Supreme Court of India
M/S MUTHA ASSOCIATES AND ORS.versusSTATE OF MAHARASHTRA AND ORS.
- Citation
- 2013 INSC 433
- Decided
- 4 July 2013
- Disposal
- Disposed off
- Bench
- T S THAKUR
Holding
The Supreme Court affirmed the High Court’s upholding of the acquisition proceedings and its quashing of the withdrawal order for lack of notification and violation of natural justice, but held that the Minister’s order was not proved to be malafide.
Summary
The case concerned the acquisition of land in Pune for the extension of the Agricultural Produce Market Committee (APMC) market yard, designated for a "Bamboo Trade and Flea Market". The land owners and Mutha Associates failed to object during the planning and acquisition stages and only challenged the award after possession was taken, leading the High Court to dismiss their writ petition on grounds of delay and lack of merit. The State, invoking Section 48 of the Land Acquisition Act, withdrew the acquisition proceedings, but the High Court set aside the withdrawal because it was not published in the Gazette, denied a hearing to the APMC, and was arbitrary and malafide. The Supreme Court upheld the High Court’s decision on the validity of the acquisition and the procedural defects in the withdrawal, but reversed the finding that the Minister acted malafide, holding that suspicion alone does not prove malice. Consequently, the appeals of the land owners were dismissed, while the Minister’s appeal was allowed in part.
Issues considered
- The validity of the acquisition proceedings in view of the plaintiffs' delay and laches under Article 226.
- Whether the purpose stated in the acquisition declaration (Bamboo Trade and Flea Market) is consistent with the purpose for which the land was reserved.
- Whether withdrawal of acquisition under Section 48 of the Land Acquisition Act must be notified in the Official Gazette.
- Whether principles of natural justice, including a hearing, apply to the withdrawal of acquisition proceedings under Section 48.
- Whether the Minister's order withdrawing the acquisition was malafide and what standard of proof is required for such a charge.
Legislation cited
- Land Acquisition Act, 1894s. 12(2), s. 126(2), s. 4, s. 48, s. 6, s. 9
- Maharashtra Regional and Town Planning Act, 1966s. 126(2), s. 26, s. 28, s. 31, s. 6
Subjects
land acquisitiondelaylachesnatural justicemalafideSection 48public purposeadministrative lawMaharashtra Regional and Town Planning Act
Judgment
(2013] 10 S.C.R. 1051
MIS MUTHA ASSOCIATES AND ORS. A
v.
STATE OF MAHARASHTRA AND ORS.
(Civil Appeal No. 2853 of 2002 etc.)
JULY 4, 2013
B
[T.S. THAKUR AND M.Y. EQBAL, JJ.]
Land Acquisition Act, 1894:
s.6 rlw. s.126(2) of Maharashtra Regional and Town c
Planning Act, 1966 - Acquisition of land - By Municipal
authorities - For extention of 'Bamboo Trade and Flea·Market'
by Agricultural Produce Market Committee - Under
development plan for the city - Acquisition proceedings
challenged - High Court upheld the proceedings - Held: The D
High Court rightly upheld the acquisition proceedings on the
grounds of delayllaches as well as on merits - There was no
dichotomy between the purpose notified and the purpose for
which the reservation was made.
s.48 - Withdrawal of land acquisition proceedings - By the E
Minister of Revenue - Withdrawal challenged - High Court set
aside the withdrawal order on the grounds that the same was
not notified in official Gazette, it was violative of principles of
natural justice and the reasons for withdrawal were not
sustainable - Held: Withdrawal order was rightly set aside by F
the High Court - Withdrawal order was arbitrary, lacked
objectivity, it was passed by ignoring material on record and
was violative of principles of natural justice.
Administrative Law - Administrative decision - Malafide G
- A/legation of - Standard of proof - Held: Merely because
action by public authority is found untenable, it cannot be
called malafide - An action may continue to be bonafide and
in good faith, even if the public authority has committed
1051 H
1052 SUPREME COURT REPORTS [2013] 10 S.C.R.
A mistakes or irregularities or breached principles of natural
justice - Suspicion however strong, cannot be proof of charge
of malafide - In the facts of the case, malafide not proved
against the public authority.
Delayllaches - Challenge to acquisition proceedings u/
8
Art. 226 of the Constitution - Held: The Court can decline to
invoke its power of judicial review under Art.226 to interfere
with acquisition proceedings, if the challenge to such
proceedings is belated and the delay is unexplained -
C Constitution of India, 1950 - Art.226.
Pune Municipal Corporation i.e. the planning
authority under Maharashtra Regional and Town
Planning Act (MRTP Act) published the draft of its revised
Development Plan for the city of Pune in the official
D Gazette. The area in question was reserved for the
extention of the Agricultural Produce Market Committee
(APMC) market yard. The plan was sanctioned by the
State wherein the land in question was shown as
reserved for APMC for the purpose of 'Bamboo Trade and
E Flea Market' and authorised APMC for acquisition of the
land in question for the development.
Notification was issued in November 1987 u/s. 126(2)
of MRTP Act r/w. s.6 of Land Acquisition Act. No
objections were filed by the owners of the land or the
F builders-appellant. However, they filed application before
Chief Minister of the State praying for deletion of the land
under acquisition from reservation. In the meantime
award was passed in the acquisition proceedings. The
request made to the Chief Minister was rejected. After the
G notice for possession of the land was issued, the land
owners filed civil suit against the award. During pendency
of the proceedings, the owners as well the builder-
appellant filed writ petition No.670 of 1996, which was
entertained on the condition that they would withdraw the
H suit.
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1-0$3
MAHARASHTRA AND ORS.
During pendency of the writ petition, the State by A
invoking its powers u/s.48 of the Land Acquisition Act,
directed withdrawal of proceedings qua the land in
question. Aggrieved thereby, APMC filed writ petition No.
3620/1998.
B
High Court dismissed the writ petition filed by the
land owners and buiider-appellants, upholding the
acquisition proceedings. The writ petition filed by APMC
was allowed holding that the withdrawal of the
acquisition proceedings was not valid because the
withdrawal notification was not published in the official C
Gazette; because the order was passed without hearing
the beneficiary of the acquisition i.e. APMC; and because
the reasons given by the Minister of Revenue for
withdrawal were unsustainable. The Court also held that
the withdrawal order passed by the Minister was D
malafide. Hence the present appeals were filed by the
land-owners and developer and also by the Minister of
Revenue.
Dismissing the appeals filed by the land-owners and E
the builder with cost assessed at Rs.5 lakhs, and partly
allowing the appeal filed by the Minister, the Court,
HELD: 1.1. In the present case, the appellant owners
or the Builders did not file any objections or move their
little finger till the making of the award by the Collector. F
Instead of filing of the objections, opposing the proposed
acquisition before tile Collector and seeking redress at
the appropriate stage, they remained content with making
representations to the minister which w~ not a remedy
recognised by the statute. It was only after the Collector G
had made his award and after notice foLtaking over
possession was issued by the appellants that they
rushed to the civil court with a suit in which too they did
not assail the validity of the declaration under Section
26(2) of the Maharashtra Regional and Town Planning H
1054 SUPREME COURT REPORTS [2013] 10 S.C.R.
A Act, 1966 (MRTP) Act read with Section 6 of the Land
Acquisition Act. The remedy by way of a suit was clearly
misconceived. [Para 17] [1074-C-E]
State of Bihar v. Dhirendra Kumar and Ors. (1995) 4
B SCC 229: 1995 (3) SCR 857; Municipal Corporation of
Greater Bombay v. l.D. I. Co. Pvt. Ltd. and Ors. (1996) 11 SCC
501: 1996 (5) Suppl. SCR 551; Ramjas Foundation and Ors.
v. Union of India and Ors. 1993 Supp (2) SCC 20: 1992 (2)
Suppl. SCR 426; Larsen and Toubro Ltd. v. State of Gujarat
C and Ors. (1998) 4 sec 387: 1998 (2) SCR 339 - relied on.
Af/atoon and Ors. v. Lt. Govemorof Delhi and Ors. (1975)
4 SCC 285: 1975 (1) SCR 802; lndrapuri Griha Nirman
Sahakari Samiti ·ud. v. The State of Rajasthan and Ors.
(1973) 4 sec 296 - followed.
D
1.2. In order to succeed in a challenge to the
acquisition proceedings, the interested person must
remain vigilant and watchful. If instead of doing so, the
interested person allows grass to grow under his feet, he
E cannot invoke the powers of judicial review exercisable
under Article 226 of the Constitution. The failure of the
interested persons to seek redress at the appropriate
stage and without undue delay would in such cases give
rise to an inference that they have waived of their
objections to the acquisitions. The bottom line is that the
F High Court can legitimately decline to invoke their powers
of judicial review to interfere with the acquisition
proceedings under Article 226 of the Constitution if the
challenge to such proceedings is belated and the
explanation offered a mere moon shine as is the position
G in the present case. The High Court has in the fact
situation of this case rightly exercised its discretion in
refusing to interfere with the acquisition proceedings.
