Bombay High Court
Metro Theatre Bombay Ltd. And Anr. vs Union Of India (Uoi) And Ors. on 20 July, 1987
Equivalent citations: AIR1988BOM183, AIR 1988 BOMBAY 183
ORDER
1. This is a petition challenging Section 4 notification issued under the Land Acquisition, Act, 1894 (hereinafter "the Act") in respect of Metro Theatre at Bombay. The challenge is on various grounds, particularly on grounds of mala fides, grounds of colourable exercise of powers, of hostile discrimination and want of authority etc.
2. Before I deal with the facts, I must deal with the preliminary objections raised by Mr. Desai, who appears for the State of Maharashtra and the Union of India (i.e. respondents 1, 2 and 3). Firstly, he contends that this petition is not maintainable, inasmuch as the petitioners will have a chance to object to the said acquisition when objections are heard under Section 5A of the Act and before Section 6 notification is issued. The second objection is that the petition contains several disputed questions of facts. Thirdly, he submits that in the petition there are number of allegations made against the Reserve Bank of India (hereafter "the RB1") and that the RBI has not been made a party to this petition.
3. As regards the first objection of Mr. Desai, I must say that he was not clear in his submissions. At one stage he gave me an impression that he would concede that even Section 4 notification could be challenged on the ground of mala fides; at another stage he seemed to assert that the petitioners could challenge acquisition only after Section 6 notification is issued. Whatever it may be. Since objections have been raised, I must deal with. Firstly, I must say that there cannot be any blanket proposition that under no circumstances Section 4 notification can be challenged. Secondly, it has been held that if a writ petitioner is in a position to establish conclusively that even at the time of the objections of the notification under Section 4 of the Act, there was no public purpose or the same is contended as mala fide, there is no bar to such a petition : (See Radhey Sham Gupta v. State of Haryana, (FB) and also Gopal Innani v. State of A.P., ). In a recent case of Collector (Distt. Magistrate), Allahabad v. Raja Ram, , the Supreme Court while dealing with a case at he stage of Section 4(1) notification expressly held : "the infirmities therein cannot be wholly overlooked on the specious plea that the Courts do not interdict at the stage of a mere proposal", (para 12).
In fact, the Supreme Court found fault with the High Court when it observed: "The High Court disposed of the contention by an over simplification of this tangled web of facts without making the least attempt at unearthing the real motives of the sammelan." (para 24). Section 4 notification presupposes a prior decision on the part of the Government to initiate proceedings to acquire lands for a public purpose. If that decision can be shown to be not in good faith, one need not wait till Section 6 notification is issued.
4. Mr. Desai equated the stage of Section 5A of the Act when objections are heard with that of an alternate remedy being available to the petitioners in that form. He also drew my attention to the form of Section 4(1) notification, at the foot of which it has been set out what objections can be raised before the Special Land Acquisition Officer. In that it is mentioned that objections could be, inter alia, to the effect that the notified purpose is not genuinely or properly public purpose, or that the property has been selected maliciously or vexatiously. It is well settled that the mere availability of an alternative remedy is no reason for refusal of any relief under Article 226 of the Constitution. In any case, Section 5A of the Act is not an alternate remedy. Our experience should tell us that very often, where the circumstances indicate a mind that is made up, the hearing of objections provides no guarantee of any change of mind. I, therefore, find that there is no substance in this preliminary objection at all.
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36. This takes me to the next contention viz. the purported acquisition is of a commercial undertaking and that is beyond the powers under the Land Acquisition Act, 1894. Mr. Andhyarujina submitted that the respondents, in fact, sought to acquire Metro Theatres as a going concern. He submitted that if the Government really wanted to acquire such a commercial undertaking, it could have brought in a proper law in the Parliament and acquired the same. Mr. Andhyarujina gave me a list of several Acts whereby the Government has acquired various undertakings from time to time by statutes made in the Parliament. He submitted that the Land Acquisition Act, 1894 is essentially concerned with the acquisition of land as such and not any business concern at all.
37. In this connection, he drew my attention to certain cases, though arising under the Defence of India Rules, 1939, but it is interesting to look into these cases. Firstly, he drew my attention to the case of Lahore Electric Supply Co. Ltd. v. Province of Punjab, reported in AIR 1943 Lah 41 (FB). This is a case which arises under Rule 75A, Defence of India Rules, 1939. Rule 75A, Defence of India Rules, is as follows :
"Requisitioning of property :
(1) If in the opinion of the Central Government or the Provincial Government it is necessary or expedient so to do for securing the defence of British India, public safety, the maintenance of public order or the efficient prosecution of the war, or for maintaining supplies and services essential to the life of the community, that Government may by order in writing requisition any property, moveable or immovable, and may make such further orders as appear to that Government to be necessary or expedient in connection with the requisitioning."
Based on this Rule, the Government sought to requisition Lahore Electric Supply Company, a licensee within the meaning of the Electricity Act, 1910. It appears that initially this was requisitioned under Rule 75, but later on it was acquired under Rule 75A. This was challenged. It was argued that Rule 75A empowered the Government to requisition either movable or immovable property and in this case the Government had in fact only acquired bits of moveable and immoveable property and nothing else. This was negatived and the Full Bench of the High Court stated as follows :
"In my opinion it is impossible to argue that an undertaking such as the Lahore Electric Supply Company, which was what has been called a "going concern", was nothing but a collection of items of moveable and immovable property. A careful examination of the provisions of Rule 75-A shows conclusively that this rule is not applicable at all to the requisition or acquisition of an "undertaking" ...."
