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Patna High Court

Ashish Sahkari Grih Nirman Samiti And ... vs State Of Bihar And Ors. on 2 February, 1990

Equivalent citations: 1990(38)BLJR1121

JUDGMENT

P.S. Mishra and B. Prasad, JJ.

1. The cases aforementional have quite a few common facts, question the same set of impugned orders and involve common points, except a few which are separately stated or raised in their respective writ applications. They have, accordingly, been heard together and are being disposed of by a common judgment.

2. The petitioners have prayed for quashing of acquisition of land comprising of several plots of land having one or different khata numbers but acquired by a notification dated 18-4-1980 under Section 4 of the Land Acquisition Act (hereinafter to be referred as 'the Act') Annexure I in C.W.J.C. No. 2755 of 1989, the order under Section 5-A of the Act dated 17-1-1983 and the declaration dated 16-3-1983 under Section 6 of the Act vide Annexure-2.

3. Some of the petitioners are Housing Co-operative Societies registered under the Bihar Co-operative Societies Act, 1935, some are owners of the land and some are transferee from the owners before or after the draft notification under Section 4 of the Act. Their common causes against acquisition of land by the Respondent-State Government have arisen, according to the Petitioners, for the reason of the acquisition made for the Bihar vit Sewa Sahakari Grih Nirman Samiti (respondent in all the writ applications) (hereinafter to be referred to as 'the respondendent-Samiti) which is a Housing Co-operative Society registered under the Bihar Co-operative Societies.

4. We shall refer to facts concerning one of the other petitioners, as and when required, but it shall be convenient if undisputed facts are noticed before the contentions of the parties are referred to.

5. With a view to provide land for construction of houses for its members the respondent-Samiti was consituted in the year, 1973 vide registration No. 4/Pat/73. It approached the State Government in the same year for acquisition of land in village Kumhrar, a quarter of the city of Patna. The State Government, Accordingly, issued the draft notification aforementioned. Some of the petitioners were noticed under Section 5-A of the Act. (Bihar Amendment). They filed their objections. After disposal of the objections filed, and after some sort of inquiry the Collector under the Act recommended to the State Government for acquisition of the land. The State Government thereafter made the declaration. The respondent-Samiti entered into an agreement with the State Government, as required under Section 41 of the Act and, on demand under the agreement, paid the price of the land determined in the award by the Collector under the Act.

6. Petitioners who themselves were Co-operative Societies and other petitioners, however, felt aggrieved as according to them, the alleged inquiry under Section 5-A of the Act was perfunctory mala fide and not held in accordance with law. According to them, the respondent-Samiti, which is a co operative Society, did not qualify for the purpose of acquisition of land for it by the respondent-State Government under any of the provisions of Section 40 of the Act and the procedure prescribed for inquiry into the purpose of the Society (Samiti) or the public purpose for which acquisition has been made, was not followed.

7. The petitioners have contended that (1). The acquisition of the land in question has not been made for a public purpose (2) the respondent-Samiti is not one which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose being itself a private company and not a Government, company, (3) no land could be acquired for it in accordance with Part VII of the Act. They have also contended that the acquisition in question has been ordered without complying with the mandatory requirements of previous inquiry into the question as to whether the purpose of the acquisition is to obtain land for erection of dewelling houses for workmen employed by the Company or for the provision of amenities directly connected therewith or that such acquisition is needed for construction of some building or work for a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose or that such acquisition is needed for the construction of some work and that such work is likely to prove useful to the public. According to the petitioners, who themselves are housing co-operative societies, acquisition of such land which belongs to them or their members for the very purpose for which they have been formed, will defeat the public purpose of acquisition instead of promoting it.

8. Some petitioners have contended that no notice of the proceeding under Section 5-A of the Act was ever served upon them. Those who were served with the notice have contended that no opportunity was ever given to them to substantiate their objections, as even a formal inquiry, as contemplated under Section 5-A of the Act, was not held. In support of their contention that there was no inquiry held as required by law, petitioners in C.W.J.C. No. 2849 of 1983 produced a certified copy of the order sheet of the court of Collector (respondent No. 2 in the said case). When however the original file was brought before the Court on 6-10-198 s a Bench of this Court noticed substantial difference between the certified copy of the order-sheet, that had been supplied to the petitioners, and the order recorded in the original file. The court, accordingly, recorded:

We find material difference between the certified copy of the order sheet that was supplied to the petitioners and the order recorded in the original file. It raises some amount of suspicion in our mind. The certified copy issued to the petitioners does not contain nothing at page No. 15 of the order-sheet. That is one complete page of the order sheet and contains material statements destroying the petitioners' allegations. Let the original order sheet up to the order dated 14-3-1983 up to which period certified copy has been issued to the petitioners be retained and kept in sealed cover in this Court to be referred and examined at the time of final hearing of this application which is accordingly, admitted for that purpose. The rest of the original record be handed over to the learned Advocate General just now.

We have, accordingly, examined the original file and the certified copy.

9. Respondents have contested and asserted that the acquisition has been made for a public purpose and that the respondent-Samiti is one which qualifies in accordance with definition of a "company*' under the Act. True it is not a Government company but it is also not a private company and the acquisition has been made in accordance with law and the inquiry in accordance with the provisions under Section 40 read with Section 5-A of the Act has been held and no law has been violated and that the purpose in which the respondent-Samiti has engaged itself is a public purpose and that there has been no forgery of any kind or interpolation in the original file but in the certified copy itself there was a mistake as one full page escaped eyes of the typist who prepared the certified copy. A reference to the provisions of the Act to know whether respondents-Samiti qualified as a company for which acquisition could be made under the Act or not as well as to know how in the case of a co-operative Society acquisition can be made under the Act, is necessary. Before the amendment in the year, 1984 in Section 3'(e) of the Act "Company" was defined to mean a company registered under the Indian Companies Act, 1882 or under the English Companies Act, 1862 to 1890 or incorported by an Act of Parliament of the United Kingdom or by the Indian Law or Royal Chapter or Letters Patent and included a society registered under the Society Registration Act, I860 and a registered Society within the meaning of the Co-operative Societies Act, 1912 or in any other law relating to the Co-operative Societies Act for the time being in force in any State, By 1984 amendment the expression "company" has been made to mean a company as defined in Section 3 of the Companies Act, 1956 (1 of 1956) other than a Government company referred to in Clause (cc) a Society registered under the Act, 1860 (21 of 1860) or any corresponding law for the time being in force in any State other than the Society referred to in Clause (cc) and a co-operative society within the meaning of any law relating to co-operative societies for the time being in force in any State other than a co-operative Society referred to in Clause (cc). Clause (cc) of Section 3 which was introduced by the amendment in 1984 (Act 64 of 1984), however, included in the expression "corporation owned or controlled by the State" any body corporate including a Government Company as denned under Section 617 of the Companies Act, a Society registered under the Societies Registration Act, 1860 or any other corresponding law for the time being in force in a State being a Society established or administered by Government and a co-operative Society within the meaning of any law relating to co-operative Societies for the time being in force in any State, being a co-operative Society in which not less than 51 per centum of the paid up share capital is held by the Central Government or by any State Government or Governments or partly the Central Government and partly by one or more State Governments.

10. "Public purpose" also had, before the amendment by Act 68 of 1984, a definition to include the provision of village site in district in which the appropriate Government declared by notification in the official Gazette, that it was customary for the Government to make such provision. The 1984 Amendment, however, extended its ambit to, besides provisions of village sites, or the extension, planned development or improvement of existing village sites ; the provision of land for town or rural planning ; the provision of land for planned development of land from public funds in purusance of any scheme or policy of Government and subsequent disposal thereof in whole or in part by lease, assignment or outright sale with the object of securing further develoment as planned ; the provision of land for a corporation owned or controlled by the State the provision of land for residential purposes to the poor or landless or to persons residing in areas affected by natural calamities or to persons displaced or affected by reason of the implementation of any scheme undertaken by Government, any local authority or a corporation owned or controlled by the State, the provision of land for carrying out any educational, 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 (21 of 1860), or under any corresponding law for the time being in force in a State or Co-operative Society within the meaning of any law relating to Co-operative Societies for the time being in force in any State the provision of land for any other scheme of development sponsored by Government, or, with the prior approval of the appropriate Government, by a local authority: the provision of any premises or building for locating a public office, but does not include acquisition of land for companies. Section 4 of the Act as it stood before the Amendment provided for publication of preliminary notification and powers of officers thereupon in the following words:

(1) Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose a notification to that effect shall be published in the official Gazette and the Collector shall cause notice of the substance of such notification to be given at convenient places in the said locality.

