REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.6228-6229 OF 2002 <ORG> ...Appellant Versus <NAME> and others ...Respondents JUDGMENT

<NAME> J :

1. As all the cases involve similar questions of fact and law, they were taken up for hearing together and are being disposed of by this common judgment.

2. We may, however notice the fact of the matter involved in Civil Appeal Nos.6228-6229 of 2002.

Appellant is <ORG> (<ORG>). It is engaged in the business of generation of electricity. It, for the purpose of setting up of a Thermal Power Station at Village Sarna in the District of Ghaziabad in the State of Uttar Pradesh, submitted a proposal to the State of Uttar Pradesh for acquisition of lands situated in Village Dadri, Tehsil Ghaziabad, District Ghaziabad.

3. Pursuant or in furtherance of the said request, a Notification was issued in terms of Section 4 of the Land Acquisition Act, 1894 (for short `the Act') notifying the intention of <ORG> to acquire 105 Bighas 2 Biswas and 16 Biswanis (equivalent to 65.7125 acres) of lands situated at the aforementioned village. It was published in <ORG> on 8th September, 1984

4. On the premise that generation of electricity was extremely urgent and National Capital Region faced acute shortage of electricity, the emergency provisions contained in Sections 17(1) and 17(4) of the Act were invoked. A declaration in terms of Section 6 of the Act was issued on 26th September, 1984. As the provisions of sub-section (4) of Section 17 of the Act were applied, notices were issued on 27th October, 1984 under Section 9 of the Act to the claimants for payment of compensation in respect of the acquired land.

5. However, admittedly prior to taking over possession of land under the emergency powers, the Collector disbursed 80% of the amount of compensation determined in terms of Section 17(3A) of the Act. A possession certificate was issued by the Collector on 16th January, 1984, which reads as under :-

" POSSESSION CERTIFICATE LAND PERMANENT REQUIRED FOR THE PLANNED Industrial Construction of NTPC Plant, District Ghaziabad through <ORG>, Ghaziabad Certified that I on behalf of the Collector, Ghaziabad have on this day the 16.11.1984 taken over the possession of the land detailed below comprising an area 105 B - 2Bs-16B or 6751.3 acres and (not legible (name not ligible) of D.L.A.O's Office to hand over the possession of the same land to <ORG>, Ghaziabad.

Through Sri. D.V. (not ligible), village Sarna, Muradnagar, Pargana Jalalabad, District, Ghaziabad.

Sd/-

(District Land Acquisition Officer, Ghaziabad) Notification u/s. 6 :- 7574/P-3-84-23-26 Land P-84__264-84 published on 29.9.84.

Certified that I on behalf of the Manager, <ORG>, Ghaziabad have to take over possession of the abovementioned land through ______________________ today."

Khasra numbers and area of the plots, possession whereof had been taken, were specified therein.

6. Despite the same, the appellant contended that it had obtained the requisitioned physical possession of land admeasuring 10.215 acres only and the rest of the land continued to remain in possession of the land owners.

It is stated that <ORG> made recommendations that the choice of place for setting up a Thermal Power Station, having regard to its proximity to the National Capital being incorrect, the site thereof should be shifted. Pursuant thereto or in furtherance thereof, the site of the plant was shifted from Sarna, Murad Nagar to Dadri Tehsil. However, the Land Acquisition Officer despite the same proceeded to determine the amount of compensation payable for the acquisition of land.

7. An Award was made on 24th September, 1986.

A reference in terms of Section 18 of the Act was made which was answered by the learned Additional District Judge, Ghaziabad by a order dated 22nd October, 1993 determining the amount of compensation @ Rs.155/- per sq. yards and Rs.115/- per sq. yds. in respect of two references made separately before it. .

8. First appeals were preferred thereagainst in February, 1984 by <ORG> before <ORG>. Inter alia on the premise that possession of the entire land of 65.713 acres had not been obtained, the District Magistrate was approached for issuance of a notification denotifying the acquisition of the balance area i.e. for withdrawal of acquisition of land admeasuring 55.498 acres.

9. By its letter dated 24th February, 1986, <ORG> submitted a proposal as regards denotification of the land, which reads as under :-

" Kindly refer to our letter No.08/GM/13 dated January 8, 1986, on the above subject, addressed to District Land Acquisition Officer and copy endorsed to you (copy enclosed for ready reference). In continuation of para 2 of that letter this is to inform you that there are five cases in which delivery of possession is shown to have been given. These are of villages Sarna, Khurrampur, Sultanpur, Jalalpur and Mohiuddinpur. In Sarna, advance compensation has been paid to most of the persons affected while in Khurrampur only a few persons have been paid the advance compensation. In cases of Sultanpur, Jalalpur and Khurrampur villages - we did not get physical possession and the land owners continue to be in possession their lands even now. In many cases, their crops are standing on the land in question. Further, it may be added that the Land  Acquisition Amendment Act 1984 came into force w.e.f. 24.9.1984. As per sub-section (3A) to Section 17 of the Land Acquisition Act it is made obligatory that before taking possession of any land the Collector shall pay 80% of the compensation to the interested persons. This mandatory provision not having been complied with, the delivery of possession on paper has no legal force and that is why land owners did not allow <ORG> to take possession of these lands. Any possession without such 80% compensation are likely to be vitiated even if the land is proposed to be acquired. Similarly, in the village of Mohiuddinpur Hissali, no compensation has been paid.

It is understood that some mutations in respect of lands of these villages in favour of <ORG> have been made in the revenue records.

Obviously there appears to be some discrepancy. Since no legally valid possession has been given to <ORG> nor land owners have allowed <ORG> to take possession of these lands, mutations in revenue records made need to be set right by necessary correction proceedings.

It is, therefore, requested that the possession certificates of these villages may please be cancelled and original entries in the revenue records may be ordered to be restored.."

10. The said proposal was forwarded to the Commissioner and Director (Land Acquisition), <ORG> by the District Magistrate by his letter dated 11th August, 1994. <ORG> issued a clarification to the Commissioner and Director, <ORG>, by its letter dated 13th August, 2004. On or about 18th August, 1994 an inspection was carried by the Land Acquisition Amin, <NAME> together with the representatives of <ORG> and as per the report submitted pursuant thereto, the appellant is said to have been found in possession of only 10.215 acres of land.

11. On 11th November, 1994 the State of U.P. issued a Notification in terms of Section 48 of the Act.

Aggrieved, respondents filed a writ application before <ORG> on or about 29th August, 1995 and a Division Bench of <ORG> stayed the consequential effect of the Notification dated 11th November, 1994. On or about 9th September, 1997 the appellant filed an application for vacating the stay which having been refused, a Special Leave Petition was filed before this Court, which was dismissed by an order dated 14th October, 1997.

By reason of a judgment and order dated 21st July, 1998 the said writ petition was allowed.

12. Indisputably on the same day, the same Bench passed judgment in <ORG> preferred by appellant (<ORG>) against the order of <ORG> dated 22nd October, 1993. We shall deal with the said matter separately.

13. Mr. <NAME>, learned senior counsel appearing on behalf of the <ORG> would contend that although in the event possession had been taken by the Collector from the land owners, Section 48 of the Act will have no application but in view of the fact that possession of 55.498 acres of land had not been delivered in favour of <ORG> and merely a symbolic possession had been delivered, <ORG> must be held to have committed a serious error in passing the impugned judgment.

14. Mr. <NAME>, learned senior counsel appearing on behalf of the respondents, on the other hand, would contend :-

(i) Having regard to the provisions contained in Section 17(1) of the Act, as the vesting of the acquired land takes place immediately, the impugned Notification dated 1th November, 1994 has rightly been held to be illegal and without jurisdiction.

(ii) Having regard to the certificate of possession issued by the Collector on 16th November, 1984 under the provisions of the Act, stating possession of entire land had been taken and the details thereof having been mentioned in the said certificate itself, it is too late in the day for the appellant/<ORG> to contend that possession of a major portion of the land had was not taken over.

(iii) The fact that the possession of the entire land had been taken over not only would appear from the materials brought on record during the land acquisition proceedings culminating in passing of the Award but also from the award of <ORG> as also the judgment of <ORG> in the First Appeals and in that view of the matter, it would not be correct to contend that <ORG> could not have entered into such disputed questions of fact, particularly when the validity or otherwise of the proceedings is not in question.

15. A Notification under Section 4 of the Act was issued. Emergency provisions contained in Section 17 of the Act were resorted to. Sub-sections (1), (3A) and 4 of the Act read as under :-

(1) In cases of urgency, whenever the Appropriate <ORG> so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9 , sub-section (1), 1 [take possession of any waste or arable land needed for a public purpose]. Such land shall thereupon vest absolutely in the <ORG>, free from all encumbrances.

(2) .... .... .... (3) .... .... ....

(3A) Before taking possession of any land under sub-section (1) or sub-section (2), the Collector shall, without prejudice to the provisions of sub- section (3),--

(a) tender payment of eighty per centum of the compensation for such land as estimated by him to the persons interested entitled thereto, and

(b) pay it to them, unless prevented by some one or more of the contingencies mentioned in section 31 , sub-section (2), and where the Collector is so prevented, the provisions of section 31 , sub-section (2), (except the second proviso thereto), shall apply as they apply to the payment of compensation under that section.

