C.W.P.No.8024 of 2010 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P.No.8024 of 2010 (O&M) Date of Decision:- 22.09.2010 Shashi Vardhan ....Petitioner(s) vs. State of Punjab and others ....Respondent(s) *** CORAM:- HON'BLE MR.JUSTICE JASBIR SINGH HON'BLE MR.JUSTICE AUGUSTINE GEORGE MASIH *** Present:- Mr.Rajeev Anand, Advocate, for the petitioner. Mr.Manohar Lall, Addl. A.G., Punjab, for respondent No.1. Mr.D.V.Sharma, Sr.Advocate with Mr.Ashish Grover, Advocate, for respondent No.2. Mr.Ashok Aggarwal, Sr. Advocate with Mr.Mukul Aggarwal, Advocate, for respondent No.3. *** Augustine George Masih, J. A demand survey for 'customised housing' was conducted by the Punjab Urban Development Authority (hereinafter referred to as PUDA) by publishing an advertisement in the News Paper (The Tribune) dated 23.12.2002 which contained the Scheme also. As per the scheme, in case sufficient demand warranting the setting up of the urban estate in any station mentioned therein existed, the land would be acquired for the said purpose. The scheme was opened on 26.12.2002 and closed on 20.1.2003, and in para 6 thereof, it was stated that in case sufficient demand does not warrant the setting up of urban estate in any of the stations mentioned in that advertisement, the earnest money will be refunded, in full, within six C.W.P.No.8024 of 2010 -2- months from the closing date of their demand survey and no interest will be paid on the amount deposited. The demand survey was conducted including the area of Khanna under Ludhiana Zone and the tentative rate quoted was Rs.1500/- per sq. yard for Khanna (Annexure P-10). In response to the said scheme, 1294 applications were received for houses and plots and a total amount of Rs.41,23,500/- was collected from the applicants. In pursuance of the above, notification dated 9.3.2005 (Annexure P-1) under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as 'the LA Act') was issued by the State of Punjab with an intention to acquire the land as the same was likely to be acquired by the Government at public expenses, for a public purpose, namely, for setting up of new urban estate at VPO Bullepur, G.T.Road, Khanna. Objections were invited from the land owners within 30 days. In compliance with the provisions of law, the Collector gave the objectors proper opportunity of hearing and on enquiry, submitted the recommendations for the decision of the Appropriate Government. After the decision on the objections, declaration under Section 6 dated 20.1.2006 (Annexure P-2) of the LA Act was issued by the respondent-State. But thereafter, notification dated 22.6.2007 (Annexure P-3) was issued under Section 48(1) of the LA Act rescinding the land acquisition proceedings initiated for establishment of new urban estate at Khanna. It is this notification which is under challenge in the present writ petition. The petitioner has filed this writ petition in public interest stating (PIL) therein that the impugned notification dated 22.6.2007 (Annexure P-3) has been issued with a mala-fide purpose and against the C.W.P.No.8024 of 2010 -3- interest of the public only to benefit a private colonizer, namely, All India Projects Limited Ambuja Housing and Urban Infrastructure Limited- respondent No.3 (hereinafter referred to as 'the company'). This, he states on the ground that after the issuance of notification under Section 4 of the LA Act, the company started purchasing property in the area including the land which was the subject-matter of the notification. From 9.3.2005 onwards, the company purchased almost entire land covered under the notification from individual land owners. The company also filed objections under Section 5-A of the LA Act which were duly considered by the Appropriate Authority and rejected but still thereafter representation was preferred for excluding the land from the acquisition and the present notification under challenge has been issued to legalize the land bought by the company after the issuance of notification under Section 4 of the LA Act. The public authority is required to act in good faith and upon lawful and relevant grounds for public interest. The assessment with regard to the requirement of housing needs of the public was duly obtained by way of survey conducted by PUDA. The step of rescinding the acquisition was taken to benefit and serve the interest of the private colonizer. The exercise of power under Section 48 of the LA Act has to be guided by the genuine public consideration and the exercise of the same should be restricted only to situations contemplated at the time of issuing notification. Once notification under the LA Act is issued, irreversible consequences follow and if thereafter the land is not used for the notified purpose, exercise of power of acquisition cannot be held to be bona fide. The act of the Government in rescinding the acquisition has resulted in disadvantage to the common man, especially the applicants who had responded to the C.W.P.No.8024 of 2010 -4- advertisement under the scheme for 'customized housing' and proved to be of immense advantage to the private colonizer whose intention is not to give any benefit to the public at large but to earn its own profit. As a matter of fact, the original land owners may have been forced to part with the land during the acquisition proceedings. Thus, the original land owners also have been duped of their statutory and legal right to receive appropriate compensation for the land sought to be acquired. The decision of the Government dated 22.6.2007 being not bona fide, cannot be sustained and, therefore, deserves to be quashed. Respondents have challenged the locus standi of the petitioner, who is claiming to have filed their writ by way of public interest litigation, as he has a vested interest as he had taken a certificate of registration as Estate Agent under the name and style of M/s Shashi Vardhan