Essco Fabs Pvt. Ltd. & Anr vs State Of Haryana & Anr

2

C.K. THAKKER, J.

1. Leave granted.

2. Both these appeals are filed by the

appellants being aggrieved and dissatisfied

with the judgment and order dated April 02,

2004, passed by the High Court of Punjab &

Haryana in Civil Writ Petition Nos. 1853 of

2003 and 2077 of 2002.

3. To appreciate the controversy raised

in the present appeals, relevant facts in

nutshell may be noted.

4. According to the appellant Essco Fabs

Pvt. Ltd. (`Essco' for short), the Government

of Haryana intended to acquire land for public

purpose, viz., for utilization of land as

residential, commercial and industrial area in

Sector Nos. 11, 12 and 25 Part-II by Haryana

Urban Development Authority (`HUDA' for short).

For the said purpose, the Government issued a

notification under sub-section (1) of Section 4 3

of the Land Acquisition Act, 1894 (hereinafter

referred to as `the Act') on December 15, 1982.

The land mentioned in the said notification

situated in village Kheri Nangal was sought to

be acquired. A final notification under Section

6 of the Act was issued on June 20, 1984.

However, the land acquisition proceedings could

not be completed within the stipulated period

and the notifications lapsed and the land stood

released.

5. It was the case of Essco that it

bought the land which was sought to be acquired

earlier for expansion of its Export Unit.

According the appellant, it is engaged in

manufacturing and exporting rugs, cushions,

bed-spreads, bath mats, fabrics, kitchen towel,

aprons, pot holders, gloves, mitten, curtains,

napkins, carpets, etc. It is Export Oriented

Unit and earns foreign exchange by export of

goods manufactured in its unit. In the year

1992, it exported materials over Rs.2 crores.

The appellant has stated that on June 6, 1991, 4

it made an application to the Director, Town &

Country Planning, Haryana for permission for

change of user of land. All necessary documents

were appended to the application. The Director,

however, vide an order dated September 5, 1991,

rejected the permission on several grounds. One

of the grounds weighed with the Director for

refusing the permission was that the land in

question was proposed to be acquired. The

appellant has produced a copy of the

application as also an order of rejection

thereof in the present proceedings. But even

thereafter no proceedings for acquisition of

land were initiated for many years.

6. On August 1, 2001 i.e. after about

twenty years of the first notification of 1982

and nine years after rejection of prayer of the

appellant for change of user, the Government of

Haryana again issued notification under sub-

section (1) of Section 4 of the Act for

acquisition of land for the development and

utilization for construction of road connecting 5

Sanauli Road with G.T. Road for Sector 25 Part-

II B, Urban Estate Panipat by HUDA. The land of

the appellant situated in village Kheri Nangal

was sought to be included in the notification.

Moreover, `urgency clause' under Section 17 of

the Act was applied and a valuable right of

raising objections under Section 5-A of the Act

was taken away in an arbitrary manner. On the

very next day i.e. on August 2, 2001, final

notification under Section 6 of the Act was

issued by the Government.

7. It is the case of the appellant that

the preliminary notification under sub-section

(1) of Section 4 of the Act was required to be

published in the manner laid down in the Act.

But it had not been published before issuance

of final notification under Section 6 of the

Act. The final notification was, therefore,

illegal and the appellant could not be deprived

of his property in a manner not known to law.

The right of the appellant to own, possess and

enjoy the property is not merely a Common Law 6

right but also constitutional right under

Article 300A of the Constitution which has a

`flavour of fundamental right'. The acquisition

proceedings, being not in consonance with law

were vitiated and liable to be quashed.

8. The appellant, hence, filed Civil Writ

Petition No. 1853 of 2003 in the High Court of

Punjab & Haryana by invoking Article 226 of the

Constitution praying therein for quashing and

setting aside acquisition proceedings. The High

Court entertained the petition and granted

status quo with regard to possession of the

land in question. Finally, however, by the

impugned judgment it dismissed the petition.

The said order is challenged by the appellant

in this Court.

9. The other appeal is filed by the

Panipat Teachers (Recognized Schools) Housing

Co-operative Society Ltd. (`society' for short)

challenging the acquisition proceedings. It was

the case of the society that pursuant to the

representation made by the society, the State 7

Government released 53 kanals and 8 marlas of

land by executing an agreement dated October

19, 1985 and by granting land in favour of the

society on conditions mentioned in the

agreement. Possession of land was handed over

to the society. The land was demarcated and was

carved out into plots reserving requisite space

for school, parks, temple, overhead water tank,

roads, green belt etc. The society got the site

plan designed strictly in accordance with HUDA

Rules. The society invested huge amount,

approximately Rs.26 lakhs, for developing the

land laying down sewer pipe lines, RCC Water

pipe lines, construction of roads and boundary

walls etc. The site plan, however, has not been

cleared by the office of the Director, Town &

Country Planning, Haryana despite numerous

attempts by the appellant-society. It is

alleged by the society that the matter was kept

pending for oblique and ulterior purposes on

lame and untenable excuses. It is also stated

by the society that HUDA published public 8

notice in `Daily Bhaskar' dated November 10,

2000 demanding development charges thereby

acknowledging that the society's land has been

rightly developed for teachers' colony. The

public notice informed and instructed those

land/plot owners who were in arrears to pay all

the balance development charges and outstanding

dues. No dues were shown as against the

appellant-society. Thus, there is nothing due

and payable to HUDA by the appellant.

