Appeal No 177 of 1962
Appeal by special leave from the judgment and order dated August 8 1961 of the Madhya Pradesh High Court in Misc
Petition No 81 of 1961
Naunit Lal for the appellant
IN shroff for respondents Nos
Rajani Patel and 1
N Shroff for the Intervener
February 3 1964
The Judgment of the Court was delivered by WANCHOO J
This is an appeal by special leave against the judgment of the Madhya Pradesh High Court
The appellants filed a writ petition in the High Court challenging the validity of a notification issued under section 6 of the Land Acquisition Act No 1 of 1894 hereinafter referred to as the Act Their case was that they were owners of certain lands in Chhaparwah
On July 8 1960
a notification was issued under section 4 of the Act to the effect that certain land in village Chhaparwah was required for a 638 public purpose namely for the construction of buildings for godowns and administrative office
Thereafter proceed ings appear to have been taken under section 5 A of the Act and an inquiry was made by the Collector
It may be mentioned that the acquisition proceedings were taken at the instance of the Premier Refractories of India Private Limited Katni
which is a company
The Collector reported that the land was essential for the company and was needed for a public purpose and the objections of the land owners has no subst ance
He therefore recommended that a declaration under section 6 of the Act might be made
He also reported that a draft agreement to be executed between the company and the Government as required by section 41 of the Act was being sub mitted along with a draft notification under section 6
This report was made on October 17 1960
On December 3 1960 the notification under section 6 was issued stating that the State Government was satisfied that the land described in the annexure to the notification was required for a public purpose namely for the construction of buildings for godowns and administrative office and hence the notification was issued
It may be noticed that the notification under section 6 did not say that the land was required for a company
Thereupon the appellants filed a writ petition in the High Court on March 20 1960 and their main contentions were two namely
1 that the notification under section 6 did not describe the land to be acquired with sufficient particularity and was therefore of no effect and 2 that the notification mentioned that the land was required for a public purpose though in actual fact the land was required for a company which was entirely different from Government and therefore was invalid
Soon after the writ petition was filed the State Government issued a fresh notification on April 19 1961
This notification was mainly under section 17 1 read with section 174 of the Act which provides that in case of urgency the State Government may direct the Collector before the award is made under certain circumstances to take possession of any waste or arable land needed for a public purpose or for a company
Curiously enough this notification stated that the State Government also directed that the provisions of section 5 A would not apply though as we have already stated
an inquiry under section 5 A had already been made before the noti fication of December 3 1960 was issued
The notification 639 further stated that it was declared under section 6 of the Act that the land was required for a public purpose namely for the Premier Refractory Factory and work connected therewith
It appears however that the real reason for issuing this notification in this form was to make good the lacuna which appeared in the notification of December 3 1960 inasmuch as the property to be acquired was not specified with sufficient particularity in that notification
It may be noticed that this notification of April 19 1961 treating it as a notification under section 6 as well nowhere specified that the land was required for a company it only stated that the land was required for a public purpose namely for the Premier Refractory Factory and work connected therewith
When the matter came to be argued before the High Court the main point that was urged was that both the notifications under section 6 of December 3 1960 and April 19 1961 were invalid because he acquisition was not for a public purpose as started therein in fact the acquisition was for a company which was entirely different from Government
The High Court apparently held that the substance of the notifications showed that the land was being required for a public purpose as well as for the purpose of a company
The High Court was further of the view that insofar as the declaration spoke of the acquisition of land for a public purpose it was ineffective as admittedly the compensation for the property was to be paid wholly by the company and no part of it was to be paid out of public funds
Even so the High Court held that the declaration must be read in substance and in law as one for acquisition of land for a company namely the Premier Refractories of India Private Limited
In this view of the matter the High Court dismissed the writ petition
The only question that has been urged before us on behalf of the appellants is that the High Court was in error in reading the two notifications as in substance amounting to a declaration that the land was required for a company
Section 61 of the Act requires that whenever any land isneeded for a public purpose or for a company a declaration shall be made to that effect
Further the proviso to s61provides that no such declaration shall be made unless the 640 compensation to be awarded for such property is to be paid by a company or wholly or partly out of public revenues or some fund controlled or managed by a local authority
This clearly contemplates two kinds of declarations
In the first place a declaration may be made that land is required for a public purpose in which case in view of the proviso the compensation to be awarded for the property to be acquired must come wholly or partly out of public revenues or some fund controlled or managed by a local authority
No declaration under section 6 for acquisition of land for a public purpose can be made unless either the whole or part of the compensation for the property to be acquired is to come out of public revenues or some fund controlled or managed by a local authority see Pandit Jhandu Lal vs State of Punjab1
In the second place the declaration under section 6 may be made that land is needed for a company in which case the entire compensation has to be paid by the company
It is clear therefore that where the entire compensation is to be paid by a company the notification under G 6 must contain a declaration that the land is needed for a company
No notification under section 6 can be made where the entire compensation is to be paid by a company declaring that the acquisition is for a public purpose for such a declaration requires that either wholly or in part compensation must come out of public revenues or some fund controlled or managed by a local authority
