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Patel Mangalbhai Nathabhai and ors. Vs. State of Gujarat, Revenue and Industries Department, Sachivalaya, Ahmedabad and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Constitution
CourtGujarat High Court
Decided On
Case NumberSpecial Civil Appln. No. 915 of 1963
Judge
Reported inAIR1964Guj82; (1964)0GLR329
ActsLand Acquisition Act, 1894 - Sections 4, 5A, 6, 6(1), 6(3), 40, 40(1), 40(2), 41(4-A), 44-A, 44-B and 55; Constitution of India - Articles 14, 19(1), 19(2), 19(5), 21(2), 31, 31(2) and 31(2A); Land Acquisition (Amendment) Act, 1962
AppellantPatel Mangalbhai Nathabhai and ors.
RespondentState of Gujarat, Revenue and Industries Department, Sachivalaya, Ahmedabad and ors.
Appellant Advocate I.M. Nanavaty, Adv.; B.P. Sompura, Asst. Govt. Pleader
Respondent Advocate J.M. Thakore, Adv. General and; M.G. Doshit, Addl. Govt. Pleader
DispositionPetition dismissed
Cases ReferredPatel Gandalal Somnath v. State of Gujarat
Excerpt:
property - land acquisition - sections 4, 5a, 6, 6 (1), 6 (3), 40, 40 (10, 40 (2), 41 (4a), 44a, 44b and 55 of land acquisition act, 1894, articles 14, 19 (1), 19 (2), 19 (5), 21 (2), 31, 31 (2) and 31 (2a) of constitution of india and land acquisition (amendment) act, 1962 - petition for quashing notification issued under sections 4 and 6 - acquisition was for public purpose - amendment in sections40 and 41 are not ultra vires to constitution - article 19 (1) (f) or article 19 (5) or article 14 not violated - notification under section 4 was issued after rules were framed - no infirmity in notification - petition liable to be dismissed. - - the declaration dated the 7th of october, 1963, issued under section 6 of the act clearly mentioned that the purpose for which these lands were.....shelat, c.j.1. this petition is for a mandamus or any other appropriate writ for quashing the notifications issued under sections 4 and 6 of the land acquisition act 1 of 1894, as amended by the land acquisition (amendment) act, xxxi of 1962, and for restraining the respondents from enforcing them or taking any further proceedings thereunder, for declaring that the amendments inserted by the aforesaid act xxxi of 1962 in sections 40 and 41 of the principal act, are ultra vires the constitution and restraining the respondents from enforcing she provisions of the said amendment act. the petition is by ten individuals holding different lands in respect of which separate acquisition proceedings have been taken, but in view of the fact that the learned advocate-general expressly stated that.....
Judgment:

Shelat, C.J.

1. This petition is for a mandamus or any other appropriate writ for quashing the notifications issued under Sections 4 and 6 of the Land Acquisition Act 1 of 1894, as amended by the Land Acquisition (Amendment) Act, XXXI of 1962, and for restraining the respondents from enforcing them or taking any further proceedings thereunder, for declaring that the amendments inserted by the aforesaid Act XXXI of 1962 in Sections 40 and 41 of the principal Act, are ultra vires the Constitution and restraining the respondents from enforcing she provisions of the said amendment Act. The petition is by ten individuals holding different lands in respect of which separate acquisition proceedings have been taken, but in view of the fact that the learned Advocate-General expressly stated that the did not wish to raise any contention as regards the maintain ability of such a joint petition, it does not become necessary for us to deal with any question as to the maintainability of the present petition.

2. By a notification dated the 10th of June, 1963, under Section 4 of the Act, the first respondent proposed to acquire the petitioner's lands set out in Annexure A to the petition, along with certain other lands for the purpose of constructing thereon a railway siding for the Gujarat Refinery Project of (sic) by the second respondent. Pursuant to that notification, the third respondent was appointed to perform the functions of a Collector under Section 5-A of the Act. The petitioners in due course filed ojections before the third respondent but the same were rejected, and upon the third respondent having made his report, the first respondent issued the declaration, dated the 7th of October, 1963, under Section 6 of the Act, thereby declaring that the petitioners aforesaid lands were acquired for the second respondent and the first respondent also applied the urgency clause under Section 17(1) of the Act. On that very day, i.e., the 7th of October, 1963, the first respondent published an agreement dated the 5th of October, 1963, between the Governor of Gujarat and the second respondent, made under Section 41 of the Act as amended, in which it was inter alia provided that the entire cost of the acquisition was to be borne by the second respondent and that no part of such costs was to come out of public funds. The declaration dated the 7th of October, 1963, issued under Section 6 of the Act clearly mentioned that the purpose for which these lands were acquired was for the construction of the railway siding for the second respondent which was taking steps for engaging itself in a work which was for a public purpose. Clearly, therefore, the acquisition in question was made under Clause (aa) of Subsection (i) of Section 40, introduced in the Act by Section 3 of the Amendment Act XXXI of 1962.

3. In order to appreciate the grounds upon which the acquisition is being challenged in this petition, it is necessary to set out at this stage the relevant provisions as they stood prior to the amendment and the changes made therein by the Amendment Act. Section 39, which remained unamended, provides that the provisions of Section 6 to 37 of the Act shall not be put in force in order to acquire any land for a company, unless with the previous consent of the appropriate Government nor unless the company shall have executed the agreement mentioned in Section 41. Section 40(i), as it stood prior to the amendment, provided that the appropriate Government shall not give its consent unless it is satisfied that the purpose of the acquisition is to obtain land for the erection of dwelling-houses for Workmen employed by the company or for the provision of amenities directly connected ed therewith or that such acquisition is needed for the construction of some work and that such work is likely to prove useful, to the public. Section 41, as it stood prior to the amendment Act, provided that if the appropriate Government is satisfied after considering the report, if any, of the Collector under Section 5-A, Sub-section (2), or on the report of the officer making enquiry under Section 40 that the purpose of the proposed acquisition is to obtain land for the erection of dwelling-houses , for workmen employed by a company or for the provision of amenities directly connected therewith or that the proposed acquisition is needed for the construction of a work and that such work is likely to prove useful to the public, it shall require the company to enter into an agreement with the appropriate Government, providing to the satisfaction of the appropriate Government for the following matters. And then follow five matters, namely --

(1) The payment of costs of the acquisition to the appropriate Government,

(2) the transfer, on such payment, of the land to the Company.

(3) the terms on which the land shall be held by the company,

(4) where the acquisition is for the purpose of erecting dwelling-houses or the provision of amenities connected therewith, the time within which the conditions on which and the manner in which the dwelling-houses or the amenities shall be erected or provided, and

(5) where the acquisition is for the construction of any other work, the time within which and the condition on which the work shall be executed and maintained, and the terms on which the public shall be entitled to use the work.

Under Section 55 of the Act as amended, the power to frame rules under the Act rested with the appropriate Government.

4. Thus, as the Act stood prior to the Amendment Act, acquisition for a company could be made for the two purposes set out in Clauses (a) and (b) of Sub-section (1) of Section 40 and the agreement to be entered into by the company with the appropriate Government under Section 41 of the Act had to include the conditions and terms according to which the dwelling-houses or the amenities for workmen employed by the company would be erected or provided for, and if the acquisition was for the purpose set out in clause (b), the time within which and the conditions upon which such work would be executed and maintained and the terms on which 'the public would be entitled to use such work. Thus as Section 40 stood prior to the amendment Act XXXI of 1962, an acquisition of property for a company could be made provided that the purposes for such acquisition were as laid down in Clause (a) and (b) of Sub-section (1) of Section 40, and an agreement as laid down in Section 41 in respect of the matters therein set out was made between the company and the appropriate Government as a condition precedent to the making of the declaration under Section 6 of the Act.

5. The Amendment Act XXXI of 1962 inserted a new Clause (aa) in Sub-section (i) of Section 40, The new clause provides the following :-

'that such acquisition is needed for the construction of some building or work for a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose.'

The Amendment Act also altered Section 41 by substituting the following, namely,

'the proposed acquisition is for any of the purposes referred to in Clause (a) or Clause (aa) or Clause (b) of Cub-section (i) of Section 40' for the words

'the purpose of the proposed acquisition b to obtain land for the erection of dwelling-houses for workmen employed by the company or for the provision of amenities directly connected therewith, or that the proposed acquisition is needed for the construction of a work, and that such work is likely to prove useful to the public.' It also added a new Clause (4a) after clause (4) which provides that the agreement required under Section 41 shall contain the time, within which and the conditions on which the building or the work shall be constructed or executed, where acquisition is for the purpose provided, for in the new Clause (aa) of Sub-section (i) of Section 40. The Amendment Act also introduced after the original Section 44 the new Sections 44-A and 44-B. Section 44-A prohibits the company for which the land is acquired from transferring the acquired land or any part thereof either by sale, mortgage, gift, lease or otherwise, except with the previous sanction of the appropriate Government and Section 44-B provides that notwithstanding anything contained in the Act, no land shall be acquired under Part VII of the Act except for the purposes mentioned in Clause (a) of Sub-section (i) of Section 40, for a private company which is not a Government company. Section 53 of the Act was also amended but since no contention has been urged in connection with Section 55 or its amendment, it is not necessary to set out that put of the amendment Act. Briefly stated the effect of these amendments is that aa acquisition for a company now can be made for the new purpose inserted in Section 40(i) by the new Clause (aa) therein, namely, that acquisition is needed for the construction of some building or work for a company which is engaged or is taking steps for engaging itself in any industry or work which, is for a public purpose. .

6. The second respondent is a corporation constituted under the Oil and Natural Gas Commission Act XL of 1959, and under the provisions of that Act, is a company within the meaning of Section 3(e) of the Land Acquisition Act. Section 24 of that Act in clear terrace provides that any land required by the Commission for the carrying out of its functions under that Act should be deemed to be needed for a public purpose and that such land shall be acquired for the purpose of the Commission as if the provisions of Part VII of the Land Acquisition Act were applicable to it and the Commission were a company within the meaning of Clause (e) to Section 3 of the Land Acquisition Act. It is thus clear that the impugned acquisition fells under the newly added Clause (aa) in Section 40(1) read with Section 41 read with Section 6 of the Act.

7. Mr. Nanavaty at one stage suggested that an acquisition for a company cannot be supported as an acquisition for a public purpose as required by Article 31(2) of the Constitution, unless part of the costs of such acquisition comes oat of that public funds. The suggestion, in our view, is ill founded. As explained in Jhandu Lal v. The State of Punjab, AIR 1961 SC 343, the Land Acquisition Act deals with two kinds of acquisitions, (i) for a public purpose at the cost of the Government, and (2) for a purpose aim to such a purpose at the cost of a company, and it is to this class of acquisition that the provisions at Part VII of the Act are attracted. Section 6 of the Act 19 in terms made subject to the provisions of Part VII of the Act. These provisions read with Section 6 lead to the result that a declaration for acquisition for a company cannot be made unless compensation to be awarded for the property is to be paid by a company. Therefore where as a declaration for acquisition in the first case cannot fee made unless compensation either in whole or to part is to be paid out of the public funds in the case of acquisition for a company, the declaration cannot be made without satisfying the provisions of Part VII. The Supreme Court expressly stated that

'that would not however mean that 'acquisition for a public purpose cannot b made other wise than under the provisions of Part VII if the cost or a part thereof is to be met from public funds.'

