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PETITIONER: STATE OF ASSAM & ORS.

       Vs.

RESPONDENT: BANSHIDHAR SHEWBHAGWAN & CO.

DATE OF JUDGMENT01/09/1981

BENCH: VARADARAJAN, A. (J) BENCH: VARADARAJAN, A. (J) TULZAPURKAR, V.D.

CITATION:  1981 AIR 1957            1982 SCR  (1) 554  1981 SCC  (4) 283

ACT:      Lease of  Government land-Land  leased  to  respondent- Respondent developed  the land  at great  expense-Lease  not renewed-Government claimed  that land was needed for defence purposes-Later lease sought to be auctioned-Land required by Government for same purpose-Action whether mala fide-Auction whether for a collateral purpose.

HEADNOTE:      On a  part of  a large  area of  land acquired  by  the Government during  World War II an aerodrome was constructed and on  the remaining  300 odd acres which remained unused a thick jungle grew over the years.      Pursuant to  the decision of the Government of India to lease out  the unused  portion of  the land,  the respondent entered into  an agreement  with  the  Government  and  took possession of  the land  after paying  one year  s  rent  in advance.      The respondent alleged that, after taking possession of the land,  he had spent a large sum of money in clearing the jungle and  making it  a well  managed tea  garden. He  also alleged that the concerned Government officials were putting off execution  of the  lease deed  on some  pretext  or  the other. Having had no satisfactory reply from the Government, the respondent  moved the  Government  of  India  through  a Member of  Parliament who  was informed  that the  land  was required for  defence purposes  and that  it  would  not  be possible to extend the lease. A few months later the Defence Minister  informed   the  Member   of  Parliament  that  the Government had decided to auction the lease-hold right on an annual basis  in order  that possession of the land could be resumed for  defence purposes  at short notice. A notice for public auction was thereafter issued .      The respondent  filed a writ petition in the High Court and  obtained  an  order  restraining  the  appellants  from auctioning the land.      In  the  meantime  the  respondent  filed  title  suits against the Government.      The respondent  contended that  the auction  notice was malafide because  having found  that  the  jungle  had  been cleared and  the land had been developed into a workable tea garden, the  Government wished  to lease  the  land  to  the

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highest bidder  for getting a large amount of money and that this was  for a  collateral purpose.’  The High Court upheld this contention. 555      Allowing the appeal, ^      HELD: If  any authority  exercised in  bad faith or for collateral purpose  power conferred on it by law such action would be struck down as an abuse of power and a fraud on the statute. [559 E-F]      In the  present case  however there is much evidence on record to  establish that there was no lack of bona fides OD the part  of the Government and that the action sought to be taken by  it was  not for  a  collateral  purpose.  Had  the attention of  the High  Court been  drawn to the material on record, there was no possibility of the High Court coming to the conclusion that it did.      Although in 1962 the Deputy Minister for Defence in the first  instance  informed  the  member  of  Parliament,  who interceded on  behalf of  the respondent  that the  land was required for  defence purposes  and for that reason it would not be  possible to  extend the then current lease but later stated that  it was  decided to  lease out  the land  to the highest bidder  by way  of public  auction on a yearly basis and the Deputy Commissioner in the affidavit had stated that the land  was not  required for defence purposes until 1964, the need  for defence  purposes did  arise when the war with Pakistan broke  out in 1965. It could not, therefore, h said that the  Government did  not  need  the  land  for  defence purposes  in   1966  when  the  order  was  issued.  Defence requirements depend on many unforeseeable factors. [559 F-H]      That apart,  the appellants  did state  right from  the beginning that  the lease  was subject to the condition that whenever the Government needed the land for defence purposes it  would   be  determined  by  notice  without  payment  of compensation and  that the Government was not bound to renew the lease. [560 F-G]      There is,  therefore, nothing to support the Finding of the High Court that the Government had never put forward the plea that the land would be required for defence purposes at any stage in the title suits and that it was putting forward such a  case only as a ruse to auction the land for a larger amount of rent. [561H]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 321 (N) of 1970.      From the  judgment and  order dated the 30th July, 1968 of the  Assam & Nagaland High Court at Gauhati in Civil Rule No. 420 of 1966.      S.K. Nandy and Krishna Prosad for the Appellants.      S.N. Choudhary for the Respondents.      The Judgment of the Court was delivered by      VARADARAJAN, J.  This appeal by special leave is by the respondents in  Civil Rule  420 of 1966 against the Judgment and order dated 30th July, 1968 passed by the Division Bench of the 556 High Court of Assam and Nagaland, allowing the Writ petition with no  order as  to costs.  That writ  petition was  filed under Art. 226 of the Constitution for quashing the order of requisition issued  by the  Deputy Commissioner,  Lakhmipur- Dibrugarh, the second appellant in this appeal and the first

