Hindustan Petroleum Corpn. Ltd. Vs. Darius Shapur
Chenai & Ors  Insc 498 (20 September 2005)
Sinha & C.K. Thakker
W I T
H CIVIL APPEAL NO. 2253 OF 2005 S.B. SINHA, J:
Petroleum Corporation Limited was a tenant in the premises in question wherefor
an agreement of tenancy was entered into by and between the father of the First
Respondent and Caltex (India) Limited for a period of ten years from
15.12.1965. On or about 24.12.1974, another deed of lease was executed by the
mother of the Respondent No. 1 in favour of Caltex (India) Limited for a period of five years
expiring on 31.7.1979.
about 30.12.1976, the Caltex (Acquisition of Shares of Caltex Oil Refining
(India) Limited and of the Undertakings in India of Caltex (India) Limited)
Ordinance, 1976 (which was replealed and replaced by the Caltex (Acquisition of
Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India
of Caltex (India) Limited) Act, 1977) was promulgated whereby and whereunder
right, title and interest of Caltex (India) Ltd. in relation to its
undertakings in India stood transferred to and vested in the Central
Government. The Central Government, however, in exercise of its power conferred
upon it under Section 9 of the said Act directed that the said undertakings
shall, instead of continuing to vest in the Central Government, vest in Caltex
Oil Refining (India) Ltd., a Govt. company with effect
from 30.12.1976. Caltex Oil Refining (India) Ltd. was later on amalgamated with the Appellant herein in terms of
Sub-section 3 of Section 7 of the said Act. The Appellant herein, thus, was at
the liberty to renew the period of lease for a period of further five years
with effect from 1.8.1979 on the same terms and conditions as contained in the
deed of lease dated 24.12.1974. The Appellant herein exercised its option of
renewing the lease with effect from 24.4.1979. On the expiry of the said
period, an eviction proceeding was initiated by the First Respondent against
the Appellant by filing a suit which was marked as O.S. No. 737 of 1985. The
said suit for eviction was decreed. An appeal preferred thereagainst was
dismissed. The Regional Manager of the Appellant herein thereafter sent a
requisition to the Special Deputy Collector for acquisition of the land for the
purpose of continuing the business wherefor a notification was published on
15.10.1985. However, the said notification lapsed. On or about 3.6.1989, a
fresh notification was issued under Section 4(1) of the Land Acquisition Act
(for short "the Act"). The First Respondent filed a detailed
objection on 20th July,
1989 contending that
there existed no public purpose for acquisition of the said land and in any
event, other suitable lands are available therefor.
giving an opportunity of hearing to the Respondents, the Collector is said to
have conducted an enquiry and submitted his Report to the Government on or
about 28.8.1989. A declaration thereafter was issued under Section 6 of the Act
on 25.9.1989. Questioning the said notification, the First Respondent herein
filed a writ petition in the High Court which was marked as W.P. No. 16012 of
1989. Although, the Deputy Collector and the Appellant filed their counter
affidavits in the said proceedings, no counter affidavit was filed by the State
of Andhra Pradesh.
learned Single Judge of the High Court allowed the said writ petition. An
appeal thereagainst was filed before this Court marked as Civil Appeal No. 910
of 1998 and by an order dated 19.8.1998 the judgment of the High Court was set
aside and the matter was remitted to the High Court on the ground that several
other contentious issues have been raised. The parties were, however, granted
liberty to file additional pleadings. Pursuant to or in furtherance of such
liberty, the First Respondent herein raised additional grounds by filing a
Miscellaneous Application which was marked as WPMP No. 27633 of 2003 contending
inter alia therein that there had been a total non-application of mind on the
part of the State Government both before issuing the notification under Section
4(1) and the declaration under Section 6 of the Act. A counter-affidavit was
filed by Respondent Nos. 2 and 3 affirmed by one Shri B. Venkataiah, Special
Deputy Collector, Land Acquisition (General) both for himself as also the State
in the said Miscellaneous Application.
not in dispute that the High Court upon satisfying itself directed the State to
produce the records relating to the case. An affidavit affirmed by one Shri
K.V. Rao was filed on 7th
November, 2003 stating
that the records were not readily traceable in view of shifting of Industries
and Commerce Department within the premises of the Secretariat Buildings twice
in four years. An apology was also tendered for non-production of records. By
reason of the impugned judgment, the writ petition has been allowed. The
Appellant being aggrieved thereby are before us. We may, however, notice that
the Appellant herein had prayed for twelve weeks of time to vacate the premises
which was granted by an order dated 19th December, 2003.
