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

62. In Commr. & Collector v. Durganath Sanna AIR 1968 SC 394 : ( 1968) l SCR 561 drawing distinction between police power and power of f!111inentdomain, this Court observed: (SCC p. 399, para 9) "9 . ... In the exercise of its eminent domain power the G State may take any property from the owner and may appropriate it for public purposes. The police and eminent domain powers are essentially distinct. Under the police power many restrictions may be imposed and the property may even be destroyed without compensation being given, whereas under H the power of eminent domain, the property may be appropriated

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 351 rARUN MISHRA, J.l

to public use on payment of compensation only." A

63. In Coffee Board v. CCT (1988) 3 SCC 263 referring to American authorities, Mukharji, J. (as His Lordship then was) stated: (SCC p. 282, para 29) "29 . ... It is trite knowledge that eminent domain is an essential attribute of sovereignty of every State and authorities B are universal in support of the definition of eminent domain as the power of the sovereign to take property for public use without the owner's consent upon makingjust compensation."

64. In Scindia Employees' Union v. State of Maharashtra (1996) 10 SCC 150 this Court observed: (SCC p. 152, para 4) c "4 . ... The very object of compulsory acquisition is in exercise of the power of eminent domain by the State against the wishes or willingness of the owner or person interested in the land. Therefore, so long as the public purpose subsists the exercise of the power of eminent domain cannot be questioned. D Publication of declaration under Section 6 is conclusive evidence of public purpose. In view of the finding that it is a question of expansion of dockyard for defence purpose, it is a public pmpose."

65. In Sharda Devi v. State of Bihar (2003) 3 SCC 128 E this Court said: (SCC p. 144, para 27) "27 ... The power to acquire by the State the land owned by its subjects hails from the right of eminent domain vesting in the State which is essentially an attribute of sovereign power of the State. So long as the public purpose subsists, the exercise F of the power by the State to acquire the land of its subjects without regard to the wishes or willingness of the owner or person interested in the land cannot be questioned." -::i

13. The definition of "Public purpose" as amended in 1984 has been considered in Sooraram Pratap Re_ddy (supra) thus : G "67. The expression "public purpose" is of very wide amplitude. It is merely illustrative and not exhaustive. The inclusive definition does not restrict its ambit and scope. Really, the expression is incapable of precise and comprehensive definition. And it is neither desirable nor advisable to attempt to define it. It H

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

A is used in a generic sense of including any purpose wherein even a fractiqn of the community may be interested or by which it may be benefited.

68. We may .also refer to few decisions wherein the expression came up for consideration of coutis.

B 69. Before about a century, in Hamabai Framjee Petit v. Secy. of State for India in Council AIR 1914 PC 20 certain lands were sought to be acquired for erecting buildings for the use of government officials. The action was challenged in the High Court of Judicature at Bombay contending that the purpose c ofacquisition could not be said to be "public purpose". Negativing the arguments and upholding the acquisition, Batchelor, J. observed: (Hamabai case). " ... 'General definitions are, I think, rather to be avoided where the avoidance is possible, and I make no attempt to define precisely the extent of the phrase "public purposes" in the lease; it is enough to say that, in my opinion, the phrase, whatever else it may mean, must include a purpose, that is, an object or aim, in which the general interest of the community, as opposed to the particular interest of individuals, is directly and vitally concerned.' "(emphasis supplied) The aggrieved appellant approached the Privy Council. The Council in Hamabai Framjee Petit v. Secy. of State for India in Council AIR 1914 PC 20 approved the above observations of Batchelor, J. Speaking for the Judicial Committee, Lord F Dunedin stated: (IA p. 47) " ... all that remains is to determine whether the purpose here is a purpose in which the general interest of the community is concerned. Prima facie the Government are good judges of that. They are not absolute judges. They cannot say: 'Sic volo G sicjubeo', but at least a court would not easily hold them to be wrong. But here, so far from holding them to be wrong, the whole of the learned Judges, who are thoroughly conversant with the conditions of Indian life, say that they are satisfied that the scheme is one which will redound to public benefit by helping the Government to maintain the efficiency of its H

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 353 fARUN MISHRA, J.l

servants. From such a conclusion Their Lordships would be slow to differ, and upon its own statement it commends itse(f to theirjudf!,ment." (emphasis supplieq)

70. In Veeraraghavachariar V. Sl!cy. of State for India AIR 1925 Mad 837 certain vacant sites were acquired for enabling panchamas to build houses. It was argued that this was not a public purpose as the benefits of the acquisition were to go only to few individuals. The contention was rejected by the Court observing that it is not possible to define what a public purpose is. There can be no doubt that provision of house sites for poor people is a public purpose for it benefits a large class of people and not one or two individuals. c

71. In State of Bihar v. Kameshwar Singh AIR 1952 SC 252 a Constittition Bench of this Court was examining vires of certain provisions of the Bihar Land Reforms Act, 1950 and other State laws in the context of Article 31 of the Constitution (as then stood). The constitutional validity was challenged on D the ground that the Act failed to provide for compensation and there was lack of public purpose. The Court, however, negatived the contention. As to "public purpose", Mahajan, J. (as His Lordship then was), observed: (Kameshil'ar Singh case [supra]) "208 . ... The expression 'public purpose' is not capable of a E precise definition and has not a rigid meaning. It can only be defined by a process ofjudicial inclusion and exclusion. In other words, the definition of the expression is elastic and takes its colour from the statute in which it occurs, the concept varying with the time and state of society and its needs. The point to F be determined in each case is whether the acquisition is in the general interest of the community as distinguished from the private interest of an individual." (emphasis supplied) In the concurring judgment, S.R. Das, J. (as His Lordship then was) stated: (Kameshwar Singh case (supra), AIR p. 290, para G 106) "I 06. From what I have stated so far, it follows that whatever furthers the general interests of the community as opposed to the particular interest of the individual must be regarded as a public purpose. With the onward march of civilisation our notions H

354 SUPREME COURT REPORTS [20I6] I I S.C.R.

A as to the scope of the general interest of the community are fast changing and widening with the result that our old and narrower notions as to the sanctity of the private interest of the individual can no longer stem the forward flowing tide of time and must necessarily give way to the broader notions of the general.interest of the community. The emphasis is unmistakably shi.ftingfrom B the individual to the community. This modern trend in the social and political philosophy is well reflected and given expression to in our Constitution." (emphasis supplied)

72. In State of Bombay v. Ali Gulshan AIR I 955 SC 8 I 0 a Constitution Bench of this Court considered vires of the Bombay c Land Requisition Act, 1948. (Act 23 of 1948). Interpreting provisions of the Omstitution and Schedule VII thereof, the Court held that requisition of property by the Government of Bombay for accommodation of foreign consulate could be said to be "public purpose". It was held that every State purpose or Union purpose D is a public purpose but there may be acquisition or requisition which is neither for the State nor for the lJ nion and yet it may be for a "public purpose"; for instance, acquisition for construction of hospital or educational institution by a private individual or institution.

E 73. In State of Bombay v. R.S. Nanji AIR 1956 SC 294 land was requisitioned for accommodating employees of Road Transport Corporation. It was contended that there was no "public purpose" and hence the action was illegal. Referring to Hamabai(supra), Ali Gulshan AIJ3. 1955 SC 810 and State of Bombay v. Bhanji Munji AIR 1955 SC 41, the Constitution F Bench stated that the expression "public purpose" must be decided in each case examining closely all the facts and circumstances of the case. On the facts of the case, it was held that a breakdown in the organisation,ofthe Corporation, leading to dislocation of the road transport system would create a chaotic G condition to the detriment of the interest of the community. Providing living accommodation for its employees is a statutory activity of the Corporation and it is essential for the Corporation to provide such accommodation in order to ensure an efficient working of the road transport system and it must, therefore, be held to be "public purpose". H

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 355 [ARUN MISHRA, J.]

74. In the leading case of Somawanti v. State of Punjab A AIR 1963 SC 151 certain lands were acquired by the Government for public purpose viz. for setting up a factory for manufacturing various ranges of refrigeration compressors and ancillary equipments. It was contended that acquisition was not for "public purpose" and hence it was unlawful. B

75Copy pinpoint75. Interpreting ihclusive definition of"public purpose" in the Act, Mudholkar, J. stated: (Somawanti case, AIR p. 161, para 24) "2./ . ... This is an inclusive definition and not a compendious one and, therefore, does not assist us very much in ascertaining c the ambit of the expression 'public purpose'. Broadly speaking the expression 'public purpose' would, however, include a purpose in which the general interest of the community, as opposed to the particular interest of individuals, is directly and vitally concerned." D It was also observed that ''public purpose" is bound to vary with the times and the prevailing conditions in a given locality and, therefore, it would not !Je a practical proposition even to attempt a comprehensive definition of it. It is because of this that the legislature has left it to the Government to say what is a public purpose and also to declare the need of a given land for a public purpose.

76Copy pinpoint76. In Arnold Rodricks v. State of Maharashtra AIR 1966 SC 1788 this Court held that the phrase "public purpose" has no static connotation, which is fixed for all times. It is also not possible to lay down a definition of what public purpose is, as the concept of public purpose may change from time to time. It, 'however, involves in it an element of general interest of the community which should be regarded as a public purpose.

77Copy pinpoint77. In Bhim Singhji v. Union of India (1981) I SCC 166 this Court held that the concept of public purpose implies that acquisition or requisition of property is in the interest of general public and the purpose for which such acquisition or requisition is made directly and vitally subserves pub! ic interest.

