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PETITIONER: STATE OF TAMIL NADU AND ANR.

       Vs.

RESPONDENT: A. MOHAMMED YOUSEF AND ORS.

DATE OF JUDGMENT06/08/1991

BENCH: SHARMA, L.M. (J) BENCH: SHARMA, L.M. (J) VERMA, JAGDISH SARAN (J)

CITATION:  1992 AIR 1827            1991 SCR  (3) 375  1991 SCC  (4) 224        JT 1991 (3)   347  1991 SCALE  (2)235

ACT:     Land Acquisition Act, 1894--Section 4  Notification  for acquisition of land for construction of houses by Tamii Nadu Housing  Board  without preparing scheme  under  the  Madras State Housing Board Act, 1961-Validity of.

HEADNOTE:     Under  Section  4 of the Land Acquisition  Act,  1894  a notification  was  issued by the  petitioners  proposing  to acquire  the  land of the respondents  for  construction  of houses  by the Tamil Nadu Housing Board,  constituted  under section 3 of the Madras State Housing Board Act, 1961.     The respondents challenged the impugned notification  in a  writ petition, which was allowed by the Single  Judge  of the High Court holding that the public purpose mentioned  in the notification was too vague in absence of details  relat- ing to the scheme for which the acquisition was sought to be made, and consequently the land owners could not effectively avail of the benefits under section 5A of the Land  Acquisi- tion Act by filing objection. This order was affirmed by the Division Bench of the High Court.     The  State-the  petitioners  filed  this  Special  Leave Petition  contending  that the notification  had  adequately described the nature of the public purpose by mentioning the proposed  construction  of  residential  buildings  and  the respondents  ought  to  have filed  their  objections  under section  5-A instead of filing the writ petition;  that  the procedure in regard to the preparation of the scheme has  to await  the  conclusion of the land  acquisition  proceeding; that the land acquisition proceeding should not be condemned as  pre-mature  on the ground that the scheme has  not  been framed.      The  respondents contended that in view of  the  provi- sions of the Housing Board Act a proceeding for land  acqui- sition can be commenced only after a scheme under the Act is framed,  which  has not been done in the present  case.  The land  acquisition  proceeding,  being  pre-mature  has  been rightly quashed. 376      On  the  question whether  the  acquisition  proceeding could  De initiated only after the framing, of the  proposed

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scheme  and not earlier, dismissing the Special Leave  Peti- tion of the State, this Court,     HELD: 1.01. The procedure prescribed for preparation  of a  scheme  indicates that before it can be  finalised,  full publicity  has to be given inviting objections; and in  case of  objections, the same have to be duly  considered  before granting  sanction. Further, if anybody is still  aggrieved, he has a right of appeal to the State Government. It is only after  this stage is over that the scheme becomes final  and enforceable. [378F]     1.02.  Section 39 of the Madras State Housing Act,  1961 while enumerating the matters to be included in the  scheme, specifically mentions acquisition of land in clause (a).  If the  acquisition is contemplated as a subject matter of  the scheme itself, it follows that it must await the preparation of the scheme wherein it will be included. [379F]     1.03.  The  acquisition  of the land is a  part  of  the execution  of  the scheme itself. Since the  acquisition  is included  in  the  scheme the process of  execution  of  the scheme  starts  immediately when steps for  acquisition  are taken. [381A-B]     1.04. If the notification under section 4 under the Land Acquisition Act is published without waiting for the scheme, it will not be possible for the land owners to object to the proposed  acquisition  on the ground that the  land  is  not suitable for the scheme at all, and therefore does not serve any  public  purpose, or that another piece of land  in  the area concerned, is far more suitable, leading to the  possi- ble  conclusion that the proposed acquisition is mala  fide. The  provisions  of the Housing Board Act also  suggest  the same. [381-DF]     1.05.  It will be practical and consistent  with  common sense to have the scheme finalised before starting an acqui- sition proceeding. A proceeding’ under the Land  Acquisition Act  read with section 70 of the Madras Housing  Board  Act, can be commenced only after framing the scheme for which the land is required. The notification issued under section 4 hi the present case must, therefore, be held to be  pre-mature, and it was rightly quashed by the High Court. [381G-382A]     1.06.  Although  the initiation of  the  proceeding  for acquisition  has to await framing of a scheme, it  does  not mean  that the concluded acquisition proceeding can be  con- demned as void so as to be ignored 377 later.  A  ground  based on the present  judgment  shall  be available to the land owners only for such land  acquisition proceedings, which are under challenge and are still pending decision. [382C-D]     Babu  Barkya Thakur v. The State of Bombay  and  Others, [1961] 1 SCR 128, distinguished.

