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Bavabhai Sukhabhai Patel, Sarpanch of Haria Gram Panchayat Vs. State of Gujarat and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtGujarat High Court
Decided On
Judge
Reported in(1986)1GLR377
AppellantBavabhai Sukhabhai Patel, Sarpanch of Haria Gram Panchayat
RespondentState of Gujarat and ors.
Cases ReferredKhambhalia Municipality v. Gujarat State
Excerpt:
.....be said to be illegal or bad on that ground. 3714 of 1981) issued under section 9(2) of the gujarat panchayats act by the development commissioner, state of gujarat, is concerned, it is contended that there was no proper consultation with the petitioner gram-panchayat, taluka-panchayat, valsad, and district-panchayat, valsad, and therefore the notification is bad. we are satisfied that section 9(2) cannot be held unconstitutional on the ground of excessive delegation......no. 1380 of 1978), the state government directed that the land of certain survey numbers of haria gram panchayat the petitioner herein be excluded from the revenue limits of the petitioner panchayat and be included in village atul. this notification contained a condition that on account of this order being passed, whatever the financial loss the haria gram panchayat may suffer, shall be reimbursed by the atul products ltd. respondent no. 1 and that written consent of atul products ltd. (hereinafter referred to as 'the company') in this behalf be obtained. this notification has been passed under the provisions of section 9a of the bombay land revenue code (hereinafter referred to as 'code'). the petitioner-panchayat has challenged the legality and validity of this notification. when this.....
Judgment:

A.P. Ravani, J.

1. By notification dated May 25, 1978 (Annexure 'F' to Special Civil Application No. 1380 of 1978), the State Government directed that the land of certain survey numbers of Haria Gram Panchayat the petitioner herein be excluded from the revenue limits of the petitioner Panchayat and be included in village Atul. This notification contained a condition that on account of this order being passed, whatever the financial loss the Haria Gram Panchayat may suffer, shall be reimbursed by the Atul Products Ltd. respondent No. 1 and that written consent of Atul Products Ltd. (hereinafter referred to as 'the Company') in this behalf be obtained. This notification has been passed under the provisions of Section 9A of the Bombay Land Revenue Code (hereinafter referred to as 'Code'). The petitioner-Panchayat has challenged the legality and validity of this notification. When this petition was pending, the Development Commissioner, State of Gujarat, issued another notification dated July 14, 1981 (Annexure 'E' to Special Civil Application No. 3714 of 1981) under Section 9(2) of the Gujarat Panchayats Act. By this notification the land of survey numbers which were excluded from Haria Gram Panchayat by Notification dated May 25, 1978 issued under Section 7A of the Code were included in the Panchayat limit of Atul Gram Panchayat. In this notification also there is reference to the payment of compensation by the respondent company to the petitioner Haria Gram Panchayat. The petitioner-Panchayat has challenged the legality and validity of this notification dated July 14, 1981 by filing Special Civil Application No. 3714 of 1981.

2. Both these petitions came up for final hearing on August 27, 1984. At that time by order dated August 28,1984, the Government was directed to determine the amount of compensation payable by respondent No. 1 Company to the petitioner-Panchayat. The Government has ultimately determined the amount of compensation to be paid by respondent No. 1 Company to the petitioner-Panchayat. The order passed by the Deputy Secretary (Lands) Revenue Department, Government of Gujarat, dated November 9, 1984 has been placed on record.

3. Both, the petitioner and the respondents, had made their representations before the Government and after hearing all concerned, the State Government has passed the order and has given direction as follows:

Thus, the total amount payable to the petitioner Haria Village Panchayat Comes to:

(1) Rs. 1.50 lakhs amount of compensation in revenue lossRs. 12,675/- capitalised at 12 times.(2) Rs. 0.40 lakhst he amount of interest from 25-5-1978 to 4-7-1981i.e. the date of payment by the respondent AtulCompany.(3) Rs. 1.05 lakhs rise in cost during the period in question i.e. 25-5-1978 till to-date.2.95 lakhs TotalRespondent Atul Company has already credited Rs. 2.50 lakhs in the P.L.A. of the District Development Officer, out of which Rs. 0.50 lakh is towards arrears of tax and Rs. 2.00 lakhs is towards compensation. As narrated above, I have decided Rs. 2.95 lakhs as amount of compensation and hence direct the Respondent Atul Company to credit Rs. 0.95 lakhs in the P.L.A. of the District Development Officer, Valsad, and direct the District Development Officer, Valsad to pay the entire amount to the petitioner Haria Village Panchayat.