Ramamoorthy, learned senior counsel appearing on behalf of the Appellant and
Mr. Anoop G. Chaudhari, learned senior counsel appearing on behalf of the State
inter alia raised the following contentions:
Having regard to the scheme of the Act if a public purpose is established, the
declaration made would be conclusive in terms of Section 6(3) of the Act in
respect of both the need and the public purpose.
In view of the provision contained in Section 3(f)(iv) of the Act, the Respondents
could not contend that the purpose for which the notification under Section
4(1) of the Act was issued, was not public purpose.
Once the owner of the land has been given an opportunity to file his objections
which were considered by the Collector; and if the recommendation made by him
is accepted by the Government, the owner is not entitled to be afforded any
further opportunity of hearing.
It is not open to the owner of the land to challenge the proceedings on the
ground that the Government has not assgined reasons for rejecting the
the facts and circumstances of this case when the acquisition proceedings have
been done in accordance with law, the submission on behalf of the Respondents
that the same has been exercised for a colourable exercise of power is not
tenable in law.
Even if the acquisition has the effect of nullifying a decree passed by a civil
court, the same would not be a ground for quashing the acquisition proceedings.
Rajeev Dhavan, learned senior counsel appearing on behalf of the First
Respondent would, on the other hand, submit:
Although the Act is an imperial legislation, it has essentially three broad
The acquisition for a public purpose.
Payment of compensation
taking appropriate due process both while determining suitability for the
public purpose and other acquisitory and compensatory aspects.
The purpose although may a public purpose within the meaning of Section 3(2)(f)
of the Act and a declaration is made under Section 6 thereof, it would not be
correct to contend that the acquisition would be beyond the pale of judicial
Since by reason of the provisions of the Act, the owner is deprived of his
right to property, the provisions thereof must be strictly construed.
Section 5-A of the Act being the heart of the Act gives the citizen to avail of
the only opportunity to make submissions both on the public purpose and the
suitability of the acquisition in respect of his land, and, thus, being a
valuable right which is akin to a fundamental right, the procedures laid down
therein must be strictly complied with.
Section 5-A consists of two parts, viz., hearing of objections by the Collector
and decision of the Government on the objections on the basis of the
Collector's Report and both the parts must be strictly complied with.
Ideally, reasons are required to be assigned while passing an order under
Section 5-A of the Act but even if the same is not required to be assigned,
reasons for order must exist on the record.
There exists a difference between a subjective satisfaction clause, where the
Government has to be satisfied, and a dispositive clause, where the Government
has to decide on the basis of submissions made to it. In the latter case, there
is an even stricter scrutiny to consider whether a determination has been
properly made after due consideration.
Where the Court feels that the appropriate scrutiny requires that records be
examined in land acquisition cases, such records must be made available.
main question which fell for its consideration before the High Court was
whether the objections raised by the Appellant objecting to the acquisition of
land on various grounds have been considered by the Government.
not in dispute that Section 5-A of the Act confers a valuable right in favour
of a person whose lands are sought to be acquired. Having regard to the
provisions contained in Article 300A of the Constitution of India, the State in
exercise of its power of 'eminent domain' may interfere with the right of
property of a person by acquiring the same but the same must be for a public
purpose and reasonable compensation therefor must be paid.
the definition of public purpose is of wide amplitude and takes within its
sweep the acquisition of land for a corporation owned or controlled by the
State, as envisaged under Sub-clause (iv) of Clause (f) of Section 3 of the
Act. But the same would not mean that the State is the sole judge therefore and
no judicial review shall lie. [See Jilubhai Nanbhai Khachar and Others vs.
