KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS.

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 309 [V. GOPALA GOWDA, J.]

22Copy pinpoint22. The learned counsel further places reliance on the decision of this Court in the case of Royal Orchid Hotels Ltd. v. G Jayaram Reddy & Ors. 7, wherein it was held that if the land is to be acquired for a company, then the State Government and the company are bound to comply with the provisions contained in Part VII of the L.A. Act.

23Copy pinpoint23. The learned counsel further submits that the argument advanced on behalf of TML that the cost of acquisition has been borne by the public exchequer, if accepted, would in fact make this an even more egregious violation of the L.A. Act. It is submitted that this would not only mean that a colourable device has been used to circumvent the provisions of Part VII of the L.A. Act, but that there has also been a clear violation of Section 41 of the L.A. Act, which provides that the c cost of acquisition must be borne by the company and not by the State.

24Copy pinpoint24. The learned counsel thus, submits thatthe entire land acquisition proceedings being a colourable exercise of power carried out ~n violation of the L.A. Act and the relevant Rules be set aside.

25Copy pinpoint25. Mr. Rakesh Dwivedi, the learned senior counsel appearing on behalf of the State of West Bengal in the appeal arising out of SLP (C) No. 13645 of2008 submits that the acquisition ofland in Singur for TML is illegal as the same has been done in complete violation of the provisions of Sections 4 and 6 of the L.A. Act, as well as the non- compliance with Part VII of the L.A. Act and Rules applicable for acquisition of land in favour of a Company.

26Copy pinpoint26. The learned senior counsel takes us through the cabinet notes with reference to the requisition letter of TML, extracted supra and submits that it becomes very clear from a perusal of the documents on record that the scouting and selection ofland was done completely by F TML, much before the issua11ce of the notification under Section 4 of the L.A. Act. The learned senior counsel further submits that initially, TML had submitted a proposal of requirement of 600 acres of land, which 'Yas subsequently increased to I 000 acres without any justification for seeking such vast extent of lands in favour of TML. This action of the State Government and its officers shows a complete non application G of mind on the part of the cabinet while assessing how much land is needed for the project, before acquiring lands at the behest ofTML.

27Copy pinpoint27. The learned senior counsel further submits that post the amendment to the L.A. Act in the year 1984, it becomes clear that the , <2011) 10 sec 608 H

310 SUPREME COURT REPORTS [2016] 11 S.C.R.

A acquisition for a company must .comply with the requirements of Part VII of the L.A. Act, and must only be done in accordance with the same. The same cannot be fused with acquisition of land for a public purpose. The learned senior counsel places reliance on the Statement of Objects and Reasons of the Amendment Act 68 of 1984, the relevant part of which has been extracted supra. B

28Copy pinpoint28. The learned senior counsel fu1iher submits that Par! iamentary Debates relating to the Amendment Act 68 of 1984 also indicate that acquisition for company could be done'only under Part VII of the L.A. Act.

29Copy pinpoint29. The learned senior counsel places reliance on the decision of c the Madhya Pradesh High Court in the case of Clwitram Verma mu/ Ors. v. Land Acquisition Officer, Raipur a11d Ors. 8 and the Allahabad High Court in the case of Poorcm a11d Ors. v. St(lte of U.P. a11d Ors. 9 , wherein it has been held that after the amendment to the L.A. Act in the year 1984, acquisition of land for a company can happen only in accordance with Part VII of the L.A. Act.

30Copy pinpoint30. The learned senior counsel further contends that the doctrine of infusion of public revenue by the government or by corporations covered by Section 3(cc) of the L.A. would not be available after the amendments made in the year· 1984. In the pre-1984 legal position, there was lack of clarity in the inclusive definition of public purpose in Section 3(f) to the L.A. Act. Therefore, the Supreme Court in a number of cases resorted to the second proviso to Section 6 for holding that infusion of public revenue would make the acquisition for a company an acquisition for public purpose. After the exclusion of companies.from the purview .of Section 3(f) of the L.A. Act, infusion of public revenue cannot be F · resorted to for holding that acquisition of land in favour ofa company is one for public purpose. The learned senior counsel thus, submits that the reliance placed by the learned senior counsel appearing on behalf of TML on the pre-1984 decisions, including P(lndit Jlwmlu Lal v. State of Punjab 10 , SonWW(lllti v. St(lte of P1111jab 11 , Jage Ram v. St(lte of Haryana 11 and Ajl(ltoo11 i~ Lt. Govemor of Delhi 13 is misplaced as the G 8 A.LR. 1994 MP 74 9 2010 Supp All. L.J. I Ill (1961) 2 SCR 459

II (1963)2 SCR 774 12 (1971) J sec 671

H " (1975) 4 sec 285

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 311 [V. GOPALA GOWDA, J.]

same have no application to the facts of the instant case as the same A pertain to the pre-1984 situation. It is further submitted that the reliance placed upon the decisions of this Court in the cases of Pratib/la Nema (supra) and Amarnatli As/tram (supra) has no bearing on the facts of the instant case as the same have not correctly appreciated the scope of the 1984 amendment to the provision Section 3 (f) of the L.A. Act. 8

31Copy pinpoint31. The learned senior counsel further contends that the objections filed by the landowners/ cultivators before the Land Acquisition Colleetor after publication of the notification under Section 4 of the L.A. Act were also rejected under Section 5-A(2) of the L.A. Act in a mechanical manner without any application of mind. The learned senior counsel contends that the State Government of West Bengal also recorded its c satisfaction under Section 6 of the L.A. Act by recording its satisfaction mechanically, without considering the need of the lands. It is further submitted by the learned senior counsel that with regard to conducting an inquiry under Section 5-A(2) of the L.A. Act, this Court has held in a catena of decisions that it is a valuable right available to the land owners arrd cultivators, and therefore, it casts a statutory obligation on the part of the Collector and the State Government to consider the objections and take a decision in accordance with law. The application of mind by the concerned Land Acquisition Collector including the State Government before issuing the notification under Section 6 of the Act, for acquisition of lands is a sine qua 11011. The learned senior counsel places reliance on the decision of this Court in the case of RaKllubir SbiKll Sllerawat v. State of Haryana and Ors. 14 , wherein it has been held as under: "In this context, it is necessary to remember that the rules of natural justice have been ingrained in the scheme of Section SA with a view to ensure that before any person is deprived of his land by way of compulsory acquisition, he must get an opportunity to oppose the decision of the State Government and/or its agencies/instrumentalities to acquire the particular parcel ofland. At the hearing, the objector can make an effort to convince the Land Acquisition Collector to make recommendation against the acquisition of his land. He can also point out that land proposed to be acquired is not suitable for the purpose specified in the notification issued under Section 4(1 ). Not only this, he can produce evidence to show that another piece ofland is available 1 ' (2012i 1 sec 792 H

312 SUPREME COURT REPORTS r2o 161 11 S.C.R.

A and the same can be utilized for execution of the particular project or scheme. Though, it is neither possible nor desirable to make a list of the grounds on which the landowner can persuade the Collector to ma~e recommendations against the proposed acquisition of land, but what is important is that the Collector should give a fair opportunity of hearing to the objector and B objectively consider his plea against the acquisition ofland. Only thereafter, he should make recommendations supported by brief reasons as to why the particular piece of land should or should not be acquired and whether or not the plea put forward by the objector merits acceptance. In other words, the recommendations c made by the Collector must reflect objective application of mind to th_e objections filed by the landowners and other interested persons."

32Copy pinpoint32. The learned senior counsel further places reliance on the observations made by this Court in the case of Suriluler Singfl Brar & D Ors. v. Union of bufial.i to submit that the Collector did not apply his mind at all while considering the objections under S-;:lion 5-A (2) of the L.A. Act. In that case, this Court observed as under: "The reason why the LAO did not apply his mind to the objections filed by the Appellants and other landowners is obvious. He was E a minion in the hierarchy of the administration of the Union Territory of Chandigarh and could not have even thought of making recom'mendations contrary to what was contained in the letter sent by the Administrator to Surinder Singh Brar. lfhe had shown the courage of acting independently and made recommendation against the acquisition of land, he would have surely been shifted from that post and his career would have been jeopardized. In th~ .system of governance which we have today, junior officers in the administration cannot even think of, what to say of, acting against the wishes/dictates of their superiors. One who violates this unwritten code of conduct does so at l~is own peril and is described as a foolhardy. Even those constituting higher strata of services follow the path of least resistance and find it most convenient to tow the line of their superiors. Therefore, the LAO cannot be blamed for having acted as an obedient subordinate of the superior authorities, including

H " (2013) 1 sec 403

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 313 [V. GOPALA GOWDA, J.]

the Administrator. However, that cannot be a legitimate ground to approve the reports prepared by him without even a semblance of consideration of the objections filed by the Appellants and other landowners and we have no hesitation to hold that the LAO failed to discharge the statutory duty cast upon him to prepare a report after objectively considering the objections filed under Section SA(!) and submissions made by the objectors during the course of personal hearing."

