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National Textile Corporation Vs. State of Maharashtra and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai High Court
Decided On
Case NumberAppeal No. 106 of 1969 (Misc. Petn. No. 320 of 1964)
Judge
Reported inAIR1976Bom28; (1975)77BOMLR352
ActsSick Textile Undertakings (Nationalisation) Act, 1974 - Sections 3 and 4(2); Land Acquisition Act - Sections 4 and 6
AppellantNational Textile Corporation
RespondentState of Maharashtra and ors.
Appellant AdvocateR.L. Dalal and ;B.N. Shambhu, Advs.
Respondent AdvocateM.S. Sanghavi and ;C.J. Shah, Advs.
Excerpt:
the case focused on the meaning of ' all other encumbrances' in section 4 (2) of the sick textile undertakings (nationalisation) act, 1974 - the notifications under sections 4 and 6 of the land acquisition act for acquisition of land belonging to a company were examined in this context - the court held that the said notifications did not cease to be effective qua the land in question on the coming into operation of the sick textile undertakings (nationalisation) act, 1974 - section 3: [s.b. mhase, d.s. bhosale & a.s. oka, jj] offences of atrocities - complaint under held, merely because the caste of the accused is not mentioned in the fir stating whether he belongs to scheduled caste or scheduled tribe, it cannot be a ground for quashing the complaint. after ascertaining the facts.....tulzapurkar, j. 1. this appeal has been preferred by national textile corporation (a company incorporated under the companies act 1956 which has been allowed to be substituted in place of the original appellant who was the ahmedabad jupiter spg. wvg. & mfg. co. ltd) against the judgment and order passed by vimadalal j. on 11th august, 1969 whereby the learned judge dismissed the writ petition filed by the original appellant being misc. petition no. 320 of 1964 with costs.2. the few facts giving rise to the filing of misc. petition no. 320 of 1964 may be stated. the original appellant -- petitioner. the ahmedabad jupiter spg. wvg. &mfg.; co. ltd., owned the land in question as a part of the mill premises situate at parel bombay. by a notification dated 19-6-1961 issued under section 4 of.....
Judgment:

Tulzapurkar, J.

1. This appeal has been preferred by National Textile Corporation (a Company incorporated under the Companies Act 1956 which has been allowed to be substituted in place of the original appellant who was The Ahmedabad Jupiter Spg. Wvg. & Mfg. Co. Ltd) against the judgment and order passed by Vimadalal J. on 11th August, 1969 whereby the learned Judge dismissed the writ petition filed by the original appellant being Misc. Petition No. 320 of 1964 with costs.

