Sooraram Pratap Reddy
& Ors. Vs. Distt. Collector, Ranga Reddy Dist.& Ors  INSC 1512 (5
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 5509 OF 2008 ARISING OUT
OF SPECIAL LEAVE PETITION (C) NO. 2239 OF 2006 Sooraram Pratap Reddy & Ors.
... Appellants Versus District Collector, Ranga Reddy Distt. & Ors. ...
CIVIL APPEAL NO. 5510 OF 2008 ARISING OUT OF SPECIAL LEAVE PETITION (C) NO.
1135 OF 2006 SURARAM KRISHNA REDDY & ANR. ... APPELLANTS VERSUS DISTT.
COLLECTOR, CIVIL APPEAL NO. 5511 OF 2008 ARISING OUT OF SPECIAL LEAVE PETITION
(C) NO. 3387 OF 2006 V. KRISHNA PRASAD ... APPELLANT VERSUS DISTT. COLLECTOR,
CIVIL APPEAL NO. 5512 OF 2008 ARISING OUT OF SPECIAL LEAVE PETITION (C) NO.
2902 OF 2006 A.L. SADANAND ... APPELLANT VERSUS CIVIL APPEAL NO. 5513 OF 2008
ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 3388 OF 2006 MALLA REDDY &
ORS. ... APPELLANTS VERSUS CIVIL APPEAL NO. 5514 OF 2008 ARISING OUT OF SPECIAL
LEAVE PETITION (C) NO. 3389 OF 2006 BANDARI PENTAIAH & ORS. ... APPELLANTS
VERSUS CIVIL APPEAL NO. 5515 OF 2008 ARISING OUT OF SPECIAL LEAVE PETITION (C)
NO. 3390 OF 2006 BANDARU PENTAIAH & ORS. ... APPELLANTS VERSUS
3 C.K. THAKKER, J.
these appeals are filed by the appellants being aggrieved and dissatisfied with
the judgment and order passed by the High Court of Andhra Pradesh in various
Letters Patent Appeals as also in Writ Petitions. By the said orders, the High
Court rejected the prayer of the appellants for quashing proceedings under the
Land Acquisition Act, 1894 (hereinafter referred to as `the Act') for
acquisition of land being illegal, unlawful, mala fide and in colourable
exercise of power by the State.
appreciate the controversy in the present appeals, it is appropriate to refer
to the facts in the first matter i.e. Civil Appeal arising out of SLP(C) No.
2239 of 2006 (Sooraram Pratap Reddy & Ors. v. Deputy 4 Collector, Ranga
Reddy & Ors.). It was the case of the appellants before the High Court that
the Government of Andhra Pradesh sought to acquire a large chunk of land in the
name of `public purpose' for the purported development 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;
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.
notification under Section 4 of the Act was published in the State Government 5
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
The High Court,
however, directed that `urgency clause' sought to be invoked by the Government
under Section 17 of the Act was illegal, unlawful and unwarranted. That part of
the notification was, therefore, set aside and the Authorities were directed to
proceed to hear objections of the owners/interested persons by following
procedure under Section 5A of the Act. According to the appellants, the High
Court was wholly wrong in dismissing the writ petition relying on the judgment
in Writ Petition No. 21712 of 2002 since in that case, the Court has considered
only one issue; viz.
the acquisition was
or was not for public purpose as the beneficiary was Andhra Pradesh 6
Industrial Infrastructure Corporation Limited (`APIIC' for short). Really, the
property has been given in bounty to a foreign Company which was not lawful.
The High Court failed to consider and decide several important and crucial
issues raised by the small landowners.
aggrieved by the order passed in the writ petition, the appellants preferred
Writ Appeal which was also dismissed. The appellants have, therefore,
approached this Court by filing the present appeal. Initially, notice was
issued. Several matters raising similar issues were also filed and all were
ordered to be placed for hearing together.
have heard learned counsel for the parties.
learned counsel for the appellants contended that the High Court was wholly
wrong in dismissing writ-petitions as also writ appeals. According to the
appellants, land 7 acquisition proceedings were clearly unlawful, illegal,
mala fide and violative of the fundamental rights of the appellants. They were
taken in colourable exercise of power by the authorities. The appellants are
small land- holders and their only livelihood was dependant on land attempted
to be acquired by the respondents. According to the appellants, there was no
`public purpose' as defined in the Act and the land is acquired for a private
foreign company. The acquisition was, therefore, bad in law and for a
collateral purpose. It was also submitted that even if it is assumed for the
sake of argument that the land could be acquired for a public purpose by a
private Company, the procedure for acquisition of land by a private company
under Part VII of the Act ought to have been followed and not the procedure
under Part II providing for acquisition of land by the State Authorities. It
was urged that in the era of globalization, if a foreign company wanted to 8
establish 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 9 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 of the Government, initially, `urgency clause' was
applied and Section 17 was pressed in service.
It was because of the
High Court's intervention that urgency clause was quashed and authorities were
directed to take action in accordance with law and only thereafter notices were
issued and procedure under Section 5A of the Act was followed. On all these
grounds, it was submitted that proceedings are liable to be quashed.
learned counsel for the respondents, on the other hand, supported the orders
passed by the High Courts. They submitted that the land was acquired under the
Act for `public purpose' after following 1 procedure laid down in the Act and
the acquisition was legal, lawful and in consonance with law and no
interference is called for by this Court under Article 136 of the Constitution.
were filed by the contesting respondents. So far as the State Authorities are
concerned, a counter-affidavit was filed by Special Deputy Collector, Land
Acquisition (Industries), Hyderabad. In the said affidavit, it was, inter alia,
contended that appellants were not small land-holders or marginal farmers. Most
of them have converted agricultural lands unauthorizedly into housing plots and
sold them to various builders/ developers/property dealers/estate agents and
they were not cultivating the land. No doubt, there were certain small
land-owners/farmers also. But, it was contended by the State, that because of
industrial policy of the State Government, a decision was taken to construct
`Information Technology Park', under the 1 Information Technology and Hardware
Industrial Policy 2005-10 and for the said purpose land was sought to be
acquired under the provisions of the Act. Proceedings were, therefore,
initiated and necessary notification was issued. There was no illegality in the
procedure contemplated under the Act for acquisition of land. APIIC is an
instrumentality of State which was to pay the entire amount of compensation and
such action could not be said to be illegal or contrary to law. It was,
therefore, submitted that the appeals are liable to be dismissed.
in its affidavit filed by the General Manager (Law), contended that it was
wholly owned undertaking of the Government of State of Andhra Pradesh and has
been developing infrastructural projects in the State to facilitate
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 1 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 1
Act was required to be followed by issuing notices under Section 5A and urgency
clause under Section 17 of the Act could not have been invoked. In several
cases, awards were made and possession of the land was also taken over. In some
other cases, award is not passed and the land is still in the possession of the
land- owners. That, however, does not mean that proceedings under the Act were
illegal or unlawful.
to APIIC, the Government of Andhra Pradesh introduced Tourism Department which
established a transparent framework of enabling private sector and tourism
sector in the State. The State had undertaken such projects under the name and
style of "Establishment of Hyderabad as a Business-cum- Liaison
Destination" with a goal of transforming into world class business
destination, to be the leader in knowledge sector. Pursuant to such project,
Integrated Convention Centre Complex (ICCC) is being 1 developed by the State
Government on the basis of "Public Private Partnership" (PPP) format.
Under the said
project, International Convention Centre and business hotel adjoining Hi-tech
Business Centre were already established. Similarly, International Golf
Champion Course with multiuse development was sought to be set up.
Government of Andhra Pradesh designated APIIC as Nodal Agency for development
of Integrated Project. Emaar Properties, PJSC, Dubai was selected in
international competitive bidding for implementation of the project. The
Government issued orders approving structure and implementation of the project.
A collaboration agreement was entered into between APIIC and Emaar Properties,
Dubai to implement the project. APIIC was having 26% share while Emaar
Properties is having 74% share capital.
companies were incorporated with the Registrar of Companies, Andhra Pradesh, 1
Hyderabad with registered office at Hyderabad for taking different components
of integrated project. Several projects are about to be over. Some projects are
going on and some are to be undertaken. Total cost according to APIIC excluding
operating and financial course of the integrated project is more than Rs.550
crores. It was submitted that considering the project in its entirety, the High
Court was wholly right and fully justified in dismissing the petition and not
interfering with the land acquisition proceedings.
had also filed an affidavit through General Manager, denying allegations 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
1 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 the
petitioners which has resulted in gross injustice to Emaar which has made large
to Emaar, the City of Hyderabad was sought to be transformed into
Business-cum-Liaison Destination as envisaged by the Government and public and
private sectors' participation investment had been thought proper through
Integrated Project under Industrial Policy of the State 2005-10.
