Holding

A withdrawal of acquisition under Section 48(1) is subject to the principles of natural justice and must afford the beneficiary a hearing and reasons; the impugned notification was therefore quashed.

Summary

The State Government sought to acquire 15 acres of land for a housing scheme for the State Gov't Employees Houseless Harijan Association, a society registered under the Karnataka Societies Registration Act. After a series of notifications under the Land Acquisition Act, the government withdrew the acquisition by issuing a notification under Section 48(1) without giving the society any notice or hearing. The society contended that, as a beneficiary, it was entitled to the principles of natural justice, which the High Court had rejected. The Supreme Court held that Section 48(1) does not exclude natural‑justice requirements for beneficiaries and that a withdrawal must be accompanied by a hearing and reasons. Consequently, the withdrawal notification was declared void and the appeal was allowed with costs.

Issues considered

The State can withdraw a land acquisition under Section 48(1) without hearing the beneficiary and without stating reasons.
Whether the principles of natural justice apply to the beneficiary of an acquisition under Section 48(1).
Whether the acquisition was for a public purpose under Section 3(1)(vi) of the Land Acquisition Act, requiring prior approval and a valid society registration.
Whether the acquisition was initiated under Part II or Part VII of the Act and the relevance of prior approvals.
Whether non‑compliance with Article 166 of the Constitution invalidates the prior approval.
Whether the notification under Section 48(1) is justiciable.

Legislation cited

Constitution of Indias. Article 166
Land Acquisition Act, 1894s. 3(1)(vi), s. 4(1), s. 48(1), s. 48(2), s. 6(1), s. 6(1-A), s. 9
Societies Registration Act, 1860

Subjects

natural justiceland acquisitionwithdrawalSection 48public purposebeneficiary's right to be heardKarnatakaSocieties Registration Actadministrative law

Judgment

STATE GOVT. HOUSELESS HARIJAN A
EMPLOYEES ASSOCIATION
v.
STATE OF KARNATAKA AND ORS.

DECEMBER 11, 2000
B
[A.P. MISRA AND RUMA PAL, JJ.]

land Acquisition Act, 1894-Sections 3(j)(vi), 4(1), 6(1), 6(1-A), 9,
sub-Sections (/) and (2) of Section 48· Acquisition- Withdrawal of·- C
Justiciability of Beneficiary ef acquisition- -Right to be heard --Notification
under Section 48(1) for withdrawal of acquisition-Appellant/beneficiary
given no opportunity of being heard before such notification-legality of
Held, the State Government could not have withdrawn from the acquisition
without hearing the appellant- Though Section 48(1) has been construed to
exclude the owner's right to be heard before withdrawal of acquisition, there D
is no similar provision with regard to the beneficiary of the acquisition--A
beneficiary, may, by such withdrawal suffer substantial loss without redress
particularly when it may have deposited compensation money towards the
cost of the acquisition-An opportunity of being heard may allow him not
only to counter the basis for withdrawal, but also to cure any defect or E
shortcoming and fill any lacuna- Requirements of natural justice to be read
into statutory provisions unless excluded expressly or by necessary
implication· -Administrative law--- Principles of natural justice.

Public purpose- -Meaning of-Acquisition with prior approval of
appropriate government for land for any housing scheme sponsored by a F
Society registered under the Societies Registratwn Act-·Contention that
r acquisition not for a public purpose as appellant not registered as a Society
Tenability of- Held, if some of the objects with which a Society is established
are invalid and others are valid, the registration of the Society is not ipso
facto vitiated-Appellant-Society registered under the Karnataka Societies
Registration Act-Two of the objects in the Act being two of the aims and G
objects of the appellant-Society-Thus, it cannot be asserted that the appellant
could not have been and cannot continue to be registered under the
Karnataka Act-Notification having been issued and published declaring
that the land was required for a public purpose, such declaration was
conclusive evidence that the land was needed for a public purpose-Such H
483
484 SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A purpose cannot be lateron questioned or reopened without challenging the
notification-Karnataka Societies Registration Act, 1961.

Prior approval-Requirement of-Contention that letter relied on by
appellant did not amount to prior approval as the Government could not rely
on material collected prior to issuance of the second notification and that
B it was not in accordance with Article 166 of the Constitution-Held, when
earlier proceedings for acquisition came to an end as a matter of law, it does
not mean that the material on the basis of which the earlier notification was
issued ceased to exist as a matter of fact--Such material considered before
granting approval for the third and final notification-No form of prior
C approval or the material on which such approval is to be based, specified-
lack of comp/iattw with Article 166 did not render the prior approval a
nullity--Ct:mstitution of India, 1950--Article 166.

Contention that acquisition was originally commenced under Part Vil
and material gathered prior to first 11.otificarion relevant for an acquisition
D under Part VII, could hot be relied on for proceedings under Part II-Held,
second and third notifications under Section 4(1) clearly stating that the
acquisition was being made for a public purpose and not under Part V/1-
Therefore, even if the acquisition was originally commenced under Part VII,
it was continued under Part If,
E
The appellant WJ.S a Society registered under the Karnataka Societies
Reglstrntlon Act, 1961 consisting of members who were State Government
employees belonging to the Scheduled Castes. With a view to provide house
sites for its members all of whom were houseles9, the appellant approached
the Government to acquire 15 ccres of land situated in a particular village.
F The said land belon~ed to respondent numbers 5 to 7. Pursuant to it, the
Planning Authority passed a resolution to issue 'no objection certificate' for
suitability of the land for house sites in favour of the appellant. The said
decision was communicated to the Assistant Commissioner of the area who
subsequently asked the appellant to furnish certain particulars. The
G particulars as required by the Assistant Commissioner were furnished.

The State Government required the appellant to make a deposit towards
the cost of acquisition which was done. The State Government granted prior
approval to the acquisition and subsequently a notification under Section 4(1)
of the Land Acquisition Act was published. The appellant was called upon to
H deposit a further sum towards the cost of acquisition, by the Land Acquisition
STATE OF HOUSELESS HARIJAN EMPLOYEES ASSON. v. STATE 485
Officer which was also deposited. A
The records were then forwarded by the Assistant Commissioner to the
Revenue Commissioner and Secretary to Government, Revenue Department.
These were, however, returned with the direction that the recommendation of
the District Level Committee should be submitted. Accordingly, the appellant
obtained the recommendations of the District Level Committee and the State B
Level Committee.

Thereafter, the State Government passed an order directing the
authorities to issue the final notification under Section 6(1) of the Land
Acquisition Act As the statutory period provided under Section 6(1-A) of the C
Act h11d alre11dy expired, a fresh notification, under Section 4(1) was directed
to be issued. Prior to the issuance of the notification, the matter w11s
scrutinised by the Deputy Secretary and Secretary of the Revenue Department
and finally approved by the Chief Secretary and the Minister for Revenue.

In pursuance of the decision of the State Government to commence D
afresh the land acquisition proceedings, a second notification under Section
4(1) of the Act was issued proposing to acquire the land for public purpose
for the benefit of the appellant for housing its members. Again the Government
did not publish the declaration under Section 6 of the Act within the time
prescribed.
E
Thereafter, the matter was referred to the Law Department which was
of the opinion that the aicq uisition of bmd in favour of the appellant was for a
public cause. Accordingly, aifter obtaining the approval of the Government, a
third notification under Section 4(1) was published.
,
The aforesaid notification was challenged by respondents 5 to 7, owners F
of the land sought to be acquired, in a writ petition before High Court No
interim order was passed in the said writ petition and the acquisition
proceedings continued.

