Kingsley Fernando v. Dayaratne and Other*
DAYARATNE AND OTHERS
COURT OF APPEAL.
S. N. SILVA. J.
C.A. APPLICATION NO. 1298/87.
JUNE 21. JULY 01 AND 08, 1991.
Land Acquisition – Public purpose – Urgency – Mandamus – Land Acqui-sition Act s. 38 – Housing Development Authority Act, No. 17 of 1979 -Right of Urban Development Authority to alienate land – Right to claimdivesting (s. 39 A (1) and (2) of Land Acquisition Act).
Section 39 A (I) of the Land Acquisition Act vests a discretionary powerin the Minister to divest any land that has vested upon an order under sec-tion 38 when possession has been taken for or on behalf of the State, to beexercised only if the pre-conditions set out in paragraphs (a) to (d) in sub-section (2) are satisfied to wit:
no compensation has been paid under this Act to any person orpersons interested in the land in relation to which the said divest-ing Order is to be made,
the said land has not been used for a public purpose after posses-sion of such land has been taken by the State,
no improvements to the said land have been effected,
the person or persons interested in the said land have consented inwriting to take possession Of such land immediately after the divest-ing Order is published in the Gazette.
Section 39 A applies only wheii the State has absolute title to and posses-sion of the land that has been acquired. The former owner has by then lostthe ownership and possession of the land and his legal claim is for compen-sation. Section 39 A does not give a right to the former owner to seek adivesting order even where the pre-conditions are satisfied but only vests adiscretionary power in the Minister to make a divesting Order provided thepre-conditions mentioned arc satisfied.
Section 30(1) of the Land Acquisition Act provides for the abandoning ofthe acquisition proceedings at any stage before the vestina Order is made
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under s. 38. Section 39(1) provides for the revocation of a vesting ordermade under s. 38 which maybe made only if possession of the land has notactually been taken for or on behalf of the State. Section 39 A applies in asituation where possession also has been taken. Section 50(1), 39(1) and39(A) do not afford a statutory right to a person interested in the land todemand the exercise of such power by the Minister.
The underlying basis of the exercise of the powers vested in the Ministerby this group of sections is a situation where the land is no longer requiredfor a punlic purpose.
According to the scheme the major portion of the land acquired (12A)was to be developed and alienated to members of the public for the specificpurpose of constructing bouses. Since the land was mafshy it had to bereclaimed and allowed to consolidate before construction work is com-menced. The development work to be carried out by the N.H.D.A. includesthe provision of roads, the widening of existing roads, the provision of waterand electricity. An extent of two acres and two roods was handed to theU.D.A. for the purpose of development on a commercial basis. There is noillegality in handing to the U.D.A. a portion of the land acquired for a hous-ing object, for the provision of commercial facilities necessary to serve theincreasing population of the town. These facilities are provided by theU.D.A. merely as an agent of the N.H.D.A.
In a divesting what is contemplated is a complete reversal of the statusquo ante and not a piece – meal divesting of particular portions of a land,that is vested. Hence the application for a divesting of a particular portionof the land that is vested, is in any event untenable and mandamus cannotissue. The divesting has to relate to the entire extent covered by the vestingOrder.
The fact that land was acquired for a particular public purpose does notprevent the land being used for another public purpose.
Case referred to:
1. Gunewardena v. D.R.O. Wcligama Korale 73 NLR 333,335
APPLICATION for Mandamus to compel divesting of a portion of aland acquired.
R. K. W. Guoasekcra for petitioner.
K. Sripavan S.S.C. for 1st and 2nd respondents.
N. R. M. Daluwatta, P.C. with Rohan Sahabandu for 3rd and 4th Respond-ents.
Kingsley Fernando r. Dayaratne and Others (S. N. Silva, J.)
September 06, 1991.
S. N. SILVA, J.
The Petitioner has filed this application for a Writ of Man-damus to compel the 1st Respondent, the Minister of Landsand Land Development to divest the lands described as Lots 1and 4 of Plan No. 2019 A (PI), less the portion shaded inblack. The claim of the Petitioner is that this divesting Ordershould be made in terms of section 39 A of the Land Acquisi-tion Act, as amended by Act, No. 8 of 1979.
