Case: R. L. Arora Vs. State Of U. P

The appellant is the owner of certain lands in village Nauraiya Khera. Out of those lands, 15.5 acres were requisitioned by the Defence Department of the Government of India and are still in their possession and we are not concerned with that. Besides that, the appellant has 9 acres of land which he had purchased many years ago with the idea of erecting a factory thereon. The appellant got information in May 1956 that steps were being taken to acquire his nine acres of 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 certain land which was specified as 11.664 acres in village Nauraiya Khera was required for a company for the construction of textile machinery parts factory by Lakshmi Ratan Engineering Works Limited, Kanpur (hereinafter called the Works). This was followed on July 5, 1956 by a notification under S. 6 of the Act, which was in terms similar to the notification under S. 4. The notification also provided for the Collector to take possession of any waste or arable land forming part of the land mentioned in the Schedule to the notification immediately under the powers conferred by S. 17(1) of the Act. It is not in dispute that this notification was issued without taking any action under Part VII of the Act. On July 31, 1956, the Collector took possession of the land and handed it over to the Works along with the buildings standing on it2. In the meantime, the appellant had filed a writ petition in the High Court on July 31, 1956, praying that the notification or July 5, 1956, be quashed and had also applied for interim stay. As however possession had already been taken on July 31, 1956, the application for interim stay was infructuous. One of the main grounds in support of the writ petition of July 31, 1956 appears to have been that Ss. 38 to 42 of the Act had not been complied with. It seems that thereafter steps were taken by the State Government to comply with the provisions of Ss. 38 to 42 of the Act. An agreement was entered into between the Government and the Works on August 5, 1956 and was published in the Gazette on August 11, 1956; but this was done without making an inquiry either under S. 5A or S. 40 of the Act. Therefore, on September 14, 1956, an enquiry was ordered by the Government under Section 40. The enquiry was accordingly made and the inquiry officer submitted his report on October 3, 1956. This was followed by a fresh agreement between the Government and the Works 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 completed. Thereupon the appellant filed another writ petition on January 29, 1957, challenging the notification of December 7, 1956, on various grounds3. It is not necessary to give in detail the grounds on which the notification of December 7, 1956 was attacked. It is enough to say that one of the grounds 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 matter to be provided in the agreement under S. 41. The learned Single Judge however held that the agreement was in accordance with the provisions of Ss. 40 and 41. He also held that there was no force in the other contentions raised on behalf of the appellant and dismissed the petition. The appellant then went in appeal which was dismissed. He then applied for a certificate to enable him to appeal to this Court, which was granted; and that is how the matter has come up before us22. The appellant was the owner of certain lands. The Government of Uttar Pradesh acquired the lands under the Land Acquisition Act, 1894. The appellant, thereupon, moved the High Court at Allahabad under Art. 226 of the Constitution for an appropriate writ to quash the order of acquisition made by the Government. The petition was dismissed by the High Court and the appellant has filed this appeal against the judgment of the High Court. The land, it may be stated, was acquired by the Government for a company called the Lakshmi Ratan Engineering Works Ltd. which required it for setting up a textile machinery parts factory23. Sections 6 to 37 of the Act lay down the procedure for all acquisitions under it. Part VII of the Act, which consists of Ss. 38 to 44 provides for acquisition of lands for companies for certain specified purposes. It is not in controversy that the acquisition in the present case was made under this part. It is necessary to set out Ss. 39, 40 and 41 of part VII to appreciate the contention of the appellant :S. 39. The provisions of Sections 6 to 37 (both inclusive) shall not be put in force in order to acquire land for any Company, unless with the previous consent of the appropriate Government, nor unless the Company shall have executed the agreement hereinafter mentionedS. 40. (1) Such consent shall not be given unless the appropriate Government be satisfied, either on the report of the Collector under Section 5A, sub-section (2), or by on enquiry held as hereinafter provided,(a) that the purpose of the acquisition is to obtain land for the erection of dwelling houses for workmen employed by the Company or for the provision of amenities directly connected therewith, or(b) that such acquisition is needed for the construction of some work, and that such work is likely to prove useful to the public2. Such enquiry shall be held by such officer and at such time and place as the appropriate Government shall appoint3. Such officer may summon and enforce the attendance of witnesses and compel the production of documents by the same means and, as far as possible, in the same manner as is provided by the Code of Civil Procedure in the case of a Civil CourtS. 41. If the appropriate Government is satisfied after considering the report, if any, of the Collector under Section 5A, sub-section (2), or on the report of the officer making the inquiry under Section 40 that the purpose of the proposed acquisition is to obtain land for the erection of dwelling houses for workmen employed by the Company or for the provision of amenities directly connected therewith or that the proposed acquisition is needed for the construction of a work, and that such work is likely to prove useful to the public, 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) the payment to the appropriate Government of the cost of the acquisition;(2) the transfer, on such payment, of the land to the Company;(3) the terms on which the land shall be held by the Company;(4) where the acquisition is for the purpose of erecting dwelling houses or the provision of amenities connected therewith, the time within which, the conditions on which and the manner in which the dwelling houses or amenities shall be erected or provided; and(5) where the acquisition is for the construction of any other work, the time within which and the conditions on which the work shall be executed and maintained, and the terms on which the public shall be entitled to use the work.

