Punalur Paper Mills Ltd. vs West Bengal Mineral Development … on 1 March, 2021


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Supreme Court of India

Punalur Paper Mills Ltd. vs West Bengal Mineral Development … on 1 March, 2021

Author: Rohinton Fali Nariman

Bench: Rohinton Fali Nariman, B.R. Gavai

                                                                          REPORTABLE


                                        IN THE SUPREME COURT OF INDIA
                                         CIVIL APPELLATE JURISDICTION

                                       CIVIL APPEAL NOS. 738-739 OF 2021
                                     (Arising out of SLP (C) Nos. 9834-9835 of 2020)


                         PUNALUR PAPER MILLS LTD.                            …APPELLANT

                                       Versus

                         WEST BENGAL MINERAL DEVELOPMENT
                         AND TRADING CORPORATION LTD. & ORS.              ...RESPONDENTS



                                                     WITH

                                      CIVIL APPEAL NOS. 740-741 OF 2021
                                     (Arising out of SLP (C) Nos.9837-9838 of 2020)

                                                     AND

                                       CIVIL APPEAL NOS. 742-744 OF 2021
                                    (Arising out of SLP (C) Nos.10581-10583 of 2020)


                                                  JUDGMENT

R.F. Nariman, J.

1. Leave granted.

2. In the facts of these appeals, the entire second floor of premises no. 13,
Signature Not Verified

Digitally signed by R
Natarajan
Date: 2021.03.01
16:52:03 IST
Reason:

Nellie Sengupta Sarani (Lindsay Street), Calcutta [“the Premises”],

1
measuring approximately 7500 square feet, owned by Punalur Paper

Mills Ltd. [“Appellant”], was requisitioned under the West Bengal

Premises Requisition And Control (Temporary Provisions) Act, 1947

[“West Bengal Requisition Act”] on 16.08.1973. Pursuant to certain

judgments of this Court, section 10B was inserted in the West Bengal

Requisition Act by way of an amendment on 31.03.1987. The said

section reads as follows:

“10B. Notwithstanding anything contained in section 10 or
section 10A, the State Government shall release from
requisition any property requisitioned or deemed to be
requisitioned under this Act on or before the expiry of a
period of twenty-five years from the date of such requisition:

Provided that the benefit of this section shall not be
available until after the expiry of a period of five years from
the date of coming into force of the West Bengal Premises
Requisition and Control (Temporary Provisions) (Second
Amendment) Act, 1986.”

3. As a result of the operation of section 10B of the West Bengal

Requisition Act, any property requisitioned under the Act had to be

released by the State Government on or before the expiry of a period

of 25 years from the date of requisition. For the Premises, this 25-year

period ended on 15.08.1998, obligating the State to release the

Premises. It is common ground between the parties that the Premises

was not in fact released and physical possession remained with the

2
West Bengal Mineral Development and Trading Corporation Ltd.

[“WBMDTCL”].

4. Subsequent to the lapse of such period, by way of a notification under

section 4 of the Land Acquisition Act, 1894 [“Land Acquisition Act”],

published on 12.08.1999, the Premises was sought to be acquired for

the public purpose of providing the permanent office accommodation

of WBMDTCL. This notification of 12.08.1999 was challenged in Writ

Petition No. 1045 of 2000 filed on 18.04.2000 before the High Court of

Calcutta by the Appellant, who owned the said Premises. It may also

be mentioned that Writ Petition No. 1042 of 2000 was also filed by the

Appellant on 17.04.2000, seeking handover of vacant possession of

the Premises since the 25-year period prescribed by section 10B of

the West Bengal Requisition Act had ended.

5. By an order dated 22.06.2000, in Writ Petition No. 1042 of 2000, a

learned Single Judge of the High Court of Calcutta held as follows:

“The learned counsel Mr. Bhattacharji appearing on behalf
of the Respondent no. 4 as well as the learned counsel Mr.
Dutt appearing on behalf of the State submitted that three
months time should be granted to the Respondent no. 4 to
vacate the premises in question without prejudice to its
rights to take such appropriate legal steps as are available
to it to acquire the property in question, accordingly such an
order is passed with the consent of the learned counsel
appearing for the petitioners. The learned counsel have
also submitted that [insofar] as the compensation is

3
concerned the same may be decided by the Court on
materials to be placed by them by filing separate affidavit.

Let such affidavit be filed within three weeks from the date,
reply, if any, within two weeks thereafter with liberty to
mention the matter before me as and when I will be sitting
singly.

The writ petition is kept alive only for the purpose of
determination of the amount of compensation to be paid by
the Respondent No. 4 to the Writ Petitioner for occupying
the property in question subsequent to coming to an end of
the order of requisition until delivery of possession thereof
is effected in terms of this order. This order has been
passed by consent of all the parties and the counsel
appearing for parties have signed a copy of the same in
acknowledgement thereof and the same is kept with the
record.”

6. On the same day, in Writ Petition No.1045 of 2000, the Single Judge

passed the following order:

“The interim order already granted is vacated as the
learned counsel for the petitioner does not press for
continuation of the same after having seen the newspaper
publication of the notification in question. It is made clear
that Court has not decided any issue in the instant writ
petition.