33Copy pinpoint33. The learned senior counsel thus, contends thatthe acquisition of the vast tracts of lands of the owners/cultivators, depriving them of their constitutional rights for non-compliance with the mandatory procedure as provided under Section 5-A (2) and Part VII of the L.A. c Act. Therefore the acquisition proceedings are void ab initio in law.

34Copy pinpoint34. Mr. K. Parasaran, the learned senior counsel appearing on behalf of WBIDC adopts the arguments advanced by learned senior counsel Mr. Rakesh Dwivedi on behalf of the West Bengal State Government. D

35Copy pinpoint35. On the other hand, Mr. Abhishek Manu Singhvi, the learned senior counsel appearing on behalf ofTML contends that the government is free to acquire certain lands keeping in mind a certain entity, and the mere fact that the acquisition oflands has been done keeping that entity in mind will not render the acquisition invalid. It is submitted that the E State of West Bengal as a matter of Industrial Policy decided to make efforts to establish more manufacturing industries with a view to attract more private sector investment in the manufacturing industry. The tremendous growth potential ofautomobile industry in the State ofWest Bengal would have boosted economy, created job opportunities, direct and indirect, and have had an impact on the secondary employment in the associated service sectors. The learned senior counsel further places strong reliance on the constitution bench decision of this Court in the case of Ajlatoon (supra), wherein this Court has held thatthe acquisition ofland for the "planned development of Delhi" was a valid public purpose. It was held that the fact that after the acquisition, the land was handed over to the co-operative housing societies would not attract Part VII of the L.A. Act, 1894. This Court has held as under: "24. It was contended by Dr. Singhvi that the acquisition was really for the cooperative housing societies which are companies within the definition of the word 'company' in Section 3(e) of H

314 SUPREME COURT REPORTS f2016] l l S.C.R.

A the Act, and, therefore, the provisions of Part VII of the Act should have been complied with. Both the learned Sing!e Judge and the Division Bench of the High Court were of the view that the acquisition was not for 'company. We see no reason to differ from their view. The mere fact that after the acquisition the Government proposed to hand over, or, in fact, handed over, a B portion of the property acquired for development to the cooperative housing socie~ies would not make the acquisition one for 'company'. Nor are we satisfied that there is any merit in the contention that compensation to be paid for the acquisition came from the consideration paid by the cooperative societies. c In the light of the averments in the counter affidavit filed in the writ petitions here, it is difficult to hold that it was cooperatives which provided the fund for the acquisition. Merely because the Government allotted a part of the property to cooperative societies for development, it would not follow that the acquisition was for cooperative societies, and therefore, Part VII of the Act was D attracted." ·

36Copy pinpoint36. The learned senior counsel further placed reliance on the decision of this Court in the case of Mandir Shree Sita Ramji v. Land Acquisition Collector & Ors. 16, wherein it 'Yas held as under: "12. We hav.e considered the submissions of both the sides. In E our view, there is no merit in the challenge to the proposed acquisition on the ground thatthe acquisition was forthe purposes of the society covered by Agreement dated 9th May, 1972. The subsequent Notification is merely a follow up of the earlier Notification. The entire acquisition is for "planned development F of Delhi". To be remembered that Appellants' land is in the midst of the 35000 acres which have been acquired pursuant to the Notification under Section 4 issued in 1959. The Agreement dated 19th May, 1972 does not specify that it is the Appellants' land which is to be allotted to that Society. The Society is to be allotted some land arid even ifAppellants' land is allotted to this Society, G after acquisition, it will not mean that the acquisition was for this Society. Therefore, the provisions of Part VII of the Land Acquisition Act need not have been complied with." ·

37Copy pinpoint37. The learned senior counsel submits that in the instant case, the mere fact that TML looked at and inspected some sites before the H 1 ' (2005) 6 sec 745

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 315 [V. GO PALA GOWDA, J .]

lands were finally acquired does not take away from the fact that the lands were, in fact, acquired in favour ofWBIDC for a public purpose. It is further submitted that the fact that the compensation amount of Rs. 138 crores was deposited by WBIDC and not by TML also keeps the acquisition of the lands in the instant case out of the purview of Part VII of the L.A. Act and the relevant Rules. It is submitted that the essential test to determine as to whether the acquisition of the lands in question is for public purpose, is whether the funds for acquisition are coming from public funds. The learned senior counsel places reliance on the Constitution Bench decision of this Court in the case of Pandit Jlumdu Lal (supra), wherein it was held as under: "Section 6 is, in terms, made subject to the provisions of Part c VII of the Act. The provisions of Part VII, read 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, D cannot be made unless the compensation, wholly or partly, is to be paid out of public funds. Therefore, in the case of ari 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 E Part VII, ifthe 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 thatthe cost of the acquisition is 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 acquis"ition for a Company is to be made at the cost entirely of the Company itself, such an acquisition comes under th·e 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, therefore, necessary to go through the procedure prescribed by Part VII. We, therefore, agree with the conclusion of the Hjgh Court, though not for the same reasons." H

316 SUPREME COURT REPORTS [2016] 11 S.C.R.

A The learned senior counsel further submits that the above position of law was reiterated by this Court more recently in the case of Pratibha Nema v. State of M.P.'7, wherein it was held as under: "Thus the distinction between public purpose acquisition and Part VJI acquisition has got blurred under the impact of judicial B interpretation ofrelevant 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 c even a trifling sum, the character and pattern ofacquisition 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, tl}at seems to be the real position."

38Copy pinpoint38. The learned senior counsel further contends that this Court has in fact, also held that it is enough if only a part of the amount comes from public funds to make the acquisition as one for public purpose. Reliance has been placed on the Constitution Bench decision of this Court in the case of Somawanti (supra), wherein it was held as under: "We would like to add that the view taken in Senja Naicken's case I.L.R. (1926) Mad. 308 has been followed by the various F High Courts of India. On the basis of the correctness of that view the State Governments have been acquiring private properties all over the country by contributing only token amounts towards the cost of acquisition. Titles to many such properties would be unsettled if we were now to take the view that 'partly at public expense' means substantially at public expense. ·G therefore, on the principle of stare decisis the vi·ew takenjn Senja Naicken's case l.L.R. (1926) Mad. 308 should not be disturbed. We would, however, guard ourselves against being understood to say that a token contribution by the State towards the cost of acquisition will be sufficient compliance with the law in each H " (2003) 1o sec 626

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 317 [V. GOPALA GOWDA, J.]

and every case. Whether such contribution meets the requirements of the law would depend upon the facts of every case. Indeed the fact that the State's contribution is nominal may well indicate, in particular circumstances that the action of the State was a colourable exercise of power. In our opinion 'part' does not necessarily mean a substantial part and that it will be open to the Court in every case which comes up before it to examine.whether the contribution made by the state_ satisfies the requirement of the law."

39Copy pinpoint39. It is further submitted that the __said position was reiterated by this Court in the case of Jage Ram (supra), wherein it was held that a contribution of Rs. I 00/- by the State Government was sufficient to take c the acquisition of land outside the purview of Part VII of the L.A. Act.

40Copy pinpoint40. The learned senior counsel further contends that the cabinet meeting and cabinet memo do not substitute the notification under Section 4 of the L.A. Act, as well as the~rquiry by the Land Acquisition Collecto_r. It is submitted that even after the cabinet approval, it was upon the Land D Acquisition Collector to survey and decide whether the lands in question can be acquired for that r;>articular purpose or not. The discretion of the Land Acquisition Collector was unfettered and uncompromised. It is submitted that the inquiry of the Land Acquisition Collector was submitted in the instant case, and all the requirements as provided for under Part II E of the L.A. Act were complied with while acquiring the lands in question in the instant case.

41Copy pinpoint41. We have heard the learned counsel appearing on behalf of all the parties. Before we examine the contentions in detail and consider the matter on merits, it is important to address an issue raised by Mr. F Abhishek Manu Singhvi and Mr. Gopal Jain, theJearned senior counsel appearing on behalf of TML, that the State of West Bengal cannot be allowed to resile from the position taken by them in their pleadings, without even filing an affidavit. It is contended by them that the State of West Bengal had specifically contended before the High Court that Part VII of the L.A. Act has no application in the instant case and the acquisition G of land was one which was done in the public interest. The learned senior counsel submit that even before the Supreme Court, the State of West Bengal has stated in its counter affidavit that establishing a new industry is the public purpose as envisaged under Section 3(f) of the L.A. Act and that in the instant case, it was the state government which H

318 SUPREME COURT REPORTS f20161 11 S.C.R.

A had acquired the lands in favour ofWBIDC for the purpose of fulfilling its industrialization policy in the State of West Bengal.

