# ESSCO FABS PVT. LTD. & ANR v. STATE OF HARYANA & ANR

- **Citation:** [2008] 15 S.C.R. 779
- **Court:** Supreme Court of India
- **Decided:** 2008-11-07
- **Case number:** Civil Appeal No. 6580-81 of 2008
- **Bench:** C.K. Thakker, D.K. Jain
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/essco-fabs-pvt-ltd-anr-v-state-of-haryana-anr-23983
- **Pages:** 31

## Headnote

Land Acquisition Act, 1894:
A
B
ss. 17(1),(2) and (4) rlw ss. 4(1) and 6(1) and s.5-A -
c
Acquisition of land -
State Government invoking urgency
clause u/s 17 and dispensing with inquiry and hearing of
objections uls 5A -
HELD: Before exercise of power of
eminent domain, an opportunity of hearing must be afforded
to owner of property -
Even in cases of ' urgency; or 0
'unforeseen emergency' within the meaning of sub-ss. (1)
and (2) of s. 17, enquiry contemplated by s. 5-A cannot ipso
facto be dispensed with - It is only when the Government
makes a declaration under sub-s.(4) of s.17 that it becomes
unnecessary to take recourse to procedure uls 5-A -
On
E
facts, no urgency clause could have been invoked nor could
inquiry and hearing of objections uls 5-A be dispensed with
-
Resultantly, actions of the government dispensing with
inquiry and hearing of objections u/s. 5-A, and issuance of
final notification uls 6 quashed.
The respondent-State Government, on 15.12.1982
issued a notification u/s 4(1) of the Land Acquisition Act,
1984 in respect of the lands in question. However, as the
acquisition proceedings could not be completed, the
F
lands were released. Thereafter, a company engaged in
G '
export business (the appellant in C.A. No. 6580 of 2008),
purchased some of the said lands for expansion of its
Export Orient Unit, and made an application on 6.6.1991
for change of user of the land. The said application was
779
H ;
780
SUPREME COURT REPORTS
[2008] 15 S.C.R.
A rejected on the ground that the land was likely to be
required for public purp.ose. The case of the appellant in
C.A. No. 6581 of 200Q w~s that it being ,a Cooperative
Housing Society, the State Government released some of
the !ands in question in its favour- in 1985. The Society
B invested huge amount in developing the land. On 1.8.2001
the State Government again issued a notification u/s 4(1)
of the Act in respect of the lands in question for
development and construction of a link road. The State
'
Government, by applying urgency clause u/s.17 of the
c Act, dispensed with the inquiry and hearing of objections
u/s.5·A of the Act and on the next day, i.e. on 2.8.2001,
issued the declaration u/s 6(1) of the Act. Both, the export
company as also the Housing Cooperative Society,
challenged the acquisition proceedings on the grounds
D that they were denied their valuable right of filing
objections u/s 5·A, and that it was not a case for invoking
the provisions of s.17 of the Act. Since the writ
i
petitioners' plea did not find favour with the High Court,
they filed the appeals.
IE
Allowing the appeals, the Court
HELD: 1.1. It is in exercise of power of eminent domain
that a sovereign may acquire property which does not
belong to him. As a general rule, before exercise of power
of eminent domain, law must provide an opportunity of
'f
F hearing against the proposed acquisition. Even without
a specific p_rovision to that effect, general law requires
raising of objections by and affording opportunity of
hearing to the owner of the property. Section SA of The
G Land Acquisition Act, 1923 contains such a provision.
Afte~ ·issuance of preliminary notification u/s 4 and or
before 'final n~tification u/s 6 of the Act, the appropriate
'
......
Goxernment is enjQined to hear person interested in the
r
}-,
property before he is deprived of his ownership rights.
H
[Para 27] [798·C·E]
ESSCO FASS PVT. LTD. & ANR. v. STATE OF HARYANA 781
& ANR.
1.2. There may be cases of 'urgency' or 'unforeseen
A
A
emergency' which may brook no delay for acquisition of .
such property in larger public interest. The Legislature,
therefore, thought it appropriate to deal with such cases
of exceptional nature and in its wisdom enacted Section
17. Whereas sub-section (1) of Section 17 deals with
B
cases of 'urgency', sub-section (2) of the said section
covers cases of 'sudden change in the channel of any
navigable river or other unforeseen emergency'. But even
in such cases of 'urgency' or 'unforeseen eme

## Text

_Characters 0–39,961 of 59,391. This is a partial read: ask again with offset=39961 for what follows._

[2008] 15 S.C.R. 779
ESSCO FABS PVT. LTD. & ANR.
v.
STATE OF HARYANA & ANR.
(Civil Appeal No. 6580-81 of 2008)
NOVEMBER 7, 2008
[C.K. THAKKER AND D.K. JAIN, JJ.]
