# KRISHI UTPADAN MANDI SAMITI, MUZAFFARNAGAR (U.P.), ET,C v. RATAN PRAKASH MANGAL & ORS., ETC

- **Citation:** [1988] Supp. 1 S.C.R. 182
- **Court:** Supreme Court of India
- **Decided:** 1988-05-06
- **Case number:** Civil Appeal No. 3446 of 1987
- **Bench:** E.S. Venkataramiah, N.D. Ojha
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/krishi-utpadan-mandi-samiti-muzaffarnagar-u-p-et-c-v-ratan-prakash-mangal-ors-10117
- **Pages:** 20

## Headnote

Land Acquisition Act, 1894--Challenging notification issued
under section 4( 1) read with section 17(4) and consequential notification
issued under section 6-0f-For acquisition of plot of /and.
These two appeals--Civil Appeal No. 3446 of 1987 and Civil Appeal
No. 3447 of 1987-were filed in this Court against the judgment of the
High Court in the Writ Petition No. 6789 of 1982. Ratan Prakash
Mangal and Kuldip Singh, respondents Nos. l and 2 in the Civil Appeal
No. 3446 of 1987 and the appellants in Civil Appeal No. 3447 of 1987,
D had tiled the said writ petition challenging a notification dated 20th
May, 1982, issued under section 4(1) read with section 17(4) of the Land
Acquisition Act, 1894 (the Act) and also the consequential notification
dated 21st May, 1982, issued under section 6 of the Act with regard to a
plot No. 289. The notification under section 4(1) of the Act was quashed
in part in so far as it invoked Section 17(4) of the Act, and the notificaE tion under section 6 was quashed as a whole with regard to the said plot
No. 289. The Civil Appeal No. 3446 of 1987 was preferred by Krishi
Utpadan Mandi Samiti, Muzaffar Nagar for which the said plot had
been acquired, for setting aside the judgment of the High Court. Civil
Appeal No. 3447 of 1987 was preferred by Ratan Prakash Mangal and
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Kuldip Singh afore-mentioned hereinafter referred to as respondents
Nos. 1 & 2 asserting that the notification under section 4(1) should have
been quashed by the High Court in its entirety and not only in so far it
invoked section 17(4) of the Act.
Initially, a Notification dated 20th March, 1975 was issued under
section 4(1) of the Act for acquiring land, including the plot No. 289, for
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construction of a market yard for the appellant Krishi Utpadan Mandi
Sa mi ti. Later, this Notification was superseded by another Notification
dated 30th August, 1975 issued under section 4(1) with regard to land
which did not include the said plot. Subsequently, another Notification
dated 26th October, 1978, was issued under section 4(1) read with
Section 17(4) of the Act with regard to land, including the plot aboveH mentioned. The Notification dated 26th October, 1978 was followed by
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KRISHI UTPADAN SAMIT! v. R.P. MANGAL
183
a Notification dated 27th October, under section 6.
Prior to the issue of these Notifications, respondents Nos. 1 and 2
had purchased the said plot No. 289. The said respondents Nos. 1 and 2
had challenged the Notifications dated 26th October, 1978 and 27th
October, 1978 by a writ petition in the High Court. The High Court had
quashed the two Notifications in so far as Plot No. 289 was concerned.
This Judgment of the High Court had been challenged by Krishi Utpadan Mandi Samiti before this Court in Civil Appeal No. 2970Of1979.
This Court had held that even though the quashing of the Notification under Section 6 had been justified, the High Court had not been
right in quashing the Notification under section 4(l)°in its entirety, and
had set aside the Judgment of the High Court in so far as it had quashed
the Notification under section 4( l) in its entirety, while main faining the
rest of the Judgment with a direction regarding inquiry under Section
SA into the objections of the respondents Nos. l and 2 to the proposed
acquisition etc. In pursuance of the said direction, inquiry under section SA had been made and the Land Acquisition Officer had submitted
a report on 20th January, 1981, after about 15 months of the direction
above~said of this Court, to the effect that the Plot No. 289 might be
exempted from acquisition. The Government did not agree with the said
report and issued the Notifications impugned in present appeals.
Allowing Civil Appeal No. 3446 of 1987, and dismissing Civil
Appeal No. 3447 of 1987, the Court,
· HELD: There was no doubt with regard to the legal position that
the Report dated 20th January, 1981 of the Land Acquisition Officer
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was not binding on the State Governmen~ and it was still open

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KRISHI UTPADAN MANDI SAMIT!,
MUZAFFARNAGAR (U.P.), ET,C.
v.
RATAN PRAKASH MANGAL & ORS., ETC.
MAY 6, 1988
[E.S. VENKATARAMIAH AND N.D. OJHA, JJ.)
Land Acquisition Act, 1894--Challenging notification issued
under section 4( 1) read with section 17(4) and consequential notification
issued under section 6-0f-For acquisition of plot of /and.