42Copy pinpoint42. Dr. Abhishek Manu Singhvi, learned senior counsel very vehemently contends that the State Government of West Bengal and WBIDC cannot be allowed to change their stand before this Court in B these proceedings at the time-of arguments merely because of change of Government in the State of West Bengal after the completion of the land acquisition proceedings. It is further contended that the change of stand by the State government at this stage without filing an affidavit amounts to violation of the principles of natural justice. Strong reliance is placed by him on the decision of this Comi in the case of Jal Malta/ c Resort (P) Ltd. v. K.P. S/wrma 1' in this regard.

43Copy pinpoint43. Further reliance is placed by him on the decision of this Court in the case of Andltra Pradesh Dairy Development Corpn. Federation v. B. Narasimlw Ret!tly 19, wherein it was held as under:

D "40. In the matter of Government of a State, the succeeding Government is duty bound to continue and carry on the unfinished job of the previous Government, for the reason that the action is that of the "State", within the meaning of Article 12 of the Constitution, which continues to subsist and therefore, it is not required that the new Government can plead contrary from the E State action taken by the previous Government in respect of a pa1iicular subject. The State, being a continuing body can be stopped from changing its stand in a given case, but where after holding enquiry it came to the conclusion that action was not in conformity with law, the doctrine of estoppel would not apply. F Thus, unless the act done by the previous Government is found to be contrary to the statutory provisions, unreasonable or against policy, the State should not change its stand merely because the other political party has come into power. "Political agenda of an individual or a political party should not be subversive ofrule of law". The Government has to rise above the nexus of vested G interest and nepotism etc. as the principles of governance have to be tested on the touchstone of justice, equity and fair _pley. The decision must be taken in good faith and must be legitimate." Reliance is also placed by him on the decision of this Court in the case of 1 ' (2014) s sec 804 H 1 ' (201IJ9 sec 286

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 319 [V. GOPALA GOWDA, J.]

M.L Builders Pvt. Ltd. v. Radltey Sltyam Sahu & Ors.1°, wherein it was held as under: " ...... No doubt Mahapalika is a continuing body and it will be estopped from changing its stand in the given case. But when Mahapalika finds that its action was contrary to the provisions of law by which it was constituted ther~ could certainly be no impediment in its way to change its stand. There cannot be any estoppel operating against the Mahapalika."

44Copy pinpoint44. It is further contended that State government should not be allowed to change its stand merely because some other political party has come into power after the acquisition proceedings and the legal c proceedings of the land owners were concluded in the High Court by passing the impugned common judgment and order.

45Copy pinpoint45. Mr. Rakesh Dwivedi, learned senior counsel appearing on behalf of the State of West Bengal on the other hand rebuts the above submission made by the learned senior counsel appearing on behalf of D TML. It is submitted that there is absolutely no law which mandates that upon the change of government, the stance taken earlier cannot be changed, more so, when the earlier stance is clearly opposed to both law and public policy. The learned senior counsel submits that even in the case of A.P. Dairy (supra) on which reliance has been placed upon by the learned senior counsel appe~ring on behalf ofTML, this Court has held that the state can change its stand if it is found that the act done by the previous government is contrary to provisions of law or is agairist public policy.

46Copy pinpoint46. The learned senior counsel further submits that in the instant case, having regard to the nature of acquisition of lands made by the previous Government, the lands were acquired by the State Government in exercise of its eminent domain power without following the statutory provisions contained in Sections 3(f), 4 and 6 of the L.A. Act as well as Part VII of the L.A. Act. It is submitted that the previous government of the state has violated statutory provisions of the L.A. Act in acquiring the vast extent of lands having immense agricultural potential, thus depriving the agricultural occupation of a large number of land owners/ cultivators, thereby depriving them oftheir constitutional and fundamental rights guaranteed under the Constitution oflndia. lt is submitted thatthe acquisition of the lands in the instant case has bee11 made at the instance '" (I 999) 6 sec 464 H

320 SUPREME COURT REPORTS [2016] 11 S.C.R.

A of TML. Therefore, the previous Government has violated the law in acquiring the lands. It is submitted that the stand of the present government becomes clear from the fact that it enacted the Singur Act, 2011, the constitutional validity of which has been challenged by TML by way of filing petitions, which were allowed by the High Court, against which judgment, the State Government filed SLPs which are currently pending B before this Court. Therefore, the State GovernllJent has changed its stand in not justifying the acquisition proceedings. 4 7. We are unable to agree with the contentions advanced by the learned senior counsel appearing on behalf ofTML. While it is true that rule oflaw cannot be sacrificed for the sake of furthering political agendas, c it is also a well established position oflaw that a stand taken by the state government can be changed subsequently ifthere is material on record to show that the earlier action of the acquisition cif lands by the State Government was illegal or suffers from legal malafides or colourable exercise of power.

48Copy pinpoint48. Further, in any case, it is also well settled position oflaw that this Court is not bound by affidavits and counter affidavits filed by the parties. In exercise of its powerunder Article 136 of the Constitution of India, this Court can examine the material on record in order to determine whether the action of the previous state government in acquiring the lands in the instant case was in accordance with law or not. In the case of P.S.R. Sada11atltam v. Arimaclwlam11 , a Constitution Bench of this Court held as under: "7 .......... In express terms, Article 136 does not confer a right of appeal on a party as such but it confers a wide discretionary power on the Supreme Court to interfere in suitable cases. The discretionary dimension is considerable but that relates to the power of the court~The question is whether it spells by implication, a fair procedure as contemplated by Article 21. In our view, it does. Article 1:fo is a special jurisdiction. It is residuary power; it is extraordinary in its amplitude. its limit, when it chases injustice, in the sky itself. This Court functionally fulfils itself by reaching out to injustice wherever it is and this power is largely derived in the common run of cases from Art 136 ............ " (emphasis laid by this Court)

H " (1980) 3 sec 141

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 321 [V. GOPALA GOWDA, J.]

In the instant case, the cabinet records, communication between TML A and representative of the State Government, the notifications published under Sections 4 and 6 of the L.A. Act are all on record. We shall examine the same to assess the validity of the acquisition of the lands in these proceedings.

49Copy pinpoint49. The above said preliminary objection, as has been raised by the learned senior counsel appearing on behalf of TML is thus, not accepted. We now proceed to decide the matter on merits.

50Copy pinpoint50. On the basis of the factual and rival legal contentions advanced on behalf of the learned counsel appearing on behalf of the parties as well as the material produced on record and from perusal of the original files, the following points would arise for consideration of this Court: I. Whether the lands involved in these proceedings have been acquired for a public purpose or for a Company (TML)?

2. If the lands have been acquired for a Company, whether the procedure provided for under Part VII of the L.A. Act has been complied with by the state government?

3. Whether the inquiry as contemplated under Section 5-A(2) of the L.A. Act has been duly conducted by the Land Acquisition Collector?

4. Whether the Land Acquisition Collector has assigned reasons in his report for rejecting the objections raised by the landowners/cultivators after application of mind?

5. Whether the report of the Land Acquisition Collector is based on the decision of the State Government taken prior to issuing notification under Section 6 of the L.A. Act? F

6. Whether the awards have been passed after holding due inquiry under Section 9 of the L.A. Act and also in compliance with the principles of natural justice?

7. Whether the compensation awarded in favour of the land owners/ cultivators is based on a proper appreciation of the market value of the G land?

8. What is the legal effect on the acquisition proceedings of not conducting an inquiry under Section 5-A (2) and passing composite awards under Section 11 of the L.A. Act?

9. What order can be passed in these proceedings at this stage? H

322 SUPREME COURT REPORTS r20161 11 S.C.R.

A Answer to Po;nt .~os. 1 and 2

51Copy pinpoint51. Issue Nos. I and 2 are inter-related, hence, they are answered together as under: Section 3(f) of the Act defines acquisition ofland for 'public purpose' by the State Government, which reads thus: B "3(f) the expression "public purpose' includes-

(iii) the provision ofland for planned development of land from public funds in pursuance ofany scheme or policy ofGovemment C and subsequent disposal tflereof 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; D

(vi) the provision ofland 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 E Government, by a local authority, or 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, 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; F (vii) the provision of land for any other scheme of development sponsored by Government or. with the prior approval of the rumropriate Government, by a local authority;

G but does not include acquisition oflands for Companies" (emphasis laid by this Court) The definition of the term 'Company' was inserted in the definition of Section 3(e) of the L.A. Act by Act 68 of 1984 with effect from 24.09.1984. Section 3(e) of the L.A. Act defines a company as: H

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 323 [V. GO PALA GOWDA, J .]

"(i) a company as defined in Section 3 of the Companies Act, A 1956 (I of 19560 other than a Government Company referred to incl.(cc) "

52Copy pinpoint52. Section 3(t) of the L.A. Act, which defines what public purpose B is for the purpose of acquisition of land, clearly indicates that the acquisition ofland for companies is not covered within the public purpose. It is in light of this statutory scheme under the provisions of the L.A. Act that it becomes crucial to examine whether the lands in question were acquired for a public purpose or was it acquired by the State Government for a company (TML) in the instant case. c

53Copy pinpoint53. A perusal of the notification issued under Sectfon 4(1) of the L.A. Act extracted supra clearly shows that the proposed lands in the notification are needed for the setting up of the Tata Smal 1Car project in mouza Berabery, P.S. Singur, District Hooghly.

