Appeal No 1107 of 1963
Appeal from the judgment and order dated September 8 1959 of the Punjab High Court Circuit Bench at Delhi in Civil Regular Appeal No 17 D of 1954
B D fain for the appellants
N section Bindra and B R G K Achar for the respondent
The Judgment of the Court was delivered by Shah J
By a notification issued on March 2 1937 under section 7 of the Delhi Laws Act 13 of 1912 the Government of India extended subject to certain modifications the United Provinces Town Improvement Act 8 of 1919 to the territory of Delhi and thereafter set up an Improvement Trust under the Act for that territory
The Trust prepared an industrial development scheme with the object of relieving congestion by inducing a flow of population from the crowded parts of the town of Delhi to certain other areas
Under the scheme land in those areas was to be developed and after construction of roads storm water drains street lighting
29 refuse and sewage disposal works schools parks playgrounds dispensaries welfare centres and police station a part of the land was to be allotted to industrial concerns for construction of industrial buildings and the rest for construction of residential and other buildings
The scheme was sanctioned under section 42 of the Act by the government of India and was duly promulgated
Thereafter the Trust resolved in June 1942 to make a supplementary scheme as the land covered by the original scheme was inadequate
It appeared that the Trust had agreed to provide under the original scheme a block of land comprising 268 acres of land to the Delhi Cloth  General Mills Co Ltd hereinafter called the Company  on certain terms and conditions embodied in a resolution dated January 9 1942 but the Trust was able to offer to the Company under the lay out of the original scheme only 17484 acres
It was before proposed by the Trust to modify the scheme as sanctioned and to provide for acquisition of an additional area of 10316 cres under a supplementary scheme
On July18 1942 notice under section 36 of the Act was published in respect of the supplementary scheme for development of the industrial area specifying the boundaries of the land in which the scheme was to be worked and inviting objections to the scheme within one month from the date of publication
No objections were it appears raised to the proposed supplementary scheme and it was finally approved by resolution dated July 31 1944 and was notified under section 42 of the Act on June 28 1946
Land acquisition proceedings were then commenced under section 58 of the Act and awards were made assessing compensation to be paid to the owners of the land for compulsory acquisition
In the scheme so notified was included an area of 13 bighas of land belonging to the appellants and that land was acquired
On May 3 1949 the appellants sued the Delhi Improvement Trust for a declaration that the awards were wrong and illegal and did not result in acquisition of the suit property and for an order restraining the Trust from taking possession of their lands under the awards and from interfering in any way with their enjoyment of the lands
The appellants in support of their claim contended that the notification extending the United Provinces twon Improvement Act 8 of 1919 was invalid that the Improvement Trust was not lawfully constituted that the industrial development schemes were invalid that the Trust had no power to acquire lands for the purposes mentioned in the scheme and that the resolutions and proceedings of the Trust being procedurally defective the scheme was illegal
The appellants also contended that the scheme was framed at the instance of and solely for the benefit of the Company since the land was intended to be given after acquisition to that Company or to other industrialists for 30 development by them for their own benefit
The Subordinate Judge Delhi held that the Act was properly extended to the Delhi territory
that the scheme was valid and the Trust had power to acquire the land but in the view of the Subordinate Judge there was nothing on the record to show that the area in suit was necessary for or was affected by the execution of this scheme and that the Act does not authorise compulsory acquisition for purposes of recoupment or for allotment to some company
The Subordinate Judge accordingly decreed the suit as claimed by the appellants
In appeal to the Senior Subordinate Judge with appellate powers the decree passed by the Trial Court was affirmed
In second appeal to the High Court of Punjab Falshaw J reversed the decree passed by the First Appellate Court
In the view of the learned Judge since the original industrial area scheme framed in 1940 was a valid scheme acquisition of an additional area of land for meeting the requirements of that scheme was a legitimate extension thereof and merely because the Trust had resolved to acquire land for sale to the Company after development the scheme was not open to challenge
He also held that the acquisition not being for the Company Part VII of the Land Acquisition Act had no application and that the supplementary scheme was not invalid merely because the plan for development was to be worked out not by the Trust directly but by the Company under the general supervision and control of the Trust and in accordance with the town planning scheme framed under section 192 of the Punjab Municipal Act
The decree passed by Falshaw J was confirmed by a Division Bench of the High Court
With certificate granted by the High Court this appeal has been preferred
