1. These six petitioners proceed on similar facts and raise similar questions of law; accordingly they are being decided by a single judgment.
2. In all these petitions the petitioners challenge the legality of the acquisition by the State Government of certain agricultural plots situate in the village Begambad in the Tahsil of Ghaziabad in the district of Meerut, of which they are the tenure holders. By the notification dated January 27, 1961, issued under Sub-section (1) of Section 4 of the Land Acquisition Act the State Government notified for general information that those plots were needed for a public purpose, that is to say the construction of an 'Employees State Insurance Corporation Hospital at Modinagar.' The notification is coupled with an order under Sub-section (4) of Section 17 directing that the provisions of Section 5-A of the said act would not apply. This notification was followed by another notification of the State Government under Section 6 of the Act, dated February 1, 1962, notifying that the land mentioned in the notification under Section 4 was needed for the construction of a hospital at Modinagar by the Employees State Insurance Corporation, New Delhi.
3. The Employees State Insurance Corporation is a creature of the Employees State Insurance Act, 1948. This Act is professedly designed to provide for certain benefits to employees in caseof sickness, maternity and employment injury. Sub-section (1) of Section 3 creates the Employees State Insurance Corporation for the purpose of administering the scheme of Employees State Insurance in accordance with the provisions of the Act. Sub-section (2) of Section 3 provides that the Employees State Insurance Corporation shall be a body corporate having perpetual succession and a common seal and shall by the said name sue and be Sued. The Corporation would accordingly be a company as denned in the Land Acquisition Act.
Under Section 4 the membership of the Corporation comprises of the Minister for labour in the Central Government (he is an ex-officio Chairman of the Corporation) the Minister for Health in the Central Government (he is an ex-officio Vice-Chairman of the Corporation), about five persons to be nominated by the Central Government, of whom at least three are officials of the Central Government, one person each representing each of the State in which the Act is in force to be nominated by the State Government concerned, one person to be nominated by the Central Govt. to represent the Union territories, five representatives of the employers, five representatives of the employees, two representatives of the medical profession, and two persons to be elected by Parliament.
Sub-section (1) of Section 16 empowers the Central Government to appoint Chief officers of the Corporation. Section 19 provides that the Corporation may, in addition to the scheme of benefits specified in the Act, promote measures for the improvement of the health and welfare of insured persons and for the rehabilitation and reemployment of insured persons who have been disabled or injured. Sections 26, 27 and 39 reveal that the funds of the Corporation consist partly of the contributions made by the employers and the employees, partly of grants, donations and gifts, from the Central or the State Govt. local authority or any person as well as of a grant from the Central Government of a sum equivalent to two thirds of the administrative expenses of the Corporation not including therein the cost of any benefits provided by or under the Act. By Clause (iv) of Section 28 the Corporation is empowered to expend money from the fund for the establishment and maintenance of hospitals, dispensaries and other institutions and the provision of medical and other ancillary services for the benefit of insured persons, and, where the medical benefit is extended to their families, their families.
4. It would appear from the foregoing examination of the provisions of the Employees State Insurance Act that the Employees State Insurance Corporation is a public Corporation mainly controlled and subsidised by the Government for the benefit of the employees. Its object is to render service to a penurious section of the public.
5. In his counter-affidavit Dr. K.K. Mathur, the Deputy Director of Medical and Health services, U. P. Kanpur, states that the Employees State Insurance Corporation provides medical facilities free Of charge to the employees and that the hospital, when constructed, would provide for the outdoor and indoor treatment of employees. All this is not effectively denied by the petitioners.
6. In the Gazette, dated January 19, 1962, there is published an agreement between the Director General, Employees State Insurance Corporation, New Delhi, and the Governor of Uttar Pradesh, in accordance with the provisions of part VII of the Land Acquisition Act. The petitioners do not allege that the procedural provisions of part VII of the Act have not been observed. They only point out that the acquisition for the construction of a hospital by the Employees State Insurance Corporation is invalid, because, firstly, the public would not be directly entitled to use the hospital and secondly, the State Government could not simultaneously publish the notification under Section 4 and the order under Sub-section (4) of Section 17.
