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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APELLATE JURISDICTION

CIVIL APPEAL NOS. 736-737 OF 2008

THE CHAIRMAN & MANAGING DIRECTOR, TNHB & ANR   .. APPELLANTS

VERSUS

S. SARASWATHY & ORS.   ..  RESPONDENTS

WITH

C.A. Nos. 745-746, C.A. Nos. 741-742, C.A.  Nos. 553-554, C.A. Nos. 747-748, C.A. Nos.  555-556, C.A. Nos. 706-707, C.A. Nos.  709-710, C.A. Nos. 828-829, C.A. Nos.  833-834, C.A. Nos. 743-744, C.A. Nos.  739-740 and C.A. No. 712 of 2008

J U D G M E N T  

VIKRAMAJIT SEN, J.

1.   The Appellant, Tamil Nadu Housing Board, is taking exception to the

Judgment dated 07.04.2006 passed by the High Court in the Writ Appeal Nos.

603 to 615 of 1997 and the Judgment dated 27.09.2006 passed in the Review

Application Nos. 108 to 120 of 2006 in the Writ Appeal Nos. 603 to 615 of

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1997, whereby the High Court had directed the Appellant Government/State to

issue No Objection Certificates to the contesting Respondents before us.

2.   The Government of Tamil Nadu initiated land acquisition proceedings

on behalf of the Tamil Nadu Housing Board to acquire 513.52 acres of land

including  the  land  in  question,  in  and  around  Chennai,  under  the  Land

Acquisition  Act,  1894  (hereinafter  ‘the  Act’)  for  the  purpose  of  Ambattur

Neighborhood Housing Scheme. Notification under Section 4 of the Act was

issued  on  23.10.1975  and  published  on  12.11.1975,  followed  by  the

Declaration under Section 6 of the Act issued and published on 09.11.1978 and

10.11.1978 respectively. The land in question in the present Appeals, in all 1

acre and 10 cents, owned originally by V. Perumal, forms part of Survey Nos.

271/1 and 271/5 of the village Mogappair. The total area of the land falling

under the said Survey No. 271 is 4 acres and 10 cents: the said 1 acre and 10

cents owned by V. Perumal and another 3 acres owned by A. J. Ponnial and A.

S. Naidu. The aforementioned three persons had obtained an approved layout

plan from the Director of Town Planning on 07.03.1975 with respect to the

said Survey No. 271.  

3.   When the Notifications for acquisition came to be passed, two batches of

writ petitions were filed before the High Court; the first batch consisted of W.P.

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No. 7625 of 1982 filed by P. Velu, son of V. Perumal, while the second batch

included W.P. Nos. 7499 and 8328 of 1983 filed by A. S. Naidu. The former

batch assailed the Constitutional validity of Sections 11(1) and 23(1) of the Act

and contended that the compensation determined as on the date of publication

of a notification under Section 4 of the Act was inequitable and arbitrary. The

second batch laid an assault  to the Notifications published under the Act in

their entirety. It should be noted immediately that the statute has subsequently

been amended to mandate that an Award has to be passed within two/three

years, thereby substantially addressing the grievance of compensation being a

pittance owing to it being calculated after several years of the Notification.

4.   In  the  batch  matter  concerning  A.  S.  Naidu,  the  parties  fought  a

strenuous battle which resulted in a lengthy discourse and an elaborate order of

the High Court. The writ petitioners therein averred that the remarks, which

were  offered  by  the  requisitioning  body,  i.e.  the  Housing  Board,  upon

furnishing to it the Objections of the landowners, had not been communicated

to the latter. Such remarks along with the Objections of the landowners formed

the basis for enquiry under Section 5A of the Act; ergo, knowledge of those

remarks  or  contentions  of  the  requisitioning  body  were  crucial  for  the

landowners to sustain their objections. This contention of the writ petitioners

that Rule 3(b) of the Tamil Nadu Land Acquisition Rules has been infracted

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because of non-furnishing of the said remarks to the landowners found favour

with  the  High Court.   The  High Court  reasoned  that  the  furnishing of  the

remarks  to  the  landowners  was  not  just  another  formality  or  discretionary

