PUNALUR PAPER MILLS LTD. versus WEST BENGAL MINERAL DEVELOPMENT AND TRADING CORPORATION LTD. & ORS. on 1 March 2021

[2021] 3 S.C.R. 1

PUNALUR PAPER MILLS LTD.

v.

WEST BENGAL MINERAL DEVELOPMENT AND TRADINGCORPORATION LTD. & ORS.

(Civil Appeal Nos. 738-739 of 2021)

MARCH 01, 2021

[R. F. NARIMAN AND B. R. GAVAI, JJ.]

West Bengal Premises Requisition and Control (TemporaryProvisions) Act, 1947 – Requisition of Premises – Scope of s. 10B –Land Acquisition Act, 1894 – ss. 4 and 17(4) – Premises owned byappellant was requisitioned under the West Bengal Requisition Actby WBMDTCL – s. 10 B was inserted by way of amendment in WestBengal Requisition Act which provides that property requisitionedunder the said act had to be released by the State Government onor before the expiry of a period of 25 year from date of requisition– After the lapse of said period, premises was not released, however,by way of notification u/s. 4 of Land Acquisition Act, 1894, thepremises was sought to be acquired for the public purpose forproviding the office of WBMDTCL – Said notification was challengedbefore Single Judge of High Court, in the mean time anothernotification u/s. 4 of Land Acquisition Act was issued, this time byinvoking the urgency provision u/s 17(4) – Single Judge struck downthe composite notifications by holding that the urgency provisionwas wrongly invoked and directed WBMDTCL to vacate premises –The Division Bench of High Court upheld the order of Single Judgeand set aside the order of acquisition and directed that the vacantpossession of the premises should be handover to appellant – Itwas also observed that WBMDTCL had been enjoying the saidproperty without paying any money subsequent to the expiry of 25years – It was further held that the Chief Judge, City Civil Courtshall asses the compensation for the period of 16.08.1998 till thepossession is made over to appellant – Three separate appeals werefiled before the Supreme Court against the said order, one by theState and second by appellant only on the limited ground, namely,compensation cannot be assessed by District Judge and third oneby WBMDTCL – Held: The impugned judgment of Division Bench

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Aof the High Court is correct in law as the State was on notice fromthe date of insertion of s.10B, that the Premises would have to bereleased on or before 15.08.1998 – This gave the State the time of11.5 years to act and acquire the premises but State issued thenotification long after the requisition period lapsed – Hence, theappeal filed by the State are dismissed – Appeal filed by the appellantBon the limited ground, namely, compensation is allowed as it is clearfrom the cursory reading of the provision that the compensation forthe illegal occupation of the premises cannot be assessed by theDistrict Judge u/s 11(1)(b) of the West Bengal Requisition Act, ass.11(1) refers to compensation during the period of requisition andCnot after the property continues to remain with the state without anyauthority of law even after the requisition period ends – Hence, theimpugned judgment of the Divison Bench of the High Court is setaside to that extent – Arbitrator is appointed to determine thecompensation that is payable by way of damages for occupation ofthe premises without any authority of law – WBMDTCL directed toDvacate the premises.

Constitution of India: Art. 12 – State – Unlawful Possession– Held : WBMDTCL, which is a “State” within the meaning of Art.12 of Constitution of India, continued in unlawful possession ofthe premises since 15.08.1998 without paying a single pie towardsEcompensation till date – Therefore, arbitrator is appointed todetermine the compensation that is payable by way of damages foroccupation of the premises without any authority of law.

Disposing of the appeals, the Court

FHELD: 1. On the facts of this case, the impugned judgmentof the Division Bench of the High Court is correct in law. In thiscase, the State was on notice from 31.03.1987, i.e., from the dateof insertion of section 10B in the West Bengal Requisition Act,that the Premises would have to be released on or before15.08.1998. This gave the State the time of 11.5 years to act andGacquire the Premises. Such acquisition could easily have beendone by way of a notification under section 4 of the LandAcquisition Act before the lapse of the 25-year period, and wouldhave also preserved the valuable right contained in section 5A ofthe Land Acquisition Act. As a matter of fact, as correctly held byHthe Division Bench, long after the requisition period elapsed on 15.08.1998, the State issued a notification under section 4 of theLand Acquisition Act, without invoking any urgency provision.To then say that the urgency provision could be invoked onaccount of the Single Judge’s order dated 22.06.2000, is toattempt to infer from the said order, much more than it actuallysaid. Therefore, the Division Bench rightly held that at best thisorder could possibly refer to the acquisition proceedings thathad already been initiated by the notification of 12.08.1999 undersection 4 of the Land Acquisition Act. In any case, this ordercould not and did not wash away the lethargy of the State ininitiating acquisition proceedings, which ought to have been donebefore the 25-year period elapsed, by preserving the valuableright contained in section 5A of the Land Acquisition Act, whichcould have been availed of by the owner of the Premises, i.e., theAppellant. [Para 19][15-D-H; 16-A]

2. The impugned judgment of the Division Bench is fortifiedby several judgments. It is clear that the appeals filed by theState, namely, civil appeals arising out of SLP(C) No.10581-10583of 2020 have to be dismissed. [Para 20, 24][16-B, 23-F]

3. Coming to the appeals filed by the Appellant, the saidappeals are only on a limited ground, namely, that compensationfor the illegal occupation of the Premises cannot be assessed bythe District Judge under section 11(1)(b) of the West BengalRequisition Act, as section 11(1) refers to compensation duringthe period of requisition and not after the property continues toremain with the State without any authority of law even after therequisition period ends. A cursory reading of the aforesaidprovision will make it clear that the Appellant is correct in itssubmission, which is therefore accepted and the impugnedjudgment of the Division Bench is set aside to this extent. Civilappeals arising out of SLP (C) Nos. 9834-9835 of 2020 and SLP(C) Nos. 9837-9838 of 2020 are thereby allowed. [Paras 25, 26][23-G-H; 24-A,D]

4. A very disturbing feature of these appeals is the fact thatWBMDTCL, which is “State” within the meaning of Article 12 ofthe Constitution of India, has continued in unlawful possessionof the Premises since 15.08.1998 without paying a single picetowards compensation till date. Following the judgments of thisCourt, most notably, Assam Sillimanite Ltd. v. Union of India, AB