54Copy pinpoint54. The Cabinet Memo dated 30.05.2006, extracted supra, at D Serial No. 3 mentioned acquisition of lands measuring I 053 acres by WBIDC for the purpose of setting up of the Tata Motor's 'Small Car Project' in the State of West Bengal. The said Cabinet Memo received the approval of the Chief Minister on 05.06.2006 after which the notification under Section 4 of the L.A. Act was published in the official gazette.

55Copy pinpoint55. As far as the proposal is concerned, there is nothing on record to indicate that WBIDC made such requisition to the State Government giving its proposal for acquisition of the proposed lands mentioned in the notification issued under Section 4 of the L.A. Act, which are required for 'public purpose' as defined under Section 3(t) (iii) of the L.A. Act, which enables the WBIDC to give requisition for acquiring the lands in its favour for the planned development of land out of the public funds in pursuance of any scheme or policy of Government. As is evident from the Notifications issued under the L.A. Act and from the cabinet memo, there is no mention about such requisition being made by the Corporation G to the State Government regarding the proposed lands being required for acquisition in favour ofWBIDC for planned development ofland in pursuance of any scheme or policy of the Government. Even from a perusal of the letter dated 29.08.2006, written by the Joint Secretary, Land and Land Reforms Department, Government of West Bengal, it H

324 SUPREME COURT REPORTS r2016l 1l S.C.R.

A becomes clear that the state government did not apply its mind while considering the need of the land and merely followed the document on which the Collector had signed. It reads as under: "It is clear from the report and records relating to the proceedings u/s SA of the L.A. Act, 1894 received from the L.A. Collector B after disposal of objections from the persons having rights and interest in land in the Berabari and Khaserbari mouzas ofSingur PS where 6 LA cases comprising for setting up Tata Small Car Project have been initiated, that the Collector did not find any objection having merits for change/ modification of the area within the conceived area of acquisition and he has recommended the c land covered u/s 4 notification in the aforesaid mouzas are fit for acquisition for the public purpose on behalf ofWBIDC, the RB. On perusal of the reports and records we may agree to the above recommendation of the Collector and issue declaration u/s/ 6 as prescribed in the aforesaid Act." D The letter of the Joint Secretary mentions the WBIDC to be the requisitioning body. However, the same finds no mention in the notification issued under Section 6 of the L.A. Act, the relevant portion of which has been extracted supra.

56Copy pinpoint56. Even ifthe argument advanced on behalf ofTML were to be accepted, that it was the policy of the state government to generate employment and increase socio economic development in the State, the relevant policy documents are not forthcoming in the original acquisition files which were made available for this Court. Thus, by no stretch of imagination can the acquisition oflands in the instant case be said to be at the instance of WBIDC, or for the fulfilment of some scheme of the Corporation or the State Government. Thus, it cannot be said to attract Section 3(f)(iii), (iv) or (vi) either. On the contrary, what is on record is the minutes of meetings between the representatives of the West Bengal Government and TML dated 17.03.2006, which state that TML is interested in setting up a 'special category project' in the State to manufacture 2,50,000 units for its' Small Car Project'. As perthe project requirement mentioned in the letter written by Deputy General Manager TML to the Principal Secretary, Commerce & Industries Department, Government of West Bengal dated 19.01.2006, 400 acres of land were required for setting up of the factory, 200 acres for vendor park and I 00 H acres for township. The said letter was forwarded by the Commerce

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 325 [V. GOPALA GOWDA, J.]

and Industries Department to the Principal Secretary, Land and La.nd A Reforms Department on 24.01.2006 and the Finance Secretary for their consideration and seeking their views in this regard. It is undisputed fact that the State Government has not deposited the public money towards the cost of acquisition ofland to initiate the acquisition proceedings to show that the acquisition oflands is for public purpose which is an essential B requirement under the provision of Section 6 of the L.A. Act. As can be seen, the notification issued under Section 6 of the L.A. Act merely provides that the land is needed for the setting up of the Tata Small Car project, which is a public purpose under the L.A. Act. ln the case of Usha Stud and Agricultural Farms Pvt. Ltd. " State of Haryana & Ors. 22, a three judge bench of this Court, after adverting to a catena of c case law on the subject held as under: "The ratio of the aforesaid judgments is that Section 5-A{2), which represents statutory embpdiment of the rule ofaudi alteram partem, gives an opportunity to the objector to make an endeavour to convince the Collector that his land is not required for the public purpose specified in the notification issued under Section 4( 1) or that there are other valid reasonS"for not acquiring the same. That section also makes it obligatory for the Collector to submit report(s) to the appropriate Government containing his recommendations on the objections, together with the record of the proceedings held by him so that the Government may take appropriate decision on the objections. Section 6( I) provides that ifthe appropriate Government is satisfied, after considering the report, if any, made by the Collector under Section 5-A that particular land is needed for the specified public purpose then a declaration should be made. This necessarily implies that the F State Government is required to apply mind to the report of the Collector and take final decision on the objections filed by the landowners and other interested persons. Then and then only, a declaration can be made under Section 6( !). " (emphasis laid by this Court) G Thus, there seems to be no application of mind either at the stage of issuance of the notification under Section 4 of the L.A. Act, or the report of Collector under Section 5-A(2) of the L.A. Act or the issuance of the final notification under Section 6 of the L.A. Act. Such an acquisition, if 22 (2013) 4 sec 210 H

326 SUPREME COURT REPORTS [2016] 11 S.C.R.

A . allowed to sustain, would lead to the attempt to justify any and every acquisition of land of the most vulnerable sections of the society in the name of 'public purpose' to promote socio-economic development.

57Copy pinpoint57. On the other hand, it is the Corporation which has raised the cost of acquisition by way of taking loan from nationalized banks and the B same is said to have been deposited with the State Government. As has rightly been contended by Mr. Kalyan Banerjee, learned senior counsel by placing reliance on various decisions of this Court, which have been adverted to supra, WBIDC cannot even be said to be a local authority for the purpose of the L.A. Act and therefore the deposit of money towards acquisition cost does not satisfy the statutory requirement under c Section 6 of the Act. Thus, the contention advanced by the learned senior counsel appearing on behalf of TML that the acquisition in the instant case is one for public purpose as the funds for same have come from public revenue, also cannot be accepted. Thus, neither there is a scheme of the Government, nor the funds have been derived from the public revenue and that is why the acquisition in the instant case "'"nnot be said to be one for 'public purpose'.

58Copy pinpoint58. The contention advanced by the learned senior counsel appearing on behalf of TML that this Court has consistently taken the view that acquisition in favour of a statutory corporation or development authority for land development including industrial development, makes the acquisition oflands one for 'public purpose', as defined under Section 3(t) (iv) or (vii) of the L.A. Act and there is no need to follow the procedure for acquisition as laid down in Part VII of the L.A. Act, cannot be accepted by me. After the passing of the Land Acquisition Amendment Act, 1984, acquisition of land for a company is no longer covered under F 'public purpose' in view of Section 3(t)(viii) of the L.A. Act. Apart from the above statutory provisions inserted by way of an amendment the Objects and Reasons for such amendment referred to supra upon which strong reliance has been placed by Mr. Colin Gonsalves and Mr. Rakesh Dwivedi, learned senior counsel on behalf of the owners and State would G make it abundantly clear that the mandatory procedure as laid down under Part VII of the L.A. Act read with the rules framed there under was not followed by the State Government before the notifications were published.

59Copy pinpoint59. From a perusal of both the statutory provisions of the L.A. H Act as well as the case law on the subject referred to supra upon which

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 327 [V. GOPALA GOWDA, J.]

strong reliance has been rightly placed by the learned senior counsel on behalf of the owners/cultivators and State Government, it becomes clear that the state government can acquire land under the public purpose clauses (iv) and (vii) of the Act for industrial estates, housing colonies and economic parks/zones even wher_e the type of industry has been identified. So, an acquisition made for an industrial estate of a particular type of industry like small cars is permissible under the 'public purpose' for the purpose of the L.A. Act under the above clauses of Section 3 (f) of the Act. Before land could be acquired, the procedure consistent with the statutory provisions oflaw must be followed mandatorily. There is nothing in law which would support the acquisition of land for a particular Company under the guise of 'public purpose', rendering the c exception provided under Section 3(f)(viii) of the L.A. Act useless and nugatory.

60Copy pinpoint60. Jn the case of Devemler Pal Singh (supra), this Court has held that when the acquisition of land is for a public purpose, it is Part II of the L.A. Act which would apply and where the acquisition of land is D at the instance of a Company, the procedure to be adopted is laid down in Part VII of the L.A. Act. It was held as under: "40. Distinction between acquisition under Part IJ and Part VII are self- evident. The State was not only obligated to is~:.;e a notification clearly stating as to whether the acquisition is for a E public purpose or for the company. Section 6 categorically states so, as would appear from the second proviso appended thereto.

