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Allahabad High Court · body

1991 DIGILAW 479 (ALL)

Ram Dhari v. State of U. P

1991-03-25

G.P.MATHUR, V.K.KHANNA

body1991
JUDGMENT G.P. Mathur, J. - Writ Petition No. 20895 of 1989, Ram Dhari v. State of U.P. and Writ Petition No. 3592 of 1990, Gorakh v. State of U.P. have been filed for quashing the same notifications issued under Sections 4 and 6 of Land Acquisition Act. Both the writ petitions have been connected and are being disposed of by a common judgment. 2. The State Government issued a notification dated August 28, 1989 under Section 4(1) of Land Acquisition Act (hereinafter referred to as the Act). The relevant portion of the notification is being quoted below for ready reference : "In exercise of the powers under sub-section (1) of Section 4 of the Land Acquisition Act, 1894 (Act No. 1 of 1894), the Governor is pleased to notify for general information that the land mentioned in the Schedule below is needed for a public purpose, namely for the modernisation and expansion of and for construction of labour and staff quarters and effluent treatment plant of the Uttar Pradesh State Sugar Corporation Unit, Pipraich in district Gorakhpur." 3. The Governor, being of the opinion that the provisions of sub-section (1) of Section 17 of the said Act are applicable to the said land inasmuch as the said land is urgently required for the modernisation and expansion of and for construction of labour and staff quarters and effluent treatment plant of the Uttar Pradesh State Sugar Corporation Unit Pipraich Sugar Mills in district Gorakhpur and that in view of the pressing urgency, it is as well necessary to eliminate the delay likely to be caused by an enquiry under Section 5-A of the said Act, the Governor is further pleased to direct under sub-section (4) of Section 17 of the said Act that the provisions of Section 5-A of the said Act shall not apply." 4. At the end of the notification, a schedule was given wherein the number of various plots which were proposed to be acquired in village Rithia, pargana Haveli, Tehsil-Sadar. District Gorakhpur was mentioned. This notification was published in U.P. Gazette of 28th August. 1989. Subsequently, the State Government issued another notification dated September 16. 1989 under Section 6 of the Act and the said notification was published in U.P. Gazette on 16th September, 1989. District Gorakhpur was mentioned. This notification was published in U.P. Gazette of 28th August. 1989. Subsequently, the State Government issued another notification dated September 16. 1989 under Section 6 of the Act and the said notification was published in U.P. Gazette on 16th September, 1989. It was mentioned in the notification that the land mentioned in the schedule was needed for a public purpose: namely for modernisation and expansion and for construction of labour staff quarters and effluent treatment plant of U.P. State Sugar Corporation, Unit Pipraich Sugar Mills in district Gorakhpur. It is for the quashing of these notifications that the present writ petitions have been filed. Writ Petition No. 20895 of 1989 was filed in this court on 9-11-1989. It was admitted on 21-12-1989 and the dispossession of the petitioners from the plots in dispute was stayed. Counter-affidavit was filed on behalf of State of U.P. and Special Land Acquisition Officer, Gorakhpur by Shri Phool Chandra Srivastava. Special Land Acquisition Officer, Unit-II and a supplementary counter-affidavit was filed by Shishir Bajpayee, Law Assistant in U.P. State Sugar Corporation Ltd., Unit Pipraich (Gorakhpur). The petitioners filed rejoinder affidavits. Subsequently. the petitioners filed an amendment application on 17-1-91 for adding certain paragraphs in writ petitions after para 39 and for adding certain grounds. This amendment application was allowed on 31-1-1991. Another supplementary counter- affidavit has been filed by Shri Raj Kumar, Joint Secretary, Cane Development and Sugar Industry, U.P. Government on 19-2-1991. 5. The learned counsel for the petitioner contended that village Rithia where the disputed plots are situate came under consolidation operations as a notification was issued by the State Government under Section 4(2) of the U. P. Consolidation of Holdings Act and old plot numbers, as mentioned in the notification issued under Section 4(1) of the Act, lost their identity on the spot on carvation and allotment of chaks. He further contended on the basis of averments made in para 17 of the writ petition that the old plots along with other plots allotted in favour of the petitioners in the form of chaks completely changed the situation inasmuch as no such plots can be said to be in existence after finalisation of proceedings under Section 20 of the U.P. Consolidation of Holdings Act. The learned counsel for the respondents submitted in reply that in case. The learned counsel for the respondents submitted in reply that in case. the