Gujarat High Court
Walker Anjaria & Sons Pvt Ltd vs State Of Gujarat on 14 August, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025
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Reserved On : 09/07/2025
Pronounced On : 14/08/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13078 of 2000
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA
AGARWAL
and
HONOURABLE MR.JUSTICE D.N.RAY
=============================================
Approved for Reporting Yes No
✔
=============================================
WALKER ANJARIA & SONS PVT LTD & ANR.
Versus
STATE OF GUJARAT & ORS.
=============================================
Appearance:
MR ASHISH H SHAH(2142) for the Petitioner(s) No. 1,2
MS HETAL PATEL, AGP for the Respondent(s) No. 1,3,4
MS GARIMA MALHOTRA FOR MR SATYAM Y CHHAYA(3242) for
the Respondent(s) No. 2
MR UDAY R BHATT(192) for the Respondent(s) No. 5
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR.JUSTICE D.N.RAY
CAV JUDGMENT
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
1. Heard Mr.Ashish Shah, learned advocate for the petitioners, Ms.Garima Malhotra, learned advocate appearing for the respondent No.2, Ms.Hetal Patel, learned Assistant Page 1 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined Government Pleader for the State respondents and Mr.Uday Bhatt, learned advocate appearing for respondent No.5.
2. The present petition has been filed in the year 2000 to challenge the notification dated 10.03.1999 (Annexure -'A'); the notification dated 13.04.2000 (Annexure- 'B') and also the notice dated 28.11.2000 issued under Section 9 of the Land Acquisition Act, 1894 (for short, "the Act, 1894"); with the further relief of staying the further proceedings pursuant to the notice under Section 9 pending hearing of the writ petition. By means of an amendment carried out vide Court's order dated 11.04.2016, prayer 24(AA) has been added in the following manner :-
"24(AA) This Hon'ble Court may be pleased to issue an appropriate writ, order or direction and declare that the notification dated 10.03.1999 at Annexure-A, and the notification dated 13.04.2000 at Annexure-B and the notice dated 28.11.2000 at Annexure-L have stood lapsed in view of provisions contained in section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 having came into effect from 1.1.2014 and further be pleased to quash and set aside the same."
3. A categorical statement has been made in the writ petition that the physical possession of the land in question has not been taken from the petitioners and same is still with the petitioners and the petitioners have also not paid or tendered any compensation till date. By adding paragraph 21A to the writ petition it is further asserted that the acquisition proceedings pertaining to the land in question in the ownership of the petitioners, stood lapsed by virtue of Page 2 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (for short, "RFCTLARR Act, 2013").
4. Thus, two alternative prayers were made in writ petition, firstly that the acquisition notifications of the year 1999/2000 under the Land Acquisition Act, 1894 (in short as 'the Act, 1894') be quashed or else acquisition proceedings be considered as having been lapsed in view of Section 24(2) of the RFCTLARR Act, 2013.
5. The acquisition under challenge was for a private company within the meaning of Part-VII of the Land Acquisition Act, 1894, which provided the procedure for acquisition of land for companies. A perusal of the notification dated 10.03.1999 under Section 4 of the Act, 1894, at page '46' of the paper-book indicates that the purpose of acquisition was :-
"Purpose : Birla VXL Ltd. (Digjam Woollen Mills), Company establishing expansion project related utilities, effluent treatment plant and other allied infrastructures facilities."
6. Three Revenue Survey numbers, namely Revenue Survey No.150 paiki (admeasuring 1-7-24, comprised in City Survey No.139); Revenue Survey No.151/3B (151/3 paiki) (admeasuring 0-90-04, comprised in City Survey No.139) and Revenue Survey No.151/3A (151/3 paiki) (admeasuring 0-42- 34, comprised in City Survey No.141), situated at District Jamnagar, were notified as a proposal for acquisition for the purposes of expansion project related utilities, effluent Page 3 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined treatment plant and other allied infrastructure facilities for the company named as Birla VXL Limited (Digjam Woollen Mills) (company), the respondent No.2 herein.
7. The first paragraph of the notification under Section 4 of the Act, 1894, dated 10.03.1999 is relevant to be extracted hereinunder :-
"Whereas it appears to the Government of Gujarat that the lands specified in the Schedule hereto are likely to be needed for the Company : BIRLA VXL LIMITED (DIGJAM WOOLLEN MILLS), engaged in public purpose which is establishing expansion project related utilities, effluent treatment plant and other allied infrastructure facilities.
It is hereby notified under the provisions of section 4 of the Land Acquisition Act, 1894 (1 of 1894) that the lands are likely to be needed for the purpose specified above."
8. By the notification under Section 6 of the Act, 1894 dated 13.04.2000 one more plot, namely, Revenue Survey No.151/3A (151/3 paiki) (admeasuring 0-56-92, comprised in City Survey No.141 paiki) was added in the acquisition.
9. The petitioners herein, however, are challenging the acquisition of only two plots belonging to them, comprised in Revenue Survey No.150 paiki and Revenue Survey No.151/3B (151/3 paiki) (total area admeasuring 1-07-24 plus 0-90-04), belonging to them.
10. The statement made in the declaration notification dated 13.04.2000, is further relevant to be extracted hereinunder :-
"No.AM-2000-144-M-LJM-1695-1239-GH- Whereas Page 4 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined Government Notification No.AM-99-99-M-LJM-1695- 1239-GH dated 10.3.99 it as notified that lands specified in the schedule hereto (hereinafter referred to as the said lands) were likely to be needed for the public purpose specified in column No.4 of the schedule hereto.
And whereas the Government of Gujarat is satisfied after considering the report of the Assistant Collector, Jamnagar under sub Section (2) of Section 5-A of the Land Acquisition Act, 1894 (1 of 1891) that the said lands are needed to be acquired at the public expenses for the purpose specified in column 4 of the schedule hereto.
It is hereby declared under the provisions of Section 6 of the said Act that the lands are required for the purpose specified in column of the schedule hereto.
The Assistant Collector, Jamnagar is hereby appointed under clause (c) of Section 3 of said Act to perform the functions of a Collector for all proceedings hereafter to be taken in respect of the said lands. He is also directed under Sec.7 of the said Act to take order for the acquisition of the said lands.
A plan of the said lands can be inspected at the Office of the Assistant Collector office, Jamnagar."
11. The specific challenge to the acquisition is on the ground of non-compliance of the provisions of Sections 39 and 40 as contained in Part-VII of the Land Acquisition Act, 1894 read with the Rule 4 of the Land Acquisition (Companies) Rules, 1963 (for short, "the Rules, 1963"), framed under Section 55 of the Act, 1894. It is the case of the petitioners that the petitioners have been deprived of their lands without any authority of law.
12. The contention in the writ petition is that the petitioners had purchased the lands in question by registered sale deed Page 5 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined dated 08.12.1971 and the name of the petitioner No.1 - company was mutated in the revenue records, namely Village Form No.6 vide Entry No.3795 dated 14.11.1973, which was certified on 18.12.1973. The land in question was purchased by the petitioners for expanding the company's activities by starting an independent unit for production of Woolen Sodi blanket. Development permission was granted by the Municipal Corporation vide order dated 20.08.1991, but on account of encroachment and pendency of some suit proceedings, constructions could not commence.
13. The petitioners made inquiries about acquisition upon publication of the notification dated 13.04.2000 under Section 6 of the Land Acquisition Act, 1894 in the daily newspaper dated 19.04.2000. An application was filed in the office of the Assistant Collector and Land Acquisition Officer, Jamnagar on 31.05.2000 to get certified copies of the report of the Land Acquisition Officer, documents relating to the publication of notice, copy of the notification under Section 4. Out of the aforesaid documents, only the copy of Rojkam dated 21.04.1999 was provided to the petitioners showing that the notice was affixed on the land bearing Survey Nos.150 and 151/3 along with the copies of the notifications under Sections 4 and 6; respectively. The contention in the writ petition is that entire acquisition is a result of irregularities committed during the course of making inquiry under Sections 39 and 40 of the Act, 1894. Vide application dated 03.07.2000, the petitioners have applied for getting certified copies of the following documents from the office of the Assistant Collector :-
Page 6 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined "(1) Preliminary report under Section 3A of the Land Acquisition Act along with all connected papers.
(2) Copy of the report of the Preliminary inquiry under Section 4 of the Land Acquisition Act along with related papers.
(3) Report under Section 5A of the Land Acquisition Act along with other related papers.
(4) Copy of the previous report under Section 39 of the Land Acquisition Act issued by the Government of Gujarat along with other related papers;
(5) Inquiry report under Section 4 of the Land Acquisition Act along with other related papers.
(6) The notices issued to the interested persons and proof of service of such notices."
14. A categorical assertion has been made in the writ petition that none of the documents asked by the petitioners were supplied to them.
15. In the meantime, the petitioners had received notice dated 28.11.2000 under Section 9 of the Act, 1894 wherein date fixed was 12.12.2000, whereafter the present petition has been filed challenging the proceedings for acquisition of the lands in question for the purpose of a private company.
16. It was argued by Mr.Ashish Shah, the learned counsel for the petitioners that the notification under Section 6 of the Act, 1894 states that an inquiry under Section 5A of the Act had been made and the Government of Gujarat had recorded satisfaction after considering the report of the Assistant Collector, Jamnagar under Sub-section (2) of Section 5-A of the Land Acquisition Act, 1894, that the lands in question are Page 7 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined needed to be acquired at the public expenses for the purposes specified in the schedule, which is noted hereinbefore.
17. It is submitted that inquiry under Section 5A is not a substitute for an inquiry under Section 40 contained in Part- VII which was required to be adhered to for the acquisition of land for a private company. Rule 4 of the Land Acquisition (Companies) Rules, 1963, required a satisfaction to be recorded by the appropriate government before initiating acquisition proceedings with regard to the matters stated therein such as 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.
18. The contention is that as per the procedure prescribed in Section 40 of the Act, 1894 read with Rule 4, a previous inquiry was required to be held by the Collector for making a report to the appropriate Government (the State of Gujarat herein), to record its satisfaction about the compliance of the requirement of Section 40 of the Act, 1894 read with Rule 4 of the Rules made therein. Section 39 of the Act, 1894 further requires for the previous consent of the appropriate Government and execution of the agreement as per Section 41 with the appropriate Government, for the purpose of invoking Section 6 to 16 (both inclusive), to conclude the proceedings for acquisition, wherever a private company makes application to the appropriate Government for acquisition of any land. The alleged inquiry under Section 5A and the report submitted under Sub-section (2) of Section 5A of the Act, 1894 Page 8 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined as referred to in the declaration notification under Section 6, as noted hereinabove, was a colourable exercise of power conferred upon the Collector.
19. The scope of inquiry under Section 5A of the Act, 1894 and the inquiry required under Section 40 as contained in Part-VII are completely different. Moreover, Section 40 in its application to the State of Gujarat, does not have any reference to the report of the Collector under Section 5A, as words "either on the report of the Collector under Section 5A, Sub-section (2) or" in various sections in Part-VII have been deleted vide Section 19 of the Gujarat Act No.20 of 1965 with effect from 15.08.1965. The further contention is that the statements in the acquisition notifications under Sections 4 and 6, noted hereinabove, itself indicate that the acquisition for private company was treated as acquisition for public purpose and a misleading statement has been made therein that the lands in question were needed for a public purpose, though the purpose specified therein was for the project related activities of a private company. Even the statement in the declaration notification under Section 6 is to the effect that the lands were needed to be acquired at the public expenses, which means that the acquisition expenses were not borne by the private company, impleaded as respondent No.2 herein.
20. It was argued that as per the provisions contained in Part-VII for acquisition of land for companies, the stages of inquiry are :-
(i) Firstly, a previous inquiry under Section 40 of the Act, 1894 read with Rule 4 of the Rules, 1963 as required in Page 9 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined Clauses (a), (aa) and (b) of Sub-section (1) of Section 40, was to hold;
(ii) then Agreement under Section 41 was to be executed;
(iii) The question of seeking previous consent of the appropriate Government on consideration of the inquiry report as per Section 40 read with Rule 4 and also on application of mind on terms and conditions of the agreement, execution of which is necessary for grant of previous consent as per Section 39, would then arise.
(iv) The question of publication of the notification under Section 4 of the Act, 1894 (for the State of Gujarat) would arise only after the recording of the previous consent of the appropriate Government and execution of agreement as per Section 41 of the Act, 1894. The previous inquiry under Section 40 which is required to be made by the Collector must precede the execution of agreement under Section 41, in order to obtain the consent of the appropriate Government.
