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Friday, January 24, 2014

The Gujarat (earlier ‘Bombay’ prior to the amendment in its application in the State of Gujarat) Tenancy and Agricultural Lands (Vidarbha Region and Kutch Areas) Act, 1958 (Tenancy Act, 1958 for short). - Sale of agricultural land with permission under sec.89 of Tenancy Act to the company Indigold to start industry - but the company not started industry even after 5 years - that company sold the same directly to another company for higher price with out permission -Govt. sanctioned permission for second sale also against the provisions of Act- Challenging Pil filed - High court dismissed the Pil - Apex court held that as per Act - the property vest in the Government as the first company failed to set up industry - but failed to resume the land after determining compensation - Private sale to Alumina company - was directly order to be accepted by the Ministry itslef but not by collector independently - High court failed to look in to all these aspects - Apex court set aside the order of high court and also set aside the orders of Govt. and collector orders sanctioning permission for second sale - The Apex court in the circumstances of the case directed the amount paid by Alumina to Indigold be adjusted as compensation - further directed the Alumina to pay 3.5 crores to the Govt. with in 3 months, and direct the govt. to sanction permission after that only = Dipak Babaria & Anr. … Appellants Versus State of Gujarat & Ors. … Respondents = 2014 ( January - Vol - 1) Judis.nic.in/ S.C./ file name =41172

 The  Gujarat  (earlier  ‘Bombay’  prior  to  the amendment  in  its  application  in  the  State  of  Gujarat)  Tenancy   and Agricultural Lands (Vidarbha Region and  Kutch  Areas)  Act,  1958  (Tenancy Act, 1958 for short).  - Sale of agricultural land with permission under sec.89 of Tenancy Act to the company Indigold to start industry - but the company not started industry even after 5 years - that company sold the same directly to another company for higher price with out permission -Govt. sanctioned permission for second sale also against the provisions of Act- Challenging Pil filed - High court dismissed the Pil - Apex court held that as per Act - the property vest in the Government as the first company failed to set up industry - but failed to resume the land after determining compensation - Private sale to Alumina company - was directly order to be accepted by the Ministry itslef but not by collector independently - High court failed to look in to all these aspects - Apex court set aside the order of high court and also set aside the orders of Govt. and collector orders sanctioning permission for second sale - The Apex court in the circumstances of the case directed the amount paid by Alumina to Indigold be adjusted as compensation - further directed the Alumina to pay 3.5 crores to the Govt. with in 3 months, and direct the govt. to sanction permission after that only =
 
    The Writ Petition had various prayers, but  essentially  it  sought
to challenge the permission granted by the Collector, Bhuj, to sell  certain
parcels of agricultural land situated in district Kutch, which were said  to
have been purchased earlier by the  respondent  No.4  herein,  one  Indigold
Refinery Limited of Mumbai, for industrial purpose in favour  of  respondent
No.5 i.e. one Alumina Refinery Limited, Navi Mumbai, as being  impermissible
under  the  provisions  of  the  Gujarat  (earlier  ‘Bombay’  prior  to  the
amendment  in  its  application  in  the  State  of  Gujarat)  Tenancy   and
Agricultural Lands (Vidarbha Region and  Kutch  Areas)  Act,  1958  (Tenancy
Act, 1958 for short).  
It was submitted that under Section 89A of this  Act,
agricultural land can be  permitted  to  be  sold  by  an  agriculturist  to
another person for industrial purpose provided the proposed  user  is  bona-
fide. 
In the event, the land is not so utilised by such a  person  for  such
purpose, within the period as stipulated under the  act,  the  Collector  of
the concerned district has to make an enquiry under sub-Section  5  thereof,
give an opportunity to the purchaser with a view to  ascertain  the  factual
situation, and thereafter pass an order that the  land  shall  vest  in  the
State Government on payment of an appropriate compensation to the  purchaser
which the Collector may determine.  
It  was  contended  that  there  was  no
provision for any further transfer of agricultural land from one  industrial
purchaser to any third party, once again, for industrial  purpose  when  the
first purchaser of  agricultural  land  had  defaulted  in  setting  up  the
industry. 
Apart from being in breach of the law, the transaction was  stated
to be against public interest, and a mala-fide one resulting into a  serious
loss to the public exchequer. 
The Writ Petition criticised the role  of  the
Collector and the Revenue Minister of the State Government,  and  sought  an
inquiry against them in the present case, and also a direction to the  state
authorities to resume the concerned land.
3.          The impugned judgment and order rejected the said writ  petition
on two grounds, firstly that there was delay in initiating the  said  Public
Interest Litigation (PIL), and that the writ petitioner had  suppressed  the
material facts before the Court concerning the investment  claimed  to  have
been made by the respondent No.5.
4.          The writ petition, and now this appeal  raise  the  issues  with
respect to the underlying policy and purpose behind the relevant  provisions
of the Tenancy Act, 1958.  
In that connection,  it  also  raises  the  issue
with respect to the duties of the revenue officers on the spot, such as  the
Collector, the importance of the role of senior administrative  officers  of
the State Government, and whether a Minister of the  Government  can  direct
the administrative officers  and  the  Collector  to  act  contrary  to  the
provisions and policy of the statute.  =
Chapter VIII of the Tenancy Act, 1958.  The sections read as follows:-

                                “CHAPTER VIII
               RESTRICTIONS ON TRANSFERS OF AGRICULTURAL LANDS
                    AND ACQUISITION OF HOLDINGS AND LANDS

                 89 Transfers to non-agriculturists barred.-
Transfers to           (1) Save as provided in this Act,
non-agricul-
turists barred
                    a) no sale (including sales in execution of a decree  of
                       a Civil Court or for  recovery  of  arrears  of  land
                       revenue or for sums recoverable as  arrears  of  land
                       revenue), gift exchange  or  lease  of  any  land  or
                       interest therein, or

                    b) no mortgage of any land or interest therein, in which
                       the possession of the mortgaged property is delivered
                       to the mortgagee,

           shall be valid in favour of a person who is not an agriculturist
           or who being an agriculturist  cultivates  personally  land  not
           less than three family holdings whether as owner  or  partly  as
           tenant or who is not an agricultural labourer:

           Provided that the Collector or  an  officer  authorised  by  the
           State Government in this behalf may grant  permission  for  such
           sale, gift, exchange, lease or mortgage, in  such  circumstances
           as may be prescribed:

           [Provided further that no  such  permission  shall  be  granted,
           where  land  is  being  sold  to  a  person  who   is   not   an
           agriculturists for agricultural purpose, if the annual income of
           such person from other source exceeds five thousand rupees.]

           (2) Nothing in this section shall  be  deemed  to  prohibit  the
           sale, gift, exchange or lease of a dwelling house  or  the  site
           thereof  or  any  land  appurtenant  to  it  in  favour  of   an
           agricultural labourer or an artisan.

           (3) Nothing in this section shall apply to  a  mortgage  of  any
           land or interest therein effected in favour  of  a  co-operative
           society as security for the land advanced by such society.

           (4)  Nothing in section 90 shall apply to any  sale  made  under
           sub-section (I).

                  89A.  Sale  of  land  for  bonafide  industrial   purpose
           permitted in certain cases:-

                 (1) Nothing in section 89 shall prohibit the sale  or  the
           agreement for the sale  of  land  for  which  no  permission  is
           required under sub-section (1) of section 65B of the Bombay Land
           Revenue Code, 1879 (Bom. V of 1879) in favour of any person  for
           use of such land by  such  person  for  a  bonafides  industrial
           purpose:

                 Provided that—

              a) the land is not situated within the urban agglomeration  as
                 defined in clause (n)  of  section  2  of  the  Urban  Land
                 (Ceiling and Regulation) Act, 1976 (33 of 1976),

              b) where the area of the land proposed to be sold exceeds  ten
                 hectares, the person to whom the land  is  proposed  to  be
                 sold in pursuance of this sub-section shall obtain previous
                 permission of the Industries Commissioner,  Gujarat  State,
                 or such other officer, as the State Government may,  by  an
                 order in writing, authorise in this behalf.

              c) the area of the land proposed to be sold shall  not  exceed
                 four times the area on which construction  for  a  bonafide
                 industrial purpose is proposed to be made by the purchaser:

                 Provided that any additional land which may be required for
                 pollution control measures or required under  any  relevant
                 law for the time being in force and certified  as  such  by
                 the relevant authority under that law shall  not  be  taken
                 into account for the purpose of computing  four  times  the
                 area.

              d) where the land proposed to be sold is  owned  by  a  person
                 belonging to the Scheduled Tribe, the sale shall be subject
                 to the provisions  of  section  73AA  of  the  Bombay  Land
                 Revenue Code, 1879 (Bom. V of 1879).

              2) Nothing in the Section 90 shall apply to any sale  made  in
                 pursuance of subsection (1).

              3) (a) Where the land is sold to a person in pursuance of sub-
                 section (1) (hereinafter referred to as  “the  purchaser”),
                 he shall within thirty days from the date  of  purchase  of
                 the land for bonafides industrial purpose, send a notice of
                 such purchase in such form alongwith such other particulars
                 as may be prescribed, to the Collector and endorse  a  copy
                 thereof to the Mamlatdar.

                 (b)   Where the purchaser fails  to  send  the  notice  and
                 other particulars to the Collector under clause (a)  within
                 the period specified therein, he shall be liable to pay, in
                 addition to the non-agricultural assessment leviable  under
                 this Act, such fine not exceeding two  thousand  rupees  as
                 the Collector may subject to rules  made  under  this  Act,
                 direct.

                 (c)   Where, on receipt  of  the  notice  of  the  date  or
                 purchase for the use of land  for  a  bonafides  industrial
                 purpose and other particulars sent by the  purchaser  under
                 clause (a), the Collector, after making such inquiry as  he
                 deems fit—

                 (i)   is satisfied that the  purchaser  of  such  land  has
                 validly  purchased  the  land  for  a  bonafide  industrial
                 purpose in conformity with the  provisions  of  sub-section
                 (1), he shall issue a certificate to  that  effect  to  the
                 purchaser in such form and with in  such  time  as  may  be
                 prescribed.

                 (ii)  is not so  satisfied,  he  shall,  after  giving  the
                 purchaser an opportunity of being heard,  refuse  to  issue
                 such certificate and on such refusal, the sale of  land  to
                 the purchaser shall be deemed to  be  in  contravention  of
                 section 89.

                 (d)  (i) The purchaser aggrieved by the refusal to issue  a
                 certificate by  the  Collector  under  sub-clause  (ii)  of
                 clause (c) may file an appeal to the  State  Government  or
                 such officer, as it may, by an order in writing,  authorise
                 in this behalf.

                 (ii)  The State Government or the authorised officer shall,
                 after giving the appellant an opportunity of  being  heard,
                 pass such order on the appeal as it or he deems fit.

              4) The purchaser to whom a certificate is  issued  under  sub-
                 clause (i) of clause (c) of sub-section (3), shall commence
                 industrial activity on such land within  three  years  from
                 the date of such certificate  and  commence  production  of
                 goods or providing of services within five years from  such
                 date:

           Provided that the period of three years or, as the case may  be,
           five years may, on an application made by the purchaser in  that
           behalf, be extended from time to time, by the  State  Government
           or such officer, as it may, by an order in writing authorise  in
           this behalf, in such circumstances as may be prescribed.

           (5)   Where the Collector, after making such inquiry as he deems
                 fit and giving the purchaser an opportunity of being heard,
                 comes to a conclusion that  the  purchaser  has  failed  to
                 commence industrial activity  or  production  of  goods  or
                 providing of services within the period specified is clause
                 (b) of sub-section (4), or the period  extended  under  the
                 proviso to that clause, the land shall vest  in  the  State
                 Government free from all encumbrances  on  payment  to  the
                 purchaser  of  such  compensation  as  the  Collector   may
                 determine, having regard to the price paid by the purchaser
                 and such land shall be disposed of by the State Government,
                 having regard to the use of land.”

