- (1.) In Civil Writ Petition Nos. 1423 and 1924 of 1973 the same notifications under Sections 4 and 6 of the Land Acquisition Act (hereinafter called the Act) have been challenged and they can, therefore, be conveniently disposed of by this single judgment.
(2.) Prayer in both the petitions is for quashing the said notifications by exercise of the powers of this Court under Articles 226 and 227 of the Constitution. Both the notifications were published in the official gazette on January 19, 1973, but this mistake occurred that the notification under Section 6 of the Act preceded the one under Section 4 thereof. The public purpose specified under Section 4 of the Act was that the land was likely to be needed by the Government for the construction of a warehouse by the Punjab State Warehousing Corporation at Maur Kalan. The land intended to be acquired was adjacent to the municipal area of that town.
(3.) The challenge to the notifications was made on several grounds but one of them is material, and there was no way out for the State to save them from being struck down. The Punjab State Warehousing Corporation being a company, certain specified procedure was required to be followed for the acquisition of the land for being used by it. Section 39 of the Act provides that Sections 6 to 37 thereof shall not be put into force in order to acquire land for any company unless with the previous consent of the Government the company has executed the agreement provided in the subsequent sections of the Act. Then it is mentioned in Section 40 of the Act that the consent shall not be given unless the Government is satisfied either on the report of the Collector under Section 5-A(2) of the Act or by an enquiry held thereafter. There are then Land Acquisition (Companies) Rules, 1963, which are to be followed for holding the enquiry by the Collector. Under rule 4 thereof it is provided as follows :- "4. Appropriate Government to be satisfied with regard to certain matters before initiating acquisition proceedings. - (1) Whenever a Company makes an application to the appropriate Government for acquisition of any land, that Government shall direct the Collector to submit a report to it on the following matters, namely :- (i) that the Company has made its best endeavour to find out lands in the locality suitable for the purpose of the acquisition; (ii) that the Company has made all reasonable efforts to get such lands by negotiation with the persons interested therein on payment of reasonable price and such efforts have failed; (iii) that the land proposed to be acquired is suitable for the purpose; (iv) that the area of land proposed to be acquired is not excessive; (v) that the Company is in a position to utilise the land expeditiously; and (vi) where the land proposed to be acquired is good agricultural land, that no alternative suitable site can be found so as to avoid acquisition of that land. (2) The Collector shall, after giving the Company a reasonable opportunity to make any representation in this behalf, hold an enquiry into the matters referred to in sub-rule (1) and while holding such enquiry he shall, - (i) in any case where the land proposed to be acquired is agricultural land, consult the Senior Agricultural Officer of the district whether or not such land is good agricultural land; (ii) determine, having regard to the provisions of Sections 23 and 24 of the Act, the approximate amount of compensation likely to be payable in respect of the land which, in the opinion of the Collector, should be acquired for the Company; and (iii) ascertain whether the Company offered a reasonable price (not being less than the compensation so determined) to the persons interested in the land proposed to be acquired. Explanation. - For the purpose of this rule "good agricultural land" means any land which, considering the level of agricultural production and the crop pattern of the area in which it is situated, is of average or above average productivity and includes a garden or grove land. (3) As soon as may be after holding the enquiry under sub-rule (2), the Collector shall submit a report to the appropriate Government and a copy of the same shall be forwarded by that Government to the Committee. (4) No declaration shall be made by the appropriate Government under Section 6 of the Act unless - (i) the appropriate Government has consulted the Committee and has considered the report submitted under this rule and the report, if any, submitted under Section 5-A of the Act; and (ii) the agreement under Section 41 of the Act has been executed by the Company." There is a Full Bench ruling of our own High Court reported as Punjab State Warehousing Corporation, Chandigarh V. Shangara Singh and others, 1979 81 PunLR 294, wherein this point was specifically decided that the Punjab State Warehousing Corporation is a Company for the purposes of the Act. In the Act 'company' has been defined in Section 3(e). The expression 'company' is said to mean among other things a company incorporated by any Indian law. One of the arguments of the learned Assistant Advocate General is that the Punjab State Warehousing Corporation is not an ordinary type of company. It is such a concern in which 50 per cent of the capital is invested by the State itself. In Valjibhai Muljibhai Soneji and another V. The State of Bombay and others, 1963 AIR(SC) 1890the holding in headnote (e) is relevant and it is reproduced as follows :- "Assuming that the funds of a State Transport Corporation consist only of the moneys which have been provided by the State Govt., they cannot be regarded as part of the public revenue. No doubt, the source of the funds would be public revenue but the funds themselves belong to the Corporation and are held by it as its own property. They cannot, therefore, be regarded as 'public revenue' in any sense. Further, the Corporation is not a department of Government but is a separate legal entity and, therefore, money coming out of public revenue whether invested, loaned or granted to it would change their original character and become the funds or assets of the Corporation when they are invested in or transferred or loaned to it." There is a reference to an enquiry under rule 4 of the Land Acquisition (Companies) Rules in State of Gujarat and others V. Ambalal Haiderbhai etc., 1976 AIR(SC) 2002and the observations of the Court are to the following effect :- "Although the rule is silent regarding the mode and method of the enquiry to be held by the Collector and the report of the Collector is of a recommendatory character, yet regard being had to the legislative history and purpose of the rule, and the mischief sought to be prevented, it must be held that, in conducting the enquiry, the Collector has, in the interest of fair play, to observe the principles of natural justice by affording the persons interested in the land a reasonable opportunity of being heard and of adducing material before the Collector to refute the allegations of the Company.";