Holding

The Government’s requisition of the land was bona fide, not a collateral purpose, and the order was within the delegated authority under the Defence of India Act, 1962.

Summary

During World War II the Government of India acquired land for an aerodrome and later leased the unused 300‑acre portion to Banshidhar, who cleared the jungle and developed a tea garden. After the lease was taken, the Government claimed the land was needed for defence purposes and subsequently decided to auction the lease‑hold right annually, stating the land might be resumed at short notice. Banshidhar filed a writ petition under Art. 226 seeking to restrain the auction, and the High Court held that the auction was mala fide and for a collateral purpose. On appeal, the Supreme Court examined whether the requisition order issued by the Deputy Commissioner was within the powers delegated under Section 29(1) of the Defence of India Act, 1962 and whether the Government’s claim of defence need was bona fide. The Court found ample evidence that the land was indeed required for defence, especially after the 1965 war with Pakistan, and that the power to requisition had been validly delegated. Consequently, the Court held that the Government acted in good faith and not for a collateral purpose, and that the High Court’s finding was erroneous. The appeal was allowed and the writ petition dismissed.

Issues considered

Whether the requisition and proposed auction of the lease‑hold land by the Government under the Defence of India Act, 1962 was exercised in bad faith or for a collateral purpose.
Whether the Deputy Commissioner had authority to issue the requisition order under the delegated powers of Section 29(1) of the Defence of India Act, 1962.
Whether the claim that the land was required for defence purposes was bona fide at the time of the requisition.

Legislation cited

Defence of India Act, 1962s. 29(1), s. 40(1)

Subjects

Defence of India Actrequisitionbad faithcollateral purposepublic auctionArt. 226abuse of powergovernment landtea gardenbona fide

Judgment

A 554

STATE OF ASSAM & ORS

v.

BANSHIDHAR SHEWBHAGWAJ:' & CO.
B
September /, 1981

(V.0. TULZAPURKAR AND A. V ARADARAJAN, JJ.]

Lta$t of Government land-Land leased to respondenJ..--Respondent deV.elo-
C~ ped the land at great expense-Lease not renewed-Government claimed that land
was needed/or defence purposes-Later /pase sought to be auctioned-Land requi-
red by Government for same purpose-Action whether ma/a fide -Auction whether
for a collateral purpose. I
On a part of a large area of land acquired by the Government during -.., '
World War II an aerodrome was constructed and on the remaining 300 odd acres
D \Vhich remained unused a thick jungle grew over the years. i·

Pursuant to tl1e decision of thr Government of India to lease out the un- •
{!
used portion of the land, the respondent entered into an agreement with the
Government and took possession of tJ·,e land after paying one year·s rent in
advance.

E The respondent alleged that, after taking possession of the land, he had •
spent a large sum of money in clearing the jungle and makjng it a well managed
tea garden. He also alleged that the concerned Government officials were
putting off execution of the lease deed on some pretext or the other. Having
had no satisfactory reply from the Government, the respondent moved the
Government of India through a Member of Parliament who was informed that
the land was required for defence purposes and that it would not be possible to
f ex.tend the lease. A few months later the Defence Minister informed the Member •
of Parliament that the Government had decided to auction the lease-hold right
on an annual basis in order that possession of the land could be resumed for
defence purposes at short notice. A notice for public auction was thereafter
issued.

The respondent filed a writ petition in the High Courl and obtained an
G order restraining the appellants from auctioning the land.

In the meantime the respondent filed title suits against the Government.

The respondent contended that the auction notice was ma/a fide because~
having found that the jungle had been cleared and the land had been
H developed into a workable tea garden, the Government wished to lease the land
to the highest bidder for getting a large amount of money and that this was for a
collateral purpose. The High Court upheld this contention.
ASSAM v. BANSHIDHAR (Varadarajan, J.) 555
Allowing the appeal,

HELD : If any authority exercised in bad faith or for collateral purpose
power conferred on it by law such action would be struck down as an abuse of
power and a fraud on the statute. [559 E-F]

In the present case however there is much evidence on record to establish
that there was no lack of bona/ides on the part of tbe Government and that the B
action sought to be taken by it was not for a collateral purpose. Had the atten..
tion of the High Court been drawn to the. material on record, there was no possi•
bility of the High Court coming to the conclusion that it did.