Land Acquisition Act, 1894:
A
B
ss. 17(1),(2) and (4) rlw ss. 4(1) and 6(1) and s.5-A -
c
Acquisition of land -
State Government invoking urgency
clause u/s 17 and dispensing with inquiry and hearing of
objections uls 5A -
HELD: Before exercise of power of
eminent domain, an opportunity of hearing must be afforded
to owner of property -
Even in cases of ' urgency; or 0
'unforeseen emergency' within the meaning of sub-ss. (1)
and (2) of s. 17, enquiry contemplated by s. 5-A cannot ipso
facto be dispensed with - It is only when the Government
makes a declaration under sub-s.(4) of s.17 that it becomes
unnecessary to take recourse to procedure uls 5-A -
On
E
facts, no urgency clause could have been invoked nor could
inquiry and hearing of objections uls 5-A be dispensed with
-
Resultantly, actions of the government dispensing with
inquiry and hearing of objections u/s. 5-A, and issuance of
final notification uls 6 quashed.
The respondent-State Government, on 15.12.1982
issued a notification u/s 4(1) of the Land Acquisition Act,
1984 in respect of the lands in question. However, as the
acquisition proceedings could not be completed, the
F
lands were released. Thereafter, a company engaged in
G '
export business (the appellant in C.A. No. 6580 of 2008),
purchased some of the said lands for expansion of its
Export Orient Unit, and made an application on 6.6.1991
for change of user of the land. The said application was
779
H ;
780
SUPREME COURT REPORTS
[2008] 15 S.C.R.
A rejected on the ground that the land was likely to be
required for public purp.ose. The case of the appellant in
C.A. No. 6581 of 200Q w~s that it being ,a Cooperative
Housing Society, the State Government released some of
the !ands in question in its favour- in 1985. The Society
B invested huge amount in developing the land. On 1.8.2001
the State Government again issued a notification u/s 4(1)
of the Act in respect of the lands in question for
development and construction of a link road. The State
'
Government, by applying urgency clause u/s.17 of the
c Act, dispensed with the inquiry and hearing of objections
u/s.5·A of the Act and on the next day, i.e. on 2.8.2001,
issued the declaration u/s 6(1) of the Act. Both, the export
company as also the Housing Cooperative Society,
challenged the acquisition proceedings on the grounds
D that they were denied their valuable right of filing
objections u/s 5·A, and that it was not a case for invoking
the provisions of s.17 of the Act. Since the writ
i
petitioners' plea did not find favour with the High Court,
they filed the appeals.
IE
Allowing the appeals, the Court
HELD: 1.1. It is in exercise of power of eminent domain
that a sovereign may acquire property which does not
belong to him. As a general rule, before exercise of power
of eminent domain, law must provide an opportunity of
'f
F hearing against the proposed acquisition. Even without
a specific p_rovision to that effect, general law requires
raising of objections by and affording opportunity of
hearing to the owner of the property. Section SA of The
G Land Acquisition Act, 1923 contains such a provision.
Afte~ ·issuance of preliminary notification u/s 4 and or
before 'final n~tification u/s 6 of the Act, the appropriate
'
......
Goxernment is enjQined to hear person interested in the
r
}-,
property before he is deprived of his ownership rights.
H
[Para 27] [798·C·E]
ESSCO FASS PVT. LTD. & ANR. v. STATE OF HARYANA 781
& ANR.
1.2. There may be cases of 'urgency' or 'unforeseen
A
A
emergency' which may brook no delay for acquisition of .
such property in larger public interest. The Legislature,
therefore, thought it appropriate to deal with such cases
of exceptional nature and in its wisdom enacted Section
17. Whereas sub-section (1) of Section 17 deals with
B
cases of 'urgency', sub-section (2) of the said section
covers cases of 'sudden change in the channel of any
navigable river or other unforeseen emergency'. But even
in such cases of 'urgency' or 'unforeseen emergency',
enquiry contemplated by Section SA cannot ipso facto be c
dispensed with which is clear from sub-s.(4) of s.17. lfthe
Government intends to acquire land in cases of 'urgency'
or 'unforeseen emergency' falling under or covered by
sub-sections (1) and (2) of Section 17 of the Act, it is still
required to follow procedure u/s SA of the Act before D
issuance of final notification u/s 6 of the Act. It is only
when the Government also makes a declaration under
~
sub-s. (4) of s.17 that it becomes unnecessary to take
recourse to procedure u/s.SA of the Act. [Para 27-28 and
33] [798-F-H; 799-A; 801-A-B]
E
Nandeshwar Prasad & Anr. v. State of Uttar Pradesh &
Ors, (1964) 3 SCR 42S, relied on.
1.3. The legislative scheme is amply clear which
merely enables the appropriate Government to issue the
It
notification under sub-section (4) of Section 17 of the Act
dispensing with inquiry under Section SA if the
Government intends to exercise the said power. The use
of the expression 'may' in sub-section (4) of Section 17
leaves no room of doubt that it is discretionary power of G
the Government to direct that the provisions of Section
SA would not apply to the cases covered by sub-section
•
(1) or (2) of Section 17 of the Act. It would not be correct
A,
to say that once a case is covered by sub-section (1) or
(2) of Section 17 of the Act, sub-section (4) of Section 17
H
782
Sl)PREME COURT REPORTS
[2008] 15 S.C.R.