In other words, the essential condition for acquisition for a State as distinguished from acquisition for a company, is that the cost of the acquisition should be borne either wholly or in part out of public funds. Hence, acquisition for a company may also be made for a public purpose if a part or the whole of the costs of acquisition is met by public funds. If, on the other hand, acquisition IB to be made for a company at the cost of such a company, such an acquisition would fall under Part VII. Thus, there must exist a public purpose for an acquisition whether it is for the State or for a company, the distinction between the two being that in the first case the cost is met from public funds either wholly or in part and in the latter case it is met wholly by the company. But it does not follow that because an acquisition is for a company and Part VII applies to it that therefore,' the purpose ceases to be a public purpose. In Valjibhai Muljibhai Soneji v. States of Bombay, AIR 1963 SC 1890, the Supreme Court has again deafly brought out this distinction between the two types of acquisitions and held that even though the purpose for which an acquisition is made is a public purpose but if the. cost of acquisition is met by the company for whose benefit the acquisition is made, the provisions of Part VII would apply. And in the penultimate para of the judgment, Mudholkar, J., speaking for the Bench, has said that in their view the acquisition impugned in that case having been made for the benefit of a corporation, though for a public purpose, is bad because no part of the compensation was to come out of the public revenues and the provisions of Part VII of the Land Acquisition Act had not been complied, with. These two decisions clearly negative the contention of Mr. Nanavaty.

8. The petition challenges the Amendment Act XXXI of 1962 on several grounds set out in the petition. Mr. Nanavaty, appearing for the petitioners, has however argued out the petition only on certain grounds and, therefore, we will deal with those grounds only and that too in the order in which he advanced the arguments. The challenge, as we have already stated, is to the Amendment Act XXXI of 1962 and the challenge is that it is ultra vires Articles 31(2), 19(1)(f) and Article 14 of the Constitution. Mr. Nanavaty's contention was that the impugned Amendment Act is a post-Constitution enactment and therefore would not be saved by Article 31(5). He argued that after the Constitution (Fourth Amendment) Act, 1955, which added Clause (z-A) in Article 31, the power of acquisition can be exercised only where the object of acquisition is to transfer the property either to the State or a corporation owned or controlled by the State. The contention was that after Clause (2-A) was inserted in Article 31, there cannot be a valid law of acquisition except where the acquisition results in the transfer of the property either to the State or to a corporation owned or controlled by the State and that Clause (2-A) in Article 31 was meant to be and is an added restraint to the power of eminent domain of the State. In other words, an acquisition, in order to be a valid acquisition, must result In a transfer of property either to the State or a corporation owned and controlled by the State. Therefore, the argument ran, any transfer in favour of a company and not in favour of a State or a corporation owned and controlled by the State, would not amount to acquisition and consequently clause (aa) in Sub-section (1) of Section 40, which provides for acquisition for a company, is invalid. The next step in the argument was that when a State Government acquires a property for a company, although such property may in the first instance vest in the Government, the acquisition being for a company, it is in substance and effect a transfer in favour of such a company and the acquisition, therefore, is for, if not by, such a company. Mr. Nanavaty tried to support this argument by adding that under the agreement id be executed under Section 41 of the Act, the State Government is bound to transfer the property to the company and therefore, there is a resultant transfer of the property to the company. This' is also clear, added Mr. Nanavaty, from the new Section 44-A which prohibits such a company from retransferring the property transferred to it. Therefore, the acquisition is in substance and reality, an acquisition by the company, though the property first vests in the State and is thereafter transferred to the company. Mr. Nanavaty contended, that an enactment which provides for such a result, namely, transfer in favour of a company and not to the State or to a corporation owned or controlled by the State, would no longer be a valid law of acquisition after Clause (2-A) was introduced in Article 31, and therefore, such a law would not fall within the purview of Clause (2) of Article 31.

9. In order to test the validity of the contention, it is necessary to ascertain first the content and effect of Clause (2-A) of Article 31, whether the effect of clause (2-A) in Article 31 is what Mr. Nanavaty contends for and consequently whether the acquisition to which Part VII of the Land Acquisition Act applies, i. e., an acquisition for, a company, is not an acquisition by the State as contended by Mr. Nanavaty. Reading first the language of Article 31 without seeking assistance from decided cases, it is clear that Clause (1) of that Article prohibits any deprivation of property of a person save by authority of law, such a law of course being a valid law, that is to say, not in violation of the provisions of Chapter III of the Constitution. Clause (2) then provides that for an acquisition or requisitioning of property, two prerequisite must be fulfilled, (i) that it is for a public purpose, and (2) that the law authorising such acquisition or requisition provides for compensation and either fixes the amount of compensation or specifies the principles upon which and the manner in which it is to be determined or given. Clause (2-A) then lays down that where a law does not provide for the transfer of ownership or right to possession of the property to the State or to a corporation owned or controlled by the State, such a law shall not be deemed to provide for compulsory acquisition or requisitioning of property notwithstanding that it deprives a person of his property. The clause contains two negatives and therefore, put in positive language it means that if an enactment results in a transfer of ownership or right to possession of the. property to the State or a corporation owned or controlled by the State then only it amounts to acquisition or, requisitioning of property, although the effect might be to deprive a person of his property. Clause (2) of Article 31, as it stood prior to the Constitution Fourth Amendment Act, 1955, made compensation payable when property, movable or immovable, including any interest in or in any company or in any commercial or industrial undertaking, is taken possession of or acquired for a public purpose. The 4th amendment makes it clear that there is no obligation to pay compensation unless the property is acquired or requisitioned as laid down in Clause (2-A) of the Article, i. e., only where it results in the transfer of ownership or right to possession of the property either to the State or a corporation owned or controlled, by the State. Clause (a-A) therefore explains clause (2) of the Article and whittles down the, obligation, as originally provided for in clause (2) to pay compensation to only those cases of acquisition or requisitioning which fall within clause (2-A). But it. does not mean what Mr. Nanayaty contended, namely, that there can be no valid law of acquisition where the effect of acquisition is the ultimate transfer of the property in a company although the property may vest in the State in the first instance. This position becomes clear if we beat in mind the background with reference to which the 4th Amendment Act of 1955 was enacted.

10. In State of West Bengal v. Subodh Gopal, AIR 1954 SC 92, the majority view of the Bench, for whom Patanjall Sastry, C. J., spoke, took the view that Article 19(1)(f) declares the citizen's right to own property and has no reference to the right to the property owned by him, which was dealt with in Article 31. They held that the framers of our - Constitution classed the natural right or capacity of a citizen 'to acquire, hold and dispose of property' with other natural rights and freedoms inherent in the status of a free citizen, and embodied them in Article 19(i) while they provided for the protection of concrete rights of property owned by a person in Article 31. Under the scheme of the. Constitution, all those broad and basic freedoms inherent in the status of a citizen as a free man were embodied and protected from invasion by the State under clause (i) of Article 19, while the rights of private property were separately dealt with and their protection provided for in Article 3r, the cases where social control and regulation could extend to the deprivation of such rights being indicated in para (ii) of Sub-clause (b) of Clause (5) of Article 31 and exempted from liability to pay compensation under Clause (2). The majority view was that the American doctrine, of 'police power' was not recognised in our Constitution and therefore, it would be contrary to the scheme of the Constitution to say that Clause (i) of Article 31 must be read in positive terms and understood as conferring police power oh the Legislature in relation to rights of property. It is the Legislature alone, they said that can interpose and compel an individual to part with his property. It is this limitation which the framers of our Constitution have embodied in Clause (i) of Article 31 which is thus designed to protect the rights to property against deprivation by the. State. Clause (2) imposes two further limitations on the Legislature itself, it is prohibited from making a law authorising expropriation except for public purposes and on payment of compensation for the injury sustained by the owner. These important limitations on the power of the State, acting through the executive and legislative organs, to take away private property are designed to protect the owner against arbitrary deprivation of the property. Clauses (1) and (2) of Article 31 were thus not mutually exclusive in scope and content, but should be read together and understood as dealing with the same subject, namely, the prosecution of the right to property by means of the limitations on the State power referred to above, the deprivation contemplated in Clause (1) being no other than the acquisition or taking possession of property referred, to in Clause (2). The majority view therefore was that the words 'acquired or taken possession of' in Clause (2) of Article 31 could not be construed in a narrow technical sense. Nor was there any warrant for the assumption that taking possession of property was intended to mean the same thing as requisitioning property. The word 'acquisition' and its grammatical variations should be understood in their ordinary sense and the additional words 'taking possession of' . or 'requisition' were used in Article 31(2) not in contradistinction with but in amplification of the term 'acquisition' so as to make it clear that the words taken together covered even those kinds of deprivation which did not involve the continued existence of the property after it was acquired. The expression 'taking possession' could therefore only mean taking such possession as the property was susceptible of and not actual physical possession, as 'the interest in, or in any company owning any commercial or industrial undertakings', which was expressly included in Clause (2) of Article 31, was not susceptible of any actual physical occupancy or seizure. Therefore, the expression 'shall be taken possession of or acquired' in Clause (2) implied such an expropriation of property or abridgement of the incidence of its ownership as would amount to deprivation of the owner and that any other interference with the enjoyment of private property short of such deprivation or abridgement would not be compensable under Article 31(2). As against this view, the minority view held by Das, J., as he then was, was that the word 'acquired' used in Article 31(2), must be given the special meaning which that word has acquired, and cannot be read as synonymous with 'taken' used in the 5th Amendment to the Constitution of the United States, and further that the expression 'taken possession of or acquired' occurring in, Clause (2) would not have the same meaning. which the word 'deprived' used in Clause (1) has. 'Taken possession of or acquired' should, therefore, be read as indicative of the concept of requisition or acquisition. The majority view based on the language of Clause (2) of Article 31, as it then was, thus was that Article. 31 (1) and (2) meant that a person must be said to have been deprived of his property if he is substantially dispossessed or his right to use and enjoy, his property has been seriously impaired or the value of his property is materially reduced by the impugned law. This view was followed in Dwarkadas Shrinivas v. The Sholapur Spinning and Weaving Co. Ltd., 1954 SCR 674 : (AIR 1954 SC 119) and in Sagit Ahmed v. State of U. P., (1955) 1 SCR 707 :. (AIR 1954 SC 728). It would appear that when the 4th Amendment Act of 1955 was passed, the Parliament did not accept the majority view in Subodh Gopal's case, AIR 1954 SC 92 but accepted the minority view held by Das, J., as he then was, of the construction of Clauses (1) and (2) of Article 31. The amendment makes it clear that Clause (2) applies only to acquisition and requisition and clause (2-A) inserted in Article 31 by the 4th Amendment Act as a rider, explains that unless a taw provides for the transfer of ownership or right to possession in any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning a property, notwithstanding that it deprives a person of his property. The amendment also accepted the minority view that deprivation of property in Clause (2) of Article 31 covers cases other than acquisition or requisitioning of property by the State.

