IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH.
CWP No.5878 of 2003(O&M)
Date of decision: 08 .12.2009
Amita Banta and another
-----Petitioners
Vs.
State of Haryana and others
----Respondents
CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL
HON'BLE MR. JUSTICE GURDEV SINGH
Present:- Mr. Vinay Kuthiala, Advocate and Mr. Munish Behl,
Advocate for petitioners in CWP No.5878 of 2003 and
CWP No.9155 of 2004.
Mr. Shailendra Jain, Advocate for the petitioners in
CWP No.6038 of 2003, 9142 and 9181 of 2004.
Mr. Ashish Chopra, Advocate for the petitioners
in CWP No.11502 of 2004.
Mr. Virender Kumar Kharta, Advocate for the
petitioners in CWP No.7922 of 2003, 14858 of 2003
and 11637 of 2004.
Mr. Sanjay Vij, Advocate for the petitioners
in CWP No.8515 of 2003.
Mr. Rameshwar Malik, Addl.A.G.Haryana for the State.
Adarsh Kumar Goel,J.
1. This order will dispose of Civil Writ Petition Nos.5878,
6038, 7922, 8515, 8886, 14858 of 2003, 9142, 9155, 9181, 11502
and 11637 of 2004, as all the writ petitions seek same relief of
quashing of proceedings for acquisition of land initiated in
CWP No.5878 of 2003 (O&M) and connected petitions 2
pursuance of notification dated 13.8.2001 under section 4 and
notification dated 9.8.2002 under section 6 of the Land Acquisition
Act, 1894 (for short, ‘the Act’).
2. Case set out in CWP No.5878 of 2003 is that the writ
petitioners purchased land adjacent to Hotel Bristol and DLF
Gymkhana Club in Gurgaon in 1990. Acquisition proceedings
were earlier initiated vide notification dated 5.10.1984 under
section 4 of the Act, which were challenged by filing CWP
No.1470 of 1985. During pendency of the writ petition, the
acquisition proceedings were withdrawn and the writ petition was
disposed of as infructuous on 1.5.2000.
3. Thereafter, proceedings were initiated vide impugned
notifications. The stated purpose for acquisition is “development
and utilization of land for residential and commercial Sector 28 at
Gurgaon”, by “Haryana Urban Development Authority”. The land
notified was 36.59 acres. The petitioners raised objections under
section 5-A of the Act, inter-alia, to the effect that land of the
petitioners had 13000 square feet area for business purposes
constructed at cost of Rs.65 lacs. The petitioners were doing multi
business activities and had licences under various laws. Similar
land on the other side of road, occupied by Sahara Mall, JMD and
Shyam Lal Market was excluded from acquisition. It was also
stated that there was policy not to acquire built up area. The
objectors had applied for change of land use. The purpose of
CWP No.5878 of 2003 (O&M) and connected petitions 3
acquisition could not be fulfilled as the area surrounding the land
was being used for commercial complex. The area covered by the
notification was not a compact block but comprised scattered
pieces of land as per site plan Annexure P.10. No residential
colony could be set up as proposed.
4. Grounds raised in the petition for challenging
acquisition are that notification under section 6 of the Act was
issued without considering the objections of the petitioners. The
notification was not duly published. It has been further stated that
substantial portion of area had already been released from
acquisition in favour of DLF Construction Company and other
persons mentioned in para 17 of the petition, who had influence on
Government. The public purpose of development was an eye-wash.
The area was surrounded by land belonging to private builder M/s
DLF Universal Limited and acquisition will advance its pecuniary
interest with the help of HUDA. The site was not validly selected.
No development plan was prepared in accordance with the Punjab
Scheduled Roads and Controlled Areas Restrictions of
Unregulated Development Act, 1963 (in short, ‘the 1963 Act’) and
Haryana Development and Regulation of Urban Areas Act, 1975
(in short, ‘the 1975 Act’). The acquisition amounted to benefiting a
private builder by leaving out adjacent land from acquisition.
CWP No.5878 of 2003 (O&M) and connected petitions 4
4. The petitioners also filed rejoinder placing on record
further developments that land abutting and behind their land was
exempted from acquisition on account of which notified public
purpose did not survive. Substantial part of the land covered by the
notification was released in favour of persons to whom licences
Annexures P.16 to P.18 were granted under the provisions of the
1975 Act. There was no objective criteria for release and action of
the State was discriminatory. Order of Director Urban Estate
Development, Haryana for release of part of acquired land dated
2.5.2003 has been filed as Annexure P.20. Further affidavit dated
26.7.2004 was filed on behalf of the petitioners stating that during
pendency of the petition, more land out of the acquired land was
released, which was covered by licences Annexures P.23 to P.26.
Most of the acquired land having thus been released, there was no
purpose for continuing acquisition proceedings. Similar averments
have been made in Paras 7 and 8 of replication dated 27.2.2004 in
CWP No.6038 of 2003, which are as under:-
“7. That para No.7 of the written statement is totally
wrong, incorrect and hence denied. The averments
made in the corresponding para of the writ petition are
reiterated being correct. It is further submitted that the
instant proceedings for acquisition of the land in
question have been initiated with malafide motive and
in colourable exercise of powers. The land of the
petitioners is surrounded on all sides by the lands
which have already been released from the acquisition
CWP No.5878 of 2003 (O&M) and connected petitions 5proceedings and for which licences have been granted
to the influential persons for change of land use. Thus,
the land of the petitioners cannot be put to any use
much less the purpose for which the same have been
notified and thus the instant acquisition is motivated by
ulterior considerations. As stated in the writ petition,
the land of the petitioners is situated on the main
Faridabad-Gurgaon Highway and it is adjacent to the
Hotel Bristol and Gymkhana Club Gurgaon. The land
immediately near to the land of the petitioners has now
been exempted from the acquisition proceedings and
no public purpose, whatever, can be served by
acquiring the land of the petitioners. The land
comprised in Khasra Nos.100, 101, 102, 95, 96/1, 96/2
has now been excluded from the acquisition
proceedings and change of land use licences have
already been granted to the land owners. Further, the
land surrounding the land of the petitioners, comprised
in Khasra Nos.99, 107, 108, 113 to 116 are already
dotted with commercial complex buildings or under
construction activities. True copies of the said
permission/licences are annexed herewith as Annexures
P.8 to P.10. It would be apparent from the perusal of
these licences that the same were issued in June 2003
i.e. much after the filing of the instant writ petition.Thus, the specific averment of the petitioners in the
instant writ petition that the adjoining land was being
exempted from the array of acquisition and that they
were being discriminated against in this regard, stands
proved to be true. It would also be relevant to mention
here that in similar circumstances a Division bench of
CWP No.5878 of 2003 (O&M) and connected petitions 6this Hon’ble Court has quashed the acquisition
proceedings vide order dated May 21, 2002 passed in
CWP No.12714 titled as Ghanshayam v. State of
Haryana and a true copy of which is annexed herewith
as Annexure P.11. it may be relevant to mention here
that in so far as licence No.10, Annexure P.9 is
concerned, the same has been granted for land
measuring less than one acre to joint owners of the
same. Further vide letter No.1-2003/3105 dated
2.5.2003, a true copy of which is also annexed herewith
as Annexure P.12, land belonging to different co
owners which was being acquired for development of
sector 28, Gurgaon, for which Sector alone the land of
the petitioners is being acquired, has since been
released from the array of acquisition and a joint CLU
has been granted to different persons/owners for
commercial purposes. Thus, the land of the petitioners
cannot be utilized for any purpose whatsoever
inasmuch as the same is surrounded by the land on all
sides for which change of land use licences have been
granted to various private organizations. Further, the
respondents have themselves formulated a policy to
allow 100% change of land use for construction of
Malls on the Gurgaon Mehrauli road in respect of the
land of the petitioners as well as other adjoining lands.
A true copy of the newspaper report to this effect dated
4.12.2003 is also annexed herewith as Annexure P.13.
The petitioners crave the indulgence of this Hon’ble
Court that they also intend to take the benefit of the
policy so formulated by the respondents, as aforesaid
and they shall use the land in question in accordance
CWP No.5878 of 2003 (O&M) and connected petitions 7with the policy/laws formulated by the state Legislature
or HUDA in this regard.8. That para No.8 of the written statement is totally
wrong, incorrect and hence denied. The averments
made in the corresponding para of the writ petition are
reiterated being correct. It may be further respectfully
submitted here that as already stated hereinabove, with
regard to the lands situated in the nearby vicinity to the
land of the petitioners, the state of Haryana has already
granted permission for change of land use and has also
exempted the same from the array of acquisition.
Moreover, some other lands situated in the vicinity of
the land of the petitioners are either occupied by the
already existing commercial complexes or the same are
under construction. The land in question of the
petitioners is more valuable keeping in view its
locational advantage and in fact the State of Haryana in
its Urban estates Department has already formulated a
policy to grant change of land use to such land owners
but in colourable exercise of powers, the instant land is
being sought to be acquired.”Facts in other petitions are identical.
5. In reply filed by Land Acquisition Collector on behalf
of the State as well as himself, stand taken is that publication was
duly made and objections were duly considered and validly
rejected. Acquisition was as per development plan. The land
released was not similarly situated. In reply to further
developments, affidavit dated 25.10.2004 was filed on behalf of
CWP No.5878 of 2003 (O&M) and connected petitions 8the respondents by District Town Planner, Gurgaon stating that
after initiation of acquisition proceedings, applications were
received under the provisions of the 1975 Act and as per policy of
the State of the year 2000, acquired land could be released in
favour of developers/colonizers who made application for grant of
licence. Accordingly, before announcement of award dated
3.8.2004, land measuring 22.61 acres was released from
acquisition and award for only 13.9 acres was announced. No
award was announced for 22.61 acres of land. On the remaining
land, there was proposal to construct multi level parking and
service roads/green belts. Further affidavit dated 21.10.2004 was
filed by the Land Acquisition Collector stating that in view of
traffic jam on Mehrauli-Gurgaon road, Metro rail had been
finalized and part of area covered by acquisition was required for
planning roads etc.
6. Learned counsel for the petitioner points out that as
against 36.59 acres of land notified for the purpose of development
by HUDA under the HUDA Act, the award was made only of 13.9
acres and there has been further release of more than 8 acres of
land even after the award by way of licence dated 18.8.2005, a
copy of which has been taken on record as Mark ‘X’. It was, thus,
submitted that stated public purpose for acquisition is mere
pretence. Purpose of acquisition was not a public purpose but to
benefit persons who were granted licence under the 1975 Act by
CWP No.5878 of 2003 (O&M) and connected petitions 9the State authorities in their “discretion”, in furtherance of policy
of the State spelt out in affidavit dated 21.10.2004 on behalf of the
State. The State has, thus, acted contrary to its declared purpose.
No doubt, the declared purpose may have been a public purpose
but action of the State is contrary to the said declaration. It was
submitted that the purpose should not be viewed only from the
declaration in the notification but also from the subsequent actions
of the State, read with the policy of the State. Thus viewed, the
purpose of the State was to use the power of acquisition ostensibly
for public purpose of development by the State or its authorities
but for real purpose of benefiting private individuals by releasing
substantial part of notified land to such persons as may be granted
licences ‘in discretion’ of the State Government or its authorities.
Such action was vitiated by fraud and adoption of unfair and
unwarranted procedure to deprive land owners affected by
acquisition of their constitutional right of property. Exercise of
power by the State withdrawing from acquisition was clearly
beyond the scope of Section 48 of the Act and is not only ultravires
the Act but is also hit by Articles 14, 21 and 300-A of the
Constitution. The policy of the State amounted to exercise of
legislative power by exercise of essential legislative functions
beyond the scheme of the Act. No public purpose survived after
90% of notified land has been released.
CWP No.5878 of 2003 (O&M) and connected petitions 10
7. Learned counsel for the petitioners have referred to
orders passed in various pending cases wherein clear trend of
notifying land for public purpose and thereafter large scale release
thereof contrary to declared purpose and without following
objective norms having any statutory backing has been noticed.
In CWP No.1356 of 2004 (Pardeep Yadav v. State of
Haryana), after noticing the said trend based on instances
mentioned therein, it was observed that exercise of power of
acquisition called for a close scrutiny by Court and may also call
for independent investigation to check wrongful gain to
individuals and wrongful loss to the State. It was further observed
that the released land may have to be restored to the State or to the
original owner by annulling the orders if the same were found to be
vitiated by fraud, fixing accountability of the persons who may
have abused the power. In order dated 21.8.2009, it was noticed
that information furnished by State in this regard showed that out
of 17000 acres of land notified for acquisition in the last three
years, award was made only for 3876 acres and the remaining land
was either expressly released or no award was announced.