These two appeals--Civil Appeal No. 3446 of 1987 and Civil Appeal
No. 3447 of 1987-were filed in this Court against the judgment of the
High Court in the Writ Petition No. 6789 of 1982. Ratan Prakash
Mangal and Kuldip Singh, respondents Nos. l and 2 in the Civil Appeal
No. 3446 of 1987 and the appellants in Civil Appeal No. 3447 of 1987,
D had tiled the said writ petition challenging a notification dated 20th
May, 1982, issued under section 4(1) read with section 17(4) of the Land
Acquisition Act, 1894 (the Act) and also the consequential notification
dated 21st May, 1982, issued under section 6 of the Act with regard to a
plot No. 289. The notification under section 4(1) of the Act was quashed
in part in so far as it invoked Section 17(4) of the Act, and the notificaE tion under section 6 was quashed as a whole with regard to the said plot
No. 289. The Civil Appeal No. 3446 of 1987 was preferred by Krishi
Utpadan Mandi Samiti, Muzaffar Nagar for which the said plot had
been acquired, for setting aside the judgment of the High Court. Civil
Appeal No. 3447 of 1987 was preferred by Ratan Prakash Mangal and
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Kuldip Singh afore-mentioned hereinafter referred to as respondents
Nos. 1 & 2 asserting that the notification under section 4(1) should have
been quashed by the High Court in its entirety and not only in so far it
invoked section 17(4) of the Act.
Initially, a Notification dated 20th March, 1975 was issued under
section 4(1) of the Act for acquiring land, including the plot No. 289, for
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construction of a market yard for the appellant Krishi Utpadan Mandi
Sa mi ti. Later, this Notification was superseded by another Notification
dated 30th August, 1975 issued under section 4(1) with regard to land
which did not include the said plot. Subsequently, another Notification
dated 26th October, 1978, was issued under section 4(1) read with
Section 17(4) of the Act with regard to land, including the plot aboveH mentioned. The Notification dated 26th October, 1978 was followed by
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KRISHI UTPADAN SAMIT! v. R.P. MANGAL
183
a Notification dated 27th October, under section 6.
Prior to the issue of these Notifications, respondents Nos. 1 and 2
had purchased the said plot No. 289. The said respondents Nos. 1 and 2
had challenged the Notifications dated 26th October, 1978 and 27th
October, 1978 by a writ petition in the High Court. The High Court had
quashed the two Notifications in so far as Plot No. 289 was concerned.
This Judgment of the High Court had been challenged by Krishi Utpadan Mandi Samiti before this Court in Civil Appeal No. 2970Of1979.
This Court had held that even though the quashing of the Notification under Section 6 had been justified, the High Court had not been
right in quashing the Notification under section 4(l)°in its entirety, and
had set aside the Judgment of the High Court in so far as it had quashed
the Notification under section 4( l) in its entirety, while main faining the
rest of the Judgment with a direction regarding inquiry under Section
SA into the objections of the respondents Nos. l and 2 to the proposed
acquisition etc. In pursuance of the said direction, inquiry under section SA had been made and the Land Acquisition Officer had submitted
a report on 20th January, 1981, after about 15 months of the direction
above~said of this Court, to the effect that the Plot No. 289 might be
exempted from acquisition. The Government did not agree with the said
report and issued the Notifications impugned in present appeals.
Allowing Civil Appeal No. 3446 of 1987, and dismissing Civil
Appeal No. 3447 of 1987, the Court,
· HELD: There was no doubt with regard to the legal position that
the Report dated 20th January, 1981 of the Land Acquisition Officer
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was not binding on the State Governmen~ and it was still open to it to
continue the proceedings for the acquisition of the Plot No. 289 notwith~ F
standing the said report. The Government had its reason why in place
of issuing a Notification under section 6(1) of the Act in continuation of
the Notification dated 26th October, 1978 under sectio" 4(1), fresh
notifications under sections 4 and 6 had to be issued as also the reason
for the delay in issuing the fresh Notifications, as was apparent from the
record. As regards the submission that section 17(4) of the Act had been
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erroneously invoked in fresh Notification under section 4(1) dated 20th
May, 1982 also and that inquiry under Section SA had again to be made
before issuing this Notification, it was enough to point out that once an
inquiry under the said section had already been made and the parties
had been given full opportunity to substantiate their case in the enquiry
and the State Government had not been inclined to agree With the
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SUPREME COURT REPORTS
[1988] Supp. 1 S.C.R.
report of the Land Acquisition Officer submitted in pursuance of that·
inquiry, it would have been a . futile exercise to repeat the whole
performance again. After the issue oftbe earlier Notification dated' 26th
October, 1978, a period of nearly 3'h years had expired when the· fresh·
Notification dated 20th May, 1982 above-said was. issued and appa,.
rently the necessity to acquire the plot No. 289 during this period
became more acute due to this delay. Further, as• stated. in' the said
Notification itself, the urgency had become more imminent- on. account:
of the direction issued by this Court on 2nd March;. 1982· in Writ
Petition No. 1318 of 1982 filed by the traders in gur, khandseri and
foodgrains, Muzaffar Nagar, challenging the Notification. under Section·
7(2)(b) of the U.P. Act No. 2S of 1964. Consequently, it was difficult to
hold that the opinion of the State Government that it was a fit case to
invoke section l 7 ( 4) of the Act was invalid on the ground that there was.
