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Tulsi Co-Operative Housing Society, Hyderabad Etc. Vs. State of A.P. and Ors. Etc. Etc.

  Supreme Court Of India Civil Appeal /6986-6987/1994
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PETITIONER:

TULSI CO-OPERATIVE HOUSING SOCIETY, HYDERABAD. ETC. ETC.

Vs.

RESPONDENT:

STATE OF ANDHRA PRADESH & ORS.

DATE OF JUDGMENT: 14/09/1999

BENCH:

K.T.Thomas, M.Srinivasan

JUDGMENT:

SRINIVASAN, J.

There are three sets of appeals. Civil Appeal Nos.

6986-87 of 1994 are filed by Tulsi Co-operative Housing

Society, Hyderabad (hereinafter referred to as the

`Society'). Civil Appeal Nos. 6988-6991 of 1994 are by the

State of Andhra Pradesh (hereinafter referred to as the

`Government'). Civil Appeal Nos. 6992-6993 of 1994 are by

Syed Azam (hereinafter referred to as the `landowner'). 2.

The Society entered into an agreement in April 1975 with the

land owner for purchase of an extent of 24 acres of land and

paid in advance a sum of Rs.20,000/-. In June 1975, the

Govt. issued a Notification under Section 4 (1) of the Land

Acquisition Act (hereinafter referred to as `Acquisition

Act') for acquiring an extent of 18.03 acres out of the

subject-matter of these proceedings for purposes of Housing

Project under HUDCO Scheme. The Notification included an

extent of 2 acres belonging to another person with which we

are not concerned. The Government also invoked urgency

clause under Section 17 (4) of the Acquisition Act and

dispensed with enquiry under Section 5A of the said Act.

The acquisition proceedings were at the instance of

Municipal Corporation of Hyderabad. The Urband Land

(Ceiling & Regulations) Act, 1976 (hereinafter referred to

as the `Ceiling Act') came into force on 17.2.1976. The

land owner and the Society filed an application in May 1976

for grant of exemption from the provisions of the Ceiling

Act under Section 20(1)(b) of the said Act. It was followed

by a similar application in June 1977. In April 1978 the

Government issued a Notification under Section 6 of the

Acquisition Act. In October 1978 the applications for

exemption filed under the Ceiling Act were rejected.

Towards the end of August 1979 further proceedings under

Section 9 of the Acquisition Act were taken by the

Government. Meanwhile, a fresh application for exemption

under the Ceiling Act was filed in December 1978. That was

partly granted by the Government to the extent of 14000 sq.

mtrs. of land. Another application was filed in May 1980

for grant of exemption of all the lands from the provisions

of the Ceiling Act. That was granted in September 1980 in

GOMS No. 4093. 3. The Notifications under the Acquisition

Act were challenged in two writ petitions - one by the

Society and the other by the land owner. By interim orders

passed by the High Court, further proceedings were stayed.

However, on 28.1.1982 both the writ petitions were

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dismissed. Two appeals were filed. The miscellaneous

petition for stay of further proceedings in acquisition

pending the appeals was dismissed by Division Bench on

4.2.82. The Government took possession of the lands on

12.2.1982. 4. It should be mentioned here that the

proceedings under the Acquisition Act were for the benefit

of Bagh Amverpet Welfare Society (hereinafter to be referred

to as `BAW Society'). The said BAW Society got impleaded as

party in the writ petitions in which the acquisition

proceedings were challenged. The writ appeals were referred

to a Full Bench which allowed the same by judgment dated

2.8.83. The acquisition proceedings were quashed.

Aggrieved by the said judgment BAW Society obtained Special

Leave and filed Civil Appeal Nos. 5784-85 of 1983. 5. In

June, 1983 the Government cancelled the exemption granted

under the Ceiling Act by GOMS No. 5964. The landowner and

the Society filed writ petitions 5498 and 6500 of 1983. 6.

The Civil Appeals filed by BAW Society came up for hearing

on 7.8.85 and the following order was passed:

"Mr. P.P. Rao commenced his arguments at 12.45 P.M.

and argued till 1.00 P.M. Thereafter Court asked Mr. Divan

to raise preliminary objections and Shri Divan argued from

2.00 P.M. to 2.25 P.M. Thereafter Mr. P.P. Rao resumed

his arguments.

