Case: Ambalal Purshottam &amp; Others Vs. Ahmedabad Municipal Corporation

1. On June 6, 1941, the Municipal Borough of Ahmedabad prescribed a "line of the street" along an important thoroughfare in the town of Ahmedabad and resolved that steps be taken for compulsory acquisition of lands falling "within the line". On June 9, 1941 a notification was issued by the Government of Bombay under Section 4 of the Land Acquisition Act 1894, that the lands set out in the Schedule "were likely to be needed for the public purpose set out in column 6 of the Schedule thereto, viz., for road widening", and that "any contracts for the disposal of any of the said lands by sale, lease, mortgage, assignment, exchange or otherwise or any outlay or improvements made therein without the sanction of the Collector ... after the date of this notification will, under section 24 (seventhly) of the said Act, be disregarded by the officer assessing compensation for such parts of the said lands as may be finally acquired." The Government of Bombay issued a notification under Section 6 of the Land Acquisition Act sometime in 1943 and also appointed the Special Land Acquisition Officer to take order for acquisition of the land2. After the publication of the notification under Section 4 of the Land Acquisition Act, structures on the lands notified were burnt down by rioters. The owners of the lands put up temporary structure upon the lands with the permission of the Municipal Borough giving an undertaking that they will not claim compensation for these structures in the land acquisition proceedings. The structures were let out to different tenants3. Proceedings for assessment of compensation were not immediately taken in hand, but negotiations were started by the Municipal Borough with the owners of the lands, and between the years 1944 and 1952 some lands were purchased by the Municipal Borough by private treaty and the lands so purchased were withdrawn from the notification for acquisition. Finding that it was not possible to persuade the other owners to sell their lands, the Special Land Acquisition Officer was moved to make his award. The Special Land Acquisition Officer made a common award on August, 13, 1960. When the Special Land Acquisition Officer attempted to take possession of the lands acquired the tenants of the structures moved petitions under Article 226 of the Constitution in the High Court of Gujarat for writs quashing or setting aside the notifications under Sections 4 and 6 of the Land Acquisition Act, and the awards and the notices issued for obtaining possession from the petitioners4. The High Court rejected the petitions. Against the orders rejecting the petitions, these appeals have been filed with special leave.

Court's reasoning:
6. In our judgment there is no substance in any of the contentions raised. It may be recalled that the appellants in these appeals are not the owners of the lands acquired: they are tenants in occupation of structures permitted to be constructed upon the lands after the date of the notification under Section 4 of the Land Acquisition Act on condition that the owners of the lands will not claim compensation for those structures. If the land owners are not entitled to claim compensation for the structures, evidently the persons who occupy those structures and who have come to occupy the same after the notification, have no interest in the lands or the compensation, and they cannot hold up the acquisition proceedings by preventing the Special Land Acquisition Officer from taking over possession of the lands7. The Land Acquisition Act authorises the appropriate Government to notify land for acquisition which is or is likely to be needed for a public purpose: and road widening in a town is undoubtedly a public purpose. After considering the report of the Collector under Section 5-A of the Land Acquisition Act, the Government of Bombay published a notification under Section 6 (1) of the Land Acquisition Act that the lands were needed for a public purpose. That declaration was, by virtue of S. 6 (3) of the Act, conclusive evidence that the lands were needed for a public purpose By the compulsory acquisition for a public purpose, subject to payment of compensation, no fundamental rights guaranteed under Articles 19 and 31 (2) of the Constitution were infringed. The lands were properly notified for acquisition. The compensating payable in respect of the lands has been determined.If there is any grievance which the appellants are entitled to raise in respect of the compensation determined as payable, their remedy lies in approaching the Courts competent to determine that question9. On a review of these provisions it is clear that the municipality under the Bombay Municipal Boroughs Act, 1925 had the power to acquire land needed for municipal purposes including widening, opening, enlarging or otherwise improving any public streets or municipal road. The municipality laid down a line of the street; after the line of the street was laid down, it was open to the municipality to decline permission to construct or reconstruct any building