M. N. CHANDURKAR (C J)


The appellant-petitioner, whose land is being acquired by the issue of a declaration under S.6, Land Acquisition Act, is challenging the declaration under S.6(1), Land Acquisition Act, 1894, (hereinafter referred to as the Act) on grounds which we shall presently state. However, in order to appreciate the contentions raised before us and originally raised in the writ petition under Art. 226 of the Constitution, it is necessary to refer to certain facts on which the appellant claims a relief of quashing the declaration under S.6 of the Act dt. 3-12-1983. The land in question was taken on lease by respondent 1 which is a Public Transport Corporation for a period of five years from 1-4-1974. In pursuance of certain arrangements, which according to the appellant, were arrived at between the landowner and the Corporation, the Corporation was to pay an additional rent of Rs. 750 per month, a sum of Rs. 4500 by way of advance and was to execute a lease for ten years from 1-4-1976 to 31-3-1986. The appellant's case is that accordingly the Corporation put up certain structures, but the Corporation did not abide by the agreement and declined to execute the lease. A notice was, therefore, given by the appellant calling upon respondent I to execute the agreement of lease.


2. The appellant's case is that after this notice was served, the State Government, respondent 2, came out with a notification under S.4(1) of the Act, on 9-3-1977. After the notification was published, the appellant filed a suit for specific performance of the agreement under which respondent 1 was obliged to execute a lease for a period of the ten years. This was in O. S. 62 of 1977 on the file of the Court of the Subordinate Judge, Tuticorin. After the suit was filed a declaration under S.6 of the Act also came to be issued on 8-2-1978. The main contesting defendants in the suit were the Corporation and the State Government. Notwithstanding the fact that the only relief prayed for in the suit was a decree for specific performance against the the appellant by an interlocutory application also asked for an injunction against the State Government restraining the State Government and the Corporation from continuing the land acquisition proceedings for acquiring the suit property by the Revenue Divisional Officer, Kovilpatti. This injunction was granted by the Subordinate Judge, Tuticorin, as prayed for. However, the Subordinate Judge made it clear that no prejudice will be caused to the respondents therein by the granting of injunction staying further proceedings in the acquisition proceedings till the disposal of the suit. Clearly, the order was an interlocutory order.


3. Only the Corporation filed an appeal in this court challenging the order of injunction. That appeal was admitted, but when a prayer for stay of that injunction was made, the learned Judge, however, declined to stay the order of injunction and directed that the injunction will continue to be in force, during the pendency of the appeal which was C. M. A.334 of 1978.


4. The suit was tried by the learned Subordinate Judge and by a judgement dt. 25-4-1979, a decree for specific performance was passed only against the Corporation. In so far as the State Government was concerned, the learned Judge positively took the view that there was no cause of action against the State Government and no relief was asked for against the State Government and

"as the controversy in the suit can be adjudicated even without the presence of defendant 1, defendant 1 is not a necessary party to the suit." *


He, therefore, found,' that defendant 1 is an unnecessary party to the suit.' It is obvious that the State Government having been found as not a necessary party in the suit, nothing said in the decree for specific performance will bind the State Government.


5. After this decree, the Corporation complied with the decree and executed the agreement of lease on 20-8-1980. It appears that the appeal against the order of injunction pending in this Court in C. M. A.334 of 1978 came to be disposed of as infructuous on 8-1-1979.


6. The appellant had, however, earlier filed a suit O. S. 231 of 1979 subsequently renumbered as O. S. 138 of 1981 on the file of the Court of the District Munsif, Kovilpatti, for quashing the declaration under S.6 of the Act dt. 8-2-1978. It would not be proper for us to express any opinion as to the scope of that suit because the matter is still pending in appeal in A.S. 134 of 1984 on the file of the Court of the Subordinate Judge, Tuticorin. It is, however, sufficient to mention that by a judgement dt. 18-10-1982, the District Munsif Court, Kovilpatti, decreed the suit and quashed the proceedings under S.5-A of the Act as well as the declaration under S.6 of the Act. It is this decree of this District Munsif Court, which is appealed against by the appellant and in the appeal his case was that even the notification under S.4(1) of the Act was liable to be quashed.


