Bombay High Court
Late Shri. Kashinath Devram And Babubai … vs State Of Maharashtra And Ors on 28 January, 2025
Author: M.S. Sonak
Bench: M.S. Sonak
wp.3475-2017 (F).docx
2025:BHC-AS:3984-DB
Pradnya
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 3475 OF 2017
1. Late Shri. Kashinath Devram and ]
Babubai Thorat Charitable Trust ]
A public trust registered under the ]
provisions of the Bombay Public ]
Trust Act, 1950. ]
Having its registered office at: ]
201 C - Wing, Sorento, ]
Shanti Park, Ghatkopar (East), ]
Mumbai 400 077. ]
Through its Chief Trustee
Amended as per Court's order dated ]
25/2/2020 passed in ]
C.A. No.430/2018 and order dated ]
31/3/2022 ]
1. Smt. Sarala Sopan Thorat ]
Age : Adult, Occ : Agriculturist ]
Currently resisting at : 201 C-Wing, ]
Sorento, Shanti Park, Ghatkopar (E),]
Mumbai 400077 ]
2. Shri. Soumil Sopan Thorat ]
Age : Adult, Occ. Service ]
Currently residing at: 201 C-Wing, ]
Sorento, Shanti Park, Ghatkopar (E),]
Mumbai 400077 ]
3. Shri. Jalandar Kisan Sathe ]
Age : Adult, Occ. Agriculturist ]
Currently residing at: 51 A, ]
Near Maruti Mandir, ]
Pimple Saudagar Gavthan, ]
Page 1 of 32
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Taluka Haveli, ]
District Pune 411027 ]
4. Mrs. Chaya Jalandar Sathe ]
Age : Adult, Occ. Housewife ]
Currently residing at: 51 A, ]
Near Maruti Mandir, ]
Pimple Saudagar Gavthan, ]
Taluka Haveli, ]
District Pune 411027 ]
5. Shri. Ajinkya Jalandar Sathe ]
Age : Adult, Occ. Student ]
Currently residing at: 51 A, ]
Near Maruti Mandir, ]
Pimple Saudagar Gavthan, ]
Taluka Haveli, ]
District Pune 411027 ]
[All Through their Power of Attorney]
Holder viz. Petitioner No.1 herein ]
above ] ...Petitioners
VERSUS
1. State of Maharashtra ]
Through its Revenue Department ]
Having its Office at : ]
Mantralaya, ]
Mumbai 400023 ]
[Summons to be served on the ]
Learned Government Pleader ]
appearing for State of Maharashtra ]
under Order XXVII, Rule 4, of the ]
Code of Civil Procedure, 1908]. ]
2. Sub-Divisional Officer ]
Junnar Sub-Division, ]
Having his/her office at : ]
Khed (Pune), Rajgurunagar, ]
District Pune ]
Page 2 of 32
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[Summons to be served on the ]
Learned Government Pleader ]
appearing for State of Maharashtra ]
under Order XXVII, Rule 4, of the ]
Code of Civil Procedure, 1908]. ]
3. The Bhimashankar Sahakari Sakhar ]
Karkhana Ltd. ]
A company registered under the ]
provisions of Companies Act ]
Having its registered office at : ]
Dattatray nagar, Pargaontarfe, ]
Ausari Budruk, Taluka Ambegaon, ]
District Pune. ]
4. The Additional Commissioner, ]
Pune Division, Pune ]
[Summons to be served on the ]
Learned Government Pleader ]
appearing for State of Maharashtra ]
under Order XXVII, Rule 4, of the ]
Code of Civil Procedure, 1908]. ]
5. The Union of India, ]
Through its Law & Judiciary ]
Department. ]
Having its office at : ]
Aykar Bhavan, Churchgate, ]
Mumbai 400023. ]
[Summons to be served on the ]
Learned Government Pleader ]
appearing for Union of India ]
under Order XXVII, Rule 4, of the ]
Code of Civil Procedure, 1908].
R. No.5 is deleted as per order dt. ]
7/1/2020 & 31/3/22 ]
[Coram : A. A. Sayed & ]
Smt. Anuja Prabhudessai, JJ ] ...Respondents
__________________________________________________________
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A PPEARANCES -
Mr Amol Gatne, for the Petitioners.
Mr B. V. Samant, Addl.G.P., a/w Mr A. R. Deolekar, AGP, for
Respondent Nos.1, 2 and 4 - State.
Mr T. D. Deshmukh, a/w Mr Ronak Utagikar, Mr Sagar
Khursija, for Respondent No.3.
__________________________________________________________
CORAM : M.S.Sonak &
Jitendra Jain, JJ.
RESERVED ON : 24 January 2025
PRONOUNCED ON : 28 January 2025
JUDGMENT (Per MS Sonak J):
–
1. Heard learned counsel for the parties.
2. Rule. The Rule is made returnable immediately at the
request of and with the consent of the learned counsel for the
parties.
3. The Petitioners seek the following substantive reliefs in
this Petition:-
“[A] That this Honourable Court be pleased to issue a Writ
of Mandamus or Writ in the nature of Mandamus or any
other appropriate Writ, direction and order under Article
226 of the Constitution of India, 1950, quashing and setting
aside the provision of Constitution (44th Amendment Act) of
the year 1978 as violative of the basic structure of the
Constitution of India.
[B] That this Honourable Court be pleased to issue a Writ
of Mandamus or Writ in the nature of Mandamus or any
other appropriate Writ, direction and order under Article
226 of the Constitution of India, 1950, quashing and setting
the Central Act No. 68 of 1984, namely Land Acquisition
[Amendment] Act 1984, as violative of Article 300 A of the
Constitution of India.
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[C] That this Honourable Court be pleased alliteratively
to issue a Writ of Mandamus or Writ in the nature of
Mandamus or any other appropriate Writ, direction and
order under Article 226 of the Constitution of India, 1950,
alternatively holding the provision of Land Acquisition
[Amendment] Act 1984 are inconsistent with the provision
of Article 19 [1] [f] read with Article 31, of the Constitution
of India, in case if the Honourable Court comes to the
conclusion that, the Constitution (44th Amendment) Act
1978 is violative of the basic structure of the Constitution.
