Case: National Textile Corporation Vs. S State of Maharashtra

as creating an encumbrance over the land falling within Section 4 (2) of the Act. In our view though by reason of the two notifications a burden is cast upon the land in question in that the land is subjected to the liability of being compulsorily acquired under the provisions of the Land Acquisition Act, such burden or liability would non fall within the expression encumbrance under Subsection (2) of Section 4.( 11 ) THERE is yet another aspect of the matter which will have a bearing on the question under consideration. The sole object or the intention of making provision like sub-section (2) of Section 4 of the Act appears to be that all property of the sick textile undertaking should vest in the Central Government freed and discharged from encumbrances. In other words, whatever encumbrances that might be subsisting on the property should no longer bind the Central Government or the Textile Corporation which should be free to deal with it thereafter as it likes and if that be the real object or intention of subsection (2) of Section 4. then clearly the liability of being acquired that gets attached to the land by reason of the issuance of the notifications under the land Acquisition Act was never intended to be covered by the expression all other incumbrances occurring in sub-section (2) of Section 4. Assuming that this land got vested in the Central Government and thereafter in the National textile Corporation under Section 3 read with Section 4 (2) freed from the aforesaid burden or liability of being acquired. it was not disputed before us by mr. Dalal that it was open to the appropriate Government immediately thereafter to acquire that very land by issuing fresh notifications under Section 4 and Section 6 of the Land Acquisition Act and we do not see any hurdle in the appropriate Government acquiring the very land after the same got so vested in the National Textile Corporation under Section 3 of the Act. If, therefore, after the property had vested in the national Textile Corporation the same could be acquired by appropriate Government we fall to understand as to what purpose could be achieved by holding that the earlier notifications issued under the Land acquisition Act created an encumbrance which the National Textile Corporation got rid of under Sub-section (2) of Section 4 of the Act No. 57 of 1974. Looking at the question from his angle, we are of the view that the phrase all other incumbrances occurring in sub-section (2) of Section 4 cannot include any such burden or liability to which the land is subjected by reason of issuance of notification under Section 4 or Section 6 of the Land Acquisition Act. ( 12 ) IN this view of the matter it is clear to us that the provisions of Section 4 (2)of the Act cannot be availed of by the appellant before us for the purpose of contending that the Notifications in question in ceased to be effective qua the land in question and, therefore , the contention of Mr. Dalla must fail. ( 13 ) AS regards the other contention we do not agree that the learned Judge was in error in rejecting the applications of the original petitioner to lead oral evidence in support of its case that the purported acquisition was by way of colourable exercise of power or mala fide. Initially an application was made for permission to lead oral evidence in support of that plea on 16-7-1969 but the type of evidence that was offered at that time was the evidence that the offered at that time was the evidence of an expert which would have been in the nature of opinion evidence. The learned Judge, therefore , by his order dated 16-71969 declined to give permission to the original petitioner to lead that type of evidence. Admittedly even that type of evidence was not ready with the original petitioner and an adjournment was sought which was refused. Thereafter, the hearing of the case proceeded and at the conclusion of the hearing the petitioner desired to have a further opportunity to settle the matter with the municipal authorities and therefore the learned Judge reserved his judgment with a view to give the petitioner time to negotiate a settlement. When the matter was placed on board for judgment on 11-8-1969 another application was made seeking permission to lead oral evidence of persons who would depose to the area required by Municipal schools constructed during the relevant period between the two notifications i. e. between 1961 and 1964 in order to show that having regard to such area which was regarded as sufficient the present case was one of colourable exercise of power. The learned Judge rejected that application as in his view the hearing the case the had been concluded and he had reserved the judgment only to enable the petitioner to negotiate a settlement with the municipal authorities which it is desired to do and as such the petitioner was not entitled to make a second request for leading oral evidence. The learned Judge has also noted in his judgment that this type of case had not been even made out by the petitioner in the petition showing the area occupied by municipal schools during the relevant period i. e. between 1961 and 1964. He, therefore, rejected that request and proceeded to deliver his judgment. In the circumstances mentioned by the learned Judge we do not think that he was wrongly rejected the prayer made he has wrongly rejected the prayer made by the original petitioner to lead oral evidence in the case. In the absence of any material on record the learned Judge took the view that the petitioner had failed to establish that it was a case of colourable exercise of power and or that the purported acquisition was mala fide and we are of the view that the finding of the learned Judge in that behalf is correct.