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respondent in the writ petition-under Memo No. LA/27511-15/R dated 25.10.1966.  The Memo  was issued  in exercise  of the powers conferred  by s.  29 (i) of the Defence of India Act, 1962  (51  of  1962)  read  with  the  Notification  of  the Government of  India, Ministry  of Home Affairs No.S.O. 1888 dated 10th June, 1965 in respect of the properties described in the schedule attached thereto viz. Sookerating Tea Estate and Budla  Beta Tea  Estates,  situate  in  Dum-Duma,  Mauza Lakhmipur  District  on  the  ground  that  the  lands  were necessary for  securing  the  defence  of  the  country  and efficient conduct of military operations.      During the  Second World War, in 1940 the Government of India acquired  for defence  purposes a  part of Sookerating Tea Estate  with its adjoining lands measuring in all 769.20 acres for  constructing an  air field.  The  air  field  was constructed over  an area  of 469 acres and on the remaining 300.20 acres  there were  tea bushes which were growing wild and overgrown  with thick  jungles. After  the war was over, the area  on which  the air  field had been constructed viz. 469 acres  was transferred  to the  State Government for its use. In  the writ petition it was stated that area was still Lying unused.  The Government  of India  wanted to lease out the said  300.20 acres to some established tea planters with a  view   to  earn   foreign  exchange.  The  respondent,  a registered partnership  firm owning  the Bagrodia Tea Estate negotiated with  the Estates  Military officer, Assam Circle at Shillong  and the  Ministry of  . Defence,  Government of India and  entered into an agreement of lease dated 2.3.1962 in respect  of the  land on  a rent of Rs. 6304.20 per annum for a term of one year renewable for a period of one year at a time  if the  land was  not required  by the  lessor.  The respondent took  possession of  the land  on 10.3.1962 after paying the  annual rent  in  advance  on  2.3.1962.  It  was alleged in  the writ petition that the respondent thereafter improved the  land at  a cost  of Rs. 1,75,000/- and made it into a well managed tea garden. The Military Estates officer was putting  off the  execution of  the lease  deed on  some pretext or  the other,  though the  respondent had deposited the requisite  stamp papers  for the  execution of the lease deed. When the respondent approached the Government of India through a  Member of  Parliament, the  Deputy  Minister  for Defence 557 informed the  Member  of  Parliament  by  his  letter  dated 20.12.1962 that  the land  was required for defence purposes and that  it would  not be  possible to  extend the  current lease. Subsequently the Defence Minister informed the Member of Parliament  by his  letter dated 1.4.1963 that as several tea planters  have evinced  interest in  the estate  it  was decided to  auction the  leasehold right  in the  land on an annual basis subject to the condition that the land might be resumed for  defence purposes at short notice. No action was taken on  the respondent’s  request made  on 25  1.1963  for renewal of  the lease.  But  the  Military  Estate  officer, Jorhat  Circle,  the  4th  appellant,  issued  a  notice  on 20.3.1963 for  leasing the  land  for  one  year  by  public auction. The  respondent filed  a writ  petition in the High Court and  obtained rule  nisi as  well as  an interim order restraining the  appellants from  giving effect  to the said notice dated 20.3.1963. The petition filed by the appellants on 28.5.1963  for restraining  the respondent  from plucking tea leaves was rejected. The respondent filed Title Suit No. 30 of  1963 in  the Court  of the  Subordinate Judge,  Upper Assam Districts,  Dibrugarh on 18.7.1963 for certain reliefs including  confirmation   of  possession  of  the  land  and