A would necessarily apply and there is no question of
holding inquiry or hearing objections uls. 5A of the Act.
J.._
Such a view will make sub-section (4) of Section 17 totally
otiose, redundant and nugatory. [Para 44 and 45] [807-AD]
B
Union of India & Ors. v. Mukesh Hans, (2004) 8 SCC 14,
relied on.
Jai Narain & Ors. v. Union of India & Ors. 1995 Suppl. 5
'
SCR 769 = (1996) 1 SCC 9; Chameli Singh & Ors., v. State
c of U.P. & Anr. 1995 Suppl. (6) SCR 827 =(1996) 2 SCC 549
and First Land Acquisition Collector & Ors. v. Nirodhi Prakash
Gangoli & Anr., 2002 ( 2 ) SCR 326 = (2002) 4 SCC 160,
referred to.
1.4. In the instant case, the facts are eloquent. Initial
I
D
action of acquisition of land was taken as early as in 1982
but the proceedings lapsed. In 1991, when the appellant
company made an application praying for change of user
of land, it was rejected on the ground that the land was
E likely to be required for public purpose. Nothing,
however, was done for about a decade. It is only in 2001
that again a notification u/s 4 was issued and urgency
clause was applied. In the facts and circumstances of the
case, no urgency clause could have been invoked by the
F respondents nor the inquiry and hearing of objections
provided by Section 5A of the Act could have been
y
dispensed with. Therefore, the action of the respondentauthority of dispensing with inquiry u/s 5-A and issuance
of final notification uls 6 of the Act is quashed. It is,
G
however, open to the authorities to take appropriate
action after following normal procedure laid down in the
Act. (Para 47 and 52] [807-H; 808-A, B; 809-E]
Union oflndia & Ors. v. Mukesh Hans, (2004) 8 SCC 14,
·>.
relied on.
)...
H
s
ESSCO FASS PVT. LTD. & ANR. v. STATE OF HARYANA 783
& ANR.
•
\A
Case Law Reference:
/\
(1964) 3 SCR 425
relied on
para 31
(2004) a sec 14
relied on
para 35
1995 (5) Suppl. SCR 769 referred to
para 39
B
2002 (2) SCR 326
referred to
para 42
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6580 of 2008.
From the final Judgment and Order dated 2.4.2004 of the c
High Court of Punjab and Haryana at Chandigarh in C.W.P. No.
1853 of 2003.
WITH
C.A. No. 6581 of 2008 & Contempt Petition (C) No. 30 of 2007
D
in C.A. No. 6580 of 2008.
J.L. Gupta and Ranjit Kumar, Sr. Advs., Ashok Mathur, Gian
Singh, Kusum Singh and Mahinder Singh Dahiya for the
Appellants.
E
Manjit Singh, Addi. Adv. Gen., Annop G. Choudhary and
June Choudhary, Sr. Adv., Govind Goel and T.V. George for the
Respondents.
The Judgment of the Court was delivered by
F
C.K. THAKKER, J. 1. Leave granted.
2. Both these appeals are filed by the appellants being
aggrieved and dissatisfied with the judgment and order dated
G
April 02, 2004, passed by the High Court of Punjab & Haryana
in Civil Writ Petition Nos. 1853 of 2003 and 2077 of 2002.
3. To appreciate the controversy raised in the present
appeals, relevant facts in nutshell may be noted.
H
· 784
· SUPREME COURT REPORTS
[2Q08). 15 S._C.R.
A
4. According to the appellant Essco Fabs Pvt. Ltd.
('Essco' for short), the_ Government of Haryana intended to
acquire land for public purpose, viz., for utilization of land as
.residential, commercial· ?nd industrial area in Sector Nos. 11,
12 and 25 Part-II by Haryana Urban Development Authority
s ('HUDA' for short). Forth·e said ·purpose, 'the Government
issyed.a notification under sub-section (1) of Section 4 of the
Land Acquisition Act, 1894 (hereinafter referred to as 'the Act')
on December 15, 1982. The land mentioned in the said
notification situated in village Kheri Nangal was sought to be
C acquired. A final notification under Section 6 of the Act was
issued on June 20, 1984. However, the land acquisition
proceedings could not be completed within the stipulated
period and the notifications lapsed and the land stood released.
5. It was the case of Essco that it bought the land which
D was sought to be acquired earlier for expansion of its Export
Unit. According the appella.nt, it is engaged in manufacturing
and exporting rugs, cushions, bed-spreads, bath mats, fabrics,
kitchen towel, aprons, pot hqlders, .gloves,_ mitten, curtains,
napkins, carpets, etc. It is Export Oriented Unit and earns
E foreign exchange by export of goods manufactured in its unit.
