KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS.
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- Court
- Supreme Court of India
- Decided
- Bench
- V. GOPALA GOWDA and ARUN MISHRA
- Citation
- [2016] 11 S.C.R. 263
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Headnote — Supreme Court Reports (editorial summary, not part of the judgment)
Catchwords
Land Acquisition Act, 1894: Parts II and VII; ss. 3(j), 4, 6, 5A. 9 and 11 - Acquisition of lancf - At the instance of a particular Company for its project - c Notification uls 4(1) stating therein that the land was likely to be needed to be taken by the Government/Government Undertaking/ Development Authorities for a public purpose viz. employment generation, socio-economic development by setting up an industrial project of a particular Company - Objections u/s 5-A filed - D Objections were rejected by Land Acquisition Collector and stated in its report that the acquisition by State Industrial Development Corporation was for public purpose - Piirsuant thereto Notification u/s. 6 issued - Award of compensation - The Corporation took possession of the land - Lease Deed executed in favuur of the Company - Acquisition proceedings challenged - High Court upheld the acquisition - On appeal
Held
Pt;r V. Gopala Gowda, J.: Acquisition in the present case was for 'a Company and hence not covered under 'public purpose' - When the acquisition is for a company, procedure to be adopted is laid down in Part VII r/w rules framed thereunder - Since the procedure under Part VII was not followed, the acquisition is grossly perverse, illegal and void ab initio - The objections u/s 5-A have been rejected without assigning any clear reason or application of mind rendering the report of the Land Acquisition Collector invalid - The award of compensation is also vitiated for non-compliance of provisions uls. 9 - Per Arun Misltra, J.: There can be an acquisition for public purpose and ultimately the land may go on lease or other mode of transfer 'to a company in case the compensation is paid out of public revenue - In the present case the State Industrial Development Corporation i.e. a Govt. Authority was the acquiring body and compensation paid by. it is to be treated out of public revenue - Therefore, the H 263
A acquisition was for public purpose and hence procedure adopted under Part II cannot be said to be impermissible - Non-compliance of provisions under s.9 in awarding the compensation would also not vitiate the Notifications ulss. 4 and 6 - However, there was no objective consideration of objections u/s. 5-A at any stage - The inquiry held uls. 5-A was a farce and therefore, the entire acquisition stands vitiated -- Per Court: Acquisition of the land is illegal and void - Directions to restore the possession of the land to respective land-owners - Compensation which has already been paid, not to be recovered - Land-owners who have not withdrawn the compensation, permitted to withdraw the same. c Part-JI and Part VII-Distinction between-PerArun Mishra, J.: Existence or non-existence of a public purpose is not a primary distinguishing factor between the acquisition under Part II and that under Part VII - The real point of distinction is the source of.funds to cover the cost of acquisition - The second proviso to s.6(I) is the main driving ground for the two types of acquisit:"ri. Practice and Procedure: Government litigant - Change in stand by subsequent Government - Permissibility -
Held
Per V. Gopa/a Gowda, J.: Though rule of law cannot be sacrificed for the sake of fi1rthering E political agenda - However, the subsequent Government can change the stand if there is material on record to show that the earlier action by the Government was illegal or suffered from legal malafides or colourable exercise of power.
Catchwords
Affidavits - Binding effect, on the Supreme Court -
Held
Per V. Gopala Gowda, J.: Supreme Court is not bound by affidavits and counter affidavits filed by parties - The Court in exercise of its power u/Art.136 can decide the legality of the issue on the basis of the material on record - Constitution of IndiaArt.-136. Doctrines/Principles: G Principles of stare decisis - Discussed. Allowing the appeals, the Court HELD: Per V. Gopala Gowda, J. 1.1 It cannot be said that the State of West Bengal cannot
A Per ARUN MISHRA, J: (Partly concurring)
Held
1.1 "Public purpose" has been defined in section 3(1) of the Land Acquisition Act. The definition is inclusive and the Amendment Act, 1984 excludes the acquisition for Company from the definition of "public purpose". Acquisition of land for Company has been - B dealt with under Part VII of the Act. Under section 39 previous consent of the appropriate Government and execution of agreement is necessary for acquiring land for a Company. Both sections 6 to 16 and sections 18 to 37 shall not be used to acquire land for any Company under Part VII unless the previous consent of the appropriate Government has been obtained and Company · c has executed the agreement as provided in section 41 of the Act. Section 41 further provides that in the case of acquisition for a Company the payment of the cost of acquisition has to be borne by the Company and other matters as specified in section 41 are also to be provided in the agreement. Such an agreement is required to .be published in the Official Gazette and a statutory force is given to its terms on which the public shall be entitled to use the work. [Para 4] [336-H; 337-A-C] 1.2 Section 3(f) though excludes the acquisition for a Company. However, at the same time it is inclusive definition and it is provided in section 3(1) that it includes the provision for development ofland from public funds in pursuance of any scheme or policy of the Government and subsequent disposal thereof in whole or in part by lease, assignment or outright sale with the object of securing further development as planned. Public purpose in section 3(iv) also includes the provision ofland for a corporation ' F owned or controlled by the State. The West Bengal Industrial Development Corporation is established by the State. [Para 5] [337-D] 1.3 Public purpose has to be adjudged in the background of the facts of the instant case and the State of West Bengal decided to make effort to establish manufacturing industries with a view to attract more private sector investment and foreign direct investment for industrialization at par with the model adopted by other progressive States. It has considered the offer of Company - manufacturer of Nano car - as an opportunity for establishing manufacturing industry so as to further grab attention
Reporter's headnote (continued) and case details
[2016] 1l S.C.R. 263
(Civil Appeal No. 8438 of2016)
264 SUPREME COURT REPORTS r20l61 l l S.C.R.
Footnotes
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A indicates that the acquisition ofland for companies is not covered within the public purpose. A perusal of the notification issued under Section 4(1) of the Land Acquisition Act clearly shows that the proposed lands in the notification are needed for the setting up of the Tata Small Car project. The Cabinet Memo dated 30.05.2006 mentioned acquisition of lands by West Bengal B Industrial Development Corporation (WBIDC) for the purpose of setting up of the Tata Motor's 'Small Car Project' in the State of West Bengal. [Paras 52, 53, 54] [323-B, C-E] 2.3 As is evident from the Notifications issued under the Act and from the· cabinet memo, there is no mention about such c requisition being made by the Corporation (WBIDC) to.the State Government regarding the proposed lands being required for acquisition in favour of WBIDC for planned development of land in pursuance of any ..scheme or policy of the Government. Even from a perusal of the letter dated 29.08.2006, written by the Joi.ut · D Secretary, Land and Land Reforms Department, Government of West Bengal, it becomes clear that the State Government did not apply its mind while considering the need of the land and merely followed the document on which the Collector had signed. [Para 55] [323-G-H; 324-A] E 2,4 Even if it is accepted that it was the policy of the State Government to generate employment and increas.e socio- economic development in the State, the relevant policy iJocuments are not forthcoming in the original acquisition files which were made available for this Court. Thus, by no stretch of imagination can the acquisition of lands in the instant case be said to be at the instance of WBIDC, or for the fulfilment of some scheme of the Corporation or the State Government. Thus, it cannot be said to attract Section 3(f)(iii), (iv) or (vi) either. [Para 56] [324-E-F] 2.5 It is undisputed fact that the State Government has not deposited the public money towards the cost of acquisition ofland to initiate the acquisition proceedings to show that the acquisition of lands is for public purpose which is an essential requirement under the provision of.Section 6 of the Act. The notification issued under Section 6 of the Act merely provides tlfat the land is needed for the setting up of the Tata Small Car project, which is a public purpose under the Act. [Para 56] [325-A~C)
267
2.6 There seems to be no application of mind either at the stage of issuance of the notification under Section 4 of the Act, or the report of Collector under Section 5-A (2) of the Act or the issuance of the final notification under Section 6 of the Act. Such an acquisition, if allowed to sustain, would lead to the attempt to justify any and every acquisition of land of the most vulnerable sections of the society in the name of 'public purpose' to promote socio-economic development. Neither there is a scheme of the Government, nor the funds have been derived from the public revenue and that is why the acquisition in the instant case cannot be said to be one for 'public purpose'. [Paras 56, 57) [325-G-H; [326-A, DJ c
2. 7 After the passing of the Land Acquisition Amendment Act, 1984, acquisition of land for a company is no longer covered under 'public purpose' in view of Section 3(f)(viii) of the Land Acquisition Act. Apart from the above statutory provisions inserted by way of an amendment, the Objects and Reasons for such amendment that the mandatory procedure as laid down under Part VII of the Act read with the rules framed thereunder was not followed by t_he State Government bl.'fore the notifications were published. [Para 58) [326-F-G) 2.8 Before land could be acquired, the procedure consistent with the statutory provisions oflaw must be followed mandatorily. There is nothing in law which would support the acquisition of land for a particular Company under the guise of 'public purpose', rendering the exception provided under Section 3(f)(viii) of the Act useless and nugatory. [Para 59) [327-C] F 2.9 In this day and age of fast paced development, it is completely understandable for the State Government to want to acquire lands to set up industrial units. What, however, cannot be lost sight of is the fact that when the brunt of this 'development' is borne by the weakest sections of the society, more so, poor agricultural workers who have no means of raising a voice against G the action of the mighty State Government, as is the case·in the instant fact situation, it is the onerous duty of the State Government to ensure that the mandatory procedure laid down under the Act and the Rules framed thereunder are followed scrupulously otherwise the acquisition proceedings will be H
