Judgment Case ID: 998

Judgment:
Appeal No. 4 of 1960. Appeal by special leave from the Judgment and Order dated January 28	 1959 of the Punjab High Court in Letters Patent Appeal No. 52 of 1958 arising out of the Judgment and Order dated February 17	 1958 of the said High Court in Civil Writ Application No. 124 of 1957. C. B. Aggarwala	 Daya Swarup Mehra and R. section Gheba	 for the appellants. section M. Sikri	 Advocate General for the State of Punjab	 N.S. Bindra and D. Gupta	 for respondent No. 1. C.K. Daphtary	 Solicitor General of India and section N. Andley	 for Respondent No. 2. C.K. Daphtary	 Solicitor General of India and T.M. Sen	 for the Attorney General for India (Intervener). 1960. November 16. The Judgment of the Court was delivered by SINHA	 C. J. This appeal	 by special leave granted on May 29	 1959	 is directed against the decision of the Letters Patent Bench (G. D. Khosla	 C. J.	 and Dulat	 J.) dated January 28	 1959	 affirming that of the learned single Judge (Bishan Narain	 J.) dated February 17	 1958	 whereby he dismissed the 461 appellants ' Writ Petition under article 226 of the Constitution. It appears that the appellants are the owners of	 what is said to be	 agricultural land	 measuring about 86 bighas odd	 in village Munda Majra	 Tehsil Jagadhari	 in the district of Ambala. On October 27	 1954	 the Additional District Magistrate of Ambala ordered the land aforesaid to be requisitioned under the Punjab Requisitioning & Acquisition of Immoveable Property Act (XI of 1953) for the construction of houses by members of the Thapar Industries Co operative Housing Society Ltd.	 Yamuna Nagar. Possession of the land was taken on November 5	 1954. The appellants	 at once	 instituted a suit on November 14	 1954	 in the Court of the Subordinate Judge	 Jagadhari	 challenging the requisition proceedings. The suit was ultimately decreed by the Court on June 21	 1955	 and the possession of the property in question was restored to the petitioners. On May 27	 1955	 the first respondent	 i. e.	 the State of Punjab	 through the Secretary	 Labour Department	 issued a notification under section 4 of the Land Acquisition Act (1 of 1894) (which hereinafter will be referred to as the Act). The notification	 under section 4 is in these terms. "No. 4850 S LP 55/14144. Whereas it appears to the Governor of Punjab that land in the locality hereunder specified is likely to be needed by the Government for a public purpose	 namely	 for the construction of a Labour Colony under the Government sponsored Housing Scheme for the Industrial Workers of the Thapar Industrial Workers ' Co operative Housing Society Limited	 Jamna Nagar (District Ambala)	 it is hereby notified that the land described in the specifi cations below is likely to be required for the above purpose. This notification is made under the provisions of Section 4 read with section 17 of the Land Acquisition Act	 1894	 as amended by the Land Acquisition (Punjab Amendment) Act	 1953	 to all to whom it may concern and the Collector shall cause public notice of the substance of this notification to be given at convenient places in the said locality; 462 In exercise of the powers conferred by the aforesaid sections	 the Governor of the Punjab is pleased to authorise the President of the above said Society with the members and servants to enter upon and survey any land in the locality and do all other acts required or permitted by that section. Further in exercise of the powers conferred by sub section (4) of Section 17 of the said Act the Governor of Punjab is pleased to direct that	 on the grounds of urgency	 the provisions of Section 5(a) of the said Act	 shall not apply in regard to this Acquisition". Later	 the same day	 another notification	 under section 6 of the Act	 was issued. This notification	 under section 6	 states that it appeared to the Governor of Punjab that the land is required to be taken by Government for a public purpose	 namely	 for the construction of a Labour Colony under the Government sponsored Housing Scheme for the ' Industrial Workers of the Thapar Industrial Workers ' Co operative Housing Society Limited (which is the second respondent in this case). It also says that under the provisions of section 7 of the Act	 the Collector	 Ambala	 is directed to take order for the acquisition of the land. The Patwari effected delivery of possession of the lands in question to the second respondent on August 21	 1955. Even before the delivery of possession had been effected	 the appellants promptly instituted their suit on August 20	 1955	 in the Court of the Subordinate Judge Class 1	 Jagadhari	 for a perpetual injunction restraining the second respondent from entering upon or taking possession of the land in question	 or making