[Para 18] (1075-B-E]
H 2.1. The High Court has even on merits found that the
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1055
MAHARASHTRA AND ORS.
challenge to the acquisition proceedings was unfounded. A
The proposed acquisition was notified with a view to
extending the APMC market yard. This extension was,
according to the APMC, meant to enable it to use the
acquired area for not only regulating bamboo trade but
also a flea market. That being so, it is difficult to see how B
the purpose indicated in the declaration was in any way
different from the purpose for which the area was
reserved. The High Court has correctly held that both the
purposes were public purposes and that APMC had
repeatedly asserted that the acquisition will eventually c
lead to the use of the acquired area for the purpose for
which the same was reserved namely, bamboo trade and
flea market [Paras 19 and 20] [1075-E-F; 1076-A-B]
2.2. The fact that the bamboo trade was on the date
of the declaration not legally open for regulatory control D
of the APMC would not make any material difference
having regard to the fact that flea market was at any rate
permissible at all points of time for there was no legal or
other impediment in the APMC regulating a flea market
in its market yard. The restrictions on the bamboo trade E
were also removed on account of vacation of stay
granted by the Government. The result was that as on the
date of the judgment delivered by the High Court, the
APMC was and continues to be free to regulate bamboo
trade also. Suffice it to say that the High Court has F
correctly analysed the issue and rightly held that there
is no dichotomy between the purpose notified and the
purpose for which the reservation was made. There is no
flaw in the reasoning of the High Court insofar it upheld
the validity of the acquisition proceedings even on merits. G
[Para 20] [1076-B-E]
3. Withdrawal of acquisition must be notified in terms
of Section 48 of the Land Acquis.ition Act. There was
admittedly no such publication in the instant case which
H
1056 SUPREME COURT REPORTS [2013] 10 S.C.R.
A rendered the withdrawal order non-est in the eyes of law.
[Paras 23 and 26] [1077-C; 1078-E]
State of Maharashtra v. Umashankar Rajabhau (1996)
1 SCC 299: 1995 (5) Suppl. SCR 39; Mis. Larsen and
B Tourbo Ltd. v. State of Gujarat and Ors. (1998) 4 SCC 387:
1998 (2) SCR 339 - relied on.
Prakash Vasudev Deodhar and Ors. v. State of
Maharashtra and Ors. 1993 MLJ page 1768 - referred to.
C 4.1. A requirement of compliance with the principles
of natural justice and consequently a hearing to the
beneficiary affected by withdrawal of acquisition
proceedings is not incorporated in specific words in
Section 48 of the Act. That does not, however, make any
material difference because the law is well-settled that if
D a statutory provision could be read consistently with the
principles of natural justice, the Courts would prefer do
so. That is because it can be presumed that the legislature
and the statutory authorities intend to act in accordance
with such principles. In case, however, the statutory
E provisions either specifically or by necessary implication
exclude the application of the principles of natural justice,
the Court cannot ignore the mandate of the legislature
and read into any such provision the principles of natural
justice. [Para 27] [1078-F-H; 1079-A-B]
F
4.2. In the present case, the obligation to hear existed
but was not satisfactorily discharged by the Minister
while taking a decision in the matter, which is, by itself
sufficient to vitiate the action taken by him independent
of the fact that any order directing withdrawal of
G acquisition ought to have culminated into a proper
notification and published in the official Gazette. [Para 31]
[1081-B-C]
Union of India v. Col. J.N. Sinha (1970) 2 SCC 458: 1971
H (1) SCR 791 - relied on.
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1057
MAHARASHTRA AND ORS.
5.1. The High Court found that the reasons given in A
the order of withdrawal passed by the Minister were
wholly unsustainable. One of the r_easons for withdrawal
was that the APMC was not authorised to deal in bamboo
and fire wood from 1977 till 1995 and that even though
notification dated 6th February, 1995 included bamboo B
and fire wood in the coverage of the APMC, the
implementation of the said order had been stayed by the
State Government. The High Court found that the stay
granted by the State Government stood vacated and a
specific mention of this fact was made in para 6 of the c
representation of the APMC filed before the Minister. Not
only that a copy of the notification vacating the stay
against bamboo trade was enclosed. Even the developer
on whose representation the withdrawal was ordered had
conceded that the stay granted by the State Government D
had been vacated. Ignoring these facts the Minister
appears to have taken a stance that was .contrary to the
admitted position on record; implying complete non-
application of mind on his part. [Paras 32 and 33] [1081-
C-E, F-H; 1082-A]
E
5.2. The other reason given for withdrawal of the
acquisition proceedings was that the APMC has used
land otherwise available to it for activities like a beer bar,
a hotel and a restaurant. The High Court found that the
representation of the developers and owners made no F
such referer:ice to any such activity. No other material
was placed before the Minister at the hearing which could
possibly justify the Minister's oral observations made in
the course of hearing regarding mis-utilisation of the land
or justify the withdrawal of the acquisition proceedings. G
The High Court also found fault with the Minister making
use of the report received from the Collector after the
closure of the hearing and behind the back of the APMC
without any notice or opportunity to it to file objections
to the same. The APMC sought to justify the facilities of H
1058 SUPREME COURT REPORTS [2013] 10 S.C.R.
A a hotel and a restaurant and ancillary services without
which heavy turnover of business and economic activity
as was being seen and managed by the APMC was not
possible. [Paras 34 and 35) [1082-C-F]
5.3. The High Court was perfectly justified in holding
8 that the order passed by the Minister lacked objectivity
and was hasty without due and proper consideration of
the relevant circumstances and the material on record.
There is no infirmity in the said findings. Thus, the order
passed by the Minister directing withdrawal of the
C acquisition proceedings was bad not only because it was
arbitrary, lacked objectivity and ignored the material on
record but also because the said order was passed
without offering to the APMC a fair and reasonable
opportunity of being heard in the matter. That the order
D was not notified was only an additional reason that
rendered the order legally unsupportable which the High
Court rightly quashed. [Para 36) [1083-A, C-0)
6.1. The allegations suggesting "malice in fact"
should be specific and supported by necessary
E particulars. Vague and general averments to the effect
that the action under review was taken malafide would
not therefore suffice. The burden to establish that the
action under challenge was indeed malafide rests heavily
upon the person making the charge; which is taken as
F quasi criminal in nature and can lead to adverse
consequence for the person who is proved to have acted
malafide. There is in fact a presumption that the public
authority acted bonafide and in good faith. That
presumption can no doubt be rebutted by the person
G making the charge but only on cogent and satisfactory
proof whether direct or circumstantial or on admitted facts
that may support an inference that the action lacked
bonafides and was for that reason vitiated. The third
principle is that the person against whom the charge is
H made must be impleaded as a party to the proceedings
MIS MUTHA ASSOCIATES AND ORS. v. STATE OF 1059
MAHARASHTRA AND ORS.
and given an opportunity to refute the charge against him. A
[Para 39] (1085-D-G] ·
State of M.P. and Ors. v. Nandlal Jaiswal and Ors. (1986)
4 sec 566: 1987 (1) SCR 1 - relied on.
6.2. The charge of malafides levelled against the then B
Minister was not supported by any particulars. The writ
petition filed by APMC did not provide specific particulars
or details of how the decision taken by minister was
influenced by the builder or by any other person for that
matter. The averments made in the writ petition in that C
regard appeared to be general and inferential in nature.
Such allegations were insufficient to hold the charge of
'malice in fact' levelled against the minister proved. [Para
45] [1089-E-G]
D
6.3. Though High Court has enumerated certain stark
irregularities in the decision making process or the use
of material obtained on behalf of the back of the
beneficiary of the acquisition as also the denial of fair
opportunity to the beneficiary to present its case before E
the minister yet those irregularities do not inevitably lead
to the conclusion that the minister had acted malafide.
Failure to abide by the principles of natural justice are
consideration of material not disclose to a party or non-
application of mind, to the material available on record
F
may vitiate the decision taken by ttie authority concerned
and may even constitute malice in law but the action may
still remain bonafide and in good faith. It is trite that every
action taken by a public authority even found untenable
cannot be dubbed as malafide simply because it has
fallen short of the legal standards and requirements for G
an action may continue to be bonafide and in good faith
no matter the public authority .passing the order has
committed mistakes or irregularities in procedures or
even breached the minimal requirements of the principles
of natural justice. [Para 46] [1089-G-H; 1090-A-C] H
1060 SUPREME COURT REPORTS [2013] 10 S.C.R.
A 6.4. The High Court has attributed to the Minister
malafides simply because the order passed by him was
found to be untenable in law. Such an inference was not
justified, no matter the circumstances enumerated by the
High Court may have given rise to a strong suspicion that
s the minister acted out of extraneous considerations.
