This suit was brought against Government to obtain a declaration that the acquisition of the plaintiffs' lands for the ostensible purpose of making a new road between Kallal and Managiri in the Ramnad district was illegal void and not binding on the plaintiffs. It is contended on behalf of the plaintiffs, who are appellants before us, that the land acquisition proceedings were not valid and bona fide but were undertaken at the instigation of one Karuppan Chetty with whom the plaintiffs had a dispute at law as to the ownership of the land in question, in order by indirect means to deprive them of the lands, that there was no necessity for diverting the course of the existing road instead of repairing it, and that the contribution from provincial revenues of one anna out of the total sum of Rs. 5,985 required for the acquisition was an indication of the illusory character of the object for which the provisions of the Act have been made use of.
Mr. S. Srinivasa Aiyangar conceded that the construction of a public road was prima facie a public purpose, but he argued that the provision of Sect. 6 of Act I of 1894 that the compensation should be paid wholly or partly out of public revenues was intended to be a test of the good faith of Government and that a payment of about part of the amount was not a real and bonafide compliance with the terms of the section. He could not contend that the land was not needed for a public purpose because Sect. 6 Cl. (3) enacts that the declaration in the Gazette is conclusive evidence of the fact, and it was held by the Privy Council, in Wijeyesekera v. Festing that, after such a declaration it was not open to the owner to contend in any Court that the land was not needed for a public purpose. The Amending Act XXXVIII of 1923, passed after the institution of this suit, contains an additional safeguard that any person interested in any land which has been notified may present an objection in writing to the Collector, upon which an enquiry has to be made and the case reported to the Local Government, whose decision upon the objection shall be final. The Subordinate Judge, who tried the suit, held upon the first issue that the Act did not require that a substantial part of the compensation should come out of public revenues and that no matter how small the contribution might be, the requirements of Sect. 6 would be satisfied. We are unable to accept this as a correct view of the law. We consider that the Legislature when they provided that a part of the compensation should be paid from public revenues did not mean that this condition would be satisfied by payment of a particle. In Chatterton v. Cave(2) (a copy right case), the House of Lords were averse to putting such an interpretation on the words “or part thereof” occurring in the Dramatic Copy-Right Act 3 and 4 of William IV, as would make a part to mean a particle. Their Lordships observed that the words in the statute must receive a reasonable construction and were to be treated as implying some part that was substantial and material. We think that the Legislature, when they passed the Land Acquisition Act, did not intend that owners should be deprived of their ownership by a mere device of private persons employing the Act for private ends or for the gratification of private spite or malice. The Government Pleader informed us that the defendant was prepared to prove that a substantial contribution was made towards the cost of the new read and that it was paid into the Public Treasury for that purpose. He referred us to Ex. I, which is a proceeding of the Collector directing the Tahsildar to collect the full amount of melwaram compensation from the Chetty which may or may not be evidence that the sum that represented the reduction of peishkush due by the Sivaganga Estate to Government was collected from a private person and paid into the public revenues. Mr. Srinivasa Aiyangar was not prepared to deny that Government or a Local Body like the District Board, might receive contributions from private individuals and might spend the same upon public purposes, such as Hospitals, Schools or Roads. Such gratuitous contributions may be included in and become part of the public revenues. Sect. 6 itself makes mention of funds controlled or managed by a local authority. In Veeraraghavachariar v. The Secretary of State in which the legality of certain land acquisition proceedings was questioned in Second Appeal before Devadoss, J., there was a finding of fact that the cost of acquiring a site for Panchamas' houses was met out of public revenues. In the present case, no Government Official has been examined as a witness to prove from what source the costs of acquisition was met, and whether any money was collected from private sources and paid into the treasury, and if so, upon what terms the money was made over to Government, and whether it became the money of Government under their complete control to be expended as they might deem fit on a public purpose such as that of improving a public communication by making a fresh alignment of an existing road. As the lower Court dismissed the plaintiffs' suit upon a technical point which did not completely answer their contention that the acquisition was illegal, the Subordinate Judge will be directed to take such fresh evidence as either side may adduce to prove that the compensation paid in this case came wholly or partly out of public revenues, the allegation of the plaintiffs being that the Chetties kept the money required for the cost of acquisition with themselves, and the allegation of the defendant being that a fund was raised for a public purpose which became part of the public revenues and was under the control either of the District Collector or the District Board. The Subordinate Judge will return his finding upon this point together with the evidence recorded by him within one month after the reopening of this Court after the summer vacation; and the parties will be at liberty to file objections to the said finding within ten days after notice of the return of the same shall have been posted up in this Court.