[D] That in case if the Honourable Court comes to the
conclusion that the Constitution (44th Amendment) Act
1978, is not violative of the basic structure of the
Constitution, then the Honourable Court be pleased to hold
that the provision of Land Acquisition [Amendment] Act
1984, are not “Authority of Law” within the meaning of
Article 300 A of the Constitution of India, and the aforesaid
provisions of the Act are violative of Article 300 A of the
Constitution of India, 1950.
[E] That this Honourable Court be pleased to issue a Writ
of Mandamus or Writ in the nature of Mandamus or any
other appropriate Writ, direction and order under Article
226 of the Constitution of India, 1950, quashing and setting
aside the Notification issued by the Special Land Acquisition
Officer, under Land Acquisition Act in respect of the suit
property, as the fraud on the provisions of Section 3[cc] of
the Land Acquisition Act 1894, as amended by the Land
Acquisition [Amendment] Act No.68 of 1984.
[E1] That this Honourable Court be pleased to issue a Writ
of Mandamus or any other Writ in the nature of Mandamus
or any other appropriate Writ, direction or order under
Article 226 of the Constitution, quashing and setting aside
the impugned declaration made by the Additional
Commissioner, Pune Division in respect of the suit property
as a fraud on the provisions of Section 3 (cc) and Section
6(1) of the Act.
[F] That this Honourable Court be pleased to issue a Writ
of Mandamus or Writ in the nature of Mandamus or any
other appropriate Writ, direction and order under Article
226 of the Constitution of India, 1950, holding that the
Respondent Sugar Factory is not a Corporation owned and
controlled by the “State” within the meaning of Section
3[cc] of the Land Acquisition Act 1894 and therefore thePage 5 of 32
wp.3475-2017 (F).docxprovisions of Part II of the Land Acquisition Act will not
apply in respect of the proposed acquisition.”
4. Mr Gatne submitted that Section 4 Notification was
issued on 22 May 2013, and its last date of publication was 31
May 2013. However, the declaration under Section 6 was
made only on 22 July 2014. Relying on Clause (ii) of the first
proviso to Section 6 of the Old Act, Mr Gatne submitted that
since the Section 6 declaration was made after the expiry of
one year from the last date of publication of Section 4
Notification, the same was void.
5. Mr Gatne submitted that, even otherwise, in terms of
the Government Resolution dated 14 June 2001, the State
Authorities needed to issue a Section 6 declaration within six
months of the date of publication of the Section 4
Notification. Since the Section 6 declaration was made after a
year from the last date of publication of the Section 4
Notification, it violated the Government Resolution dated 14
June 2001 and the provisions of Section 6 of the Old Act.
6. Mr Gatne submitted that in the present case, the land
acquisition proceedings commenced with the issue of Section
4 Notification dated 22 May 2013 under the Old Act.
However, the impugned award was made on 16 July 2016,
after the Right to Fair Compensation and Transparency in
Land Acquisition, Rehabilitation and Resettlement Act, 2013
(“New Act”) came into force on 1 January 2014. Relying on
the decision of the Hon’ble Supreme Court in the case of
Executive Engineer, Gosikhurd Project Ambadi, Bhandara,
Maharashtra Vidarbha Irrigation Development Corporation vs.
Mahesh and others1, he submitted that the provisions of
1
(2022) 2 SCC 772
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Section 25 of the New Act would apply. He submitted that
since the award, in this case, was not made within one year
from the date of Section 6 declaration, the land acquisition
proceedings are liable to be declared as lapsed, given the
provisions of Section 25 of the New Act as interpreted by
Executive Engineer, Gosikhurd Project Ambadi, Bhandara,
Maharashtra Vidarbha Irrigation Development Corporation
(supra).
7. Mr Gatne finally submitted that this was a case of
acquisition for setting up a distillery by the third Respondent.
He submitted that such a purpose could never be regarded as
a “public purpose” as defined under Section 2(f) of the Old
Act. The acquisition, not being for a public purpose, was a
fraud on the provisions of the Old as well as the New Act and,
therefore, liable to be set aside.
8. Mr Gatne, learned counsel for the Petitioners, firstly
contended that Respondent No.3 is a Co-operative Society
operating a sugar factory. He submitted that based on the
material on record, this Co-operative Society is not
“Corporation owned or controlled by the State Government” as
defined under Section 3(cc) of the Land Acquisition Act, 1894
(“Old Act“). He submitted that the material on record shows
that the shareholding of the State Government in the third
Respondent Society is less than 51% of the paid-up share
capital. Therefore, he submitted that any acquisition for the
third Respondent is not a “public purpose” as defined under
Section 2(f) of the Old Act.
9. Mr Gatne submitted that the expression “is held” in
Section 3(cc) of the Old Act implies that at the stage of at
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least from the initiation and up to the completion of the
acquisition proceedings, the shareholding of the State
Government should have been 51% or above of the paid-up
capital of the third Respondent-Society. He submitted that the
documents on record show that at both stages and even in
between, the shareholding was less than 51%. Accordingly, he
submitted that this was a case of acquisition for a cooperative
society in which the government shareholding was less than
51%, which could never be regarded as a public purpose. If
the State Government was serious about such an acquisition,
then the only option available to the State Government was to
perhaps proceed under Part VII of the Old Act. He submitted
that, admittedly, the procedure under Part VII was not
followed. Therefore, the impugned Notifications under
Sections 4 and 6 of the Old Act and the acquisition were liable
to be quashed and set aside.
10. Mr Gatne submitted that the legislature had used the
expression “is held” in Section 3(cc) of the Old Act. This
provision defines “Corporation owned or controlled by the
State”. He submitted that the “control” contemplated by
Section 3(cc) is a control where the participation in paid-up
share capital is more than 51%. Otherwise, he submitted that
the Corporation in question could not be “controlled by the
State”. Mr Gatne relied on P. Anand Gajapathi Raju and others
vs. P.V.G. Raju (dead) and others2 and F. S. Gandhi (dead) by
LRs. vs. Commissioner of Wealth Tax, Allahabad3 regarding
the interpretation of the expression “is held”.
