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PETITIONER: AMRITSAR IMPROVEMENT TRUST ETC.

       Vs.

RESPONDENT: BALDEVA INDER SINGH AND  ORS. ETC.

DATE OF JUDGMENT17/11/1971

BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. GROVER, A.N.

CITATION:  1972 AIR  182            1972 SCR  (2) 386  1972 SCC  (1) 165

ACT: Punjab   Town  Improvement  Act  1922--Scheme  prepared   by Amritsar Improvement Trust under ss. 24, 25 & 28 of Act  and sanctioned  by Government under s. 41--Scheme purporting  to be  ’development scheme’ and ’housing accommodation  scheme’ including areas outside municipal limits--Scheme was invalid since  it was an expansion scheme--Acceptance by  Government did not make scheme valid--Being one and indivisible  scheme must be struck down as a whole.

HEADNOTE: The Amritsar Improvement Trust by its resolution dated April 19,  1962  framed  a  development-cum-housing  accommodation scheme  under  ss.  24,  25  and  28  of  the  Punjab   Town Improvement  Act 1922.  After notice was issued under s.  36 of the Act several objections were received. the  objections were  rejected  by the Improvement  Trust.   Thereafter  the scheme was submitted to the government and sanctioned by  it under s. 41.  The High Court in writ petitions filed  before it  challenging the scheme held that the  Improvement  Trust had  no  power to include in a  ’development  scheme’  areas outside the municipality for the purpose of development.  In appeals  to  this  Court against the judgment  of  the  High Court, HELD  : (i) The legislature has given specific names to  the schemes to be prepared by the Improvement Trust.  Hence when the   Improvement  Trust  says  that  it  has  prepared   ’a development scheme’, it is not possible to hold that in fact it has prepared ’an expansion scheme’.  The power  conferred on  the Improvement Trust is not a plenary power.  It  is  a power  that  has  to be exercised  in  accordance  with  the conditions  laid down in the Act.  If the Improvement  Trust wanted  to  prepare ’at,. expansion scheme’ it  should  have formed  an  opinion  in the terms of s. 24(2)  "that  it  is expedient  and  for  the public  advantage  to  promote  and control the development of and to provide for the  expansion of a municipality in a locality adjacent thereto within  the local area of such trust". [391 H] From the resolutions passed by the improvement Trust it  did not appear that it had formed any such opinion.  Under these circumstances  it was not possible to accept the  contention of the appellants that as the resolutions of the Improvement

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Trust  refer to s. 24 it could be concluded that the  scheme prepared was ’an expansion scheme’.  The resolutions of  the Improvement Trust did not merely refer to s. 24.  They  also said that the scheme prepared was ’a development scheme’ cum ’housing scheme’.  It these resolutions were read as a whole it  was  clear that the Improvement Trust purported  to  Act under   its   power  under  P..  24(1)  which   dealt   with ’development  scheme’ and, s. 25 which dealt  with  ’housing accommodation scheme’ and not under s. 24(2). [392 B-C] (ii) it is a well established principle that if an authority has  a valid power to do a particular act, the fact that  it purported to do that act under a provision of law which  did not  confer power to do that act, would not invalidate  that act.   But that rule was inapplicable to the facts  of  this particular case. [393 B.] 387 Before  taking action under s. 24(2), the Improvement  Trust had  to  form a particular opinion.  The formation  of  that opinion  was a condition precedent.  Until  the  Improvement Trust  forms that opinion it is incompetent to  take  action under  that section.  The Act has not conferred any  blanket power on the Improvement Trust, to frame any scheme which it thought  fit.  That being so it was not possible  to  uphold the  contention of the appellants that the  impugned  scheme could be traced to a valid power. [393 C-D] L. Hazari Mal Kuthiala v. Income-tax Officer, Special Circle Ambala  Cantt. and Anr., 41 I.T.R. 12 and  Hukumchand  Mills Ltd.  v.  State  of Madhya Pradesh & Anr..  52  I.T.R.  583, distinguished. (iii)  The schemes framed by the Improvement Trusts  do  not come  into force automatically.  They have to be  sanctioned by the Government.  Hence it is necessary for the government to know before sanctioning the scheme as to what the  scheme is, so that it may examine whether that scheme is  necessary or  feasible.   In  the  present  case  the  government  was informed that the scheme in question was ’a development-cum- housing accommodation scheme’.  It approved the scheme.   It cannot  be  said  whether  it  would  have  sanctioned   ’an expansion scheme’.  The mere acceptance of the scheme by the Government did not alter the legal position. [393 B-F] (iv)  The  scheme  was  one and  indivisible.   It  was  not possible  to  hold  that  it was  partly  valid  and  partly invalid.  It had to stand or fall as a whole. [394 A-B] The appeals must accordingly be dismissed.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeals No. 1418.  1419 and 1662 of 1968. Appeals  from the judgments and orders dated July  29,  1966 and  January 3, 1966 of he Punjab High Court in  Civil  Writ Nos. 2052 and 2053 of 1965. S. K. Mehta, K. L. Mehta and K. R. Nagaraja, for the  appel- lant (in C.As.Nos. 1418 and 1419 of 198). V.  C.  Mahajan. and R. N. Sachthey, for the  appellant  (in C.A. No. 1662 of 1968). Bishan Narain, O. P. Sharma, B. Datta, and J. B.  Dadaclwni. for respondents Nos.  1 to 5 (in C.As. Nos. 141 8 nd 1662 of 1968). Frank  Anthony and E. C. Agrawala, for respondent No. 1  (in C.A. No. 1419 of 1968). The Judgment of the Court was delivered Hegde,  J.  In  these  appeals  by  certificates,  just  one question  of  law arises for decision and that  question  is

