Gopalan Nambiyar J.
1. This writ petition was heard by a Full Bench and disposed of by judgment dated 5th October 1972. It was held that the land acquisition proceedings which had been set afoot, had not been validly withdrawn by the issuance of a notification as required by Section 52 (1) of the Kerala Land Acquisition Act read with Rule 7 of the Rules The Government was therefore directed to proceed with the land acquisition until the same is duly terminated by a notification of withdrawal or otherwise. Review Petition No. 91 of 1972 was then filed by Respondents 3. 5 and 6. pointing out that there was in fact a notification dated 19th August 1969 (produced as Ext. R-1 with the review petition) issued under Section 52 (1) of the Act by which the Government withdrew from the land acquisition proceedings The review petition was allowed. This writ petition has accordingly come on for re-hearing.
2. The facts are briefly these: About 80 cents in R. S. No. 52/3-B of Taliparamba amsom, was notified for acquisition under Section 3 of the Kerala Land Acquisition Act, by publication made in the Gazette dated 31-8-1965 (copy Ext. P-1). The acquisition was in pursuance of a requisition by the Taliparamba Panchayat for the construction of a bus-stand. The buildings and the improvements on the plot notified for acquisition, were inspected and valued at Rs. 2,898.79. Objections to the proposed acquisition were filed by the 3rd Respondent under Section 5 of the Act. Enquiry was held on 6-11-1965, and report to the Board of Revenue was submitted on 16-2-1966. The Section 6 declaration was approved on 24-5-1966, and published in the Gazette dated 14-7-1966. At that stage. O. P. No. 2878 of 1966 was filed by the 3rd respondent. It was dismissed on 20-1-1967 on a representation that the petitioner therein had filed a representation to the Government for cancellation of the land acquisition proceedings. This was directed to be disposed of. The said representation dated 18-1-1967 was dismissed on 7-8-1967. The 3rd respondent then filed a petition to the then Revenue Divisional Officer to exclude his five cents of land from the scheme of acquisition. This, it is said, was opposed by respondents 3 to 7. Thereafter, it was heard that the land acquisition proceedings had been dropped. Ext. P-13 dated 18-4-1969 is a COPV of the Government Order dropping the proceedings, and Ext. R-1 filed with the review petition, is the notification itself, withdrawing the land acquisition.
3. The only ground now urged to quash the withdrawal from the land acquisition and to direct the Government to proceed with the same, is that the withdrawal was directed without the Government applying its mind to the question at all and was actuated by irrelevant and improper considerations. The reason stated in Ext. P-13 is that the owner of R. S. No. 52/3-B is willing to acquire (sic) his entire land excluding the five cents and the building thereon for the purpose of the bus-stand, and that the Panchayat will have to pay a large amount by way of compensation if the five cents and the building thereon is acquired. It was noted that the Government had advised the Panchayat to exclude the five cents and take acquisition for the rest of the land, but that the Panchayat was unwilling to do so. It was in these circumstances that the land acquisition proceedings were directed to be dropped.
4. The petitioner's case is that the reason given in Ext. P-13 is quite irrelevant and palpably wrong. The principle embodied in Section 26 of the Kerala Land Acquisition Act was, it was said, that any outlay or improvements on the land acquired, commenced, made or effected without the sanction of the Collector after the date of the publication of the notification under Sub-section (1) of Section 3. had to be left out of consideration. Therefore it was said, that the improvements on the land having been valued at 2.898.79 and the 3rd respondent having put UP a building subsequent to the Section 3 Notification, theconsiderations adverted to by the Government, were wholly immaterial and irrelevant. Before examining this contention, we may point out that in Ext. P-13 the Government had referred to their earlier direction to the District Collector and the District Panchayat Officer to exclude the five cents of land of the 3rd respondent and the building thereon in consideration of the great hardship to the 3rd respondent and the increased expenses to the Panchayat. Reading Ext. P-13 as a whole therefore, it would not be correct to state that the only consideration which operated on the mind of the Government, was the expenses involved in the acquisition of the five cents with the building put up thereon. Again, Sections 25 and 26 lay down positively and negatively, the matters to be taken into account, and to be excluded, from consideration by the court in determining the compensation to be awarded for the land acquired. Strictly therefore, they are not germane to the consideration of adjudging the compensation at the stage of the award. But that may not make any difference, as land value has to be awarded as on the date of the Section 3 Notification and not with respect to the circumstances brought about subsequently.