State of Gujarat and Another (1995) Supp (1) SCC
conclusiveness contained in Section 6 of the Act indisputably is attached to a
need as also the purpose and in this regard ordinarily, the jurisdiction of the
court is limited but it is equally true that when an opportunity of being heard
has expressly been conferred by a statute, the same must scrupulously be
complied with. For the said purpose, Sections 4, 5-A and 6 of the Act must be
read conjointly. The court in a case, where there has been total non-compliance
or substantial non-compliance of the provisions of Section 5-A of the Act,
cannot fold its hands and refuse to grant a relief to the writ petitioner.
Sub-section (3) of Section 6 of the Act renders a declaration to be a
conclusive evidence. But when the decision making process itself is in
question, the power of judicial review can be exercised by the court in the
event the order impugned suffers from well- known principles, viz., illegality,
irrationality and procedural impropriety.
when a statutory authority exercises such enormous power it must be done in a
fair and reasonable manner.
trite that hearing given to a person must be an effective one and not a mere
formality. Formation of opinion as regard the public purpose as also
suitability thereof must be preceded by application of mind as regard
consideration of relevant factors and rejection of irrelevant ones. The State
in its decision making process must not commit any misdirection in law. It is
also not in dispute that Section 5-A of the Act confers a valuable important
right and having regard to the provisions contained in Article 300A of the
Constitution of India has been held to be akin to a fundamental right.
471], it was held :
him before depriving him is both reasonable and pre-emptive of arbitrariness,
and denial of this administrative fairness is constitutional anathema except
for good reasons" [(1998) 6 SCC 1] held, thus:
Our attention was also invited by Shri Shanti Bhushan, learned Senior Counsel
for the appellants to a decision of a two-Judge Bench of this Court in the case
of State of Punjab v. Gurdial Singh wherein Krishna Iyer, J. dealing with the
question of exercise of emergency powers under Section 17 of the Act observed
in para 16 of the Report that save in real urgency where public interest did
not brook even the minimum time needed to give a hearing, land acquisition
authorities should not, having regard to Articles 14 and 19, burke an inquiry
under Section 17 of the Act. Thus, according to the aforesaid decision of this
Court, inquiry under Section 5-A is not merely statutory but also has a flavour
of fundamental rights under Articles 14 and 19 of the Constitution though right
to property has now no longer remained a fundamental right, at least
observation regarding Article 14, vis-`-vis, Section 5-A of the Land
Acquisition Act would remain apposite." The said decision has been cited
with approval in Union of India and [(2004) 8 SCC 14] observed:
At this stage, it is relevant to notice that the limited right given to an
owner/person interested under Section 5-A of the Act to object to the
acquisition proceedings is not an empty formality and is a substantive right,
which can be taken away for good and valid reason and within the limitations
prescribed under Section 17(4) of the Act.
object and importance of Section 5-A inquiry was noticed by this Court in the
case of Munshi Singh v.
of India wherein this Court held thus: (SCC p. 342, para 7) "7. Section
5-A embodies a very just and wholesome principle that a person whose property
is being or is intended to be acquired should have a proper and reasonable
opportunity of persuading the authorities concerned that acquisition of the
property belonging to that person should not be made. ... The legislature has,
therefore, made complete provisions for the persons interested to file
objections against the proposed acquisition and for the disposal of their
objections. It is only in cases of urgency that special powers have been
conferred on the appropriate Government to dispense with the provisions of
Section 5-A:"" Such an opportunity of being heard is necessary to be
granted with a view to show that the purpose for which the acquisition
proceeding is sought to be made is not a public purpose as also the suitability
of land therefor. and Others, (1988) 4 SCC 534 and Shri Farid Ahmed Abdul Samad
and Another, (1976) 3 SCC 719].
