Allahbad High Court
K.B.ASTHANA
Dau Dayal - Appellant
Versus
State of U. P. - Respondent
Decided On : 04/27/1965
LAND ACQUISITION - NOTIFICATION - PUBLIC PURPOSE - COMPANY - COMPENSATION - VALIDITY - INTERPRETATION OF NOTIFICATION - PUBLIC PURPOSE AND COMPANY DISTINGUISHED - EXTRINSIC CIRCUMSTANCES - AGREEMENT WITH COMPANY - RELEVANCE - PUBLIC PURPOSE REGARDED AS BUILDING ACTIVITY OF COMPANY - INVALIDITY OF NOTIFICATION - NO PART OF COMPENSATION FROM PUBLIC FUNDS.
Fact of the Case:
The petitioners, enure holders of plots in Hamirpur, challenged the acquisition proceedings initiated by the State Government for the construction of buildings by a Co-operative Housing Society. The notifications under Sections 4 and 6 of the Land Acquisition Act, 1894, declared the land was needed for a public purpose, but the entire compensation was to be paid by the Society. The petitioners contended that the acquisition was ultra vires, not for a public purpose, and amounted to a compulsory transfer of ownership to a private entity.
Finding of the Court:
The Court held that the impugned notifications were invalid as they declared the land was needed for a public purpose, but no part of the compensation was coming from public funds. The Court distinguished between a public purpose and a company's purpose, emphasizing that the notification must clearly indicate the land was needed for a company. The Court rejected the argument that extrinsic circumstances, such as agreements with the company, could be used to interpret the notification. The Court also found that the Government regarded the construction of buildings by the Society as a public purpose itself, making the distinction between public purpose and company purpose even more crucial.
Issues: 1. Whether the impugned notifications under Sections 4 and 6 of the Land Acquisition Act, 1894, were valid, considering that the entire compensation was to be paid by the Co-operative Housing Society and no part of it came from public funds. 2. Whether the acquisition was ultra vires, not for a public purpose, and amounted to a compulsory transfer of ownership to a private entity.
Ratio Decidendi: 1. The validity of an acquisition for a public purpose depends on whether the compensation either wholly or in part comes from Government funds. If the compensation is not payable from Government funds, the declaration that the land is needed for a public purpose is invalid. 2. A notification under Section 6 of the Land Acquisition Act must clearly declare that the land is needed for a company. The mere mention of the company's name in the notification, without explicitly stating that the land is needed for the company, is insufficient. 3. Extrinsic circumstances, such as agreements with the company, cannot be used to interpret the notification and determine the purpose of the acquisition. 4. The Government's view that the construction of buildings by the Society constituted a public purpose did not alter the legal requirement that the compensation must come from public funds for the acquisition to be valid.
Final Decision: The Court allowed the petition, directing the opposite parties not to take any further proceedings under the Land Acquisition Act in pursuance of the impugned notifications and not to interfere with the petitioners' rights and title to the disputed plots. The petitioners were also awarded costs.
ASTHANA, J. :- The petitioners are the enure holders of plots No. 74, .99 acres in area and Nos. 58, 59 and 73, 2.6 acres in area situate in mauza Hamirpur, Pargana Hamirpur, district Hamirpur. It appears that the said plots lie almost in the abadi of Hamirpur Town. A Co-operative Society known as the Co-operative Housing Society Limited has been formed by certain persons whose object is to construct residential houses for its members on no profit, no loss basis. The said society applied to the State Government to acquire land for it for the purpose of fulfilling its object of constructing houses. By a notification under Sub-S. (1) of S. 4 of the Land Acquisition Act, 1894, dated July 8, 1957 published in the Uttar Pradesh Gazette, dated 13th July 1957, the Collector of Hamirpur notified for general information that the abovesaid plot No. 74, .99 acres in area was needed for a public purpose. This notification against the heading for what purpose required' mentioned for construction of buildings by Cooperative Housing Society Limited, Hamirpur. A similar notification with regard to the above-said plots numbers 58, 59 and 73, dated 9-1-1957 was published in the Uttar Pradesh Gazette, dated 19-1-19,57. The Co-operative Society being a company within the meaning of Land Acquisition Act, proceedings were taken by the State Government under Part VII of that Act. On enquiries made by the Collector certain recommendations were made, a draft agreement as required by the provisions of Part VII was prepared and executed. Then in the Uttar Pradesh Gazette, dated 18-8-1961 the said agreements were published. In the gazette of the same date two notifications under S. 6 of the Land Acquisition Act were published, one in respect of plot No. 74, .99 acres in area, and the other in respect of plots numbers 58, 59 and 73, 2.6 acres in area. In these notifications it was declared that the land was needed for public purpose. There was no mention in either of the notification that the land was needed for a company. Again in both the notifications against the heading for what purpose required' it was mentioned "for the construction of building by Cooperative Housing Society Ltd.". There is nothing on the record before me as to what further proceedings were carried on in regard to the acquisition. The petitioner filed the present writ petition on 15-2-1964 before this Court challenging the acquisition proceedings in regard to plot No. 74 and the other three plots Nos. 58, 59 and 73. In paragraph 9 of the petition it was stated that the petitioners have received no notice under S. 9 of the Land Acquisition Act so far but the respondents, that is, the State of Uttar Pradesh and the Collector of Hamirpur. The Land Acquisition Officer and the Co-operative Housing Society Limited threatened to take the land of the petitioners in pursuance of the aforesaid acquisition proceedings. From these allegations in the petition it appears that the petitioners came to this Court when they found that the authorities were taking steps to dispossess them. The acquisition has been challenged by the petitioners on the ground that the acquisition proceedings were wholly ultra vires of the Land Acquisition Act; that the acquisition was bad as the provisions of Sub-S. (5) of S. 41 were not complied with; that the acquisition was neither for public purpose nor was it useful to the public, and it merely amounted to the compulsory transfer of the ownership of the 'and of the petitioners to some other private persons. Later on an application was filed raising further grounds of law which has been granted. The further grounds which have been raised are that the notifications under S. 6 of the Land Acquisition Act show the acquisition of the land for public purpose and since no part of the compensation has come from the State the notifications were bad in law; that the acquisition in effect being for the company the provisions of Part VII of the Act not having been comp
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