procedure  to  be  waived  of  at  the  whims  of  the  Authorities;  and  their

non-communication had the effect of “setting at naught the very purpose of the

enquiry”.  Another  contributory  factor  buttressing  the  case  of  the  writ

petitioners was that the Declaration under Section 6 was not in conformity with

the proviso of Section 6(1) of the Act,  which prescribes that where land is

being acquired for the benefits of a Local Authority, a part of the compensation

payable for the acquisition shall have to be borne from the fund controlled or

managed  by  the  concerned  Local  Authority.  Since  the  Tamil  Nadu  State

Housing Board, i.e. the beneficiary of the subject acquisition proceedings, was

held by the High Court to be such a Local Authority and the Declaration under

Section 6 specifically provided that the entire compensation was to be paid out

of  public  revenue  without  any  portion  from  the  fund  maintained  by  the

Housing Board, it was plain that the Declaration under Section 6 of the Act

was not in accordance with the proviso of Section 6(1) of the Act. On these

two counts thus, the Writ Petition of A. S. Naidu along with some of the other

parties was partly allowed by the High Court by granting the relief of quashing

of the said Declaration vide Order dated 08.01.1988. The Court, however, left

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the Notification issued under Section 4 of the Act intact, and it declined relief

to those writ petitioners, who acquired ownership of the land under acquisition

after the issuance of the Notification under Section 4 of the Act.  

5.   A. S. Naidu, thereafter, approached this Court in SLP Nos. 11353-55 of

1988 (A. S. Naidu.  v. State of Tamil Nadu), challenging the Judgment dated

08.01.1988,  to  the  extent  the  High  Court  refused  to  interfere  with  the

Notification issued under Section 4 of the Act. However, the State accepted the

decision of the High Court and initiated fresh enquiry proceedings including

rehearing  of  the  objections  preferred  under  Section  5A.  When  the  matter

reached this Court, it opined that the three year limitation period to publish a

fresh Declaration under Section 6 of the Act, as amended by the Act 68 of

1984, had already lapsed, especially in view of non-assailment of the Judgment

dated 08.01.1988 by the State,  and held it  to have attained finality. In  this

backdrop, this Court observed vide Order dated 21.08.1990 that:

“4.  On the date the declaration was made there were hardly two days left for completion of three years and after the High Court order  on  8-1-1988,  the  period  has  already  lapsed  but  no declaration has been published and the same can no longer be made on the basis of preliminary notification at present.  In the absence of challenge by the State, the order of the High Court against it has become final.   

5.  We are of the view that in these circumstances it would no more be available to the State to make the requisite declaration under Section 6 of the Act. The acquisition itself is quashed but

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we make it clear that it is open to the State Government in case it is  satisfied that acquisition is necessary in public interest,  it  is free to exercise its power of eminent domain and make a fresh preliminary notification. The special leave petitions are disposed of accordingly.”  

6.  Meanwhile certain developments occurred, having crucial bearing on the

present matter.  The State passed Award No. 9 of 1983 on 20.06.1983 with

respect to 22.91 acres of land, which included the suit land as well as the land

of A. S. Naidu. Pursuant to that Award, P. Velu, son of V. Perumal, received the

compensation of Rs. 26615 and the possession of the land was taken without

opposition, by the State on 01.07.1983. Despite the acquisition of the suit land

having been completed in all respects thereto, P. Velu illegally divided the suit

land  into  twelve  plots  and  sold  them  in  the  year  1987  to  the  contesting

Respondents before us vide registered Sale Deeds, after over three years of

vesting of land into the State. The Respondents are educated, some of them are

even  Advocates  and  would  be  expected  to  have  made  a  title  search.

Subsequent to the passing of the Judgment dated 08.01.1988 by the High Court

and the Order dated 21.08.1990 by this Court, the second batch of Writ Petition

of P. Velu proved futile and eventually came to be rejected by the High Court

on 22.07.1994, both on the grounds of merits and delay. At this juncture, it

merits a mentioning that the batch of writ petitions including that of P. Velu

was principally concerned with the issue of fair determination of compensation

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at market value of the property on the date of passing of the Award, instead of

taking the date of issuance of notification under Section 4 of the Act as the

pivotal point. No appeal arose from the dismissal of these writ petitions, thus

rendering finality to the acquisition proceedings qua the writ petitioners in that

batch.

