# DIPAK BABARIA & ANR v. STATE OF GUJARAT & ORS

- **Citation:** [2014] 2 S.C.R. 71
- **Court:** Supreme Court of India
- **Decided:** 2014-01-23
- **Case number:** Civil Appeal No. 836 of 2014
- **Bench:** H.l. GOKHALE, J. Chelameswar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/dipak-babaria-anr-v-state-of-gujarat-ors-29860
- **Pages:** 67

## Headnote

GUJARAT TENANCY AND AGRICULTURAL LANDS
(VIDARBHA REGION AND KUTCH AREAS) ACT, 1958:
s. 89-A - Sale of agricultural land for industrial purpose -
No industry set up - Minister permitting further sale of land
A
8
c
for industrial purpose - Held: Where purchaser fails to start
industrial activity, s. 89A (5) requires the Collector to hold an
enquiry, he is expected to pass an order that the land shall 0
vest in Government Then the land shall be disposed of by
Government having regard to the use of the land --In the
instant case, Collector did not take any steps - Instead
Minister granted permission for sale of land in favour of further
purchaser - This is clearly a case of dereliction of duties by
Collector and dictation by the Minister - Direction of State
E
Government dated 18.12.2009 and consequent order issued
by Collector on 15.1.2010 are arbitrary, and bad in law for
being in violation of the scheme and the provisions of ss. 89
and 89A -- Direct sale of land by first purchaser to subsequent
purchaser is also bad in law, and inoperative - Consequently,
F
there will be an order ·that the land shall vest in State
Government free from all encumbrances - The vesting order,
however, has to be on payment of appropriate compensation
to the purchaser as the Collector may determine - If the
second purchaser is interested in its proposed project, it shall
G
pay the stated amount to Government - Direction given for
adjustment of the amount paid - Constitution of India, 1950 -
Art.142.
71
H
72
SUPREME COURT REPORTS
[2014] 2 S.C.R.
A
ADMINISTRATIVE LAW:
Departmental notings - Held: A higher civil servant
normally has a varied experience and Ministers ought not to
treat his opinion with scant respect - If Ministers want to take
8 a different view, there must be compelling reasons, and the
same must be reflected on the record - In the instant case,
the Secretaries had given advice in accordance with the
statute and yet the Minister has given a direction to act
contrary thereto and permitted the sale which is clearly in
breach of the statute.
c
Land policy - Held: Considering the scheme of the Act,
the process of industrialization must take place in accordance
therewith - If the law requires a particular thing should be done
in a particular manner it must be done in that way and none
D other -State Government cannot ignore the policy intent and
the procedure contemplated by the statute - In the instant case,
State Government could have acquired the land, and then
either by auction or by considering the merit of proposal,
allotted it.
E
Power of statutory authority - Exercise of by Government
- Minister permitting further sale - Held: Under s. 89A(3),
Government is appellate authority where Collector does not
grant a certificate for purchase of bonafide industrial purpose
- Thus, powers of statutory authority have been exercised by
F Government which is an appellate authority - Minister's
direction clearly indicates an arbitrary exercise of power -
Orders passed by Government cannot, therefore, be
sustained - Dictating the Collector to act in a particular
manner on the assumption by Minister that it is in the interest
G of industrial development would lead to a breach of the
mandate of statute framed by legislature - Gujarat Tenancy
and Agricultural Lands (Vidarbha Region and Kutch Areas)
Act, 1958 -- s. 89-A.
H
The appellant filed a writ petition in public interest
DIPAK BABARIA & ANR. v. STATE OF GUJARAT &
73
ORS.
before the High Court challenging primarily the A
permission granted by the Collector to respondent No.4
i.e., lndigold Refinery Limited, to sell certain parcels of
agricultural land situated in District Kutch, which were
said to have been purchased earlier by respondent No.4,
for industrial purpose, in favour of respondent No.5 i.e.
B
Alumina Refinery Limited, as being impermissible under
the provisions ss. 89 and 89A of the Gujarat Tenancy and
Agricultural Lands (Vidarbha Region and Kutch Areas)
Act, 1958 (Tenancy Act, 1958).

## Text

_Characters 0–39,734 of 126,355. This is a partial read: ask again with offset=39734 for what follows._

[2014] 2 S.C.R. 71
DIPAK BABARIA & ANR.
v.
STATE OF GUJARAT & ORS.
(Civil Appeal No. 836 of 2014)
JANUARY 23, 2014
[H.l. GOKHALE AND J. CHELAMESWAR, JJ.)
GUJARAT TENANCY AND AGRICULTURAL LANDS
(VIDARBHA REGION AND KUTCH AREAS) ACT, 1958:
s. 89-A - Sale of agricultural land for industrial purpose -
No industry set up - Minister permitting further sale of land
A
8
c
for industrial purpose - Held: Where purchaser fails to start
industrial activity, s. 89A (5) requires the Collector to hold an
enquiry, he is expected to pass an order that the land shall 0
vest in Government Then the land shall be disposed of by
Government having regard to the use of the land --In the
instant case, Collector did not take any steps - Instead
Minister granted permission for sale of land in favour of further
purchaser - This is clearly a case of dereliction of duties by
Collector and dictation by the Minister - Direction of State
E
Government dated 18.12.2009 and consequent order issued
by Collector on 15.1.2010 are arbitrary, and bad in law for
being in violation of the scheme and the provisions of ss. 89
and 89A -- Direct sale of land by first purchaser to subsequent
purchaser is also bad in law, and inoperative - Consequently,
F
there will be an order ·that the land shall vest in State
Government free from all encumbrances - The vesting order,
however, has to be on payment of appropriate compensation
to the purchaser as the Collector may determine - If the
second purchaser is interested in its proposed project, it shall
G
pay the stated amount to Government - Direction given for
adjustment of the amount paid - Constitution of India, 1950 -
Art.142.
