HANSRAJ H. JAIN

STATE OF MAHARASHTRA AND ORS.

JULY 14, 1993

[K. JAYACHANDRA REDDY AND G.N. RAY, JJ.]

Land Acquisition Act, 1894:

Sections 4, 6, l JA-Land acquisition-Acquisition of huge tracts of C land for setting up township of New Bombay-Delay in acquisition proceedings-Effect of-Held, proceedings completed within time frame under Section II-A cannot be negatived on ground of inordinate delay even though when acquisition started there was no time frame for completing the same-Directions for allotting alternate sites to even those land owners whose petitions had earlier been dismissed by this Cowt.

D The respondent State issued notices under Section 4 of the Land Acquisition Act, 1894 between February 1968 and February 1970 in order to acquire huge tracts of land, covering 86 villages adjoining the city of Bombay for the purpose of setting up a new township to be known as New E . Bombay. Declarations under Section 6 of the Act were issued in 1971 and

1972. The acquisition proceedings were concluded by giving awards in 1985 and 1986. Validity of the acquisition was challenged y filing several writ petitions which were dismissed by the High Court. The land owners filed the appeal~ by special leave.

F The appellants contended that (1) the acquisition proceedings were invalid on account of the inordinate delay in completing th& proceedings, and the same could not be brought to life by making award within the stipulated time with the help of Section 11-A of the Act; (2) the purported acquisition proceedings were a colourable device in order to peg the price G of the land as prevailing on the date of notification and were initiated without framing a scheme or plan and without considering the actual requirement; (3) non-exclusion of land comprising Gaothan, houses contiguous thereto and hamlets containing not less than ten households from acquisition proceedings as per avowed policy of the Government was illegal and void and; (4) in the event of the acquisition proceedings being held as H valid, directions be issued for allotment o{ alternative plots as per the 216

H.H.JAIN v. STATEOFMAHARASHTRA 217

scheme formulated by the State Government in 1976 so that no effect to A acquisition should be given without making the plots available to the affected parties.

Dismissing the appeals, this Court

HELD: 1.1. The acquisition proceedings were not ma/a fide or invalid B despite the lamentable delay caused in completing the same. The area proposed to be developed into New Bombay is a very large area and the lands appertained to about 86 villages. It is reasonably expected that substantial time would be required for detailed planning for the develop ment of the area. Besides, about 25000 objection petitions had to be C disposed of against the proposed acquisition. In a project of this magnitude, substantial time is required to complete the acquisition proceedings. [231-H; 232-A; 233-A-B)

Aflatoon and Ors. v. Lt. Governor of Delhi and Ors., [1975) 1 SCR 802, relied on.

1.2. In view of the provisions of Section 11-A of the Land Acquisition Act it cannot be said that the acquisition proceedings cannot be completed within time frame under the Section even thought when acquisition proceedings were started, there was no time frame for competing the same.

Acquisition proceedings completed within the time frame under Section E 11-A cannot be negatived on the ground of inordinate delay.

[233-D-E; 234-B]

Kaliyappan v. State of Kera/a & Ors., [1989) 1 SCC 113 and Gujarat State Corporation v. Valiji Mulji Soneji and Ors., [1973) SCR 905, relied on.

2.1. It cannot be said that there was no planning for development of acquired area and the acquisition proceedings were intitiated casually.

Goverment's decision to set up the new township by acquiring the land appertaining to 86 villages was based on reports of expert committees. In G order to develop the huge urban complex the Government brought into force the Maharashtra Regional and Town Planning Act, 1966, and established 'City and Industrial Development Corporation of Maharashtra Limited'. There is no manner of doubt that lot of deliberations were made by expert bodies before taking the decision to set up such a huge urban complex. [231-C-E] H

A State of Tamil Nadu & Ors. v. A. Mohammad Yousef & Ors., [1991) 4 sec 224, inapplicable.

2.2. Once it comes to the knowledge of the people concerned that some areas are going to be developed into a new township close to the city known as Greater Bombay, the prices of lands in those areas start increas- B iog and the land speculators make all efforts in acquiring the lands in those areas so as to make substantial profit in the business of real estate.

In the circumstances, it was necessary to issue notification under Section 4 of the Land Acquisition Act so as to discourage the land speculators in the area and to make the acquisition proceedings and the scheme of new C township economically viable. [231-F HJ

2.3. There is no firm foundation for coming to the conclusion that . the acquisition proceedings had been initiated casually without any precise, objective and initiation of the proceedings by issuing notifications UDder' D Section 4 of the Land Acquisition Act was made with the sole intention to peg down the prices for acquisition in remote future, thereby causing loss and injury to the affected land owners. [232-G-H; 233A]

Khadim Hussain v. Union of India & Ors., [1976) 3 SCR 1; Satyam Cooperative Housing Society Ltd. v. Calcutta Improvement Trnst and Ors., E' AIR (1989) Calcutta 263; Radhey Shyam Gupta and Ors., 'v. State of Haryana, AIR (1982) Punjab and Haryana 519 (F.B.) and P. Appalamurthy and Ors. v. State of Andhra Pradesh and Ors., AIR (1981) Andhra Pradesh 278, held inapplicable.