5. Section 52 of the Act reads as follows:
'52. Completion of acquisition not compulsory, but compensation to be awarded when not completed:
(1) Except in the case provided for in Section 38, the Government shall be at liberty to withdraw from the acquisition of any land of which possession has not been taken.
(2) Whenever the Government withdraw from any such acquisition, the Collector shall determine the amount of compensation due for the damage suffered by the owner in consequence of the notice or of any proceedings thereunder, and shall pay such amount to the person interested, together with all costs reasonably incurred by him in the prosecution of the proceedings under this Act relating to the said land.
(31 The provisions of Part III of this Act shall apply, so far as may be to the determination of the compensation payable under this Section'.
Rule 7 of the Land Acquisition Rules, reads as follows:
'7. On a consideration of the objections and the Collector's report thereon, if the Board of Revenue or the Government is or are satisfied that the Land should be acquired, the declaration under Section 6 shall be approved and sent up for publication in the gazette. If, on the other hand, the Board of Revenue or theGovernment decides or decide to give up the acquisition a notification under Sub-section (1) of Section 52 withdrawing from such acquisition shall be published.'
6. It is plain from the above, that the right and the obligation of the Government to acquire the land for a public purpose, is subject to the liberty under Section 52 to withdraw from the acquisition except (1) so long as possession of the land has not been taken; and (2) in the case provided for in Section 38. Neither the section nor the Rule requires the Government to write out a reasoned order, before dropping the proceedings. The issuance of the notification is all that is contemplated. But the words in Rule 7 'decides or decide to give up the acquisition' would certainly convey the idea that the Government should apply its mind to the question. In the instant case, we are not prepared to say that the considerations of hardship and extra expense, even though the ground of extra expense may not be strictly tenable in law, are so irrelevant and extraneous to the question as to indicate a total non-application or misapplication of the mind. We are not, in these proceedings, sitting in appeal over the proceedings of the Government, dropping the land acquisition. The province for us to interfere is limited: and we do not think that any ground for interference has been made out in that limited sphere.
7. It was argued that the Panchayat had required the acquisition for the purpose of constructing a bus-stand, which had been recognised and acknowledged by the Government to be a public purpose, to support the land acquisition: and that in deciding to drop the same on considerations of hardship and extra expense the Government was favouring the interests of a private individual, namely the 3rd respondent, to the prejudice of the public purpose disclosed. We are unable to accept this argument. It was for the Government, as a matter of policy, to decide the mode and the manner of acquisition of land, even where a public purpose is disclosed; and their decision to acquire is subject to their liberty to withdraw from the acquisition under Section 52. Whether on considerations of hardship or otherwise, it was open to the Government to advice the Panchayat, as they did, to exclude the five cents from out of the notified eighty cents, and take acquisition for the rest. The Panchayat, as disclosed in Ext. P-13, was not prepared to adopt this course. We do not think that. In the circumstances the Government's action was mala fide.
