they are the owners of various lands sought to be acquired for the benefit of Vijaya Bank Employees Housing Co-operative Society Ltd., (referred hereinafter as ‘the Society’). By a Notification dated 30-5-1983 published in the Gazette dated 16-6-1983, the State Government notified under Section 4(1) of the Land Acquisition Act as in force in Karnataka by the amendment made by the Karnataka Act 17/1961, that “the lands specified in the schedule to the notification are likely to be needed for the public purpose to wit for the Members of the Vijaya Bank Employees Housing Co-operative Society Ltd., Bangalore at Bilekahalli village, Begur Hobli, Bangalore South Taluk, Bangalore District.” Public notice was caused to be issued on 2-7-1983 (vide Annexure-B in W.A No. 1084 to 1089/87). Many of the petitioners (appellants herein) filed their objections to the proposed acquisition. After the enquiry under Section 5-A and the receipt of the report, State Government made a Declaration under Section 6(1) on 1-6-1985 (published in the Karnataka Gazette dated 20-6-1985), relevant para of which reads thus:

“Whereas the Special Deputy Commissioner, Bangalore District, Bangalore, in his Notification No. LAQ(i) CR 177/81-82 dated 30th May 1983 published in the Karnataka Gazette, dated 16th June 1983 in part IX at pages 569 to 576 has notified that the land specified in the schedule hereto are likely to be heeded for a public purpose to wit for Vijaya Bank Employees Housing Co-operative Society Limited, Bangalore;

And whereas the Government of Karnataka is satisfied after considering the report of the Special Deputy Commissioner, under sub-section (2) of Section 5-A and Section 6(1A) of the Land Acquisition Act, 1894 (Central Act 1/1894) as amended by Karnataka Act No. 17 of 1961, and Land Acquisition Amendment Act No. 68 of 1984 that the said land are needed to be acquired for the purpose specified above.

It is hereby declared under Section 6 of the said Act that the land are required for the purpose stated above.”

3. W.P Nos. 14940 to 14944 of 1985 are dated 12-9-1985; W.P Nos. 10864 to 10875 of 1985 are dated 15-7-1985; W.P Nos. 13416 to 13429 of 1985 are dated 26-8-1985; W.P No. 14065/85 is dated 9-9-1985 and W.P No. 2311/1987 is dated 2-2-1987. Various grounds though raised in the Writ Petitions, three grounds, ultimately urged, as seen from the order of the learned Single Judge, were:—

“(i) The Spl. L.A.O was not authorised to issue notice on 2-7-1983 and therefore all subsequent proceedings are illegal and without jurisdiction notwithstanding the issue of notification dated 12-7-1984 extracted above; (i.e, the order appointing him).

(ii) The acquisition is for a Company-Housing Co-operative Society is a Company-Acquisition for ‘public purpose’ excludes acquisition for a Company since admittedly the Company Rules 1973 are not followed the acquisition is bad. It was contended that both the Notifications are liable to be quashed;

(iii) The exercise of power is colourable, all proceedings are violative of Article 14 of the Constitution of India.”

4. The learned Single Judge negatived all the contentions urged by the petitioners, by holding that, —

(i) By the time objections were received, Notification dated 12-7-1984 empowering the Special Land Acquisition Officer to perform the functions of Deputy Commissioner under the provisions of the Land Acquisition Act had been issued. The hearing of objections on 20-7-1984 and all further proceedings were conducted by the said Duly Empowered Officer. The earlier steps of issuance of notices and receiving the objections were of minor matter and therefore, there has been a substantial compliance with the requirements of law. Even otherwise, by the application of de facto doctrine, these earlier actions of the Special Land Acquisition Officer are to be upheld;

(ii) The acquisition of land was contemplated, to be for a ‘public purpose’ and not for ‘a Company’, having regard to the language employed in the Notification under Section 4(1) and the Declaration under Section 6(1). This apart, on 26-10-1985, the State Government made a contribution of Rs. 100/- out of public revenue towards the acquisition of the lands in question. The Declaration of the Government made under Section 6(1) that land was needed for a public purpose, was conclusive;

(iii) Acquisition cannot be held, a colourable exercise of power by the Government, by contributing a nominal sum of Rs. 100/- towards the cost of acquisition, specially because, acquisition is for the benefit of Members of a Co-operative Society; and

(iv) W.P No. 2311/1987 dated 2-2-1987 suffers from delay and laches, since, the petitioner was aware of the Declaration and he had filed his claim petition on 14-5-1986. Knowledge of acquisition proceedings should be attributed to him earlier itself, in view of the large extent of lands belong to several persons was sought to be acquired, in the same village.