plots mentioned in the notification have lost their identity on the spot and the said plots are not in existence. the petitioners cannot have any grievance as their rights would not be affected by the impugned notifications. Faced with this difficulty, Sri Tarun Verma, learned counsel for the petitioners made a statement that he did not want to press this argument regarding loss of identity of plots mentioned in the schedule annexed to the notifications under Sections 4(1) and b of the Act on account of Consolidation Operations. In view of the statement made by the learned counsel for the petitioners, we are not considering this question and are not recording any finding on the submission initially made by the learned counsel for the petitioners. 6. It was next contended that U.P. State Sugar Corporation was a company and as no agreement had been executed between the company and the State Government in accordance with Section 41 of the Act, no notification could have been issued under Section 6 of the Act on account of express bar created by Section 39. It was also urged that neither any previous enquiry as contemplated by Section 40 of the Act had been done nor any opportunity of hearing was given to the petitioners in accordance with Rule 4 of the Land Acquisition t Companies) Rules, 1963. This plea was not raised in the writ petition, but has sought to be introduced by amendment application which was moved on 17-1-1991. The learned counsel for the petitioners placed reliance upon a Supreme Court decision given in the case of State of Punjab v. Raja Ram, AIR 1981 SC 1694 and a Division Bench decision of our Court in Abdul Ghaffar v. State of U.P., AIR 1984 All 283 . wherein. it was held that the Collector should issued notice to the person whose land is sought to be acquired while holding an enquiry under Rule 4 of Land Acquisition (Companies) Rules. 19(-)3. 7. In our opinion, the submission made by the learned counsel for the petitioners is wholly misconceived. Land Acquisition Act. 1894 has undergone major amendment by the Act No. 68 of 1984. The definition of expressions "company" and "public purpose" has been completely changed by lo)84 amendments. 19(-)3. 7. In our opinion, the submission made by the learned counsel for the petitioners is wholly misconceived. Land Acquisition Act. 1894 has undergone major amendment by the Act No. 68 of 1984. The definition of expressions "company" and "public purpose" has been completely changed by lo)84 amendments. Section 3(e)(i) provides that expression "company" means a company as defined in Section 3 of the Companies Act. 1956, other than a Government Company referred to in clause (cc). Section 3(cc) provides that the expression "corporation owned or controlled by the State" means any body corporate established by under a Central. Provincial or State Act, and includes. a Government company as defined in Section 617 of the Companies Act. 1956. Section 3(f)(iv) provides the expression "public purpose" includes the provision of land for corporation owned or controlled by the State. Section 2(cl of the U.P. Sugar Undertakings (Acquisition) Act, 1971 tl'.P. Act No. 23 of 1971) provides that U.P. State Sugar Corporation is a Government company within the meaning of Section 617 of the Companies Act. It is. therefore. obvious that the U.P. State Sugar Corporation. for whom the land is sought to be acquired. is not a company as defined in Section 3(e1 of the Land Acquisition Act. It is a corporation owned or controlled by the State within the meaning of Section 3(cc) and. therefore. the provision of land for such a Corporation would be a public purpose within the meaning of expression 3(f) of the Land Acquisition Act. Therefore. by the impugned notifications land is sought to be acquired by the State Government fora public purpose and not l or a company. The provision of Chapter-Vll i.e. Sections 39 to 42 shall not apply. The impugned notifications cannot be said to he suffering from any vice on account of the fact that no agreement was executed by tile corporation with the Government. The contention raised by the petitioners has. therefore. no merit. 8. The learned counsel for the petitioners next contended that the State Government' had acted illegally in exercising powers undo r Section 17141 and in dispensing with the enquiry under Section 5-A of the Act. The learned counsel also urged that there as absolutely no material before the State Government to show that it was a case of extreme urgency wherein the provisions of Section 17) 1) of the Act may be applicable. The learned counsel also urged that there as absolutely no material before the State Government to show that it was a case of extreme urgency wherein the provisions of Section 17) 1) of the Act may be applicable. The modernisation and expansion and construction of labour and staff quarters and effluent treatment plant of a sugar mill was not such a purpose which could be described as extremely urgent where the State Government could not wait for an enquiry as contemplated by Section 5-A of the Act. 9. It is true that a direction under. 