Through APIIC, the
State undertook the Integrated Project for establishing Hyderabad into world
class business destination and a leader in the knowledge sector. Such project
would indeed develop the State which would be in the larger interest of general
public. It would enhance the value of Hyderabad into a Tourist-cum-Business
Destination for domestic as well as international travellers. It was, therefore,
submitted that the land acquisition proceedings were in consonance with the law
and no case has been made out for interference with such proceedings and the
appeals are liable to be dismissed.
already noted earlier, proceedings had been initiated by the authorities in
A notification under
Section 4 of the Act was issued by the State Government on July 10, 2002 which
was published in the Government Gazette on July 17, 2002. The said notification
read as under;
THE ANDHRA PRADESH
GAZETTE EXTRAORDINARY PUBLISHED BY AUTHORITY R.R. No. 25 HYDERABAD WEDNESDAY
17TH JULY 2002 No.G1/7180/2000 Dated : 10-07- 2002 FORM - 2 A DRAFT
NOTIFICATION UNDER SECTION 4 OF 1894
AS AMENDED BY ACT
XXXVIII OF 1923
1 Whereas it appears
to Acquisition Act XXXIII the Government of Andhra of 1923, and the Pradesh
that the land Governor of Andhra specified in the Pradesh hereby Schedule below
and authorized Spl. Deputy situated at Nanakram Collector, LA (Ind), Guda
Village, Hyderabad, and his staff Serilingampally Mandal, and workmen to
exercise Ranga Reddy District is the powers conferred by needed for Public
section 4(2) of the Act.
purpose, to wit for
Under sub-section (4) of Development of New Section 17 of the Act, Projects by
APIIC Ltd., the Governor of Andhra notice to that effect as Pradesh directs
that in hereby given to all whom view of the urgency of it may concern in the
case, the provisions accordance with the of Section 5-A of the provisions of
section 4 Act, shall not apply to (1) of the Land this case.
Acquisition Act, 1 of
1894, as amended by the Land Acquisition Amendment made by the Land SCHEDULE .
. . . . . . . .
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.
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- 2002 FORM - 5-A
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 the
Projects by APIIC publication of the Limited. Under Sections notice mentioned
in 3 and 7 of the same Act, section 9(1) of the Act.
the Special Deputy A
plan of the land is Collector, L.A. (Ind.), kept in the Special Hyderabad, is
appointed Deputy Collector, L.A. to perform the functions (Ind), Hyderabad, and
of Collector under the may be inspected at any Act and directed to take time
during the office hours.
SCHEDULE . . . . . .
. . .
2 Writ Petitions in
validity of notifications under Sections 4 and 6 of the Act was challenged by
some of the land owners by filing Writ Petition No. 21712 of 2002 in the High
Court of Andhra Pradesh at Hyderabad. The learned Single Judge, vide a judgment
and order dated April 25, 2003 partly allowed the petition. He held that in view
of counter-affidavit filed by the authorities, it could not be said that the
acquisition was illegal or unlawful and, therefore, was not sustainable.
Acquisition of land was in exercise of power of eminent domain and was intended
for public purpose, to wit, for development of New Projects by APIIC Ltd. The
acquisition was to enable the activities of APIIC, which was an instrumentality
of State operating in the area of industrial infrastructure. The purposes of
APIIC were demonstrably public purposes. It 2 was also held that the claim of
the petitioners as being small farmers was not well-founded as no agricultural
operations were being pursued by them as asserted by the authorities in the
counter-affidavit which was not denied. The availability of alternative land as
pleaded by the petitioners was also not correct since the lands available were
not contiguous to the existing developed areas and hence could not be said to
Court, however, held that invocation of urgency clause under Section 17 of the
Act and dispensing with enquiry as contemplated by Section 5-A of the Act was
not legal. Section 5-A of the Act is a salutary provision which enables the
persons whose land is proposed to be acquired to urge all grounds that may be
available against the proposed acquisition at the enquiry. Unless real urgency
is demonstrated, dispensing with the enquiry and invocation of urgency clause
was irrational and arbitrary exercise of power by the State.
2 By such process,
an enquiry under Section 5-A of the Act cannot be jettisoned on jejune grounds
of irrational and unsubstantiated urgency. Since no such urgency 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.
Court finally stated;
"However, it is
clarified that the notice under section 4(1) of the Act is not interfered
petitions filed by other land owners were also partly allowed relying upon the
decision in Writ Petition No. 21712 of 2002.
aggrieved by the orders passed by the learned Single Judge, Writ Appeals were
2 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.
Division Bench stated;
District is a unique project being developed by the Corporation wherein the
reputed financial institutions like Banks, Insurance etc., set up their offices
to serve the needs of the trade, commerce and industry. The Corporation has
already allotted land in the Financial District for Insurance Regulatory and
Development Authority of India (IRDA) and also to SBH Staff Training Academy
etc. It is stated that in order to ensure compactness of the Financial
District, the lands in question are under acquisition for public purpose and to
utilize them for new projects being developed by the Corporation.
2 The lands in
question were identified and notified for acquisition after examining the
matter carefully. The lands in question are essential so as to ensure
compactness of the Financial District Project being developed by the
Corporation. It is stated that there is no prohibition to acquire lands
belonging to small farmers under the due process of law, if it is inevitable.
The allegation of the appellants that there are vast extents of Government
lands in the nearby villages and that there is absolutely no reason to acquire
private patta lands is denied. The Government lands situated in the adjoining
villages would not facilitate compactness of the Financial District Project
being developed by the Corporation. It is stated that the lands in question are
under acquisition following the due process of law for utilizing the same for
public purpose, i.e. development of Financial District Project and other
projects being development by the Corporation. The development works for the
proposed works would be taken up as soon as the lands are acquired under the
Land Acquisition Act".
pursuance of the order passed by the learned single Judge and confirmed by the
Division Bench of the High Court, enquiry under Section 5-A of the Act had been
held. Notices were issued to the land owners and persons 2 interested,
objections were invited, hearing was afforded and finally notification under
Section 6 was issued on April 26, 2005 which was published on the next day,
i.e. April 27, 2005 in the Government Gazette. The said notification reads
THE ANDHRA PRADESH
GAZETTE EXTRAORDINARY PUBLISHED BY AUTHORITY R.R. No. 85 HYDERABAD WEDNESDAY
27th April 2005 No.G1/7180/2000 Dated : 26-04- 2005 FORM - 5-A DRAFT
DECLARATION UNDER SECTION 6 OF THE LAND
2 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
17 of the premises, LAKDIKAPUL, Act, the Government of HYDERABAD on 21.05.2005
at Andhra Pradesh further 11-00 AM.
directs, that the
possession of the said lands may be taken on the expiry of (15) days from the
date of the publication of the notice mentioned in section 9(1) of the Act, a
plan of the land is kept in the office of the SPECIAL DEPUTY SCHEDULE . . . . .
. . . .
said notification thereafter was challenged by the land owners in the High
Court of Andhra Pradesh in the present proceedings.
As already observed earlier,
the petitions were 2 dismissed and hence the property owners have challenged
the said decision in this Court.
we deal with the contentions of the parties, it is appropriate if we examine
the relevant provisions of the Land Acquisition Act, 1894. As the Preamble
states, the Act has been enacted for the purpose of enabling the State to
acquire land for public purposes as also for Companies. Section 3 defines
various expressions. The expression `Company' is defined in clause (e) to mean
a Company as defined in the Companies Act, 1956 (other than a Government
Company). Clause (ee) defines `appropriate Government'. Clause (f) defines
`public purpose'. The definition is inclusive in nature and includes purposes
mentioned in sub-clauses (i) to (viii).
II (Sections 4 to 17) relates to `acquisition'. Section 4 confers power on the
appropriate Government to issue preliminary 2 notification for acquisition of
land needed or likely to be needed for any public purpose or for a Company. The
proceedings for acquisition thus begin with issuance of notification under
Section 4 which reads as under;
4. Publication of
preliminary notification and powers of officers thereupon-- (1) Whenever it
appears to the appropriate Government that land in any locality is needed or is
likely to be needed for any public purpose or for a company a notification to
that effect shall be published in the Official Gazette and in two daily
newspapers circulating in that locality of which at least one shall be in the
regional language and the Collector shall cause public notice of the substance
of such notification to be given at convenient places in the said locality the
last of the dates of such publication and the giving of such public notice,
being hereinafter referred to as the date of publication of the notification.
(2) Thereupon it
shall be lawful for any officer, either, generally or specially authorised by
such Government in this behalf, and for his servants and workmen, to enter upon
and survey and take levels of any land in such locality;
3 to dig or bore in
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.
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 3 which has been notified under Section 4 of the Act as being needed or
likely to be needed for a public purpose or for a company may, within thirty
days from the date of the publication of the notification, object to the
acquisition of the land. Such objections can be made to the Collector in
writing. The Collector should grant the objector an opportunity of being heard
in person or by any person authorised by him in that behalf or by pleader and
should, after hearing all objections and after making such further inquiry, if
any, as he thinks necessary, either make a report in respect of the land which
has been notified under Section 4 (1), or make different reports in respect of
different parcels of such land, to the appropriate Government, containing his
recommendations on the objections, together with the record of the proceedings
held by him, for the decision of that Government. The section also declares
that the decision of the 3 Appropriate Government on the objections shall be
6 relates to "declaration that land is required for a public purpose".
