1. In this petition under Articles 226 and 227 of the Constitution, the petitioners have prayed for an appropriate writ or order to quash the notifications issued under Sections 4 and 6 of the Land Acquisition Act 1891 (hereinafter referred to as 'the Act').
2. The petitioners are owners of the various lands admeasuring 8 Acres and 34 Gunthas situate in village Gorwa in Baroda Taluka. By an application, dated August 29, 1959, respondent No. 2. the Alembic Chemical Works Company Limited, Baroda, applied to the Collector of Baroda to acquire those lands of the petitioners for the development of the company by setting up new divisions under the name of 'Alnish-Hompro'. A notification under Section 4. dated March 31, I960, was issued by the State Government, as it appeared to respondent No. I that the said lands were likely to he needed For the purposes of the company viz the Alembic Chemical Works Co., Ltd., Baroda. After the inquiry as the Government was satisfied that the acquisition of the said lands was needed for starting the factory, it consented to the provisions of the Act being put in force in order to acquire the said land for the company, and had, therefore, in pursuance of Section 41 of the Act required the company to enter into an agreement. The said agreement was entered into by the company on September 3, 1960, and was published on July 5, 1961 On July 5. 1961, the final notification under Section 6 of the Act was issued. The material part thereof runs as under:
'Whereas, by Government Notification in the Revenue Department No. LBA.1560/-43148, dated 31st March 1960. it was notified that lands specified in the Schedule hereto (hereinafter referred to as the 'said lands') were likely for be needed for the public purpose specified in column 4 of the schedule hereto. And whereas Government of Gujarat is satisfied after considering the report of the Collector under Sub-section (2) of Section 5A of the Land Acquisition Act, 1891 (1 of 1894) that the said lands arc needed to be acquired at the expense of the Alembic Chemical Works Co. Ltd , Baroda, for the public purpose specified in column 4 of the Schedule hereto
It is hereby declared under the provisions of Section 6 of the said Act that the lands are acquired for the public purpose specified in column 4 of the Schedule hereto.'
The purpose mentioned in column 4 of the schedule was 'for Alembic Chemical Works Co. Ltd.. Baroda'. The said acquisition is therefore, challenged by the petitioners.
3. It is not in dispute that possession has not been taken of the lands in question. As the properly sought to be acquired is not vested in the Government either under Section 16 or Section 17 of the Act, this is not a case of acquisition which has been completed before July 20, 1962, to which Section 7 of the Land Acquisition (Amendment Act) No. XXXI of 1962 could apply so as to attract the provisions of Section 40(1)(aa) as inserted in S 40, clause (1) of the Act by the said Amending Act. Therefore, the present mailer would be governed by the interpretation put by the Supreme Court on Section 40(1)(b) in the first case of R. L. Arora v. Slate of Uttar Pradesh. AIR 1962 SC 761 and not by the second case of R L. Arora v. State of Uttar Pradesh. AIR 1964 SC 1230. The application of section 40(1)(a) also being out of question as this is not a ease of acquisition for housing of the industrial workers of the company, this acquisition for respondent No. 2 can he justified only if it is covered under Section 40(1)(b). i.e. if it is for construction of some work likely to prove useful to the public. In the first Arora's ease. AIR 1962 SC 761 (Supra) it was held by the Supreme Court that it was only In reading the fifth term of Section 41 together with this Section 40(1)(b) that it was possible to find out the intention of the Legislature when it provided for acquisition of land for a company through the agency of Government. In para 21 at page 774 it was held:
''What these provisions of Ss. 40 and 41 require is that the work should be directly useful to the public and the agreement shall contain a term how the public shall have the right to use the work directly themselves. II seems to us that under the relevant words in Sections 40(1)(b) and 41, it is works like a hospital, a public reading room or a library or an educational institution open to the public or such other works as the public may directly use that are contemplated and it is only for such works which arc useful to the public in this way and can be directly used by it that land can be acquired for a company under the Act.'
Further it was held:
'The fact that the product of the company would be useful to the public is not sufficient to bring the acquisition for a company within the meaning of the relevant words in Sections 40 and 41.'