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whether  the  scheme prepared by the  Amrittsar  Improvement Trust  under  ss.  24,  25 and  28  and  sanctioned  by  the government  under S. 41 of the Punjab Town  Improvement  Act 1922 (to be hereinafter called the Act)  388 is an invalid scheme.  The High Court of Punjab and  Haryana has  held in two writ petitions that the scheme in  question is  an  invalid scheme and has consequently set  aside  that scheme.    Aggrieved  by  those  decisions,   the   Amritsar Improvement Trust as well as the State government of  Punjab have come up in appeal. The Amritsar Improvement Trust at its meeting held on  April 19, 1962 resolved as follows:              "70.               Item               For consideration.  Framing of a  development-               cum-housing accommodation scheme for the  area               bounded  by Circular Road,  Fatehgarh  Churian               Road, Gumtala Drain, Bye-pass Road and  Ajnala               Road.                                 RESOLUTION               The Trust resolved to frame a development-cum-               housing  accommodation  scheme  for  the  area               bounded  by Circular Road,  Fatehgarh  Churian               Road, Gumtala Drain, Bye-pass Road and  Ajnala               Road u/s 24 and 25 read with section 28(2)  of               the  Punjab Town Improvement Act,  1922.   The               Area  will be developed as  a  Commercial-cum-               residential area and an industrial colony will               also  be provided.  Sites will  be  ear-marked               for  the construction of houses  for  services               men and also for labour and harijan  colonies.               The scheme should now be notified under s.  36               of the Punjab Town Improvement Act, 1922,  for               inviting objections." That resolution was amended by the Improvement Trust at  its meeting held on May 1, 1962.  The amendment reads thus               "92.          Item.               Reference Trust Resolution No. 70 dated  19-4-               1962.               Dev.  Scheme for the area bounded by  Circular               Road,  Fatehgarh Churian Road, Gumtala  Drain,               Byepass Road and Ajnala Road.                   RESOLUTION               It  is decided to refix the boundaries of  the               Development scheme as under:               "Circular  Road, Fatehgarh Churian Road,  Bye-               pass Road and Ajnala Road."               Resolution  No. 70 dated 19-4-1962 be  and  is               amended accordingly." 389 Thereafter  on May 4, 1962, it issued the  following  notice under s. 36 of the Act.               "The Amritsar Improvement Trust, Amritsar.               Notice under section 36 of the Punjab Town Im-               provement Act, 1922.               Notice is hereby given that in accordance with               Resolution No. 70 dated 19-4-1962, as  amended               by Resolution No. 92 dated 1-5-1962, passed by               the  Amritsar Improvement Amritsar, the  Trust               has    framed    a     development-cum-Housing               accommodation  scheme  for an  area  measuring               approximately  860 acers, bounded by  Circular               Road,  Fatehgarli Churian Road,  By-pass  Road               and Ajnala Road, within the local area of  the               Amritsar  Improvement Trust, under section  24

