20 February 1985
Supreme Court
Download

FOMENTO RESORTS AND HOTELS LTD Vs GUSTAVO RANATO DA CRUZ PINTO & ORS.

Case number: Appeal (civil) 504 of 1985


1

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 10  

PETITIONER: FOMENTO RESORTS AND HOTELS LTD

       Vs.

RESPONDENT: GUSTAVO RANATO DA CRUZ PINTO & ORS.

DATE OF JUDGMENT20/02/1985

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) REDDY, O. CHINNAPPA (J) VENKATARAMIAH, E.S. (J)

CITATION:  1985 AIR  736            1985 SCR  (2) 937  1985 SCC  (2) 152        1985 SCALE  (1)394

ACT:       Land  Acquisition  (Companies)  Rules,  1963  Rule  4- Whether compliance of Rule 4 is mandatory before issuing the Notification under  Section 4  of the  Land Acquisition Act, 1894 in  respect of acquisition of land for the propose of a company-Practice  and  Procedure-Where  several  contentions factual and  legal are  urged in a case and where there is a scope of  an appeal  From the  decision of  the Court,  High Courts and  Courts below should not merely rest its decision on one single point.

HEADNOTE:        The   appellant  made  an  application  on  the  15th November, 1978  under chapter  VII of  the Land  Acquisition Act, 1894 for the acquisition of the lands earlier purchased by Respondent  No. 1  herein. The  Government issued  on the 29th October,  1980 a  notification for  acquisition of  the said land  under section 4 of the Act which was published in the Government  Gazette dated 30th October, 1980. Respondent No. 1  objected to  the said  notification. Subsequently the Government bled  an enquiry under section SA of the Act and, after submitting  a report  in March  1981, on or about 10th April 1981, the Deputy Collector issued notice to Respondent No. I  that enquiry  under rule  4 of  the Land  Acquisition (Companies) Rules 1963 would be held on the 15th April, 1981 to which  the latter  filed his  objections on  merit by his letter dated 4th May, 1981. On 26th October, 1983, agreement was  executed  between  the  government  and  the  acquiring company. A  notification under  section 6  that the  land in question was  needed  for  the  purpose  of  development  of tourism, was  published in the Government Gazette dated 27th October 1983.       Respondent  No. 1,  thereupon, filed  a petition under Article  226   of  the  Constitution  challenging  the  said notifications under sections 4 and 6 of the Land Acquisition Act. The  High Court  of Bombay (Goa Bench) quashed the said notifications  on   the  first   ground  alone  namely,  the notifications were  bad for prior non-compliance with Rule 4 of the  Land Acquisition  (Companies) Rules  1963, and noted that it  was not  necessary to  deal with  other grounds  of challenge. Hence the appeal by special leave-