78Copy pinpoint78. Recently, in Dau/at Singh Surano v. Collector (L.A.) (2007) I SCC 641 land was sought to be acquired for construction H

356 SUPREME-COURT REPORTS f2016] l 1 S.C.R.

A of office of the Deputy Commissioner of Police (Security Control). It v:as contended that there was no element of publi.c purpose and hence the acquisition was not in accordance with law. Negativing the contention and upholding the acquisition, the Court held that the expression "public purpose" includes a public purpose in which greatest interest of the community as opposed B to a particular interest of an individual is directly concerned. The concept is not static but changes with the passage of time. Power of eminent domain can, therefore, be exercised by the State in public interest.

79Copy pinpoint79. A "public purpose" is thus wider than a "public c necessity". Purpose is more pervasive than urgency. That which one sets before him to accomplish, an end, intention, ·aim, object, plan or project, is purpose. A need or necessity, on the other hand, is urgent, unavoidable, compulsive. "Public purpose should be liberally construed, not whittled down by logomachy."( emphasis supplied)

80Copy pinpoint80. In State of Karnataka v. Ranganatha Reddy ( 1977) 4 SCC 471 Krishna Iyer, J. stated: (SCC p. 502, para 57) "57. :.. There may be many processes of satisfying a public purpose. A wide range of choices may exist. The State may walk into the open market and buy the items, movable and immovable, to fulfil the public purpose; or it may compulsorily acquire from some private person's possession and ownership the articles needed to meet the public purpose; it may requisition, instead ofresorting to acquisition; it may take on loan or on hire or itself manufacture or produce. All these steps are various alternative means to meet the public purpose. The State may need chalk or cheese, pins, pens or planes, boats, buses or buildings, carts, cars, or eating houses or any other of the innumerable items to run a welfare-oriented administration or a public corporation or answer a community requirement. If G the purpose is for servicing the public, as governmental purposes ordinarily are, then evel)'thing desiderated for subserving such public purpose falls under the broad and expanding rubric. The nexus between the taking of property and the public purpose springs necessarily into existence ifthe former is capable of answering the latter. On the other hand, if the purpose is a

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 357 , [ARUN MISHRA, J.]

private or non-public one, the mere fact that the hand that acquires or requires is Government or a public corporation, does not make the purpose automatically a public purpose. Let us illustrate. If a fleet of cars is desired for conveyance of public officers, the purpose is a public one. If the same fleet of cars is sought for fulfilling the tourist appetite of friends and relations of the same public officers, it is a private purpose. If B bread is 'seized' for feeding a starving section of the community, it is a public purpose that is met but, ifthe same bread is desired for the private dinner of a political maharajah who may pro tern fill a public office, it is a~private purpose. Of course, the thing taken must be capable of serving the object of the taking. c If you want .to run bus transport you cannot take buffaloes."

81Copy pinpoint81. As observed by Bhagwati, J. (as His Lordship then was) in National Textile Workers' Union v. P.R. Ramakrishnan ( 1983) I SCC 228 the law must adapt itself with the changing socio-economic context. His Lordship said: (SCC p. 255, para 9) "9 . ... We cannot allow the dead hand of the past to stifle the growth of the living present. Law cannot stand still; it must change with the changing social concepts and values. If the bark that protects the tree fails to grow and expand along with the tree, it will either choke the tree or if it is a living tree, it will shed that bark and grow a new living bark for itself. Similarly, if the law fails to respond to the needs of changing society, then either it will stifle the growth of the society and choke its progress or ifthe society is vigorous enough, it will cast away the law which stands in the way of its growth. Law must therefore constantly be on the move adapting itself to the fast changing society and not lag behind." (emphasis supplied) G

82Copy pinpoint82. Finally,"we may refer to the Tenth Report of the Law Commission of India on "The Law of Acquisition and Requisitioning of Land" wherein the Law Commission considering the meaning of"public purpose" under the-Act, stated: "37. (a) Public pwpo:se .-Public purpose is not defined in H

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

A the Act. There is only an inclusive definition which relates to village sites in districts. In other respects, there is no indication in the Act of any test for determining whether a purpose is a public purpose or not. A large number of suggestions have been r.eceived by us urging that we should clearly and exhaustively define the term 'public purpose'. In an ever- B changing world, the connotation of the expression 'public purpose' must necessarily change. If a precise definition is enacted, it would become rigid and leave no room for alteration in the light of changing circumstances. It would leave no room for the courts to adjust the meaning of the expression c according to the needs of the times." (emphasis supplied) Referring to leading authorities on eminent domain and "public purpose'', the Commission observed:

D "38 . ... It is, in our view, neither possible nor expedient to attempt an exhaustive definition of public purposes. The only guiding rule for the determination of its meaning is that the proposed acquisition or requisition should tend to promote the welfare of the community as distinct from the benefit conferred upon an individu·a1. The mere fact that the immediate use is to benefit a particular individual would not prevent the purpose being a public one, if in the result it is conducive to the welfare ofthe community. The question is exhaustively discussed in P. Thambiran Padayachi v. State of Madras AIR 1952 Mad 756 by Venkatarama Aiyar, J. All that can, therefore, be attempted in a legislation of this kind is to provide an inclusive definition, so as to endow it with sufficient elasticity to enable the courts to interpret the meaning of the expression 'public purpose' according to the needs of the situation, and this is what we have attempted."

G This Court has observed in Sooraram Pratap Reddy (supra) that public purpose is of very wide amplitude. It has referred to State of Bombay" Ali Gulshan,AIR 1955 SC 810 where considering the public purpose it was held that there may be acquisition or requisition which is neither for the State nor for the Union yet it may be for public purpose. Dau/at Singh Surana & Ors. v. First Land Acquisition Collector & Ors. H (2007) I SCC 641 has also been referred to in which it has been laid

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 359 [ARUN MISHRA, J.]

down that public purpose includes a purpose in which the greatest interest A is of community as opposed to particular interest of an individual is directly concerned. The concept is not static but changes with the passage of time. Power of eminent domain can therefore be exercised by the State only in public interest. The project in hand would have definitely served the public purpose and public purpose should be liberally construed, not· B whittled down by logomachy. It has been observed in National Textile Workers' Union v. P.R.Ramakrishnan & Ors. (1983) 1 SCC 228 that law must change with the changing social concepts and values. Ifthe law fails to respond to needs of changing society, then either it will stifle the growth of the society and choke its progress or if the society is vigorous enough, it will cast away the law which stands in the way of its c growth. Law must constantly be on the move adapting itself to the fast- changing society and not lag behind, that is, to adjust to the meaning of the expression according to the needs of the times in the matter of public purpose. That is the purpose behind the inclusive definition of public purpose in section 3(t) also. D

14. This Court has again considered the public purpose in Nand Kishore Gupta v. State of Uttar Pradesh and Ors. '(2010) 10 SCC

282. On a consideration of various judgments in Sooraram Pratap Reddy v. District Collector (2008) 9 SCC 552, JhanduLal v. State of Punjab (AIR 1961 SC 343) and various other decisions, this Court has laid down thus: E

"56. During the debate, our attention was invited to Section 3(() of the Act, which contains a definition for "public purpose". It was pointed out that where the acquisition is for the Company, it cannot amount to a public purpose. There can be no dispute about this proposition that where the acquisition ofland is forthe F companies, it cannot amountto a public purpose. It was, therefore, our endeavour to find out_whether this land was for the Company and we are quite satisfied with a finding recorded by the High Court that this acquisition was not for the Company but was for the public purpose. G

57. The Expressway is a work of immense public importance. The State gains advantages from the construction of an expressway and so does the general public. Creation of a corridor for fast-moving traffic resulting into curtailing the travelling time, as·also the transport of the goods, would be some factors which . H

360 SUPREME COURT REPORTS r2o 16111 S.C.R.

A speak in favour of the Project being for the public purpose. Much was stated about the 25 million sq m of land being acquired for the five parcels of land. In fact, in our opinion, as has rightly been commented upon by the High Court, the creation of the five zones for industry, residenpe, amusement, etc. would be complementary to the creation of the Expressway. B

58. It cannot be forgotten that the creation of land parcels would give impetus to the industrial development of the State creating more jobs and helping the economy and thereby helping the general public. There can be no doubt that the implementation of the Project would result in coming into existence of five c developed parcels/centres in the State for the use of the citizens. There shall, thus, be the planned development of this otherwise industrially backward area. The creation of these five parcels will certainly help the maximum utilisation of the Expressway and the existence of an Expressway for the fast-moving traffic would help the industrial culture created in the five parcels. Thus, both will be complimentary to each other and can be viewed as parts of an integral scheme. Therefore, it cannot be said that it is not a public purpose.

59. We must, at this stage, take into account the argument that the whole compensation is coming wholly from the Company and not from the Government or from YEIDA. The appellants invited our attention to Clause 4.1 (d) of the Concession Agreement. On that basis, if was argued that the Company has paid the compensation cost and, therefore, the acquisition is clearly covered under Part VII of the Act, and there may be no public purpose ifthe acquisition is made for the Company and it is the Company who has to shell out the whole compensation. Now, this argument is clearly incorrect.