The respondents/owners filed objections to tile acquisition all of which G
were rejected. The rejection of their objections under Section SA were affirmed
by Deputy Secretary to Government, Revenue Department and subsequently
approved both by the Minister of Revenue as weU as the Law Minister. Thus,
the final notification under Section 6 of the Act was published declaring that
the acquisition was for the public purpose of allotment of house sites to the
members of the appellant~~ociety. Subsequently, the L1111d Acquisition Officer H
486 SCPREME COLRT REPORTS [2000] SUPP. 5 S.C.R.

A made an Award under Section 9 of the Act, issued a notice and directed the
appellant to deposit the balance amount representing the difference between
the amounts already deposited by the appellant and the amount of the Award.
The said amount along with a further sum which the appellant was directed
to deposit, was duly deposited. The award was approved by the Divisional
•
B Commissioner and possession of the acquired land was ordered to be handed
over to the appellant

At this stage, a letter was written by the Department of Revenue to the
Land Acquisition Officer directing him not to hand over possession of the
land to the appellant until further orders. Pursuant to it, the respondents/
C owners withdrew their writ petition challenging the third notification under
Section 4(1). Thereafter, the appellant filed a writ petition challenging the
legality of the aforesaid letter issued by the Department of Revenue. Although
an interim order had been granted not to take further action pursuant to the
letter, the Government issued a notification under Section 48(1) of the Land
Acquisition Act withdrawing the acquisition. The appellant amended the writ
D petition by seeking quashing of the aforesaid notification. A second writ
petition was also filed by the appellant for the same reliefs. However both the
writ petitions were dismissed. Subsequently, by virtue of an order passed by
Supreme Court, the appellant was permitted to proceed with the first writ
petition.

E The said writ petition was dismissed by a Single Judge of the High Court
holding that the Government had the absolute power to withdraw from the
acquisition since possession had not been handed over to the appellant. The
appeal filed before the Division Bench of the High Court was also dismissed
holding that no reasons were required to be given by the Government when it
F withdrew the acquisition proceedings in the absence of any pleadings with
respect to malafides. Hence the present appeal.

On behalf of the appellant, it was contended that the order withdrawing
the acquisition under Section 48(1) of the Land Acquisition Act was passed
without any notice or hearing the appellant; that the right of the beneficiary
G to be heard had been recognised by the Supreme Court.
On behalf of the respondents, it was contended that the principles of
natural justice should not be extended to withdrawal of an acquisition for public
purpose; that a beneficiary had a right to be heard before notification under
Section 48(1) was issued only in cases of acquisition for companies under
H Part VII of the Act; that the prior approval to the acquisition had been granted
STATE OF HOUSELESS HARIJAN EMPLOYEES ASSON. v. STATE 487

prior to the earlier notifications under Section 4(1) and therefore with the A
dropping of the earlier notifications, the entire proceedings on the basis of
which they were issued became non est; that the present acquisition was in
f11ct being made under Part VII and that none of the provisions in Part VII
htd been followed.

Allowing the appeal, the Court B

HELD : l. The acquisition in favour of the appellant was properly
initiated by publication of Notification under Section 4(1) of the Land
Acquisition Act and by the declaration issued under Section 6. The withdrawal
of the acquisition under Section 48(1) was vitiated not only because the C
appellant was not heard but also because no reason whatsoever has been given
for such withdrawal. No reason has been put forward by the respondents to
exclude the application of the principle of natural justice to Section 48(1) of
the Act. The requirements of natural justice will be read into statutory
provisions unless excluded expressly or by necessary implication. Section
48(1) does not in terms exclude the principles of natural justice. However, D
the Section has been construed to exclude the owner's right to be heard before
the acquisition is withdrawn. This is because the owners' grievances are
redressable under Section 48(2). But as far as the beneficiary of the
acquisition is concerned there is no similar statutory provision. In contrast
with the owners position the beneficiary of the acquisition may by withdrawal E
from the acquisition suffer substantial loss without redress particularly when
it may have deposited compensation money towards the cost of the acquisition
and the steps for acquisition under the Act have substantially been proceeded
with. An opportunity of being heard may allow the beneficiary not only to
counter the basis for withdrawal, but also, if the circumstances permitted, to
> cure any defect or shortcoming and fill any lacuna. In the circumstances of
the c11se, the State Government could not have withdrawn from the iicquisition
F

without hearing the appellant. The impugned notification under Section 48(1)
is therefore quashed. 1509-C, D; 496-G; 497-H; 498-8-C; 499-01

Larsen & Toubro ltd. v. State of Gujarat and Ors., 1199814 sec 387; G
Union of India v. Col J.N. Sinha, !19701 2 SCC 458; Olga Tellis v. Bombay
Municipal Corporation, 119851 3 SCC 545 and Alr.ar Nath Ashram Trust
Society v. Governor ofU.P., 1198811 SCC 591, relied on.

CB. Gautam v. Union of India, 119931 I SCC 78 and Special land
Acquisition Collector v. Godrej Boyce, 1198811SCR590, referred to. H
488 SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A 2.1. In order that an acquisition may be for a public purpose within the
meaning of Sectipn '3(1)(vi) of the Land Acquisition Act, the acquisition should
have been done with the prior approval of the appropriate Government; must
have provided for land for any housing scheme and the housing scheme should
have been sponsored by a Society registereo under the Societies Registration
B Act, 1860 or any other corresponding law in the State. Of these three
requirements, according to the Law Department, the third requirement was
lacking. The opinion of the Law Department and consequently the basis of
the impugned order are unacceptable for several reasons. Admittedly, the
appellant is registered under the Karnataka Societies Registration Act.
Section 3 of the Karnataka Act specifies the Societies to which the Karnataka
C Act applies. The Societies must be formed for any one or more of the seven
objects mentioned. The last two objects mentioned in the Karnataka Act are
in fact included in the Memorandum of Association of the appellant as being
two of the aims and objects of the appellant The opinion of the Law Department
that none of the objects of the Appellant were within the objects specified in
Section 3 was factually incorrect. It has not been shown that if some of the
D objects with which a Society is established are invalid and others are valid,
the registration of the Society is ipso facto vitiated. (501-B, C, D, El