10. Ignoring all these material facts and

with a view to cause serious prejudice to the

appellant-society, a notification under sub-

section (1) of Section 4 of the Act had been

issued by the State for acquisition of land.

11. We have already stated facts relating

to the issuance of preliminary notification,

application of urgency clause under Section 17

and issuance of final notification under

Section 6 of the Act while narrating the facts

in the first case of Essco. It is, therefore, 9

not necessary to repeat all those facts in the

second matter.

12. The appellant-society, in the

circumstances, approached the High Court by

filing Civil Writ Petition No. 2077 of 2002

which was also decided along with the petition

of Essco and the petition of the appellant-

society also came to be dismissed.

13. Third writ petition (Civil Writ

Petitin No. 3324 of 2003) was filed by M/s Lord

Shiva Exports, Panipat which also met with the

same fate. Lord Shiv Exports, however, has not

approached this Court.

14. Notices were issued by this Court and

interim relief was granted. Respondents

thereafter appeared, affidavits and further

affidavits were filed and the matters were

ordered to be posted for final hearing. That is

how the matters are before us.

15. We have heard learned counsel for the

parties.

1

16. The learned counsel for the appellants

Essco and Teachers' society have challenged the

acquisition on several grounds. It was

contended that the land was not needed for

public purpose as set out in the notification

of 2001 and, hence, the acquisition is not

legal or lawful. Moreover, initially an action

was taken for acquisition of land before more

than a quarter century in the year 1982. Final

notification was also issued after more than

one and half year of preliminary notification,

but even thereafter, nothing was done by the

State and the proceedings lapsed. Again, in

1991, when Essco applied for change of user of

land, the prayer was turned down, inter alia,

on the ground that the land in question was

proposed to be acquired for public purpose.

Nothing was done by the State for about a

decade. Only in August, 2001, notification

under Section 4 was issued. It was strongly

urged by the learned counsel for the appellants

that preliminary notification was issued on 1

August 1, 2001 and urgency clause was applied

though there was no urgency at all. The

notification was published in the official

gazette thereafter and in two daily newspapers

on August 10 and 12, 2001. Final notification

under Section 6, however, was issued

immediately on the next day i.e. on August 2,

2001, of the issuance of preliminary

notification under sub-section (1) of Section

4. It was contended that on the facts of the

case, no urgency clause could have been

invoked. Even otherwise, the action was bad and

de hors the Act since the conditions laid down

in sub-section (4) of Section 17 of the Act

have not been complied with inasmuch as there

was neither grave urgency nor unforeseen

emergency. It was submitted that there was

lethargy on the part of officers of the

Government in not taking steps for more than

twenty years. The State cannot take undue

advantage of its negligence or inaction and

deprive the owners of their right to property 1

in purported exercise of power of eminent

domain. The Act is an expropriatory legislation

which deprives a person of his property without

his consent. The provisions of the Act, hence,

have to be construed strictly. It was submitted

that Section 5A confers a valuable right on the

owners of land of submitting objections against

proposed acquisition and such right cannot be

taken away or curtailed by the State. On the

facts of the case, invocation of urgency clause

was not only uncalled for being contrary to law

but otherwise arbitrary and unreasonable and on

that ground also, the proceedings are liable to

be quashed. It was urged that the expression

`the date of publication' has been defined in

sub-section (1) of Section 4 of the Act. While

construing the said connotation under Section

17, same meaning as contemplated under Section

4(1) has to be given. Since the final

notification under Section 6 had not been

published as required by the Act after `the

last date of publication' of notification under 1 Section 4(1), the action is unlawful and is

liable to be set aside. It was asserted that no

notice as required by Section 9 of the Act had

been issued nor payment of 80 percent of the

compensation as required by sub-section (3A) of

Section 17 had been paid. There was also total

non-application of mind on the part of the

State Government in not considering the

Government policy of granting exemption to

functional units dealing with handloom and

other industries. On that count also, the

proceedings are liable to be dropped.

17. On behalf of Teachers' Society, the

learned counsel adopted all the contentions

raised on behalf of Essco. The learned counsel,

however, further submitted that the society

prayed for allotment of land and the prayer was

granted. An agreement was entered into between

the Authority and the society, possession of

land was handed over to the society, which has

spent substantial amount of several lakhs for

development. Necessary permission was sought so 1

that construction can be made which was also

granted by the Authorities, requisite charges

which were to be paid had already been paid and

no dues had been shown so far as the appellant-

society is concerned and yet the impugned

action has been taken mala fide and with

ulterior motive though the land is not required

for public purpose. It was also submitted that

even according to the authorities, the land of

the appellant-society does not come in `road

line'. It is situate at about 24 meters away

(23.94 meters) from road line. It was,

therefore, submitted that the proceedings

should be declared against the provisions of

law and may be quashed.