2
(2000) 4 SCC 539
3
(1990) 3 SCC 624
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11. Mr Gatne submitted that on the date of issue of Section
4 Notification, the State’s participation in the equity of the
third Respondent was about 35%. On the award date, the
equity participation was about 42.92%. Therefore, he
submitted that the third Respondent could not be regarded as
a Corporation owned or controlled by the State within the
meaning of Section 3(cc) of the Old Act. Any acquisition for
such a Corporation could never be regarded as an acquisition
for “public purpose” as defined under Section 3(f) of the Old
Act. He submitted that if, before possession is taken, the
purpose of the acquisition ceases to be a public purpose, the
further acquisition proceeding would be without the authority
of law. He relied on The Industrial Development and
Investment Co. Pvt. Ltd. and another vs. State of Maharashtra
and others4 in support of this contention.
12. Mr Gatne advanced no arguments on prayer clauses (A),
(B), (C) and (D) of the Petition. Even in the written
submissions on behalf of the Petitioners, apart from the above
arguments, no other arguments were advanced regarding the
constitutional validity or the alleged violation of the basic
structure of the Constitution of India. The arguments were
therefore restricted to prayer clauses (E), i.e., challenge to the
impugned Notifications, and (E1), i.e., to Section 6
declaration made under the Old Act.
13. Mr T. D. Deshmukh who appeared with Mr Ronak
Utagikar and Mr Sagar Khursija for the third Respondent and
Mr B. V. Sawant, Additional Government Pleader and Mr A R
Deolekar, AGP for Respondents 1, 2 and 4 (State Government)
4
1988 Mh.L.J. 1027
Page 9 of 32
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vehemently disputed the contention that the State
Government had a shareholding of less than 51% in the third
Respondent-Society. They submitted that from the material on
record, it was evident that the State Government had a
shareholding of more than 51%. Therefore, the third
Respondent was required to be construed as a Corporation
owned or controlled by the State as defined under Section
3(cc) of the Old Act.
14. Learned Counsel for the Respondents referred to the
definition of “public purpose” under Section 3(f) of the Old Act
and pointed out that this was only an “inclusive definition”.
They submitted that Section 3(f)(iv) had provided that the
expression “public purpose” includes the provision of land for a
Corporation owned or controlled by the State. They submitted
that even otherwise, the Section 6 declaration had referred to
the acquisition being at the State cost. Accordingly, they
submitted that the impugned acquisition was for a public
purpose and no fraud was involved on the provisions of either
the Old Act or the New Act. Learned counsel for the
Respondents relied on Pratibha Nema and others vs. State of
M.P. and others5, Pandit Jhandu Lal and others vs. State of
Punjab and another6 and Smt Somawanti and others vs. State
of Punjab and others7 in support of the above contentions.
15. Learned Counsel for the Respondents submitted that in
this case, the Petitioners applied for and secured a stay,
restraining the Respondents from taking over the possession
of their properties on 21 October 2013. They pointed out that
5
(2003) 10 SCC 626
6
AIR 1961 SC 343
7
AIR 1963 SC 151
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this stay is continuing. Accordingly, they submitted that
Explanation I to Section 6(1) and 11-A of the Old Act were
attracted. Based upon the same, the learned counsel for the
Respondents submitted that there was no lapsing of either the
Section 6 declaration or the award dated 16 July 2016. They
pointed out that there was not even a formal challenge to the
award dated 16 July 2016. Learned counsel for the
Respondents relied on Yusufbhai Noormohmed Nendoliya vs.
State of Gujarat and another8, Government of T. N. and
another vs. Vasantha Bai9, State of Maharashtra and others vs.
Moti Ratan Estate and another10, M. Ramalinga Thevar vs.
State of T. N. and others11 and Margarida Gomes Pereira vs.
State of Goa and others12 supporting the above contentions.
16. Learned counsel for the Respondents submitted that a
Bench comprising two judges delivered the decision in
Executive Engineer, Gosikhurd Project Ambadi, Bhandara,
Maharashtra Vidarbha Irrigation Development Corporation
(supra). They submitted that subsequently, a three-Judge
Bench of the Hon’ble Supreme Court in the case of Haryana
State Industrial and Infrastructural Development Corporation
Limited and others vs Deepak Aggarwal and others13 had
taken a contrary view. Accordingly, they submitted that the
decision in Executive Engineer, Gosikhurd Project Ambadi,
Bhandara, Maharashtra Vidarbha Irrigation Development
Corporation (supra) stands impliedly overruled and based
8
(1991) 4 SCC 531
9
1995 Supp (2) SCC 423
10
(2019) 8 SCC 552
11
(2000) 4 SCC 322
12
1998(2) Mh.L.J. 346
13
2022 SCC OnLine SC 932
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upon the same, the acquisition proceedings could not be
quashed.
17. Learned Counsel for the Respondents submitted that the
impugned award determines the compensation by following
the principles under the New Act. This compensation has
already been deposited. Accordingly, there is no prejudice to
the Petitioners, who would now receive compensation under
the provisions of the New Act.
18. For all the above reasons, the learned Counsel for the
Respondents submitted that this Petition may be dismissed.
19. Mr Gatne submitted that the last contention about
Executive Engineer, Gosikhurd Project Ambadi, Bhandara,
Maharashtra Vidarbha Irrigation Development Corporation
(supra) being impliedly overruled was raised but rejected by
the Division Bench of this Court in the case of Sandesh Vitthal
Thakur and others vs. Deputy Collector (Land Acquisition)
and others14. He, therefore, submitted that such a contention
ought not be entertained.
20. However, the learned Counsel for the Respondents
pointed out that the State had appealed this Court’s decision
to the Hon’ble Supreme Court. Notice was issued in this
Special Leave Petition on 8 November 2024, and until further
orders, the parties were directed to maintain the status quo.
21. The rival contentions now fall for our determination.
22. Some skeletal facts must be set out at the outset to
appreciate the rival contentions in this Petition.
