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Allahabad High Court · body

2016 DIGILAW 3618 (ALL)

GYAN CHAND v. STATE OF U. P.

2016-11-04

ARUN TANDON, NAHEED ARA MOONIS

body2016
JUDGMENT By the Court.—This bunch of writ petitions has been filed by approximately 800 petitioners claiming to be the recorded tenure holders of land situated in village Bathuakhera, Pargana and Tehsil Moradabad, district Moradabad. The land of the petitioners was subject-matter of acquisition proceeding initiated by issuance of notification under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as the “Act, 1894”) dated 26.9.1989. This notification under Section 4 was followed by a notification under Section 6 of the same Act, 1894 dated 6.1.1990. Under the notifications, Section 17 (4) had been invoked and Section 5 was done away with. It is not in dispute that the tenure holders, whose land had been so acquired, had been paid compensation after making of the award on 30.3.1991 and that in some cases even additional compensation has been paid and accepted. It is also submitted before us that the enhancement of compensation is being contested by respondent No. 5 by way of appeal, which is pending before this Court. 2. The farmers have come up before this Court with the allegations that the entire acquisition proceedings suffer from wrongful exercise of powers conferred under the Act, 1894 by the State Government. It is their case that the purpose of acquisition was in fact different from the one, which had been stated in the notification under Section 4 and Section 6 of the Act, 1894 and, therefore, the acquisition proceedings are void abinitio. In support of the plea so raised on behalf of the petitioners Sri Shashi Nandan, learned Senior Counsel assisted by Sri Shiv Sagar Singh, Advocate took the Court to the recitals contained in the notification under Section 4 of the Act, 1894, which reads as follows; “In continuation of Government notification No. 2919/XVIII-10 (P.P.)-89 dated September 26, 1989 issued under sub-section (1) of Section 4 and sub-section (4) of Section 17 of the Land Acquisition Act, 1894 (Act No. 1 of 1894) and lastly published through public notice affixed dated December 15, 1989. The Governor is pleased to declare under Section 6 of the said Act that he is satisfied that the land mentioned in the Schedule below is needed for public purpose namely establishment of a News Print Paper Project for the planned industrial development in district Moradabad through News Print and Paper Mills Ltd. (NEPA), New Delhi and under Section 7 of the said Act to direct the Collector of Moradabad to take order for the acquisition of the said land.” 3. He also referred to the concluding part of the notification, which reads as follows; “For what purpose required—For the establishment of News Print Paper Project by the National News Print and Paper Mills Ltd., New Delhi for the planned Development in district Moradabad.” 4. It is admitted to the parties before us that M/s. NEPTA Ltd. is a Government Company duly registered in Madhya Pradesh. Sri Shashi Nandan would therefore submit that from a simple reading of the notification it would be clear that the purpose of the acquisition was for establishment of News Printing Paper Project through a Government Company. 5. It is stated that from the counter-affidavit filed on behalf of the said Government Company M/s. NEPTA Ltd. it is admitted that the possession of the land subject-matter of acquisition was taken on various dates, namely, 11.4.1990, 30.4.1990, 7.9.1990, 29.7.1991, 9.3.1993 and 31.10.1994 respectively. Similar recitals have been made in paragraph 3 (V) of the counter-affidavit filed on behalf of the said Company. It is further apparent from the tripartite agreement dated 11.4.1996 that even an indenture of transfer or terms was not executed by the State Government in favour of M/s. NEPTA Ltd. for the acquired land till 11.4.1996. The records further reflects that on the directions of the Central Government, a decision was taken by M/s. NEPTA Ltd. to discontinue the project in public sector and to invite private entrepreneurs to take over the project for its further implementation on going basis. Such decision must have been taken by the Central Government prior to 22.2.1994. In as much as on the said date i.e. 22.2.1994 M/s. NEPTA Ltd. had published a notice inviting bids for transfer of the project. 6. It is with reference to this invitation of bids that the respondent No. 5 M/s. Century Textile & Industry Limited, which is a private limited company is said to have offered a bid of Rs. In as much as on the said date i.e. 22.2.1994 M/s. NEPTA Ltd. had published a notice inviting bids for transfer of the project. 6. It is with reference to this invitation of bids that the respondent No. 5 M/s. Century Textile & Industry Limited, which is a private limited company is said to have offered a bid of Rs. 21 crores for the same land. The same was found to be adequate by respondent No. 4 M/s NEPTA Ltd., a sale-deed was executed on 17.2.1996, a copy whereof has been annexed at page 96 to the writ petition. It is further contended before us that at no point of time respondent No. 4 was ever interested in establishing any project as was disclosed in the acquisition notification, which fact is established from the admission qua the possession of the land having been taken upto the month of September 1994 when an invitation to offer bids for transfer of the said project itself was published in February 1994. 