In order dated 16.9.2009 in CWP No.16363 of 2005 (HMD
Technologies v. State of Haryana), it was noticed that after
notifying huge track of land for public purpose of setting up
Special Economic Zone by Haryana Industrial Development
Corporation (a Government Corporation), major chunks of land
CWP No.5878 of 2003 (O&M) and connected petitions 11were released to private parties even after award was made.
Reference in the said order was also made to release of land to Shri
H.S.Chatha who was elected as MLA and was also a Minister.
In order dated 8.1.2009 in CWP No.2227 of 2008 (Haryana
Rice Mills and others v. State of Haryana and others), release
of land in favour of Smt.Sumita Singh, MLA was made.
Similar issue was considered, inter-alia, in order dated
7.1.2009 in CWP No.3972 of 2008 (Nirmala Rani and others v.
State of Haryana and others), order dated 14.1.2009 in CWP
No.15370 of 2008 (Malho Devi v. State of Haryana), order dated
26.3.2009 in CWP No.15777 of 2004 (Rajyoga Education and
Research Foundation v. State of Haryana and others), order
dated 24.3.2009 in CWP No.21308 of 2008 (Inder Mohan Rai v.
State of Haryana and others) and order dated 27.3.2009 in CWP
No.4857 of 2009 (Sunder Lal v. State of Haryana).
8. In support of their submissions, learned counsel for the
petitioners cited following judgments:-
i) Hindustan Petroleum Corpn. Limited v.
Darius Shapur Cheniai and others
, (2005) 7
SCC 627, paras 15, 16, 18 and 28, to submit that
Section 5-A confers valuable and important right
which is akin to fundamental right. The purpose is
to give opportunity to show that purpose of
acquisition is not public purpose and that land
acquired was not suitable for the purpose. Hearing
must be effective and not a formality. Opinion for
CWP No.5878 of 2003 (O&M) and connected petitions 12public purpose must be formed after application of
mind and on relevant factors. Even though, reasons
may not be indicated in the declaration under
section 6, the declaration must precede decision by
the State Government. The Collector must submit
his report alongwith record and thereafter the State
Government must apply its mind. Counter affidavit
filed on behalf of the Collector is not sufficient
compliance of the requirement of law to show
application of mind by the State. Collector cannot
file counter affidavit on behalf of the State.ii) Abhishek Gupta v. State of Haryana, 2008(3)
Law Herald (P&H), para 26 to submit that where
reasons given by the State are not rational, exercise
of power under section 5-A will stand vitiated.iii) Shri R.R.Gupta v. Union of India and
others, CWP No.1639 of 1985 decided on
18.11.1988 (Del.) to submit that if there is non
compliance of requirement of section 5-A,
notification under section 6 was liable to be
quashed.iv) Gopal Krishan Gutpa v. State of Haryana,
1993(3) PLR 560 (P&H) to submit that personal
hearing under section 5-A was mandatory and
must be meaningful and in absence thereof,
acquisition was liable to be quashed.CWP No.5878 of 2003 (O&M) and connected petitions 13
v) State of Tamil Nadu and another v.
A.Mohammed Yousef and others, (1991) 4 SCC
224 to submit that acquisition must be preceded by
a scheme and pre-scheme acquisition was
premature. (the above view does not appear to
have been approved in later judgment in State of
T.N. v. L. Krishnan (1996) 1 SCC 250, paras 29
and 33).vi) Tulsi Cooperative Housing Society,
Hyderabad v. State of Andhra Pradesh and
others, AIR 1999 SC 3667 to submit that acquired
land should be used for purpose for which the
same was acquired.vii) Municipal Corporation of Great Bombay v.
The Industrial development and Investment
Co.Pvt. Limited and others, (1996) 11 SCC 501,
para 22 To submit that land acquired for a public
purpose could be used for any other public purpose
on account of change of circumstances or on land
becoming surplus. It was also not necessary that
the original purpose must continue till award was
made. Reference was made to earlier judgment in
Gulam Mustafa v. State of Maharashtra, (1976)
1 SCC 800 stating that once title was vested in the
acquiring authority, it could use the excess land for
any other public purpose.viii) & (ix) Union of India, new Delhi and others
v. Nand Kishore and another, AIR 1982 Delhi
CWP No.5878 of 2003 (O&M) and connected petitions 14462, Paras 9 and 19; Jaipal Singh and others v.
state of Haryana and another, 1981 PLJ 392
(P&H) to submit that midstream change of purpose
was not permissible.x) Suresh Verma v. The state of Punjab and
others, AIR 1971 P&H 406 to submit that
subsequent change of purpose, if bonafide, was
permissible.xi) The Industrial development and Investment
Co.Pvt. Limited and another v. State of
Maharashtra and others, AIR 1989 Bombay 156,
para 4 to submit that purpose specified in the
declaration must continue till land vests in the
State (follows Union of India, new Delhi and
others v. Nand Kishore and another, AIR 1982
Delhi 462).xii) BEML Employees House Buiilding Cooperative Society Limited v. State ofKarnataka and others, AIR 2004 SC 5054, para
7 to submit that the State could not discriminate in
exercise of its statutory discretion in dealing with
objections under section 5-A.xiii) The State of Punjab and another v. Gurdial
Singh and others, AIR 1980 SC 319, para 9 to
submit that if real purpose of acquisition is
different from the declared purpose, exercise of
CWP No.5878 of 2003 (O&M) and connected petitions 15power may be vitiated by fraud or colourable
exercise of power.xiv) Ghansham v. State of Haryana and others,
CWP No.12714 of 2000, decided on 21.5.2002
(P&H) to submit that where land was not capable
of being used for the declared purpose, the
acquisition was liable to be quashed. In that case,
the land was surrounded by land of private builder
and thus was not fit for development for
residential, commercial or institutional purposes
for which the same was notified.xv) & (xvi) Davinder Kumar v. State of
Haryana and others, 1995(2) PLR 438; State of
Haryana and others v. Gyan Chand Madhok,
1972 PLR 110, para 9, to submit that if some land
was released on the ground that it had
construction, there was no reason not to release
other land having construction. (Relying on
Chandra Bansi Singh v. State of Bihar, AIR
1984 SC 1767).xvii) Union of idnia and another v. Balram
Singh and another, 1992 Supp (2) SCC 136 to
submit that residential area was allowed to be
released on facts of the case.(xviii) & (xix) Sube Singh and others v. State of
Haryana and others, (2001) 7 SCC 545, Para 10;
Jagdish Chand and another v. State of Haryana
CWP No.5878 of 2003 (O&M) and connected petitions 16and another, (2005) 10 SCC 162, to submit that
policy of the State to exclude only A class
construction was held to be arbitrary and the said
policy was held to apply to B and C class
structures also.(xx) Jagdish Chand and another v. State of
Haryana and another, (2005) 10 SCC 162, to
submit that proceedings for acquisition should be
finalized expeditiously.(xxi) Orders of this Court dated 21.8.2009 in CWP
No.1356 of 2004 (Pardeep Yadav v. State of
Haryana); 16.9.2009 in CWP No.16363 of 2005
(HMD Technologies v. State of Haryana);8.1.2009 in CWP No.2227 of 2008 (Haryana Rice
Mills and others v. State of Haryana and
others); 7.1.2009 in CWP No.3972 of 2008
(Nirmala Rani and others v. State of Haryana
and others); 14.1.2009 in CWP No.15370 of 2008
(Malho Devi v. State of Haryana); 26.3.2009 in
CWP No.15777 of 2004 (Rajyoga Education and
Research Foundation v. State of Haryana and
others); 24.3.2009 in CWP No.21308 of 2008
(Inder Mohan Rai v. State of Haryana and
others) ;27.3.2009 in CWP No.4857 of 2009
(Sunder Lal v. State of Haryana); 1.7.2009 in
CWP No.8274 of 2009 (Chetna Estate Pvt.Limited and others v. The State of Haryana and
others) and 8.1.2009 in CWP No.5038 of 2006
(Purushottam and others v. State of Haryana
CWP No.5878 of 2003 (O&M) and connected petitions 17and others), to submit that exercise of power of
acquisition is vitiated when real purpose is other
than declared purpose which could be inferred
from exercise of power of release in terms of
policies of the State of Haryana.9. Learned counsel for the State defended the acquisition
proceedings and submitted that even if out of 36.59 acres of land
notified for acquisition, about 23 acres was released before award
and award was made for about 13 acres out of which about 8 acres
was further released, the purpose of acquisition still survives with
regard to remaining about 5 acres. With regard to the land which
was released also, purpose of acquisition of development for
residential/commercial purposes was achieved. The State had a
policy of releasing land in respect of which licence was applied for
and granted, which policy was permissible under section 48 of the
Act and had not been challenged as such. In any case, the land was
validly acquired. After acquisition, the land could be used for a
changed purpose. Part of land was now required for Delhi Metro
project, which was certainly a genuine public purpose. It was
further submitted that there was no non compliance of provisions
of section 5-A of the Act, as hearing was duly given and objections
were duly considered. Declaration of public purpose in the
notification was conclusive and the State had absolute discretion to
withdraw from acquisition. Such withdrawal from acquisition and
CWP No.5878 of 2003 (O&M) and connected petitions 18release of land from acquisition did not affect validity of
acquisition.
10. In support of his submissions, learned counsel for the
State cited following judgments:-
(i) Gulam Mustafa and others v. The State of
Maharashtra and others, (1976) 1 SCC 800,
para 5;(ii) Mangal Oram and others v. State of Orissa
and another, (1977) 2 SCC 46, para 4.(iii) Shankar v. State of Haryana, 1996 PLJ 263
(P&H), para 4.(iv) Union of India and others v. Jaswant Rai
Kochhar and others, (1996) 3 SCC 491(v)Rudradhar R.Trivedi v. State of
Maharashtra, (1996) 10 SCC 60(vi)Kulbir Singh v. State of Punjab, 2001(1)
PLJ 203 (P&H),
to submit that land acquired for public purpose
could be used for any other public purpose.vii) Collectors of 24 Parganas and others v.
Lalit Mohan Mullick and others, (1986) 2 SCC
138,(viii) The Senior Superintendent of Post
Offices, Coimbatore Division v. The
coimbatore Diocese Society represented by its
Procurator, Coimbatore and others, 1998(1)
LACC 520 (Mad.), para 7.(ix) Gandhi Grah Nirman Sahkari Samiti
Limited and others v. State of Rajasthan and
others, (1993) 2 SCC 662, para 15to submit that comparative utility of public
purpose could not be seen and if acquisition was
for a valid purpose, there could be no interference
on the ground that land was already being used for
some beneficial purpose.CWP No.5878 of 2003 (O&M) and connected petitions 19
11. Learned counsel for the parties brought to our notice
the contents of policies dated 6.1.2000, 6.3.2000 and 26.10.2007
and report dated 10.2.2009 which was filed by the Chief Secretary
to the State of Haryana in pursuance of order dated 8.1.2009 in
CWP No.5038 of 2006 (Purushottam and others v. State of
Haryana and others). Relevant parts thereof are as under:-
Policy dated 6.1.2000
“MEMORANDUM
Minister-in-Charge Town and Country
Planning MinsiterAdministrative Secretary Commissioner and
Secretary to Govt.Haryana, Town and Country Planning DepartmentSub: Release of land from acquisition where
Developers/colonizers have purchased land
Before the issue of notification under section
4 of the Land Acquisition Act but submitted
application for licence for commercial colonies
thereof afterwards.Xx xxx xxx xxxx
It has been felt that apart from providing
accommodation for locating commercial officers, a
licence for a commercial colony results into receipt
of handsome amount to the State Treasury/Haryana
Urban Development Authority and it will be in
public interest to encourage establishment of such
CWP No.5878 of 2003 (O&M) and connected petitions 20colonies. Earlier a decision was taken by the CMM
(copy of memorandum and decision is placed at
Annexure B and C) to release the land from
acquisition where developers/colonizers have
purchased land before the issue of notification under
section 4 of the Land Acquisition Act, but submitted
applications for grant of licence for setting up of
residential colony afterwards. But it is a general
decision and it is felt that in view of the reasons
explained above, the licences for commercial
colonies should be treated differently.It is therefore, proposed that if the
department intends to issue licence for commercial
colony with the internal concurrence of the
Government over a land where the owner had
purchased it before the notification under section 4
of the Land Acquisition Act was issued, the release
of such land may be allowed before issue of letter of
intent.”Policy dated 6.3.2000
“It has also been observed that the resources of
HUDA have reduced in the recent past, and
acquisition activity and development of residential
sectors has become costly and time consuming
affair due to litigation and, therefore, it would be
appropriate to assign a greater role to private
sector. But as per decision taken by the CMM in
their meeting held on 30.7.98 even if the
department finds that the application for grant of
licence for residential colony fulfils
policy/technical parameters, the land is to be
CWP No.5878 of 2003 (O&M) and connected petitions 21released from acquisition only on the
recommendations of the Chief Administrator,
HUDA. This results into procedural delay. Since
the department of Town and Country Planning,
Haryana is responsible for integrated development
of urban areas, therefore with a view to avoid
procedural delays, it is proposed that on the
analogy of decision taken by the CMM on
6.1.2000, the land purchased by the colonizer
before issuance of notification under section 4 of
the Land Acquisition Act, 1894 where the
Director Town and Country Planning, Haryana
decides to issue licence for residential colony and
obtained the concurrence of the Government for
the same, may be released from acquisition.”Policy dated 26.10.2007
5. Any land in respect of which an application under
section 3 of the Haryana Development and Regulation
of urban Areas Act, 1975 has been made by the
owners prior to the award for converting the land into
a colony, may also be considered for released subject
to the condition that the ownership of the land should
be prior to the notification under section 4 of the Act.6. That the Government may also consider release of
land in the interest of integrated and planned
development for the lands where the owners have
approached the Hon’ble Courts and have obtained
stay dispossession.CWP No.5878 of 2003 (O&M) and connected petitions 22
Provided that the Government may release any land
on the grounds other than stated above under
Section 48(1) of the act under exceptionally
justifiable circumstances for the reasons to be
recorded in writing.”Report of the Chief Secretary dated 10.2.2009 :
“Within the framework of the Act of 1975, the
Government has from time to time formulated
several policies which inter alia also relate to issues
pertaining to acquisition of land under the Land
Acquisition act, 1894 and its release during the
acquisition process. Land being a sensitive and a
dynamic sector, the policies pertaining to release of
land from acquisition have also evolved with the
passage of time during the past 18 years period.