60. Even if we accept for the sake of argument that all this compensation is coming from the Company, we must firstly bear it in mind that the Company gets no proprietary or ownership rights over the Project assets. Now, if it is presumed that the compensation is coming from the Company, then it will have to be held that the whole assets would go to the Company. At least that is envisaged in Part VII of the Act. Here, that is not the case. The assets are to revert back to the acquiring body or, as

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 361 [ARUN MISHRA, J.]

the case may be, the Government. Even the lands which are utilised for the construction of the Expressway are to go back to the Government barely after 36 years i.e. after the Company has utilised its rights to recover the toll on the Expressway: Secondly, it must be borne in mind that the Concession Agreement has been executed in February 2003, whereas the acquisition process started somewhere in the month of September 2007.

61. When the Concession Agreement was executed, the cost factor was not known. The acquiring body was only to make available the land to the concessionaire to implement the Project. There would be a number of difficulties arising, as for example, it would be clearly not contemplated that the land would be made c available without any value or that there would be no scheme for the State Government for recovering the expenses that it would incur in obtaining the land. The learnea counsel appearing · for the State as also for the Company and YEIDA argued that in order to overcome and iron out such difficulties, the Agreement D provides that the land would be leased on a premium equivalent to the acquisition cost. This·argument proceeds on the basis of Clause 4.3(C) of the Concession Agreement. It is to be noted then that the premium of the land was not going to be just the acquisition cost, but also the lease rent of Rs. 100 per hectare. · Therefore, the State Government was to earn Rs. 100 per hectare for the total acquired land, which was about 25 million sq mover and above the compensation to be decided. The mention of the compensation amount in addition to the lease money of Rs. I 00 per hectare would clearly provide that the whole compensation was not going to be paid by the Company alone. This is apart from the fact that through this Agreement, only the extent of the compensation payable by the Company to YEIDA was decided. However, once all the amounts went to the coffers ofYEIDA, it would lose its independent character as a premium. When it goes into the coffers ofYEIDA, it is YEIDA which would make the payments of the estimated compensation and thereby it would be as if the compensation is paid not by the Company, but by YEIDA. .

62. The respondents have relied on the law laid down in Pratibha Nema case (2003) 10 SCC 626, more particularly, paras 24 and 25 therein. The respondents also argued ~elying upon the decision H

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

A in Naihati Municipality v. Chinmoyee Mukherjee ( 1996) I 0 SCC 632. The respondents argued that the law laid down in Pratibha Nema case (supra) emanates from the judgment in Naihati Municipality v. Chinmoyee Mukherjee (supra).

64. The first judgment in State of Karnataka v. All India Manl{facturers Organisation (supra) pertain to Bangalore- c Mysore Infrastructure Corridor Project. While considering what the public purpose was, this Court in paras 76, 77, 78 and 79 took stock of the contention, whereby it was suggested that land far away from the actual alignment of the road and periphery had been acquired and, therefore, even ifthe implementation of the Highway Project was assumed to be for the public purpose, the acquisition of the land far away therefrom would not amount to a public purpose nor would it be covered by the provisions of the Karnataka Industrial Areas Development Act, 1966 (the KIAD Act). ,.

65. In the present case also, it was argued that the lands which are being acquired for the interchange would not at all be necessary. Fmiher, it was argued that the five parcels of land which are being acquired forthe development of five industrial townships, could not be said to be for the public purpose nor could it be said to be a part of the present integrated scheme. This Court had refuted this argument holding that even in case of Bangalore-Mysore Highway Project, the lands even a little away from the main alignment of the road, had to be a part of this Project and the Project was an integrated infrastructure development project and not merely a highway project. It was conceived originally as the Bangalore-Mysore Infrastructure G CoJTidor Project, which conceived of the development ofroads between Bangalore and Mysore, for which there were several interchanges in and'around the periphery of the city of Bangalore, together with numerous developmental infrastructure activities along with the highway at several points. The situation is no different in the present case. Therefore, the contention that this H

KEDAR NATHYADAV v. STATE OF WEST BENGAL & ORS. 363 [ARUN MISHRA, J.l

acquisition was not for public purpose, is rejected. A

66. In Sooraram Pratap Reddy v. Collector (supra) the same question cropped up which has been mentioned in paras 9, 10 and 11 of the judgment suggesting that there was no public purpose and in fact, it was an acquisition for a private company under Part VII of the Act and, therefore, the power of eminent domain B would have no application to such case. The contentions raised in that judgment in paras 16, 17 and 18 are almost similar to the contentions raised herein. The Court has extensively dealt with the question of public purpose in para 66 and has taken stock of . practically all the cases till para 109 therein. It will not be necessary for us to repeat all the case law and the questions raised and c considered in these paragraphs, such as industrial policy of th~ State, acquisition for Company, etc.

67. In fact, while considering the contention regarding the industrial policy of the State, the Court has taken into consideration the oft quoted case of Dhampur Sugar (Kashipur) Ltd. v. State D of Uttaranchal (2007) 8 SCC 418 where this Court has come to the conclusion that in the absence of illegality or violation of law, a court oflaw will not interfere in the policy matters. Similar is the case here, where the development of the industrial infrastructure along the Expressway for the overall betterment E of the region and further for the industrialisation of the otherwise backward region ofUttar Pradesh, was considered as a policy. In this..judgment again, the Court has extensively considered the question as to whether and under what circumstances, the acquisition could be said t<'> be the acquisition for the Company. In that, the Court has also considered the decision in Babu F Barkya Thakur v. State of Bombay AIR 1960 SC 1203.

68. The Court quoted the observations in the aforementionep decision in Babu Barkya Thakur v. State of Bombay (supra) to the following effect: {AIR 1960 SC p. 1207, para 10) G "I 0 . ... These requirements indicate that the acquisition for a company also is in substance for a public purpose inasmuch as it cannot be seriously contended that constructing dwelling houses, and providing amenities for the benefit of the workmen employed by it and construction of some work of public utility do not serve a public purpose." H

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

A 69. We have already considered this question that in the present case, there is nothing to indicate that the acquisition is for the Company i.e. for Jaiprakash Industries Ltd. It is only, therefore, that we are at pains to point out that the Government was only using the Company for implementing its policy.

B 70. In the aforementioned judgment of Sooraram Pratap Reddy v. Collector (supra), Hon'ble Thakker, J. has also referred to the decision in Jhandu Lal v. State of Punjab AIR 1961 SC 343 where the acquisition was for construction of houses by members ofThapar Industries Cooperative Housing Society Ltd., Yamuna Nagar. The challenge was that there was non-compliance with c the provisions of Part VII of the Act, though the acquisition was for the Company under Part VII of the Act. The High Court, in that case, held that the acquisition was for a public purpose and there was no need to comply with the provisions of Part VII of the Ac(

D 71. In fact, practically all the decisions on the subject ofacquisition for the Company and public purpose have been comidered in this judgment of Sooraram Pratap Reddy v. Collector (supra), which itself is a locus classic~1s. Ultimately, this Court came to the conclusion that the acquisition made by the State ofAndhra E Pradesh could not be faulted, as it was in pursuance of policy decision for development of the.city of Hyderabad and in pursuance of that policy, an integrated project was taken up for development of the city of Hyderabad into a business-cum-leisure tourism infrastructure centre. The Court also came to the conclusion that Andhra Pradesh Infrastructure and Investment F Corporation (APIIC) in the reported decision was a nodal agency like YEIDA in the present case which was to generate the revenue and help the development of infrastructure for industrialisation of the area. The Court also recognised that such - instrumentality of the State would have the power of eminent G domain. Like the present case~ the Court held the Project to be an integrated and indivisible project-We have no doubt that in the present case also, the Expressway as well as the five parcels which are to be developed are part of an integrated and indivisiqle project.

72. In Sooraram Pratap Reddy v. Collector (supra) it has also H

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 365 rARUN MISHRA, J.l

been found thafthe entire amount of the compensation was t'o A be.paid by the State agency APIIC,just like in the present case, ·where the entire amount is to be paid by YEIDA, which agency is working as a· nodal ·agency for the execution of the Project. The Court has also found that where the power of eminent domain is exercised ma!a fide or for collateriil puri)oses and · B --Oehors the Act or in an irrational or unreasonable mann~r 'or when the purpose is "no public purpose" aJ.W the fraud on statute is apparent-, a writ court can undoubtedly intetfer('l, It has been found very specifically here that the present matter is not suffering · from the above defects. ""

73. In this judgment, the subject of eminent domain has been c discti'ssed and considered with thoroughness and all the ramifications of the principle of eminent domain have been discussed. We have already culled out the principles emanating from this decision in the earlier part of1his judgment and even.at the cost of repetition, we may say that this judgment is practically, the law-setter on the subject of eminent domain, as also on the other allied subjects of acquisition. The judgment has also explained the concept of"public purpose", which has been held tb be wider than "public necessity". The judgment proceeds on a basis that ·merely because the benefit goes to a particular sectiqp of the society, the acquisition does not cease to be for the public purpose. It has been specifically held that where the . _ State is satisfied about the existence of a.public purpose, the acquisition would be governed by Part II of the Act,. as has happened in the present matter.

