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PETITIONER: STATE OF GUJARAT & ANOTHER

       Vs.

RESPONDENT: SANKALCHAND KHODIDAS PATEL(DEAD) BY L.Rs.

DATE OF JUDGMENT09/11/1977

BENCH: SHINGAL, P.N. BENCH: SHINGAL, P.N. UNTWALIA, N.L.

CITATION:  1978 AIR  266            1978 SCR  (2) 178  1977 SCC  (4) 590

ACT: Land  Acquisition Act 1894-Section 4 and  6-Public  purpose- Abandonment   of  intention  to  contribute  part   of   the compensation  to  he awarded--Whether High  Court  in  first appeal by deciding a question without any pleading and issue can set aside the judgment of trial court.

HEADNOTE: The State of Gujarat issued a notification under s. 4 of the Land  Acquisition  Act  on 23-5-1958.   The  public  purpose mentioned  was  for  the  construction  of  houses  for  co- operative society.  An erratum was issued pointing out  that the  Co-operative Society was of the backward class  people. Thereafter, notification under s. 6 was issued on  13-8-1960 in which Also it was declared that the land was resumed  for the  public purpose of providing housing facilities for  the backward class people.  The respondent filed a suit on  8-2- 1961, challenging the validity of the notification under  s. 4 and 6 and praying for perpetual injunction.  The  City Civil Court dismissed the suit.  The High  Court, however, allowed the respondent’s appeal on the ground  that the  acquisition  was not for a public  purpose  within  the meaning of s. 6 of the Act as the intention declared by  the Government  to pay the amount of subsidy in respect  of  the acquisition was, by necessary implication, abandoned. Allowing the appeal by certificate, HELD : (1) Before the trial court no plea was taken that the appellant  abandoned  its  intention  to  pay  part  of  the compensation  to  be awarded for the  acquisition.   It  was therefore  not permissible for the High Court to decide  the controversy  on a plea which was not taken at all and  which was  not the subject matter of any issue at the  trial.   In fact  the six contentions raised before the High Court  also did not include the question of abandonment.  The High Court therefore  committed an error of law in deciding the  appeal on  the finding of abandonment of the original intention  of the  State  Government to pay a part  of  the  compensation. Even otherwise there was no real basis for the High  Court’s finding about the abandonment of the intention of the  State Government to pay a part of the compensation. [180 B-D] (2)The  High  Court  committed obvious  error  of  law  in arriving at its finding an(.] its finding of fact could  not

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be sustained. [180 D] (3)The  High  Court  was  wrong in  relying  on  the  non- publication  of  the award because, as early  as  1961,  the respondent  had  filed a suit and an order was made  by  the trial  court restraining the appellants from disturbing  and obstructing the possession of the respondent.  The  evidence clearly  showed that the State Government had taken a  clear decision  to pay a part of the compensation for the cost  of acquisition.   The  fact that the- State had  preferred  the present appeal ’clearly showed that it had not abandoned its intention  to make the acquisition on payment of a  part  of the compensation out of public revenue. [180 F-G, 182 D-E]

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 177 of 1973. From  the Judgment and Decree dated the  17th/18th  February 1972  of the Gujarat High Court in First Appeal No.  275  of 1966. S.   T.  Desai,  P.  H.  Parekh and M.  N.  Shroff  for  the Appellants. D.   V.  Patel,  Vasuben P. Shah, S. K.  Dholakia  and  Raju Ramachandran for the Respondents. Hamid Kureshi for the Intervener 179 The Judgment of the Court was delivered by SHINGHAL  J.,-This  is an appeal by the defendant  State  of Gujarat  and  another  against the  appellate  judgment  and decree of the Gujarat High Court dated February 17/18, 1972, on   a  certificate  under  Article  33  (1)  (b)   of   the Constitution as it stood before the Constitution  (Thirtieth Amendment) Act, 1972. The  case  arose  on  a suit  instituted  by  the  plaintiff Sankalchand Khodidas Patel on February 8, 1961, to Challenge the  validity of the notifications issued by the  defendant- State  under section 4 and 6 of the Land  Acquisition-  Act, 1894 (hereinafter referred to as the Act) in respect of land bearing  survey  number 146, in Dariapur-  Kazipur  area  of Ahmedabad City.  The notification under section 4 was issued on  May 23, 1958, in respect of I acre, 36 gunthas of  land. It  was stated in the notification that the land was  likely to  be  needed  for  a  "’public  purpose,  viz.,  for   the construction  of  houses  for  New  Sarvodaya,   Cooperative Housing  Society Ltd., at Dariapur-Kazipur,  Ahmedabad."  An erratum  was  issued  on August 20, 1959, by  which  it  was further clarified that the land was required for  "providing housing  facilities  of New Sarvodaya  Co-operative  Housing Society,  Ltd.,  for  Backward  Class  People  at  Duriapur- Kazipur, Ahmedabad." The notification under section 6 of the Act was issued on August 13, 1960, in which it was-declared, inter  alia,  that  the land was  required  for  the  Public purpose" specified in column 4 of the Schedule, namely,  for providing  housing facilities for the backward Class  people referred  to above.  The plaintiff prayed for a  declaration that  the notifications were illegal and null and void,  and for  a perpetual injunction restraining the  defendants  and their agents etc. from taking possession of the and or    disturbing the plaintiff’s possession. Thedefendant  traversed  the  claim  in  the  plaint   and specifically pleadedthat  the  acquisition  was  for  a public  purpose  and  that it had  as  the  acquiring  body) "agreed lo pay the amount of compensation when asked for  to the plaintiff".  The City Civil Judge dismissed the suit  by his  judgment dated March 1, 1966.  The High  Court  however

