PARSHOTTAM VERIBHAI PATEL v. STATE — 1965 DIGILAW 17 (GUJ)

J. B. MEHTA, J. ( 1 ) IN this petition under Articles 226 and 227 of the Constitution the petitioners have prayed for an appropriate writ or order to quash the notifications issued under sections 4 and 6 of the Land Acquisition Act 1894 (hereinafter referred to as the Act ). ( 2 ) THE petitioners are owners of the various lands admeasuring 8 Acres and 24 Gunthas situate in village Gorwa in Baroda Taluka. By an application dated August 29 1959 respondent No. 2 the Alembic Chemical Works Company Limited Baroda applied to the Collector of Baroda to acquire those lands of the petitioners for the development of of the Company by setting up new divisions under the name of Alnishhompro. A notification under section 4 dated March 31 1960 was issued by the State Government as it appeared to respondent No. 1 that the said lands were likely to be needed for the purposes of the company viz. the Alembic Chemical Works Co. Ltd. Baroda. After the inquiry as the Government was satisfied that the acquisition of the said lands was needed for starting the factory it consented to the provisions of the Act being put in force in order to acquire the said land for the company and had therefore in pursuance of section 41 of the Act required the company to enter into an agreement. The said agreement was entered into by the company on September 3 1960 and was published on July 5 1961 On July 5 1961 the final notification under section 6 of the Act was issued. The material part thereof runs as under :-"whereas by Government Notification in the Revenue Department No LBA. 1560/43148 dated 31st March 1960 it was notified that lands specified in the Schedule hereto (hereinafter referred to as the said lands) were likely to be needed for the public purpose specified in column 4 of the Schedule hereto. And whereas Government of Gujarat is satisfied after considering the report of the Collector under subsec. (2) of sec. 5a of the Land Acquisition Act 1894 (I of 1894) that the said Lands are needed to be acquired at the expense of the Alembic Chemical Works Co. Ltd. Baroda for the public purpose specified in column 4 of the Schedule hereto. It is hereby declared under the provisions of sec. (2) of sec. 5a of the Land Acquisition Act 1894 (I of 1894) that the said Lands are needed to be acquired at the expense of the Alembic Chemical Works Co. Ltd. Baroda for the public purpose specified in column 4 of the Schedule hereto. It is hereby declared under the provisions of sec. 6 of the said Act that the lands are acquired for the public purpose specified in column 4 of the Schedule hereto. " ( 3 ) THE purpose mentioned in column 4 of the Schedule was for Alembic Chemical Works Co. Ltd. Baroda. The said acquisition is therefore challenged by the petitioners. ( 4 ) IT is not in dispute that possession has not been taken of the lands in question. As the property sought to be acquired is not vested in the Government either under section 16 or section 17 of the Act this is not a case of acquisition which has been completed before July 20 1962 to which section 7 of the Land Acquisition (Amendment) Act No. XXXI of 1962 could apply so as to attract the provisions of section 40 (1) (aa) as inserted in section 40 clause (1) of the Act by the said Amending Act. Therefore the present matter would by governed by the interpretation put by the Supreme Court on section 40 (1) (b) in the first case of R. L. Arora v. State of Uttar Pradesh A. I. R. 1962 S. C. 764 and not by the second case of R. L. Arora v. State of Uttar Pradesh A. I. R. 1964 S. C. 1230. The application of section 40 (1) (a) also being out of question as this is not a case of acquisition for housing of the industrial workers of the company this acquisition for respondent No. 2 can be justified only if it is covered under section 40 (1) (b) i. e. if it is for construction of some work likely to prove useful to the public. In the first Aroras case (Supra) it was held by the Supreme Court that it was only by reading the fifth term of section 41 together with this section 40 (1) (b) that it was possible to find out the intention of the Legislature when it provided for acquisition of land for a company through the agency of Government. In the first Aroras case (Supra) it was held by the Supreme Court that it was only by reading the fifth term of section 41 together with this section 40 (1) (b) that it was possible to find out the intention of the Legislature when it provided for acquisition of land for a company through the agency of Government. In para 21 at page 774 it was held:-"what these provisions of secs. 40 and 41 require is that the work should be directly useful to the public and the agreement shall contain a term how the public shall have the right to use the work directly themselves. It seems to us that under the relevant words in secs. 40 (1) (b) and 41 it is works like a hospital a public reading room or a library or an educational institution open to the public or such other works as the public may directly use that are contemplated and it is only for such works which are useful to the public in this way and can be directly used by it that land can be acquired for a company under the Act. " ( 5 ) FURTHER it was held:-"the fact that the product of the company would be useful to the public is not sufficient to bring the acquisition for a company within the meaning of the relevant words in secs. 40 and 41. " ( 6 ) IN that view of the matter even though the acquisition was sought to be made for construction of a factory for textile mill machinery parts which products were clearly useful to the public it was held by the Supreme Court that it was not a work useful to the public under section 40 (1) (b) as the public was not entitled to use the same directly and as of right. The notification under section 6 with the proceedings resulting therefrom was therefore quashed. This decision applies on all fours to the facts of the present case. In para 13 of the affidavit it is stated that the land under acquisition was required for the two divisions of the second opponent under the names of ALNISH and HOMPRO which means the manufacturing of injections of diverse kinds and home medicines