JUDGMENT:     CIVIL APPELLATE JURISDICTION: Special Leave Petition (C) No. 3790 of 199 1.     From  the  Judgment and Order dated 29.3.  1990  of  the Madras High Court in W.A. No 1028 of 1989.     G.  Ramaswamy,  Attorney General, R. Mohan,  V.  Krishna murthy and R. Ayyam Perumal for the Petitioners.     K.  Parasaran,  K.R.  Chaudhary,  T.V.S.N.  Chari,   Ms. Suruchi Aggarwal and Ms. Manjula Gupta for the Respondents. The Judgment of the Court was delivered by     SHARMA, J. The respondents have successfully  challenged a notification under Section 4 of the Land Acquisition  Act,

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1894 proposing to acquire their land before the Madras  High Court.  Their writ petition was allowed by a learned  Single Judge  and  on appeal the order was  confirmed  by  Division Bench.  The State of Tamil Nadu has challenged the  decision by the present Special Leave Petition.     2.  The  acquisition proceeding, which  is  the  subject matter  of present case, was started for obtaining land  for construction  of  houses by the Tamil  Nadu  Housing  Board, constituted  under  Section 3 of the  Madras  State  Housing Board  Act,  1961 (Madras Act No. 17 of  1961)  (hereinafter referred  to as the ’Housing Board Act’) and this  was  men- tioned in the impugned notification. The High Court has held that  the public purpose mentioned in the  notification  was too  vague in absence of details relating to the scheme  for which the acquisition is sought to be made, and consequently the  land  owners cannot effectively avail of  the  benefits under Section 5A of the Land Acquisition Act by filing their objection.  The learned Attorney General, appearing for  the petitioner  State, has contended that the  notification  has adequately  described  the nature of the public  purpose  by mentioning  the proposed construction of residential  build- ings,  and the respondents ought to have filed their  objec- tions under Section 5A instead of 378 moving  the High Court with a writ application.  Relying  on the  decision in Babu Barkya Thakur v. The State  of  Bombay and  Others, [1961] 1 SCR 128 it has been argued  that  even assuming  that the public purpose was not mentioned  in  the notification  with sufficient particularity, the  proceeding cannot  be quashed at this stage and the High  Court  should have  dismissed the writ petition by pointing out  that  the remedy of the land owners was under Section 5A.     3.  The reply of Mr. Parasaran, the learned counsel  for the  respondents, is that in view of the provisions  of  the Housing  Board Act a proceeding for land acquisition can  be commenced only after a scheme under the Act is framed, which has not been done in the present case. The land  acquisition proceeding,  therefore,  being premature  has  been  rightly quashed.     4. As is indicated by the preamble of the Housing  Board Act, the object of establishment of the Housing Board is  to provide  for  the  execution  of  housing  and   improvement schemes.  The Act envisages eight types of schemes  detailed in  section 40, the housing scheme, as in the present  case, being one of them. The framing of the schemes is dealt  with in Chapter VII (Section 35 to 69) and Chapter VIII  contain- ing  sections  70, 71 and 72 provides  for  acquisition  and disposal  of land. Section 70 states that land  required  by the  Board  for any of the purposes of this Act may  be  ac- quired under the provisions of the Land Acquisition Act  and accordingly  the  present land  acquisition  proceeding  was commenced.     5. The procedure prescribed for preparation of a  scheme indicates  that before it can be finalised,  full  publicity has  to be given inviting objections; and in case of  objec- tions,  the same have to be duly considered before  granting sanction.  Further, if anybody is still aggrieved, he has  a right  of appeal to the State Government. It is  only  after this  stage  is over that the scheme becomes final  and  en- forceable.  Admittedly the proposal to build houses  in  the present  case has not been put in the shape of a  scheme  at all and as stated on behalf of the petitioner a draft scheme with relevant details will be drawn up after the  possession of the land is secured.     6. The question for decision is whether the  acquisition

