Bombay High Court
Bharat S/O Maganbhai Kheta vs Nagpur Improvement Trust on 28 October, 1991
Equivalent citations: (1992)94BOMLR67
JUDGMENT H.D. Patel, J.
1. In the aforesaid petitions filed under Article 226 of the Constitution, the petitioners challenge notifications issued under Sections 31 and 45 of the Nagpur Improvement Trust Act (hereinafter referred to as "the NIT Act") as well as the consequent land acquisition proceedings resulting in respective awards. Since the questions of law arising in these petitions are more or less the same, we have decided lo dispose them of by this common judgment.
2. The petitioners in writ petition No. 476 of 1983 arc the grandsons of late Shri Shamjibhai Kheta, who owned large property at Nagpur. These petitioners are the legatees under the last 'will' of the said Shri Shamjibhai Khcta who died on November 15, 1967. The three executors appointed under the will were (1) Shri A.S. Bobde, Advocate (2) Shri Trimbak Shamji Khcta and (3) Shri M.M. Khinkhcde, Advocate. The executors obtained the probate or the letters of administration from the Civil Court. Amongst the property left by late Shri Shamjibhai was the land called 'Shambag' which comprises of Khasra Nos. 9, 10,11, 12 and 16/2 admeasuring 42.88 acres.
3. The Nagpur Improvement Trust framed a scheme known as "Sakkardara Street Scheme" under Section 31 of the NIT Act. Objections were invited by publishing a notice in the Official Gazette on February 22, 1962 in accordance with Section 39 of the NIT Act. The said scheme was sanctioned by the State Government and the State Government announced this fact by further notification issued on September 3, 1967 under Section 45 of the NIT Act. By publication of the notification, it is clear that the scheme is duly framed and sanctioned.
4. The proceedings for acquisition of Khasra Nos. 9, 10, 11, 12 and 16/2 were initialed along with others vide Land Acquisition Case Nos. 469 to 476/A-165/68-69. The executors on behalf of the legatees and the sons of late Shamji Khcta, namely, (1) Murarji Shamji Khcta, (2) Magan Shamji Khcta, (3) Kanji Shamji Khcta and (4) Trimbak Shamji Kheta received notices under Section 9(1) of the Land Acquisition Act (hereinafter referred to as "the Act") somewhere in September, 1970. The executors of the will had also applied for abandonment of the land covered by the scheme under Section 68 of the Act but the said application was rejected. The Land Acquisition proceedings resulted in an award dated December 10, 1975. A reference under Section 18 of the Act is still pending. The Nagpur Improvement Trust claims that possession has been obtained on July 21, 1981/July 23,1981 whereas the petitioners claim that they are still in possession. Only when the advertisement was published in local dailies in November, 1982 inviting applications for distribution of plots/houses from low income group, middle income group and high income group, the petitioners filed this petition.
5. The petitioners in writ petition No. 673/85 are owners of house No. 1161/85, area 1630 sq.ft. in ward No. 15, Bidpeth, Nagpur. It was the subject-matter of acquisition proceedings in revenue case No. 275/A-65/68-69. The property was being acquired for the 'Sakkardara Street Scheme' with the only difference that the notification issued under Section 39 of the NIT Act was dated April 23, 1964, though the wording used therein was identical to one issued on February 22, 1964. The declaration under Section 45 was made on September 2, 1967. The Award in the acquisition proceedings was made on September 19, 1972. The amount of compensation was deposited on December 16, 1980. The possession of the property was demanded vide notice dated December 19, 1984 which prompted the petitioners to move this petition.
6. The petitioners in writ petition No. 783/85 have challenged the acquisition of their properly bearing house No. 1079 situated at Bidpeth, Nagpur in respect of 0.50 acres in Khasra No. 32/1, in revenue case No. 279/280A-65/68-69. Even this acquisition was for implementation of the 'Sakkardara Street Scheme' which was framed and sanctioned by notices referred to above. The Award in this case was made on March 7, 1973 and the compensation amount appears to have been deposited soon thereafter on May 14, 1973. When possession was demanded vide notice dated December 19, 1984, the petitioners filed this petition.
7. The petitioners in writ petition no, 1723/86 claiming to be the owners of land Survey Nos. 10/1(k) and 10/3 to the extent of 2.31 acres of Mouza Bidpeth, as the heirs of Ramji Khant, are challenging the acquisition proceedings in revenue case Nos. 86-87/A-65/67-68. Needless to mention that the acquisition was for 'Sakkardara Street Scheme', a declaration for which was issued under Section 45 of the NIT Act, as aforestated. It is alleged that for the first time the husband of the petitioner No. 1 Ramaji Khant received a notice under Section 9(1) of the Act to appear personally or through an authorised agent on June 26, 1986 before the respondent Land Acquisition Officer, that is, after a lapse of 19 years from the date of declaration issued under Section 45 of the NIT Act. It is on the ground of delay and laches that the petitioners have come forward to quash the proceedings.
8. The petitioners in writ petition No. 1656/86 are also claiming to be the owners of land in Khasra Nos. 10/1 (K) and 10(3) area 4 acres of Mouza Bidpeth, Nagpur and are challanging the very same acquisition proceedings which are under challange in writ petition No. 1723/86, namely, revenue case Nos. 86-87/A-65/67-68. It appears that the petitioners in writ petition No. 1723/86 arc claiming to be owners of Khasra Nos. 10/1(k) and 10(3) to the extent of 2.31 acres out of 10.21 acres. Apart from the dispute relating to title, the facts are almost identical in both the petitions. The date of appearance as given to some of the petitioners in writ petition No. 1656/86 was July 18, 1986 vide notice dated June 24, 1986 served under Section 9(1) of the Act. The land acquisition proceedings are challenged on the ground of gross delay of 19 years as in the connected petition.