5. In these appeals, the main ground urged by the several learned Counsel for the appellants, was, that, after the amendments made to the Land Acquisition Act by the Central Act 68/1984, a clear dichotomy exists between the purposes of acquisition and therefore, any acquisition for a ‘Company’ (a term which includes a Co-operative Society) can be made only by following the procedure prescribed under Part VII of the Act, and no acquisition of land can be made for a Company calling it a ‘public purpose’. This Amendment Act having come into force with effect from 24-9-1984 govern all acquisition proceedings thereafter, including a proceeding initiated earlier by issuance of Section 4(1) Notifications, but pending without a Declaration being made under Section 6 as on the said day of 24-9-1984.

6. Thus the contention raised is, whether the State Government was competent to acquire the lands for the benefit of a Society (Company), by calling it as, for a ‘public purpose’ after the coming into force of the Amendment Act of 1984. This question, in this case also involves the consideration of a further question, as to whether, a proceeding pending by issuance of a Section 4(1) Notification issued prior to the said Amendment Act, can be continued under the prior law or the proceedings will have to be completed by recourse to the Amended provisions.

7. Petitioners' line of argument proceeded thus:—

Till the Amendment Act of 1984, land could have been acquired for a Co-operative Society if it is a public purpose, in which case a contribution towards a part of the cost of acquisition should come from the Government fund. If not, provisions of Part VII of the Act should be followed. This position is amply established by several decisions of the Supreme Court, some of which are referred hereinafter. However, on 24-9-1984, the Amendment Act of 1984 came into force. The definition of ‘public purpose’ though continued to be an inclusive definition, basically its character underwent a change. The definition specifically excluded from the definition, lands acquired for a Company. This aspect is further emphasised by amendments made to Section 4 and Section 6. Under these Sections, while issuing a Notification or making the Declaration, it was necessary after 24-9-1984 to state specifically whether the land was acquired for a public purpose or for a Company. Thus, the amendment made in the year 1984 brings in, a dichotomy between a ‘public purpose’ and a ‘Company.’

Statement of objects and reasons attached to the Bill in question was referred. The relevant passages read as follows:

“With the enormous expansion of State's role in promoting public welfare and economic development since independence, acquisition of land for public purpose, industrialisation building of institutions, etc., has become far more numerous than ever before. While this is initiative, promotion of public purpose has to be balanced by the rights of the individual whose land is acquired, thereby often depriving him of his means of livelihood. Again, acquisition of land for private enterprises ought not to be placed on the same footing as acquisition for the State or for an enterprise under it. The individual and institution who are unavoidably to be deprived of their property rights, in land, need to be adequately compensated for the loss keeping in view the sacrifice they have to make for the larger interests of the community. The pendency of acquisition proceedings to longer periods often cause hardship to the affected parties and renders unrealistic the scale of compensation offered to them.

It is necessary, therefore, to instructure the legislative frame work for acquisition of land so that it is more adequately informed by this objective of serving the interests of the community in harmony with the rights of the individual keeping the above objects in view and considering the recommendation of the Law Commission, the Land Acquisition Review Committee as well as the State Governments, institutions and individuals, proposals for amendment to the Land Acquisition Act, 1894, were formulated and a Bill for this purpose was introduced in the Loka Sabha on the 30th April, 1982. The same has not been passed by either the Home of Parliament since the introduction of the Bill, various other proposals for amendment of the Act have been received and they have also been considered in consultation with State Governments and other agencies. It is now proposed to include all these proposals in a fresh Bill after withdrawing the pending Bill. The main proposals for amendment are as follows:—

(i) The definition of ‘public purpose’ as contained in the Act is proposed to be so amended as to include a longer illustrative list retaining at the same time, the inclusive character.

(ii) Acquisition of land for non-Government Companies under the Act will hence forth be made in pursuance of Part VII of the Act in all cases.

(iii) A time limit of one year is proposed to be presented for completion of all formalities between the issue of PN under Section 4(1) of the Act and the Declaration for acquisition of specified land under Section 6(1) of the Act.”

