STATE OF TAMIL NADU AND ANR.versusA. MOHAMMED YOUSEF AND ORS.

                   STATE OF TAMIL NADU AND ANR.                                   A
                                 v.
                   A. MOHAMMED YOUSEF AND ORS.

                                AUGUST 6, 1991

           [LAUT MOHAN SHARMA AND J.S. VERMA, JJ.)                                B

           Land Acquisition Act, 1894--Section 4--Notification for acquisi-
     tion of land for construction of houses by Tamil Nadu Housing Board
     without preparing scheme under the Madras State Housing Board Act,
     1961-Validity of.
y
           Under Section 4 of the Land Acqnisition Act, 1894 a notification
                                                                                  c
     was issued by the petitioners proposing to acquire the land of the
     respondents for construction of houses by the Tamil Nadn Honsing
     Board, constituted under section 3 of the Madras State Honsing Board
     Act, 1961.
                                                                                  D
            The respondents challenged the impugned notification in a writ
     petition, which was allowed by the Single Judge of the High Court
     holding that the public purpose mentioned in the notification was too
     vague in absence of details relating to the scheme for which the acquisi-
     lion was sought to be made, and consequently the land owners could not
     effectively avail of the benefits under section SA of the Land Acquisition   E
     Act by filing objection. This order was affirmed by the Divisio>n Bench
     r>f the High Court.

           The State-the petitioners filed this Special Leave Petition contend-
~    ing that the notification had adequately described the nature of the
y    public purpose by mentioning the proposed construction of residential F
     buildings and the respondents ought to have filed their objections nnder
     section 5-A instead of filing the writ petition; that the procedure in
     regard to the preparation of the scheme has to await the conclnsion of
     the land acquisition proceeding; that the land acquisition proceeding
     should not be condemned as pre-mature on the ground that the scheme
     has not been framed.                                                       G

           The respondents contended that in view of the provisions of the
.\   Housing Board Act a proceeding for land acquisition can be commenced
     only after a scheme under the Act is framed, which has not been done in
     the present case. The land acquisition proceeding, being pre-matdl'e
     has been rightly quashed.                                                    H

                                        375
    376                    SUPREME COURT REPORTS              [1991) 3 S.C.R.

           On the question whether the acquisition proceeding could be
A
    initiated only after the framing, of the proposed scheme and not earlier,
    dismissing the Special Leave Petition of the State, this Court,

           HELD: 1.01. The procedure prescribed for preparation of a
    scheme indicates that before it can be finalised, full pnblicity has to
B   be given inviting objections; and in case of objections, the same have
    to be duly considered before granting sanction. Further, if anybody
    is still aggrieved, he has a right of appeal to the State Government.
    It is only after this sta:ge is over that the scheme becomes final and
    enforceable. [378F)

           1.02. Section 39 of the Madras State Housing Act, 1961 while
c   enumerating the matters to be included in the scheme, speciftcally men-
    tions acquisition of land in clause (a). If the acquisition is contemplated
    as. a subject matter of the scheme itself, it follows that it must await the
    preparation of the scheme wherein it will be included. [379F]

D         1.03. The acquisition of the land is a part of the execution of the
    scheme itself. Since the acquisition is included in the scheme the process
    of execution of the scheme starts immediately when steps for acquisition
    are taken. [381A-B]

          I.04. If the notification under section 4 under the Land Acquisi-
E   lion Act is published without waiting for the scheme, it will not be
    possible for the land owners to object to the proposed acquisition on the
    ground that the land is not suitable for the scheme at all, and therefore
    does not serve any publk purpose, or that another piece of land in the
    area concerned, is far more suitable, leading to the possible conclusion
    that the proposed acquisition is ma/a fide. The provisions of the Hous-
F   ingBoardActalsosngge•;tthesame. [381-DF]

          I.OS. It will be practical and consistent with common sense to
    have the scheme f'malised before starting an acqnisition proceeding. A
    proceeding nnder the Land Acqnisition Act read with section 70 of the
    Madras Housing Board Act, can be commenced only after framing the
G   scheme for which the IBJnd is reqnired. The notification issned nnder
    section 4 in the present case must, therefore, be held to be pre-mature,
    and it was rightly qnasbed by the High Court. [381G-382A]