9. The petitioners in Writ Petition Nos. 1038/85 and 1039/85 are also challenging the acquisition of their property vide Revenue Case Nos. 276/A-65/68-69 and 275/A-65/68-69. The petitioner No. 1 in Writ Petition No. 1038/85 purchased 2291 sq.ft. of land out of Khasra No. 30/2 in Ward No. 11, Nagpur vide sale-deed dated September 8,1981 while the petitoner No. 2 purchased the adjoining land, admeasuring 1254 sq.ft. vide sale deed dated December 28, 1981. The petitioners in writ petition No. 1039/85 arc the legal heirs of late Shri Bala Jago Rakas and hence the owners of the land with a house standing thereon admeasuring 27841 sq.ft. in Khasra No. 30/1, Bidpeth, Nagpur. The acquisition of these lands was for 'Sakkardara Street Scheme' which as stated above has been duly framed and sanctioned. The Award in revenue case No. 276/A-65/68-69 was passed on June 8, 1972 whereas Award in revenue case No. 275/A-65/68-69 was passed on September 19, 1972. The two petitions were filed when possession was sought to be taken from the petitioners.
10. The first and foremost submission on behalf of all the petitioners was that the scheme of the Nagpur Improvement Trust Act in framing and sanctioning an improvement scheme as well as the scheme of land Acquisition Act enjoins a duty on the respondents to act with expedition in finalising the acquisition of properties covered by the scheme. Once that duty or obligation is deviated from and there is wholly an unexplained delay in the issuance of the notifications and proceedings undertaken for acquisition of the properly, then prima facie, the exercise of power of eminent domain for acquisition becomes unreasonable and arbitrary. In this context, it was further emphasized that reasonableness in exercise of the power vested in the authorities was inherent in the statute itself and in any event reasonableness would mean acting within reasonable period of time, even though no specific period has been prescribed. Consequently, it was urged that unexplained delay is the plainest indicia which conclusively establishes that original exercise of power was a colourable one and thus liable to be quashed.
11. The question which falls for determination is whether quashing of land acquisition proceedings on the ground of colourable exercise of power is warranted in writ jurisdiction? There appears to be a long line of unbroken enunciation of the principle and equally of precedent that colourable exercise of power would vitiate every such action. As a matter of fact, there can be no-dispute in so far as the principle is concerned that if the Writ Courts come to the conclusion that any action under a statute is not bonafide but only a misuse or abuse of the power conferred, then it has the power of quashing the same arid indeed it is duty-bound to do so. Within the specific field of acquisition proceedings, the final Court has made consistent observations which arc a pointer to the view that such proceedings would be vitiated if they arc tainted with colourable exercise of power. The first decision on the subject is to be found in Ambalal.Purshottam v. Ahmedabad Municipal Corporation of the City of Ahmedabad . The principle is cnuciated in the following terms [at p. 1227 para. 11 of (1968) A.I.R. 1223]:
. We are not hereby to be understood as suggesting that after issue of the notifications under Sections 4 and 6 the appropriate Government would be justified in allowing the matters to drift and to take in hand the proceedings for assessment of compensation whenever they think it proper to do. It is intended by the scheme of the Act that the notification under Section 6 of the Land Acquisition Act must be followed by a proceeding for determination of compensation without any unreasonable delay. But on the facts of the present case, it does not appear that there was any scope for holding that with a view to prevent the land owners or the persons claiming derivative title from them from getting the benefit of the rise in prices, notifications under Sections 4 and 6 were issued without any intention to take steps for acquisition of the lands.
12. The proposition that acquisition proceedings would be vitiated if they lack bonafides and are only colourable exercise of power has been reiterated in The State of Punjab v. Gurdial Singh . It is observed in no uncertain terms in paragraph 9 as under:
The question then, is what is malafides in the jurisprudence of power? Legal malice is gibberish unless juristic clarity keeps it separate from the popular concept of personal vice. Pithily put, bad faith which invalidates the exercise of power - sometimes called colourable exercise or fraud on power and often times overlaps motives, passions and satisfactions - is the attainment of ends beyond the sanctioned purposes of powor by simulation or pretension of gaining a legitimate goal. If the use of the power is for the fulfilment of a legitimate object the actuation or catalysation by malice is not legicidal. The action is bad where the true object is to reach an end different from the one for which the power is entrusted, goaded by extraneous considerations, good or bad, but irrelevant to the entrustment. When the custodian of power is influenced in its exercise by considerations outside those for promotion of which the power is vested the court calls it a colourable exercise and is undeceived by illusion. In a broad, blurrcd sense, Benjamin Disraeli was not off the mark even in law when he stated: "I repeat...that all power is a trust - that we are accountable for its exercise - that, from the people, and for the people, all springs, and all must exist." Fraud on power voids the order if it is not exercised bona fide for the end designed. Fraud in this context is not equal to moral turpitude and embraces all cases in which the action impugned is to affect some object which is beyond the purpose and intent of the power, whether this be malice-laden or even benign. If the purpose is corrupt the resultant act is bad. If considerations, foreign to the scope of the power or extraneous to the statute, enter the verdict or impels the action mala fides or fraud on power vitiates the acquisition or other official act.
13. On the point that notification under Section 4 is issued not for bonafide purpose of acquisition but for collateral purpose of pegging down the prices or for feezing the prices and preventing the petitioner from securing the benefit, the various High Courts have held that such a notification is not liable to be sustained and must be quashed. In the case of P. Appalamurthy v. State of A.P . It is held in a portion of paragraph 9 as under:
It cannot say that it will keep the notification issued under Section 4(1) of the Land Acquisition Act alive and, at the same time, wait for the result of the proceedings under the ceiling laws, so as to ultimately opt for the more advantageous alternative. This would be an unreasonable and arbitrary exercise of power. A notification cannot be issued for the purpose of pegging down the price, or for freezing the price, as the case may be, and then wait for a convenient and opportune time to pass an award. Such a line of thinking and the course of conduct is alien to the scheme and intendment of the Land Acquisition Act....
