134 of 1959
Petition under article 32 of the Constitution of India for enforcement of fundamental rights
J C Bhatt R Ganapathy Iyer and G Gopalakrishnan for the petitioner
N section Bindra R H Dhebar and T M Sen for respondents Nos 1 and 2
section K Kapur P M Mukhi and B P Maheshwari for respondent No 3 1960
August 8
The Judgment of the Court was delivered by 17 130 SINHA CJ
This petition under article 32 of the Constitution impugns the constitutionality of the land acquisition proceedings with particular reference to the notification under section 4 of the Land Acquisition Act hereinafter referred to as  the Act  in respect of an area of land within the district of Thana in the State of Bombay now known as the State of Maharashtra
In order to appreciate the controversy raised in this case it is necessary to state the following facts
By a notification dated April 3 1959 the first respondent the State of Bombay now Maharashtra under section 4 of the Land Acquisition Act of 1894 stated that the lands specified in the schedule attached to the said notification were likely to be needed for the purposes of the third respondent Messrs Mukund Iron  Steel Works Ltd a company registered under the Indian Companies Act 1913 and having its registered office at Kurla Bombay No 37 in the State of Maharashtra for its factory buildings etc
The notification further stated that under cl
c of section 3 of the Act the Government was pleased to appoint the Special Land Acquisition Officer the second respondent to perform the functions of the Collector under section 5A of the said Act
The land in which the petitioner who is a citizen of India claims to be interested as owner is included in the schedule aforesaid
The petitioner appeared before the second respondent aforesaid and after several adjournments lodged objections on June 9 1959 and also made oral submissions through his Advocate on that date and the day following and requested the second respondent to quash the proceedings on the ground that the lands contained in the notification were not required for any public purpose and that the proceedings were vexatious and malicious
It was further stated before the second respondent that the third respondent had negotiated by private treaty for the purchase of the notified area
The second respondent adjourned further hearing of the case in order to enable the petitioner and the third respondent to come to an amicable settlement
A further hearing took place before the second respondent on July 15 1959
On 131 that date the petitioner proposed to lead evidence of owners of several pieces of land included in the area notified for acquisition to prove that the lands included in the schedule to the notification were not as a matter of fact required by the third respondent for any public purpose and that the third respondent had even negotiated for the purchase of the said lands by private treaty but the second respondent refused permission to lead such evidence on behalf of the petitioner
The petitioner raises a number of questions of law attacking the constitutionality of the land acquisition proceedings and prays for orders or directions to the State Government not to give its consent to the aforesaid acquisition under section 39 of the Act nor to enter into any agreement with the third respondent under section 41 of the Act nor to issue a notification under section 6 of the Act declaring that the land in question is needed for a public purpose because after such a declaration the petitioner may be deprived of the opportunity of contending that the land was not needed for a public purpose
The third respondent through its Business Manager has put in an affidavit in answer to the petitioner s case and has contended that this writ petition is premature and not maintainable that so far only a notification under section 4 of the Act has been issued and objections under section 5A on behalf of the petitioner have been heard by the second respondent that the State Government has yet to be satisfied as to whether the acquisition is for purposes specified in section 40 of the Act and so long as the previous consent of the appro priate Government has not been given the provisions of sections 6 to 37 of the Act cannot be put into operation
It is denied that the acquisition is not for a public purpose and that the proceedings are vexatious or malicious
The third respondent does not admit that the second respondent refused permission to the petitioner to lead any evidence
The averments in the petition on the merits of the controversy are denied
It is stated on behalf of the third respondent that public are vitally interested in the production of this 132 Company the chief products being steel bars and rods which are in great public demand and are of such vital necessity to the country that their very production distribution supply and price are controlled by the Government
The products of the Company are consumed directly in bulk for public utility projects like dams hydroelectric projects roads railways industrial plants and housing projects both in the public and private sectors which constitute the core of the several five year plans of the Government
It is further stated that the Company respondent No 3 has included in its proposed industrial expansion projects to be established on the land sought to be acquired extensive provisions for housing for a large number of employees  families as also for their welfare by providing for parks gardens playgrounds medical relief centre and similar other amenities for the welfare of the employees and their families
All those projects it is claimed on behalf of the third respondent are a  highly commendable public purpose  which is far more advantageous to the community in general than to shareholders of the Company