After hearing him for a shortwhile the Court adjourned

the matter to 16.8.85 in order to enable the parties to

explore the possibility of a settlement on the basis that a

part of the land sought to be acquired is released from

acquisition and members of Bagh Amverpet Society may be able

to build on a part of the land and owners may also keep some

part of the land. We would request the concerned officer of

the Municipal Corporation of Hyderabd to take initiative in

this matter for bringing the parties at the negotiating

table and help them so that on the above basis or on any

other basis which may be acceptable to the parties so that

settlement may be arrived at".

7. When the matters came up again on August 23, 1988

this court passed an order holding that the Acquisition

proceedings were valid and the Writ Petitions filed by the

landowner and the society challenging the same were rightly

dismissed by the Civil Judge. This court held that the

appellate judgment of the Full Bench of the High Court could

not be sustained and the Acquisition proceedings had to be

revived. In the same order, the court referred to the

suggestions made on the earlier ocassion on 7.8.1985 for

effecting a settlement between the parties and set out the

subsequent events in the following words:-

"Pursuant to the view expressed by the court, the two

societies have filed terms of settlement, which are on

record. The State Government of Andhra Pradesh which also

has filed independent appeals against the same appellate

judgment of the High Court has agreed to accept the terms of

settlement and their counsel states that fact to us in

Court. While other terms are acceptable, one of the terms

regarding the valuation of the land to be determined by

Government requires alteration. Learned counsel for the

appellant too has agreed to offer at the rate of Rs.3 lacs

per acre and that term is acceptable to the writ petitioners

respondents as also the landowner. In view of the fact the

parties have agreed to the said amount of Rs.3 lacs per acre

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as the value of the land, under acquisition, the terms in

the settlement for fixation of the compensation shall be

substituted by the offer made by Mr. Iyer for the

appellant. All parties agree to these terms being altered

by us. Mr. Iyer has further agreed that the entire amount

of compensation for 9 acres and 1-1/2 gunthas, which under

the terms of settlement would be available to the appellants

shall be paid at the rate of Rs.3 lacs per acre (all

liabilities included) within three months hence. Failing

payment of this amount within the time undertaken, interest

at 15% payable on the amount shall be payable. This order

shall not be effective until counsel for the State of Andhra

Pradesh takes instructions and files a memorandum within a

week from today that Government including the Urban Ceiling

authorities accept this arrangement. After the State

indicates its ratification, the matter shall be placed for

further directions on 31st August, 1988 in the Chamber for

further directions".

8. The matter was posted on 31.8.1988 and the Court

passed the following order:-

"When we made the order on 23rd August, 1988, the

letter of Secretary, Housing, Municipal Administration &

Urban Development Deptt. Govt of Andhra Pradesh dated

15.2.88 was not placed before us. We find, that letter

specifically refers to the proceedings before this Court and

the terms of compromise and indicate Government's reaction

and response thereto. Counsel for the parties suggest that

we should modify our direction of August 23, 1988, taking

the compromise terms on record and proceed to dispose of the

dispute. Mr. TVSN Chari who has just appeared on behalf of

Govt. of Andhra Pradesh says that he may be given one

week's time to obtain instructions from the Govt. In these

circumstances, we adjourn the appeals to 13th September,

1988 to be taken up in Chamber at 1.30 p.m. ".

9. In the meanwhile, the Writ Petition filed by the

land owner challenging the cancellation of exemption granted

under the Ceiling Act was dismissed by the High Court on

30.6.1988. He filed S.L.P.(C) No. 1679 of 1989 in this

Court. The other Writ Petition filed by the Society namely

Writ Petition (C) No. 6500 of 1983 was withdrawn to this

Court to be heard along with Civil Appeal Nos. 5784-85 of

1983 and S.L.P(C) No. 1679 of 1989. That was taken on file

as Transfer Case No. 29 of 1989. All the matters were

heard together and the final order was passed on 17.8.1990

after setting out the facts and extracting the relevant

portions of the earlier order dated 7.8.1985, the court

said:

"This Court, however, gave time to the counsel for the

State of Andhra Pradesh to take instructions as to the

application of the Urban Land Ceiling Act as exemption

granted under Section 20 had been withdrawn in June, 1983.