3. So far as the acquisition of lands comprising Gaothan and hamlets against the avowed policy decision of the Government is concerned, there is a serious dispute of the factual existence of Gaothan and hamlets. }t, being a disputed question of fact cannot be decided in the instant proceedings. [234-C-D]

1.4. In view of the statement on behalf of the respondents that the policy decision of the Government to offer alternative sites to the affected land owners will be faithfully implemented, it is reasonably believed that such policy decision should be implemoted properly so that the affected _ land owners do not suffer umnertited hardship for imporper implementa- H tion of the policy decision. [234-E-G]

H.H.JAIN v. STATE OF MAHARASHTRA 219

4.2. The authorities concerned are directed to offer the alternate site A as per the scheme framed by the Government in 1976 to the affected land owners on the basis of the actual cost of deveopment by charging the cost of the acquisition and the development charges and no more. Such directions is required to be made particularly in view of the fact that acquisition proceedings bad been pending for a number of years, as a result of which the amount of compensation for the acquisition being referable to the period when notices under Section 4 of the Land Acquisition Act were issued, became insignificant and it is reasonably apprehended that unless

the land by way of alternative site as per the. scheme is offered to the affected land owners at a subsidised rate, it will not be possible for the land owners to take sncb allotment by paying usual price intended to be C charged from them and the offer of alternative site will for all practical purposes will be illusory; and many of such land owners would be exposed t¥erious prejudices. [235-D, }'-H; 236-AJ

State of U.P. v. Smt. Pista Devi and Ors., [1986) 4 SCC 251, relied on. D

5. The petitioners in special leave petitions including the review petitions which bad been dismissed earlier should also be entitled to the directions contained in the instant judgment despite the fact that such special leave petitions and review petitions stood dismissed. [236-BJ E CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3225 of 1993.

From the Judgment and Order dated 9.9.1992 of the Bombay High Court in Writ Petition.No. 1750 of 1986.

WITH

Civil Appeal Nos. 3226-50 of 1993.

G. Ramaswamy, AK. Ganguli, U.R. Lalit, V.N. Ganpule and AB.

Rohtagi; R.N. Karaojawala, AM. Khanwilkar and V.D. Khanna for the G Appellant.

K.T.S. Tulsi, Addi. Solicitor General, K. Madhava Reddy, S.M.

Jadhav and A.S. Bhasme for the Respondents. ,.

The Judgment of the Court was delivered by H

A G.N. RAY, J. Lea".e granted in all these special leave petitions and the learned counsels appearing for the respective parties made submissions. Since all these matters relate to common questions of law and fact, the matter were heard analogously and are disposed of by this 'common judgment. All these matters arise out of the judgment passed by the B Division Bench of the Bombay High Court dismissing the Writ Petitions

moved before the said Higb Court inter a/ia challenging the validity of acquisition of large tracts of land adjoining the city of Bombay for the purpose of setting up a new township to be known as New Bombay. The State of Maharashtra issued notices under Section 4 of the Land Acquisition Act between February, 1968 and February, 1970 for the purpose of C acquiring huge tracts of lands covering 86 villages in Trans Harbour, Panvel

and Trans Thane Creek area for the purpose of planned development and utilisation of the said lands for industrial, commercial and residential purposes. Declarations under Section 6 of the Land Acquisition Act were also issued in 1971 and 1972. The acquisition proceedings were, however, D concluded after a long lapse of time by giving awards in 1985 and 1986.

Mr. G. Ramaswamy has appeared for the appellants in the appeal arising out of special leave petition Nos. 13719 and 13459 of 1992. Mr. U.

Lalit has appeared for the appellants in the appeal arising out of Special leave petition No. 14710 of 1992. Mr. AK. Ganguli has appeared in the E apFal arising out of special leave petition No. 15359 of 1992. Mr. Ganpule has appeared for the appellants in the rest of the appeals. As all these matters ar~ disposed of by a common judgment, it is not proposed to refer individual arguments raised by the learned counsels separately. The arguments advanced by the learned counsels for the appellants are to the F following effect:

(1) There has been inordinate delay in completion of the acquisition proceedings and such inordinate delay vitiates the acquisition proceedings and the awards made therein.

(2) The purported acquisition proceedings are clearly a colourable device and should be struck down in view of the fact that the sole object of notification issued under Section 4 covering large tracts of lands in 86 villages in 1968 and 1970 was to peg the price of the land as prevailing on the said date of the notification without having regard to the actual require- H men! of such land.

H.H.JAIN v.STATEOFMAHARASHTRA[G.N.RAY, J.] 221

(3) Acquisition proceedings sought to be initiated without framing a A Scheme or plan for fnlfilment of the stated object were premature and liable to be quashed.

( 4) Lands comprising Gaothan, as shown in village records, houses contiguous to existing gaothan and hamlets containing not less than ten households were to be excluded from acquisition proceedings as per the avowed policy of the Government and purported acquisition of the land comprising gaothans and hamlets, in any event, must be held illegal and void.

(5) Even if it is held that acquisition proceedings were valid, suitable C directions sh'.Juld be given for allotment of alternative plots as per the scheme formulated in 1966 so that no effect of acquisition should be given without making the plots available to the affected parties.

