Supreme Court on Requisitioned Property: Punalur Paper Mills vs. West Bengal Mineral Development (2021)

Date of the Judgment: 01 March 2021

Citation: 2021 INSC 128

Judges: R.F. Nariman, J., B.R. Gavai, J.

Can a government invoke urgency provisions to acquire land after the initial requisition period has ended, especially when there has been a significant delay? The Supreme Court of India addressed this critical question in a case involving Punalur Paper Mills Ltd. and the West Bengal Mineral Development and Trading Corporation Ltd. The core issue revolved around the legality of acquiring property under the Land Acquisition Act, 1894, after the initial requisition period had lapsed under the West Bengal Premises Requisition And Control (Temporary Provisions) Act, 1947. This case highlights the importance of timely action by the state in land acquisition matters and the protection of property rights. The judgment was delivered by a bench comprising Justice R.F. Nariman and Justice B.R. Gavai.

Case Background

The case involves a property owned by Punalur Paper Mills Ltd. (the Appellant), located at 13, Nellie Sengupta Sarani (Lindsay Street), Calcutta. The entire second floor of this property, measuring approximately 7500 square feet, was requisitioned by the State of West Bengal on 16 August 1973, under the West Bengal Premises Requisition And Control (Temporary Provisions) Act, 1947. The West Bengal Mineral Development and Trading Corporation Ltd. (WBMDTCL) occupied the premises.

Section 10B of the West Bengal Requisition Act, inserted on 31 March 1987, mandated that requisitioned properties be released within 25 years of the requisition date. For the Appellant’s property, this period ended on 15 August 1998. However, the property was not released, and WBMDTCL continued to occupy it.

Subsequently, on 12 August 1999, the State issued a notification under Section 4 of the Land Acquisition Act, 1894, to acquire the property for WBMDTCL’s permanent office. This notification was challenged by the Appellant in the High Court of Calcutta. The Appellant also filed a writ petition seeking the handover of vacant possession, given the expiry of the 25-year requisition period.

Without pursuing the initial notification, a new notification was issued on 4 August 2000, under Section 4 of the Land Acquisition Act, invoking the urgency provision under Section 17(4). This notification, along with a subsequent declaration under Section 6 of the Land Acquisition Act on 11 August 2000, was also challenged by the Appellant.

Timeline

Course of Proceedings

Initially, a Single Judge of the High Court of Calcutta, in Writ Petition No. 1042 of 2000, ordered WBMDTCL to vacate the premises within three months, while keeping the matter alive to determine compensation for the period of occupation after the requisition period. On the same day, in Writ Petition No. 1045 of 2000, the interim order was vacated.

Subsequently, a Single Judge, on 16 January 2017, struck down the composite notification under Section 4 read with Section 17 of the Land Acquisition Act, dated 4 August 2000, noting that the urgency provision was wrongly invoked. The Single Judge directed WBMDTCL to vacate the premises within three months.

On appeal, the Single Judge’s judgment was set aside by consent of the parties, and a de novo hearing was ordered. The Division Bench of the High Court of Calcutta then heard the writ petitions de novo and passed the impugned judgment on 30 September 2019.

Legal Framework

The primary legal frameworks in this case are the West Bengal Premises Requisition And Control (Temporary Provisions) Act, 1947, and the Land Acquisition Act, 1894.

Section 10B of the West Bengal Requisition Act states:

“Notwithstanding anything contained in section 10 or section 10A, the State Government shall release from requisition any property requisitioned or deemed to be requisitioned under this Act on or before the expiry of a period of twenty-five years from the date of such requisition: Provided that the benefit of this section shall not be available until after the expiry of a period of five years from the date of coming into force of the West Bengal Premises Requisition and Control (Temporary Provisions) (Second Amendment) Act, 1986.”

This section mandates the release of requisitioned property after 25 years.

The Land Acquisition Act, 1894, allows the government to acquire land for public purposes. Section 4 provides for the publication of a preliminary notification, while Section 5A grants the right to file objections against the acquisition. Section 17 allows the government to invoke urgency provisions, dispensing with the inquiry under Section 5A.

Arguments

Appellant’s Arguments:

• The Appellant argued that the State was obligated to release the property after 25 years as per Section 10B of the West Bengal Requisition Act.
• The Appellant contended that the urgency provision under Section 17 of the Land Acquisition Act was improperly invoked, especially since the State had initially proceeded with a normal acquisition process.
• The Appellant highlighted the State’s failure to vacate the premises after the requisition period, and their continued unauthorized possession without paying compensation.
• The Appellant argued that the order of the Single Judge dated 22.06.2000 could not be used to justify the invocation of the urgency provision under Section 17 of the Land Acquisition Act.

