# STATE OF GUJARAT & ANOTHER v. SANKALCHAND KHODIDAS PATEL

- **Citation:** [1978] 2 S.C.R. 178
- **Court:** Supreme Court of India
- **Decided:** 1978
- **Case number:** Civil Appeal No. 177 of 1973
- **Bench:** Untwalia, P. N. Shinghal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-gujarat-another-v-sankalchand-khodidas-patel-7338
- **Pages:** 5

## Headnote

Land Acquisition Act 1894-Section 4 and 6-Public
purpose-Abandonn1ent of intention to con'tribute part of the compensation
to be awardedWhetlter lligh Court in first appeal by deciding a question without any pleading
and issue can set aside the judgment of trial court.
The State of Gujarat issued a notification under s. 4 of the Land Acquisition
Act on 23-5-1958. The public purpose mentioned was for the construction of
houses for co-operative society.
An erratum was issued pointing out that the
Co-operative Society was of the backward class people. Thereafter. notification under s. 6 was issued on 13-8-1960 in which also it was declared that the
land was required for the public purpose of providing housing facilities for the
backward class peop1e.
The respondent filed a suit on 8-2-1961,
challenging
the validity of the notification under s. 4 and 6 and praying for perpetual
injunction.
The City Civil Court dismissed the suit. The High Court, however, allo\ved
the respondent's appeal on the ground that the acquisition was not for a
public purpose within the meaning of s. 6 of the Act as the intention declared
by the Government to pay the amount of subsidy in respect of the acquisition
\Vas, by
r.ecc~sary implication, abandoned.
Allowing the appeal by certificate,
HELD : ( 1) Before the trial court no plea was taken that the appellant
abandoned its intention to pay part of the compensation to be awarded for the
acquisition.
It was therefore not permissible for the High Court to decide the
controversy on a plea which was not
taken
at
all
and
which
was
not
the subject matter of any issue at the trial.
In fact the six contentions raised
before ihe High Court also· did DOit include the question of abandonment. The
High Court therefore committed an error of law in deciding the· appeal on the
finding of ;:ibandonment of the origirlal intention of the St.ate Government to
pay a part of the compensation.
Even otherwise there \Vas no real basis for
the High c·ourt 's finding about the abandonment of the intention of the State
Government to pay a part of the compensation. [180 B-D]
(2) The High Court committed obvious error of law in arriving at its
finding and its finding of fact could not be sustained, [180 D]
(3) The High Court was wrong in relying on the non-publication of the
award because, as early as 1961, the respondent had filed a suit and an order
was made by the trial, court restraining the appellants
from disturbing and
obstru·cting the possession of the respondent. The evidence clearly showed that
the State Government had taken a clear decision to pay a part of the compensation for the cost of acquisition. The fact that the State had preferred the
present ap~real clearly showed that it had not abandoned its intention to make
the acquisition on payment of a part of the compensation out of public
revenue. [180 F-G, 182 D-E]

## Text

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178
STATE OF GUJARAT & ANOTHER
v.
SANKALCHAND KHODIDAS PATEL
(DEAD) BY L.Rs.
November 9. 1977
[N. L, UNTWALIA AND P. N. SHINGHAL, J.J
Land Acquisition Act 1894-Section 4 and 6-Public
purpose-Abandonn1ent of intention to con'tribute part of the compensation
to be awardedWhetlter lligh Court in first appeal by deciding a question without any pleading
and issue can set aside the judgment of trial court.
The State of Gujarat issued a notification under s. 4 of the Land Acquisition
Act on 23-5-1958. The public purpose mentioned was for the construction of
houses for co-operative society.
An erratum was issued pointing out that the
Co-operative Society was of the backward class people. Thereafter. notification under s. 6 was issued on 13-8-1960 in which also it was declared that the
land was required for the public purpose of providing housing facilities for the
backward class peop1e.
The respondent filed a suit on 8-2-1961,
challenging
the validity of the notification under s. 4 and 6 and praying for perpetual
injunction.
The City Civil Court dismissed the suit. The High Court, however, allo\ved
the respondent's appeal on the ground that the acquisition was not for a
public purpose within the meaning of s. 6 of the Act as the intention declared
by the Government to pay the amount of subsidy in respect of the acquisition
\Vas, by
r.ecc~sary implication, abandoned.
