DIPAK BABARIA & ANR. v. STATE OF GUJARAT & ORS.

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A to pass an order that the land will vest in the State which will have to be done after determining the compensation payable having regard to the price paid by the purchaser. In the instant case, the respondent No.4 claims to have purchased the land for Rs.70 lakhs. As pointed out by Mr. Krishnan Venugopal B himself, as per the jantri price of the lands at that time, i.e. even at the Government rate in 2008, the land was worth Rs.4.35 crores. The collector was expected to dispose of the land by auction ~1hich is the normal method for disposal of natural resources which are national assets. Out of that amount, the c compensation payable to the respondent no.4 would have been around Rs. 70 lakhs having regard to the amount that the respondent No.4 had paid. This is because respondent no. 4 had purchased agricultural land to put up an industry, and they had taken no steps whatsoever for over five years to set up the industry. They were not expected to purchase the land, and 0 thereafter sell it for profiteering. The Jantri price is an. official price. In actual auction the State could have realised a greater amount. In permitting the sale inter-se parties, the State exchequer has positively suffered.

E (ii) On the other hand, in the event, the Collector was to form an opinion after receiving the bids or otherwise that it was not worth disposing of the land in that particular way, he could have divested Respondent No. 4 of the land by paying compensation, and re-allotted the same to the Respondent No F 5 at an appropriate consideration. The statute required him to act in a particular manner and the land had to be dealt in that particular manner only, and in no other manner, as can be seen from the legal position, accepted in various judgments based on the proposition in Taylor vs. Taylor. G

55Copy pinpoint55. Thus inspite of the Secretaries repeating their advice, the Minister of Revenue Smt. Anandiben Patel has insisted on treating this case as a special case for which she has recorded no justifiable reasons whatsoever, and orders were issued H accordingly. Under Section 89A(3), the Government is the

DIPAK BABARIA & ANR. v. STATE OF GUJARAT & 127 ORS. [H.L. GOKHALE, J.] appellate authority where the Collector does not grant a A certificate for purchase of bonafide industrial purpose. Thus what has happened, thereby is that the powers of the statutory authority have been exercised by the Government which is an appellate authority. B

56Copy pinpoint56. The State Government gave three additional reasons when it defended its decision. (i)The first reason was that if the land had been directed to be vested in the State Government, State would have been required to pay compensation to lndigold, and it would have been a long-drawn process for determining the valuation of the land, and thereafter for finding the suitable and interested party to set up an industry. As stated earlier, this plea is not tenable. If the law requires something to be done in a particular manner, it has got to be done in that way and by no other different manner. (ii) The second reason given was that the action was in State's own interest because through its public sector undertaking i.e. GMDC, it was involved in the transaction viz. that is it is going to have 26% equity. As far as this part is concerned again it is difficult to accept this reason also because one does not know what will be the value of shares of the new company. (iii) Third reason given was that the land was worth Rs.4.35 crores as per the Jantri in 2008, and as per the revised Jantri in 2011 it had come down to Rs.2.08 crores. This is a situation which was brought about by the State itself and this cannot be a ground for the State to submit that it would not have gained much in the process. F

57Copy pinpoint57. That apart it has to be examined whether the Government had given sufficient reasons for the order it passed, at the time of passing such order. The Government must defend its action on the basis of the order that it has passed, and it G cannot improve its stand by filing subsequent affidavits as laid down by this Court long back in Commissioner of Police, Bombay vs. Gordhandas Bhanji reported in AIR 1952 SC 16 in the following words:-

"Public orders, publicly made, in exercise of a H

p. 128 Copy page pinpoint

A statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are B intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself "

C This proposition has been quoted with approval in paragraph 8 by a Constitution Bench in Mohinder Singh Gill vs. Chief Election Commissioner reported in 1978 (1) SCC 405 wherein Krishna Iyer, J. has stated as follows:-

"8. The second equally relevant matter is that when D a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by_ additional grounds later brought out."