Reasoning:
In the present case it is not the case of the respondents that any part of the compensation is to be paid out of what may be called public funds. It is not in dispute that the entire compensation is to be paid by the Works and therefore the provisions of Part VII would apply to the present case; and it is in this background that we have to consider the contention raised on behalf of the appellant6. We have already pointed out that S. 39 as well as the opening words of S. 6 make it clear that the operative provisions of the Act for the purpose of acquiring land for a company will only apply when two conditions precedent have been satisfied, namely, (i) the previous consent of the appropriate government has been given to the acquisition, and (ii) the company has entered into an agreement as provided in the Act7. Now S. 40(1) lays down that such consent shall not be given unless the appropriate government is satisfied either on the report of the Collector under S. 5A (2) or by an inquiry held as hereinafter provided (a) that the purpose of the acquisition is to obtain land for the erection of dwelling houses for workmen employed by the company or for the provision of amenities directly connected therewith, or (b) that such acquisition is needed for the construction of a work, and that such work is likely to prove useful to the public8. The Government therefore cannot give consent to the acquisition of land for a company unless it is satisfied about one or other of the two conditions mentioned in S. 40(1). We are in the present case not concerned with cl. (a) of S. 40(1) and need not refer to it further9. We are of opinion that it is not possible to interpret S. 40(1)(b) in isolation and by itself ; it has to be interpreted in the context of what is provided in S. 41 about the agreement to be entered into between the Government and the company which agreement becomes a part of the Act under S. 42 so far as regards the terms on which the public shall be entitled to use the workThe problem that has been posed before us does not appear to have been posed before the High Court in that form. Further the High Court seems to have thought that as the Sections provided for the satisfaction of the Government there was no power in a court to enter upon a consideration of the question how far that provision safeguarded the interests of the Government or of the public. This decision seems to suggest that the Governments decision as to the terms is completely final and as the Government was satisfied by the norms it had imposed in that case the matter was no longer open before the court. All that we need say about this case is, as already pointed out, that the question was not raised before the High Court in the manner in which it has been raised before us and that may account for the view taken by the High Court. It is also well to remember that in that case premises were required for the Public Debt 0ffice of the Government which was then under the management of the Bank of Bengal and that may have had something to do with the final decision. But, in any case, this case does not lay down that it is for the Government to determine what the relevant words in Ss. 40 and 41 mean, though the High Court is right when it says that it is not for the court to enter upon a consideration of the question how far the provision made by the Government in the terms of the agreement sufficiently safeguards the interests of the public, that being a matter entirely for the satisfaction of the Government. But as the matter was not considered by the High Court from the point of view from which it has been argued before us, this case cannot be treated as a decision on the interpretation of the relevant words in Ss. 40 and 41 merely by implication. In any case, if by implication the said decision supports the respondents contention, it does not correctly represent the true legal position in that behalf. In our opinion, the interpretation of the material terms in S. 40 (1) (b) and the fifth term of the agreement provided in S. 41 read together is and must always be within the jurisdiction of the courtThe very fact therefore that the power to use the machinery of the Act for the acquisition of land for a company is conditioned by the restrictions in Ss. 40 and 41 indicates that the legislature intended that land should be acquired through the coercive machinery of the Act only for the restricted purpose mentioned in Ss. 40 and 41, which would also be a public purpose for the purpose of S. 4. We find it impossible to accept the argument that the intention of the legislature could have been that individuals should be compelled to part with their lands for private profit of others who might be owners of companies through the Government, simply because the company might produce goods which would be useful to the public. If therefore the legislature intended by the provisions of Ss. 40 and 41 that there should be restrictions on the power to acquire land for companies it can only be given effect to by putting the narrower meaning on the words used in Ss. 40 and 41, as contended for by the appellant. Further, reading S. 40 (1)(b) and the fifth term of the agreement as provided in S. 41 together (as they must in our opinion be read together in order to find out the real intention of the legislature) there can be no doubt that the only meaning to be given to these provisions read together is, as contended for on behalf of the appellant. In this connection we ought to add that as we shall presently point out the material words of the fifth term in the agreement provided in S. 41 are reasonably incapable of the construction suggested by the respondentsAll that the agreement has provided in the present case is that the public will have such right of access to and use of the land/works herein and before specified as may be necessary for the transaction of their business with the firm. This in our opinion is not what is meant by the words the terms on which