REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL  APPEAL NO. 137 OF 2003

Ramji Veerji Patel & Ors. …. Appellants

Versus

Revenue Divisional Officer & Ors.          ….Respondents

JUDGMENT

R.M. Lodha, J.  

The  appellants  were  unsuccessful  in  challenging  the  

acquisition  of  their  land  before  the  Single  Judge  as  well  as  the  

Division Bench of the Madras High Court. They are in appeal, by  

special leave.  

2. On  the  requisition  of  Cholan  Roadways  Corporation  

Limited,  Kumbakonam  (for  short,  ‘the  Corporation’)  for  making  

available  land  for  expansion  of  their  depot,  particularly  for  a  1

workshop, at Chidambaram, the State Government of Tamil Nadu (for  

short, ‘the Government’) issued a notification under Section 4(1) of  

the  Land  Acquisition  Act,  1894  (for  short,  ‘the  Act’)  which  was  

published  in  the  Gazette  on  March  3,  1989  notifying  for  general  

information  that  the  land  mentioned  therein,  namely,  land  

admeasuring  1.45  acres  comprised  in  T.S.  No.  14,  classified  as  

government wet land in Chidambaram Municipal Town, South Arcot  

District was needed for  the above public purpose. The notification  

under  Section 4(1)  was  also published in  the two newspapers  on  

November  18,  1988  and  in  the  locality  on  March  27,  1989.  The  

appellants  filed  objections  to  the  acquisition  before  the  Revenue  

Divisional  Officer  (for  short,  ‘RDO’),  Chidambaram.  The  diverse  

objections  to  the  acquisition  were  raised;  one  of  such  objections  

being  that  the  other  lands  behind  the  existing  depot  of  the  

Corporation were available and could be used for  the purpose for  

which their land was sought to be acquired. They stated that their  

family was dependant upon the income from the saw mill existing on  

the land and by compulsory acquisition of their land, they would be  

deprived of the sole means of livelihood.

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3. The RDO considered the objections put forth on behalf of  

the  appellants  and  submitted  his  report  to  the  Government  on  

conclusion of the enquiry under Section 5-A of the Act.

4. It  appears that  when the report of  the RDO was under  

consideration,  the  appellants  sent  a  representation  to  the  

Government bringing to its notice that the land belonging to Tamil  

Nadu Evengelical Lutheran Church (‘TELC’) just behind the existing  

depot  has  been  advertised  for  sale  and,  therefore,  instead  of  

resorting to the compulsory acquisition of  the appellants’  land, the  

land of TELC may be acquired.

5. The Government was not persuaded by the appellants’  

objections and the declaration under Section 6 of the Act was issued  

which  was  published  in  the  Gazette  on  March  21,  1990.  The  

publication of the Section 6 declaration was  made by other modes as  

well.

6. The appellants challenged the notification under Section  

4(1) and declaration under Section 6 of the Act in the writ  petition  

before  the  Madras  High  Court.  In  opposition  to  the  writ  petition,  

counter affidavit was filed on behalf of the Government. The learned  

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Single Judge of the High Court dismissed the writ petition by his order  

dated November 18, 1998.

7. Against  the  order  of  the  Single  Judge,  the  appellants  

preferred  intra-court  appeal  which  has  been  dismissed  by  the  

impugned order on July 25, 2001.

8. Mr.  Pallav  Shishodia,  learned  senior  counsel  for  the  

appellants raised two-fold contention. His first contention was that the  

appellants’ objections about the availability of land belonging to TELC  

which is situated behind the existing depot of the Corporation and  

was available for sale were not rationally considered by the RDO and  

the  Government.  He  submitted  that  the  livelihood  of  about  40  

members  of  the  family  was  directly  affected  by  the  compulsory  

acquisition of their land and, therefore, the objections ought to have  

been considered in a reasonable manner more so since the public  

purpose for  which the appellants’  land was sought to be acquired  

could have been easily met by the acquisition of the TELC’s land. In  

this regard, he referred to three decisions of this Court, namely, (i)  

Delhi Administration v. Gurdip Singh Uban and Others1, (ii) Hindustan  

Petroleum Corpn. Ltd.  v.  Darius Shapur Chenai and others2 and (iii)  

1 (2000) 7 SCC 296 2  (2005) 7 SCC 627

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Radhy  Shyam (Dead)  Through  LRs.  and  others  v. State  of  Uttar   

Pradesh and Others3.

