KRISHI UTPADAN MANDI SAMITI, MUZAFFARNAGAR (U.P.), ETC.versusRATAN PRAKASH MANGAL & ORS., ETC.

                  KRISHI UTPADAN MANDI SAMIT!,
A·
                   MUZAFFARNAGAR (U.P.), ET,C.
                               v.
               RATAN PRAKASH MANGAL & ORS., ETC.

                                  MAY 6, 1988
B
                [E.S. VENKATARAMIAH AND N.D. OJHA, JJ.)

           Land Acquisition Act, 1894--Challenging notification issued
     under section 4( 1) read with section 17(4) and consequential notification
     issued under section 6-0f-For acquisition of plot of /and.
c       These two appeals--Civil Appeal No. 3446 of 1987 and Civil Appeal
  No. 3447 of 1987-were filed in this Court against the judgment of the
  High Court in the Writ Petition No. 6789 of 1982. Ratan Prakash
  Mangal and Kuldip Singh, respondents Nos. l and 2 in the Civil Appeal
  No. 3446 of 1987 and the appellants in Civil Appeal No. 3447 of 1987,
D had tiled the said writ petition challenging a notification dated 20th
  May, 1982, issued under section 4(1) read with section 17(4) of the Land
  Acquisition Act, 1894 (the Act) and also the consequential notification
  dated 21st May, 1982, issued under section 6 of the Act with regard to a
  plot No. 289. The notification under section 4(1) of the Act was quashed
  in part in so far as it invoked Section 17(4) of the Act, and the notifica-
E tion under section 6 was quashed as a whole with regard to the said plot
  No. 289. The Civil Appeal No. 3446 of 1987 was preferred by Krishi
  Utpadan Mandi Samiti, Muzaffar Nagar for which the said plot had
  been acquired, for setting aside the judgment of the High Court. Civil
  Appeal No. 3447 of 1987 was preferred by Ratan Prakash Mangal and
  Kuldip Singh afore-mentioned hereinafter referred to as respondents
F Nos. 1 & 2 asserting that the notification under section 4(1) should have
  been quashed by the High Court in its entirety and not only in so far it
  invoked section 17(4) of the Act.

        Initially, a Notification dated 20th March, 1975 was issued under
  section 4(1) of the Act for acquiring land, including the plot No. 289, for
G construction of a market yard for the appellant Krishi Utpadan Mandi
  Sa miti. Later, this Notification was superseded by another Notification
  dated 30th August, 1975 issued under section 4(1) with regard to land
  which did not include the said plot. Subsequently, another Notification
  dated 26th October, 1978, was issued under section 4(1) read with
  Section 17(4) of the Act with regard to land, including the plot above-
H mentioned. The Notification dated 26th October, 1978 was followed by
                                         182
               KRISHI UTPADAN SAMIT! v. R.P. MANGAL                     183

a Notification dated 27th October, under section 6.
                                                                              A
      Prior to the issue of these Notifications, respondents Nos. 1 and 2
had purchased the said plot No. 289. The said respondents Nos. 1 and 2
had challenged the Notifications dated 26th October, 1978 and 27th
October, 1978 by a writ petition in the High Court. The High Court had
quashed the two Notifications in so far as Plot No. 289 was concerned.        B
This Judgment of the High Court had been challenged by Krishi Utpa-
dan Mandi Samiti before this Court in Civil Appeal No. 2970Of1979.

      This Court had held that even though the quashing of the Notifi-
cation under Section 6 had been justified, the High Court had not been
right in quashing the Notification under section 4(l)°in its entirety, and
had set aside the Judgment of the High Court in so far as it had quashed      c
the Notification under section 4( l) in its entirety, while mainfaining the
rest of the Judgment with a direction regarding inquiry under Section
SA into the objections of the respondents Nos. l and 2 to the proposed
acquisition etc. In pursuance of the said direction, inquiry under sec-
tion SA had been made and the Land Acquisition Officer had submitted          D
a report on 20th January, 1981, after about 15 months of the direction
above~said of this Court, to the effect that the Plot No. 289 might be
exempted from acquisition. The Government did not agree with the said
report and issued the Notifications impugned in present appeals.

    Allowing Civil Appeal No. 3446 of 1987, and dismissing Civil              E
Appeal No. 3447 of 1987, the Court,

     · HELD: There was no doubt with regard to the legal position that
the Report dated 20th January, 1981 of the Land Acquisition Officer
was not binding on the State Governmen~ and it was still open to it to
continue the proceedings for the acquisition of the Plot No. 289 notwith~     F
standing the said report. The Government had its reason why in place
of issuing a Notification under section 6(1) of the Act in continuation of
the Notification dated 26th October, 1978 under sectio" 4(1), fresh
notifications under sections 4 and 6 had to be issued as also the reason
for the delay in issuing the fresh Notifications, as was apparent from the
record. As regards the submission that section 17(4) of the Act had been      G
erroneously invoked in fresh Notification under section 4(1) dated 20th
May, 1982 also and that inquiry under Section SA had again to be made
before issuing this Notification, it was enough to point out that once an
inquiry under the said section had already been made and the parties
had been given full opportunity to substantiate their case in the enquiry
and the State Government had not been inclined to agree With the              H
    184         SUPREME COURT REPORTS                 [1988] Supp. 1 S.C.R.