21. The submission is that no report of the Collector/Assistant Collector as required under Section 40 of the Act, 1894 has been brought on record, neither the agreement as required to be executed under Section 41 with the appropriate Government prior to the publication of Section 6 notification, is part of the record placed by the respondents in the present petition. There was absolutely no previous consent of the appropriate Government on application of mind recording satisfaction, about the Page 10 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined procedure adopted by the Collector, i.e. previous inquiry under Section 40 and the agreement under Section 41 of the Act, 1894. Invocation of Section 6 of the Act, 1894 for publication of the declaration recording satisfaction of the appropriate Government (State Government) was, thus, not a bona fide exercise of power at the ends of the respondents. The entire acquisition proceeding is hit by non-compliance of the mandatory provisions of Sections 39, 40 and 41 in Part-VII of the Act, 1894 read with Rule 4 of the Rules, 1963 made thereunder. In any case, no effective hearing was granted under Section 5A by the Assistant Collector, as alleged, which provision is otherwise not applicable for acquisition under Part-VII in the State of Gujarat.
22. It was placed before us by the learned counsel for the petitioners that the proposal for acquisition was made by the respondent company to the Collector on 18.01.1995 and an agreement was executed between the Company and the Collector in the month of February, 1995 itself. The Collector forwarded its report of the alleged inquiry made under Section 5A of the Act, 1894 (which otherwise is not applicable) on 29.05.1997 and previous consent of the appropriate Government / State Government was allegedly obtained on 30.09.1998. It is evident that the procedure as prescribed in Section 40 to make an inquiry and submit a report of the officer concerned before the appropriate Government and then the requirement of the Company to enter into an agreement with the appropriate Government on the satisfaction recorded about the inquiry made under Section 40, were twisted and turned to suit the private Page 11 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined company in the matter of acquisition, which was actually proceeded at the ends of the Collector with the execution of the agreement prior in point of time, in the month of February, 1995.
23. It was, thus, argued that the entire proceedings for acquisition for placing the matter before appropriate Government was a result of a pre-determined mind that the land in question was required to be given to the private company which had already entered into an agreement with the Collector laying down the terms and conditions of providing the lands in question for the purposes of the Company. Later, in order to give it a cloak of the procedure prescribed in Part-VII of the Act, 1894, having been adopted, further communications were made by the Collector. The appropriate Government, in any eventuality, has failed to apply its independent mind to record satisfaction about the purpose for which the acquisition was made and the inquiry required under Part-VII.
24. The submission is that on the presentation of the present writ petition, the status-quo order was passed on 05.02.2003 as to the possession over the land in question which is operative till date. The possession memo though was executed on 03.01.2003, but physical possession of the land in question is still with the petitioners and further the compensation under the award dated 17.04.2002 has never been received by the petitioners.
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25. In rebuttal, it was argued by Ms.Garima Malhotra, learned counsel for the respondent No.2 - Company that the physical possession of the land in question has been handed over to the respondent No.2 - company, namely Birla VXL Limited (Digjam) with the possession memo dated 03.01.2003, but on account of the status-quo order passed by this Court, no development work could be carried out though the company had deposited huge amount as compensation. The fact remains that the lands in question have not been utilized for the purposes of the company, namely Birla VXL Limited for which it was acquired in the year 2000.
26. It may not be out of place to note, at this juncture, that the respondent No.2 - company, namely Birla VXL Limited (Digjam Limited) had undergone insolvency proceedings under the provisions of the Insolvency and Bankruptcy Code, 2016 (for short "I.B. Code") and ultimately, a resolution plan has been approved by the National Company Law Tribunal (NCLT) vide order dated 27.05.2020 and it is now revived as M/s.Finquest Financial Solution Private Limited (approved resolution applicant) as per the approved resolution plan under Section 31 of the I.B. Code.
27. It is stated in the affidavit dated 06.01.2024 filed by the Director of respondent No.2 - company, namely M/s.Digjam Limited that since after approval of the resolution plan for M/s.Finquest Financial Solution Private Limited, the respondent No.2 - company is being run as an ongoing concern and continues to carry on its business till date. The new management re-commenced the production of the Page 13 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined company and detail of the production figures for the year 2020-21, 2021-22 and 2022-23 have been placed on record particularly for fabric (poly-woolen and poly-viscose), with the strength of the workers and administrative staff for these years. It is, thus, stated that the constitution of respondent No.2 - company has not been affected and there is only a change of management and the company is into textile manufacturing activities since its inception, i.e. 1948 at Digjam unit located at Jamnagar and the present company is carrying out its business as a going concern. The contention is that the purpose of acquisition has not been frustrated and the respondent No.2 - company still requires the land in question for establishing the expansion projected related utilities, effluent treatment plant and other infrastructural facilities.
28. Taking note of the said stand of the respondent No.2 - company, vide order dated 11.07.2024, while noticing that there is no categorical statement in the affidavit of the Director of the reconstituted company that the factory or the unit, for expansion of which and for establishment of effluent treatment plant or other infrastructure activities for the said factory, is still in operation at the same place and the unit is operating as on date, time was granted to file additional affidavit on behalf of respondent No.2 to make a categorical statement as to the existence of the manufacturing unit, for the purpose of which the land in question has been acquired. It was directed that all papers to establish existence and running of the manufacturing unit known as Digjam Woollen Mills (now name changed, if any), shall be brought on record Page 14 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined along with the affidavit of the Director of the reconstituted company, namely M/s.Digjam Limited.
29. We may also note that on an amendment application filed by the petitioners, the name of the respondent No.2 has been permitted to be amended from Birla VXL Limited to Digjam Limited.
30. It is pertinent to note that no affidavit in compliance of the order dated 11.07.2024 has been filed by the Director of the respondent No.2 - company and the said fact was noted by this Court in the order dated 27.11.2024. On the other hand, the petitioners herein have filed an affidavit dated 31.07.2024, wherein it is stated that the workers of respondent No.2 - company had raised an industrial dispute raising several demands which was registered as Reference (I.T.) No.15 of 2023 before the Industrial Tribunal, Jamnagar and in all possibility, production in the factory unit at Jamnagar is virtually Nil. The company had issued notice dated 04.05.2024 informing the workers that the production unit of Jamnagar shall be shifted to Jaghadia, Bharuch and all the machineries and the workers would also be transferred.
31. A categorical statement has further been made in the said affidavit of the petitioners that the manufacturing unit of respondent No.2 - company at Jamnagar is non-operational from some time and the company no longer requires additional land for expansion of its activities or effluent treatment plant. The attention of the Court is invited to page '445' of the paper-book, sale deeds executed by Digjam Page 15 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined Limited, respondent No.2 - company for sale of its properties at the lands bearing original City Survey No.2 (Revenue Survey Nos.150 and 151 paiki), which has been given new number, namely City Survey No.136, Sheet No.269, Ward No.10.
32. The sale deed dated 28.03.2024 executed by Digjam Limited, in favour of the partners of Shriji Investors (the purchasers) contains description of the property as Sub- divided Plot No.136/1/1 (total area 8866.48 sq.mtrs.) and Sub- division No.136/1/3 for the total area of 12,330.32 sq.mtrs., inclusive of common plot area with the old existing construction thereon.
33. With the above sale deed brought on record, it was contended by the petitioners in the affidavit dated 31.07.2024 that the respondent No.2 - company had sub-divided the plots and sold residential construction of 653.94 sq.mtrs., industrial roof type construction area 4751.39 sq.mtrs. and industrial RCC type construction of 511.58 sq.mtrs. vide sale deed dated 20.03.2024, which has not been rebutted by the respondent No.2 by filing any reply.
34. From the copy of the reply submitted by the respondent company before the Industrial Tribunal, Jamnagar in Reference (I.T.) No.15 of 2023 (at page 476 of the paper- book), it is sought to be demonstrated by the learned counsel for the petitioners that as per own statement of the respondent No.2 - company, namely Digjam Limited in the reply dated 09.04.2024, before the Tribunal, the production of the company had not been resumed after 2018.
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35. At the cost of repetition, it may be noted that of these facts brought on record by the petitioners about the status of the manufacturing unit of respondent No.2 - company at Jamnagar, for the purpose of which the land in question had been acquired, there is no rebuttal. It is, thus, an admitted fact that the factory of the erstwhile company, namely Birla VXL Limited, for the expansion project of which the lands in question had been acquired in the year 1999-2000, is not operational nor is in existence as on date. The respondent No.2 - company namely, Digjam Limited has sold its lands over which, the factory premises was situated by execution of the sale deed in the month of March, 2024. The result is that the purpose for which the acquisition in question was made, stands frustrated by efflux of time. The question as to what would be the effect of this fact on the merits of the instant case is subject to further inquiry to be made by us about the validity of the acquisition proceedings and hence would be appreciated at an appropriate stage of this judgment.
36. Coming to the challenge to the acquisition proceedings on the ground that the procedure prescribed in Part-VII of the Act, 1894 has not been followed in the acquisition of the land in question, we are required to note the averments in the affidavit of the State respondent. An affidavit dated 26.06.2001 has been filed by the Deputy Collector to state that the acquisition proceedings have been initiated for the purpose of expansion of the Digjam Woollen Mills of VXL India Limited. The procedure required under Section 5A, 39 and 40 of the Land Acquisition Act, 1894 and Rule 4 of Land Acquisition (Companies) Rules, 1963 had been followed for Page 17 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined publication of the notifications under Sections 4 and 6 of the Act, 1894. The allegations of breach of principles of natural justice in the writ petition are false. Joint measurement proceedings had been conducted in the presence of the acquiring company and the land owners who were present at the site on 10.12.1998, by the office of the City Survey Superintendent, Jamnagar. A joint meeting of the land owner/interested persons in the land in question and the acquiring body was held on 20.05.1997 and in the said meeting, the petitioner No.2 was also present and hence, the contention in the writ petition that the petitioners were not aware about the purpose for which joint measurement was carried out, is wrong.
37. Further it is contended that after the notifications were published in the newspaper, the petitioners filed an application on 31.05.2000 demanding certain documents, but the report of the Land Acquisition Officer submitted to the State Government being an inter-departmental communication was not given to the petitioners. The petitioners had full knowledge of the acquisition proceedings and hearing was afforded to respondent No.2 and objections were considered in reply to the notice under Section 9(3)(4) of the Act, 1894, in the proceeding for fixation of compensation held on 12.12.2000. The respondent No.2, though remained present on the date of hearing and sought time to file his objection, but no objection had been filed by him.
38. As regards the necessary inquiry as per Section 40 of the Act, 1894, the averment in paragraph 9 of the affidavit of the Page 18 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined Deputy Collector are relevant to be extracted hereinunder :-
"9. With regard to para 16 of the memo of the petition, I deny the averment made therein. I say and submit that the necessary inquiries as per the provisions of sec.40 of the Act has been made and the said inquiry has been carried out in strict compliance of the provisions of the rule 4 of the Land Acquisition (Companies) Rules. I say and submit that on examination about six material points, and inquiry thereafter, the report was submitted by the Collector Shri Jamnagar to the government on 29.5.97 and as per the said report, no other land is available for acquisition except the land in question, in addition thereto, as per the report the land acquired is not excessive the required and land in question is in fact required for the company and the company (acquiring body) had made an attempt to negotiate with the owners and the interested persons of the land in question. Hence, the land acquisition is only the remedy. All these factors have been duly considered and by approving the said inquiry held in pursuance of sec. 4 has been approved by the revenue department on 30.09.98 and NOC under the provision of the ULC Act, has been issued. I say and submit that sec. 4 notification has been accepted by the revenue department and therefore, the question of violation of 39-40 of the act, does not arise."
39. The contention in paragraph 10 of the affidavit of the Deputy Collector is that the respondent No.2 - company had made an attempt to negotiate with the land owners and had addressed a letter dated 04.04.1997 to the land owners, except the petitioners and held meeting on 10.04.1997 for purchase of the lands stated in the notification. It is further stated that since there was some inconsistency in the revenue record and city survey records with regard to ownership of land bearing Survey No.150 and Survey No.151/3 and Court proceedings were going on, negotiation for purchase of the Page 19 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined land was not carried with regard to owners of Survey Nos.150 and 151/3. However, the said issue is to be addressed by respondent No.2, namely the company.