7. Sri Shashi Nandan, learned Senior Advocate contended that following the judgment of the Apex Court in Royal Orchid Hotels Limited and another v. G. Jayarama Reddy and others, (2011) 10 SCC 608 , the acquisition in question has to be held to be a colourable exercise of powers by the authority and, therefore, void. It is stated that the basic intention of the authorities was to give benefit to a private company in the matter of establishment of paper industry while exercising the powers under the Act, 1894 camouflaged to be one for a Government company. 8. Acquisition of land for private company is regulated by Chapter VII of Act, 1894, at the relevant time and the procedure to be followed therein is entirely different viz-a-viz which is provided for acquiring for public purpose including Government undertaking. 9. Sri M.D. Singh ‘Shekhar’, learned Senior Counsel for the respondent No. 5 in reply submitted before us that the writ petition has been filed after 20 years of the acquisition notification and after 18 years of the award and receipt of compensation by the petitioners. The writ petition, therefore, deserves to be dismissed on the ground of laches. 9. Sri M.D. Singh ‘Shekhar’, learned Senior Counsel for the respondent No. 5 in reply submitted before us that the writ petition has been filed after 20 years of the acquisition notification and after 18 years of the award and receipt of compensation by the petitioners. The writ petition, therefore, deserves to be dismissed on the ground of laches. He has relied upon the Division Bench Judgment of this Court in Lahri Singh v. State of U.P. and others passed in Writ-C No. 2104 of 2006 and connected writ petitions decided on 23.5.2016, wherein reference has been made to the various judgments of the Apex Court, which have been noticed in paragraphs 11 to 18 of the said judgment. He then contended that the respondent No. 5 has responded to the notice inviting bids, which was published by the respondent No. 4 and has made the payment of the amount for transfer as noticed in the sale-deed. The company has also paid additional compensation to the farmers and is contesting the proceedings in regard before the High Court. He submits that this Court may not interfere with the acquisition at the stage of the proceeding. 10. On behalf of the respondent No. 4 it is stated that land was acquired for establishment of paper project by respondent No. 4 company but because of the directions of the Central Government to do away with the project a decision has been taken to transfer the project as a whole alongwith land to the private company, namely, respondent No. 5 M/s Century Textile & Industry Ltd. 11. Learned Standing counsel for the State-respondents takes a similar stand and submits that once compensation has been paid the petitioners have no locus to challenge the acquisition or transfer affected thereafter. 12. We have considered the submissions made by the learned counsel for the parties and have gone through the records of the present writ petition. 13. The purpose for which the land of the farmers was proposed to be acquired had specifically been mentioned in the notifications issued under the Act, 1894. The relevant extract of the notification issued under Section 6 of the Act,1894 has already been quoted herein above. 14. 13. The purpose for which the land of the farmers was proposed to be acquired had specifically been mentioned in the notifications issued under the Act, 1894. The relevant extract of the notification issued under Section 6 of the Act,1894 has already been quoted herein above. 14. From simple reading of the said notification, it would be seen that the land was proposed to be acquired for a Government Company, namely, M/s NEPTA Ltd. for establishment of a “News Print Paper Project” by the National News Print and Paper Mills Ltd., New Delhi. It is, therefore, writ large on record that the procedure as applicable in the matter of acquisition of land for public purpose was adopted. But even before the actual possession of the entire land holding i.e. 800.114 acres of land subject-matter of acquisitions could be taken by the State Government and before any indenture of transfer could be executed by the State of Uttar Pradesh after such acquisition in favour of M/s. NEPTA Ltd., a decision was taken by the Central Government requiring the M/s. NEPTA Ltd. to discontinue the project and to transfer the same to a private company. The relevant facts in that regard are contained in paragraph 3 (v) and (vi) of the counter-affidavit filed on behalf of respondent No. 4 as also in the deed of conveyance executed on 17th February, 1996 and tri partite agreement/indenture executed on 11th April, 1996 as detailed herein above. 15. We can, therefore, safely draw a conclusion that at no point of time, M/s. NEPTA Ltd. ever planned to set up any industry i.e. News Print Paper Project over the acquired land. Desire in that regard was a mere paper formality resulting in acquisition proceedings. 16. We have been informed in open Court proceedings today by the learned counsel for the parties that except for planting trees, M/s. NEPTA Ltd. in fact carried on absolutely no development activity over the acquired land, not even a single machine, which could be used for the project was ever purchased or installed over the acquired land. It has been stated that no money was paid by M/s. NEPTA Ltd. towards compensation (which fact is not so stated in the pleadings). The procedure for acquisition of land for private companies is regulated under Chapter VII of the Act, 1894, a complete different procedure is prescribed. 