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Rajasthan Industrial Development & Investment Corporation Limited v/s Rajasthan Fasterners Private Limited

    Special Appeal Writ Nos. 700, 633, 634, 698 of 2006 & 417, 500 of 2010

    Decided On, 23 July 2019

    At, High Court of Rajasthan Jaipur Bench


    For the Appearing Parties: Mahendra Singh, Akash Shrivastava, Manish Priyadarshi, Raunak Bapna, Anand Sharma, Anoop Dhand, Advocates.

Judgment Text

S. Ravindra Bhat, C.J.

1. These appeals are directed against a common judgment and order of the learned Single Judge dated 01.05.2006. That judgment disposed of five writ petitions which had challenged the acquisition of land at the behest of Rajasthan Industrial Development and Investment Corporation Limited (for short 'RIICO'). RIICO and the State are in appeals, aggrieved by the common judgment of the Single Judge, inasmuch as it held that invocation of urgency clause under Section 17(4) (old) of the Land Acquisition Act, 1894 (hereafter referred to as 'the Act'), was unjustified. Appeals have also been preferred by some of the original writ-petitioners, who are aggrieved to the extent the judgment upheld the underlying public purpose, which was the reason for the issuance of the acquisition notification.

2. Brief facts of the case are that a notification was issued under Section 4 of the Act on 01.07.2005, proposing to acquire 101.30 hectares of agricultural land at Kukas. This land, according to the revenue records were owned by 198 khatedars. The State also invoked the urgency clause and sought to dispense with the requirement of hearing under Section 5A, by under Section 17(4) of the Act. The notification was challenged- as was the invocation of the urgency clause, by the writ-petitioners who contended that acquisition was not motivated by public purpose, and in no circumstance could the urgency clause be invoked. The learned Single Judge, by judgment and order dated 01.05.2006 upheld the notification under Section 4, so far as it proposed acquisition of the entire tract of 101.30 hectares of land. The learned Single Judge however was of the opinion- (having regard to the state of the record), that no objective material could justify exclusion of hearing under Section 5A. The impugned judgment to a large extent has analysed factually that repeated requests for acquisition were made previously and no sense of urgency was felt and that the invocation of the urgency clause, in these circumstances, (when the normal recourse to acquisition could have been resorted to by granting hearing to the persons interested who were likely to be affected), was unjustified. The record would show that several appeals were preferred- some at the behest of RIICO and the State and others at the behest of the persons interested i.e. those likely to be affected, which included the khatedars. Apparently of the 198 khatedars who were affected by the acquisition, only six approached the Court, which led to the impugned judgment. Others had accepted the acquisition and also the compensation offered.

3. The Single Judge during the interregnum- before the judgment had apparently dismissed a writ petition of one of the six Khatedars; that order became final. It is also a matter of record that of the five khatedars before the Court, either as respondents or as appellants, three accepted compensation and withdrew their challenge as well as the appeals. Thus, now only two parties (who contend that they are persons interested and likely to be affected), are before the Court [M/s Raj. Fasteners Pvt. Ltd and Shri Ghisya (since deceased)].

4. Learned counsel for the appellants argued that the Single Judge committed an error in holding that the provisions of Section 17(4) could not have been invoked, in the circumstances of the case. It is highlighted that for over six months, the issue was discussed and processed at various levels of the Government, which applied its mind. It is particularly urged that in order to give impetus to investments in the State of Rajasthan, it was absolutely necessary to develop the infrastructure and for that purpose, land was needed urgently. Counsel also submitted that in terms of Section 17(3A), the estimated compensation to the extent of 80% determined was at Rs. 31.25 crores which had been deposited in the Civil Court. Later, even final award was passed, after which further amount of Rs. 6.15 crores was distributed to the concerned khatedars, who accepted it. Thus, the acquisition in fact stood completed as regards 99.80 hectares of land was concerned. In these circumstances, the Counsel submitted that quashing of the notification dated 15.09.2005 was not justified.

5. It was submitted further that Kukas industrial area had to be developed not only in the larger public interest but also for economic growth and to ensure employment avenues in the State. Notice of the Court was drawn to the fact that large investors, such as Hero Honda etc. had approached for allotment of land which was badly needed for the purpose of such development.

6. Counsel for the private appellants who were affected by the impugned judgment to the extent it upheld the acquisition and publication of notification under Section 17(1) read with Section 4, urged that the proposed acquisition could not be conceived in public interest, which was rather for development and sale of land. Counsel also submitted that the important circumstance that no report had been received by the Land Acquisition Officer, not only vitiated the invocation of urgency clause under Section 17(4), but the acquisition itself.