40. It is contended that in the meeting conducted by the Deputy Collector on 20.05.1997, for the purpose of settlement of compensation between the land owners and the acquiring body, the land owner including the petitioners and the representatives of the acquiring body were present. No settlement, however, could be carried out on account of the high demand made by the land owners. The representative of the petitioners, the petitioner No.2 herein, namely the Director of the petitioner No.1 - company was present in the meeting but had refused to make submission with regard to compensation. There is, thus, a statement about the effort made for acquiring company to acquire the land in question by private negotiation.
41. It is stated in the affidavit of the Deputy Collector that the land in question has not been utilized by the petitioner - company and there was encroachment over 10% of land in Survey No.150 and the dispute was pending before the Court / Tribunal when hearing was conducted on 12.12.2000 qua the proceedings under Section 9.
42. Another notarized affidavit of the Deputy Collector, Jamnagar is on record which is not properly sworn, but the averments have been made therein are with regard to inquiry conducted by the Collector, Jamnagar in respect of the matters stipulated under Rule 4 of the Rules, 1963. It is stated Page 20 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined that the inquiry report had been forwarded to the State Government vide letter dated 29.05.1997 and it deals with all aspects stipulated under Rule 4, wherein the Collector has elaborated that the company has made its endeavour to find out lands in the locality suitable for the purpose of acquisition and inspite of all efforts require such land by private negotiation with the persons and such efforts having been failed; the land proposed to be acquired is suitable for the purpose; the area of land proposed to be acquired is not excessive; the company is in a position to utilize the land expeditiously etc. The State Government had considered the same and no objection certificate dated 30.09.1998 had been issued by the Revenue Department, the issuance of Section 4 notification had, thus, been duly sanctioned by the Revenue Department.
43. It is further contended that the acquiring company and the representatives of the State Government, i.e. Collector, Jamnagar had entered into an agreement in the month of February, 1995 which had been duly published in the official gazette. The contention of the petitioners that there was no agreement between the company and the State Government is, thus, false. There is a reference of the meeting held on 04.04.1997 with the land owners and negotiations carried out for acquisition of the land in question to assert that it is wrong to say that the company did not make any endeavour to acquire the land in question through private negotiation. There is a reference of subsequent meeting held on 25.09.1997 and the date of hearing under Section 9 fixed as 12.12.2000.
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44. We may also take note of the averments in the affidavit filed on behalf of the respondent No.2, acquiring company about challenge in the writ petition. In its first affidavit dated 17.01.2001, the respondent No.2 gave a description about the notifications published in the newspaper for acquisition. It is contended that prior to the acquisition, the measurement of the land in question was carried out on 09.12.1998 and the petitioners remained present at the time of said measurement. A proposal was forwarded to the Collector on 18.01.1995 to intimate the requirement of additional land for the purpose of expansion of the Woolen Mill which was running for more than 50 years. It was stated in the proposal that there would be additional employment of 1800 persons and the Government revenue would increase upto 160 Crores rupees.
45. It is stated that as it was acquisition for the purposes of the company, as required under law, on 13.05.1995, the District Collector, Jamnagar had forwarded the agreement between the Company and the Collector to the Deputy Secretary, Revenue Department for taking necessary action. All required proceedings were, thereafter, undertaken and almost two years were passed after the agreement was forwarded by the Collector, when on 13.05.1997 a meeting was called and held on 20.05.1997 between the land owners and the respondent No.2 - company, where the petitioner No.2, namely the Director of petitioner No.1 - company was present. The minutes of the said meeting were transcribed and sent by the Deputy Collector, Talati to the representative of the respondent No.2 - company and the petitioners herein.
Page 22 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined The copies of the proceedings held on 20.05.1997 has been annexed as Annexure-'3'.
46. It is stated that as the petitioner No.2 showed his unwillingness to sell the land in question to the respondent - company, and, as such, there was no question of arriving at an agreement for the price and value of the land. The price offered by respondent No.2 - company was not agreed by the petitioners and there was a demand for huge consideration for sale.
47. In another affidavit dated 23.09.2013 filed on behalf of respondent No.2 - company, averments have been made with regard to the dispute pertaining to ownership of the land in question and the assertion is that the petitioners had no right title and interest over the major chunk of land in question.
48. However, the fact remains that all such disputes have been brought to its logical end and further, at the time of acquisition, the petitioners herein were the recorded tenure holders of the land in question. Any dispute pertaining to the right, title or interest over the land in question, between the private persons, at the relevant point of time, was not important for the purpose of acquisition.
49. Be that as it may, in order to ascertain as to whether the proper procedure for acquisition for a private company, namely respondent No.2 herein, had been followed, we have summoned the entire original record of acquisition and looked into it during the course of hearing. The facts culled out from the record of acquisition would be noted at an appropriate stage in this judgment.
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50. However, before proceeding on the factual aspects, we would like to go through the provisions of the Land Acquisition Act, 1894 and the rules framed thereunder which provide the procedure for compulsory acquisition of a private land, for a private company. There is no dispute about the fact that the respondent No.2 - company, for which the land in question had been acquired is a 'Company' defined in Section 3 of the Companies Act, 1956. The Land Acquisition Act, 1894 provided for acquisition of land for companies defined in Section 3(e) of the Act, 1894 and a separate chapter in Part-VII was prescribed for acquisition of land for companies. Sections 39, 40 and 41 as contained in Part-VII of the Act, 1894 relevant for our purposes, are to be extracted hereinunder with Amendment vide Gujarat Act No.20 of 1965 with effect from 15.08.1965 :-
"39. Previous consent of appropriate Government and execution of agreement necessary. - 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], not unless the Company shall have executed the agreement hereinafter mentioned.
STATE AMENDMENTS Gujarat - In section 39, for the figure "6", after the word "sections", substitute the figure "4".
[Vide Gujarat Act 20 of 1965, sec.18 (w.e.f.15-8-1965]
40. Previous enquiry. - (1) Such consent shall not be given unless the [appropriate Government] be satisfied. [either on the report of the Collector under section 5A, sub-section (2), or] by an enquiry held as hereinafter provided, -
Page 24 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined [(a) that the purpose of the acquisition is to obtain land for the erection of dwelling-houses for workmen 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, 1908 (5 of 1908)] in the case of a Civil Court.
STATE AMENDMENTS Gujarat - In section 40, in sub-section (1), omit the words "either on the report of the Collector under section 5A, sub-section(2) or".
[Vide Gujarat Act 20 of 1965, sec.19 (w.e.f.15-8-1965]
41. Agreement with appropriate Government. - If the [appropriate Government] is satisfied [after considering the report, if any, of the Collector under section 5A, sub-section (2), or on the report of the officer making an inquiry under section 40] that [the proposed acquisition is 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] for the following matters, namely :-
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(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;
[(4A) 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.] STATE AMENDMENTS Gujarat - In section 41, omit the words "after considering the reports, if any, of the Collector under section 5A, sub-section (2), or".
[Vide Gujarat Act 20 of 1965, sec.20 (w.e.f.15-8-1965]"
51. Sections 44A and 44B inserted in the Land Acquisition Act, 1894 vide Amended Act No.31 of 1962 (with effect from 12.09.1962) are also relevant to be noted hereinunder :-
"[44A. Restriction on transfer, etc. - No Company for which any land is acquired under this Part shall be entitled to transfer the said land or any part Page 26 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined thereof by sale, mortgage, gift, lease or otherwise except with the previous sanction of the appropriate Government.
44B. Land not to be acquired under this Part except for certain purpose for private companies other than Government companies.- 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. - "Private company" and "Government company" shall have the meaning respectively assigned to them in the Companies Act, 1956 (1 of 1956).]"
52. Section 55 of the Act, 1894, authorized the appropriate Government to make rules consistent with the Act for the guidance of officers in all matters connected with its enforcement. The first proviso to Sub-section (1) of Section 55 confers power on the Central Government for carrying out the purposes of Part-VII of the Act, 1894, for guidance of the State Government and officers of the Central Government and of the State Government. In exercise of the powers conferred by Section 55 of the Land Acquisition Act, 1894, the Central Government framed rules named as the Land Acquisition (Companies) Rules, 1963. Rules 3, 4 and 5 of the Rules, 1963 are relevant to be extracted hereinunder :-
"3. Land Acquisition Committee: (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) The Committee shall consist of -Page 27 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025
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(i) the Secretaries to the Government of the Departments of Revenue, Agriculture and Industries or such other officers of each of the said Department as the appropriate Government may appoint ;
(ii) such other members as the appropriate Government may appoint for such term as that Government may, by order, specify, and
(iii) The appropriate Government or any officer nominated by him dealing with the purposes for which the company purposes 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 advice 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.
4. Appropriate Government to be satisfied with regard to certain matters before initiating acquisition proceedings.- (1) Whenever a company makes in 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 negotiation with the person interested therein on payment of reasonable price and such efforts have failed, Page 28 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined
(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 utilize 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 refereed 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 Section 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 , 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 crop 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 be forwarded by the Government to the Committee.
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(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.
5. Matters to be provided in the agreement under Section 41.- (1) The terms of the agreement referred to in section 41 of the Act shall include the following matters, namely :-
(i) that the company shall not, except with the previous sanction of the appropriate Government, use the land for any purpose other than that for which it is acquired ;
(ii) the time within which the dwelling houses or amenities directly connected therewith shall be erected of provided or the building or work shall be constructed or executed shall not exceed three years from the date of transfer of the land to company ;
(iii) that where the appropriate Government is satisfied after such enquiry as it may deem necessary that the company was prevented by reasons beyond its control from executing, providing, construction or executing dwelling houses or amenities or any building or work within the time specified in the agreement, the appropriate Government may extend the time of that purpose by a period not exceeding one year at a time so however that the total period of extension shall not exceed three years.
(iv) that if the company commits a breach of any of the conditions provided for in the agreement, the appropriate Government may make an order declaring the transfer of the land to the company as null and void whereupon the land shall revert back to the appropriate Government and directing that an amount not exceeding one-fourth of the amount paid by the company to the appropriate Government as the cost of acquisition under clause (1) of Section 41 of the Act shall be forfeited to the appropriate Page 30 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined government as damages and the balance shall be refunded to the company, and the order so made shall be final and binding.
(v) that if the company utilises only a portion of the land for the purpose for which it was acquired and the appropriate Government is satisfied that the company can continue to utilise the portion of the land used by it even if the unutilised part thereof is resumed, the appropriate Government may make an order declaring the transfer of the land with respect of the unutilised portion thereof as null and void whereupon such unutilised portion shall revert back to the appropriate Government and directing that an amount not exceeding one-fourth of such portion of the amount paid by the company as cost of acquisition under clause (1) of Section 41 of the Act as is relatable to the unutilised portion shall be forfeited to the appropriate Government as damages and that balance of that portion shall be refunded to the company and that order so made shall, subject to the provisions of clause (vi), be final and binding.
(vi) that where there is any dispute with regard to the amount relatable to the unutilised portion of the land, such dispute shall be referred to the court within whose jurisdiction the land or any part thereof is situated and the decision of that court thereon shall be final.
(2) Where the company commits a breach of any of the terms of the agreement, the appropriate Government shall not make an order under clause(vi) or clause(v) of sub-rule (1), unless the company has been given opportunity of being heard in the matter.
(3) The appropriate Government shall consult the Committee before according any sanction under clause (i) of sub-rule (i) or extending the time under clause(iii) or making any order under clause (iv) or clause (v) of that sub-rule."
53. A careful reading of the provisions contained in Sections 39, 40 and 41 in Part-VII of the Act, 1894 and Rules, 1963 made thereunder indicates that previous inquiry under Page 31 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined Section 40 was required to be made prior to the issuance of the notification under Section 4 of the Act, 1894. Section 39 clearly provides, insofar as the State of Gujarat is concerned, that the provisions of Sections 4 to 16 (both inclusive) shall not be put in force to acquire land for any company unless two pre-conditions are fulfilled; namely, (i) with the previous consent of the appropriate Government (State Government herein) and (ii) the agreement was executed by the company. It is clear that these conditions were to be fulfilled before publication of the notification under Section 4 of the Act, 1894, for acquisition of land for a company within the State of Gujarat.