          1.06. Altbongb the initiation of the proceeding for acquisition bas
    to await framing of a scheme, it does not mean that the concluded
H   acquisition proceeding can be condemned as void so as to be ignored
                         STATE OF T.N. v. A.M. YOUSEF (SHARMA, J.]             377

            later, A ground based on the present judgment shall be available to the
                                                                                      A
            land owners only for such land acquisition proceedin25, which are
            under challenge and are still pending decision. [382C-D I
'   ..,.,
                 Babu Barkya Thakur v. The State of Bombay and Others, [1961 I
            l SCR 128, distinguished.
                                                                                      B
                 CIVIL APPELLATE JURISDICTION: Special Leave Petition
            (C) No. 3790 of 1991.

                 From the Judgment and Order dated 29.3.1990 of the Madras
            High Court in W.A. No 1028 of 1989.

                 G. Ramaswamy, Attorney General, R. Mohan, V. Krishna-
                                                                                      c
            murthy and R. Ayyam Perumal for the Petitioners.

                 K. Parasaran, K.R. Chaudhary, T.V.S.N. Chari, Ms. Suruchi
            Agjlarwal and Ms. Manjula Gupta for the Respondents.
                                                                                      D
                 The Judgment of the Court was delivered by

                  SHARMA, J. The respondents have successfully challenged a
            notification under Section 4 of the Land Acquisition Act, 1894 propos-
            ing to acquire their land before the Madras High Court. Their writ
            petition was allowed by a learned Single Judge and on appeal the order    E
            was confirmed by Division Bench. The State of Tamil Nadu has chal-
            lengeo the decision by the present Special Leave Petition.

                  2. The acquisition proceeding, ·which is the subject matter of
            present case, was started for obtaining land for construction of houses
            by the Tamil Nadu Housing Board, constituted under Section 3 of the       F
            Madras State Housing Board Act, 1961 (Madras Act No. 17 of 1961)
            (hereinafter referred to as the 'Housing Board Act') and this was
            mentioned in the imp:igned notification. The High Court has held that
            the public purpose mentioned in the notification was too vague in
            absence of details relating to the scheme for which the acquisition is
            sought to be made, and consequently the land owners cannot effec-         G
            tively avail of the benefits under Section 5A of the Land Acquisition
            Act by filing their objection. The learned Attorney General, appear-
            ing for the petitioner State, has contended that the notification has
            adequately described the nature of the public purpose by mentioning
            the proposed construction of residential buildings, and the respon-
            dents ought to have filed their objections under Section 5A instead of    H
    378                   SUPREME COURT REPORTS             (1991] 3 S.C.R.

    moving the High Court with a writ application. Relying on the decision
A
    in Babu Barkya Thakur v. The State of Bombay and Others, [ 1961] 1
    SCR 128 it has been argued that even assuming that the public purpose
    was not mentioned in the notification with sufficient particularity, the
    proceeding cannot be quashed at this stage and the High Court should
    have dismissed the writ petition by pointing out that the remedy of the
B   land owners was under Section SA.

         3. The reply of Mr. Parasaran, the learned counsel for the
    respondents, is that in view of the provisions of the Housing Board Act
    a proceeding for land acquisition can be commenced only after a
    scheme under the Act is framed, which has not been done in the              ·)
    present case. The land acquisition proceeding, therefore, being pre-
c   mature has been rightly quashed.

          4. As is indicated by the preamble of the Housing Board Act,
    the object of establishment of the Housing Board is to provide for the
    execution of housing and improvement schemes. The Act envisages
D   eight types of schemes detailed in section 40, the housing scheme, as in
    the present case, being one of them. The framing of the schemes is
    dealt with in Chapter Vil (Section 35 to 69) and Chapter VIII contain-      'r


                                                                                     -
    ing sections 70, 71 and 72 provides for acquisition and disposal of land.
    Section 70 states that land required by the Board for any of the
    purposes of this Act may be acquired under the provisions of the Land
E   Acquisition Act and accordingly the present land acquisition proceed-
    ing was commenced.