2.2. Once the notification under Section 6 was issued and published
declaring that the land was required for a public purpose under sub-Section
E (3) of Section 6, the said declaration was "conclusive evidence that the land
is needed for a public purpose...... ". The stage of questioning the 'public
purpose' aspect of the acquisition is over and cannot be reopened by the State
nor can the respondents/owners raise this issue without challenging the
notification under Section 6. They had challenged it under Article 226 of the
Constitution but then withdrew their writ petition. (502-F)
F
3. Under Section 3(1)(vi) the prior approval to the acquisition is required
if an acquisition is made for the purpose of providing land for carrying out,
inter-alia. any housing scheme sponsored by a Society registered under the
Societies Registration Act, 1860. The fact of prior approval has not been denied
G by the State Government Lack of approval of the appropriate government to
the acquisition was not the ground on which withdrawal from the acquisition
had been made and it was not open to the State Government to justify its
decision on any other ground. No form of the prior approval required under
Section 3(1)(vi} of the Act has been specified in the Act itself. What the Section
in terms requires is the prior approval to the acquisition for the purpose
H specified. This was expressly given. Section 4(1) read with Section 3(1)(vi) of
STATE OF HOUSELESS HARIJAN EMPLOYEESASSON. v STATE 489
the Act indicates that there are two separate functions to be preformed by the A
State Government. Under Section 4(1) it must prima facie come to the
conclusion that the land proposed to be acquired is required for a public
purpose and under Section 3(t)(vi), such tentative conclusion must be coupled
with specific approval to acquire the land for the purposes specified for the
benefit of the registered Society or co-operative Society, as the case may be.
The Act does not specify the material on which either the tentative conclusion B
to Section 4(1) or approval under Section 3(t)(vi) is to be based. In this case
. the earlier notifications were not cancelled. No further steps could be taken
on the earlier notifications only because of administrative delay which crossed
the period of limitation provided under Section 6(1)(A). While the proceedings
under Section 4(1) may come to an end as a matter of law, it does not mean C
that the material on the basis of which the earlier notification was issued
ceased to exist as a matter of fact. The material in this case although collected
prior to the issuance of the second notification was all there and according to
the letter of approval, the matter was "minutely examined" by the State
Government in consultation with the Law Department before granting the
approval for the third and final notification. The lack of compliance ~ith D
Article 166 of the Constitution did not render the prior approval a nullity.

.. [498-F; 503-A; 504-C; 508-D, B, C, F[

Mohinder Singh Gill and Anr. v. The Chief Election Commissioner, New
Delhi and Ors., (1978] l SCC 405; Mis Fomento Resorts and Hotels Ltd. v. E
Gustavo Ranato DA Cruz Pinto and Ors .. [1985] 2 SCC 152 and R.
Chitralekha & Anr. v. State of Mysore & Ors.. (1964] 6 SCR 368, relied on.

Gulabra v. State of Gujarat, (1996] 2 SCC 26, distinguished.

Dattatreva v. The State ofBombay, (1952] SCR 612; Major E.G. 3arsay F
v. State of Bombay, AIR (1961) SC 1762 and HMT House Building Co-
operative society v. Syed Khader & Ors.. (1995] 2 SCC 677, referred to.

4. There is 110 basis for the submission that the acquisition w11s originally
commenced under Part VII. After the first notification under Section 4(1) G
was issued pursuant to a directive by the Under Secretary to the Deputy
Commissioner, enquiries were held and the District and State Level
committees enquired into and verified the appellant's case before
recommending it. The material was relevant not only to the question of public
purpose under Section 4 but could also form the basis of an approval under
! Section 3(1)(vi). It is not disputed that the material was considered when the H
490 SUPREME COCRT RF PORTS [2000] SUPP. 5 S.C.R.

A second and the third notifications under Section 4(1) were issued and both
these notifications clearly state that the acquisition was being made for a
public purpose and not under Part VII of the Act. Therefore, even if the
llcquisition was originlllly commenced under Part VII it was contim1ed under
Part II. [506-F; 507-F, GI

B State of Gujarat v. Patel Chaturbhai Narsibhai, (197511 SCC 583 and
Amar Nath Ashram Trust Society v. Governor of UP., [19881 I SCC 591,
distinguished.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5015of1999.

C From the Judgment and Order dated 21.1.98 of the Karnataka High Court
in W.A. No. 2990of1997.

M. Rama Jois and P.S. Misra, S.N. Bhat, D.P. Chaturvedi, G.V.
Chandrasekhar, P.P. Singh, Devendra Singh, Surya Kant, Shambhu Prasad
D Singh and N. Ganpathy for the appearing parties.

The Judgment of the Court was delivered by

RUMA PAL, J. The question to be decided in this appeal relates to the
rights of the beneficiary of an acquisition under the Land Acquisition Act
E (hereinafter referred to as the 'Act') to resist withdrawal of acquisition
proceedings.

In the course of the arguments before us, we were of the view that the
original records pertaining to this case should be produced. This was directed
on 14th September 2000. The entire records have admittedly not been produced
F by the State Government. We have been informed by the learned counsel
appearing on behalf of the State that one of the files pertaining to the case
has been destroyed on 3rd February, 2000.

On the basis of the records we have found that the appellant is a
Society registered under the Kamataka Societies Registration Act, 1961. It has
G 360 members all of whom are State Government Employees belonging to the
Schedule Castes of Adidravida and Adikarnataka. It wanted to provide house
sites for its members all of whom are houseless. In 1983, the appellant
approached the Government to acquire 15 acres of land at Maralur village.
The land belonged to respondents Nos. 5 to 7 herein.

H By a letter dated I 0.1.1983 the Planning Authority wrote to the Assistant
STATE OF HOUSELESS HARIJAN EMPLOYEESASSON. v. STATE (RUMA PAL,J] 491

Commissioner, Tumkur stating that a resolution had been passed to issue "no A
objection certificate" for suitability of the land for house sites in favour of
the appellant. It further said that the land was earmarked partly for residential
and partly for open place in the draft lay out plan of Tumkur.

On 16. 7 .1984 a letter was written by the Assistant Commissioner to the
appellant in which the appellant had been asked to furnish the followmg B
particulars:

I. The lists of members of the Association who are siteless and
houseless.
2. The financial soundness of the Association by way of the
shares collected. The amount deposited in the Bank etc.;
c
3. The audit report for the previous three years;
4. Whether the an;a proposed for acquisition is treated as residential
in the plan i.e. outline development plan, or comprehensive
development plan, prepared by the Town Planning Department D
or not;
5. Whether the layout plan proposed by the association fits in the
comprehensive plan of the city area,
6. Whether the proposed area is in excess/less as compared to the
demand based on the number of eligible members." E
On 17 .8.1984 the particulars as required by the Assistant Commissioner
were furnished including a copy of the lay out plan.

According to the appellant, the State Government required the appellant
to make a deposit towards the cost of acquisition. The appellant deposited F
the required amount in 1984. According to the appellant, the State Government
granted prior approval to the acquisition by letter dated 7th September 1986. A
notification under Section 4 ( 1) of the Act was published on 6th August 1987.

On 9th July 1987, the appellant was called upon to deposit a further sum G
towards the cost of acquisition by the Land Acquisition Officer. This amount
was also deposited.

The records were then forwarded by the Assistant Commissioner, Tumkur
under cover of a letter dated 19.11.1987 to the Revenue Commissioner and
Secretary to Government, Revenue Department. These were returned with the H

\
I
492 SUPREME COURT REPORTS (2000] SUPP. 5 S.C.R.

A direction that the recommendation of the District Level Committee should be
submitted.

According to the appellant, on 13th May 1988 it wrote to the Assistant
Commissioner, Tumkur Sub-Division giving particulars of the housing scheme
and again enclosing a proposed lay out plan.
B
A letter dated 30.5.1988 was written by the appellant to the Divisional
Commissioner, Tumkur requesting for expedition in which it was stated, "the
Association has already formed 361 sites as per the draft plan measuring East
to West and North to South 30 ft.x 40 ft. respectively apart from road and park
in 15 acres of land acquired at SY No.49 as per the Government Order No.
C RD/45/AQT/83 dated 27.3.1987".