71
H
72
SUPREME COURT REPORTS
[2014] 2 S.C.R.
A
ADMINISTRATIVE LAW:
Departmental notings - Held: A higher civil servant
normally has a varied experience and Ministers ought not to
treat his opinion with scant respect - If Ministers want to take
8 a different view, there must be compelling reasons, and the
same must be reflected on the record - In the instant case,
the Secretaries had given advice in accordance with the
statute and yet the Minister has given a direction to act
contrary thereto and permitted the sale which is clearly in
breach of the statute.
c
Land policy - Held: Considering the scheme of the Act,
the process of industrialization must take place in accordance
therewith - If the law requires a particular thing should be done
in a particular manner it must be done in that way and none
D other -State Government cannot ignore the policy intent and
the procedure contemplated by the statute - In the instant case,
State Government could have acquired the land, and then
either by auction or by considering the merit of proposal,
allotted it.
E
Power of statutory authority - Exercise of by Government
- Minister permitting further sale - Held: Under s. 89A(3),
Government is appellate authority where Collector does not
grant a certificate for purchase of bonafide industrial purpose
- Thus, powers of statutory authority have been exercised by
F Government which is an appellate authority - Minister's
direction clearly indicates an arbitrary exercise of power -
Orders passed by Government cannot, therefore, be
sustained - Dictating the Collector to act in a particular
manner on the assumption by Minister that it is in the interest
G of industrial development would lead to a breach of the
mandate of statute framed by legislature - Gujarat Tenancy
and Agricultural Lands (Vidarbha Region and Kutch Areas)
Act, 1958 -- s. 89-A.
H
The appellant filed a writ petition in public interest
DIPAK BABARIA & ANR. v. STATE OF GUJARAT &
73
ORS.
before the High Court challenging primarily the A
permission granted by the Collector to respondent No.4
i.e., lndigold Refinery Limited, to sell certain parcels of
agricultural land situated in District Kutch, which were
said to have been purchased earlier by respondent No.4,
for industrial purpose, in favour of respondent No.5 i.e.
B
Alumina Refinery Limited, as being impermissible under
the provisions ss. 89 and 89A of the Gujarat Tenancy and
Agricultural Lands (Vidarbha Region and Kutch Areas)
Act, 1958 (Tenancy Act, 1958). It was the case of the
appellant that there was no provision for any further c
transfer of agricultural land from one industrial purchaser
to any third party, once again, for industrial purpose
when the first purchaser of agricultural land had
defaulted in setting up the industry. Apart from being in
- breach of the law, the transaction was stated to be against
0
public interest, and a mala-fide one resulting into a
serious loss to the public exchequer. The writ petition
also sought an inquiry into the role of the Collector and
the Revenue Minister of the State Government as well as
a direction to the State authorities to resume the land in
E
question. The High Court dismissed the writ petition
holding that there was delay in initiating the said public
interest litigation (PIL), and that the writ petitioner had
suppressed the material facts before the High Court
concerning the investment claimed to have been .made
by respondent No.5.
F
In the instant appeal filed by the writ petitioner, the
questions for consideration before the Court were: (i)
whether the decision taken by the Government to permit
the transfer of the agricultural land from respondent No.
G
4 to respondent No. 5, was legal and justified, and (ii)
whether there had been any breach of ss.89 and 89-A,
and if it was so what should be the order in the case?
Allowing the appeal in part, the Court
H
74
SUPREME COURT REPORTS
[2014] 2 S.C.R.
A
HELD: 1.1 Section 89 of the Gujarat Tenancy and
Agricultural Lands (Vidarbha Region and Kutch Areas)
Act, 1958 essentially bars the transfers of agricultural
lands to non-agriculturists. Section 89A creates an
exception to s. 89 for sale of land for bona-fide industrial
s purposes in certain cases. The purchaser has to send a
notice to the Collector within 30 days of the purchase, and
the Collector has to be satisfied that the land has been
validly purchased for a bonafide industrial purpose, in
conformity with the provisions of sub-s. (1) of s.89-A, and
c then issue a certificate to that effect. There is a further
requirement that the purchaser has to commence the
industrial activity within three years, and has to start the
production within five years from the date of issuance of
the certificate. Admittedly no such steps were taken by
0
respondent no. 4 nor was any affidavit in reply filed by
them, either before the High Court or before this Court.
[para 45, 46 and 48] [118-G; 119-E; 121-H; 122-A-B]
1.2 It is significant to note that whereas the land is
supposed to have been purchased in 2003 at a price of
E Rs.70 lakhs, it is said to have been sold at Rs.1.20 crores
in 19.1.2010. It is very clear that even before the letter of
16.6.2009 proposing to sell the land to respondent No.5,
in December 2008 itself respondent No.4 had written to
the Collector that they were no more interested in putting
F up the industrial project, and, therefore, they wanted to
dispose of the piece of land to their prospective clients.
