Case: H.M.T. Ltd. rep. by its Deputy General Manager and Anr Vs. Mudappa and Ors

Court as to expansion of industrial area or development of industry. It was also not expected of the judgment-debtors to contend before the Executing Court that the land was required for expansion of the industry. The reason weighed with the learned Single Judge, therefore, in our opinion, could not be made basis for quashing the notification. The learned Single Judge also observed that issuance of simultaneous notifications under Section 1(3), Section 3(1) and Section 28(1) was illegal. In this connection, the learned Single Judge noted- "10. It is seen from the impugned notification that they have been issued by the first respondent and not by the second respondent. It is not the case of the first respondent that any representation of the 5th respondent to acquire any land to expand their factory was pending consideration before the decree was made by the Court. On the other hand, it is contended by the second respondent that the land in question has been sought to be acquired for expansion of the fifth respondent factory. It is not the case of the second respondent that they recommended to the Government to acquire this land for the expansion of the fifth respondent as no material was produced for perusal regarding the declaration of industrial area to expand the industry. It is further material to see that the first respondent in exercise of its power under sub-section (3) of the Act issued a composite notification declaring the industrial area and the application of Chapter VII to such area. It is further material to see that such notifications have been issued only in respect of the lands in question and no other lands have been included. The notification issued under Section 3(1) of the Act has been published in page No.253 of the Karnataka Gazette dated December 11, 1997 without mentioning the lands in respect of which such notification was issued. The notification issued under Section 1(3) of the Act has been published in page No.254 of the same Gazette and the lands in respect of which the said notification was issued has been published in page 255. In page No. 256 also the same schedule is published the purpose of which is not known.11. Section 3(1) of the Act requires that the State Government shall declare any area as an industrial area by a notification and a notification under sub-section (3) of Section 1 of the Act is required to be issued to extend the provisions of Chapter VII in respect of the area declared as an industrial area under Sub-section (1) of Section 3 of the Act by the notification. It is, therefore, clear that there shall be two different and independent notifications issued under two different provisions of the Act. The composite notification issued as per Annexure-D under sub-section (1) of Section 3 without mentioning the particulars of the land, and sub-section (3) of Section 1 of the Act is impermissible in law, consequently the notification issued under Section 28(1) of the Act is illegal, void and invalid". 11. The learned Single Judge was conscious of the fact that notification under Section 28(1) was merely a preliminary notification and in the nature of proposal. He, however, negatived preliminary objection raised by the authorities and observed; "12. It was contended by the respondent that the petition is premature and hence liable to be dismissed as the notification issued under Section 28(1) of the Act is only a proposal, which may or may not be perused after considering the objections is filed by the petitioners. In the normal course the objection of the respondents would have been tenable. But, in the facts and circumstances of this case, where respondents 4 and 5 have hell bent upon retaining the land which they have illegally occupied and the first respondent acceded to their request to acquire the same without considering the past history, within a span of one month from the date of disposal of CRP by this Court, their contentions untenable as the procedure under Section 28(2) & (3) of the Act would be an empty formality. The respondents did not produce any material to show that the land in question is covered by the provisions of Official Secrets Act. Mere prohibition of entry to the general public is not sufficient to hold that the land in question is declared as a prohibited area under the provisions of Official Secrets Act. The conduct of the respondents particularly of respondents 4 and 5 for whose benefit the land is sought to be acquired, clearly demonstrates their mala fide intention to defeat the decree of a court of competent jurisdiction". 12. According to the learned Judge, therefore, giving of opportunity of being heard was merely an empty formality and since it was mala fide exercise of power by the State to deprive the owners of the fruits of the decree obtained by them, they were entitled to relief of quashing of notification at that stage without further delay. 13. In our judgment, the learned Single Judge was wholly in error in taking such view and quashing the notification. Upholding of such view would make statutory provisions under the Act or similar provisions in other laws, (for example, the Land Acquisition Act, 1894) nugatory and otiose. We are also of the view that the learned Single Judge was not right in finding fault with the State Authorities in issuing notifications under Section 1(3), Section 3(1) and Section 28(1) simultaneously. There is no bar in issuing such notifications as has been done and no provision has been shown to us by the learned counsel for the contesting respondents which prevented the State from doing so. Even that ground, therefore, cannot help the land-owners. 14. The order passed by the learned Single Judge could not have been upheld by the Division Bench. Unfortunately however, the Division Bench confirmed the order of the Single Judge without considering all aspects of the matter. The said order also, therefore, deserves to be set aside.