    report of the Land Acquisition Officer submitted in pursuance of that·
A
    inquiry, it would have been a . futile exercise to repeat the whole
    performance again. After the issue oftbe earlier Notification dated' 26th
    October, 1978, a period of nearly 3'h years had expired when the· fresh·
    Notification dated 20th May, 1982 above-said was. issued and appa,.
    rently the necessity to acquire the plot No. 289 during this period
B   became more acute due to this delay. Further, as• stated. in' the said
    Notification itself, the urgency had become more imminent- on. account:
    of the direction issued by this Court on 2nd March;. 1982· in Writ
    Petition No. 1318 of 1982 filed by the traders in gur, khandseri and
    foodgrains, Muzaffar Nagar, challenging the Notification. under Section·
    7(2)(b) of the U.P. Act No. 2S of 1964. Consequently, it was difficult to
    hold that the opinion of the State Government that it was a fit case to
c   invoke section l 7(4) of the Act was invalid on the ground that there was.
    no basis or· material in support of the opinion. On the facts oftbe case,it
    was not possible to hold that the Notification dated' 20th May, 1982 had.
     been issued by the State Government in colourable exercise of its
    power. [194A-F]
D
          The Notification dated 20th May, 1982 and 21st May, 1982 had
    not been challenged by respondents Nos. l and. 2 on· the basis of ma/a
    fides of any particular officer of the State Government. What was urged
    was that it was a case of legal ma/a fides inasmuch as in issuing the said
    fresh Notification dated 20th May, 1982, an attempt had been made by
E   the State Government to circumvent the direction of this Court issued
    in the Civil Appeal No. 2970 of 1979 to make inquiry under Section SA
    of the Act and to proceed therea(ter in accordance with law, the State
    Government did make an inquiry under Section SA of the Act in
    pursuance of the direction of this Court after giving full opportunity to
    the concerned parties to substantiate their case .. It was difficult to agree
F   with the submission of respondents I and 2 that the government attemp-
    ted to circumvent the direction of this Court. A case of legal ma/a fide
     was not made out. [I94G-H; 19SB]

          The Government all through was of the opinion- that Plot No. 289
    did not deserve to be released from acquisition. Also, this plea lost
G   significance and became almost of academic value inasmuch as the State
    Government had not issued a notification under section 6(1) of the Act
    in.continuation of the Notification dated 2.6th October, 1978 under
    Section 4( 1).'After the issue of the fresh Notification what was really t.o
    be seen was whether there was justification for invoking section 17(4) of
    Act or not. There was such a justification. There had been a materi~
H   change in the circumstances after the report of the Land Acquisition .
                KRISHI UTPADAN SAMITI v. R.P. MANGAL [OJHA, J.]              185

       Officer dated 20th January, 1981, to justify Section 17(4) of the Act
       being invoked and to dispense with a further inquiry under section SA        A
       oftbe Act. [196D-E; 198C]

              The submission of the respondents 1 and 2 about the lack of
       application• of mind before issuing the Notification dated 20th May,
       1982 with regard to plot No. 289 had no substance, as indicated by the       B
       original record produced by counsel for the State Government. The
       effect of issuing a fresh Notification under Section 4(1) and the delay in
       issuing it had benefited· the respondents 1 and 2 inasmuch as now they
       would be entitled to compensation not on the basis of market value of
       plot No. 289 as on 26.10. 78 when the earlier Notification under Section
       4(1) was issued but as on 20th May, 1982 when the fresh Notification
       under the said section was issued. [200G-H; 20IA]                            c
'°'-         Civil Appeal No. 3446 of 1987 was allowed and the judgment of
       the High Court in the Writ Petition No. 6789 of 1982 was set aside, and
       as a consequence, Civil Appeal No. 3447of1987 w,as dismissed. [20IB]
                                                                                    D
'°'          State of Punjab v. Gurdial Singh & Ors., [1980] 1SCR1071; The
II'    Collector (District Magistrate) Allahabad and Anr. v. Raja Ram Jais-
       wal, etc., [1985] 3 S.C.R. 995; P.L. lakhanpal v. Union of India &
       Ors., [1967] 1 SCR 443; Siemens Engineering & Manufacturing Co. of
       India Limited v. Union. oflndia & Anr., [1976] Suppl. S.C.R. 489;
       Narayan Govind Gavare v. State of Maharashtra, [1977] I S.C.R. 763           E
       and State of U.P. v. Pisia Devi, [1986] 4 S.C.C. 251, referred to.

            CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3446 ,&
       3447 of1987.

             From the Judgment and Order dated 11.3.87 of the High Court            F
       of Allahabad in .Civil Misc. Writ Petition No. 6789of1982.

           Satish Chandra, Ms. Pumima Bhat and E.C. Agarwala for the
       Appellants.

           P.P. Rao, B.D. Agarwal, P.K. Chakraverty, Ms. Sandhya                    G'
       Goswami and R.C. Verma for the Respondents.

             The Judgment of the·Court was delivered by_

            OJHA, J. These two appeals have been preferred again.st the
       judgment dated 11th March, 1987 of the Allahabad High ~ourt in Writ          H
    186        SUPREME COURT REPORTS               [1988] Supp. 1 S.C.R.

A Petition No. 6789 of 1982. In the said writ petition a Notification dated
  20th May, 1982 issued under Section 4(1) read with Section 17(4) of
  the Land Acquisition Act, 1894 (hereinafter referred to as the Act)
  and also the consequential Notification dated 2 lst May, 1982 under
  Section 6 of the Act with regard to Plot No. 289 with an area of 3
  bighas 14 biswa situate in village Kukra, District Muzaffamagar in the
B State of Uttar Pradesh were challenged by Ratan Prakash Mangal and
  Kuldeep Singh who are Respondents 1 and 2 in Civil Appeal No. 3446
  of 1987 and the appellants in Civil Appeal No. 3447 of 1987. For the
  sake of convenience these two persons shall hereinafter be referred to
  as Respondents 1and2. The Notification under Section 4( 1) of the Act
  was quashed in part in so far as it invoked Section 17(4) of the Act and
C thereby dispensed with inquiry under Section 5A of the Act whereas
  the Notification under Section 6 was quashed as a whole with regard to
  the aforesaid Plot No. 289. Civil Appeal No. 3446 of 1987 has been
  preferred by the Krishi Utpadan Mandi Samiti, Muzaffamagar for
  whom the aforesaid plot had been acquired with a prayer that the
  judgment of the High Court may be set aside. Civil Appeal No. 3447 of
D 1987 on the other hand has been preferred by Respondents 1 and 2
  asserting that even the Notification under Section 4(1) of the Act
  should have been quashed by the High Court in its entirety and not
  only in so far as it invoked Section 17(4) of the Act.