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A(1990) 3 SCC 182 and Krishan Lal Arneja, this court appointsRetd. Judge, High Court of Calcutta as arbitrator to determinecompensation that is payable by way of damages for occupationof the Premises without any authority of law. A written authorityto appoint such arbitrator is to be furnished to us immediately,i.e., within a week from 23.02.2021. If not so furnished,BWBMDTCL will be liable to pay a sum of Rs. 100 per squarefoot, per month (being the average of the rental amounts paid byother tenants in the same building since August 1998 as per theValuation Report dated 30.11.2019 prepared by a CharteredEngineer, Engineer Commissioner & Valuer of Alipore Judges’CCourt for the entire period of illegal occupation of the Premiseswithin four months from the date of this judgment. [Para 27][24-E-G]

5. If written authority for appointment of the arbitrator isreceived within time, the learned arbitrator is to proceed on aDprima facie view of the case submitted to him by the parties todetermine interim compensation payable within a period of twomonths of entering upon the reference. This is owing to the factthat not a single pice has been paid for the last 22 years for theillegal occupation of the Premises by WBMDTCL. Further,neither party is to take any adjournment before the arbitratorEwithin this period of two months, so that the arbitrator can decidethe interim compensation that is to be paid. After such interimorder, the learned arbitrator will proceed to deliver a final award.[Para 28][24-H; 25-A-B]6. WBMDTCL has asked for reasonable time to vacate theFpremises. However, in light of the fact that WBMDTCL has beenin possession of the Premises without any authority of law for thelast 22 years, we do not feel that it is justified to give time asprayed for, till the end of this year. Thus, this court only grantstime of four months from the date of this judgment to vacate theGPremises, conditional upon the responsible officer filing anundertaking before this Court, that they will vacate the Premiseswithin four months and handover vacant possession of thePremises to the Appellant, and that the interim compensation, ifordered before such date, will be paid within the time stipulatedby the arbitrator so appointed. [Para 29][25-C-D]H

7. In the civil appeals @ SLP (C) Nos. 9837-9838 of 2020,though no one appears on behalf of West Bengal Sugar IndustriesDevelopment Corporation Ltd., who have been in illegaloccupation of a portion of the fifth floor of premises no. 13, NellieSengupta Sarani (Lindsay Street), Calcutta, measuringapproximately 1350 square feet, the same directions apply quaWB Sugar Industries. Thus, WB Sugar Industries is also to submita written authority to appoint the arbitrator within a week from23.02.2021, failing which they shall pay a sum of Rs. 100 persquare foot, per month, for the entire period of illegal occupationof the Fifth Floor Premises, within four months from the date ofthis judgment. Further, WB Sugar Industries is given four monthsto vacate the Fifth Floor Premises, upon the submission of anundertaking to vacate and handover vacant possession of theFifth Floor Premises to the Appellant, and to pay the interimcompensation within the time to be stipulated by the arbitrator.These appeals are disposed of accordingly. [Paras 30, 31][25-E- AB

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Union of India v. Krishan Lal Arneja, (2004) 8 SCC453 : [2004] 1 Suppl. SCR 801 – relied on.

State of U.P. v. Keshav Prasad Singh, (1995) 5 SCC587 : [1995] 2 Suppl. SCR 329; State of A.P. v.Goverdhanlal Pitti, (2003) 4 SCC 739 : [2003] 2SCR 908 – distinguished.

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Banwarilal & Sons Pvt. Ltd. v. Union of India, C.W.P.No. 2385 of 1988 reported in 1991 Supp DRJ 317;Union of India v. Shakuntala Gupta, (2002) 10 SCC694; Union of India v. Shakuntala Gupta, (2002) 7 SCC98; Assam Sillimanite Ltd. v. Union of India, (1990) 3SCC 182 : [1990] 1 SCR 983 – referred to.

[2021] 3 S.C.R.

A[2004] 1 Suppl. SCR 801relied onpara 22[1990] 1 SCR 983referred topara 27

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 738 -739 of 2021.

BFrom the Judgment and Order dated 30.09.2019 of the High Courtof Judicature at Calcutta in APO 298 and APO 303 of 2017.

With

Civil Appeal Nos.740–741 and 742–744 of 2021.

Mukul Rohatgi, Dr. Abhishek Manu Singhvi, Sr. Advs., RameshCSingh, Gautam Narayan, Pankaj Jain, Mahesh Agarwal, Ashok KumarJain, Bijoy Kumar Jain, Suhaan Mukerji, Vishal Prasad, Nikhil Parikshith,Abhishek Manchanda for M/s. Plr Chambers & Co., Kunal Vajani,Debanjan Mandal, Jishnu Chowdhury, Sandip Dasgupta, Ayan KumarDe, Ms. Madhavi Khanna, Shubhang Tandon, Kunal Mimani, Ms. LizDMathew, for the appearing parties.

The Judgment of the Court was delivered by

R. F. NARIMAN, J.

1. Leave granted.

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2. In the facts of these appeals, the entire second floor of premisesno. 13, Nellie Sengupta Sarani (Lindsay Street), Calcutta [“thePremises”], measuring approximately 7500 square feet, owned byPunalur Paper Mills Ltd. [“Appellant”], was requisitioned under theWest Bengal Premises Requisition And Control (Temporary Provisions)FAct, 1947 [“West Bengal Requisition Act”] on 16.08.1973. Pursuantto certain judgments of this Court, section 10B was inserted in the WestBengal Requisition Act by way of an amendment on 31.03.1987. Thesaid section reads as follows:

“10B. Notwithstanding anything contained in section 10 or sectionG10A, the State Government shall release from requisition anyproperty requisitioned or deemed to be requisitioned under thisAct on or before the expiry of a period of twenty-five years fromthe date of such requisition:

Provided that the benefit of this section shall not be available untilafter the expiry of a period of five years from the date of comingH

into force of the West Bengal Premises Requisition and Control(Temporary Provisions) (Second Amendment) Act, 1986.”

3. As a result of the operation of section 10B of the West BengalRequisition Act, any property requisitioned under the Act had to bereleased by the State Government on or before the expiry of a period of25 years from the date of requisition. For the Premises, this 25-yearperiod ended on 15.08.1998, obligating the State to release the Premises.It is common ground between the parties that the Premises was not infact released and physical possession remained with the West BengalMineral Development and Trading Corporation Ltd. [“WBMDTCL”].

