IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 1568 of 1987 with SPECIAL CIVIL APPLICATION No 5149 of 1989 and SPECIAL CIVIL APPLICATION NO.5171 OF 1991 For Approval and Signature: Hon'ble MR.JUSTICE N.J.PANDYA and Hon'ble MR.JUSTICE S.D.PANDIT ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements? yes J 2. To be referred to the Reporter or not? yes 3. Whether Their Lordships wish to see the fair copy of the judgement? No 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? no 5. Whether it is to be circulated to the Civil Judge? No -------------------------------------------------------------- MANGAL PARK CO-OPERATIVE HOUSING SOCIETY Versus STATE OF GUJ -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 1568 of 1987 MS VASUBEN P SHAH for Petitioner 2. Special Civil ApplicationNo 1374 of 1986 MR SH SANJANWALA for Petitioner M/S PURNANAND & CO for Respondent No. 1 3. Special Civil Application No. 5171 of 1991 Mr. S.B.Vakil for the petitioner Mr. S.N.Shelat,Addl.AG with Kamal Mehta AGP for the respondent no.1. Mrs. K.A.Mehta for respondent no.2. Mr. S.H.Sanjanwalla for respondent no.7. Ms. K.J.Brahmbhatt for respondent no.9. -------------------------------------------------------------- CORAM : MR.JUSTICE N.J.PANDYA and MR.JUSTICE S.D.PANDIT Date of decision: February 27 ,1997. JUDGEMENT(Per:Pandit.J) SCA No. 1568/87 and SCA 5149/89, are filed under article 226 of the Constitution of India to quash and set aside the acquisition proceedings taken by the State Gujarat for the purpose of acquiring land for L & T Ltd. a public company incorporated under the provisions of the Companies Act 1956 . Said company is respondent no.4 and 3 respectively in these two petitions. But SCA No.5171/91 is filed by M/s L & T to challenge the order of withdrawing from the acquisition passed by the State of Gujarat under section 48 of the Land Acquisition Act (hereinafter referred to as the Act) in respect of the lands covered by SCA No. 1568/87 and SCA No. 5149/89, and two other lands. Thus all these 3 petitions are inter connected and the final fate of each petition is also dependent on the final fate of the controversy between the parties. Therefore, in the circumstances, it would be appropriate proper and just to decide and dispose of all these three proceedings by common judgment and therefore, we will proceed to decide them by this common judgment. 2. In SCA No. 1568/87 and SCA No.5149/89 the petitioners are challenging the acquisition proceedings taken by the State of Gujarat for acquiring the land for M/s L & T. It is the claim of the petitioner in SCA No. 1568/87 that the petitioner is a Co.op. society registered under the Gujarat Co.Op.Societies Act , the petitioner had purchased the land bearing revenue survey no. 40 admeasuring 5 acres and 19 gunthas of village Magdhalla taluka Chorasi, and it is the further contention of the petitioner that the petitioner society is formed for the public purpose for providing houses to the members belonging to middle strata of the society. Therefore, when the petitioner society is established for achieiving a public purpose acquisition of their land is not at all justified. 3. The petitioner in SCA No. 1563/87 further contends that there is no publication of the Notification u/s. 4 in the local daily. It is further contended that there were 2 Notifications u/s 4 and in the said notification the order for acquisition was shown as 1 Are and 11 sq.mtrs. and 20 Aras and 40 sq.mtrs; whereas in the notification u/s , 6 the total area is shown as 2 hectors and 1 ara and 11 sq.mtrs. Thus the notification u/s 4 and section 6 are not consistent and they are showing inconsistent area. It is the further contention of the petitioner that the acquisition in question is acquisition for a company and consequently acquisition proceedings could be put into force to acquire the land only if the company executes and agreement mentioning on section 41A of the Act. But in the instant case, no such agreement was executed u/s 41A before the issuance of notifications of sections 4 and 6. There is no compliance of Rule 4 of the Companies land acquisition Rules. Therefore, in the circumstances, acquisition is not bonafide and it is by way of fraud and colourable exercise of powers by the State Government. Hence the petitioner seeks to quash the said acquisition proceedings. 4. The claim of the petitioner in SCA No. 1568/87 is resisted by the State Government by filing counter affidavit. It is contended that the petitioner society had constructed 33 flats in the land of 500 sq. mtrs. The location of the said flats clearly indicates that the society is not meant for residential purposes. Though NA permission was granted in the year 1981 no construction is made. This clearly indicates that the the investment is for speculative purposes. There is proper publication of the Notification u/s 4 as well as u/s 6 . Thus it is contended that the acquisition is for public purpose and is valid and legal as per the provisions of the Land Acquisition Act. 5. L & T has also contested the claim of the petitioner. It is stated in the affidavit filed by the manager of the said company that survey no. 40 of village Magdhalla is bifurcated by a canal running from north to south and consequently the two notifications u/ss 4 and 6 are issued. It is further contended that the petitioner society is of members of rich persons and the members are having big houses in Surat city. Therefore, in the circumstances it could not be said that the petitioner society is established for the public purpose . It is further contended that there is proper following of Rule 4 as well as provisions of the said Act. There is also proper publication of the award in the local daily. The petition is liable to be dismissed on account of delay and laches. It is further contended that the petition be dismissed. 