18. Learned counsel for the respondents,

on the other hand, submitted that the action of

the authorities is legal, lawful and in

consonance with law. It was urged that the land

was required for public purpose, viz., for

construction of road. For acquisition of land,

therefore, a notification was issued. It was 1

submitted that there is no element of mala

fide or colourable exercise of power which is

clear form the fact that even in early

eighties, the land was sought to be acquired.

Since the proceedings could not be completed

within the stipulated period, they lapsed.

That, however, does not mean that the land was

not needed for public purpose or that the

public purpose disappeared or vanished. The

counsel submitted that it was further clear

when the prayer of Essco for change of user of

land in 1991 was rejected. The applicant was

told at that time also that the land was

required for public purpose. According to the

counsel, Government machinery took some time

but it cannot be concluded that the land was

not required by the State and only with a view

to deprive the appellants of their ownership

rights acquisition proceedings had been

initiated.

19. Regarding notification of August 1,

2001 and August 2, 2001 under Sections 4 and 6 1

of the Act respectively, it was submitted that

both the notifications were in consonance with

law. A preliminary notification under sub-

section (1) of Section 4 of the Act was issued

showing the intention of the State for

acquisition of land for public purpose. Since

the acquisition was for construction of road,

it was covered by Section 17 of the Act and

urgency clause was rightly invoked and in

exercise of power under sub-section (4) of

Section 17, inquiry contemplated by Section 5A

of the Act had been dispensed with. The action

was in consonance with law and no grievance can

be made contending that the inquiry as

contemplated by Section 5A and hearing of

objections were illegally dispensed with by the

authorities. All actions were consistent with

the provisions of the Act and the appellants

have no right to make complaint against those

actions. It was, therefore, submitted that the

High Court was wholly right in dismissing the 1

writ petitions and the appeals have no

substance.

20. Before we deal with the matter on

merits, it would be appropriate if we notice

the relevant provisions of the Act. As the

Preamble shows, the Act has been enacted with a

view "to amend the law for the acquisition of

land for public purposes (and for Companies)".

Section 3 is a `definition clause' of various

expressions used in the Act. Clause (f) defines

`public purpose' and the definition is

`inclusive' in nature. Purposes mentioned in

Clauses (i) to (viii) are in the nature of

`public purpose' and the land can be acquired

for any such purpose. Part II (Sections 4 to

17) deals with `Acquisition'. Section 4 enables

the appropriate Government to issue preliminary

notification for acquisition of land needed or

likely to be needed for public purposes. The

said section is relevant and reads thus;

Section 4 - Publication of preliminary notification and powers of officers 1

thereupon-- (1) Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose or for a company a notification to that effect shall be published in the Official Gazette 1[and in two daily newspapers circulating in that locality of which at least one shall be in the regional language and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality 1[the last of the dates of such publication and the giving of such public notice, being hereinafter referred to as the date of publication of the notification.

(2) Thereupon it shall be lawful for any officer, either, generally or specially authorised by such Government in this behalf, and for his servants and workmen,--

to enter upon and survey and take levels of any land in such locality;

to dig or bore in the sub-soil;

to do all other acts necessary to ascertain whether the land is adapted for such purpose;

to set out the boundaries of the land proposed to be taken and the intended line of the work (if any) proposed to be made thereon;

1

to mark such levels, boundaries and line by placing marks and cutting trenches,

and, where otherwise the survey cannot be completed and the levels taken and the boundaries and line marked, to cut down and clear away any part of any standing crop, fence or jungle:

Provided that no person shall enter into any building or upon any enclosed court or garden attached to a dwelling-house (unless with the consent of the occupier thereof) without previously giving such occupier at least seven days' notice in writing of his intention to do so.

21. Section 5A is a salutary provision and

enables any person interested in the land which

is notified under sub-section (1) of Section 4

as being needed or likely to be needed for a

public purpose to lodge objections against the

proposed acquisition. It is equally important

provision and may be reproduced'

Section 5A - Objections : Hearing of objections--(1) Any person interested in any land which has been notified under section 4, Sub-section (1), as being needed or likely to be needed for a public purpose or for a company may, within thirty days from the date of the publication of the 2

notification, object to the acquisition of the land or of any land in the locality, as the case may be. (2) Every objection under sub-section (1) shall be made to the Collector in writing, and the Collector shall give the objector an opportunity of being heard in person or by any person authorised by him in this behalf or by pleader and shall, after hearing all such objections and after making such further inquiry, if any, as he thinks necessary, either make a report in respect of the land which has been notified under section 4, sub-section (1), or make different reports in respect of different parcels of such land, to the appropriate Government, containing his recommendations on the objections, together with the record of the proceedings held by him, for the decision of that Government. The decision of the Appropriate Government on the objections shall be final.

(3) For the purposes of this section, a person shall be deemed to be interested in land who would be entitled to claim an interest in compensation if the land were acquired under this Act.

