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How will the property of a Christian person be distributed after his/her death in case the person has not left a will?

In case a Christian dies without leaving a will, then the property would devolve according to the following rules (as contained in the Indian Succession Act): In case the deceased has left a widow or widower and lineal descendants (children, grandchildren of predeceased children and so on), then the widow or widower as the case maybe would take one third share and the other two thirds of the property would be divided amongst the lineal descendants. In case the person has left a widow or widower and kindred (i.e. mother, father, brothers, sisters or children of predeceases brothers and sisters), the widow or widower as the case maybe would take half the share and the other half would be divided amongst the kindred. If the person has left only a widow, then it will go to the widow and in the absence of any heirs, it will go to the Government.

Do the rules of succession apply even in case of joint family property?

In case of a Joint Hindu Family, such devolution will take place only when there is a female heir of Class I and not otherwise. In that case there is notional partition of the joint family property to that extent. In absence of a female heir, the property would devolve by survivorship according to Mitakshara law upon the coparceners.

In case a Hindu has not left a will, how is the property of a Hindu divided?

In case a Hindu does not leave a will, then the property of a Hindu would be divided as follows: The property shall first devolve to the following(not in equal proportions though); son, daughter, mother, children of predeceased children, widow of a predeceased son, children and widow of a predeceased son of a predeceased son. These heirs are called Class I heirs. In the absence of these heirs, the property would devolve on what is called Class II heirs. These are mentioned in the schedule of the Hindu Succession Act. These include father, children of predeceased children of a predeceased daughter amongst others. In absence of the Class II heirs, the property would devolve on the agnates i.e. people related wholly through male and in their absence on cognates i.e. people not wholly related through the males.

ACQUIRING FERTILE LAND QUASHED BY SUPREME COURT


CASE NO.:
Appeal (civil) 4843 of 2007

PETITIONER:
Devinder Singh & Others

RESPONDENT:
State of Punjab & Others

DATE OF JUDGMENT: 12/10/2007

BENCH:
S.B. Sinha & Harjit Singh Bedi

JUDGMENT:
J U D G M E N T
[Arising out of S.L.P. (Civil) No. 9954 of 2006]
W I T H

CIVIL APPEAL NO. 4844 OF 2007
[Arising out of S.L. P. (Civil) No. 10182 of 2006]



S.B. SINHA, J :


1. Leave granted in both the Special Leave Petitions.


2. Appellants herein are owners of various tracts of agricultural lands
situate in Village Chak Gujran, Tehsil and District Hoshiarpur in the State of
Punjab. Respondent No. 5, M/s International Tractors Limited, is a
Company incorporated under the Companies Act, 1956. It intended to set up
a project named Ganesha Project . It requested the State to acquire lands in
question in terms of the provisions of the Land Acquisition Act, 1894 (for
short, the Act ). A notification was issued by the State purported to be
under Section 4 of the Act on 15.02.2002, stating :

Whereas it appears to the Governor of Punjab that
Land is likely to be required to be taken by the
Government at the public expense, for a public purpose
namely for setting up of Ganesha Project, M/s.
International Tractors Ltd. at Village Chak Gujran, Tehsil
& Distt. Hoshiarpur, it is hereby notified that the land in
locality described below is likely to be required for the
above purpose.
This notification is made under the provisions of
Section 4 of the Land Acquisition Act, 1894 to all whom
it may concern.
In exercise of powers conferred by the aforesaid
section, the Governor of Punjab is pleased to authorize
the officers for the time being engaged in undertaking
with their servants and workmen to enter upon and
survey any land in the locality and do all other acts
required or permitted by that section.
Any person interest who has any objection to the
acquisition of any land in the locality may within thirty
days of the publication of this notification file an
objection in writing before the Collector, Land
Acquisition Department of Industries & Commerce,
Punjab, 17-Bays Building, Chandigarh.

3. Objections having been called for, the appellants herein filed their
objections in terms of Section 5A of the Act, inter alia, stating :
5. That the proposed acquisition by the Punjab
Government is unconstitutional, uncalled for and
against law and fact of the case, just in order to
cause loss to the objectors and to give unlawful
gain to other party, i.e., the proposed Ganesha
Projectors M/s. International Tractor Ltd.