Affidavit-in-opposition to this writ petition shall be filed
[in] 3 (three) weeks from date, reply, if any, within 2 (two)
weeks thereafter and liberty to mention the matter before
the appropriate Bench.

All parties to act on a signed copy of this dictated order
on the usual undertaking.”

4

7. Without pursuing the section 4 notification of 12.08.1999, another

notification for the same property was issued on 04.08.2000, under

section 4 of the Land Acquisition Act, this time invoking the urgency

provision under section 17(4) thereof, as follows:

“In exercise of the powers conferred by Sub-Section (4) of
Section 17 of the Land Acquisition Act, 1894 (Act I of 1894),
the Governor is pleased to direct that the provisions of
Section 5A of the Act shall not apply to the lands as
described in the schedule above to which in the opinion of
the Governor, the provisions of Sub-section (1) of Section
17
of the said Act are applicable”

8. A declaration under section 6 of the Land Acquisition Act soon followed,

on 11.08.2000. These two notifications became the subject of

challenge in Writ Petition No. 3003 of 2000 filed by the Appellant on

05.09.2000, on the ground that the urgency provision was improperly

invoked, and thus the composite notification dated 04.08.2000, under

section 4 read with section 17 of the Land Acquisition Act, would have

to be set aside.

9. A learned Single Judge of the High Court of Calcutta, by an order dated

16.01.2017, disposed of all three writ petitions, namely, Writ Petition

Nos. 1042, 1045 and 3003 of 2000. The learned Single Judge, noting

that the urgency provision had wrongly been invoked in the facts of

this case, followed the judgments of this Court and struck down the

composite notification under section 4 read with section 17 of the Land

5
Acquisition Act, dated 04.08.2000. Consequently, he directed

WBMDTCL to vacate the Premises within three months and handover

vacant possession to the Appellant.

10. On appeal, the learned Single Judge’s judgment and order dated

16.01.2017 was set aside by consent of the parties, and the writ

petitions were to be heard de novo in the six different appeals that

were filed by the Land Acquisition Collector, WBMDTCL and the First

Land Acquisition Collector. As a result, a de novo hearing of the writ

petitions was taken up by the Division Bench of the High Court of

Calcutta, which passed the impugned judgment and order dated

30.09.2019. After setting out the facts of this case, the questions that

the Division Bench put to itself were as follows:

“5. After hearing the rival contentions and considering the
materials on record, we are of the view that the moot
questions to be considered while disposing of the three writ
petitions and the six appeals arising therefrom are as
follows:

a. After the expiry of 25 years from the date of
requisition, were the appellants liable to vacate
the requisitioned property being the said
property?

b. Is respondent / writ petitioner no. 1 entitled to
any compensation on WBMDTCL having
overstayed at the said property after expiry of 25
years from the date?

c. In the facts of the instant case, could the said
respondents acquire the said property by

6
applying the special powers in case of urgency
as provided in section 17 of the 1894 Act
particularly when they had proceeded to acquire
the property by following the normal method and
had in fact given a notice under section 4 of the
1894 Act on 12th August, 1999?

d. Could the right of objection available to the
respondent / writ petitioner no.1 be taken away in
the facts and circumstances of the instance
case?”

11. The Division Bench held:

“6. We take up the two issues together as they are inter-
related in the instant case. A conjoined reading of the letters
dated 25th March, 1997 issued by WBMDTCL and 23rd
September, 1997 issued by the Land Acquisition Collector,
it will appear that both the State and the WBMDTCL were
aware of the fact that on completion of 25 years from the
date of requisition, the requisitioned property had to be
released from requisition and had to be vacated. The
provisions of section 10B of the said Act also say so and,
as such, in the letter dated 23rd September, 1997, the Land
Acquisition Collector had specifically indicated that the
requiring body has to vacate possession after completion of
25 years of requisition. Despite such specific knowledge,
WBMDTCL did not vacate the said property on expiry of
15th August, 1998. The said State / respondents who had
requisitioned the property also did not take any step to have
the said property released of the requisition and possession
be returned to the owner of the same.

It also appears that WBMDTCL have been enjoying the
said property without paying any money for the same
subsequent to the expiry of 25 years.”

7

12. Referring to the order of the Single Judge dated 22.06.2000, the

Division Bench then went on to hold:

“It further appears that on 22nd June, 2000 at the invitation
of the State / respondents and WBMDTCL, an order was
passed giving three months’ time to vacate the said
property with the consent of the petitioner. It will also
appear that the compensation to be paid by the WBMDTCL
(respondent no.4 in the said writ petition) to the writ
petitioner for occupying the property in question
subsequent to coming to an end of the order of requisition
until delivery of possession thereof was left to be decided
by the Court. The writ petition being WP No.1042 of 2000
was kept alive only for the purpose of determining the
amount of such compensation. Affidavits were invited and
from the gamut of the said order dated 22nd June, 2000, it
is evident that the affidavits were called for also for the
purpose of determining the compensation. It will also
appear from the said order that the order to vacate the said
property was without prejudice to the rights of the State to
take such appropriate legal steps as available to it to
acquire the property in question. At the time when the said
order dated 22nd June, 2000 was passed, the section 4
notification and the objection under the provisions of
section 5A were already on record. The Court was
conscious about the same. The order thereof has to be
interpreted that the said property had to be vacated within a
period of three months from the date of the order and at the
same time, there was no embargo on the part of the State
to proceed with the acquisition. The view in favour of such
interpretation of the order dated 22nd June, 2000 is further
emboldened from another order, also passed on the same
day in WP No.1045 of 2000 when the Court vacated the
interim order earlier passed staying the hearing of the
objection filed by the respondent / writ petitioner no.1 in
terms of the provisions of section 5A of the 1894 Act. It is,