(4) In the case of any land to which, in the opinion of the appropriate Government, the provisions of sub-section (1) or sub-section (2) are applicable, the appropriate Government may direct that the provisions of section 5A shall not apply, and, if it does not so direct, a declaration may be made under section 6 in respect of the land at any time 4 [after the date of the publication of the notification under section 4 , sub-section (1)."

16. Indisputably the said provisions were been taken recourse to and, thus, the lands under acquisition vested absolutely in the Government.

17. Concedingly, a declaration in terms of Section 6 of the Act was issued whereafter notices to persons interested under Section 9 thereof had also been issued. Award had also been published.

Section 16 of the Act providing for taking over possession of the land after making the Award would not be applicable in this case as possession is said to have already been taken over in terms of sub-section (1) of Section 17 thereof.

It is in the aforementioned backdrop of factual matrix, the power of the <ORG> to withdraw the Notification of acquisition as envisaged under Section 48 of the Act falls for our consideration.

The said provision is as under :-

" 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) Whenever 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 reasonably 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."

18. It is a well settled proposition of law that in the event possession of the land, in respect whereof a Notification had been issued, had been taken over, the State would be denuded of its power to withdraw from the acquisition in terms of Section 48 of the Act.

19. Whether actual or symbolic possession had been taken over from the land owners is essentially a question of fact. Taking over of possession in terms of the provisions of the Act would, however, mean actual possession and not symbolic possession. The question, however, is as to whether the finding of fact arrived at by <ORG> that physical possession, indeed, had been taken over by the Collector is correct or not.

20. We have noticed hereinbefore the background facts. The emergency provisions were resorted to. Even 80% of the compensation had been paid way back in 1984. Had possession of the vacant land been not taken, the question of payment of 80 % of compensation would not have arisen. All other legal requirements to invoke the said provision have been complied with.

21. Mr. <NAME>, however, would draw our attention to a letter dated 24.2.1986 issued by the appellant to the District Magistrate to contend that even payment of 80% of the compensation had not made and, thus, the purported delivery of possession was merely a papr transaction. Our attention had further been drawn to the written statement filed on behalf of the appellant before the reference court, which reads as under :

"That out of the total acquired area in question the respondent utilized only a portion of the land by construction of their Satellite building while remaining area could not be put into use by the respondent, since the land is in actual physical possession of the land owners and they are deriving all the benefits from the land thereof and the respondent is having only a symbolic possession over the same."

22. We, however, have not been able to persuade ourselves to agree with the aforementioned submissions. The Officers of the appellant themselves were parties in regard to the process of actual physical possession obtained on its behalf by the Collector.

23. Even in the award made by the Special Land Acquisition Collector, the invocation of the provisions of Section 17 of the Act as also obtaining of possession of the land in question had clearly been found.

We may notice some of the statements recorded therein :

"10. Whether Sec.17 is in force : Yes 11. Date of the right : 16.11.84 XXX XXX XXX 18. Amount of Interest : 9% payable from 16.11.84 i.e. from the date of acquisition 15% further from that date payable to and owner."

We may quote hereinbelow the relevant portions from the said award :

"4. 12% additional from 8.9.84 i.e. from the date of notification till date of possession i.e. on 16.11.84 : Rs.1,46,531.69"

24. From a perusal of the award, therefore, it is evident that not only the provisions of Section 17 of the Act were found to have been implemented but even interest had been granted from the date of acquisition, namely, from the date of taking over of possession. Interest had also been granted in terms of Section 23A of the Act from the date of notification till the date of actual taking over of possession. <ORG> also, in its judgment, held :

"(2) The petitioners will get 12% per annum as additional amount on the above market value for the period commencing from the date of publication of the notification u/s. 4(1) dated 6.9.84 to the date of possession dated 16.11.84."

25. In the memo of appeal preferred by the appellant before <ORG> a statement was made that the possession of the land was taken by invoking Section 17 of the Act on 16.11.1984 and, thus, interest at the rate of 15% per annum on the excess amount under the provisions of Section 28 of the Act would be payble only in the case where such excess payment had not been made before the expiry of one year period from the date on which the possession has been taken and as determined by the <ORG>. In view of the stand taken by the appellant before <ORG> as also the reference court and <ORG>, in our opinion, it is estopped and precluded from raising a plea contra. The Reference <ORG>, in paragraph 4 of its judgment, also noticed that the possession of the land has been taken over on 16.11.1984. No objection was taken before the Reference <ORG> that possession had not been taken and, thus, interest was not payable. No issue was also framed in that regard.

Even before us, the only ground taken was that the land could not be put to use which is a non-issue.

26. Strong reliance has been placed upon a decision of this Court in <CITATION> , [ AIR 1975 SC 1967 =  ], wherein it has been held :-

"We think it is enough to state that when the <ORG> proceeds to take possession of the land acquired by it under the Land Acquisition Act , 1894, it must take actual possession of the land, since all interests in the land are sought to be acquired by it. There can be no question of taking "symbolical" possession in the sense understood by judicial decisions under the Code of Civil Procedure. Nor would possession merely on paper be enough. What the Act contemplates as a necessary condition of vesting of the land in the <ORG> is the taking of actual possession of the land. How such possession may be taken would depend on the nature of the land. Such possession would have to be taken as the nature of the land admits of. There can be no hard and fast rule laying down what act would be sufficient to constitute taking of possession of land. We should not, therefore, be taken as laying down an absolute and inviolable rule that merely going on the spot and making a declaration by beat of drum or otherwise would be sufficient to constitute taking of possession of land in every case. But here, in our opinion, since the land was lying fallow and there was no crop on it at the material time, the act of the Tehsildar in going on the spot and inspecting the land for the purpose of determining what part was waste and arable and should, therefore, be taken possession of and determining its extent, was sufficient to constitute taking of possession. It appears that the appellant was not present when this was done by the Tehsildar, but the presence of the owner or the occupant of the land is not necessary to effectuate the taking of possession. It is also not strictly necessary as a matter of legal requirement that notice should be given to the owner or the occupant of the land that possession would be taken at a particular time, though it may be desirable where possible, to give such notice before possession is taken by the authorities, as that would eliminate the possibility of any fraudulent or collusive transaction of taking of mere paper possession, without the occupant or the owner ever coming to know of it."

This decision, therefore, itself is an authority for the proposition that no absolute rule in this behalf can be laid down.

<CITATION> . [] and <CITATION> . [], the same view has been reiterated.

27. These decisions, as noticed hereinbefore, do not lay down an absolute rule. The question as to whether actual physical possession had been taken in compliance of the provisions of Section 17 of the Act or not would depend upon the facts and circumstances of each case.

28. When possession is to be taken over in respect of the fallow or Patit land, a mere intention to do so may not be enough. It is, however, the positive stand by the appellant that the lands in question are agricultural land and crops used to be grown therein. If the lands in question are agricultural lands, not only actual physical possession had to be taken but also they were required to be properly demarcated. If the land had standing crops, as has been contended by Mr. <NAME>, steps in relation thereto were required to be taken by the Collector. Even in the said certificate of possession, it had not been stated that there were standing crops on the land on the date on which possession was taken. We may notice that delivery of possession in respect of immoveable property should be taken in the manner laid down in Order XXI Rule 35 of the Code of Civil Procedure.

29. It is beyond any comprehension that when possession is purported to have been taken of the entire acquired lands, actual possession would be taken only of a portion thereof. The certificate of possession was either correct or incorrect. It cannot be partially correct or partially incorrect. Either the possession had actually been delivered or had not been delivered. It cannot be accepted that possession had been delivered in respect of about 10 acres of land and the possession could not be taken in respect of the rest 55 acres of land. When the provisions of Section 17 are taken recourse to, vesting of the land takes effect immediately.

30. Another striking feature of the case is that all the actions had been taken in a comprehensive manner. The Collector in his certificate of possession dated 16th November, 1984 stated that the possession had been taken over in respect of the entire land; the details of the land and the area thereof had also been mentioned in the certificate of possession; even <ORG> in its letter dated 24th February, 1986 stated that possession had not been delivered only in respect of land situated in four villages mentioned therein. Indisputably <ORG> got possession over 10.215 acres of land. It raised constructions thereover. It is difficult to comprehend that if the <ORG> had paid 80% of the total compensation as provided for under sub-section (3A) of Section 17 of the Act, out of 65.713 acres of land it had obtained possession only in respect of about 10.215 acres of land and still for such a long time it kept mum. Ex-facie, therefore, it is difficult to accept that merely symbolic possession had been taken.

<CITATION> [(1970 (2) SCC 149], this Court has stated the law, thus :

"But these observations do not assist the case of the appellant. It is clearly implicit in the observations that after possession has been taken pursuant to a notification under Section 17(1) the land is vested in the <ORG>, and the notification cannot be cancelled under Section 21 of the General Clauses Act, nor can the notification be withdrawn in exercise of the powers under Section 48 of the Land Acquisition Act. Any other view would enable the State <ORG> to circumvent the specific provision by relying upon a general power. When possession of the land is taken under Section 17(1) , the land vests in the <ORG>. There is no provision by which land statutorily vested in the <ORG> reverts to the original owner by mere cancellation of the notification."

