TaxTMI 
TaxTMI 
2016 (3) TMI 1217
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is engaged in the hospitality industry. It is the owner of a hotel doing business in the name and style of Cidade de Goa. The said hotel has been constructed on land owned and possessed by the respondent. Sometime in November 1978, the third respondent addressed a letter to the Government to initiate acquisition proceedings under the Land Acquisition Act, 1894 (hereinafter referred to as 'the Central/Principal Act') so as to acquire land covered by Survey Nos. 803 and 804 (new nos.246/2 and 245/2) located within the area of Gram Panchayat Taleigao. The said land is contiguous to the plot(s) owned by it on which the hotel was located. A notification under Section 4 of the Central/Principal Act was issued on 29.10.1980 declaring that the land covered by Survey Nos.803 and 804 was needed for the public purpose of tourism development. 4. As the acquisition of the land was to be made under Part VII of the Principal Act, there was an enquiry held as contemplated under Section 40 of the Act which was followed by an agreement dated 26.10.1983 as required under Section 41 of the Act. The opening paragraphs and Clauses 3, 4 and 6 of the agreement would require specific notice and therefo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y a period not exceeding one year at a time so however that the total period shall not exceed six years. (iv) The Company shall keep at all times and maintain the said land and the amenities created thereon, in good order and condition to the satisfaction of the Government or any officer or officers authorised by the Government. (v) The Company shall maintain all records of the Company properly and supply to the Government punctually any information as may from time to time be required by the Government. (vi) The Company shall not use the said land or any amenities created thereon for any purpose which in the opinion of the Government is objectionable. (vii) The Company shall conform to all the laws and the rules and guidelines made by the Government from time to time regarding preservation of ecology and environment. (viii) The Company shall never construct any building or structures in the acquired land. Prior approval of Eco-Development Council of the Government of Goa, Daman and Diu will be obtained before undertaking activities for its development, besides other statutory requirements under the existing laws. (ix) The publi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eld on 20.6.1991. Permission was granted by the Development Authority on 20.4.1992 to carry out development on land covered, amongst others, by Survey No.803. Thereafter, construction was raised by the third respondent inter alia on about 1,000 square mtrs. of land covered by Survey no.803 (246/2). 7. The aforesaid construction raised and completed on the land covered by Survey No.803 (246/2) came to be challenged before the Goa Bench of the Bombay High Court, inter alia by the present writ petitioner. By judgment and order dated 25.04.2000, the challenge raised was upheld and the construction made by the third respondent was ordered to be demolished and the land resumed. 8. Aggrieved, the third respondent challenged the said order of the High Court by instituting Civil Appeal Nos.4154-4156 of 2000 before this Court which was dismissed on 20.1.2009 with the following operative directions. "(i) The appellants are allowed three months' time to demolish the extended portion of the hotel building which was constructed on 1000 sq m of Survey No. 803 (new No. 246/2) and, thereafter report the matter to the Development Authority which shall, in turn, submit a report to that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....overnment and the Company on mutually agreed terms in furtherance of the purpose for which the land was acquired, by publication of the modified agreement in the Official Gazette, and any such modifications made in the agreement, shall come into force from the date on which the original agreement with the Company was executed under this section and any action taken or things done under the modified agreement, shall, for all purposes, be deemed and to have always been done or taken in accordance with the original agreement. (8) Notwithstanding anything contained in any judgment, decree or order of any Court, Tribunal or any other authority, if, in any agreement entered into between the Government and the Company, there be any clause prohibiting the Company to construct any building or structure in the acquired land, such clause shall deemed to have been deleted with retrospective effect from 15-10-1964. (9) No suit or other proceeding shall be instituted, maintained or continued in any Court or before any Tribunal or other authority for cancellation of such permission or for demolition of buildings which were constructed after obtaining the permissions from the Sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reements to bring in conformity with the purpose of acquisition or in public interest. This Bill seeks to achieve the above objects" 11. Thereafter on 6.3.2009 the original agreement was amended by a supplementary agreement which deleted clause 4 (viii) of the original/principal agreement in the following manner: "1)That in the Principal Agreement, in Condition 4, clause (viii) shall be deemed to have been deleted with retrospective effect from 26/10/83 and the Principal Agreement shall be so read and construed as if in condition 4, clause (viii) never existed in the Principal Deed w.e.f. 26/10/1983. In condition 6 of the Principal Agreement, for the expression "as hereinafter recited", the expression "namely tourism development project including construction of hotel" shall be substituted. That save as varied as hereinbefore provided in the Principal Agreement, all terms and conditions thereof shall continue to be binding on the parties and shall be in full force and effect." 