11. This is precisely the view taken of Clause (2a) of Article 31 in the case of Kavalappa Kottarathil Kochuni v. States of Madras and Kerala. AIR 1960 SC 1080, at p. 1094 the Supreme Court, while dealing with its previous decision in State of Bombay v. Bhanji Munji, (S) AIR 1955 SC 41, observed that before Clause (2-A) was added in Article 31, it was possible to hold, as the Supreme Court did in Bhanji Munji'a case, (S) AIR 1955 SC 41 on the analogy drawn from Article 21, that, when the property therein was requisitioned within the meaning of Article 31, the operation of Article 19 was excluded, but that there was no scope for drawing such an analogy after the Constitution (Fourth Amendment) Act, 1955, as thereafter they dealt with two different subjects: Article 31 (2) and (2-A) with acquisition and requisition and Article 31(1) with deprivation of property by authority of law. The Supreme Court therefore held that the decision in Bhanji Munji's case, (S) AIR 1955 SC 41 no longer held the field after the Constitution (Fourth Amendment) Act, 1955. The result of the amendment of Article 31, therefore, by insertion of Clause (2-A) therein, was mainly twofold, (1) that Article 31 can no longer be said to be a self-contained Article dealing with one topic, and (a) that the insertion of Clause (2-A) therein had the effect of whittling down the scope of Clause (2) by narrowing it in the sense that it was restricted only to acquisition and requisitioning of property where the effect is the actual transfer of ownership or right to possession in the State.

11-A. The contention of Mr. Nanavaty was that clause (2-A) of Article 3r postulates acquisition by the State or in favour of a corporation owned and controlled by the State and not in favour of any company or corporation other than the one mentioned in that clause. Therefore any transfer in favour of a company resulting from acquisition under Part VII of the Act would not be acquisition, within the meaning of clauses (2) and (2-A) of Article 31 and consequently, any law made after 1955 permitting acquisition for a company would be contrary to Clause (2-A) of Article 31 and therefore not permissible. In support of this contention, he relied upon Section 44-A of the Act in order to demonstrate that by reason of that section, the property under acquisition under the provisions of Part VII of the Act would in effect, be transferred to a company, for, when the State after the acquisition transfers such property to the company, it does indirectly what it cannot do directly. In other words, when the Government acquires a property for a company, though the property vests in the State, the State Government has first to enter into an agreement for its transfer under Section 41 and after the acquisition it has to transfer it and therefore the result indirectly is that it is an acquisition by the company which is contrary to the letter and the spirit of Clause (2-A) of Article 31. In our view, this contention, is based on a misconception of the provisions of Part VII of the Act and lacks a correct legal foundation. As already stated, the Act contemplates two types of acquisitions, one for the State and the other for a company. But in both the cases, acquisition is by the State, though each is governed by different provisions in the Act. In both the cases, however, the property on acquisition vests in the appropriate Government and though the acquisition may be for a company, the company has no right over the property except by virtue of and to the extent of the agreement made under Section 41 of the Act. This position is clear from Sections 16 and 41 of the Act. The subsequent transfer of the property in favour of a company is made by the appropriate Government and is not the direct result of the acquisition proceedings. It is the result and by virtue of the agreement. It is true that making such an agreement is a statutory requirement, but the transfer of the property in favour of a company is after the acquisition is completed and by virtue of the agreement and only on payment by the company of the costs of and incidental to the acquisition. It is, therefore, clear that though the acquisition is for a company, it is an acquisition by the State and not by the company either directly or indirectly and the subsequent transfer is not part of the acquisition but is a result of the agreement. The simple test which negatives Mr. Nanavaty's contention would be Suppose in a case where acquisition is for a company but the company refuses to take the property or declines to pay, the property under acquisition would still continue to remain vested in the State and the acquisition would still be a valid case. Such a case clearly shows that the agreement entered into under Section 41 does not mean that the acquisition is by the company and not by the State. It is true that in such a case the provisions of Part VII of the Act are put into operation with the object of ultimately transferring the property to the company. But the acquisition is by he State in exercise of the power of eminent domain as contemplated by Article 31 (a) and (2-A) and therefore, Mr. Nanavaty's contention that such a law permitting such an acquisition which results in the ultimate transfer of the property under acquisition to the company is not a law of acquisition under those clauses, is, on the face of it, incorrect.

12. The second part of the contention urged on behalf of the petitioners is a little more substantial than the first part which we have just disposed of. The argument in brief was that an acquisition of a property of a subject has the effect of depriving him of his property and unless such deprivation is shown to be supported by clause (a) of Article 31, i. e., that it is for a public purpose and the law under which it is made provides for compensation, such acquisition would be bad. The argument was that though acquisition results in the total destruction of all rights of such a subject in his property, it is nevertheless a restriction falling under Article 19(1)(f) and can only be valid if it meets the challenge of Article 19(5). Mr. Nanavaty's contention was that if his first contention was right, namely, that the Amendment Act XXXI of 1962 is not a valid law for acquisition, as postulated by Article 31(2-A), then obviously such a law fall under Article 31(1) and must meet the challenge of Article 19(1)(f)19(1)(f) and (5), for ex facie, such deprivation would be violative of Article 19(1)(f). In the alternative, he argued that even if he was wrong and the law is held to be a valid law of acquisition, it still is a restriction on his fundamental right to hold and enjoy property and must, therefore, satisfy the test of Article 19(5). Mr. Nanavaty tried to contend however that since an acquisition results in the total destruction of all rights in a property, it would amount to deprivation within the meaning of clause (r) of Article 31 and therefore, it would not be a mere restriction which would be protected, if it is a reasonable one, under Article 19(5) and therefore, once it is shown that the effect of such a law was deprivation, nothing further remained to be done and such a law would have to be held to be bad as being contrary to Article 31(1). That contention, however, has no substance, for, it is now concluded by the Supreme Court's decision in Narendra Kumar v. Union of India, AIR 1960 SC 430. At pp. 435-436 while dealing with a contention identical with the one urged By Mr. Nanavaty, it is observed--

'It is reasonable to think that the maters of the Constitution considered the word 'restriction' to be sufficiently wide to save laws 'inconsistent' with Article 19(1), or 'taking away the rights' conferred by the Article, provided this inconsistency or taking away was reasonable in the interests of the different matters mentioned in the clause.'

The Supreme Court there observed that there could be no doubt therefore that they intended the word 'restriction' to include cases of prohibition also. The contention that a law prohibiting exercise of a fundamental right is in no case saved, cannot therefore be accepted. ' Though it is undoubtedly correct that when the restriction reaches the stage of prohibition, special care has to be taken by the Court to see that its reasonableness is satisfied and that the greater the restriction, the more the need for strict scrutiny by the Court. Mr. Nanavaty however contended in the alternative that the acquisition, though it amounts to a total loss of all rights in a property, if it were to properly fall under Clause (2) and Clause (2-A) of Article 31, must meet the challenge of Article 13 (2) and Article 19(1)(f) and if its validity has to be sustained, such an acquisition must be saved under Article 19(5). In other words, since (sic) a person cannot be deprived of his property save by authority of law under Article 31 (1). Such a law must be a valid one. Under Article 13 (2) a law cannot take away or abridge the rights conferred by Part III of the Constitution. Therefore a law depriving a person of his property will be invalid if it infringes Article 19 (1) (f), whether such deprivation is total or partial, unless it amounts to reasonable restriction on the fundamental right of the subject. The difference between a case of deprivation falling. under Clause (1) of Article 31 and a case falling under Clause (2) is that whereas the limitation under the former is that it must be established that the restriction is resonable, and saved by Article 19(5), in the latter case it has to be established in addition that it also meets the requirements of Clause (2) of Article 31. As laid down in Kochuni's case, AIR 1960 SC 1080 it is for the State to establish and to Jay before the Court materials showing reasonableness of the restriction. This was in effect the argument advanced by Mr. Nanavaty He then submitted that in the two affidavits filed on behalf of the State and the second respondent, no data has been placed before the Court to show reasonableness of the restriction provided by clause (aa) of Section 40(1) which, being the post Constitution enactment, is not protected by Article 31(5) He therefore argued that the burden of showing its reasonabless being on the State and that not having been discharged, the deprivation fells under Article 19(1)(f) and must be held not to be covered by Article 19(5).

13. The first question is that arises from this conclusion whether a case falling under Article 31(2) after the 4th Amendment Act, 1955, would attract the provisions of Article 19(1)(f) and Article 19(5). In Bhanji Munji's case, (S) AIR 1955 SC 41 the Supreme Court held that Articles 19(1)(f) and 31 deal with different subjects and covered different fields and that there was no overlapping. Article 19(1)(f) read with Clause (5) postulated the existence of property which could be enjoyed and over which rights could be exercised because otherwise the reasonable restriction contemplated by Clause (5) could not be brought into play. If there is therefore no property which can be acquired, held or disposed of, no restriction can be placed on the exercise of the right to acquire, hold and dispose of property and as Clause (5) contemplates placing of reasonable restrictions on the exercise of those rights, it must follow that the Article postulates, the existence of property over which these rights can be exercised. The freedom relating to the person of a citizen guaranteed by Article 19 assumes the existence of a free citizen and can no longer be enjoyed if a citizen is deprived of his liberty by the law of prevention or preventive detention. In the same way when there is a substantial or total deprivation of property which is already held and enjoyed, one must turn to Article 31 to see how far that is justified. The argument of the learned Advocate General was that the insertion of Clause (2-A) in Article 31 made no difference to the principle laid, down in this case and that therefore, in a case of acquisition or requisition, such acquisition or requisition would have to meet the requirements of Article 31(2) only and that Article 19(1)(f) would have no application. His contention was that though by reason of Clause (a-A) having been introduced in Article 31, Article 31 as a whole case no longer be said to be a self-contained Code dealing with one topic or operating in one field, clauses (2) and (2-A) of Article 31 must still be said to be dealing with one topic, namely, acquisition or requisition and that therefore, they are still not subject to Article 19(1)(f) or Article 19(5). In support of his contention, he advanced two arguments, (i) that Kochuni's case, AIR 1960 SC 1080 must, be confined to Clause (1) of Article 31 and that therefore, when it was said there that the decision in Bhanji Munji's case, (S) AIR 1955 SC 41 no longer held the filed, that observation was confined only to cases, falling under Article 31(1), i.e., to cases of deprivation, other than those of acquisition and requisite and therefore the principle, in Bhanji Munji's case, (S) AIR 1955 SC 41 still, applied, to cases arising under Clauses (2) and (2-A) of Article 31, and (2) that Clauses (2) and (2-A) of Article 31 9eal with the exercise of the power; of eminent domain and it is not dealing with the rights, of property of a citizen as Article 19(1)(f) does. Therefore, the two Articles are distinct and independent of each other. He pointed out that the effect of Kochuni's case, AIR 1960 SC 1080 was that whereas Clause (1) of Article 31 was made subject to Article 19(1)(f), Clauses (2) and (2-A) of Article 31 were not and could not be. It was impossible, he argued, that whereas the Parliament subjected deprivation of property to the challenge of Article 19(i)(f) only, it could, while dealing