There has been no housing scheme prepared by the Society and, at any rate, it was not sponsored with the prior approval of State Government, to attract Section 3(f)(vi) as now introduced by the Amendment Act of 1984. Throughout, the Authorities, the Society and the Government proceeded as if the acquisition was to be under the old provisions, or for a Company, - without complying with the provisions of Part VII. There has been uncertainty in the mind of the Government as to the purpose of acquisition. The token contribution made long after Section 6 Declaration cannot convert the acquisition for a Company, into an acquisition for a public purpose.

8. The learned Advocate General as also the Counsel for the Society, however, contended that, the acquisition was for a public purpose, as is clear from the Notification issued under Section 4(1) and the Declaration made under Section 6(1). The object sought to be achieved by the acquisition of land was for housing activities, which is a public purpose and that, by execution of agreements by the Society in favour of the Government, it was ensured that the Society would implement the scheme and use the lands for which they are to be acquired. Alternatively, it was argued that, there was due compliance with the provisions of Part VII and the acquisition has to be upheld, as for ‘a Company’. The learned Advocate General also pointed out that, there was no substantial difference between the definitions of ‘public purpose’, as found in Karnataka Act 17 of 1961 and the Amendment Act 1984, specially, regarding the acquisition of land for a Co-operative Society. Therefore, it was contended that, a satisfaction as to the ‘public purpose’ under the unamended provisions and the proceedings held under those provisions, substantially met the requirements of the new provisions, introduced by the Amendment Act, 1984.

9. Before considering the rival contentions, the aspect arising out of contribution from the public funds to the cost of acquisition may be considered. It is not the requirement of Sections 6, that the Declaration itself should contain a statement, that the State would contribute towards cost of acquisition. What is necessary, is, that, no such Declaration shall be made unless the compensation to be awarded is to be paid wholly or partly out of public revenues, etc., as per the proviso to Section 6(1) of the unamended Central Act (Parent Act). Under the Karnataka Act 17 of 1961, actually, there was no such requirement. Under the Amended Act (after the Amendment Act, 1984), this requirement is re-inducted into Karnataka, since the requirement is found as 2nd proviso to Section 6(1). This requirement is satisfied, if the intention existed to make the contribution. Nowhere the Act prescribes as to how the intention of the Government to make the contribution should be manifested. Existence of such an intention is a question of fact, inferrable from various circumstances. In this case, the learned Single Judge was satisfied from the challan produced before the Court evidencing the payment that a fraction of the cost of acquisition was met by contribution from the public revenue. It is not possible to reverse this finding, by holding the act of contribution was an after thought and a device adopted by the Government to sustain the acquisition proceedings.

10. Another aspect, which may be cleared here itself arises thus: In these Appeals, learned Advocate General produced before the Court, a file, to show that the agreements dated 31-1-1983 and 1-8-1984 were executed by the Society in favour of the Government assuring utilisation of the lands for the purpose for which they are to be acquired, and agreeing to pay such compensation as may be decided by the Special Deputy Commissioner and the Courts of Law and that, the lands would be utilised for construction of houses for the Members of the Society. An initial deposit of Rupees 35 lakhs by the Society with the Assistant Commissioner was also agreed upon and the same was paid on 23-6-1982. There were other Clauses to ensure due compliance with various requirements and to safeguard public interest. In case of failure to utilise the lands for the purpose for which they are acquired, Government was empowered to declare the transfer of land as null and void. However, procedure of hearing the land owners contemplated by Rule 4 was not followed. Relying on Gustavo Ranato Da Cruz Pinto's case . 1985 2 SCC 152 and Patel Chaturbhai Narsinbhai's case . 1975 1 SCC 583 Sri Kadidal Manjappa contended that acquisition for a Company (here, the Society) was void as owners of land were not heard. Alternatively, the learned Counsel contended that, having had recourse to the provisions of Part VII and an agreement being executed purporting to be under Section 41, the acquisition cannot be sustained, as one for public purpose.