Hence, the following decision:-

68.         Having noted the legal position and the factual  scenario,  the
impugned judgment and order passed by the High Court will have  to  be  set
aside.  The prayers in the PIL will have to be entertained to hold that the
direction of the State Government dated 18.12.2009 and the consequent order
issued by the Collector of Kutch on 15.1.2010 is arbitrary, and bad in  law
for being in violation of the scheme and the provisions of Sections 89  and
89A of the Tenancy Act. 
The direct sale of land by Indigold to  Alumina  is
also held to be bad in law, and inoperative.
69. (i)      In normal circumstances, the order hereafter would  have  been
to direct the Collector to proceed in accordance with Section 89A(5)  viz.,
to hold an enquiry to decide whether the purchaser viz. Indigold had failed
to commence the  industrial  activity  and  the  production  of  goods  and
services within the period specified.  
In the instant  case,  there  is  no
need of any such direction to hold an enquiry, in view  of  the  letter  of
Indigold itself, dated 6.12.2008, wherein, it clearly stated that they were
no more interested in putting up any industrial project in the said land.
(ii)  Consequently, there will be an order that the land shall vest in  the
State Government free from all encumbrances.  This vesting order,  however,
has to be on payment of appropriate compensation to the  purchaser  as  the
Collector may determine.  
In the instant case, there is no need  of  having
this determination, for the reason that Indigold has received from  Alumina
Rs. 1.20 crores as against the amount of 70 lakhs, which it had paid to the
agriculturists when it bought those lands in  2003.  
Neither  Indigold  nor
Alumina is making any grievance towards this figure or the payment thereof.
 In fact, it is the case of both of them that the direct sale  by  Indigold
to Alumina for this amount as permitted by the  State  Government  be  held
valid.  
That being so, this amount of Rs.  1.20  crores  would  be  set-off
towards the compensation which would be payable by the State Government  to
the  purchaser  Indigold,  since  the  land  was  originally  purchased  by
Indigold, and is now to vest in the State Government.
(iii) The third step in this regard is that the land is to be disposed  off
by the State Government, having regard to the use of the  land.   
The  land
was supposed to be used for the industrial activity on  the  basis  of  the
utilization of bauxite found in Kutch, and respondent No. 5 has proposed  a
plant based on use of bauxite. 
The disposal of the land will, however, have
to be at least as per the minimum price that would  be  receivable  at  the
Government rate.  
In the facts and circumstances of this case, having noted
that the respondent No.5 claims to have made some good investment, and that
the Respondent No.5  has  also  offered  to  pay,  without  prejudice,  the
difference between Rs.4.35 crores and Rs.1.20 crores i.e. Rs.3.15 cores  to
the State, the land will be permitted  to  be  disposed  of  by  the  State
Government to Alumina provided Alumina pays this amount of Rs. 3.15  crores
to the State Government.   
This  particular  order  is  being  made  having
further noted that, Alumina has acted on the basis of the  commitment  made
to it by the Government of Gujarat in the Vibrant Gujarat  Summit,  and  in
furtherance of the industrial development policy of the State. 
It  is  also
relevant to note that the respondent No.5 had made an  application  to  the
Collector in the year 2009 for permitting the purchase of the land, and has
been waiting to set up its industry for the last four  years.  
Mr.  Ahmadi,
learned senior counsel appearing for  the  appellants  has  also  submitted
that, as such, appellants are not against the development  of  Kutch  area,
but they do want the state to follow the law and exchequer not  to  suffer.
In the circumstances, although we do not approve the action  of  the  State
Government, and hold it to be clearly arbitrary and untenable,  we  are  of
the view that the aforesaid  order  will  be  appropriate  to  do  complete
justice in the matter.
70.         In the circumstances, we pass the following orders:-
(a)   The appeal is allowed in part;
(b)   The impugned judgment and order passed by  the  High  Court  is  set-
aside;
(c)   The PIL No.44 of 2012 filed by the appellants is allowed  by  holding
that the order dated 18.12.2009 passed by the Government of Gujarat and  by
the Collector of Kutch on 15.1.2010, are held to be arbitrary  and  bad  in
law;
(d)   In the facts  and  circumstances  of  this  case,  the  sale  of  the
concerned land by Indigold to Alumina is held to be bad in law.   The  land
involved in the present case is held to have vested in the State of Gujarat
 free from all encumbrances, and the amount of  Rs.  1.20  crores  paid  by
Alumina to Indigold is treated as full  payment  towards  the  compensation
payable by the State  to Indigold.
(e)   If Alumina is interested in their proposed project, it shall  pay  an
amount of Rs. 3.15 crores to the Government of Gujarat within three  months
hereafter.  On such a payment being made, an order of allotment of the land
to Alumina will be issued by the State Government.  The further  activities
of Alumina on the concerned parcel of  land  will  start  only  after  this
payment is made, and in the event the amount is not so  paid  within  three
months hereafter, the Government will proceed  to  take  further  steps  to
dispose of the land having regard to the use of the land.

(f)   In the facts of the present case, there  shall  be  no  order  as  to
costs.

 2014 ( January - Vol - 1) Judis.nic.in/ S.C./ file name  =41172     
H.L. GOKHALE, J. CHELAMESWAR

    REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                      CIVIL APPEAL N.  836     OF 2014
          (@ out of  SPECIAL LEAVE PETITION (CIVIL) NO.36738/2012)


Dipak Babaria & Anr.                               …   Appellants

                                    Versus

State of Gujarat & Ors.                                  …   Respondents



                          J  U  D  G  E  M  E  N  T


H.L. Gokhale J.

            Leave Granted.
2.          This appeal by Special Leave seeks  to  challenge  the  judgment
and order dated 30.8.2012 rendered by a Division Bench of the  Gujarat  High
Court dismissing Writ Petition (PIL) No.44 of 2012 filed by  the  appellants
herein.
The Writ Petition had various prayers, but  essentially  it  sought
to challenge the permission granted by the Collector, Bhuj, to sell  certain
parcels of agricultural land situated in district Kutch, which were said  to
have been purchased earlier by the  respondent  No.4  herein,  one  Indigold
Refinery Limited of Mumbai, for industrial purpose in favour  of  respondent
No.5 i.e. one Alumina Refinery Limited, Navi Mumbai, as being  impermissible
under  the  provisions  of  the  Gujarat  (earlier  ‘Bombay’  prior  to  the
amendment  in  its  application  in  the  State  of  Gujarat)  Tenancy   and
Agricultural Lands (Vidarbha Region and  Kutch  Areas)  Act,  1958  (Tenancy
Act, 1958 for short).  
It was submitted that under Section 89A of this  Act,
agricultural land can be  permitted  to  be  sold  by  an  agriculturist  to
another person for industrial purpose provided the proposed  user  is  bona-
fide. 
In the event, the land is not so utilised by such a  person  for  such
purpose, within the period as stipulated under the  act,  the  Collector  of
the concerned district has to make an enquiry under sub-Section  5  thereof,
give an opportunity to the purchaser with a view to  ascertain  the  factual
situation, and thereafter pass an order that the  land  shall  vest  in  the
State Government on payment of an appropriate compensation to the  purchaser
which the Collector may determine.  
It  was  contended  that  there  was  no
provision for any further transfer of agricultural land from one  industrial
purchaser to any third party, once again, for industrial  purpose  when  the
first purchaser of  agricultural  land  had  defaulted  in  setting  up  the
industry. 
Apart from being in breach of the law, the transaction was  stated
to be against public interest, and a mala-fide one resulting into a  serious
loss to the public exchequer. 
The Writ Petition criticised the role  of  the
Collector and the Revenue Minister of the State Government,  and  sought  an
inquiry against them in the present case, and also a direction to the  state
authorities to resume the concerned land.
3.          The impugned judgment and order rejected the said writ  petition
on two grounds, firstly that there was delay in initiating the  said  Public
Interest Litigation (PIL), and that the writ petitioner had  suppressed  the
material facts before the Court concerning the investment  claimed  to  have
been made by the respondent No.5.
4.          The writ petition, and now this appeal  raise  the  issues  with
respect to the underlying policy and purpose behind the relevant  provisions
of the Tenancy Act, 1958.  
In that connection,  it  also  raises  the  issue
with respect to the duties of the revenue officers on the spot, such as  the
Collector, the importance of the role of senior administrative  officers  of
the State Government, and whether a Minister of the  Government  can  direct
the administrative officers  and  the  Collector  to  act  contrary  to  the
provisions and policy of the statute.  
The Secretary of  the  Department  of
Revenue of the Government of Gujarat, and the Collector  of  District  Kutch
at Bhuj are joined as respondent Nos. 2 and 3 to this appeal.
The facts leading to this appeal are as follows:-
5.          It is pointed out by the appellants  that  the  respondent  No.4
Indigold Refinery Ltd. (Indigold for short) which is a  company  having  its
office in Mumbai, purchased eight parcels of land owned by one Virji  Jivraj
Patel and Jayaben Virji Patel residing at Bankers Colony, Bhuj,  admeasuring
in all 39 acres and 25 gunthas (i.e. roughly 40 acres) by eight  sale  deeds
all dated 30.1.2003, for a consideration of about Rs.70 lakhs.
These  eight
sale deeds are supposed to have been signed for respondent No.4 Indigold  by
one Hanumantrao Vishnu  Kharat,  its  Chairman-cum-Managing  Director.   The
lands are situated in villages Kukma and  Moti  Reldi  in  the  district  of
Kutch.
The sale deeds indicated that  the  purchaser  had  purchased  these
lands for industrial  purpose,  and  that  the  purchaser  will  obtain  the
permission from the Deputy Collector, Bhuj  for  purchasing  the  said  land
within one month from the date of those sale deeds. 
The respondent  No.4  is
said to have applied for the necessary permission under Section 89A  of  the
Tenancy Act, 1958 on 31.1.2003, and the Collector of Bhuj is stated to  have
given the requisite certificate of purchase of the lands  under  sub-section
(3) (c) (i) of the said section.  
It appears that thereafter no  steps  were
taken by respondent No.4 to put up any industry on the said land.
6.          Five years later, the respondent No.4 is stated to have  applied
on 6.12.2008 to the Deputy Collector at Bhuj for permission  to  sell  these
lands.   The  Collector  of  Bhuj  sought  the  guidance  from  the  Revenue
Department, and in view of the direction  of  the  Revenue  Department,  the
Deputy Collector granted the permission on 15.1.2010, to sell the  lands  to
respondent No. 5 treating it as a special case, and not to be treated  as  a
precedent.
Thereafter, the respondent No.4 conveyed the concerned lands  to
respondent No.5 by sale deed dated 19.1.2010. Respondent No.5 also  obtained
permission from the Industries Commissioner on 8.3.2010 for putting  up  the
industry.  Subsequently, the Collector issued the  certificate  as  required
under Section 89A (3) (c) (i) of the Tenancy Act, 1958, on  21.5.2010,  that
respondent No.5 had  purchased  the  land  for  a  bona-fide  purpose.
The
permission for a non-agricultural user was given to the respondent  No.5  on
5.1.2011. 
The Gujarat Mineral Development Corporation  (GMDC)  –  which  got
itself impleaded in this appeal  as  respondent  No.6  has  entered  into  a
Memorandum of Understanding (MOU for short) on  30.11.2011  with  M/s  Earth
Refinery Pvt. Ltd. which is  the  holding  company  of  respondent  No.5  to
purchase 26% of equity in a joint venture company to be set up by them,  and
which will own the industry.
7.          It appears that a Gujarati Daily “Sandesh” in an  article  dated
20.8.2011 reported that there was a huge loss to the State exchequer in  the
sale of these lands to a private  company  almost  to  the  tune  of  Rs.250
crores.
The newspaper  reported  that  although  the  respondent  No.4  had
purchased  the  concerned  lands  at  village  Kukma  and  Moti  Reildi   on
30.1.2003, no industrial activity was started till 2008 as required  by  the
law, and after a long period of five years  the  land  was  to  be  sold  to
Alumina Refinery Limited (Alumina for short).
One Mr. Nitin  Patel  is  the
Managing Director of this Alumina, and Mr. Nilesh Patel who is  his  brother
is its Director (Legal and Human  Resources).  
The  newspaper  stated  that
Alumina had written a letter to the Chief Minister  Mr.  Narendra  Modi,  on
18.6.2009 that the Government should grant the necessary permission.  It  is
further stated that on the said  proposal  being  placed  before  them,  the
officers of the Revenue Department had placed negative remarks,  and  yet  a
permission was granted to sell 2 lakh sq. yds.  of  land  at  a  throw  away
price when the rate of land was Rs.3500 – 4000 per sq. yd..  It was  alleged
that there was a direct involvement of the Chief Minister in this scam,  and
with  a  view  to  avoid  Lokayukata  enquiry,  although  a  commission  was
appointed under Hon’ble Mr. Justice M.B. Shah, a  former  Judge  of  Supreme
Court of India to enquire into a number  of  other  controversial  projects,
this scam was excluded therefrom.
8.          There was also a news item in another Daily “Kachchh  Mitra”  on
1.2.2011  that  the  Alumina  Refinery  Limited  was  given  permission   by
breaching rules and regulations.  The farmers of the  nearby  villages  were
worried, and some 200 farmers had  protested  against  the  proposal  as  it
would affect their agricultural activities due to pollution.  It was  stated
that they had sowed plants of tissue-culture Israeli  dry-dates.   They  had
planted lacs of Kesar Mango trees.  They  were  also  cultivating  crops  of
Papaiya, Aranda, Wheat,  Cotton,  groundnuts  etc.   If  the  refinery  work
starts in this area, it will affect the agricultural work badly.  There  was
also a fear that the blackish and toxic air of the factory  will  spoil  the
plants.

9.          All this led the appellants to file the earlier  mentioned  writ
petition, for the reliefs  as  prayed.   The  petition  enclosed  the  above
referred news reports, as also  the  information  obtained  through  enquiry
under the Right to Information Act, 2005 by  one  Shri  Shashikant  Mohanlal
Thakker of Madhapur Village of Taluka Bhuj.  This information contained  the
documents incorporating the file notings of the revenue department  and  the
orders granting permission.   The  aforesaid  writ  petition  was  filed  on
28.2.2012.  An affidavit in reply to the writ petition was  filed  by  above
referred Nitin Patel on behalf of respondent No.5, and the appellants  filed
a rejoinder.  Respondent No.5 filed a sur-rejoinder thereto. The  respondent
No.1 State of Gujarat filed an affidavit in  reply  on  16.8.2012,  and  the
petitioner filed a rejoinder to the Government’s  affidavit  on  10.11.2012.
After the writ petition was filed on 28.2.2012 an order  of  status-quo  was
granted on 1.3.2012, and it continued till the dismissal of the petition  on
30.8.2012 when the order of stay was vacated.   However,  when  the  present
SLP was filed,  an  order  of  status-quo  was  granted  by  this  Court  on
4.1.2013, and it has continued till date.

Relevant provisions of the Statute:-

10.         In as much as we are concerned with the provisions contained  in
Section 89 and Section 89A of the Tenancy Act,  1958,  it  is  necessary  to
reproduce the two sections in their entirety.  These two sections appear  in
Chapter VIII of the Tenancy Act, 1958.  The sections read as follows:-

                                “CHAPTER VIII
               RESTRICTIONS ON TRANSFERS OF AGRICULTURAL LANDS
                    AND ACQUISITION OF HOLDINGS AND LANDS

                 89 Transfers to non-agriculturists barred.-
Transfers to           (1) Save as provided in this Act,
non-agricul-
turists barred
                    a) no sale (including sales in execution of a decree  of
                       a Civil Court or for  recovery  of  arrears  of  land
                       revenue or for sums recoverable as  arrears  of  land
                       revenue), gift exchange  or  lease  of  any  land  or
                       interest therein, or

                    b) no mortgage of any land or interest therein, in which
                       the possession of the mortgaged property is delivered
                       to the mortgagee,

           shall be valid in favour of a person who is not an agriculturist
           or who being an agriculturist  cultivates  personally  land  not
           less than three family holdings whether as owner  or  partly  as
           tenant or who is not an agricultural labourer:

           Provided that the Collector or  an  officer  authorised  by  the
           State Government in this behalf may grant  permission  for  such
           sale, gift, exchange, lease or mortgage, in  such  circumstances
           as may be prescribed:

           [Provided further that no  such  permission  shall  be  granted,
           where  land  is  being  sold  to  a  person  who   is   not   an
           agriculturists for agricultural purpose, if the annual income of
           such person from other source exceeds five thousand rupees.]

