SHYAM NANDAN PRASAD AND ORS.versusSTATE OF BIHAR AND ORS.

              SHYAM NANDAN PRASAD AND ORS.                               A
                            v.
                 STATE OF BIHAR AND ORS.

                          AUGUST 13, 1993

      (A.M. AHMADI AND MADAN MOHAN PUNCHHI, JJ.]                         B

      Land Acquisition Act-Section 4(as applicable to Bihar)-Secn·ons
3(c), SA, 6, 35, 38-Public Pwpose-Scope of-Obligation of the Collector
and nature of his functions---Scope of Section 55 of the Act.

       Acquisition of land for companies-Sections 39 and 40 of the       c
Act-Scope of-Private Company vis a vis Govenunent Companr-Distinc-
tive features-Relevance of the status of society.

      TI1e appellants are members of Bihar Finance Service House
Construction Cooperative Society, floated by members of Bihar Finance D
Service who were landless and did not own residential plot or house in
the city of Patna, but its membership was statedly open to everyone who
was similarly landless. In 1973 the society put up a proposal for
ac<1uisition of 59.95 acres of land, upon which the State Government
issued notification u/s 4 of the Land Acquisition Act inviting objections E
u/s SA. This was followed after legal formalities, by notification u/s 6 of
the Act in respect of the total land except 5 acres set apart for allotment
to persons likely to be disturbed.

     The High Court at Patna quashed the declaration u/s 6 of the Act
and remitted the matter to the Government for reconsideration :          F
Whether the impugned action was in violation of section SA of the Act.
The matter came up in appeal before this Court.

      Allowing the appeal and remitting the matter to the High Court,
this court
                                                                         G
     HELD : The compliance of Section SA is mandatory. And affording
of opportunity of being heard to the objector is a must. [539-E]

    Sh1i Mandir Sita Ramji v. Lt. Govemor of Delhi and others, (1975]
4 SCC 298 and Shri Farid Ahmed Abdul Samad and another v. The H
                                 533
    534                 SUPREME COURT REPORTS [1993] SUPP. 1 S.C.R.

A   Municipal C01poration of the City of Alunedabad and another, [1976] 3
    sec 719, referred to.
        The provisions of Section SA embody a just and wholesome
  principle that a person whose property is being or is intended to be,
B acquir~d should have the occasion to persuade the anthorities concerned
  that his property be not touched for acquisition - the right is absolute,
  unless the appropriate government chooses tu dispense with its ap-
  plicability under tbe law. [539-F]

        It is plain from the language of section 41 that unless the proposed
C acquisition is ·of the three kinds mentioned in clauses (a), (aa) and (b)
  of Section 40 and is found to be needed for one or the other of these
  purposes, neither is the appointed officer, to whom the enquiry is
  entrusted, empowered to verdict in fuvour of a company and nor is the
  government without recording such satisfaction expected to give consent.
D The agreement is then required under Section 42 of the Act to be
  published in the official Gazette as soon as may be after execution and
  thereupon have the same effect as if it had formed the part of the Act.
  The right of the public to use the work being pervasive in the considera-
  tion of and acceptance of report by the Government, signified by consent,
E goes to show the dominant purpose of public utility governing the
  deliberation and decision. [542-C-E]

          Section 44B distinguishes between a private company and Govern-
    ment company. However, since the society is neither a Government
F   company nor a private con1pany the impediment of Section 44B towards
    confining the choice of acquisition for private company for one purpose
    is out, the Society as a public company would require to satisfy that it
    requires the land for any of the purposes mentioned in clauses (a),
    (aa) and (b) before it can obtain consent of appropriate Govern-
G   ment. However, in order to approach the Government with a request for
    acqnisition the company has to satisfy the provisions of Rule 4, while a
    Land Acquisition Committee is constituted under Rule 3 ibid. Rule 4 is
    mandatory and essential to be complied with.
                                                    [542-F; 543-D, F; 545-H]

H         State of Gujarat and another v. Patel Chatwbhai Nanibhai and
                  S.N. PR/\SAD 1'. STATE OF BIH/\R                      53.'i

others, [1975] I SCC SX3; State of Gujarat and othen· v, Am/Ja!a/               A
Haidcrbhai and others, [1976] 3 SCC 495 (499) and Ge11cra/ Govt. Sen•ants
Cooperative Hous;ng Sodety Ltd. a11d others v. Sh. Wahab Uddin a11d
others, [1981] 2 sec 352, relied on.