The District Level Committee held~ meeting on 17.6.1988. The minutes
of the meeting show that before recommending the appellant's case all the
aspects were considered and in particular :

D "An extent of 80 x 210 Sq. feet has been left for public amenities as
per the site plan, which is enclosed in the file. The Town Planning
Authority has pointed that I 00/o of the land should be left for public
amenities. The Society has agreed to this."

At its meeting held on 28.7.1988 the State Level Committee recommended
E the acquisition of the land in favour of the appellant for providing house sites
to its members.

On I 0th August 1988, the State Government passed an order directing
the authorities to issue the final notification under Section 6 {I) of the Act.
As the statutory period provided under Section 6(1-A) (which has been
p inserted by way of amendment in the State of Kamataka) had already expired,
a fresh Notification under Section 4 (I) of the Act was directed to be issued.
Prior to the issuance of the Notification, a detailed note was prepared by the
Deputy Secretary, Revenue Department which was forwarded to the Secretary.
On 1.2.90, the Secretary referred to his note and proposed, "We may give
clearance in favour of the Association. For approval." This was approved by
G the Chief Secretary and placed before the Minister for Revenue who in tum
approved the note on 12th February 1990.

On 14th February, 1990 the Secretary, Revenue Department wrote to the
Deputy Commissioner, Tumkur District:

H "Sub: In the matter of acquisition of 15 Acres of land in Survey No.
STA TE OF HOUSELESS HARIJAN EMPLOYEES ASSON. v. STATE (RUMA PAL, J.] 493
49 of Maralur Village, Tumkur Kasaba, for housing sites in favour of A
Houseless Harijan-Girian Government Employees Association.

Ref: I. Your office letter No. LAW/CR/130/88-89, dated 17.10.1989.

2. Your letter No. LA W/CR/18/88-89, dated 26.10.1989: 5.12.1989.

After considering in great detail, the proposal contained in your letter B
and requisition of Houseless Government Servants Association,
Tumkur and all other aspects, the State Government has decided to
commence afresh the land acquisition proceedings. Therefore, I am
directed to request you to take steps for issue of notification under
Section 4(1) of the Land Acquisition Act." C
A second notification under Section 4(1) of the Act was issued on 27.2.90
proposing to acquire the land for public purpose for the benefit of the
appellant for housing its members. Again the Government did not publish the
declaration under Section 6 of the Act within the time prescribed.
D
A letter was written on 15.3.1991 by the Secretary, Revenue Department
addressed to the Deputy Commissioner. The unofficial translation of the letter
reads:

"Sub: Allotment of 15 Acres of Land in Survey No.49 in the Village
Maralooru, Tumkur Disrtrict to Landless Scheduled Castes State E
Government Employees Union (Regd.) -Reg.

Inviting attention to your letter No. LQCR- 72-90-91 dated 20th
November, 1990 on the above subject, it is brought to your notice that
while keeping in mind the fact that the matter of acquisition of these
lands has been dropped on earlier two occasions after the initiation F
of the land acquisition proceedings, on examination of the objections
of the land owners, again the matter of acquisition of land for being
allotted to landless Scheduled Castes State Government Employees
Union has been minutely examined in consultation with the Law
Department. According to the opinion of the Law Department the G
acquisition of land in favour of the impugned Union is for a public
cause. In view of this it has been decided by the Government to
acquire 15 acres of land of Survey No. 49 in Maralooru Village, Tumkur
District/(Kasha) in favour of the Landless Scheduled Caste State
Government Employees Union, Tumkur. Thererore, I am directed to
convey the approval of the Government to initiate action for issue of H
494 SUPREME COURT REPORTS (2000] SUPP. S S.C.R.

A notification under Column 4(1) for acquisition of the above mentioned
land in favour of the above mentioned Union".

A third notification under Section 4( I) was accordingly published on
22.7.1991. This was challenged by respondents 5 to 7 before the High Court
(Writ Petition No. 21438of1991). lt was contended that the appellant was not
B duly registered under the Kamataka Societies Registration Act, 1960 and,
therefore, it was not lawful to acquire the land for it. No interim order was
passed and the acquisition proceedings continued.

The respondent-owners filed objections to the acqu1s1t1on. All the
objections including the objection relating to the non-registerability of the
C appellant under the Karnataka Society Registration Act were rejected.
According to the noting on the file dated 23 .11.1991 " the land owner can
question the validity of the registration of the Association on the housing
activities, before the appropriate authority and not before this authority.
Therefore, this objection is not tenable".

D The rejection of the owner-respondents, objection under Section 5-A
was affirmed on 3.12.1991 in the report prepared by Deputy Secretary to
Government, Revenue Department which was approved both by the Minister
of Revenue as well as the Law Minister. Directions were accordingly issued
to proceed under Section 6(1) (a) of the Act on 12.3.1992.
E
The final Notification under Section 6 of the Act was published on 15th
May 1992 declaring that the acquisition was for the public purpose of allotment
of house sites to the members of the appellant. On 7th September 1992, the
Land Acquisition Officer made the Award under Section 9 of the Act, issued
a notice dated 15th September 1992 and directed the appellant to deposit the
F balance amount representing the difference between the amounts already
deposited by the appellant and the amount of the Award. The balance amount
of Rs. 7,36,231 was deposited on 19th November 1992. A further sum of
Rs. 65,926 was also deposited on 4th January 1993 by the appellant pursuant
to the directions of the Land Acquisition Officer. The total amount deposited
G by the appellant towards the cost of acquisition is Rs. 19,01,915. The Award
was approved by the Divisional Commissioner by his 0.M. dated 26th May
1993. The approval records that an inquiry was held by the Deputy
Commissioner and Assistant Commissioner regarding the members of the
Society and that the authorities were satisfied that the appellant-Association
consisted of SC/ST members. According to the orders of the Divisional
H Commissioner, possession of the acquired land was to be handed over to the
STATE OF HOUSELESS HARIJAN EMPLOYEES AS SON. v. STATE [RUMA PAL, J.] 495

appellant in accordance with law, A
At this stage, a letter was written by the Department of Revenue to the
Land Acquisition Officer directing him not to hand over possession of the
land to the appellant until further orders. According to the appellant-Society,
the Government's volte-face was because S. Shafiq Ahmed, the local M.L.A.
(responde.nt No. 2) had objected to the finalisation of the land acquisition B
proceedings in favour of the appellant. It is alleged that the respondent No.2
had sent his objections not only to the Divisional Commissioner but also to
the Revenue Minister. The Minister instructed the Revenue Commission to
stop the land acquisition proceedings which in turn passed on the instruction
to the Secretary to the Revenue Department of the State Secretariat as a C
consequence whereof the letter dated 5th July 1993 was written. On 6th July
1993, the respondents 5,6 and 7 withdrew Writ Petition No. 21438/91.

The appellant tiled a writ petition challenging the legality of the letter
dated 5th July 1993. Although an interim order had been granted not to take
further action pursuant to the letter, in the office note dated 25.6.93, the D
Minister of Revenue has recorded, "In view of the opinion offered by the Law
Deptt., it is not permissible to acquire land on behalf of the Govt. House less
Employees Association registered under Sec. 3 of the Karnataka Societies
Registration Act. Hence withdrawal notification u/s 48( I) of the LA Act may
be issued." And on 2nd August 1993, the Government issued a Notification
under Section 48( I) of the Act withdrawing the acquisition. This was published
E
in the Official Gazette on 5th August 1993. The appellant amended the writ
application by seeking quashing of the Notification dated 2nd August 1993.
A second writ petition was also filed hy the appellant for the same reliefs.
However both writ petitions were dismissed. It is not necessary for us to
consider the order dismissing the second petition. Suffice it to say that by F
virtue of an order passed by this Court, the appellant was permitted to
proceed with the first writ petition filed by it on 9th July 1993.