no basis or· material in support of the opinion. On the facts oftbe case,it
was not possible to hold that the Notification dated' 20th May, 1982 had.
been issued by the State Government in colourable exercise of its
power. [194A-F]
The Notification dated 20th May, 1982 and 21st May, 1982 had
not been challenged by respondents Nos. l and. 2 on· the basis of ma/a
fides of any particular officer of the State Government. What was urged
was that it was a case of legal ma/a fides inasmuch as in issuing the said
fresh Notification dated 20th May, 1982, an attempt had been made by
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the State Government to circumvent the direction of this Court issued
in the Civil Appeal No. 2970 of 1979 to make inquiry under Section SA
of the Act and to proceed therea(ter in accordance with law, the State
Government did make an inquiry under Section SA of the Act in
pursuance of the direction of this Court after giving full opportunity to
the concerned parties to substantiate their case .. It was difficult to agree
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with the submission of respondents I and 2 that the government attempted to circumvent the direction of this Court. A case of legal ma/a fide
was not made out. [I94G-H; 19SB]
The Government all through was of the opinion-that Plot No. 289
did not deserve to be released from acquisition. Also, this plea lost
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significance and became almost of academic value inasmuch as the State
Government had not issued a notification under section 6(1) of the Act
in.continuation of the Notification dated 2.6th October, 1978 under
Section 4( 1 ).'After the issue of the fresh Notification what was really t.o
be seen was whether there was justification for invoking section 17 (4) of
Act or not. There was such a justification. There had been a materi~
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change in the circumstances after the report of the Land Acquisition .
KRISHI UTPADAN SAMITI v. R.P. MANGAL [OJHA, J.]
185
Officer dated 20th January, 1981, to justify Section 17(4) of the Act
being invoked and to dispense with a further inquiry under section SA
oftbe Act. [196D-E; 198C]
The submission of the respondents 1 and 2 about the lack of
application• of mind before issuing the Notification dated 20th May,
1982 with regard to plot No. 289 had no substance, as indicated by the
original record produced by counsel for the State Government. The
effect of issuing a fresh Notification under Section 4(1) and the delay in
issuing it had benefited· the respondents 1 and 2 inasmuch as now they
would be entitled to compensation not on the basis of market value of
plot No. 289 as on 26.10. 78 when the earlier Notification under Section
4(1) was issued but as on 20th May, 1982 when the fresh Notification
under the said section was issued. [200G-H; 20IA]
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Civil Appeal No. 3446 of 1987 was allowed and the judgment of
the High Court in the Writ Petition No. 6789 of 1982 was set aside, and
as a consequence, Civil Appeal No. 3447of1987 w,as dismissed. [20IB]
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State of Punjab v. Gurdial Singh & Ors., [1980] 1SCR1071; The
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Collector (District Magistrate) Allahabad and Anr. v. Raja Ram JaisA
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wal, etc., [1985] 3 S.C.R. 995; P.L. lakhanpal v. Union of India &
Ors., [1967] 1 SCR 443; Siemens Engineering & Manufacturing Co. of
India Limited v. Union. oflndia & Anr., [1976] Suppl. S.C.R. 489;
Narayan Govind Gavare v. State of Maharashtra, [1977] I S.C.R. 763
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and State of U.P. v. Pisia Devi, [1986] 4 S.C.C. 251, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3446 ,&
344 7 of1987.
From the Judgment and Order dated 11.3.87 of the High Court
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of Allahabad in .Civil Misc. Writ Petition No. 6789of1982.
Satish Chandra, Ms. Pumima Bhat and E.C. Agarwala for the
Appellants.
P.P. Rao, B.D. Agarwal, P.K. Chakraverty, Ms. Sandhya
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Goswami and R.C. Verma for the Respondents.
The Judgment of the·Court was delivered by_
OJHA, J. These two appeals have been preferred again.st the
judgment dated 11th March, 1987 of the Allahabad High ~ourt in Writ
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SUPREME COURT REPORTS
[1988] Supp. 1 S.C.R.
A Petition No. 6789 of 1982. In the said writ petition a Notification dated
20th May, 1982 issued under Section 4(1) read with Section 17(4) of
the Land Acquisition Act, 1894 (hereinafter referred to as the Act)
and also the consequential Notification dated 2 lst May, 1982 under
Section 6 of the Act with regard to Plot No. 289 with an area of 3
bighas 14 biswa situate in village Kukra, District Muzaffamagar in the
B State of Uttar Pradesh were challenged by Ratan Prakash Mangal and
Kuldeep Singh who are Respondents 1 and 2 in Civil Appeal No. 3446
of 1987 and the appellants in Civil Appeal No. 3447 of 1987. For the
sake of convenience these two persons shall hereinafter be referred to
as Respondents 1and2. The Notification under Section 4( 1) of the Act
was quashed in part in so far as it invoked Section 17(4) of the Act and
C thereby dispensed with inquiry under Section 5A of the Act whereas
the Notification under Section 6 was quashed as a whole with regard to
the aforesaid Plot No. 289. Civil Appeal No. 3446 of 1987 has been
preferred by the Krishi Utpadan Mandi Samiti, Muzaffamagar for
whom the aforesaid plot had been acquired with a prayer that the
judgment of the High Court may be set aside. Civil Appeal No. 3447 of
D 1987 on the other hand has been preferred by Respondents 1 and 2
asserting that even the Notification under Section 4(1) of the Act
should have been quashed by the High Court in its entirety and not
only in so far as it invoked Section 17(4) of the Act.