respectively. This decision applies on all fours to the facts of the present case. In para 13 of the affidavit it is stated that the land under acquisition was required for the two divisions of the second opponent under the names of ALNISH and HOMPRO which means the manufacturing of injections of diverse kinds and home medicines respectively. It is also stated in para 24 of the said affidavit that the agreement in fact did show on the face of it that the work was highly useful to the public in that the land was being acquired for the construction of a factory for the manufacture of new injections medicines and other products which were of considerable use to the public in India. Further in para 28 reference is made to the fact that the company had made a provision for a Reception Room for the general public and the medical profession. Though these amenities were provided for they would not render the work such that the public can use it directly and as of right for its benefit. At best the products of the work might be said to be useful to the public but to such a work section 40 (1) (b) of the Act would not be attracted. In fact there is not a single term in the agreement which provides for such use by the public. Therefore according to the decision in the first Aroras case the notification under section 6 must be quashed and Mr. Shah did not dispute this legal position. ( 7 ) BUT Mr. Shah contended that this very question whether the proposed acquision was for a work falling under section 40 (1) (b) was in terms decided by a Division Bench of this Court consisting of K. T. Desai C. J. and Bhagwati J. on March 16 1961 in Special Civil Application No. 14 of 1961 that the question was between the same parties and on the interpretation of the terms of the very agreement dated September 3 1960 and therefore the decision operated as res judicata. But that Special Civil Application was filed by the petitioners and was decided before the final notification under sec. 6 was issued. There can be no challenge therefore in that application to the notification subsequently issued under sec. But that Special Civil Application was filed by the petitioners and was decided before the final notification under sec. 6 was issued. There can be no challenge therefore in that application to the notification subsequently issued under sec. 6 by which only the government made the firm declaration regarding the need of the land in question for the company. What was challenged in that Special Civil Application was the tentative proposal made under sec. 4 and not the firm declaration under section 6 which can be and has been only now challenged in the present petition. In that application the petitioners had prayed for quashing the notification issued under sec. 4 for an appropriate writ or direction restraining the State Government from entering into an agreement with the company under sec. 41 from giving its consent to the acquisition and from issuing a notification under sec. 6. It also appears from the said decision that a copy of the agreement which was entered into on September 3 1960 with the company was produced and the petitioners were allowed to amend their application for raising contentions as to the contents of the agreement and the inferences that could be drawn therefrom. It is also stated in that decision that the principal contention urged by Mr. Patel was that on a true construction of the relevant provisions of the Land Acquisition Act 1894 the acquisition of the aforesaid lands was not needed for the construction of some work which was likely to prove useful to the public and that the aforesaid lands were not liable to be acquired under the Act. It is also stated that the point that arose for consideration was whether the conditions laid down by sec. 40 (1) (b) had been satisfied. The conclusion arrived at by this Court was as under:-"the language of sec. 40 (1) (b) is wide enough to cover works which are capable of being physically used by the public and works which are not capable of being physically used by the public but are nonetheless useful to the public. Sec 41 (5) has been enacted in order to provide for cases where the work is likely to prove useful for the public by reason of the use thereof by the public. . Sec 41 (5) has been enacted in order to provide for cases where the work is likely to prove useful for the public by reason of the use thereof by the public. . In cases where the public cannot physically use the work and the work is none the less useful to the public provisions of this part of sec. 41 (5) do not operate. In our view the words are intended to secure in certain cases the implementation of what is contained in sec. 40 (1) (b ). They cannot be so read as to limit the meaning of the words used in sec. 40 (1) (b ). The Government is entitled to acquire lands for a company where the acquisition is needed for the construction of some work by the company and such work is likely to prove useful to the public. There is no reason why these words should be read in a narrow limited sense. A work is not necessarily useful to the public merely because it is physically used by the public. One can contemplate a number of works where it would be dangerous to the public to allow them to have any access thereto and yet the work might be extremely useful to the public. There is no reason why land should not be acquired for such useful and beneficial purpose merely because the public may not be entitled to or may not be permitted to have physical access to the work. A work may be useful be cause it produces articles which are of great use to the public. A work does not necessarily become useful to the public merely because the public have an access thereto and may use the same. In our view reading the provisions to these sections as a whole the Government in the present case was entitled to acquire the lands of the petitioners in question for the construction of the two divisions of the factory of the second respondent for the manufacture of medicines useful to the public. " ( 8 ) IT was also observed:-"mr. Patel is right when he says that the existence of such satisfaction is pre-requisite before any consent can be given or before a company can be required