     The acquisition of land for a company is in substance for a public
                                                                                B
purpose as all those activities mentioned in Section 40 serve the public
purpose. The acquisition for the company and the purpose for it, can
be investigated under Section SA or Section 40 of the Act, necessarily
after notification u/s 4 of the Act. [548-F]

     Babu Barkya 17iakur v. State of Bombay (now Maharashtra) and               C
othm·, AIR (1960) SC 1203, referred to.

      Therefore the plea set up on behalf of the appellants that when
their society could not be treated either as a private or a governn1e.rrt
ro1npany, was no con1pany at all so as to remain bound to comply \'Vith D
chapter VII of the Act, is of no substance. The society as a company is
bound to satisfy the requirements of Section 40 before taking aid of
Sections 6 to 37 of the Act to promote its intended purpose. [549-B]

       The High Court should not have upset the notification u/s 6 of the
Act as a whole and should have individualised justice vis-a-vis each writ E
petitioner before it, having regard to the equities interplaying in each
case and to the regulation of its discretion keeping in view host of other
factors which weigh with the High Court to deny, grant or mould relief
even when illegalities in procedure keep staring. [549-D]
                                                                                F
      CIVIL APPELLATE JURISDICTION: Civil Appeals No. 3902-26
of 1993.

      From the Judgment and Order dated 22.2.90 of the Patna High Court
in CWJ No. 2755/88, 953, 957, 2963, 1618, 93, 924, 2780, 904, 940, 983, 998,    G
1040, 1041, 1042, 1108, 1179, 2365, 875, 877, 1688/84, 2962, 6000, 2849 &
5904/1983.

      P.P. Rao, S.S. Ray, R.K. Jain, M.L. Verma, R.Shankar Prasad, AK
Srivastava, Rakesh K.Khanna, R.P. Singh, Manoj Goel, Ms. Abha R.
Sharma, Ashish Verma, A Sharan, K.L Taneja, Ejaz Maqbool, B.K.                  H
    536                   SUPREME COURT REPORTS [1993] SUPP. l S.C.R.

A Mishra, D.P. Mukherjee, B.B. Singh and Uma Dutta for the appearing
    parties.

          The .Judgment of the Court was delivered by

          PUNCHHI, J. Special leave granted in this bunch o[ petitions.
B
        These appeals are directed against the common judgment and order
  dated 22.2.90 passed by a Division Bench of the Patna High Court in a
  batch of writ petitions, preferred before it in the years 1983 and 1984,
  excepting one in the year 1988, whereby declaration under Section 6 of the
C Land Acquisition Act ('the Act') dated 16/18.3.83 was quashed and the
  case remitted to the State Government for further proceedings under two
  heads.

          The appellants herein arc a few members of the Bihar Finance
D   Service House Construction Cooperative Society, a society registered
    wayback in the year 1973, under the Bihar and Orissa Cooperative Societies
    Act. Its members, the appellants state, are about 40.0 in number. It was
    stated to have been floated by members of the Bibar Finance Service who
    were landless and did not own any residential plot or house in the city of
E   Patna. Statedly, its membership was not confined to the members of the
    Bihar Finance Service al?ne but was open to everyone who was similarly
    landless. The Society was organised and knit to secure from the State
    Government land by acquisition so that the society could give plots to its
    members or build houses and give them put its members. For the purpose,
    in 1973 itself it put a proposal to the State Government to acquire 59.95
F   acres of land in the revenue estate of village Kumhrar, a Part of the City
    of Patna. After some steps,· the State Government issued a notification
    un.der Section 4 of the Act on 21.4.81 inviting interested persons to file
    their objections under Section 5A of the said Act. On objection received
    from interested persons, and disposed of by the Additional Land Collec-
G   tor, and on report submitted, declaration under Section 6 of the Act was
    made to acquire land to the extent aforementioned except 5 acres which
    were .<et apart for allotment to persons likely to be disturbed by the
    acquisition. On wrii petitions filed, the High Court quashed the declaration
    under Section 6 remitting back the matter to the State Government for
H   reconsideration on two counts, one such count being violation of the
          S.N.PRASAD v. STATEOFBIHAR [PUNCHHl,J.]                          537

mandatory provisions of Section 5-A. This is how the matter has come              A
before us in appeal.

