MOTILAL VITHALBHAI PATEL Vs. STATE OF GUJARAT
LAWS(GJH)-1960-11-19
HIGH COURT OF GUJARAT
Decided on November 08,1960

MOTILAL VITHALBHAI PATEL Appellant
VERSUS
STATE OF GUJARAT Respondents


Referred Judgements :-

CHAMBERLAIN V. INLAND REVENUE COMMISSIONERS [REFERRED]
STATE OF BIHAR;VISHESHWAR RAO;SURYA PAL SINGH;HEADNOTE IN STATE OF BIHAR V/S KAMESHWAR SINGH;STATE OF MADHYA PRADESH;GOVERNMENT OF UTTAR PRADESH;KAMESHWAR SINGH [REFERRED]
STATE OF BOMBAY V/S R S NANJI [REFERRED]
STATE V/S DEADLEY MISRA [REFERRED]
SATRUGHNA SAHU V. STATE OF ORISSA [REFERRED]
HAMABHAI PELIT V. SECRETARY OF STATE [REFERRED]



Cited Judgements :-

JAGDISH CHANDRA GUPTA VS. UNION OF INDIA [LAWS(P&H)-1964-3-13] [REFERRED TO]
KEDAR NATH YADAV VS. STATE OF WEST BENGAL & ORS. [LAWS(SC)-2016-8-51] [REFERRED TO]
SOORARAM PRATAP REDDY VS. DISTRICT COLLECTOR [LAWS(SC)-2008-9-21] [REFERRED TO]
SULAIMAN ISMAIL KAIYA VS. STATE OF GUJARAT [LAWS(GJH)-2011-2-163] [REFERRED TO]
BANDEKAR BROTHERS PRIVATE LIMITED VS. STATE OF GOA [LAWS(BOM)-2009-7-333] [REFERRED]


JUDGEMENT

- (1.)This is a Rule taken out at the instance of the petitioner who is the owner of certain lands against the respondents the State of Gujarat and Messrs. Karamchand Premchand (Private) Ltd. to show cause why the two notifications dated 13th June 1958 and 3rd June 1960 issued by the State under Secs. 4 and 6 respectively of the Land Acquisition Act 1894 should not be declared to be ultra vires illegal and without jurisdiction or authority and the respondents directed to forbear from exercising any rights over those lands. The petition raises some questions of considerable importance and consequence. As identical questions were raised in a number of other petitions relating to adjoining lands in respect of which similar notifications have been issued and the respondents in all the petitions are the same we directed that they should all be heard together. The facts require to be stated with some fullness. Of some facts we shall however give only a resume and avoid certain details. The petitioner in Special Civil Application No. 346 of 1960 is the owner of Survey Numbers 126 and 127 admeasuring 9 acres and 6 gunthas and 1 acre and 35 gunthas situate within the Municipal limits of the Baroda Borough Municipality. He has built 31 houses on these lands which are in the area known as Nandanvan Colony. The property touches the National Highway. Respondent No. 2 a Private Limited Company is the sole proprietor of a factory known as Sarabhai Chemicals which manufactures drug medicines pharmaceuticals and antibiotics. On 7th December 1957 Respondent No. 2 wrote to the Collector of Baroda inter alia as under :
"We have now taken a big development programme on band which includes both the expansion of the existing installed capacities of the products currently manufactured by us and starting the manufacture of some new important products. Our Development Programme includes the starting of manufacture of (1) Procaine Hydrochloride (2) Saccharin (3) Vitamin B12 Yeast (4) Nicotinic Acid and Nicotine amide and (5) Niketh amide etc. We have already received the approval of the Government of India for the manufacture of the aforesaid Products as required under the Industries (Development and Regulation Act 1951. Our expansion programme also includes manufacturing Citric Acid for which we are awaiting permission from the Government of India.

For a proper and efficient execution of our above referred Development Programme we require more land for constructing new factory Buildings new Warehouse Building for storing raw materials and Finished Products and also for constructing Administrative Offices Canteen etc. we therefore request you to acquire for us the lands which are situated in our vicinity and which are at present included in Survey Nos. 124 125 126 127 134 135 156 137 138 139 140 and 57 of Subhanpura Village.

On 25th December 1957 Respondent No. 2 wrote to the same authority as under :

"In our above application we hate stated that we want some more lands for constructing Factory Buildings for the expansion of our concern. We now inform you that we require lands for constructing residential quarters and for providing recreation facilities to our employers. Please therefore consider the above two objects (namely for constructing residential quarters and for providing recreation facilities) as also the objects of acquiring lands for us among other objects stated earlier."

On the representation of Respondent No. 2 the then State of Bombay issued a notification under sec. 4 of the Act on 13th June 1958 the relevant and material part of which is as follows :

Where as it appears to the Government of Bombay that the lands specified in the schedule hereto are likely to be needed for the purpose of the company viz. for expansion of the Sarabhai Chemicals Works of Karamchand Premchand Ltd. at Baroda.

It is hereby notified under the provisions of section 4 of the Land Acquisition Act 1894 (I of 1894) that the said lands are likely to be needed for the purpose specified above.

If the Government of Bombay is satisfied that the said lands are needed for the aforesaid purpose a final notification to that effect under section 6 of the said Act will be published in the Bombay Government Gazette in due course. The Schedule to the notification includes inter alia Survey Numbers 126 and 127.

The petitioner thereupon filed his objections to the proposed acquisition and also addressed some letters to Respondent No. 1 contending inter alia that the acquisition would not be for a public purpose and that the proceedings should be dropped.

