State Of Haryana vs M/S Vinod Oil & General Mills

ITEM No. 1E Court No. 3 SECTION XIIA (For Judgment)

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Civil Appeal No(s). …. of 2014 @ SLP(C) No. 11853-11854 of 2008

STATE OF HARYANA Appellant(s)

VERSUS

M/S. VINOD OIL AND GENERAL MILLS AND ANR. Respondent(s)

Date : 23/09/2014 This appeal was called on for judgment today.

For Appellant(s) Mr. Kamal Mohan Gupta, Adv.

For Respondent(s) Dr. Kailash Chand, Adv.

UPON hearing the counsel the Court made the following O R D E R

Hon'ble Mrs. Justice R.Banumathi pronounced Judgment of the Bench comprising Hon'ble Mr. Justice T.S.Thakur and Hon'ble Mrs. Justice R.Banumathi Leave granted The appeals are disposed of in terms of the signed reportable judgment.

(Shashi Sareen) (Veena Khera) Signature Not Verified

Digitally signed by Court Master Court Master Shashi Sareen Date: 2014.09.26 05:36:08 ALMT

(Signed reportable judgment is placed on the file) Reason: 2

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 9098-9099 OF 2014 (Arising out of SLP (Civil) Nos.11853-54/08)

STATE OF HARYANA & ORS. ...Appellants

Versus

M/S.VINOD OIL & GENERAL MILLS & ANR. ...Respondents

JUDGMENT

R. BANUMATHI, J.

Delay condoned. Leave granted.

2. These appeals arise out of the judgment of High Court of

Punjab and Haryana in and by which the High Court quashed the

acquisition of the lands of the respondents, interalia, on various

grounds. Feeling aggrieved, State of Haryana is before us.

3. Facts in nutshell giving rise to these appeals are as under:-

The respondents being a partnership concern had set up an

industrial unit in the year 1981 which is running under the name 3

and style of M/s. Vinod Oil and General Mills. On 19.5.1992,

Haryana Government issued a notification under Section 4 of the

Land Acquisition Act, 1894 (for short ‘Act’) in which the land of the

respondents was also included. The respondents submitted their

objections under Section 5-A of the Act and after considering their

objections, the State Government excluded the land of the

respondents from the acquisition proceedings before declaration

under Section 6 of the Act. Later at the time of planning of the

Sector, it was felt that two strips of lands of the respondents are

creating hindrance in the wholesome Development Plan of the Sector.

Haryana Government again initiated acquisition proceedings by

issuance of notification under Section 4 of the Act on 15.3.2004 to

acquire the land in the area of village Hissar Hadbast No.146 and

village Satrod Khas and Satrod Khurd Hadbast Nos.154 & 155, Tehsil

and District Hissar including the lands of the respondents for public

purpose, namely, for development and utilization of land for

residential and commercial Sector 9 & 11, Hissar. The respondents

filed their objections under Section 5-A of the Act and after hearing

the respondents, the Government decided to acquire the land in

dispute and the declaration under Section 6 of the Act was issued on

14.3.2005 and thereafter notice under Section 9 of the Act was also 4

issued. Challenging the acquisition proceedings, the partnership

concern filed two writ petitions one by Savitri Devi, one of the

partners (CWP No.17469/2006) and the another by M/s. Vinod

Oil and General Mills, a registered partnership firm through Shri

Inder Sain Aggarwal (CWP No.17458/2006) praying to quash the

notifications dated 15.3.2004 and 14.3.2005 under Sections 4 and 6

of the Act and also prayed for direction to release their land from

acquisition proceedings.

4. The High Court quashed the acquisition proceedings,

interalia, on the grounds:- (i) having permitted the change of land use

for developing the area as an industry and after 26 years cannot turn

around and acquire the land for development of residential and

commercial purposes; (ii) lands having been released from

earlier acquisition in 1992 cannot be included in the notification for

re-acquisition; (iii) the land of the respondents being located in one of

the corners of the sector that is proposed to be developed, the same

could be conveniently adjusted in the Plan/Scheme.

5. Mr. Narendra Hooda, learned Addl. Advocate General,

appearing for the State of Haryana, submitted that the development

and utilization of land for residential and commercial purpose in

Sector 9 & 11, Hissar will benefit many people and the High Court 5

erred in not appreciating that the interest of the individuals could not

come in the way of development plan. Learned counsel further

submitted that at the time of planning of sector, it was noticed that

the land in dispute was creating hindrance in development of the

sector and the High Court did not properly appreciate the hindrance

that is being caused by the land, for the development of the sector as

residential and commercial sector. It was submitted that the release

of the land from acquisition in the earlier notification in 1992 would

not in any way bar fresh acquisition of the same land.

