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Amarnath Ashram Trust Society and Anr. Versus Governor of U.P. and Ors.

1997 (12) TMI 656 - SUPREME COURT OF INDIA

Civil Appeal No. 8496 of 1997 with Writ Petition (C) No. 716 of 1996 - Dated:- 3-12-1997 - G.T. Nanavati and G.B. Pattanaik For the Appellant/Petitioner/Plaintiff: R.F. Nariman, Senior Adv., S.P. Mithal, C.K. Nayak and R.N. Keswani, Advs For the Respondents/Defendant: A.B. Rohtagi, Senior Adv., R.B. Misra and E.C. Agarwala, Advs. JUDGMENT G.T. Nanavati, J. 1. Leave granted. 2. Heard learned counsel for both the sides. 3. The appellant is a society registered under the Society Registration Act, 1 .....

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fering a price higher than its market value but did not succeed. It, therefore, moved the State Government to acquire that land for it. The Government agreed and issued Notification Under Section 4 of the Land Acquisition Act on 1.8.1986 notifying its intention to acquire that land for a public purpose namely "playground of students of Amar Nath Vidya Ashram (Public School), Mathura". Thereafter, inquiries Under Section 5-A and under Rule 4 of the Land Acquisition (Company) Rules, 1963 .....

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y published that the Governor was satisfied that the land mentioned in the schedule is needed for construction of a playground for students of Amar Nath Vidya Ashram (Public School), Mathura by the Amar Nath Ashram Trust, Mathura. This acquisition of land was challenged by the owner by a writ petition filed in the Allahabad High Court. An interim order was passed directing the parties to maintain status quo as regards possession. During the pendency of the said petition, on 1.5.1992, the Governm .....

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reason that the acquisition having been proclaimed as one for a public purpose a part of cost of acquisition was required to be borne by the State and as no such provision was made, it was not likely to be sustained if challenged, cannot be said to be contrary or illegal. 5. Mr. R.F. Nariman, senior advocate, appearing for the appellants, submitted that when acquisition is under part VII, i.e., when land is acquired for a company and when all the formalities have been completed including executi .....

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the acquisition under a misconception of law that as the acquisition, at the stage of Section 4 notification was proclaimed to be for a public purpose, at least a part of the cost of acquisition was required to be borne by the State or was required to be paid out of the public funds or public revenue; and, therefore, the decision taken by it was vitiated and ought to have been quashed by the High Court. On the other hand, the learned counsel appearing for the State of Uttar Pradesh submitted tha .....

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ht to be acquired is taken and not thereafter. He also submitted that if as a result of withdrawal from acquisition any damage is suffered by any party then he can be paid damages for the loss caused to him, and that there is one more reason why the decision of Government to withdraw from acquisition cannot be interfered with by the court of law. 6. It is now well established that if the cost of acquisition is borne either wholly or partly by the Government, the acquisition can be said to be for .....

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e made except under part VII of the Act. In that case a part of the cost was to be borne by the government and, therefore, it was held that it was not necessary to comply with the provisions of part VII of the Act. Admittedly, in the present case the entire cost of acquisition is to be borne by the appellant society and, therefore, it is an acquisition for a company and not for a public purpose. That is also borne out by the notification issued Under Section 6 of the Act which states "that .....

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blic purpose and not under Chapter VII for the appellant-society in view of subsequent events and the declaration made Under Section 6. The learned counsel for the State also relied upon the decision of this Court in Srinivasa Cooperative House Building Society Ltd. v. Madam Gurumurthy Sastry, [1994]3SCR848 , wherein this Court has held that though there is "no provision in the Act to say that when a land is required for a company, it may also be for a public purpose. However, even the acqu .....

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urable exercise of powers, the decision of the Government to withdraw from the acquisition cannot be said to be arbitrary or illegal. The aforesaid observation was made by this Court in the context of requirement of Section 40 of the Act and they cannot be construed to mean that no land cannot be acquired by the State Government without making substantial contribution towards the cost of acquisition. We cannot read something more in the said observation than what they were intended to convey. Th .....

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ompanies) Rules, 1963 and the agreement entered into between the appellant-society and the State. Moreover, it was not pleaded by the State before the High Court that the acquisition in this case was for a public purpose and not under Chapter VII of the Act. Therefore, it is really not open to the counsel for the State to raise a contention which is contrary to the case, pleaded before the High Court. In the reply affidavit filed before the High Court, it was stated on behalf of the State that t .....

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isition Officer, Bombay v. Godrej and Boyce, [1988]1SCR590 . In that case this Court examined the nature and extent of the power of the Government to withdraw from acquisition after issuance of notification Under Section 4 of the Act. In that case the State Government had passed an order Under Section 48 of the Act withdrawing the lands of Godrej and Boyce from acquisition. The owner thereupon challenged the withdrawal order as mala fide and prayed for quashing of the same. The writ petition was .....

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ssion is taken by the Government and till that point of time, the land continues to be with the original owner and he is also free to deal with the land just as he likes. So long as the possession is not taken over, the mere fact of a notification issued Under Section 4 or a declaration Under Section 6, does not divest the owner of his rights in the land to take care of it and confer on the State Government any right whatsoever to interfere with the ownership of the land or safeguard the interes .....

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to exercise its power to withdraw unilaterally. It further observed that having regard to the scheme of the Act it is difficult to see why the State Government should at all be compelled to give any cogent reasons for its decision not to go ahead with the acquisition of any land. It is well settled in the field of specific performance of contracts that no person will be compelled to acquire any land, as a breach of contract can always be compensated for by damages. That is also the principle of .....

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observations. That was not a case where proceedings were initiated to acquire land for a company under part VII of the Act. Therefore, it is not an authority laying down the proposition that in all cases where power is exercised Under Section 48 of the Act it is open to the State Government to act unilaterally and that it can withdraw from acquisition without giving any reason or for any reason whatsoever. 9. In an acquisition under part VII of the Act, position of the company or the body for w .....

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cation given by the Government is otherwise not sustainable. As stated earlier the reason given by the Government for withdrawing from the acquisition is that as no part of the cost of acquisition was to be borne by the Government the acquisition could not have been sustained as for a public purpose. We have already pointed out that in this case the acquisition was not for a public purpose but it was an acquisition for a company under Chapter VII of the Act. In respect of an acquisition for a co .....

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