268 SUPREME COURT REPORTS [2016] 11 S:C.R.
A rendered void ab initio in law. Compliance with the provisions of the Act cannot be treated as an empty formality by the State Government, as that would be akin to handing over the eminent domain power of State to the executive, which cannot be permitted in a democratic country which is required to be governed by the rule of law. It is also a well settled principle of law that if the B manner of doing a particular act is prescribed under any statute the act must be done in that manner or not at all. [Para 63] (328- E-G; 330-D] 2.10 In the instant case, what makes the acquisition proceedings perverse is that the proper procedure as laid down c under Part VII of the Land Acquisition Act read with Rules was not followed by the State Government. The acquisition of land for and at th~ instance of the Company was sought to be disguised as acquisition of land for 'public purpose' in order to circumvent compliance with the mandatory provisions of Part VII of the Land D Acquisition Act. This action of the State Government "is grossly perverse and illegal and void ab in~tio in law and such an exercise of power by the State Government for acquisition of lands cannot be allowed under any circumstance. If such acquisitions of lands are permitted, it would render entire Part VII of the Land Acquisition Act as nugl;ltory and redundant, as then virtually every acquisition of land in favour of a Company could be justified as one for a 'public purpose' on the ground that the setting up of industry would generate employment and promote socio-economic development in the State. That could not have been the intention of the legislature in providing the provisions of Part VII read with s.3(f) of the Land Acquisition Act. [Para 64] (331-A-D] 2.11 From a perusal of the materials on record it becomes clear that in the instant case, the lands in question were acquired by the State Government for a particular Company, at the instance of that Company. Further, the exact location and site of the land was also identified by Company. Even the notifications ,issued under Sections 4 and 6 of the Act clearly state that the land in question was being acquired for the 'Small Car Project' of the Company. In view of the foregoing reasons, by no stretch of imagination can such an acquisition of lands be held to be one for 'public purpose' and not for a Company. [Para 64] [331-D-F) H
KEDAR NATH YADAV v. STATE OF WEST BENGAL' & ORS. 269
2.12 Admittedly, the procedure for acquisition as A contemplated under Sections 39, 40 and 41 of Part VII of the Act read with Rules 3, 4 and 5 of the Land Acquisition (Companies) Rules, 1963 has not been followed, as the acquisition was sought to be guised as one for 'public purpose' under Sections 3(f) (iii), (iv) and (vii) of the Act. The acquisition of land in the instant case 8 in favour of the Company is thus, improper for not following the mandatory procedure prescribed under Part VII of the Act and Rules and therefore the acquisition proceedings are liable to be quashed. [Para 65) [332-A-B] S. Pratap Singh v. State of Punjab AIR 1964 SC 72 : 1964 SCR 733 - followed. c Devender Pal Singh v. State. of Punjab 2007 (11) SCR 475 : (2008) 1 sec 728; R. L. Arora V. State of U.P. AIR 1962 SC 764 : 1962. Suppl. SCR 149; Valjibhai Muljibhai Soneji v. State of Bombay & Ors. AIR 1963 SC 1890 : 1964 SCR 686; Calcutta State D Road Transport Corporation v. Commissioner of Income Tax, West Bengal 1996 (3) SCR 50 : (1996) 8 SCC 758; S. Sundaram Pillai & Ors. v. R. Pattabiraman & Ors. 1985 (2) SCR 643 : (1985) 1 SCC 591; Royal Orchid Hotels Ltd. v. G. Jayaram Reddy & Ors. 2011 . (11) SCR 701 : (2011) 10 SCC 608; Raghubir Singh E Sherawat v. State of Haryana and O:s. 2011 (14) SCR 1113 : (2012) 1 SCC 792; Surinder Singh Brar & Ors. v. Union of India 2012 (12) SCR 1077 : (2013) 1 SCC 403; State of Punjab v. Gurdial Singh 1974 AIR 1871: 1974 (3) SCR 657; Babu Verghese & Ors. v. Bar F Council Of Gerald & Ors. 1999 (1) SCR 1121: (1999) 3 sec 422 - relied on. Pandit Jhandu Lal v. State of Punjab (1961) 2 SCR 459; Somawanti v. State of Punjab AIR 1963 SC 151 : 1963 SCR 774; Jage Ram v. State of Haryana 1971 (3) G SCR 871 : 1971 (1) SCC 71; Ajlatoon v. Lt. Governor of Delhi 1975 (1) SCR 802 : (1975) 4 sec 285; Pratibha Nema v. State of M.P. 2003 (1) Suppl. SCR 890 : {2003) 10 SCC 626 ..- distinguished. Amarnath Ashram Trust Society & Anr. v. Governor of · U.P. & Ors. 1997 (6) Suppl. SCR 143: (1998) 1 SCC H
270 SUPREME COURT REPORTS (20 I 6] I I S.C.R.
A 591; Chaitram Verma and Ors. v. Land Acquisition Officer, Raipur and Ors. A.I.R. 1994 MP 74; Pooran and Ors. v. State of U.P. and Ors. 2010 Supp All. L.J. 1; Mandir Shree Sita Ramji v. Land Acquisition Collector & Ors. 2005 (2) Suppl. SCR 969 : (2005) 6 SCC 745; Usha Stud and Agricultural Farms Pvt. Ltd. v. State of B Haryana & Ors. 2013 (5) SCR 645 : (2013) 4 SCC 210 - referred to. 3.1 From a perusal of the materials on record and original acquisition files, it is evident that a large number of objections were filed by the land owners before the notification was issued c under Section 4 of the Act. The same were not considered properly under Section 5-A (2) of the Act. Notices were issued to the objectors individually but the same could not be served upon the owners/cultivators of the proposed lands to be acquired. [Para 68] [333-C-D] D 3.2 Even though the land owners/cultivators did not appear before the Land Acquisition Collector, the objections filed by them ought to have been considered objectively by him as required under Section 5-A (2) of the Act. Additionally, seven objections were filed under Section 5-A itself and some of the objections pertained to persons who were already running industrial units. [Para 68] [333-F-G] 3.3 Some of these objectors were not given the opportunity to be heard as required under Section 5-A (2) of the Act. The same ought to have been given to them as required both under the statutory provisions of the Act as well as the principles of natural justice, as the acquisition of lands of the objectors would entail a serious civil consequence. [Para 69) [334-B-C]
Mandir Shri Sita Ramji v. Lt. Governor of Delhi 1975
(1) SCR 597 : (1975) 4 SCC 298 - followed. G Babu Ram v. State of Haryana 2009 (14) SCR 1111 : (2009) 10 sec 115 - relied on. 3.4 From a perusal of the proceedings before the Collector, which are made available to this C011rt, it becomes clear that the same have been rejected without assigning any clear reasons or H
271 application of mind. Thus, the report of the Collector is not a A valid report in the eyes of law. The State Government has mechanically accepted the same without application of mind independently before issuing notification under Section 6 of the Land Acquisition Act declaring that the lands are required for establishment of automobile industry by the Company. [Paras 70, B 71) [335-D-F) 4.1 After issuing the notifications under Section 6 of the Land Acquisition Act declaring that the lands have been acquired for the purpose of industrial development, a statutory duty is cast upon the Collector to issue notice to the land owners/cultivators, as required under Section 9 of the Land Acquistion Act, to c determine the market value of the acquired land and award compensation as required under Section U of the Land Acquistion Act which is mandatory for taking possession of the land by the State Government. [Para 72) [335-G] 4.2 It is evident from material on record that no individual notices were served upon the land owners/cultivators. A joint inquiry appears to have been conducted by the Land Acquisition Collector without giving them an adequate opportunity to establish their claim for determination of reasonable compensation for acquisition of lands by presenting true and correct market value of the lands. The determination of market value of lands by clubbing a number of cases together and passing a composite award is no award in the eyes of law. The inquiry, as contemplated under Section 11 of the Land Acquistion Act, is a quasi judicial exercise of power on the part of the Collector in awarding just and reasonable compensation to the landowners/ F cultivators. That has not been done in the instant case. Further, the proviso to Section 11(1) of the Land Acquistion Act provides that no award shall be made by the collector without the previous approval of either the appropriate Government or such officer authorised by it for the above purpose. It was also brought to G the notice of this Court that supplementary awards were also passed which is not legally permissible in law. For non-compliance of the above provisions of the Land Acquistion Act, the composite awards are vitiated in law and therefore, the same are also liable to be quashed. [Para 73) [336-A-D) H
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273 of automobile industry in the State of West Bengal to boost its economy for creating job opportunities, direct and indirect impact on secondary employment in the associated services. The proceedings were initiated under the Act and the West Bengal Industrial Development Corporation (WBIDC) was the acquiring body which bore the entire cost of acquisition. [Para 6) [337-E-G] B 1.4 It is apparent from the provisions contained in second proviso to section 6 that declaration under section 6 shall not be made unless the compensation to be awarded for such property is to be paid by a Company either wholly or partly out of public revenues or some fund controlled or managed by a local authority. The Explanation second to section 6(1) of the Act makes it clear c that where the compensation awarded for the property is to be paid out of funds of a corporation owned or controlled by the State, such compensation shall be deemed to be compensation paid out of public revenue. Thus Explanation second makes it clear that when corporation pays the funds for acquisition of the property that such compensation shall be deemed to be paid out of public revenue. Therefore, the acquisition for a corporation is indeed within the public purpose as defined in section 3(t)(iv). Thus the concept of funds in section 6 as amended in 1984 comes into play in the case of acquisition of a land for a corporation and it is not necessary that the State Government itself should bear the cost of acquisition so as to make it expenditure out of public revenue even expenditure by the corporation owned or controlled by the State for acquisition shall be deemed to be made out of public revenues and when the land had been acquired for a corporation the land is to be vested in the Corporation though lease of the land has been granted to the Company for its aforesaid project. It would remain acquisition for a public purpose as provided in section 3(t) of the Act. [Para 6) [339-D-H] 1.5 Acquisition of land for establishing such an industry would ultimately benefit the people and the very purpose of industrialization, generating job opportunities hence it would be open to the State Government to invoke the provisions of Part II of the Act. When Government wants to attract the investment, create job opportunities and aims at the development of the State and secondary development, job opportunities, such acquisition is permissible for public purpose. [Para 7] [340-A-B) H
