MYSORE URBAN DEVELOPMENT AUTHORITY BY ITS COMMISSIONERversusVEER KUMAR JAIN & ORS.

                       [2010] 4 S.C.R. 371


   MYSORE URBAN DEVELOPMENT AUTHORITY BY ITS                          A
                COMMISSIONER
                                 v.
                 VEER KUMAR JAIN & ORS.
                (Civil Appeal No. 2934 of 2010)
                                                                      B
                          APRIL 1, 2010

        [R.V. RAVEENDRAN AND R.M. LODHA, JJ.]

      Land Acquisition Act, 1894:
                                                                      c
        ss. 16(2) and 48(1) - Notification withdrawing from
   acquisition - Cancellation of - Acquisition of land for Mysore
   Urban Development Authority- Notification dated 14.12.2000
   issued uls 16(2) confirming possession of land having been
   taken over - Later, Notification dated 15.9.2001 issued u/s        0
   19(7) of Kamataka Urban Development Authorities Act and
   uls 48(1) of the LA Act dropping acquisition proceedings in
   regard to some of the lands - When MUDA came to know of
   the land being denotified, it represented to Government which
   by Notification dated 22. 7.2002 withdrew the Notification dated   E
 , ,15.9.2001 - Writ petition of land owners and purchaser
I aismissed - HELD: Order dated 22. 7.2002 is inextricably

  linked to order dated 15.9.2001 which was invalid for the same
  reasons as the order dated 22. 7.2002, namely, failure to
  provide opportunity of hearing to aggrieved party - Further,
  the order dated 22. 7.2002 was passed to set right the violation    F
  of principles of natural justice in making the order dated
  15.9.2001 - Therefore, interests of justice would be served if
  both the notifications dated 22. 7. 2002 and 15. 9. 2001 are set
  aside and the State Government is directed to consider the
  request of the land owners for withdrawal from acquisition          G
  afresh after giving due hearing to the land owners (and also
  the purchaser) and MUDA and then decide the matter in
  accordance with law - Orders of the High Court modified
  accordingly - Karnataka Urban Development Authorities Act,
                                  371                                 H
    372      SUPREME COURT REPORTS                  [2010] 4 S.C.R.


A   1987 - ss.17(1) to (3) and 19(7) - Principles of natural justice
    - Opportunity of hearing. [para 14-15]

         S.L. Kapoor vs. Jagmohan & Ors. 1981 (1) SCR 746 =
    1980 (4) SCC 379 ; State Bank of Patiala vs. S.K. Sharma
B                        =
    1996 (3) SCR 972 1996 (3) SCC 364; Managing Director
    ECIL Hyderabad. Vs. B. Karunakar 1994 AIR 1074 = 1993 (2)
                         =
     Suppl. SCR 576 1993 (4) SCC 727 ; C.B. Gautam vs.
    U.0.1. 1992 (3) Suppl. SCR 12 = 1993 (1) SCC 78; Roshan
    Deen vs. Preeti Lal 2001 (5) Suppl. SCR 23 2002 (1) =
c sec     100 - referred to.

                          Case Law Reference:
       1981 (1) SCR 746                  referred to     para 13
       1996 (3) SCR 972                  referred to     para 13
D
       1993 (2) Suppl.       SCR 576     referred to     para 13
       1992 (3) Suppl. SCR 12            referred to     para 13
       2001 (S) Suppl. SCR 23            referred to     para 13
E
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    2934 of 2010.

        From the Judgment & Order dated 4.12.2007 of the High
F   Court of Karnataka at Bangalore in W.A. No. 1995 of 2007 (LB-
    RES).

        P. Vishwanatha Sheety, Vijaykumar L. Paradesi, K.V.
    Bharathi Upadhyaya for the Appellant.

G       Basava Prabhu S. Patil, Aniruddha P. Mayee, Harsh
    Khanna Rucha, A. Mayee for the Respondent.

          The Order of the Court was delivered by


H
 MYSORE URBAN DEV. AUTHORITY BY ITS COMMNR. v. 373
               VEER KUMAR JAIN

                            ORDER                                 A

     R.V. RAVEENDRAN J. 1. Leave granted. Heard the
parties.

