Case: Gujarat State Transport Corporation, Etc Vs. Valji Mulji Soneji and Others

These two appeals by certificate under article 133(1)(c) of the Constitution arise from a judgment rendered by the Gujarat High Court in Special Civil Application No. 720/68, being a petition under article 226 of the Constitution challenging the validity of a notification issued by the Government of Gujarat on 10th October 1967 under section 6 ofthe Land Acquisition Act, 1894 (Act for short). Civil Appeal No. 2316/69 is preferred by the original respondent No. 2 Gujarat State Transport Corporation, and the cognate Civil Appeal No. 1598/70 is preferred by the State of Gujarat, the first respondent in the petition. As both the appeals arise from the same proceedings and raise identical contentions they were heard together and are being disposed of by this common judgmentA notification under s. 4 of the Act was issued by the former Government of Bombay on 10th October 1952 notifying that final plots 41, 42 and 43 were likely to be needed for a public purpose, viz., State Transport. The respondents who are tenants of different parcels of land comprised in the aforementioned final plots objected to the proposed acquisition. Soon after filing the objections under s. 5A of the Act the respondents fild Civil Suit No. 1262/53 in the Court of Civil Judge, Second Division, Ahmedabad, for a declaration that the notification under s. 4 was illegal and ultra vires and for an injunction restraining the respondent State from proceeding with the acquisition of the lands in possession of the respondents. During the pendency of this suit the then Government of Bombay, after considering the report submitted under s. 5A, made a declaration under s. 6 as per the notification dated 14th August 1953 declaring, inter alia, that final plots 41, 42 and 43 were required for the purpose of State Transport. The respondents amended their plaint adding a relief for quashin g the notification under s. 6. The suit filed by the petitioners was dismissed by the trial court and first and second appeals did not meet with success. They carried the matter to this Court and succeeded as per judgment reported in Valjibhai Mul jibhai Soneji &Anr. v. The State of Bombay (now Gujarat) &Ors.(1). As per that judgment this Court decreed the plaintiffs suit which would imply that this Court quashed both notifications under ss. 4 and 6. Reading the judgment as a whole it appears that the validity of s. 4 notification was upheld and only the notification under s. 6 was struck down. In the mean time on the bifurcation of the erstwhile State of Bombay these land acquisition proceedings came within the cognizance of Government of Gujarat and when the State Government became aware some where in 1965 about the error in the decree, Review Applications Nos. 11 and 12 of 1965 were made for correcting the decree. This Court granted the application s and modified the decree on 13th September 1965. The Government taking its clue from the judgment of this Court which invalidated s. 6 notification on the ground that the acquisition having been made for the benefit of a Corporation, though fo r public purpose, is bad because no part of the compensation is to come out of the public revenue and provisions of Part VII of the Land Acquisition Act have not been complied with, decided as per its letter dated 22nd August 1966 to contribute Re. 1/-, which was subsequently raised to Rs. 500/- towards payment of compensation. The Government, however, felt that as long time has elapsed since the earlier report under s. 5A was submitted by the Collector, a fresh enquiry should be made Accordingly the Additional Special Land Acquisition Officer issued a notice dated 1st August 1966 intimating to the respondents that if they so desired the may submit their further objections by or before 16th August 1966. Complying with this notice the respondents submitted further objections on 31st August 1966 and they were also given a personal hearing. After examining the report submitted by the enquiry officer the Government of Gujarat issued a notification under s. 6 on 10th October, 1967. The respondents questioned the validity and legality of this notification in the petition filed by them on 14th February, 1968.Respondents questioned the validity of the impugned s. 6 notification on the only ground that it was issued more than 15 years after the date of s. 4 notification and thus it had been issued after an unreasonable delay and it was illegal and void. While this was the only contention which found favour with the High Court, in reaching this conclusion the High Court, after taking note of the fact that there was no express provision in the Act requiring that the notification under s. 6 must be issued within a reasonable time after issue of s. 4 not ification, primarily relied upon the postulate that every statutory power must be exercised reasonably, a doctrine too finally entrenched in our jurisprudence to brook any refutation which would assist in raising the implication that s. 6 notificati on must follow within a reasonable time after issue of s. 4 notification. The Court also drew support from the scheme of ss. 4, 5A and 6 as well as the history of the legislation. On behalf of the appellants it was pointed out to the Hig h Court that in view of the provisions contained in sub-s. (2) of s. 4 of the Land Acquisition (Amendment and Validation) Act, 1967 (Amendment Act for short), as well as the proviso to s. 6(1) also introduced by the same amendment Act the situation as has arisen in this case is not likely to arise and the apprehended mischief is not likely to be committed in future and, therefore, the Court should not go in search of the fetters on the power of the Government to issu e s. 6 notification, in the absence of any express provision, by implication that statutory power must be exercised within a reasonable time. It was further submitted on their behalf that once the legislature has clearly permitted a thing to be done within the time specified in the statute it would be impermissible by a process of interpretation to reduce the statutory period by implying a further fetter on the power of the Government and that would be the effect if the contention on behalf of the respondents was accepted. In other words, as the legislature has now provided that in respect of a notification issued under s. 4 before the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967 , no declaration under s. 6 shall be made after the expiry of two years from the commencement of the aforesaid Ordinance, and further that in case of section 4 notification issued after the commencement of the Ordinance a statutory limit of three years is fixed within which declaration under s. 6 can be made, the apprehended arbitrary exercise of power is thwarted and the Court should not further restrict or curtail the power of the Government to issue notification under s. 6 within the time prescribed by the statute.The High Court was of the opinion that if the power to make a declaration under s. 6 is exercised after an unreasonable delay from the date on which notification under s. 4 is issued such exercies of power would b e invalid and accordingly struck down the notification under s. 6. Hence these two appeals.