12. It is the validity of the aforesaid Amendment Act that has been questioned by the petitioner, a non-governmental organization, in the present writ petition. To complete the narration of fac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as the effect of being a part of the Act itself under Section 42 stands obliterated by the State amendment. Not only the scheme under the Principal/Central Act for acquisition of land for companies is violated, even the purpose of the acquisition which may not have been envisaged at the stage of compliance with Sections 39, 40 and 41 of the Act stands altered by the State amendment. Under the Principal Act it was not permissible to modify/alter any terms of the statutory agreement under Section 41. The amended provisions which permit such modification/alteration are therefore clearly repugnant to the Principal Act. In the process not only a scheme which is in direct conflict with the existing scheme under Part VII is introduced, but the coercive machinery of land acquisition is permitted to be brought into force beyond what was contemplated under the Principal/Central Act. In this regard it is specifically pointed out that Section 41 (6) permits construction contrary to the conditions of the statutory agreement; similarly Section 41 (7) permits modification of the agreement that too retrospectively whereas Section 41 (8) deletes the clause prohibiting the company from constructing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... construction of the hotel is consistent with what has been recorded by this Court in the earlier judgment, namely, that the acquisition is for the purposes contemplated by Section 40 (1) (aa) of the principal Act. In such a situation the amendment only removes the embargo on construction by deleting Clause 4 (viii); in fact it really facilitates construction for purpose of the hotel. 20. Alternatively, it is urged that for the purpose of Article 254 of the Constitution the repugnancy between State and the Central Law must be in respect of "Law" enacted by the State Legislature and the Parliament. A subordinate legislation or an agreement, which by a legal fiction is given the effect of law (e.g. under Section 42 of the Act), does not come within the scope of Article 254. It is further urged that the language of Section 42 makes it clear that it is only the terms of an agreement under Section 41 which deals with the rights of the public to use the work, which is deemed to be a part of the Act. The object behind Section 42, it is contended, is to make such part of the agreement which pertains to the user of the work by the public enforceable in law. In this regard the findings re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iples on which first question would require to be answered are not in doubt. The power to invalidate a legislative or executive act lies with the Court. A judicial pronouncement, either declaratory or conferring rights on the citizens cannot be set at naught by a subsequent legislative act for that would amount to an encroachment on the judicial powers. However, the legislature would be competent to pass an amending or a validating act, if deemed fit, with retrospective effect removing the basis of the decision of the Court. Even in such a situation the courts may not approve a retrospective deprivation of accrued rights arising from a judgment by means of a subsequent legislation [Madan Mohan Pathak and Another vs. Union of India and Others[(1978) 2 SCC 50]]. However, where the Court's judgment is purely declaratory, the courts will lean in support of the legislative power to remove the basis of a Court judgment even retrospectively, paving the way for a restoration of the status quo ante. Though the consequence may appear to be an exercise to overcome the judicial pronouncement it is so only at first blush; a closer scrutiny would confer legitimacy on such an exercise as the same....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a court of law, what the legislature is required to do is first to remove the very basis of invalidity and then validate the executive action. In order to validate an executive action or any provision of a statute, it is not sufficient for the legislature to declare that a judicial pronouncement given by a court of law would not be binding, as the legislature does not possess that power. A decision of a court of law has a binding effect unless the very basis upon which it is given is so altered that the said decision would not have been given in the changed circumstances. 27. Here, the question before us is, whether the impugned Act has passed the test of constitutionality by serving to remove the very basis upon which the decision of the High Court in the writ petition was based. This question gives rise to further two questions - first, what was the basis of the earlier decision; and second, what, if any, may be said to be the removal of that basis? 28. In the earlier decision of the High Court, it was found that licence to construct the building up to 80 feet was repugnant to the Zonal Regulations framed under Section 13 of the Planning Act which provided a maximum height....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the agreement to vary/amend the terms and conditions thereof. In such a situation the State Amendment bringing into operation Sub-sections (6) to (9) of Section 41, whereby the bar to raising of construction or illegal constructions raised (on account of the bar) has been invalidated in the manner indicated therein, is repugnant to the provisions of Section 41 and the terms of the agreement which are deemed to be a part of the Act under Section 42. 27. In M. Karunanidhi vs. Union of India[(1979) 3 SCC431] and Kanaka Gruha Nirmana Sahakara Sangha vs. Narayanamma (Smt) (since deceased) by Lrs. and Others[(2003) 1 SCC 228] it was held that for repugnancy to arise the following conditions must be satisfied: (a) There is clear and direct inconsistency between Central and State Act. (b) Such inconsistency is absolutely irreconcilable. (c) Inconsistency is of the nature as to bring the two Acts into direct collision with each other and a situation is reached where it is impossible to obey the one without disobeying the other. 28. We do not see how repugnancy between the two legislative exercises on the principles laid down in M. Karunanidhi (supra) and K....