Suspicion, however, strong cannot be proof of the
charge of malafide. It is only on clear proof of high degree
that the court could strike down an action on the ground
of malafide which standard of proof was not satisfied in
c the instant case. To the extent the High Court held the
action of the minister to be malafide, the impugned order
would require correction. [Para 46) (1090-D-F]
State of Bihar v. P.P. Sharma 1992 Supp. (1) SCC 222:
1991 (2) SCR 1;
D
Smt. Swaran Lata v. Union of India & Ors. (1979) 3 SCC
165; Minor A Paeeiakaruppan v. Sobha Joseph (1971) 1
SCC 38: 1971 (2) SCR 430; E.P. Royappa v. State of T.N.
(1974) 4 sec 3: 1974 (2) SCR 348 - relied on.
E
Case Law Reference:
1975 (1) SCR 802 followed Para 16
1995 (3) SCR 857 relied on Para 17
F (1973) 4 sec 296 followed Para 18
1996 (5) Suppl. SCR 551 relied on Para 18
1992 (2) Suppl. SCR 426 relied on Para 18
1998 (2) SCR 339 relied on Para 18
G
1995 (5) Suppl. SCR 39 relied on Para 23
1998 (2) SCR 339 relied on Para 23, 25
1993 MLJ page 1768 referred to Para 26
H
MIS MUTHA ASSOCIATES AND ORS. v. STATE OF 1061
MAHARASHTRA AND ORS.
1971 (1) SCR 791 relied on Para 28 A
1991 (2) SCR 1 relied on Para 40
1987 (1) SCR 1 relied on Pa·ra 42
(1979) 3 sec 1ss relied on Para 43 B
1971 (2) SCR 430 relied on Para 43
1974 (2) SCR 348 relied on Para 43
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2853 of 2002. c
From the Judgment and Order dated 09.04.2001 of the
High Court of Judicature at Bombay in Writ Petition No. 670
of 1996.
WITH D
C.A. Nos. 2854, 2855 & 2856-2857 of 2002.
Ranjit Kumar, V. A. Bobde, Sidharth Bhatnagar, Prasenjit
Keswani, Satyajit Saha, V.D. Khanna, Krishnamurthi, Swami,
Aniruddha P. Mayee, Sanjeev Kumar Choudhary, Kamna E
Sagar for the Appellants.
C.U. Singh, Gurukrishna Prasad, M.L. Patil, Shivaji M.
Jadhav, Rahul Jain, Jayashree Wad, Ashish Wad, Tamali Wad,
Kanika Bhutani, Aditya Gupte, Sanjay Kharde, Asha Gopalan
F
Nair, S.K. Jain, Abhishek Singh, Chandan Ramamurthi for the
Respondents.
The Judgment of the Court was delivered by
T.S. THAKUR, J. 1. These appeals by special leave arise G
out of a common Judgment and Order dated 9th April, 2001
passed by a Division Bench of the High Court of Judicature at
Bombay whereby the High Court has dismissed Writ Petition
No.670 of 1996 and upheld a notification dated 13th November,
1987 issued under Section 126 (2) of the MRTP Act read with H
1062 SUPREME COURT REPORTS (2013) 10 S.C.R.
A Section 6 of the Land Acquisition Act and published in the
Official Gazette on 3rd December, 1987. The High Court has
by the same judgment and order quashed order dated 20th
May, 1998 issued under Section 40 of the Land Regulation Act
directing withdrawal of the acquisition proceedings, and
B allowed Writ Petitions No. 3620 and 3874 of 1998. Facts
leading to the filing of the writ petitions and the present appeals
may be summarised as under:-
2. Pune Municipal Corporation which is also the Planning
Authority under the MRTP Act published a notification on 13th
C May, 1976 declaring its intention to revise the development plan
for the Pune city and inviting suggestions and objections to the
proposed revision. The Draft Revised Development Plan inter
alia covered site No.M-145 comprising Survey No.559/28
admeasuring 1 hectare 20 acres (approximately) which was
D under the orders of Director, Town Planning shown as reserved
for the extension of the APMC market yard. The Draft
Development Plan published in the Official Gazette on 7th
October, 1982 in terms of Section 26 of the MRTP Act clearly
reflected the reservation aforementioned.
E
3. The Revised Development Plan was eventually
sanctioned by the State Government in which the parcel of the
land aforementioned owned by late Pralhad Lokram Dodeja and
his brother late Bansidhar Dodeja, appellants in Civil Appeal
F No.2854 of 2002 continued to be shown as reserved for APMC
with the only change that instead of extension of the APMC
market yard the designated purpose shown was "Bamboo
Trade and Flea Market". The sanctioned Revised Development
Plan further declared APMC to be the appropriate authority for
acquisition and development of the said parcel of land. What
G is important is that although the Planning Authority had declared
its intention to prepare a Revised Development Plan as early
as in May 1976 and invited objections and suggestions from
the public and although the Revised Draft Plan was published
under Section 26 of the Act in the Official Gazette on 7th
H
MIS MUTHAASSOCIATES AND ORS. v. STATE OF 1063
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
October, 1982, no objections were filed to the same by the land A
0~1mers aforementioned at any point of time. It is in that
backdrop that the appellant-Mutha Associates, for the first time,
came on the scene on 8th March, 1984 when they acquired
what was described as development rights over the disputed
parcel of land upon payment of the earnest money of B
Rs.50,000/- only.
4. Pursuant to the sanction granted by the State
Government under Section 31 of the MRTP Act, the
Commissioner of Pune Division issued a declaration on 13th C
November, 1987 under Section 126 (2) of the MRTP Act read
with Section 6 of the Land Acquisition declaring that the parcel
of land aforementioned was needed for the public purpose of
extension of market yard. This notification was published in the
Official Gazette on 3rd December, 1987. The Special Land
Acquisition Officer appointed for the purpose in due course D
issued notices to the owners as also to the appellant-Mutha
Associates on 15th October, 1988, 31st December, 1988, 11th
April, 1989 and 21st April, 1989. No objections were filed either
by the owners or by· Mutha Associates-their agent/Builder
despite the said notices. Instead they moved two applications E
before the Chief Minister of the State of Maharashtra one on
11th September, 1989 and the other on 13th October, 1989
praying for deletion of the land under acquisition from
reservation. The Special Land Acquisition Officer, however,
·went ahead with the acquisition proceedings and made an F
award on 9th November, 1989, pursuant whereto the
respondent-APMC deposited a sum of Rs.26,29,872/- towards
the cost of acquisition on 16th October, 1990. The request of
the appellants for deletion of the land from acquisition
proceedings was finally rejected by the Government on 5th G
November, 1990 thereby clearing the decks for completing the
acquisition proceedings.
5. The Land Acquisition Officer accordingly issued a notice
under Section 12(2) of the Land Acquisition Act for taking over H
1064 SUPREME COURT REPORTS (2013] 10 S.C.R.
A the possession of the land which was received by the land
owners on 24th November, 199Q. The possession was
scheduled to be taken over on 26th November, 1990 at which
stage the land owners filed Regular Civil Suit No.2194of1990
before the Civil Judge, Senior Division, Pune against the State
B of Maharashtra and the Land Acquisition Officer challenging the
award made by the Collector. In the suit the Civil Judge, Pune
passed an interlocutory order directing the parties to maintain
status quo which order was challenged by the defendants
before the High Court in a Civil Revision that was allowed with
c a direction to the trial Court to decide the application for interim
relief without reference to the application for appointment of a
Local Commissioner made by the owners. The Civil Judge
accordingly heard and dismissed the application of the owners
for interim relief, aggrieved whereof the landowners filed an
appeal before the High Court.
0
6. It was during the pendency of the said appeal that the
owners and Mutha Associates filed Writ Petition No.670 of
1996 challenging the acquisition proceedings. The writ petition
was entertained by the High Court on an assurance given by
E the appellants that the appeal filed by them against the refusal
of the interim order and so also Original Suit No.2194 of 1990
shall be withdrawn by them.
7. While Writ Petition No.670 of 1996 was pending
F disposal, the State Government passed an order dated 20th
May, 1998 whereby the Government purported to invoke their
power under Section 48 of the Land Acquisition Act to direct
withdrawal of the acquisition proceedings qua the land in
question. Aggrieved by the said order, the APMC filed Writ
G Petition No.3620of1998 challenging the withdrawal on several
grounds including the ground that the APMC was not given a
hearing before the acquisition proceedings were withdrawn
and that the withdrawal order was at any rate arbitrary and
malafide hence unsustainable. Writ Petition No.3874 of 1998
was also filed by a few agriculturists who apprehended that the
H
MIS MUTHA ASSOCIATES AND ORS. v. STATE OF 1065
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
APMC may withdraw writ petition No.3620 of 1998 and, A
thereby, allow the withdrawal of acquisition to attain finality.