Here, the Rules provided for requisitioning of any property, moveable or immoveable and yet the Court held that what was sought to be taken was a "going concern" and the Rule cannot be used to requisition or for acquisition of an "undertaking". This was referred to in a subsequent case of the Calcutta High Court viz. case of H. C. Gupta v. Machertich John, reported in AIR 1946 Cal 140. Here, under the same Rules, a hotel was sought to be requisitioned. Here, the requisition of a "Commercial Undertaking" was justified on the basis that such a power to requisition was there in Rule 75A. The Court said that the power to requisition under the Rule expressly applies to moveable property and a "commercial undertaking" is a properly of that description. Therefore, here, if the requisition was justified, it was not on the basis that what was requisitioned was an immoveable property, but on the basis that power was there in the law. Mr. Andhyarujina then drew my attention to a case viz. Tan Bug Taim v. Collector of Bombay, reported in AIR 1946 Bom 216. In this case both the Lahore case and the Calcutta case were referred to. Here, it is a case of requisitioning of a Chinese Restaurant for the Royal Indian Navy. It was argued in this case that though ostensibly the respondent was requisitioning the premises occupied by the Chinese Restaurant, including landlord's fittings and fixtures which if literally read would mean that the requisitioned property was land, but, in fact the respondent under the guise of that requisition, he was also requisitioning the commercial undertaking of the petitioners. Dealing with this contention, the Court said that the Government had the power to requisition a "commercial or a business undertaking" and the order in that behalf would be an order not without jurisdiction, power or authority. This was on the basis that under Rule 75A, Defence of India Rules, read with Section 2, Sub-section (2)(xxiv), Defence of India Act, the authorities had powers to requisition all kinds of property, moveable or immoveable, that is to say all kinds of property, land, building, machinery, chattels, etc.
38. Therefore, the question in the present case is that since the Government has proceeded under the Land Acquisition Act whether it is possible for them to acquire Metro Theatre as a "going concern" under the Act of course, what was sought to be argued on behalf of the respondents is that the Government is not acquiring the theatre as such but that the Government is only acquiring the land comprised in the theatre. Mr. Desai pointed out that the Schedule to the notification speaks of the land" and the plot and, therefore, there is nothing wrong in this notification. In my view, that would be simplifying the matter without any relation to reality, and in the circumstances of the case it would not be justifiable. One has to consider what the Government had thought of when acquiring these two theatres. That can be found out on the basis how the Government acted and reacted at various stages. Firstly, in the minutes of the meeting held on 4th July, 1974 the Government has clearly set out as to what they are proposing to purchase. In these minutes, they have clearly set out that the Government of India was interested in acquiring "the two undertakings in working condition". Of course, the Government was not interested in purchasing the shares of the theatre or the goodwill, as such. However, they have considered taking over the staff and to what extent, etc. Thereafter they have stated that the Government of India was not taking over the companies, but the lands, buildings, furnitures and other assets of the two properties. In the subsequent letters and minutes of the meeting, it has been made clear that the Government wants these two theatres not for any other purpose but to use the same as theatres for their educational regional pictures etc. Of course the name and the goodwill are not to be acquired. But that may not be very material when the FFC or the Government begins to show their pictures. For all purposes, the theatre continues.
39. It is true that the definition of 'land' as given under the Land Acquisition Act includes benefits to arise and things attached to the earth or permanetly fastened to anything attached to the earth etc. It is true under Section 23 of the Act, compensation may have to be paid in respect of any damage sustained by the person interested by reason of acquisition, injuriously affecting his other property, moveable or immoveable or his earnings etc. But, I think, there can be no two opinions that the Land Acquisition Act is essentially concerned with the acquisition of land as an immoveable property as such. It may be that on such a land, there may be certain moveable properties here and there: it may be that on acquisition, the person may suffer in his earning if any business is carried on, on such a land. Of course, he has to be compensated for all the loss that he might sustain. But that does not mean, that the Government may acquire the business and say that it is mainly an acquisition of land and incidentally of the business. That is not the object of acquisition. In this case throughout the Government has been asserting that they want this theatre as an outlet for their films. That is how the acquisition becomes an acquisition of a commercial undertaking for the purpose of release of their own pictures. Essentially and in substance, it is an acquisition of a "running concern". Of course, the name of Metro would not be there. That would not make any difference. Similarly, the goodwill, attached to Metro would not be there. That may not be necessary. But every other paraphernalia annexed to this business would continue when the Government releases its pictures through this theatre. Under the Defence of India Rules referred to above. thoughthe Lahore High Court said that that was not possible, the other two High Courts sought to justify the same on the basis that such a power was found in the Rule. In the present case there is no doubt that under the Land Acquisition Act there are no such powers to acquire a running business or any commercial undertaking. Therefore, it is in this sense also the entire acquisition becomes without the authority of law and. therefore, it must necessarily be set aside.
40. Mr. Desai as also Mr. Zaiwalla submitted that it cannot be said that the acquisition is for a non-existing purpose or the acquisition here is for a purpose which is unlawful. They also submitted that assuming that the Government had certain designs to take over initially, without acquiring, it was open to the Government to acquire these theatres for a public purpose, and in that event earlier effort to take over cannot be held against the Government.
41. 1 wish that the matter could be as simple as that. It is clear from all the surrounding circumstances, that the sole purpose of the respondent was to deprive the petitioners of the cinema business which they were carrying on in these theatres. The Government had not genuine need as such at the time the Government thought of taking over these two theatres. The Government thought that it could bargain and pressurise the petitioners and take over. Having failed in Us first attempt, it took the second step to achieve the first mentioned object, by acquisition of land, on a ground which was noi in existence at the time it thought of acquiring. The Government supplied this ground at a later stage without any genuine need in that behalf. In the result the petitioners succeed and I pass the following order :
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