Urmila Roy & Ors.
Vs. M/S Bengal Peerless Hng.Devt.Co.Ltd. & Ors [2009] INSC 599 (23 March
2009)
Judgment
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 1780-1781 OF 2009
(Arising out of SLP) Nos.16336-16337 of 2007) Urmila Roy & Ors.
......Appellants Versus M/s. Bengal Peerless Housing Development Company Ltd.
& Ors. ...... Respondents
HARJIT SINGH BEDI, J.
1.
Leave
granted.
2.
This
judgment will dispose of civil appeals arising out of judgment dated 2nd July,
2007 rendered by a Division Bench of the Calcutta High Court.
3.
The
facts are as under: Appellant Urmila Roy and others in W.P No.1002 (W) of 2002
were the writ petitioners before the Single Bench of the Calcutta High Court.
As per the facts, 6.78 acres of land had been purchased by them avowedly for 2
putting up an International School, a cultural centre, an I.T.
Park and a Housing
Complex and for this purpose they had been in negotiations with the West Bengal
Housing Board (hereinafter referred to as "The Housing Board"). It
appears, however, that before the project could be finalized, the State
Government issued a Notification under Section 4(1) of the Land Acquisition
Act, 1894 (hereinafter referred to as "the Act") on 4th December,
2000 seeking to acquire in all 12.67 acres (including 6.78 acres belonging to
the writ petitioners) for a housing scheme. The land owner appellants were
allegedly given to understand by the Housing Board that in the event that they
did not object to the acquisition, they too would be permitted to participate
in the proposed project. It is the case of the land owners that on account of this
assurance, they did not raise any serious objection to the acquisition, where
after a declaration under Section 6 (1) of the Act dated 29th November, 2001
has issued and published in the Asian Age on 4th December, 2001. It is further
the case of the land owners that they realized later that they had been cheated
as the land had been acquired for the development and 3 implementation of a
housing scheme by the Housing Development Co. Ltd. (hereinafter referred to as
"The Bengal Peerless"). The Collector subsequently i.e. on 22nd
December, 2003 passed an Award determining the compensation payable and it is
the case of the land owners that they first came to know of the award on
receipt of a notice dated 16th February, 2004 whereby they were informed that as
the ownership of the acquired land could not be ascertained, the compensation
had been deposited with the Reference Court under Section 31(2) of the Act. The
land owners thereupon filed Writ Petition No.
10051(W) of 2004
challenging the acquisition proceedings pleading inter-alia that the said
proceedings had lapsed by efflux of time under Section 11-A of the Act as the
declaration under Section 6 of the Act had been as published on 29th November,
2001 and the Award had been made on 22nd December, 2003. It was also pleaded
that the declaration under Section 6(2) of the Act had not been published in
the manner provided. It was further pleaded that the land had been acquired
under the garb of a public purpose whereas it was intended to benefit the
Bengal Peerless, a private party 4 and an attempt had been made to camouflage
the identity of the beneficiary as it had not been specified in the
Notifications issued under Sections 4 and 6 of the Act and had been brought out
for the first time in the Notification under Section 9 and in this view of the
matter, the land owners had been deprived of their rights to file appropriate
objections.
Cumulatively, it was
submitted that in view of the facts, the acquisition itself was a colourable
exercise of power at the instance of the State.
4.
These
matters were considered by a learned Single Judge of the Culcutta High Court,
who, by his Judgment dated 16th September, 2003 concluded that the
Notifications under Sections 4 and 6 had been properly published as required by
law, that the land had been acquired for a public purpose, as detailed in the
Notification under Section 4 of the Act and that the State Government was
authorized to entrust the housing project to a Joint Sector Company to execute
the housing scheme with the sanction of the State Government under Section 27A
of the West Bengal Housing Board Act, 1972 (hereinafter referred to as
"the 1972 Act"). The Learned 5 Judge, however, observed that the
proposal for the housing scheme had been initiated by the Bengal Peerless
without the approval of the State Government and the fact that the entrustment
to the Bengal Peerless was in public interest had not been examined by the
State Government, and as the scheme itself did not disclose the budget or
detail adequately the residential accommodation that was to be constructed for
the low and middle income groups, the scheme itself was faulty and finally
concluded that it appeared from the record that the intention of the Government
was to enable Bengal Peerless to make huge profits and as such the acquisition
was not for a public purpose and was, therefore, malafide. The learned Single
Judge accordingly allowed the writ petition vide judgment dated 18th May, 2004.
5.