Specific policies pertaining to release of land from
acquisition vis a vis the applications for grant of
licence have been in vogue since 1991.14. Once some land falls within the urbanization
limits defined in the development Plan, notified
under the provisions of Act No.41 of 1963, the land
use changes from the existing agriculture use to
some urban land use, viz, Residential, Commercial,
Institutional, Open Space etc. It is only a matter of
time when the agriculture use of the said land gets
converted to the prescribed land use as per the
Development Plan, either through a state agency like
HUDA or HSIDC or through some private licencee.
‘Change of Land Use’ (CLU) permission for a use
CWP No.5878 of 2003 (O&M) and connected petitions 23in conformity to the Development Plan can also be
undertaken by the land owner.15. The land owner, whose land falls within the
urbanisable limits, is entitled to best possible price
that his land can fetch. The policies of the
Government have, therefore, been aimed at
empowerment of the land owner, whose land comes
under urbanisable limits. In order to gain technical
competence for development of a colony and be
eligible for grant of licence, such land owners,
however, enter into an agreement with colonizers of
their choice. The licence is still granted in favour of
the land owner who is free to enter into an
agreement with a colonizer offering him the best
terms.”12. In the light of pleadings and submissions made, following
questions arise for consideration:-
(i) Whether notified purpose of acquisition is
non-existent when 90% of notified land
has been released contrary to the scheme
of law?(ii) Whether in absence of public purpose,
acquisition proceedings are vitiated by
colourable exercise of power and are
ultra-vires the Act, apart from being hit
by Articles, 14, 21 and 300-A of the
Constitution?CWP No.5878 of 2003 (O&M) and connected petitions 24
(iii) Whether there is no valid consideration of
objections under Section 5-A of the Act,
vitiating notification under Section 6 of
the Act?(iv) Whether release of land from acquisition
under policy of State is not covered by
Section 48 of the Act and whether such
policy is consistent with the scheme of
the Act?13. It can hardly be disputed that validity of acquisition
depends on existence of ‘public purpose’. Acquisition without
public purpose is not only ultravires the Act but also Articles 14,
21 and 300A of the Constitution. Section 6(3) of the Act makes
declaration to be conclusive evidence of existence of public
purpose but where decision making process is questioned, such
declaration is subject to judicial review. Exercise of power of
acquisition has to be bonafide and for permissible purpose. Section
48 of the Act allows the Government to withdraw from acquisition
before taking possession. Exercise of such power like any other
power of a public authority is subject to judicial review. Such
power is executive and not legislative power and can be exercised
as per declared legislative policy. In exercise thereof, no policy can
be laid down which may be in conflict with the scheme of the Act.
CWP No.5878 of 2003 (O&M) and connected petitions 25In absence of express guidelines under section 48 of the Act, the
guidelines have to be read into the said provision from the scheme
of the legislation. Once land is declared to be needed for a
particular public purpose, the affected party is entitled to raise
objections as to existence of the said public purpose, suitability of
land for acquisition and such objections have to be considered
fairly. Normally, before the land vests in the State, the State cannot
go back from the declared public purpose. Section 48 of the Act
does not enable the Government to frame a policy to go back from
the declared public purpose. No law can be read as conferring
unguided discretion lest it violates guarantee of equal protection of
laws under Article 14 of the Constitution. (See In re: The Special
Courts Bill, (1979) 1 SCC 380, para 72(9).
14. The Court has to see not the form of action but the
effect thereof, as held in Rustom Cavasjee Cooper v. Union of
India, AIR 1970 SC 564 and Smt.Maneka Gandhi v. Union of
India and another, AIR 1978 SC 597. In Maneka Gandhi
(supra), while discussing the approach for judging the validity of
State action, the doctrine that object and form of State action alone
can determine the extent of protection available, was rejected. It
was held that the approach of the Court is to see not merely object
and form of the State action but its effect. Following observations
from R.C.Cooper (supra) were relied upon:-
CWP No.5878 of 2003 (O&M) and connected petitions 26“……….. it is not the object of the authority making the
law impairing the right of a citizen nor the form of
action that determines the protection he can claim; it is
the effect of the law and of the action upon the right
which attract the jurisdiction of the Court to grant
relief. If this be the true view, and we think it is, in
determining the impact of State action upon
constitutional guarantees which are fundamental, it
follows that the extent of protection against impairment
of a fundamental right is determined not by the object
of the Legislature nor by the form of the action, but by
its direct operation upon the individual’s right.”“We are of the view that the theory that the object
and form of the State action determine the extent
of protection which the aggrieved party may claim
is not consistent with the constitutional
scheme……………..”15. At this stage, it will be appropriate to discuss the
concepts of public purpose, exercise of power by public authority,
scope of power under section 48 and judicial review thereof in the
light of leading judgments.
Public Purpose:
16.1 In State of Bihar v. Kameshwar Singh, AIR 1952 SC
252, para 45, it was observed:-
“……The sovereign power to acquire property
compulsorily is a power to acquire it only for a public
purpose. there is no power in the sovereign to acquire
private property in order to give it to private persons.CWP No.5878 of 2003 (O&M) and connected petitions 27
Public purpose is a content of the power itself.
Reference in this connection may be made to
Willoughby’s Constitutional Law (page 795). Therein it
is stated:“As between individuals, no necessity, however
great, no exigency, however imminent, no
improvement, however valuable, no refusal,
however unneighbourly, no obstinacy, however
unreasonable, no offers of compensation, however
extravagant, can compel or require any man to
part with an inch of his estate.”It was further observed in para 52:-
“…..There can be no manner of doubt that acquisition
of private property by legislation under Entries 33, 36
and 42 can only be made either for purposes of the
Union or for purposes of the State or for a public
purpose and that it is unnecessary to state in express
terms in the statute itself the precise purpose for which
property is being taken, provided from the whole tenor
and intendment of the Act it could be gathered that the
property was being acquired either for purpose of the
State or of purposes of the public and that the intention
was to benefit the community at large….”16.2 The above observations were reiterated in Sooraram
Pratap Reddy v. District Collector, Ranga Reddy District,
(2008) 9 SCC 552. Same view was taken in Hindustan
Petroleum Corpn. Ltd. v. Darius Shapur Chenai,(2005) 7 SCC
627, paras 15,16,18 and 28, Secy.Jaipur Development Authority
CWP No.5878 of 2003 (O&M) and connected petitions 28v. Daulat Mal Jain, (1997) 1 SCC 35 and R.L.Arora v. State of
UP, AIR 1964 SC 1230, para 17.
16.3 In Chairman, Indore Vikas Pradhikaran v. Pure
Industrial Coke & Chemicals Ltd.,(2007) 8 SCC 705, it was
observed:-
“53. The right to property is now considered to be
not only a constitutional right but also a human right.54. The Declaration of Human and Civic Rights of
26-8-1789 enunciates under Article 17:
“17. Since the right to property is inviolable and
sacred, no one may be deprived thereof, unless
public necessity, legally ascertained, obviously
requires it and just and prior indemnity has been
paid”.Further under Article 17 of the Universal
Declaration of Human Rights, 1948 dated 10-12-
1948, adopted in the United Nations General
Assembly Resolution it is stated that: (i) Everyone
has the right to own property alone as well as in
association with others. (ii) No one shall be
arbitrarily deprived of his property.55. Earlier human rights were existed to the claim of
individuals right to health, right to livelihood, right to
shelter and employment, etc. but now human rights
have started gaining a multifaceted approach. Now
property rights are also incorporated within the
definition of human rights. Even claim of adverse
possession has to be read in consonance with human
rights. As President John Adams (1797-1801) put it:“Property is surely a right of mankind as real as
liberty.”Adding,
“The moment the idea is admitted into society that
property is not as sacred as the laws of God, and that
CWP No.5878 of 2003 (O&M) and connected petitions 29there is not a force of law and public justice to
protect it, anarchy and tyranny commence.”56. Property, while ceasing to be a fundamental right
would, however, be given express recognition as a legal
right, provisions being made that no person shall be
deprived of his property save in accordance with law.(emphasis supplied)
16.4 In Devinder Singh v. State of Punjab,(2008) 1 SCC
728, it was observed:-
“43. Expropriatory legislation, as is well known, must
be strictly construed. When the properties of a citizen
are being compulsorily acquired by a State in exercise
of its power of eminent domain, the essential
ingredients thereof, namely, existence of a public
purpose and payment of compensation are principal
requisites therefor….”16.5 In Smt. Somawanti and others v. The State of
Punjab and others, AIR 1963 SC 151, the Hon’ble Supreme
Court observed:-
“40. Though we are of the opinion that the courts
are not entitled to go behind the declaration of the
Government to the effect that a particular purpose
for which the land is being acquired is a public
purpose we must emphasise that the declaration of
the Government must be relatable to a public
purpose as distinct from a purely private purpose.CWP No.5878 of 2003 (O&M) and connected petitions 30
If the purpose for which the acquisition is being
made is not relatable to public purpose then a
question may well arise whether in making the
declaration there has been, on the part of the
Government a fraud on the power conferred upon
it by the Act. In other words, the question would
then arise whether that declaration was merely a
colourable exercise of the power conferred by the
Act, and, therefore, the declaration is open to
challenge at the instance of the party aggrieved.
To such a declaration the protection of Section 6
(3) will not extend. For, the question whether a
particular action was the result of a fraud or not
is always justiciable, provisions such as Section 6
(3) notwithstanding.” (emphasis supplied)16.6 ‘Public purpose’ is defined under section 3(f) of the Act
as under:-
“3(f) – the expression “public purpose” includes –
(i) the provision of village sites, or the extension,
planned development or improvement of existing
village sites;(ii) the provision of land for town or rural planning;
(iii) the provision of land for planned development of
land from public funds in pursuance of any scheme or
policy of 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;(iv) the provision of land for a corporation owned or
controlled by the State;CWP No.5878 of 2003 (O&M) and connected petitions 31
(v) the provision of land for residential purposes to the
poor or landless or to person residing in areas affected
by natural calamities, or to persons displaced or
affected by reason of the implementation of any
scheme undertaken by Government, any local authority
or a corporation owned or controlled by the State;(vi) the provision of land for carrying out any
educational housing, health or slum clearance scheme
sponsored by Government or by any authority
established by Government for carrying out any such
scheme, or with the prior approval of the appropriate
Government, by a local authority, or a society
registered under the Societies Registration Act, 1860,
or under any corresponding law for the time being in
force in a State, or a co-operative society within the
meaning of any law relating to co-operative societies
for the time being in force in any State;(vii) the provision of land for any other scheme of
development sponsored by Government, or, with the
prior approval of the appropriate Government, by a
local authority;(viii) the provision of any premises or building for
locating a public office, but does not include
acquisition of land for Companies”.16.7 The definition of ‘Public purpose’ came up for
consideration before the Hon’ble Supreme Court in H.M.T House
Building Cooperative Society v. Syed Khader and others, AIR
1995 SC 2244 and in paras 20,21 and 22, it was observed:-
CWP No.5878 of 2003 (O&M) and connected petitions 32“20. Now the question which is to be answered is
as to whether in view of the definition of “public
purpose” introduced by the aforesaid amending
Act 68 of 1984 in Section 3(f)(vi), is it open to the
appropriate Government to acquire land for co-
operative society for housing scheme without
making proper enquiry about the members of the
Society and without putting such housing co-
operative society to term in respect of nature of
construction, the area to be allotted to the
members and restrictions on transfer thereof ?21. According to us, in Section 3(f)(vi) the
expression “housing” has been used along with
educational and health schemes. As such the
housing scheme contemplated by Section 3(f)(vi)
shall be such housing scheme which shall serve
the maximum number of members of the society.