8
therefore, apparent that the Court while passing the two
orders had clearly meant that WBMDTCL had to vacate the
premises within three months from 22nd June, 2000 and, at
the same time, the State Authorities were free to proceed
with the acquisition proceeding initiated by publication of
the section 4 notice on 12th August, 1999 after hearing out
the objection filed by respondent / writ petitioner under the
provisions of section 5A of the 1894 Act.”

13. After referring to some of the judgments of this Court, the Division

Bench then concluded:

“13. The findings in these judgments, therefore, clearly
answer the question of the scope of judicial review raised
by the appellants. In the instant case, the property was
requisitioned in the year 1973 until a few months prior to
expiry of the 25 years period; no request was made for re-
requisitioning of the property. Receiving such request as
discussed hereinabove, the State / respondents gave a firm
view that the property has to be vacated on expiry of the
period of 25 years and the same cannot be re-requisitioned.

However, the State expressed a view that the property can
be acquired if a request to that effect is made. The State /
respondents, thereafter, proceeded to acquire the property
without invoking the extraordinary power available to the
Government under section 17(1) read with section 17(4) of
the said Act. So it is clear that at the relevant point, the
Government did not form an opinion as to invoking of the
urgency clause. The Government, therefore, was of the
view that the acquisition proceedings could wait for few
months for completion of an enquiry under section 5A of the
1894 Act. This is also evident from the steps taken by the
Government on issuance of notice under section 4 and
inviting objections under section 5A of the 1894 Act. After
amendment to the said Act of 1947 made in 1986 with the
introduction of section 10B, it was known to the WBMDTCL

9
being the requiring body as also the Government that on
expiry of 25 years, the property was to be released from
requisition. Even if we consider that a five years gap for the
release of the property after 25 years was available under
the said Act that takes us to the year 1991. There was
ample time between 1991 and 1998 when the 25 years
came to an end to acquire the property in the normal
procedure by conducting an enquiry if the WBMDTCL or the
Government was so keen in maintaining the registered
office of WBMDTCL at the said property or for providing the
said property to maintain the registered office of WBMDTCL
thereat. No steps for acquiring the property were taken for
all these years. The acquisition proceeding too under the
normal mode was commenced on 10th / 12th August, 1999.
Pursuant to such notification, objection under section 5 was
invited and the same was filed by the respondent / writ
petitioner no.1. During the time when the hearing of the
objection of section 5A of the 1894 Act was kept pending,
the respondents / writ petitioners approached this Court by
filing two writ petitions being WP Nos.1042 and 1045 of
2000 in the month of April, 2000. So the challenge to the
notification under section 4 was made within a reasonable
time period from the publication of the notification. The fact
situation at that material point clearly established that no
case of urgency was in the mind of the Government. Only
after the order of 22nd June, 2000, was obtained at the
invitation of the State / respondents and the WBMDTCL,
the three months period to vacate the said premises was
used to invoke the extraordinary powers of urgency to
dispense with the enquiry under section 5A of the 1894
Act.”

“15. The facts of the instant case are also not such that the
acquisition could not brook the delay for even a few weeks
or months. That apart and in any event, using the order
dated 22nd June, 2000 as a fact situation to invoke the
urgency clause smacks of mala fides and is, as such,

10
vitiated. We, therefore, set aside the order of acquisition
invoking the provisions of section 17(1) read with section
17(4)
of the 1894 Act. It is declared that the preliminary
notification under section 4 which was cancelled by
invoking the provisions of section 17(1) had stood lapsed
by efflux of time as no section 6 declaration followed within
a period of one year. This will, however, not prevent the
Government from initiating acquisition proceedings afresh,
if entitled to in law. The possession of the said property
should be vacated and possession thereof to be made over
to the respondents / writ petitioners within a period of three
months from date. These directions are peremptory.

16. The Chief Judge, City Civil Court at Calcutta shall also
assess the compensation / rent / occupational charges for
the period of 16th August, 1998 till the possession of the
said property is made over to the respondents / writ
petitioners. Section 11(1)(b) of the 1947 Act provides for the
same.

17. The writ petitions being WP Nos.1042, 1045 & 3003 of
2000 are disposed of in the light of the observations made
hereinabove.”

