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TMI Blog2008 (9) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... pment of `Financial District and Allied Projects'. According to the appellants, the action has been taken in colourable exercise of power and in total violation of the Land Acqusition Act, 1894 as well as several other statutes in force in the State of Andhra Pradesh; such as, Andhra Pradesh Urban Area Development Act, 1975; Zoning Regulations; Environment (Protection) Act, 1986; Water (Prevention and Control of Pollution) Act,1974 etc. The action has been taken, alleged the appellants, with mala fide intention and oblique motive to transfer valuable land of small farmers to a foreign company and few selected persons with vested interest. 4. A notification under Section 4 of the Act was published in the State Government Gazette on July 17, 2002. The said action was challenged and the validity of notification was questioned in a writ petition in the High Court of Andhra Pradesh. The High Court dismissed the petition following an earlier decision in Writ Petition No. 21712 of 2002 by observing that the writ petition involved similar issues. The High Court, however, directed that `urgency clause' sought to be invoked by the Government under Section 17 of the Act was illegal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablish its business, it was required to follow the prescribed procedure and parties must be left to settle their deal by entering into mutual agreement for sale and purchase of properties. In other words, according to the appellants, power of `eminent domain' has no application to such cases. The provisions of the Act must be strictly construed and judicial scrutiny in such matters i.e. in the matters of acquisition of land by the State or its instrumentality for a private party, namely, for use and occupation of land by a foreign company should be very strict. It was further submitted that proceedings were totally mala fide which was clear from the fact that huge land owned and possessed by influential persons such as, Smt. Vijay Nirmala, a well-known actress and other persons in public life had been excluded. Thus, rich landlords and politically patronage persons have been excluded from acquisition of land and appellants and other persons who were small or marginal farmers earning their bread were deprived of their property. Malicious action on the part of the State Authorities was also clear from the fact that though the land was sought to be acquired for industrial policy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... socio-economic progress. According to the deponent, large extent of Government land in various villages of Ranga Reddy District in the periphery of Hyderabad were handed over to the Corporation for the development of special projects like Software Lay Out, Indian School of Business, Indian Institute of Information Technology, Hitech City, National Games Village, Sports Stadia, Integrated International Convention Centre, Golf Course, Financial District, etc. Some of the projects have already taken shape and others are in various stages of development. It was submitted that time was a critical factor for implementation of those projects. In view of development of these special projects, the respondent-Corporation would be improving facilities in the round-about areas. It was for fulfillment of this industrial policy and completion of several projects that notifications under the Act were issued by the State. The High Court was satisfied about public purpose and hence rejected the ground put forward by land-owners that acquisition was not for public purpose. According to the High Court, however, the procedure laid down in the Act was required to be followed by issuing notices under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and controverting averments made by the writ- petitioners contending that the petitions are misconceived and ill-founded and the petitioners were not entitled to any relief. It was stated that the Special Deputy Collector, Land Acquisition in its affidavit has rightly stated that land-owners were not small farmers, small owners/marginal farmers but they have illegally converted agricultural land into non-agricultural land and have sold/ transferred/ allotted to builders/ developers/ real estate owners of properties. Acquisition was for industrial policy of State and APIIC was the Nodal Agency which was an `instrumentality' of the `State'. The amount of compensation was to be paid by APIIC and acquisition was under power of `eminent domain'. Acquisition is not for foreign company or private party and the High Court was right in not insisting for following procedure laid down in Part VII of the Act as the case is covered by procedure prescribed in Part II of the Act. Public purpose was precise, perfect and lawful and the land was acquired in consonance with the procedure laid down in the Act. It was only with a view to delay the proceedings that petitions were filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Land Acquisition Amendment made by the Land SCHEDULE . . . . . . . . . 