The arguments in this case have ranged over a wide field but in the main three questions of law fall to be decided 1 Whether acquisition of land of the appellants under the supplementary scheme was for the purposes of the Act 2 whether for executing the supplementary scheme the Trust had power to compulsorily acquire land and 3 whether land of the appellants could be acquired only in the manner provided by the Part VII of the Land Acquisition Act 1894
The Act as the preamble discloses was enacted with a view to make provision for the improvement and expansion of towns Chapter 11 of the Act deals with the constitution of Improvement Trusts for carrying out the provisions of the Act
Chapter III deals with the proceedings of the Trust and Committees thereof
Chapter TV deals with different forms of improvement schemes
Section 2  describes in cls
a to p matters which may be provided for in an improvement scheme
Clauses a  g thereof read as follows a The acquisition by purchase exchange or otherwise any property necessary for or affected by the execution of the scheme
 31 g The sale letting or exchange of any property comprised in the scheme By section 24 it is provided that an improvement scheme shall be one of the following types or may combine any two or more of such types or of any special features of that is to say a a general improvement scheme b a re building scheme c a re housing scheme  d a street scheme e a deferred street scheme f a development scheme  g a housing accommodation scheme  and h a town expansion scheme
Sections 25 to 32 set out the conditions in which the different classes of schemes may be framed and provisions which may be made in those schemes
Provisions relating to development schemes in section 30 and town expansion schemes in section 32 alone are material
By section 30 cls
1  2 it is provided  1 In regard to any area to which this Act is extended the Trust may from time to time prepare a scheme of proposed public streets with plans showing the direction of such streets the streets alignment and building line on each side of them their intended width and such other details as may appear desirable
2 When any such scheme has been notified under section 42 the street to which it refers shall be deemed to be a projected public street
 Restrictions are then placed upon the right of occupants of the buildings to erect re erect add to or alter any building or wan and provision is made for other related matters
Section 32 reads 1 Whenever the Trust is of opinion that it is expedient and for the public advantage to control and provide for the future expansion of a municipality in any area to which this Act is extended the Trust may frame a scheme to be called a town expansion scheme
2 Such scheme shall show the method in which it is proposed to lay out the area to be developed and the purposes for which particular areas are to be utilized
3 For the purposes of a town expansion scheme the provisions of clause a of sub section 2 of section 40 shall not be applicable but the Trust shall be required to supply such details as the State Government may consider necessary
4 When any such scheme has been notified under section 42 if any person desires to erect re erect add to or alter any building or wall within the area comprised in the said scheme he shall apply to the Trust for permission to do so 32 5 If the Trust refuses to grant permission to any person to erect re erect add to or alter any building or wall on his land in the area aforesaid and if it does not proceed to acquire such land within one year from the date of such refusal it shall pay reasonable compensation to such person for any damage sustained by him in consequence of such refusal Section 33 deals with the procedure to be followed in framing improvement schemes
Section 36 inter alia deals with the preparation publication and transmission of notices about the improvement schemes
Section 38 deals with notice of proposed acquisition of land
Section 40 authorises the abandonment of and submission of the schemes for sanction to the State Government with such modifications as the Trust may consider necessary after considering the objections or representations which may be received
Section 41 authorises the State Government to sanction with or without modification or refuse to sanction or return for reconsideration any improvement scheme submitted to it under section 40
Section 42 provides 1 Whenever the State Government sanctions an improvement scheme it shall announce the fact by notification and except in the case of a deferred street scheme development scheme or town expansion scheme the Trust shall forthwith proceed to execute the same
2 The publication of a notification under sub section 1 in respect of any scheme shall be conclusive evidence that the scheme has been duly framed and sanctioned
 Section 43 provides for alteration in an improvement scheme before it had been carried into execution subject to certain conditions specified therein
Chapter V deals with the powers and duties of the Trust in respect of a scheme which has been sanctioned
Section 55 authorises the Trust to enter into an agreement with any person for the purchase lease or exchange by the Trust of any land which the Trust is authorised to acquire or any interest in such land Section 56 provides that the Trust may with the previous sanction of the State Government acquire land under the provisions of the Land Acquisition Act 1894 as modified by the provisions of the Act for carrying out any of the purposes of the Act
Section 58 provides that for the purpose of acquiring land under the Land Acquisition Act for the Trust the Tribunal constituted under section 57 shall be deemed to be the Court and the President of the Tribunal shall be deemed to be the Judge under the said Act subject to further modifications indicated in the Schedule and that the award of the Tribunal shall be deemed to be the award of a Court under the Land Acquisition Act 1894 and shall be final
