Section 24 (2) of the The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 : Conditions to be satisfied

Justice R.M. Lodha
Supreme Court of India

In an important judgment, a 3 Judge Bench of the Supreme Court in the case of Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Ors. has examined the applicability of Section 24 (2) of the The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (for short, ‘2013 Act’) and examined the conditions required to be met by land owners for the acquisition proceedings to lapse. It has been observed:

6. It is argued on behalf of the landowners that by virtue of Section 24(2) of the 2013 Act, the subject acquisition shall be deemed to have been lapsed because the award under Section 11 of the 1894 Act is made more than five years prior to the commencement of 2013 Act and no compensation has been paid to the owners nor the amount of compensation has been deposited in the court by the Special Land Acquisition Officer.

7. On the other hand, on behalf of the Corporation and so also for the Collector, it is argued that the award was made by the Special Land Acquisition Officer on 31.01.2008 strictly in terms of 1894 Act and on the very day the landowners were informed regarding the quantum of compensation for their respective lands. Notices were also issued to the landowners to reach the office of the Special Land Acquisition Officer and receive the amount of compensation and since they neither received the compensation nor any request came from them to make reference to the District Court under Section 18, the compensation amounting to Rs.27 crores was deposited in the government treasury. It is, thus, submitted that there was no default on the part of the Special Land Acquisition Officer or the government and, hence, the acquisition proceedings have not lapsed. Moreover, reliance is also placed on Section 114 of the 2013 Act and it is argued that the concluded land acquisition proceedings are not at all affected by Section 24(2) and the only right that survives to the landowners is to receive compensation.

8. 2013 Act puts in place entirely new regime for compulsory acquisition of land and provides for new scheme for compensation, rehabilitation and resettlement to the affected families whose land has been acquired or proposed to be acquired or affected by such acquisition.

9. To turn, now, to the meaning of the expression “compensation has not been paid” in Section 24(2) of the 2013 Act and its effect on the subject acquisition, it is necessary to refer to Section 24which reads as follows:

“24. (1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894, - 

a) Where no award under section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or
b) Where an award under said section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.
(2) Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894, where an award under the said section 11 has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act:
Provided that where an award has been made and compensation in respect of a majority of land holding has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act.”

10. Insofar as sub-section (1) of Section 24 is concerned, it begins with non obstante clause. By this, Parliament has given overriding effect to this provision over all other provisions of 2013 Act. It is provided in clause (a) that where the land acquisition proceedings have been initiated under the 1894 Act but no award under Section 11 is made, then the provisions of 2013 Act shall apply relating to the determination of compensation. Clause (b) of Section 24(1) makes provision that where land acquisition proceedings have been initiated under the 1894 Act and award has been made under Section 11, then such proceedings shall continue under the provisions of the 1894 Act as if that Act has not been repealed.

11. Section 24(2) also begins with non obstante clause. This provision has overriding effect overSection 24(1). Section 24(2) enacts that in relation to the land acquisition proceedings initiated under 1894 Act, where an award has been made five years or more prior to the commencement of the 2013 Act and either of the two contingencies is satisfied, viz; 

(i) physical possession of the land has not been taken or

(ii) the compensation has not been paid, such acquisition proceedings shall be deemed to have lapsed. On the lapse of such acquisition proceedings, if the appropriate government still chooses to acquire the land which was the subject matter of acquisition under the 1894 Act then it has to initiate the proceedings afresh under the 2013 Act. The proviso appended to Section 24(2) deals with a situation where in respect of the acquisition initiated under the 1894 Act an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries then all the beneficiaries specified in Section 4 notification become entitled to compensation under 2013 Act.

12. To find out the meaning of the expression, “compensation has not been paid”, it is necessary to have a look at Section 31 of the 1894 Act. The said Section, to the extent it is relevant, reads as follows:

“31. Payment of compensation or deposit of same in Court. – (1) On making an award under section 11, the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award, and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next sub-section.
(2) If they shall not consent to receive it, or if there be no person competent to alienate the land, or if there be any dispute as to the title to receive the compensation or as to the apportionment of it, the Collector shall deposit the amount of the compensation in the Court to which a reference under section 18 would be submitted:
xxxx xxxx xxxx xxxx”

13. There is amendment in Maharashtra—Nagpur (City) in Section 31 whereby in sub-section (1), after the words “compensation” and in sub-section (2), after the words, “the amount of compensation”, the words “and costs if any” have been inserted.

14. Section 31(1) of the 1894 Act enjoins upon the Collector, on making an award under Section 11, to tender payment of compensation to persons interested entitled thereto according to award. It further mandates the Collector to make payment of compensation to them unless prevented by one of the contingencies contemplated in sub-section (2). The contingencies contemplated inSection 31(2) are: (i) the persons interested entitled to compensation do not consent to receive it (ii) there is no person competent to alienate the land and (iii) there is dispute as to the title to receive compensation or as to the apportionment of it. If due to any of the contingencies contemplated in Section 31(2), the Collector is prevented from making payment of compensation to the persons interested who are entitled to compensation, then the Collector is required to deposit the compensation in the court to which reference under Section 18 may be made.

15. Simply put, Section 31 of the 1894 Act makes provision for payment of compensation or deposit of the same in the court. This provision requires that the Collector should tender payment of compensation as awarded by him to the persons interested who are entitled to compensation. If due to happening of any contingency as contemplated in Section 31(2), the compensation has not been paid, the Collector should deposit the amount of compensation in the court to which reference can be made under Section 18.

16. The mandatory nature of the provision in Section 31(2) with regard to deposit of the compensation in the court is further fortified by the provisions contained in Sections 32, 33 and34. As a matter of fact, Section 33 gives power to the court, on an application by a person interested or claiming an interest in such money, to pass an order to invest the amount so deposited in such government or other approved securities and may direct the interest or other proceeds of any such investment to be accumulated and paid in such manner as it may consider proper so that the parties interested therein may have the benefit therefrom as they might have had from the land in respect whereof such money shall have been deposited or as near thereto as may be.

17. While enacting Section 24(2), Parliament definitely had in its view Section 31 of the 1894 Act. From that one thing is clear that it did not intend to equate the word “paid” to “offered” or “tendered”. But at the same time, we do not think that by use of the word “paid”, Parliament intended receipt of compensation by the landowners/persons interested. In our view, it is not appropriate to give a literal construction to the expression “paid” used in this sub-section (sub-section (2) of Section 24). If a literal construction were to be given, then it would amount to ignoring procedure, mode and manner of deposit provided in Section 31(2) of the 1894 Act in the event of happening of any of the contingencies contemplated therein which may prevent the Collector from making actual payment of compensation. We are of the view, therefore, that for the purposes of Section 24(2), the compensation shall be regarded as “paid” if the compensation has been offered to the person interested and such compensation has been deposited in the court where reference under Section 18 can be made on happening of any of the contingencies contemplated under Section 31(2) of the 1894 Act. In other words, the compensation may be said to have been “paid” within the meaning of Section 24(2) when the Collector (or for that matter Land Acquisition Officer) has discharged his obligation and deposited the amount of compensation in court and made that amount available to the interested person to be dealt with as provided in Sections 32 and 33.