14
2024 SCC OnLine Bom 151
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23. The State issued Section 4 notification on 22 May 2013
declaring its intention to acquire the Petitioner’s property
described in paragraph 11 of this Petition for setting up a
project concerned with the byproduct of the third
Respondent’s sugar factory. The last date of publication of this
notification was 31 May 2013. The New Act came into force
on 01 January 2014. The declaration under Section 6 was
issued on 22 July 2014. The last date of publication of this
declaration was 24 November 2014. The Award under
Section 11 was made on 16 July 2016. At least about these
dates, the Respondents raised no serious dispute.
24. The Petitioners instituted Writ Petition No.9632 of 2013
to challenge the acquisition proceedings. On 21 October 2013,
the Coordinate Bench of this Court made the following order:-
“At the request of the Counsel appearing for the Respondents,
Stand over to 25 November 2013. Respondent No.3, SLAO, to
proceed with the acquisition proceedings, however,
possession shall not be taken, if award is passed in the mean
time.
2. Issue notice to Respondent Nos.1 to 5, returnable on 25
November 2013. Learned AGP waives notice on behalf of
Respondent Nos.2 & 3. Mr Singh learned Counsel waives
service of notice on behalf of Respondent No.1 and Mr
Deshmukh learned Counsel waives service of notice on behalf
of Respondent No.5.”
25. On 27 February 2017, the Coordinate Bench disposed of
Writ Petition No.9632 of 2013, granting the Petitioners liberty
to file a fresh Petition with all available contentions. The
interim protection about possession was extended for four
weeks.
26. Mr. Gatne submitted that the present petition was
instituted pursuant to the liberty granted. By order dated 23
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March 2017, the Coordinate Bench directed the status quo
regarding possession. Mr. Gatne submitted that this interim
relief has continued to the present, and consequently, the
petitioners continue to possess the property proposed to be
acquired.
27. To begin with, we propose to consider the Petitioners’
contention that the Section 6 declaration dated 22 July 2014
lapsed because it was issued beyond the six months set out in
G.R. dated 14 June 2001 or the one-year period prescribed
under clause (ii) of the first proviso to Section 6(1) of the Old
Act.
28. Section 6(1) of the Old Act reads as follows:
“6. Declaration that land is required for a public purpose.–
(1) Subject to the provisions of Part VII of this Act, when
the appropriate Government is satisfied, after considering
the report, if any, made under section 5-A, sub-section (2),
that any particular land is needed for a public purpose, or
for a company, a declaration shall be made to that effect
under the signature of a Secretary to such Government or
of some officer duly authorised to certify its orders and
different declarations may be made from time to time in
respect of different parcels of any land covered by the same
notification under section 4, sub-section (1), irrespective of
whether one report or different reports has or have been
made (wherever required) under section 5-A, sub-section
(2):
Provided that no declaration in respect of any particular
land covered by a notification under section 4, sub-section
(1),–
(i) published after the commencement of the Land
Acquisition (Amendment and Validation) Ordinance, 1967
(1 of 1967), but before the commencement of the Land
Acquisition (Amendment) Act, 1984, shall be made after
the expiry of three years from the date of the publication of
the notification; orPage 14 of 32
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(ii) published after the commencement of the Land
Acquisition (Amendment) Act, 1984, shall be made after
the expiry of one year from the date of the publication of
the notification:
Provided further that no such declaration shall be
made unless the compensation to be awarded for such
property is to be paid by a company, or wholly or partly out
of public revenues or some fund controlled or managed by
a local authority.
Explanation 1.– In computing any of the periods
referred to in the first proviso, the period during which any
action or proceeding to be taken in pursuance of the
notification issued under section 4, sub-section (1), is
stayed by an order of a Court shall be excluded.
Explanation 2.– Where the compensation to be awarded
for such property is to be paid out of the funds of a
corporation owned or controlled by the State, such
compensation shall be deemed to be compensation paid out
of public revenues.”
29. The record shows that Section 4 notification was issued
on 22 May 2013, and its last publication date was 31 May
2013. Based on the same, Mr Gatne contended that the
Section 6 declaration had to be made within one year from
the last date of the publication of Section 4 notification, i.e.
on or before 30 May 2014. However, he pointed out that the
Section 6 declaration was made only 22 July 2014, and
therefore, the same was hit by clause (ii) of the first proviso to
Section 6(1) of the Old Act.
30. Mr. Gatne’s contention could have been accepted, but
for the 1st Explanation to Section 6(1) of the Old Act. This
Explanation provides that in computing any of the periods
referred to in the first proviso, “the period during which any
action or proceeding to be taken in pursuance of the notification
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issued under Section 4 sub-section (1), is stayed by an order of a
Court shall be excluded.”
31. In the present case, as noted above, at the instance of
the Petitioners, by order dated 21 October 2013, in Writ
Petition No.9632 of 2013, the Respondents were restrained
from dispossessing the Petitioners or taking over the
possession of the Petitioners’ properties pursuant to Section 4
notification dated 22 May 2013. According to the Petitioners’
own case, this restraint continued for four weeks after this
Court disposed of Writ Petition No.9632 of 2013 on 27
February 2017. Further, this restraint on taking over
possession was continued in this Petition vide order dated 23
March 2017. This restraint continues to date. Accordingly, the
1st Explanation referred to above does not suggest that the
Section 6 declaration made on 22 July 2014 has lapsed.
32. Mr. Gatne however, submitted that the interim orders
made by this Court in the earlier Petition or in the present
Petition had not restrained the Respondents from making a
declaration under Section 6 of the Old Act. The restraint was
only restricted to dispossessing the Petitioners or taking over
possession of the Petitioners’ property in pursuance of Section
4 notification dated 22 May 2013. He submitted that the 1 st
Explanation applied only when the stay of the Court disabled
the State or the acquiring authority from issuing a declaration
under Section 6 of the Old Act.
33. Mr. Gatne’s contention cannot be accepted because the
1st Explanation to Section 6(1) explicitly states that in
computing any of the periods referred to in the first proviso to
Section 6(1), the period during which any action or
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proceeding to be taken in pursuance of the notification issued
under Section 4 subsection (1), is stayed by an order of a
Court shall be excluded. One of the actions or the proceedings
to be taken in pursuance of the notification issued under
Section 4(1) of the Old Act was taking over the possession of
the Petitioners’ property. Admittedly, this action or
proceedings of taking over the possession of the Petitioners’
property was stayed by this Court on 21 October 2013, and
this stay was continued by an order dated 23 March 2017 in
the present Petition. There is no dispute that this stay
continues to date.