8. The High Court has, as mentioned earlier, heard and
disposed of all the three writ petitions together. It has while
doing so dismissed Writ Petition No.3620 of 1998 and upheld
B
the acquisition proceedings not only· on the ground that the
challenge to the said proceedings was highly belated but also
on the ground that there was no merit in the grounds of
challenge. The High court held that the reservation for Bamboo
Trade and Flea Market was in no way different from extension C
of the market yard - the purpose for which acquisition
proceedings had been started and that both the purposes were
public purposes apart from the authority designated for
acquiring the land in dispute being one and the same. The High
Court also relied upon a specific assertion made by the APMC
that the land in question shall be used for Bamboo Trade and D
Flea Market only. In particular, High Court referred to Para 3
of the writ petition in which the petitioners had themselves
stated as under:
"the petitioner's thus state that the additional land was E
sought for by the respondent No.3 to extend the market
yard to enable them to accommodate the activities of
bambaoo trade which was incorporated in entries 5 and
6 under the heading No.XV forest products in the
Schedule to the said Act. " F
9. The High Court repelled the contention that the
provisions of Section 37 of the Act were applicable to the case
at hand and distinguished the decisions that were relied upon
by the writ petitioners-appellants in support of that contention
and dismissed Writ Petition No.670 of 1996. G
10. In Writ Petitions No.3620 of 1998 and 3874 of 1998
the High Court found that the withdrawal of the acquisition
proceedings was not valid not only because the withdrawal
notification was not published in the Official Gazette but also H
1066 SUPREME COURT REPORTS [2013] 10 S.C.R.
A because the APMC-the beneficiary of the acquisition
proceedings had not been given an opportunity of being heard
by the Minister concerned before directing withdrawal of the
said proceedings. The High Court went a step further and held
that Shri Rane, the then Minister, not only acted in violation of
B the principles of natural justice but made one sided
observations during the proceedings and used the Collector's
report at the back of APMC and finally passed an orqer ignoring
the legal provisions and the pendency of an earlier writ petition
from which one could infer that the Minister had acted under
c the influence of Shri Mutha and directed withdrawal of the
acquisition proceedings for his benefit.
11. The High Court also noted the fact that in Writ Petition
No.3874 of 1998, there was a clear assertion that because of
the influence of Shri Mutha the Minister-Shri Rane had moved
D to supersede the APMC in July, 1998 within two months of the
date of withdrawal order dated 20th May, 1998. This
supersession was according to the writ-petitioners aimed at
ensuring that the challenge to the order of withdrawal was
withdrawn by the officer who took over the reins of the APMC
E by withdrawing Writ Petition No.3620 of 1998. The High Court
also found the supersession of APMC to be a strong
circumstance that could not be brushed aside no matter Shri
Rane had chosen to deny the allegations made against him.
The High Court eventually concluded:
F
"This clearly showed his malafides. In the circumstances,
we cannot but hold that the order passed by Shri Naryan
Rane, the then Revenue Minister is in gross violation of
principles of natural justice, is a perverse order, without
any supporting material, and is actuated by malafides and
G
is nothing short of misuse of powers to favour the land
developers. By looking to the totality of the material on
record that is the conclusion which is inescapable. "
12. The present appeals assail the correctness of the
H findings recorded by the High Court, not only, insofar as the
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1067
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
same deal with the validity of the acquisition proceedings, but A
also, insofar as the High Court has held the withdrawal of the
acquisition proceedings to be bad on account of non-
publication of the withdrawal notification, the non-observance
of principles of natural justice and the malafide exercise of
power vested in the Minister under Section 48 of the Land B
Acquisition Act.
13. We may before adverting to the submissions made at
the bar, first deal with a matter of some significance especially
because, the appeals have abated on account of the death of
the owners-appellants 2 & 3 as no application for substitution C
of the legal representatives was moved by the appellant-Mutha
Associates or the legal heirs of the deceased appellants.
Interlocutory Application No.6 filed after considerable delay,
however, seeks condonation of delay, setting aside of
abatement and for substitution of the legal heirs in place of the D
deceased appellants. This application has been stoutly
opposed by the respondents who have filed objections
asserting inter alia that the application does not, explain the
inordinate delay nor does it show that the applicants or even
Mutha Associates acted diligently in the matter. The opposition E
is not without basis. We say so because appellant No.2-
Pralhad Lokhram Dodeja died on 3rd December, 2006, while
appellant No.3-Bansidhar Lokram Dodeja passed away much
earlier on 22.11.2003. Interlocutory Application No.6 seeking
condonation, setting aside of abatement and substitution was, F
however, filed only on 14th October, 2011 which implied that
there is a delay of nearly five years in the filing of the application
qua Appellant No.2 and nearly eight years qua appellant No.3.
Keeping in view the limitation prescribed for making such an
application, the delay is inordinate to say the least. There is no G
explanation worth the name, leave alone a cogent one for the
said delay. It is not the case of the legal heirs of the deceased
that they were unaware of the pendency of the appeal in which
their predecessors in interest were appellants. It is also not the
case of Appellant No.1-Mutha Associates that it was unaware H
1068 SUPREME COURT REPORTS [2013] 10 S.C.R.
A of the death of the two appellants from whom it had acquired
development rights and a power of attorney. No such plea could
even otherwise be taken by appellant-Mutha Associates, having
regard to the fact that in the reply to the contempt petition filed
on its behalf a specific, averment had ·been made by the
B respondents that both appellants 2 and 3 had passed away.
As a matter of fact in paras 6 and 7 of the Interlocutory
Application No.6, the appellant Mutha Associates has clearly
admitted this fact, in the following words:
"6. The Appel/ant/Petitioner No. 1 further states that
c Appel/ant/Petitioner No.2 and Appellant/Petitioner No.3
died during the pendency of the Appeal on 3rd
December, 2006 and 22nd November, 2003 respectively.
The Appellant/Petitioner No. 1 states that it is true that the
Respondents had mentioned about the death of original
D Appellants Nos.2 and 3 in their affidavit-in-reply filed in
August 2010 in this Hon'ble court in Contempt Petition
No.108 of 2010 in Civil Appeal No.2853 of 2002.
7. The Appellant/Petitioner No. 1 however states that the
E Appellants/Petitioner No. 1inadvertently missed this
aspect, which was taken in the contempt proceedings.
Thus, steps could not be taken for substitution
immediately thereafter. "
14. The above does not constitute a reasonably acceptable
F explanation for the inaction and resultant delay on the part of
the legal representatives of the deceased appellants or Mutha
Associates. The ipxit dixit of the appellant Mutha Associates
cannot be accepted as a ground for condoning delay that
spreads over years and implies complete indolence and lack
G of diligence on its part. So also the absence any worthwhile
reason for the failure of the legal heirs to come forward and
apply for substitution disentitles them to any relief by way of
condonation, setting aside abatement and substitution. The fact
that Mutha Associates has during the pendency of the
H proceedings in this Court allegedly acquired 37.5% share in
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1069
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
the property by way of sale in their favour from persons who A
never came forward to challenge the acquisition proceedings
at any stage and who remained content and in complete
oblivion makes little difference. Any such acquisition pendente
lite and after the land stood vested in the APMC needs to be
noticed only to be ignored. The alleged acquisition on the B
contrary casts a cloud over the bonafides of Mutha Associates
who came to the Court for relief on the basis of a power of
attorney executed in its favour by the owners and a development
agreement that did not by itself clothe it with the locus standi
to assail the acquisition independent of the owners but now c
seeks to improve its case by setting up an acquisition post the
preliminary notification. Suffice it to say that Interlocutory
Application No.6 deserve to be and is hereby dismissed as
without merit and Appeals No.2853/2002, 2854/2002, 2855/
2002 and 2856-2857/2002 filed by the appellant owners and D
Mutha Associates in its capacity as an attorney/agent as having
abated.
15. Having said that we do not intend to neglect the
contentions that were urged on merits at considerable length
by learned counsel for the parties. The challenge to the E
acquisition proceedings was, as seen earlier, negatived by the
High Court not only on the ground of unexplained delay and
laches but also on merits. The High Court was in our opinion
perfectly justified in doing so. The challenge to the acquisition
proceedings was indeed highly belated having regard to the. F
fact that Planning Authority had declared its intention to revise
the development plan for Pune city, and invited objections to
the proposal as early as in May, 1976. The Special Officer
authorized by the Government to discharge the functions of the
Planning Authority then issued a notification under Section 26(1) G
of the MRTP Act publishing the Revised Development Plan and
inviting objections in September, 1982. It is also not disputed
that the land in question was reserved in the Revised
Development Plan for extension of Market Yard and the
Appropriate Authority for acquisition of the same was shown H
1070 SUPREME COURT REPORTS [2013] 10 S.C.R.
A to be the APMC. The land owners did not file any objections
to the proposed reservation of their land in the Revised
Development Plan. In April 1984 the Special Officer submitted
a revised development Plan under Section 28 of the MRTP Act
for approval. The draft plan was sanctioned and published in
B the official gazette on 29th January, .1987 in which the land in
question continued to be reserved' though the designated
purpose was shown to be "Bamboo Trade and Flea Market".