18. 1894 Act being an expropriatory legislation has to be strictly followed. The procedure, mode and manner for payment of compensation are prescribed in Part V (Sections 31-34) of the 1894 Act. The Collector, with regard to the payment of compensation, can only act in the manner so provided. It is settled proposition of law (classic statement of Lord Roche in Nazir Ahmad[1]) that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden.

19. Now, this is admitted position that award was made on 31.01.2008. Notices were issued to the landowners to receive the compensation and since they did not receive the compensation, the amount (Rs.27 crores) was deposited in the government treasury. Can it be said that deposit of the amount of compensation in the government treasury is equivalent to the amount of compensation paid to the landowners/persons interested? We do not think so. In a comparatively recent decision, this Court in Agnelo Santimano Fernandes[2], relying upon the earlier decision in Prem Nath Kapur[3], has held that the deposit of the amount of the compensation in the state’s revenue account is of no avail and the liability of the state to pay interest subsists till the amount has not been deposited in court.

20. From the above, it is clear that the award pertaining to the subject land has been made by the Special Land Acquisition Officer more than five years prior to the commencement of the 2013 Act. It is also admitted position that compensation so awarded has neither been paid to the landowners/persons interested nor deposited in the court. The deposit of compensation amount in the government treasury is of no avail and cannot be held to be equivalent to compensation paid to the landowners/persons interested. We have, therefore, no hesitation in holding that the subject land acquisition proceedings shall be deemed to have lapsed under Section 24(2) of the 2013 Act.

21. The argument on behalf of the Corporation that the subject land acquisition proceedings have been concluded in all respects under the 1894 Act and that they are not affected at all in view ofSection 114(2) of the 2013 Act, has no merit at all, and is noted to be rejected. Section 114(1) of the 2013 Act repeals 1894 Act. Sub-section (2) of Section 114, however, makes Section 6 of the General Clauses Act, 1897 applicable with regard to the effect of repeal but this is subject to the provisions in the 2013 Act. Under Section 24(2) land acquisition proceedings initiated under the 1894 Act, by legal fiction, are deemed to have lapsed where award has been made five years or more prior to the commencement of 2013 Act and possession of the land is not taken or compensation has not been paid. The legal fiction under Section 24(2) comes into operation as soon as conditions stated therein are satisfied. The applicability of Section 6 of the General Clauses Act being subject to Section 24(2), there is no merit in the contention of the Corporation.

Public Purpose & S. 17 of the Land Acquisition Act : The Law

Justice Ganguly

The Supreme Court in Dev Sharan & Ors. vs State Of U.P.& Ors. has examined the provisions of S. 17 of the Land Acquisition Act. The Supreme Court has examined the meaning of Public Purpose vis-a-vis Right to Property of an individual as envisaged in our Constitution. The Court held as under;

14. In connection with land acquisition proceeding whenever the provision of Section 17 and its various sub-sections including Section 17(4) is used in the name of taking urgent or emergent action and the right of hearing of the land holder under Section 5A is dispensed with, the Court is called upon to consider a few fundamentals in the exercise of such powers.

15. Admittedly, the Land Acquisition Act, a pre-Constitutional legislation of colonial vintage is a drastic law, being expropriatory in nature as it confers on the State a power which affects person's property right. Even though right to property is no longer fundamental and was never a natural right, and is acquired on a concession by the State, it has to be accepted that without right to some property, other rights become illusory. This Court is considering these questions, especially, in the context of some recent trends in land acquisition. This Court is of the opinion that the concept of public purpose in land acquisition has to be viewed from an angle which is consistent with the concept of a welfare State.

16. The concept of public purpose cannot remain static for all time to come. The concept, even though sought to be defined under Section 3(f) of the Act, is not capable of any precise definition. The said definition, having suffered several amendments, has assumed the character of an inclusive one. It must be accepted that in construing public purpose, a broad and overall view has to be taken and the focus must be on ensuring maximum benefit to the largest number of people. Any attempt by the State to acquire land by promoting a public purpose to benefit a particular group of people or to serve any particular interest at the cost of the interest of a large section of people especially of the common people defeats the very concept of public purpose. Even though the concept of public purpose was introduced by pre- Constitutional legislation, its application must be consistent with the constitutional ethos and especially the chapter under Fundamental Rights and also the Directive Principles.

17. In construing the concept of public purpose, the mandate of Article 13 of the Constitution that any pre-constitutional law cannot in any way take away or abridge rights conferred under Part-III must be kept in mind. By judicial interpretation the contents of these Part III rights are constantly expanded. The meaning of public purpose in acquisition of land must be judged on the touchstone of this expanded view of Part-III rights. The open-ended nature of our Constitution needs a harmonious reconciliation between various competing principles and the overhanging shadows of socio-economic reality in this country.

18. Therefore, the concept of public purpose on this broad horizon must also be read into the provisions of emergency power under Section 17 with the consequential dispensation of right of hearing under Section 5A of the said Act. The Courts must examine these questions very carefully when little Indians lose their small property in the name of mindless acquisition at the instance of the State. If public purpose can be satisfied by not rendering common man homeless and by exploring other avenues of acquisition, the Courts, before sanctioning an acquisition, must in exercise of its power of judicial review, focus its attention on the concept of social and economic justice. While examining these questions of public importance, the Courts, especially the Higher Courts, cannot afford to act as mere umpires. In this context we reiterate the principle laid down by this Court in Authorised Officer, Thanjavur and another vs. S. Naganatha Ayyar and others reported in (1979) 3 SCC 466, wherein this Court held:

"......It is true that Judges are constitutional invigilators and statutory interpreters; but they are also responsive and responsible to Part IV of the Constitution being one of the trinity of the nation's appointed instrumentalities in the transformation of the socio- economic order. The judiciary, in its sphere, shares the revolutionary purpose of the constitutional order, and when called upon to decode social legislation must be animated by a goal-oriented approach. This is part of the dynamics of statutory interpretation in the developing countries so that courts are not converted into rescue shelters for those who seek to defeat agrarian justice by cute transactions of many manifestations now so familiar in the country and illustrated by the several cases under appeal. This caveat has become necessary because the judiciary is not a mere umpire, as some assume, but an activist catalyst in the constitutional scheme."

19. In other words public purpose must be viewed through the prism of Constitutional values as stated above.

20. The aforesaid principles in our jurisprudence compel this Court to construe any expropriartory legislation like the Land Acquisition Act very strictly.

21. The judicial pronouncements on this aspect are numerous, only a few of them may be noted here.

22. In DLF Qutab Enclave Complex Educational Charitable Trust vs. State of Haryana and Ors. - (2003) 5 SCC 622, this Court construed the statute on Town Planning Law and held "Expropriatory statute, as is well known, must be strictly construed." (See para 41 page 635).