Although in 1962 the Deputy Minister for Defence in the first instance
informed the member of Parliament, who interceded on behalf of the respondent
that the land was required for defence purposes and for that reason it would not
be possible to extend the then current lease but later stated that it was decided to
c
lease out the land to the highest bidder by way of public auction on a yearly basis
and the Deputy Commissioner in the affidavit had stated that the land was not
required for defence purposes until 1964, the need for defence purposes did arise
when the war with Pakistan broke out in 1965. It could not, therefore, be said
that the Government did not need the land for defence purposes in 1966 when
the order was issued. Defence requirements depend on many unforeseeable D
factors. [559 F-H] •

That apart, the appellants did state right from the beginning that the lease
was subject to the condition that whenever the Government needed the land for
defence purposes it would be determined by notice without payment of compen·
sation and that the Government was not bound to renew the lease. (560 F-G]
E
There is, therefore, nothing to support the finding of the High Court that
the Government had never put forward the plea that the land would be required
for defence purposes at any stage in the title suits and that it was putting forward
such a case only as a ruse to auction the land for a larger amount of rent. [561H]

• CIVIL APPELLATE JURISDICTION : Civil Appeal No. 321 (N)
of 1970. F
From the judgment and order dated the 30th July, 1968 of the
Assam & Nagaland High Court at Gauhati in Civil Rule No. 420
of 1966.

S.K. Nandy and Krishna Prosad for the Appellants. G
S.N. Choudhary for the Respondents.
The Judgment of the Court was delivered by

VARADARAJAN, J. This appeal by special leave is by the H
respondents in Civil Rule 420 of 1966 against the Judgm~nt and
Order dated 30th July, 1968 passed by the Division Bench of the
556 SUPREME COURT REPDRTS (1982] 1 S.C.R.

A High Court of Assam and Nagaland, allowing the Writ petition
with no order as to costs. That writ petition was filed under
Art. 226 of the Constitution for quashing the order of requisition
issued by the Deputy Commissioner, Lakhmipur-Dibrugarh, the
second appellant in this appeal and the first respondent in the writ
petition-under Memo No. LA/27511-15/R dated 25.10.1966. Tbe
B Memo was issued in exercise of the powers conferred bys. 29 (i) ,,.,
of the Defence ofTndia Act, 1962 (51 of 1962) read with the Notifi-
cation of the Government of India, Ministry of Home Affairs No.
S.O. 1888 dated l 0th June, 1965 in respect of the properties descri-
bed in the schedule attached thereto viz. Sookerating Tea Estate
and Budla Beta Tea Estates, situate in Dum-Duma, Mauza Lakhmi-
c pur District on the ground that the lands were necessary for securing
the defence of the country and efficient conduct of military
operations.

During the Second World War, in 1940 the Government of
India acquired for defence purposes a part of Sookerating Tea
D Estate with its adjoining lands measuring in all 769.20 acres for •
constructing an air field. The air field was constructed over an
area of 469 acres and on the remaining 300.20 acres there were tea
bushes which were growing wild and overgrown with thick jungles.
After the war was over, the area on which the air field had been
constructed viz. 469 acres was transferred to the State Government
E for its use. In the writ petition it was stated that that area was
still lying unused. The Government of India wanted to lease out
the said 300.20 acres to some established tea planters with a view
to earn foreign exchange. The respondent, a registered partnership
firm owning the Bagrodia Tea Estate negotiated with the Estates •
Military Officer, Assam Circle at Shillong and the Ministry of
F Defence, Government of India and entered into an agreement of
lease dated 2.3.1962 in respect of the land on a rent of Rs. 6304.20
per annum for a term of one year renewable l'or a period of one
year at a time if the land was not required by the lessor. The
respondent took possession of the land on 10.3.1962 after paying
the annual rent in advance on 2.3.1962. It was alleged in the writ
G petition that the respondent thereafter improved the land at a cost
of Rs. 1,75,000/- and made it into a well managed tea garden. The
Military Estates Officer was putting off the execution of the lease
deed on some pretext or the other, though the respondent had
deposited the requisite stamp papers for the execution of the lease
H deed. When the respondent approached the Government of India
through a Member of Parliament, the Deputy Minister for Defence
ASSAM v. BANSHIDHAR (Varadarajan. J.) 557

