REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICITION

CIVIL APPEAL NO. 8431 OF 2010

(Arising out of SLP (C) No.9924 of 2007)

Amarjit Singh & Ors. …Appellants

Versus

State of Punjab & Ors. …Respondents

WITH

CIVIL APPEAL NO. 8432 OF 2010

(Arising out of SLP (C) No.9926 of 2007)

Mewa Singh & Ors. …Appellants

Versus

State of Punjab & Ors. …Respondents

J U D G M E N T

T.S. THAKUR, J.

Leave granted.

These two appeals by special leave raise common

questions of law and shall stand disposed of by this common

judgment. The appeals arise out of two separate orders both

dated 26.9.2006 passed by the High Court of Punjab and

Haryana whereby C.W.Ps. Nos.9060 of 2005 and 9083 of

2005 filed by the appellants have been dismissed. The

petitioners had in those petitions challenged the validity of a

Notification dated 23.1.2004 issued under Section 4 of the

Land Acquisition Act and a declaration dated 18.1.2005

issued under Section 6 thereof. Constitutional validity of

Section 23(1) of the Land Acquisition Act, 1894 and Punjab

New Capital (Periphery) Control Act, 1952 was also assailed

by them on several grounds which failed to find favour with

the High Court who upheld not only the constitutional

validity of the impugned enactments but also the notification

issued under the Land Acquisition Act. The present appeals

assail the correctness of the view taken by the High Court.

2

The facts giving rise to the controversy have been set

out at length by the High Court in the lead judgment under

challenge delivered in C.W.P. No. 9060 of 2005. The same

need not, therefore, be set out again except to the extent it

is absolutely necessary to do so. Suffice it to say that the

writ petitioners-appellants before us are expropriated

owners of different parcels of land situate in Village Chilla,

Tehsil Mohali, District Ropar, in the State of Punjab an

upcoming township situate on the outskirts of the city of

Chandigarh, which has over the years seen rapid growth as

a residential and urban estate. In the first phase of the

expansion of the township sectors 53 to 75 were taken up

for development under the provisions of Punjab Urban

Estate (Development and Regulation) Act, 1964 and Punjab

Housing Development Board Act, 1972; and the land needed

for these sectors acquired under the Land Acquisition Act,

1894.

3

In due course the Government started the process of

acquisition of land for sectors 76 to 80 also with a view to

extending further the urban estate of Mohali. A large extent

of 1274 acres of land was notified for acquisition in this

phase of extension and development. The respondents

assert that while a majority of the land owners did not find

fault with the proceedings, some of the owners representing

around 10% of the total area notified for acquisition,

questioned the same, in writ petitions filed before the

Punjab and Haryana High Court. One of the grounds urged

in the said petitions was that unless and until a master plan,

a regional plan or a town planning scheme was finalized

under the Punjab Regional and Town Planning and

Development Act, 1995 no acquisition of land could be

undertaken by the Government or its agencies. Interim

orders staying the acquisition proceedings were also issued

by the High Court in the said petitions apart from orders by

which dispossession of the petitioner-owners was stayed.

These orders created serious hurdles for the implementation

4

of the 2

nd

phase of the development and extension of Mohali

township. The government was of the view that legal

impediments in the acquisition of a small percentage of the

total area could not be allowed to adversely affect the entire

plan which was meant to meet the urgent housing

requirements of the people of Punjab. The Government

therefore invoked its powers under Section 178(2) of the

Punjab Regional and Town Planning and Development Act,

1995 and exempted the areas falling under sectors 76 to 80

from the provisions of Section 14 and those contained in

Chapters VIII, IX and XII of the said Act.

The exemption notification referred to above was

challenged by the aggrieved owners in CWP No.29 of 2004

Jasmer Singh v. State of Punjab and Anr. which was

dismissed by a Division Bench of the High Court on 26

th

September, 2007. The High Court held that the exercise of

powers vested with the Government under Section 178(2) of

the Act was neither mala fide nor otherwise vitiated by any

illegality. The High Court noted that Mohali was an existing

5

township and its development and expansion had been

planned much before the promulgation of the 1995 Act,

which development could be carried out by, if necessary

exempting the area required for such development from the

provision of the said Act. Exercise of the power of exemption

under Section 178 (2) of the 1995 Act was therefore held to

be perfectly justified. The correctness of the view taken by

the High Court was challenged by the writ petitioners before

this Court but unsuccessfully.

Acquisition proceedings for development of sectors 81,

88 and 89 which comprised the third phase of the

development were then initiated by the Collector, Land

Acquisition, Mohali. While 417.39 acres of land was acquired

in sector 81, an area of 688.89 acres of land was acquired in

sectors 88 and 89. A declaration under Section 6 in relation

to the said extent of land was also issued on 18.1.2005. To

ensure that the acquisition process is free from any

impediments the Government once again invoked the

provisions of Section 178(2) of the Punjab Regional and

6

Town Planning and Development Act, 1995 in regard to the

land notified for development of sectors 81, 88 and 89. A

notification dated 10

th

February, 2004 issued in that regard

exempted the land falling in the said sectors from the

provisions of Section 14 and those contained in Chapters

VIII, X and XII of the said Act.

