Public beach access and statutory agreement terms prevailed over vesting, while unauthorised construction on acquired land was invalid.

Land acquired for a tourism development project was characterised as acquisition under Section 40(1)(aa) of the Land Acquisition Act, 1894, not Section 40(1)(b). The statutory agreement preserved an existing public pathway to the beach through survey No. 803, and that access remained enforceable despite vesting in the State under Section 16. Construction on a portion of survey No. 803 breached the agreement's prohibition on unauthorised building activity and was liable to demolition notwithstanding later planning approvals. The created facilities were not required to be opened to the general public free of cost, as the agreement contemplated use on membership or permitted-use terms.

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Issues: (i) Whether the acquisition of survey Nos. 803 and 804 was under Section 40(1)(aa) or Section 40(1)(b) of the Land Acquisition Act, 1894; (ii) whether public access to the beach through survey No. 803 existed before acquisition and had to be maintained under the agreement; (iii) whether such access stood extinguished on vesting of the land in the State; (iv) whether construction raised on a portion of survey No. 803 was illegal and liable to demolition under the agreement; and (v) whether the facilities and amenities created on survey No. 803 had to be made available to the public.

Issue (i): Whether the acquisition of survey Nos. 803 and 804 was under Section 40(1)(aa) or Section 40(1)(b) of the Land Acquisition Act, 1894.

Analysis: The acquisition was initiated for a tourism development project involving hotel-related amenities and ancillary recreational facilities. The statutory scheme distinguishes acquisition for a building or work for a company engaged in an industry or work of public purpose under Section 40(1)(aa) from acquisition for work directly useful to the public under Section 40(1)(b). The notification and agreement showed that the land was needed for the company's tourism project and for creation of sports and recreational amenities integral to that project. The public purpose underlying tourism in Goa supported the characterization of the acquisition as one falling within Section 40(1)(aa), not Section 40(1)(b).

Conclusion: The acquisition was under Section 40(1)(aa) of the Land Acquisition Act, 1894, and the contrary finding was unsustainable.

Issue (ii): Whether public access to the beach through survey No. 803 existed before acquisition and had to be maintained under the agreement.

Analysis: The pleadings and contemporaneous documents showed long-standing public use of a pathway through survey No. 803 to reach the beach. Admissions in earlier proceedings and the site plan supported the existence of that traditional access. Clause 4(ix) of the agreement expressly required that public access/road to the beach not be affected or obstructed. The statutory agreement, having been executed under Section 41 and published under Section 42, bound the parties. The public trust principle also reinforced the obligation to preserve access to a public beach.

Conclusion: Public access through survey No. 803 existed and had to be maintained without obstruction.

Issue (iii): Whether such access stood extinguished on vesting of the land in the State.

Analysis: Section 16 vests acquired land in the Government free from encumbrances, but the agreement itself preserved the traditional right of access. The right of passage was not treated as a merely extinguishable encumbrance in the circumstances of this acquisition because the State had consciously contracted to preserve it. The statutory agreement therefore controlled the effect of vesting.

Conclusion: The public access did not stand extinguished by vesting under Section 16 of the Land Acquisition Act, 1894.

Issue (iv): Whether construction raised on a portion of survey No. 803 was illegal and liable to demolition under the agreement.

Analysis: Clause 4(viii) of the agreement contained an express prohibition against construction of any building or structure on the acquired land and required prior approval for developmental activity. The later approvals by planning authorities could not override or amend the statutory agreement entered into under Section 41 and given force by Section 42. The extension on survey No. 803 was therefore contrary to the acquisition purpose and in breach of the agreement, attracting the resumption/demolition machinery under Clause 6.

Conclusion: The construction on survey No. 803 was illegal and liable to demolition in accordance with the agreement.

Issue (v): Whether the facilities and amenities created on survey No. 803 had to be made available to the public.

Analysis: The material showed that the project contemplated use of the facilities by hotel residents and non-residents on membership terms, not free public access. The agreement did not impose an obligation to open those facilities to the general public without payment or permission.

Conclusion: No enforceable obligation existed to provide the facilities and amenities to the public free of cost.

Final Conclusion: The appeals failed overall, the High Court's core directions regarding preservation of beach access and removal of the unauthorized construction were upheld, and only the contention that the created facilities had to be thrown open to the public was rejected.

Ratio Decidendi: Where land is acquired for a company under Section 40(1)(aa) and the statutory agreement executed under Section 41 preserves an existing public access and forbids construction contrary to the acquisition purpose, subsequent administrative approvals cannot override that agreement, and the preserved access remains enforceable despite vesting under Section 16.

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