Case: Kerala State Cashew Development Corp Vs. Shahal Hassan Mussaliar

means the acquiring of the entire title of the expropriated owner, whatever the nature and extent of that title may be. The entire bundle of rights which was vested in the original holder passes on acquisition to the acquirer, leaving nothing to the former. The concept of acquisition has an air of permanence and finality in that there is transference of the title of the original holder to the acquiring authority. In contradistinction, the concept of requisition involves merely taking of domain or control over property without acquiring rights of ownership and must by its very nature be of temporary duration. This Court summed up by pointing out that, the State cannot under the guise of requisition continue dominion over some ones property for an indefinite period of time, because that would be a fraud on the power conferred on the government. If the Government wants to take over the property for an indefinite period of time, the Government must acquire the property, but it cannot use the power of requisition which is exercisable by the Government only for a public purpose which is of a transitory character. If the public purpose for which the premises are required is of a perennial or permanent character from the very inception, no order can be passed requisitioning the premises and, in such a case, the order of requisition, if passed, would be a fraud upon the statute, for the Government would be requisitioning the premises, when really speaking they want the premises for acquisition, the object of taking the premises being not transitory but permanent in character. Where the purpose for which the premises are required is of such a character that from the very inception it can never be served by requisitioning the premises, but it can be achieved only by acquiring the property, which would the case where the purpose is of a permanent character or likely to subsist for an indefinite period of time, the Government may acquire the premises, but it certainly cannot requisition the premises and continue the requisitioning indefinitely. 16. In Grahak Sanstha Manch v. State of Maharashtra (1994 (4) SCC 192 ), a Constitution Bench of this Court approved of the decision in H.D. Voras case (supra) and held that the said decision did not require reconsideration. However, the Constitution Bench did not approve the reasoning in H.D. Voras case (supra) that the requisition order cannot be made for a permanent purpose leaving the question open and holding that the order of requisition can continue for a reasonable period of time though in H.D. Voras case (supra) it was considered to be unreasonable in the facts of the case. In Rajendra Kumar Gupta v. State of U.P. (1997 (4) SCC 511 ), the same principle has been reiterated by this Court. 17. In Union of India v. Elphinstone Spinning and Weaving Co. Ltd. (AIR 2001 SC 724 ), this Court was concerned with a challenge to the Textile Undertakings Act, under which the Government was empowered to take over the management of certain textile mills whose financial condition had deteriorated "pending natioalisation". The question was whether this power was liable to be challenged on the ground that it amounted to acquisition in reality. Repelling the challenge, it was held by this Court that power was not even liable to challenge as abridging Article 31-A (1) of the Constitution introduced by the Constitution First Amendment Act of 1951, clause (1)(b) of which provides that, notwithstanding anything contained in Article 13, no law providing for the taking over of the management of any property by the State for a limited period either in the public interest or in order to secure the proper management of the property shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14 and Article 19. This Court was of the view that parliament had in enacting the Textile Industries Act, 1983 clearly indicated that the taking over was for a temporary period "pending nationalization of Textile Mills". Merely because nationalization would take long time, it cannot be urged that the power was to be exercised for indefinitely long time since the exercise of the power was delimited by the happening of a contingency. Thus, the power of requisitioning is liable to be upheld, if it is to be exercised for a temporary duration, which is limited either in terms of time or by reason of a contingency. 18. In Charanjit v. Union of India (AIR 1951 SC 41 ) the difference between the temporary and transitory nature of requisition and permanent nature of acquisition was highlighted by this Court. It was inter alia held that upon acquisition the entire bundle of rights which were vested in the former original holder would pass on to the acquirer leaving nothing in the former, while requisition would keep merely possession in the person requisitioning while leaving the title of the owner in tact. In other words, if the possession of property by exercise of dominion thereupon is continued indefinitely, it would amount to colourable exercise of or fraud on the power and nothing but a back door expropriation of property. As was observed in Raghubir Singh v. Court of Wards, Ajmer (AIR 1953 SC 373 ) and Corporation of Calcutta v. Cal. Tramways Co. Ltd. (AIR 1964 SC 1279 ) that though it is open to the State to impose reasonable restrictions upon fundamental rights guaranteed under the Constitution, the nature of the restrictions should not be such that right guaranteed becomes illusory. If that happens then the restrictions should cease to be reasonable. We find there is no merit in all these appeals which are to be dismissed. We direct accordingly. It is, however, brought to our notice by learned counsel for the appellant that the State Government intends to limit the period by another ten years. This is a matter about which we express no opinion.