4. Subsequent to the lapse of such period, by way of a notificationunder section 4 of the Land Acquisition Act, 1894 [“Land AcquisitionAct”], published on 12.08.1999, the Premises was sought to be acquiredfor the public purpose of providing the permanent office accommodationof WBMDTCL. This notification of 12.08.1999 was challenged in WritPetition No. 1045 of 2000 filed on 18.04.2000 before the High Court ofCalcutta by the Appellant, who owned the said Premises. It may also bementioned that Writ Petition No. 1042 of 2000 was also filed by theAppellant on 17.04.2000, seeking handover of vacant possession of thePremises since the 25-year period prescribed by section 10B of theWest Bengal Requisition Act had ended.

5. By an order dated 22.06.2000, in Writ Petition No. 1042 of2000, a learned Single Judge of the High Court of Calcutta held as follows:

“The learned counsel Mr. Bhattacharji appearing on behalf of theRespondent no. 4 as well as the learned counsel Mr. Duttappearing on behalf of the State submitted that three months timeshould be granted to the Respondent no. 4 to vacate the premisesin question without prejudice to its rights to take such appropriatelegal steps as are available to it to acquire the property in question,accordingly such an order is passed with the consent of the learnedcounsel appearing for the petitioners. The learned counsel havealso submitted that [insofar] as the compensation is concernedthe same may be decided by the Court on materials to be placedby them by filing separate affidavit.

Let such affidavit be filed within three weeks from the date, reply,if any, within two weeks thereafter with liberty to mention thematter before me as and when I will be sitting singly.

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AThe writ petition is kept alive only for the purpose of determinationof the amount of compensation to be paid by the Respondent No.4 to the Writ Petitioner for occupying the property in questionsubsequent to coming to an end of the order of requisition untildelivery of possession thereof is effected in terms of this order.This order has been passed by consent of all the parties and theBcounsel appearing for parties have signed a copy of the same inacknowledgement thereof and the same is kept with the record.”

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6. On the same day, in Writ Petition No.1045 of 2000, the SingleJudge passed the following order:

C“The interim order already granted is vacated as the learnedcounsel for the petitioner does not press for continuation of thesame after having seen the newspaper publication of thenotification in question. It is made clear that Court has not decidedany issue in the instant writ petition.

Affidavit-in-opposition to this writ petition shall be filed [in]3 (three) weeks from date, reply, if any, within 2 (two) weeksthereafter and liberty to mention the matter before the appropriateBench.

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All parties to act on a signed copy of this dictated order onEthe usual undertaking.”7. Without pursuing the section 4 notification of 12.08.1999, anothernotification for the same property was issued on 04.08.2000, under section4 of the Land Acquisition Act, this time invoking the urgency provisionunder section 17(4) thereof, as follows:F“In exercise of the powers conferred by Sub-Section (4) of Section17 of the Land Acquisition Act, 1894 (Act I of 1894), the Governoris pleased to direct that the provisions of Section 5A of the Actshall not apply to the lands as described in the schedule above towhich in the opinion of the Governor, the provisions of Sub-section(1) of Section 17 of the said Act are applicable”G

8. A declaration under section 6 of the Land Acquisition Act soonfollowed, on 11.08.2000. These two notifications became the subject ofchallenge in Writ Petition No. 3003 of 2000 filed by the Appellant on05.09.2000, on the ground that the urgency provision was improperlyinvoked, and thus the composite notification dated 04.08.2000, underH

PUNALUR PAPER MILLS LTD. v. WEST BENGAL MINERALDEVELOPMENT AND TRADING CORP. LTD. [R. F. NARIMAN, J. ]

section 4 read with section 17 of the Land Acquisition Act, would haveto be set aside.

9. A learned Single Judge of the High Court of Calcutta, by anorder dated 16.01.2017, disposed of all three writ petitions, namely, WritPetition Nos. 1042, 1045 and 3003 of 2000. The learned Single Judge,noting that the urgency provision had wrongly been invoked in the factsof this case, followed the judgments of this Court and struck down thecomposite notification under section 4 read with section 17 of the LandAcquisition Act, dated 04.08.2000. Consequently, he directedWBMDTCL to vacate the Premises within three months and handovervacant possession to the Appellant.

10. On appeal, the learned Single Judge’s judgment and orderdated 16.01.2017 was set aside by consent of the parties, and the writpetitions were to be heard de novo in the six different appeals that werefiled by the Land Acquisition Collector, WBMDTCL and the First LandAcquisition Collector. As a result, a de novo hearing of the writ petitionswas taken up by the Division Bench of the High Court of Calcutta,which passed the impugned judgment and order dated 30.09.2019. Aftersetting out the facts of this case, the questions that the Division Benchput to itself were as follows:

“5. After hearing the rival contentions and considering the materialson record, we are of the view that the moot questions to beconsidered while disposing of the three writ petitions and the sixappeals arising therefrom are as follows:

a.After the expiry of 25 years from the date of requisition,were the appellants liable to vacate the requisitionedproperty being the said property?

b.Is respondent / writ petitioner no. 1 entitled to anycompensation on WBMDTCL having overstayed at thesaid property after expiry of 25 years from the date?

c.In the facts of the instant case, could the said respondentsacquire the said property by applying the special powersin case of urgency as provided in section 17 of the 1894Act particularly when they had proceeded to acquirethe property by following the normal method and had infact given a notice under section 4 of the 1894 Act on12th August, 1999?

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d.Could the right of objection available to the respondent /writ petitioner no.1 be taken away in the facts andcircumstances of the instance case?”

11. The Division Bench held:

“6. We take up the two issues together as they are inter-related inthe instant case. A conjoined reading of the letters dated 25thMarch, 1997 issued by WBMDTCL and 23rd September, 1997issued by the Land Acquisition Collector, it will appear that boththe State and the WBMDTCL were aware of the fact that oncompletion of 25 years from the date of requisition, therequisitioned property had to be released from requisition and hadto be vacated. The provisions of section 10B of the said Act alsosay so and, as such, in the letter dated 23rd September, 1997, theLand Acquisition Collector had specifically indicated that therequiring body has to vacate possession after completion of 25years of requisition. Despite such specific knowledge, WBMDTCLdid not vacate the said property on expiry of 15th August, 1998.The said State / respondents who had requisitioned the propertyalso did not take any step to have the said property released ofthe requisition and possession be returned to the owner of thesame.