1-141 of the Act to the effect that provisions of Section 5-A shall not apply has a serious consequence upon the persons interested in the land inasmuch as they are deprived of an opportunity of Citing objections to the acquisition of their land under Section 5--a of the Act. But the decision of the State Government. that the case is one of urgency can be challenged only on limited grounds. In Raja Anand Brahma Shah v. State of U.K., AIR 1967 SC 1081 . the Supreme Court held as follows in para 8 of the report : "It is true that the opinion of the Stag Government which is a condition for the exercise of power under S. l74 1 of the Act is subjective and a Court cannot normally enquire whether there were sufficient grounds or justification of the opinion formed by the State Government under Section 1714i...... " 10. This was reiterated in a later decision by the Supreme Court in Narain Govind Gavate v. State of Maharashtra, AIR 1977 SC 183 and in para It), it was as follows : It is true that. in such cases the formation of opinion is a subjective matter. as held by this Court repeatedly with regard to the situations in which administrative authorities have formed certain opinions before taking actions, they are empowered to take .............. Nevertheless, that opinion has to be based on some relevant materials in order to pass test which Courts do impose .........................once. the Court comes to the conclusion that the authority concerned was acting within the scope of its powers and had some material, whatever meagre, on which it could reasonably base its opinion, the courts should not and will not interfere ............... 11. the Court comes to the conclusion that the authority concerned was acting within the scope of its powers and had some material, whatever meagre, on which it could reasonably base its opinion, the courts should not and will not interfere ............... 11. It is, therefore, well settled that the question of urgency is a matter for subjective satisfaction of the appropriate Government and it is not open to the Courts to examine the propriety or correctness of the satisfaction on an objective consideration of facts. The opinion of the Government can be challenged in a Court of law only if it can be shown that the Government never applied its mind to the matter or that the action of the Government is mala fide. 12. The learned counsel for the petitioners strenuously contended that the mind of the authority concerned has to be applied to the question whether there is urgency of such a nature that even the summary proceedings under Section 5-A of the Act should be eliminated and it is not just the existence of urgency, but the need to dispense with the enquiry under Section 5-A which has to be considered. The learned counsel placed reliance on the observations of Supreme Court in paras 37 and 38 of Narain Govind Gavate v. State of Maharashtra, AIR 1977 SC 183 , and also upon the decision of this Court in A.P. Sarin v. State of U.P., 1983 All LJ 1016; Vinod Kumar v. State of U.P., 1990 SCD 706 and Raj Kishore v. State of U.P., 1990 SCD 702 . 13. The observations made by the Hon'ble Supreme Court in paras 37 and 38 of the report in Narain's case, AIR 1977 SC 183 (supra) have been explained by two Division Benches of our High Court in Smt. Kailash Wati v. State of U.P., AIR 1978 All 181 and M/s. Technical Associates v. State of U.P., 1984 All LJ 1093. In Narain's case (supra), neither in the counter-affidavit filed on behalf of acquiring body nor in the notifications issued, there was any material showing that the State Government had applied its mind to the question that there existed urgency which warranted elimination of enquiry contemplated by Section 5-A of the Act. On the contrary, the Government took their stand on the plea of non-justiciability of the satisfaction of the Government. On the contrary, the Government took their stand on the plea of non-justiciability of the satisfaction of the Government. It was also explained that the observation made by the Hon'ble Supreme Court was only illustrative and not exhaustive of the situation in which the urgency clause could be invoked. 14. There are several decisions of our Court, where after noticing the law laid down by the Hon'ble Supreme Court in Narain's case (supra), it was held that the question of urgency is a matter for the subjective satisfaction of the Government and it is not open to the Courts to examine the propriety and the correctness of the satisfaction on objective appraisal of facts. The opinion can be challenged in a Court of law only if it can be shown that the Government never applied its mind to the matter or its action was mala fide. Reference in this connection may be made to Raj Bali v. State of U.P., AIR 1983 All 78 ; Trilochan v. State, 1985 All LJ 718; Mohd. Hanif v. State, 1985 All LJ 1405; Gayatri Nagar Sahkari Avas Samiti Ltd. v. State, 1985 All LJ 1182; Kunwar Lal v. State, 1989 All LJ 570 and Satbir Singh v. State, AIR 1988 All 177 . 