Coming to the contention of inordinate delay in completing the acquisition proceedings thereby rendering acquisition proceedings invalid, D the learned counsels have submitted that the Government of Maharashtra was entirely responsible for the delay in completing the acquisition proceedings. The acquiring authority miserably failed to explain the long delay in completing the acquisition proceedings. Under such circumstan ces, in the absence of any valid explanation for such inordinate delay, E particularly in the absence of any statutory permission or restrain against passing of the awards, the exercise of power to acquire lands according to convenience and caprices of the concerned authorities, becomes unreasonable and unfair. Every public authority ind to act reasonably and fairly in exercise of power and arbitrary andcapricious action should not be countenanced by law courts more so, when such arbitrary and F unreasonable exercise of power clearly causes pr.ejudice and loss to the citizens. It iS not open for the State to contend that it will keep the notifications issued under Section 4 of tIJe Land Acquisition Act alive for years together and then complete the acquisition proceedings according to its own pleasure and pass awards at convenient and opportune time. Such G contention is alien to tjte scheme formulated under the Land Acquisition Act.

Referring to Section ll(A) of the Land Acquisition Act, the learned counsels for the appellants very strongly contende!l that proviso to Section ll(A) merely enables the acquiring authority to award within a time H

A frame in a case where the declaration had already been published before the commencement of the amending Act, but the proviso to Section ll(A) should not be read as validating the proceedings which had already become invalid because of initiation of a stale proceeding and arbitrary and colourable exercise of power. It has been contended by the learned coun- B sels that acquisition proceedings which had become invalid due to inordinate delay could not be brought to life merely for making award within the stipulated time as envisaged by Section ll(A) of the Land Acquisition Act. Proviso to Section ll(A) being an enabling provision only authorises the acquiring authority to complete the acquisition proceedings within the time mentioned in Section ll(A), if the acquisition proceedings is other- C wise not invalid in view of the antecedent facts.

Coming to the second contention that the purported acqms1t1on proceeding is a colourable device, it has been very strongly contended that from the facts disclosed by the State Government itself, it is evident that D the sole object of notifications issued under Section 4 of the Land Acquisition Act covering large tracts of lands in 86 villages as far back as in 1968 and 1970 was to peg the price of the lands as was prevailing on the date of the said notifications without having regard to the actual requirement of such lands. It has been contended that the facts disclosed reveal that the government did not arrage for the funds neccessary for acquiring such E large extent of land. It is quite apparent and evident that notifications under Section 4 were issued for the purpose of pegging down the price of the land on a likely future requirement. Such action being highly reprehensive, unfair and unjust must be held to be invalid thereby invalidating the entire acquisition proceedings. In support of this contention reliance has F been made to the decision of this Court in Khadim Hussain v. Union of India & Ors., (1976] 3 SCR 1, Satyam Cooperative Housing Society Ltd. v.

Calcutta Improvement Trnst and Ors., AIR (1989) Calcutta 263, Radhey Shaym Gupta and Ors. v. State of Haryana, AIR (1982) Punjab and Haryana 519 (F.B.) and P. Appalamurthy and Ors., v. State of Andhra Pradesh and Ors., AIR (1981) Andhra Pradesh 278.

The learned counsels have also contended that on the score of inordinate delay in moving the Writ Petitions for challenging the acquisition proceedings, the Bombay High Court had refused to interfere in the Writ Petitions moved at a belated stage. The learned counsels have con- H tended that such view, in the facts of the case, was clearly erroneous. The ·

H.H.JAIN v.STATEOFMAHARASHTRA[G.N.RAY, J,] 223

delay in approaching the writ Court is not by itself fatal in all cases. There A is no law of limitation by which a person is obliged to approach the writ Court within a particular time. Laches arising out a delay is one of the considerations which must weigh with the Court in exercise of its discretionary power under Article 226 of the Constitution of India. In the instant cases, the State Government and acquiring authorities were entirly respon- B sible for the delay in concluding the acquisition proceedings without any proper scheme and arrangement for funds for making payment for acquired lands. The acquisition proceedings were initiated between 1%8 and 1970 with the sole object of acquiring the lands on the basis of the price prevailing at the. time the notifications issued under Section 4 of the Land Acquisition Act.

The learned counsels haV'e contended that since the cause of action in these cases sprang from the inordinate delay on the part of the State Government and malafide and colourable exercise of power, the question of delay on the part of the appellants in not challenging the initiation notice I: or the declaration within a reasonable time or at all should not be a ground for refusing the relief asked for by the appellants. Where the cause of action itself stems wholly or .in part from the allegations of unexplained delay and procastination of the 'state, it can hardly lie in the mouth of the State of make grievance thereof.

Coming to the third contention for challenging the acquisition proceedings without framing a Scheme or plan for fulfilment of stated object, it has been contended by the learned counsels that such acquisition proceedings were premature and liable to be quashed. It was evi, dent from

the disclosed facts that the purported acquisition proceedings were for the F planned development and utilisation of the said lands in the Trans Harbour, Panvel and Trans Thane Creek area for industrial, commercial and residential purposes. It is contended that a plan for the said purpose had never existed either before or at time when the notifications were issued under Section 4 of the Act and the plan was prepared for the first time in

1985. Therefore, when the notifications under Section 4 were issued for the G - so called planned development and utilisation of the lands, the object of the planned development was conspicuously absent and the entire proceedings must be held to be bad, illegal and ma/afide. In this connection, reliance has been made to the decision 9f this Court in State of Tamil Nadu & Ors. v. A. Mohammad Yvusef and others, [1991) 4 SCC 224.