22. Then comes Section 6 which authorizes

the appropriate Government to issue final

notification as to declaration that the land is

required for public purpose. The said section

is also material and reads as under; 2

6. Declaration that land is required for a public purpose.-(1) Subject to the provisions of Part VII of this Act, when the Appropriate Government is satisfied after considering the report, if any, made under section 5A, sub-section (2), that any particular land is needed for a public purpose, or for a company, a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorised to certify its orders an different declarations may be made from time to time in respect of different parcels of any land covered by the same notification under section 4, sub-section (!), irrespective of whether one report or different reports has or have been made (wherever required) under section 5-A, sub-section (2):

Provided that no declaration in respect of any particular land covered by a notification under section 4, sub-section (1),--

(i) published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967 but before the commencement of the Land Acquisition (Amendment) Act, 1984 shall be made after the expiry of three years from the date of the publication of the notification; or

(ii) published after the commencement of the Land Acquisition (Amendment) Act, 1984, shall be made after the 2

expiry of one year from the date of the publication of the notification:

Provided further 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.

Explanation 1.-In computing any of the periods referred to in the first proviso, the period during which any action or proceeding to be taken in pursuance of the notification issued under Section 4, sub-section (1), is stayed by an order of a Court shall be excluded.

Explanation 2.-Where the compensation to be awarded for such property is to be paid out of the funds of a corporation owned or controlled by the State, such compensation shall be deemed to be compensation paid out of public revenues.

(2) Every declaration shall be published in the Official Gazette, and in two daily newspapers circulating in the locality in which the land is situate of which at least one shall be in the regional language, and the Collector shall cause public notice of the substance of such declaration to be given at convenient places in the said locality (the last of the date of such publication and the giving of such public notice, being hereinafter 2

referred to as the date of publication of the declaration), and such declaration shall state] the district or other territorial division in which the land is situate, the purpose for which it is needed, its approximate area, and where a plan shall have been made of the land, the place where such plan may be inspected.

(3) The said declaration shall be conclusive evidence that the land is needed for a public purpose or for a Company, as the case may be; and, after making such declaration the Appropriate Government may acquire the land in manner hereinafter appearing.

23. Section 9 requires issuance of notice

to persons interested. Section 11 requires

enquiry to be made and award to be passed by

Collector. Section 16 authorises the Collector

to take possession of the land acquired under

the Act. Thereupon, the land vests absolutely

in the Government free from all encumbrances.

24. Section 17 is an exception to the

normal rule of acquisition of land and deals

with cases of urgency and emergency. The

provision is of extreme importance and may be

quoted in extenso.

2

17. Special powers in cases of urgency.-(1) In cases of urgency, whenever the Appropriate Government so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9, sub-section (1), take possession of any waste or arable land needed for a public purpose]. Such land shall thereupon vest absolutely in the Government, free from all encumbrances.

(2) Whenever, owing to any sudden change in the channel of any navigable river or other unforeseen emergency, it becomes necessary for any Railway administration to acquire the immediate possession of any land for the maintenance of their traffic or for the purpose of making thereon a river-side or ghat station, or of providing convenient connection with or access to any such station, or the appropriate Government considers it necessary to acquire the immediate possession of any land for the purpose of maintaining any structure or system pertaining to irrigation, water supply, drainage, road communication or electricity,] 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.

2

Provided that the Collector shall not take possession of any building or part of a building under this sub- section without giving to the occupier thereof at least forty-eight hours' notice of his intention so to do, or such longer notice as may be reasonably sufficient to enable such occupier to remove his movable property from such building without unnecessary inconvenience.

(3) In every case under either of the preceding sub-sections the Collector shall at the time of taking possession offer to the persons interested, compensation for the standing crops and trees (if any) on such land and for any other damage sustained by them caused by such sudden dispossession and not excepted in section 24; and, in case such offer is not accepted, the value of such crops and trees and the amount of such other damage shall be allowed for in awarding compensation for the land under the provisions herein contained.

(3A) Before taking possession of any land under sub-section (1) or sub- section (2), the Collector shall, without prejudice to the provisions of sub-section (3),-

(a) tender payment of eighty per centum of the compensation for such land as estimated by him to the persons interested entitled thereto, and 2

(b) pay it to them, unless prevented by some one or more of the contingencies mentioned in section 31, sub-section (2), and where the Collector is so prevented, the provisions of section 31, sub-section (2), (except the second proviso thereto), shall apply as they apply to the payment of compensation under that section.

(3-B) The amount paid or deposited under sub-section (3A), shall be taken into account for determining the amount of compensation required to be tendered under section 31, and where the amount so paid or deposited exceeds the compensation awarded by the Collector under section 11, the excess may, unless refunded within three months from the date of the Collector's award, be recovered as an arrear of land revenue.

(4) In the case of any land to which, in the opinion of the appropriate Government, the provisions of sub- section (1) or sub-section (2) are applicable, the appropriate Government may direct that the provisions of section 5A shall not apply, and, if it does not so direct, a declaration may be made under section 6 in respect of the land at any time after the date of the publication of the notification under section 4, sub-section (1).

25. Whereas Part III relates to `Reference

to Court and procedure thereon', Parts IV and V 2

deal with `Apportionment of compensation' and

`Payment', respectively.