6. Mr. Puneet Jindal, learned Senior Counsel appearing for

the respondents/claimants submitted that when the respondents’

lands were earlier sought to be acquired, upon consideration of

objections by the respondents that they have set up industry and put

up constructions in their lands and after verification of the same, the

claim of the respondents was accepted by the Government and the

land of the respondents was then released from acquisition and while

so, the notification issued by the State of Haryana seeking to acquire

the land again is illegal and arbitrary and the High Court has rightly

quashed the acquisition.

7. Acquisition of respondents’ lands was held to be vitiated

on the ground that State having granted permission to the 6

respondents for change of land use and develop the area as an

industry cannot turn around after twenty six years to acquire the

land saying that the same is required to be developed for

residential purposes and the action of the respondent/State was

held to be arbitrary. Of course, Director of Town and Country

Planning, Haryana earlier granted permission to the respondents

herein for change of land use for construction of Oil and General Mills

in their lands in 23 Kanal 6 Marla in Khasra No.148/1,148/2 and

149/10. The fact that the factory and building was put up in the

lands with the approval of the authority cannot be a bar for

acquisition of the land. Public interest overrides individual’s interests.

In our view, the High Court was not justified in saying that the

acquisition is bad since permission was earlier granted for change of

land use and developing the area as an industry and that

Government is estopped from initiating acquisition proceedings.

8. Permission for change of land use and developing the area

as an industry, in our view, has no relevance while considering the

validity of acquisition. If we are to hold that once permission is

granted for change of land use for developing the area as an industry

and thereafter State cannot acquire it, then a situation may arise

that for all time to come, the particular area cannot be acquired 7

which may not be in the larger public interest. We are also unable to

agree with the view taken by the High Court that the action of the

respondents/State in approving setting up of a factory and then

acquiring the same is unreasonable. It is not as if the lands where

factories are set up are immune from any acquisition. The only effect

of permission for such change in land use and approval for

construction and developing the area as an industry can be

recognized as valid only to the extent as to confer right upon the

land owners to recover the appropriate compensation.

9. The land was acquired for development and utilization of

the same for residential and commercial purposes in Sector 9 & 11,

Hissar. So far as the purpose of acquisition of land is concerned,

the High Court observed that “the acquisition is not for essential

public services such as development of infrastructure, railways, metro

or the purpose related thereto, irrigation, water supply, drainage, road,

communication etc..…”. High Court was not correct in observing that

only development of infrastructure, railways or irrigation, water

supply, drainage, road etc. are primary public purposes. Public

purpose includes a purpose involving general interest of community

as opposed to the interest of an individual directly or indirectly

involved. Individual interest must give way to public interest as far as 8

public purpose in respect of acquisition of land is concerned.

10. The concept of ‘public purpose’ was dealt with in detail in

Daulat Singh Surana & Ors. vs. First Land Acquisition Collector & Ors.

(2007) 1 SCC 641, in which this Court has held as under:-

“49. In United Community Services v. Omaha Nat. Bank (77 NW 2d 576, 585,162 Neb 786) the Court observed that a public purpose has for its objective the promotion of the public health, safety, morals, security, prosperity, contentment and the general welfare of all the inhabitants.

50. In People ex rel Adamowski vs. Chicago R.R. Terminal Authority (151 NE 2d 311, 314, 14 III 2d 230) the Court observed that public purpose is not static concept, but is flexible and is capable of expansion to meet conditions of complex society that were not within contemplation of framers of the Constitution.

51. In Green v. Frazier (176 NW 11, 17, 44 ND 395), the Court observed that a public purpose or public business has for its objective the promotion of the public health, safety, morals, general welfare, security, prosperity and contentment of all the inhabitants or residents within a given political division, as for example, a State, the sovereign powers of which are exercised to promote such public purpose or public business.

52. In the words of Lord Atkinson in Central Control Board v. Cannon Brewery Co.Ltd. {1919 AC 744: 88 LJCh 464:

121 LT 361 (HL)} the power to take compulsorily raises by implication a right to payment.

……

59. In Somavanti v. State of Punjab (1963) 2 SCR 774:

AIR 1963 SC 151 the Court observed that public purpose must include an object in which the general interest of the community, as opposed to the particular interest of individuals, is directly and vitally concerned. Public purpose is bound to change with the times and the prevailing conditions in a given area and, therefore, it would not be a practical proposition even to attempt an extensive definition of it. It is because of this that the legislature has left it to the Government to say what is a public purpose and also to declare the need of a given land for a public purpose.

60. The Constitution Bench of this Court in Somavanti 9

observed that whether in a particular case the purpose for which land was needed was a public purpose or not was for the Government to be satisfied about and the declaration of the Government would be final subject to one exception, namely, that where there was a colourable exercise of the power the declarations would be open to challenge at the instance of the aggrieved party.