any construction thereon. The trial Court dismissed the suit on June 25	 1956	 on the preliminary ground that the suit was not competent in the absence of a previous notice under section 59 of the Punjab Co operative Societies Act	 1955 (XIV of 1955). The appellants appealed to the Senior Sub Judge	 Ambala	 who dismissed their appeal	 upholding the decision of the trial Court that the notice was a condition precedent to the institution of the suit. Their second appeal was dismissed by the Punjab High Court on February 6	1957. During the pendency of the civil litigation aforesaid	 in spite of the fact that the second respondent had 463 obtained delivery of possession through Government agency	 by an Order of Injunction issued by the Court	 construction had been stayed. As soon as the High Court decided the suit in favour of the respondents	 the second respondent "started making huge constructions on the land in dispute in a very speedy manner"	 as alleged by the appellants in their petition under article 226 of the Constitution	 which they filed on February 13	 1957. From the High Court also	 they obtained similar Stay Orders whereby building operations were stopped. In their Writ Petition	 the appellants	 as petitioners in the High Court	 challenged the acquisition proceedings on a number of grounds	 of which it is only necessary to notice the one which has formed the subject matter of decision in the High Court	 namely	 that the proceedings were void for want of compliance with the procedure laid down in Chapter VII (mistake for Part VII) of the Act. It is not necessary to refer to the other contentions raised in the Writ Petition	 because it is common ground before us that the whole controversy must be determined by the answer to the question	 'whether or not the proceedings were vitiated by reason of the admitted fact that no proceedings under Part VII of the Act had been taken in making the acquisition '. The matter was heard	 in the first instance	 by Bishan Narain	 J. The learned Judge dismissed the petition	 holding that the acquisition was by the Government for a public purpose	 namely	 of construction of tenements for industrial workers	 under a schempeal against the order to the Collector of the district or such other officer as may	 by notification	 be authorised in this behalf by the State Government. 629 Section 6 imposes a restriction on the transport of agricultural cattle for slaughter and reads: "section 6. No person shall transport or offer for trans port or cause to be transported any agricultural cattle from any place within the State to any place outside the State	 for the purpose of its slaughter in contra. vention of the provisions of this Act or with the knowledge that it will be or is likely to be	 so slaugh tered. " Section 7 prohibits the sale	 purchase or disposal otherwise of certain kinds of animals. It reads . "section 7. No person shall purchase	 sell or otherwise dispose of or offer to purchase	 sell or otherwise dis pose of or cause to be purchased	 sold or otherwise disposed of cows	 calves of cows or calves of she buffaloes for slaughter or knowing or having reason to believe that such cattle shall be slaughtered. " Section 8 relates to possession of flesh of agricultu ral cattle and is in these terms: "section 8. Notwithstanding anything contained in any other law for the time being in force	 no person shall have in his possession flesh of any agricultural cattle slaughtered in contravention of the provisions of this Act. " Section 10 imposes apenalty for a contravention of section 4(l)(a) and section 11 imposes penalty for a contraven tion of any of the other provisions of the Act. On behalf of the petitioners it has been pointed out	 and rightly in our opinion	 that cl. (a) of sub section (2) of section 4 of the Act imposes an unreasonable restriction on the right of the petitioners. That clause in its first part lays down that the cattle (other than cows and calves) must be over 20 years of age and must also be unfit for work or breeding; and in the second part it says	 "or has become permanently incapacitated from work or breeding due to age	 injury	 deformity or an incurable disease. " It is a little difficult to understand why the two parts are juxtaposed in the section. In any view the restriction that the animal must be over 20 years of age and also unfit for work or breeding is an excessive or unreasonable restriction as we have 80 630 pointed out with regard to a similar provision in the Uttar Pradesh Act. The second part of the clause would not be open to any objection	 if it stood by it self. If	 however	 it has to be combined with the age limit mentioned in the first part of the clause	 it will again be open to the same objection; if the animal is