A On the question of invalidity of the acquisition proceedings in so far as the lands comprising Gaothan as shown in village records, and houses contiguous to existing gaothan and hamlets containing not less than ten households are concerned, it has been contended by the learned counsels for the appellants that the Government of Maharashtra, General Ad- B ministration Department vide its Circular letter No. LAO/MC /1070/U

dated April 20, 1971 laid down its policy that in all acquisition proceedings, areas which have been shown as Gaothan in the village records together with all houses which are contiguous to the existing Gaothan and also of hamlets consisting of not less than ten households which have not been C shown in the village records as Gaothan but shown as such (cluster of houses) are to be excluded from the acquistion proceedings. Although, there had not been any change in the'said policy and in fact it is the case of the government that the said policy is being given effect to, yet in so far as the present acquisitiOn Proceedings are concerned, it is the positive grievance of the appellants that the said policy is not being fully imple- D mented. The learned counsels for the appellants have submitted that this Court should give positive direction for implementation of the said scheme in toto so that injustice is not meted out to affected persons.

On the question of allotment of alternative plots as formulated in the E scheme in 1976, the learned counsels for the appellants have submitted that the State Government had formulated a scheme in 1976 wherein all persons whose lands are acquired compulsorily are provided with alternative plot of land to the extent of 10% of the land so acquired subject to maximum of a plot size of 500 sq. mtrs. It is contended that the said scheme does F not do full justice to the owners of the lands many of whom are solely dependent on the acquired land for their livelihood. Under the scheme; out of the said 10% of the land to be allo.tted, 50% could be utilised by the allottee concerned and the rest 50% goes to the common pool for the purpose of roads and other infrastructure. It has been contended that under the impugned awards, the land owners have been awarded a meagre G sum of Rs.4 per sq. mtr. whereas while allotting plots to the land owners under the said scheme they are asked to pay at the market rate charged from other commercial organisation i.e. @ Rs.13,200 per sq. mtr. This is per se arbitrary and unreasonable and is liable to be declared as such. In this connection reference has been made to a decision of this Court in State H of UP. v. Smt. Pista Devi and Others, [1986] 4 SCC 251. Relying on the sajd_

H.H.JAIN v. STATEOFMAHARASHTRA[G.N. RAY, J.J 225

decision it has been submitted by the learned counsels that since the lands A are required for providing residential accun1mo<lation for others, the persons whose lands have been acquired and are being appropriated on account of the acquisition proceedings, would be eligible for relief in the hands of Development Authorities. The appellants, therefore, could at the most be asked to pay for the plot to be allotted to them under the said scheme covering the cost of acquisition and development charges and no more. It has been submitted by the learned counsels that a clear direction

to this effect should be given by this Court in the interest of justice.

The learned counsels have also submitted that some of the similar special leave petitions have been dismissed by this Court earlier and in one C case even a Review Petition was also di lllissed. As the relevant submissions could not be made before this Court when the said special leave petitions or the Rcveiw Petition were dismissed, in the interest of justice, this Court should also give directions that the appellants in those special leave petitions since dismissed, should also get similar reliefs as in these cases and the dismissal of the said special leave petitions should not stand D in the way of giving proper relief to .which the said appellants were entitled to from the apex Court.

Mr. K.T.S. Tulsi, learned Additional Solicitor General, appearing for the respondents in these cases has submitted that the Bombay High Court E though held that the Writ Petitions were liable to be dismissed on the ground of !aches of inordinate delay, it had examined all the questions raised before the Court on merits and the Writ Petitions were also dismissed on merits by giving cogent reasons. In the instant cases, the notificaitons under Section 4 of the Land Acquisition Act were issued between 1968 and 1970 and the notifications under Section 6 of the Land F Acquisition Act were made in 1971 and 1972. The Writ Petitions were moved only in Octorber 1985. The acquisition proceedings were sought to be challenged in 1985 after a period over 15 years. The learned solicitor has submitted that the delay may not be fatal in all cases but in the instant gases, this inordinate delay has become fatal. If the appellants had moved G the Writ Petitions in appropriate time, !aches even if any, on the part of the acquiring authorities could have been rectified. The appellants accepted the notifications and put up with the acquisition proceedings for about 15 years and only in order to get higher compensation in the event the acquisition proceedings are struck down and fresh proceedings to be initiated, the Writ Petitions were moved at a belated stage without any H

A justifications whatsoever. In this connection, strong reliance was made by the learned Solicitor in the decision of this Court in the case of Aflatoon and Otlre1J v. Lt. Govemor of Delhi and Others, [1975) 1 SCR 802. In this case the acquisition of large area for planned development of Delhi was challenged on the ground that prior to issuance of the notifications, no Master Plan has been drawn up and that the notifications did not spell out B.1.the actual use for various parcels of lands being acquired. This Court while

"" rejecting the contention held that acquisition generally proceeds development and that the petitioner could not be allowed to challenge the validity of notifications on these grounds after a period of 12 years. It was held that the Court would be puting a premium on dilatory tactics of the land owners C who choose to sit on the fence and allow the Government to complete acquisition proceedings.