The State of Andhra Pradesh thereafter did not accept the

compromise by taking the stand that proceedings under the

Urban Land Ceiling Act were pending and in view of the fact

that there was no exemption, the property was liable to vest

in Government under the Act as surplus land".

Again after extracting a portion of the Order dated

23.8.1988 the Court said thus:

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"This order virtually disposed of the appeals but as

the parties were negotiating a settlement the Court did not

record a formal disposal of the disputes. If the settlement

does not fructify, the effect of our decision that the

acquisition proceedings are to revive, would be that the

claim to the land by Tulsi Cooperative Housing Society would

come to an end. In that event, at the most that Society

would only be entitled to such compensation as may be

awardable in law. If the acquisition proceeds the Bagh

Amverpet Welfare Soceity and the Municipal Corporation would

have to work out their mutual rights. Apart from these, the

two writ petitions challenging the withdrawal of the

exemption by order dated 23.6.1983 would also have to be

disposed of on the merits. The owner's application has been

dismissed upon the High Court taking the view that the

matter was before this Court and, therefore, the High Court

would not entertain the dispute. The challenge by Tulsi

Cooperative Housing Society against the said withdrawal was

before the High Court for adjudication. In view of the fact

that the owner's writ petition was dismissed not on merits

but on other considerations, we are of the view that the

said dismissal should be vacated and that writ petition

should be heard along with Writ Petition No. 6500/83 as a

common question arises for determination. We, therefore,

set aside the order of the High Court dated 13th of June,

1988, and direct that the said writ petition shall be

disposed of afresh on merits.

We are of the view that the entire litigation should

go back to the High Court for appropriate disposal. The

transferred writ petition, therefore, shall also go back to

the High Court and shall be dealt with as Writ Petition No.

6500 of 1983. The two petitions challenging the withdrawal

of exemption shall be clubbed together and be heard. The

proposals undertaken relating to a settlement in regard to

the 18 acres and 3 gunthas of land may be considered by the

High Court in the light of all relevant material and

circumstances. If the High Court is of the opinion that the

matter should be settled and the entire land of the owners

amounting to 18 acres and 3 gunthas should be divided

between the two Societies, it will be free to do so if

Government also agrees thereto. Since that arrangement

would be with the consent of the State Government it would

in such an event be open to the High Court to nullify the

acquisition. The observations which we have made at

different stages during the pendency of the proceedings in

this Court may not be taken to be expression of opinion on

the merits and the High Court would be free to deal with the

matter in its own discretion and in accordance with law.

In the event of the settlement not coming through the

acquisition proceedings would continue under the law and be

concluded by the Land Acquisition Officer in accordance with

law. In the event of the acquisition working out, the two

writ petitions against the withdrawal of exemption would not

be sustainable as the land would vest in Government as a

result of acquisition. It would be open to the Government

of the acquiring authority to take into account the effect

of the laws of urban ceiling.

The civil appeals are remitted to the High Court

limited to the consideration of the proposals for settlement

in the light of the observations hereinabove. Otherwise,

they must be taken to have been concluded in this Court on

our finding that acquisition proceedings are valid and shall

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be entitled to continue. The special leave petition of Azam

is disposed of with a direction that the writ petition in

the High Court shall be re-heard. The transferred writ

petition is remitted to the High Court to be disposed of as

Writ Petition No.6500 of 1983. The hearing of the writ

petition would depend upon the fate of the settlement as

indicated above".

10. After remand, the High Court by its judgment

dated 21.11.1992 dismissed the two Writ Appeals under the

Acquisition Act and disposed of the two writ peti- tions

under the Ceiling Act with the following directions: "1)

The Land Acquisition proceedings covered by the Sec. 4(1)

notification issued in G.O.Rt. No. 68 dated 4.6.75 in

respect of Ac.18-03 gunthas of land shall revive and be

completed as expeditiously as possible preferably within

three months from today, the beneficiaries being the 374

members of the Bagh Amverpet Welfare Association who have

already remitted a total sum of Rs.40,20,649.04.

2) The compensation amount the land owners are

entitled to shall be limited only to Rs.25,49,131.75 and

nothing more.

3) M/s. Tulsi Co-operative Housing Society is at

liberty to work out its rights vis-a-vis the land owners.