to be over 20 years of age and also permanently in capacitated from work or breeding etc. 	then the age limit is really meaningless. Then	 the expression 'due to age ' in the second part of the clause also loses its meaning. It seems to us that cl. (a) of sub section (2) of section 4 of the Act as drafted is bad because it imposes a dis proportionate restriction on the slaughter of bulls	 bullocks and buffaloes it is a restriction excessive in nature and not in the interests of the general public. The test laid down is not merely permanent incapa city or unfitness for work or breeding but the test is something more than that	 a combination of age and unfitness ' Learned Counsel for the petitioners has plac ed before us an observation contained in a reply made by the Deputy Minister in the course of the debate on the Bill in the Madhya Pradesh Assembly (see Madhya Pradesh Assembly Proceedings	 Vol. 5 Serial No. 34 dated April 14	 1959	 page 3201). He said that the age fixed was very much higher than the one to which any animal survived. This observation has been placed before us not with a view to an interpre tation of the section	 but to show what opinion was held by the Deputy Minister as to the proper age limit. On behalf of the respondent State our atten tion has been drawn to a book called The Miracle of Life (Home Library Club) in which there is a state ment that oxen	 given good conditions	 live about 40 years. Our attention has also been drawn to certain extracts from a Hindi book called Godhan by Girish Chandra Chakravarti in which there are statements to the effect that cows and bullocks may live up to 20 or 25 years. This is an aspect of the case with which we have already dealt. The question before us is not the maximum age upto which bulls	 bullocks and buffaloes may live in rare cases. The question before us is what is their average longevity and at what age 631 they become useless. On this question we think that the opinion is almost unanimous	 and the opinion which the Deputy Minister expressed was not wrong. Section 5 in so far as it imposes a restriction as to the time for slaughter is again open to the same ob jection as has been discussed by us with regard to a similar provision in the Uttar Pradesh Act. A right of appeal is given to any person aggrieved by the order. In other words	 a member of the public	 if he feels aggrieved by the order granting a certificate for slaughter	 may prefer an appeal and hold up for a long time the slaughter of the animal. We have pointed out that for all practical purposes such a restriction will really put an end to the trade of the petitioners and we are unable to accept a restriction of this kind as a reasonable restriction within the meaning of cl. (6) of article 19 of the Constitution. Section 6 standing by itself	 we think	 is not open to any serious objection. It is ancillary in nature and tries to give effect to the provision of the Act prohibiting slaughter of cattle in contravention of the Act. Section 7 relates to the prohibition of sale	 purchase etc.	 of cows and calves and inasmuch as a total ban on the slaughter of cows and calves is valid	 no ob jection can be taken to section 7 of the Act. It merely seeks to effectuate the total ban on the slaughter of cows and calves (both of cows and she buffaloes). Sec tion 8 is also ancillary in character and if the other provisions are valid no objection can be taken to the provisions of section 8. Sections 10 and 11 impose penal e subsidised by the Government out of public funds; that Part VII of the Act had no application to the present proceedings	 and that	 therefore	 the noti fication under section 6 was not invalid. The appellants preferred an appeal	 under the Letters Patent. The Letters Patent Bench dismissed the appeal	 but for different reasons. After an examination of the precedents of the different High Courts	 bearing on the controversy in this case	 the Bench came to the conclusion	 which may better be expressed in its own words: "There is thus considerable authority for the 464 view advanced by the learned counsel for the appellants that compliance with the provisions of Part VII is obligatory in the case of all acquisitions for a company. In the present case the acquisition was undoubtedly for the benefit of a company. I have given this matter my most anxious consideration	 and	 with great respect to the learned Judges	 whose decisions have been noted above	 I find myself unable to subscribe to the views expressed by them. It seems to me that their views were coloured by the background of the provisions of the Constitution. Article 31 of the Constitution prohibits compulsory acquisition of property for anything except a public purpose. Therefore	 acquisition for anything