26. It is vehemently contended on behalf

of the appellants that on the facts and in the

circumstances of the case, the respondents

could not have invoked `urgency clause' by

scuttling enquiry and dispensing with hearing

of objections under Section 5A of the Act. It

was submitted that no action could have been

taken in view of the circumstances mentioned

earlier. As early as in 1982 proceedings were

initiated for acquisition of land but they were

allowed to be lapsed in spite of final

notification under Section 6 of the Act by not

taking appropriate actions in time. Again, in

1991, when Essco Fabs applied for change of

user of land, request was turned down on the

ground that the land was likely to be needed

for public purpose. It was, therefore,

submitted that when preliminary notification

under Section 4 was issued in 2001, there was 2

no urgent need or compelling necessity nor it

was a matter of urgency or emergency under

Section 17 of the Act which could justify the

action and the proceedings are liable to be

quashed.

27. We find considerable force in the

above argument of the learned counsel for the

appellants. The scheme of the Act is clear

which provides for issuance of preliminary

notification under sub-section (1) of Section 4

of the Act empowering the appropriate

Government to issue such notification for

acquisition of land needed or likely to be

needed for any public purpose. Since the

property belongs to a private individual,

unless there is a `public purpose' as defined

in clause (f) of Section 3 of the Act, no

acquisition of land can be made. It is in

exercise of power of eminent domain that a

sovereign may acquire property which does not

belong to him. In the circumstances, as a 2

general rule, before exercise of power of

eminent domain, law must provide an opportunity

of hearing against the proposed acquisition.

Even without a specific provision to that

effect, general law requires raising of

objections by and affording opportunity of

hearing to the owner of the property. The Land

Acquisition (Amendment) Act, 1923 (Act 38 of

1923), however, expressly made such provision

by inserting Section 5A in the Act. It is,

therefore, clear that after issuance of

preliminary notification under Section 4 before

and final notification under Section 6 of the

Act, the appropriate Government is enjoined to

hear persons interested in the property before

he is deprived of his ownership rights. But

then there may be cases of `urgency' or

`unforeseen emergency' which may brooke no

delay for acquisition of such property in

larger public interest. The Legislature,

therefore, thought it appropriate to deal with 3

such cases of exceptional nature and in its

wisdom enacted Section 17.

28. Whereas sub-section (1) of Section 17

deals with cases of `urgency', sub-section (2)

of the said section covers cases of `sudden

change in the channel of any navigable river or

other unforeseen emergency'. But even in such

cases i.e. cases of `urgency' or `unforeseen

emergency', enquiry contemplated by Section 5A

cannot ipso facto be dispensed with which is

clear from sub-section (4) of Section 17 of

the Act.

29. Sub-section (4) of Section 17 is an

enabling provision and it declares that if in

the opinion of the appropriate Government, the

provisions of sub-section (1) or (2) are

applicable, it may direct that the provisions

of Section 5A would not apply. It is,

therefore, clear that the Legislature has

contemplated that there may be `urgencies' or 3

`unforeseen emergencies' and in such cases,

private properties may be acquired. But, it was

also of the view that normally even in such

cases, i.e. cases of urgencies or unforeseen

emergencies, the owner of property should not

be deprived of his right to property and

possession thereof without following proper

procedure of law as contemplated by Section 5A

of the Act unless the urgency or emergency is

of such a nature that the Government is

convinced that holding of enquiry or hearing of

objections may be detrimental to public

interest.

30. In this connection, both the parties

invited our attention to several decisions. We

will deal with some of the important decisions.

31. In Nandeshwar Prasad & Anr. V. State

of Uttar Pradesh & Ors, (1964) 3 SCR 425, the

land was acquired by the Government for public

purpose, viz. the Kanupur Development Board 3

under the Kanpur Urban Area Development Act,

1945. The Court considered the scheme of the

Act that after issuance of preliminary

notification under Section 4 of the Act,

objections are to be heard under Section 5A of

the persons interested in the property and

thereafter final notification under Section 6

can be issued. The Court, however, noted that

to that procedure, there is an exception under

Section 17 which enables the Government to

apply urgency clause. Where an action is taken

under sub-section (4) of Section 17 of the Act,

it is not necessary to follow procedure laid

down in Section 5A and notification under

Section 6 can be issued without report from the

Collector as envisaged by Section 5A.

32. The Court stated;

"It will be seen that s. 17(1) gives power to the Government to direct the Collector, though no award has been made under s. 11, to take possession of any waste or arable land needed for public purpose and such land thereupon vests absolutely in the Government free from all encumbrances. If action is taken under s. 17(1), taking 3

possession and vesting which are provided in s. 16 after the award under s. 11 are accelerated and can take place fifteen days after the publication of the notice under s.9. Then comes s. 17(4) which provides that in case of any land to which the provisions of sub-s. (1) are applicable, the Government may direct that the provisions of s. 5-A shall not apply and if it does so direct, a declaration may be made under s. 6 in respect of the land at any time after the publication of the notification under s. 4(1). It will be seen that it is not necessary even where the Government makes a direction under s. 17(1) that it should also make a direction under s. 17(4). If the Government makes a direction only under s. 17(1) the procedure under s. 5-A would still have to be followed before a notification under s. 6 is issued, though after that procedure has been followed and a notification under s. 6 is issued the Collector gets the power to take possession of the land after the notice under s. 9 without waiting for the award and on such taking possession the land shall vest absolutely in Government free from all encumbrances. It is only when the Government also makes a declaration under s. 17(4) that it becomes unnecessary to take action under s. 5-A and make a report thereunder. It may be that generally where an order is made under s.17(1), an order under s. 17(4) is also passed; but in law it is not necessary that this should be so. It will also be seen that under the Land 3

Acquisition Act an order under s. 17 (1) or s. 17(4) can only be passed with respect to waste or arable land and it cannot be passed with respect to land which is not waste or arable and on which buildings stand".