The writ petition was dismissed by the Single Judge holding that there
was no approval to the acquisition under Section 3(f)(iv) of the Act and that G
the letter dated 7th September 1986 relied upon by the appellant in this
connection did not amount to such approval. It was also held that ma/afides
had not been established, "as respondent No. 2 had filed statement of
objections denying all such allegations" ;nd that the appellant had not
"produced any material to establish that the release from the acquisition was
at the instance of the second respondent in collusion with the land owners". H

=
496 SUPREME COuRT REPORTS [2000) SUPP. S S.C.R.

A The Single Judge also held that the Government had the absolute power to
withdraw from the acquisition since possession had not been handed over
to the appellant.

The appellant's appeal was given short shrift by the Division Bench of
the High Court. It was said that no reasons were required to be given by the
B Government when it withdrew the acquisition proceedings in the absence of
any pleadings with respect to malajides. It was also said that the decision
of this Court in Special Land Acquisition Officer, Bombay v. Godrej & Boyce,
[ 1988] I SCR 590 which had been relied upon by the appellant did not apply
as this Court had, according to the High Court, held that reasons were
C required to be given by the Government for withdrawing from the acquisition
only in connection with acquisition proceedings initiated under Part VIII of the
Act and not in cases where the proceedings had been initiated under Part II.

Before concluding the narration of facts, we note that according to the
appellant, during the pendency of these proceedings, respondents 5, 6 and
D 7 sold the land to the respondents 8 to 34. The respondents 5,6 and 7 have
denied this. We do not propose to go into this dispute.

The arguments have been wide ranging and the parties have submitted
written notes of their arguments. But the basic grievance of the appellant is
that the order withdrawing the acquisition under Section 48(1) of the Act was
E passed without any notice or hearing the appellant. According to the appellant,
the right of the beneficiary to be heard has been recognized by the decision
of this Court in Larsen & Toubro ltd. v. State of Gujarat and Others, [1998]
4 SCC 387. According to the respondents, the decision in Larsen & Toubro
Ltd. is limited to the case of a company for which land had been acquired after
formalities under Part VII of the Act had been completed. It was submitted
F that the principles of natural justice should not be extended to withdrawal of
an acquisition for public purpose.

This Court has consistently held that the requirements of natural justice
will be read into statutory provisions unless excluded expressly or by necessary
G implication.

In the case of Union of India v. L'o/. JN. Sinha, [1970) 2 sec 458, this
Court said:

" .......... It is true that if a statutory provision can be read consistently
with the principles of natural justice, the courts should do so because
H it must be presumed that the Legislatures and the statutory authorities
S fATEOF HOUSELESS HARIJAN EMPLOYEES ASSON v. STAl'E [RUMA PAL. J. l 497

intend to act in accordance with the principles of natural justice. But A
if on the other hand a statutory provision either specifically or by
necessary implication excludes the application of any or all the
principles of natural justice then the court cannot ignore the mandate
• of the Legislature or the statutory authority and read into the
concerned provision the principles of natural justice."
B
The Constitution Bench in Olga Tellis v. Bombay Municipal
Corporation, : 1985] 3 SCC 545 p 1aced the onus to prove the exclusion of the
rules of natural justice by way of exception and not as a general rule on the
person who asserted it.

"The ordinary rule which regulates all procedure is that persons who C
are likely to be affected by the proposed action must be afforded an
opportunity of being heard as to why that action should not be taken.
The hearing may be given individually or collectively, depending
upon the facts· of each situation. A departure from this fundamental
rule of natural justice may be presumed to have been intended by the D
Legislature only in circumstances which warrant it. Such circumstances
must be shown to exist, when so required, the burden being upon
those who affirm their existence."

Both these views were affirmed by the Constitution Bench in C. B.
<.iautam v. Union of/ndia, [ 1993] 1 SCC 78. {'.

Admittedly, the appellant was given no opportunity of being heard
before the decision was taken by the respondent-authorities to v. ithdraw the
acquisition in exercise of section 48 ( 1) of the Act.

Section 48 (I) of the Act provides: F
''48. Completion of acquisition not cumpulsory, hut compensation to
he awarded when not completed- {I) Except 'n the case provided for
in Section 36, the Government shall be at liberty to withdraw from the
acquisition of any land of which possession has not been taken."
(J
The section does not in terms exclude the principles of natural justice.
However, the section has been construed to exclude the owner's right t'J be
heard before the acquisition is withdrawn. This is because the owners'
grievances are redressabl~ under Section 48 (2). "No irreparable prejudice is
caused to the owner of the land and, if at all the owner has suffered any
damage in consequence of the acquisition proceedings or incurred costs in II
498 SUPREME COURT REPORTS (2000] SUPP. 5 S.C.R.

A relation thereto, he will be paid compensation thereof under Section 48 (2) of
the Act." [See: Amar Nath Ashram Trust Society v. Governor of U.P., [I 988]
I SCC 591 at p. 596. [See: also Special Land Acquisition Collector v. Godrej
Boyce, [1988] I SCR 590]. But as far as the beneficiary of the acquisition is
concerned there is no similar statutory provision. In contrast with the owners .
B position the beneficiary of the acquisition may by withdrawal from the
acquisition suffer substantial loss without redress particularly when it may
have deposited compensation money towards the cost of the acquisition and
the steps for acqui~ition under the Act have substantially been proceeded
with. An opportunity of being heard may allow the beneficiary not only to
counter the basis for withdrawal, but also, if the circumstances permitted, to
C cure any defect or shortcoming and fill any lacuna. No reason has been put
forward by the respondents to exclude the application of the principle of
natural justice to Section 48 (I) of the Act.

The decision in Larsen & Toubro which relied upon an earlier decision
in Amamath Ashram Trust Society and Another v. Governor of U.P. and
D Others, (supra) to hold that a beneficiary has a right to be heard before a
notification under Section 48 (I) is issued, does not appear to be limited to
acquisition for companies under Part VII of the Act as is contended by the
respondents although the acquisition in that case had been made for a
company for the purpose of setting up a housing colony_ Both cases have
also drawn a distinction between the rights of an owner and the beneficiary
E of the acquisition to object to withdrawal from the acquisition for the reasons
noted earlier.
It may be noted that as in the case of the company, under Section 3
{f)(vi) the prior approval to the acquisition is required if an acquisition is made
for the purpose of providing land for carrying out, inter-alia, any housing
F scheme sponsored by a Society registered under the Society Registration
Act, 1860. This approval must be made after adequate enquiry. Again the
issuance of the Notification under Section 4 is followed by filing and hearing
of objections under Section 5-A by the Collector. With the publication of
declaration under Section 6, the Collector is to take steps for holding an
G inquiry under Section 9 after giving notice to all the persons interested. After
completing the inquiry under Section 11, the Collector is required to pass an
Award with the approval of the State government giving -
(i) the true area of the land;
(ii) the compensation which in his opinion should be allowed for the
H land; and
STATE OF HOVSELESS HARIJAN EMPLOYEES ASSON. v. STATE rRUMA PA;,, J.J 499

(iii) the apportionment of the said compensation among all the A
persons known or believed to be interested in the land, of whom,
or of whose claims, he has information, whether or not they have
respectively appeared before him."