74. The judgment in Sooraram Pratap Reddy v. Collector F !(supra) is an- authoritative pronouncement on the mode of payment, as also ori the construction' of Sections 40 and 41 of the Act. In fact, this j_udgment . . is a complete . answer to . the. .. argument of the appellants t~at this-acquisition is not for public purpose." .- ,. •,. . G

15. A. conjoint reacting O£ the provisions co.nta_ined in sections :}(t), · 6, other provisions of PartI II and the provisions · contained in Part · VII of t

.the Act makes it clear that there can be an acquisition for public purpose · and ultimately land may goon lease or other mode of transfer to a company and in case the compensation is paid out of public revenue, it would be H

366 SUPREME COURT REPORTS f2016l ll S.C.R.

A an acquisition for a public purpose under Part II and in case compensation is borne as per the agreement provided in section 41, it would be an acquisition under Part VII of the Act. Though acquisition for public: purpose can also be for the purpose of industrialization or for a company in case setting up of the company has a public purpose behind it as provided in section 3(f) and payme11t of compensation for !1cquisitioF1 of B land is made out of public revenue as per the provisions ofsection 6 as . ' amended in 1984.

16. This Court in the decisions before the amendment of sections 3, 3(f) and 6 in 1984 in the pre-amended period in the cases of Babu Barkya Thakur v. State of Bombay, AIR (1960) SC 1203, Pandit C Jhandu Lal v. State of Punjab, AIR (1961) SC 343, R.L. Arora v. State of Uttar Pradesh (1962) Supp. 2 SCR 149, Somawanti v. State of Punjab (1963) 2 SCR 774, Jage Ram & Ors. v. State of Haryana & Ors. (1971) 1 SCC 671, Indrajeet C. Parekh v. State of Gujarat (1975) 1 SCC 824, Ajlatoon v. Lt. Governor of Delhi (1975) 4 SCC D 285, Bai Malimabu v. State of Gujarat & Ors.. (1978) 2 SCC 373; Manubhai Jetha/al Patel v. State of Gujarat (198-3) 4 SCC 553, Srinivasa Cooperative House Building Society Ltd. v. Madam Gur:umurt!Jy Sastry & Ors. (1994) 4 SCC 675 in which notification was published on 8.2.1979; and Mandir Sita Ramji v. Land Acquisition Collector & Ors., .(2005) 6 SCC 745 in which notifications under section E 4 were published on 13. l l .1959 and 13.3.1975 has taken the view that an acquisition for a company could also be for public purpose,whe.~\;..t,he Government provides compensation out of public revenue. The contribution of the Government could even be small that is Rs. I 00/- or so. Though the contribution so made would have to be judged in th~: F facts of the case by the doctrine of colorable exercise of power. · · 17. Even after the amendments made in definition of "public purpose" in section 3(f) and other provisions of Part II and Part VII of the Act in the year 1984, where the acquisition was initiated after the amendment has been made, the amended provisions has been taken into G · consiqeration by this Court in various decisions referred to hereinafter. , . ,

18. In Amdrnath Ashram Trust Society & Am: v. Qovernor of U.J/_ & Ors. (1998) 1 SCC 591 which is a decision rendered post·: amendment wherein this Court has observed thus : "4. The appellant wants land adjacent to its school building H -for the purpose of a playground for its students. The land belongs

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 367 rARUN MISHRA, J.l

to Respondent 5. So it tried to obtain it from Respondent 5 by A offering a price higher than its market value but did not succeed. It, therefore, moved the State Government to acquire that land for it. The Government agreed and issued notification under Section 4 of the Land Acquisition Act on 1-8-1986 notifying its intention to acquire that land for a public purpose namely 8 "playground of students of Ainar NathVidya Ashram (Public School), Mathura". Thereafter, inquiries under Section 5-A and ·under Rule 4 of the Land Acquisition (Company) Rules, 1963 were made. The Government also entered into an agreement with the appellant as required by Section 40(1) of the Act on 11- 8-1987. It then issued a declaration under Seetion 6 on 4-9-1987 c mentioning the fact that the report made under sub-rule (4) of Rule 4 of the Land Acquisition (Company) Rules, 1963 was considered by the Government that the Land Acquisition · Committee constituted under Rule 3 of the said Rules was consulted, that the agreement entered between the appellant and D ·the Governor was duly published that the Governor was satisfied that the land mentioned in the schedule is needed for construction · of a-playground for students ofAmar NathVidya Ashram (Public School), Mathura by the Amar Nath Ashram Trust, Mathura. This acquisition of land was challenged by the owner by !\ writ . petition filed int.he Allahabad High Court. An foterim order was · E passed directing the parties to maintain status E§/i594quo as regards possession. During the pendencx_of the said petition, on 1-5- 1992, the Government denotified the land from acquisition in exercise of its power under Section 48 of the Land Acquisition Act. The appellant challenged that notification by filing a writ petition in the High Court. The petition filed by the appellant and the one filed by the owner were heard t,ogether. The petition filed by the owner was dismissed as infructuous and-the petition filed by the appellant was-dismissed on the ground that the decision of the State Governmei:it to withdraw from the acquisition for the reason that the acquisition having been proclaimed as one for a pubHc purpose a part of cost of acquisition was required to be borne by the State and as no such provision was made, it was not likely to be sustained if challenged, cannot be said to be . contrary or illegal. _, - ·· ~: It is now weUestablished Jhat if the cost of acquisition ..H

36S - SUPREME COURT REPORTS [2016] 11 S.C.R.

A is borne either wholly or partly by the Government, the acquisition can be said to be for a public purpose within the meaning of the Act. But if the cost is entirely borne by the company then it is an acquisition for a company 'under Part VII of the Act. it was !i.O held by'1his Court in Jhandu Lal v. State of Punjab AIR 1961 SC 343. This deCision was relied B upon by the learned counsel for !_be State to support his contentions but it is difficult to appreciate how it supports him. It is held in that case that it is not correct to say that no acquisition for a company for a public purpose can be made except under Part VII of the Act. In that case a part of the cost was to be c borne by the Government and, therefore, it was held that it was not necessary to comply with the provisions of Part VII of the Act. Admittedly, in the present case the entire cosi of acquisition is to be borne by the appellant-Society and, therefore, it is an acquisition for a company and not for a public purpose. That is also borne out by the notification issued under Section 6 of the Act which states "thatthe land mentioned in the schedule below is needed forthe construction of playground for students of Amar. NathVidya Ashram (Public School), Mathura in District Mathura by the Amar Nath Ashram Trust, Mathura". Therefore, simply because in the notification, issued under Section 4 of the Ad it was stated thatthe land was needed for a public purpose, namely, for a'·pfayground for students of Amar Nath Vidya Ashram (Public School),. Mathura, it cannot be said that the acquisition is for a public purpose and not under ChaP,ter VII for the appellant-Society in view of subsequent events and the declaration made under Section-6. The learned ' ' " com;isel for the State also relied upon the decision of tliis Court in Srinivasa Coop. House Building Society Ltd. v. Madam Gurumurthy Sastry (1994) 4 SCC 675 wherein this C(l)Urt ·has· held (at p: ~76, SGC Headnote) that though there is "no provision in the Act to say that when a land is required for G a company, it may also be for a public purpose. However, even -the acquisition for a company, unless utilisation of the land so acquired is integrally connected with public use, resort to the , compulsory acquisition under Chapter VII cannot be had". · It was submitted on the basis of this observation that even - H .in case of an acquisition for a company an element of public

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 369 fARUN MISHRA, J.l

purpose has to be there and if for that reason it was believed by A· the Government that it was necessary for it to make substantial contribution from public revenue so as to avoid the charge of colourable exercise of powers, the decision of the Government to withdraw from the acquisition cannot be said to be arbitrary or illegal. The aforesaid observation was made by this Courtin B the context of requirement of Section 40 of the Act and they cannot be construed to mean that no land cannot (sic can) be acquired by the State Government without making substantial contribution towards the cost of acquisition. We cannot read something more in the said observation than what they were intended to convey. The provisions of Part VII and particularly c the provisions regarding payment of the entire costs of the acquisition,, would otherwise become redundant.

9. In an acquisition under Part VII of the Act, position of the company or the body for which the land is acquired is quite different from that of the owner of the land. As a result of withdrawal from the acquisition whereas the owner of land is ordinarily not likely to suffer any prejudice or irreparable loss, the company for whose benefit the land was to be acquired, 'l may suffer substantial loss.

10. However, it is not necessary to go into this larger question whether iq such a case the- State Government can withdraw from acquisition without the consent of the co1npany. as the justification given by the Government is otherwise not ·sustainable. As stated earlier the reason given by the Government for withdrawing from the acquisition is that as no part of the cost of acquisitionwali to be borne by the Government the acquisition could not have been sustained as for a public purpose. We have . already pointed out that in this case the acquisition was not for a public purpose but it was an acquisition for a company under Chapter VII of the Act. In respect ofan acquisition for a company under Chapter VU of the Act law does not require that the State G should also bear some cost of acquisition to make it an acquisition for public use. Thus th_e decision of the Government to withdraw from acquisition was based upon a misconception of the correct legal position. Such a decision has to be regarded as arbitrary and not bona fide. Particularly in a case where as a result of a H

370 · SUPREME COURT REPORTS f2016] l l S.C.R.

A decision taken by the Government the other party is likely to b1~ prejudicially affected, the Government has to exercise its power bona fide and not arbitrarily. Even though Section 48 of the Act confers upon the State wide discretion it does not permit it to act in an arbitrary manner. Though the State cannot be compelled to acquire land compulsorily for a company its decision to withdraw B from acquisition can be challenged on the ground that power has been exercised mala fide or in an arbitrary manner. Therefore, we cannot accept the submission of the learned counsel for the State that the discretion of the State Government in this behalf is absolute and not justiciable at all." (emphasis supplied) c 19. This Court has laid down that in case cost of acquisitjon is borne either wholly or partly by the Government, the acquisition can be said to be for a public purpose. lfthe cost is entirely borne by the company then the acquisition is for a company under Part VII of the Act.