with the sovereign right of the Slate of eminent domain, have, subjected that right to more fetters than in cases falling under Clause (1) of Article 31, namely, fetters contained in Clause (2) of Article 31 and also those in Article 19(1)(f) and Article 19(5). In support of his contention, the learned Advocate-General relied upon Babu Barkya Thakur v. State of Bombay, AIR 1960 SC 1203, where the Supreme Court in the last but one paragraph of its judgment, at page 1208 has observed that the attack, against acquisition in that case under Article 19(1)(f) was futile in view of the decision in Bhanji Munji's case, (S) AIR 1955 SC 41 and in Lilavati Bal v. State of Bombay, AIR 1957 SC 521. In Smt. Kamla Bala Dassi v. State of West Bengal, AIR, 1962 Cal 269, following the, decision in AIR 1960 SC 1203 (supra); Bose, J. of that High Court held that the decision in Kochuni's case, AIR. 1960 SC ro8o was no doubt an authority for the proposition that after the Constitution (Fourth Amendment) Act, 1955, Article 31(1) of the Constitution could not be construed as excluding the operation of Article 19(1)(f) of the Constitution, but that that case was no authority for the proposition that Article 31(2) of the Constitution did not exclude the applicability of Article 19(1)(f) of the Constitution. He further held that the legislation dealing with acquisition or requisition as contemplated by Article 31(2) read with Clause (2A) had the effect of excluding the operation of Article 19(1)(f) and therefore the West Bengal Act II of 1948, which dealt with acquisition and requisition as contemplated in Article 31(2) of the Constitution, could not be held to be ultra vires on the ground that it violated Article 19(1)(f). Similarly, in Sachindra Mohan Nandy v. State of West Bengal, AIR 1963 Cal 373, Mukharji, J. dealing with the same Act, has observed that it was too late in the day to contend that the expression

'authority of law' occurring in Article 31(1) and attracting Article 19 and the doctrine of reasonableness therein, must equally be applicable to the same expression used in Article 31(2) notwithstanding the fact that clause (2) specifically and exclusively refers to requisition or acquisition. The learned Judge at page 377, referred to an unreported judgment of the Supreme Court in Sitabati Devi v. State of West Bengal, C. W. No. 22 of 1961, D/- 1-12-1961 where the Supreme Court dealing with West Bengal Land (Requisition and Acquisition) Act, 1948, held that the observations in Kochuni's case, AIR 1960 SC 1080 that Bhanji Munji's case, (S) AIR 1955 SC 41 no longer held the field had, to be understood to mean that it no longer governed the cases of deprivation, of property by means other than requisition and acquisition by the State and has also observed that this decision distinguished Kochuni's case, AIR 1960 SC 1080 on the ground that it was not concerned with a law of requisition or acquisition and was not directly concerned with the question whether Bhanji Munji's case, (S) AIR 1955 SC 41 did not, after the amendment, apply even to law of requisition or acquisition of property governed by Article 31(2) as it now stands and that it did not decide that question. He held that having regard to the fact that the Supreme Court in Sitabati Devi v. State of West Bengal, C. W. No. 22 of 1961, D/- 1-12-1961 (SC) has held that the West Bengal Land (Requisition and Acquisition) Act, 1948, was valid, the point that in a case falling under Article 31(2), Article 19(1)(f) would be attracted was no longer open to argument. These decisions clearly show that the direction in Kochuni's case, AIR 1960 SC 1080 that the decision in Bhanji Munji's case, (S) AIR 1955 SC 41 no longer held the field was confined to only to cases falling under Article 31(1) and therefore the principle laid down in Bhanji Munji's case, (S) AIR 1955 SC 4T would still apply to cases falling under Articles 31(2) and (2A) and therefore Article 31(2) and (2A) must be held to be self-contained dealing with cases of acquisition or requisitioning and not subject to Article 19(1)(f) or Article 19(5). There is a further reason for holding so because once the Parliament laid down in clause (2) of Article 31 that the prerequisites for the exercise of the power of acquisition or requisition were the existence of a public purpose and the provision for compensation, the very same Parliament would not again lay down the very same test of reasonableness provided in Article 19(5). The existence of a public purpose being itself a criterion of reasonableness it is hardly conceivable that parliament would again subject such an act of acquisition or requisition to the same test of reasonabless under Clause (5) of Article 19. For these reasons, the contention of the learned Advocate General that Article 19(1)(f) and Article 19(5) would not apply to cases falling under Article 31(2) and (2A), must be sustained.

14. Even if we were not to be correct in the view that we take, it is difficult to agree with Mr. Nanavaty that cases of acquisition arising under Clause (aa) of Section 40(1) of the Land Acquisition Act would not meet the test of reasonableness. It is now well-settled that in applying the test of reasonableness, the Court has to consider the question in the background of the facts and circumstances under which the restriction in question was enacted, taking into account the nature of the evil that was sought to be remedied by such law, the ratio of the harm caused to the citizen by the proposed remedy to the beneficial effect reasonably expected to result to the general public and whether the restraint caused by the law is disproportionate to the interest o the general public expected to ensure as a consequence of the restriction. Though the affidavits in reply do not throw any light on this part of the contention, there can be no dispute that they are not the only source of materials to which the Court has to confine itself. The Court is certainly entitled to look into the impugned Act itself to ascertain whether there are materials in it which meet the test of reasonableness. In Section 40 of the Act itself, the Legislature has provided two checks before an appropriate Government can give consent to the acquisition, namely, (i) the decision on the part of the Government, though no doubt on its subjective satisfaction, based however upon the report of the Collector made under Section 3A of the Act or on an enquiry held under Sub-section (2) of that section, and (2) its satisfaction that any one of the three purposes mentioned in Sub-section (i) exists, showing that the power to give its consent for acquiring a given property is neither arbitrary nor unreasonable. Under Section 44 of the Act, a further restraint is provided by prohibiting the company, for whom the acquisition is made, to retransfer the property in question, thus ensuring that the acquired property would be used only for promoting an industry or a work for a public purpose, yet another safeguard is now provided by amending Section 55 which, confers power upon the Central. Government to make rules for the guidance of the State Governments and the officers of the Central Government and the State Governments, and the proviso to that section further provides that every such rifle made by the Central Government shall be laid as soon as may be after it is made, before each House of Parliament. The amendment of Section 55 thus provides a sufficient safeguard for ensuring that properties are acquired in a reasonable manner and only for furthering and promoting public purposes. The proviso to Section 55 also shows that Parliament has retained its control over the rule making power conferred upon the Central Government by Section 55. The rules made under Section 55 are binding upon the Governments and their officers dealing with acquisitions as they are statutory rules having the force of law. If one were to glance at the rules, such as Rule 3 providing for the appointment of a committee, and Rule 4, Clauses (1), (2) and (4) and Rules 5, 7 and 9, it is easy to see how safeguards have been provided therein to ensure that acquisitions of properties are made in a reasonable manner and only for public purposes which would further and promote public interest. The fact that these rules provide that a company applying for acquisition should first offer a reasonable price to the owner of the expropriated property, dearly shows that care has been taken to see that acquisition is to be resorted to only in cases where the company cannot acquire the land in question although it has offered a reasonable price. These checks and safeguards provided for in Sections 40 and 41 and in the rules made under Section 55 of the. Act furnish data which the Court is entitled to take into consideration while ascertaining the reasonableness of the restriction in question. As held in Kochuni's case, AIR 1960 SC 1080 the Court can also turn to the statement of objects and reasons, though of course for the limited object of ascertaining the conditions prevailing at the time when the impugned enactment is made and the purpose for which it is enacted. In the statement of objects and reasons dated August 1, 1962, published in the Gazette of India Extraordinary at page 607, Part II Section 2 6f August 8, 1962, two reasons for the necessity of passing the impugned law have been given, (1) the difficulty created by the decision in R.L. Arbra v. State of Uttar Pradesh, AIR 1962 SC 764, by reason of the various State Governments having acquired lands for companies engaged in industries which were likely to promote economic development of the country or which were essential to the life of the community and doubts having arisen as to the validity of such acquisitions by reason of the decision requiring under Clause (b) of Section 40(1) of the Act that the work to be constructed on the acquired land should be directly, useful to the public and the public being entitled to the use of such work as of right for its own benefit in accordance with the terms of agreement made under Section 41, and (2) the representations' made by various State Governments that the decision in Arora's case, AIR 1962 SC 764 would have far reaching consequences in respect of future acquisitions for companies and their apprehension that the decision might render planned development of industries extremely difficult and the possible danger that the acquisitions already made might be questioned in the light of the aforesaid decision and of demand being made, for restoration of such lands by the owners or for damages on the ground of wrongful deprivation of lands. There can be no doubt that in a growing and fast-developing economy in the country and the commitment that the country has made to the system of periodical plans a system whereunder the particular regions and resources readily available therein have to be allocated and reserved for development of particular industries according to laid out plans, is of extremely vital consequence, considering both the immediate and the future needs of the country. That being so, it cannot justifiably be contended that if an additional purpose is added in Sub-section (1) of Section 40 of the Act, enabling an appropriate Government to give its consent to an acquisition which is required for an industry to work of a public purpose, such an enactment is excessive or unreasonable. Mr. Nanayaty in fact conceded that such an additional purpose was needed for the planned development and growth of industries and that such an amendment cannot be said to be an unjustifiable amendment. But his contention was that the statement of objects and reasons merely contained an apprehension based upon the opinion of the State Governments and did not furnish any materials upon which such an opinion or apprehension can be founded. That contention cannot be sustained, for, under the circumstances which arose as a result of the decision in Arora's case, AIR 1962 SC 764 the States at that stage could only express their fears arising from the verdict of tile Supreme Court. Besides, the States could net be expected to wait, until the mischief which was sought to be evaded, has actually arisen. In these circumstances, their apprehension could at best be their assessment of the circumstances arising on the one hand from the decision and on the other from the past acquisitions made by them which might not perhaps strictly fall under Clause (b) of Section 40(1) of the Act, as construed by the Supreme Court. In Ham Krishna Dalmia v. S. R. Tendolkar, AIR 1958 SC 538, the Supreme Court though dealing then with Article 14, observed that there was a presumption that the Legislature understands and correctly appreciates the needs of its own people and that laws enacted by it ate directed to problems made manifest by experience. That principle must equally apply to contentions raised under Article 19(1)(f) and Article 19(5) and while the Court is dealing with the question whether a particular restriction is either excessive or disproportionate to the mischief the prevention of which is the purpose of a particular impugned enactment. We are therefore entitled to consider the statement of objects and reasons the apprehensions of various States therein mentioned and come to the conclusion from the difficulties therein, referred to that the restrictions contained in the Amendment Act XXXI of 1962 cannot be condemned as excessive or unreasonable, especially in view of the fact that Clause (aa) of Section 40(1) of the Act only gives power to the appropriate Government to give its consent for acquisition in cases of companies which are engaged or which, have taken steps for engaging themselves in industries or works which are for public purposes. It is clear that such acquisitions would be to promote public purposes, which is the object on which the principal Act is founded, the only difference being that such public purposes are now sought to be furthered through agencies of such companies. The danger to the past acquisitions of lands on which acquiring companies might have invested considerable amounts and upon which industries or works tending to be useful to the public might have been set up, is also an equally important circumstance which must enter into consideration while dealing with the question of the necessity for the impugned Act and the impugned Act not being excessive or unreasonable. Furthermore, Article 31(2) itself lays down the criterion, namely, of the existence of public purpose and the necessity of compensation and if this criterion exists in a statute which permits deprivation of property by way of acquisition or requisition such a statute cannot be considered as unreasonable. An enactment which provides for consent to be given by the appropriate Government such as Clause (aa) of Section 40(1) of the Act for an acquisition for a company through which public purpose is sought to be fostered and promoted, cannot in our view, be struck down on the ground of its being unreason, able and as one not saved by Article 19(5).