At this stage the material provisions of the Schedule referred to in section 58 may be referred to
The Schedule amends the Land Aoquisition Act in certain respects
The expression local authority in section 3ee of the Land Acquisition Act includes a Trust constituted 33 under the United Provinces Town Improvement Act 1919
By cl
21 the first publication of the notice of an improvement scheme under section 36 of the Act is substituted for and has the same effect as publication in the Official Gazette and in the locality of a notification under sub section 1 of section 4 of the Act except where a declaration under section 4 or section 6 of the Act had previously been made and was still in force
By sub cl
2 of cl 2 inter alia publication of a notification under section 42 is substituted for and has the same effect as a declaration by the State Government under section 6 of the Act unless a declaration under the last mentioned section had previously been made and was still in force
By cl 6 section 17 A is incorporated in the Land Acquisition Act and it reads In every case referred to in section 16 or section 17 the Collector shall upon payment of the cost of acquisition make over charge of the land to the Trust and the land shall thereupon vest in the Trust subject to the liability of the Trust to pay any further costs which may be incurred on account of its acquisition
 Section 65 of the Act deals with disposal of land
It provides Subject to any rules made by the State Government under section 72 of this Act the Trust may retain or may let on hire lease sell exchange or otherwise dispose of any land vested in or acquired by it under this Act
 Broadly stated the scheme of the Act is that with a view to make improvements in towns the Trust may make certain order after framing an appropriate scheme of a type or containing special features of different types of schemes mentioned in section 24
The scheme so framed may make provisions for matters which are prescribed by section 23 and such other matters as are provided for specially in the appropriate sections dealing with the different classes of schemes
The relevant resolutions adopted by the Trust for framing the original and supplementary schemes may be briefly noticed
On June 30 1942 it was resolved by the Trust to acquire an additional area of 10316 acres to be sold to the Company
The resolution reads as follows A reference is invited to Board s resolution No 78 of the 29th March 1940 relating to the Trust s Industrial Area Scheme
The scheme as approved by the Board and sanctioned by the Chief Commissioner covers an area of about 47981 acres  and provides for the acquisition and development of 27121 acres of land  at a cost not exceeding Rs 684 lakhs and the acquisition and development of the remaining 2086 acres provided any one or more reputable industrialists deposit with or guarantee to the Trust the cost of acquiring and developing this additional area
As decided by the Board in their Resolution Nos 108 and 109 34 of the 16th May 1941 the scheme as regards block I  in sub
scheme A  has been held in abeyance and land in block 11 has been acquired and is under development for factory sites
The Board have now agreed to sell 268 acres of land in the Industrial Area to the Delhi Cloth and General Mills Co Ltd on the terms and conditions embodied in Resolution No 19 of the 9th of January 1942 as amended by Resolution No 50 of the 27th March 1942
The Trust can  offer only 17484 acres out of the land falling within the boundaries of the sanctioned scheme to the Company for the present  
It is therefore proposed to alter under section 43 of the Trust Law the scheme as sanctioned so as to provide for the acquisition of this additional area of 10316 acres to be sold to the Company
As under the terms of the sale this additional area is to be developed by the Company the Trust will have to incur initially expenditure only on acquisition of this land Pursuant to this resolution notices were issued under section 36 of the Act in respect of the acquisition of the area
Thereafter a resolution was passed on July 31 1944 and it was stated in the introductory part of the resolution The present site of the industrial area was selected as being suitably located vis a vis the city and the newly developed Trust area
There was no other site available where such facilities for roads and railway lines existed
The sizes of the plots were fixed on the basis of the demand of different indus trialists
 The scheme was then sanctioned under section 42 of the Act
The resolution of the Trust dated March 29 1940 clearly indicates that the original scheme was intended to secure growth of an industrial area and thereby to relieve congestion in the over crowded localities in the town of Delhi
Such a scheme was primarily a town expansion scheme within the meaning of section 24b read with section 32
In framing such a scheme the provisions of a development scheme were incidentally incorporated and that the Trust by express enactment in section 24 was competent to do
It appears that neither before Falshaw J nor before the High Court the validity of the original scheme of 1940 was challenged
Counsel for the appellants contended that no reliance was ever placed by the Trust before the Trial Court or the First Appellate Court upon the original scheme and the appellants had no opportunity for challenging the validity of that scheme but we are unable to accept that contention
