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CASE NO.: Appeal (civil) 5015 1999

PETITIONER: STATE GOVT.  HOUSELESS HARIJAN EMPLOYEES ASSOCIATION

       Vs.

RESPONDENT: STATE OF KARNATAKA & ORS.

DATE OF JUDGMENT:       11/12/2000

BENCH: Ruma Pal, A.P.Misra

JUDGMENT:

L.....I.........T.......T.......T.......T.......T.......T..J

     J U D G M E N T

     RUMA PAL, J.

     The  question to be decided in this appeal relates  to the  rights  of the beneficiary of an acquisition under  the@@      JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Land  Acquisition Act (hereinafter referred to as the Act)@@ JJJJ to  resist  withdrawal of acquisition proceedings.   In  the course  of the arguments before us, we were of the view that the  original  records  pertaining to this  case  should  be produced.   This  was directed on 14th September 2000.   The entire  records  have  admittedly not been produced  by  the State  Government.   We  have been informed by  the  learned counsel  appearing  on behalf of the State that one  of  the files  pertaining  to  the case has been  destroyed  on  3rd February,  2000.  On the basis of the records we have  found that  the  appellant  is  a  Society  registered  under  the Karnataka  Societies  Registration  Act, 1961.  It  has  360 members all of whom are State Government Employees belonging to  the Schedule Castes of Adidravida and Adikarnataka.   It wanted  to  provide house sites for its members all of  whom are  houseless.   In  1983,  the  appellant  approached  the Government  to acquire 15 acres of land at Maralur  village. The  land belonged to respondents Nos.  5 to 7 herein.  By a letter  dated 10.1.1983 the Planning Authority wrote to  the Assistant Commissioner, Tumkur stating that a resolution had been   passed  to  issue   no  objection  certificate  for suitability  of  the land for house sites in favour  of  the appellant.   It  further  said that the land  was  earmarked partly  for  residential  and partly for open place  in  the draft  lay  out plan of Tumkur.  On 16.7.1984 a  letter  was written  by  the Assistant Commissioner to the appellant  in which  the appellant had been asked to furnish the following particulars:   1.   The lists of members of the  Association who are siteless and houseless.  2.  The financial soundness of  the  Association  by way of the shares  collected.   The

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amount deposited in the Bank etc.;  3.  The audit report for the previous three years;  4.  Whether the area proposed for acquisition  is  treated  as residential in  the  plan  i.e. outline development plan, or comprehensive development plan, prepared  by  the  Town  Planning  Department  or  not;   5. Whether  the layout plan proposed by the association fits in the  comprehensive  plan of the city area, 6.   Whether  the proposed  area  is in excess/less as compared to the  demand based on the number of eligible members.

     On  17.8.1984  the  particulars  as  required  by  the Assistant  Commissioner  were furnished including a copy  of the  lay  out plan.  According to the appellant,  the  State Government  required the appellant to make a deposit towards the  cost  of  acquisition.   The  appellant  deposited  the required  amount  in 1984.  According to the appellant,  the State  Government granted prior approval to the  acquisition by  letter  dated 7th September 1986.  A notification  under Section  4 (1) of the Act was published on 6th August  1987. On 9th July 1987, the appellant was called upon to deposit a further  sum  towards  the cost of acquisition by  the  Land Acquisition  Officer.  This amount was also deposited.   The records  were then forwarded by the Assistant  Commissioner, Tumkur  under  cover  of a letter dated  19.11.1987  to  the Revenue  Commissioner  and Secretary to Government,  Revenue Department.  These were returned with the direction that the recommendation  of  the District Level Committee  should  be submitted.   According to the appellant, on 13th May 1988 it wrote  to  the Assistant Commissioner,  Tumkur  Sub-Division giving particulars of the housing scheme and again enclosing a  proposed  lay  out plan.  A letter  dated  30.5.1988  was written  by  the appellant to the  Divisional  Commissioner, Tumkur  requesting  for expedition in which it was stated the  Association  has  already formed 361 sites as  per  the draft  plan measuring East to West and North to South 30ft.x 40 ft.  respectively apart from road and park in 15 acres of land  acquired  at SY No.49 as per the Government Order  No. RD/45/AQT/83 dated 27.3.1987.  The District Level Committee held  a  meeting on 17.6.1988.  The minutes of  the  meeting show  that before recommending the appellants case all  the aspects  were considered and in particular :  An extent  of 80 x 210 Sq.  feet has been left for public amenities as per the  site  plan,  which is enclosed in the file.   The  Town Planning  Authority has pointed that 10% of the land  should be  left  for public amenities.  The Society has  agreed  to this.

     At  its  meeting  held on 28.7.1988  the  State  Level Committee  recommended the acquisition of the land in favour of  the appellant for providing house sites to its  members. On  10th  August 1988, the State Government passed an  order directing  the  authorities to issue the final  notification under  Section  6 (1) of the Act.  As the  statutory  period provided  under  Section 6(1-A) (which has been inserted  by way  of  amendment  in the State of Karnataka)  had  already expired, a fresh Notification under Section 4 (1) of the Act was  directed  to be issued.  Prior to the issuance  of  the Notification,  a  detailed note was prepared by  the  Deputy Secretary,  Revenue  Department which was forwarded  to  the Secretary.   On  1.2.90, the Secretary referred to his  note and  proposed,  We  may  give clearance in  favour  of  the Association.   For approval. This was approved by the Chief Secretary  and placed before the Minister for Revenue who in turn  approved  the  note on 12th February  1990.   On  14th February,  1990  the Secretary, Revenue Department wrote  to

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the  Deputy  Commissioner,  Tumkur District:  Sub:   In  the matter  of acquisition of 15 Acres of land in Survey No.  49 of  Maralur  Village,  Tumkur Kasaba, for housing  sites  in favour  of  Houseless  Harijan-Girian  Government  Employees Association.