16. It is thus clear that the land was proposed to be acquired for a public purpose, viz. for development of new projects by APIIC. It is also apparent that urgency clause under Section 17 of the Act was applied and inquiry under Section 5-A was dispensed with. 17. A notification under Section 6 of the Act was also issued on the same day which was published in the Government Gazette on July 18, 2002. The said notification read as under; THE ANDHRA PRADESH GAZETTE EXTRAORDINARY PUBLISHED BY AUTHORITY R.R. No. 26 HYDERABAD Thursday 18th July 2002 No.G1/7180/2000 Dated : 10-07- FORM - 5-A DRAFT DECLARATION UNDER SECTION 6 OF THE LA ACT Under Sec. (6) of the Order for the Land Acquisition Act, acquisition of the land the Governor of Andhra under Sub-Section (1)(2) Pradesh hereby declares of Section 17 of the that the land specified Act, the Governor of below and measuring Andhra Pradesh further Ac.80-35 gts/acre be the directs that the same a little more or possession of the said less is needed for land may be taken on the public purpose, wit for expiry of 15 days from Development of New the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy could be demonstrated by the State, the action to the extent of dispensing with the enquiry was held to be bad. The petition was, therefore, partly allowed directing the authorities to issue notice to the landowners under Section 5-A of the Act and to take further proceedings in accordance with law. 20. The Court finally stated; However, it is clarified that the notice under section 4(1) of the Act is not interfered with . 21. Other petitions filed by other land owners were also partly allowed relying upon the decision in Writ Petition No. 21712 of 2002. Writ appeals 22. Being aggrieved by the orders passed by the learned Single Judge, Writ Appeals were instituted by both landowners as also by APIIC. The Division Bench dismissed all the appeals holding that the land was needed for public purpose and the acquisition could not be said to be contrary to law. Similarly, the learned single Judge was also right in coming to the conclusion that on the facts and in the circumstances of the case, urgency clause could not have been applied under Section 17 of the Act and enquiry could not have been dispensed with under Section 5-A of the Act. 23. The Division Bench stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... QUISITION ACT Under Sec. (6) of the Land COLLECTOR,Land acquisition Acquisition Act, the (industries), Hyderabad, Government of Andhra Pradesh and may be inspected at any hereby declares that the time during the office land specified below in the hours. schedule below and measuring NOTICE is hereby given acres (80-35) acres, be the under section 9(1) 10 and little more or less is 9(3) 10 of the Land needed for public purpose, Acquisition Act, that the wit for DEVELOPMENT OF NEW State Government proposed PROJECT by APIIC Limited, to acquire the lands under Sections 3 and 7 of mentioned in the schedule. the same Act, THE SPECIAL All persons interested in DEPUTY COLLECTOR, LAND the lands are requested to ACQUISITION(INDUSTRIES), appear in person or by Hyderabad, is appointed to authorized agent, before perform the functions of the on SPECIAL DEPUTY Collector, under the Act and COLLECTOR, LAND ACQUISITION directed to take order for (INDUSTRIES), Hyderabad, the acquisition of the said SNEHA SILVER JUBILEE lands. Under sub-section BHAVAN, Collectorate (1) (2) of Section 17of the premises, LAKDIKAPUL, Act, the Government of HYDERABAD on 21.05.2005 at Andhra Pradesh further 11-00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in this behalf, and for his servants and workmen, to enter upon and survey and take levels of any land in such locality; to dig or bore in the sub-soil; to do all other acts necessary to ascertain whether the land is adapted for such purpose; to set out the boundaries of the land proposed to be taken and the intended line of the work (if any) proposed to be made thereon; to mark such levels, boundaries and line by placing marks and cutting trenches, and, where otherwise the survey cannot be completed and the levels taken and the boundaries and line marked, to cut down and clear away any part of any standing crop, fence or jungle: Provided that no person shall enter into any building or upon any enclosed court or garden attached to a dwelling-house (unless with the consent of the occupier thereof) without previously giving such occupier at least seven days' notice in writing of his intention to do so. 28. Section 5A as inserted by the Land Acquisition (Amendment) Act, 1923 (Act 38 of 1923) provides for hearing of objections. It enacts that any person interested in any land which has been notified under Section 4 of the Act as being needed or likely to be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he publication of the notification: Provided further that no such declaration shall be made unless the compensation to be awarded for such property is to be paid by a company, or wholly or partly out of public revenues or some fund controlled or managed by a local authority. Explanation 1.-In computing any of the periods referred to in the first proviso, the period during which any action or proceeding to be taken in pursuance of the notification issued underSection 4, sub-section (1), is stayed by an order of a Court shall be excluded. Explanation 2.