274 SUPREME COURT REPORTS r20l6] l l S.C.R.
A Somawanti v. State of Punjab AIR 1963 SC 151: 1963 SCR 774; Jage Ram & Ors. v. State of Haryana & Ors. (1971) 1 SCC 671 : 1971 (3) SCR 871; Narayan Govind Gavate v. State of Maharashtra (1977) 1 SCC 133 : 1977 (1) SCR 763; Arnold Rodricks v. State of Maharashtra (1966) 3 SCR 885; Sooraram Pratap B Reddy & Ors. v. District Collector, Ranga Reddy District & Ors. (2008) 9 sec 552 : 2008 (13) SCR 126; National Textile Workers' Union v. P R. Ramakrishnan & Ors. (1983) 1 SCC 228 : 1983 (1) SCR 922; Nand Kishore Gupta v. State of Uttar Pradesh and Ors. (2010) c 10 SCC 282 : 2010 (11) SCR 356 - relied on. State of Bombay v. Ali Gu/shall' AIR 1955 SC 810 : 1955 SCR 867; Dau/at Singh Surana & Ors. v. First Land Acquisition Collector & Ors. (2007) 1 SCC 641 : 2006 (8) Suppl. SCR 1076; Pandit JhanduLal v. State D of Punjab AIR 1961 SC 343 : 1961 SCR 459- referred to. Susette Keio v. City of New London 162 L.Ed 439 = 545 US 469; Samuel Berman v. Andrew Parker, 99 L.Ed 27 - referred to. E 1.6 A conjoint reading of the provisions contained in sections 3(t), 6, other provisions of Part II and the provisions contained in Part VII of the Act makes it Clear that there can be an acquisition for public purpose and ultimately land may go on lease or other mode of transfer to a company and in case the p compensation is paid out of public revenue, it would be an a~quisitiOJ! for a public purpose under Part n and ig. case compensation is borne as per the agreement provided in section 41, it would be an acquisition under Part VII of the Act. Though acquisition for public purpos,, can also be for the purpose of industrialization or for a company in case setting up of the company G has a public purpose behind it as provided in section 3(t) and payment of compensation for acquisition of land is made out of . public revenue as per the provisions of section 6 as amended in
1984. [Para 15) [365-G-H; 366-A-BJ Babu Barkya Thakur v. State of Bombay, AIR (1960) H SC 1203; Pandit Jhandu Lal v. State of Punjab, AIR
275
(1961) SC 343 : 1961 SCR 459; RL. Arora v. State of A Uttar Pradesh (1962) Supp. 2 SCR 149; Somawanti v. State of Punjab (1963) 2 SCR 774; Jage Ram & Ors. v. State of Haryana & Ors. (1971) 1 sec' 671 : 1971 (3) SCR 871; Indrajeet C. Parekh v. State of Gujarat (1975) 1 SCC 824; Aflatoon v. Lt. Governor of Delhi B _(1975) 4 SCC 285 : 1975 (1) SCR 802; Bai Malimabu v. State of Gujarat & Ors. (1978) 2 SCC 373; Manubhai Jethalal Patel v. State of Gujarat (1983) 4 SCC 553; Srinivasa Cooperative House Building Society Ltd.- v. Madam Gurumurthy Sastry & Ors. (1994) 4 SCC 675; Mandir Sita Ramji v. Land Acquisition Collector & Ors., c (2005) 6 SCC 745 : 2005 (2) Suppl. SCR 969; Amarnath Ashram Trust Society & Am: v. Governor of UP. & Ors. (1998) 1 SCC 591 : 1997 (6) Suppl. SCR 143; Pratibha Nema & Ors. v. State of MP. & Ors. (2003) 10 SCC 626 : 2003 (1) Suppl. SCR 890 - relied on. D 1.7 The existence or non-existence of a public purpose is not a primary distinguishing factor between the acquisition under Part II and acquisition finder Part VII. The real point of distinction seems to be the source of funds to cover the cost of acquisition. The second proviso to section 6-(1) is the main driving ground for the two types of acquisitions. The amendment made in 1984 E in section 6 does not deal with the concept of token consideration for such acquisition paid out of the public revenues. The second provision to section 6(1) makes it clear that where the compensation to be awarded for such property is to be paid out of the funds of the corporation, it is deemed to be compensation F paid ouf of public revenue. Section 6 requires compensation determined to be paid out of the funds of the corporation then it would be deemed to be expenditure out of public revenue to make it acqui_sition under Part II. In the instant case corporation has paid entire compensation. It is not a case of token amount paid out of public revenue. [Para 20) [380-C-E] G
Devinder Singh & Ors. v. State of Punjab & Ors. (2008) 1 SCC 728 : 2007 (11) SCR 475 - referred to. 1.8 When an application is filed by a company for acquisition bu~ the decision of the State has to be seen how -it intended to H
276 SUPREME COURT REPORTS [20 I 6] I I S.C.R.
A deal with sucJ. a prayer, is a relevant factor. In case of public purpose the ilCquisition could be made at public expense. Therefore, evidently the provisions made in Part II shall be resorted to. On the other hand if the State forms an opinion that acquisition may not be for public purpose then the State would not bear the expenses and then the procedure laid down in .Part B VII shall be resorted to. [Para 21] [380-F-G] Sooraram Pratap Reddy & Ors. v. _District Collector, Ranga Reddy District & Ors. (2008) 9 SCC 552 : 2008 (13) SCR 126; Urmila Roy & Ors. v. Bengal Peerless Housing Development Co. Ltd. & ·ors. (2009) 5 SCC c 242 : 2009 (4) SCR 834; Nand Kishore Gupta & Ors. v. State of U.P. & Ors. (2010) 10 SCC 282 : 2010 (11) SCR 356 - relied on. 1.9 For the purpose of acquiring land in the instant case it was not necessary to have recourse to the provisions contained in Chapter VII of the Act. The proposal submitted to the Cabinet ou 30.5.2006 indicates that the West Bengal Industrial Development Corporation (WBIDC) was the acquiriug body. Thus the Cabinet has approved the said proposal. WBIDC was associated with the project right from the begiuning and was instrumental iu getting the land identified by the Company for the purpose of selection. The memo for the Standiug Committee of the Cabinet on Industry dated 26.7.2006 contains the decision of acquisition of land for public purpose under Land Acquisition Act. Notification under section 4 of the Act was published in the Gazette on 21. 7.2006 in which it was mentioned that the land is likely to be needed by the Government/Government undertaking/ Development Authorities at the public expense for public purpose, viz., employment generation and socio-economic development of the area by setting up small car project. Though it was not specifically mentioned that the WBIDC is to be the acquiring body but a decision had already been taken in this regard and the aforesaid expression Government Undertaking/ Development authorities would include acquisition by WBIDC as the Government has decided to treat it as a public purpose as it was to generate direct employment to 1800 persons and by direct employment through vendors and through other service H
277 providers to 4700 persons approi. [Para 25] [398-E-F; 399-D-F] A 1.10 Similar is the position with respect to declaration under section 6 of the Act. As the Government has treated the acquisition for a public purpose and the entire money has been paid by WBIDC consequently by mere mention that the land was required for the small car project of the Company would not make B it an acquisition for a company under Part VII. Non-mention of WBIDC cannot be taken to be an illegality impinging the validity of the notification under section 4 of the Act. The fact that the application was filed by the Company indicating its willingness for setting up the industry would not also make it an acquisition for a company but how the State has dealt with the same, would c be the decisive factor. Since WBIDC was involved right from the beginning by the State Government and a decision was taken by the State Government that WBIDC would be the acquiring authority and WBIDC was involved in identification of the land and the reports were submitted by it to the Government, the acquisition was for WBIDC is apparent as the land was to vest in the WBIDC and it has paid the compensation. Payment of premium amount as per the conditions of lease agreement fastened upon the Company would also not make it a compensation paid by the Company. It was not necessary for the State Government to deposit the amount of compensation as compensation paid by the corporation is also to be treated out of public revenue. [Para 25] [399-F-H; 400-A-C] 1.11 The aims and objects of the amendment of section 3(f) when taken into consideration would not alter the aforesaid position of law. Acquisition of land for a company or for industrialization if it is for public purpose would be covered under section 3(f) as amended and when corporation is the acquiring authority and amount of compensation is borne by it in entirety and land has been ultimately leased out to the Company for its project by it the acquisition would remain for a public purpose under section 3(t) attracting Part II of the Act. The procedure adopted under Part II cannot be said to be impermissible. It cannot be said to be acquisition under guise of public purpose so as to violate the intendment of exclusion of the company from section 3(f) as amended. [Para 26] [400-C-E] H
p. 278
A 2. Various decisions rendered by this Court in post- amendment period are binding on a Co-ordinate Bench and there is no reason to take a different view on merits. Even otherwise the Court is bound by the principle of stare decisis in view of the consistent decisions of this Court. The rule of stare decisis requires that it is unnecessary to enquire or determine as to what was the B rationale of the earlier decision which is said to operate as stare tlecisis. The doctrine of binding precedent has the merit of promoting certainty and consistency in judicial decisions. The doctrine is based on 'public policy' and should be adhered to subserve the ends of justice. The doctrine has the merit of c promoting certainty and consistency in judicial decisions, and enables ·an organic development of the law, besides providing assurance to the individual as to the consequence of transactions forming part of daily affairs. The view which has held the field for a long time should not be disturbed only because another view is D possible. The decision of two Judges is binding on another Division Bench of two Judges. A Co-ordinate Bench should not disturb the decision on an identical question. The rationale of this rule is the need for continuity, certainty and predictability in the administration of justice. It is necessary to inculcate confidence in the administration of justice. It cannot be referred to a larger E Bench unless there is an error apparent on its face or that a particular earlier· decision was not noticed, which has a direct bearing or has taken a contrary view. In reviewing and revising its earlier decision, in the interests of the public good or for any other valid and compulsive reasons, it must be the constant endeavour and concern of this Court to introduce and maintain F an element of certainty and continuity in the interpretation of law. [Paras 27, 28) (400-F-H; 401-A-D, F-H; 402-A) Waman Rao v. Union of India (1981) 2 SCC 362 : 1981 (2) S~R 1; Union of India v. Raghubir Singh (1989) 2 SCC 754 : 1989 (3) SCR 316; Krishena Kumar v. Union G of India (1990) 4 SCC 207 : 1990 (3) SCR 352; lvlishri Lal V. Dhirendra Nath (1999) 4 sec 11 : 1999 (2) SCR 453; Central Board of Dawoodi Bohra Community v. State of Maharashtra (2005) 2 SCC 673 : 2004 (6) Suppl. SCR 1054; Shanker Raju v. Union of H India (2011) 2 SCC 132 : 2011 (2) SCR 1; Fida Hussain
