Holding

Compliance with Rule 4 of the Land Acquisition (Companies) Rules, 1963 is not a mandatory prerequisite for the issuance of a Section 4 notification under the Land Acquisition Act, 1894.

Summary

Fomento Resorts and Hotels Ltd. applied to acquire land owned by Gustavo Ranato da Cruz Pinto under Chapter VII of the Land Acquisition Act, 1894. The government issued a preliminary notification under Section 4 in October 1980, followed later by a Section 6 declaration after an agreement with the acquiring company. The landowner challenged both notifications, and the Bombay High Court quashed them on the ground that the enquiry required by Rule 4 of the Land Acquisition (Companies) Rules, 1963 had not been completed before the Section 4 notification. On appeal, the Supreme Court held that compliance with Rule 4 is not a mandatory pre‑condition for issuing a Section 4 notification; the enquiry may be conducted before or after, but it is not essential. Consequently, the High Court’s decision was set aside and the matter remitted for determination of the remaining grounds of challenge. The Court emphasized the scheme of the Act, the role of Section 6, and the need to avoid procedural rigidity that would disturb compensation valuation.

Issues considered

Whether compliance with Rule 4 of the Land Acquisition (Companies) Rules, 1963 is mandatory before the issuance of a notification under Section 4 of the Land Acquisition Act, 1894.

Legislation cited

Land Acquisition Act, 1894s. 16, s. 23, s. 39, s. 4, s. 40, s. 41, s. 5A, s. 6
Land Acquisition (Companies) Rules, 1963s. Rule 4 (sub‑rule (1) and (4))

Subjects

Land acquisitionSection 4 notificationRule 4CompaniesPublic purposeCompensation valuationProcedural requirement

Judgment

931

A
FOMENTO RESORTS AND HOTELS LTD.
• •
v.

GUSTAVO RANATO DA CRUZ PINTO & ORS.

20th February, 1985 B

[0. CHINNAPPA REDDY, E.S. VENKATARAMIAH,
SABYASACRI MUKHARJI, JJ.)

Land Acquisition (Companies) Rules; 1963 Rule 4-Whether compliance
of Rule 4 is mandatory before issuing the Notification under Section 4 of the c
Land Acquisition Act, 1894 in re~pecL of acqflisitlon of land for the purpose of
a company-Practice and ProcJdure-Where several conte11.tlons factual afld legal
are urged in a case and where there is a scope of an appeal from the decision
of the Court1 High CourtJ and Courts below 3hould not merely rest its decisiPtt
on one single point.
D
The appellant made au application on the lSth November, 1978
under chapter VII of the Land Acquisition Act, 1894 for the acquisition of
1 the lands earlier purchased by Respondent No. 1 herein. The Government
issued on the 29th October, 1980 a notification for acquisition of the said
land under section 4 or the Act which was published in the Government
Gazette dated 30th October, 1980. Respondent No, I objected to
the said notification. Subsequently the Government held an enquiry und~r
E
section SA of the Act and, after submitting a report in March 1981, on or
about 10th April 1981, the Deputy Collector issued notice to Respondent
No. I that enquiry· under rule 4 of the Land Acquisition (Companies)
Rules l 963 would be held on the 15th April, 1981 to which the latter
filed his objections on merit by his letter dated 4th May, 1981. On 26th
October, 1983, agree1neat was executed bt:twcen the government and the
acquiring company. A notification under section 6 that the land in question F
was needed for the purpose of development of tourism, was published in
the Government Gazette dated 27th October 1983.