It is further stated that the first respondent made a detailed investigation about the usefulness to the public of the expansion project of the Company including employees  housing schemes and welfare projects and when it was satisfied about the bona fides of the respondent Company and the genuineness and urgency of their projects and their utility to the public that the first respondent published the notification under section 4 of the Act on April 3 1959
The affidavit sworn to by the second respondent Special Land Acquisition Officer Thana also questions the maintainability of the writ petition and generally supports the case sought to be made out by the third respondent
It is also stated on his behalf that the petitioner or any of the other persons interested in the land sought to be acquired did not produce any evidence and that it was absolutely incorrect to say that he prevented anyone from leading any evidence as alleged
The Special Land Acquisition Officer has made the following categorical statements 133 It is denied that the acquisition of the said lands for the purpose of the third respondent is in no way useful to the public or that the public are not entitled to the use of any of the works of the Company as alleged by the petitioner
I say that the products which are being produced and will be produced are used and intended to be used inter alia in public undertakings intended for the general industrial development of the country
It is denied that the proposed acquisition is merely for the benefit of few individuals namely the shareholders of the Company as alleged by the petitioner
 Further on he adds the following  With reference to paragraph 13 of the said petition it is denied that I did not permit the petitioner to lead any evidence before me as alleged by the petitioner
This allegation I say is absolutely dishonest and false
It is denied that the notification issued by Government under section 4 of the said Act is not bona fide or is an abuse of the powers vested in Government
It is denied that the said notification is illegal or that it is not made in good faith 
On these allegations and counter allegations the petitioner has moved this Court to exercise its powers under article 32 of the Constitution on the grounds that the notification under section 4 of the Act is illegal that the land acquisition proceedings are in violation of articles 14 19 and 31 of the Constitution and that the acquisition is not for a public purpose and is mala fide
In order to determine the present controversy it will be convenient at this stage to examine the relevant provisions of the Act
The Act has the following preamble  Whereas it is expedient to amend the law for the acquisition of land needed for public purposes and for Companies and for determining the amount of compensation to be made on account of such acquisition  
In the definition section 3 the definitions of  Company  and  public purpose  are particularly noteworthy
The expression  Company  has been used in a very comprehensive sense of including not only 134 the Companies registered under several statutes Indian and English but also includes a society registered under the Societies Registration Act of 1860 and a registered society within the meaning of the Co operative Societies Act
The expression  public purpose  includes the provision of village sites in districts in which the appropriate Government shall have declared by notification in the official gazette that it is customary for the Government to make such provision
It will thus be noticed that the expression  public purpose  has been used in its generic sense of including any purpose in which even a fraction of the community may be interested or by which it may be benefited
The proceedings begin with a Government notification under section 4 that land in any locality is needed or is likely to be needed for any public purpose
On the issue of such a notification it is permissible for a public servant and workmen to enter upon the land to do certain acts specified therein with a view to ascertaining whether the land is adapted for the purpose for which it was proposed to be acquired as also to determine the boundaries of the land proposed to be included in the scheme of acquisition
It will be noticed that though the preamble makes reference not only to public purposes but tlso to Companies the preliminary notification under section 4 has reference only to public purpose and not to a Company Section 5A which was inserted by the amending Act of 1923 and makes provision for hearing of objections by any person interested in any land notified under section 4 makes reference not only to public purpose but also to a Company
It is noticeable that section 5A predicates that the notification under section 41 may not only refer to land needed for a public purpose but also to land needed for a Company and after the enquiry as contemplated by section 5A has been made and the Collector has heard objections if any by interested parties he has to submit his report to the Government along with the record of the proceedings held by him and his recommendations on the objections
Thereupon the Government has to make up its mind whether or not 135 the objections were well founded and the decision of the appropriate Government of those objections is to be treated as final
If the Government decides to overrule the objections and is satisfied that the land the subject matter of the proceedings was needed for a public purpose or for a Company a declaration has to be made to that effect
Such a declaration has to be published in the official gazette and has to contain the particulars of the land including its approximate area and the purpose for which it is needed