     Ref:   1.   Your office letter No.   LAW/CR/130/88-89, dated 17.10.1989.

     2.    Your  letter  No.    LAW/CR/18/88-   89,   dated 26.10.1989:  5.12.1989.

     After  considering  in  great   detail,  the  proposal contained  in  your  letter  and  requisition  of  Houseless Government  Servants  Association,  Tumkur   and  all  other aspects, the State Government has decided to commence afresh the  land acquisition proceedings.  Therefore, I am directed to request you to take steps for issue of notification under Section 4(1) of the Land Acquisition Act.

     A  second  notification under Section 4(1) of the  Act was  issued  on  27.2.90 proposing to acquire the  land  for public  purpose for the benefit of the appellant for housing its  members.   Again  the Government did  not  publish  the declaration  under  Section  6 of the Act  within  the  time prescribed.   A  letter  was  written on  15.3.1991  by  the Secretary,  Revenue  Department  addressed   to  the  Deputy Commissioner.   The  unofficial  translation of  the  letter reads:  Sub:  Allotment of 15 Acres of Land in Survey No.49 in  the  Village  Maralooru, Tumkur  Disrtrict  to  Landless Scheduled  Castes State Government Employees Union (Regd.) Reg.

     Inviting  attention  to your letter No.LQCR-  72-90-91 dated  20th  November,  1990  on the above  subject,  it  is brought  to your notice that while keeping in mind the  fact that  the  matter  of acquisition of these  lands  has  been dropped on earlier two occasions after the initiation of the land   acquisition  proceedings,  on   examination  of   the objections  of  the  land  owners,   again  the  matter   of acquisition of land for being allotted to landless Scheduled Castes  State  Government Employees Union has been  minutely examined in consultation with the Law Department.  According to the opinion of the Law Department the acquisition of land in  favour of the impugned Union is for a public cause.   In view  of  this  it  has been decided by  the  Government  to acquire  15  acres  of land of Survey No.  49  in  Maralooru Village,  Tumkur District/(Kasha) in favour of the  Landless Scheduled  Caste  State Government Employees Union,  Tumkur. Thererore,  I  am  directed to convey the  approval  of  the Government  to  initiate  action for issue  of  notification under  Column  4(1) for acquisition of the  above  mentioned land in favour of the above mentioned Union.

     A   third   notification  under   Section   4(1)   was accordingly  published on 22.7.1991.  This was challenged by respondents  5 to 7 before the High Court (Writ Petition No. 21438 of 1991).  It was contended that the appellant was not duly  registered under the Karnataka Societies  Registration Act,  1960 and, therefore, it was not lawful to acquire  the land   for  it.   No  interim   order  was  passed  and  the acquisition  proceedings  continued.  The respondent  owners filed  objections  to the acquisition.  All  the  objections including  the objection relating to the non-registerability of  the  appellant under the Karnataka Society  Registration

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Act  were  rejected.   According to the noting on  the  file dated  23.11.1991  the land owner can question the validity of  the  registration  of  the Association  on  the  housing activities,  before the appropriate authority and not before this  authority.  Therefore, this objection is not tenable. The  rejection  of  the owner- respondents  objection  under Section  5-A  were  affirmed  on  3.12.1991  in  the  report prepared   by  Deputy  Secretary   to  Government,   Revenue Department  which  was  approved  both by  the  Minister  of Revenue  as  well  as  the Law  Minister.   Directions  were accordingly  issued to proceed under Section 6(1) (a) of the Act on 12.3.1992.  The final Notification under Section 6 of the  Act  was published on 15th May 1992 declaring that  the acquisition was for the public purpose of allotment of house sites  to  the members of the appellant.  On  7th  September 1992,  the  Land  Acquisition Officer made the  Award  under Section  9 of the Act, issued a notice dated 15th  September 1992  and  directed  the appellant to  deposit  the  balance amount  representing  the  difference  between  the  amounts already  deposited  by the appellant and the amount  of  the Award.  The balance amount of Rs.7,36,231/- was deposited on 19th  November 1992.  A further sum of Rs.65,926/- was  also deposited  on 4th January 1993 by the appellant pursuant  to the  directions of the Land Acquisition Officer.  The  total amount  deposited  by  the  appellant towards  the  cost  of acquisition is Rs.19,01,915/.  The Award was approved by the Divisional  Commissioner  by his O.M.  dated 26th May  1993. The  approval records that an inquiry was held by the Deputy Commissioner   and  Assistant   Commissioner  regarding  the members  of  the  Society  and  that  the  authorities  were satisfied  that the appellant-Association consisted of SC/ST members.    According  to  the   orders  of  the  Divisional Commissioner,  possession  of  the acquired land was  to  be handed  over  to the appellant in accordance with  law.   At this  stage,  a  letter  was written by  the  Department  of Revenue to the Land Acquisition Officer directing him not to hand  over  possession  of the land to the  appellant  until further  orders.   According to the  appellant-Society,  the Governments  volte-face  was  because S.Shafiq  Ahmed,  the local  M.L.A.(  respondent  No.   2)  had  objected  to  the finalisation  of the land acquisition proceedings in  favour of  the  appellant.  It is alleged that the respondent  No.2 had  sent  his  objections  not   only  to  the   Divisional Commissioner but also to the Revenue Minister.  The Minister instructed   the  Revenue  Commission  to  stop   the   land acquisition   proceedings  which  in   turn  passed  on  the instruction  to  the Secretary to the Revenue Department  of the  State  Secretariat as a consequence whereof the  letter dated  5th  July  1993 was written.  On 6th July  1993,  the respondents  5,6 and 7 withdrew Writ Petition No.  21438/91. The appellant filed a writ petition challenging the legality of  the  letter  dated 5th July 1993.  Although  an  interim order  had been granted not to take further action  pursuant to  the  letter,  in  the office  note  dated  25.6.93,  the Minister  of  Revenue has recorded, In view of the  opinion offered  by the Law Deptt., it is not permissible to acquire land on behalf of the Govt.  Houseless employees Association registered   under  Sec.   3  of  the  Karnataka   Societies Registration  Act.  Hence withdrawal notification u/s  48(1) of  the  LA Act may be issued. And on 2nd August 1993,  the Government  issued a Notification under Section 48(1) of the Act  withdrawing the acquisition.  This was published in the Official  Gazette on 5th August 1993.  The appellant amended the writ application by seeking quashing of the Notification dated  2nd  August  1993.  A second writ petition  was  also