14. Ms. Liz Mathew, learned advocate appearing on behalf of the State of

West Bengal, assailed the impugned judgment of the Division Bench

by arguing that the order of the Single Judge dated 22.06.2000 had

made it clear that the State could take appropriate steps to initiate land

acquisition proceedings, which were then done pursuant to such order

on 04.08.2000. Taking shelter under this order, she therefore argued

that it would not be possible to strike down the notification under

section 4 read with section 17 of the Land Acquisition Act, since this

11
was done pursuant to the order dated 22.06.2000. For this purpose,

she relied upon the judgments of this Court in State of U.P. v. Keshav

Prasad Singh, (1995) 5 SCC 587 and State of A.P. v. Goverdhanlal

Pitti, (2003) 4 SCC 739.

15. Shri Mukul Rohatgi, learned senior advocate appearing on behalf of

the Appellant, stoutly refuted these arguments and relied upon certain

judgments of this Court which covered the issue in the Appellant’s

favour. In any case, he also argued that given the conduct of the

parties in not vacating the Premises by 15.08.1998 and continuing to

be in unauthorised possession till date, as well as not paying a single

paisa towards compensation, this Court ought not to entertain the

State’s appeals under Article 136 of the Constitution of India.

16. The judgments of this Court relied upon by Ms. Liz Mathew are

distinguishable from the facts of this case. In State of U.P. v. Keshav

Prasad Singh, (1995) 5 SCC 587, this Court dealt with a specific case

of urgency, namely, a mandatory injunction issued by a Civil Court to

demolish a compound wall and to restitute possession. This Court,

thus, had no difficulty in stating that there was a need for immediacy in

the case, as follows:

“5. The next question is whether the Government would be
justified in exercising its power under Section 17(4) and
dispense with the inquiry under Section 5-A of the Act.

Mandatory injunction issued by the civil court to demolish

12
the compound wall and to restitute possession to the
respondent had to be complied with. There is thus urgency.
The public purpose was obvious as the compound was
required to be retained to protect the safety of the office.
The object of Section 5-A enquiry was to show whether
there was no public purpose or the land was not suitable or
some other lands may be acquired. All these relevant and
related facts are redundant due to the facts of the case.”

17. Likewise, in State of A.P. v. Goverdhanlal Pitti, (2003) 4 SCC 739, on

the facts of the case, this Court held that the High Court of Andhra

Pradesh could not have struck down the acquisition of property on the

ground of mala fides only because the State had lost in eviction

proceedings and initiated acquisition proceedings, after giving an

undertaking to vacate a dilapidated 100-year old school building. This

Court therefore held:

“17. The High Court of Andhra Pradesh held the action of
acquisition of the property by the State as malicious in law
only because before passing of adverse orders by the court
against it, no action for acquisition of the building which was
in its occupation since 1954, was initiated. In our opinion,
even if that be the situation that the State as tenant of the
school building took no step to acquire the land before [the]
order of eviction and direction of the High Court, it cannot
be held that when it decided to acquire the building, there
existed no genuine public purpose. If only the possession of
the property could be retained as a tenant, it was
unnecessary to acquire the property. The order of eviction
as well as the direction to vacate issued by the High Court
only provide just, reasonable and proximate cause for
resorting to acquisition under the Land Acquisition Act.

Resort, therefore, to acquisition at a stage when there was

13
no other alternative but to do so to serve a genuine public
purpose which was being fulfilled from 1954 signifies more
a reasonable and just exercise of statutory power. Such
exercise of power cannot be condemned as one made in
colourable or mala fide exercise of it.”

18. This judgment is completely distinguishable also for the reason that

the urgency provision contained in section 17 of the Land Acquisition

Act was not invoked, it being held that the continuance of a school

served a genuine public purpose, which public purpose could not

suddenly be deemed to become non-existent, only because the State

had lost in eviction proceedings.

19. On the facts of this case, the impugned judgment of the Division

Bench is correct in law. In this case, the State was on notice from

31.03.1987, i.e., from the date of insertion of section 10B in the West

Bengal Requisition Act, that the Premises would have to be released

on or before 15.08.1998. This gave the State the time of 11.5 years to

act and acquire the Premises. Such acquisition could easily have been

done by way of a notification under section 4 of the Land Acquisition

Act before the lapse of the 25-year period, and would have also

preserved the valuable right contained in section 5A of the Land

Acquisition Act. As a matter of fact, as correctly held by the Division

Bench, long after the requisition period elapsed on 15.08.1998, the

State issued a notification under section 4 of the Land Acquisition Act,

14
without invoking any urgency provision. To then say that the urgency

provision could be invoked on account of the Single Judge’s order

dated 22.06.2000, is to attempt to infer from the said order, much more

than it actually said. Therefore, the Division Bench rightly held that at

best this order could possibly refer to the acquisition proceedings that

had already been initiated by the notification of 12.08.1999 under

section 4 of the Land Acquisition Act. In any case, this order could not

and did not wash away the lethargy of the State in initiating acquisition

proceedings, which ought to have been done before the 25-year

period elapsed, by preserving the valuable right contained in section

5A of the Land Acquisition Act, which could have been availed of by

the owner of the Premises, i.e., the Appellant.

20. The impugned judgment of the Division Bench is fortified by several

judgments. In Banwarilal & Sons Pvt. Ltd. v. Union of India, C.W.P.

