{"id":229747,"date":"1997-12-03T00:00:00","date_gmt":"1997-12-02T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/amarnath-ashram-trust-society-and-vs-the-governor-of-uttar-pradesh-ors-on-3-december-1997"},"modified":"2016-05-16T02:29:20","modified_gmt":"2016-05-15T20:59:20","slug":"amarnath-ashram-trust-society-and-vs-the-governor-of-uttar-pradesh-ors-on-3-december-1997","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/amarnath-ashram-trust-society-and-vs-the-governor-of-uttar-pradesh-ors-on-3-december-1997","title":{"rendered":"Amarnath Ashram Trust Society And … vs The Governor Of Uttar Pradesh & Ors on 3 December, 1997"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Amarnath Ashram Trust Society And … vs The Governor Of Uttar Pradesh & Ors on 3 December, 1997<\/div>\n
Author: Nanavati<\/div>\n
Bench: G.T. Nanavati, G.B. Pattanaik<\/div>\n
           PETITIONER:\nAMARNATH ASHRAM TRUST SOCIETY AND ANR.\n\n\tVs.\n\nRESPONDENT:\nTHE GOVERNOR OF UTTAR PRADESH & ORS.\n\nDATE OF JUDGMENT:\t03\/12\/1997\n\nBENCH:\nG.T. NANAVATI, G.B. PATTANAIK\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
\t       THE 3RD DAY OF DECEMBER, 1997
\nPresent:\n<\/p>\n
\t     Hon’ble Mr. Justice G.T. Nanavati
\n\t     Hon’ble Mr. Justice G.B.Pattanaik
\nR.F. Rohtagi,  Sr.Adv., R.B.Misra  and E.C.  Agarwala, Advs.
\nwith him for the Respondents.\n<\/p>\n
\t\t      J U D G M E N T
\n     The following Judgment of the court was delivered:\n<\/p>\n
\t\t\t    WITH
\n\t      WRIT PETITION @ NO. 716 OF 1996
\nNANAVATI, J.\n<\/p>\n
     Leave granted.\n<\/p>\n
     Heard learned counsel for both the sides.\n<\/p>\n
     The appellant is a society registered under the Society
\nRegistration Act,  1860.   It is  running a public school at
\nMathura in  the name  if Amar Nath Vidya Ashram.  The school
\nis  duly  recognised  by  the  Central\tBoard  of  Secondary
\nEducation, New\tDelhi.\tIt is challenging in this appeal the
\njudgment and  order passed  by the High Court in Civil Misc.
\nWrit Petition No. 16241 of 1992.\n<\/p>\n
     The  appellant   wants  land  adjacent  to\t its  school
\nbuilding for  the purpose  of a playground for its students.
\nThe land belongs to respondent No.5 So it tried to obtain it
\nfrom respondent\t No.5 by  offering a  price higher  than its
\nmarket value  but did not succeed.  it, therefore, moved the
\nState  Government   to\tacquire\t that  land  for  it.\t The
\nGovernment agreed and issued Notification under section 4 of
\nthe Land Acquisition Act on 1.8.1986 notifying its intention
\nto acquire that land for a public purpose namely “playground
\nof students  of Amar  Nath  Vidya  Ashram  (Public  School),
\nMathura”.  Thereafter, inquiries under section 5-A and under
\nRule 4\tof the\tLand Acquisition  (Company) Rules, 1963 were
\nmade.\tThe Government\talso entered  into an agreement with
\nthe appellant  as required  by section\t40(1) of  the Act on
\n11.8.1987.   it then  issued a\tDeclaration under section on
\n4.9.1987 mentioning fact that the report made under sub-rule
\n(4) of\tRule 4 of the Land Acquisition (Company) Rules, 1964
\nwas considered\tby the\tGovernment that the Land Acquisition
\nCommittee constituted  under Rule  3 of\t the said  Rules was
\nconsulted, that\t the agreement entered between the appellant
\nand the\t Governor was  duly published  that the Governor was
\nduly published that the Governor was satisfied that the land
\nmentioned in  the schedule  is needed  for construction of a
\nplayground for\tstudents of  Amar Nath\tVidya Ashram (Public
\nSchool), Mathura  by the  Amar Nath  Ashram Trust,  Mathura.