The
matter was thereafter taken before a Division Bench in FMA No. 671 of 2004
(Bengal Peerless Housing Development Co.Ltd. vs.Urmila Roy & Ors. ), FMA
672 of 2004 West Bengal & Ors.) and was argued at length over several 6
days. The Division Bench by its judgment dated 2nd July 2007, accepted the argument
of the Advocate General appearing for the State appellant based on several
judgments of this Court that a challenge to an acquisition should not be
permitted after the award had been rendered, and that in any case, the
challenge even if permissible, had been made belatedly. The Division Bench then
went on to the facts of the case and observed that the conclusion of the
learned Single Judge that the whole process of acquisition was malafide, was
based on a misconception, more particularly as several documents which were
relevant had been ignored, that in the face of these documents, the finding of
the learned Single Judge that the housing scheme had not been prepared with the
approval of the State Government was erroneous, and that the evidence revealed
that a substantial part of the compensation for the acquired land had been paid
by the Government or its agencies. The Division Bench further observed that
from a perusal of the record that the acquisition proceedings themselves were
transparent in nature and merely because the name of Bengal Peerless as the
ultimate 7 beneficiary had come up for the first time in the Notification
under Section 9 of the Act could not lead to the conclusion that the
acquisition proceedings were a colourable exercise of power. The Court then
examined the purpose behind the enactment of the 1972 Act and opined that the
Housing Board had been established under governmental control with a view to
alleviating the shortage of housing and in particular referred to Sections 17
to 21 to highlight that all its members were appointed by the State Government
and the Chairman was, in fact, the Minister of In-charge of the Housing in the
State Government. The Division Bench also held that Section 27A which had been
inserted in the parent act by an amendment of 1993 was for the specific purpose
of authorizing the Housing Board to entrust the execution of a housing scheme
to a joint sector company if it was felt that it was unable to perform its
duties on account of financial limitations. The Division Bench then observed
that a Memorandum of Understanding had been signed on 2nd May 1994 providing
that the Housing Board and the Bengal Peerless would have an equal share
capital of 49.5% each and 8 the balance 1% would be held by the public and
that the company would be run by a nine member independent Board of Directors
of whom five, including the Chairman, were to be nominated by the State
Government with the result that the State Government was, in effect, in
complete control of the management of Bengal Peerless. It was finally concluded
that in view of this feature and the fact that as per record a substantial part
of the compensation had been paid out of public funds by the Housing Board, a
State Government undertaking, it was not open to the land owners to argue that
the land had been acquired to benefit a purely private company. The Division
Bench also relied upon the judgment in State of Gujarat & Anr vs.
Sankalchand Khodidas Patel of M.P. & Ors. (2003) 10 SCC 626 to draw a
distinction between acquisition for a public purpose and acquisition for a
company and observed that as some part of the compensation had been paid by the
Housing Board, the fact that the procedure for acquisition for a public purpose
had been adopted was justified on the facts of the case and relying 9 further
on Manubhai Jehtalal Patel vs. State of Gujarat (1983) 4 SCC 553 further held
that even a contribution of Re.1/- from the State Revenues could, in certain
circumstances, be held adequate to hold that the acquisition was for a public
purpose. The Division Bench finally observed thus:
"From the above
it becomes crystal clear that the contribution to be made by the State need not
be substantial and even a token contribution of Rs.100 would satisfy the
requirement that the compensation has been paid out of public funds."
6.
The
Division Bench thereafter examined the issue as to whether the housing scheme
had been prepared in accordance with the provisions of the 1972 Act and once
again differed from the findings of the learned Single Judge that the
provisions had been ignored, as a perusal of the record revealed that the
scheme had been framed by the State Government pursuant to a meeting held on
17th May 2000 in the Office of the Secretary Housing in the presence of the
Commissioner and the Land Acquisition Officer of the Housing Board and the
agenda circulated for the meeting established 10 that it had been called to
discuss the suitability of the scheme which had been designed to benefit the
weaker sections of society and others with modest means, as it envisaged the
construction of about 1800 dwelling units of three categories, namely the low,
the middle and the higher income groups and that at least 50% of the aforesaid
units were to be reserved for the first two groups with the price for the
former category being substantially subsidized and the flats for the middle
income group to be provided on "no profit no loss basis" and,
significantly, it was specified that the price once determined by the Housing
Board before the start of the project would remain firm and that no escalation
on any account was to be made for any of the dwelling units of any category.
The aforesaid information led the Division Bench to conclude that the
non-escalation Clause in particular, indicated that the scheme was not
motivated by profiteering alone but was in fact for the benefit of poorer
sections, and that if any further evidence was required to prove the bonafides
of Bengal Peerless, the scheme also provided that distribution of plots was
subject to the reservation of plots as per the policy of the 11 Housing Board
and allotments were to be made by a lottery system and that scheme was to be
completed within 5 years from the date of the commencement of the work.
Finally, the Division Bench observed as under:
"In our opinion,
these observations of the Supreme Court are fully applicable to the facts and
circumstances of the present case. The facts narrated above make it abundantly
clear that Housing Scheme has been prepared by the Government, after due
consideration and it could not be said to have been initiated at the instance
of the Bengal Peerless. Therefore, the learned Single Judge has erroneously
held that the acquisition proceedings were null and void."
7.