In this context it must be noted that the Revenue Minister's direction merely states that it is a private land, and the Governments letter dated 18.12.2009 speaks of the financial incapability of lnidgold. Neither the letter dated 18.12.2009 from the Government to the Collector, nor the order passed by the Deputy Collector on 15.1.2010 mention anything about:

1. the mineral policy of the Government of Gujarat. G

2. the time taking nature of the process of acquiring the land and re-allotting it.

3. That the second sale was under the authority of the Collector available to him under the first proviso to Section H 89(1) read with condition no. (4) of the permission dated

DIPAK BABARIA & ANR. v. STATE OF GUJARAT & 129 ORS. [H.L. GOKHALE, J.] 1.5.2003 granted to lndigold to purchase the concerned lands.

In the absence of any of these factors being mentioned in the previous orders, it is clear that they are being pressed into service as an after-thought. The Government can not be allowed to improve its stand in such a manner with the aid of affidavits.

58Copy pinpoint58. As noted earlier, the State Government is an Appellate Authority under sub-section 3 of Section 89A, and it could not have given a direction to the Collector who was supposed to take the decision under his own authority. We may profitably refer to a judgment of a Constitutional Bench in State of Punjay vs. Harl Kishan reported in AIR 1966 SC 1081. In that matter, the respondent desired to construct a cinema at Jhajhar. He submitted an application and under the orders of the State Government all applications were directed to be referred to the o State Government. Therefore, though his application was ·initially accepted, the SDO informed him that the application was rejected. He appealed to the State Government and the appeal was rejected which has led to the petition in the High Court. The Punjab High Court framed the question as to whether the State of Punjab was justified in assuming the .E _jurisdiction which was conferred on the licensing authority by the act. The Supreme Court held in paragraph 4 of the judgment, that the course adopted by the State of Punjab had resulted in the conversion of the appellate authority into the licensing authority. That was not permissible, and so it is in the present case. The reliance by the State Government on the overall control of the State under Section 126 of the Tenancy Act cannot be used when in the instant case the power is with the Collector and the appellate power is with the State Government. The power under Section 126 can be utilized for giving general guidelines, but not for interference or giving directions in individual cases.

59Copy pinpoint59. The submission that condition No.4 of the permission ·to Pl.\rchase, obtained by respondent No.4 in 2003 permits the H

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A Collector to pass such an order is equally untenable. There is nothing in the statutory scheme to suggest that a second sale, inter se parties, after the failure of a purchaser to set up an industry is permissible. In such an event, the statute requires an enquiry to be conducted by the collector. If he is satisfied B that there is a failure to set up the industry, the compensation to be paid to the purchaser is determined. After this stage the land vests in the Government. It is thus clear that the condition No 4 in the permission obtained by Respondent No. 4 is bad in law, not having its basis in any statutory provision. Even C assuming that the Collector had that power to lay down such a condition, the authority to permit the sale as per the said condition had to be exercised by him in the manner contemplated under Section 89 A (5) viz. after holding the enquiry as prescribed. Here the enquiry itself was dispensed with. Rule 45(b) of the Bombay Tenancy and Agricultural Lands D Rules, 1959 also cannot be pressed into service for the reason that, neither under Section 89 nor under Section 89A, a sale inter-se parties is contemplated or permitted.

60Copy pinpoint60. Now, what is to be noted is that wherever an agriculturist E is in possession of a land, either as an owner or as a tenant protected by the statute, transfer of his land for industrial purposes is subject to the conditions regulated by the Act. It is for the protection and preservation of the agricultural land that the bar against conversion is created under Section 89. F Thereafter, as an exception, only a bonafide use for industrial purpose is permissible under section 89A. Ownership of respondent No.4 was subject to the conditions of utilization for bonafide industrial purpose, and it was clear on record that respondent No.4 had failed to utilize the land for bonafide industrial purpose. The reliance on Sections 7 and 10 of the G Transfer of Property Act is also misconceived in the present case, since the Tenancy Act is a welfare enactment, enacted for the protection of the agriculturists. It is a special statute and the sale of agricultural land permitted under this statue will have to be held as governed by the conditions prescribed under the H statute itself. The special provisions made in the Tenancy Act

DIPAK BABARIA & ANR. v. STATE OF GUJARAT & 131 ORS. [H.L. GOKHALE, J.] will therefore prevail over those in the Transfer of Property Act A to that extent.

