THE NAIHATI MUNICIPALITY AND ORS.versusCHINMOYEE MUKHERJEE AND ORS.

A                 THE NAIHATI MUNICIPALITY AND ORS.
                                          v.
                    CHINMOYEE MUKHERJEE AND ORS.

                                 AUGUST 6, 1996

B               [K. RAMASWAMY AND G.B. PATTANAIK, JJ.]

            Land Acquisition Act, 1894:

          Ss.4( I), 6( I )-Acquisition of land for ~mblic pwpose'---Rehabilitation
C   of hawkers by acquiring land-Held is a public pwpose-Money cont1ibuted
    by hawkers' Union for the acquisition and deposited into the funds of
    mlmicipality fanned and fused into integral pmt of the municipal funds-After
    the deposit by the hawkers they have no 1ight to withdraw the amount-High
    Cowt was not 1ight in holding that the amount did not become part of the
    funds managed or controlled by the local authority within the meaning of the
D   second proviso to sub section (1) of s.6.

            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3841 of
    1983.

            From the Judgment and Order dated 26.7.79 of the Calcutta High
E Court in C.R. No. 2030 of 1978.

            Rathin Das for the Appellants.

         Parijat Sinha, D.B. Mukherjee, Rana Mukherjee, H.K. Puri, Ms.
    Sumita Mukherjee and Goodwill Indeevar for the Respondents.
F
            The following Order of the Court was delivered :

        This appeal by special leave arises from the judgment of the Division
  Bench of the Calcutta High Court dated July 26, 1979 made in C.R. No.
  2030 (W) of 1978. The admitted facts are that a resolution was passed by
G the appellant-municipality for rehabilitation of the hawkers by acquiring
  the land in question. By that date the municipality did not have sufficient
  funds to meet the acquisition costs. As a consequence, the hawkers' union
  was requested to contribute the fund to meet acquisition costs. In fur-
  therance thereof, the hawkers union deposited with the municipality a sum
H of Rs. 3,90,000 for the acquisition of the land. The said amount was
                                      316
         NAIHA11 MUNICIPALI1Yv. CH!NMOYEEMUKHERJEE                        317

credited to the funds of the municipality. Thereafter a reference was made       A
to the Government requesting to acquire the land. In furtherance thereof,
the Government issued notification under Section 4(1) of the Land Ac-
quisition Act, 1894 (1 of 1894) (for short, the 'Act') on August 1, 1974 and
acquired the plots of land bearing Nos. 412 to 426, 497, 2400 to 2407
admeasuring about 4.717 hectares of the land in the village Kantalpara, P.S.     B
Nahati Municipality. Declaration under Section 6 came to be published on
November 9, 1976. Both the notification and the declaration came to be
challenged in the writ petition. The High Court concluded in its judgment
that though there was initial resolution passed by the municipality to
acquire the land there was no final resolution directing the Commissioner
to spend the money from the fund of the municipality. The hawkers                C
themselves deposited the money with the municipal Corporation. The
Government imposed a condition that the said amount should be used only
for the purpose of acquisition of land for rehabilitation of the hawkers. The
appropriate provisions contai11cd in the Municipality Act have not been
complied with. Under those circumstances, there is no public purpose             D
indeed for acquiring the land. Accordingly, the declaration under Section
6 came to be quashed. Thus this appeal by special leave.

      We have been taken through the reasoning of the learned Judges and
have also heard contentions of the learned counsel for the parties. We arc
of the view that High Court was not right in its approach in dealing with        E
the matter. The rehabilitation of the hawkers by acquiring the land is
indisputably the public purpose; otherwise it would be a perpetual nuisance
to the residents of the municipal area if hawkers were permitted to hawk
the goods on public pavement obstructing the traffic flow in the city.
Therefore, it can, by no stretch of in1agination, be considered that it is not   F
a public purpose. The question then is: whether the part or whole of the
compensation would come from the funds of the local authority? The
second proviso to sub-section (1) of Section 6 deals with the subject matter
according to which no such declaration shall be made unless the compen-
sation to be awarded for such property is to be paid by a Company, or
wholly or partly out of public revenues or some funds controlled or              G
managed by a local authority. Indisputably municipality is a local authority
and the funds are controlled or managed by the municipality. In view of the
fact that at the relevant point of time the municipality did not have
necessary funds to meet the cost of acquisition, they had requested
hawkers' union to contribute the money for the acquisition. Consequently.        H
    318                  SUPREME COURT REPORTS [1996] SUPP. 4 S.C.R.

A Rs. 3,90,000 came to be handed over to the Municipal Commissioner who
    had deposited the same into the funds of the municipality. Thereby, the
    amount had formed and fused into integral part of the municipal funds. It
    is true that the Government had put restriction that the said money would
    be used only for the public purpose. It would be obvious that since
    municipality did not have the required funds, the Government had imposed
B
    a condition that the money contributed by the hawkers should be used only
    for the purpose of cost of the acquisition apprehending that the same may
    be directed to other purposes. The meat of the matter is that after the
    deposit by the hawkers, they have no right to withdraw the said amount
    which formed part of the funds of the municipality. The High Court,
c   therefore, was not rigi11 in holding that the amount has not become part of
     the funds managed or controlled by the local authority within the meaning
     of second proviso of sub-section (1) of Section 6.

          The appeal is accordingly allowed. The order of the High Court is
    set aside. The Writ Petition stands dismissed. No costs.
D
    R.P.                                                       Appeal allowed.