The said view was affirmed in <CITATION> . [], in the context of applicablility of Section 11A of the Act, it was stated :

"When Section 17(1) is applied by reason of urgency, <ORG> takes possession of the land prior to the making of the award under Section 11 and thereupon the owner is divested of the title to the land which is vested in the <ORG>. Section 17(1) states so in unmistakable terms. Clearly, Section 11-A can have no application to cases of acquisitions under Section 17 because the lands have already vested in the <ORG> and there is no provision in the said Act by which land statutorily vested in the <ORG> can revert to the owner."

<CITATION> . [], a Three Judge Bench of this Court opined as under :

"12. The provisions of sub-section (4) of Section 52 are somewhat similar to Section 17 of the Land Acquisition Act, 1894. Just as publication of a notification under Section 52(1) vests the land in the <ORG>, free from all encumbrances, as provided by Section 52(4) , similarly when possession of land is taken under Section 17(1) the land vests absolutely in the <ORG> free from all encumbrances. A question arose before this Court that if there is a non-compliance with the provisions of Section 5-A and an award is not made in respect to the land so acquired, would the acquisition proceedings lapse. <CITATION> . this Court held that once possession had been taken under Section 17(1) and the land vested in the <ORG> then the <ORG> could not withdraw from acquisition under Section 48 and the provisions of Section 11- A were not attracted and, therefore, the acquisition proceedings would not lapse on failure to make an award within the period prescribed therein. It was further held that non-compliance of Section 17 (3- A), regarding part payment of compensation before taking possession, would also not render the possession illegal and entitle the <ORG> to withdraw from acquisition. The aforesaid principle has been reiterated by this Court in <CITATION> . and <CITATION> . In view of the aforesaid ratio it follows that the provisions of Section 11-A are not attracted in the present case and even if it be assumed that the award has not been passed within the stipulated period, the acquisition of land does not come to an end."

<CITATION> . [], it was held :

"... <CITATION> .6, the question arose: whether notification under Section 4(1) and the declaration under Section 6 get lapsed if the award is not made within two years as envisaged under Section 11-A ? A Bench of three Judges had held that once possession was taken and the land vested in the <ORG>, title to the land so vested in the State is subject only to determination of compensation and to pay the same to the owner. Divesting the title to the land statutorily vested in the <ORG> and reverting the same to the owner is not contemplated under the Act. Only Section 48(1) gives power to withdraw from acquisition that too before possession is taken. That question did not arise in this case. The property under acquisition having been vested in the appellants, in the absence of any power under the Act to have the title of the appellants divested except by exercise of the power under Section 48(1) , valid title cannot be defeated. The exercise of the power to quash the notification under Section 4(1) and the declaration under Section 6 would lead to incongruity."

31. Yet again, in <CITATION> ) by Lrs. [], this <ORG> has categorically laid down that when the accepted mode of taking possession of the acquired land is resorted to, that would constitute taking possession of the land.

The said principle has been reiterated in <CITATION> . [], in the following terms :

"43. In our considered view, <ORG> has erred in holding that <ORG> could release the lands in exercise of its power under Section 48 of the Land Acquisition Act, 1894 from the acquisition."

It has further been held :

"46. The possession of the land in question was taken in the year 1966 after the passing of the award by the Land Acquisition Officer. Thereafter, the land vested in the <ORG> which was then transferred to <ORG>, predecessor-in-interest of the appellant. After the vesting of the land and taking possession thereof, the notification for acquiring the land could not be withdrawn or cancelled in exercise of powers under Section 48 of the Land Acquisition Act. Power under Section 21 of the General Clauses Act cannot be exercised after vesting of the land statutorily in the State <ORG>."

{See also <CITATION> . []}.

32. <ORG>, therefore, in our opinion, was correct in its view.

33. We may now consider the question as to whether the issue as to whether possession of the acquired land had actually been taken over or not being a disputed question of fact could not have gone into by <ORG>. It is not a case where oral evidence was required to be taken. There is no law that <ORG> is denied or debarred from entering into a disputed question of fact. The issue will have to be determined keeping in view the fact situation obtaining in each case. If a disputed question can be determined on the basis of the documents and/or affidavit, <ORG> may not ordinarily refuse to do so. In a given case, it may also examine witnesses.

<CITATION> . [], it was held :

"14. <ORG> observed that they will not determine disputed question of fact in a writ petition. But what facts were in dispute and what were admitted could only be determined after an affidavit in reply was filed by the State. <ORG>, however, proceeded to dismiss the petition in limine. <ORG> is not deprived of its jurisdiction to entertain a petition under Article 226 merely because in considering the petitioner's right to relief questions of fact may fall to be determined. In a petition under Article 226 <ORG> has jurisdiction to try issues both of fact and law. Exercise of the jurisdiction is, it is true, discretionary, but the discretion must be exercised on sound judicial principles. When the petition raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and on that account <ORG> is of the view that the dispute may not appropriately be tried in a writ petition, <ORG> may decline to try a petition. Rejection of a petition in limine will normally be justified, where <ORG> is of the view that the petition is frivolous or because of the nature of the claim made dispute sought to be agitated, or that the petition against the party against whom relief is claimed is not maintainable or that the dispute raised thereby is such that it would be in appropriate to try it in the writ jurisdiction, or for anologous reasons.

15. From the averments made in the petition filed by the appellants it is clear that in proof of a large number of allegations the appellants relied upon documentary evidence and the only matter in respect of which conflict of facts may possibly arise related to the due publication of the notification under Section 4 by the Collector.

16. In the present case, in our judgment, <ORG> was not justified in dismissing the petition on the ground that it will not determine disputed question of fact. <ORG> has jurisdiction to determine questions of fact, even if they are in dispute and the present, in our judgment, is a case in which in the interests of both the parties <ORG> should have entertained the petition and called for an affidavit in reply from the respondents, and should have proceeded to try the petition instead of relegating the appellants to a separate suit."

Such a direction has been issued, as noticed hereinbefore, even in a land acquisition matter.

Yet again, in <CITATION> [], this Court has held :

"10. It is not necessary for this case to express an opinion on the point as whether the various provisions of the Code of Civil Procedure apply to petitions under Article 226 of the Constitution.

Section 141 of the Code, to which reference has been made, makes it clear that the provisions of the Code in regard to suits shall be followed in all proceedings in any court of civil jurisdiction as far as it can be made applicable. The words "as far as it can be made applicable" make it clear that, in applying the various provisions of the Code to proceedings other than those of a suit, the court must take into account the nature of those proceedings and the relief sought. The object of  Article 226 is to provide a quick and inexpensive remedy to aggrieved parties. Power has consequently been vested in <ORG> to issue to any person or authority, including in appropriate cases any government, within the jurisdiction of <ORG>, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari. It is plain that if the procedure of a suit had also to be adhered to in the case of writ petitions, the entire purpose of having a quick and inexpensive remedy would be defeated. A writ petition under Article 226 , it needs to be emphasised, is essentially different from a suit and it would be incorrect to assimilate and incorporate the procedure of a suit into the proceedings of a petition under Article 226. <ORG> is not deprived of its jurisdiction to entertain a petition under Article 226 merely because in considering the petitioner's right of relief, questions of fact may fall to be determined. In a petition under Article 226 <ORG> has jurisdiction to try issues both of fact and law. Exercise of the jurisdiction is no doubt discretionary, but the discretion must be exercised on sound judicial principles. When the petition raises complex questions of fact, which may for their determination require oral evidence to be taken, and on that account <ORG> is of the view that the dispute should not appropriately be tried in a writ petition, <ORG> may decline to try a petition (see <CITATION> ). If, however, on consideration of the nature of the controversy, <ORG> decides, as in the present case, that it should go into a disputed question of fact and the discretion exercised by <ORG> appears to be sound and in conformity with judicial principles, this Court would not interfere in appeal with the order made by <ORG> in this respect."

In <NAME> (supra), it has been observed :-

"4. It is seen that the entire gamut of the acquisition proceedings stood completed by 17-4- 1976 by which date possession of the land had been taken. No doubt, Shri <NAME> has contended that the appellant still retained their possession. It is now well-settled legal position that it is difficult to take physical possession of the land under compulsory acquisition. The normal mode of taking possession is drafting the panchnama in the presence of panchas and taking possession and giving delivery to the beneficiaries is the accepted mode of taking possession of the land. Subsequent thereto, the retention of possession would tantamount only to illegal or unlawful possession."

34. Recently the question came up for consideration before a Division Bench of this Court in <CITATION> , [  ], wherein it was held :-

"9. On the facts pleaded it is doubtful whether the Government can withdraw from the acquisition, since the case of the <ORG> and <ORG> is that possession has been taken and plans finalised to fulfil the purpose for which the acquisition was made. There is no plea in the writ petition that a request for reconveyance was made in terms of Section 48-B of the Act as amended in the <ORG> of Tamil Nadu."

