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Petitioner: Raja MUHAMMAD AMIR AND 40 OTHERS VS Respondent: PROVINCE OF PUNJAB AND 2 JUDGMENT
Court Name: Lahore High Court Judge(s): Saad Saood Jan, Ghazanfar Ali Gondal Title:Raja MUHAMMAD AMIR AND 40 OTHERS vs PROVINCE OF PUNJAB AND 2
JUDGMENT
Reported As: PLD 1984 Lahore 295 Result: Appeal dismissed Judgment JUDGMENT ' GHAZANFAR ALI GONDAL, J.-This 1.-C. A. Is directed against the order dated 2-3-1983 of the learned Single Judge whereby Writ Petition No, 448 of 1982, filed by 41 residents of village Dandot against acquisition of their land was dismissed. 2. The facts of the case, relevant for the purpose of this appeal, are that State Cement Corporation of Pakistan Limited, a. Private limited. Company, wanted to set up a cement factory at Dandot, Tehsil Pind Dadan Khan, District Jhelum, with production capacity of 1,000 tons of cement a day. Necessity for the same arose on account of acute' shortage of cement in the. Country and also on account of National Cement Factory, Dandot (earlier kno.. n as Dalmia Cement Factory, and set up in 1941 with a production capacity of 250 tons of cement per day) having outlived its utility. Accordingly a notification dated 15-3-1979, issued by the Collector Jhelum District, Jhelum under section 4 of the Land Acquisition Act, 1894 (hereinafter to be called the Act) was published in the Punjab Gazette, dated 4-4-1979. Material portion of the said notification is as below :- "Whereas it appears to the Collector, Jhelum District that land is likely to be required to be taken up by. The Government at the expense of the State Cement Corporation of Pakistan Ltd., for its Dandot Cement Project for the purpose of construction and setting up of a cement factory, the manufacture of which shall be useful to the public, for the construction of roads quarrying and transportation of raw materials, installations connected with and necessary for running of the cement factory and for erection of the dwelling houses for the workers and other employees and for providing amenities to the workers and employees of the Project, it is hereby notified that land in the locality described below is likely to be required for the above purpose.
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3. It appears that the land required to be taken by virtue of this notification as amended by later corrigendum notifications whereby details of the land were corrected was 1,391 Kanals and 4 Marlas of village Dandot and some land of two other villages of .Tehsil Pind Dadan Khan, District Jhelum. On 9-9-1980, a sum of Rs, 4,80,465 was deposited by the State Cement Corporation Ltd., in the treasury in favour of the Land Acquisition Collector, Pind Dadan Khan, as probable cost of the said land. Subsequently, on 3-11-1980, the State Cement Corporation of Pakistan Ltd., entered into an agreement with the Governor of the Punjab. This agreement was published in the Punjab Gazette, dated 19-11-1980, in compliance with section 42 of the Act. Para. 3 of the said agreement reads as below "And whereas, the Government of Punjab being satisfied that the land is needed by the Corporation for its Dandot Cement Project for the purpose of construction and setting up a cement factory, the manufacture of which shall be useful to the public, construction of roads, quarrying and transportation of raw materials, installation connected with and necessary for the running of the cement factory and for the erection of dwelling houses for the workers and other employees and for providing amenities to the workers and employees of the project, has consented to acquire the land on 'iehalf of the Corporation." 4. Thereafter on 3-11-1980, a notification by the Commissioner, Rawalpindi Division, Rawalpindi, under section 17(4) and section 6 of the Act was issued and was published in the Punjab Gazette on 26-11-1980. Material portion of the said notification relevant for purpose of this case reads as below :- "Whereas it appears to the Commissioner, Rawalpindi Division, Rawalpindi that the land (hereinafter referred to as said land) specified in the notification under section 4 of the Land Acquisition Act, 1894, issued by the Collector, Jhelum District, Jhelum, on 15th March, 1979 published in the Government Gazette, dated 4th April, 1979, is required to be taken by the State Cement Corporation of Pakistan Limited, Dandot for its Cement Project at Dandot and setting up of Cement Factory, the manufacture of which shall be useful to the public, at their expenses for the said public purpose. (2) . (4) A declaration is also made under the provision of section 6 of the Land Acquisition Act, 1894, to all whom it may concern and under the provision of section 7 of the said Act, the Land Acquisition Collector Pind Dada Khan is hereby directed to take order for acquisition of the land." 5. On 22-4-1981, a notice under section 9(1) of the Act was issued by the Acquisition Collector, calling upon all the persons interested in the said land to make their claims to compensation for