2

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 10  

938       Allowing  the appeal  and remitting the case back, the Court ^       HELD:  1. ON a correct interpretation of the scheme of the Land  Acquisition Act,  it is not necessary that enquiry under rule 4 of the Land Acquisition (Companies) Rules, 1963 must in all cases precede issuance of the notification under section 4 of the Act. In an appropriate cash if it is  possible,  enquiry under  rule 4(1)  may be held before the issuance of  the notification under section 4. But it is not a mandatory requirement that it must precede the issuance of the notification under the Act. [949B-C]       RAJA  Ram Jaiswal  v. Collector,  Allahabad & Another, (1980) 2 ILR Allahabad 269; conclusion approved.              Babu  Barkya Thakur  v. State  of  Bombay  (now Maharashtra), AIR 1960 SC 1203 at 1206, followed.            Abdul Husein Tayabali & Ors. v. State of Gujrat l Ors., [1968] I SCR 597. explained and distinguished.             2.1. A consepectus of the provisions of the Land Acquisition Act  as well  as  Land  Acquisition  (Companies) Rules  1963   indicate  that   there  are  two  purposes  of acquisition of  land-one being  for the  public purpose  and other for  the purpose  of a company, In case of acquisition for company,  the  appropriate  Government  has  to  satisfy itself that  such acquisition  is needed and would be useful also for public need. [943E-F]        2.2  Land  Acquisition  proceedings  begin  with  the publication of  the preliminary notification under section 4 of the  Land Acquisition  Act, 1894. When the acquisition is for a  company the  Purpose has  to  be  investigated  under section SA  (by hearing  objections and  disposing them)  or under section  40 necessarily  after the  notification under section 4  of the  Act. Under section 6 if the Government is satisfied after  considering the  report, if any, made under section 5A  that any  particular land  was needed for public purposes or  for a  company a  declaration shall  be made to that  effect   subject  to   certain  conditions  stipulated therein. Sub-rule  4 of  Rule  4  of  the  Land  Acquisition (Companies) Rules 1963 provides that no declaration shall be made by  the Appropriate  Government under  section 6 of the Act unless  (i) the appropriate government had consulted the committee and  had considered the report submitted under the said rule  and the report if any, submitted under section SA of the  Act and  (ii) further any agreement under section 41 of the Act executed by the Company.       To  complete the  acquisition proceedings notification under section 6 of the Act is required. Section 6 of the Act enjoins that  the government  has to  be satisfied  that the land is needed for public purpose or for a company and after declaration is  made the  acquisition is  complete after the award is  made and  possession of the land is taken when the land vests  under section  16 in  the government  free  from encumbrances. Section 4 939 does  not   require  as   such  this   satisfaction  of  the government.  The   government  might   initiate  acquisition proceedings "if  it appears"  to the government that land is needed either  for public  purpose or  for a  company.  That might appear  to the  government by  enquiry aliunde or on a petition or  application made  by any  company. Whether  the need  is  proper  or  genuine  that  can  be  found  by  the government subsequently  after notice under section 4 of the Act. An  enquiry under  rule 4 might be made before issuance of the notification under section 4 of the Act but it is not

3

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 10  

a sine  qua non  for the  issuance of the notification under section 4  to have an enquiry under rule 4 of the Rules. The scheme and  the language  of the  Act and  the Rules  do not indicate that. Therefore, section 4 as such does not require government to  be satisfied,  it is sufficient if it appears to the  government that  land is  needed either  for  public purpose  or  for  a  complain.  It  may  so  appear  to  the Government either by independent inquiry or from reports and information received  by the  government  or  even  from  an application by the company concerned. [943H; 944A-F]       2.3  It is  undoubtedly true that a notification under section 4  can be  issued after  enquiry under  rule 4.  But under the  scheme of  the Act,  the converse is not correct, i.e.,  the   enquiry  under   rule  4  must  always  precede notification under  section 4  of the  Act,  though  enquiry under rule  4(1) must  precede action under section 6 of the Act. Further  certain matters  which are required to be done under rule  4 cannot  be done  before because the officer or the person authorised by him would have no authority, unless notification under section 4 is issued. [945G-H; 946A]            Rule 4(4) does not prohibit or forbid issuance of notification under section 4 of the Act unless rule 4(1) has  been compiled with. If it is now insisted that there should    be no issuance of notification under section 4 of the Act before enquiry under rule 4 then this sub-rule has to be re-  written by stating that no notification under section 4 and    no declaration under section 6 issued or made as the case  may be unless the requirements mentioned in clauses (i) and   (ii) of sub-rule (4) of rule 4 have been complied with. On  the contrary, it will be contrary to the scheme and purpose  of the acquisition proceedings because the compensation for  the acquisition has to be fixed under section 23 of the Act  keeping the market rate as or the date of F the issuance of  the notification under section 4 in view. If it be that the        enquiry as contemplated by rule 4 should also precede  issuance of notice under section 4 of the Act then that may     upset the fixation of the market value and escalation of    price with the passage of time between publication of the   notification under sections 4 and 6 would make acquisition difficult.                                          [945A.D]        3.   In  a   matter  of  this  nature  where  several Contentions factual  and legal  are urged  and when there is scope of  an appeal  from the  decisions Of the Court, it is desirable as was observed by the Privy Council long time ago to avoid  delay and protraction of litigation that the court should, when  dealing with  any matter  dispose of  all  the points and not merely rest its decision on one single point. [950A-B] 940

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 504 Of 1985       From  the Judgment  and Order  of the  High  Court  of Bombay, Panaji  Bench (Goa)  dated the  26th June,  1984, in writ Petition No, 8 of 1984.              B.  Zaiwala, Anil B. Divan, Usgaonkar, Ravinder Narain, and Aditia Narayan, for the Appellant.       S.C.  Desai, M.M  Abdul Khader,  Naunit  Lal,  Kailash Vasdev, Mrs.  Vinod Arya,  and Miss  A  Subhashini  for  the Respondents.      The Judgment of the Court was delivered by       SABYASACHI  MUKHARJI, J.  Special leave  granted. This