54. Further, the inquiry as contemplated under Section 40 was required to be held by the Collector, taking into consideration of the requirement of Clause (a), (aa) and (b), as the case may be. For the purposes of present case, thus, the inquiry was required to be held to ascertain the purpose stated in Clause (aa) of Section 40. Section 40 further provides for the satisfaction to be recorded by the State Government after consideration of the inquiry report submitted about the proposed acquisition being for any of the purposes referred in Clause (a) or Clause (aa) or Clause (b) of Sub-clause (1) of Section 40. Upon such satisfaction being recorded, the appropriate Government would require the company to enter into an agreement, which shall include the terms and conditions of the matters included in Clause (a) to
(b) of Section 40. On the satisfaction arrived at by the appropriate Government on both, i.e. report of the officer making inquiry under Section 40 and that all required terms Page 32 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined and conditions having been included in the agreement, the question of grant of previous consent under Section 39 would arise, which shall have to be recorded before the publication of the notification under Section 4 of the Act, 1894, for acquisition under Part-VII in the State of Gujarat.
55. Rule 3 of the Rules, 1963 provides for constitution of a Land Acquisition Committee for the purpose of advising the appropriate Government in relation to acquisition of land under Part-VII of the Act, which was to be notified in the official gazette, to be called as the Land Acquisition Committee. Sub-rule (5) of Rule 3 casts a duty upon the Committee to tender its advise within one month from the date on which it is consulted, on all matters relating to or arising out of acquisition of land under Part-VII of the Act. The appropriate Government would then proceed to take into consideration all matters noted hereinabove including the advise of the Land Acquisition Committee to record its satisfaction before initiation of acquisition proceedings, with regard to the matters provided in Rule 4.
56. A bare perusal of Sub-Rule (1) of Rule 4 read with Rule 3 of the Rules, 1963 clearly shows that there was a requirement for recording satisfaction of the appropriate Government, namely the State Government for our purposes, with regard to all factors enumerated in Part-VII of the Act (Sections 40 and
41) and Rule 4 of the Rules, 1963, before initiation of the acquisition proceedings. The Land Acquisition Committee notified under Rule 3 was to work only in advisory capacity and it did not have any decision making power so as to record Page 33 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined the satisfaction of the State Government (appropriate Government) in the matter of acquisition of land for companies under Part-VII of the Act, 1894.
57. Rule 5 of the Rules, 1963 provides the requirement of incorporating certain clauses in the agreement which includes that the company shall not utilize the land in question for any purposes other than that for which it is acquired, except with the previous sanction of the appropriate Government. Clause
(iv) contained in Sub-Rule (1) of Rule 5 provides the consequence of breach committed by the Company of any of the conditions provided in the agreement and empowers the appropriate Government to declare the transfer of the land to the company as null and void whereupon the land shall revert back to the appropriate Government and recovery or forfeiture of cost of acquisition paid by the company to the appropriate Government. Clause (v) of Sub-Rule (1) of Rule 5 empowers the appropriate Government to make an order declaring the transfer of the land with respect to unutilized portion of the acquired land as null and void whereupon such unutilized portion shall revert back to the appropriate Government. A reading of Rule 5, thus, makes it clear that the land acquired for the purposes of the company under Part-VII shall have to be utilized only for the purpose for which it was acquired and cannot be utilized for any other purposes, except with the previous sanction of the State Government and the State Government is authorized to make an order to revert the land to it, if unutilized whether whole or in part.
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58. At this juncture, we may note that in the instance case, it is evident that the land in question could not be utilized for the purposes for which it was acquired because of the interim order of status-quo passed by this Court in the year 2003. It was argued by Ms.Garima Malhotra, learned advocate appearing for the respondent No.2 - company that the purpose for which the land in question had been acquired in the year 2000 could not be achieved because of the intervention of this Court and the respondent No.2 - company cannot be saddled with any liability for the same. Even in accordance with Rule 5(1)(i), it is permissible for the company to seek sanction of the appropriate Government to utilize the land in question for the purposes other than that for which it was acquired. The petitioners, therefore, cannot be permitted to contend that since the land in question cannot be utilized for the purposes for which it was acquired in the year 2000, it was to be reverted back to the petitioners. The compensation for acquisition of the land in question had already been deposited by the respondent No.2 - company in the year 2002 itself and the possession of the land in question is with the respondent No.2 - company. No infirmity or illegality can be attached to the process of acquisition. The writ petition, thus, deserves to be dismissed outrightly.
59. To deal with the above submissions, at this stage, we would like to take note of the legal position through the decisions of the Apex Court in the field, i.e. acquisition of lands for the purposes of private company under Part-VII. The first decision placed before us by the learned counsel for the petitioners is a three Judges judgment of the Apex Court Page 35 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined rendered on 21.01.1975, in case of State of Gujarat and another vs. Patel Chaturbhai Narsibhai and others, reported in 1975 (1) SCC 583. In the said case, the challenge was to the acquisition notifications under Sections 4 and 6 of the Land Acquisition Act, 1894 for a company. Referring to the decision of the Apex Court in R. L. Arora v/s. State of U.P. (AIR 1962 SC 764), it was noted therein that in case of acquisition for a company, the Government could give its consent if the acquisition was needed for some work which was likely to prove useful to the public. It was case of the State appellant before the Apex Court therein that after notification under Section 4 of the Act, 1894 was published on 4th March, 1961, an agreement dated 22.08.1961 was executed between the State Government and the acquiring company in accordance with the provisions contained in Section 41 of the Act. Referring to Section 40 amended vide Amendments of 1962 and the Rule 4 of 1962 Rules, it was noted by the Apex Court that the provisions require for making an inquiry and recording of satisfaction by the Government. It was contended on behalf of the State therein that inquiry was held prior to the notification under Section 4 of the Act, 1894 and the agreement was executed after the State Government had given consent to the acquisition.
60. The respondent land owner had challenged the Notifications under Sections 4 and 6 of the Act, 1894 on the ground that the inquiry conducted under Rule-4 of 1963 Rules had not been held lawfully, inasmuch as, the inquiry under the said rule contemplated giving opportunity to the owner of the land to make effective representation against the proposed Page 36 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined acquisition. On behalf of the State, it was argued, in rebuttal, that the inquiry under Rule-4 is administrative and the owner of the land was not entitled to be given opportunity to be heard during the course of such inquiry. The Collector had submitted a report after inquiry among other matters that the company had made all reasonable efforts to get such land by negotiations with the persons interested therein on payment of reasonable price and such efforts had failed.
61. The Apex Court while referring to the Rule 4 of 1963 Rules has held in Patel Chaturbhai Narsibhai (supra) that in such an inquiry, the company has to show that it had made negotiations with the owners of the land and the owners of the land are, therefore, entitled to be heard for the purpose of proving or disproving the reasonable efforts of the company to get such lands by negotiations. It was observed that the nature of objections under Rule 4 of the Rules, 1963 are not one of the objections which can be preferred under Section 5- A of the Act, 1864. It was noted in the said case that though there was an inquiry under Section 5-A of the Act, but no inquiry under Section 40 of the Act to enable the Government to give its consent was held before the agreement between the State and the company under Section 41 of the Act was executed.
62. The question was also to the effect of notifying the agreement under Section 41 of the Act, subsequent to the notification under Section 4 of the Act, 1894 being in violation of the provisions contained under Section 39 of the Act.
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63. In light of the said controversy, it was held by the Apex Court in paragraph Nos. 18, 19, 20, 21 and 22 as under :-
"18. The Land Acquisition (Gujarat Unification and Amendment) Act, 1963 which amended Section 39 of the Central Act enacted that the provisions of Sections 4 to 37 inclusive of the Act shall not be put in force in order to acquire land for any company, unless there is previous consent of the State Government or the company shall have executed the agreement. On behalf of the State it was said that the agreement in the year 1961 would suffice. This is only to be stated to be rejected because the notification under Section 4 of the Act was cancelled by the State on September 28, 1965. Thereafter fresh proceedings started. Further, the agreement in the year 1961 did not survive, because a fresh agreement was made on January 13, 1969, which was published on January 18, 1969.
19. The provisions contained in Sections 38 to 41 of the Act indicate that the provisions of Sections 4 to 37 of the Act cannot be applied to acquire land for any company unless the State Government gives previous consent thereto and the company executes an agreement with the State as mentioned in Section 41 of the Act. Second, Section 40 of the Act indicates that the State Government cannot give consent unless there is an enquiry as provided in that section. It is noticeable that any enquiry under Section 5-A of the Act is not an enquiry within the meaning of Section 40 of the Act. The reason is that the Gujarat Amendment Act, 1963, being Gujarat Act 20 of 1965 deleted the words "either on the report of the Collector under Section 5-A, sub-section (2) or" from Section 40 of the principal Act. Similarly, in Section 41 of the Act as a result of the Gujarat Amendment Act the words "either on the report of the Collector under Section 5-A, sub-section (2) or" were deleted. The effect of the deletion of those words by the Gujarat Amendment Act is that the enquiry under Section 5-A is not an enquiry within the meaning of Section 40 of the Act.
20. In the present case, the enquiry under Rule 4 of the Land Acquisition (Companies) Rules was held before the notifications under Sections 4 and 6 of the Act were issued in the year 1965. The enquiry pursuant to the notifications in the year 1961 and previous to the fresh notifications in 1965 is of no effect in law for two principal reasons. First, the 1961 notification was cancelled, and, therefore, all steps taken thereunder became ineffective. Second, the enquiry under Rule 4 in 1961 was held without giving Page 38 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined opportunity to the land owner respondent, and, therefore, the enquiry is invalid in law.
21. The affidavit evidence on behalf of the Government was that an enquiry was held under Section 40 of the Act in the month of July 1965 and there was a report on August 25, 1965. The enquiry under Section 40 of the Act is equally of no avail for similar reasons why the enquiry under Rule 4 in 1961 is of no effect in law.
22. For these reasons, we hold that the acquisition proceedings are vitiated. There was no compliance with the provisions of Section 39 of the Act. There was no prior agreement between the State and the company before provisions contained in Sections 4 to 37 were put into force. The enquiry under Section 5-A of the Act in the present case does not satisfy the provisions contained in Rule 4 of the Companies Acquisition Rules. The owners of the land are entitled to opportunity of being heard in an enquiry under Rule 4 and enquiry under Section 40 of the Act. No such opportunity was given to the owners."
64. A perusal of the above noted paragraphs of the decision in Patel Chaturbhai Narsibhai (supra), indicates that emphasis by the Apex Court was on the inquiry within the meaning of Section 40 of the Act, 1894 prior to the publication of notification under Section 4 of the Act, 1894, for the reason of the Gujarat Amendment Act No. 20 of 1965, whereby in Section 39 of the Act, 1894, Section 4 was incorporated to provide that the provisions of Sections 4 to 16 (both inclusive) and Sections 18 to 37 (both inclusive) of the Act, shall not be put in force unless two pre-conditions of obtaining previous consent of the State Government and the execution of the agreement under Section 41 of the Act by the company, are fulfilled. It was clarified that the effect of deletion of the words "either of the report of the Collector under Section 5-A of sub- section(2) or" by the Gujarat Act No. 20 of 1965 would be that the inquiry under Section 5-A is not an inquiry within the meaning of Section 40 of the Act, 1894.
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65. It was held that the acquisition proceedings were vitiated for non-compliance of the provisions of Section 39 of the Act noticing that there was no prior agreement between the State and the Company before the provisions contained in Sections 4 to 37 were put into force and that the inquiry as contemplated under Rule 4 of the Companies Acquisition Rules, 1963 was not held giving opportunity of hearing to the land owners.
66. In another decision of the Apex Court in Devinder Singh and Others v/s. State of Punjab and Others [(2008) 1 SCC 728], relied by the learned counsel for the petitioners, the acquisition proceedings for private company was challenged under the provisions of the Land Acquisition Act, 1894 being a colourable exercise of powers on the part of the State Government. The acquisition notification under Section 4 extracted by the Apex Court in the judgment incorporated a statement that the acquisition was being made for a public purpose, namely for setting up the project of the company namely M/s. International Tractors Ltd. It was noted by the Apex Court that the acquisition of the land at the instance of a private company included in the expression "company" defined under Section 3(e) is distinguishable from the acquisition by any wing of the State or Government Company for a public purpose, where different procedures are to be adopted, in exercise of its power of eminent domain to acquire the property subject to existence of public purpose other than on an application filed at the instance of a company" where procedure is to be adopted therefor are laid down in Part-VII of the Act.