That being the position, it was mandatory for the
Collector at that stage itself to act under sub-s. (5) of
s.89A to issue notice, conduct the necessary enquiry,
G determine the compensation and pass the order vesting
the land in the State Government. Then the land was to
be disposed of by the Government having regard to the
use of the land. In any case, the Collector should have
taken the necessary steps in accordance with law at least
H after receiving the letter dated 16.6.2009. He did not take
DIPAK BABARIN & ANR. v: STATE OF GUJARAT &
75
ORS.
any su·ch steps;· Thus, the only authority contemplated.· A
under· the Section is the Collector ;«ind the decision is to
be taken at his level. It is only In the event of his refusing
to·give the certificate ofpurcffase for bonafide industrial
purpose that an appeal lies to the State Government.
[para '47 and 49] [122-E-H; 120-H; 121~A] ·
B
.. ,
' ''.
1.3 Respondent No.5 by letter dated 12.6.2009
addressed to. the Deputy Collector" Bhuj, sought
permission to purchase the land belonging to respondent
no. 4: It then sought the permission from the competent
authority, u/s 89 of the Tenancy Act, 1958 to register the C
sale in their favour. After writing to the Collector on
16.6.2009, without waiting 'for 'any communication' from'
him, re'spondent no: 5 wrote to the Chief Minister on:
18.6.2009. Directors' of respondent no.· 5. had a meeting -
with ttie Minister of Revenue on 29.6.2009.'The Minister D
passed an order that permission be given and, therefore,
the Collector· ultimately 'granted ·the permission as·
directed by the Government. trlstead of the' statuto..Y
authority.viz: the· Coliector acting in accordance with the;
-statutory' manifate, orily because a direction was give'n
~
by ttie Minister that.the statutory·authorify was bypassed,
and even the enquiry as contemplated under sub-s: (5)
of s.·asA was given· a· go~by.iThus;:what emerges from
the record is that whereas ss.~B9 and BSA ·contemplate a·
certain. procedure and certain requirements, what has
F
been' done in.the instant matter is quite different. · It i.s.
well settled that where the 'statute provides for a thing to
be done ina particular manner,, then it has to be done in
that manner. and in no other manner.[para 50,52 and 53]
[123-C-D and E-F; 124-B-E; ,125-8]
. ·i ·
G
·Taylor Vs. Taylor (1875) 1 Ch D 426,431; Na~ir Ahmed·
Vs. King Emperor AIR 1936 PC 253 ; Rao Shiv Bahadur
Singh Vs. State.of Vindhya PradeshJ954 SCR 1038 =AIR
1954 SC 322; State of U.P. Vs." Singhara Singh, AIR 1964
SC 3SB;' Chandra Kishore Jha Vs. Mahavir Prasad 1999 (2)
H
76
SUPREME COURT REPORTS
[2014] 2 S.C.R.
A Suppl. SCR 754 = 1999 (8) SCC 266, Dhananjaya Reddy
Vs. State of Karnataka 2001 (2) SCR 399 = 2001 (4) SCC 9
and Gujarat Urja Vikas Nigam Limited vs. Essar Power
Limited 2008 (4) SCR 822 = 2008 (4) SCC 755 - referred to
8
R v. Tower Hamlets London Borough Council [1988] AC
856 - referred to.
1.4 The notings of the Secretaries were significant.
A higher civil servant normally has a varied experience
and the ministers ought not to treat his opinion with scant
C respect. If Ministers want to take a different view, there
must be compelling reasons, and the same must be
reflected on the record. In the instant case, the
Secretaries had given advice in accordance with the
statute and yet the Minister has given a direction to act
D contrary thereto and permitted the sale which is clearly
in breach of the statute. Under s. 89A(3), the Government
is the appellate authority where the Collector does not
grant a certificate for purchase of bonafide industrial
purpose. The State Government could not have given a
E direction to the Collector who was supposed to take the
decision under his own authority. Thus, thereby the -
powers of the statutory authority have been exercised by
the Government which is an appellate authority. [para 55
and 62] [126-H; 127-A-B; 132-B-D]
F
Trilochan Dev Sharma vs. State of Punjab 2001 (3) SCR
1146 =AIR 2001 SC 2524 - referred to.
1.5 The Government must defend its action on the
basis of the order that it has passed, and it cannot
G improve its stand by filing subsequent affidavits. [para
57] [127-G]
Commissioner of Police, Bombay vs. Gordhandas
Bhanji 1952 SCR 135 =AIR 1952 SC 16; Mohinder Singh
H Gill vs. Chief Election Commissioner 1978 (2) SCR 272 =
DIPAK BABARIA & ANR. v. STATE OF GUJARAT &
77
ORS.
1978 (1) SCC 405 - referred to.
A
State of Punjay vs. Hari Kishan 1966 SCR 982 = AIR
1966 SC 1081 - referred to.
1.6 The reliance on ss. 7 and 10 of the Transfer of
Property Act is misconceived, since the Tenancy Act is a 8
welfare enactment, enacted for the protection of the
agriculturists. It is a special statute and the sale of
agricultural land permitted under this statute will have to
be held as governed by the conditions prescribed under
the statute itself. The special provisions made in the C
Tenancy Act will, therefore, prevail over those in the
Transfer of Property Act to that extent. Besides, it is
clearly a case of dictation by the State Government to the
Collector. [para 60-61] [130-G-H; 131-A]
Anirudhsinhji Karansinhji Jadega and anr. vs. State of
Gujarat 1995 (2) Suppl. SCR 637 =1995 (5) sec 302 - relied
on.