14. A similar view is expressed in Radhey Sham Gupta v. State of Haryana :
28. The immediate effect of the issue of a notification under Section 4 plainly is that the market value of the land is artificially pegged down on that dale. The owner virtually loses the beneficial enjoyment of his property because any improvements made on the land thereafter arc not to be compensated at all. Apart from this fact, the citizen is left dangling at the mercy of the State to acquire or not to acquire because the power remains with the Stale to withdraw from the acquisition at any time. If the prices fall, the respondent-Slate can cancel the notification to the grave prejudice of the land owner. On the other hand the respondent-State who holds the whip hand, is not at all likely to be adversely affected. Consequently, it is the duty of the respondent-State to act with the utmost expedition in acquisition proceedings because acting within a reasonable time even where no limitation is provided, is the unwritten premise of the statute. Equally, it has to be borne in mind that the act is exproprictory and has, therefore, to be narrowly construed. The strictness with which the final Court has viewed the acquisition proceedings is highlighted by the judgements of the Supreme Court holding that even a violation of the procedural provisions like the publication of Section 4 notification in the locality would vitiate the whole acquisition proceedings. Not only this, the publication must be simultaneous with the notification and in case it is not, each day's delay has to be satisfactorily explained in order to save the validity of the notification. Similarly, the proviso to Section 6(1) now lays down a strict outer limit and even a day's delay beyond three years would bar the State from issuing a notification under Section 6 thus wiping off any earlier intention to acquire the land. It would thus appear that where the very initiation of the proceedings is rested on nothing more than an illusory need in the future rather than immediate need for existing public purpose, the same can hardly be sustainable. Equally, a total unexplained inaction and procrastination in this context would lead to an inflexible presumption that in fact there was no immediate need for an existing public purpose and the exercise of the power of acquisition would thus be a colourable one.
15. Following the Full Bench of Punjab and Haryana High Court in Radhey Sham Gupta's case, it is held by the Calcutta High Court in Satyam Co-operative Housing Society Ltd, v. Calcutta Improvement Trust in paragraph 64 as under:
64.1 have no doubt in my mind that the State Government as also the Calcutta Improvement Trust are entirely responsible for the delay in the conclusion of the acquisition proceedings and further that this acquisition proceeding is now sought to be concluded or has been concluded with the sole purpose that the concerned authority wanted to acquire the land on the basis of the price as prevailing in 1964 when the notification under Section 43(1) of the C.I. Act was published. There could not be any more glaring instance of pegging down that price as in the present case. There is no time limit for conclusion of the acquisition proceedings in the Act but that docs not mean that State Government can conclude the proceedings at any time, may be after 10 or 20 years at the whim and caprice of the State Government and without any reasonable excuse for the delay. One cannot dispute that the result of such procrastination on the part of the concerned authorities is that the person whose land has been acquired would get the compensation at the market rate prevailing on the date of the publication of Section 4 notice or as in this case Section 43 notice. Although by reason of such delay, the prices of the land have in the meantime a phenomenal increase. In my view, this is not the intendment either of the Calcutta Improvement Act, 1911 or the Land Acquisition Act, 1894. Now, of course, the Land Acquisition Act, 1894 has incorporated a new provision being Section 11 to the effect mat the Collector shall make an award under Section 11 within a period of 2 years from the date of publication of the declaration and if no award is made within that period, the entire proceedings for the acquisition of the land shall lapse.
16. Even the recent decision of the Calcutta High Court reiterates the aforesaid view in Ratan Chand Burman v. The Chairman, Calcutta Improvement Trust . It is observed in that judgment that unjustified and unexplained delay in continuing and completing the acqusition proceedings may in some cases lead to a conclusion of lack of bonafides on the part of the acquiring authorities and this supports the contention laid down in various cases that unexplained and inordinate delay is a relevant, if not conclusive, factor in determining the colourable exercise of power in the context of land acquisition proceedings. It further lays down as under :
...It is true that generally, acquisition proceedings arc initiated for a public purpose and necessarily in the public interest. We are also conscious of the fact that the governmental machinery lacks speed because of various justified and unjustified constraints. But the individual interest of the citizen cannot be altogether ignored. If the Government freezes the property of a citizen for 26 years and even then it is uncertain how it proposes to achieve the public purpose, any further continuance of such acquisition proceedings must be held to be unfair and arbitrary. We recognise the principle that weightage should be given to public interest. But we should not give it such weight as would make it oppressive vis a vis the individual right of citizen to freely deal with his property....
17. From the aforesaid discussions, it inevitably follows that in construing the challenge to the acquisition proceedings, on the ground of colourable exercise of power the Court has to take an over-all perspective of the whole matter and irrespective of finical divisions based on the various stages of acquisition. A scheme is framed by the Nagpur Improvement Trust under Chapter IV of the Nagpur Improvement Trust Act. After the scheme is prepared it has to be published in the manner prescribed by Section 39 of the NIT Act. This publication under Section 39 is substituted for and has the effect as publication in the Official Gazette of a notification under Sub-section (1) of Section 4 of the Land Acquisition Act. Individual notices are required to be sent to every person interested in the land sought to be acquired and covered by the scheme. The Nagpur Improvement Trust is thereafter bound to consider the objections, representations or statements of dissent that may be filed before them and to abandon the scheme or to apply to the State Government for sanction to the scheme with such modifications, if any, as the Trust may consider necessary. The State Government may either sanction the scheme with or without modifications or may refuse to sanction or may return for reconsideration of the scheme. The scheme which has been returned for reconsideration is modified by the Trust and it has to be republished in accordance with Section 39. In case the scheme is sanctioned by the State Government it is required to be published as required by Section 45 of the NIT Act in the manner provided and the Trust is duty bound to execute the scheme forthwith. The publication is conclusive evidence that the scheme has been duly framed and sanctioned. The notification published under Section 45 of the NIT Act has the same effect as the declaration made by the State Government under Section 6 of the Land Acquisition Act. Even considering the scheme of the NIT Act and in particular Section 45 thereof the scheme framed has to be executed forthwith. This conveys an expeditious proceedings. This Court has, therefore, to consider the whole spectrum for initiation of proceedings till the time of challenge raised thereto by the petitioners in which the delay may well be the most important and relevant, if not, the conclusive factor. On close analysis, the delay to be considered can well be divided into four categories:-
(i) the period between the issuance of notification under Section 39 of the NIT Act (equivalent to Section 4 notification under the Land Acquisition Act) and that under Section 45 (equivalent to Section 6 of the Land Acquisition Act).