It was furthermore held :-

"15. We may also notice that once a piece of land has been duly acquired under the Land Acquisition Act , the land becomes the property of the <ORG>.

The <ORG> can dispose of the property thereafter or convey it to anyone, if the land is not needed for the purpose for which it was acquired, only for the market value that may be fetched for the property as on the date of conveyance. The doctrine of public trust would disable the <ORG> from giving back the property for anything less than the market value. <CITATION> in a similar situation, this Court observed:

"The question emerges whether the <ORG> can assign the land to the erstwhile owners? It is settled law that if the land is acquired for a public purpose, after the public purpose was achieved, the rest of the land could be used for any other public purpose. In case there is no other public purpose for which the land is needed, then instead of disposal by way of sale to the erstwhile owner, the land should be put to public auction and the amount fetched in the public auction can be better utilised for the public purpose envisaged in the Directive Principles of the Constitution. In the present case, what we find is that the executive order is not in consonance with the provision of the Act and is, therefore, invalid. Under these circumstances, <ORG> is well justified in declaring the executive order as invalid. Whatever assignment is made, should be for a public purpose. Otherwise, the land of the <ORG> should be sold only through the public auctions so that the public also gets benefited by getting a higher value."

35. Furthermore the Collector under the Act was acting as a statutory authority. When possession has been shown to have been taken over not only in terms of sub-section (1) of Section 17 of the Act but also by grant of the certificate and other documents, illustration (e) of Section 114 of the Evidence Act 1872, must be held to be applicable. Once such a presumption is drawn the burden would be on the <ORG> to prove the contra. The burden of proof could be discharged only by adducing clear and cogent evidence. Not only the aforementioned documents but even the judicial records clearly show that the possession had in fact been taken.

36. Mr. <NAME>, however, made an alternative submission before us that this <ORG>, in exercise of its jurisdiction under Article 142 of Constitution of India, may issue necessary directions so as to put a quietus to the entire matter. This <ORG> cannot foresee all the eventualities.

37. However, before us Mr. <NAME>, learned senior counsel appearing on behalf of the respondents, when questioned, categorically stated that in view of the statement made in the counter affidavit, the positive case of the respondents is that they had not been in possession.

If the aforementioned statement made by the respondents is found to be incorrect, legal steps as is permissible in law may be taken. Furthermore, if the respondents and/or any other person are found to be in possession of the lands which were the subject matter of acquisition in terms of the notification under Section 4 of the Act, appropriate steps for eviction therefor can be initiated. It goes without saying that the authorities of the State of Uttar Pradesh shall render all cooperation to the appellant in this behalf.

38. It is furthermore neither in doubt nor in dispute that the initiation of the acquisition proceedings at the instance of the appellant was for setting up of a thermal power station. It had to be shifted to another site only because <ORG> asked it to do so keeping in view the ecological perspective in mind. It is, therefore, permissible for the appellant to put the land in question which has vested in it for another purpose which would come within the purview of any public purpose as has been noticed by this Court in <NAME> (supra) and for any other purpose as has been noticed by this Court in Keerwani Ammal (Supra) Yet again in <CITATION> [], this Court has held :

"12. If the land was not used for the purpose for which it was acquired, it was open to <ORG> to take action but that did not confer any right on the respondents to ask for restitution of the land. As already noticed, <ORG> in this regard has already initiated proceedings for resumption of the land. In our view, there arises no question of any unjust enrichment to the appellant Company."

<CITATION> . [], it was contended :

"16. The learned Additional Solicitor General appearing on behalf of the respondents submitted that having regard to the authorities on the subject the question is no longer res integra. It is not as if lands acquired for a particular public purpose cannot be utilised for another public purpose. He contended that as long as the acquisition is not held to be mala fide, the acquisition cannot be invalidated merely because the lands which at one time were proposed to be utilised for a particular public purpose, were later either in whole or in part, utilised for some other purpose, though a public purpose. He, therefore, submitted that some change of user of the land, as long as it has a public purpose, would not invalidate the acquisition proceeding which is otherwise valid and legal."

It was held :

"23. Referring to the facts of the instant case, it cannot be disputed that the planned development of Delhi for which purpose the land was acquired under Section 4 of the Act is wide enough to include the development and expansion of an airport within the city of Delhi. Thus it cannot be said that the land is actually being utilised for any purpose other than that for which it was acquired.

The only difference is that whereas initially the development work would have been undertaken by <ORG> or any other agency employed by it, after the constitution of <ORG>, the said development work had to be undertaken by the newly constituted authority. Thus there has been no change of purpose of the acquisition. All that has happened is that the development work is undertaken by another agency since constituted, which is entrusted with the special task of maintenance of airports. Since the said authority was constituted several years after the issuance of the notification under Section 4 , the acquisition cannot be invalidated only on the ground that the public purpose is sought to be achieved through another agency. This, as we have noticed earlier, was necessitated by change of circumstances in view of the creation of the authority i.e. <ORG>. Moreover, since there is no change of public purpose for which the acquired land is being utilised, the acquisition cannot be invalidated on that ground. The purpose for which the lands are being utilised by a governmental agency is also a public purpose and as we have noticed earlier, would come within the ambit of the public purpose declared in Section 4 notification. Therefore, the acquisition cannot be challenged on the ground that the acquired lands are not being utilised for the declared public purpose. Having regard to the facts of the case it cannot be contended, nor has it been contended, that the notification under Section 4 of the Act was issued mala fide."

39. For the reasons aforementioned, the appeals, being devoid of any merit, are dismissed subject to the observations made hereinbefore with costs. Counsel fee assessed at Rs.50,000/- in each of these appeals.

.....................................J. [S.B. Sinha] .....................................J. [Cyriac Joseph] New Delhi;

July 16, 2009


PETITIONER: P.K. UNNI Vs. RESPONDENT: NIRMALA INDUSTRIES & ORS. DATE OF JUDGMENT20/02/1990 BENCH: <NAME>, <NAME> (J) BENCH: <NAME>, <NAME> (J) SINGH, <NAME>, <NAME> (J) CITATION: 1990 AIR 933 1990 SCR (1) 483 1990 SCC (2) 378 JT 1990 (1) 423 1990 SCALE (1)316 CITATOR INFO : R 1992 SC 96 (14) ACT: Order XXI Rule 89 and 92(2)--Immovable properly sold in execution of decree-Period of limitation for making deposit for application to set aside the sale. HEADNOTE: In this appeal by special leave brought by the auction- purchaser against the Judgment of the Madras High Court the sole question for consideration is as regards the period of limitation for making a deposit to make an application under Rule 89 of Order XXI of the Civil Procedure Code, 1908 to set aside the sale of immovable property sold in execution of a decree. Whether the deposit is to be made within 30 days from the date of the sale as required by sub-rule (2) of Rule 92 of Order XXI or within 60 days from the date of sale as provided in Article 127 of the Limitation Act , 1963? Following its earlier decision in <CITATION> . and the decision of this Court in <CITATION> Court had held that Article 127 governed the period of limitation to make a deposit in terms of Rule 89. Setting aside the judgment of <ORG> on the question of limitation, this Court in allowing the appeal, HELD: The correct construction of Rule 92(2) of Order XXI of the Civil Procedure Code, 1908 leads to the irresist- ible conclusion that the time for making a deposit in terms of Rule 89 of Order XXI is 30 days, and Article 127 of the Limitation Act , 1963 prescribing the period for making an application under Rule 89 has no relevance to the prescribed time for making the deposit. Neither provision has any effect on the other as to time. [489G-H; 490A] <CITATION> .,  4 SCC 273, over-ruled. <CITATION> .,  SCR 533 at 545; Mersey Docks v. <NAME>,  13 App. Cas. 595,602; 484 SUPREME COURT REPORTS  1 S.C.R. Crawford v. <NAME>,  6 Morre P.C. 1, 8, 9; Seaford Court Estates v. <NAME>, All E.R.,  2.155 at 164 <CITATION> .,  2 S.C.R. 295 at 314 Heydon's case (1584) 3 Co Rep 7a: 76 ER 637; <CITATION> , AIR 1982 Kerala 126, referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1308 of 1990.

From the Judgment and Order dated 9.12.86 of <ORG> in A.A.O. No. 421/83.

<NAME>, <NAME> and <NAME> for the Appellant.

<NAME> and <NAME> for the Respond- ents.

The Judgment of the Court was delivered by <NAME>, <NAME> Special leave is granted.

This appeal arises from the judgment of <ORG> in A.A.O. No. 421 of 1983. The sole question that arises for consideration is as regards the period of limita- tion for making a deposit to make an application under Rule 89 of Order XXI of the Civil Procedure Code, 1908 to set aside sale of immovable property sold in execution of a decree. Has the deposit to be made within 30 days from the date of sale as required by sub-rule (2) of Rule 92 of Order XXI or within 60 days from the date of sale as provided in Article 127 of the Limitation Act , 1963?