\nThis acquisition  of land  was challenged by the  owner by a
\nwrit petition filed in the Allahabad High Court.  An interim
\norder was  passed directing  the parties  to maintain status
\nquo as\tregards possession.  During the pendency of the said
\npetition, on  1.5.1992, the  Government denotified  the land
\nfrom acquisition  in exercise  of its power under section 48
\nof the\tLand Acquisition Act.  The appellant challenged that
\nNotification by\t filing a  writ petition  in the High Court.
\nThe petition filed by the appellant and the one filed by the
\nowner were  heard together.  The petition filed by the owner
\nwas dismissed  as infructuous  and the petition filed by the
\nappellant was  dismissed on  the ground that the decision of
\nthe Sate Government to withdraw from the acquisition for the
\nreason that  the acquisition  having been  proclaimed as one
\nfor a  public purpose  a par  of  cost\tof  acquisition\t was
\nrequired to  be borne  by the state and as no such provision
\nwas made,  it was  not likely to be sustained if challenged,
\ncannot be said to be contrary or illegal.\n<\/p>\n
     Mr. R.F.  Nariman, senior\tadvocate, appearing  for the
\nappellants, submitted  that when  acquisition is  under part
\nVII, i.e,  when loan  is acquired for a company and when all
\nthe formalities\t have been  completed including execution of
\nan agreement  fro payment  of cost  of the  acquisition\t and
\nSection 6 notification has also been issued, it sis not open
\nto the\tGovernment to withdraw from such acquisition without
\nthe consent  of the  company for  which the  land  has\tbeen
\nacquired.   He\tsubmitted  that\t the  power  vested  in\t the
\nGovernment to  withdraw from acquisition is not absolute and
\nis  fettered  by  implicit  restrictions  and  hence  it  is
\njusticiable. He\t further submitted  that in  this  case\t the
\nState Government  decided to  withdraw from  the acquisition
\nunder a\t misconception of law that as the acquisition at the
\nstage of  section 4  notification was proclaimed to be for a
\npublic purpose,\t at least  a part of the cost of acquisition
\nwas required  to be borne by the State or was required to be
\npaid out  of  the  public  funds  or  public  revenue;\tand,
\ntherefore, the\tdecision taken\tby it was vitiated and ought
\nto have\t been quashed by the High Court.  On the other hand,
\nthe learned counsel appearing for the State of Uttar Pradesh
\nsubmitted that\tthe State is under no obligation to give any
\nreason for  withdrawing from  the acquisition and when it is
\nshown that  the power was exercised bona fide it is not open
\nto the Court to invalidate such an action even if the reason
\ngiven by  the State  is found to be erroneous.\the submitted
\nthat section  48 contains  no words of limitation as regards
\nthe exercise  of power\tand the only limitation put upon the
\npower of  the State  Government is  that it  can excise that
\npower till  possession of  the land sought to be acquired is
\ntaken and  not thereafter.   he\t also submitted that if as a
\nresult of withdrawal from acquisition any damage is suffered
\nby any party then be can be paid damages for the loss caused
\nto him,\t and that  there is one more reason why the decision
\nof  Government\t to  withdraw  from  acquisition  cannot  be
\ninterfered with by the court of law.\n<\/p>\n
     It\t is  now  well\testablished  that  if  the  cost  of
\nacquisition  is\t  borne\t either\t wholly\t or  partly  by\t the
\nGovernment, the\t acquisition can  be said to be for a public
\npurpose within\tthe meaning  of the Act.  But if the cost is