20. In Pratibha Nema & Ors. v. State of MP. & Ors.· (2003) 10 D sec 626, considering the amended provisions it was observed: "6. In order to appreciate the contentions set out above in a proper perspective, it would be appropriate to advert to certain basic provisions of the Act and recapitulate the well-settled principles relating to public purpose and acquisition ofland under E Part II and Part VII of the Act. Section 4(1) which occurs in Part II of the Act contemplates a notification to be published in the Official Gazette etc. whenever it appears to the appropriate Government that land in any locality is needed for any public purpose or for a company. Thereupon, various steps enumerated in sub-section (2) could be undertaken by the authorized officer. There is an i'i1clusive definition of"public purpose" in clause (f) of Section 3. This clause was inserted by .Central Act 68 of

1984. Many instances of public purpose specified therein would have perhaps been embraced within the fold of public purpose as generally understood. Maybe, by way of abundant caution or to give quietus to legal controversies, the inclusive definition has been added. One thing which deserves particular notice is the rider at the end of clause (j) by which the acquisition of land for companies is excluded from the purview of the expression "public purpose". However, notwithstanding this dichotomy, speaking from the point of view of public

-, KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 371 [ARUN MISHRA, J.l

purpose, the .provisions of Part II and Part VII are not mutually exclusive as elaborated later.

7. The concept of public purpose (sans inclusive definition) was succinctly set out by Batchelor, J. in a vintage decision of the Bombay High Court. In Hamabai Framjee Petit v. Secy. of State for India AIR 1914 PC 20 the Privy Council quoted with apprdval the following passage from the judgment of Batchelor, J.: (AIR p. 21) "General defihitions are, I think, rather to be avoided where the avoidance is possible, and I make no attempt to define precisely the extent of the phrase 'public purposes' in the lease; it is enough to say that, in my opinion, the phrase, whatever else it may mean, must include a purpose, that is, an object or aim, in which the general interest of the community, as opposed to the particular interest of individuals, is directly and vitally concerned." D

8. The Privy Council then proceeded to observe that prima facie the Government are good judges to determine the purpose of acquisition i.e. whether the purpose is such that the general interest of the community is served. At the s~me time, it was aptly said that they are not absolute judges. This decision of the Privy Council and the words of Batchelor, J. were referred to with approval by a Constitution Bench in Somawanti v. State of Punjab, AIR 1963 SC 151 and various other decisions of this Court.

9. We may now advert to Section 6. It provides for a declaration to be made by the Government or its duly authorized officer that a particular land is needed for a public purpose or for a company when the Government is satisfied after considering the report, if any, made under Section 5-A(2). It is explicitly made clear that such declaration shall be subjectto the provisions of Part VII of the Act which bears the chapter heading G "Acquisition ofLand for Companies". Thus, Seetion 6 reiterates the apparent distinction between acquisition for a public purpose and acquisition for a company. There is an important and crucial proviso to Section 6 which has a bearing on the question whether the acquisition is for a public purpos-e or for a company. The second proviso lays down that H

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

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 373 fARUN MISHRA, J.l

"It is not correct to determine the validity of acquisition keeping in view the amount of contribution but the motivation for making the contribution would help in determining the bona fides of acquisition. Further in Malimabu case ( 1978) 2 SCC 373 contribution of Re 1 from the State revenue was held adequate to hold that acquisition was for public purpose with B State fund. Therefore, the contribution of Re 1 from public exchequer cannot be dubbed as illusory so as to invalidate the acquisition."

10. In Soma111anti case (supra) the following note of caution was sounded: (AIR p. 169, para 52) c "We would, however, guard ourselves agairist being understood to say that a token contribution by the State towards the cost of acquisition will be sufficient compliance wifh the law in each 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 D 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 Comt in every case which comes up before it to examine whether the contribution made by the E State satisfies the requirement of the law. In this case we are satisfied that it satisfies the requirement oflaw." U. A three-Judge Bench of this Court in1ndrajit C. Parekh v. State of Gujarat (1975) I SCC 824 without much of . elaboration, relegated the observations in the above passage to very narrow confines by stating thus: (SCC p. 82 7, para 3) "In view of the decision in this case that a nominal contrib-ution out of public revenues would satisfy the requirement of the proviso to Section 6(1) the observation 'whether such contribution meets the requirement of the law would depend upon the facts of every case' must necessarily be taken to refer to the requirement of some law other than the proviso to Section 6(1 ). No such law was pointed out to us; and it is not necessary for the purposes of this appeal to enter on a discussion as to what such other law could be." H

374 SUPREME COURT REPORTS (2016] II S.C.R.

A 12. Another important provision is sub-section (3) of Section 6 which enjoins that the declaration (required to be published in the Official Gazette etc.) shall be conclusive evidence that the land is needed for a public purpose or for a company and on . publication of declaration, the appropriate Government is enabled to acquire the land in accordance with the other provisions of B the Act. This sub-section came up for interpretation of this Court in Sommvanti case (supra). The Court emphasised that the conclusiveness contemplated by sub-section (3) is not merely regarding the satisfaction of the Government on the question of need but also with regard to the question that the land is needed c for a public purpose or for a company, as the case may be. However, the learned Judges highlighted an important exception to the finality or conclusiveness of the declaration under Section 6(1). It was observed thus: (AIR p. 164, para 36) "That exception is that ifthere is a colourable exercise of power D the declaration will be open to challenge at the instance of the aggrieved party. The power committed to the Government by the Act is a limited power in the sense that it can be exercised only where there is a public purpose, leaving aside for a moment the purpose of a. company. If it appears that what the Government is satisfied about is not a public purpose but a E private purpose or no purpose at all the action of the Government would be colourable as not being relatable to the power conferred upon it by the Act and its declaration will be a nullity. Subject to this exception, the declaration of the· Government wi II be final."

F 13. The main contention.of the learned Senior Counsel for the appellant, as already noticed, rests on the plea of colourable exercise of power.

14. Colourable exercise of power or mala fides in the province of exercise of power came up for discussion in State of Punjab v. Gurdial Singh ( 1980) 2 SCC 4 71. In the words of G .Krishna Iyer, J.:' (SCC p. 475, para 9) "Pithily 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 H

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 375 fARUN MISHRA, J.l

of power by simulation or pretension of gaining a legitimate goal. ... When the custodian of power is influenced in its exercise by considerations outside those forpromotion of which the power is vested the court calls it a colourable exercise and is undeceived by illusion .... 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 case~ in which the action impugned is to effect some object which is beyond the purpose 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 c impel the action, mala fides or fraud on power vitiates the acquisition or other official act."

15. The above exposition of law unfolds the right direction or the line of enquiry which the court has to pursue to test the validity of declaration made under Section 6( 1) exalted by the D legal protection accorded to it under sub-section (3 ).

16. In order to proceed on these lines, the ambit and contours of public purpose as understood by this Court in certain decided cases has to be taken note of We have already noticed the broad and general meaning of the expression ''public purpose" as stated by Batchelor, J. nearly E a century back. In the particular context of setting up industries by private enterprise, this Courts perspective of public purpose is discernible from certain decided cases to which we shall make reference.

17. In Jage Ram case (supra) the public purpose mentioned F in the notifications under Sections 4 and 6 was "the setting up of a factory for the manufacture of Chinaware and porcelain ware". The State Government had contributed a sum of Rs 100 as was done in the case of Somawanti (supra) towards the cost of the land. The question arose whether it was necessary for the G Government to proceed with the acquisition under Part VII of the Act. Holding that acquisition under Part VII need not have been resorted te, this Comt proceeded to discuss the question whether the as;quisition was intended for a public purpose. K.S. Hegde, J. speaking for the Court observed thus: (SCC p. 674, para 8) H

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

A "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 behalf of the State Government that the new State of Haryana was lacking in industries and consequently it had become difficult to tackle the problem of unemploymeni. There is also no denying the fact that the industrialization B 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 c established that the acquisition is sought to be made for some collateral 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 th<! acquisition made is for public purpose shall be conclusive evidence that the land is needed for a public purpose. Unless it D is shown that there was a colourable exercise of power, it is not open to this Court to go behind that dedaration and find out whether in a particular case the purpose for which the land was needed was a public purpose or not: see Somawanti v. Stqte of Punjab (supra) and Raja Anand Brahma Shah v. E State of U.P., AIR 1967 SC 1081. On the facts of this case there can be hardly any doub.t that the purpose for which the land was acquired is a public purpose."

18. li1 Somawanti case (supra) setting up a factory for the manufacture of refrigeration compressors and ancillary F equipment, was held to subserve public purpose. The importance of such industry to a State such as Punjab which had surplus food and dairy products, the possibl~: generation of foreign exchange resources and employment opportunities were all taken into account to hold that public purpose was involved in establishing the industry. It was observed: (AIR p. 169, para 55) G "55. On the face of it, therefore, bringing into existence a factory of this kind woul.d be a purpose beneficial to the public even though that is a private venture." The decisron in Jage Ram case (supra) was cited with approval H by this Court in Bajirao T. Kate v. State of Maharashtra ( 1995)

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 377 r ARUN MISHRA, J .1

2 SCC 442. In R.L. Arora v. State of U.P. AIR 1964 SC 1230 a A Constitution Bench of this Court observed that there was a definite public purpose behind the acquisition ofland for taking up works in connection with the setting up of a factory for production of textile machinery parts. How~ver, that was in the context of a case of acquisition tinder Part VII. B

19. These decisions establish that a public purpose is involved . in the acquisition ofland for setting up an industry in the private sector as it would ultimately benefit the people. However, we would like to add that any and every. industry need, not necessarily promote public purpose and there c<Ju[d be . exceptions. which negate the public purpose. But, it must be c borne in mind that the satisfaction of the Government as to the existence of public purpose cannot be lightly faulted and it must remain uppermost in the mind of the court.