7. That the acquisition of the proposed land
belonging to the objectors is against the interest of
the objectors keeping in view the policies of the
State. The land in question is cultivable fertile
land and the proposed project if any can be shifted
some where else at some barren land as well as in
the industrial zone according to Industries Master
Plan and in this way, it is in the interest of the
Pollution Control Department.

9. That the objectors are cultivating the land for the
last over 25 years, it is consolidated at one place
where in the objector has installed electric motors
and planted popular trees around the fields. The
objectors do not want that the land in question be
acquired since it is against their interest and
objectors are dependent on this Acquisition land.
The Agriculturist/Farmer is entirely dependent on
his land for his livelihood. There are various
projects in the name of Escorts Tractors, Mohindra
Tractors, Massy Furgon Tractors and so many
other tractors companies/industries fulfilling the
needs of the public and as such there is no need at
all of the proposed industry to be set up in the
lands of the objectors.
10. That in any way the proposed acquisition is against
the rules of the acquisition and the act itself
keeping in view the interest of the objectors thus
causing wrongful loss to the objectors and causing
wrongful gain to the proposed objectors.

4. Indisputably, a declaration was issued in terms of Section 6 of the Act
and an agreement was entered into by and between the Company and the
State on 27.02.2003.

5. Writ petitions were filed by the appellants herein questioning the said
purported acquisition proceedings praying, inter alia, for the following
relief :
(b) Quash the notifications dated 15.02.2002
(Annexure P-2) and 27.02.2003 (Annexure P-5)
issued by the respondent No.1 under Sections 4
and 6 of the Land Acquisition Act, 1894,
respectively.

6. During the pendency of the said writ petitions, notices in terms of
Section 9 of the Act were issued on 31.05.2004. An award was made on
18.02.2005. Allegedly, during the pendency of the said writ petitions, a sum
of Rs.100/- was deposited by the State as a token amount for acquisition of
the said lands in question.
7. By reason of the impugned judgment, the High Court opined :

(i) The acquisition was for a public purpose in view of the report
submitted under the Act, relevant portion whereof is as under :

In case of M/s. International Tractors Ltd. the
company has entered into an agreement with a Fresh
company named M/s. Renault Agriculture France for
manufacture of latest technology tractors. M/s. Renault
Agriculture France holds 20% equity in the company.
Production of these latest technology tractors will boost
export, which will contribute to the general welfare and
prosperity of the whole community.

Therefore, in view of the facts and the relevant law
as mentioned above, it is proved beyond doubt that the
profits have actually gone to the general public......


(ii) Acquisition of the lands in question was not a colourable exercise of
power.
(iii) Acquisition was made in terms of the provisions contained in Part II
of the Act and not Part VII thereof, as the State had also contributed a
sum of Rs.100/- for the purpose of acquisition of lands.
(iv) Execution of the agreement with Respondent No.5-Company and
declaration made under Section 6 of the Act although were made on
the same day, the same did not suffer from the vice of non-application
of mind.
(v) Respondent No. 5 being not a private company, statutory limitations
contained in Section 44B of the Act are not attracted.
(vi) Rule 4 of the Land Acquisition (Companies) Rules, 1963 (for short,
the Companies Rules ) being directory in nature, it was not necessary
to comply with the provisions thereof.

8. Mr. P.N. Lekhi, learned Senior Counsel appearing on behalf of the
appellants, in support of these appeals, would, inter alia, submit :

i) The High Court erred in opining that the lands in question could be
compulsorily acquired for a company, other than private company, in
accordance with the provisions of Part II of the Act.
ii) In view of the insertion of clause (viii) of sub-section (f) in Section 3
by Act No. 3 of 1984, provision of Part II were not available for
acquisition of land for companies.
iii) Action on the part of the State in entering into the agreement and
issuing a declaration under Section 6 of the Act on the same day was
in excess of its power under the Act.