\nentirely borne\tby the company then it is an acquisition for
\na company  under part VII pf the Act. It was so held by this
\nCourt in  Pandit Jhandu\t Lal vs.   The State of Punjab<\/a> (1961
\n(2) SCR\t 459).\tThis decision was relied upon by the learned
\ncounsel for  the State\tto support his contentions but it is
\ndifficult to  appreciate how it supports him.  it is held in
\nthat case it is not correct to say that no acquisition for a
\ncompany for   a public purpose can be made except under part
\nVII of\tthe Act.   In that case a part of the cost was to be
\nborne by  the Government and, therefore, it was held that it
\nwas not\t necessary to comply with the provisions of part VII
\nof the Act.  Admittedly, in the present case the entire cost
\nof acquisition\tis to be borne by the appellant society and,
\ntherefore, it is an acquisitions for a company and not for a
\npublic purpose.\t  That\tis also born out by the notification
\nissued under  section 6\t of the\t Act which  stated “that the
\nland mentioned\tin the\tschedule below\tis  needed  for\t the
\nconstruction of\t play-ground for students of Amar Nath Vidya
\nAshram (public\tschool), Mathura  in district Mathura by the
\nAmar Nath  Ashram Trust, Mathura”  Therefore, simply because
\nin the notification issued under section 4 of the Act it was
\nstated that  the land  was  needed  for\t a  public  purpose,
\nnamely, for  a play-ground  for students  of Amar Nath Vidya
\nAshram (public\tschool), Mathura, it cannot be said that the
\nacquisition is\tfor a  public purpose  and not under Chapter
\nVII for\t the appellant-society\tin view of subsequent events
\nand the\t declaration made  under Section  6.\tThe  learned
\ncounsel for  the State also relied upon the decision of this
\nCourt in  Srinivasa Cooperative\t House Building Society Ltd.
\nVs. Madam Gurumurthy Sastry (1994 (4) SCC 675), wherein this
\ncourt has held that though there is “no provision in the Act
\nto say\tthat when  a land  is required for a company, it may
\nalso be for a public purpose.  However, the even acquisition
\nfor a company, unless utilisation of the land so acquisition
\nfor a company, unless utilisation of the land so acquired is
\nintegrally  connected\twith  public   use,  resort  to\t the
\ncompulsory acquisition under Chapter VII cannot be had”.  it
\nwas submitted  on the basis of this observation that even in
\ncase of\t an acquisition\t for a\tcompany an element of public
\npurpose has  to be  there and  if for  that  reason  it\t was
\nbelieved by  the Government  that it was necessary for it to
\nmake substantial  contribution from  public revenue so as to
\navoid the  charge  of  colorable  exercise  of\tpowers,\t the
\ndecision of  the Government to withdraw from the acquisition
\ncannot be  said to  be arbitrary  or illegal.  The aforesaid
\nobservation was\t made  by  this\t Court\tin  the\t context  of
\nrequirement of\tSection 40  of the  Act and  they cannot  be
\nconstrued to  mean that\t no land  cannot be  acquired by the
\nState Government  without  making  substantial\tcontribution
\ntowards the  cost of  acquisition.  We cannot read something
\nmore in the said observation than what they were intended to
\nconvey.\t  The provisions  of part  VII and  particularly the
\nprovisions regarding  payment of  the  entire  costs  f\t the
\nacquisition would otherwise become redundant.\n<\/p>\n
     As the  acquisition in this case was for the appellant-
\nsociety which is running a school, it was an acquisition for
\na company  and as disclosed by the agreement the entire cost
\nof the acquisition was to be borne by the appellant-society.