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proceeding  can be initiated only after the framing  of  the proposed scheme and not earlier. The learned Attorney Gener- al contended that having regard to the provisions of the Act and  the other relevant considerations it must be held  that the procedure in regard to the preparation of           379 the scheme has to await the conclusion of the land  acquisi- tion proceeding. It is only after the possession of the land is  delivered  to  the Board that its  engineers  and  other experts can go over the land, make necessary inspection  and collect vital data, on the basis of which the scheme can  be drawn  up. It is essential to have a clear idea of the  area of the land, its boundaries, and the nature of the soil  for deciding about the details of the proposed scheme, and  this is  not possible so long the owner of the land continues  in possession. Any attempt to draw up a scheme earlier has been described by the learned counsel as an exercise in futility. Alternatively it has been contended that even if it be  held to  be permissible to frame the scheme without  waiting  for the  acquisition  and possession of the land, it  cannot  be further assumed that the land acquisition proceeding has  to await  the finalisation of the scheme. In other words,  both the  proceedings may continue simultaneously, or any of  the proceeding  including one for land acquisition can  be  com- menced without waiting for the other. In any event, the land acquisition proceeding should not be condemned as pre-mature on  the ground that the scheme has not been framed. We  have closely  examined the entire Act with the assistance of  the learned counsel for the parties and in our view the  conten- tion  on behalf of the respondents that the  proceeding  for acquiring  land  can be commenced only after the  scheme  is framed, is well founded.     7.  As has been stated earlier, Chapter  VII  containing sections 35 to 69 deals with the framing of the scheme.  The Act  has  laid down separate procedures  for  the  different types  of schemes, according to necessity  and  suitability. Some  of  the schemes do not require  acquisition  of  land, which  is  however, essential for  constructing  residential buildings  under the housing scheme. Section 39 of the  Act, therefore,  while enumerating the matters to be included  in the  scheme,  specifically mentions acquisition of  land  in clause (a). If the acquisition is contemplated as a  subject matter  of the scheme itself, it follows that it must  await the preparation of the scheme wherein it will be included.     The  Act  requires the proposed scheme to  be  published permitting  objections to be made, and if they are found  to be  valid,  under section 53, the scheme to be  modified  or abandoned. Sub-section (1) of section 49 directs the  notice of  the  draft  housing scheme to include  and  specify  the following  information  as contained in clause (b)  for  the purpose  of publication and information to the general  pub- lic:               "(b) the place or places at which  particulars               of  the scheme a map of the area, and  details               of the land which it is pro-               380               posed to acquire and of the land in regard  to               which  it is proposed to recover a  betterment               fee, may be seen at reasonable hours."                            (emphasis added) The  underlined words above reaffirm the position  that  the acquisition  of  the land has to be a part  of  the  scheme, which  can  be executed only after its  finalisation.  Apart from  the provisions of section 53 mentioned above,  section 56  further  clothes the Board with the power  to  alter  or