The process for acquisition of the land was then started under
Section 126(2) of the MRTP Act read with Section 6 of the
c Land Acquisition Act. This declaration was made on 13th
November, 1987. Not only that, specific notices were sent to
the land owners as well as to M/s Mutha Associates Developers
on different dates of hearing. Despite the publication and the
servic'e of notices no objections were filed by the land owners
or Mis Mutha Associates Developers. In the absence of any
0
objections or opposition to the proposed acquisition the Land
Acquisition Officer was free to make an award which he did
on 9th November, 1989. It was only after the Collector (Land
Acquisition) initiated the proceedings for taking over the
possession of the land in question that the land owners filed a
E civil suit in which they challenged the award made by the
Collector without raising any question regardi.ng the validity of
the declaration made under Section 126(2) of the MRTP Act
read with Section 6 of the Land Acqui~ition Act. That suit
remained pending for nearly six years before the same was
F withdrawn to challenge the acquisition proceedings in Writ
Petition No.670 of 1996 filed before the High Court. This
challenge was on the face of it barred by inordinate delay and
laches. The High Court was fully justified in declining to interfere
with the acquisition proceedings on that ground. The High Court
G while doing so, rightly observed:
'That apart, the gross delay and /aches are most fatal to
this petition. The planning process started in the year
1976. The draft development plan dated 18.9.1982 was
published on 7th October, 1982 under which this
H
MIS MUTHA ASSOCIATES AND ORS. v. STATE OF 1071
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
particular parcel qf land was reserved in favour of one A
APMC for extension of market yard. It was permissible
to the petitioners to lodge their objections under Section
28 of the MRTP Act. Subsequently the plan was
sanctioned and published in the official gazette on
29.1.1987 though with one change that the designated B
purpose was to be bamboo trade and flea market.
Thereafter when the process of acquisition started, the
declaration under Section 126(2) of the MRTP Act read
with Section 6 of the Land Acquisition Act was made on
13th of November 1987. Not only that but specific notices c
to the land owners as well as developers were issued on
15.10.1988 and 31.12.1988. On 15.10.1988 it was
submitted by the first two petitioners that they needed time
in view of the death of their father on 13. 10. 1988 and
hence on their request the proceedings for acquisition D
were adjourned to 14. 11. 1988 on 14. 11. 1988 no claim
was filed and yet by the notice dated 31.12.1988 the
proceedings were further adjourned and the time to file
the claim was extended to 5. 1. 1989. On coming to know
that Mis Mutha Associates had an interest in the land a
E
specific notice was given to Shri Shanti/al Mutha of Mis.
Mutha Associates on 11.4.1989 to lodge the claim if any
by 19.4.1989. Again, on the application given by Mutha
Associates dated 19.4.1989, the Land Acquisition Officer
adjourned the proceedings on 21.4.1989 and recorded
it by his letter of that date of Mis. Mutha Associates. Thus F
the land owners and the land developers were fully aware
of these proceedings and participated therein by filing the
application seeking time but without lodging any claim
or filing any submissions or objections. It was in these
circumstances that the Land Acquisition Officer ultimately G
proceeded to make his Award on 9.11.1989.
Now, as can be seen from the above, instead of
fl1ing their objections before the Land Acquisition Officer,
who has the authority to consider them, the petitioners H
1072 SUPREME COURT REPORTS [2013] 10 S.C.R.
A preferred to directly communicate the same to the then
Chief Minister. The then Chief Minister also rejected their
representation in November 1990. The petitioners did
not choose to challenge that decision as well. It is only
when the Land Acquisition Officer issued a notice for
B taking possession of the land that the petitioners rushed
to the Civil Court wherein they sought to challenge the
Award and an order of status quo came to be passed on
25.11.1990. As rightly pointed out by Mr. Sanghavi, in the
civil suit the notice under section 126(2) of the MRTP Act
c read with section 6 of the Acquisition Act has not been
challenged. It has been challenged for the first time in
this writ petition which was filed on buth (sic) of January
1996 and it is now being contended that there is a
departure from the designated purpose in the acquisition
proceedings and also that the APMC did not have the
D
capacity to deal in the particular items. The submission
that the APMC had large parcel of un-utilized land and
therefore it did not need the land could certainly have
been made when revised draft development plan was
published in the official gazette on 7.10.1982. It is at that
E stage that the petitioners were expected to lodge their
objections to the reservation. After the plan was
sanctioned and became final the acquisition proceedings
were initiated. The declaration under section 126(2) of the
MRTP Act read with Section 6 of the Acquisition Act was
F made on 13. 1. 1987. Thereafter specific notices under
section 9 of the Acquisition Act were given to the land
owners as well as to the developers. They participates in
the proceedings by filing applications for adjournment
and yet no objections were lodged before the Acquisition
G Officer. Thus the Acquisition Officer was left with no
alternative but to finalise the proceedings which he did
by passing the Award of 9.11.1989. The representation
made to the State Government was rejected in
November 1990 but that was also not challenged. In the
H suit filed on 25.11.1990 no challenge was raised to the
MIS MUTHA ASSOCIATES AND ORS. v. STATE OF 1073
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
notice under section 126(2) read with Section 6. That was A
raised for the first time in the present writ petition filed in
January 1996."
16. The legal position, as to the approach which a writ
Court must adopt while examining the validity of acquisition
8
proceedings, is settled by a long line of decisions rendered by
this Court from time to time. It is not necessary to burden this
judgment by referring to all those decisions, for the proposition
of law is so well settled that it hardly bears repetition. We may
simply refer to the Constitution Bench decision of this Court in
Aflatoon and Ors. v. Lt. Governor of Delhi and Ors. (1975) 4 C
sec 285 where this Court was dealing with a case in which
the land owners had not approached the Court after the
declaration under Section 6 of the Land Acquisition Act was
issued by the Collector. It was only after notices under Section
9 of the Act were issued that the owners had come forward to D
urge that there was no public purpose supporting the proposed
acquisition. This Court held that a valid notification under
Section 4 is a sine qua non for initiation of proceedings for
acquisition of property. The owners were not, therefore, justified
in sitting on the fence and allowing the Government to complete E
the acquisition proceedings on the basis that the notification
under Section 4 and declaration under Section 6 were valid and
then to attack the notification on grounds that were available
to them at the time when the notification was published. The
following passage is instructive in this regard: F
"There was apparently no reason why the writ
petitioners should have waited till 1972 to come to this
Court for challenging the validity of the notification issued
in 1959 on the ground that the particulars of the public
purpose were not specified. A valid notification under G
Section 4 is a sine qua non for initiation of proceedings
for acquisition of property. To have sat on the fence and
allowed the Government to complete the acquisition
proceedings on the basis that the notification under
H
1074 SUPREME COURT REPORTS [2013] 10 S.C.R.
A Section 4 and the declaration under Section 6 were valid
and then to attach the notification on grounds which were
available to them at the time when the notification was
published would be putting a premium on dilatory tactics.
The writ petitions are liable to be dismissed on the ground
B of /aches and delay on the part of the petitioners. (see
Tilokchand Motichand v. H.B. Munshi, (1969) 1SCC110,
and Rabindranath Bose v. Union of India, (1970) 1 SCC
84)".
17. The position is no different in the instant case. The
C appellant owners or Mutha Associates Builders did not file any
objections or move their little finger till the making of the award
by the Collector. Instead of filing of the objections, opposing the
proposed acquisition before the Collector and seeking redress
at the appropriate stage they remained content with making
D representations to the minister which was· ,not a remedy
recognised by the statute. It was only after the·Collector had
made his award and after notice for taking over possession
was issued by the appellants that they rushed to,the civil court
with a suit in which too they did l')Ot assail the validity of the
E declaration under Section 26(2) of the MRTP Acf read with
Section 6 of the Land Acquisition Act. The remedy byway of a
suit was clearly misconceived as irldeed this Court d~clared it
to be so in State of Bihar v. Dhirendra Kumar and Ors. (1995)
4 sec 229. The appellants could and ought to have challenged
F the acquisition proceedings without any loss of time. Having
failed to do so, they were not entitled to claim any relief in the
extraordinary jurisdiction exercised by the High Court under
Article 226 of the Constitution.
18. The view taken by the Constitution Bench in Aflatoon
G case (supra) has been reiterated by another Constitution Bench
decision in lndrapuri Griha Nirman Sahakari Samiti Ltd. v. The
State of Rajasthan and Ors. (1973) 4 sec 296. To the same
effect are the decisions of this Court in Municipal Corporation
of Greater Bombay v. I.DJ Co. Pvt. Ltd. and Ors. (1996) 11
H
MIS MUTHA ASSOCIATES AND ORS. v. STATE OF 1075
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
SCC 501, Ramjas Foundation and Ors. v. Union of India and A
Ors. 1993 Supp(2) SCC 20 and Larsen & Toubro Ltd. v. State
of Gujarat & Ors. (1998) 4 SCC 387. The.common thread that
runs through all these decisions is that in order to succeed in
a challenge to the acquisition proceedings the interested
person must remain vigilant and watchful. If instead of doing so, B
the interested person allows grass to grow under his feet he
cannot invoke the powers of judicial review exercisable under
Article 226 of the Constitution. The failure of the interested
persons to seek redress at the appropriate stage and without
undue delay would in such cases give rise to an inference that c
they have waived of their objections to the acquisitions. The
bottom line is that the High Court can legitimately decline to
invoke their powers of judicial review to interfere with the
acquisition proceedings under Article 226 of the Constitution
if the challenge to such proceedings is belated and the D
explanation offered a mere moon shine as is the position in the
case at hand. The High Court has in the fact situation of this
case rightly exercised its discretion in refusing to interfere with
the acquisition proceedings.