4. After the report having been received from the Government, the matter has again been placed for final hearing before me. It may be noted that none of the parties to the petition has raised any contention with regard to the quantum of compensation determined by the Government. It is not the contention of the petitioner-Panchayat that the quantum of compensation determined by the Government is in any way inadequate or improper. The respondent No. 1-Company has also not raised any contention to the effect that the amount of compensation determined by the Government is either excessive or improper. In this view of the matter, I am not going into the details regarding the quantum of compensation determined by the Government.

5. The powers under Section 7A of the Code can be exercised for the convenience of the revenue administration of village or villages concerned. On this point there is no dispute, according to the petitioner, there is nothing to show that the revenue administration of the village would be better served by passing the impugned order and therefore it should be held that the order issued vide Annexure 'F' has been passed for extraneous purpose, that is to say, to suit the needs and convenience of respondent company and, therefore, the impugned order should be, quashed and set aside. It is also contended that a condition for payment of compensation by respondent-company to the petitioner-Panchayat cannot be imposed under Section 7A of the Code. The fact that such a condition has been imposed should be held to be a circumstance leading to the inference that the impugned order has been passed not for the convenience of revenue administration but to suit the needs of respondent Company.

6. In order to appreciate the aforesaid contention the historical background in which the controversy has arisen is required to be looked into. The respondent-Company is a company incorporated on September 5, 1949, under the Companies Act of 1913. Sometime in the year, 1949, the Government of Bombay had acquired certain lands of villages Dived, Haria and Parnera of Surat district for this Company. In the year 1952, out of the land actually occupied by the Company, a separate village named Atul Gram was constituted as far back as June 11, 1952. Sometime in the year 1975, the State Government acquired further land of certain survey numbers within the revenue limits of Haria Gram Panchayat for the purposes of this Company. Since then, the Atul Products Ltd. and its sister concern Atic Industries Ltd. are in possession of this land. The land so acquired and which is in possession of respondent-Company admeasures about 34 acres and 8 gunthas it is also an undisputed position that on this land respondent-company has made certain construction. The petitioner-Panchayat has imposed property tax on the buildings situated within its limits. As and by way of property tax, the Panchayat is entitled to levy about Rs. 12,000/- per annum from the respondent-Company. It appears that respondent Company made certain representations to the appropriate authorities of the Panchayat and that of the State Government. The Company requested that the land on which the Company made construction and of which it was the owner and which was situated within the revenue limits of village Haria may be included in the revenue limits of village Atul. The Atul Gram Panchayat passed Resolution in favour of the proposal. Taluka Panchayat, Valsad initially passed a resolution objecting to the exclusion of the land in question from the revenue limits of Haria Gram Panchayat and inclusion thereof in Atul Gram Panchayat, However, later on, the Taluka Panchayat, Valsad, passed resolution dated June 27, 1977 by which it decided to cancel its earlier resolution and consented to the inclusion of the land in question in Atul Gram Panchayat. The District Panchayat, Valsad, also passed resolution in favour of the proposal. However, the petitioner-Panchayat objected to the said proposal.

7. The petitioners contention that the order under Section 7A of the Code (Annexure 'F') has not been passed for convenience of the revenue administration cannot be accepted for the following reasons:

(1) It is an undisputed position that the land to be excluded from the limits of the petitioner-Panchayat is just adjacent to the land belonging to respondent Company and which is situated within the limits of Atul Gram Panchayat. The major portion of the land occupied by respondent Company is within the limits of Atul Gram Panchayat. While considering the convenience of the revenue administration, the convenience of bureaucracy alone cannot be taken into consideration. The convenience of the subject, i.e. the people who are coming within the revenue limits of a particular unit, has also got to be taken into consideration. Therefore, if the authorities have taken into consideration the convenience of respondent No. 1 Company also, that by itself cannot be said to be an extraneous ground.

(2) While looking at the convenience of respondent Company, the State Government has also taken into consideration the requirements and convenience of Haria Gram Panchayat, i.e. the petitioner herein also. It may be noted that the petitioner was getting Rs. 12,000/- per annum as and by way of property tax from respondent Company. For the loss of this revenue, the Government has directed respondent Company to reimburse the petitioner-Panchayat. When this aspect has been taken into consideration by the Government, it is very clear that the factor of convenience of revenue administration was the uppermost in the mind of the Government. The petitioner-Panchayat is to get about Rs. 2,50,000/- as and by way of compensation and about Rs. 45,000/- towards arrears of tax. In all, the petitioner is to receive Rs. 3,45,000/-. If one calculates the income at the rate of 12% per annum, the interest income alone will be to the extent of little over Rs. 41,000/-. Thus, from the point of view of convenience of the revenue administration, the petitioner-Panchayat has been benefited at least three times, if not more. Moreover, the capital amount of Rs. 3,45,000/- would remain intact. It is true that one may say that the other part of the land which may be vacant at present may be utilised by respondent-Company in future and that part of the land may also be subjected to tax. Therefore, it cannot be said that the petitioner-Panchayat has been put to enormous gain and respondent-Company has been made to suffer substantial loss. However, on consideration of all the relevant facts, it can safely be inferred that the petitioner-Panchayat has been reasonably compensated.