which is not a public purpose cannot now be done compulsorily	 but it has never been disputed that before the Constitution came into force land could have been acquired compulsorily by Government for a purpose which was not public. There is nothing in the Land Acquisition Act to warrant the assumption that the embargo placed by Article 31 of the Constitution found place in the Act. It seems to me that the Land Acquisition Act contem plates two categories of acquisitions". After an examination of the provisions of the Act	 the High Court observed that the Land Acquisition Act came into force when there was no bar to compulsory acquisition for private purposes. Such a bar was only imposed	 for the first time	 by article 31 of the Constitution. After the Constitution came into force	 Part VII of the Act became redundant or null and void. But	 in its view	 the present acquisition proceedings were saved from all attack based on non compliance with the provisions of Part VII of the Act. The reason for this conclusion	 according to the High Court	 was that as the land was acquired for a public purpose	 there was no need to comply with the provisions of Part VII	 even though the Company is to bear all the expenses for the acquisition. It is manifest that the main point for determination in this appeal is: Whether or not the acquisition proceedings had been vitiated by reason of the admitted fact that there was no attempt made by the 465 Government to comply with the requirements of Part VII of the Act. It is equally clear that the Letters Patent Bench of the High Court was misled in its conclusions	 because all the provisions of article 31 of the Constitution had not been brought to their notice. It is not correct to say that Part VII of the Act had become redundant or null and void	 as suggested by the High Court	 because that Part provided for acquisition for a private purpose. As held by this Court in a recent decision	 in the case of Babu Barkaya Thakur vs The State of Bombay (1)	 the Act deals with two kinds of acquisitions: (1) for a public purpose	 at the cost of the Government	 and (2) for a purpose akin to such a purpose	 at the cost of a Company	 and to the latter class of acquisition	 the provisions of Part VII are attracted. It was further held in that case that acquisition of a site for building residential houses for industrial labour was a public purpose	 and that the Land Acquisition Act was immune from attack based on the provisions of article 31(2) of the Constitution	 in view of the provisions of cl. 5(a) of that Article	 which saved an existing law of the nature of the Act in question. As will presently appear	 the conclusion of the High Court is entirely correct	 but the process of reasoning by which it has reached that conclusion is erroneous. That process suffers from the initial error arising from the fact that the provisions of article 31(5) of the Constitution had not been brought to the notice of that Bench. If the Bench were cognizant of the true legal position that the Land Acquisition Act	 in its entirety	 including Part VII dealing with the acquisition of Land for Companies	 was not subject to any attack under article 31(2) of the Constitution	 it would not have based that conclusion on that ratio. Otherwise	 there would be no answer to the contention in which the appellants had persisted throughout the long course of litigation in which they have indulged in their vain effort to save the land from being used for the public purpose aforesaid. The Letters Patent Bench has also fallen (1) 59 466 into another error in assuming that "the compensation was paid in its entirety by the Company". It is better to clear the ground by showing that this assumption is not well founded in fact. In their Writ Petition	 as originally filed in the High Court	 it was not categorically stated by the appellants that the compensation in respect of the land in question was paid	 or was to be paid	 by the Company. It may be stated here	 by the way	 that it is common ground that the second respondent is a Company within the meaning of the Act	 being a registered society under the Co operative Societies Act. It is also common ground that the purpose for which the land was being acquired was for erecting residential quarters for industrial labour	 which had organised itself into the Co operative Housing Society	 the second respondent. It was only at a later stage of the proceedings in the High Court	 that is to say	 in the replication filed on behalf of the appellants to the Written Statement filed by the Government	 in answer to the appellant 's Writ Petition	 that	 for the first time	 it was alleged by the appellants that "the entire amount of compensation has been borne by the res pondent society". This