19. Delay and laches apart, the High Court has even on E
merits found that the challenge to the acquisition proceedings
was unfounded. The challenge as noticed earlier was primarily
on the ground that on the date of the initiation of the acquisition
proceedings the APMC was not entitled to regulate the
'bamboo trade' and since land in question was reserved for F
bamboo trade in flea market, any acquisition for a purpose
beyond the regulatory powers of the APMC could not be made
a basis for such acquisition.
20. The proposed acquisition, it is not in dispute, was· G
notified with a view to extending the APMC market yard. This
extension was, according to the APMC, meant to enable it to
use the acquired area for not only regulating bamboo trade but
also a flea market. That being so, it is difficult to see how the
purpose indicated in the declaration was in any way different
H
1076 SUPREME COURT REPORTS [2013] 10 S.C.R.
A from the purpose for which the area was reserved. The High
Court has, in our opinion, correctly held that both the purposes
were public purposes and that APMC had repeatedly asserted
that the acquisition will eventually lead to the use of the acquired
area for the purpose for which the same was reserved namely,
B bamboo trade and flea market. The fact that the bamboo trade
was on the date of the declaration not legally open for regulatory
control of the APMC would not make any material difference
having regard to the fact that flea market was at any rate
permissible at all points of time for there was no legal or other
c impediment in the APMC regulating a flea market in its market
yard. The restrictions on the bamboo trade were also removed
on account of vacation of stay granted by the Government. The
result was that as on the date of the judgment delivered by the
High Court, the APMC was and continues to be free to regulate
bamboo trade also. Suffice it to say that the High Court has
0
correctly analysed the issue and rightly held that there is no
dichotomy between the purpose notified and the purpose for
which the reservation was made. There is, in our opinion, no
flaw in the reasoning of the High Court insofar it upheld the
E validity of the acquisition proceedings even on merits.
21. That brings us to Writ Petitions No.3620 and 3874 of
1998 filed by the respondent-APMC challenging order dated
20th May, 1998 passed by Shri Narayan Rane, the then
Minister of Revenue, Government of Maharashtra, directing
F deletion of the disputed land from acquisition. The High Court.
has quashed the order passed by the Minister on the ground
that APMC-the beneficiary of the acquisition was not given a
fair hearing by the Minister before directing the withdrawal of
the acquisition proceedings. Such a hearing was, observed the
G High Court, essential having regard to the nature of the power
exercised by the State Government under Section 48 of the
Land Acquisition Act and the decisions rendered by this Court
while interpreting the said provision. The High Court has, further,
held that the decision was vitiated as the exercise of power by
H the Minister was not only arbitrary but malafide also. The High
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1077
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
Court declared that a withdrawal that is not notified in the official · A
Gazette was ineffective and non-est in the eye of law.
22. The appellants have assailed these findings before us
and argued that the requirement of a hearing to the beneficiary
before withdrawal of the acquisition proceedings was not
8
predicated by Section 48 of the Act. A hearing was at any .rate
provided to the beneficiary that satisfied any such requirement.
It was also contended that the High Court was wrong in holding
that the exercise of the power available under Section 48 was
malafide.
c
23. We may first deal with the question whether withdrawal
of acquisition must be notified in terms of Section 48 of the
Land Acquisition Act. The question is, in our view, no longer
res integra in the light of the decisions of this Court in State of
Maharashtra v. Umashankar Rajabhau (1996) 1 SCC 299 D
and Mis. Larsen and Tourbo Ltd. v. State of Gujarat & Ors.
(1998) 4 sec 387.
24. In the former case this Court while dealing with the
issue of publication of notification of withdrawal under Section
E
48 (1) observed:
"So long as there is no notification published under
Section 48 (1) of the Act withdrawing from acquisition, the
court cannot take notice of any subsequent disinclination
on the part of the beneficiary" F
25. In the case of M/s. Larsen and Tourbo Ltd. (supra), a
specific submission was made on behalf of the State that
Section 48 of the Land Acquisition Act did not provide for
publication of a notification regarding the withdrawal of the G
acquisition proceedings unlike Sections 4 and 6 of the Act
which require such a publication. This Court, however, repelled
the contention and observed:
"We do not think that Mr. Salve is quite right in his
submissions. When Sections 4 and 6 notifications are H
1078 SUPREME COURT REPORTS [2013] 10 S.C.R.
A issued, much has been done towards the acquisition
process and that process cannot be reversed merely by
rescinding those notifications. Rather it is Section 48
under which, after withdrawal from acquisition Js made,
compensation due for any damage suffered by owner
B during the course of acquisition proceedings is
determined and given to him. It is, therefore, implicit that
withdrawal from acquisition has to be notified.
Principles of law are, therefore, well settled. A notification
in the official Gazette is required to be issued if the State
c Government decides to withdraw from the acquisition
under Section 48 of the Act of any land of which
possession has not been taken."
26. The High Court was also right in relying upon a Division
D Bench decision of that Court in Prakash Vasudev Deodhar and
Ors. v. State of Maharashtra and Ors. 1993 MLJ page 1768
where similar issue arose for consideration of the Court and
was answered by holding that a publication under Section 48
was necessary specially when the withdrawal case publication
E of notifications issued under Sections 4 and 6 of the Act in the
official Gazette. There was admittedly no such publication in the
instant case which rendered the withdrawal order non-est in the
eyes of law.
27. Coming then to the question whether the exercise of
F power under Section 48 of the Land Acquisition Act required
compliance with the principles of natural justice and
consequently a hearing to the beneficiary affected by such
withdrawal, we must at the threshold say that such a
requirement is not in specific wo(ds incorporated in Section 48
G of the Act. That does not, however, make any material
difference because the law is well-settled that if a statutory
provision could be read consistently with the principles of natural
justice, the Courts would prefer do so. That is because it can
be presumed that the legislature and the statutory authorities
H intend to act in accordance with such principles. In case,
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1079
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
however, the statutory provisions either specifically or by A
necessary implication exclude the application of the principles
of natural justice, the Court cannot ignore the mandate of the
legislature and read into any such provision the principles of
natural justice.
8
28. We may in this regard refer to the following passage
from the decision of this Court in Union of India v. Col. J.N.
Sinha (1970) 2 sec 458:
"... It is true that if a statutory provision can be read
consistently with the principles of natural justice, the c
Courts should do so because it must be presumed that
the legislature and the statutory authorities intend to act
in accordance with the principles of natural justice. But it
on the other hand a statutory provision either specifically
or by necessary implication excludes the application of 0
any or all the principles of natural justice then the Court
cannot ignore the mandate of the legislature or the
statutory authority and read in to the concerned provision
the principles of natural justice."
29. In Para 33 of the above decision, this Court specifically E
noticed the contention that the right of hearing of a beneficiary
was limited to acquisitions for companies under Part VII of the
Act and repelled the same in following words:
"The decision in Larsen and Toubro (1998 AIR
SCW 1351 : AIR 1998 SC1608) which relied upon an
F
earlier decision in Amarnath Ashram Trust Society v.
Governor of U.P. (1998 AIR SCW 59: AIR 1998 SC 477)
(supra) to hold that a beneficiary has a right to be heard
before a notification under Section 48(1) is issued, does
not appear to be limited to acquisition for companies G
under Part VII of the Act as is contended by the
respondents although the acquisition in that case had
been made for a company for the purpose of setting up
a housing colony. Both cases have a/so drawn a
distinction between the rights of an owner and the H
1080 SUPREME COURT REPORTS [2013] 10 S.C.R.
A beneficiary of the acquisition to object to withdrawal from
the acquisition for the reasons noted earlier. "
30. Was a proper hearing given to the APMC-the
beneficiary in the instant case, is the other aspect that needs
to be considered at this stage. The High Court has examined
8
that aspect and concluded that the hearing was no more than
an eye wash. The High Court observed:
"From the narration as above, it is very clear that
the APMC was called for a hearing before the Minister
c only as a formality. It was not given any notice to show
cause communicating the reasons for withdrawal. A copy
of the land-owners representation dated 12th November
1997 which was the basis of that proceeding was
admittedly not made by them that the matter may not be
D proceeded since writ petition No.670of1995 was pending
in the High Court was turned down and the Minister
proceeded complete the nearing on the very date.
