2022 Supreme(Mad) 2399

IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. DHANDAPANI, J.
M/s. Larsen & Toubro Ltd., Rep. by its Dy. General Manager, A. Sukumaran, Puducherry - Appellant
Versus
Union Territory of Puducherry Rep. by the Secretary to Government & Others - Respondent
W.P. No. 28610 of 2007
Decided On : 20-06-2022

The invocation of the urgency provision u/s 17 (4) of the Land Acquisition Act, 1894, to dispense with the enquiry u/s 5-A of the Act, is not justified in cases where the acquisition is for an industrial purpose, such as the establishment of a SEZ, which normally takes a long time to be established, and there is no real urgency involved.

Headnote:

LAND ACQUISITION - URGENCY CLAUSE - SECTION 17 OF THE LAND ACQUISITION ACT, 1894 - INVOCATION - CONDITIONS - PUBLIC PURPOSE - INDUSTRIAL PURPOSE - SEZ - DELAY IN ACQUISITION PROCESS - NON-ISSUANCE OF NOTICE TO THE PETITIONER - VIOLATION OF PRINCIPLES OF NATURAL JUSTICE - QUASHING OF ACQUISITION PROCEEDINGS.

Fact of the Case:

Petitioner, a large integrated engineering and private sector construction company, purchased lands in Sedarapet and Karasur Villages in Pondicherry in 1997. The petitioner constructed large factory buildings and established industry in the said land after obtaining necessary permissions from the various authorities. The petitioner was not served with the mandatory notice u/s 9 of the Land Acquisition Act, 1894, which is a pre-requisite for taking possession in line with the emergency powers conferred upon the 3rd respondent. The setting up of a SEZ has come to naught and the acquisition proceedings stood frustrated with the rejection of the application of the respondent for approval of the proposed SEZ by the Board of Approval. The lands having been acquired for the establishment of a SEZ, which plan has since stood frustrated due to rejection of the approval, the acquisition is no longer permissible.

Finding of the Court:

1. Invocation of the urgency clause u/s 17 (4) in and by which the enquiry contemplated u/s 5-A of the Act was dispensed with, is not justified as the acquisition is for SEZ, which normally takes about three to four years to be established, and there is no necessity for invoking the urgency clause. 2. Non-service of notice on the petitioner, who is the owner and occupier of the property in question, is a clear violation of principles of natural justice. 3. The delay of ten month period between the Notification u/s 4 (1) and the Declaration u/s 6 is sought to be countenanced by submitting that the extent of the lands involved and the number of persons, whose lands are sought to be acquired and the hearing given to them in all earnestness have resulted in the delay, yet this act of the respondents go to prove that the project is not of such urgent nature warrant invocation of Section 17, however, the said delay would itself stand testimony for the fact that the invocation of the urgency provision is for certain ulterior reasons, as otherwise, the respondents would not have taken such a long time to complete scrutiny of the representations/objections of the land owners. 4. The invocation of the urgency provision for acquiring the land by bypassing the mandatory notice u/s 5-A of the Act is wholly unsustainable.

Issues: 1. Whether the invocation of the urgency clause u/s 17 (4) in and by which the enquiry contemplated u/s 5-A of the Act was dispensed with, is justified? 2. Whether the non-service of notice on the petitioner, who is the owner and occupier of the property in question, is a violation of principles of natural justice?

Ratio Decidendi: 1. The urgency provision u/s 17 (4) can be invoked to dispense with enquiry u/s 5-A of the Act, but the exceptional and extraordinary power of doing away with an enquiry u/s 5-A in a case where possession of land is required urgently or in an unforeseen emergency should not be resorted to in a routine manner and the surrounding circumstances warranting immediate possession should considered and the said power should not be lightly invoked for dispensing with the enquiry. 2. The existence of urgency cannot be a matter of judicial review, but, however, there is no total ouster of power of exercising judicial review. 3. Acquisition of land for residential, commercial, industrial or institutional purposes can be treated as an acquisition for public purposes within the meaning of Section 4 but that, by itself, does not justify the exercise of power by the Government Under Sections 17(1) and/or 17(4). 4. The court can take judicial notice of the fact that planning, execution and implementation of the schemes relating to development of residential, commercial, industrial or institutional areas usually take few years and, therefore, the private property cannot be acquired for such purpose by invoking the urgency provision contained in Section 17(1). 5. In any case, exclusion of the Rule of audi alteram partem embodied in Sections 5-A(1) and (2) is not at all warranted in such matters.

Final Decision: The impugned acquisition proceedings by issuance of Notification u/s 4 (1) and the consequent Declaration u/s 6 of the Land Acquisition Act, 1894, issued by the 2nd respondent stand vitiated and, accordingly, the same deserve to be quashed.