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67. It was noted by the Apex Court that the conduct of the State as to how it intended to deal with such a requisition by a private company, is a relevant factor. The action of the State provides for an important condition to consider as to whether the purpose wherefor the company requested it for acquisition of the land is a public purpose and/or which could be made at the public expense either as a whole or in part, wherefor evidently provisions laid down in Part-II shall be resorted to. However, on the other hand, if the State forms an opinion that the acquisition of the land at the instance of the company may not be for public purpose or, the expense to be incurred therefor either in whole or in part, shall not be borne by the State, the procedure laid down in Part-VII thereof have to be resorted to.
68. It was, thus, held that on an application filed for acquisition of land at the instance of the company "there is a requirement of making an inquiry for forming an opinion as to the provisions of the Act 1894 to be resorted to for the purposes of acquisition", i.e. whether the acquisition is to be held in Part-II for public purposes or Part-VII for a private company. The previous consent of the appropriate Government, execution of the agreement, previous inquiry before the consent is accorded, publication of the agreement, are the requirements which have to be resorted to in accordance with the procedure laid down under Part-VII for acquisition of the land at the instance of a private company which are exhaustive.
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69. It was noted that the provision of Section 44-B of the Act, 1894 provides for a statutory injunction that no land shall be acquired except for the purposes mentioned in Clause (a) of sub-section(1) of Section 40 for a private company which is not a government company. Explanation to Section 44-B further provides that "private company" and "government company" shall have the meaning respectively assigned to them in the Companies Act, 1956. The expression "company" defined under Clause-e(i) of Section 3 of the Act, 1894, however, would include a 'company' defined in Section 3 of the Companies Act, 1956 other than the company referred to in Clause (cc). The result is that the State has been empowered to acquire land also for the companies" and for purposes other than the public purposes.
70. The Apex Court in Devinder Singh (supra) has further proceeded to take note of the rules of the Land Acquisition (Companies) Rules, 1963 to note that the rules have been framed prescribing mode and manner in which the State vis-a- vis even the company should be proceeded. It was observed that a bare perusal of sub-rule(1) of Rule 4 categorically states that the same shall be applicable where acquisition of land is to be made for the company envisaged under Part-VII and Rule 4 mandates the appropriate Government to arrive at a satisfaction in regard to the factors enumerated therein. It was observed that :-
"18. The State is also enjoined with a duty to make an inquiry wherefor an opportunity of hearing to the company is required to be given. When the State intends to proceed with the acquisition of land it must form an Page 42 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined opinion that the lands which are going to be acquired are not good agricultural lands. The Rules by and large lay down a statutory policy in that behalf and question of ignoring the same by the State does not arise.
19. We would consider the question as to whether Rule 4 aforementioned is mandatory or directory or at what stage an inquiry is required to be made, a little later. But we must record that it is not the case of the State that Rule 4, despite the fact that acquisition is made in terms of Part VII of the Act, can be ignored."
71. In the facts of the said case, it was noted that the High Court had proceeded on the basis that the State had formed an opinion that the purposes for which the provisions of the Act were taken recourse to was a public purpose, the provisions of Part-II would, therefore, apply. Taking note of the dictionary meaning of "public purposes" as contained in Blacks Law Dictionary and the meaning of the words "public policy" as discussed by the Apex Court in Gherulal Parakh v/s. Mahadeodas Maiya (AIR 1959 SC 781), it was held in paragraph No. '23' as under :-
"23. We need not go into the nicety of the question, keeping in view the fact that there are binding precedents in that behalf that in a case of acquisition for a public company, public purpose is not to be assumed and the point of distinction between acquisition of lands under Part II and Part VII would be the source of funds to cover the cost of acquisition. This Court in Pratibha Nema [(2003) 10 SCC 626] held: (SCC p. 641, para 21) "21. ... In other words, the second proviso to Section 6(1) is the main dividing ground for the two types of acquisition."
72. It was further held in paragraph Nos. '38' to '47' and '52 to 53' as under :-
"38. Satisfaction on the part of the State required to be arrived at upon formation of opinion on the basis of materials brought on record for the purpose of Part II of Page 43 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined the Act are different from that of Part VII. Once the appropriate Government arrives at a decision that the land sought to be acquired is needed for a public purpose, the court would not go behind it, as the same may furnish a valid argument for upholding an acquisition under Part II. But when an acquisition is made under Part VII, the conditions and precedents therefor as contained in the Companies Rules must be satisfied. On the face of record, if it can be shown that the Government had ignored the mandatory provisions of the Act, the acquisition would have to be struck down.
39. In Shyam Behari v. State of M.P. [AIR 1965 SC 427 :
(1964) 6 SCR 636] it was held: (AIR p. 429, para 3) "3. ... In the second place, the declaration under Section 6 may be made that land is needed for a company in which case the entire compensation has to be paid by the company. It is clear therefore that where the entire compensation is to be paid by a company, the notification under Section 6 must contain a declaration that the land is needed for a company. No notification under Section 6 can be made where the entire compensation is to be paid by a company declaring that the acquisition is for a public purpose, for such a declaration requires that either wholly or in part, compensation must come out of public revenues or some fund controlled or managed by a local authority."
40. Distinction between acquisition under Part II and Part VII is self-evident. The State was not only obligated to issue a notification clearly stating as to whether the acquisition is for a public purpose or for the Company. Section 6 categorically states so, as would appear from the second proviso appended thereto.
41. A declaration is to be made either for a public purpose or for a company. It cannot be for both.
42. It is furthermore trite that the Land Acquisition Act is an expropriatory legislation. (See Hindustan Petroleum Corpn. Ltd. v. Darius Shapur Chenai [(2005) 7 SCC 627] and Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd. [(2007) 8 SCC 705 : (2007) 8 Scale 110] )
43. Expropriatory legislation, as is well known, must be strictly construed. When the properties of a citizen are being compulsorily acquired by a State in exercise of its power of eminent domain, the essential ingredients thereof, namely, existence of a public purpose and Page 44 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined payment of compensation are principal requisites therefor. In the case of acquisition of land for a private company, existence of a public purpose being not a requisite criterion, other statutory requirements call for strict compliance, being imperative in character.
44. Another question which arises for our consideration is as to whether Rule 4 of the Companies Rules is mandatory or directory in nature. The High Court held it to be directory.
45. Rule 4 of the Rules employs the word "shall" not once but twice. Ordinarily, it is imperative in character. No reason has been shown before us as to why it should be held to be directory provision particularly when the Land Acquisition Act is an expropriatory legislation.
46. In State of Gujarat v. Patel Chaturbhai Narsibhai [(1975) 1 SCC 583 : AIR 1975 SC 629] this Court held:
(SCC pp. 586-87, para 15) "15. The contention of the State that the enquiry under Rule 4 is administrative and that the owner of the land is not entitled to be given an opportunity to be heard at the enquiry cannot be accepted for these reasons. The enquiry under Rule 4 shows that the Collector is to submit a report among other matters that the company has made all reasonable efforts to get such lands by negotiation with the persons interested therein on payment of reasonable price and such efforts have failed. The persons interested therein are the owners of the land which is proposed to be acquired. The company at such an enquiry has to show that the company made negotiations with the owners of the land. The owners of the land are, therefore, entitled to be heard at such an enquiry for the purpose of proving or disproving the reasonable efforts of the company to get such land by negotiation. The contention on behalf of the State that the owners of the land will get an opportunity when an enquiry is made under Section 5-A of the Act is equally unsound. Section 17 of the Act provides that the appropriate Government may direct that the provisions of Section 5-A shall not apply, and if it does so direct a declaration may be made under Section 6 at any time after the publication of the notification under Section 4 of the Act. Therefore, the enquiry under Section 5-A may not be held."
47. In General Govt. Servants Coop. Housing Society Ltd. v. Wahab Uddin [(1981) 2 SCC 352] this Court held: (SCC Page 45 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined pp. 357-58, para 13) "13. Sub-rule (1) requires the Government to direct the Collector to submit a report to it on the matters enumerated in Clauses (i) to (vi) of sub-rule (1) which is for the benefit of the company. The purpose is to avoid acquisition of land not suitable for a company. Clause (ii) of sub-rule (1) requires that the company has to make all reasonable efforts to get such lands by negotiation with the person interested therein on payment of reasonable prices and that such efforts have failed. The purpose of Clause (ii) seems to be to avoid unnecessary land acquisition proceedings and payment of exhorbitant prices. The purpose of Clauses (iii), (iv) and (v) are obvious. The purpose of Clause (vi) is to avoid acquisition of good agricultural land, when other alternative land is available for the purpose. Sub-rule (2) of Rule 4 requires the Collector to give reasonable opportunity to the company so that the Collector may hold an inquiry into the matters referred in sub-rule (1). The Collector has to comply with Clauses (i), (ii) and (iii) of sub-rule (2) during the course of the inquiry under sub-rule (1). The Collector under sub-rule (3) then has to send a copy of his report of the inquiry to the appropriate Government and a copy of the report has to be forwarded by the Government to the Land Acquisition Committee constituted under Rule 3 for the purpose of advising the Government in relation to acquisition of land under Part VII of the Act, the duty of the Committee being to advise the Government on all matters relating to or arising out of acquisition of land under Part VII of the Act [sub-rule (5) of Rule 3]. No declaration shall be made by the appropriate Government under Section 6 of the Act unless the Committee has been consulted by the Government and has considered the report submitted by the Collector under Section 5-A of the Act. In addition, under Clause (ii) of sub-rule (4) of Rule 4, the company has to execute an agreement under Section 41 of the Act. The above consideration shows that Rule 4 is mandatory; its compliance is no idle formality; unless the directions enjoined by Rule 4 are complied with, the notification under Section 6 will be invalid. A consideration of Rule 4 also shows that its compliance precedes the notification under Section 4 as well as compliance with Section 6 of the Act."
*** *** ***
52. The decision of this Court in Somawanti holding Page 46 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined that the stage at which Rule 4 is required to be complied with is not the stage prior to issuance of a notification under Section 4 of the Act, but declaration under Section 6 does not appear to be correct from the decisions of this Court in Patel Chaturbhai Narsibhai and Wahab Uddin, the earlier binding precedent, with utmost respect, having not been taken into consideration in its entirety.
53. In Abdul Husein Tayabali & Others v. State of Gujarat, this Court observed : (AIR p.437, para 11) "11. ...Next it was urged that the inquiry under Rule 4 has to be held after the notification under section 4 is issued and not before and therefore the inquiry held by Master was not valid. We do not find anything in Rule 4 or in any other Rule to warrant such a proposition. The inquiry, the report to be made consequent upon such inquiry, obtaining the opinion of the Land Acquisition Committee, all these are intended to enable the Government to come to a tentative conclusion that the lands in question are or are likely to be needed for a public purpose and to issue thereafter section 4 notification."
73. It was, thus, held by the Apex Court in Devinder Singh (supra), that the Land Acquisition Act being an expropriatory legislation must be strictly construed. The provisions of Rules, 1963 cannot be held to be directory particularly when the Land Acquisition Act is an expropriatory legislation. The use of word 'shall' in Rule 4 of the Rules, 1963 (twice) makes it clear that it is imperative in nature. Under the scheme of the Act and the Rules framed thereunder, it is mandatory that before issuance of Section 4 notification (for the State of Gujarat), the procedure contemplated by Rule 4 of the Rules is complied with. The inquiry under Rule 4 must precede the notification under Section 4, inasmuch as, the report to be made consequent upon such inquiry, obtaining the opinion of Page 47 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined the Land Acquisition Committee, are all intended to enable the Government to come to a tentative conclusion that the lands in question are likely to be needed for the purpose for which the request is received.
74. The mandatory requirement of making a previous inquiry under Section 40 of the Act, 1894 read with Rule 4 of the Rules, 1963 before publication of Section 4 notification, is evident from the scheme of the Act contained in Part-VII where acquisition is for private company. To obtain previous consent of the appropriate Government under the scheme of Section 39, it provides that the provisions of Sections 4 to 37 (both inclusive) shall not be invoked to acquire land for any company, unless the requirement of previous inquiry and an agreement having been executed between the Government and company, have been fulfilled.