        Before dealing with the respective submissions made by learned
E counsel for the parties it is necessary to give some more facts. Initially
  a Notification dated 20th March, 1975 was issued under Section 4(1) of
  the Act for acquiring nearly 80 acres of land for the public purpose of
  construction of a market yard for the appellant, Krishi Utpadan Mandi
  Samiti, Muzaffamagar. About 5 months thereafter, however, this
  Notification was superseded and another Notification was issued
F under Section 4(1) with regard to only 60 acres of land. The Notifica-
  tion issued on 20th March, 1975 included Plot No. 289 aforesaid
  w)lereas the subsequent Notification which is dated 30th August, 1975
  did not include the said plot along with several other plots. Subse-
  quently, however, another Notification was issued on 26th October,
   1978 under Section 4(1) read with Section 17(4) of the Act with regard
G to 19.47 acres of land including Plot No. 289. This Notification really
  seems to be with regard to that portion of land which even though
  included in the earlier Notification dated 20th March, 1975 had been
  excluded in the subsequent Notification dated 30th August, 1975. The
  Notification dated 26th October, 1978 was followed by a Notification
  under Section 6 dated 27th October, 1978. About four months prior to
H the issue of these Notifications Respondents 1 and 2 had purchased
           KRISHI UTPADAN SAMm v. R.P. MANGAL [OJHA, J.]                187

 Plot No. 289 aforesaid on 7th June, 1978, The purpose for which
                                                                              A
 Respondents 1 and 2 purchased Plot No. 289 was shown by them in
 their writ petition filed before the High Court as construction of a
 residential colony. According to them in furtherance of that purpose
 they executed three sale deeds one each on 10th November, 1978, 16th
 November, 1978 and 7th December, 1978. The first of these three sale
 deeds had been executed in favour of one Smt. Dhanwanti Agarwal,             B
 the second one in favour of Smt. Santosh Kumari and the third one in
 favour of Shri Janardhan Das and Ram Kumar. The writ petition filed
 by Respondents 1 and 2 in the High Court indicates that Smt.
 Dhanwanti Agarwal and Smt. Santosh Kumari were wives of two
 gazetted officers and the third purchaser Ram Kumar too was a
 Government servant.
                                                                              c
         The Respondents 1 and 2 challenged the Notification dated 26th
  October, 1978 and 27th October, 1978 referred to above before the
  High Court in Writ Petition No. 163 of 1979. The plea raised by them
  was that there was no urgency and consequently the inquiry contemp·
  lated by Section 5-A of the Act could not be dispensed with by invok-       D
  ing Section 17(4) thereof. This plea found favour with the High Court
  and the two Notifications mentioned above were quashed on 6th June,
  1979 in so far as Plot No. 289 was concerned. This judgment of the
  High Court was challenged by the Krishi Utpadan Mandi Samiti,
  Muzaffarnagar before this Court in Civil Appeal No. 2970 of 1979.
  This Court agreed with the High Court in so far as it had held that the     E
  urgency clause had been wrongly applied. But it was held that on that
  ground even though quashing of the Notification under Section 6 of
  the Act was justified the High Court was nol right in quashing the
  Notification under Section 4(1) in its entirety. On this view the appeal
  was allowed in part and the judgment of the High Court was set aside
  in so far as it quashed the Notification under Section 4(1),ofthe Act i,n   F
  its entirety. The rest of the judgment was, however, maintained with a
  direction "that copies of the Notifications be served personally on
  Respondents Nos. 1 and 2 and their· transferees so that Respondents
  Nos. 1and2 and their transferees may have an opportunity to file their
  objections to the proposed acquisition within three weeks .from the
  date of service of the copy of the notification upon each.,of them. The     G
  appropriate authority will then hold an inquiry into the objections
. under Section 5A and proceed with the matter in accordance with faw.
  Since the appellant has ·obtained possession of the land from Respon-           ' ·
  dent Nos. 1 and 2 and their transferees by invoking the urgency clause
  which,_has been set aside, the appellant will r«store possession of the
  same 1:o Respondents Nos. 1 and 2 and their transferees within a week       H
  from today."                ·'              ··· .                  ·
        188         SUPREME COURT REPORTS                [1988] Supp. 1 S.C.R.

    A       In pursuance of the aforesaid direction inquiry under Section 5A
      of the Act was made and the Land Acquisition Officer after giving the
      parties an opportunity to file their objections and produce evidence
      and hearing the arguments of their learned counsel, submitted a report
      on 20th January, 1981, that is, after about 15 months of the direction
      referred to above issued by this Court in Civil Appeal No. 2970 of
    B 1979. The repo_rt submitted by the Land Acquisition Officer was to the
      effect that Plot No. 289 may be exempted from acquisition. In submit-
      ting the said report, a copy of which has been placed on record, it
      appears that the Land Acquisition Officer was impressed mainly by
      two circumstances: (1) That Smt. Dhanwanti Agarwal and Smt.
      Santosh Kumari who had purchased portions of Plot No. 289 had made
      a declaration saying that there was no house in their names in Muzaf-
    c farnagar   and (2) that even though Mandi Samiti had constructed a
      building it was lying idle inasmuch as no trader was prepared to shift to
      these premises. The Government, as is apparent from the counter-
      affidavit filed on its behalf in this Court as also from the original record
      which was produced before us, did not seem to agree with the report of
    D the Land Acquisition Officer and issued the Notifications which are
      the subject-matter of the present appeals. We shall deal with the
      details in this behalf as also with regard to the delay between 20th
      January, 1981, the date of the report and 20th May, 1982, the date of
      the issue of Notification under Section 4(1) of the Act while consider-
      ing the submissions made by learned .counsel for the parties on this
    E point.

              It was urged by learned counsel for the appellant that even Plot
        No. 289 was urgently needed by the appellant and the High Court has
        erred in taking a contrary view and holding that dispensing with
        inquiry under Section 5A was not bona fide or rational. For the
    F   Respondents 1 and 2 on the other hand it was urged by their learned
        counsel that consequent upon the report of the Land Acquisition
        Officer dated 20th January, 1981 in proceedings under Section SA of
        the Act to the effect that Plot No. 289 may be exempted from the
        acquisition, it was incumbent upon the Government to give a decision
        in this behalf as contemplated by the said Section SA and until a
    G   decision was given, the direction of this Court referred to above given
        in'C,ivil Appeal No. 2970 of 1979 remained unimplemented and the
        issue of fresh Notifications under Sections 4(1) and 6 was in'colourable
•       exercise' of power. In this connection it was pointed out that the only
        course open to the Government was to give a decision that notwith-
        standing the report .of . the Land Acquisition Officer dated· 20th
    H   J anuarv, 1981 it was necessary to acquire Plot No, 289 and to" issue a
         KRJSHI UTPADAN SAMITI v. R.P. MANGAL [OJHA, J.]           189

