Public purpose for which the land was acquired does not exist.

A.K. Ganguly, C.J.

This appeal has been filed challenging a judgment and order dated 30th April, 2008 passed by a learned Judge of the writ court, whereby the learned Judge dismissed the writ petition.

2. The material facts of the case, which are not in dispute, are as follows:-

The appellant GHCL Limited, the writ petitioner, and also the appellant, is a public limited company registered under the Companies Act, 1956. Sri Meenakshi Mills Limited, hereinafter referred to as the “erstwhile company” was declared a sick company in the year 1996 by BIFR. Thereafter, the said sick company, as per the Rehabilitation Scheme merged with the appellant company. The Scheme of Merger was sanctioned by BIFR and the merger took place w.e.f 01.04.2001.

3. Much prior to that there was an acquisition of land measuring to the extent of 4.72 acres in Thiruparankundram Village, Madurai by the Government of Tamil Nadu in favour of the said erstwhile company on 210. 1957 and thereafter an agreement was entered between the erstwhile company and the Revenue Divisional Officer, Madurai who handed over the possession of the said land to the erstwhile company.

4. Learned counsel for the appellant referred to the agreement dated 23rd October, 1957 entered into between the erstwhile company and the State Government. The said agreement refers to the application made by the said company to the State Government for acquiring certain lands on behalf of the company under the provisions of the Land Acquisition Act, 1894. It is made clear in the said agreement that such acquisition is needed for the construction of a work, which is likely to prove useful to the public namely, construction of quarters for the staff and workmen of the erstwhile company. Learned counsel for the appellant referred to clause 3(e) of the said agreement. The said 3(e) is set out below:-

3. The terms upon which the said land shall be held by the company are:-

e. That in the event of the voluntary relinquishment of the land by the company as not required for the purpose for which it was acquired, the Governor may resume the land if it is required for a public purpose or if they consider that it should be returned to the original owner. If the Government decides not to exercise this power and inform the company accordingly, the latter may dispose of the land in any manner it likes. In the event of the resumption of the land under this condition, the compensation payable to the company shall be the value of the land at the time of acquisition (less 15 per cent awarded for compulsory acquisition), or its value at the time of resumption, whichever may be less together with the value of the buildings and other improvements at the time of resumption. If there are buildings on the land which the Government do not require, the company shall remove them at its cost.”

5. Learned counsel for the appellant submitted that the erstwhile company constructed about 165 staff quarters on a land measuring 3.44 acres out of the acquired lands of 4.72 acres. The admitted position is that in respect of the remaining area i.e., about 1.28 acres, no construction has been made by the erstwhile company.

6. As the remaining part of the acquired land i.e., 1.28 acres was not utilized for any public purpose, the original owner filed a writ petition before this Court being W.P.No. 5311 of 1986. The said writ petition was disposed of by a learned Judge of this Court by a judgment and order dated 21st June, 1986. In the said writ petition, the erstwhile company was impleaded as a party. Though the company was served, it did not appear. Ultimately, the writ petition was heard and disposed of by a learned Judge. In the said writ petition, the State Government also filed a counter affidavit, in which the Government took a stand that the Government would take necessary action in the event of failure on the part of the erstwhile company to carry out the agreement. In the said judgment, it was noted by the