The
Division Bench also repelled the argument raised on behalf of the land owners
that as they too were in the process of setting up a global village in the land
the acquisition was untenable by observing that the letter dated 8th May 2001
written by Urmila Roy respondent on which primary reliance had been made by the
land owners with respect to the aforesaid plea was not acceptable at this
belated stage as the land owners had not raised any objection to the
acquisition of the land by the State Government, and further that no such 12
plea had not been raised in the writ petition. The Court then observed that
Writ Petition No.10002 (W) of 2002 filed by some other land owners seeking to
challenge the same acquisition had been dismissed by Justice Chattopadhyay on
16th September 2003 and the issues raised in the present appeal had also been
raised before the said Judge and had been repelled and it had been specifically
observed that the land had, indeed, been acquired for a public purpose and not
for a private company, as alleged. The Division Bench, accordingly, allowed the
appeal leading to the present matters before this Court.
8.
The
learned counsel for the appellants has raised several issues before us. It has
been submitted that the Bengal Peerless was not a Corporation within the
meaning of Section 3 (cc) of the Act, inasmuch as 51% of the share capital in
the said company was not held by the State Government or any Central Government
or State Government Undertaking as only 49.5% of the shareholding was held by
the Housing Board. It has been submitted that Bengal Peerless was also not a
company within the meaning of section 617 of the Companies 13 Act, 1956 and
was therefore a company within the meaning of Section 3(e) of the Land
Acquisition Act, and as such Part VII of the Act was applicable and not Part II
thereof. It has also been submitted that the housing scheme Annexure P3 was not
a housing scheme, as envisaged under the 1972 Act but was merely a proposal
that too an incomplete one. Reliance for this submission has been placed on Sections
17,18,19,23 27 and 27(A) of the 1972 Act. As a corollary, it has been argued
that the finding that Bengal Peerless had been entrusted with the execution of
the housing scheme was incorrect, as no terms and conditions of such
entrustment had been agreed upon as was a pre-requisite for the execution of a
housing project by a Joint Sector Company under section 27-A of the 1972 Act.
It has also been urged that the entire amount of the acquisition money
deposited prior to the publication of the declaration under Section 6 of the
Land Acquisition Act had been paid by Bengal Peerless and no part thereof had
been paid by the Government of West Bengal or the Housing Board, and further
the finding of the Single Bench as also of the Division Bench of the High Court
to the 14 effect that the acquisition proceedings had been set in motion after
the scheme had been duly prepared was incorrect. It has accordingly been argued
that the observation of the Division Bench in the State of Tamil Nadu
vs.L.Krishnan (1996) 1 SCC 250 were not applicable to the facts of the case and
that in any event the Tamil Nadu Act which was under consideration in that
matter did not contain a provision analogous to Section 27A of the 1972 Act and
as a necessary consequence, even assuming for a moment that a housing scheme
was in fact in existence when the Notification under Section 4 of the Land
Acquisition Act has been issued, the said scheme had not been formalized in
terms of Section 27-A of the 1972 Act. It has been submitted that from the
facts writ large that the purpose of the acquisition and the entrustment to the
Bengal Peerless of the development of the project was with the intention of
giving huge financial benefits to the Bengal Peerless which was not a public
purpose and was in any case unacceptable in terms of the purpose of a housing
scheme envisaged under the 1972 Act.
9.
The
arguments of the learned counsel for the appellants have been controverted by
the respondent State of West Bengal. It has been pointed out that the housing
scheme had been designed in terms of the 1972 Act and all the relevant
provisions had been complied with and that in any case by virtue of sub-section
(2) of Section 17 thereof it was open to the State Government to entrust the
framing and execution of a Housing scheme to the Housing Board on such terms
and conditions as it think fit, and that the scope of a similar provision,
Section 35 of the Tamil Nadu State Housing Board Act 1961 had been examined by
this Court in L.Krishnan's case (supra). It has also been argued that
acquisition of the land for the purpose of the execution of the housing scheme
was a public purpose with little or no element of profiteering as the bare
reading of the scheme would show, and that, in any case, the middle and lower
income groups were to have subsidized housing on "no profit no loss"
basis and to ensure that the conditions of the scheme were scrupulously
observed the State Government had retained complete control over the activities
of Bengal Peerless. It has also been submitted that 16 as the appellants land
owners had not filed objections under Section 5-A of the Land Acquisition Act,
they were precluded from challenging the acquisition, more particularly after
the award had been rendered.
10.
We
have heard the learned counsel for the parties and gone through the record very
carefully. We find that three basic issues arise for consideration in this
matter. They are, i) as to whether Part II or Part VII of the Act is applicable
to the present acquisition proceedings, ii) whether the Housing Scheme was one
that satisfied the requirement of Section 27A of the 1972 Act and, iii) whether
the acquisition and the Scheme were a colourable exercise of power so as to
give undue benefit to Bengal Peerless. We now take up the three issues
cumulatively.
11.
