PETITIONER: PANDIT JHANDU LAL & ORS. Vs. RESPONDENT: THE STATE OF PUNJAB & ORS. DATE OF JUDGMENT: 16/11/1960 BENCH: SINHA, BHUVNESHWAR P.(CJ) BENCH: SINHA, BHUVNESHWAR P.(CJ) KAPUR, J.L. GAJENDRAGADKAR, P.B. SUBBARAO, K. WANCHOO, K.N. CITATION: 1961 AIR 343 1961 SCR (2) 459 CITATOR INFO : R 1962 SC 764 (5) RF 1963 SC 151 (34) R 1965 SC 427 (3) RF 1965 SC 646 (9,11) RF 1966 SC1788 (18) R 1970 SC 984 (6) F 1977 SC 594 (3) C 1980 SC 367 (11) ACT: Land Acquisition--Constitutional validity of enactment- Construction of labour colony for a company, if a Public purpose--Test-Land Acquisition Act, 1894 (1 of 1894), ss. 4, 6, Part VII--Constitution of India, Arts. 31(2), 31(5)(a). HEADNOTE: The Punjab Government issued notification under ss. 4 and 6 of the Land Acquisition Act, 1894, and started proceedings for acquisition of lands for the construction of a labour colony under the Government sponsored Housing Scheme for the workers of the Thapar Industrial Workers' Co-operative Hous- ing Society Ltd. The appellants challenged the acquisition proceedings under Art. 226 of the Constitution on the ground, inter alia, that the procedure prescribed by Part VII of the said Act had not been admittedly complied with. The Division Bench in affirming the order of dismissal passed by the trial judge held that although Art. 31 of the Constitution by prohibiting compulsory acquisition of property except for a public purpose had made Part VII of the Act redundant, the present proceedings were saved since the acquisition was for a public purpose. Held, that the High Court was in error in holding that the Constitution had rendered Part VII of the Land Acquisition Act, 1894, redundant or null and void, although it was right in dismissing the appeal. That Act, as an existing Act, was saved by Art. 31(5)(a) from being affected by Art. 31(2) of the Constitution. Acquisition of building sites for residential houses for industrial labour is for a public purpose even apart from s. 17(2) 460 (b)of the Act as amended by ':the Land Acquisition (Punjab Amendment) Act of 1953. Babu Barkava Thakur v. The State of Bombay [1961] 1 S.C.R. 128, referred to. Although in the case of an acquisition for a company simpliciter, no declaration under s. 6 of the Act can be made without complying with the provisions of Part VII of the Act, it is not correct to say that no acquisition for a company for a public purpose can be made except under Part VII of the Act. If the cost of the acquisition is borne either wholly or partially by the Government, the purpose would be a public purpose within the meaning of the Act. But if the cost is entirely borne by the company it would be an acquisition for the company simpliciter and Part VII would apply. Since in the instant case a part of the compensation was to be borne by the Government, it was not necessary to comply with the provisions of Part VII of the Act. JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4 of 1960.
Appeal by special leave from the Judgment and Order dated
January 28, 1959 of the Punjab High Court in Letters Patent
Appeal No. 52 of 1958 arising out of the Judgment and Order
dated February 17, 1958 of the said High Court in Civil Writ
Application No. 124 of 1957.
C. B. Aggarwala, Daya Swarup Mehra and R. S. Gheba, for
the appellants.
S. M. Sikri, Advocate General for the State of Punjab,
N.S. Bindra and D. Gupta, for respondent No. 1.
C.K. Daphtary, Solicitor General of India and S. N. Andley,
for Respondent No. 2.
C.K. Daphtary, Solicitor General of India and T.M. Sen, for
the Attorney-General for India (Intervener).
1960. November 16. The Judgment of the Court was delivered
by
SINHA, C. J.-This appeal, by special leave granted on May
29, 1959, is directed against the decision of the Letters
Patent Bench (G. D. Khosla, C. J., and Dulat, J.) dated
January 28, 1959, affirming that of the learned single Judge
(Bishan Narain, J.) dated February 17, 1958, whereby he
dismissed the
461
appellants’ Writ Petition under Art. 226 of the
Constitution.