In the year 1992, it exported materials over Rs.2 crores. The
appellant has stated that on June 6, 1991, it made an
application to the Director, Town & Country Planning, Haryana
for permission for change of user of land. All necessary
F documents were appended to the application. The Director,
however, vide an order dated September 5, 1991, rejected the
permission on several grounds. One of the grounds weighed
with the Director for refusing the permission was that the land
in question was proposed to be acquired. The appellant has
· G produced a copy of the application as also an order of rejec;;tion
thereof in the present proceedings. But even thereafter,no
proceedings.for acquisition of land were initiated for many
. years.
H
6. On August 1, 2001 i.e. after about twenty years of the
v
.ESSCO FASS PVT. LTD. & ANR. v. STATE OF HARYANA 785
& ANR. [C.K. THAKKER, J.]
first notification of 1982 and nine years after rejection of prayer
A
of the appellant for change of user, the Government of Haryana
again issued notification under sub-section ( 1) of Section 4 of
the Act for acquisition of land for the development and utilization
for construction of road connecting Sanauli Road with G.T. Road
for Sector 25 Part-II B, Urban Estate Panipat by HUDA. The
B
land of the appellant situated in village Kheri Nangal was sought
to be included in the notification. Moreover, 'urgency clause'
under Section 17 of the Act was applied and a valuable right
of raising objections under Section 5-A of the Act was taken
away in an arbitrary manner. On the very next day i.e. on August c
2, 2001, final notification under Section 6 of the Act was issu~d
by the Government.
7. It is the case of the appellant that the preliminary
notification under sub-section ( 1) of Section 4 of the Act was
0
required to be published in the manner laid down in the Act.
But it had not been published before issuance of final
notification under Section 6 of the Act. The final notification was,
therefore, illegal and the appellant could not be deprived of h.is
property in a manner not known to law. The right of the appellant
. to own, possess and enjoy the property is not merely a
E
Common Law right but also constitutional right under Article
300A of the Constitution which has a 'flavour of fundamental
right'. The acquisition proceedings, being not in consonance
with law were vitiated and liable to be quashed.
F
8. The appellant, hence, filed Civil Writ Petition No. 1853
of 2003 in the High Court of Punjab & Haryana by invoking
Article 226 of the Constitution praying therein for quashing and
setting aside acquisition proceedings. The High Court
entertained the petition and granted status quo with regard to
G
possession of the land in question. Finally, however, by the
impugned judgment it dismissed the petition. The said order
is challenged by the appellant in this Court.
9. The other appeal is filed by the Panipat Teachers
H
786
SUPREME COURT REPORTS
[2008] 15 S.C.R.
A
(Recognized Schools)· Housing Co-operative Society Ltd.
('society' for short) challenging the acquisition proceedings. It
)...
was the case of the society that pursuant to the representation
made by the society, the State Government released 53 kanals
and 8 marlas of land by executing an agreement dated October
B
19, 1985 and by granting land in favour of the society on
conditions mentioned in the agreement. Possession of land
was handed over to the society. The land was demarcated and
was carved out into plots reserving requisite space for school,
parks, temple, overhead water tank, roads, green belt etc. The
\.
c society got the site plan designed strictly in accordance with
HUDA Rules. The society invested huge amount, approximately
Rs.26 lakhs, for developing the land laying down sewer pipe
lines, RCC Water pipe lines, construction of roads and
boundary walls etc. The site plan, however, has not been cleared
D by the office of the Director, Town & Country Planning, Haryana
despite numerous attempts by the appellant-society. It is
alleged by the society that the matter was kept pending for
...,,
oblique and ulterior purposes on lame and untenable excuses.
It is also stated by the society that HUDA published public
E
notice in 'Daily Bhaskar' dated November 10, 2000 demanding
development charges thereby acknowledging that the society's
land has been rightly developed for teachers' colony. The public
notice informed and instructed those land/plot owners who were
in arrears to pay all the balance development charges and
F
outstanding dues. No dues were shown as against the
appellant-society. Thus, there is nothing due and payable to
HUDA by the appellant.
10. Ignoring all these material facts and with a view to
cause serious prejudice to the appellant-society, a notification
G under sub-section (1) of Section 4 of the Act had been issued
by the State for acquisition of land.
11. We have already stated facts relating to the issuance
of preliminary notification, application of urgency clause under
H
Section 17 and issuance of final notification under Section 6
ESSCO FASS PVT. LTD. & ANR. v. STATE OF HARYANA 787
& ANR. [C.K. THAKKER, J.]
of the Act while narrating the facts in the first case of Essco. It
A
,...
is, therefore, not necessary to repeat all those facts in the
second matter.
12. The appellant-society, in the circumstances,
approached the High Court by filing Civil Writ Petition No. 2077
B
of 2002 which was also decided along with the petition of
Essco and the petition of the appellant-society also came to
be dismissed.
~
-I
13. Third writ petition (Civil Writ Petition No. 3324 of 2003)
was filed by M/s Lord Shiva Exports, Panipat which also met c
with the same fate. Lord Shiv Exports, however, has not
approached this Court.