9. Mr. Soli J. Sorabjee, learned Senior Counsel appearing on behalf of
Respondent No.5, on the other hand, submitted :
i) Acquisition having been made for a public purpose, and a part of the
expenses having been made from the public exchequer, provisions of
Part VII of the Act were not attracted.
ii) Principles of natural justice as contained in Section 5A of the Act
having been complied with, the State was not required to carry out
any inquiry as envisaged under Rule 4 of the Companies Rules.
iii) Declaration made under Section 6 of the Act in regard to the existence
of public purpose being conclusive in nature, the court cannot go
beyond the same.
(iv) Rule 4 of the Companies Rules being directory in nature, strict
compliance thereof was not necessary.

10. The Act was enacted to amend the law for the acquisition of land for
public purposes and for companies. Section 3 of the Act provides for
interpretation clauses. Clause (cc) of Section 3 of the Act defined the
expression corporation owned or controlled by the State in the following
terms :

(cc) the expression corporation owned or controlled
by the State means any body corporate established by or
under a Central, Provincial or state Act, and includes a
Government company as defined in Section 617 of the
Companies Act, 1956 (1 of 1956), a society registered
under the Societies Registration Act, 1860 (21 of 1860),
or under any corresponding law for the time being in
force in a State, being a society established or
administered by Government and a co-operative society
within the meaning of any law relating to co-operative
societies for the time being in force in any State, being a
cooperative society in which not less than fifty-one per
centum of the paid-up share capital is held by the Central
Government, or by any State Government or
Governments, or partly by the Central Government and
partly by one or more State Governments.


11. The expression company has been defined under clause (e) of
Section 3 of the Act to mean :

(i) a company as defined in section 3 of the
Companies Act, 1956 (1 of 1956), other than a
Government company referred to in clause (cc);

(ii) a society registered under the Societies
Registration Act, 1860 (21 of 1860), or under any
corresponding law for the time being in force in a
State, other than a society referred to in clause
(cc);

(iii) a co-operative society within the meaning of any
law relating to co-operative societies for the time
being in force in any State, other than a co-
operative society referred to in clause (cc))

The expression Public purpose has been defined in Section 3(f) of
the Act to mean :

(f) the expression public purpose includes
(i) the provision of village-sites, or the extension,
planned development or improvement of existing
village-sites;

(ii) the provision of land for town or rural planning;

(iii) the provision of land for planned development of
land from public funds in pursuance of any scheme
or policy of Government and subsequent disposal
thereof in whole or in part by lease, assignment or
outright sale with the object of securing further
development as planned;

(iv) the provision of land for a corporation owned or
controlled by the State;

(v) the provision of land for residential purposes to the
poor or landless or to persons residing in areas
affected by natural calamities, or to persons
displaced or affected by reason of the
implementation of any scheme undertaken by
Government, any local authority or a corporation
owned or controlled by the State;

(vi) the provision of land for carrying out any
educational, housing, health or slum clearance
scheme sponsored by Government, or by any
authority established by Government for carrying
out any such scheme, or, with the prior approval of
the appropriate Government, by a local authority,
or a society registered under the Societies
Registration Act, 1860 (21 of 1860), or under any
corresponding law for the time being in force in a
State, or a co-operative society within the meaning
of any law relating to co-operative societies for the
time being in force in any State;

(vii) the provision of land for any other scheme of
development sponsored by Government or, with
the prior approval of the appropriate Government,
by a local authority;

(viii) the provision of any premises or building for
locating a public office,

but does not include acquisition of land for companies.;
12. Indisputably, the Land Acquisition Act is an expropriatory legislation.
The State ordinarily can acquire a property in exercise of its power of
Eminent Domain subject to existence of public purpose and on payment of
reasonable compensation in terms of the provisions of the Act. However,
the State has been empowered to acquire land also for companies and for
purposes other than public purpose.