It appears that the appellants are the owners of, what is
said to be, agricultural land, measuring about 86 bighas
odd, in village Munda Majra, Tehsil Jagadhari, in the
district of Ambala. On October 27, 1954, the Additional
District Magistrate of Ambala ordered the land aforesaid to
be requisitioned under the Punjab Requisitioning &
Acquisition of Immoveable Property Act (XI of 1953) for the
construction of houses by members of the Thapar Industries
Co-operative Housing Society Ltd., Yamuna Nagar. Possession
of the land was taken on November 5, 1954. The appellants,
at once, instituted a suit on November 14, 1954, in the
Court of the Subordinate Judge, Jagadhari, challenging the
requisition proceedings. The suit was ultimately decreed by
the Court on June 21, 1955, and the possession of the
property in question was restored to the petitioners. On
May 27, 1955, the first respondent, i. e., the State of
Punjab, through the Secretary, Labour Department, issued a
notification under s. 4 of the Land Acquisition Act (1 of
1894) (which hereinafter will be referred to as the Act).
The notification, under s. 4 is in these terms.
“No. 4850-S-LP-55/14144. Whereas it appears to the Governor
of Punjab that land in the locality hereunder specified is
likely to be needed by the Government for a public purpose,
namely, for the construction of a Labour Colony under the
Government sponsored Housing Scheme for the Industrial
Workers of the Thapar Industrial Workers’ Co-operative
Housing Society Limited, Jamna Nagar (District Ambala), it
is hereby notified that the land described in the specifi-
cations below is likely to be required for the above
purpose.
This notification is made under the provisions of Section 4
read with section 17 of the Land Acquisition Act, 1894, as
amended by the Land Acquisition (Punjab Amendment) Act,
1953, to all to whom it may concern and the Collector shall
cause public notice of the substance of this notification to
be given at convenient places in the said locality;
462
In exercise of the powers conferred by the aforesaid
sections, the Governor of the Punjab is pleased to authorise
the President of the above said Society with the members and
servants to enter upon and survey any land in the locality
and do all other acts required or permitted by that section.
Further in exercise of the powers conferred by sub-section
(4) of Section 17 of the said Act the Governor of Punjab is
pleased to direct that, on the grounds of urgency, the
provisions of Section 5(a) of the said Act, shall not apply
in regard to this Acquisition”.
Later, the same day, another notification, under s. 6 of the
Act, was issued. This notification, under s. 6, states that
it appeared to the Governor of Punjab that the land is
required to be taken by Government for a public purpose,
namely, for the construction of a Labour Colony under the
Government sponsored Housing Scheme for the’ Industrial
Workers of the Thapar Industrial Workers’ Co-operative
Housing Society Limited (which is the second respondent in
this case). It also says that under the provisions of s. 7
of the Act, the Collector, Ambala, is directed to take order
for the acquisition of the land. The Patwari effected
delivery of possession of the lands in question to the
second respondent on August 21, 1955. Even before the
delivery of possession had been effected, the appellants
promptly instituted their suit on August 20, 1955, in the
Court of the Subordinate Judge Class 1, Jagadhari, for a
perpetual injunction restraining the second respondent from
entering upon or taking possession of the land in question,
or making any construction thereon. The trial Court
dismissed the suit on June 25, 1956, on the preliminary
ground that the suit was not competent in the absence of a
previous notice under s. 59 of the Punjab Co-operative
Societies Act, 1955 (XIV of 1955). The appellants appealed
to the Senior Sub-Judge, Ambala, who dismissed their appeal,
upholding the decision of the trial Court that the notice
was a condition precedent to the institution of the suit.
Their second appeal was dismissed by the Punjab High Court
on February 6,1957. During the pendency of the civil
litigation aforesaid, in spite of the fact that the second
respondent had
463
obtained delivery of possession through Government agency,
by an Order of Injunction issued by the Court, construction
had been stayed. As soon as the High Court decided the suit
in favour of the respondents, the second respondent “started
making huge constructions on the land in dispute in a very
speedy manner”, as alleged by the appellants in their
petition under Art. 226 of the Constitution, which they
filed on February 13, 1957. From the High Court also, they
obtained similar Stay Orders whereby building operations
were stopped. In their Writ Petition, the appellants, as
petitioners in the High Court, challenged the acquisition
proceedings on a number of grounds, of which it is only
necessary to notice the one which has formed the subject
matter of decision in the High Court, namely, that the
proceedings were void for want of compliance with the
procedure laid down in Chapter VII (mistake for Part VII) of
the Act. It is not necessary to refer to the other
contentions raised in the Writ Petition, because it is
common ground before us that the whole controversy must be
determined by the answer to the question, ‘whether or not
the proceedings were vitiated by reason of the admitted fact
that no proceedings under Part VII of the Act had been taken
in making the acquisition’.