      2. On 15.3.1990, a preliminary Notification under section
 17 of the Karnataka Urban Development Authorities Act, 1987      8
('KUDA Act' for short) was issued by the Mysore Urban
Development Authority- the appellant herein ('MUDA' for short),
proposing to acquire certain lands for development of
Kuvempunagar residential layout and formation of a double
Road. This was followed by a fina I declaration dated 24.5.1991   C
under Section 19(1) of the KU DA-Act by the state government
stating that it had granted sanction of the scheme and that the
land proposed to be acquired by MUDA for the purposes of
the scheme is required for a public purpose. The said final
declaration was challenged and quashed by the High Court with     D
liberty to proceed afresh from the stage of consideration of
representations. After considering the representations, a fresh
final declaration was issued on 4.10.1999. In pursuance of it,
an Award was made on 16.10.2000 and possession of the
lands was taken on 8th/9th December 2000. A notification          E
dated 14.12.2000 was issued under section 16(2) of the Land
Acquisition Act, 1894 ('LA Act' for short) confirming that
possession of the lands had been taken over. In view of the
above, MUDA claims that the acquired lands vested in the
government and later in MUDA.                                     F

     3. Acting on the applications of some land owners, the
state government issued a notification dated 15.9.2001 under
s~ction 19(7) of the KUDA Act read with section 48(1) of LA.
Act dropping the acquisition proceedings, in regard to 17 acres
21 guntas of the lands described therein. Immediately G
thereafter, on 28.9.2001, the land owners sold the de-notified
lands to the first respondent. When MUDA came to know about
the de-notification, it represented to the government that the
lands could not have been de-notified as the lands had vested
                                                                H
           /




    37 4       SUPREME COURT REPORTS                [2010] 4 S.C.R.


A in it, on possession being taken. It was also submitted that the
  acquired lands could not be de-notified without hearing it. In
  view of it, the state government issued another notification
  dated 22.7.2002 under section 21 of the Karnataka General
  Clauses Act, withdrawing the notification dated 15.9.2001.
B
          4. In this background, the first respondent, purchaser of the
    de-notified lands from the previous land owners filed a writ
    petition 0/1/P No.30425/2002) before the Karnataka High Court,
    challenging the notification dated 22.7.2002 on the ground that
    the owners of the lands were not heard before withdrawing the
C   notification dated 15.9.2001. It was also contended that once
    a notification was issued under section 48( 1) of LA Act, it could
    not be withdrawn under any circumstances and Section 21 of
    General Clauses Act does not empower such withdrawal. A
    learned Single Judge, by judgment dated 28.8.2007, allowed
D   the writ petition filed by the first respondent. He held that when
    a notification under section 48(1) is issued, a valuable right
    relating to property was acquired by the land owner in regard
    to the de-notified land, and therefore, a notification under
    Section 48(1) of LA Act cannot be withdrawn without hearing
E   the concerned land owner. The learned Single Judge therefore
    quashing the cancellation notification dated 22.7.2002, but
    reserved liberty to the state government to consider the request
    of MUDA to withdraw the notification dated 15.9.2001, after
    hearing the then land owners and their transferee (the first
F   respondent). Feeling aggrieved, MUDA filed a writ appeal
    which was dismissed by a Division Bench of the High Court
    on 14.12.2007. The said order is under challenge in this appeal
    by special leave.

       5. The question for consideration is whether the order of
G withdrawal dated 22.7.2002 is valid; and what would be the
  appropriate relief on the facts and circumstances.

        6. We may refer to the relevant provisions of the KUDA
    Act before dealing with the contentions. Sub-section (1) to (3)
H
MYSORE URBAN DEV. AUTHORITY BY ITS COMMNR. v. 375
    VEER KUMAR JAIN [R.V. RAVEENDRAN, J.)

of Section 17 provides for issue of a preliminary notification in   A
regard to proposed acquisition and Section 19(1) to (3) relate
to issue of a final declaration. Section 36 deals with provisions
applicable to acquisition of land otherwise than by agreement
and is extracted below :
                                                                    B
    "36. ?Provisions applicable to the acquisition of land other-
    wise than by agreement.- (1) The Acquisition of land under
    this Act otherwise than by agreement within or without the
    urban area shall be regulated by the provisions, so far as
    they are applicable, of the Land Acquisition Act, 1894.
                                                                    c
    (2) For the purpose of sub-section (2) of section 50 of the
    Land Acquisition Act, 1894, the Authority shall be deemed
    to be the local authority concerned.