17. It has been stated that no money was paid by M/s. NEPTA Ltd. towards compensation (which fact is not so stated in the pleadings). The procedure for acquisition of land for private companies is regulated under Chapter VII of the Act, 1894, a complete different procedure is prescribed. 17. What has happened in the facts of the case is that the State Government while exercising powers under the Act, 1894 for acquiring the land of the farmers for public purpose in fact has created a situation whereby public company has been authorized to dispose of the land alongwith project in favour of a private company and thereby evading the compliance of the provisions of Chapter-VII of the Act, 1894. 18. Facts in hand are more or less akin to the facts, which were subject-matter of consideration before the Apex Court in the case of Royal Orchid Hotels Ltd. (Supra). 19. We may reproduce the relevant paragraphs of the judgment in the case of Royal Orchid Hotels Ltd. (Supra), wherein like nature of exercise undertaken by the State Government was held to be void and abuse of powers vested in the authorities under the Act, 1894. Relevant paragraphs of the said judgment are being quoted herein below: “24. The first question which needs consideration is whether the High Court committed an error by granting relief to respondent No. 1 despite the fact that he filed writ petition after long lapse of time and the explanation given by him was found unsatisfactory by the learned Single Judge, who decided the writ petition after remand by the Division Bench. 25. Although, framers of the Constitution have not prescribed any period of limitation for filing a petition under Article 226 of the Constitution of India and the power conferred upon the High Court to issue to any person or authority including any Government, directions, orders or writs including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari is not hedged with any condition or constraint, in last 61 years the superior Courts have evolved several rules of self-imposed restraint including the one that the High Court may not enquire into belated or stale claim and deny relief to the petitioner if he is found guilty of laches. The principle underlying this rule is that the one who is not vigilant and does not seek intervention of the Court within reasonable time from the date of accrual of cause of action or alleged violation of constitutional, legal or other right is not entitled to relief under Article 226 of the Constitution. Another reason for the High Court’s refusal to entertain belated claim is that during the intervening period rights of third parties may have crystallized and it will be inequitable to disturb those rights at the instance of a person who has approached the Court after long lapse of time and there is no cogent explanation for the delay. We may hasten to add that no hard and fast rule can be laid down and no straightjacket formula can be evolved for deciding the question of delay/laches and each case has to be decided on its own facts. 26. In Dehri Rohtas Light Railway Company Limited v. District Board, Bhojpur, (1992) 2 SCC 598 , this Court set aside the judgment of the Patna High Court whereby the writ petition filed by the appellant against the demand notice issued for levy of cess for the period 1953-54 to 1966-67 was dismissed only on the ground of delay. The facts of that case show that the writ petition filed by the appellant questioning the demand for 1967-68 to 1971-72 was allowed by the High Court. However, the writ petition questioning the demand of the earlier years was dismissed on the premise that the petitioner was guilty of laches. 27. While dealing with the question of delay, this Court observed (Dehri Rohtas case, SCC pp. 602-03, paras 12-13): “12.The question thus for consideration is whether the appellant should be deprived of the relief on account of the laches and delay. It is true that the appellant could have even when instituting the suit agitated the question of legality of the demands and claimed relief in respect of the earlier years while challenging the demand for the subsequent years in the writ petition. But the failure to do so by itself in the circumstances of the case, in our opinion, does not disentitle the appellant from the remedies open under the law. The demand is per se not based on the net profits of the immovable property, but on the income of the business and is, therefore, without authority. But the failure to do so by itself in the circumstances of the case, in our opinion, does not disentitle the appellant from the remedies open under the law. The demand is per se not based on the net profits of the immovable property, but on the income of the business and is, therefore, without authority. The appellant has offered explanation for not raising the question of legality in the earlier proceedings. It appears that the authorities proceeded under a mistake of law as to the nature of the claim. The appellant did not include the earlier demand in the writ petition because the suit to enforce the agreement limiting the liability was pending in appeal, but the appellant did attempt to raise the question in the appeal itself. However, the Court declined to entertain the additional ground as it was beyond the scope of the suit. Thereafter, the present writ petition was filed explaining all the circumstances. The High Court considered the delay as inordinate. In our view, the High Court failed to appreciate all material facts particularly the fact that the demand is illegal as already declared by it in the earlier case. 13. The rule which says that the Court may not enquire into belated and stale claim is