The said section is material and may be quoted in extenso.
6. Declaration that
land is required for a public purpose.- (1) Subject to the provisions of Part
VII of this Act, when the Appropriate Government is satisfied after considering
the report, if any, made under section 5A, sub-section (2), that any particular
land is needed for a public purpose, or for a company, a declaration shall be
made to that effect under the signature of a Secretary to such Government or of
some officer duly authorised to certify its orders an different declarations
may be made from time to time in respect of different parcels of any land
covered by the same notification under section 4, sub- section (1),
irrespective of whether one report or different reports has or have been made
(wherever required) under section 5-A, sub-section (2):
Provided that no
declaration in respect of any particular land covered 3 by a notification
under section 4, sub-section (1),-- (i) published after the commencement of the
Land Acquisition (Amendment and Validation) Ordinance, 1967 but before the
commencement of the Land Acquisition (Amendment) Act, 1984 shall be made after
the expiry of three years from the date of the publication of the notification;
or (ii) published after the commencement of the Land Acquisition (Amendment)
Act, 1984, shall be made after the expiry of one year from the date of the
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.
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 under Section 4, sub-section (1), is stayed by an order of
a Court shall be excluded.
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
3 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
public notice, being hereinafter referred to as the date of publication of the
declaration), and such declaration shall state the district or other
territorial division in which the land is situate, the purpose for which it is needed,
its approximate area, and where a plan shall have been made of the land, the
place where such plan may be inspected.
(3) The said
declaration shall be conclusive evidence that the land is needed for a public
purpose or for a Company, as the case may be; and, after making such
declaration the Appropriate Government may acquire the land in manner
the declaration under Section 6 has been made, it shall be conclusive evidence
that the land is needed for a public purpose.
9 requires the Collector to issue notice to the person interested stating that
the Government intends to take possession of the land, and that claims to
compensation for all interests in such land may be made to him. It also enumerates
particulars to be mentioned in the notice.
11 enjoins the Collector to proceed to enquire into the objections (if any)
which any person interested had filed pursuant to the notice and the value of
the land at the date of the publication of the notification under section 4(1),
and to make an award.
prescribes period within which such award shall be made by the Collector.
Section 12 declares award of Collector to be final subject to the provisions of
the Act. Section 3 16 empowers Collector after he has made the award under
section 11 to take possession of the land which shall thereupon vest absolutely
in the Government, free from all encumbrances.
Section 17 deals with
cases of urgency.
III (Sections 18 to 28A) provides for reference to Court and procedure to be
followed. Part IV (Sections 29 to 30) deals with apportionment of compensation.
Part V (Sections 31 to 34) relates to payment of compensation. Part VI
(Sections 35 to 37) permits temporary occupation of land.
VII (Sections 38 to 44B) is another important part dealing with acquisition of
land for Companies. Sections 39 provides for previous consent of appropriate
Government and execution of agreement for such acquisition.
Section 40 declares
that no such consent can be given unless the appropriate Government is
satisfied either on the report of the Collector 3 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.
VIII (Sections 45 to 55) deals with miscellaneous matters.
domain' may be defined as the right or power of a sovereign State to take 3
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 whole society. It embraces all cases where, by the authority of the
State and for the public good, the property of an individual is taken without
his consent to be devoted to some particular use, by the State itself, by a
Corporation, public or private or by a private citizen for the welfare of the
public [American Jurisprudence, 2d, Volume 26, pp. 638-39, para 1; Corpus Juris
Secundum, Volume 29, p. 776, para 1; Words & Phrases, Permanent Edition,
Volume 14, pp. 468-70].
domain' is thus inherent power of a governmental entity to take privately owned
property, especially land and convert it to public use, subject to reasonable
3 compensation for the taking [vide P. Ramanatha Aiyar's Advanced Law Lexicon,
Volume 2, page 1575].
term `eminent domain' is said to have originated by Grotius, legal scholar of
the seventeenth century. He believed that the State possessed the power to take
or destroy property for the benefit of the social unit, but he believed that
when the State so acted, it was obligated to compensate the injured property
owner for his losses.
his well known work `De Jure, Belli et Pacis', the learned author proclaimed;
"The property of
subject is under the eminent domain of the State, so that the State or he who
acts for it may use, alienate and even destroy such property, not only in the
case of extreme necessity, in which even private person have a right over the
property of other, but for the ends of public utility, to which ends those who
founded civil society must be supposed to have the intended the private ends
should give way".
too believed that State had no general power to take private property of 4
land-owners, except on the payment of a reasonable price. The right of the
State or the sovereign to its or his own property is absolute while that of the
subject or citizen to his property is only paramount. The citizen holds his
property subject always to the right of the sovereign to take it for a public
purpose. The power of eminent domain is merely a means to an end; viz. larger
power of eminent domain does not depend for its existence on a specific grant.
It is inherent and
exists in every sovereign State without any recognition thereof in the
Constitution or in any statute. It is founded on the law of necessity. The
power is inalienable. No 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.
in his classic book `Eminent Domain' defines it (eminent domain) as "the
4 power of sovereign to take property for public use without the owner's
constitutional expert (Cooley) in his treatise on the `Constitutional
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".
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 that the property 4 should be transferred to
public ownership or for public user and it is sufficient that the public
derives advantage from the scheme.
Fallbrook Irrigation District v. Bradley, (1896) 164 U.S. 112 : 41 Law Ed. 369,
an Act of California provided for the acquisition of lands whenever 50
land-owners or a majority of them in a particular locality required it for
construction of a watercourse, the object of the legislation being to enable
dry lands to be brought under wet cultivation.
The validity of the
Act was challenged on the ground that the acquisition would only benefit
particular land owners who could take water from the channel and the public as
such had no direct interest in the matter and consequently there was no public
user. The contention was right if narrow view was to be accepted but was not
well-founded if liberal view was to be adopted.
the contention, the Court observed;
"To irrigate and
thus bring into possible cultivation these large masses of otherwise worthless
lands would seem to be a public purpose and a matter of public interest, not
confined to the land-owners, or even to anyone section of the State. The fact
that the use of the water is limited to the land-owner is not, therefore, a
fatal objection to this legislation. It is not essential that the entire
community, or even any considerable portion thereof, should directly enjoy or
participate in an improvement in order to constitute a public use.....It is not
necessary, in order that the use should be public that every resident in the
district should have the right to the use of the water." (emphasis
above statement of law was reiterated in subsequent cases. In Rindge Co. v. Los
Angles County, (1923) 262 US 700 : 67 Law Ed 1186, the Court observed that
"it is not essential that the entire community or even a considerable
portion should directly enjoy or 4 participate in an improvement in order to
constitute a public use."
New York City Housing Authority v. Muller, 270 NYP 333: 105 ALR 905, certain
lands were acquired in pursuance of a governmental project for clearing slums
and providing housing accommodation to persons with low income. The validity of
the acquisition was questioned on the ground that the use was private and not
public. The Court, however, rejected the contention and stated;
"Over many years
and 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 4 proposed structure, facility or service by everybody
and anybody is one of the abandoned, universal tests of a public use."
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, rejected the argument.
with the contention that there was no public use in the project because the
Insurance Company was benefited, the Court observed:
"Nor do we find
merit in the related argument that unconstitutionality results from the fact
that in the present case the statute permits the city to exercise the power of
"Eminent 4 domain" to accomplish a project from which 'Metropolitan'
a private corporation may ultimately reap a profit. If upon completion of the
project the public good is enhanced it does not matter that private interests
may be benefited." (emphasis supplied)
Samuel Berman v. Andrew Parker, (1954) 348 US 26 : 99 L Ed 27 : 75 S Ct 98,
owners instituted an action of condemnation of their property under the
District of Columbia Redevelopment Act, 1945. Plans were approved and the
Planning Commission certified them to the agency for execution. The agency
undertook the exercise of redevelopment of the area. It was contended by the
land owners that the project was not public project and their property could
not be acquired.
the contention, the Court observed that it does not sit to determine whether a
particular housing project is or is not desirable. The concept of the public
welfare is broad and inclusive. The values it represents are spiritual as well
as physical, 4 aesthetic as well as monetary. It is within the power of the
Legislature to determine that the community should be beautiful as also
healthy, spacious as also clean, well-balanced as also carefully patrolled.