279 v. Moradabad Development Authority & Am: (2011) A 12 SCC 615 : 2011 (9) SCR 290; Union of India v. Paras Laminates (P) Ltd. (1990) 4 SCC 453; Joint Commissioner of Income Tax, Surat v. Saheli Leasing and Industries Ltd. (2010) 6 SCC 384 : 2010 (6) SCR 747; The Keshav Mills Co. Ltd. v. CIT, AIR B 1965 SC 1636 : 1965 SCR 908 - relied on. 3.1 Even before issuance of notification under section 4 of the Act decision has been taken to acquire the land in question. The notification under section 4 is an introductory measure. [Para 31) [402-C-D] c 3.2 It is apparent from section 4(2) that after notification is issued it shall be lawful for any officer to enter upon and survey and to do all the acts which are necessary to ascertain whether land is adapted for such purpose. The notification is of exploratory character and it does not proprio motu result in acquisition. The proposal for acquisition in any particular locality ripens into definite proceedings where Government is satisfied how land is needed for public purpose. Section 4(1) does not require land to be defined or identified but requires locality to be stated so as to file objection under section 5 of the Act. In the instant case the Cabinet has taken a decision to acquire the said land beforehand for which a notification has ultimately been issued under sections 4 followed by declaration under section 6 of the Act. The right under section SA of the Act is a valuable right. [Para 32) [403-D- E] Raghubir Singh Sherawat v. State of Haryana & Ors. F (2012) 1 SCC 792 : 2011 (14) SCR 1113; Surfnder Singh Brar & Ors. v. Union of India & Ors. (2013) 1 SCC 403 : 2012 (12) SCR 1077; (}ojer Brothers Private Ltd. & Anr. v. State of West Bengal & Ors. (2013) 16 · SCC 660 : 2013 (12) SCR 489; Usha Stud & Agricultural Farms (P) Ltd. v. State of Haryana (2013) 0 4 SCC 210 : 2013 (5) SCR 645; Sharma Agro Industries v. State of Haryana & Ors. (2015) 3 SCC 341; Vinod Kumar v. State of Haryana & Ors. '(2014) 3 SCC 203; Gurbinder Kaur Brar & Anr. v. Unioil of India & Ors. (2013) 11 · sec 228 - relied on. H
p. 280
A 3.3 In the instant case it is apparent from the report that there is no objective consideration of objections at any stage. The inquiry held and ~he report sent under section 5A of the Act was clearly influenced by the decision of the Cabinet taken before issuance of notification under section 4 of the Act to acquire land in certain J L numbers in particular mouza's as per the choice of B location by the Company which has prevailed whereas in the matter of acquisition of such vast area comparative fertility aspect of chunk of land to be selected ought to have been considered and land which is more or less barren ought to have been p,referred which exercise has not been resorted to. Though the c State Government could have taken decision before issuance of notification under section 4 for setting up of project however it could not have taken decision to acquire particular land in various mouza 's before survey is undertaken as authorized by the provisions contained in section 4 of the Act, the action of the State has the effect of frustrating very purpose of holding inquiry under section 5A. The inquiry_ held under section 5A is a farce and an eyewash neither the Collector nor State Government considered the matter with objectivity as mandated. Inquiry has not been done with open mind with requisite fairness they were clearly influenced by decision of cabinet. Entire acquisition stands vitiated in the facts and circumstances of the case. The case need not be relegated to. the stage of inquiry as project itself has been abandoned. [Para 40] [414-G-H; 415-A-C] 3.4 However, for enquiry under section 5A individual notices are not provided. It is not provided in the Act that individual notices should be issued. The publications as envisaged under section 4 are enough and are the only requirement of the law to be mandatorily observed pursuant to which objections under section 5A are required to be filed. The notification under section 4 is required to be published in the Official Gazette and two daily newspapers; out of that one newspaper shall be in the regional language, and public notice of such substance has to be given at the convenient places in the locality. Within thirty days the objections are to be filed under section 5A. Thus non-service of individual notices on farmers would not vitiate the enquiry. [Para 41] [415-D-F] I-I
281
4. It appears that the award has been passed without issuance of notices to holders on the pretext that it was not possible to serve them due to prevailing situation. For determination of compensation individual notices are required to be issued. The service of personal notice is mandatory as required under section 9(3) of the Act. Non-compliance of the provision would render the award invalid requiring determination of compensation afresh at the same time it would not have the effect on the validity of the notification under section 4 and declaration made under section 6 of the Act. The award cannot be questioned in the writ jurisdiction and non-issuance of individual notices under section 9 would not vitiate the notification c issued under sections 4 and declaration made under section 6 of the Act. However, the fact remains that proper procedure has not been followed in the instant matter. The question of adequacy of the compensation determined cannot vitiate the acquisition. It was also not disputed that after the award was passed on merits, further consent awards were passed in favour of certain persons for which no authority or provision of law could be shown. Be that as it may. It would have no impact on validity of notification under section 4 or declaration made under section 6 of the Act. Determination of proper compensation cannot be co-nsida-ed in writ jurisdiction as any person aggrieved by inadequacy of compensation has the remedy to seek reference as provided in section 18 of the Act. [Paras 43, 44) [415-G-H; 416-A-E) 5.1 After acquisition of the land by WBDIC it granted lease to the Company and handed over possession. Ultimately, the _Company could not start operations as is apparent from its letter dated 28.9.2010. They had removed their equipment and machinery also. Though the project would have been beneficial, however in the circumstances it has moved out as environment could not be created for normal working of the plant as mentioned in letter of the Company. The State Government has taken possession of the land from the Company and the Company has abandoned its project in the State of West Bengal and has shifted it to the State of Gujarat. Possession has been taken ten years before from the landowners. In a case where there are no sale- deeds, evidence forthcoming compensation is awarded to land- owners on annualized yield of 10 years. [Paras 45, 46) [416-F-H] H
282 SUPREME COURT REPORTS f2016] l l S.C.R.
A S.2 In the facts of this case, it would be appropriate to direct that land is given back to all land-owners since they have been deprived of the usufruct of the land for a decade as such the compensation paid to them shall not be recovered. They are permitted to retain it or claim it in full and final settlement of claim towards damages for deprivation of use of their land etc. B [Para 46) [417-A-B] S.3 Due to violation of the provisions contained in section SA of the Act, in the facts of the case to do complete justice between the parties in exercise of power under Article 142 of Constitution, the entire proceedings pertaining to land acquisition c are quashed and case is not relegated in the instant case to the stage of inquiry under section SA of the Act as ordinarily resorted to, as the very purpose of acquisition has failed and directing an inquiry afresh would be an exercise in futility. The land shall be given back to the land owners and compensation if any paid to D them shall not be recovered from them those who have not collected it are free to collect the same in lieu of damages for deprivation of possession for ten years. [Para 47] (417-C-D] Special Land Acquisition Officer v. Virupax Shankar Nadagouda (1996) 6 SCC 124 : 1996 (S) Suppl. SCR E 2S; Collector, Land Acquisition v. Gana Ram Dhoba (1996) 1 SCJ lS - relied on. Per Court: The acquisition of land of the landowners/ cultivators in the instant case is declared as illegal and void. Since the nature of the acquired lands has been changed in view of the F acquisHion, the Survey Settlement Department of the State Government of West Bengal is directed to conduct a survey and identify the mouzas of lands acquired with reference to lay ·out plans, other connected records, village maps and survey settlement records of the lands in question within 10 weeks from the date of receipt of the copy of this order, in order to. identify _G the respective portions of land which needs to be returned to the respective landowners/cultivators. Let possession of the lands be restored to the landowners/cultivators within 12 weeks from the date of receipt pf the copy of this judgment and order. The compensation which has already been paid to the land owners/ H cultivators shall not be recovered by t!Je State Government as
283 they have been deprived of the occupation and enjoyment of their A lands for the last ten years. The landowners/cultivators who have not withdrawn the compensation are permitted to withdraw the same which is in deposit either with the Land Acquisition Collector or the Court. (417-F-H; 418-A-B) Case Law Reference B
In the Judgment of V. Go~ala Gowda, J. 2007 (11) SCR 475 relied on Para 15 1997 (6) Suppl. SCR 143 referred to Para 16 1962 Suppl. SCR 149 relied on Para 16 c 1964 SCR 686 relied on Para 18 1996 (3) SCR 50 relied on Para 18 1985 (2) SCR 643 relied on Para 18 D 2011 (11) SCR 701 relied on Para 22 A.I.R. 1994 MP 74 referred to Para29 2010 Supp All. L.J. 1 referred to Para 29 (1961) 2 SCR 459 distinguished Para30 E (1963) 2 SCR 774 distinguished Para30 1971 (3) SCR 871 distinguished Para 30 1975 (1) SCR 802 distinguished Para30 2011 (14) SCR 1113 relied on Para 31 F 2012 (12) SCR 1077 relied on Para32 2005 (2) Suppl. SCR 969 referred to Para36 2003 (1) Suppl. SCR 890 distinguished Para 37 2014 (11) SCR 765 referred to Para 42 G 2011 (14) SCR 1 referred to Para 43 1999 (3) SCR 1066 referred to Para43 19~Q (2) SCR 873 followed Para 48 2oi~ (5) SCR 645 referred to Para 56 H
284 SUPREME COURT REPORTS [2016] II S.C.R.
A 1974 (~) SCR 657 relied on Para 63 1964 SCR 733 followed Para 63 .1999 (1) SCR 1121 relied on Para 63 1975 n) SCR 597 followed Para 69 B 2009 (14) SCR 1111 relied on Para 70
In the Jndgment of Arun Mishra 2 J. 1963 SCR 774 relied on Para 7 c 1971 (3) SCR 871 relied on Para9 1977 (1) SCR 763 relied on Para 10 (1966) 3 SCR 885 relied on Para 11 2008 (13) SCR 126 relied on Paras12, 22 D 162 L.Ed 439 referred to Para 12 99 L.Ed 27 referred to Para 12 1955 SCR 867 referred to Para 13 2006 (8) Suppl. SCR 1076 referred to Para 13 E 1983 (1) SCR 922 relied on Para 13 2010 (11) SCR 356 relied on Para 14, 24 1961 SCR 459 referred to Para 14
F AIR (1960) SC 1203 relied on Para 16 1961 SCR 459 relied on Para 16 (1962) Supp. 2 SCR 149 relied on Para 16 (1963) 2 SCR 774 relied on Para Hi G 1971 (3) SCR 871 relied on Para 16 (1975) 1 sec 824 relied on Para 16 1975 (1) SCR 802 relied on Para 16 (1978) 2 sec 373 relied on Para 16 H (1983) 4 sec 553 relied on Para 16
285
0?94) 4 sec 675 relied on Para 16. A 2005 (2) Suppl. SCR 969 relied on Para 16 1997 (6) Suppl. SCR 143 relied on Para 18 2003 (1) Suppl. SCR 890 relied on Para 20 2007 (11) SCR 475 referred to Para 21 B 2009 (4) SCR 83 relied on Para23 2009 (4) SCR 834 relied on Para24 1981 (2) SCR 1 relied on Para 28 . c 1989 (3) SCR 316 relied on Para28 1990 (3) SCR 352 reli~<Lon Para 28 19~9. (2) SCR 453 relied on Para 28 2004 (6) Suppl. SCR 1054 relied on ·Para 28 D 2011 (2) SCR 1 relied on Para28 20P. (9) SCR 290 relied on Para28 0?90) 4 sec 453 relied on Para 28 20t~ (6) SCR 747 relied on Para 28 E 1965 SCR908 relied on Para28 2011 (14) SCR 1113 relied on Para33 2012 (12) SCR 1077 ·relied on . Para 33 2013 (12) SCR 489 relied on Para35 F 20p (5) SCR 645 relied on Para 36 (2015) 3 sec 341 relied on Para 37 (2914) 3 sec 203 'relied on Para38 (2013) 11 sec 228 relied on Para39 G 1996 (S) Suppl. SCR 25 relied on Para 46 _ (1996) 1 SCJ 15 relied on Para 46 CIVIL APPELLATE JURISDICTION: c;vil Appeal No. 8438 of2016. H