It also appears that WBMDTCL have been enjoying the saidproperty without paying any money for the same subsequent tothe expiry of 25 years.”

12. Referring to the order of the Single Judge dated 22.06.2000,the Division Bench then went on to hold:

“It further appears that on 22nd June, 2000 at the invitation of theState / respondents and WBMDTCL, an order was passed givingthree months’ time to vacate the said property with the consent ofthe petitioner. It will also appear that the compensation to be paidby the WBMDTCL (respondent no.4 in the said writ petition) tothe writ petitioner for occupying the property in question subsequentto coming to an end of the order of requisition until delivery ofpossession thereof was left to be decided by the Court. The writpetition being WP No.1042 of 2000 was kept alive only for thepurpose of determining the amount of such compensation.Affidavits were invited and from the gamut of the said order dated

22nd June, 2000, it is evident that the affidavits were called foralso for the purpose of determining the compensation. It will alsoappear from the said order that the order to vacate the said propertywas without prejudice to the rights of the State to take suchappropriate legal steps as available to it to acquire the property inquestion. At the time when the said order dated 22nd June, 2000was passed, the section 4 notification and the objection under theprovisions of section 5A were already on record. The Court wasconscious about the same. The order thereof has to be interpretedthat the said property had to be vacated within a period of threemonths from the date of the order and at the same time, therewas no embargo on the part of the State to proceed with theacquisition. The view in favour of such interpretation of the orderdated 22nd June, 2000 is further emboldened from another order,also passed on the same day in WP No.1045 of 2000 when theCourt vacated the interim order earlier passed staying the hearingof the objection filed by the respondent / writ petitioner no.1 interms of the provisions of section 5A of the 1894 Act. It is,therefore, apparent that the Court while passing the two ordershad clearly meant that WBMDTCL had to vacate the premiseswithin three months from 22nd June, 2000 and, at the same time,the State Authorities were free to proceed with the acquisitionproceeding initiated by publication of the section 4 notice on 12thAugust, 1999 after hearing out the objection filed by respondent /writ petitioner under the provisions of section 5A of the 1894 Act.”

13. After referring to some of the judgments of this Court, theDivision Bench then concluded:

“13. The findings in these judgments, therefore, clearly answerthe question of the scope of judicial review raised by the appellants.In the instant case, the property was requisitioned in the year1973 until a few months prior to expiry of the 25 years period; norequest was made for re-requisitioning of the property. Receivingsuch request as discussed hereinabove, the State / respondentsgave a firm view that the property has to be vacated on expiry ofthe period of 25 years and the same cannot be re-requisitioned.However, the State expressed a view that the property can beacquired if a request to that effect is made. The State / respondents,thereafter, proceeded to acquire the property without invoking ABC

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the extraordinary power available to the Government under section17(1) read with section 17(4) of the said Act. So it is clear that atthe relevant point, the Government did not form an opinion as toinvoking of the urgency clause. The Government, therefore, wasof the view that the acquisition proceedings could wait for fewmonths for completion of an enquiry under section 5A of the 1894Act. This is also evident from the steps taken by the Governmenton issuance of notice under section 4 and inviting objections undersection 5A of the 1894 Act. After amendment to the said Act of1947 made in 1986 with the introduction of section 10B, it wasknown to the WBMDTCL being the requiring body as also theGovernment that on expiry of 25 years, the property was to bereleased from requisition. Even if we consider that a five yearsgap for the release of the property after 25 years was availableunder the said Act that takes us to the year 1991. There wasample time between 1991 and 1998 when the 25 years came toan end to acquire the property in the normal procedure byconducting an enquiry if the WBMDTCL or the Government wasso keen in maintaining the registered office of WBMDTCL at thesaid property or for providing the said property to maintain theregistered office of WBMDTCL thereat. No steps for acquiringthe property were taken for all these years. The acquisitionproceeding too under the normal mode was commenced on 10th/ 12th August, 1999. Pursuant to such notification, objection undersection 5 was invited and the same was filed by the respondent /writ petitioner no.1. During the time when the hearing of theobjection of section 5A of the 1894 Act was kept pending, therespondents / writ petitioners approached this Court by filing twowrit petitions being WP Nos.1042 and 1045 of 2000 in the monthof April, 2000. So the challenge to the notification under section 4was made within a reasonable time period from the publication ofthe notification. The fact situation at that material point clearlyestablished that no case of urgency was in the mind of theGovernment. Only after the order of 22nd June, 2000, wasobtained at the invitation of the State / respondents and theWBMDTCL, the three months period to vacate the said premiseswas used to invoke the extraordinary powers of urgency to dispensewith the enquiry under section 5A of the 1894 Act.”

“15. The facts of the instant case are also not such that theacquisition could not brook the delay for even a few weeks ormonths. That apart and in any event, using the order dated 22ndJune, 2000 as a fact situation to invoke the urgency clause smacksof mala fides and is, as such, vitiated. We, therefore, set aside theorder of acquisition invoking the provisions of section 17(1) readwith section 17(4) of the 1894 Act. It is declared that the preliminarynotification under section 4 which was cancelled by invoking theprovisions of section 17(1) had stood lapsed by efflux of time asno section 6 declaration followed within a period of one year. Thiswill, however, not prevent the Government from initiatingacquisition proceedings afresh, if entitled to in law. The possessionof the said property should be vacated and possession thereof tobe made over to the respondents / writ petitioners within a periodof three months from date. These directions are peremptory.

16. The Chief Judge, City Civil Court at Calcutta shall also assessthe compensation / rent / occupational charges for the period of16th August, 1998 till the possession of the said property is madeover to the respondents / writ petitioners. Section 11(1)(b) of the1947 Act provides for the same.

17. The writ petitions being WP Nos.1042, 1045 & 3003 of 2000are disposed of in the light of the observations made hereinabove.”