Notification under Section 6 of the Act on the basis of such decision in
                                                                           A
continuation of the earlier Notification dated 26th October, 1978
11nder Section 4(1) of the Act. According to him since the Notification
dated 26th October, 1978 had initially been quashed by the High Court
in its entirety on 6th September, 1979 in so far as Plot No. 289 is
concerned and was partly maintained by this Court vide its judgment
in Civil Appeal No. 2970 of 1979 with a direction to make inquiry B
under Section 5A of the Act and to proceed thereafter in accordance
with law, the second proviso to Section 6(1) of the Act as inserted by the
State of Uttar Pradesh by the Land Acquisition (U.P. Amendment)
Act 28 of 1972 was clearly attracted. It was urged that since the said
proviso contemplated that in computing the period of three years for
issuing a Notification under Section 6 prescribed by the first proviso to
sub-section (1) thereof the time during which the State Government c
was prevented by or in consequence of any order of any court from
making such declaration shall be excluded, it was open to the State
Government to issue a Notification under Section 6 even on 20th May,
1982 when the fresh Notification under Section 4( 1) was issued and the
issue of the fresh Notification under Section 4(1) invoking Section D
 17(4) of the Act was not bona fide and was apparently a case ofcolour-
able exercise of power. It was also pointed out by learned counsel for
the Respondents 1 and 2 that undue delay had been caused in issuing
the fresh Notification under Section 4(1) of the Act on 20th May, 1982
after the report of the Land Acquisition Officer dated 20th January,
 1981 which itself indicated that there was no occasion for invoking E
Section 17(4) of the Act. In this connection it was further submitted by .
learned counsel for the Respondents 1 and 2 that no material change in
the factual position had taken place between 20th January, 1981 and
20th May, 1982 and for this reason also Section 17(4) of the Act could
not have been invoked. According to learned counsel there was in any
case no justification for the Government to include even that portion F
of the land other than Plot No. 289 which was the subject-matter of
Notifications dated 26th October, 1978 and 27th October, 1978 and
with regard to which the said Notifications had not been quashed.
According to him the Government by     .   including that portion of the
                                                                     .

land also in these Notifications dated 20th and 21st May, 1982 really
took steps to acquire its own land which indicated lack of application G
of mind at the time of issuing these Notifications. On the basis of these
submissions it was urged by learned counsel for the Respondents 1 and
 2 that not only the judgment of the High Court under appeal deserved
to be confirmed, Civil Appeal No. 3447 of 1987 filed.by Respondents 1
and 2 deserves to be allowed and the Notification dated 20th May,
 1982 under Section 4(1) of the Act deserves to be quashed in its H
    190         SUPREME COURT REPORTS               [1988] Supp. I S.C.R.

    entirety in substitution of the judgment of the High Court quashing the
A   same only in so far as it invoked Section 17(4) of the Acf.

          Having heard learned counsel for the parties we are of the
    opinion that Civil Appeal No. 3446 of 1987 filed by the Krishi Utpadan
    Mandi Samiti, Muzaffarnagar deserves to be allowed and as a consequ-
B   ence thereof Civil Appeal No. 3447 of 1987 filed by the Respondents 1
    and 2 deserves to be dismissed. At this place another intervening
    circumstance may be noticed. A Notification dated 20th November,
    1981 was issued by the State Government under clause (b) of sub-
    section (2) of Section 7 of the Uttar Pradesh Krishi Utpadan Mandi
    Adhyniyam, 1964 (hereinafter referred to as U.P. Act No. 25 of 1964)
    declaring that with effect from. the date of publication of the Notifica-
c   tion in the Gazette the wholesale transactions of agricultural produce
    in respect of Muzaffarnagar market area specified in Schedule A shall
    be conducted only on the place within the Muzaffarnagar Principal
    Market Yard. A copy of this Notification forms part of the record of
    Civil Appeal No. 3446 of 1987 and it indicates that Schedule A thereto
D   contains 54 commodities of agricultural produce. The effect of the
    issue of the said Notification was that dealers of the said 54 commo-
    dities had to shift fheir existing place of business to the Principal
    Market Yard.

          An association of traders in gur, khandsari and foodgrains,
E   namely, the Gur, Khandsari and Grain Merchants Association
    (Regd. ), Muzaffarnagar filed Writ Petition (Civil) No. 1318 of 1982 in
    this Court challenging the aforesaid Notification. The grievance of the
    petitioners was that once the impugned Notification became operative
    no one could carry on wholesale business in the specified agricultural
    produce except at a place declared as a Market yard and any business
F   being carried on at any other place would be contrary to law rendering
    persons carrying on such business liable to prosecution. According to
    the petitioners in this view of the matter and in view of the circum-
    stance that in.the new Market Yard mentioned in the Notification
    shops were not available, the whole business of the petitioners would
    be ruined if the said Notification was implemented. Notices were
G   issued to .the respondents and statements were made by learned
    counsel apj)earing for the concerned respondents that the Mandi Samiti
    had undertaken planned programme of constructing shops and that
    120 more shops can be constructed within two months apart from the
    shops which had been constructed and allotted to the intending traders
    and dealers. On the basis of the aforesaid statements this Court
H   ordered on 2nd March, 1982:-
              KRISHI UTPADAN SAMITI v. R.P. MANGAL [OJHA, J.[              191

                 "We, therefore, record the statements of Mr. Rana and
                                                                                  A
                 Mr. Garg that within a period of six months from today the
                 Samiti will construct required number of shops. If some
                 vacant shops are available proceedings for allotment must
                 be taken forthwith. Those of the traders/dealers who are
                 allotted shops must shift to the notified market yard within
                 a week from the date of the receipt of the allotment order.      B
                 Till any trader/dealer is not allotted a shop he can carry on
                 his business in the old market yard and is not to be pro-
                 secuted,
                    ;
                           on the ground that he is doing business in the old
                 market yard which is denotified."

          A further direction was given that the shops to be constructed
     must be in accordance with the plan according to which the existing          c
     shops had been constructed.