14. Notices were issued by this Court and interim relief
was granted. Respondents thereafter appeared, affidavits and
D
further affidavits were filed and the matters were ordered to be
'I
posted for final hearing. That is how the matters are before us.
15. We have heard learned counsel for the parties.
16. The learned counsel for the appellants Essco and
E
Teachers' society have challenged the acquisition on several
grounds. It was contended that the land was not needed for
public purpose as set out in the notification of 2001 and, hence,
the acquisition is not legal or lawful. Moreover, initially an action
...
was taken for acquisition of land before more than a quarter
F
century in the year 1982. Final notification was also issued after
more than one and half year of preliminary notification, but even
thereafter, nothing was done by the State and the proceedings
lapsed. Again, in 1991, when Essco applied for change of user
of land, the prayer was turned down, inter alia, on the ground
that the land in question was proposed to be acquired for public G
purpose. Nothing was done by the State for about a decade.
Only in August, 2001, notification under Section 4 was issued.
It was strongly urged by the learned counsel for the appellants
that preliminary notification was issued on August 1, 2001 and
H
.788
SUPREME COURT REPORTS
[2008] 15 S. C.R.
A urgency clause was applied though there was no urgency at all.
The notification was published in the official gazette thereafter
and in two daily newspapers on August 10 and 12, 2001. Final
notification under Section 6, however, was issued immediately
on the next day i.e. on August 2, 2001, of the issuance of
B preliminary notification under sub-section ( 1) of Section 4. It
was contended that on the facts of the case, no urgency clause
could have been invoked. Even otherwise, the action was bad
and de hors the Act since the conditions laid down in subsection (4) of Section 17 of the Act have not been complied
~
c with inasmuch as there was neither grave urgency nor
unforeseen emergency. It was submitted that there was lethargy
on the part of officers of the Government in not taking steps for
more than twenty years. The State cannot take undue
advantage of its negligence or inaction and deprive the owners
D of their right to property in purported exercise of power of
eminent domain. The Act is an expropriatory legislation which
deprives a person of his property without his consent. The
provisions of the Act, hence, have to be construed strictly. It was
7'
submitted that Section 5A confers a valuable right on the
E
owners of land of submitting objections against proposed
acquisition and such right cannot be taken away or curtailed
by the State. On the facts of the case, invocation of urgency
clause was not only uncalled for being contrary to law but
otherwise arbitrary and unreasonable and on that ground also,
the proceedings are liable to be quashed. It was urged that the
F expression 'the date of publication' has been defined in subsection (1) of Section 4 of the Act. While construing the said
connotation under Section 17, same meaning as contemplated
under Section 4(1) has to be given. Since the final notification
under Section 6 had not been published as required by the Act
G after 'the last date of publication' of notification under Section
4(1 ), the action is unlaWful and is.liable to be set aside. It was
asserted that no notice as required by Section 9 of the Act had
been issued nor payment of 80 percent of the compensation
).._
as required by sub-section (3A) of Section 17 h_ad been paid.
H There was also total non-application of mind on the part of the
ESSCO FASS PVT. LTD. & ANR. v. STATE OF HARYANA 789
& ANR. [C.K. THAKKER, J.]
State Government in not considering the Government policy of A
granting exemption to functional units dealing with handloom
and other industries. On that count also, the proceedings are
liable, to be dropped.
17. On behalf of Teachers'- Society, the learned counsel
B
adopted all the contentions raised on behalf of Essco. The
learned counsel, however, further submitted that the society
"
prayed for allotment of land and the prayer was granted. An
agreement was entered into between the Authority and the
society, possession of land was handed over to the society, c
which has spent substantiai amount of several lakhs for ·
development. Necessary permission was sought so that
construction can be made which was also granted by the
Authorities, requisite charges which were to be paid had
already been paid and no dues had been shown so far as the . D
appellant- society is concerned and yet the impugned action
'
has been taken mala fide and with ulterior motive though the
land is not required for public purpose. It was also submitted
that even according to the authorities, lhe land of the appellantsociety does not come in 'road line'. It is situate at about 24
meters away (23.94 meters) from road line. It was, therefore,
E
submitted that the proceedings should be declared against the
provisions of law and may be quashed.
18. Learned counsel for the respondents, on the other
"
hand, submitted that the action of the authorities is legal, lawful
F
and in consonance with law. It was urged that the land was
required for public purpose, viz., for construction of road. For
acquisition of land, therefore, a notification was issued. It was
submitted that there is no element of mala fide or colourable
exercise of power which is clear form the fact that even in early
G
eighties, the land was sought to be acquired. Since the
proceedings could not be completed within the stipulated
....
period, they lapsed. That, however, does not mean that the land
was not needed for public purpose or that the public purpose
disappeared or vanished. The counsel submitted that it was
H
790
SUPREME COURT REPORTS
[2008) 15 S.C.R.
A further clear when the prayer of Essco for change of user of
land in 1991 was rejected. The applicant was told at that time
also that the land was required for public purpose. According
to the counsel, Government machinery took some time but it
cannot be concluded that the land was not required by the State
B and only with a view to deprive the appellants of their ownership
rights acquisition proceedings had been initiated.
