Case: R. L. Arora Vs. State Of Uttar Pradesh And Others

The petitioner is the owner of the certain lands in village Nauraiya Khera, in the district of Kanpur. He got information in May 1956 that steps were being taken to acquire nine acres of his land for an industrialist in Kanpur. He therefore, wrote to the Collector of Kanpur in that connection. On June 25, 1956, however, a notification was issued under S.4 of the Land Acquisition Act , No. 1 of 1894 (hereinafter called the Act ), stating that the land in dispute was required for a company for the construction of textile machinery parts factory by Lakshmi Ratan Engineering Works Limited, Kanpur. This order was followed on July 5, 1956, by a notification under S.6 of the Act, which was in similar terms. This notification also provided for the Collector to take possession of any waste or arable land forming part of the land in the Schedule to the notification immediately under the powers conferred by S. 17 (1) of the Act. On July 31, 1956, the Collector took possession of the land and handed it over to the company along with some constructions standing on it. In the meantime, the petitioner filed a writ petition in the High Court on July 31, 1956, praying that the notification under S. 6 of July 1956 be quashed and also applied for interim stay. As however possession had already been taken on July 31, 1956, the application for interim stay became infructuous. One of the main grounds in support of the writ petition of July 31, 1956 was that Ss. 38 to 42 of the Act has not been complied with. Thereafter steps were taken by the State Government to comply with the provisions of Ss. 38 to 42 of the Act and an agreement was entered into between the Government and the company in August 1956 and was published in the Government Gazette on August 11, 1956. This was done without making any enquiry either under S. 5-A or S. 40 of the Act. Therefore on September 14, 1956 an inquiry was ordered by the Government under S.40. The Enquiry was accordingly made and the enquiry officer submitted a report on October 3, 1956. This was followed by a fresh agreement between the Government and the company on December 6, 1956. On December 7, 1956, a fresh notification was issued under S. 6 of the Act after the formalities provided under Ss. 38 to 42 had been complied with. Thereafter a fresh notice was issued under S.9 of the Act and it appears that possession was formally taken again after January 2, 1957.2. A fresh writ petition was filed by the petitioner before the High Court on January 29, 1957 in view of the fresh action taken by the State Government and the main ground taken in this petition was that the notification was invalid as it was not in compliance with S. 40 (1) (b) of the Act read with the fifth clause of the matters to be provided in the agreement under S.41. The petitioner failed in the High Court. Thereafter he came by special leave to this Court. This Court decided on a construction of S. 40 (1) (b) read with the fifth clause of the matters to be provided in the agreement under S. 41 that these provisions had to be read together and required that the work should be directly useful to the public and that the agreement should contain a term as to how the public will have the right to use the work directly. The provision as to access to land or works for those having business with the company or the fact that the product would be useful to public was not considered sufficient to bring the acquisition for a company within the meaning of the relevant words in Ss. 40 and 41. The appeal therefore was allowed on December 1, 1961 and the last notification under S. 6 was quashed: see R.L. Aroras case. (1962) Sup 2 SCR 149 : (AIR 1962 SC 764  ).3. On July 20, 1962, the Land Acquisition (Amendment) Ordinance, 1962 (No. 3 of 1962) was promulgated by the President of India. By that Ordinance, Ss. 40 and 41 of the Act were amended and certain acquisitions of land made before the date of the Ordinance were validated notwithstanding any judgment, decree or order of any court. The Ordinance was replaced by the Land Acquisition (Amendment) Act, No. 31 of 1962, (hereinafter referred to as the Amendment Act), which was made restrospective from July 20, 1962, the date on which the Ordinance was promulgated. This Act made certain amendments in Ss. 40 and 41 of the Act and validated certain acquisitions. The present petition challenges the validity of the amendments to Ss. 40 and 41 and also the validity of S. 7 of the Amendment Act by which certain acquisitions made before July 20, 1962 were validated. It is therefore necessary to read the amendments made in Ss. 40 and 41 of the Act as well as S.7 of the Amendment Act. In S. 40 (1) of the Act a new clause was inserted in thesethat such acquisition is needed for the construction of some building or work for a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public41 was amended to read asIf the appropriate Government is satisfied after considering the report, if any, of the Collector, under Section 5 A, sub-section (2), or on the report of the officer making an inquiry under Section 40 that the proposed acquisition is for any of the purposes referred to in clause (a) or clause (aa) or clause (b) of sub-section (1) of Section 40, it shall require the company to enter into an agreement with the appropriate Government providing to the satisfaction of the appropriate Government for the following matters, namely :-"1. xx xx xx2. xx xx xx3. xx xx xx4. xx xx xx4A. Where the acquisition is for the construction of any building or work for a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose, the time within which , and the conditions on which, the building or work shall be constructed or executed : and5. xx xx7 of the Amendment Act, which validated certain acquisitions reads asany judgment, decree or order of any court, every acquisition of land for a company made or purporting to have been made under Part VII of the principal Act before the 20th day of July 1962, shall, in so far as such acquisition is not for any of the purposes mentioned in clause (a) or clause (b) of sub-section (1) of Section 40 of the principal Act, be deemed to have been made for the purpose mentioned in clause (aa) of the said sub-section, and accordingly every such acquisition and any proceeding, order, agreement or action in connection with such acquisition shall be, and shall be deemed always to have been, as valid as if the provisions of Sections 40 and 41 of the principal Act, as amended by this Act, were in force at all material times when such acquisition was made or proceeding was held or order was made or agreement was entered into or action was taken.Explanation xxBesides these amendments which require consideration in the present petition, Ss. 44 -A and 44-B were also inserted in the Act providing for restriction on transfer etc., (S. 44-A ) and making certain provisions forbidding acquisition of land for a private company other than a government company (S.44-B). It is however not necessary to set out the terms of these new Sections.5. The present petition challenges the validity of the amendments to Ss. 40 and 41 of the Act and also of S. 7 of the Amendment Act, and the challenge is made in this way.

Reasoning:
We are therefore of opinion that the literal and mechanical construction for which the petitioner contends is neither the only nor the true construction of cl. (aa) and that when cl. (aa) provides for acquisition of land needed for construction of some building or work it implieitly intends that the building or work which is to be constructed must be such as to subserve the public purpose of the industry or work in which the company is engaged or is about to be engaged. In short. the words "building or work used in cl. (aa) take their colour from the adjectival clause which governs the company for which the building or work is being constructed and acquisition under this clause can only be made where the company is engaged or is taking steps to engage itself in any industry or work which is for a public purpose, and the building or work which the company is intending to construct is of the same nature namely, that it is a building or work which is meant to subserve the public purpose of the industry or work for which it is being constructed. It is, only in these cases where the company is engaged in an industry or work of that kind and where the building or work is also constructed for a purpose of that kind, which is a public purpose, that acquisition can be made under cl. (aa). As we read the clause we are of opinion that the public purpose of the company for which acquisition is to be made cannot be divorced from the purpose of the building or work and it is not open for such a company to acquire land under cl. (aa) for a building or work which will not subserve the public purpose of the company. We are therefore of opinion that in the setting in which cl. (aa) appears and in the circumstances in which it came to be enacted, a literal and mechanical construction for which the petitioner contends is not the only construction of this clause and that there is another construction which in our opinion is a better construction, and which is that the public purpose of the company is also implicit in the purpose of the building or work which is to be constructed for the company and it is only for such work or building which subserves, the public purpose of the company that acquisition under cl. (aa) can be made. Thus there are two possible constructions of this clause, one a mere mechanical and literal construction based on rules of grammar and the other which emerged from the setting in which the clause appears and the circumstances in which it came to be enacted and also from the words used therein, namely, acquisition being for a company which has a public purpose behind it, and therefore the building or work which is to be constructed and for which land is required must also have the same public purpose behind it, that animates the company making the construction. We are therefore clearly of opinion that two constructions are possible of this clause of which the second construction which is other than literal is the better one. It is well settled that if certain provisions of law construed in one way will be consistent with the Constitution, and if another interpretation would render them unconstitutional, the