Gujarat High Court
Walker Anjaria & Sons Pvt Ltd vs State Of Gujarat on 14 August, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025
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Reserved On : 09/07/2025
Pronounced On : 14/08/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13078 of 2000
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA
AGARWAL
and
HONOURABLE MR.JUSTICE D.N.RAY
=============================================
Approved for Reporting Yes No
✔
=============================================
WALKER ANJARIA & SONS PVT LTD & ANR.
Versus
STATE OF GUJARAT & ORS.
=============================================
Appearance:
MR ASHISH H SHAH(2142) for the Petitioner(s) No. 1,2
MS HETAL PATEL, AGP for the Respondent(s) No. 1,3,4
MS GARIMA MALHOTRA FOR MR SATYAM Y CHHAYA(3242) for
the Respondent(s) No. 2
MR UDAY R BHATT(192) for the Respondent(s) No. 5
=============================================
CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR.JUSTICE D.N.RAY
CAV JUDGMENT
(PER : HONOURABLE THE CHIEF JUSTICE
MRS. JUSTICE SUNITA AGARWAL)
1. Heard Mr.Ashish Shah, learned advocate for the
petitioners, Ms.Garima Malhotra, learned advocate appearing
for the respondent No.2, Ms.Hetal Patel, learned Assistant
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Government Pleader for the State respondents and Mr.Uday
Bhatt, learned advocate appearing for respondent No.5.
2. The present petition has been filed in the year 2000 to
challenge the notification dated 10.03.1999 (Annexure -‘A’);
the notification dated 13.04.2000 (Annexure- ‘B’) and also the
notice dated 28.11.2000 issued under Section 9 of the Land
Acquisition Act, 1894 (for short, “the Act, 1894”); with the
further relief of staying the further proceedings pursuant to
the notice under Section 9 pending hearing of the writ
petition. By means of an amendment carried out vide Court’s
order dated 11.04.2016, prayer 24(AA) has been added in the
following manner :-
“24(AA) This Hon’ble Court may be pleased to
issue an appropriate writ, order or direction and
declare that the notification dated 10.03.1999 at
Annexure-A, and the notification dated 13.04.2000 at
Annexure-B and the notice dated 28.11.2000 at
Annexure-L have stood lapsed in view of provisions
contained in section 24(2) of the Right to Fair
Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 having
came into effect from 1.1.2014 and further be
pleased to quash and set aside the same.”
3. A categorical statement has been made in the writ
petition that the physical possession of the land in question
has not been taken from the petitioners and same is still with
the petitioners and the petitioners have also not paid or
tendered any compensation till date. By adding paragraph
21A to the writ petition it is further asserted that the
acquisition proceedings pertaining to the land in question in
the ownership of the petitioners, stood lapsed by virtue of
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Section 24(2) of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and
Resettlement Act, 2013 (for short, “RFCTLARR Act, 2013“).
4. Thus, two alternative prayers were made in writ petition,
firstly that the acquisition notifications of the year 1999/2000
under the Land Acquisition Act, 1894 (in short as ‘the Act,
1894’) be quashed or else acquisition proceedings be
considered as having been lapsed in view of Section 24(2) of
the RFCTLARR Act, 2013.
5. The acquisition under challenge was for a private
company within the meaning of Part-VII of the Land
Acquisition Act, 1894, which provided the procedure for
acquisition of land for companies. A perusal of the notification
dated 10.03.1999 under Section 4 of the Act, 1894, at page
’46’ of the paper-book indicates that the purpose of
acquisition was :-
“Purpose : Birla VXL Ltd. (Digjam Woollen Mills),
Company establishing expansion project related
utilities, effluent treatment plant and other allied
infrastructures facilities.”
6. Three Revenue Survey numbers, namely Revenue Survey
No.150 paiki (admeasuring 1-7-24, comprised in City Survey
No.139); Revenue Survey No.151/3B (151/3 paiki)
(admeasuring 0-90-04, comprised in City Survey No.139) and
Revenue Survey No.151/3A (151/3 paiki) (admeasuring 0-42-
34, comprised in City Survey No.141), situated at District
Jamnagar, were notified as a proposal for acquisition for the
purposes of expansion project related utilities, effluent
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treatment plant and other allied infrastructure facilities for
the company named as Birla VXL Limited (Digjam Woollen
Mills) (company), the respondent No.2 herein.
7. The first paragraph of the notification under Section 4 of
the Act, 1894, dated 10.03.1999 is relevant to be extracted
hereinunder :-
“Whereas it appears to the Government of Gujarat
that the lands specified in the Schedule hereto are
likely to be needed for the Company : BIRLA VXL
LIMITED (DIGJAM WOOLLEN MILLS), engaged in
public purpose which is establishing expansion
project related utilities, effluent treatment plant and
other allied infrastructure facilities.
It is hereby notified under the provisions of section 4
of the Land Acquisition Act, 1894 (1 of 1894) that the
lands are likely to be needed for the purpose
specified above.”
8. By the notification under Section 6 of the Act, 1894
dated 13.04.2000 one more plot, namely, Revenue Survey
No.151/3A (151/3 paiki) (admeasuring 0-56-92, comprised in
City Survey No.141 paiki) was added in the acquisition.
9. The petitioners herein, however, are challenging the
acquisition of only two plots belonging to them, comprised in
Revenue Survey No.150 paiki and Revenue Survey No.151/3B
(151/3 paiki) (total area admeasuring 1-07-24 plus 0-90-04),
belonging to them.
10. The statement made in the declaration notification dated
13.04.2000, is further relevant to be extracted hereinunder :-
“No.AM-2000-144-M-LJM-1695-1239-GH- Whereas
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Government Notification No.AM-99-99-M-LJM-1695-
1239-GH dated 10.3.99 it as 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 No.4 of the
schedule hereto.
And whereas the Government of Gujarat is satisfied
after considering the report of the Assistant
Collector, Jamnagar under sub Section (2) of Section
5-A of the Land Acquisition Act, 1894 (1 of 1891) that
the said lands are needed to be acquired at the public
expenses for the purpose specified in column 4 of the
schedule hereto.
It is hereby declared under the provisions of Section
6 of the said Act that the lands are required for the
purpose specified in column of the schedule hereto.
The Assistant Collector, Jamnagar is hereby
appointed under clause (c) of Section 3 of said Act to
perform the functions of a Collector for all
proceedings hereafter to be taken in respect of the
said lands. He is also directed under Sec.7 of the said
Act to take order for the acquisition of the said lands.
A plan of the said lands can be inspected at the Office
of the Assistant Collector office, Jamnagar.”
11. The specific challenge to the acquisition is on the ground
of non-compliance of the provisions of Sections 39 and 40 as
contained in Part-VII of the Land Acquisition Act, 1894 read
with the Rule 4 of the Land Acquisition (Companies) Rules,
1963 (for short, “the Rules, 1963”), framed under Section 55
of the Act, 1894. It is the case of the petitioners that the
petitioners have been deprived of their lands without any
authority of law.
12. The contention in the writ petition is that the petitioners
had purchased the lands in question by registered sale deed
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dated 08.12.1971 and the name of the petitioner No.1 –
company was mutated in the revenue records, namely Village
Form No.6 vide Entry No.3795 dated 14.11.1973, which was
certified on 18.12.1973. The land in question was purchased
by the petitioners for expanding the company’s activities by
starting an independent unit for production of Woolen Sodi
blanket. Development permission was granted by the
Municipal Corporation vide order dated 20.08.1991, but on
account of encroachment and pendency of some suit
proceedings, constructions could not commence.
13. The petitioners made inquiries about acquisition upon
publication of the notification dated 13.04.2000 under Section
6 of the Land Acquisition Act, 1894 in the daily newspaper
dated 19.04.2000. An application was filed in the office of the
Assistant Collector and Land Acquisition Officer, Jamnagar on
31.05.2000 to get certified copies of the report of the Land
Acquisition Officer, documents relating to the publication of
notice, copy of the notification under Section 4. Out of the
aforesaid documents, only the copy of Rojkam dated
21.04.1999 was provided to the petitioners showing that the
notice was affixed on the land bearing Survey Nos.150 and
151/3 along with the copies of the notifications under Sections
4 and 6; respectively. The contention in the writ petition is
that entire acquisition is a result of irregularities committed
during the course of making inquiry under Sections 39 and 40
of the Act, 1894. Vide application dated 03.07.2000, the
petitioners have applied for getting certified copies of the
following documents from the office of the Assistant
Collector :-
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“(1) Preliminary report under Section 3A of the Land
Acquisition Act along with all connected papers.
(2) Copy of the report of the Preliminary inquiry
under Section 4 of the Land Acquisition Act along
with related papers.
(3) Report under Section 5A of the Land Acquisition
Act along with other related papers.
(4) Copy of the previous report under Section 39 of
the Land Acquisition Act issued by the Government of
Gujarat along with other related papers;
(5) Inquiry report under Section 4 of the Land
Acquisition Act along with other related papers.
(6) The notices issued to the interested persons and
proof of service of such notices.”
14. A categorical assertion has been made in the writ
petition that none of the documents asked by the petitioners
were supplied to them.
15. In the meantime, the petitioners had received notice
dated 28.11.2000 under Section 9 of the Act, 1894 wherein
date fixed was 12.12.2000, whereafter the present petition
has been filed challenging the proceedings for acquisition of
the lands in question for the purpose of a private company.
16. It was argued by Mr.Ashish Shah, the learned counsel
for the petitioners that the notification under Section 6 of the
Act, 1894 states that an inquiry under Section 5A of the Act
had been made and the Government of Gujarat had recorded
satisfaction after considering the report of the Assistant
Collector, Jamnagar under Sub-section (2) of Section 5-A of
the Land Acquisition Act, 1894, that the lands in question are
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needed to be acquired at the public expenses for the purposes
specified in the schedule, which is noted hereinbefore.
17. It is submitted that inquiry under Section 5A is not a
substitute for an inquiry under Section 40 contained in Part-
VII which was required to be adhered to for the acquisition of
land for a private company. Rule 4 of the Land Acquisition
(Companies) Rules, 1963, required a satisfaction to be
recorded by the appropriate government before initiating
acquisition proceedings with regard to the matters stated
therein such as that the company has made all reasonable
efforts to get such lands by negotiations with the persons
interested therein on payment of reasonable price and such
efforts have failed.
18. The contention is that as per the procedure prescribed in
Section 40 of the Act, 1894 read with Rule 4, a previous
inquiry was required to be held by the Collector for making a
report to the appropriate Government (the State of Gujarat
herein), to record its satisfaction about the compliance of the
requirement of Section 40 of the Act, 1894 read with Rule 4 of
the Rules made therein. Section 39 of the Act, 1894 further
requires for the previous consent of the appropriate
Government and execution of the agreement as per Section 41
with the appropriate Government, for the purpose of invoking
Section 6 to 16 (both inclusive), to conclude the proceedings
for acquisition, wherever a private company makes
application to the appropriate Government for acquisition of
any land. The alleged inquiry under Section 5A and the report
submitted under Sub-section (2) of Section 5A of the Act, 1894
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as referred to in the declaration notification under Section 6,
as noted hereinabove, was a colourable exercise of power
conferred upon the Collector.
19. The scope of inquiry under Section 5A of the Act, 1894
and the inquiry required under Section 40 as contained in
Part-VII are completely different. Moreover, Section 40 in its
application to the State of Gujarat, does not have any
reference to the report of the Collector under Section 5A, as
words “either on the report of the Collector under Section 5A,
Sub-section (2) or” in various sections in Part-VII have been
deleted vide Section 19 of the Gujarat Act No.20 of 1965 with
effect from 15.08.1965. The further contention is that the
statements in the acquisition notifications under Sections 4
and 6, noted hereinabove, itself indicate that the acquisition
for private company was treated as acquisition for public
purpose and a misleading statement has been made therein
that the lands in question were needed for a public purpose,
though the purpose specified therein was for the project
related activities of a private company. Even the statement in
the declaration notification under Section 6 is to the effect that
the lands were needed to be acquired at the public expenses,
which means that the acquisition expenses were not borne by
the private company, impleaded as respondent No.2 herein.
20. It was argued that as per the provisions contained in
Part-VII for acquisition of land for companies, the stages of
inquiry are :-
(i) Firstly, a previous inquiry under Section 40 of the Act,
1894 read with Rule 4 of the Rules, 1963 as required inPage 9 of 72
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Clauses (a), (aa) and (b) of Sub-section (1) of Section 40,
was to hold;
(ii) then Agreement under Section 41 was to be executed;
(iii) The question of seeking previous consent of the
appropriate Government on consideration of the inquiry
report as per Section 40 read with Rule 4 and also on
application of mind on terms and conditions of the
agreement, execution of which is necessary for grant of
previous consent as per Section 39, would then arise.
(iv) The question of publication of the notification under
Section 4 of the Act, 1894 (for the State of Gujarat)
would arise only after the recording of the previous
consent of the appropriate Government and execution of
agreement as per Section 41 of the Act, 1894. The
previous inquiry under Section 40 which is required to
be made by the Collector must precede the execution of
agreement under Section 41, in order to obtain the
consent of the appropriate Government.