7. It appears that the State Government accepted the decision and after making a fresh enquiry under S.5-A of the Act, issued a fresh declaration under S.6 of the Act, on 3-12-1983. It is this declaration dt. 3-12-1983 that was challenged by the appellant by way of a writ petition. It appears that two contentions were raised before the learned Judge. The first contention was that the declaration dt. 3-12-1983, published in the Gazette dt. 4-12-1983 was void and illegal, since it was made beyond the period of three years as contemplated by the proviso to S.6(1) of the Act then in force. The second contention was that since Ss.4, 5A and 6 of the Act formed an integrated scheme and when the enquiry proceedings under S.5-A and the declaration under S.6(1) of the Act, were invalidated by the decree of the court of the District Munsif, Kovilpatti in O. S. 138 of 1981, the prior notification under S.4(1) of the Act alone court not survive so as to enable the authorities to proceed on the footing of that notification under S.4(1) and make a fresh declaration under S.6(1) of the Act.


8. In so far as the first contention was concerned the learned Judge negatived it relying on the decision of the Full Bench of this Court in Chinnathambi Gounder v. Govt. of Tamil Nadu, (1980) 2 Mad LJ 269 : 1980 AIR(Mad) 251). The learned Judge took the view that as held by the Full Bench in that case, it was not necessary that a subsequent declaration under S.6(1) of the Act should also be made within three years. In so far as the second contention was concerned, the learned Judge took the view that the notification under S.4(1) of the Act still survived and on the strength of that notification, another declaration under S.6(1) of the Act, could be made. Accordingly, the writ petition came to be dismissed. It is this order of dismissal of the writ petition, the appellant has challenged in this appeal.


9. Three contentions have been raised before us by Mr. Abdul Kareem on behalf of the appellant. The first contention is that the State Government could not proceed with the proceedings under the Land Acquisition Act when the agreement of lease executed on 20-8-1980 was in force. The contention appears to be that under the agreement of lease, the period of the lease was to expire on 31-3-1986. Therefore, according to the learned counsel, any proceeding for acquisition taken before 31-3-1986 must be held to be premature. Therefore, according to the learned counsel, the declaration under S.6 of the Act should be struck down as premature. A reference was made to the interim order of injunction in which, according to the learned counsel, the proceedings under S.5-A were held to be bad and the learned counsel, therefore, contended that this order and the findings recorded therein continued to be effective and the State Government was, therefore, disabled from making any declaration under S.6(1) of the Act. Now it is difficult for us to see, how any decision in O. S. 62 of 1977 could prevent the State Government from exercising its powers under the Land Acquisition Act. While disposing of O. S. 62 of 1977, it has been expressly held that no relief is asked for against the State. Government and the State Government was not a necessary party. In view of these findings anything said in the judgement in O. S. 62 of 1977 cannot affect the statutory powers of the State Government under the Land Acquisition Act. It is also difficult to see what nexus there can be between the lease executed by the Corporation and the Statutory Powers of the State Government under the Land Acquisition Act. Undou-btedly, the Land Acquisition proceedings are in respect of the land which has been taken on lease by the Corporation; but it is not the law that where a Corporation has taken a particular land on lease, the State Government could not exercise its powers of acquisition under the Land Acquisition Act, in respect of that land. The reference to the interim order of injunction appears to us wholly inapposite because these observations did not survive after the decision of the suit, especially when in the judgement in O. S. 62 of 1977 the Court itself has made it clear that the State Government is not a necessary party and no relief is asked for against the State Government. Even otherwise, all interlocutory orders made in the course of a proceeding in the nature of a suit must necessarily lapse with the decision of the suit itself, unless, of course, the suit is one for permanent injunction, and the interim injunction is made permanent as a part of the decretal order made by the court. There is, therefore, no substance in the contention either that the declaration is premature or that a decree for specific performance in the matter of execution of the leave agreement by the Corporation prevented the State Government from exercising its statutory power.