Allowing the appeal by certificate,
HELD : ( 1) Before the trial court no plea was taken that the appellant
abandoned its intention to pay part of the compensation to be awarded for the
acquisition.
It was therefore not permissible for the High Court to decide the
controversy on a plea which was not
taken
at
all
and
which
was
not
the subject matter of any issue at the trial.
In fact the six contentions raised
before ihe High Court also· did DOit include the question of abandonment. The
High Court therefore committed an error of law in deciding the· appeal on the
finding of ;:ibandonment of the origirlal intention of the St.ate Government to
pay a part of the compensation.
Even otherwise there \Vas no real basis for
the High c·ourt 's finding about the abandonment of the intention of the State
Government to pay a part of the compensation. [180 B-D]
(2) The High Court committed obvious error of law in arriving at its
finding and its finding of fact could not be sustained, [180 D]
(3) The High Court was wrong in relying on the non-publication of the
award because, as early as 1961, the respondent had filed a suit and an order
was made by the trial, court restraining the appellants
from disturbing and
obstru·cting the possession of the respondent. The evidence clearly showed that
the State Government had taken a clear decision to pay a part of the compensation for the cost of acquisition. The fact that the State had preferred the
present ap~real clearly showed that it had not abandoned its intention to make
the acquisition on payment of a part of the compensation out of public
revenue. [180 F-G, 182 D-E]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 177 of 1973.
From the fi.Jdgment and Decree tiated the 17th/18th February
l 972 of the Gujarat High Court in First Appeal No. 275 of 1966.
S. T: Desai, P. H. Parekh and M. N. Shroff for the Appellants.
D. V. Patel, Vasuben P. Shah, S. K. Dholdkia and Raju Ramachandran for the Respondents.
Hamid Kureshi for the Intervenet
GUJARAT v. s. K. PATEL (Shinghal, J.)
I 79
The Judgment of the Court was delivered by
SHINGHAL J.,-This is an appeal by the defendant State of Gujarat
;and another against the appellate judgment and decree of the Gujarat
High Court dited February 17 /18, 1972, on a certificate under Arti-
-cle 33(1) (b} of the Constitution as it stood before the Constitution
(Thirtieth Amendment) Act, 1972.
The case arose on a suit instituted by the plaintiff Sankalchand
Khodidas Patel on February 8, 1961, to challenge the validity of the
notillcations issued by the defendant-State under section 4 and 6 of
the Land Acquisition Act, 1894 (hereinafter referred to as the Act)
in respect of land bearing survey number 146, in Dariapur- Kazipur
.area of Ahmedabad City. The notification. under section 4 was issued
011 May 23, 1958, in respect of 1 acre 36 gunthas of land.
It was
·stated in the notification that the land was likely to be needed for a
"public purpose, viz., for the construction of houses for New Sarvo-
·day" Cooperative Housing Society Ltd., at Dariapur-Kazipur, A11IDedabad." An erratum was issued on August 20, 1959, by which it was
further clarified that the land was required for "providing housing
i'acilities of New Sarvodaya Co-operative Housing Society, Ltd., for
Backward Class People at Duriapur-Kazipur, Ahmedabad." The noti-
'.fication under section 6 of the Act was issued on. August 13, 1960,
in which it was declared, inter a/ia, that the land was required for the
'"Public purpose" specified in column 4 of the Schedule, namely, for
providing housing facilities for the backward Class people referred to
.above.
The plaintiff prayed for a declaration that the notificaticns
,;ere illegal and null and void, and for a perpetual injunc·ion restraining the defendants and their agents etc. from taking possession or the
iland or disturbing the plaintiff's possession.
The defendant tr.aversed the claim in the plaint and specifically
pleaded _that the acquisition was for a public purpose and that it had
(as the acquiring body) "agreed to pay the amount of compensation
when asked for to the plaintiff".
The City Civil Judge dismissed the
;;uit by his judgment dated March 1, !966. The High Court however
allowed the plaintiff's appeal, set a'side the Trial Court's decree, declared
the notification under section 6 0£ the Act to be bad in law and
-void, and perpetually restrained the dd'endants from enforcing the
notification and from taking any further steps in pursuance thereof.