The learned Solicitor .has contended that the principal ground of attack of the appellants against the impugned notifications is that the notifications are vague and lacking in material particulars. It has also been D cotended that there was no plan for utilisation of the acquired land at the time of issuance of the notifications and the notifications were issued nialafide merely to peg down the prices to the detrirnenJ of the interest of the land owners.

E The learned Solicitor has submitted that the Bombijy High Court has taken into consideration such contention and has indicated the facts in detail that preceded the issuance of the notifications under Section 4 of the Act. It appears from the impugned judgment of the Bombay High Court that the Government of Maharashtra in the year 1966 appointed a F Committee under the Chairmanship of Dr. D.P. Gadgil, the Director of the Gokhale Institute of Politics and the Economics at Poona and subsequently holding the post of Deputy Chairman of Planning Commission, to examine the requisite steps to be taken to meet the growing congestion in Greater Bombay. Based on the recommendations of such Co1nmittee1 the Government brought into force the Maharashtra Reonal and Town G Planning Act, 1966, (hereinafter referred to as M.R.T.P. Act) and such, act came into operation with effect from J a1mary 11, 1967. The legislation was enacted to make provisions for planning the development and use of land in regions established for the purpose and to make better provision for the. preparation of development plans with a view to ensuring that town plan- H ning schemes are made in a proper rnanner and their execution is made

H.H.JAIN v. STATEOFMAHARASHTRA[G.N. RAY, J.] 227

effective.

In the year 1967 the State Government appointed another Committee headed by Shri L.G. Rajwade, I.C.S., to submit a report in respect of difficulties faced by major , metropolitan cities like Bombay in view of urbanisations, migration of people to the metropolis and deterioration in conditions of sanitation, houseing, law and order etc. Rajwade Committee B recommended regional plans by accepting the suggestions made earlier by Gadgil Committee. Pursuant to the Report of the Rajwade Committee, the State Government constituted Regional Planning Boards for three major

regions of Bombay, Poona and Nagpur. The Bombay Metropolitan exercise and after consideration of various proposals, recommended that to tackle C and prevent further deterioration of Greater Bc.nbay, some metropolitan planning must be undertaken and the fresh approach should be brought on future expansions. The Planning Board noticed that development of large metro centres would be required and such metro centres should be set up on either side of the Panvel Creek, the Northern portion between Thane Creek and the Farmik Tunnel which area is commonly known as D 'Trans-Thane Creek Area' and the rest of the area in trans-harbour area comprising of Panvel Urban and Nhava-Shavan. The Government o( Maharashtra accepted the recommendations made by the Regional Plan- ning Board. In accordance with the powers conferred under Section 113 of M.R.T.P. Ac~ a Company known as 'City and Industrial Development E Corporation of Maharashtra Limited' (CIDCO) was constituted on May 16, 1970. The Corporation in order to set up new township to be known as "New Bombay" proposed to acquire large tracts of land adjoining the city of Bombay and the land covered by several \illages were proposed lo be acquired. Some of the lands were used as agricultural lands while there were residential structures on the other.

Mr. Solicitor has submitted that for the purpose of setting up a new township, large tracts of land were .require to be acquired. There was no dispute about the need for setting up a new township and Section 125 of

the M.R.T.P. Act, clearly provides that any land required for any new town G shall be deemed to be land needed for a public purpose. Mr. Solicitor has also contended that it is undoubtedly true that acquisition proceedings remained pending for a considerable long time but in the facts and circwnstances of the case, such delay in completing the acquisition proceedings was also ine\itably. The Government was required to acquire large H

A area of land and pay compensation to the holders of the land. The Government had taken decision to set up a new township and published notification and as a consequence of such planning for development the land value in the area started increasing. The Government had to take precaution to ensure that the development of the new township is not B fettered by speculative increase of prices in the land values and therefore published notification under Section 4 of the Land Acquisition Act covering a very large area. The awards could not be made quickly because various steps were required to be undertaken before making the award and also to make founds available for the payment of compensation. c Mr. Solicitor has subitted that in the aforesaid circumstances, it cannot be contended that without any definite .policy of establishing new township, a casual approach was taken to initiate acquisition proceedings at a premature stage only with the ole intention of pegging the price. He has submitted that il is quite evident that after considering the recammen- D dations of various expert bodies as indicated hereinbefore, a decision for establishing a new township had been taken and for the purpose of implementing the said scheme, notifications unden Section 4 of the Land Acquisition Act were issued.

E Mr. Solicitor has also contended that it could not be demonstrated

with any convincing _material that the acquiring authority was deliberately causing delay only for the purpose of pegging down the prices in a malafide manner. Accordingly, the decisions sought to be relied on that by the appellants are not applicable in the facts and circumstances of these cases.