the public shall be entitled to use the work in the fifth term of the agreement as provided in S. 41. Such use for business is implicit in every business, even if the Government does not acquire land for it, for no company can carry on for a moment its business with any profit if it does not allow those with whom it has business to come to its premises. Therefore, when the fifth term provides for the use of the work by the public as of right it cannot possibly envisage the use only by those who have business with a factory (for example) and their going there to transact business; such use would in any case have to be permitted by the owner of the company, as otherwise it will not be worth his while to run the company at all. Therefore, when the fifth term provides that the public shall be entitled to use the work it means that the public shall be entitled to use the work directly and as of right for its own benefit and does not mean that those who have business with the company can go upon the work for that business. Reading therefore S. 40(1) (b) and the fifth term of the agreement provided in S. 41, there is in our opinion no doubt that the intention of the legislature was that land should be acquired only when the work to be constructed is directly useful to the public and the public shall be entitled to use the work as such for its own benefit in accordance with the terms of the agreement which under S. 42 are made to have the same effect as if they form part of the Act. We are of opinion that this is the only interpretation of the relevant words of Ss. 40 and 41, and the legislature could not have intended otherwiseWe are of opinion that this argument is entirely fallacious. It is true that it is for the Government to be satisfied that the work to be constructed will be useful to the public; it is also true that it is for the Government to be satisfied that there is a term in the agreement providing that the public shall be entitled to use the work; but this does not mean that it is the Government which has the right to interpret the words used in S. 40(1)(b) or in the fifth term of the agreement in S. 41. It is the court which has to interpret what those words mean. After the court has interpreted these words, it is the Government which has to carry out the object of Ss. 40 and 41 to its satisfaction. The Government cannot say that Ss. 40 and 41 mean this and further say that they are satisfied that the meaning they have given to the relevant words in these Sections has been carried out in the terms of the agreement provided by them. It is for the court to say what the words in Ss. 40 and 41 mean though it is for the Government to decide whether the work is useful to the public and whether the terms contain provisions for the manner in which the public shall be entitled to use the work. It is only in this latter part that the Governments satisfaction comes in and if the Government is satisfied, that satisfaction may not be open to challenge; but the satisfaction of the Government must be based on the meaning given to the relevant words in Ss. 40 and 41 by the court. The Government cannot both give meaning to the words and also say that they are satisfied on the meaning given by them. The meaning has to be given by the court and it is only thereafter that, the Governments satisfaction may not be open to challenge if they have carried out the meaning given to the relevant words by the court. The argument therefore that it is the Governments satisfaction which is required both by S. 40 and S. 41 is of no help to the respondents, for it is for the court to say what these words mean and then see whether the Government are satisfied according to the meaning given to these words by the court. We have already indicated what these words mean and if it plainly appears that the Government are satisfied as a result of giving some other meaning to the words, the satisfaction of the Government is of no use, for then they are not satisfied about what they should be satisfied. In the present case the Government seems to have taken a wrong view that so long as the product of the Works is useful to the public and so long as the public is entitled to go upon the Works in the way of business, that is all that is required by the relevant words in Ss. 40 and 41. We have held that this is not the meaning of the relevant words in Ss. 40 and 41 and therefore the Governments satisfaction on this meaning cannot be binding and would be worthlessBut we do not think it necessary to examine the American cases cited before us because the words in our statute are not pari materia with the words used in the fifth amendment to the American Constitution. The fifth amendment contemplates that private property shall not be acquired except for public use. The public use there is thus connected with the purpose of acquisition and may perhaps in certain conceivable circumstances depending upon the conditions in a particular State, be open to a wider interpretation. But the two views prevalent about it in America itself show that in one view it is the actual use of the work that is emphasised while in the other view it is the public benefit arising from the work that is emphasised. Now so far as the words in the Act are concerned, it is to our mind perfectly obvious that it is the actual use of the work which the Act envisages and not the public benefit that might directly or indirectly arise from the use of the land acquired. This is clear from the words used both in S. 40(1)(b) and the fifth term of the agreement provided in S. 41Section 40(1)(b) requires that the acquisition is for the construction of some work, and that that work is likely to prove useful to the public. It does not say that the acquisition of land would be useful to the public. Further the fifth term in the agreement provided in S. 41 makes this clear beyond all doubt for it provides that the agreement shall contain the terms on which the public shall be entitled to use the work. These