1. This is an application to consider all the contentions raised in W. P. No. 1032 of 1964 and review my judgment dated 9-1-1967. That writ petition was filed for the issue of a writ of certiorari to quash the proceedings of the second respondent (State of Madras represented by the Secretary to the Government, Industries, Labour and Co-operation Department) and the declaration under Section 6(1) of the Land Acquisition Act on various grounds viz., that the purpose for which the lands were acquired was not a public purpose, that the declaration was invalid and illegal inasmuch as the lands were already purchased by the petitioner for an industry, that the compulsory requisition of the lands belonging to the petitioner for the purpose of converting the same into an industrial estate was not a public purpose within Article 31(2) of the Constitution of India and Section 6(1) of the Land Acquisition Act, that the reasons given by the second respondent that the extent of lands owned by the petitioner was far in excess of the requirements of the petitioner-company constituted an arbitrary deprivation of the petitioner's property and violative of Article 31(1) and that there was violation of Article 14 and Article 19 of the Constitution.
2. When that writ petition came for final hearing, judgment had been rendered by their Lordships of the Supreme Court in State of M. P. v. Vishnu Prasad, : 3SCR557 that there was nothing in Sections 4, 5-A and 6 to suggest that Section 4(1) was a kind of reservoir from which the Government might from time to time draw out land and make declaration with respect to it successively. In the instant case, Section 4(1) notification was on 29-8-1962 and declaration under Section 6 was made from time to time from 16-2-1963 to 24-7-1963. The petitioner also contended that piecemeal declarations under Section 6 of the Act from time to time were invalid. In view of the decision of the Supreme Court, there was no necessity then to consider the other contentions raised in the writ petition and the writ petition was allowed. While allowing the writ petition, I had observed that, in case Government started fresh proceedings for the acquisition of these properties, the petitioner would be entitled to urge all the other contentions which had not been considered in the writ petition.
As I said, the judgment in the writ petition was delivered on 9-1-1967. On 20-1-1967, the Land Acquisition (Amendment and Validation) Ordinance, 1967, was promulgated by the President of India. Under Section 5(1)(a)(iii) of the Ordinance, notwithstanding any judgment, decree, or order of any Court to the contrary, no acquisition of land made or purporting to have been made under the principal Act before the commencement of the Ordinance and no action taken or thing done (including any order made, agreement entered into or notification published) in connection with such acquisition shall be deemed to be invalid or ever to have become invalid merely on the ground that one or more declarations have been made under Section 6 of the principal Act in respect of different parcels of the land covered by the same notification under Sub-section (1) of Section 4 of the principal Act in pursuance of one or more reports under Section 5-A thereof. The effect of the Ordinance was to nullify the judgment rendered in the writ petition. It is under these circumstances, the petitioner-company has filed the present application praying that the Court may be pleased to consider the other contentions raised in the Writ petition, I have, therefore to consider the other legal contentions raised by the petitioner in the above writ petition.
3. It is necessary for me to reiterate the main facts leading to the filing of the writ petition, in order to have a cogent reading of the present order. The petitioner-company has been carrying on a manufacturing occupation, trade or business under the name and style of M/S. Godrej and Boyce Manufacturing Company Private Limited. They are the largest manufacturers of steel furniture and fittings in the East. The company is manufacturing several kinds of steel products like Office Equipment, Hospital Equipment, Security articles, Refrigerators, Typewriters and several other products. The Company had its factory and housing colony at Vikroli on nearly 3,600 acres of land. The company has its works at Lalbaugh, Parel, Bombay, on eight acres of land.
Due to expanding business and increasing demand from the South, the Company was on the look-out for some land in Madras and after nearly two years of effort was able to secure about 22 acres of land from various sellers in Ambattur near the Railway line to equip itself with a siding as and when the Warehouses, Commercial Offices and assembly Shop and Factory are built. Learned Counsel for the petitioner represented to me that even before purchasing the lands, the petitioner-company made not only local enquiries but also enquiries at the Governmental level, whether these lands were likely to be acquired by the State.