Such housing scheme should prove to be useful to
the public. That is why the Parliament while
introducing a new definition of “public purpose”,
said that any scheme submitted by any co-operative society relating to housing, must receive
prior approval of the appropriate Government and
then only the acquisition of the land for such
scheme can be held to be for public purpose. If
requirement of Section 3(f)(vi) is not strictly
enforced, every housing co-operative society shall
approach the appropriate Government for
acquisition by applying Section 3(f)(vi) instead of
pursuing the acquisition under Part VII of the Act
CWP No.5878 of 2003 (O&M) and connected petitions 33which has become more rigorous and restrictive.
In this background, it has to be held that the prior
approval, required by Section 3(f)(vi), of the
appropriate Government is not just a formality; it
is a condition precedent to the exercise of the
power of acquisition by the appropriate
Government for a housing scheme of a co-operative society.
22. In the present case, a hybrid procedure appears
to have been followed. Initially, the appellant
society through M/s. S. R. Constructions
purported to acquire the lands by negotiation and
sale by the land holders. Then from terms of the
agreement dated 17-3-1988, it appears that the
procedure prescribed in Part-VII was to be
followed and the lands were to be acquired at the
cost of the appellant society treating it to be a
“company”. The allegation made on behalf of the
appellant society that the housing scheme had
been approved by the appropriate Government on
7-11-1984 shall not be deemed to be a prior
approval within the meaning of Section 3(f)(vi)
but an order giving previous consent as required
by Section 39 of Part-VII of the Act. In the
agreement dated 17-3-1988 it has been
specifically stated “And whereas the Government
having caused inquiry to be made in conformity
with the provisions of the said Act and being
satisfied as a result of such inquiry that the
acquisition of the said land is needed for the
CWP No.5878 of 2003 (O&M) and connected petitions 34purpose referred to above has consented to the
provisions of the said act being in force in order to
acquire the said land for the benefit of the society
members to enter in the agreement hereinafter
contained with the Government”. (emphasis
supplied)
But, ultimately, the lands have been acquired on
behalf of the appropriate Government treating the
requirement of the appellant society as for a
public purpose within the meaning of Section 3(f)(vi). It is surprising as to how respondent M/s. S.
R. Constructions entered into agreement with the
appellant society assuring it that the lands, details
of which were given in the agreement itself, shall
be acquired by the State Government by following
the procedure of Sections 4(1) and 6(1) and for
this, more than one crore of rupees was paid to
M/s. S. R. Constructions (respondent No.11).”16.8. Following the observations in H.M.T (supra), in
Vyalikaval Housebuilding Coop. Society by its Secretary v.
V.Chandrappa and others, (2007) 9 SCC 304, the Hon’ble
Supreme Court upheld quashing of acquisition on the ground that
the same was for colourable exercise of power. The finding of the
High Court extracted in para 3 of the said judgment was as under:-
“The irresistible inference flowing from the facts
and circumstances of these cases is, whereas the
CWP No.5878 of 2003 (O&M) and connected petitions 35poser conferred under the Land Acquisition Act is
for acquiring lands for carrying out housing
scheme by a housing society, in each of the cases
the acquisition of lands is not for a bona fide
housing scheme but is substantially for the
purpose of enabling the concerned office bearers
of respondent- societies and their agents to
indulge in sale of sites in the guise of allotment of
sites to the Members/ Associate members of the
society to make money as alleged by the
petitioners and therefore it is a clear case of
colourable exercise of power. Thus the decision of
the Government to acquire the lands suffers from
legal mala fides and therefore the impugned
Notifications are liable to be struck down.”Approving the said findings, relying upon earlier judgment in
H.M.T (supra), it was observed:-
“8.Similarly, in H.M.T.House Building Co-
operative Society (1995) 3 SCC 128 in which the
present appellant was one of the societies, which
challenged the order of the Division Bench of the
High Court of Karnataka, their Lordships
dismissed the Special Leave Petition following
the judgment in H.M.T. House Building Co-operative Society (supra). In paragraph 3 of the
judgment while dealing with the facts of this
society their Lordships observed that this society
had advertised inviting persons who want to have
mansions in the city of Bangalore and had also
CWP No.5878 of 2003 (O&M) and connected petitions 36given the names and addresses of the
representative at Dubai.”16.9 In Padma v. Hiralal Motilal Desarda and others,
AIR 2002 SC 3252, the issue considered by the Hon’ble Supreme
Court was whether City and Industrial Development Corporation
to whom land was allotted by the State after acquisition could
transfer the same to professional builders for development. It was
observed that land allotted to CIDCO could not have been parted
with by sole consideration of money making. CIDCO was not a
commercial concern. The land had to be utilized according to plan.
It was observed:-
“…..the constitutional court acts as the sentinel on
the qui vive discharging its obligation as
custodian of the constitutional morals, ethics and
code of conduct – well defined by series of
judicial pronouncements. The Court is obliged to
see while scrutinising the conduct and activities of
a public body constituted with the avowed object
of serving the society to see that its activities bear
no colour except being transparent, are guided
with the object of public good and are within the
four corners of law governing the same. The
holder of every public office hold a trust for
public good and therefore his actions should all be
above board….”Xx xx xxxx xxxx CWP No.5878 of 2003 (O&M) and connected petitions 37“31. It is not disputed that CIDCO is supposed to
carry out its activities on ‘no profit no loss’ basis
and that is the basis on which CIDCO, as per its
own case, has been acting until it decided to part
with the chunk of developable land by bulk sale
which proposal was obviously in departure from
the policy of serving on ‘no profit no loss’ basis
such people as were craving for a roof over their
heads. The High Court while dealing with this
aspect of the matter has assigned several
convincing reasons why the very concept of sale
of bulk land cannot sail with CIDCO, either in
law of in propriety. Assuming that an
extraordinary situation which there was none –had warranted a policy decision for bulk sale the
decision should have been of the Board and
accompanied by reasons. In the present case, if
only the proposal would have been placed before
the Board of CIDCO in all probability it would
have been discarded. It is pertinent to note that
good number of officials, through whose hands
the proposal passed while travelling up, were not
agreeable to and had their own reservations on the
proposal of such bulk sale. What prevailed with
one or two of those placed at the higher rung or
bureaucratic ladder in permitting such bulk sale in
hot haste defies explanation for the simple reason
that in the decisions available on the note sheets
of the record looked into by the High Court no
reasons have been assigned in favour of endorsing
the proposal for bulk land sale. We are not
CWP No.5878 of 2003 (O&M) and connected petitions 38prepared to accept even for a moment that there
was no demand of land. Even if the development
plan for the developable land was not approved by
the State Government there is nothing which had
prevented the CIDCO from carving out small
middle level and larger plots which those who can
afford would have certainly been prepared to take
and build small, middle level or spacious houses
or bungalows for their own residential
requirements. This find support from the
overwhelming demand of land which the High
Court has noted and which demand the CIDCO
had found out of proportion as compared to the
availability of land with it. The decision for bulk
land sale cannot be said to have been taken in
public interest. The High Court has rightly
observed in its judgment that some public
institutions who were allotted large pieces of land
have developed parks and gardens but they are not
open for free access by people generally. The
local residents and children must have place
enough to be used as parks, gardens and for
entertainment which not only act as lungs and
ventilators for suffocating growth of population
but also add luster and beauty to the township.
The utility of such pieces of land acting as buffer
for maintaining ecological balance and
environmental demands needs no emphasis. We
entirely agree with the reasons of the High Court
and the observations made by it while recording
its strong disapproval of bulk sale.CWP No.5878 of 2003 (O&M) and connected petitions 39
32. There is yet another angle of looking at the
propriety of the questioned bulk sale of land by CIDCO
and the manner in which it was done. The land
acquired and entrusted to CIDCO cannot just be
permitted to be parted with guided by the sole
consideration of money-making. CIDCO is not a
commercial concern whose performance is to be
assessed by the amount it earns. Its performance would
be better assessed by finding out the number of needy
persons who have been able to secure shelter through
CIDCO and by the beauty of township and quality of
life for people achieved by CIDCO through its planned
development schemes. So long as such objectives are
fulfilled CIDCO’s operation on ‘No-profit-No Loss’
basis cannot be found fault with. There should have
been no hurry on the part of CIDCO in disposing of the
balance land and that too guided by the sole
consideration of earning more money. Even that object
the CIDCO has not been able to achieve for at the end
it has parted with land at a price less than Rs. 1500/-
per square meter – the reserved price. Even if a sale of
left-over land was a felt-necessity it should have
satisfied at least two conditions: (i) a well-considered
decision at the highest level; and (ii) a sale by public
auction or by tenders after giving a more wide publicity
than what was done so as to attract a larger number of
bidders.”16.10 In Akadasi Padhan v. State of Orissa and others,
AIR 1963 SC 1047, it was observed:-
CWP No.5878 of 2003 (O&M) and connected petitions 40
“29…..It seems to us that when the State carries
on any trade, business or industry, it must
inevitably carry it on either departmentally or
through its officers appointed in that behalf. In the
very nature of things, the State as such, cannot
function without the help of its servants or
employees and that inevitably introduces the
concept of agency in a narrow and limited sense.
If the State cannot act without the aid and
assistance of its employees or servants, it would
be difficult to exclude the concept of agency
together. Just as the State can appoint a public
officer to carry on the trade on its behalf, so it can
appoint an agent to carry on the trade on its
behalf. Normally and ordinarily, the trade should
be carried on departmentally or with the
assistance of public servants appointed in that
behalf. But there may be some trades or
businesses in which it would be inexpedient to
undertake the work of trades or businesses
departmentally or with the assistance of State
servants. In such cases, it would be open to the
State to employ the services of agents, provided
the agents work on behalf of the State and not
for themselves. (underlining supplied).
CWP No.5878 of 2003 (O&M) and connected petitions 41Exercise of power by a Public Authority: Concept of
Colourable exercise of power17. In Collector (DM) v. Raja Ram Jaiswal, (1985) 3
SCC 1, it was observed:-
“25. It is well settled that where power is conferred to
achieve a certain purpose, the power can be exercised
only for achieving that purpose. Sec. 4(1) confers
power on the Government and the Collector to acquire
land needed for a public purpose…..26. Where power is conferred to achieve a purpose it
has been repeatedly reiterated that the power must be
exercised reasonably and in good faith to effectuate the
purpose. And in this context ‘in good faith’ means ‘for
legitimate reasons’! Where power is exercised for
extraneous or irrelevant considerations or reasons, it is
unquestionably a colourable exercise of power or fraud
on power and the exercise of power is vitiated. If the
power to acquire land is to be exercised, it must be
exercised bona fide for the statutory purpose and for
none other. If it is exercised for an extraneous,
irrelevant or non-germane consideration, the acquiring
authority can be charged with legal mala fides. In such
a situation there is no question of any personal ill-will
or motive. In Municipal Council of Sydney v.Campbell, 1925 AC 338 at p. 375 it was observed that
irrelevant considerations on which power to acquire
land is exercised, would vitiate compulsory purchase
orders or scheme depending on them. In State of Punjab
CWP No.5878 of 2003 (O&M) and connected petitions 42v. Gurdial Singh, (1980) 1 SCR 1071 : (AIR 1980 SC
319) acquisition of land for constructing a grain market
was challenged on the ground of legal mala fides.