-Where the compensation to be awarded for such property is to be paid out of the funds of a corporation owned or controlled by the State, such compensation shall be deemed to be compensation paid out of public revenues. (2) Every declaration shall be published in the Official Gazette, and in two daily newspapers circulating in the locality in which the land is situate of which at least one shall be in the regional language, and the Collector shall cause public notice of the substance of such declaration to be given at convenient places in the said locality (the last of the date of such publication and the giving of such pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 5A(2), or upon an enquiry conducted in the manner laid down in Section 40 as to purpose of acquisition. Section 41 provides for agreement between the Company and appropriate Government in respect of the matters specified therein. Section 42 requires publication of agreement in Official Gazette. Section 44A imposes a restriction on the Company for which any land is acquired under Part VII to transfer the land or any part thereof by sale, mortgage, lease, gift or otherwise except with the previous sanction of the appropriate Government. Section 44B likewise prohibits acquisition of land under Part VII except for purposes specified in Section 40 for private Companies. 35. Part VIII (Sections 45 to 55) deals with miscellaneous matters. Eminent domain 36. `Eminent domain' may be defined as the right or power of a sovereign State to take private property for public use without the owner's consent upon the payment of just compensation. It means nothing more or less than an inherent political right, founded on a common necessity and interest of appropriating the property of individual members of the community to the great necessities and common good of the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legislature can bind itself or its successors not to exercise this power when public necessity demands it. Nor it can be abridged or restricted by agreement or contract. 42. Nichols in his classic book `Eminent Domain' defines it (eminent domain) as the power of sovereign to take property for public use without the owner's consent . 43. Another constitutional expert (Cooley) in his treatise on the `Constitutional Limitations', states; More accurately, it is the rightful authority which must rest in every sovereignty to control and regulate those rights of a public nature which pertain to its citizens in common and to appropriate and control individual property for the public benefit, as the public safety, convenience or necessity may demand . 44. Willis in his well known work `Constitutional Law' discusses two view points as to exercise of power of eminent domain. The older and stricter view was that unless the property was dedicated for user by the public at large or a considerable section thereof, it would not be for public use or for public purpose. The modern and more liberal view, however, is that it is not an essential condition of public use th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a multitude of cases the courts have vainly attempted to define comprehensively the concept of a public use; and to formulate a universal test even though it were possible, would in an inevitably changing world be unwise if not futile ..... and holding that those purposes were for the benefit of the public the court went on to observe It is also said that since the taking is to provide apartments' to be rented to a class designated as persons of low income or to be leased or sold to limited dividend corporations the use is private and not public. This objection disregards the primary purpose of the legislation. Use of a proposed structure, facility or service by everybody and anybody is one of the abandoned, universal tests of a public use. (emphasis supplied) 49. In Muray v. La Guardia, 291 NY 320, a Town Corporation was formed for acquiring certain lands. It was financed by the Metropolitan Insurance Company which held all the stocks of the Corporation. The owners of the lands contended that the scheme was to benefit only few individuals and the Insurance Company which was a private Corporation and there was no public use in the project. The Court, however, reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have said also disposes of any contention concerning the fact that certain property owners in the area may be permitted to repurchase their properties for redevelopment in harmony with the overall plan. That, too, is a legitimate means which Congress and its agencies may adopt, if they choose . (emphasis supplied) 54. In Hawaii Housing Authority v. Midkiff, 467 US 229 : 81 L Ed 2d 186 : 104 S Ct 2321, the Court held that, no doubt there is a role for Courts to play in reviewing a Legislature's judgment of what constitutes a public use, even when the eminent domain power is equated with the police power. But the Court in Berman made clear that it is extremely narrow . The Court emphasized that any departure from this judicial restraint would result in courts deciding on what is and what is not a governmental function and in their invalidating legislation on the basis of their view on that question. And the Court would not substitute its judgment for a Legislature's judgment as to what constitutes a public use unless the use be palpably without reasonable foundation. 55. Recently, in Susette Kelo v. City of New London, (2005) 545 US 469 : 125 S Ct 2655 : 162 L Ed 439 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of land for a railroad with common-carrier duties is a familiar example . 