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allowed the plaintiff’s appeal, set aside the Trial  Court’s decree, declared the notification under section 6 of the Act to  be bad in law and void, and perpetually  restrained  the defendants  from enforcing the notification and from  taking any  further  steps in pursuance thereof.  This is  why  the State has come up in appeal to, this Court. A  perusal of the impugned judgment of the High Court  shows that  while  it decided some of the  points  in  controversy against the plaintiff, it allowed the appeal because it took the  view that the acquisition was not for a public  purpose within the meaning of section 6 of the Act as "the intention declared  by the Government to pay the amount of subsidy  to the  Additional Special Land Acquisition Officer in  respect of  the  land  under  acquisition  has  been  by   necessary implication abandoned." The short question for consideration in  this appeal is whether this finding has been arrived  at according to the law. We  have gone through the pleadings of the parties  and  the points  on which they were at issue in the trial court.   We find that while issue 180 number (3) raised the question whether the State  Government had agreed to contribute towards the cost of acquisition and issue   number(8)  dealt  with  the  question  whether   the acquisition was for a public: purpose, a plea was not  taken in  the Trial Court that the defendant State  abandoned  its intention  to pay a part of the compensation, to be  awarded for  the property wholly or partly out of  public  revenues. It  was  therefore  not permissible for the  High  Court  to decide the controversy on a plea which was not taken at  all and  which  was not the subject matter of any issue  at  the trial.   There  is nothing in the record to  show  that  the parties  knew  that  the  question  of  abandonment  of  the original  intention was a point for trial, or that they  had any  opportunity to lead their evidence in regard to it  and availed of that opportunity.  Our attention has in fact been invited by Mr. Desai, on behalf of the appellant, to the six contentions  which were raised by counsel for the  plaintiff in the High Court, but none of them dealt with the  question of  abandonment.   The High Court  therefore  committed’  an error  of  law  in deciding the appeal  on  the  finding  of abandonment   of  the  original  intention  of   the   State Government to pay a part of the, compensation to be  awarded to the plaintiff for the acquisition. Even otherwise, we find that there was no real basis for the Court’s  finding about the abandonment of the  intention  of the State Government to pay a part of the compensation.  The High  Court  arrived  at its finding on  the  basis  of  the documentary  and  oral  evidence referred to by  it  in  the judgment but, here again, we find that it committed  obvious errors  of  law  for which its finding  of  fact  cannot  be sustained and has to be set aside. The  High  Court has, in this connection,  referred  to  the "first  fact"’  that even though the award  of  compensation under section 16 was ready for publication as early as 1961, it  was  not  published because the  amount  of  subsidy  in respect of which the Government "had declared its  intention as evidenced by Ex. 54 had not been placed at the,  disposal of  the  Land Acquisition Officer" or the Registrar  of  Co- operative Societies.  Now in so far as the question of  non- publication   of  the  award  is  concerned,,  it  will   be sufficient to say that the plaintiff did not base his  claim on that basis, so that the defendants had no opportunity  to explain  why the award was not published over a long  period of  time.  It has however been clearly  established  on  the