4

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 10  

appeal filed  by M/s  Fomento  Resorts  and  Hotels  Limited raises the short question as to whether compliance with rule 4 of  the  Land Acquisition  (Companies) Rules, 1963 (hereinafter called the  Rules) is necessary before issuing notifications under  section   4  of   the  Land   Acquisition  Act,  1894 (hereinafter referred to as the Act).       It  appears that the land in question was purchased by Gustavo Ranato  da Cruz Pinto hereinafter referred to as the land owner  and the  original respondent  No. 1  on 10th  of March, 1978. The original respondent No. 2 and the appellant herein on  the 15th November, 1978 made an application under Chapter 7  of the  Act  for  the  acquisition  of  the  said properties. The  government issued on the 29th October, 1980 notification in  respect  of  the  land  in  question  under section 4  of the  Act which was published in the Government Gazette dated  30th October,  1980.  The  land  owner  being respondent No.  1  to  this  appeal  objected  to  the  said notification under  section 4.  Subsequently government held enquiry under section 5A of the Act and the Deputy Collector submitted the report to the Government in March, 1981. On or about 10th April, 1981 the Deputy Collector issued notice to respondent No.  1 that  enquiry under  rule 4  of the  Rules would be  held on  15th April,  1981. The  respondent No.  I filed his  objections on  merit by the letter dated 4th May, 1981. On  26th October, 1983, agreement was executed between the government  and the  acquiring company  that the land in question was  needed  for  the  purpose  of  development  of tourism. the  government issued notification under section 6 of the  Act which  was published  in the  government Gazette dated 27th October, 1983. 941       The  petition under  Article 226  out  of  which  this appeal  arises  was  filed  in  the  Bombay  High  Court  by respondent No.  I challenging  the said  notifications under sections a  and 6  of the Act. The High Court of Bombay (Goa Bench) quashed  the said notification under sections 4 and 6 of the  Act only  on the ground that enquiry under rule 4 of the Rules  was not  held prior  to  the  notification  under section 4  of the  Act. The  propriety 1 and validity of the said decision  of the High Court are under challenge in this appeal. The  High Court,  however, noted  that the  impugned notification had  been challenged  on several  other grounds but in the view it had taken on the first ground namely that the notifications  under sections  4 and  6 of the Act being bad for  prior non-compliance  with rule 4 of the Rules, the High Court felt that it was not necessary to deal with other grounds. The  petition succeeded  before the  High Court and the notifications  under sections  4 and  6 of  the Act were quashed. This  appeal is  filed against  the judgment of the High Court.       Under  the scheme  of the Act, it is necessary for the purpose of acquisition of land first to issue a notification under section  4 of  the Act,  whenever it  appears  to  the appropriate government  that land  in any locality is needed or likely to be needed for any public purpose.       The  purpose and  object  of  the  notification  under section 4  of the  Act have  been explained by this Court in the case  of Babu  Barkya Thakur  vs. State  of ,Bombay (now Maharastra) and others thus:               "The purpose of the notification under section      4 is  to carry  on a  preliminary investigation  with a      view to  finding out  after necessary survey and taking      of levels,  and, if  necessary, digging  or boring into      the sub-soil  whether the  land  was  adapted  for  the