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

Explanation:
1[ds]7. In our considered view, however, this approach is neither legal nor permissible. Passing of a decree by a competent court is one thing and exercise of statutory power by the authority is altogether a different thing. It is possible in a given case to come to a conclusion on the basis of evidence produced and materials placed on record to conclude that the action has been taken mala fide or for a collateral purpose or in colourable exercise of power. But, in our opinion, issuance of preliminary notification after a decree by a court of law would not ipso facto make it vulnerable and exercise of power mala fide. To us, therefore, the authorities were right in raising a preliminary objection that the petition was premature as by issuance of notification under(1) of Section 28 of theAct, an intention was declared by the State to acquire the land for public purpose i.e. for developing industry. To appreciate the contention of the appellants, we may reproduce the section which readsreading of the above provision makes it abundantly clear that if in the opinion of the State Government any land is required for purpose of development by the Board, a notification of its intention to acquire the land can be issued for acquisition of such land. The notification was accordingly issued on November 13, 1997.(2) of Section 28 then requires the State Government to serve notice upon the owner or occupier of the land and all such persons known or believed to be interested therein to show cause why the land should not be acquired.(3) casts an obligation on the State Government to consider the objections of the owner, occupier or other person interested in land and to pass such order as it deems fit after affording an opportunity of being heard. If it is satisfied that any land should be acquired, a declaration can be made under(4) which shall be notified in Official Gazette.8. The scheme of Section 28 is thus similar to the scheme of acquisition of land under the Land Acquisition Act, 1894 under which such preliminary notification is issued, opportunity of being heard is afforded to the persons interested in the land and only thereafter final notification can be issued. At the stage of raising objections against acquisition, it is open to the respondents herein to raise all contentions. In spite of such objections, if final notification is issued by the State, it is open to them to take appropriate proceedings or to invoke jurisdiction of the High Court under Article 226 of the Constitution.9. Unfortunately, however, the High Court entertained the petition and quashed the preliminary notification overrulingobjection as to maintainability of petition raised by the State and the appellants herein. The High Court was also not right in coming to the conclusion thatsince a decree was passed by a competenton under the Actcould have been issued by theThe power exercised by the State was statutory in nature and irrespective of a decree in favour of the owners, such notification could be issued. A situation similar to one before us had arisen in State of Andhra Pradesh & Ors. v. Govardhanlal Pitti, (2003) 4 SCC 739. In Govardhanlal, a school building belonging to G was in the possession of the State as a tenant. An order of eviction was passed and the State was directed to hand over possession of property to G within a particular period. The State then took out proceedings under the Land Acquisition Act, 1894 for acquiring the property for public purpose, namely, for a school. G challenged the proceedings as mala fide. The High Court upheld the contention observing that there was malice in law inasmuch as the proceedings were initiated to scuttle a valid decree passed by a competent court. The State approached this Court. Allowing the appeal and setting aside the order of the High Court, this Court held that the school was there since 1954 and was catering to the educational needs of children residing in the heart of the city. It could not, therefore, be contended that there was no genuine public purpose. Exercise of power under the Act in the facts and circumstances, therefore, could not be held malawas observed that where malice was attributed to the State, it could not be a case of malice in fact, or personalor spite on the part of the State. It could only be malice in law, i.e. legal mala fide. The State, if it wishes to acquire land, could exercise its power bona fide for statutory purpose and for none other. It was observed that it was only because of the decree passed in favour of the owner that the proceedings for acquisition were necessary and hence, notification was issued. Such an action could not be held mala fide. In the instant case also, the record reveals that in 1978 itself, the possession of the entire land of Survey No. 113/3 had been taken over by the appellants albeit part of it illegally (to the extent of 39 gunthas). It was only because of the decree passed in favour of the owners of the land that the appellants realized that an appropriate action in consonance with law was to acquire the land and hence, a request was made to the State to take anunder the Act anda notification was issued. Such act cannot be said to be illegal, particularly when the notification was preliminary in nature and opportunity under the Act was to be afforded to the owners of being heard. The High Court, in our considered opinion, was wrong and had committed an error of law in entertaining the petition and in allowing it at the stage of issuance of notification under(1) of Sectionis on record that notifications under(3) of Section 1 and) of Section3 were issued by the State. The learned Single Judge, however, observed that it is only after the Executing Court directed theto deliver possession of the property that the latter persuaded the State to issue such notifications. He also found fault with the State Authorities in not producing material for the perusal of the Court for the alleged expansion of the industry. The learned Judge noted that it was not the case of thein execution proceedings that the land was needed for development of industry and, therefore, a decision was taken to acquire the land. According to the learned Single Judge, the land was situated in one corner of the area and was lying vacant. In our opinion, the approach of the learned Single Judge could not be said to be legal or in consonance with law. The State authorities were not required to produce material for perusal of the Court as to expansion of industrial area or development of industry. It was also not expected of theto contend before the Executing Court that the land was required for expansion of the industry. The reason weighed with the learned Single Judge, therefore, in our opinion, could not be made basis for quashing the notification.The order passed by the learned Single Judge could not have been upheld by the Division Bench. Unfortunately however, the Division Bench confirmed the order of the Single Judge without considering all aspects of the matter. The said order also, therefore, deserves to be set aside.15. For the foregoing reasons, the appeals deserve to be allowed and are, accordingly, allowed. The order passed by the learned Single Judge and confirmed by the Division Bench is set aside. The authorities are at liberty to take appropriate proceedings in accordance with law on the basis of notification under) of Section28 of theAct. It goes without saying that all proceedings will have to be undertaken in accordance with Section28 of theAct and it is open to the owners to raise all contentions that under the notification of 1978, the acquisition was to the extent of 1 acre, 38 gunthas of land but the appellants took over possession of additional 39 gunthas of land; that in spite of request and prayer, possession of 39 gunthas of land was never restored to them; that they were required to file suit for possession; that a decree was passed in their favour which was confirmed by the appellate court which had become final; that even thereafter, execution proceedings were taken out wherein direction was issued to the appellants to hand over possession of the land to them, and at that stage, the notification under Section 28(1) was issued. As and when such objections will be taken, an appropriate order would be passed by the authorities in accordance with law. All contentions of the parties are kept open.