15. The next contention of Mr. Nanayaty was that under Section 6 of the Act, a declaration there under made is conclusive evidence and so long as such a declaration was made under the pre-Constitution Act, it was saved by Article 81(5), But when such a declaration is made under a post Constitution Act, namely the impugned Act XXXI of 1962 which deprives a citizen of his fundamental right of property by virtue of Clause (aa) of Section 40(1), such a law which makes such a declaration conclusive evidence and which cannot be challenged in a Court of law is nothing but an excessive restriction. A post-Constitution Act which permits an acquisition which is made dependent upon the subjective, satisfaction of an appropriate Government and which is not open to a judicial verdict must be held to be unreasonable. Mr. Nanavaty argued that it may be that a law which deprives a citizen of his property for public purpose may be considered to be a reasonable restriction but a law which permits deprivation of property on the basis of a declaration of public purpose dependent oh the mere subjective satisfaction of an appropriate Government and making such declaration unjustifiable, is per se unreasonable. He further argued that when Section 40 of the Act was amended, Section 6 also could have been suitably amended, making the question as to the existence of a public purpose a justifiable one. The restriction then would have been reasonable because a citizen in that event could have agitated such an issue in a Court of law. By not doing so, the Legislature not only makes the subjective satisfaction of the State Government a basis, but goes one step further and makes a declaration based on such subjective satisfaction conclusive evidence, precluding thereby a Court of law judging it on an objective basis. Since the declaration under Section 6(1) is based on the subjective satisfaction of the propriate Government, it crosses the bounds of reasonableness. Mr. Nanavaty, on this aspect of the contention, relied upon the State of Madras v. V. G. Row, (1952) 3 SCR 597: (AIR 1952 SC 196), and in particular, the observations made at pp. 607 and 608 (of SCR): (at p. 200 of AIR) where the. Supreme Court has observed that the formula of subjective satisfaction of the Government or of its officers, with an Advisory Board thrown in to review the materials on when the Government seeks to override a basic freedom guaranteed to the citizen, may be viewed as reasonable only in very exceptional circumstances and within the narrowest limits, and cannot receive judicial approval as a general pattern of reasonable restrictions on fundamental rights.

16. In order to appreciate this contention, it is necessary to examine Sections 4 and 6 of the Act. Under Section 4, a notification has to be issued by an appropriate Government whenever it appears to such Government that land in any locality is needed or is likely to be needed for a public purpose. Under Section 6(1), when such appropriate Government is satisfied that any particular land is needed for a public purpose or for a company, a declaration is to be made to that effect and under Sub-section (3), such a declaration is made conclusive evidence, where the acquisition is for the State, that it is needed for a public purpose and where the acquisition is for a company, that it is needed for a company. Where the acquisition is for a company, Sub-section (1) makes it clear that the declaration there under to be made is subject to the provisions of Part VII of the Act. It has to be remembered that the notification under Section 4 of the Act can be made only if it appears to the Government concerned that the land is needed or is likely to be needed for a public purpose. Therefore, whether the acquisition is for the State or for a company, there has to be a public purpose for which the land is needed. Of course, where it is for a company, the acquisition proceedings are subject to the provisions of Part VII of the Act, that is to say, the Government concerned cannot give its consent to such an acquisition unless it is satisfied that the acquisition is for purposes mentioned in Clauses (a) and (b), and now under Clause (aa) of Sub-section (1) of Section 40, and the declaration under Section 6 can be made only after the agreement set out in Section 41 is made. But both Sections 4 and 6 of the Act are pre-Constitution provisions and the public purposes mentioned therein still remain the same. What Section 6 in fact does is to lay down that the declaration made there under is conclusive evidence as regards two things, (1) that the land in question is needed, and (2) that it is needed for a public purpose or for a company. Such a declaration can only be made after an enquiry is made under Section 5A or under Sub-section (2) of Section 40 and after the Government has considered the report made by the Collector who has to hear, before making such report, the objections raised by parties interested in the land. In the case of acquisition for a company, the subjective satisfaction of the Government comes in at the stage when under Section 40(1) the . Government has to determine whether the acquisition is for any of the purposes set out in Clauses (a) and (b) and now, after the Amendment Act XXXI of 1962, under Clause (aa), namely, that such acquisition is needed for the construction of some building or work for a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose. Therefore, the only thing that has been done by the insertion of clause (aa) in Section 40(1) is that in addition to the purposes set out in Clauses, (a) and (b), the appropriate Government can give its consent if it is satisfied that a third purpose set out in the new clause (aa) exists. The question, therefore, is whether leaving such a question to be determined on the subjective satisfaction of the Government is by itself unreasonable or excessive. The fact, that the Legislature appoints Government as a special tribunal for deciding whether the purpose of the acquisition is to obtain land for the erection of dwelling-houses or for the provision of amenities or that such acquisition is needed for the construction of some work and that such work is likely to prove useful to the public or that such acquisition is needed for the construction of some building or work for a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose, is not per se unreasonable or excessive. The decision by the appropriate Government as to the existence of any of the purposes set out in these clauses after an enquiry is made either under Section 5A or under Sub-section (2) of Section 40 and after objections of the parties have been heard: by the Collector, if the enquiry is made under Section 5A, and after the report of the Collector has been made avaliable to the appropriate Government for its consideration before such a decision is arrived at by it, would prima facie show that the provision for such a decision is neither unreasonable nor excessive. Leaving such a decision to the appropriate Government by itself would not make such a legislative provision unreasonable. In Smt. Somawanti v. The State of Punjab, AIR 1963 SC 151, the Supreme Court has observed at p. 161 that the object of the acquisition law is to empower Government to acquire land only for a public purpose or for a company, and the acquisition for a company contemplated by Part VII of the Act is confined only to cases where the Government is satisfied that the purpose of obtaining the land is erection of dwelling-houses for workmen employed by the company or for the provision of amenities directly connected therewith or for the construction of some work which is likely to prove directly useful to the public. After a notification, under Sub-section (1) of Section 4 is published, a person interested in the land, is entitled to object to the acquisition. That objection may be raised on any ground as for instance that the land is not in fact needed at all for any purpose or that it is not suitable for the purpose for which it is sought to be acquired or that the purpose is not a public purpose, or what is said to be a company is not a company and so on. Finality, is attached to the decision of the Government which ultimately has to decide such objections. Then follows Section 6 which enables the Government to make a declaration provided that it is satisfied that a particular land is needed for a public purpose or for a company. No doubt it is open to the State Government in an emergency, by exercising its powers under Sub-section (4) of Section 17, to say that the provisions of Section 5A would not apply. But for construing the provisions of Section 6 it would be relevant to bear in mind that section. The scheme of the Act is that normally the provisions of Section 5A have to be complied with. Where in pursuance of the provisions, objections are lodged these objections would have to be decided by the Government. For deciding them the Government will have before it the Collector's proceedings. It would, therefore, be clear that the declaration that a particular land is needed for a public purpose or for a company is not to be made by the Government arbitrarily, but on the basis of materials placed before it by the Collector. The provisions of Sub-section (3) of Section 5A make the decision of the Government on the objections final while those of Sub-section (i) of Section 6 enable the Government to arrive at its satisfaction. At p. 164 of the report, the Supreme Court then has observed that whether in a particular case the purpose for which the land is needed is a public purpose or not, is for the appropriate Government to be satisfied about. This observation is made in connection with an acquisition for a public purpose by the State and not in respect of an acquisition for a company. It is then stated that if the purpose for which the land is being acquired by the State is within the legislative competence of the State the declaration of the Government would be final, subject however, to one exception, namely, that if there is a colourable exercise of power the declaration would, be open to challenge at the instance of the aggrieved party. Therefore, the power committed to the Government by the Act is a limited power in the sense that it can be exercised only where there is a public purpose, leaving aside for the moment the purpose of a company. If it appears that what the Government is satisfied about is not a public purpose but a private purpose or no purpose at all, the action of the. Government would be colourable as not being relatable to the power conferred upon it and its declaration would be a nullity. Public purpose, as has often been said, is bound to vary with the demands and the prevailing conditions in a given locality and therefore, it would not be a practicable proposition even to attempt a comprehensive definition of it. Probably it is because of this difficulty that the Act does not attempt to define it and it is also for that very reason that the Legislature left it to the appropriate Government to see whether a public purpose exists or not and then to declare the need of a given land for a public purpose. The objection raised by Mr. Nanavaty, namely, that the declaration under Section 6 having been made conclusive evidence precluding such a question from being justifiable, can be best answered in the language of the Supreme Court in Somawanti's case, AIR 1963 SC 151 at p. 164 of the report, where the Supreme Court while referring to the decision in Arora's case, AIR 1962 SC 764 has stated as follows:

'This Court pointed out that Section 6(3) makes the declaration under Section 6(1) conclusive evidence of the fact that the land is needed for a public purpose or for a company and that as the declaration stated that the land was needed for a company and that fact was not disputed by the parties, the provisions of Section 6(1) were of no assistance. We may point out that even according to that decision collusiveness attaches itself to the declaration that the land is required for a public purpose and, therefore, instead of assisting the petitioners it in fact assists the respondents. No doubt, in so far as an acquisition for a company is concerned Part VII requires that before a declaration under Section 6(1) is made the Government should be satisfied that the land is required for one of the two purposes set out in Section 40(1) of the Act. The Government can consent to the making of a decision under Section 6(1) after it is satisfied under Section 41 about the fact that the land is required for a company for the purposes set out in Clauses (a) and (b) of that section But the declaration made thereafter is confined only to one matter and that is that the land is required for a company and nothing more. The question whether in fact the land is required by the company for the purposes set out in Clauses (a) and (b) of Section 40(1) is not germane to the declaration. No doubt the power of the Government to make a declaration with respect to an acquisition for a company is circumscribed and, therefore, the Government is expected to exercise it with due Regard to the limitation placed upon it. But it does not follow that Sub-section (3) of Section (5 makes the declaration conclusive evidence not only of the fact that the land is required for a company but also of the fact that the land is required by a company for a purpose specified in Section 40(1) of the Act.'