to enter into any agreement. In the present case. " ( 8 ) IT was also observed:-"mr. Patel is right when he says that the existence of such satisfaction is pre-requisite before any consent can be given or before a company can be required to enter into any agreement. In the present case. the appropriate Government has given its consent and has required the company to enter into an agreement and in fact an agreement has been entered into by the company with the Government. On looking to the terms of the agreement one finds that there is no clause setting out the terms on which the public would be entitled to use the work in question. " ( 9 ) FINALLY this contention was also repelled and it was held that apart from the agreement there was evidence in the affidavit of the Government that the requisite satisfaction had been derived by the Government and therefore none of objections of Mr. Patel could be sustained and the petition was therefore dismissed. In that decision the learned Chief Justice has in terms observed that there was no clause in the agreement setting out the terms on which the public would be entitled to use the work in question but it was the view of this Court at that time that if the product was useful to the public it was sufficient compliance with the section. On this view of law as it prevailed before the interpretation of section 40 (1) (b) was declared in the first Aroras case this Court had taken the view that the proposed work was likely to be useful to the public and therefore no injunction was granted restraining the Government from issuing the notification under sec. 6. This was clearly a decision on the collateral or incidental question whether the consequential relief of injunction against issuing injunction under sec. 6 and further proceeding with the acquisition should be granted or not after it was held that the notification under sec. 4 could not be challenged. The notification under sec. 6 was not and could not then be challenged as it was not even issued. 6 and further proceeding with the acquisition should be granted or not after it was held that the notification under sec. 4 could not be challenged. The notification under sec. 6 was not and could not then be challenged as it was not even issued. It is challenged for the first time in this petition as in the meantime the Supreme Court has now settled the law on this point and the declaration of law by the Supreme Court under Article 141 has binding effect not only on the parties but also on all Courts in India including this Court. Sec. 40 (1) (b) has thus come in for direct interpretation and we are bound to decide this question in accordance with the settled law. Therefore the previous decision in which this question arose only for being dealt with incidentally or collaterally cannot operate as res judicata in such a case in view of these changed circumstances. The earlier decision of this Court amounted only to its refusal to quash the notification under sec. 4 and to issue any injunction restraining the Government from issuing the notification under sec. 6 or taking further acquisition proceedings. This would only mean that the Government having not been restrained it was at liberty to issue the notification under sec. 6 or to carry on further acquisition proceedings in so far as they were in accordance with law. If in the meanwhile on account of the settled interpretation of law on this subject the Government ceased to have the power under law to issue such a notification under section 6 or to carry on further acquisition proceedings the decision of this Court which had refused to issue the injunction only at the earlier stage could not preclude the petitioner from challenging the total lack of power in the Government to issue the new notification. It is true in a sense that questions similar to the ones arising in the instant petition came to be considered but the decision arrived at in the first petition was on the question whether an injunction should be issued or not while in the present petition the question is whether the impugned notification could be issued under section 6. It is true in a sense that questions similar to the ones arising in the instant petition came to be considered but the decision arrived at in the first petition was on the question whether an injunction should be issued or not while in the present petition the question is whether the impugned notification could be issued under section 6. These two questions at two different stages could not be said to be substantially the same and the subject matter for actual decision of the Court being different there can be no bar of res judicata especially as in the earlier petition the question of interpretation of sec. 40 (1) (b) was considered only incidentally or collaterally and was not directly or substantially in issue. Mr. Shah strongly relied on the decision of the Supreme Court in Daryao v. State of M. P. A. I. R 1961 S. C. 1457 where it was held that where the petition under Article 226 is considered on the merits as a contested matter and dismissed by the High Court the decision pronounced would be binding on the parties unless modified or reversed by appeal or other appropriate proceedings under the Constitution and so if the decision was not challenged by an appropriate remedy provided by the Constitution a writ petition filed in respect of the same matter would be deemed to be barred by res judicata. Commenting on this decision the Supreme Court in the case of Amalgamated Coalfields v. Janpada Sabha AIR 1964 SC 1013 at page 1018 observed:-"therefore, there can be no doubt that the general principle of res judicata applies to writ petitions filed under Art. 32 or Art. 226. It is necessary to emphasise that the application of the doctrine of res judicata to the petitions filed under Art. 32 does not in any way impair or affect the content of the fundamental right guaranteed to the cirtizens of India. It only seeks to regulate the manner in which the said rights could be successfully asserted and vindicated in courts of law. " ( 10 ) IN that case the question which arose before the Supreme Court was in connection with the liability of a tax for a subsequent year. It only seeks to regulate