58. The Court noted the contention of the petitioners that `using eminent domain for economic development impermissibly blurs the boundary between public and private takings'. It also conceded that quite simply, the government's pursuit of a public purpose might benefit individual private parties. But rejected the argument by stating-- When the Legislature's purpose is legitimate and its means are not irrational, our cases make clear that empirical debates over the wisdom of other kinds of socio-economic legislation are not to be carried out in the Federal Courts. 59. The Court reiterated; The public end may be as well or better served through an agency of private enterprise than through a department of government - or so the Congress might conclude. We cannot say that public ownership is the sole method of promoting the public purposes of community redevelopment projects . (emphasis supplied) 60. The above principles have been accepted and applied in India also. Immediately after the Constitution came into force, this Court had an occasion to consider the power of eminent dom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is a question of expansion of dockyard for defence purpose, it is a public purpose . 65. In Sharda Devi v. State of Bihar Anr., (2003) 3 SCC 128, this Court said; The power to acquire by State the land owned by its subjects hails from the right of eminent domain vesting in the State which is essentially an attribute of sovereign power of the State. So long as the public purpose subsists the exercise of the power by the State to acquire the land of its subjects without regard to the wishes or willingness of the owner or person interested in the land cannot be questioned . Public Purpose 66. There is no dispute that an appropriate Government may acquire land for any `public purpose'. The expression `public purpose' is defined in clause (f) of Section 3 of the Act. As already noted earlier, the definition is inclusive in nature and reads thus: (f) The expression public purpose includes- (i) the provision of village-sites or the extension, planned development or improvement of existing village-sites; (ii) the provision of land for town or rural planning; (iii) the provision of land for planned development of land from public funds in pursuance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be said to be `public purpose'. 70. Negativing the arguments and upholding the acquisition, Batchelor, J. observed; General definitions are, I think, rather to be avoided where the avoidance is possible, and I make no attempt to define precisely the extent of the phrase 'public purpose' in the lease; it is enough to say that, in my opinion, the phrase, whatever else it may mean, must include a purpose, that is, an object or aim, in which the general interest of the community, as opposed to the particular interest of individuals, is directly and vitally concerned . (emphasis supplied) 71. The aggrieved appellant approached the Privy Council. The Council inHamabai Framjee Petit v. Secretary of State, (1914) 42 IA 44 : AIR 1914 PC 20 approved the above observations of Batchelor, J. Speaking for the Judicial Committee, Lord Dunedin stated; All that remains is to determine whether the purpose here is a purpose in which the general interest of the community is concerned. Prima facie the Government are good judges of that. They are not absolute judges. They cannot say: `Sic volo sic jubeo' but at least a Court would not easily hold them to be wrong. But he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e onward march of civilisation our notions as to the scope of the general interest of the community are fast changing and widening with the result that our old and narrower notions as to the sanctity of the private interest of the individual can no longer stem the forward flowing tide of time and must necessarily give way to the broader notions of the general interest of the community. The emphasis is unmistakably shifting from the individual to the community. This modern trend in the social and political philosophy is well reflected and given expression to in our Constitution. (emphasis supplied) 76. In State of Bombay v. Ali Gulshan, (1955) 2 SCR 867, a Constitution Bench of this Court considered vires of the Bombay Land Requisition Act, 1948 (Act 23 of 1948). Interpreting provisions of the Constitution and Schedule VII thereof, the Court held that requisition of property by the Government of Bombay for accommodation of Foreign Consulate could be said to be `public purpose'. It was held that every State purpose or Union purpose is a public purpose but there may be acquisition or requisition which is neither for the State nor for the Union and yet it may be for a `pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed of a given land for a public purpose. 82. In Arnold Rodricks v. State of Maharashtra, (1966) 3 SCR 885, this Court held that the phrase 'public purpose' has no static connotation, which is fixed for all times. It is also not possible to lay down a definition of what public purpose is, as the concept of public purpose may change from time to time. It, however, involves in it an element of general interest of the community which should be regarded as a public purpose. 