It
has been submitted at the very outset that Bengal Peerless was not a Government
Company, as understood by Section 3(cc) of the Act as the Government did not
hold 51% of the paid-up share of the capital. We find, however, that Section
3(cc) is to be read along with Section 6 more 17 particularly Explanation 2
appended therewith. The aforesaid provisions are reproduced hereunder:
"3(cc).the
expression "corporation owned or controlled by the State" means
anybody corporation established by or under a Central, Provincial or State Act,
and includes a Government company as defined in Section 617 of the
CompaniesAct,1956 (1 of 1956), 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, being a society established or administered by
Government and a co- operative society within the meaning of any law relating
to co-operative societies for the time being in force in any State, being a co-
operative society in which not less than fifty-one per centum of the paid-up
share capital is held by the Central Government, or by any State Government or
Governments, or partly by the Central Government and partly by one or more
State Governments."
Section 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 5 A,
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 authorized to certify
its orders and different 18 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 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.
19 [Explanation 1. -
In computing any of the periods referred to in the first proviso, the period
during which any action or proceeding to be taken in pursuance of the
notification issued under Section 4, sub- section (1),is stayed by an order of
a Court shall be excluded.
Explanation 2.- Where
the compensation to be awarded for such property is to be paid out of the funds
of a corporation owned or controlled by the State, such compensation shall be
deemed to be compensation paid out of public revenues].
(2) Every declaration
shall be published in the Official Gazette, [and in two daily newspapers
circulating in the locality in which the land is situate of which at least one
shall be in the regional language, and the Collector shall cause public notice
of the substance of such declaration to be given at convenient places in the
said locality (the last of the date of such publication and the giving of such
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.
20 (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 a manner
hereinafter appearing.
12.
A
perusal of the Second proviso and Explanation 2 in particular reveals that if
the compensation awarded for the property is paid substantially out of the
funds of a Corporation owned or controlled by the State, such compensation will
be deemed to be paid out of public funds and as such would satisfy the test of
acquisition for a public purpose.
13.
We
see from the record that as per letter issued by the Land Acquisition Collector
on 13th November 2001 to the Housing Ministry of the State Government, a
request had been made that a sum of Rs.3.00 Crores which represented about 50%
of the compensation of the acquired land be deposited.
This memo had been
forwarded by the State Government to the Housing Board and on 23rd November
2001 a sum of 21 Rs.1.70 crores towards compensation had been sent by Bengal
Peerless to the Land Acquisition Collector through the Housing Board. It
appears that on 30th October 2003 the State Government had requested the
Housing Board to make arrangements for the balance payment of compensation of
about Rs.82,04,138 and by a memorandum of 31st October 2003 the Government of
West Bengal had directed the Housing Board to pay the additional balance
compensation which too was defrayed by an account payee cheque dated 03rd
November 2003 drawn on the Bank of Maharashtra. The account statement of the
Bank of Maharashtra was produced before us for perusal and this statement
supports the argument that the aforesaid amount had, indeed, been paid from the
funds of the Housing Board which is completely owned and controlled by the
State Government. In their written submissions the appellants have doubted the
accuracy of this statement, by asserting that they had not been able to verify
its contents as it had been produced for the first time in this Court. We find
that even if this objection is accepted and the statement ruled out of
consideration, the other evidence on record does indicate that a substantial
part of the compensation had been paid from Government funds. In Pratibha Nema
case (supra), that is what this Court had to say:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
We
may now advert to Section 6. It provides for a declaration to be made by the
Government or its duly authorized officer that a particular land is needed for
a public purpose or for a company when the Government is satisfied after
considering the report, if any, made under Section 5-A(2). It is explicitly
made clear that such declaration shall be subject to the provisions of Part VII
of the Act which bears the chapter heading "Acquisition of Land for Companies".
Thus, Section 6
reiterates the apparent distinction between acquisition for a public purpose
and acquisition for a company. There is an important and crucial proviso to
Section 6 which has a bearing on the question whether the acquisition is for a
public purpose or for a company. The second proviso lays down 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".
23 Explanation 2
then makes it clear that where the compensation to be awarded is to be paid out
of the funds of a corporation owned or controlled by the State, such
compensation shall be deemed to be compensation paid out of public revenues.