20. Having noted the salient provisions and the settled principles governing the acquisition for a public purpose, it is D time to turn to Part VII dealing with acquisition of land for companies. The important point which we would like to highlight at the outset is that the acquisition under Part VII is not divorced from the element of public purpose. The concept of public purpose runs through the gamut of Part VII as well. E 21.._"Company" is defiped to mean by Section 3(e) as: (I) a company within the meaning of Section 3 of the Companies Act other than a government comp.any, (ii) a society registered under · the Sodeties Registration Act other than a cooperative society referred to in.clause (cc), and (iii) a cooperative society governed by the law relating to the cooperative· societies iIJ force fo any _ State other than a cooperative society referred to in clause {cc). An industrial concern employing not less than 100 workmen.and conforming to the other requirements specified in Section 38"A ·is also deemed to be a company for the purposes of Part VII. In order to acquire land for a company as defined above, the previous consent of the appropriate Government is the first requirement' and secondly,. t~e execution of agr-:ement by the company confomiing to the requirements of Section 41 is anothei:essentiaJ formality. Section 40 enjoins that consent should not be given by the appropriate Government unless it is satisfied that: (J) the H

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

A purpose of the acquisition is to obtain land for erection of dwelling houses for workmen or for the provision of amenities connected therewith; (2) that the acquisition is needed for construction of some building or work for a company which is engaged or about to engage itself in any industry or work which is for a public purpose; and (3) that the proposed acquisition is for the B construction of some work that is likely to be useful to the public. The agreement contemplated by Section 41 is meant-to ensure the compliance with these essentialities. It is a!So meant to ensure that the entire cost of acquisition is borne by ano paid to the Government by the company concerned. Thus, it is seen that c even in a case of acquisition for a company, public purpose is not eschewed. It follows, therefore, that the existence or non- existence of a public purpose is not a primary distinguishing factor between the acquisitfon under Part II and acquisition under Part Vil The real point of distinction seems io be the source of funds to cover the cost of acquisition. In other D words, the second proviso to Section 6(I) is the main dividin~i ground for the two types of acquisition. This point has been stressed by this Court in Srinivasa Coop. House Building Society Ltd. v. Madam G_urumurthy Sastry (1994) 4 SCC 675 at para 12: (SCC p. 684) E "In the case of an acquisition for a company simpliciter, the declaration cannot be made without satisfying the requirements of Part VII. But that does not necessarily mean that an acquisition.for a company for a public purpose cannot be made otherwise than under the provisions of Part VII, ifthe cost or F a portion of the cost of the acquisition is to come out of public funds. In other ·words, the essential condition for acquisition is for a public purpose and that the CQSt of acquisition should be borne, wholly or in part, out of public funds." The legal position has been neatly and succinctly stated by . G Wanchoo, J, speaking for the Constitution Bench in R.L. Arora v. State of U.P., AIR.1962 SC 764. This is what has been said: (AIR pp. 767-68, para 5) "Therefore, though the words 'public purpose' in Sections 4 arid 6 have the ·same meaning, they have to be read in the restricted sense in accordance with Section 40 when the

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 379 rARUN MISHRA, J.l

acquisition is for a company under Section 6. In one case, the notification under Section 6 will say that the acquisition is for a public purpose, in the other case the notification will say that it is for a company. The proviso to Section 6(1) shows that where the acquisition is for a public purpose, the compensation has to be paid wholly or partly out of public revenues or some fund controlled or managed by a local authority. Where however the acquisition is for a company, the compensation would be paid wholly by the company. Though therefore this distinction is there where the acquisition is either for a public purpose or for a company, there is not a complete dichotomy between - acquisitions for the two purposes and it cannot be c mai-ntained that where the acquisition is primarily for a _ company it must always be preceded by action under Part VII and compensation must always be paid wholly by the company. A third class of cases is possible where the_ acquisition may be primarily for a company but it may also D be at the same time for a public purpose and the whole or I part of compensation may be paid out of public revenues or I some fund controlled or managed by a local authority. In such a case though the acquisition may look as if it is primarily for a company it will be covered by that part of Section 6 which lays down that acquisition may be made for. E a pu,blic purpose if the whole part of the compensation is io be paid out of the public revenues or some fund controlled or managed by a local authority. Such was the case in Pandit_ Jhandu Lal v. State of Punjab, AIR 196} SC 343 .... It is only where the acquisition is for a company and its cost is to be met entirely by the company itself that the provisions of Part VII apply."

22. Thus the distinction between public purpose acquisition and Part VII acq!fisition has got blurred under the impact of judicial interpretation of relevant provisions. The main and perhaps the decisive distinction lies in the fact whether the cost of acquisition comes out ofpublic funds wholly or partly. Here again, even a token or nominal contribution by the Government was held to be sufficient compliance with the second proviso to Section 6 as held in a catena of decisions. The net result is that by contributing even a H

380 SUPREME COURT REPORTS [2016] 1I S.C.R.

A trifling sum, the character and pattern of acquisition could be changed by the Government. In ultimate analysis, what is considered to be an acquisition for facilitating the setting up of an industry in the 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 s~m towards B compensation. In the present state of law, that seems to be the real position.,, (emphasis supplied). In Pratibha Nema (supra) on due consideration of amended provisions, this Court has clearly laid down that the existence or non- e . existence of a public purpose is not a primary distinguishing facto"r between the acquisition under Part II and acquisition under Part VII. The real point of distinction seems to b~ the sour~e of funds to cover the - cost ofacquisition. The second proviso to section 6(1) is the main-driving ground for the two types of acquisitions. The amendment made in 1984 in section 6 does not deal with the concept of token consideration for -n such acquisition paid out of the public revenues. The second provision to section 6( 1)-makes it clear that where the compensation to be awarded for such property is to be paid out of the funds of the corporation, it is deemed to be compensation paid out of public revenue. Section 6 requires compensation determined to be paid out of the funds of the corporation then it would be deemed to be expenditure out of public revenue to make it acquisition under Part II. In tl1e instant case corporation has paid entire compensation. It is not a case of token amount paid out of public revenue . . _ 21. In Devii1der Singh & Ors. v. State of Punjab & Ors. (2008) 1 SCC 728, this Court has considered concept of public purpose and observed that when aIJ_ application is filed by a coll!-pany for acquisition but the decision of the State has to be seen how it intended to deal with such a prayer, is a relevant factor. In case of public purpose the acquisition -could be made at public· expense. Therefore, evidently the provisions made in Part II shall be 'resortep to. On the other hand if the State fonns an opinion that acquisition may not be for public purpose then the State would not bear the expenses and then the procedure laid down in Part VII shall be resorted to. This Court has laid down thus: "16. Whena request is made by any wing of the State or a . government company for acquisition ofland for a public purpose, different procedures are adopted. Wher(:, however,.tm

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 381 fARUN MISHRA, J.l

application is filed for acquisition of land at the instance of A a '"company'', the proced_ures to be adopted therefor are laid down in Part VII of the Act. Although it may not be decisive but the conduct of the State as to how it intended to deal with such a requisition, is a relevant factor. The action of the State provides for an important condition to consider as · B to whether the purpose 1!herefor a company requests" .it for acquisition of land is_ a public purpose and/or which could ·be made at public expenses either as a wh9le or in part, where/or evidently provis.ions.laid down in Part II shal{ be resorted to. On the othe{ hand, ifthe State forms an opinion that the acquisition of land at the instance of the company may not . C be for public purpose or, therefore the expenses to be incurred· therefor either in whole or in part shall not be borne by the State, the procedures laid down in Part VII thereof have to be resorted . to. The procedures laid down under Part VII of the AcCare exhaustive. The Rules have been framed prescribing the mode and manner in which the State vis-a-vis the company should D proceed. It provides for previous consent of the appropriate Government, execution of the agreement, previous inquiry before a consent is accorded, publication of the agreement, restriction / on transfer, etc. It also provides for statutory injm1ction that no land shall be acquired except for the purpose contained in Clause E (a) of sub-section (1) of Section 40 of the Act for a private company which is not a government company. For the purpose of Section 44-B of the Act, no distinction is made between a private company and a public limited company.

37. In this case we may notice that purported contribution had F been made only after the writ petitions wen~ filed. Ordinarily, this Court would not have gone into the said question but the agreement provides for payment of entire compensation by the Company. We do not know as to at what stage the State thought· "it fit to me~t a part of the expenses for acquisition ofland. Such. an opinion on the part of the State having rega.nt to the statutory · G scheme should have b_een formed prior to' entering into the agreement itself. The agreement does not mention about any payment of a part of compensation by the State. We, ~n the absence of any other material on record, must hold that the State had not formed any opinion in that behalf at least when the H

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A agreement was executed. The wisdom in all probabilities dawned on the officers of the State at a later stage.