23. The same principle has been reiterated subsequently by a three-Judge Bench of this Court in State of Maharashtra and Anr. vs. B.E. Billimoria and Ors. - (2003) 7 SCC 336 in the context of ceiling law. (See para 22 at page 347 of the report).

24. These principles again found support in the decision of this Court in Chairman, Indore Vikas Pradhikaran vs. Pure Industrial Coke and Chemicals Ltd. and Ors. - (2007) 8 SCC 705, wherein this Court construed the status of a person's right to property after deletion of Article 19(1)(f) from Part III. By referring to various international covenants, namely, the Declaration of Human and Civic Rights, this Court held that even though right to property has ceased to be a fundamental right but it would however be given an express recognition as a legal right and also as a human right .

25. While discussing the ambit and extent of property right, this Court reiterated that expropriatory legislation must be given strict construction. (See para 53 to 57 at pages 731 to 732 of the report)

26. In the background of the aforesaid discussion, this Court proceeds to examine the scope of a person's right under Section 5A of the Act.

27. Initially, Section 5A was not there in the Land Acquisition Act, 1894 but the same was inserted long ago by the Land Acquisition (Amendment) Act, 1923 vide Section 3 of Act 38 of 1923.

28. The history behind insertion of Section 5A, in the Act of 1894 seems to be a decision of the Division Bench of Calcutta High Court in J.E.D. Ezra vs. The Secretary of State for India and ors reported in 7 C. W. N. 249. In that case, the properties of Ezra were sought to be acquired under the pre amended provision of the Act for expansion of the offices of the Bank of Bengal. In challenging the said acquisition, it was argued that the person whose property is going to be taken away should be allowed a hearing on the principles of natural justice. However the judges found that there was no such provision in the Act. (see p. 269)

29. In order to remedy this shortcoming in the Act of 1894, an amendment by way of incorporation of Section 5A was introduced on 11th July, 1923. The Statement of Objects and Reasons for the said Amendment is as follows:

"The Land Acquisition Act I of 1894 does not provide that persons having an interest in land which it is proposed to acquire, shall have the right of objecting to such acquisition; nor is Government bound to enquire into and consider any objections that may reach them. The object of this Bill is to provide that a Local Government shall not declare, under section 6 of the Act, that any land is needed for a public purpose unless time has been allowed after the notification under section 4 for persons interested in the land to put in objections and for such objections to be considered by the Local Government."

(Gazette of India, Pt. V, dated 14th July, 1923, page 260)

30. The said amendment was assented to by the Governor General on 5th August, 1923 and came into force on 1st January, 1924.

31. The importance and scheme of Section 5A was construed by this Court in several cases. As early as in 1964, this Court in Nandeshwar Prasad and Ors. vs. U.P. Government and Ors. Etc. - AIR 1964 SC 1217 speaking through Justice K.N. Wanchoo (as His Lordship then was) held "...The right to file objections under Section 5A is a substantial right when a person's property is being threatened with acquisition and we cannot accept that that right can be taken away as if by a side-wind....." In that case the Court was considering the importance of rights under Section 5A vis-`-vis Section 17(1) and Section 17(1)(A) of the Act. (See para 13 at page 1222 of the report).

32. The same view has been reiterated by another three-Judge Bench decision of this Court in Munshi Singh and Ors. vs. Union of India - (1973) 2 SCC 337. In para 7 of the report this Court held that Section 5A embodies a very just and wholesome principle of giving proper and reasonable opportunity to a land loser of persuading the authorities that his property should not be acquired. This Court made it clear that declaration under Section 6 has to be made only after the appropriate Government is satisfied on a consideration of the report made by the Collector under Section 5A. The Court, however, made it clear that only in a case of real urgency the provision of Section 5A can be dispensed with (See para 7 page 342 of the report).

33. In Hindustan Petroleum Corporation Limited vs. Darius Shahpur Chennai and ors., (2005) 7 SCC 627, this Court held that the right which is conferred under Section 5A has to be read considering the provisions of Article 300-A of the Constitution and, so construed, the right under Section 5A should be interpreted as being akin to a Fundamental Right. This Court held that the same being the legal position, the procedures which have been laid down for depriving a person of the said right must be strictly complied with.

34. In a recent judgment of this Court in Essco Fabs (supra), (2009) 2 SCC 377, this Court, after considering previous judgments as also the provisions of Section 17 of the Act held:

"41. Whereas sub-section (1) of Section 17 deals with cases of "urgency", sub-section (2) of the said section covers cases of "sudden change in the channel of any navigable river or other unforeseen emergency". But even in such cases i.e. cases of "urgency" or "unforeseen emergency", enquiry contemplated by Section 5-A cannot ipso facto be dispensed with which is clear from sub-section (4) of Section 17 of the Act."

35. This Court, therefore, held that once a case is covered under sub-section (1) or (2) of Section 17, sub-section (4) of Section 17 would not necessarily apply. "54. In our opinion, therefore, the contention of learned counsel for the respondent authorities is not well founded and cannot be upheld that once a case is covered by sub- sections (1) or (2) of Section 17 of the Act, sub-section (4) of Section 17 would necessarily apply and there is no question of holding inquiry or hearing objections under Section 5-A of the Act. Acceptance of such contention or upholding of this argument will make sub- section (4) of Section 17 totally otiose, redundant and nugatory."

36. This Court also held that in view of the ratio in Union of India vs. Mukesh Hans, (2004) 8 SCC 14, sub-section (4) of Section 17 cannot be pressed into service by officers who are negligent and lethargic in initiating acquisition proceedings.

Compensation for Acquisition under the Land Acquisition Act : The Law

Justice Raveendran

The Supreme Court in Anjani Molu Dessai Vs. State of Goa has examined the legal position with regard to the payment of compensation for acquisition of land under the Land Acquisition Act. One of the main grievance raised by owners of such lands, is that the compesation provided is a meagre amount as compared to the real market price. The Supreme Court has examined the aforesaid legal proposition and held as under;

13. The legal position is that even where there are several exemplars with reference to similar lands, usually the highest of the exemplars, which is a bona fide transaction, will be considered. Where however there are several sales of similar lands whose prices range in a narrow bandwidth, the average thereof can be taken, as representing the market price. But where the values disclosed in respect of two sales are markedly different, it can only lead to an inference that they are with reference to dissimilar lands or that the lower value sale is on account of under-valuation or other price depressing reasons. Consequently averaging can not be resorted to. We may refer to two decisions of this Court in this behalf. 