New Delhi and others [(1978) 1 SCC 405], this Court observed:
Indeed, natural justice is a pervasive facet of secular law where a spiritual
touch enlivens legislation, administration and adjudication, to make fairness a
creed of life. It has many colours and shades, many forms and shapes and, save
where valid law excludes it, applies when people are affected by acts of
authority. It is the hone of healthy government, recognised from earliest times
and not a mystic testament of judge-made law.
from the legendary days of Adam and of Kautilya's Arthasastra the rule of law
has had this stamp of natural justice which makes it social justice. We need
not go into these deeps for the present except to indicate that the roots of
natural justice and its foliage are noble and not new-fangled. Today its
application must be sustained by current legislation, case-law or other extant
principle, not the hoary chords of legend and history. Our jurisprudence has
sanctioned its prevalence even like the Anglo-American system." Even a
judicial review on facts in certain situations may be available.
this Court observed:
is now well settled that a quasi-judicial authority must pose unto itself a
correct question so as to arrive at a correct finding of fact. A wrong question
posed leads to a wrong answer. In this case, furthermore, the misdirection in
law committed by the Industrial Tribunal was apparent insofar as it did not
apply the principle of res ipsa loquitur which was relevant for the purpose of
this case and, thus, failed to take into consideration a relevant factor and
furthermore took into consideration an irrelevant fact not germane for
determining the issue, namely, that the passengers of the bus were mandatorily
required to be examined. The Industrial Tribunal further failed to apply the
correct standard of proof in relation to a domestic enquiry, which is
"preponderance of probability" and applied the standard of proof
required for a criminal trial. A case for judicial review was, thus, clearly
Errors of fact can also be a subject-matter of judicial review. (See E. v.
Secy. of State for the Home Deptt.) Reference in this connection may also be
made to an interesting article by Paul P. Craig, Q.C. titled "Judicial Review,
Appeal and Factual Error" published in 2004 Public Law, p. 788."
Section 5-A of the Act is in two parts. Upon receipt of objections, the
Collector is required to make such further enquiry as he may think necessary
whereupon he must submit a report to the appropriate Government in respect of
the land which is the subject matter of notification under Section 4(1) of the
Act. The said Report would also contain recommendations on the objections filed
by the owner of the land. He is required to forward the records of the
proceedings held by him together with the report. On receipt of such a Report
together with the records of the case, the Government is to render a decision
thereupon. It is now well-settled in view of a catena of decisions that the
declaration made under Section 6 of the Act need not and Others, (2000) 7 SCC
considerations of the objections by the owner of the land and the acceptance of
the recommendations by the Government, it is trite, must precede a proper
application of mind on the part of the Government.
when a person aggrieved questions the decision making process, the court in
order to satisfy itself as to whether one or more grounds for judicial review
exists, may call for the records whereupon such records must be produced. The
writ petition was filed in the year 1989. As noticed hereinbefore, the said
writ petition was allowed. This Court, however, interfered with the said order
of the High Court and remitted the matter back to it upon giving an opportunity
to the parties to raise additional pleadings.
of Mr. Chaudhari to the effect that for long the additional ground relating to
non-application of mind on the part of the State had not been raised and, thus,
it might not be necessary for the State to file a counter-affidavit does not
appeal to us. When a rule nisi was issued the State was required to produce the
records and file a counter-affidavit. If it did not file any counter-affidavit,
it may, subject to just exceptions, be held to have admitted the allegations
made in the writ petition.
view of the fact that the action required to be taken by the State Government
is distinct and different from the action required to be taken by the
Collector; when the ultimate order is in question it was for the State to
satisfy the court about the validity thereof and for the said purpose the
counter-affidavit filed on behalf of a Collector cannot be held to be
sufficient compliance of the requirements of law. The job of the Collector in
terms of Section 5-A would be over once he submits his report. The Land
Acquisition Collector would not know the contents of the proceedings before the
State and, therefore, he would be incompetent to affirm an affidavit on its
the State is required to apply its mind not only on the objections filed by the
owner of the land but also on the Report which is submitted by the Collector
upon making other and further enquiries therefor as also the recommendations
made by him in that behalf. The State Government may further inquire into the
matter, if any case is made out therefore, for arriving at its own satisfaction
that it is necessary to deprive a citizen of his right to property. It is in
that situation production of records by the State is necessary.