          5. The procedure prescribed for preparation of a scheme indi-         ;
    cates that before it can be finalised, full publicity has to be given       ..., \.
    inviting objections; and in case of objections, the same have to be duly
F   considered before granting sanction. Further, if anybody is still
    aggrieved, he has a right of appeal to the State Government. It is only
    after this stage is over that the scheme becomes final and enforceable.
    Admittedly the proposal to build houses in the present case has not
    been put in the shape of a scheme at all and as stated on behalf of the
    petitioner a draft scheme with relevant details will be drawn up after           ,_
G   the possession of the land is secured.
                                                                                t
          6. The question for decision is whether the acquisition proceed-
    ing can be initiated only after the framing of the proposed scheme and
    not earlier. The learned Attorney General contended that having
    regard to the provisions of the Act and the other relevant considera-            '
H   tions it must be held that the procedure in regard to the preparation of
                    STATE OF T.N. v. A.M. YOUSEF [SHARMA, J.)                379

       the scheme has to await the conclusion of the land acquisition proceed-
       ing. It is only after the possession of the land is delivered to the Board
                                                                                    A
       that its engineers and other experts can go over the land, make neces-
       sary inspection and collect vital data, on the basis of which the scheme
       can be drawn up. It is essential to have a clear idea of the area of the
       land, its boundaries, and the nature of the soil for deciding about the
       details of the proposed scheme, and this is not possible ;o long the         B
       owner of the land continues in possession. Any attempt to draw up a
       scheme earlier has been described by the learned counsel as an exer-
      .cise in futility. Alternatively it has been contended that even if it be
       held to be permissible to frame the scheme without waiting for the
       acquisition and possession of the land, it cannot be further assumed
       that the land acquisition proceeding has to await the finalisation of the
       scheme. In other words, both the proceedings may continue simultane-         c
       ously, or any of the proceeding including one for land acquisition can
       be commenced without waiting for the other. In any event, the land
       acquisition proceeding should not be condemned as pre-mature on the
       ground that the scheme has not been framed. We have closely
       examined the entire Act with the assistance of the learned counsel for       0
       the parties and in our view the contention on behalf of the respondents
       that the proceeding for acquiring land can be commenced only after
       the scheme is framed, is well founded.

            7. As has been stated earlier, Chapter VII containing sections 35
      to 69 deals with the framing of the scheme. The Act has laid down             E
      separate procedures for the different types of schemes, according to
      necessity and suitability. Some of the schemes do not require acquisi-
)     tion of land, which is however, essential for constructing residential
'>'   buildings under the housing scheme. Section 39 of the Act, therefore,
      while enumerating the matters to be included in the scl!eme, specifi-
      cally mentions acquisition of land in clause (a). If the acquisition is       F
      contemplated as a subject matter of the scheme itself, it follows that it
      must await the preparation of the scheme wherein it will be included.

            The Act requires the proposed scheme to be published permit-
      ting objections to be made, and if they are found to be valid, under
      section 53, the scheme to be modified or abandoned. Sub-section (1) G
      of section 49 directs the notice of the draft housing scheme to include
      and specify the following information as contained in clause (b) for the
      purpose of publication and information to the general public:

                   "(b) the place or places aLwhich particulars of the scheme.
                   a map of the area, and details of the land which it is pro-      H
    380                    SUPREME COURT REPORTS             (1991] 3 S.C.R.

                posed to acquire and of the land in regard to which it is
A
                proposed to recover a betterment fee, may be seen at reason-
                able hours."
                                                          (emphasis added)

    The underlined words above reaffirm the position that the acquisit;on
B   of the land has to be a part of the scheme, which can be executed only
    after its finalisation. Apart from the provisions of section 53
    mentioned above, section 56 further clothes the Board with the power
    to alter or cancel the scheme even after it is finally sanctioned. The
    language of clause (b) of the proviso to the section, which is quoted
    below, once more leads to the same conclusion that acquisition of the
    land has to await the framing of the scheme:
c
                "(b) If any alteration involves the acquisition otherwise
                than by agreement of any land not previously proposed to
                be acquired in the original scheme, the procedure pres-
                cribed in the forgoing sections of this Chapter shall, so far
D               as it may be applicable, be followed as if tfia alteration
                were a separate scheme."
                                                          (emphasis added)        'i
          8. Mr. Attorney General repeatedly said that unless the Board
    gets actual possession of the land in question its officers cannot go over
E   the same for collecting the information essential for drawing up of the
    scheme. It has, therefore, been suggested that it is wholly impractical
    to expect the scheme to be framed before obtaining the possession of
    the land. Mr. Parasaran, the learned counsel for the respondents,
    rightly pointed out that the provisions of section 147 furnish a comp-
    lete answer to this argument. The section empowers the Chairman
F   (now the Managing Director) of the Board or any person either gener-
    ally or specially authorised by him in this behalf to enter into or upon
    any land with or without assistants or workmen for the purpose of
    making any inspection, survey, measurement, valuation or enquiry or
    to take levels or to dig or bore into sub-soil or to set-out boundaries and
    intended lines of work et cetera. The last clause in the section gives
G   wide power to do any other thing which may appear necessary for
    achieving the purpose of the Act subject to certain reasonable
    restrictions.