Court would lean in favour of the former construction: (see Kedar Nath Singh v. State of Bihar, (1962) Sup 2 SCR 769 : (AIR 1962 SC 955  )). We are therefore of opinion that cl. (aa) does not permit acquisition of land for construction of some building or work for a company engaged or to be engaged in an industry or work, which is for a public purpose unless the building or work for which the land is acquired also subserves the public purpose of the industry or work in which the company is engaged. This is in our opinion the better construction of cl. (aa) taking into account the setting in which it appears and the circumstances in which it came to be enacted and the words used therein. If that is the true construction of cl. (aa) it cannot be said to contravene Art. 31(2), for the public purpose required therein is present where land is required for the construction of a building or work which must subserve the public purpose of the industry or work in which a company is engaged or is about to be engaged. Nor can it be said that the provision is hit by Art. 19 (1) (f), for it would in our opinion be a reasonable restriction on the right to hold property. We hold therefore that the clause so interpreted is not unconstitutional. We have already said that the amendments in S. 41 are only consequential to the insertion of cl. (aa) in S. 40 (1) and would therefore be equally valid andattack on it on the basis of Art. 31 (2) is that it makes an irrebuttable presumption that the acquisition was for a public purpose, though it may not be actually so and therefore contravenes Art. 31 (2) inasmuch as the result of this irrebuttable presumption is that acquisition which may not have been for a public purpose, is validated. We do not think that there is any force in this contention in view of the interpretation we have given to cl. (aa) introduced in S. 40 (1). The first fiction in S. 7 is that it shall be presumed that acquisitions before July 20, 1962, if they do not fall within cl. (a) or cl. (b) of S. 40 (1) shall be deemed to fall within cl. (aa). That means that building or work for which acquisition was made was required for a public purpose of the kind indicated in cl. (aa). It does not however follow from this that if the purpose was not of the kind indicated in cl. (aa) it will still be presumed that the acquisition was for the purpose mentioned in cl. (aa). All that the first deeming provision lays down is that where the public purpose does not come within cl. (a) or cl. (b) it should be deemed to come within cl. (aa), provided it is of a kind which can come within this clause. The intention behind this deeming provision clearly is to make the purpose of an acquisition made before July 20, 1962 which does not fall within cl. (a) or cl. (b) of S. 40(1) to be judged in accordance with the provisions contained in cl. (aa). On a reasonable interpretation, this deeming provision therefore only provides that where the purpose does not fall within cls. (a) and (b), it shall be deemed to fall under cl. (aa) and to be judged in accordance therewith. If in fact the purpose of any acquisition made before July 20, 1962, is such as does not fall within cl. (aa), the deeming provision would be of no avail. Thus the first of the two fictions introduced by S. 7 of the Amendment Act merely lays down that where a notification under S. 6 of the Act cannot be justified under cl. (a) and cl. (b) of the S. 40 (1), it will be judged in accordance with the provision contained in cl. (aa) and if it satisfies those provisions, the acquisition will be deemed for the purpose of that clause, as if that clause existed at the relevant time, though in actual fact it did not. The first fiction therefore in our opinion goes no further than this and does not provide that even though the purpose of acquisition does not fall within cl. (aa), it will still be deemed to be a public purpose. In this view of the matter, we are of opinion that the attack on S. 7 on the basis of Art. 31 (2) must fail.We may in this connection refer to the words "as valid as if" appearing in S. 7 of the Amendment Act, because they are in our opinion the key words for the purpose of interpreting the extent of the validity conferred on acquisitions before July 20, 1962. What the second fiction provides is that an acquisition made before that date shall be as valid as if the provisions of Ss. 40 and 41 of the Act as amended by the Amendment Act were in force at all material times. The force of the words "as valid as if" clearly is that the validity of acquisitions made before July 20, 1962 has to be judged on the basis that cl. (aa) was in force at the material time and in accordance therewith. The validity therefore is not absolute; it is conditioned by the fact that it will be as valid as if cl. (aa) was in force; so that if it could not be valid even if cl. (aa) was in force and could not be justified under the terms of that clause, the validity conferred by S.7 of the Amendment Act will not attach to it. This in our opinion is the force of the words "as valid as if" and the validity it has conferred is not absolute as contended on behalf of the petitioner and will not apply to those acquisitions which