2. The few facts giving rise to the filing of Misc. Petition No. 320 of 1964 may be stated. The original appellant -- petitioner. The Ahmedabad Jupiter Spg. Wvg. &Mfg.; Co. Ltd., owned the land in question as a part of the Mill premises situate at Parel Bombay. By a notification dated 19-6-1961 issued under Section 4 of the Land Acquisition Act the State Government notified that the said land admeasuring 5900 sq vds. was likely to be needed for public purpose viz. for a Municipal School and Play Ground and it was notified that if the Government was satisfied that the said land was needed for the aforesaid purpose, the final notification to that effect under Section 6 of the Land Acquisition Act would be published in due course and the Deputy Collector of Bombay was appointed as an Officer to perform the functions of the Collector under Section 5A of the said Act in respect of the said land. objections were invited and the original petitioner - Company lodged its objections and after a hearing was given a report was submitted by the Deputy Collector to the State Government and on a consideration of the report and after being satisfied that the said land was needed to be acquired at the public expense of the Bombay Municipal Corporation for the public purpose mentioned above the State Government issued a notification under Section 6 of the Act on 29-5-1964 and the Special Land Acquisition Officer (7), Bombay was appointed under Section 3(c) of the said Act to perform the functions of a Collector for all proceedings thereafter to be taken in respect of the said land. The schedule to the notification gave particulars of the land in respect whereof the same was issued and also stated the public purpose for which the said land was being acquired viz. for Municipal School and Play Ground Notice under S. 9 of the Act was issued on 27-6-1964 and served upon the original petitioner -company. On 22-8-1964 the original petitioner -- Company filed Misc. Petition No. 320 of 1964 challenging the said acquisition. The acquisition was challenged on two grounds:(1) that the procedure of direct negotiation under Section 90 of the Bombay Municipal Corporation Act had not been followed in the case and therefore the action taken under Section 91 of that Act was bad and (2) that the impugned notification had been issued mala fide inasmuch as the area which was sought to be acquired was far in excess and beyond the reasonable requirements of a Municipal School and play ground. The learned Judge negatived both the grounds on which the acquisition was sought to be challenged before him. Relying upon an unreported judgment delivered on 11-8-1967 in Misc. Petition No.132 of 1965 he took the view that negotiations for acquisition of land by private agreement were not a condition precedent to the exercise of powers conferred upon the State Government Under Section 4 of the Land Acquisition Act. It may be stated that this view taken by the learned single Judges in these aforesaid two Misc. Petitions has been upheld by the Supreme Court in the case of Ambalal Purshottam v. Ahmedabad Municipal Corporation reported in : [1968]3SCR207 . On the other question as to whether the area which was sought to be acquired was far in excess of reasonable needs of a Municipal School and play ground, he took the view again relying upon the two Supreme Court's judgment -- one in the case of Smt. Somawanti v. State of Punjab reported in : [1963]2SCR774 and the other in the case of Raja Anand Brahma Shah v. State of Uttar Pradesh reported in : [1967]1SCR373 that unless the petitioner -- Company was in apposition to point out that this acquisition, which it is said was far in excess of the real need, was being done under colourable exercise of power or was malafide, the petitioner- company could not succeed in their heir challenge to the impugned notification. He further took the view that the question whether the land that was sought to be required was really needed or not or was far in excess of the real need or not was the matter which the Government had to decide which the Government had to decide before issuing the notification under Section 6 of the Act and that therefore unless it was shown that the area which was sought to be acquired was so excessive as to lead the Court to come to a conclusion that the proposed acquisition constituted a colourable exercise of power or was mala fide, the petitioner- Company could not succeed before him and on he facts of the case he further took the view that the petitioner-Company had failed to establish that the area sought to be acquired was so much far in excess of the real need as to constitute the purported acquisition mala fide. An application was made on behalf of the petitioner - Company before the learned Judge at a subsequent stage of hearing for permission to lead oral evidence to establish their contention that the area sought to be acquired was far in excess of the real need of the Corporation for a Municipal School and play ground. Since the application was made at a late stage the learned Judge rejected that application. On the materials that were placed before him he took the view that the petitioners -company had failed to establish its case. He therefore, dismissed the petition with costs. It is this order passed by the learned Judge that is challenged in the he present appeal before us.

3. It appears that since the textile undertaking of the original petitioner - company had become a sick textile undertaking, on 8-10-1971 the Management thereof had been taken over by the Central Government under the Industries (Development and Regulation) Act. 1951. On 21st September, 1974, an Ordinance called the Sick Textile Undertakings (Nationalisation) Ordinance , 1974 was promulgated where under with effect from the appointed day i.e. 1st April 1974 the sick textile undertaking of the petitioner -company became vested in the Central Government and immediately it further stood transferred and vested in the National Textile Corporation. On. 21st December 1974 and under Sub-section (2) of Section 1 of the said Act the provisions of Section 32 and 33 of the said Act came into force at once, that is to say , on the date when the enactment was brought on the Statute Boom and the remaining provision of the Act were declared to have come into force on 1st April 1974 and the Ordinance was repealed. In view of Section 3 of the said Act the National Textile Corporation made an application to us for being substituted in place of the original appellant in this appeal and the Corporation also sought permission to amend the petition by incorporating certain additional grounds on which it wanted to challenge the purported acquisition. That application was granted and that is how the National Textile Corporation appears as the appellant before us in the appeal.