Thus, a provision for
payment of compensation, wholly or partly, out of public revenues or some fund
controlled or managed by a local authority is sine qua non for making a
declaration to the effect that a particular land is needed for a public
purpose. Even if a public purpose is behind the acquisition for a company, it
shall not be deemed to be an acquisition for a public purpose unless at least
part of the compensation is payable out of public revenues which includes the
fund of a local authority or the funds of a corporation owned or controlled by
the State. However, it was laid down in Somawanti case that the notification
under Section 6(1) need not explicitly set out the fact that the Government had
decided to pay a part of the expenses of the acquisition or even to state that
the Government is prepared to make a part of contribution to the cost of
acquisition. It was further clarified that the absence of a provision in the
budget in respect of the cost of acquisition, whole or part, cannot affect the
validity of the declaration. The majority Judges of the Constitution Bench also
clarified that a contribution to be made by the State need not be substantial
and even the token contribution of Rs 100 which was made in that case satisfied
the requirements of the proviso to Section 6(1). The contribution of a small
fraction of the total probable cost of the acquisition does not necessarily
vitiate the declaration on the ground of colourable exercise of power,
according to the ruling in the said case. Following Somawanti, the same
approach was adopted in Jage Ram v. State of Haryana. The question, whether the
contribution of a nominal amount from the public exchequer would meet the
requirements of the proviso to Section 6, had again come up for consideration
in Manubhai Jehtalal Patel v. State of Gujarat. D.A. Desai, J. after referring
to Somawanti, speaking for the three-Judge Bench observed thus: (SCC p. 555,
para 4) "It is not correct to determine the validity of acquisition
keeping in view the amount of contribution but the motivation for making the
contribution would help in determining the bona fides of acquisition. Further
in Malimabu case contribution of Re 1 from the State revenue was held adequate
to hold that acquisition was for public purpose with State fund. Therefore, the
contribution of Re 1 from public exchequer cannot be dubbed as illusory so as
to invalidate the acquisition." somewhat restricted meaning has been given
to the extremely broad parameters laid down in Pratibha Nema's case (Supra),
but it has nonetheless been observed that if a reasonable amount of
compensation had been drawn out Government funds, it would satisfy the
requirement of a public purpose as per the Act. In the present case, as already
mentioned above, we find that a substantial part of the compensation has,
indeed, been paid by the State Government or by the Housing Board which clearly
satisfies the test of public purpose. In this background, we endorse the
finding of the Division Bench that the procedure envisaged in Part II and not
in Part VII of the Act would be applicable. This is precisely what has been
done.
15.
The
learned Counsel for the Appellants has also contended that as the housing
scheme had not been prepared in terms of the 1972 Act it had no valid sanction.
It has been highlighted that the entire scheme had been designed to help Bengal
Peerless to make undue profits and the very purpose of 1972 Act had, thus, been
frustrated.
16.
The
learned counsel for the respondent has on the contrary referred us to Sections
17, 18 and 27A of the 1972 Act to submit that the said Act specifically
provided for the transfer of the acquired land to a Joint Sector Company for the
purpose of the execution of the Housing Scheme with the previous approval of
the State Government and that the scheme had indeed been framed under Sections
17 and 18 and thereafter entrusted for execution to the Bengal Peerless.
It has been submitted
that though Bengal Peerless had been entrusted with the execution of the scheme
the overall control remained with the Housing Board which was, in fact, an
extension of the State Government itself and the State Government a fortiori
retained overall control in the execution of the scheme. We find merit in this
submission. The record indicates that as a consequence of a Memorandum of
Understanding dated 13th September 1993 a Joint Sector Company for the
execution of the housing scheme had been created on 20th May 1994 and it was
provided that 49.5% of the shares capital would be held by each of the two i.e.
the Housing Board and Bengal Peerless and the balance 1% would be held by the
public and the company would be run independently by nine Directors, of whom
five including the Chairman were to be nominated by the State Government. It is
also relevant that the scheme had, in fact, been prepared by 27 the State
Government after due deliberation and had been initiated as per the provisions
of the 1972 Act by virtue of a meeting held on 17th May 2000 in the Office of
the Secretary, Housing Department, the Commissioner of the Housing Board, the
Land Acquisition Collector and several other senior officials and the proposal
had been mooted for the acquisition of the land for the purpose of a scheme for
weaker sections of society and others with modest incomes. The scheme also
provided for the construction of 1800 dwelling units of various categories with
at least 50% to be earmarked for the lower and middle income groups with the
price subsidized for the former and all flats for the middle income group to be
provided on "no profit no loss" basis, and for facilities for
schools, roads etc. for the benefit of those who were ultimately to reside in
the dwelling units. Significantly also, the scheme provided that there would be
no escalation on account of any reason whatsoever for the price charged for the
dwelling units and that the allotment of the dwelling units would be on the
basis of a lottery. Section 18 of the 1972 Act which deals with the matters to
be provided for by housing schemes is reproduced below:
"Sec.18. Matters
to be provided for by housing schemes. - Notwithstanding anything contained in
any other law for the time being in force, a housing scheme may provide for all
or any of the following matters, namely :- (a) the acquisition by purchase,
exchange or otherwise of any property necessary for the scheme;
(b) the construction
and reconstruction of buildings;
(c) the sale, letting
out or exchange of any property included in the scheme;
(d) roads, drainage,
water-supply, lighting, schools,hospitals,dispensaries,marketplace
s,parks,playgrounds and open spaces within a housing scheme;
(e) the reclamation
or reservation of lands for markets, gardens,schools, dispensaries, hospitals
and other amenities in a housing scheme;
(f) the letting
out,management and use, of the Board premises;
(g) accommodation for
any class of inhabitants;
(h) the advancing of
money for the purpose of the scheme;
(i) the collection of
such information and statistics as may be necessary for successful
implementation of the scheme;
(ia) development of
any urban or rural area for successful implementation of housing schemes and
for purposes ancillary or incidental thereto;
(j) any other matter
for which, in the opinion of the Board or the State Government, it is expedient
to make provision with a view to providing housing accommodation and to
improving or developing of any area included in a housing scheme."