Upholding the challenge this Court speaking through
Krishna Iyer, J. explained the concept of legal mala
fides in his hitherto inimitable language, diction and
style and observed as under (at p. 321 of AIR) :“Pithily put, bad faith which invalidates the
exercise of power – sometimes called colourable
exercise or fraud on power and oftentimes
overlaps motives, passions and satisfactions – is
the attainment of ends beyond the sanctioned
purposes of power by simulation or pretension of
gaining a legitimate goal. If the use of the power
is for the fulfilment of a legitimate object the
actuation or catalysation by malice is not
legicidal. The action is bad where the true object
is to reach an end different from the one for which
the power is entrusted, goaded by extraneous
considerations, good or bad, but irrelevant to the
entrustment; When the custodian of power is
influenced in its exercise by considerations
outside those for promotion of which the power is
vested the court calls it a colourable exercise and
is undeceived by illusion. In a broad, blurred
sense, Benjamin Disraeli was not off the mark
even in Law when he stated : “I repeat ………that
all power is a trust – that we are accountable for its
exercise – that, from the people, and for the
people, all springs, and all must exist.”(underlining ours)
17.1 In Bhikhubhai Vithlabhai Patel v. State of Gujarat,
(2008) 4 SCC 144, it was observed:-
“32……The powers of public authorities are
therefore essentially different from those of
private persons. A man making his will may,
subject to any rights of his dependants, dispose of
CWP No.5878 of 2003 (O&M) and connected petitions 43his property just as he may wish. He may act out
of malice or a spirit of revenge, but in law this
does not affect his exercise of his power. In the
same way a private person has an absolute power
to allow whom he likes to use his land, to release
a debtor, or, where the law permits, to evict a
tenant, regardless of his motives. This is
unfettered discretion. But a public authority may
do none of these things unless it acts reasonably
and in good faith and upon lawful and relevant
grounds of public interest. The whole conception
of unfettered discretion is inappropriate to a
public authority, which possesses powers solely in
order that it may use them for the public good.There is nothing paradoxical in the imposition of
such legal limits. It would indeed be paradoxical
if they were not imposed.”17.2 In Kasturi Lal Lakshmi Reddy v. State of J &
K, (1980) 4 SCC 1, it was observed:
“10…..The discretion of the Government has been
held to be not unlimited in that the Government
cannot give largess in its arbitrary discretion or at
its sweet will or on such terms as it chooses in its
absolute discretion. There are two limitations
imposed by law which structure and control the
discretion of the Government in this behalf. The
first is in regard to the terms on which largess may
be granted and the other, in regard to the persons
who may be recipients of such largess.”CWP No.5878 of 2003 (O&M) and connected petitions 44
17.3 In Lucknow Development Authority v. M.K. Gupta,
(1994) 1 SCC 243 , it was observed:-
“8….Under our Constitution sovereignty vests in
the people. Every limb of the constitutional
machinery is obliged to be people oriented. No
functionary in exercise of statutory power can
claim immunity, except to the extent protected by
the statute itself. Public authorities acting in
violation of constitutional or statutory provisions
oppressively are accountable for their behaviour
before authorities created under the statute like the
commission or the courts entrusted with
responsibility of maintaining the rule of law…”
(emphasis supplied).17.4 In Ramana Dayaram Shetty v. International
Airport Authority of India, AIR 1979 SC 1628 it was observed:-
“10…..Whatever be the concept of the rule of law,
whether it be the meaning given by Dicey in his
“The Law of the Constitution” or the definition
given by Hayek in his “Road to Serfdom” and
“Constitution of liberty” or the exposition set forth
by Herry Jones in his “The Rule of Law and the
Welfare State”, there is, as pointed out by
Mathew, J., in his article on “The Welfare State,
Rule of Law and Natural Justice” in Democracy,
Equality and Freedom “substantial agreement in
juristic thought that the great purpose of the rule
CWP No.5878 of 2003 (O&M) and connected petitions 45of law notion is the protection of the individual
against arbitrary exercise of power, wherever it is
found”. It is indeed unthinkable that in a
democracy governed by the rule of law the
executive Government or any of its officers
should possess arbitrary power over the interests
of the individual. Every action of the executive
Government must be informed with reason and
should be free from arbitrariness. That is the very
essence of the rule of law and its bare minimal
requirement. And to the application of this
principle it makes no difference whether the
exercise of the power involves affection of some
right or denial of some privilege.11. To-day the Government, in a welfare State is
the regulator and dispenser of special services and
provider of a large number of benefits, including
jobs contracts, licences, quotas, mineral rights etc.
The Government pours forth wealth, money,
benefits, services, contracts, quotas and licences.
The valuables dispensed by Government take
many forms, but they all share one characteristic.
They are steadily taking the place of traditional
forms of wealth. These valuables which derive
from relationships to Government are of many
kinds. They comprise social security benefits,
cash grants for political sufferers and the whole
scheme of State and local welfare. Then again,
thousands of people are employed in the State and
the Central Government and local authorities.Licences are required before one can engage in
CWP No.5878 of 2003 (O&M) and connected petitions 46many kinds of businesses or work. The power of
giving licences means power to withhold them
and this gives control to the Government or to the
agents of Government on the lives of many
people. Many individuals and many more
businesses enjoy largess in the form of
Government contracts. These contracts often
resemble subsidies. It is virtually impossible to
lose money on them and many enterprises are set
up primarily to do business with Government.
Government owns and controls hundreds of acres
of public land valuable for mining, and other
purposes. These resources are available for
utilisation by private corporations and individuals
by way of lease or licence. All these mean growth
in the Government largess and with the increasing
magnitude and range of governmental functions
as we move closer to a welfare State, more and
more of our wealth consists of these new forms.
Some of these forms of wealth may be in the
nature of legal rights but the large majority of
them are in the nature of privileges. But on that
account, can it be said that they do not enjoy any
legal protection? Can they be regarded as gratuity
furnished by the State so that the State may
withhold, grant or revoke it at its pleasure? Is the
position of the Government in this respect the
same as that of a private giver? We do not think
so. The law has not been slow to recognise the
importance of this new kind of wealth and the
need to protect individual interest in it and with
CWP No.5878 of 2003 (O&M) and connected petitions 47that end in view, it has developed new forms of
protection. Some interests in Government largess,
formerly regarded as privileges, have been
recognised as rights while others have been given
legal protection not only by forging procedural
safeguards but also by confining / structuring and
checking Government discretion in the matter of
grant of such largess. The discretion of the
Government has been held to be not unlimited in
that the Government cannot give or withhold
largess in its arbitrary discretion or at its sweet
will. It is insisted, as pointed out by Professor
Reich in an especially stimulating article on “The
New Property” in 73 Yale Law Journal 733, “that
Government action be based on standards that are
not arbitrary or unauthorised.” The Government
cannot be permitted to say that it will give jobs or
enter into contracts or issue quotas or licences
only in favour of those having grey hair or
belonging to a particular political party or
professing a particular religious faith. The
Government is still the Government when it acts
in the matter of granting largess and it cannot act
arbitrarily. It does not stand in the same position
as a private individual.12. It must, therefore, be taken to be the law that
where the Government is dealing with the public,
whether by way of giving jobs or entering into
contracts or issuing quotas or licences or granting
other forms of largess, the Government cannot act
CWP No.5878 of 2003 (O&M) and connected petitions 48arbitrarily at its sweet will and, like a private
individual, deal with any person it pleases, but its
action must be in conformity with standard or
norm which is not arbitrary, irrational or
irrelevant. The power or discretion of the
Government in the matter of grant of largess
including award of jobs, contracts quotas, licences
etc., must be confined and structured by rational,
relevant and non-discriminatory standard or norm
and if the government departs from such standard
or norm in any particular case or cases, the action
of the Government would be liable to be struck
down, unless it can be shown by the Government
that the departure was not arbitrary, but was based
on some valid principle which in itself was not
irrational, unreasonable or discriminatory…”
(emphasis supplied)17.5 In Shiv Sagar Tiwari v. Union of India, (1997)
1 SCC 444, it was observed:-
“1.The administrative law has of late seen vast
increase in discretionary powers. But then, the
discretion conferred has to be exercised to
advance the purpose to subserve which the power
exists. Even the Minister, if he/she be the
repository of discretionary power, cannot claim
that either there is no discretion in the matter or
unfettered discretion. This proposition was
rejected emphatically by the House of Lords in the
landmark decision of Padfield 1968 AC 997. This
CWP No.5878 of 2003 (O&M) and connected petitions 49apart, as pointed out in United States v.
Wunderlich 342 US 98:“Law has reached its finest moments when it
has freed man from the unlimited discretion
of some ruler, some … official, some
bureaucrat…. Absolute discretion is a
ruthless master. It is more destructive of
freedom than any of man’s other
inventions.”17.6 In V. Purushotham Rao v. Union of India,
(2001) 10 SCC 305, it was observed:-
26……When a State property as distinct from a
private property is being dealt with by a Minister
then it is of paramount importance that such
public property must be dealt with for public
purpose and in the public interest. The disposal of
a public property undoubtedly partakes the
character of a trust and therefore, in the matter of
such disposal, there should not be any suspicion
of a lack of principle. The exercise of discretion
must not be arbitrary or capricious or for any
extraneous considerations…..”17.7 In BEML Employees House Building Coop. Society
Ltd. v. State of Karnataka,(2005) 9 SCC 248, it was observed:-
“7…..Wide the discretion may be, but not wild.
All exercise of statutory discretion must be based
on reasonable grounds and cannot lapse into
arbitrariness or caprice which is anathema to the
rule of law envisaged in Article 14 of the
Constitution.”CWP No.5878 of 2003 (O&M) and connected petitions 50
17.8 In S.G.Jaisinghani v. Union of India, AIR 1967
SC 1427, it was observed:-
“14. In this context it is important to emphasize
that the absence of arbitrary power is the first
essential of the rule of law upon which our whole
constitutional system is based. In a system
governed by rule of law, discretion, when
conferred upon executive authorities, must be
confined within clearly defined limits. The rule of
law from this point of view means that decisions
should be made by the application of known
principles and rules and in general, such decisions
should be predictable and the citizen should know
where he is. If a decision is taken without any
principle or without any rule it is unpredictable
and such a decision is the antithesis of a decision
taken in accordance with the rule of law. (See
Dicey- “Law of the Constitution -Tenth Edn.,
Introduction cx). “Law has reached its finest
moments,” stated Douglas, J. in United States v.Wunderlich. (1951) 342 US 98, “when it has freed
man from the unlimited discretion of some
ruler……..Where discretion is absolute man has
always suffered. It is in this sense that the rule of
law may be said to be the sworn enemy of
caprice .Discretion as Lord Mansfield stated it in
classic terms in the case of John Wilkes. (1770) 4
Burr 2528 at p. 2539 “means sound discretion
guided by law. It must be governed by rule not by
CWP No.5878 of 2003 (O&M) and connected petitions 51humour it must not be arbitrary, vague and
fanciful.”Scope of Judicial review of exercise of power by public
authority:18.1 In LPA No.179 of 2008, State of Haryana v Ashok
Chopra, decided on 24.9.2008, a Bench of this Court, while
deciding appeal against judgment of Single Bench quashing
acquisition on account of arbitrary use of policy of release
observed:-
“10….The process of acquisition was, thus, used to
enable colonizers to take over the private land for
their purpose instead of public purpose and the State
became party to that by releasing such land in favour
of colonizers who were not even owners at the time of
acquisition. No reasoned order had been passed on
the objection of the petitioner that his land was not fit
for acquisition or that he was entitled to parity with
others. The policy of exemption had been thus
arbitrarily applied and benefit given only to some
land owners without application of mind uniformly
and without fair opportunity to similarly placed other
land owners.Xx xx xxx xxx xxxWe do not find any merit in the contention that there
is absolute power of the State or that exercise of
discretion by the State can never be interfered with by
CWP No.5878 of 2003 (O&M) and connected petitions 52this Court. In exercise of its power of judicial review,
Court can certainly see that the Executive acts
lawfully, bonafide and within the limit of its power. If
there is abuse or misuse of power, jurisdiction of this
Court can certainly be invoked. Rule of law has to be
prevail and it is the basic requirement of Article 14
that the State acts fairly, reasonably and in good faith.
We may refer to well known observations of the
Hon’ble Supreme Court on this issue:-“…..Needless to say that Courts in India,
which function under a written Constitution
which confers fundamental rights on
citizens, have exercised, far greater powers
than those exercised by Courts in England
where there is no written constitution and
there are no fundamental rights. Therefore
the decisions of courts in England as regards
powers of the Courts, “surveillance”, as
Lord Pearce calls it, or the control which the
judiciary have over the Executive, as Lord
Upiohn put it, indicate at least the minimum
limit to which Courts in this country would
be prepared to go in considering the validity
of orders of the Government of its officers.
In that sense the decision of the House of
Lords in padfield v. Minister of Agriculture
Fisheries and Food(1968 AC 997)is a
landmark in the history of the exercise by
Courts of their power of surveillance.13. The Executive have to reach their
decisions by taking into account relevant
considerations. They should not refuse to
consider relevant matter nor should take into
account wholly irrelevant or extraneous
consideration. They should not misdirect
themselves on a point of law. Only such a
decision will be lawful. The courts have
power to see that the Executive acts lawfully.It is no answer to the exercise of that power
to say that the Executive acted bona fide nor
CWP No.5878 of 2003 (O&M) and connected petitions 53that they have bestowed painstaking
consideration….”(Hochtief Gammon v.
State of Orissa & Ors. AIR 1975 SC 2226)
“……That Court has power, by the
prerogative writ of mandamus, to amend all
errors which tend to the oppression of the
subject or other misgovernment, and ought to
be used when the law has provided no
specific remedy, and justice and good
government require that there ought to be
one for the execution of the common law or
the provisions of a statute…” (The
Comptroller and Auditor General of India,
Gian Prakash, New Delhi & anr. V. K.S.Jagannathan & anr. AIR 1987 SC 537).