            The impugned Notification dated 20th May, 1982 under Section
     4( 1) of the Act contained inter alia the following recital as is apparent
     from a copy thereof placed on the record of Civil Appeal No. 3446 of         D
     1987:

                 "Being of the opinion that the provisions of sub~section (1)
                 and (IA) of section 17 of the Act are applicable to the said
                 land inasmuch as the said land which is arable and ban jar
                 Atirikt is urgently required for the construction of market      E
                 yard of Krishi Utpadan Mandi Samiti, Muzaffarnagar
                 under a planned development scheme arid that in view of
                 the directions of the Supreme Court additional shops are to
                 be constructed most urgently. It is as well necessary to
J.               eliminate the delay likely to be caused by an enquiry under
                 Section SA of the said Act."                                     F

                                                                     :p.
           In the counter-affidavit filed on behalf of ihe State of U which
     forms part of Civil Appeal No. 3447 of 1987 it has been stated that
     after the receipt of the report of the Land Acquisition Officer dated
     20th January, 1981 the State Government called for comments from
     the Director, Mandi Parishad, Uttar Pradesh, who vide his letter dated ·G
I,
     27th June, 1981 informed the State Government that Plot No. 289
     deserved to be acquired and there was no justification to release it
     from acquisition. After the said Jetter had been received Smt.
     Dhanwanti Agarwal, one of the vendees from Respondents 1 and 2
     referred to above requested the State Government vide her letter
     dated 2nd September, 1981 to reconsider the matter. On the receipt of H
    192        SUPREME COURT REPORTS                I 19881 Supp. 1 S.C.R.

    the said letter a meeting was convened at Government level on 16th
A   November, 1981 attended by the District Magistrate, Muzaffarnagar,              ,..
    Agriculture Secretary and Director, Mandi Parish ad. In pursuance of



B
    the deliberations of that meeting the District Magistrate was requested
    to look into the matter and send his comments vide letter dated 21st
    November, 1981 and in response to that letter the District Magistrate
    vide his letter dated 3rd December, 1981 informed the State Govern-
                                                                                '
                                                                                ••
                                                                                    .
    ment that for reasons stated therein it was not advisable to exempt or
    exclude Plot No. 289 from the acquisition proceedings. Copies of these
    letters have been annexed to the counter-affidavit. In his letter dated
    3rd December, 1981 the District Magistrate inter alia pointed out that          .,
    the land of Plot No. 289 was situated in the middle of the land acquired
    under the Notifications in question and that it was necessary to acquire
c   the land of the said plot also for a smooth construction of the market
    yard. The District Magistrate by his letter made a request that Notifi-
    cation under Section 6(1) of the Act may be issued immediately. The
    counter-affidavit further indicates that while the matter was under
    consideration Smt. Santosh Kumari the other vendee from Respon-
D   dents 1 and 2 referred to above made an application before the State
    Government stating that Plot No. 289 should not be acquired in view
    of the report of the Land Acquisition Officer and further that since the        ....
                                                                                    ~,,,




    Notification dated 26th October, 1978 under Section 4(1) had been
    published on 25th November, 1978 and a period of three years had
    elapsed any acquwtion would be invalid.
E
          We have already indicated above that the original record was
    produced before us by learned counsel appearing for the State
    Government and from its perusal it appeared that after Smt. Santosh
    Kumari had made the said application the question as to whether a
    Notification under Section 6(1) of the Act could be issued in continua-
F   tion of the Notificition dated 26th October, 1978 under Section 4(1) of
    the Act came up for consideration before the State Government. The
    matter was ultimately referred to the Law Department. The record
    further indicated that there appeared to be a divergence of opinion in
    regard to the applica15ility of the second proviso to Section 6(1) of the
    Act inserted by t!).e State of U .P. and the ultimate view which pre-
                                                                                ...
G   vailed was that it was expedient to issue a fresh Notification under            .,
    Section 4(1) also and it was thus that in place of issuing a Notification
    under Section 6(1) in continuation of the Notification dated 26th
    October, 1978 under Section 4(1), fresh Notifications both under
    Sections 4( 1) and 6 of the Act were issued on 20th May, 1982 and 21st      ...,
    May, 1982 respectively. The original record also indicated that after
H   the receipt of the report of the Land Acquisition Officer the file was
             KRJSHI UTPADAN SAMIT! v. R.P. MANGAL [OJHA, J.J            193

    moving above for sometime to ensure as to whether possession over
                                                                               A
    Plot No. 289 had been restored back or not in pursuance of the direc-
    tion of the Supreme Court in Civil Appeal No. 2970 of 1979 and to
    take steps to ensure compliance of the said direction. As seen above it
    was the own case of Respondents l and 2 in their writ petition before
    the High Court that Smt. Dhanwanti Agarwal and Smt. Santosh
    Kumari were wives of two gazetted officers. In the counter-affidavit       B
    which was filed on behalf of the Krishi Utpadan Mandi Samity, Muzaf-
    farnagar in the said writ1'etition it was stated in paragraph 20 with
r   regard to the report of the Land Acquisition Officer dated 20th
    January, 1981 that some of the land being of gazetted officers, they
    succeeded in exerting pressure on the Land Acquisition Officer to
    submit a wrong report. As already pointed out in the counter-affidavit
    filed on behalf of the State Government in this Court reference has        c
    betin made to the two letters given by Smt. Dhanwanti Agarwal and
    Smt. Santosh Kumari on the basis of which further inquiry had to be
    made by the State Government and ultimately a decision had to be
    taken that in place of issuing a Notification under Section 6(1) of the
    Act in continuation of the Notification dated 26th 'October, 1978 under    D
    Section 4(1) fresh Notifications under Sections 4(1) and 6 may be
    issued.

          The original record which was produced before us also indicated
    that at no stage after the receipt of the report of the Land Acquisition
    Officer dated 20th January, 1981 had the Government taken a decision       E
    that it was not necessary to acquire the plot. Indeed, as seen above,
    the Government was not inclined to agree with the report of the Land
    Acquisition Officer because had it been so there would have been no
    occasion either for calling for a report from the Director Mandi
    Parishacl or convening a meeting to consider the mattter or to require
    the District Magistrate to submit his own report. After making neces-      F
    sary inquiries the Government ultimately decided not to release Plot
    No. 289 from acquisition proceedings. However, before a Notification
    could be issued under S\'ction 6(1) of the Act in continuation of the
    Notification dated 26th October, 1978 under Section 4(1) a question
    was raised by Smt. Santosh Kumari that three years having expired
    from th~ date of the publication of the Notification under Section 4(1)    G
    Plot No. 289 could not be acquired in pursuance of the said Notifica-
    tion. The Government thereafter referred the matter to the Law
    Department and it was ultimately decided to issue fresh Notifications
    under Sections 4(1) and 6 of the Act.

