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Madras High Court
S. RAMACHANDRA IYER,ANANTANARAYANAN
P.Iyar Nadar - Appellant
Versus
State of Madras - Respondent
Decided On : 09/20/1963
LAND ACQUISITION - Acquisition for Company - Procedure - Amendment to S. 40(1) of Land Acquisition Act, 1894 - Effect - Acquisition for Company for Public Purpose - Contribution by Government - Whether Necessary - Part II or Part VII of the Act Applicable.
Fact of the Case:
The appellant, a manufacturer of fireworks and crackers, challenged the acquisition of his land for the establishment of an electrical insulator factory by a company. The Government had issued a notification under S. 4(1) of the Land Acquisition Act, 1894, directing that an extent of 30.26 acres of land in Porur should be acquired for the benefit of the company. The appellant objected to the acquisition, contending that it was not for a public purpose and that the procedure prescribed by Part VII of the Act had not been followed.
Finding of the Court:
The court held that the acquisition was for a public purpose as the company was engaged in the manufacture of electrical insulators, which were in short supply in the country. However, the court found that the procedure prescribed by Part VII of the Act had not been followed, and that the acquisition could not be justified under Part II of the Act as the Government had not contributed any part of the funds necessary for the acquisition.
Issues: 1. Whether the acquisition of land for the establishment of an electrical insulator factory by a company was for a public purpose? 2. Whether the procedure prescribed by Part VII of the Land Acquisition Act, 1894, had been followed in the acquisition?
Ratio Decidendi: 1. The court held that the acquisition of land for the establishment of an electrical insulator factory by a company was for a public purpose as the company was engaged in the manufacture of electrical insulators, which were in short supply in the country. 2. The court found that the procedure prescribed by Part VII of the Land Acquisition Act, 1894, had not been followed in the acquisition, and that the acquisition could not be justified under Part II of the Act as the Government had not contributed any part of the funds necessary for the acquisition.
Final Decision: The court allowed the appeal and issued a writ of mandamus directing the Government to desist from proceeding with the proposed acquisition. However, the court clarified that the proceedings taken upto the stage of the declaration under S. 6 of the Act would be valid.
RAMACHANDRA IYER, C. J. :- The appellant, a manufacturer of fireworks and crackers carrying on business under the name of National Fire Works Factory at Sivakasi in Ramanathapuram District has a place of business at Anderson Street G. T. Madras, for distributing his products to various parts of India. His turnover is said to be between thirty to forty lakhs of rupees per year. The demand for crackers and other products of his factory being seasonal, he found need for securing a place for their storage, they being explosives. With that object in view, he acquired an extent of 3 acres and 63 cents of vacant land in Porur village, Saidapet taluk, away from the residential locality, and constructed a magazine for the storage of his products. He had also obtained a licence from the Central Government authorities for the purpose, on 20-12-1955, and since then he has been storing crackers etc., manufactured at Sivakasi in his factory, at his Porur magazine.
2. While so, Messrs. Sethuraman and Thyagarajjan a firm doing business in electrical goods and also undertaking electrical engineering contracts secured a licence from the Government under the Industries Development Regulation Act, 1961 for the establishment of an industrial undertaking near Madras in collaboration with Messrs. Westing-house Electric International Co. of New York (U.S.A.) for the manufacture of electrical insulators, lightning arresters, etc, which are in short supply in this country. The two concerns formed themselves into a company called W.S. Insulators of India Ltd., and after duly registering the same under the Indian Companies Act 1956, they applied to the Government for acquisition of about 30 acres of land at Porur village for the establishment of the electrical insulator factory comprising factory buildings, administrative office, canteen and quarters for the office staff. The site chosen included within its area the entire property owned by the appellant. The Government acceded to the request of the W.S. Insulators of India Ltd., as in their opinion, the establishment of such a factory would serve a public purpose. Accordingly, the Government issued a notification under G. O. Mis. 5781 I. L. C. (Industries) dated 29-09-1961 directing that an extent of 30.26 acres of land in Porur should be acquired for the benefit of the company. It appears that the company itself was able to secure a part of that land by private treaty. Accordingly, a notification under S. 4(1) of the Land Acquisition Act was issued on 19-12-1961 that the remaining area of land proposed to be acquired was for a public purpose.
3. The appellant objected the acquisition in so far as it affected his property and made representations in that behalf under S. 5-A of the Land Acquisition Act which will be referred to hereafter as the Act. After receiving the report of the Collector and considering the same, the Government overruled the objections. On 9-5-1962, the Government made a declaration under S. 6 to the effect that they were satisfied that an extent of 19.2 acres of land were required for a public purpose, they having decided already to contribute, out of the public revenues a sum of five nP towards compensation to be awarded for the acquisition of the land. The notification appointed a special Tahsildar (Land Acquisition), Saidapet, to perform the functions of the Collector under the Act. On 29-1-1963 the Special Tahsildar passed an award under S. 11 of the Act.
4. In the meanwhile certain events took place, which, from the point of view of this appeal, are of significance. Even before the notification under S. 6 of the Act was issued, on 15-3-1962, the appellant had applied to this court for the issue of a writ of mandamus-the petition which has given rise to this appeal-to direct the Special Tahsildar to desist from proceeding with the proposed acquisition. Then the Land Acquisition Act underwent a change. Ordinance 3 of 1962 was promulgated on 20-7-1962, effecting temporarily
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