38. Satisfaction on the part of the State required to.be arrived at upon formation of opinion on the basis of materials brought on record for the purpose of Part II of the Act are different' from B that of Part VII. Once the appropriate Government arrives at a decision that the land sought to be acquired is needed for a public purpose, the court would not go behind it, as the same may furnish a valid argument for upholding an acquisition under Part IL But when an acquisition is made under Part VII, the conditions and precedents therefor as c contained in the Companies Rules must be satisfied. On the face of record, if it can be shown that the Government liad ignored the mandatory provisions of the Act, the acquisition would have to be Struck down. ·

39. In Shyam Behari v. State of MP., AIR 1965 SC 427 it was held: (AIR p. 429, para 3) "3 . ... In the second-·place, the declaration under Section 6 may be made that land is needed for a company in which case the entire compensation has to be paid by the company. It is clear therefore that where the entire compensation is to be paid by a company, the notification under Section 6must contain a declaration that the land is needed for a company. NO" notification under Section 6 can be made where _the entire compensation is to be paid by a company declaring that the - acquisition is for a public purpose, for such a declaration requires that either wholly or in part, compensation must come out of public revenues or some fond controlled or managed by a local authority." ·

40. Distinction between acquisition under Part II and Part VII is self-evident. The State was not only obligated to issue a G notification dearly stating as to whether the acquisition is for a public purpose or for the Company. Section 6 categorically &tates 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.

H 54. In Srinivasa Coop. House Building Society Ltd. v. ,

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 383 [ARUN MISHRA, J.]

Madam Gurumurthy Sastry (1994) 4 SCC 675, noticing A Somawanti (supra) wherein it was held that the manufacturing of the articles was forthe benefit of the community and to save · substantive part of foreign ~xchange and staff qua!"_ters to workmen, it was held: (SCC p. 684,. para 12) "12 . ... On the other hand, in the case of an acquisition for B a company, the compensation has to be paid by the company. In such a case there can be,an agreement under Section 41 for transfer of the land acquired by the Government to the company on payment of the cost of acquisition, as also other matters. The agreement contemplated by Section 41 is to be entered into between. the company and the appropriate c Government only after the latter is satisfied about the purpose of the proposed acquisition, and subject to the condition precedent that the previous consent of the appropriate Government has been given to the acquisition. Section 6 is in terms, made subject to the provisions of Part VII of the Act. D Tlle~aeclaration for acquisition for a company shall not be made uni es~ the compensation to be awarded for the property is to be paid by a compan}'. In the case of an acquisition for a cqmpany simpliciter, the declaration cannot be made without satisfying the requirements of Part VII. But that does not necessarily mean that an acquisition for a company for a public E purpose cannot be made otherwise than under th~ provisions of Part VII, if the cost or a portion of the cost of the acquisition is to come out of public funds. In other words, the essential· condition for acquisition is for a public purpose and that the · cost of acquisition should be borne, wholly or in part, out of_ F public funds. Hence an acquisition.for a company may also be made fora public purp0se, within the meaning of the Act, if a part or the whole of the cost o(acquisition is met by public funds. If, on the other hand, the acquisition, for a company is to be made at the cost entirely of the.company.itself; such an acquisition comes under the provisions of Part VII." 0 ·..

55. Tl1e approach of the High Court in this behalf, in our opinion, is totally erroneous. A provision of a statute is either mandatory or directory. Even if a provision is directory, the same should. be substantially complied with. It cannot be ignored in its entirety H

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

A only because the provision is held to be directory and not an imperative one.

56. In this case admittedly there has been no compliance with Rule 4. If Rule 4 has not been complied with, the exercise of jurisdiction under Part VII must be held to have been B erroneous." (emphasis supplied) In the case of Devinder \supra) the acquisition was under Part VII and the State contribution of Rs. I 00/- towards cost of acquisition came during the pendency of the writ petition. This Court has held that the acquisition which was for a company could not be termed into c acquisition for a public purpose by making a nominal contribution during the pendency of the writ petition. However, this Court has laid down that the soul'ce of funds to cover the cost of acquisition is determinative of the applicability of the procedure in Part II or Part VII of the Act. In case fund is coming from the company then Patt VII would apply and not otherwise. " D

22. In Sooraram Pratap Reddy's case (supra), this Court h·as also dealt with the submission where the acquisition is for a private company whether it would be governed by the provisions of Part VII of the Act whereas the submission of the respondent was that pursuant to the Government policy it was to be acquired by APIIC and the entire compensation was to be paid by APIIC. As such the acquisition would fall under Part II of the Act. This Court has discussed the matter thus: "96. Whereas the contention ofthe appellants is that the so-called acquisition is for a private company and hence it would be governed by Part VII of the Act, the stand of the respondents is that it was in pursuance of industrial policy of the State that land was to be acquired by..APIIC and the entire amount of compensation was to be paid by APIIC and as such .,th~ acquisition is covered by Part II of the Act.

97. Our attention has been invited by the learned counsel. G for both the parties to some of the decisions on this issue. 98, Babu Barkya Thakur v. State of Bombay, AIR 1960 SC 1203 was probably the first leading decision of this Court on the point. In that case, a notification was issued by the,erstwhile State of Bombay on 3-4-1959 under Section 4 of the Act wherein H it was stated that the lands specified in the Schedule attached to

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 385 rARUN MISHRA, J.l

the notification were likely to be needed for the purpose ofM/s A Mukund Iron~ Steel Works Ltd., a companyregistered under the Companies Act, 1913. The petitioner lodged objections challenging the notification on the ground that the lands were not · required for "public purpose" and the proceedings were vexatious and malicious. In the counter-affidavit filed by the Special Land B Acquisition Officer, it was denied that the acquisition of the land was not for the public purpose and the proceedings were, therefore, vitiated. The Court, after referring to the Preamble and the relevant provisions of the Act, held that acquisition for company under the Act was for a "public purpose" inasmuch as constructing dwelling houses and providing amenities for the c benefit of workmen employed by the company would serve public purpose. The Court observed: (AIR pp. 1206-07, para 10) ·"JO . ... Further, though it may appear on the words of the Act contained in Part II, which contains the operative portions of the proceedings leading up to acquisition by the Collector D that acquisition for a company may or may not be for a public purpose, the provisions of Part·VII make it clear that the appropriate Government cannot permit the bringing into oper(\ti_on the effective machinery ofthe Act unless it is satisfied as aforesaid, namely, that the purpose of acquisition is to enable the company to erect dwelling houses for workmen employed by it or for the provision of amenities directly connected with the company or that the land is needed for construction of some work of public utility. These requirements indicate that the acquisition for a company also is in substance for a public purpose inasmuch as it cannot be seriously contended that constructing dwelling houses, and providing amenities for the benefit of the workmen employed by it and construction of some work of public utility do not serve a public purpose." (emphasis supplied)

99. In Pandit Jhandu Lal v. State of Punjab, .AIR 1961 G SC 343 the land of the appellant was sought to be acquired for construction of houses by members of Thapar Industries Cooperative Housing Society Ltd., Yamuna Nagar. Proceedings were, therefore, initiated for acquisition ofland under Part II of the Act. The action was challenged, inter alia, on the ground that H

386 SUPREME COURT REPORTS (2016] 11 S.C.R.

A there was non-compliance with the provisions of Part VII of the Act and the proceedings were liable to be qttashed as the said procedure had not been followed. The High Court held thatthe land was acquired for a public purpose and there was no need to comply with the provisions of Part Vll, even though the company was to pay the entire amount of compensation (which according B to this Court was not factually correct). The aggrieved landowner approached this Court.

100. According to this Court (in Pandit Jhandu Lal case (supra)~ the main point for determination was whether or not the acquisition proceedings had been vitiated by reason of the admitted fact that there was no attempt made by the Government to comply with the requirement of Part VII of the Act. Referring to Babu Barkya (supra) this Court held that the conclusion arrived at by the High Court was "entirely co~rect", though the process of reasoning by which it had reached the conclusion was erroneous.