Respondent No. I, thereupon, filed a petition under Article 226 of
the Constitution challenging the said notifications under sections 4 and 6 of
the Land Acquisition Act. The High Court of Bombay (Goa Bench) G
, quashed the said notifications on the first ground alone namely, th• noti·
fications were bad for prior non-compliance with Rule 4 of the Land
Acquisition (Companies) Rules 1963, and noted that it was not necessary
to deal with other grounds of challenge. Hence the appeal by special
leave.
938 SUP!u!l4B COURT REPORTS [1985] 2 S.C.R.
A Allowing the appeal and remitting the case back, the Court

HBLD : 1. On a correct interpretation of the scheme of the Land
Acquisition Act, it is not necessary that enquiry under ru1e 4 of the Land
Acquisition (Companies) Rules, 1963 must in all cases precede issuance of
the ootiftcation under section 4 of ihe Act. In an appropriate case if it is
B possible, enquiry under rule 4(1) may be held before the issuance of the
notification under section 4. But it is not a mandatory requirement that
it must precede the issuance of the notification under the Act. [949B-C]

Rqja Ram lalswal v. Collector, Allahabad & Another, (1980) 2 !LR
Allahabad 269; conclusion approved,
c
lhlbu B•rt:fa !latur v. State of Bombay (now Maharashtra), AIR
1960 SC 1203 at 1206, followed.

Abdul HUJein Tayaball & Ors. v. State of Gujarat & Ors., [1968]
I SCR 597, explained and distinguished.

D 2.1. A consepectus of the provisions of the Land Acqui::>i,ion Act
as well as Land Acquisition (Companies) Rules 1963 indic.:ite that there
are two purposes of acquisition of land-one being for the public purpose
and other for the purpose of a company, In case or acquisition for com.
pany, the appropriate Government has to satisfy itself that such acquisition
is needed and would be useful also for public need. [943E·P]

:2.l Land Acquisition proceedings begin with the publication of the
preliminary notification under scctiOn 4 of the Land Acquisition Act, 1894.
When t.hc acquisition is for a company the purpose has to be investigated
under 1ection 5A (by hearing objections and disposing them) or under
section 40 necessarily after the notification under section 4 of the Act.
Under section 6 if the Government is satisfied after considering the report,
F if any, made under section SA that any particular land was needed for
public purposes or for a company a declaration shall be made to that effect
subject to certain conditions stipulated therein. Sub·rule 4 of Rule 4 of
the Land Acquisition (Companies) Rules 1963 provides that no declaration
shall be made by the Appropriate Government under section 6 of the Act
unless (i) the appropriate government had consulted the committee and had
considered the report submitted under the said rule and the report if any,
G submitted under section SA of the Act and (iQ further any agreement under
section 41 of the Act executed by the Company.

To complete the acquisition proceedings notification under section 6 .'r
of the Act is required. Section 6 of the Act enjoins that the government
bas to be satisfied that the land is needed for public purpose or for a '
company and after declaration is made the acquisition is complete after the
award i1 made and posse~sion of the land is taken when the land vests
under 1ection 16 in the government free from encumbrances. Section 4
F.R. & HOTELS •• G.R.o.c. PINTO 939

does not require as such thia satisfaction or th1 a:overnment. The govern- A
ment might initiate acquisition proceedings uir it appears'' to the govern-
ment that land is needed either for public purpose or_ for a coinpany.
That miaht appear to the government by_ enquiry a!Uvufe or on a petition or
application madC by any company. Whether the noed is proper or ge'nu-ine
that can be found by the government subsequently after notice Under
section 4 of the Act. An enquiry under ru1e 4 might be mJde before
' ·issuance of the notification under section 4 of the Act but it is not a sine n
qua non for the issuance of the notification undCr section 4 to have an
enquir1 under rul~ 4 of the Rules. The scheme and the language of the
Act and the Rules do not indicate that. Therefore., section 4 as such does
noi require government to be sit.tisfied., it is sufficient if it appears to the
government that land is needed either for public purpose or for a compiny.
It may so appear to the govornment either by independent inquiry_ or from
reports and information received by the go'vernment or evell. from an appJi..
cation by the company concerned. [9HH; 944A·F]