13. Companies Act, 1956 provides for different types of company. A
Government Company is defined in Section 617 thereof. Respondent No. 5
may be a public limited company, but it is not a Government Company.
When it filed an application requesting the State to acquire the lands for its
purpose evidently an inquiry was caused to be made.
14. It its counter affidavit, the State has, inter alia, contended that
Respondent No. 5 is an existing unit for manufacturing tractors and lands
sought to be acquired are adjoining their factory. The State appointed a Sub-
Committee of Land Acquisition Committee constituted by the State
recommending acquisition of 30 acres of lands. Approval of the State,
therefor was sought for. Ganesha Project was not a project of the State but
one undertaken by Respondent No. 5. Such a project would come within the
purview of clause (aa) of Section 40(1) of the Act.
15. When a request is made by any wing of the State or a Government
company for acquisition of land for a public purpose, different procedures
are adopted. Where, however, an application is filed for acquisition of land
at the instance of a company , the procedures to be adopted therefor are laid
down in Part VII of the Act. Although it may not be decisive but the
conduct of the State as to how it intended to deal with such a requisition, is a
relevant factor. The action of the State provides for an important condition
to consider as to whether the purpose wherefor a company requests it for
acquisition of land is a public purpose and/or which could be made at public
expenses either as a whole or in part, wherefor evidently provisions laid
down in Part II shall be resorted to. On the other hand, if the State forms an
opinion that the acquisition of land at the instance of the company may not
be for public purpose or, therefor the expenses to be incurred therefor either
in whole or in part shall not be borne by the State, the procedures laid down
in Part VII thereof have to be resorted to. The procedures laid down under
Part VII of the Act are exhaustive. Rules have been framed prescribing the
mode and manner in which the State vis-`-vis the company should proceed.
It provides for previous consent of the Appropriate Government, execution
of the agreement, previous inquiry before a consent is accorded, publication
of the agreement, restriction on transfer, etc. It also provides for statutory
injunction that no land shall be acquired except for the purpose contained in
clause (a) of sub-section (1) Section 40 of the Act for a private company
which is not a Government company. For the purpose of Section 44B of
the Act, no distinction is made between a private company and a public
limited company.

16. The Land Acquisition (Companies) Rules, 1963 for acquisition of
land for the companies have been framed by the Central Government in
exercise of its power under Section 55 of the Act. It is not in dispute that the
guidelines provided thereunder are followed by the State Government.
Concept of constitution of a Land Acquisition Committee appears only from
the Companies Rules; no other provision in respect thereof has been made
either under the Act or the rules framed thereunder. A bare perusal of sub-
rule (1) of Rule 4 of the said Rules categorically states that the same shall
be applicable where acquisition of land is to be made for the company
envisaged under Part VII. The State, as indicated hereinbefore, before this
Court has categorically stated that advice rendered by a Sub-Committee of
the Land Acquisition Committee had been taken into consideration by it
with a view to proceed further in the matter. Rule 4 mandates the
appropriate Government to arrive at a satisfaction in regard to the factors
enumerated therein. Rule 4 of the Rules reads as under :
4. Appropriate Government to be satisfied with regard
to certain matters before initiating acquisition
proceedings (1) Whenever a company makes an
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 persons interested
therein on payment of reasonable price and such efforts
have failed;

(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 utilise 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 referred 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 Secs.
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 shall be
forwarded by the Government to the Committee.

(4) No declaration shall be made by the Appropriate
Government under Sec. 6 of the Act unless

(i) the Appropriate Government has consulted the
Committee and has considered the report submitted under
this rule and the report, if any, submitted under Sec. 5-A
of the Act; and

(ii) the agreement under Sec. 41 of the Act has been
executed by the company.

17. 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 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.
18. 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.
19. The High Court proceeded on the basis that as the State formed an
opinion that the purpose for which the provisions of the Act were taken
recourse to is a public purpose, the provisions of Part II would apply in the
instant case. We are not unmindful of the fact that the definition of public
purpose as contained in Section 3(f) of the Act is an inclusive one.
Therefore, the said definition need not be kept confined to the matters
referred to therein. But with a view to ascertain as to what should be a
public purpose, we may notice its dictionary meaning as contained in
Black s Law Dictionary, Fifth Edition which is as under :

Public purpose: In the law of taxation, eminent domain,
etc., this is a term of classification to distinguish the
objects for which, according to settled usage, the
government is to provide, from those which, by the like
usage, are left to private interest, inclination, or liberality.
The constitutional requirement that the purpose of any
tax, police regulation, or particular exertion of the power
of eminent domain shall be the convenience, safety, or
welfare of the entire community and not the welfare of a
specific individual or class of persons.