Aggrieved by the acquisition proceedings the appellants

filed writ petitions No. 9060 of 2005 and CWP No. 9083 of

2005 in the High Court challenging the preliminary

Notification and the declaration issued under Sections 4 and

6 of the Land Acquisition Act, apart from challenging the

vires of Section 23(1) thereof. The writ petitions also

assailed the constitutional validity of Punjab New Capital

(Periphery) Control Act, 1952. By the lead judgment

impugned in these appeals the High Court repelled the

challenge mounted by the writ petitioners and declared that

the notifications under challenge did not suffer from any

illegality whatsoever. It also upheld the constitutional

validity of the provisions of the Punjab New Capital

7

(Periphery) Control Act, 1952 and Section 23(1) of the Land

Acquisition Act. Hence the present appeals.

We may before proceeding any further refer to a few

more facts which have a bearing on the controversy in these

appeals. The extent of land that remains the subject matter

of these appeals after withdrawal by three of the appellants

in C.A. No. 9924/2007 is limited to just about 20 acres of

land out of a total extent of 417.39 acres notified for

acquisition in Sector 81. The respondents have on affidavit

stated that owners of nearly 96% of the total area acquired

by them have already received the compensation

determined in their favour. The affidavit further states that

compensation payable to those who continue to pursue their

challenge to the acquisition in these appeals has been

determined at Rs.5.96 crores + 6.43 crores totaling to

Rs.12.39 crores.

The other aspect that is noteworthy is that out of the

total extent of 417.39 acres acquired in Sector 81 an extent

8

of 363.89 acres, stands allotted by the respondents to

different institutions for them to set up their establishments

in what is described as “Knowledge City” in the State of

Punjab. The affidavits filed by the respondents state that an

area measuring 160 acres (approx.) has been

allotted/earmarked in favour of Indian Institute of Science,

Education and Research (IISER) under the Ministry of

Human Resources Development, Government of India, New

Delhi. Similarly an area measuring 35 acres (approx.) has

been allotted to Institute of Nano Science and Technology

(INST) under the Ministry of Science and Technology, Govt.

of India, New Delhi. An area measuring 35 acres has been

allotted to National Agro Bio Technology Institute (NABI)

under the Department of Science & Technology, Govt. of

India, New Delhi. For Bio-Processing Unit under the

Department of Science & Technology, Govt. of Punjab an

area measuring 15 acres has been set apart/allotted, while a

large area measuring 83.89 acres has been

earmarked/allotted to Bio-Technology Park under the

9

Department of Science & Technology, Govt. of Punjab.

Similarly an area measuring 70 acres has been allotted to

Indian School of Business under the Department of Higher

Education, Govt. of Punjab.

Appearing for the appellants Mr. Gupta learned senior

counsel made a three-fold submission before us. Firstly, he

contended that acquisition of land in terms of the impugned

notifications was illegal in as much as the provisions of

Punjab Regional and Town Planning and Development Act,

1995 had not been complied with before issuing the said

notifications. He argued that although a notification under

Section 56(5) of the Act is stated to have been issued on 6

th

March, 2001 the same was not sufficient to validate the

acquisition in as much as the notification in question was

itself invalid having been issued without following the

procedure prescribed under Section 56(5) and without

affording any opportunity to the land owners to file their

objections.

1

Secondly, he contended that the notification dated 10

th

February, 2004 issued under Section 178 (2) of the Act

whereby the area falling in Sectors 81, 88 and 89 was

exempt from the provisions of Section 14 and Chapters VIII,

X and XII was also illegal and unsustainable. He contended

that the reasons underlying the said notification were not

germane to the exercise of powers reserved in favour of the

Govt. by the said provisions. Mr. Gupta urged that the State

could not exempt an area from the provisions of the Act on

the ground that the ‘prospective allottees’ would face undue

hardship or that the procedure prescribed under the 1995

Act was cumbersome and time-consuming.

It was lastly contended by Mr. Gupta that the lands

acquired from the ownership of the appellants were their

only source of livelihood. Compulsory acquisition thereof

without any provision for rehabilitation of the expropriated

owners was not only constitutionally impermissible but

unfair and unreasonable, argued the learned counsel. He

submitted that realizing the hardships which the ousted

1

owners face in case agricultural lands are acquired without

an adequate provision for their rehabilitation the

Government has formulated what is called ‘Land Pooling

Scheme’ and circulated the same under Revenue and

Rehabilitation Department’s letter dated 5

th

September,

2008. He urged that though the said scheme was made

operative only prospectively, the benefit thereof could be

extended to the appellants also to reduce the hardships

which they would face without adequate measures for their

rehabilitation. It was contended that a large area of nearly

57 acres was available with the respondents even at present

and which could be utilized for the rehabilitation of the

appellants by allotting commercial sites in their favour to

enable them to eke out their livelihood.

On behalf of the respondents it was contended by Mr.

Gopal Subramaniam, that the High Court was justified in

dismissing the writ petition filed by the appellants. There

was, according to him, no illegality in the notification issued

under the Land Acquisition Act nor was any such point raised

1

before the Writ Court or before this Court for that matter. It

was submitted that the notification under Section 56(5) of

the Act had been issued after following the prescribed

procedure which included consideration of the objections

received from different quarters to the declaration of Mohali

as a ‘Local Planning Area’. He urged that the

petitioner/appellants had not assailed the validity of the said

notification and cannot now be allowed to do so at this

belated stage. So also the validity of the notification issued

under Section 178(2) of the Act aforementioned was not

challenged in the writ petition filed by the appellants. Any

attempt to challenge the validity of the said notification at

this stage was, therefore, futile.