4. During this period, the Madras State Government, in respect of their industrial policy, made a landmark by developing an industrial Estate at Ambattur. This Estate is located in one of the most important industrial belts in the City, a fast growing complex of small, medium and large industries. It is also very near to the city of Madras. Under the scheme conceived in 1961, the Madras State acquired large tracts of land, developed them and plotted them into developed sites and also constructed factory-sheds and allotted them to various applicants who wanted to start industries. The fully developed sites are provided with all the facilities required for starting an industry, viz. water supply, power supply, drainage, sewage, roads etc. Credit must be given to the State of Madras for developing this industrial estate in Ambattur for the manufacture of ancillary parts, for major industries and the manufacture of consumer goods.
The policy of the Government was to industrialise the whole State and the wisdom of the Government is to invite, encourage and stimulate the industrialists to venture starting of manufacture of ancillary parts to major industries and also manufacture of consumer goods. The whole atmosphere was thus surcharged with the emotion to industrialise the State and thus change the face of industrial economy in the State. It was at that stage, the petitioner-company, which is a reputed firm in the manufacture of steel parts and articles and which has a factory in Bombay on about 3,600 acres of land, wanted to expand their business activities in the South and therefore obtained 22 acres of land for that purpose. The lands purchased by the petitioner-Company are situate in the northern corner of the Industrial Estate, which is yet to be developed in the second phase of the Government's plans. In the first phase of the plan, lands in the southern part of the Estate have been developed, plotted and allotted to various businessmen to start their industries, Factory-space has been allotted to various industrialists. This ranges from 20 acres to one acre. Government have acquired about 300 acres of land on the northern side, and the petitioner's land, is in the extreme corner. It was only after collecting information locally and after making discreet enquiries at the Governmental level, the petitioner-company purchased the lands, on the assumption that the Government would not acquire those lands.
But unfortunately after the lands were purchased by the petitioner, Government seem to have changed their mind and wanted to develop the industrial estate on the northern side also. It was how they came upon the petitioner's lands also so as to have territorial contiguity for their Estate. When the petitioner came to know that the State Government were taking steps to acquire the lands it has purchased, the petitioner approached the Government to exempt the lands which it has purchased from being acquired. In fact, in one of their letters which is dated 18-6-1962, the company was even prepared to give the Government reasonable amount of land that it had purchased so as to make a straight line boundary between the company's lands and the land proposed to be acquired by the Government for the industrial estate, on condition that an equivalent amount of land would be given to the petitioner from other places adjoining the lands it bad purchased.
The Secretary to the Government by his letter dated 7th July 1962, stated that it was proposed to exclude about acres of petitioner's lands from the proposed acquisition of lands for the expansion of the Industrial Estate. When the petitioner wanted to know where exactly the 14 acres of lands would be given by Government in lieu of their taking away of the petitioner's 14 acres of lands, the Government finally stated that the extent of lands owned by the petitioner and exempted from the proposed acquisition for the Industrial estate was itself far in excess of the requirements of the Company, and that therefore the request for allotment of an alternative site in lieu of the extent proposed to be acquired for the Industrial Estate could not be complied with.
In spite of the fact that the petitioner represented to the Government that they are the largest manufacturers of steel furniture and that they wanted to expand their business activities in the South, the Government proceeded with the land acquisition proceedings and issued the notification under Section 4(1) which was subsequently followed by Section 6 declaration. It was at that stage the petitioner-company rushed to this Court and filed the writ petition on the grounds already mentioned by me in the earlier part of this judgment.
5. I consider that the most important point for consideration is whether there has been discrimination or violation of Article 14 and Article 19 of the Constitution in this case.
6. The policy of the Government is to develop the industries and thus industrialise the State. For this purpose, Government started the Amhattur Industrial Estate. Government acquired large tracts of lands, developed them, constructed factory-sheds and allotted such factory-sheds and developed sites to various applicants who intended starting industries, small, medium or large. This is no doubt acquisition for a public purpose. But the acquisition of the petitioners' lands for the purpose of allotting them to various applicants to start industries, when the petitioner company itself has purchased the lands for developing or expanding their business activities in the South, cannot be called acquisition of lands for a public purpose. Further, the State Govfernment have allotted plots to various industrialists, after acquisition, as developed sites, ranging from 20 acres to one acre. The petitioner-company has purchased about 22 acres for its own use for its proposed project to be carried out in stages, like building warehouses, assembly-shop, commercial house etc.