D
1.7 From the facts it is obvious that the land which
was purchased by respondent No.4 for Rs.70 lakhs is E
permitted by the State Government to be sold directly to
respondent No.5 at Rs.1.20 crores to set up an industry
which could not have been done legally. It is undoubtedly
not a case of loss of hundreds of crores as claimed by
the appellants, but certainly a positive case of a loss of a F
few crores to the public exchequer by not going for
public auction of the property. [para 63] [132-D-F]
1.8 It is true that in a given case State Government
may invite an entrepreneur and give an offer. However, G
in the instant case, the sale of the land for industrial
purpose is controlled by the statutory provisions, and the
State Government was bound to act as per the
requirements of the statute. The Minister's direction
clearly indicates an arbitrary exercise of power. The H
78
SUPREME COURT REPORTS
[2014] 2 S.C.R.
A
orders passed by the Government cannot therefore be
sustained. There is neither a power nor a justification to
make any special case, in favour of respondent No 5.
[para 63] [132-E-G]
8
2.1 Considering the scheme of the Act, the process
of industrialization must take place in accordance
therewith. If the law requires a particular thing should be
done in a particular manner it must be do.ne in that way
and none other. The State cannot ignore the policy intent
and the procedure contemplated by the statute. In the
C instant case, the State Government could have acquired
the land, and then either by auction or by considering the
merit of the propos(ll allotted it to respondent No.5.
Assuming that the application of respondent No 5 was
for a bona-fide purpose, the same had to be examined by
D the Industrial Commissioner, to begin with, and thereafter
it should have gone· to the Collector. After the property
vests in the Government, even if there were other bidders
to the property, the Collector could have considered the
merits and the bona-fides of the application of
E respondent No. 5, and nothing would have prevented him
from following the course which is permissible under the
law. It is not merely the end but the means which are of
equal importance, particularly, if they are enshrined in the
legislative scheme. The minimum that was required was
F
an enquiry at the level of the Collector who is the
statutory authority. [para 64] [133-A-E]
2.2 Dictating the Collector to act in a particular
manner on the assumption by the Minister that it is in the
G interest of the industrial development would lead to a
breach of the mandate of the statute framed by the
legislature. The Ministers are not expected to act in this
manner and, therefore, this particular route through the
corridors of the Ministry, contrary to the statute, cannot
be approved. This is clearly a case of dereliction of duties
H
DIPAK BABARIA & ANR. v. STATE OF GUJARAT &
79
ORS.
by the Collector and dictation by the Minister, showing A
nothing but arrogance of power. [para 64] [133-E-F]
2.3 The High Court has erred in overlooking the legal
position. It was expected to look into all the relevant
aspects. The impugned judgment does not reflect on the 8
issues raised in the petition. It could not be said that the
petition was delayed and merely because i!lvestment had
been made by respondent No.5, the court would decline
to look into the important issues raised in the PIL. [para
65] [133-G-H]
c
2.4 This Court holds that the direction of the State
Government dated 18.12.2009 and the consequent order
issued by the Collector of Kutch on 15.1.2010 are
arbitrary, and bad in law for being in violation of the
scheme and the provisions of ss. 89 and 89A of the D
Tenancy Act. The direct sale of land by respondent no. 4
to respondent no. 5 is also bad in law, and inoperative.
[para 68] [135-C-D]
3.1 (i) In the letter dated 6.12.2008 of respondent no. E
4 itself, they clearly stated that they were no more
interested in putting up any industrial project in the said
land. Therefore, there is no need of any direction to hold
an enquiry u/s 89-A(5).
(ii) Consequently, there will be an order that the land
F
shall vest in the State Government free from all
encumbrances. This vesting order, however, has to be on
payment of appropriate compensation to the purchaser
as the Collector may determine. Since respondent no. 4
has received from respondent no. 5 Rs. 1.20 crores as G
against the amount of Rs.70 lakhs, which it had paid to
the agriculturists when it bought those lands in 2003. That
being so, this amount of Rs. 1.20 crores would be set-off
towards the compensation which would be payable by
the State Government to the purchaser respondent no. H
80
SUPREME COURT REPORTS
[2014] 2 S.C.R.
A
4, since the land was originally purchased by respondent
no. 4 and is now to vest in the State Government.
(iii) The third step in this regard is that the land is to
be disposed of by the State Government, having regard
B
to the use of the land. The land was supposed to be used
for the industrial activity on the basis of the utilization of
bauxite found in Kutch, and respondent No. 5 has
proposed a plant based on use of bauxite. The disposal
of the land will, however, have to be at least as per the
minimum price that would be receivable at the
C Government rate. In the facts and circumstances of the
case, having noted that respondent No.5 claims to have
made some good investment, and that it has also offered
to pay, without prejudice, the difference between Rs.4.35
crores and Rs.1.20 crores i.e. Rs.3.15 cores to the State
D
Government, the land will be· permitted to be allotted to
respondent no. 5 provided it pays Rs. 3.15 crores to the
State Government. This particular order is being made
further noting that respondent no. 5 has acted on the .
basis of the commitment made to it by the State
E Government in the Vibrant Gujarat Summit, and in
furtherance of the industrial development policy of the
State. It is also relevant to note that respondent No.5 had
made an application to the Collector in the year 2009 for
permitting the purchase of the land, and has been waiting
F
to set up its industry for the last four years. In the
circumstances, although the action of the State
Government is held to be clearly arbitrary and untenable,
the order of this Court will be appropriate to do complete
justice in the matter. [para 69] (135-E-H; 136-A-H; 137-A]
G
3.2 (a) The order dated 18.12.2009 passed by the
Government of Gujarat and by the Collector of Kutch on
15.1.2010, are held to be arbitrary and bad in law.