According to the Court, the Congress and its authorized agencies have made
determinations that take into account a wide variety of values and it was not
for the Court to reappraise them. "If those who govern the District of
Columbia decide that the Nation's Capital should be beautiful as well as
sanitary, there is nothing in the Fifth Amendment that stands in the way."
with the contention that the project was undertaken by one businessman for the
benefit of another businessman, the Court observed;
"The public end
may be as well or better served through an agency of private enterprise than
through a 4 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. What we 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 4 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
in Susette Kelo v. City of New London, (2005) 545 US 469 : 125 S Ct 2655 :
L Ed 439, the land owners challenged the city's exercise of eminent domain
power on the ground that it was not for public use. The project in question was
a community project for economic revitalization of the City of New London for
which the land was acquired.
was submitted by the learned counsel for the respondents that the facts in Kelo
were similar to the facts of the present case. For that the counsel relied upon
the Integrated Development Project. Dealing with the project, the Court stated;
5 "The Fort
Trumbull area is situated on a peninsula that juts into the Thames River. The
area comprises approximately 115 privately owned properties, as well as the 32
acres of land formerly occupied by the naval facility (Trumbull State Park now
occupies 18 of those 32 acres).
Parcel 1 is
designated for a waterfront conference hotel at the center of a `Small urban
village" that will include restaurants and shopping.
This parcel will also
have marinas for both recreational and commercial uses.
"riverwalk" will originate here and continue down the coast,
connecting the waterfront areas of the development. Parcel 2 will be the site
of approximately 80 new residences organized into an urban neighbourhood and
linked by public walkway to the remainder of the development, including the
This parcel also
includes space reserved for a new U.S. Coast Guard Museum. Parcel 3, which is
located immediately north of the Pfizer facility, will contain at least 90,000
square feet of research and development office space. Parcel 4A is a 2.4-acre
site that will be used either to support the adjacent state park, by providing
parking or retail services for visitors, or to support the nearby marina.
Parcel 4B will include a renovated marina, as well as the final stretch of the
Parcels 5, 6 and 7
will provide land for office and retail space, parking, and water-dependent
Court also stated;
5 "Two polar
propositions are perfectly clear. On the one hand, it has long been accepted
that the sovereign may not take the property of A for the sole purpose of
transferring it to another private party B, even though A is paid just
compensation. On the other hand, it is equally clear that a State may transfer
property from one private party to another if future `use by the public' is the
purpose of the taking; the condemnation of land for a railroad with
common-carrier duties is a familiar example".
Court noted the contention of the petitioners that `using eminent domain for economic
development impermissibly blurs the boundary between public and private
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
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)
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 domain in the leading case of Charanjit Lal Chowdhury v.
Union of India & Ors., (1950) 1 SCR 869.
to the doctrine of eminent domain in American Legal system, Mukherjea, J.
(as His Lordship then
5 "It is a
right inherent in every sovereign to take and appropriate private property
belonging to individual citizens for public use.
This right, which is
described as eminent domain in American law, is like the power of taxation, an
offspring of political necessity, and it is supposed to be based upon an implied
reservation by Government that private property acquired by its citizens under
its protection may be taken or its use controlled for public benefit
irrespective of the wishes of the owner".
Deputy Commissioner & Collector, Kamrup & Ors. v. Durganath Sarma,
(1968) 1 SCR 561; drawing distinction between police power and power of eminent
domain, this Court observed;
"In the exercise
of its eminent domain power, the State may take any property from the owner and
may appropriate it for public purposes. The police and eminent domain powers
are essentially distinct. Under the police power many restrictions may be
imposed and the property may even be destroyed without compensation being
given, whereas under the power of eminent domain, the property may be appropriated
to public use on payment of compensation only".
Coffee Board, Karnataka, Bangalore v. Commissioner of Commercial Taxes,
Karnataka & Ors., (1988) 3 SCC 263, referring to American authorities,
Mukharji, J. (as His Lordship then was) stated;
"It is trite
knowledge that eminent domain is an essential attribute of sovereignty of every
state and authorities are universal in support of the definition of eminent
domain as the power of the sovereign to take property for public use without
the owner's consent upon making just compensation".
Scindia Employees' Union v. State of Maharashtra & Ors., (1996) 10 SCC 150,
this Court observed;
"The very object
of compulsory acquisition is in exercise of the power of eminent domain by the
State against the wishes or willingness of the owner or person interested in
the land. Therefore, so long as the public purpose subsists the exercise of the
power of eminent domain cannot be questioned. Publication of declaration under
Section 6 is conclusive evidence of public purpose. In view of the finding that
it is a question of 5 expansion of dockyard for defence purpose, it is a
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
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
(f) The expression
includes- 5 (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 of any
scheme or policy of Government and subsequent disposal thereof in whole or in
part by lease, assignment or outright sale with the object of securing further
development as planned;
(iv) the provision of
land for a corporation owned or controlled by the State;
(v) the provision of
land for residential purposes to the poor or landless or to persons residing in
areas affected by natural calamities, or to persons is placed or affected by
reason of the implementation of any scheme undertaken by Government, any local
authority or a corporation owned or controlled by the State;
(vi) the provision of
land for carrying out any educational, housing, health or slum clearance scheme
sponsored by Government, or by any authority established by Government for
carrying out any such scheme, or, with the prior approval of the appropriate
Government, by a local authority, or a society registered 5 under the
Societies Registration Act, 1860 (21 of 1860), or under any corresponding law
for the time being in force in a State, or a co-operative society within the
meaning of any law relating to co-operative societies for the time being in
force in any State;
(vii) the provision
of land for any other scheme of development sponsored by Government or, with
the prior approval of the appropriate Government, by a local authority;
(viii) the provision
of any premises or building for locating a public office, --but does not
include acquisition of land for companies;
expression (`public purpose') is of very wide amplitude. It is merely
illustrative and not exhaustive. The inclusive definition does not restrict its
ambit and scope. Really, the expression is incapable of precise and
comprehensive definition. And it is neither desirable nor advisable to attempt
to define it. It is used in a generic sense of 5 including any purpose wherein
even a fraction of the community may be interested or by which it may be
may also refer to few decisions wherein the expression came up for
consideration of Courts.
about a century, in Hamabai Framjee Petit v. Secretary of State, (1911) 13 Bom
LR 1097, certain lands were sought to be acquired for erecting buildings for
the use of Government Officials. The action was challenged in the High Court of
Judicature at Bombay contending that the purpose of acquisition could not be
said to be `public purpose'.
the arguments and upholding the acquisition, Batchelor, J. observed;
are, I think, rather to be avoided where the avoidance is possible, and I make
no 5 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)
aggrieved appellant approached the Privy Council. The Council in Hamabai
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;
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 here, so far from holding them to be wrong, the whole of the learned
Judges, who are thoroughly conversant with the conditions of Indian life, say
that they are satisfied that the scheme is one which will redound to public 6
benefit by helping the Government to maintain the efficiency of its servants.
From such a conclusion their Lordships would be slow to differ, and upon its
own statement it commends itself to their judgment".
Veeraraghavachartar v. Secretary of State, (1926) 49 Mad 237 : AIR 1925 Mad
837, certain vacant sites were acquired for enabling Panchamas to build houses.
It was argued that this was not a public purpose as the benefits of the
acquisition were to go only to few individuals. The contention was rejected by
the Court observing that it is not possible to define what a public purpose is.
There can be no doubt that provision of house sites for poor people is a public
purpose for it benefits a large class of people and not one or two individuals.
State of Bihar v. Kameshwar Singh, 1952 SCR 889, a Constitution Bench of this
6 Court was examining vires of certain provisions of the Bihar Land Reforms
Act, 1950 and other State laws in the context of Article 31 of the Constitution
(as then stood). The constitutional validity was challenged on the ground that
the Act failed to provide for compensation and there was lack of public
Court, however, negatived the contention. As to `public purpose', Mahajan, J.
(as His Lordship then
`public purpose' is not capable of a precise definition and has not a rigid
meaning. It can only be defined by a process of judicial inclusion and
exclusion. In other words, the definition of the expression is elastic and
takes its colour from the statute in which it occurs, the concept varying with
the time and state of society and its needs. The point to be determined in each
case is whether the acquisition is in the general interest of the community as
distinguished from the private interest of an individual".
the concurring judgment, S.R. Das, J. (as His Lordship then was) stated;
"From what I
have stated so far, it follows that whatever furthers the general interests of
the community as opposed to the particular interest of the individual must be
regarded as a public purpose. With the 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
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
provisions of the Constitution and Schedule VII thereof, the Court held that 6
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 `public purpose'; for instance, acquisition for construction of
hospital or educational institution by a private individual or institution.