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]10. The grievance of the factory owner was that the authority declined to extend the lease and refused to renew the lease in favour of the Corporation. A request was made to return the concerned cashew factory with all its assets. That prayer was also not complied with. There were pleas of set up of certain amounts/dues. Having failed in his attempt to persuade the authorities to return its factory and its assets, the Original Petition No.16424/1994 was filed for a direction to the authorities to hand back the possession of the concerned cashew factory with all its assets. During the pendency of the original petition, notice was served under Section 3(1) of the Act, notifying the intention to requisition the concerned cashew factory under the Act for a further period of five years on the ground that if the owner is put in possession of the cashew factory, he may not run the factory properly, in accordance with law and may either sell it or lease it out to private individuals resulting larger scale unemployment of workers and adversely affecting their part of service. A statement of objection was filed, inter alia, taking the stand that the Government has no right to extend the lease for an indefinite period. It was stated that no such fact existed which could have enabled the State Government to arrive at a decision that upon return of the factory, they would not run it or close it down or lease it out to the private individuals resulting in large scale unemployment of workers or thereby adversely affecting the conditions of workers. By another notice, the Government extended the period of requisition for a period of five years. Objection was also filed.11. Section 3 of the Amending Act validated the continued possession of the cashew factories requisitioned under Section 3(1) of the Act which had vested in the second respondent Corporation under(3) of that Section notwithstanding the expiry of the lease period and notwithstanding anything contained in any law, or any decree or order of any court, and notwithstanding anything to the contrary in the terms of the contract or agreement. The result of Amending Act was that it validated the action of the appellant and the second respondent even if contrary to the terms of the lease, even if time had expired, and even if there was a decree for eviction made by a competent court of law.It was noted that in Sonia Bhatias case (supra) this Court upheld the validity of the U.P. Imposition of Ceiling on Land Holdings Act, 1961 on the ground that it was a valuable piece of social legislation with the object of ensuring equitable distribution of land by taking away land from large tenure holders and distributing the amount among the landless tenants or using the same for public utility schemes which was in the larger interest of the community. The High Court noted that the question to be answered was, however, justifying the initial requisitioning of the cashew factory was, since requisition by definition must be of temporary character and it cannot be tuned into a permanent deprivation of proprietary rights so as to amount to acquisition at back door. This is precisely what this Court has described as a fraud on the power in H.D. Vohras case. It was submitted that the High Court should not have treated an action of the State Government and of the Corporation to be actually an opinion or acquisition under the colour of requisition. Learned counsel for the respondent on the other hand submitted that both the learned Single Judge and the Division Bench have analysed factual scenario in great detail keeping in view the statutory provisions. The conclusion as submitted would not warrant any interference.15. The first contention which weighed with the learned Single Judge was that any statute which empowers the State to continue to extend a requisition order for an indefinite period was nothing but an order for acquisition, it was a colourable exercise of power, which the State did not possess under the Act. The distinction between requisition and acquisition of property has been the subject matter of several decisions of the Supreme Court and the line of demarcation between the two is well defined in the celebrated judgment in H.D. Vora v. State of Maharashtra (AIR 1984 SC 866 ). In this case this Court had occasion to consider the validity of repeated continued requisitions of private premises initially acquired under the emergency powers during war years. This Court pointed out that the two concepts, one of requisition and the other of acquisition, are totally distinct and independent. Acquisition means the acquiring of the entire title of the expropriated owner, whatever the nature and extent of that title may be. The entire bundle of rights which was vested in the original holder passes on acquisition to the acquirer, leaving nothing to the former. The concept of acquisition has an air of permanence and finality in that there is transference of the title of the original holder to the acquiring authority. In contradistinction, the concept of requisition involves merely taking of domain or control over property without acquiring rights of ownership and must by its very nature be of temporary duration. This Court summed up by pointing out that, the State cannot under the guise of requisition continue dominion over some ones property for an indefinite period of time, because that would be a fraud on the power conferred on the government. If the Government wants to take over the property for an indefinite period of time, the Government must acquire the property, but it cannot use the power of requisition which is exercisable by the Government only for a public purpose which is of a transitory character. If the public purpose for which the premises are required is of a perennial or permanent character from the very inception, no order can be passed requisitioning the premises and, in such a case, the order of requisition, if passed, would be a fraud upon the statute, for the Government would be requisitioning the premises, when really speaking they want the premises for acquisition, the object of taking the premises being not transitory but permanent in character. Where the purpose for which the premises are required is of such a character that from the very inception it can never be served by requisitioning the premises, but it can be achieved only by acquiring the property, which would the case where the purpose is of a permanent character or likely to subsist for an indefinite period of time, the Government may acquire the premises, but it certainly cannot requisition the premises and continue the requisitioningfind there is no merit in all these appeals which are to be dismissed. We direct accordingly. It is, however, brought to our notice by learned counsel for the appellant that the State Government intends to limit the period by another ten years. This is a matter about which we express no opinion. The appeals fail and are dismissed with no orders as to costs.