(emphasis supplied)

33. From the above observations, it is

clear that even in cases falling under or

covered by sub-sections (1) and (2) of Section

17 of the Act and the Government intends to

acquire land in cases of `urgency' or

`unforeseen emergency', it is still required to

follow procedure under Section 5A of the Act

before issuance of final notification under

Section 6 of the Act. It is only when the

Government also makes a declaration under sub-

section (4) of Section 17 that it becomes

unnecessary to take recourse to procedure under

Section 5A of the Act.

34. Nandeshwar Prasad was decided by a

three Judge Bench.

35. Recently, in Union of India & Ors. v.

Mukesh Hans, (2004) 8 SCC 14, a similar 3

question came up for consideration before a

three Judge Bench. There land was sought to be

acquired at Mehrauli by the appropriate

Government for organizing Anjuman-Saire-e-Gul-

Faroshan. Proceedings were initiated under the

Act and urgency clause was applied. The

notification mentioned the public purpose as

`Planned Development of Delhi'. It was also

stated that Lt. Governor was of the opinion

that Section 17(1) of the Act was applicable to

the acquisition and he directed to dispense

with inquiry under Section 5A of the Act.

Simultaneously, a declaration under Section 6

was issued. Intrested parties approached the

High Court of Delhi, inter alia, on the ground

that decision to dispense with inquiry

contemplated by Section 5A of the Act was

vitiated by non-application of mind. The High

Court upheld the contention and quashed the

proceeding. The aggrieved Union approached this

Court.

3

36. It was contended on behalf of the

Union that in case of urgency, it was open to

the appropriate Government to dispense with

inquiry under Section 5A by invoking sub-

section (4) of Section 17 of the Act. It was

also contended that the urgency contemplated by

sub-sections (1) or (2) of Section 17 of the

Act was `by itself' sufficient to invoke sub-

section (4) of Section 17.

37. Negativing the contention and

referring to Nandeshwar Prasad and other

judgments, the Court held;

"A careful perusal of the above Section shows that Sub-section (1) of Section 17 contemplates taking possession of the land in the case of an urgency without making an award but after the publication of Section 9(1) notice and after the expiration of 15 days of publication of Section 9(1) notice. Therefore it is seen that if the appropriate Government decides that there is an urgency to invoke Section 17(1) in the normal course Section 4(1) notice will have to be published, Section 6 declaration will have to be made and after completing the procedure contemplated under Sections 7 and 8, 9 (1) notice will have to be given and on expiration of 15 days from the date of 3

such notice the authorities can take possession of the land even before passing of an award.

Sub-section (2) of Section 17 contemplates a different type of urgency inasmuch as it should be an unforeseen emergency. Under this Section if the appropriate Government is satisfied that there is such unforeseen emergency the authorities can take possession of the land even without waiting fort 15 days period contemplated under Section 9(1). Therefore, in cases, where Government is satisfied that mere is an unforeseen emergency it will have to in the normal course, issue a Section 4(1) notification, hold 5A inquiry, make Section 6 declaration, and issue Section 9(1) notice and possession can be taken immediately thereafter without waiting for the period of 15 days prescribed under Section 9(1) of the Act.

Section 17(4) as noticed above provides that in cases where the appropriate Government has come to the conclusion that there exists an urgency or unforeseen emergency as required under Sub-sections (1) or (2) of Section 17 it may direct that the provisions of Section 5A shall not apply and if such direction is given then 5A inquiry can be dispensed with and a declaration may be made under Section 6 on publication of 4(1) notification possession can be made". 3

38. The Court, therefore, proceeded to state;

"A careful perusal of this provision which is an exception to the normal mode of acquisition contemplated under the Act shows mere existence of urgency or unforeseen emergency though is a condition precedent for invoking Section 17(4) that by itself is not sufficient to direct the dispensation of 5A inquiry. It requires an opinion to be formed by the concerned government that along with the existence of such urgency or unforeseen emergency there is also a need for dispensing with 5A inquiry which indicates that the Legislature intended that the appropriate government to apply its mind before dispensing with 5A inquiry. It also indicates the mere existence of an urgency under Section 17(1) or unforeseen emergency under Section 17(2) would not by themselves be sufficient for dispensing with 5A inquiry. If that was not the intention of the Legislature then the latter part of Sub-section (4) of Section 17 would not have been necessary and the Legislature in Section 17(1) and (2) itself could have incorporated that in such situation of existence of urgency or unforeseen emergency automatically 5A inquiry will be dispensed with. But then that is not language of the Section which in our opinion requires the appropriate Government to further consider the need for dispensing with 5A inquiry in spite of the existence of unforeseen emergency. This understanding of ours as to the 3

requirement of an application of mind by the appropriate Government while dispensing with 5A inquiry does not mean mat in and every case when there is an urgency contemplated under Section 17(1) and unforeseen emergency contemplated under Section 17(2) exists that by itself would not contain the need for dispensing with 5A inquiry. It is possible in a given case the urgency noticed by the appropriate Government under Section 17(1) or the unforeseen emergency under Section 17(2) itself may be of such degree that it could require the appropriate Government on that very basis to dispense with the inquiry under Section 5A but then there is a need for application of mind by the appropriate Government that such an urgency for dispensation of the 5A inquiry is inherent in the two types of urgencies contemplated under Section 17 (1) and (2) of the Act".