83. In Bhim Singhji v. Union of India Ors., (1981) 1 SCC 166, this Court held that the concept of public purpose implies that acquisition or requisition of property is in the interest of general public and the purpose for which such acquisition or requisition is made directly and vitally subserves public interest. 84. Recently, inDaulat Singh Surana v. First Land Acquisition Collector, (2007) 1 SCC 641, land was sought to be acquired for construction of office of Deputy Commissioner of Police (Security Control). It was contended that there was no element of public purpose and hence the acquisition was not in accordance with law. 85. Negativing the contention and upholding the acquisition, the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds and relations of the same public officers, it is a private purpose. If bread is 'seized' for feeding a starving section of the community, it is a public purpose that is met but, if the same bread is desired for the private dinner of a political maharajah who may pro tern fill a public office, it is a private purpose. Of course, the thing taken must be capable of serving the object of the taking. If you want to run bus transport you cannot take buffaloes . (emphasis supplied) 88. As observed by Bhagwati, J. (as His Lordship then was) inNational Textile Workers' Union Ors. v. P.R. Ramakrishnan Ors., (1983) 1 SCC 228, the law must adapt itself with the changing socio-economic context. 89. His Lordship said; We cannot allow the dead hand of the past to stifle the growth of the living present. Law cannot stand still; it must change with the changing social concepts and values. If the bark that protects the tree fails to grow and expand alongwith the tree, it will either choke the tree or if it is a living, tree, it will shed that bark and grow a new living bark for itself. Similarly, if the law fails to respond to the needs of changing society, then eith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d . (emphasis supplied) Industrial policy of State 92. Learned counsel for the respondents invited our attention to Industrial Policy, 2000-05 adopted by the State of Andhra Pradesh. Reference was also made to G.O. Ms. No.427 dated 18th December, 2000 under which the Government decided to undertake Mega Infrastructure Projects in the State to attract industries in the State and for the overall development of the State. The policy laid down guidelines for attracting and facilitating private investment in infrastructure. It provided for infrastructure projects implementation in Private-Public Partnership (PPP) requiring Government support. The Policy envisaged the need for a special legislation called Infrastructure Development Act (`IDA') supported by rules, guidelines and sectorial policies. While IDA was to constitute a Special Infrastructure Promotion Authority (IPA) having quasi judicial functions, the Task Force was to undertake executive functions outlined in IDA. The intention behind the integrated project was to establish Hyderabad as a major business-cum- leisure tourism infrastructure asset for the State. It was also stated that in the background of `World Touris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended by the learned counsel for the respondents that a policy decision was taken by the State to acquire land pursuant to `industrial policy' of the State. It was submitted that as per settled law, it is open to public authorities to formulate policy, to change or rechange it and normally a writ Court will not interfere in such matters. 99. In this connection, our attention has been invited to several decisions of this Court. It is, however, not necessary for us to refer to all the decisions. Normally, a writ Court will not propel into the unchartered ocean of Governmental Policy [videBennett Coleman Co. v. Union of India, (1972) 2 SCC 788]. 100. Recently, in Dhampur Sugar (Kashipur) Ltd. v. State of Uttaranchal Ors., (2007) 8 SCC 418, one of us (C.K. Thakker, J.) considered the issue in detail and observed; In our judgment, it is well-settled that public authorities must have liberty and freedom in framing policies. No doubt, the discretion is not absolute, unqualified, unfettered or uncanalised and judiciary has control over all executive actions. At the same time, however, it is well- established that courts are ill- equipped to deal with these matters. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -A of the Act was held unlawful. The State Government was, therefore, directed to follow procedure under Section 5A of the Act by issuing notice to the land owners by inviting objections and affording opportunity of being heard to the persons interested in the land. The said exercise was thereafter undertaken by the authorities and final notification under Section 6 of the Act was issued which does not call for interference and the High Court was justified in dismissing the appeals. 104. Now the term `Company' is defined in Clause (e) of Section 6 thus: (e) the expression `Company' means- a company as defined in Section 3 of the Companies Act, 1956 (1 of 1956), other than a Government company referred to in clause (cc); (ii) a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any corresponding law for the time being in force in a State, other than a society referred to in clause (cc); (iii) a co-operative society within the meaning of any law relating to co- operative societies for the time being in force in any State, other than a co-operative society referred to in clause (cc). 