Case: Devinder Singh  Vs. State Of Punjab

view that enquiry by Rule 4 must precede the issuance of notification under Section 4(1) of the Act. Furthermore as indicated before certain matters which are required to be done under Rule 4 can not be done because the officer or the person authorised by him would have no authority unless notification under Section 4 is issued.” 42. Repelling a contention that the provisions of Sections 6 to 37 are not required to be complied with in view of Section 39 thereof, it was held: “This Section, in our opinion, has no relevance for determining whether to be a proper acquisition, enquiry contemplated under Rule 4 must precede issuance of the notification under Section 4 of the Act.” 43. The lands in question are recorded as Shahi lands. It is not in dispute that they are agricultural lands. The Act contemplates that such lands may not be acquired. 44. We may notice that in Collector (District Magistrate) Allahabad and Another etc. v. Raja Ram Jaiswal etc., (1985) 3 SCC 1 ] this Court held that such a contention requires an in depth study, stating: “27. The validity of the impugned notification was also challenged on the ground that even though the acquisition is for the Sammelan, a company, the notification was issued without first complying with the provisions of Rule 4 of the Land Acquisition (Companies) Rules, 1963. The High Court has negatived this challenge. We must frankly confess that the contention canvassed by Mr. Nariman in this behalf would necessitate an indepth examination of the contention. However, we consider it unnecessary in this case to undertake this exercise because the judgment of the High Court is being upheld for the additional reason that the acquisition in this case was mala fide. Therefore, we do not propose to examine the contention under this head.” It is, on that premise, we have undertaken some study in this behalf. 45. The decision of this Court in Somawanti (supra) holding that the stage at which Rule 4 is required to be complied with is not the stage prior to issuance of a notification under Section 4 of the Act, but declaration under Section 6 does not appear to be correct from the decisions of this Court in Patel Chaturbhai Narsibhai (supra) and Wahab Uddin (supra), the earlier binding precedent, with utmost respect, having not been taken into consideration in its entirety. 46. In Abdul Husein Tayabali & Others v. State of Gujarat & Others 1968 (1) SCR 597 ], this Court observed: “Next it was urged that the inquiry under Rule 4 has to be held after the notification under section 4 is issued and not before and therefore the inquiry held by Master was not valid. We do not find anything in Rule 4 or in any other Rule to warrant such a proposition. The inquiry, the report to be made consequent upon such inquiry, obtaining the opinion of the Land Acquisition Committee, all these are intended to enable the Government to come to a tentative conclusion that the lands in question are or are likely to be needed for a public purpose and to issue thereafter section 4 notification”. 47. In Srinivasa Cooperative House Building Society Ltd. v. Madam Gurumurthy Sastry and Others [(1994) 4 SCC 675] , noticing Somavanti (supra) wherein it was held that the manufacturing of the articles was for the benefit of the community and to save substantive part of foreign exchange and staff quarters to workmen, it was held: “On the other hand, in the case of an acquisition for a company, the compensation has to be paid by the company. In such a case there can be an agreement under Section 41 for transfer of the land acquired by the Government to the company on payment of the cost of acquisition, as also other matters. The agreement contemplated by Section 41 is to be entered into between the company and the appropriate Government only after the latter is satisfied about the purpose of the proposed acquisition, and subject to the condition precedent that the previous consent of the appropriate Government has been given to the acquisition. Section 6 is in terms, made subject to the provisions of Part VII of the Act. The declaration for acquisition for a company shall not be made unless the compensation to be awarded for the property is to be paid by a company. In the case of an acquisition for a company simipliciter, the declaration cannot be made without satisfying the requirements of Part VII. But that does not necessarily mean that an acquisition for a company for a public purpose cannot be made otherwise than under the provisions of Part VII, if the cost or a portion of the cost of the acquisition is to come out of public funds. In other words, the essential condition for acquisition is for a public purpose and that the cost of acquisition should be borne, wholly or in part, out of public funds. Hence an acquisition for a company may also be made for a public purpose, within the meaning of the Act, if a part or the whole of the cost of acquisition is met by public funds. If, on the other hand, the acquisition, for a company is to be made at the cost entirely of the company itself, such an acquisition comes under the provisions of Part VII.” 48. The approach of the High Court in this behalf, in our opinion, is totally erroneous. A provision of a statute is either mandatory or directory. Even if a provision is directory, the same should be substantially complied with. It cannot be ignored in its entirety only because the provision is held to be directory and not an imperative one. 49. In this case admittedly there has been no compliance of Rule 4. If Rule 4 has not been complied with, the exercise of jurisdiction under Part VII must be held to have been erroneous.50. For the reasons aforementioned, the

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]The approach of the High Court in this behalf, in our opinion, is totally erroneous. A provision of a statute is either mandatory or directory. Even if a provision is directory, the same should be substantially complied with. It cannot be ignored in its entirety only because the provision is held to be directory and not an imperativethis case admittedly there has been no compliance of Rule 4. If Rule 4 has not been complied with, the exercise of jurisdiction under Part VII must be held to have been erroneous.