“……The Constitution enshrines and
guarantees the rule of law and Art. 226 is
designed to ensure that each and every
authority in the State, including the
Government acts bona fide and within the
limits of its power and we consider that when
a Court is satisfied that there is an abuse or
misuse of power and its jurisdiction is
invoked, it is incumbent on the Court to
afford justice to the individual.( S, Partap
Singh v. State of Punjab AIR 1964 SC 72).
“……The basic requirement of Art. 14 is
fairness in action by the State and we find it
difficult to accept that the State can be
permitted to act otherwise in any field of its
activity, irrespective of the nature of its
function, when it has the uppermost duty to
be governed by the rule of law. Non-arbitrariness, in substance, is only fair play in
action. We have no doubt that this obvious
requirement must be satisfied by every action
of the State or its instrumentality in order to
satisfy the test of validity….Xx xx xxx xxxx
………all State actions ‘whatever their mien
are amenable to constitutional limitations, the
CWP No.5878 of 2003 (O&M) and connected petitions 54alternative being to permit them ‘to flourish
as an imperium in imperio’….Xx XX XXX XXX
…… Where there is arbitrariness in State
action, Art. 14 springs in and judicial review
strikes such an action down. Every action of
the executive authority must be subject to
rule of law and must be informed by reason.
So, whatever be the activity of the public
authority, it should meet the test of Art.14………” ((Kumari Shrilekha Vidyarthi
etc. v. State of U.P. & ors. AIR 1991 SC537).
“…..In requiring statutory powers to be
exercised reasonably, in good faith, and on
correct grounds, the Courts are still working
within the bounds of the familiar principle of
ultra vires. The Court assumes that
Parliament cannot have intended to authorize
unreasonable action which is therefore ultra
vires and void…..” (Express Newspapers
Pvt. Ltd. V. UOI, AIR 1986 SC 872).18.2 In Khudiram Das v. State of W.B., AIR 1975 SC 550,
it was observed:-
“11. This discussion is sufficient to show that there is
nothing like unfettered discretion immune from judicial
reviewability. The truth is that in a Government under
law, there can be no such thing as unreviewable
discretion. ‘Law has reached its finest moments’ said
justice Douglas,
“When it has freed man from the unlimited
discretion of some ruler, some…. official, some
bureaucrat….Absolute discretion is a ruthless
master. It is more destructive of freedom than any
of man’s other inventions.” United States v.
Wunderlich, (1951) 342 US 98.CWP No.5878 of 2003 (O&M) and connected petitions 55
18.3 In A. K. Roy v. Union of India, AIR 1982 SC
710, it was observed:-
“7.Counsel drew our attention, with great emphasis, to
the statements in Montesquieu’s ‘Esprit deslois’ (1748)
and Blackstone’s ‘Commentaries on the Laws of
England’ (1765) which are reproduced in ‘Modern
Political Constitutions’ by C. F. Strong (8th edition) at
page 211. According to Montesquieu, “when the
legislative and executive powers are united in the same
person or body of persons there can be no liberty,
because of the danger that the same monarch or senate
should enact tyrannical laws and execute them in a
tyrannical manner”. Blackstone expresses the same
thought by saying that “wherever the right of making
and enforcing the law is vested in the same man or one
and the same body of men, there can be no public
liberty”. Reliance was also placed on views and
sentiments expressed to the same effect in Walter
Begehot’s ‘The English Constitution’ (1867), Wade’s
‘Administrative Law’ (3rd edition) pages 323-324,
‘Constitutional Laws of the British Empire’ by Jennings
and Young, ‘Law and Orders’ by C. K. Allen (1945) and
Harold Laski’s ‘Liberty in the Modern State’ (1961).According to Laski (pages 42-43),
“………..if in any State there is a body of men who
possess unlimited political power, those over
whom they rule can never be free. For the one
assured result of historical investigation is the
lesson that uncontrolled power is invariably
poisonous to those who possess it. They are
always tempted to impose their canon of good
upon others, and, in the end, they assume that the
CWP No.5878 of 2003 (O&M) and connected petitions 56good of the community depends upon the
continuance of their power. Liberty always
demands a limitation of political authority, and it
is never attained unless the rulers of a state can,
where necessary, be called to account. That is why
Pericles insisted that the secret of liberty is
courage.”Finally, counsel drew on Jawaharlal Nehru’s
Presidential Address to the Lucknow Congress (April
12, 1936) in which he referred to the rule by ordinances
as “the humiliation of ordinances” (Selected Works of
Jawaharlal Nehru, Volume 7, page 183).8. We are not, as we cannot be, unmindful of the danger
to peoples liberties which comes in any community
from what is called the tyranny of the majority.
Uncontrolled power in the executive is a great enemy of
freedom and therefore, eternal vigilance is necessary in
the realm of liberty….” (emphasis supplied)18.4 In Common Cause, A Registered Society v. Union of
India, (1999) 6 SCC 667 , it was observed:-
35. No doubt it was open to the House of the
People (Lok Sabha) to take up the issue of the
abuse of discretionary quota by the petitioner in
his capacity as the Minister of State for
Petroleum, and his conduct could have been
debated and scrutinised on the floor of the House,
but the mere fact that this was not done would not
mean that the allotments of petroleum outlets by
him were immune from judicial scrutiny by this
Court under Article 32 of the Constitution.CWP No.5878 of 2003 (O&M) and connected petitions 57
Therefore, even if the matter was not raised on the
floor of the Lok Sabha, it would be amenable to
the jurisdiction of this Court under Article 32 of
the Constitution.Xx xx xx xxx xx
79. The entire case-law was reviewed by R.M.
Sahai, J. in his illuminating judgment in N.
Nagendra Rao & Co. v. State of A.P. AIR 1994SC 2663, in which the case of Nilabati Behera,
AIR 1993 SC 1960, was followed and it was
observed, inter alia, as under: (SCC p. 235, para25)
“25. But there the immunity ends. No
civilised system can permit an executive to
play with the people of its country and claim
that it is entitled to act in any manner as it is
sovereign. The concept of public interest has
changed with structural change in the
society. No legal or political system today
can place the State above law as it is unjust
and unfair for a citizen to be deprived of his
property illegally by negligent act of officers
of the State without any remedy. From
sincerity, efficiency and dignity of State as a
juristic person, propounded in nineteenth
century as sound sociological basis for State
immunity the circle has gone round and the
emphasis now is more on liberty, equality
and the rule of law. The modern social
thinking of progressive societies and the
judicial approach is to do away with archaic
State protection and place the State or the
Government on a par with any other juristic
legal entity. Any watertight
compartmentalisation of the functions of the
State as ‘sovereign and non-sovereign’ or
‘governmental and non-governmental’ is not
sound. It is contrary to modern
jurisprudential thinking. The need of the
State to have extraordinary powers cannot
CWP No.5878 of 2003 (O&M) and connected petitions 58be doubted. But with the conceptual change
of statutory power being statutory duty for
the sake of society and the people the claim
of a common man or ordinary citizen cannot
be thrown out merely because it was done
by an officer of the State even though it was
against law and negligent. Needs of the
State, duty of its officials and right of the
citizens are required to be reconciled so that
the rule of law in a welfare State is not
shaken. Even in America where this doctrine
of sovereignty found its place either because
of the ‘financial instability of the infant
American States rather than to the stability
of the doctrine’s theoretical foundation’, or
because of ‘logical and practical ground’, or
that ‘there could be no legal right as against
the State which made the law’ gradually
gave way to the movement from ‘State
irresponsibility to State responsibility’. In
welfare State, functions of the State are not
only defence of the country or
administration of justice or maintaining law
and order but it extends to regulating and
controlling the activities of people in almost
every sphere, educational, commercial,
social, economic, political and even marital.
The demarcating line between sovereign and
non-sovereign powers for which no rational
basis survives has largely disappeared.
Therefore, barring functions such as
administration of justice, maintenance of
law and order and repression of crime etc.
which are among the primary and
inalienable functions of a constitutional
Government, the State cannot claim any
immunity.”81. For the reasons stated above, we are of the
view that the allotment of petrol outlets by the
petitioner cannot be treated as an “act of the
State” and the rule of immunity invoked by Mr
Parasaran cannot be accepted.”CWP No.5878 of 2003 (O&M) and connected petitions 59
18.5 In I.R.Coelho v. State of TN, (2007) 2 SCC 1, it was
observed:-
“43. The principle of constitutionalism is now a
legal principle which requires control over the
exercise of Governmental power to ensure that it
does not destroy the democratic principles upon
which it is based. These democratic principles
include the protection of fundamental rights. The
principle of constitutionalism advocates a check
and balance model of the separation of powers, it
requires a diffusion of powers, necessitating
different independent centers of decision-making.Xx xx xxx xxxx
56…..In early years, the scope of the guarantee
provided by these rights was considered to be
very narrow. Individuals could only claim limited
protection against the State. This position has
changed since long. Over the years, the
jurisprudence and development around
fundamental rights has made it clear that they are
not limited, narrow rights but provide a broad
check against the violations or excesses by the
State authorities. The fundamental rights have in
fact proved to be the most significant
constitutional control on the Government,
particularly legislative power. This transition from
a set of independent, narrow rights to broad
checks on state power is demonstrated by a series
of cases that have been decided by this Court
CWP No.5878 of 2003 (O&M) and connected petitions 60xx xx xx xxxx
109. Dealing with Articles 14, 19 and 21 in
Minerva Mills case, it was said that these clearly
form part of the basic structure of the Constitution
and cannot be abrogated. It was observed that
three Articles of our constitution, and only three,
stand between the heaven of freedom into which
Tagore wanted his country to awake and the abyss
of unrestrained power.Xx xxx xxxx xxxxxx
129. Equality, rule of law, judicial review and
separation of powers form parts of the basic
structure of the Constitution. Each of these
concepts are intimately connected. There can be
no rule of law, if there is no equality before the
law. These would be meaningless if the violation
was not subject to the judicial review. All these
would be redundant if the legislative, executive
and judicial powers are vested in one organ.
Therefore, the duty to decide whether the limits
have been transgressed has been placed on the
judiciary.130. Realising that it is necessary to secure the
enforcement of the Fundamental Rights, power
for such enforcement has been vested by the
Constitution in the Supreme Court and the High
Courts. Judicial Review is an essential feature of
the Constitution.”Scope of power under section 48
CWP No.5878 of 2003 (O&M) and connected petitions 6119. Once it is to be held that acquisition is permissible only
for public purpose, exercise of power under section 48 has to be
guided by that consideration. Power of acquisition cannot be
enlarged to achieve a purpose other than notified public purpose
by recourse to policy making under section 48. Moreover, this
power is in the nature of exemption and not source of general
policy making. Its exercise has to be restricted to situations not in
contemplation at the time of issuing notification. Otherwise, the
said provision will have the effect of exercising power of
acquisition for purpose other than public purpose and acquisition
itself will be vitiated.
19.1 The Court can take judicial notice of the fact that land
in urban areas is a scarce commodity. Even though, right of
property is subject to the power of taking the property for public
purpose, the same cannot be taken for profiteering or racketeering
by using the device of notification under the Act. Once notification
under the Act is issued, irreversible consequences follow and if
thereafter the land is not used for the notified purpose, exercise of
power of acquisition cannot be held to be bonafide.
19.2 Effect of withdrawal from acquisition is to conferimmense advantage to person in whose favour such power is
exercised which is not permissible except for unforeseen hardships
to State or individual and not for profit to individual or even to the
State. Acquisition cannot be justified when the real purpose is to
CWP No.5878 of 2003 (O&M) and connected petitions 62acquire control over the property for its disposal at discretion.
Once the land is vested in the State, power of transfer of public
property can be exercised in accordance with legal procedures but
before acquisition is completed, the State has no power to dispose
of the said property by using the power of acquisition and then
power of withdrawing therefrom under Section 48, except in the
manner just mentioned. Thus, making of a policy to release land
midway in respect of which power of acquisition has been
exercised only on the ground that some steps envisaged under a
policy are taken by which any individual or even State may be
benefited, would amount to exercise of power of acquisition for a
purpose other than public purpose. Such exercise of power will
also be contrary to notified public purpose.