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record,  and’ was within the notice of the High Court,  that the  suit was filed on February 8, 1961, and soon after  the publication  of  the notice under section 6  on  August  13, 1960,  an order was made by the trial court restraining  the dependents,  their agents and officers from  disturbing  and obstructing the possession of the plaintiff and from  taking over  possession of the suit land etc.  No.  useful  purpose could  therefore be served by notifying the award and  there was  no  justification  for  arriving  at  the  finding   of "abandonment" simply because of the "non-publication" of the award. We have also gone through the evidence of the parties and we fins that the statement of Rameshchandra Jethalal Mehta, who was the concerned Senior Assistant in the Industries and Co- operative  department,  and  letter  Ex.  54  of  the  State Government, make it quite clear- 181 that the State Government had taken a clear decision that it will contribute towards the cost of acquisition of the  land in question at the rate of Rs. 51- per square yard.  In fact it was clearly stated in the letter that the State shall, on that basis, contribute Rs. 45,980/- and that the expenditure on that account would be debitable to the head mentioned  in the  letter and would be met from the grants which had  been sanctioned   in   the  budget.    Rameshchandra   Jethalal’s statement  about the government resolution to  that  effect, has not been shaken in cross-examination.  It was  therefore quite  sufficient  to prove that the Government did  not  go back upon that decision and that the sanction did not  lapse with  the  expiry of the year.  It is another  matter  that, because  of  the protracted litigation, it may  have  become necessary  for the authorities concerned to obtain  a  fresh order  of  allocation of the funds for the  payment  of  the government’s  contribution of Rs. 45,980/- in  pursuance  of its  decision contained in Ex. 54, but there is  nothing  on the record to show that the decision ceased to be  operative after  it had been made, or was ever withdrawn.  We  do  not therefore  find anything on the record which  could  justify the  High Court’s finding that that sanction  or  resolution was withdrawn, rescinded or abandoned at any time. It appears that the High Court arrived at its finding  about the  abandonment for the further reason that  the  agreement Ex. 104 was executed by the cooperative society concerned on June  17, 1960.  It is however not disputed before  us  that the  agreement  was obtained under the impression  that  the land had been acquired for a company; under Part VII of  the Act.   But  this was not so because it had been  made  quite clear  in  the notification Ex. 58, which was  issued  under section 4 of the Act, that the acquisition was for a "public purpose"  namely,  for the construction of  houses  for  New Sarvodaya  Co-operative Housing Society Ltd. and  there  was nothing  to show that-the acquisition was for  any  company. The notification under section 6 of the Act was also to  the same effect, and in that notification it was stated at  four important  places that the land was needed for  the  "public purpose"  specified  in  column No. 4  thereof.   There  was therefore nothing in the two notifications to ’show that the notification   was   for  a  company,  and  there   was   no justification  for  arriving at a contrary  decision  merely because of the execution of agreement Ex. 104 by the Society under a mistaken impression. The  High Court has gone on to the State that as  the  words "or at the expense of a local body or corporation or company as the case may be were not scored off from the notification under   ’section  6  of  the  Act.  the  language   of   the

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notification supported its finding that the acquisition  was for  a  company, and not for a public purpose.  It  is  true that the unnecessary words were not scored off, but the very fact  that it was stated at as many as four places  in  that very  notification  that the acquisition was  for  a  public purpose,  was  sufficient  to show  that  the  omission  was inadvertent and could not justify the finding that the  tend was not acquired for a public purpose but for a company. The  High Court has made a reference to paragraph 9  of  the written statement also in support of its finding against the defendant.  Here 182 again the High Court failed to appreciate that that averment was made in reply to the plaintiff’s contention in paragraph 6 of the plaint on a question of law regarding the making of contribution  out of public revenues or funds controlled  or managed  by  a local authority.  It wag in  that  connection that  the  defendant stated in paragraph 9  of  the  written statement  that the ’acquiring body has agreed to  pay   the amount of compensation when asked for tothe  plaintiff" There  is nothing in the averment to show that  the  payment wag to be made by the Co-operative Societyand not by  the State  Government.  The High Court lost sight of  the  fact- that  the "acquiring body" was the State, and could  not  be theCo-operative Society or-any company. It could thusappear  that  the High  Court  committed  the aforesaid illegalities andmisread the evidence on record in setting aside the finding of the Trial Court in favour of the, defendant.  It may be that the amount of  compensation, which was to be paid by the State, Government on account  of compensation to be awarded for acquiring the property out of the public revenues, was not paid, but there can be no doubt that, as has been stated, a decision had been taken that  it was  to  be  so paid by the Government as  required  by  the second  proviso to sub-section (1) of section 6 of the  Act. As  we have stated, the actual payment was not made  because of  the  protracted litigation, but the  State  Government’s anxiety  to  acquire the land for the public  purpose  could well be appreciated from the fact that it has adhered to its intention to acquire the land According to law, and to  make its  contribution  towards  the compensation,  as  and  when necessary.   The  fact  that the State’  has  preferred  the present  appeal also goes to show that it has not  abandoned its  intention to make the acquisition on payment of a  part of the compensation out of public revenues.  It may also  be mentioned  that Mr. S. T. Desai appearing on behalf  of  the State  has  categorically stated at the Bar that  the  State Government  will  contribute Rs. 45,980/-, from  the  public revenues, towards compensation at the appropriate time.  The position  would no doubt have been different if it had  been shown that the Government had abandoned the intention to  do so  or had decided not to pay any part of  the  compensation out of the public revenues, for then the requirement of  the second  proviso  to sub-section (1) of section 6  would  not have been fulfilled but, as has been shown, this was  really not so. It would thus appear that the High Court committed an  error of  law  interfering with the judgment of the  trial  court. The  appeal is allowed with costs and the impugned  judgment and  decree are set aside and the decree of the trial  court is restored. P.H.P. Appeal allowed. 183

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