informed the Member of Parliament by his letter dated 20.12.1962 A
that the land was required for defence purposes and that it would
not be possible to extend the current lease. Subsequently the
Defence Minister informed the Member of Parliament by his letter
dated 1.4.1963 that as several tea planters have evinced interest in
the estate it was decided to auction the leasehold right in the land
on an annual basis subject to the condition that the land might be B
resumed for defence purposes at short notice. No action was taken
on the respondent's request made on 25 1.1963 for renewal of the
lease. But the Military Estate Officer, Jorhat Circle, the 4th
appellant, issued a notice on 20.3.1963 for leasing the land for one
year by public auction. The respondent filed a writ petition in the
High Court and obtained rule nisi as well as an interim order c
restraining the appellants from giving effect to the said notice dated
20.3.1963. The petition filed by the appellants on 28.5.1963 for
restraining the respondent from plucking tea leaves was rejected.
The respondent filed Title Suit No. 30 of 1963 in the Court of the
Subordinate Judge, Upper Assam Disiricts, Dibrugarh on 18.7.1963
for certain reliefs including confirmation of possession of the
D
.. land and specific performance of the agreement to lease and obtained
an interim injunction restraining the appellants from interfering
with the possession of the land. The writ petition was not pressed
in view of the institution of Title Suit No. 30 of 1963 by the respon-
dent. The respondent filed Title Suits Nos. 6 of 1964 and 13 of
1965 in the same Court praying for the same reliefs in respect of the
E
years 1964 and 1965 and obtained temporary injunction. The
respondent filed Title Suit No. 4 of 1966 in the same court for the
same relief. All those suits were pending on the date of institution
of the present writ petition. The respondent received the impugned
order of requisition on 26.10.1966 from the second appellant and
• subsequently filed the present writ petition for the aforesaid reliefs
F
on several grounds.

The appellants in this appeal and other respondents in the
writ petition filed counter affidavits opposing the petition and con-
tending inter a/ia that the question of requisition of the land for G
defence purposes has been decided upon by the Government of India
and the impugned order is bonafide and has been made by the
competent authority under the Defence of India Act.

Two contentions were urged before the Division Bench Of H
the High Court on behalf of the respondent. The first was that the
second appellant, the Deputy Commissioner, Dibrugarh, who has
558 SUPREME COURT REPORTS [1982) I s.C.R.

A issued the impugned order has stated in the order that in bis opinion
it was necessary to requisition the property, and it was urged before
the learned Judges of the High Court that the Deputy Commissioner
was not competent to form the opinion.

Section 29 (I) of the Defence of India Act, 1962 (51 of 1962)
B reads:

(I) "Notwithstanding anything contained in any other
law for the time being in force, if in the opinion of the
Central Government or the State Government it is necessary
or expedient so to do for securing the defence of India,
c civil defence, public safety, maintenance of public order or
efficient conduct of Military operations, or for maintaining
supplies and services essential to the life of the Community
that Government may by order in writing requisition any
immovable property and may make such further orders as
appear to that Government to be necessary or expedient in
D connection with the requisitioning :

Provided that no property or part thereof which is
exclusively used by the public for religious worship shall be
requisitioned."