21. The submission is that no report of the
Collector/Assistant Collector as required under Section 40 of
the Act, 1894 has been brought on record, neither the
agreement as required to be executed under Section 41 with
the appropriate Government prior to the publication of
Section 6 notification, is part of the record placed by the
respondents in the present petition. There was absolutely no
previous consent of the appropriate Government on
application of mind recording satisfaction, about the
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procedure adopted by the Collector, i.e. previous inquiry
under Section 40 and the agreement under Section 41 of the
Act, 1894. Invocation of Section 6 of the Act, 1894 for
publication of the declaration recording satisfaction of the
appropriate Government (State Government) was, thus, not a
bona fide exercise of power at the ends of the respondents.
The entire acquisition proceeding is hit by non-compliance of
the mandatory provisions of Sections 39, 40 and 41 in Part-VII
of the Act, 1894 read with Rule 4 of the Rules, 1963 made
thereunder. In any case, no effective hearing was granted
under Section 5A by the Assistant Collector, as alleged, which
provision is otherwise not applicable for acquisition under
Part-VII in the State of Gujarat.
22. It was placed before us by the learned counsel for the
petitioners that the proposal for acquisition was made by the
respondent company to the Collector on 18.01.1995 and an
agreement was executed between the Company and the
Collector in the month of February, 1995 itself. The Collector
forwarded its report of the alleged inquiry made under
Section 5A of the Act, 1894 (which otherwise is not
applicable) on 29.05.1997 and previous consent of the
appropriate Government / State Government was allegedly
obtained on 30.09.1998. It is evident that the procedure as
prescribed in Section 40 to make an inquiry and submit a
report of the officer concerned before the appropriate
Government and then the requirement of the Company to
enter into an agreement with the appropriate Government on
the satisfaction recorded about the inquiry made under
Section 40, were twisted and turned to suit the private
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company in the matter of acquisition, which was actually
proceeded at the ends of the Collector with the execution of
the agreement prior in point of time, in the month of
February, 1995.
23. It was, thus, argued that the entire proceedings for
acquisition for placing the matter before appropriate
Government was a result of a pre-determined mind that the
land in question was required to be given to the private
company which had already entered into an agreement with
the Collector laying down the terms and conditions of
providing the lands in question for the purposes of the
Company. Later, in order to give it a cloak of the procedure
prescribed in Part-VII of the Act, 1894, having been adopted,
further communications were made by the Collector. The
appropriate Government, in any eventuality, has failed to
apply its independent mind to record satisfaction about the
purpose for which the acquisition was made and the inquiry
required under Part-VII.
24. The submission is that on the presentation of the present
writ petition, the status-quo order was passed on 05.02.2003
as to the possession over the land in question which is
operative till date. The possession memo though was executed
on 03.01.2003, but physical possession of the land in question
is still with the petitioners and further the compensation
under the award dated 17.04.2002 has never been received by
the petitioners.
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25. In rebuttal, it was argued by Ms.Garima Malhotra,
learned counsel for the respondent No.2 – Company that the
physical possession of the land in question has been handed
over to the respondent No.2 – company, namely Birla VXL
Limited (Digjam) with the possession memo dated 03.01.2003,
but on account of the status-quo order passed by this Court,
no development work could be carried out though the
company had deposited huge amount as compensation. The
fact remains that the lands in question have not been utilized
for the purposes of the company, namely Birla VXL Limited for
which it was acquired in the year 2000.
26. It may not be out of place to note, at this juncture, that
the respondent No.2 – company, namely Birla VXL Limited
(Digjam Limited) had undergone insolvency proceedings
under the provisions of the Insolvency and Bankruptcy Code,
2016 (for short “I.B. Code”) and ultimately, a resolution plan
has been approved by the National Company Law Tribunal
(NCLT) vide order dated 27.05.2020 and it is now revived as
M/s.Finquest Financial Solution Private Limited (approved
resolution applicant) as per the approved resolution plan
under Section 31 of the I.B. Code.
27. It is stated in the affidavit dated 06.01.2024 filed by the
Director of respondent No.2 – company, namely M/s.Digjam
Limited that since after approval of the resolution plan for
M/s.Finquest Financial Solution Private Limited, the
respondent No.2 – company is being run as an ongoing
concern and continues to carry on its business till date. The
new management re-commenced the production of the
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company and detail of the production figures for the year
2020-21, 2021-22 and 2022-23 have been placed on record
particularly for fabric (poly-woolen and poly-viscose), with the
strength of the workers and administrative staff for these
years. It is, thus, stated that the constitution of respondent
No.2 – company has not been affected and there is only a
change of management and the company is into textile
manufacturing activities since its inception, i.e. 1948 at
Digjam unit located at Jamnagar and the present company is
carrying out its business as a going concern. The contention is
that the purpose of acquisition has not been frustrated and
the respondent No.2 – company still requires the land in
question for establishing the expansion projected related
utilities, effluent treatment plant and other infrastructural
facilities.
28. Taking note of the said stand of the respondent No.2 –
company, vide order dated 11.07.2024, while noticing that
there is no categorical statement in the affidavit of the
Director of the reconstituted company that the factory or the
unit, for expansion of which and for establishment of effluent
treatment plant or other infrastructure activities for the said
factory, is still in operation at the same place and the unit is
operating as on date, time was granted to file additional
affidavit on behalf of respondent No.2 to make a categorical
statement as to the existence of the manufacturing unit, for
the purpose of which the land in question has been acquired.
It was directed that all papers to establish existence and
running of the manufacturing unit known as Digjam Woollen
Mills (now name changed, if any), shall be brought on record
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along with the affidavit of the Director of the reconstituted
company, namely M/s.Digjam Limited.
29. We may also note that on an amendment application
filed by the petitioners, the name of the respondent No.2 has
been permitted to be amended from Birla VXL Limited to
Digjam Limited.
30. It is pertinent to note that no affidavit in compliance of
the order dated 11.07.2024 has been filed by the Director of
the respondent No.2 – company and the said fact was noted by
this Court in the order dated 27.11.2024. On the other hand,
the petitioners herein have filed an affidavit dated 31.07.2024,
wherein it is stated that the workers of respondent No.2 –
company had raised an industrial dispute raising several
demands which was registered as Reference (I.T.) No.15 of
2023 before the Industrial Tribunal, Jamnagar and in all
possibility, production in the factory unit at Jamnagar is
virtually Nil. The company had issued notice dated 04.05.2024
informing the workers that the production unit of Jamnagar
shall be shifted to Jaghadia, Bharuch and all the machineries
and the workers would also be transferred.
31. A categorical statement has further been made in the
said affidavit of the petitioners that the manufacturing unit of
respondent No.2 – company at Jamnagar is non-operational
from some time and the company no longer requires
additional land for expansion of its activities or effluent
treatment plant. The attention of the Court is invited to page
‘445’ of the paper-book, sale deeds executed by Digjam
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Limited, respondent No.2 – company for sale of its properties
at the lands bearing original City Survey No.2 (Revenue
Survey Nos.150 and 151 paiki), which has been given new
number, namely City Survey No.136, Sheet No.269, Ward
No.10.
32. The sale deed dated 28.03.2024 executed by Digjam
Limited, in favour of the partners of Shriji Investors (the
purchasers) contains description of the property as Sub-
divided Plot No.136/1/1 (total area 8866.48 sq.mtrs.) and Sub-
division No.136/1/3 for the total area of 12,330.32 sq.mtrs.,
inclusive of common plot area with the old existing
construction thereon.
33. With the above sale deed brought on record, it was
contended by the petitioners in the affidavit dated 31.07.2024
that the respondent No.2 – company had sub-divided the plots
and sold residential construction of 653.94 sq.mtrs., industrial
roof type construction area 4751.39 sq.mtrs. and industrial
RCC type construction of 511.58 sq.mtrs. vide sale deed dated
20.03.2024, which has not been rebutted by the respondent
No.2 by filing any reply.
34. From the copy of the reply submitted by the respondent
company before the Industrial Tribunal, Jamnagar in
Reference (I.T.) No.15 of 2023 (at page 476 of the paper-
book), it is sought to be demonstrated by the learned counsel
for the petitioners that as per own statement of the
respondent No.2 – company, namely Digjam Limited in the
reply dated 09.04.2024, before the Tribunal, the production of
the company had not been resumed after 2018.
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35. At the cost of repetition, it may be noted that of these
facts brought on record by the petitioners about the status of
the manufacturing unit of respondent No.2 – company at
Jamnagar, for the purpose of which the land in question had
been acquired, there is no rebuttal. It is, thus, an admitted
fact that the factory of the erstwhile company, namely Birla
VXL Limited, for the expansion project of which the lands in
question had been acquired in the year 1999-2000, is not
operational nor is in existence as on date. The respondent
No.2 – company namely, Digjam Limited has sold its lands
over which, the factory premises was situated by execution of
the sale deed in the month of March, 2024. The result is that
the purpose for which the acquisition in question was made,
stands frustrated by efflux of time. The question as to what
would be the effect of this fact on the merits of the instant
case is subject to further inquiry to be made by us about the
validity of the acquisition proceedings and hence would be
appreciated at an appropriate stage of this judgment.
36. Coming to the challenge to the acquisition proceedings
on the ground that the procedure prescribed in Part-VII of the
Act, 1894 has not been followed in the acquisition of the land
in question, we are required to note the averments in the
affidavit of the State respondent. An affidavit dated
26.06.2001 has been filed by the Deputy Collector to state
that the acquisition proceedings have been initiated for the
purpose of expansion of the Digjam Woollen Mills of VXL India
Limited. The procedure required under Section 5A, 39 and 40
of the Land Acquisition Act, 1894 and Rule 4 of Land
Acquisition (Companies) Rules, 1963 had been followed for
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publication of the notifications under Sections 4 and 6 of the
Act, 1894. The allegations of breach of principles of natural
justice in the writ petition are false. Joint measurement
proceedings had been conducted in the presence of the
acquiring company and the land owners who were present at
the site on 10.12.1998, by the office of the City Survey
Superintendent, Jamnagar. A joint meeting of the land
owner/interested persons in the land in question and the
acquiring body was held on 20.05.1997 and in the said
meeting, the petitioner No.2 was also present and hence, the
contention in the writ petition that the petitioners were not
aware about the purpose for which joint measurement was
carried out, is wrong.
37. Further it is contended that after the notifications were
published in the newspaper, the petitioners filed an
application on 31.05.2000 demanding certain documents, but
the report of the Land Acquisition Officer submitted to the
State Government being an inter-departmental
communication was not given to the petitioners. The
petitioners had full knowledge of the acquisition proceedings
and hearing was afforded to respondent No.2 and objections
were considered in reply to the notice under Section 9(3)(4) of
the Act, 1894, in the proceeding for fixation of compensation
held on 12.12.2000. The respondent No.2, though remained
present on the date of hearing and sought time to file his
objection, but no objection had been filed by him.
38. As regards the necessary inquiry as per Section 40 of the
Act, 1894, the averment in paragraph 9 of the affidavit of the
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Deputy Collector are relevant to be extracted hereinunder :-
“9. With regard to para 16 of the memo of the
petition, I deny the averment made therein. I say and
submit that the necessary inquiries as per the
provisions of sec.40 of the Act has been made and the
said inquiry has been carried out in strict compliance
of the provisions of the rule 4 of the Land Acquisition
(Companies) Rules. I say and submit that on
examination about six material points, and inquiry
thereafter, the report was submitted by the Collector
Shri Jamnagar to the government on 29.5.97 and as
per the said report, no other land is available for
acquisition except the land in question, in addition
thereto, as per the report the land acquired is not
excessive the required and land in question is in fact
required for the company and the company
(acquiring body) had made an attempt to negotiate
with the owners and the interested persons of the
land in question. Hence, the land acquisition is only
the remedy. All these factors have been duly
considered and by approving the said inquiry held in
pursuance of sec. 4 has been approved by the
revenue department on 30.09.98 and NOC under the
provision of the ULC Act, has been issued. I say and
submit that sec. 4 notification has been accepted by
the revenue department and therefore, the question
of violation of 39-40 of the act, does not arise.”
39. The contention in paragraph 10 of the affidavit of the
Deputy Collector is that the respondent No.2 – company had
made an attempt to negotiate with the land owners and had
addressed a letter dated 04.04.1997 to the land owners,
except the petitioners and held meeting on 10.04.1997 for
purchase of the lands stated in the notification. It is further
stated that since there was some inconsistency in the revenue
record and city survey records with regard to ownership of
land bearing Survey No.150 and Survey No.151/3 and Court
proceedings were going on, negotiation for purchase of the
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land was not carried with regard to owners of Survey Nos.150
and 151/3. However, the said issue is to be addressed by
respondent No.2, namely the company.
40. It is contended that in the meeting conducted by the
Deputy Collector on 20.05.1997, for the purpose of settlement
of compensation between the land owners and the acquiring
body, the land owner including the petitioners and the
representatives of the acquiring body were present. No
settlement, however, could be carried out on account of the
high demand made by the land owners. The representative of
the petitioners, the petitioner No.2 herein, namely the
Director of the petitioner No.1 – company was present in the
meeting but had refused to make submission with regard to
compensation. There is, thus, a statement about the effort
made for acquiring company to acquire the land in question
by private negotiation.