The matter was heard, in the first instance, by Bishan
Narain, J. The learned Judge dismissed the petition, holding
that the acquisition was by the Government for a public
purpose, namely, of construction of tenements for industrial
workers, under a schempeal
against the order to the Collector of the district or such
other officer as may, by notification, be authorised in
this behalf by the State Government.
629
Section 6 imposes a restriction on the transport of
agricultural cattle for slaughter and reads:
“S. 6. No person shall transport or offer for trans
port or cause to be transported any agricultural cattle
from any place within the State to any place outside
the State, for the purpose of its slaughter in contra.
vention of the provisions of this Act or with the
knowledge that it will be or is likely to be, so slaugh-
tered.”
Section 7 prohibits the sale, purchase or disposal
otherwise of certain kinds of animals. It reads-.
“S. 7. No person shall purchase, sell or otherwise
dispose of or offer to purchase, sell or otherwise dis-
pose of or cause to be purchased, sold or otherwise
disposed of cows, calves of cows or calves of she-
buffaloes for slaughter or knowing or having reason
to believe that such cattle shall be slaughtered.”
Section 8 relates to possession of flesh of agricultu-
ral cattle and is in these terms:
“S. 8. Notwithstanding anything contained in
any other law for the time being in force, no person
shall have in his possession flesh of any agricultural
cattle slaughtered in contravention of the provisions
of this Act.”
Section 10 imposes apenalty for a contravention of
s. 4(l)(a) and s. 11 imposes penalty for a contraven-
tion of any of the other provisions of the Act.
On behalf of the petitioners it has been pointed out,
and rightly in our opinion, that cl. (a) of sub-s. (2) of
s. 4 of the Act imposes an unreasonable restriction on
the right of the petitioners. That clause in its first
part lays down that the cattle (other than cows and
calves) must be over 20 years of age and must also be
unfit for work or breeding; and in the second part it
says, “or has become permanently incapacitated from
work or breeding due to age, injury, deformity or an
incurable disease.” It is a little difficult to understand
why the two parts are juxtaposed in the section. In
any view the restriction that the animal must be over
20 years of age and also unfit for work or breeding is
an excessive or unreasonable restriction as we have
80
630
pointed out with regard to a similar provision in the
Uttar Pradesh Act. The second part of the clause
would not be open to any objection, if it stood by it-
self. If, however, it has to be combined with the age-
limit mentioned in the first part of the clause, it will
again be open to the same objection; if the animal is
to be over 20 years of age and also permanently in-
capacitated from work or breeding etc.,then the age-
limit is really meaningless. Then, the expression ‘due
to age’ in the second part of the clause also loses its
meaning. It seems to us that cl. (a) of sub-s. (2) of s. 4
of the Act as drafted is bad because it imposes a dis-
proportionate restriction on the slaughter of bulls,
bullocks and buffaloes it is a restriction excessive in
nature and not in the interests of the general public.
The test laid down is not merely permanent incapa-
city or unfitness for work or breeding but the test is
something more than that, a combination of age and
unfitness’ Learned Counsel for the petitioners has plac-
ed before us an observation contained in a reply made
by the Deputy Minister in the course of the debate
on the Bill in the Madhya Pradesh Assembly (see
Madhya Pradesh Assembly Proceedings, Vol. 5 Serial
no. 34 dated April 14, 1959, page 3201). He said that
the age fixed was very much higher than the one to
which any animal survived. This observation has
been placed before us not with a view to an interpre-
tation of the section, but to show what opinion was
held by the Deputy Minister as to the proper age-
limit. On behalf of the respondent State our atten-
tion has been drawn to a book called The Miracle of
Life (Home Library Club) in which there is a state-
ment that oxen, given good conditions, live about 40
years. Our attention has also been drawn to certain
extracts from a Hindi book called Godhan by Girish
Chandra Chakravarti in which there are statements
to the effect that cows and bullocks may live up to 20
or 25 years. This is an aspect of the case with which
we have already dealt. The question before us is not
the maximum age upto which bulls, bullocks and
buffaloes may live in rare cases. The question before
us is what is their average longevity and at what age
631
they become useless. On this question we think that
the opinion is almost unanimous, and the opinion
which the Deputy Minister expressed was not wrong.