The said lands described as lots No. 1 and 4 form part of alarger land known as “Mambole” and “Kudamambole kum-bura” situated within the Town Council limits of Ragama. Theentire extent of this larger land. (12A-02R-04.24P) wasacquired under the Land Acquisition Act for a housing objectas provided for in section 6(1) of the National Housing Devel-opment Authority Act, No. 17 of 1979. The acquisition waseffected on grounds of urgency in terms of an order madeunder proviso (a) to section 38 of the Land Acquisition Act,made on 28-10-1980. A declaration under section 5 of the Actwas also made in respect of the said land on 13-12-1980. The-reupon, possession of the land was taken by the State. ThePetitioner and seven other persons challenged the said acquisi-tion order by application No. 403/81 filed in this Court. Thisapplication was dismissed in November 1983.
According to the petition, the Petitioner was led to file thepresent application upon reading a notice in the newspapers of12-07-1987 (P4) by which the Urban Development Authority(U.D.A. the 4th Respondent) called for bids for the lease ofone acre and one rood of the said land in small allotments-oftwo perches each, to locate businesses and offices. LearnedCounsel for the Petitioner submitted that the land wasacquired for a housing object to be carried out by the National
Housing Development Authority (N.H.D.A. the 3rd Respond-ent) and that the U.D.A. had no power to alienate a portion
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of the land for commercial purposes. The claim for a Writ ofMandamus is made on the basis that the land has not beenused for a public purpose and no improvements have beenmade thereto after acquisition. Admittedly the Petitioner hasnot yet been paid compensation although a sum ofRs. 700,000/- was deposited with the acquiring officer for thispurpose, by the N.H.D.A. Hence, learned Counsel submittedthat the requirements specified in section 39 A(2) have beenfulfilled and that the Petitioner has a right enforceable byMandamus to require the 1st Respondent to divest the land byan order under section 39 A(l).
The claim for Mandamus is resisted by all Respondents.The 1st Respondent being the Minister of Lands, has specifi-cally stated that improvements to the land acquired had beeneffected by the Road Development Authority after possessionof the land was taken. It was also urged by learned SeniorState Counsel appearing for the Minister, that the Minister isnot under a statutory duty to divest the land to the Petitioner.
The N.H.D.A. and U.D.A. have in their objections andaffidavits disclosed the circumstances relevant to the acquisi-tion and those under which the portion of land described innewspaper notice marked ‘P4* was handed over to the U.D.A.for alienation. According to the affidavit of W. D. Aillappe-ruma, Chairman of the N.H.D.A., the entire extent in excessof 12 acres was acquired for a Town Centre Project forRagama to be carried out in accordance with the master planfor Ragama as prepared by the U.D.A. According to this planthe major portion of the land is to be developed and alienatedto members of the public for the specific purpose of construct-ing houses. Since the land is marshy it would be reclaimed andallowed to consolidate before construction work is com-menced. The development to be carried out by the N.H.D.A.includes the provision of roads, the widening of existing roads,the provision of water and electricity. An extent of two acresand two roods was handed over to the U.D.A. for the purpose
Kingsley Fernando v. Dayaratne and'Others (S. N. Silva, J.)
of developing the said portion adjacent to the housing projecton a commercial basis. A. Wedamulla, Director of Lands ofthe U.D.A. has stated in his affidavit that a portion of theland was handed over to the U.D.A. upon acquisition but thatno work could commence in view of the pendency of the pre-vious application C.A. 403/81. He has stated that now theland which was in a marshy state has been reclaimed andallowed to consolidate. That, a portion of the land has alsobeen filled up. The price for alienation includes the cost ofinfra-structure and ancillary services. On the basis of theaforesaid material learned President’s Counsel appearing forthe N.H.D.A. and U.D.A. submitted that the land is beingused for a public purpose and that several measures have beenand will be taken for the improvement of the land in relationto the public purpose for which it was acquired. Therefore theprovisions of paragraphs (b) and (c) of section 39 A (2) do not• apply in relation to this land.
It was also submitted that the validity of the acquisitionwas challenged and decided in the previous application andthat the Petitioner is indirectly seeking to challenge the acqui-sition, once again by means of this application. That, in anyevent there is no illegality in using a portion of the landacquired for a housing object, for the provision of commercialfacilities necessary to serve the increasing population of thetown. These facilities are provided by the U.D.A. merely as anagent of the N.H.D.A. That the validity of the action taken,and the applicability of section 39A(2) should be judged inrelation to the entire land and not in relation to a specifiedportion of it.