(2) Thereupon it shall be lawful for any officer, either generally or specially authorised by such Government in this behalf, and for his servants and workmen. To enter upon and survey and take levels of any land in such locality ; to dig or bore into the sub-toil to do all other acts necessary to ascertain whether the land is adapted for such purpose ; to set out the boundaries of the land proposed to be taken and the intended line of the work ; if any, proposed to be made thereon ; to make such levels, boundaries and line by placing marks and cutting trenches ; and where otherwise the survey cannot be completed and the levels taken and the boundaries and line marked to cut down and clear away any part of any standing, fence or jungle. Section 4 of the Act, however, was amended by Bihar Amendment Act 11 of 1961 and Sub-section (1) was substituted by the words:

Whenever it appears to the appropriate Government or the Collector that land in any locality is needed or likely to be needed for any public purpose, a notification to that effect shall be published at the office of the Collector, at the office of the sub-divisional officer, at the offices of the smallest revenue administrative unit and Gram panchayat, if any, constituted under the Bihar Panchayat Raj Act, 1947 (Bihar Act VII of 1948), and at some conscious place in the village in which the load is situated: and the Collector shall cause copies of the notification to be served on all persons known or believed to be interested in the land.

Section 4 of the Act has since undergone a change by an amendment by Act 68 of 1984 and after the words "for any public purpose" the word "or for a company", and after the words 'official Gazette" words "and in two daily newspapers circulating in that locality of which at least one shall be in the regional language", and after the word 'locality' word "the last of the dates of such publication and the giving of such public notice ; being hereinafter referred to as the date of the publication of the notification" were introduced, No corresponding amendment however, was made by the Bihar State legislature and the 1961 Amendment continued and is still continuing.

11. Section 5-A of the Act, however, says:

Hearing of objections.(1) Any person interested in any land which has been notified under Section 4, Sub-section (1), as being needed or likely to be needed for a public purpose or for a company may (within thirty days from the date of the publication of the notification), object to the acquisition of the land or of any land in the locality, as the case may be.

(2) Every objection under Sub-section (1) shall be made to the Collector in writing, and the Collector shall give the objector an opportunity of being heard (in person or by any person authorised by him. in this behalf) or by pleader and shall, after hearing all such objections, and after making such further inquiry, if any, as he thinks necessary (either make report in respect of the land which has been notified under Section 4, Sub-section (1) or make different report in respect of different parcels of such land, to the appropriate Government, containing his recommendations on the objections, together with the record of the proceedings held by him, for the decision of the Government. The decision of the appropriate Government on the objections shall be final.

(3) For the purposes of this section, a person shall be deemed to be interested in land who would he entitled to claim in interest in compensation if the lands were acquired under this Act.

12. There has been no substantial amendment, except the introduction of words "within thirty days from the date of the publication of the notification" after the words "for a public purpose" or "for a company may" in Sub-section (I), thereof by Act 68 of 1984. There has, however, been some amendments of substance by the Bihar Amendment Act, 11 of 1961 in which "within thirty days after the publication of the notification" referred to in Sub-section (1) was substituted by the expression "within thirty days after the publication of the notification referred to in the said sub-section at some conspicuous place in the village in which the land is situated or of the service of the copy thereof on him, whichever is later" and in Sub-section (2) introducing:

(2)(i). Every objection under Sub-section (1) shall be made in writing to the Collector who shall give the objector an opportunity of being heard either in person or by pleader and shall, after hearing all such objections and making such further enquiry, if any, as he thinks necessary, decide the objection:

Provided that the appropriate Government may, either of its own motion or on the application of any person interfiled in the land call for the record of the proceedings held by the Collector and pass such order as it thinks fit (ii) The order of the appropriate Government and subject to such order, the decision of the Collector, under Clause (i) shall be final.

13. Section 6 of the Act which speaks of declaration that land is required for a public purpose states:

(1) Subject to the provisions of Part VII of this Act, when the appropriate Government, is satisfied, after considering the report, if any, made under Section 5-A Sub-section (2), that any particular land is needed for a public purpose, or for a company, a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorised to certify its orders (and different declarations may be made from time to time in respect of different parcels of any land covered by the same notification under Section 4, Sub-section(1), irrespective of whether report or different reports has or have been made (wherever required) under Section 5-A, Sub-section (2):

Provided that no declaration in respect of any particular land covered by a notification under Section 4, Sub-section (1):

(i) published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967 (1 of 1967), but before commencement of the Land Acquisition (Amendment Act, 1984, shall be made after the expiry of three years from the date of the publication of the notification ; or

(ii) published after the commencement of the Land Acquisition (Amendment! Act, 1984, shall be made after the expiry of one year from the date of the publication of the notification:

Provided further that no such declaration shall be made unless the compensation to be awarded for such property to be paid by a company, or wholly or partly out of public revenues or some fund controlled or managed by a local authority.

(2) Every declaration shall be published in the Official Gazatte (in two daily newspapers circulating in the locality in which the land is situated of which at least one shall be in the regional language, and the Collector shall cause public notice of the substance of such declaration to be given at convenient places in the said locality (the last or the dates of such publication and the giving of such public notice, being hereinafter referred to as the date of the publication of the declaration), and such declaration shall state) the district or other territorial division in which the land is situate, the purpose for which it is needed, its approximate area and where a plan shall have been made of the land, the place where such plan may be inspected.

(3) The said declaration shall be conclusive evidence that the land is needed for a public purpose or for a company, as the case may be ; after making such declaration, the appropriate Government may acquire the land in manner hereinafter appearing.

14. There are some minor amendments made in Sub-section (2) of Section 6 of the Act by Act. 68 of 1984 but the Bihar Amendment Act 11 of 1961 has made substantial change in the language of Sub-section (1) thereof. The Amendment states:

(1) Subject to the provisions of Part VII of the Act, where the appropriate Government is satisfied after consideration the Collector's report, if any under the proviso to Sub-section (2) of Section 5-A or the Collector is satisfied after hearing the objection, if any under Section 5-A, particular land is needed for a public purpose, or for Company, a declaration shall be made by the appropriate Government or the Collector as the case may be, to that effect in writing:

Provided that no such declaration shall be made unless the compensation to be awarded for such property is to be paid by the Company or wholly or partly out of the Consolidated Fund of the State or some fund controlled or managed by a local authority.

After these provisions of the Act the relevant provisions' are set of Sections 39, 40, 41, 42, 43, 44-A and 44-B in Part VII of the Act. Section 39 states:

The provisions of Sections 6 to 16 (both inclusive) and Sections 18 to 37 (both inclusive) shall not be put in force in order to acquire land for any company, (under this part) unless with the previous consent of the appropriate Government nor unless the company shall have executed the agreement hereinafter mentioned.

The provision for the agreement has been made in Section 41 of the Act that states:

If the appropriate Government is satisfied after considering the report, if any, of the Collector under Section 5-A, Sub-section (2), or on the report of the officer making an inquiry under Section 40, that (the proposed acquisition for any of the purposes referred to in Clause (a) or Clause (aa) or Clause (b) of Sub-section (1) of Section 40) it shall require the company to enter into an agreement with the appropriate Government, providing to the satisfaction of the appropriate Government the following matters, namely:

(1) the payment to the appropriate Government of the cost of the acquisition:

(2) the transfer, on such payment, of the land to the company:

(3) the terms on which the land shall be held by the company:

(4) where the acquisition is for the purpose of erecting dwelling houses or the provision of amenities connected therewith, the time within which, the conditions on which and the manner in which the dwelling houses or amenities shall be erected or provided:

(4-A) where the acquisition is for the construction of any building or work for a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose, the time within which and the conditions on which the building or work shall be constructed or executed ; and (5) where the acquisition is for the construction of any other work the time within which and the conditions on which the work shall be executed and maintained, and the terms on which the public shall be entitled to use the work.

Section 42 states:

Every such agreement shall as soon as may be after its execution, be published in the Official Gazette and shall thereupon (so far as regards the terms on which the public shall be entitled to use the work) have the same effect as if it had formed part of this Act.

Section 44-B states:

Notwithstanding anything contained in this Act, no land shall be acquired under this part, except for the purpose mentioned in Clause (a) of Sub-section (1) of Section 40, for a private company which is not a Government Company.

15. The provisions of Section 40 of the Act in full shall apply in all force to the instant cases, as in case, it is found that acquisition is for a company it will be necessary to decide whether the agreement with the appropriate Government has been arrived at in accordance law or not whether previous consent of the appropriate Government had been obtained or not ; or whether the company in question is a private company or not. Section 40 states:

Previous enquiry- (I) such consent shall not be given unless the appropriate Government be satisfied either on the report of the Collector under Section 5-A, Sub-section (2) or by an enquiry held as hereinafter provided:

(a) that the purpose of the acquisition is to obtain land for the erection of dwelling houses for workman employed by the company or for the provision of amenities directly connected therewith, or (aa) that such acquisition is needed for the construction of some building or work for a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose ; or

(b) that such acquisition is needed for the construction of some work and that such work is likely to prove useful to the public.