75. Keeping in mind the above legal position, we are required to take note of the facts of the instant case, noticed from the original record of acquisition produced before us. From a perusal of the original record, it may be noted that the company, namely VXL India Limited (Digjam Woollen Mills) had sent a request vide letter dated 18.01.1995 to the Collector requesting for acquisition of Revenue Survey Nos.150 and 151/3, the plots adjacent to the boundary of the factory named as "Digjam Woollen Mills" at Jamnagar. It is stated therein that for implementation of the expansion programme, first phase of which had already been commenced in the existing factory area, additional land was Page 48 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined required to provide other utilities like power, water, effluent treatment etc. to enable the company to complete the first phase as per its requirement. Upon search, the company found the above noted two small plots as most suitable. It is stated therein that the company would pay adequate compensation to the existing owners of the plot as decided under Rules. Pertinent is to note that there is absolutely no assertion in the said request letter that the company made any effort to negotiate with the land owners for sale of the lands in question in their favour. The statement of lands required as mentioned at the foot of the letter is Survey No.150 (2.27 Acres); Survey No.151/3A (3.11 Acres) and Survey No.151/3B (2.9 Acres), total 8.28 Acres.
76. It seems that upon receipt of the said request letter itself, the Collector, Jamnagar and the representative of the acquiring company, namely VXL India Limited (Digjam Woollen Mills) had signed an agreement on 17.02.1995, which fact is also admitted in the affidavit filed on behalf of the Deputy Collector. It is, thus, evident that the agreement preceded any inquiry required to be made by the Collector under Section 40 read with Rule 4 and was simply executed within one month of the request made by the company. There is absolutely no averment in the affidavit filed on behalf of the State respondents that any inquiry was conducted prior to the execution of the agreement dated 17.02.1995.
77. It seems that the wisdom later dawned on the officers of the State and another agreement dated 02.06.1999 was Page 49 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined executed between the acquiring company and the Collector, Jamnagar, which is on record having been sent by the company along with the communication dated 02.06.1999, with the request to forward the same to the Revenue Department, Gandhinagar for doing the needful. The original copy of the agreement contains a noting and numbering of the Revenue Department, Gandhinagar dated 11.06.1999.
78. The voluminous original record contained in four files containing loose papers has been produced before us by the learned Assistant Government Pleader appearing for the State respondents, wherein we found another communication dated 19.03.1997 sent by the acquiring company to the Collector to state that the company had made sincere efforts to purchase the surrounding lands but their efforts were not successful for various reasons. One of the reasons stated therein was that there were disputes with respect to the lands in question and owners were demanding payment mostly in cash and were not willing to accept the full amount of sale price by cheque and hence, it became virtually impossible for the company to purchase the proposed lands directly from the parties. In furtherance of the said letter, another communication dated 29.04.1997 sent by the Company to the Deputy Collector, Jamnagar is on record wherein there is a reference of some private persons visited the company and tried to make negotiations though they did not have possession of the land.
79. One of the files contains various communications between the Collector, Deputy Collector and the Section Page 50 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined Officer of the Revenue Department, Gandhinagar. Upon going through the said files, we may note that one file contains Office notings. The first Office noting pertaining to the acquisition in question is dated 26.05.1995 wherein certain documents were sought from the Collector. It is evident therefrom that the file for initiation of the acquisition proceedings was moved before the Revenue Department soon after the execution of the first agreement dated 17.02.1995 between the acquiring company and the Collector, Jamnagar. The said office noting, which is in vernacular, states that :-
"૫/૮ મ.વિ./ઘ કલેક્ટરશ્રી જામનગરના તા.૩-૫-૯૫ ના પત્રથી બી.એક્સ.એલ.- ઈન્ડીયા લી. તરફથી મોજે જામનગરની હે-આ-ચોમી. ૩-૩૦-૮૩ જમીન સંપાદન કરવાની દરખાસ્ત અત્રે મળેલ છે. દરખાસ્ત અધૂરી વિગતો વાળી છે. પાન ૫/૫ પ્રમાણે વિગતો મંગાવીએ (સહી-અવાચ્ય) ૨૬/૫/૯૫ સે.અ.શ્રી (ઘ) (સહી-અવાચ્ય) ૨૯/૫/૯૫ ઉ.સ.શ્રી (જ.સં.) (સહી-અવાચ્ય) ૩૧/૫/૯૫ ના.સ.શ્રી (જ.સં.) (સહી-અવાચ્ય) ૧/૬/૯૫ "
80. The translated version of the above quoted portion, reads thus:-
"(illegible) 'GH' Page 51 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined The proposal qua the letter dated 03/05/1995 of the Collector, Jamnagar for aquiring the land measuring 3-30-83 (Hec.-Aar-Sq.M.) at Jamnagar through M/s. B.X.L. India Ltd. has been received by this office. The proposal contains incomplete details. Details, as specified at Page No.5, have been sought.
Sd/- (illegible) 26.05.1995 Sd/- (illegible) 29.05.1995 Sd/- (illegible) 31.05.1995 Sd/- (illegible) 01.06.1995"
81. Another noting is dated 21.07.1997 wherein there is a reference of letters of the Collector dated 03.05.1995 and 18.06.1997. It is noted therein that an inquiry under Rule 4 of the Rules, 1963 of the Land Acquisition (Companies) Rules, 1963 was conducted by the Deputy Collector, Jamnagar, the report of which has been forwarded by the Collector, Jamnagar on 29.05.1997, which is in vernacular, and records as under :-
"મ.વિ./ઘ સાદર રજૂ ,
૨. કલેક્ટરશ્રી જામનગરનો તા. ૩/૫/૯૫ અને તા. ૧૮/૬/૯૭ અહેવાલ વંચાણે લેવા વિનંતી. વી.એક્સ.એલ.લી. (દીગ્જામ મીલ્સ લી.) માટે જામનગરના સ.નં. ૧૫૦, ૧૫૧/૩/એ અને ૧૫૧/૩/બી ની કુલ ૩ હે .-૩૦ આરે -૮૩ ચો.મી. જમીન સંપાદન કરીને આપવાની બાબતે તેમણે દરખાસ્ત મોકલી છે . (પૃ .૮૩/c)
૩. અરજદાર કં પની ૧૯૫૬ ની કં પની ધારા હેઠળ નોંધાયેલ કં પની છે . અને જામનગરમાં વુલન કાપડનું ઉત્પાદન કરે છે . મીલના વિસ્તરણ કામે જમીનો સંપાદન કરવાની જરૂરીયાત છે ; જેથી મીલની માલીકીની હાલની જમીનને લગત આવેલી ખાનગી માલીકીની નીચે મુજબની જમીન સંપાદન કરવાની દરખાસ્ત છે .
સ.નં. ક્ષેત્રફળ હે.આરે .ચો.મી.
૧૫૦ ૧-૦૮-૨૫
૧૫૧/૩/એ ૧-૩૨-૫૪
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NEUTRAL CITATION
C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025
undefined
૧૫૩/૩/બી ૦ -૯૦-૦૪
-------
૩-૩૦-૮૩
૪. જમીન સંપાદન કં પનીઝ રૂલ્સ ૧૯૬૩ મુજબ નિયમ ૪ ની છ બાબતો અંગે નાયબ કલેક્ટરશ્રી, જામનગરે તપાસ કરી છે , અને તેમનો અહેવાલ તા. ૨૯/૫/૯૭ ના રોજ કલેક્ટરશ્રી, જામનગરને રજૂ કરેલ છે , જે નીચે મુજબ છે .
(૧) કં પનીએ વિસ્તૃતીકરણ યોજના અમલમાં મુકી છે . પ્રથમ ચરણ ચાલુ કરેલ છે , બીજા ચરણમાં આ જમીનોની જરૂરીયાત વીજળી, પાણી અને પ્રદુષણ નિયંત્રણ અંગેના હેતુઓ માટે જરૂરીયાત છે .
(૨) કં પનીએ તા. ૧૪/૪/૯૭ ના રોજ ખાતેદારોને ચર્ચા-વિચારણા માટે બોલાવેલ હતા, જેમાં કં પનીએ એક વીઘાના રૂ. બે થી અઢી લાખ રૂપીએ બારોબાર જમીનની ખરીદી માટે પ્રયત્નો કર્યા હતા. જમીન ધારકોએ એક ચો.ફૂટના રૂ. ૧૦૦ થી ૧૨૫/-
ની માંગણી કરેલ. ફરીથી કં પનીએ તા. ૧૪/૫/૯૭ ના રોજ ખાતેદારોને વાટાઘાટો માટે બોલાવેલ, જેમાં કં પનીએ એક ચો.ફૂટના રૂ. ૨૫/- સુધીની કિંમત ચુકવવાની તૈયારી દર્શાવેલ હતી.
તા. ૨૦/૫/૯૭ ની મીટીંગનું પ્રોસીડીંગ સામેલ છે . આ જમીનોના સંપાદનની દરખાસ્ત કરતાં પહેલાં ખાનગી વાટાઘાટો દ્વારા જમીન મેળવવા માટે કં પનીએ પૂરતા પ્રયત્નો કરેલા છે . (ધ્વજ 'D') (૩) સવાલવાળી જમીનો કં પનીના પ્લાન્ટની લગોલગ આવેલ છે . તેથી કં પનીના વિસ્તૃતિકરણ માટે યોગ્ય છે .
(૪) કં પનીના જણાવ્યા મુજબ વિસ્તૃતિકરણ માટે તેમને ૩૫ હજાર ચો.મી. જમીનની જ જરૂરીયાત છે . અને હાલ માંગણીવાળી જમીનનો વિસ્તાર ૩૩૧૦૦ ચો.મી. છે . જેથી કં પનીની જરૂરીયાત કરતાં વધુ જમીન સંપાદનની દરખાસ્ત નથી.
(૫) સવાલવાળી જમીનનો કં પની ત્વરીત ઉપયોગ કરી શકે તેમ છે કેમ કે પ્રથમ વિસ્તૃતિકરણ તબક્કા માટે વીજળી, પાણી અને પ્રદુષણ નિયંત્રણ જેવી જરૂરીયાતો માટે આ જમીનનો ઉપયોગ કરવાનો છે .
(૬) સદરહું જમીન સિવાય અન્ય જમીનો ઉપલબ્ધ ન હોવાથી વિસ્તૃતિકરણના હેતુ માટે આ જમીન એકમાત્ર વિકલ્પ છે . સ.નં. ૧૫૦ અને ૧૫૧/૩ પૈકીની ખેતીની જમીન છે પરંતુ તેમાં ખેતી થતી નથી. અને હાલ પડતર છે . છતાં, ખેતીવાડી અધિકારીશ્રીનો તા. ૨૦/૧/૯૬ નો અહેવાલ મેળવવામાં આવેલ છે . (ધ્વજ 'C') Page 53 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined
૫. માંગણીવાળી જમીનો જામનગર શહેરી વિકાસ વિસ્તારમાં આવતી હોઈ શહેરી જમીન ટોચ મર્યાદા ધારો લાગુ પડે છે . નાયબ કલેક્ટરશ્રી, શ.જ.ટો.મ., જામનગરે જણાવેલ છે કે , સ.નં.૧૫૦ અને ૧૫૧/૩ ની જમીન બાબતે કોર્ટમાં દાવો ચાલતો હોવાથી સંપાદન બાબતે તેમનો અભિપ્રાય આપેલ નથી. આ બાબતમાં માન્ય રહે પ્રથમ યુ.એલ.સી. પ્રભાગનું નો ઓબ્જેક્શન સર્ટીફીકેટ મેળવીએ અને ત્યારબાદ કલમ-૪ ની વિધિસરની દરખાસ્ત મેળવીએ. (ધ્વજ 'B') (સહી-અવાચ્ય) ૧૭/૭ /૯૭ (સહી-અવાચ્ય) ઉ.સ.શ્રી (જસં) ૨૧.૦૭ .૯૭ (સહી-અવાચ્ય) ના.સ.શ્રી (જસં) ૨૨/૭ /૯૭ ના.સ.શ્રી(યુએલસી) SO/વ૧(ઢ) (સહી-અવાચ્ય) ૨૩/૭ મ.વિ ./વ-૧(ઉ) સાદર રજુ , 'ઘ' શાખાની ઉક્ત નોંધના અનુસંધાને આ શાખાની ફા.ફ. યુએલસી- ૧૦૯૭/૧૪૭૩/ઉ/વ૧ ઉપર તા. ૨/૯/૯૭ ના પત્રથી સક્ષમ અધિ. અને નાયબ કલે. જામનગરનો અહેવાલ મેળવવામાં આવેલ છે . જે તા. ૭ /૧૦/૯૭ તથા તા. ૨૩/૧૨/૯૭ થી વિભાગને મળેલ છે . જેની ચકાસણી કરી ફાઈલ NOC આપવા અંગેનો નિર્ણય લેવા માટે તા. ૨/૬/૯૮ થી સચિવશ્રી (જસુ) ને રજૂ કરવામાં આવેલ છે . જે પરત આવ્યેથી જે નિર્ણય લેવાશે તેની 'ઘ' શાખાને જાણ કરવામાં આવશે.