34. Therefore, the interpretation proposed by Mr. Gatne
cannot be accepted on a plain reading of the 1st Explanation to
Section 6(1) of the Old Act. Besides, we note a similar
Explanation to Section 11-A of the Old Act, based upon which
the Petitioners have questioned the Award dated 16 July 2016
without formally challenging the same. The Hon’ble Supreme
Court has interpreted the Explanation to Section 11-A in
several decisions, and such precedents will apply to the
interpretation of the 1st Explanation to Section 6(1) of the Old
Act. The Hon’ble Supreme Court’s precedents are proposed to
be considered in the context challenge based inter-alia on the
provisions of Section 11-A of the Old Act read with Section 24
of the New Act.
35. The Petitioners have contended that since the
acquisition, in the present case, commenced by the issue of
Section 4 notification dated 22 May 2013 under the Old Act.
Still, the Section 6 declaration dated 22 July 2014, and the
Award dated 16 July 2016 was made under the New Act, the
time limit of one year prescribed under Section 25 of the New
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Act and not the time limit of two years as prescribed under
Section 11-A of the Old Act would apply. Based on these
provisions and the decision of the Hon’ble Supreme Court in
Executive Engineer, Gosikhurd Project Ambadi, Bhandara,
Maharashtra Vidarbha Irrigation Development Corporation
(supra) the Petitioners urged that the acquisition proceedings
lapsed.
36. Section 11-A of the Old Act reads as follows: –
“11-A. Period within which an award shall be made.–(1)
The Collector shall make an award under section 11 within a
period of two years from the date of the publication of the
declaration and if no award is made within that period, the
entire proceedings for the acquisition of the land shall lapse:
Provided that in a case where the said declaration has
been published before the commencement of the Land
Acquisition (Amendment) Act, 1984, the award shall be
made within a period of two years from such
commencement.
Explanation.–In computing the period of two years
referred to in this section, the period during which any
action or proceeding to be taken in pursuance of the said
declaration is stayed by an order of a Court shall be
excluded.”
37. The Section which corresponds to Section 11-A of the
Old Act is Section 25 of the New Act, which reads as follows:-
“25. Period within which an award shall be made.-The
Collector shall make an award within a period of twelve
months from the date of publication of the declaration under
section 19 and if no award is made within that period, the
entire proceedings for the acquisition of the land shall lapse:
PROVIDED that the appropriate Government shall
have the power to extend the period of twelve months if in
its opinion, circumstances exist justifying the same:
PROVIDED FURTHER that any such decision to
extend the period shall be recorded in writing and the samePage 18 of 32
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authority concerned.”
38. Section 24 of the New Act deals with the lapsing or
deemed lapsing of acquisitions commenced under the Old Act
and is transcribed below for the convenience of reference:
“24. Land acquisition process under Act No. 1 of 1894 shall
be deemed to have lapsed in certain cases.-
(1) Notwithstanding anything contained in this Act, in
any case of land acquisition proceedings initiated under the
Land Acquisition Act, 1894 (1 of 1894) —
(a) where no award under section 11 of the said
Land Acquisition Act has been made, then, all
provisions of this Act relating to the determination
of compensation shall apply; or
(b) where an award under said section 11 has
been made, then such proceedings shall continue
under the provisions of the said Land Acquisition
Act, as if the said Act has not been repealed.
(2) Notwithstanding anything contained in sub-section
(1), in case of land acquisition proceedings initiated under
the Land Acquisition Act, 1894 (1 of 1894), where an award
under the said section 11 has been made five years or more
prior to the commencement of this Act but the physical
possession of the land has not been taken or the
compensation has not been paid the said proceedings shall
be deemed to have lapsed and the appropriate Government,
if it so chooses, shall initiate the proceedings of such land
acquisition afresh in accordance with the provisions of this
Act:
PROVIDED that where an award has been made and
compensation in respect of a majority of land holdings has
not been deposited in the account of the beneficiaries, then,
all beneficiaries specified in the notification for acquisition
under section 4 of the said Land Acquisition Act, shall be
entitled to compensation in accordance with the provisions
of this Act.”
39. In a situation where the acquisition proceedings
commenced under the Old Act but continued even after the
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New Act came into force on 01 January 2014, an issue arose
in Executive Engineer, Gosikhurd Project Ambadi, Bhandara,
Maharashtra Vidarbha Irrigation Development Corporation
(supra) as to whether the limitation period of two years
prescribed under Section 11-A of the Old Act or one year
prescribed under Section 25 of the New Act would apply.
40. The Hon’ble Supreme Court, after a detailed analysis,
held that the period of one year prescribed under Section 25
of the New Act would apply. Therefore, if no Award were
made within one year of the New Act coming into force, such
land acquisition proceedings would lapse. To this period of
one year, the Court added 79 days because of the stay granted
on all acquisition proceedings pending resolution of this issue.
41. In Executive Engineer, Gosikhurd Project Ambadi,
Bhandara, Maharashtra Vidarbha Irrigation Development
Corporation (supra), the Hon’ble Supreme Court, relying upon
the decision of the Constitution Bench in case of Indore
Development Authority (LAPSE-5 J.) vs. Manoharlal and
others15, held that though in Section 24(2) of the New Act,
there was no express provision concerning the effect of an
interim order of a Court granting a stay or injunction by
which the authorities were disabled to take possession or
make payment and the exclusion of such period, still, the
omission of such exclusion and specific stipulation in Sections
19 and 69 of the New Act do not indicate any special
legislative intent. Accordingly, the exclusion provision, similar
to the Explanation to Section 11-A of the Old Act, was read
into Section 24(2) of the New Act.
15
(2020) 8 SCC 129
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42. The discussion in paragraphs 38 to 43 of the Executive
Engineer, Gosikhurd Project Ambadi, Bhandara, Maharashtra
Vidarbha Irrigation Development Corporation (supra) is
transcribed below for the convenience of reference.