9. The second contention of the learned senior counsel for  

the appellants was that the acquisition of the appellants’ land by the  

Government  was  for  the  purposes  of  the  Corporation  and  the  

Corporation  being  a  ‘company’  for  the  purposes  of  the  Act,  the  

procedure contemplated in  Part  VII  of  the Act  was  required to be  

mandatorily  followed  and  since  the  said  procedure  has  not  been  

followed,  the  acquisition  is  bad  in  law.  In  this  regard,  Mr.  Pallav  

Shishodia placed reliance upon a decision of this Court in  State of   

Punjab and Others v. Raja Ram and others4.

10. On the other hand, Mr. B. Balaji, learned counsel for the  

State of Tamil Nadu supported the view taken by the Single Judge  

and the  Division  Bench of  the  High  Court.  He  submitted  that  the  

proceedings for acquisition of the appellants’ land have been initiated  

and concluded in accordance with the procedure prescribed in the  

Act. There is no illegality in the acquisition of the appellants’ land. He  

referred to the counter  affidavit  filed on behalf  of  the Government  

before the High Court in opposition to the writ petition.

3  (2011) 5 SCC 553 4  (1981) 2 SCC 66

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11. The Act was enacted in 1894 for the acquisition of land  

needed for public purposes and for companies and for determining  

the amount of compensation to be made on such acquisition. The Act  

has undergone some amendments in 1919, 1921, 1923, 1933, 1962,  

1967  and  1984;  the  last  major  amendments  being  by  the  Land  

Acquisition (Amendment) Act, 1984 (Act 68 of 1984).

12. The provisions contained in the Act, of late, have been felt  

by all concerned, do not adequately protect the interest of the land  

owners/persons interested in the land. The Act does not provide for  

rehabilitation of persons displaced from their land although by such  

compulsory acquisition, their livelihood gets affected. For years, the  

acquired land remains unused and unutilised. To say the least, the  

Act has become outdated and needs to be replaced at the earliest by  

fair, reasonable and rational enactment in tune with the constitutional  

provisions, particularly,  Article 300A of the Constitution. We expect  

the law making process for a comprehensive enactment with regard  

to  acquisition  of  land  being  completed  without  any  unnecessary  

delay.

13. Reverting  back to  the  Act,  that  Section  5-A of  the  Act  

confers a valuable right on the person interested in any land which  

has been notified under Section 4(1) as being needed for a public  6

purpose or likely to be needed for public purpose is beyond doubt. By  

this right, the owner/person interested may put forth his objections not  

only  in  respect  of  public  purpose  but  also  the  suitability  of  the  

acquisition in respect of his land. The objector gets an opportunity  

under  Section  5-A  to  persuade  the  Collector  that  his  land  is  not  

suitable for the purpose for which the acquisition is being made or the  

availability  of  other  land  suitable  for  that  purpose.  Section  5-A  

proceedings are two-tier proceedings. In the first step, the objections  

by  the  owner/person  interested  are  heard  by  the  Collector  and  a  

report is submitted to the Government. In the second step, the final  

decision is taken by the Government on the objections so furnished  

by the person interested and the consideration of the report submitted  

by the Collector.  