4. Mr. Dalal appearing for the appellant-- Corporation has raised two contentions with a view to challenge the purported acquisition. In the first place, he had contended that under Section 3 and 4 of the Sick Textile Undertakings (nationalisation) Act 1974 being Act No. 57 of 1974 on and from the appointed day viz. 1st April 1974 the sick textile undertaking of the original petitioner-Company, which has been included in the list of sick textile undertaking in the First Schedule, has stood transferred to and vested absolutely in the Central Government and immediately thereupon the same has further stood transferred and vested in the National Textile Corporation free from all encumbrances and since the two notifications issued under Section 4 and 6 of the Land Acquisition Act under which the appellant's landed property is sought to be acquired amount to an encumbrance, the two notifications have ceased to operate or to be effective qua the land in question and as such the purported acquisition deserves to be quashed or set aside. Secondly, he contended that the learned Judge was in error in not granting permission to the original petitioner -- Company to lead oral evidence in support of its plea that the purported acquisition was by way of Government or mala fide, inasmuch as, the area sought to be acquired was far in excess of the real need of the Municipal Corporation for a Municipal School and play ground. We shall consider these contentions of Mr. Dalal presently.

5. In order to appreciate the contention that was urged by Mr. Dalal on the basis of the provisions contained in Act. No. 57 of 1974 it will be necessary to set out the relevant provisions of Ss. 3 and 4 of the Act.

'3(1) On the appointed day, every sick textile undertaking and the right title and interest of the owner in relation to every such sick textile undertaking shall stand transferred to, and shall vest absolutely in, the Central Government.

(2) Every sick textile undertaking which stands vested in the Central Government in virtue of sub-section (1) shall, immediately after it has so vested stand transferred to, and vested in the National Textile Corporation.

4(1) The sick Textile undertaking referred to in Section 3 shall be deemed to include all assets, rights, lease-holds powers, authorities and privileges and all property, moveable and immovable including land, buildings, workshops, stores, instruments, machinery and equipment cash balances cash on hand, reserve funds, investments and book debts and all other rights and interests in , or arising out of, such property as were immediately before the appointed day in the ownership , possession, power or control of the owner of the sick textile undertaking, whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto and shall also be deemed to include the liabilities and obligations specified in Sub-section (2) of Section 5.

(2) All property as aforesaid which have vested in the Central Government under Sub-section (1) of Section 3 shall by force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge lien and all other encumbrances affecting it, and any attachment, injunction or decree or order of any Court restricting the use of such property in any manner shall be deemed to have been withdrawn.'

Mr. Dalal has invited our attention to the provision of Section 5 (1) of the said Act where it has been enacted that every liability, other than the liability specified in sub-section (2) thereof, of the owner of sick textile undertaking, in respect of any period prior to the appointed day, has been declared to be the liability of such owner and that the same shall be enforceable against him and not against the Central Government or the National Textile Corporation, while under sub-section (2) of Section 5 it has been provided that the liabilities specified therein alone in respect of sick textile undertaking shall be that of the National Textile Corporation. He also pointed out that under Section 8 of the said Act it has been provided that the owner of every sick textile undertaking shall be given by the Central Government, in cash and in the manner specified in Chapter VI for the transfer to, and vesting in it, under Sub-section (1) of Section 3 of such sick textile undertaking and the right title and interest of the owner in relation to such sick textile undertaking , an amount specified in the First Schedule and further under sub-section (4)of Section 4 of the said Act it has been provided that every mortgage of any property which has vested under the said Act in the Central Government and every person holding any change, lien or other interest in or in relation to any such property shall be required to give, within such time, and in such manner as may be prescribed, an intimation to the Commissioner of such mortgage, charge, lien or other interest and the mortgage or any other person holding such charge, lien or other interest in or in relation to any such property has been declared to be entitled to claim in accordance with his rights and interest, payment of the mortgage money or other dues, in whole or in part, out of the amount specified in relation to such property in the First Schedule and that no such mortgage, charge, lien or other interest shall be enforceable against any property which has vested in the he Central Government. Thus the aforesaid provisions undoubtedly show that the owner of a sick textile undertaking which is vested in the Central Government under said Act, as well as any other persons who may have any monetary claim by way of mortgage, charge, lien or other interest in any manner whatsoever will have to look to the amount specified in the he first Schedule as being the only fund out of which he has to satisfy his claim and that such claim shall not be enforceable against the Central Government or the National Textile Corporation or the property so vested in the Central Government or the National textile Corporation.