Although the hearing was concluded on that date, the
Minister took into consideration the report of the Collector
received much thereafter and which has been made the
E
basis of the impugned order passed on 20th May, 1998
and admittedly a copy on that report has not been given
to APMC. Thus the beneficiary was not furnished in
writing the grounds on _which the action of withdrawal was
proposed, the matter was proceeded there and then on
F the returnable date in a hurry and on the top of it the
Minister took into consideration as the relevant factor
some material behind the back of the aggrieved party,
something he could not take into account since the
hearing had already been concluded. It is true that the
G proceeding under Section 48 is an administrative
proceeding, but it is a proceeding wherein the valuable
rights of the beneficiary are at stake. The hearing to be
afforded to the beneficiary is not expected to be and
empty formality. The emphasis on affording this
H opportunity of being heard led by the apex Court in the
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1081
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
above referred judgments is to make it a meaningful A
exercise. The manner in which the Minister has
proceeded with the enquiry leaves us in no doubt that he
has proceeded in gross violation of the principles of
natural justice."
B
31. There is, in our view, no flaw in the above reasoning
and conclusion leave alone any perversity to call for our
interference. The obligation to hear existed 4but was not
satisfactorily discharged by the Minister while taking a decision
in the matter, which is by itself sufficient to vitiate the action
taken by him independent of the fact that any order directing C
withdrawal of acquisition ought to have culminated into a proper
notification and published in the official Gazette.
32. The High Court next examined the correctness of the
reasons given in the order of withdrawal passed by the Minister D
and found that the same were wholly unsustainable. The Minister
had cited two distinct reasons for directing withdrawal of the
order. One of the reasons was that the APMC was not
authorised to deal in bamboo and fire wood from 1977 till 1995
arid that even though notification dated 6th February, 1995 E
included bamboo and fire wood in the coverage of the APMC,
the implementation of the said order had been stayed by the
State Governmenton 20th June, 1995. The Land Acquisition
Officer could not have in the light of the said stay acquired the
land for a purpose which the beneficiary could not ostensibly
pursue. F
33. The High Court found that the stay granted by the State
Government stood vacated on 18th February, 1997 and a
specific mention of this fact was made in para 6 of the
representation of the APMC filed before the Minister. Not only G
that a copy of the notification vacating the stay against bamboo
trade was enclosed as item No.9 of the supporting document
and enclosed with the representation and was on the file of the
minister. Even the developer on whose representation the
withdrawal was ordered had in the written argument submitted H
1082 SUPREME COURT REPORTS [2013] 10 S.C.R.
A before the Minister conceded that the stay granted by the State
Government had been vacated. Ignoring these facts the Minister
appears to have taken a stance that was contrary to the
admitted position on record; implying complete non-application
of mind on his part. The High Court has come down heavily on
B the order passed by the Minister especially because the latter
had at his disposal the assistance of the departmental officers.
34. The other reason given for withdrawal of the acquisition
proceedings was that the APMC has used land otherwise
available to it for activities like a beer bar, a hotel and a
C restaurant. The High Court found that the representation of the
developers and owners made no such reference to any such
activity. The High Court noted that except averments in para
17 of the written argument, no other material was placed before
the Minister at the hearing which could possibly justify the
D Minister's oral observations made in the course of hearing
regarding mis-utilisation of the land or justify the withdrawal of
the acquisition proceedings. The High Court also found fault with
the Minister making use of the report received from the
Collector after the closure of the hearing and behind the back
E of the APMC without any notice or opportunity to it to file
objections to the same.
35. The APMC, it is noteworthy, sought to justify the
facilities of a hotel and a restaurant and ancillary services
without which heavy turnover of business and economic activity
F as was being seen and managed by the APMC was not
possible. The High Court found that the market yard was spread
over 153 acres with more than 2000 shops visited by more than
50,000 visitors every day. Facilities of hotels and restaurants
was, therefore, necessary observed the High Court. The
G Minister, however, failed to appreciate all this and even failed
to notice the Collector's report which categorically stated that
the permission for running the beer bar had been cancelled
against which the aggrieved party had approached the High
Court.
H
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1083
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
36. The High Court was, in our opinion, perfectly justified A
in holding that the order passed by the Minister lacked
objectivity and was hasty without due and proper consideration
of the relevant circumstances and the material on record. There
is, in our view, no infirmity in the said findings nor was any
serfous attempt made before us by learned counsel for the B
appellants to demonstrate that the Minister had indeed acted
in a fair objective and dispassionate manner while directing the
withdrawal of the acquisition proceedings on the twin grounds
that have been scrutinised by the High Court and rightly found
to be untenable. We are satisfied that the order passed by the c
Minister directing withdrawal of the acquisition proceedings was
bad not only because it was arbitrary, lacked objectivity and
ignored the material on record but also because the said order
was passed without offering to the APMC a fair and reasonable
opportunity of being heard in the matter. That the order was not D
notified was only an additional reason that rendered the order
legally unsupportable which the High Court rightly quashed.
37. That leaves us with only other question argued by Mr.
V.A. Bobde at considerable length in Civil Appeals No.2856
and 2857 of 2002 filed by Mr. Narayan Rane, the then Revenue E
Minister. The High Court has, as noticed earlier, held the action
of .the Minister to be actuated by malafides. Inasmuch as the
Minister, passed an order without affording a fair hearing to
APMC the beneficiary of the acquisition and on grounds that
were untenable, the Minister did so under the influence of the F
Mutha Associates, the builder observed the High Court. The
High Court's reasoning for that conclusion is in the following
words:
"89. The aforesaid narration makes a sad reading. We
have a Minister of Revenue who does not consider the G
material placed before him, but considers the information
which has come on record subsequent to the conclusion
of hearing. He has courage to state on affidavit that
though the hearing concluded on 5.1.1988, he passed
the order after a substantial period on 20th May, 1988 H
1084 SUPREME COURT REPORTS (2013] 10 S.C.R.
A and after taking into consideration the record available
before· the Government and the letter/report of the
collector dated 16th March, 1998. We have a Minister
who was making obseNations during the proceeding that
the concerned land was being mis-utilized thought there
8 was no material whatsoever except the reference to such
a/legation in another writ petition to which a reference was
made in the written arguments of the land-owners. Thus
we have a Minister who has no regard for the principles
of natural justice or fair play or else he would not have
c passed the kind or order which he has passed. Why he
should do this except for the reasons alleged in the
petition namely the influence exercised by Shri Mutha
who has just put in the earnest money of Rs. 50, 0001- to
claim a large of plot of Hector and 34 Areas in the prime
area of the city for which the compensation under the ward
D
of 1989 was over Rs.26 Lakhs? This is obviously to
favour the land developers. It shows that the Minister
does not have any concern for the planning process
where under a number of authorities apply their mind and
thereafter reseNe the land according to the requirements
E of the society. The Minister does not seem to have any
regard for the judicial process a/so inasmuch as although
the writ petition was pending in this Court concerning the
very controversy, for the benefit of the land-developers
he has tried to overreach the judicial process. Last but
F not the least he does not seem to have any concern for
the weaker sections of the Society like the Burud
Community for whom the plot was reseNed. Obviously
the land developer was more relevant for the Minister than
APMC or these people who are on the fringe of the
G Society and that must be for the reasons best known to
the Minister. "
38. It was contended by Mr. Bobde that the High Court went
wrong in attributing motives to the Minister without there being
H any specific charge, material or particulars to support the same.
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1085
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
The mere fact that an order passed by a constitutional or A
statutory authority was found to be legally unsustainable did not
ipso facto mean that the order was malafide in that the authority
had passed the same for any extraneous or other consideration.
Reliance in support was placed by Mr. Bobde upon a series
of decisions of this Court, in which the need for the Court B
examining a charge of malafides to be circumspect and the
standard of proof required for holding the charge proved have
been laid down. The case at hand did not argue Mr. Bobde,
satisfy the said requirements and standards, rendering the
order passed by the High Court unsustainable. c
39. The law regarding pleading and proof of 'malice in fact'
or malafides as it is in common parlance described is indeed
settled by a long line of decisions of this Court. The decisions
broadly recognise the requirement of allegations suggesting
"malice in fact" to be specific and supported by necessary D
particulars. Vague and general averments to the effect that the
action under review was taken malafide would not therefore
suffice. Equally well settled is the principle that the burden to
establish that the action under challenge was indeed malafide
rests heavily upon the person making the charge; which is taken E
as quasi criminal in nature and can lead to adverse
consequence for the person who is proved to have acted
malafide. There is in fact a presumption that the public authority
acted bonafide and in good faith. That presumption can no
doubt be rebutted by the person making the change but only F
on cogent and satisfactory proof whether direct or
circumstantial or on admitted facts that may support an
inference that the action lacked bonafides and was for that
reason vitiated. The third principle equally sanctified by judicial
pronouncements is that the person against whom the charge G
is made must be impleaded as a party to the proceedings and
given an opportunity to refute the charge against him. We may
at this stage refer to a few decisions to illustrate the above for
a copious reference to all the pronouncements is unnecessary
and can be avoided.