14. In  Munshi  Singh  and  others v.  Union  of  India5,  in  

paragraph 7 of the Report, this Court stated as follows :

“7.  Section  5-A  embodies  a  very  just  and  wholesome  principle  that  a  person  whose  property  is  being  or  is  intended  to  be  acquired  should  have  a  proper  and  reasonable  opportunity  of  persuading  the  authorities  concerned  that  acquisition  of  the  property  belonging  to  that person should not be made. … The legislature has,  therefore,  made  complete  provisions  for  the  persons  interested  to  file  objections  against  the  proposed  acquisition and for  the disposal  of  their  objections.  It  is  only in cases of urgency that special powers have been  

5  (1973) 2 SCC 337 7

conferred  on  the  appropriate  Government  to  dispense  with the provisions of Section 5-A: ”

15. The above legal position has been reiterated by this Court  

in various decisions including the decisions of this Court in Hindustan  

Petroleum  Corpn.  Ltd.2 and  Radhy  Shyam3  cited  by  Mr.  Pallav  

Shishodia.  In  Hindustan  Petroleum  Corpn.  Ltd.2  ,  this  Court  in  

paragaraph 6 of the Report stated thus :

“6. It is not in dispute that Section 5-A of the Act confers a  valuable right in favour of a person whose lands are sought  to be acquired. Having regard to the provisions contained  in Article 300-A of the Constitution, the State in exercise of  its power of “eminent domain” may interfere with the right  of property of a person by acquiring the same but the same  must be for a public purpose and reasonable compensation  therefor must be paid.”

16. In  Union of India v. Mukesh Hans6, this Court  referred to  

Munshi  Singh5  and in  paragraph 35  of  the  Report  stated  that  the  

limited right given to the owner/person interested under Section 5-A  

of the Act to object to the acquisition proceedings is not an empty  

formality and is a substantive right.   

17. As a matter of law, under the Act, the only right that the  

owner/person  interested  has,  is  to  submit  objections  to  the  

compulsory acquisition of his land under Section 5-A. No question,  

such  right  and  the  consideration  of  objections  filed  by  the  land-

6 (2004) 8 SCC 14 8

owner/person interested in exercise of such right must be given the  

importance  it  deserves.  The  question  before  us,  is  whether  the  

consideration of  the appellants’ objections  to the acquisition of their  

land  by the Government suffers from any illegality or irrationality.  

18. The appellants and their family members purchased the  

subject land admeasuring 1.45 acres on January 27, 1981. The said  

land was agricultural at the time of purchase and was depressed in  

as much as it was low in level than the main road. The appellants  

incurred  expenditure  in  raising  the  level  of  the  land  and  made  

improvements; raised the building thereon and installed a saw mill  

somewhere in 1986.   In their objections filed on May 24, 1989 before  

the  RDO, the facts concerning the expenditure incurred by them for  

converting the agricultural land into building site; the deprivation of  

their sole means of livelihood and the availability of other  lands were  

stated.   The  objectors  also  stated  that  the  workshop  of  Thanthai  

Periyar  Transport  Corporation  was  originally  put  up  in  Anna  

Kalayarangam  land  owned  by  the  Municipality.   Later,   they  had  

purchased four acres of land comprised in T.S. Nos. 133 and 151 at  

Lal Puram main road, and constructed a workshop and that workshop  

was  functioning.  The  Corporation,  the  objectors  submitted,   can  

acquire any extent of land next to them to construct a workshop.

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19. The RDO considered the above objections raised by the  

appellants  and  in  the proceedings drawn  on  September  14,  1989  

overruled  the  same.  The  RDO  held  that  when  the  requisitioning  

authority approached TELC  for making available their land, the TELC  

refused to sell the said land and informed them that they required  

their land for their religious purposes.  The RDO, in this backdrop,  

observed that TELC’s  land cannot be acquired for the purpose of  

expansion of depot. As regards the availability of lands near Thanthai  

Periyar Transport Corporation, the RDO observed that these lands  

were one kilometre away from the Corporation’s depot and, thus,  the  

land of the appellants alone was suitable for the expansion of depot.  