………

73. Public purpose cannot and should not be precisely defined and its scope and ambit be limited as far as acquisition of land for the public purpose is concerned. Public purpose is not static. It also changes with the passage of time, needs and requirements of the community. Broadly speaking, public purpose means the general interest of the community as opposed to the interest of an individual.”

11. Prima facie, State is the first Judge to determine whether

there exists public purpose or not. But the decision of the State is

not beyond judicial scrutiny. The Courts have the jurisdiction and it

is their duty to determine the matter whenever a question is raised

whether a requisition order is or is not for a public purpose. In

Sooraram Pratap Reddy & Ors., vs. Distt. Collector, Ranga Reddy Dist.

& Ors., (2008) 9 SCC 552, it was held as under:

“133……….It is primarily for the State to decide whether there exits public purpose or not. Undoubtedly, the decision of the State is not beyond judicial scrutiny. In appropriate cases, where such power is exercised mala fide or for collateral purposes or the purported action is dehors the Act, irrational or otherwise unreasonable or the so-called purpose is “no public purpose” at all and fraud on statute is apparent, a writ-court can undoubtedly interfere. But except in such cases, the declaration of the Government is not subject to judicial review. In other words, a writ court, while exercising powers under Articles 32, 226 or 136 of the Constitution, cannot substitute its own judgment for the judgment of the Government as to what constitutes “public purpose”.”

12. While determining the question whether a 10

requisition order is or is not for a public purpose, the facts and

circumstances in each case are to be closely examined in order to

determine whether a public purpose has been established. The

requirement of land for residential and commercial purposes and for

development of the Sector involves in it an element of general interest

of the community and whatever furthers the general interest must be

regarded as a ‘public purpose’ as opposed to the particular interest of

individuals.

13. High Court quashed the acquisition on yet another

ground that the land was sought to be acquired earlier by issuing

notification dated 19.5.1992 under Section 4 of the Act and

accepting the respondents’ objections, their land was earlier released

and ignoring the said fact situation, the State arbitrarily included

the land of the respondents in the notification under Section 4 of the

Act for reacquisition. Relying upon its own judgment in Roshan Lal &

Ors. vs. State of Haryana & Ors. 2003 (3) PLR 199, the High Court

quashed the acquisition proceedings invoking principle of estoppel.

14. Mr. Narender Hooda, learned Addl. Advocate General,

appearing for the appellants/State of Haryana, submitted that the

judgment rendered in Roshan Lal (supra) does not apply in the facts

of the present case, since in the said case, the land was earlier 11

released on certain conditions and then again acquired the land and

the Government was bound by the earlier conditions. But in the

present case, there was no such condition imposed on either party at

the time when the land was released earlier. It is further submitted

that the respondents have a total area of 23 Kanal 6 Marla, out of

which only small portion in two small strips are sought to be

acquired which is very much required for the development of the

Sector.

15. As regards contention of the learned counsel for the

respondents that the land once released cannot be subsequently

reacquired, in our view, there is no bar to the subsequent acquisition

of the land nor is there a bar for issuance of successive notification

for acquisition of the land. It would not be right to contend that

because the land was already released, it cannot be acquired by

subsequent notification. If it is to be held that land already released

cannot be reacquired, an anomalous situation may arise that the land

cannot be acquired for all time to come even if it is genuinely

required. It is not in dispute that the earlier notification is issued by

the State for the development of the land for residential and

commercial purposes which is same purpose for subsequent

acquisition as well. When the State felt that the land sought to be 12

acquired cannot be adjusted in the development of the Plan, there is

no bar for issuance of notification for acquisition of the land.

16. Yet another ground on which the High Court quashed the

acquisition is that the land of the respondents is located in one

corner of the area that is proposed to be developed and the land of

the respondents could conveniently be adjusted in the planning

scheme. We have perused the Plan of Sector 9 & 11. Two chunks of

lands of the respondents one strip measuring 19 Marla and another

measuring 1Kanal 11 Marla are sought to be acquired. 19 Marla of

land in Khasra No. 148/2/2 standing in the name of Savitri Devi

measures 192’.6”x 27’.6” feet. In this small strip of land of 19 Marla,

office block, laboratory and Mandir (place of worship) are said to have

been constructed. Main sheds of the factory and the land

underneath have not been acquired. According to the respondents,

this small strip of land of 19 Marla is not contiguous with the

other land of Government/HUDA and in the absence of office

building, laboratory, the respondents will not be able to run their

factory. We find substance in the contention of the respondents that

Khasra No. 148/2/2, the small strip of land which is contiguous to

their factory appears to be in the corner of the Development Plan

and the same can be adjusted in the Planning Scheme of the Sector 13

and on this ground, we affirm the order of the High Court quashing

the acquisition in respect of Khasra No.148/2/2 measuring 19

Marla.