(ii) the period between the date of notification under Section 45 of the NIT Act (equivalent to Section 6 of Land Acquisition Act) and issuance of notice under Section 9 to the claimants.
(iii) the period between the date of issuance of notice under Section 9 till the rendering of Award by the Collector.
(iv) the period from the date of Award till possession and/or payment of compensation.
18. At the relevant lime, no lime limit was statutorily fixed for issuance of a notification under Section 45 after publication of notice under Section 39 of the NIT Act. It docs not, therefore, imply that the authorities including the State Government had a licence or carte blanche to act any lime at their whim and fancy. The interval between the two notifications is not an irrelevant factor for examining the bonafides of the acquisition. This period has to be tagged to other inordinate delay after issuance of Section 6 notification for examining the matter in a broad perspective. The period to be tagged on would certainly include the period even after passing of the award. If for years together the possession is not taken or compensation determined in the award is not paid is it possible to hold lack of bonafides in exercise of the power vested in the authorities? It will have to depend upon the circumstances prevalent in each case. It is possible that the claimants who arc in possession may continue to reap the benefit if the land is capable of yielding. But such cases would be very rare. In majority of the cases, the land holder cannot use or develop his property under fear of the land being taken away and any investment made would be lost. In other words, it has the effect of freezing the investment. As against this, the landholder can expect only to get the market value as determined. It can hardly be denied that over the last several years there has been a substantial rise in prices of the land and in towns and cities the rise is phenomenal. No advantage of this rise in prices flows to the landholder. As against this, the Government has absolute power to withdraw the acquisition under Section 48(1) of the Land Acquisition Act. In case the authorities arc allowed to issue notification under Section 4 of the Act and then wait for years together for passing an award with no hopes of the possession being taken in near future or even receiving payment therefore which duty is cast on "the Collector under Section 31 of the Act, the entire purpose of acquisition of the property frustrates not only because the investment in the property is frozen but the payment that will be made would hardly represent a reasonable and a fair compensation. Not only the prices would have risen substantially over period of years but inflation which is equally an undeniable fact would also have taken away the value of money ultimately awarded. To contend that the delay could be compensated by payment of interest is of little assistance to the respondents. In the circumstances narrated above, interest allowed at the rate of 4% per annum on the amount of compensation would be a very poor substitute or a solace for the loss suffered by the landholder. Therefore, even inordinate delay in making the payment would be a sharp and pointed piece of evidence to establish the lack of bonafides for exercise of the power.
19. An ingenious argument was also advanced on behalf of the respondents that it is open for the Court to award compensation for the damage suffered by the landholder in case the award is not made within two years after issuance of the declaration under Clause 48-A of the Schedule referred to in Section 61 of the NIT Act. The said clause reads as under:
48-A. (1) If within a period of two years from the date of the publication of the declaration under Section 6 in respect of any land, the Collector has not made an award under Section 11 with respect to such land, the owner of the land shall, unless he has been to a material extent responsible for the delay, be entitled to receive compensation for the damage suffered by him in consequence of the delay.
(2) The provisions of Part III of this Act, shall apply so far as may be, to the determination of the compensation payable under this section.
20. The compensation to be paid under the aforesaid clause is only one of the remedies available to the landholder and that too only in the contingency stipulated therein. It can only take care of delay caused in between the dale of declaration under Section 6 of the Land Acquisition Act and the award made. It docs not consider other delays that may occur between the notifications issued under Section 4 and 6 or the delay caused after passing of the award. In any event, the landholder can choose even the alternate remedy of challenging the acquisition proceedings itself as has been done by the petitioners in the petitions at hand.
21. It may be relevant to reiterate that the delay at every stage has to be tested on the ground of reasonableness. What is a reasonable period of time in a given case would always depend upon the facts of that particular case. It is, therefore, necessary to scrutinize the facts as available on record.
22. Let us now turn to the scheme. The notification under Section 39 of the NIT Act was issued on February 22, 1964 and repeated on April 23, 1964. The scheme comprises about 1031 acres of land and the purpose as described was creating new plots for residence and other purposes and for removal of slum conditions in unauthorised layouts. The said scheme is undoubtedly a large one involving several hundred persons whose interest in the land would be affected. Necessarily, objections would be raised and required to be effectively considered. Only thereafter it is open to the Trust to apply for sanction to the State Government. This procedure was followed and sanction came to be accorded as would be apparent from notification published on September 3, 1967 as required by Section 45 of the NIT Act. Thus the interval between two notifications was 3 years and 6 months.
23. Initially, there was no material placed on record by the respondents explaining the delay between the two notifications. At the fag end of the arguments, the Trust filed an affidavit in which a brave attempt was made to explain the delay. For the period between the two notifications, the Trust only ventured to say that under Section 43 of the NIT Act, several objections are normally received which required to be decided and in some cases even after hearing them personally. Another fact disclosed in the affidavit was the publication of the two notifications. The explanation for the delay is as vague as it could be. It docs not throw any light for ascertaining the reasonableness of the time lost. One does not know how many objections were received by the Trust and what time was consumed in deciding them. Even the date or approximate period during which sanction was applied for is not given. The time taken by the State Government for sanctioning the scheme is missing. In the absence of the required material, the explanation given is of little consequence and it is not possible to hold that the time taken between the two notifications was reasonable.