State of Bombay v. R.S. Nanji, 1956 SCR 18, land was requisitioned for
accommodating employees of Road Transport Corporation. It was contended that
there was no `public purpose' and hence the action was illegal. Referring to
Hamabai, Ali Gulshan and State of Bombay v. Bhanji Munji, (1955) 1 SCR 777, the
Constitution Bench stated that the expression `public purpose' must be decided
in 6 each case examining closely all the facts and circumstances of the case.
the facts of the case, it was held that a break down in the organization of the
Corporation, leading to dislocation of the road transport system would create a
chaotic condition to the detriment of the interest of the community. Providing
living accommodation for its employees is a statutory activity of the
Corporation and it is essential for the Corporation to provide such
accommodation in order to ensure an efficient working of the road transport
system and it must, therefore, be held to be `public purpose'.
the leading case of Somawanti (Smt.) & Ors., v. State of Punjab & Ors.,
(1963) 2 SCR 774, certain lands were acquired by the Government for public
purpose, viz. for setting up a factory for manufacturing various ranges of
refrigeration compressors and 6 ancillary equipments. It was contended that
acquisition was not for `public purpose' and hence it was unlawful.
inclusive definition of `public purpose' in the Act, Mudholkar, J.
"This is an
inclusive definition and a compendious one and therefore, does not assist us very
much in ascertaining the ambit of the expression 'public purpose'. Broadly
speaking the expression 'public purpose' would, however, include a purpose in
which the general interest of the community, as opposed to the particular
interest of individuals, is directly and vitally concerned".
was also observed that `public purpose' is bound to vary with the times and the
prevailing conditions in a given locality and, therefore, it would not be a
practical proposition even to attempt a comprehensive definition of it. It is
because of this that the Legislature has left it to the Government 6 to say
what is a public purpose and also to declare the need of a given land for a
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.
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 6 made directly and vitally subserves public
in Daulat 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
the contention and upholding the acquisition, the Court held that the
expression `public purpose' includes a public purpose in which greatest
interest of the community as opposed to a particular interest of an individual
is directly concerned. The concept is not static but changes with the passage
of time. Power of eminent domain can, therefore, be exercised by the State in
`public purpose' is thus wider than a `public necessity'. Purpose is more
pervasive than urgency. That which one sets before him to accomplish, an end,
intention, aim, object, plan or project, is purpose. A need or necessity, on
the other hand, is urgent, unavoidable, compulsive. "Public purpose should
be liberally construed, not whittled down by logomachy". (emphasis supplied)
State of Karnataka & Anr. v. Ranganatha Reddy & Anr., (1977) 4 SCC 471;
Krishna Iyer, J.
"There may be
many processes of satisfying a public purpose. A wide range of choices may
exist. The State may walk into the open market and buy the items, movable and
immovable, to fulfill the public purpose; or it may compulsorily acquire from
some private person's possession and ownership the articles needed to meet the
public purpose; it may requisition, instead of resorting to acquisition; it may
take on loan or on hire or itself manufacture or produce. All these steps are
various alternative means to meet the public purpose. The State may 6 need
chalk or cheese, pins, pens or planes, boats, buses or buildings, carts, cars,
or eating houses or any other of the innumerable items to run a
welfare-oriented administration or a public corporation or answer a community
requirement. If the purpose is for servicing the public, as governmental
purposes ordinarily are, then everything desiderated for subserving such public
purpose falls under the broad and expanding rubric.
The nexus between the
taking of property and the public purpose springs necessarily into existence if
the former is capable of answering the latter. On the other hand, if the
purpose is a private or non-public one, the mere fact that the hand that
acquires or requires is Government or a public corporation, does not make the
purpose automatically a public purpose. Let us illustrate. If a fleet of cars
is desired for conveyance of public officers, the purpose is a public one. If
the same fleet of cars is sought for fulfilling the tourist appetite of friends
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".
observed by Bhagwati, J. (as His Lordship then was) in National Textile
Workers' Union & Ors. v. P.R. Ramakrishnan & Ors., (1983) 1 SCC 228,
the law must adapt itself with the changing socio-economic context.
"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
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 either it will stifle the growth of the society and
choke its progress or if the society is vigorous enough, it will cast away the
law which stands in the way of its growth. Law must therefore constantly be on
the move adopting itself to the fast changing society and not lag behind".
(emphasis supplied) 7
we may refer to Tenth Report of the Law Commission of India on "The Law of
Acquisition and Requisitioning of Land" wherein the Law Commission
considering the meaning of `public purpose' under the Act, stated;
purpose.--Public purpose is not defined in the Act. There is only an inclusive
definition which relates to village sites in districts.
In other respects,
there is no indication in the Act of any test for determining whether a purpose
is a public purpose or not. A large number of suggestions have been received by
us urging that we should clearly and exhaustively define the term `public purpose'.
In an ever changing world, the connotation of the expression `public purpose'
must necessarily change. If a precise definition is enacted, it would become
rigid and leave no room for alteration in the light of changing circumstances.
It would leave no room for the courts to adjust the meaning of the expression
according to the needs of the times".
to leading authorities on `eminent domain' and `public purpose', the Commission
"It is, in our
view, neither possible nor expedient to attempt an exhaustive 7 definition of
public purposes. The only guiding rule for the determination of its meaning is
that the proposed acquisition or requisition should tend to promote the welfare
of the community as distinct from the benefit conferred upon an individual. The
mere fact that the immediate use is to benefit a particular individual would
not prevent the purpose being a public one, if in the result it is conducive to
the welfare of the community. The question is exhaustively discussed in
Thambiran Padayachi v. State of Madras, AIR 1952 Mad 756, by Venatarama Aiyar,
J. All that can, therefore, be attempted in a legislation of this kind is to
provide an inclusive definition, so as to endow it with sufficient elasticity
to enable the courts to interpret the meaning of the expression `public
purpose' according to the needs of the situation, and this is what we have
Industrial policy of State
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 7 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 Tourism Organisation Report on the State of Andhra
Pradesh in 2000' and in the light of the `Vision 2000 Document' 7 prepared in
mid 1990s highlighting the need for tourism as an important economic driver for
the State, the State Government initiated a Project Development exercise in
2000-01 for an international standard convention centre complex integrated with
pursuance of the above policy, the Andhra Pradesh Infrastructure Development
Enabling Act, 2001 (Act No. 36 of 2001) has been enacted.
Preamble of the Act states;
"An Act to
provide for the rapid development of physical and social infrastructure in the
State and attract private sector participation in the designing, financing,
construction, operation and maintenance of infrastructure projects in the State
and provide a comprehensive legislation for reducing administrative and
procedural delays, identifying generic project risks, detailing various
incentives, detailing the project delivery process, procedures for
reconciliation of disputes and also to provide for other ancillary and
incidental matters thereto with a view to presenting bankable projects to the
private sector and improving level of infrastructure in the state of Andhra 7
Pradesh and for matters connected therein or incidental thereto."
(iii) of Section 1 enacts that the Act will apply to all infrastructure
projects implemented through public-private partnership in the sectors
enumerated in Schedule III of the Act and to such other sectors as may be
notified by the Government under the Act from time to time. Detailed provisions
have been made for infrastructure project to be undertaken under the Act.
was, therefore, submitted by the learned counsel for the respondents that a
policy decision was taken by the State to develop information technology and
telecommunications, industrial knowledge, tourism, trade, conventions and
exhibition centres, etc. It was also provided that if the Government land is
not available, APIIC would acquire land for the Project.
respondents also referred to a Memorandum of Understanding (MoU) between APIIC
7 and Emaar Properties. It was submitted that in pursuance of the policy
decision and MoU, Integrated Project was to be undertaken by the respondents
which was a `public purpose' under Sections 4 and 6 of the Act.
was contended 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
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
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 [vide Bennett 7 Coleman & Co. v. Union of India, (1972)
2 SCC 788].
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
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 complex social,
economic and commercial matters, decisions have to be taken by governmental
authorities keeping in view several factors, and it is not possible for courts
to consider competing claims and conflicting interests and to conclude which
way the balance tilts. There are no objective, justiciable or manageable
standards to judge the issues nor such questions can be decided on 'a priori'
is, therefore, a settled proposition of law that in absence of illegality or
violation of law, a Court of law will not interfere in policy matters.
Company: Whether public purpose?
main contention of the learned counsel for the appellants in all these cases is
that the land is sought to be acquired by the Government for a private Company.
In accordance with the provisions of the Act, therefore, procedure laid down by
the Legislature in Part VII was required to be followed. According to the
counsel, since the acquisition is not in accordance with Part VII of the Act,
the entire acquisition is vitiated being contrary to law. It is, therefore,
liable to be quashed and set aside.
submission on behalf of the respondents, on the other hand, is that the
acquisition is by the State for its instrumentality i.e. APIIC. Such
acquisition 7 was, therefore, for `public purpose'. The entire compensation was
to be paid by APIIC and hence procedure, which was required to be followed, was
under Part II and not under Part VII as contended by the writ petitioners.