"This is why the State has come up in appeal to this Court.
A p~rusal of the impugned judgment of the High Court shows that
while it decided some of the points in controversy against the J?laintiff,
at allowed the appeal because it took the view that the acquisition was
not for a public purpose within the meaning of section 6 of the Act
as "the intention declared by the Government to pay the amount of
-subsidy to the Additional Special Land Acquisition Officer in respect of
the land under acquisition ha"s been by necessary implication abandoned." The short question foi consideration in this appeal is whether
this finding has been arrived at according to the law.
We have gone through the pleadings of the parties and the points
<>n which they were at issue in the trial murt.
We find that while issue
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SUPREME COURT REPORTS
(1978] 2 S.C.R_
number (3) raised the question whether the State Goveriiment had:
agreed to contribute towards il1e cost of acqui'siti6n and issue number
(8) dealt with the question whether the acquisition was for a public
purpose, a plea was not taken in the Trial Court that the defendant
State abandoned its intention to pay a part of the compensation, to
be awarded for the property wholly or partly out of public revenues.
It was therefore not permissible for the High Court to decide the controversy on a plea which was not taken at all and which was not the·
subject matter of any issue at the trial. There is nothing in the m:ord
to show that the parties knew that the question of abandonment of
the original intention was a point for trial, or that they had any opportunity to lead _their evidence in regard to it and availed of that opportunity.
Our attention has in fact been invited by Mr. Desai, on behalf of the appellant, to the six contentions which were raised by
counsel for the plaintiff in the High Court, but none of them dealt with·
the 4uestio11 of abandonment.
The High Court therefore committed
an error of law in deciding the appeal on the finding of abandonment
of the original intention of the State Government to pay a part of the;
compensation to be awarded to the plaintiff for the acquisition.
Even otherwise, we find that there was no real basi's for the High·
Court's finding about the abandonment of the intention of the State
Government to pay a part of the eompensation.
The High Court
arrived at its finding on the basis of the documentary and oral evidence referred to by it in the judgmxnt but, here again, we P,nd that
it committed obvious errors of law for which its finding of fact cannot
be sustained and has to be set aside.
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The High Court has, in this connection, referred to the "first fact"'
that even though the award of compen'sation under ·section 16 was
,,
ready for publication as early as 1961, it was not published becausethe amount of subsidy in respect of which the Government "had declared its intention as evidenced by Ex. 54 had not been placed at the•
disposal of the Land Acquisition Officer" or the Registrar of Co-operative Societies.
Now _in so far as the question of non-publication Oif
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the award is concerned. it will be sufficient to say that the plaintiff did
not base his cla.i..m on that basis, so that the defeudants had no opportunity to ~xplain why the award was not published over a long period
of time.
It has however been clearly established on the record, and'
was within the notice of the High Court, that the suit was filed on
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February 8, 1961, and soon after the publication of the notice under
section 6 on-August 13, 1960, an order wa·s made by the trial court
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restraining the defendeuts, their agents and officers from disturbing·
and obstructin)! the possession of the plaintiff and from taking over
possession of the suit land etc.
No. useful purpo'se could therefore
be served by notifying the award and there was no justification for
arriving at the finding of "abandonment" simply becaus~ of the "non-
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publicatiou" of the award.
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We have also gone through the evidence of the parties and we find
that the statement of Rameshchandra Jethalal Mehta, who was the
concerned Senior Assistant in the Industries and Co-operative department, and ]elter Ex. 54 of-the State Government, make it quite clear
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GHJARAT V. S. K. PATE! (Shingha/, J.)
I 81'
th•t the State Government had taken a clear decision that it will contril
butc towards the cost of acquisition of the land in question at lhe rate
of Rs. 5 I· per square yard. In fact it was clearly stated in the letter
that the State shall, on that basis, contribute Rs. 45,980/- and that
the expenditure on that account would be debitable to the head mentioned in the lett~r and would be met from the grants whi,ch had been
sanctioned in the budget.
Rameshchandra Jethalal's stafelI)ent about
the government resolution to that effect, has not been shaken in crossII'
examination. It was therefore quite
sufficient to
prove that the
Government did not go back upon that decision and that the sanction
did not lapse with the expiry of the year.