(2) such enquiry shall be held by such officer and at such time and place as the appropriate Government shall appoint.

(3) such officer may summon and enforce the attendance of witnesses and compel the production of documents by the same means and, as far as possible, in the same manner as is provided by the (Code of Civil Procedure, 19O8 (5 of 1908) of the case of a Civil Court.

This provision in Section 40 of the Act has been supplemented by the Rules framed in the year, 1963. Rule 3 thereof states:

(1) For the purpose of advising the appropriate Government in relation to acquisition of land under part VII of the Act the appropriate Government shall, by notification in the Official Gazette, constitute a committee to be called the Land Acquisition Committee.

(2) Committee shall consist of-

(i) the Secretaries to the Government of the Departments of Revenue, Agriculture and Industries or such other officers of each of the said Departments as the appropriate Government may appoint;

(ii) such other members as the appropriate Government may appoint for such terms as that Government may, by order, specify ; and

(iii) the Secretary to the Department or any officer nominated by him dealing with the purposes for which the company proposes to acquire the land.

(3) The appropriate Government shall appoint one of the members of the Committee to be its Chairman.

(4) The Committee shall regulate its own procedure.

(5) It shall be the duty of the Committee to advise the appropriate Government on all matters relating to or arising out of acquisition of land under Part VII. of the Act, on which it is consulted and to tender its advise within one month from the date on which it is consulted Provided that the appropriate Government may on a request being made in this behalf by the Committee and for sufficient reasons extend the said period to a further period not exceeding two months.

16. Besides such advise of the Committee, Rule 4, states that the appropriate Government shall satisfy itself with. regard to certain matters before initiating acquisition proceedings. It states:

(1) Whenever a company makes an application to the appropriate Government for acquisition of any land, that Government shall direct the Collector to submit a report to it on the following matters, namely-

(i) that the company has made its best endeavor to find out lands in the locality suitable for the purpose of acquisition:

(ii) that the company has made all reasonable efforts to get such lands by negotiations with the persons interested therein on payment of reasonable price and such efforts have failed

(iii) that the land proposed to be acquired is suitable for the purpose:

(iv) that the area of land proposed to be acquired is not excessive:

(v) that the company is in a position to utilise the land expeditiously ; and

(vi) where the land proposed to be acquired is good agricultural land, that no alternative suitable site can be found so to avoid acquisition of that land (2) The Collector shall, after giving the company a reasonable opportunity, to make any representation in this behalf, hold an inquiry into the matters referred to in Sub-rule (1) and while holding such enquiry he shall-

(i) in any case where the land proposed to be acquired is agricultural land consult the Senior Agricultural Officer of the district whether or not such land is good agricultural land ;

(ii) determine, having regard to the provision.., of Sections 23 and 24 of the Act, the approximate amount of compensation likely to be payable in she opinion of the Collector, should he acquired, for the Company ; sod

(iii) ascertain whether the company offered a reasonable price (not being less than the compensation so determined), to the persons interested in the land proposed to be acquired.

Explanation. -For the purpose of this Rule "good agricultural land" means any land which, considering the level of agricultural production and the top pattern of the area in which it is situated ; is of average or above average productivity and includes a garden or grove land, (3) As soon as may be after holding the enquiry under Sub-rule (2) the Collector shall submit a report to the appropriate Government and a copy of the same shall be forwarded by the Government to the Committee.

(4) No declaration shall be made by the appropriate Government under Section 6 of the Act unless-

(i) the appropriate Government has consulted the Committee and has considered the report submitted under this rule and the report, if any submitted under Section 5-A of the Act; and

(ii) the agreement under Section 41 of the Act has been executed by the company.

17. A perusal of the provisions aforementioned clearly shows that the declaration under Section 6 of the Act must remain in abeyance until (1) inquiry is held as contemplated in Rule 4 of the rules aforementioned, (2) inquiry is held in accordance with Section 5-A of the Act and the report thereof is taken into consideration and that the Committee appointed for the said purpose is consulted and its opinion taken into consideration. Although there are materials on the record to show that there has been some semblance of inquiry under Section 5-A of the Bihar Act II of i96l, there is nothing on the record to show that any inquiry, as contemplated under Rule 4, was ever held. There is some assertion that the Committee constituted for the said purpose was consulted but the respondents are completely silent about the inquiry under Rule 4.

18. We have come to the said conclusion for the reason that inquiry under Section 5-A of the Act if no separate inquiry is held under Rule 4 must be on) in which the Collector must submit a report with respect to the matters, namely, that the company had made its best endeavours to find out lands in the locality suitable for the purpose of acquisition, that the company had made all reasonable efforts to get such lands by negotiation with the persons interested therein on payment of reasonable price and such efforts had failed, that the land proposed to be acquired was suitable for the purpose and not excessive, the company was in a position to utilise the land expeditiously and whether the land proposed to be acquired was good agricultural land or not and n case it was good agricultural land, whether any other suitable site was available or not. In this inquiry the Collector was required to give reasonable opportunity to make any representation to the respondents-Samiti and enquire as provided therein.

19. We shall advert to further discussion in this regard a bit later. At this stage it is necessary to notice, however, the claim flowing from the aforementioned provisions and thereafter satisfy, whether the acquisition is made for public purpose or not whether the respondent-Samiti is a Company or not, and if it is a Company, whether it is a private company or not.

20. Section 4 of the Act empowers the appropriate Government to notify the need of land for any public purpose by a notification published in the official Gazette, Since in the instant case the notification under Section 4 of the Act has besot issued before the 1984 amendment was introduced, it is not necessary to refer to the requirements therein, except requirements of the notification under the said provision before the amendment but after the Bihar Amendment by Act 11 of 1961. The Bihar Amendment has already been noticed by us. According to the Bihar Amendment, the notification was to put at the office of the Collector, at the office of the Sub-divisional officer, at the offices of the Smallest Revenue Administrative units and Gram Panchayat Unit, if any, and at some consipicuous places in the village in which land was situated as well as service of the copies of the notification on all persons known or believed to be interested in the land. What is noticeable in it is that the publication of the notification, under Section 4 of the Act before 1984 amendment is contemplated only when the land is needed for any public purpose and not for a company. Section 6 of the Act, however, has a significant expression in the words "needed for a public purpose or for a company" and which has been left unaffected by the Bihar Amendment.

21. Section 39 of the Act states that the provisions of Sections 6 to 16 (both inclusive) and Sections 18 to 37 (both inclusive) shall not be put in forc7e in order to acquire land for any company, unless with the previous consent of the appropriate Government nor unless the Company shall have executed the agreement as provided under Section 41 of the Act.

22. The question arises then whether a decision for preliminary investigation by issuing notification under Section 4 of the Act will be taken it is within the knowledge of the appropriate Government that the acquisition is for a company or not. If the notification under Section 4 of the Act can be issued only when the land is needed or is likely to be needed for any public purpose, can there be a notification issued under the said section unless the appropriate Government is satisfied that although the acquisition is for a company, yet it is needed for a public purpose. Answer to this, in our opinion, can be found in Section 39 and 40 of the Act,. The previous consent of the appropriate Government or the execution of agreement by the company shall not be enough unless by a previous inquiry, the appropriate Government is satisfied that the purpose of the acquisition is to obtain land for the erection of (sic) houses for workmen employed by the company or for the provision of amenities directly connected therewith or that such acquisition is needed for the construction of some building or work for a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose or for that such acquisition is needed for construction of some work and that such work is likely to prove useful to the public. This satisfaction will touch the public purpose in the case of acquisition for the purpose of erection of dwelling houses for workmen employed by the company or for the provision of amenities directly connected therewith or in case of such acquisition needed for the construction of some building or work for a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose or that such acquisition is needed for the construction of some work and such work is likely to prove useful to the public.

23. The preliminary notification under Section 4 of the Act disclosing the intention to acquire the land for a public purpose shall in the event of such satisfaction stand justified.

24. It is in this context that one has to understand the nature of inquiry contemplated under Section 40 of the Act. Such inquiry by the Collector may be held in the same proceeding in which objections to the acquisitions are heard and decided or may be separately held by such officers and at such time and place as the appropriate. Government may appoint. In no case without there being an inquiry previous to the declaration under Section 6 of the Act into the matters referred to in Clauses (a), (aa) and (b) of Sub-section (1) of Section 40 of the Act, any declaration can be issued under Section 6 of the Act.