(b) The impugned judgment and order passed by the
H High Court is set-aside.
DIPAK BABARIA & ANR. v. STATE OF GUJARAT &
81
ORS.
(c) In the facts and circumstances of the case, the
A
sale of the land by respondent no. 4 to respondent no. 5
is held to be bad in law. The land involved in the case is
held to have vested in the State Government free from all
encumbrances, and the amount of Rs. 1.20 crores paid
by respondent no. 5 to respondent no. 4 is treated as full
B
payment towards the compensation payable by the State
to respondent no. 4
(d) If respondent no. 5 is interested in its proposed
project, it shall pay an amount of Rs. 3.15 crores to the
C
State Government within three months. On such a
payment being made, an order of allotment of the land to
respondent no. 5 will be issued by the State Government.
The further activities of respondent no. 5 on the
concerned parcel of land will start only after this payment
is made, and in the event the amount is not so paid, the
D
Government will proceed to take further steps to dispose
of the land having regard to the use of the land. [para 70)
[137-B-F]
Indian Council for Enviro-Legal Action Vs. Union of India
E ..
& Ors. 1996 (1) Suppl. SCR 507 = 1996 (5) SCC 281, Centre
for Public Interest Litigation and Ors. Vs. Union of India and
Ors. 2012 (3) SCR 147 = 2012 (3) SCC 1; Noida
Entrepreneurs Association Vs. Noida and Ors. 2011 (8) SCR
25 = 2011 (6) SCC 508; Chandra Bansi Singh Vs. State of F
Bihar 1985 (1) SCR 579 =
19~4 (4) SCC 316; Manohar Joshi
Vs. State of Maharashtra and Ors. 2011 (12) SCR 781 = 2012
(3) SCC 619; Bhaurao Dagdu Para/kar Vs. State of
Maharashtra 2005 (2) Suppl. SCR 774 = 2005 (7) SCC 605;
Shrisht Dhawan Vs. Shaw Bros 1991 (3) Suppl. SCR 446 = G
1992 (1) SCC 534; Khawaja Vs. Secy. of State for Home
Deptt. 1983 (1) All ER 765; Deewan Singh & Ors. Vs.
Rajendra Pd. Ardevi & Ors. 2007 (1) SCR 30 = 2007(10) SCC
528; DLi= Qutab Enclave Complex Educational Charitable
Trust Vs. State of Haryana and Ors. 2003 (2) SCR 1 = 2003
H
82
SUPREME COURT REPORTS
[2014] 2 S.C.R.
A (5) SCC 622; Ujjagar Singh Vs. Collector 1996 (4) Suppl.
SCR 239 = 1996 (5) SCC 14; Jasbir Singh Chhabra Vs. State
of Punjab 2010 (4) SCC 192; Natural Resources Allocation,
In Re: Special Reference (1) of 2012 2012 (9) SCR 311 =
2012(10) SCC 1; Kasturi Lal Lakshmi Reddy Vs. State of J&K
B 1980 (3)SCR 1338 =1980 (4) SCC 1; Prakash Amichand
Shah Vs. State of Gujarat 1985 (3) Suppl. SCR 1025 =1986
(1) sec 581 - cited.
Case Law Reference:
c
1996 (1) Suppl. SCR 507
cited
para 32
. 2012 (3) SCR 147
cited
para 33
2011 (8) SCR 25
cited
para 33
D
1985 (1) SCR 579
cited
para 34
2011 (12) SCR 781
cited
para 34
2005 (2) Suppl. SCR 774
cited
para 34
1991 (3) Suppl. SCR 446
cited
para 34
E
1983 (1) All ER 765
cited
para 34
2007 (1) SCR 30
cited
para 35
2003 (2) SCR 1
cited
para 41
F
1996 (4) Suppl. SCR 239
cited
para 41
201 o (4) sec 192
cited
para 42
2012 (9) SCR 311
cited
para 42
G
1980 (3) SCR 1338
cited
para 42
1985 (3) Suppl. SCR 1025 cited
para 44
[1988] AC 858
referred to
Para 52
(1875) 1 Ch D 426431
referred to
para 53
H
DIPAK BABARIA & ANR. v. STATE OF GUJARAT &
83
ORS.
AIR 1936 PC 253
referred to
para 53
1954 SCR 1038
referred to
para 53
AIR 1964 SC 358
referred to
para 53
1999 (2) Suppl. SCR 754
referred to
para 53
2001 (2). SCR 399
referred to
para 53
2008 (4) SCR 822
referred to
para 53
1952 SCR 135
referred to
Para 57
1978 (2) SCR 272
referred to
Para 57
1966 SCR 982
relied on
para 61
1995 (2) Suppl. SCR 637
relied on
para 61
2001 (3) SCR 1146
referred to
Para 62
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 836
of 2014.
