IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P. No. 19446 of 2002 Date of Decision: November 26, 2008 Brig. Sassi Inder Singh (Retd.) and others …Petitioners Versus State of Punjab and others …Respondents CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MRS. JUSTICE SABINA Present: Mr. M.L. Sarin, Senior Advocate, with Mr. Hemant Sarin, Advocate, for the petitioners. Ms. Charu Tuli, Sr. DAG, Punjab, for respondent No. 1. Mr. A.R. Takkar, Advocate, for respondent Nos. 2 to 4. 1. Whether Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporters or not? Yes 3. Whether the judgment should be reported in the Digest? Yes M.M. KUMAR, J. 1. This petition filed under Article 226 of the Constitution prays for quashing notice dated 10.12.1999 (P-1), notification dated 22.11.2001 (P-4), award dated 20.11.2002 (P-7), amended award dated 22.11.2002 (P-8) and all the subsequent proceedings thereto. 2. Brief facts of the case are that Smt. Devinder Kaur, mother of petitioner Nos. 1 to 4 was owner of land measuring C.W.P. No. 19446 of 2002 approximately 70 Kanals, comprised in Khasra Nos. 25//5(8-0), 6(8- 0), 7(8-0), 8(7-12), 9(8-0), 12(4-18), 13(4-4), 14/1(3-18), 15(3-0), 26//1/1(0-12), 9/3(1-12), 10(8-0), 11/1(3-9) and 12/1(0-15), in the revenue estate of village Jawaddi, Tehsil and District Ludhiana. The said land was bequeathed by her in favour of petitioner Nos. 1 to 4 in equal shares and after her death petitioner Nos. 1 to 4 inherited the land in question. The land in dispute falls within the municipal limits of Ludhiana and various amenities viz. water, electricity, sewerage, telephone and other civic amenities are available in the area. On 18.11.2001, petitioner No. 3 gifted her share in the land in dispute in favour of petitioner Nos. 8 and 9. On 12.4.2002, petitioner No. 1 sold his share in favour of petitioner Nos. 5, 6 and 7, vide two registered sale deeds. On 12.4.2002 itself, petitioner No. 4 also sold half of her 1/4 share in favour of petitioner No. 5. On 3.5.2002, petitioner No. 4 further gifted her remaining share in favour of petitioner No. 7. It is claimed that the change of ownership in respect of land in dispute has been duly recorded in the revenue record and mutation has been sanctioned in favour of petitioner Nos. 5 to 9. 3. On 16.11.1999, the Improvement Trust Ludhiana (for brevity, ‘the Trust’) passed Resolution No. 165 and decided to frame a development-cum-housing scheme under the provisions of the Punjab Town Improvement Act, 1922 (for brevity, ‘the Act’) and notice under Section 36 of the Act to acquire an area measuring 8.8 acres for the said development scheme was issued, which was published in the official gazette on 10.12.1999, 17.12.1999 and 2 C.W.P. No. 19446 of 2002 24.12.1999 (P-1). Objections from the interested persons were invited, which were to be filed within 30 days. Since the land of the petitioners was also included in the proposed development scheme, petitioner Nos. 1 to 3 filed objections with the Trust on 24.2.2000 (P- 2 & P-3). On 27.5.2000, objectors were called for hearing by the Trust. 4. On 17.11.2000, the State Government sanctioned the development scheme under Section 41 of the Act and notification in this regard was published in the official gazette on 22.11.2000, under Section 42 of the Act (P-4). On 18.7.2001, the State Level Land Acquisition Board issued a No Objection Certificate for acquisition of land for the development scheme framed by the Trust. 5. On 4.4.2002, the State Government exercising powers under Section 103(1) of the Act, issued a notification and dissolved the Trust (P-5) and vide a separate notification of even date appointed an Administrator for the Trust. 6. It is significant to notice that on 6.5.2002, the Land Acquisition Collector-respondent No. 4 issued notices under Section 9 of the Land Acquisition Act, 1894 (for brevity, ‘the 1894 Act’) calling upon petitioner Nos. 1 to 4 to file their claims for compensation and to appear before him on 27.5.2002. The petitioners have claimed that no such notice was issued to petitioner Nos. 5 to 9 despite the fact that they stepped into the shoes of petitioner Nos. 1, 3 and 4. 3 C.W.P. No. 19446 of 2002 7. On 13.5.2000, the Land Acquisition Collector, Ludhiana Improvement Trust, Ludhiana was transferred and when petitioner Nos. 1 to 4 reached the office of the Collector on 27.5.2002 to lodge their claims for compensation, no officer was present there to hear them. 8. On 2.8.2002, the Administrator of the Trust-respondent No. 3 wrote a letter to the State Government that the development scheme would lapse in case the award was not announced and possession taken before 20.11.2002 (P-6). On 12.11.2002, a new incumbent was posted as Land Acquisition Collector, however, no fresh notices under Section 9 of the Act were issued to the petitioners for affording them hearing by the Collector. 