The absence of a challenge apart from the notification

did not, according to Mr. Subramaniam, even otherwise

suffer from any legal infirmity. The Government having

applied its mind to the question of exemption of the area

from the provisions of the 1995 Act was fully justified in

issuing the exemption notification for good and valid reasons

1

enumerated therein. A similar notification issued in regard

to sectors 76 to 80 was on analogous grounds assailed

before the High Court by the landholders in Jasmer Singh

v. State of Punjab. The challenge was repelled by the High

Court and even this Court in a further appeal. The appellants

cannot, therefore, find fault with the notification issued in

regard to the adjacent sectors 81, 88 and 89 which gives

analogous reasons for exemption to what has already been

held to be both relevant and adequate, in Jasmer Singh’s

case.

As regards the question of rehabilitation of the

expropriated land owners, Mr. Subramaniam, submitted that

rehabilitation was not a recognized right either under the

Constitution or under the provisions of the Land Acquisition

Act. Any beneficial measures taken by the Government are,

therefore, guided only by humanitarian considerations of

fairness and equity towards the land owners. The benefit of

such measures is however subject to the satisfaction of all

such conditions as may be stipulated by the Government in

1

regard thereto. The policy relied upon by the appellants

being only prospective cannot be made retrospective by a

judicial order to cover acquisitions that have since long been

finalized. Mr. Subramaniam contended that although the

appellants/owners have been adequately compensated for

the land acquired from their ownership by paying them

handsome compensation, yet the State would not oppose

any direction for a reference to the Civil Court for

determination of reasonable compensation to the appellants,

if they are otherwise dissatisfied with the amount

determined in their favour.

The following questions fall for our determination:

(1)Whether the exemption of the land under

acquisition from the provisions of Section 14 and

Chapters VIII, X and XII of the Punjab Regional and

Town Planning and Development Act, 1995 in terms of

notification dated 10

th

February, 2004 issued under

1

Section 178(2) of the said Act suffers from any legal

infirmity?

(2)If the answer to question No.1 be in the

affirmative whether the acquisition under challenge is

rendered bad for non-compliance with the provisions of

the Act aforementioned; and

(3)Whether the absence of any rehabilitation

measures renders the acquisition in question legally

bad. If not, whether the ‘Land Pooling Scheme’ can be

made applicable to the acquisition of the land acquired

from the appellants.

We shall deal with the questions ad seriatim.

Re: Question No.1

We may before dealing with this question on its merits,

point out that notification dated 10

th

February, 2004 granting

exemption was never challenged in the writ petitions filed by

the appellants. There is no foundation laid in the petitions

by the appellants for them to contend that the exemption

1

notification was vitiated either because of lack of authority

or misdirection by the Government in exercise of its power

under Section 178(2) of the Town Planning & Development

Act 1995. The High Court has noticed this aspect in the

following paragraph of its judgment:

“Still further, since the factual situation

with regard to the issuance of the notification

under section 178 of the 1995 Act granting

exemption from the application of provisions

of the 1995 Act is admitted by the petitioners

it is not open to them to challenge the

acquisition on the ground that there is

violation of the 1995 Act, without at least

laying challenge to the notification granting

exemption.”

In the light of the above we find it difficult to appreciate

how the issue regarding the validity of the exemption

granted by the Government could be raised by the writ

petitioners before the High Court or argued impromptu by

the appellants before us. Any attempt to raise the question

regarding validity of the exemption notification must

therefore fail on that ground alone. Since, however, Mr.

1

Gupta took great pains to make his submissions on the

subject we may as well deal with the same.

Section 178 of Punjab Regional and Town Planning and

Development Act, 1995 deals with exemptions and may be

extracted:

“Section 178:

EXEMPTION :- (1) Nothing in this Act shall

apply to the operational constructions.

(2)Where the State Government is of the

opinion that operation of any of the

provisions of this Act causes any undue

hardship or circumstances exist which render

it expedient so to do, it may, subject to such

terms and conditions as it may impose, by

general or special order, exempt class or

persons or areas from all or any of the

provisions of the Act.”

A plain reading of sub-section (2) above would show

that the State Government is empowered to exempt any

class of persons or areas from all or any of the provisions of

the Act in cases where in the opinion of the State

Government the operation of any such provisions would

1

either cause undue hardship or the grant of exemption is

otherwise expedient. According to the respondents the

power to exempt was in the present case exercised by the

Government not only because it was expedient to do so, but

also because it was necessary to avoid hardship to the

allottees. The notification sets out the circumstances in

which the exercise of power was found necessary by the

Government. It states that SAS Nagar (Mohali) was planned

to include sectors 53 to 81 long before the coming into force

of the Punjab Regional and Town Planning and Development

Act, 1995. Sectors 53 to 75 were developed in the first

phase after acquiring the land required for the same under

the Land Acquisition Act. This was followed by acquisition of

land for sectors 76 to 80 which further extended the

township to meet the ever increasing housing needs of the

people of Punjab.