6. In SCA No. 5149/89 the petitioners claimed that they are owners of land bearing survey no. 41/2 of village Magdhalla. They contend that the original owners of land was one Chenabhai Limbabhai Patel and he expired on 29.3.85. Petitioner no.1 is a widow and petitioners nos 2 and 4 are his sons. They contend that no notice u/s 5A of the Act was served on any of them and they are not also heard u/s 5A . They contend that there is no proper publication of the notifications u/ss. 4 and 6. They also contend that there is no proper compliance of the provisions of Rule 4 and Section 41 for acquiring the land in question for the company i.e. L & T. They further contend that they are in possession of the land and false record has been created to show that the possession of the land has been taken and handed over to L&T. They therefore, seek for quashing of the said acquisition proceedings. 7. The claim of the petitioners is resisted by both the Government and L&T. They have denied the claim of the petitioners that there was no proper publication of the notifications u/ss 4 and 6 of the Act. They have further contended that u/s 9 noticesa were issed on 1.4.87 and award has been passed on 19.12.88. They also denied the claim of the petitioners that they are in possession of the land in question and contend that as a matter of fact the possession of the land was taken from the petitioner and the same was given to the said company on 5.7.89. It is further contended that the petitioners petition is also hit by delay and laches and the same deserves to be dismissed. 8. SCA No. 5171/91 : The petitioner L & T is challenging the action of Government of Gujarat u/s 48(1) of the Act as regards survey nos. 39,40,41 and 41/2 and 44/2 of village Magdhalla. It is contended that the action of the State Government of withdrawing of those lands from the compulsory acquisition is malafide and in colourable exercise of powers with a view to favour the persons interested in the said land. It is contended that said order of withdrawal is passed without giving opportunity of being heard to the petitioner. It is contended that withdrawal from acquisition of the said land could not take place without the consent of the petitioners and without giving any opportunity to the petitioner of being heard. It is further contended that as regards the land of survey ono.41/2 the possession of the land was taken from the family members of Chanabhai Limbabhai on 5.7.89 under a Panchnama and thereafter possession of the same was handed over to the petitioner. Therefore, in the circumstances, there could not be withdrawal from the acquisition of the said land. It is further contended that mere passing of the order of withdrawal would not suffice. and therefore said withdrawal is not withdrawal in the eye of law and consequently said order of withdrawal is nullity. Thus it is contended that the order passed by the respondent no.1 vis. Government of Gujarat in withdrawn u/s 48A of the Act from the acquisition of those lands of survey nos. 39,90,41/2 and 44/2 be quashed and set aside. 9. Respondent no.1 had contested the claim of the petitioner by contending that the decision taken by the Government is bonafide and the same is taken into consideration of the circumstances and overall situation. It is contended that by the official notification u/ss 4 and 6 of L.A. Act, 10 Hectors, 89 Aras and 87 sq.mtrs. of land was to be acquired for the petitioner by the notification issued u/s 48 but only 3 hectors 43 aras and 59 sq.mtrs. of land has been released and even after the realisation of the said land, the petitioner will have the land admeasuring 7 hectors 46 aras and 28 sq.mtrs of land. If the requirements and the needs of the petitioner are taken into consideration then it would be quite clear that the petitioner will be left more than its need. In the year 1988,1989,1990,1991 and 1992 the petitioner was having respectively 154, 217, 376,399 and 482 employees working on its project. If this position is taken into consideration then the action of the respondent no.1 could not be said to be illegal and invalid. It is further contended that the petitioner has no locus standi to file such a petition and the same should be rejected. It is also contended that the claim of the petitioner that the petitioner was given possession of the land is not correct. 10. Respondent no.3, 7,8,9 and 11 have also contested the claim of the petitioner by filing their affidavit in reply. It is contended by them that present petition is not tenable in law and that the petitioner has no locus standi to challenge the action of the State Government and no hardship is caused to the petitioner by the action of the action of the Government. They contended that at the most the petitioner can lay a claim for damages u/s 48(2) of the Act. Government under its power of eminent discretion can drop the proceedings for acquisition of the land. By such action of the Government there is no infringement of any legal or fundamental rights of the petitioner. It is further contended that the claim of the petitioner that he got possession of land of survey no. 41/2 on 5.7.89 is false. The petitioner had joined hands with the Government employees and only documents showing delivery of possession are created. Thus there is only paper possession and petitioner never got actual possession of the land in question. Thus it is contended that petitioners right to challenge the order of the Government u/s 48 and to quash the said order be dismissed with costs. SCA 1568/87 11. It is