Court's reasoning:
A combined reading of the provisions contained in sub-s. (2) of s. 4 with the one contained in the proviso to sub-s. (1) of s. 6 introduced by the Amendment Act would clearly put an end to the unsatisfactory situation which troubled the High Court in this case. In view of the statutory provision noticed herein the Government would be precluded fr om making a declaration under s. 6 after the expiry of a period of three years from the date of the issue of a notification under s. 4 which may be issued after the Amendment Act came into force. And in respect of those s. 4 notifications which we re issued perior to the commencement of the Ordinance hereinabove noted on 20th January 1967 any notification which is required to be issued under s. 6 must be made within a period of two years whereafter as a necessary corollary all s. 4 notifications issued prior to 20th January 1967 would stand exhausted and would not provide either a source or reservoir for issuing s. 6 notification. Consequently the mischief sought to be set at naught by the High Court by reading by necessary implication in the scheme of ss. 4, 5A and 6 the concept of exercise of statutory power within a reasonable time has been statutorily remedied. The apprehensions of the High Court that if not checkmated by implying that such statutory power must be exercised within a reasonable time to curb arbitrary exercise of power to the detriment of a citizen have been taken note of by the legislature and fully met. Absence of any decided case on the subject of which High Court took note cou ld not permit an inference as has been done by the High Court that in the absence of a decided case the legislature would not remedy the possible mischief. Legislature often does take note of a possible abuse of power by the executive and proceed to nip it in the bud by appropriate legislation and that has been done in this case. There is now no more possibility of a gap of more than three years between s. 4 and s. 6 notifications because any declaration made after the expiry of a period of three years from the date on which s. 4 notification is issued would be invalid as being beyond the prescribed period.These newly inserted provisions were brought to the notice of the High Court. Now, as pointed out earlier, the Ordinance came into force on 20th January 1967. The notification under s. 4 in this case was prior to the commencement of the Ordinance. Therefore, the provision contained in sub-s. (2) s. 4 of the 1967 Amendment Act would be directly attracted. The Government could, therefore make a declaration within a period of two years from 20th January 1967. The Government has in fact issued the impugned notification under s. 6 on 10th October 1967, i.e. within the period prescribed by the statuteTherefore, in this case it is difficult to agree with the High Court that there was an unreasonable delay in exercise of power and hence the exercise was either bad or invalid.The High Court by implication read a fetter on the power of the Government to issue s. 6 notification withi n a reasonable time after the issue of s. 4 notification after observing that there was no express provision that such power ought to be exercised within a reasonable time. In raising this implication the High Court took into account the postulate that every statutory power must be exercised reasonably and a reasonable exercise of power implies its exercise within a reasonable time. Coupled with it two other factors were taken into consideration such as the effect of issuing a s. 4 notification on the rights and obligations of the owner of the land whose land is proposed to be acquired; the right of the Government to unilaterally cancel s. 4 notification in the event of falling prices; history of legislation; and delayed issue of s. 6 notification would deny adequate compensation to the owner. But by the time the High Court examined this matter the legislature had already introduced a provision by which the power to issue s. 6 notification was to be exercised within the prescribed period of time. At that stage there hardly arose a question of a search of the fetter on the power of the Government ignoring to some extent the express statutory provision. Therefore, while appreciating the anxiety of the High Court we are of the opinion that once the legislature stepped in and prescribed a sort of period of limitation within which power to issue notification under s. 6 could be exercised it was not necessary to go in search of a further fetter on the power o f the Government by raising the implicationIt thus appears to be satisfactorily established that the impugned s. 6 notification was issued within the prescribed period introduced by the 1967 Amendment Act and, therefore, could not be struck down on the only ground that the power to issue second s. 6 notification was exercised after an unreasonable and unexplained delay. This being the only infirmity found by the High Court to which we are not able to subscribe, it must be held t hat the second s. 6 notification dated 10th October 1967 is valid and legal.