       It prominently needs to be mentioned, at this stage, that both the
notifications under Sections 4 and 6 were issued in the State of law as was
existing prior lo the passing of the Land Acquisition (Amendment) Act,
1984 (Act No. 68/1984). This law on the subject rather was substituted and        B
amended by various Bihar legislative enactments. It is to the law as ap-
plicable in the State of Bihar shall we henceforth advert to for deciding
this matter.

       Section 4 of the Land Acquisition Act as applicable to Bihar provides      C
as follows :

             ''Sub-section (1):- Whenever it appears to the appropriate
        Government or the Collector that land in any locality is needed or
        is likely to be needed for any public purpose, a notification lo that
        effect shall be published at the office of the Collector, at the office   D
        of the sub-divisional officer, at the offices of the smallest revenue
        adn1inistrative unit and Ci-ram Panchayat, if any, constituted under
        the Bihar Panchayat Raj Act, 1947 (Bihar Act VII of 1948), and
        al some conspicuous place in the village in which the land is
        situated; and the Collector shall cause copies of the notification to     E
        be served on all persons known or believed to be interested in the
        the land."

            Explanation:- For the purpose of this section the expression
        ·~smallestrevenue adn1inistrativc unitrr shall mean nthc revenue          F
        administrative unit next bclo\V that-of a,s~-division whether known
        for the lime being as N.E.S. Block, Circle,Anchal or otherwise."

            "Sub-section (2):- Thereupon it shall be lawful for any officer,
        either generally of specially authorised hy such Government or the
        Collector in this behalf, an<l for his servants and workmen to enter G
                                                                     1

        upon and survey and take lands of any land in such locality


      By virtue of clause (c) of Section 3, the expression 'Collector' means
the Collector of a district and includes a Deputy Commissioner, Additional        H
    538                    SUPREME COURT REPORTS (1993] SUPP. I S.C.R.

A Collector, Additional Deputy Commissioner and any officer specially ap-
    pointed by the appropriate Government to perform the functions of a
    Collector under this Act except the functions under Sections 4, 5-A, 6, 35
    and 38.

          By virtue of clause (!) of Section 3 the expression "public purpose"
B includes provision for or in connection \Vith:-

               (i) sanitary improvements of any kind, including reclamation;
            and

               (ii) the laying out of village-sites, townships or the extension,
c           planned development or improvement of existing village-sites or
            township. 11

            Sub-section (1) of Section 5-A as in Bihar provides that any person
    interested in any land which has been notified under Section 4, sub-section
D   ( l), as being needed or likely to be needed for a public purpose or for a
    company may, within thirty days from the date of the publication of the
    notification referred to in the said sub-section at some conspicuous place
    in the village in which the land is situated or of the service of the copy
    thereof on him, whichever is later, object to the acquisition of the land or
    any land in the locality, as the case may be.
E
          Sub-section (2) substitutedly in Bihar provides that every ohjection
    under sub-section (1) shall be made in writing to the Collector who shall
    give the objector an opportunity of being heard either in person or by
    pleader and shall, after hearing all such objections and making such further
F   enquiry, if any, as he thinks necessary, decide the objection: Provided that
    the appropriate (i-overnn1ent n1ay, either of its own motion or on the
    application or'any person interested in the land call for the record of the
    proceedings held by the Collector and pass such order as it thinks fit; and
    further that the onler of the appropriate Government and subject to such
G   order, the decision of the Collector, under clause (i) shall be linal.