15. In Writ Petn. No. 16690 of 1990, Ram Narain Rai v. State of U.P., decided on 22-10-1990 by a Bench consisting of Hon'ble N. N. Mithal, J. and Hon'ble G.P. Mathur, J., the distinguishing feature of Narain's case, AIR 1977 SC 183 and A.P. Sarin's case, 1983 All LJ 1016 (supra) have been explained in detail and it was held that the question of urgency was a matter of subjective satisfaction of the Government. The opinion of the Government can be challenged only if it was found that the Government had never applied its mind to the matter or if its action was mala fide. 16. In the present writ petition, no allegation of mala fide has been made against the respondents. Learned counsel for the petitioner has not raised any such contention that the acquisition of the petitioners' land was mala fide. 17. We have now to consider whether there was sufficient material before the State Government on the basis of which it could form an opinion to make a direction under sub-section (4) of Section 17 of the Act. Learned counsel for the petitioner has not raised any such contention that the acquisition of the petitioners' land was mala fide. 17. We have now to consider whether there was sufficient material before the State Government on the basis of which it could form an opinion to make a direction under sub-section (4) of Section 17 of the Act. The learned Standing Counsel has produced before us, the original record of the State Government and also of the U.P. State Sugar Corporation Ltd., at the time of hearing and a supplementary counter-affidavit sworn by Shri Raj Kumar, IAS, Joint Secretary, Cane Development and Sugar Industry, U.P. Government, was also filed. The material filed along with the supplementary counter-affidavit shows that Pipraich Sugar Mill was 65 years old and had crushing capacity of about 800 TCD. Since the machinery of the mill had become very old, it was not possible to run the sugar mill. The sugar mill was situate in cane growing area and there were no crushers in the neighbourhood. The sugar mill, on account of low crushing capacity of 813 TCD, was not in a position to utilise and consume the sugar cane produced in the area and thus the cane growers were suffering huge loss. Accordingly, the Central Government was approached for grant of industrial licence for expansion and modernisation of the sugar mills. The Central Government issued a letter of intent on 29-8-1988 intimating the U.P. State Sugar Cane Corporation that the Government was prepared to issue industrial licence under the Industries (Development and Regulations) Act, 1951 for expansion of Pipraich Sugar Mills so as to attain the crushing capacity of 2500 tonnes, a copy of which has been filed as Annexure-SCA-III. The condition No. 5 of the Intent Letter was that it was valid for three years from the date of its issue. Annexure-SCA-IV to the supplementary counter-affidavit is the copy of the communication dated 26-12-1988 sent by the Ministry of Food & Civil Supplies, Government of India to all the sugar factories regarding incentive capital scheme for new sugar factories and expansion projects. Annexure-SCA-IV to the supplementary counter-affidavit is the copy of the communication dated 26-12-1988 sent by the Ministry of Food & Civil Supplies, Government of India to all the sugar factories regarding incentive capital scheme for new sugar factories and expansion projects. It is mentioned in this communication that the Central Government had taken a decision fixing minimum economic capacity of a sugar factory at 2500 tonnes of cane crushing per day and expansion project shall mean a project for expansion of existing sugar factory, having a capacity below 2500 TCD, for increase in its capacity to a minimum of 2500 TCD, in accordance with Letter of Intent issued by the Government of India. In para 6.1, it is mentioned that in order to become eligible to incentives under this scheme, the date of commencement of first production at the expanded capacity in respect of expansion projects shall be within a period of 24 months from the date Letter of Intent was issued by the Central Financial Institution granting loans to the sugar factories. The factories that failed to commence production within the stipulated period shall not be eligible for any incentive. Para 6.2 of the communication mentions that where a factory cannot commence production within the prescribed limit of 24 months on account of reasons such as delays in receipt of finance, beyond the control of sugar factory, an extension of time limit up to a maximum of 12 months may be granted by the Government of India based on the merits of each case. SCA-VII is a copy of letter dated 2-3-89 sent by the Industrial Finance Corporation of India to the Managing Director of