The term is synonymous with governmental purpose. As
employed to denote the objects for which taxes may be
levied, it has no relation to the urgency of the public need
or to the extent of the public benefit which is to follow;
the essential requisite being that a public service or use
shall affect the inhabitants as a community, and not
merely as individuals. A public purposeor public
business has for its objective the promotion of the public
health, safety, morals, general welfare, security,
prosperity, and contentment of all the inhabitants or
residents within a given political division, as, for
example, a state, the sovereign powers of which are
exercised to promote such public purpose or public
business.

20. General meaning of the word public policy has always been held to
be an unruly horse by this Court. [See Gherulal Parakh v. Mahadeodas
Maiya and Others [See AIR 1959 SC 781].

21. Our attention has been drawn to a recent decision of this Court in
Pratibha Nema and Others v. State of M.P. and Others [(2003) 10 SCC
626]. Therein, for establishment of a diamond park, 73.3 hectares of dry
land was to be acquired. The proposal emanated from the General Manager
of the District Industries Centre. Sanction in principle for acquisition was
given by the Government of Madhya Pradesh; even Section 17 of the Act
was taken recourse to. The State contributed a token sum of Rs.100/-
towards the cost of acquisition. This Court clearly noticed that where the
acquisition is for a company, its cost is to be borne entirely by the company
itself, provisions of Part 7 would apply. But we must hasten to add that the
Bench did not have any occasion to consider the question as to whether the
State is entitled to take recourse to the provisions of both Part II and Part VII
of the Act simultaneously. The Bench furthermore proceeded to consider the
requirements to hold that a public purpose need not be ascertained only from
the point of view of applicability of Part II but also the provisions of Part
VII, stating :

22. Thus the distinction between public purpose
acquisition and Part VII acquisition has got blurred under
the impact of judicial interpretation of relevant
provisions. The main and perhaps the deceive distinction
lies in the fact whether cost of acquisition comes out of
public funds wholly or partly. Here again, even a token
or nominal contribution by the Government was held to
be sufficient compliance with the second proviso to
Section 6 as held in a catena of decisions. The net result
is that by contributing even a trifling sum, the character
and pattern of acquisition could be changed by the
Government. In ultimate analysis, what is considered to
be an acquisition for facilitating the setting up of an
industry in the private sector could get imbued with the
character of public purpose acquisition if only the
Government comes forward to sanction the payment of a
nominal sum towards compensation. In the present state
of law, that seems to be the real position.

22. 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 (supra) held :

In other words, the second proviso to Section 6(1) is
the main dividing ground for the two types of
acquisition

23. The undisputed fact is that apart from the inquiry conducted by the
Land Acquisition Committee in terms of the provisions of Part VII of the
Act, admittedly an agreement had also been entered into on 27.02.2003.

24. The agreement in terms of the provisions referred to above by the
Company and the Government, a satisfaction of the Government in that
behalf for acquisition of the piece of land described in therein was arrived
at on the premise that the said work is likely to be useful for the company.

25. Section 41 of the Act has specifically been mentioned for the purpose
of entering into the agreement. The terms and conditions of the agreement
envisaged : (i) the company was to pay to the Government of Punjab the
amount of compensation; (ii) it was to deposit all the sums demanded by the
Collector in anticipation, which may be necessary therefor; (iii) only on
payment by the company it was to get possession wherefor also the
Government reserved its discretion; (iv) use by the company of the land only
for the purpose for which acquisition was made was insisted.; (v) provision
in regard to time for completion of the project.

26. The Government reserved the right of resumption of the land, if time
schedule prescribed therein is not adhered to; in which event land shall vest
in the Government. The opinion of the Government in that behalf is said to
be final.

27. Whether in the aforementioned situation, the provisions of Part II can
be said to have been complied with, is the question.

28. Submission of Mr. Sorabjee is that any declaration that the land has
been acquired for public purpose is conclusive.

29. We would proceed on the said assumption but it is a well-settled
principle of law that where an action taken is without jurisdiction, even an
order which is conclusive may be subject to judicial review. Jurisdictional
errors, as is well-known, are divided in two broad categories (i) an order
passed which is wholly without jurisdiction; and (ii) Although the action is
not ultra vires, the jurisdictional error has been committed while exercising
jurisdiction. [See John v. Rees and Others (1969) 2 All ER 274].

