(Reported as LACC 1992 KAR 478 = 1991(2) KLJ 608 )

( Note : Both presiding judges are members of KSJDEHBCSL Society & in most cases Advocate Mr. T.S.Ramachandra has appeared )

KARNATAKA HIGH COURT
( Division Bench )

Before: S . Mohan, C. J. and N. Y. Hunumanthappa, J.
Writ Appeal No. 1236 of 1991
Decided on 10 June 1991

Karnataka Power Corporation Employees' Co-operative Housing Society Ltd., Bangalore
Vs
State of Karnataka and another .. Respondents

For the Appellant :- Mr. T. S. Ramachandra, Advocate.

(A) Land Acquisition Act, 1894, Sections (1) and 48 - Withdrawal from acquisition - Acquisition of land for a society who agreed to pay the cost of acquisition - A part of the cost of acquisition deposited - Notification under Section 4 issued by the Government - Final notification under Section 6 not issued - possession of land not taken - Appellant's plea of application of principle of promissory estoppel rejected.

The contention of the appellant, if accepted, would clearly militate against the statutory provisions of Section 48 of the Act. That power of the Government cannot in any way be curtailed by invoking the doctrine of promissory stopped. (para - 10 )

Therefore, how can the appellant contend that doctrine of Promissory estoppel would apply ? Equally it is not open to be appellant to say that it and to its detriment. There is no question of its acting to the detriment because when once acquisition has not gone through, it is restored to its old position. It is always open to the appellant to seek return of Rs. 10.00 lakhs. Of course, is pointed out it has paid Rs. 42.00 lakhs to the land owners. That will have no bearing as far as acquisition is concerned. On this score, it is not open to the appellant to say that it acted to its detriment. The agreement dated 28-04-1988 was nothing more than to undertake payment of compensation by the appellant - society for whose benefidands are acquired. (Para - 11)

(B) Land Acquisition Act, 1894 - A codified legislation embodying the doctrine of eminent domain - Power of acquiring a sovereign power of the State Principle of promissory estoppel has no bearing.

Cases referred to :

(1) Union of India v. Godfrey Phillips India Ltd, AIR 1986 SC 806.
(2) Chandra Banri Sing v. State of Bihar, AIR 1984 SC 1767.
(3) Jett Ram v. State of Haryana, (1980) 3 SCR 689.
(4) Motilal Sugar Mill's case, AIR 1979 SC 621.
(5) Somawanti v. State of Punjab. AIR 1963 SC 151.                                                                 

JUDGMENT

S. Mohan, C.J. - The important question that arises for our consideration in this case is, whether the principle of Promissory estoppel would apply so as to compel the Government to acquire certain lands.

(2) The brief facts of the case are as follows:

The appellant herein selected certain lands in Cholanaikanahalli and Nagwara villagers. This was with a view to form a layout in the lands which had been shown in the comprehensive development plan for residential purposes. The appellant advanced a the of Rs. 42.00 lakhs to the land owners. But it could not purchase the lands from the land owners on account of the restrictions placed for purchase of lands by the society. Therefore, the appellant approached the Government and made request to acquire the lands. By letter dated 02-04-1986 a direction was issued by the Secretary, Revenue Department. Government of Karnataka, Bangalore, to the Special Deputy Commissioner, Bangalore District, to proceed with Section 4 (1) Notification under the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act') in respect of the lands measuring 46 acres 37 guntas in these two villages in favour of the appellant after the case is cleared by the three Men Commissioner and after the recommendations of the Committee are considered by Government . Thereafter 28th April, 1988, an agreement was entered into between the society on one hand and the Government having caused inquiry to be made in conformity with the provisions of the Act and being satisfied that the lands are required for public purpose, it was proposed to the acquired for the benefit to the society members subject to certain conditions .

Inter alia the conditions provided that it shall be the entire responsibility of the society to pay the cost of acquisition and that the lands shall not be used for the purpose other than for which they are acquired,

After the agreement was entered into, preliminary Notification under Section 4 (1) of the Act was issued on 12-01-1989 Thereupon a sum of Rs. 10.00 lakha was deposited towards the cost of acquisition by the appellant, it is also stated by the appellant that during enquiry under Section 5-A of the Act, none of the land owners objected to the acquisition . However, notwithstanding this, the Government did not further proceed with the acquisition and issue final declaration under Section 6 of the Act. Therefore, it became necessary on the part of the appellant to request the Government by repeated reminders. They were of no avail. It was under these circumstances, the Society came forward W.P No. 26357/90 for a direction to the first respondent, viz., State Karanataka, to made a declaration under Section 6 (1) of the Act and to declare that the 1st respondent had no right to abandon acquisition in view of the application of the doctrine of promissory estoppel .

( 3 ) The matter came up before our learned brother Rajendra Babu. J. who by his Judgment dated

03-01-1991 held that the power of acquiring file lands by the Government arise under the doctrine of eminent domain which is the sovereign power of the State. To such cases the principle of promissory estoppel may not have any bearing. Accordingly he dismissed the writ satiation. Hence, this appeal.