2.3 It is undoubtedly true that a notification under section 4 can
be iss;ued after enquiry under rule 4. But under the scheme of the Act.,
the converse is not correct, i.e., the enquiry Under rule 4 most always
precedo notification Under section 4 of the Act. though enquiry under rule o·
·4(1) must precede action under section d of the Act. Further ·certain
0

· matters which are required to be d one under rule 4 ·-cannot be done before
because the officCr Or the person antborised by him would have no autho:.;./,
~ity, unless notification under section 4 is issued. [9450-H; 946A]

.~ R.ulo 4(4) does not prohibit or forbid issuance of notification undCr
' section 4 of the Act unless rule 4(1) has been compiled with. If Jt is now E
insisted that ther• 1hould be no issuance of noti!cation under section 4 of
the Act before enquiry under rule 4 then this sub-rule has to be re-written
by statina: that no notificatioa under section 4 and no declaration under sec- . ,
tion 6 issued or made as the caso may be unless the requirements mentioned in ,·
clauses {iJ and (ii) ofsuh·rule (4) of rule 4 have been complied with. On·
the contrary., it will be contrary t.o the scheme and purpose of the acquisi-
- tion proceedings because the compensation for the acquisition has to be
fixed :µoder section 23 of the Act keeping the market rate as oa tho date of F
. the issuance of the notification under section 4 in view. If it be that the,
enquiry as contemplated by rule 4 shou!d also precede issUance Or noti'ce
under section 4 of the Act then that may upset the fisation of the market
value ·and escalation of price with the passage of time between publication .
of the notificiltion under sections 4 and 6 would make acquisition difficult.
(94SA-D]
G
3. Jn a matter of this nature where several contentions factual
and legal are urged and when there is scope of an appeal from the decisions
of the Court., it is desirable as was observed by the -_PrivY . Council Jong
time ago to avoid delay and protraction of litigatio_n that thC~cour~ should., _
when dealing with any matter dispose of all the points and · not merely rest ·-
its decision on one single point. [9SOA·B] · ·r H "
'
940 SUPREMB COURT REPORTS (1985] 2 S.C.R.

A CIVIL APPELLATE JURISDICTION : Civil Appeal No. 504 of 1985

From the Judgment and Order of the High Court of Bombay,
Panaji Bench (Goa) dated the 26th June, 1984, in writ Petition No.
8of1984.

B B. Zaiwa/a, Anil B. Divan, Usgaonkar, Ravinder Narain, and , .
'

Aditia Narayan, for the Appellant.
f

S.C. Desai, M.M. Abdul Khader, Naunit Lal, Kai/ash Vasdev,
Mrs. Vinod Arya, and Miss A Subhashini for the Respondents.

c The Judgment of the Court was delivered by

SABYASACHI MUKHARJI, J. Special leave granted. , ...
This appeal filed by M/s F omento Resorts and Hotels Limited
raises the short question as to whether compliance with rule 4 of
D the Land Acquisition (Companies) Rules, 1963 (hereinafter called
the Rules) is necessary before issuing notifications under section 4
of the Land Acquisition Act, 1894 (hereinafter referred to as the
Act).

It appears that the land in question was purchased by Gustavo
E
Ranato da Cruz Pinto hereinafter referred to as the land owner and ,.
the original respondent No. I on 10th of March, 1978. The original
respondent No. 2 and the appellant herein on the 15th November,
1978 made an application under Chapter 7 of the Act for the
acquisition of the said properties. The government issued on the
29th October, 1980 notification in respect of the land in question
F under section 4 of the Act which was published in the Government
Gazette dated 30th October, 1980. The land owner being respondent
No. I to this appeal objected to the said notification under section 4.
Subsequently government held enquiry under section SA of the Act
and the Deputy Collector submitted the report to the Government in
March, 1981. On or about 10th April, 1981, the Deputy Collector
issued notice to respondent No. I that enquiry under rule 4 of the
G Rules would be held on 15th April, 1981. '!he respondent No. I
filed his objections on merit by the letter dated 4th May, 1981. On
26th October, 1983, agreement was executed between the government .-
.