30. In R.L. Arora v. State of U.P. [(1962) Supp 2 SCR 149], this Court
held :
Then it was urged on behalf of the respondents that s.
6(3) makes the purpose noted in the notification under s.
6(1) not justiciable. We have not been able to understand
how that provision helps the respondents. All that s. 6(3)
says is that the declaration shall be conclusive evidence
that the land is needed for a public purpose or for a
company. In this case the declaration was that the land
was needed for a company and that according to s. 6(3) is
conclusive evidence that the land is so needed. Now it is
not the case of the appellant that the land was not needed
for the Works in the present case, nor does the appellant
say that though the land was needed for some other
purpose, the notification falsely declares that it was
needed for the Works. In the circumstances the
conclusiveness envisaged by s. 6(3) is of no assistance to
the solving of the problem with which we are concerned
in the present case.

31. Mr. Sorabjee has strongly relied upon a decision of this Court in Smt.
Somawanti and Others v. The State of Punjab and Others [AIR 1963 SC 151
: 1963 (2) SCR 774].

In Somawanti (supra), this Court opined :

Though we are of the opinion that the courts are
not entitled to go behind the declaration of the
Government to the effect that a particular purpose for
which the land is being acquired is a public purpose we
must emphasise that the declaration of the Government
must be relatable to a public purpose as distinct from a
purely private purpose. If the purpose for which the
acquisition is being made is not relatable to a public
purpose then a question may well arise whether in
making the declaration there has been, on the part of the
Government a fraud on the power conferred upon it by
the Act. In other words the question would then arise
whether that declaration was merely a colourable
exercise of the power conferred by the Act, and,
therefore, the declaration is open to challenge at the
instance of the party aggrieved. To such a declaration the
protection of s. 6(3) will not extend. For, the question
whether a particular action was the result of a fraud or
not is always justiciable, provisions such as s. 6(3)
notwithstanding.
[Emphasis supplied]

32. When an order is passed without jurisdiction it amounts to colourable
exercise of power. Formation of opinion must precede application of mind.
Such application of mind must be on the materials brought on records. The
materials should be such which are required to be collected by the
authorities entitled therefor. The authorities must act within the four-corners
of the statute. An opinion formed even on the basis of an advice by an
authority which is not contemplated under the statute render the decision bad
in law. A statutory authority is bound by the procedure laid down in the
statute and must act within the four-corners thereof.

33. The effect of contribution of a sum of Rs.100/- by the State purported
to be towards the amount of compensation, may not be noticed.

In Somawanti (supra) although this Court while upholding that
contribution of sum of Rs.100/- as a part of the cost of acquisition may
subserve the requirement of law, proceeded to opined :

We would like to add that the view taken in
Senga Naicken's case [I.L.R. 50 Mad. 308 : AIR 1927
Mad. 245] has been followed by the various High Courts
of India. On the basis of the correctness of that view the
State Governments have been acquiring private
properties all over the country by contributing only token
amounts towards the cost of acquisition. Titles to many
such properties would be unsettled if we were now to
take the view that 'partly at public expense' means
substantially at public expense. Therefore, on the
principle of stare decisis the view taken in Senga
Naicken's case [I.L.R. 50 Mad. 308 : AIR 1927 Mad.
245] should not be disturbed. We would, however, guard
ourselves against being understood to say that a token
contribution by the State towards the cost of acquisition
will be sufficient compliance with the law in each and
every case. Whether such contribution meets the
requirements of the law would depend upon the facts of
every case. Indeed the fact that the State's contribution is
nominal may well indicate, in particular circumstances
that the action of the State was a colourable exercise of
power. In our opinion 'part' does not necessarily mean a
substantial part and that it will be open to the Court in
every case which comes up before it to examine whether
the contribution made by the State satisfies the
requirement of the law. In this case we are satisfied that it
satisfies the requirement of law. What is next to be
considered is whether the acquisition was only for a
company because the compensation was to come almost
entirely out of its coffers and, therefore, it was in reality
for a private purpose as opposed to public purpose. In
other words, the question is whether there was on the part
of the Government a colourable exercise of power.
Elaborating the point it is said that the establishment of a
factory for manufacturing refrigeration equipment is
nothing but an ordinary commercial venture and can by
no stretch of imagination fall within the well-accepted
meaning of the expression 'public purpose', that even if it
were to fall within that expression the factory is to be
established not by the Government, nor by Government
participation but solely by the respondent No. 6, a public
limited concern and that, therefore, the concern could
acquire land for such a purpose only after complying
with the provisions of Part VII and that the use of the
provisions of s. 6(1) is merely a colourable device to
enable the respondent No. 6 to do something which,
under terms of s. 6(1), could not be done.