their interests in the said land. The residents of village Dandot agitated against the said acquisition of about 100 acres of their cultivable land on the ground that it was purely agricultural land on which their livelihood depended and it was being acquired for providing raw material of clay to Dandot Cement Project when alternate deposits of clay were available in the area. The stand of the State Cement Corporation of Pakistan Ltd., in reply was that 100 acres of land was required for a guaranteed supply of clay for the project for a period of 50 years which corresponded to the probable life of the plant intended to be installed. It was also submitted that the said 100 acres approximately of the said cultivable land of village Dandot, had been selected after necessary tests by Japanese experts and there was no other deposits of clay of required standard and of sufficient quantity available in the area. Representation of residents of Dandot village was rejected finally by order dated 25-4-1982 of the Member Board of Revenue on the ground that project had been prepared after due tests and after alternative sites had . Been technically examined and found deficient and not suitable. He also found that the total area being acquired from village. Dandot was about 173 (actually 172) acres out of which 108 acres were cultivated and remaining were ghair mumkin pahar. After the order of Board of Revenue, the Land Acquisition Collector
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published a notice in Daily Jang Rawalpindi, dated 26-5.1982, asking the ex-propriated land- owners to handover possession by 10th of July, 1982. The residents of the village Dandot, however, resisted the delivery of the possession and it was with the aid of the police that the possession was obtained on 16-8-1982. 6. Raja Muhammad Amir and 14 others, residents of village Dandot filed Writ Petition No, 448 of 1982, out of which present appeal has arisen, on 20th October, 1982. Later, many others joined them in the writ petition. However, out of them only 26 paid the court-fees for their individual reliefs and others who failed to do so were dropped out. There thus remained 41 persons as petitioners in the writ petition. The challenge by these 41 persons was confined only to acquisition of their culturable land for the purpose of supply of clay to the plant. It is, however, stated that the total holding of these 41 persons, out of a total area of about 100 acres of cultivated land acquired from village Dandot is 416 Kanals approximately. The main point raised in the writ petition was that the State Cement Corporation of Pakistan Ltd., was not a department of the Government but was a company within the meaning assigned to it in section 3(e) of the Act and, therefore, in order to lawfully acquire the said land for it, compliance with the procedure provided in Part VII of the Act had to be made and since this was lacking, the impugned acquisition was illegal. It was also contended that for procuring raw material of clay for the said company, the acquisition of said land was not warranted by clauses (a) and (b) of subsection (I) of section 40 of the Act which appeared to have been considered by the learned counsel filing the writ petition to be the only clauses available then in said subsection and for that reason it was submitted that there could never be any acquisition for obtaining raw material. 7. In written statement, .The State Cement Corporation of Pakistan Ltd., controverted the averments made in the writ petition. It was also pleaded therein that the State Cement Corporation was a concern of the Government of Pakistan and the whole of its authorised capital which came to 100 crores had been provided by the Government of Pakistan from public funds which includes foreign loan obtained by the Government of Pakistan from the Government of Japan. A certificate of a Joint Secretary in the Ministry of Production, Government of Pakistan, Islamabad, was appended to the written statement. It was to the effect that the State Cement Corporation of Pakistan (SCCP), a company registered under the Companies Act, 1913, was wholly owned and controlled by the Ministry of Production, Government of Pakistan, Islamabad, and that Dandot Cement Project, one of its Projects was wholly financed from the public funds including foreign loan. On these facts it was pleaded that the acquisition of land was not for a company simpliciter but for a public purpose although in the name of a company and since the whole of the cost of the acquisition was to be met from public funds, it was not necessary to comply with the procedure prescribed in Part VII of the Act. There was no specific averment in the written statement that provision under Part VII of the Act had actually been complied with although it was alleged in answer to ground No, 1 of the writ petition that acquisition proceedings were strictly, in accordance with law and objection regarding non-compliance with Part. VII of the Act was vague and did not state in what manner the provisions