    (3) After the land vests in the Government under section        D
    16 of the Land Acquisition Act, 1894, the Deputy
    Commissioner shall, upon payment of the cost of the
    acquisition, and upon the Authority agreeing to pay any
    further cost which may be incurred on account of the
    acquisition, transfer the land to the Authority, and the land
                                                                    E
    shall thereupon vest in the Authority".

We may also refer to the relevant portions of Section 16 of LA
Act (as amended in Karnataka) and section 48 of LA Act :

    "16. Power to take possession: (1) When the Dy.                 F
    Commissioner has made an award under Section 11, he
    may take possession of the land, which shall thereupon
    vest absolutely in the Government, free from all
    encumbrances.

    (2) The fact of such taking possession may be notified by       G
    Deputy Commissioner in the Official Gazette; and such
    notification shall be evidence of such fact".           ·

    "48. Completion of acquisition not compulsory, but
    compensation to be awarded when not completed - (1)             H
    376       SUPREME COURT REPORTS                    [2010] 4 S.C.R.


A         Except in the case provided for in section 36, the
          Government shall be at liberty to withdraw from the
          acquisition of any land of which possession has not been
          taken". x x x x x

          7. The appellant urged the following contentions:
B
          (i) Section 16(1) of the LA Act provides that when the
          Deputy Commissioner takes possession of the land after
          making an award it shall vest absolutely in the government
          free from encumbrances. Sub-section (2) of section 16
c         provides that publication of a notification confirming the fact
          of taking of possession shall be evidence of such fact. In
          this case, the Deputy Commissioner took possession of
          the acquired lands, and thereafter, a notification under
          section 16(2) of the LA Act was issued on 9.12.2000 and
D         that the said notification is evidence of the fact of taking
          possession. Once the possession is taken, the state
          government had no power or authority to issue a
          notification under section 48(1) of the LA Act and
          therefore, the order dated 15.9.2001 is void and non est
E         and reviving such a notification would amount to
          perpetuation of illegality.

          (ii) MUDA, the acquiring authority, for whose benefit the
          land was acquired, was not heard before issuing the
          notification dated 15.9.2001 under section 48(1) of the LA
F         Act. The said notification was therefore rightly withdrawn
          by a notification dated 22.7.2002. If the notification dated
          22.7.2002 is quashed, it would bring back to life, the
          notification dated 15.9.2001 issued under Section 48(1)
          of LA Act which was per se illegal and void, and that is
G         impermissible.

          (iii) Where the government, after issuing an order, finds
          that it is inherently defective or void, it can withdraw the
          same and then reconsider the issue as per law, and in such
H         a situation, the question of vio1ation of principles of natural
MYSORE URBAN DEV. AUTHORITY BY ITS COMMNR. v. 377
    VEER KUMAR JAIN [R.V. RAVEENDRAN, J.]

    justice would not arise.                                         A
      8. On the other hand, the first respondent submitted that a
notification withdrawing an earlier notification under section 48
(dated 22.7.2002) could not have been issued without hearing
the land owners in whose favour a right in property had accrued
                                                                     B
by issue of a notification under Section 48(1) of LA Act.

     9. We may first refer to the relevant principles in regard to
withdrawal from acquisition under Section 48(1) of the LA Act

                                                                     c
    (i) Sub-Section (1) of section 48 clearly provides that the
    Government will have liberty to withdraw from the
    acquisition of any land, of which possession has not been
    taken. Therefore, the power under Section 48(1) of the LA
    Act could only be exercised before the possession of the D
    acquired lands is taken. Once possession of the land is
    taken by the government, the land vests in the government
    and the power of the government under Section 48(1) of
    the LA Act to withdraw acquisition in regard to such land
    would cease to exist.
                                                                   E
    (ii) Where possession of the acquired land has not been
    taken, the power and discretion under Section 48(1) of the
    LA Act can be exercised by the state government, but only
    in a fair and non-arbitrary manner. Consequently, no order
    under Section 48(1) of the LA Act can be passed by the F
    government, without hearing the local authority for whose
    benefit the acquisition is made, particularly when the
    preliminary notification has been issued by such local
    authority, and the final declaration states that the lands are
    acquired for such authority for a public purpose. (Vide: G
    Amamath Ashram Trust Society v. Government of UP -
    1998 (1) SCC 591, Larsen & Toubro Ltd. v. State of
    Gujarat - 1998 (4) SCC 387 and State Government
    Houseless Harijan Employees Association vs. State of
    Karnataka - 2001 (1) SCC 610).                                 H
    378      SUPREME COURT REPORTS                  [2010] 4 S.C.R.