7. It was argued further that village Kukas falls within the jurisdiction of Jaipur Development Authority (hereafter referred to as 'the JDA') and consequently, RIICO had to obtain the land from it. Therefore, the JDA had to acquire the land and if it deemed fit and in accordance with the Master Plan, allot it to RIICO. Counsel further submitted that in the Master Plan, 2011, Kukas village was reserved for ecological purposes and shown as rural belt i.e. green belt, which could not have been obliterated through impugned acquisition.

8. It was lastly argued by the Counsel that land in question is adjacent to National Highway No.8 and for any construction over it, due permission of National Highway Authority was required, which had not been obtained.

9. The learned Single Judge, we notice, after discussing the prevailing jurisprudence on the question of arbitrariness or otherwise of the invocation of the urgency clause under Section 17, also considered the files that contained the State Government's notings and rationale for dispensing with the mandatory hearing under Section 5A, held as follows:-

"16. Before dealing with the case law on the point it will be necessary to proceed quickly to glance factual backdrop leading to the present proceedings. As earlier noticed that Notification dated July 1, 2005 under section 4 of the Acquisition Act was issued by the State of Rajasthan acquiring the land of the Khatedars in village Kukas for the purposes of RIICO. After the petitioners filed objections, the LAO proceeded with the matter and fixed four dates of hearing but since Notification under section 6 read with Section 17(1)(4) of the Acquisition Act was issued on September 15, 2005 the LAO declined to decide the objections. In the written statement, the State of Rajasthan and RIICO pleaded that industrial area earlier set up in village Kukas had saturated and there was heavy demand of industrial plots in the said area being situated in proximity to the National Highway No.8 leading to Delhi. Therefore considering the urgency of the situation and after due application of mind the State Government decided to invoke the urgency clause of section 17(1)(4) of the Acquisition Act dispensing with the requirement of hearing under section 5A of the said Act. The learned counsel for the RIICO placed for my perusal the record of the proceedings to show that the subjective satisfaction was formed fairly by the State Government. My attention was drawn to the ratio indicated in Rajasthan Housing Board Vs. Shri Kishan, 1993 2 SCC 84 wherein their Lordships of the Supreme Court observed as under:-

"It must be remembered that the satisfaction under section 17(4) is a subjective one and that so long as there is material upon which the Government could have formed the said satisfaction fairly, the court would not interfere nor would it examine the material as an appellate authority."

17. I have also scanned other judicial pronouncements cited by the learned counsel. In First Land acquisition Collector Vs. Nirodhi Prakash Ganguli, 2002 4 SCC 160 their Lordships of the Supreme Court indicated that existence of urgency is in a matter of subjective satisfaction of appropriate Government. Decision of Government do dispense with an inquiry under section 5A by invoking the urgency provision can be challenged only on grounds of non-application of mind and malafide. Burden lies on the persons alleging malafide to prove the same on the basis of specific materials. So long purpose of acquisition and urgency to acquire continues to exist, exercise of power under section 17 cannot be held to be malafide. Mere delay on the part of the Government, subsequent to its decision to dispense with the inquiry under section 5 A by exercising power under section 17 would not invaliate the decision itself."

10. The learned Single Judge thereafter proceeded to analyse several judgments, which stated that power to acquire the land is inherent power of eminent domain which vests with every State. The Court then considered the Master Plan, conversion of land for installing industries, and also noted Rule 2-B of the Rajasthan Industrial Areas Allotment (Amendment) Rules, 2003 and Section 17. The impugned judgment then held on the merits that there was an important public purpose, which underlay the acquisition and consequently, upheld the notification to the extent it was issued under Section 17(1) and Section 17(4) of the Act.