19. Regarding notification of August 1, 2001 and August
2, 2001 under Sections 4 and 6 of the Act respectively, it was
.....
...,-
submitted that both the notifications were in consonance with
r
c law. A preliminary notification under sub-section {1) of Section
4 of the Act was issued showing the intention of the State for
acquisition of land for public purpose. Since the acquisition was
for construction of road, it was covered by Section 17 of the
D
Act and urgency clause was rightly invoked and in exercise cf
power under sub-section (4) of Section 17, inquiry
contemplated by Section 5A of the Act had been dispensed
,
with. The action was in consonance with law and no grievance
can be made contending that the inquiry as contemplated by
Section 5A and hearing of objections were illegally dispensed
E with by the authorities. All actions were consistent with the
provisions of the Act and .the appellants have no right to make
complaint against tho,se actions. It was, therefore, submitted
that the High Court was wholly right in dismissing the writ
petitions and the appeals have no substance.
F
-;.-
20. Before we deal with the matter on merits, it would be
appropriate if we notice the relevant provisions of the Act. As
the Preamble shows, the Act has been enacted with a view "to
amend the law for the acquisition of land for public purposes
G (and for Companies)". Section 3 is a 'definition clause' of
various expressions used in the Act. Clause (f) defines 'public
purpose' and the definition is 'inclusive' in nature. Purposes
mentioned in Clauses (i) to (viii) are in the nature of 'public
l..
purpose' and the land can be acquired for any such purpose.
H
Part II (Sections 4 to 17) deals with 'Acquisition'. Section 4
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ESSCO FASS PVT. LTD. & ANR. v. STATE OF HARYANA 791
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& ANR. [C.K. THAKKER, J.]
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enables the appropriate Government to issue preliminary
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notification for acquisition of land needed or likely to be needed
for public purposes. The said section is relevant and reads thus;
Section 4 - Publication of preliminary notification and
powers of officers thereupon- (1) Whenever it appears
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to the appropriate Government that land in any locality is
needed or is likely to be needed for any public purpose
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or for a company a notification to that effect shall b~
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published in the Official Gazette 1 [and in two daily
newspapers circulating in that locality of which at least one c
shall be in the regional language and the Collector shall
cause public notice of the substance of such notification
to be given at convenient places in the said locality 1 [the
last of the dates of such publication and the giving of such
public notice, being hereinafter referred to as the date of
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publication of the notification.
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(2) Thereupon it shall be lawful for any officer, either,
generally or specially authorised by such Government in
this behalf, and for his servants and workmen,--
to enter upon and survey and take levels of any land in such
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locality;
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to dig or bore in the sub-soil;
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to do all other acts necessary to ascertain whether the land
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is adapted for such purpose;
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to set out the boundaries of the land proposed to be taken
and. the intended line of the work (if any) proposed to be
made thereon;
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to mark such levels, boundaries and line by placing marks
and cutting trenches,
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and, where otherwise the survey cannot be completed and
the levels taken and the boundaries and line marked, to
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cut down and clear away any part of any standing crop,
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fence o~ jungle:
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Provided that no person shall enter into any building or upon
any enclosed court or garden attached to a dwelling-house
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(unless with the 'consent of the occupier thereof) without
previously giving such occupier at least seven days' notice
iri writing of his intention to do sci.
21. Section 5A is a salutary provision and enables any
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person interested in the land which is notified under sub-section
c ( 1) of Section 4 as being needed or iikely to be needed for a
public purpose to lodge objections against the proposed
acquisition. It is equally important provision and may be
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reproduced'
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Section SA - Objections : Hearing of objections-(1) Any
person interested in any land which has been notified
. under .. section 4, Sub-section (1), as being needed or likely
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to be needed for a public purpose or for a company may,
within thirty days from the date of the publication of the
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notification, object to the acquisition of the land or of any
· land in the locality, as the case may be.
(2) Every objection under sub-section ( 1) shall be made
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to the Collector in writing, and the Collector shall give the
robjector an 9pportunity of being heard in person or by any
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person authorised by him in this behalf or by pleader and
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shall, after hearing all such objections and after making
such further inquiry, if any, as he thinks necessary, either
make a report in respect of the land which has been
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notified under section 4, sub-section (1 ), or make different
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reports in respect of different parcels of such land, to the
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appropriate Government, containing his recommendations
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on the objections, together with the record of the
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proceedings held by him, for the decision of that
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Government. The decisioh of the Appropriate Governrnent
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ori tne objections shall be final.· ·
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ESSCO FASS PVT. LTD. & ANR. v. STATE OF
793
HARYANA & ANR. [C.K. THAKKER, J.]
(3) For the purposes of this section, a person shall be
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deemed to be interested in land who would be entitled to
claim an interest in compensation if the land were acquired
under this Act.