This was in pursuance of the plan of the Company to expand its business activities in the South. In doing so, the Company has come forward to supplement the policy of industrial expansion by the State in the State. Under such circumstances, the reasoning given by the Secretary to the Government of Madras that the lands owned by the petitioner are far in excess of its requirements is beyond one's comprehension. Government can no doubt use its discretion. But discretion means sound discretion guided by law. It must be governed by rule and not by humour. It should not be arbitrary, vague or fanciful. In the reasoning of the Government, I see no rhyme or reason or logic. There is absolutely no material on the record for the Government to come to the conclusion that out of the 22 acres of land purchased by the petitioner, 7 acres would be sufficient for the petitioner's use and business activities and that the other remaining 14 acres are far in excess of the requirements of the company.
As I already said, the Government themselves have allotted developed sites of more than 20 acres to some of the applicants to start their industries. Curiously enough, when the petitioner-company requested the Government for exemption of all the lands owned by the company from the proposed acquisition, the Government, while expressing their inability to do so, have added that in case the petitioner submitted an application for a developed plot in the area, it would be considered by the Government on merits. The petitioner-company has purchased plots at Rs. 11,000 per acre. According to the offer of the Government, they would sell the same plot as developed site at Rs. 16,000 per acre.
This appears rather unreasonable. The statement by the Government that the lands in the possession of the petitioner are far in excess of its requirements and the further or subsequent statement that the Government would consider any application of the petitioner for a developed site on merits would appear to be self-contradictory. While the policy of the Government would appear to encourage industrialists to start industries in this part of the country, there is no reason why the very same Government should thwart the ambitious plans of a reputed manufacturer to start and thus expand its business activities in South India. This to my mind is clear case of discrimination violative of Articles 14 and 19 of the Constitution. The purpose of the present acquisition is to wrench the lands belonging to the petitioner and allot them as factory space or developed sites to applicants of their choice; The policy of the Government in securing the petitioner's lands appears to be not only whimsical but also arbitrary.
7. Learned counsel for the State cited the decision of the Supreme Court in Somawanti v. State of Punjab, AIR 1983 SC 151. In that case, the petitioners purchased six acres of land for Rupees 4,50,000 for the purpose of establishing a paper-mill. Air conditioning Corporation, respondent-6 in the petition, held a licence from the Government of India for starting a factory for the manufacture of various ranges of refrigeration compressors and ancillary equipment. This respondent requested the State of Punjab for the allotment of an appropriate site for the location of the factory. The petitioners requested the Government not to acquire their lands. Though assurances were given by the Deputy Commissioner of the District, the Governor of Punjab issued a notification under Section 4(1) of the Land Acquisition Act declaring that the lands of the petitioners were likely to be needed by Government at public expense for a public purpose, namely, for setting up a factory for manufacturing various ranges of refrigeration compressors and ancillary equipment.
The petitioners contended that they had purchased the land bona fide for industrial purposes. Their Lordships of the Supreme Court observed as follows at page 170:
'Apart from that it is always open to the State to fix priorities amongst public utilities of different kinds, bearing in mind the needs of the State, the existing facilities and other relevant factors. In the State like the Punjab where there is a large surplus of fruits and dairy products there is need for preserving it. There are already in existence a number of cold storages in the State. The Government would, therefore, be acting reasonably in giving priority to a factory for manufacturing refrigeration equipment which would be available for replacement in these storages and which would also be available for equipping new cold storages.'
Accordingly, the Supreme Court upheld the acquisition proceedings in that case. But in the instant case, there is no such priority, and the policy of the Government is only to acquire lands, develop them and allot them to various applicants in the Industrial Estate.