Before dealing with the respective submissions made by learned
E counsel for the parties it is necessary to give some more facts. Initially
a Notification dated 20th March, 1975 was issued under Section 4(1) of
the Act for acquiring nearly 80 acres of land for the public purpose of
construction of a market yard for the appellant, Krishi Utpadan Mandi
Samiti, Muzaffamagar. About 5 months thereafter, however, this
Notification was superseded and another Notification was issued
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under Section 4(1) with regard to only 60 acres of land. The Notification issued on 20th March, 1975 included Plot No. 289 aforesaid
w)lereas the subsequent Notification which is dated 30th August, 1975
did not include the said plot along with several other plots. Subsequently, however, another Notification was issued on 26th October,
1978 under Section 4(1) read with Section 17(4) of the Act with regard
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to 19.47 acres of land including Plot No. 289. This Notification really
seems to be with regard to that portion of land which even though
included in the earlier Notification dated 20th March, 1975 had been
excluded in the subsequent Notification dated 30th August, 1975. The
Notification dated 26th October, 1978 was followed by a Notification
under Section 6 dated 27th October, 1978. About four months prior to
H the issue of these Notifications Respondents 1 and 2 had purchased
KRISHI UTPADAN SAMm v. R.P. MANGAL [OJHA, J.]
187
Plot No. 289 aforesaid on 7th June, 1978, The purpose for which
Respondents 1 and 2 purchased Plot No. 289 was shown by them in
their writ petition filed before the High Court as construction of a
residential colony. According to them in furtherance of that purpose
they executed three sale deeds one each on 10th November, 1978, 16th
November, 1978 and 7th December, 1978. The first of these three sale
deeds had been executed in favour of one Smt. Dhanwanti Agarwal,
the second one in favour of Smt. Santosh Kumari and the third one in
favour of Shri Janardhan Das and Ram Kumar. The writ petition filed
by Respondents 1 and 2 in the High Court indicates that Smt.
Dhanwanti Agarwal and Smt. Santosh Kumari were wives of two
gazetted officers and the third purchaser Ram Kumar too was a
Government servant.
The Respondents 1 and 2 challenged the Notification dated 26th
October, 1978 and 27th October, 1978 referred to above before the
High Court in Writ Petition No. 163 of 1979. The plea raised by them
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was that there was no urgency and consequently the inquiry contemp·
lated by Section 5-A of the Act could not be dispensed with by invokD
ing Section 17(4) thereof. This plea found favour with the High Court
and the two Notifications mentioned above were quashed on 6th June,
1979 in so far as Plot No. 289 was concerned. This judgment of the
High Court was challenged by the Krishi Utpadan Mandi Samiti,
Muzaffarnagar before this Court in Civil Appeal No. 2970 of 1979.
This Court agreed with the High Court in so far as it had held that the
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urgency clause had been wrongly applied. But it was held that on that
ground even though quashing of the Notification under Section 6 of
the Act was justified the High Court was nol right in quashing the
Notification under Section 4(1) in its entirety. On this view the appeal
was allowed in part and the judgment of the High Court was set aside
in so far as it quashed the Notification under Section 4(1),ofthe Act i,n
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its entirety. The rest of the judgment was, however, maintained with a
direction "that copies of the Notifications be served personally on
Respondents Nos. 1 and 2 and their· transferees so that Respondents
Nos. 1and2 and their transferees may have an opportunity to file their
objections to the proposed acquisition within three weeks .from the
date of service of the copy of the notification upon each.,of them. The
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appropriate authority will then hold an inquiry into the objections
. under Section 5A and proceed with the matter in accordance with faw.
Since the appellant has ·obtained possession of the land from Respon-
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dent Nos. 1 and 2 and their transferees by invoking the urgency clause
which,_has been set aside, the appellant will r«store possession of the
same 1:o Respondents Nos. 1 and 2 and their transferees within a week
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from today."
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SUPREME COURT REPORTS
[1988] Supp. 1 S.C.R.
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In pursuance of the aforesaid direction inquiry under Section 5A
of the Act was made and the Land Acquisition Officer after giving the
parties an opportunity to file their objections and produce evidence
and hearing the arguments of their learned counsel, submitted a report
on 20th January, 1981, that is, after about 15 months of the direction
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referred to above issued by this Court in Civil Appeal No. 2970 of
1979. The repo_rt submitted by the Land Acquisition Officer was to the
effect that Plot No. 289 may be exempted from acquisition. In submitting the said report, a copy of which has been placed on record, it
appears that the Land Acquisition Officer was impressed mainly by
two circumstances: (1) That Smt. Dhanwanti Agarwal and Smt.