286 SUPREME COURT REPORTS r10161 11 S.C.R.
A From the Judgment and Order dated 18.01.2008 of the High Court of Calcutta in Writ Petition no. 23836 of2006. WITH C. A. Nos. 8440, 8441, 8444, 8446, 8447, 8453 and 8449 of2016
B Rakesh Dwivedi, Kalyan Kumar Bandopadhyay, Colin Gonsalves, K. Parasaran, Dr. A. M. Singhvi, Gopal Jain, Siddharth Mitra, Sr. Advs., Soumitra G. Chaudhuri, Abhrotosh Majumdar, Gaurav Ghosh, Parijat Sinha, Santi Ranjan Das, Mrs. Sarla Chandra, Dr. M. P. Raju, James P. Thomas, Ms. Mary Scaria, Ashwani Bhardwaj, Anip Sachthey, Mohit Paul, Ms. Paroma.Banerjee, Ms. Jyoti Mendiratta, Prashant Bhushan, c . \.. Pranav Sachdeva, 0. Kuttan, Dharam Bir Raj Vohra, Ms. Reshmi Rea Sinha, Parijat Sinha, Joydeep Mazumdar, Avijit Bhattacharjee, Rauf Rahim, R. N. Karanjawala, Ms. Nandini Gore,Abhishek Ray, Ms. Tahira Karanjawala, Arjun Sharma, Ms. Devina Sehgal, Mrs. Manik Karanjawala, Sidharth Sharma, Amit Bhandari, (For Karanjawala, & D Co.), Sunil Kumar Verma,Abhijit Sengupta, Joydeep Mazumdar, Mrinal Kanti Manda!, S. C. Ghosh, Soumik Ghosal, Advs. for the Appearing parties. The following Judgments and Order of the Court were delivered :
Judgment
V. GOPALA GOWDA, J. 1. Delay condoned in SLP (C) CC E No. 13645 of2008. Leave granted in all the special leave petitions.
22. The present appeals arise out of the impugned final common judgment and order dated 18.01.2008 in W.P. No. 23836 (W) of2006 and connecte(i petitions, passed by the High Court of Calcutta, wherein the Writ Petitions filed challenging the proceedings of the acquisition of land to an extent of about I 000 acres within the mouzas Gopalnagar, 0
Singherberi, Beraberi, Khaserberi and Bajemelia, P.S. Singur, District _Hooghly were dismissed. - -. 3: The relevant facts which are required for us to appreciate the rival° legal contentions advanced on behalf ofthe parties are stated in brief as hereunder: The State of West Bengal formulated an industrial policy to establish automobile industries in the State to cater to the needs of the people and to solve the problem of unemployment in the State. In H
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 287 [V. GOPALA GOWDA, J.]
pursuance of the same, the respondent, Tata Motors Ltd. (hereinafter referred to as "TML"), entered into discussions with the State Government of West Bengal regarding the infrastructural needs of the project. In a letter dated 19.01.2006 addressed to then Principal Secretary of the Commerce and Industries Department of the Government ofWest Bengal, TML stated that a team had visited the State and met representatives of the Government. It also thanked the Government for the openness with which the discussions were held and the assurance of its full support on the project, and summarized its requfrements for the · same. The relevant portion of the proposal is extracted hereunder: " c SI. Aspect I Requirement Remarks No. Parameter . I Land (including 1000 acres I) 75% for Tata Motors land ·vendor park) 25% for Vendor Park 2) Unconditional flexibility for allotment to vendors 3) Land title on out-right sale basis, or long lease of99 years transfer of title after the lease period, without condition. 4) Land to be stabilised/graded and given, or the costto be reduced from the land cdst. L
2 Land for I) Schooling land to be schooling and allotted free of cost or township Government to promote establishment of prominent schools in proximity.
Footnotes
288 SUPREME COURT REPORTS f2016l II S.C.R.
A 5 6 lane road Approach road to be around tl1e available within 3 months boundary of from the date of land the plant, and allonnent. 4- lane approach road to the site B .
B Commercial I Land Cost Rs. 2 lakh per acre. Land cost to be paid after 5 years at the rate ofO.I % interest p.a. " c
44. The then Principal Secretary to the Government of West Bengal, Commerce & Industries Department, sent the letter dated 24.01.2006, annexing the proposal which TML had sent, to the then Principal Secretary Land and Land Reforms Department, Shri Sukumar Das to communicate D his views to the Commerce and Industries Department. A letter was also sent on the same day to the then Principal Secretary, Finance Department seeking his view on the matter. Further, the 'Record Note of Discussion held between TML and a team from the Government of West Bengal and West Bengal Industrial Development Corporation E (hereinafter referred to as the "WBIDC") produced on record, shows that a team from TML met representatives of the Government of West Bengal and WBIDC on 08.03.2006 in Kolkata and on I 7.03.2006 in M_umbai. The relevant portion of the record note reads as under: "TML has ·shown interest in setting up a "Special Category F Project" in West Bengal for manufacture of its new car for a volume of 2, 50,000 per year on maturity. The West Bengal Government is a!s'o keen to attract a "Special Category Project" in line with their Industrial Policy Document." The record note also states that the project was looking at a direct G investment worth Rs.650 crores in the plant and machinery and the IT infrastructure by TML, a direct investment by the company in factory building including utilities such as roads, water line, sewage line, power lines drainage and effluent treatment plants etc. to the tune of Rs. 176 crores, a direct investment by TML in a township of approximately 2000 dwelling units ofan average area of I 000/- sq. ft. per dwelling unit with H
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 289 [V. GOPALAGOWDA, J.]
complete municipal facilities such as roads, power line, water line, drainage, parks and other municipal facilities at Rs. 150 crores. The record note further mentions an indirect investment by vendors in the vendor park in plant and machinery valued at Rs. 200 crores and a further indirect investment by vendors in factory building including facilities such as roads, power line, water line, drainage, sewage and other municipal facilities amounting to Rs. 90 crores. The employment potential of this project was assessed at 1,800 employees in direct employment by TML and a futiher 4,700 employees through vendors and service providers. The estimated project requirement of land, is extracted as under: c "Land TML factory - 400 acres Vendor park - 200 acres Township - I 00 acres" D
55. At this stage, it is also important to consider the incentive package offered by the State Government to TML. The relevant portion is extracted as under: "The West Bengal government has offered to TML an incentive package equal to some of the best being offered in some States. E The two teams have worked out the following package which may vary downwards or upwards based on the volumes of sales in West Bengal:
1. The State Government will develop the land admeasuring approx. 600 acres and lease it to TML for its own factories as well as for sub-leasing to the vendors for vendor park needed for the project. The entire land will be leased to TML for 30 years at an annual lease rental of Rs. I 0 lakhs. This lease can be renewed for further blocks Of 30 years at a negotiated lease rental anhe option ofTML. On each renewal, the lease rental would not be increased by more than 5 times of the lease rental existing on the date of renewal.
2. The State Government would develop the land and construct the factory building including the facilities such as roads, power line, water line, drainage, sewage, effluent treatment plant, H
290 SUPREME COURT REPORTS (2016] 11 S.C.R.
A other utilities e.g. Air compressors, standby generators and I PG storage yard, etc. and lease it to the TML at an annual 1.'!ase rental of Rs. 90 lakhs per annum for 30 years renewable at the option ofTML for further blocks of30 years. At each renewal the. lease rental will be negotiated. However, the increase in rental will not be more than 500% at any renewal B compared tu the rental existing on the date of renewal.
3. The State Government will construct an integrated township of approximately 2000 dwelling units of an average area of I 000 sq. ft. per dwelling unit, including the facilities such as roads, power line, water line, drafriage, sewage, effluent c treatment plants, parks, schools, training institutes, shopping complex, etc. and lease it to TML on lease for 30 years on annual lease rental of Rs. 25 lakhs. This lease can be renewed in future at the option ofTML for further blocks of30 years and the increase in lease rental at each renewal would not be D more than 5 times the lease rental existing on the date of renewal. The township is estimated to cost Rs. 150 crores."
66. The Principal Secretary, Commerce and Industries Department of the Government of West Bengal sent a letter dated 23.03.2006 to the E Deputy General Manager, Government Affairs and Collaborations of TML with reference to the letter dated 19.01.2006 and the record notes of the subsequent discussions between the Government ofWest Bengal and TML on the subject signed on 17 .03 .2006, approving the proposal as under: F " .... from TML to set up a plant on 600 acres of land near Kharagpur to manufacture a new car addressing the lower end of the market, with annual capacity of 2,50,000 units on maturity ...... the targeted date of commencement of commercial production being the year 2008." G By way of letter dated 29.03.2006, the then Chief Minister of West Bengal wrote to the then Chairman ofTML regarding the project. There was some discussion regarding the location of the plant, the relevant portion of which is extracted from the file as under: "During our discussion today, you had mentioned the allocation close to Kolkata may be considered. As you are undoubtedly
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 291 [V. GOPALA GOWDA, J.]
aware, land around Kolkata is difficult to come by and the cost of such land is also very high. Also, land has. to be suitable for industry. We had to keep these aspects in view while selecting a 1.:>cation for the TML plant. We had at first proposed location of this project at Guptamoni, which is about 25km west of Kharagpur towards Jamshedpur B on National Highway 6. Thereafter, based on the suggestion given by Shri Ravi Kant during his meeting with Shri Nirupam Sen, we have now selected a site right next to Kharagpur town, on National Highway 6 ...... The distance to Kharagur from Kolkata can now be covered in approximately 90 minutes. Haldia Port is at a distance of 100 kms. from this location, while J amshedpur is about c 2 hours away. ''-
We now await a visit from Shri Ravi Kant for his approval of the proposed location. I can assure you that this is one of the best D locations in-West Bengal for locatii:Jg your plant. I look forward to the final approval from the Board of Directors ofTML so that we can immediately start taking all the necessary steps." · (emphasis laid by this Court)
77. TML subsequently informed the representatives of the State E Government of West Bengal that they would like to.be sh()~n the site at Singur again for their technical team to reconfirm the suitability of the site. Consequently the said site was again shown to the representatives ofTML on 05.05.2006. They confirmed-that this is the site which would be ideally suited for the proposed small car project. The total land area · F was 1053 acres for the small car project and 200 acres in Telipukur mouza for the township. The Draft Note for Cabinet Memo mentions the mouzas for which the WBIDC had proposed for acquisition of land as well. The Principal Secretary, Commerce and Industries Department G drafted the Cabinet Memo No. 2995/PrS/C&l dated 30.05.2006 titled as under:c "Proposal for acquisition ofland measuring I 053 acres for small car project of Tata Motors at Singur; Hooghly and 200 acres in Telipukur in Singur P.S. District-Hoogly for Housing and related H
292 SUPREME COURT REPORTS [2016] 1I S.C.R.
A amenities to be developed by Tata Housing Development Co. Ltd." The Cabinet Memo mentions the investment in the project and the shift in the proposed site as well. The relevant portion is extracted hereunder: " .... The Tata Motors Co. Ltd. (TML:) have decided to set up B their Small Car Projec, in West Bengal. For this purpose for the last several months, they have scouted for various sites around Kolkata and have finally chosen a site in Singur P.S. in the Hooghly district due to its locational advantage. The site chosen will also cater to the requirement of the vendors of the Company who c will be located in the Vendors' Park within the Tata Motors Factory site. The total investment including that by vendors is expected to be about Rs. 1000 crores. The plant will generate substantial direct and indirect employment, and will also create a number of ancillary units, which also generate local employment.