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

Explanation:
0[ds]l for the appellant has strongly relied upon the expression shall vest absolutely in occurring in Section 3 (1) of the said Act and has further relied uponsubsection (2) of Section4 for the purpose of contending that the land has so vested in the Central Government freed from liability of being acquired under the provisions of the Land AcquisitionAct. There is no doubt that the expression "shall vest absolutely in" has been used. in(1) of Section 3. But that itself will not show that the land in question had vested in the Central Government free from liability of being acquired under the provisions of the Land Acquisition Act in other words, it is essential that the notifications in question must amount to or fall within the phrase all other encumbrances occurring insubsec (2) of Section 4and unless the notifications do fall within the purview of that expression occurring insubsec (2) of Section 4the contention of Mr. Dalal cannot obviously beION (2) of Section 4 of the Act consists of two parts; the first part provides that all property of sick textile undertaking as has been referred to in section 4 (1) shall by force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all other encumbrances affecting it, the second part provides that any attachment, injunction or decree or order of any Court restricting the use of such property in any manner shall be deemed to have been withdrawn. A close analysis of the first part shows two things: first that general words viz. all other encumbrances follow specific words such as any trust obligation, mortgage, charge, lien" and secondly the specific words that precede the general words speak of types of encumbrances occurring in the first part of(2) will have to be construed ejusdem generis and as such the said phrase will include only such encumbrances that partake the nature of the types of encumbrances specified earlier. Thusthe question is whether the notification under Section 4 and Section 6 of the Land acquisition Act create such an encumbrance on the property which partakes the nature of any trust, obligation, mortgage, charge or lienIn other words, the encumbrance must be of such a nature that upon enforcement thereof the liability thereunder is satisfied that is to say the liability to meet beneficial interest under a trust or the liability arising under an obligation or a mortgage or charge or lien is satisfied and we do not think that by reason of issuance of the notifications in question any encumbrance of this nature is created on the property in question. The notifications under Section 4 and 6 of the Land acquisition Act do not create any liability which is required to be satisfied from out of the property to which the said notifications relate and therefore, in our view, the notifications cannot be regarded as creating any encumbrance falling within the phrase all other encumbrances occurring insubsection (2) ofsection 4. It is true that by reason of the notifications the land in question is subjected to the liability of being compulsorily acquired under the provisions of the Land Acquisition Act but that is not the liability contemplated by the phrase all other encumbrances occurring insubsection (2) ofSection 4/ In our view, the matter cannot fall under the second part of(2 ). It is true that by reason of the notifications the right to use the property after making improvements therein is to a limited extent affected in view of clause seventhly of Section 24 of the Land Acquisition Act. but the restriction on the use of the property in that manner is not the restriction on the sue thereof by reasons of any direction of the Court in the nature of attachment injunction, decree or order. In this view of the matter, it is difficult to accept Mr. Dalals contention that the land in question has vested in the Central Government or the National textile Corporation freed from the effect of the two notifications issued under section 4 and Section 6 of the Land Acquisition Act by reason of Section 3 read with Section 4 (2) of the Act 57 of0 ) MR. Dalal , however, urged that the phrase all other encumbrances occurring in Section 4 (2) of the said Act ought not to be construed by adopting the doctrine of ejusdem generis and if it was not so contoured the phrase would have a wider meaning and the notifications in question should be regarded as creating an encumbrance in falling within Section 4 (2) of the Act.We are not inclined to accept this submission of Mr. Dalal, for both the requirements are satisfied for applying the rule of ejusdem generis but even if the phrase all other incumbrances occurring insubsection (2) ofSection 4 were to be given a wide meaning by not confining it to types of encumbrances indicated earlier, still it is difficult to accept contention of Mr. Dalla that the notifications in question constitute or create an encumbrance on the land in11 ) THERE is yet another aspect of the matter which will have a bearing on the question under consideration. The sole object or the intention of making