8. It was said again that if the Panchayat was obliged to take a fresh acquisition it would have been necessary to re-notify the land to be acquired whichwould result in increased compensation and greater expense. We are not altogether sure whether this would be the correct position and whether an amendment of the Section 3 Notification issued, excluding a portion of the land, would not suffice for the purpose, having regard to Section 21 of the General Clauses Act. We however express no opinion on the question. The Panchayat's right under Section 65 of the Kerala Panchayat Act is only to request the Government to set in motion the machinery of the Land Acquisition Act. Neither under the Land Acquisition Act nor under the Rules framed thereunder, has the Panchayat any right thereafter to be heard in the matter of proceeding with the land acquisition or dropping the same. Assuming that such a right has to be spelt out on considerations of natural justice, it has been amply proved that the Panchayat was told to take an acquisition for seventy five cents, excluding the five cents of the 3rd respondent, and that it was not agreeable to that course.
9. In Bahori Lal v. Land Acquisition Officer (AIR 1970 All 414 (FB)) it has been recognised that it is open to a person to make a representation to the Government even after Section 6 Declaration (although he has no statutory right to do so) to induce the Government to exercise its right of withdrawal of the notification. On principle, it appears to us that such a representation may well be regarded as a reminder to the Government to exercise its right of withdrawal under Section 52. In that view again, it is possible to say that the Government's action in withdrawing from the land acquisition was not improper. In Governor of Himachal Pradesh v. Avinash Sharma (AIR 1970 SC 1576 at 1578). it was ruled that no order is necessary before a withdrawal, under Section 48 of the Central Land Acquisition Act. corresponding to Section 52 of the Kerala Act.
10. We see no ground to interfere. We dismiss this petition, but make no order as to costs.
Viswanatha Iyer J.
11. I regret that I have arrived at a conclusion different from that of Gopalan Nambiyar J. Mv decision is given below.
The main question arising for decision in this case is about the scope and ambit of Section 52 of the Kerala Land Acquisition Act, 1961. That Section is in the following terms:
'52. Completion of acquisition not compulsory, but compensation to be awarded when not completed.-
(1) Except in the case provided for in Section 38, the Government shall be at liberty to withdraw from the acquisition of any land of which possession has not been taken.
(2) Whenever the Government withdraw from any such acquisition, the Collector shall determine the amount of compensation due for the damage suffered by the owner in consequence of the notice or of any proceedings thereunder, and shall pay such amount to the person Interested, together with all costs reasonably incurred by him in the prosecution of the proceedings under this Act relating to the said land.
(3) The provisions of Part III of this Act shall apply, so far as may be. to the determination of the compensation Payable under this section.' Relying on the words of the section 'Government shall be at liberty to withdraw from the acquisition of any land of which possession has not been taken' it is contended on behalf of the respondents that the power under Section 52 is wide and untrammelled by any conditions and exercisable according to the will and pleasure of the Government. It is even suggested that only a subjective satisfaction alone is required and nothing more. On the other hand it is contended on behalf of the petitioner that no such unfettered power has been conferred by Section 52. The power can be exercised only when the Government is satisfied that the public purpose for which alone the acquisition can be made has ceased to exist or when they are convinced did not exist. There is a further contention that in any view of the matter the order Ext. P-13 and Ext. R-1 notification, withdrawing the acquisition are bad in that they failed to consider the relevant factors and in that matters which are extraneous to the question whether there should be a withdrawal from the acquisition are taken into account. To understand the scope of these contentions the facts stated in the original petition may briefly be noticed.