allegation has not been either supported or countered by evidence on either side. But it has been pointed out by the learned single Judge that it was clear from the Government Housing Scheme that a substantial amount to be expended on this Scheme comes out of the Revenues	 in the form of subsidies and loans. It was stated at the Bar	 with reference to the terms and conditions of the Government Housing Scheme	 that 25% to 50% of the cost of land and structures to be built upon the land was to be advanced by Government out of public funds	 in the shape of subsidy and loan. It would	 thus	 appear that the High Court was not right in the assumption made as aforesaid. It is clear from the statement of facts on record that the respondent No. 2 is a 'Company '	 within the meaning of the Act; that the land is acquired for the. benefit of the Company	 and at its instance	 and that a large proportion of the compensation money was to 467 come out of public funds	 the other portion being supplied by the Company or its members. There is also no doubt that the structures to be made on the land would benefit the members of the Co operative Society. But	 the private benefit of a large number of industrial workers becomes public benefit within the meaning of the Land Acquisition Act. In this connection	 it may be mentioned that section 17 of the Act was amended by the Land Acquisition (Punjab Amendment) Act (11 of 1954) in these terms "17(2)(b). Whenever in the opinion of the Collector it becomes necessary to acquire the immediate possession of any land for the purpose of any library or educational institution or for the construction	 ex. tension or improvement of any building or other structure in any village for the common use of the inhabitants of such village	 or any godown for any society registered under the (II of 1912)	 or any dwelling house for the poor	 or the construction of labour colonies under a Government sponsored Housing Scheme	 or any irrigation tank	 irrigation or drainage channel	 or any well	 or any public road	 the Collector may	 immediately after the publication of the notice mentioned in sub section (1)	 and with the previous sanction of the appropriate Government enter upon and take possession of such land	 which shall thereupon vest absolutely in the Government free from all encumbrances". It will appear from the (amended) section 17(2)(b)	 quoted above	 that the construction of labour colonies	 under a Government sponsored Housing Scheme	 has been included in the category of 'works of public utility '. As already indicated	 even apart from the indication given by the (amended) section 17	 quoted above	 this Court has held	 in the recent decision (1) that building of residential quarters for industrial labour is public purpose. Hence	 even apart from the amended provisions of section 17	 it is clear on the authorities that the purpose for which the land was being acquired was a public purpose. (1) 468 Having cleared the ground	 it now remains to consider the terms of section 6	 on which great reliance was placed on behalf of the appellants. There is no doubt that	 as pointed out in the recent decision of this Court (1)	 the Act contemplates acquisition for a public purpose and for a Company	 thus conveying the idea that acquisition for a Company is not for a public purpose. It has been held by this Court	 in that decision	 that the purposes of public utility	 referred to in sections 40 41 of the Act	 are akin to public purpose. Hence	 acquisition for a public purpose as also acquisitions for a Company are governed by considerations of public utility. But the procedure for the two kinds of acquisitions is different	 in so far as Part VII has made substantive provisions for acquisitions of land for Companies. Where acquisition is made for a public purpose	 the cost of acquisition for payment of compensation has to be paid wholly or partly out of Public Revenues	 or some fund controlled or managed by a local authority. On the other hand	 in the case of an acquisition for a Company	 the compensation has to be paid by the Company. But	 in such a case	 there has to be an agreement	 under section 41	 for the transfer of the land acquired by the Government to the Company on payment of the cost of acquisition	 as also other matters not material to our present purpose. The agreement contemplated by section 41 is to be entered into between the Company and the Appropriate Government only after the latter is satisfied about the purpose of the proposed acquisition	 and subject to the condition precedent that the previous consent of the Appropriate Government has been given to the acquisition. The ` previous consent ' itself of the Appropriate Government is made to depend upon the satisfaction of that Government that the purpose of the acquisition was as laid down in section 40. It is	 thus	 clear that the provisions of sections 39 41 lay down conditions precedent to the application of the machinery of the Land Acquisition Act	 if the acquisition is meant for a Company. Now	 section 6 itself contains the prohibition to the making of the necessary declaration under that section in these terms (1) (1961] 1 S.C.R. 128. 