13.1 In Sri Rani M. Vijayalakshmanna Rao Bahadur, Ranee of Vuyyur Vs. The Collector of Madras, 1969 (1) MLJ 45, a three Judge Bench of this Court observed that the proper method for evaluation of market value is by taking the highest of the exemplars and not by averaging of different types of sale transactions. This Court held: 

"It seems to us that there is substance in the first contention of Mr. Ram Reddy. After all, when the land is being compulsorily taken away from a person, he is entitled to say that he should be given the highest value which similar land in the locality is shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition. It is not disputed that the transaction represented by Exhibit R-19 was a few months prior to the notification under section 4, that it was a bona fide transaction and that it was entered into between a willing purchaser and a willing seller. The land comprised in the sale deed is 11 grounds and was sold at Rs.1,961 per ground. The land covered by Exhibit-27 was also sold before the notification, but after the land comprised in Exhibit R-19 was sold. It is true that this land was sold at Rs.1,096/- per ground. This, however, is apparently because of two circumstances. One is that betterment levy at Rs.500 per ground had to be paid by the vendee and the other that the land comprised in it is very much more extensive, that is about 93 grounds or so. Whatever that may be, it seems to us to be only fair that where sale deed, pertaining to different transactions are relied on behalf of the Government, that representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course. In any case we see no reason why an average of two sale deeds should have been taken in this case." 

13.2 In State of Punjab Vs. Hans Raj (1994) 5 SCC 734, this court held: 

"Having given our anxious consideration to the respective contentions, we are of the considered view that the learned single Judge of the High Court committed a grave error in working out average price paid under the sale transactions to determine the market value of the acquired land on that basis. As the method of averaging the prices fetched by sales of different lands of different kinds at different times, for fixing the market value of the acquired land, if followed, could bring about a figure of price which may not at all be regarded as the price to be fetched by sale of acquired land. One should not have, ordinarily recourse to such method. It is well settled that genuine and bona fide sale transactions in respect of the land under acquisition or in its absence the bona fide sale transactions proximate to the point of acquisition of the lands situated in the neighbourhood of the acquired lands possessing similar value or utility taken place between a willing vendee and the willing vendor which could be expected to reflect the true value, as agreed between reasonable prudent persons acting in the normal market conditions are the real basis to determine the market value."

Withdrawal from Acquisition under S. 48 of the Land Acquisition Act : The Law

Justice B.N. Aggarwal

The Supreme Court in Shanti Sports Club & Anr. vs Union Of India & Ors., has examined the law relating to the powers of the state to withdraw from acquisition of land notified for acquisition under S. 4 and 6 of the Land Acquisition Act. The Supreme Court held as under;

28. The requirement of issuing a notification for exercise of power under Section 48(1) of the Act to withdraw from the acquisition of the land can also be inferred from the judgments of this Court in Municipal Committee, Bhatinda v. Land Acquisition Collector and others (1993) 3 SCC 24 (para 8), U.P. State Sugar Corporation Ltd. v. State of U.P. and others (1995) Supp 3 SCC 538 (para 3), State of Maharashtra and another v. Umashankar Rajabhau and others (1996) 1 SCC 299 (para 3) and State of T.N. and others v. L. Krishnan and others (1996) 7 SCC 450 (para 7). In Larsen &Toubro Ltd. v. State of Gujarat and others (1998) 4 SCC 387, the Court considered the question whether the power under Section 48(1) of the Act can be exercised by the Government without notifying the factum of withdrawal to the beneficiary of the acquisition. It was argued that in contrast to Sections 4 and 6, Section 48(1) of the Act does not contemplate issue of any notification and withdrawal from the acquisition can be done by an order simpliciter. It was further argued that power under Section 21 of the General Clauses Act can be exercised for withdrawing notifications issued under Sections 4 and 6. While rejecting the argument, the Court observed:

"..... When Sections 4 and 6 notifications are 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 is made, compensation due for any damage suffered by the owner during the course of acquisition proceedings is determined and given to him. It is, therefore, implicit that withdrawal from acquisition has to be notified.

31. Principles of law are, therefore, well settled. A notification in the Official Gazette is required to be issued if the State Government decides to withdraw from the acquisition under Section 48 of the Act of any land of which possession has not been taken. An owner need not be given any notice of the intention of the State Government to withdraw from the acquisition and the State Government is at liberty to do so. Rights of the owner are well protected by sub-section (2) of Section 48 of the Act and if he suffered any damage in consequence of acquisition proceedings, he is to be compensated and sub- section (3) of Section 48 provides as to how compensation is to be determined. There is, therefore, no difficulty when it is the owner whose land is withdrawn from acquisition is concerned. However, in the case of a company, opportunity has to be given to it to show cause against any order which the State Government proposes to make withdrawing from the acquisition. Reasons for this are not far to seek. After notification under Section 4 is issued, when it appears to the State Government that the land in any locality is needed for a company, any person interested in such land which has been notified can file objections under Section 5-A(1) of the Act. Such objections are to be made to the Collector in writing and who after giving the objector an opportunity of being heard and after hearing of such objections and after making such further enquiry, if any, as the Collector thinks necessary, is to make a report to the Government for its decision. Then the decision of the State Government on the objections is final. Before the applicability of other provisions in the process acquisition, in the case of a company, previous consent of the State Government is required under Section 39 of the Act nor (sic) unless the company shall have executed the agreement as provided in Section 41 of the Act. Before giving such consent, Section 40 contemplates a previous enquiry. Then compliance with Rules 3 and 4 of the Land Acquisition (Company) Rules, 1963 is mandatorily required. After the stage of Sections 40 and 41 is reached, the agreement so entered into by the company with the State Government is to be published in the Official Gazette. This is Section 42 of the Act which provides that the agreement on its publication would have the same effect as if it had formed part of the Act. After having done all this, the State Government cannot unilaterally and without notice to the company withdraw from acquisition. Opportunity has to be given to the company to show cause against the proposed action of the State Government to withdraw from acquisition. A declaration under Section 6 of the Act is made by notification only after formalities under Part VII of the Act which contains Sections 39 to 42 have been complied and the report of the Collector under Section 5-A(2) of the Act is before the State Government who consents to acquire the land on its satisfaction that it is needed for the company. A valuable right, thus, accrues to the company to oppose the proposed decision of the State Government withdrawing from acquisition. The State Government may have sound reasons to withdraw from acquisition but those must be made known to the company which may have equally sound reasons or perhaps more, which might persuade the State Government to reverse its decision withdrawing from acquisition. In this view of the matter it has to be held that Yadi (memo) dated 11-4-1991 and Yadi (memo) dated 3-5-1991 were issued without notice to the appellant (L&T Ltd.) and are, thus, not legal." (emphasis added)