17.
We
find that the scheme as laid fully satisfies the tests laid down in this
provision. Sections 17, 27A and 28 of the 1972 Act read as under:
30 " 17. Powers
and duties of Board to undertake housing schemes.- (i) Subject to the
provisions of this Act the Board may, from time to time, incur expenditure and
undertake works for the framing and execution of such housing schemes as it may
consider necessary and such housing schemes may include housing schemes in
relation to lands and buildings vested in or in the possession of the State
Government.
(2) The State
Government may, on such terms and conditions as it may think fit to impose,
entrust to the Board the framing and execution of any housing scheme [,whether
provided for by this Act or not,] and the Board shall thereupon undertake the
framing and execution of such scheme.
(3) The Board may, on
such terms and conditions as may be agreed upon and with the previous approval
of the State Government, take over for execution any housing scheme, on behalf
of a local authority or co-operative society, or on behalf of an employer, for
building houses mainly for the residence of the employees of such local
authority, co-operative society or employer, as the case may be [or for the
residence of the members of such co- operative society].
27A. Power to entrust
existing, or new, joint sector company with housing scheme.- Notwithstanding
anything contained in this Act, the Board may, if it considers it necessary so
to do in the public interest and is satisfied that an existing, or new, joint
sector company is willing to comply, or has complied, with such terms and
conditions as the State Government may think fit to impose,entrust, with the
previous approval of the State Government,any existing, or new, joint sector
company with any housing scheme for execution, and different existing, or new,
joint sector companies may be so entrusted with different housing schemes for
execution.
28. Power to
acquire.- (1) Where any land is needed for the purpose of a housing scheme or
for performing any other duties or functions of the Board, the Board may enter
into an agreement with any person for the acquisition by purchase, lease or
exchange, of his rights and interests in such land either wholly or in part, on
payment of an amount proportionate to the loss or deprivation caused to the
enjoyment of the land.
(2) The Board may
also take steps for the compulsory acquisition of any land or any interest
therein required for the execution of a housing scheme or for performing any
other duties or functions of the Board and such acquisition of any land or any
interest therein shall be deemed to be acquisition for a public purpose within
the meaning of the Land Acquisition Act. "
18.
We
observe that Section 27-A specifically authorizes the Housing Board in public
interest to entrust a housing scheme to a Joint Sector Company with the
previous approval of the State Government. We find that there is no warrant for
the proposition that unless a budgetary provision is made by the Housing Board
or that a final scheme is prepared in accordance with Section 23 of the 1972
Act, no land can be acquired for the purpose of execution of a housing scheme.
It is significant that Section 17 of the 1972 Act itself gives the power to the
Housing Board to make a scheme and that Section 27A further authorizes the
Board in public interest to entrust a housing scheme to a Joint Sector Company
for execution and for that purpose Section 28(2) of the Act further authorizes
the Housing Board to take steps for compulsory acquisition of any land required
for the purpose of a housing scheme. While dealing with Section 35 of the Tamil
Nadu Housing Board Act, 1961 which is akin to Section 17 of the 1972 Act, this
is what this Court had to say in L. Krishanan Case (supra):
33 "......The
Housing Board is under an obligation to carry out certain other schemes also as
are provided in these sections. Sub-section (2) of Section 35 states that the
Government may on such terms and conditions as they may think fit to impose, transfer
to the Board the execution of any housing or improvement scheme not provided
for by the Act. On such transfer, the Board is under obligation to undertake
the execution of such scheme as if such scheme has been provided for by the
Housing Board Act."
Para 15. These
provisions make it abundantly clear that the duty of the Housing Board is not
merely the execution of the housing or improvement scheme prepared and
published by it under the Act but extends to executing other schemes as well,
as are made over to it or agreed to be undertaken by it. Now, when Section
35(2) speaks of transfer to the Board the execution of any housing or
improvement scheme not provided for by this Act, it certainly cannot mean a
scheme prepared in accordance with the provisions of the Housing Board Act.
Moreover, while transferring the scheme to the Housing or improvement scheme
prepared in accordance with the Housing Board Act.
Here again, the
taking over the scheme by the Housing Board is subject to such terms and
conditions as may be agreed upon by both. Section 36 indeed discloses that what
is entrusted to the Housing Board is the job of clearance or improvement of any
slum 34 area. The Government while directing the Board to undertake the
clearance or improvement of a particular area can also direct the Board to
frame and execute "such housing or improvement scheme under this Act as
the Government may specify" and the Board is obliged to execute such
scheme as if such scheme is prepared by the Act."