It is anothxr matter that,
because of the protracted litigation, It may have become necessary
for the authorities concerned to obtain a fresh order of allocation of
the fund's for the payment of the government's contribution of Rs.
45,980/- in pursuance of its decision contained in Ex. 54, but there is
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nothing on the record to show that the decision ceased To be operative
after it had been made, or was ever withdraw_n. we do not therefore
find anything on the record which could justify the High Court's finding that that sanction or resolution was withdrawn, rescinded or abandoned at any time.
It appears that the High Court arrived at its finding about the
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abandonment for the further reason that the agreement Ex. 104 was
executed by the co-operative ·society concerned on June 17, ·1960. It
is however not disputed before us that the agreement was obtained
under the impression that the land had been acquired for a company
under Part VII of the Act.
But this was not so because it had been
made quite clear in the notification Ex. 58, which was issued under
section 4 of the Act, that the acquisition was for a "public purpose"
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namely, for the construction of house's ·for New Sarvodaya Co-operative
Housing Society Ltd. and there was nothiug to show thaflhe acquisition was for any company.
The notificatiou under section 6 of the
Act was· also to the same effect, and in that notification it was stated
at four irnport_ant places that the land was needed for the "public
purpose" specified in column No. 4 thereof.
There was therefore
nothing in the two notifications to ·show that the notification was for a
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company. and there was no justification for arriving at a contrary
decision merely because of the execution of agreement Ex. 104 by the
Soc!ety under a 1nis1taken impression.
The High Court has gone on to the State that as the words "or at
the expense of a local body or corporation or company as the case
may be" were not scored off from the notification under 'section 6 of
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the Act. the language of the notification supported its findiug that the
acquisition was for a company, and uot for a public purpose. It is
true that the unnecessary words were not scored off, but the very
fact that. it was stated at as many as four places in that very notification
that the acquisition was for a publlc purpo·se, was sufficient to show
that the omission was inadvertent and could not iustify the finding that
the fond was not acquired for a public purpose but for a company.
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The High Court has made a reference to paragraph 9 of the written
statement also in support of its finding against the defendant.
Here
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again the High Court failed to appreciate that that averment was
made in reply to the plaintiff's contention in paragraph 6 of the plaint
on a question of law regarding the making of contribution out of public
revenues or funds controlled or managed by a local authority. It was
in that connection that the defendant stated in paragraph 9 of the
written statement that the 'acquiring body has agreed to pay the o;uount
of compensation when asked for to the plaintiff" There is nothing in
the averment to show that the payment was to be made by the Cooperative Society and not by the State Government. The High Court
lost sight of the fact that the "acquiring body" was the State. and
could not be the Co-operative Society or any company.
It could thus appear that the High Court committed the aforesaid
illegalities and misread the evidence on record in setting aside
the
finding of the Trial Court in favour of the defendant. It may be that
the amount of compensation, which was to be paid by the
State
Government on account of compensation to be awarded for acqniring
the property out of the public revenues, was not paid, but there can
be no doubt that, as has been stated, a decision had been taken that
it was to be so paid by the Government as required by the second pro-·
vi so to sub-section ( 1) of section 6 of the Act.
As we have stated,
the actual payment wa:S not made because of the protracted litigation,
but the State Government's anxiety to acquire the land for the public
purpose could well be appreciated from the fact that it has adhered
to its intention to acquire the land according to law, and to make
its contribution towards the cdmpensation, as and when necessary.
The fact that the State has preferred the present appeal also goes to
show that it has not abandoned its intention to make th~ acquisition on
payment of a part of the compensation out of public revenues. It may
also be mentioned that Mr. S. T. Desai appearing on behalf of the
State has categorically stated at the Bar that the State Government
will contribute Rs. 45,980/-, from the public revenues, towards compensatibn at the appropriate time.
The position would no doubt have
been different if it had been shown that the Government had abandoned the intention to do so or had decided not to pay any 1'art of the
compensation out of the public revenues, for then the reqmrement of
the second proviso to sub-section (1) of ·section 6 would not have
been fulfilled but, as has been shown, this was really not so.
It would thus appear that the High Court committed an error of
law interfering with the judgment of the trial court.
The appeal is
allowed with costs and the impugned judgment and decree are set
aside and the decree ofThe trial court is restored.
P.H.P.
Appeal allowed.
).
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