17. Insofar as another strip of 1 Kanal 11 Marla of land which

stands in the name of M/s. Vinod Oil and General Mills, this strip of

land in Khasra No.149 is situated in the midst of Sector 9 & 11. We

find substance in the submission of the State that this strip of land is

an hindrance for the wholesome development of the Sector and the

same cannot be adjusted in the development of the Sector. Order of

the High Court quashing acquisition of this strip of land measuring

1 Kanal 11 Marla in Khasra No.149 is set aside and the acquisition of

1 Kanal 11 Marla in Khasra No.149 is upheld.

18. Regarding acquisition of 1 Kanal 11 Marla in Khasra

No.149, on behalf of the respondents it was then argued that by

virtue of Section 24 (2) of the Right to Fair Compensation and

Transparency in Land Acquisition, Rehabilitation, Resettlement Act,

2013 (hereinafter referred to as ‘the Act 2013’), the subject of

acquisition shall be deemed to have lapsed because the award is

prior to the commencement of the Act 2013 and since no

compensation has been paid to the respondents nor the amount was

deposited and the possession was not taken.

14

19. Learned counsel for the appellants Mr. Hooda submitted

that there is no default on the part of the appellants and hence the

acquisition proceedings have not lapsed under Section 24(2) of the

Act 2013. He, however, submitted that the matter be remitted back

to the High Court for consideration of that aspect as was ordered in

Civil Appeal No. 8104/2014 and connected matters titled Surjit Kaur

vs. State of Haryana & Ors. decided on 5.9.2014 by this Court where

similar situation prevailed.

20. Considering the scope of Section 24(2) of the Act 2013 in

Pune Municipal Corporation & Anr. Vs. Harakchand Misirimal Solanki

& Ors., (2014) 3 SCC 183, in para (11) this Court has held as

under:-

“11. Section 24(2) also begins with non obstante clause. This provision has overriding effect over Section 24(1). Section 24(2) enacts that in relation to the land acquisition proceedings initiated under the 1894 Act, where an award has been made five years or more prior to the commencement of the 2013 Act and either of the two contingencies is satisfied viz. (i) physical possession of the land has not been taken, or (ii) the compensation has not been paid; such acquisition proceedings shall be deemed to have lapsed. On the lapse of such acquisition proceedings, if the appropriate Government still chooses to acquire the land which was the subject-matter of acquisition under the 1894 Act then it has to initiate the proceedings afresh under the 2013 Act. The proviso appended to Section 24(2) deals with a situation where in respect of the acquisition initiated under the 1894 Act an award has been made and compensation in respect of a majority of landholdings has not been deposited in the account of the beneficiaries then all the beneficiaries specified in the Section 4 notification become entitled to compensation under the 2013 Act.”

21. Since the new Land Acquisition Act has come into force 15

with effect from 1.1.2014, the High Court did not have occasion to

examine whether proceedings already initiated under the Land

Acquisition Act, 1894 have lapsed on account of the alleged

non-payment of compensation to the respondents and the failure of

the authorities to take over possession of the land acquired from

them. Having regard to the submission of the learned counsel for the

respondents, certain factual aspects viz., (i) whether possession of the

land in Khasra No. 149 has been taken or not; (ii) whether the

compensation in respect of the acquired land in Khasra No.

149 was paid or not have to be examined. We are of the view that

instead of this Court examining the above issues by itself, it would

be better if the matter is remitted back to the High Court to examine

the above limited questions in respect of the acquisition of the land 1

Kanal 11 Marla in Khasra No.149.

22. In the result, we uphold the order passed by the High Court

quashing the acquisition of the land 19 Marla in Khasra No.148/2/2.

So far as the acquisition of land measuring 1 Kanal 11 Marla in

Khasra No.149(CWP No.17458/2006), the order of the High Court is

set aside and it is held that the acquisition proceedings have been

properly concluded in respect of the said extent of land acquired in

Khasra No.149 and the matter is remitted to the High Court to 16

examine the limited questions as aforesaid. We further direct that the

status quo as it exists today in regard to disputed property shall be

maintained by the parties pending disposal of the writ petition. We

restore the CWP. No. 17458/2006 (M/s Vinod Oil and General Mills

Vs. State of Haryana & Ors.) on the file of the High Court. Since the

writ petition is of the year 2006, we request the High Court to dispose

of the same as expeditiously as possible preferably within a period of

four months from the date of receipt of copy of this judgment. The

appeals stand disposed of accordingly. In the facts and

circumstances of the case, no order as to costs.

…………………………….J. (T.S. Thakur)

……………………………J. (R. Banumathi) New Delhi;

September 23, 2014