<ORG> by the impugned judgment held that Arti- cle 127 governed the period of limitation to make a deposit in terms of Rule 89. In coming to that conclusion <ORG> followed its earlier decision in <CITATION> ., AIR 1981 Mad. 254 and the decision of this Court in <CITATION> - kar & Anr.,  4 SCC 273. In the latter decision, a Bench of two Judges of this Court held that <NAME> (supra) was correctly decided on the point and the deposit made within 60 days from the date of sale was well within time.

We shall read the relevant provisions insofar as they are material. Rule 89 of Order XXI provides: "89. Application to set aside sale on deposit.--(1) Where immovable property has been sold in execution of a decree, any person claiming an interest in the property sold at the time of the sale or at the time of making the application, or acting for or in the interest of such person, may apply to have the sale set aside on his depositing in Court,--

(a) for payment to the purchaser, a sum equal to five per cent of the purchase-money, and

(b) for payment to the decree-holder, the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, less any amount which may, since the date of such proclamation of sale, have been received by the decree-holder, Rule 92(2) of Order XXI reads:

(2) ................... where, in the case of an applica- tion under Rule 89, the deposit required by that rule is made within thirty days from the date of sale, [or in cases where the amount deposited under Rule 89 is found to be deficient owing to any clerical or arithmetical mistake on the part of the depositor and such deficiency has been made good within such time as may be fixed by the <ORG>, the <ORG> shall make an order setting aside the sale]. The words shown in bracket in Rule 92(2) were substitut- ed by section 72 of the Civil Procedure Code (Amendment) Act, 1976 with effect from 1.2.1977. The object of the amendment was to afford an opportunity to the applicant to make good any deficiency in the amount deposited under Rule 89 when the deficiency occurred by reason of clerical or arithmetical mistake on his part. That amendment has no relevance to the point in issue as regards the period of limitation except to emphasise that sub-rule (2) of Rule 92 had received the special attention of <ORG> in 1976. <ORG> addressed itself particularly to the sub-rule, and yet did not, apart from the special contingency provided for by the amendment, think it neces- sary to extend the period generally prescribed under Rule 92(2) to make the deposit which is a condition precedent to an application to set aside a sale.

Rule 89 postulates an application on deposit. It says "may apply to have the sale set aside on his depositing in <ORG>". These words show that deposit is a condition prece- dent to the making of an application to set aside a sale. That condition must be satisfied within the period pre- scribed by sub-rule (2) of Rule 92, which undoubtedly is 30 days. <ORG> refused to alter that provision even when a part of the sub-rule was substituted.

No doubt on this aspect would probably have arisen had it not been for the longer period prescribed by Article 127 of the Limitation Act , 1963 (as substituted by the Amending Act 104 of 1976 with effect from 1.2.1977) for making an application under Rule 89. That Article reads:

Description Period of Time from which of suit limitation period begins to run

127. To set aside Sixty The date of a sale in execution days the sale of a decree includ- ing any such applica- tion by a judgment- debtor."

Prior to the Amending Act 104 of 1976 the period pre- scribed by Article 127 was 30 days. As a result of the amendment, a period of 60 days is provided for making an application to set aside a sale. It is important to remember that Article 127 appears in Part I of Third Division of the Schedule to the Limitation Act , 1963, dealing exclusively with applications. Article 127 thus relates solely to the making of an application and not to a deposit. This Article governs applications made under Rules 90 and 91 as well, but we are not concerned with them.

It is true that prior to the Amending Act 104 of 1976, the period prescribed for the making of an application was identical to that for the making of a deposit. But as a result of the amendment, different periods are now prescribed for the making of the deposit and the application. That it was the legislative intent to provide different periods of limitation for these two matters is, from the language used in the two enact- ments, clear and explicit. The reason why the legislature provided for different periods for the two matters which are the necessary steps--one following the other--to be taken for setting aside the sale of an immovable property sold in execution of a decree is not for the <ORG> to question. This <ORG> would not assume that the legislature made a mistake in this respect or made an omission in accomplishing what it had set out to achieve.

There is no inconsistency between the two sets of provi- sions prescribing different periods of limitation. Such inconsistency can arise only if obedience of one provision will result in disobedience of the other. While Rule 92(2) requires a deposit to be made within 30 days from the date of sale, Article 127 requires an application contemplated under Rule 89 to be made within 60 days from the date of sale. As stated earlier, the deposit must necessarily pre- cede the application for no application under Rule 89 can be made except on depositing the amount in <ORG>. We see no inconsistency in these two sets of provisions. The words of the statutes being clear, explicit and unambiguous, there is no scope to have recourse to external aid for their construction. Nevertheless in deference to the arguments of the respondents' counsel, we would refer to the Statement of Objects and Reasons in respect of clause 102 of the Bill introduced in <ORG> on 8th April, 1974 [Published in <ORG>, Section 2 , dated April 8, 1974] amending Article 127. It states:

"Clause 102 (Amendment of the Schedule to the Limitation Act , 1953)--An application to set aside a sale in execution of a decree on deposit under Rule 89 of Order XXI is re- quired to be made within thirty days from the date of the sale. Experience shows that this period is too short and often causes hardship because the judgment-debtors usually fail to arrange for moneys within that time. Banks usually take more than thirty days to sanction loans and advances. In the circumstances, entry 127 of the Schedule to the Limitation Act is being amended to increase the period of limitation to sixty days in respect of an application to set aside a sale in execution of a decree. This increase in the period of limitation will not affect the purchaser because five per cent of the purchase money is required to be paid to him. The advantage of the increased period of limitation will also be available to an application under Rule 90 or Rule 91 of Order XXI to set aside a sale in execution of a decree. In view of the increase in the period of limitation, confirmation of a sale will have to await the expiry of the increased period of limitation." (emphasis supplied) The legislative intent, as seen from the above state- ment, was indeed to extend the period prescribed for making an application and not for any other purpose. That is the reason why Article 127 was amended enlarging the period for making an application from 30 days to 60 days. That period has no bearing on the time allowed for making a deposit in respect of which the period is prescribed, not under Article 127 , but under Rule 92(2) of Order XXI, and this period has always been, and remains to be, 30 days. We see no repug- nance or inconsistency or lack of clarity in these two sets of provisions.

Appearing for the appellant (the auction purchaser), Mr. <NAME> submits that <ORG> was not justified in attempting to correct or supply, what it thought to be, a defect or an omission in the statute. He rightly contends that even if there was an omission, it was not for the <ORG> to rectify it.

The <ORG> must indeed proceed on the assumption that the legislature did not make a mistake and that it intended to say what it said: <CITATION> .,  SCR 533 at 545. Assuming there is a defect or an omission in the words used by the legislature, the <ORG> would not go to its aid to correct or make up the deficiency. The <ORG> cannot add words to a statute or read words into it which are not there, especially when the literal reading produces an intelligible result. "No case can be found to authorise any court to alter a word so as to produce a casus omissus": Per Lord <NAME>, <ORG> v. <NAME>.  13 App. Cas. 595, 602. "We cannot aid the legislature's defective phrasing of an Act, we cannot add and mend, and, by construction, make up deficiencies which are left there": <NAME> v. <NAME>,  6 Moore P.C. 1, 8, 9.

Where the language of the statute leads to manifest contra- diction Of the apparent purpose of the enactment, the <ORG> can, of course, adopt a construction which will carry out the obvi- ous intention of the legislature. In doing so "a judge must not alter the material of which the Act is woven, but he can and should iron out the creases.": Per <NAME>, L.J., as he then was, Seaford <ORG> Estates v. <NAME>, All E.R. [1949] 2 155 at 164. See the observation of <NAME>, J. in <CITATION> .,  2 S.C.R. 295 at 314.

In the construction of the relevant provisions, we see no contradiction or ambiguity or defect or omission. We see no merit in the argument that Article 127 must override Rule 92(2) of Order XXI in respect of limitation. We view both the provisions as prescriptive of time for different pur- poses, and of equal efficacy and particularity. The maxim generalia specialibus non derogant has no relevance to their construction. Nor does the principal in <NAME>'s case  3 Co Rep 7a: 76 ER 637 offer any help on the point in issue. The mischief which the legislature had set out to remedy by amendment of Article is what is stated in the objects and reasons clause. That object was accomplished by prescribing a longer period for filing an application to set aside a sale in execution of a decree. Further more, as already seen, by amendment of Rule 92(2) of Order XXI an opportunity was accorded to the depositor to make good the deficiency in the deposit made by him due to arithmetical or clerical mistake on his part. In no other respect did the legislature evince an intention to extend the period prescribed for making the deposit. It would perhaps have been better, more logical, reasonable and practical, as stated by <ORG> in <CITATION> , AIR 1982 Kerala 126, to enlarge the period for making the deposit so as to make it identical with that prescribed for making the appli- cation, and such extended period would have better served the object of the amendment, namely, ameliorating the plight of the judgment-debtor, but such are matters exclusively within the domain of legislation by <ORG> and the <ORG> cannot presume deficiency and supply the omission. The legislature did not do more than what it did. It has, in our view, accomplished what it had set out to achieve. No more no less.