All these steps had been taken in the Appellant's case. As said in
Larsen & Toubro: B
"After having done all this, the State Government cannot unilaterally
and without notice to the company withdraw from acquisition.
Opportunity has to be given to the company to show cause against
the proposed action of the State Government to withdraw from
acquisition." c
A distinction may perhaps be drawn with beneficiaries who do not bear
the cost of acquisition as the appellant has done in this case. But in the
circumstances of this case, the State Government could not have withdrawn
from the acquisition without hearing the appellant. This finding is sufficient D
to decide the appeal in favour of the appellant.

Jn any event the decision to withdraw the acquisition under Section
48( I) is justiciable. This Court in Amarnath 's case said:

" .... the decision of the Government to withdraw from acquisition was E
based upon a misconception of the correct legal position. Such a
decision has to be regarded as arbitrary and not bonafide. Particularly
in a case where as a result of a decision taken by the Government the
other party is !ikely to be prejudicially affected, the Government has
to exercise its power bonafide and not arbitrarily. Even though Section
48 of the Act confers upon the State wide discretion it does not pennit F
it to act in an arbitrary manner. Though the State cannot be compelled
to acquire land compulsorily for a company its decision to withdraw
from acquisition can be challenged on the ground that power has
been exercised malafide or in an arbitrary manner. Therefore, we
cannot accept the submission of the learned counsel for the State that G
the discretion of the State Government in this behalf is absolute and
not justiciable at all."

These observations were noted with approval in Larsen & Toubro
(supra). In the notification under Section 48 (I) impugned in this appeal no
reason whatsoever has been given for withdrawal of the acquisition. All that H
500 SUPREME COCRT REPORTS [2000] SUPP. 5 S.C.R.

A said is: l

"In exercise of the powers conferred by Sub-section (I) of Section 48
of the Land Acquisition Act, 1984, (Central Act I of 1894) as amended
by Kamataka Act No. 17of1961, the Government ofKamataka hereby
withdraw from the acquisition of the Land specified below in the
B schedule in respect of which a Notification No. RD: l 77:AQT:91 dated
15th May 1992 issued under Section 6 of the Land Acquisition Act
was published in Karnataka Gazette dated 21st May 1992 and 3rd
September ! 992 as required for public purpose, namely for formation
and distribution to the Members of Houseless Harijans Employees
C Association [R] Tumkur."

In the affidavit affinned on behalf of respondents, I, 3 and 4 on 3rd
December 1998 it is said that the decision to withdraw was taken on the basis
of the opinion of the Law Department. The Law Department had opined that
the acquisition had been sought to be made for a public purpose in tenns of
D Section 3 (t) (vi) of the Act, which required the housing scheme to be
sponsored by any society registered under the Societies Registration Act.
According to the Law Department, a society could be registered only in
respect of the objects specified in clausl!s (a) to (g) of Section 3 of the
Karnataka Society Registration Act. None of the objects mentioned in the
E Memorandum of Association of the appellant fell within these clauses of
Section 3 of the State Act. In the result, "the acquisition of land on behalf
of the Society in question for the purpose of fonning layouts and distribution
of sites to its members (which are not contemplated under Section 3 of the
K.S.R. Act) is not permissible."

F Section 3(t) of the Act defines the expressions 'public purposes' as
including, imer-a/ia:

(vi) the provision of land for carrying out any educational, housing,
health or ~lum clearance scheme sponsored by Government or by any
authority established by Government for carrying out any such scheme,
G or, with the prior approval of the appropriate Government, by a local
authority, or a society registered under th.e Societies Registration Act,
1860, or under any corresponding law for the time being in force in
a State, or a co-operative society within the meaning of any law
relating to co-operative societies for the time being in force in any
H State;
STATE OF HOUSELES3 HARIJAN EMPLOYEES ASSON. v. STATE [RUMA PAL, J.] SQJ

but does not include acquisition of land for Companies." A
In order therefore that an acquisition may be for a public purpose within
the meaning of sub-section 3(f)(vi) as far as the case before us is concerned,
the acquisition (I) should have been done with the prior approval of the
, appropriate Government; (2) must have provided for land for any housing
scheme and (3) the housing scheme should have been sponsored by a B
Society registered under the Societies Registration Act, 1860 or any other
corresponding law in the State. Of these three requirements, according to the
Law Department, the third requirement was lacking.

The opinion of the Law Department and consequently the basis of the
impugned order are unacceptable for several reasons. Admittedly the appellant c
is registered under the Karnataka Societies Registration Act. What appears
to be the contention of the respondents is that the appellant could not have
been registered under the State Act. It is nobody's case that the registration
of the appellant has in fact been withdrawn or cancelled under the Karnataka
A~ D
Section 3 of the Karnataka Act specifies the Societies to which the
Karnataka Act applies. The Societies must be formed for any one or more of
the seven objects mentioned. The last two objects mentioned in the Karnataka
Act are in fact included in the Memorandum of Association of the appellant
as being two of the aims and objects of the appellant. The opinion of the Law E
Department that none of the objects of the Appellant were within the objects
specified in Section 3 was factually incorrect. It has not been shown that if
some of the objects with which a Society is established are invalid and others
are valid, the registration of the Society is ipso facto vitiated. On the contrary,
it appears from the records that on petitions being filed for cancellation of the
appellant's registration, by letter dated 23rd March 1991, the District Registrar F
did not cancel the registration but said, "Therefore, it is hereby endorsed that
the objects which are in accordance with Section 3 of the said Act are valid
and remained (sic) not valid." Thus, it cannot be asserted with any certainity
that the appellant could not have been and cannot continue to be registered
under the Karnataka Act. It is to be noted that under Section 8 (2) of the G
Karnataka Act, a society may be registered only after the Registrar is satisfied
that all the requirements of the Act and the rules made thtreunder have been
complied with. One cannot assume that the appellant's case did not come
within Section 3 (f) (vi) of the Act. It is therefore unnecessary to determine
whether there is a conflict between Section 3 (f)(vi) of the Act and Section
3 of the Karnataka Act nor do we propose to decide which of the two would H
502 SUPREME COCRT REPORTS (2000) SUPP. 5 S.C.R.

A prevail under Article 254 of the Constitution.

Indeed the learned Single Judge found no impediment in an acquisition
for the appellant despite Section 3 of the Karnataka Act when he said:

"all the members of the Society belong to the weaker section of the
B society and they do not have residential sites to have a roof over their
head. When such being the case it is appropriate for the State
Government to take steps to acquire lands having got deposited
substantial amount towards the co~t of acquisition with a view to
acquire certain extent of land to provide residential sites to the members
of the society. Therefore, in the event if the petitioner society come
c forward with a scheme and submit the same to the State Government,
the State Government may take necessary steps to initiate acquisition
proceedings after sanctioning the prior approval provided if the
petitioner-society does not withdraw the amount so deposited by it
for the purpose of acquisition of the land."
D
In fact neither the Single Judge nor the Division Bench of the High
Court appear to have accepted this reason as ground for withdrawing the
acquisition.