           (2) Nothing in this section shall  be  deemed  to  prohibit  the
           sale, gift, exchange or lease of a dwelling house  or  the  site
           thereof  or  any  land  appurtenant  to  it  in  favour  of   an
           agricultural labourer or an artisan.

           (3) Nothing in this section shall apply to  a  mortgage  of  any
           land or interest therein effected in favour  of  a  co-operative
           society as security for the land advanced by such society.

           (4)  Nothing in section 90 shall apply to any  sale  made  under
           sub-section (I).

                  89A.  Sale  of  land  for  bonafide  industrial   purpose
           permitted in certain cases:-

                 (1) Nothing in section 89 shall prohibit the sale  or  the
           agreement for the sale  of  land  for  which  no  permission  is
           required under sub-section (1) of section 65B of the Bombay Land
           Revenue Code, 1879 (Bom. V of 1879) in favour of any person  for
           use of such land by  such  person  for  a  bonafides  industrial
           purpose:

                 Provided that—

              a) the land is not situated within the urban agglomeration  as
                 defined in clause (n)  of  section  2  of  the  Urban  Land
                 (Ceiling and Regulation) Act, 1976 (33 of 1976),

              b) where the area of the land proposed to be sold exceeds  ten
                 hectares, the person to whom the land  is  proposed  to  be
                 sold in pursuance of this sub-section shall obtain previous
                 permission of the Industries Commissioner,  Gujarat  State,
                 or such other officer, as the State Government may,  by  an
                 order in writing, authorise in this behalf.

              c) the area of the land proposed to be sold shall  not  exceed
                 four times the area on which construction  for  a  bonafide
                 industrial purpose is proposed to be made by the purchaser:

                 Provided that any additional land which may be required for
                 pollution control measures or required under  any  relevant
                 law for the time being in force and certified  as  such  by
                 the relevant authority under that law shall  not  be  taken
                 into account for the purpose of computing  four  times  the
                 area.

              d) where the land proposed to be sold is  owned  by  a  person
                 belonging to the Scheduled Tribe, the sale shall be subject
                 to the provisions  of  section  73AA  of  the  Bombay  Land
                 Revenue Code, 1879 (Bom. V of 1879).

              2) Nothing in the Section 90 shall apply to any sale  made  in
                 pursuance of subsection (1).

              3) (a) Where the land is sold to a person in pursuance of sub-
                 section (1) (hereinafter referred to as  “the  purchaser”),
                 he shall within thirty days from the date  of  purchase  of
                 the land for bonafides industrial purpose, send a notice of
                 such purchase in such form alongwith such other particulars
                 as may be prescribed, to the Collector and endorse  a  copy
                 thereof to the Mamlatdar.

                 (b)   Where the purchaser fails  to  send  the  notice  and
                 other particulars to the Collector under clause (a)  within
                 the period specified therein, he shall be liable to pay, in
                 addition to the non-agricultural assessment leviable  under
                 this Act, such fine not exceeding two  thousand  rupees  as
                 the Collector may subject to rules  made  under  this  Act,
                 direct.

                 (c)   Where, on receipt  of  the  notice  of  the  date  or
                 purchase for the use of land  for  a  bonafides  industrial
                 purpose and other particulars sent by the  purchaser  under
                 clause (a), the Collector, after making such inquiry as  he
                 deems fit—

                 (i)   is satisfied that the  purchaser  of  such  land  has
                 validly  purchased  the  land  for  a  bonafide  industrial
                 purpose in conformity with the  provisions  of  sub-section
                 (1), he shall issue a certificate to  that  effect  to  the
                 purchaser in such form and with in  such  time  as  may  be
                 prescribed.

                 (ii)  is not so  satisfied,  he  shall,  after  giving  the
                 purchaser an opportunity of being heard,  refuse  to  issue
                 such certificate and on such refusal, the sale of  land  to
                 the purchaser shall be deemed to  be  in  contravention  of
                 section 89.

                 (d)  (i) The purchaser aggrieved by the refusal to issue  a
                 certificate by  the  Collector  under  sub-clause  (ii)  of
                 clause (c) may file an appeal to the  State  Government  or
                 such officer, as it may, by an order in writing,  authorise
                 in this behalf.

                 (ii)  The State Government or the authorised officer shall,
                 after giving the appellant an opportunity of  being  heard,
                 pass such order on the appeal as it or he deems fit.

              4) The purchaser to whom a certificate is  issued  under  sub-
                 clause (i) of clause (c) of sub-section (3), shall commence
                 industrial activity on such land within  three  years  from
                 the date of such certificate  and  commence  production  of
                 goods or providing of services within five years from  such
                 date:

           Provided that the period of three years or, as the case may  be,
           five years may, on an application made by the purchaser in  that
           behalf, be extended from time to time, by the  State  Government
           or such officer, as it may, by an order in writing authorise  in
           this behalf, in such circumstances as may be prescribed.

           (5)   Where the Collector, after making such inquiry as he deems
                 fit and giving the purchaser an opportunity of being heard,
                 comes to a conclusion that  the  purchaser  has  failed  to
                 commence industrial activity  or  production  of  goods  or
                 providing of services within the period specified is clause
                 (b) of sub-section (4), or the period  extended  under  the
                 proviso to that clause, the land shall vest  in  the  State
                 Government free from all encumbrances  on  payment  to  the
                 purchaser  of  such  compensation  as  the  Collector   may
                 determine, having regard to the price paid by the purchaser
                 and such land shall be disposed of by the State Government,
                 having regard to the use of land.”

The pleadings of the parties before the High Court:-
11.         The appellants had  contended  in  paragraph  6  of  their  Writ
Petition that the  permission  given  to  Indigold  to  sell  the  land  was
contrary to the provisions and  restrictions  imposed  under  the  law,  and
contrary  to  the  original  permission  granted  to  them  by  the   Deputy
Collector, Bhuj, on 1.5.2003. The market value of the land in question  goes
into crores of rupees, and such an act will  result  in  huge  loss  to  the
public exchequer.  They had contended that the decision  was  malafide.  The
decision was alleged to have been taken for a collateral purpose, which  was
apparently neither legal nor in  the  interest  of  the  administration  and
public  interest.   Inasmuch  as  it  was  concerning  disposal  of   public
property, the only mode to be adopted was a fair and  transparent  procedure
which would include holding a public  auction  inviting  bids,  and  thereby
providing equal opportunity to all  interested  or  capable  industries,  in
order to promote healthy competition and to fetch the  right  market  price.
The decision  has  been  taken  at  the  instance  of  the  Hon’ble  Revenue
Minister.  It was also submitted that, there  were  possibilities  that  the
directors / promoters and the management of Indigold  and  Alumina  are  the
same, and if that is so, it would be a design  to  defraud  the  Government.
Alumina had contended that it had signed an MOU with  the  State  Government
during the Vibrant Gujarat Investors’  Summit,  2009.   The  appellants  had
submitted that the same cannot be a ground to grant the permission to  sell,
contrary to the mandatory provisions of law. Section 89A makes a  contingent
provision in case the land is not used for industrial  activity  within  the
time provided, and such mandatory provisions of the Act cannot  be  bypassed
merely upon the endorsement made by  the  Hon’ble  Revenue  Minister.    The
action on the part of the State is absolutely arbitrary.   The  State  or  a
public authority which holds the property for the public, and which has  the
authority to grant the largesse, has to act as a trustee of the people,  and
therefore to act fairly and reasonably.  The holders  of  pubic  office  are
ultimately accountable to the public in whom  the  sovereignty  vests.   The
action of the Government is arbitrary, and therefore  violative  of  Article
14 of the Constitution of India.
12.         Respondent No.5 was the first to file a reply to  this  petition
in the High Court which was affirmed by Mr. Nitin Patel  on  11.7.2009.   In
this reply he principally submitted that it was not correct to say that  the
land was being given away at a throwaway price, causing great  loss  to  the
public exchequer to the tune  of  Rs.250  crores,  as  alleged.   The  State
Authorities and the Revenue Minister have not  acted  in  violation  of  any
mandatory provisions of law.  The affidavit  further  narrated  the  various
events in the matter leading to the sale deed dated  19.1.2010  by  Indigold
in favour of Alumina, and the  permission  of  the  Industries  Commissioner
dated 8.3.2010.  It was also pointed out that permission  had  been  granted
by the Collector, Bhuj on 5.1.2011.  Thereafter, it was contended  that  the
land has been purchased by the respondent No.5 way  back  in  January  2010,
and the petition, making frivolous and baseless allegations, has been  filed
two years after the said transaction.
13.          Then,  it  was  pointed  out  that  the  respondent  No.5   was
incorporated under the Companies Act in the year 2008, and that the  company
is promoted by Earth Refining Company Pvt. Limited.  Respondent No.5  wanted
to manufacture high value added  products  from  bauxite  ore  available  in
Kutch district which ore was currently sold or exported  as  it  is  without
any value addition.  The intention of respondent No.5 was in line  with  and
supported by Government of Gujarat  Industries  and  Mines  Policies,  2009.
The project was to  be  first  of  its  kind  in  Gujarat,  with  technology
supplied to it by National Aluminum Company Ltd. (shortly known  as  NALCO),
a  Government  of  India  Enterprise.   A  share  holding  agreement   dated
30.11.2011 had been entered into between GMDC  and  Earth  Refining  Company
Ltd. whereby GMDC had agreed to be joint venture partner, and  to  subscribe
to 26% of the equity share capital of the new company.  NALCO  has  provided
advanced technology for the project.
14.         It was further submitted in para 15 (g) of the reply  that,  the
opinions of all  the  subordinate  officers  are  “inconsequential  and  not
binding on the Revenue Minister”.  The decision of the  Minister  cannot  be
faulted on the basis of certain notings of a lower authority.
15.          One  Mr.  Hemendera  Jayantilal  Shah,  Additional   Secretary,
Revenue Department filed the reply on behalf of  the  respondent-State.   In
paragraph 3.4 it was contended that the notings from  the  Government  files
reflect only the exchange of views amongst the officers of the  departments.
The decision of the State Government to grant permission  for  sale  of  the
land could not be said to  be  arbitrary,  malafide  or  in  the  colourable
exercise of power.  Three reasons were given in support thereof:-
(i)   If the land had been directed to be vested in  the  State  Government,
State would have been required to pay compensation  to  M/s  Indigold  under
Section 89A(5) which is otherwise a long-drawn process involving Chief  Town
Planner and State Level Valuation Committee, for the purpose of  determining
the valuation of the land, and  thereafter  for  finding  the  suitable  and
interested party to set up an industry on the land in question.
(ii)  In the sale to Alumina, the State Government’s  own  interest  through
its public sector undertaking had been involved,  and  therefore  there  has
been a substantial compliance of the spirit flowing from the  provisions  of
Section 89A(5).
(iii) The price of the land in question was around  Rs.4.35  crores  as  per
the Jantri (i.e. official list of land price) at the relevant time,  and  it
had come down to Rs.2.08 crores, as per the revised Jantri  rated  of  2011.
Thus, apart from time being consumed in the  process,  perhaps  there  would
have been a loss to the public  exchequer.  Thereafter,  it  was  stated  in
paragraph 4 of the reply as follows:-
                 “I further respectfully say that the action  of  the  State
           Government was bonafide and taking into  consideration  all  the
           aspects of the matter, viz. (i) the land is being used  for  the
           industrial purpose, (ii) a dire need  for  industrialization  in
           the Kutch District; (iii) MoU  arrived  at  during  the  Vibrant
           Summit,  2009,  whereby,  a  ready  and  interested  party   was
           available to start the  industry  immediately  on  the  land  in
           question; and (iv) GMDC possessing 26%  of  the  share  in  such
           interested party, i.e. M/s Alumina Refinery Pvt. Ltd.”

It is relevant to note that no reply was filed on behalf of Indigold.
Additional pleadings of the parties in this Court:-
16.         As far as this Court  is  concerned,  a  counter  affidavit  was
filed on behalf of the  State  Government  by  one  Mr.  Ajay  Bhatt,  Under
Secretary, Land Reforms.  In his reply, he stated that in any event  in  the
present process the State is the beneficiary in permitting this  transaction
with GMDC which is a Government Undertaking.  It  will  have  26%  stock  in
respondent  No.5.   In  paragraph  4(E)(e)(ii)  he  stated  that  since  the
Government’s own  interest  was  involved,  there  has  been  a  substantial
compliance of the spirit flowing from the provisions of  Section  89A(5)  of
the Act.
17.         A counter was also  filed  in  this  Court  by  one  Mr.  Deepak
Hansmukhlal Gor, Vice President of respondent No.5-Alumina.  He pointed  out
that although the petition in the  High  Court  was  moved  as  a  PIL,  the
petitioner No.1 was in fact a leader of the opposition party in  the  State.
In order to mislead the Court it was stated in the petition  that  the  land
was worth Rs.250 crores.  It was further submitted that to seek  an  interim
relief a false statement  had  been  made  in  the  writ  petition  that  no
activity had been initiated by respondent No.5 on the concerned land by  the
time writ petition was filed.  The  respondent  No.5  had  made  substantial
investment and construction on the land,  and  photographs  in  that  behalf
were placed on record.  It was also  submitted  that  the  decision  of  the
State Government was in tune with Mineral Development Policy,  2008  of  the
Government of India and Gujarat Mineral Policy, 2003.  It was  then  pointed
out that apart from other controversies, the present  controversy  has  also
been included for the  consideration  of  Hon’ble  Mr.  Justice  M.B.  Shah,
Former Judge of this Court.  The sale  of  land  in  the  present  case  was
rightly considered as a special one, and the challenge  thereto  was  highly
unjustified and impermissible.  The respondent No.5 filed various  documents
thereafter, including the various permissions obtained  by  respondent  No.5
for the project and the technology supply  agreement  entered  into  between
NALCO and M/s Earth  Refining  Company  Ltd.   It  was  submitted  that  the
Respondent No. 5 is a bona-fide purchaser of the land, and in  any  case  it
should  not  be  made  to  suffer  for  having   invested   for   industrial
development. It is claimed that Respondent No. 5 has made an  investment  to
the tune of Rs 6.85 crores as on 31.3.2012 on  the  project,  and  moved  in
some machinery on the site.
18.         The appellant  No.1  has  filed  his  rejoinder  to  both  these
counters.  He has stated that he has not suppressed that he is  a  political
activist, which is what he has already  stated  in  the  petition.   He  has
maintained his earlier submissions in the  writ  petition,  and  denied  the
allegations made in the two counter affidavits.
19.         As stated earlier, GMDC has applied for  joining  as  respondent
No.6.  In its application it has stated that Alumina  was  selected  through
transparent evaluation.  Then,  it  was  short-listed  for  setting  up  the
project in Kutch at the Vibrant Gujarat Summit in 2009.   It  also  defended
the Government’s decision on the ground that it is going to have 26%  equity
in respondent No.5.
Points for consideration before this Court:

20.         It, therefore, becomes  necessary  for  this  Court  to  examine
whether the decision taken by the Government to permit the transfer  of  the
agricultural land from respondent No. 4 to respondent No. 5, was  legal  and
justified.
For that purpose one may have to consider  the  developments  in
this matter chronologically as disclosed from the  above  pleadings  of  the
parties, as well as from the material available from  the  Government  files
placed for the perusal of the Court.
Thereafter, one will have to  see  the
scheme underlying Sections 89 and 89A, and then examine
whether  there  has
been any breach thereof, and if it is so what should be  the  order  in  the
present case?
Material on record  and  the  material  disclosed  from  the  files  of  the
Government and the Collector:-

21.          The  respondents  have  contended  that  the  sale  transaction
between  respondent  Nos.4  and  5  took  place  because  of  the  financial
constraints faced by respondent No.4 Indigold Refinery Limited, and that  is
reflected in their letter dated 16.6.2009 addressed to the Collector,  Bhuj.
 The letter-head of the respondent No.4 shows that it claims to have a  gold
refinery at Chitradurg in State of Karnataka.  This letter refers  to  their
earlier letter dated 6.12.2008, and letter dated 12.6.2009  from  respondent
No.5 Alumina.  The relevant paragraph of letter  dated  16.6.2009  reads  as
follows:-
            “……..
         • With regret we have hereby to inform you that due  to  financial
           constraints on our part we are unable to  execute  our  proposed
           refinery project on the said land.  We are  well  aware  of  the
           fact that sufficient amount of time has passed from the date  of
           permission granted by the office of Deputy Collector-Bhuj to set
           up the project.  We have tried our level  best  to  set  up  the
           industry on the land in question.”
         • M/s Alumina Refinery (P) Ltd. having their registered office  in
           Mumbai has shown keen interest to  set  their  Alumina  Refinery
           Project on our above mentioned ownership land.
         • A copy of consent letter dated 12.06.2009 has already been  sent
           to your office by M/s Alumina Refinery (P)  Ltd.,  whereby  they
           have applied to avail  the  permission  to  purchase  our  above
           ownership land u/s 89.
         • We appreciate and are thankful to your office and Government  of
           Gujarat for giving us an opportunity to purchase and set  up  of
           our then  proposed  refinery  project  on  the  above  mentioned
           agricultural land.
         • We would like to confirm that we had a clear intention to set up
           industry on the above mentioned land, it is only because of  non
           availability of monetary fund we are not in a position to set up
           our industry on the above mentioned agricultural land.  Further,
           we are also not having any intention to take any undue advantage
           in form of booking any profit by sale of ownership land  to  M/s
           Alumina Refinery (P) Ltd.
        We, hereby request your office to kindly grant  the  permission  to
        sale all the above land and allow us to execute the Sale  Deed  for
        registration with the competent authority…..”
                                           (emphasis supplied)
22.         The earlier letter dated 6.12.2008 mentioned in this  letter  of
16.6.2009, however, nowhere mentions that respondent No.4 had any  financial
constraints because of which it could not set up the  industry  and  thefore
it wanted to sell the particular land.  This letter is seen in the  file  of
the Collector.  This letter reads as follows:-
                        “INDIGOLD REFINERIES LIMITED
                              6th December 2008
      To,
      Collector of Kutch,
      Bhuj, State of Gujarat

      Sub:- Permission for the sale  of  agricultural  land  admeasuring  39
      acres 25 gunthas at Moti Reladi Kukama, Taluka Bhuj,  District  Kutch,
      State of Gujarat.

      Dear Sir,
      Reference to above, we have to respectfully inform your good self that
      we had purchased land as per details here  below  for  setting  up  of
      Industrial project:-
      Sr.no. Name of Village       Survey No.      Measurement
                                                  Acres and gunthas
      1.    Kukama                 94/1                  4/14
      2.    Kukama                 94/2                  2/16
      3.    Moti Reladi                 101/1                  9/30
      4.        “                  106                   6/10
      5.        “                  100/1                       2/20
      6.         “                      107                    4/15
      7.         “                      105/4                     5/21
      8.         “                      110/2/3                4/16
      Total                                   39 acres 25 gunthas

      The above piece of land was purchased with the permission  granted  by
      Deputy Collector, Bhuj, Kutch, wide letter  no.  LND/VC/1169/03  dated
      2nd May 2003.  We further respectfully inform yourself that we are  no
      more interested to put any industrial project in  the  said  land  and
      therefore we are disposing off entire piece of land as  per  aforesaid
      details to our prospective client.  We, therefore, request  your  good
      self to kindly give us your permission for sale, so as to enable us to
      register the sale deed with the concern competent authority.
      We hope you will extend your maximum corporation  and  assistances  in
      this regard and oblige.
      Thanking you
      Yours faithfully
      Sd/-
      Indigold Refineries Ltd.
      Hanumantrao V. Kharat”
                                             (emphasis supplied)

23.         As stated earlier, the File notings of the  Revenue  Department,
were obtained through an RTI inquiry, and were placed  on  record  alongwith
the Writ Petition. The learned counsel for the State  of  Gujarat  was  good
enough to produce the original files for our perusal.  In the  file  of  the
Revenue Department, there is an Email dated 1.7.2009 from Shri Nitin  Patel,
Chairman & MD of respondent  No.5  forwarding  his  letter  dated  30.6.2009
addressed to Smt. Anandiben M. Patel, Hon’ble Minister of Revenue  recording
the minutes of the meeting held in her  office  on  29.6.2009.   Immediately
thereafter, the respondent No.5 has written a letter to the  Chief  Minister
of Gujarat seeking permission to purchase these lands. The Secretary to  the
Chief Minister, Shri A.K. Sharma has then sent a letter on 2.7.2009  to  the
Principal Secretary,  Revenue  Department  informing  him  that  Shri  Nitin
Patel, of respondent No.5, had approached  them  with  their  representation
dated 18.6.2009. It had inked an  MOU  during  the  Vibrant  Gujarat  Global
Summit for establishing an Alumina Refinery, and they had identified a  land
suitable for that purpose.  This letter further stated:
                  “On verification of the issue, necessary action may kindly
           be taken at  the  earliest.   In  the  meantime,  a  brief  note
           indicating the possible course of action may please be  sent  to
           this office.”

24.         In view of this note from the Secretary to the  Chief  Minister,
the Revenue Department sought the  factual  report  from  the  Collector  by
their letter dated 6.7.2009.  What we  find  however,  is  that  instead  of
sending a factual report, the Collector fowarded the  original  proposal  of
respondent No.5 itself to the Department, and sought their decision  thereon
in favour of Alumina through his letter  dated  31.7.2009.   Thereafter,  we
have the note dated 7.8.2009 in the Government file which is signed by  then
Section Officer and Under Secretary, Land Revenue.  This note refers to  the
fact that a letter dated 2.7.2009 had been received from  the  Secretary  to
the Chief Minister.  Thereafter, a letter dated 31.7.2009 had been  received
from the Collector, Kutch stating that respondent  No.4  had  purchased  the
concerned land admeasuring 39 acres and 25 guntas,  but  no  industrial  use
had been made, and that the respondent No.5 had  shown  his  willingness  to
purchase the land.  Thereafter, the note  records  what  the  Collector  had
stated viz.
                 “Taking  into  consideration  the  reasons  shown  in   the
           submission of Alumina Refinery Company addressed to the  Hon’ble
           C.M., dated 18.6.2009, it is submitted to grant  permission  for
           purchasing land”.

25.         The departmental note thereafter states in sub-paragraph  A,  B,
C of paragraph 4, that under the relevant law  the  purchaser  of  the  land
should commence the industrial activity within a  period  of  3  years  from
date  of  the  certificate  of  purchase,  and  within  5  years  start  the
manufacture of goods and provide the services.  Where  the  purchaser  fails
to commence the industrial  activity,  the  Collector  has  to  initiate  an
enquiry as to whether  the  purchaser  has  failed  to  commence  industrial
activity or production,  as  mentioned  in  clause  (b)  of  sub-section  4.
Thereafter, if on giving the purchaser  an  opportunity  to  be  heard,  the
Collector comes to a conclusion that the purchaser has failed to do  so,  he
has to determine the payment of compensation, and pass  an  order  that  the
land shall vest in the State Government.  Thereafter the note records:-
                 “  …..Taking  into  consideration  the  above   provisions,
           whatever action  required  to  be  taken,  is  to  be  taken  by
           Collector, Kutch, means there is  no  question  at  all  of  the
           authority for a period of more than five  years.   Further  vide
           letter dated 6.7.2009, Collector was informed to submit  factual
           report.  Instead of the same,  proposal  is  submitted  by  him.
           Vide  order  dated  1.5.2003  Deputy   Collector   has   granted
           permission to Indigold Refinery Company under Section-89 of  the
           T.A. with regard to the lands in question.  The  time  limit  of
           this permission has  come  to  an  end.   Now  another  company,
           Alumina Refinery Co. wants to purchase land of this company  and
           establish  a  project.   Looking  to  the  same,   taking   into
           consideration the above provisions, whatever action is  required
           to be taken, the same is to be taken at  his  (Collector)  level
           only.  This is submitted for  consideration  whether  to  inform
           Collector accordingly or not?
                 As Collector is required to take action as  per  the  legal
           provisions, any action on proposal of Collector is not  required
           to  be  taken  by  this  office.   Therefore,  proposal  of  the
           Collector be sent back.
                 Submitted respectfully…”
                                             (emphasis supplied)
26.         Since, the Secretary of the Hon’ble Chief Minister had sought  a
note indicating the possible course of action, the  Deputy  Secretary,  Land
Revenue made a note on 25.8.2009, and at  the  end  thereof,  he  stated  as
follows:-
                 “..……

                 Under these circumstances,  looking  to  legal  provisions,
           there is a provision that either the  company  carries  out  the
           industrial activity or the State Government  resumes  the  land.
           There is no provision for mutual transfer by the parties.

                 As suggested by the Secretary to  the  Hon’ble  C.M.,  note
           indicating the above position be sent separately.”


27.         A note was, thereafter, made by the  Principal  Secretary,  Land
Revenue, which recorded that as  per  existing  policy  such  sale  was  not
permissible.  In para 2 of his note he stated:

                 “as per rules, the land is to be resumed  by  Collector  in
           case of failure to  utilize  for  industrial  use”.  In  para  5
           thereof he however suggested “that in such  case,  as  in  cases
           under the Land Acquisition Act, 50% of the unearned income being
           required to be charged by the State Government can be introduced
           as a policy measure”.


The Principal Secretary, Revenue Department marked para 2 above as  “A”  and
then remarked on 29.8.2009 as follows:-
                 “We may resume as “A” of pre-page  and  allot  as  per  the
           existing policy on land price”.

The Chief Secretary wrote thereon on 1.9.2009 –
                 “We should take back the land.  Allotment may be separately
           examined”.


What is relevant to note is that the  Minister  of  Revenue  Smt.  Anandiben
Patel thereafter put a remark on 10.9.2009:-
                 “Land  is  of  private  ownership.   As  a  special   case,
           permission be granted for sale”.

28.         Thereafter, it is seen from this  file  that  in  view  of  this
direction by the Minister, the matter was further  discussed.   A  note  was
then made by the Principal Secretary,  Revenue  Department  on  21.9.2009  -
“Discussed.  We may resubmit to adopt a  procedure  for  such  cases”.   The
Principal Secretary,  Land  Revenue  made  a  detailed  note  thereafter  on
14.10.2009 referring to the amendment brought in  by  Gujarat  Act  No.7  of
1997 incorporating Section 63AA  in  the  Bombay  Tenancy  and  Agricultural
Lands Act, 1948, and the developments  in  the  present  matter  up  to  the
noting made by the Minister, that the land may be permitted to be sold as  a
special case.  Thereafter, he sought an opinion as  to  whether  or  not  an
action similar to  a  provision  under  the  Land  Acquisition  Act  on  the
occasion of sale of land providing for taking  of  50%  amount  of  unearned
income by the State Government, be taken in the  present  case.   The  Chief
Secretary made a note thereon as follows:-
                 “It would be proper to give land to the new party  provided
           industry department recommends as per the laid down  rules.   As
           indicated in page 9/D note (marginal).  Let us  take  back  land
           under 63AA and then re-allot to the new party”.
           15.10
The Minister still made a note thereon on 4.11.2009:-
                 “As a special case as  suggested  earlier,  permission  for
           sale be given”.


In view of this direction by the minister, the department  has,  thereafter,
taken the decision that the permission be given as a special  case  but  not
to be treated as precedent. Thus, the opinion of  the  Principal  Secretary,
Land Revenue that 50% of the unearned income be taken by the Government  was
not accepted.  Similarly, the opinion of the Chief Secretary that  the  land
be resumed, and then be re-allotted to the new party was also not accepted.
29.         This has led to the communication from the State  Government  to
the  Collector  dated  18.12.2009  that  the  Government  had  granted   the
necessary permission to respondent No.5 to purchase the  land,  treating  it
as a special case. The said letter reads as follows:-
      “Urgent/RPAD
      Sr. No.: GNT/2809/2126/Z          State of Gujarat
                                        Revenue Department
                                        11/3 Sardar Bhavan
                                        Sachivalay
                                        Gandhinagar
                                        Date: 18/12/2009
      To,
      The Collector
      Kutch-Bhuj

      Subject:     Shri  Nitin  Patel  c/o  M/s  Indigold   Refinery/Alumina
                 Representation qua the land of Kukma and Moti Reldi

      Reference:   Your   letter   dated   31/9/09   bearing   no.    PKA-3-
      Land- Vs.  2083/2009

      Sir,
           In connection with your above referred and subject  letter,  the
      land of Kukma and  Moti  Reldi  admeasuring  Acre  39  Guntha  25  was
      purchased by Indigold Refinery as per the provisions of Bombay Tenancy
      and Agricultural Lands (Vidharbha Region and Kutch  Area)  Act,  1958;
      Section 89.  However due to financial  incapability,  the  Company  is
      unable to establish industry and other company  M/s  Alumina  Refinery
      Pvt. Ltd.  being  ready  to  purchase  the  said  land,  upon  careful
      consideration the Government on the basis of treating the case  as  “A
      special case and not to be  treated  as  precedent”  has  granted  the
      permission.
      2.    Papers containing pages 1 to 89 are returned herewith.