5

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 10  

    purpose for  which it  was sought to be acquired. It is      only under  S. 6 that a firm declaration has to be made      by Government  that land  with proper  description  and      area so  as to  be identifiable  is needed for a public      purpose or  for a  Company. What  was a  mere  proposal      under S.  4 becomes  the subject  matter of  a definite      proceedings for acquisition under the Act. Hence, it is      not correct  to say that any defect in the notification      under S. 4 (1) AIR 1960 S. C. 1203 at 1208. 942      is  fatal   to  the   validity  of   the   proceedings,      particularly when  the acquisition is for a Company and      the purpose has to be investigated under S. 5A or S. 40      necessarily after  the notification  under S.4  of  the      Act."       This Court emphasised that when the acquisition is for a Company the purpose has to be investigated under section . A or  section 40  necessarily after  the notification  under section 4 of the Act. The land acquisition proceedings begin with  the   publication  of  the  preliminary  notification. Section 5A enjoins hearing of the objections and disposal of objections. Sections  6 of  the Act  provides  that  if  the government is  satisfied after  considering the  report,  if any, made  under section  5A, that  any particular  land was needed for  public purpose,  or for a Company, a declaration shall be  made to  that effect subject to certain conditions mentioned in  the various  sub-sections of  section 6 of the Act. After  declaration under  section 6,  section 7 enjoins the Collector to take order for acquisition of land. Various steps  for   the  actual   acquisition  are   enumerated  in subsequent section  of the  Act which need not be set out in detail. Section  16 empowers  taking of the possession after an award  is made  under section  11 and thereafter the land shall vest in the government free from all encumbrances.       It  is important  to note  that section  23 of the Act deals with  the matters  to  be  considered  in  determining compensation for acquisition of land and ht enjoins that the market value  should be  determined as  on the  date of  the publication of  the notification  under section  4. In other words section 23 pegs the market value of the land as on the date of  the notification  under section  4 as  one  of  the factors to  be taken  into consideration  in determining the compensation to  be paid.  Part VII  of the  Act deals  with acquisition of  land for  companies. Section  41 of  the Act provides that  if the  appropriate government  is  satisfied after considering the report, if any, of the Collector under section 5A,  or on  the report  of  the  officer  making  an enquiry under  section 40 of certain matters, the details of which are  not necessary for the purpose of appeal to be set out, it shall require the Company to enter into an agreement with  the   appropriate   government   providing   for   the satisfaction  of  the  appropriate  government  for  certain matters enumerated  in different  sub-sections of section 40 The  said   provisions  need  not  be  set  out  in  detail. Essentially the  satisfaction and agreement with the company arc to ensure that the 943 land in  question will  be put  to such  use which  will  be useful to the A public.       Rule  3 of  the Rules provides for the constitution of the  Land   Acquisition  Committee.   Rule   4   is   headed "Appropriate Government  to  be  satisfied  with  regard  to certain matters  before initiating proceedings" and sub-rule (l) of  rule 4  lays down  certain matters  about which  the

6

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 10  

appropriate  government   has  to   be  satisfied  when  the acquisition is  for the  Company. Sub-rule  (4) of rule 4 of the Rules  provides that no declaration shall be made by the appropriate government under section 6 of the Act unless (i) the appropriate  government had  consulted the committee and had considered  the report submitted under the said rule and the report,  if any,  submitted under  section SA of the Act and (ii)  further any  agreement under section 41 of the Act executed by  the Company.  Rule S  of Rules  deals with  the matters which  are to be provided for in the agreement under section 41  of the  Act. Rule  6 similarly  deals  with  the additional matters  which might be provided in the agreement under section  41 of the Act. Rule 7 provides for submission of periodical  reports. Rule  8 of  the Rules deals with the conditions under  which sanction is to be given for transfer of land. Rule g deals with special provisions in relation to certain Companies.  It is  not necessary  to  discuss  these rules in detail for the present purpose.       A  conspectus of  the provisions of the Act as well as the  Rules   indicate  that   there  are   two  purposes  of acquisition of land-one being for the public purpose and the other for  the purpose  of a Company. In case of acquisition for Company,  the  appropriate  government  has  to  satisfy itself that  such acquisition  is needed and would be useful also for  public need.  Rule 4  of the  Rules  provides  for satisfaction of  the appropriate  government with  regard to various matters before acquisition.       The  learned judges  of the  Bombay High Court were of the view that the enquiry under rule 4 was necessary for the initiation of  the acquisition  proceedings to  be satisfied that acquisition was necessary for the Company.       We  are unable  to  accept  this  conclusion  for  the following reasons: (i) To  complete the  acquisition proceedings,  notification under 944 section 6  of the  Act is  required. Section  6 of  the  Act enjoins that  the government  has to  be satisfied  that the land is needed for public purpose or for a Company and after declaration is  made the  acquisition is  complete after the award is  made and  possession of the land is taken the land vests  under   section  16   in  the  government  free  from encumbrances. Section  4  does  not  require  as  such  this satisfaction  of   the  government.   The  government  might initiate acquisition  proceedings "if  it  appears"  to  the government that  land is needed either for public purpose or for a  Company. That  might  appear  to  the  government  by enquiry aliunde  or on a petition or application made by any Company. Whether  the need  is proper or genuine that can be found by  the government  subsequently  after  notice  under section 4  of the Act. An enquiry under rule 4 might be made before issuance  of the  notification under section 4 of the Act but  it is  not a  sine qua  non for the issuance of the notification under section 4 to have an enquiry under rule 4 of the Rules. The scheme and the language of the Act and the Rules do  not indicate that. As noted before, section 4 does not require  government to be satisfied, it is sufficient if it appears  to the government that land is needed either for public purpose  or for  a Company.  It may  so appear to the government either by independent enquiry or from reports and information received  by the  government  or  even  from  an application by the company concerned.       Section  6 undoubtedly  requires satisfaction  of  the government  and  enquiry  contemplated  under  rule  4  must precede publication  of the  notification under section 6 of