Furthennore, this very objection had been considered at every level and
E rejecte::d on 14th November 1991 after which the Notification under Section 6
was issued and published declaring that the land was required for a public
purpose. Once this was done, under sub-Section (3) of Section 6, the said
declaration was "conclusive evidence that the land is needed for a public
purpose ........... ". The stage for questioning the 'public purpose' aspect of the
acquisition is over and cannot be reopened by the State nor can the
F respondents/owners raise this issue without challenging the Notification under
Section 6. They had challenged it under Art. 226 but then withdrew their writ
petition. In this context it may be noted that the appellant's allegation that
the sudden volte-face of the State Government was by reason of the pressure
brought by respondent No. 2 appears to have some substance. Although the
G respondent No. 2, both before the High Court and before us, denied his
involvement in the matter, the records reveal that at least by letter dated 30th
December 1991, the respondent No. 2 had written to the Revenue Department
espousing the cause of respondent owners seeking withdrawal of the
acquisition.

H The basis on which the learned Single Judge dismissed the appellant's
STATE OF HOUSELESS HARi.JAN EMPLOYEES AS SON. v. STATE lRUMA PAL, J.J 503
writ petition was that there was no approval of the appropriate Government A
to the acquisition, namely, the absence of the third factor noted above. This
was not the ground on which withdrawal from the acquisition had been made
and it was not open to the State Government to justify its decision on any
other ground. As held by this Court in Mohinder Singh Gill and Another ·V.
The Chief Election Commissioner, New Delhi and Others, (1978] l SCC 405 B
at p. 417:

" ..... when a statutory functionary makes an order based on certain
grounds, its validity must be judged by the reasons so mentioned and
cannot be supplemented by fresh reasons in the shape of affidavit or
otherwise. Otherwise, an order bad in the beginning may, by the time C
it comes to Court on account of a challenge, get validated by additional
grounds later brought out."

Besides, what had been stated in the affidavit of the State-respondents
is " the petitioner society has not submitted any housing scheme and as such
there could not have been prior approval from the Government". In other D
words, the fact of prior approval has not been denied. What is said is because
no housing scheme had been submitted by the appellant " there could not
have been prior approval".

No finding was however given by the Single Judge on this. All that was
said was: E
"The learned Govt. Advocate submitted that in the instant case there
is no scheme submitted by the society and there is no such approval
of the State Government. If that is so, the entire acquisition proceedings
initiated treating it as a public purpose itself is vitiated."

The Division Bench did not at all address itself to this aspect of the
F
matter. In the absence of any finding on the existence of the scheme, the
submission of the State Government regarding prior approval should have
been rejected.

In fact it appears from the records a housing scheme had been submitted G
by the appellant. Apart from the lay out plan, the number, the sizes and
positions of the plots, the user, the number of allottees, the basis of allotment,
the finances for the purposes, the particulars of the membership had all been
submitted by the appellant. The organisational set up to administer the
scheme was indicated in its Memorandum of Association, which also ensures
.. that the land would be utilised for the purposes for which it was being H
504 SUPREME COURT REPORTS [2000] SCPP. 5 S.C.R.

A acquired. The clearance of the Town Planning Authority had been obtained.
The particulars were verified and found satisfactory in all respects by the
authorities. Nothing more could be asked for from the propounder of a
housing scheme.

The respondents then submitted that the letter dated 15th March, 1991
B did not amount to a prior approval because ( i ) it did not indicate that the
scheme was approved (ii) it was not in accordance with Art. 166 of the
Constitution and (iii) the Government could not rely on material collected.by
it before the first notification under Section 4(1) of the Act was issued.

No form of the prior approval required under Section 3(f)(vi) of the Act
c has been specified in the Act itself. What the section in terms requires is the
prior approval to the acquisition for the purpose specified. This was expressly
given. That the letter dated 15.3.91 was issued by the Government is not in
dispute. The lack of compliance with Article 166 did not render it a nullity.

D
As held by the Constitution Bench of this Court in 1964 (6) SCR 368:
.
"' ......... it is. therefore. settled 1aw that provisions of Art.166 of the
Constitution are only directory and not mandatory in character and,
if they are not complied with, it can be established as a question of
fact that the impugned order was issued in fact by the State Government
or the Governor. ..... " [See also Dattatreya v. The State of Bombay
E [1952] SCR 612 and Major E.G. Barsay v. State ofBombay, AIR (1961)
SC 1762]

No doubt, in Gulabra v. State of Gujarat, (1996] 2 SCC 26, it was held
that a decision of Revenue Minister was not an order of the Government
because of non compliance with Article 166. But in that case there was a
F conflict between the Revenue Department and the Urban Development &
L rban Housing Department whether proceedings under S. 4( l) of the Act
were to be dropped or not. The Revenue Minister was of the view that it
should be dropped. The Urban Development Department disputed this. The
Rules of Business framed by the State under Art. 166(3) specifically provided
(I that in such a controversy, the matter was .to be submitted to the Chief
Minister for placing before the Cabinet. This was not done nor was the order
of the Revenue Minister communicated to the appropriate authority. The
Revenue \ilinister's decision which was noted on the file was sought to be
enforced by the owners. This was negatived by the Court. The decision is
factually distinguishable and cannot be construed as upsetting the settled
H law as noted in Chitralekha 's case.
STATE OF HOUSELESS HARIJAN EMPLOYEES ASSON. v. STATE [RUMA PAL, J.' SOS

The approval in this case was a culmination of a lengthy exercise which A
started in 1983 with two prior abortive attempts to complete the acquisition.
This is evident from the language of the letter dated 15.3.1991 itself. The
genuineness of the need of the appellant has not been doubted even by the
High Court, unlike the case of HMT House Building Cooperative Society v.
Syed Khader & Ors., [1995] 2 SCC 677 where it was found that the Government
had acted at the instance of a middleman and the acquisition was sought for B
the ultimate commercial utilizaticn of the land.

But, the respondents contend, the materials on which the appellant
sought to rely to show that the prior approval in 1991 was granted after being
satisfied about the housing scheme, were submitted prior to the earlier C
notifications under Section 4( 1). According to the respondents, with the
dropping of the earlier notifications, the entire proceedings on the basis of
which they were issued became non est. They have cited State of Gujarat
V. Patel Chaturbhai Narsibhai, [1975] 1sec583 in support of this submis~ion.
The owner- respondents' further submission was that the acquisition was
commenced under Part VII and that the material gathered may have been D
relevant for an acquisition under Part Vil but could not be relied upon for
proceedings under Part II.

These are not pleas which were taken by the respondents at any stage.
Both issues raise mixed questions of law and fact. As far as questions of fact E
are involved we cannot entertain them and as principles of law both
submissions are untenable.

Patel Chaturbhai Nasirbhai (supra) cited by the respondents dealt
with acquisition for a company in accordance with Part VII of the Act and F
the Land Acquisition (Companies) Rules, 1963.

Part Vil of the Act contains sections relevant to the acquisition of land
for Companies, namely, Section 38-A to Section 44-B. Section 39 provides that
the procedure commencing with the declaration under Section 6 and terminating
with the distribution of compensation and possession of the land would not G
put into force to acquire land for any company under Part-Vil without:

(i) the previous consent of the appropriate Government, and

(ii) execution of an agreement between the company and the
appropriate Government under Section 41." H
506 SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A It is only ·after both the requirements are satisfied that further steps in the
acquisition of land for the company can be taken.

