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Dr. Biharilal Kanaiyalal Vs. State of Gujarat and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtGujarat High Court
Decided On
Judge
Reported in(1969)10GLR635
AppellantDr. Biharilal Kanaiyalal
RespondentState of Gujarat and ors.
Cases Referred(Ashokkumar v. State) and It
Excerpt:
.....which can be effectively given against it. i he petitioner in fact wanted to take delivery of the survey numbers agreed to be purchased by him but for some reason or the other not attributable to any default on his part, the sale could not be effectuated the petitioner has therefore clearly a charge on the said survey numbers for the respective amounts of the purchase price paid by him and since the effect of the acquisition would be to extinguish his charge, he is a person affected by the impugned notifications and as such entitled to maintain the petition challenging their validity. 4. even apart from the existence of the charge which gives the petitioner title to maintain the petition, we are satisfied that on broad principle too, the petitioner is entitled to maintain the petition...........an agreement to purchase dated 1st october 1960, the third respondent agreed to purchase the said survey numbers from respondents no. 4 to 6. though the agreement of purchase was entered into in the name of third respondent, the petitioner was beneficially entitled to the same and he was the party who was going to purchase the said survey numbers under the agreement of purchase. the petitioner paid rs. 8000/- as earnest money on the execution of the agreement of purchase and subsequently, on 9th may 1964, he paid a further sum of rs. 4000/- in advance towards part payment of the purchase price in anticipation of the delivery of the said survey numbers. the time for completion of the sale as originally stipulated in the agreement of purchase was extended from time to time upto 31st.....
Judgment:

P.N. Bhagwati, C.J.

1. This petition is directed against a notification dated 10th August 1964 issued under Section 4 and a corresponding notification dated 14th October 1965 issued under Section 6 of the Land Acquisition Act, 1894. The facts giving rise to this petition are a little material and we will, therefore, have to state them in some fullness. This petition concerns five pieces of land, namely, survey Nos. 933, 934, 935, 942 and 944 situate in village Vatva, Taluka Deskroi, District Ahmedabad. Survey Nos. 933 and 944 belonged to respondents Nos. 4 to 6 and by an agreement to purchase dated 1st October 1960, the third respondent agreed to purchase the said survey numbers from respondents No. 4 to 6. Though the agreement of purchase was entered into in the name of third respondent, the petitioner was beneficially entitled to the same and he was the party who was going to purchase the said survey numbers under the agreement of purchase. The petitioner paid Rs. 8000/- as earnest money on the execution of the agreement of purchase and subsequently, on 9th May 1964, he paid a further sum of Rs. 4000/- in advance towards part payment of the purchase price in anticipation of the delivery of the said survey numbers. The time for completion of the sale as originally stipulated in the agreement of purchase was extended from time to time upto 31st December 1964 but the sale could not be completed owing to litigation amongst respondents Nos. 4 to 6 and an interim stay order granted by the Court in that litigation. The petitioner also entered into an agreement of purchase dated 24th May 1961 for purchase of survey Nos. 935 and 942 from respondent No. 7. He paid a sum of Rs. 6501/- on the execution of the agreement of purchase and subsequently paid a further sum of Rs. 13, 500/- towards part payment of the purchase price in anticipation of the delivery of the said survey numbers. The time for completion of the sale under this agreement of purchase was also extended from time to time but the sale could not be completed because the City Deputy Collector by an order dated 28th October 1964 refused permission for sale on the ground that according to the detailed development plan prepared by the Gujarat Industrial Development Corporation (hereinafter referred to as the Corporation), large part of the land comprised in the said survey numbers was reserved for railway siding. So far as survey No. 944 is concerned, it belonged to respondent No. 8 and the third respondent by an agreement made with respondent No. 8 agreed to take the said survey number on lease for a term of ninetynine years. This agreement of lease was also, like the first agreement of purchase, entered into by the third respondent for the benefit of the petitioner and the petitioner was beneficially entitled to the same. A sum of Rs. 2161/- was paid by the petitioner to respondent No. 8 under the agreement of lease but respondent No. 8 did not execute a deed of lease in favour of the petitioner as provided by the agreement and proceedings had therefore to be adopted by the petitioner for enforcing specific performance of the agreement against respondent No. 8. These proceedings were pending in the District Court at the date when the petition came to be filed.