25. Rules which supplement the inquiry contemplated under Section 40 of the Act go to the intention of the company and bona fide of the need of land by it. Rule 4 aforementioned requires inquiry by the Collector appointed for the said purpose by the appropriate Government into the conduct of the company before approaching the Government for acquisition. The company concerned must satisfy that it had endeavored to find out lands in the locality suitable for the purpose of acquisition and that it had made all reasonable efforts to get such lands by negotiation with the persons interested therein on payment of reasonable price and such efforts had failed. In this inquiry, objections like Section 5-A of the Act are not contemplated. A previous inquiry other than the inquiry under Section 5-A as contemplated in Section 40 of the Act may not in a given case be a hearing of objections to the acquisition. Although there is nothing in the Act or the Rules that objections shall be invited to the claim of any company, that land is needed by it for erection of dwelling houses for workmen or that it is needed for the construction of some building or work for a company which is engaged or likely to be engaged in any industry or work or is taking steps for engaging itself in any industry or work which is for a public purpose or that such acquisition is needed for the construction of some work and such work is likely to prove useful to the public. Yet to avoid duplication of inquiry into these objections as to the purpose of the acquisition by the company or character of its industry or work, objections may be invited in any case. While objecting to the proposed a question under Section 5-A of the Act, persons interested in the land shall have a right to contest the bona fide of the claim of the company, that it is in need of land for erection of dwelling houses, for workmen employed by it etc. or that it is a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose. It is for this reason that in Sub-rule (4) of Rule 4 aforementioned, there is a prohibition that no declaration shall be made by the appropriate Government under Section 6 of the Act unless," the appropriate Government... has considered the report submitted under this Rule and the report, if any, submitted under Section 5-A of the Act.

26. It is also obvious that inquiry under Rule 4 must proceed the inquire under Section 5-A of the Act or be simultaneous with the inquiry under Section 5-A of the Act. In every case, however, inquiry under Rule 4 will be addressed to the matters enumerated therein and the inquiry under Section 5-A of the Act shall be addressed to matters as to the rights and interests and objections of the persons interested in the land and in case of acquisition for a company with respect to the matters enumerated in Section 40 of the Act. The satisfaction of the State Government shall in no case be complete to without there being a report of the inquiry under Rule 4 aforementioned and the report of the inquiry under Section 5-A of the Act which inquiry in the case of acquisition far a company may also be with respect to the matters enumerated in Section 40 of the Act and in case the report under Section 5-A of the Act does not cover the matters enumerated in Section 40 of the Act unless there is a report of inquiry under Section 40 of the Act In some of these, in the case of acquisition for a Company, there shall be no declaration under Section 6 of the Act unless there is report to satisfy the State Government that the company had made its best endeavour to find out land in the locality suitable for the purpose of acquisition, had made all reasonable efforts to get such land by negotiation with the persons interested therein on payment of reasonable price and such efforts had failed, land proposed to be acquired is suitable for the purpose, the area of laud proposed to be acquired is not excessive, the company is in a position to utilise the land expeditiously and whether the land proposed to be acquired is good agricultural land and whether that there is no alternative suitable site can be found so as to avoid acquisition of that land, and that the purpose of the acquisition is to obtain the land for the erection of the dwelling house for workmen employed by the Company or for the provision of the amenities directly connected therewith or that such acquisition is needed for the construction of such building or work for a company which is engaged or in taking steps for engaging itself in any industry or work which is for a public purpose or that such acquisition is needed for the construction of some work and that such work is likely to prove useful to the public. Besides the above, all objections to the acquisition of the land must be decided in accordance with Section 5-A of the Act. We take the view that without Section 5-A of the Act inquiry declaration under Section 6 of the Act cannot be made in a case of acquisition for a Company for the reason that special powers in case of urgency as provided in Section 17 of the Act can be exercised only in the case of the land needed for a public purpose and not for a company. Section 17 of the Act unlike Section 6 which uses the expression "land is needed for a public purpose or for a company" does not use the expression" for a company" but only says that the appropriate Government may direct for taking possession of any land needed for a public purpose even without award under Section 12 of the Act and that the appropriate Government may direct that the provisions of Section 5-A of the Act shall not apply.

27. We have already noticed the definition of the company. Since in the instant case Section 4 of the Act notification has been issued before the 1984 Amendment of the Act definition of "company" in Section 3(e) as it stood before the amendment alone is relevant. Company" has been given an extended meaning to include a registered society within the meaning of Co-operative Society Act, 1912 (Central Act) or any other law relating to co operative societies for the time being in force in any other State. A society registered under the Bihar Co-operative Societies Act, therefore, shall be a, company for the purposes of toe Act. The expression 'company' means a company registered under the Indian Companies Act, 1882 or under the English Companies Act or incorporated by the Act of parliament or by the United Kingdom or by Indian Law... and includes ...a registered society within the meaning of....or any other law relating to cooperative societies within the meaning of... any other law relating to co-operative societies for the time being in force in any other State. Section 3 of the Companies Act has defined a company to mean the Company formed and registered under the Companies Act. After this general definition it defines' public company' to mean which is not a private company and a private company to mean a company by its Article (a) restricts the right to transfer its shares, if any ; (b) limits the number of its members to fifty not including (i) persons who are in the employment of the company ; and (ii) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased ; and (c) prohibits any invitation to the public to subscribe for any shares in, or debentures of, the company, Section 617 of the Act has defined a Government company to mean any company in which not less than fifty one per cent of the paid up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments (and includes a company which it a subsidiary of a Government company as thus defined). I have referred to Section 44-B of the Land Acquisition Act which states that notwithstanding anything contained in this Act, no land shall be acquired under this part, except for the purpose mentioned in Clause (a) of Sub-section (1) of Section 40, for a private company which is not a Government company. Explanation to the said section states-"Private Company" and "Government Company" shall have the meanings respectively assigned to them in the Companies Act, 1956. A perusal of the definitions of a company, a private company and a Government company thus reveal that a Government company can either be a private company or a public company but a perusal of Section 40 of the Act read with Section 44-B there of makes a distinction between a private company and a Government company and slates that while for a private company there can be acquisition only when the purpose of the acquisition is to obtain land for the erection of dwelling houses for workmen employed by the company or for provision of amenities directly connected therewith, for a Government company which may otherwise be a private company, such acquisition can be made is respective of whether it is a company having limitations or restrictions as applied to a private company. Acquisition can, however, be made for a company which is not a private company, even if it is needed for the construction of some building or work or if it is engaged or is taking steps for engaging itself in any industry of work which is for a public purpose or that such an acquisition is needed for the construction of sc me work that is likely to prove useful to the public. In every case therefore, it will be necessary to know whether the company which has asked for acquisition is a private company or a public company or a Government company. If it is a Government company, it is obvious, Section 44-B of the Act shall not be applied to it. If it is a private company, Section 44-B of the Act shall apply and acquisition shall be permissible only for the purpose of the erection of the dwelling houses for workmen employed by it or for the provision of amenities directly connected therewith or if it is needed for the construction of some work which is likely to prove useful to the public. In other words, no acquisition for the construction of building or work for a private company shall be permissible even if it is engaged or is taking steps for engaging itself in any industry or world which is for a public purpose. A co-operative society may be a private company or a public company or even be a Government company.

That it can be a Government company needs no elaboration as the expression "Corporation owned or controlled by the State'' has now been defined to include a registered society under the Societies Registration Act, 1860 or any corresponding law for the time being in force is a State being a society established or administered by the Government or a co operative society within the meaning of any law relating to co-operative society for the time being in force in any State being a co-operative society in which not less that 51 per centum of the paid up share capital is held by the Central Government or by any State Government or Governments or partly the Central Government and partly by one or more State Governments It can be a private company if by its Article a right to transfer shares is restricted or the number of its members is limited to 50 not including persons, who are in the employment of the society, persons, who having been formerly in the employment of the society and been members of the society while in that employment and continued to be members after the employment ceased and any invitation to the public to subscribe any share or debenture of the society is prohibited. If it is not a Government company for the reason of its paid up share capital not satisfying expressions as mentioned above or a private company as above then alone there can be acquisition for the purpose of construction of some building or work of the society because in that case it may be a public company and not a Government or a private company.

28. Having dilated so far into the provisions of law we now propose to prospect into the facts. It has been no doubt asserted that respondent No. 5 is a society which is likely to engage itself into construction of houses for its members in the city of Patna. Whether this will be a purpose satisfying the requirement of Section 44 of the Act or not will be considered by me separately. There is some material on the record to suggest that the respondent Samiti was constituted with the avowed object of providing houses to person who does not have land in the city of Patna. There is, however, nothing on the record to show conclusively that it has the trapping force of a public company opposed to private company. The Collector under the Act and the State Government, it appears conclusively, has never directed themselves to find out the true character of the respondent-Samiti, they proceeded as if because it was a society constituted for the purpose of providing house to people who had no land in the city of Patna to build dwelling houses, they were eligible as a company to enter into an agreement with the State Government for acquisition of land under Part VII of the Act. A sort of confusion remained operating throughout the proceedings for acquisition of land oven with respect to the requirement of Rule 4 aforementioned There is nothing on the record to show that there was any inquiry with respect to the matters enumerated in Rule 4 or that a report was submitted to the State Government by the Collector on each matter. Respondent No. 5 has brought a proforma on the record which purports to answer the questionnaire prepared on the basis of the questions that are required to be examined by the Collector under Rule 4 aforementioned. It is difficult to accept the said proforma being a result of the inquiry by the Collector under the said Rule or a report after examining the truth or otherwise of the assertions of the respondent-Samiti as to their endeavor to find out lands in the locality suitable for the purpose of acquisition, to get such lands by negotiation with persons interested therein on payment of reasonable price and that the land proposed to be acquired is suitable for the purpose or is not excessive or that it is not a good agricultural land and no alternative suitable site can be found so as to avoid acquisition of the land.