The exemption notification then refers to a decision

taken in a meeting held on 25

th

August, 1995 whereunder

the existing township was to be further extended by addition

1

of a few more sectors. Sectors 80, 81, 88 and 89 were in

pursuance of the said decision taken up for development

after obtaining approval of the competent authority. A

preliminary Notification under Section 4 of the Land

Acquisition Act proposed an area of 417.39 acres in sector

81 and 688.89 acres in sectors 88 and 89 for acquisition.

The exemption notification goes on to state that

acquisition of land for sectors 76 to 80 started by the

Government was challenged by the landowners mainly on

the ground that the provisions of the Town Planning &

Development Act, 1995 were not complied with. The High

Court of Punjab and Haryana had in these petitions stayed

the dispossession of the owners while granting liberty to the

respondents to proceed with the matter subject to the final

orders of the Court. The notification finally makes a

reference to the fact that Mohali has recorded the highest

rate of growth of population of Class I cities giving rise to

considerable increase in the demand for housing, in turn

giving rise to haphazard development in the area if planned

2

development of the sectors in question is not immediately

taken up and plots made available to the allottees. The

Government was, in the above backdrop, of the opinion that

it was expedient to exempt the areas falling in sectors 81,

88 and 89 from the operation of Section 14 and those

contained in Chapters VIII, X and XII of Punjab Regional and

Town Planning and Development Act, 1995. It was also of

the opinion that the prospective allottees would suffer

hardship in case the Government does not grant exemption

to the areas falling in the above sectors from the provisions

referred to above.

The operative portion of the exemption notification

reads:

“In exercise of the powers conferred upon

the State Government under Section 178(2)

of the Punjab Regional and Town Planning

and Development Act, 1995 and keeping in

view larger public interest and planned

development of the area, the State

Government hereby exempts the areas

falling under Sector 81, 88 and 89 being

developed as expansion of existing township

of SAS Nagar (Mohali) from the operation of

2

provisions of Section 14 and consequently of

the uncomplied provisions in Chapter VIII, X

and XII, i.e. Section 56 to 60, 70 to 78 and

91 to 138 of the Punjab Regional and Town

Planning and Development Act, 1995.”

None of the circumstances referred to above is, in our

opinion, irrelevant or extraneous to the exercise of the

power of exemption vested in the Government under Section

178(2) of the Act. What is significant is that Mohali was

identified for planned development by addition of sectors 53

to 81 even before the Punjab Regional and Town Planning

and Development Act, 1995 came into force. The proposed

development was to be carried out under the provisions of

Punjab Urban Estate (Development and Regulation) Act,

1964 and Punjab Housing Development Board Act, 1972. It

is true that initially the plan was limited to the addition of

sectors 53 to 81 but the third phase with which we are

concerned comprised not only development of sector 81

which was a part of the original plan but also included

sectors 88 and 89.

2

It is also evident from the notification that compliance

with the provisions of the Punjab Regional and Town

Planning and Development Act, 1995 was found to be

impracticable primarily because of the tremendous pressure

on land in and around Mohali for housing purposes especially

because the township has witnessed phenomenal growth

over the years. The notification in our opinion rightly stated

that if immediate steps were not taken to develop the

outskirts of the township it would lead to large scale

unplanned and haphazard mushrooming of housing colonies

and commercial establishments in the area. Delay in the

finalization of the outline Master Plan, comprehensive master

plan and a town planning scheme thus had the potential of

frustrating the very purpose underlying the legislation that is

aimed at better planning, regulation, development and use

of land in the planning areas. The Government was in that

view well within its power to evaluate the options available

to it, making a choice and taking appropriate action to

prevent any such disorganized and haphazard development.

2

In as much as the Government did so and decided to invoke

its powers under Section 178(2) of the Act, it committed no

illegality. On the contrary, the Government has by taking

timely action prevented a situation where the area around

the township of Mohali would have on account of

tremendous pressure for conversion of land to non-

agricultural use developed into a large slum as is the bane of

many other cities in the country where statutory authorities

charged with duties of urban development have failed to

keep pace with the housing needs of the populace. It is

noteworthy that the Government had prevented such

haphazard and unplanned development even in sectors 76

to 80 by exempting the land falling in the said sectors from

the operation of the provisions of the Punjab Regional and

Town Planning and Development Act, 1995. The said

exemption was assailed by the land owners but upheld not

only by the High Court but even by this Court in appeal.

That, the power of exemption could be exercised in

2

situations similar to the one in hand thus stands amply

established.

The contention of Mr. Gupta that just because the

formulation of master plans and town planning schemes

takes time cannot be a good ground for the Government to

grant exemption from the operation of the statutory

provisions may be unexceptionable for the law must be

allowed to take its course howsoever cumbersome and time-

consuming the process may be. But it is not the

cumbersome and time-consuming process alone that has led

to the issue of the exemption notification. It was a realistic

assessment of the ground realities requiring urgent action

that made adherence to the letter of law impracticable. The

Government was of the opinion that failure to take

immediate action for developing these sectors will lead to

unplanned and haphazard construction activities in the area.

It was the cumulative effect of all the circumstances referred

to in the notification that led to the issue of the exemption

notification.