2. The genesis of the filing of the petition was the issue of a notification dated 10th August 1964 under Section 4 of the Act. By this notification, the State Government notified that various pieces of land including survey numbers 933, 934, 935, 942 and 944 were likely to be needed for a public purpose, namely, establishment of industrial town for heavy and medium industries. It appears that these survey numbers were sought to be acquired by the State Government at the instance of the Corporation with a view to placing them at the disposal of the Corporation under Section 32 of the Gujarat Industrial Development Corporation Act, 1962 (hereinafter referred to as the Corporations Act) and the petitioner therefore carried on correspondence with the Corporation in an attempt to persuade the Corporation not to press for acquisition of these survey numbers in which the petitioner was interested. The correspondence, according to the petitioner, resulted in an agreement between the petitioner and the Corporation whereby on certain terms and conditions which were recorded in the correspondence, the Corporation agreed that the said survey numbers may be purchased by the petitioner and they may not be acquired by the State Government. But despite this agreement between the petitioner and the Corporation, the State Government issued a notification dated 14th October 1965 under Section 6 of the Act declaring that several pieces of land including the said survey numbers were needed for the public purpose specified in column 4 of the Schedule, namely, establishing industrial town for large and medium industries. The petitioner thereupon filed the present petition challenging the validity of both Sections 4 and 6 notifications.

3. At the commencement of the hearing before us the learned Advocate General appearing on behalf of respondents Nos. 1 and 2 raised a preliminary objection against the maintainability of the petition and his argument was that the petitioner had no title to maintain the petition. He urged that the petitioner merely held an agreement of purchase in respect of Survey Nos. 933, 934, 935 and 942 which did not give the petitioner any legal interest in the said survey numbers and so far as survey No. 944 was concerned, the petitioner held only an agreement of lease and was not even put in possession of the said survey number and the petitioner had therefore no locus to challenge the acquisition of these survey numbers. This preliminary objection is in our opinion not well-founded and there are at least two answers which can be effectively given against it. In the first place, so far at least as survey Nos. 933, 934, 935 and 942 are concerned, the petitioner has a statutory charge on the said survey number for the amounts of purchase money paid by him to the respective sellers in anticipation of the delivery of the said survey numbers. This statutory charge is created by Section 55(6)(b) of the Transfer of Property Act which provides:

55. In the absence of a contract to the contrary....

(6) The buyer is entitled--

(b) Unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, to the extent of the seller's interest in the property for the amount of any purchase money properly paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission:

On a true construction of this section the charge arises immediately the purchase price is paid by the buyer to the seller. As observed by the Bombay High Court in Balavant Appaji v. Bira 23 Bombay 56: 'From the moment part of the purchase-money is paid, the purchaser has a lien upon the property to that extent, which lien can only be lost to him by reason of his failing to carry out his part of the contract.' The section in terms creates a charge as soon as part of the purchase money is paid in anticipation of the delivery of the property and the question can only be whether the buyer has forfeited this charge by improperly declining to accept delivery of the property. If he improperly declined to accept delivery, he loses the charge for the amount of the purchase money paid by him. But so long as he does not improperly decline to accept delivery, the charge remains whatever be the cause for which the sale is not completed whether owing to intransigence of the seller or his inability to complete the sale by reason of circumstances beyond his control. Here it is not the case of respondents Nos. 1 and 2 that the petitioner at any time improperly declined to accept delivery. I he petitioner in fact wanted to take delivery of the survey numbers agreed to be purchased by him but for some reason or the other not attributable to any default on his part, the sale could not be effectuated The petitioner has therefore clearly a charge on the said survey numbers for the respective amounts of the purchase price paid by him and since the effect of the acquisition would be to extinguish his charge, he is a person affected by the impugned notifications and as such entitled to maintain the petition challenging their validity. He is also a person interested within the meaning of the Land Acquisition Act since he would be entitled to claim apportionment of (he compensation with the sellers for extinguishment of his charge as also on the principle of substituted security embodied in Section 73(2) read with Section 100 of the Transfer of Property Act It must, therefore, be held that the petitioner is entitled to maintain the petition and his locus to do so cannot be successfully challenged.