The RDO, accordingly, forwarded its report to the  Government.

20. On October 26, 1989, TELC issued a public notice in a  

daily newspaper ‘Dina Malhar’ for sale of its land referred to above.  

The appellants sent the copy of the said notice to the  Government.  

However,  the   Government   was  not  persuaded  to  accept  the  

landowners’  objections  and  on  consideration  of  the  RDO’s  report  

proceeded  with  the  issuance  and  publication  of  declaration  under  

Section 6 of the Act.  

21. Mr.  Pallav  Shishodia,  learned  senior  counsel  for  the  

appellants  vehemently  contended  that  the  land  belonging  to  the  10

TELC is  suitable as that  land is  situated just   behind the existing  

depot;  the existing depot has already access to the main road from  

Chidambaram to Cuddalore and on  acquisition of the land of TELC,  

the acquired land too would have access to the main road through  

the  existing  depot  of  the  Corporation.   He,  thus,  submitted  that  

suitability  aspect  has  not  at  all  been  rationally  considered  by  the  

Government.  

22. It is difficult to accept the contention of the  learned senior  

counsel for more than one reason. In the first place, in paragraph 5 of  

the counter affidavit filed by the Government before the High Court,  

inter alia, following averment was made:

“…….The  land  acquired  exists  adjacent  to  the  existing  depot  and  it  has  easy  access  to  the  main  road  from  Chidambaram  to  Cuddalore  and  it  is  found  to  be  more  suitable  in  all  aspects  for  the  expansion  of  the  depot……….”

The above averment  remains unrebutted and unchallenged by the  

appellants as no rejoinder was filed.  

23. Secondly,   if  the land proposed to be acquired and the  

alternative  land  suggested  by  the  owners/persons  interested   are  

equally suitable for the purpose for which land is being acquired, the  

satisfaction of the Government, if  not actuated with ulterior motive,  

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must get primacy.  In the judicial review, it is not open to the court to  

examine the aspect of suitability as a court of appeal and substitute  

its opinion.  In any case the present case is not a case where  the  

other  lands  suggested  by  the  appellants  have  been  found  to  be  

equally suitable. The Government has given reasons as to why the  

appellants’ land has been  found to be more suitable for expansion of  

the depot.  The appellants’  land is adjacent to the existing depot   of  

the Corporation having  easy access to the main road. In our view,  

the manner in which the decision has been taken by the  Government  

regarding suitability of the appellants’ land for expansion of the depot  

of the Corporation is not vitiated by any error of law nor it is irrational  

or  founded on the extraneous reasons.

24. Third  and  more   important,   at  the   insistence  of  the  

learned senior  counsel  for  the appellants,  we  considered the site  

plan referred to by him and from a perusal thereof no doubt is left that  

the  land of the appellants is more  suitable than the land of TELC  

situate behind the existing depot. TELC land has no direct access  

from the Chidambaram to Cuddalore main road. It has access from a  

different  side road passing adjacent  to  the canal.  The size of  the  

TELC’s land is also awkward;  it is a long piece of land of which width  

narrows down from 175 feet to 56 feet west to east. On the other  

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hand, the appellants’  land is adjacent  on the southern side to the  

existing depot and has access from the Chidambaram to Cuddalore  

main road. Having regard to the purpose for which the land is sought  

to be acquired, namely, expansion of existing depot, particularly, for a  

workshop, the appellants’ land is definitely more suitable.  Pertinently,  

in  their  objections,  the  appellants  have  not  challenged  the  public  

purpose for  the acquisition of their land.  In what we have  indicated  

above,  it  cannot  be  said  that  suitability   aspect  has  not  been  

reasonably or rationally considered by the  Government.           

