2008 (9) TMI 952 - SC - Indian Laws

Summary

Issues Involved:
1. Legality of land acquisition proceedings under the Land Acquisition Act, 1894.
2. Allegations of mala fide intention and colourable exercise of power.
3. Compliance with statutory procedures under the Land Acquisition Act, 1894.
4. Determination of 'public purpose' in land acquisition.
5. Judicial scrutiny of the government's satisfaction regarding 'public purpose'.
6. Applicability of Part II vs. Part VII of the Land Acquisition Act, 1894.

Detailed Analysis:

1. Legality of Land Acquisition Proceedings:
The appellants challenged the legality of the land acquisition proceedings initiated by the State of Andhra Pradesh for the development of a Financial District and Allied Projects. They contended that the acquisition was illegal, unlawful, and in violation of the Land Acquisition Act, 1894, as well as other statutes in force in the State of Andhra Pradesh.

2. Allegations of Mala Fide Intention and Colourable Exercise of Power:
The appellants alleged that the acquisition was done with mala fide intention and oblique motive to transfer valuable land of small farmers to a foreign company and a few selected persons with vested interests. They argued that the action was taken in colourable exercise of power by the authorities.

3. Compliance with Statutory Procedures:
The High Court had earlier directed that the 'urgency clause' invoked by the Government under Section 17 of the Act was illegal and unwarranted, and set it aside. The authorities were directed to hear objections of the owners/interested persons by following the procedure under Section 5A of the Act. The appellants contended that the acquisition should have followed the procedure for acquisition of land by a private company under Part VII of the Act, rather than Part II.

4. Determination of 'Public Purpose':
The respondents argued that the acquisition was for 'public purpose' as defined in the Act, and the land was needed for the development of an Information Technology Park under the Information Technology and Hardware Industrial Policy 2005-10. The High Court had earlier held that the acquisition was for public purpose and not for a private party, as the beneficiary was Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC), an instrumentality of the State.

5. Judicial Scrutiny of Government's Satisfaction:
The Court reiterated that the government is the best judge of whether a particular purpose for which land is needed is a public purpose. The Court stated that judicial scrutiny is limited to cases where there is a colourable exercise of power, fraud on statute, or where the purported action is irrational or unreasonable.

6. Applicability of Part II vs. Part VII:
The appellants argued that the acquisition was for a private company and hence should have followed the procedure under Part VII of the Act. The respondents contended that the acquisition was by the State for its instrumentality (APIIC), and hence, the procedure under Part II was applicable. The Court held that the entire amount of compensation was to be paid by APIIC, and the acquisition was for public purpose, thus justifying the application of Part II.

Conclusion:
The Court concluded that the acquisition proceedings initiated by the State were legal, lawful, and not mala fide. The project aimed at developing infrastructure and socio-economic progress, which constituted a legitimate public purpose. The High Court's dismissal of the writ petitions and writ appeals was upheld, and the appeals were dismissed.