7.  In 1996, the contesting Respondents before us, who are the vendees of P.

Velu, filed another batch of writ petitions seeking protection of their possession

and enjoyment over the suit land, and direction to the respondents therein to

issue them No Objection Certificates to enable them to put up constructions on

the suit land. There is no denial and rebuttal by them that they had bought the

suit land from P. Velu after the Award had been passed. Nonetheless, they put

forth their case before the High Court premised entirely on the cornerstone of

the Order dated 21.08.1990 passed by this Court in  A. S. Naidu, which they

contended had the effect of quashing the acquisition proceedings in toto. They

further maintained that A. S. Naidu, allegedly a co-owner with P. Velu of the

land property in Survey No. 271, was authorized by P. Velu to take all  the

necessary steps to get approvals for the planned layout as well as to initiate

subsequent proceedings in order to protect their common interest in the Survey

No. 271. The Single Judge of the High Court vide common Judgment dated

19.02.1997 allowed the Writ Petitions of the Respondents, believing that this

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Court had quashed the acquisition proceedings in totality; and it also followed

some earlier order of the High Court. The Division Bench while dismissing the

Appeals preferred by the Appellant vide common impugned Judgment dated

07.04.2006 was of the opinion that the original owner of the suit land and the

vendor  of  the  Respondents  was  A.  S.  Naidu.  When  this  factual  error  was

brought  to  its  notice  in  the  Review Applications,  the  Division  Bench  then

reiterated the observations of the Single Judge that this Court had quashed the

entire acquisition proceedings as far back in 1990, and since no proceedings

had been initiated thereafter, the question of who the original owner was made

no material difference. It thus affirmed the order and direction of the Single

Judge  and  dismissed  the  Review  Applications  vide  common  impugned

Judgment dated 27.09.2006.

8.    The Respondents  contend that  even if  the benefits  of  the Order  dated

21.08.1990 passed by this Court in A. S. Naidu is confined only to the parties

to  those  proceedings  before  this  Court,  they  may  nevertheless  submit  that

acquisition in respect of the entire Survey No. 271 had been challenged by A.S.

Naidu, for himself and also on behalf of P. Velu and the view taken by this

Court should enure to their benefit.

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9.   We will  first  consider  what  implication  the  Order  dated  21.08.1990

passed by this  Court  has  on the  case  in  hand.  The High Court  was  of  the

opinion that the Order dated 21.08.1990 had an all-encompassing import and it

annulled the entire acquisition proceedings. In that respect, we can gainfully

extract from the Order passed by a three-Judge Bench of this Court in Abhey

Ram v. Union of India, (1997) 5 SCC 421:

“10. The  question  then  arises  is  whether  the  quashing  of  the declaration by the Division Bench in respect of the other matters would enure the benefit  to  the appellants  also.  Though,  prima facie, the argument of the learned counsel is attractive, on deeper consideration, it is difficult to give acceptance to the contention of Mr Sachar. When the Division Bench expressly limited the controversy  to  the  quashing  of  the  declaration  qua  the  writ petitioners before the Bench, necessary consequences would be that  the  declaration  published  under  Section  6  should  stand upheld.

11.  It  is  seen  that  before  the  Division  Bench  judgment  was rendered, the petition of the appellants stood dismissed and the appellants had filed the special leave petition in this Court. If it were a case entirely relating to Section 6 declaration as has been quashed  by  the  High  Court,  necessarily  that  would  enure  the benefit  to  others  also,  though  they  did  not  file  any  petition, except to those whose lands were taken possession of and were vested in the State under Sections 16 and 17(2) of the Act free from all encumbrances.  But it is seen that the Division Bench confined the controversy to the quashing of the declaration under Section 6 in respect of the persons qua the writ petitioners before the Division Bench. Therefore, the benefit of the quashing of the declaration under Section 6 by the Division Bench does not enure to the appellants.