I have carefully considered the submissions of counsel inrelation to the claim for a Writ of Mandamus. Section 39 A
and (2) introduced by the amendment No. 8 of 1979 statesas follows:—
"39A. (1) Notwithstanding that by virtue of an Orderunder section 38 (hereinafter in this section referred to
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as a “vesting Order”) any land has vested absolutely inthe State and actual possession of such land has beentaken for or on behalf of the State under the provisionsof paragraph (a) of section 40, the Minister may, sub-ject to sub-section (2), by subsequent Order publishedin the Gazette (hereinafter in this section referred to asa “divesting Order”) divest the State of the land sovested by the aforesaid vesting Order.
The Minister shall prior to making a divestingOrder under sub-section (1) satisfy himselfjthat —
no compensation has been paid under this Act toany person or persons interested in the land inrelation to which the said divesting Order is to bemade;
the said land has not been used for a public pur-pose after possession of such land has been takenby the State under the provisions of paragraph(a) of section 40;
no improvements to the said land have beeneffected after the Order for possession underparagraph (a) of section 40 had been made; and
the person or persons interested in the said landhave consented in writing to take possession ofsuch land immediately after the divesting Orderis published in the Gazette.”
Sub-section (1) specifies the stage at which section 39A willapply. That is, after an order has been made vesting the landabsolutely in the State in terms of section 38 and possession ofthat land has been taken 'for or on behalf of the State as pro-vided for in paragraph (a) of section 40. In other words, thissection applies only when the State has absolute title to andpossession of the land that has been acquired. The formerowner has by then lost the ownership and possession of theland. His legal claim is for the payment of compensation.
Kingsley Fernando v. payaratae and Others (S. N. Silva, J.)
Sub-section (2) specifies certain pre-conditions to the mak-ing of a divesting Order under sub-section (1). The pre-conditions in paragraphs (a), (b) and (c) are negative in nature.They relate, respectively, to the non-payment of compensationand, the absence of use for a public purpose and of anyimprovement effected, after possession of the land was takenover by the State. The fourth pre-condition contained in para-graph (d) is the written consent of the former owner to takeover immediate possession of the land after divesting.
The consequences of a divesting Order are set out in sec-tion 39A (4). Paragraphs (a) and (b) of this sub-section havethe effect of restoring the status quo ante in relation to titleand interest to the land that was acquired. Paragraph (c) is forthe restoration of possession of the land. Paragraphs (d) and
remove all claims against the State for,compensation anddamages in respect of the acquisition.
The basic issue for determination in this application iswhether section 39A gives a right to a former owner to seek adivesting Order if the pre-conditions are satisfied as contendedby Counsel for the Petitioner or; whether this section merelyvests a discretionary power in the Minister to make a divestingOrder, if it is considered necessary, in situations where the pre-conditions are satisfied, without a corresponding right in theformer owner to demand the exercise of such power, as con-tended by Counsel for the Respondents. This issue has to beconsidered in the light of the scheme of the Land AcquisitionAct. As stated in the long title to the Act its objective is tomake provision for the acquisition of lands and servitudes forpublic purposes.
The procedure of such acquisition commences upon a deci-sion made by the Minister, in terms of section 2(1) that land inany area is needed for a public purpose. The decision gets nar-rowed down to a particular land or a particular servitude,when the Minister makes a direction to the acquiring officer interms of section 4(1). Thereafter, the Act provides for the var-
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ious stages in the acquisition of the particular land or servi-tude. A person having an interest in the land or the servitudeto be acquired, is provided an opportunity in terms of section4(4) of the Act to object to such acquisition. After a firm deci-sion is made by the Minister in respect of the acquisition by adeclaration under section 5(1), a person having such an inter-est has a right to make a claim for compensation in terms ofsection 7(2)(c). The succeeding provisions of the Act afford anopportunity to such person to vindicate his claim for compen-sation and, to title where there is a dispute.