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22. Then comes Section 6 which ~authorizes the
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appropriate Government to issue final notification as to
declaration that the land is required for public purpose. The said
section is also material and reads as under;
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6. Declaration that land is required for a public purpose.-
( 1) Subject to the provisions of Part VI I of this Act, when c
the Appropriate Government is satisfied after considering
. the report, if any, made under section 5A, sub-section (2),
that any particular land is needed for a public purpose, or
for a company, a declaration shall be made to that effect
under the signature of a Secretary to such Government or
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of some officer duly authorised to certify its orders an
different declarations may be made from time to time in
respect of different parcels of any land covered by the
same notification under section 4, sub-section (!),
irrespective of whether one report or different reports has
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or have been made (wherever required) under section 5A, sub-section (2):
Provided that no declaration in respect of any particular
land covered by a notification under section 4, sub-section
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(1),--
(i) published after the commencement of the Land
Acquisition (Amendment and Validation) Ordinance, 1967
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but before the commencement of the Land Acquisition
(Amendment) Act, 1984 shall be made after the expiry of G
three years from 'the date of the publication of the
notification; or
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(ii) published after the commencement of the Land
Acquisition (Amendment) Act, 1984, shC!ll be made ~fter H
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the expiry of one year from the date of the publication of
the notification:
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·Provided further that no such declaration shall be made
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unless the compensation to be awarded for such property
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is to be paid by a company, or wholly or partly out of public
revenues or some fund controlled or managed by a local
authority.
Explanation 1.-ln computing any of the periods referred to
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in the first proviso, the period during which any action or
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proceeding to be taken in pursuance of the notification
issued under Section 4, sub-section (1 ), is stayed by an
order of a Court shall be excluded.
Explanation 2.-Where the compensation to be awarded for
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such property is to be paid out of the funds of a corporation
owned or controlled by the State, such compensation shall
be deemed to be compensation paid out of public
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revenues.
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(2) Every declaration shall be published in the Official
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Gazette, and in two daily newspapers circulating in the
locality in which the land is situate of which at least one
shall be in the regional language, and the Collector shall
cause public notice of the substance of such declaration
to be given at convenient places in the said locality (the
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last of the date of such publication and the giving of such
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public notice, being hereinafter referred to as the date of
publication of the declaration), and such declaration shall
{'rstate] the district or other territorial division in which the
land is situate, the purpose for which it is needed, its
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approximate area, and where a plan shall have been
made of the land, the place where such plan may be
inspected.
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(3) The said declaration shall be conclusive evidence that
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the land is needed for a public purpose or for a Company,
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ESSCO FASS PVT. LTD. & ANR. v. STATE OF HARYANA 795
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& ANR. [C.K. THAKKER, J.]
as the case may be; and, after making such declaration
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the Appropriate Government may acquire the land in
manner hereinafter appearing.
23. Section 9 requires issuance of notice to persons
interested. Section 11 requires enquiry to be made and award
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to be passed by Collector. Section 16 authorises the Collector
to take possession of the land acquired under the Act.
Thereupon, the land vests absolutely in the Government free
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from all encumbrances.
24. Section 17 is an exception to the normal rule of c
acquisition of land and deals with cases of urgency and
emergency. The provision is of extreme importance and may
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be quoted in extenso.
17. Special powers in cases of urgency.-(1) In cases of D
urgency, whenever the Appropriate Government so directs,
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the Collector, though no such award has been made, may,
on the expiration of fifteen days from the publication of the
notice mentioned in section 9, sub-section (1 ), take
possession of any waste or arable land needed for a public
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purpose]. Such land shall thereupon vest absolutely in the
Government, free from all encumbrances.
(2) Whenever, owing to any sudden change in the channel
of any navigable river or other unforeseen emergency, it
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becomes necessary for any Railway administration to
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acquire the immediate possession of any land for the
maintenance of their traffic or for the purpose of making
thereon a river-side or ghat station, or of providing
convenient connection with or access to any such station,
or the appropriate Government considers it necessary to
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acquire the immediate possession of any land for the
purpose of maintaining any structure or system pertaining
to irrigation, water supply, drainage, road communication
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or electricity,] the Collector may, immediately after the
publication of the notice mentioned in sub-section (1) and
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with fhe previous s~nctio~· cit the appropriate Government,
enter upon and take possessio'n "of such land, which shall
thereupon vest absolutely in the Government free from all
encumbrances.
f?rovided that the Collector shall not take possession of any
buildi~g or part of a building under this sub-sec~ion without
giving to the occupier thereof at least forty-eight hours'
notice of his intention so to do, or such longer notice as
may be reasonably sufficient to enable such occupier to
remove his movable property from such building without
unnecessary inconvenience.
(3) In every case under either of the preceding subsections the Collector shall at the time of taking possession
offer to the persons interested, compensation for the
standing crops and trees (if any) on such land and for any
other damage sustained by them caused by such sudden
dispossession and not excepted in section 24; and, in case
such offer is not accepted, the value of such crops and
trees and the amount of such other damage shall be
allowed for in awarding compensation for the land under
the provisions herein contained.