There is also no substance in the second contention raised before us that al! acquisition proceedings, that is, even the notification under S.4(1) of the Act must be held to have become ineffective as a result of the decree in the suit for specific performance. This contention overlooks the fact that the only party against whom relief was sought for in the suit for specific performance was the Corporation. If the Corporation was directed by the decree to execute an agreement of lease, that decree cannot, as already pointed out, affect something which was done by the State Government in exercise of its powers under S.4(1) of the Act. As a matter of fact, the appellant herself was constrained to file a second suit after the suit for specific performance was decreed to have the land acquisition proceedings set aside. If the appellant's contention that the decree for specific performance automatically rendered ineffective the proceedings relating to land acquisition is correct, then it was not necessary for the appellant to file a second suit to have the land acquisition proceedings declared void and inoperative. It is, therefore, not possible to accept the contention that the decree for specific performance made against the Corporation in any way vitiates the declaration under S.6 of the Act.


10. The third contention raised was that the declaration was barred in view of the Explanation to S.6(1) of the Act. The four dates which are material for consideration of this contention are :- 9-3-1977 Notification under S.4(1) of the Act, 9-2-1978 Declaration under S.6(1) of the Act, 18-10-1982 - Proceedings under S.S-A and declaration under S.6 quashed, 3-12-1983 - The impugned declaration under S.6(1) of the Land Acquisition Act.


The contention is that with reference to the notification under S.4(1) of the Act, the impugned declaration D/-3-12-1983, is admittedly issued beyond a period of three year. Therefore, according to the learned counsel, the declaration not being within the period prescribed by the first proviso to S.6(1) of the Act, it must be held to be invalid.


11. It is not possible to accept this contention. After providing for the issue of a declaration under S.6(1) of the Act, the first proviso to S.6(1) reads as follows -


"Provided that no declaration in respect of any particular land covered by a notification under S.4, Sub-Sec. (1) published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance 1967 shall be made after the expiry of three years from the date of such publication" *


This proviso was deleted by Act 68 of 1984 and as a result of this amendment, a new proviso was substituted, which is as follows -


"Provided that, no declaration in respect of any particular land covered by a notification under S.4, Sub-S. (1)


(i) published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967 but before the commencement of the Land Acquisition (Amendment) Act, 1984 shall be made after the expiry of three years from the date of the publication of the notification; or


(ii) published after the commencement of the Land Acquisition (Amendment) Act, 1984 shall be made after the expiry of one year from the date of publication of the notification." *


At the end of Sub-S. (1) of S.6 of the Act, the following two Explanations were added :-


"Explanation I : In computing any of the periods referred to in the first proviso, the period during which any action or proceeding to be taken in pursuance of the notification issued under S.4, Sub-S. (1), is stayed by an order of a Court shall be excluded.


Explanation 2 :- Where the compensation to be awarded for such property is to be paid out of the funds of a corporation owned or controlled by the State, such compensation shall be deemed to be compensation paid out of public revenues." *


We are, however, not concerned with the amendments brought by Central Act 68 of 1984 and neither the Government nor the appellant is relying on them. It is, however, necessary to mention that there was an Explanation similar to the one which is now added by Act 68 of 1984 made by the Tamil Nadu State. This Explanation was to the first proviso under S.6(1) of the Act. The Explanation reads as follows -


"Explanation : In computing the period of 3 years specified in this proviso any period during which any action or proceeding to be taken in pursuance of the notification issued under Sub-S. (1) of S.4 is held up on account of stay or injunction by order of a Court shall be excluded."


The legal provision with reference to which the contention of the learned counsel for the appellant has to be decided now stands thus. There is a proviso which requires a declaration under S.6 of the Act to be made within a period of 3 years from the date of the publication under S.4(1). But by the Explanation by Tamil Nadu Act 41 of 1980 a method of computation of this three year period is laid down and specifically the period during which proceedings or action in pursuance of the notification under S.4(1) of the Act is held up on account of stay or injunction by order of Court is permitted to be excluded. The learned counsel for the appellant is right when he contends that this Explanation cannot be availed of by the State Government. For the Explanation to be attracted and to be availed of by the State Government, it must be shown that the State Government was prevented as a result of a stay or injunction order from taking any proceedings further to the notification under S.4(1) of the Act. On a bare reading of this explanation, it is clear that the Explanation inserted by Tamil Nadu Act 4(1) of 1980 is not attracted in a case where a declaration under S.6 is already issued and there were proceedings consequent upon a challenge to the declaration under S.6 of the Act. The explanation, therefore, is not relevant for our purpose.