In response, the learned Advocate General pointed out the agreements in question were necessary to ensure due compliance with the purpose of the acquisition and to retain controlling power in the Government to take action in case the Society fails to use the lands for the purpose stated by it and vast amounts were needed to meet the cost of acquisition and provisions had to be made to recover them from the Society. If, at a particular stage, Government thought of applying Part VII of the Act to the acquisition proceedings, there was no bar to shift the process into to the general provisions applicable in respect of acquisition for a public purpose. The following passage in the decision of the Supreme Court in Sankalchand Khodidas Patel's case . 1977 4 SCC 590 supports this proposition advanced by the learned Advocate General. The passage reads:—

“It appears that the High Court arrived at its finding about the abandonment for the further reason that the agreement Ex. 104 was executed by the Co-operative Society concerned on June 17, 1960. It is however not disputed before us that the agreement was obtained under the impression that the land had been acquired for a Company under Part VII of the Act. But this was not so because it had been made quite clear in the notification Ex. 58, which was issued under Section 4 of the Act, that the acquisition was for a ‘public purpose’ namely, for the construction of houses for New Sarvodaya Co-operative Housing Society Ltd. and there was nothing to show that the acquisition was for any Company. The notification under Section 6 of the Act was also to the same effect, and in that notification it was stated at four important places that the land was needed for the ‘public purpose’ specified in Column No. 4 thereof. There was therefore nothing in the two notifications to show that the notification was for a Company, and there was no justification for arriving at a contrary decision merely because of the execution of agreement Ex. 104 by the Society under a mistaken impression.”

11. The relevant law as settled may now be referred. In Smt. Somawanti etc. etc. v. The State of Punjab etc. . AIR 1963 SC 151. it was held by the Supreme Court that, —

“The inclusive definition of ‘public purpose’ in Section 2(f) Land Acquisition Act not being compendious is not useful in ascertaining the ambit of that expression. Broadly speaking the expression ‘public purpose’ would, however, include a purpose in which the general interest of the community, as opposed to the particular interest of individuals, is directly and vitally concerned.”

“Public purpose is bound to vary with the times and the prevailing conditions in a given locality and, therefore, it would not be a practical proposition even to attempt a comprehensive definition of it. It is because of this that the legislature has left it to the Government to say what is a public purpose and also to declare the need of a given land for a public purpose.”

“The declaration under Section 6 that a particular land is needed for a public purpose or for a company is not to be made by the Government arbitrarily, but on the basis of material placed before it by the Collector. The provisions of sub-section (2) of Section 5A make the decision of the Government on the objections final while those of sub-section (1) of Section 6 enable the Government to arrive at its satisfaction. Sub-section (3) of Section 6 goes further and says that such a declaration shall be conclusive evidence that the land is needed for a public purpose or for a company. The conclusiveness or finality attached to the declaration of Government is not only as regards the fact the land is ‘needed’ but also as regards the question that the purpose for which the land is needed is in fact a public purpose or what is said to be a company is really a company.”

“Whether in particular case the purpose for which land is needed is a public purpose or not is for the State Government to be satisfied about. If the purpose for which the land is being acquired by the State is within the legislative competence of the State the declaration of the Government will be final subject, however, to one exception. That exception is that if there is a colourable exercise of power the declaration will be open to challenge at the instance of the aggrieved party. If it appears that what the Government is satisfied about is not a public purpose but a private purpose or no purpose at all, the action of the Government would be colourable as not being relatable to the power conferred upon nullity. To such a declaration the protection of Section 6(3) will not extend. For, the question whether a particular action was the result of a fraud or not is always justiciable, provisions such as Section 6(3) notwithstanding.”

“The provisions of sub-section (1) of Section 6 do not require that the notification made thereunder must set out the fact that the Government had decided to pay a part of the expenses of acquisition or even to state the extent to which the Government is prepared to make a part contribution to the cost of acquisition. It is further not essential that the contribution by the State towards the cost of acquisition must be a substantial part of the value of the property sought to be acquired. This does not however, mean that a token contribution by the State towards the cost of acquisition will be sufficient compliance with the law in each and every case. Whether such contribution meets the requirements of the law would depend upon the facts of every case. Indeed the fact that the State's contribution is nominal may well indicate, in particular circumstances, that the action of the State was colourable exercise of power. ‘Part’ does not necessarily mean a subtantial part and it will be open to the Court in every case which comes up before it to examine whether the contribution made by the State satisfies the requirement of the law.”