14. Ms. Liz Mathew, learned advocate appearing on behalf of theState of West Bengal, assailed the impugned judgment of the DivisionBench by arguing that the order of the Single Judge dated 22.06.2000had made it clear that the State could take appropriate steps to initiateland acquisition proceedings, which were then done pursuant to suchorder on 04.08.2000. Taking shelter under this order, she therefore arguedthat it would not be possible to strike down the notification under section4 read with section 17 of the Land Acquisition Act, since this was donepursuant to the order dated 22.06.2000. For this purpose, she relied uponthe judgments of this Court in State of U.P. v. Keshav Prasad Singh,(1995) 5 SCC 587 and State of A.P. v. Goverdhanlal Pitti, (2003) 4SCC 739.

15. Shri Mukul Rohatgi, learned senior advocate appearing onbehalf of the Appellant, stoutly refuted these arguments and relied uponcertain judgments of this Court which covered the issue in the Appellant’s AB

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Afavour. In any case, he also argued that given the conduct of the partiesin not vacating the Premises by 15.08.1998 and continuing to be inunauthorised possession till date, as well as not paying a single paisatowards compensation, this Court ought not to entertain the State’sappeals under Article 136 of the Constitution of India.B16. The judgments of this Court relied upon by Ms. Liz Matheware distinguishable from the facts of this case. In State of U.P. v. KeshavPrasad Singh, (1995) 5 SCC 587, this Court dealt with a specific caseof urgency, namely, a mandatory injunction issued by a Civil Court todemolish a compound wall and to restitute possession. This Court, thus,had no difficulty in stating that there was a need for immediacy in theCcase, as follows:

“5. The next question is whether the Government would be justifiedin exercising its power under Section 17(4) and dispense with theinquiry under Section 5-A of the Act. Mandatory injunction issuedby the civil court to demolish the compound wall and to restituteDpossession to the respondent had to be complied with. There isthus urgency. The public purpose was obvious as the compoundwas required to be retained to protect the safety of the office.The object of Section 5-A enquiry was to show whether therewas no public purpose or the land was not suitable or some otherElands may be acquired. All these relevant and related facts areredundant due to the facts of the case.”

17. Likewise, in State of A.P. v. Goverdhanlal Pitti, (2003) 4SCC 739, on the facts of the case, this Court held that the High Courtof Andhra Pradesh could not have struck down the acquisition of propertyFon the ground of mala fides only because the State had lost in evictionproceedings and initiated acquisition proceedings, after giving anundertaking to vacate a dilapidated 100-year old school building. ThisCourt therefore held:

“17. The High Court of Andhra Pradesh held the action ofGacquisition of the property by the State as malicious in law onlybecause before passing of adverse orders by the court against it,no action for acquisition of the building which was in its occupationsince 1954, was initiated. In our opinion, even if that be the situationthat the State as tenant of the school building took no step toacquire the land before [the] order of eviction and direction of theHHigh Court, it cannot be held that when it decided to acquire the

building, there existed no genuine public purpose. If only thepossession of the property could be retained as a tenant, it wasunnecessary to acquire the property. The order of eviction aswell as the direction to vacate issued by the High Court only providejust, reasonable and proximate cause for resorting to acquisitionunder the Land Acquisition Act. Resort, therefore, to acquisitionat a stage when there was no other alternative but to do so toserve a genuine public purpose which was being fulfilled from1954 signifies more a reasonable and just exercise of statutorypower. Such exercise of power cannot be condemned as one madein colourable or mala fide exercise of it.”

18. This judgment is completely distinguishable also for the reasonthat the urgency provision contained in section 17 of the Land AcquisitionAct was not invoked, it being held that the continuance of a school serveda genuine public purpose, which public purpose could not suddenly bedeemed to become non-existent, only because the State had lost in evictionproceedings.

19. On the facts of this case, the impugned judgment of the DivisionBench is correct in law. In this case, the State was on notice from31.03.1987, i.e., from the date of insertion of section 10B in the WestBengal Requisition Act, that the Premises would have to be released onor before 15.08.1998. This gave the State the time of 11.5 years to actand acquire the Premises. Such acquisition could easily have been doneby way of a notification under section 4 of the Land Acquisition Actbefore the lapse of the 25-year period, and would have also preservedthe valuable right contained in section 5A of the Land Acquisition Act.As a matter of fact, as correctly held by the Division Bench, long afterthe requisition period elapsed on 15.08.1998, the State issued a notificationunder section 4 of the Land Acquisition Act, without invoking any urgencyprovision. To then say that the urgency provision could be invoked onaccount of the Single Judge’s order dated 22.06.2000, is to attempt toinfer from the said order, much more than it actually said. Therefore, theDivision Bench rightly held that at best this order could possibly refer tothe acquisition proceedings that had already been initiated by thenotification of 12.08.1999 under section 4 of the Land Acquisition Act.In any case, this order could not and did not wash away the lethargy ofthe State in initiating acquisition proceedings, which ought to have beendone before the 25-year period elapsed, by preserving the valuable right AB

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Acontained in section 5A of the Land Acquisition Act, which could havebeen availed of by the owner of the Premises, i.e., the Appellant.

20. The impugned judgment of the Division Bench is fortified byseveral judgments. In Banwarilal & Sons Pvt. Ltd. v. Union of India,C.W.P. No. 2385 of 1988 reported in 1991 Supp DRJ 317B[“Banwarilal (Delhi HC)”], a Division Bench of the High Court ofDelhi, vide an order dated 04.02.1991, quashed a similar notification inthe context of a similar provision contained in the Requisitioning andAcquisition of Immovable Properties Act, 1952. The High Court of Delhiheld:

C“8. In the Notification challenged before us the only thing that isstated is that the property was required for the “residential use ofgovernment servants.” There is not a whisper of what was theurgency to take immediate possession and to deny the right ofraising [objections] to the owner under Section 5-A of the Act.The Notification under Sections 4 and 17(1) in the present case,Dtherefore, stand vitiated for non-compliance of the requirementof mentioning urgency in the Notification itself. What is moreobjectionable is the fact that the building was already in occupationof the officers of Delhi Administration and the Administration knewthat the Requisitioning and Acquisition of Immovable PropertiesEAct was to lapse on 10.3.1987. Thus, they had sufficient time tomake alternate arrangement for the residence of their officersand there was no urgency whatsoever for invoking the provisionsof Section 17(1). The provisions of Section 17(1) cannot be utilisedto cover up the laxity or lethargy of the Administration to takeappropriate steps in time for making available alternateFaccommodation for its officers.”