and Company from Chief Administrator, Greater Ludhiana Area Development Authority- respondent No.2 (for short GLADA). The petitioner has neither any public interest nor the writ discloses any such class of persons who are/ is unable to approach this Court for claiming relief as has been claimed in the present writ petition. It is clearly his professional and monetary interest in filing the present writ petition. An objection on the ground of delay and laches has also been taken as the writ petition challenging the notification dated 22.6.2007 has been filed on 3.5.2010 after a delay of about 3 years. Justifying the notification dated 22.6.2007 (Annexure P-3) issued under Section 48(1) of the LA Act, the State has submitted that a decision dated 30.11.2006 was taken by the State Government that agricultural land of the farmers would be taken only on market rate. In compliance to the said decision, an in-depth consideration of the matter was C.W.P.No.8024 of 2010 -5- done and a new land acquisition policy was issued on 6.12.2006 (Annexure R-1). It was framed on persistent demand of the land owners who had always been craving that the compensation was being paid at notified rates and not on market rates. The interest of land owners was not fully protected. The object of issuing the new policy for acquisition of land was to ensure that the land is made available for public purpose and at the same time, the farmers are adequately compensated and rehabilitated. This would obviate and eliminate delay in completing acquisition process. In pursuance of the new land acquisition policy dated 6.12.2006, not only the notification for acquisition of land qua the urban estate, Khanna, was rescinded but the acquisition proceedings for the development of urban estates in other cities like Fatehgarh Sahib, Nawanshahr, Jalandhar, Gurdaspur and Amritsar has also been rescinded by the State Government after due gazette notification. The State Government is authorized under law to rescind notification under Section 48(1) of the LA Act. It is purely an administrative decision taken in its best executive wisdom and keeping in view the new land acquisition policy. The exercise of power being as per the LA Act itself, cannot be said to be illegal. In the light of this factual basis, it has been stated that the request of the company for the release of its land and to allow it to establish the project, was considered by the State Government on 21.12.2006 but the final decision was not taken and was kept pending till the formation of the new Government. The opinion of the Advocate General, Punjab, was obtained on formation of the new Government, who on 22.5.2007 opined that continuation of the acquisition proceedings would be contrary to the new land acquisition policy dated 6.12.2006 as clause (vii) of the new policy required the award to be announced within six C.W.P.No.8024 of 2010 -6- months of the issuance of declaration under Section 6 of the LA Act which period has already elapsed. Therefore, the notification dated 22.6.2007 is in accordance with law. The opinion of the Advocate General, Punjab was duly considered by the competent Authority and keeping in view the new land acquisition policy, notification dated 22.6.2007 was issued. On this basis, dismissal of the writ petition was prayed for. The company-respondent No.3 has also taken a similar stand and has further pleaded that it had entered into agreement to sell the land with the land owners before the issuance of notification under Section 4 of the LA Act pertaining to total area of 186 kanals of land. Payment of Rs.95 lacs was made to the vendors before the issuance of notification dated 9.3.2005 under Section 4 of the LA Act. After execution of the sale deeds, a total payment of more than Rs.5,72,72,384/- was made to the vendors as full and final consideration for the total land purchased by the company. The petitioner has been issued a licence to develop the colony keeping in view the current economic policy of PUDA wherein a major step has been taken to promote private participation in urban development. Private individuals and companies who wish to develop land into a colony are required to obtain private licences under the prevailing provisions of law and so far more than 160 colonies have been licensed by PUDA. Cooperative societies are also being encouraged to take land and build houses for themselves. The selection of private promoters is based upon the objective criteria like financial strength, capability and experience of promoters in handling large area development projects, which are the proposals evaluated by High Powered Committee constituted by the State Government assisted by professional consultants. The fact that the C.W.P.No.8024 of 2010 -7- objections preferred by the company were rejected by the Appropriate Government initially, has not been denied. However, a fresh representation was submitted which was forwarded by the Department of Industries to the Government on 19.12.2005, which matter was placed before the Empowered Committee of the Government for consideration of release of the land. The case of the company was considered as per the new land acquisition policy and in the light of the policy decision taken by the Government, the acquisition proceedings were rescinded not only in the case of Khanna alone but other urban estates as well. The mala fides as alleged with an intention to benefit the company have been denied. During the course of hearing, various orders were passed and an information was sought by this Court to satisfy itself with regard to the allegations made by the petitioner in the writ petition. The said information was supplied by the respondent-State. The original records were produced in Court at the time of hearing of the case. We have perused the same in detail and are satisfied that the notification dated 22.6.2007 (Annexure P-3) issued by the State of Punjab is not influenced by any mala fides, ulterior motives or is with an intention to give undue benefit to the company and the same is in accordance with law for the reasons given hereafter. Section 48 of the LA Act reads as follows:- “48. Completion of acquisition not compulsory, but compensation to be awarded when not completed.