[Emphasis supplied]


34. Strong reliance has also been placed by the High Court in Jage Ram
and Others v. The State of Haryana and Others [AIR 1971 SC 1033 : (1971)
1 SCC 671] for the proposition that once the Government had contributed
any sum towards the cost of the acquisition of land, it was not necessary for
the Government to proceed under Part VII of the Act and, therefore, does not
lie in the mouth of State that acquisition was under Part II.

35. In this case we may notice that purported contribution had been made
only after the writ petitions were filed. Ordinarily, this Court would not
have gone into the said question but the agreement provides for payment of
entire compensation by the company. We do not know as to at what stage
the State thought it fit to meet a part of the expenses for acquisition of land.
Such an opinion on the part of the State having regard to the statutory
scheme should have been formed prior to entering into the agreement itself.
The agreement does not mention about any payment of a part of
compensation by the State. We, in absence of any other material on record,
must hold that the State had not formed any opinion in that behalf at least
when the agreement was executed. The wisdom in all probabilities dawned
on the officers of the State at a later stage.

36. Satisfaction on the part of the State required to be arrived at upon
formation of opinion on the basis of materials brought on records for the
purpose of Part II of 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
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.

37. In Shyam Behari and Others v. State of Madhya Pradesh and Others
[1964 (6) SCR 636], it was held :

In the second place, the declaration under s. 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 s.6 must
contain a declaration that the land is needed for a
company. No notification under s. 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 the
part, compensation must come out of public revenues or
some fund controlled or managed by a local authority


38. Distinction between acquisition under Part II and Part VII are 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.

39. A declaration is to be made either for a public purpose or for a
company. It cannot be for both.

40. It is furthermore trite that Land Acquisition Act is an expropriatory
legislation. [See Hindustan Petroleum Corporation Ltd. v. Darius Shapur
Chenai & Ors. (2005) 7 SCC 627; and Chairman, Indore Vikas Pradhikaran
v. M/s Pure Industrial Cock & Chem. Ltd. & Others [2007 (8) SCALE 110]

41. Expropriatory legislation, as is well-known, must be strictly
construed. When the properties of a citizen is 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 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 criteria, other statutory requirements call for strict compliance,
being imperative in character.

42. 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.

43. Rule 4 of the Rules employs the word shall not once place 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.

44. In State of Gujarat and Another v. Patel Chaturbhai Narsibhai and
Others [AIR 1975 SC 629], this Court held :
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 5A of the Act is equally
unsound. Section 17 of the Act provides that the
appropriate Government may direct that the provisions of
Section 5A 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 5A may not
be held.

45. In General Government Servants Cooperative Housing Society Ltd.,
Agra etc. v. Sh. Wahab Uddin and Others etc. [(1981) 2 SCC 352], this
Court held :
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 the 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 exorbitant
prices. The purpose of Clauses (iii), (iv) and (v) is
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 5A 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 of Section 6 of the
Act.

46. In M/s Fomento Resorts and Hotels Ltd. v. Gustavo Ranato Da Cruz
Pinto and Others [(1985) 2 SCC 152], a three-Judge Bench of this Court
categorically held :
17. Reading the Act and the Rules and keeping in
view the scheme of the Act, it is apparent, in our opinion,
that before the issuance of Section 4 notification, there is
no requirement as such of compliance with the procedure
contemplated by Rule 4 of the Rules. We are therefore
unable to subscribe to the view that enquiry by Rule 4
must precede the issuance of notification under Section
4(1) of the Act. Furthermore as indicated before certain
matters which are required to be done under Rule 4 can
not be done because the officer or the person authorised
by him would have no authority unless notification under
Section 4 is issued.