(3) The contention that no condition for compensation can be imposed has also no merit. It is the contention of the petitioner that the Government could pass such order for the purpose of convenience of revenue administration. Now if the convenience of the revenue administration requires that a particular revenue unit (in this case village Haria) compensated on account of the exclusion of the land from its revenue limits, then there is nothing in the provisions of Bombay Land Revenue Code which prohibits the Government from imposing such conditions. No such provision has been pointed out to me by which it can be even by necessary implication, said that the Government has no such power. The only thing required to be seen is as to whether the Government has exercised this power for the purpose of the convenience of revenue administration or not. If yes, then by necessary implication such power is implied in the provisions of Section 7-A of the Code. As stated hereinabove, the convenience of revenue administration of village Haria has been sufficiently taken care of. Therefore, the contention that such a condition cannot be imposed has no merit and has got to be rejected.

(4) Moreover, on this score only the respondent-Company may have some grievance. The petitioner-Panchayat cannot make any grievance on this score since it is to be benefited by the imposition of condition of payment of compensation, much more so when it is not the case of the petitioner-Panchayat that the amount of compensation determined and payable to it is inadequate or insufficient.

8. It is contended that as far as payment of compensation is concerned, respondent-Company cannot have any right to make representation. There is nothing in the impugned order dated May 25, 1978 which requires that before determining the amount of compensation, respondent-Company should have been afforded an opportunity of being heard. On the contrary, the condition is to the effect that written consent of respondent-Company should be obtained to the effect that the respondent-Company shall pay the compensation for the economic loss which may be suffered by the petitioner-Panchayat. However, the respondent-Company has been heard before determining the amount of compensation. Hence it is contended that since the respondent-Company has been granted an opportunity of being heard before determining the amount of compensation payable to the petitioner, the order is bad. The argument cannot be accepted. It may be noted that ultimately it is respondent-Company which has to pay the compensation. If the Government had directed that the Company also should be heard before determining the compensation and if such a condition would have been incorporated in the order, on that ground the order would not have become illegal or void. Even this Court while passing the order dated August 24, 1984, directed the Government to determine the amount of compensation after hearing Haria Gram Panchayat the petitioner herein and respondent-Company. Therefore, even if one reads into the order that the respondent-Company was required to be Beard before determining the amount of compensation, then also the order cannot be said to be illegal or bad on that ground. On the contrary, to save the order from being challenged on the ground of contravention of the principles of natural justice such a condition may be required to be read into it. Therefore, this ground also does not survive.

9. As far as the notification dated July 14, 1981 (Annexure 'E' to Special Civil Application No. 3714 of 1981) issued under Section 9(2) of the Gujarat Panchayats Act by the Development Commissioner, State of Gujarat, is concerned, it is contended that there was no proper consultation with the petitioner Gram-Panchayat, Taluka-Panchayat, Valsad, and District-Panchayat, Valsad, and therefore the notification is bad. Be it noted that either the Taluka Panchayat or District Panchayat, Valsad, had not contended that there was no proper consultation. Both these Panchayats have consented to the exclusion of certain lands from Haria Gram Panchayat and inclusion thereof in Atul Gram Panchayat. It is contended on behalf of the petitioner that consultation should be meaningful and purposive. According to the petitioner, if the consultation is to be meaningful and purposive, then the question should not have been decided by resolution and the question of compensation should not have been deferred but the same should have been determined simultaneously. Any corporate body takes its decision by resolution only. It is not pointed out how in any other manner except by passing resolution the Panchayats concerned could have expressed their decision. Therefore, the contention that the question should not have been decided by passing resolution has no merit and it has got to be rejected.

