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High Court Of Madhya Pradesh
P. V. Dixit, C. J. and K. L. Pandey, J.
SHYAM BEHARI - Appellant
Versus
STATE OF MADHYA PRADESH - Respondents
Misc. Petn. 81 Of 1961
Decided On : 08/08/1961
LAND ACQUISITION ACT - Acquisition of land for a company - Public purpose - Agreement between the State and the company - Validity - Satisfaction of the Government under Section 40 - Scope of judicial review - Terms on which the public shall be entitled to use the work - Whether a mandatory requirement.
Fact of the Case:
The petitioners, owners of land in Mouza Chhaparwah, Katni tahsil of Jabalpur District, challenged the acquisition of their land by the State under sections 4 and 6 of the Land Acquisition Act, 1894, for the construction of godowns and administrative buildings of the Premier Refractories of India Private Limited. The petitioners contended that the acquisition was not for a public purpose but for a private limited company and that the words 'or for a Company' appearing in Section 6 of the act were ultra vires.
Finding of the Court:
The Court held that the acquisition of land for the respondent-company was for a public purpose as the construction of works needed for manufacturing fire-clay and alumina bricks, which are used in steel plants and save considerable foreign exchange, would contribute to the general welfare and prosperity of the whole community. The Court further held that the agreement between the State and the respondent-company was valid and that the satisfaction of the Government under Section 40 was not subject to judicial review provided the Government acted in good faith and not in fraud of its powers. The Court also held that the insertion of a specific term in the agreement regarding the user by the public of the works was not a mandatory requirement.
Issues: 1. Whether the acquisition of land for a company can be for a public purpose? 2. Whether the agreement between the State and the company was valid? 3. Whether the satisfaction of the Government under Section 40 is subject to judicial review? 4. Whether the insertion of a specific term in the agreement regarding the user by the public of the works is a mandatory requirement?
Ratio Decidendi: 1. Acquisition of land for a company can be for a public purpose if it is likely to prove useful to the public, even if the company earns some profit for itself. 2. The agreement between the State and the company is valid if it provides for the matters mentioned in Section 41 and the Government is satisfied that the acquisition is necessary for the construction of some work which is likely to prove useful to the public. 3. The satisfaction of the Government under Section 40 is not subject to judicial review provided the Government acts in good faith and not in fraud of its powers. 4. The insertion of a specific term in the agreement regarding the user by the public of the works is not a mandatory requirement.
Final Decision: The petition was dismissed with costs to the respondent-State and the respondent-company.
( 1 ) THIS application under Article 226 of the Constitution is for the issue of a writ of certiorari for quashing two notifications dated 8th July 1960, and 3rd December 1960 issued by the State under sections 4 and 6 of the Land Acquisition Act, 1894, for the acquisition of certain lands belonging to the petitioners and for the issue of a direction to the respondents forbearing them from exercising any rights over those lands,
( 2 ) IT is necessary to state the facts in some detail in order to reach and appreciate the questions to be determined. The petitioners are the owners of land admeasuring 17. 82 acres in Mouza Chhaparwah (Settlement No. 245) in Katni tahsil of Jabalpur District. The respondent No. 4 is a private limited company known as the Premier Refractories of India which proposes to manufacture fireclay bricks, high alumina bricks etc. On 26th April 1960 the said respondent addressed a letter to the Collector, Jabalpur, saying inter alia that the Government of India had sanctioned the installation by the said company of a refractory factory at Katni for the manufactures of fire-clay and high alumina bricks which were not being manufactured in India; that the Company had selected a site adjoining to the railway station at New Katni Junction for the establishment of a refractory; and that as the land which was in possession of the Company was insufficient for the erection of the factory, the Company desired to acquire lands specified in the schedule to the letter. The letter proceeded to say:
"according to the proposed layout of the factory it is proposed to put up godowns, administrative buildings and also provide some recreation ground for the workers of the company and other amenities and also siding facilities. "that the Company is willing to enter into an agreement with the provincial Government for the purposes of this acquisition and is willing to defray all costs of this acquisition. "that the Company has selected and acquired the land in this area because of Railway siding facilities that can be made available and therefore the land applied for is also required for the purpose of Railway siding. " on this representation of the respondent No. 4, which was supported by the collector, the State Government issued a notification under Section 4 of the Act on 8th July 1960. The notification was in Hindi. It began with a recital to the effect that 'it appeared to the Government that lands specified in columns 1 to 4 of the schedule were needed or likely to be needed for the public purpose specified in column 6 of the Schedule. It then proceeded to make a notification under Sec. 4 of the Act to that effect. The public purpose specified in column 6 of the schedule was stated to be the construction of godowns and administrative buildings of the premier Refractories of India Private Limited. The petitioners thereupon filed their objections under Section 5-A of the Act to the proposed acquisition con-tending inter alia that the lands were very valuable and much in demand and were not being acquired for a public purpose. All these objections were rejected by the Land Acquisition Officer who made a recommendation to the Government that a notification Under Section 6 of the Act should be published for the acquisition of 20. 96 acres of land in village Chhaparwah (Survey No. 245) of Katni Tahsil.
( 3 ) ON the 10th October 1960, the respondent No. 4 executed an agreement in favour of the respondent-State. The material part of the agreement is as follows:
"whereas the Company has requested the State Government to acquire, under the provisions of the Land Acquisition Act, 1894 (I of 1894) (hereinafter referred to as the said Act), the land bearing total Khasra nos. 37 measuring 20. 98 acres situated in Mauza Chhaparwah, settlement No. 243 of Tahsil Murwara, District Jabalpur, more particularly described in the schedule hereunder and for greater clearness delineated on the plan annexed hereto and thereon coloured re
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