Respondent’s Arguments (State of West Bengal):

• The State argued that the Single Judge’s order of 22 June 2000, allowed them to take steps to initiate land acquisition proceedings.
• The State contended that the notification under Section 4 read with Section 17 of the Land Acquisition Act, was a direct result of the order dated 22.06.2000.
• The State relied on the judgments in State of U.P. v. Keshav Prasad Singh, (1995) 5 SCC 587 and State of A.P. v. Goverdhanlal Pitti, (2003) 4 SCC 739 to support their position that the acquisition was valid.

Sub-Submissions Categorized by Main Submissions:

Issues Framed by the Supreme Court

The Division Bench of the High Court framed the following issues:

1. After the expiry of 25 years from the date of requisition, were the appellants liable to vacate the requisitioned property?
2. Is the writ petitioner entitled to any compensation for WBMDTCL having overstayed at the said property after the expiry of 25 years?
3. Could the respondents acquire the property by applying the special powers in case of urgency under Section 17 of the Land Acquisition Act, particularly when they had proceeded to acquire the property by following the normal method and had given a notice under Section 4 on 12 August 1999?
4. Could the right of objection available to the writ petitioner be taken away in the facts and circumstances of the case?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Cases:

• State of U.P. v. Keshav Prasad Singh, (1995) 5 SCC 587 – The Court distinguished this case, stating that it involved a genuine urgency of complying with a mandatory injunction by a Civil Court.
• State of A.P. v. Goverdhanlal Pitti, (2003) 4 SCC 739 – The Court distinguished this case, noting that it involved a situation where the State had lost in eviction proceedings and the public purpose was already being served.
• Banwarilal & Sons Pvt. Ltd. v. Union of India, 1991 Supp DRJ 317 (Delhi HC) – The Court relied on this case, where a similar notification was quashed for improper invocation of urgency provisions.
• Union of India v. Shakuntala Gupta, (2002) 10 SCC 694 – The Court confirmed the judgment in Banwarilal (Delhi HC).
• Union of India v. Shakuntala Gupta, (2002) 7 SCC 98 – The Court dismissed the review petition on merits, reaffirming the decision in Banwarilal (Delhi HC).
• Union of India v. Krishan Lal Arneja, (2004) 8 SCC 453 – The Court relied on this case, which held that urgency provisions cannot be used to cover up laxity or lethargy on the part of the State.
• Assam Sillimanite Ltd. v. Union of India, (1990) 3 SCC 182 – The Court used this case to justify the appointment of an arbitrator for determining compensation.
• State of Punjab v. Gurdial Singh, (1980) 2 SCC 471 – The Court referred to this case regarding the use of emergency power under Section 17 of the Act.
• Om Prakash v. State of U.P., (1998) 6 SCC 1 – The Court referred to this case regarding inquiry under Section 5A as having a flavour of fundamental rights.
• Narayan Govind Gavate v. State of Maharashtra, (1977) 1 SCC 133 – The Court referred to this case regarding the need to consider the urgency to dispense with an inquiry under Section 5A.

Legal Provisions:

• Section 10B of the West Bengal Premises Requisition And Control (Temporary Provisions) Act, 1947 – Mandates the release of requisitioned property after 25 years.
• Section 4 of the Land Acquisition Act, 1894 – Provides for the publication of a preliminary notification for land acquisition.
• Section 5A of the Land Acquisition Act, 1894 – Grants the right to file objections against the acquisition.
• Section 17 of the Land Acquisition Act, 1894 – Allows the government to invoke urgency provisions, dispensing with the inquiry under Section 5A.
• Section 11(1)(b) of the West Bengal Requisition Act – Provides for appointment of a District Judge as arbitrator for fixing compensation.

Table of Authorities and Their Treatment by the Court:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• State of U.P. v. Keshav Prasad Singh [CITATION] and State of A.P. v. Goverdhanlal Pitti [CITATION]: The Court distinguished these cases, stating they involved unique circumstances not applicable to the present case.
• Banwarilal & Sons Pvt. Ltd. v. Union of India [CITATION]: The Court relied on this case, which quashed a similar notification for improper invocation of urgency provisions.
• Union of India v. Shakuntala Gupta [CITATION]: The Court confirmed the judgment in Banwarilal & Sons Pvt. Ltd. v. Union of India.
• Union of India v. Krishan Lal Arneja [CITATION]: The Court relied on this case, which held that urgency provisions cannot be used to cover up laxity or lethargy on the part of the State.
• Assam Sillimanite Ltd. v. Union of India [CITATION]: The Court used this case to justify the appointment of an arbitrator for determining compensation.
• State of Punjab v. Gurdial Singh [CITATION]: The Court referred to this case regarding the use of emergency power under Section 17 of the Act.
• Om Prakash v. State of U.P. [CITATION]: The Court referred to this case regarding inquiry under Section 5A as having a flavour of fundamental rights.
• Narayan Govind Gavate v. State of Maharashtra [CITATION]: The Court referred to this case regarding the need to consider the urgency to dispense with an inquiry under Section 5A.