In the circumstances, we hold that the correct construc- tion of Rule 92(2) of Order XXI of the Civil Procedure Code, 1908 leads to the irresistible conclusion that the time for making a deposit in terms of Rule 89 of Order XXI is 30 days, and Article 127 of the Limitation Act , 1963 prescrib- ing the period for making an application under Rule 89 has no relevance to the prescribed time for making the deposit.

<NAME>

Neither provision has any effect on the other as to time. All decisions the contrary on the point, we hold, are incorrect. With the greatest respect, we disagree with the contrary view expressed in <CITATION> .,  4 SCC 273.

On the question of limitation the judgment of <ORG> is set aside, and the appeal is allowed to that ex- tent. We make no order as to costs.

R.N.J. Appeal allowed.


JUDGMENT <NAME>, J.

1. The question to be determined in this appeal is whether the provisions of the Punjab Urban Immovable Property Tax Act (Punj. Act No. XVII of 1940), which will hereinafter be referred to as the Punjab Act , are beyond the powers of <ORG> which enacted it. The question arose under the following circumstances.

2. The appellant is the owner of a shop in the town of Amritsar. Under the Act , to which reference has been made, he was called upon to pay, a sum of Rs. 67-8-0 as property tax for the year 1943-44 in respect of the shop. At first, he denied his liability to pay the amount, but, subsequently, he paid it under protest, and thereafter instituted a suit in <ORG> at Amritsar, claiming its refund on the ground that the Act which levied the property tax was ultra vires <ORG>. This suit was dismissed, and thereupon, he made an application for revision to <ORG>, but the application also was dismissed. While dismissing the application, however, <ORG> granted a certificate under Section 205(1) of the Government of India Act, 1935, and he has accordingly preferred an appeal in this Court.

3. At the hearing of the appeal, <ORG> (the present respondent in the appeal) was represented by the Advocate-General of East Punjab, and the Advocate-General of Bombay was also heard, on the ground that <ORG> was interested in the constitutional point involved in the appeal.

4. In order to appreciate the grounds on which the Punjab Act is called in question, a brief reference to some of the provisions of the Government of India Act, 1935, seems necessary.

5. Under Section 316 of the Government of India Act, 1935, the powers conferred on <ORG> are exercisable by <ORG>. Section 99(1) of the Government of India Act gives the power to <ORG> to make laws for the whole or any part of British India or any federated State, and to <ORG> to make laws for the Province or for any part thereof. This section is followed by Section 100 , which runs as follows:

(1) Notwithstanding anything in the two next succeeding sub-sections, <ORG> has, and <ORG> has not, power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to this Act (hereinafter called the 'Federal Legislative List').

(2) Notwithstanding anything in the next succeeding sub-section, <ORG>, and subject to the preceding sub-section, <ORG> also, have power to make laws with respect to any of the matters enumerated in List III in the said Schedule (hereinafter called the 'Concurrent Legislative List').

(3) Subject to the two preceding sub-sections, <ORG> has, and <ORG> has not, power to make laws for a Province or any part thereof with respect to any of the matters enumerated in List II in the said Schedule (hereinafter called the 'Provincial Legislative List').

(4) <ORG> has power to make laws with respect to matters enumerated in the Provincial Legislative List except for a Province or any part thereof.

6. Lastly Section 107(1) provides that:

If any provision of a <ORG> law is repugnant to any provision of a <ORG> law which the <ORG> Legislature is competent, to enact or to any provision of an existing Indian law with respect to one of the matters enumerated in the Concurrent Legislative List, then, subject to the provisions of this section, the <ORG> law, whether passed before or after the <ORG> law, or, as the case may be, the existing Indian law, shall prevail, and the <ORG> law shall, to the extent of the repugnancy, be void.

7. The relevant items of Lists I and II to which reference may now be made are: item 54 of List I which is "Taxes on income other than agricultural income" and item 42 of List II which comprises "Taxes on lands and buildings, hearths and windows." It is obvious that while <ORG> is quite competent to levy the tax referred to in item 42 of List II, it cannot encroach on the subjects allotted to <ORG> within the ambit of item 54 or any other item in List I. It must also be conceded that if the subject-matter of a tax falls within item 54 of the Federal List and also under item 42 of the Provincial List, the power of <ORG> must prevail to the exclusion of the power of <ORG>. As the impugned tax purports to be a tax on buildings, it falls prima facie under item 42 of List II, and, if on a proper examination of the matter it is found that in fact and in law it does so fall and does not fall under item 54 of List I, there can be no doubt that it was within the legislative competence of <ORG> to levy such a tax. The appellant however contends that the tax does not properly fall within item 42 of List II, and he assails the Act imposing the tax on two grounds. First, it is contended that if the expression "taxes on buildings" is construed in the light of British legislative practice as also with reference to the context in which it occurs, it must be held to refer to some kind of occupation tax payable by the occupier of the building and not by the owner. On this line of reasoning, it is urged that <ORG> was not competent to levy the present tax which is a tax on the owner.

8. Secondly, it is urged that the impugned tax is in substance a tax on income and as such falls under item 54 of List I, and not under item 42 of List II. To levy such a tax, it is contended, was beyond the power of <ORG>.

9. In support of the first contention, the learned advocate for the appellant relied on the well-known observations of Lord <NAME> in Croft v. <NAME> [1933] A.C. 156 which run as follows (p. 165) :-

When a power is conferred to legislate on a particular topic it is important, in determining the scope of the power, to have regard to what is ordinarily treated as embraced within that topic in legislative practice and particularly in the legislative practice of the <ORG> which had conferred the power. Thus in considering what might be appropriately and legitimately enacted by <ORG> under its power to legislate in relation to 'bankruptcy and insolvency', it was considered relevant to discuss the usual contents of bankruptcy statutes.

10. It was contended that in interpreting the words "tax on buildings", which occur in List II, regard should be had to the legislative practice prevailing in England; and further that since the taxes on buildings in England, or rates as they were called, were generally speaking in the nature of an occupation tax payable by the occupier, it could not have been contemplated by <ORG> that the expression "tax on buildings" should be something other than an occupation tax and embraces tax payable by the owner. This line of argument has its own inherent weakness, but it is further weakened by three important concessions which the learned advocate for the appellant is obliged to make: (1) that even in England taxes on lands are generally payable by the owner, (2) that the Inhabited House Duty Act, on which reliance was placed, had been repealed many years before the enactment of the Government of India Act, and (3) that, on a reference to a large number of Provincial Act s which have been in force in different parts of the country for a long time prior to the enactment of the Government of India Act, it would appear that taxes on lands and buildings imposed properly upon the owners have been for very many years a well-recognized form of taxation within many municipal areas in India.

11. In In re The Central Provinces and Berar Act No. XIV of 1938  F.C.R. 18, where a question arose whether an Act of a Provincial Legislature levying a tax on retail sales of motor spirit and lubricants was ultra vires <ORG>, the tax being in the nature of a duty of excise within the meaning of entry 41 in List I of the Seventh Schedule to the Government of India Act, Sir <NAME> observed (p. 53):

Lastly, I am entitled to look at the manner in which Indian legislation preceding the Constitution Act had been accustomed to provide for the collection of excise duties;: for <ORG> must surely be presumed to have had Indian legislative practice in mind and, unless the context otherwise requires, not to have conferred a legislative power intended to be interpreted in a sense not understood by those to whom the Act was to apply.

12. If therefore the legislative practice in India is to be taken into consideration, the appellant's argument could be met, by saying that <ORG> might well have intended to enable the Provincial Governments to continue to impose taxes of the nature imposed in different parts of the country for many years past. It seems however unnecessary to pursue the matter further, because the point can, in our opinion, be disposed of on a surer ground. It appears to us that when the words used in the Act are clear and unambiguous, and they are not unfamiliar or uncommon words or such words as may be aptly described as terms of art, it is unnecessary to travel beyond the Act for the purpose of construing them. Item 42 of List II deals with taxes on "lands and buildings, hearths and windows". There are no words in the Act to suggest that the tax is to be paid only by the occupier and not by the owner, and it seems to us to be wholly wrong to read in item 42 words which do not occur there and thereby to limit the scope and meaning of the expressions used. It is suggested that all the words used in item 42 should be read together, and that if they are so read, it must follow that the tax on buildings should be of the same nature as the tax on hearths and windows, which, it is said, must be in the nature of a "consumption tax" payable by the occupier. This argument also appears: to us to be based on unwarranted assumptions. The mere fact that the words "hearths and windows" occur along with the words "lands and buildings" in item 42, does not indicate that they must all be necessarily read together, and that the tax on lands and buildings must be of the same nature and incidence as the tax on hearths and windows. It is quite conceivable that the tax on buildings may be levied on the owner, whereas the-tax on hearths and windows may be levied on the occupier and vice versa. The correct position has, in our opinion, been summed up very lucidly by the learned Chief Justice of <ORG> in the following passage in his judgment:-

It may well have been the policy of <ORG> to tax occupiers of lands and buildings, etc., and not the owners. In each of the Acts referred to by Mr. <NAME> the tax was in terms imposed upon the occupier. The fact that it was the policy of <ORG> to tax occupiers cannot be used to construe the words appearing in item 42. It appears to me that if <ORG> when enacting the Government of India Act intended Provincial Legislatures to tax occupiers only and not owners of lands and buildings, they would have said so. It would have been the obvious thing to say and the fact that they did not say so makes it clear to my mind that <ORG>, intended Provincial Legislatures to have power to impose any taxes on lands and buildings, hearths and windows, which they could legitimately do.