“38. The impugned judgment, however, holds that the
period when the stay order dated 26-5-2014 (Panjabrao v.
State of Maharashtra, 2014 SCC OnLine Bom 5103) was
effective is inconsequential and irrelevant as the High Court
had not stayed the acquisition proceedings. It is difficult to
accept the aforesaid reasoning for the simple reason that it
ignores the language of the interim order (Panjabrao v.
State of Maharashtra, 2014 SCC OnLine Bom 5103) and its
true effect in redetermination of compensation. The interim
order passed by the High Court had inhibited further action
on the part of the authorities to proceed with the
acquisition of land.
39. Indore Development Authority (Indore Development
Authority (LAPSE-5 J.) v. Manoharlal, (2020) 8 SCC 129 :
(2020) 4 SCC (Civ) 496) refers to a catena of authorities,
including Abhey Ram v. Union of India ((1997) 5 SCC 421),
to give fitting meaning to the words “stay of action or
proceedings” used in the proviso to Section 11-A of the
1894 Act to mean any type of order passed by a court,
which in one way or the other prohibits or prevents the
authorities from passing an award. This period of inhibition
is excluded while computing the period for passing of the
award by an authority, under Section 11-A of the 1894 Act.
Further, the stay granted in the present case would be
applicable to others also who had not obtained stay in that
behalf.
40. In Indore Development Authority (Indore
Development Authority (LAPSE-5 J.) v. Manoharlal, (2020)
8 SCC 129 : (2020) 4 SCC (Civ) 496), with reference to
Section 24(2) of the 2013 Act, the Constitution Bench has
noticed that there is no similar provision for exclusion of
time, though there is express provision for exclusion of time
under Sections 19 and 69 of the 2013 Act. Nevertheless, the
Constitution Bench, while discussing Issue 5 – “the effect of
interim order of a court granting stay or injunction by
which the authorities are unable to take possession or make
payment and its exclusion”, has observed that omission of
such exclusion and specific stipulation in Sections 19 and
69 of the 2013 Act does not indicate any special legislative
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intent. The provision for exclusion of time was read into
Section 24(2) of the 2013 Act. For the aforesaid purpose,
the relevant portions of the judgment have been
reproduced below: (SCC pp. 370-71, para 334)
“334. For all these reasons, it is held that the omission
to expressly enact a provision, that excludes the period
during which any interim order was operative,
preventing the State from taking possession of acquired
land, or from giving effect to the award, in a particular
case or cases, cannot result in the inclusion of such
period or periods for the purpose of reckoning the
period of 5 years. Also, merely because timelines are
indicated, with the consequence of lapsing, under
Sections 19 and 69 of the 2013 Act, per se does not
mean that omission to factor such time (of subsistence
of interim orders) has any special legislative intent.
This Court notices, in this context, that even under the
new Act (nor was it so under the 1894 Act) no
provision has been enacted, for lapse of the entire
acquisition, for non-payment of compensation within a
specified time; nor has any such provision been made
regarding possession. Furthermore, non-compliance
with payment and deposit provisions (under Section
77) only results in higher interest pay-outs under
Section 80. The omission to provide for exclusion of
time during which interim orders subsisted, while
determining whether or not acquisitions lapsed, in the
present case, is a clear result of inadvertence or
accident, having regard to the subject-matter, refusal to
apply the principle underlying the maxim actus curiae
neminem gravabit would result in injustice.”
41. In the context of absence of any provision excluding
the period of operation of stay orders under Section 24(2),
it was noted in Indore Development Authority case (Indore
Development Authority LAPSE-5 J.) v. Manoharlal, (2020) 8
SCC 129 : (2020) 4 SCC (Civ) 496) that the statute cannot
provide for all possible scenarios, and it is for the courts to
plug the gaps through the process of judicial interpretation
by ascertaining the legislative intent. The Court resorts to
construe the words of the provision in a reasonable way
having regard to the context. Accordingly, it was held that
Section 24(2) ousts the period spent during the interim
stay, and no fault or inaction could be attributed to the
authorities when the payment of compensation or taking
possession of land was inhibited by operation of a stay
order. In arriving at this finding, this Court relied on several
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judgments and treatises on statutory interpretation which
elaborated on legal maxims encapsulated below:
(i) “lex non cogit ad impossibilia” — the law does not
expect the performance of the impossible;
(ii) “actus curiae neminem gravabit” — an act of the
court shall prejudice no man;
(iii) “nemo tenetur ad impossibilia” – no one is bound
to do an impossibility; and
(iv) “impotentia excusat legem” — where a person is
disabled from performing a duty created by law, without
any default in him, and has no remedy over, there the
law will in general excuse him.
42. It was further concluded, based on the maxim
“commodum ex injuria sua nemo habere debet” (meaning:
convenience cannot accrue to a party from his own wrong),
that the legislation did not intend for relentless litigants to
derive the benefit of enhanced compensation under the
2013 Act, but rather to deliver advantage to those who
accepted the compensation and handed over possession.
43. The aforesaid reasoning will be applicable to Section
25 of the 2013 Act as well. If interpreted otherwise, it
would bring inconsistencies and would cause injustice.”
43. Based on the above, Mr. Gatne’s contention based upon
Section 24(2) of the New Act or Section 11-A of the Old Act
cannot be accepted.
44. The Hon’ble Supreme Court has rejected the contention
that the stay order did not restrain the Respondents from
making a declaration under Section 6 or passing an Award
under the New Act in a series of decisions, including Indore
Development Authority (supra).
45. In any event, the above issue is no longer res-integra.
In Yusufbhai Noormohmed Nendoliya (supra), in almost
identical circumstances, the Petitioners contended that since
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the stay they obtained was only regarding their dispossession
and since there was no stay on making a declaration under
Section 6, the 1st Explanation to Section 6(1) would not apply.
This argument was not accepted, having regard to the
language of the statutory explanation and the legislative
intent.