(page 320)

“13. In Assam Sillimanita Limited v. Union of India (AIR 1990SC 1417) the Supreme Court had appointed an Arbitrator fordetermining the damages in case of unlawful termination of alease. Considering the fact that more than three years haveelapsed since the Requisitioning and Acquisition of ImmovableProperty Act has lapsed, it would be more just and appropriatethat an Arbitrator is appointed in the present case to determinethe damages payable by Delhi Administration instead of making G

the petitioners run to the Civil Court for that purpose. We appointMr. T.V.R. Tatachari, former Chief Justice, Delhi High Court, asan Arbitrator who will enter upon the reference within four weeksof the communication of this order to him. He may make theAward within a period of four months thereafter. The Arbitratorwill not be obliged to give reasons for his conclusions. The partieswill be at liberty to produce their valuers before the Arbitrator forthe assessment of damages, if they so desire. The petitioners aswell as the Delhi Administration will pay a sum of Rs. 10,000/-each to the Arbitrator as the initial payment towards his fees. Acopy of this order [be] sent to the learned Arbitrator by theRegistry.”

(pages 321-322)

21. This judgment of the High Court of Delhi travelled to thisCourt, the Special Leave Petition filed by the Union of India beingdismissed on 21.03.1991. In other off-shoot proceedings as well, suchas Union of India v. Shakuntala Gupta, (2002) 10 SCC 694, thejudgment in Banwarilal (Delhi HC) (supra) was again confirmed on14.11.2000. A review against the aforesaid order met with the same fatein Union of India v. Shakuntala Gupta, (2002) 7 SCC 98, in whichthis Court dismissed the review on merits on 27.08.2002, stating:

“15. In any event the order dated 14-11-2000 was not legallyerroneous. The notification under Section 4 was a composite one.The “opinion” of the Lt. Governor that the provisions of Section17(1) of the Act were applicable, as expressed in the last paragraphof the impugned notification, was relatable in general to the 14properties specified in the notification. The impugned notificationwas quashed in Banwari Lal case [Banwari Lal & Sons (P)Ltd. v. Union of India, DRJ 1991 Supp 317] inter alia on theground that the “opinion” of the Lt. Governor as expressed in thenotification was insufficient for the purpose of invoking theprovisions of Section 17(1) of the Act. This ground was not peculiarto the premises in Banwari Lal case [Banwari Lal & Sons (P)Ltd. v. Union of India, DRJ 1991 Supp 317] but common to allfourteen properties. The urgency sought to be expressed in theimpugned notification cannot be held to be sufficient for thepurposes of Section 17(1) in this case when it has already beenheld to be bad in Banwari Lal case. [See observations in Abhey AB

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Ram v. Union of India, (1997) 5 SCC 421 (para 11); Delhi Admn.v. Gurdip Singh Uban, (2000) 7 SCC 296 (paras 53-55)] Theexpression of urgency being one cannot be partly good and partlybad like the curate’s egg. It must follow that the acquisition inrespect of the respondent’s premises as mentioned in thenotification which were sought to be acquired on the basis ofsuch invalid expression of “urgency” cannot be sustained.”

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22. These judgments were then followed in Union of India v.Krishan Lal Arneja, (2004) 8 SCC 453 [“Krishan Lal Arneja”].After setting out the relevant provisions of the Land Acquisition Act, thisCourt held:C

“16. Section 17 confers extraordinary powers on the authoritiesunder which it can dispense with the normal procedure laid downunder Section 5-A of the Act in exceptional case of urgency. Suchpowers cannot be lightly resorted to except in case of real urgencyenabling the Government to take immediate possession of the landDproposed to be acquired for public purpose. A public purpose,however laudable it may be, by itself is not sufficient to take aidof Section 17 to use this extraordinary power as use of such powerdeprives a landowner of his right in relation to immovable propertyto file objections for the proposed acquisition and it also dispensesEwith the inquiry under Section 5-A of the Act. The authority musthave subjective satisfaction of the need for invoking urgency clauseunder Section 17 keeping in mind the nature of the public purpose,real urgency that the situation demands and the time factor i.e.whether taking possession of the property can wait for a minimumperiod within which the objections could be received from theFlandowners and the inquiry under Section 5-A of the Act could becompleted. In other words, if power under Section 17 is notexercised, the very purpose for which the land is being acquiredurgently would be frustrated or defeated. Normally urgency toacquire a land for public purpose does not arise suddenly orGovernight but sometimes such urgency may arise unexpectedly,exceptionally or extraordinarily depending on situations such asdue to earthquake, flood or some specific time-bound project wherethe delay is likely to render the purpose nugatory or infructuous.A citizen’s property can be acquired in accordance with law butin the absence of real and genuine urgency, it may not be D

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appropriate to deprive an aggrieved party of a fair and justopportunity of putting forth its objections for due consideration ofthe acquiring authority. While applying the urgency clause, theState should indeed act with due care and responsibility. Invokingurgency clause cannot be a substitute or support for the laxity,lethargy or lack of care on the part of the State administration.

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21. One more aspect to be noticed is, as observed by the HighCourt, that the properties in question continued to be in possessionof the appellants; in other words, there was no urgency of takingimmediate possession nor was there any immediate threat ofdispossessing them from the properties. At the most, after thelapsing of the Requisitioning Act on 10-3-1987, their possessionover the properties would have been unauthorised, maybe so longthey continued in unauthorised possession of the properties, theywere liable to pay damages for their occupation for a few monthsduring which period they could have completed acquisitionproceedings in the normal course without resorting to provisionsof Sections 17(1) and (4) of the Act. During the course of thehearing, we specifically asked the learned counsel for the appellantsin this regard, the only answer was that the appellants being theUnion of India and others did not want to remain in the unauthorisedpossession of the properties. We are not convinced by this replyso as to justify invoking urgency clause to acquire the properties.Having regard to the facts and circumstances of the case in theseappeals, the authorities could have completed acquisitionproceedings in a couple of months even after providing opportunityfor filing objections and holding inquiry under Section 5-A of theAct if they were really serious.