of Part VII of the Act had not been complied with. Nevertheless, documents showing compliance with Part VII, namely, issue of Gazette notification, dated 28-11-1980, containing agreement dated 3-11-1980 between the Governor of the Punjab and the State Cement Corporation of Pakistan (which also recited the consent having been given by the Commissioner of the Division to the said acquisition) was appended to the written statement as an annexure. So far as the second point is concerned, it was submitted in the written statement that land of village Dandot had not been acquired only for excavation of clay but for many other works too, namely, establishment of a labour colony and utility works, like road, water and electric supply systems etc. It was also contended that 100 acres of cultivable land of village Dandot had been selected for providing clay as raw material for the manufacture of cement and that the said tract of 100 acres
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of land bad beers selected after Japanese experts had carried out a thorough survey of qualitative and quantitative reserves of clay in the area and had approved the land in question as most suitable one available in the area. 8. At the hearing before the learned Single Judge, the first point, it appears, was amplified in arguments. It was submitted that when funds come from the Government and go to the company, they do not remain public funds any more as they become the funds of the company which is not a department of the Government and has its own individuality and if, therefore, the said funds are utilized by the company for the purpose of acquisition of land for it, payment cannot be said to have been made out of public funds which was a necessary condition for acquisition for public purposes as prescribed in section 6 of the Act and, therefore, acquisition being for a company, it was necessary to satisfy the conditions laid down in Part VII of the Act before land could be lawfully acquired. Reliance in this respect was placed on a decision of the Indian Supreme Court in State of Punjab and others v. Raja Ram and others (1), also reported in 1982 Pakistan Supreme Court Cases at page 997. It was maintained that since there had been no compliance with Part VII of the Act, therefore, the said acquisition was a nullity in the eye of law. It was additionally submitted at the hearing before the learned Single Judge that notification under section 4 and the agreement arrived at between the State Cement Corporation and Governor of the Punjab merely stated that, the land was needed by the State Cement Corporation for its Dandot Cement Project for the purpose of construction of a factory for cement, the manufacture of which would be useful to the public and .Not for public purposes and, therefore, the acquisition was not for a public purpose. As for the second point, it appears, learned counsel for the appellants-petitioners was pointed out that clause (aa) of subsection (1) of section 40 had been added in section 40 by means of West Pakistan Ordinance I of 1965 and that catered to the situation. The reply of the learned counsel, however, appeared to be that even the said clause did not cover the acquisition for the purpose of acquiring clay. 9. As for the main point raised in the writ petition, the learned Single Judge came to a finding of fact that the State Cement Corporation was a company owned and controlled by the Federal Government and the Dandot Cement Project was being financed by the Federal Government out of its own funds and for the public purpose and on this data held 'that the acquisition of said land was not for the benefit of company simpliciter but for public purpose and, therefore, compliance with the procedure prescribed in Part VII of the Act was not necessary. In coming to the above conclusion, the learned Single Judge observed that it was true that in view of the ratio laid down in State of Punjab and others v. Raja Ram and (1) AIR 1981 SC 1964 ' others, the respondent-Corporation could not be treated as a Government Department, but a Division Bench of this Court had in Khushi Muhammad v. Commissioner, Muitan Division etc. (1), taken a different view and bad drawn a distinction between acquisition of land for a company simpliciter and acquisition of land. For a company which was financed and controlled by the Government out of public funds. As regards the objection that the acquisition in question has been shown to be only useful for the public and not for the public purpose, learned Single Judge held that the factum of being useful for public was also for public purpose. He also held that the word 'works' in phrase industry or work as used in clause (aa) of section 40(1) of the Act meant works other than industrial works and had been used in its widest sense and would, therefore, include within its ambit the quarrying of clay deposits and due to that it was not possible for him to hold that quarrying of clay deposits was not covered by clause (aa) of subsection (1) of section 40 of the Act. On that basis he held that even if the provisions of Part VII of the Act had to be resorted to, to acquire land in dispute, the case was covered by section 40 of the Act (and there had been