Once the declaration under section 6 has been made it shall be conclusive evidence that the land is needed for a public purpose or for a Company
Then follow the usual Proceedings after notice is given to the parties concerned to claim compensation in respect of any interest in the land in question  and the award after making the necessary investigation as to claims to conflicting title the compensation to be allowed in respect of the land and if necessary apportionment of the amount of compensation amongst the persons believed to be interested in the land under acquisition
We are not concerned here with the proceedings that follow upon the award of the Collector and the matters to be agitated therein
From the preamble as also from the provisions of sections 5A 6 and 7 it is obvious that the Act makes a clear distinction between acquisition of land needed for a public purpose and that for a Company as if land needed for a Company is not also for a public purpose
The Act has gone further and has devoted Part VII to acquisition of land for Companies and in sub section
2 section of 38 with which Part VII begins provides that in the case of an acquisition for a Company for the words  for such purpose  the words  for purposes of the Company  shall be deemed to have been substituted
It has been laid down by section 39 that the machinery of the Land Acquisition Act beginning with section 6 and ending with section 37 shall not be put into operation unless two conditions precedent are fulfilled namely 1 the previous consent of the appropriate Government has been obtained and 2 an agreement in terms of section 41 has been executed by the Company
136 The condition precedent to the giving of consent aforesaid by the appropriate Government is that the Government has to be satisfied on the report of the enquiry envisaged by section 5A2 or by enquiry held under section 40 itself that the purpose of the acquisition is to obtain land for the erection of dwelling house  for workmen employed by the Company or for the provision of amenities directly connected therewith or that such acquisition is needed for the construction of some work which is likely to prove useful to the public
When the Government is satisfied as to the purposes aforesaid of the acquisition in question the appropriate Government shall require the Company to enter into an agreement providing for the payment to the Government 1 of the cost of the acquisition 2 on such payment the transfer of the land to the Company and 3 the terms on which the land shall be held by the Company
The agreement has also to make provision for the time within which the conditions on which and the manner in which the dwelling houses or amenities shall be erected or provided and in the case of a construction of any other kind of work the time within which and the conditions on which the work shall be executed and maintained and the terms on which the public shall be entitled to use the work
Such are the relevant provisions of the Act that we have to consider with reference to the question of the constitutionality of the land acquisition proceedings now impugned
The first ground of attack is based on article 312 of the Constitution
The provisions of article 312 make it clear beyond all controversy that in order that property may be compulsorily acquired the acquisition must be for a public purpose and by authority of law
But article 315a lays down that nothing in cl
2 shall affect the provisions of any existing law other than a law to which the provisions of cl
6 applies and the Act is obviously a law to which the provisions of cl
6 do not apply
Therefore even if the Act contemplated acquisition for a company which may or may not be for a public purpose it would be saved by article 315a as an existing law
See Lilavati Bai vs State of Bombay 1
Further though it may 1  137 appear on the words of the Act contained in Part 11 which contains the operative portions of the proceedings leading up to acquisition by the Collector that acquisition for a Company may or may not be for a public purpose the provisions of Part VII make it clear that the appropriate Government cannot permit the bringing into operation the effective machinery of the Act unless it is satisfied as aforesaid namely that the purpose of acquisition is to enable the Company to erect dwelling houses for workmen employed by it or for the provision of amenities directly connected with the Company or that the land is needed for construction of some work of public utility
These require ments indicate that the acquisition for a Company also is in substance for a public purpose inasmuch as it cannot be seriously contended that constructing dwelling houses and providing amenities for the benefit of the workmen employed by it and construction of some work of public utility do not serve a public purpose
It is not necessary for the purposes of this case to go into the question whether acquisition for a Company even apart from the provisions of section 40 will be for a public purpose or justifiable under the provisions of the Act even on the assumption that it will not serve a public purpose
The facts of the present case have not been investigated as this Court was moved when only a notification under section 4 of the Act had been issued and the purpose of the acquisition in question was still at the enquiry stage
By section 38A which was inserted by the amending Act of 1933 it has been made clear that an industrial concern not being a Company ordinarily employing not less than 100 workmen may also take the advantage of land acquisition proceedings if the purpose of the acquisi tion is the same as is contemplated by section 40 in respect of Companies