41. A declaration is to be made either for a public purpose or for a company. It cannot be for both.

42. It is furthermore trite that Land Acquisition Act is an F expropriato1y legislation. (See Hindustan Petroleum Corporation Ltd. v. Darius Shapur Chenai and Ors.; and Chairman, Indore Vikas Pradhikaran v. Pure Industrial Cock & Chem. Ltd. and Ors.)

43. Expropriatory legislation, as is well-known, must be strictly G construed. When the properties of a citizen is being compulsorily acquired by a State in exercise of its power of Eminent Domain, the essential ingredients thereof, namely. existence of a public purpose and payment of compensation are principal requisites therefore. In the case of acquisition ofland for a private company. H

328 SUPREME COURT REPORTS [2016] 11 S.C.R.

A existence of a public pumose being not a requisite criteria, other statutory requirements call for strict compliance, being imperative in character." (emphasis laid by this Court) , 61. The decisions of this Court in the cases of Pandit J/umdu B Lal (supra), Sonwwanti (supra), Jage Ram (supra) and Ajlatoo11 (supra) upon which strong reliance has been placed by the learned senior counsel appearing on behalf ofTML, have no bearing on the facts of the instant case, as they were decided prior to the enactment of the Land Acquisition (Amendment) Act, 1984, except the decision of this Co mt in the case of c Pratibha Nema (supra).

62Copy pinpoint62. In the case of Pratiblw Nema, this Court did not consider the statement of objects and reasons of the Land Acquisition (Amendment) Act, 1984, the relevant portion of which has been extracted supra. Further, the fact situation in that case was also very different as this Court was dealing with acquisition ofland for the purpose of setting up a 'diamond park' pursuant to the policy decision by the state government of Madhya Pradesh.

63Copy pinpoint63. In this day and age of fast paced development, it is completely understandable for the state government to want to acquire lands to set up industrial units. What, however, cannot be lost sight of is the fact that when the brunt of this 'development' is borne by the weakest sections of the society, more so, poor agricultural workers who have no means of raising a voice against the action of the mighty state government, as is the case in the instant fact situation, it is the onerous duty of the state Government to ensure that the mandatory procedure laid down under the L.A. Act and the Rules framed there under are followed scrupulously otherwise the acquisition proceedings will be rendered void ab initio in law. Compliance with the provisions of the L.A. Act cannot be treated as an empty formality by the State Government, as that would be akin to handing over the eminent domain power of State to the executive, which cannot be permitted in a democratic country which is required to be governed by the rule of law. This Court in the case of State ofPunjab v. Gurdial Singh 2-', has held with regard to the legal mala tides as under: "9. The question, then, is what is mala tides in the jurisprudence of power? Legal malice is gibberish unless juristic clarity keeps H " AIR 1980 SC 318

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 329 [V. GOPALA GOWDA, J.]

it separate from the popular concept of personal vice. Pithily A put, bad faith which invalidates the exercise of power-sometimes called colourable exercise or fraud on power and oftentimes overlaps motives, passions and satisfactions-is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal. If the use of the power is B for the fulfillment of a legitimate object the actuation or catalysation by malice is not legicidal. The action is bad where the true object is to reach an end different from the one for which the power is entrusted. goaded by extraneous considerations. good or bad. but irrelevant to the entrustment. When the custodian of power is influenced in its exercise by c considerations outside those for promotion of which the power is vested the court calls it a colourable exercise and is undeceived by illusion. In a broad, blurred sense, Benjamin Disraeli was not off the mark even in Law when he stated: "I repeat...that all power is a trust-that we are accountable for its exercise-that, from the people, and for the people, all springs, and all must exist". Fraud on power voids the order if it is not exercised bona fide for the end designed. Fraud in this context is not equal to moral turpitude and embraces all cases in which the action impugned is to effect some object which is beyond the purnose and intent of the power. whether this be malice- laden or even benign. If the purpose is corrupt the resultant act is bad. If considerations, foreign to the scope of the power or extraneous to the statute, enter the verdict or impel the action, mala fides or fraud on power. vitiates the acquisition or other official act." (emphasis laid by this Court) F In the case of S. Pratap Sinl(h v. St(lfe ofPunJab 24 , a constitution bench of this Court has held that: "In legal parlance it would be a case of a fraud on a power, .. though no corrupt motive or bargain is imputed. In this sense, if it could be shown that an authority exercising a power has taken G into account - it may even be bona fide and with the best of intention,- as a relevant factor something which it could not properly take into account, in deciding whether or not to exercise the power or the manner or extent to which it should be exercised, " AIR 1964 SC 72 H

330 SUPREME COURT REPORTS [2016] 11 S.C.R.

32. This rule has since been approved by this Court in Rao Shiv Bahadur Singh and Anr. v. State of Vindhya Pradesh and again in Deep Chand v. State of Rajasthan. These cases were considered by a Three-Judge Bench of this Court in State of Uttar Pradesh v. Singhara Singh and Ors. and the rule laid down in Nazir Ahmad's case (supra) was again upheld. This rule has since been applied to the exercise of jurisdiction by courts and has also been recognized as a salutary principle of administrative law." (emphasis laid by this Court) H " (1999) 3 sec 422

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 331 [V. GOPALA GOWDA, J.]

64Copy pinpoint64. In the instant case, what makes the acquisition proceedings perverse is not the fact that the lands were needed for setting up of an automobile industry, which would help to generate employment as well as promote socio economic development in the State, but what makes the acquisition proceedings perverse is that the proper procedure as laid down under Part VII of the L.A. Act read with Rules was not followed by the State Government. The acquisition ofland for and at the instance of the company was sought to be disguised as acquisition of land for 'public purpose' in order to circumvent compliance with the mandatory provisions of Part VII of the L.A. Act. This action of the State Government is grossly perverse and illegal and void ab initio in law and such an exercise of power by the state government for acquisition of c lands cannot be allowed under any circumstance. If such acquisitions of lands are permitted, it would render entire Part VII of the L.A. Act as nugatory and redundant, as then virtually every acquisition of land in favour of a company could be justified as one for a 'pub_lic purpose' on the ground that the setting up of industry would generate employment and promote socio economic development in the State. Surely, that could not have been the intention of the legislature in providing the provisions of Part VII read with 3 (t) of the L.A. Act. From a perusal of the materials on record from the original files, the relevant extracts from the letters addressed by TML to the State Government of West Bengal and Cabinet notes which have been extracted and discussed supra, it becomes clear that in the instant case, the lands in question were acquired by the State Government for a particular Company (TML), at the instance of that Company. Further, the exact location and site of the land was also identified by TML. Even the notifications issued under Sections 4 and 6 of the L.A. Act clearly state that the land in question was being acquired for the 'Small Car Project' ofTML. In view of the foregoing reasons, by no stretch of imagination can such an acquisition of lands be held to be one for 'public purpose' and not for a company. If the acquisition of lands in the instant case does not amount to one for the company, I ~o not know what would. v

65Copy pinpoint65. In view of the aforesaid categorical findings recorded by me based on the materials on record, jncluding cabinet memo, minutes of meetings between representatives of the state government and TML as well as the notifications issued under Sections 4 and 6 of the L.A. Act, 1984, it is clear that the acquisition of lands in the instant case is for the H

332 SUPREME COURT REPORTS r2016111 s.c.R.

A Company (TML). Admittedly, the procedure for acquisition as contemplated under Sections 39, 40 and 41 of Part VII of the L.A. Act read with Rules 3, 4 and 5 of the Land Acquisition (Companies) Rules, 1963 has not been followed, as the acquisition was sought to be guised as one for 'public purpose' under Sections 3(t) (iii), (iv) and (vii) of the L.A. Act. The acquisition of land in the instant case in favour of the B Company is thus, improper for not following the mandatory procedure prescribed under Part VII of the L.A. Act and Rules and therefore the acquisition proceedings are liable to be quashed.

66Copy pinpoint66. Further, even after the lands were acquired in its favour, TML could not start operations in accordance with the terms of the lease c deed. The same becomes clear from a perusal of the letter dated 28.09.2010 written by the Managing Director, India Operations ofTML to the Managing Director ofWB~DC, which reads as under: "We had proposed an integrated Automobile Plant consisting of manufacturing operations by Tata Motors as well as co-locating vendors in the same complex.You were kind enough to lease 645 acres to Tata Motors and 290 acres to vendors as recommended by Tata Motors ..... . We, therefore, concluded that a peaceful environment could not be created for normal working of the plant and we had to take the most painful decision to close the operations on 3'd October,

2008. Meanwhile, we also took permission from you to remove our equioment and machinery, which we have now done. We, invested Rs. 440 crores and of course continue to incur Rs. 1 crore per month towards maintenance. Th is is an addition to the investment of about Rs. 171 crores (inclusive of Rs. 40 crores for land premium charges) done by our vendors.