Para 16. In such
circumstances, it would not be right to contend that unless a final and
effective scheme prepared in accordance with the provisions of Chapter VII of
the Housing Board Act is in existence, the Government cannot issue a
notification under section 4 of the Land Acquisition Act for acquiring the land
required for execution of the schemes by the Housing Board. To repeat, the
Housing Board is obliged to execute not only the housing or improvement schemes
prepared under the said Chapter but also certain other schemes referred to in
Sections 35 and 36. For example the Government may conceive a particular scheme
and ask the Housing Board to execute on such terms and conditions as the
Government may specify.
In such a situation,
there is no question of preparing a housing or improvement scheme by the
Housing Board in accordance with the provisions of Housing Board over again. So
far as the scheme framed by the Government is concerned, there is no enactment
governing it. It can, therefore, be a scheme as ordinarily understood. Similar
would be the case where the scheme undertaken by a local 35 authority is made
over the Housing Board by mutual agreement."
19.
In
West Bengal Housing Board & Ors. vs. Brijendra Prasad Gupta & Ors.
(1997) 6 SCC 207 while taking an overall view of the entire matter and also
dealing with the submission that some profit motive could be involved in favour
of a Joint Sector Company executing a housing scheme, this is what this Court
had to say:
"Para 19. In
this background it is difficult for us to accept the submissions of the Writ
Petitioners that the purpose for which the requisition had been made was not a
public purpose within the meaning of the Act or that the circumstances of the
cases did not justify the invocation of the provisions of the Act or that the
exercise of powers under that Act was colourable exercise of power.
Para 25. It is a
matter of common knowledge that there is acute shortage of housing
accommodation both in rural and urban areas of the country. Since late the
prices of the real estate have sky-rocketed making it beyond the reach of low
income and middle income people. The State has duty to perform to give shelter
to homeless people specially to people in the income group. In the present case
the State was unable to meet this gigantic task. In the background of shortage
of resources which the State has the legislative enacted the 36 Housing Board
Act and constituted the Housing Board to meet this challenge of providing
houses to the people falling in the low income group and to others. Again the
Housing Board was unable to meet the challenge. The Housing Board Act was
amended to bring in the concept of joint venture in order to tap the resources
of the private sector. Thus a joint venture came into being as disclosed in the
supplementary affidavit of the State as to how the process of starting of joint
venture had been gone into and how the Board of Directors of the joint sector
company has been constituted and how the State and Housing Board exercise
control over this joint sector enterprise.
26. Simply because
there is an element of profit, it could not make the whole scheme illegal. A
private entrepreneur will certainly look to some profit but to see that the
profit motive does not lead to exploitation even of the rich and that the
houses are available to the poor people and to middle class people at nominal
or affordable prices, or even on no-profit-no-loss basis, the Housing Board
exercises the necessary control. It is certainly a public purpose to provide
houses to the community especially to poor people for whom the prices are
beyond their means and they would otherwise never be able to acquire a house.
27. What has been
done in the present case is that the profit earned on sale of flats of HIG have
been pumped in to subsidize the prices of the houses falling in LIG and in this
there would certainly be an element of profit both for the Housing Board as
well as the private company in the joint venture for selling flats of HIG. We
fail to see how public purpose is not being served in the present case.
28. 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 than the State or the statutory corporation to supervise or
monitor the functions of the joint venture company. Courts will certainly step
in if the public purpose is sought to be frustrated.
29. In the present
case Directors appointed by the Housing Board/State on the Board of Directors
of the joint venture company would certainly see that no runaway profit is
earned and that sale price of HIG houses is guided by market forces but there
is no exploitation. Every section of the society needs protection from
exploitation. It is however not possible nor desirable to lay down any
principle as to how this is to be done.
33. We find in the
present backdrop the inability of the State Government and the Housing Board to
meet the challenge to achieve the target of even constructing 50,000dwelling
units in urban areas to tackle the acute problem of homelessness for different
categories of people particularly those falling in Lower Income Group (LIG) and
Middle Income Group (MIG); the State Legislature amending the Housing Board Act
and providing for incorporation of a joint sector company for executing the
housing scheme on the terms and conditions to be approved by the Government;
selection of the private entrepreneur for incorporation of the joint sector
company with the Housing Board;
the constitution of
the Board of Directors of the joint sector company; the control of the Housing
Board and the State Government over the joint sector company to execute the
scheme of the housing project; control on the fixation of prices of the flats to
be constructed by the joint sector company;
relevant factors
taken into consideration for execution of the housing project and all these to
tackle the urgent and growing need of providing shelter to the LIG and MIG
people when it is not possible for those people to acquire a house of their own
with escalating real estate prices; it cannot be said that the public purpose
is not being served or the incorporation of the joint sector company,viz.