2

We need to remember that Section 178(2) empowers

the Government to grant exemption from the operation of

the Act on the twin grounds of hardship and expediency.

For the Government to exercise its power of exemption on

the ground of expediency two requirements must be

satisfied viz. (i) that circumstances exist which render it

expedient to grant the exemption & (ii) the Government

upon a consideration of those circumstances forms an

opinion that it is expedient to do so. The latter requirement

is more in the nature of a subjective satisfaction of the

Government while the former is dependant on objective

consideration of the circumstances that are germane. Once

the existence of circumstances that are relevant to the

exercise of the power of exemption are found to exist the

formation of the opinion by the Government about the

expediency of granting an exemption is a matter on which

the Court would be slow to interfere unless the decision is

shown to be a colourable exercise or vitiated by any

extraneous motive or consideration. The term ‘expedient’

2

appearing in Section 178 of the Act has not been defined.

Black’s Law Dictionary, however, assigns the expression

‘expedient’ the following meaning:

“Appropriate and suitable to the end in view

-Whatever is suitable and appropriate in

reasons for the accomplishment of a specified

object.”

The term ‘expedient’ has fallen for interpretation before

this Court in several cases. In the State of Gujarat v.

Jamnadas G. Pabri and Ors. (1975) 1 SCC 138 this Court

was interpreting the provisions of Section 303A of the

Panchayats Act as amended by Gujarat Panchayats

(Amendment) Act 8 of 1974. The question was whether

satisfaction of the State Government as to the expediency of

holding elections for the reconstitution of a Panchayat was

amenable to judicial review. Sarkaria J. speaking for the

Court observed:

“……An analysis of Section 303-A(1) would

show that before a declaration referred to in

that sub-section can be made, two

requirements must be fulfilled: (1) existence

2

of a situation by reason of disturbances in

the whole or any part of the State; (2) the

satisfaction of the State Government

relatable to such a situation, that it is not

expedient to hold elections for the

reconstitution of a Panchayat on the expiry of

its term. The first requirement is an objective

fact and the second is an opinion or inference

drawn from that fact. The first requirement,

if disputed, must be established objectively

as a condition precedent to the exercise of

the power. The second is a matter of

subjective satisfaction of the Government

and is not justiciable. Once a reasonable

nexus between such satisfaction and the

facts constituting the first requirement is

shown, the exercise of the power by the

Government, not being colourable or

motivated by extraneous considerations, is

not open to judicial review. Thus the question

that could be objectively considered by the

Court in this case was: Did a situation arising

out of disturbances exist in the State of

Gujarat on the date of the impugned

notification?”

Dealing with the word ‘expedient’ appearing in Section

303A this Court observed:

“…….Again, the word “expedient” used in this

provision, has several shades of meaning. In

one dictionary sense, “expedient” (adj.)

means “apt and suitable to the end in view”,

“practical and efficient”; “politic”;

“profitable”; “advisable”, “fit, proper and

suitable to the circumstances of the case”. In

another shade, it means a device

“characterised by mere utility rather than

principle, conducive to special advantage

rather than to what is universally right” (see

Webster’s New International Dictionary).”

2

The Court declared that Section 303A had been designed to

enable the Government to get over a difficult situation

surcharged with dangerous potentialities, and that the Court

must construe the aforesaid phrases in keeping with the

context and object of the provision in their widest amplitude.

In Balbir Singh v. State of Haryana (2000) 5 SCC 82

this Court had another opportunity to interpret the term

‘expedient’ appearing in Section 4 of the Probation of

Offenders Act, 1958. The Court held that the word is to be

interpreted keeping in view the context and the object of the

provisions in widest amplitude, and that while dealing with

the question of grant of probation under the Act a duty was

cast on the Court to take into account the circumstances of

the case including the nature of the offence and form an

opinion whether it is suitable and appropriate for

accomplishing a specified object that the offender can be

released on probation of good conduct.

2

Power of exemption reserved in favour of Government

under Section 178 of the Town Planning and Development

Act, 1995 is also intended to relieve hardship arising from

the operation of the Act. It is intended to enable the

Government to deal with situations in which circumstances

independent of the question of hardship render it expedient

to do so by granting exemption. A liberal construction has,

therefore, to be placed upon the provisions of Section

178(2) so that exercise of power for good and bona fide

reasons is not defeated.

In the totality of the above circumstances we answer

question No.1 in the negative. We need to remember that

nearly 96% of the landowners have already accepted the

compensation and either accepted the acquisition

proceedings or given up the challenge to the validity thereof.

So also the fact that allotments in favour of different

institutions have already been made cannot be ignored nor

can a prestigious project like the one at hand be scuttled at

this stage.

3

Re: Question No.2

In the light of what we have said while dealing with

question no.1 above, we consider it unnecessary to discuss

in detail the merits of the contentions urged by the learned

counsel for the parties in regard to this question. We say so

because once the exemption granted by the Government to

the land falling in sectors 81, 88 and 89 is upheld the

question of striking down the land acquisition proceedings

on the ground that the provisions of the 1995 Act were not

complied with does not survive. It is important to note that

the validity of the acquisition proceedings have not been

challenged on any ground that may have been available to

the appellants by reference to the Land Acquisition Act.