and the acquiring company that the land in question was needed '
for the purpose of development of tourism. The government issued
notification under section 6 of the Act which was published in the
ff government Gazette dated 27th October, 1983.
F.R. & HOTELS'· G.R.o.c. PINTO (S. Mukhiirji, J.) 941

The petition under Article 226 out of which this appeal arises A
was filed in the Bombay High Court by respondent No. 1 challenging
the said notifications under sections 4 and 6 of the Act. The High
court of Bombay (Goa Bench) quashed the said notifica-
tions under sections 4 and 6 of the Act only on the
ground that enquiry under rule 4 of the Rules was not held
prior to the notification under section 4 of the Act. The propriety B
and validity of the said decision of th~ High Court are under
challenge in this appeal. The High Court, however, noted that the
impugned notificat;on had been challenged on several other grounds
but in the view it had taken on the first ground namely that the
notifications under sections 4 and 6 of the Act being bad for
prior non-compliance with rule 4 of the Rules, the High Court
c
felt that it was not necessary to deal with other grounds. The
petition succeeded before the High Court and the notifications
under sections 4 and 6 of the Act were quashed. This appeal is
filed against the judgment of the High Court.
D
Under the scheme of the Act, it is necessary for the purpose of
acquisition of land first to issue a notification under section 4 of the
Act, whenever it appears to the approprite government that land in
any locality is needed or likely to be needed for any public purpose.

The purpose and object of the notification under section 4 of E
the Act have been explained by this Court in the case of Babu
Barkya Thakur vs. State of Bombay (now Maharastra) and others'
thus:

"The purpose of the notification uncer section 4 is to
carry on a preliminary investigation with a view to finding F
out after necessary survey and taking of levels, and, if
necessary, digging or boring into the sub-soil whether
the land was adapted for the purpose for which it was
sought to be acquired. It is only under S. 6 that a firm
declartaion bas to be made by Government that land with
proper description and area so as to be identifiable is need- G
ed for a public purpose or for a Company. What was a mere
· proposal under S. 4 becomes the subject matter of a definite
, proceedings for acquisition under the Act. Hence, it is not
)
correct to say that any defect in the notification under S. 4

(I) AIR 1960 S. C. 1203 at 1208.
H
942 SIJPlUlMll COURT RllPORTS (1985) 2 s.c.R.

A is fatal to the vaidity of the proceedings, particularly when
the acquisition is for a Company and the purpose has to be
investigated under S. SA or S. 40 necessarily after the noti-
fication under S. 4 of the Act."

B This Court emphasised that when the acquisition is for a Compauy
the purpose has to be investigated under section 5A or section 40
necessarily after the notification under section 4 of the Act. The land r
acquisition proceedings begin with the publication of the preliminary
notification. Section SA enjoins heaing of the objections and dis-
posal of objections. Sections 6 of the Act provides that if the
c government is satisfied after considering the report, if any, made
under section 5A, that any particular land was needed for public
purpose, or for a Company, a declaration shall be made to that
effect subject to certain conditions mentioned in the various sub-sec-
tions of section 6 of the Act. After declatation under •ectio11 '· s1ctio11.
7 enjoins the Collector to take order for acqnisition of land. Variou1
D steps for the actual acquisition are enumerated in subsequent section of
the Act which need not be set out in detail. Section 16 empowers
taking of the possession after an award is made under section 11 and
thereafter the land shall vest in tho government free from all
encumbrances.
E
It is important to note that sect ion 23 of the Act deals with the
matters to be considered in determining compensation for acquisition
of land and it enjoins that the market value should be determined as
on the date of tho publication of the notificatian under section 4. In
other words section 23 pegs the market value of the land as on the
F
date of the notification under section 4 as one of the factors to be
taken into consideration in determining the compensation to be paid.
Part VII of the Act deals with acquisition of land for companies.
Section 4l of the Act provides that if the appropriate government is
satisfi~d after considering the report, if any, of the Collector under
section 5A, or on the report of the officer making an enquiry under
section 40 of certain matters, the details of which are not necessary
G for the purpose of appeal to be set out, it shall require the Company
to enter into an agreement with the appropriate government
providing for the satisfaction of the appropriate government for
certain matters enumerated in different sub-sections of section 40.
The said provisions need not be set out in detail. Essentially the
satisfaction and agreement with the company are to ensure that the
H
F.R. & HOTELS f. G.R.D.C. PINTO($. Mukharji, J.) 943