41. It is stated in the affidavit of the Deputy Collector that
the land in question has not been utilized by the petitioner –
company and there was encroachment over 10% of land in
Survey No.150 and the dispute was pending before the Court /
Tribunal when hearing was conducted on 12.12.2000 qua the
proceedings under Section 9.
42. Another notarized affidavit of the Deputy Collector,
Jamnagar is on record which is not properly sworn, but the
averments have been made therein are with regard to inquiry
conducted by the Collector, Jamnagar in respect of the
matters stipulated under Rule 4 of the Rules, 1963. It is stated
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that the inquiry report had been forwarded to the State
Government vide letter dated 29.05.1997 and it deals with all
aspects stipulated under Rule 4, wherein the Collector has
elaborated that the company has made its endeavour to find
out lands in the locality suitable for the purpose of acquisition
and inspite of all efforts require such land by private
negotiation with the persons and such efforts having been
failed; the land proposed to be acquired is suitable for the
purpose; the area of land proposed to be acquired is not
excessive; the company is in a position to utilize the land
expeditiously etc. The State Government had considered the
same and no objection certificate dated 30.09.1998 had been
issued by the Revenue Department, the issuance of Section 4
notification had, thus, been duly sanctioned by the Revenue
Department.
43. It is further contended that the acquiring company and
the representatives of the State Government, i.e. Collector,
Jamnagar had entered into an agreement in the month of
February, 1995 which had been duly published in the official
gazette. The contention of the petitioners that there was no
agreement between the company and the State Government is,
thus, false. There is a reference of the meeting held on
04.04.1997 with the land owners and negotiations carried out
for acquisition of the land in question to assert that it is wrong
to say that the company did not make any endeavour to acquire
the land in question through private negotiation. There is a
reference of subsequent meeting held on 25.09.1997 and the
date of hearing under Section 9 fixed as 12.12.2000.
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44. We may also take note of the averments in the affidavit
filed on behalf of the respondent No.2, acquiring company
about challenge in the writ petition. In its first affidavit dated
17.01.2001, the respondent No.2 gave a description about the
notifications published in the newspaper for acquisition. It is
contended that prior to the acquisition, the measurement of
the land in question was carried out on 09.12.1998 and the
petitioners remained present at the time of said measurement.
A proposal was forwarded to the Collector on 18.01.1995 to
intimate the requirement of additional land for the purpose of
expansion of the Woolen Mill which was running for more
than 50 years. It was stated in the proposal that there would
be additional employment of 1800 persons and the
Government revenue would increase upto 160 Crores rupees.
45. It is stated that as it was acquisition for the purposes of
the company, as required under law, on 13.05.1995, the
District Collector, Jamnagar had forwarded the agreement
between the Company and the Collector to the Deputy
Secretary, Revenue Department for taking necessary action.
All required proceedings were, thereafter, undertaken and
almost two years were passed after the agreement was
forwarded by the Collector, when on 13.05.1997 a meeting
was called and held on 20.05.1997 between the land owners
and the respondent No.2 – company, where the petitioner
No.2, namely the Director of petitioner No.1 – company was
present. The minutes of the said meeting were transcribed
and sent by the Deputy Collector, Talati to the representative
of the respondent No.2 – company and the petitioners herein.
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The copies of the proceedings held on 20.05.1997 has been
annexed as Annexure-‘3’.
46. It is stated that as the petitioner No.2 showed his
unwillingness to sell the land in question to the respondent –
company, and, as such, there was no question of arriving at an
agreement for the price and value of the land. The price
offered by respondent No.2 – company was not agreed by the
petitioners and there was a demand for huge consideration
for sale.
47. In another affidavit dated 23.09.2013 filed on behalf of
respondent No.2 – company, averments have been made with
regard to the dispute pertaining to ownership of the land in
question and the assertion is that the petitioners had no right
title and interest over the major chunk of land in question.
48. However, the fact remains that all such disputes have
been brought to its logical end and further, at the time of
acquisition, the petitioners herein were the recorded tenure
holders of the land in question. Any dispute pertaining to the
right, title or interest over the land in question, between the
private persons, at the relevant point of time, was not
important for the purpose of acquisition.
49. Be that as it may, in order to ascertain as to whether the
proper procedure for acquisition for a private company,
namely respondent No.2 herein, had been followed, we have
summoned the entire original record of acquisition and looked
into it during the course of hearing. The facts culled out from
the record of acquisition would be noted at an appropriate
stage in this judgment.
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50. However, before proceeding on the factual aspects, we
would like to go through the provisions of the Land
Acquisition Act, 1894 and the rules framed thereunder which
provide the procedure for compulsory acquisition of a private
land, for a private company. There is no dispute about the fact
that the respondent No.2 – company, for which the land in
question had been acquired is a ‘Company’ defined in Section
3 of the Companies Act, 1956. The Land Acquisition Act, 1894
provided for acquisition of land for companies defined in
Section 3(e) of the Act, 1894 and a separate chapter in
Part-VII was prescribed for acquisition of land for companies.
Sections 39, 40 and 41 as contained in Part-VII of the Act,
1894 relevant for our purposes, are to be extracted
hereinunder with Amendment vide Gujarat Act No.20 of 1965
with effect from 15.08.1965 :-
“39. Previous consent of appropriate
Government and execution of agreement
necessary. – The provisions of [sections 6 to 16 (both
inclusive) and sections 18 to 37 (both inclusive)] shall
not be put in force in order to acquire land for any
company [under this Part], unless with the previous
consent of the [appropriate Government], not unless
the Company shall have executed the agreement
hereinafter mentioned.
STATE AMENDMENTS
Gujarat – In section 39, for the figure “6”, after the
word “sections”, substitute the figure “4”.
[Vide Gujarat Act 20 of 1965, sec.18 (w.e.f.15-8-1965]
40. Previous enquiry. – (1) Such consent shall not
be given unless the [appropriate Government] be
satisfied. [either on the report of the Collector under
section 5A, sub-section (2), or] by an enquiry held as
hereinafter provided, –
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[(a) that the purpose of the acquisition is to obtain
land for the erection of dwelling-houses for workmen
employed by the Company or for the provision of
amenities directly connected therewith, or
[(aa) that such acquisition is needed for the
construction of some building or work for a Company
which is engaged or is taking steps for engaging
itself in any industry or work which is for a public
purpose, or]
(b) that such acquisition is needed for the
construction of some work* and that such work is
likely to prove useful to the public].
(2) Such enquiry shall be held by such officer and at
such time and place as the [appropriate Government]
shall appoint.
(3) Such officer may summon and enforce the
attendance of witnesses and compel the production of
documents by the same means and, as far as possible,
in the same manner as is provided by the [Code of
Civil Procedure, 1908 (5 of 1908)] in the case of a
Civil Court.
STATE AMENDMENTS
Gujarat – In section 40, in sub-section (1), omit the
words “either on the report of the Collector under
section 5A, sub-section(2) or”.
[Vide Gujarat Act 20 of 1965, sec.19 (w.e.f.15-8-1965]
41. Agreement with appropriate Government. – If
the [appropriate Government] is satisfied [after
considering the report, if any, of the Collector under
section 5A, sub-section (2), or on the report of the
officer making an inquiry under section 40] that [the
proposed acquisition is for any of the purposes
referred to in clause (a) or clause (aa) or clause (b) of
sub-section (1) of section 40], it shall require the
Company to enter into an agreement [with the
[appropriate Government]], providing to the
satisfaction of the [appropriate Government] for the
following matters, namely :-
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(1) the – [payment to the [appropriate Government]]
of the cost of the acquisition;
(2) the transfer, on such payment, of the land to the
Company;
(3) the terms on which the land shall be held by the
Company,[(4) where the acquisition is for the purpose of
erecting dwelling-houses or the provision of
amenities connected therewith, the time within
which, the conditions on which and the manner in
which the dwelling-houses or amenities shall be
erected or provided;
[(4A) where the acquisition is for the construction of
any building or work for a Company which is engaged
or is taking steps for engaging itself in any industry
or work which is for a public purpose, the time within
which, and the conditions on which, the building or
work shall be constructed or executed; and
(5) where the acquisition is for the construction of
any other work, the time within which and the
conditions on which the work shall be executed and
maintained, and the terms on which the public shall
be entitled to use the work.]
STATE AMENDMENTS
Gujarat – In section 41, omit the words “after
considering the reports, if any, of the Collector under
section 5A, sub-section (2), or”.
[Vide Gujarat Act 20 of 1965, sec.20 (w.e.f.15-8-1965]”
51. Sections 44A and 44B inserted in the Land Acquisition
Act, 1894 vide Amended Act No.31 of 1962 (with effect from
12.09.1962) are also relevant to be noted hereinunder :-
“[44A. Restriction on transfer, etc. – No Company
for which any land is acquired under this Part shall
be entitled to transfer the said land or any partPage 26 of 72
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thereof by sale, mortgage, gift, lease or otherwise
except with the previous sanction of the appropriate
Government.
44B. Land not to be acquired under this Part
except for certain purpose for private companies
other than Government companies.-
Notwithstanding anything contained in this Act, no
land shall be acquired under this Part, except for the
purpose mentioned in clause (a) of sub-section (1) of
section 40, for a private company, which is not a
Government company.
Explanation. – “Private company” and “Government
company” shall have the meaning respectively
assigned to them in the Companies Act, 1956 (1 of
1956).]”
52. Section 55 of the Act, 1894, authorized the appropriate
Government to make rules consistent with the Act for the
guidance of officers in all matters connected with its
enforcement. The first proviso to Sub-section (1) of Section 55
confers power on the Central Government for carrying out the
purposes of Part-VII of the Act, 1894, for guidance of the State
Government and officers of the Central Government and of the
State Government. In exercise of the powers conferred by
Section 55 of the Land Acquisition Act, 1894, the Central
Government framed rules named as the Land Acquisition
(Companies) Rules, 1963. Rules 3, 4 and 5 of the Rules, 1963
are relevant to be extracted hereinunder :-
“3. Land Acquisition Committee: (1) For the
purpose of advising the appropriate Government in
relation to acquisition of land under Part VII of the
Act the appropriate Government shall , by notification
in the official Gazette, constitute a committee to be
called the Land Acquisition Committee.
[(2) The Committee shall consist of –
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(i) the Secretaries to the Government of the
Departments of Revenue, Agriculture and Industries
or such other officers of each of the said Department
as the appropriate Government may appoint ;
(ii) such other members as the appropriate
Government may appoint for such term as that
Government may, by order, specify, and
(iii) The appropriate Government or any officer
nominated by him dealing with the purposes for
which the company purposes to acquire the land].
(3) The appropriate Government shall appoint one of
the members of the Committee to be its chairman.
(4) The committee shall regulate its own procedure.
(5) It shall be the duty of the Committee to advise the
appropriate Government on all matters relating to or
arising out of acquisition of land under part VII of the
Act on which it is consulted and to tender its advice
within one month from the date on which it is
consulted.
Provided that the appropriate Government may on a
request being made in this behalf by the Committee
and for sufficient reasons extend the said period to a
further period not exceeding two months.
4. Appropriate Government to be satisfied with
regard to certain matters before initiating
acquisition proceedings.- (1) Whenever a company
makes in 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 acquisition.
(ii) that the company has made all reasonable efforts
to get such lands by negotiation with the person
interested therein on payment of reasonable price
and such efforts have failed,Page 28 of 72
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(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 utilize 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 inquiry into the matters
refereed 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
Section 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 be
forwarded by the Government to the Committee.
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(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.
5. Matters to be provided in the agreement
under Section 41.- (1) The terms of the agreement
referred to in section 41 of the Act shall include the
following matters, namely :-
(i) that the company shall not, except with the
previous sanction of the appropriate Government, use
the land for any purpose other than that for which it
is acquired ;
(ii) the time within which the dwelling houses or
amenities directly connected therewith shall be
erected of provided or the building or work shall be
constructed or executed shall not exceed three years
from the date of transfer of the land to company ;
(iii) that where the appropriate Government is
satisfied after such enquiry as it may deem necessary
that the company was prevented by reasons beyond
its control from executing, providing, construction or
executing dwelling houses or amenities or any
building or work within the time specified in the
agreement, the appropriate Government may extend
the time of that purpose by a period not exceeding
one year at a time so however that the total period of
extension shall not exceed three years.
(iv) that if the company commits a breach of any of
the conditions provided for in the agreement, the
appropriate Government may make an order
declaring the transfer of the land to the company as
null and void whereupon the land shall revert back to
the appropriate Government and directing that an
amount not exceeding one-fourth of the amount paid
by the company to the appropriate Government as
the cost of acquisition under clause (1) of Section 41
of the Act shall be forfeited to the appropriatePage 30 of 72
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government as damages and the balance shall be
refunded to the company, and the order so made
shall be final and binding.