12. The petitioner Panchayat finding that the existing parking place of buses is situated in a busy portion of Taliparamba town proposed to construct a bus stand within its limits at another place and for that purpose required 80 cents of land in R. S. No. 52/3B. After making detailed investigation of the plot and after verification of the proposal, a requisition was made by the Panchayat with the Government in the prescribed form on 15-1-1965. The proposal was accepted by the Government and a notification under Section 3 (1) of the Kerala Land Acquisition Act was issued and published in the gazette dated 31-8-1965. Notices were also issued to the persons Interested in the land as required under Rule 3 of the Kerala Land Acquisition Rules intimating this proposal. After theproposal was sent up and before the publication of the notification. 3rd Respondent commenced construction of building at this site. As he did not stop the construction even after the notification, the Panchayat caused the land to be inspected and a valuation of the construction that existed at the time of the issue of the notification made. Even this did not stop and persuade the 3rd respondent from proceeding with the construction. He filed objections to the notification under Section 3 (1) before the authorities. They investigated into the various objections under Section 5 of the Act and submitted a report. The Board of Revenue after considering the report made by subordinate authorities was satisfied that the land was required for a public purpose and so issued a declaration under Section 6 of the Act to the effect that the land measuring 80 cents in R. S No. 52/3B of Taliparamba Amsom is needed for a public purpose namely, for the construction of the bus stand at Taliparamba. This was on 24th May, 1966. By the same notification the 2nd respondent was directed to take orders for the acquisition of the land. Taking such orders he issued notices to the claimants to the land to file statements of their claims as required under Section 9 (3) and Section 10 of the Land Acquisition Act. On receiving notice the respondents 3 to 5 and 7 filed an original petition before this Court as O. P. No. 2878 of 1966 questioning the validity of the declaration. Just two days before the original petition was heard, the 3rd respondent submitted a representation to the Government and mentioned that fact at the time of the hearing of the original petition on 20-1-4967. This Court found that the relief asked for cannot be granted and so dismissed the petition, but made an observation that the representation filed by the 3rd respondent before the Government may be considered and orders passed. The Government considered the representation and rejected the same. Thereafter the petitioner-Panchayat was pressing the 2nd respondent (The Land Acquisition Officer) for finalising the proceedings for passing the award. The 3rd respondent again made a representation to the 2nd respondent for modification of the site of acquisition by excluding 5 cents of land with the building from the proposed acquisition. The 2nd respondent by a memo dated 15-5-1968 filed as Ext. P-6, wrote to the Panchayat askina for its views on the matter. The Panchayat found that this modification was not possible, and wrote to the 2nd respondent to speed up the passing of the award. President of the Panchayat also wrote to the District Collector on 7-8-1968 mentioning the urgency of the matter and requestingan early finalisation of award Proceedings. As no progress was seen made in the acquisition proceedings the President of the Panchayat again made a representation, but without any effect. In the meanwhile there was some newspaper report to the effect that the Government have stopped the acquisition proceedings. Then the President of the Panchayat wrote to the Collector drawing his attention to the report and requesting him. if the report is correct, to furnish a copy of the Government Order stopping the proceedings. Thereafter on 17-5-1969 the order of the Government dated 18-4-1969 directing the dropping of the acquisition proceedings was forwarded to the petitioner The withdrawal was also notified in the gazette as per rules. It is in these circumstances that the panchayat moved this Court for a cancellation of the order Ext. P13 and also the notification Ext. R1. They have also prayed for the issue of mandamus to respondents 1 and 2 to proceed further with the land acquisition proceedings initiated earlier.
13. Respondents 1 and 2 have filed a counter affidavit in which it is stated that it is open to the Government to withdraw the acquisition proceedings and they have decided to drop the proceeding taking into consideration the fact that a large amount will have to be paid by the Panchayat for acquisition proceedings if the acquisition is completed on the basis of the original notification and also the fact that the Panchayat did not agree to have a modification of the proposal to exclude 5 cents of land where the building is situated from acquisition.
14. The first contention urged on behalf of the petitioner is that the power of the Government to withdraw an acquisition proceeding is not unfettered though the language of Section 52 may suggest the contrary. Section 52 was enacted for the purpose of reserving a power with the Government to drop the proceedings even after notification under Sections 6 and 9 of the Act are issued and even after an award is passed. Legislative history of this Section discloses its scope. Section 54 of the Land Acquisition Act (X of 1870) was in these terms:
'54. Except in the case provided for In Section 44, nothing in this Act shall be taken to compel the Government to complete the acquisition of any land unless an award shall have been made or a reference directed under the provisions herein before contained.