E Clauses (a), (b) and (c) of Section 40(1) of the Defence of
India Act provide for delegation of the power or duty under the Act
or by any rule made thereunder and read :

Section 40 Power to delegate :

F (i) The Central Government may by order, direct that
any power or duty which by this Act or by any •
rule made under this Act is conferred or imposed
upon the Central Government shall, in such cir-
cumstances and under such conditions, if any, as
--
G may be specified in the direction be exercised or
discharged also,

(a) by any officer or authority subordinate to the
Central Government, or

e (b} whether or not the power or duty relates to a
matter with respect to which a State Legisla-
ture has power to make laws, by any State
ASSAM v. BANSHIDHAR (Varadarajan, J.) 559

Government or by any officer or authority A
subordinate to such Government, or

(c) by any other authority."

The opinion that the land is necessary for defence purposes
can be formed in view of s. 40 (I) (c) of the . Defence of India Act 8
by any authority to whom the power to requisition under s. 29 (I)
of that Act has been delegated by the Government of India. The
Ministry of Home Affairs had, by Notification No. S.O. 1888
dated 10.6.1965 published in the Gazette of India (Extraordinary)
dated 11.6.1965, delegated the power conferred by s. 29 of the Act
to all Collectors;District Magistrates, Additional District Magistrates c
and Deputy Commissioners in the States and all Political Officers in
the North Eastern Front Area. The learned Judges of the High
Court have held that the Notification is valid and that the delega-
tion can be unrestricted and found the first contention to be un-
tenable. No argument was advanced before us by learned c;mnsel
for the respondent in regard to that contention. The first conten- D·
., tion has, therefore. to be held to be untenable .

The second contention urged before the High Court success-
fully on behalf of the respondent was that the impugned order of
requisition is malafide. There can be no doubt that if any autho-
rity exercised any power conferred on him by law in bad faith or E
•
for collateral purpose, it is an abuse of power and a fraud on the
statute. In such a case there can be no difficulty in striking down
that act of the authority by the issue of an appropriate writ under
Art. 226 of the Constitution. It is true that the Deputy Minister
for Defence informed the Member of Parliament who appears to
• have been pleading for the respondent by his letter dated 20.12.1962
F
(annexure 'C' to the writ petition) that the current lease of the land
could not be extended because the land was required for defence
purposes and that in the subsequent letter dated 1.4.1963 (anne-
xure 'D' to the writ petition) the then Minister for Defence had
informed the said Member of Parliament that since several tea
G
planters have evinced interest in the lanj it would be in the public
interest to auction the leasehold right only on an yearly basis subject
to the condition that the land can be resumed at short notice for
defence purposes. In his affidavit the· Deputy Commissioner,
lakhimpur, the second appellant has stated that the land was not
required for defence purposes until 1964 and that the need for
defence purposes arose thereafter and the impugned order was issued.
560 SUPREME COURT REPORTS [I 982J I S.C.R.

A It must be noted in this connection that it was not disputed before
us that the war with Pakistan started in June 1965. This Court
could even take judicial notice of that fact. The impugned requisi-
tion order was passed on 25.10.1966. Therefore, it cannot be stated
that there was no need of the land for defence purposes in Octo-
ber 1966 from the mere fact that Deputy Minister for Defence
B had stated in bis letter dated 20 12.1962 referred t0 above that the
current lease could not be extended because the land wa, required
for defence purposes and the Minister for Defence had stated in
his letter dated 1.4.1963, referred to abave, that as several tea
' ;