7. On the first part of their case they rely on R.L. Arora v. State of Uttar Pradesh, 1962 All LJ 362 : (AIR 1962 SC 764). Before that case is discussed here, it would be proper to refer to two provisions in part VII of the Land Acquisition Act. Part VII provides for the acquisition of land for companies. It would apply to the acquisition of the petitioners' land by the Employees State Insurance Corporation, which, as already held, is a company, though I think, a quasi-Government company. Part VII comprises inter alia Sections 39, 40 and 41. Section 39 provides that the provisions of Sections 6 to 37 shall not be put in force to acquire land for any company unless with the previous consent of the appropriate Government, nor unless the company shall have executed the agreement mentioned in Section 41. Sub-section (1) of Section 40 provides that the appropriate Government shall not give consent unless it is satisfied either on the report of the Collector under Section 5-A or from an enquiry of its own that the acquisition is needed for the construction of some work which is likely to prove useful to the public. If the Government is so satisfied, it shall ask the company to execute an agreement providing, inter alia, the terms on which the public shall be entitled to use the work.
In Arora's case, 1962 All LJ 362 : (AIR 1962 SC 764) the State Government acquired some land for the construction of a factory by Lakshmi Ratan Engineering Works Ltd., Kanpur. The acquisition was governed by Sections 39, 40 and 41, and was challenged on the ground that the public was not directly entitled to use the factory. On behalf of the Government it was urged that, as the public would be benefited ultimately by the products of the factory, the provisions of Sections 40 and 41 were complied with. After examining the provisions of Sections 40 and 41 the Supreme Court observed that land may be acquired for the construction of a factory by a company only if the factory, when constructed, would 'be directly useful to the public which should be able to make use of it''. As in Arora's case the public could not make use of the factory and factory was not directly useful to it, it was held that the acquisition was in contravention of the provisions of Sections 40 and 41.
I think that Arora's case is clearly distinguishable from the present case. In that case the factory was conceived by a private enterprise; in the present case the hospital is sponsored by a quasi-Government Corporation. In that case the public was not entitled to use the factory and the factory was not directly beneficial to the public; in the present case an impoverished sector of the public in the vicinage of Modinagar would be entitled to use the hospital free of charge. The hospital constructed by the Employees State Insurance Corporation would thus directly minister to the health of a needy section of the public. I am accordingly of opinion that the construction of a hospital by the Employees State Insurance Corporation on the petitioner's land would in no way contravene the provisions of Sections 40 and 41 of the Act.
8. It is pointed out that the agreement does not itself incorporate the terms on which the public shall be entitled to use the works except for the provision that the public would have such right of access to and use of the land and works in the hospital as may be necessary for the transaction of their business with the Employees' State Insurance Corporation. It seems to me that the agreement has been executed in a printed standardised form of contract, so that the contracting parties forgot to mention in the agreement that the employees would be entitled to use the hospital free of charge. This deficiency in the agreement is squarely made op by the averments of Dr. K.K. Mathur in his counter-affidavit that the employees would be entitled to free medical outdoor and indoor treatment in the hospital. I think that I can legitimately look into the counter-affidavit to find out whether any section of the public would be entitled to directly use the hospital.
9. On the second point the petitioners rely on an unreported decision of this Court in Ram Prasad Narain Singh v. The Land Acquisition Officer, Civil Misc. Writ No. 1237 of 1959, D/- 21-9-1961. In that case, as in the present case, the notification under Section 4 and the order under Sub-section (4) of Section 17 were published simultaneously in the Gazette. It was held that it could not be done. This decision followed another decision of this Court in Laxrni Narain Trivedi v. The State of Uttar Pradesh, Special Appeal No. 26 of 1957, D/- 19-12-1959. On the strength of these decisions the petitioner should have been given a decision in their favour. If, however, they have to bear the disappointment of unsuccess, it should not be supposed that I have deviated from the sanctity of precedent. I feel constrained to take a different course for I cannot see the way to reconcile these decisions with a later decision of the Supreme Court in Smt. Somawanti v. State of Punjab, Petition No. 246 of 1961, D/- 2-5-1962 : (AIR 1963 SC 151).