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             and  25 read with section 28(2) of the  Punjab               Town Improvement Act, 1922.  The area will  be               developed  as Commercial-cum-residential  area               and   an  industrial  colony  will   also   be               provided.   Sites will be ear-marked  for  the               construction  of colonies for service-men  and               also   for   labourers  and   Harijans.    The               boundaries of the scheme are as under:               NORTH.-Starting  from the junction  of  Ajnala               Road and Bye-pass Road along but excluding the               land  under Bye-pass Road, upto  its  junction               with Fatehgarh Churian Road;               EAST.-Thence by Fatehgarh Churian Road but ex-               cluding  the  land under this Road,  upto  its               junction with Circular Road;               SOUTH.-Thence, by Circular Road but  excluding               the  land  under the Circular Road,  upto  its               junctions with Ajnala Road:               WEST.-Thence by Ajnala Road but excluding  the               land under the Ajnala Road, upto its  junction               with Byepass Road, the point of start. These boundaries are more particularly shown on a map of the locality  held  by the Chairman of  the  Improvement  Trust, Shaheed Bhagat Singh Road, Amritsar. 2.  Details of the Scheme and a statement of the land to  be acquired  and the general map of the locality  comprised  in the  scheme  may be inspected at the office  of  the  Trust, Shaheed Bhagat Singh Road, Amritsar, during office hours, on any working day. 390 3.  Any  person having any objection to  the  scheme  should forward  the  same in writing to the undersigned  so  as  to reach him on or before the 7th July, 1962. Dated, 4th May, 1962.                                      Sd/- Shashpal Singh,                                            Chairman,                     Amritsar Improvement Trust, Amritsar. In  response  to  that notice.  several  interested  persons submitted  their objections.  One of the  objectors  pleaded that  the Improvement Trust had no competence to include  in "a development scheme" areas outside the municipality.   The Improvement  Trust rejected all the objections and  approved the  prepared scheme.  Thereafter the same was submitted  to the government and the government sanctioned the same. There  is no dispute that the impugned scheme includes  both areas  inside  the Amritsar municipality as  well  as  areas outside  that  municipality.   It  is  also  seen  from  the resolutions  passed by the Improvement Trust as well as  the notice  issued  by  it  under S. 36 of  the,  Act  that  the Improvement  Trust  purported to frame "a  development"  cum "housing accommodation scheme".  It did not purport to frame "an expansion scheme". The High Court has come to the conclusion that the  Improve- ment Trust had no power to include in "a development scheme" areas  outside  the  municipal limits  for  the  purpose  of development. From  the  resolutions passed by the Improvement  Trust,  in particular the resolution passed by it on May 1, 1962, it is seen  that  the areas bounded by "Circular  Road,  Fatehgarh Churian  Road, Bye-pass Road and Ajnala Road" were  included for  the  purpose of development.  It is conceded  that  the area included within those boundaries partly lies within the municipal  limits and partly outside the  municipal  limits. It is urged on behalf of the writ petitioners that the areas outside the municipal limits can be taken over either  under

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"an  expansion  scheme" or under  "a  housing  accommodation scheme".   They  cannot  be taken over  for  "a  development scheme".  There is force in this contention. Let us now read the relevant provisions.  Section 24 of tile Act provides               "(1)  The  trust  may,  for  the  purpose   of               development   of  any  locality   within   the               municipal limits contained in its local  area,               prepare "a development scheme", and 391               (2)  Such trust may, if it is of opinion  that               it  is expedient and for the public  advantage               to promote and control the development of  and               to provide for the expansion of a municipality               in  any locality adjacent thereto. within  the               local area of such trust prepare "an expansion               scheme".               (3)  "A development scheme" or  "an  expansion               scheme"  may  provide for the lay-out  of  the               locality  to  be developed, the  purposes  for               which particular portions of such locality are               to   be   utilised,  the   prescribed   street               alignment  and the building line on each  side               of the streets proposed in such locality,  the               drainage  of  insanitary localities  and  such               other details as may appear desirable." Section  24(1)  deals  with preparation  of  "a  development scheme".   Section 24(2) deals with the preparation  of  "an expansion scheme".  Section 24(3) prescribes what all things could be included in "a development scheme" or "an expansion scheme".  Section 25 reads thus :               "lf  the  trust  is  of  opinion  that  it  is               expedient  and  for the  public  advantage  to               provide housing accommodation for any class of               the  inhabitants  within its local  area  such               trust  may  frame  "a  housing   accommodation               scheme" for the purpose aforesaid........"               (Proviso omitted). Section  28(1)  provides that the scheme under the  Act  may combine one or more types of scheme or any special  features thereof. It is clear from s. 24(1) that "a development scheme" cannot include areas outside the municipal limits.  Therefore if  a scheme  includes  both areas outside  municipal  limits  and inside its limits, such a scheme cannot be prepared under s. 24(1).   As  seen  earlier,  from  the  resolutions  of  the Improvement Trust, it is clear that it purported to  prepare "a  development scheme" cum "housing accommodation  scheme". It did not purport to prepare "expansion scheme". The  legislature  has given specific names  to  the  various schemes to be prepared by the Improvement Trust.  Hence when the   Improvement  Trust  says  that  it  has  prepared   "a development scheme", it is not possible to hold that in fact it  has prepared "an expansion scheme." The power  conferred on  the lmprovement Trust is not a plenary power.  It  is  a power  that  has  to be exercised  in  accordance  with  the conditions  laid down in the Act.  If the Improvement  Trust desired to prepare "an expansion scheme" 392 it  should have formed an opinion "that it is expedient  and for  the  public  advantage  to  promote  and  control   the development  of  and  to  provide for  the  expansion  of  a municipality in a locality adjacent thereto within the local area of such trust". From  the  resolutions passed by the Improvement  Trust,  it