(v) that if the company utilises only a portion of the
land for the purpose for which it was acquired and
the appropriate Government is satisfied that the
company can continue to utilise the portion of the
land used by it even if the unutilised part thereof is
resumed, the appropriate Government may make an
order declaring the transfer of the land with respect
of the unutilised portion thereof as null and void
whereupon such unutilised portion shall revert back
to the appropriate Government and directing that an
amount not exceeding one-fourth of such portion of
the amount paid by the company as cost of
acquisition under clause (1) of Section 41 of the Act
as is relatable to the unutilised portion shall be
forfeited to the appropriate Government as damages
and that balance of that portion shall be refunded to
the company and that order so made shall, subject to
the provisions of clause (vi), be final and binding.
(vi) that where there is any dispute with regard to the
amount relatable to the unutilised portion of the land,
such dispute shall be referred to the court within
whose jurisdiction the land or any part thereof is
situated and the decision of that court thereon shall
be final.
(2) Where the company commits a breach of any of
the terms of the agreement, the appropriate
Government shall not make an order under clause(vi)
or clause(v) of sub-rule (1), unless the company has
been given opportunity of being heard in the matter.
(3) The appropriate Government shall consult the
Committee before according any sanction under
clause (i) of sub-rule (i) or extending the time under
clause(iii) or making any order under clause (iv) or
clause (v) of that sub-rule.”
53. A careful reading of the provisions contained in Sections
39, 40 and 41 in Part-VII of the Act, 1894 and Rules, 1963
made thereunder indicates that previous inquiry under
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Section 40 was required to be made prior to the issuance of
the notification under Section 4 of the Act, 1894. Section 39
clearly provides, insofar as the State of Gujarat is concerned,
that the provisions of Sections 4 to 16 (both inclusive) shall
not be put in force to acquire land for any company unless two
pre-conditions are fulfilled; namely, (i) with the previous
consent of the appropriate Government (State Government
herein) and (ii) the agreement was executed by the company.
It is clear that these conditions were to be fulfilled before
publication of the notification under Section 4 of the Act,
1894, for acquisition of land for a company within the State of
Gujarat.
54. Further, the inquiry as contemplated under Section 40
was required to be held by the Collector, taking into
consideration of the requirement of Clause (a), (aa) and (b), as
the case may be. For the purposes of present case, thus, the
inquiry was required to be held to ascertain the purpose
stated in Clause (aa) of Section 40. Section 40 further
provides for the satisfaction to be recorded by the State
Government after consideration of the inquiry report
submitted about the proposed acquisition being for any of the
purposes referred in Clause (a) or Clause (aa) or Clause (b) of
Sub-clause (1) of Section 40. Upon such satisfaction being
recorded, the appropriate Government would require the
company to enter into an agreement, which shall include the
terms and conditions of the matters included in Clause (a) to
(b) of Section 40. On the satisfaction arrived at by the
appropriate Government on both, i.e. report of the officer
making inquiry under Section 40 and that all required terms
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and conditions having been included in the agreement, the
question of grant of previous consent under Section 39 would
arise, which shall have to be recorded before the publication
of the notification under Section 4 of the Act, 1894, for
acquisition under Part-VII in the State of Gujarat.
55. Rule 3 of the Rules, 1963 provides for constitution of a
Land Acquisition Committee for the purpose of advising the
appropriate Government in relation to acquisition of land
under Part-VII of the Act, which was to be notified in the
official gazette, to be called as the Land Acquisition
Committee. Sub-rule (5) of Rule 3 casts a duty upon the
Committee to tender its advise within one month from the
date on which it is consulted, on all matters relating to or
arising out of acquisition of land under Part-VII of the Act. The
appropriate Government would then proceed to take into
consideration all matters noted hereinabove including the
advise of the Land Acquisition Committee to record its
satisfaction before initiation of acquisition proceedings, with
regard to the matters provided in Rule 4.
56. A bare perusal of Sub-Rule (1) of Rule 4 read with Rule 3
of the Rules, 1963 clearly shows that there was a requirement
for recording satisfaction of the appropriate Government,
namely the State Government for our purposes, with regard to
all factors enumerated in Part-VII of the Act (Sections 40 and
41) and Rule 4 of the Rules, 1963, before initiation of the
acquisition proceedings. The Land Acquisition Committee
notified under Rule 3 was to work only in advisory capacity
and it did not have any decision making power so as to record
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the satisfaction of the State Government (appropriate
Government) in the matter of acquisition of land for
companies under Part-VII of the Act, 1894.
57. Rule 5 of the Rules, 1963 provides the requirement of
incorporating certain clauses in the agreement which includes
that the company shall not utilize the land in question for any
purposes other than that for which it is acquired, except with
the previous sanction of the appropriate Government. Clause
(iv) contained in Sub-Rule (1) of Rule 5 provides the
consequence of breach committed by the Company of any of
the conditions provided in the agreement and empowers the
appropriate Government to declare the transfer of the land to
the company as null and void whereupon the land shall revert
back to the appropriate Government and recovery or
forfeiture of cost of acquisition paid by the company to the
appropriate Government. Clause (v) of Sub-Rule (1) of Rule 5
empowers the appropriate Government to make an order
declaring the transfer of the land with respect to unutilized
portion of the acquired land as null and void whereupon such
unutilized portion shall revert back to the appropriate
Government. A reading of Rule 5, thus, makes it clear that the
land acquired for the purposes of the company under Part-VII
shall have to be utilized only for the purpose for which it was
acquired and cannot be utilized for any other purposes, except
with the previous sanction of the State Government and the
State Government is authorized to make an order to revert the
land to it, if unutilized whether whole or in part.
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58. At this juncture, we may note that in the instance case, it
is evident that the land in question could not be utilized for
the purposes for which it was acquired because of the interim
order of status-quo passed by this Court in the year 2003. It
was argued by Ms.Garima Malhotra, learned advocate
appearing for the respondent No.2 – company that the
purpose for which the land in question had been acquired in
the year 2000 could not be achieved because of the
intervention of this Court and the respondent No.2 – company
cannot be saddled with any liability for the same. Even in
accordance with Rule 5(1)(i), it is permissible for the company
to seek sanction of the appropriate Government to utilize the
land in question for the purposes other than that for which it
was acquired. The petitioners, therefore, cannot be permitted
to contend that since the land in question cannot be utilized
for the purposes for which it was acquired in the year 2000, it
was to be reverted back to the petitioners. The compensation
for acquisition of the land in question had already been
deposited by the respondent No.2 – company in the year 2002
itself and the possession of the land in question is with the
respondent No.2 – company. No infirmity or illegality can be
attached to the process of acquisition. The writ petition, thus,
deserves to be dismissed outrightly.
59. To deal with the above submissions, at this stage, we
would like to take note of the legal position through the
decisions of the Apex Court in the field, i.e. acquisition of
lands for the purposes of private company under Part-VII. The
first decision placed before us by the learned counsel for the
petitioners is a three Judges judgment of the Apex Court
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rendered on 21.01.1975, in case of State of Gujarat and
another vs. Patel Chaturbhai Narsibhai and others,
reported in 1975 (1) SCC 583. In the said case, the
challenge was to the acquisition notifications under Sections 4
and 6 of the Land Acquisition Act, 1894 for a company.
Referring to the decision of the Apex Court in R. L. Arora v/s.
State of U.P. (AIR 1962 SC 764), it was noted therein that
in case of acquisition for a company, the Government could
give its consent if the acquisition was needed for some work
which was likely to prove useful to the public. It was case of
the State appellant before the Apex Court therein that after
notification under Section 4 of the Act, 1894 was published on
4th March, 1961, an agreement dated 22.08.1961 was
executed between the State Government and the acquiring
company in accordance with the provisions contained in
Section 41 of the Act. Referring to Section 40 amended vide
Amendments of 1962 and the Rule 4 of 1962 Rules, it was
noted by the Apex Court that the provisions require for
making an inquiry and recording of satisfaction by the
Government. It was contended on behalf of the State therein
that inquiry was held prior to the notification under Section 4
of the Act, 1894 and the agreement was executed after the
State Government had given consent to the acquisition.
60. The respondent land owner had challenged the
Notifications under Sections 4 and 6 of the Act, 1894 on the
ground that the inquiry conducted under Rule-4 of 1963 Rules
had not been held lawfully, inasmuch as, the inquiry under the
said rule contemplated giving opportunity to the owner of the
land to make effective representation against the proposed
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acquisition. On behalf of the State, it was argued, in rebuttal,
that the inquiry under Rule-4 is administrative and the owner
of the land was not entitled to be given opportunity to be
heard during the course of such inquiry. The Collector had
submitted a report after inquiry among other matters that the
company had made all reasonable efforts to get such land by
negotiations with the persons interested therein on payment
of reasonable price and such efforts had failed.
61. The Apex Court while referring to the Rule 4 of 1963
Rules has held in Patel Chaturbhai Narsibhai (supra) that
in such an inquiry, the company has to show that it had made
negotiations with the owners of the land and the owners of
the land are, therefore, entitled to be heard for the purpose of
proving or disproving the reasonable efforts of the company to
get such lands by negotiations. It was observed that the
nature of objections under Rule 4 of the Rules, 1963 are not
one of the objections which can be preferred under Section 5-
A of the Act, 1864. It was noted in the said case that though
there was an inquiry under Section 5-A of the Act, but no
inquiry under Section 40 of the Act to enable the Government
to give its consent was held before the agreement between
the State and the company under Section 41 of the Act was
executed.
62. The question was also to the effect of notifying the
agreement under Section 41 of the Act, subsequent to the
notification under Section 4 of the Act, 1894 being in violation
of the provisions contained under Section 39 of the Act.
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63. In light of the said controversy, it was held by the Apex
Court in paragraph Nos. 18, 19, 20, 21 and 22 as under :-
“18. The Land Acquisition (Gujarat Unification and
Amendment) Act, 1963 which amended Section 39 of the
Central Act enacted that the provisions of Sections 4 to 37
inclusive of the Act shall not be put in force in order to
acquire land for any company, unless there is previous
consent of the State Government or the company shall
have executed the agreement. On behalf of the State it
was said that the agreement in the year 1961 would
suffice. This is only to be stated to be rejected because the
notification under Section 4 of the Act was cancelled by
the State on September 28, 1965. Thereafter fresh
proceedings started. Further, the agreement in the year
1961 did not survive, because a fresh agreement was
made on January 13, 1969, which was published on
January 18, 1969.
19. The provisions contained in Sections 38 to 41 of the
Act indicate that the provisions of Sections 4 to 37 of the
Act cannot be applied to acquire land for any company
unless the State Government gives previous consent
thereto and the company executes an agreement with the
State as mentioned in Section 41 of the Act. Second,
Section 40 of the Act indicates that the State Government
cannot give consent unless there is an enquiry as provided
in that section. It is noticeable that any enquiry under
Section 5-A of the Act is not an enquiry within the
meaning of Section 40 of the Act. The reason is that the
Gujarat Amendment Act, 1963, being Gujarat Act 20 of
1965 deleted the words “either on the report of the
Collector under Section 5-A, sub-section (2) or” from
Section 40 of the principal Act. Similarly, in Section 41 of
the Act as a result of the Gujarat Amendment Act the
words “either on the report of the Collector under Section
5-A, sub-section (2) or” were deleted. The effect of the
deletion of those words by the Gujarat Amendment Act is
that the enquiry under Section 5-A is not an enquiry
within the meaning of Section 40 of the Act.
20. In the present case, the enquiry under Rule 4 of the
Land Acquisition (Companies) Rules was held before the
notifications under Sections 4 and 6 of the Act were issued
in the year 1965. The enquiry pursuant to the notifications
in the year 1961 and previous to the fresh notifications in
1965 is of no effect in law for two principal reasons. First,
the 1961 notification was cancelled, and, therefore, all
steps taken thereunder became ineffective. Second, the
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opportunity to the land owner respondent, and, therefore,
the enquiry is invalid in law.
21. The affidavit evidence on behalf of the Government
was that an enquiry was held under Section 40 of the Act
in the month of July 1965 and there was a report on
August 25, 1965. The enquiry under Section 40 of the Act
is equally of no avail for similar reasons why the enquiry
under Rule 4 in 1961 is of no effect in law.
22. For these reasons, we hold that the acquisition
proceedings are vitiated. There was no compliance with
the provisions of Section 39 of the Act. There was no prior
agreement between the State and the company before
provisions contained in Sections 4 to 37 were put into
force. The enquiry under Section 5-A of the Act in the
present case does not satisfy the provisions contained in
Rule 4 of the Companies Acquisition Rules. The owners of
the land are entitled to opportunity of being heard in an
enquiry under Rule 4 and enquiry under Section 40 of the
Act. No such opportunity was given to the owners.”
64. A perusal of the above noted paragraphs of the decision
in Patel Chaturbhai Narsibhai (supra), indicates that
emphasis by the Apex Court was on the inquiry within the
meaning of Section 40 of the Act, 1894 prior to the publication
of notification under Section 4 of the Act, 1894, for the reason
of the Gujarat Amendment Act No. 20 of 1965, whereby in
Section 39 of the Act, 1894, Section 4 was incorporated to
provide that the provisions of Sections 4 to 16 (both inclusive)
and Sections 18 to 37 (both inclusive) of the Act, shall not be
put in force unless two pre-conditions of obtaining previous
consent of the State Government and the execution of the
agreement under Section 41 of the Act by the company, are
fulfilled. It was clarified that the effect of deletion of the words
“either of the report of the Collector under Section 5-A of sub-
section(2) or” by the Gujarat Act No. 20 of 1965 would be that
the inquiry under Section 5-A is not an inquiry within the
meaning of Section 40 of the Act, 1894.