6. It is true that under Section 3 read with Section 4(1) of the said act on and from the appointed day the concerned sick textile undertaking together with all assets, property, movable and immovable , etc. and all rights title and interest of the owners in relation thereto vest absolutely in the Central Government and immediately upon such vesting the same also vest in the National Textile Corporation. It is also true that under Sub-s(2) of Section 4 of the said Act all such property vested in the Central Government freed and discharged from all encumbrances affecting it. But the question that arises for our consideration is whether the two notifications that were issued under Section 4 and 6 of the Land Acquisition Act in this case in relation to the land belonging to the original petitioner -Company amount to 'encumbrance' within the meaning of section 4(2), for unless the said two notifications amount to such an encumbrance within the meaning of Section 4(2) the land in question cannot be said to have vested in the Central Government freed from the liability of being acquired under the Land Acquisition Act. Mr. Dalal for the appellant has strongly relied upon the expression shall vest absolutely in occurring in Section 3(1) of the said Act and has further relied upon sub-section (2) of Section 4 for the purpose of contending that the land has so vested in the Central Government freed from liability of being acquired under the provisions of the Land Acquisition Act. There is no doubt that the expression 'shall vest absolutely in' has been used.in sub-section (1) of Section 3. But that itself will not show that the land in question had vested in the Central Government free from liability of being acquired under the provisions of the Land Acquisition Act in other words, it is essential that the notifications in question must amount to or fall within the phrase all other encumbrances occurring in sub-sec(2) of Section 4 and unless the notifications do fall within the purview of that expression occurring in sub-sec (2) of Section 4 the contention of Mr. Dalal cannot obviously be accepted. In other words, the real question that falls for determination in this case is : What is the exact connotation of the phrase all other encumbrances occurring in sub-sec (2) of Section 4?

7. Mr. Dalal pointed out that in Wharton Law Lesion the expression 'Encumbrance' is explained as meaning 'A claim lien or liability attached to property' He has also relied upon the dictionary meaning of the expression Encumbrance as given in Murray's Oxford Dictionary which is to the effect:' A burden on property: a claim, lien, liability attached to property as a mortgage a registered Judgment etc.' Reliance was also placed upon the meaning of the expression 'Encumbrance given in Law Lexicon by Iyer to the effect: Encumbrance means ' a burdensome and troublesome load; a burden, obstruction and impediment, anything that impedes motion or action, or renders it difficult or laborious: clog: hindrance: anything that impairs the use or transfers property ..............'He contended that the two notifications in question constituted a burden or impediment on the appellant's property, diminished the value of the said property and subjected the same to a liability or being acquired under the provisions of the Land Acquisition Act. He also pointed out that by reason of the notifications the appellant's right to use or transfer the said land could be said to have been impaired and therefore the notifications in question constituted an 'encumbrance on the said land and therefore under Section 4(2) of the said Act the said land must be held to have vested in the Central Government and thereafter in the appellant -Corporation freed from the effect of the said notifications and as such the purported acquisition must be quashed.