12.  It is true that a Bench of this Court has considered the effect of  such a  quashing  in  Delhi  Development  Authority v.  Sudan

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Singh  (1997)  5  SCC 430.  But,  unfortunately, in  that  case  the operative part of the judgment referred to earlier has not been brought to the notice of this Court. Therefore, the ratio therein has no application to the facts in this case. It is also true that in Yusufbhai Noormohmed Nendoliya v. State of Gujarat (1991) 4 SCC 531 this Court had also observed that it  would enure the benefit  to  those  petitioners.  In  view  of  the  fact  that  the notification under Section 4(1) is a composite one and equally the declaration under Section 6 is also a composite one, unless the declaration under Section 6 is quashed in toto, it does not operate as if the entire declaration requires to be quashed  .   It is seen that the appellants had not filed any objections to the notice issued under Section 5-A.” (Emphasis supplied)

10 We also have the advantage of a Judgment dated 29.01.2010 passed by a

Coordinate Bench of this Court in Civil Appeal Nos. 3148-49 of 2002, titled as

Tamil  Nadu  Housing  Board  v.  L. Chandrasekaran (2010)  2  SCC  786.

Chandrasekaran was  also  seized  of  the  acquisition  proceedings  we  are

dealing with, although involving the issue of release of land under Section 48

of the Act, but in respect of different survey numbers. The respondents therein

pressed several grounds but finally rested their claim on the basis of the Order

dated 21.08.1990 passed by this Court in the case of A.S. Naidu.  One of the

issues before this Court was to decide whether the Order passed by this Court

in A. S. Naidu had the effect of nullifying the acquisition in its fullness.  This

Court observed in Chandrasekaran that it was not possible to return a finding

that while disposing of the special leave petitions preferred by A.S. Naidu this

Court had quashed the entire acquisition proceedings.   This Court underscored

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that  A.S.  Naidu did  not  even  make  a  prayer  before  the  High  Court  for

quashing the preliminary Notification issued under Section 4 of the Act, and it

observed:  “…in the absence of  a specific  prayer having been made in  that

regard, neither the High Court nor this Court could have quashed the entire

acquisition.” The Court then took into account the cases of Shyam Nandan

Prasad v. State of  Bihar (1993) 4 SCC 255,  Abhey Ram,  Delhi Admin. v.

Gurdip Singh Uban  (1999) 7 SCC 44 and Delhi Admn. v. Gurdip Singh Uban

(2000) 7 SCC 296 and reiterated the established and consistent view of this

Court that quashing of acquisition proceedings at the instance of one or two

landowners does not have the effect of nullifying the entire acquisition.  Since

the observations contained in Chandrasekaran are apposite for our purposes,

we think it advantageous to extract the following paragraphs therefrom:

 15. The first issue which requires consideration is whether

the order passed by this Court in A.S. Naidu case has the effect of nullifying the acquisition in its entirety. In this context, it is apposite to mention that neither the appellant Board nor have the  respondents  placed  before  the  Court  copies  of  the  writ petitions in which the acquisition proceedings were challenged, order(s)  passed  by  the  High  Court  and  the  special  leave petitions which were disposed of by this Court on 21-8-1990 and without going through those documents, it is not possible to record  a  finding  that  while  disposing  of  the  special  leave petitions  preferred  by A.S.  Naidu and others,  this  Court  had quashed the entire acquisition proceedings. So far as A.S. Naidu is concerned, he did not even make a prayer before the High Court  for  quashing  the  preliminary  notification  issued  under Section 4(1) of the Act.

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16. This  is  evident from the prayer made by him in Writ Petition No. 7499 of 1983, which reads as under:

“For the reasons stated in the accompanying affidavit, it is most respectfully prayed that this Hon’ble Court may be pleased to issue a writ of certiorari or any other proceeding or any other appropriate writ or direction or order in the nature  of  a  writ  to  call  for  the  records  of  the  first respondent  relating  to  GOMs  No.  1502,  Housing  and Urban  Development  Department  dated  7-11-1978 published  in  the  Tamil  Nadu  Government  Gazette Extraordinary dated 10-11-1978 in Part II Section 2 on pp. 22  to  26  and  quash  the  said  notification  issued  under Section 6 of the Land Acquisition Act, 1894 insofar as it relates to the land in the petitioners’ layout approved by the Director  of  Town  Planning  in  LPDM/DTP/2/75  dated 7-3-1975 in Survey Nos. 254, 257, 258, 260, 268 and 271 in Mogapperi  Village,  No.  81,  Block V, Saidapet  Taluk, Chingleput District and render justice.”