61Copy pinpoint61. Besides, the present case is clearly a case of dictation by the State Government to the Collector. As observed by Wade and Forsyth in Tenth Edition of Administrative Law:- B "if the minister's inteNention is in fact the effective cause, and if the power to act belongs to a body which ought to act independently, the action taken is invalid on the ground of external dictation as well as on the obvious grounds of bad faith or abuse of power". c The observations· by the learned authors to the same effect in the Seventh Edition were relied upon by a bench of three judges of this Court in Anirudhsinhji Karansinhji Jadega and anr. vs. State of Gujarat reported in 1995 (5) SCC 302. In this matter the appellant was produced before the Executive Magistrate, D Gondal~ on the allegation that certain weapons were recovered from him. The provisions of TADA had been invoked. The appellant's application for bail was rejected. A specific point was taken that the DSP had not given prior approval and the invocation of TADA was non-est. The DSP, instead of granting E prior approval, made a report to the Additional Chief Secretary, and asked for permission to proceed under TADA. The Court in para 13, 14, 15 has held this to be a clear case of'dictation', and has referred to Wade and Forsyth on 'Surrender Abdications and Dictation'. F

62Copy pinpoint62. The respondent No.5 had the courage to state that the notings of the Secretaries were inconsequential. As a beneficiary of the largesse of the Government, respondent No.5 could say that, but it is not possible for us to accept the same. In Trilochan Dev Sharma vs. State of Punjab reported in AIR G 2001 SC 2524 what is observed by this Court is relevant for our purpose "In the system of Indian Democratic Governance, as contemplated by the constitution, senior officials H

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A occupying key positions such as Secretaries are not supposed to mortgage their own discretion, volition and decision making authority and be prepared to give way or being pushed back or pressed ahead at the behest of politications, for carrying out commands having no sanctity in law. " A higher civil servant normally has had a varied experience and the ministers ought not to treat his opinion with scant respect. If Ministers want to take a different view, there must be compelling reasons, and the same must be reflected on the record. In the present case, the Secretaries had given advice in accordance with the statute and yet the Minister has given a direction to act contrary thereto and permitted the sale which is clearly in breach of the statute.

63Copy pinpoint63. Now, the effect of all that is stated above is that the 0 land which was purchased by respondent No.4 for Rs.70 lakhs is permitted by the Government of Gujarat to be sold directly to respondent No.5 at Rs.1.20 crores to set up an industry which could not have .been done legally. It is undoubtedly not a case of loss of hundreds of crores as claimed by the appellants, but E certainly a positive case of a loss of a few crores by the public exchequer by not going for public auction of the concerned property. It is true as pointed out by Mr. Venugopal, learned senior counsel that in a given case the state may invite an entrepreneur and give an offer. However, in the instant case, · F the sale of the land for industrial purpose is controlled by the statutory provisions, and the State was bound to act as per the requirements of the statute. The minister's direction as seen from the record clearly indicates an arbitrary exercise of power. The orders passed by the Government cannot therefore be G sustained. As seen earlier, there is neither a power nor a justification to make any special case, in favour of the Respondent No 5. Such exceptions may open floodgates for similar applications and orders, even though the Gujarat Government is contending that this order is purportedly not to H ,be treated as a precedent.

DIPAK BABARIA & ANR. v. STATE OF GUJARAT & 133 ORS. [H.L. GOKHALE, J.]