In Patel Chaturbhai Narsibhai and Others (supra) the first notification
under Section 4 of the Act was issued on 4th March 1961. After an inquiry
was held, the State Government gave its consent. On 22nd August 1961 an
B agreement was entered into between the State Government and the Company.
On 9th July 1965, the Land Acquisition (Gujarat Unification and Amendment)
Act, 1965 came into force amending Section 39 of the Act. The Notification
dated 4th March 1961 was cancelled on 28th September 1965. The next day
a fresh notification under Section 4 was issued. The dispute before this Court
C was whether the conditions for the issuance of the second Notification had
been satisfied. Admittedly, a second agreement was entered into between the
Company and the State Government after the second Notification under
Section 4 (I) on 13th January 1969 i.e. subsequent to the second Notification.
The State Government sought to rely upon the earlier agreement dated 22nd
August 1961. This was negatived. It was said:
D
"The enquiry pursuant to the notifications in the year 1961 and
previous to the fresh notifications in 1965 is of no effect in law for
two principal reasons. First, the 1961 notification was cancelled, and,
therefore, all steps taken thereunder became ineffective. Second, the
enquiry under Rule 4 in 1961 was held without giving opportunity to
E the land owner respondent, and, therefore, the enquiry is invalid in
law."

To begin with as far as the case before us is concerned there is no basis
for the submission that the acquisition was originally commenced under Part
F VII. The first Notification is not on record. The State has given no reason for
destruction of the file when the matter was pending for consideration before
this Court. However, after the publication of the first notification under Section
4( I) on 6th August 1987 the respondents-owners had objected. The objections
included a submission that the Society is not a registered Society. The second
G objection was that the acquisition was not for a public purpose. In dealing
with these objections by letter dated 12th I 19th November 1987 written by the
Assistant Commissioner, Tumkur to the Revenue Commissioner it was affirmed
that the appellant was registered and "the purpose of acquisition is housing.
As such the proposed acquisition falls under Section 3(e)(vi) read with
Section 3 (e) (vii)". Presumably the Assistant Commissioner meant Section 3
H (f) (vi) and 3(f) (vii).
STATE OF HOUSELESS HARIJAN EMPLOYEES ASSON. v. STATE [RUMA PAL, J.j 507

The respondents then relied upon a letter dated 27th March 1987 sent A
by the Under Secretary, Revenue Department to the Special Deputy
Commissioner, Tumkur District, Tumkur which reads as follows:

"While returning the records, I am directed to convey the approval of
Government to initiate acquisition proceedings under Karnataka Land
Acquisition (Company) Rules to acquire an extent of 15-00 acres of B
land in S.No.49 of Maralur village, Tumkur taluk in favour of State
Government Employees Association, Tumkur."

Whatever may be said in the internal correspondence, there 1s no
evidence that the matter was proceeded with under Part VII at all.
c
After the first notification under Section 4( I) was issued by letter dated
16th April 1988 sent by the Under Secretary to the Deputy Commissioner,
Tumkur, it was stated:

"While enclosing the records received from the Assistant
Commissioner, Tumkur under his letter cited above, I am directed to D
request you to send the recommendation of the District Level
Committee constituted in G.O.No. RD 193 AQW 185, dated 20.1.1986,
keeping in view the guidelines issued in Circular of even number
dated 23.4.1986, including the existent of land to be acquired to provide
house sites to its members." E
It was pursuant to this directive that enquiries were held and the
District and State Level committees enquired into and verified the appellant's
case before recommending it. The material was relevant not only to the
question of public purpose under Section 4 but could also form the basis of
an approval under Section 3 (f)(vi). It is not disputed that the material was F
considered when the second and the third notifications under Section 4( I)
were issued and both these Notifications clearly state that the acquisition was
being made for a public purpose and not under Part VII of the Act. Therefore,
even if the acquisition was originally commenced under Part-VII it was
continued under Part II. A converse situation occurred in Amarnath Ashram G
Trust Society (supra), where although the notification under Section 4 (I) was
issued for a public purpose, the declaration under Section 6 showed that it
was under Part VII. The declaration clearly referred to the inquiry made under
Rule 4 of the Land Acquisition (Companies) Rules, 1963 and the agreement
entered into between the appellant-Society and the State. Moreover, it was
not pleaded by the State before the High Court that the acquisition was for H

'
"'
508 SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A a public purpose and not under Chapter VII of the Act. Therefore, it was held
that it was not open to the counsel for the state to raise a contention which
was contrary to the case pleaded before the High Court.

In this case the earlier notifications were not cancelled nor is there any
question of any agreement under Section 41 being superseded by another. No
B further steps could be taken on the earlier notifications only because of
administrative delay which crossed the period of limitation provided under
Section 6( I )(A). While the proceedings under Section 4 (I) may come to an
end as a matter of law, it does not mean that the material on the basis of which
the earlier Notification was issued ceased to exist as a matter of fact.
c Section 4 (I) read with Section 3 (f) (vi) of the Act indicates that there
are two separate functions to be performed by the State Government. Under
Section 4 (I) it must prima facie come to the conclusion that the land
proposed to be acquired is required for a public purpose and under Section
3 (f)(vi), such tentative conclusion must be coupled with specific approval to
D acquire the land for the purposes specified for the benefit of the registered
society or co-operative society, as the case may be. The Act does not specify
the material on which either the tentative conclusion to Section 4 (I) or
approval under Section 3(f)(vi) is to be based. In Mis Fomento Resorts and
Hotels Ltd. v. Gustavo Ranato DA Cruz Pinto and Others, [ 1985) 2 SCC 152
E it was held that the view of the Government that land is needed either for
public purpose or for a company may be based either on independent enquiry
or from reports and infonnation received by the government or even from an
application by the company concerned. The same sources may provide
information for granting prior approval under Section 3(f) (vi). There is no
prohibition on the State Government acting on the basis of material already
F on record provided the material is sufficient, relevant and genuine. The
material in this case although collected prior to the issuance of the second
Notification was all these and according to the letter of approval, the matter
was "minutely examined" by the State Government in consultation with the
Law Department before granting the approval for the third and final notification
G in 1991.

The final submission of the owner-respondents was that the present
acquisition was in fact being made under Part VII and that none of the
provisions in Part-VII had been followed.

H The third Notification ex facie states that it was issued for public
STATE OF HOUSE.LESS HARIJAN EMPLOYEES ASSON. v. STATE [RUMA PAL, J ] 509

purposes under Part II of the Act. The finding of the learned Single Judge A
also was: "it is clear that the acquisition proceedings are initiated under Part
II of the Act and not under Part VII of the Act." Furthermore, the only
stumbling-block raised by the respondent-owners all along was the issue of
the applicability of Section 3 (t)(vi) only because the acquisition was under
Part II. It was commenced and continued as such. The respondent's argument B
that the procedure followed was a hybrid procedure of Part II and Part VII,
therefore, is erroneous.

From all this, the ultimate position which emerges is that the acquisition
in favour of the appellant was properly initiated by publication of the
Notification under Section 4 (I) and by the declaration issued under Section C
6. The withdrawal of the acquisition under Section 48 (I) was vitiated not only
because the appellant was not heard but also because the reason for withdrawal
was wrong. The High Court erred in dismissing the appellant's writ petition.
The decision of the High Court is accordingly set aside. The impugned
Notification under Section 48( I) is quashed and the appeal is allowed with
costs. D
M.P. Appeal allowed.