Moreover, it is not clear when the land acquisition committee was consulted by the Respondent-State Government and whether the consultation was directed to issues pertaining to acquisition or not, Ordinarily we would have proceeded with the assumption that proceedings were conducted properly and requirements of Jaw were fulfilled. In the instant case, however, we have not done so far more than one reason. A company approaching the appropriate Government seeking acquisition of land for its purpose may come and show its endeavor, to find out land in any suitable locality and that efforts to get such land by negotiation, failed. The Government, merely on such ipse dixit of a company, may not accept or and require the Collector to ascertain the truth or otherwise of the assertions of the company concerned. Rule 4(2) aforementioned says that the Collector shall, after giving the company a reasonable opportunity to make any representation in this behalf hold an inquiry into the matters referred to in Rule 4(1) and while holding inquiry shall consult the Senior Agriculture Officer of the District whether or not. Such land is good agricultural land, determine having regard to the provisions of Sections 23 and 24 of the Act approximate amount of compensation likely to be payable in respect of the land and ascertain after a reasonable opportunity given to the company concerned that compensation so determined for the persons interested in the land proposed to be acquired is reasonable or not. The Performa which is on the record does not show any such endeavor or effort. What sort of inquiry has been held when only all that the company shows is reiterated in the report. The appropriate Government i.e. the State Government could give no land to a company which was a private company. Without there being a finding that the company is not a private company, it could not proceed to entertain any application on its behalf. These reasons, in our view, are enough to reject the so-called Performa report of the District Land Acquisition Officer. Over and above there is yet another infirmly. Rule 4 says:

(1) Whenever a company makes an application to the appropriate Government for acquisition of any land, that Government shall direct the Collector to submit a report to it on the following matters, namely:

(i) That the company has made its best endeavour to find out lands in the locality suitable for the purpose of acquisition:

(ii) that the company has made all reasonable efforts to get such lands by negotiations with the persons interested therein on payment of reasonable price and such efforts have failed:

(iii) that the land proposed to be acquired is suitable for the purpose:

(iv) That the area of land proposed to be acquired is not excessive ; (v) that the company is in a position to utilise the land expeditiously; and

(vi) where the land proposed to be acquired is good agricultural land, that no alternative suitable site can be found so as to avoid acquisition of that land.

(2) The Collector, shall, after giving the company a reasonable opportunity, to make any representation in this behalf, hold an inquiry into the matters referred to in Sub-rule (1) and while holding such enquiry he shall,-

(i) in any case where the land proposed to be acquired is agricultural land consult the Senior Agricultural Officer of the district whether or not such land is good agricultural land:

(ii) determine, having regard to the provisions of Sections 23 and 24 of the Act, the approximate amount of compensation likely to be payable in respect of the land, which in the opinion of the Collector or, should be acquired, for the Company, and:

(iii) ascertain whether the company offered a reasonable price (not being less than the compensation so determined), to the persons interested in the land proposed to be acquired.

Explanation.-For the purpose of this Rule "good agricultural land" means any land which, considering the level of agricultural production and the top partiem of the area in which it is situated, is of average or above average productivity and includes a garden or grove land, (3) As soon as may be after holding the enquiry under Sub-rule (2) the Collector shall submit a report to the appropriate Government and a copy of the same shall be forwarded by the Government to the committee.

(4) No declaration shall be made by the appropriate Government under Section 6 of the Act unless.-

(i) the appropriate Government has consulted the Committee and has considered the report submitted under this rule and the report, if any, submitted under Section 5-A of the Act; and

(ii) the agreement under Section 41 of the Act has been executed by the company.

29. There is nothing on the record to show that the Land Acquisition Officer was the Collector under the Act. In fact, there is a mention in the record of the inquiry under Section 5-A of the Act that the Land Acquisition Officer was not the Collector under the Act and the Additional Collector of the district was empowered to enquire into the objections under Section 5-A of the Act, A document marked Annexure-G appended to the counter-affidavit of respondent No. 5 shows that land acquisition officer was empowered to hold inquiry under Section 40 of the Act. The State Government could not authorise any officer to hold inquiry under Section 5-A of the Act. Rule 4, however, is specific, such inquiry can be held only by the Collector under the Act, as the inquiry under Section 5-A of the Act as the Collector under the Act alone can held the inquiry and no one else. Certified copy of the order sheet of PLA Case No. 24 of 1976-77 concerning the acquisition in question shows that on 31-1-1981 the office of the Land Acquisition Officer received a communication from the Director, Land Acquisition dated 15-12-1980 that a meeting of the Land Acquisition Committee took place on 28-11-1980 in which approval to the acquisition of 59-95 acres of land for the respondent-Samiti had been accorded. Oat of the land acquired some land would be set apart for those who would be rendered landless on account of the said acquisition. Besides the above condition it be examined whether land would be allotted to only such members, who possessed no land or house within the limits of the Patna Corporation and no member would be allotted more than 400 square metres land. It also said that Samiti would also obtain sanction to its plan from the Regional Development Authority, Patna. We have already noticed above the provision about creation of the land Acquisition Committee for the purpose of advising the appropriate Government in relation to acquisition of land in accordance with Part VII of the Act. Rule 3 of the aforementioned Rules contains a provision:

It shall be the duty of the Committee to advise the appropriate Government on all matters relating to or arising out of acquisition of land under Part VII of the Act, on which it is consulted and to tender its advise within one month from the date on which it is consulted.

Such advise could not be treated as approval of the proposal to acquire land. The stage on which the Committee may advise, can be gathered from the provision in Sub-rule (3) of Rule 4 of the aforementioned Rules, Rule 4(3) says As soon as may be after holding the enquiry under sub rule (2) the Collector shall submit a report to the appropriate Government and a copy of the same shall be forwarded by the Government to the Committee.

The advise of the Committee, therefore, could be asked for only after inquiry under Sub-rule (2) by the Collector into the matters enumerated in Sub-rule (1) of Rule 4 aforementioned. We have already noticed the infirmity with respect to the inquiry under Rule 4(2) of the Rules. Consultation with the Land Acquisition Committee, it appears, was not made as required by the Rules. The certified copy of the order sheet of the case shows that notices were issued by registered post to the persons interested in the land It also shows that quite a few of them appeared and filed their objections including the petitioner Societies and the raiyats or landholders there is an order signed on 5-3-1982 which shows that requisitioning department of the Government informed that 55 decimals of land was exempted from acquisition and accordingly, 55 decimals of lands were released to some of the objectors. A date was accordingly required to be fixed giving clear 15 days notice to them.