But whenever the Government declines to complete any acquisition, the Collector shall determine the amount of compensation due for the damage (if any) done to such land under Section 4 or Section 8 and not already paid for under Section 5. and shall pay such amount to the person injured.'
This Section did not enable the Government to withdraw from the acquisition after an award has been made or a reference directed. This was felt to be a hardship. The Select Committee Report dated 2nd February 1893 in para 12 of their report stated the position thus:
'Section 54 of the Act (X of 1870) gives to the Government or the public bodies whom it represents the powers of withdrawal from land it has proposed to acquire. This power however must be exercised before the award is made. After award, withdrawal is prohibited whatever may be the circumstances. Experience has shown that the only occasion on which powers of withdrawal would be really useful are when an award has shown that the Government was seriously misled by an under estimate of the value of the land.....we think therefore that thepower to withdraw should be given after as well as before, the award, but that if so exercised, it should only be on terms of the most liberal compensation to the owner and that, if he is (not?) satisfied with the Collector's offer he should have the same rights of reference to the Judge as in case of acquisition.'
The new Section 48 of the Central Land Acquisition Act 1 of 1894 was enacted on the basis of this report. Section 52 of the Kerala Act is similar in terms to Section 48 of the Central Act. Section 38 and Section 52 of the Kerala Act make it clear that the owner of the land cannot insist except on two situations that the Government should proceed with the acquisition. The two situations are that provided for in Section 38 and taking possession of the land by the Land Acquisition Officer. In all other situations there is a power given to Government to withdraw. It is a special power to liberate themselves from the obligation of proceeding with the acquisition. It is a power to Protect the interest of the Government as against the owner of the land. The owner of the land is entitled only to damages as provided under Sub-sections (2) and (3) of Section 52 if the acquisition Is withdrawn. Sub-sections (2) and (3) throw light on and make clear the scope of Sub-section (1). The withdrawal also cannot be asked for by the owner. That will be inconsistent with Sub-sections (2) and (3). So the power under Sub-section (1) is intended to be used only in cases where it has to be exercised in the interest of the State or the authority for whose public purpose the acquisition proceeding was started. That is why the section is worded in thisform namelv the 'Government shall be at liberty to withdraw'. Vis-a-vis the owner of the land Government's power is not circumscribed by any limits except those provided for in the section. This power is different from the exercise of the power under Section 20 of the Interpretation and Geneal Clauses Act. 1125 to cancel the notification made under Section 6 of the Land Acquisition Act. That power is general and is not affected by this special power (See State of M. P. v. Vishnu Prasad. AIR 1966 SC 1593. para 19). This special power is normally exercised when, on passing the award, the Government finds that it is seriouslv misled by an underestimate of the value of the land. Then the Government by exercise of this special power liberates itself from the compulsion of acquisition and pavs damages to the owner of the land as provided by Sub-sections (2) and (3). There are not many reported, cases in which proceedings for acquisition taken for the public Purpose of non-governmental bodies have been withdrawn by exercise of this power and the scope of the power considered. The cases cited on behalf of the State, namelv State of M. P. v. Vishnu Prasad (AIR 1966 SC 1593). Governor H. P. v. Avinash Sharma (AIR 1970 SC 1576). Jethmull Bhoirai v. State of Bihar (1972(1) SC WR 390) = (AIR 1972 SC 1363). Bahori Lal v. Land Acquisition Officer (AIR 1970 All 414). Doongarsee & Sons v. State of Guiarat (AIR 1971 Gui 46) are all cases in which the scope of the special power when used against the owner of the land involved in the acquisition proceedings came up for consideration at the instance of the owner. The only other case cited, namelv Kotra-basappa v. Panchavva (1967 (1) Mys LJ 405) arose when a company, for whose purpose certain preliminary steps for acquisition had been taken felt aggrieved by the withdrawal of the proceedings and filed a case. The Mysore High Court took the view that the power under Section 52 is unlimited and is