7

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 10  

the Act. So also there must be before section 6 notification an enquiry  under section  5A. The  p significant pointer to the scheme  is provided  in sub-rule  (4) ’of  rule  4,  the material portion of which reads as follows:-                  "(4) No  declaration shall  be made  by the      appropriate  Government under section 6 of the Act unless-          (i)   the appropriate  Government has consulted the      Committee and has considered the report submitted under      this rule  and the  report,  if  any,  submitted  under      section 5A of the Act; and          (ii)  the agreement under section 41 of the Act has      been executed by the Company." 945            The said sub-rule significantly does not prohibit or forbid  A issuance of notification under section 4 of the Act unless  rule 4  (l) has been complied with. If it is now insisted that  there should  be no  issuance of notification under section  4 of the Act before enquiry under rule 4 then this sub-rule  has to  be  re-written  by  stating  that  no notification  under  section  4  and  no  declaration  under section 6  issued or  made as  the case  may be  unless  the requirements mentioned  in clauses  (i) and (ii) of sub-rule (4) of lure 4 have been complied with. We find no warrant to do that.  On the contrary, it will be contrary to the scheme and purpose  of  the  acquisition  proceedings  because  the compensation for  the acquisition  has  to  be  fixed  under section 23 of the Act keeping the market rate as on the date of the issuance of the notification under section 4 in view. If it  be that  the enquiry as contemplated by rule 4 should also precede  issuance of  notice under section 4 of the Act then that  may upset  the fixation  of the  market value and escalation  of  price  with  the  passage  of  time  between publication of  the notifications  under sections  4  and  6 would make acquisition difficult.       An argument was sought to be built on the basis of the heading  of   rule  4  which  stipulates  that  "Appropriate Government to  be satisfied  with regard  to certain matters before initiating  acquisition proceedings". It is true that before  the   initiation  of  the  acquisition  proceedings, government had  to be satisfied of certain matters mentioned in the  various sub-rules  of rule  4  as  well  as  various provisions  of   the  Act.   Though  preliminary  steps  for initiation of  acquisition  proceedings  are  necessary  and those can only be taken by the authority of the notification under section  4 as mentioned in the decision of Babu Barkya Thakur v.  State of  Bombay (now  Maharashtra)  and  Others, (supra) the  initiation of  the acquisition  proceedings for all practical  purposes begins  after section 6 notification Satisfaction is  necessary for  proceeding  for  acquisition under section  6 of  the Act  but section 4 unlike section 6 does not  require for  the issuance  of  the  notice  to  be satisfied but it might act only "when it appears" to it that the land  is needed or is likely to be needed for any public purpose.       Reading  the Act and the Rules and keeping in view the scheme of  the Act,  it is  apparent, in  our opinion,  that before the  issuance of  section 4 notification, there is no requirement  as   such  of  compliance  with  the  procedure contemplated by rule 4 of the Rules. We are therefore unable to subscribe to the view that 946 enquiry by  rule 4 must precede the issuance of notification under section  4 (1)  of the  Act. Furthermore  as indicated before certain  matters which  are required to be done under