In the two decisions known as first and second Arora Case5,6 it was made clear that even an acquisition for a Company, serves public purpose and therefore, it is a public purpose. No dichotomy existed between the two purposes of acquisition. An acquisition for a Government Company or ‘non-private Company’ (in contrast to the definition of private Company under the Indian Companies Act) has a greater touch of public purpose, since, private individuals and private Companies which really consist of a few private individuals banded together should not have the advantage of acquiring land even though they may be intending to engage in some industry or work which may be for a public purpose inasmuch the enrichment consequent on such work goes to private individuals or to a group of them who have formed themselves into a private Company. Public companies on the other hand are broad based and Government Companies are really in a sense no different from Government, though for convenience of administration a Government Company may be formed, which thus becomes a separate legal entity. Thus the case of acquisition for a private Company results in private enrichment while in other cases it is the public which gains in every way.

In the first case, it was stated, at page 767:

“Therefore, though the words ‘public purpose’ in Sections 4 and 6 have the same meaning they have to be read in the restricted sense in accordance with Section 40 when the acquisition is for a Company under Section 6. In one case, the notification under Section 6 will say that the acquisition is for a public purpose, in the other case the notification will say that it is for a Company. The proviso to Section 6(1) shows that where the acquisition, is for a public purpose, the compensation has to be paid wholly or partly out of public revenue or some fund controlled or managed by a local authority.”

In Ratilal Shankarabhai v. State of Gujarat . 1970 2 SCC 264 it was clarified that definition of a Company includes a Co-operative Society and acquisition of land for its purpose (i.e, housing scheme) was for a public purpose, and the statement to that effect in the Notification under Section 4 and the Declaration under Section 6 were accepted, as conclusive.

In Manubhai Jethalal Patel v. State of Gujarat . 1983 4 SCC 553, it was pointed out that, —

“…..Even where land is acquired for a Company, the State Government has the power to acquire land for a public purpose from the revenue of the State. In other words, this is an acquisition for public purpose with contribution from the State revenue. The State is acquiring land to carry out public purpose with the instrumentality of the Gujarat State Road Transport Corporation. It is not an acquisition for a company with the funds exclusively provided by the Company which would attract Part VII of the Land Acquisition Act. In our opinion, the High Court is right in reaching the conclusion that neither Part VII of the land Acquisition Act nor the Company Acquisition Rules would be attracted. Therefore, we are in agreement with the conclusions reached by the High Court.”

Further it was held, that, —

“It is not correct to determine the validity of acquisition keeping in view the amount of contribution but the motivation, for making the contribution would help in determining the bona fides of acquisition. Further in M. Malimabu's case ((1978) 2 SCC 373 : AIR 1978 SC 515) contribution of Re. 1/- from the State revenue was held adequate to hold that acquisition was for public purpose with State fund. Therefore the contribution of Re. 1/- from public exchequer cannot be dubbed as illusory so as to invalidate the acquisition.”

12. All these principles, it was contended, flow out of the inclusive definition of ‘public purpose’ and even an acquisition for a Company may be for a public purpose. But by virtue of the exclusion, now made by the Amendment Act, it was contended that, an acquisition for a Company can never fall within the concept of ‘public purpose’; acquisition for a Company can only be by resort to Part VII.

It is not possible to accept this contention, without any qualification. Definition of ‘Company’ and ‘public purpose’ under the Amendment Act, 1984 are as follows:—

“Section 3. Definitions - In this Act, unless there is something repugnant in the subject or context, —

(e) the expression ‘Company’ means —

(i) a Company as defined in Section 3 of the Companies Act, 1956, other than a Government Company referred to in clause (cc);

(ii) a society registered under the Societies Registration Act, 1860, or under any corresponding law for the time being in force in any State, other than a society referred to in clause (cc);

(iii) a Co-operative Society within the meaning of any law relating to Co-operative Societies for the time being in force in any State, other than a Co-operative Society referred to in clause (cc);”

“3(f) the expression ‘public purpose’ includes-

(i) the provision of village sites, or the extension, planned development or improvement of existing village sites;

(ii) the provision of land for town or rural planning;

(iii) the provision of land for planned development of land from public funds in pursuance of any scheme or policy of Government and subsequent disposal thereof in whole or in part by lease; assignment or outright sale with the object of securing further development as planned;

(iv) the provision of land for a Corporation owned or controlled by the State;

(v) the provision of land for residential purposes to the poor or landless or to persons residing in areas affected by natural calamities, or to persons displaced or affected by reason of the implementation of any scheme undertaken by Government, any local authority or a Corporation owned or controlled by the State;