ઉક્ત નોંધ સાથે આ ફાઈલ 'ઘ' શાખાને પરત કરીએ.
(સહી-અવાચ્ય) (સહી-અવાચ્ય) સે.અ.શ્રી
૧૮/૬/૯૮ ૧૮/૬/૯૮ ઘ શાખા"
82. The translated version of the above quoted portion, reads thus :-
Page 54 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined "M.V. /'GH' It is to request that;
2. Kindly refer to the report dated 03/05/1995 and 18/06/1997 of the Collector. The proposal as to acquiring and handing over the land measuring 3 Hec
- 30 Aar - 83 Sq.mtr. in aggregate at Survey No. 150, 151/3/A and 151/3/B of Jamnagar for V.X.L. Ltd.
(Digjam Mills Ltd.) has been forwarded by him.
3. The applicant company is a company registered under the Companies Act 1956 and it manufactures woolen textile at Jamnagar. The land needs to be acquired for expansion of the company's operations. Therefore, it is proposed to acquire the following lands situated adjoining to the existing land owned by the company.
Survey No. Area (Hec.-Ar-Sq.Mtr.)
150 1-08-25
151/3/A 1-32-54
153/3/B 0-90-04
-------------
3-30-83
4. The Deputy Collector, Jamnagar has conducted an inquiry with regard to the six issues pertaining to Rule 4 of the Land Acquisition Companies Rules, 1963 and has sent his report to the Collector, Jamnagar on 29/05/1997, which is as under.
(1) The company has undertaken a scheme of expansion. The first phase has been undertaken. In the second phase, land will be required for the purposes such as electricity, water and pollution control.
(2) The company had called the agriculturists (land account holders) for discussion on 14/04/1997 wherein the company made attempts for outright purchase for consideration of Rupees two to two and half lakh per vigha. The land owners had demanded Rs. 100 to 125 per square feet. Again, the company called the agriculturists for negotiation on 14/05/1997 and showed willingness to pay Rs. 25/-
Page 55 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined per square feet as consideration. The minutes of meeting dated 20/05/1997 is appended herewith. The company has made sufficient efforts to obtain these land through private negotiations before moving the present proposal for land acquisition.
(3) The land in question is situated adjoining the company's plant. Therefore, it is suitable for company's expansion.
(4) As informed by the company, 35 thousand square meter of land is needed for its expansion. The area of the land demanded at present measures at 33,100 square meter. Thus, the proposed acquisition does not exceed the company's need.
(5) The land in question is of immediate use for the company as the land is to be used for the purposes such as electricity, water and pollution control during the first phase.
(6) As not any other land, except the land in question, is available, the present land is the only option. The lands at Survey No. 150 and 151/3 Paiki are the agricultural lands, however they are not under cultivation. At present, these lands are waste lands. Despite that, a report dated 20/01/1996 of the Agriculture Officer has been obtained.
5. As demanded lands fall under the Jamnagar Urban Development area, the Urban Land Ceiling Act is applicable. The Deputy Collector, Urban Land Ceiling, has informed that, as a litigation with regard to the land at Survey No. 150 and 151/3 is pending before the Court, he has not given an opinion about the acquisition. In this matter, if sanctioned, first a No Objection Certificate is to be obtained from the U.L.C. Division and thereafter proceed with a formal proposal under Section 4.
sd/- (illegible) With due respect, It is state that, with reference to the stated note of 'GH' Branch, a report from the Competent Page 56 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined Authority and Deputy Collector, Jamnagar has been obtained vide the letter dated 02/09/1997 on the file no. ULC-1097/1473/U/(illegible) of this Department and the same was received at the Department on 07/10/1997 and 23/12/1997. After verifying the file, it has been forwarded to the Secretary, Land Reform on 02/06/1996 for taking a decision on issuing NOC. The decision will be taken when the file is received back and the same will be communicated to 'GH' Branch.
This file is returned to 'GH' Branch with the above note.
Sd/- (illegible) 18/06/1999"
83. A perusal of the said office notings indicate that the Collector was asked to submit no objection certificate from the Urban Land Ceiling Department, for the purposes of issuance of the notification under Section 4.
84. From the office noting made thereafter, it seems that the matter has proceeded and clarifications were sought for and had been received by the Revenue Department. The office noting dated 08.03.1999 further refers to the letter dated 01.03.1999 of the Collector, Jamnagar, contents of which have been recorded therein as under :-
"મ.વિ ./............
સાદર રજૂ , (૧૦૭/પે) કલેક્ટરશ્રી, જામનગરનો તા. ૧-૩-૯૯ નો પત્ર જોવા વિનંતી.
૨. મોજે ગામ જામનગરની હે ૩-૩૦-૮૩ ચો.મી. જમીનો બી.એક્સ.એલ. દિગ્જામના જાહેર હેતુ માટે સંપાદન કરવા સારૂ કલમ-૪ ના જાxતા ની દરખાસ્ત રજૂ કરી છે .Page 57 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025
NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined
૩. પ્રશ્ન હેઠળની જમીનોનું યુ .એલ.સી.નું "ના વાંધા પ્રમાણપત્ર" મેળવેલ છે .
૪. જમીન સંપાદન કં પનીઝ રૂલ્સ ૧૯૬૩ ના નિયમ ૪ ની જોગવાઈઓ મુજબ કં પનીએ પોતાની રીતે જમીનો મેળવવા પ્રયત્નો કરેલા છે અને વાજબી કિંમતની ઓફર કરેલી છે પરંતુ ખાતેદારો વધુ રકમ માંગે છે . વળી જમીનો કં પની માટે અનુકૂળ છે અને વધારે પડતી જમીનો સંપાદન થતી નથી. કં પની જમીનોનો તાત્કાલીક ઉપયોગ કરી શકે તેમ છે અને જમીનો ખેતીલાયક નથી.
૫. ખેતીવાડી અધિકારીનું પ્રમાણપત્ર સામેલ છે .
૬. દરખાસ્ત સાથે પ્રશ્નોત્તરી ફોર્મ, ફોર્મ-ક, ૭ /૧૨ ના ઉતારા, પારા ૧૦૪ નું પત્રક, હિસ્સા ફોર્મ, નકશા, તથા કરારનામું રજૂ કરેલ છે .
૭. ઉપરની વિગતોએ કલમ-૪ નું પ્રાથમિક જાહેરનામું મંજૂ ર કરવામાં હરકત સરખું નથી.
૮. માન્ય રહે પા ૨૩૫ પે ૫મી માહિતી કલમ-૪ નું જાxતા પ્રસિધ્ધી અર્થે મોકલી આપીએ તથા પા ૨૩૭ પે .............. પત્રની જમીન સંપાદન સમિતિને જાણ કરીએ.
(સહી-અવાચ્ય ) સે.અ.શ્રી
૮/૩/૯૯
(સહી-અવાચ્ય) ઉસશ્રી(જસં)
૦૮.૦૩.૯૯
(સહી-અવાચ્ય) નાસશ્રી(II)
૮.૩.૯૯
(સહી-અવાચ્ય) અ.પ્ર.સચિવશ્રી અને
8.3.99 અધ્યક્ષ, જમીન સંપાદન
સમિતિ"
85. The translated version of the above quoted portion, reads thus :-Page 58 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025
NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined "With due respect, Kindly refer to the letter dated 01/03/1999 of the Collector, Jamnagar.
2. A proposal for a notification under Section 4 with regard to acquiring, in public interest, the land measuring (illegible) - 3-30 Hec.-Are-Sq.Mtr. at Jamnagar for B.X.L. Digjam has been presented.
3. A No Objection Certificate of the Urban Land Ceiling Division for the land in question is obtained.
4. The company had made attempts to acquire the land independently and in accordance with the provisions under Rule 4 of the Land Acquisition Companies Rules, 1963 and a fair price has been offered. However, the agriculturists (land account holders) demand higher price. Moreover, the lands are suitable for the company and land is not acquired in excess. The company can put the lands under use on immediate basis and the lands are not agricultural lands.
5. A certificate issued by the Agriculture Officer is appended.
6. Questionnaire, Form (illegible), Form 7/12, (illegible) Sheet, Hissa Patrak, Sketches and Agreement Deed are appended herewith.
7. With the above details, there is no objection against issuing a preliminary notification under Section 4.
8. If sanctioned, details under (illegible) will be sent for publication qua the notification under Section 4 and the certificate under (illegible) 235 will be informed to the Land Acquisition Committee.
Sd/- (illegible)"
86. The record indicates that the said office noting dated 08.03.1999 was placed before the three member Land Acquisition Committee, and members of the Committee made Page 59 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined countersignatures on the same date, i.e. on 08.03.1999, on the office note, itself. The proceedings for preparation of the notification under Section 4 of the Act, 1894 was, thereafter, conducted by the Revenue Department and a copy of the approved draft notification from the record has been placed before us by the learned Assistant Government Pleader to argue that the procedure required had been followed, inasmuch as, the inquiry report of the Deputy Collector dated 29.05.1997 after making inquiry under Rule 4 of the Rules was placed before the Revenue Department, Gandhinagar. The agreement dated 02.06.1999 was also executed between the company and the Collector, Jamnagar, after approval for acquisition granted by the Land Acquisition Committee on 08.03.1999.
87. However, nothing from the original record could be placed before us to demonstrate that any satisfaction of the appropriate Government (State Government) was recorded to accord its previous consent for issuance of the notification under Section 4 of the Act, 1894, for the acquisition of the lands in question for the respondent No.2.
88. The most astonishing fact of the matter is that the notification under Section 4 of the Act, 1894 was published on 10.03.1999, prior to the second agreement dated 02.06.1999 sent by the company along with its letter of the same date to the Collector. The fact that the notification under Section 4 was published within a period of two days from the date of the positive opinion accorded by the Land Acquisition Committee on 08.03.1999 on the office note itself, is relevant to be taken Page 60 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined note of, apart from the above facts noted hereinabove from the original record, which make it evident that there has been absolutely no satisfaction or previous consent of the appropriate Government (State of Gujarat) for acquisition of the lands in question, as per the requirement of Section 39 contained in Part-VII.
89. As noted hereinbefore, the Land Acquisition Committee was constituted under Rule 3 to advise the appropriate Government on matters relating to or arising out of the acquisition of land under Part-VII of the Act. The Land Acquisition Committee was only a consulting body and it had no jurisdiction to take a final decision in the matter of acquisition. The publication of the notification under Section 4 dated 10.03.1999, for acquisition of the lands in question on the advise of the Land Acquisition Committee constituted under Rule 3 of the Rules, 1963, itself is sufficient to hold that the entire exercise of acquisition of lands in the instant case, is a colourable exercise of power conferred on the appropriate Government.
90. The facts transpired from the record which establish that there was absolutely no application of mind on the part of the appropriate Government much less the satisfaction recorded by it for the purposes of acquisition, are to be culled out as under :-
(i) The notification under Section 4 had been published on 10.03.1999, considering the report of the inquiry dated 29.05.1997 submitted by the Deputy Collector, but the agreement which was required to be placed before the Land Acquisition Committee for forming its opinion was Page 61 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined executed much prior in point of time, inasmuch as, it was executed between the company and the Collector, Jamnagar on 17.02.1995 without any previous inquiry under Section 40 of the Act, 1894.
(ii) It was a pre-mediated exercise of power by the Collector, Jamnagar where in an illegal manner, the Collector had executed an agreement with the company without making any prior inquiry, which was a pre-requisite under Section 40 of the Act, 1894 read with Rule 4 of the Rules, 1963.
(iii) The second agreement dated 02.06.1999 evidently was executed between the acquiring Company and the Collector after three months of the publication of the notification under Section 4 on 10.03.1999.
(iv) From both angles, even if the first agreement dated 17.02.1995 or the second agreement dated 02.06.1999 are taken into consideration being the agreement executed between the Company and the appropriate Government (Collector), none of them fulfill the requirements of Sections 39, 40 and 41 read with Rule 5 of the Rules, 1963.
(v) The result is that when the matter was placed before the Land Acquisition Committee on 08.03.1999 for forming its opinion to give advice to the appropriate Government, there was no proper agreement in the eye of law.