D 1. The State Government had initially proposed location of this plant in Kharagpur. TML have informed that this will be flagship project, providing very high visibility to West Bengal as an investment destination. They also need very good connectivity . and proximity to airport, as well as quality urban and physical infrastructure. E Taking all these factors into account, TML, after seeing a number of sites in Howrah, Hooghly, Paschim Medinipur and Purba Medinipur, finally selected a site in Singur Block.
2. West Bengal Industrial Development Corporation Ltd. F (WBJDC) now proposes to acquired 1053 acres of land for the said Small Car Project of Tata Motors Co. Ltd. in following mouzas under Singur P.S. in Hooghly district:
Mouza J. L. No Gopal Nagar 13 G Singherberi IO Beraberi 05 Khaserberi lI Bajemelia. 12
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 293 [V. GOPALA GOWDA, J.]
. 3. The Tata Housing Company Ltd. has proposed to set up housing and related infrastructure at Telipukur under Singur P.S. in Hooghly district comprising of200 acres to cater to the Housing and Social infrastructure requirements of the proposed Small Car Project of the Tata Motors Co. Ltd. at Singur, which is not far away from the proposed project site. WBIDC, therefore, proposes to acquire 200 acres of land at Telipukur, Singur P.S. in Hooghly district for the purpose.
4. The identification oflands involved in this acquisition proposal has been made in such a manner that existing settlements/ habitations are avoided. Where isolated homesteads are involved, suitable rehabilitation in the form of providing land/house will be c taken up. Detailed land survey and plot identification will be carried out after Cabinet accords approval to the proposal. Efforts will also be made to avoid/minimize intensively cropped lands. This has the approval of the Chief Minister. D Cabinet may kindly approve the proposed acquisition of 1253 (1053+200) acres of land as proposed at para 3 and 4 above." (emphasis laid by this Court)
88. Pursuant to the approval of the said decision of the Cabinet by the Chief Minister dated 05 .06.2006, the notification under Section 4 (I) E of the Land Acquisition Act, 1894 (hereinafter referred to as the "L.A. Act") was published in the Calcutta Gazette Extraordinary dated 21.07.2006, the relevant portion of which reads as under: "Whereas, it appears to the Governor that land as mentioned in schedule below is likely to be needed to be taken by Government/ F Government Undertaking/Development Authorities, at the public expense for a public purpose, viz., employment generation and socio economic development of the area by setting up TATA Small Car Project in the Mouza Beraberi, jurisdiction list No. 5, P.S. Singur, District Hooghly; it is hereby notified that for the G above purpose an area ofland comprising RS/LR plots as detailed · below and measuring more or Jess, 72.03 acres, as specified below within the aforesaid Mouza ...... " (emphasis laid by this Court) H
294 SUPREME COURT REPORTS [2016] I I S.C.R.
A A perusal of the said notification makes it clear that it does not specifically mention that the land in question is being acquired in favour ofWBIDC. It merely states.that the land in question might be needed for Government I Government Undertaking/Development Authorities. Proposal numbers 3 and 4 of Cabinet Memo, referred to supra, approved 'by the Chief Minister make it clear that acquisition ofland comprising of B I 053 acres is needed for the Small Car Project ofTML and 200 acres of land is needed to cater to the housing and social infrastructure needs of the project.
99. Section 4 of the L.A. Act reads as under:
c " (!) Whenever it appears to the appropriate Government the land in any locality is needed or is likely to be needed for any public purpose or for a company, a notification to that ef(ect shall be published in the Official Gazette [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 focalitythe last of the dates of such publication and the giving of such public notice, being hereinafter referred to as the date of the publication of the notification." I 0. The Act, under the provision of Section 5-A further provides that after the notificatiqn, the objections, if any, may be submitted in writing to the Collector. The Collector, afterthe receipt of such objections, needs to give an opportunity of being heard to the person so objecting. The Collector is then required to conduct an inquiry and submit a report in that respect to the State Government for its consideration. In the instant case, five objection petitions were received from the land owners/ cultivators within 30 days after publication of notific.ation under Section 4 ofthe L.A. Act. One objector applied for exemption of his land from acquisition as he intended to set up a petrol pump from it. Another applied for exemption of the land from acquisition on the ground that they are running a number of agro-based industries like cold storage, factory and fisheries covering a large area of land providing employment to a considerable number of persons. The Land Acquisition Collector submitted the report dated 31.08.2006 to the State Government. In the report, the Land Acquisition Collector concluded that WBIDC intends to acquire the land for generating employment and for socio-economic development of the area by setting up a factory for the 'Small Car Project'
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 295 [V. GOPALA GOWDA, J.]
of TML at Singur. Being such a large scale project, it was bound to create immense job opportunities for the local youth, both directly and indirectly. The Land Acquisition Collector, thus, concluded that the acquisition of the land in question was indeed for public purpose. As far as certain other objectors were concerned, the Land Acquisition Collector observed that the objectors did not appear before him to justify their objections to the proposed acquisition oflands, despite the factum of hearing before the Land Acquisition Collector being widely advertised, including by way of announcement in two local daily newspapers. The Land Acquisition Collector concluded that it appears that the objectors are no more interested to proceed further in the proceedings with their objections. Therefore, he concluded that those objections may be ignored c in the greater interest of the public and the State and submitted his reports to the State Government dated 29.08.2006. Pursuant to the report of the Land Acquisition Collector, the State Government issued notification under Section 6 of the L.A. Act published in the official gazette dated 30.08.2006, the relevant portion of which reads as under: D "Whereas the appropriate Government is satisfied, after considering the report sent by the CoJlector u/s 5-A (2), the land mentioned in the schedule given below is needed by the State Government I Government Undertaking I Development Authorities, at the public expense for a public puri)ose, viz., employment generation and socio economic development of the E area by setting up of TATA Small Car Project ......... "
1111. The Land Acquisition Collector subsequently made award of compensation on 25.09.2006. WBIDC then took possession of the land in question, the extent of which was 997 acres. By its letter dated 20.12.2006, WBIDC asked TML to take "permissive possession of950 F acres of land pending finalization of the lease.deed and lease terms and conditions." The formal lease deed was executed on 15.03.2007. Subseque'ntly, the acquisition proceedings were challenged before the High Court of Calcutta by way of Writ Petitions. By common judgment and order dated 18.01.2008, a Division Bench of the Calcutta High Court, G dismissed the Writ Petitions, and upheld the acquisition ofland, holding the same to be in the interest of the public and for public purpose. The same was chaJlenged by way of Special Leave Petition before this Court being SLP (Civil) No. 8463 of2008 and other connected SLPs as clearly mentioned in the cause title of this judgment. H
296 SUPREME COURT REPORTS [2016] 11 S.C.R.
1212. Even as the above said cases were pending before this Court, the State Government of West Bengal and TML went ahead with the development of the land and setting up of the factory for the' Small Car~ Project'. It was, however, at around that time that the local population started protesting against the acquisition of the land and setting up of the factory. Numerous incidents of blockade, protests and violence were B reported in the print and electronic media. By letter dated I 0.11.2008 addressed to the Director General of Police, West Bengal, TML informed that it is suspending operations as the circumstances were no longer conducive for them to work in a peaceful manner. TML started removing the equipments, machines and other materials from the site from c I 0.11.2008 onwards. The said plant was then relocated to the State of Gujarat. The new Government of West Bengal enacted a legislation on 20.06.2011 titled the 'Singur Land Rehabilitation and Development Act, 2011' (hereinafter referred to as the "Singur Act, 2011 ")for taking over the land covered by the lease granted in favour ofTML. TML challenged the constitutional validity of the said Act by way of Writ Petition before D a single Judge of the Calcutta High Court. By judgment ai'rl order dated 28.09.2011 the learned single Judge upheld the validity of the said Act. The correctness of the said decision was challenged by way of appeals before a Division Bench of the High Court. By its common judgment and order dated 22.06.2012, the Division Bench allowed the appeals and E struck down Sections 2, 4(3), 5 and 6 of the Singur Act, 2011 as unconstitutional as they were in direct conflict with the provisions of the L.A. Act and hence, repugnant to the said Act. It was further held that the entire Singur Act, 2011 itself is void and unconstitutional as the same had not received assent from the President oflndia. Hence, the present appeals. F
1313. By way oforder dated 11.05.2016, this Court has de-tagged the appeals arising out of SLP (C) No. 23843 of 2012, SLP (C) No. 24269 of 2012 and SLP (C) No. 1881-1911 of 2013, as they deal with the constitutional validity of the Singur Act, 2011. The scope of the present appeals is only restricted to deciding the validity of the acquisition of G land and the compensation awarded thereafter in favour of the land losers.