provision likesubsection (2) ofSection 4 of the Act appears to be that all property of the sick textile undertaking should vest in the Central Government freed and discharged from encumbrances. In other words, whatever encumbrances that might be subsisting on the property should no longer bind the Central Government or the Textile Corporation which should be free to deal with it thereafter as it likes and if that be the real object or intention ofsubsection (2) of4. then clearly the liability of being acquired that gets attached to the land by reason of the issuance of the notifications under the land Acquisition Act was never intended to be covered by the expression all other incumbrances occurring insubsection (2) ofSection 4. Assuming that this land got vested in the Central Government and thereafter in the National textile Corporation under Section 3 read with Section 4 (2) freed from the aforesaid burden or liability of being acquired. it was not disputed before us by mr. Dalal that it was open to the appropriate Government immediately thereafter to acquire that very land by issuing fresh notifications under Section 4 and Section 6 of the Land Acquisition Act and we do not see any hurdle in the appropriate Government acquiring the very land after the same got so vested in the National Textile Corporation under Section 3 of the Act. If, therefore, after the property had vested in the national Textile Corporation the same could be acquired by appropriate Government we fall to understand as to what purpose could be achieved by holding that the earlier notifications issued under the Land acquisition Act created an encumbrance which the National Textile Corporation got rid of underSubsection (2) of Section4 of the Act No. 57 of 1974. Looking at the question from his angle, we are of the view that the phrase all other incumbrances occurring insubsection (2) ofSection 4 cannot include any such burden or liability to which the land is subjected by reason of issuance of notification under Section 4 or Section 6 of the Land Acquisition12 ) IN this view of the matter it is clear to us that the provisions of Section 4 (2)of the Act cannot be availed of by the appellant before us for the purpose of contending that the Notifications in question in ceased to be effective qua the land in question and, therefore , the contention of Mr. Dalla must13 ) AS regards the other contention we do not agree that the learned Judge was in error in rejecting the applications of the original petitioner to lead oral evidence in support of its case that the purported acquisition was by way of colourable exercise of power or mala fide. Initially an application was made for permission to lead oral evidence in support of that plea onbut the type of evidence that was offered at that time was the evidence that the offered at that time was the evidence of an expert which would have been in the nature of opinion evidence. The learned Judge, therefore , by his order dateddeclined to give permission to the original petitioner to lead that type of evidence. Admittedly even that type of evidence was not ready with the original petitioner and an adjournment was sought which was refused. Thereafter, the hearing of the case proceeded and at the conclusion of the hearing the petitioner desired to have a further opportunity to settle the matter with the municipal authorities and therefore the learned Judge reserved his judgment with a view to give the petitioner time to negotiate a settlement. When the matter was placed on board for judgment onanother application was made seeking permission to lead oral evidence of persons who would depose to the area required by Municipal schools constructed during the relevant period between the two notifications i. e. between 1961 and 1964 in order to show that having regard to such area which was regarded as sufficient the present case was one of colourable exercise of power. The learned Judge rejected that application as in his view the hearing the case the had been concluded and he had reserved the judgment only to enable the petitioner to negotiate a settlement with the municipal authorities which it is desired to do and as such the petitioner was not entitled to make a second request for leading oral evidence. The learned Judge has also noted in his judgment that this type of case had not been even made out by the petitioner in the petition showing the area occupied by municipal schools during the relevant period i. e. between 1961 and 1964. He, therefore, rejected that request and proceeded to deliver his judgment. In the circumstances mentioned by the learned Judge we do not think that he was wrongly rejected the prayer made he has wrongly rejected the prayer made by the original petitioner to lead oral evidence in the case. In the absence of any material on record the learned Judge took the view that the petitioner had failed to establish that it was a case of colourable exercise of power and or that the purported acquisition was mala fide and we are of the view that the finding of the learned Judge in that behalf is correct.