8

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 10  

rule 4  can not  be done  because the  officer or the person authorised  by   him  would   have   no   authority   unless notification under section 4 is issued.      Reliance was  placed before  the Bombay  High Court and before us  in support of the judgment of the High Court on a decision of  this Court in the case of Abdul Husein Tayabali and Ors.  v. State  of  Gujarat  and  Ors.  (1).  There  the contention before  the Court  was that  Master  was  only  a Special Land  Acquisition  Officer  and  not  the  Collector within the  meaning of rule 4. Furthermore, it was urged, in any event,  the notification in question did not ’specially’ appoint him  but was  a general notification authorising all the Special Land Acquisition Officers in the State appointed not only  before the date of section 4 notification but also those who  would be  appointed  in  future  It  was  further contended that  notification did  not "appoint"  but  simply authorised him  to perform  the functions  of the Collector, the State  Government had not given any directions to him to make a  report as  required by rule 4; therefore the enquiry held by  him under  that rule and the report made by him was invalid  and   consequently  no  notification  either  under section 4  or section  6 could  be validly  issued.  It  was urged, therefore,  the section  6  notification  was  issued without complying  with Part  VII of the Act and without the valid consent  of the  State Government  as  required  under section 39(iii),  that the acquisition was made malafide and without application  of mind  to the  relevant facts and the acquisition did not involve any public purpose and the State government was  bound to  give an opportunity Of being heard to the  appellants before taking a decision under section 5A particularly when  the report made by Master was against the acquisition.       In  this connection our attention was drawn to section 39 of  the Act  which provides that provisions of sections 6 to 37  (both inclusive) shall not be put into force in order to acquire  land for  any Company  unless with  the previous consent of the appropriate Government nor unless the Company shall have  executed the  agreement therein after mentioned. This  section,   in  our   opinion,  has  no  relevance  for determining whether  to be  a  proper  acquisition,  enquiry contemplat- (1) [1968] 1 SCR 597. 947 ed under  rule 4  must precede  issuance of the notification under section  4 of  the Act.  In the decision of this Court referred to  hereinbefore, this question did not really fall for consideration  because there  was compliance with rule 4 before issuance  of the  notification and the infirmities of the enquiry  under rule  4 urged on behalf of the appellants were not established.       It  was urged before this Court that the enquiry under rule 4  was a  quasi-judicial enquiry  and therefore  it was incumbent on Master to give an opportunity to the appellants to be  heard. This  Court was  of the  view  that  the  rule provide that  an officer  conducting the enquiry has to hear the Company before making his report. Whether he was also to hear the owners of the land or not did not fall for decision in those  appeals as  the officer  had in fact given such an Opportunity to  the appellants  by serving them with notices and recorded  the statement  of such  of them  who cared  to appear before  him. It  was then  contended that the enquiry under rule  4 had  to beheld  after the  notification  under section 4  was issued  and  not  before  and  therefore  the enquiry held by Master was not valid. This Court observed at page 604  of the  report "We do not find anything in rule or