When words in a statute are clear and unambiguous, effect must be given to the plain grammatical meaning of the words. By no stretch of imagination can it be said that item 42 is ambiguous. The words are clear and they entitle <ORG> to impose taxes on lands and buildings, hearths and windows without reference to who has to pay such taxes. If the tax can legitimately be paid by the owner, then it appears to me that item 42 would cover such tax, as it would cover a tax legitimately payable by the occupier. It seems to me, therefore, that no assistance can be obtained from what had been the policy of <ORG> in construing this particular item.

13. The second contention put forward on behalf of the appellant is a more serious one, and needs very careful examination. Section 3 of the Punjab Act, which, is the charging section in the Act, is in these terms:

3. (1) There shall be charged, levied and paid an annual tax on buildings and lands situated in the rating areas shown in the schedule to this Act at such rate, not exceeding twenty per centum of the annual value of such buildings and lands, as <ORG> may by notification in the Official Gazette direct in respect of each such rating area.

(2) The Provincial Government may by similar notification direct that during the continuance of the present state of war and for a period not exceeding twelve months after the termination thereof there shall be charged, levied and paid, in addition to the tax leviable under Sub-section (1), a surcharge not exceeding fifty per centum of the rate notified under that sub-section.

(3) <ORG> may, by notification in the Official Gazette, from time to time add to, omit or vary any of the entries contained in the schedule to this Act.

(4) The tax shall be paid by the owner of the buildings and lands in respect of which it has been levied.

14. This section must be read with Section 5 of the Act which is to the following effect:

The annual value of any land or building shall be ascertained by estimating the gross annual rent at which such land or building together with its appurtenances and. any furniture that may be left for use or employment with such building might reasonably be expected to let from year to year, less

(a) any allowance not exceeding twenty per centum of the gross annual rent as the assessing authority in each particular case may consider reasonable rent for the furniture let with any such building;

(b) an allowance of ten per centum for the cost of repairs and for all other expenses necessary to maintain such building in a state to command such gross annual rent. Such deduction shall be calculated on the balance of the gross annual rent after the deduction, if any, under Clause (a) and

(c) any land revenue actually paid in respect of such building or land:

Provided that in calculating the annual value of any building or land under this section the value of any machinery in such building or on such land shall be excluded.

15. It was contended on behalf of the appellant that on a perusal of Section 3 and other provisions of the Act, it would appear that the basis of the tax is the annual value of the building and, since the same basis is used in the Indian Income-tax Act for determining income from property, and generally speaking the annual value is the fairest standard for measuring income and, in many cases, is indistinguishable from it, the tax levied by the impugned Act is in substance a tax on income. This conclusion does not seem to follow from a mere perusal of Section 3 of the Act, because all that it provides is that there shall be an annual tax on buildings at such rate not exceeding twenty per cent, of the annual value of such buildings, as <ORG> may direct in respect of each rating area. It is possible as a matter of first impression, to read this provision as meaning that while 20 per cent, of the annual value is fixed merely as the ceiling, the rate of tax on a building may have no reference to and be quite independent of the annual value of the building. On this interpretation, the tax will not be open to attack on the grounds urged. But the Act is to be read as a whole, and, having regard to the elaborate provisions made in it for determining the annual value of buildings and to the fact that the rate actually fixed in <ORG> has a direct reference to the annual value, there can be no doubt that the basis of the tax is annual value. The appellant's contention therefore has to be examined on the footing that the basis of the tax under the Punjab Act is the annual value of the property to be taxed.

16. The proper approach to a question such as the one we have before us has been aptly defined by Lord <NAME> in <NAME> v. <NAME> [1937] A.C. 863 in these words (p. 870):-

It is well established that you are to look at the 'true nature and character of the legislation'; <NAME> v. The Queens (1882) 7 App. Cas. 829 'the pith and substance of the legislation.' If, on the view of the statute as a whole, you find that the substance of the legislation is within the express powers, then it is not invalidated if incidentally it affects matters which are outside the authorized field. The legislation must not under the guise of dealing with one matter in fact encroach upon the forbidden field. Nor are you to look only at the object of the legislator. An Act may have a perfectly lawful object, e.g., to promote the health of the inhabitants, but may seek to achieve that object by invalid methods, e.g., a direct, prohibition of any trade with a foreign country. In other words, you may certainly consider the clauses of an Act to see whether they are passed 'in respect of the forbidden subject.

17. The Punjab Act purports to tax property which prima facie <ORG> is allowed to do under item 42 of List II of the Government of India Act. But if it appears that the impugned tax, in the guise of dealing with property, is in fact and in substance a tax on the income of the owner of property, then, undoubtedly, the Act is not a valid one. It is argued on behalf of the appellant that the moment it is seen that the basis of the tax is the annual value of property, which is the very basis used by the Indian Income-tax Act for assessing income from property, it should be held that it is in substance a "tax on income" which is a subject outside the authorised field of <ORG>. The argument appears at first sight to be quite a plausible one, but, on closer examination, the conclusion suggested does not seem to follow so readily from the premises enunciated, as is assumed. If the annual value of house property represented in every case the actual income of the owner from the property, the question would not have presented so much difficulty. But that is not so. In many cases, the annual value may approximate to actual income, but, in quite a number of cases, it may not. It is evident that in many cases, there may be a great divergence between the annual value of a property and the actual profits derived or received by the owner from it. It is also possible to conceive of cases in which the property to be taxed does not actually yield any income whatsoever, though every property must have some notional annual value. As has been pointed out in treatises on income-tax, many of the rules framed under the Income-tax Act are highly artificial, so that "income calculated for purposes of income-tax does not by any means necessarily correspond with the income actually received in the year which can be spent or saved." One of these artificial rules is the rule of estimating income from property. This was conceded in A Reference under the Govrnment of Ireland Act, 1920 and Section 3 of the Finance Act (Northern Ireland), 1934 In re  A.C. 352, where it was Stated that "the method of assessing income derived by ownership or occupation of property is somewhat arbitrarily based on the annual value and not the actual income." Similarly, <NAME> observed in <CITATION> : Essex Hall, Ex Parte  2 K.B. 434, cited in <CITATION>  Bom. 58, 80, s.c. 42 Bom. L.R. 10, f.b.:

An assessment upon 'annual value' may, for certain purposes, be treated, in applying the Income-tax Act s, as an equivalent for an assessment upon 'gains and profits'; but they are not simply synonymous or interchangeable expressions.

18. Now once it is realised that the annual value is not necessarily actual income, but is only a standard by which income may be measured, much of the difficulty which appears on the surface is removed. In our opinion, the crucial question to be answered is whether merely because the Income-tax Act has adopted the annual value as the standard for determining the income, it must necessarily follow that, if the same standard is employed as a measure for any other tax, that tax becomes a tax on income ? If the answer to this question is to be given in the affirmative, then certain taxes which cannot possibly be described as income-tax must be held to be so. A case in point is to be found in A Reference under the Government of Ireland Act, 1920 and Section 3 of the Finance Act (Northern Ireland), 1934, In re (supra). The question which arose in that case was whether the provisions of Section 3 of the Finance Act (Northern Ireland), 1934, were beyond the powers of <ORG>. Section 3 of the Act of 1934 imposed a tax on the council of every county and county borough, and the tax was computed on the basis of the rateable value of the county council or county borough. There was no dispute in that case that the "rateable value" corresponded to the "annual value" as understood in the Income-tax Act , but it was held that the mere fact that the basis of the tax was rateable or annual value was not enough to make it a tax on income. Lord <NAME>, who delivered the judgment in that case, pointed out that "it is the essential character of the particular tax charged that is to be regarded, and the nature of the machinery, often complicated, by which the tax is to be assessed is not of assistance except in so far as it may throw light on the general character of the tax." The tax was not held to be a tax on income, because it was payable by an occupier, and the distinctive feature of the case was described in these words (p. 359):

... the poor rate is levied in respect of the occupation of hereditaments, irrespective of a person's income generally, and irrespective of whether the rate-payer is in fact deriving profits or gains from such occupation. A dwelling-house is a burden, not a source of profit, for the occupier who pays rent for it. He is rated on the value of the burden, while he remains unrated in respect of his whole profits, be they from business or from investments. In their Lordships' opinion this marks the essential difference in character between income-tax and rates, and it is unnecessary to consider other and less important differences between them.

19. This case demolishes the broad contention that wherever the annual value is the basis of a tax, that tax becomes a tax on income. It shows that there are other factors to be taken into consideration and that it is the essential nature of the tax charged and not the nature of the machinery which is to be looked at.