A        10. There is no dispute that the land owners were not heard
  before issuing the cancellation notification dated 22. 7.2002.
  Therefore, the order dated 22.7.2002 is illegal being opposed
  to principles of natural justice. In such a case, usually the
  cancellation of de-notification, being opposed to principles of
8 natural justice, would be set aside and the Government would
  be directed to reconsider the matter after giving due opportunity
  to the affected parties (land owners whose lands were
  withdrawn from acquisition) to have their say in the matter. But
  then we face a dilemma. If the order dated 22. 7.2002 is
C quashed as being violative of the principles of natural justice,
  it will result in the revival of the order dated 15.9.2001 which
  also suffers from the same vice, as that was also made in
  violation of the principles of natural justice, without hearing the
  affected party, that is, MUDA.

D      11. The learned counsel for the first respondent contends
  that while he challenged the order dated 22. 7.2002, MUDA did
  not chailenge the order dated 15.9.2001 and therefore ttie
  validity of the order dated 22. 7.2002 alone arises for
  consideration and not the validity of the order dated 15.9.2001.
E This contention is not tenable because of two reasons. Firstly,
  MUDA in fact protested against the order dated 15.9.2001,
  before the state government and the state government
  accepted the contentions of MUDA and withdrew the order
  dated 15.9.2001. As the state government granted it the relief,
F there was no need or occasion for MUDA to challenge the order
  dated 15.9.2001 in a court of law. Secondly as of now, the order
  dated 15.9.2001 is not in existence. Incidental to the question
  whether the order dated 22.7.2002 should be quashed, it is
  necessary to decide whether this court should by so quashing,
  revive an order dated 15.9.2001 which also suffers from the
G
  same vice of being in violation of principles of natural justice,
  or should quash that order also.

         12. We are of the view that the order dated 22.7.2002 is
    inextricably linked with the validity of the order dated 15.9.2001
H
    MYSORE URBAN DEV. AUTHORITY BY ITS COMMNR. v. 379
        VEER KUMAR JAIN [R.V. RAVEENDRAN, J.]

    which was withdrawn by the order dated 22. 7.2002. The A
    principles that is pressed into service by the first respondent
    to challenge the order dated 22.7.2002 is available with equal
    force to hold that the order dated 15.9.1991 is also void. In fact
    the very argument which is urged by the first respondent in the
-   writ petition to challenge the order dated 22.7.2002, was urged B
    by MUDA before the Government, in addition to pointing out
    the inherent illegality of the order dated 15.9.2001, to withdraw
    the notification dated 15.9.2001. Accepting the said contentions
    and finding that the order dated 15.9.2001 was liable to be set
    aside as being in violation of principle of natural justice, the c
    state government withdrew the notification dated 15.9.2001. It
    is another matter that in so doing, it did not hear the affected
    party namely the land owner. If the first respondent should
    succeed because the land owner was not heard before issuing
    the notification dated 22.7.2002, on the same reasoning the 0
    notification dated 15.9.2001 should also be quashed as the
    same could not have been issued without hearing the MUDA.

         13. We may refer to some of the decisions of this court
    having a bearing on the issue. In S.L. Kapoor v. Jagmohan and
    Ors. [1980 (4) sec 379] this court rather rigidly and sternly    E
    observed:-

        "In our view the principles of natural justice know of no
        exclusionary rule dependent on whether it would have
        made any difference if natural justice had been observed. F
        The non-observance of natural justice is itself prejudice to
        any man and proof of prejudice independently of proof of
        denial of natural justice is unnecessary. It will come from
        a person who has denied justice that the person who has
        been denied justice is not prejudiced."                      G

    In State Bank of Patiala v. S.K. Sharma [1996 (3) SCC 364]
    this court stated that the aforesaid observation should be
    understood in the context of the facts of that case and in the
    light of the subsequent Constitution Bench judgment in
                                                                     H
    380       SUPREME COURT REPORTS                       [2010] 4 S.C.R.