29. The issue deserves to be considered from another angle. All executive actions of the Government of India and the Government of a State are required to be taken in the name of the President or the Governor of the concerned State, as the case may be [Articles 77(1) and 166(1)]. Orders and other instruments made and executed in the name of the President or the Governor of a State, as the case may be, are required to be authenticated in such manner as may be specified in rules to be made by the President or the Governor, as the case may be [Articles 77(2) and 166(2)]. Article 77(3) lays down that the President shall make rules for more convenient transaction of the business of the Government of India, and for the allocation among Ministers of the said business. Likewise, Article 166(3) lays down that the Governor shall make rules for the more convenient transaction of the business of the Government of the State, and for the allocation among Ministers of the said business insofar as it is not business with respect to which the Governor is by or under this Constitution required to act in his discretion. This means that unless an order is expressed in the name of the President or the Governor and is authenticated in the manner prescribed by the rules, the same cannot be treated as an order on behalf of the Government. A noting recorded in the file is merely a noting simpliciter and nothing more. It merely represents expression of opinion by the particular individual. By no stretch of imagination, such noting can be treated as a decision of the Government. Even if the competent authority records its opinion in the file on the merits of the matter under consideration, the same cannot be termed as a decision of the Government unless it is sanctified and acted upon by issuing an order in accordance with Article 77(1) and (2) or Article 166(1) and (2). The noting in the file or even a decision gets culminated into an order affecting right of the parties only when it is expressed in the name of the President or the Governor, as the case may be, and authenticated in the manner provided in Article 77(2) or Article 166(2). A noting or even a decision recorded in the file can always be reviewed/reversed/overruled or overturned and the court cannot take cognizance of the earlier noting or decision for exercise of the power of judicial review.

30. In State of Punjab v. Sodhi Sukhdev Singh AIR 1961 SC 493, this Court considered the question whether a provisional decision taken by the Council of Ministers to reinstate an employee could be made basis for filing an action for issue of a mandamus for reinstatement and held:

".......... We are unable to understand this argument. Even if the Council of Ministers had provisionally decided to reinstate the respondent that would not prevent Council from reconsidering the matter and coming to a contrary conclusion later on, until a final decision is reached by them and is communicated to the Rajpramukh in the form of advice and acted upon by him by issuing an order in that behalf to the respondent."

31. A somewhat similar question was considered by the Constitution Bench in Bachhittar Singh v. The State of Punjab (1962) Supp. 3 SCR 713, in the backdrop of the argument that once the Revenue Minister of PEPSU had recorded a note in the file that the punishment imposed on the respondent be reduced from dismissal to that of reversion, the same could not be changed/reviewed/overruled by the Chief Minister. This Court proceeded on the assumption that the note recorded by the Revenue Minister of PEPSU in the file was an order, referred to the provisions of Article 166 of the Constitution and held:

"Merely writing something on the file does not amount to an order. Before something amounts to an order of the State Government two things are necessary. The order has to be expressed in the name of the Governor as required by clause (1) of Art.166 and then it has to be communicated. As already indicated, no formal order modifying decision of the Revenue Secretary was ever made. Until such an order is drawn up the State Government cannot, in our opinion, be regarded as bound by what was stated in the file. As along as the matter rested with him the Revenue Minister could well score out his remarks or minutes on the file and write fresh ones.

The business of State is a complicated one and necessarily to be conducted through the agency of a large number of officials and authorities. The constitution, therefore, requires and so did the Rules of Business framed by the Rajpramukh of PEPSU provide, that the action must be taken by the authority concerned in the name of the Rajpramukh. It is not till this formality is observed that the action can be regarded as that of the State or here, by the Rajpramukh. We may further observe that, constitutionally speaking, the Minister is no more than an adviser and that the head of the State, the Governor or Rajpramukh (Till the abolition of that office by the Amendment of the Constitution in 1956), is to act with the aid and advice of his Council of Ministers. Therefore, until such advice is accepted by the Governor whatever the Minister or the Council of Ministers may say in regard to a particular matter does not become the action of the State until the advice of the Council of Ministers is accepted or deemed to be accepted by the Head of the State. Indeed, it is possible that after expressing one opinion about a particular matter at a particular stage a Minister or the Council of Ministers may express quite a different opinion, one which may be completely opposed to the earlier opinion. Which of them can be regarded as the 'order' of the State Government ? Therefore to make the opinion amount to a decision of the Government it must be communicated to the person concerned. In this connection we may quote the following from the judgment of this Court in the State of Punjab v. Sodhi Sukhdev Singh. "Mr. Gopal Singh attempted to argue that before the final order was passed the Council of Ministers had decided to accept the respondent's representation and to reinstate him, and that, according to him, the respondent seeks to prove by calling the two original orders. We are unable to understand this argument.

Even if the Council of Ministers had decided to reinstate the respondent that would prevent the Council from reconsidering the matter and coming to a contrary conclusion later on, until final decision is reached by them and is communicated to the Rajpramukh in the form of advice and upon by him by issuing an order in that behalf to the respondent."

Thus it is of the essence that the order has to communicated to the person who would be affected by that order before the State and that person can be bound by that order. For, until the order is communicated to the person affected by it, it would be open to the Council of Ministers to consider the matter over and over again and, therefore, till its communication the order cannot be regarded as anything more than provisional in character. We are, therefore, of the opinion that the remarks or the order of the Revenue Minister, PEPSU are of no avail to the appellant."

[emphasis added]

32. In State of Bihar and others v. Kripalu Shankar and others (1987) 3 SCC 34, a two-Judge Bench while considering the question whether notings recorded in the file would constitute civil or criminal contempt within the meaning of Section 2(b) and (c) of the Contempt of Courts Act observed as under:-

"14. Now, the functioning of Government in a State is governed by Article 166 of the Constitution, which lays down that there shall be a council of ministers with the Chief Minister at the head, to aid and advise the Governor in the exercise of his functions except where he required to exercise his functions under the Constitution, in his discretion. Article 166 provides for the conduct of Government business. It is useful to quote this article: 166 (1) All executive action of the government of State shall be expressed to be taken in the name the Governor.

(2) Orders and other instruments made and executed in the name of the Governor shall be authenticated such manner as may be specified in rules to be by the Governor, and the validity of an order instrument which is so authenticated shall not called in question on the ground that it is not order or instrument made or executed by the Governor. (3) The Governor shall make rules for the convenient transaction of the business of government of the State, and for the allocation among Ministers of the said business insofar as it is business with respect to which the Governor is by or under this Constitution required to act in discretion.

15. Article 166(1) requires that all executive action of the State Government shall be expressed to be taken in the name of the Governor. This clause relates to cases where the executive action has to be expressed in the shape of a formal order or notification. It prescribes the mode in which an executive action has to be expressed. Noting by an official in the departmental file will not, therefore, come within this article nor even noting by a Minister. Every executive decision need not be as laid down under Article 166(1) but when it takes the form of an order it has to comply with Article 166(1). Article 166(2) states that orders and other instruments made and executed under Article 166(1), shall be authenticated in the manner prescribed. While clause (1) relates to the mode expression, clause (2) lays down the manner in which the order is to be authenticated and clause (3) relates to the making of the rules by the Governor for the convenient transaction of the business of the Government. A study of this article, therefore, makes it clear that the notings in a file get culminated into an affecting right of parties only when it reaches the head of the department and is expressed in the name of the Governor, authenticated in the manner provided in Article 166(2)."