Thereafter, there is one line order purportedly signed on 7, 8, saying that 24-8-1982 was fixed as the date of hearing. There is nothing in the order dated 5-8-1982 or order dated 7-8-1982 to show that notice was issued to the objectors. Order dated 21-8-1982, however, shows that notices were issued to non-appearing land holders fixing 31-8-1982 as the date of hearing. The order dated 24-8-1982 however, states that 65 objectors had filed their appearance and 84 were absent, 7 had applied for time and two had directly filed appearance before the Additional Collector. There is nothing thereafter in the order sheet to show that any verification was made about service of notices upon non-appearing landholders or any opportunity of hearing was afforded to any of the objectors on any date after 31-8-1982. The Land Acquisition Officers, however, on 15-10-1982 analysed the objections of some of the landholders and forwarded the record to the Additional Collector on 17-l-1983. Thereafter Additional Collector passed orders upon the objections. There is, thus, nothing on the record to show that even those objectors, who had appeared and filed their objections, were heard by the Additional Collector. The certified copy of the order does not also show that even the Land Acquisition Officer gave any hearing to them. The original file of the case, however, contains a page which starts without any date. On the previous page, however, the order dated 24-8-1982 is recorded which is the same as in the certified copy except the signature of the Additional Collector at the bottom bearing the date 24-8-198? and words "Contd. at the bottom". This Additional page shows that the objectors were heard, that some of them were granted time and that 31-8-1982 was fixed as the next date for hearing. The following page contains two orders of which one is dated 31-8-1982 and the other dated 1-9-1982 purported by signed by the Additional Collector. The order dated 31-8-1982 shows that some of the objectors filed hazari and prayed for time but since the presiding officer was busy, the date of hearing was postponed to 1-9-1982. The order dated 1-9-1982 has got one line in the same ink and pen as the order dated 31-8-1982 "Sabhi Apatikarta ki upasthiti Abhilekh per Hai Sunbai ki gyi". Thereafter the order has been written in another ink and pen which order is to the effect that local inspection was thought necessary and accordingly, the Additional District Land Acquisition Officer was directed to hold inspection and submit his report by 1-10-1982. This part of the order dated 1-9-1982 and two signatures of the Additional Collector one dated 31-8-1982 and other dated 1-9-1982 appear to fee in the same ink. The order-sheet thereafter is almost the same as the certified copy but shows that the Additional District Land Acquisition Officer Shri Ram Binod Singh, who had been asked to submit report of the local inspection held by him had, in fact, given his opinion and comments upon the objections and recommended against most of the objectors. Here and there while making comments he also mentions about inspection but neither there is any reference for any verification to be made at the local inspection in the order of the Additional Collector dated 1-9-1982 nor any reference of any particular verification done by the Additional District Land Acquisition Officer has been kept on the record. The relevant order thereafter dated 17-l-19s3 has dealt with six objections in particular and other objections generally finally disposing of the objections. The petitioners have alleged that one full sheet in the order-sheet has been introduced besides some interpolations here and there only to meet the allegation that no hearing was given to the objectors at required by Section 5-A of the Act as amended by the Bihar Act, 11 of 1961. If the said sheet removed from the order sheet, it is obvious there was no hearing of any sort ever given to the objectors by the Additional Collector. If that sheet is not removed, there is some sembalance of hearing suggested in the order-sheet. Whether there was compliance of the statutory requirement of hearing or not is a different question. The suspicion which a Bench of this Court entertained on 6-10-1983 is confirmed by a mere glance to the contents of the said page and the earlier and subsequent pages of the order sheet. If order dated 24-8-1982 has not concluded as shown in the certified-copy thereof and continued as shown just below the signature of the Additional Collector, it will be difficult for the Additional Collector to explain the presence of his signature just at the end of the page at which the certified copy of the order sheet has concluded the order dated 24-8-1982. Even the additional part of the order dated 24-8-1982 does not end the hearing of the objections. The certified copy as also the original file confirmed that 31-84982 was the date fixed for appearance and filing objections by such land-holders, who had not appeared on or before 21-8-1982. The certified copy of the order-sheet does not contain any order after 24-8-1982 and before 15-10-1982. In fact, there has been no order according to the certified copy, between 24-8-82 and 15 10-1982. An extra page found in the order-sheet bears an order dated 31-8-1982 (3 or 31), the column of the dated bears an overwriting but not at the foot of the signature of the Additional Collector which is in a different ink used in the order dated 1-9-1982 on the same page after the sentence aforequoted. The Additional words in the order dated 1-9-1982 alone show that there was a direction to the Additional District Land Acquisition Officer to hold local inspection.

30. The Land Acquisition Officer had on 5-8-1982 ordered for placing the record of the case before the Additional Collector for fixing the date so that notice be given to the objectors. The Additional Collector in the margin on 6-8-1982 recorded "Dinak 21-8-1982 Sunvai ke liye nirdharit kiya jata hai" There is an overwriting on 21-8-1982 and on 21 to make it 24. That this overwriting was done subsequently becomes clear if the order dated 21-8-1982 is perused. The Land Acquisition Officer had issued notice fixing 21-8-1982. On that date he examined service report and found that some of the objectors had not been served with the notice. Accordingly, order for issuing the notice to them fixing 31-8-1982 was passed. It appears the page over-leaf was empty which has later been filled in by some order dated 24-8-1982, If 31-8-1982 was the date fixed, objectors could appear by the said date even subsequently. Some of them could file appearance on 24-8-1982 also. But there could be no hearing done on 24-8-1982 as the next date fixed was 31-8-1982. The interpolation by overwriting on the date "21" to make it "24" is only intended to introduce the. story of a hearing given to the objectors on 24-8-1982. Learned counsel for the parties have examined the order sheet including learned Counsel appearing for respondent No. 5 and respondent-Samiti. He has not been able to explain how there could be any hearing on 24-8-1982 when 31-8-1982 was already a date fixed on 21-8-1982. It cannot be suggested that 21-8-1982 was not a date fixed, that was the original date fixed that is why on 21-8-1982 pursuant to the notice objectors appeared and for non-appearing landholder another date was given for appearance, namely, 31-8-1982. How then 24-8-1982 become the date of hearing is unexplainable. The conclusion aforementioned is enough to nullify any so-called local inspection by the Additional District Land Acquisition Officer or so-called hearing given to the objectors by the Additional Collector, on 24-8-1982 or even on 1 -9-1982. Assuming that on 24-8-1982 hearing was held or there was a further hearing held on 1-9-1982, could there be no hearing after the so-called local inspection. Answer is, unless a hearing was given after local inspection, objectors were not confronted by the report of the Additional District Land Acquisition Officer and given opportunity to meet the findings of the Additional District Land Acquisition Officer. There would be no hearing worth the name unless opportunity to explain adverse report is given. It shall even in that situation assume the nature of an ex-parte inquiry, a decision taken without giving adequate opportunity of hearing and thus, acting mala fide in law.

31. We would have disposed of the application on the findings to which we have arrived at but anxious as we have been to understand the implications of acquisition of land belong to marginal landholder or landholders who may be rendered landholders on account of acquisition of their lands or when on the one hand there is a co-operative society seeking State's intervention for acquisition of land for housing purpose, there are also housing co-operatives of some of the petitioners on the other side who also claim to acquire land by negotiation or purchase for their members, some serious questions arise how to determine the public purpose of such acquisitions; and when societies are companies for the purpose of the Act, whether enquiry under Rule 4 of the aforementioned Rules and Section 40 of the Act besides objections under Section 5-A of the Act should take in their ambit determination of the nature of the objectors societies vis-a-vis the nature of the society for which land is sought to be acquired or not. We shall deal with this aspect of the matter after disposing of some of the contentions raised before us by Mr. Mahto, learned Counsel appearing for respondent No. 5, in the case of State of Bombay v. Bhanji Munji Ors. , a Constitution Bench of the Supreme Court has said that housing for the homeless is a public purpose. In the case of Babu Barkya Thakur v. State of Bombay and Ors. another Constitution Bench of the Supreme Court has said that the acquisition of land for a company is in substance a public purpose inasmuch as constructing dwelling houses and providing amenities for the benefit of the workmen employed by it and construction of some work of public utility serve a public purpose. The said view was expressed when Section 40 of the Act contained only Clauses (a) and (b) and not Clause (aa) which was introduced by Act 31 of 1962. In Barkya Thakur (supra), the Supreme Court has said further that it ay appear on the words of the Act contained in Part II, which contains the operative portions of the proceedings leading up to acquisition by the Collector that acquisition for a Company may or may not be for a public purpose. The provisions Part VII make it clear that the appropriate Government cannot permit the bringing into operation the effective machinery of the Act unless it is satisfied as aforesaid, namely that the purpose of acquisition is to enable the Company to erect dwelling houses for workman employed by it or for the provision of amenities directly connected with the Company or that the land is needed for construction of some work of public utility. These requirements indicate that the acquisition for a company also is in substance for a public purpose inasmuch as it cannot be seriously contended that constructing dwelling houses, and providing amenities for the benefit of the workmen employed by it and construction of some work of public utility do not serve a public purpose. Barky a Thakur's case, (supra) however is not an authority on the question as to whether there can be an acquisition for a company even on the assumption that it will not serve a public purpose. In the words of the Supreme Court: "It is not necessary for the purposes of this case to go into the question whether acquisition for a company, even apart from the provisions of Section 40, will be for a public purpose or justifiable under the provisions of the Act, even on the assumption that it will not serve a public purpose".

31-A. Mr. Mahto has conceded before us that there can be no acquisition for the respondent-Samiti without provisions of Section 40 of the Act being invoked and complied therewith. This judgment is also an authority for the proposition that absence of the words, "for a company" in Section 4(1) of the Act it is not indicative of the fact that unless it is for a public purpose no acquisition can be made for a company. The view expressed by the Supreme Court is to the effect that the purpose of the notification under Section 4 is to carry on a preliminary investigation with a view to finding out after necessary survey and taking of levels, and, if necessary, digging or boring into the sub-soil whether the land was adapted for the purpose for which it was sought to be acquired. It it only under Section 6 that a firm declaration has to be made by Government that land with proper description and area, so as to be identifiable, is needed for a public purpose or for a company. In the case of Pandit Jhanda Lal and Ors. v. The State of Punjab and Ors. provisions in Part VII of the Act and in Sections 6 and 17 thereof we reconsidered but without 1962 Amendment by which Clause (aa) has been introduced in Sub-section (1) of Section 40 of the Act.

