THE NAIHATI MUNICIPALITY AND ORS. versus CHINMOYEE MUKHERJEE AND ORS.

Citation: [1996] SUPP. 4 S.C.R. 316 · Decided: 06-08-1996 · Supreme Court of India · Bench: K. RAMASWAMY, G.B. PATTANAIK · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
THE NAIHATI MUNICIPALITY AND ORS. 
v. 
CHINMOYEE MUKHERJEE AND ORS. 
AUGUST 6, 1996 
B 
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.] 
Land Acquisition Act, 1894: 
Ss.4( I), 6( I )-Acquisition of land for ~mblic pwpose'---Rehabilitation 
C of hawkers by acquiring land-Held is a public pwpose-Money cont1ibuted 
by hawkers' Union for the acquisition and deposited into the funds of 
mlmicipality fanned and fused into integral pmt of the municipal funds-After 
the deposit by the hawkers they have no 1ight to withdraw the amount-High 
Cowt was not 1ight in holding that the amount did not become part of the 
funds managed or controlled by the local authority within the meaning of the 
D second proviso to sub section (1) of s.6. 
E 
F 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3841 of 
1983. 
From the Judgment and Order dated 26.7.79 of the Calcutta High 
Court in C.R. No. 2030 of 1978. 
Rathin Das for the Appellants. 
Parijat Sinha, D.B. Mukherjee, Rana Mukherjee, H.K. Puri, Ms. 
Sumita Mukherjee and Goodwill Indeevar for the Respondents. 
The following Order of the Court was delivered : 
This appeal by special leave arises from the judgment of the Division 
Bench of the Calcutta High Court dated July 26, 1979 made in C.R. No. 
2030 (W) of 1978. The admitted facts are that a resolution was passed by 
G the appellant-municipality for rehabilitation of the hawkers by acquiring 
the land in question. By that date the municipality did not have sufficient 
funds to meet the acquisition costs. As a consequence, the hawkers' union 
was requested to contribute the fund to meet acquisition costs. In fur-
therance thereof, the hawkers union deposited with the municipality a sum 
H of Rs. 3,90,000 for the acquisition of the land. The said amount was 
316 
NAIHA11 MUNICIPALI1Yv. CH!NMOYEEMUKHERJEE 
317 
credited to the funds of the municipality. Thereafter a reference was made A 
to the Government requesting to acquire the land. In furtherance thereof, 
the Government issued notification under Section 4(1) of the Land Ac-
quisition Act, 1894 (1 of 1894) (for short, the 'Act') on August 1, 1974 and 
acquired the plots of land bearing Nos. 412 to 426, 497, 2400 to 2407 
admeasuring about 4.717 hectares of the land in the village Kantalpara, P.S. B 
Nahati Municipality. Declaration under Section 6 came to be published on 
November 9, 1976. Both the notification and the declaration came to be 
challenged in the writ petition. The High Court concluded in its judgment 
that though there was initial resolution passed by the municipality to 
acquire the land there was no final resolution directing the Commissioner 
to spend the money from the fund of the municipality. The hawkers C 
themselves deposited the money with the municipal Corporation. The 
Government imposed a condition that the said amount should be used only 
for the purpose of acquisition of land for rehabilitation of the hawkers. The 
appropriate provisions contai11cd in the Municipality Act have not been 
complied with. Under those circumstances, there is no public purpose D 
indeed for acquiring the land. Accordingly, the declaration under Section 
6 came to be quashed. Thus this appeal by special leave. 
We have been taken through the reasoning of the learned Judges and 
have also heard contentions of the learned counsel for the parties. We arc 
of the view that High Court was not right in its approach in dealing with 
the matter. The rehabilitation of the hawkers by acquiring the land is 
indisputably the public purpose; otherwise it would be a perpetual nuisance 
to the residents of the municipal area if hawkers were permitted to hawk 
the goods on public pavement obstructing the traffic flow in the city. 
Therefore, it can, by no stretch of in1agination, be considered that it is not 
E 
F 
a public purpose. The question then is: whether the part or whole of the 
compensation would come from the funds of the local authority? The 
second proviso to sub-section (1) of Section 6 deals with the subject matter 
according to which no such declaration shall be made unless the compen-
sation to be awarded for such property is to be paid by a Company, or 
wholly or partly out of public revenues or some funds controlled or G 
managed by a local authority. Indisputably municipality is a local authority 
and the funds are controlled or managed by the municipality. In view of the 
fact that at the relevant point of time the municipality did not have 
necessary funds to meet the cost o

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