33. In Rajasthan Housing Board v. Shri Kishan (1993) 2 SCC 84, this Court made a detailed reference to the records and affidavit filed on behalf of the Rajasthan Housing Board and held: "From the above material, it is clear that there was no final decision at any time to de-notify the said lands. A tentative decision was no doubt taken in February 1990 but before it could be implemented the Government thought it necessary to ascertain in views of the Housing Board and to find out as to what the Board had done upon the land, what structures it had raised and what amount it had spent so that the Board could be compensated while delivering the possession back to the Housing Society. Before this could be done there was a change in the Government and the said tentative decision was reversed. In this view of the matter, it is not necessary for us to go into the question whether there was a communication of the `decision' of the Government to the petitioner. The communication must be of a final decision and not of a provisional or tentative decision."

34. The issue was recently considered in Sethi Auto Service Station and another v. Delhi Development Authority and others (2009) 1 SCC 180. In that case, the appellant had claimed relocation of two petrol pumps which had become non-profitable on account of construction of 8 lane express highway between Delhi and Gurgaon. The appellants relied on the notings recorded by the technical committee headed by the Vice Chairman, DDA. It was urged that the technical committee had recommended relocation of the petrol pumps, it was not open to DDA to do a volte face and reject the representation of the appellants. On behalf of the respondents, it was urged that mere notings and proposal recorded in the files of DDA did not create any right in favour of the appellants and the final decision taken by DDA against relocation of petrol pumps was consistent with the policy in vogue. This Court approved the High Court's refusal to interfere with DDA's decision and observed: "It is trite to state that notings in a departmental file do not have the sanction of law to be an effective order. A noting by an officer is an expression of his viewpoint on the subject. It is no more than an opinion by officer for internal use and consideration of the other officials of the department and for the benefit of the final decision-making authority. Needless to add that internal notings are not meant for outside exposure. Notings in the file culminate into an executable order, affecting the rights of the parties, only when it reaches the final decision-making authority in the department, gets his approval and the final order is communicated to the person concerned."

35. In C.W.P. No.325/1982 - Ram Phal v. Union of India, which was decided by the Full Bench of the High Court along with other cases, vide Roshanara Begum v. Union of India, an application was moved by the petitioners with the prayer that the acquisition proceedings may be quashed because the Central Government has issued an order under Section 48(1) of the Act for withdrawal of the acquisition proceedings in respect of the land which was subject matter of the writ petition. On behalf of the Central Government, it was urged that no order has been made by the Central Government for withdrawing from acquisition of the land in question and communication regarding withdrawal was sent due to misreading of orders made in the file. Counsel representing the Union of India went to the extent of arguing that if the court was to infer that any such order has been made by the Central Government, then the same be treated as non est and declared as illegal and void because the land was being acquired for planned development of Delhi. It was argued that before an order under Section 48 could come into play, the same is required to be published in the official gazette in the same manner in which notification under Section 4 and declaration under Section 6, are published. The Full Bench adverted to Section 48(1) of the Act and observed:

"Section 48 of the Act lays down that Government shall be at liberty to withdraw from the acquisition of any land of which possession has not been taken. The original record in which the Minister concerned had made the order was produced before us which we have perused and as a matter of fact, the learned counsel for the petitioner has placed on record the photocopies of the notings on which the order of the Minister has been accorded. It is evident that if this Court is to come to the conclusion on reading the said record that in fact no order has been made by the Minister concerned which amounts to withdrawing from acquisition, mere communication of the misconstrued order by the officials would not have the effect of an order of the Government withdrawing from the acquisition."

36. The Full Bench then examined the notings in the file, referred to Section 21 of the General Clauses Act, 1897 and concluded:

"157. Section 48 by itself does not require publication of such an order in the Official Gazette. As a matter of fact, there is no repugnancy between the provisions of Section 48 of the Act as read with Section 21 of the General Clauses Act. The purpose of issuance of publication of notifications and declarations under Sections 4 and 6 of the Act in Official Gazette are that public at large should become aware of the factum that the land so notified is to be acquired for public purpose so that people at large should not suffer any monetary loss or any other inconveniences in entering into any deals in respect of such land, subject-matter of acquisition. As an analogy of the purpose enshrined in notification issued under Section 4 and declaration issued under Section 6 for their publication in Official Gazette is also, in our view, linked to the order which is made under Section 48 of the Act for withdrawing from such acquisition and unless the same is also published in the manner as the original notifications, the said object could not be achieved i.e. of giving public notice to the public at large."

37. As a result of the above discussion, we hold that the noting recorded in the official files by the officers of the Government at different levels and even the Ministers do not become decision of the Government unless the same is sanctified and acted upon by issuing an order in the name of the President or Governor, as the case may, authenticated in the manner provided in Articles 77(2) and 166(2) and is communicated to the affected persons. The notings and/or decisions recorded in the file do not confer any right or adversely affect the right of any person and the same can neither be challenged in a court nor made basis for seeking relief. Even if the competent authority records noting in the file, which indicates that some decision has been taken by the concerned authority, the same can always be reviewed by the same authority or reversed or over-turned or overruled by higher functionary/authority in the Government.

38. Reverting to the case in hand, we find that representation made on behalf of appellant No.1 was examined by different functionaries of the Government and DDA. On 8.6.1999, the then Minister for Urban Development recorded a note in the file that extensive construction has taken place and this must have been possible with the cooperation of the concerned officers and opined that no demolition can or will be ordered as per the policy. He then recorded that suitable terms for regularization be settled by negotiations and left the matter there for consideration by his successor. That noting was never translated into an order nor the same was published in the official gazette in the form of a notification. It was not even communicated to the appellants or DDA. The reason for this is not far to seek. The Minister had himself left the matter for consideration and decision by his successor. The latter finally decided on 14.7.1999 that the appellants request for de-notification of the land cannot be accepted because the development was carried out after its acquisition and also because the land is required for a public purpose, i.e, Vasant Kunj Residential Project, which was held up due to prolonged litigation. This being the position, the appellants cannot rely upon the note recorded by the then Minister on 8.6.1999 for pleading before the Court that the Government had taken decision to withdraw from the acquisition of land in question in terms of Section 48(1) of the Act.

