1964 Supreme(SC) 43

SUPREME COURT OF INDIA
14th February, 1964
P.B. GAJENDRAGADKAR, C.J.I., K.N. WANCHOO, K.C. DAS GUPTA, J.C. SHAH AND N. RAJGOPALA AYYANGAR, JJ.
R. L. Arora, Petitioner
Versus
State of U.P. and others, Respondents;
Petn. No. 137 of 1962.
1. Patel Mangalbhai and others and 2. Kaira District Co-operative Milk Producers Union Ltd., Interveners.
Advocates appeared
Mr. C. B. Agarwala, Senior Advocate, (Mr. Naunit Lal Advocate, with him ) , for Petitioner ; Mr. M.C. Setalvad, Senior Advocate, (Mr. C.P. Lal, Advocate, with him), for Respondent No. 1 : Mr. C. K. Daphtary, Attorney General for India and Mr. N. S. Bindra, Senior Advocate, (Mr. R. H. Dhebar, Advocate with them), for Respondent No. 2 ; Mr. M.C. Setalvad, Senior Advocate . (M/s. M. S. Devendra Swarup and J. P. Goyal, Advocates, with him), for Respondent No. 3; Mr. I. M. Nanavati, Advocate and M/s. O. C. Mathur, J. B. Dadachanji and Ravinder Narain, Advocates of M/s. Dadachanji and Co., for Intervener No.1 ; M/s. Rajani Patel and I. N. Shroff, Advocates for Intervener No. 2.

Land acquisition for a company engaged in a public purpose industry is constitutional if the building/work also subserves that purpose. Validating legislation can revive previously quashed acquisitions if they satisfy the revised statutory criteria for public purpose, and distinguishing public from private companies is a reasonable classification.

Headnote:(A) Land Acquisition Act, 1894 - Sections 40 and 41; Land Acquisition (Amendment) Act, 1962 - Sections 40(1)(aa), 41, and 7 - Constitution of India - Articles 14, 19(1)(f), and 31(2) - Compulsory acquisition of land for a company - Public purpose - Validity of validating legislation - The provision allowing acquisition for a company engaged in an industry for a public purpose must be interpreted such that the building or work for which land is acquired also subserves that public purpose. A literal and mechanical construction is not the only interpretation; the public purpose of the industry implicitly attaches to the building or work. Such a provision does not contravene the requirement that property be acquired only for a public purpose nor does it constitute an unreasonable restriction on the right to hold property. (Paras 8, 9)

(B) Land Acquisition (Amendment) Act, 1962 - Section 7 - Validating provisions - A deeming provision that validates previous acquisitions by subjecting them to new statutory criteria does not create an irrebuttable presumption of public purpose. It merely requires that the acquisition be judged in accordance with the new provisions. Such a mechanism does not discriminate between acquisitions made before and after the amendment date and is not hit by Article 14. (Paras 11, 12, 13)

(C) Validating Legislation - Scope - Legislation containing the phrase "notwithstanding any judgment, decree or order of any court" is intended to declare valid actions that were previously held invalid by courts. Once the legislature declares such action valid, the notifications or steps taken in connection therewith are validated to the extent of the validation. (Para 14)

(D) Land Acquisition (Amendment) Act, 1962 - Section 44-B - Classification - A distinction between public/government companies and private companies/individuals regarding the power to acquire land is reasonable. The classification has a nexus with the object of the law, as acquisition for public companies results in public gain, whereas acquisition for private entities may result in private enrichment. (Para 17)

Facts of the case:
Land was acquired for a company to construct a factory. The acquisition was initially quashed by the court on the grounds that it did not satisfy the requirements of public purpose. Subsequently, an amendment was introduced to the land acquisition law to expand the scope of "public purpose" for companies and to validate previous acquisitions. The owner of the land challenged the constitutionality of these amendments, arguing they violated fundamental rights to property and equality.

Findings of Court:
The amendments to Sections 40 and 41 are constitutional as they implicitly require the building or work to subserve a public purpose. Section 7 is valid as it subjects previous acquisitions to the same test of public purpose rather than creating an absolute presumption. The distinction between public and private companies is justified by the objective of the legislation.

Issues: Whether the amendment allowing land acquisition for companies engaged in public purpose industries is ultra vires the Constitution; whether the validating provision creates an illegal irrebuttable presumption of public purpose; and whether the distinction between public and private companies is discriminatory under Article 14.

Ratio Decidendi: The court held that the "public purpose" of a company's industry attaches to the building or work for which land is acquired. Validating legislation can revive previously quashed acquisitions if they meet the revised statutory criteria. Classification based on the nature of the company (public vs. private) is justified to prevent private enrichment through the exercise of eminent domain.

Result: Petition dismissed.