land in question will be put to such use which ivill be useful to the A
public.

Rule 3 of the Rules provides for the constitution of the Land
Acquisition Committee. Rule 4 is headed "Appropriate Govern-
ment to be satisfied with regard to certain matters before initiating
proceedings" and sub-rule (I) of rule 4 Jays down certain matters B
about which the appropriate government has to be satisfied when the
acquisition is for the Company. Sub-rule (4) of rule 4 of the Rules
provides that no declaration shall be made by the appropriate govern-
ment under section 6 of the Act unless (i) the appropriate govern-
ment had consulted the committee and had considered the report
su9mitted under the said rule. and the report, if any, submitted under
c
... section SA of the Act and (ii) further any agreement under section 41
of the Act executed by the Company. Rule 5 of Rules deals with
the matters which are to be provided for in the agreement under sec-
tion 41 of the Act. Rule 6 similarly deals witll. the additional matters
which might be provided in the agreement under section 41 of the D
Act. Rule 7 provides for submission of periodical reports. Rule 8
of the Rules deals with the conditions under which sanction is to be
given for transfer of land. Rule 9 deals with special provisions in
relation to certain Companies. It is not nocessar, to discuss these
rules in detail for the present purpose.
E
A conspectus of the provisions of the A.ct as weli as the Rules
indicate that there are two purposes of acquisition of land-one
being for the public purpose and the other for the purpose of a
Company. In case of acquisition for Company, the appropriate
government has to satisfy itself that such acquisition is needed and F
would be useful also for public need. Rule 4 of the Rules provi-
des for satisfaction of the appropriate government with regard to
various matters before acquisition.

The learned judges of the Bombay High Court were of the
view that the enquiry under rule 4 was necessary for the initiation
of the acquisition proceedings to be satisfied that acquisition was G
necessary for the Company.
,
We are unable to accept this conclusion for the following
reasons:

(i) To complete the acquisition proceedings, notification under H
944 SUPREMll COURT REPORTS [1985) 2 S.C.R.

A section 6 of the Act is required. Section 6 of the Act enjoins that I "'
the government has to be satisfied that the land is needed for public
purpose or for a Company arid after declaration is made the acquisi-
tion is complete after the award is made and possession of the
land is taken the land vests under section 16 in the government
free from encumbrances. Section 4 does not require as such this
B
satisfaction of the government. The government might initiate
acquisition proceedings "if it appears" to the government that land
is needed either for public purpose or for a Company. That might
appear to the government by enquiry aliunde or on a petition or
application made by any Company. Whether the need is proper
or genuine that can be found by the government subsequently after
c notice under section 4 of the Act. An enquiry under rule 4 might
be made before issuance of the notification under section 4 of the
Act but it is not a sine qua non for the issuance of the notification
under section 4 to have an enquiry under rule 4 of the Rules. The
scheme and the language of the Act and the Rules do not
D indicate that. As noted before, section 4 does not require govern-
rr;ent to be satisfied, it is sufficient if it appears to the government
that land is needed either for public pnrpose or for a Company. It
may so appear to the government either by independent enquiry or
from reports and information received by the government or even
from an application by the company concerned.
E
Section 6 undoubtedly requires satisfaction of the government
and enquiry contemplated under rule 4 must precede publication of
the notification under section 6 of the Act. So also there must be
before section 6 notification an enquiry under section 5A. The
significant pointer to the scheme is provided in sub-rule (4) of rule
F
4, the material portion of which reads as follows:-