In that view of the matter even though the acquisition was sought to be made for construction of a factory for textile mill machinery parts which products were clearly useful to the public, it was held by the Supreme Court that it was not a work useful to the public under Section 40(1)(b) as the public was not entitled to use the same directly and as of right. The notification under Section 6 with the proceedings resulting therefrom was, therefore, quashed. This decision applies on all fours to the facts of the present case. In para 13 of the affidavit it is slated that the land under acquisition was required for the two divisions of the second opponent under the names of Alnish and Hompro' which means the manufacturing of injections of diverse kinds and home medicines respectively. It is also stated in para 24 of the said affidavit that the agreement in fact did show on the face of it that the work was highly useful to the public in that the land was being acquired for the construction of a factory for the manufacture of new injections, medicines and other products which were of considerable use to the public in India. Further, in para 28 reference is made to the fact that the company had made a provision for a Reception Room for the general public and the medical profession. Though these amenities were provided for, they would not render the work such that the public can use it directly And as of right for its benefit. At best the products of the work might be said to he useful In the public but to such a work Section 40(1 )(b) of the Act would not he attracted. In fact here is not a single term in the agreement which provides for such use by the public. Therefore, according to the decision in the first Arora's case, AIR 1962 SC 7G4 the notification under Section 6 must be quashed and Mr Shah did not dispute this legal position
4. Bul Mr Shah contended that this very question whether the proposed acquisition was for a work falling under S 40(1)(b) was in terms decided by a Division Bench of this Court, consisting of K. T Desai C. J. and Bhagwati J on March 16, 1961, in Special Civil Appln No. 14 of 1961 (Guj), that the question was between the same parties and on the interpretation of the terms of the very agreement dated September 3. 1960, and, therefore, the decision operated as res judicata But that Special Civil Application was filed bv the petitioners and was decided before the final notification under S (I was issued. There can be no challenge, therefore, in that application to the notification subsequently issued under Section 6 by which only the Government made the firm declaration regarding the need of the land in question for the company. What was challenged in that Special Civil Application was the tentative proposal made under Section 4 and not the firm declaration under Section 6 which can be and has been only now challenged in the present petition. In that application the petitioners had prayed for quashing the notification issued under Section 4, for an appropriate writ or direction restraining the State Government from entering into an agreement with the company under Section 41, from giving its consent to the acquisition and from issuing a notification under Section 6. It also appears from the said decision that a copy of the agreement which was entered into on September 3, 1960, with the company was produced and the petitioners were allowed to amend their application for raising contentions as to the contents of the agreement and the inferences that could be drawn therefrom. It is also slated in that decision that the principal contention urged by Mr. Patel was that on a true construction of the relevant provisions of the Land Acquisition Act, 1894, the acquisition of the aforesaid lands was not needed for the construction of some work which was likely to prove useful to the public and that the aforesaid lands were not liable to he acquired under the Act. It is also stated that the point that arose for consideration was whether the conditions laid down by Section 40(1) (b) had been satisfied. The conclusion arrived al by this Court was as under:
'The language of Section 40(l)(b) is wide enough to cover works which are capable of being physically used by the public and works which are not capable of being physically used by the public but are none the less useful to the public. Section 41(5) has been enacted in order to provide for cases where the work is likely to prove useful to the public by reason of the use thereof by the public..... In cases where the public cannot physically use the work and the work is none the less useful to the public, the provisions of this part of Section 41(5) do not operate. In our view, the words are intended to secure in certain cases the implementation of what is contained in Section 40(1) (b). They cannot be so read as to limit the meaning of the words used in Section 40(1)(b). The Government is entitled to acquire lands for a company where the acquisition is needed for (he construction of some work by the company and such work is likely to prove useful to the public. There is no reason why these words should be read in a narrow limited sense. A work is not necessarily useful to the public merely because it is physically used, by the public. One can contemplate a number of works where it would be dangerous to the public to allow them to have any access thereto and yet, the work might be extremely useful to the public. There is no reason why land should not he acquired for such useful and beneficial purpose merely because the public may not be entitled to or may not be permitted to have physical access to the work. A work may be useful because it produces articles which are of great use to the public. A work does not necessarily become useful to the public merely because the public have an access thereto and may use the same In our view, reading the provisions of these sections as a whole, the Government in the present case was entitled to acquire the lands of the petitioners in question for the construction of the two divisions of the factory of the second respondent for the manufacture of medicines useful to the public.'