Section 50(1) provides for the abandonment of the acquisi-tion proceedings at any time before a vesting order is madeunder section 38. Section 39(1) provides for the revocation of avesting order under section 38, which may be made only if thepossession of the land has not actually been taken for or onbehalf of the State. As noted above, section 39A introduced bythe amendment applies in a situation where the possession ofthe land has also been taken. These sections that deal withabandonment, revocation and divesting, stand out from thegeneral procedure as contained in the Act. In my view thesesections constitute a different class of power vested in the Min-ister, to be exercised only if it is considered that the land is nolonger required for a public purpose. They provide for a rever-sal of the acquisition that commences upon a decision of theMinister made in terms of section 2(1) that land or a servitudeis needed for a public purpose, at different stages of the pro-cess. It would therefore be totally inconsistent with the statu-tory scheme to contend that any of these provisions, section50(1), 39(1) or 39A afford a statutory right to a person inter-ested in the land to demand the exercise of such power by theMinister. As noted above, the right of a person interested inthe land or the servitude to be acquired, to object to suchacquisition and to claim compensation, is specifically providedfor. Therefore such a person could have no statutory right todemand a reversal of the acquisition process by invoking anyof the provisions set out in section 50(1), 39(1) or 39A. I am
Kingsley Fernando v. Daysratne and Others (S. N. Silva, 3.)
also of the view that the underlying basis of the exercise of thepowers vested in the Minister by this group of sections is asituation where the land is no longer required for a publicpurpose.
In relation to section 39A since the possession of the landhas already been taken, the legislature has introduced the pre-conditions in subsection (2) designed primarily to ensure that aperson who had interest in the land would not get the benefitof any improvement effected to the land after possession hadbeen taken. The consequences provided for in sub-section (4)are similarly designed to ensure that the status quo ante willbe effectively restored without any claim for compensation ordamages being made against the State.
In any event, the contention of learned Counsel for thePetitioner that a former owner has a statutory right to demandthe exercise of the power vested in the Minister by section 39Ais inconsistent with section 40(a)' which provides that upon avesting Order made under section 38 the land vests absolutelyin the State free from all .encumbrances. Hence there could beno statutory right to demand a reversal of such vesting.
Learned Counsel for the Respondents relied on the use ofthe word “may” in section 39A(1) in support of the contentionthat the provision vests a discretionary power in the Minister.Learned Counsel for the Petitioner submitted that the word“may” does not lead to such a construction. Both Counselrelied on two different sentences in one passage of Maxwell onThe Interpretation of Statutes. This passage is as follows:(12th Edition p. 234).
“In ordinary usage “may” is permissive and “must” isimperative, and, in accordance with such usage, theword “may” in a statute will not generally be held tobe mandatory. In some cases, however, it has been heldthat expressions such as “may”, or “shall have power,”or “shall be lawful,” have to say the least-a compulsoryforce, and so their meaning has been modified by judi-cial exposition.”
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It is clear from this passage that the use of the word “may"should generally be considered as permissive and not as man-datory. There could however be a modification of this generalrule in view of the particular context of the provision. In thisinstance, the context in which section 39A appears, as seen bythe foregoing analysis, suggests that the general usage of theword’ “may” as being permissive only and not mandatory,should be applied.
This view is strengthened by a comparision of the provi-sions of subsection (1) and (2). In sub-section (2) the word“shall" is used in relation to the pre-conditions that are setout. Therefore the use of the word “may” in sub-section (1)should be considered as indicative of an intention to couch theprovision in terms of a discretionary power and not as animperative duty. Therefore, I hold that section 39A(1) vests adiscretionary power in the Minister to divest any land that hasvested upon an order under section 38 when possession hasbeen taken for or on behalf of the State, to be exercised only ifthe pre-conditions set out in paragraphs (a) to (d) of sub-section (2) are satisfied. The provision does not have the effectof giving a statutory right to any person who had an interestin the land prior to vesting, to demand the exercise of thispower by the Minister. In the result a Writ of Mandamus willnot lie to compel the exercise of the power vested in the Minis?ter in terms of section 39A of the Act.
The other matter that comes up for consideration iswhether, in any event, the pre-conditions stated in section39A(2) (b) and (c) have been met in relation to the particularland. Learned Counsel for the Petitioner submitted that thismatter should be considered in relation to only the particularportion of land claimed by the Petitioner and not the entireextent of land. Learned Counsel for the Respondents submit-ted that this has to be considered in relation to the entire landacquired upon the vesting Order.
