RAMJI POPATBHAI PATEL Vs. JAMNADAS SHAH COMMISSIONER RAJKOT

JUDGEMENT

(1.) This is a petition for an appropriate direction order or writ to quash and set aside a notification dated 9th October 1959 issued by the Commissioner Rajkot Division under sec. 4 of the Land Acquisition Act 1894 and a notification dated 8th May 1960 issued by the Commissioner Rajkot Division under sec. 6 of that Act in respect of survey No. 296 belonging to the petitioners. Survey No. 296 admeasures 20 acres 29 gunthas and is situate on Kotharia Road in Rajkot. It appears that the Saurashtra Housing Board constituted under the Saurashtra Housing Board Act 1954 required survey No. 296 for executing a low income group housing scheme and therefore the Commissioner Rajkot Division issued a notification dated 9th October 1959 under sec. 4 of the Act notifying that Survey No. 296 was likely to be needed for a public purpose namely low income group housing scheme on Kotharia Road. The petitioners lodged their objections under sec. 5A sub-sec. (1) against the proposed acquisition of their land and the Collector after holding an inquiry made a report to the Commissioner under sec. 5A sub sec. (2). In the meantime the State of Bombay was bifurcated Into the States of Maharashtra and Gujarat and the petitioners land came within the State of Gujarat. The Commissioner Rajkot Division thereafter Issued a notification dated 8th May 1960 under sec. 6 declaring that the lands specified in the Schedule which included inter alia the petitioners lands were required for the public purpose namely low income group housing scheme at Kotharia Road. The Saurashtra Housing Board was succeeded by the Gujarat Housing Board with effect from 1st September 1961 as a result of the enactment of the Gujarat Housing Board Act 1961 and the Gujarat Housing Board thereafter took up the execution of the low income group housing scheme on Kotharia Road. Notice under sec. 9 was then issued to the petitioners and after holding an inquiry into the value of the lands at the date of the notification under sec. 4 the Special Land Acquisition Officer made an award dated 31st January 1961 determining the amount of compensation payable to the petitioners. The petitioners being dissatisfied with the award applied for a reference under sec. 18 and the reference was accordingly made to the District Court. Whilst the reference was pending before the Civil Judge Senior Division Rajkot the case of the petitioners was that on or about 16th April 1962 a settlement was arrived at between the petitioners the Collector representing the State Government and the Gujarat Housing Board under which four acres of land out of survey No. 296 was to be handed over to the Gujarat Housing Board in acquisition and the remaining 16 acres 29 gunthas of land was to be released from acquisition under sec. 48 and pursuant to this settlement four acres of land was handed over by the petitioners to the Gujarat Housing Board on 27th April 1962. The State Government and Gujarat Housing Board disputed that any such settlement was arrived at between the parties they contended that what the petitioners alleged to be a settlement was merely a proposal on the part of the petitioners and it was neither accepted by the State Government nor by the Gujarat Housing Board. The State Government accordingly declined to release the remaining 16 acres 29 gunthas of land from acquisition under sec. 48. The Gujarat Housing Board thereafter proceeded to prepare the low income group housing scheme and it was sanctioned by the State Government on 20th September 1962. Various steps in the implementation of the scheme involving considerable expenditure and firm commitments were also taken by the Gujarat Housing Board. All throughout this period the petitioners did not challenge the validity of the acquisition but their only insistence was on carrying out the alleged settlement of 16th April 1962 and since the State Government and the Gujarat Housing Board did not honour the said alleged settlement the petitioners filed Civil Suit No. 297 of 1963 in the Court of the Civil Judge Senior Division Rajkot for specific performance and injunction. The petitioners applied for an interim injunction to restrain the State Government and the Gujarat Housing Board from taking possession of the remaining 16 acres 29 gunthas of land from the petitioners in breach of the said alleged settlement but the Interim injunction was refused by the trial Court and the appeal preferred by the petitioners against the refusal of the interim injunction also failed. In the meantime the State Government by an order dated 12th August 1963 made in exercise of the powers conferred under sec. 43 of the Gujarat Housing Board Act 1961 exempted certain scheme entrusted by the Government to the Gujarat Housing Board and mentioned In the Schedule to that order from the provisions of sec. 27 and 34 of the Act and one of such schemes was the low income group housing scheme at Kotharia Road. When the petitioners realised that they would no longer be able to hold back delivery of possession of the remaining 16 acres 29 gunthas of land they filed present petition on 1st November 1963 challenging for the first time the validity of the notifications under sec. 4 and 6.

(2.) There were only two grounds originally taken in the petition but by an amendment made with leave of the Court before the petition reached hearing two further grounds were added and therefore there were in all four grounds on which the validity of the Impugned notifications was challenged in the petition. The first ground related to the question whether the Commissioner Rajkot Division had authority to issue the impugned notifications but this ground was not pressed as it is concluded by a decision given by a Division Bench of this Court in Kanaiyalal Maneklal China and others v. The State of Gujarat and others VII O. L. 11. 717 and the view taken in that decision is confirmed by the Supreme Court in Arnold Rodricks and another v. State of Maharashtra and others A. I. R. 1966 S. C. 1788. The second ground raised the question whether the purpose of low income group housing scheme was a public purpose but this ground too was not pressed as it could not be contended that the provision of housing for persons belonging to the low income group was not a public purpose. The other two grounds of challenge were:

(3.) It is now well-settled that an acquisition of land may be made for a public purpose or for a company. If the acquisition is for a public purpose the compensation has to be paid wholly or partly out of public revenue or some fund controlled or managed by a local authority. On the other hand if the acquisition is for a company the compensation has to be paid by the company and the provisions of Part VII of the Act have to be complied with. But that does not necessarily mean that an acquisition for a company for a public purpose cannot be made otherwise than under the provision of Part VII if the cost or a portion of the cost of acquisition is to come out of public revenue or some fund controlled or managed by a local authority. Such an acquisition would be an acquisition for a public purpose to be executed by a company and the only condition for the validity of such an acquisition would be that the cost of the acquisition must be borne wholly or in part out of public revenue or some fund controlled or managed by a local authority and it would not be necessary to comply with the provisions of Part VII. It is only where an acquisition for a company is to be made entirely at the cost of the company that such acquisition would come under the provisions of Part VII and would have to satisfy the requirements of that Part. Vide Motilal Vithalbhai Patel v. State of Gujarat II G.L.R. 1; Babu Barkya Thakur v. State of Bombay A I.R. 1960 S. C. 1203 and Pandit Jhandu Lal v. State of Punjab A.I.R. 1961 S. C. 343.