32. The Constitution Bench of the Supreme Court has further said:-

There is no doubt that, as pointed out in the recent decision of this Court in AIR 1960 SC 1203, the Act contemplates acquisition for a public purpose and for a company, thus conveying the idea that acquisition for a company is not for a public purpose. It has been held by this Court, in that decision, that the purposes of public utility, referred to in Sections 40 and 41 of the Act, are akin to public purpose. Hence, acquisition for a public purpose as also acquisitions for a company are governed by considerations of public utility, But the procedure for the two kinds of acquisitions is different, in so far as Part VII has made substantive provisions for acquisitions of land for Companies, Where acquisition is made for a public purpose, the cost of acquisition for payment of compensation has to be paid wholly or partly out of public Revenues, or some fund. controlled or managed by a local authority. On the other hand, in the case of an acquisition for a Company, the compensation has to be paid by the Company. But, in such a case, there has to be an agreement, under Section 41, for the transfer of the land acquired by the Government to the Company on payment of the cost of acquisition, as also other matters not material to our present purpose. The agreement contemplated by Section 41 is to be entered into between the company and the Appropriate Government only after the latter is satisfied about the purpose of the proposed acquisition, and subject to the condition precedent that the previous consent of the Appropriate Government has been given to the acquisition. The 'previous Consent itself of the Appropriate Government is made to depend upon the satisfaction of that Government that the purpose of the acquisition was as laid down in Section 40. It is, thus, clear that the provisions of Sections 39 and 41 lay down conditions precedent to the application of the machinery of the Land Acquisition Act, if the acquisition is meant for a Company.

33. The Supreme Court has further proceeded to consider the effect of Part VII with Section 6 of the Act and has said:

The provisions of Part VII, read with Section 6 of the Act, lead to this result that the declaration for the acquisition for a company shall not be made unless the compensation to be awarded for the property is to be paid by a Company. The declaration for the acquisition for a public purpose, similarly, cannot be made unless the compensation, wholly or partly, is to be paid out of public funds. Therefore, in the case of an acquisition for a company simpliciter, the declaration cannot be made without satisfying the requirements of Part VII. But, that does not necessarily mean that an acquisition for a Company for a public purpose cannot be made otherwise than under the provisions of Part VII, if the cost or a portion of the cost of the acquisition is to come out of public funds. In other words, the essential condition for acquisition for a public purpose is that the cost of the acquisition should be borne, wholly or in part, out of public funds. Hence an acquisition for a company may also be made for a public purpose, within the meaning of the Act, if a part or the whole of the cost of acquisition is met by public funds. If, on the other hand, the acquisition for a company is to be made at the cost entirely of the Company itself, such an acquisition comes under the provisions of Part VII.

The law aforementioned undiluted, notwithstanding certain amendments in the Act and many pronouncements of the Supreme Court thereafter, is:-(1) there can be no agreement as contemplated by Section 41 of the Act between the company and the appropriate Government unless the latter is satisfied about the purpose of the proposed acquisition (23 no step for declaration under Section 6 of the Act shall be taken in the case of acquisition for a company without the previous consent of the appropriate Government which previous consent itself is made to depend upon the satisfaction of that Government that the purpose of the acquisition was as laid down in Section 40 of the Act. We have already examined the scheme of the Act with Bihar Amendment therein and the Rules aforementioned which govern acquisition of land for a Company. The previous consent of the respondent-Government has been made dependent as held by the Supreme Court on its satisfaction that the purpose of the acquisition was as laid down in Section 40 of the Act and this can be achieved by satisfaction as to the nature of the industry or work of the company and matters covered by Sub-rule (1) of Rule 4 aforementioned. Without such satisfaction any consent by the appropriate Government and by the State Government shall be invalid. Respondents have not pleaded before us that without there being an agreement and compliance with the requirements of Section 40 of the Act and Rules aforementioned solely on the ground that the acquisition in question is for a public purpose, declaration made under Section 6 of the Act can be sustained. They have contended before us that they are co-operative societies, and acquisition has been made for a co-operative society respondent Samity which for the purposes of the Act is a company but not a private company or a Government company. Some attempts have been made before us to show that the Society's constitution is such that it may satisfy the definition of a public company. We shall particularly refer to this aspect after considering a few more case-laws brought to our notice by the learned Counsel for the parties. We however, repeat once again at we have already said earlier that if the respondent-Samiti is not of the nature of a private company or a government company it may subject to the conditions under Sections 40 and 1(1)(aa) and Rule 4 of the aforementioned Rules qualify as a company for which land can be acquired. There has, however, been no investigation of such facts which may lead to determination of the character or nature of the respondent-Society either by the Collector under the Act or by any other authority under any law. In the case of R.L. Arora v. State of Uttar Pradesh and Ors. AIR 1968 SC 1230, the 1962 Amendment which introduced Clause (aa) in Sub-section (1) of Section 40 of the Act has been considered. The Supreme Court in its majority judgment has said: -

It may be conceded that on a literal construction the adjectival clause, namely, 'which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose', qualifies the word "company" and not the words 'building or work' for the construction of which the land is needed. So prima facie it can be argued with some force that all that Clause (aa) requires is that the company for which land is being acquired should be engaged or about to be engaged in any industry or work which is for a public purpose and it is not required that the building or work, for the construction of which land is acquired should be for such public purpose. In approaching the question of construction of this clause, it cannot be forgotten that the amendment was made in consequence of the decision of this Court in R.L. Arora's case, 1962 Sup. 2 SCR 149: AIR 1962 SC 764 and the intention of Parliament was to fill the lacuna, which according to that decision, existed in the Act in the matter of acquisitions for a company; nor can it be forgotten that Parliament when it enacted the Amendment Act was aware of Article 31(2) of the Constitution which provides that land can only be acquired compulsorily for a public purpose and not otherwise. It could not therefore be the intention of Parliament to make a provision which would be in contravention of Article 31(2) though it may be admitted that if the language used is capable of only one construction and fails to carry out the intention of parliament when making the amendment, the amendment may have to be struck down if it contravenes a constitutional provision. Further, a literal interpretation is not always the only interpretation of a provision in a statute and the Court has to look at the sitting in which the words are used and the circumstances in which the law came to be passed to decide whether there is something implicit behind the words actually used which would control the literal meaning of the words used in a provision of the statute. It is permissible to control the wide language used in a statute if that is possible by the setting in which the words are used and the intention of the law-making body which may be apparent from the circumstance in which the particular provision come to be made. Therefore, a literal and mechanical interpretation is not the only interpretation which courts are bound to give to the words of a statute; and it may be possible to control the wide language in which a provision is made by taking into account what is implicit in it in view of the setting in which the provision appears and the circumstances in which it might have been enacted.

Section 40 (1) as it stood before the amendment prohibited consent being given to acquisition of land by a company unless the acquisition was for one of the two reasons mentioned in Clauses (a) and (b) Those two clauses clearly showed that acquisition for a company was for a public purpose and such acquisition could not be made for any purpose other than public purpose. Between the existing Clause (a) and Clause (b) of Section 40(i). we find Clause (aa) being inserted We also find that Clause (aa) specifically uses the words "public purpose and indicates that the company for which land is required should be engaged or about to be engaged in some industry or work of a public purpose. It was only foe such a company that land was to be acquired compulsorily and the acquisition was for the construction of some building or work for such a company, i.e. a company engaged or about to be engaged in some industry or work which is for a public purpose. In this setting it seems to us reasonable to hold that the intention of Parliament could only have been that land should be acquired for such building or work for a company as would subserve the public purpose of the company; it could not have been intended, considering the setting in which Clause (aa) was introduced, that land could be acquired for a building or work which would not subserve the public purpose of the company In the circumstances it seems to us clear that the literal construction of the clause based on rules of grammar is not the only construction of it and it is in our opinion legitimate to hold that the public purpose of the industry of the company, which is imperative under the clause, also attaches to the building or work for the construction of which land is to be acquired.

.... ... .... .... .... ....

In short, the words "building or work" used in Clause (aa) take, their colour from the adjectival clause which governs company for which the building or work is being constructed and acquisition under this clause can only be made where the company is engaged or is taking steps to engage itself in any industry or work which for a public purpose, and the building or work which the company is intending to construct is of the same nature namely, that it is a building or work which is meant to subserve the public purpose of the industry or work for which it is being constructed. It is only in these cases where the company is engaged in an industry or work of that kind and where the building or work is also constructed for a purpose of that kind, which is a public purpose, that acquisition can be made under Clause (aa).

It is an authority, therefore, for the proposition that it is not only the public purpose of the industry or work of the company which alone will qualify a company for moving the State Government for acquisition of land for it. A company shall be required to further satisfy that the building or work for which the land is needed is also a public purpose.