8. there is no doubt that by reason of the two notifications issued under the Land Acquisition Act. particularly the second notification under Section 6 a declaration is finally made that the land is needed for the public purpose mentioned therein and the issuance of such notifications undoubtedly has so far as is material , a three -fold effect:(a) the price of the land is frozen as at the date of such notification: (b) any outlay or improvements on or disposal of the land acquired. commenced, made or effected without the sanction of the Collector after the publication of Section 4 notification will not under Section 24, be taken into account while determining the compensation payable for such acquisition and (c) title of the owner to the land is rendered unmarketable and cannot be forced upon an unwilling purchaser. In other words, the issuance of these notifications casts a cloud on the owner title so far as future transfers concerned and to a limited extent affects his use and enjoyment of the land. But the question still remains as to whether by reason of issuance of such notifications under Section 4 and 6 of the Land Acquisition Act any encumbrance is created over the land within the meaning of that expression as used in Section 4(2) of the Act No. 57 of 1974. Relying on a Division Bench decision of this Court in Lallubhai Rupchand. v. Mohanlal Sakarchand reported in 36 Bom LR 1041 : AIR 1935 Bom 16 Mr.d Dalal urged that this Court has clearly taken the view that issuance of such notifications has the effect of rendering the owner's title unmarketable so much so that the prospective purchaser under a contract for sale is entitled to repudiate the contract for sale is entitled to repudiate the contract and this is so because the property is subjected to the liability of being compulsorily acquired by the Government even in the hands of the transferee and as such an unwilling purchaser cannot be forced to accept such defective title. The real question that is required to be determined therefore is whether the liability of being compulsorily acquired that gets attached to the property by reason of issuance of these notifications under Section 4 and Section 6 of the Land Acquisition Act amounts to any encumbrance thereon within the meaning of Section 4(2) of the Act No. 57 of 1974 and for that purpose we will have to consider what should be the proper construction of the phrase all other encumbrances occurring in sub-section (20 of Section 4 of the Act.

9. Sub-section (2) of Section 4 of the Act consists of two parts; the first part provides that all property of sick textile undertaking as has been referred to in Section 4(1) shall by force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all other encumbrances affecting it, the second part provides that any attachment, injunction or decree or order of any Court restricting the use of such property in any manner shall be deemed to have been withdrawn. A close analysis of the first part shows two things: first that general words viz. all other encumbrances follow specific words such as any trust obligation, mortgage, charge, lien' and secondly the specific words that precede the general words speak of types of encumbrances occurring in the first part of sub-section (2) will have to be construed ejusdem generis and as such the said phrase will include only such encumbrances that partake the nature of the types of encumbrances specified earlier. Thus the question is whether the notification under Section 4 and Section 6 of the Land Acquisition Act create such an encumbrance on the property which partakes the nature of any trust, obligation, mortgage, charge or lien? In other words, the encumbrance must be of such a nature that upon enforcement thereof the liability thereunder is satisfied that is to say the liability to meet beneficial interest under a trust or the liability arising under an obligation or a mortgage or charge or lien is satisfied and we do not think that by reason of issuance of the notifications in question any encumbrance of this nature is created on the property in question. The notifications under Section 4 and 6 of the Land Acquisition Act do not create any liability which is required to be satisfied from out of the property to which the said notifications relate and therefore, in our view, the notifications cannot be regarded as creating any encumbrance falling within the phrase all other encumbrances' occurring in sub-section (2) of Section 4. It is true that by reason of the notifications the land in question is subjected to the liability of being compulsorily acquired under the provisions of the Land Acquisition Act but that is not the liability contemplated by the phrase all other encumbrances occurring in sub-section (2) of Section 4/ In our view, the matter cannot fall under the second part of sub-section (2). It is true that by reason of the notifications the right to use the property after making improvements therein is to a limited extent affected in view of clause seventhly of Section 24 of the Land Acquisition Act. but the restriction on the use of the property in that manner is not the restriction on the sue thereof by reasons of any direction of the Court in the nature of attachment injunction, decree or order. In this view of the matter, it is difficult to accept Mr. Dalal's contention that the land in question has vested in the Central Government or the National Textile Corporation freed from the effect of the two notifications issued under Section 4 and Section 6 of the Land Acquisition Act by reason of Section 3 read with Section 4(2) of the Act 57 of 1974.