9. It is claimed by the petitioners that on 17.11.2002, the acquisition proceedings lapsed because no award was announced by the Collector-respondent No. 4 within two years of sanction of the development Scheme under Section 41 of the Act, which was sanctioned by the State Government on 17.11.2000. On 18.11.2002, the Collector-respondent No. 4 sent a draft award for approval to the State Government, which was approved on 20.11.2002 and the Collector-respondent No. 4 announced the award on the same day (P-7). On 22.11.2002, an amended award was announced by the Collector-respondent No. 4 because there were some arithmetical mistakes in the original award (P-8). 10. On 27.11.2002, notices under Section 12 of the 1894 Act were issued to petitioner Nos. 1 to 4 by the Collector-respondent No. 4 C.W.P. No. 19446 of 2002 4 informing them that possession of the land in dispute would be taken on 10.12.2002 (P-9). However, no such notice was issued to petitioner Nos. 5 to 9. 11. On 7.12.2002, the petitioner filed the instant petition and vide order dated 9.12.2002, a Division Bench of this Court while issuing notice of motion and notice regarding stay ordered that dispossession of the petitioners was to remain stayed in the meantime. On 23.4.2007, the instant petition was admitted and ordered to be heard along with CWP No. 6252 of 2002. It was further ordered that interim directions were to continue. It is apposite to mention here that notification dated 4.4.2002, issued by the State Government dissolving the Trust under the provisions of Section 103(1) of the Act (P-5) and appointment of an Administrator of the Trust, was challenged by Shri Madan Mohan Vyas, the then Chairman of the Trust, in this Court by filing CWP No. 6252 of 2002, which has already been dismissed on 25.4.2008 by a Division Bench of this Court of which one of us (M.M. Kumar, J.) is a member and the judgment is now reported as Bakshi Ram Arora v. State of Punjab, 2008(3) PLJ 167. 12. In the written statement filed on behalf of the Trust- respondent Nos. 2 to 4 while admitting the factual position it has been denied that the Trust was dissolved by the State Government permanently. It has been claimed that it is common practice to appoint an Administrator to run the affairs of an Improvement Trust as and when such Trust is superseded, suspended or reconstituted. It 5 C.W.P. No. 19446 of 2002 has also been denied that the award by the Collector was passed after two years. It has been asserted that the time period of two years starts from the date of publication of notification under Section 42 of the Act in the official gazette. Thus, it has been justified that the award has been passed within the stipulated period of two years i.e. on 20.11.2002 as the notification under Section 42 of the Act was published on 22.11.2000 although it was sanctioned on 17.11.2000. It has been further asserted that the acquisition proceedings have been validly and legally carried out and the same are sustainable in the eyes of law. With regard to taking over possession of the land in dispute it has been asserted that the same could not be taken because the stay order passed by this Court in favour of the petitioners has remained in operation. It is further pertinent to notice that in para 3 of the petition a reference has been made to the execution of gift deed, dated 18.11.2001, transfer deed dated 12.4.2002 and gift deed dated 3.5.2002. In the written statement the stand taken by the respondents is that after issuance of notification dated 22.11.2000 under Section 42 of the Act, these transfer proceedings by way of gift deed or execution of transfer deed stand vitiated. In para 18 of the written statement further stand has been taken that no notice could have been issued to petitioner Nos. 5 to 9 because they are transferee after the notification under Section 42 of the Act was issued and, therefore, their names would not appear in the revenue record. It has also been submitted that compensation to the tune of Rs. 6 C.W.P. No. 19446 of 2002 3,59,00,000/- was duly deposited by the Trust with the Collector in the Punjab National Bank, Ludhiana. 