"(4) No declaration shall be made by the appropriate
Government under section 6 of the Act unless-

(i) the appropriate Government has consulted the Com-
G mittee and has considered the report submitted under
this rule and the report, if any, submitted under
section 5A of the Act; and

(ii) the agreement under section 41 of the Act has been
executed by the Company."
H
F.R. & HOTELS v. G.l!..D.C. PINTO (s. Mukharji, J.} 945

The said sub-rule significantly does not prohibit or forbid
A
issuance of notification under section 4 of the Act unless rule 4 (l)
has been complied with. If it is now insisted that there should be
no issuance of notification under section 4 of the Act before enquiry
under rule 4 then this sub-rule has to be re-written by stating that
no notification under section 4 and no declaration under section 6
issued or made as the case may be unless the requirements mentioned
• • in clauses (i) and (ii) of sub-rule (4) of iule 4 have been complied
B

with. We find no warrant to do that. On the contrary, it will be
contrary to the scheme and purpose of the acquisition proceedings
because the compensation for the acquisition has to be fixed under
section 23 of the Act keeping the market rate as on the date of the
issuance of the notification under section 4 in view. If it be that c
the enquiry as contemplated by rule 4 should also precede issuance
of notice under section 4 of the Act then that may upset the fixation
of the market value and escalation of price with the passage of time
between publication of the notifications under sections 4 and 6
would make acquisition difficult.
D
An argument was sought to be built on the basis of the
heading of rule 4 which stipulates that "Appropriate Government
to be satisfied with regard to certain matters before initiating
acquisition proceedings". It is true that before the initiation of
the acquisition proceedings, government had to be satisfied of
certain matters mentioned in the various sub-rules of rule 4 as well E
as various provisions of the Act. Though preliminary steps for
initiation of acquisition proceedings are necessary and those can
only be taken by the authority of the notification under section 4
as mentioned in the decision of Babu Barkya Thakur v. State of
Bombay (now Maharashtra) and Others, (supra) the initiation of t'ie
acquisition proceedings for all practical purposes begins after F
section 6 notification. Satisfaction is necessary for proceeding for
acquisition under section 6 of 'the Act but section 4 unlike section
6 does not require for the issuance of the notice to be satisfied but
it might act only "when it appears" to it that the land is needed or
is likely to be needed for any public purpose.
G
Reading the Act and the Rules and keeping in view the
scheme of the Act, it is apparent, in our opinion, that before the
issuance of section 4 notification, there is no requirement as such
of compliance with the procedure contemplated by rule 4 of the
Rules. We are therefore unable to subscribe to the view that
H
946 SliPl!.EME COURT REPORTS (1985) 2 S.C.It.

A enquiry by rule 4 must precede tlte issuance of notification under
section 4 (I) of the Act. Furthermore as indicated before cortain
matters which arc required to be done under rule 4 can not be done
because the officer or the person authorissd by him would have no
authority unless notification under section 4 is issued.

B R•liance was placed before the Bombay High Court and
before us in iUpport of the judgment of the High Court on a
decision of this Court in the case of Abdul Husein Tayabali and
Ors. v. Stat< of Gujarat and Ors. (1). There the contention before
the Court was that Master was only a Special Land Acquisition
Officer and not the Collector within the meaning of rule 4. Further·
c more, it was urged, in any event, the notification in question
did not 'specially' appoint him but was a general notification
authorising all the Special Land Acquisition Officers in the State
appointed not only before the date of section 4 notification but also
those who would be appointed in future. It was further contend<d
that notification did not "appoint" but simply authorised him to
D
perform the functions of the Collector, the State Government had
not given any directions to him to make a report as required by
rule 4; therefore the enquiry held by him under that rule and the
report made by him was invalid and cons~quently no notification
either under section 4 or section 6 could be validly issued. It was
E urged, therefore, the section 6 notification was issued without com-
plying with Part VII of the Act and without the valid consent of
the State Government as required under section 39(iii), that the
acquisition was made malafide and without application of mind to
the relevant facts and the acquisition did not involve any public
purpose and the State government was bound to give an opportunity
F of being heard to the appellants before taking a decision under
section SA particlarly when the report made by Master was against
the acquisition.