No. 2385 of 1988 reported in 1991 Supp DRJ 317 [“Banwarilal (Delhi

HC)”], a Division Bench of the High Court of Delhi, vide an order dated

04.02.1991, quashed a similar notification in the context of a similar

provision contained in the Requisitioning and Acquisition of Immovable

Properties Act, 1952. The High Court of Delhi held:

“8. In the Notification challenged before us the only thing
that is stated is that the property was required for the
“residential use of government servants.” There is not a
whisper of what was the urgency to take immediate

15
possession and to deny the right of raising [objections] to
the owner under Section 5-A of the Act. The Notification
under Sections 4 and 17(1) in the present case, therefore,
stand vitiated for non-compliance of the requirement of
mentioning urgency in the Notification itself. What is more
objectionable is the fact that the building was already in
occupation of the officers of Delhi Administration and the
Administration knew that the Requisitioning and Acquisition
of Immovable Properties Act was to lapse on 10.3.1987.

Thus, they had sufficient time to make alternate
arrangement for the residence of their officers and there
was no urgency whatsoever for invoking the provisions of
Section 17(1). The provisions of Section 17(1) cannot be
utilised to cover up the laxity or lethargy of the
Administration to take appropriate steps in time for making
available alternate accommodation for its officers.”
(page 320)

“13. In Assam Sillimanita Limited v. Union of India (AIR
1990 SC 1417) the Supreme Court had appointed an
Arbitrator for determining the damages in case of unlawful
termination of a lease. Considering the fact that more than
three years have elapsed since the Requisitioning and
Acquisition of Immovable Property Act has lapsed, it would
be more just and appropriate that an Arbitrator is appointed
in the present case to determine the damages payable by
Delhi Administration instead of making the petitioners run to
the Civil Court for that purpose. We appoint Mr. T.V.R.
Tatachari, former Chief Justice, Delhi High Court, as an
Arbitrator who will enter upon the reference within four
weeks of the communication of this order to him. He may
make the Award within a period of four months thereafter.
The Arbitrator will not be obliged to give reasons for his
conclusions. The parties will be at liberty to produce their
valuers before the Arbitrator for the assessment of
damages, if they so desire. The petitioners as well as the
Delhi Administration will pay a sum of Rs. 10,000/- each to

16
the Arbitrator as the initial payment towards his fees. A copy
of this order [be] sent to the learned Arbitrator by the
Registry.”
(pages 321-322)

21. This judgment of the High Court of Delhi travelled to this Court, the

Special Leave Petition filed by the Union of India being dismissed on

21.03.1991. In other off-shoot proceedings as well, such as Union of

India v. Shakuntala Gupta, (2002) 10 SCC 694, the judgment in

Banwarilal (Delhi HC) (supra) was again confirmed on 14.11.2000. A

review against the aforesaid order met with the same fate in Union of

India v. Shakuntala Gupta, (2002) 7 SCC 98, in which this Court

dismissed the review on merits on 27.08.2002, stating:

“15. In any event the order dated 14-11-2000 was not
legally erroneous. The notification under Section 4 was a
composite one. The “opinion” of the Lt. Governor that the
provisions of Section 17(1) of the Act were applicable, as
expressed in the last paragraph of the impugned
notification, was relatable in general to the 14 properties
specified in the notification. The impugned notification was
quashed in Banwari Lal case [Banwari Lal & Sons (P) Ltd.

v. Union of India, DRJ 1991 Supp 317] inter alia on the
ground that the “opinion” of the Lt. Governor as expressed
in the notification was insufficient for the purpose of
invoking the provisions of Section 17(1) of the Act. This
ground was not peculiar to the premises in Banwari Lal
case [Banwari Lal & Sons (P) Ltd. v. Union of India, DRJ
1991 Supp 317] but common to all fourteen properties. The
urgency sought to be expressed in the impugned
notification cannot be held to be sufficient for the purposes
of Section 17(1) in this case when it has already been held

17
to be bad in Banwari Lal case. [See observations in Abhey
Ram v. Union of India
, (1997) 5 SCC 421 (para 11); Delhi
Admn. v. Gurdip Singh Uban, (2000) 7 SCC 296 (paras 53-

55)] The expression of urgency being one cannot be partly
good and partly bad like the curate’s egg. It must follow that
the acquisition in respect of the respondent’s premises as
mentioned in the notification which were sought to be
acquired on the basis of such invalid expression of
“urgency” cannot be sustained.”

22. These judgments were then followed in Union of India v. Krishan Lal

Arneja, (2004) 8 SCC 453 [“Krishan Lal Arneja”]. After setting out the

relevant provisions of the Land Acquisition Act, this Court held:

“16. Section 17 confers extraordinary powers on the
authorities under which it can dispense with the normal
procedure laid down under Section 5-A of the Act in
exceptional case of urgency. Such powers cannot be lightly
resorted to except in case of real urgency enabling the
Government to take immediate possession of the land
proposed to be acquired for public purpose. A public
purpose, however laudable it may be, by itself is not
sufficient to take aid of Section 17 to use this extraordinary
power as use of such power deprives a landowner of his
right in relation to immovable property to file objections for
the proposed acquisition and it also dispenses with the
inquiry under Section 5-A of the Act. The authority must
have subjective satisfaction of the need for invoking
urgency clause under Section 17 keeping in mind the
nature of the public purpose, real urgency that the situation
demands and the time factor i.e. whether taking possession
of the property can wait for a minimum period within which
the objections could be received from the landowners and
the inquiry under Section 5-A of the Act could be
completed. In other words, if power under Section 17 is not
exercised, the very purpose for which the land is being