101. The Court (in Pandit Jhandu Lal case (supra) observed that the Act contemplates acquisition for (i) a public purpose, and (ii) for a company; thus, conveying the idea that acquisition for a company, is not for a public purpose. It was also observed that the purposes of public utility, referred to in Sections 40 and 41 of the Act were akin to public purpose. Hence,, · acquisition for a public purpose as also acquisition for a company are governed by considerations of public utility. But the procedure for the two kinds of acquisitions is different and if it is for a company, then acquisition has to be effected in accordance with the procedure laid down in Part VII. Considering the ambit and scope of Sections 6 and 39 to 41 and referring to Babu Barkya (supra), the Court observed: (Pandit Jhandu Lal case (supra)., AIR pp. 346-47, para 8) "8 . ... There is no doubt that, as pointed out in the recent decision of this Court, the Act contemplates for a public purpose and for a company, thus conveying the idea that acquisition for a company is not for a public purpose. It has been held by this Court, in that decision, that the purposes of public utility, referred to in Sections 40-41 of the Act, are akin to public purpose. H Hence, acquisition for a public purpose as also acquisitions for

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 387 fARUN MISHRA, J.l

a company are governed by considerations of public utility. A But the procedure for the two kinds of acquisitions is different, insofar as Part VII has made substantive provisions for acquisitions ofland for companies. Where acquisition is made for a public purpose, the cost of acquisition for payment of compensation has to be paid wholly or partfy out of B Public Revenues, or some fund controlled or managed by a local authority. On the other hand, in the case of an acquisition for a company, the compensation has to be paid by the company. But, in such a case, there has to be an agreement, under Section 41, for the transfer of the land acquired by the Government to the company on payment of c the cost of acquisition, as also other matters not material to our present purpose. The agreement contemplated by Section 41 is to be entered into between the.company and the appropriate Government only after the latter is satisfied about the purpose of the proposed acquisition, and subject to the condition D. precedent that the previous consent of the appropriate Government has been given to the acquisition. The 'previous consent' itself of the appropriate Government is made to depend upon the satisfaction of that Government that the purpose of the acquisition was as laid down in Section 40. It is, thus, clear that the provisions of Sections 39-41 lay down conditions E precedent to the application of the machinery of the Land Acquisition Act, if the acquisition is· meant for a company." (emphasis supplied)

102. The Court then dealt with the extent and applicability of Section 6 of the Act and stated: (Pandit Jhandu Lal case F (supra), AIR p. 347, para 8) "8 . ... Section 6 is in terms made subject to the provisions of' Part 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 G compensation to be awarded for the property is to be paid by a company. The declaration for the acquisition for a public purpose, similarly, cannot be made unless the compensation, wholly or partly, is to be paid out of public funds. Therefore, in the case of an acquisition for a company simpliciter, the H

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A declaration 'cannot be made without satisfying the requirements of Part VII. But, that ~foes not necessarily mean that an acquisition for a company for a public purpose cannot be made otherwise than under the provisions of Part VII, ifthe cost or a portion of the cost of the acquisition is to come out of public funds. li1 other words, the essential condition for acquisition B for a public purpose is that the cost of the acquisition should be borne, wholly or in part, .out of public funds. Hence, an acquisition for a company may also be made for a public purpose, within the meaning of the Act, if a part or the whole of the cost of acquisition is met by public c funds. If, on the other hand, the acquisition for a company is to be made at the cost entirely of the company itself, such an acquisition comes under the provisions of Part VII. As in the present instance, it appears that part at any rate of the compensation to be awarded for the acquisition is to come eventually from out of public revenues, it must be held D that the acquisition is not for a company simpliciter. It was not, therefore, necessary to go through the procedure prescribed by Part VIL We, therefore, agree with the conclusion of the High Court, though not for the same reasons." (emphasis stfpplied)

E 106. fo R.L. Arora (If) v. State of U.P, AIR 1962 SC 764 this Court held that in view of the amendment made in the Act, even ifthe acquisition did not satisfy conditions laid down under clause (a) and clause (b) of sub-section (I) of Section 40 of the Act, it would be valid, if they satisfy conditions in clause (aa) F introduced by the Amendment Act. It was also held that once the Government decided to acquire land for public purpose, such acquisition cannot be challenged on the ground that procedure laid down in Part VII had not been followed. The Court, keeping in view the Land Acquisition (Amendment) Act, 1962 (Act 31 of 1962), held that clause (aa) of sub-section (I) of Section 40 as G inserted by Act 31 of 1962 did not contravene Article 31 (2) or , Article 19(1 )(()of the Constitution. Accordingly, the acquisition was held legal and valid.

107. A special reference may be made to a decision of the Division Bench of the High Court of Gujarat in Motibhai H

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 389 fARUN MISHRA, J.l

Vithalbhai Patel v. State of Gujarat AIR 1961 GUJ 93. In A Motibhai (supra) land was soughtto be acquired for a company, namely, Sarabhai Chemicals for its expansion. It was contended that acquisition was not for public purpose under Section 4 of the Act and it was bad in law.

108. Considering the relevant provisions of the Act as also B leading cases on the point, the Com1 (in Motibhai case (supra) held that even if the acquisition of land is for a private concern whose sole aim is to make profit, the intended acquisitio'n ofland would materially help in saving foreign exchange in which the public is also vitally concerned in our economic system. If can, therefore, be said to be a public purpose and would not be bad. c The Court stated: (Motibhai case (supra), AIR p. I 04, para 42) "./2. This is just as well. So diverse and varied can be the activities, engagements and operations which may redound to the general benefit of the public and in ..yhich the general interest of the public can be said to be really involved that it is impossible to expect a definition exclusive or inclusive which will aptly meet every particular objective within the matrix of public purpose and not fail in some circumstances. The expression is of convenient vagueness and the court can at best give temporary definiteness but not definitiveness to the undefined and shifting boundaries of a field which now seems likely to raise some frequent and fighting issues and give rise to different problems for adjudication." It was also observed: (Motibhai case (supra), AIR p. I 04, para - 43) F "./3. Public purpose is not a constant. The scope of an expression which conjugates general interest of the public must necessarily depend inter alia on social and economic needs and broad interpretation of the democratic ideal. It must alter as social and economic conditions alter. The social G and economic theorist may contend for an extremely wide application of this concept of public purpose and overemphasise the element of the general interest of the public. The reactionary on the other hand may strive for stringent restraints on its shifting boundaries and oppose any shift in emphasis. The true rule of the matter would seem to lie midway. The Court will H

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

A not attach too much weight to the apparent character of the activity or agency but would prefer to lean in favour of an application of the rule which has regard to the· substance of the matter and embraces activities, engagements and operations which would serve the common good as being affected with public interest. The application of the rule must rest on the B modern economic system of a welfare State having its own requirements and problems. The application of the rule would not be governed by right distinctions nor would the economic principle be allowed to be blurred by the blending offorms and interests." (emphasis supplied) c The Court proceeded to state: (Motibhai case (supra); AIR p. I 04, para 44) "44. In the field of economic progress and interest of the ·public the application ofthe rule would include operations which are more or less indispensable to the community. The very lack of definitiveness of the expression public purpose, somewhat paradoxical though it may s::em requires that the field of its coverage must extend to concerns which are fit to serve the common welfare. That coverage can include activities open to the initiative of both pri_vate enterprise and public administration for private enterprise is certainly amenable to public control and can be an efficient instrument of economic benefit." Upholding the acquisition, the Court concluded: (Motibhai case (supra), AIR p. 105, para 48) F "48 . ... It cannot be ignored that Respondent 2 Company is a scheduled industry controlled by the provisions of the Industries (Development and Regulation)Act, 1951. The price of its products is subjectto these controls. We are also satisfied that the public is vitally concerned in the saving of foreign exchange in our present economic situation and that this is an aspect of the matter which has to be borne in mind. We are satisfied that the respondents are correct in their submission that the intended acquisition oflands in dispute would materially help in the saving of such exchange. We have to consider together all the aspects of the case which redound to and result in the benefit of the public and on an assessment of all the

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 391 rARUN MISHRA, J.l

facts and circumstances of the case and the cumulative effect of the same_ we are of the opinion that the land in dispute is . n~eded for a public purpose as contended by the respondents. We may add that the notifications under Sections 4 and 6 are not defective on any of the grounds urged before us on behalf of the petitioner-as held by us and the declar,ation under Section B 6 is conclusive evidence that the land in dispute is needed for a public purpose."

112. In S.S. Darshan v. State of Karnataka ( 1996) 7 SCC 302 land was sought to be acquired under the Act for public purpose, namely, for setting up Information Technological Park. Challenging the acquisition, it was contended by the petitioners G that the acquisition was mala fide and in colourable exercise of power since primarily the acquisition was for a private limited company and not for the State. The relevant part of the notification read thus: (S.S. Darshan case (supra), SCC p. 304, para 5) "The lands shown in the annexed index are required for a public H

392 SUPREME COURT REPORTS r2o 16111 s.c.R.

A purpose, that is, to establish information technological park through Karnataka Industrial Areas l)evelopment Board." (emphasis supplied) Emphasising the fact that the acquisition was through the Board, this Court ruled that acquisition was for a public purpose. The B notification stated ab"out public purpose of establishment of information technological park through the Board. Considering various clauses in the joint venture agreement, the Court held that the cumulative effect of all went to show that acquisition was for the public purpose of setting up technological park by the Government of Karnataka through the Karnataka c Industrial Areas Development Board and was, therefore, valid.

113. In W.B. Housing Board v. Brijendra Prasad Gupta (1997) 6 sec 207 land was acquired for providing houses to poor people. The action was challenged, inter alia, on the ground that the Housing Board was to earn profit and hence it could not have been said to be a public purpose. Refuting the contention and upholding the acquisition, the Court took note of the fact that it was a matter of common knowledge that there is acute shortage of housing accommodation both in rural and urban areas of the country. The Court also stated that since late the prices of real estate have sky-rocketed making it beyond the reach of low income and middle income groups of people, hence, the ·State has a duty to give shelter to homeless people, specially, to the people of the low .income group. If for that purpose it sought to acquire land, it could not be said that acquisition was illegal or unlawful. F

114. Regarding earning of profit, the Court stated: (Brijendra Prasad Gupta case (supra), SCC p. 225, para 26) "26. Simply because there is an element of profit, it could not make the whole scheme illegal. A private entrepreneur will certainly look to some profit but to see that the profit motive does not lead to exploitation even of the rich and that the houses are available to the poor people and to middle class people at nominal or affordable prices, or even on no-profit-no-loss basis, the Housing Board exercises the necessary control. It is certainly a public purpose to provide houses to the comqmnity especially to poor people for whom the prices are beyond their

KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS. 393 fARUN MISHRA, J.l