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65. It was held that the acquisition proceedings were
vitiated for non-compliance of the provisions of Section 39 of
the Act noticing that there was no prior agreement between
the State and the Company before the provisions contained in
Sections 4 to 37 were put into force and that the inquiry as
contemplated under Rule 4 of the Companies Acquisition
Rules, 1963 was not held giving opportunity of hearing to the
land owners.
66. In another decision of the Apex Court in Devinder
Singh and Others v/s. State of Punjab and Others
[(2008) 1 SCC 728], relied by the learned counsel for the
petitioners, the acquisition proceedings for private company
was challenged under the provisions of the Land Acquisition
Act, 1894 being a colourable exercise of powers on the part of
the State Government. The acquisition notification under
Section 4 extracted by the Apex Court in the judgment
incorporated a statement that the acquisition was being made
for a public purpose, namely for setting up the project of the
company namely M/s. International Tractors Ltd. It was noted
by the Apex Court that the acquisition of the land at the
instance of a private company included in the expression
“company” defined under Section 3(e) is distinguishable from
the acquisition by any wing of the State or Government
Company for a public purpose, where different procedures are
to be adopted, in exercise of its power of eminent domain to
acquire the property subject to existence of public purpose
other than on an application filed at the instance of a
company” where procedure is to be adopted therefor are laid
down in Part-VII of the Act.
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67. It was noted by the Apex Court that the conduct of the
State as to how it intended to deal with such a requisition by a
private company, is a relevant factor. The action of the State
provides for an important condition to consider as to whether
the purpose wherefor the company requested it for acquisition
of the land is a public purpose and/or which could be made at
the public expense either as a whole or in part, wherefor
evidently provisions laid down in Part-II shall be resorted to.
However, on the other hand, if the State forms an opinion that
the acquisition of the land at the instance of the company may
not be for public purpose or, the expense to be incurred
therefor either in whole or in part, shall not be borne by the
State, the procedure laid down in Part-VII thereof have to be
resorted to.
68. It was, thus, held that on an application filed for
acquisition of land at the instance of the company “there is a
requirement of making an inquiry for forming an opinion as to
the provisions of the Act 1894 to be resorted to for the
purposes of acquisition”, i.e. whether the acquisition is to be
held in Part-II for public purposes or Part-VII for a private
company. The previous consent of the appropriate
Government, execution of the agreement, previous inquiry
before the consent is accorded, publication of the agreement,
are the requirements which have to be resorted to in
accordance with the procedure laid down under Part-VII for
acquisition of the land at the instance of a private company
which are exhaustive.
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69. It was noted that the provision of Section 44-B of the
Act, 1894 provides for a statutory injunction that no land shall
be acquired except for the purposes mentioned in Clause (a)
of sub-section(1) of Section 40 for a private company which is
not a government company. Explanation to Section 44-B
further provides that “private company” and “government
company” shall have the meaning respectively assigned to
them in the Companies Act, 1956. The expression “company”
defined under Clause-e(i) of Section 3 of the Act, 1894,
however, would include a ‘company’ defined in Section 3 of
the Companies Act, 1956 other than the company referred to
in Clause (cc). The result is that the State has been
empowered to acquire land also for the companies” and for
purposes other than the public purposes.
70. The Apex Court in Devinder Singh (supra) has further
proceeded to take note of the rules of the Land Acquisition
(Companies) Rules, 1963 to note that the rules have been
framed prescribing mode and manner in which the State vis-a-
vis even the company should be proceeded. It was observed
that a bare perusal of sub-rule(1) of Rule 4 categorically
states that the same shall be applicable where acquisition of
land is to be made for the company envisaged under Part-VII
and Rule 4 mandates the appropriate Government to arrive at
a satisfaction in regard to the factors enumerated therein. It
was observed that :-
“18. The State is also enjoined with a duty to make an
inquiry wherefor an opportunity of hearing to the
company is required to be given. When the State intends
to proceed with the acquisition of land it must form anPage 42 of 72
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opinion that the lands which are going to be acquired are
not good agricultural lands. The Rules by and large lay
down a statutory policy in that behalf and question of
ignoring the same by the State does not arise.
19. We would consider the question as to whether Rule 4
aforementioned is mandatory or directory or at what stage
an inquiry is required to be made, a little later. But we
must record that it is not the case of the State that Rule 4,
despite the fact that acquisition is made in terms of Part
VII of the Act, can be ignored.”
71. In the facts of the said case, it was noted that the High
Court had proceeded on the basis that the State had formed
an opinion that the purposes for which the provisions of the
Act were taken recourse to was a public purpose, the
provisions of Part-II would, therefore, apply. Taking note of
the dictionary meaning of “public purposes” as contained in
Blacks Law Dictionary and the meaning of the words “public
policy” as discussed by the Apex Court in Gherulal Parakh
v/s. Mahadeodas Maiya (AIR 1959 SC 781), it was held in
paragraph No. ’23’ as under :-
“23. We need not go into the nicety of the question,
keeping in view the fact that there are binding precedents
in that behalf that in a case of acquisition for a public
company, public purpose is not to be assumed and the
point of distinction between acquisition of lands under
Part II and Part VII would be the source of funds to cover
the cost of acquisition. This Court in Pratibha Nema
[(2003) 10 SCC 626] held: (SCC p. 641, para 21)
“21. … In other words, the second proviso to
Section 6(1) is the main dividing ground for the two
types of acquisition.”
72. It was further held in paragraph Nos. ’38’ to ’47’ and
’52 to 53′ as under :-
“38. Satisfaction on the part of the State required to be
arrived at upon formation of opinion on the basis of
materials brought on record for the purpose of Part II ofPage 43 of 72
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the Act are different from that of Part VII. Once the
appropriate Government arrives at a decision that the land
sought to be acquired is needed for a public purpose, the
court would not go behind it, as the same may furnish a
valid argument for upholding an acquisition under Part II.
But when an acquisition is made under Part VII, the
conditions and precedents therefor as contained in the
Companies Rules must be satisfied. On the face of record,
if it can be shown that the Government had ignored the
mandatory provisions of the Act, the acquisition would
have to be struck down.
39. In Shyam Behari v. State of M.P. [AIR 1965 SC 427 :
(1964) 6 SCR 636] it was held: (AIR p. 429, para 3)
“3. … In the second place, the declaration under
Section 6 may be made that land is needed for a
company in which case the entire compensation has
to be paid by the company. It is clear therefore that
where the entire compensation is to be paid by a
company, the notification under Section 6 must
contain a declaration that the land is needed for a
company. No notification under Section 6 can be
made where the entire compensation is to be paid by
a company declaring that the acquisition is for a
public purpose, for such a declaration requires that
either wholly or in part, compensation must come out
of public revenues or some fund controlled or
managed by a local authority.”
40. Distinction between acquisition under Part II and Part
VII is self-evident. The State was not only obligated to
issue a notification clearly stating as to whether the
acquisition is for a public purpose or for the Company.
Section 6 categorically states so, as would appear from
the second proviso appended thereto.
41. A declaration is to be made either for a public purpose
or for a company. It cannot be for both.
42. It is furthermore trite that the Land Acquisition Act is
an expropriatory legislation. (See Hindustan Petroleum
Corpn. Ltd. v. Darius Shapur Chenai [(2005) 7 SCC 627]
and Indore Vikas Pradhikaran v. Pure Industrial Coke &
Chemicals Ltd. [(2007) 8 SCC 705 : (2007) 8 Scale 110] )
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
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payment of compensation are principal requisites therefor.
In the case of acquisition of land for a private company,
existence of a public purpose being not a requisite
criterion, other statutory requirements call for strict
compliance, being imperative in character.
44. Another question which arises for our consideration is
as to whether Rule 4 of the Companies Rules is mandatory
or directory in nature. The High Court held it to be
directory.
45. Rule 4 of the Rules employs the word “shall” not once
but twice. Ordinarily, it is imperative in character. No
reason has been shown before us as to why it should be
held to be directory provision particularly when the Land
Acquisition Act is an expropriatory legislation.
46. In State of Gujarat v. Patel Chaturbhai Narsibhai
[(1975) 1 SCC 583 : AIR 1975 SC 629] this Court held:
(SCC pp. 586-87, para 15)
“15. The contention of the State that the enquiry
under Rule 4 is administrative and that the owner of
the land is not entitled to be given an opportunity to
be heard at the enquiry cannot be accepted for these
reasons. The enquiry under Rule 4 shows that the
Collector is to submit a report among other matters
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. The persons interested
therein are the owners of the land which is proposed
to be acquired. The company at such an enquiry has
to show that the company made negotiations with the
owners of the land. The owners of the land are,
therefore, entitled to be heard at such an enquiry for
the purpose of proving or disproving the reasonable
efforts of the company to get such land by
negotiation. The contention on behalf of the State
that the owners of the land will get an opportunity
when an enquiry is made under Section 5-A of the Act
is equally unsound. Section 17 of the Act provides
that the appropriate Government may direct that the
provisions of Section 5-A shall not apply, and if it
does so direct a declaration may be made under
Section 6 at any time after the publication of the
notification under Section 4 of the Act. Therefore, the
enquiry under Section 5-A may not be held.”
47. In General Govt. Servants Coop. Housing Society Ltd.
v. Wahab Uddin [(1981) 2 SCC 352] this Court held: (SCC
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pp. 357-58, para 13)
“13. Sub-rule (1) requires the Government to direct
the Collector to submit a report to it on the matters
enumerated in Clauses (i) to (vi) of sub-rule (1) which
is for the benefit of the company. The purpose is to
avoid acquisition of land not suitable for a company.
Clause (ii) of sub-rule (1) requires that the company
has to make all reasonable efforts to get such lands by
negotiation with the person interested therein on
payment of reasonable prices and that such efforts
have failed. The purpose of Clause (ii) seems to be to
avoid unnecessary land acquisition proceedings and
payment of exhorbitant prices. The purpose of
Clauses (iii), (iv) and (v) are obvious. The purpose of
Clause (vi) is to avoid acquisition of good agricultural
land, when other alternative land is available for the
purpose. Sub-rule (2) of Rule 4 requires the Collector
to give reasonable opportunity to the company so that
the Collector may hold an inquiry into the matters
referred in sub-rule (1). The Collector has to comply
with Clauses (i), (ii) and (iii) of sub-rule (2) during the
course of the inquiry under sub-rule (1). The Collector
under sub-rule (3) then has to send a copy of his
report of the inquiry to the appropriate Government
and a copy of the report has to be forwarded by the
Government to the Land Acquisition Committee
constituted under Rule 3 for the purpose of advising
the Government in relation to acquisition of land
under Part VII of the Act, the duty of the Committee
being to advise the Government on all matters
relating to or arising out of acquisition of land under
Part VII of the Act [sub-rule (5) of Rule 3]. No
declaration shall be made by the appropriate
Government under Section 6 of the Act unless the
Committee has been consulted by the Government
and has considered the report submitted by the
Collector under Section 5-A of the Act. In addition,
under Clause (ii) of sub-rule (4) of Rule 4, the
company has to execute an agreement under Section
41 of the Act. The above consideration shows that
Rule 4 is mandatory; its compliance is no idle
formality; unless the directions enjoined by Rule 4 are
complied with, the notification under Section 6 will be
invalid. A consideration of Rule 4 also shows that its
compliance precedes the notification under Section 4
as well as compliance with Section 6 of the Act.”
*** *** ***
52. The decision of this Court in Somawanti holding
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that the stage at which Rule 4 is required to be
complied with is not the stage prior to issuance of a
notification under Section 4 of the Act, but
declaration under Section 6 does not appear to be
correct from the decisions of this Court in Patel
Chaturbhai Narsibhai and Wahab Uddin, the earlier
binding precedent, with utmost respect, having not
been taken into consideration in its entirety.
53. In Abdul Husein Tayabali & Others v. State of
Gujarat, this Court observed : (AIR p.437, para 11)
“11. …Next it was urged that the inquiry under Rule
4 has to be held after the notification under section 4
is issued and not before and therefore the inquiry
held by Master was not valid. We do not find
anything in Rule 4 or in any other Rule to warrant
such a proposition. The inquiry, the report to be
made consequent upon such inquiry, obtaining the
opinion of the Land Acquisition Committee, all these
are intended to enable the Government to come to a
tentative conclusion that the lands in question are or
are likely to be needed for a public purpose and to
issue thereafter section 4 notification.”