11. In a later part of the judgment, after having noticed the binding rulings of the Supreme Court and the correct approach which the Courts had to adopt while considering the challenge to the notification dispensing with hearing under Section 5A [including the judgment in Union of India Vs. Mukesh Hans, 2004 8 SCC 14 and Union of India Vs. Krishan Lal Arneja, 2004 8 SCC 453], the learned Single Judge held as follows:-

"34. Having considered oral and written submissions as well as material placed for my perusal, I am of the view that 'urgency clause' in the instant case, is a substitute and support for the laxity, lethargy and lack of care on the part of the State Administration. The State Government while invoking 'Urgency Clause' did not act with due care and responsibility. The enormous power provided by section 17(1) and (4) of Acquisition Act has not been exercised by the State Government in a fair and reasonable manner. Even the order of this court rendered in Justice R.S.Verma Vs. State of Rajasthan (supra) in the interest of ecology and environment, escaped notice of the 'High Ups' of the State Administration. The State Government even had gone to the extent of ignoring its own Statutory Rules framed to protect the National Highways. In my considered opinion, which is based on the close scrutiny of photo state copies of relevant acquisition papers decision making process of the State Government itself suffers from illegality, irrationality and procedural impropriety and it is a fit case where power of judicial review can legitimately be exercised.

35. For the reasons aforementioned I dispose of the instant writ petitions in the following terms:-

(i) Impugned Notification dated September 15, 2005 issued by invoking emergent provisions under section 17 as well as notice under section 9(1)(2) of the Acquisition Act and subsequent proceedings under the said Act, shall stand set aside.

(ii) The State Government shall however be at liberty to continue inquiry under section 5A of the Acquisition Act.

(iii) There shall be no order as to costs."

12. It is evident from the above narrative that the learned Single Judge took a nuanced position and rendered careful findings with respect to the public purpose underlying acquisition that was issued. Though many of the appellants/writ-petitioners who had approached this Court withdrew the challenge, the surviving land owners, maintained their opposition to the first part of the judgment.

13. This Court is of the opinion that as far as need to acquire the land and develop it for the purposes of industrial and economic development of the State of Rajasthan which would also incidentally increase the employment opportunities is concerned, the objection about lack of public purpose cannot stand. The Court is, therefore, of the view that the challenge to that part of the judgment cannot be sustained. The challenge by the land owners or the persons interested, therefore, cannot survive.

14. As far as challenge to the findings regarding invocation of the urgency clause under Section 17(4) of the Act is concerned, the Single Judge went by the record and did not choose to look into the explanation given subsequently in the Court. The Single Judge in this regard relied upon Commissioner of Police Bombay Vs. Goverdhan Das Bhanji, 1952 AIR(SC) 16, where it was held that explanations, which are outside of the record and one given subsequently in the Court, cannot justify a State action which has to stand or fall for the reasons found in the file, made at the time when the decision was taken.

15. In this case, the decision to invoke the urgency clause has been set out and extracted by the Single Judge in the impugned judgment. The State had submitted that the Commissioner (Investment) and Bureau of Investment Promotion had been pursuing a private party to set up its third manufacturing unit in Rajasthan and that the financial package for that company was negotiated by the State Finance Department, which was sought to be presented to the BIP. The private company had almost made up its mind with respect to the location. It was submitted that in these circumstances, to ensure that land could be made available in the shortest possible time, the urgency clause was invoked. The record also reflects that proposal to acquire the land was initiated on 14.08.2004; these were re-examined on 28.12.2004 by the Industries Minister who wished to discuss the matter with the Chief Managing Director of RIICO and eventually on 14.06.2005, the question of interest by a third party (Hero Honda) was noticed. If these facts are kept in mind, given the time-lag between the initial proposal which was in August, 2004 and the acquisiti

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on notification- which was contemporaneously followed by invocation of the urgency clause on 01.07.2005, it is clear that had the State initiated the normal process of acquisition and heard the concerned parties, there would have been no prejudice to it. On the other hand, the State invoked the urgency clause after considerable lapse of time. 16. Given these facts, this Court is of the opinion that the learned Single Judge was justified in holding that the Notification under Section 17(4) was not justified and, therefore, was illegal. 17. This Court was further informed that after the impugned judgment was delivered on 01.05.2006, appeals were preferred by RIICO and the State. The record of these appeals show that there was no interim order for a considerable period of time. It was only on 16.03.2009 that the Division Bench stayed the order of the learned Single Judge. Although the issue is not before the Court, the imperative of second para of Proviso-I to Section 6(1) is clear, in that, declaration under Section 6 must necessarily be issued within one year from the date of notification under Section 4. 18. In these circumstances, even if Section 4 notification (given with the invocation of the urgency clause had been set aside on 01.05.2006) was to be reckoned from that date, the period had lapsed on 30.04.2007, much before the Court interdicted in the interim order dated 16.03.2009. 19. Given all these facts, the Court is of the opinion that there is no merit in these appeals which are consequently dismissed. All pending applications are disposed of.