39. Before leaving this part of the discussion, we consider it necessary to observe that there have been several cases of exercise of power under Section 48(1) of the Act for extraneous considerations defeating the very purpose of acquisition. Two such instances have been considered by this Court in Chandra Bansi Singh v. State of Bihar (1984) 4 SCC 316 and Rajasthan Housing Board v. Sri Kishan (supra). The facts of Chandra Bansi Singh's case were that on 19.8.1974, the Government of Bihar issued notification under Section 4 for acquisition of 1034.94 acres of land in village Digha for the purpose of construction of houses by the Bihar State Housing Board. After consideration of objections, declaration under Section 6 was issued and published on 20.2.1976. On 8.11.1976, a representation was made by one Mr. Ram Avtar Shastri, Member of Parliament for withdrawing the acquisition proceedings. The same was rejected in December, 1976. However, before compensation could be disbursed to the land owners, general elections were announced and, therefore, the matter was deferred and put in cold storage. On 24.5.1980, 4.03 acres land belonging to Pandey families was released from acquisition. In the same year, a writ petition was filed in the High Court challenging release of land in favour of Pandey families but the same was withdrawn. In May 1981, another writ petition was filed on the same subject and it was pleaded that release of land in favour of Pandey families is violative of Article 14 of the Constitution. The State Government supported the release of land in favour of Pandey families by asserting that they had put up buildings with boundary walls in the entire area covered by 4.03 acres and that it would have been difficult for government to demolish the construction. This was controverted by the petitioner, who produced several photographs to show that no huge buildings or houses were constructed and only small hutment had been put up on the land. After considering the entire record, this Court ruled that release of land in favour of Pandey families was pure and simple act of favouritism without there being any legal or constitutional justification for the same and declared the action of the State Government to be violative of Article 14 of the Constitution. The Court also declared that the entire acquisition will be deemed to be valid and the land released to Pandey families would form part of the acquisition initiated vide notification dated 19.8.1974.

40. The facts of Sri Kishan's case were that 2570 bighas of land (approximately equal to 1580 crores) was acquired for the benefit of the Rajasthan Housing Board by publication of notification under Section 4(1) read with Section 17(4) of the Act. The learned Single Judge of the High Court dismissed the writ petitions involving challenge to the acquisition proceedings. On appeals filed by the land owners, Judges constituting the Division Bench expressed divergent opinions. Thereupon, the matter was referred to the larger Bench. By a majority judgment, the larger Bench quashed the notification issued under Section 17(4) and declaration issued under Section 6. During the pendency of appeals before this Court, a writ petition was filed by New Pink City Grah Nirman Sahkari Sangh. Therein it was pleaded that by virtue of the decision of the Minister-in-charge, Urban Development Department and the Chief Minister, the State Government must be deemed to have withdrawn from the acquisition within the meaning of Section 48(1) of the Act. This Court noted that the society, which claims to have purchased 525 bighas of land from khatedars, represented the Government to de- notify the land. The then Minister-in-charge, Urban Development Department recorded a decision in the file on July 20, 1984 that the lands be released, but his decision was overruled by the Chief Minister. After about five years, the society again represented for de-notification of the land. The Minister for Urban Development made recommendation in favour of the society. This time, the Chief Minister agreed with the Minister by observing that the land of the society was regularised according to the decision of the Cabinet. Thereafter, Deputy Secretary, Urban Development and Housing Department wrote a letter to the Secretary of the Housing Board that the Government has decided to release the land of the society. A copy of the letter was marked to the society. During the pendency of writ petition before this Court, an additional affidavit of the Secretary, Rajasthan Housing Board was filed with a categorical assertion that at no point of time any notification was issued withdrawing from the acquisition and the Beri Commission, which was constituted to look into the illegalities and irregularities committed by functionaries and officials of the previous Government, recorded a categorical finding that the decision to de-acquire the land of the petitioner - society was in contravention of the earlier decision of the Cabinet and was also contrary to law and against public interest. This Court held that the notings recorded by the Minister and Chief Minister for release of land in favour of the society, were totally unjustified.

Publication under the Land Acquisition Act : The Principles

Justice Raveendran

The Supreme Court, speaking through Justice Raveendran, in Special Deputy Collector vs J. Sivaprakasam & Ors., has discussed the principles governing publication of notification under Section 4 and / or Section 6 of the Land Acquisition Act. Section 4 of the Land Acquisition Act provides for publication of the notification in 2 newspapers circulating in the locality, one of which is required to be in the regional language. The non-compliance of the aforesaid requirements vitiate acquisition proceedings, as interested persons / land owners are deprived of their rights to file objections to the acquisition proceedings. The Supreme Court, in the aforesaid judgment, has examined the provisions of the Land Acquisition Act with regard to publication of notifications, and has observed as under;

Re: Question (i) : Publication in newspapers circulating in the locality

14. Sub-section 4(1) of the Act relates to publication of preliminary notification and relevant portion thereof is extracted below: "4. Publication of preliminary notification and powers of officers thereupon.--(1) Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose or for a company a notification to that effect shall be published in the Official Gazette and in two daily newspapers circulating in that locality of which at least one shall be in the regional language, and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality ....." Section 4(1) of the Act requires publication of the preliminary notification by three modes : (i) publication in the official gazette; (ii) publication in two daily newspapers circulating in the locality, at least one of which being in the regional language; and (iii) causing public notice of the substance of such preliminary notification to be given at convenient places in the locality. 

15. The controversy in this case relates to the second mode, that is publication in "two daily newspapers circulating in that locality". The provision does not use the words "two daily newspapers having a wide circulation in the locality". In the absence of any definition or explanation in the Statute, the question is as to how should the words `circulating in that locality' be understood? Do they refer to newspapers having the widest circulation in the locality? Or do they refer to newspapers which are regularly sold or circulated in the locality, irrespective of numbers, even if their circulation figures are very modest? If there are nine newspapers circulating in the locality, having a market share of 25%, 20%, 15%, 12%, 10%, 8%, 5%, 3% and 2% of the total daily sales of regional newspapers in the locality, whether all of them can be termed as `newspapers circulating in the locality' or whether only newspapers with a particular minimum percentage can be described as `newspapers circulating in the locality'. Can it be said that the newspapers having 5%, 3% and 2% of total sales of newspapers, are not newspapers circulating in the locality? Can it be said that only the newspapers having the maximum market share of 25% or 20% or 15% of the total sales in the locality, could be described as newspapers circulating in the locality? Whether the total circulation figures of the newspaper are relevant or whether the circulation figures in the locality alone are relevant? From a newspaper's point of view, if its total circulation is 40,000 and out of it circulation figure for Chennai is 21,000, it can very well say that it's major circulation is in Chennai. But from the reader's point of view, if the total number of regional newspapers sold in Chennai is a million, a newspaper having a circulation of 21,000 (which is around 2%) may not be considered to be a newspaper with a wide circulation in the locality. Which perspective should be preferred? If section 4(1) is to be interpreted as requiring publication in two newspapers having reasonably wide circulation, as held by the High Court, what should be the guidelines to determine `reasonably wide circulation'? Where should the line be drawn and whether any line should be drawn are questions that may arise, if we read the words `newspapers circulating in that locality' as `newspapers having wide circulation in that locality'.