22. In the objects and reasons of Act 20 of 1985, it is stated thatall the properties which were requisitioned prior to the amendmentof the Act in 1970 were required to be released from requisitionor acquired by 10-3-1985; although the Government is expeditiouslyimplementing the policy of acquiring or releasing from requisitionthe requisitioned properties, a number of them are expected to beneeded by the Government even after 10-3-1985 for publicpurposes; the Ministry of Defence is taking action for eitherreleasing or acquiring the requisitioned properties. It was, ABC

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Atherefore, decided to extend the maximum period for which theproperties could be retained under requisition by a period of twoyears. Thus, it is clear that the authorities were aware that theproperties were to be released or acquired and the maximum periodwas extended up to two years for the purpose. From 1985 to1987 they had sufficient time to acquire the properties in questionBin the usual course. They had enough time to provide opportunityfor filing objections and holding inquiry under Section 5-A of theAct. There was no need to invoke Section 17 of the Act. Theoffice memorandum dated 19-7-1979 extracted above shows thatthe Executive Council took the decision in view of the amendmentCin the Requisitioning and Acquisition of Immovable Property Act,1952 that all the requisitioned/leased houses which were with theAdministration for more than 10 years were to be released totheir owners immediately and all the occupants of requisitioned/leased houses were requested to furnish the relevant informationby 16-7-1979 failing which the officer concerned will be liable forDeviction from the requisitioned house without provision foralternative accommodation. Here again, it is clear that theauthorities were in the know of the situation in the year 1979itself. Further, the minutes of the meeting held on 8-4-1985 in theroom of the Secretary (PWD/L&D), Delhi Administration, DelhiEshow that the position regarding all the requisitioned properties inDelhi which were requisitioned under the 1952 Act was reviewed.The said meeting was attended by: (1) Secretary (PWD/L&D),(2) Joint Director (Training), (3) Additional District Magistrate(Registration) and Under-Secretary (LA). In the said meeting, itwas decided that all the pre-1970 residential buildings which wereFpartially requisitioned and were not in full occupation of the DelhiAdministration should be derequisitioned in stages.

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27. Thus, from the Statement of Objects and Reasons of Act 20of 1985, statement by the Minister concerned to the Lok Sabhaon 28-3-1985, the office memorandum aforementioned and theminutes of meeting dated 8-4-1985, it is sufficiently clear that theappellants were fully aware that they had to make arrangementseither for acquiring the properties or derequisitioning them bymaking alternate arrangement within a period of two years i.e. up G

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to 10-3-1987 inasmuch as no further extension of the RequisitionAct was possible. Further having regard to the observations madeby this Court in the case of Vora [(1984) 2 SCC 337 : (1984) 2SCR 693] , there would have been no justification for the appellantsto continue the properties in question under the Requisitioning Actany more. If the appellants were really serious in acquiring theproperties in question, they had almost 2 years’ time even aftertaking the decision to acquire them or derequisition them withinwhich time, acquisition proceedings could be completed in theusual course without depriving the respondents of their valuableright to file objections for acquisition and without dispensing withinquiry under Section 5-A of the Act.

xxx xxx xxx

29. Having regard to the facts and circumstances and the materialavailable on record, we are of the view that invocation of urgencyclause was without justification and was untenable as held inBanwari Lal [Banwari Lal & Sons (P) Ltd. v. Union of India,DRJ 1991 Supp 317 (Del HC) [Ed.: This order of the High Courtwas affirmed by the Supreme Court while dismissing the SLP(No. 4458 of 1991) in Union of India v. Banwarilal & Sons (P)Ltd. by its order dated 21-3-1991 quoted in para 5 below. See alsopara 11 below. See connected case at (2004) 5 SCC 304.]] andShakuntala Gupta [Union of India v. Shakuntala Gupta, (2002)7 SCC 98 [Ed.: See also the earlier order reported at (2002) 10SCC 694.]] . This Court in State of Punjab v. Gurdial Singh[(1980) 2 SCC 471] as to the use of emergency power underSection 17 of the Act has observed that: (SCC p. 477, para 16)

“[I]t is fundamental that compulsory taking of a man’s propertyis a serious matter and the smaller the man the more seriousthe matter. Hearing him before depriving him is both reasonableand pre-emptive of arbitrariness, and denial of thisadministrative fairness is constitutional anathema except forgood reasons. Save in real urgency where public interest doesnot brook even the minimum time needed to give a hearingland acquisition authorities should not, having regard to Articles14 (and 19), burke an enquiry under Section 17 of the Act.Here a slumbering process, pending for years and suddenly ABC

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exciting itself into immediate forcible taking, makes a travestyof emergency power.”

30. In Om Prakash v. State of U.P. [(1998) 6 SCC 1] referringto State of Punjab v. Gurdial Singh [(1980) 2 SCC 471] thisCourt in para 21 has observed that: (SCC pp. 23-24)

“[A]ccording to the aforesaid decision of this Court, inquiryunder Section 5-A is not merely statutory but also has a flavourof fundamental rights under Articles 14 and 19 of theConstitution though right to property has now no longerremained a fundamental right, at least observation regardingArticle 14, vis-à-vis, Section 5-A of the Land Acquisition Actwould remain apposite.”

In the present appeals, the appellants have not been able to showbefore the High Court any genuine subjective satisfactiondepending upon any relevant material available to the Stateauthorities at the time when they issued the impugned notificationunder Section 4(1) of the Act and dispensed with Section 5-Ainquiry taking aid of Section 17(4) of the Act. A Bench of threelearned Judges of this Court in Narayan Govind Gavate v. Stateof Maharashtra [(1977) 1 SCC 133 : 1977 SCC (Cri) 49] hasexpressed that Section 17(4) cannot be read in isolation fromSections 4(1) and 5-A of the Act and has expressed that havingregard to the possible objections that may be taken by thelandowners challenging the public purpose, normally there will belittle difficulty in completing inquiries under Section 5-A of theAct very expeditiously. In the same judgment, it is also statedthat: (SCC p. 148, para 38)

“The mind of the officer or authority concerned has to beapplied to the question whether there is an urgency of such anature that even the summary proceedings under Section 5-Aof the Act should be eliminated. It is not just the existence ofan urgency but the need to dispense with an inquiry underSection 5-A which has to be considered.””