-(1) Except in the case provided for in section 36, the Government shall be at liberty to withdraw from the acquisition of any land of which possession has not C.W.P.No.8024 of 2010 -8- been taken. (2) Whenever the Government withdraws from any such acquisition, the Collector shall determine the amount of compensation due for the damage suffered by the owner in consequence of the notice or of any proceedings thereunder, and shall pay such amount to the person interested, together with all costs reasonably incurred by him in the prosecution of the proceedings under this Act relating to the said land. (3) The provisions of Part III of this Act shall apply, so far as may be, to the determination of the compensation payable under this section.” Sub-section (1) of Section 48 confers upon the Government liberty to withdraw from the acquisition of any land of which possession has not been taken except in case provided for in Section 36 of the Punjab Town Improvement Act, 1922. Once the possession of the land is taken, it is not open to the Government to withdraw from acquisition. It has been so held by the Hon'ble Supreme Court in the case of Rajasthan Housing Board and others vs. Shri Kishan and others, (1993) 2 SCC 84 and Mandir Shree Sita Ramji @ Shree Sita Ram Bhandar vs. Land Acquisition Collector and others, 2005 (6) SCC 745. The provisions are apparently discretionary in nature but no Government can be compelled to withdraw from the acquisition of any land regarding which acquisition proceedings are in progress or completed. However, before the land under acquisition vests in the Government, free from all encumbrances on taking over its possession as provided under C.W.P.No.8024 of 2010 -9- Section 16 or 17(1) of the LA Act, there is an option to the State Government to withdraw from acquisition either under Section 48(1) of the LA Act or by virtue of its powers under Section 21 of the General Clauses Act by cancelling notifications under Sections 4 & 6 of the LA Act. But this discretion cannot be exercised after the possession has been taken as per law. The power only vests in the State Government under Section 48 of the LA Act and not the Land Acquisition Collector or any other authority. While exercising power under Section 48 of the LA Act, it is open to the Government to withdraw from acquisition as a whole or any portion of the land in respect of which notice for acquisition has been issued. The discretion of the State Government to withdraw from acquisition of any land, possession of which has not been taken, is absolute and the same is not justiciable at the instance of the owners to whom no prejudice is caused. The only right a land owner would have is that if at all any damage is suffered by the owner, the same can be set off by taking note of sub-section (2) of Section 48 of the LA Act. Consequence of withdrawing the proceedings of acquisition of land is that the land owner continues to be the owner of the land as if there was no proceedings for acquisition under any law. This, however, does not mean that the decision to withdraw from the acquisition by invoking powers under Section 48(1) of the LA Act is beyond the judicial review of the High Court while exercising its jurisdiction under Article 226 of the Constitution. Such decision may not be justiciable as such but the discretionary powers under Section 48 of the LA Act does not permit the State to act in an arbitrary manner although the State cannot be compelled to acquire land compulsorily but its decision to C.W.P.No.8024 of 2010 -10- withdraw from acquisition can be challenged on the ground that power has been exercised with mala fide or in an arbitrary manner. The Hon'ble Supreme Court has held so in Amarnath Ashram Trust Society vs. Governor of Uttar Pradesh, 1998 (1) SCC 591. Now applying the above broad principles to the facts of the case in hand, what emerges is that neither the possession of the land was taken by the State Government nor any award passed by the Land Acquisition Collector. Thus, land did not vest in the Government. The Government cannot be compelled to acquire land compulsorily and it could exercise its discretion under Section 48 of the LA Act. While exercising our power of judicial review, which is quite restricted, we proceed to test the exercise of discretion by the Government under Section 48 of the LA Act while issuing notification dated 22.06.2007 (Annexure P-3). It is apparent from the records produced in Court that because of the protests of the disgruntled and dissatisfied land owners whose lands were acquired under the LA Act, who were not being paid the market value as per the prevalent procedure but the Collector notified rate of the land. The Government was tentatively satisfied that the land owners were not being provided adequate compensation for compulsory acquisition of their lands. The matter was taken up for thorough consideration by the Government and in this process vide letter dated 13.3.2000 (Annexure R3/7), the State of Punjab sought opinion and recommendations from all the Heads of Departments, Commissioners of Divisions, Deputy Commissioners and Sub Divisional Magistrates regarding the existing procedure for compulsory acquisition as well as the need to streamline it, to ensure that the land owners not only get full market value at the first C.W.P.No.8024 of 2010 -11- instance itself but they be not forced to waste time and money in going to Courts to get their dues through long litigation. Accordingly, based on the recommendations and