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compliance with Part VII of the Act). On the basis of the above findings the learned Single Judge by his order dated 2-3-1983, dismissed the said writ petition. 10. In this Intra-Court Appeal, the same points, as raised before the learned Single Judge, have been urged. The particular emphasis has, however, been laid by the learned counsel for the appellants on the circumstance that as shown in notification under section 4, acquisition in question was being made at the expense of the State Cement Corporation of Pakistan which was not a department of Government of Pakistan and had its own individuality and public funds which came into its hand became funds of the Corporation and, therefore, the essential condition of payment of cost of acquisition from . Public funds had not been complied with and payment being from the funds of the company, it was acquisition for a company and, therefore, compliance with provisions made under Part VII of the Act was essential for lawful acquisition of said land and this not having been done, the acquisition was wholly without lawful authority. For this, the said case from Supreme Court of India was strongly relied upon. It is also 'reiterated that acquisition of land for the purpose of quarrying clay deposits from cultivable land of appellants to feed the cement factory did not fall under any of the clauses of subsection (1) of section 40 of the Act and, therefore, no consent could be given by Commistioner under section 39 of the Act nor any agreements could have been entered into by the State Cement Corporation of Pakistan with the Governor of the Punjab and, therefore, there being no proper compliance with provisions made in Part VII of the Act, the acquisition was illegal. Learned counsel for the respondents has, ho Never, submitted in reply that learned Single Judge was bound by the decision in Khushi Muhammad's case and that the view taken in that case was sound in law and should, therefore, be followed by this Bench as well and that in any case there had been full compliance with the procedure laid down in Part VII of the Act as the acquisition of land for the purpose of quarrying clay deposits to feed the cement factory fell under clause (aa) of section 40 of the Act and respondent-Company had entered into the required agreement with the Punjab Government after the necessary satisfaction of and consent to said acquisition by the Commissioner of Rawalpindi Division. He has, therefore, submitted that this appeal should, for the said reasons, be dismissed. 11. We would like to take the second pint first and would scrutinize as to whether in acquiring the said land there has been a ptoper compliance (1) PLD 1965 Lah. 250 with the provisions made in Part VII of the Act. The quarrying of clay deposits for the purpose of cement factory is obviously not covered be clause (a) of subsection (1) of section 40 of the Act, as the same is restricted to acquisition of land for erection of dwelling houses for workers employee by a company or for provision of amenities directly connected therewith. Clause (b) is also inapplicable as the said clause is confined to acquisition of land for a company which is needed by it for the construction of some work and that work is basically meant for the advancement of interest of shareholders of the company but is also likely to prove useful to to public as for example construction of a bridge or water supply system or giving training to certain classes of persons. This clause is, on the face of it, respect of a company other than a company engaged in a work or industry which is for a public purpose. Clause (aa), however, is in respect of a company which is engaged in or is taking steps for engaging itself in an industry or work which is for a public purpose and the acquisition of land is needed for the construction of some work for it. The respondent State Cement Corporation of Pakistan was undoubtedly making efforts for engaging itself and has now got itself actually engaged in the industry of producing cement. In the notification under section 4 and in the agreement it was stated that setting up of a cement factory was likely to be useful to public. The words useful to public have been used here as synonym for a public purpose. In the notification under section 6, apart from saying that manufacture of cement shall be useful to the public, it has been expressly declared that it would be for public purpose which declaration is conclusive under section 6(3) of the Act. Even otherwise, it is clear that in these day of extreme shortage of cement,