Mr. Solicitor has also contended that the learned counsels for the appellants have contended that Section llA of the Land Acquisition Act only enables the acquiring authority to complete the acquisition proceedings after the amending Act, within the lime frame but such provision does not permit the acquring authority to take resort to a colourable exercise of G power by arbitrary and capricious action and unreasonable delay and !aches over the years. He has contended that factually there is no foundation that colourable or malafide exercise of power has been made in these cases. He has submitted that there had been no deliberate !aches and negligence in the instant cases and the High Court was fully satisfied about H the bonafide of the concerned authorities. It has been explained to the

' -(

fl.H.JAIN v. STATEOFMAHARASHTRA[G.N. RAY, J.] 229

satisfaction of the court that in such an extensive and delicate scheme, to A complete the proceedings comprising large tracts of lands appeartaining to 86 villages considerable time was bound to be taken. It has been submitted by the learned Solicitor that it is not the case that the awards were not made within the time frame under Section llA of the Act. The learned Solicitor has submitted that if the statute permits the acquiring authority to complete the acquisition .proceedings within the time frame and if the acquisition proceedings are completed within such time frame, it cannot be contended that the acqusition proceedings were pending as far back as from 1970 and hence they became stale and invalid thereby rendering the provision of Section llA inapplicable.

In this connection, the learned Solicitor has referred to a decision of this Court in Kaliyappan v. State of Kera/a and Others, [1989] 1 SCC 113.

It has been held by this Court in the said decision that it may not be correct to set aside acquisition or the ground of delay by applying its own standard

of speed and that it would be safer to rely upon the statute for guidance D as regards the maximum time that can be taken to make an award. This Court has also held that otherwise, varying standards may come to apply in different case even when the maximum time to two years as under the proviso has not been exceeded.

Mr. Solicitor has aJso referred to another decision of this Court in Gujarat State Corporation v. Valji Mulji Soneji and Others, [1973] SCR 905.

It has been held in the said decision that when the statute prescribes time

withi~ which a certain power can be exercised, the prescription of time inheres a belief that the nature and quantum of power and the manner in which it is to be exercised would consume at least that much time which the statute prescribes as reasonable. This Court, therefore, held that exercise of powr within that time could not be negatived on the ground of unreasonable delay. This Court has further held that in view of the history of legislation ii? the context of con1pensation to the owner after the legislature

has stepped in prescribing a sorl of period of limitation, it was not necessary to go in search of a further fetter on the power of the Government by raising G the question of delay by implication. (emphasis supplied)

Mr. Solicitor has submitted that in the instant cases, draft plan was prepared within one year of the notification under Section 6 of the Land Acquisition Act on the basis of extensive research and report of various H

A committees. More than 25,000 objections were received under Section 5 A from various land owners, which had to be considered and decided.

Similar situation was taken into consideration by this Court in Aflatoon 's case and the delay of twelve years was not considered fatal. In the special facts of the case, it must be held that there had not been any B deliberate !aches of negligence from which any inference of colourable exercise of power can be made. The decisions of the Calcutta, Andhra Pradesh and Punjab and Haryaila High Courts are therefore not applicable in the facts and circumstances nf these cases.

C Mr. Solicitor has also contended that pursuant to the policy adopted by the Government, the lands comprising Gaothan and hamlets had already been exempted from acquisition. The learned Solicitor has strongly disputed the correctness of the existence of alleged Gaothans and hamlets as contended by the appellanl,. The learned Solicitor has submitted that the contentions raised by the appellants about the existence of Gaothan is D factually incorrect, and the factual position can be amply demonstrated by referring to the correct maps.

The learned Solicitor has also submitted that the question of the land owners being entitled to alternative land is not denied by the respondents.

E It has been categorically stated by the learned Solicitor that the appellants will be entitled to the alternative sites as per the scheme prepared for the purpose of M.R.T.P. Act.

On the question of price of the alternative site, it has been submitted by the learned Solicitor that after acquisition, the lands in New Bombay F arc vested in the Corporation for development and disposal. All the costs incurred on the development are to be met by disposing the saleable land.

In the process, the Corporation has spent huge amounts on development of infrastructure in the form of roads, water, sewerage, electricity, transport etc. In the process of disposal of land, certain lands are required to be provided to the social institutions, project affected persons, economically G weaker sections and tower income groups at nominal and subsidise4 rate and the shortfall accruing from such. subsidised disposal has to be recovered by the sale of other lands viz. higher income group and commercial user. The commercial areas are sold by the Corporation by tender system and such areas draw much higher rate. Bnt the ratio of such H disposal at higher rate in the entire process is around 1 % only.

H.H.JAIN v.STATEOFMAHARASHTRA[G.N.R~Y, J.] 231

Mr. Solicitor has also submitted that these cases are connected A matters to special leave petition No. 14829 of 1992 Ragltunath Ghanekar v.

State of Maharashtra and Another, which was dismissed on December 16, 1992 by this Court and 15 other connected matters were also dismissed by this Court. This Court having accepted the correctness of the decision of the Bombay High Court dismissed the special leave petitions and also the Review Petition made in Special Leave Petition No. 14829 of 1992. Such rejection was made on a proper consideration of the merits of the case and no different decision need be made in these which should also be dismissed.