1414. Mr. Colin Gonsalves, the learned senior counsel appearing on behalf of the appellant in the appeal arising out ofSLP (C) No. 12724 of 2008 submits that admittedly, TML approached WBIDC to develop a H
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 297 [V. GOPALA GOWDA, J.]
small car manufacturing unit within the State of West Bengal. The learned senior counsel further contends that a perusal of the documents on record, being the Cabinet Memo as well as the letters exchanged between TML and the West Bengal State Government would clearly show that the site of the project was chosen jointly by the State Government and TML as the best possible site for the project which was to be implemented by establishing the factory in consultation with each other. The land it;i question was acquired by WBIDC at the behest of TML. The learned senior counsel contends that such an acquisition would be hit by the provisions of Part VII of the L.A. Act, the heading of which is "Acquisition of land for companies". lt is submitted that the provisions of the said part were not followed in the instant case, though the same are mandatory c in nature. The learned senior counsel draws our attention to Section 39 of the L.A. Act which reads as under: "39.Previous consent of appropriate Government and execution of agreement necessary:- The provisions of section 6 to 37 (both inclusive) shall not be put in force in order to acquire D land for any Company, unless with the previous consent of the appropriate Government, nor unless the Company shall have executed the agreement hereinafter mentioned" It is contended that the Agreement in terms of Section 39 of the L.A. Act has not been published in the official gazette. · · E
1515. The learned senior counsel places reliance on the decision of this Court in the case of Devender Pal Singh v. State of Punjab 1, wherein this Court has held as under: 1'16. When a request is made by any wing of the State or a Government company for acquisition ofland for a public purpose, F different procedures ·are adopted. Where, however, an application is filed for acquisition ofland at the instance ofa "company", the procedures to be adopted therefore are laid down in Part VII of the Act.Although it may not be decisive but the conduct of the · State as to how it intended to deal with such a requisition, is a G relevant factor. The action of the State provides for an important condition to consider as to whether the purpose where for a company requests it for acquisition of land is a public purpose and/or which could be made at public expenses either as a whole
1 (2008) 1 sec ns H
298 SUPREME COURT REPORTS f2016] J 1 S.C.R.
A or in part, evidently provisions laid down in Part II shall be resorted to. On the other hand, ifthe State forms an opinion that the acquisition of land at the instance of the company may not be for public purpose or, therefore the expenses to be incurred therefore either in whole or in part shall not be borne by the State, the procedures laid down in Part VII thereof have to be B resorted to. The procedures laid down under Part VII of the Act are exhaustive. Rules have been framed prescribing the mode and manner in which the State vis-a-vis the company should proceed. It provides for previous consent of the Appropriate Government, execution of the agreement, previous inquiry before c a consent is accorded, publication of the agreement, restriction on transfer, etc. It also provides for statutory injunction that no land shall be acquired except f~r the purpose contained in Clause (a) of Sub-section (I) Section 40 of the Act for a private company- which is not a Government company. For the purpose of Section 44B of the Act, no distinction is made between a private company D and a public limited company." The learned senior counsel contends that the abovementioned case makes it clear that land can be acquired either for a company, or for a public purpose, but not for both.
1616. The learned senior counsel further places reliance on the decision of this Court in the case of Amarnath Ashram v. Governor of U.P. & Ors. 1, wherein this Court held as under: "Admittedly, in the present case the entire cost of acquisition is to be borne by the appellant society and, therefore, it is an F acquisition for a company and not for a public purpose. That is also borne out by the notification issued Under Section 6 of the Act which states "that the land mentioned in the schedule below is needed for the construction of play-ground for students of Amar Nath Vidya Ashram (public school). Mathura in district Mathura by the Amar Nath Ashram Trust, Mathura". Therefore, G simply because in the notification issued Under Section 4 of the Act it was stated that the land was needed for a public purpose, namely, for a play- ground for students of Amar Nath Vidya Ashram (public school), Mathura, it cannot be said that the acquisition is for a public purpose a11d not under Chapter VII for H ' (1998) 1 sec 591 -
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 299 [V. GOPALA GOWDA, J.]
the appellant-society in view of subsequent events and the A declaration made Under Section 6. The learned counsel for the- State also relied upon the decision of this Court in Srinivasa Cooperative House Building Society Ltd. v. Madam Gurumurthy Sastry, , wherein this Court has held that though there is "no provision in the Act to say that when a land is required for a B company, it may also be for a public purpose. However, even the acquisition for a company, unless utilisation of the land so acquired is integrally connected with public use, resort to the compulsory acquisition under Chapter VII cannot be had''. It was submitted on the basis of this observation that even in case of an acquisition for a company an element of public purpose c has to be there and if for that reason it was believed by the Government that it was necessary for it to make substantiaf contribution from public revenue so as to avoid the charge of ~olourable exercise of powers, the decision of the Government to withdraw from the acquisition cannot be said to be arbitrary D .~ or illegal. The aforesaid observatfon was made by this Court in the context of requirement of Section 40 of the Act and they cannot be construed to mean that no land cannot be acquired by the State Government without making substantial contribution towards the cost of acquisition. We cannot read something more in the said observation than what they were intended to convey. E The provisions of part VII and particularly the provisions regarding payment of the entire costs of the acquisition would otherwise become redundant." Further reliance has been placed by him on the case of R.L. Arora', wherein this Court held as under: F "Therefore, though the words "public purpose" in Sections 4 and 6 have the same meaning, they have to be read in the restricted sense in accordance with s. 40 when the acquisition is for a company under s. 6. In one case, the notification under s. 6 will say that the acquisition is for a public purpose, in the other case G the notification will say that it is for a company. The proviso to s. is 6( 1) shows that where the acquisition for a public purpose, the compensation has to be paid wholly or partly out of public revenues or some fund controlled or managed by a local authority. 3 AIR 1962 SC 764' H ·
300 SUPREME COURT REPORTS [2016) 11 S.C.R.
A Where however the acquisition is either for a company, the compensation would be paid wholly by the company. Though therefore this distinction is there where the acquisition is either for a public purpose or for a company, there is not a complete dichotomy between acquisitions forthe two purposes and it cannot be maintained that where the acquisition is primarily for a company B it must always be preceded by action under Part VII and compensation must always be paid wholly by the company. A third class of cases is possible where the acquisition may be primarily for a company but it may also be at the same time for a pub! ic purpose and the whole or part of compensation may be c paid out of public revenues or some fund controlled or managed by a local authority. In such a case though the acquisition may look as if it is primarily for a company it will be covered by that part ofs. 6 which lays down that acquisition may be made for a public purpose ifthe whole or part of the compensation is to be paid out of the public revenues or some fund controlled or managed by a local authority." The learned senior counsel contends that the mere mention of public purpose in the notifications, does not in fact make the acquisition one for a public purpose, when the acquisition of lands was made in favour of TML. To make the acquisition one for public purpose, it must be directly useful to the public, and the benefit must not be merely incidental in nature. The learned senior counsel places reliance on the Statement of Objects and Reasons of the Amendment Act 68 of·l 984 to the L.A. Act, which states thus: "With the enormous expansion of the State's role in promoting public welfare and economic development since independence, acquisition ofland for public purposes, industrialisation, building of institutions, etc., has become far more numerous than ever before. While this is inevitable, promotion of public purpose has to be balanced with the rights of the individual whose land is acquired, thereby often depriving him of his means oflivelihood. Again, acquisition of land for private enterprises ought not to be placed on the same footing as acquisition for the State or for an enterprise under it. The indiv,idual and institutlons who are unavoidably to be deprived of their property rights in land need to be adequately compensated for the loss keeping in view the H
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 301 [V. GOPALA GOWDA, J.]
sacrifice they have to make for the larger interest of the community. The pendency of acquisition proceedings for long periods often causes hardship to the affected parties and renders unrealistic the scale of compensation offered to them.
2. It is necessary, therefore, to restructure the legislative" framework for acquisition of land so that it is more adequately inforriled by this objective of serving the interests of community in harmony with the rights of the individual. Keeping the above objects in view and considering the recommendations of the Law Commission, the Land Acquisition Review Committee as well as the State Governments, institutions and individuals, proposals for amendment to the Land Acquisition Act, 1894, were c formulated and a Bill for this purpose was introduced in the Lok Sabha <;in the 30th April, 1982. The same has not been passed by either House of Parliament. Since the introduction of the Bill, various other proposals for amendment of the Act have been received and they have also been considered in consultation with D State Governments and other agencies. It is now proposed to include all these proposals in a fresh Bill after withdrawing the pending Bill. The m~in proposals for amendment are as fgllows:- i) The definition of public purpose as contained in the Act is proposed to be amended so as to idclude a longer illustrative list E retaining, at the same time, the inclusive character of the · definition. (ii) Acquisition of land for non- Government companies under the Act will hence forth be made in pursuance of Part VII of the Act in all cases." F (emphasis laid by this Court)
1717. Mr. Kalyan Banerjee, the learned senior counsel appearing on behalf of the some of the appellants, who are cultivators, in the appeal arising out of SLP (C) No. 11830 of 2008 and SLP (C) No. 11783 of 2008 contends that the acquisition of lands in the instant case was not G for a public purpose, but fora company, (TML) under the guise of public purpose. The lands were acquired by WBIDC at the specific instance of TML, as becomes clear from a perusal of the notifications issued under Sections 4 and 6 of the L.A. Act, the relevant !'Ortions of which have been extracted supra. H
302 SUPREME COURT REPORTS r20l 6l l l S.C.R.
1818. The learned senior counsel further draws our attention to Section 6 of the L.A. Act, which reads as under: "6. Declaration that land is required for a public purpose. - ( 1) Subject to the provision of Part VII of this Act, [appropriate Government] is satisfied, after considering the B- report, if any, made under section SA, sub-section (2)], that any particular land is neeaed 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 authorized to certify its orders [and different declarations may be made from time to time in respect of different parcels of any c land covered by the same notification under section 4, sub-section (I) irrespective of whether one report or different reports has or have been made (wherever required) under section SA, sub- section (2)];
D · 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, wholly or partly out of pub Iic revenues or some fuhd controlled or managed by a local authority. 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." The learned senior c'ounsel contends tliat as per Section 6 of the L.A. Act, the deposit of money is the deposit of public revenue is to be examined in the light ofExplanation-2. Explanation-2 to Section 6, which has been added by way of the Land Acquisition (Amendment) Act 68 of 1984 provides that no declaration under Section 6 shall be made unless the compensation to be awarded for the lands in question is paid by a Company, wholly or partly out of public revenues or some fund controlled or managed by a· local authority. The learned senior counsel further contends that WBIDC cannot be said to be 'local authority'. A local authority must have representative character. This means that it must comprise of elected members and must be under the control of the Government with the control and management of a municipal or local fund. This aspect of the matter has been considered by this Court in a H number of cases wherein it was held that a statutory corporation or a
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 303 [V. GOPALA GOWDA, J.]