Section 5 in so far as it imposes a restriction as to
the time for slaughter is again open to the same ob-
jection as has been discussed by us with regard to a
similar provision in the Uttar Pradesh Act. A right
of appeal is given to any person aggrieved by the
order. In other words, a member of the public, if
he feels aggrieved by the order granting a certificate
for slaughter, may prefer an appeal and hold up for
a long time the slaughter of the animal. We have
pointed out that for all practical purposes such a
restriction will really put an end to the trade of the
petitioners and we are unable to accept a restriction
of this kind as a reasonable restriction within the
meaning of cl. (6) of Art. 19 of the Constitution.
Section 6 standing by itself, we think, is not open
to any serious objection. It is ancillary in nature
and tries to give effect to the provision of the Act
prohibiting slaughter of cattle in contravention of the
Act.
Section 7 relates to the prohibition of sale, purchase
etc., of cows and calves and inasmuch as a total ban
on the slaughter of cows and calves is valid, no ob-
jection can be taken to s. 7 of the Act. It merely
seeks to effectuate the total ban on the slaughter of
cows and calves (both of cows and she-buffaloes). Sec-
tion 8 is also ancillary in character and if the other
provisions are valid no objection can be taken to the
provisions of s. 8. Sections 10 and 11 impose penal-
e subsidised by the Government out of
public funds; that Part VII of the Act had no application to
the present proceedings, and that, therefore, the noti-
fication under s. 6 was not invalid. The appellants
preferred an appeal, under the Letters Patent. The Letters
Patent Bench dismissed the appeal, but for different
reasons. After an examination of the precedents of the
different High Courts, bearing on the controversy in this
case, the Bench came to the conclusion, which may better be
expressed in its own words:-
“There is thus considerable authority for the
464
view advanced by the learned counsel for the appellants that
compliance with the provisions of Part VII is obligatory in
the case of all acquisitions for a company. In the present
case the acquisition was undoubtedly for the benefit of a
company. I have given this matter my most anxious
consideration, and, with great respect to the learned
Judges, whose decisions have been noted above, I find myself
unable to subscribe to the views expressed by them. It
seems to me that their views were coloured by the background
of the provisions of the Constitution. Article 31 of the
Constitution prohibits compulsory acquisition of property
for anything except a public purpose. Therefore,
acquisition for anything which is not a public purpose
cannot now be done compulsorily, but it has never been
disputed that before the Constitution came into force land
could have been acquired compulsorily by Government for a
purpose which was not public. There is nothing in the Land
Acquisition Act to warrant the assumption that the embargo
placed by Article 31 of the Constitution found place in the
Act. It seems to me that the Land Acquisition Act contem-
plates two categories of acquisitions”.
After an examination of the provisions of the Act, the High
Court observed that the Land Acquisition Act came into force
when there was no bar to compulsory acquisition for private
purposes. Such a bar was only imposed, for the first time,
by Art. 31 of the Constitution. After the Constitution came
into force, Part VII of the Act became redundant or null and
void. But, in its view, the present acquisition proceedings
were saved from all attack based on non-compliance with the
provisions of Part VII of the Act. The reason for this
conclusion, according to the High Court, was that as the
land was acquired for a public purpose, there was no need to
comply with the provisions of Part VII, even though the
Company is to bear all the expenses for the acquisition.