The appellants by their plaint challenged the application of the UP Town Improvement Act the constitu tion of the Trust and the various steps taken by the Trust resulting 35 in the acquisition of their land
The original scheme was tendered in evidence before the Court of First Instance
It is true that arguments in the Trial Court and the First Appellate Court were primarily directed to canvassing the validity of the supplementary scheme in enforcement of which the property of the appellants was acquired
But it cannot be said that the original scheme was not before the Court or that its validity was not challenged
In any event counsel for the appellants has not been able to suggest any ground on which that scheme is open to challenge
The supple mentary scheme as the resolution dated June 30 1942 clearly indicates was framed for the further progress of the original scheme
The scheme was one for town expansion and acquisition of land for town expansion ie providing for industrial development and making provision for the residence of employees in the industries and of others would clearly fall within the terms of section 24h read with section 32
It is true that in the resolution dated June 30 1942 it is recited that the scheme was to provide for the acquisition of an additional area of 10316 acres to be sold to the Company
But from a perusal of the primary scheme it is clear that the Company had expressed its requirement for a large area of land under the development scheme and the resolution dated March 29 1940 had approved of that requirement
It was recited in the resolution that the Company was employing a large number of labourers and removal of the factory to the outskirts of Delhi would contribute in a substantial measure to relief of congestion and also because establishment of a big concern in the industrial area would afford great stimulus to the development of the area
It was found after Part A  of the original scheme was carried out that the area provided for the Company was inadequate for its requirements and the Company requested that a larger area may be provided and accordingly the supplementary scheme was framed
Resort to the provisions of the Act for acquiring land with a view to hand it over to an industrial concern for private gain may not fall within the terms of the Act
But in the circumstances already set out a scheme framed which contemplates acquisition of land for effectuating the object of the original scheme is not open to challenge on the ground that it is a device to acquire land to be disposed of for private gain of an industrialist
The original and the supplementary schemes must be regarded as one composite scheme conceived in the interests of industrial development and relief of congestion by inducing a flow of population from the congested areas
The object of the supplementary scheme was to effectuate the purpose of the original scheme and failure to frame that scheme may seriously have affected the utility of the original scheme
There is no warrant for the contention raised by the appellants that the land was not to be developed by the Trust but was to be acquired and handed over to the Company
It is clear from the scheme that the general supervision and control over the execution 36 of the supplementary scheme as over the original scheme was retained by the Trust and the Company was to develop the land subject to control under the Town Planning Scheme
The argument that in a town expansion scheme under section 32 read with section 24h of the Act there is no power to acquire land compulsorily is futile
Section 23a in terms authorises acquisition by purchase exchange or otherwise of any property necessary for or affected by the execution of the scheme
That provision may be incorporated in any of the improvement schemes of the types mentioned in section 24
Again Section 32 clearly implies that in a town expansion scheme such a power would be reserved for the Trust is statutorily declared liable to pay compensation when permission to alter any building or wall on the land in the area is denied if the Trust does not proceed to acquire such land within one year from the date of such refusal
By section 55 a general power to purchase orlease by agreement of any land which the Trust is authorised to acquire is granted and by section 56 power to acquire land under the Land Acquisition Act 1894 is expressly conferred
It is true that under the provisions relating to other classes of schemes for instance section 262f section 282a section 293 an express provision with regard to acquisition of land is made and there is no such express provision in section 32
But that by itself is not sufficient to justify an inference that the provisions of section 23a relating to acquisition of land necessary for or affected by the execution of the scheme may not be conferred in sanctioning a town expansion scheme
If the view contended for be correct section 23a will not have application to any scheme
We are unable to see any reason why section 56 which authorises the Trust to acquire land is to be restricted only to those cases in which in the case of a specific scheme an express provision conferring power of acquisition apart from section 23a is conferred
Nor is there any substance in the contention that the provi sions of Part VII of the Land Acquisition Act had to be resorted to by the Trust for acquiring land which was to be allotted to a Company after development
If the land is to be notified for acquisition under the Land Acquisition Act for a Company the requirements of Part VII of the Land Acquisition Act must undoubtedly be complied with and failure to do so would render the acquisition invalid