23. Justifying the quashing of the notification under section 4 ofthe Land Acquisition Act along with the invocation of urgency undersection 17 thereof, this Court then concluded:

“35. The alternative argument urged on behalf of the appellantsthat if the impugned notification suffers from infirmity in relationto invoking urgency clause, it can be quashed only to the extent ofinvoking the aid of Section 17 and the said notification can besustained confining it to Section 4 of the Act, cannot be accepted.Otherwise, the same common notification stands quashed inrespect of a few parties as in the cases of Banwari Lal [Unionof India v. Banwarilal & Sons (P) Ltd., SLP (C) No. 4458 of1991 dated 21-3-1991] and Shakuntala Gupta [Union of Indiav. Shakuntala Gupta, (2002) 7 SCC 98 [Ed.: See also the earlierorder reported at (2002) 10 SCC 694.]] and it stands sustained inrespect of others i.e. the respondents in these appeals leading toanomalous situation. Added to this, if the argument, as advancedon behalf of the Union, is accepted, the notification under Section17 of the Act invoking urgency clause would stand quashed butthe landowner would nonetheless be deprived of the possessionof the property as also payment of 80% of compensation underSection 17(3-A) of the Act. Such an unjust result cannot beallowed to happen by quashing the notification in part only to theextent of Section 17 of the Act and maintaining it for the purposeof Section 4 of the Act. Thus, having regard to the facts andcircumstances brought on record in these appeals, it is not possibleto accept this argument particularly when the very foundation ofinvoking Section 17 was invalid and unjustified as upheld by thisCourt in Banwari Lal‡ and Shakuntala Gupta [Union of Indiav. Shakuntala Gupta, (2002) 7 SCC 98 [Ed.: See also the earlierorder reported at (2002) 10 SCC 694.]].”

24. Given the aforesaid, it is clear that the appeals filed by theState, namely, civil appeals arising out of SLP(C) No.10581-10583 of2020 have to be dismissed.

25. Coming to the appeals filed by the Appellant,[1] the said appealsare only on a limited ground, namely, that compensation for the illegaloccupation of the Premises cannot be assessed by the District Judgeunder section 11(1)(b) of the West Bengal Requisition Act, as section11(1) refers to compensation during the period of requisition and notafter the property continues to remain with the State without any authority 1 Civil appeals arising out of SLP (C) Nos.9834-9835 of 2020 and SLP (C) Nos.9837-9838 of 2020.

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Aof law even after the requisition period ends. Section 11(1) of the WestBengal Requisition Act reads as follows:

“Provisions regarding compensation.

11. Procedure for fixing compensation.-

(1) Where any premises are requisitioned under this Act, thereBshall be paid to all persons interested compensation the amount ofwhich shall be determined in the manner, and in accordance withthe principles hereinafter set out, namely:

(a) where the amount of compensation can be fixed byagreement, it shall be paid in accordance with such agreement;C(b) where no such agreement can be reached, the StateGovernment shall appoint a District Judge or an AdditionalDistrict Judge as arbitrator;…”

26. A cursory reading of the aforesaid provision will make it clearthat the Appellant is correct in its submission, which is therefore acceptedDand the impugned judgment of the Division Bench is set aside to thisextent. Civil appeals arising out of SLP (C) Nos. 9834-9835 of 2020 andSLP (C) Nos. 9837-9838 of 2020 are thereby allowed.

27. A very disturbing feature of these appeals is the fact thatWBMDTCL, which is “State” within the meaning of Article 12 of theConstitution of India, has continued in unlawful possession of the PremisesEsince 15.08.1998 without paying a single pice towards compensation tilldate. Following the judgments of this Court, most notably, AssamSillimanite Ltd. v. Union of India, (1990) 3 SCC 182 (see paragraphs13 and 14) and Krishan Lal Arneja (supra), we appoint Shri SoumitraPal (Retd. Judge, High Court of Calcutta) as arbitrator to determineFcompensation that is payable by way of damages for occupation of thePremises without any authority of law. A written authority to appointsuch arbitrator is to be furnished to us immediately, i.e., within a weekfrom 23.02.2021. If not so furnished, WBMDTCL will be liable to pay asum of Rs. 100 per square foot, per month (being the average of therental amounts paid by other tenants in the same building since AugustG1998 as per the Valuation Report dated 30.11.2019 prepared by BanibrataMukherjee, Chartered Engineer, Engineer Commissioner & Valuer ofAlipore Judges’ Court) for the entire period of illegal occupation of thePremises within four months from the date of this judgment.

28. If written authority for appointment of the arbitrator is receivedHwithin time, the learned arbitrator is to proceed on a prima facie view of the case submitted to him by the parties to determine interim compensationpayable within a period of two months of entering upon the reference.This is owing to the fact that not a single pice has been paid for the last22 years for the illegal occupation of the Premises by WBMDTCL.Further, neither party is to take any adjournment before the arbitratorwithin this period of two months, so that the arbitrator can decide theinterim compensation that is to be paid. After such interim order, thelearned arbitrator will proceed to deliver a final award.

29. WBMDTCL has asked for reasonable time to vacate thepremises. However, in light of the fact that WBMDTCL has been inpossession of the Premises without any authority of law for the last 22years, we do not feel that it is justified to give time as prayed for, till theend of this year. Thus, we only grant time of four months from the dateof this judgment to vacate the Premises, conditional upon the responsibleofficer filing an undertaking before this Court, that they will vacate thePremises within four months and handover vacant possession of thePremises to the Appellant, and that the interim compensation, if orderedbefore such date, will be paid within the time stipulated by the arbitratorso appointed.

Civil Appeals @ SLP (C) Nos. 9837-9838 of 2020

30. In these appeals,[2] though no one appears on behalf of WestBengal Sugar Industries Development Corporation Ltd. [“WB SugarIndustries”], who have been in illegal occupation of a portion of thefifth floor of premises no. 13, Nellie Sengupta Sarani (Lindsay Street),Calcutta [“Fifth Floor Premises”], measuring approximately 1350square feet, the same directions apply qua WB Sugar Industries. Thus,WB Sugar Industriesis also to submit a written authority to appoint thearbitrator within a week from 23.02.2021, failing which they shall pay asum of Rs. 100 per square foot, per month, for the entire period of illegaloccupation of the Fifth Floor Premises, within four months from the dateof this judgment. Further, WB Sugar Industries is given four months tovacate the Fifth Floor Premises, upon the submission of an undertakingto vacate and handover vacant possession of the Fifth Floor Premises tothe Appellant, and to pay the interim compensation within the time to bestipulated by the arbitrator.

31. These appeals are disposed of accordingly.