A   Managing Director, ECIL, Hyderabad vs. B. Karunakar [1993
    (4) SCC 727] and C.B. Gautam v. Union of India [1993 (1)
    SCC 78]. This Court observed:-

          "The decisions cited above make one thing clear, viz.,
          principles of natural justice cannot be reduced to any hard
B
          and fast formulae. As said in Russell v. Duke of Norfolk
          -1949 (1) All ER 109, way back in 1949, these principles
          cannot be put in a straight-jacket. Their applicability
          depends upon the context and the facts and circumstances
          of each case. (See Mahender Singh Gill v. Chief Election
c         Commissioner - 1978 (1) SCC 405). The objective is to
          ensure a fair hearing, a fair deal, to the person whose
          rights are going to be affected.

          While applying the rule of audi alteram partem (the primary
D         principle of natural justice) the Court/Tribunal/Authority must
          always bear in mind the ultimate and over-riding objective
          underlying the said rule, viz., to ensure a fair·hearing and
          to ensure that there is no failure of justice. It is this objective
          which should guide them in applying the rule to varying
E         situations that arises before them."

    Ensuring that there is no failure of justice is as important as
    ensuring that there is a fair hearing before an adverse order is
    made. This Court in Roshan Deen v. Preeti Lal - 2002 (1)
F   SCC 100; this court held:

          "Time and again this Court has reminded that the power
          conferred on the High Court under Article 226 and 227 of
          the Constitution is to advance justice and not to thwart it.
          (vide State of Uttar Pradesh vs. District Judge, Unnao &
G         Ors._(1984) 2 sec 673). The very purpose of such
          constitutional powers being conferred on the High Courts
          is that no man should be subjected to injustice by violating
          the law. The look out of the High Court is, therefore, not
          merely to pick out any error of law through an academic
H
MYSORE URBAN DEV. AUTHORITY BY ITS COMMNR. v. 381
    VEER KUMAR JAIN [R.V. RAVEENDRAN, J.]

     angle but to see whether injustice has resulted on account       A
     of any erroneous interpretation of law. If justice became the
     byproduct of an erroneous view of law the High Court is
     not expected to erase such justice in the name of
     correcting the error of law.
                                                                      B
      14. We have already noticed above that the order dated
 22.7.2002 is inextricably linked to order dated 15.9.2001 whfch
was invalid for the same reasons as the order dated 22.7.2002.
 Further, the order dated 22.7.2002 was passed to set right the
viol~tion of principles of natural justice in making the order        C
dated 15.9.2001. It is possible for us to hold that the order
dated 22.7.2002 did not call for interference in exercise of
power of judicial review, as it merely cancelled an earlier invalid
order which was made without hearing MUDA. But that may
prejudice the landowners as they would have no forum to put
forth their request for de-notification. We are of the view that      D
the relief should be moulded appropriately so that the
landowners should a·lso have an opportunity to put forth their
grievance. Interests of justice would be served if both the
notifications dated 22.7.2002 and 15.9.2001 are set aside and
the state government is directed to consider the request of the       E
land owners for withdrawal from acquisition afresh after giving
due hearing to the land owners (and also the first respondent)
and MUDA and then decide the matter in accordance with law.

      15. In view of the above, we allow this appeal and modify       F
the orders of the High Court. Both the notifications dated
22.7.2002 and 15.9.2001 are quashed and the state
government is directed to hear the request of the landowners
for de-notification afresh. It will be open to the landowners to
place such material as is available to them to show that the          G
possession was not taken in regard to lands in question, and
thereby rebut the presumption raised in view of Section 16(2)
of LA Act; and then establish that circumstances warrant de-
notification. On the other hand, it will be also open to MUDA
                                                                      H
   382     SUPREME COURT REPORTS                [2010] 4 S.C.R.

A also to establish that possession was in fact taken and that
  power under section 48(1) could not therefore be exercised.
  The state government shall hear both the parties and pass
  appropriate orders in accordance with law within four months.
  Status quo will be maintained in regard to lands in question by
B the parties till then.

   R.P.                                         Appeal allowed.