From the above reproduced prayer clause, it is crystal clear that the only relief sought by Shri A.S. Naidu was for quashing the notification issued under Section 6 insofar it related to the land falling  in  Survey  Nos.  254,  257,  258,  260,  268  and  271  in Mogapperi Village, No. 81, Block V, Saidapet Taluk and in the absence of a specific prayer having been made in that regard, neither the High Court nor this Court could have quashed the entire  acquisition.  This  appears  to  be  the  reason  why  the Division  Bench  of  the  High  Court,  while  disposing  of  Writ Appeals  Nos.  676  of  1997  and  8-9  of  1998  observed  that quashing of acquisition by this Court was only in relation to the land of the petitioner of that case and, at this belated stage, we are not inclined to declare that order dated 21-8-1990 passed by this Court had the effect of nullifying the entire acquisition and that  too  by  ignoring  that  the  appellant  Board  has  already utilised  portion  of  the  acquired  land  for  housing  and  other purposes. Any such inferential conclusion will have disastrous consequences inasmuch as it will result in uprooting those who may  have  settled  in  the  flats  or  houses  constructed  by  the

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appellant  Board  or  who may have  built  their  houses  on  the allotted plots or undertaken other activities.

17. We may  also  usefully  refer  to  the  judgments  of  this Court in Shyam Nandan Prasad v. State of Bihar, Abhey Ram v. Union of India (para 11),  Delhi Admn. v.  Gurdip Singh Uban (paras 8, 9 and 11) and Delhi Admn. v. Gurdip Singh Uban, in which it has been consistently held that quashing of acquisition proceedings at the instance of one or two landowners does not have the effect of nullifying the entire acquisition. Moreover, in the  absence  of  challenge  by L.  Chandrasekaran  to  the  order passed by the Division Bench of the High Court in Writ Appeal No. 9 of 1998, his legal representatives do not have the locus to contend that the order dated 21-8-1990 passed by this Court in SLPs (C) Nos. 11353-55 of 1988 had the effect of nullifying the entire acquisition.

11 We are  respectfully  in  accord  with  the  observations  of  Coordinate

Benches that unless the Declaration under Section 6 or the Notification under

Section 4 of the Act is not explicitly quashed in toto or in its wholeness by the

Court, the benefits of relief granted by the Court would be effective only qua

the parties before it.   As already adumbrated above, at the time the Appeal of

A. S. Naidu came to be decided, the three year limitation period to publish a

declaration  under  Section  6  of  the  Act  had  already  expired,  making  it

impossible  for  the  Government  to  complete  a  fresh  process  culminating  in

another declaration; and it was for this reason that the acquisition was quashed

by the Court.

12 It  has  been  repeatedly  reiterated  by  this  Court  that  those  who  have

missed the boat in challenging the acquisition proceedings, who sat idle and

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have let the grass grow under their feet cannot, thereafter, be permitted to jump

on  the  bandwagon  of  others  who  entered  the  portals  of  the  Court  at  the

appropriate time and thereafter obtained favourable orders.   Significantly, in

Chandrasekaran the  Court  was  alive  to  the  reality  of  utilization  of  large

chunks of land by the State for housing scheme; and in this scenario, it was

obviously and rightly reluctant and facially hesitant to quash the acquisition

proceedings  in toto,  knowing that that would result in grave consequences to

society.  In  this  analysis,  the  Respondents  including  their  vendor,  P. Velu,

cannot be permitted to take any advantage of the Orders passed by this Court

in A. S. Naidu.