The Supreme Court held that the State’s invocation of the urgency provision under Section 17 of the Land Acquisition Act was not justified. The Court emphasized that the State was aware of the 25-year limit under Section 10B of the West Bengal Requisition Act and had ample time to initiate acquisition proceedings before the deadline. The Court noted that the State had initially proceeded with a normal acquisition process, indicating that there was no real urgency. The Court also rejected the State’s argument that the Single Judge’s order of 22 June 2000, justified the invocation of the urgency provision, stating that the order could only refer to the acquisition proceedings already initiated by the notification of 12 August 1999.

The Court also held that the State’s continued occupation of the premises without paying compensation was unlawful. The Court set aside the Division Bench’s judgment to the extent that it directed the District Judge to assess compensation under Section 11(1)(b) of the West Bengal Requisition Act, as this provision applies only to compensation during the requisition period and not after the requisition period ends. The Court appointed a retired Judge of the High Court of Calcutta as an arbitrator to determine the compensation for illegal occupation.

The Court observed that WBMDTCL, being a state entity, had acted unlawfully by continuing in possession of the premises without paying compensation. The Court directed WBMDTCL to vacate the premises within four months, conditional on filing an undertaking to vacate and pay the interim compensation as determined by the arbitrator.

The Court also gave similar directions for WB Sugar Industries, which was in illegal occupation of another portion of the premises.

“A very disturbing feature of these appeals is the fact that WBMDTCL, which is “State” within the meaning of Article 12 of the Constitution of India, has continued in unlawful possession of the Premises since 15.08.1998 without paying a single pice towards compensation till date.”

“The impugned judgment of the Division Bench is fortified by several judgments.”

“The mind of the officer or authority concerned has to be applied to the question whether there is an urgency of such a nature that even the summary proceedings under Section 5-A of the Act should be eliminated.”

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Lethargy of the State: The Court emphasized that the State had ample time to initiate acquisition proceedings before the expiry of the 25-year requisition period. The invocation of urgency provisions was seen as a way to cover up the State’s inaction.
• Protection of Property Rights: The Court highlighted the importance of protecting the property rights of individuals, and that the State cannot take away the right of objection under Section 5A of the Land Acquisition Act without valid reasons.
• Unlawful Occupation: The Court was disturbed by the fact that WBMDTCL, a state entity, had continued to occupy the premises without any legal authority and without paying compensation.
• Adherence to Legal Procedures: The Court stressed the need for the State to adhere to legal procedures while acquiring land and not to misuse the urgency provisions.

Sentiment Analysis of Reasons Given by the Supreme Court:

Final Decision

The Supreme Court allowed the appeals and set aside the judgment of the Division Bench of the High Court. The Court held that:

• The invocation of the urgency provision under Section 17 of the Land Acquisition Act was invalid.
• The State was obligated to release the property after 25 years, as mandated by Section 10B of the West Bengal Requisition Act.
• The State’s continued occupation of the premises after the requisition period was unlawful.
• The writ petitioner was entitled to compensation for the period of illegal occupation.

Orders:

• The Court appointed a retired Judge of the High Court of Calcutta as an arbitrator to determine the compensation for illegal occupation.
• WBMDTCL and WB Sugar Industries were directed to vacate the premises within four months, subject to filing an undertaking to vacate and pay the interim compensation as determined by the arbitrator.

Implications

This judgment has significant implications for land acquisition laws and the rights of property owners:

• Limitations on Urgency Provisions: The judgment clarifies that urgency provisions under the Land Acquisition Act cannot be invoked to cover up the State’s lethargy or inaction. The State must demonstrate a genuine urgency to dispense with the inquiry under Section 5A.
• Protection of Property Rights: The judgment reinforces the importance of protecting the property rights of individuals. The State cannot continue to occupy requisitioned property after the requisition period has expired, and must pay compensation for any illegal occupation.
• Timely Action by the State: The judgment underscores the need for the State to act promptly in land acquisition matters. The State cannot delay acquisition proceedings and then invoke urgency provisions to circumvent legal requirements.
• Arbitration for Compensation: The judgment highlights the use of arbitration to determine compensation for illegal occupation, especially when the statutory provisions for compensation are not applicable.

Key Takeaways

• The State cannot invoke urgency provisions under Section 17 of the Land Acquisition Act to acquire property that was previously requisitioned after the requisition period has expired, especially when there is no genuine urgency.
• The State must release requisitioned property after the expiry of the requisition period as mandated by law.
• The State is liable to pay compensation for any illegal occupation of property after the requisition period.
• The right of objection under Section 5A of the Land Acquisition Act is a crucial safeguard for property owners and cannot be taken away without valid reasons.
• The State must act diligently and within the bounds of the law when acquiring property.