Kingsley Fernando v. Dayaratne and Others (S. N. Silva, J.)
Section 39A(1) empowers the Minister to “divest” the Stateof the land so vested by the vesting Order”. The vesting Orderreferred to is that made under section 38. It is clear from thepapers filed in the previous application that there was onevesting Order in respect of the entire extent of 12 acres. There-fore I am inclined to agree with the submission of learnedCounsel for the Respondents that the divesting has to relate tothe entire extent covered by the vesting Order. This view isfurther supported by section 39A (4)(a) which provides thatupon a divesting Order that land shall be deemed never tohave vested in the State by virtue of the vesting Order. Hencewhat is contemplated is a complete reversal of the status quoante and not a piece-meal divesting of particular portions of aland that is vested. The Petitioner has sought in this applica-tion only a divesting of a particular portion of the land thatwas vested. Therefore his application for a Writ of Mandamuscannot, in any event, succeed.
This finding has a bearing on the question as to whetherthe pre-conditions in section 39A (2)(b) and (c) are satisfied. Itis clear from the affidavits that the N.H.D.A. and the U.D.A.are in the process of effecting improvements to the land byreclaiming it and providing infra-structure such as roads andso on. In my view the pre-conditions set out in these twoparagraphs have to be considered in relation to the entire landand not to particular portions of it. Therefore the land claimedby the Petitioner could not in any event be divested in termsof the provisions of section 39A (1).
Finally I have to deal with the submission of learnedCounsel for the Petitioner that the handing over of the extentof two acres two roods by the N.H.D.A. to the U.D.A. is ille-gal and that it vitiates the acquisition that has been made. Itwas submitted that the land was acquired for a housing objectas provided for in section 6(1) of the N.H.D.A. Act. Thephrase “housing object” is not defined in that Act and Coun-sel relied on the provisions of the National Housing Act, No.37 of 1964. On that basis it was argued that a housing object
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is restricted to the construction of residential buildings orother construction necessarily connected with residential build-ings.
The said extent of two acres two roods have been handedover to the U.D.A. to be used to locate offices and othercommercial premises. It was submitted by Counsel for theRespondents that the provision of facilities for offices andcommercial establishments is connected with the housingobject. I am inclined to accept the submission of Counsel forthe Respondents in this regard. It appears from the affidavitsof the N.H.D.A. and the U.D.A. that an extent of about 10acres will be used for the construction of residential units. Theprovision of facilities for offices and other commercial pur-poses is necessary for a housing complex of such magnitude.Therefore I do not see any illegality in the said extent of landbeing handed over to the U.D.A. for the provision of thesefacilities. The N.H.D.A. and the U.D.A. are statutory corpora-tions that perform vital functions in relation to housing andurban development. In this respect they have functions andpowers that bring them witHin the description of a stateagency. It appears from the affidavits that the U.D.A. is actingin the matter of alienating lAnd for offices and commercialpurposes on behalf of the N.H.D.A. Such a course of actionwould be necessary considering the functions of the two insti-tutions. In any event the fact that land was acquired for a par-ticular public purpose does not prevent the land being used foranother public purpose. The following observations made byAlles J. in the case of Gunawardeaa vs. D.R.O. WeligamaKorale (1) are relevant:
“Even assuming that after the order maide under section38 the Crown had decided to utilise the land for someother public purpose, I do not think that it is open to aperson whose land has been acquired and the title towhich has been vested in the Crown to maintain that
the acquisition proceedings are bad I
can however see no objection to the Crown utilising the
Malwallage vs. Dhanoawardena
land for a different public purpose than that for whichit was originally intended to be acquired. Circumstan-ces may arise when it may become necessary for theGovernment to abandon the original public purposecontemplated and utilise the land for another publicpurpose.”
Therefore I see no illegality whatever in the matter pleadedby Counsel for the Petitioner with regard to the handing overof the said extent by the N.H.D.A. to the U.D.A.
For the reasons stated above I dismiss the application but Imake no order for costs.
KINGSLEY FERNANDO V. DAYARATNE AND OTHERS