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does not appear that it had formed any such opinion.   Under these  circumstances,  it  is not  possible  to  accept  the contention of the appellants that as the resolutions of  the Improvement  Trust refer to S. 24, we may conclude that  the scheme  prepared is "an expansion scheme".  The  resolutions of the Improvement Trust do not merely refer to s. 24.  They also say that scheme prepared is "a development scheme"  cum "housing scheme".  If these resolutions are read as a whole, it  is  clear that the Improvement Trust  purported  to  act under  its  power  under s. 24(1) and 25 and  not  under  S. 24(2). It  was  urged  on  behalf of the  appellants  that  if  the exercise of a power can be traced to a valid power, the fact that  the  power is purported to have been  exercised  under non-existing power, does not invalidate the exercise of that power.   In  that  connection reliance  was  placed  on  the decisions of this Court in L. Hazari Mal Kuthiala v. Income- tax  Officer, Special Circle Ambala Cantt. and anr. (1)  and Hukumchand  Mills Ltd. v. State of Madhya Pradesh  and  anr. (2). The former case considered the validity of a transfer of  an income-tax proceeding ordered by the Commissioner of Income- tax,  Punjab.   He purported to make the order  in  question under  s. 5(5) and 7(A) of the Indian Income--tax Act,  1922 instead  of making that order under S. 5(5) of  the  Patiala Income-tax Act.  Under both those provisions, he had similar powers.   This Court held that once it is  established  that the  Commissioner had power to transfer the proceeding,  the fact that he purported to exercise that power under a  wrong provision of law would not vitiate his order.  The  exercise of  that  power would be referable to a  jurisdiction  which conferred  validity upon it and not to a jurisdiction  under which it would be nugatory. In  Hukumchand Mills case(2) this Court again ruled that  it is well established that wrong reference to the power  under which  action was taken by the government would not  per  se vitiate  that  action if it could be  justified  under  some other  power  under which the government could  lawfully  do that act : and therefore, even though the notification dated December  28,  1949, by which amendments were  made  to  the Indore Industrial Tax Rules, 1927, was (1) 41 I.T.R. 12. (2) 52 I.T.R. 583. 393 purported  to  be  made under rule 17 of  those  rules,  the amendments  were valid because the government had  power  to make the amendments under s. 5(1) and (3) of Act I of  1948. Failure   to   refer  to  s.  5  did  not   invalidate   the notification. The legal principle enunciated in those decisions is a  well established principle.  If an authority has a valid power to do  a particular act, the fact that it purported to do  that act  under a provision of law which did not confer power  to do that act, would not invalidate the Act.  But that rule is inapplicable to the, facts of the present case. Before  taking action under s. 24(2), the Improvement  Trust had  to  form a particular opinion.  The formation  of  ,hat opinion  is  a condition precedent.  Until  the  Improvement Trust  forms that opinion, it is incompetent to take  action under  that section.  The Act has not conferred any  blanket power on the Improvement Trust, to frame any scheme which it thought  fit.  That being so, it is not possible  to  uphold the  contention of the appellants that the  impugned  scheme can be traced to a valid power. There   is  yet  another  difficulty  in  the  way  of   the

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appellants.  The schemes framed by Improvement Trusts do not come  into force automatically.  They have to be  sanctioned by the government.  The government may accept them.  It  may reject  them.  It may amend them and it may even  send  them back to the Improvement Trusts for reconsideration.   Hence, it   is  necessary  for  the  government  to   know   before sanctioning the scheme as to what the scheme is, so that  it may  examine whether that scheme is necessary  or  feasible. Unless’  the government is informed as to the nature of  the scheme,  it  would  not be possible for  the  government  to consider whether the scheme should be sanctioned or not.  In the  present  case,  the government was  informed  that  the scheme   in   question  was  "a  development   cum   housing accommodation scheme,.  It has approved that scheme.  We  do not  know  whether it would have  sanctioned  "an  expansion scheme". Mr.  V. C. Mahajan learned counsel for the State  of  Punjab contends that the government must be presumed to have  known the  true  facts  before  sanctioning  the  scheme  and  the government  has  no objection for the  scheme  in  question. Even  if we accept that contention that does not  alter  the legal position.  We should not mix up the facts of this case with  the scope of the relevant provisions in the  Act.   We cannot  confine our attention to the facts of  a  particular case.   Our  conclusion  that the  power  conferred  on  the Improvement Trust is a limited power is reached on the basis of the nature of the power conferred and not on the basis of the facts 394 of  this case.  The fact that the government is prepared  to bless a particular scheme does not change the nature of  the power. The  scheme  before us is one and indivisible.   It  is  not possible to hold that it is partly valid and partly invalid. It has to stand or fall as a whole. For the reasons mentioned above, these appeals are dismissed with costs-hearing fee one set. G.C.         Appeals dismissed. 395