25. Then  comes  the  second  contention  of  Mr.  Pallav  

Shishodia.   He relied upon  the decision of this Court in the case of   

Raja  Ram4    and  submitted  that  the  erstwhile  Corporation  or  the  

successor  Tamil  Nadu State Transport  Corporation (TNSTC)  is  a  

‘government company’ for the purposes of the Act  and, therefore,  

compliance with the provisions of Part VII of the Act had to be made  

in order to lawfully acquire any land for its purpose. In this regard, he  

referred to the averment made in the reply to I.A. No. 3 of 2003 that  

TNSTC was the beneficiary of the acquisition;  it  is  they who have  

remitted  the  extent  of  compensation  quantified  by  the  authorities  

under the land acquisition.

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26. With  regard  to  the  above  contention  of  Mr.  Pallav  

Shishodia, it  is enough to say that it  overlooks  Section 3(cc) and  

Section 3(e) of the Act, substituted by Act 68 of 1984. The definition  

of ‘company’ in Section 3(e) after substitution in 1984 is as follows:  

“S.3(e).-    the expression “company” means—

(i) a  company  as  defined  in  section  3  of  the  Companies Act, 1956 (1 of 1956), other than a  Government company referred to in clause (cc);

(ii) A  society  registered  under  the  Societies  Registration Act,  1860 (21 of  1860),  or under  any  corresponding  law  for  the  time  being  in  force in a State, other than a society referred to  in clause (cc);                 

(iii) A  co-operative  society  within  the  meaning  of  any law relating to co-operative societies for the  time being in force in any State, other than a  co-operative society referred to in clause (cc)”.

Section 3(cc) of the Act defines the expression “corporation owned or  

controlled by the State” as follows :

“S.3(cc).-     the  expression  “corporation  owned  or  controlled  by  the  State”  means  any  body  corporate  established by or under a Central, Provincial or State Act,  and includes a Government company as defined in section  617  of  the  Companies  Act,  1956 (1  of  1956),  a  society  registered under the Societies Registration Act, 1860 (21 of  1860), or under any corresponding law for the time being in  force  in  a  State,  being  a  society  established  or  administered  by  Government  and  a  co-operative  society  

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within  the  meaning  of  any  law  relating  to  co-operative  societies for the time being in force in any State, being a  co-operative  society  in  which  not  less  than  fifty-one  per  centum of the paid-up share capital is held by the Central  Government, or by any State Government or Governments  or partly by the Central Government and partly by one or  more State Governments;”

27. That Corporation and the TNSTC fall within the definition  

of Section 3(cc) is not in dispute. Both may not have been divested of  

their  character  as  a  government  company  but  sub-clause  (i)   of  

Section 3(e)  excludes a government company from the definition of  

company.    Part  VII  (Sections 38 to  44B)  of  the Act  provides for  

acquisition  of  land  for  companies.  In  view of  the  definition  of  the  

‘company’ in Section 3(e) which excludes government company,  the  

Corporation  or  for  that  matter  its  successor  TNSTC does  not  fall  

within the definition of the ‘company’ and, therefore, is not covered by  

Part VII of the Act at all.

28. In Raja Ram4,  the definition of ‘company’ in Section 3 (e)  

of the Act prior to its substitution fell for consideration.  The definition  

of ‘company’ under consideration  read as follows :

“the expression “company”  means  a company registered  under  the  Indian  Companies  Act,  1890  or  under  the  (English) Companies Acts, 1862 to 1882 or incorporated by  an Act of Parliament of the United Kingdom or by an Indian  law, or by Royal Charter or Letters Patent and includes a  society  registered  under  the  Societies  Registration  Act,  1860,  an a registered  society  within  the meaning  of  the  Cooperative Societies Act, 1912, or any other law relating  

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to cooperative societies for the time being in force in any  State.”  

29. It was in the context of the above definition that  this Court  

held in Raj Ram4  that the Food Corporation of India was not divested  

of  its  character  as  a  company within  the  meaning  of  definition  of  

clause (e) of Section 3 of the Act.  As noticed above,  the definition of  

‘company’  has undergone  complete change and the  government  

company  has  been  expressly  excluded  from  the  expression  

‘company’ for the purposes of the Act.   