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specific performance  of the agreement to lease and obtained an  interim.  injunction  restraining  the  appellants  from interfering with  the  possession  of  the  land.  The  writ petition was not pressed in view of the institution of Title Suit No.  30 of 1963 by the respondent. The respondent filed Title Suits  Nos. 6 of 1964 and 13 of 1965 in the same Court praying for  the same  reliefs in  respect of the years 1964 and 1965  and obtained  temporary injunction. The respondent filed Title  Suit No.  4 of  1966 in  the same court for the same relief.  All those  suits were  pending on  the date of institution of  the present  writ petition.  The  respondent received the  impugned order  of requisition  on  26.10.1966 from the second appellant and Subsequently filed the present writ petition for the aforesaid reliefs on several grounds.      The appellants  in this appeal and other respondents in the writ  petition filed  counter  affidavits  opposing  the petition and  contending inter  alia that  the  question  of requisition of  the  land  for  defence  purposes  has  been decided upon  by the  Government of  India and  the impugned order is  bonafide  and  has  been  made  by  the  competent authority under the Defence of India Act.      Two contentions were urged before the Division Bench of the High  Court on  behalf of  the respondent. The first was that  the   second  appellant,   the  Deputy   Commissioner, Dibrugarh, who has 558 issued the  impugned order  has stated  in the order that in his opinion  it was  necessary to  requisition the property, and it was urged before the learned Judges of the High Court that the  Deputy Commissioner  was not competent to form the opinion.      Section 29 (I) of the Defence of India Act, 1962 (Sl of 1962) reads:           (1) "Notwithstanding  anything  contained  in  any      other law  for the  time being  in  force,  if  in  the      opinion  of   the  Central   Government  or  the  State      Government it  is necessary  or expedient  so to do for      securing the  defence of  India, civil  defence, public      safety,  maintenance   of  public  order  or  efficient      conduct of  Military  operations,  or  for  maintaining      supplies and  services essential  to the  life  of  the      Community that  Government  may  by  order  in  writing      requisition any  immovable property  and may  make such      further orders  as appear  to  that  Government  to  be      necessary  or   expedient  in   connection   with   the      requisitioning:           Provided that no property or part thereof which is      exclusively used  by the  public for  religious worship      shall be requisitioned."      Clauses (a),  (b) and  (c)  of  Section  40(I)  of  the Defence of  India Act provide for delegation of the power or duty under the Act or by any rule made thereunder and read:      Section 40 Power to delegate:           (i)  The Central  Government may  by order, direct                that any  power or  duty which by this Act or                by any  rule made under this Act is conferred                or imposed upon the Central Government shall,                in  such   circumstances   and   under   such                conditions, if  any, as  may be  specified in                the  direction  be  exercised  or  discharged                also,                (a)  by any  officer or authority subordinate                     to the Central Government, or                (b)  whether or not the power or duty relates                     to a  matter with  respect  to  which  a

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                   State  Legislature  has  power  to  make                     laws, by any State 559                     Government  or   by   any   officer   or                     authority    subordinate     to     such                     Government, or                (c)  by any other authority."      The opinion  that the  land is  necessary  for  defence purposes can  be formed  in view  of s.  40(I)  (c)  of  the Defcnce of  India Act  by any authority to whom the power to requisition under  s. 29  (1) of that Act has been delegated by the  Government of  India. The  Ministry of  Home Affairs had, by Notification No. S.O. 1888 dated 10.6.1965 published in the  Gazette of  India (Extraordinary)  dated  11.6.1965, delegated the  power conferred  by s.  29 of  the Act to all Collectors,  District   Magistrates,   Additional   District Magistrates and  Deputy Commissioners  in the States and all Political officers  in the  North Eastern  Front  Area.  The learned  Judges  of  the  High  Court  have  held  that  the Notification  is  valid  and  that  the  delegation  can  be unrestricted and found the first contention to be untenable. No argument  was advanced  before us  by learned counsel for the respondent  in regard  to  that  contention.  The  first contention has, therefore, to be held to be untenable.      The second  contention  urged  before  the  High  Court successfully on  behalf  of  the  respondent  was  that  the impugned order  of requisition  is malafide. There can be no doubt that if any authority exercised any power conferred on him by  law in bad faith or for collateral purpose, it is an abuse of  power and  a fraud  on the statute. In such a case there can  be no difficulty in striking down that act of the authority by the issue of an appropriate writ under Art. 226 of the Constitution. It is true that the Deputy Minister for Defence informed  the Member  of Parliament  who appears  to have been  pleading for  the respondent  by his letter dated 20.12.1962 (annexure  ’C’ to  the writ  petition)  that  the current lease  of the land could not be extended because the land was  required for  defence purposes  and  that  in  the subsequent letter  dated 1.4.1963  (annexure ’D’ to the writ petition) the  then Minister  for Defence  had informed  the said Member  of Parliament  that since  several tea planters have evinced  interest in the land it would be in the public interest to  auction the  leasehold right  only on an yearly basis subject  to the condition that the land can be resumed at short  notice for  defence purposes. In his affidavit the Deputy Commissioner,  Lakhimpur, the  second  appellant  has stated that  the land  was not required for defence purposes until 1964  and that  the need  for defence  purposes  arose thereafter and the impugned order was issued. 560 It must be noted in this connection that it was not disputed before us  that the  war with Pakistan started in June 1965. This Court  could even take judicial notice of that fact The impugned  requisition   order  was   passed  on  25.10.1966. Therefore, it cannot be stated that there was no need of the land for defence purposes in October 1966 from the mere fact that Deputy  Minister for  Defence had  stated in his letter dated 20  12.1962 referred  to above  that the current lease could not  be extended  because the  land was  required  for defence purposes  and the Minister for Defence had stated in his letter  dated  1.4.1963,  referred  to  above,  that  as several tea  planters have  evinced interest  in the land it would be  in the  public interest  to auction  the leasehold right in  the land  on a  yearly basis  alone subject to the condition that  it can  be resumed  at a  short  notice  for