the contention of the petitioner in SCA no 1568/87 that the petitioner society is a co.op.housing society and the land in question was purchased by the petitioner society for housing purposes; that the petitioner society was going to fulfil public purpose and therefore it was not justified to deprive the petitioner of the said land by recoursing to the provisions of the said Act and handing over the same to a company. In considering the question regarding validity of acquisition the court has to consider only that question as to whether the acquisition is for the public purpose or not. There is no question as to whether the holder of the land was making the use of the land for the public purpose or not. There is no provision of any law which says that if the land owner or holder of the land is making use of the said land amounting to use for a public purpose the said land could not be subject matter of the land acquisition. 12. In the case of New Rivera Co.op.H.Society vs. Special Land Acquisition Officer 1996(1) SCC 731, the land which was the subject matter of acquisition was held by a co.operative housing society. In that case, the contention which is raised before us was also raised and it was further urged that on account of the said acquisition the members of the appellant co-operative housing society would become shelterless and it was also urged before the Apex Court that at least the Government be directed to provide for alternative site. Said contention has been negatived by the Apex Court by laying down the following principles. " Right to shelter is undoubtedly a fundamental right. A person may be rendered shelterless, but it may be to serve a large public purpose. Far from saying that he will be rendered shelterless the Supreme Court did not circumscribe the State's power of eminent domain, even though a person whose land is being acquired compulsorily for public purpose is rendered shelterless. If that contention is given credence, no land can be acquired under the Act for any public purpose since in all such cases the owner/interested person would be deprived of his property. He is deprived of it according to law. Since the owner is unwilling for the acquisition of his property for public purpose, Section 23(2) provides solatium for compulsory acquisition against him wishes. Under those circumstances, it cannot be held that the acquisition for public purpose violates Article 21 of the Constitution or the right to livelihood or right to shelter or dignity of person." In the same case, it has been also laid down that the State is not obliged to provide alternative site. In the case of Balmukand Khatri EWD and INS Trust vs. State of Punjab 1996(4) SCC 212, the appellant was an Institute had claimed exemption in the acquisition on the ground that they intend to establish public school and since the other land was available to the Government, the Government should leave the land but that claim was not accepted by the Apex Court. Therefore, in view of the above cited cases, the claim of the petitioner that as the petitioner is a housing society and as the object of the petitioner is to achieve a public purpose its land could not be acquired, is not tenable. 13. Ms. V.P.Shah L.A. for the petitioner fairly conceded before ius that in view of the material on record, she is not pressing her contention that there was no proper publication of Rules 4 and 6 and that she was giving up this contention. 14. Her further contention is that there is no proper compliance of section 41 of the L.A.Act. From the material on record, it would be quite clear that the agreement had taken place between the acquiring and i.e. the L & T and the State Government as contemplated by section 41 on 17.1.86. The notification under section 4 was issued on 23.1.86; whereas the Notification under section 6 was issued on 10.2.87. Therefore, in view of these dates which are also mentioned by the petitioner in his affidavit in reply filed in SCA No. 5171/96 in para 3, the claim of the petitioner that there is no proper compliance with the provisions of section 41 is not tenable. No doubt the agreement which has been entered into between the acquiring body and the State Government has been published in Government Gazette on 24.1.86 but publication of the said agreement is not to be considered for the purpose of section 41. Under section 41, it is necessary to have an agreement as contemplated by the said section prior to the publication of the Notification under sections 4 and 6. No doubt section 42 of the said Act makes it compulsory for publication of such an agreement in the official Gazette but said section 42 also does say that said publication in the official Gazette must be prior to issuance of Notifications under sections 4 and 6. 15. The main contention of Ms.Shah is that there is no proper compliance with the provisions of Rules 3 and 4 which are governing acquisition for the company. Said Rules 3 and 4 are running as under: "3. (1) Land Acquisition Committee. (1) For the purpose of advising the appropriate Government in relation to acquisition of land under Part VII of the Act. the appropriate Government shall by Notification in the Official Gazette, constitute a Committee to be called the Land Acquisition Committee. (2) The Committee shall consist of- (i) the Secretaries to the Government of the Department of Revenue, Agriculture and Industries or such other officers of each of the said Departments as the appropriate Government may appoint. (ii) such other members as the appropriate Government may appoint, for such terms as that Government may, by order, specify, and (iii) the Secretary to the Department or any officer nominated by him dealing with the purposes for which the company proposes to acquire the land. (3) The appropriate Government shall appoint one of the members of the Committee as its Chairman. (4) The Committee shall regulate its own procedure. (5) It shall be the duty of the committee to advise the appropriate Government on all matters relating to or arising out of acquisition of land under Part VII of the Act on which it is consulted and to tender its advice within one month from the date on which it is consulted: Provided that the appropriate Government may on a request being made in this behalf by the Committee and for sufficient reasons extend the said period to a further period not exceeding two months. 