13. It is pertinent to notice that on 20.4.2004, the learned State counsel on instructions made a statement before the Division Bench and adopted the written statement filed on behalf of the Trust- respondent Nos. 2 to 4. However, the Division Bench, vide order dated 24.5.2004, directed the respondent State to file a separate written statement. A short affidavit of Shri G.R. Bansal, IAS, Additional Secretary to Government of Punjab, dated 29.7.2004, was filed on behalf of respondent No. 1 stating that all the paras of the writ petition have been replied by respondent No. 2. Then, on 31.8.2004, a short written statement on behalf of respondent No. 1 was filed admitting factual position mentioned in the writ petition. However, it has been pointed out that appointment of Administrator was necessitated to run the day-to-day affairs of the Trust. It has been denied that the Trust stands dissolved permanently because the State Government has appointed an Administrator to run the Trust. 14. Controverting the averments made in the written statement filed on behalf of respondent Nos. 2 to 4 and reiterating the averments of the writ petition, the petitioners filed their replication. It has been specifically denied that the Trust was superseded/suspended vide notification dated 4.4.2002 (P-5). In order to fortify their claim, the petitioners also placed on record a copy of the written statement filed by the Additional Secretary, Local Government, Punjab, in CWP No. 6252 of 2002 (P-10), wherein the 7 C.W.P. No. 19446 of 2002 Government of Punjab has taken the stand that the Trust stood dissolved and not superseded/suspended. The petitioners also placed on record the reference application filed under Section 18 of the 1894 Act claiming that the same was filed without prejudice to their rights in the instant petition (P-11). 15. Mr. M.L. Sarin, learned senior counsel for the petitioners has argued that execution of any scheme framed under Section 28 of the Act cannot commence once the Trust stands dissolved in pursuance to the provisions of Section 103 of the Act. He has placed reliance on Section 103 of the Act, which deals with ultimate dissolution of Trust and transfer of its assets/liabilities to the Municipal Committee. According to the learned counsel in case of dissolution, the Trust cease to exist as compared to suspension of Trust under Section 72-F of the Act. He has emphasised that, in fact, the dissolution takes place when all Schemes sanctioned under Section 42 of the Act have either been executed or executed to such an extent that continued existence of the Trust has not been considered necessary in the opinion of the Government. He has also referred to sub-clause (c) of sub-section (2) of Section 103 of the Act by submitting that it is only in a case where a sanctioned scheme is in the midst of execution that it could be continued but no new scheme could be executed if it has not yet commenced. Learned counsel has placed reliance on the expression used in clause (c) of sub-section (2) of Section 103 of the Act ‘completing the execution of any scheme sanctioned under this Act’ to argue that it is only those schemes 8 C.W.P. No. 19446 of 2002 which have not been completely executed which could be continued to be handled by the Administrator after the dissolution and that no new scheme could be taken up by him as there is complete bar. 16. He has also placed reliance on Section 42 of the Act and has argued that after the scheme has been sanctioned, the execution would not commence till the award is announced and possession of the land is handed over to the Trust. Learned counsel has also pointed out that the respondents cannot take a shifting stand by arguing in this case that the Trust, in fact, has been suspended under Section 72-F of the Act and not dissolved under Section 103 of the Act because when such a stand was taken in C.W.P. No. 6252 of 2002 by the erstwhile Chairman/Members of the Trust then the State has placed reliance on Section 103 of the Act by asserting that the Trust, in fact, was dissolved. Referring to the facts of the present case, learned counsel has argued that sanction to the scheme was accorded on 22.11.2000 (P-4) and the Trust was dissolved on 4.4.2002 (P-5). Notice for possession was issued on 2.8.2002 and award was announced on 10.11.2002. On the basis of the aforementioned facts, he has submitted that on the date of dissolution, possession was still with the petitioners because no award was announced nor possession was taken. After issuance of notice for taking possession on 2.8.2002, the petitioners have approached this Court and the dispossession of the petitioners was stayed on 9.12.2002. Learned counsel has also argued that the petitioners have not been given any 9 C.W.P. No. 19446 of 2002 opportunity of hearing by issuing notice under Section 9 to petitioner Nos. 5 to 9. Therefore, announcement of award is vitiated. 