469 "Provided that no such declaration shall be made unless the compensation to be awarded for such property is to be paid by a Company	 or wholly or partly out of public revenues or some fund controlled or managed by a local authority". Section 6 is	 in terms	 made subject to the provisions of Part VII of the Act. The provisions of Part VII	 read with section 6 of the Act	 lead to this result that the declaration for the acquisition for a Company shall not be made unless the compensation to be awarded for the property is to be paid by a company. The declaration for the acquisition for a public purpose	 similarly	 cannot be made unless the compensation	 wholly or partly	 is to be paid out of public funds. Therefore	 in the case of an acquisition for a Company simpliciter	 the declaration cannot be made without satisfying the requirements of Part VII. But	 that does not necessarily mean that an acquisition for a Company for a public purpose cannot be made otherwise than under the provisions of Part VII	 if the cost or a portion of the cost of the acquisition is to come out of public funds. In other words	 the essential condition for acquisition for a public purpose is that the cost of the acquisition should be borne	 wholly or in part	 out of public funds. Hence	 an acquisition for a Company may also be made for a public purpose	 within the meaning of the Act	 if a part or the whole of the cost of acquisition is met by public funds. If	 on the other hand	 the acquisition for a Company is to be made at the cost entirely of the Company itself	 such an acquisition comes under the provisions of Part VII. As in the present instance	 it appears that part at any rate of the compensation to be awarded for the acquisition is to come eventually from out of public revenues	 it must be held that the acquisition is not for a Company simpliciter. It was not	 therefore	 necessary to go through the procedure prescribed by Part VII. We	 therefore	 agree with the conclusion of the High Court	 though not for the same reasons. The appeal	 accordingly	 is dismissed with costs. Appeal dismissed.

Summary:
The Punjab Government issued notification under sections 4 and 6 of the Land Acquisition Act	 1894	 and started proceedings for acquisition of lands for the construction of a labour colony under the Government sponsored Housing Scheme for the workers of the Thapar Industrial Workers ' Co operative Hous ing Society Ltd. The appellants challenged the acquisition proceedings under article 226 of the Constitution on the ground	 inter alia	 that the procedure prescribed by Part VII of the said Act had not been admittedly complied with. The Division Bench in affirming the order of dismissal passed by the trial judge held that although article 31 of the Constitution by prohibiting compulsory acquisition of property except for a public purpose had made Part VII of the Act redundant	 the present proceedings were saved since the acquisition was for a public purpose. Held	 that the High Court was in error in holding that the Constitution had rendered Part VII of the Land Acquisition Act	 1894	 redundant or null and void	 although it was right in dismissing the appeal. That Act	 as an existing Act	 was saved by article 31(5)(a) from being affected by article 31(2) of the Constitution. Acquisition of building sites for residential houses for industrial labour is for a public purpose even apart from section 17(2) 460 (b)of the Act as amended by ':the Land Acquisition (Punjab Amendment) Act of 1953. Babu Barkava Thakur vs The State of Bombay [1961] 1 S.C.R. 128	 referred to. Although in the case of an acquisition for a company simpliciter	 no declaration under section 6 of the Act can be made without complying with the provisions of Part VII of the Act	 it is not correct to say that no acquisition for a company for a public purpose can be made except under Part VII of the Act. If the cost of the acquisition is borne either wholly or partially by the Government	 the purpose would be a public purpose within the meaning of the Act. But if the cost is entirely borne by the company it would be an acquisition for the company simpliciter and Part VII would apply. Since in the instant case a part of the compensation was to be borne by the Government	 it was not necessary to comply with the provisions of Part VII of the Act.