It has been recognised by this Court in the case of The State of Bombay v Bhanji Munji and Another 1 that providing housing accommodation to the homeless is a public purpose
In an industrial concern employing a large number of workmen away 1 1955 1 SCR 777 18 138 from their homes it is a social necessity that there should be proper housing accommodation available for such workmen
Where a large section of the community is concerned its welfare is a matter of public concern
Similarly if a Company is generous enough to erect a hospital or a public reading room and library or an educational institution open to the public it cannot be doubted that the work is one of public utility and comes within the provisions of the Act
We are not in possession of all the relevant facts in the present case as to the exact purpose for which the land is sought to be acquired
That investigation was in progress when the petitioner moved this Court
Hence the contention raised on behalf of the respondents that the application is premature is not wholly devoid of merit
But the main attack on the constitutionality of the proceedings in question was based upon the notification under section 4 which is in these terms  exhibit  A 
NOTIFICATION REVENUE DEPARTMENT
Sachivalaya Bombay 3rd April 1959
LAND ACQUISITION ACT 1894 1 of 1894
District Thana
No LTH
15 5942051 H Whereas it appears to the Government of Bombay that the lands specified in the schedule hereto are likely to be needed for the purposes of the Company viz for factory buildings etc of Ms Mukund Iron and Steel Works Limited Bombay
It is hereby notified under the provisions of section 4 of the Land Acquisition Act 1894 I of 1894 that the said lands are likely to be needed for the purpose specified above
All persons interested in the said lands are hereby warned not to obstructor interfere with any surveyors or other persons employed upon the said lands for the purpose of the said acquisition
Any contracts for the disposal of the said lands by sale lease mortgage assignment exchange or otherwise or any outlay or improvements made therein without the sanction of the Collector after the date of this notification will 139 under section 24 seventhly of the said Act be disregarded by the officer assessing compensation for such parts of the said lands as may be finally acquired
If the Government of Bombay is satisfied that the said lands are needed for the aforesaid purpose a final notification to that effect under section 6 of the said Act will be published in the Bombay Government Gazette in due course
If the acquisition is abandoned wholly or in part the fact will be duly notified in the Bombay Government Gazette
Under clause c of section 3 of the Land Acquisition Act 1894 the Government of Bombay is pleased to appoint the Special Land Acquisition Officer Thana to perform the functions of a Collector under section 5 A of the said Act in respect of the said lands
 It is argued that in terms the notification does not state that the land sought to be acquired was needed for a public purpose
In our opinion it is not absolutely necessary to the validity of the land acquisition proceedings that that statement should find a place in the notification actually issued
The requirements of the law will be satisfied if in substance it is found on investigation and the appropriate Government is satisfied as a result of the investigation that the land was needed for the purposes of the Company which would amount to a public purpose under Part VII as already indicated
See in this connection The State of Bombay vs Bhanji Munji and Another 1
In that case the question was whether the Bombay Land Requisition Act Bombay Act XXXIII of 1948 was invalid inasmuch as the purpose for the requisition was not in express terms stated to be a public purpose
This Court laid it down that the statute was not invalid for that reason provided that from the whole tenor and intendment of the Act it could be gathered that the property was acquired either for the purpose of the State or for any public purpose
It is further argued that section 41 of the Act had deli berately omitted the words  for a Company  and insisted upon a public purpose
The absence from the notification under section 4 aforesaid of those words 1 1955 1 SCR 777
140 namely for a public purpose are fatal to the proceedings
The purpose if the notification under section 4 is to carry on a preliminary investigation with a view to finding out after necessary survey and taking of levels and if necessary digging or boring into the sub soil whether the land was adapted for the purpose for which it was sought to be acquired
It is only under section 6 that a firm declaration has to be made by Government that land with proper description and area so as to be identifiable is needed for a public purpose or for a Company
What was a mere proposal under section 4 becomes the subject matter of a definite proceeding for acquisition under the Act
Hence it is not correct to say that any defect in the notification under section 4 is fatal to the validity of the proceedings particularly when the acquisition is for a Company and the purpose has to be investigated under section 5A or section 40 necessarily after the notification under section 4 of the Act
The other attack under article 191f of the Constitution is equally futile in view of the decisions of this Court in State of Bombay vs Bhanji Munji and Another 1 and Lilavati Bai vs State of Bombay 2
Nothing was said with reference to the provisions of article 14 of the Constitution though that Article has been referred to in the grounds in support of the writ petition
For the reasons given above this petition must be dismissed with costs to the contesting parties
Petition dismissed
1 1955 1 SCR 777


Summary:
Section 61 of the Bombay Tenancy and Agricultural Lands Act 1948 Bom