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filed  by the appellant for the same reliefs.  However  both writ  petitions were dismissed.  It is not necessary for  us to  consider  the  order  dismissing  the  second  petition. Suffice  it to say that by virtue of an order passed by this Court, the appellant was permitted to proceed with the first writ  petition  filed  by  it on 9th July  1993.   The  writ petition  was  dismissed  by the Single Judge  holding  that there  was  no  approval to the  acquisition  under  Section 3(f)(iv)  of the Act and that the letter dated 7th September 1986 relied upon by the appellant in this connection did not amount  to  such approval.  It was also held that  malafides had  not  been established, as respondent No.  2 had  filed statement  of  objections denying all such allegations  and that  the  appellant  had  not  produced  any  material  to establish  that the release from the acquisition was at  the instance of the second respondent in collusion with the land owners.  The Single Judge also held that the Government had the  absolute  power to withdraw from the acquisition  since possession  had not been handed over to the appellant.   The appellants  appeal  was given short shrift by the  Division Bench  of the High Court.  It was said that no reasons  were required  to be given by the Government when it withdrew the acquisition proceedings in the absence of any pleadings with respect to malafides.  It was also said that the decision of this  Court  in Special Land Acquisition Officer, Bombay  V. Godrej  & Boyce 1988 (1) SCR 590 which had been relied  upon by  the appellant did not apply as this Court had, according to  the  High Court, held that reasons were required  to  be given by the Government for withdrawing from the acquisition only  in  connection with acquisition proceedings  initiated under  Part  VIII  of  the Act and not in  cases  where  the proceedings  had  been  initiated  under  Part  II.   Before concluding the narration of facts, we note that according to the  appellant,  during the pendency of  these  proceedings, respondents 5, 6 and 7 sold the land to the respondents 8 to 34.   The respondents 5,6 and 7 have denied this.  We do not propose  to  go into this dispute.  The arguments have  been wide ranging and the parties have submitted written notes of their  arguments.  But the basic grievance of the  appellant is  that the order withdrawing the acquisition under Section 48(1)  of  the Act was passed without any notice or  hearing the appellant.  According to the appellant, the right of the beneficiary  to be heard has been recognized by the decision of  this Court in Larsen & Toubro Ltd.  v.  State of Gujarat and  Others 1998 (4) SCC 387.  According to the respondents, the decision in Larsen & Toubro Ltd.  is limited to the case of  a  company  for  which  land  had  been  acquired  after formalities  under  Part VII of the Act had been  completed. It  was  submitted  that the principles of  natural  justice should  not be extended to withdrawal of an acquisition  for public  purpose.  This Court has consistently held that  the requirements  of natural justice will be read into statutory provisions  unless  excluded  expressly   or  by   necessary implication.   In the case of Union of India V.  Col.   J.N. Sinha  1970 (2) SCC 458, this Court said:  .  It is true@@             JJJJJJJJJJJJJJJJJJJJJJJJJJJJJ that  if a statutory provision can be read consistently with the  principles of natural justice, the courts should do  so because  it  must be presumed that the Legislatures and  the statutory  authorities intend to act in accordance with  the principles  of natural justice.  But if on the other hand  a statutory  provision  either  specifically or  by  necessary implication  excludes  the  application of any  or  all  the principles  of natural justice then the court cannot  ignore the  mandate  of the Legislature or the statutory  authority

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and  read  into  the concerned provision the  principles  of natural justice.

     The  Constitution  Bench  in Olga  Tellis  V.   Bombay Municipal  Corporation  1985 (3) SCC 545 placed the onus  to prove  the exclusion of the rules of natural justice by  way of  exception  and not as a general rule on the  person  who asserted  it.   The  ordinary   rule  which  regulates  all procedure  is that persons who are likely to be affected  by the proposed action must be afforded an opportunity of being heard  as  to  why  that action should not  be  taken.   The hearing may be given individually or collectively, depending upon  the  facts of each situation.  A departure  from  this fundamental  rule of natural justice may be presumed to have been intended by the Legislature only in circumstances which warrant it.  Such circumstances must be shown to exist, when so  required,  the burden being upon those who affirm  their existence.