not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how delay arose. The principle on which the relief to the party on the grounds of laches or delay is denied is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in such cases is that the petitioner should come to the writ Court before a parallel right is created and that the lapse of time is not attributable to any laches or negligence. The test is not to physical running of time. Where the circumstances justifying the conduct exists, the illegality which is manifest cannot be sustained on the sole ground of laches. The decision in Tilokchand case relied on is distinguishable on the facts of the present case. The test is not to physical running of time. Where the circumstances justifying the conduct exists, the illegality which is manifest cannot be sustained on the sole ground of laches. The decision in Tilokchand case relied on is distinguishable on the facts of the present case. The levy if based on the net profits of the railway undertaking was beyond the authority and the illegal nature of the same has been questioned though belatedly in the pending proceedings after the pronouncement of the High Court in the matter relating to the subsequent years. That being the case, the claim of the appellant cannot be turned down on the sole ground of delay. We are of the opinion that the High Court was wrong in dismissing the writ petition in limine and refusing to grant the relief sought for.” (emphasis supplied) 28. In Ramchandra Shankar Deodhar v. State of aharashtra, (1974) 1 SCC 317 , the Court overruled the objection of delay in filing of a petition involving challenge to the seniority list of Mamlatdars and observed: “10. .......Moreover, it may be noticed that the claim for enforcement of the fundamental right of equal opportunity under Art. 16 is itself a fundamental right guaranteed under Art. 32 and this Court which has been assigned the role of a sentinel on the qui vive for protection of the fundamental rights cannot easily allow itself to be persuaded to refuse relief solely on the jejune ground of laches, delay or the like.” 20. In Shankara Cooperative Housing Society Limited v. M. Prabhakar and others, (2011) 5 SCC 607 , this Court considered the question whether the High Court should entertain petition filed under Article 226 of the Constitution after long delay and laid down the following principles: “(1) There is no inviolable rule of law that whenever there is a delay, the Court must necessarily refuse to entertain the petition; it is a rule of practice based on sound and proper exercise of discretion, and each case must be dealt with on its own facts. (2) The principle on which the Court refuses relief on the ground of laches or delay is that the rights accrued to others by the delay in filing the petition should not be disturbed, unless there is a reasonable explanation for the delay, because Court should not harm innocent parties if their rights had emerged by the delay on the part of the petitioners. (3) The satisfactory way of explaining delay in making an application under Article 226 is for the petitioner to show that he had been seeking relief elsewhere in a manner provided by law. If he runs after a remedy not provided in the statute or the statutory rules, it is not desirable for the High Court to condone the delay. It is immaterial what the petitioner chooses to believe in regard to the remedy. (4) No hard-and-fast rule, can be laid down in this regard. Every case shall have to be decided on its own facts. (5) That representations would not be adequate explanation to take care of the delay.” .................. 37. The pleadings and documents filed by the parties in these cases clearly show that the Corporation had made a false projection to the State Government that land was needed for execution of tourism related projects. In the meeting of officers held on 13.1.1987, i.e. after almost four years of the issue of declaration under Section 6, the Managing Director of the Corporation candidly admitted that the Corporation did not have the requisite finances to pay for the acquisition of land and that Dayananda Pai, who had already entered into agreements with some of the landowners for purchase of land, was prepared to rovide funds subject to certain conditions including transfer of 12 acres 34 guntas land to him for house building project. After 8 months, the Corporation passed resolution for transfer of over 12 acres land to Dayananda Pai. The Corporation also transferred two other parcels of land in favour of Bangalore International Centre and M/s. Universal Resorts Limited. These transactions reveal the true design of the officers of the Corporation, who first succeeded in persuading the State Government to acquire huge chunk of land for a public purpose and then transferred major portion of the acquired land to private individual and corporate entities by citing poor financial health of the Corporation as the cause for doing so. 38. These transactions reveal the true design of the officers of the Corporation, who first succeeded in persuading the State Government to acquire huge chunk of land for a public purpose and then transferred major portion of the acquired land to private individual and corporate entities by citing poor financial health of the Corporation as the cause for doing so. 38. The Courts have repeatedly held that in exercise of its power of eminent domain, the State can compulsorily acquire land of the private persons but this proposition cannot be over-stretched to legitimize a patently illegal and fraudulent exercise undertaken for