circumscribed only by the limitation mentioned in the Section. With respect, I doubt its correctness. In cases where the case falls under Section 38 of the Land Acquisition Act or where possession has been taken there is no scope for the exercise of the power. There Government will have no discretion in the matter. In all other cases, no doubt, the Government have a liberty. Liberty is not licence. Liberty means only discretionary power. No discretion can be unlimited or unfettered. It must be confined within defined limits (See Jaisinghani v. Union of India AIR 1967 SC 1427 at P. 1434. para 14). What those limits are have been stated in a series of decisions. Lord Greene, M. R stated the principles thus in Associated Provincial Picture v. Wed-nesbury Corporation (1947 (2) All ER 680):
'The law recognises certain principles on which the discretion must be exercised but within the four corners of those principles the discretion is an absolute one and cannot be questioned in any court of law. What, then, are those principles? They are perfectly well understood. The exercise of such a discretion must be a real exercise of the discretion. If, in the statute conferring the discretion, there is to be found, expressly or by implication, matters to which the authority exercising the discretion ought to have regard, then, in exercising the discretion, they must have regard to those matters. Conversely if the nature of the subject-matter and the general interpretation of the Act make it clear that certain matters would not be germane to the matter in question, they must disregard those matters. Expressions have been used in cases where the powers of local authorities came to be considered relating to the sort of thing that may give rise to interference by the court. Bad faith, dishonesty -- those, of course stand by themselves -- unreasonableness, attention given to extraneous circumstances, disregard of public policy, and things like that have all been referred to as being matters which are relevant for consideration.'
This principle is emphasized by our Supreme Court in State of Bombay v. K. P. Krishnan (AIR 1960 SC 1223). Gaiendra-gadkar J has observed thus at page 1230, paragraph 17:--
'Similarly it is not disputed that if a party can show that the refusal to refer a dispute is not bona fide or is based on a consideration of wholly irrelevant facts and circumstances a writ of mandamus would lie. The order passed by the Government under Section 12 (5) may be an administrative order and the reasons recorded by it may not be justiciable in the sense that their propriety, adequacy or satisfactory character may not be open to judicial scrutiny, in that sense it would be correct to say that the court hearing a petition for mandamus is not sitting in appeal over the decision of the Government; nevertheless if the court is satisfied that the reasons given by the Government for refusing to make a reference are extraneous and not germane then the court can issue, and would be iustified in issuing, a writ of mandamus even in respect of such an administrative order.'
In Barium Chemicals Ltd. v. Company Law Board (AIR 1967 SC 295) the above decision was approved and it was observed thus at page 323:--
'Though an order passed in exercise of power under a statute cannot be challenged on the ground of propriety or sufficiency, it is liable to be quashed on the ground of mala fides, dishonesty or corrupt purpose. Even if it is passed in good faith and with the best of intention to further the purpose of the legislation which confers the powers, since the Authority has to act in accordance with and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extraneous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation. In any one of these situations it can well be said that the authority did not honestly form its opinion or that in forming it, it did not apply its mind to the relevant facts.'
Again, in Parrv & Co. v. P. C. Pal (AIR 1970 SC 1334) the same principle has been affirmed.
15. The statutory power must be exercised for promoting the policy and object of the statute which confers that power and not to frustrate them. The policy and objects of the Act must be determined by considering the Act as a whole and a construction is always a matter of law for the court. It is not possible to draw a hard and fast line, but if by reason of having misconstrued the Act or for any other reason the authority uses the discretion so as to thwart or run counter to the policy and objects of the Act, the person aggrieved must certainly be entitled to the protection of the court (see Padfield v. Minister of Agriculture, Fisheries and Food. 1968 AC 997). Judgment of Lord Reid.