Santosh Kumari who had purchased portions of Plot No. 289 had made
a declaration saying that there was no house in their names in Muzaffarnagar and (2) that even though Mandi Samiti had constructed a
building it was lying idle inasmuch as no trader was prepared to shift to
these premises. The Government, as is apparent from the counteraffidavit filed on its behalf in this Court as also from the original record
which was produced before us, did not seem to agree with the report of
D the Land Acquisition Officer and issued the Notifications which are
the subject-matter of the present appeals. We shall deal with the
details in this behalf as also with regard to the delay between 20th
January, 1981, the date of the report and 20th May, 1982, the date of
the issue of Notification under Section 4(1) of the Act while considerE
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ing the submissions made by learned .counsel for the parties on this
point.
It was urged by learned counsel for the appellant that even Plot
No. 289 was urgently needed by the appellant and the High Court has
erred in taking a contrary view and holding that dispensing with
inquiry under Section 5A was not bona fide or rational. For the
Respondents 1 and 2 on the other hand it was urged by their learned
counsel that consequent upon the report of the Land Acquisition
Officer dated 20th January, 1981 in proceedings under Section SA of
the Act to the effect that Plot No. 289 may be exempted from the
acquisition, it was incumbent upon the Government to give a decision
in this behalf as contemplated by the said Section SA and until a
decision was given, the direction of this Court referred to above given
in'C,ivil Appeal No. 2970 of 1979 remained unimplemented and the
issue of fresh Notifications under Sections 4(1) and 6 was in'colourable
exercise' of power. In this connection it was pointed out that the only
course open to the Government was to give a decision that notwithstanding the report . of . the Land Acquisition Officer dated· 20th
J anuarv, 1981 it was necessary to acquire Plot No, 289 and to" issue a
KRJSHI UTPADAN SAMITI v. R.P. MANGAL [OJHA, J.]
189
Notification under Section 6 of the Act on the basis of such decision in
continuation of the earlier Notification dated 26th October, 1978
11nder Section 4(1) of the Act. According to him since the Notification
dated 26th October, 1978 had initially been quashed by the High Court
in its entirety on 6th September, 1979 in so far as Plot No. 289 is
concerned and was partly maintained by this Court vide its judgment
in Civil Appeal No. 2970 of 1979 with a direction to make inquiry
under Section 5A of the Act and to proceed thereafter in accordance
with law, the second proviso to Section 6(1) of the Act as inserted by the
State of Uttar Pradesh by the Land Acquisition (U.P. Amendment)
Act 28 of 1972 was clearly attracted. It was urged that since the said
proviso contemplated that in computing the period of three years for
issuing a Notification under Section 6 prescribed by the first proviso to
sub-section (1) thereof the time during which the State Government
was prevented by or in consequence of any order of any court from
making such declaration shall be excluded, it was open to the State
Government to issue a Notification under Section 6 even on 20th May,
1982 when the fresh Notification under Section 4( 1) was issued and the
issue of the fresh Notification under Section 4(1) invoking Section
17( 4) of the Act was not bona fide and was apparently a case ofcolourable exercise of power. It was also pointed out by learned counsel for
the Respondents 1 and 2 that undue delay had been caused in issuing
the fresh Notification under Section 4(1) of the Act on 20th May, 1982
after the report of the Land Acquisition Officer dated 20th January,
1981 which itself indicated that there was no occasion for invoking
Section 17( 4) of the Act. In this connection it was further submitted by .
learned counsel for the Respondents 1 and 2 that no material change in
the factual position had taken place between 20th January, 1981 and
20th May, 1982 and for this reason also Section 17(4) of the Act could
not have been invoked. According to learned counsel there was in any
case no justification for the Government to include even that portion
of the land other than Plot No. 289 which was the subject-matter of
Notifications dated 26th October, 1978 and 27th October, 1978 and
with regard to which the said Notifications had not been quashed.
According to him the Government by including that portion of the
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land also in these Notifications dated 20th and 21st May, 1982 really
took steps to acquire its own land which indicated lack of application
of mind at the time of issuing these Notifications. On the basis of these
submissions it was urged by learned counsel for the Respondents 1 and
2 that not only the judgment of the High Court under appeal deserved
to be confirmed, Civil Appeal No. 3447 of 1987 filed.by Respondents 1
and 2 deserves to be allowed and the Notification dated 20th May,
1982 under Section 4(1) of the Act deserves to be quashed in its
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SUPREME COURT REPORTS
[1988] Supp. I S.C.R.
entirety in substitution of the judgment of the High Court quashing the
same only in so far as it invoked Section 17(4) of the Acf.