     Both  these  views were affirmed by  the  Constitution Bench  in  C.B.  Gautam V.  Union of India 1993 (1) SCC  78. Admittedly,  the ap     pellant was given no opportunity  of being heard before the decision was taken by the respondent- Section  authorities to withdraw the acquisition in exercise of  48 (1) of the Act.  Section 48 (1) of the Act  provides: 48.    Completion  of  acquisition   not  compulsory,   but compensation to be awarded when not completed.   (1) Except in the case provided for in Section 36, the Government shall be  at liberty to withdraw from the acquisition of any  land of which possession has not been taken.

     The  section does not in terms exclude the  principles of natural justice.  However, the section has been construed to  exclude  the  owners  right  to  be  heard  before  the acquisition  is  withdrawn.   This  is  because  the  owners grievances  are  redressable  under  Section  48  (2).   No irreparable  prejudice  is caused to the owner of  the  land and,  if  at  all  the  owner has  suffered  any  damage  in consequence of the acquisition proceedings or incurred costs in  relation  thereto, he will be paid compensation  thereof under  Section  48 (2) of the Act. [See:  Amar Nath  Ashram Trust Society V.  Governor of U.P 1988 1 SCC 591 at p.  596] .  [See:  also Special Land Acquisition Collector v.  Godrej Boyce  :  1988 1 SCR 590].  But as far as the beneficiary of the  acquisition is concerned there is no similar  statutory provision.   In  contrast  with   the  owners  position  the beneficiary  of  the acquisition may by withdrawal from  the acquisition   suffer   substantial   loss  without   redress particularly  when it may have deposited compensation  money towards  the  cost  of  the acquisition and  the  steps  for acquisition  under the Act have substantially been proceeded with.   An  opportunity  of  being   heard  may  allow   the beneficiary  not  only to counter the basis for  withdrawal, but also, if the circumstances permitted, to cure any defect or  shortcoming and fill any lacuna.  No reason has been put forward by the respondents to exclude the application of the principle  of natural justice to Section 48 (1) of the  Act. The decision in Larsen & Toubro which relied upon an earlier decision  in  Amarnath Ashram Trust Society and  Another  V. Governor  of  U.P.   and  Others  (supra)  to  hold  that  a beneficiary  has  a right to be heard before a  notification under  Section  48  (1)  is issued, does not  appear  to  be limited  to acquisition for companies under Part VII of  the Act  as  is  contended  by   the  respondents  although  the acquisition in that case had been made for a company for the

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purpose  of  setting up a housing colony.  Both  cases  have also  drawn a distinction between the rights of an owner and the  beneficiary of the acquisition to object to  withdrawal from the acquisition for the reasons noted earlier..  It may be noted that as in the case of the company, under Section 3 (f)(vi) the prior approval to the acquisition is required if an acquisition is made for the purpose of providing land for carrying  out, inter-alia, any housing scheme sponsored by a Society registered under the Society Registration Act, 1860. This  approval  must be made after adequate enquiry.   Again the issuance of the Notification under Section 4 is followed by  filing  and hearing of objections under Section 5 -A  by the  Collector.   With the publication of declaration  under Section  6,  the Collector is to take steps for  holding  an inquiry  under  Section  9 after giving notice  to  all  the persons  interested.   After  completing the  inquiry  under Section  11, the Collector is required to pass an Award with the  approval of the State government giving  (i) the  true area  of  the  land;   (ii) the compensation  which  in  his opinion should be allowed for the land;  and

     (iii) the apportionment of the said compensation among all  the  persons known or believed to be interested in  the land,  of  whom,  or of whose claims,  he  has  information, whether or not they have respectively appeared before him.

     All these steps had been taken in the Appellants case .  As said in Larsen & Toubro:  After having done all this, the  State Government cannot unilaterally and without notice to  the company withdraw from acquisition.  Opportunity  has to  be  given  to  the company to  show  cause  against  the proposed  action  of the State Government to  withdraw  from acquisition.

     A  distinction may perhaps be drawn with beneficiaries who do not bear the cost of acquisition as the appellant has done  in this case.  But in the circumstances of this  case, the  State  Government  could not have  withdrawn  from  the acquisition  without hearing the appellant.  This finding is sufficient  to decide the appeal in favour of the appellant. In  any event the decision to withdraw the acquisition under Section 48(1) is justiciable.  This Court in Amarnaths case said:   .  the decision of the Government to withdraw from acquisition  was  based upon a misconception of the  correct legal  position.   Such  a decision has to  be  regarded  as arbitrary  and not bona fide.  Particularly in a case  where as  a result of a decision taken by the Government the other party is likely to be prejudicially affected, the Government has  to  exercise its power bona fide and  not  arbitrarily. Even  though  Section 48 of the Act confers upon  the  State wide discretion it does not permit it to act in an arbitrary manner.   Though  the State cannot be compelled  to  acquire land  compulsorily  for a company its decision  to  withdraw from  acquisition can be challenged on the ground that power has  been  exercised  mala fide or in an  arbitrary  manner. Therefore,  we  cannot accept the submission of the  learned counsel  for  the  State that the discretion  of  the  State Government in this behalf is absolute and not justiciable at all.