73. It was, thus, held by the Apex Court in Devinder Singh
(supra), that the Land Acquisition Act being an expropriatory
legislation must be strictly construed. The provisions of Rules,
1963 cannot be held to be directory particularly when the
Land Acquisition Act is an expropriatory legislation. The use
of word ‘shall’ in Rule 4 of the Rules, 1963 (twice) makes it
clear that it is imperative in nature. Under the scheme of the
Act and the Rules framed thereunder, it is mandatory that
before issuance of Section 4 notification (for the State of
Gujarat), the procedure contemplated by Rule 4 of the Rules is
complied with. The inquiry under Rule 4 must precede the
notification under Section 4, inasmuch as, the report to be
made consequent upon such inquiry, obtaining the opinion of
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the Land Acquisition Committee, are all intended to enable
the Government to come to a tentative conclusion that the
lands in question are likely to be needed for the purpose for
which the request is received.
74. The mandatory requirement of making a previous
inquiry under Section 40 of the Act, 1894 read with Rule 4 of
the Rules, 1963 before publication of Section 4 notification, is
evident from the scheme of the Act contained in Part-VII
where acquisition is for private company. To obtain previous
consent of the appropriate Government under the scheme of
Section 39, it provides that the provisions of Sections 4 to 37
(both inclusive) shall not be invoked to acquire land for any
company, unless the requirement of previous inquiry and an
agreement having been executed between the Government
and company, have been fulfilled.
75. Keeping in mind the above legal position, we are
required to take note of the facts of the instant case, noticed
from the original record of acquisition produced before us.
From a perusal of the original record, it may be noted that the
company, namely VXL India Limited (Digjam Woollen Mills)
had sent a request vide letter dated 18.01.1995 to the
Collector requesting for acquisition of Revenue Survey
Nos.150 and 151/3, the plots adjacent to the boundary of the
factory named as “Digjam Woollen Mills” at Jamnagar. It is
stated therein that for implementation of the expansion
programme, first phase of which had already been
commenced in the existing factory area, additional land was
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required to provide other utilities like power, water, effluent
treatment etc. to enable the company to complete the first
phase as per its requirement. Upon search, the company
found the above noted two small plots as most suitable. It is
stated therein that the company would pay adequate
compensation to the existing owners of the plot as decided
under Rules. Pertinent is to note that there is absolutely no
assertion in the said request letter that the company made
any effort to negotiate with the land owners for sale of the
lands in question in their favour. The statement of lands
required as mentioned at the foot of the letter is Survey
No.150 (2.27 Acres); Survey No.151/3A (3.11 Acres) and
Survey No.151/3B (2.9 Acres), total 8.28 Acres.
76. It seems that upon receipt of the said request letter
itself, the Collector, Jamnagar and the representative of the
acquiring company, namely VXL India Limited (Digjam
Woollen Mills) had signed an agreement on 17.02.1995, which
fact is also admitted in the affidavit filed on behalf of the
Deputy Collector. It is, thus, evident that the agreement
preceded any inquiry required to be made by the Collector
under Section 40 read with Rule 4 and was simply executed
within one month of the request made by the company. There
is absolutely no averment in the affidavit filed on behalf of the
State respondents that any inquiry was conducted prior to the
execution of the agreement dated 17.02.1995.
77. It seems that the wisdom later dawned on the officers of
the State and another agreement dated 02.06.1999 was
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executed between the acquiring company and the Collector,
Jamnagar, which is on record having been sent by the
company along with the communication dated 02.06.1999,
with the request to forward the same to the Revenue
Department, Gandhinagar for doing the needful. The original
copy of the agreement contains a noting and numbering of the
Revenue Department, Gandhinagar dated 11.06.1999.
78. The voluminous original record contained in four files
containing loose papers has been produced before us by the
learned Assistant Government Pleader appearing for the State
respondents, wherein we found another communication dated
19.03.1997 sent by the acquiring company to the Collector to
state that the company had made sincere efforts to purchase
the surrounding lands but their efforts were not successful for
various reasons. One of the reasons stated therein was that
there were disputes with respect to the lands in question and
owners were demanding payment mostly in cash and were not
willing to accept the full amount of sale price by cheque and
hence, it became virtually impossible for the company to
purchase the proposed lands directly from the parties. In
furtherance of the said letter, another communication dated
29.04.1997 sent by the Company to the Deputy Collector,
Jamnagar is on record wherein there is a reference of some
private persons visited the company and tried to make
negotiations though they did not have possession of the land.
79. One of the files contains various communications
between the Collector, Deputy Collector and the Section
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Officer of the Revenue Department, Gandhinagar. Upon going
through the said files, we may note that one file contains
Office notings. The first Office noting pertaining to the
acquisition in question is dated 26.05.1995 wherein certain
documents were sought from the Collector. It is evident
therefrom that the file for initiation of the acquisition
proceedings was moved before the Revenue Department soon
after the execution of the first agreement dated 17.02.1995
between the acquiring company and the Collector, Jamnagar.
The said office noting, which is in vernacular, states that :-
“૫/૮
મ.વિ./ઘકલેક્ટરશ્રી જામનગરના તા.૩-૫-૯૫ ના પત્રથી બી.એક્સ.એલ.-
ઈન્ડીયા લી. તરફથી મોજે જામનગરની હે-આ-ચોમી. ૩-૩૦-૮૩ જમીન સંપાદન
કરવાની દરખાસ્ત અત્રે મળેલ છે. દરખાસ્ત અધૂરી વિગતો વાળી છે. પાન ૫/૫
પ્રમાણે વિગતો મંગાવીએ(સહી-અવાચ્ય)
૨૬/૫/૯૫
સે.અ.શ્રી (ઘ) (સહી-અવાચ્ય)
૨૯/૫/૯૫
ઉ.સ.શ્રી (જ.સં.) (સહી-અવાચ્ય)
૩૧/૫/૯૫
ના.સ.શ્રી (જ.સં.) (સહી-અવાચ્ય)
૧/૬/૯૫ ”
80. The translated version of the above quoted portion,
reads thus:-
“(illegible) ‘GH’
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The proposal qua the letter dated 03/05/1995 of
the Collector, Jamnagar for aquiring the land
measuring 3-30-83 (Hec.-Aar-Sq.M.) at Jamnagar
through M/s. B.X.L. India Ltd. has been received by
this office. The proposal contains incomplete details.
Details, as specified at Page No.5, have been sought.
Sd/- (illegible) 26.05.1995
Sd/- (illegible) 29.05.1995
Sd/- (illegible) 31.05.1995
Sd/- (illegible) 01.06.1995″
81. Another noting is dated 21.07.1997 wherein there is a
reference of letters of the Collector dated 03.05.1995 and
18.06.1997. It is noted therein that an inquiry under Rule 4 of
the Rules, 1963 of the Land Acquisition (Companies) Rules,
1963 was conducted by the Deputy Collector, Jamnagar, the
report of which has been forwarded by the Collector,
Jamnagar on 29.05.1997, which is in vernacular, and records
as under :-
“મ.વિ./ઘ
સાદર રજૂ ,
૨. કલેક્ટરશ્રી જામનગરનો તા. ૩/૫/૯૫ અને તા. ૧૮/૬/૯૭ અહેવાલ વંચાણે
લેવા વિનંતી. વી.એક્સ.એલ.લી. (દીગ્જામ મીલ્સ લી.) માટે જામનગરના સ.નં.
૧૫૦, ૧૫૧/૩/એ અને ૧૫૧/૩/બી ની કુલ ૩ હે .-૩૦ આરે -૮૩ ચો.મી. જમીન
સંપાદન કરીને આપવાની બાબતે તેમણે દરખાસ્ત મોકલી છે . (પૃ .૮૩/c)
૩. અરજદાર કં પની ૧૯૫૬ ની કં પની ધારા હેઠળ નોંધાયેલ કં પની છે . અને
જામનગરમાં વુલન કાપડનું ઉત્પાદન કરે છે . મીલના વિસ્તરણ કામે જમીનો સંપાદન
કરવાની જરૂરીયાત છે ; જેથી મીલની માલીકીની હાલની જમીનને લગત આવેલી
ખાનગી માલીકીની નીચે મુજબની જમીન સંપાદન કરવાની દરખાસ્ત છે .
સ.નં. ક્ષેત્રફળ હે.આરે .ચો.મી.
૧૫૦ ૧-૦૮-૨૫
૧૫૧/૩/એ ૧-૩૨-૫૪
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૧૫૩/૩/બી ૦ -૯૦-૦૪
-------
૩-૩૦-૮૩
૪. જમીન સંપાદન કં પનીઝ રૂલ્સ ૧૯૬૩ મુજબ નિયમ ૪ ની છ બાબતો અંગે
નાયબ કલેક્ટરશ્રી, જામનગરે તપાસ કરી છે , અને તેમનો અહેવાલ તા. ૨૯/૫/૯૭
ના રોજ કલેક્ટરશ્રી, જામનગરને રજૂ કરેલ છે , જે નીચે મુજબ છે .
(૧) કં પનીએ વિસ્તૃતીકરણ યોજના અમલમાં મુકી છે . પ્રથમ ચરણ ચાલુ કરેલ
છે , બીજા ચરણમાં આ જમીનોની જરૂરીયાત વીજળી, પાણી અને પ્રદુષણ
નિયંત્રણ અંગેના હેતુઓ માટે જરૂરીયાત છે .
(૨) કં પનીએ તા. ૧૪/૪/૯૭ ના રોજ ખાતેદારોને ચર્ચા-વિચારણા માટે બોલાવેલ
હતા, જેમાં કં પનીએ એક વીઘાના રૂ. બે થી અઢી લાખ રૂપીએ બારોબાર જમીનની
ખરીદી માટે પ્રયત્નો કર્યા હતા. જમીન ધારકોએ એક ચો.ફૂટના રૂ. ૧૦૦ થી ૧૨૫/-
ની માંગણી કરેલ. ફરીથી કં પનીએ તા. ૧૪/૫/૯૭ ના રોજ ખાતેદારોને વાટાઘાટો
માટે બોલાવેલ, જેમાં કં પનીએ એક ચો.ફૂટના રૂ. ૨૫/- સુધીની કિંમત ચુકવવાની
તૈયારી દર્શાવેલ હતી.
તા. ૨૦/૫/૯૭ ની મીટીંગનું પ્રોસીડીંગ સામેલ છે . આ જમીનોના સંપાદનની
દરખાસ્ત કરતાં પહેલાં ખાનગી વાટાઘાટો દ્વારા જમીન મેળવવા માટે કં પનીએ
પૂરતા પ્રયત્નો કરેલા છે . (ધ્વજ ‘D’)
(૩) સવાલવાળી જમીનો કં પનીના પ્લાન્ટની લગોલગ આવેલ છે . તેથી કં પનીના
વિસ્તૃતિકરણ માટે યોગ્ય છે .
(૪) કં પનીના જણાવ્યા મુજબ વિસ્તૃતિકરણ માટે તેમને ૩૫ હજાર ચો.મી.
જમીનની જ જરૂરીયાત છે . અને હાલ માંગણીવાળી જમીનનો વિસ્તાર ૩૩૧૦૦
ચો.મી. છે . જેથી કં પનીની જરૂરીયાત કરતાં વધુ જમીન સંપાદનની દરખાસ્ત નથી.
(૫) સવાલવાળી જમીનનો કં પની ત્વરીત ઉપયોગ કરી શકે તેમ છે કેમ કે પ્રથમ
વિસ્તૃતિકરણ તબક્કા માટે વીજળી, પાણી અને પ્રદુષણ નિયંત્રણ જેવી જરૂરીયાતો
માટે આ જમીનનો ઉપયોગ કરવાનો છે .
(૬) સદરહું જમીન સિવાય અન્ય જમીનો ઉપલબ્ધ ન હોવાથી વિસ્તૃતિકરણના
હેતુ માટે આ જમીન એકમાત્ર વિકલ્પ છે . સ.નં. ૧૫૦ અને ૧૫૧/૩ પૈકીની ખેતીની
જમીન છે પરંતુ તેમાં ખેતી થતી નથી. અને હાલ પડતર છે . છતાં, ખેતીવાડી
અધિકારીશ્રીનો તા. ૨૦/૧/૯૬ નો અહેવાલ મેળવવામાં આવેલ છે . (ધ્વજ ‘C’)
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૫. માંગણીવાળી જમીનો જામનગર શહેરી વિકાસ વિસ્તારમાં આવતી હોઈ
શહેરી જમીન ટોચ મર્યાદા ધારો લાગુ પડે છે . નાયબ કલેક્ટરશ્રી, શ.જ.ટો.મ.,
જામનગરે જણાવેલ છે કે , સ.નં.૧૫૦ અને ૧૫૧/૩ ની જમીન બાબતે કોર્ટમાં દાવો
ચાલતો હોવાથી સંપાદન બાબતે તેમનો અભિપ્રાય આપેલ નથી. આ બાબતમાં
માન્ય રહે પ્રથમ યુ.એલ.સી. પ્રભાગનું નો ઓબ્જેક્શન સર્ટીફીકેટ મેળવીએ અને
ત્યારબાદ કલમ-૪ ની વિધિસરની દરખાસ્ત મેળવીએ. (ધ્વજ ‘B’)
(સહી-અવાચ્ય)
૧૭/૭ /૯૭
(સહી-અવાચ્ય) ઉ.સ.શ્રી (જસં)
૨૧.૦૭ .૯૭
(સહી-અવાચ્ય) ના.સ.શ્રી (જસં)
૨૨/૭ /૯૭
ના.સ.શ્રી(યુએલસી)
SO/વ૧(ઢ)
(સહી-અવાચ્ય)
૨૩/૭
મ.વિ ./વ-૧(ઉ)
સાદર રજુ ,
‘ઘ’ શાખાની ઉક્ત નોંધના અનુસંધાને આ શાખાની ફા.ફ. યુએલસી-
૧૦૯૭/૧૪૭૩/ઉ/વ૧ ઉપર તા. ૨/૯/૯૭ ના પત્રથી સક્ષમ અધિ. અને નાયબ કલે.