Having heard learned counsel for the parties we are of the
opinion that Civil Appeal No. 3446 of 1987 filed by the Krishi Utpadan
Mandi Samiti, Muzaffarnagar deserves to be allowed and as a consequence thereof Civil Appeal No. 3447 of 1987 filed by the Respondents 1
and 2 deserves to be dismissed. At this place another intervening
circumstance may be noticed. A Notification dated 20th November,
1981 was issued by the State Government under clause (b) of subsection (2) of Section 7 of the Uttar Pradesh Krishi Utpadan Mandi
Adhyniyam, 1964 (hereinafter referred to as U.P. Act No. 25 of 1964)
declaring that with effect from. the date of publication of the Notification in the Gazette the wholesale transactions of agricultural produce
in respect of Muzaffarnagar market area specified in Schedule A shall
be conducted only on the place within the Muzaffarnagar Principal
Market Yard. A copy of this Notification forms part of the record of
Civil Appeal No. 3446 of 1987 and it indicates that Schedule A thereto
contains 54 commodities of agricultural produce. The effect of the
issue of the said Notification was that dealers of the said 54 commodities had to shift fheir existing place of business to the Principal
Market Yard.
An association of traders in gur, khandsari and foodgrains,
namely, the Gur, Khandsari and Grain Merchants Association
(Regd. ), Muzaffarnagar filed Writ Petition (Civil) No. 1318 of 1982 in
this Court challenging the aforesaid Notification. The grievance of the
petitioners was that once the impugned Notification became operative
no one could carry on wholesale business in the specified agricultural
produce except at a place declared as a Market yard and any business
being carried on at any other place would be contrary to law rendering
persons carrying on such business liable to prosecution. According to
the petitioners in this view of the matter and in view of the circumstance that in.the new Market Yard mentioned in the Notification
shops were not available, the whole business of the petitioners would
be ruined if the said Notification was implemented. Notices were
issued to . the respondents and statements were made by learned
counsel apj)earing for the concerned respondents that the Mandi Samiti
had undertaken planned programme of constructing shops and that
120 more shops can be constructed within two months apart from the
shops which had been constructed and allotted to the intending traders
and dealers. On the basis of the aforesaid statements this Court
ordered on 2nd March, 1982:-
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KRISHI UTPADAN SAMITI v. R.P. MANGAL [OJHA, J.[
191
"We, therefore, record the statements of Mr. Rana and
Mr. Garg that within a period of six months from today the
Samiti will construct required number of shops. If some
vacant shops are available proceedings for allotment must
be taken forthwith. Those of the traders/dealers who are
allotted shops must shift to the notified market yard within
a week from the date of the receipt of the allotment order.
Till any trader/dealer is not allotted a shop he can carry on
his business in the old market yard and is not to be prosecuted, on the ground that he is doing business in the old
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market yard which is denotified."
A further direction was given that the shops to be constructed
must be in accordance with the plan according to which the existing
shops had been constructed.
The impugned Notification dated 20th May, 1982 under Section
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4( 1) of the Act contained inter alia the following recital as is apparent
from a copy thereof placed on the record of Civil Appeal No. 3446 of
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1987:
"Being of the opinion that the provisions of sub~section (1)
and (IA) of section 17 of the Act are applicable to the said
land inasmuch as the said land which is arable and ban jar
Atirikt is urgently required for the construction of market
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yard of Krishi Utpadan Mandi Samiti, Muzaffarnagar
under a planned development scheme arid that in view of
the directions of the Supreme Court additional shops are to
be constructed most urgently. It is as well necessary to
eliminate the delay likely to be caused by an enquiry under
Section SA of the said Act."
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In the counter-affidavit filed on behalf of ihe State of U :p. which
forms part of Civil Appeal No. 3447 of 1987 it has been stated that
after the receipt of the report of the Land Acquisition Officer dated
20th January, 1981 the State Government called for comments from
the Director, Mandi Parishad, Uttar Pradesh, who vide his letter dated ·G
27th June, 1981 informed the State Government that Plot No. 289
deserved to be acquired and there was no justification to release it
from acquisition. After the said Jetter had been received Smt.
Dhanwanti Agarwal, one of the vendees from Respondents 1 and 2
referred to above requested the State Government vide her letter
dated 2nd September, 1981 to reconsider the matter. On the receipt of H
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the said letter a meeting was convened at Government level on 16th
November, 1981 attended by the District Magistrate, Muzaffarnagar,
Agriculture Secretary and Director, Mandi Parish ad. In pursuance of
the deliberations of that meeting the District Magistrate was requested
to look into the matter and send his comments vide letter dated 21st
November, 1981 and in response to that letter the District Magistrate
vide his letter dated 3rd December, 1981 informed the State Government that for reasons stated therein it was not advisable to exempt or
exclude Plot No. 289 from the acquisition proceedings. Copies of these
letters have been annexed to the counter-affidavit. In his letter dated
3rd December, 1981 the District Magistrate inter alia pointed out that
the land of Plot No. 289 was situated in the middle of the land acquired
under the Notifications in question and that it was necessary to acquire
the land of the said plot also for a smooth construction of the market
yard. The District Magistrate by his letter made a request that Notification under Section 6(1) of the Act may be issued immediately. The
counter-affidavit further indicates that while the matter was under
consideration Smt. Santosh Kumari the other vendee from Respondents 1 and 2 referred to above made an application before the State
Government stating that Plot No. 289 should not be acquired in view
of the report of the Land Acquisition Officer and further that since the
Notification dated 26th October, 1978 under Section 4(1) had been
published on 25th November, 1978 and a period of three years had
elapsed any acquwtion would be invalid.