words therefore in the Act are clearly referable to the narrower view prevalent in America, which emphasises the use by the public of the actual work constructed. We are therefore of opinion that the respondents can derive no advantage from the American cases cited on their behalf to show the wider interpretation of the words used in the fifth amendment to the American ConstitutionThat again is a mater into which we need not go, and it is unnecessary to consider why the legislature provided S. 50 in the Damodar Valley Corporation Act and did not provide some similar Section in other Acts creating statutory corporations which were enacted after the Damodar Valley Corporation Act was put on the statute book. These considerations in our opinion have no relevance to the interpretation of the relevant words of Ss, 40 and 41 of the Act and we do not therefore propose to say anything about S. 50 of the Damodar Valley Corporation Act. We may add that the works are not like the Damodar Valley Corporation and what we say in the present case may not necessarily be taken to apply to a statutory corporation like the Damodar Valley Corporation, which is wholly owned by the StateWe have not been able to understand how that provision helps the respondents, All that S. 6 (3) says is that the declaration shall be conclusive evidence that the land is needed for a public purpose or for a company. In this case the declaration was that the land was needed for a company and that according to S. 6 (3) is conclusive evidence that the land is so needed. Now it is not the case of the appellant that the land was not needed for the Works in the present case, nor does the appellant say that though the land was needed for some other purpose, the notification falsely declares that it was needed for the Works. In the circumstances the conclusiveness envisaged by S. 6 (3) is of no assistance to the solving of the problem with which we are concerned in the present caseThere is no force in this argument either, for there is no question of any mala fides or fraud on the Act in the present case. What the appellant contends is that the relevant words in Ss. 40 and 41 have a certain meaning and that on that meaning the action of the State Government in giving consent for the use of the machinery provided in the Act for the acquisition of land for the Works is not within the contemplation of the Act. This contention has nothing to do with mala fides or with fraud on the statute. It has always been the case of the appellant that the consent given by the Government was not within the meaning of the relevant words in Ss. 40 and 41 and therefore the entire proceedings for acquisition of the appellants land must be quashed, for the conditions precedent for the issue of the notification under S. 6 had not been complied with. On that case the appellant must succeed, if we accept the meaning for which he contends, and that has nothing to do with mala fides or fraud on the statute on the part of the GovernmentThat Act applied to works of public utility which were defined under S. 11 to mean any bridge, road, railroad, tramroad, canal for irrigation or navigation, work for the improvement of a river or harbour, dock, quay, jetty, drainage work or electric telegraph and also all works subsidiary to any, such work, At the same time there was another Act in force, namely, Act VI of 1857, which provided for acquisition of land for public purposes. Then came the Act (X of 1870), which repealed both Acts No. VI of 1857 and No. XXII of 1868 and made a consolidated provision for acquisition of land for pubic purposes and for companies and brought in Chap. VII for the first time. This Act was replaced in 1894 by the present Act, However, Act X of 1870 was a consolidating and amending, Act. The Act of 1894 is also an amending Act. Therefore, it is not possible to derive much assistance from the previous law existing before the Act of 1870 was passed for it not only consolidated the previous law but also amended it. We have therefore to interpret the Act on the words as they now stand and cannot derive much assistance from the provisions of Act XXII of 1863. That is why we have interpreted above the relevant words of Ss. 40 and 41 without any reference to the past history of the law relating to acquisition of land for public purposes and for companiesWe have already set out the term in the agreement which shows that those who have business with the company shall have such right of access to and use of the land/works herein and before specified as may be necessary for the transaction of their business with the firm. This in our opinion is not what the relevant provisions of Ss. 40 and 41 require. What these provisions require is that the work should be directly useful to the public and the agreement shall contain a term how the public shall have the right to use the work directly themselves. It seems to us that under the relevant words in Ss. 40 (1) (b) and 41 it is works like a hospital, a public reading room or a library or an educational institution open to the public or such other work as the public may directly use that are contemplated and it is only for such works which are useful to the public in this way and can be directly used by it that land can be acquired for a company under the ActThe fact that the product of the company would be useful to the public is not sufficient to bring the acquisition for a company within the meaning of the relevant words in Ss. 40 and 41.In the present case all that the Government was satisfied about appears to be that the product of the company will be useful to the public and the provision in the agreement is merely that the public shall be able to go upon the works for purposes of business. This in our opinion is not the meaning of the relevant words under Ss. 40 and 41 and therefore the Governments satisfaction in that behalf is not enough to entitle it to use the machinery of the Act for the purpose of acquisition in this case.