(vi) the provision of land for carrying out any educational, housing, health or slum clearance scheme sponsored by Government or by any authority established by Government for carrying out any such scheme, or, with the prior approval of the appropriate Government, by a local authority, or a Society registered under the Societies Registration Act, 1860 or under any corresponding law for the time being in force in a State, or a Co-operative Society within the meaning of any law relating to Co-operative Societies for the time being in force in any State;

(vii) the provision of land for any other scheme of development sponsored by Government, or, with the prior approval of the appropriate Government, by a local authority;

(viii) the provision of any premises or building for locating a public office,

but does not include acquisition of land for Companies.”

The inclusive definition of public purpose, comprehends within it the provisions for land, stated in Clause (vi) of Section 3(f). Apart from the Governmental agencies, Societies registered under Societies Registration Act as also Co-operative Societies are covered by the said Clause. Other conditions relating to the scheme, if satisfied, acquisition of land for a Society or a Co-operative Society, also is for a public purpose.

However, Sri Ranga Rao, learned Counsel for a few petitioners, contended that, the Society and the Co-operative Society referred in Clause (vi) are of the nature, covered by the definition of expression “Corporation owned or controlled by the State”, in Section 3(cc), which presupposes, in the case of a Co-operative Society in which not less than 51% of paid up share capital is held by any of the Governments. The learned Counsel tried to sustain his contention by reference to earlier part of Clause (vi), which refers to scheme sponsored by Government or by any authority established by Government, or by a local authority and argued that these expressions throw colour on the subsequent ‘Co-operative Societies.’

It is not possible to accept this contention. Whenever, a Society or a Co-operative Society referred in Section 3(cc) is referred, they are expressly referred as such as seen from various sub-clauses of Section 3(e). Further, the purpose sought to be achieved by Section 3(f)(vi) is to enable acquisition of lands for various laudable objects such as educational, housing, health or slum clearance schemes which are sponsored with the prior approval of the Government. In such a situation the ambit of the provision, which serves various public purposes, should not be curtailed unless the language of the provision, clearly restricts its scope.

The exclusion or “acquisition of land for a Company” from the definition in Section 3(f), has to be read harmoniously with other clauses specifically included therein. The exclusion, can be from the general concept, without cutting down the ambit of the provision specifically added. Consequently, it is to be held, that a land can be acquired for a Co-operative Society, for the implementation of a housing scheme sponsored by it with the prior approval of the Government, as a public purpose under the Amended Act.

13. Under Section 5A objections to the proposal are heard and report sent to the Government. Time is prescribed to submit the Report under Section 5A. Factum of sending the Report is to be communicated to the objectors. On receipt of the Report, the State Government if satisfied that any particular land is needed for a public purpose or for a Co-operative Society, shall make a Declaration to that effect. A time limit was prescribed to make the declaration, after the issuance of Section 4(1) Notification. No Declaration under Section 6(1) is to be made after three years from the date of the publication of Section 4(1) Notification. Scheme of these provisions is broadly the same, both under the Central Act and the said Act as amended by Karnataka Act 17 of 1961.

Acquisition proceedings as such commence only on the issuance of the Declaration under Section 6(1). Till then, whether acquisition was necessary if so, for what purpose, are matters of proposals only. But Section 4(1) Notification results in certain consequences. It enables the Acquiring Authority to enter the land and do certain acts on the land, as stated in Section 4(1). Compensation payable on acquisition of the land is to be with reference to the date of Section 4(1) Notification. In other words, land value is pegged to the said date. On completion of the enquiry under Section 5A and the receipt of the report, all the materials for and against the acquisition and whether acquisition will be for a public purpose, will be with the State Government and it is for the Government to consider the Report and arrive at its satisfaction.