Neither before the High Court nor before us was it argued

that the provisions of the Land Acquisition Act were not

followed in letter and spirit, while acquiring the land in

question. All that Mr. Gupta argued was that the case at

hand was covered by the decision of this Court in Sanjeet

Singh’s case (supra). We have carefully gone through that

3

decision but find the same to be clearly distinguishable.

That was a case where the Government had issued

notifications under Section 4 of the Land Acquisition Act for

the public purpose of setting up of a new township of

Anandgarh. Several writ petitions filed before the High Court

challenged the said notifications alleging that the same had

been issued in violation of Punjab Regional and Town

Planning and Development Act, 1995. One of the arguments

that was urged was that the site for setting up of a new

town had to be first selected by the Board constituted under

the Act aforementioned and since no such selection process

had been undertaken by the Board the entire process of

acquisition was vitiated. The High Court accepted that

contention and quashed the notifications holding that the

selection of the site itself not being in accordance with the

1995 Act, acquisition based on any such selection was not

legally permissible. In an appeal filed by the State of Punjab

before this Court the question whether the site for a new

township could be selected by the Government or by the

3

Town Planning Authority was debated at length. This Court

affirmed the view taken by the High Court and observed:

“In the instant case the provisions of Section

56 were completely ignored and without

declaring the planning area by notification in

the Official Gazette, and without following the

procedure laid down therein. In the instant

case, the State never called upon the Board

to select a site, and instead a New Town

Planning and Development Authority was

constituted under Section 31 of the Act which

arrogated to itself the powers and functions

of the Board to select a site and make a

recommendation to the State Government,

and later moved the Government for

acquisition of land under Section 42 of the

Act. All these actions were in complete

breach of the mandatory provisions of

Section 56 of the Act, and therefore void.

Hence it is held that the declaration of

the planning area, a site for a new town, was

never validly made by the competent

authority after following the prescribed

procedure and, therefore, there was in law

no validly selected site for a new town, nor a

validly declared planning area. Consequently,

there was no justification for acquisition of

land to set up a new town. The public

purpose stated in the impugned notifications

was non-existent in view of the fact that

there was no planning area validly declared

by the competent authority for the

development of which any land was required.

Section 42 which provided for acquisition of

land under the provisions of the Land

Acquisition Act could not, therefore, be

invoked.”

3

The facts in the present case are totally different. In

the case at hand we are not dealing with the establishment

of new city or township. We are also not dealing with a case

where a request for acquisition of land is made by the Town

Planning Authority under Section 42 of the Act. We are on

the contrary dealing with a case where the acquisition is

being made on the basis of an expansion plan formulated

before the 1995 Act came into force.

That apart, unlike the case of Sanjeet Singh’s the

land under acquisition in these cases is covered by a

notification under Section 56(5) of the 1995 Act, which

declares SAS Nagar (Mohali) as a local planning area. The

relevant part of the notification is in the following words:

“Punjab Government

Punjab Regional and Town Planning and

Development Board

NOTIFICATION

Dated 06.03.2000

No.12/2/2000-4MU. 1/732 For the organized

development of Sahibzada Ajit Singh Nagar

(SAS Nagar) by formulation of a Master Plan,

3

the Punjab Regional and Town Planning and

Development Board had under Section 56(1)

of Punjab Regional and Town Planning and

Development Act, 1995 issued notification

no. 6/21/95-4mu-1/3030 dated 01.07.1996

alongwith Drawing no. DTP (SAS Nagar)

1148/96 dated 07.04.1996 for the proposed

declaration of the dame as a Notified

planning area.

As per the above notice published under

Section 56(4) of the Punjab Regional and

Town Planning and Development Act, 1995,

objections and suggestions from any person,

State government or any department of

Central Government or local authority, or any

other representative of any other

organization on the same. Written objectins

or suggestions could be raised on any part of

the notification for declaring local planning

area, within 60 days from the date of

publication of the Notification on any aspect

of the matter to the Member/Secy. Punjab

Regional and Town Planning and

Development Board, SCO 63-64, Sector 17-

C, Chandigarh.

In the meeting of Committee dated 16

th

October, 1998 which had been constituted for

the scrutiny of objections and suggestions so

received to the above Notification, were

analyzed and considered. It was felt by the

Committee that all the objections and

suggestions were frivolous and as such they

should be rejected. Accordingly the

Committee recommend to Regional Town

Planning and Development Board that the

Board may reject the suggestions and

3

objections which has been raised and declare

the same as a local planning area under

Section 56(5) of Act.

The Punjab Regional and Town Planning

and Development Board in its Meeting held

on 15

th

November, 1999 at Chandigarh

approved the recommendation Committee

after considering the same. The Board also

rejected the objections and suggestions

received relating to the declaration of Local

Planning Area, SAS Nagar. The Board under

Section 56(5)(a) and (b) of the above Act

also granted approval for the declaration of

the same as a local planning area as also the

name it local planning area SAS Nagar.

The Punjab Regional and Town Planning

and Development Board in accordance with

the above mentioned decision declares the

local planning area SAS Nagar under Section

56(a)&(b) in consonance with Punjab

Regional and Town Planning and

Development Act 1995. It shall be named as

Local Planning Area SAS Nagar. The

boundaries of the local planning are as

under.”