In the present case it is not in dispute that no part of the compensation is to come out of public revenues or some fund controlled or managed by a local authority on the other hand the whole compensation was to be paid by the company
Therefore the notification under section 6 if it was to be valid in the circumstances of the present case had to declare that the land was needed for a company
No valid notification under section 6 could be made in the circumstances of this case declaring that the land was needed for a public purpose for no part of compensation was to be paid out of public revenues or some fund controlled or managed by a local authority
That is why the High Court felt that the notification under section 6 declaring that the land was needed for a public purpose 1  641 would in the circumstances of this case be ineffective
But the High Court went on to hold that the notifications under section 6 must in substance and in law be deemed to be for acquisition of land for a company in the present case
We are of opinion that this view of the High Court is incorrect
There is nothing in either of the two notifications dated December 3 1960 and April 19 1961 to show that the land was needed for a company
The notification of December 3 1960 says in so many words that it was required for a public purpose namely for the construction of buildings for godowns and administrative office
No one reading this notification can possibly think that the land was needed for a company
Similarly the notification of April 19 1961 says that the land was needed for a public purpose namely for the Premier Refractory Factory and work connected therewith
Now the company for which the land in this case was in fact required is the Premier Refractories of India Private Limted Katni
There is nothing in the notification of April 19 1961 to show that the land was needed for this company or any other company
All that the notification of April 19 1961 says is that the land was needed for a public purpose and the public purpose mentioned there was that the land was required for the Premier Refractory Factory and work connected therewith
The High Court thought that in substance this purpose showed that the land was required for the company mentioned above
But we do not see how because the purpose specified was for the Premier Refractory Factory and work connected therewith it can be said that the notification declared that the land was needed for the company
It is not impossible for the Government or for a local body to own such a factory and construct works in connection therewith
The mere fact that the public purpose mentioned was for the Premier Refractory Factory and work connected therewith therefore cannot mean that the land was needed for a company as one reads the notification of April 19 1961 one can only come to the conclusion that the land was needed for a public purpose namely for the construction of some work for a factory
There is no mention of any company anywhere in this notification and it cannot necessarily be concluded that the Premier Refractory Factory was a com 134 159 SC 41 642 pany for a factory is something very different from a  company and may belong to a company or to Government or to a local body or even to an individual
The mere fact that the public purpose declared in the notification was for the Premier Refractory Factory and work connected therewith cannot therefore lead to the inference that the acquisition was for a company
It follows that when the two notifications declared that the land was needed for a public purpose in a case where no part of the compensation was to come out of public revenues or some fund controlled or managed by a local authority they were invalid in view of the proviso to section 61 of the Act
All proceedings following on such notifications would be of no effect under the Act
We therefore allow the appeal and set aside the order of the High Court and quash the notifications under section 6 of the Act and restrain the respondents from taking any steps towards the acquisition of the land notified thereunder
As however the point on which the appellants have succeeded was not specifically taken in the writ petition we direct the parties to bear their own costs throughout
Appeal allowed


Summary:
The Government issued a notification on December 3 1960 under section 6 of the Land Acquisition Act stating that the land described in the annexure to the notification was required fora public purpose namely for the construction of buildings for godownsand administrative office
The appellants challenged the validity of thenotification in the High Court contending that the notification unders
6 of the Act did not describe the land to be acquired with sufficient particularity and that although the notification mentioned that the land was required for a public purpose in fact it was required for a company which was entirely different from Government and was therefore invalid
Soon after the writ petition was filed the State Government issued a fresh notification on April 19
1961 mainly under section 171 read with section 174 of the Act
The notification stated that it was declared under section 6 of the Act that the land was required for a public purpose namely for the Premier Refractory Factory and work connected therewith
 At the time of hearing of the writ petition in the High Court it was urged on behalf of the appellants that both the notifications under section 6 of the December 3 1960 and April 19
637 1961 were invalid because the acquisition was not for a public purpose as stated therein in fact it was for a company which was entirely different from Government
The High Court dismissed the writ petition and held that the notifications under section 6 must in substance and in law be demed to be for acquisition of land for a company in the present case
Held Where the entire compensation is to be paid by a company
the notification under section 6 must contain a declaration that the land is needed for a company
No notification under section 6 can be made where the entire compensation is to be paid by a company declaring that the acquisition is for a public purpose for such a declaration requires that either wholly or in part compensation must come out of public revenues or some fund controlled or managed by a local authority
Pandif Jhandu Lal vs State of Punjab   followed
In the present case the whole compensation was to be paid by the company therefore the notification under section 6 had to declare that the land was needed for a company
There was nothing in either of the two notifications of December 3 1960 and April 19 1961 to show that the land was needed for a company therefore they were invalid in view of the proviso to section 6 1 of the Act and all proceedings following on such notifications would be of no effect under the Act