the manner in which the said rights could be successfully asserted and vindicated in courts of law. " ( 10 ) IN that case the question which arose before the Supreme Court was in connection with the liability of a tax for a subsequent year. In para 18 at page 1018 the Supreme Court observed:-"where the liability of a tax for a particular year is considered and decided does the decision for that particular year operate as res judicata in respect of the liability for a subsequent year ? In a sense the liability to pay tax from year to year is a separate and distinct liability; it is based on a different cause of action from year to year and if any points of fact or law are considered in determining the liability for a given year they can generally be deemed to have been considered in a collateral and incidental way. The trend of the recent English decisions on the whole appears to be in the words of Lord Radcliff that it is more in the public interest that tax and rate assessments should not be artificially encumbered with estopples (I am not speaking of course of the effect or legal decisions establishing the law which is quite a different matter) even through in the result some expectations may be frustrated and some time wasted. (Vide Society of Medical Officer of Health v. Hope 1960 A. C. 551 at p. 563 ). The basis for this view is that generally questions of liability to pay tax are determined by Tribunals with limited jurisdiction a. . d so it would not be inappropriate to assume that itthey decide any other questions incidental to the determination of the liability for the specific period the decisions of those incidental questions need not create a bar of res judicata while similar questions of liability for subsequent years are being examined. d so it would not be inappropriate to assume that itthey decide any other questions incidental to the determination of the liability for the specific period the decisions of those incidental questions need not create a bar of res judicata while similar questions of liability for subsequent years are being examined. " ( 11 ) PROCEEDING further the Supreme Court in para 22 at page 1019 quoted observations of Lord Radcliff in Gaffoor (Trustees of the Abdul Gaffoor Trust) v. Commissioner of Income-Tax Colombo 1961 W. L. R. 794 at pages 800 and 801 where emphasis was not placed so much on the limited jurisdiction of the Tribunal and Lord Radcliff had observed:-"the critical thing is that the dispute which alone can be determined by any decision given in the course of those proceedings is limited to one subject only the amount of the assessable income for the year in which the assessment is challenged. " ( 12 ) ON these observations the Supreme Court observed :-"he, (Lord Radcliff) no doubt recognised that in the process of arriving at the necessary decision it was likely that the consideration of questions of law turning upon the construction of the Ordinance or of other statutes or upon the general law may be involved but he (Lord Radcliff) thought that the decision of those questions should be treated as collateral or incidental to what is the only issue that is truly submitted to determination. " ( 13 ) THE Supreme Court also held in para 23 at page 1019 :-"in considering this question it may be necessary to distinguish between decision on questions of law which directly and substantially arise in any dispute about the liability for a particular year and questions of law which arise incidentally or in a collateral manner as Lord Radcliff himself has observed in the case of Society of Medical Officers of Health 1960 A. C. 551 that the effect of legal decisions establishing the law would be a different matter. " ( 14 ) FINALLY at page 1320 the Supreme Court observed :-"in our opinion constructive res judicata which is a special and artificial form of res judicata enacted by sec. 11 of the Civil Procedure Code should not generally be applied to writ petitions under Art. 32 or Art. 226. " ( 14 ) FINALLY at page 1320 the Supreme Court observed :-"in our opinion constructive res judicata which is a special and artificial form of res judicata enacted by sec. 11 of the Civil Procedure Code should not generally be applied to writ petitions under Art. 32 or Art. 226. " ( 15 ) EVEN though these observations were made while deciding a taxation case they can very well be applied to a case of the present nature. We may at this stage note that the petitioners were granted a certificate to appeal to the Supreme Court but as the petitioners failed to take any step to proceed with the said appeal by making the necessary deposit the certificate was cancelled by us on February 23 1965 The earlier decision had therefore become final We however do not agree with Mr. Shah that the earlier decision at the earlier stage of the acquisition would operate as res judicata so as to preclude the petitioners from challenging the impugned notification under section 6 on the ground that it was without jurisdiction. As already stated the earlier decision decided only the question whether an injunction should be issued or not and only incidentally or collaterally dealt with the question of construction of sec. 40 (1) (b ). The notification under sec. 6 was not even issued till that case was decided and the settled interpretation of section 40 (1) (b) as given by the Supreme Court in the first Aroras case became available to the petitioners only now as a ground for attacking the present notification. If the contention of Mr. Shah were to be accepted it would mean that this Court would be deciding this matter ignoring the settled interpretation of sec. 40 (1) (b) which is binding on this Court under Art. 141 of the Constitution and this Court would also fail in its duty to protect the fundamental rights of the petitioners to enforce which the Petitioners have approached this Court under Article 226 of the Constitution. ( 16 ) IN the result the petition must be allowed and the notification under sec. 6 dated July 5 1961 issued by the State Government for acquisition of the petitioners property should be quashed. Rule made absolute to this limited extent only. The respondents will pay the costs of the petition to the petitioners Rule made absolute .