Respondent No. 2 executed an agreement in favour of Respondent No. 1 on 25th April 1960. Good deal of comment has been directed before us on the contents of that agreement for the purpose of showing that the order of acquisition made by the notification under section 6 of the Act made on 3rd June 1960 and on which the respondents in the main rest their case was not made for any public purpose but only for a Company and the contention which we shall examine later in our judgment is that the order of acquisition is bad and inoperative as the requirements of Chapter VII of the Act relating to Acquisition of Land for Companies have been materially disregarded. The relevant part of that agreement may be stated :

Whereas the principal objects for which the Company is established are inter alia manufacture of medicinal and pharmaceutical products Fine Chemicals and other chemicals manufacture of glass vials etc. which are likely to prove useful to the public.

And whereas the Company has applied to the Government of Bombay (hereinafter referred to as the Government) that certain lands comprising Survey Nos. 124 125 126 126 127 132 and 133 of Subhanpura village. Taluka Baroda which are more particularly described in the schedule hereto annexed (hereinafter to as the said lands) should be acquired under the provisions of Land Acquisition Act 1894 (I of 1894) (hereinafter referred to as the said Act) for the following purposes namely:

For expansion of the Sarabhai Chemicals Works Karamchand Premchand Private Limited at Baroda.

And whereas the Government having caused inquiry 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 said purpose i. e. for expanding the factory of Sarabhai Chemicals or for the factories established by any of their associate or for providing residential quarters for its employees or for providing welfare and recreation facilities for its employees or for the employees of any of its associate concerns has consented to the provisions of the said Act being put in force in order to acquire the said land for the Company and has pursuant to section 41 of the said Act required the Company to enter into an agreement hereinafter contained with the Government.

Now these presents witness and it is hereby agreed that the Government shall put in force the provision of the said Act in order to acquire the said land for the Company on the following conditions namely:

(1) The Company shall pay to the Government the entire cost as determined by the Government of the Acquisition of the said land including all compensation damages, costs charges and other expenses whatsoever which have been or may be paid or incurred in respect of or on account of such acquisition or in connection with any litigation arising out of such acquisition...........

(2.)The Company shall
(i) Not use the said land for any purpose other than that for which it is acquired.

(ii) undertake the work of construction of the building or buildings required for she purpose of expansion of the factory within six months from the date on which the possession of the land is handed to the Company and complete the same within two years from the aforesaid date.

A notification under sec. 6 of the Act was issued by Respondent No. 1 on 3rd June 1960 and it was published in the Gujarat Government Gazette on 16th June 1960. The relevant and material part of that notification is as follows :

Whereas by Government Notification in the Revenue Department...... it was

notified that lands specified in the schedule hereto (hereinafter referred to as the said lands) were likely to be needed for the public purpose specified in column 4 of the schedule hereto.

And whereas the Government of Gujarat is satisfied after considering the report of the Collector under sub-section (2) of section 5-A of the Land Acquisition Act 1894 (I of 1894) that the said lands are needed to be acquired at the expense of company for the purpose specified in column 4 of the schedule hereto.

It is hereby declared under the provision of section 6 of the said Act that the lands are required for the public purpose specified in the schedule hereto.....

SCHEDULE

District, Taluka, VillageSurvey No.Approximate area of the Lands required.Public purpose for which the lands are needed.
123 A. g.4 Baroda126/20 6 0For expansion of Baroda1270 35 0Sarabhai Chemicals of Baroda pura.1320 34 0Karmchand Premchand Private Ltd. at Baroda.
(3.)The argument of learned counsel for the company and the State Government on the other hand was that the Notification under section 6 is not invalid as there is substantial compliance with the provisions of section 41. It was said that the notification under section 6 in terms states that the acquisition was for a public purpose and therefore if the purpose of the acquisition was in fact a public purpose the mere absence in the agreement of any term on which the public shall be entitled to use the work for the construction of which land was being acquired cannot render the notification invalid in law. No attempt was made to support the notification on the ground that the acquisition was for the purpose of erecting dwelling houses for workmen or the provision of amenities connected therewith under sub-section (4) of section 41. The argument was that even if the case fell under sub-section (5) of section 41 the undertaking by the company mentioned in the agreement that the work of construction was of building or buildings required for the expansion of the factory was sufficient compliance with the requirement of that sub-section. It was said that it would be enough if the construction work was likely to prove useful to the public and the use need not be physical use. The public need not actually use the work nor need it have the right to use it. It would suffice if the public derived some benefit in consequence of the construction of the work envisaged by section 41(5). It was further said that it did not matter if one of the conditions or requirements of section 41 was left out of the agreement. That would not have the effect of rendering the acquisition invalid in law. In support of the argument that incorporation in the agreement with the company of the terms on which the public was to be entitled to use the work was not absolutely necessary in a case of the nature before us the learned Advocate General relied on the following observations of Mehrotra J. in R. L. Aurora v. State of Utter Pradesh A.I.R. (1958) All. 126 136 :
In this connection it was lastly contended that the agreement is to provide for the terms on which the public shall be entitled to use the work and no such provision has been made in the agreement. There is fallacy in this argument also.

The agreement does provide the terms on which the public shall be entitled to use the work in as much as it provides that the public can use this factory for doing business in connection with the production of textile machines. Whether these terms are good or bad is not the requirement of sec. 41. The agreement thus provides the terms on which the public is entitled to use the work and as such the agreement itself cannot be regarded as contrary to the provisions of sec. 41.

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