4. Appropriate Government to be satisfied with regard to certain matters before initiating acquisition proceedings:- (1) Whenever a company makes an application to the Appropriate Government for acquisition of any land that Government shall direct the Collector to submit a report to it on the following matters, namely: (i) that the company has has made its best endeavour to find out lands in the locality suitable for the purpose of acquisition; (ii) that the company has made all reasonable efforts to get such lands by negotiating with the persons interested therein on payment of reasonable price and such efforts have failed; (iii) that the land proposed to be acquired is suitable for the purpose ; (iv) that the area of the land proposed to be acquired is not excessive. (v) that the company is in a position to utilise the land expeditiously; and (vi) where the land proposed to be acquired is good agriculture land, that no alternative suitable site can be found so as to avoid acquisition of that land. (2) The Collector shall, after giving the company reasonable opportunity to make any representation in this behalf, hold an inquiry into the matters referred to in sub rule (1) and while holding such inquiry he shall- (i) in any case where the land proposed to be acquired is agricultural land consult the Senior Agricultural Officer of the direct whether or not such land is good agriculture land; (ii) determine, having regard to the provisions of Secs. 23 and 24 of the Act, the approximate amount of compensation likely to be payable in respect of the land, which, in the opinion of the Collector, should be acquired for the company; and (iii) ascertain whether the company offered a reasonable price)not being less than the compensation so determined), to the persons interested in the land proposed to be acquired. Explanation: For the purpose of this rule "good agriculture land" means any land which, considering the level of agricultural production and the crop pattern of the area in which it is situated, is of average productivity and includes a garden or grove land. (3) As soon as may be after holding the inquiry under sub-rule (2), the Collector shall submit a report to the appropriate Government and a copy of the same shall be forwarded by the Government to the Committee. (4) No declaration shall be made by the appropriate Government under sec.6 of the Act unless- (i) the appropriate Government has consulted the Committee and has considered the report submitted under this rule and the report, f any submitted under sec.5-A of the Act; and (ii) the agreement under Sec. 41 of the Act has been executed by the company." 16. Now from the material on record it is not possible to hold that there is compliance of the Rules 3 and 4. If the affidavit filed by the State Government as well as by the company is taken into consideration, then it would be clear that there is nothing to show that a Committee as contemplated by Rule 3 was in fact ccnstituted by the State Government. The Division Bench of this court in the case of Zaverchand Popatlal Sumeria & ors. vs. State of Gujarat & ors. 1995(2) GLR 1733 has held that provisio to Rules 3 and 4 are mandatory and non compliance with the said proviso makes the acquisition proceedings illegal. We do not find any reason to take a different view and in our considered opinion, the principles laid down in the said case are laying down the correct position of law. Therefore, in the circumstances, we hold that the acquisition in question is vitiated for non compliance of Rules 3 and 4. No doubt, Mr. S.B.Vakil, L.A. for L & T has contended before us that the petitioners' petition is liable to be dismissed on the ground of delay and laches. He has cited before us the cases of State of Tamil Nadu vs. L.Krishna 1990(1) SCC 250 and The Ramjas Foundation & ors. AIR 1993 SC 852 in support of his contention that on account of delay the petition is liable to be dismissed. But in the instant case, the Notification under section 4 was issued on 23.1.86. Notification u/s 6 was issued on 10.2.87 and the present petition was filed in the month of March1987. Now if all these dates are taken into consideration, it is not possible to hold that there is a case of delay on the part of the petitioner. 17. Therefore, in view of the above discussion the acquisition in question is liable to be set aside only on the ground that there is no compliance of Rules 3 and 4 governing the acquisition of the land for companies framed under the Land Acquisition Act. SCA No. 5149/89 18. As regards the petitioner's claim for challenging the acquisition in question, it is contended by the respondent that the petition is liable to be dismissed atleast on the ground of delay and laches.Mr. S.B.Vakil learned advocate. for the acquiring body L & T has cited before us the cases of State of Tamil Nadu and The Ramjas Foundation (Supra). In the case of State of Tamil Nadu (Supra), the declaration was issued in the year 1975. No objection was raised by the petitioner in an