From the Judgment and Order dated 30.08.2012 of the
High Court of Gujarat at Ahmadabad in Writ Petition (PIL) No.
44 of 2012.
Huzefa Ahmadi, Anirudh Sharma, Yashvardhan Roy,
Rohan Sharma for the Appellants.
Krishnan Venugopal, V. Giri, T.R. Andhyarujina, Udai V.S.
Rathore (for Vishal Gupta), Mayuri Raghuvanshi, Prakash Jani,
Preetesh Kapur, Hemantika Wahi, Jesal Wahi, Jatin Zaveri for
the Respondents.
The Judgment of the Court was delivered by
H.L. GOKHALE J. 1. Leave Granted.
2. This appeal by Special Leave seeks to challenge the
judgment and order dated 30.8.2012 rendered by a Division
A
B
c
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A Bench of the Gujarat High Court dismissing Writ Petition (PIL)
No.44 of 2012 filed by the appellants herein. The Writ Petition
had various prayers, but essentially it sought to challenge the
permission granted by the Collector, Bhuj, to sell certain parcels
of agricultural land situated in district Kutch, which were said
B to have been purchased earlier by the respondent No.4 herein,
one lndigold Refinery Limited of Mumbai, for industrial purpose
in favour of respondent No.5 i.e. one Alumina Refinery Limited,
Navi Mumbai, as being impermissible under the provisions of
the Gujarat (earlier 'Bombay' prior to the amendment in its
c application in the State of Gujarat) Tenancy and Agricultural
Lands (Vidarbha Region and Kutch Areas) Act, 1958 (Tenancy
Act, 1958 for short). It was submitted that under Section 89A
of this Act, agricultural land can be permitted to be sold by an
agriculturist to another person for industrial purpose provided
0 the proposed user is bona-fide. In the event, the land is not so
utilised by such a person for such purpose, within the period
as stipulated under the act, the Collector of the concerned .
district has to make an enquiry under sub-Section 5 thereof,
give an opportunity to the purchaser with a view to ascertain
the factual situation, and thereafter pass an order that the land
E shall vest in the State Government on payment of an
appropriate compensation to the purchaser which the Collector
may determine. It was contended that there was no provision
for any further transfer of agricultural land from one industrial
purchaser to any third party, once again, for industrial purpose
F when the first purchaser of agricultural land had defaulted in
setting up the industry. Apart from being in breach of the law,
the transaction was stated to be against public interest, and a
mala-fide one resulting into a serious loss to the public
exchequer. The Writ Petition criticised the role of the Collector
G and the Revenue Minister of the State Government, and sought
an inquiry against them in the present case, and also a direction
to the state authorities to resume the concerned land.
3. The impugned judgment and order rejected the said writ
H petition on two grounds, firstly that there was delay in initiating
DIPAK BABARIA & ANR. v. STATE OF GUJARAT &
85
ORS. [H.L. GOKHALE, J.]
the said Public Interest Litigation (PIL), and that the writ
A
petitioner had suppressed the material facts before the Court
concerning the investment claimed to have been made by the
respondent No.5.
4. The writ petition, and now this appeal raise the issues
with respect to the underlying policy and purpose behind the
relevant provisions of the Tenancy Act, 1958. In that connection,
it also raises the issue with respect to the duties of the revenue
officers on the spot, such as the Collector, the importance of
B
the role of senior administrative officers of the State
Government, and whether a Minister of the Government can
C
direct the administrative officers and the Collector to act
contrary to the provisions and policy of the statute. The
Secretary of the Department of Revenue of the Government of
Gujarat, and the Collector of District Kutch at Bhuj are joined
as respondent Nos. 2 and 3 to this appeal.
The facts leading to this appeal are as follows:-
5. It is pointed out by the appellants that the respondent
No.4 lndigold Refinery Ltd. (lndigold for short) which is a
company having its office in Mumbai, purchased eight parcels
of land owned by one Virji Jivraj Patel and Jayaben Virji Patel
residing at Bankers Colony, Bhuj, admeasuring in all 39,·acres
and 25 gunthas (i.e. roughly 40 acres) by eight sale deeds all
dated 30.1.2003, for a consideration of about Rs.70 lakhs.
These eight sale deeds are supposed to have been signed for
respondent No.4 lndigold by one Hanumantrao Vishnu Kharat,
its Chairman-cum-Managing Director, The lands are situated
D
E
F
in villages Kukma and Moti Reldi in the district of Kutch. The
sale deeds indicated that the purchaser had purchased these
lands for industrial purpose, and that the purchaser will obtain
G
the permission from the Deputy Collector, Bhuj for purchasing
the said land within one month from the date of those sale
deeds. The respondent No.4 is said to have applied for the
necessary permission under Section 89A of the Tenancy Act,
1958 on 31.1.2003, and the Collector of Bhuj is stated to have
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A given the requisite certificate of purchase of the lands under
sub-section (3) (c) (i} of the said section. It appears that
thereafter no steps were taken by respondent No.4 to put up
any industry on the said land.