depriving the landowners of their constitutional right to property with a view to favour private persons. It needs no emphasis that if land is to be acquired for a company, the State Government and the company is bound to comply with the mandate of the provisions contained in Part VII of the Act. Therefore, the Corporation did not have the jurisdiction to transfer the land acquired for a public purpose to the companies and thereby allow them to bypass the provisions of Part VII. The diversification of the purpose for which land was acquired under Section 4(1) read with Section 6 clearly amounted to a fraud onthe power of eminent domain. This is precisely what the High Court has held in the judgment under appeal and we do not find any valid ground to interfere with the same more so because in Annaiah v. State of Karnataka the High Court had quashed the notifications issued under Sections 4(1) and 6 in their entirety and that judgment has become final.” 20. In the same judgment the Apex Court has examined the issue of delay for approaching the Writ Court in the case before the Apex Court, writ petition was filed after more than 12 years of the acquisition proceedings and the Apex Court found it just and equitable to hold that delay was not fatal so as to deny equitable remedy under Article 226 of the Constitution of India in the facts of that case. 21. 21. It is no doubt true that laches is one of the ground on which the Writ Court may refuse to entertain the writ petition as has been decided under various judgments of the Apex Court, taken note of by the Division Bench of this Court in the case of Lahiri Singh (Supra) but at the same time it is also well-settled that non-entertainment of writ petition on the ground of laches is a self imposed restriction by the Writ Court and each case has to be judged on its own merit. 22. In the facts of the case, when we find that while poor farmers had only been paid nearly 3 crores in all for the 800.114 acres of land, which had been acquired. The Government Company M/s. NEPTA Ltd. has disposed of the same land by a deed of conveyance for a sum of Rs. 22 crores approximately. Are the Government Companies to be provided land after acquisition only for the purposes of further transfer so that they may earn money by such transfer of property is a serious concern for the Court. 23. In our opinion, the purpose of acquisition of the land of poor farmers can only be for public purpose as defined under the Act, 1894 except where acquisition is under Chapter VII of the Act, 1894. In social welfare of a Country like India, no privilege is to be given to a Government Company to become a trader of the acquired land. Acquisition of land in the garb of public purpose in the facts of the case and thereafter permitting the transfer of the acquired land in favour of private company vitiates the entire acquisition proceedings by the State Government. 24. We have no hesitation to hold that acquisition in the facts of the case is a colourable exercise of powers by the State Government and is held to be void abnitio. Notifications under Sections 4 and 6 of the Act, 1894 are, therefore, liable to be declared as in-operative. 25. In the facts of the case, we feel that interest of justice demands that we reject the contention of the respondents that these writ petitions be dismissed on the ground of laches, for protecting the interest of poor farmers whose land was illegally acquired by colourable exercise of powers by the State Government. 26. 25. In the facts of the case, we feel that interest of justice demands that we reject the contention of the respondents that these writ petitions be dismissed on the ground of laches, for protecting the interest of poor farmers whose land was illegally acquired by colourable exercise of powers by the State Government. 26. However we are also conscious of the fact that in the meantime, respondent No. 5, M/s Century Textile & Industry Ltd. which had responded to the invitation of bid must have invested money for setting up of an industry and that the petitioners have been paid compensation by the State Government qua the land acquired. 27. We are also of the opinion that restoration of possession to the farmers of the acquired land under the notifications can be avoided, if the amount received by the Government Company M/s. NEPTA Ltd. as sale consideration i.e. Rs. 22 crores approximately is directed to be received back by the State Government from M/s NEPTA Ltd. and the State Government is directed to distribute the same (Rs. 22 crores approximately) among the farmers in their respective shares with reference to the award made. 28. We, therefore, allow these bunch of writ petitions by holding that the notifications issued under Sections 4 and 6 of the Act, 1894 are held to be invalid and inoperative in the eyes of law, but the relief of restoration of possession of the land to the farmers can be avoided by the State Government by receiving back the sale consideration, which has been obtained by the Government Company, M/s NEPTA Ltd., from the said company i.e. Rs. 22 crores approximately and to distribute the same among the farmers proportionately as per the award made. 29. The entire exercise may be completed within two months from the date a certified copy of this order is filed before respondent No. 2. In case the State Government fails to do so within the period so permitted herein above, the petitioners would be entitled for restoration of the possession of their land holdings in terms of prayer No. 2. 29. All these writ petitions are allowed subject to the observations made above.