4) The applications filed under Sec.20 of the

U.L.C.Act seeking exemptions from the operation of the Act

and now pending with the Government since 1976 shall be

disposed of as indicated supra". 11. Aggrieved by the said

judgment, the Society has filed Civil Appeal Nos. 6986-87

of 1994. The Government has filed Civil Appeal Nos.

6988-91 of 1994 while the Land Owner has filed Civil Appeal

NOs. 6992-93 of 1994. All the above appeals were heard

together. 12. Mr. D.D.Thakur, the learned senior counsel

for the Society contended that the High Court has failed to

decide the crucial question arising in this case, though

this Court remanded the matter for that purpose. According

to him the facts and circumstances of the case proved a

complete concluded tripartite compromise among the Society,

the Government and BAW Society. He took us through some of

the documents which came into existence after this Court

passed the Order dated 7.8.85 and adjourned the matter for

effecting a settlement. He also relied upon the memo of

compromise and the petition filed in this Court by BAW

Society for granting sanction to the compromise arrived at

between the parties. It was contended that the records

established that the Government had also agreed to the said

compromise whereby the lands which were the subject-matter

of the acquisition were to be divided into two halves, one

to be taken by the Society and the other by the BAW Society.

He argued that even if this Court holds that there was no

express agreement on the part of the Government, the same

could be inferred from the available records. Hence it

should be held that there was a concluded compromise to

which the Government was a party by implication. Learned

counsel also invoked the doctrine of legitimate expectation

and contended that the same should be applied in the present

case and the Court should not allow the Government to go

back upon the concluded agreement. 13. We are uenable to

accept any of the aforesaid contentions. The Order passed

by this Court on 17.8.90 is itself sufficient to negative

the above arguments. In fact, the said order precludes the

Society from contending that there was a concluded

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compromise. If there was such a compromise it ought to have

been pressed into service before this Court and if the same

had been accepted, there would have been no necessity for a

remand. On the other hand, the following observation in the

Order of this Court shows clearly that there was no

concluded compromise and this Court proceeded only on that

footing: "If the High Court is of the opinion that the

matter should be settled and the entire land of owners

amounting to 18 acres and 3 gunthas should be divided

between the two societies, it will be free to do so if

Government also agrees thereto". The next sentence in the

order of this Court reads as follows:- "Since that

arrangement would be with the consent of the State

Government it would in such an event be open to the High

Court to nullify the acquisition". 14. The above two

observations show that if a compromise was to be effected it

was only to be brought into existence after the said order

of this Court and only if the Government consented thereto.

Admittedly, the Government did not express any consent after

the said order of this Court and on the other hand,

vehemently opposed the proposed settlement between the

parties. The contention that there was a concluded

compromise to which the Government was party is untenable in

view of the aforesaid observations in the order of remand

made by this Court on 17.8.90. We have no hesitation at all

to hold that the view expressed by the High Court in this

regard is correct and there was no necessity for the High

Court to decide to the question whether there was a complete

concluded compromise. 15. In view of the said position we

consider it unnecessary to deal with the contention of

learned counsel based on the provisions of Order 23 Rule 3

C.P.C. and Rule 24 of the Andhra Pradesh High Court Rules.

Nor is it necessary to refer to Section 13 of the Contract

Act relied on by the learned counsel. There is also no

warrant in this case to invoke the doctrine of legitimate

expectation. 16. The learned counsel for the Society

contended that in any event the sale in favour of the

Society of an extent of 5 acres of land comprising lands

other than the subject- matter of the acquisition

proceedings was valid and should be upheld. That question

is wholly extraneous to the present proceedings and does not

arise for our consideration. In these proceedings we are

concerned only with the validity of the acquisition

proceedings and the validity of the order of the Government

cancelling the exemption granted under the provisions of the

Ceiling Act. 17. Learned counsel contended that the

cancellation of exemption under the Ceiling Act was

unsustainable and at any rate it was bad with reference to

the extent of 5 acres of land which did not form part of the

subject-matter of acquisition under the Acquisition Act.