It is manifest that the main point for determination in this
appeal is: Whether or not the acquisition proceedings had
been vitiated by reason of the admitted fact that there was
no attempt made by the
465
Government to comply with the requirements of Part VII of
the Act. It is equally clear that the Letters Patent Bench
of the High Court was misled in its conclusions, because all
the provisions of Art. 31 of the Constitution had not been
brought to their notice. It is not correct to say that Part
VII of the Act had become redundant or null and void, as
suggested by the High Court, because that Part provided for
acquisition for a private purpose. As held by this Court in
a recent decision, in the case of Babu Barkaya Thakur v. The
State of Bombay (1), the Act deals with two kinds of
acquisitions: (1) for a public purpose, at the cost of the
Government, and (2) for a purpose akin to such a purpose, at
the cost of a Company, and to the latter class of
acquisition, the provisions of Part VII are attracted. It
was further held in that case that acquisition of a site for
building residential houses for industrial labour was a
public purpose, and that the Land Acquisition Act was immune
from attack based on the provisions of Art. 31(2) of the
Constitution, in view of the provisions of cl. 5(a) of that
Article, which saved an existing law of the nature of the
Act in question. As will presently appear, the conclusion
of the High Court is entirely correct, but the process of
reasoning by which it has reached that conclusion is
erroneous. That process suffers from the initial error
arising from the fact that the provisions of Art. 31(5) of
the Constitution had not been brought to the notice of that
Bench. If the Bench were cognizant of the true legal
position that the Land Acquisition Act, in its entirety,
including Part VII dealing with the acquisition of Land for
Companies, was not subject to any attack under Art. 31(2) of
the Constitution, it would not have based that conclusion on
that ratio. Otherwise, there would be no answer to the
contention in which the appellants had persisted throughout
the long course of litigation in which they have indulged in
their vain effort to save the land from being used for the
public purpose aforesaid. The Letters Patent Bench has also
fallen
(1) [1961] 1 S.C.R. 128.
59
466
into another error in assuming that “the compensation was
paid in its entirety by the Company”. It is better to clear
the ground by showing that this assumption is not well-
founded in fact.
In their Writ Petition, as originally filed in the High
Court, it was not categorically stated by the appellants
that the compensation in respect of the land in question was
paid, or was to be paid, by the Company. It may be stated
here, by the way, that it is common ground that the second
respondent is a Company within the meaning of the Act, being
a registered society under the Co-operative Societies Act.
It is also common ground that the purpose for which the land
was being acquired was for erecting residential quarters for
industrial labour, which had organised itself into the Co-
operative Housing Society, the second respondent. It was
only at a later stage of the proceedings in the High Court,
that is to say, in the replication filed on behalf of the
appellants to the Written Statement filed by the Government,
in answer to the appellant’s Writ Petition, that, for the
first time, it was alleged by the appellants that “the
entire amount of compensation has been borne by the res-
pondent society”. This allegation has not been either
supported or countered by evidence on either side. But it
has been pointed out by the learned single Judge that it was
clear from the Government Housing Scheme that a substantial
amount to be expended on this Scheme comes out of the
Revenues, in the form of subsidies and loans. It was stated
at the Bar, with reference to the terms and conditions of
the Government Housing Scheme, that 25% to 50% of the cost
of land and structures to be built upon the land was to be
advanced by Government out of public funds, in the shape of
subsidy and loan. It would, thus, appear that the High
Court was not right in the assumption made as aforesaid.
It is clear from the statement of facts on record that the
respondent No. 2 is a ‘Company’, within the meaning of the
Act; that the land is acquired for the. benefit of the
Company, and at its instance, and that a large proportion of
the compensation money was to
467
come out of public funds, the other portion being supplied
by the Company or its members. There is also no doubt that
the structures to be made on the land would benefit the
members of the Co-operative Society. But, the private
benefit of a large number of industrial workers becomes
public benefit within the meaning of the Land Acquisition
Act. In this connection, it may be mentioned that s. 17 of
the Act was amended by the Land Acquisition (Punjab
Amendment) Act (11 of 1954) in these terms-
“17(2)(b). Whenever in the opinion of the Collector it
becomes necessary to acquire the immediate possession of any
land for the purpose of any library or educational
institution or for the construction, ex. tension or
improvement of any building or other structure in any
village for the common use of the inhabitants of such
village, or any godown for any society registered under the
Co-operative Societies Act, 1912 (II of 1912), or any
dwelling-house for the poor, or the construction of labour
colonies under a Government-sponsored Housing Scheme, or any
irrigation tank, irrigation or drainage channel, or any
well, or any public road,
the Collector may, immediately after the publication of the
notice mentioned in sub-section (1), and with the previous
sanction of the appropriate Government enter upon and take
possession of such land, which shall thereupon vest
absolutely in the Government free from all encumbrances”.