(3A) Before taking possession of any land under subsGction.(1) or sub-section (2), the Collector shall, without
· prejudice to the provisions of sub-section (3),-
( a) tende.r payment of eighty per centum of the
compensation for such land as estimated by him to the
persons interested entitled thereto, and
(b) pay it to them, unless prevented by some one or more
of the contingencies mentioned in section 31, sub-section
(~).and where the Collector is so prevented, the provisions
of section 31, sub-section (2), (except the second proviso
thereto), shall apply as they apply to the payment of
compensation under that section.
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ESSCO FABS PVT. LTD. & ANR. v. STATE OF HARYANA 797
& ANR. [C.K. THAKKER, J.]
(3-B) The amount paid or deposited under sub-section
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(3A), shall be taken into account for determining the
amount of compensation required to be tendered under
section 31, and where the amount so paid or deposited
exceeds the compensation awarded by the Collector
under section 11, the excess may, unless refunded within
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three months from the date of the Collector's award, be
recovered as an arrear of land revenue.
(4) In the case of any land to which, in the opinion of the
appropriate Government, the provisions of sub-section (1)
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or sub-section (2) are applicable, the appropriate
Government may direct that the provisions of section SA
shall not apply, and, if it does not so direct, a declaration
may be made under section 6 in respect of the land at any
time after the date of the publication of the notification
under section 4, sub-section (1 ).
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25. Whereas Part Ill relates to 'Reference to Court and
procedure thereon', Parts IV and V deal with 'Apportionment
of compensation' and 'Payment', respectively.
26. It is vehemently contended on behalf of the appellants
that on the facts and in the circumstances of the case, the
respondents could not have invoked 'urgency clause' by
scuttling enquiry and dispensing with hearing of objections
under Section 5A of the Act It was submitted that no action
could have been taken in view of the circumstances mentioned
earlier. As early as in 1982 proceedings were initiated for
acquisition of land but they were allowed to be lapsed in spite
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of final notification under Section 6 of the Act by not taking
appropriate actions in time. Again, in 1991, when Essco Fabs
applied for change of user of land, request was turned down
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on the ground that the land was likely to be needed for public
purpose. It was, therefore, submitted that when preliminary
notification under Section 4 was issued in 2001, there was no
urgent need or compelling necessity nor it was a matter of
urgency or emergency under Section 17 of the Act which could
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27. We find considerable force in the above argument of
the learned counsel for the appellants. The scheme of the Act
is clear which provides for issuance of preliminary notification
B under sub-section ( 1) of Section 4 of the Act empowering the
appropriate Government to issue such notification for
acquisition of land needed or likely to be needed for any public
purpose. Since the property belongs to a private individual,
unless there is a 'public purpose' as defined in clause (f) of
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c Section 3 of the Act, no acquisition of land can be made. It is
in exercise of power of eminent domain that a sovereign may
acquire property which does not belong to him. In the
circumstances, as a general rule, before exercise of power of
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eminent domain, law must provide an opportunity of hearing
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against the proposed acquisition. Even without a specific
provision to that effect, general law requires raising of
objections by and affording opportunity of hearing to the owner
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of the property. The Lan~ Acquisition (Amendment) Act, 1923
(Act 38 of 1923), however, expressly made such provision by
inserting Section 5A in the Act. It is, therefore, clear that after
E issuance of preliminary notification under Section 4 before and
final notification under Section 6 of the Act, the appropriate
Government is enjoined to hear persons interested in the
property before he is ·deprived of his ownership rights. But then
there may be cases of 'urgency' or 'unforeseen emergency'
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larger public interest. The Legislature, therefore, thought it
appropriate to deal with such cases of exceptional nature and
in its wisdom enacted Section 17.
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28. Whereas sub-section (1) of Section 17 deals with
cases of 'urgency', sub-section (2) of the said section covers
cases of 'sudden change in the channel of any navigable river
or other unforeseen emergency'. But even in such cases i.e.
cases of 'urgency' or 'unforeseen emergency', enquiry
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ESSCO FABS PVT. LTD. & ANR. v. STATE OF HARYANA 799
& ANR. [C.K. THAKKER, J.]
with which is clear from sub-section (4) of Section 17 of the Act.
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29. Sub-section (4) of Section 17 is an enabling provision
and it declares that if in the opinion of the appropriate
Government, the provisions of sub-section (1) or (2) are
applicable, it may direct that the provisions of Section 5A would
not apply. It is, therefore, clear that the Legislature has
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contemplated that there may be 'urgencies' or 'unforeseen
emergencies' and in such cases, private properties may be
acquired. But, it was also of the view that normally even in such
cases, i.e. cases of urgencies or unforeseen emergencies, the c
owner of property should not be deprived of his right to property
and possession thereof without following proper procedure of
law as contem_plated by Section 5A of the Act unless the
urgency or emergency is of such a nature that the Government
is convinced that holding of enquiry or hearing of objections
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may be detrimental to public interest.
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30.