10. Mr. Dalal , however, urged that the phrase all other encumbrances' occurring in Section 4(2) of the said Act ought not to be construed by adopting the doctrine of ejusdem generis and if it was not so contoured the phrase would have a wider meaning and the notifications in question should be regarded as creating an encumbrance in falling within Section 4(2) of the Act. We are not inclined to accept this submission of Mr. Dalal, for both the requirements are satisfied for applying the rule of ejusdem generis but even if the phrase all other incumbrances occurring in sub-section (2) of Section 4 were to be given a wide meaning by not confining it to types of encumbrances indicated earlier, still it is difficult to accept contention of Mr. Dalla that the notifications in question constitute or create an encumbrance on the land in question. Mr. Dalal urged that in that event any burden or obstruction or impediment that is imposed upon the full rights of the owner to deal with or dispose of his land in any manner he likes and which would continue to attach or run with the land would amount o an encumbrance on the land and he pointed out that it cannot be disputed that the issuance of notifications in question has the effect of diminishing the value of the property by pegging the price thereof to the market value as on the date of issuance of the notification under Section 4 of the Act and further the notifications in question have subjected the land to a liability of being acquired under the provisions of the Land Acquisition Act and since this liability of being acquired would run with the land that would be an essential characteristic of an encumbrance and therefore the notifications in question should be regarded as creating an encumbrance on the land in question. In two passages in Salmon on Jurisprudence . 12th Edition . At Page 241 under the sub-heading Rights in re propria and rights in re alien the learned author has stated thus:

'Rights may be divided into two kinds, distinguished by the civilians as Jura in re propria and jura in re alien. The latter may also be conveniently termed encumbrances, if we use that term in its widest permissible sense. A right in re alien or encumbrance is one which limits or derogates from some more general right belonging to some other person in respect of the same subject -matter. All other are jura in re propria'

At Page 242 the learned author has observed as follows:

'it is essential to an encumbrance that it should in the technical language of our law, run with, the right encumbered by it. In other words, the document and the servant rights are necessarily concurrent . By time it is meant that an encumbrance must follow the encumbered right into the hands of new owners, so that a change of ownership will not free the right from the burden imposed upon it. If this is not so -- if the right is transferable free from the burden -- there is no true encumbrance'.

There could be no dispute with the statements of law contained in the aforesaid two passages but the first passage merely brings out the distinction between two types of rights, in re alien while in the second passage the learned author has indicated that on essential characteristic of an encumbrance is that it must run with the right encumbered by it, in other words, the burden or liability must run with the right encumbered by it so that a change of ownership will not free the right from the burden imposed upon it. It is thus clear that all that has been stated in the second passage quoted above is that a burden or liability attaching to any property must run with the property in order that the same should be called an encumbrance but that does not mean that every burden or liability which runs with the property must be an encumbrance. It is well settled that the question whether a particular burden or a liability which attaches to the property will amount to an encumbrance thereon or not will depend upon the facts and circumstances of each case. For instance, a lease of property which is contracted to be sold may or may not be an encumbrance depending upon whether the vendor has covenanted to be give vacant possession and it will be an encumbrance if vacant possession is agreed to be given but not otherwise. Therefore, every burden or liability that runs with the land would not be an encumbrance. Take the case of a sick textile undertaking whose assets and properties are to vest in the Central Government and thereafter in the National Textile Corporation under this very Act 57 of 1974. Suppose among the several assets belonging to it is one open plot of land in respect whereof a building lease for period of 99 years has been granted and a construction consisting of several tenements has been put up by the lessee and tenements have been let out; then surely it would be preposterous to suggest that under Section 3 read with Section 4(2) , the plot of land would vest in the Central Government freed from the burden of the building, its tenements and tenants; presumably only the reversion in the plot of land, would vest in the Central Government. Conversely, if one of such assets happens to be a leasehold property it would be futile to suggest that after such leasehold vest in the Central Government under Section 3. The Central Government under Section 3, the Central Government under Section 4(2) is free from the liability to pay the rent to the landlord in respect of such leasehold property and it cannot be disputed that the liability to pay the rent to the landlord is a liability that runs with the property which is the subject-matter of the leasing. In other words, it will not be possible to accept the contention of Mr. Dalla that because under two notifications issued under Section 4 and 6 of the Land Acquisition Act is liability of being compulsorily acquired gets attached to the landlord in question or so to say such liability runs with that land the two notifications should be regarded as creating an encumbrance over the land falling within Section 4(2) of the Act. In our view though by reason of the two notifications a burden is cast upon the land in question in that the land is subjected to the liability of being compulsorily acquired under the provisions of the Land Acquisition Act, such burden or liability would non fall within the expression encumbrance under Sub-section (2) of Section 4.