It is manifest that the above gave a sufficient basis for

the Government to initiate proceedings for the acquisition of

land needed for the proper expansion of the township.

A feeble attempt was made by learned counsel for the

appellants to assail the validity of the notification. It was

3

submitted that the same had been issued without notice to

the landowners and others to file their objections. We,

however, see no merit in that contention either. It is

noteworthy that the notification in question was not assailed

before the High Court in the writ petitions filed by the

appellants. It is not, therefore, open to the petitioner to

argue that the notification suffered from any illegality. No

factual foundation having been laid in the writ petition we

have no hesitation in rejecting the contention that

notification was issued without following the procedure

prescribed for the purpose and without considering the

objections received from different quarters. We may recall

that in Jasmer Singh’ case (supra) the High Court had

distinguished acquisitions for a new town from those meant

for the extension of the existing township of Mohali and held

that Sanjeet Singh’s case (supra) had no application to the

later case. That view was affirmed by this Court in appeal

and the acquisition for extension of Mohali upheld.

3

Question no.2 is also, in the light of the above,

answered in the negative.

Re: Question No 3.

Article 300-A of the Constitution rests on the doctrine

of eminent domain and guarantees a constitutional right

against deprivation of property save by authority of law. It

mandates that to be valid the deprivation of property must

be by authority of law. That such deprivation in the present

case is by the authority of law was not disputed, for it is

common ground that the property owned by the appellants

has been acquired in terms of the provisions of the Land

Acquisition Act, 1894 which is a validly enacted piece of

legislation. It is also not in dispute that the provisions of

Land Acquisition Act invoked by the State for the acquisition

under challenge provides for payment of compensation

equivalent to the market value of the property as on the

date of the preliminary notification apart from other benefits

like solatium for the compulsory nature of the acquisition,

additional compensation and interest etc. The sum total of

3

all these amounts undoubtedly constitutes a reasonable

compensation for the land acquired from the expropriated

owners. Neither Article 300-A of the Constitution nor the

Land Acquisition Act make any measures for rehabilitation of

the expropriated owners a condition precedent for

compulsory acquisition of land. In the absence of any such

obligation arising either under Article 300-A or under any

other statutory provision, rehabilitation of the owners cannot

be treated as an essential requirement for a valid acquisition

of property. We must, in fairness to Mr. Gupta mention that

he did not suggest that rehabilitation of the oustees was an

essential part of any process of compulsory acquisition so as

to render iilegal any acquisition that is not accompanied by

such measure. He did not pitch his case that high and in our

opinion rightly so. The decisions of this Court in New

Reviera Coop Housing Society and Anr. v. Special Land

Acquisition Officer and Ors. 1996 (1) SCC 731 and

Chameli Singh and Ors. v. State of U.P. and Anr. 1996

(2) SCC 549 have repelled the contention that rehabilitation

3

of the property owners is a part of the right to life

guaranteed under Article 21 of the Constitution so as to

render any compulsory acquisition for public purpose bad for

want of any such measures. In New Reviera’s case (supra)

this Court held that if the State comes forward with a

proposal to provide alternative sites to the owners, the Court

can give effect to any such proposal by issuing appropriate

directions in that behalf. But a provision for alternative sites

cannot be made a condition precedent for every acquisition

of land. In Chameli Singh’s case (supra) also the Court

held that acquisitions are made in exercise of power of

eminent domain for public purpose, and that individual right

of ownership over land must yield place to the larger public

good. That acquisition in accordance with the procedure

sanctioned by law is a valid exercise of power vested in the

State hence cannot be taken to deprive the right to

livelihood especially when compensation is paid for the

acquired land at the rates prevailing on the date of

publication of the preliminary notification. There is thus no

4

gainsaying that rehabilitation is not an essential requirement

of law for any compulsory acquisition nor can acquisition

made for a public purpose and in accordance with the

procedure established by law upon payment of

compensation that is fair and reasonable be assailed on the

ground that any such acquisition violates the right to

livelihood of the owners who may be dependant on the land

being acquired from them.

What Mr. Gupta contended was that the State

Government had formulated a Land Pooling Scheme for

rehabilitation of the oustees, benefit whereof could be

extended to the appellants. He urged that the policy

formulated by the State was in consonance with the

observations made by this Court in Bondu Ramaswamy v.

Bangalore Development Authority and Others where

this Court had clearly recognized the need for taking

corrective measures to reduce the hardship which the

landowners suffer on account of absence of any ameliorative

schemes. He urged that while the scheme already framed

4

substantially conforms to what this Court has suggested in

the above judgment, the same is prospective in its

operation. This Court could, argued the learned counsel,

make the scheme applicable to the appellants specially when

the respondents are in a position to give redress to the

appellants by allotting residential and commercial sites in

other sectors developed in and around Mohali.

In Bondu Ramaswamy’s case relied upon by Mr.

Gupta this Court noted the frequent complaints and

grievances made in regard to the prevailing system of

acquisition governed by the Land Acquisition Act, 1894. One

of the areas in which this Court noticed dissatisfaction

among the landowners is the absence of any rehabilitatory

measures. This Court noted that several avenues for

providing rehabilitation and economic security to landowners

were available such as provision for employment, allotment

of alternative lands, housing and safe opportunities for

investment of compensation amount to generate stable

4

income. The acquisitions were for that purpose classified by

this Court into the following three categories:

(i)Acquisitions for the benefit of the general public or

in national interest. This will include acquisitions

for roads, bridges, water supply projects, power

projects, defence establishments, residential

colonies for rehabilitation of victims of natural

calamities.