Admittedly, the said
procedure has been followed and hence it cannot be said that the acquisition
was not in consonance with law. It was also submitted that in earlier
proceedings, this contention had been expressly raised by the writ petitioners
before the High Court. The learned Single Judge specifically negatived it
holding that the land was needed for `public purpose'. The said order was
confirmed even by the Division Bench. Hence, so far as acquisition by the
`State' under Part II of the Act for public purpose is concerned, the earlier
order has attained finality. The High Court held that the appropriate
Government was not justified in invoking urgency clause under Section 17 of the
Act and no urgency could demonstrably be shown to exist, the declaration 8 as
to urgency and dispensing with the inquiry under Section 5-A of the Act was
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.
the term `Company' is defined in Clause (e) of Section 6 thus:
expression `Company' means- (i) a company as defined in Section 3 of the
Companies Act, 1956 (1 of 1956), other than a Government company referred to in
(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 8 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).
above definition makes it clear that a `company' is as defined under the
Companies Act, 1956, or a society registered under the Societies Registration
Act, 1860 or a cooperative society under any State law.
4 of the Act expressly authorizes the appropriate Government to issue
preliminary notification for acquisition of land likely to be needed for any
public purpose or `for a company'. Likewise, Section 6 declares that when the
appropriate Government is satisfied that a particular land is needed for a
public purpose or `for a company', a declaration shall be made to that effect.
It is thus clear that appropriate Government may acquire land if such land is
needed for any 8 public purpose or `for a company'. If it is so, acquisition
will be governed by Part II of the Act and the procedure laid down in the said
Part has to be followed. Part VII, on the other hand, deals with acquisition of
land for companies. In such cases, previous consent of appropriate Government
and execution of agreement for transfer of land is necessary and procedure laid
down in that Part is sine qua non for the acquisition.
the contention of the appellants is that the so-called acquisition is for a
private company and hence it would be governed by Part VII of the Act, the
stand of the respondents is that it was in pursuance of industrial policy of
the State that land was to be acquired by APIIC and the entire amount of
compensation was to be paid by APIIC and as such the acquisition is covered by
Part II of the Act.
attention has been invited by the learned counsel for both the parties to some
of the decisions on this issue.
Barkya Thakur v. State of Bombay (now Maharashtra) & Ors., (1961) 1 SCR 128
was probably the first leading decision of this Court on the point. In that
case, a Notification was issued by the erstwhile State of Bombay on April 3,
1959 under Section 4 of the Act wherein it was stated that the lands specified
in the schedule attached to the Notification were likely to be needed for the
purpose of M/s Mukund Iron & Steel Works Ltd., a Company registered under
the Indian Companies Act, 1913. The petitioner lodged objections challenging
the Notification on the ground that the lands were not required for `public
purpose' and the proceedings were vexatious and malicious. In the
counter-affidavit filed by the Special Land Acquisition Officer, it was denied
that the acquisition of the land was not 8 for the public purpose and the
proceedings were, therefore, vitiated.
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.
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 requirements indicate that the acquisition for a Company also is
in substance for a public 8 purpose inasmuch as it cannot be seriously
contended that constructing dwelling houses, and providing amenities for the
benefit of the workmen employed by it and construction of some work of public
utility do not serve a public purpose".
Pandit Jhandulal & Ors. v. State of Punjab & Ors., (1961) 2 SCR 459,
the land of the appellant was sought to be acquired for construction of houses
by members of the Thapar Industries Co-operative Housing Society Ltd., Yamuna
Nagar. Procedings were, therefore, initiated for acquisition of land under Part
II of the Act. The action was challenged, inter alia, on the ground that there
was non- compliance with the provisions of Part VII of the Act and the
proceedings were liable to be quashed as the said procedure had not been
followed. The High Court held that the land was acquired for a public purpose
and there was no need to comply with the provisions of Part VII, even though
the Company was to pay the entire 8 amount of compensation (which according to
this Court was not factually correct). The aggrieved land owner approached this
to this Court, the main point for determination was whether or not the
acquisition proceedings had been vitiated by reason of the admitted fact that
there was no attempt made by the Government to comply with the requirement of
Part VII of the Act.
Referring to Babu
Barkya, this Court held that the conclusion arrived at by the High Court was
`entirely correct', though the process of reasoning by which it had reached the
conclusion was erroneous. The Court observed that the Act contemplates
acquisition for (i) a public purpose, and (ii) for a Company; thus, conveying the
idea that acquisition for a Company, is not for a public purpose. It was also
observed that the purposes of public utility, referred to in Sections 40 and 41
of the Act were akin to public purpose. Hence, acquisition for a public purpose
as also 8 acquisition for a Company are governed by considerations of public
utility. But the procedure for the two kinds of acquisitions is different and
if it is for a Company, then acquisition has to be effected in accordance with
the procedure laid down in Part VII.
the ambit and scope of Sections 6 and 39 to 41 and referring to Babu 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 8 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 other matters not material to our present purpose. The
agreement contemplated by S.41 is to be entered into between the Company and
the appropriate Government only after the latter is satisfied about the purpose
of the proposed acquisition, and subject to the condition precedent that the
previous consent of the appropriate Government has been given to the acquisition.
The `previous consent' itself of the appropriate Government is made to depend
upon the satisfaction of that government that the purpose of the acquisition
was as laid down in S.40. It is, thus, clear that the provisions of Ss. 39-41
lay down conditions precedent to the application of the machinery of the Land
Acquisition Act, if the acquisition is meant for a company."
Court then dealt with the extent and applicability of Section 6 of the Act and
"Section 6 is,
in terms, made subject to the provisions of Part VII of the Act. The provisions
of Part VII, read 8 with section 6 of the Act, lead to this result that the
declaration for the acquisition for a Company shall not be made unless the
compensation to be awarded for the property is to be paid by a company. The
declaration for the acquisition for a public purpose, similarly, cannot be made
unless the compensation, wholly or partly, is to be paid out of public funds.
Therefore, in the
case of an acquisition for a Company simpliciter, the declaration cannot be
made without satisfying the requirements of Part VII. But, that does not
necessarily mean that an acquisition of a Company for a public purpose cannot
be made otherwise than under the provisions of Part VII, if the cost or a
portion of the cost of the acquisition is to come out of public funds. In other
words, the essential condition for acquisition for a public purpose is that the
cost of the acquisition should be borne, wholly or in part, out of public
funds. Hence, an acquisition for a Company may also be made for a public
purpose, within the meaning of the Act, if a part or the whole of the cost of
acquisition is met by public funds. If, on the other hand, the acquisition for
a Company is to be made at the cost entirely of the Company itself, such an
acquisition comes under the provisions of Part VII. As in the present instance,
it appears that part at any rate of the compensation to be awarded for the
acquisition is to come eventually from out of public revenues, it must be held
that the acquisition is not for a Company simpliciter. It was not, 9
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
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.
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.
to the relevant provisions of the Act and Babu Barkya and Pandit 9 Jhandulal,
Wanchoo, J. (as His Lordship then was) for the majority stated;
though the words `public purpose' in Sections 4 and 6 have the same meaning,
they have to be read in the restricted sense in accordance with s. 40 when the
acquisition is for a company under s. 6. In one case, the Notification under s.
6 will say that the acquisition is for a public purpose, in the other case the
Notification will say that it is for a company. The proviso to s. 6(1) shows
that where the acquisition is for a public purpose, the compensation has to be
paid wholly or partly out of public revenues or some fund controlled or managed
by a local authority. Where however the acquisition is either for a company,
the compensation would be paid wholly by the company. Though therefore this
distinction is there where the acquisition is either for a public purpose or
for a company, there is not a complete dichotomy between acquisitions for the
two purposes and it cannot be maintained that where the acquisition is
primarily for a company it must always be preceded by action under Part VII and
compensation must always be paid wholly by the company.
A third class of
cases is possible where the acquisition may be primarily for a company but it
may also be at the same time for a public purpose and the whole or part of
compensation may be paid out of public revenues or some fund controlled or
managed by a local 9 authority. In such a case though the acquisition may look
as if it is primarily for a company it will be covered by that part of s. 6
which lays down that acquisition may be made for a public purpose if the whole
or part of the compensation is to be paid out of the public revenues or some
fund controlled or managed by a local authority. Such was the case in Pandit
Jhandu Lal v. State of Punjab. In that case the acquisition was for the
construction of a labour colony under the Government sponsored housing scheme
for the industrial workers of the Thapar Industries Co-operative Housing
Society Limited and part of the compensation was to be paid out of the public
funds. In such a case this Court held that "an acquisition for a company
may also be made for a public purpose within the meaning of the Act, if a part
or the whole of the cost of acquisition is met by public funds"
and therefore it was
not necessary to go through the procedure prescribed by Part VII. It is only
where the acquisition is for a company and its cost is to be met entirely by
the company itself that 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 9 the contention raised on behalf of the appellant".
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 41 to its satisfaction.
cannot say that Ss.40 and 41 mean this and further say that they are satisfied
that the meaning they have given to the relevant words in 9 these sections has
been carried out in the terms of the agreement provided by them. It is for the
Court to say what the words in Ss. 40 and 41 mean though it is for the
Government to decide whether the work is useful to the public and whether the
terms contain provisions for the manner in which the public shall be entitled
to use the work. It is only in this latter part that the Government's
satisfaction comes in and if the Government is satisfied, that satisfaction may
not be open to challenge; but the satisfaction of the Government must be based
on the meaning given to the relevant words in Ss. 40 and 41 by the Court. The
Government cannot both give meaning to the words and also say that they are
satisfied on the meaning given by them. The meaning has to be given by the
court and it is only thereafter that the Government's satisfaction may not be
open to challenge if they have carried out the meaning given to the relevant
words by the Court."