We have also had discussions with the Hon'ble Industry Minister as well as with the Industry Secretary for finding various alternative uses for this plant. In this respect, we would like to submit that we could also consider the option of moving out from the premises provided we and our vendors are compensated for the cost of the buildings, sheds on the premises aii.d expenses incurred in developing the infrastructure which remains on the premises. H

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 333 [V. GOPALA GOWDA, J.]

Thus, it is an undisputed fact that even once the cost of acquisition was A borne by WBIDC by way of raising loan from banks, TML did not start operations and held on to the possession of the land. It did not engage in any other manufacturing activity either. Subsequently, TML also removed the machinery from the concerned plant and shifted the same to the state of Gujarat and the lands in question have since been resumed by B WBIDC.

67Copy pinpoint67. In view of the foregoing reasons, Point Nos. I and 2 are answered in favour of the land owners/cultivators. Answer to Point Nos. 3, 4 and 5

68Copy pinpoint68. From a perusal of the materials on record and original c acquisition files, it is evident that a large nmnber of objections were filed by the land owners before the notification was issued under Section 4 of the L.A. Act. The same were not considered properly under Section S- A (2) of the L.A. Act. Notices were issued to the objectors individually but the same could not be served upon the owners/cultivators of the proposed lands to be acquired. It is fu1iher mentioned in the record that the announcements were made through loudspeakers and by publications in the newspapers. It has been submitted by Mr. Rakesh Dwivedi, learned senior counsel appearing on behalf of the State of West Bengal that once a decision was takei1 to serve the land owners/cultivators individually then it should have been ensured by the Land Acquisition Collector that the notices were so served. However, the fact that the same was not done is evident from a perusal of the acquis.ition files maintained by the State Government. Even though the land owners/cultivators did not appear before the Land Acquisition Collector, the objections filed by them ought to have been considered objectively by him as required under Section 5-A (2) of the L.A. Act. Additionally, seven objections were filed under Section 5- A itself a1.d some of the objections pertained to persons who were already running industrial units. The names of the objectors are as follows: " G I. Kuldip Maity ofBeraberi, P.S. Singur;

2. Subir Kumar Pal, Director of M/s Shree Bhumi Steel Pvt. Ltd., P.S. Singur;

3. Mis. Shanti Ceramics Pvt. Ltd., P.S. Singur; H

334 SUPREME COURT REPORTS f20161 11 S.C.R.

A 4. Prashanta Kumar Jana, Vill-Habaspota, Singur;

5. Mis. Ajit Services Station on behalf ofTapan Kumar Bera, Advocate;

6. Mis. Shree Padma Sagar Exports Pvt. Ltd. of Singherbheri, P.S. Singur" B

69Copy pinpoint69. Some of these objectors were not given the opportunity to be heard as required under Section 5-A (2) of the L.A. Act. The same ought to have been given to them as required both under the statutory provisions of the L.A. Act as well as the principles of natural justice, as the acquisition of lands of the objectors would entail a serious civil consequence. In the case of Mandir Sltri Sita Ramii v. Lt. Governor of Delhi26, a Constitution Bench of this Court has held that it is the mandatory duty cast upon the Collector to follow the provision of Section 5-A (2) of the L.A. Act as under: .~

"5. The learned Single Judge allowed the writ petition on the basis that the appellant had no opportunitv of being heard by the Collector under Section 5-A. The duty to afford such an opportunity is mandatory. A decision by the Government on the 'objection, when the Collector afforded no opportunity of being heard to the objector. would not be proper. The power to hear the objection under Section 5-A is that of the Collector and not of the appropriate Government. It is no doubt true that the recommendation of the Land Acquisition Collector is not binding on the Government. The Government may choose either to accept the recommendation or to reject it; but the requirement of the section is that when a person's property is proposed to be acquired, he must be given an opportunity to show cause against ·it. Merely because the Government may not choose to accept the recommendation of the Land Acquisition Collector, even when he makes one, it c~nnot be said that he need not make the recommendation at all but leave it to the Government to decide the matter. In other words, the fact that the Collector is not the authority to decide the objection does not exonerate him from his duty to hear the objector on the -objection and make the recommendation." '(emphasis laid by this Court) .. H " (1975) 4 sec i9s

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 335 [V. GOPALA GOWDA, J.]

70Copy pinpoint70. In the case of Babu Ram v. State of Haryana 27, this Court A observed as under: "30. As indicated hereinabove in the various cases cited by Mr. Pradip Ghosh and, in particular, the decision in Krishnan Lal Arneja case, in which reference has been made to the observations made by this Court in Om Prakash case, it has B been emphasized that a right under Section 5-A is not merely statutory but also has the flavour of fundamental rjghts tinder Articles 14 and 19 ofthe Constitution. Such observations.had been made in reference to an observation made in the earlier . decision in Gurdlal Singh case and k~eping in mind the fact that right to property was no longer fundamental right, an observation c a was made that even if the right to property was no longer a fundamental right, the observations relating to Article 14 would continue to apply in full force with regard to Section 5-A of th~ L.A. Act." (emphasis laid by this Court) D From a perusal of the proceedings before the Collector, which are made available to this Court, it becomes clear that the same have been rejected without assigning any clear reasons or application of mind ., .

71Copy pinpoint71. Thus, the report of the Collector is not a valid report in 1he E eyes oflaw. The State Government has mechanically accepted the same '· without application of mind independently before issuing notification under Section 6 of the L.A. Act declaring that th~ lands are required for establishment of automobile industry by TML. Therefore, the point nos. 3, 4 and 5 are answered against the Stak Government and in favour of the land owners/cultivators. F Answer to Point Nos. 6, 7 and 8

72Copy pinpoint72. After issuing the notifications under Section 6 of the L.A. Act declaring that the lands have been acquired for the purpose of industrial development, a statutory duty is cast upon the Collector to issue notice G to the land owners/cultivators, as required under Section 9 of the L.A. Act, to determine tht; market·value of the acquired land and ..award compensation a~ r_equired under Seetion 11 of the L.A. A~t which ts· mandatory for taking possession ofthe land by the State Gove01ment. · 21 (2009) 1o sec 115 H

336 SUPREME COURT REPORTS f2016111 S.C.R.

73Copy pinpoint73. As can be seen from material on record, no individual notices were served upon the land owners/cultivators. A joint inquiry appears to have been conducted by the Land Acquisition Collector without giving them an adequate opportunity to establish their claim for determination of reasonable compensation for acquisition of lands by presenting true and correct market value of the lands. The determination of market B value of lands by clubbing a number of cases together and passing a composite award is no award in the eyes of law. The inquiry, as contempiated under Section 11 of the L.A. Act, is a quasi judicial exercis(~ of power on the part of the Collector in awarding just and reasonable compensation to the landowners/cultivators. That has not been done in c the instant case. Further, the proviso to Section 11 ( 1) of the L.A. Act provides that no award shall be made by the collector without the previous approval of either the appropriate government or such. officer authorised by it for the above purpose. It was also brought to the notice of this Court that supplementary awards were also passed which is not legally permissible in law. For non-compliance of the above provisions of the D L.A. Act, the composite awards are vitiated in law and therefore, the same are also liable to be quashed.

74Copy pinpoint74. Accordingly, the point nos. 6, 7 and 8 are answered in favour of the land owners.

E ARUN MISHRA, J. 1. Leave granted.

2. I have gone through the draft judgment, however I find myself unable to agree with the same except on points for determination nos. 3, 4 and 5 framed bfesteemed brother for the reasons mentioned hereinafter. Since esteemed Brother has taken pains to elaborate the F facts and submissions in detail they need not be restated. IN RE. QUESTION NOS. 1 AND 2

3. Question Nos. I and 2 are inter-related and the main question for consideration is whether the acquisition of land is for a company and ·if so procedure provided under Part VII of the Land Acquisition Act, G 1894 (hereinafter referred to as "the Act") is required to be complied with by the State Government.

4. "Public purpose" has been defined in section 3(f) of the Land Acquisition Act. The definition is inclusive and the Amendment Act, 1984 excludes the acquisition for company from the definition of"public H purpose". Acquisition of land for company has bten dealt with under

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 337 [ARUN MISHRA, J.]

Part VII of the Act. Under section 39 previous consent of the appropriate A Government and execution of agreement is necessary for acquiring land for a company. Both sections 6 to 16 and sections 18 to 3 7 shall not be used to acquire land for any company under Part VII unless the previous consent of the appropriate Government has been obtained and company has executed the agreement as provided in section 41 of the Act. Section B 41 further provides that in the case of acquisition for a company the payment of the cost of acquisition has to be borne by the company and other matters as specified in section 41 are also to be provided in the agreement. Such an agreement is required to be published in the Official Gazette and a statutory force is given to its terms on which the public shall be entitled to use the work. c

5. Section 3(f) though excludes the acquisition for a company. However, at the same time it is inclusive definition and it is provided in section 3(f) that it includes the provision for development of land from public funds in pursuance of any scheme or policy (~f the Government and subsequent disposal thereof in whole or in pati by lease, assignment or outright sale with the object of securing further development as planned. Public purpose in section 3(iv) also includ~ the provision of land for a corporation owned or contra lied by the State. The west Bengal Industrial Corporation is established by the State.