6. Five years later, the respondent No.4 is stated to have
8 applied on 6.12.2008 to the Deputy Collector at Bhuj for
permission to sell these lands. The Collector of Bhuj sought the
guidance from the Revenue Department, and in view of the
direction of the Revenue Department, the Deputy Collector
granted the permission on 15.1.2010, to sell the lands to
C respondent No. 5 treating it as a special case, and not to be
treated as a precedent. Thereafter, the respondent No.4
conveyed the concerned lands to respondent No.5 by sale
deed dated 19.1.2010. Respondent No.5 also obtained
permission from the Industries Commissioner on 8.3.2010 for
D putting up the industry. Subsequently, the Collector issued the
certificate as required under Section 89A (3) (c) (i) of the
Tenancy Act, 1958, on 21.5.2010, that respondent No.5 had
purchased the land for a bona-fide purpose. The permission
for a non-agricultural user was given to the respondent No.5 on
E 5.1.2011. The Gujarat Mineral Development Corporation
(GMDC) - which got itself impleaded in this appeal as
respondent No.6 has entered into a Memorandum of
Understanding (MOU for short) on 30.11.2011 with Mis Earth
Refinery Pvt. Ltd. which is the holding company of respondent
F No.5 to purchase 26% of equity in a joint venture company to
be set up by them, and which will own the industry.
7. It appears that a Gujarati Daily "Sandesh" in an article
dated 20.8.2011 reported that there was a huge loss to the
State exchequer in the sale of these lands to a private company
G almost to the tune of Rs.250 crores. The newspaper reported
that although the respondent No.4 had purchased the
concerned lands at village Kukma and Moti Reildi on
30.1.2003, no industrial activity was started till 2008 as required
by the law, and after a long period of five years the land was to
H
DIPAK BABARIA & ANR. v. STATE OF GUJARAT &
87
ORS. [H.L. GOKHALE, J.]
be sold to Alumina Refinery Limited (Alumina for short). One A
Mr. Nitin Patel is the Managing Director of this Alumina, and
Mr. Nilesh Patel who is his brother is its Director (Legal and
Human Resources). The newspaper stated that Alumina had
written a letter to the Chief Minister Mr. Narendra Modi, on
18.6.2009 that the Government should grant the necessary B
.permission. It is further stated that on the said proposal being
placed before them, the officers of the Revenue Department
had placed negative remarks, and yet a permission was
granted to sell 2 lakh sq. yds. of land at a throw away price
when the rate of land was Rs.3500 - 4000 per sq. yd .. It was c
alleged that there was a direct involvement of the Chief Minister
in this scam, and with a view to avoid Lokayukata enquiry,
although a commission was appointed under Hon'ble Mr.
Justice M.B. Shah, a former Judge of Supreme Court of India
to enquire into a number of other controversial projects, this D
scam was excluded therefrom.
8. There was also a news item in another Daily "Kachchh
Mitra" on 1.2.2011 that the Alumina Refinery Limited was given
permission by breaching rules and regulations. The farmers of
the nearby villages were worried, and some 200 farmers had
E
protested against the proposal as it would affect their
agricultural activities due to pollution. It was stated that they had
sowed plants of tissue-culture Israeli dry-dates. They had
planted lacs of Kesar Mango trees. They were also cultivating
crops of Papaiya, Aranda, Wheat, Cotton, groundnuts etc. If the
F
refinery work starts in this area, it will affect the agricultural work
badly. There was also a fear that the blackish and toxic air of
the factory will spoil the plants.
9. All this led the appellants to file the earlier mentioned
writ petition, for the reliefs as prayed. The petition enclosed the G
above referred news reports, as also the information obtained
through enquiry under the Right to Information Act, 2005 by one
Shri Shashikant Mohanlal Thakker of Madhapur Village of
Taluka Bhuj. This information contained the documents
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A
incorporating the file notings of the revenue department and the
orders granting permission. The aforesaid writ petition was filed
on 28.2.2012. An affidavit in reply to the writ petition was filed
by above referred Nitin Patel on behalf of respondent No.5, and
the appellants filed a rejoinder. Respondent No.5 filed a surB
rejoinder thereto. The respondent No.1 State of Gujarat filed
an affidavit in reply on 16.8.2012, and the petitioner filed a
rejoinder to the Government's affidavit on 10.11.2012. After the
writ petition was filed on 28.2.2012 an order of status-quo was
granted on 1.3.2012, and it continued till the dismissal of the
c petition on 30.8.2012 when the order of stay was vacated.
However, when the present SLP was filed, an order of statusquo was granted by this Court on 4.1.2013, and it has continued
till date.
Relevant provisions of the Statute:-
D
10. In as much as we are concerned with the provisions
contained in Section 89 and Section 89A of the Tenancy Act,
1958, it is necessary to reproduce the two sections in their
entirety. These two sections appear in Chapter VIII of the
E
Tenancy Act, 1958. The sections read as follows:-
F
"CHAPTER VIII
RESTRICTIONS ON TRANSFERS OF AGRICULTURAL
LANDS
AND ACQUISITION OF HOLDINGS AND LANDS
89 Transfers to non-agriculturists barred.-
Transfers to (1) Save as provided in this Act,
G
non-agriculH
turists barred
(a)
no sale (including sales in execution of a decree of
a Civil Court or for recovery of arrears of land
revenue or for sums recoverable as arrears of land
DIPAK BABARIA & ANR. v. STATE OF GUJARAT &
89
ORS. [H.L. GOKHALE, J.]
revenue), gift exchange or lease of any land or
A
interest therein, or
(b)
no mortgage of any land or interest therein, in which
the possession of the mortgaged property is
delivered to the mortgagee,
B
shall be valid in favour of a person who is not an
agriculturist or who being an agriculturist cultivates
personally land not less than. three family holdings whether
as owner or partly as tenant or who is not an agricultural
labourer:
Provided that the Collector or an officer authorised by the
State Government in this behalf may grant permission for
such sale, gift, exchange, lease or mortgage, in such
circumstances as may be prescribed:
[Provided further that no such permission shall be granted,
where land is being sold to a person who is not an
agriculturists for agricultural purpose, if the annual income
of such person from other source exceeds five thousand
rupees.]