      Encl:
      As above
                                              Yours sincerely
                                             Section Officer
                                             Revenue Department
                                             State of Gujarat
      Copy to:
      Select File/Z Branch
      Select File/Z Branch/N.S.A”

30.         Thereafter, the Deputy  Collector  has  issued  an  order  dated
15.1.2010 granting permission to sell the land for industrial purpose  under
Section 89A of the Act. He, however, added that the action  of  issuing  the
certificate can be taken only after the submission of a project  report  and
technical recommendation letter of  Industries  Commissioner  by  respondent
No.5. The above referred order  dated  15.1.2010  of  the  Deputy  Collector
granting permission to sale the land reads as follows:-
      No. Jaman Vashi/218/09
                         Office of Deputy Collector
                            Bhuj, Date-15/01/2010
      To
      Shri Hanumantrav V. Kharat
      Indi Gold Refineries Limited
      201-212, EMCS House
      289 SBSL, Fort
      Mumbai-400 001

      Subject:- Regarding getting the approval for sale of the  agricultural
      land of village Kukma  and  Moti  Reldi,  Taluka  Bhuj  purchased  for
      industrial purpose, under Section-89-A of the Tenancy Act.
      Read:- Letter No. Ganat/2809/2126/Z dated 18/12/2009  of  the  Revenue
      Department of the Government, Gandhinagar.


      Sir,
           With reference to the above subject it is to  be  informed  that
      vide this office certificate No.  Land/Vasi/1169/03  dated  01/05/2003
      you have been granted permission under Section-89-A of the Tenancy Act
      for purchasing agricultural land for industrial purpose as under:-























           In the above lands as the company due to financial circumstances
      is not in a position to establish any industry, with reference to your
      application dated 06/12/2008 seeking the permission for  sale  of  the
      above land for industrial purpose  to  Shri  Alumina  Refinery  (Pvt.)
      Limited, Mumbai for the  Alumina  Refinery  project,  vide  the  above
      referred letter of the R.D. of the Government as a “special  case  and
      with a condition not to treat as  the  precedent”  the  permission  is
      granted, which may be noted.
           As the above land is admeasuring more than  25  Acres,  in  this
      case  on  submission  of  the  Project  Report   and   the   Technical
      recommendation letter of Industries Commissioner, G.S., Gandhinagar by
      the party desirous to purchase the land Alumina Refinery (Pvt.)  Ltd.,
      Mumbai, further action can be taken by this  office  for  issuing  the
      certificate under Section-89 of the Tenancy Act, which may be noted.

                                                   Sd/-
                                        Deputy Collector, Bhuj
      Copy to
       Alumina Refinery (Pvt.) Ltd.
      1501-1502 Shiv Shankar Plaza-
      Near HDFC Bank, Sector-8
      Airoli, New Mumbai-400 708”
31.         This led to the sale deed between  respondent  No.4  and  5  for
sale of the lands at Rs.1.20 crores.  It is, however,  interesting  to  note
that the sale deed is signed for Indigold by Nitin Patel  on  the  basis  of
the power of attorney from them, and  for  Alumina  by  his  brother  Nilesh
Patel.  Subsequently the permission from  the  Industries  Commissioner  was
obtained on 8.3.2010, and the certificate under Section 89A (3) (c)  (i)  of
purchase for bona-fide industrial purpose on 21.5.2010.
The submissions on behalf of the appellants:-
32.         The decision of the State Government to permit the  transfer  of
the concerned  agricultural  lands  was  challenged  by  the  appellants  on
various grounds.  Firstly, it was submitted that Section 89  basically  bars
transfer of agricultural land to the non-agriculturists.  Section 89A  makes
an exception only in favour of a bonafide industrial user.  The industry  is
required to be set-up within three years  from  the  issuance  of  necessary
certificate issued by the Collector for that purpose, and the production  of
the goods and services has to start within  five  years.   If  that  is  not
done, the Collector has to take over the land after holding  an  appropriate
enquiry under sub-section (5) of 89A, and  the  land  has  to  vest  in  the
Government after paying the compensation to the purchaser which  has  to  be
determined having regard to  the  price  paid  by  the  purchaser.   In  the
instant case, it is very clear that  the  respondent  No.  4  had  expressed
their inability  to  develop  the  industry  way  back  on  6.12.2008.   The
Collector was, therefore, expected to hold an enquiry and  pass  appropriate
order.  This was a power coupled with a duty.
A judgment of this  Court  in
Indian Council for Enviro-Legal Action Vs. Union of India  &  Ors.  reported
in 1996 (5) SCC 281, was relied  upon  to  submit  that  a  law  is  usually
enacted because the legislature feels that it is so necessary.  When  a  law
is enacted containing  some  provisions  which  prohibit  certain  types  of
activities, it is  of  utmost  importance  that  such  legal  provision  are
effectively enforced.  In Section 89A there is no provision  for  a  further
transfer by  such  a  party  which  has  not  developed  the  industry,  and
therefore, the Collector ought to have acted  as  required  by  Section  89A
(5). In that judgment it was observed “enacting of  a  law,  but  tolerating
its infringement, is worse  than  not  enacting  a  law  at  all.”   It  was
submitted that in the instant case the state itself has issued an  order  in
violation of the law.
33.         It was  then  submitted  that  the  Collector  was  expected  to
dispose of the land by holding an auction.  The judgment of  this  court  in
Centre for Public Interest Litigation and Ors. Vs. Union of India  and  Ors.
reported in 2012 (3) SCC 1 was relied upon in support, wherein it  has  been
held that natural resources are  national  assets  and  the  state  acts  as
trustee on  behalf  of  its  people.   Public  Interest  requires  that  the
disposal of the natural  resources  must  be  by  a  fair,  transparent  and
equitable process such as an auction.  The same having not  been  done,  the
State exchequer has suffered.  Reliance was also placed on the  judgment  in
Noida Entrepreneurs Association Vs. Noida and ors. reported in 2011 (6)  SCC
508 to submit that whatever  is  provided  by  law  to  be  done  cannot  be
defeated by an indirect and circuitous contrivance.
34.          In the  instant  case,  the  transfer  of  the  land  has  been
permitted because respondent No. 5 directly approached  the  Chief  Minister
and thereafter the Revenue Minister.   It was submitted that such an act  of
making of a special case smacks of  arbitrariness.   The  judgment  of  this
Court in Chandra Bansi Singh Vs. State of Bihar reported  in  1984  (4)  SCC
316 was relied upon in this behalf.  In that matter the state of  Bihar  had
released a parcel of land acquired by it for the benefit of  one  particular
family  which  had  alleged  to  have  exercised  great  influence  on   the
Government of the time.  The action of the State was held to be a clear  act
of favouritism.  Another judgment of this Court in Manohar Joshi  Vs.  State
of Maharashtra and Ors. reported in 2012 (3) SCC 619 was  also  relied  upon
to criticise a direct approach to the ministers rather  than  going  through
the statutory authorities.  Reliance was also  placed  on  the  judgment  in
Bhaurao Dagdu Paralkar Vs. State of Maharashtra reported  in  2005  (7)  SCC
605 which has explained the concept  of  ‘fraud’  from  paragraph  9  to  12
thereof.  In paragraph 12 amongst others  it  has  referred  to  an  earlier
judgment in Shrisht Dhawan Vs. Shaw Bros reported in 1992 (1) SCC 534  which
relies upon the English judgment in Khawaja Vs.  Secy.  of  State  for  Home
Deptt. reported in 1983 (1) All  ER  765.  In  para  20  of  Shrisht  Dhawan
(supra) this Court has observed:-
                 “ If a statute has been  passed  for  some  one  particular
           purpose, a court of law will not countenance any  attempt  which
           may be made to extend the operation of the Act to something else
           which is quite foreign to its  object  and  beyond  its  scope.’
           Present day concept of fraud on statute has veered  round  abuse
           of power or mala fide exercise of power. It  may  arise  due  to
           overstepping the limits of power or defeating the  provision  of
           statute by adopting subterfuge or the power may be exercised for
           extraneous or irrelevant considerations. The colour of fraud  in
           public law or  administrative  law,  as  it  is  developing,  is
           assuming different shades……”

35.         The learned senior counsel for the appellants Mr. Huzefa  Ahmadi
submitted that the appellants’ writ petition should not have been  dismissed
only on the ground of delay, in as much as the  environmental  clearance  to
the project was granted on 19.2.2012 and the  writ  petition  was  filed  in
March 2012.  He submitted that similarly the appellant cannot be  criticised
for suppression of any information about the investment made  by  respondent
No. 5, since the appellant cannot be aware of the  same.   In  any  case  he
submitted that in as much as there has been an immediate interim order,  the
plea of large investment having been made  is  untenable.   As  far  as  the
objection to the appellant  No  1  being  a  person  belonging  to  a  rival
political  party  is  concerned,  he  submitted  that  he  has  specifically
accepted that he is a political activist.  In any case,  he  submitted  that
the Collector did not act in accordance with  law  at  any  point  of  time.
Similarly, the order passed by the Government is not a  reasoned  order  and
is undoubtedly arbitrary.  The power in the Collector implied a duty in  him
to act in accordance with law.  He relied upon a judgment of this  Court  in
Deewan Singh & Ors. Vs. Rajendra Pd. Ardevi & Ors.  reported  in  2007  (10)
SCC 528 in this behalf.
Submissions on behalf of the State Government:-
36 .        The defence of the Government has principally been that  because
Indigold was not in a position to set  up  the  industry,  and  Alumina  had
given a proposal in the Vibrant Gujarat summit to set up its project on  the
very land, the proposal was accepted.
It had entered into an MOU with  GMDC
which was to have 26% equity therein.  
While  looking  into  the  proposal,
initially there was some hesitation on the part of the Government as can  be
seen from the notings of the officers in  the  Government  files.   However,
ultimately looking into the totality of the  factors,  the  Government  took
the decision to permit the transfer of the land.
 It is not  mandatory  that
the land must be resumed under Section 89A (5) of the Tenancy  Act,  if  the
initial purchaser does not set up the industry.
Section 89A  (5)  does  not
operate automatically.  Besides, the permission  to  Indigold  to  sell  the
land can be explained with reference  to  the  authority  of  the  Collector
available to him  under  the  first  proviso  to  Section  89(1)  read  with
condition No. (4) of the permission dated 1.5.2003 granted  to  Indigold  to
purchase the concerned lands.  
This condition No. (4) reads as follows:-
                 “4.   These lands cannot  be  sold,  mortgaged,  gifted  or
           transferred  in  any  manner  etc.   without   obtaining   prior
           permission of the competent officer.”

Last but not the least, Section 126 of the Tenancy Act was  relied  upon  to
submit that the State Government has an overall control which permits it  to
issue the necessary directions.   This Section 126 reads as follows:-
                 “126. Control- In all matters connected with this Act,  the
           State Government shall have the same authority and control  over
           the [Mamlatdar] and the Collectors acting under this Act as  [it
           has  and  exercises]  over  them  in  the  general  and  revenue
           administration.”

37.         The learned senior counsel Mr. Andhyarujina  appearing  for  the
State, submitted that the Collector  had  the  authority  to  grant  such  a
permission to sell under Rule 45 (b) of the Bombay Tenancy and  Agricultural
Lands Rules, 1959.  This rule reads as follows:-

                 “45.Circumstances in which permission  for  sale,  etc.  of
           land under section 89 may be granted  -  The  Collector  or  any
           other officer authorised under the proviso to sub-section (1) of
           section 89 may grant permission for sale, gift  exchange,  lease
           or mortgage of any land in favour of a  person  who  is  not  an
           agriculturists  or  who  being  an  agriculturists,   cultivates
           personally land not less than three family holdings  whether  as
           tenure holder or tenant or partly as tenure holder and partly as
           tenant in any of the following circumstances:-
              a) such a person bona  fide  requires  the  land  for  a  non-
                 agricultural purpose; or
              b) the land is required for the benefit of  an  industrial  or
                 commercial undertaking  or  an  educational  or  charitable
                 institution”
                 …..