After giving our anxious consideration to the respective contentions C made by the learned counsels for the parties, it appears to us that on the basis of reports of the expert Comm; ttees as indicated hereinbefore, the Government took a decision to set up a new township by acquiring large tracts of lands appertaining to 86 villages in Trans Harbour, Panvel and Trans Thane Creek area. In order to develop such huge urban complex, D the M.R.T.P. Act was enacted and CIDCO was established. There is no manner of doubt that lot of deliberations were made by expert bodies before taking the decision to set up such huge urban complex to be known as New Bombay. It, therefore, cannot be contended with any seriousness that there was no planning for development of the acquired areas and the acquisition proceedings were initiated casually with the sole intention to peg do\<n the prices by issuing notification under Section 4 of the Land Acquisition Act for a future project. The learned Solicitor has made submissions by drawing the attention of the Court to the finding of the Bombay High Court in the Writ Petitions that in view of the planning for development of the areas comprising Trans Harbour, Panvel and Trans Thane Creek area, price of the land in those areas started increasing. There

is no difficulty in understanding the reason for such an increase in the prices because once it comes to the knowlege of the people concerned that some areas are going to be developed into a new township close to the city known as Greater Bombay, the land speculators will make all efforts in acquiring the lands in those areas so as to make substantial profit in the G business of real estate. In the aforesaid circumstances, it appears to us that there was necessity to issue notification under Section 4 of the Land Acquisition Act so as to discourage the lands speculators in the area and to make the acquisition proceedings and the scheme of new township economically viable. The area proposed to be developed into New Bombay H

232 'suPREME COURT REPORTS [1993] SUPP. 1 S.C.R.

A is admittedly a very large area and the lands appeartained to about 86 villages. It is reasonably expected that substantial time would be required for detailed planning for the development of the area. Besides, about 250CXJ objection petitions had to be disposed of against the proposed acquisition.

In a project of this magnitude, substantial time is required lo complete the B acquisition proceedings. Even then, we are not fully satisfied that the concerned authorities had acted with such promptitude as was required of them. We are rather in.clined to hold that even such a big and delicate scheme could have been given proper shape earlier and the acquisition proceedings in our view could have been completed earlier if there had been proper diligence and concerted efforts at different leavels. But simply C on account of the proverbial slow pace with which the pubic authorities move in this country, we are not inclined to hold that there had been deliberate !aches and utter pack of bona fide on the part of the acquiring authorities and the sole intention to initiate acquisition proceedings by issuing notification under Section 4 of the Land Acquisition Act was to peg D down the prices with a clear intention to sit over the matter for years just to deny to the land owners the reasonable price of the land. Such submission is not warranted on any firm foundation and the Bombay High Court has also not accepted such contention.

Before the amendment of Land Acquisition Act, there was no ti'lne E limit to complete the land acquisition proceedings. The acquiring authorities Were free to initiate the land acquisition proceedings in any manner they chose and were permitted to sit over such proceedings without any just cause for years together so as to deprive of the land owr1ers the reasonable price of the land. There is no manner of doubt that the public p authorities and the Government are bound to act reasonably and fairly and each action of such authorities must pass the test of reasonableness and precisely for this reason, even when there wa, s no time limit for completing the acquisition proceedings from the date of initiation of the proceedings by issuing notificaion under Section 4 of the Land Acquisition Act, the Court had, in appropriate cases, looked into the reasonableness of the G action undertaken by the acquiring authority and whenever action taken was found to be lacking in bonafide and made in colourable exercise of the power, the Court did not hesitate to strike down unfair and unjust acquisition proceedings. We have, however1 indicated that in the instant cases, there is no firm foundation for coming to the conclusion that the acquisi- H tion proceedings had been initiated casually without any precise objective

H.H.JAIN v. STATEOFMAHARASHTRA[G.N.RAY, J.] 233

and initiation of the acquisition proceedings by issuing notifications under A Section 4 of the Land Acquisition Act was made with the sole intention to peg down the prices for acquisition in remote future, thereby causing loss and \njury to the affected land owners. Despite lamentable delay in complting the acquisition proceedings in the instant cases, we are not inclined to hold that such acquisition proceedings were otherwise ma/afidc or invalid for the reasons indicated hereinbefore and the decisions cited by the learned counsels for the parties for striking down the acquisition proceedings are not applicable in the facts and circumstnaces of the cases.

The contentions of the learned counsel for the appellants that although the proviso to Section llA of the Land Acquisition Act enables the C acquiring authority to complete the acquisition proceedings within two years from the date of amendment of the said Section llA, such provision should not come in aid of the acquiring authority to complete these acquisition proceedings within the said extended time limit because such proceedings had already become stale and invalid on account of inordinate D delay and negligence and also on account of colourable exercise of power and malafide action. We have not accepted the case of malafide, action and colourable exercise of power for the reasons indicated. It also appears to us that in view of the provisions of Section llA of the Land Acquisition Act, it cannot be contended that the acquisition proceedings cannot be completed within time frame under Section llA even though when acquisi- E lion proceedings were initiated, there was no time frame for completing the acquisition proceedings. In our view the learned Solicitor is justified in contending by referring to the decision of this Court in Kalliyappan 's case

(supra) and also the decision of this Court is Gujarat C01porations case

(supra) that the Court will not be justified to set aside acquisition proceed- F ings on account of delay even when acquisition proceedings are completed within the time frame under Section llA and that it will be safer to rely upon the statute for guidance as regards the maximum time that can be taken to make an award. This Court has also indicated that when the statute prescribes time limit within which a certain power can be exercised, the prescription of time inheres a belief that the nature and quantum of G power and the manner in which it is to be exercised would consume at least that much time which the statute prescribes as reasonable.