We have already indicated above that the original record was
produced before us by learned counsel appearing for the State
Government and from its perusal it appeared that after Smt. Santosh
Kumari had made the said application the question as to whether a
Notification under Section 6(1) of the Act could be issued in continuation of the Notificition dated 26th October, 1978 under Section 4(1) of
the Act came up for consideration before the State Government. The
matter was ultimately referred to the Law Department. The record
further indicated that there appeared to be a divergence of opinion in
regard to the applica15ility of the second proviso to Section 6(1) of the
Act inserted by t!).e State of U .P. and the ultimate view which prevailed was that it was expedient to issue a fresh Notification under
Section 4(1) also and it was thus that in place of issuing a Notification
under Section 6(1) in continuation of the Notification dated 26th
October, 1978 under Section 4(1), fresh Notifications both under
Sections 4( 1) and 6 of the Act were issued on 20th May, 1982 and 21st
May, 1982 respectively. The original record also indicated that after
the receipt of the report of the Land Acquisition Officer the file was
,
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KRJSHI UTPADAN SAMIT! v. R.P. MANGAL [OJHA, J.J
193
moving above for sometime to ensure as to whether possession over
Plot No. 289 had been restored back or not in pursuance of the direction of the Supreme Court in Civil Appeal No. 2970 of 1979 and to
take steps to ensure compliance of the said direction. As seen above it
was the own case of Respondents l and 2 in their writ petition before
the High Court that Smt. Dhanwanti Agarwal and Smt. Santosh
Kumari were wives of two gazetted officers. In the counter-affidavit
which was filed on behalf of the Krishi Utpadan Mandi Samity, Muzaffarnagar in the said writ1'etition it was stated in paragraph 20 with
regard to the report of the Land Acquisition Officer dated 20th
January, 1981 that some of the land being of gazetted officers, they
succeeded in exerting pressure on the Land Acquisition Officer to
submit a wrong report. As already pointed out in the counter-affidavit
filed on behalf of the State Government in this Court reference has
betin made to the two letters given by Smt. Dhanwanti Agarwal and
Smt. Santosh Kumari on the basis of which further inquiry had to be
made by the State Government and ultimately a decision had to be
taken that in place of issuing a Notification under Section 6(1) of the
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Act in continuation of the Notification dated 26th 'October, 1978 under
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Section 4(1) fresh Notifications under Sections 4(1) and 6 may be
issued.
The original record which was produced before us also indicated
that at no stage after the receipt of the report of the Land Acquisition
Officer dated 20th January, 1981 had the Government taken a decision
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that it was not necessary to acquire the plot. Indeed, as seen above,
the Government was not inclined to agree with the report of the Land
Acquisition Officer because had it been so there would have been no
occasion either for calling for a report from the Director Mandi
Parishacl or convening a meeting to consider the mattter or to require
the District Magistrate to submit his own report. After making necesF
sary inquiries the Government ultimately decided not to release Plot
No. 289 from acquisition proceedings. However, before a Notification
could be issued under S\'ction 6(1) of the Act in continuation of the
Notification dated 26th October, 1978 under Section 4(1) a question
was raised by Smt. Santosh Kumari that three years having expired
from th~ date of the publication of the Notification under Section 4(1)
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Plot No. 289 could not be acquired in pursuance of the said Notification. The Government thereafter referred the matter to the Law
Department and it was ultimately decided to issue fresh Notifications
under Sections 4(1) and 6 of the Act.
There seems to be no doubt with regard to the legal position that H
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[1988] Supp. 1 S.C.R.
the report dated 20th January, 19El submitted by the Land Acquisition
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Officer was not binding on the-State Government and it was still open
to it to continue the proceedings for acquisition of Plot No. 289
notwithstanding the said report. The reason why in place of issuing a
Notification under Section 6(1) of the Act in continuation of the
Notification dated 26th October, 1978 under Section 4(1) fresh NotifiB cations under Sections 4 and 6 had to be issued as also the reason for
the delay in issuing the fresh Notifications have already been indicated
above. As regards the submission that Section 17(4) of the Act has
been erroneously invoked in the fresh Notification under Section 4(1)
dated 20th May, 1982 also and that inquiry under Section 5A had again
to be made before issuing this Notification, suffice it to point out that
once an inquiry under the said Section had already been made and the
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parties bad been given full opportunity to substantiate their case in the
said inquiry and the State Government was not inclined to agree with
the report of the Land Acquisition Officer submitted in pursuance of
that inquiry it would have been a futile exercis~ to repeat the whole
performance again. After the issue of the earlier Notification dated
D 26th October, 1978 a period of nearly 31/i years had expired when the
fresh Notification dated 20th May, 1982 under Section 4(1) was issued
and apparently the necessity to acquire Plot No. 289 during this period
became more acute due to this delay. Further, as stated in the Notification dated 20th May, 1982 itself the urgericy had become more imminent on account of the direction issued by this Court on 2nd March,
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1982 in Writ Petition No. 1318 of 1982 filed by the traders challenging
the Notification under Section 7(2)(b) of U.P. Act No. 25 of 1964.