39. The learned counsel for the respondent

authorities, however, strongly relied upon a

two Judge Bench decision of this Court in Jai

Narain & Ors. v. Union of India & Ors., (1996)

1 SCC 9. In Jai Narain, the Court held that the

question of `urgency' or `unforeseen emergency'

is the mater which is entirely based on

`subjective satisfaction of the Government' and

the Courts do not interfere unless the reasons 4

given are wholly irrelevant and there is non-

application of mind. If the public purpose, on

the face of it shows that the land is needed

urgently, that by itself is relevant

circumstance for justifying the action under

Section 17(4) of the Act.

40. Again, a similar view was taken by a

two Judge Bench in Chameli Singh & Ors., v.

State of U.P. & Anr., (1996) 2 SCC 549. In

Chameli Singh, land was acquired for public

purpose, namely, construction of houses for

dalits. Urgency clause under Section 17 was

applied which was challenged by the land-

owners. Holding that the urgency clause was

rightly applied and inquiry under Section 5A of

the Act has been correctly dispensed with, the

Court observed that acquisition of land for

providing houses to dalits, tribes and poor

would be sufficient to invoke Section 17 of the

Act and the land-owners cannot challenge the

validity of such acquisition on the ground that 4

inquiry under Section 5A cannot be dispensed

with.

41. The Court stated;

"It would thus be seen that this Court emphasised the holding of an inquiry on the facts peculiar to that case. Very often the officials, due to apathy in implementation of the policy and programmes of the Government, themselves adopt dilatory tactics to create cause for the owner of the land to challenge the validity or legality of the exercise of the power to defeat the urgency existing on the date of taking decision under Section 17(4) to dispense with Section 5-A inquiry.

It is true that there was pre- notification and post-notification

delay on the part of the officers to finalise and publish the notification. But those facts were present before the Government when it invoked urgency clause and dispensed with inquiry under Section 5A. As held by this Court, the delay by itself accelerates the urgency: Larger the delay, greater be the urgency. So long as the unhygienic conditions and deplorable housing needs of Dalits, Tribes and the poor are not solved or fulfilled, the urgency continues to subsist When the Government on the basis of the material, constitutional and international obligation, formed its opinion of urgency, the Court, not 4

being an appellate forum, would not disturb the finding unless the court conclusively finds the exercise of the power male fide. Providing house sites to the Dalits, Tribes and the poor itself is a national problem, and a constitutional obligation. So long as the problem is not solved and the need is not fulfilled, the urgency continues to subsist. The State is expending money to relieve the deplorable housing condition in which they live by providing decent housing accommodation with better sanitary conditions. The lethargy on the part of the officers for pre and post-notification delay would not render the exercise of the power to invoke urgency clause invalid on that account".

42. In First Land Acquisition Collector &

Ors., v. Nirodhi Prakash Gangoli & Anr., (2002)

4 SCC 160, a two Judge Bench again observed

that case of existence of urgency under Section

17 of the Act is a matter of subjective

satisfaction of appropriate Government and a

decision of Government to dispense with inquiry

under Section 5A by invoking urgency provision

can be challenged only on the ground of non-

application of mind or mala fide exercise of

power by the Government. Burden is always on 4

the person alleging mala fide to prove it on

the basis of specific materials. So long as

the purpose of acquisition continues to exist,

exercise of power under Section 17 cannot be

held to be mala fide. Mere delay of the

Government subsequent to its decision to

dispense with inquiry under Section 5A by

exercising power under Section 17 would not

invalidate the decision.

43. On the basis of above decisions, it

was submitted that once a decision has been

taken by the State Government to apply urgency

clause, the decision of the Government cannot

be interfered with by a Court exercising writ

jurisdiction.

44. In our judgment, from the above case

law, it is clear that normal rule for

acquisition of land under the Act is issuance of

notification under sub-section (1) of Section 4,

hearing of objections under Section 5A and 4

issuance of final notification under Section 6

of the Act. Award will be made by the

Collector, notice has to be issued to the land-

owners or the person interested and thereafter

possession can be taken. Section 17, no doubt,

deals with special situations and exceptional

circumstances covering cases of `urgency' and

`unforeseen emergency'. In case of `urgency'

falling under sub-section (1) of Section 17 or

of `unforeseen emergency' covered by sub-section

(2) of Section 17, special powers may be

exercised by appropriate Government but as held

by a three Judge Bench decisions before more

than four decades in Nandeshwar Prasad and

reiterated by a three Judge Bench decision in

Mukesh Hans, even in such cases, inquiry and

hearing of objections under Section 5A cannot

ipso facto be dispensed with unless a

notification under sub-section (4) of Section 17

of the Act is issued. The legislative scheme is

amply clear which merely enables the appropriate

Government to issue such notification under sub- 4

section (4) of Section 17 of the Act dispensing

with inquiry under Section 5A if the Government

intends to exercise the said power. The use of

the expression `may' in sub-section (4) of

Section 17 leaves no room of doubt that it is

discretionary power of the Government to direct

that the provisions of Section 5A would not

apply to such cases covered by sub-section (1)

or (2) of Section 17 of the Act.