There is no merit in this contention. The High Court has

considered in detail the question whether the cancellation

of exemption under the Ceiling Act was valid or not. The

High Court has found that there was ample justification for

cancellation of the exemption. It has been found that the

land-owner as well as the Society had violated the

conditions subject to which exemption was granted. As the

High Court has dealt with the matter at length and upheld

the cancellation of exemption, it is unnecessary for us to

repeat the reasoning of the High Court. We do not find any

justification whatsoever to interfere with the conclusion of

the High Court that the cancellation of exemption was valid

and that the writ petitions filed by the land-owner and the

Society were liable to be dismissed. 18. The next

contention of learned counsel for the Society was that the

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land acquired under the Acquisition Act should be

distributed equitably not merely among the members of BAW

Society but also among the members of the appellant Society.

He took exception to the direction contained in the judgment

of the High Court that the beneficiaries of the proceedings

were 374 members of the BAW Society who had already remitted

a total amount of Rs.40,20,649.04. This particular

contention urged by the learned counsel is also supported by

learned counsel for the State Government which has filed

Civil Appeal Nos.6988-91/94. In fact, learned Senior

Counsel Mr. P.A. Chaudhary appearing for the Government

raised a contention that the lands acquired should be

utilised for public purposes other than those for which the

lands were acquired. He argued that the lands should be

kept as water tank and be utilised as such. 19. While we

find justification in the contention put forward by the

learned counsel for the Society that the High Court has

exceeded its jurisdiction in giving a direction confining

the benefit of the acquisition proceedings to the 374

members of the BAW Society, we are unable to accept the

extreme contention urged by the learned senior advocate for

the Government that the land should be permitted to be

utilised for purposes other than those for which it was

acquired. Once we uphold the validity of the proceedings

for acquisition under the Acquisition Act, it has to follow

that the lands have to be utilised for the purposes for

which they were acquired. We would set aside Direction No.1

contained in the penultimate para of the judgment of the

High Court and substitute it with a direction that the lands

acquired under the Acquisition Act should be properly

utilised by the Government in order to achieve the purpose

for which they were acquired. The Government may nominate a

suitable Committee comprising at least three Secretaries to

the Government for the purpose of carrying out the objects

of the acquisition in an appropriate manner.

20. Mr. Gopal Subramaniam, learned senior counsel

for the land owner addressed his arguments against Direction

No.2 given by the High Court in the impugned judgment. By

the said direction the High Court has held that the

compensation amount to which the land owner is entitled

shall be limited only to Rs.25,49,131.75 and nothing more.

Learned counsel submitted that the validity of the

acquisition proceedings having been upheld, the Court has no

jurisdiction to fix the compensation ignoring the specific

procedure prescribed in the Acquisition Act. It was also

his contention that the High Court arrived at the figure

arbitrarily on a wrong premise that there were some special

equities in favour of the members of the BAW Society and the

price of the land should be fixed at Rs.25 per sq. yd. It

was pointed out by him that there was no material before the

High Court for fixing the market value of the land on the

date of the notification under Section 4(1) of the

Acquisition Act and in any event, the parties had no

opportunity to place the relevant evidence before the Court

to enable it to fix the market value. 21. In our view, the

contention is well founded and unanswerable. Once the

proceedings under the Acquisition Act have been held to be

valid, the prescribed procedure in the Act for fixing the

compensation payable to the land owner should have been

followed and the High Court could not usurp the functions of

the hierarchy of authorities constituted under the Act. The

two reasons given by the High Court for taking up the task

of fixing the compensation upon itself are that the

litigation should not be allowed to drag on any further and

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that there are special equities in favour of the members of

the BAW Society. Neither reason is sustainable. The fact

that the proceedings have been pending for long would not

justify the Court to exceed its jurisdiction. The question

whether there are special equities in favour of the members

of the BAW Society and whether such equities would be

relevant at the time of fixing the market value of the land

under the provisions of the Acquisition Act are matters to

be decided by the concerned authorities in accordance with

the procedure prescribed in the Act. Hence the conclusion

of the High Court fixing the compensation for the land at

Rs.25,49,131.75 and the direction that the land owners are

not entitled to anything more has to be upset. 22. Learned

counsel also pointed out the facts and circumstances in the

case which speak against the contentions urged by Mr. D.D.

Thakur. It is unnecessary for us to refer to them as we

have already dealt with the said contentions and found that

they are not sustainable. 23. Mr. Gopal Subramaniam next

contended that the High Court is wrong in holding that the

Government can proceed under the provisions of the Ceiling

Act as the latter are over-riding and will have effect

notwithstanding any other provision of law. According to

him once the land had vested in the Government under the

provisions of the Acquisition Act, before vesting under the

Ceiling Act could take place, there is no question of

withdrawing the proceedings under the Acquisition Act and

proceeding further under the provisions of the Ceiling Act.