LXVII of 1948 provided that the maximum rent payable by a tenant shall not in the case of irrigated land exceed one fourth and in the case of any other land exceed one third of the crop of such land or its value as determined by the prescribed manner
Section 62 of the Act read as follows  The Provincial Government may by notification in the Official Gazette fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or may fix such rate on any other suitable basis as it thinks fit By a notification under that section the Government of Bombay in supersession of all other notifications prescribed a rate of maximum rent which was very much lower than the one previously fixed
The petitioners challenged the vires of the said section and the validity of the notification under article 226 of the Constitution but the High Court found against them
The question for determination in these appeals was whether section 62 conferred unguided power on the Government and was void by reason of excessive delegation of legislative power
342 Held per Sinha C J Kapur Gajendragadkar and Wanchoo jj that although the power of delegation is a constituent element of the legislative power it is well settled that a legislature cannot delegate its essential legislative function in any case and before it can delegate any subsidiary or ancillary powers to a delegate of its choice it must lay down the legislative policy and principle so as to afford the delegate proper guidance in implementing the same
A statute challenged on the ground of excessive delegation must therefore be subjected to two tests 1 whether it delegates essential legislative function or power and 2 whether the legislature has enunciated its policy and principle for the guidance of the delegate
It is in that light that the preamble of the statute and its provisions relating to delegation should be considered
Harishankay Bagla vs The State of Madhya Pradesh and The Edward Mills Co Ltd Beawar vs State of Ajmer   referred to
The preamble and the material provisions of the Act show that it seeks to improve the economic and social condition of the peasants and with that end in view fixes maximum rent payable by the tenants and provides a speedy machinery for fixation of reasonable rent
This being the legislative policy and regard being had to the specific provisions laid down by section 123 of the Act for determining reasonable rent it is impossible to hold that the power delegated to the Provincial Government by section 62 was vitiated by excessive delegation
The fact that no minimum was prescribed by the section could not alter the position
Held further that since the Act itself is within the protection of article 31 B of the Constitution and there can be no question as to the validity of section 62 the notification issued in exercise of the power conferred by that section cannot be challenged as infringing article 31 of the Constitution
Nor was it correct to say that the power delegated by section 62 could be used only once and no more
Per Subba Rao J The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct
Obviously the legislature cannot abdicate its functions in favour of another
But in view of the multifarious activities of a welfare State it cannot presumably work out all the details to suit the varying aspects of a complex situation
It must necessarily delegate the working out of details to the executive or any other agency
But there is a danger inherent in such a process of delegation
It may not lay down any policy at all it may declare its policy in vague and general terms it may not set down any standard for the guidance of the executive it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation
This self effacement of legislative power in favour of another agency 343 either in whole or in part is beyond the permissible limits of delegation
It is for a Court to hold on a fair generous and liberal construction of an impugned statute whether the legislature exceeded such limits
But the said liberal construction should not be carried by the courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power conferred on executive authorities
In re The    Rajnarain Singh vs The Chairman Patna Administration Committee Patna   Harishankay Bagla vs The State of Madhya Pradesh  The Edward Mills Co Ltd Beaway vs The State of Ajmer  and Hamdard Dawakhana vs Union of India   referred to
The whole scheme of the Bombay Tenancy and Agricultural Lands Act 1948 LXVII of 1948 excluding section 62 is a self contained and integrated one
The legislature fixes the maximum rent linked with crop having regard to the nature of the land and the other provisions enable the appropriate authorities to fix reasonable rent subject to that maximum
But under section 62 the legislature in clearest terms abdicated its essential functions in favour of the executive authority without laying down any standard for its guidance
In effect it permitted the Government to amend section 61 of the Act
While section 61 overrides other provisions of the Act section 62 derogates from section 61 itself
Section 62 is capable of being exercised in such a way that the object of section 61 is itself frustrated
Section 61 in effect is made subject to section 62
This is clearly an abdication by the legislature of its essential legislative function and the delegation must be held void
It was not correct to say that the factors specified by section 123 afforded a standard for fixing the maximum rent
It was not permissible to read them into section 62 of the Act
No legislature can be legally permitted to lay down a broad policy in general terms and confer arbitrary powers on the executive for carrying it out
Such a law must obviously be contrary to the decisions of this Court and cannot be valid