17. Mr. Sarin has further submitted that Section 5A of the 1894 Act confer an important right on the land owner. An equivalent provisions has been made under Section 38 of the Act, which postulate service of notice on a land owner inviting objections to the scheme and the acquisition. Learned counsel has argued that no notice was issued to petitioner Nos. 5 to 9 and, therefore, the acquisition proceedings are liable to be quashed because it is a mandatory provision, as has been laid down by this Court in the case of Gurdev Singh v. State of Punjab, 1979 PLR 85 and a Full Bench judgment in the case of Prof. Jodh Singh v. Jullundur Improvement Trust, 1984 PLJ 413. He has also submitted that objection taken by the respondents that the petitioners have lost locus standi to transfer the land after declaration made under Section 42 of the Act, is not conceivable. 18. Ms. Charu Tuli and Mr. A.R. Takkar, learned counsel for the respondents have argued that the development scheme framed by the Trust has to be regarded as part of the execution once the proceedings have been undertaken for its sanction under Section 42 of the Act. According to the learned counsel, Section 42 of the Act contemplates a distinct stage whereafter the Trust is under an obligation to forthwith execute the scheme irrespective of passing of award and taking of possession of the land. It has been stated on the basis of the record that the Trust has deposited a sum of Rs. 10 C.W.P. No. 19446 of 2002 3,59,51,952/- in the Punjab National Bank on 20.11.2002. As per the assessment made by the Collector, the aforementioned amount was deposited by the Trust from its own funds. It has been emphasised that the Administrator is competent to continue with the execution of the scheme and the State Government has regarded the existence of the Trust unnecessary to complete the execution of the disputed scheme. Both the counsel have placed reliance on Section 103(2)(c) of the Act and argued that the Administrator is fully within its power to continue with the execution of the scheme after the Trust has been dissolved. 19. The factual position which emerges from the pleadings is that a development scheme was framed and notifications dated 10.12.1999, 17.12.1999 and 24.12.1999 were issued, under Section 36 of the Act. Thereafter objections under Section 38 were filed which were heard. Then sanction to the Scheme was accorded under Section 41 of the Act on 17.11.2000 and a notification was published in the official gazette on 22.11.2000. The trusts in the State of Punjab were dissolved on 4.2.2002 (P-5) by invoking Section 103 (1) of the Act. However, the acquisition proceedings continued and on 6.5.2002 notices under Section 9 of the Act were issued to petitioner Nos. 1 to 4. A draft award was prepared on 18.11.2002 and the same was approved and announced on 20.11.2002. According to Section 11A of the 1894 Act, the award is required to be announced within a period of two years from the date of publication of the declaration and if no award is made within that period then the entire proceedings for 11 C.W.P. No. 19446 of 2002 acquisition of the land would lapse. Section 59(b) of the Act contemplates modification of the 1894 Act as per the Schedule attached to the Town Improvement Act. According to the provisions of clause 2 a notification issued under Section 4 of the 1894 Act is considered equivalent to Section 36 of the Act and a declaration made under Section 6 of the 1894 Act is considered equivalent to Section 42 of the Act. Accordingly, it has to be held that declaration under Section 42 of the Act, which is equivalent to Section 6 of the 1894 Act, was made on 22.11.2000 and the award has been announced on 20.11.2002, which is within two years. Likewise, the development scheme was notified under Section 36 of the Act, which is equivalent to Section 4 of the 1894 Act, on 24.12.1999 and declaration under Section 42 of the Act was made within a period of one year on 22.11.2000, after decision on the objections. Therefore, in so far as acquisition proceedings are concerned, no fault can be found. In respect of hearing of objections, the petitioners have stated in paras 5 and 6 of the petition that petitioner Nos. 1 to 3 had filed objections and they were heard on 27.5.2000 when they were assured that their land would be released from acquisition. The mandate of Section 38 of the Act, which is like Section 5A of the 1894 Act, stand complied with. A Full Bench of this Court in Prof. Jodh Singh’s case (supra) has laid down that when notification under Section 42 is issued then all irregularities from the framing of Scheme to its sanctioning stand condoned. Therefore, we do not find any such irregularity warranting quashing of Scheme. 