16. The Government is very often only a machinery to acquire the land required for a public purpose of another body like the Panchayat. The Panchayat can move the Government for acquisition. Section 65 of the Panchayat Act is in these terms;
'65. Acquisition of Immovable Property required by Panchayats. -- Any immovable property which is required by a Panchayat for a public purpose connected with the discharge of the functions imposed on it under this Act. or rules or bye-laws thereunder, or any other law, may be acquired under the provisions of the Land Acquisition Act in force for the lime being and on Payment of the compensation awarded under the said Act, in respect of such property and of any other charges incurred in acquiring it, the said property shall vest in the Panchavat:
Provided that nothing contained in this section shall be deemed to prevent any Panchayat from acquiring immovable property either through private purchase or by free surrender.'
Local self-government authorities are really discharging the functions of theGovernment on certain limited spheres. They can function only within the powers given to them under the statute. The various functions which they are entitled to carry on are enumerated in the various portions of the Act. Most of them are for the eood of the public. Constructing a bus stand or providing other amenities for the good of the public are all duties which local authorities are obliged to provide for in the discharge of their duties of local government. For the performance of those duties if they require any land Section 65 of the Panchayat Act enables them to acquire the land under the Land Acquisition Act. The machinery of Land Acquisition Act can be set in motion. The Government have framed rules laving down the procedure to be followed by the Panchayat for invoking the powers of the Government for acquisition. If the Government is satisfied of the public purpose under Section 6 of the Land Acquisition Act the necessary declaration will be issued. Under Section 55 it is provided that if the provisions of the Land Acquisition Act are put in force for the purpose of acquiring land at the cost of the local authority, the charges of and incidental to such acquisition shall be defrayed by the local authority. The local authority is entitled to appear before the Collector and the court to adduce evidence for the purpose of determining the amount of compensation. But a reference cannot be claimed by them. Thus, one of the objects of the Land Acquisition Act is to assist acquisition of land for a public purpose of a local authority. The Government acts as a machinery under the Land Acquisition Act for such acquisition. There is no other machinery provided for by the Panchayat Act. Necessarily therefore before the power of the Government under Section 52 is exercised the purpose for which the acquisition was initiated whether that purpose has ceased to exist or can be otherwise better served must be looked into. After the award if it is found that the Government has been seriously misled by an underestimate of the value of land that may also be a matter for consideration. If a public purpose is in conflict with an individual's claims it is well settled the individual's claim must subordinate to the public purpose. Recognition of the private Individual's rights and subordinating the public purpose are certainly not the policy and object of the Act. The use of the discretion in that way really will be a thwarting or running counter to the policy and objects of the Act. In this case that has been the result. In the instant case the authorities were satisfied that there is a public purpose. Declaration under Section 6 is conclusive of the purpose and the need. Earlier attempts by the 3rd respondent to prevent a declaration underSection 6 failed. His second representation was again looked into and rejected after the High Court decision in O. P. 2878/66. Even that did not deter him from pressing his claims again before the Government. A suggestion was made by the Government later to the Panchayat to exclude the portion of the area to be acquired. The difficulties and the enormous amount pf compensation that may have to be paid if a fresh notification has to be made were urged by the Panchayat in answer to this suggestion. It cannot be said that their apprehensions are without any basis It is doubtful that after declaration under Section 6 is made acquisition can be limited to a portion of the area notified and the notification withdrawn with respect of the balance area. Anyhow that is not a matter that need be considered by me at this stage. I can only sav that when the decision to withdraw was made there has not been any proper appreciation of the objects of the Act and the earlier decisions of the Government that this land is required for a public purpose.