105. The above definitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Land Acquisition Officer, it was denied that the acquisition of the land was not for the public purpose and the proceedings were, therefore, vitiated. 110. The Court, after referring the Preamble and the relevant provisions of the Act, held that acquisition for Company under the Act was for a `public purpose' inasmuch as constructing dwelling houses and providing amenities for the benefit of workmen employed by the Company would serve public purpose. 111. The Court observed; Further, though it may appear on the words of the Act contained in Part II, which contains the operative portions of the proceedings leading up to acquisition by the Collector that acquisition for a Company may or may not be for a public purpose, the provisions of Part VII make it clear that the appropriate Government cannot permit the bringing into operation the effective machinery of the Act unless it is satisfied as aforesaid, namely, that the purpose of acquisition is to enable the Company to erect dwelling houses for workmen employed by it or for the provision of amenities directly connected with the Company or that the land is needed for construction of some work of public utility. These re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u Barkya, the Court observed; There is no doubt that, as pointed out in the recent decision of this Court, the Act contemplates for a public purpose and for a Company, thus conveying the idea that acquisition for a Company is not for a public purpose. It has been held by this Court in that decision that the purposes of public utility, referred to in Ss. 40-41 of the Act, are akin to public purpose. Hence, acquisition for a public purpose as also acquisitions for a company are governed by considerations of public utility. But the procedure for the two kinds of acquisitions is different, in so far as Part VII has made substantive provisions for acquisitions of land for Companies. Where acquisition is made for a public purpose, the cost of acquisition for payment of compensation has to be paid wholly or partly out of Public Revenues, or some fund controlled or managed by a local authority. On the other hand, in the case of an acquisition for a company, the compensation has to be paid by the Company. But, in such a case, there has to be an agreement, under S. 41, for the transfer of the land acquired by the Government to the Company on payment of the cost of acquisition, as also ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom out of public revenues, it must be held that the acquisition is not for a Company simpliciter. It was not, therefore, necessary to go through the procedure prescribed by Part VII. We, therefore, agree with the conclusion of the High Court, though not for the same reasons . (emphasis supplied) 116. Reference was also made to R.L. Arora (I) v. State of Uttar Pradesh Ors., (1962) Supp (2) SCR 149. In that case, land was sought to be acquired by the Defence Department of the Government of India for the construction of textile machinery parts factory by Lakshmi Ratan Engineering Works Limited, Kanpur. Notifications were issued under the Act applying `urgency' clause. Admittedly, no procedure laid down under Part VII of the Act was followed. A writ petition was, therefore, filed praying for quashing of Notifications and land acquisition proceedings. The main ground in support of the petition was that procedure under Part VII(Sections 38 to 42) of the Act had not been complied with. 117. Referring to the relevant provisions of the Act and Babu Barkya and Pandit Jhandulal, Wanchoo, J. (as His Lordship then was) for the majority stated; Therefore, though the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the provisions of Part VII apply. In the present case it is not the case of the respondents that any part of the compensation is to be paid out of what may be called public funds. It is not in dispute that the entire compensation is to be paid by the Works and therefore the provision of Part VII would apply to the present case; and it is in this background that we have to consider the contention raised on behalf of the appellant . (emphasis supplied) 118. Construing Sections 40 and 41 of the Act, the majority conceded that it is no doubt true that it is for the Government to be satisfied that the work is likely to prove useful to the public. It is also true that it is for the Government to be satisfied that the terms in the agreement should provide that public shall be entitled to use the work. That does not, however, mean that it is Government which has the right to interpret the words used in Section 40(1) (b) or clause (5) of Section 41. It is the Court which has to interpret what those words mean. It is only after the Court has interpreted the words that it is the Government which has to carry out the object of Sections 40 and 41to its satisfaction. 