Before the Amendment Act of 1984 came into force, when the proposal was for the acquisition of land for a House Building Co-operative Society the Government will have to be satisfied, whether the land is needed for the construction of some work and such work is likely to prove substantially useful to the public, or, the land is needed for the construction of houses, as stated in Section 3(f)(viii) of the Act, as was in force after the amendment under the Karnataka Act 17 of 1961. Relevant definitions under Karnataka Act 17 of 1961 are as follows:—

“3(e) the expression ‘Company’ means —

(i) to (v) xxxxxx

(vi) a Co-operative Society;

(vii) xxxxxx

“3(f) the expression ‘public purpose’ includes,

(i) the provision of village sites;

(ii) the provision of land for planned development from public funds and subsequent disposal thereof in whole or in part by lease, assignment or outright sale with the object of securing further development as planned;

(iii) the provision of land for town or rural planning under any law relating to such planning;

(iv) the provision of land, —

(a) for carrying out any housing scheme or health scheme sponsored by the Central Government or any State Government or a local authority; or

(b) for clearing slum areas; or

(c) for relieving congestion; or

(d) for housing poor, landless, or displaced persons, or persons residing in areas affected by floods;

(v) the provision of, —

(a) residence for any person holding an office of profit under the Central Government or a State Government, or accredited as a diplomatic consider or trade representative of a foreign Government;

(b) building for locating a public office;

(vi) the provision of land for Corporations owned or controlled by the State, or other nationalised industries or concerns;

(vii) the provision of land for any local authority and subsequent disposal thereof in whole or in part by lease, assignment or outright sale with the object of securing further development;

(viii) the provision of land for a Company,-

(a) where the land is needed for the construction of some work and such work is likely to prove substantially useful to the public, or

(b) where the land is needed by a building Co-operative Society or Corporation for the construction of houses.”

(rest omitted as unnecessary)

In these cases, Section 4(1) Notification dated 30-5-1983 was published in the Gazette dated 16-6-1983. Section 5A Report was made in August 1984. Government had to make the Declaration under Section 6(1) on or before 16-6-1986; in fact it was dated 1-6-1985 and published on 20-6-1985 in the Gazette. Agreements were got executed to ensure compliance with the stated objectives of the Society. Thus State Government had put the law into motion for the acquisition of land, on being satisfied that the land is needed for the Co-operative Society for any of the works likely to prove substantially useful to the public or for the construction of houses and this satisfaction is guaranteed by an agreement executed by the Society in favour of the State Government (referred above). Therefore, requirements of Section 3(f) of the Act as amended by Karnataka Act 17 of 1961 were substantially satisfied. Various stages of acquisition proceedings were over by the time the Act was again amended by the Central Act in the year 1984.

When all these stages of a single process leading to Section 6(1) is practically over, is it possible or fair, to hold that, on coming into force of the Central Act 68 of 1984, the acquisition proceedings should be dropped though, substantially, the factors to be considered are the same under the two sets of definitions? Such a construction of law, compelling the Government to initiate proceedings afresh will also be an unnecessary strain on public time, public exchequer and public administration. The Court cannot be oblivious to the consequences that would flow from such a statutory construction. Hitherto, (i.e, prior to the Amendment Act of 1984), there was no dichotomy between a ‘public purpose’ simpliciter and a purpose of a Company which may also be a public purpose. The main distinction lay in the matter of meeting the cost of acquisition. When an acquisition of land was for a Company, as an acquisition of land for a public purpose, by a token contribution from public revenue to the cost of acquisition, special procedure prescribed under Part VII of the Act could have been dispensed with.

Even after the Amendment Act of 1984, definition of ‘public purpose’ continues to be an inclusive definition. But it has an exclusionary clause, excluding from the definition acquisition of land for companies. This exclusion is again subject to Clause (vi) of the said definition in certain cases.

14. If this Amendment Act of 1984 is to govern the pending proceedings (i.e, a proceeding started earlier, by Section 4 Notification, but not culminated in a Declaration under Section 6), in respect of a purpose hitherto covered by the concept of public purpose, though for a Company, then the Government will have to alter its course of proceedings to apply the provisions of Part VII immediately. Once again elaborate proceedings prescribed under Part VII will have to be followed, resulting in uncertainty and delay. Was such a consequence contemplated by the Amendment Act of 1984?

An answer to the question can be found in the scheme of the Amending Act itself. The first proviso to Section 6(1) was substituted by this Act. Earlier, the proviso stated that no Declaration under Section 6(1) shall be made after the expiry of 3 years from the date of the publication of Section 4(1) Notification. The proviso as substituted, has two Clauses. In respect of the acquisition proposed by Section 4(1) Notification, earlier to this Amendment Act of 1984, the old period of limitation continues to be in force, to make the Declaration. But in cases of Section 4(1) Notification to be issued thereafter, the period within which, the Declaration under Section 6(1) could be made, is reduced to one year, from the date of the publication of the Notification.