Singh Uban (supra), whereupon Mr. Ramamoorthy placed strong reliance, this
No reasons or other facts need be mentioned in the Section 6 declaration on its
face. If the satisfaction is challenged in the court, the Government can show
the record upon which the Government acted and justify the satisfaction
expressed in the Section 6 declaration." It was, thus, for the State to
justify its action by production of record or otherwise.
counter-affidavit filed on 30th October, 2003 was also affirmed by a Special Deputy Collector. A presumption having
regard to the passage of time can be raised that he was not the Collector who
had made enquiry under Section 5-A of the Act and given an opportunity of
hearing to the owner of the land. It has not been averred by him as to who had
authorized him to affirm the affidavit on behalf of the State or how he was
acquainted with the fact of the matter. In terms of the Rules of Executive
Business, he is not authorized to act on behalf of the State. We have noticed
hereinbefore, that only when the High Court directed production of records a
Principal Secretary to the Government affirmed an affidavit wherein it was not
stated that the records are lost but it was merely stated that they were not readily
Court in a situation of this nature expects that the authorities of the State
would take due care and caution in preserving the records in relation whereto a
lis is pending before a court of law.
State was also a party in Civil Appeal No. 910 of 1998. It is also relevant to
note that even at that point of time, the State did not choose to prefer any
appeal before this Court against the judgment and order passed by a learned
Single Judge of the High Court dated 27.3.1997. The learned counsel appearing
on behalf of the Appellant herein accepted that the satisfaction required to be
arrived at is not a subjective one but based on objective criteria.
of Mr. Chaudhary to the effect that the circumstances pointed out in the counter-affidavit
filed in WPMP No. 27633 of 2003 should be held to be substitute for the reasons
which the State must be held to have arrived at a decision, cannot be
countenanced. When an order is passed by a statutory authority, the same must
be supported either on the reasons stated therein or the grounds available therefor
in the record. A statutory authority cannot be permitted to support its order
relying on or on the basis of the statements made in the affidavit de'hors the
order or for that matter de'hors the records.
Commissioner of Police, Bombay vs. Gordhandas Bhanji [AIR 1952 SC 16], it is stated
are clear that public orders, publicly made, in exercise of a statutory
authority cannot be construed in the light of explanations subsequently given
by the officer making the order of what he meant, or of what was in his mind;
or what he intended to do. Public orders made by public authorities are meant
to have public effect and are intended to affect the actings and conduct of
those to whom they are addressed and must be construed objectively with
reference to the language used in the order itself." Yet again in Mohinder
Singh Gill (supra), this Court observed :
second equally relevant matter is that when a statutory functionary makes an order
based on certain grounds, its validity must be judged by the reasons so
mentioned and cannot be supplemented by fresh reasons in the shape of affidavit
or otherwise. Otherwise, an order bad in the beginning may, by the time it
comes to court on account of a challenge, get validated by additional grounds
later brought out. We may here draw attention to the observations of Bose, J.
in Gordhandas Bhanji." Referring to Gordhandas Bhanji (supra), it was
further observed :
are not like old wine becoming better as they grow older." [The said
decisions have been followed by this Court in Bahadursinh 65].
assignment of reasons is the part of principles of natural justice, necessity
thereof may be taken away by a statute either expressly or by necessary
implication. A declaration contained in a notification issued under Section 6
of the Act need not contain any reason but such a notification must precede the
decision of the appropriate Government.
decision is required to be taken after giving an opportunity of hearing to a
person who may suffer civil or evil consequences by reason thereof, the same
would mean an effective hearing.
Act is an expropriatory legislation. This Court in State of SCR 557] observed
that in such a case the provisions of the statute should be strictly construed
as it deprives a person of his land without consent. [See 120 and Collector of
Central Excise, Ahmedabad vs. Orient Fabrics (P) Ltd., (2004) 1 SCC 597].
cannot, therefore, be any doubt that in a case of this nature due application
of mind on the part of the statutory authority was imperative.
not a case where this Court is required to go into the question of malice
either in fact or in law or the question of colourable exercise of power by the
State any other statutory authority.
view of our findings aforementioned, it is not necessary for us to go into the
other questions raised by the parties.
the reasons aforementioned, we are of the opinion that the impugned judgment
suffers from no legal infirmity. These Appeals are, therefore, dismissed. No