These observations make it abundantly clear that what Sub-sections (1) and (3) of Section 6 do is only to make conclusive evidence in the case of an acquisition for a company, the determination by the appropriate Government that the land in question is needed for a company. But that does not mean that Sub-section (3) of Section 6 also makes the fact that it is required for a company for any of the purposes set out in Clauses (a), (b) and (aa) of Section 40(1) conclusive evidence. We may observe that the fact that the land is needed by the second respondent in the present case is not disputed by the petitioners. It is true that under Section 40 and Section 41, when the Government gives its consent it has to arrive at its conclusion, that the purpose for which the land is needed by a company is one of the purposes set out in the three clauses in Sub-section (1) of Section 40 and that that determination is dependent upon its subjective satisfaction. The point to be decided is whether leaving such a question on the mere subjective satisfaction of the appropriate Government is unreasonable. As already stated, such a determination is to be arrived at by the State Government after an enquiry under Section 5A is made by the Collector and the Collector has made his report or after an enquiry held under Sub-section (2) of Section 40. It is true that the Government has the power to dispense with such an enquiry by applying Section 17 to a particular case but the exercise of such a power is in exceptional cases and not to be done ordinarily. Even then, could it be said that such an enactment which leaves the question of giving consent dependent upon the subjective satisfaction of the Government is unreasonable? Besides Relying upon the observations j made in (1952) 3 SCR 597 : (AIR 1952 SC 196), Mr. Nanavaty contended that the question as to the purpose for which a company needs a particular land is a factual question and since such a factual question is left to be decided on the subjective satisfaction of the Government, the present case is on par with the case in (1952) 3 SCR 597: (AIR 1952 SC 196) and therefore, Clause (aa) of Section 40(1) read with that sub-section should be declared to be unreasonable and should be struck down. The facts on the basis of which the decision in (1952) 3 SCR 597 : (AIR 1952 SC 196) was arrived at, were entirely different from those in the present case. The Supreme Court there was concerned with criminal law and the impugned section left to the subjective satisfaction of the Government the decision that a particular association in its opinion constituted danger to public peace or that it had interfered or interfered with the maintenance of public order or had such interference as its object or had interfered or interfered with the administration of the law or had such interference as its object. Besides, the impugned section did not even provide for adequate communication of the notification which would be issued declaring an association to be unlawful to such association and its office-bearers. It was on these facts that the Supreme Court held Section 15(2) of the impugfied statute to be bad on the ground of its being an unreasonable restriction on the right guaranteed by Article 19(1)(c). The principal ground upon which the section was struck down was that the fundamental right to form associations or unions guaranteed by that Article had such a wide and varied scope for its exercise and its curtailment was fraught with such potential reactions in the religious, political and economic fields that the vesting of the authority in the executive Government to impose restrictions on such a right without allowing the ground of such imposition, both in their factual and legal aspects to be duly tested in a judicial enquiry, was a strong element to be taken into account in judging the reasonableness of restrictions imposed. Though the Supreme Court on those facts and particularly the resulting effect the imposition in question would have in different fields of life, struck down the impugned Section, it nevertheless laid down that in considering the reasonableness of laws imposing restrictions on fundamental rights, the test of reasonableness should be applied to each individual statute impugned and no abstract standard or a general pattern of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of 'the restriction imposed, the existence of urgency of the evil sought to be remedied there-by, disproportion of the imposition, the prevailing conditions at the time, should all enter into a judicial verdict. These observations clearly show that the standard applied in one case cannot be applied in another case with different set of facts. Mr. Nanayaty then relied upon the case of Thakur Raghubir Singh v. Court of Wards, Ajmer, (1953) 4 SCR 1049 : (AIR 1953 SC 373). In that case the Supreme Court was concerned with Section 112 of the Ajmer Tenancy and Land Records Act, 1950, which provided that if a landlord habitually infringed the rights of a tenant under the Act, he should be deemed to be a landlord who was disqualified to manage his own property within the meaning of Ajmer Government Wards Regulation I of 1888, and his property should be liable to be taken under the superintendence of the Court of Wards. Section 6 of Regulation I of 1888 provided that the Court of Wards may, with the previous sanction of the Chief Commissioner, assume the superintendence of the property of any landholder who is disqualified to manage his own property. The petitioner, whose estate was taken over by the Court of Wards under the aforesaid provision, applied for relief under Article 32 of the Constitution for restoration of his estate and the Supreme Court held that the provisions of Section 112 of the Ajmer Tenancy and Land Records Act, 1950, could not be regarded as reasonable restriction imposed in the interest of the general public on the exercise of the right conferred, by Article 19(1)(f). The Supreme Court also held that the result of the combined operation of the aforesaid provisions was that the Court of Wards could in ifs own discretion and on its subjective determination, assume the superintendence of the property of a landlord who habitually infringed the rights of his tenants and the exercise of the discretion of the Court of Wards could not be questioned in a Civil Court. The Supreme Court held Section 112 of the aforesaid Act read with the provisions of Regulation I of 1888 as infringing the fundamental rights of the petitioner guaranteed by Article 19(1) of the Constitution and struck down that section. The enactment with which the Supreme Court was concerned in that case was not a law providing for acquisition of any estate or the rights therein or for the extinction, or modification of any such rights within the meaning of Article 31(1) but for suspension of the right of management of the estate for a certain time, and besides the provisions of Section 112 of the Ajmer Tenancy and Land Records Act of 1950 were penal in nature and intended as a punishment of a landlord who habitually infringed the rights of his tenants. As observed by the Supreme Court in V. C. Row's case, (1952) 3 SCR 597: (AIR 1952 SC 196), each statute has to be examined where its reasonableness is challenged, from the point of view of the object for which it is enacted, and the mischief which is intended to be prevented and consequently, the question whether an impugned statute is reasonable or not in its restriction has to be ascertained from different considerations arising from the facts and circumstances of each case. In the two decisions relied upon by Mr. Nanayaty, the facts were entirely different from the ones before us and therefore neither of them can apply to the present petition. As we have said a little earlier, the standard applied in one case for ascertaining the reasonableness may not apply to another, for, each statute challenged has to be considered from the conditions relating thereto and the mischief, the prevention of which the purpose of that enactment is. The contention that the impugned enactment is invalid by reason of its being unreasonable or excessive and therefore not saved by Clause (5) of Article 19, cannot, for the reasons aforesaid, be sustained.

17. The next contention was with regard to the words 'for a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose,' in Clause (aa) of Section 40(1). Mr. Nanavaty argued that whereas the first part of this clause is certain and definite, the second part of it is not, and that it would be impossible for an appropriate Government to decide in the case of a company which is not engaged in any industry or work but is about to do so, whether the industry or the work which it is about to start is for a public purpose. The clause makes distinctions between companies which are already engaged and those which are taking steps for engaging themselves in particular industries or works for a public purpose. In the former case, a company might want to extend the industry it is already engaged in and might need land for such extension. In the latter case, a company might not have started but is about to' start an industry or work and might need land to construct a factory or a building, as in the present case. A company which has not already started its industry work but has taken necessary steps to do so, has got to be described in the manner it has been described in this clause. But there is no vagueness or indeterminate ness about such a condition for, the provisions of the Act themselves provide various steps which take away any indefiniteness. namely, the agreement, the terms and conditions to be inserted therein, the provision for objections by those interested in the land under Section 5A, and the report thereon of the Collector, and its consideration by the appropriate Government, etc.

There, is, therefore, no substance in this contention, for, the Act cotains sufficient safeguards against any, indefiniteness in Clause (aa).

18. Mr. Nanavaty's 'argument then was that even if we were to hold that the impugned statute cannot be successfully challenged on the ground of the restriction being unreasonable, it is bad be cause of its contrary to Article 31(2) read along with Article 13(2). The argument was that inasmuch as Article 31(2) provides a safeguard against destruction of the fundamental right to bold property by providing that acquisition or requisitioning of property can only be done for a public purpose, it cannot be that the question as to the existence of that very purpose Which Constitutes such a safeguard and limitation, should depend upon the subjective satisfaction of Government debarring thereby a judicial review of such an objective fact. The contention was that inasmuch as the Act provides for the machinery of acquisition to be Set in motion by empowering the Government to give its consent and to enter into an agreement on being satisfied ubjectively that the purpose set out in Clause (aa) of Section 40(1) exists and to decide on such subjective satisfacation that the land in question is needed for a company such determination being conclusive under Sub-sections (1) and (3) of Section 6, it totally makes the issue of the existence of public purpose, which is the foundation for all acquisitions, unjustifiable and precluding the decision as to such an objective fact by a judicial process. Therefore, the argument ran, to the extent that Sections 3 and 4 of the Amendment Act XXXI of 1962 read with Section 6 of the Act confer conclusiveness on such a decision by Government, it is contrary to Article 31(2) and therefore, would be invalid under Article 13 (2). A subject whose rights in property are sought to be infringed, can agitate the question as to the existence of the public purpose mentioned in Clause (aa) of Section 40(1) under Article 31(2) notwithstanding the decision thereon made permissible on the subjective satisfaction, of, an executive Government. But that Mr. Nanavaty argued, is not compliance with the provisions of Article 31(2). The Constitution, having, guaranteed the fundamental right that there shall not be deprivation of property except for a public purpose, the existence of such a purpose cannot be left to the decision of the executive Government and that too, on its subjective satisfaction, and such an objective fact, the existence of which is the pre-requisite to the exercise of the power of compulsory acquisition, is an integral and essential part of Article 31(2). Therefore if there is a statute which debars it from its being a justifiable issue such a statute, to that extent would be bad as being contrary to Article 31(2). This contention, we may point out, is not bounded on the question, as to the reasonableness or otherwise of the restriction on the right of property under Article 19(1)(f) and Article 19(5) but is independent of it and is founded on the power of eminent domain having been restricted under Article 31(2).