10. Moreover, since the question of compensation has been deferred and a written consent of the respondent-Company has been obtained for the payment of compensation, it cannot be said that the consultation is neither meaningful nor purposive. Both the panchayats, i.e. taluka Panchayat, Valsad, and district Panchayat, Valsad, had not contended that there was no meaningful and purposive consultation. They have not made any such grievance. On the contrary, they have consented to the proposal. As far as the petitioner-Panchayat is concerned, the petitioner-Panchayat objected to the exclusion of the land not on the ground that compensation that may be paid would be either inadequate or improper, but the petitioner-Panchayat objected to the exclusion of the land on the ground of convenience and on the ground that the action of the State Government was at the behest of respondent-Company. In this view of the matter, whether the compensation is determined in the beginning or later on pales into insignificance. Moreover, now the Government has determined the compensation and it is not even contended by the petitioner-Panchayat that the amount of compensation determined by the Government is in any way inadequate or improper. In the facts and circumstances of the case, it is very clear that before issuing the notification, the Government has consulted all the three Panchayats. Two of the panchayats, i.e. Taluka Panchayat, Valsad, and District Panchayat, Valsad, have even consented to the notification being passed. Only the petitioner-Panchayat did not give consent to the same. In the instant case, it can never be said that there is total absence of consultation. The petitioner-Panchayat had enough opportunity to represent its case before the superior panchayat in this behalf. If the petitioner-Panchayat could not persuade itself to agree to the proposal, it cannot be said that there is no meaningful or purposive consultation. The argument based on absence of proper consultation has got to be rejected.

11. Counsel for the petitioner has submitted that power under Section 9(2) of the Gujarat Panchayat Act can be exercised for the purpose of reorganisation of local area into new units of local self-government and not for the purpose of helping one or another industrial unit. In support of this contention, he has relied upon a decision of the Supreme Court in the case of Khambhalia Municipality v. Gujarat State reported in : [1967]2SCR631 . He has particularly relied upon certain observations made by the Supreme Court in para 12 of the judgment. He has emphasised the following sentences:

Having regard to the policy of the Act, it is plain that the discretionary power under Section 9(2) is vested in the State Government for the purpose of organizing the local areas into new units of Local Self Government.

Be it noted that the aforesaid observations have been made by the Supreme Court in the context of the argument advanced by the counsel that the provisions of Section 9(2) of the Act suffer from the vice of excessive delegation. The Supreme Court negatived the argument and in terms said:

For the purpose of reorganizing the local areas, it may be necessary to include from any nagar or gram any local area or otherwise alter the limits of any nagar or gram or to declare that any local area shall cease to be a nagar or gram and this is provided by Section 9(2) of the Act.

It is further observed by the Supreme Court in this very paragraph:

For such purposes, it may be necessary to establish new panchayats, reconstitute old panchayats, amalgamate or divide existing grams and pending such reorganization it may sometimes be even necessary that an area should cease to be a gram or nagar. It is impossible to visualise all the contingencies when action under Section 9(2) should be taken and the necessary discretion was properly left to the State Government. We are satisfied that Section 9(2) cannot be held unconstitutional on the ground of excessive delegation.

12. Therefore, if one reads the decision of the Supreme Court in proper context, - it is very clear that the Supreme Court has not laid down any principle that it is only for the purpose of constitution of new local area that this power is to be exercised. The Supreme Court has in terms stated that all the contingencies cannot be visualised when this power has to be exercised. Therefore, in the instant case, when the Government has exercised its discretion, the only question which is required to be seen is whether the Government has exercised its discretion legally and for the purpose/s connected with the Panchayats Act.

13. It is contended that the Government has exercised the power Sunder this section at the instance of respondent-Company, and not for any purpose connected with the Act. This argument cannot be accepted for the simple reason that respondent-Company is directed to pay the compensation for the loss of revenue to the petitioner-Panchayat. Be it noted that there is nothing on record to show that the respondent Company will be absolved from its liability to pay property tax that may be imposed by Atul Gram Panchayat. No such assurance has been given by the Government that the Company will not be liable to pay the taxes that may be imposed by the Atul Gram Panchayat. In fact, no such assurance can be given either by the Government or by any superior panchayat or even by Atul Gram Panchayat itself. Therefore, it is very clear that the respondent-Company has, on the one hand, been made to pay for the loss of revenue to the petitioner-Panchayat and on the other hand, its liability to pay tax or taxes that may be imposed by Atul Gram Panchayat continues. In this view of the matter, it can never be said that it is for the convenience of respondent Company alone that the notification in question has been issued. As stated hereinabove, while considering the legality and validity of the notification issued under Section 7A of the Code, this notification can also said to have been issued for the purposes of the petitioner-Panchayat. The revenue of the petitioner-Panchayat has been properly safeguarded. The general administration of the petitioner-Panchayat and incidentally the convenience of respondent-company have also been taken into consideration. In this view of the matter, it cannot be said that the Government has exercised its discretion illegally or for the purposes not connected with the Act.

No other contention is raised.

In the result, the petitions are rejected. Rule discharged with no order as to costs.


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