જામનગરનો અહેવાલ મેળવવામાં આવેલ છે . જે તા. ૭ /૧૦/૯૭ તથા તા.
૨૩/૧૨/૯૭ થી વિભાગને મળેલ છે . જેની ચકાસણી કરી ફાઈલ NOC આપવા
અંગેનો નિર્ણય લેવા માટે તા. ૨/૬/૯૮ થી સચિવશ્રી (જસુ) ને રજૂ કરવામાં
આવેલ છે . જે પરત આવ્યેથી જે નિર્ણય લેવાશે તેની ‘ઘ’ શાખાને જાણ કરવામાં
આવશે.
ઉક્ત નોંધ સાથે આ ફાઈલ ‘ઘ’ શાખાને પરત કરીએ.
(સહી-અવાચ્ય) (સહી-અવાચ્ય) સે.અ.શ્રી
૧૮/૬/૯૮ ૧૮/૬/૯૮ ઘ શાખા"
82. The translated version of the above quoted portion,
reads thus :-
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“M.V. /’GH’
It is to request that;
2. Kindly refer to the report dated 03/05/1995 and
18/06/1997 of the Collector. The proposal as to
acquiring and handing over the land measuring 3 Hec
– 30 Aar – 83 Sq.mtr. in aggregate at Survey No. 150,
151/3/A and 151/3/B of Jamnagar for V.X.L. Ltd.
(Digjam Mills Ltd.) has been forwarded by him.
3. The applicant company is a company registered
under the Companies Act 1956 and it manufactures
woolen textile at Jamnagar. The land needs to be
acquired for expansion of the company’s operations.
Therefore, it is proposed to acquire the following
lands situated adjoining to the existing land owned by
the company.
Survey No. Area (Hec.-Ar-Sq.Mtr.)
150 1-08-25
151/3/A 1-32-54
153/3/B 0-90-04
-------------
3-30-83
4. The Deputy Collector, Jamnagar has conducted
an inquiry with regard to the six issues pertaining to
Rule 4 of the Land Acquisition Companies Rules,
1963 and has sent his report to the Collector,
Jamnagar on 29/05/1997, which is as under.
(1) The company has undertaken a scheme of
expansion. The first phase has been undertaken. In
the second phase, land will be required for the
purposes such as electricity, water and pollution
control.
(2) The company had called the agriculturists (land
account holders) for discussion on 14/04/1997
wherein the company made attempts for outright
purchase for consideration of Rupees two to two and
half lakh per vigha. The land owners had demanded
Rs. 100 to 125 per square feet. Again, the company
called the agriculturists for negotiation on
14/05/1997 and showed willingness to pay Rs. 25/-
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per square feet as consideration. The minutes of
meeting dated 20/05/1997 is appended herewith. The
company has made sufficient efforts to obtain these
land through private negotiations before moving the
present proposal for land acquisition.
(3) The land in question is situated adjoining the
company’s plant. Therefore, it is suitable for
company’s expansion.
(4) As informed by the company, 35 thousand
square meter of land is needed for its expansion. The
area of the land demanded at present measures at
33,100 square meter. Thus, the proposed acquisition
does not exceed the company’s need.
(5) The land in question is of immediate use for the
company as the land is to be used for the purposes
such as electricity, water and pollution control during
the first phase.
(6) As not any other land, except the land in
question, is available, the present land is the only
option. The lands at Survey No. 150 and 151/3 Paiki
are the agricultural lands, however they are not
under cultivation. At present, these lands are waste
lands. Despite that, a report dated 20/01/1996 of the
Agriculture Officer has been obtained.
5. As demanded lands fall under the Jamnagar
Urban Development area, the Urban Land Ceiling Act
is applicable. The Deputy Collector, Urban Land
Ceiling, has informed that, as a litigation with regard
to the land at Survey No. 150 and 151/3 is pending
before the Court, he has not given an opinion about
the acquisition. In this matter, if sanctioned, first a
No Objection Certificate is to be obtained from the
U.L.C. Division and thereafter proceed with a formal
proposal under Section 4.
sd/- (illegible)
With due respect,
It is state that, with reference to the stated note
of ‘GH’ Branch, a report from the Competent
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Authority and Deputy Collector, Jamnagar has been
obtained vide the letter dated 02/09/1997 on the file
no. ULC-1097/1473/U/(illegible) of this Department
and the same was received at the Department on
07/10/1997 and 23/12/1997. After verifying the file, it
has been forwarded to the Secretary, Land Reform on
02/06/1996 for taking a decision on issuing NOC. The
decision will be taken when the file is received back
and the same will be communicated to ‘GH’ Branch.
This file is returned to ‘GH’ Branch with the
above note.
Sd/- (illegible)
18/06/1999″
83. A perusal of the said office notings indicate that the
Collector was asked to submit no objection certificate from
the Urban Land Ceiling Department, for the purposes of
issuance of the notification under Section 4.
84. From the office noting made thereafter, it seems that the
matter has proceeded and clarifications were sought for and
had been received by the Revenue Department. The office
noting dated 08.03.1999 further refers to the letter dated
01.03.1999 of the Collector, Jamnagar, contents of which have
been recorded therein as under :-
“મ.વિ ./…………
સાદર રજૂ ,
(૧૦૭/પે)કલેક્ટરશ્રી, જામનગરનો તા. ૧-૩-૯૯ નો પત્ર જોવા વિનંતી.
૨. મોજે ગામ જામનગરની હે ૩-૩૦-૮૩ ચો.મી. જમીનો બી.એક્સ.એલ.
દિગ્જામના જાહેર હેતુ માટે સંપાદન કરવા સારૂ કલમ-૪ ના જાxતા ની દરખાસ્ત
રજૂ કરી છે .
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૩. પ્રશ્ન હેઠળની જમીનોનું યુ .એલ.સી.નું “ના વાંધા પ્રમાણપત્ર” મેળવેલ છે .
૪. જમીન સંપાદન કં પનીઝ રૂલ્સ ૧૯૬૩ ના નિયમ ૪ ની જોગવાઈઓ મુજબ
કં પનીએ પોતાની રીતે જમીનો મેળવવા પ્રયત્નો કરેલા છે અને વાજબી કિંમતની
ઓફર કરેલી છે પરંતુ ખાતેદારો વધુ રકમ માંગે છે . વળી જમીનો કં પની માટે
અનુકૂળ છે અને વધારે પડતી જમીનો સંપાદન થતી નથી. કં પની જમીનોનો
તાત્કાલીક ઉપયોગ કરી શકે તેમ છે અને જમીનો ખેતીલાયક નથી.
૫. ખેતીવાડી અધિકારીનું પ્રમાણપત્ર સામેલ છે .
૬. દરખાસ્ત સાથે પ્રશ્નોત્તરી ફોર્મ, ફોર્મ-ક, ૭ /૧૨ ના ઉતારા, પારા ૧૦૪ નું
પત્રક, હિસ્સા ફોર્મ, નકશા, તથા કરારનામું રજૂ કરેલ છે .
૭. ઉપરની વિગતોએ કલમ-૪ નું પ્રાથમિક જાહેરનામું મંજૂ ર કરવામાં હરકત
સરખું નથી.
૮. માન્ય રહે પા ૨૩૫ પે ૫મી
માહિતી કલમ-૪ નું જાxતા
પ્રસિધ્ધી અર્થે મોકલી આપીએ તથા પા ૨૩૭ પે
………….. પત્રની જમીન સંપાદન સમિતિને જાણ કરીએ.
(સહી-અવાચ્ય ) સે.અ.શ્રી
૮/૩/૯૯
(સહી-અવાચ્ય) ઉસશ્રી(જસં)
૦૮.૦૩.૯૯
(સહી-અવાચ્ય) નાસશ્રી(II)
૮.૩.૯૯
(સહી-અવાચ્ય) અ.પ્ર.સચિવશ્રી અને
8.3.99 અધ્યક્ષ, જમીન સંપાદન
સમિતિ"
85. The translated version of the above quoted portion,
reads thus :-
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“With due respect,
Kindly refer to the letter dated 01/03/1999 of the
Collector, Jamnagar.
2. A proposal for a notification under Section 4
with regard to acquiring, in public interest, the land
measuring (illegible) – 3-30 Hec.-Are-Sq.Mtr. at
Jamnagar for B.X.L. Digjam has been presented.
3. A No Objection Certificate of the Urban Land
Ceiling Division for the land in question is obtained.
4. The company had made attempts to acquire the
land independently and in accordance with the
provisions under Rule 4 of the Land Acquisition
Companies Rules, 1963 and a fair price has been
offered. However, the agriculturists (land account
holders) demand higher price. Moreover, the lands
are suitable for the company and land is not acquired
in excess. The company can put the lands under use
on immediate basis and the lands are not agricultural
lands.
5. A certificate issued by the Agriculture Officer is
appended.
6. Questionnaire, Form (illegible), Form 7/12,
(illegible) Sheet, Hissa Patrak, Sketches and
Agreement Deed are appended herewith.
7. With the above details, there is no objection
against issuing a preliminary notification under
Section 4.
8. If sanctioned, details under (illegible) will be
sent for publication qua the notification under
Section 4 and the certificate under (illegible) 235 will
be informed to the Land Acquisition Committee.
Sd/- (illegible)”
86. The record indicates that the said office noting dated
08.03.1999 was placed before the three member Land
Acquisition Committee, and members of the Committee made
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countersignatures on the same date, i.e. on 08.03.1999, on
the office note, itself. The proceedings for preparation of the
notification under Section 4 of the Act, 1894 was, thereafter,
conducted by the Revenue Department and a copy of the
approved draft notification from the record has been placed
before us by the learned Assistant Government Pleader to
argue that the procedure required had been followed,
inasmuch as, the inquiry report of the Deputy Collector dated
29.05.1997 after making inquiry under Rule 4 of the Rules
was placed before the Revenue Department, Gandhinagar.
The agreement dated 02.06.1999 was also executed between
the company and the Collector, Jamnagar, after approval for
acquisition granted by the Land Acquisition Committee on
08.03.1999.
87. However, nothing from the original record could be
placed before us to demonstrate that any satisfaction of the
appropriate Government (State Government) was recorded to
accord its previous consent for issuance of the notification
under Section 4 of the Act, 1894, for the acquisition of the
lands in question for the respondent No.2.
88. The most astonishing fact of the matter is that the
notification under Section 4 of the Act, 1894 was published on
10.03.1999, prior to the second agreement dated 02.06.1999
sent by the company along with its letter of the same date to
the Collector. The fact that the notification under Section 4
was published within a period of two days from the date of the
positive opinion accorded by the Land Acquisition Committee
on 08.03.1999 on the office note itself, is relevant to be taken
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note of, apart from the above facts noted hereinabove from
the original record, which make it evident that there has been
absolutely no satisfaction or previous consent of the
appropriate Government (State of Gujarat) for acquisition of
the lands in question, as per the requirement of Section 39
contained in Part-VII.
89. As noted hereinbefore, the Land Acquisition Committee
was constituted under Rule 3 to advise the appropriate
Government on matters relating to or arising out of the
acquisition of land under Part-VII of the Act. The Land
Acquisition Committee was only a consulting body and it had
no jurisdiction to take a final decision in the matter of
acquisition. The publication of the notification under Section 4
dated 10.03.1999, for acquisition of the lands in question on
the advise of the Land Acquisition Committee constituted
under Rule 3 of the Rules, 1963, itself is sufficient to hold that
the entire exercise of acquisition of lands in the instant case,
is a colourable exercise of power conferred on the appropriate
Government.
90. The facts transpired from the record which establish
that there was absolutely no application of mind on the part of
the appropriate Government much less the satisfaction
recorded by it for the purposes of acquisition, are to be culled
out as under :-
(i) The notification under Section 4 had been published on
10.03.1999, considering the report of the inquiry dated
29.05.1997 submitted by the Deputy Collector, but the
agreement which was required to be placed before the
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executed much prior in point of time, inasmuch as, it was
executed between the company and the Collector,
Jamnagar on 17.02.1995 without any previous inquiry
under Section 40 of the Act, 1894.
(ii) It was a pre-mediated exercise of power by the Collector,
Jamnagar where in an illegal manner, the Collector had
executed an agreement with the company without making
any prior inquiry, which was a pre-requisite under Section
40 of the Act, 1894 read with Rule 4 of the Rules, 1963.
(iii) The second agreement dated 02.06.1999 evidently was
executed between the acquiring Company and the
Collector after three months of the publication of the
notification under Section 4 on 10.03.1999.