In Somawanti's case, (AIR 1963 SC 151) the Government of Punjab published a notification under Section 4 along with an order under Sub-section (4) of Section 17 in the Gazette dated August 25, 1961. In the same Gazette it also published another notification under Section 6. On behalf of the petitioners it was argued that the notifications under Sections 4 and 6 could not be published simultaneously. After examining the material provisions of the Land Acquisition Act Mr. Justice Mudholkar, who delivered the majority judgment of the Court, overruled the contention. The learned Judge observed.
'Undoubtedly the law requires that notification under Sub-section (1) of Section 6 must be made only after the Government is satisfied that a particular land is required for a public purpose. Undoubtedly also where the Govt. has not directed under Sub-section (4) of Section 17 that the provisions of Section 5-A need not be complied with the two notifications, that is, under Sub-section (1) of Section 4 and Sub-section (1) of Section 6 cannot be made simultaneously. But it seems to us that where there is an emergency by reason of which the State Government directs under Sub-section (4) of Section 17 of the Act that the provisions of Section 5-A need not be complied with, the whole matter, that is, the actual requirement of the land for a public purpose must necessarily have been considered at the earliest stage itself that is when it was decided that compliance with the provisions of Section 5-A be dispensed with. It is, therefore, difficult to see why the two notifications cannot, in such a case, be made simultaneously. A notification under Sub-section (1) of Section 4 is a condition precedent to the making of notification under Sub-section (1) of Section 6. If the Government, therefore, 'takes a decision' to make such a notification and, thereafter, 'takes two further decisions' that is, to dispense with compliance with the provisions of Section 5-A and also to declare that the land comprised in the notification is in fact needed for a public purpose, there is no departure from any provision of the law even though the two notifications are published on the same day.'
(Emphasis (words in single quotation) mine) Learned Judge went on to say:-
'The preliminary declaration as well as the subsequent declaration are both required by law to be published in the official Gazette. But the law does not make the prior publication of notification under Sub-section (1) of Section 4 a condition precedent to the publication of a notification under Subsection (1) of Section 6 where acquisition is being made after following the normal procedure the notification under the latter section will necessarily have to be published subsequent to the notification under the former section because in such a case the observance of procedure under Section 5-A is interposed between the two notifications. But where Section 5-A is not in the way there is no irregularity in publishing those notifications on the same day.'
10. Somwanti's case, (AIR 1963 SC 151) is thus an authority for the proposition that the notifications under Sections 4 and 6 may be published simultaneously. They can be published simultaneously only when the notification under Section 4 is conjoined with the order under Sub-section (4) of Section 17. Accordingly it seems to me that Somwanti's case, (AIR 1963 SC 151) is also an authority for the proposition that a notification under Section 4 may be published along with an order under Sub-section (4) of Section 17. All that is necessary is that the Govt. should first take a decision to make a notification under Section 4 and then take another decision to make an order under Sub-section (4) of Section 17. If I am interpreting the decision in Somwanti's case, (AIR 1963 SC 151) aright and I trust that I am not making a mistake, then I find, it difficult to reconcile the two decisions of this Court with the decision in Somwanti's case, (AIR 1963 SC 151). And there is little doubt that in such a situation I should follow the decision in Somwanti's case, (AIR 1963 SC 151). The second point therefore does not carry through.
11. For the reasons already discussed I would hold that the acquisitions are not invalid.
12. The petitions are accordingly dismissedwith costs.