     These  observations were noted with approval in Larsen@@                                                       JJJJJJ &  Toubro.(supra)  In the notification under  Section  48(1)@@ JJJJJJJJJJJJJJJJJ

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impugned  in this appeal no reason whatsoever has been given for  withdrawal of the acquisition.  All that said is:   In exercise  of  the  powers conferred by  Sub-section  (1)  of Section 48 of the Land Acquisition Act, 1984, (Central act 1 of  1894)  as amended by Karnataka Act No.  17 of 1961,  the Government of Karnataka hereby withdraw from the acquisition of  the  Land specified below in the schedule in respect  of which  a Notification No.  RD:177:AQT:91 dated 15th May 1992 issued  under  Section  6 of the Land  Acquisition  Act  was published  in Karnataka Gazette dated 21st May 1992 and  3rd September  1992  as required for public purpose, namely  for formation  and  distribution  to the  Members  of  Houseless Harijans Employees Association [R] Tumkur. In the affidavit affirmed on behalf of respondents, 1,3 and 4 on 3rd December@@                                        JJJJJJJJJJJJJJJJJJJJJ 1998  it is said that the decision to withdraw was taken  on@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ the  basis  of the opinion of the Law Department.   The  Law Department  had opined that the acquisition had been  sought to  be  made for a public purpose in terms of Section 3  (f) (vi)  of  the Act, which required the housing scheme  to  be sponsored  by  any  society registered under  the  Societies Registration  Act.   According  to  the  Law  Department,  a society  could be registered only in respect of the  objects specified  in  clauses  (a)  to  (g) of  Section  3  of  the Karnataka  Society  Registration Act.  None of  the  objects mentioned  in the Memorandum of Association of the appellant fell within these clauses of Section 3 of the State act.  In the  result,  the  acquisition  of land on  behalf  of  the Society  in question for the purpose of forming layouts  and distribution  of  sites  to  its   members  (which  are  not contemplated  under  Section  3 of the K.S.R.  Act)  is  not permissible.   Section   3(f)  of   the  Act  defines   the expressions  public  purposes  as  including,  inter-alia: (vi) the provision of land for carrying out any educational, housing,  health  or  slum  clearance  scheme  sponsored  by Government or by any authority established by Government for carrying out any such scheme, or, with the prior approval of the  appropriate  Government,  by a local  authority,  or  a society  registered  under the Societies  Registration  Act, 1860,  or under any corresponding law for the time being  in force  in  a  State, or a co-operative  society  within  the meaning  of  any law relating to co-operative societies  for the time being in force in any State;

     but   does  not  include   acquisition  of  land   for Companies.

     In  order  therefore that an acquisition may be for  a public purpose within the meaning of sub-section 3(f)(vi) as far  as the case before us is concerned, the acquisition (1) should  have  been  done  with the  prior  approval  of  the appropriate Government;  (2) must have provided for land for any  housing  scheme and (3) the housing scheme should  have been  sponsored by a Society registered under the  Societies Registration Act, 1860 or any other corresponding law in the State.   Of  these three requirements, according to the  Law Department,  the third requirement was lacking.  The opinion of  the  Law  Department and consequently the basis  of  the impugned  order  are  unacceptable   for  several   reasons. Admittedly  the appellant is registered under the  Karnataka Societies   Registration  Act.   What   appears  to  be  the contention  of  the respondents is that the appellant  could not  have  been  registered  under the  State  Act.   It  is

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nobodys  case that the registration of the appellant has in fact  been  withdrawn or cancelled under the Karnataka  Act. Section  3  of the Karnataka Act specifies the Societies  to which  the  Karnataka  Act applies.  The Societies  must  be formed  for any one or more of the seven objects  mentioned. The  last two objects mentioned in the Karnataka Act are  in fact  included  in  the  Memorandum of  Association  of  the appellant  as  being  two  of the aims and  objects  of  the appellant.   The opinion of the Law Department that none  of the  objects  of  the  Appellant  were  within  the  objects specified  in Section 3 was factually incorrect.  It has not been  shown that if some of the objects with which a Society is  established  are  invalid  and  others  are  valid,  the registration  of the Society is ipso facto vitiated.  On the contrary,  it  appears  from the records that  on  petitions being   filed   for   cancellation    of   the   appellants registration,  by letter dated 23rd March 1991, the District Registrar   did  not  cancel   the  registration  but  said, Therefore, it is hereby endorsed that the objects which are in  accordance with Section 3 of the said Act are valid  and remained  (sic) not valid. Thus, it cannot be asserted with any  certainty  that the appellant could not have  been  and cannot  continue  to be registered under the Karnataka  Act. It  is to be noted that under Section 8 (2) of the Karnataka Act, a society may be registered only after the Registrar is satisfied that all the requirements of the Act and the rules made thereunder have been complied with.  One cannot assume, that  the appellants case did not come within Section 3 (f) (vi)  of the Act.  It is therefore unnecessary to  determine whether there is a conflict between Section 3 (f)(vi) of the Act  and Section 3 of the Karnataka Act nor do we propose to decide  which of the two would prevail under Article 254  of the  Constitution.  Indeed the learned Single Judge found no impediment  in  an  acquisition for  the  appellant  despite Section  3  of  the Karnataka Act when he  said:   all  the members  of the Society belong to the weaker section of  the society  and  they do not have residential sites to  have  a roof  over  their  head.   When such being the  case  it  is appropriate  for  the  State  Government to  take  steps  to acquire  lands  having  got   deposited  substantial  amount towards  the  cost  of acquisition with a  view  to  acquire certain  extent of land to provide residential sites to  the members  of  the  society.  Therefore, in the event  if  the petitioner society come forward with a scheme and submit the same  to the State Government, the State Government may take necessary  steps  to initiate acquisition proceedings  after sanctioning   the   prior    approval    provided   if   the petitioner-society does not withdraw the amount so deposited by it for the purpose of acquisition of the land.