It was also observed:
'Mr. Patel is right when he says that the existence of such satisfaction is pre-requisite before any consent can be given or before a company can be required to enter into any agreement. In the present case, the appropriate Government has given its consent, and has required the company to enter into an agreement and, in fact, an agreement has been entered into by the company with the Government. On looking to the terms of the agreement, one finds that there is no clause setting out the terms on which the public would be entitled to use the work in question.'
Finally this contention was also repelled and it was held that apart from the agreement, there was evidence in the affidavit of the Government that the requisite satisfaction had been derived by the Government and, therefore, none of the objections of Mr. Patel could be sustained and the petition was, therefore, dismissed. In that decision the learned Chief Justice has in terms observed that there was no clause in the agreement setting out the terms on which the public would be entitled to use the work in question, but it was the view of this Court at that time that if the product was useful to the public it was sufficient compliance with the section. On this view of law, as it prevailed before the interpretation of Section 40(1)(b) was declared hi the first Arora's case, AIR 1962 SC 764, this Court had taken the view that the proposed work was likely to be useful to the public and, therefore, no injunction was granted restraining the Government from issuing the notification under Section 6. This was clearly a decision on the collateral or incidental question whether the consequential relief of injunction against issuing notification under Section 6 and further proceeding with the acquisition should be granted or not, after it was held that the notification under Section 4 could not be challenged. The notification under Section 6 was not and could not then he challenged as it was not even issued. It is challenged for the first time in this petition as, in the meantime the Supreme Court has now settled the law on this point and the declaration of law by the Supreme Court under Article 141 has binding effect not only on the parties but also on all Courts in India, including this Court Section 40(1) (b) has thus come in for direct interpretation and we are bound to decide this question in accordance with the settled law. Therefore, the previous decision in which this question arose only for being dealt with incidentally or collaterally cannot operate as res judicata in such a case in view of these changed circumstances. The earlier decision of this Court amounted only to its refusal to quash the notification under Section 4 and to issue any in June lion restraining the Government from issuing the notification under Section 6 or taking further acquisition proceedings This would only mean that the Government having not been restrained, it was at liberty to issue the notification under Section 6 or to carry on further acquisition proceedings in so far as they were in accordance with law. If in the meanwhile, on account of the settled interpretation of law on this subject, the Government ceased to have the power under law to issue such a notification under Section 6, or to carry on further acquisition proceedings, the decision of this Court which had refused to issue the injunction only at the earlier stage could not preclude the petitioners from challenging the total lack of power in the Government to issue the new notification. It is true in a sense that questions similar to the ones arising in the instant petition came to be considered, but the decision arrived at in the first petition was on the question whether an injunction should be issued or not, while in the present petition the question is whether the impugned notification could be issued under Section 6. These two questions at two different stages could not be said to be substantially the same and the subject matter for actual decision of the Court being different, there can be no bar of res judicata especially as in the earlier petition the question of interpretation of Section 40(1)(b) was considered only incidentally or collaterally and was not directly or substantially in issue. Mr. Shah strongly relied on the decision of the Supreme Court in Daryao v. State of M. P., AIR 19C1 SC 1457, where it was held that where the petition under Article 226 is considered on the merits as a contested matter and dismissed by the High Court, the decision pronounced would he bindind on the parties, unless modified or reversed by appeal or other appropriate proceedings under the Constitution, and so, if the decision was not challenged by an appropriate remedy provided by the Constitution, a writ petition filed in respect of the same matter would be deemed to be barred by res judicata. Commenting on this decision, the Supreme Court in the case of Amalgamated Coalfields Ltd. v. lanapada Sabha, Chhindwara, AIR 1064 SC 1013 at p. 1018 observed:
'Therefore, there can be no doubt that the general principle of res judicata applies to writ petitions filed under Article 32 or Article 226. It is necessary to emphasise that the application of the doctrine of res judicata to the petilions filed under Article 32 does not in any way impair or affect the content of the fundamental right guaranteed to the citizens of India. It only seeks to regulate the manner in which the said rights could he successfully asserted and vindi cated in Courts of law.'