4. Even apart from the existence of the charge which gives the petitioner title to maintain the petition, we are satisfied that on broad principle too, the petitioner is entitled to maintain the petition. Article 226 confers jurisdiction on the High Court to issue writs, directions and orders not only for enforcement of any of the rights conferred by Part III but also 'for any other purpose. 'The words 'for any other purpose' show that the High Court has power in exercise of its jurisdiction under Article 226 to issue a writ not only where a fundamental right is infringed but also where there is a legal right and it is infringed. The existence of a right is the foundation of the exercise of the jurisdiction under Article 226. If, therefore, a petitioner establishes that his right and right would include liberty is infringed or jeopardised by an invalid law or order, there is no reason why he should not be allowed to challenge its validity. If there is any invalid law or order which impedes the exercise of bis right or causes or threatens injury to him in the exercise of his liberty, he can maintain a petition challenging the validity of such invalid law or order. Here the impugned notifications if valid would stand in the way of the petitioner exercising his right to obtain sale of the survey numbers agreed to be purchased by him or lease of the survey number agreed to be taken on lease by him and they would effectively prevent him from getting those survey numbers. The impugned notifications clearly affect the petitioner and cause injury to him in that so long as the impugned notifications stand, he cannot obtain sale or lease of the survey numbers in question. The petitioner is, therefore, interested in removing the impugned notifications from his way and he must accordingly be held to have sufficient interest to maintain the petition challenging the validity of the impugned notifications.

5. The petitioner also contended that in any event a person who holds an agreement of purchase from the owner, even if he has no charge on the properly under Section 55(6)(b), would be a person interested within the meaning of the Land Acquisition Act and the petitioner, therefore, as a person interested was entitled to maintain the petition. Several decisions were cited before us in support of this contention amongst them being Chhuttan Lal v. Mul Chand (1917) 37 Indian Cases 822; J.C. Gulstann v. Secretary of State for India in Council 10 Cal. Weekly Notes 195; Pratapa Bhattadu v. A.E.L. Mission 49 Madras 38 and Dossibai v. P.M. Bharucha 60 B.L.R. 1208, But it is not necessary to decide this contention since we are of the view that on the other two contentions, the petitioner must be held entitled to maintain the petition.

6. That takes us to the merits of the petition. Now so far as the merits are concerned, only one contention was urged on behalf of the petitioner and that contention was that though the acquisition under the impugned notifications was an acquisition for a public purpose, the compensation was not to be paid wholly or partly out of public revenues and there was therefore non-compliance with the proviso to Section 6 Sub-section (1). Five documents, two being letters dated 19th February 1964 and 6th May 1964 addressed by the Chief Executive Officer of the Corporation to the State Government and the other three being resolutions of the State Government dated 30th June 1964, 19th August 1964 and 13th March 1968, were relied upon by the petitioner and it was urged on the basis of these documents that there was a scheme or arrangement between the State Government and the Corporation under which the State Government was to acquire lands at the instance of the Corporation and place them at the disposal of the Corporation under Section 32 of the Corporation Act on condition that the entire cost of the acquisition when paid by the State Government would be treated as a loan to the Corporation repayable within fifteen years by half yearly installments with interest at six per cent per annum. The net result or effect of this scheme or arrangement was that though apparently the amount of compensation was to be paid out of public revenues, in reality and substance the payment was to come out of the funds of the Corporation, the amount paid being treated as a loan augmenting the funds of the Corporation. The amount of compensation was, therefore, argued the petitioner, really to come out of the funds of the Corporation and not out of public revenues and there was accordingly non-compliance with the proviso to Section 6 Sub-section (1). This very contention was advanced on behalf of the petitioner in Special Civil Application No. 903 of 1964 and other allied petitions (Ashokkumar v. State) and It has been upheld by us in a judgment delivered on 31st July 1968, disposing of those petitions. The reasons for upholding this contention are discussed in detail in that judgment and it is therefore not necessary for us to repeat or rehearse them over again in this judgment. Suffice it to state that for the self same reasons, we hold in the present case too that on a true analysis of the scheme or arrangement for acquisition evidenced by the documents relied upon on behalf of the petitioner the compensation to be paid for the acquisition of the survey numbers in question was to come wholly out of the funds of the Corporation and no part of it was to come out of public revenues and the proviso to Section 6 Sub-section (1) was not complied with.

7. We, therefore, allow the petition and make the rule absolute by issuing a writ of mandamus quashing and setting aside the notification dated 14th October 1965 under Section 6 in so far as it concerns survey Nos. 932, 933, 934, 935, 942 and 944, Respondents Nos. 1 and 2 will pay the costs of the petition to the petitioner. Mr. J. R. Nanavaty on behalf of respondents Nos. 1 and 2 applies for leave to appeal to the Supreme Court under Article 133(1) Clauses (b) and (c) of the Constitution.

8. Leave as applied for is granted.


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