(iv) From both angles, even if the first agreement dated
17.02.1995 or the second agreement dated 02.06.1999
are taken into consideration being the agreement
executed between the Company and the appropriate
Government (Collector), none of them fulfill the
requirements of Sections 39, 40 and 41 read with Rule 5
of the Rules, 1963.
(v) The result is that when the matter was placed before the
Land Acquisition Committee on 08.03.1999 for forming its
opinion to give advice to the appropriate Government,
there was no proper agreement in the eye of law.
(vi) Above all, previous consent of the Appropriate
Government on the advise of the Land Acquisition
Committee had not been obtained. There is even no
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whisper in the affidavit filed on behalf of the State
respondents of any satisfaction recorded or accorded by
the appropriate Government, namely the State
Government.
(vii) Moreover, the inquiry report dated 29.05.1997 of the
Deputy Collector which forms basis of the opinion derived
by the Land Acquisition Committee is not in conformity
with Section 40 read with Rule 4 of the Rules, 1963.
(viii) Before submitting the report dated 29.05.1997, the
Deputy Collector issued notice to the petitioners, namely
the land owners on 14.05.1997. The meeting was held on
20.05.1997 but there was a discussion only about the
price of the land. The affidavit of the Deputy Collector,
Jamnagar states that as the petitioner No.2, the Director
of the petitioner – company had objected to the
acquisition, there was no question of negotiating with him
with regard to quantum of compensation. However, other
co-owners did not agree to the price offered by the
company. It is, thus, evident that the Deputy Collector
conducted the inquiry with an intent to mediate between
the land owners and the acquiring company about the
price of the land in question. The extract of the inquiry
report dated 29.05.1997 as noted in the office note dated
18.06.1999 (extracted hereinabove) indicates that the
inquiry did not fulfill the requirement of Rule 4, wherein it
was required to ascertain that the company made all
reasonable efforts to get the land in question by
negotiation with the persons interested on payment of
reasonable price. The statement in the inquiry report that
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the company had called the agriculturists for discussion
on 14.04.1997 when attempt was made for purchase of
the land in question is a clear proof of the fact that the
company first wrote to the Collector, entered into an
agreement on 17.02.1995 for acquisition of the land in
question, and then started negotiation. This fact itself is
sufficient to prove that in the alleged negotiation by the
company held on 14.04.1997 or the negotiation made by
the Deputy Collector in the meeting held on 20.05.1997,
the land owners did not have a level playing field as they
were asked to negotiate with the hanging sword of
acquisition.
(ix) From the record, it is evident that no independent inquiry
was conducted by the Collector in conformity with the
provisions of Section 40 of the Act, 1894 read with Rule 4
of the Rules, 1963 before submitting the proposal to the
appropriate Government seeking its previous consent.
(x) For the above noted facts culled out from the original
record as also the affidavits filed on behalf of the
acquiring company and the State authorities, it is evident
that the entire acquisition under challenge is a colourable
exercise of power on the part of the State authorities.
Strict compliance of the procedure for acquisition under
expropriatory legislation was mandatory which has not
been followed rather has been breached with impunity.
91. Article 300-A of the Constitution of India is an
embodiment of right to personal property with the declaration
“no person shall be deprived of his property save by authority
of law”, which has been characterized both as a constitutional
and also human right (Reference : Lachhman Dass vs. Jagat
Ram and others – 2007 (10) SCC 448; Vidya Devi vs.
State of Himachal Pradesh and others – 2020 (2) SCC
569). Under the constitutional scheme, compliance with the
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fair procedure of law before depriving any person of his
immovable property is well entrenched. In a recent decision in
Kolkata Municipal Corporation and another vs. Bimal
Kumar Shah and others – 2024 (10) SCC 533, the Apex
Court while dealing with the right to property guaranteed
under Article-300A of the Constitution viz-a-viz compulsory
acquisition within the power of eminent domain of the State,
has observed that compulsory acquisition will still be
unconstitutional if proper procedure is not established or
followed before depriving a person of his right to property. It
was observed that undue emphasis made on provisions of
compensation to justify the power of compulsory acquisition,
as if compensation by itself is the complete procedure for a
valid acquisition, cannot be countenanced. To assume that
constitutional protection gets constricted to the mandate of a
fair compensation would be a disingenuous reading of the text
and offensive to the egalitarian spirit of the Constitution. It
was observed that the twin requirements of the acquisition
being for a public purpose and subjecting the divestiture to
the payment of compensation in lieu of acquisition, although
not explicitly contained in Article-300A, but they have been
read in and inferred as necessary conditions for compulsory
deprivation to afford protection to the individuals who are
being divested of property.
92. It was held that the constitutional right to property must
be given meaningful renditions where larger right to property
is seen as comprising intersecting sub-rights, each with the
distinct character but interconnected to constitute the whole.
These sub-rights weave themselves into each other and, as a
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consequence, State action or the legislation that results in the
deprivation of private property must be measured against this
Constitutional net as a whole, and not just one or many of its
strands. Para 30, 31 and 32 of the judgment elaborate on
these seven sub-rights which may be procedures, but they
constitute real content of the right to property under Article-
300A, non-compliance of which will amount to violation of the
right, making the acquisition process susceptible to challenge.
93. It was, thus, held that non-compliance of the procedure
in the exercise of power of eminent domain which results in
compulsory deprivation of private property is fetter and would
make the whole process being without the authority of law,
violating the individual right to property protected under
Article – 300A of the Constitution.
94. There is one more aspect of the matter. The land in
question has been acquired for the purposes of expansion of
the factory run by the respondent – Company, namely Digjam
Woollen Mills, which was running adjacent to the lands in
question at the relevant point of time. As on date, the factory
is not in existence and the lands over which the factory
premises situated, has been sold by the respondent –
company. The result is that the purpose for which the land in
question was acquired stands frustrated with the passage of
time. The land in question, thus, cannot be utilized for the
purpose for which it was acquired.
95. In Devinder Singh (supra), it was clarified by the
Apex Court that acquisition for public purpose or for a
company cannot be inter-changed. The appropriate
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Government is required to form a clear opinion before
proceeding to make a declaration about acquisition of any
land at the instance of a company, whether the acquisition is
for a public purpose or it is for a company, inasmuch as, there
can be no declaration that acquisition is for a public purpose
and for the company, as it cannot be for both. It was held that
once it is clear that the acquisition is made under Part-VII for
a company, the conditions precedents therefor as contained in
the Rule, 1963, must be satisfied. It, thus, becomes relevant to
examine as to how the process was conducted by the State
Government in the instant case.
96. A bare reading of the acquisition notifications published
under Sections 4 and 6 of the Land Acquisition Act, 1894, in
the instant case, indicates that the purposes for which the
lands in question was stated to have been acquired therein,
was termed as “public purpose”. The notification under
Section 6 dated 13.04.2000 records that the Government of
Gujarat had recorded satisfaction after considering the report
of the Assistant Collector, Jamnagar under Sub-section (2) of
Section 5A of the Land Acquisition Act, 1894 and that the
lands are needed to be acquired at the public expenses for the
purposes specified in the schedule. The schedule incorporates
“the public purpose for which the lands are needed”, and
elaborates the purpose as “establishing expansion project
related utilities, effluent plant and other infrastructure
facilities for Birla VXL Limited (Digjam Limited)”.
97. Thus, it is evident that the understanding of the State
authorities dealing with the acquisition in question at the
relevant point of time, was that “public purpose” and “purpose
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for a company” were inter-changeable. The statement in the
declaration under Section 6 dated 13.04.2000 that the
Government of Gujarat was satisfied that the lands in question
were needed for public purposes at the public expenses after
considering the report of the Assistant Collector under Section
5-A(2) itself, is sufficient to hold that the entire acquisition
proceedings were conducted as if the land in question was
needed for a public purpose for which procedure under Part-II
was required to be followed. This lack of understanding of
distinction between the procedure prescribed in Part-II and
Part-VII of the Act, 1894 at the ends of the State authorities
dealing with acquisition in question, itself is a clear proof of
the illegal exercise of power on the part of the State
authorities in dealing with the matter where request for
acquisition of a private land was made by a private company.
98. We may also note the arguments of Ms.Garima
Malhotra, learned advocate appearing for the respondent –
company that under the terms of the agreement executed
between the respondent – company and the Collector, in light
with Rule 5 of the Rules, 1963, it is open for the respondent
company to seek previous sanction of the State Government to
use the acquired land for any purpose other than for which it
was acquired. The submission is that though the purpose for
which the land in question was acquired had been frustrated
with the passage of time, but the respondent company cannot
be made liable for non-utilization of the land in question,
which is a force majeure on account of the interim order
granted by this Court in the present petition. The contention
is that the petitioners/landowners cannot be given undue
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benefit of the protection granted by this Court under the
interim order for maintaining status-quo.
99. Considering the above, we posed a question to ourselves
as to whether the lands in question can be utilized by the
Company or it will revert back to the State Government to be
utilized for any other purposes than for which it was acquired,
had we reached at the conclusion that the procedure
prescribed by law had been followed, though we have not
been able to.
100. The present acquisition is for a private company. As per
the terms of the agreement, the lands in question if not utilized
for the purposes for which it was acquired, the State
Government can resume the unutilized land or part thereof, by
giving notice and opportunity of hearing to the company, on
the ground of breach of the terms of the agreement. A further
question is as to whether the State can utilize the lands in
question for any other purposes than for which it is acquired.
101. Section 16 of the Land Acquisition Act, 1894 which is
made applicable only on compliance of Section 39 contained
in Part-VII in the case of acquisition for a private company,
provides as to when and how the acquired land would vest
absolutely in the appropriate Government free from all
encumbrances. The twin conditions of Section 16 are that, (i)
the Collector has made an award under Section 11; and (ii)
the Collector takes possession of the acquired land after
making an award. The words used are “which shall
thereupon”, which means that on fulfillment of twin conditions
enumerated in Section 16 of the Act, 1894, the acquired land
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would vest absolutely in the appropriate Government free
from all encumbrances.
102. The result is that making an award must precede the act
of taking possession of the acquired land, inasmuch as, Section
17(1) and (4) which dispense with the inquiry under Section 5A
of the Act, 1894 or empowers the Collector to take possession
without making an award, are not applicable in the case of
acquisition for a company under Part-VII, in the light of
language of Section 39 which excludes Section 17 expressly
from being invoked in such matters. Moreover, vesting of land
absolute with the appropriate Government is subject to
fulfillment of mandatory procedural requirement for
acquisition for a company, which has not been followed in the
instant case.
103. The land in question may be in the physical possession of
the respondent – company as on date or the compensation
may have been deposited by the company as per the award of
the Special Land Acquisition Officer prior to taking
possession, but both these factors would not be relevant to
accept the contention of the respondent – company or the
State that the lands in question can be utilized for any other
public purpose, other than for which it is acquired.
104. Suffice it to record that in the acquisition for a private
company, the purpose for which private lands are acquired is
the most important aspect of the matter. Only in a case where
acquisition process is complete in all respects and there has
been no challenge at the relevant point of time, the acquiring
company could argue that it is open for it to utilize the land in
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NEUTRAL CITATION
C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025
undefined
question for any other purpose than for which it was acquired
with the previous sanction of the appropriate Government.
Even the State Government cannot argue that the land
acquired for a private company was an acquisition for public
purpose and the acquired land can be utilized for any other
purposes than for which it was acquired. The “public purpose”
and for the “purposes of a private company” are two different
aspects of compulsory acquisition under the Land Acquisition
Act, 1894 and, as such, they are dealt with two different parts
of the Act, namely Part-II and Part-VII; respectively.
105. With the above, we reach at an irresistible conclusion
that the entire acquisition process was conducted without
authority of law which has resulted in deprivation of the
petitioner of its property in utter violation of the Article –
300A of the Constitution of India. Both the notifications under
Sections 4 and 6 of the Land Acquisition Act, 1894 dated
10.03.1999 and 13.04.2000; respectively, are hence quashed.
The subsequent proceedings conducted in the matter of
acquisition of the lands in question are set aside.
106. The respondent – company who claims to be in the
physical possession of the land in question, is hereby directed
to handover vacant and peaceful possession of the lands in
question to the petitioners herein. The Collector, Jamnagar
shall ensure that the process of handing over possession to
the petitioners is conducted in a peaceful manner and at the
earliest. The compensation amount deposited by the company
lying in the Treasury/office of the Collector shall be refunded
to the respondent – company, soon after the process of
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undefined
handing over possession of the land in question to the
petitioners is over. The entire exercise shall be completed, as
expeditiously as possible, preferably within a period of six
weeks from the date of receipt of the copy of this order by the
Collector, Jamnagar. The report of compliance of the above
directions shall be submitted by the Collector before this
Court through the Registrar General, High Court, immediately
thereafter.
107. With the above observations and directions, the present
petition stands allowed. No order as to costs.
FURTHER ORDER
After delivering of the judgment, the original record of
the acquisition kept for the purposes of dictation of the
judgment, is handed over to Ms. Hetal Patel, learned Assistant
Government Pleader appearing for the State respondent, in
the Court.
(SUNITA AGARWAL, CJ )
(D.N.RAY,J)
GAURAV J. THAKER / CM JOSHI
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