Case: State Of Gujarat &amp; Ors Vs. Ambalal Haiderbhai Etc

hese three appeals Nos. 967 to 969 of 1971 by special leave which are directed against the common judgment of the High Court of Gujarat dated April 17/1 8, 1970 in Special Civil Application Nos. 116 of 1967, 1621 of 1967 and 1622 of 1967 arisehe Land Acquisition Act, 1894, (hereinafter referred to as the Act) for acquisition of certain lands in villages Sayaji puri, Bapow and Savad, District Baroda, Taluka Baroda were initiated by the Government of Gujarat at the instance of Sardarnagar Cooperative Industrial Society Limited registered under the Gujarat Co-operative Societies Act 1961 (hereinafter referred to as the Company) for the purpose of establishing an industrial estate for small scale industries. The acquisition being for the Company a notification was issued under section 4 of the Act on Jul y 2, 1964 after following the provisions of Part VII of the Act. An agreement under section 41 of the Act between the State Government and the Company was entered into on April 2, 1965 and was published on October 15, 1966. The final notification under section 6 of the Act was issued on October 18, 1966. The owners of the aforesaid lands who are contesting respondents herein challenged the aforesaid notifications issued under section 4 and 6 of the Act by filing petitions under Article 226 of the Constitution of India inter alia on the ground that the provisions of the Rule 4 of the Land Acquisition (Companies) Rules, 1963 (hereinafter referred to as the Rules) made by the Central Government in exercise of the powers conferred under section 55 of the Act, which by virtue of Rule 1(2) of the Rules apply to acquisition of land for all companies under Part VII of the Act, have not been complied with particularly as they had not been given a right to be heard in accordance with the principles of natural justice at the enquiry held by Special Land Acquisition Officer, Baroda, appellant No. 2 herein. The plea raised by the owners of land found favour with the High Court which allowed the petitions set aside the notification under section 6 of the Act, and issued a mandamus commanding appellant No. 2 to complete the statutory enquiry under Rule 4 of the Rules in accordance with the principle of natural justice.The short but important question which we are called upon to decide in these appeals is whether the enquiry under Rule 4 of the Rules requires compliance with the rules of natural justice.

Court's reasoning:
A conjoint reading of sub-rules (1) and (2) leaves no room for doubt that the enquiry by the Collector, which is meant inter alia to find out whether all reasonable efforts have been made by the Company to get the land by negotiation on payment of reasonable price and such efforts have not fructified and to determine the approximate amount of compensation likely to be payable in respect of the land keeping in view the provisions of sections 23 and 24 of the Act, is of vital importance to the persons interested in the(3) of the rule requires the Collector to submit his report to the concerned Government which in turn is required before making a declaration under section 6 of the Act to consider that report as well as the report, if any, submitted by it under section 5A of the Act after ascertaining the view of the Committee constituted under Rul e 3 of the Rules in regard to the Collectors report under Rule 4 of the Rules.Although the above mentioned rule is silent regarding the mode and method of the enquiry to be held by the Collector and the report of the Collector is of a recommendatory character, yet regard being had to the legislative history and purpose of the rule, and the mischief sought to be prevented, we have no hesitation in holding that, in conducting the enquiry, the Collector has, in the interest of fair play, to observe the principles of natural justice by affording the persons interested in the land a reasonable opportunity of being heard and of adducing material before the Collector to refute the allegations of the Company. The concept of natural justice which as evident from the observations made in A. K. Kraipaks case (supra), has undergone a great deal of change in recent years. The dividing line between an administrative and quasi-judicial function is oftenview is reinforced by the following illuminating observations made by the learned Chief Justice in State of Gujarat &Anr. v. Patel Chaturbhai Narsibhaicontention of the State that the enquiry under rule 4 is administrative and that the owner of the land is not entitled to be given an opportunity to be heard at the enquiry cannot be accepted for these reasons. The enquiry under rule 4 shows that the Collector is to submit a report among other matters that the Company has made all reasonable efforts to get such lands by negotiation with the persons interested therein on payment of reasonable price and such efforts have failed. The persons interested therein are the owners of the land which is proposed to be acquired. The company at such an enquiry has to show that the company made negotiations with the owners of the land. The owners of the land are, therefore, entitled to be heard at such an enquiry for the purpose of proving or disproving the reasonable efforts of the company to get such land by negotiation. The contention on behalf of the State that the owners of the land will get an opportunity when an enquiry is made under section 5-A of the Act is equally unsound. Section 17 of the Act provides that the appropriate Government may direct that the provisions of section 5-A shall not apply, and if it does so direct a declaration may be made under section 6 at any time after the publication of the notification under section 4 of the Act. Therefore, the enquiry under section 5A may not be held."