In this connection our attention was drawn to section 39 of the
Act which provides that provisions of sections 6 to 37 (both inclusive)
G shall not be put into force in order to acquire land for any Company
unless with the previous consent of the approprate Government
nor unless the Company shall have executed the a&reement !herein-
after mentioned. 'fhis section, in our opinion, has no relevance for
determining whether to be a proper acquisition, enquiry contemp!at-

H
(1) {1968) 1 SCR $97,
F.R. & HOTilLS v. Q.R.o.c. PINTO (S. Mukharjl, J.) 947

ed under rule 4 must precede issuance of the notification under sec· A

tion 4 of the Act. In the decision of this Court refrrrod to herein-
before, this question did not really fall for consideration because
there was compliance with rule 4 before issuance of tho notification
and the infirmities of the enquiry under rule 4 u1ged on behalf of
the appellants were not establi1hed.
• • B

It was urged before this Court that the enqiry under rule 4 was
a quasi-judicial enquiry and therefore it was incumbent on Master
to give an opportunity to the appellants to be heard. This Court
was of the view that the rule provide that an officer conducting the
enquiry has to hear the Company before making his report. Whether c

... . he was also to hear the owners of the land or not did not fall for
decision in those appeals as the officer had in fact given such an
opportunity to the appellants by serving them with notices and
recorded the statement of such of them who cared to appear before
him. It was then contended thatthe enquiry under rule 4 had to be held
after the notification under section 4 was issued and not before and D
therefore the enquiry held by Master was not valid. This Court observed
at page 604 of the report "We do not find anything in rule or in any
other rule to warrant such a proposition. The enquiry, the report
to be made consequent upon such enqiry, obtaining the opinion of
the Land Acquisition Committee, all these intended to enable the
6overnment to come to a tentative conclusion that the lands
in question were or were likely to be needed for a public purpose
&nd to issue thereafter section 4 notification. In our opinion
no objection to the appointment of Master to perform the functions
of the Collector under section 3(c) or to his competence to make
the enquiry and the report under rule 4 or their legality can be
validly made." Ii

In our opinion when this Court observed that the report of the
enquiry under rule 4 was a factor to be taken into consideration and
"to issue thereafter section 4 notification" was by general observa-
tion. It is undoubtedly true that a notification under section 4 can
be issued after enquiry under rule 4. But under the scheme of the a
Act, the converse is not correct i.e. the enquiry under rule 4 must
always precede notification under section 4 of the Aet. In that deci-
, sion this Court analysed the importance of section SA and it is after
: considering th~ report under rule 4 and report under section SA that
notification under section 6 will be issued. It is undoubtedly true that
ff
948 SUPREME COURT REPORTS U985] 2 S.C.R.

A enquiry under rule 4(1) must precede action under section 6 but we
do not find reading the said decision of this Conrt in the context of
the facts and circumstances and the contentions urged in that case
that this· Court laid down any proposition that enquiry under rule
4(1) must precede issuance of notification under section 4. Indeed
as we have mentioned before, notification under section 4 would
B facilitate the matters to be enquired under rule 4(1).