J. (as His Lordship then was), in a dissenting judgment expressed regret in
agreeing with the majority. His Lordship stated:
"I am unable to
accept the appellant's reading of S. 41(1) (b) as correct.
The words "such
work is likely to prove useful to the public" read by themselves seem to
me plainly to imply 9 a work the construction of which results in some benefit
which the public would enjoy. They do not contemplate only a work which itself
can be put by the public to its use.
For example, a work
producing electricity for supply to the public is a work which is useful to the
public. So also a work producing any commodity like say, medicines or cloth
would be a work which would be useful to the pubic. Again, I feel no doubt that
a radio broadcasting station would be work which would be useful to the public.
Take another case, namely, a post-graduate college turning out a small number
of highly qualified medical doctors. There can be no doubt that the building
for the college can be said to be a work useful to the public. It would be so
not because the public would have a chance of getting training there and a
small number of members of the public would after the training be able to make
a good 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
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 9 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."
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 40 of the Act, it would be valid, if they satisfy
conditions in clause (aa) introduced by the amendment Act. It was also held
that once the Government decided to acquire land for public purpose, such
acquisition cannot be challenged on the ground that procedure laid down in Part
VII had not been followed.
Court, keeping in view the Land Acquisition (Amendment) Act, 1962 (Act 31 of
1962), held that clause (aa) of sub-section (1) 9 of Section 40 as inserted by
Act 31 of 1962 did not contravene Article 31 (2) or Article 19 (1) (f) of the
Constitution. Accordingly the acquisition was held legal and valid.
special reference may be made to a decision of the Division Bench of the High
Court of Gujarat in Motibhai Vithalbhai Patel & Anr. V. State of Gujarat
& Anr., AIR 1961 Guj
93. In Motibhai, land
was sought to be acquired for a Company, namely, Sarabhai Chemicals for its
expansion. It was contended that acquisition was not for public purpose under
Section 4 of the Act and it was bad in law.
the relevant provisions of the Act as also leading cases on the point, the
Court held that even if the acquisition of land is for a private concern whose
sole aim is to make profit, the intended acquisition of land would materially
help in saving foreign exchange in which the public is also vitally 9
concerned in our economic system. It can, therefore, be said to be a public
purpose and would not be bad.
"This is just as
well. So diverse and varied can he the activities, engagements and operations
which may redound to the general benefit of the public and in which the general
interest of the public can be said to he really involved that it is Impossible
to expect a definition exclusive or inclusive which will aptly meet every
particular objective within the matrix of public purpose and not fail in some
The expression is of
convenient vagueness and the court can at best give temporary definiteness but
not definitiveness to the undefined and shifting boundaries of a field which
now seems likely to raise some frequent and fighting issues and give rise to
different problems for adjudication".
was also observed:
is not a constant. The scope of an expression which conjugates general interest
of the public must necessarily depend inter alia on social and economic needs
and broad interpretation of the democratic 9 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
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
Court proceeded to state;
"In the field of
economic progress and interest of the public the application of the rule would
include operations which are more or less indispensable 1 to the community.
The very lack of definitiveness of the expression public purpose, somewhat
paradoxical though it may seem requires that the field of its coverage must
extend to concerns which are fit to serve the common welfare. That coverage can
include activities open to the initiative of both private enterprise and public
administration for private enterprise is certainly amenable to public control
and can be an efficient instrument of economic benefit".
the acquisition, the Court concluded;
"It cannot be
ignored that Respondent No. 2 Company is a scheduled industry controlled by the
provision of the Industries Development and Regulation Act, 1951. The price of
its products is subject to these controls. We are also satisfied that the
public is vitally concerned in the saving of foreign exchange in our present
economic situation and that this is an aspect of the matter which has to be
borne in mind. We are satisfied that the respondents are correct in their
submission that the intended acquisition of lands in dispute would materially
help in the saving of such exchange. We have to consider together all the
aspects of the case which redound to and result in the benefit of the public
and on an assessment of all the facts and circumstances of the 1 case and the
cumulative effect of the same we are of the opinion that the land in dispute is
needed for a public purpose as contended by the respondents. We may add that
the Notifications under Sections 4 and 6 are not defective on any of the
grounds urged before us on behalf of the petitioner as held by us and the
declaration under Section 6 is conclusive evidence that the land in dispute is
needed for a public purpose".
Arnod Rodricks, Wanchoo, J. (as His Lordship then was) stated that there is no
reason why the State or local authority should have no power to get further
development done through private agencies by lease, assignment or sale of
Jage Ram & Ors. V. State of Haryana & Ors. (1971) 1 SCC 671, a
Notification under Section 4 of the Act was issued for acquisition of land for
public purpose, namely, for setting up of a factory for the manufacture of
China- ware and Porcelain-ware. Urgency clause under Section 17 of the Act was
also applied by dispensing with enquiry under Section 5A of the 1 Act. The
action was challenged by the land owners.
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.
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.
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 1 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.
was also contended that the acquisition was for Company inasmuch as after
acquisition, the Government proposed to hand over the property or a portion
thereof to Cooperative Housing Societies and since procedure in Part VII of the
Act was not followed, the acquisition was not valid.
the said contention was negatived by the Court observing that merely because
the Government allotted a portion of the property to Cooperative Societies,
Part VII did not get attracted and the acquisition could not be held invalid
[See also Ajay Krishan Singhal v. Union of India, (1996) 10 SCC 721].
S.S. Darshan v. State of Karnataka & Ors. (1996) 7 SC 302, land was sought
to be acquired under the Act for public purpose, 1 namely, for setting up
Information Technological Park. Challenging the acquisition, it was contended
by the petitioners that the acquisition was mala fide and in colourable
exercise of power since primarily the acquisition was for a Private Limited
Company and not for the State.
relevant part of the Notification read thus:
"The lands shown
in the annexed index are required for a public purpose, that is, to establish
information technological park through Karnataka Industrial Areas Development
the fact that the acquisition was through Board, this Court ruled that
acquisition was for a public purpose. The notification stated about public
purpose of establishment of information technological park through the Board.
various clauses in the Joint Venture Agreement, the Court held that 1 the
cumulative effect of all went to show that acquisition was for the public
purpose of setting up technological park by Government of Karnataka through
Karnataka Industrial Areas Development Board and was, therefore, valid.
W.B. Housing Board Etc. v. Brijendra Prasad Gupta (1997) 6 SCC 207, land was
acquired for providing houses to poor people. The action was challenged, inter
alia, on the ground that the Housing Board was to earn profit and hence it
could not have been said to be a public purpose.
the contention and upholding the acquisition, the Court took note of the fact
that it was a matter of common knowledge that there is acute shortage of
housing accommodation both in rural and urban areas of the country. The Court
also stated that since late the prices of real estate have sky- 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 1 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.
earning of profit, the Court stated:
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."
"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 be any better authority that the State or the statutory corporation to
supervise or monitor the functions of the joint venture company. Courts will 1
certainly step in if the public purpose is sought to be frustrated".
was also made to Pratibha Nema & Ors. v. State of Madhya Pradesh & Ors
 10 SCC 626. There, a piece of dry land of the appellants and others was
notified for acquisition under Section 4 of the Act for public purpose, namely,
for establishment of `Diamond Park'. The acquisition was challenged on the
ground that it was not for public purpose but was meant only to benefit a
Company and its associates, and as such it was in colourable exercise of power
and ultra vires the Act.
to earlier decisions of this Court and drawing distinction between acquisition
by State for `public purpose' covered by Part II and acquisition for a
`Company' under Part VII, the Court stated;
1 "Thus the
distinction between public purpose acquisition and Part VII acquisition has got
blurred under the impact of judicial interpretation of relevant provisions. The
main and perhaps the deceive distinction lies in the fact whether cost of
acquisition comes out of public funds wholly or partly. Here again, even a
token or nominal contribution by the Government was held to be sufficient
compliance with the second proviso to Section 6 as held in a catena of
decisions. The net result is that by contributing even a trifling sum, the
character and pattern of acquisition could be changed by the Government. In
ultimate analysis, what is considered to be an acquisition for facilitating the
setting up of an industry in private sector could get imbued with the character
of public purpose acquisition if only the Government comes forward to sanction
the payment of a nominal sum towards compensation.
In the present state
of law, that seems to be the real position".
was also placed on State of Karnataka & Anr. v. All India Manufacturers
Organisation & Ors., (2006) 4 SCC 683. In that case, the Government of
Karnataka undertook a mega project for developing its transport and 1
communication system. A Memorandum of Understanding was entered into between
State Government and a Company for implementation of the project and lands were
acquired. A Public Interest Litigation (PIL) was filed in 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.