         The learned Attorney General also relied on sections 55 and 72
    in support of the petitioners' stand. Section 55 directs the Board to
H   proceed to execute the scheme as soon as it becomes enforceable. It is
             STATE OF T.N. v. A.M. YOUSEF (SHARMA, J.l                381

contended that if the acquisition proceeding is not over by the time the
                                                                             A
scheme is ready, undue delay is bound to take place. The fallacy in the
argument is that it assumes that the acquisition of the land is not a part
of the execution of the scheme itself. As has been indicated earlier the
position is otherwise. Since the acquisition is included in the scheme
the process of execution of the scheme starts immediately when steps
for acquisition are taken. Thus there is no question of any disregard of     B
the command in section 55. Section 72 empowers the Board to lease,
sell, exchange or otherwise dispose of any land vested in or acquired
by it. This power has been granted to the Board, according to the
petitioners, so that if the scheme is abandoned under section 53 the
land already acquired can be disposed of. We do not see any warrant for
linking section 72 with section 53. The Board has been given the power
to dispose of any land whenever it is considered in the interest of the      c
Board to do so; and the circumstances where it may be expedient to
use this power may be many, as for example, when the scheme is
altered or cancelled under section 56 due to a new development.

      9. On the other hand, the order, in which the different steps for D
the preparation of the scheme and the ·acquisition of the land, is
suggested on behalf of the petitioners to be taken, appears to be
impractical and defeating the purpose of section SA of the Land
Acquisition Act. If the notification under section 4 under the Land
Acquisition Act is published without waiting for the scheme, as has
been done in the present case, it will not be possible for the land E
owners to object to the proposed acquisition on the ground that the
land is not suitable for the scheme at all, and therefore does not serve
any public purpose, or that another piece of land in the area
concerned, is far more suitable, leading to the possible conclusion that
the proposed acquisition is mala fide. As discussed above, the provi-
sions of the Housing Board Act also suggest the same. The Board has F
not been vested with the unrestricted power to frame any scheme, as
suggested by its planners. It has to take into account the representa-
tion by the local authority as mentioned under section 50 and the
objection of any other person under section 53 and decide the same on
merits before according sanction. The matter is not concluded even at
that stage; the aggrieved person may appeal to the State Government G
and it is only subject to the final result therein that the scheme
becomes enforceable. In this set up it will be practical and consistent
with common sense to have the scheme finalised before starting an
acquisition proceeding. We, accordingly, hold that a proceeding under
the Land Acquisition Act read with section 70 of the Madras Housing
Board Act, can be commenced only after framing the scheme fo             H
    382                   SUPREME COURT REPORTS            [ 1991] 3 S.C.R.

A   which the land is required. The notification issued under section 4 in
    the present case must, therefore, be held to be pre-mature, and it was
    rightly quashed by the High Court.

          10. Before closing his argument Mr. Attorney General stated
B   that in the past a large number of land acquisition proceedings have
    been concluded and lands acquired without first framing the scheme
    and on the basis of the present judgement there may be an attempt by
    the land.owners of those lands to re-open the matter. We do not think
    that as a result of this judgment the concluded land acquisition pro-
    ceedings can be allowed to be re-opened. Although we have held· that
    the initiation of the proceeding for acquisition has to await framing of
c   a scheme, it does not mean that the concluded acquisition proceeding
    can be condemned as void so as to be ignored later. However, to avoid
    unnecessary controversy we are hereby clarifying the position that a
    ground based on the present judgment shall be available to the land
    owners only for such land acquisition proceedings, which are under
    challenge and are still pending decision.
D
          11. The special leave petition is dismissed, but in the circums-
    tances without costs.

    V.P.R.                                               Petition dismissed.