24. After declaration under Section 45 of the NIT Act, the next stage would be the issuance of notices under Section 9 of the Land Acquisition Act, The notices were issued on September 23, 1970 in Writ Petition No. 476/83, on August 19, 1991 in Writ Petition No. 673/85, on January 12, 1969 in Writ Petition No. 783/85, in August 1971 in Writ Petition No. 1038/85 and 1039/85, on July 18,1986 in Writ Petition No. 1656/86 and on June 24, 1986 in Writ Petition No. 1723/86. It is thus clear that the Authority concerned took nearly 3 to 19 years in serving the notice after issuance of final declaration under Section 45 of the NIT Act. The respondent Trust explained the time consumed by simply quoting the provision of law as contained in Section 8 of the Land Acquisition Act and that is about the joint measurement taken by them with the State Government. Even presuming that such steps were taken, it certainly cannot explain the delay of 19 years in issuance of the notices to the petitioners or their predecessors-in-title in writ-petition Nos. 1656/86 and 1723/86. The unjustified and inordinate delay in continuing the acquisition proceedings can lead only to one conclusion and, that is, lack of bonafides on the part of the acquiring authorities and a relevant factor to establish the colourable exercise of power. We are conscious of the fact that normally such schemes arc in interest of the public at large but wherever necessary, individual interest is also to be protected. It may be relevant to observe here that under the Chief Ministers' formula about 572 societies, whether registered or not, have been saved from various schemes. Out of these 572 societies, about 23 of them mostly unregistered were given back their land upon withdrawal of the acquisition under Section 48(1), of the Land Acquisition Act. The release of the land to the unregistered societies is as good as releasing the land to individuals who had interest in the land. There is no reason why the land acquisition proceedings in respect of others similarly situate like the petitioners in writ petition Nos. 1656/86 and 1723/86 should not be quashed on the ground of colourable exercise of the powers. It may also be mentioned here that large chunk of property at Tajabad was released from acquisition by the Trust on religious grounds. The plight of a large scheme can, therefore, be well imagined.
25. At this juncture, it is necessary to clarify that some portion of the land that was under acquisition in writ petition Nos. 1652/86 and 1723/86 have been voluntarily surrendered by the respective petitioners for completing the construction of the Ring Road by an interim order passed in those petitions by this Court. The quashing of the land acquisition proceedings in these petitions shall not affect the land already surrendered for the construction of the Ring Road.
26. The time consumed between the notification issued under Section 45 of the NIT Act and issuance of notice under Section 9 with respect to other petitions can be held to be reasonable, considering the magnitude of the scheme at that point of time. As per figures given in the, last affidavit of the respondent Trust, 477 Revenue Cases were initiated for acquiring the land and determining the compensation. The awards came to be passed one by one by the land acquisition officer who alone was deputed for the purpose. In these peculiar circumstances, it cannot be said that the time required for passing the awards was not reasonable. But the matter does not rest here. We have still to ascertain the inordinate delay that occurred in the matter of taking possession as well as the causes for non-payment of compensation amount after passing of the award.
27. The awards were passed by the Land Acquisition Officer on December 10, 1975 in writ petition No. 476/83, on September 19, 1972 in writ petition No. 673/85, on March 7, 1973 in writ petition No. 783/85, on June 8, 1972 in writ petition No. 1038/85 and on September 19, 1972 in writ petition No. 1039/85. Except in writ petition No. 476/83 the Trust has admittedly not taken possession of the land acquired. Only when the notices were issued for taking possession, the petitions came to be filed. Even in respect of the property involved in writ petition No. 476/83, the possession is said to be taken on July 23, 1981 which the petitioners dispute. Even presuming that possession was taken by the Trust, it was after six long years. In other petitions, the time gap between the passing of the award and the issuance of the notice of possession was between 10 to 12 years. The situation with regard to payment of compensation is still worst. Section 31 of the Land Acquisition Act enjoins a duty on the Collector to tender and pay the amount of compensation to the persons interested and entitled thereto in accordance with the award unless prevented by contingencies stipulated in Sub-section (2) thereof. There is no material on record except in the case of the petitioners in writ petition No. 476/83 where compensation was attached for lax dues, explaining the delay in making the payment. In some petitions it is revealed that the amount of compensation was deposited by the Trust after lapse of 7 or 8 years from the date of passing of the award. On account of the long and inordinate delay in not taking possession of the land acquired the landholders have to suffer not only because it freezes their investment but recurring expenditure may continue or even increase as time passes by. Even the delay in making the payment of compensation adversely affects the landholder. The delayed payment cannot reflect even the value of the property as determined on the date of issue of the first notification issued under Section 39 of the NIT Act.