In Gujarat State Corporation's case, this Court has indicated that in view of the history of legislation in the context of compensation to the H

A owner after the legislature has stepped in prescribing a sort of period of limitation, it was not necessary to go in search of a further fetter on the power of the Government by raising the question of delay by implication.

We, therefore, hold that acquisition proceedings completed within the time frame under Section llA cannot be negatived on the ground of inordinate B delay. We may only add here that we have not accepted the contention of the petitioners that the acquisition proceedings were initially tainted with malafide arnl deliberate !aches and negligence thereby rendering such proceedings invalid before the amendment of the Act by incorporating Section 11A. Hence, the contention that the proceedings which had already become invalid could not be validated by resorting to Section llA of the C Land Acquisition Act cannot be accepted.

So far as the acquisiton of lands comprising Gaothan and hamlets against the avowed policy decision of the Government is concerned, it appears that there is a serious dispute on the factual existence of Gaothan D and hamlets. The learned Solicitor has very strongly contended that the Government respected its policy in not acquiring Gaothan areas and hamlets as indicated in the policy decision and the contention that such areas are being acquired despite the policy decision is not factually correct.

Such contention being a disputed question of fact cannot be decided in these proceedings and we may also indicate that the Bombay High Court E has also not accepted such contention of the petitioners.

It has been submitted by the learned counsels for the appellants that although there is a policy decision of the Government of Maharashtra to offer alternative sites to the affected land owners, such policy is not being F faithfully implemented and this Court should give suitable direction so that such policy is implemented in letter and spirit. We may indicate here that the learned Solicitor has categorically submitted before us that such policy decision will he faithfully implemented by the Government and there is no occasion of any apprehension on the part of the affected land owners. We, therefore, reasonably believe that such policy decision should be imple- G mentctl properly so that the affected land owners do not suffer unmerited hardship for imporper implementation of the policy decision.

On the question of price of the alternative site, the learned Solicitor has submitted that after acquisition the lands in New Bombay have been H vested in CIDCO for development and disposal. All the costs incurred on

H.H.JAIN v. STATEOFMAHARASHTRA[G.N. RAY, J.j 235

the development arc to be met by disposing the saleable land. In the A process, the Corporation has to spend huge amouns on development of infrastructure in the form of roads, water supply, sewerage, electricity, transport etc. For the purpose of disposal of saleable land, certain lands are required to be provided to the social institutions, project affected persons, economically weaker sections and lowe~ income groups at nomina1 and subsidised rate and the shortfall accruing from such subsidised disposal has to be recovered by the sale of other lands. The commercial areas are sold by the Corporation by tencfer system and such areas draw much higher rate. The learned Solicitor has submitted before us that unfortunately the ratio of such disposal at higher rate in the entire proces is around 1 % only. He has, however, submitted that the concerned authorities are keen to give relief to the affected land owners by charging reasonable price

as far as practicably. The learned counsels for the appellants have, however, submitted that although the award for acquiring land was made at Rs.4 per sq. mtr., the developed lands for alternative sites for building houses for the affected land owners are being offered @ Rs.13,200 sq. mtr. D

It is not difficult to imagine in the facts and circumstances of the case that many of the persons from whom lands have been acquired are persons without houses and if they are thrown out of their lands, they would be exposed to serious prejudice. This Court has considered such problem in the case of Smt. Pista Devi (supra) and it was indicated in the said decision E that although Section 21(2) of the Delhi Development Act was not applicable to the acquisition proceedings involved in that case, the provision having contained a wholesome principles, should be followed by all Development Authorities throughout the country when they acquire large tracts of land for the purposes of land development in urban areas.

We, therefore, direct the concerned authorities to offer the alternative site as per the scheme framed in 1976 referred to hereinbefore to the affected land owne" on the ba, is of the actual cost of development by charging the cost of the acquisition and the development charges and no more. Such direction, we feel, is required to be made particularly in view G

of the fact that acquisition proceedings had been pending for a number of years, as a result of which the amount of compensation for the acquisition being referable to the period when notices under Section 4 of the Land Acquisition Act were issued, became insignificent and it is reasonably apprehended that unless the land by way of alternative site as per the H

A scheme is offered to the affected land owners at a subsidised rate as indicated hereinbefore, it will not be possible for the land owners to take such allotment by paying usual prices intended to be charged from them and tlfe offer of plternativc site will for all practical purposes be illusory.

All the above appeals are disposed of accordingly. We further direct B thatthe petitioners in special leave petitions including the Review Petition

which had been dismissed eadier should also be entitled to the directions contained in this judgment do:_sjlite the fact that such special leave petitions and the Review Petition stood dismissed. There will be no order, as to costs in all theses appeals.

R.P.

Appeals disposed))!.