13   There could be cases  however, where the acquisition proceedings  are

deracinated, annulled and quashed  in toto.   Such grounds could include, to

wit:  absence  of  public  purpose;  non  publication  of  the  substance  of  the

notification under Section 4 as required, denuding the rights of the landowners;

complete  lack  of  consideration  of  the  objections  by  the  authorities,  thus

obscuring the public purpose; fraudulent or mala fide or colourable exercise of

the  power  of  eminent  domain  behind  the  smokescreen  of  public  purpose;

inherent defect or illegality in the issuance of the notification under Section 4;

acquiring  of  land  for  a  private  company  by  illegally  bypassing  the  extant

statutory procedure etc.

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14     Even if we assume that the Order passed by this Court swept away the

entire  acquisition  proceedings,  the  claim  of  the  Respondents  is  still

unsustainable.  In the Judgment dated 08.01.1988 passed by the High Court in

the case of A. S. Naidu, it has been clarified that “only those persons, who are

the owners on the date  of  Section 4(1) Notification alone can question the

validity  of  the  acquisition…when  the  property  was  already  notified  for

acquisition, if the petitioners had come to purchase the property, they cannot

have any right to agitate with regard to procedural violation.” There is thus no

confusion that the relief of quashing of the Declaration under Section 6 of the

Act  was  expressly  limited  to  some  while  being  plainly  denied  to  others,

signifying thereby, that the Declaration under Section 6 was left untouched in

the other cases. In  A. S. Naidu,  this Court annulled the Notification issued

under Section 4 on the premises of limitation. This would mean that the rest of

the acquisition proceedings was left untouched by this Court in A. S. Naidu.

15 The second  factor,  detaching the  case  of  the  contesting  Respondents

even farther, is that since the Respondents had purchased the suit land after the

Award had been passed and possession of the land had been taken by the State,

they could not have acquired any rights against the State.  P. Velu did not bring

down  the  acquisition  proceedings  qua  his  land,  but  on  the  contrary,  by

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accepting compensation, had manifested his acceptance of the Award. In these

circumstances, once the land stood vested in the State under Section 16 of the

Act, P. Velu and his vendees, namely the Respondents, could not have created

and engineered rights or interests in the property against the State, except the

right of seeking and receiving enhanced compensation. We are mindful that the

Land Acquisition Act, 1894 as applicable to the State of Tamil Nadu does not

specifically  preclude  the  land  owners  from  entering  into  sale  transactions

during  an  ongoing  acquisition  proceeding.  But  as  long  as  the  acquisition

proceedings  are  not  invalidated,  any  agreement  creating  or  altering  or

extinguishing  rights  with  respect  to  the  land  under  acquisition  will  not  be

effective or efficacious against the State.  

16.     As we have noted above, the additional case of the Respondents is that

A. S. Naidu, as a co-owner or even otherwise, had challenged the acquisition

proceedings qua the entire Survey No. 271 on behalf of himself and P. Velu

also.   We are  sorry  to  record  that  we  have  found not  a  grain  of  evidence

supporting  their  specious  claim.  The  cases  of  A.  Viswanatha  Pillai  v. The

Special Tahsildar for Land Acquisition No. IV   (1991) 4 SCC 17 and Jalandhar

Improvement Trust v. State of Punjab (2003) 1 SCC 526 relied upon by them

in this context, where reliefs were granted to the co-owners, are distinguishable

from the facts obtaining in the instant case. The Respondents or even P. Velu

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cannot assert to be co-owner with A. S. Naidu merely because they happened

to own plots in the larger or main Survey No. 271 in the backdrop of that

Survey having been fractured into smaller Survey numbers, or even because an

approved layout plan had been granted of the larger Survey number.   Nor do

we think that owning a plot in the same survey number ipso facto authorises

A.S. Naidu to litigate on behalf of P. Velu also.  The writ petition of A. S.

Naidu is also conspicuous in that it does not lay any claim to represent P. Velu.  

17 We are  unable,  for  the manifold  reasons  stated  above,  to  uphold the

impugned common Judgments.  The same are  set  aside accordingly.   Civil

Appeals stand allowed.  The Writ Petitions are held to be devoid of any merit

and are dismissed.  Parties to bear their respective costs.

……..……..……………………J                                                      (VIKRAMAJIT SEN)

……..……..……………………J (PRAFULLA CHANDRA PANT)

NEW DELHI; 11TH MAY 2015.