It was contended that the High Court has mis-understood the

ruling of this Court in Dattatraya Shankarbhat Ambalgi and

others versus State of Maharashtra and others AIR 1989

Supreme Court 1796 and pointed out that in the said case,

the land had vested in the Government under the Ceiling Act

pursuant to the final statement under Section 9 of the said

Act. It was submitted that in the present case such stage

under the Ceiling Act had not reached. There is

considerable force in this contention of the learned

counsel. But it is unnecessary for us to pronounce on the

said contention in view of the categoric statement made by

the learned senior advocate for the Government that he has

obtained written instructions from the Government that the

compensation in the present case would be paid under the

provisions of the Acquistion Act and the provisions of the

Ceiling Act would not be invoked therefor. 24. As a matter

of fact, the judgment of the High Court appears to be

somewhat inconsistent in this respect. The High Court has

upheld the cancellation of exemption under the Ceiling Act

and dismissed the writ petitions filed by the land-owner and

the Society. The High Court has also upheld the validity of

the land acquisition proceedings and has gone to the extent

of holding that the beneficiaries of the acquisition were

374 members of the BAW Society. The High Court has further

held that the compensation amount paybale to the land owners

shall be limited to Rs.25,49,131.75. In that situation,

there was no necessity for the High Court to express its

opinion that the provisions of the Ceiling Act were not

excluded by the acquisition proceedings and that they were

over-riding. The conclusion of the High Court on that

question is wholly unnecessary for the prupose of this case

and we set aside the same. We make it clear that we do not

express any opinion on the question of law in the present

case in view of the statement made by the learned senior

advocate for the Government and recorded as above. 25. The

High Court has chosen to issue a direction which is

Direction No.4 that the applications filed under Section 20

of the Ceiling Act seeking exemption from the operation of

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the Act and pending with the Government since 1976 shall be

disposed of as indicated in the judgment. We do not

understand how such a direction could be issued in the

present case which is between the concerned parties. The

direction relates obviously to parties who were not before

the Court in the present case. It is for the Government to

consider applications for exemption and dispose of the same

in accordance with law. 26. We have already adverted to

the contention put forward by learned senior counsel for the

Government in C.A. Nos.6988-91/94 and said that it was not

possible to accept the extreme contention. Learned counsel

for the BAW Society urged that the procedings for

acquisition were exclusively for the benefit of the members

of the said society and they had deposited the price of the

land as demanded by the Municipal Corporation several years

back. It was argued that the lands could not be given to

any person other than the members of the said Society. Even

in the order passed by this Court on 17.8.1990 remanding the

matter to the High Court, it was made clear that if the

acquisition proceeded, the BAW Society and the Municipal

Corporation would work out their mutual rights. Hence, it

is unnecesary for us to express any opinion on the claim

made by the BAW Society. As observed already by us the

Government shall take appropriate proceedings by appointing

a suitable Committee to utilise the lands acquired

appropriately for the purposes for which they were acquired.

27. In the result, the Civil Appeals are disposed of

with the following directions: (I) The directions contained

in the judgment of the High Court are set aside;

(II) The land acquisition proceedings covered by the

Notification under Section 4(1) of the Acquisition Act

issued in G.O.Rt. No.68 dated 4.6.75 in respect of 18 acres

03 guntas of land stand revived and shall be completed as

expeditiously as possible within a period of three months

from today; (III) The concerned authorities constituted

under Acquisition Act shall decide the compensation payable

to the land owner in accordance with the provisions of the

Act.; (IV) The Government shall nominate a Committee

comprising at least three Secretaries to the Government for

distributing the acquired land equitably among deserving

persons in order to carry out the purposes of the

acquisition and to balance the equities between various

persons whether they belong to one or the other society or

are not members of either society.; (V) M/s. Tulsi

Cooperative Housing Society is at liberty to work out its

rights as against the land owner in appropriate proceedings;

(VI) Applications under Section 20 of the Ceiling Act

seeking exemption from the operation of the Act said to be

pending with the Government since 1976 shall be disposed of

in accordance with law as expeditiously as possible and

preferably within a period of three months from today.

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