( 4 ) Sri T. S. Ramachandra, learned counsel for the appellant, strenuously urges that this is a clear case in which the principle of promissory estopple would apply for the following reasons:

When the appellant would not purchase the lands from the land owners, it approached that Government and the Government not only satisfied itself that the lands are required for a public purpose but also issued S. 4(1) Notification. Thereafter, in pursuance of the agreement dt. 28-04-1988 entered into between the Appellant and the Government a sum of Rs. 10.00 lakhs was deposited by the appellant. Therefore, the principle of promissory estoppel would Ltd. AIR 1986 SC 806, would squarely apply to this case.

No doubt there is power under S. 48 of the Act to withdraw the acquisition proceedings at any stage prior to taking possession, but that power is not an absolute power. In support of this the learned counsel relied upon the decision of Chandra Bansi singh v. State of Bihar, AIR 1984 SC 1767.

These are the two submissions made by the learned counsel for the appellant, we will not proceed to consider them.

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(5) The Land Acquisition Act, 1894 is nothing more than a codified legislation embodying the doctrine of eminent domain It cannot be denied and rather it is settled in law, such a power is sovereign in its character. In other words, it is an attribute of sovereign power.

(6) The sine qua non for acquisition of land is what is known as public purpose. Though originally the Act did not contain the definition of public purpose or what purpose will constitute to the public purpose, later on the Amendment Act 68 of 1984, it came to be defined.

(7) Acquisition can be under two parts: (1) Part-II and (2) Part VII. Where it is for public purpose, Part-II applies. Where the acquisition is for a Company or for a Co-operative Society, Part VII applies. In deciding whether the acquisition is under which of these two parts, the test is, whether the State has contributed for the purpose of acquisition from the public coffer. As a matter of fact, in saying this dictum, in Somawanti v. State of Punjab, AIR 1963 SC151, it was held that though the cost of acquisition was huge when only RS. 100/- was contributed, that was held to be sufficient contribute in to enable the Government to acquire under Part-II. It is also settled law that even for a Company or Society as defined under S. 3(e) of the Act, acquisition could be under Part-II and need not be under Part-VII. However, where Government requires the entire compensation to come out from the beneficiaries of the acquisition as in the instant case, it requires the beneficiary or the Company to bear the entire cost of acquisition. For the purpose, the agreement was entered into That would clearly come under Part-VII. In Somawant's case (supper), it has been held that Notification under S. 4 (1) it purely preliminary in neuter and administrative in character. In other words, there is no right that flows in favour of the parties at the stage of preliminary notification. It is only after a statutory enquiry under

S. 5-A and if the Government is further satisfied that the acquisition is for public purpose, it could issue declaration under S. 6. The very ruling makes it clear that such a declaration is final and conclusive both with regard to public purpose as well as the extent of land to be acquired. In fact this position is abundantly made clear by s. 6(3) of the Act. Thereafter, notice is issued under S. 9(3) read with S.10 of the Act for measuring the land. It is only after the possession is taken under S.16, the property shall thereupon vest with the Government free from all encumbrances, acquisition becomes final. This is the pattern of acquisition contemplated under the provision of the Act.

(8) However, for our purpose, S. 48 of the Act is important. We may now reproduce that Section.

" 48. Completion of acquisition not compulsory but compensation to be awarded when not completed :-

(1) Except in the case provided for in Section 36, the Government shall be at liberty to withdraw from the acquisition of any land of which possession has not been taken.

(2) Wherever the Government withdraws from any such acquisition, the Collector shall determine the amount of compensation due for the damage suffered by the owner in consequence of the notice or of any proceedings thereunder and shall pay such amount to the person interested, together with all costs reasonable incurred by him in the prosecution of the proceedings under this Act relating to the said land.

(3) The provisions of Part-III of this Act shall apply, so far as may be to the determination of the compensation payable under this Section."

From a reading of the above Section, it is clear that at any time before possession is taken, it is open to the Government to withdraw from the acquisition. Of course, it is a different matter if the withdrawal is for collateral purpose, about which we will deal with later.