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cancel  the scheme even after it is finally sanctioned.  The language of clause (b) of the proviso to the section,  which is quoted below, once more leads to the same conclusion that acquisition  of  the land has to await the  framing  of  the scheme:               "(b)  If any alteration involves the  acquisi-               tion  otherwise than by agreement of any  land               not previously proposed to be acquired in  the               original  scheme, the procedure prescribed  in               the  forgoing sections of this Chapter  shall,               so far as it may be applicable, be followed as               if the alteration were a separate scheme."                               (emphasis added)     8. Mr. Attorney General repeatedly said that unless  the Board  gets  actual possession of the land in  question  its officers cannot go over the same for collecting the informa- tion essential for drawing up of the scheme. It has,  there- fore, been suggested that it is wholly impractical to expect the  scheme to be framed before obtaining the possession  of the  land.  Mr. Parasaran, the learned counsel for  the  re- spondents,  rightly pointed out that the provisions of  sec- tion  147  furnish a complete answer to this  argument.  The section empowers the Chairman (now the Managing Director) of the Board or any person either generally or specially autho- rised  by him in this behalf to enter into or upon any  land with  or  without assistants or workmen for the  purpose  of making  any  inspection, survey, measurement,  valuation  or enquiry or to take levels or to dig or bore into sub-soil or to set-out boundaries and intended lines of work et  cetera. The  last clause in the section gives wide power to  do  any other  thing  which may appear necessary for  achieving  the purpose  of the Act subject to certain  reasonable  restric- tions.     The learned Attorney General also relied on sections  55 and  72  in support of the petitioners’  stand.  Section  55 directs  the Board to proceed to execute the scheme as  soon as it becomes enforceable. It is 381 contended that if the acquisition proceeding is not over  by the  time the scheme is ready, undue delay is bound to  take place.  The fallacy in the argument is that it assumes  that the  acquisition of the land is not a part of the  execution of  the  scheme itself. As has been  indicated  earlier  the position is otherwise- Since the acquisition is included  in the  scheme  the process of execution of the  scheme  starts immediately when steps for acquisition are taken. Thus there is  no question of any disregard of the command  in  section 55.  Section 72 empowers the Board to lease, sell,  exchange or  otherwise dispose of any land vested in or  acquired  by it.  This power has been granted to the Board, according  to the  petitioners, so that if the scheme is  abandoned  under section 53 the land already acquired can be disposed of.  We do  not see any warrant for linking section 72 with  section 53.  The  Board has been given the power to dispose  of  any land whenever it is considered in the interest of the  Board to do so; and the circumstances where it may be expedient to use this power may be many, as for example, when the  scheme is altered or cancelled under section 56 due to a new devel- opment.      9. On the other hand, the order, in which the different steps for the preparation of the scheme and the  acquisition of the land, is suggested on behalf of the petitioners to be taken,  appears to be impractical and defeating the  purpose of section 5A of the Land Acquisition Act. If the  notifica- tion  under  section  4 under the Land  Acquisition  Act  is

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published  without waiting for the scheme, as has been  done in  the present case, it will not be possible for  the  land owners  to object to the proposed acquisition on the  ground that  the  land is not suitable for the scheme at  all,  and therefore does not serve any public purpose, or that another piece  of land in the area concerned, is far more  suitable, leading to the possible conclusion that the proposed  acqui- sition  is mala fide. As discussed above, the provisions  of the  Housing Board Act also suggest the same. The Board  has not  been  vested with the unrestricted power to  frame  any scheme,  as suggested by its planners. It has to  take  into account  the representation by the local authority  as  men- tioned  under  section  50 and the objection  of  any  other person under section 53 and decide the same on merits before according sanction. The matter is not concluded even at that stage; the aggrieved person may appeal to the State  Govern- ment and it is only subject to the final result therein that the  scheme becomes enforceable. In this set up it  will  be practical  and  consistent  with common sense  to  have  the scheme finalised before starting an acquisition  proceeding- We,  accordingly,  hold  that a proceeding  under  the  Land Acquisition  Act read with section 70 of the Madras  Housing Board Act, can be commenced only after framing the scheme of 382 which  the land is required. The notification  issued  under section 4 in the present case must, therefore, be held to be pre-mature, and it was rightly quashed by the High Court.     10.  Before  closing his argument Mr.  Attorney  General stated  that in the past a large number of land  acquisition proceedings  have been concluded and lands acquired  without first  framing  the scheme and on the basis of  the  present judgement  there  may be an attempt by the  land  owners  of those lands to re-open the matter. We do not think that as a result  of  this  judgment the  concluded  land  acquisition proceedings can be allowed to be re-opened. Although we have held  that the initiation of the proceeding for  acquisition has to await framing of a scheme, it does not mean that  the concluded acquisition proceeding can be condemned as void so as  to be ignored later. However, to avoid unnecessary  con- troversy we are hereby clarifying the position that a ground based on the present judgment shall be available to the land owners only for such land acquisition proceedings, which are under challenge and are still pending decision.     11. The special leave petition is dismissed, but in  the circumstances without costs. V.P.R.                                  Petition dismissed. 383