12 C.W.P. No. 19446 of 2002 20. However, a significant question raised by Mr. Sarin concerning the effect of dissolution of Trust under Section 103 of the Act remains to be considered. The controversy can be conveniently answered by framing the following two questions:- 1. Whether the acquisition proceedings could be continued after dissolution of the Ludhiana Improvement Trust under Section 103 of the Act? 2. Whether the acquisition proceedings are vitiated on account of non-issuance of notices to petitioner Nos. 5 to 9? Re: Question 1: 21. In order to answer the first question, it would be necessary to read Section 103 of the Act, which is as under:- “103. Ultimate dissolution of trust, and transfer of its assets and liabilities to the committee. - (1) When all schemes sanctioned under this Act have been executed or have been so far executed as to render the continued existence of the trust, in the opinion of the State Government, unnecessary, or when in the opinion of the State Government it is expedient that the Trust shall cease to exist, the State Government may by notification declare that the trust shall be dissolved from such date as may be specified in this behalf in such notification; and the trust shall be deemed to be dissolved accordingly. 13 C.W.P. No. 19446 of 2002 (2) From the date specified in the notification referred to in sub-section (1), - (a) all properties, funds and dues vested in or realisable by the trust and the chairman respectively shall vest in and be realisable by the State Government till they stand transferred to the municipal committee under sub-section (3); (b) all liabilities which are enforceable against the trust shall be enforceable only against the State Government to the extent of the properties, funds and dues vested in and realised by the State Government; and (c) for the purpose of completing the execution of any scheme sanctioned under this Act which has not been fully executed by the trust and of realising properties, funds and dues referred to in clause (a), the functions of the trust and the chairman under this Act shall be discharged by such class I officer of the State Government as may be appointed by it in this behalf. (3) After all functions referred to in clause (c) of sub-section (2) are duly discharged, - 14 C.W.P. No. 19446 of 2002 (a) the properties, funds and dues vested in or realizable by the State Government under clause (a) of sub-section (2) shall stand transferred to, vested in and be realisable by the municipal committee; and (b) all liabilities enforceable against the State Government under clause (b) of that sub- section or incurred by it under this Act, shall be enforceable against the municipal committee.” 22. According to opening words of Section 103(1) of the Act, ‘Trust’ could be dissolved in two eventualities: (a) When the existence of the ‘trust’ in the opinion of the Government is considered unnecessary because all schemes sanctioned under the Act have been executed or have been executed to an extent so as to render the continued existence of trust un- necessary. (b) When the Government forms an opinion that it is advantageous and expedient then it could dissolve the Trust. 23. The formation of opinion does not require any elaborate procedure of issuance of notice, reply and hearing to the objector. Such an act has been considered to be legislative in character. That 15 C.W.P. No. 19446 of 2002 controversy we have dealt with in some details in the case of Bakshi Ram Arora (supra). 24. In the first eventuality the sanctioned schemes are required to be either executed completely or partially. The power of the State Government to dissolve the ‘Trust’ is far wider in the second eventuality. The power is in no way controlled by the first eventuality which is clearly signified by use of word ‘or’. When the notification dated 4.4.2002 is examined it becomes patent that it has been issued under Section 103(1) part second. A perusal of the notification would further clarify the aforesaid legal position and the same reads thus:- “No. 4/29/2002-4LGII/3482 – Whereas in the opinion of the State Government it is expedient that the Ludhiana Improvement Trust shall cease to exist. Now, therefore, in exercise of the power conferred by sub-section (1) of Section 103 of the Punjab Town Improvement Act, 1922 (Punjab Act 4 of 1922) and all other powers enabling him in this behalf, the Governor of Punjab is pleased to declare that the Ludhiana Improvement Trust shall stand dissolved on and with effect from the date of publication of this notification in the official gazette.” 25. It is, thus, evident that Government on formation of an opinion that it was expedient to dissolve the trust, has taken the decision to dissolve