46. In Yusufbhai Noormohmed Nendoliya (supra), the
Hon’ble Supreme Court interpreted the Explanation below
Section 11-A of the Old Act in the following terms: –
“8. The said Explanation is in the widest possible terms
and, in our opinion, there is no warrant for limiting the
action or proceedings referred to in the Explanation to
actions or proceedings preceding the making of the award
under Section 11 of the said Act. In the first place, as held by
the learned Single Judge himself where the case is covered
by Section 17 or otherwise. On the other hand, it appears to
us that Section 11-A is intended to confer a benefit on a
landholder whose land is acquired after the declaration
under Section 6 is made in cases covered by Section 17 or
otherwise. On the other hand, it appears to us that the
Explanation is intended to confer a benefit on a landholder
whose land is acquired after the declaration under Section 6
is made in cases covered by the Explanation. The benefit is
that the award must be made within a period of two years of
the declaration, failing which the acquisition proceedings
would lapse and the land would revert to the landholder. In
order to get the benefit of the said provision what is
required, is that the landholder who seeks the benefit must
not have obtained any order from a court restraining any
action or proceeding in pursuance of the declaration under
Section 6 of the said Act so that the Explanation covers only
the cases of those landholders who do not obtain any order
from a court which would delay or prevent the making of
the award or taking possession of the land acquired. In our
opinion, the Gujarat High Court was right in taking a similar
view in the impugned judgment.”
47. To the same effect are the decisions of the Hon’ble
Supreme Court in Vasantha Bai (supra), Moti Ratan Estate
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(supra) and M Ramalinga Thevar (supra). The Coordinate
Bench of this Court in Margarida Gomes Pereira (supra) has
also held similarly following Yusufbhai Noormohmed
Nendoliya (supra).
48. Accordingly, the Petitioners’ contention regards the
lapsing of the acquisition proceedings because the Section 6
declaration was made beyond the one-year period prescribed
in clause (ii) of the first proviso to Section 6(1) of the Old Act
or because the Award dated 16 July 2016 was made beyond
the one-year limitation period prescribed under section 25 of
the New Act will have to be rejected.
49. The argument about Executive Engineer, Gosikhurd
Project Ambadi, Bhandara, Maharashtra Vidarbha Irrigation
Development Corporation (supra) being impliedly overruled by
Haryana State Industrial and Infrastructural Development
Corporation Limited (supra) is not required to be considered.
Suffice, however, to note that a similar contention was
rejected by the Coordinate Division Bench in Sandesh Vitthal
Thakur (supra). The State has instituted an SLP against this
decision in which notice and even status quo have been
ordered. However, even going by the ratio of Executive
Engineer, Gosikhurd Project Ambadi, Bhandara, Maharashtra
Vidarbha Irrigation Development Corporation (supra), in the
facts of the present case, the contention about lapsing cannot
be accepted.
50. The argument based on the G.R. dated 14 June 2001
also cannot be accepted. This G.R. only provides internal
guidelines to the land acquisition authorities. It cannot be
interpreted as introducing any timelines beyond which the
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acquisition proceedings would lapse. In any event, the
timelines cannot conflict with those provided under the
statute. The defence based on the statutory explanation would
also apply. Based on all these grounds, the argument based on
the GR cannot be accepted.
51. The next major contention is that the acquisition is
invalid and without jurisdiction because the third Respondent
is not a “corporation owned or controlled by the State” as
defined under Section 3(cc) of the Old Act.
52. Section 3(cc) of the Old Act reads as follows:-
“3(cc) the expression “corporation owned or controlled by
the State” means any body corporate established by or under
a Central, Provincial or State Act, and includes a
Government company as defined in section 617 of the
Companies Act, 1956 (1 of 1956), a society registered under
the Societies Regulation Act, 1860 (21 of 1860), or under
any corresponding law for the time being in force in a State,
being a society established or administered by Government
and a co-operative society within the meaning of any law
relating to co-operative societies for the time being in force
in any State, being a co-operative society in which not less
than fifty-one per centum of the paid-up share capital is held
by the Central Government, or by any State Government or
Governments, or partly by the Central Government and
partly by one or more State Governments;”
53. The Petitioners argued that though Section 3(f) of the
Old Act defines the expression “public purpose” to include
inter-alia “(iv) the provision of land for a corporation owned or
controlled by the State;”. Still, since the third Respondent was
not a corporation owned or controlled by the State, any
acquisition for its purposes could never be regarded as an
acquisition for public purpose. Mr Gatne submitted that the
existence of a public purpose was a sine-qua-non for a valid
acquisition. Without any public purpose, the acquisition was a
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fraud on the provisions of the old or the new acquisition Acts.
He submitted that the only option for the State was to acquire
the Petitioners’ property under Part VII of the Old Act or the
equivalent provisions under the New Act. However, he
contended that the present acquisition proceedings were
without jurisdiction and should be declared as such.
54. Mr Gatne firstly referred us to the document at page 85,
which is a noting dated 15 June 2012, which suggests that the
share capital of the State Government in the third Respondent
was in the range of 35% of the total paid up capital. Secondly,
he referred us to the document at page 131, which is again a
noting which also suggested that the government
shareholding in the third Respondent was about 35%. Thirdly,
he referred us to the document at page 158, which is a
response dated 27 May 2013 obtained under the RTI. This
suggests that the State investment towards the share capital of
the third Respondent was 1440 lakhs, which figure, precisely
corresponds to the 35% share capital referred to in the
previous noting of the State Government.
55. Finally, Mr Gatne referred us to the document at page
246, which is a chart annexed along with the affidavit of the
third Respondent. Based on this chart, he submitted that the
State Government held a shareholding of 53.19% at the time
of issue of Section 4 notification dated 22 May 2013, 44.29%
at the time of issue of declaration under Section 6 dated 22
July 2014 and 42.92% at the stage of the Award dated 16 July
2016.
56. Mr Gatne submitted that the expression “is held” under
Section 3(cc) of the Old Act contemplates that the State
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Government holds 51% or more shareholding in a cooperative
society with some elements of continuity at the stage of
initiation of the acquisition proceedings, during the
acquisition proceedings and at the stage of conclusion of the
acquisition proceedings. He submitted that if this provision is
interpreted otherwise, then, cooperative societies in which the
State Government might invest or hold more than 51% of the
share capital for an extremely short duration just before
acquisition, would claim that the acquisition for the purposes
of such a cooperative society was a public purpose. He
submitted that such a interpretation would amount to a fraud
on the provisions of the Old and the New Acts.