20. Now, when looking at the machinery by which the tax is to be assessed, one cannot overlook the difference in the modes of estimating the annual value adopted under the Punjab Act and the Income-tax Act respectively. Section 5 of the Punjab Act, which lays down the mode of estimating the annual value, has been quoted before, and a reference to it would show that besides making an, allowance for the rent of furniture which, under the section, is to be taken into consideration in estimating the annual value, it permits two allowances only: (1) an allowance of 10 per cent, for the cost of repairs and other expenses necessary for maintaining the building, and (2) any land revenue actually paid in respect of such building. Section 9 of the Income-tax Act however is a much more elaborate provision, and sets out the deductions allowable in seven clauses, which include cost of repairs, insurance premia, interest on mortgages and charges, land revenue, collection charges and vacancies. A comparison of the above provisions will show that whereas under the Income-tax Act every effort has been made to get at the true income or profits from the property, no such intention is apparent in Section 5 of the Punjab Act, which does not permit any deduction in respect of any items of expenditure except' two, and which draws no distinction between encumbered and unencumbered property or occupied and vacant property. Thus, under Section 3 of the Punjab Act, the tax will be payable, whether the property is profitable or not. It would also be payable even though there may be a mortgage existing on the property, no matter what the' amount of interest payable under it may be. Indeed it was contended on behalf of the respondent that the omission from the Act of any allowance for such outgoings as interest on mortgages is difficult to explain, except on the footing that the basis of the tax is something not dependent on the income of the assessee.

21. It was urged on behalf of the appellant that the difference between the two Acts as to the mode of assessing annual value is accidental and is made conspicuous only by reason of the number of deductions allowed under the present Income-tax Act , It was also pointed out that in the old Income-tax Act s, and especially in' the Income-tax Act of 1886, deductions were not allowed on such a liberal scale. That, however, does not, in our opinion, dispose of the matter. It has to be remembered that the Punjab Act was passed in 1940, by which time the Income-tax law had been greatly developed, and a comparison between that Act and the Indian Income-tax Act as it stood then cannot be ruled out lightly. After all, what we have to find is whether the intention of the Punjab Act was to tax income, and whether in fact it did tax income. If we find that the basis of the tax, though described as annual value, is something not necessarily synonymous with income and is something very different from the annual value as estimated in the Income-tax Act , we have to seriously ask ourselves whether the tax which the Punjab Act purports to impose can legitimately be said to be in substance a tax on income. "Annual value" is after all a mere expression, and what we are concerned with is not the mere expression but its meaning and scope in relation to actual income. It was easy enough for <ORG> to adopt the standard and the machinery employed in the Income-tax Act for getting at the profits from property, if it was their intention to do so, but it has not been done. The real distinction between these two Acts seems to be that whereas the Income-tax Act purports to get at the true income, there is no such pretence in the impugned Act which uses the annual value merely for the purpose of determining the importance or the value of the property to be taxed.

22. Reference may be made here to the decision of a special bench of <ORG> in <CITATION>  Bom. 58, s.c. 42 Bom. L.R. 10, f.b. The point which arose in that case was precisely the same as the one raised before us. The point was whether the Urban Immovable Property Tax levied by Section 22 of the amended Bombay Finance Act, 1932, was beyond the powers of <ORG>, on the ground that it was essentially a tax on income.

23. Section 22 of that Act provided that "there shall be levied and paid to <ORG> a tax on buildings and lands hereinafter called the 'urban immovable property tax' at ten per cent, of the annual letting value of such buildings and lands." The learned Judges who heard the case came to the unanimous conclusion that the Act was not ultra vires, and delivered three very elaborate and instructive judgments which deal with all the important aspects of the case. These judgments were read to us almost in extenso in the course of the arguments, and we agree generally with the conclusions arrived at in them and with most of the reasonings by which they are supported.

24. Our own conclusion may be summed up very briefly. In the first place, we have to look into the charging section of the statute, because as was pointed out in Provincial Treasurer of Alberta v. <NAME> [1933] A.C. 710, "the identification of the subject-matter of the tax is only to be found in that section." The charging section in the present case is Section 3 , which in clear terms levies not a tax on income but a tax on buildings and lands. It is true that we must look not to the mere form but to the substance of the levy, and the tax must be held to be invalid, if in the guise of a property tax it is really a tax on income. There is however nothing in the impugned Act to show that there was any intention on the part of the <ORG> to get at or tax the income of the owner from the building. It is true that the annual value was used as the basis, but it was very different from the annual value which may be used for getting at the true profits or income. The annual value, as has been pointed out, is at best only notional or hypothetical income and not the actual income. It is only a standard used in the Income-tax Act for getting at income, but that is not enough to bar the use of the same standard for assessing a Provincial tax. If a tax is to be levied on property, it will not be irrational to correlate it to the value of the property and to make some kind of annual value the basis of the tax, without intending to tax income. This is precisely what was emphasized by <NAME> in the following passage in his judgment in <CITATION>  Bom. 58, s.c. 42 Bom. L.R. 10, f.b (p. 82) :

Suppose a tax were imposed of x rupees on every house in Bombay, payable by the owner. That would be a crude and unequal impost, but perfectly legal. It would be more equitable, but still I imagine perfectly legal, if the tax were graded according to the size of the building, the number of storeys or rooms, or according to the extent of frontage on important streets, or according to the cost of construction. Why should it not be permissible to go a little further in the direction of making the amount of the tax correspond to the importance and value of the properties, by employing the standard basis of assessment of municipal property taxes? If annual value had been equivalent to income that would not be possible, for income may not be taxed by <ORG>. But when you speak of income being taxed, within the meaning of item 54, what has to be considered in my opinion is actual income, and not the hypothetical income arbitrarily adopted for income-tax purposes.

25. In the case of <NAME> v. Muthuswami Goundan [1940] F.C.R. 188 Sir Maurice Gwyer C.J. observed as follows (p. 201):

It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the <ORG> enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by <ORG> whereby the impugned statute is examined to ascertain its 'pith and substance,' or its 'true nature and character,' for the purpose of determining whether it is legislation with respect to matters in this list or in that.

26. Again in In re The Central Provinces and Berar Act No. XIV of 1938  F.C.R. 18, 53 where, as already stated, the question arose whether a tax on the sale of motor spirits was a tax on the sale of goods within item 48 of the Provincial List or a duty of excise within item 45 of the Federal List, the learned Chief Justice observed as follows (p. 43):

It appears then that the language in which the particular legislative powers which the Court is now considering have been granted to the Central and Provincial Legislatures respectively may be wide enough, if taken by itself and without reference to anything else in the Act, to cover in each case a tax of the kind which has been imposed, whether it be called an excise duty, if imposed by <ORG>, or a tax on the sale of goods, if imposed by a Province....

Only in the Indian Constitution Act can the particular problem arise which is now under consideration; and an endeavour must be made to solve it, as <ORG> have said, by having recourse to the context and scheme of the Act, and a reconciliation attempted between two apparently conflicting jurisdictions by reading the two entries together and by interpreting, and, where necessary, modifying, the language of the one by that of the other. If indeed such a reconciliation should prove impossible, then, and only then, will the non obstante clause operate and the federal power prevail; for the clause ought to be regarded as a last resource, a witness to the imperfections of human expression and the fallibility of legal draftsmanship.

27. The principles deducible from these pronouncements are (1) that where there is an apparent conflict between an Act of the Federal Legislature and an Act of the Provincial Legislature, we must try to ascertain the pith and substance or the true nature and character of the conflicting provisions, and (2) that, before an Act is declared ultra vires, there should be an attempt to reconcile the two conflicting jurisdictions, and, only if such a reconciliation should prove impossible, the impugned Act should be declared invalid.

28. There is also another mode of approaching the subject, which was indicated by <ORG> in <NAME> v. <ORG>, Khulna (1947) L.R. 74 I.A. 23, s.c. 49 Bom. L.R. 568, where the question was whether the substance of the Bengal Money Lenders Act was money-lending (a Provincial subject) or promissory notes or banking (a <ORG> subject). Their Lordships made the following observations (p. 43):

Thirdly, the extent of the invasion by the provinces into subjects enumerated in the <ORG> List has to be considered. No doubt it, is an important matter, not, as their Lordships think, because the validity of an Act can be determined by discriminating between degrees of invasion, but for the purpose of determining what is the pith and substance of the impugned Act. Its provisions may advance so far into <ORG> territory as to show that its true nature is not concerned with provincial matters, but the question is not, has it trespassed more or less, but is the trespass, whatever it be, such as to show that the pith and substance of the impugned Act is not money-lending but promissory notes or banking?

29. It is true that in all these pronouncements, the real emphasis is laid on the necessity of ascertaining the pith and substance, but they also contain useful guidance as to how the <ORG> should proceed when they have to deal with two apparently conflicting enactments. The conclusion we have arrived at is that in substance the impugned tax is not a tax on income, that it is not impossible to reconcile the seeming conflict between the provisions of the two Acts, and that the extent of the alleged invasion by <ORG> into the field of <ORG> is not so great in the present case as to justify the view that in pith and substance the impugned tax is a tax on income. In our opinion, therefore, the appeal must fail, and it is dismissed with costs to <ORG>, the respondent in the appeal.