         There seems to be no doubt with regard to the legal position that     H
    194        SUPREME COURT REPORTS               [1988] Supp. 1 S.C.R.

  the report dated 20th January, 19El submitted by the Land Acquisition
A Officer was not binding on the-State Government and it was still open
  to it to continue the proceedings for acquisition of Plot No. 289
  notwithstanding the said report. The reason why in place of issuing a
  Notification under Section 6(1) of the Act in continuation of the
  Notification dated 26th October, 1978 under Section 4(1) fresh Notifi-
B cations under Sections 4 and 6 had to be issued as also the reason for
  the delay in issuing the fresh Notifications have already been indicated
  above. As regards the submission that Section 17(4) of the Act has
  been erroneously invoked in the fresh Notification under Section 4(1)
  dated 20th May, 1982 also and that inquiry under Section 5A had again
  to be made before issuing this Notification, suffice it to point out that
  once an inquiry under the said Section had already been made and the
C parties bad been given full opportunity to substantiate their case in the
  said inquiry and the State Government was not inclined to agree with
  the report of the Land Acquisition Officer submitted in pursuance of
  that inquiry it would have been a futile exercis~ to repeat the whole
  performance again. After the issue of the earlier Notification dated
D 26th October, 1978 a period of nearly 31/i years had expired when the
  fresh Notification dated 20th May, 1982 under Section 4(1) was issued
  and apparently the necessity to acquire Plot No. 289 during this period
  became more acute due to this delay. Further, as stated in the Notifi-
  cation dated 20th May, 1982 itself the urgericy had become more immi-
  nent on account of the direction issued by this Court on 2nd March,
E 1982 in Writ Petition No. 1318 of 1982 filed by the traders challenging
  the Notification under Section 7(2)(b) of U.P. Act No. 25 of 1964.
   Consequently, we find it difficult tO hold that the opinion of the State
  Government that it was a fit case to invoke Section 17(4) of the Act
  was invalid on the ground .that there was no basis or material in sup-
  port of that opinion. We are further of the view that on the facts
F indicated above it is also not possible to hold that the Notification
  dated 20th May, 1982 had been issued by the State Government in
   colourable exercise of its power.

        At this place it would be relevant to notice that the Notifications
  dated 20th May, 1982 and 21st May, 1982 had not been challenged by
G Respondents 1 and 2 on the basis of malafides of any particular officer
  of the State Government. What was urged was that it was a case of
  legal ma/a fides inasmuch as in issuing the fresh Notification dated 20th
  May, 1982 under Section 4(1) of the Act, an attempt was made by the
  State Government to circumvent the direction issued by this Court in
  Civil Appeal No. 2970 of 1979 to make inquiry under Section 5A of the
H Act and to proceed thereafter in accordance with law. Suffice it to say,
         KRISHI UTPADAN SAMIT! v. R.P. MANGAL [OJHA, J.]              195

so far as this submission is concerned that the State Government in
                                                                             A
pursuance of the aforesaid direction given by this Court did make an
inquiry under Section 5A of the Act and in the said inquiry full
opportunity was given to the concerned parties to substantiate their
case. It is, therefore, difficult to agree with the submission of learned
counsel for Respondents 1 and 2 that an attempt was made by the State
Government to circumvent the direction of this Court. As seen above,         B
the State Government was not bound to agree with the report of the
Land Acquisition Officer and it has not been disputed even by learned
counsel for the respondents that it was open to the State Government
to take a contrary decision and to issue a Notification under Section
6( 1) of the Act on the receipt of the report dated 20th January, 1981 of
the Land Acquisition Officer. That the State Government in the
instant case was not inclined to agree with the report of the Land           c
Acquisition Officer has already been indicated above. The reasons for
the delay in taking further steps as also for issuing fresh Notifications
under Sections 4(1) and 6 have also been indicated. On these facts we
are of the opinion that a case of even legal ma/a fides is not made out.
The decision of this Court in the case of State of Punjab v. Gurdial         D
Singh & Ors., [1980) 1 S.C.R. page 1071 on which reliance has been
placed by learned counsel for Respondents 1 and 2 is of no assistance
inasmuch as the plea of ma/a fides in that case was based on personal
malice. So also is the position with regard to the decision of this Court
in The Collector (Distt. Magistrate) Allahabad and Anr. v. Raja Ram
Jaiswal etc., [1985) 3 S.C.R. Page 995. That was a case where land had       E
been acquired for a cinema theatre in the vicinity of the building
housing the Hindi Sahitya Sammelan. It was pointed out that the
power to acquire land is to be exercised for carrying out the public
purpose. If the authorities of the Sammelan cannot tolerate the exis-
tence of a cinema theatre in its vicinity it could not be said that such a
purpose would be a public purpose. May be, the authority of the              F
Sammelan may honestly believe that the existence of a cinema theatre
may have the pernicious tendency to vitiate the educational and
cultural environment of the institution and therefore, it will like to
wish away a cinema theatre in its vicinity. But that hardly constitutes
public purpose. Such is not the situation in the instant case.
                                                                             G
      The learned counsel for Respondents 1 and 2 in support of his
submission that since this Court by its order dated 22nd October, 1979
in Civil Appeal No. 2970 of 1979 had issued a direction to hold an
inquiry under Section SA of the Act and to proceed with the matter in
accordance with law it was incumbent on the Government to take a
decision that notwithstanding the report of the Land Acquisition             H
    196         SUPREME COURT REPORTS              I1988] Supp. 1 S.C.R.
  Officer dated 20th January, 1981 it was necessary to acquire Plot
A No. 289, placed reliance on the decision of this Court in P.L. Lakhan·
  pal v. Union of India & Ors., [1967) 1 S.C.R. page 433 where while
  dealing with Rule 30A of the Defence of India Rules, 1962 it was held
  that according to dictionary "decision" means "settlement, (of ques-
  tion etc.), conclusion, formal judgment, making up one's mind,
B resolve, resoluteness, decided character." and on Siemens Engineering
  & Manufacturing Co. of India Limited v. Union of India & Anr.,
  [1976) (Supplementary) S.C.R. page 489 where while dealing with the
  provisions of the Indian Customs Tariff it was held that if courts of
  law are to be replaced by administrative authorities and tribunals, as
  indeed, in some kinds of cases, with the proliferation of Administra-
  tive Law, they may have to be replaced, it is essential that administra-
c tive authorities and tribunals should accord fair and proper hearing to
  the persons sought to be affected by their orders and give sufficiently
  clear and explicit reasons in support of the orders made by them.
   Rel.iance was placed on some other cases also but we do not find it
   necessary to deal with them in detail inasmuch as to us it appears
D firstly, that the Government in the instant case was all through of the
  opinion that Plot No. 289 did not deserve to be released from acquisi-
   tion as already indicated above. Secondly, this plea loses its signifi-
   cance and becomes almost of academic value inasmuch as the State
   Government in the instant case has not issued a Notification under
   Section 6( 1) of the Act in continuation of the Notification dated 26th
E October, 1978 under Section 4(1). Afte~ the issue of the fresh Notifica-
   tions under Sections 4(1) and 6, what is really to be seen is whether
   there was jus.tification for invoking Section 17(4) of the Act or not. We
   have already indicated above that there was such justification.