In compliance with the order contained in the above judgment the Subordinate Judge of Sivagangs submitted the following finding:
I agree with the learned vakil for the defendant that the Government cannot be held to have been instigated by Karuppan Chetti to start the land acquisition proceedings, but only moved by him to take action and hold further that though he moved Government just on the date of Ex. B because plaintiffs had filed their suit he did not do so merly to deprive plaintiffs of their lands. For the above reasons I find the issue in the affirmative.
[This Appeal came on for final hearing on the 1st and 6th April, 1926, before their Lordships Sir Charles Spencer and Ramesam, JJ.]
JUDGMENT
Sir Charles Spencer, J.—Before calling for a finding as to the facts connected with the payment of compensation for the property concerned in this appeal, I stated my reasons for considering that a payment by Government of one anna out of a sum of Rs. 3,352-5-0 was a mere evasion of the law which requires that before a declaration can be legally made that any particular land is needed for a public purpose, the compensation to be awarded must either be paid by a company or wholly or partly out of public revenues or some fund controlled or managed by a local authority. In a case where land has to be acquired for a Company the Act permits the whole of the cost of acquisition being met out of the funds of the Company, and all that is required by Sect. 40 of Act 1 of 1894, is that the Local Government should be satisfied upon an enquiry made by an officer appointed by them that the acquisition is needed for the construction of some work which is likely to prove useful to the public. The present acquisition was not made at the instance of any Company. It now transpires that there was here no fund controlled or managed by a local authority out of which the cost of acquisition was to be met, if we understand the words “Local authority” as defined in Sect. 3, Cl. 28 of the General Clauses Act, to denote a Municipal Committee, District Board or other authority entrusted by the Government with the management of a Municipal or Local Fund.
It is of no consequence for deciding the question before us that under Sect. 60 of the Madras Local Boards Act (XIV of 1920) all public roads in the Ramnad District, vest in the District Board or the Taluk Board and that after the new road is formed, the cost of its upkeep will come out of local funds. The defendant admitted in his written statement that the President of the District Board informed the plaintiffs that neither the District Board of Ramnad nor the Taluk Board of Devakottah proposed to construct the road in question. The only witness examined after the remand did not state that any road fund to which private contributions were invited was started and managed by the District or Taluk Board. The Government Pleader does not contend that the present case falls under the last part of the proviso to Sect. 6 (1) of Act I of 1894, but he maintains that when Karuppan Chetty paid the whole of the sum required for compensating the tenant in occupation of the land into the Treasury before the notification by Government and when he paid the whole of the amount awarded as compensation to the owner of the melwaram or landlord's interest, represented in this case by the Estate Collector of the Sivaganga Zamindari estate, after the notification, minus one anna contributed by Government, those amounts became merged in the general revenues, and that thus the compensation became payable out of public revenues, as required by the first part of the proviso to Sect. 6 (1) of the Act. He also relies on the circumstance that the money so contributed was deposited in Court under Sect. 31, as the persons interested refused the compensation tendered to them and he points out that, if the amount awarded is increased by the District Court, Government will have to make good the difference and Karuppan Chetty, would likewise possess no right to any portion of the amount which happened to be left unspent or unclaimed.
In my opinion when money is paid into a Goverment Treasury by the hand of one private individual and after passing intact through the Treasury is paid out into the hand of another private individual it cannot with any accuracy be described as becoming part of the public revenues. Government had no absolute disposing power over it and could not without a gross breach of trust make any other use of it than by utilising it for the purpose for which the contributor intended it to be used, namely, as compensation for the surrender of the lands acquired. This money was not revenue due to Government on any land, nor was it any cess, tax, duty, custom or other due recoverable under Act. II of 1864. It appears clear to my mind that if the provisions of the Land Acquisition Act are not strictly complied with, but are made a cloak for attempting to obtain a transfer of an indefeasible title under the guise of a public purpose, the proceedings do not operate towards the creation of a valid title to the land in Government, as it was held by the Privy Council in Luchmeswar Singh v. Chairman, Durbhanga Municipality.
I would, therefore, allow the appeal and give the plaintiff a decree as prayed for with costs here and in the lower Court. Under Sect. 82, Civil Procedure Code, Government will have two months' time for satisfying the decree.
Ramesam, J: I agree.
C. K.Appeal allowed.