Submissions on behalf of the other respondents:-
38.         Since it was the respondent No.4 Indigold, which  had  initially
purchased the land for industrial purpose, the  stand  of  Indigold  was  of
significance.  It is, however, very  relevant  to  note  that  Indigold  had
neither filed any affidavit in the High Court, nor in this Court, and  their
counsel Mr. Trivedi stated that he has no submissions to make.   It  is  the
failure of the respondent No. 4 to set up the industry, and  the  subsequent
justification on the basis of financial difficulties for the same which  has
led to the sale of the land.  It is strange that such a  party  had  nothing
to state before  the  Court.   This  is  probably  because  it  had  already
received its price after selling the land.  The respondent  No.  4  appeared
to be very much disinterested in as much as even  the  sale  documents  were
signed on their  behalf  by  Mr.  Nitin  Patel,  the  Managing  Director  of
Alumina.  Mr. Ahmadi, learned counsel for the  appellant  therefore  alleged
collusion amongst all concerned.
39.         The respondent No. 5, however, contested the matter  vigorously.
 Mr. Krishnan Venugopal, learned senior  counsel  appearing  for  respondent
No.  5  pointed  out  that  the  respondent  No.  5  had  entered   into   a
correspondence  with  GMDC  earlier,  and  thereafter  participated  in  the
Vibrant Gujarat Summit.  He pointed  out  that  the  respondent  No.  5  had
previous experience in  dealing  in  Alumina  products,  and  therefore  was
interested in setting up the  plant  in  Kutch.   It  intended  to  use  the
bauxite available in that district, and finally  it  was  going  to  have  a
production of 25,000 metric tonnes of Alumina per-annum.  It was  being  set
up with an investment of Rs. 30 crores.  The project was  being  set  up  in
furtherance of the Industrial Policy of the State of Gujarat  and  with  the
technical know-how from NALCO.  He drew our attention to the project  report
and the photographs showing the work done so far.
40.         It was submitted that the respondent No.5 had also entered  into
an MOU with GMDC whereunder GMDC was to supply bauxite for 25 years, and  it
was to have 26% equity participation.  It is however, material to note  that
there are 3 MOUs placed  on  record.   The  first  MOU  is  dated  13.1.2009
between Alumina Refinery Pvt. Ltd.  and  GMDC  which  is  basically  like  a
declaration of intent to set up the plant, and it contains the assurance  of
support from the Government of Gujarat.  The  second  MOU  between  them  is
dated 9.9.2009, and it  records that Government of  Gujarat  has  agreed  to
support this refinery, and that the GMDC had agreed to supply,  on  priority
basis, the plant-grade bauxite to this plant.  It  is  this  document  which
states that GMDC will invest in the equity of Alumina Refinery to an  extent
not exceeding  26%.   It  contains  the  promise  to  supply  bauxite.   Mr.
Krishnan Venugopal, fairly accepted that this document cannot  be  construed
as a contract, and that it can at best be utilised as a  defence  to  insist
on a promissory estoppel.  The third MOU is dated  30.11.2011  which  is  an
agreement between Earth Refinery Pvt. Ltd.  which  the  holding  company  of
Respondent No. 5 and GMDC.  In  clause  2.1  of  this  agreement  they  have
agreed to set up a joint venture  Company  by  name  Alumina  Refinery  Ltd.
Clause 6.2 of this agreement states that equity  participation  of  GMDC  in
this company shall be 26%.  The obligation of GMDC has been spelt out  under
clause 4.2 to supply bauxite.
41.         The principal submission of respondent No. 5 is  that  it  is  a
bonafide purchaser of land of respondent No. 4, it has a serious  commitment
for industrial  development,  and  it  is  acting  in  accordance  with  the
industrial policy of the State.  There is  nothing  wrong  if  the  Minister
directs the  transfer  of  the  unutilized  land  of  respondent  No.  4  to
respondent No. 5 for industrial purpose, and  this  should  be  accepted  as
permissible. The minister’s action cannot be called malafide since it is  in
the interest of the industrial  development  of  the  State.   Mr.  Krishnan
Venugopal submitted that the right to transfer is incidental  to  the  right
of ownership, and relied upon paragraph 36 of the judgment of this Court  in
DLF Qutab Enclave Complex Educational Charitable Trust Vs. State of  Haryana
and Ors. reported in 2003 (5) SCC 622.  He  further  submitted  that  unless
the possession of the unutilized area  is  taken  over  by  the  State,  the
landlord’s title to it is not extinguished.  There is no  automatic  vesting
of land in the instant case.  He relied upon the judgment of this  Court  in
Ujjagar Singh Vs. Collector reported in 1996 (5) SCC 14 in this behalf.
42.         It was then submitted that notings cannot be made  a  basis  for
an inference of extraneous consideration, and reliance was placed  upon  the
observations of this Court in paragraph  35  in  Jasbir  Singh  Chhabra  Vs.
State of Punjab reported in 2010 (4) SCC 192.  He pointed out that  the  law
laid down in Centre for Public Interest Litigation and  Ors.  Vs.  Union  of
India and Ors. (supra)  had been clarified by a Constitution  Bench  in  the
matter of Natural Resources Allocation, In  Re:  Special  Reference  (1)  of
2012 reported in 2012(10) SCC 1.   He  referred  to  paragraph  122  of  the
judgment which quotes the observations from Katuri  Lal  Lakshmi  Reddy  Vs.
State of J&K reported in 1980 (4) SCC 1 as follows:-
                 ” 122. In Kasturi Lal Lakshmi Reddy v. State of J&K,  while
           comparing the  efficacy  of  auction  in  promoting  a  domestic
           industry, P.N. Bhagwati, J. observed: (SCC p. 20, para 22)

                 “22.  …  If  the  State  were  giving  a  tapping  contract
           simpliciter there can be no doubt that the State would  have  to
           auction or  invite  tenders  for  securing  the  highest  price,
           subject,  of  course,   to   any   other   relevant   overriding
           considerations of public wealth or interest, but in a case  like
           this where the State is  allocating  resources  such  as  water,
           power, raw  materials,  etc.  for  the  purpose  of  encouraging
           setting up of industries within the State, we do not  think  the
           State is bound to advertise and tell the people that it wants  a
           particular industry to be set up within  the  State  and  invite
           those interested to come up with proposals for the purpose.  The
           State may choose to do so, if it  thinks  fit  and  in  a  given
           situation, it may even turn out to be advantageous for the State
           to do so, but if any private party comes before  the  State  and
           offers to set up an industry, the State would not be  committing
           breach  of  any  constitutional  or  legal  obligation   if   it
           negotiates with such party and agrees to provide  resources  and
           other facilities for the purpose of setting up the industry…..”

He also referred to paragraph 146 of the judgment (Per Khehar  J),  therein,
where the learned Judge has observed  that  the  court  cannot  mandate  one
method to be followed in  all  facts  and  circumstances,  and  auction  and
economic choice of disposal of natural resources  is  not  a  constitutional
mandate.  It was therefore submitted that, it was  not  necessary  that  the
Collector ought to have opted for auction of the concerned parcel of land.
43.         The learned senior counsel Mr. Krishnan Venugopal,  lastly  drew
our attention to the Jantri prices of the land in 2008. He pointed out  that
at the highest, the State would have sold  this  land,  as  per  the  Jantri
price, for Rs. 4.35 crores. Assuming that the State  was  also  to  pay  Rs.
1.20 crores as compensation to Indigold, the loss to the  State  would  come
to Rs 3.15 crores. He submitted that if it comes  to  that,  the  respondent
No. 5, alongwith Indigold, could be asked to compensate the state  for  this
difference of 3.15 crores or such other amount as may be directed,  but  its
project must not be made to suffer.
44.         GMDC was represented by learned senior  counsel  Mr.  Giri.   He
defended the action  of  the  State  as  something  in  furtherance  of  the
industrial  policy  of  the  State.   If  the  land  was  to  be  sold   and
compensation was to be given, it may not have resulted into much benefit  to
the state.  He relied upon Section 7 of the Transfer  of  Property  Act,  to
submit  that  every  person  competent  to   contract,   and   entitled   to
transferable property can transfer such property, and  under  S  10  of  the
said Act any  condition  restraining  alienation  was  void.  He  relied  on
paragraph 20 of the judgment in Prakash Amichand Shah Vs. State  of  Gujarat
reported in 1986 (1) SCC 581, to submit that divesting of title takes  place
only statutorily, and which had not happened in the instant case.
Examination of the Scheme underlying Sections 89 and 89A above:-

45.         Before we examine the submissions on behalf of all the  parties,
it becomes necessary to examine the scheme underlying the relevant  sections
89 and 89A.  As can be seen, Section 89 essentially bars  the  transfers  of
agricultural lands to non-agriculturists. The said  section  is  split  into
four parts.
 (a) Sub-section (1) provides that no sale or mortgage,  gift,  exchange  or
lease of any land, or no agreement in that behalf shall be valid  in  favour
of a non-agriculturist. The  first  proviso  to  Section  89  (1)  makes  an
exception viz. that the Collector or an  officer  authorised  by  the  State
Government in  this  behalf  may  grant  permission  for  such  sale,  gift,
exchange, lease or mortgage for that purpose, in such circumstances  as  may
be prescribed.  The second proviso of course provides that no permission  is
required  where  the  land  is  being  sold  to  a  person  who  is  not  an
agriculturist, but it is sold for agricultural purpose.
(b) Sub section (2) provides that the above restriction will not apply to  a
sale etc. in favour of an agricultural labourer or an artisan
(c) Sub-section (3) similarly provides that the above restriction  will  not
apply to a mortgage in favour of a cooperative society,  to  secure  a  loan
therefrom.
(d) Sub-section (4) lays down that the restriction  under  Section  90  with
respect to the reasonable price for the land to be sold will  not  apply  to
the sale under Section 89(1).
46.         Section 89A creates an exception to Section 89 for sale of  land
for bona-fide industrial purposes in certain cases.  This section  is  split
into five sub-sections. Sub-section (1) of  Section  89A  deals  with  those
lands for which no permission is required under sub-section (1)  of  Section
65B of the Bombay Land Revenue Code, 1879,  i.e.  lands  such  as  those  in
industrial zone etc.  It lays down that nothing in Section 89 will  prohibit
the sale or the agreement of sale of  such  zonal  land  in  favour  of  any
person for use of such land  by  such  person  for  a  bona-fide  industrial
purpose. Section 89A, creates an exception to Section 89 by allowing a  sale
of land for bonafide industrial purpose in  certain  cases  as  contemplated
under the said section.  These requirements are laid down  in  the  provisos
(a) to (d) of sub-section (1) and in sub-section (2) to (4) of Section  89A.
 They are as follows:-
(i)   That the land is not situated within an urban agglomeration,
(ii)  A prior permission of the Industries Commissioner of the State  is  to
be obtained where the area of the land  proposed  to  be  sold  exceeds  ten
hectares,
(iii) The land proposed to be sold shall not exceed four times the  area  on
which the construction of the  industry  is  to  be  put  up  excluding  the
additional land for pollution measures,
(iv)  If the land belongs to a tribal, it  shall  be  subjected  to  certain
additional restrictions,
(v)   Within 30 days the purchaser has  to  inform  the  Collector  of  such
purchase failing which he is liable to a fine,
(vi)  The Collector has thereafter to make an enquiry whether  the  land  is
purchased for a bonafide industrial purpose and issue a certificate to  that
effect.  In case he is not satisfied of the bonafide industrial purpose,  he
has to hear the purchaser, and thereafter he may  refuse  issuance  of  such
certificate against which an appeal lies to the State Government.
(vii) Lastly, the purchaser has to commence the industrial  activity  within
three years from the date of certificate, and start the production of  goods
and services within five years from the date of issuance of certificate.
47.         Where the purchaser fails to start the  industrial  activity  as
stipulated above,  Section  89A  (5)  requires  the  Collector  to  hold  an
enquiry, wherein he has to  give  the  purchaser  an  opportunity  of  being
heard. Thereafter, if he confirms such a view, he is  expected  to  pass  an
order that the land shall vest in the Government  which  will,  however,  be
done after determining appropriate compensation payable  to  the  purchaser,
which has to be done having regard to the price paid by the purchaser.  Then
the land shall be disposed of by the Government having regard to the use  of
the land. Thus, the only authority contemplated under  the  section  is  the
Collector, and the decision is to be taken at his level. It is only  in  the
event of his refusing to give  the  certificate  of  purchase  for  bonafide
industrial purpose that an appeal  lies  to  the  State  Government.   Thus,
where one wants to purchase agricultural land for industrial  purposes,  one
has to first obtain the permission  of  the  Industries  Commissioner.   The
purchaser has also to inform the Collector  about  the  purchase  within  30
days of such purchase, and obtain a certificate that the land  is  purchased
for a bonafide industrial purpose.  He has to see to it that the  industrial
activity starts in three years from the date of such  certificate,  and  the
production of goods and services also  starts  within  five  years  thereof,
which period can be extended by the  State  Government,  in  an  appropriate
case.  In  the  event  the  purchaser  fails  to  commence  such  industrial
activity, the Collector has to make  an  enquiry,  and  thereafter  pass  an
appropriate  order  of  resumption  of   the   land   on   determining   the
compensation.  Thus, the  entire  authority  in  this  behalf  is  with  the
Collector and none other.
Have the provisions of Sections 89 and 89A  been  complied  in  the  present
case:-