\nThe declaration made under section 6 clearly referred to the
\ninquiry\t made\tunder  rule   4\t of   the  Land\t Acquisition
\n(Companies) Rules,  1963  and  the  agreement  entered\tinto
\nbetween the  appellant-society and  the state.\tMoreover, it
\nwas not\t pleaded by the State before the High Court that the
\nacquisition in\tthis case  was for  a public purpose and not
\nunder Chapter  VII of  the Act.\t Therefore, it is really not
\nopen to\t the counsel  for the  State to\t raise a  contention
\nwhich is  contrary to  the case,  pleaded  before  the\tHigh
\nCourt, it  was stated  on  behalf  of  the  State  that\t the
\nacquisition was\t for a registered society and as such it was
\ncovered within\tthe meaning of Company as defined by section
\n3(E)(ii) of the Land Acquisition Act and that the purpose of
\nacquisition was\t covered under\tsection 40(I)(b)  of the Act
\nbecause acquisition  for play-ground of students of a school
\nis a purpose which is likely to prove useful to the public.\n<\/p>\n
     On the  question of  giving reasons the learned counsel
\nof the\tState heavily relied upon the decision of this Court
\nin Special  Land Acquisition  Officer, Bombay vs. Godrej and
\nBoyce<\/a> (1988  (1) SCR 590).  In that case this Court examined
\nthe nature  and extent\tof the\tpower of  the Government  to
\nwithdraw from  acquisition after  issuance  of\tnotification
\nunder section  4  of  the  Act.\t   In  that  case  the\tSate
\nGovernment had passed an       order under section 48 of the
\nact  withdrawing   the\tlands\tof  Godrej  and\t Boyce\tfrom
\nacquisition.\t The  owner  the  thereupon  challenged\t the
\nwithdrawal order as mala fide and prayed for quashing of the
\nsame.\tThe writ  petition was\tallowed by a single Judge of
\nthe High  Court and  his decision was affirmed by a Division
\nBench.\tIn an appeal filed by the state this Court held that
\nunder the  scheme of  the Act neither the notification under
\nsection 4  not the  declaration under  section\t6,  not\t the
\nnotice under  section 9 is sufficient to divest the original
\nowner of,  or other  person interested\tin, the\t land of his
\nrights therein.\t Section 16 makes it clear beyond doubt that
\nthe title  of the  land vests  in the  Government only\twhen
\npossession is taken by the Government and till that point of
\ntime, the  land continues  to be with the original owner and
\nhe is  also free to deal with the land just as he likes.  So
\nlong as the possession is not taken over, the mere fact of a
\nnotification issued  under section  4 or a declaration under
\nsection 6,  does not  divest the  owner of his rights in the
\nland just  as he  likes.   So long  as the possession is not
\ntaken over,  the mere  fact of\ta notification\tissued under
\nsection 4  or a declaration under section 6, does not divest
\nthe owner  of his rights in the land to take care of its and
\nconger on  the State  Government  any  right  whatsoever  to
\ninterfere with\tthe ownership  of the  land or safeguard the
\ninterests of  the owner.  Section 48  gives liberty  to\t the
\nState Government  to withdraw  from the\t acquisition at\t any
\nstage before  the possession of the land is taken by it.  By
\nsuch withdrawal,  no irreparable  prejudice is caused to the
\nowner of  the land and, if at all the owner has suffered any
\ndamage in  consequence of  the\tacquisition  proceedings  or
\nincurred costs\tin relation  thereto, he will be compensated
\ntherefore under\t section 48(2)\tof  the\t Act.\t This  Court
\nfurther observed that the State can be permitted to exercise
\nits power to withdraw unilaterally. It further observed that
\nhaving regard  to the  scheme of  the Act it is difficult to
\nsee why\t the state  Government should at all be compelled to
\ngive any cogent\t reasons for  its decision  not to  go ahead
\nwith the acquisition of any land.  it is well settled in the
\nfield of  specific performance\tof contracts  that no person
\nwill be compelled to acquire any land, as breach of contract
\ncan always  be compensated for by damages.  That is also the
\nprinciple of  section 48(2)  of the  Act.   In that case the
\nCourt found  that the  withdrawal  was\tbona  fide  and\t was
\njustified in  view of  the facts  and circumstances  of\t the
\ncase.\tThat was a case where the decision of the Government
\nto withdraw  from acquisition was challenged by the owner of
\nthe land on the ground that the withdrawal was mala fide and
\nit was\tbad because  no show  cause notice was served to the
\ncompany before\tthe withdrawal\torder was passed.  It was in