28. It would be proper at this stage to consider the plea of the respondent Trust as incorporated in the last affidavit filed at the fag end of the arguments. Some delay could be attributed to the enforcement of the Urban Land (Ceiling and Regulation) Act, 1976 which came into force on February 17, 1974. By that time, the awards in respect of all the properties involved in the petitions were passed and amount of compensation determined. Soon after coming into force of the Urban Land (Ceiling and Regulation) Act, the State Government issued a circular dated August 11, 1978 where under it was notified that surplus vacant land could be acquired under the said Act in which case it would be possible to acquire those lands which are under acquisition at much lesser costs. Therefore, the concerned authorities were instructed not to grant the exemption applications filed by the landholder. This conduct clearly shows that the Government was expecting that it may acquire some of the lands already acquired at a very low compensation under the Urban Land (Ceiling and Regulation) Act. In other words, the State Government was not willing to pay even price of land as on the date of notification and they wanted to acquire these very lands under the Ceiling Act where the prices would be extremely low. Had the Government succeeded in their intentions, they would not have hesitated in releasing the property from acquisition under Section 48 of the Land Acquisition Act. There cannot be any better evidence of pegging down the prices than what we have here. The admission on the part of the respondent Trust that some delay could be attributed on account of enforcement of the Urban Land (Ceiling and Regulation) Act, showed that the authorities wanted to grab the lands at the lowest possible costs. The explanation offered for the delay in taking possession can be of little assistance to them. By giving the finding, we do not want to be understood that it is not possible for the authorities to acquire land at lowest costs. They can do so but the modus operandi should be different. If the Government wanted to wait for the result of the proceedings under ceiling laws, it was welcome to do so, but in that case they should have released the property under Section 48(1) of the Land Acquisition Act. It could not have had both ways. No doubt the respondents abandoned the intention but the time was lost. Apparently, there was inordinate delay in the matter of taking possession and even in making arrangements to pay the compensation determined by the respective awards. This conduct is a clear pointer to establish the lack of bonafides in exercise of the power vested in the authorities.
29. On behalf of the Nagpur Improvement Trust, it was urged that they have taken possession of the lands belonging to the petitiones in Writ Petition No. 476/83 and hence those lands have vested in the Trust. It is hence not possible for divest that land back to the petitioners. The contention has to be discarded in view of the decision in the Industrial Development and Investment Company Private Limited v. State of Maharashtra wherein it is held that when a declaration under Section 6 of the Land Acquisition Act ceases to be valid, neither an award under Section 11 of the Act can be lawfully made nor can possession of the plot mentioned in the declaration under Section 6 be validly taken under Section 16 of the Act. In such a case taking of possession is not authorised by law. The same cannot result in vesting of the land in the State free from encumbrances. Taking illegal possession cannot have the effect of divesting the right in the land.
30. According to some of the petitioners, the scheme as framed would be covered by Section 34 of the NIT Act it being an "housing accommodation scheme" meant for particular class of inhabitants. In fact, the petitioners in Writ Petition No. 476/83 assailed the scheme considering it to be a housing scheme. The respondents came forward and denied that the scheme was under Section 34 and further asserted that the scheme was properly framed under Section 31 of the NIT Act. A contention was hence raised that the scheme as framed was ultra vires of the powers under Section 31 of the NIT Act itself. In order to appreciate the submissions, the relevant portion of the notification issued under Section 31 is extracted below:
Whereas in accordance with the provisions of Section 31 of the Nagpur Improvement Trust Act, 1936, the Nagpur Improvement Trust has by its resolution No. IX(B), dated 30th September, 1963, framed an Improvement Scheme to be called as "Sakkardara Street Scheme," the boundaries whereof, are stated in the schedule hereunder and the area comprised wherein, is about 1.031 acres within the said boundaries, for the purpose of creating new plots for residence and other purposes and for removal of Slum Conditions in unauthorised layouts.
31. We may clarify that this situation would not have arisen had the respondent Trust accepted that it was a housing accommodation scheme. It is because of their denial that the situation changes. It is always understood that the scheme has to be read as a whole and one cannot merely go by the nomenclature of the scheme. It was also open to the Trust to have adopted a stand that it was a comprehensive scheme covered by Section 34 besides Section 31 of the NIT Act, but that was not done. In the affidavit filed by the Trust at the fag end of the arguments, it was stated that the scheme was a combined one as provided by Section 27 of the NIT Act with other relevant provisions under Chapter IV of the NIT Act. However, no particular provision of the scheme was pinpointed even when specifically asked. It was undoubtedly so since the scheme cannot be covered except under Section 34 which fact was already denied. In the circumstances, we are compelled to decide the question.
32. In order to decide the question involved, relevant provisions of Chapter IV need consideration. Section 26 deals with matters which could be provided in an improvement scheme. Sub-clause (i) provides for construction and alteration of streets and back lanes and Sub-clause (j) provides for the draining, water supply and lighting of streets so constructed or altered; whereas Sub-clause (m) makes the provision for accommodation for any class of inhabitants. Section 27 deals with the types of Improvement Scheme and further permits the Trust to frame a solitary scheme or combine other schemes with it. Relevant for our purpose is the street scheme and a housing accommodation scheme. Section 31 of the NIT Act deals with the street scheme and Section 34 thereof deals with housing accommodation scheme. It is necessary to reproduce these two sections being necessary to find out the difference between the two in order to ultimately decide the nature of the scheme in question. Section 31 provides:
Section 31 (1) Whenever the Trust is of opinion that, for the purpose of
(a) providing building sites, or
(b) remedying defective ventilations, or
(c) creating new or improving existing means of communications and facilities for traffic, or
(d) affording better facilities for conservancy and drainage it is expedient to lay out new streets or alter existing streets (including bridges, causeways and culverts), the Trust may pass a resolution to that effect, and shall then proceed to frame a street, scheme for such area it may think fit.
(2) A street scheme may, within the limits of the area comprised in the scheme, provide for-
(a) the acquisition of any land which will, in the opinion of the Trust, be necessary for its execution;
(b) the re-laying out of all or any of the lands so acquired, including the construction and re-construction of buildings by the Trust or by, any other person and the laying-out, construction and alteration of streets and thoroughfares;
(c) the draining water-supply, and lighting of streets and thoroughfares so laid out, constructed or altered;
(d) the raising, lowering or reclamation of any, land vested in, or to be acquired by, the Trust for the purposes of the scheme;
(e) the formation of open spaces for the better ventilation of the area comprised in the scheme;
(f) the acquisition of any land adjoining any street, thoroughfare, or open space to be formed under the scheme.