30. For the above reasons, it has to be held that Part VII of  

the Act has no application to the present case  as the acquisition of  

land is not  for a ‘company’ as defined in Section 3(e).

31. Mr. Pallav Shishodia, learned senior counsel also  urged  

that the appellants are migrants from Gujarat.   They have settled in  

Chidambaram about thirty years back and the livelihood of the entire  

family of the appellants which comprised of about  40 members is  

dependant  on the saw mill  existing on the  subject  land.   Having  

regard to these facts, he would submit that we invoke  our jurisdiction  

under Article 142 of the Constitution and declare the acquisition of the  

appellants’ land bad in law to do complete justice.    There is no doubt  

that  by  compulsory  acquisition  of  their  land,   the  appellants  have  

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been put to hardship.  As a matter of fact, the RDO was alive to this  

problem.  In  his  report  dated  September  14,  1989,  the  RDO  did  

observe that the land owners have spent considerable money to raise  

the level of the land for constructing compound wall and running saw  

mill. He was, however, of the opinion  that the appellants’ land was  

very  suitable  for  the  expansion  of  the  depot  and  the  suitable  

compensation can be  paid to the land-owners  to enable them to  

purchase an alternative land. The appellants, however, proceeded to  

challenge the acquisition. The litigation has traversed upto this Court  

and taken about 22 years.  The public purpose has been stalled for  

more than two decades.  Being the Highest Court, an extraordinary  

power has been conferred on this Court under Article 142 to pass any  

decree,  order  or  direction  in  the  matter  to  do  complete  justice  

between the parties. The power  is plenary in nature and not inhibited  

by constraints or limitations.  However, the power under Article 142 is  

not  exercised  routinely.   It  is  rather  exercised  sparingly  and  very  

rarely.   In the name of justice to the appellants, under Article 142,  

nothing  should  be  done  that  would  result  in  frustrating  the  

acquisition of land which has been completed long back by following  

the procedure under the Act and after giving full opportunity to the  

appellants  under Section 5-A.   The possession of the land has also  

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been taken  as far  back as  on July 25, 2001. The appellants made  

an application (I.A. No. 2 of 2002) for direction to the respondents not  

to interfere with the functioning of the saw mill and permit them to use  

the saw mill but  this Court in its order dated May 8, 2002 only said  

that  the  saw  mill  shall  not  be  demolished  till  further  orders.  No  

permission was granted to the appellants to use the saw mill. In other  

words,  for  more  than  ten   years  the  saw  mill  is  closed  after  

possession was taken over from the appellants. In the circumstances,  

this is not a  case fit  for exercise of power under Article 142 and  

declare  the  acquisition  of  the  appellants’  land  bad  although  the  

acquisition  proceedings  have  been  completed  in  accordance  with  

law.

32. Lastly, the learned senior counsel invited our attention to  

the  application  (I.A.  No.  4)  wherein  the  appellants  offered  for  

amicable settlement by expressing their readiness and willingness to  

give an area of land admeasuring 13250 square feet out of the total   

land of 1.45 acres (i.e. 1 acre and 19445 sq. ft.) free of cost to the  

Corporation. The offer is not acceptable to Mr. B. Balaji. He submitted  

that  such a  small  area is  of  no use for  expansion of  the existing  

depot. We do not find any unreasonableness in the submission  of  

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the counsel  that an area of 13250 square feet would not meet the  

purpose for which the appellants’ land has been acquired.

33. In view of the above, there is no merit in the appeal and it  

is dismissed. I.A. No. 4 and  other pending applications, if any,  stand  

disposed of. No costs.   

………………………J (R.M. LODHA)   

               ….…………………………….J.        (JAGDISH SINGH KHEHAR )

NEW DELHI NOVEMBER 2, 2011.                         

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