18
acquired urgently would be frustrated or defeated. Normally
urgency to acquire a land for public purpose does not arise
suddenly or overnight but sometimes such urgency may
arise unexpectedly, exceptionally or extraordinarily
depending on situations such as due to earthquake, flood
or some specific time-bound project where the delay is
likely to render the purpose nugatory or infructuous. A
citizen’s property can be acquired in accordance with law
but in the absence of real and genuine urgency, it may not
be appropriate to deprive an aggrieved party of a fair and
just opportunity of putting forth its objections for due
consideration of the acquiring authority. While applying the
urgency clause, the State should indeed act with due care
and responsibility. Invoking urgency clause cannot be a
substitute or support for the laxity, lethargy or lack of care
on the part of the State administration.

xxx xxx xxx

21. One more aspect to be noticed is, as observed by the
High Court, that the properties in question continued to be
in possession of the appellants; in other words, there was
no urgency of taking immediate possession nor was there
any immediate threat of dispossessing them from the
properties. At the most, after the lapsing of the
Requisitioning Act on 10-3-1987, their possession over the
properties would have been unauthorised, maybe so long
they continued in unauthorised possession of the
properties, they were liable to pay damages for their
occupation for a few months during which period they could
have completed acquisition proceedings in the normal
course without resorting to provisions of Sections 17(1) and
(4) of the Act. During the course of the hearing, we
specifically asked the learned counsel for the appellants in
this regard, the only answer was that the appellants being
the Union of India and others did not want to remain in the
unauthorised possession of the properties. We are not

19
convinced by this reply so as to justify invoking urgency
clause to acquire the properties. Having regard to the facts
and circumstances of the case in these appeals, the
authorities could have completed acquisition proceedings in
a couple of months even after providing opportunity for
filing objections and holding inquiry under Section 5-A of
the Act if they were really serious.

22. In the objects and reasons of Act 20 of 1985, it is stated
that all the properties which were requisitioned prior to the
amendment of the Act in 1970 were required to be released
from requisition or acquired by 10-3-1985; although the
Government is expeditiously implementing the policy of
acquiring or releasing from requisition the requisitioned
properties, a number of them are expected to be needed by
the Government even after 10-3-1985 for public purposes;
the Ministry of Defence is taking action for either releasing
or acquiring the requisitioned properties. It was, therefore,
decided to extend the maximum period for which the
properties could be retained under requisition by a period of
two years. Thus, it is clear that the authorities were aware
that the properties were to be released or acquired and the
maximum period was extended up to two years for the
purpose. From 1985 to 1987 they had sufficient time to
acquire the properties in question in the usual course. They
had enough time to provide opportunity for filing objections
and holding inquiry under Section 5-A of the Act. There was
no need to invoke Section 17 of the Act. The office
memorandum dated 19-7-1979 extracted above shows that
the Executive Council took the decision in view of the
amendment in the Requisitioning and Acquisition of
Immovable Property Act, 1952 that all the
requisitioned/leased houses which were with the
Administration for more than 10 years were to be released
to their owners immediately and all the occupants of
requisitioned/leased houses were requested to furnish the
relevant information by 16-7-1979 failing which the officer

20
concerned will be liable for eviction from the requisitioned
house without provision for alternative accommodation.
Here again, it is clear that the authorities were in the know
of the situation in the year 1979 itself. Further, the minutes
of the meeting held on 8-4-1985 in the room of the
Secretary (PWD/L&D), Delhi Administration, Delhi show
that the position regarding all the requisitioned properties in
Delhi which were requisitioned under the 1952 Act was
reviewed. The said meeting was attended by: (1) Secretary
(PWD/L&D), (2) Joint Director (Training), (3) Additional
District Magistrate (Registration) and Under-Secretary (LA).
In the said meeting, it was decided that all the pre-1970
residential buildings which were partially requisitioned and
were not in full occupation of the Delhi Administration
should be derequisitioned in stages.

xxx xxx xxx

27. Thus, from the Statement of Objects and Reasons of
Act 20 of 1985, statement by the Minister concerned to the
Lok Sabha on 28-3-1985, the office memorandum
aforementioned and the minutes of meeting dated 8-4-
1985, it is sufficiently clear that the appellants were fully
aware that they had to make arrangements either for
acquiring the properties or derequisitioning them by making
alternate arrangement within a period of two years i.e. up to
10-3-1987 inasmuch as no further extension of the
Requisition Act was possible. Further having regard to the
observations made by this Court in the case of Vora [(1984)
2 SCC 337 : (1984) 2 SCR 693] , there would have been no
justification for the appellants to continue the properties in
question under the Requisitioning Act any more. If the
appellants were really serious in acquiring the properties in
question, they had almost 2 years’ time even after taking
the decision to acquire them or derequisition them within
which time, acquisition proceedings could be completed in
the usual course without depriving the respondents of their