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setting up of a cement factory for production of cement is a national need and is obviously for public purpose The said company needs the work of establishing a quarry to excavate clay deposits to feed the cement plant for the preparation of cement as the said clay is an indispensible ingredient of the cement to be produced be the plant installed at the Dandot Cement Project. We are also clear in our mind that the word 'work' in the expression building or work as used in clause (aa) of subsection (1) of section 40 of the Act is not confined to work of industrial nature and has a much wider meaning and it embrace within its ambit setting up of a quarry for excavation of clay to provid the same to the said cement factory. The acquisition of land for the purpose of quarrying clay deposits, therefore, clearly falls within clause (aa) of sub section (1) of section 40 of the Act. The consent of the Commissioner having, therefore, been properly obtained and agreement between the Governor of the Punjab and the company having been validly arrived at, it cannot be said that there was no compliance or no proper compliance with provision of Part VII of the Act. The acquisition of said land for the purpose of to said company was, therefore, made after full satisfaction of conditions laid down in Part VII of the Act and accordingly the said acquisition was perfectly in order and was unexceptionable. 12. The above finding clinches the matter and concludes this appeal and renders it liable to be dismissed straightaway and we would have dismissed it on this sole ground, but for the extensive .Arguments advanced before us on the other point viz. That though the acquisition in question was for a public purpose' and. Though costs of acquisition of land had originally been paid by the Federal Government from public funds, the said funds had lost their character as public funds when they came into the hands of the company and had been paid by the company towards the cost of acquisition as its own money and, therefore, in consonance with the Spirit of section 6 of the Act, compliance with Part VII of the Act was necessary. We 'think in view of the time and energy spent in arguing this point by the learned counsel for the parties and in our giving anxious thought to the said arguments and also on account of the general judicial disinclination for fragmentary decisions, we should proceed to determine this point as well. 13. The learned Single Judge has rejected the said point on the basis of law laid down in case of Khushi Muhammad v. Commissioner, Multan Division etc. In that case, one-third capital of Sui Northern Gas Pipelines Limited had been subscribed by the Government of Pakistan out of public revenue and a loan in the sum of 6 crores 32 lacs had been advanced to finance the said company which had to lay the gas pipeline from Multan to Northern areas to supply sui gas to the said areas. The said investment was made because gas was urgently needed in-Northern region of Province of West Pakistan and for that reason it was mentioned in the notification under section 4, that land is required for a public purpose. On this data, it was held that acquisition in that case was for a public purpose to be executed by a company. Within the purview of section 6 of the Act and accordingly compliance with Part VII of the Act was not necessary and, therefore, provisions of section 17(4) were properly invoked to dispense with application of sections 5 and 5-A of the Act before execution of agreement as required by section 39 of the Act. It was also held that if the acquisition had been for the benefit of a company simpliciter, Commissioner would have been incompetent to dispense with the provisions of sections 5 and 5-A before execution of agreement under section 39 of the Act. It is notable that though the dictum laid down in this case apparently is that it is only in case of acquisition of land for a company for a public purpose that the provisions of Part VII of the Act would be inapplicable, from the description of the circumstance that 1/3rd of the share capital of the company had been furnished by Government of Pakistan, what actually appears to have been laid down in the said case is that where acquisition of land is for a public purpose and even a part of the cost of the acquisition is met by public funds, it is not necessary to go through the procedure prescribed by Part VII of the Act: The support for the view taken in the said case was obtained from the observations made in Jhandu Lai etc. v. State of Punjab etc. (1)
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and Somawanti etc. v. State of Punjab etc. (2). The case of Jhandu Lai of Punjab High Court was appealed against . And the final decision was given by the Supreme Court of India in Jhandu Lal v. The State of Punjab (3). Dispute in that case was in respect of acquisition of land for public purpose, namely, for construction of a Labour Colony under the Government-sponsored Housing Scheme for the Industrial. Workers of the Thapar Industrial Workers Co-operative Housing Society Limited, in which a notification under section 17(4) was issued dispensing with the provision of section 5-A of…
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