64Copy pinpoint64. In our view, considering the scheme of the act, the process of industrialization must take place in accordance therewith. As stated earlier if the law requires a particular thing should be done in a particular manner it must be done in that way and none other. The State cannot ignore the policy intent and the procedure contemplated by the statute. In the instant case, the State could have acquired the land, and then either by auction or by considering the merit of the proposal of respondent No.5 allotted it to respondent No.5. Assuming that the application of the Respondent No 5 was for a bona-fide purpose, the same had to be examined by the industrial commissioner, to begin with, and thereafter it should have gone to the collector. After the property vests in the Government, even if there were other bidders to the property, the collector could have considered the merits and the bona~fides of the application of Respondent No. 5, and nothing would have prevented him from following the course which is permissible under the law. It is not merely the end but the means which are of equal importance, particularly if they are enshrined in the legislative scheme. The minimum that was required was an enquiry at the level of the Collector who is the statutory authority. Dictating him to act in a particular manner on the assumption by the Minister that it is in the interest of the industrial development would lead to a breach of the mandate of the . statute framed by the legislature. The Ministers are not expected to act in this manner and therefore, this particular route through the corridors of the Ministry, contrary to the statute, cannot be approved. The present case is clearly one of dereliction of his duties by the Collector and dictation by the Minister, showing nothing but arrogance of power.

65Copy pinpoint65. The High Court has erred in overlooking the legal position. It was expected to look into all the earlier mentioned aspects. The impugned judgment does not reflect on the issues raised in the petition. It could not be said that the petition was delayed and merely because investment had been made by the respondent No.5, the court would decline to look into the important issues raised in the PIL. H

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A Epilogue:-

66Copy pinpoint66. Before we conclude, we may observe that India is essentially a land of villages. Although, urbanization and industrialization is taking place, the industry has not developed sufficiently, and large part of our population is still required to 8 depend on agriculture for sustenance. Lands are, therefore, required to be retained for agricultural purposes. They are also required to be protected from the damage of industrial pollution. Bonafide industrial activity may mean good income to the entrepreneurs, but it should also result into good employment and revenue to the State, causing least pollution and damage to the environment and adjoining agriculturists. While granting the permission under Section 89A (5) the Collector has to examine all these aspects. This is because the only other exception for conversion of agricultural lands to non-agricultural purpose is for those lands which are in an industrial zone. As far as the conversion of lands otherwise than those in the industrial zone is concerned, all the aforesaid precautions are required to be taken when a decision is to be arrived at as to whether the application is for a bonafide industrial purpose. In E the instant case, there were newspaper reports of apprehensions and protest of the adjoining farmers. The Revenue Secretary and the Chief Secretary had placed the statutory provisions on record. It was expected of the Government and the Revenue Minister to take cognizance of F these apprehensions of the farmers as well as the statutory provisions brought to her notice by the secretaries. She has simply brushed aside the objections of the secretaries merely because the Chief Minister's secretary had written a letter, and because she was the minister concerned. While over-ruling the opinion of secretaries to the concerned department, the G Minister was expected to give some reasons in support of the view she was taking. No such reason has come on record in her file notings. She has ignored that howsoever high you may be, the law is above you.

DIPAK BABARIA & ANR. v. STATE OF GUJARAT & 135 ORS. [H.L. GOKHALE, J.]

67Copy pinpoint67. Development should not be measured merely in terms A of growth of gross domestic product, but it should be in terms of utility to the community and the society in general. There is a certain inbuilt wisdom in the statute which is the mandate of the legislature which represents the people. The Minister has clearly failed to pay respect to the same. s Hence, the following decision:-

68Copy pinpoint68. Having noted the legal position and the factual scenario, the impugned judgment and order passed by the High Court will have to be set aside. The prayers in the PIL will have c to be entertained to hold that the direction of the State Government dated 18.12.2009 and the consequent order issued by the Collector of Kutch on 15.1.2010 is arbitrary, and bad in law for being in violation of the scheme and the provisions of Sections 89 and 89A of the Tenancy Act. The 0 direct sale of land by lndigold to Alumina is also held to be bad in law, and inoperative.