21
valuable right to file objections for acquisition and without
dispensing with inquiry under Section 5-A of the Act.

xxx xxx xxx

29. Having regard to the facts and circumstances and the
material available on record, we are of the view that
invocation of urgency clause was without justification and
was untenable as held in Banwari Lal [Banwari Lal & Sons
(P) Ltd. v. Union of India, DRJ
1991 Supp 317 (Del HC)
[Ed.: This order of the High Court was affirmed by the
Supreme Court while dismissing the SLP (No. 4458 of
1991) in Union of India v. Banwarilal & Sons (P) Ltd. by its
order dated 21-3-1991 quoted in para 5 below. See also
para 11 below. See connected case at (2004) 5 SCC 304.]]
and Shakuntala Gupta [Union of India v. Shakuntala Gupta,
(2002) 7 SCC 98 [Ed.: See also the earlier order reported
at (2002) 10 SCC 694.]] . This Court in State of Punjab v.
Gurdial Singh
[(1980) 2 SCC 471] as to the use of
emergency power under Section 17 of the Act has
observed that: (SCC p. 477, para 16)

“[I]t is fundamental that compulsory taking of a
man’s property is a serious matter and the smaller
the man the more serious the matter. Hearing him
before depriving him is both reasonable and pre-
emptive of arbitrariness, and denial of this
administrative fairness is constitutional anathema
except for good reasons. Save in real urgency
where public interest does not brook even the
minimum time needed to give a hearing land
acquisition authorities should not, having regard to
Articles 14 (and 19), burke an enquiry under
Section 17 of the Act. Here a slumbering process,
pending for years and suddenly exciting itself into
immediate forcible taking, makes a travesty of
emergency power.”

22

30. In Om Prakash v. State of U.P. [(1998) 6 SCC 1]
referring to State of Punjab v. Gurdial Singh [(1980) 2 SCC
471] this Court in para 21 has observed that: (SCC pp. 23-

24)

“[A]ccording to the aforesaid decision of this Court,
inquiry under Section 5-A is not merely statutory
but also has a flavour of fundamental rights under
Articles 14 and 19 of the Constitution though right
to property has now no longer remained a
fundamental right, at least observation regarding
Article 14, vis-à-vis, Section 5-A of the Land
Acquisition Act would remain apposite.”

In the present appeals, the appellants have not been able
to show before the High Court any genuine subjective
satisfaction depending upon any relevant material available
to the State authorities at the time when they issued the
impugned notification under Section 4(1) of the Act and
dispensed with Section 5-A inquiry taking aid of Section
17(4)
of the Act. A Bench of three learned Judges of this
Court in Narayan Govind Gavate v. State of Maharashtra
[(1977) 1 SCC 133 : 1977 SCC (Cri) 49] has expressed that
Section 17(4) cannot be read in isolation from Sections 4(1)
and 5-A of the Act and has expressed that having regard to
the possible objections that may be taken by the
landowners challenging the public purpose, normally there
will be little difficulty in completing inquiries under Section
5-A
of the Act very expeditiously. In the same judgment, it is
also stated that: (SCC p. 148, para 38)

“The mind of the officer or authority concerned has
to be applied to the question whether there is an
urgency of such a nature that even the summary
proceedings under Section 5-A of the Act should
be eliminated. It is not just the existence of an

23
urgency but the need to dispense with an inquiry
under Section 5-A which has to be considered.””

23. Justifying the quashing of the notification under section 4 of the Land

Acquisition Act along with the invocation of urgency under section 17

thereof, this Court then concluded:

“35. The alternative argument urged on behalf of the
appellants that if the impugned notification suffers from
infirmity in relation to invoking urgency clause, it can be
quashed only to the extent of invoking the aid of Section 17
and the said notification can be sustained confining it to
Section 4 of the Act, cannot be accepted. Otherwise, the
same common notification stands quashed in respect of a
few parties as in the cases of Banwari Lal [Union of India v.
Banwarilal & Sons (P) Ltd., SLP (C) No. 4458 of 1991
dated 21-3-1991] and Shakuntala Gupta [Union of India v.
Shakuntala Gupta
, (2002) 7 SCC 98 [Ed.: See also the
earlier order reported at (2002) 10 SCC 694.]] and it stands
sustained in respect of others i.e. the respondents in these
appeals leading to anomalous situation. Added to this, if the
argument, as advanced on behalf of the Union, is accepted,
the notification under Section 17 of the Act invoking
urgency clause would stand quashed but the landowner
would nonetheless be deprived of the possession of the
property as also payment of 80% of compensation under
Section 17(3-A) of the Act. Such an unjust result cannot be
allowed to happen by quashing the notification in part only
to the extent of Section 17 of the Act and maintaining it for
the purpose of Section 4 of the Act. Thus, having regard to
the facts and circumstances brought on record in these
appeals, it is not possible to accept this argument
particularly when the very foundation of invoking Section 17
was invalid and unjustified as upheld by this Court in
Banwari Lal‡ and Shakuntala Gupta [Union of India v.

24

Shakuntala Gupta, (2002) 7 SCC 98 [Ed.: See also the
earlier order reported at (2002) 10 SCC 694.]].”