33. Section 34 provides:
Whenever the Trust is of opinion that it is expedient and for the public advantage to provide housing accommodation for any class of the inhabitants of any area to which this Act extends. It may frame a scheme (to be "housing accommodation scheme") for such purpose.
34. The improvement scheme is not defined under the NIT Act though Section 27 provides for various types of scheme. Sections 28 to 35-A provide the details of the various types of schemes. When the Trust is of the opinion that it is expedient to lay out new streets or alter existing ones, including bridges, cause-way and culverts, the Trust may pass a resolution to that effect under Sub-section (1) of Section 31. The said opinion must be formed in order to provide building sites, remedying defective ventilations, creating new or improving existing means of communication and facilities for traffic or affording better facilities for conservancy and drainage. The predominant purpose of a street scheme is to lay out new streets or to alter the existing ones and it is in that process the scheme may provide for building sites and other facilities. Therefore, providing building sites is a consequence of the main purpose of constructing new streets or altering the existing ones. Once the resolution is passed the Trust may proceed to frame the street scheme under Sub-section (2) of Section 31 of the NIT Act. The scheme while being framed may provide for the acquisition of land which is necessary for its execution; re-laying of all or any of lands so acquired including construction of buildings or its reconstruction, construction or alteration of streets; the draining of water supply, lighting of streets, raising, reclaiming or lowering any sight, formation of open spaces for better ventilation; and acquisition of any land adjoining any street, thoroughfare or open space to be formed under the scheme. It is but natural that when the new streets are laid out or the existing ones are altered, it must provide for re-laying of land and consequently the building sites and open spaces. Therefore, making provision for building sites is an ancillary to the predominant purpose, that is, laying down the new streets or altering the existing one. In no case, acquiring lands for building sites only can fall within the ambit of Section 31 of the NIT Act.
35. Now let us turn to the scheme and find out what it provides for. According to the notification published and as extracted above, the purpose of the scheme was creating new plots for residence and other purposes and for removal of slum conditions in unauthorised lay-outs. Nowhere it provides for laying the new streets or altering the existing ones. May be that while laying down new plots for residence, roads, lanes and thoroughfares may have to be constructed but that is ancillary to the scheme of laying down the plots for residence. Admittedly, the plots for residences arc to be formed for particular class of inhabitants like low income group, middle income group and so on. Such a scheme would clearly be covered under Section 34 of the NIT Act which is already reproduced above.
36. Thus, there remains no doubt that the scheme as framed is under Section 34 and not under Section 31 of the NIT Act. The contention of the petitioners that the notification is ultra vires of Section 31 itself will have to be accepted.
37. On behalf of the Nagpur Improvement Trust, reliance was heavily placed upon the two decisions of this Court, namely in Ramchandra Maroti v. The Collector (Land Acquisition Officer for the Nagpur Improvement Trust), Nagpur and an unreported decision in the case of Krishnarao Yerkunthwar v. Nagpur Improvement Trust (1974) Spl. C.A. No. 885 of 1968. We shall deal with both the cases one by one.
38. In the case of Ramchandra, this Court discussed the scope and ambit of Section 31 thus [at para. 33 page 296 of (1975) A.I.R. Bom. 296]:
33. In our opinion, the provisions of Section 31 of the Act will have to be read together with other provisions of Chapter IV of the Act. The said Chapter will have to be harmoniously construed and if all the provisions of the said Chapter and the Act arc read together, in our opinion, even to a scheme framed under Section 31 of the Act the provisions of Section 26 will apply. Section 26 of die Act is a general provision and makes a provision for the acquisition of the property which is necessary for or affected by the execution of the scheme itself. The land of the petitioner which is being acquired for the execution of the scheme is necessary for the execution of the scheme itself or in any case is affected by the execution of the scheme. Therefore, in our opinion, the acquisition of the land belonging to the petitioner was in accordance with the provisions of the Act and was fully authorised. Section 27 of the act lays down the types of improvement schemes and further permits the trust to frame a scheme which might be a combination of any two or more of such types of schemes. Section 31 specifically provides for framing of a scheme which might include a provision for building sites. The term "building" has been defined by the Act meaning thereby a house, hut, shed or other structures for whatever purpose and of whatever material constructed and every part thereof, whether used as a human habitation or not, and includes well, latrine, drainage work, fixed platform, varandah, plinth, doorstep, compound wall, fencing and the like, and any work connected therewith. The construction of a shed or structure for the purposes of a factory or industry will definitely amount to construction of a building within the meaning of the Act and in our opinion, is covered by the definition of the said term as defined by Section 2(a-1) of the Act. Therefore, in our view, it is open for the Trust to frame a scheme for providing building sites for the purposes of industries also. Framing of a scheme to provide for an accommodation for the purposes of industries and factories is a part and parcel of the improvement scheme contemplated by Chapter IV of the Nagpur Improvement Trust Act for the improvement and expansion of the town. Such a scheme will meet the general needs of the population in this behalf and will also provide for other public amenities and the sites therefor....
39. After going through the judgment, we did not find the notification issued under Section 31 of the Act in the aforesaid case. It was, however, emphasized that the contents of the notification are discussed in the judgment and it does appear so by reading paragraph 9 thereof. Even assuming that the notification under Section 31 was similar to one before us, the learned Judges of the Division Bench in Ramchandra's case have not interpreted Section 31 as a whole. Their emphasis appears to be only on Clause (a) of Section 31(1) which deals with "providing building sites" and nothing more. It also does not consider Section 34 of the Act. In these circumstances, we are not in agreement with the interpretation of Section 31 as enumerated in the above paragraph. Normally when we are differing with the decision of a co-ordinate Bench of this Court, the matter should have been referred to a larger Bench. However, as the matter was decided by the learned Judges of the Division Bench in Ramchandra's case in the manner stated above, it can safely be said that the decision was delivered per incuriam and, therefore, not binding upon us. In this context, the decision of this Court in Sitaram Ilari Salunke v. Laxman would be relevant.