47. Repelling a contention that the provisions of Sections 6 to 37 are not
required to be complied with in view of Section 39 thereof, it was held :

This Section, in our opinion, has no relevance for
determining whether to be a proper acquisition, enquiry
contemplated under Rule 4 must precede issuance of the
notification under Section 4 of the Act

48. The lands in question are recorded as Shahi lands. It is not in dispute
that they are agricultural lands. The Act contemplates that such lands may
not be acquired.

49. We may notice that in Collector (District Magistrate) Allahabad and
Another etc. v. Raja Ram Jaiswal etc., (1985) 3 SCC 1] this Court held that
such a contention requires an indepth study, stating :
27. The validity of the impugned notification was
also challenged on the ground that even though the
acquisition is for the Sammelan, a company, the
notification was issued without first complying with the
provisions of Rule 4 of the Land Acquisition
(Companies) Rules, 1963. The High Court has negatived
this challenge. We must frankly confess that the
contention canvassed by Mr. Nariman in this behalf
would necessitate an indepth examination of the
contention. However, we consider it unnecessary in this
case to undertake this exercise because the judgment of
the High Court is being upheld for the additional reason
that the acquisition in this case was mala fide. Therefore,
we do not propose to examine the contention under this
head.

It is, on that premise, we have undertaken some study in this behalf.


50. The decision of this Court in Somawanti (supra) holding 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 (supra) and Wahab Uddin (supra), the earlier
binding precedent, with utmost respect, having not been taken into
consideration in its entirety.

51. In Abdul Husein Tayabali & Others v. State of Gujarat & Others
1968 (1) SCR 597], this Court observed :

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 .

52. In Srinivasa Cooperative House Building Society Ltd. v. Madam
Gurumurthy Sastry and Others [(1994) 4 SCC 675], noticing Somavanti
(supra) wherein it was held that the manufacturing of the articles was for the
benefit of the community and to save substantive part of foreign exchange
and staff quarters to workmen, it was held :
On the other hand, in the case of an acquisition for a
company, the compensation has to be paid by the
company. In such a case there can be an agreement under
Section 41 for transfer of the land acquired by the
Government to the company on payment of the cost of
acquisition, as also other matters. The agreement
contemplated by Section 41 is to be entered into between
the company and the appropriate Government only after
the latter is satisfied about the purpose of the proposed
acquisition, and subject to the condition precedent that
the previous consent of the appropriate Government has
been given to the acquisition. Section 6 is in terms, made
subject to the provisions of Part VII of the Act. The
declaration for acquisition for a company shall not be
made unless the compensation to be awarded for the
property is to be paid by a company. In the case of an
acquisition for a company simipliciter, the declaration
cannot be made without satisfying the requirements of
Part VII. But that does not necessarily mean that an
acquisition for a company for a public purpose cannot be
made otherwise than under the provisions of Part VII, if
the cost or a portion of the cost of the acquisition is to
come out of public funds. In other words, the essential
condition for acquisition is for a public purpose and that
the cost of acquisition should be borne, wholly or in part,
out of public funds. Hence an acquisition for a company
may also be made for a public purpose, within the
meaning of the Act, if a part or the whole of the cost of
acquisition is met by public funds. If, on the other hand,
the acquisition, for a company is to be made at the cost
entirely of the company itself, such an acquisition comes
under the provisions of Part VII

53. The approach of the High Court in this behalf, in our opinion, is
totally erroneous. A provision of a statute is either mandatory or directory.
Even if a provision is directory, the same should be substantially complied
with. It cannot be ignored in its entirety only because the provision is held
to be directory and not an imperative one.

54. In this case admittedly there has been no compliance of Rule 4. If
Rule 4 has not been complied with, the exercise of jurisdiction under Part
VII must be held to have been erroneous.

55. For the reasons aforementioned, the impugned judgment cannot be
sustained, which is set aside accordingly. The appeals are allowed with
costs. Counsel s fee assessed at Rs.25,000/- (Rupees twenty five thousand
only).





CASE LAW ON LAND LAWS

KARNATAKA LAND LAWS