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defence purposes.  That letter  of the  Minister for Defence does not  altogether rule  out the  possibility of  the land being required  for defence  purposes at  any time and being made available  for those  purposes at short notice. Defence requirements may  change from  time to  time depending  upon various factors  including intelligence  reports  about  the enemy’s movements  and preparations  for war. The High Court has held in favour of the respondent on the question of want of bonafides on the part of the appellants on the basis that in the  aforesaid title suits filed by the respondent it was not pleaded by the appellants that the land was required for defence purposes.  The learned  Judges  of  the  High  Court appear to  have accepted  the submission made before them on behalf of  the respondent  in this  appeal that no such plea had been raised in the pleadings in the title suits filed by the respondent.  That submission  is incorrect,  and  it  is unfortunate that the attention of the learned Judges had not been invited  to the material on record to ., show that such a contention was in fact put forward by the 4th appellant in his pleading  in the  title suits.  In  the  auction  notice (annexure ’E’) dated 20.3.1963 itself it was stated that the lease will  be subject  to the  condition that  whenever the Government needs  the land  for defence  purposes it will be determined by  issue of  notice giving  30 days time without payment of  any compensation. In the written statement dated 17.7.1965 filed by the 4th appellant in the Title Suit No. 6 of 1965,  it was stated in respect of the allegation made in para 26  of the  plaint in  that suit that since the land is required for defence purposes the defendant was not bound to renew the  lease and  that even  in Title Suit No. 6 of 1964 the defendants  have filed  written statement contesting the claim of  the respondent/plaintiff.  It was  also stated  in that written  statement in regard to the allegations made in para 11 of the plaint that the 561 land is  required for  defence purposes.  In regard  to  the allegations in  paragraph 26  of the plaint it was contended in the  written statement  that the  land  is  required  for defence purposes  and  that  any  lease  under  the  present emergency would  be detrimental  to  the  interests  of  the defence of  the country. Even in the counter affidavit dated 17.7.1965 filed  in the  application for  interim injunction moved in the Title Suit No. 15 of 1965 the 4th appellant had stated that  the land  is required for defence purposes, and there is no question of holding any auction for lease of the land, that if the order of interim injunction is not vacated the defence  preparation of  the country will be hampered as the land  is urgently  needed for  defence purposes  and the interest of the nation will suffer, that no irreparable loss or damage  which cannot be compensated in money would result from vacating  the injunction  and that  on the  other  hand denying the  use of  the land  for defence  purposes at this critical  juncture  would  cause  irreparable  loss  to  the Government and  the  nation  as  a  whole.  In  the  written statement dated  22.6.1965 filed in Title Suit No. 4 of 1966 the 4th appellant had stated with regard to allegations made in para  11 of  the plaint that it is asserted that the land is bonafide  required for  defence purposes. Thus it is seen from the  materials on  record that  at least in Title Suits Nos. 15  of 1965  and 4  of 1966, the plea that the land was required urgently  for defence purposes was taken by the 4th appellant who appears to have put forward the defence of the appellants in  this appeal as a whole. The learned judges of the High  Court were,  therefore, not  right in observing in their judgment  that the  intention of  the Government is to

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lease the  land to the highest bidder in the hope of getting a large  amount of money because the land had been developed into a  working tea  garden, that the purpose cannot be said to be  bonafide and  that it  must be  held that the land is being requisitioned  only for  collateral purposes. The only basis for  this inference  of the learned Judges of the High Court is the supposed failure of the defendants in the title suits filed by the respondent to take the plea that the land is required  for defence purposes. That basis being found to be wrong  and unavailable.  it is not possible to agree with the learned Judges of the High Court that the requirement of the  land   for  defence  purposes  was  not  bonafide.  The Government of  India whose  case the  4th appellant  had put forward in  the respondent’s  title suits as mentioned above is the  most competent  authority to  know when the need for defence purposes  will arise  or has arisen, and there is no material on  record to  hold in  this case that the land was not required  on the  date of  impugned requisition bonafide for defence  purposes and  that the  appellants were putting forward such 562 a case  in the  impugned order only as a ruse to auction the land for larger amount of rent. Under these circumstances we find ourselves  unable to uphold the judgment of the learned Judges of  the High  Court. We  accordingly allow the appeal with costs and dismiss the writ petition. P.B.R.                                 Appeal allowed. 563