17. It is said that the reasons given in Ext. P13 need not be looked into, that the notification Ext. R1 is alone sufficient to effectuate a withdrawal for Section 52 does not enjoin the Government to give any reasons for withdrawal. True, it is not necessary that the withdrawal must be by a speaking order. Even if it is not by a speaking order, as it is inherent in the exercise of the power by the authorities that they should not exercise the power so as to frustrate the policy and object of the Act, if it were to appear from all the circumstances of the case that that is the effect of the order of the authority, it appears to me that the court is entitled to interfere. All the more so is the case where the order gives reasons which show that the discretion has not been exercised within the permissible limits. In Ext. P13 two grounds are mentioned for passing the order The relevant portion of the order is in the following terms:--
'Government have examined the whole question in detail once again The owner of the land in RS No. 52/3B of Taliparamba desom is willing to part, with his entire land excluding the 5 cents and the building thereon for the construction of the bus stand. The panchayat has to pay a large amount by wav of compensation if the 5 cents and the building thereon is acquired. Government have advised the panchayat to exclude the 5 cents of land and the building thereon. But the Panchayat is reported to be not willing to act accordingly.
In the circumstances. Government order that the whole proceedings in respect of the acquisition of land in RSNo. 52/3B of Taliparamba amsom and desom be dropped. The District Collector is therefore requested not to take any steps for acquisition.'
The first ground, namely that if the 5 cents of land with the building are to be acquired the Panchayat will have to pay a large amount by wav of compensation, is legally incorrect. Section 25 of the Land Acquisition Act provides for matters to be considered in determining the compensation. Section 26 provides for matters to be neglected in determining compensation and the seventh clause in Section 26 reads thus:--
'Seventhly, any outlay or improvements on, or disposal of the land acquired, commenced, made or effected without the sanction of the Collector after the date of the publication of the notification under Sub-section (1) of Section 3.'
The notification for acquisition was published in the Gazette dated 31-8-1965. In para 3 of the counter-affidavit it is thus stated:--
'It is true that the 3rd respondent has constructed a substantial building in the land after the publication of the notification in the Gazette. At the time of issue of the notification, the foundation only had been laid on the land: but, by the time the notification was published in the Gazette, the construction of the building had reached the roof level.'
The Junior Engineer prepared a valuation statement on 3-9-1965 and as per his valuation the structure on that date was only valued at Rs. 2.329.94. It is further admitted in the counter that the construction of the building was continued even after the publication of the notification and now a substantial building costing about Rs. 20,000/- is standing on the plot. Under Section 26 clause seven, no compensation is Payable to these improvements effected after the publication of the notification. Therefore, the assumption that a large amount will have to be paid by the Panchayat for acauiring the 5 cents and the building is legally unsustainable.
18. The second ground stated In the order is that the Panchayat was unwilling to exclude the 5 cents. In the representation made in Ext. P-10 the Panchayat gave their reasons for not changing the proposal on the basis of which declarations had been made. They apprehended that a fresh proposal and a fresh notification would mean that the value of the land as on the fresh notification will have to be made which will go to a very large amount. Their apprehension is not baseless. There is a Division Bench decision of this Court reported in Sreenivasa Shenov v. State of Kerala. (AIR 1968Kerala 325) to that effect. So, here is a case where the two reasons mentioned are either unsustainable in law or purely extraneous to the matters which should be taken into account in ordering withdrawal of an acquisition. If the Government's view was that the balance area is sufficient for the purpose of the Panchayat and a Dartial withdrawal is permissible, that was a matter which should have been taken into account instead of proceeding to withdraw the entire acquisition. The other matters which should have been taken into account, namely whether the public purpose for which the acquisition was proceeded with has ceased to exist or whether it is possible to meet that need otherwise are never looked into at all. The refusal by the Panchayat of the private individual's request for exclusion seems to have influenced the Government very much in withdrawing the entire acquisition. The action is very much near a punitive step. Therefore, according to me. Ext. P-13 and Ext. R-1 are clearly unsustainable in law and have to be auashed. They are auashed. The Government may Over again consider whether there are any sufficient and relevant grounds to withdraw the notification. If there are pass a fresh order. If there is none they must proceed with the acquisition. Time two months. Ordered accordingly.
19. There will be no order as to costs.
20. In accordance with the majority view, this writ petition is dismissed with no order as to costs.