40. The other decision in Krishnarao case (cited supra) can be distinguished on facts. The notification in that case was totally different. The relevant portion of that notification reads as under:
Notice is hereby given that the Nagpur Improvement Trust has, by its resolution No.7 dated the 6th September, 1937, in pursuance of the powers vested in it for that purpose by Section 31 of the Nagpur Improvement Trust Act, 1936 (C.P. Act No. XXXVI of 1936), framed a street scheme to be known as the Central Road Scheme, for the purpose of creating a new means of communication, offering adequate facilities for through and local traffic with proper conservancy arrangements, both along the road itself and in it neighbourhood, and for providing suitable sites for modern shops of good class and residential buildings, the limits of which are shown in the map mentioned in para. 2.
41. It is in these circumstances the Court held that it was a comprehensive scheme which squarely falls within Clauses (a) and (c) of Sub-section (1) of Section 31 of the NIT Act.
42. An important question of estoppel is raised against the petitioners in writ petition No. 476/83 on behalf of the Nagpur Improvement Trust alleging that these petitioners are precluded from challenging the validity of the notification or the acquisition proceedings because of the various developments which have been made in the area of their land measuring 42.88 Acres in course of 18 years and total inaction on their part even after the possession was lost. It is urged that the Trust has prepared a lay out plan of the whole of their land and had also developed the same at substantial costs. For this purpose, it is alleged that the ground had to be levelled, sewer lines have been laid and first stage of constructing the road work is over. All this has costed about Rs. 12/- lakhs. It is further alleged that out of the acquired land, about six acres are already allotted and possession delivered to Provident Fund Officer. Not only that, in about 20 acres of land the flats are being constructed, the scheme for which is submitted to HTJDCO for sanction of the loan, and in anticipation of the same applications have been invited as per advertisement (Annexure VI to the petition) from persons belonging to various classes for allotment of those flats on hire-purchase basis. About 5461 applications arc received by the Trust and a sum of Rs. 9,09,900/- has been received as earnest money. In these circumstances, it is urged that it is too late for the petitioners in writ petition No. 476/83 to seek reliefs which they have claimed.
43. We do not doubt even a bit that Nagpur Improvement Trust had taken possession of land 42.88 acres on July 23, 1981. This is clear from the documents on record. One such document is dated May 29, 1981 in which objections are raised for taking possession. The petitioners admit therein that they were served with notice for delivery of possession on May 29, 1981. Then there is another letter dated July 24, 1981 written by the Managing Trustee of Shamji Kheta Estate admitting that the possession was taken a day before and they should be allowed to remove their moveables from the premises in presence of an officer of the Trust. This letter virtually admits the contention of the Trust that possession was taken on July 23, 1981. Since then it is the Trust who is in actual possession.
44. Another fact which needs consideration at this juncture is the writ petition filed by the Executors of Shamji Kheta Trust in October, 1976. It was registered as special civil application No. 4436/76. It was prayed therein that a direction be issued commanding the Nagpur Improvement Trust to pay the compensation amount forthwith after taking possession of the land. This was a clear understanding given to the Trust that the petitioners which include the beneficiaries as well that they do not intend to challenge the land acquisition proceedings in any manner whatsoever. Ultimately the petition came to be withdrawn with liberty to file afresh on December 20, 1976. The reason for withdrawal was attachment of compensation by the tax authorities. Since then the land holders did not take any active steps till possession was taken on July 23, 1981. The present writ petition was filed on January 10, 1983 when only advertisement was published by the Trust inviting applications for purchase of plots by intending buyers of specified class or classes.
45. Though it is alleged by the Trust that developments were made in course of 18 years, we cannot accept that it can be so. By conduct, the petitioners in writ petition No. 476/83 allowed the Trust to believe that they were no longer interested in the lands which were acquired when special civil application No. 4436/76 was filed and disposed of expeditiously and may have prompted the Trust to take further steps of developing the lands acquired and factually developed the same after the possession was taken. We cannot ignore the fact that even after losing possession, the petitioners remained inactive till filing of the petition which covered the period of one year and six months. There is no reason to disbelieve the affidavit of the Trust that they have spent huge amounts for developing the land being certain that there will be no challenge to acquisition proceedings any more. In this background, the contention of the respondent Trust that the petitioners in writ petition No. 476/83 are estopped from challenging the acquisition proceedings will have to be accepted.
46. It was then argued on behalf of the petitioners that the Trust acquired landed properties of the citizens much in excess of the requirement for execution of the scheme and those affected by the scheme, with a view to make more money and enrich themselves. In other words, the doctrine of unjust enrichment is sought to be extended even against the Trust. Another question raised in these petitions was change effected in the new development plan during pendency of the acquisition proceedings which according to the petitioners renders the acquisition proceedings illegal and void. Either of the points was argued at length before us. We, however, refrain from going into these questions for the simple reason that the ultimate fate of the various petitions already stands decided in view of our findings already rendered hereinbefore. To deal with these points would only be an exercise in futility and would serve no purpose whatsoever.
47. From the above discussions, it is clear that except Writ Petition No. 476/83, all other petitions are liable to succeed and must be allowed. The result would be as under:
(i) writ petition No. 476/83 is rejected. Accordingly, rule issued in that petition stands discharged.
(ii) writ petition Nos. 1723/86 and 1656/86 are allowed. The impugned notification as well as the land acquisition proceedings pending before the Land Acquisition Officer are hereby quashed except to the extent of land surrendered voluntarily for the purpose of construction of Ring Road in accordance with the interim orders passed by this Court.
(iii) writ petition Nos. 673/85,783/85,1038/85 and 1039/85 are allowed. The impugned notification as well as Land acquisition proceedings including the awards are hereby quashed.
(iv) The parties in alt the writ petitions are directed to bear their respective costs.