(vi) Above all, previous consent of the Appropriate Government on the advise of the Land Acquisition Committee had not been obtained. There is even no Page 62 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined whisper in the affidavit filed on behalf of the State respondents of any satisfaction recorded or accorded by the appropriate Government, namely the State Government.
(vii) Moreover, the inquiry report dated 29.05.1997 of the Deputy Collector which forms basis of the opinion derived by the Land Acquisition Committee is not in conformity with Section 40 read with Rule 4 of the Rules, 1963.
(viii) Before submitting the report dated 29.05.1997, the Deputy Collector issued notice to the petitioners, namely the land owners on 14.05.1997. The meeting was held on 20.05.1997 but there was a discussion only about the price of the land. The affidavit of the Deputy Collector, Jamnagar states that as the petitioner No.2, the Director of the petitioner - company had objected to the acquisition, there was no question of negotiating with him with regard to quantum of compensation. However, other co-owners did not agree to the price offered by the company. It is, thus, evident that the Deputy Collector conducted the inquiry with an intent to mediate between the land owners and the acquiring company about the price of the land in question. The extract of the inquiry report dated 29.05.1997 as noted in the office note dated 18.06.1999 (extracted hereinabove) indicates that the inquiry did not fulfill the requirement of Rule 4, wherein it was required to ascertain that the company made all reasonable efforts to get the land in question by negotiation with the persons interested on payment of reasonable price. The statement in the inquiry report that Page 63 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined the company had called the agriculturists for discussion on 14.04.1997 when attempt was made for purchase of the land in question is a clear proof of the fact that the company first wrote to the Collector, entered into an agreement on 17.02.1995 for acquisition of the land in question, and then started negotiation. This fact itself is sufficient to prove that in the alleged negotiation by the company held on 14.04.1997 or the negotiation made by the Deputy Collector in the meeting held on 20.05.1997, the land owners did not have a level playing field as they were asked to negotiate with the hanging sword of acquisition.
(ix) From the record, it is evident that no independent inquiry was conducted by the Collector in conformity with the provisions of Section 40 of the Act, 1894 read with Rule 4 of the Rules, 1963 before submitting the proposal to the appropriate Government seeking its previous consent.
(x) For the above noted facts culled out from the original record as also the affidavits filed on behalf of the acquiring company and the State authorities, it is evident that the entire acquisition under challenge is a colourable exercise of power on the part of the State authorities. Strict compliance of the procedure for acquisition under expropriatory legislation was mandatory which has not been followed rather has been breached with impunity.
91. Article 300-A of the Constitution of India is an embodiment of right to personal property with the declaration "no person shall be deprived of his property save by authority of law", which has been characterized both as a constitutional and also human right (Reference : Lachhman Dass vs. Jagat Ram and others - 2007 (10) SCC 448; Vidya Devi vs. State of Himachal Pradesh and others - 2020 (2) SCC
569). Under the constitutional scheme, compliance with the Page 64 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined fair procedure of law before depriving any person of his immovable property is well entrenched. In a recent decision in Kolkata Municipal Corporation and another vs. Bimal Kumar Shah and others - 2024 (10) SCC 533, the Apex Court while dealing with the right to property guaranteed under Article-300A of the Constitution viz-a-viz compulsory acquisition within the power of eminent domain of the State, has observed that compulsory acquisition will still be unconstitutional if proper procedure is not established or followed before depriving a person of his right to property. It was observed that undue emphasis made on provisions of compensation to justify the power of compulsory acquisition, as if compensation by itself is the complete procedure for a valid acquisition, cannot be countenanced. To assume that constitutional protection gets constricted to the mandate of a fair compensation would be a disingenuous reading of the text and offensive to the egalitarian spirit of the Constitution. It was observed that the twin requirements of the acquisition being for a public purpose and subjecting the divestiture to the payment of compensation in lieu of acquisition, although not explicitly contained in Article-300A, but they have been read in and inferred as necessary conditions for compulsory deprivation to afford protection to the individuals who are being divested of property.
92. It was held that the constitutional right to property must be given meaningful renditions where larger right to property is seen as comprising intersecting sub-rights, each with the distinct character but interconnected to constitute the whole. These sub-rights weave themselves into each other and, as a Page 65 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined consequence, State action or the legislation that results in the deprivation of private property must be measured against this Constitutional net as a whole, and not just one or many of its strands. Para 30, 31 and 32 of the judgment elaborate on these seven sub-rights which may be procedures, but they constitute real content of the right to property under Article- 300A, non-compliance of which will amount to violation of the right, making the acquisition process susceptible to challenge.
93. It was, thus, held that non-compliance of the procedure in the exercise of power of eminent domain which results in compulsory deprivation of private property is fetter and would make the whole process being without the authority of law, violating the individual right to property protected under Article - 300A of the Constitution.
94. There is one more aspect of the matter. The land in question has been acquired for the purposes of expansion of the factory run by the respondent - Company, namely Digjam Woollen Mills, which was running adjacent to the lands in question at the relevant point of time. As on date, the factory is not in existence and the lands over which the factory premises situated, has been sold by the respondent - company. The result is that the purpose for which the land in question was acquired stands frustrated with the passage of time. The land in question, thus, cannot be utilized for the purpose for which it was acquired.
95. In Devinder Singh (supra), it was clarified by the Apex Court that acquisition for public purpose or for a company cannot be inter-changed. The appropriate Page 66 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined Government is required to form a clear opinion before proceeding to make a declaration about acquisition of any land at the instance of a company, whether the acquisition is for a public purpose or it is for a company, inasmuch as, there can be no declaration that acquisition is for a public purpose and for the company, as it cannot be for both. It was held that once it is clear that the acquisition is made under Part-VII for a company, the conditions precedents therefor as contained in the Rule, 1963, must be satisfied. It, thus, becomes relevant to examine as to how the process was conducted by the State Government in the instant case.
96. A bare reading of the acquisition notifications published under Sections 4 and 6 of the Land Acquisition Act, 1894, in the instant case, indicates that the purposes for which the lands in question was stated to have been acquired therein, was termed as "public purpose". The notification under Section 6 dated 13.04.2000 records that the Government of Gujarat had recorded satisfaction after considering the report of the Assistant Collector, Jamnagar under Sub-section (2) of Section 5A of the Land Acquisition Act, 1894 and that the lands are needed to be acquired at the public expenses for the purposes specified in the schedule. The schedule incorporates "the public purpose for which the lands are needed", and elaborates the purpose as "establishing expansion project related utilities, effluent plant and other infrastructure facilities for Birla VXL Limited (Digjam Limited)".
97. Thus, it is evident that the understanding of the State authorities dealing with the acquisition in question at the relevant point of time, was that "public purpose" and "purpose Page 67 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined for a company" were inter-changeable. The statement in the declaration under Section 6 dated 13.04.2000 that the Government of Gujarat was satisfied that the lands in question were needed for public purposes at the public expenses after considering the report of the Assistant Collector under Section 5-A(2) itself, is sufficient to hold that the entire acquisition proceedings were conducted as if the land in question was needed for a public purpose for which procedure under Part-II was required to be followed. This lack of understanding of distinction between the procedure prescribed in Part-II and Part-VII of the Act, 1894 at the ends of the State authorities dealing with acquisition in question, itself is a clear proof of the illegal exercise of power on the part of the State authorities in dealing with the matter where request for acquisition of a private land was made by a private company.
98. We may also note the arguments of Ms.Garima Malhotra, learned advocate appearing for the respondent - company that under the terms of the agreement executed between the respondent - company and the Collector, in light with Rule 5 of the Rules, 1963, it is open for the respondent company to seek previous sanction of the State Government to use the acquired land for any purpose other than for which it was acquired. The submission is that though the purpose for which the land in question was acquired had been frustrated with the passage of time, but the respondent company cannot be made liable for non-utilization of the land in question, which is a force majeure on account of the interim order granted by this Court in the present petition. The contention is that the petitioners/landowners cannot be given undue Page 68 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined benefit of the protection granted by this Court under the interim order for maintaining status-quo.
99. Considering the above, we posed a question to ourselves as to whether the lands in question can be utilized by the Company or it will revert back to the State Government to be utilized for any other purposes than for which it was acquired, had we reached at the conclusion that the procedure prescribed by law had been followed, though we have not been able to.
100. The present acquisition is for a private company. As per the terms of the agreement, the lands in question if not utilized for the purposes for which it was acquired, the State Government can resume the unutilized land or part thereof, by giving notice and opportunity of hearing to the company, on the ground of breach of the terms of the agreement. A further question is as to whether the State can utilize the lands in question for any other purposes than for which it is acquired.
101. Section 16 of the Land Acquisition Act, 1894 which is made applicable only on compliance of Section 39 contained in Part-VII in the case of acquisition for a private company, provides as to when and how the acquired land would vest absolutely in the appropriate Government free from all encumbrances. The twin conditions of Section 16 are that, (i) the Collector has made an award under Section 11; and (ii) the Collector takes possession of the acquired land after making an award. The words used are "which shall thereupon", which means that on fulfillment of twin conditions enumerated in Section 16 of the Act, 1894, the acquired land Page 69 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined would vest absolutely in the appropriate Government free from all encumbrances.
102. The result is that making an award must precede the act of taking possession of the acquired land, inasmuch as, Section 17(1) and (4) which dispense with the inquiry under Section 5A of the Act, 1894 or empowers the Collector to take possession without making an award, are not applicable in the case of acquisition for a company under Part-VII, in the light of language of Section 39 which excludes Section 17 expressly from being invoked in such matters. Moreover, vesting of land absolute with the appropriate Government is subject to fulfillment of mandatory procedural requirement for acquisition for a company, which has not been followed in the instant case.
103. The land in question may be in the physical possession of the respondent - company as on date or the compensation may have been deposited by the company as per the award of the Special Land Acquisition Officer prior to taking possession, but both these factors would not be relevant to accept the contention of the respondent - company or the State that the lands in question can be utilized for any other public purpose, other than for which it is acquired.
104. Suffice it to record that in the acquisition for a private company, the purpose for which private lands are acquired is the most important aspect of the matter. Only in a case where acquisition process is complete in all respects and there has been no challenge at the relevant point of time, the acquiring company could argue that it is open for it to utilize the land in Page 70 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined question for any other purpose than for which it was acquired with the previous sanction of the appropriate Government. Even the State Government cannot argue that the land acquired for a private company was an acquisition for public purpose and the acquired land can be utilized for any other purposes than for which it was acquired. The "public purpose"
and for the "purposes of a private company" are two different aspects of compulsory acquisition under the Land Acquisition Act, 1894 and, as such, they are dealt with two different parts of the Act, namely Part-II and Part-VII; respectively.
105. With the above, we reach at an irresistible conclusion that the entire acquisition process was conducted without authority of law which has resulted in deprivation of the petitioner of its property in utter violation of the Article - 300A of the Constitution of India. Both the notifications under Sections 4 and 6 of the Land Acquisition Act, 1894 dated 10.03.1999 and 13.04.2000; respectively, are hence quashed. The subsequent proceedings conducted in the matter of acquisition of the lands in question are set aside.
106. The respondent - company who claims to be in the physical possession of the land in question, is hereby directed to handover vacant and peaceful possession of the lands in question to the petitioners herein. The Collector, Jamnagar shall ensure that the process of handing over possession to the petitioners is conducted in a peaceful manner and at the earliest. The compensation amount deposited by the company lying in the Treasury/office of the Collector shall be refunded to the respondent - company, soon after the process of Page 71 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025 NEUTRAL CITATION C/SCA/13078/2000 CAV JUDGMENT DATED: 14/08/2025 undefined handing over possession of the land in question to the petitioners is over. The entire exercise shall be completed, as expeditiously as possible, preferably within a period of six weeks from the date of receipt of the copy of this order by the Collector, Jamnagar. The report of compliance of the above directions shall be submitted by the Collector before this Court through the Registrar General, High Court, immediately thereafter.
107. With the above observations and directions, the present petition stands allowed. No order as to costs.
FURTHER ORDER After delivering of the judgment, the original record of the acquisition kept for the purposes of dictation of the judgment, is handed over to Ms. Hetal Patel, learned Assistant Government Pleader appearing for the State respondent, in the Court.
(SUNITA AGARWAL, CJ ) (D.N.RAY,J) GAURAV J. THAKER / CM JOSHI Page 72 of 72 Uploaded by C.M. JOSHI(HC01073) on Wed Aug 20 2025 Downloaded on : Wed Aug 20 21:44:57 IST 2025