(2) Nothing in this section shall be deemed to prohibit the
sale, gift, exchange or lease of a dwelling house or the site
thereof or any land appurtenant to it in favour of an
agricultural labourer or an artisan.
(3) Nothing in this section shall apply to a mortgage of any
land or interest therein effected in favour of a co-operative
society as security for the land advanced by such society.
c
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(4) Nothing in section 90 shall apply to any sale made
G
under sub-section (I).
89A. Sale of land for bonafide industrial
purpose permitted in certain cases:-
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A
(1) Nothing in section 89 shall prohibit the sale or the
agreement for the sale of land for which no permission is
required under sub-section (1) of section 65B of the
Bombay Land Revenue Code, 1879 (Born. V of 1879) in
favour of any person for use of such land by such person
B
for a bonafides industrial purpose:
c
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G
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Provided that-
(a)
the land is not situated within the urban
agglomeration as defined in clause (n) of section
2 of the Urban Land (Ceiling and Regulation) Act,
1976 (33 of 1976),
(b)
where the area of the land proposed to be sold
exceeds ten hectares, the person to whom the land
is proposed to be sold in pursuance of this subsection shall obtain previous permission of the
Industries Commissioner, Gujarat State, or such
other officer, as the State Government may, by an
order in writing, authorise in this behalf.
(c)
the area of the land proposed to be sold shall not
exceed four times the area on which construction
for a bonafide industrial purpose is proposed to be
made by the purchaser:
Provided that any additional land which may be
required for pollution control measures or required
under any relevant law for the time being in force
and certified as such by the relevant authority under
that law shall not be taken into account for the
purpose of computing four times the area.
(d)
where the land proposed to be sold is owned by a
person belonging to the Scheduled Tribe, the sale
shall be subject to the provisions of section 73AA
of the Bombay Land Revenue Code, 1879 (Born.
DIPAK BABARIA & ANR. v. STATE OF GUJARAT &
91
ORS. [H.L. GOKHALE, J.]
V of 1879).
A
(2)
Nothing in the Section 90 shall apply to any sale
made in pursuance of subsection (1).
(3)
(a) Where the land is sold to a. person in pursuance
B
of sub-section (1) (hereinafter referred to as "the
purchaser"), he shall within thirty days from the date
of purchase of the land for bonafides industrial
purpose, send a notice of such purchase in such
form alongwith such other particulars as may be
prescribed, to the Collector and endorse a copy c
thereof to the Mamlatdar.
(b) Where the purchaser fails to send the notice and
other particulars to the Collector under clause (a)
within the period specified therein, he shall be liable D
to pay, in addition to the non-agricultural
assessment leviable under this Act, such fine not
exceeding two thousand rupees as the Collector
may subject to rules made under this Act, direct.
(c) Where, on receipt of the notice of the date or E
purchase for the use of land for a bonafides
industrial purpose and other particulars sent by the
purchaser under clause (a), the Collector, after
making such inquiry as he deems fitF
(i) is satisfied that the purchaser of such land has
validly purchased the land for a bonafide industrial
purpose in conformity with the provisions of subsection (1), he shall issue a certificate to that effect
to the purchaser in such form and with in such time G
as may be prescribed.
(ii) is not so satisfied, he shall, after giving the
purchaser an opportunity of being heard, refuse to
issue such certificate and on such refusal, the sale
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of land to the purchaser shall be deemed to be in
contravention of section 89.
(d) (i) The purchaser aggrieved by the refusal to
issue a certificate by the Collector under subclause (ii) of clause (c) may file an appeal to the
State Government or such officer, as it may, by an
order in writing, authorise in this behalf.
(ii) The State Government or the authorised officer
shall, after giving the appellant an opportunity of
being heard, pass such order on the appeal as it
or he deems fit.
(4)
The purchaser to whom a certificate is issued under
sub-clause (i) of clause (c) of sub-section (3), shall
commence industrial activity on such land within
three years from the date of such certificate and
commence production of goods or providing of
services within five years from such date:
Provided that the period of three years or, as the
case may be, five years may, on an application
made by the purchaser in that behalf, be extended
from time to time, by the State Government or such
officer, as it may, by an order in writing authorise
in this behalf, in such circumstances as may be
prescribed.
(5)
Where the Collector, after making such inquiry as
he deems fit and giving the purchaser an
opportunity of being heard, comes to a conclusion
that the purchaser has failed to commence
industrial activity or production of goods or
providing of services within the period specified is
. clause (b) of sub-section (4), or the period extended
under the proviso to that clause, the land shall vest
in the State Government free from all
DIPAK BABARIA & ANR. v. STATE OF GUJARAT &
93
ORS. [H.L.