6. Public purpose has to be adjudged in the background of the facts of the instant case and the State of West Bengal decided to make effort to establish manufacturing industries with a view to attract more private sector investment and foreign direct investment for industrialization at par with the model adopted by other progressive States. It has considered the offer of TML - manufacturer of Nano car - as an opportunity for establishing manufacturing industry so as to further grab attention ofautomobile industry in the State of West Bengal to boost its economy for creating job oppo1iunities, direct and indirect impact on secondary employment in the associated services. The proceedings were initiated under the Land Acquisition Act and the West Bengal Industrial Development Corporation (WBIDC) was the acquiring body which bore the entire cost of acquisition. Section 6 of the Act is extracted hereunder : "6. Declaration that land is required for a public purpose.- (I) Subject to the provisions of Pati VII of this Act, when the appropriate Government is satisfi~d after H

338 SUPREME COURT REPORTS f20161'1 l S.C.R.

A considering the repon, 1f any, made under section SA, sub- section (2), that any .particular land is needed for a public purpose, or for a Company, a declaration shall be made to tllat effect under the signature of a Secretary to such Government or of some officer duly authorised to certify. its orders, ·and different declarations may be made from time to time in respect B of different parcels of any land covered by the same notification under section 4, sub-section (I), irrespective of whether one report or different reports has or have been made (wherever required) under section SA, sub-section (2): Provided that no declaration in respect of any particular land c covered by a notification under section 4, sub-section (I),- (i) published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967 (1 of 1967) but before the commencement of the Land Acquisition (Amendment) Act, 1984 68of1984) shall be made after the expi1y 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. F [Explanation I .-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 (I), is stayed by an order of a Court shall be excluded. G [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 .,H Gazette, [and in two daily newspapers circulating in the locality

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 339 [ARUN MISHRA, J.]

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 c case may be; and, after making such declaration the [appropriate Government] may acquire the land in a manner hereinafter appearing." It is apparent from the provisions contained in second proviso to section 6 that declaration under section 6 shall not be made unless the compensation to be awarded for such property is to be paid by a company either wholly or partly out of pub I ic revenues or some fund controlled or managed by a local authority. The Explanation second to section 6( I) of the Act makes it clear that where the compensation awarded for the property is to be paid out of funds of a corporation owned or controlled by the State, such coinpensation shall be deemed to be compensation paid out of public revenue. Thus Explanation second makes it clear that when corporation pays the funds for acquisition of the property that such compensation shall be deemed to be paid out of public revenue. As already mentioned above the acquisition for a corporation is indeed within the public purpose as defined in section 3(f)(iv). Thus the concept of funds in section 6 as amended in 1984 comes into play in the case of acquisition of a land for a corporation and it is not necessary that the State Government itself should bearthe cost ofacquisition so as to make it expenditure out of public revenue even expenditure by the corporation owned or controlled by the State for acquisition shall be deemed to be made out of public revenues and when the land had been acquired fot a corporation the land is to be vested in the Corporation though lease of the land has been granted to the company - Tata Motors Ltd., for short TML- for its aforesaid project. In my opinion it would remain acquisition for a public purpose as provided in section 3(1) of the Act; as also opined in the various decisions to be adverted hereinafter of this Court. H

340 SUPREME COURT REPORTS f2016l l l S.C.R.

A 7. Acquisition of land for establishing such an industry would ultimately benefit the people and the very purpose of industrialization, generating job opportunities hence it would be open to the State Government to invoke the provisions of Part II of the Act. When Government wants to attract the investment, create job oppo1iunities and aims at the development of the State and secondary development, B job opportunities, such acquisition is permissible for public purpose.

8. In So111airn111i v. State of Punjab AIR 1963 SC 151, the concept of"public purpose" has been considered by this Court as under: "53. '"Public Purpose" as explained by this Court in c Babu Barkaya Thakur case ( 1961) 1 SCR 128 : AIR 1960 SC 1203 means a purpose which is beneficial to the community. But whether a particular purpose is beneficial or is likely to be beneficial to the community or not is a matter primarily for the satisfaction of the State Government. In the notification under Section 6( 1) it has been stated that the land is being acquired for D a public purpose, namely, for setting up a factory for manufacturing various ranges of refrigeration compressors and ancillary equipment. It was vehemently argued before us that manufacture of refrigeration equipment cannot be regarded as beneficial to the community in the real sense of the word and that such equipment wi II at the most enable articles of luxury to be produced. But the State Government has taken the view that the manufacture of these articles is for the benefit of the community. No materials have been placed before us from which we could infer that the view of the Government is perverse or that its action based on it constitutes a fraud on its power to acquire land or is a colourable exercise by it of such power.

54. Fmiher, the notification itself sets out the purpose for which the land is being acquired. That purpose, if we may recall, is to set up a factory for the manufacture of refrigeration compressors and ancillary equipment. The importance of this undertaking to a State such as the Punjab which has a surplus of fruit, dairy products etc. the general effect of the establishment of this factory on foreign exchange resources, spread of education, relieving the pressure on unemployment etc. have been set out in the affidavit of the respondent and their substance H

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 341 [ARUN MISHRA, J.]

appears in the earlier pat1 of this judgment. The affidavits have A not been controverted and we have, therefore, no hesitation in acting upon them."

9. fn Jage Ram & Ors. v. State of Haryana & Ors. (1971) I SCC 671, this Court held that setting up of a factory for purpose of manufacture of Ch in a-ware and Porcelain-ware including wall Glazed B Tiles was a public purpose. This Court has held thus: "8. There is no denying the fact that starting of a new industry is in public interest. It is stated in the affidavit filed on behalfofthe State Government that the new State of Haryana was lacking in industries and consequently it had become difficult to tackle the c problem of unemployment. There is also no denying the fact that the industrialisation of an area is in public interest. That apart, the question whether the starting of an industry is in public interest or not is essentially a question that has to be decided by the Government. That is a socio-economic question. This Court is not in a position to go into that question. So long as it is not established that the acquisition is sought to be made for some co !lateral purpose, the declaration of the Government that it is made for a public purpose is not open to challenge. Section 6(3) says that the declaration of the Government that the acquisition made is for public purpose shall be conclusive evidence that the land is needed for a public purpose. Unless it is shown that there was a colourable exercise of power, it is not open to this Court to go behind that declaration and find out whether in a pat1icular case the purpose for which the land was needed was a public purpose or not: see S1111. So111ava11ti v. State of Pu11jab AIR 1963 SC 151 and Raja A11a11d Brahma Shah v. State of U.P. F AIR 1967 SC I 081. On the facts of this case there can be hardly any doubt that the purpose for which the land was acquired is a public purpose." I 0. In Narayan Govi11d Uarnte 1: Slate of Maharashtra ( 1977) I SCC 133, this Court held that development and utilization of land as G residential industrial area qualified as "public purpose". This Court held that: "6. In writ petitions before the High Court, the submission that no public purpose existed was not pressed in view of the decision H

342 SUPREME COURT REPORTS [2016] 11 S.C.R.

A of this Court in Somavanti Smt v. State of Punjab AIR 1963 SC 151. In Ramtanu Cooperative Housing Society Ltd. Shri v. State of Maharashtra ( 1970) 3 SCC 323, acquisition of land for development of industrial· areas and residential tenements for persons to live on industrial estates was held to be legally vali,d for a genuinely public purpose. This ground, ther¥fore, need B not detain us, although the appellants, who are owners of the properties acquired, have formally raised it also by means of the six appeals filed by them (Civil Appeals 1616-1621 of 1969). In agreement with the High Court, we hold that notifications under Section 4(1) of the Act were valid in all these cases." c 11. In Arnold Rodricks v. State of Maharashtra ( 1966) 3 SCR 885 the acquisition ofland for development and utilization as industrial and residential area met the test of "public purpose". This Court laid down thus: "We may further take up the question of the validity of Section D 3(f)(2). In our view it is not necessary to decide this point . because we have come to the conclusi01; that the notifications issued under Sections 4 and 6 specified a public purpose; the purpose specified was '"development and utilization of the said lands as industrial and residential areas". In our opinion this purpose is a public purpose within the Land Acquisition Act as it stood before the amendment made by the Bombay Legislature and it is not necessary for the ·respondents to rely on the amendment to sustain the notification ... It was urged before us that the State Government was not entitled to acquire property from A and give it to B. Reliance was placed on the decision of the Supreme Judicial Court of Massachusetts (204 Mass. 607). But as pointed out by this Court, public purpose varies with the times and the prevailing conditions in localities, and in some towns like Bombay the conditions are such that it is imperative that the State should so all it can to increase the availabilityofresidential and industrial sites. It is true that these residential and industrial sites will be ultimaiely allotted to members of the public and they would get individual benefit, but it is in the interest of the general community that these members of the public should be able to have sites to put up residential houses and sites to put up

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 343 [ARUN MISHRA, J.]

factories. The main idea in issuing the impugned notifications was not to think of the private comfort or advantage of the members of the public but the general public good. At any rate, as pointed out in Babu Barkva Thakur v. State of Bombay [( 1961) 1 SCR 128 at p 13 7] a very large section of the community is concerned and its welfare is a matter of public B. concern. In our view the welfare of a large proportion of persons living in Bombay is a matterof public concern and the notifications served to enhance the welfare of this section of the community and this is public purpose. In conclusion we hold that the notifications are valid and cannot be impugned on the ground that they were not issued for any public purpose." [Emphasis c supplied]

344 SUPREME COURT REPORTS r10161 11 S.C.R.

A 44. '·Eminent 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 compensation for the taking (vide P. Ramanatha Aiyar s Advanced Law Lexico11, Vol. 2, p. 1575).