In the absence of any priority or principle in the matter of allotment of factory space or developed sites, it appears to be a case of discrimination, if the petitioner's lands are taken away for the purpose of developing them and allotting them to other applicants similarly placed as the petitioner. There is also no differentiation between the petitioner's industry and other industries which are sought to be preferred. The Government cannot treat such applicants as a class and discriminate the petitioner who is also an individual industrialist who has already purchased lands with a view to expand his industry in the South. There is nothing in the record nor is there any surrounding circumstance to note that there is any reasonable classification in the matter of such allotment by the Government of factory space or developed sites. It is worthwhile to remember the words of the Supreme Court in Ram Krishna Dalmia v. Justice Tendolkar, : 1SCR279 :
'. . . . .the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation.'
8. Learned Counsel for the State next contended that it is within the power of the State to acquire property from A and give it to B on the ground of public purpose and that the public purpose vanes with the time and prevailing conditions in localities especially when it involves the welfare of the public in general, as opposed to particular interest of individuals, and he cited the decision of the Supreme Court in Arnold Rodricks v. State of Maharashtra : 3SCR885 . But in that case, their Lordships of the Supreme Court had no occasion to discuss Art, 14 of the Constitution. Learned Counsel for the State further contended that once there is the Government declaration under Section 6 that a particular land is needed for a public purpose, the conclusiveness of it is necessarily attached not merely to the land but also to the question whether the purpose is a public purpose.
It is very much in doubt to say that the petitioner's lands are acquired for a public purpose. The land acquisition proceedings are sought to be quashed by the petitioner on constitutional grounds such as violation of Articles 14 and 19, Of course, learned Counsel for the petitioner has also attributed mala fides to Governmental authorities. In this connection, it is useful to refer to the following passage from Maxwell on Interpretation of Statutes (10th Edn.), page 122:
'Enactments which confer powers are so construed as to meet all attempts to abuse them either by exercising them in cases not intended by the statute, or by refusing to exercise them when the occasion for their exercise has arisen. Though the act done was ostensibly in execution of the statutory power and within its letter, it would nevertheless be held not to come within the power if done otherwise than honestly and in the spirit of the enactment.'
In Smith v. East Elloe R. D. C. 1956 1 All E. Rule 855 the owner of the land and dwelling-house filed an action for declaration that the compulsory purchase order was made in bad faith. Lord Reid, though dissented from the majority judgment, has made some observations which are relevant for our purpose:
'It seems to me that there were four grounds on which the courts could give relief. First, informality of procedure; where, for example, some essential step in procedure had been omitted. Secondly, ultra vires in the sense that what was authorised by the order went beyond what was authorised by the Act under which it was made. Thirdly, misuse of power in bona fide. And, fourthly, misuse of power in mala fide.'
While dealing with misuse of power, Lord Reid quoted the following passage of Lord Green in Associated Provincial Picture Houses Ltd. v. Wednensbury Corporation (1947) 2 All E. R. 680 :
'The exercise of such a discretion must be a real exercise of the discretion. He must exclude from his consideration matters which are irrelevant to the matter that he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. . . .Theoretically it is true to say..... that, if a decision on competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere . . . .the court is entitled to investigate the action of the local authority with a view to seeing whether it has taken into account matters which it ought not to take into account, or conversely, has refused to take into account or neglected to take into account matters which it ought to take into account.
'Once that question is answered in favour of the local authority, it may still be possible to say that the local authority, nevertheless, have come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the court can interfere. The power of the Court to interfere in each case is not that of an appellate authority to override a decision of the local authority, but is that of a judicial authority which is concerned and concerned only, to see whether the local authority have contravened the law by acting in excess of the powers which Parliament has confided in it.'
9. Bearing the above principles in mind, if I examine the impugned orders in this case, I find that though what has been done by the Government is in good faith, still it is a bona fide misuse of power, and the decision of the authorities, that the lands now in the possession of the petitioner, which are sought to be acquired by Government, are far in excess of the petitioner's requirements, appears to be so unreasonable in the context of the petitioner's proposed magnitude of business activities in the South that no reasonable authority could have ever come to it.
10. For the foregoing reasons, the Civil Miscellaneous Petition is allowed. Consequently, the Writ Petition also will stand allowed. There will be no order as to costs.