12. What is, however, contended is that merely because a declaration under S.6 was once issued on 8-2-1978, the State Government is not absolved of its obligation to issue a second notification within a period of 3 years from the date of the notification under S.4(1) of the Act even when a declaration originally issued under S.6(1) has been quashed or declared illegal by any Court. Now the proviso clearly refers to the issue of a declaration under S.6 which follows an earlier notification under S.4(1) of the Act. It is that declaration which is to be issued within a period of three years from the date of such publication of the notification under S.4(1) of the Act. On the plain terms of the proviso, it would be difficult to hold that even when a declaration is already issued under S.6(1) of the Act, and that declaration is quashed resulting in a fresh declaration, such fresh declaration must also be issued within a period of three years from the date of the notification under S.4(1) of the Act. If the proviso is construed in the manner in which the learned counsel for the appellant wants us to construe the effect of it will be that whenever an impugned notification (declaration) is set aside or quashed beyond the period of three years from the first notification, under S.4(1) of the Act, no fresh declaration under S.6(1) can ever be issued, because in such circumstances, it will be impossible to comply with the requirements of the proviso. It is not possible to taken the view that the first proviso will be attracted in a case where a declaration was originally issued within the period of three years, that declaration, has been struck down and the second declaration comes to be issued beyond the period of three years. Indeed in almost every case where a declaration under S.6 of the Act is. challenged, the possibility normally will be that such dispute will be decided only after a period of three years having regard to the pendency of matters in courts. This is the view which has been taken by the Full Bench in Chinnathambi Gounder v. Govt. of Tamil Nadu (1980) 2 Mad LJ 269 : 1980 AIR(Mad) 251) cited supra. It has been held by the Full Bench that where a declaration under S.6(1), Land Acquisition Act, was factually made well within three years from the date when the notification under S.4(1) was made, it cannot be contended that merely by reason of a second declaration having been made beyond a period of three years on account of the first declaration under S.6(1) having been quashed

by an order of court, the first declaration had become non est and the second declaration should also be made within a period of three years from the date of the notification, because though the first declaration had been quashed, the factum of declaration cannot be disputed or effected. The Full Bench pointed out that the effect of the quashing order passed by the court will be only to remove the validity and legal force of the declaration which had been quashed. This decision of the Full Bench is binding on us. Accordingly, we must reject the argument that the declaration dt. 3-12-1983, published on 4-12-1983, is void on the ground that it was issued beyond the period prescribed by the proviso to S.6(1) of the Act. 13. Before parting with this appeal, we must make it clear that anything that we have said in this judgement will not affect the challenge which is pending before the Court of the Subordinate Judge, Tuticorin, to the notification under S.4(1), Land Acquisition Act. Our decision in this appeal is restricted to the validity of the declaration under S.6(1) of the Act. If for any reason the notification under S.4(1) of the Act is quashed or declared illegal by any Court, it is obvious that the State Government will not be entitled to give effect to the declaration under S.6(1) of the Act. Conversely if the notification under S.4(1) of the Act is held to be valid, then having regard to the view which we have taken with regard to the validity of the declaration under S.6(1) of the Act, the appellant will not now be entitled to raise any dispute with regard to the validity of the declaration under S.6. 13A. Subject to the above observations, this appeal is dismissed. However, we make no order as to costs. 14. We also direct that the appeal pending before the Court of the Subordinate Judge, Tuticorin, should be disposed of before the 31st of August, 1986. 15. The oral application made by the learned counsel for the appellant for leave to appeal to the Supreme Court is rejected.