H
1086 SUPREME COURT REPORTS [2013110 S.C.R.
A 40. In State of Bihar v. P.P. Sharma 1992 Supp. (1) SCC
222, this Court explained the juristic significance of malafides
and the questions that need to be determined while examining
plea based on malafides. The following passage is apposite
in this regard:
B "50. Mala tides means want of good faith, personal bias,
grudge, oblique or improper motive or ulterior purpose.
The administrative action must be said to be done in
good faith, if it is in fact done honestly, whether it is done
negligently or not. An act done honestly is deemed to
c have been done in good faith. An administrative
authority must, therefore, act in a bona fide manner and
should never act for an improper motive or ulterior
purposes or contrary to the requirements of the statute,
or the basis of the circumstances contemplated by law,
D or improperly exercised discretion to achieve some
ulterior purpose. The determination of a plea of ma/a fide
involves two questions, namely (i) whether there is a
personal bias or an oblique motive, and (ii) whether the
administrative action is contrary to the objects,
E requirements and conditions of a valid exercise of
administrative power.
51. The action taken must, therefore, be proved to have
been made ma/a fide for such considerations. Mere
assertion or a vague or bald statement is not sufficient.
F It must be demonstrated either by admitted or proved
facts and circumstances obtainable in a given case. If it
is established that the action has been taken ma/a fide
for any such considerations or by fraud on power or
colourable exercise of power, it cannot be allowed to
G stand."
41. That the allegations of malafides would require a high
degree of proof to rebut the presumption that administrative
action has been taken bonafide was laid down as one of the
H principles governing burden of proof of allegations of malafides
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1087
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
levelled by an aggrieved party. The Court in that decision A
observed thus:
".... It i.s well settled that the burden of proving ma/a fide
is on the person making the allegations and the burden
is "very heavy". (vide E.P. Royappa v. State of T.N.
(1974) 4 SCC 3). There is every presumption in favour B
of the administration that the power has been exercised
bona fide and in good faith. It is to be remembered that
the allegations of ma/a fide are often more easily made
than made out and the very seriousness of such
a/legations demands proof of a high degree of credibility. C
As Krishna Iyer, J. stated in Gu/am Mustafa v. State of
Maharashtra (1976) 1 SCC 800 (SCC p.802, para 2): "It
(ma/a fide) is the last refuge of a losing litigant."
42. In State of M.P. and Ors. v. Nandla/ Jaiswa/ and Ors. D
(1986) 4 sec 566, this Court laid emphasis on the need for •
furnishing full particulars of allegations suggesting malafides.
The use of words such as "malafides", "corruption" and "corrupt
practice" was held to be insufficient to necessitate an enquiry
into such allegations. The Court observed: E
"39. Before we part with this case we must express our
strong disapproval of the observations made by B.M. Lal,
J. in para 1, 9, 17, 18, 19 and 34 of his concurring
opm1on. The learned Judge made sweeping
observations attributing ma/a tides, corruption and F
underhand dealing to the State Government. These
observations are in our opinion not at all justified by the
record. In the first place it is difficult to appreciate how any
such observation could be made by the learned Judge
without any foundation for the same being laid in the G
pleadings. It is true that in the writ petitions the petitioners
used words such as "ma/a fide': "corruption" and ncorrupt
practice" but the use of such words is not enough. What
is necessary is to give full particulars of such a/legations
and to set out the material facts specifying the particular H
1088 SUPREME COURT REPORTS [2013] 10 S.C.R.
A person against whom such a/legations are made so that
he may have an opportunity of controverting such
a/legations. The requirement of law is not satisfied insofar
as the pleadings in the present case are concerned and
in the absence of necessary particulars and material
B facts, we fail to see how the learned Judge could come
to a finding that the State Government was guilty of
factual ma/a tides, corruption and underhand dealing."
43. To the same effect is the decision of this Court in Smt.
Swaran Lata v. Union of India & Ors. (1979) 3 SCC 165, the
C Court held that in the absence of particulars, the Court would
be justified in refusing to conduct an investigation into the
allegations of malafides.
44. In Minor A Paeeiakaruppan ~'. Sabha Joseph (1971)
0 1 sec 38, this Court held that even when the Court examining
the validity of an action may find a circumstance to be disturbing
it cannot uphold the plea of malafides on ground of mere
probabilities. A note of caution was similarly sounded by this
Court in E.P. Royappa v. State of T.N. (1974) 4 SCC 3, where
the Court held that it ought to be slow to draw dubious
E inferences from incomplete facts particularly when imputations
are grave and they are made against the· holder of an office
which has high responsibility in the administration. The following
passage from the decision is apposite:
F "92. Secondly, we must not also overlook that the burden
of establishing ma/a tides is very heavy on the person
who alleges it. The a/legations of ma/a tides are often
more easily made than proved, and the very seriousness
of such a/legations demands proof of a high order of
credibility. Here the petitioner, who was himself once the
G
Chief Secretary, .has flung a series of charges of oblique
conduct against the Chief Minister. That is· in itself a
rather extraordinary and unusual occurrence and if these
charges are true, they are bound to shake the confidence
of the people in the political custodians of power in the
H State, and therefore, the anxiety of the Court should be
M/S MUTHA ASSOCIATES AND ORS. v. STATE OF 1089
MAHARASHTRA AND ORS. [T.S. THAKUR, J.]
all the greater to insist on a high degree of proof. In this A
context it may be noted that top administrators are often
required to do acts which affect others adversely but which
are necessary in the execution of their duties. These acts
may lend themselves to misconstruction and suspicion
as to the bona fides of their author when the full facts and B
surrounding circumstances are not known. The Court
would, therefore, be slow to draw dubious inferences from
incomplete facts placed before it by a party, particularly
when the imputations are grave and they are made
against the holder of an office which has a high C
responsibility in the administration. Such is the judicial
perspective in evaluating charge of unworthy conduct
against ministers and other high authorities, not because
of any special status which they are supposed to enjoy,
nor because they are highly placed in social life or
administrative set up-these considerations are wholly D
irrelevant in judicial approach-but because otherwise,
functioning effectively would become difficult in a
democracy. It is from this standpoint that we must assess
the merits of the allegations of ma/a fides made by the
petitioner against the second respondent. " E
45. The charge of malafides levelled against the appellant-
M r. Rane, the then Minister was not supported by any
particulars. The writ petition filed by APMC did not provide
specific particulars or details of how the decision taken by
minister was influenced by Mutha Associates or by any other
F
person for that matter. The averments made in the writ petition
in that fegard appeared to be general and inferential in nature.
Such allegations were, in our opinion, insufficient to hold the
charge of 'malice in fact' levelled against the minister proved.
G
46. It is true that the High Court has enumerated certain
stark irregularities in the decision making process or the use
of material obtained on behalf of the back of the beneficiary of
the acquisition as also the denial of fair opportunity to the
beneficiary to present its case before the minister yet those
H
1090 SUPREME COURT REPORTS [2013] 10 S.C.R.
A irregularities do not inevitably lead to the conclusion that the
minister had acted malafide. Failure to abide by the principles
of natural justice are consideration of material not disclose to
a party or non-application of mind, to the material available on
record may vitiate the decision taken by the authority concerned
B and may even constitute malice in law but the action may still
remain bonafide and in good faith. It is trite that every action
taken by a public authority even found untenable cannot be
dubbed as malafide simply because it has fallen short of the
legal standards and requirements for an action may continue
C to be bonafide and in good faith no matter the public authority
passing the order has committed mistakes or irregularities in
procedures or even breached the minimal requirements of the
principles of natural justice. The High Court has attributed to
the Minister appellant in Civil Appeals No.2856-2857 of 2002,
malafides simply because the order passed by him was found
D to be untenable in law. Such an inference was not in our view
justified, no matter the circumstances enumerated by the High
Court may have given rise to a strong suspicion that the
minister acted out of extraneous considerations. Suspicion,
however, strong cannot be proof of the charge of malafide. It
E is only on clear proof of high degree that the court could strike
down an action on the ground of malafide which standard of
proof was not, in our opinion, satisfied in the instant case. To
the extent the High Court held the action of the minister to be
malafide, the impugned order would require correction and Civil
F Appeals No.2856 and 2857 of 2002 allowed.
47. In the result we dismiss Civil Appeals No.2853/2002,
2854/2002 and 2855/2002 with cost assessed at Rs.
5,00,0001- to be paid by appellant No.1-Mutha Associates to
the beneficiary of the acquisition-APMC, Pune. We, however,
G allow Civil Appeals No.2856 and 2857 of 2002 filed by Shri
Narayan Rane to the extent that the findi;1g recorded by the
High Court regarding malafides against the appellant in that
case is reversed and the judgment and order passed by the
·High Court accordingly modified.
H K.K.T. Appeals disposed of.
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