19.3 The policy of release is sought to be defended on theground that the same will also advance the purpose of
development, though by private persons. Neither this is the
declared purpose of acquisition nor development by private
persons can be treated at par with the development by the State. On
the principle of Akadasi Padhan (supra), private party can be
treated as agent of the State only if the property continues to
remain with the State. Value of the land after initiation of
acquisition proceedings increases manifold and except for cases of
unforeseen hardship, withdrawal from acquisition in favour of any
person amounts to conferment of undue benefit in favour of such
CWP No.5878 of 2003 (O&M) and connected petitions 63person. Sometimes, such person may not be original owner and
sometimes, he may have acquired land just before initiation of
acquisition proceedings. On account of acquisition proceedings, a
person who is unable to obtain licence or is unable to get discretion
of the State for withdrawal from acquisition may be forced to
transfer his land in favour of any other person who may be able to
get a licence by invoking discretion of the State and thereafter
make gains. This apart from being unauthorized by law results in
unfair advantage to those in whose favour the power is exercised at
the cost of original owners who may lose their right for a purpose
other than a public purpose. Right to property can be taken away
by law for a public purpose such as for housing schemes for poor
or landless or other needy persons which may be covered under
section 3(f) of the Act. There is no application of mind on the
question as to who is benefited by policy of release – common man
or property dealers, builders or developers. In absence of any clear
evidence that such action of the State will advance public purpose,
policies for release in favour of persons taking licence cannot be
held to be covered by Section 48 of the Act. Apart from this, such
a policy amounts to exercising legislative power and performance
of essential legislative functions beyond the policy laid down
under the Act.
CWP No.5878 of 2003 (O&M) and connected petitions 64
19.4 This aspect has been discussed in order of this Court in
Chetna Estate (supra) and to avoid repetition, it will be
worthwhile to reproduce the said discussion:-
“18. It is clear that while provisions of the Act read
with Articles 14, 19, 21 and 300-A of the Constitution
permit property of a person to be taken only for
advancing public purpose. The State, while purporting
to take property of a person for public purpose for
development by HUDA, in effect has a different
purpose in mind of licensing of developers, builders or
property dealers. This action may invalidate
acquisition. It has been brought to our notice while
hearing some other cases including CWP No.1356 of
2004 that after initiating acquisition proceedings
ostensibly for a legitimate public purpose, substantial
part of the land so notified has been released to
builders, property dealers, developers, colonizers.
While exercise of power of release is subject matter of
other writ petitions, question which requires
consideration is whether acquisition itself is vitiated
when the same is not for declared public purpose of
development by HUDA which declaration is
conclusive under Section 6(3) of the Act but to advance
policy of the State to encourage development of
acquired land by private builders.19. The policy of the State has created a
situation whereby it has enabled itself to exercise
power of acquisition contrary to ostensible and
CWP No.5878 of 2003 (O&M) and connected petitions 65declared purpose. While the purported object is
acquisition for development by State agencies but in
implementing the policy for giving licences, the effect
is to exercise power of acquisition for private builders
which is not legally permissible. By initiating
acquisition proceedings, the original owners may be
forced to part with the land. Since the purpose for
which in effect, power is exercised, is not permissible
under the law, this amounts to fraud on exercise of
power. Fraud not only vitiates acquisition proceedings
but also exercise of power of release as both have been
inter-linked. The power of licence under the 1975 Act
can have no connection or nexus with the acquisition
proceedings except to use the power of acquisition for
prohibited purpose and to legitimize the same. In such
situation, action of the State may be liable to be
quashed. Wherever power of release has already been
exercised by unlawfully using power of acquisition, the
released land may have to be restored to the State to
prevent unjust enrichment. In those cases, mere
quashing of acquisition may perpetuate illegal release
and conferment of illegal benefits. However, that is the
issue being considered in cases where power of release
is at issue.20. It is not a case of acquisition under Chapter
VII of the Act for which different procedure is
applicable, as held by the Hon’ble Supreme Court in
Devinder Singh vs. State of Punjab, (2008) 1 SCC728. What cannot be done directly is sought to be done
indirectly. Exercise of power apparently for public
CWP No.5878 of 2003 (O&M) and connected petitions 66purpose of development by State is sought to be used
for extraneous purpose.Xx xx xxx xx xx "26. The power of excluding land fromnotification under section 4 while issuing notification
under section 6 can be exercised, which may not defeat
the declared public purpose. Exercise of power for
issuing licences for earning development charges or
releasing land to builders may not be consistent with
the declared public purpose and doing so may vitiate
the acquisition itself apart from vitiating the release.
The power of licensing of colonizers under the 1975
Act cannot be linked to the power of land acquisition.27. Since it is acknowledged case of the State in
the report of the Chief Secretary and its policies that
grant of licence under the 1975 Act is linked to land
acquisition proceedings, we are, prima-facie, of the
view that exercise of power of acquisition linked to
advancing policies for giving licence under 1975 Act
may be illegal. Since the said power is being exercised
at large scale covering thousands of acres of land, we
have already called upon the State of Haryana to
furnish details in CWP No.1356 of 2004 of all lands
released after initiating acquisition proceedings in last
three years.”CWP No.5878 of 2003 (O&M) and connected petitions 67
19.5 In Amarnath Ashram Trust Society and another v.
Governor of U.P. and others, (1998) 1 SCC 591, it was
observed:-
“10….. Even though Section 48 of the Act confers upon
the State wide discretion it does not permit it to act in
an arbitrary manner….”19.6 In State Govt. Houseless Harijan Employees
Association v. State of Karnataka and others, (2001(1) SCC
610, it was observed that after publication of notification under
section 6, declaration of public purpose was conclusive and the
State could not reopen the matter.
19.7 In Consumer Action Group and another, v. State of
T.N. and others, (2000) 7 SCC 425, while discussing scope of
power of exemption, the Hon’ble Supreme Court observed:-
“16. P. J. Irani v. The State of Madras, (1962) 2 SCR
169 : (AIR 1961 SC 1731) (Constitution Bench). In
this case Section 13 of Madras Buildings (Lease and
Rent Control) Act, 1940 is similar to the provisions we
are considering conferred power of exemption. This
Court held (at p. 1737 of AIR) :“It was not possible for the statute itself to
contemplate every such contingency and make
specific provision therefor in the enactment. It
was for this reason that a power of exemption in
general terms was conferred on the State
Government which, however, could be used not
for the purpose of discriminating between tenant
and tenant, but in order to further the policy and
purpose of the Act which was, in the context of
CWP No.5878 of 2003 (O&M) and connected petitions 68the present case, to prevent unreasonable eviction
of tenants.”17. In Registrar of Co-operative Societies Trivandrum
v. K. Kunhambu, (1980) 2 SCR 260 : (AIR 1980 SC350) this Court was considering Section 60 of the
Madras Co-operative Societies Act 1932, which
empowered the State Government to exempt existing
society from any of the provisions of the Act or to
direct that such provisions shall apply to such society
with specified modifications. This Court held (Paras 3
and 12) :“The Legislature may guide the delegate by
speaking through the express provision
empowering delegation or the other provisions of
the statute, the preamble, the scheme or even the
very subject matter of the statute. If guidance
there is, wherever it may be found, the delegation
is valid . . . . . . . . Section 60 empowers the State
Government to exempt a registered society from
any of the provisions of the Act or to direct that
such provision shall apply to such society with
specified modifications. The power given to the
Government under S. 60 of the Act is to be
exercised so as to advance the policy and objects
of the Act, according to the guidelines as may be
gleaned from the preamble and other provisions
which we have already pointed out, are clear.”
18…..In the fast changing scenario of economic, social
order with scientific development spawns innumerable
situations which Legislature possibly could not foresee,
so delegatee is entrusted with power to meet such
exigencies within the in built check or guidance and in
the present case to be within the declared policy. So
delegatee has to exercise its powers within this
controlled path to subserve the policy and to achieve
the objectives of the Act. A situation may arise, in some
CWP No.5878 of 2003 (O&M) and connected petitions 69cases where strict adherence to any provision of the
statute or rules may result in great hardship, in a given
situation, where exercise of such power of exemption is
to remove this hardship without materially effecting the
policy of the Act, viz., development in the present case
then such exercise of power would be covered under it.
All situation cannot be culled out which has to be
judiciously judged and exercised, to meet any such
great hardship of any individual or institution or
conversely in the interest of society at large. Such
power is meant rarely to be used. So far decisions relied
by the petitioner, where the provisions were held to be
ultra vires, they are not cases in which Court found that
there was any policy laid down under the Act. In A. N.
Parasuraman (AIR 1990 SC 40) (supra) Court held
Section 22 to be ultra vires as the Act did not lay down
any principle or policy. Similarly, in Kunnathat
Thathunni Moopil Nair (AIR 1961 SC 552) (supra)
Section 7 was held to be ultra vires as there was no
principle or policy laid down.”
19.8 Thus, the power of exemption has to be exercised in
exceptional cases and where situation could not be foreseen having
regard to Scheme of the Act.
19.9 In T.N.Housing Board v. Keeravani Ammal and
others, (2007) 9 SCC 255, it was held that once land was acquired,
the same could be returned only on then market value. It was
observed:-
CWP No.5878 of 2003 (O&M) and connected petitions 70
“15.We may also notice that once a piece of land
ahs been duly acquired under the Land
Acquisition Act, the land becomes the property of
the state. The state can dispose of the property
thereafter or convey it to anyone, if the land is not
needed for the purpose for which it was acquired,
only for the market value that may be fetched for
the property as on the date of conveyance. The
doctrine of public trust would disable the state
from giving back the property for anything less
than the market value. In state of Kerala vs.
M.Bhaskaram Pillai, (1997) 5 SCC 432 in a
similar situation, this Court observed:-
“The question emerges whether the
Government can assign the land to the
erstwhile owners? It is settled law that if the
land is acquired for a public purpose, after
the public purpose was achieved, the rest o
the land could be used for any other public
purpose. In case there is no other public
purpose for which the land is needed, then
instead of disposal by way of sale to the
erstwhile owner, the land should be put to
public auction and the amount fetched in the
public auction can be better utilized for the
public purpose envisaged in the Directive
Principles of the Constitution. In the present
case, what we find is that the executive
order is not in consonance with the
provision of the act and is, therefore, invalid.
Under these circumstances, the Division
bench is well justified in declaring the
executive order as invalid. Whatever
assignment is made, should be for a public
purpose. Otherwise, the land of the
Government should be sold only through the
public auctions so that the public also gets
benefited by getting a higher value.”
Power under section 48 is not legislative power
CWP No.5878 of 2003 (O&M) and connected petitions 71
19.10 Scope of power under section 48 is to deal with an
exceptional situation which may be unforeseen. The said provision
does not envisage exercise of any policy making which may
amount to review of exercise of power of acquisition or which may
render acquisition to be for purpose other than public purpose. The
said provision does not envisage creation of a norm not envisaged
under the scheme of the statute. Difference between legislative and
executive power is well known.
19.11 In Union of India and another v. Cynamide India
Limited and another, (1987) 2 SCC 720, para 7, it was
observed:-
“7…… The distinction between the two has
usually been expressed as ‘one between the
general and the particular’. ‘A legislative act is the
creation and promulgation of a general rule of
conduct without reference to particular cases-, an
administrative act is the making and issue of a
specific direction or the application of a general
rule to a particular case in accordance with the
requirements of policy’. ‘Legislation is the process
of formulating a general rule of conduct without
reference to particular cases and usually operating
in future; administration is the process of
performing particular acts, of issuing particular
orders or of making decisions which apply general
rules to particular cases.’ It has also been said
“Rule making is normally directed toward the
CWP No.5878 of 2003 (O&M) and connected petitions 72formulation of requirements having a general
application to all members of a broadly
identifiable class” while, “an adjudication, on the
other hand, applies to specific individuals or
situations”. But, this is only a broad distinction,
not necessarily always true. Administration and
administrative adjudication may also be of general
application and there may be legislation of
particular application only….”
19.12 In Vasu Dev Singh v. Union of India, (2006) 12
SCC 753, it was observed:-
“118. A statute can be amended, partially
repealed or wholly repealed by the legislature
only. The philosophy underlying a statute or the
legislative policy, with the passage of time, may
be altered but therefore only the legislature has
the requisite power and not the executive. The
delegated legislation must be exercised, it is trite,
within the parameters of essential legislative
policy. The question must be considered from
another angle. Delegation of essential legislative
function is impermissible. It is essential for the
legislature to declare its legislative policy which
can be gathered from the express words used in
the statute or by necessary implication, having
regard to the attending circumstances. It is
impermissible for the legislature to abdicate its
essential legislative functions. The legislature
cannot delegate its power to repeal the law or
modify its essential features.”
CWP No.5878 of 2003 (O&M) and connected petitions 73
20. We may now deal with the judgments relied upon by
the learned counsel for the parties to the extent the same have not
been earlier discussed. The judgments relied upon on behalf of the
petitioners mainly deal with the decision on objections under
section 5-A and application of mind by the State before finalizing
notification under section 6. Some of the judgments also deal with
the question of midstream change of purpose before finalizing
acquisition proceedings and question whether acquisition
proceedings can be allowed to continue, when the declared purpose
is neither intended nor possible to be achieved on account of
release of substantial land from acquisition. Since we are in
agreement with these propositions, we do not consider it necessary
to enter into detailed discussion of individual judgment.