11. There is yet another aspect of the matter which will have a bearing on the question under consideration. The sole object or the intention of making provision like sub-section (2) of Section 4 of the Act appears to be that all property of the sick textile undertaking should vest in the Central Government freed and discharged from encumbrances. In other words, whatever encumbrances that might be subsisting on the property should no longer bind the Central Government or the Textile Corporation which should be free to deal with it thereafter as it likes and if that be the real object or intention of sub-section (2) of Section 4. then clearly the liability of being acquired that gets attached to the land by reason of the issuance of the notifications under the Land Acquisition Act was never intended to be covered by the expression all other incumbrances occurring in sub-section (2) of Section 4. Assuming that this land got vested in the Central Government and thereafter in the National Textile Corporation under Section 3 read with Section 4(2) freed from the aforesaid burden or liability of being acquired. it was not disputed before us by Mr. Dalal that it was open to the appropriate Government immediately thereafter to acquire that very land by issuing fresh notifications under Section 4 and Section 6 of the Land Acquisition Act and we do not see any hurdle in the appropriate Government acquiring the very land after the same got so vested in the National Textile Corporation under Section 3 of the Act. If, therefore, after the property had vested in the national Textile Corporation the same could be acquired by appropriate Government we fall to understand as to what purpose could be achieved by holding that the earlier notifications issued under the Land Acquisition Act created an encumbrance which the National Textile Corporation got rid of under Sub-section (2) of Section 4 of the Act No. 57 of 1974. Looking at the question from his angle, we are of the view that the phrase all other incumbrances occurring in sub-section(2) of Section 4 cannot include any such burden or liability to which the land is subjected by reason of issuance of notification under Section 4 or Section 6 of the Land Acquisition Act.

12. In this view of the matter it is clear to us that the provisions of Section 4(2) of the Act cannot be availed of by the appellant before us for the purpose of contending that the Notifications in question in ceased to be effective qua the land in question and, therefore , the contention of Mr. Dalla must fail.

13. As regards the other contention we do not agree that the learned Judge was in error in rejecting the applications of the original petitioner to lead oral evidence in support of its case that the purported acquisition was by way of colourable exercise of power or mala fide. Initially an application was made for permission to lead oral evidence in support of that plea on 16-7-1969 but the type of evidence that was offered at that time was the evidence that the offered at that time was the evidence of an expert which would have been in the nature of opinion evidence. The learned Judge, therefore , by his order dated 16-7-1969 declined to give permission to the original petitioner to lead that type of evidence. Admittedly even that type of evidence was not ready with the original petitioner and an adjournment was sought which was refused. Thereafter, the hearing of the case proceeded and at the conclusion of the hearing the petitioner desired to have a further opportunity to settle the matter with the Municipal authorities and therefore the learned Judge reserved his judgment with a view to give the petitioner time to negotiate a settlement. When the matter was placed on board for judgment on 11-8-1969 another application was made seeking permission to lead oral evidence of persons who would depose to the area required by Municipal schools constructed during the relevant period between the two notifications i.e. between 1961 and 1964 in order to show that having regard to such area which was regarded as sufficient the present case was one of colourable exercise of power. The learned Judge rejected that application as in his view the hearing the case the had been concluded and he had reserved the judgment only to enable the petitioner to negotiate a settlement with the municipal authorities which it is desired to do and as such the petitioner was not entitled to make a second request for leading oral evidence. The learned Judge has also noted in his judgment that this type of case had not been even made out by the petitioner in the petition showing the area occupied by municipal schools during the relevant period i.e. between 1961 and 1964. He, therefore, rejected that request and proceeded to deliver his judgment. In the circumstances mentioned by the learned Judge we do not think that he was wrongly rejected the prayer made he has wrongly rejected the prayer made by the original petitioner to lead oral evidence in the case. In the absence of any material on record the learned Judge took the view that the petitioner had failed to establish that it was a case of colourable exercise of power and or that the purported acquisition was mala fide and we are of the view that the finding of the learned Judge in that behalf is correct.

14. In the result , appeal fails and is dismissed with costs. The attorneys for the respondents are at liberty to withdrawn the sum of Rs. 500/- deposited by the appellants as security for costs.

15. Appeal dismissed.


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