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.
counsel for the appellants referred to Amarnath 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
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.
the contention, quashing the proceedings and referring to Pandit Jhandu Lal,
this Court observed;
"It is now well
established that if the cost of acquisition is borne either wholly or partly by
the Government, the acquisition can be said to be for a public purpose within
the meaning of the Act. But if the cost is entirely borne by the company 1 then
it is an acquisition for a company under Part VII of the Act.
... ... ... ... ...
... ... ... ...
Admittedly, in the
present case the entire cost of acquisition is to be borne by the appellant
society and, therefore, it is an acquisition for a company and not for a public
That is also borne
out by the notification issued under Section 6 of the Act which states that
"the land mentioned in the schedule below is needed for the construction
of play- ground for students of Amar Nath Vidya Ashram (public school), Mathura
in district Mathura by the Amar Nath Ashram Trust, Mathura". Therefore,
simply because in the notification issued Under Section 4 of the Act it was
stated that the land was needed for a public purpose, namely, for a play-
ground for students of Amar Nath Vidya Ashram (public school), Mathura, it
cannot be said that the acquisition is for a public purpose and not under
Chapter (Part) VII for the appellant- society in view of subsequent events and
the declaration made Under Section 6".
reference was made to a recent decision of this Court in Devinder Singh &
Ors., v. State of Punjab & Ors., (2008) 1 SCC 728. In Devinder Singh, land
was sought 1 to be acquired by the State to set up `Ganesha Project', a
Company registered under the Companies Act, 1956. The acquisition was
challenged on the ground that though land was sought to be acquired for a
Company, procedure was followed under Part II and not under Part VII and hence
it was bad in law. The record revealed that the payment of entire amount of
compensation was to be made by the Company. It was, therefore, incumbent to
follow procedure laid down in Part VII. During the pendency of the writ
petition, however, it was contended by the State that it would be contributing
Rs.100/- and hence it was covered by Part II and the acquisition was legal and
that the acquisition was for a Company and not by the State for a `public
purpose', the Court held that the procedure laid down in Part VII was required
to be followed. Since it was not done, the acquisition was bad in law.
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".
Satisfaction of Government and Judicial Review 1
our judgment, in deciding whether acquisition is for `public purpose' or not,
prima facie, Government is the best judge.
Normally, in such
matters, a writ Court will not interfere by substituting its judgment for the
judgment of the Government.
Hamabai, the Judicial Committee of Privy Council stated;
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
Court, in R.S. Nanji, reiterated the principle laid down by the Privy Council.
1 "Prima facie
the Government is the best judge as to whether 'public purpose' is served by
issuing a requisition order, but it is not the sole judge. The courts have the
jurisdiction and it is their duty to determine the matter whenever a question
is raised whether a requisition order is or is not for a 'public
Somawanti, this Court interpreted sub-section (3) of Section 6 of the Act and
held that the declaration made under Section 6 of the Act is `conclusive
evidence' that the land is needed for public purpose.
was contended that the declaration can be made by the Government arbitrarily
and if such declaration is irrational, unreasonable, mala fide or de hors the
Act, it should be open to a Court to decide the question.
with the submission, the majority stated;
"Now whether in
a particular case the purpose for which land is needed is a public purpose or
not is for the State Government to be satisfied about. If the purpose for which
the land is being acquired by the State is within the legislative competence of
the State the declaration of the Government will be final subject, however, to
one exception. That exception is that if there is a colourable exercise of
power the declaration will be open to challenge at the instance of the
aggrieved party. The power committed to the Government by the Act is a limited
power in the sense that it can be exercised only where there is a public
purpose, leaving aside for a moment the purpose of a company.
If it appears that
what the Government is satisfied about is not a public purpose but a private
purpose or no purpose at all the action of the Government would be colourable
as not being relatable to the power confirmed upon it by the Act and its
declaration will be a nullity".
"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)
Srinivasa Cooperative House Building Society Ltd. v. Madam Gurumurthy Sastry
& Ors, (1994) 4 SCC 675, this Court held that a token contribution from
public revenue cannot ipso facto be treated as colourable exercise of power by
the State in acquisition of land. Each case must furnish its backdrop whether the
action is for public purpose or for a private purpose.
Bajirao T. Kote (dead) by LRs. & Anr. v. State of Maharashtra & Ors.,
(1995) 2 SCC 442, this Court held that satisfaction of the State Government
regarding existence of public purpose is not open to judicial scrutiny unless
there is mala fide or colourable exercise of power.
"It is primarily
for the State Government to decide whether there exists public purpose or not,
and it is not for this Court or the High 1 Courts to evaluate the evidence and
come to its own conclusion whether or not there is public purpose unless it
comes to the conclusion that it is a mala fide or colourable exercise of the
power. In other words the exercise of the power serves no public purpose or it
serves a private purpose".
Laxman Rao Bapurao Jadhav v. State of Maharashtra, (1997) 3 SCC 493, this Court
held that it is for the State Government to decide whether the land is needed
or is likely to be needed for a public purpose and whether it is suitable or
adaptable for the purpose for which the acquisition was sought. The mere fact
of empowering the authorized officer to inspect and find out whether the land
would be adaptable for the public purpose does not take away the power of the
Government to take a decision ultimately.
may, however, recall Daulat Singh once again at this state. There, referring to
all leading cases and dealing with the ambit and scope of judicial review on
the satisfaction by the State Government on `public purpose', this Court
is bound to vary with times and prevailing conditions in the community or
locality and, therefore, the legislature has left it to the State (Government)
to decide what is public purpose and also to declare the need of a given land
for the purpose. The legislature has left the discretion to the Government
regarding public purpose. The Government has the sole and absolute discretion
in the matter". (emphasis supplied)
was contended 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 1 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.
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 1 reaching a
satisfaction as to `public purpose' and in initiating proceedings under
Sections 4 and 6 and in invoking Part II of the Act. We, therefore, refrain
from undertaking further exercise. In our considered opinion, it is not
necessary for us to enter into larger question in view of `fact situation' in
the instant case. Conclusions
the aforesaid principles to the case on hand, in our considered opinion, it
cannot be said that the proceedings initiated by the State for acquisition of
land under the Land Acquisition Act, 1894 are illegal, unlawful, unwarranted,
mala fide, fraud on statute or have been taken in colourable exercise of power.
already adverted to earlier, the State of Andhra Pradesh in the background of
1 `World Tourism Organization Report' and `Vision 2020 Document' took a policy
decision for the development of the City of Hyderabad.
For the said purpose,
it decided to establish an Integrated Project which would make Hyderabad a
major Business-cum-Leisure Tourism Infrastructure Centre for the State. The
project is both structurally as well as financially integrated. It is to be
implemented through Andhra Pradesh Infrastructure and Investment Corporation
(APIIC) which has taken all steps to make Hyderabad a world-class business
destination. APIIC is an instrumentality of State and works as `Nodal Agency'
developing the project which would facilitate socio-economic progress of the
State by generating revenues, weeding out unemployment and bringing new avenues
and opportunities for public at large. Development of infrastructure is legal
and legitimate `public purpose' for exercising power of eminent domain. Simply
because a Company has 1 been chosen for fulfillment of such public purpose
does not mean that the larger public interest has been sacrificed, ignored or
disregarded. It will also not make exercise of power bad, mala fide or for
collateral purpose vitiating the proceedings.
our judgment, the respondents are right in submitting that in case of
integrated and indivisible project, the project has to be taken as a whole and
must be judged whether it is in the larger public interest. It cannot be split
into different components and to consider whether each and every component will
serve public good. A holistic approach has to be adopted in such matters. If
the project taken as a whole is an attempt in the direction of bringing foreign
exchange, generating employment opportunities and securing economic benefits to
the State and the public at large, it will serve public purpose.
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
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 1 not. Undoubtedly, the
decision of the State is not beyond judicial scrutiny. In appropriate cases,
where such power is exercised mala fide or for collateral purposes or the
purported action is de hors the Act, irrational or otherwise unreasonable or
the so-called purpose is `no public purpose' at all and fraud on statute is
apparent, a writ-court can undoubtedly interfere. But except in such cases, the
declaration of the Government is not subject to judicial review. In other
words, a writ court, while exercising powers under Articles 32, 226 or 136 of
the Constitution, cannot substitute its own judgment for the judgment of the
Government as to what constitutes `public purpose'.
the facts in their entirety, we are of the view that the action of the State in
initiating acquisition proceedings for establishing and developing
infrastructure project cannot be held contrary to law or 1 objectionable. The
High Court was, therefore, right in dismissing writ petitions as also writ
appeals and we find no infirmity therein. All the appeals, therefore, are
liable to be dismissed and are accordingly dismissed, however, leaving the
parties to bear their own costs.
Pages: 1 2 3