(ii)Acquisitions for economic development and

industrial growth. This will include acquisitions for

Industrial Layouts/Zones, corporations owned or

controlled by the State, expansion of existing

industries, and setting up Special Economic Zones.

(iii)Acquisitions for planned development of urban

areas. This will include acquisitions for formation

of residential layouts and construction of

apartment blocks, for allotment to urban middle

class and urban poor, rural poor etc.

The Court observed that in order to ensure a smooth

and litigation-free acquisition, beneficial to all concerned it

was necessary to evolve tailor-made schemes to make

acquisitions more acceptable to the landowners. This Court

observed:

“In the preceding para, we have touched

upon matters that may be considered to be

in the realm of government policy. We have

referred to them as acquisition of lands affect

4

the vital rights of farmers and give rise to

considerable litigations and agitations. Our

suggestions and observations are intended to

draw attention of the government and

development authorities to some probable

solutions to the vexed problems associated

with land acquisition, existence of which can

neither be denied nor disputed, and to

alleviate the hardships of the land owners. It

may be possible for the government and

development authorities to come up with

better solutions. There is also a need for the

Law Commission and the Parliament to revisit

the Land Acquisition Act, 1894 which is more

than a century old. There is also a need to

remind Development Authorities that they

exist to serve the people and not vice versa.

We have come across development

authorities which resort to ‘developmental

activities’ by acquiring lands and forming

layouts, not with the goal of achieving

planned development or provide plots at

reasonable costs in well formed layouts, but

to provide work to their employees and

generate funds for payment of salaries. Any

development scheme should be to benefit the

society and improve the city, and not to

benefit the development authority. Be that as

it may.”

To the credit of the State of Punjab we must say that it

has formulated a Land Pooling Scheme which is owner-

friendly and provides greater incentives for the owners to

readily give up their lands whenever the same are needed

4

for a public purpose. Difficulty, however, arises on account

of the fact that the scheme formulated and circulated by the

Government in terms of its letter dated 5

th

September, 2008

is only prospective in its operation. The scheme envisages a

kind of public-private partnership in the development of

areas involving acquisition of large extents of land. Not only

that in order that the scheme works effectively the

authorities for whom acquisition is being made will have to

take a broader initiative at the appropriate stage to make

provision for allocation to the owners of what is due to them

under the scheme. This can be done only when an

acquisition is tailored according to the scheme. The scheme

cannot be introduced after the acquisition and even

allotment process is over. A mechanical extension of the

scheme to acquisitions that have since become final cannot

help. Any such attempt would be a potential recipe for

considerable confusion and resultant litigation. In the

completed acquisitions no provision regarding allocation to

be made to the owners has been made. It is also not, in our

4

opinion, feasible at this point of time to super impose the

Land Pooling Scheme on the acquisition under challenge and

make a provision for allocation to the owners in the sectors

that are under development or those that have already been

developed. The extent of area available in other sectors for

such allotment and allocation is itself a matter regarding

which there is no material before us. That apart even when

the number of appellants before us is limited, any direction

for rehabilitation based on a retrospective operation of the

scheme would deprive owners of the benefit of such scheme

only on account of their acceptance of the acquisition

proceedings. Last but not the least is the fact that the

observations made in Bondu Ramaswamy’s case

regarding the desirability of providing for rehabilitatory

measures, may not strict sense apply in the present case

where the acquisition in question has been made for setting

up a knowledge city in sector 81 of SAS Nagar (Mohali) in

public and indeed national interest. The argument that this

Court could confine the benefit of retrospective application of

4

the scheme to the appellants only has not for all these

reasons appealed to us.

Mr. Gopal Subramaniam, however, fairly submitted that

the State Government would have no objection to the

appellants before us being relegated to a reference to the

Civil Court for determination of the compensation due to

them since others who have not challenged the acquisition

have secured such references. He urged that although no

applications have been made by the appellants seeking

reference to the Civil Court for determination of this just

compensation due to them, and although the time period

within which such applications could be made has expired

the respondent would have no objection to the petitioners

being permitted to make such applications and direct that on

such applications being made the Collector shall make a

reference to the Civil Court for determination of the

compensation payable to the owners. That is, in our opinion,

a reasonable offer which would ensure that the applicants do

not suffer on account of the pending litigation, or their

4

failure to make applications within the time available to

them.

In the result while we answer question No.3 in the

negative and consequently dismiss these appeals, we direct

that if the appellants make applications under Section 18 of

the Land Acquisition Act for reference of their claims for

higher compensation before the concerned Collector Land

Acquisition within a period of six weeks from today the

Collector shall make a reference to the competent Civil Court

for determination of the compensation payable to the

appellants. The Reference Court shall on receipt of the

reference expedite the disposal of the same. No costs.

………………………

……J.

(R.V.

RAVEENDRAN)

………… ……………… …J.

(R.M. LODHA)

………… ……………… …J.

4

(T.S. THAKUR)

New Delhi

September 29, 2010

4