48.         Now, we may examine the developments in the  present  matter  on
the backdrop of these statutory provisions.  It is relevant to note that  in
their first letter dated 6.12.2008, the respondent No.4 has not referred  to
any financial constraint.  The letter merely  states  that  respondent  No.4
wanted to dispose off the entire piece of  land  since  they  were  no  more
interested in putting up any industrial project in the said  land.   As  can
be seen from Section 89A, the object of the section is  to  permit  transfer
of agricultural land, only for a bonafide  industrial  purpose.   Where  the
land exceeds ten hectares, such a purchaser has to obtain, to begin with,  a
previous permission of the Industries Commissioner before any such sale  can
be given effect to. Thereafter, the purchaser has to send a  notice  to  the
Collector within 30 days of the  purchase,  and  the  Collector  has  to  be
satisfied  that  the  land  has  been  validly  purchased  for  a   bonafide
industrial purpose, in conformity with the provisions  of  sub-section  (1),
and  then  issue  a  certificate  to  that  effect.   There  is  a   further
requirement that the purchaser  has  to  commence  the  industrial  activity
within three years, and has to start the production within five  years  from
the date of issuance of the certificate.   Admittedly  no  such  steps  were
taken by Indigold, nor was any affidavit in  reply  filed  by  them,  either
before the High Court or before this Court.  Mr. Trivedi,  learned  counsel,
appeared for Indigold, and he was specifically asked as  to  what  were  the
attempts that had been made by respondent No.4 to set up the  industry,  and
what were the difficulties faced by it.  He was asked as  to  whether  there
was any material in support of the following statement  made  in  Indigold’s
letter dated 16.6.2009 i.e. ‘we have tried our level  best  to  set  up  the
industry on the land in question.’ Mr. Trivedi stated that  he  had  nothing
to say in this behalf.  All that he stated  was  that  the  respondent  No.4
purchased the land, it was unable to set up its unit, and it sold  the  land
to respondent No.5.
49.          What is, however, material to  note  in  this  behalf  is  that
whereas the land is supposed to have been purchased in 2003 at  a  price  of
Rs.70 lakhs, it is said to have been sold at Rs.1.20  crores  in  19.1.2010.
It is very clear that even before the letter of 16.6.2009 proposing to  sell
the land to respondent No.5, in December 2008  itself  respondent  No.4  had
written to the Collector that they were no more  interested  in  putting  up
the industrial project, and therefore they wanted to dispose off  the  piece
of land to their prospective clients.   
That  being  the  position,  it  was
mandatory for the Collector at that stage itself to act under sub-Section  5
of Section 89A to issue notice, conduct  the  necessary  enquiry,  determine
the  compensation  and  pass  the  order  vesting  the  land  in  the  State
Government. 
 It is very clear that Collector has done nothing of  the  kind.
In any case he should have taken the necessary steps in accordance with  law
at least after receiving the letter dated 16.6.2009.  Again he did not  take
any such steps.
50.          It  has  been  pointed  out  by  the   respondents   that   the
representative of  respondent  No.5  participated  in  the  Vibrant  Gujarat
Global Investors Summit on 31.1.2009, and  signed  an  MOU  with  respondent
No.6 for setting up a specialty alumina plant  in  Kutch.   The  MOU  stated
that the Government of Gujarat was assuring  all  necessary  permissions  to
respondent No.5.  The respondent No.5 will be investing an amount  of  Rs.30
crores in the proposed plant, and it will provide employment to 80  persons.
Thereafter, the above referred letter dated 12.6.2009 was addressed  by  the
respondent No.5 to the Deputy Collector Bhuj. The letter  sought  permission
to purchase land belonging to  Indigold.   It  referred  to  the  letter  of
respondent No.4 dated 6.12.2008. It stated that the  respondent  No.5  would
like to purchase the land for a bonafide industrial purpose, for setting  up
their upcoming project, Alumina Refinery Limited, on  the  land  admeasuring
39 acres and 25 gunthas, situated in villages  Kukma  and  Moti  Reladi.  It
then sought the permission from the competent authority,  under  Section  89
of the Tenancy Act, 1958 to register the sale in their favour.
51.         After writing to the Collector  on  16.6.2009,  without  waiting
for any communication from him, Alumina  wrote  to  the  Chief  Minister  on
18.6.2009. Directors of Alumina had a meeting with the Minister  of  Revenue
Smt. Anandiben Patel on 29.6.2009, which was recorded by Mr. Nitin Patel  on
30.6.2009. The Chief Minister’s Secretary wrote to the Principal  Secretary,
Revenue Department on 2.7.2009 seeking a note  on  the  possible  course  of
action.  The Revenue Department sought a factual report from the  Collector,
who instead of furnishing  the  same,  forwarded  the  proposal  of  Alumina
itself to the Department for granting  the  permission  for  the  sale.  The
Department looked into  the  statutory  provisions,  and  then  recorded  on
7.8.2009 that the Collector is required to take an action at  his  level  in
the matter, and the proposal be sent back to him.  After  looking  into  the
legal position, the Principal Secretary, Revenue Department  and  the  Chief
Secretary of the State wrote that the land be  taken  back,  and  thereafter
the issue of allotment be examined separately.
52.         The matter could have  rested  at  that,  but  the  Minister  of
Revenue put a remark that permission be granted as  a  special  case,  since
the  land  is  of  private  ownership.   The  matter  was  again   discussed
thereafter, and then a suggestion was  made  by  the  departmental  officers
that 50% of the unearned income may be sought from the  seller.   The  Chief
Secretary noted that land may be given to the new party provided  Industries
Department recommends it as per the laid down  rules.   He  maintained  that
the land be taken back, and then be  re-allotted  to  the  new  party.   The
Minister, however, again passed an order that as suggested earlier  by  her,
permission be given and, therefore, the  Collector  ultimately  granted  the
permission as directed by the  Government.   Thus,  as  can  be  seen,  that
instead of the statutory authority viz. the Collector acting  in  accordance
with the statutory mandate, only  because  a  direction  was  given  by  the
Minister that the statutory authority was bypassed, and even the enquiry  as
contemplated under sub-section 5 of Section 89A was given  a  go-by.   Thus,
as can be seen from the above narration what  emerges  from  the  record  is
that whereas Sections  89  and  89A  contemplate  a  certain  procedure  and
certain requirements, what has been done in  the  present  matter  is  quite
different. We may refer to Lord Bingham’s work titled ‘Rule  of  Law’  where
in the Chapter on exercise of power, he observes that:
            ‘Ministers and public officers at all level  must  exercise  the
      powers conferred on them in good faith, fairly, for  the  purpose  for
      which the powers were conferred, without exceeding the limits of  such
      powers and not unreasonably’ .

He quotes from R v. Tower Hamlets London  Borough  Council  [1988]  AC  858,
which states:
                  ‘Statutory  power  conferred  for   public   purposes   is
      conferred as it were upon trust, not absolutely, that is  to  say,  it
      can validly be used only  in  the  right  and  proper  way  which  the
      parliament, when conferring it, is presumed to have intended.’

53.         It is well settled that where the statute provides for a thing
to be done in a particular manner, then it has to be done in  that  manner
and in no other manner.  This proposition of law laid down in  Taylor  Vs.
Taylor (1875) 1 Ch D 426,431 was first adopted by the  Judicial  Committee
in Nazir Ahmed Vs. King Emperor reported in  AIR  1936  PC  253  and  then
followed by a bench of three Judges of this  Court  in  Rao  Shiv  Bahadur
Singh Vs. State of Vindhya Pradesh reported in  AIR  1954  SC  322.   This
proposition was further explained in paragraph 8  of  State  of  U.P.  Vs.
Singhara Singh by a bench of three Judges reported in AIR 1964 SC  358  in
the following words:-
                 “8. The rule adopted in Taylor v. Taylor is well recognised
           and is founded on sound principle.  Its  result  is  that  if  a
           statute has conferred a power to do an act and has laid down the
           method in which that power has to be exercised,  it  necessarily
           prohibits the doing of the act in any  other  manner  than  that
           which has been prescribed. The principle behind the rule is that
           if this were not so, the statutory provision might as  well  not
           have been enacted….”


This proposition has been later on reiterated in Chandra  Kishore  Jha  Vs.
Mahavir Prasad reported in 1999 (8) SCC 266, Dhananjaya Reddy Vs. State  of
Karnataka reported in 2001 (4) SCC 9 and Gujarat Urja Vikas  Nigam  Limited
vs. Essar Power Limited reported in 2008 (4) SCC 755.
54. (i)     Therefore, when Indigold informed the  Collector  on  6.12.2008
that they were ‘no more interested’ to put up any industrial  project,  and
were disposing of the entire piece of land to their prospective client, the
Collector was expected to hold the necessary enquiry. This was the  minimum
that he was expected to do. After holding the enquiry, if he was  convinced
that the industrial activity had not been started, he was expected to  pass
an order that the land will vest in the State which will have  to  be  done
after determining the compensation payable having regard to the price  paid
by the purchaser.  In the instant case, the respondent No.4 claims to  have
purchased the land for  Rs.70  lakhs.   As  pointed  out  by  Mr.  Krishnan
Venugopal himself, as per the jantri price of the lands at that time,  i.e.
even at the Government rate in 2008, the land  was  worth  Rs.4.35  crores.
The collector was expected to dispose of the land by auction which  is  the
normal method for disposal of natural resources which are national  assets.
Out of that amount, the compensation payable to the respondent  no.4  would
have been  around  Rs.70  lakhs  having  regard  to  the  amount  that  the
respondent No.4 had paid. This is because respondent no.  4  had  purchased
agricultural land to put up an  industry,  and  they  had  taken  no  steps
whatsoever for over five years to  set  up  the  industry.  They  were  not
expected to purchase the land, and thereafter sell it for profiteering. The
Jantri price is an official price.  In actual auction the State could  have
realised a greater amount. In permitting the  sale  inter-se  parties,  the
State exchequer has positively suffered.
(ii)  On the other hand, in the event, the Collector was to form an opinion
after receiving the bids or otherwise that it was not  worth  disposing  of
the land in that particular way, he could have divested Respondent No. 4 of
the land by paying compensation, and re-allotted the same to the Respondent
No 5 at an appropriate consideration.  The statute required him to act in a
particular manner and the land had to be dealt in  that  particular  manner
only, and in no other manner, as can  be  seen  from  the  legal  position,
accepted in various judgments  based  on  the  proposition  in  Taylor  vs.
Taylor.
55.         Thus inspite of the Secretaries  repeating  their  advice,  the
Minister of Revenue Smt. Anandiben Patel has insisted on treating this case
as a special case  for  which  she  has  recorded  no  justifiable  reasons
whatsoever, and orders were issued accordingly.  Under Section 89A(3),  the
Government is the appellate authority where the Collector does not grant  a
certificate for purchase of bonafide industrial  purpose.   Thus  what  has
happened, thereby is that the powers of the statutory authority  have  been
exercised by the Government which is an appellate authority.
56.         The State Government gave  three  additional  reasons  when  it
defended its decision. (i)The first reason was that if the  land  had  been
directed to be vested in  the  State  Government,  State  would  have  been
required to pay compensation to Indigold, and it would have  been  a  long-
drawn process for determining the valuation of the land, and thereafter for
finding the suitable and interested party to set up an industry.  As stated
earlier, this plea is not tenable.  If the law  requires  something  to  be
done in a particular manner, it has got to be done in that way  and  by  no
other different manner. (ii) The second reason given was  that  the  action
was in State’s own interest because through its public  sector  undertaking
i.e. GMDC, it was involved in the transaction viz. that is it is  going  to
have 26% equity.  As far as this part is concerned again it is difficult to
accept this reason also because one does not know what will be the value of
shares of the new company.  (iii) Third reason given was that the land  was
worth Rs.4.35 crores as per the Jantri in 2008,  and  as  per  the  revised
Jantri in 2011 it had come down to Rs.2.08 crores.   This  is  a  situation
which was brought about by the State itself and this cannot be a ground for
the State to submit that it would not have gained much in the process.
57.         That apart it has to be  examined  whether  the  Government  had
given sufficient reasons for the order it passed, at  the  time  of  passing
such order.  The Government must defend its  action  on  the  basis  of  the
order that it has  passed,  and  it  cannot  improve  its  stand  by  filing
subsequent affidavits as laid down by this Court long back  in  Commissioner
of Police, Bombay vs. Gordhandas Bhanji reported in AIR 1952 SC  16  in  the
following words:-
                 “Public orders, publicly made, in exercise of  a  statutory
           authority cannot be  construed  in  the  light  of  explanations
           subsequently given by the officer making the order  of  what  he
           meant, or of what was in his mind, or what he  intended  to  do.
           Public orders made by  public  authorities  are  meant  to  have
           public effect and are intended to affect the actings and conduct
           of those to whom  they  are  addressed  and  must  be  construed
           objectively with reference to the language  used  in  the  order
           itself.”


This proposition has  been  quoted  with  approval  in  paragraph  8  by  a
Constitution Bench in Mohinder Singh Gill vs. Chief  Election  Commissioner
reported in 1978 (1) SCC  405  wherein  Krishna  Iyer,  J.  has  stated  as
follows:-
                 “8. The second equally  relevant  matter  is  that  when  a
           statutory functionary makes an order based on  certain  grounds,
           its validity must be judged by  the  reasons  so  mentioned  and
           cannot  be  supplemented  by  fresh  reasons  in  the  shape  of
           affidavit or otherwise. Otherwise, an order bad in the beginning
           may, by the time it comes to court on account  of  a  challenge,
           get validated by additional grounds later brought out.”

In this context it must be  noted  that  the  Revenue  Minister’s  direction
merely states that it is a private land, and the  Governments  letter  dated
18.12.2009 speaks of the financial incapability of  Inidgold.   Neither  the
letter dated 18.12.2009 from the Government to the Collector, nor the  order
passed by the Deputy Collector on 15.1.2010 mention anything about:
   1. the mineral policy of the Government of Gujarat.
   2. the time taking nature of the process of acquiring the  land  and  re-
      allotting it.
   3. That the  second  sale  was  under  the  authority  of  the  Collector
      available to him under the first proviso to Section  89(1)  read  with
      condition no. (4) of the permission dated 1.5.2003 granted to Indigold
      to purchase the concerned lands.
In the absence of any of these  factors  being  mentioned  in  the  previous
orders, it is clear that they are being pressed into service  as  an  after-
thought. The Government can not be allowed to improve its stand  in  such  a
manner with the aid of affidavits.

58.          As  noted  earlier,  the  State  Government  is  an  Appellate
Authority under sub-section 3 of Section 89A, and it could not have given a
direction to the Collector who was supposed to take the decision under  his
own authority.  We may profitably refer to a judgment of  a  Constitutional
Bench in State of Punjay vs. Hari Kishan reported in AIR 1966 SC 1081.   In
that matter, the respondent desired to construct a cinema at  Jhajhar.   He
submitted an application and under the orders of the State  Government  all
applications  were  directed  to  be  referred  to  the  State  Government.
Therefore, though his application was initially accepted, the SDO  informed
him that the application was rejected.  He appealed to the State Government
and the appeal was rejected which has led  to  the  petition  in  the  High
Court.  The Punjab High Court framed the question as to whether  the  State
of Punjab was justified in assuming the jurisdiction which was conferred on
the licensing authority by the act.  The Supreme Court held in paragraph  4
of the judgment, that the  course  adopted  by  the  State  of  Punjab  had
resulted in the conversion of the appellate authority  into  the  licensing
authority. That was not permissible, and so it is in the present case.  The
reliance by the State Government on the overall control of the State  under
Section 126 of the Tenancy Act cannot be used when in the instant case  the
power is with the Collector and the  appellate  power  is  with  the  State
Government.  The power under Section 126 can be utilized for giving general
guidelines, but not for interference or  giving  directions  in  individual
cases.
59.         The  submission  that  condition  No.4  of  the  permission  to
purchase, obtained by respondent No.4 in 2003 permits the Collector to pass
such an order is equally untenable.  There  is  nothing  in  the  statutory
scheme to suggest that a second sale, inter se parties, after  the  failure
of a purchaser to set up an industry is permissible. In such an event,  the
statute requires an enquiry to be conducted by  the  collector.  If  he  is
satisfied that there is a failure to set up the industry, the  compensation
to be paid to the purchaser is determined. After this stage the land  vests
in the Government. It is  thus  clear  that  the  condition  No  4  in  the
permission obtained by Respondent No. 4 is bad in law, not having its basis
in any statutory provision.  Even assuming  that  the  Collector  had  that
power to lay down such a condition, the authority to permit the sale as per
the said condition had to be exercised by him in  the  manner  contemplated
under Section 89 A (5) viz. after holding the enquiry as prescribed.   Here
the enquiry itself was dispensed with. Rule 45(b) of the Bombay Tenancy and
Agricultural Lands Rules, 1959 also cannot be pressed into service for  the
reason that, neither under Section 89 nor under Section 89A, a sale  inter-
se parties is contemplated or permitted.
60.         Now, what is to be noted is that wherever an  agriculturist  is
in possession of a land, either as an owner or as a tenant protected by the
statute, transfer of his land for industrial purposes  is  subject  to  the
conditions regulated by the Act. It is for the protection and  preservation
of the agricultural land that the bar against conversion is  created  under
Section 89. Thereafter, as an exception, only a bonafide use for industrial
purpose is permissible under section 89A.  Ownership of respondent No.4 was
subject to the conditions of utilization for bonafide  industrial  purpose,
and it was clear on record that respondent No.4 had failed to  utilize  the
land for bonafide industrial purpose. The reliance on Sections 7 and 10  of
the Transfer of Property Act is also  misconceived  in  the  present  case,
since the Tenancy Act is a welfare enactment, enacted for the protection of
the agriculturists. It is a special statute and the  sale  of  agricultural
land permitted under this statue will have to be held as  governed  by  the
conditions prescribed under the statute itself. The special provisions made
in the Tenancy Act will therefore prevail over those  in  the  Transfer  of
Property Act to that extent.
61.         Besides, the present case is clearly a case of dictation by the
State Government to the Collector. As observed by Wade and Forsyth in Tenth
Edition of Administrative Law:-
                 “if the minister’s intervention is in  fact  the  effective
           cause, and if the power to act belongs to a body which ought  to
           act independently, the action taken is invalid on the ground  of
           external dictation as well as on  the  obvious  grounds  of  bad
           faith or abuse of power”.