'While considering this aspect of the contention , it is necessary first to ascertain the scope and content of Article 31(2). Fortunately, we have on that question the authoritative view of the SupremeCourt in The State of Bihar v. Kameshwar Singh, AIR 1952 SC 252. At P. 272 of the report, the Supreme Court has stated as follows--

'The sovereign power to acquire property compulsorily is a power to acquire it only for a public purpose. There is no power in the sovereign to acquire private property in order to give it to private persons. Public purpose is a content of the power itself. ......... Public purpose is an essential ingredient in the very definition of the expression 'eminent domain' as given by Nichols and other constitutional writers, even though obligation to pay compensation is not a content of the definition but has been added, to it by judicial interpretation. The exercise of the power to acquire compulsorily is conditional on the existence of a public purpose and that being so, this condition is not an express provision of Article 31(2) but exists aliunde in the content of the power itself and that in fact is the assumption upon which this clause of the article proceeds.'

This statement would suggest that a law whichseeks to debar' the question of a public purposefrom, being justifiable would be contrary not onlyto the express provision of Article 31(2) but alsoto the qualification of the sovereign right of eminent domain existing aliunde in the content of thatpower itself. The next decision pertinent on thisquestion is in State of West Bengal v. Mrs: Bella Banerjee; AIR 1954 SC 170, where the questionwas as regards the validity of Section 8 of the WestBengal Land Development and Planning Act XXIof 1948, which provided as follows:-

'A declaration under Section 6 shall be conclusive evidence that the land in respect of which the declaration is made is needed for a public purpose and after making such declaration, the Provincial Government may acquire the land and there upon to provisions of the Land Acquisition Act 1894, ............... shall, so far as may be apply.'

Though the Act in question was pre-Constitution enactment, it was not saved from the challenge of Article 31(2) under Article 31(5) because it was enacted within eighteen months from the commencement of the Constitution and was not certified by the President as required by Clause (6) of Article 31. The provisions of Section 8 of the impugned Act making the declaration of the Government conclusive evidence as to the public, nature of the purpose of the acquisition and the limitation of the amount of compensation, were declared ultra vires the Constitution and void by the High Court of Calcutta. Before the Supreme Court the learned Attorney-General appearing for the State conceded, that inasmuch as Article 31(2) made the existence of a public purpose necessary condition of acquisition, the existence of such fact must be established objectively and the provision of Section 8 relating to the conclusiveness of the declaration of Government as to the nature of the purpose, of acquisition must be held unconstitutional. The concession made by him, as it appears from p. 172 of the report, received the imprint of the Supreme Court as a concession having been rightly made. This decision is therefore, a clear authority that giving conclusiveness to the determination by Government on the question as to the existence of a public, purpose, if made under an Act to which Article 31(5) does not apply, would be invalid as being in conflict with Article 31(2). Similarly, in Satya Narayan Nathani v. State of West Bengal, (S) AIR 1957 Cal 310, an order requisitioning certain premises under the West Bengal Premises Requisition and Control (Temporary Provisions) Act of 1947, was passed and that order was challenged inter alia on the ground that the purpose for which requisition was made was not a public purpose at all. The High Court of Calcutta first came to the conclusion that by reason of the extensions given to the Act, though it was enacted prior to the commencement of the Constitution and the impugned order having been made on July 10, 1952, it was an Act to which Article 31(2) applied. The Act, amongst other things, contained a provision that the Government May acquire or requisition any property which may appear to it to be needed for a public purpose. Relying on the decision in AIR 1954 SC 170 (supra), the High Court observed that the Act to which Article 31(2) applied, cannot, by enacting that Government may acquire or requisition any property which may appear to it to be needed for a public purpose, create a wall of immunity around orders made under the Act and exclude judicial scrutiny as to the existence or the character of the purpose, and that if such a provision did occur in such an Act, it might, as a matter of language, mean that Government would be the sole judge of whether a public purpose existed and also of whether the property was needed for such a purpose, but it would be wholly unconstitutional and wholly ineffective as to take away the power of the Court to look into the matter for itself and uphold or quash the order according to its own conclusion. To allow such a provision to take the effect which its language contemplated would be to make the question unjustifiable and, therefore, to thwart the Constitution. Therefore, where Article 31 (2) applied to an Act, a provision contained in it, which made the subjective satisfaction of the Government the sole condition precedent to the exercise of the power of acquisition or requisition, would be of no avail against Courts and in spite of such a provision, the Courts would have jurisdiction to judge both' the existence or otherwise of a purpose and its character. These decisions, therefore, clearly lay down the proposition that a provision in an Act to which Article 31 (2) applies cannot avail Government against the Constitution even if it provides in clearest language that the Government is the sole judge Of whether a public purpose warranting acquisition or requisition exists. In such a case the provisions of Article 31 (2) would override such a provision and the Act must give way to them. Indeed, the learned Advocate-General conceded that such an enactment cannot override the provisions of Article 31(2). But he argued that Section 40 of the Act did not contain any such provision which made the question as to the existence of a public purpose unjustifiable and that therefore, there was nothing in that section which can be said to fly in the face of Article 31(2).

19. The contention, on the other hand, of Mr. Nanavaty was that though Section 40(!) and Section 41 deal with and are concerned with stages prior to the commencement of acquisition proceedings, i. e., prior to the stage of Section 6, the resultant effect of the working out of Section 40(1)(aa) is that it is the Government which, on the basis of its subjective satisfaction, decides whether the company for which acquisition is to be made is one which has a public purpose, and it is that determination which is final and taken out of judicial scrutiny of Courts of law except in limited cases, such as colourable exercise of power, fraud on the statute, etc., and is therefore invalid as it makes the fact of a public purpose unjustifiable. This contention, we may observe, is founded upon a construction of Clause (aa) of Section 40(1) which postulates that under this clause, it is the appropriate Government which has the power to decide on its subjective satisfaction, not only that the acquisition is needed for the construction of some building or work for a company but that such a company is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose.

20. The question for consideration is whether such a construction is correct and is borne out by the language used in this clause. In our view, though such a construction appears apparently to be correct, a scrutiny of the entire sub-section leads to the conclusion that it is not so and that though the first part of this clause, namely, that the acquisition is needed for the construction of some building or work for a company is to be determined by the appropriate Government on its subjective satisfaction, the latter part of the clause is descriptive of a such a company, namely, that it is a company which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose. In our view, Clause (aa) falls into two parts, the first of which is entirely left at that stage to the determination of the Government on the basis of the report of the Collector under Section 5-A or on an enquiry held under Sub-section (2), and the second part on which, though the Government has to satisfy itself it being a qualification or a description of such a company, is still an objective fact and no consent therefore for acquisition can be given unless it is for a company which falls under that description. Even the learned Advocate-General, though he declined to subscribe to such an interpretation, conceded that it was a possible one, looking to the language used not only in this clause but also in the other two clauses as well.

21. The construction which we are inclined to adopt commends itself for a number of reasons :

(1) The language used in Clause (aa) is susceptible onsuch a construction and if it is adopted, does not resultin violation or straining of or giving any incorrect meaningto that language.

(2) It fits in properly with the language used in the other two clauses and is consistent with the functions entrusted to the appropriate Government by and under the other two clauses. It will be seen that under Clause (a) the appropriate Government has to satisfy Itself on the question that the purpose of the acquisition is to obtain land for the erection of dwelling-houses or for provision of amenities directly connected therewith, under Clause (b), the appropriate Government has to satisfy itself that the acquisition is needed for the construction of some worn and further that such work is likely to prove useful to the public. Under Clause (aa), it has to satisfy itself mat me acquisition is needed for the construction of some building or work for a company which fulfils the qualification of being one which is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose. Thus, under all the three clauses, the emphasis is on purposes for which the land is needed having public interest, and the appropriate Government can give its consent to an acquisition only when one or the other of them is found to exist, When, therefore, the question of the existence or otherwise of such a purpose is left to the subjective satisfaction of the appropriate Government, it is hardly possible that when Clause (aa) was enacted by the Legislature, it would entrust to the Government the further function of determining subjectively whether the company is one Which qualities under that clause, a fact not only unconnected with the finding on the purpose, but which cannot be determined without an elaborate enquiry at that stage.

(3) It is clear that when the draftsman added Clause (aa) in Sub-section (1), what he meant was only to add one more purpose for which an acquisition can be made by an appropriate Government, but intended to so provide it that it would tit in with the other two clauses enacted originally. It would appear that therefore he took, what the learned Advocate General called the pattern of the language, from the other Clause (b). Clause (b), it will be seen, starts By using the expression 'when such acquisition is needed for the construction of etc.' and the draftsman used the very same expression white providing the new Clause (aa). That seems to be deliberate for obviously he did not wish to change or vary the scheme and structure of the sub-section, but only to add one more purpose for which the appropriate Government would be empowered to give its consent. But it will be noticed that whereas in Clause (b) the Legislature gives power to the Government not only of deciding that the acquisition is needed for the construction of a work nut also of determining that such work is likely to prove useful to the public by employing the words 'and that' between those two parts or that clause, in Clause (aa) the very same Legislature gives up that expression and instead uses the qualifying or descriptive 'which' while providing for what Kind of company the acquisition can be made, though in both the causes as also fn Clause (a) the purpose for which the acquisition is to be made is for the erection or construction of some building or work. It will also be noticed that since the draftsman was fallowing the pattern of clause (b) while providing Clause (aa), he could have used, if he so intended, the very words used in Clause (b), namely, 'and that' while joining the two parts of Clause (aa) as the Legislature has in tact done in Clause (b), in which event Clause (aa) would have read just the same way as Clause (b) and would nave meant, by the use of the words 'and that' instead of the word 'which', that the Government should decide, as in the case of Clause (B), not only (1) that such acquisition Is needed for the construction of some building or work for a company, but (2) that such a company is engaged or is taking steps for engaging itself in any industry or work which Is for a public purpose. The fact that me draftsman has given up the expression 'and that' to be found in Clause (b) while providing Clause (aa), though following otherwise the language of Clause (b), shows trial what B left to the subjective satisfaction of the appropriate Government Is the first part, namely, the, purpose, for which the land is needed and the acquisition required, but not the second part of it which describes the kind of company for which acquisition can be made.

(4) Such a construction is consistent with section a of the Act, for, under Section 6(1) a declaration is to be made when, subject to the provisions of part VII. the appropriate Government is satisfied that any particular land is needed for a company, and it is again, consistent with Sub-section (3) of that section whereunder such a declaration is made conclusive evidence. As held in Somawanti's case, AIR 1963 SC 151 what is conclusive evidence under section 6(3) in the case of acquisition for a company, is only the declaration that a particular land, is needed for a company. If the intention of the Legislature was that under Clause (aa) of Section 40(1), Government was to decide both the things on its subjective satisfaction, namely, that acquisition was needed for the construction of some building or work for a company and also that such a company was the one described therein, then Section 6 would have required or would have been altered to make that meaning clear by providing that the declaration would be not only that the land is required for a company but also, that such a company, according to Its subjective satisfaction, was one which was of the kind described in Clause (aa) in Section 40(1), that is not made conclusive, and neither Sub-section (i) nor Sub-section (3) of section 6 is allered or amended.