Consequently, we find it difficult tO hold that the opinion of the State
Government that it was a fit case to invoke Section 17(4) of the Act
was invalid on the ground .that there was no basis or material in support of that opinion. We are further of the view that on the facts
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indicated above it is also not possible to hold that the Notification
dated 20th May, 1982 had been issued by the State Government in
colourable exercise of its power.
At this place it would be relevant to notice that the Notifications
dated 20th May, 1982 and 21st May, 1982 had not been challenged by
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Respondents 1 and 2 on the basis of malafides of any particular officer
of the State Government. What was urged was that it was a case of
legal ma/a fides inasmuch as in issuing the fresh Notification dated 20th
May, 1982 under Section 4(1) of the Act, an attempt was made by the
State Government to circumvent the direction issued by this Court in
Civil Appeal No. 2970 of 1979 to make inquiry under Section 5A of the
H Act and to proceed thereafter in accordance with law. Suffice it to say,
KRISHI UTPADAN SAMIT! v. R.P. MANGAL [OJHA, J.]
195
so far as this submission is concerned that the State Government in
pursuance of the aforesaid direction given by this Court did make an
inquiry under Section 5A of the Act and in the said inquiry full
opportunity was given to the concerned parties to substantiate their
case. It is, therefore, difficult to agree with the submission of learned
counsel for Respondents 1 and 2 that an attempt was made by the State
Government to circumvent the direction of this Court. As seen above,
the State Government was not bound to agree with the report of the
Land Acquisition Officer and it has not been disputed even by learned
counsel for the respondents that it was open to the State Government
to take a contrary decision and to issue a Notification under Section
6( 1) of the Act on the receipt of the report dated 20th January, 1981 of
the Land Acquisition Officer. That the State Government in the
instant case was not inclined to agree with the report of the Land
Acquisition Officer has already been indicated above. The reasons for
the delay in taking further steps as also for issuing fresh Notifications
under Sections 4(1) and 6 have also been indicated. On these facts we
are of the opinion that a case of even legal ma/a fides is not made out.
The decision of this Court in the case of State of Punjab v. Gurdial
Singh & Ors., [1980) 1 S.C.R. page 1071 on which reliance has been
placed by learned counsel for Respondents 1 and 2 is of no assistance
inasmuch as the plea of ma/a fides in that case was based on personal
malice. So also is the position with regard to the decision of this Court
in The Collector (Distt. Magistrate) Allahabad and Anr. v. Raja Ram
Jaiswal etc., [1985) 3 S.C.R. Page 995. That was a case where land had
been acquired for a cinema theatre in the vicinity of the building
housing the Hindi Sahitya Sammelan. It was pointed out that the
power to acquire land is to be exercised for carrying out the public
purpose. If the authorities of the Sammelan cannot tolerate the existence of a cinema theatre in its vicinity it could not be said that such a
purpose would be a public purpose. May be, the authority of the
Sammelan may honestly believe that the existence of a cinema theatre
may have the pernicious tendency to vitiate the educational and
cultural environment of the institution and therefore, it will like to
wish away a cinema theatre in its vicinity. But that hardly constitutes
public purpose. Such is not the situation in the instant case.
The learned counsel for Respondents 1 and 2 in support of his
submission that since this Court by its order dated 22nd October, 1979
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in Civil Appeal No. 2970 of 1979 had issued a direction to hold an
inquiry under Section SA of the Act and to proceed with the matter in
accordance with law it was incumbent on the Government to take a
decision that notwithstanding the report of the Land Acquisition
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Officer dated 20th January, 1981 it was necessary to acquire Plot
No. 289, placed reliance on the decision of this Court in P.L. Lakhan·
pal v. Union of India & Ors., [1967) 1 S.C.R. page 433 where while
dealing with Rule 30A of the Defence of India Rules, 1962 it was held
that according to dictionary "decision" means "settlement, (of question etc.), conclusion, formal judgment, making up one's mind,
resolve, resoluteness, decided character." and on Siemens Engineering
& Manufacturing Co. of India Limited v. Union of India & Anr.,
[1976) (Supplementary) S.C.R. page 489 where while dealing with the
provisions of the Indian Customs Tariff it was held that if courts of
law are to be replaced by administrative authorities and tribunals, as
indeed, in some kinds of cases, with the proliferation of Administrative Law, they may have to be replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to
the persons sought to be affected by their orders and give sufficiently
clear and explicit reasons in support of the orders made by them.
Rel.iance was placed on some other cases also but we do not find it
necessary to deal with them in detail inasmuch as to us it appears
firstly, that the Government in the instant case was all through of the
opinion that Plot No.