69Copy pinpoint69. (i) In normal circumstances, the order hereafter would have been to direct the Collector to proceed in accordance with Section 89A(5) viz., to hold an enquiry to decide whether the purchaser viz. lndigold had failed to commence the industrial activity and the production of goods and services within the period specified. In the instant case, there is no need of any such direction to hold an enquiry, in view of the letter of lndigold itself, dated 6.12.2008, wherein, it clearly stated that they were no more interested in putting up any industrial project in the said land.

(ii) Consequently, there will be an order that the land shall vest in the State Government free from all encumbrances. This vesting order, however, has to be on payment of appropriate compensation to the purchaser as the Collector may determine. In the instant case, there is no need of having this determination, for the reason that lndigold has received from Alumina Rs. 1.20 crores as against the amount of 70 lakhs, which it had paid to the agriculturists when it bought those lands H

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A in 2003. Neither lndigold nor Alumina is making any grievance towards this figure or the payment thereof. In fact, it is the case of both of them that the direct sale by lndigold to Alumina for this amount as permitted by the State Government be held valid. That being so, this amount of Rs. 1.20 crores would be set-off towards the compensation which would be payable by the State Government to the purchaser lndigold, since the land was originally purchased by lndigold, and is now to vest in the State Government.

(iii) The third step in this regard is that the land is to be disposed off by the State Government, having regard to the use of the land. The land was supposed to be used for the industrial activity on the basis of the utilization of bauxite found in Kutch, and respondent No. 5 has proposed a plant based on use of bauxite. The disposal of the land will, however, have to be at least as per the minimum price that would be receivable at the Government rate. In the facts and circumstances of this case, having noted that the respondent No.5 claims to have made some good investment, and that the Respondent No.5 has also offered to pay, without prejudice, the difference between E Rs.4.35 crores and Rs.1.20 crores i.e. Rs.3.15 cores to the State, the land will be permitted to be disposed of by the State Government to Alumina provided Alumina pays this amount of Rs. 3.15 crores to the State Government. This particular order is being made having further noted that, Alumina has acted on the basis of the commitment made to it by the Government of F Gujarat in the Vibrant Gujarat Summit, and in furtherance of the industrial development policy of the State. It is also relevant to note that the respondent No.5 had made an application to the Collector in the year 2009 for permitting the purchase of the land, and has been waiting to set up its industry for the last four G years. Mr. Ahmadi, learned senior counsel appearing for the appellants has also submitted that, as such, appellants are not against the development of Kutch area, but they do want the state to follow the law and exchequer not to suffer. In the circumstances, although we do not approve the action of the. H State Government, and hold it to be clearly arbitrary and

DIPAK BABARIA & ANR. v. STATE OF GUJARAT & 137 ORS. [H.L. GOKHALE, J.] untenable, we are of the view that the aforesaid order will be A appropriate to do complete justice in the matter.

70Copy pinpoint70. In the circumstances, we pass the following orders:- (a) The appeal is allowed in part; B (b) The impugned judgment and order passed by the High Court is set-aside;

(c) The PIL No.44 of 2012 filed by·ihe appellants is allowed by holding that the order dated 18.12.2009 passed by the Government of Gujarat and by the Collector of Kutch on C 15.1.2010, are held to be arbitrary and bad in law; (d) In the facts and circumstances of this case, the sale of the concerned land by lndigold to Alumina is held to be bad in law. The land involved in the present case is held to have vested 0 in the State of Gujarat free from all encumbrances, and the amount of Rs. 1.20 crores paid oy Alumina to lndigold is treated as full payment towards the ~mpensation ·payable by the State to lndigold. (e) If Alumina is interested in their proposed project, it shall pay an amount of Rs. 3.15 crores to the Government of Gujarat within three months hereafter. On such a payment being made, an order of allotment of the land to Alumina will be issued by the State Government. The further activities of Alumina on the concerned parcel of land will start only after this payment is made, and in the event the amount is not so paid within three months hereafter, the Government will proceed to take further steps to dispose of the land having regard to the use of the land.

(f) In the facts of the present case, there shall be no order as to costs. G

R.P. Appeal partly allowed.