\nthat  context\tthat  this   Court  made  the  above  quoted
\nobservations.\tThat was  not a\t case where proceedings were
\ninitiated to  acquire land  for a  company under part VII of
\nthe Act.   Therefore, it is not an authority laying down the
\nproposition that in all cases where power is exercised under
\nsection 48  of the Act it is open to the State Government to
\nact unilaterally  and that  it can withdraw from acquisition
\nwithout giving any reason or for any reason whatsoever.\n<\/p>\n
     In an  acquisition under  part VII of the Act, position
\nof the company or the body for which the land is acquired is
\nquire different\t from that  of the  owner of the land.\tAs a
\nresult of  withdrawal from the acquisition whereas the owner
\nof land\t is ordinarily not likely to suffer any prejudice or
\nirreparable loss, the company for whose benefit the land was
\nto be acquire, may suffer substantial loss.\n<\/p>\n
     However, it  is not  necessary to\tgo into\t this larger
\nquestion whether  in such  a case  the state  Government can
\nwithdraw from acquisition without the consent of the company
\nas the\tjustification given  by the  Government is otherwise
\nnot sustainable.   As stated earlier the reason given by the
\nGovernment for\twithdrawing from  the acquisition is that as
\nno part\t of the\t cost of  acquisition was  to be born by the
\nGovernment the\tacquisition could not have been sustained as
\nfor a  public purpose.\t We have already pointed out that in
\nthis case  the acquisition  was not for a public purpose but
\nit was an acquisition for a company under Chapter VII of the
\nAct.   In respect  of an  acquisition for  a  company  under
\nChapter VII  of the  Act law does not require that the State
\nshould also  bear some cost of the acquisition to make it an
\nacquisition for\t public use.\tThus  the  decision  of\t the
\nGovernment to  withdraw\t from  acquisition  was\t based\tupon
\nmisconception  of  the\tcorrect\t legal\tposition.    Such  a
\ndecision has  to be regarded as arbitrary and not bona fide.
\nParticularly in a case where as a result of a decision taken
\nby the\tGovernment other party is likely to be prejudicially
\naffected, the Government has to exercise its power bona fide
\nand not\t arbitrarily.\tEven though  section 48\t of the\t Act
\nconfers upon the state wide discretion it does not permit it
\nto act\tin an  arbitrary manner\t Though the  State cannot be
\ncompelled to  acquire land  compulsorily for  a company\t its
\ndecision to  withdraw from  acquisition can be challenged on
\nthe ground  that power has been exercised mala fide or in an
\narbitrary  manner.     Therefore,   we\tcannot\t accept\t the
\nsubmission of  the learned  counsel for\t the State  that the
\ndiscretion  of\tthe  State  Government\tin  this  behalf  is
\nabsolute and not justiciable at all.\n<\/p>\n
     We, therefore, allow this appeal and quash the impugned
\norder dated  16.4.1996.\t  However, we  make it clear that it
\nwill be\t open to  the State  Government to  reconsider\tthis
\nquestion  of   withdrawal  from\t  acquisition  and  take  an
\nappropriate decision in accordance with law.  In view of the
\nfacts and circumstances of the case, there shall be no order
\nas to costs.\n<\/p>\n
     Writ Petition C No. 716 of 1996
\n     As we  are allowing  the appeal the learned counsel for
\nthe petitioner\tdoes not  press the  writ petition  at\tthis
\nstage and  reserves his\t right to  challenge the validity of
\nsection 48  if such  an occasion arises in future.  The writ
\npetition is, therefore, dismissed as not pressed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Amarnath Ashram Trust Society And … vs The Governor Of Uttar Pradesh & Ors on 3 December, 1997 Author: Nanavati Bench: G.T. Nanavati, G.B. Pattanaik PETITIONER: AMARNATH ASHRAM TRUST SOCIETY AND ANR. Vs. RESPONDENT: THE GOVERNOR OF UTTAR PRADESH & ORS. DATE OF JUDGMENT: 03\/12\/1997 BENCH: G.T. NANAVATI, G.B. PATTANAIK ACT: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-229747","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nAmarnath Ashram Trust Society And ... vs The Governor Of Uttar Pradesh & Ors on 3 December, 1997 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/amarnath-ashram-trust-society-and-vs-the-governor-of-uttar-pradesh-ors-on-3-december-1997\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Amarnath Ashram Trust Society And ... vs The Governor Of Uttar Pradesh & Ors on 3 December, 1997 - 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