     In  fact  neither  the Single Judge nor  the  Division Bench  of the High Court appear to have accepted this reason as  ground  for withdrawing the  acquisition.   Furthermore, this  very objection had been considered at every level  and rejected  on 14th November 1991 after which the Notification under  Section 6 was issued and published declaring that the land was required for a public purpose.  Once this was done, under sub-Section (3) of Section 6, the said declaration was conclusive  evidence  that the land is needed for a  public purpose...   The  stage  for   questioning  the  public purpose  aspect  of the acquisition is over and  cannot  be reopened  by the State nor can the respondents/owners  raise this  issue  without  challenging   the  Notification  under Section  6.  They had challenged it under Art.  226 but then withdrew  their  writ petition.  In this context it  may  be

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noted  that  the  appellants  allegation  that  the  sudden volte-face  of  the  State Government was by reason  of  the pressure  brought by respondent No.  2 appears to have  some substance.   Although the respondent No.  2, both before the High  Court  and  before us, denied his involvement  in  the matter,  the  records reveal that at least by  letter  dated 30th December 1991, the respondent No.  2 had written to the Revenue  Department espousing the cause of respondent owners seeking  withdrawal of the acquisition.  The basis on  which the  learned  Single  Judge dismissed the  appellants  writ petition  was that there was no approval of the  appropriate Government  to  the acquisition, namely, the absence of  the third  factor noted above.  This was not the ground on which withdrawal from the acquisition had been made and it was not open  to the State Government to justify its decision on any other  ground.  As held by this Court in Mohinder Singh Gill and  Another v.  The Chief Election Commissioner, New  Delhi and  Others  1978  (1)  SCC  405 at  p.   417:   ..when  a statutory  functionary  makes  an  order  based  on  certain grounds,  its  validity  must be judged by  the  reasons  so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise.  Otherwise, an order bad in the  beginning may, by the time it comes to Court on account of  a  challenge, get validated by additional grounds  later brought out.

     Besides,  what had been stated in the affidavit of the State-  respondents  is   the petitioner  society  has  not submitted  any  housing scheme and as such there  could  not have  been  prior approval from the Government.   In  other words, the fact of prior approval has not been denied.  What is  said is because no housing scheme had been submitted  by the  appellant  there could not have been prior  approval. No  finding  was however given by the Single Judge on  this. All  that  was  said  was:   The  learned  Govt.   Advocate submitted  that  in  the  instant case there  is  no  scheme submitted  by  the society and there is no such approval  of the State Government.  If that is so, the entire acquisition proceedings initiated treating it as a public purpose itself is vitiated.

     The  Division  Bench did not at all address itself  to this aspect of the matter.  In the absence of any finding on the  existence  of the scheme, the submission of  the  State Government  regarding  prior  approval   should  have   been rejected.   In  fact it appears from the records  a  housing scheme  had been submitted by the appellant.  Apart from the lay  out  plan, the number, the sizes and positions  of  the plots,  the  user,  the number of allottees,  the  basis  of allotment, the finances for the purposes, the particulars of the membership had all been submitted by the appellant.  The organisational set up to administer the scheme was indicated in  its  Memorandum of Association, which also ensures  that the land would be utilised for the purposes for which it was being   acquired.   The  clearance  of  the  Town   Planning Authority  had been obtained.  The particulars were verified and  found satisfactory in all respects by the  authorities. Nothing  more  could be asked for from the propounder  of  a housing  scheme.   The respondents then submitted  that  the letter  dated  15th  March, 1991 did not amount to  a  prior approval  because ( i ) it did not indicate that the  scheme was approved (ii) it was not in accordance with Art.  166 of the Constitution and (iii ) the Government could not rely on material collected by it before the first notification under Section  4(1)  of the Act was issued.  No form of the  prior

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approval required under Section 3(f)(vi) of the Act has been specified  in  the  Act itself.  What the section  in  terms requires  is  the prior approval to the acquisition for  the purpose  specified.   This  was expressly given.   That  the letter  dated 15.3.91 was issued by the Government is not in dispute.   The  lack of compliance with Article 166 did  not render  it a nullity.  As held by the Constitution Bench  of this  Court  in  1964 (6) SCR 368:   it  is,  therefore, settled  law that provisions of Art.166 of the  Constitution are  only  directory and not mandatory in character and,  if they  are  not  complied with, it can be  established  as  a question  of fact that the impugned order was issued in fact by  the  State  Government or the  Governor...  [See  also Dattatreya v.  The State of Bombay (1952 SCR 612) Major E.G. Barsay v.  State of Bombay:  AIR (1961) SC 1762]