U.P. State Sugar Corporation informing that it has no objection for placement of orders for plant and machinery in respect of Pipraich Unit. SCA - V in a note of General Manager (P) dated 22-4-89, and also of Joint Secretary, Cane Development and Sugar Industry, U.P. Government dated 25-4-89 and the note dated 30-4-1989 of the Managing Director of U.P. State Sugar Corporation which mentions that agreement for supply erection and commissioning of plant and machinery for undertaking modem station-cum-expansion of Unit-Pipraich has already been executed with M/s. ATV Projects India Limited on 28-2-89 and, therefore. immediate steps were required to be taken to expedite the acquisition of land, failing which machinery suppliers were likely to rush for release of second instalment of advance without fulfilling any obligations and other conditions for want of a suitable site for the project. Annexure-SCA-VIII is the copy of the letter dated 19-6-1989 sent by the Chairman, U.P. State Sugar Corporation Ltd. to the Collector, Gorakhpur informing him that for expansion and modernisation of Pipraich Sugar Mill from 800 to 2500 TCD, Government of India had granted a Letter of Intent on 29-8-88 and the Industrial Finance Corporation of India had also granted no objection certificate for placement of order for plant and machinery. Accordingly, agreement had been executed for construction of civil works and for supply and installation of the machinery. A sum of Rs. 29,75,973-00 had been deposited by the General Manager of the Unit with the Special Land Acquisition Officer. The State Government was also pressing for immediate execution of the expansion project in public interest. It was requested that necessary steps for acquisition of land may be taken immediately and necessary formalities may be completed. Annexure-SCA-1, is the copy of letter sent by the Collector, Gorakhpur to the Joint Secretary, Industries Department, U.P. Government informing him that there was immediate necessity of expansion of Pipraich Sugar Mills and for the said purpose. the land may be acquired by invoking the provisions of Section 17 of the Act. It is stated in para 12 of the supplementary counter - affidavit that on receipt of report of the Collector, Gorakhpur and after taking opinion of the law department and with the concurrence of the Chief Minister, the matter was examined in detail by the Industry Department of U.P. Government. After examining the entire material referred to above, a decision was taken that the land should be acquired without any delay and necessary directions may be issued under sub-section (4) of Section 17 of the Act. It is also averred that existing quarters for the workers were very few and were in a dilapidated condition and, therefore, it was necessary to construct residential accommodation for industrial workers. It was also necessary to install effluent treatment plant for controlling pollution. After considering the entire material, notifications under Sections 411) and 6 of the Land Acquisition Act were issued by the State Government. 18. It was also necessary to install effluent treatment plant for controlling pollution. After considering the entire material, notifications under Sections 411) and 6 of the Land Acquisition Act were issued by the State Government. 18. Supplementary counter-affidavit as well as records of the case show that the l Letter of Intent issued by the Government of India on 29-8-88 was valid for three years i.e. up to 29-8-91 and in order to become eligible under Incentive Scheme. it was necessary that the date of first production of expanded] capacity in respect of expansion project should be within a period of 24 months from the date of issue of Letter of Intent by the Central Financial Institution. The record also shows that agreement for supply of machinery and erection and commissioning of plant had already been executed on 28-2-89. The record further shows that machinery of sugar mills was 65 years' old and it was not possible to run the sugar mill with the same. The crushing capacity was only 813 TCD while as the production of sugar-cane in the area was much l more and there was no crusher due to which cane gravers were suffering heavy loss. The' sugarcane is considered cash crop by farmers. Gorakhpur is a sugar-cane producing area. The constructions of efficient high capacity sugar mill will benefit both the farmers as well as workers employed therein. It is, therefore, clear that there was sufficient material before the State Government on the basis of which, it could come to a conclusion that the case was one of urgency and direction should be made under sub-section 14) of Section 17 of the Act. 19. In our opinion, there is no merit in the submissions made by the learned counsel for the petitioners. Both the writ petitions are accordingly dismissed and the interim orders staving the dispossession of the petitioners are vacated. There will he no order as to costs.