planters have evinced interest in the land it would be in the public
interest to auction the leasehold right in the land on a yearly basis
c alone subject to the condition that it can be resumed at a short
notice for defence purposes. That letter of the Minister for
Defence does not altogether rule out the possibility of the land
being required for defence purpC>ses at any time and being
made available for those purposes at short notice. Defence
requirements may change from time to time depending upon various
D factors including intelligence reports about the enemy's movements
and preparations for war. The High Court has held in favour of the
respondent on the question of want of bonafides on the part of the .
appellants on the basis that in the aforesaiJ title suits filed by the
respondent it was not pleaded by the appellants that the land was
required for defence purposes. The learned Judges of the High
Court appear to have accepted the submission made before them on
behalf of the respondent in this appeal that no such plea had been
raised in the pleadings in the title suits filed by the respondent. That
submission is incorrect, and it is unfortunate that the attention of
the learned Judges had not been invited to the material on record to
show that such a contention was in fact put forward by the 4 th
appellant in his pleading in the title suits. In the auction notice
(annexure 'E") dated 20.3.1963 itself it was stated that the lease will
be subject to the condition that whenever the Government needs the
land for defence purposes it will be determined by issue of notice
giving 30 days time without payment of any compensation. In the
written statement dated 17.7.1965 filed by the 4th appellant in the
G
Title Suit No. 6 of 1965, it was stat<d in respect of the allegation
made in para 26 of the plaint in that suit that since the land is
required for defence purposes the defendant was not bound to
renew the lease and that even in Title Suit No. 6 of 1964 the defen-
H dants have filed written statement contesting the claim of the
respondent/plaintiff. It was also stated in that written statement
in regard to the allegations made in para 11 of the plaint that the
ASSAM v. BANSHIDHAR ( Varadarajan, J.) 561

land is required for defence purposes. In regard to the allegations A
in paragraph ~6 of the plaint it was contended in the written state-
ment that the land is required for defence purposes and that any
lease under the present emergency would be detrimental to the
interests of the defence of the country. Even in the counter affida-
vit dated 17. 7.1965 filed in the application for interim injunc-
tion moved in the Title Suit No. 15 of 1965 the 4th appellant had
stated that the land is required for defence purposes, and there is
no question of holding any auction for lease of the land, that if the
order of interim injunction is not vacated the defence preparation
of the country will be hampered as the land is urgently needed for
-. defence purposes and the interest of the nation will suffer, that no
irreparable loss or damage which cannot be compensated in money c
would result from vacating the injunction and that on the other
/ hand denying the use of the land for defence purposes at this critical
juncture would cause irreparable loss to the Government and the
nation as a whole. In the written statement dated 22.6.1965 filed in
Title Suit No. 4 of 1966 the 4th appellant had stated with regard
• to allegations made in para 11 of the plaint that it is asserted that
the land is bonafide required for defence purposes. Thus it is seen
D

from the materials on record that at least in Title Suits Nos. 15 of
1965 and 4 of 1966, the plea that the land was required urgently for
defence purposes was taken by the 4th appellant who appears to
have put forward the defence of the appellants in this appeal as a
whole. The learned judges of the High Court were, therefore, not right
E
in observing in their judgment that the intention of the Government
is to lease the land to the highest bidder in the hope of getting a
large amount of money because the land had been developed into
a working tea garden, that the purpose cannot be said to be bona-
fide and that it must be held that the land is being requisitioned
only for collateral purposes. The only basis for this inference of
the learned Judges of the High Court is the supposed failure of tile
defendants in the title suits filed by the respondent to take the plea
that the land is required for defence purposes. That basis being
found to be wrong and unavailable, it is not possible to agree with
the learned Judges of the High Court that the requirement of the G
land for defence purposes was not bonafide. The Government of
India whose case the 4th appellant had put forward in the respon·
dent's title suits as mentioned above is the most competent authority
to know when the need for defence purposes will arise or has arisen,
and there is no material on record to hold in this case that the land H
was not required on the date of impugned requisition bonafide for
defence purposes and that the appellants were putting forward such
562 SUPRBMB COURT REPORTS (1982) I s.c.R.

A a case in the impugned order only as a ruse to auction the land
for larger amount of rent. Under these circumstances we find our-
selves unable to uphold the judgment of the learned Judges of the
High Court. We accordingly allow the appeal with costs and
dismiss the writ petition.

B
P.B.R. Appeal allowed.

•
•

•