16. The purpose of publication of the notification is two fold: First is to ensure that adequate publicity is given so that land owners and persons interested will have an opportunity to file their objections under Section 5A of the Act. Second is to put the land owners/occupants on notice that government officers will be entering upon the property for carrying on the activities enumerated in section 4(2) of the Act. Section 4(1), before its amendment in 1984, required publication of the preliminary notification only in the official gazette and public notice, of the substance of the notification at convenient places in the locality. This Court, in Madhya Pradesh Housing Board vs. Mohd Shafi & Ors. 1992 (2) SCC 168 explained the object of issuing a notification under Section 4 of the Act thus: "The object of issuing a notification under Section 4 of the Act is two- fold. First, it is a public announcement by the Government and a public notice by the Collector to the effect that the land, as specified therein, is needed or is likely to he needed by the Government for the "public purpose" mentioned therein; and secondly, it authorizes the departmental officers or officers of the local authority, as the case may be to do all such acts as are mentioned in Section 4(2) of the Act. The notification has to be published in the locality and particularly persons likely to be affected by the proposal have to be put on notice that such an activity is afoot. The notification is, thus, required to give with sufficient clarity not only the "public purpose" for which the acquisition proceedings are being commenced but also the "locality" where the land is situate with as full a description as possible of the land proposed to be acquired to enable the "interested" persons to know as to which land is being acquired and for what purpose and to take further steps under the Act by filing objections etc., since it is open to such persons to canvass the non-suitability of the land for the alleged "public purpose" also. If a notification under Section 4(1) of the Act is defective and does not comply with the requirements of the Act, it not only vitiates the notification, but also renders all subsequent proceedings connected with the acquisition, bad."

17. By Amendment Act 68 of 1984, section 4(1) was amended introducing the additional requirement relating to publication of the notification in two daily newspapers circulating in the locality. The purpose of requiring such newspaper publication is to give as wide a publicity to the notification as possible, as the State Gazettes do not have a wide circulation and causing public notice of the substance of the notification at convenient places in the locality would give notice only in specific pockets in the locality. Legislature therefore provided for publication in two newspapers (of which at least one being in the regional language) to have a wider reach. Having regard to the object and purpose of the provision, it is evident that publication should be in newspapers which have a reasonably good circulation in the locality. If the publication is to be made in obscure newspapers having only token or insignificant circulation, either to cut the cost of publication or by way of political or official patronage, that will defeat the very purpose of providing for publication in newspapers.

18. On the other hand, if the words `newspapers circulating in that locality' are to be interpreted in a purely literal and normal sense, they would mean newspapers having a regular and steady circulation among the general public in the locality, irrespective of the number. In that sense even a newspaper having 2% to 3% market share out of the total circulation figures for regional newspapers sold in the locality, can be considered as a newspaper "circulating in the locality". Therefore, where there is compliance with the requirement relating to publication in two daily newspapers circulating in that locality (one which at least should be in the regional language) in a technical or literal sense, but it is found that those newspapers have only a circulation share of 2% to 3% of the total number of newspaper sold in the locality, it may not be possible to mechanically invalidate the entire acquisition, on the ground that the two regional newspapers in which the notification was published were not "circulating in that locality".

19. We have held that the object and purpose of the amended section 4(1) of the Act is to provide for publication of the preliminary notification in two daily newspapers having reasonably wide circulation in the locality so that people (persons interested) in that locality may become aware of the proposals for acquisition. We have also held that publications in two newspapers having regular and steady circulation, but having a market share of only 2% to 3% of the total newspapers can not invalidate the acquisition proceedings automatically, on the ground that such publication violates the requirement of section 4(1) relating to newspaper publication. As the said two findings are slightly contradictory, it is necessary to harmonize the consequences.

20. This leads us next to the consequences of publication of the notification in two newspapers having reasonably wide circulation and consequences of bonafide publication of the notification in two newspapers which do not have a wide circulation in the locality. 

20.1) If there is failure to publish in two daily newspapers or if the publication is in two newspapers that have no circulation at all in the locality, without anything more, the notification under section 4(1) of the Act and the consequential acquisition proceedings will be vitiated, on the ground of non-compliance with an essential condition of section 4(1) of the Act.

20.2) If the two newspapers carrying the publication of the notification have reasonably wide circulation in the locality, (apart from the publication of the notification in the Gazette and causing public notice of the substance of the notification to be given at convenient places in the locality), then the requirements of section 4(1) are complied with and all persons concerned in the locality shall be deemed to have notice of the notification. (For this purpose, the publication need not be in newspapers having the widest or largest circulation, but it is sufficient if the publication is in newspapers having reasonably wide circulation). In that event, neither the notification under section 4(1), nor the consequential acquisition proceedings would be open to challenge, on the ground of violation of Section 4 of the Act. 

20.3) If the newspapers in which the notification is published were circulating in the locality, but did not have a reasonably wide circulation in the locality, then neither the notification under section 4(1) nor the consequential acquisition proceedings, will become vitiated automatically. If the person aggrieved, apart from demonstrating that the two newspapers did not have reasonably wide circulation in the locality, also asserts that as a consequence, he did not have notice of the proposed acquisition that was provided for in Section 4(1) of the Act, in the absence of evidence to the contrary, the acquisition to the extent of the land of such person will be vitiated. But if such assertion is rebutted by the acquiring authority by placing evidence to show that the person concerned had in fact notice (as for example where he participated in the enquiry under section 5A of the Act), the acquisition will not be vitiated on the ground of violation of section 4A of the Act.

20.4) If the person challenging the acquisition is able to establish that the notifications were deliberately and with malafides, published in newspapers having negligible circulation, to avoid notice to the persons concerned, then section 4(1) will be violated.

21. The acquiring authority need not prove actual notice of the proposal to acquire under section 4(1) of the Act, to the person challenging the acquisition. As the purpose of publication of public notice provided in section 4(1) of the Act is to give notice of the proposal of acquisition to the persons concerned, such notice can also be by way of implied notice or constructive notice. For this purpose, we may refer to the difference between actual, implied and constructive notices.

21.1) When notice is directly served upon a party in a formal manner or when it is received personally by him, there is actual notice. 

21.2) If from the facts it can be inferred that a party knew about the subject matter of the notice, knowledge is imputed by implied notice. For example, if the purpose of the notice is to require a party to appear before an authority on a particular date, even though such a notice is not personally served on him, if the person appears before the authority on that date or participates in the subsequent proceedings, then the person can be said to have implied notice.

21.3) Notice arising by presumption of law from the existence of certain specified facts and circumstances is constructive or deemed notice. For example, any person purchasing or obtaining a transfer of an immovable property is deemed to have notice of all transactions relating to such property effected by registered instruments till the date of his acquisition. Or, where the statute provides for publication of the notification relating to a proposed acquisition of lands in the Gazette and newspapers and by causing public notice of the substance of the notification at convenient places in the locality, but does not provide for actual direct notice, then such provision provides for constructive notice; and on fulfillment of those requirements, all persons interested in the lands proposed for acquisition are deemed to have notice of the proposal regarding acquisition.