57. Mr Gatne’s arguments, based upon the construction of
the provisions of Section 3(cc) of the Old Act and, to some
extent, supported by the construction placed by the Hon’ble
Supreme Court on the expression “is held” in the decisions in
P. Anand Gajapathi Raju (supra) and F. S. Gandhi (dead) by
LRs. (supra) cannot be lightly brushed aside. However, we are
satisfied that in the facts of the present case, we do not need
to decide this contention based on the equity participation
percentage of the State Government. For reasons discussed
hereinafter, even if we were to accept Mr Gatne’s contention
based upon Section 3(cc) of the Old Act, the same would
make no difference to the outcome of this matter given the
declaration dated 22 July 2014 (Exhibit-P at pages 115-116)
made under Section 6 of the Old Act.
58. The official translation of this declaration states that the
Petitioners’ land, amongst others, must be acquired for public
purpose “at the partial cost of the Government”. This partial
funding of the acquisition by the Government or the partial
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contribution by the Government towards acquisition is a
crucial factor based upon which we do not need to decide on
Mr Gatne’s contention regarding the percentage of State
equity participation.
59. Section 6(3) of the Old Act provides that the declaration
under Section 6 shall be conclusive evidence that the land is
needed for a public purpose or for a company, as the case may
be; and after making such declaration, the appropriate
government may acquire the land in a manner hereinafter
provided.
60. The Petitioners have nowhere challenged that the
acquisition is partly at the cost of the State or that the State
partly funds the acquisition. Without such a challenge, the
statutory conclusivity accorded to a declaration under Section
6 of the Old Act cannot be displaced lightly. Once it is
accepted that the acquisition, in this case, was being partly
funded through the State exchequer or that the State was
partly contributing to the acquisition, the issue of the State
holding more than 51% of the share capital in the third
Respondent becomes irrelevant or academic.
61. Mr. Deshmukh, the learned counsel for the third
Respondent, submitted that once the State was contributing to
the acquisition or that the source of funds for the acquisition
was partly through the State exchequer, there was no
requirement for the State to act under Part VII of the Old Act
and follow the procedure prescribed in the said chapter.
62. Mr Deshmukh relied on Pratibha Nema (supra), in
which it is held that the government’s contribution of even a
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nominal sum towards compensation for acquiring land for
setting up industry in the public sector would imbue such
acquisition with a public purpose. The Court held that the
distinction between public purpose acquisition and Part VII
acquisition has been blurred under the impact of judicial
interpretation of the relevant provisions. The main and
perhaps decisive distinction lies in the fact whether the cost of
the acquisition comes out of public funds wholly or partly.
Here again, even a token or nominal contribution by the
government has been held to be sufficient compliance with the
second proviso to Section 6. The net result is that by
contributing even a trifling sum, the government could change
the character and pattern of acquisition. In the ultimate
analysis, what is considered to be an acquisition for facilitating
the setting up of an industry in the private sector could get
imbued with the character of public purpose acquisition if only
the government comes forward to sanction the payment of a
nominal sum towards compensation. (see paragraphs 6, 9, 20
to 25).
63. In Pandit Zandulal (supra) the Hon’ble Supreme Court
held that the declaration for acquisition for a public purpose
cannot be made unless the compensation, wholly or partly, is
to be paid out of public funds. Therefore, in the case of an
acquisition for a company simpliciter, the declaration cannot
be made without satisfying the requirements of Part VII. But,
that does not necessarily mean that an acquisition for a
company for a public purpose cannot be made otherwise than
under the provisions of Part VII, if the cost or a portion of the
cost of the acquisition is to come out of public funds. In other
words, the essential condition for acquisition for a public
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purpose is that the cost of the acquisition should be borne,
wholly or in part, out of public funds. Hence, an acquisition for
a company may also be made for a public purpose, within the
meaning of the Act, if a part or the whole of the cost of
acquisition is met by public funds. If, on the other hand, the
acquisition for a company is to be made at the cost entirely of
the Company itself, such an acquisition comes under the
provisions of Part VII. As in the present instance, it appears
that part at any rate of the compensation to be awarded for
the acquisition is to come eventually from out of public
revenues, it must be held that the acquisition is not for a
company simpliciter. It was not, therefore, necessary to go
through the procedure prescribed by Part VII.
64. Thus, since the section 6 notification, in this case, refers
to the partial funding of the acquisition by the State or
through public funds and further, since section 6(3) of the Old
Act provides that such declaration shall be conclusive
evidence that the land is need for public purpose, the
argument based on the shareholding of the State Government
in the third Respondent society or the scope and import of the
expression “is held” Section 3(cc) of the Old Act need not be
gone into. Such an argument, at least in the facts of this case,
is primarily academic. Besides, there is also some dispute on
the extent of the State’s shareholding. The state has also not
bothered to file any affidavit, though this Petition was
instituted in 2017.
65. The argument about the impugned acquisition being a
fraud on the provisions of the Old Act or the New Act is also
untenable, at least in the facts of the present case. The
challenges based on the limitation provided by clause (ii) of
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the first proviso to Section 6 or Section 11-A are untenable. At
the highest, the challenge based on State Government
shareholding in the context of Section 3(cc) requirement is
arguable. However, even if the contentions based on this
contention were to be sustained, the impugned acquisition
would have to be upheld, given the declaration in Section 6 of
the Old Act that the acquisition was partly funded by the State
or through the State exchequer.
66. For all the above reasons, we are constrained to dismiss
this Petition. All concerned parties should act upon an
authenticated copy of this order.
67. The interim order restraining the Respondents from
taking possession has been in effect since 2013. Therefore, we
extend it by eight weeks should the Petitioners wish to
challenge this decision before the Hon’ble Supreme Court.
68. All concerned should act on authenticated copy of this
order.
(Jitendra Jain, J) (M. S. Sonak, J)
Signed by: Pradnya Bhogale
Designation: PA To Honourable Judge Page 32 of 32
Date: 28/01/2025 15:03:15
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