        In support of the submission that there was no material change in
F the factual position between 20th January, 1981 and 20th May, 1982,
  learned counsel for the Respondents 1 and 2 has urged that the direc-
  tion contained in the judgment of this Court dated 2nd March, 1982 in
  Writ Petition No. 1318 of 1982 filed by the traders was confined to the
  question of allotment of 200 shops only. And since the land which had
  already been acquired was sufficient for constructing as many shops it
G was not necessary to acquire Plot No. 289. As seen above, the Notifi-
  cation under Section 7(2)(b) of the U.P. Act No. 25 of 1964 which had
  been challenged before this Court in Writ Petition No. 1318 of 1982
  was in regard to 54 commodities. The writ petition aforesaid had been
  filed by an association of traders dealing in gur, khandsari and food-
  grains only. Even though technically it may be said that the direction
H issued by this Court was relevant with regard to about 200 shops only,
         KRISHI UTPADAN SAMITI v. R.P. MANGAL IOJHA, J.I           197

in substance, however, that does not appear to be the correct position.
The effect of the direction issued by this Court was that no trader A
could be compelled to come to the market yard unless shops were
provided. The Krishi Utpadan Mandi Samiti, Muzaffamagar could not
afford to act contrary to this direction with regard to any of the traders
who were dealing in any of the aforesaid 54 commodities. As seen
above, one of the two main circumstances relied upon by the Land B
Acquisition Officer in giving his report dated 20th January, 1981 was
that no trader was willing to come to the premises which had already
been constructed and were lying idle. This circumstance had ceased to
exist with the issue of the Notification under Section 7(2) of the U.P.
Act No. 25 of 1964 as a consequence whereof on shops being made
available in the market yard all the traders doing wholesale business in
the 54 commodities mentioned in the Notification were bound to shift     c
to the shops in the market yard. For this provision had to be made by
the Krishi Utpadan Mandi Samiti, Muzaffamagar. In paragraph 15 of
the counter-affidavit filed on behalf of the Krishi Utpadan Mandi
Samiti, Muzaffamagar in the writ petition in the High Court it was
stated that the Mandi Samiti had completed construction of 120 shops D
and there was further scope for constructing only 90 more shops in the
60 acres of land ·originally acquired whereas Mandi Samiti had to con-
struct 540 shops. In this Court a supplementary affidavit has been filed
on behalf of the said Mandi Samiti in which it has been stated that so
far 348 shops had been constructed and 4 shops are incomplete on
account of the impugned judgment of the High Court relating to Plot E
No. 289. A site plan has been attached as Annexure D indicating that
land on three sides of Plot No. 289 has already been acquired and on
the fourth side lies a road. Annexure E to the said supplementary
affidavit is a sketch map indicating the various requirements of the
Mandi Samiti in connection with the construction of the market yard.
The said sketch plan indicates that apart from construction of shops F
provision has been made for roads and parking grounds; godowns,
auction platforms, open space in front of the shops, stafff quarters,
rest house, police chowki, check post, a building for bank as well as a
post office, toilets, canteens and so on. The affect of the Notification
under Section 7(2) of U.P. Act No. 25 of 1964 is that wholesale busi-
ness in 54 commodities mentioned therein can be carried out only in G
the principal market yard. It is common knowledge that trucks, trac-
tors with trollies and even bullock carts are used for transporting the
various comm'?dities to the principal market yard. To accommodate
them provision has necessarily to be made for roads and parking
grounds etc. Likewise, arrangement has also to be made for storage of
the various commodities and for their auction as well as for lodging H
    198         SUPREME COURT REPORTS                 I1988] Supp. 1 S.C.R.

    such of the cultivators, drivers, cleaners etc. who may have to stay on
A   due to the exigencies of the situation. Some if not all employees
    attached with the principal market yard have to be provided with
    accommodation. Section 19 of U.P. Act No. 25 of 1964 deals with
    Market Committee funds and its utilisation. Sub-section (3)(vii)
    authorises the Market Committee to utilise its funds far payment of
B   "cost of construction and repairs of buildings necessary for the market
    yards and for the health, convenience and safety for the persons using
    them". It gives clue to the nature of some of buildings which are to be
    constructed by a Market Committee and for which land has to be
    provided for. The requirement of the Mandi Samiti, therefore, has to
    be ~onstrued in this background and not in isolation with regard to its
    requirement for land to be covered by shops alone. Apparently, there-
c   fore, there has been a material change in the circumstances after the
    report of the Land Acquisition Officer dated 20th January, 1981 so as
    to justify Section 17(4) of the Act being invoked. In this connnection
    reliance was placed by learned counsel for the Respondents 1 and 2 on
    the decision of this Court in Narayan Govind Gavate etc. v. State of
o   Maharashtra, I 19771 1 S.C.R. page 763 where dealing with Section
    17(4) of the Act it was pointed out that the purpose of the said section
    was obviously not merely to confine action under it to waste and arable
    land but also to situations in which an inquiry under Section SA will
    serve no useful purpose or for some overruling reason which should be
    dispensed with. The mind of the officer or authority concerned has to
E   be applied to the question whether there is an urgency of such a nature
    that even the summary inquiry under Section SA of the Act should be
    eliminated. It is not just the existence of an urgency but the need to
    dispense with an inquiry under Section SA which is to be considered. It
    was also held in that case that the development of an area for industrial
    and residential purposes in itself, on the face of it does not call for any
F   such action barring exceptional circumstances, as to make immediate
    possession without holding even a summary inquiry under Section SA
    of the Act, imperative. On the other hand suc1:1 schemes generally take
    sufficient period of time to enable summary inquiry under Section SA
    of the Act to be completed without any impediment whatsoever to the
    execution of the scheme. The aforesaid decision was considered in a
G   subsequent decision of this Court in State of U.P. v. Pista Devi, I 19861     !'
    4 sec 2S l and it was distinguished. It was held:

                "Now it is difficult to hold that in the case of proceedings
                relating to acquisition of land for providing house sites it is
                unnecessary to invoke Section 17(1) of the Act and to dis-
H               pense with the compliance with Section SA of the Act.
KRISHI UTPADAN SAMIT! v. R.P. MANGAL [OJHA, J.]             199

  Perhaps, at the time to which the decision in Narayan
  Govind Gavate v. State of Maharashtra, [1977] 1 SCR 763 A
  related the situation mighi have been that the schemes re-
  lating to development of residential areas in the urban
  centres were not so urgent and it was not necessary to
  eliminate the inquiry under Section 5A of the Act. The
  acquisition proceedings which had been challenged in that B
  case related to the year 1963. During this period of nearly
  23 years since then the population of India has gone up by
  hundreds of millions and it is no longer possible for the
  Court to take the view that the schemes of development of
  residential areas do not 'appear to demand such emergent
  action as to eliminate summary inquiries under Section 5A
  of the Act'. In Kasireddy Papaiah (died) v. Government of C
  A.P., AIR 1975 AP 269: 1975 1 APLJ 70 Chinnappa
  Reddy, J. speaking for the High Court of Andhra Pradesh
  dealing with the problem of providing housing accommoda-
  tion to Harijans has observed thus:
                                                                    D
        That the housing conditions of Harijans all over tre
        country continue to be miserable even today is a fact
        of which courts are bound to take judicial notice.
        History has made it urgent that, among other prob-
        lems, the problem of housing Harijans should be
        solved expeditiously. The greater the delay the more E
        urgent becomes the problem. Therefore, one can
        never venture to say that the invocation of the
        emergency provisions of the Land Acquisition Act
        for providing house sites for Harijans is bad merely
        because the officials entrusted with the task of taking
        further action in the matter are negligent or tardy in the F
        discharge of their duties, unless, of course, it can be
        established that the acquisition itself is made with. an
        oblique motive. The urgent pressures of history are not
        to be undone by the inaction of the bureaucracy. I am
        not trying to make any pontific pronouncements. But
         I am at great pains to point out that provision for G
         house sites for Harijans is an urgent and pressing
         necessity and that the invocation of the emergency
         provisions of the Land Acquisition Act cannot be said
         to be improper, in the absence of mala fides, merely
         because of the delay on the part of some government
         officials.                                                 H
                                               (italicising by us)-
    200         SUPREME COURT REPORTS                [1988] Supp. 1 S.C.R.

                      What was said by the learn.ed Judge in the context of
A
                provision of housing accommodation to Harijans is equally
                true about the problem of providing housing accommoda-
                tion to all persons in the country today having regard to the
                enormous growth of population in the country. The obser-
                vation made in the above decision of the High Court of
B               Andhra Pradesh is quoted with approval by this Court
                in Deepak Pahwa v. Lt. Governor of Delhi, [1985] 1 SCR
                588 even though in the above decision the Court found that
                it was not necessary to say ariything about the post-noti-
                fication delay. We are of the view that in the facts and
                circumstances of this case the post-notification delay of
                nearly one year is not by itself sufficient to hold that the
c               decision taken by the State Government under Section
                17(1) and (4) of the Act at the time of the issue of the
                notification under Section 4(1) of the Act was either impro-
                per or illegal."

D         Apart from what has been pointed out above we have already
    held that on the facts of the instant case there was sufficient justifica-
    tion for invoking the provisions of Section 17(4) of the Act and dis-
    pensing with a further inquiry under Section 5A of the Act.

          With regard to the submission made by learned counsel for
E   Respondents 1 and 2 that since land other than land of Plot No. 289
    which already stood acquired had also been included in the fresh
    Notification dated 20th may, 1982 under Section 4(1) of the Act it
    indicated lack of application of mind suffice it to say that the orijlinal
    record produced before us by learned counsel for the State Govern-
    ment indicates that the deliberations which took place after the direc-
F   tion of this Court dated 22nd October, 1979 in Civil Appeal No. 2970
    of 1979 were with regard to Plot No. 289 and the inclusion of the other
    land in the Notification seems to be not the result of lack of app_lication
    of mind on the part of the officers concerned but dute to inadvertent
    copying out of the entire plots included in the Notification under Sec-
    tion 4(1) dated 26th October, 1978 at some clerical level and it does
G   not in any way have the effect of invalidating the fresh Notifications
    with regard to Plot No. 289. The submission about the lack of applica-
    tion of mind before issuing the said Notification has also, therefore, no
    substance. The effect of issuing a fresh Notification under Section 4(1)
    and the delay in issuing it bas really benefited Respondents 1 and 2
    inasmuch as now they will be entitled to compensation not on the basis
H   of the market value of Plot No. 289 as on 26.10.1978 when the earlier
         KRISHI UTPADAN SAMITI v. R.P. MANGAL [OJHA, J.]             201

Notification under Section 4(1) was issued but as on 20th May, 1982         A
when the fresh Notification under the said Section was issued.

     In the result, Civil Appeal No. 3446 of 1987 is allowed, the
judgment dated 1lth March, 1987 of the High Court in Writ Petition
No. 6789 of 1982 is set aside and the said writ petition is dismissed. As
                                                                            B
a consequence Civil Appeal No. 3447 of 1987 is dismissed. In the
circumstances of the case there shall be no order as to costs.

S.L                                      C.A. No. 3446/87 is allowed and
                                          C.A. No. 3447/87 is dismissed.