     No doubt, in Gulabra v.  State of Gujarat 1996 (2) SCC 26,  it was held that a decision of Revenue Minister was not an  order  of the Government because of non compliance  with Article  166.  But in that case there was a conflict between the  Revenue  Department and the Urban Development  &  Urban Housing Department whether proceedings under S.  4(1) of the Act  were to be dropped or not.  The Revenue Minister was of the  view that it should be dropped.  The Urban  Development Department  disputed this.  The Rules of Business framed  by the  State under Art.  166(3) specifically provided that  in such  a controversy , the matter was to be submitted to  the Chief Minister for placing before the Cabinet.  This was not done  nor was the order of the Revenue Minister communicated to  the  appropriate  authority.    The  Revenue  Ministers decision  which  was  noted  on the file was  sought  to  be enforced  by  the owners.  This was negatived by the  Court. The  decision  is  factually distinguishable and  cannot  be construed  as  upsetting  the  settled   law  as  noted   in Chitralekhas  case.   The  approval  in  this  case  was  a culmination of a lengthy exercise which started in 1983 with two  prior  abortive attempts to complete  the  acquisition. This  is  evident  from  the language of  the  letter  dated 15.3.1991  itself.   The  genuineness  of the  need  of  the appellant  has  not  been doubted even by  the  High  Court, unlike the case of HMT House Building Cooperative Society v. Syed  Khader & Ors.  (1995)2 SCC 677 where it was found that the  Government had acted at the instance of a middleman and the  acquisition  was  sought for  the  ultimate  commercial utilization  of the land.  But, the respondents contend, the materials on which the appellant sought to rely to show that the prior approval in 1991 was granted after being satisfied about  the  housing  scheme,  were submitted  prior  to  the earlier  notifications under Section 4(1).  According to the respondents, with the dropping of the earlier notifications, the  entire  proceedings  on the basis of  which  they  were issued  became non est.  They have cited State of Gujarat V. Patel Chaturbhai Narsibhai 1975 1 SCC 583 in support of this submission.   The owner- respondents further submission was that  the acquisition was commenced under Part VII and  that the  material  gathered  may  have   been  relevant  for  an acquisition  under Part VII but could not be relied upon for proceedings  under Part II.  These are not pleas which  were taken  by  the respondents at any stage.  Both issues  raise@@                            JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ mixed  questions  of law and fact.  As far as  questions  of@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJ fact are involved we cannot entertain them and as principles of  law  both submissions are untenable.   Patel  Chaturbhai Nasirbhai  (supra)  cited  by  the  respondents  dealt  with

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acquisition for a company in accordance with Part VII of the Act  and the Land Acquisition (Companies) Rules, 1963.  Part VII of the Act contains sections relevant to the acquisition of land for Companies, namely, Section 38-A to Section 44-B. Section  39 provides that the procedure commencing with  the declaration  under  Section  6   and  terminating  with  the distribution  of  compensation  and possession of  the  land would  not  put into force to acquire land for  any  company under  Part-VII  without:  (i) the previous consent  of  the appropriate Government, and

     (ii) execution of an agreement between the company and the appropriate Government under Section 41.

     It  is only after both the requirements are  satisfied that  further  steps  in  the acquisition of  land  for  the company  can  be taken.  In Patel Chaturbhai  Narsibhai  and Others(supra)  the first notification under Section 4 of the Act  was  issued  on 4th March 1961.  After an  inquiry  was held, the State Government gave its consent.  On 22nd August 1961  an  agreement  was  entered  into  between  the  State Government  and  the  Company.  On 9th July 1965,  the  Land Acquisition  (Gujarat  Unification and Amendment) Act,  1965 came  into  force  amending  Section 39  of  the  Act.   The Notification  dated  4th  March 1961 was cancelled  on  28th September  1965.   The next day a fresh  notification  under Section  4  was issued.  The dispute before this  Court  was whether  the  conditions  for  the issuance  of  the  second Notification  had  been  satisfied.   Admittedly,  a  second agreement was entered into between the Company and the State Government after the second Notification under Section 4 (1) on  13th  January  1969  i.e.    subsequent  to  the  second Notification.   The State Government sought to rely upon the earlier   agreement  dated  22nd   August  1961.   This  was negatived.   It  was  said:  The enquiry  pursuant  to  the notifications  in  the year 1961 and previous to  the  fresh notifications  in  1965  is  of no effect  in  law  for  two principal  reasons.   First,  the   1961  notification   was cancelled, and, therefore, all steps taken thereunder became ineffective.   Second, the enquiry under Rule 4 in 1961  was held   without   giving  opportunity  to  the   land   owner respondent, and, therefore, the enquiry is invalid in law.

     To  begin  with  as  far  as the  case  before  us  is concerned  there  is  no basis for the submission  that  the acquisition  was  originally commenced under Part VII.   The first Notification is not on record.  The State has given no reason  for  destruction  of the file when  the  matter  was pending for consideration before this Court.  However, after the publication of the first notification under Section 4(1) on 6th August 1987 the respondents-owners had objected.  The objections  included a submission that the Society is not  a registered  Society.   The  second objection  was  that  the acquisition  was not for a public purpose.  In dealing  with these  objections  by letter dated 12th /19th November  1987 written by the Assistant Commissioner, Tumkur to the Revenue Commissioner   it  was  affirmed   that  the  appellant  was registered  and the purpose of acquisition is housing.   As such  the proposed acquisition falls under Section  3(e)(vi) read  with  Section 3 (e) (vii).  Presumably the  Assistant Commissioner  meant Section 3 (f) (vi) and 3(f) (vii).   The respondents  then relied upon a letter dated 27th March 1987 sent  by  the  Under Secretary, Revenue  Department  to  the Special  Deputy Commissioner, Tumkur District, Tumkur  which reads  as  follows:   While  returning the  records,  I  am

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directed  to  convey the approval of Government to  initiate acquisition  proceedings  under Karnataka  Land  Acquisition (Company)  Rules to acquire an extent of 15-00 acres of land in  S.No.49  of Maralur village, Tumkur taluk in  favour  of State Government Employees Association, Tumkur.