Reliance was also placed on certain observations m the case of
General Govt. Servants Co-operative Housing Society Ltd,, Agra v.
Wahab Uddin & Ors. Etc. Etc. 1 There the scheme of the Act was
analysed and what were matters to be required under rule 4 of the
c Rules were mentioned. This Court observed at pages 53-54 of the
report as follows :

"No declaration shall be made by the approprfote
Government under section 6 of the Act unless the Com-
mittee has been consulted by the Government and has
D considered the report submitted by the Collector under
section SA of the Act. In addition, under clause (ii) of
sub-rule (4) of rule 4, the Company has to execute an
agreement under section 41 of the Act. The above consi-
deration ;hows that rule 4 is mandatory ; its compliance is
E no idle formality, unless the directions enjoined by rule 4
are complied with the notifications under section 6 will be
invalid. A consideration of rule 4 also shows that its com-
pliance precedes the notification under section 4 as well
as compliance of section 6 of the Act."

F It may be borne in mind in that decision the notification under
section 6 was quashed but notification under Section 4 was not
quashed though observations were made about the purpose and the
role of compliance with rule 4. Reliance was placed on the
following observations at page 54 of the report :

"A consideration of rule 4 also shows that its compliance
G· precedes the notification under section 4 as well as compli-
ance of section 6 of the Act."

It appears to us that the reference to rule 4 in the context in
which it was made was inadvertent. What perhaps the Court want-

H
(I) [1981] 3 S.C.R. 46.
F.a. & I-{OTELS v. G.RD.C. PINTO (S. Mukharji, J,) 949

ed to convey was the need of compliance of entering into agreement A
under section 41 before the issuance of notification under section 6 of
the Act. Otherwise it appears that there was no enquiry under rule 4
of the Rules before issuance of the notification under section 4 yet
the notification under section 4 was not quashed. The observation
then in any event is obiter.
B

On the scheme of the Act, we are of the opinion that on a correct
interpretation, it is not necessary that enquiry under rule 4 must in
all cases precede issuance of the notification under section 4 of the
Act. In an appropriate case if it is possible, enquiry under rule 4(1)
c
~. . may be held before the issuance of the notification under seciion 4.
But it is not a mandatory requirem~nt that it must precede before
the issuance of the notification under section 4.

Our attention was drawn to a Bench decision of the Allahabad
High Court in the case of Raja Ram Jaiswal v. Collector, D
Allahabad & Another (1), where it was held that it would not
be right to say that a case where a company makes an appli-
cation for acquisition of land to the Collector it was obligatory
that the provis;ons of rule 4(1) must be complied with before the
Collector could issue a notification under section 4(1) of the Act.
With this conclusion we are in agreement, though factually the case E
was slightly different in the sense that there the Collector was autho-
rised to make a notification under section 4(1) of the Act and not
the State Government as in this case. Therefore, though there may
be in certain cas\:s compliance with rule 4(1) of the Rules it was not
mandatory that before issuance of notification under section 40) of
the Act there should be an enquiry in compliance with rule 4(1).
F
In the premises in so far as the Bombay High Court held that
non-compliance with rule 4 before the issuance of notification under
section 4(1) of the Act is bad is set aside.

As mentioned hereinbefore, since the issuance of the notifica-
tions was challenged on several other grounds and the High Court G
had not decided those grounds, we remit the matter back to the High
, Court to decide those grounds. We request the High Court to dis-
pose of those grounds as early as possible.
'

(I) (1980] 2 ILR Allah•bad 269. H
950 SUPl.llM! COU.T REPORTS [1985] 2 s.c.R.

A In a matter of this nature where several contentions factual and
legal are urged and when there is scope of an appeal from the deci-
sion of the Court, it is desirable as was observed by the Privy
Council long time ago to avoid delay and protraction of litigation
that the court should, when dealing with any matter dispose of all
B the points and not merely rest its decision on one single point.
·"' .
In the facts and circumstances of the case, as the matter is be-
ing remitted back to the High Court, costs of this appeal will abide
c by the result of the High Court decision.

S.R. Appeal a/lowed
. ).

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