It will appear from the (amended) s. 17(2)(b), quoted above,
that the construction of labour colonies, under a
Government-sponsored Housing Scheme, has been included in
the category of ‘works of public utility’. As already
indicated, even apart from the indication given by the
(amended) section 17, quoted above, this Court has held, in
the recent decision (1) that building of residential
quarters for industrial labour is public purpose. Hence,
even apart from the amended provisions of s. 17, it is clear
on the authorities that the purpose for which the land was
being acquired was a public purpose.
(1) [1961] 1 S.C.R. 128.
468
Having cleared the ground, it now remains to consider the
terms of s. 6, on which great reliance was placed on behalf
of the appellants. There is no doubt that, as pointed out
in the recent decision of this Court (1), the Act
contemplates acquisition for a public purpose and for a
Company, thus conveying the idea that acquisition for a
Company is not for a public purpose. It has been held by
this Court, in that decision, that the purposes of public
utility, referred to in ss. 40-41 of the Act, are akin to
public purpose. Hence, acquisition for a public purpose as
also acquisitions for a Company are governed by
considerations of public utility. But the procedure for the
two kinds of acquisitions is different, in so far as Part
VII has made substantive provisions for acquisitions of land
for Companies. Where acquisition is made for a public
purpose, the cost of acquisition for payment of compensation
has to be paid wholly or partly out of Public Revenues, or
some fund controlled or managed by a local authority. On
the other hand, in the case of an acquisition for a Company,
the compensation has to be paid by the Company. But, in
such a case, there has to be an agreement, under s. 41, for
the transfer of the land acquired by the Government to the
Company on payment of the cost of acquisition, as also other
matters not material to our present purpose. The agreement
contemplated by s. 41 is to be entered into between the
Company and the Appropriate Government only after the latter
is satisfied about the purpose of the proposed acquisition,
and subject to the condition precedent that the previous
consent of the Appropriate Government has been given to the
acquisition. The ` previous consent’ itself of the
Appropriate Government is made to depend upon the
satisfaction of that Government that the purpose of the
acquisition was as laid down in s. 40. It is, thus, clear
that the provisions of ss. 39-41 lay down conditions
precedent to the application of the machinery of the Land
Acquisition Act, if the acquisition is meant for a Company.
Now, s. 6 itself contains the prohibition to the making of
the necessary declaration under that section in these terms-
(1) (1961] 1 S.C.R. 128.
469
“Provided that no such declaration shall be made unless the
compensation to be awarded for such property is to be paid
by a Company, or wholly or partly out of public revenues or
some fund controlled or managed by a local authority”.
Section 6 is, in terms, made subject to the provisions of
Part VII of the Act. The provisions of Part VII, read with
s. 6 of the Act, lead to this result that the declaration
for the acquisition for a Company shall not be made unless
the compensation to be awarded for the property is to be
paid by a company. The declaration for the acquisition for
a public purpose, similarly, cannot be made unless the
compensation, wholly or partly, is to be paid out of public
funds. Therefore, in the case of an acquisition for a
Company simpliciter, the declaration cannot be made without
satisfying the requirements of Part VII. But, that does not
necessarily mean that an acquisition for a Company for a
public purpose cannot be made otherwise than under the
provisions of Part VII, if the cost or a portion of the cost
of the acquisition is to come out of public funds. In other
words, the essential condition for acquisition for a public
purpose is that the cost of the acquisition should be borne,
wholly or in part, out of public funds. Hence, an
acquisition for a Company may also be made for a public
purpose, within the meaning of the Act, if a part or the
whole of the cost of acquisition is met by public funds.
If, on the other hand, the acquisition for a Company is to
be made at the cost entirely of the Company itself, such an
acquisition comes under the provisions of Part VII. As in
the present instance, it appears that part at any rate of
the compensation to be awarded for the acquisition is to
come eventually from out of public revenues, it must be held
that the acquisition is not for a Company simpliciter. It
was not, therefore, necessary to go through the procedure
prescribed by Part VII. We, therefore, agree with the
conclusion of the High Court, though not for the same
reasons.
The appeal, accordingly, is dismissed with costs.
Appeal dismissed.
470