on the land and the lands were to be deemed added to the street. But the municipality did permit construction on the lands. The provisions of Clause (b) of Section 118 (3) were therefore not attracted. For the purpose of widening the street, the municipality had the power under Section 114 to purchase the land, and under Section 52 the municipality could request the local Government to take action for compulsory acquisition of the land and for vesting the same in the municipality. Counsel for the appellants urged that the power conferred upon the municipality could only be exercised when there was any "hindrance to the permanent or temporary acquisition" by the municipality of any land required for the purposes of the Act, and since there is no proof of such hindrance, all the proceedings for acquisition must be deemed void. In our judgment, the argument is misconceived. Section 52 of the Bombay Municipal Boroughs Act, 1925, authorises the municipality to purchase property required for the purpose of the Act by private treaty or to approach the Government for compulsory acquisition of the land for a public purpose.Section 52 merely sets out alternative modes of acquiring property: it does not provide that before a Municipal Borough may move the Government to acquire land under the Land Acquisition Act, the Borough should have made attempts to purchase the land by private treaty and have failed in that attempt. In any case, the power of the appropriate Government under Section 4 of the Land Acquisition Act to notify land needed or likely to be needed for a public purpose is not subject to the restriction that when the public purpose is of the municipality, the municipality has attempted to purchase the land by private treaty and has failed in that attempt.The scheme of the Land Acquisition Act is that whenever the land is needed for a public purpose or is likely to be needed for a public purpose, the Government may resort to the machinery provided under the Act for acquiring the land. Where the public purpose is the purpose of a local authority and the provisions of the Land Acquisition Act are put in force for acquiring land at the cost of any fund controlled or managed by a local authority, Section 50 of the Land Acquisition Act provides that the charges of and incidental to such acquisition shall be defrayed from such fund. There is no other bar statutory or otherwise to the acquisition of the land for purposes of a municipality.In issuing the notification under Section 4 of the Land Acquisition Act, the appropriate Government is therefore not prevented, merely because the municipality has not attempted to acquire the land by private treaty. There was, therefore, no condition precedent to the acquisition of the land before a notification under Section 4 of the Land Acquisition Act was issued, which was not complied with11. The last argument raised by counsel for the appellants is, in our judgment futile. The notification issued by the Government of Bombay under Section 6 of the Land Acquisition Act was by operation of sub-section (3) conclusive evidence that the land was needed for a public purpose. No inquiry was thereafter permissible that the land was not needed for a public purpose. It is true that no steps were immediately taken by the Land Acquisition Officer to make awards of compensation and to take possession of the lands.But the reason apparently was that the municipality was still trying to purchase the land by private treaty and when it was found that it could not purchase the lands, the Land Acquisition Officer was requested to expedite the determination of compensation. We are unable to hold that there is any evidence that the Government of Bombay issued the notification under Section 4 of the Land Acquisition Act, not for the bona fide purpose of acquisition but with the object of pegging down prices so that the lands may when needed be obtained at those rates in future.The land was within the line of the street and could not without the sanction of the municipality be put to any profitable use. If either the land owners or the tenants were aggrieved by the delay, it was open to them to claim writs or orders compelling the State Government to complete the assessment and payment of compensation.We are not hereby to be understood as suggesting that after issue of the notifications under Sections 4 and 6 the appropriate Government would be justified in allowing the matters to drift and to take in hand the proceedings for assessment of compensation whenever they think it proper to do. It is intended by the scheme of the Act that the notification under S. 6 of the Land Acquisition Act must be followed by a proceeding for determination of compensation without any unreasonable delay.But on the facts of the present case, it does not appear that there was any scope for holding that with a view to prevent the land owners or the persons claiming derivative title from them from getting the benefit of the rise in prices, notifications under Sections 4 and 6 were issued without any intention to take steps for acquisition of the lands.