     Whatever  may be said in the internal  correspondence, there  is  no  evidence that the matter was  proceeded  with under  Part VII at all.  After the first notification  under Section 4(1) was issued by letter dated 16th April 1988 sent by  the Under Secretary to the Deputy Commissioner,  Tumkur, it  was stated:  While enclosing the records received  from the  Assistant  Commissioner, Tumkur under his letter  cited above,   I   am  directed  to   request  you  to  send   the recommendation  of the District Level Committee  constituted in G.O.No.  RD 193 AQW 185, dated 20.1.1986, keeping in view the  guidelines  issued  in Circular of  even  number  dated 23.4.1986,  including the existent of land to be acquired to provide house sites to its members.

     It  was pursuant to this directive that enquiries were held  and  the District and State Level committees  enquired into  and verified the appellants case before  recommending it.   The material was relevant not only to the question  of public purpose under Section 4 but could also form the basis of  an approval under Section 3 (f)(vi).  It is not disputed that  the  material was considered when the second  and  the third  notifications under Section 4(1) were issued and both these  Notifications clearly state that the acquisition  was being  made  for a public purpose and not under Part VII  of the  Act.  Therefore, even if the acquisition was originally commenced  under Part-VII it was continued under Part II.  A converse situation occurred in Amarnath Ashram Trust Society (supra), where although the notification under Section 4 (1) was  issued  for  a public purpose,  the  declaration  under Section   6  showed  that  it   was  under  Part  VII.   The declaration  clearly referred to the inquiry made under Rule 4  of  the Land Acquisition (Companies) Rules, 1963 and  the agreement entered into between the appellant-Society and the State.  Moreover, it was not pleaded by the State before the High Court that the acquisition was for a public purpose and not  under  Chapter VII of the Act.  Therefore, it was  held that it was not open to the counsel for the state to raise a contention which was contrary to the case pleaded before the High Court.  In this case the earlier notifications were not cancelled  nor is there any question of any agreement  under Section  41  being superseded by another.  No further  steps could  be taken on the earlier notifications only because of administrative  delay which crossed the period of limitation provided under Section 6(1)(A).  While the proceedings under Section 4 (1) may come to an end as a matter of law, it does not mean that the material on the basis of which the earlier Notification was issued ceased to exist as a matter of fact. Section  4  (1)  read  with Section 3 (f) (vi)  of  the  Act indicates  that  there  are  two separate  functions  to  be performed  by the State Government.  Under Section 4 (1)  it must  prima  facie  come  to the conclusion  that  the  land proposed to be acquired is required for a public purpose and under  Section 3 (f)(vi), such tentative conclusion must  be coupled  with specific approval to acquire the land for  the purposes specified for the benefit of the registered society or  co- operative society, as the case may be.  The Act does not  specify  the  material on which  either  the  tentative conclusion  to  Section  4  (1) or  approval  under  Section 3(f)(vi) are to be based.  In M/s Fomento Resorts and Hotels

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Ltd.   V.  Gustavo Ranato DA Cruz Pinto and Others 1985  (2) SCC  152  it was held that the view of the  Government  that land  is  needed either for public purpose or for a  company may  be based either on independent enquiry or from  reports and  information received by the government or even from  an application  by the company concerned.  The same sources may provide  information  for  granting   prior  approval  under Section  3(f)  (vi).  There is no prohibition on  the  State Government acting on the basis of material already on record provided  the material is sufficient, relevant and  genuine. The  material  in this case although collected prior to  the issuance  of  the  second  Notification was  all  these  and according  to  the  letter  of   approval,  the  matter  was minutely  examined by the State Government in consultation with the Law Department before granting the approval for the third  and final notification in 1991.  The final submission of  the  owner respondents was that the present  acquisition was  in fact being made under Part VII and that none of  the provisions  in  Part-VII  had   been  followed.   The  third Notification  ex facie states that it was issued for  public purposes  under  Part  II of the Act.  The  finding  of  the learned  Single  Judge  also  was:  it is  clear  that  the acquisition  proceedings are initiated under Part II of  the Act  and  not under Part VII of the Act.  Furthermore,  the only  stumbling-block  raised by the  respondent-owners  all along  was  the  issue  of the applicability  of  Section  3 (f)(vi)  only because the acquisition was under Part II.  It was  commenced  and  continued as  such.   The  respondents argument  that the procedure followed was a hybrid procedure of  Part II and Part VII, therefore, is erroneous.  From all this,  the  ultimate  position  which emerges  is  that  the acquisition   in  favour  of   the  appellant  was  properly initiated by publication of the Notification under Section 4 (1)  and  by  the declaration issued under Section  6.   The withdrawal  of  the  acquisition under Section  48  (1)  was vitiated  not  only because the appellant was not heard  but also  because the reason for withdrawal was wrong.  The High Court  erred  in dismissing the appellants  writ  petition. The  decision  of the High Court is accordingly  set  aside. The impugned Notification under Section 48(1) is quashed and the appeal is allowed with costs.