Ponnaia alias Arulanandudayan and Others vs The Right Hon'ble the Secretary of State for India in Council

Spencer, J.—Before calling for a finding as to the facts connected with the payment of compensation for the property concerned in this

appeal, I stated my reason for considering that a payment by Government of one anna out of a sum of Rs. 3,352-5-o was a mere evasion of the

law which requires that before a declaration can be legally made that any particular land is needed for a public purpose, the compensation to be

awarded must either be paid by a company or wholly or partly out of public revenues or some fund controlled or managed by a local authority. In

a case where land has to be acquired for a company the Act permits the whole of the cost of acquisition being met out of the funds of the

company, and all that is required by Section 40 of Act I of 1894 is that the Local Government should be satisfied upon an enquiry made by an

officer appointed by them that the acquisition is needed for the construction of some work which is likely to prove useful to the public. The present

acquisition was not made at the instance of any company. It now transpires that there was here no fund controlled or managed by a local authority

out of which the cost of acquisition was to be met, if we understand the words ""local authority"" as defined in Section 3, Clause 28 of the General

Clauses Act, to denote a Municipal Committee, District Board or other authority entrusted by the Government with the management of a

Municipal or Local Fund.

It is of no consequence for deciding the question before us that u/s 60 of the Madras Local Boards Act (XIV of 1920) all public roads in the

Ramnad District Board or the Taluq Board and that after the new road is formed, the cost of its upkeep will come out of local funds. The

defendant admitted in his written statement that the President of the District Board informed the plaintiffs that neither the District Board of Ramnad

nor the Taluq Board of Devakottah proposed to construct the road in question. The only witness examined after the remand did not state that any

road fund to which private contributions were invited was started and managed by the District or Taluq Board. The Government Pleader does not

contend that the present case falls under the last part of the proviso to Section 6(1) of Act I of 1894, but he maintains that when Karuppan Cherry

paid the whole of the sum required for compensating the tenant in occupation of the land into the Treasury before the notification by Government

and when he paid the whole of the amount awarded as compensation to owner of the melvaram of landlord''s interest, represented in this case by

the Estate Collector of the Sivaganga Zemindari estate, after the notification, minus one anna contributed by Government, those amounts became

merged in the general revenues, and that thus the compensation became payable out of public revenues, as required by the first part of the proviso

to Section 6(1) of the. Act. He also relies on the circumstance that the money so contributed was deposited in Court u/s 31, as the persons

interested refused the compensation tendered to them; and he points out that, if the amount awarded is increased by the District Court,

Government will have to make good the difference and Karuppan Chetty would likewise possess no right to any portion of the amount which

happened to be left unspent or unclaimed.

In my opinion when money is paid into a Government Treasury by the hand of one private individual and after passing intact through the

Treasury is paid out into the hand of another private individual it cannot with any accuracy be described as becoming part of the public revenues.

Government had no absolute disposing power over it and could not without a gross breach of trust make any other use of it than by utilising it for

the purpose for which the contributor intended it to be used, namely, as compensation for the surrender of the lands acquired. This money was not

revenue due to Government on any land, nor was it any cess, tax, duty, custom or other due recoverable under Act II of 1864. It appears clear to

my mind that if the provisions of the Land Acquisition Act are not strictly complied with, but are made a cloak for attempting to obtain a transfer of

an indefeasible title under the guise of a public purpose, the proceedings do not operate towards the creation of a valid title to the land in

Government, as it was held by the Privy Council in Luchmes-war Singh v. Chairman, Darbhanga Municipality (1890) ILR 18 C 99 (P C).

I would therefore allow the appeal and give the plaintiff a decree as prayed for with costs here and in the Lower Court. u/s 82, Civil Procedure

Code, Government will have two months'' time for satisfying the decree.

Ramesam, J.

I agree.