24. Given the aforesaid, it is clear that the appeals filed by the State,

namely, civil appeals arising out of SLP(C) No.10581-10583 of 2020

have to be dismissed.

25. Coming to the appeals filed by the Appellant, 1 the said appeals are

only on a limited ground, namely, that compensation for the illegal

occupation of the Premises cannot be assessed by the District Judge

under section 11(1)(b) of the West Bengal Requisition Act, as section

11(1) refers to compensation during the period of requisition and not

after the property continues to remain with the State without any

authority of law even after the requisition period ends. Section 11(1) of

the West Bengal Requisition Act reads as follows:

“Provisions regarding compensation.

11. Procedure for fixing compensation.-

(1) Where any premises are requisitioned under this Act,
there shall be paid to all persons interested compensation
the amount of which shall be determined in the manner,
and in accordance with the principles hereinafter set out,
namely:

(a) where the amount of compensation can be fixed by
agreement, it shall be paid in accordance with such
agreement;

1 Civil appeals arising out of SLP (C) Nos.9834-9835 of 2020 and SLP (C) Nos.9837-

9838 of 2020.

25

(b) where no such agreement can be reached, the
State Government shall appoint a District Judge or an
Additional District Judge as arbitrator;…”

26. A cursory reading of the aforesaid provision will make it clear that the

Appellant is correct in its submission, which is therefore accepted and

the impugned judgment of the Division Bench is set aside to this

extent. Civil appeals arising out of SLP (C) Nos. 9834-9835 of 2020

and SLP (C) Nos. 9837-9838 of 2020 are thereby allowed.

27. A very disturbing feature of these appeals is the fact that WBMDTCL,

which is “State” within the meaning of Article 12 of the Constitution of

India, has continued in unlawful possession of the Premises since

15.08.1998 without paying a single pice towards compensation till

date. Following the judgments of this Court, most notably, Assam

Sillimanite Ltd. v. Union of India, (1990) 3 SCC 182 (see paragraphs

13 and 14) and Krishan Lal Arneja (supra), we appoint Shri Soumitra

Pal (Retd. Judge, High Court of Calcutta) as arbitrator to determine

compensation that is payable by way of damages for occupation of the

Premises without any authority of law. A written authority to appoint

such arbitrator is to be furnished to us immediately, i.e., within a week

from 23.02.2021. If not so furnished, WBMDTCL will be liable to pay a

sum of Rs. 100 per square foot, per month (being the average of the

rental amounts paid by other tenants in the same building since August

26
1998 as per the Valuation Report dated 30.11.2019 prepared by

Banibrata Mukherjee, Chartered Engineer, Engineer Commissioner &

Valuer of Alipore Judges’ Court) for the entire period of illegal

occupation of the Premises within four months from the date of this

judgment.

28. If written authority for appointment of the arbitrator is received within

time, the learned arbitrator is to proceed on a prima facie view of the

case submitted to him by the parties to determine interim

compensation payable within a period of two months of entering upon

the reference. This is owing to the fact that not a single pice has been

paid for the last 22 years for the illegal occupation of the Premises by

WBMDTCL. Further, neither party is to take any adjournment before

the arbitrator within this period of two months, so that the arbitrator can

decide the interim compensation that is to be paid. After such interim

order, the learned arbitrator will proceed to deliver a final award.

29. WBMDTCL has asked for reasonable time to vacate the premises.

However, in light of the fact that WBMDTCL has been in possession of

the Premises without any authority of law for the last 22 years, we do

not feel that it is justified to give time as prayed for, till the end of this

year. Thus, we only grant time of four months from the date of this

judgment to vacate the Premises, conditional upon the responsible

officer filing an undertaking before this Court, that they will vacate the

27
Premises within four months and handover vacant possession of the

Premises to the Appellant, and that the interim compensation, if

ordered before such date, will be paid within the time stipulated by the

arbitrator so appointed.

Civil Appeals @ SLP (C) Nos. 9837-9838 of 2020

30. In these appeals,2 though no one appears on behalf of West Bengal

Sugar Industries Development Corporation Ltd. [“WB Sugar

Industries”], who have been in illegal occupation of a portion of the

fifth floor of premises no. 13, Nellie Sengupta Sarani (Lindsay Street),

Calcutta [“Fifth Floor Premises”], measuring approximately 1350

square feet, the same directions apply qua WB Sugar Industries. Thus,

WB Sugar Industries is also to submit a written authority to appoint the

arbitrator within a week from 23.02.2021, failing which they shall pay a

sum of Rs. 100 per square foot, per month, for the entire period of

illegal occupation of the Fifth Floor Premises, within four months from

the date of this judgment. Further, WB Sugar Industries is given four

months to vacate the Fifth Floor Premises, upon the submission of an

undertaking to vacate and handover vacant possession of the Fifth

Floor Premises to the Appellant, and to pay the interim compensation

within the time to be stipulated by the arbitrator.

2 Civil appeals arising out of SLP (C) Nos. 9837-9838 of 2020.

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31. These appeals are disposed of accordingly.

………………………………J.

(R.F. Nariman)

………………………………J.

(B.R. Gavai)
New Delhi;

March 01, 2021.

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