The observations by the learned authors to the same effect in  the  Seventh
Edition were relied upon by a bench  of  three  judges  of  this  Court  in
Anirudhsinhji Karansinhji Jadega and anr. vs. State of Gujarat reported  in
1995 (5) SCC 302. In this matter the  appellant  was  produced  before  the
Executive Magistrate, Gondal, on the allegation that certain  weapons  were
recovered from  him.   The  provisions  of  TADA  had  been  invoked.   The
appellant’s application for bail was rejected.  A specific point was  taken
that the DSP had not given prior approval and the invocation  of  TADA  was
non-est. The DSP, instead of granting prior approval, made a report to  the
Additional Chief Secretary, and asked for permission to proceed under TADA.
 The Court in para 13, 14,  15  has  held  this  to  be  a  clear  case  of
‘dictation’, and has referred to Wade and Forsyth on ‘Surrender Abdications
and Dictation’.
62.         The respondent No.5 had the courage to state that  the  notings
of the Secretaries were inconsequential.  As a beneficiary of the  largesse
of the Government, respondent No.5 could say that, but it is  not  possible
for us to accept the same.  In Trilochan Dev Sharma  vs.  State  of  Punjab
reported in AIR 2001 SC 2524 what is observed by this Court is relevant for
our purpose
                 “In  the  system  of  Indian  Democratic   Governance,   as
           contemplated by the constitution, senior officials occupying key
           positions such as Secretaries are not supposed to mortgage their
           own discretion, volition and decision making  authority  and  be
           prepared to give way or being pushed back or  pressed  ahead  at
           the behest of politications, for carrying out commands having no
           sanctity in law.”

A higher civil servant  normally  has  had  a  varied  experience  and  the
ministers ought not to treat his opinion with scant respect.  If  Ministers
want to take a different view, there must be compelling  reasons,  and  the
same must be reflected on the record. In the present case, the  Secretaries
had given advice in accordance with the statute and yet  the  Minister  has
given a direction to act contrary thereto and permitted the sale  which  is
clearly in breach of the statute.

63.         Now, the effect of all that is stated above is  that  the  land
which was purchased by respondent No.4 for Rs.70 lakhs is permitted by  the
Government of Gujarat to be sold directly to  respondent  No.5  at  Rs.1.20
crores to set up an industry which could not have been done legally.  It is
undoubtedly not a case of loss of hundreds of  crores  as  claimed  by  the
appellants, but certainly a positive case of a loss of a few crores by  the
public exchequer by not going for public auction of the concerned property.
 It is true as pointed out by Mr. Venugopal, learned senior counsel that in
a given case the state may  invite  an  entrepreneur  and  give  an  offer.
However, in the instant case, the sale of the land for  industrial  purpose
is controlled by the statutory provisions, and the State was bound  to  act
as per the requirements of the statute.  The minister’s direction  as  seen
from the record clearly indicates an  arbitrary  exercise  of  power.   The
orders passed by the Government cannot  therefore  be  sustained.  As  seen
earlier, there is neither a power nor a justification to make  any  special
case, in favour of the Respondent No 5. Such exceptions may open floodgates
for similar applications and orders, even though the Gujarat Government  is
contending that this order is purportedly not to be treated as a precedent.
64.         In our view, considering the scheme of the act, the process  of
industrialization must take  place  in  accordance  therewith.   As  stated
earlier if the law  requires  a  particular  thing  should  be  done  in  a
particular manner it must be done in that way and none  other.   The  State
cannot ignore the policy intent  and  the  procedure  contemplated  by  the
statute.  In the instant case, the State could have acquired the land,  and
then either by auction or by considering  the  merit  of  the  proposal  of
respondent  No.5  allotted  it  to  respondent  No.5.   Assuming  that  the
application of the Respondent No 5 was for a bona-fide  purpose,  the  same
had to be examined by the  industrial  commissioner,  to  begin  with,  and
thereafter it should have gone to the collector. After the  property  vests
in the Government, even if there were other bidders to  the  property,  the
collector could have considered  the  merits  and  the  bona-fides  of  the
application of Respondent No. 5, and nothing would have prevented him  from
following the course which is permissible under the law. It is  not  merely
the end but the means which are of equal importance, particularly  if  they
are enshrined in the legislative scheme. The minimum that was required  was
an enquiry at the level of the Collector who is  the  statutory  authority.
Dictating him to act in a  particular  manner  on  the  assumption  by  the
Minister that it is in the interest of  the  industrial  development  would
lead to a breach of the mandate of the statute framed by  the  legislature.
The Ministers are not expected to act in this manner  and  therefore,  this
particular route through the corridors of the  Ministry,  contrary  to  the
statute, cannot be approved. The present case is clearly one of dereliction
of his duties by the Collector  and  dictation  by  the  Minister,  showing
nothing but arrogance of power.

65.         The High Court has erred in overlooking the legal position.  It
was expected to look into all the earlier mentioned aspects.  The  impugned
judgment does not reflect on the issues raised in the petition.   It  could
not be said that the petition was delayed and merely because investment had
been made by the respondent No.5, the court would decline to look into  the
important issues raised in the PIL.

Epilogue:-
66.         Before we conclude, we may observe that India is essentially  a
land of villages. Although, urbanization and  industrialization  is  taking
place, the industry has not developed sufficiently, and large part  of  our
population is still required to depend on agriculture for sustenance. Lands
are, therefore, required to be retained for agricultural purposes. They are
also required to be protected from  the  damage  of  industrial  pollution.
Bonafide industrial activity may mean good income to the entrepreneurs, but
it should also result into  good  employment  and  revenue  to  the  State,
causing least  pollution  and  damage  to  the  environment  and  adjoining
agriculturists.   While granting the permission under Section 89A  (5)  the
Collector has to examine all these aspects.  This is because the only other
exception for conversion of agricultural lands to non-agricultural  purpose
is for those lands which  are  in  an  industrial  zone.   As  far  as  the
conversion of  lands  otherwise  than  those  in  the  industrial  zone  is
concerned, all the aforesaid precautions are required to be  taken  when  a
decision is to be arrived at  as  to  whether  the  application  is  for  a
bonafide industrial purpose. In the  instant  case,  there  were  newspaper
reports of apprehensions and protest of the adjoining farmers.  The Revenue
Secretary and the Chief Secretary had placed the  statutory  provisions  on
record.  It was expected of the Government and the Revenue Minister to take
cognizance of these apprehensions of the farmers as well as  the  statutory
provisions brought to her  notice  by  the  secretaries.   She  has  simply
brushed aside the objections of the secretaries merely  because  the  Chief
Minister’s secretary had written a letter, and because she was the minister
concerned. While over-ruling the opinion of secretaries  to  the  concerned
department, the Minister was expected to give some reasons  in  support  of
the view she was taking. No such reason has come  on  record  in  her  file
notings. She has ignored that howsoever high you may be, the law  is  above
you.

67.         Development should not be measured merely in terms of growth of
gross domestic product, but it  should  be  in  terms  of  utility  to  the
community and the society in general. There is a certain inbuilt wisdom  in
the statute which is the mandate of the legislature  which  represents  the
people. The Minister has clearly failed to pay respect to the same.

Hence, the following decision:-

68.         Having noted the legal position and the factual  scenario,  the
impugned judgment and order passed by the High Court will have  to  be  set
aside.  The prayers in the PIL will have to be entertained to hold that the
direction of the State Government dated 18.12.2009 and the consequent order
issued by the Collector of Kutch on 15.1.2010 is arbitrary, and bad in  law
for being in violation of the scheme and the provisions of Sections 89  and
89A of the Tenancy Act. The direct sale of land by Indigold to  Alumina  is
also held to be bad in law, and inoperative.
69. (i)      In normal circumstances, the order hereafter would  have  been
to direct the Collector to proceed in accordance with Section 89A(5)  viz.,
to hold an enquiry to decide whether the purchaser viz. Indigold had failed
to commence the  industrial  activity  and  the  production  of  goods  and
services within the period specified.  In the instant  case,  there  is  no
need of any such direction to hold an enquiry, in view  of  the  letter  of
Indigold itself, dated 6.12.2008, wherein, it clearly stated that they were
no more interested in putting up any industrial project in the said land.
(ii)  Consequently, there will be an order that the land shall vest in  the
State Government free from all encumbrances.  This vesting order,  however,
has to be on payment of appropriate compensation to the  purchaser  as  the
Collector may determine.  In the instant case, there is no need  of  having
this determination, for the reason that Indigold has received from  Alumina
Rs. 1.20 crores as against the amount of 70 lakhs, which it had paid to the
agriculturists when it bought those lands in  2003.  Neither  Indigold  nor
Alumina is making any grievance towards this figure or the payment thereof.
 In fact, it is the case of both of them that the direct sale  by  Indigold
to Alumina for this amount as permitted by the  State  Government  be  held
valid.  That being so, this amount of Rs.  1.20  crores  would  be  set-off
towards the compensation which would be payable by the State Government  to
the  purchaser  Indigold,  since  the  land  was  originally  purchased  by
Indigold, and is now to vest in the State Government.
(iii) The third step in this regard is that the land is to be disposed  off
by the State Government, having regard to the use of the  land.   The  land
was supposed to be used for the industrial activity on  the  basis  of  the
utilization of bauxite found in Kutch, and respondent No. 5 has proposed  a
plant based on use of bauxite. The disposal of the land will, however, have
to be at least as per the minimum price that would  be  receivable  at  the
Government rate.  In the facts and circumstances of this case, having noted
that the respondent No.5 claims to have made some good investment, and that
the Respondent No.5  has  also  offered  to  pay,  without  prejudice,  the
difference between Rs.4.35 crores and Rs.1.20 crores i.e. Rs.3.15 cores  to
the State, the land will be permitted  to  be  disposed  of  by  the  State
Government to Alumina provided Alumina pays this amount of Rs. 3.15  crores
to the State Government.   This  particular  order  is  being  made  having
further noted that, Alumina has acted on the basis of the  commitment  made
to it by the Government of Gujarat in the Vibrant Gujarat  Summit,  and  in
furtherance of the industrial development policy of the State. It  is  also
relevant to note that the respondent No.5 had made an  application  to  the
Collector in the year 2009 for permitting the purchase of the land, and has
been waiting to set up its industry for the last four  years.  Mr.  Ahmadi,
learned senior counsel appearing for  the  appellants  has  also  submitted
that, as such, appellants are not against the development  of  Kutch  area,
but they do want the state to follow the law and exchequer not  to  suffer.
In the circumstances, although we do not approve the action  of  the  State
Government, and hold it to be clearly arbitrary and untenable,  we  are  of
the view that the aforesaid  order  will  be  appropriate  to  do  complete
justice in the matter.
70.         In the circumstances, we pass the following orders:-
(a)   The appeal is allowed in part;
(b)   The impugned judgment and order passed by  the  High  Court  is  set-
aside;
(c)   The PIL No.44 of 2012 filed by the appellants is allowed  by  holding
that the order dated 18.12.2009 passed by the Government of Gujarat and  by
the Collector of Kutch on 15.1.2010, are held to be arbitrary  and  bad  in
law;
(d)   In the facts  and  circumstances  of  this  case,  the  sale  of  the
concerned land by Indigold to Alumina is held to be bad in law.   The  land
involved in the present case is held to have vested in the State of Gujarat
 free from all encumbrances, and the amount of  Rs.  1.20  crores  paid  by
Alumina to Indigold is treated as full  payment  towards  the  compensation
payable by the State  to Indigold.
(e)   If Alumina is interested in their proposed project, it shall  pay  an
amount of Rs. 3.15 crores to the Government of Gujarat within three  months
hereafter.  On such a payment being made, an order of allotment of the land
to Alumina will be issued by the State Government.  The further  activities
of Alumina on the concerned parcel of  land  will  start  only  after  this
payment is made, and in the event the amount is not so  paid  within  three
months hereafter, the Government will proceed  to  take  further  steps  to
dispose of the land having regard to the use of the land.

(f)   In the facts of the present case, there  shall  be  no  order  as  to
costs.

                       …………………………………..J.
                                       [ H.L. Gokhale  ]



                       ……………………………………J.
                                        [ J. Chelameswar ]

New Delhi
Dated: January 23, 2014

-----------------------
|Sr.No. |Name of Village    |Survey No.   |Acre/Guntha       |
|1      |Kukma              |94/1         |4.14              |
|2      |Kukma              |94/2         |2.16              |
|3      |Moti Reldi         |101/1        |9.30              |
|4      |Moti Reldi         |106          |6.10              |
|5      |Moti Reldi         |100/1        |2.20              |
|6      |Moti Reldi         |107          |4.15              |
|7      |Moti Reldi         |105/4        |5.21              |
|8      |Moti Reldi         |110/2/3      |4.19              |
|       |                   |Total        |39.25             |


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