(9) In this case, what the appellant is contending is that it approached the landowners to purchase the lands. Having regard to certain statutory difficulties, it being a Co-operative Society, was not able to purchase the property, requested the machinery of eminent demean that acquisition be part in motion. The government being satisfied that it is for public purpose, issued preliminary notification of

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12-01-1989 . By this preliminary notification under S. 4(1) of the Act, no right incurred in favour of the appellant-Society. Be that so. Prior to that, the Society entered into an agreement with the Government on 28-04-1988 and agreed to bear the costs of acquisition. In other words, the Government wanted that cost to be borne by the Society. But, for reason best known to it, the Government did not go on with the acquisition for which purpose agreement was entered into between the society and the Government. The question then is, whether promissory estoppel would apply. As to what exactly would constitute promissory estoppel can be gathered from the ruling in Union of India v. Godfrey Phillips India Ltd, AIR 1986 SC 806. At paras 12 and 14, it has been held thus :

"12. There can therefore be no doubt that the doctrine of promissory estoppel is applicable against the Government in the exercise of its governmental, public or executive functions and the doctrine of executive necessity or freedom of future executive action cannot be invoked to defeat the applicability of the doctrine of promissory estoppel. We must concede that the subsequent decision of this Court in Jeet Ram v. State of Haryana, (1980) 3 SCR 689, takes a slightly different view and holds that the doctrine of promissory estoppel is not available against the exercise of executive functions of the State and the State cannot be prevented from exercising its functions under the law . This decision also expresses its disagreement with the observations made in Motilal Sugar Mill's case, AIR 1979 SC 621, that the doctrine of promissory estoppel cannot be defeated by invoking the defence of executive necessity suggesting by necessary implication that the doctrine of executive necessity is available to the Government to escape its obligation under the doctrine of promissory estoppel . We find it difficult to understand how a Bench of two Judges in Jeet Ram's case could possibly overturn or disagree with what was said by another Bench of two Judges in Motilal Sugar Mills case. If the Bench of two Judges in Jeet Ram's case found themselves unable to agree withlaw laid down in Motilal Suar Mills case, they could have referred Jeet Ram's case to a larger Bench, but we do not think it was right on their part to express their disagreement with the enunciation of the law by a co-ordinate Bench of the same Court to Motilal Sugar Mills .

(13) xxxxxxxx xxxxxx xxxxxxxx xxxxxxx xxxxxxxx

(14) Of course we must make it clear, and that is also laid down in Motilal Sugar Mills case, AIR 1979 SC 621 (supra) that there can be no promissory estoppel against the legislature in the exercise of its legislative functions non can the Government or public authority be debarred by promissory estoppel from enforcing a statutory prohibition it is equally true the promissory estoppel cannot be used to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make. We may also point out that the doctrine of promissory estoppel being an equitable doctrine, it must yield when the equity so requires, if it can be shown by the Government or public authority that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the person to whom the promise or representation in made and enforce the promise of representation against the Government or public authority. The doctrine of promissory estoppel would be displace in such a case, because on the facts, equity would not aquire that the Government or public authority should be held bond by the promise or representation made by it. This aspect has been dealt with fully in Motilal Sugar Mills case (supra) and we find ourselves wholly is agreement with what has been said in that decision on this point."

(10) We are afraid that this decision has no application whatsoever. As we painted out earlier, the contention of the appellant, if accepted, would clearly militate against the statutory provisions of Section 48 of the Act That power of the Government cannot in any way be curtailed by invoking the doctrine of promissory estoppel.

(11) The Land Acquisition Act itself provides in clear terms as to when it will become impossible for the Government to withdraw under S. 48. Is other words, so long as possession has not been taken, it would be open to it, to do so. In this case there is not even the final declaration under Section.6 of the Act. The question of taking possession arises only after final declaration under Section 6 of the Act is issued and after following the remaining procedure award is passed. Therefore, how can be appellant contend that doctrine of promissory Estoppel would apply ? Equally it is not open to the appellant to say that it acted to its detriment. There is no question of its acting to the detriment because when once acquisition has not gone through, it is restored to its old position. It is always open to the appellant to seek return of Rs. 10.00 lakhs. Of course as pointed out, it has paid Rs. 42.00 lakhs to the land owners That will have no bearing as far as acquisition if concerned. On this score, it is not open to the appellant to say that it acted to its detriment. The agreement dated 08-04-1988 was nothing more than to under take payment of compensation by the appellant society for whose benefit lands are acquired.

(12) The power of withdrawal cannot be circumscribed by any of the consideration which can be illustrated this way. Supposing a small portion of two cents of land is acquired from a poor farmer for an avowed purpose of building a public library. Thereafter before taking possession, Government comes to the view that the acquisition would be highly detrimental and other lands are available for public library, is it not open to the Government to withdraw ? That means Section 49 itself is rendered otiose. It is exactly this which the appellant wants us to accept. We find neither reason justice to hold that promissory estoppel would apply. This is the answer for point No.1.

(13) As regards acquisition being tainted with mala fides to favour one or more individual's we have the decision in Chandra Bansi Singh v. State of Bihar, 1984 SC 1767. That was a case in which withdrawal of a portion of land in question was held to favour a few. The said decision does not help the appellant in any manner.

(14) For these reasons, after having given our careful consideration, we find absolutely impossible to apply the doctrine of promissory estoppel to the case arising under the Land Acquisition Act which if which if accepted, would militate against the power of the Government under Section 48 of the Act.

Accordingly we concur with the learned singly Judge and dismiss this writ appeal.

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Appeal dismissed.