would not be valid if they could not be justified on the basis of cl. (aa) assuming it to be in force at the material time. In this view the attack under Art. 14 as well as Art. 31 (2) fails, for in neither case can acquisition be valid whether made before July 20, 1962 or thereafter, unless the conditions of cl. (aa) aresee no force in this contention. Section 7 opens with the words "notwithstanding any judgment, decree or order of any court" and the validity conferred by it on acquisitions made before July 20, 1962 is thus notwithstanding any judgment, decree or order of any court. These are the usual words to be found in validating legislation where the intention is to validate some action which would otherwise be invalid and which may have been declared invalid by any court. The purpose of such words in a validating legislation is to declare valid what has been held invalid by courts and once the legislature declares such action valid all steps taken in connection therewith are validated to the extent of validation. The result of the validation is that notifications or other steps taken which may otherwise have been invalid become valid. Further an acquisition also even though it may have been struck down by a court would be validated if it has been made in the sense that property in the land to be acquired has vested in Government either under S. 16 or S. 17(1) of the Act. It is not in dispute in this case that the property has vested in Government under Section 17(1) of the Act. It is also not in dispute that the purpose of the company was a public purpose, namely, manufacture of textile machinery parts and that the acquisition was also for the construction of works for that purpose. In the circumstances we fail to see how it can be said that rights of the petitioner have not been affected at all by the validating provision in S. 7 of the Act. The contention under this head alsohave not been able to understand exactly what is meant by this. As we have already said, it is not in dispute that the purpose of the company is a public purpose, namely, production of textile machinery parts and the land is acquired for construction of works for that purpose. The agreement shows that the land is required for the construction of a work, namely, a factory for the manufacture of textile machinery and parts and that such work is likely to prove useful to the public. One term of the agreement is that the company, its successors and assignees will use the said land for the aforesaid purpose and for no other purpose without the previous sanction in writing of the State Government. Another term provides that if the said land or any part or parts thereof shall no longer be required by the company, then the company will forthwith relinquish and restore the same after removing all buildings and structure to the Governor at a price equal to the amount paid by it under the Act. It is clear therefore that the land cannot be used for any other purpose and it will have to be restored to the Government if it is not used for the purpose for which it was acquired. In this connection reference may be made to S. 44-A introduced by the Amendment Act which lays down that "no company for which any land is acquired under this Part shall be entitled to transfer the said land or any part thereof by sale, mortgage gift, lease or otherwise except with the previous sanction of the appropriate Government". This provision also provides a safeguard that the land will only be used for the public purpose for which it is acquired and not otherwise. The aforesaid terms in the agreement in our opinion satisfy the condition that the land will be used for the public purpose for which it was being acquired and for no other. Therefore the acquisition is for a public purpose as provided in cl. (aa).We do not think it is the purpose of the Act that the agreement should provide for regulation or control of the products of a company, which probably means that Government should control the quantum of production and distribution or the price of the produced articles. This in our opinion is foreign to the purpose of the Act. All that the Act requires is that before land is transferred to the company by the Government, the agreement, should provide that land would be used for the purpose for which it was acquired and for no other. The Act has nothing to do with the control or regulation of the products of the company and gives no power to Government in that behalf. Nor do we think it was necessary in order that the public purpose mentioned in cl. (aa) is carried out to have any further term in the agreement besides those which have been provided in the agreement in this case. The contention that the acquisition in the present case was not for a public purpose as the agreement does not provide for the control and regulation of the product of the company must thereforeintention of the previous owner whatever it may be does not in our opinion enter into the question at all, so far as the validity of the acquisition is concerned provided the acquisition is for a public purpose. Whether the land should be acquired or not is a matter which may be urged under S. 5-A of the Act which gives the owner of the