119. The majo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d livelihood, but because an institution of this kind is useful to the public as it turns out men who give very useful service to the public. In all the illustrations given the works would be useful to the public though the public might have no access to the works or any right to use them directly. I think it would be unduly restricting the meaning of the word `useful' to say that a work is useful to the public only when it can directly be used by the public. The words are not work which the public can use , in which case it might with some justification have been said that the work must be such as the public could use. In the Shorter Oxford Dictionary, among the meanings of `useful' appear, ` having the qualities to bring about good or advantage , helpful in effecting a purpose . I find no reason not to apply these meanings to the word `useful' in the section that I am considering. (emphasis supplied) 121. In R.L. Arora (II) v. State of Uttar Pradesh Ors., (1964) 6 SCR 784, this Court held that in view of the amendment made in the Act, even if the acquisition did not satisfy conditions laid down under clause (a) and clause (b) of sub-section (1) of Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d broad interpretation of the democratic ideal. It must alter as social and economic conditions alter. The social and economic theorist may contend for an extremely wida application of this concept of public purpose and over- emphasise the element of the general interest of the public. The reactionary on the other hand may strive for stringent restraints on its shifting boundaries and oppose any shift in emphasis. The true rule of the matter would seem to lie midway. The Court will not attach too much weight to the apparent character of the activity or agency but would prefer to lean in favour of an application of the rule which has regard to the substance of the matter and embraces activities, engagements and operations which would serve the common good as being affected with public interest. The application of the rule must rest on the modem economic system of a welfare state having its own requirements and problems. The application of the rule would not be governed by right distinctions nor would the economic principle be allowed to be blurred by the blending of forms and interests . (emphasis supplied) 127. The Court proceeded to state; In the field of economic progress ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied by dispensing with enquiry under Section 5A of the Act. The action was challenged by the land owners. 131. Rejecting the contention, upholding the acquisition and following Somawanti, the Court held that so long as it is not established that the acquisition is sought to be made for some collateral purpose, the declaration of Government that it is made for a public purpose is final, conclusive and not open to challenge. 132. In Aflatoon Ors. v. Lieutenant Governor of Delhi Ors. (1975) 4 SCC 285, land was sought to be acquired for Planned Development of Delhi . Neither the Master Plan nor the Zonal Plan was ready. The question before this Court was whether acquisition proceedings could have been initiated in the absence of Master Plan or Zonal Plan. 133. Considering the relevant provisions of the Delhi Development Act, 1957, the Court held that the proceedings did not get vitiated in the absence of such Plan. The Court observed that acquisition generally precedes development. If for proper development, land is sought to be acquired, such action could not be said to be illegal, unlawful or in colourable exercise of power. 134. It was also contended that the acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocketed making it beyond the reach of low income and middle income group of people. Hence, the State has a duty to give shelter to homeless people, specially, to the people of the low income group. If for that purpose it sought to acquire land, it could not be said that acquisition was illegal or unlawful. 142. Regarding earning of profit, the Court stated: Simply because there is an element of profit, it could not make the whole scheme illegal. A private entrepreneur will certainly look to some profit but to see that the profit motive does not lead to exploitation even of the rich and that the houses are available to the poor people and to middle class people at nominal or affordable prices, or even on no- profit-no-loss basis, the Housing Board exercises the necessary control. It is certainly a public purpose to provide houses to the community especially to poor people for whom the prices are beyond their means and they would otherwise never be able to acquire a house. 143. The Court concluded: The Court must shake off its myth that public purpose is served only if the State or the Housing Board or the joint sector company does not earn any profit. There cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court alleging that the land was not needed for public purpose and yet excess land was acquired and had been given to a Company. The action was, therefore, illegal, unlawful and mala fide. 147. Negativing the contention and upholding the action, this Court observed that the project was an integrated infrastructure development and not merely a highway project. As an integrated project, it required acquisition and transfer of lands even away from the main alignment of the road. Acquisition of land and giving it to the Company was, therefore, legal and lawful and did not suffer from mala fide. 148. The counsel for the appellants referred toAmarnath Ashram Trust Society Anr. v. Governor of U.P. Ors., (1998) 1 SCC 591. In that case, land was sought to be acquired for play ground for students of Amarnath Vidya Ashram (public school), Mathura. Notification under Section 4 of the Act was issued stating that the land was to be acquired for `public purpose'. The land-owner challenged the acquisition contending that the land was acquired for a Society and since procedure prescribed in Part VII was not followed, the acquisition was bad in law. 149. Upholding the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince it was not done, the acquisition was bad in law. 152. Negativing the contention that the acquisition was by the State, this Court said; In this case we may notice that purported contribution had been made only after the writ petitions were filed. Ordinarily, this Court would not have gone into the said question but the agreement provides for payment of entire compensation by the company. We do not know as to at what stage the State thought it fit to meet a part of the expenses for acquisition of land. Such an opinion on the part of the State having regard to the statutory scheme should have been formed prior to entering into the agreement itself. The agreement does not mention about any payment of a part of compensation by the State. We, in absence of any other material on record, must hold that the State had not formed any opinion in that behalf at least when the agreement was executed. The wisdom in all probabilities dawned on the officers of the State at a later stage .(emphasis supplied) Satisfaction of Government and Judicial Review 153. In our judgment, in deciding whether acquisition is for `public purpose' or not, prima facie, Government is the best ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot being relatable to the power confirmed upon it by the Act and its declaration will be a nullity .(emphasis supplied) 159. The majority concluded; Though we are of the opinion that the courts are not entitled to go behind the declaration of the Government to the effect that a particular purpose for which the land is being acquired is a public purpose we must emphasise that the declaration of the Government must be relatable to a public purpose as distinct from a purely private purpose. If the purpose for which the acquisition is being made is not relatable to a public purpose then a question may well arise whether in making the declaration there has been, on the part of the Government a fraud on the power conferred upon it by the Act. In other words the question would then arise whether that declaration was merely a colourable exercise of the power conferred by the Act, and, therefore, the declaration is open to challenge at the instance of the party aggrieved. To such a declaration the protection of s. 6 (3) will not extend. For, the question whether a particular action was the result of a fraud or not is always justiciable, provisions such as S. 6(3) notwithstanding . (e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the italicized portion quoted above (The Government has the sole and absolute discretion in the matter) is not in consonance with settled legal position or in accord with earlier decisions of this Court including decisions rendered by various Constitution Benches. We have already referred to R.S. Nanji wherein before more than half a century, Constitution Bench of this Court held that prima facie, the Government is the best judge to decide public purpose but it is not the sole judge. That was the view of the Privy Council in Hamabai. Again, in Somawanti, the Constitution Bench held that in case of colourable exercise of power by the State Government or fraud on statute, the declaration under Section 6 is open to challenge, notwithstanding the `finality clause' under sub-section (3) of the said section. 166. We would have indeed considered the contention of the learned counsel for the appellants closely in the light of earlier decisions of this Court. We are, however, of the view that on the facts and in the circumstances of the present case, the Government was right in forming an opinion and reaching a satisfaction as to `public purpose' and in initiating proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployment opportunities and securing economic benefits to the State and the public at large, it will serve public purpose. 170. It is clearly established in this case that the Infrastructure Development Project conceived by the State and executed under the auspices of its instrumentality (APIIC) is one covered by the Act. The Joint Venture Mechanism for implementing the policy, executing the project and achieving lawful public purpose for realizing the goal of larger public good would neither destroy the object nor vitiate the exercise of power of public purpose for development of infrastructure. The concept of joint venture to tap resources of private sector for infrastructural development for fulfillment of public purpose has been recognized in foreign countries as also in India in several decisions of this Court. 171. The entire amount of compensation is to be paid by State agency (APIIC) which also works as nodal agency for execution of the project. It is primarily for the State to decide whether there exists public purpose or not. Undoubtedly, the decision of the State is not beyond judicial scrutiny. In appropriate cases, where such power is exercised mala fide or for c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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