1985 (2) TMI 300 - SC - Indian Laws

Supreme Court: Rule 4 not mandatory for Land Acquisition Act notifications

Formento Resorts & Hotels Ltd. Versus Gustavo Ranato De Cruz Pinto

The Supreme Court held that compliance with Rule 4 of the Land Acquisition (Companies) Rules, 1963 is not mandatory before issuing notifications under ... - Issues Involved:1. Whether compliance with Rule 4 of the Land Acquisition (Companies) Rules, 1963 is necessary before issuing notifications under Section 4 of the Land Acquisition Act, 1894.2. Validity of the High Court's decision to quash notifications under Sections 4 and 6 of the Land Acquisition Act due to non-compliance with Rule 4.Issue-wise Detailed Analysis:1. Compliance with Rule 4 before Issuing Notifications under Section 4:The core issue in this appeal is whether compliance with Rule 4 of the Land Acquisition (Companies) Rules, 1963 is necessary before issuing notifications under Section 4 of the Land Acquisition Act, 1894. The appellant argued that such compliance is not mandatory for the initiation of acquisition proceedings. The Supreme Court examined the scheme of the Act, noting that Section 4 does not require the government to be satisfied that the land is needed for a public purpose or for a company; it only requires that it 'appears' to the government that the land is needed. The Court emphasized that an enquiry under Rule 4 might be made before issuing the notification under Section 4, but it is not a sine qua non for such issuance. The Court stated, 'Section 4 does not require government to be satisfied, it is sufficient if it appears to the government that land is needed either for public purpose or for a Company.'2. Validity of the High Court's Decision:The High Court of Bombay (Goa Bench) quashed the notifications under Sections 4 and 6 of the Act on the ground that an enquiry under Rule 4 was not held prior to the notification under Section 4. The Supreme Court disagreed with this conclusion, reasoning that the scheme and language of the Act and Rules do not indicate that an enquiry under Rule 4 must precede the issuance of a notification under Section 4. The Court pointed out that 'Section 6 undoubtedly requires satisfaction of the government and enquiry contemplated under Rule 4 must precede publication of the notification under Section 6 of the Act.' However, it clarified that this requirement does not extend to Section 4 notifications. The Court further noted that insisting on compliance with Rule 4 before issuing a Section 4 notification could complicate the fixation of market value and escalate prices, making acquisition difficult.The Supreme Court also referenced previous decisions, including Abdul Husein Tayabali v. State of Gujarat, where the Court observed that the enquiry under Rule 4 and the report are factors to be considered before issuing a Section 6 notification, but did not establish that such an enquiry must precede a Section 4 notification. The Court concluded that while an enquiry under Rule 4 may precede a Section 4 notification, it is not mandatory.Conclusion:The Supreme Court set aside the Bombay High Court's decision that non-compliance with Rule 4 before the issuance of a Section 4 notification is invalid. The matter was remitted back to the High Court to decide on other grounds that were not addressed. The Court emphasized the importance of addressing all points in a matter to avoid delays and protracted litigation. The appeal was allowed, and the costs of the appeal were to abide by the result of the High Court's decision.