45. In our opinion, therefore, the

contention of learned counsel for the

respondent authorities is not well founded and

cannot be upheld that once a case is covered by

sub-section (1) or (2) of Section 17 of the

Act, sub-section (4) of Section 17 would

necessarily apply and there is no question of

holding inquiry or hearing objections under

Section 5A of the Act. Acceptance of such

contention or upholding of this argument will

make sub-section (4) of Section 17 totally

otiose, redundant and nugatory. 4

46. It is true that in Chameli Singh and

Jai Narain, a two Judge Bench has observed that

acquisition of land for housing accommodation

or for construction of residential quarters for

dalits and tribals can be said to be of an

urgent nature falling under Section 17(1) of

the Act. But as already held in Nandeshwar

Prasad and Mukesh Hans, even in such cases,

procedure required to be followed under Section

5A cannot be dispensed with unless notification

under sub-section (4) of Section 17 is issued.

In Mukesh Hans, the Court also held that the

provision cannot be pressed in service by

officers who were negligent and due to their

lethargy, proceedings could not be initiated

for a quite long time.

47. In the instant case, the facts are

eloquent. Initial action of acquisition of land

was taken as early as in 1982 but the

proceedings lapsed. In 1991, when Essco made an

application praying for change of user of land, 4

it was rejected on the ground that the land was

likely to be required for public purpose.

Nothing, however, was done for about a decade.

It is only in 2001 that again Notification

under Section 4 was issued and urgency clause

was applied. We are, therefore, satisfied that

the ratio lad down in Mukesh Hans squarely

applies to the facts of the case. No urgency

clause could have been invoked by the

respondents and inquiry and hearing of

objections provided by Section 5A of the Act

could not have been dispensed with. The actions

of issuance of urgency clause under sub-section

(4) of Section 17, dispensing with inquiry

under Section 5A and issuance of final

notification under sub-section (1) of Section 6

are required to be quashed and they are

accordingly quashed.

48. The learned counsel for the appellant

also contended that even if it is held that the

respondent could have issued final notification 4

without holding inquiry and hearing of

objections under Section 5A of the Act, the

notification under Section 6 of the Act is

illegal and unlawful in view of the fact that

the said notification has not been issued after

the last of the dates of the publication and

giving of public notice referred to as "the

date of publication of the notification" under

sub-section (1) of Section 4 of the Act.

49. It was submitted that even the said

point is concluded by a decision of this Court

in State of Uttar Pradesh & Ors. v. Radhey

Shyam Nigam & Ors, (1989) 1 SCC 591.

50. The learned counsel for the

respondents, on the other hand, relying on

State of Haryana & Anr. v. Raghubir Dayal,

(1995) 1 SCC 133 and Mohan Singh & Ors. v.

International Airport Authority of India &

Ors., (1997) 9 SCC 132 submitted that if

urgency clause under Section 17(4) is applied 4

by the appropriate Government, final

notification under Section 6 of the Act can be

issued on the next day of the issuance of

preliminary notification under Section 4 of the

Act. In the case on hand, the said procedure is

followed. Notification under Section 4 was

issued on August 1, 2001. Urgency clause was

applied and the case was covered by Section 17

(4) of the Act. On the very next day i.e. on

August 2, 2001, final notification under

Section 6 was issued. Therefore, the procedure

required by law has been strictly followed as

held by this Court in Raghubir Dayal and Mohan

Singh.

51. We would have entered into the said

question had it been absolutely necessary for

us to decide it in the case on hand. But as

observed hereinabove, we are of the view that

the appellants are entitled to succeed on the

first ground that on the facts and in the

circumstances of the case, the appropriate 5

Government was not justified in invoking

urgency clause under sub-section (4) of Section

17 of the Act by dispensing with inquiry and

hearing of objections under Section 5A of the

Act and the final notification issued under

Section 6 of the Act deserves to be set aside

on that ground alone, we express no opinion one

way or the other on the interpretation of the

expression "the date of publication of the

notification" used in sub-section (1) of

Section 4, sub-section (4) of Section 17 and

Section 6 of the Act.

52. For the foregoing reasons, both the

appeals are allowed. The action of the

respondent authority of dispensing with the

inquiry and hearing of objections under Section

5A and issuance of final notification under

Section 6 of the Act is hereby quashed and set

aside. It is, however, open to the authorities

to take appropriate action after following

normal procedure laid down in the Act. 5

53. Appeals are accordingly allowed with costs.

CONTEMPT PETITION NO.30 OF 2007 IN C.A.NO. ............... OF 2008 @ S.L.P. (C)NO. 15449 OF 2004

54. In the light of judgment in the above

appeals, the contempt petition stands disposed of.

.........................................................J. (C.K. THAKKER)

NEW DELHI, .........................................................J. NOVEMBER 07, 2008. (D.K. JAIN)