Bengal Peerless Housing Development Co.Ltd. and the execution of the housing
project "Anupama"
by this joint sector
company, in the given circumstances, on the land in question which is part of
the bigger piece of land is 39 not in public interest. The Housing Board acts
as regulatory body and the State Government oversees the housing project and has
also imposed certain terms and conditions. No ulterior purpose has been alleged
and it cannot be said that the power exercised by the State authorities are in
any way arbitrary or irrational or there is any abuse of power. Rather the
legal compulsion of the State and the Housing Board to get the housing project
executed through a joint sector company is quite understandable. We also find
the impugned action is within the purview of law and is valid."
20.
In
view of what has been observed above, and in the background of the present
case, it becomes crystal clear that though the execution of the housing scheme
has been entrusted to a Joint Sector Company, the overall control over the
project has been retained by the Government controlled Board of Directors, full
details of the scheme have been provided with large provisions for the benefit
of the poorer sections of society, with the allotment of tenements either on a
subsidized price or on "no profit no loss" basis for the low and
middle income groups respectively, allotment by draw of lots to avoid any
arbitrariness and a complete freeze on the price 40 of residential
accommodation with no escalation whatsoever for whatever reason and the
provision of facilities for effective and comfortable living such as schools,
roads, sewage etc. We are, therefore, of the opinion that the housing scheme
fully satisfies the tests laid down by the Supreme Court in the two cases cited
immediately above.
21.
There
is yet another aspect which needs to be dealt with.
It appears from the
record, and it was so pointed out during the course of arguments, that the
appellants had not filed any objection to the acquisition on the plea that some
assurance had been held out that they too would be allowed to participate in
the housing scheme. This fact has been denied by the respondents and it has
been emphasized that as per letter dated 8th March 2001 the land-owners had, in
fact, waived their right to challenge the acquisition. This letter is
reproduced hereunder in extenso:
"To Date:8th
March 2001 The Special Land Acquisition Officer, 41 South 24 - Parganas, 5th
Floor, New Treasury Buildings, Alipore,Kolkata - 700027.
Sir, Re: Barakhola
Mouza J.L.No.21 P.S.Kasba This has reference to your acquisition notice dated
12.1.2001 for 12.67 acres land in Plot No.125 & 126 of the subject mouza.
In this connection, I
would like to submit that I am the Power of Attorney (Registered) holder of the
successors of late Abhay Pada Pain who was the owner of the aforesaid plots as
evident from the ROR. A copy of the P/A is enclosed for your kind perusal.
Incidentally Plot No.126 was duly demarcated showing the vested portions and
the retained portions by the District Authorities as per copy of the Map
enclosed along with a copy of the Minutes of the meetings held in Chamber of
the then ADM & L.R.O.South 24 - Parganas on 20.3.1996.
Subsequently 13.56
acres of land was sold to the following parties and registered under section 41
on 25.6.1999 of which deed copies are enclosed. Since the tax has not been
assessed, as yet for value to ascertain additional stamp duty, 42 the same
have not been paid so far.
However, enquiries
are under way, but in the meantime Khazna has been paid up - to - date as per
copies of receipts dt.18.1.2001 enclosed herewith.
The transfers are:-
a) Sri Debabrata Choudhary :
b) Sri Shreekanta Ray
: 6.00 acres c) M/s. Anarean Estate Co.Ltd. :
d) Sri Swadesh Ghosh
:
e) Sri Swapan Dey :
f) Smt.Ila Dey : 6.58
acres g) Sri Saptashi Dey :
h) Smt.Basanti Ghosh
:
The aforesaid transferees
did not raise any objection to govt. acquiring. The land for housing, in face,
I had moved an idea to West Bengal Housing Board and willing to negotiate along
with the transferees' price for your acquisition.
Please do let me
known for any further information and clarification / assistance, a may be
required.
Thanking you, I am
Yours faithfully Sd/-Urmila Ray Constituted Attorney of Smt. Lily Paul 43 Smt.
Dolly Paul Smt. Mira Rani Basu Enclosed a) Copies of 8 nos.deed b) Copy of
power of attorney c) Copy of witness by ADM,DL,LRO d) Copy of Minutes of
meeting dt.
26.3.96 e) Copy of
Khana receipts C 735407 dt.Rs.32,277/- C 735408 dt.18.1.01 for Rs.2709"
22.
It
is significant that this letter written by the Attorney Urmila Roy, on behalf
of all the land owners spells out that the owners had in fact been willing to
negotiate the price for the land at the time when the acquisition were still
incomplete as only the Notification under Section 4 of the Act had, at that
stage, been issued (4th December 2000). It is also significant that the
declaration under Section 6 had been issued on 29th November 2001 and the award
rendered on 27th December 2003. It is, therefore, evident that the land owners
had, in 44 fact, acquiesced to the acquisition and cannot now turn around to
say that the acquisition was bad in law.
23.
In
view of the above findings, we are of the opinion that no further discussion on
the other marginal issues that have been raised, needs to be made. The appeals
are, accordingly, dismissed.
....................................J.
(TARUN CHATTERJEE)
.....................................J.
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