land the right to object to the acquisition, and it is for Government to decide whether the objection should be allowed or rejected. Once the Government decides that the objection should be rejected and that the acquisition is needed for a public purpose the validity of the notification under S. 6 and the subsequent action thereafter cannot be challenged on the ground that the previous owner himself intended to use the land for some public purpose. In this connection our attention is invited to the observations of this Court in Province of Bombay v. Khushaldas S. Advani, (1950) SCR 621   at p. 687 : (AIR 1950 SC 222   at p. 246) where it was observed that "under certain circumstances even securing a house for an individual may be in the interests of the community, but it cannot be to the general interest of the community to requisition the property of one refugee for the benefit of another refugee". These observations in our opinion have no relevance to the matter under consideration. We are concerned here with acquisition for a public purpose, which is undisputed. This is not a case of a house of one person being requisitioned for another; this is a case of constructing some work which will be useful to the public and will subserve the public purpose of the production of textile machinery and its parts for the use of the general public. In these circumstances we are of opinion that there being a definite public purpose behind the acquisition in the present case, the acquisition would be justified under the Act irrespective of the intention of the previous owner of the land to use it for some other public purpose. The contention under this head must alsois said that there is discrimination between a public company and a Government company for which land can be acquired under cl. (aa) on the one hand and a private company or an individual on the other. It is true that acquisition for the purpose of cl. (aa) can only be made for a Government company or a public company and cannot be made for a private company or an individual; but there is in our opinion a clear classification between a public company and a Government company on the one hand and a private company and an individual on the other, which has reasonable nexus with the objects to be achieved under the law. The intention of the legislature clearly is that private individuals and private companies which really consist of a few private individuals banded together should not have the advantage of acquiring land even though they may be intending to engage in some industry or work which may be for a public purpose inasmuch the enrichment consequent on such work goes to private individuals or to a group of them who have formed themselves into a private company. Public companies on the other hand are broad based and Government companies are really in a sense no different from Government, though for convenience of administration a Government company may be formed, which thus becomes a separate legal entity. Thus in one case the acquisition results in private enrichment while in the other it is the public which gains in every way. Therefore a distinction in the matter of acquisition of land between public companies and Government companies on the one hand and private individuals and private companies on the other is in our opinion justified, considering the object behind cl. (aa) as introduced into the Act. The contention under this head must therefore alsofeel unable to accept this as a possible construction of the words used. For that construction to be adopted even the transposition of the words "for a public purpose" to an earlier point after the words "for a company" would not be sufficient assuming the rules of grammar permitted such a course; for, then it wold leave out the description or categorisation of the company for which the land is needed, and in such a situation the entire object of the amendment would be frustrated, as it would not be a condition that the industry in which the company is engaged is one which is required in public interest. Even if the clause were re-written so as to introduce the words "for a public purpose" earlier and also retain them where it occurs now, the construction for which Mr. Setalvad contends cannot result, for then it would not make much sense, for the words "for a public purpose" if transposed earlier would not convey the meaning which Mr. Setalvad says that convey, because the construction which learned counsel suggests is that the clause means that the land is needed for the construction of the factory and other essential buildings for a company engaged in an industry which serves the national interest. By no transposition of the words actually used in the clause can such a transformation bequite agree that if the language were flexible in the sense that in could be read so as to make it refer only to cases of acquisition for a public purpose, this could and ought to be done. But this assumes that the clause is reasonably capable of two interpretations; one which would render it unconstitutional and the other which even though it be a little strained, would make it constitutional, then the Court would lean in favour of the latter construction.