In this case land was not to be acquired for the Company it was to be acquired for carrying out the industrial development and town expansion scheme of the Trust and then it was to be allotted for carrying out the scheme to the Company for development
Power to include provision for sale of land comprised in the scheme may competently be conferred under section 23g of the Act and may be exercised under section 65
Mere inclusion of a power of sale of land acquired under a scheme does not therefore vitiate a scheme
The argument that in passing the resolution for bringing into force the supplementary scheme one of the Directors of the Company had participated need not detain us
This argument was 37 apparently not raised before the High Court and having regard to the terms of sections 42  100 of the Act has no force
It is true that if the land of the appellants had been acquired under the Land Acquisition Act the appellants may have become entitled to the statutory solatium in addition to the market value
But if the Act is valid and could be resorted to for compulsorily acquiring land of the appellants the awards made under the Act are not open to challenge on the ground that if another scheme of acquisition had been resorted to the appellants may possibly have obtained more compensation
The appeal must therefore fail
Having regard however to the circumstances of the case we think that in this case there should be no order as to costs throughout
Appeal dismissed


Summary:
The Delhi Improvement Trust set up under the UP Town Improvement Act 8 of 1908 extended to the territory of Delhi prepared and notified under the Act an industrial development scheme intended to secure the growth of an industrial area so as to induce a flow of population away from the crowded parts of Delhi
Land in the area was to be developed by the Trust and a part of the land was to be allotted to industrial concerns for construction of industrial building and the rest for construction of residential and other buildings
Under the scheme one particular company was to be allotted a certain acreage of land but the land covered by the scheme was found inadequate for this purpose
A supplementary scheme was therefore notified modifying the original scheme and providing for the acquisition of an additional area of land to be sold to the company
Under the terms of sale this additional area was to be developed by the Company
The appellants whose lands were sought to be compulsorily acquired under the supplementary scheme sued the Trust challenging the legality of the scheme and the award made in the acquisition proceedings
The Subordinate Judge decreed the suit but on appeal the High Court reversed this decision
In the appeal to this Court three questions fell for determination i whether acquisition of I and of the appellants under the supplementary scheme was for the purposes of the Act ii whether for executing the supplementary scheme the Trust had power to compulsorily acquire land and iii whether land of the appellants could be acquired only in the manner provided by Part VII of the Land Acquisition Act 1894
HELDThe High Court was right in refusing to decree the suit
iThe original and supplementary schemes had to be regarded as one composite scheme conceived in the interests of industrial development
The original scheme was primarily a town expansion scheme within the meaning of the Act and the supplementary scheme was framed for the further progress of and to effectuate the purpose of the original scheme Acquisition of land for industrial development and making provision for the residence of employees in the industries would clearly fall within the terms of s24h read with section 32
The provisions of the Act would not justify acquisition of land with a view to handing it over to an industrial concern for private gain
But this was riot the position in the present case as a scheme 28 which contemplated acquisition of land for effectuating the object of the original scheme was not a device to acquire land for the private gain of an industrialist
The general supervision and control over the execution of the supplementary scheme as over the original scheme was retained by the Trust and the Compnay was to develop the land subject to control under the Town Planning Scheme
35 C F G HI iiPower to acquire land compulsorily was conferred by s23 a which in terms authorised acquisition by purchase exchange or otherwise of any property necessary or affected by the execution of the scheme and this provision could be incorporated in any of the improvement schemes of the type mentioned in s24
The power could also be exercised under ss32 55 and 56
Under the provisions relating to other classes of schemes express provision with regard to acquisition of land was made and such express provision was absent in s32 dealing with town expansion schemes
But that would not justify the inference that the provisions of s23a relating to acquisition of land necessary for or affected by the execution of the scheme were not available in sanctioning a town expansion scheme
Were it otherwise s23a would not have application to any scheme at all
36 B E iiiThe provisions of Part VII of the Land Acquisition Act 1894 did not have to be followed for in this case land was not to be acquired for the company it was to be acquired for carrying out an industrial development scheme
Mere inclusion of a provision for sale of land comprised in the scheme did not vitiate the scheme
If the Act was valid and could be resorted to for compulsorily acquiring land the awards made under the Act were not open to challenge on the ground that if another scheme of acquisition had been resorted to more compensation could have been paid to the appellants
36 F G 37 B