(5) When the draftsman provided Clause (aa), he knew the provisions of Article 31(2) and the scope and content of that Article which by that time was the subject matter of interpretation in several decisions, both by the supreme Court and several High courts, and there fore, must have known that acquisition or requisitioning or property of a subject can only fie made for a public purpose and that such a public purpose is an objective fact and a justifiable one. It is therefore not conceivable that in the face of such an Article in the Constitution he would include in Clause (aa) any provision which would leave the determination of It to the subjective satisfaction of the executive Government, the effect of which would make that declaration final and binding, as the High Court of Calcutta has said, a wall of immunity for it from a judicial scrutiny of it. This construction. Which we are inclined to adopt for these reasons, is the correct construction and that being so, there is nothing in Clause (aa) which is contrary or repugnant to Article 31(2) and therefore, the contention as to its invalidity must fail. In any event, the construction which we are inclined to adopt is a possible construction and where there are two alternative interpretations, one which is favourable and more consistent with the spirit of the Constitution and the rights of the citizen and another which is likely to defeat that spirit or those rights it is the bounden duty of Courts of law to which the sacred task of maintaining and uphoding those rights Is entrusted by the Constitution, to prefer that construction which does not hurt those rights rather man the one which tends to cause damage to them.

22. Even if the construction we are inclined to adopt were not to be correct, the contention as to the invalidity of Section 40(1) as amended cannot, on an alternative aspect of it, stand. The scheme of Sections 39 and 40 provides that in the case of an acquisition for a company, before acquisition proceedings commence and a declaration under Section 6 of the Act is made, certain preliminary stages are to be gone through. These preliminary stages are, (l) consent by the appropriate Government and (2) the execution of an agreement under Section 41. Section 40 provides for a previous enquiry by the appropriate Government Before it gives its consent to an acquisition for a company. Since it is the appropriate Government which acquires the land in question, it is necessary that it should first be satisfied, either on a report of the collector under Section 5A or by an enquiry provided under Sun-sections (2) and (3) of Section 40, that the acquisition is to be made for any of the purposes set out in Clause (a), (b) or (aa) of Sub-section (1) of Section 40. It is alter mese stages have been gone through that a declaration under Section 6 (1) to the effect that the particular land is needed for a company, has to be made, and as has been held in Somawanti's case, AIR 1963 SC 151 it is this declaration, namely that the land in question is needed for a company, that is made conclusive evidence. The decision in somawanti's case, AIR 1963 SC 151 makes it clear that from the tact that the declaration that the land is needed for a company is conclusive evidence under Section 6(3), it does not follow that the purpose for which the company needs the land and for which the acquisition is made, is also conclusive evidence. It is true, as Mr. Nanavaty contended, that finality is given to the subjective satisfaction of the appropriate Government, at that stage that any of the three purposes set out in Section 40(3) exists and that a Court of law would not interfere at that stage, it is also true that it is on the basis of that satisfaction that the Government gives its consent to the commencement of the acquisition proceedings. But all that is done at the stage before the stage when acquisition proceedings begin. This is clear from the tact that Section 40 itself mentions that stage as previous enquiry. it is obvious that since acquisition is to be made by the appropriate Government, the court would not at that stage of enquiry interfere on the ground that it is the Court and not the Government which should satisfy itself whether any of the three purposes exist or not. It would appear that since it is the Government which acquires the land, it must, satisfy itself before it sets in motion the machinery for acquisition that the company needs the land for any of the purposes for which only it can proceed with the acquisition. The stage at which such on enquiry is made and when the appropriate Government has to ascertain on its subjective satisfaction that the company in question needs the land for any of me purposes set out in Section 40(1), is one before the acquisition proceedings actually Begin by a declaration under Section 6(1), which is made conclusive evidence under section 6(3) to the extent that the land is needed for a company. Therefore, if an acquisition is made for a company which does not need the land for any of the purposes set our, in Section 49(1), notwithstanding the consent given by the Government the Court can always interfere and strike down the acquisition as one made in colourable exercise of us authority or in fraud of the Act. The decision in Bela Banerjee's case, AIR 1954 SC 170 and in Satya narayans case, (S) AIR 1957 Cal 310 cannot avail the petitioners as in both the cases the challenge was to the conclusiveness having been conferred on the decision of the Government as to the public purpose and that conclusiveness having made the question as to the public purpose unjustifiable and, therefore, contrary to the language of Article 31(2) of the Constitution. That is not so in the case of the Act under consideration for in the case of an acquisition for a company, the only thing that is made conclusive Is the declaration under Section 6(1) that a particular land is needed for a company. it is, therefore, not possible to accede to me contention that Clause (aa) in section 40 ID suiters from constitutional invalidity, as urged by Mr. Nanavaty. We may, observe at this stage that In any event, mo acquisition in the present case is clearly for a public purpose and that fact has been conceded mare than once by Mr. Nanavaty.

23. The next challenge to Section 40(3) was on the ground that it was violative of Article 14. Relying on the decision in AIR 1958 SC 538, it was argued that me Amendment Act XXXI of 1962 made classification, between individuals and turns on the one hand and companies on me other and a further classification between private companies and public companies and that those classifications were not warranted inasmuch as there was no reasonable nexus between such classifications and the object in view in enacting the Act. Mr. Nanavaty however conceded that the classifications were based on an intelligible differented and his objection was limited to the alleged absence or any nexus between the classifications and the object in view of which the Act was passed. Mr. Nanavaty argued that the object of the Act, as appealing from the Act itself, is to enable the appropriate Government to acquire land for companies which are engaged or have taken steps to engage themselves in an industry or work which is for a public purpose and therefore, it was immaterial through which agencies such public purpose was furthered and achieved, whether such agencies were private companies or individuals or firms. We are of the view that this challenge lacks substance and that too, for an obvious reason. As we have already said, the Act contemplates two types of acquisitions, one for the State and the other for companies. But both the types of acquisitions are, and can only be, for a public purpose. Since the purpose for which the Act enables acquisition is a public purpose, it is out natural that the Legislature would make a classification between individuals and firms on the one hand and companies on the other. Such classification is easily understandable from the fact that companies incorporated under the companies Act would be better agendas with possibilities of investments and resources on a larger scale than either individuals or firms. Besides, the companies would be conducing their business under the control of both the Government and Courts of law by reason of the several provisions contained in the Companies Act and since the purpose to be achieved is a public purpose, the Legislature would naturally prefer companies to individuals or firms. But the argument was that a provision could have been made in the Act for control of business conducted by such firms and individuals and bring them on a par with companies. That perhaps would not only be not possible but would also necessitate as elaborate an Act as the companies Act and an equally elaborate administration, as the one under the Companies Act. Since the purpose for which an acquisition can be made is a purpose in the interest of the public, the classification is justified because in the case of companies, the Companies Act provides considerable control and supervision over the conduct of the business. Even before the Amendment Act was passed, this classification was there in the Act and for a good region, namely, that the purpose would be better served through the agency of a company rather than a firm or an individual. Mr. Nanavaty then contended that there was no justification for the difference made between private and public companies for both could serve the public purpose equally well, that contention again cannot be sustained because though born are subjected to control under the Companies Act, it is in a public company that the members of the public contribute to the funds and through their several rights as share-holders they can actively participate in the condition of the business, through which the public purpose is to be achieved, apart from the fact that bigger resources and funds would be available to such companies than firms or Individuals. Section 44(b) no doubt makes a distinction between private companies and public companies but that distinction is made for certain reasons, mat section provides that where an acquisition is to be made for a private company, it is to be done only for the purpose mentioned in clause (a) of section 40(1). That purpose is, and has been held to be, a public purpose. But where the acquisition is for the other two purposes, it can only be for public companies which, for reasons already stated, are manifestly better agencies for furthering public purpose than private companies which are, as experience snows, in majority of cases no better than partnerships. It is impossible, therefore, to hold that Were does not exist any nexus between the classifications and the object sought to be achieved by the Act.

24. The last contention that now remains to be death with is the contention of Mr. Nanavaty that as the notification under section 4 of the Act was issued prior to the publication of the rules mane under Section 55, there was non-compliance of those rules and that, therefore, the acquisition proceedings are invalid. As we have already pointed out, the rules being statutory rules, they are binding on the Government as also the officers making acquisitions. In order to appreciate the contention of Mr. Nanavaty, a few dates become necessary. The rules were made and published on the 22nd of June 1963. An acquisition committee was appointed there under on the 2lst of September 1963. The notification under section 4 was issued on the 17th of June 1963 and the declaration under Section 6 was made on the 7th of October 1963. it is clear therefore that before the declaration under Section 6 was made, the rules were already made and published and it is categorically stated in the affidavit in reply that those rules were applied before the declaration was made and that a Committee under the said rules was already by men appointed and had applied its mind to these proceedings, these averments have remained unchallenged as they have not been denied in the affidavit in rejoinder, it is also near from the affidavit in reply that the report made by the Collector under section 5-A of the Act was also submitted to the committee. Since the rules were made after the nomination under - Section 4 had been published, no question of incompliance of these rules can possibly arise, in any event, the issue of such a notification, as held by this court in Patel Gandalal Somnath v. State of Gujarat, (1963) 4 GLR 326: (AIR 1963 Gujarat 50) is explanatory in character and therefore it cannot be said that the acquisition proceedings were commenced at that stage. That decision makes it clear that acquisition proceedings can only be said to have commenced when a declaration is made under Section 6 or the Act. There Is, In our view, therefore no substance in the contention that as the notification under Section 4 was Issued before the rules were framed, there was non-compliance of the rules or that for that reason, the acquisition was bad. Section 55 of the Act is an enabling section, giving power to the Central Government to make rules. The rules, therefore, have to he complied with a they are existent at the time, when the notification under Section 4 Is issued. Therefore, if no rules are made at that stage, there would be no question of non-compliance thereor.

25. In cur view, none of the contentions raised by Mr. Nanavaty before us can be sustained, it is not possible therefore to accede to his contention that the acquisition in this petition is invalid by reason of either Article 81 or Article 19(1) tfl or Article 19(5) or Article 14 or for any alleged non-compliance of the rules.

26. The petition therefore falls and the rule is Discharged. Since the petition has involved elaborate arguments and has taken considerable time, we think that it would be fair and Just to award to the respondents special costs, namely Rs. 1200/-. The petitioners will pay to The respondents Rs. 1200/- as costs of this petition.

27. Certificate under Article 132(1).


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