In that case the question which arose before the Supreme Court was in connection with the liability of a lax for a subsequent year. In para 18, at page 1018, the Supreme Courl observed:
'Where the liability of a lax for a particular year is considered and decided, docs the decision for that particular year operate as res judicala in respect of the liability for a subsequent year? In a sense, the liability to pay tax from year to year is a separate and distinct liability; it is based on a different cause of action from year to year, and if any points or fact or law are considered in determining the liability for a given year, they can generally be deemed to have been considered and decided in a collateral and incidental way. The I rend of the recent English decisions on the whole appears to be, in the words of Lord Radcliff, that it is more in the public interest that tax and rate assessments should not be artificially encumbered with estoppels (I am not speaking, of course, of the effect of legal decisions establishing the law, which is quite a different matter), even though in the result, some ex peelations may be frustrated and some lime wasted'. (Vide Society of Medical Officers of Health v. Hope. 19(10 AC 551. at p. 5113) The basis for this view is that generally, questions of liability to pay tax are determined by Tribunals with limited jurisdiction and so it would nol be inappropriate to assume that if they decide any other questions incidental to the determination of the liability for the specific 'period, the decisions of those incidental questions need not create a bar of res jndicala while similar questions of liability For sub sequent years arc being examined '
Proceeding Further, the Supreme Court in para 22 at page 1019 quoted observations of Lord Radcliff in Caffoor v. Commissioner of Income-lax. Colombo. 1961-2 WLR 794. at pages 800 and 801 where emphasis was not placed so much on the limited jurisdiction -it the Tribunal and Lord Radcliff had observed:
'The critical thing is that the dispute which alone ran be determined by any decision given in the course of those proceedings is limited to one subject only, the amount of the assessable income for the year in which the assessment is challenged.'
On these observations the Supreme Court observed:
'He, (Lord Kadcliff) no doubt recognised that in the process of arriving at the necessary decision, it was likely that the consideration of questions of law turning upon the construction of the Ordinance or of Other statutes or upon the general law, may be involved, bill he (Lord Radcliff) thought that the decision of those questions should be treated as collateral or incidental to what is the only issue that is truly-submitted to determination.'
The Supreme Court also held in para 23 al page 1019:
'In considering this question, it may he necessary to distinguish between decision on questions of law which directly and substantially arise in any dispute about the liability for a particular year, and questions of law which arise incidentally or in collateral manner, us Lord Radcliff himself has observed in the case of Society of Medical Officers of Health, 1960 AC 551 that the effect of legal decisions establishing the law would be a different matter.'
Finally, al page 1020 the Supreme Court observed:
'In our opinion, constructive res judicata which is a special and artificial form of res judicata enacted by Section 11 of the Civil Procedure Code should not generally be applied to writ petitions under Article 32 or Article 226.'
Even though these observations were made while deciding a taxation case, they can very well he applied to a case of the present nature-. We may al this stage note that the petitioner? were granted a certificate to appeal to the Supreme Court bill as the petitioners failed to take any step to proceed with the said appeal by making the necessary deposit, the certificate was cancelled by us on February 23, 19G5. The earlier decision had. therefore, become final. We, however, do not agree with Mr. Shah that the earlier decision at the earlier stage of the acquisition would operate as res judicata so as to preclude the petitioners from challenging the impugned notification under Section 6 on the ground that it was without jurisdiction. As already stated, the earlier decision decided only the question whether an injunction should be issued or not and only incidentally or collaterally dealt with the question of construction of Section 40(1)(h). The notification nuclei Section 6 was not even issued till that case was decided and the settled interpretation of Section 40(1)(b) as given by the Supreme Court in the first Arora's case. AIR 1962 SC 764 become available to the petitioners only now as a ground for attacking the present notification. If the contention of Mr. Shah were to be accepted it would mean that this Courl would be deciding this matter ignoring the settled interpretation of S, 40(1)(b) which is binding on this Court under Article 141 of the Constitution and this Court would also fail in its duty to protect the fundamental rights of the petitioners to enforce which the petitioners have approached this Court under Article 226 of the Constitution.
5. In the result the petition must Ireallowed and the notification under Section 6 datedJuly 5, 1961, issued by the State Governmentfor acquisition of the petitioner's propertyshould he quashed. Rule made absolute to thislimited extent only. The respondents will paythe costs of the petition to the petitioners.