21. As regards judgments relied upon by learned counsel
for the State, the same deal with use of land for a purpose other
than purpose for which the same was notified, after the same is
vested in the State or in some cases where change of purpose
becomes necessary on account of unforeseen situation. In the
present case, this question does not arise as question is of change
of purpose before land is vested in the State and in none of the
judgments, it has been laid down that State can make a policy for
releasing land acquired for a declared purpose with the real object
of releasing the land from acquisition for different objectives and
when such objectives neither relate to unforeseen situations nor
CWP No.5878 of 2003 (O&M) and connected petitions 74
advance the notified public purpose. None of the judgments relied
upon on behalf of the State, has, thus, bearing on the issue which
we are dealing with. The judgments are, thus, distinguishable.
22. We now proceed to answer the questions posed for
consideration in para 12 above.
Re: (i)
23. It has not been disputed that almost 90% of the notified
land has been released in favour of persons who applied for licence
under the provisions of the 1975 Act. Stand of the State to justify
the same is that the said release in favour of private builders
advances notified public purpose of ‘development’. Further stand
taken by State is that it has absolute discretion to withdraw from
acquisition under section 48. Thus, public purpose did exist and
continues to exist even after such release. It is further submitted
that the State has liberty to change the public purpose even during
acquisition. It cannot be said that no public purpose survives for
the remaining 10% of notified land. Further, part of land was now
required for Metro Rail Project and multi-level parking. Policy of
the State to so release the land from acquisition was within the
purview of power of State under section 48 and was consistent
with the scheme of the Act. The said policy advances the notified
purpose of development which includes development by private
builders on whom control was exercised by way of licences even if
CWP No.5878 of 2003 (O&M) and connected petitions 75
the title of the said land was not with the State. This stand has
already been noticed in para 9 above.
23.1 We are of the considered view that stand of the State
cannot be upheld. Neither the plea that notified purpose was not
required to be adhered to can be accepted, nor can the plea be
upheld that release to builders who obtained licence without the
title being with the State, amounts to development by State.
Accepting such a plea will be contrary to the concept of public
purpose under the scheme of the Act as discussed above in para 16.
23.2 Under the scheme of the Act, acquisition can be either
for public purpose as defined under section 3(f) or for a company
(Section 4). Procedure in both cases is different and stands on
different footing.(see Devinder Singh v. State of Punjab, (2008)
1 SCC 728, para 16). Section 6(3) makes the declaration of
purpose in the notification to be conclusive, subject to judicial
review. Under Section 5-A, objections can be filed as to existence
of declared public purpose and acquisition can proceed further if
declared purpose is genuine. Jurisdiction to issue notification under
section 6 is available only to acquire land for specified public
purpose. The said purpose must continue to exist unless unforeseen
situation arises. Plea on behalf of the State that purpose can change
anytime even before completion of acquisition and vesting of land
in State, cannot be accepted.
CWP No.5878 of 2003 (O&M) and connected petitions 76
Declaration of public purpose being open to judicial review,
affected party is not debarred from alleging and showing absence
of such purpose. If there is policy not to adhere to declared public
purpose as shown by stand of the State and its actions, the Court
has no option but to hold that public purpose is non-existent. From
admitted facts of the present case, declared public purpose is
established to be non-existent. Action of the State has to be
consistent with declared public purpose. Policy of release in
question allows acting against declared purpose. Submission that
release is also advancement of public purpose has no merit.
Development by State and development by a private party stand on
different footing.
As held in Akadasi Pradhan (supra), where title does not
continue with the State, development by a private party cannot be
treated at par with development by State. Further, power of
acquisition is not available for advancing a purpose other than
‘public purpose’. Concept of public purpose has been discussed at
length in para 16 above. If purpose of acquisition is taken to be
advancement of policy of release, the said purpose is not
permissible public purpose nor is declared to be so in the impugned
notification. The Act being expropriatory legislation has to be
strictly construed. What cannot be done directly cannot be done
indirectly. Further, the Act being on concurrent list subject, field
CWP No.5878 of 2003 (O&M) and connected petitions 77
being occupied by Central law, the State cannot go beyond the
concept of ‘public purpose’ under the Act.
Plea of need for metro/multi-level parking was taken in
affidavit dated 21.10.2004 but even thereafter on 4.5.2005, about 8
acres of land has been released from acquisition, as noted in para 6
above. There is, thus, force in contention of learned counsel for the
petitioners that such a plea is being taken only to negative the plea
of the petitioners.
Question (i) has to be answered in the affirmative against the
State, to the effect that notified purpose of acquisition is non-
existent.
Re: (ii)
24. While dealing question (i) above, we have found that
notified public purpose was non-existent. Contention of learned
counsel for the petitioners that the real purpose was not the notified
one but the one manifested by subsequent action of release of 90%
of land, as already mentioned, cannot be brushed aside. The plea of
the State that the policy of release advances notified public purpose
cannot be upheld. Reference to law laid down in judgments of the
Hon’ble Supreme Court referred to in para 17 shows that if a
public authority does not act within the scope of its power, its
actions are vitiated by the concept of fraud on power or colourable
exercise of power. Discretion conferred by law is not arbitrary or
CWP No.5878 of 2003 (O&M) and connected petitions 78
unguided and authority to whom power is given for a purpose is
accountable for exercise of its power as per such purpose. Since
power of acquisition has not been exercised for public purpose, the
same is vitiated by concept of colourable exercise of power.
Exercise of such power is not only ultravires the Act but is also hit
by Articles 14, 21 and 300-A. Question (ii) is, thus, answered in
the affirmative and against the State.
Re: (iii)
25. As held in Para 18 of judgment of the Hon’ble
Supreme Court in Hindustan Petroleum (supra), decision on
objections under section 5-A at the level of State has to be shown
by an affidavit of a person associated with the decision making at
the State level. In the present case, no such affidavit has been filed
by any of the functionaries who may have dealt with the decision
making at the State level to show application of mind to the
objections under section 5-A preceding notification under section
6. Only Collector has filed affidavit which is hardly relevant to
show application of mind at the level of State Government.
Allegation that there was no consideration to the objection that in
same circumstances, substantial part of notified land was not
acquired, has not been rebutted. Question (iii) has to be answered
against the State.
CWP No.5878 of 2003 (O&M) and connected petitions 79
Re: (iv)
26. We have already observed in para 19 above that power
under Section 48 is executive power and not source of laying down
norms beyond the Scheme of the Act. The power is not unlimited,
uncanalised and unguided. If it was so read, the provision itself
may be rendered unconstitutional. The said power, having regard
to the scheme of the Act, has to be confined to exceptional
situations. Otherwise the same will defeat the object and purpose
of the Act to acquire land strictly for public purpose and not
otherwise.
It is not permissible to use the pretext of public purpose for
any other purpose. State cannot be heard to say that once
acquisition is declared for legitimate public purpose, irrespective of
its further actions, acquisition will be valid. If acquisition is not
permissible for a purpose other than public purpose, Section 48
cannot be source of power to act beyond the Scheme of the Act.
There is no discretion beyond the purpose for which power is
conferred.
In para 19, we have discussed the legal position as to scope
of power under section 48. The State has acted clearly beyond the
scope of Section 48 in making policies and acting thereon. Action
in first initiating acquisition proceedings without public purpose
CWP No.5878 of 2003 (O&M) and connected petitions 80
and thereafter in unauthorisedly withdrawing from acquisition
selectively on an irrelevant ground of grant of licence under the
1975 Act, is not legally permissible. If public purpose of
development by State existed, where is question of a policy of
withdrawal from acquisition which amounts to abandoning the
notified purpose. If there is no public purpose, land should not
have been notified under the Act. Initiating acquisition process and
then abandoning it has its consequences. It enables assumption and
exercise of power not supported by law which is against rule of
law and Constitution. As already observed, it also amounts to
exercise of legislative power repugnant to a Central law on a
subject in concurrent list. Scope of Section 48, like any other
power of exemption, is limited to unforeseen situations. Such
power has to be exercised on objective parameters consistent with
Article 14. There must be genuine assessment of extent of land
needed and existence of purpose of acquisition. State cannot deal
with property of citizen casually and initiate acquisition
proceedings without compelling public necessity and thereafter,
abandon acquisition to the extent of 90% in favour of developers,
even if such developers are original owners. State can have its
policies of development by private persons independent of
proceedings under the Act, if legally permissible. Linking policy
of licences under the 1975 Act to proceedings under the Act is
CWP No.5878 of 2003 (O&M) and connected petitions 81
beyond the power available to the State under the Act. The Court
is not concerned with policy making so long as the executive acts
within the framework of law. If the State exceeds its constitutional
power, this Court, in exercise of power of judicial review, can
annul all illegal acts.
The policy has neither been notified nor contemplates
exercise of power on objective norms. Its exercise depends on its
discretion of granting licence or ‘recommendation’ of officers
without there being declared norms for such recommendation. This
does not meet parameters of Article 14 as already discussed in
paras 17 and 18. Thus, even if the State had competence to lay
down a policy, its validity would have required notified objective
norms. We have already held that the policy is even otherwise
outside the scope of Section 48 and the executive power of the
State.
Objection of learned counsel for the State that in absence of
specific prayer for quashing the policy of release, the Court must
go by the policy, cannot be accepted. The State itself has taken the
defence of policy of release to justify the impugned proceedings.
Such defence cannot be accepted merely because prayer for
quashing policy of release has not been made. Since this legal issue
directly arises from the stand of the State itself, the Court has to
test correctness of such defence which involves validity of policy
in question.
CWP No.5878 of 2003 (O&M) and connected petitions 82
Question (iv) has, thus, to be answered against the State.
27. We may now sum up our conclusions as under:-
a) In view of withdrawal by the State from 90% of
the acquired land without any exceptional or
unforeseen situation or legally permissible objects,
the notified purpose of acquisition did not exist and
can be held to be a pretence.
b) In absence of existence of notified public
purpose, acquisition proceedings are liable to be
quashed being vitiated by colourable exercise of
power.
c) There was no valid consideration of objections,
under Section 5-A. Section 5-A read with section 6
requires consideration of objections about existence
of public purpose and fitness of the land for
acquisition not only by Collector but also by the
State and such consideration must be shown by
filing affidavit by a person associated with the
decision making at the State level, which has not
been done. There is, thus, no valid consideration of
objections, as required by law.
d) Power of withdrawing from acquisition under
section 48 can be exercised only for an unforeseen
or uncontemplated situation and not by a planned
policy which may be in conflict with declared public
purpose or scheme of the Act. Release of land by the
State under its policy is beyond the scope of Section
CWP No.5878 of 2003 (O&M) and connected petitions 83
48. The same can be annulled and appropriate
direction issued to bring out situation existing prior
to illegal actions of the State.
28. Question now is as to what should be the final order.
The guiding principle has to be Ubi jus ibi remedium – Wherever
there is a wrong, there is a remedy. For moulding relief the Court
may have different options. The Court may quash acquisition
proceedings if the same are vitiated by colourable exercise of
power. In doing so, the Court cannot ignore that release becomes
final and the person in whose favour acquisition proceedings are
withdrawn may be immensely benefited on account of wrong
exercise of discretion in his favour. He may retain benefits taken
illegally. This may have to be undone. Fraud vitiates all
proceedings.
29. To prevent illegal benefit being retained, the Court may quash
release or withdrawal from acquisition if the same is held to be
vitiated by fraud. The Court may require the State to recall such
release and also to ascertain whether release was for any
extraneous consideration and how wrongful gain or wrongful loss
can be readjusted. Released land may be restored to the State or
sold in public auction. The State itself may recall its illegal
actions. It may not be possible to lay down any rigid rule as to how
relief can be moulded by Court in an individual fact situation. If
CWP No.5878 of 2003 (O&M) and connected petitions 84
order of release is to be cancelled, it may be necessary to hear the
affected party by the Court or the authority passing the order.
30. As noticed earlier, this Court has taken congnizance in
Pardeep Yadav (supra) of general issue of exercise of power of
acquisition to unauthorisedly advance policy of release in the last
three years. As noted in para 7, as per figures furnished by the
State of Haryana, out of 17000 acres of land notified for
acquisition, award has been made only for 3876 acres i.e. for less
than 25% of acquired land. In many cases referred to in para 7
above, operation and effect of release has been put in issue and
stayed and prima facie view has been expressed that such release
itself is liable to be quashed and land is liable to be restored to the
State to be disposed of by public auction so that loss caused to the
State and unlawful gain made by beneficiaries can be undone.
31. In the present case, parties in whose favour power of
release has been illegally exercised not being before Court, this
aspect is left open to be dealt with in appropriate proceedings.
32. In view of findings recorded above, impugned
acquisition cannot be upheld. Accordingly, these petitions are
allowed and all proceedings in pursuance of notifications dated
13.8.2001 under section 4 and dated 9.8.2002 under section 6 of
the Act, are quashed.
(Adarsh Kumar Goel)
Judge
CWP No.5878 of 2003 (O&M) and connected petitions 85
December 08, 2009 (Gurdev Singh)
'gs' Judge