B 45. The 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. In his well-known work De Jure. Belli c etPacis, 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 prope11y, not only in the case of extreme necessity, in which even private persons have a D right over the property of the other, but forthe ends of public utility, to which ends those who founded civil society must be supposed to have intended the private ends should give way."

46. Blackstone too believed that the State had no general power to take private property of landowners, except on the payment of a reasonable price. The right of the State or the sovereign to its or his own prope11y 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 public interest.

47. The 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 G power is inalienable. No legislature can bind itself or its successors not to exercise this oower when public necessity demands it. Nor can it be abridged or restricted by agreement or contract.

48. Nichols in his classic book £111i11e11t Domain defines it (eminent domain) as "the power of sovereign to take property for public use without the owner·, consent". H

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 345 [ARUN MISHRA, J.]

49. Another constitutional expert (Cooley) in his treatise on the Constitutional Limitations, states: "More accurately, it is the rightful authority which must rest in eve1y 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."

50. Willis in his well-known work Constitutional Lall' discusses two viewpoints 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 c 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 should be transfeITed to public ownership or for public user and it is sufficient that the public derives advantage from the scheme. D

51. In Fall brook Irrigation District v. Bradley 4 I. L Ed 369 : 164 US 112 (1896) an Act of California provided for the acquisition of lands whenever fifty landowners or a majority of them in a pa1ticular locality required it for construction of a watercourse, the object of the legisl~tion being to enable dry lands to be brought under wet cultivation. The validity of the Act E was challenged on the ground that the acquisition would only benefit pa11icular landowners 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 ifnarrow view was to be accepted but was not well founded if liberal view was to be adopted. Rejecting the contention, the Court observed: (L Ed pp. 389-90) "To irrigate and thus to 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 landowners, or even to any one section of the State. The fact that the use of the water is 1imited to the landowners 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 H

346 . SUPREME COURT REPORTS [2016] 11 S.C.R.

A 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 ttse of the water." (emphasis supplied) The aq9ve statement of law was reiterated in subsequent B cases. '...,

52. In Rindge Co. v. County ofLos Angeles 67 L Ed 1186: 262 US 700 (1922) the Court observed t!Jat: (L Ed p. 1192) " ... It is not essential that the entire community, nor even any . c considerable portion, should directly enjoy or participate in an improvement in order to constitute a public use".·

53. In New York City HousinJ? Authority v. Muller 270 NYP 333 : I 05 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 ifncit futile." · ... and holding that those purposes were for the benefit of the public the Court went on to observe: F "It is also said that since the taking is to provide apartments to be rented to a dass designated as persons of low income or to be leased or sold to limited dividend corporations the use is priyate and not public. This objection disregards the primary purpose of the legislation. Use ofa proposed structure,facility G or service by ·everybody and anybody is one of the abandoned, univer~l tests of a public use ."(emphasis supplied)

54. In Murray v. LaGuardia 291 NY 320 a town corporation was formed for acquiring certain lands. It was financed by H Metropolitan Insurance Company which held all the stocks of

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 347 [ARUN MISHRA, J.]

the corporation. The owners of the lands contended that the scheme was to benefit only few individuals and the Insurance Company which was aprivate·corporation and there was no public use in the proJect. The Court, however, rejected the argument. Dealing 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 domain' to accomplish a project from which 'Metropolitan', a private corporation may ultimately reap a profit. If upon c completion of the project the public good is enhanced it does not matter that private interests may be benefited." (emphasis supplied)

55. In Samuel Berman v. Andrew Parker 99 L Ed 27 : 348 US 26, 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 landowners that the project was not public project and their property could not be acquired. Rejecting the contention, the Court observed that it does not sit to determine whether a particular housing project is or is not desirable.

56. The concept of public welfare is broad and inclusive. The values it represents are spiritual as well as physical, 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 authorised agencies nave made determinations that take into account a wide variety of values and it was not for the Court to reappraise them: G

" ... If those who govern the District of Columbia decide that the nation'.\'. capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way." (Samuel Berman case 99 L Ed 27, L Ed p.38 : 348 us 26) H

348 SUPREME COURT REPORTS f20161 11 S.C.R.

A 57. Dealing with the contention that the project was undertaken by one businessman for the benefit of another businessman, the Court observed: (Samuel Berman case[ supra]) "The public end may be as we11 or better served through an agency of private enterprise than through a department 8 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 c 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)

58. In Hawaii Housin;z Authority v. Midkiff 81 L D Ed 2d I_ 86 : 467 US 229 (1984) the Cou11 held that, no doubt there is a role for courts to play in reviewing a legislature's judgment of what constitutes a pub! ic use, even when the eminent domain power is equated with the police power. Butthe Court in Berman (supra) made clear that it is ·'extremely narrow". The Court emphasised that any departure from this judicial restraint would result in courts deciding on what is and what is not a governmental function and in their invalidating legislation on the basis of their view on that question. And the court would not substitute its judgment for a legislatun.:·s judgment as to·what constitutes a public use "unless the use be palpably without reasonable foundation".

59. Recently, in SusetteKelo v. City ofNe1r London l 62 L Ed 439: 545 US 469 the landowners 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 revitalisation of the city ofNew London for which the land was acquired. It was submitted by the learned counsel for the respondents that the facts in Keio (supra) 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: [Keio case (supra)] H

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS ... 349 [ARUN MISHRA, J.]

"The Fort Trumbull area is situated on a peninsula that juts into A 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 I is designated for a waterfront conference hotel at the center of a 'small urban B village' that will include restaurants and shopping. This parcel will also have marinas for both recreational and commercial uses. A pedestrian 'riverwalk' will originate here and continue down the coast, connecting the waterfrcmt areas of the development. Parcel 2 will be the site of approximately 80 new residences organised into an urban neighbourhood and c linked by public walkway to the remainder of the development, including the State park. This parcel also includes space reserved for a new US Coast Guard Museum. Parcel 3, which is located immediately north of the Pfizer facility, will contain at least 90,000 sqft of research and development office space. D Parcel 4A is a 2.4 acre site that wi II be used either to support the adjacent State park, by providing parking or retai I services for visitors, or to support the nearby marina. Parcel 4B will include a renovated marina, as well as the final stretch of the ri~rwalk. Parcels 5, 6 and 7 will provjde land for office and retail space, parking, and water-dependent commercial uses." E The Court also stated: "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 F 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' is1he purpose o'fthe taking; the condemnation ofland for a railroad with commonccarrier duties is a familiar example." The Court noted the contention of the petitiorters that "using G eminent domain for economic development impermissibly blurs the boundary between public and private takings". It also conceded that quite simply; the Government's pursuit of a public purpose might benefit individual private pa1 ties, but rejected the· argume!lt by stating: H

350 SUPREME COURT REPORTS [2016] 11 S.C.R.

A "When the legislature's purpose is legitimate and its mean~ are not irrational, our cases make clear that empirical debates over the wisdom of other kinds of socio-economic legislation are no.t to be carried o_ut in the Federal Courts."

60. The Court reiterated: (Samuel Berman case (supra) B "The public end may be as well or better served through an agency of ptivate enterprise than through a department of government--or so the Congress might conclude. We cannot say that public ownership is .the sole method oj promoting the public purposes of community redevelopment projects." c 61. The above principles have been accepted and applied in India also. Immediately after the Constitution came into force, this Court had an occasion to consider the power of eminent domain in the leading case of Charanjit Lal Chowdhury v. Union of India AIR 1951 SC 41 : 1950 SCR 869. Referring to the doctrine of eminent domain· in the American legal system, Mukherjea, J. (as His Lordship then was) stated: (Charanjit Lal case (sup1'a) ' "./8. It is a right inherent in every sovereign to take and appropriate private propert)' belonging to individual citizens for public use. This right, which is described as eminent domain in American law, is like the power of taxation, and 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." F