9

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 10  

in any  other  rule  to  warrant  such  a  proposition.  The enquiry, the report to be made consequent upon such enquiry, obtaining the opinion of the Land Acquisition Committee, all these intended  to  enable  the  Government  to  come  to  a tentative conclusion that the lands in question were or were likely to  be needed  for a  public  purpose  and  to  issue thereafter  section   4  notification   In  our  opinion  no objection to  the  appointment  of  Master  to  perform  the functions of  the Collector  under section  3(c) or  to  his competence to  make the  enquiry and the report under rule 4 or their legality can be validly made."       In  our opinion  when this  Court  observed  that  the report of  the enquiry under rule 4 was a factor to be taken into  consideration  and  "to  issue  thereafter  section  4 notification" was  by general observation. It is undoubtedly true that a notification under section 4 can be issued after enquiry under  rule 4.  But under the scheme of the Act, the converse is  not correct  i.e. the enquiry under rule 4 must always precede  notification under  section 4 of the Act. In that decision  this Court analysed the importance of section SA and  it is  after considering the report under rule 4 and report under  section SA  that notification  under section 6 will be issued. It is undoubtedly true that 948 enquiry under  rule 4(1)  must precede  action under section but we  do not  find reading the said decision of this Court in the  context of  the  facts  and  circumstances  and  the contentions urged in that case that this Court laid down any proposition  that  enquiry  under  rule  4(1)  must  precede issuance of  notification under section 4. Indeed as we have mentioned  before,   notification  under   section  4  would facilitate the matters to be inquired under rule 4(1).       Reliance  was also  placed on  certain observations in the case  of General  Govt.  Servants  Co-operative  Housing Society Ltd"  Agra v.  Wahab Uddin  & Ors. Etc. Etc. 1 There the scheme  of the Act was analysed and what were matters to be required  under rule  4 of the Rules were mentioned. This Court observed at pages 53-54 of the report as follows:                   "No  declaration  shall  be  made  by  the      appropriate Government  under  section  6  of  the  Act      unless  the   Committee  has   been  consulted  by  the      Government and  has considered  the report submitted by      the Collector under section SA of the Act. In addition,      under clause (ii) of sub-rule (4) of rule , the Company      has to  execute an  agreement under  section 41  of the      Act. The  above consideration  shows  that  rule  4  is      mandatory; its  compliance is no idle formality, unless      the directions enjoined by rule 4 are complied with the      notifications  under  section  6  will  be  invalid.  A      consideration of  rule 4 also shows that its compliance      precedes the  notification under  section 4  as well as      compliance of section 6 of the Act."      It  may   be  borne   in  mind  in  that  decision  the notification under  section 6  was quashed  but notification under Section  4 was  not quashed  though observations  were made about  the purpose and the role of compliance with rule 4. Reliance was placed on the following observations at page 54 of the report:      "A  consideration   of  rule  4  also  shows  that  its      compliance precedes the notification under section 4 as      well as compliance of section 6 of the Act."       It  appears to  us that the reference to rule 4 in the context in  which it  was made was inadvertent. What perhaps the Court want- (1) [1981] 3 S.C.R. 46.

10

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10  

949 ed to  convey was  the need  of compliance  of entering into agreement  A   under  section  41  before  the  issuance  of notification under  section  6  of  the  Act.  Otherwise  it appears that  there was no enquiry under rule 4 of the Rules before issuance  of the notification under section 4 yet the notification  under   section  4   was  not   quashed.   The observation then in any event is obiter.       On  the scheme  of the Act, we are of the opinion that on a  correct  interpretation,  it  is  not  necessary  that enquiry under  rule 4  must in all cases precede issuance of the  notification   under  section  4  of  the  Act.  In  an appropriate case  if it is possible, enquiry under rule 4(1) may be  held before  the issuance  of the notification under section 4.  But it  is not  a mandatory  requirement that it must precede  before the  issuance of the notification under section 4.       Our  attention was  drawn to  a Bench  decision of the Allahabad High  Court in  the case  of Raja  Ram Jaiswal  v. Collector, Allahabad  & Another  (1), where it was held that it would  not be  right to  say that  a case where a company makes  an   application  for  acquisition  of  land  to  the Collector it was obligatory that the provisions of rule 4(1) must be  complied with  before the  Collector could  issue a notification under  section  x(1)  of  the  Act.  With  this conclusion we  are in  agreement, though  factually the case was slightly different in the sense that there the Collector was authorised  to make a notification under section 4(1) of the Act  and not  the State  Government  as  in  this  case. Therefore, though  there may  be in certain cases compliance with rule 4(1) of the Rules it was not mandatory that before issuance of notification under section 4(1) of the Act there should be an enquiry in compliance with rule 4(1).       In  the premises  in so  far as  the Bombay High Court held that  non-compliance with rule 4 before the issuance of notification under  section 4(1)  of the  Act is  bad is set aside.       As  mentioned hereinbefore,  since the issuance of the notifications was  challenged on  several other  grounds and the High  Court had  not decided those grounds, we remit the matter back  to the  High Court  to decide those grounds- We request the  High Court to dispose of those grounds as early as possible. (1) [1980] 2 ILR Allahabad 269. 950              In  a  matter  of  this  nature  there  several contentions factual  and legal  are urged  and when there is scope of  an appeal  from the  decision of  the Court, it is desirable as was observed by the Privy Council long time ago to avoid  delay and protraction of litigation that the court should, when  dealing with  any matter  dispose of  all  the points and not merely rest its decision on one single point.           In the facts and circumstances of the case, as the matter is  being remitted  back to  the High Court, costs of this appeal  will abide  by the  result of  the  High  Court decision. S.R.                                          Appeal allowed 951