34. This case is also an authority for the view which we have already taken an acquisition for the purpose of Clause (aa) can only be made for a Government company or a public company and cannot be made for a private company or individual and since a Government company has been now categorised separately under the Act only for public company. A society registered under the Societies Registration Act or Co-operation Societies Act also may qualify as a housing Scheme for landless shall be a public purpose. Acquisition for such a purpose by a company which is engaged or is likely to be engaged in work or industry which is a public purpose shall, thus, be one which may be covered by Clause (aa) of Sub-section (1) of Section 40 of the Act. A company which is constituted with the object of constructing houses for landless or homeless can legitimately claim that it is a company engaged in a work which is a public purpose.

35. Mr. Mahto, learned Counsel appearing for respondent No. 5 referred to the judgment of the Supreme Court, in the case of Katila Shakarabhai and Ors. v. The State of Gujarat and Ors. AIR 1972 SC 984. In that judgment the Supreme Court has said:

We are unable to accede to the contention of the appellant that a housing scheme for a limited number of persons cannot be considered as a public purpose.

We are also unable to concede to the proposition that the need of a section of the public cannot be considered as a public purpose.

.... .... .... .... ... ....

A judgment of Allahabad High Court, however, has been cited at the Bar which has gone into the question of a public purpose, the meaning of the words in Clause (aa) of Sub-section (1) of Section 40 of the Act and into the character of a co-operative housing society for which the land had been acquired. In the case of Shanti Nagar Co-operative Housing Society Ltd v. Nar Singh Das Bhargava and Ors. an elaborate discussion has been made of the object of the said co-operative society and the provisions in Clause (aa) aforementioned and the law has been cited in the following words:

The idea of this provision is that people in need should be found accommodation. Persons in need or accommodation are the public and therefore serving their need, would be serving a public purpose.

We are, however, not in a position in the instant case to predicate into the objects of the respondent-Samiti and know whether its membership is open to all persons in need of accommodation or not and if there are some restrictions upon the membership those restrictions rob the respondent-Samiti of the character of a public company or not. We are also not in a position in the instant case to know in the absence of facts proved, that the respondent Samiti has all ingredients of a public company and not of a private company. In that case, Allahabad High Court had the advantage of looking into the various provisions of bye-laws of the society which stated inter alia:

"The memberships of the society shall be open to all persons of good character, sound mind, and above the age of eighteen years residing or carrying on any trade or business or profession in Etah who own no house or land and are not members of any other housing society operating within Etah provided that persons whose tend has been acquired by the society shall be eligible for membership even if they are not residing or carrying on any trade or business or profession in Etah. Further the following classes of persons may also with the Registrar's special permission obtained individually in each case be admitted as members;

(a) Persons who own house within the area of the society but whose houses are situated in sanitary surroundings or are too small for their needs and are incapable of being adequately extended or improved.

(b) Persons who own land within the area of the society but that land is either not situated in a desirable locality or is too small to permit the building on it of a house of reasonable size.

(c) persons whose ancestral home is in Etah who at present are residing elsewhere, Members and heirs of the deceased members shall also be eligible the admission and they shall exercise the right of membership, but minor nominees and heirs shall exercise the right of membership only through their guardians.

The aforementioned words about the membership of the society took the Allahabad High Court to the conclusion that:

The words reproduced above would show that all members of public irrespective of their caste, creed and colour can be members of the society provided that they fulfil the requirements of this bye-law.

There are no such facts pleaded before us. Moreover, even if some facts were before the' Court, the court would advisedly refrain from deciding. Such decision must always come from the appropriate Government as the appropriate Government alone is the best judge of the question whether a certain company which claims need of land is a company engaged in any industry or work which is a public purpose or not or/and building or work for which land is needed is a public purpose or not.

36. It is not necessary to multiply the decisions after decisions on this question. It is enough to reiterate the law stated in one judgment of this Court in the case of Keshav Pal and Ors. v. State of Bihar and Ors. 1985 PLJR 779. This decision has been cited at the Bar by Mr. Mahto to persuade us to hold that in a case like this where all formalities of law have been complied with and declaration under Section 6 of the Act has already been issued, this Court should decline to exercise its discretion. This has been suggested on the basis of the observations to the effect that a man who sat on the fence and allowed the Government to complete acquisition proceedings on the basis that the notification under Section 4 and declaration under Section 6.,were valid and then attacked notification on grounds which were available to him at the time when the notification was published would be putting a premium on dilatory tactics. We have given our. anxious consideration to this aspect. There is no apparent ground to reject the writ application at the threshold. In the instant case, one cannot say that there were any laches on the part of the petitioners. They were ready and willing to participate in the inquiry under Section 5-A of the Act. They were noticed and they appeared. They though there would be a hearing but there was no hearing done. How then it can be said that they sat on the fence ? In many cases, people who are vigilant and aware of their rights alto suffer due to tactics unknown to law, such as one noticed by us above. How can there be a situation in which objections are not heard but are disposed of and when a grievance is made that no opportunity of being heard was given, interpolations are made in the order-sheet.

37. Before we record our conclusion, we may indicate that even if there are materials to hold that respondent No. 5 is a Housing Society which is engaged in a work which is a public purpose and that the land is needed by it for a public purpose, still there may be situations in which the said acquisition may not be granted or allowed. A person who has got only one home and only one roof over his head may not be allowed to be deprived of his shelter. That shall cause more harm to the public interest than the acquisition promoting public interest. Those who have come before us alleging that they constituted a co-operative society and acquired land by negotiation and purchase something which respondent No. 5 intends to do for its members, they may be truthfully stating so before us or may be introducing such facts only for the purpose of their case. But without there being examination of the nature and character of such petitioner societies and without there being a determination by a competent authority of the need of the petitioner-societies, on the one hand, and respondent-Samiti, on the other band it cannot be said that the acquisition for respondent No. 5 shall be for a public purpose. When two public interests clash, those, who are empowered to decide are required to weigh and declare in favour of one which outweighs the other. If the housing is the purpose, why prefer one housing to other. If housing to homeless is the purpose, why make another homeless. These competing interests must play their role, unless there is adequate determination of such interests and adjudication with an open mind, there is always likelihood of injustice.

38. We have abstained from expressing any opinion about one or the other petitioners or even about respondent No. 5 as their needs may be genuine. The State is duty bound to consider such claims for houses and act in accordance with law. Individual cases will have to be examined by the competent authority and full opportunity for the said purpose will have to be given to all the parties.

39. To conclude (1) A co-operative society may qualify as a company for acquisition of land if it satisfies the conditions under Section 40 of the Act. This, however, shall have to be determined by the Collector under the Act in accordance with the Land Acquisition (Company) Rules, 1963 and again under Section 5-A of the Act after hearing objections to the proposed acquisition.

(2) The appropriate State Government may appoint any officer for inquiry into the matters enumerated in Section 40 of the Act or leave it to the Collector to enquire into the matters herein. While holding inquiry under Section 5-A of the Act, a co-operative society may qualify for acquisition under Clause (aa) of Sub-section(1) of Section 40 of the Act if it satisfies the definition of a public company but shall not so qualify if it has got any ingredients of a private company; a private company, however, including a co-operative society, which may be deemed to be a private company can still qualify for such acquisition if requirement of Clause (a) of Sub-section (1) of Section 40 and Clause (b) thereof are satisfied and (3) The Collector under the Act is duty bound to hold inquiry under Section 5-A of the Act, afford full opportunity to the parties and thereafter take a decision whether to allow the objections or to reject the same. The respondents-State Government have failed to apply the requirements of Rule 4 of the aforementioned Rules and Section 5-A of the Act inasmuch as no inquiry in accordance with Sub-rule (2) of Rule 4 of the Rules has been held. No report of the inquiry under Sub-rule (2) was forwarded by the State Government to the Land Acquisition in violation of the command of the law. Inquiry under Section 5-A of the Act is vitiated. The State Government before consenting to the declaration under Section 6 of the Act has failed to act in accordance with law inasmuch as its consent is violative of Sub-rule (3) of Rule 4 of the aforementioned Rules and provisions in Section 40 of the Act, for the reason of the same having been held without affording reasonable opportunity of being heard to the petitioners and without taking into consideration the requirements of law particularly provisions in Part VII of the Act.

40. For the reasons aforementioned, in our considered opinion, all the writ applications are fit to be allowed and the impugned declaration under Section 6 of the Act vide notification dated 16/18-3-1983 as contained in Annexure-2 in C. W, J. C. No. 2755 of 1988 is fit to be quashed. The case, however, has to be remitted to the respondents-State Government for further proceeding in the matter of inquiry under Section 40 of the Act and Rule 4 of the aforementioned Rules and under the Act for inquiry under Section 5-A the Act into objections filed by the petitioners in accordance with law.

41. Let a writ in the nature of certiorari accordingly, issue quashing the notification aforementioned and writ in the nature of mandamus issue to the respondents to proceed in the matter in accordance with law and in the light of the directions aforementioned. The applications are allowed with costs payable by the respondents-State Government to the petitioners. Hearing fee each is Rs. 1,500/-