This amendment, clearly keeps alive the proceedings initiated prior to the said Amendment, till the expiry of the period prescribed under the earlier law. In other words, in respect of proceedings commenced by a Section 4(1) Notification issued after 29-1-1967 and which is pending as on 24-9-1984, Declaration under Section 6 could be made before the expiry of 3 years from the date of publication of Section 4(1) Notification.

In these cases, Section 4(1) Notification was published on 16-6-1983. Therefore, this proviso to Section 6, as now amended, permits a Declaration under Section 6 to be made before 16-6-1986. Suppose, for acquisition of land for a Company, which was also a public purpose, Section 4(1) Notification had been published on 1-10-1981, as per this proviso, Section 6(1) Declaration could be made only before 1-10-1984. In such a case, to hold, that, the Government should complete the proceedings prescribed under Part VII, within a week (i.e, after 24-9-1984) is to expect the Government to catch the mirage.

In fact, whenever the Amendment Act of 1984 governs a pending proceeding, the said Act specifically stated so, as seen from Section 30 of the said Act. Therefore, it is to be held that the Amendment Act did not envisage the dropping of pending proceedings which has not reached the stage of Section 6 Declaration.

15. While interpreting the Amendment Act and its impact on pending proceedings, a measure of transitional accommodation, is necessary. Definition of ‘public purpose’ still continues to be an inclusive one. It has a wide connotation. Government is, still, the final authority whose satisfaction as to the existence of public purpose, is conclusive, even after the Amendment Act.

16. On the facts of the case, it is to be held that, even the requirements of Amendment Act are satisfied. Admittedly, the lands here, are sought to be acquired for a Co-operative Society, Members of which are several hundred employees of a Bank. The proposal for acquisition and the object behind it have been throughly examined by the State Government through the Designated Authority, under Section 5A. A Three Member Committee also independently examined the question. The implementation of the Scheme has been guaranteed by the Society, by entering into two agreements with the Government. Vast sum of money has been already deposited towards the cost of acquisition by the Society. The Government was satisfied that the Society needed the lands for construction of houses by its Members. The achievement of this goal was also ensured by appropriate agreements.

It is not in dispute, that under the Amendment Act, if a case falls under Section 3(f)(vi), land can be acquired, as for a public purpose. Confining the words relevant to the present context, it reads, as—

“Public purpose includes the provision of land for carrying out any housing scheme sponsored, with the prior approval of the Government, by a Co-operative Society.”

This provision requires a housing scheme sponsored with the prior approval of the Government by a Co-operative Society. The nature of the scheme is not stated, nor the manner as to how the approval of Government should be given prescribed. The word ‘scheme’ has many meanings; one such meaning is ‘mode’ or ‘manner’. It may also mean, stages or steps to achieve a particular end. If the Government decides to acquire a land for a Co-operative Society, on its being satisfied that the land was to put up houses after forming layouts etc., the approval to such a Scheme can be inferred from the very fact that the Government was a party to an agreement which ensures that lands would be utilised for the purpose for which they were acquired. In the circumstances of the case we hold that there has been a substantial compliance with the requirements of law governing the acquisitions in question.

17. Consequently, we hold, —

(i) The proceedings started earlier to the Amendment Act of 1984 by a Notification issued under Section 4(1) according to the earlier law, shall govern the proceedings till it crosses the stage of Section 6(1) Declaration, even though, the said Declaration is to be made, after the Amendment Act;

(ii) Alternatively, in the facts and circumstances of this case, the acquisition of lands is for a public purpose, substantially falling within Section 3(f)(vi) of the Act as amended by the Amendment Act of 1984 and hence valid.

18. In the result, for the reasons stated above, these appeals fail and are dismissed. In the circumstances of the case, we make no order as to costs.

ORDER ON ORAL PRAYER

The learned Counsel for the appellants pray that these appeals may be certified as fit ones for appeal to the Supreme Court. As substantial question of law of general importance arises in all these appeals, we find that the same needs to be decided by the Supreme Court authoritatively. Consequently, these appeals are certified to be fit ones to appeal to the Supreme Court. The appellants are also granted stay of dispossession till 31st July 1988 to enable them to move the Supreme Court and obtain extension of stay.