the feedback, a policy decision was taken on 30.11.2006 and the same was notified on 6.12.2006 vide Annexure R/1. The said policy was intended to adequately compensate the land owners with an intention to strike a balance of equities and as the land owners were at times deprived of their livelihood in some cases and, therefore, they were required to be rehabilitated. As per the said policy, the land should be acquired normally through negotiations and compulsory acquisition if resorted to, may be done only after paying adequate compensation at market value and providing rehabilitation to the land owners where required. The effort was to curtail the practice of initiation of land acquisition proceedings by administrative departments indiscreetly. It was decided that all proposals for acquisition of land before issuance of notification under Section 4 may first be referred to the State Level Land Acquisition Board, who on consideration, may issue No Objection Certificate within one month of receipt of the proposal if the acquisition is found to be for public purpose. It was decided that after the issuance of the notifications under Section 4 of the LA Act, Section 6 declaration shall be issued within six months and the award shall be announced within next six months of the issuance of declaration under Section 6 of the LA Act. If the said time schedule is not adhered to, the acquisition proceedings will lapse and will have to start de novo, if required. A District Level Committee was also constituted which would take into account the actual market rate prevailing in the area and then make its recommendations for awarding compensation. An additional “no litigation C.W.P.No.8024 of 2010 -12- premium” would be provided on the determined market value of the land in case of compulsory acquisition at the rate of 10% of the awarded value. The land owners and other affected families whose land is being acquired, thereby leaving them deprived of their livelihood. shall be rehabilitated in accordance with the provisions of “National Policy of Re-settlement and Rehabilitation for Project Affected Farmers, 2003.” Standing Order No.28 of the Financial Commissioner (Revenue) was amended accordingly which provided for the procedure for acquisition of the land. After the acceptance of the new policy for acquisition of land and to benefit the land owners, the State Government took a further policy decision to rescind all pending acquisitions in the light of the new policy, the basic object of which was to ensure that the land is made available for public purpose and at the same time, the farmers are adequately compensated and rehabilitated besides eliminating the delay in completing the acquisition process. In order to implement the new land acquisition policy, the State Government took a decision for rescinding the acquisition proceedings by issuing notification under Section 48(1) of the LA Act. Opinion of the Advocate General, Punjab was obtained regarding establishment of urban estate, Khanna, who vide his opinion dated 22.5.2007 stated that the continuation of the acquisition proceedings would be contrary to the new land acquisition policy of 2006 (Annexure R-1) wherein as per clause (vii), the award has to be announced within six months of the issuance of the declaration under Section 6 of the LA Act in regard to acquisition proceedings. Notification under Section 6 of the LA Act was issued on C.W.P.No.8024 of 2010 -13- 20.1.2006 and the period for announcing the award which was six months, after the issuance of the declaration under Section 6 of the LA Act, had already elapsed and, therefore, the continuation of the acquisition proceedings would be contrary to the policy decision of the Government and, thus, will have to be started de novo, if required. This opinion was duly considered by the State Government and accepted, resulting in the issuance of notification dated 22.6.2007 (Annexure P-3). That apart, the decision of the Government to rescind the land acquisition proceedings initiated for development of new urban estate of Khanna vide notification dated 9.3.2005 issued under Section 4 and notification dated 20.1.2006 issued under Section 6 of the LA Act was not restricted to this place alone but notifications for acquisition of land for development of new urban estates in other cities i.e. Fatehgarh Sahib, Nawanshahr, Jalandhar, Gurdaspur and Amritsar were also rescinded by the State Government after due Gazette notification. In the light of above, it cannot, be said that the decision of the Government was in any manner not bona fide or was influenced with mala fides or was with an intention to benefit the company in any manner. Furthermore, none of the land owners has approached this Court with any grievance with regard to the fact that they have been in any manner duped or put at a disadvantageous position because of issuance of notifications under Sections 4 and 6 of the LA Act forcing them to sell their land to the company. The petitioner is neither an applicant under the scheme for customized housing nor his right has been prejudiced in any manner. Another aspect which cannot be lost sight of is the fact that the petitioner has approached this Court after an unexplained and unreasonable delay of C.W.P.No.8024 of 2010 -14- almost three years from the date of issuance of notification dated 22.6.2007 under Section 48(1) of the LA Act. The notification under challenge cannot be said to be not bona fide and against the public interest but is issued in pursuance of and based upon the policy decision dated 6.12.2006 (Annexure R-1) which has been implemented and followed uniformly in the State of Punjab. In view of the above, there is no merit in the present writ petition and the same stands dismissed. ( JASBIR SINGH ) ( AUGUSTINE GEORGE MASIH ) JUDGE JUDGE September 22, 2010 poonam Whether referred to Reporters? Yes/No.