company formed by a State Government or Central Government cannot A be construed as a local authority. The learned senior counsel places reliance on the Constitution Bench decision of this Court in the case of Va(iibltai Muljibltai Sonejiv. State ofBombay & Ors4, wherein onthe question of whether or not the State Road Transport Corporation was a local authority for the purpose of the L.A. Act, it was held as under: B "The expression "local authority" is not defined in the Land Acquisition Act but is defined in s. 3(3 1) of the General Clauses Act, 1897, as follows: '"local authority' shall mean a municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management c of a municipal or local fund:" The definitions given in the General Clauses Act, 1897, govern all Central Acts and Regulations made after the commencement of the Act. No doubt, this Act was enacted later in point of time than the Land Acquisition Act; but this Act was a consolidating and amending Act and a definition given therein of the expression "local authority" is the same as that contained in the earlier Acts of 1868 and 1887. The definition given ins.. 3(31) will, therefore, hold good for construing the expression "local authority" occurring in the Land Acquisition Act. We have already quoted the definition. It will be clear from the definition that unless it is shown that the State Transport Corporation is an 'authority' and is legally entitled to or entrus~ed by the Government with control or management of a local fund it cannot be regarded as a local authority. No material has been placed before us from which it could be deduced that the fonds of the Corporation can be _ F regarded as local funds." The learned senior counsel further places reliance on the decision of this Court in the case of Calcutta State Road Transport Corporation v. Commissioner of Income Tax, West Bengal-', wherein it was held as under: G "The expression "local authority" is not defined in the Income Tax Act. Its definition is, however, contained in the General Clauses Act in Clause (31-) of Section 3. It reads : 'AIR 1963 SC 1890 ' (1996) 8 sec 758 H
304 SUPREME COURT REPORTS r10161 11 S.C.R.
A 'Local authority' shall mean a municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the Goveniment with, the control or management of a municipal or local fund. The contention of Sri Ray is tha~ inasmuch as the assessee is B entrusted by the Government with the control or management of a "local fond", it is a local authority within the meaning of the said definition. Sri Ray placed strong reliance upon the judgement of this Court in Union of India and Ors. v. Shri R.C. Jain and Ors. The question in the said decision was whether the Delhi Development Authority (D.D.A.) constituted under the Delhi c Development Act, 1957 is a "local autliority". The question had arisen under the provisions of the Payment of Bonus Act. Chinnappa Reddy, J., speaking for the Bench, laid down the following test for determining whether a particular body is a "local authority" within the meaning of Section 3(31) of the General D Clauses Act: "An authority, in order to be a local authority, must be oflike nature and character as a Municipal Committee, District . Board or Body of Port Commissioners. possessing. therefore, many. ifnot all. of the distinctive attributes and characteristics of a Municipal Committee, District Board or Body of Port Commissioners, but possessing one essential feature, viz.. that it E is legally entitled to or entrusted by the government with, the control and management of a municipal or local fund." The learned Judge elaborated the said test saying that to be characterised as a "local authority", the authority must have separate legal existence as a corporate body. it must not be a F mere government agency but must be legally independent entity, it must function in a defined area and must ordinarily, wholly.or partly, directly or indirectly, be elected by the inhabitants of the area. It must also enjoy a certain degree of autonomy either complete or partial, must be entrusted by statute with such government functions and duties as are usually entrusted to G Municipal Bodies such as those connected with providing amenities to the inhabitants of the locality like health and education, water and sewerage, town planning and development., roads, markets, transportation, social welfare services etc. Finally it was observed-such body must have the power to raise funds H for furtherance of its activities and fulfillment of its objects by
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 305 [V. GOPALA GOWDA, J.]
levying taxes, rates, charges or fees." A (emphasis laid by this Court) The learned senior counsel fmther places reliance on the decision of this Court in the case of S. Su11daram Pillai & Ors. v. R. Pattabiranum & Ors. 6 to contend that explanation cannot extend the scope of the proviso. B It was held by this Court as under: "42. In Hiralal Rattanlal etc. v. State of U :P. and Anr. etc. this Court made the following observations: Ordinarily, a proviso to a section is intended to take out a part of the main section for special treatment. It is not expected to enlarge the scope of the main section. But cases have arisen in which c ·this Court has held that despite the fact that a provision is called proviso, it is really a separate provision and the so-called proviso has substantially altered the main section.
43. We need not multiply authorjties after authorities on this point because the legal position seems to be clearly and manifestly well established. To sum up, a proviso may serve four different purposes: 1) qualifying or excepting certain provisions from the main enactment; 2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable; 3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and 4) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment of the statutory provision.
44. These seem to be by and large the main purport and parameters of a proviso."
1919. The learned senior counsel contends that explanation is only relatable to the main provision and not the proviso. The learned senior counsel thus, reiterates that even where the acquisition of land is for a corporation, provisions of Part Vil of the L.A. Act must be complied with. ' l 1985) 1 sec 591 H
306 SUPREME COURT REPORTS [2016] II S.C.R.
2020. Mr. Prashant Bhushan, the learned counsel appearing on behalf of the appellant -Association of Democratic Rights in the appeal arising out of SLP(CJ No. CC 13645 of 2008 submits that acquisition for a public purpose is made under Part 11 of the L.A. Act, whereas acquisition for a company is made under Part VII of the L.A. Act. The procedure under Part VII of the L.A. Act is mandatory and strict compliance of B the same is required for th0 state to exercise its power of eminent domain to acquire the lands in favour of a Company. It is submitted that in ~he instant case, the lands were acquired for a particular company, TML, at the in stance of the said company and the exact location and site of the land was also identified by the said company. Even the notifications c issued under Sections 4 and 6 of the L.A. Act clearly state that the land was being acquired for the Tata Motor's 'Small Car Project'.
2121. The learned counsel draws our attention to Rule 4 of the Land Acquisition (Companies) Rules, 1963 framed under Section 55 of the L.A. Act of which reads as under: D "A,ppropriate Government to be satisfied with regard to certain matters before initiating acquisition proceedings- (!) Whenevera company makes in application to the appropriate Government for acquisition of any land, that Government shall direct the Collector to submit a report to it on the following matters namely:- E (i) that the company has made its best endeavour to find out lands in the locality suitable for the purpose of acquisition. (ii) that the company has made all reasonable efforts to get such lands by negotiation with the person interested therein on payment ofreasonable price and such efforts have failed, F (iii) that the land proposed to be acquired is suitable for the purpose; (iv) that the area ofland proposed to be acquired is not excessive; (v) that the company is in a position to utilize the land expeditiously ; and G (vi) where the land proposed to be acquired is good agricultural land that no alternative suitable site can be found so as to avoid acquisition of that land ..................... " It is submitted that Rule 4 is mandatory in nature and that unless the directions enjoined by Rul.e 4 are complied with, the notification under H
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 307 [V.-GOPALA GOWDA, J.]
Section 6 of the L.A. Act will be invalid. The learned counsel submits A that the aforesaid Rule came up for the consideration before this Court in the case of Devender Singh (supra), wherein it was held as under: "44. Another question which arises for our consideration is as to whether Rule 4 of the Companies Rules is mandatory or directory in nature. The High Court held it to be directory. B 4S. Rule 4 of the Rules employs the word "shall" not once place but twice. Ordinarily, it is imperative in character. No reason has been shown before us as to why it should be held to be directory provision particularly when the Land Acquisition Act is an expropriatory legislation. c
46. In State of Gujarat and Anr. v. Patel Chaturbhai Narsibhai and Ors., this Court held: l S. The contention of the State that the enquiry under Rule 4 is administrative and that the owner of the land is not entitled to be given an opportunity to be heard at the enquiry cannot be accepted for these reasons. The enquiry under Rule 4 shows that the Collector is to submit a report among other matters that the Company has made all reasonable efforts to get such lands by negotiation with the persons interested therein on payment ofreasonable price and such efforts have failed. The persons interested therein are the owners of the land which is proposed to be acquired. The Company at such an enquiry has to show that the company made negotiations with the owners of the land. The owners of the land are, therefore, entitled to be heard at such an enquiry for the purpose of proving or disproving the reasonable efforts of the company to get such land by negotiation. The contention on behalf of the State that the owners of the land will get an opportunity when an enquiry is made under Section SA of the Act is equally unsound. Section 17 of the Act provides that the appropriate Government may direct that the provisions of Section SA shall not apply, and if it does so direct a declaration may be made under Section 6 at any time after the publication of the notification under Section 4 of the Act. Therefore, the enquiry under Section SA may not beheld. 4 7. ln General Government Servants Cooperative Housing 0
Society Ltd., Agra etc. v. Sh. Wahab Uddin and Ors. etc., this H
308 SUPREME COURT REPORTS r2016] ll S.C.R.
A Court held:
13. Sub-rule (1) requires the Government to direct the Collector to submit a.. report to it on the matters enumerated in Clauses (i) to (vi) of the Sub-rule (I) which is for the benefit of the Company. The purpose is to avoid acquisition of land not B suitable for a Company. Clause (ii) of Sub-rule (I) requires that the Company has to make all reasonable efforts to get such lands by negotiation with the person interested therein on payment of reasonable prices and that such efforts have failed. The purpose of Clause (ii) seems to be to avoid unnecessary land acquisition proceedings and payment of exorbitant prices. c The purpose of Clauses (iii), (iv) and (v) is obvious. The purpose of Clause (vi) is to avoid acquisition of good agricultural land, when other alternative land is available for the purpose. Sub- rule 2 of Rule 4 requires the Collector to give reasonable opportunity to the Company so that the Collector may hold an D inquiry into the matters referred in Sub-rule ( 1). The Collector has to comply with Clauses (i), (ii) and (iii) of Sub-rule 2 during the course of the inquiry under Sub- rule (I). The Collector under Sub-rule 3 then has to send a copy of his report of the inquiry to the appropriate Government and a copy of the report has to be forwarded by the Government to the Land Acquisition E Committee constituted under Rule 3 for the purpose ofadvising the Government in relation to acquisition of land under Part VII of the Act, the duty of the Committee being to advise the Government on all matters relating to or arising out of acquisition ofland under Part VII of the Act (Sub-rule (5) of Rule 3). No F declaration shall be made by the appropriate Government under Section 6 of the Act unless.the Committee has been consulted by the Government and has considered the report submitted by the Collector under Section SA of the Act. In addition, under Clause (ii) of Sub-rule (4) of Rule 4, the Company has to execute an agreement under Section 41 of the Act. The above G consideration shows that Rule 4 is mandatory; its compliance is no idle formality, unless the directions enjoined by Rule 4 are complied with, the notification under Section 6 will be invalid. A consideration of Rule 4 also shows that its compliance precedes the notification under Section 4 as well as compliance of Section 6 of the Act." H
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