          At the pre-Section 6 stage, besides the mode of publications at
    varioll' places where the land is situated, personal service of the copy of
    the notification is pro1nincntly required to be made on the person inter-
    ested so that he can n1akc objections in \Vriting to the Collector., and on
H   objections being made, the Collector is obliged to give to the objector
           S.N.PRASAD v. STATEOFBIHAR[PUNCHHI,.l.]                        539

opportunity of being heard either in person or by pleader. The Collector A
is further obliged Lo hear all such individual objections, make such further
enquiries as necessary and then required to make an appropriate decision
reporting the same to Lhe Government. The decision of the Collector is
supposedly final unless the appropriate Government choses to interfere
therein and cause affeclation, suo motu or on the application of any person
                                                                                  B
interested in the land. These requirements obviously lead to the positive
conclusion that the proceeding before the Collector is a blend of public
and individual equiry. The person interested, or known to be interested, in
the land is to be served personally of the notification, giving him the
opportunity of objecting to the acquisition and awakening him to such
                                                                                c
right. That the objection is to be in writing, is indicative of the fact that the
enquiry into the objection is to focus his individual cause as well as public
cause. That at the time of the enquiry, for which prior notice shall be
essential, the objector has the right to appear in person or through pleader
and substantiate his objection by evidence and argument. And lastly, since
the decision of Lhe Collector may turn out to be final, unless interfcrrcd D
with by the government, suo motu on application, the Collector's decision
is that of a quasi-judicial authority, arrived at by quasi-judicial methods.

       That the compliance of provisions of Section 5-A is mandatory, is
beyond dispute. See in this connection, Shri Mandir Sita Ramji v. Govemor
of Delhi and others, [1975] 4 SCC 298 and Sh1i Fwid Ahmed Abdul Samad E
and another v. The Municipal Corporation of the City of Ahmedabad and
another, [1976] 3 SCC 719. Affording of opportunity of being heard to the
objector is must. The provision embodies a just and wholesome principle
that a person whose property is being, or is intended to be, acquired should
have the occasion to persuade the authorities concerned that his property F
be not touched for acquisition. This right is not absolute, however, if the
appropriate Government, in its discretion, choses to dispense with its
applicability by invoking urgency provisions of l7 of the Act. But once
Section 5-A is kept applicable, there is no cause to treat its provisions
lightly or casually.                                                         G


      The other count on which the High Court made the remand was the
supposal violation of Section 40 of the Act and Rule 4 of the Land
Acquisition (Companies) Rules, 1963 (hereinafter referred to as 'the
Rules') framed by the Central Government in exercise of the power               If·
    540                   SUPREME COURT REPORTS [1993] SUPP. 1 S.C.R.

A conferred by Section 55 of the Act. To appreciate this aspect of the matter,
  it would have to be cleared as to what is the status of the cooperative
  society of which the appellants are the members. The cooperative society
  (which by now stands impleaded as a respondent but due to the Registry's
  procedural objection application for its transposition as appellant has not
B been heard) is a company by the thrust of sub-section (e) of section 3. It
  provides that the expression "company" means a company registered under
  the Indian Companies Act, 1982 or under the English Companies Act, 1862
  to 1890, or incorporated by an Act of Parliament of the United Kingdom
  or by an Indian law or by Royal Charter or Letters Patent and includes a
  Society registered under the Societies Registration Act 1860, and a
C registered society within the meaning of the Cooperative Societies Act,
  1912 or any other law relating to cooperative societies for the time being
  in force in any State. This definition in the Act is qualified with nothing
  repugnant to be found in the subject or context. A separate chapter in the
  Act as Part VII is provided for acquisition of lands for companies. Section
D 39 provides the previous consent of the appropriate Government for the
  purpose, and execution of an agreement between the State and the Com-
  pany is necessary if land was being acquired by the State for the Company.
  The prohibition is to the effect that the provisions of Sections 6 to 37 (both
  inclusive) shall not be put in force in order to acquire land for any company
  unless with the previous consent of the appropriate Government, nor
E unless the company shall have executed the agreement hereinafter men-
  tioned. Proceedings up to the conclusion of the result of objections under
  Section 5-A could, all the same, go on with the State Government cooperat-
  ing but the provisions of Section 6 onwards till Section 37 (both inclusive)
  can only be deployed in order to acquire land for any company on the
F satisfaction of two conditions, that is, (i) the previous consent of the
  appropriate Government for the purpose, and (ii) the company having
  executed the agreement of the kind mentioned in the succeeding Sections.
  Section 40 provides that the consent of the appropriate Government shall
  not be available unless it is satisfied either on the report of the Collector
  under Section 5-A sub-section (2) or by an enquiry of the kind conceived
G of was held as provided in Section 40 itself. Either of the two reports, that
  is, one made by the Collector under sub-section (2) of Section 5-A and the
  other as a result of the deliberations under Section 40, are at par for
  adoption by the appropriate Government to give consent under Section 39.
  The enquiry conceived of under Section 40 could be through an officer
H
           S.N. PRASAD v. STATE UFBIHAR [PUNCHHI, J.]                     541

appointed by the appropriate Government, held at appointed time and A
place in order to determine which out of the following three objects of
acquisition arc sought to be achieved by the company:

       (a) that the purpose of the acquisition is to obtain land for the
erection of dwelling house for workmen employed by the company or for
the provision of amenities directly connected therewith, or                      B

      (aa) that such acquisition is needed for the construction of some
building or work for a company which is engaged or is taking steps for
engab~ng itself in any industry or v.o;·k which is for a public purpose; or


      (b) that such acquisition is needed for the construction of some work      c
and that such work is likely to prove useful to the public.

The officer appointed to hold the enquiry is empowered under sub-section
(3) of Section 40 to summon and enforce attendance of witnesses and
compel the production of docun1cnt.s by the sa1ne n1eans and , as far as D
possible, in the same manner as is provided by the Code of Civil Procedure
in the case of a Civil Court.

       Thereupon Section 41, mentions that if the appropriate Government
is satisfied after considering the report, if any, of the Colle~tor under
Section 5-A, sub-section (2) (and there may be none in an urgent acquisi-        E
tion) or on the report of the officer making an inquiry under Section 40,
that the proposed acquisition is for any of the purposes referred to in
clauses (a), (aa) or (b) of sub-section (1) of Section 40 it shall require the
company to enter into an agreement with the appropriate Government,
providing to the satisfaction of the appropriate Government for the follow-      F
ing matters, namely:-

      ( 1) the payment to the appropriate Government of the cost of the
acquisition;

      (2) the transfer, on such payment, of the land to the company;             G
      (3) the terms on which the land shall be held by the company;

      (4) where the acquisition is for the purpose of erecting dwelling
houses or the provision of amenities connected therewith, the time Within
which, the condition on which and the manner in'which the dwelling houses        H
    542                   SUPREME COURT REPORTS [1993) SUPP. 1 S.C.R.

A or amenities shall erected to provided;

          ( 4-A) where the acquisition is for the construction of any building or
    work for a company which is engaged or is taking steps for engaging itself
    in any industry or work which is for public purpose, the time within which,
    ~nd the condition on which, the building or work shall be constructod or
B   executed;

           (5) where the acquisition is for the construction of any other work
    the time within which and the conditions on which the company shall be
    entitled to use the work.
c        It is thus plain from the language of the Section 41 that unless the
   proposed acquisition is of the three kinds mentioned in clauses (a), (aa)
   and (b) of Section 40 and is found to be needed for one or the other of
   those purposes, neither is the appointed officer, to whom the enquiry is
   entrusted, empowered to verdict in favour of a company and nor is the
1) Government without recording such satisfaction expected to b>ive consent.
   The agreement is then required under Sectioq 42 of the Act to be publish-
   ed in the official Gazette as soon as may be after execution and thereupon
   (so far as regards the terms on which the public shall be entitled to use the
   work) have the same effect as if it had formed part of the Act. The right
E of the public to use the work being pervasive in the consideration of and
   acceptance of report by the Government, signified by consent, goes to show
   the dominant purpose of public utility governing the deliberation and
   decision. Section 44-A imposes the restriction on transfer of any land
   acquired under Part VII by sale, mortgage, gift, lease or otherwise except
   with the previous sanction of the appropriate Government. And finally,
F Section 44-B distinguishes between a private company and a Government
   Company providing that notwithstanding anything contained in th Act. No
   land shall be acquired under this Part, except for the purpose mentioned
   in clause (a) of sub-section (1) of Section 40, for a private company which
   is not a Government company. The explanation added thereto says that
G    Private Company11 and 11 Government Company11 shall have the meaning
    11



    respectively assigned to them in the Companies Act, 1956.

          Now when we direct ourselves to the provision of the Companies
    Act, Section 2(10) provides that a company means a company as defined
    in Section 3, Section 3 defines compfuy to be a company formed and
H   registered under the Companies Act or an existing company as defined
          S.N. PRASAD v. STAI lo OFBIHAR [PUNCHHI. J.]                 543

therein. "Private Company" has been defined to mean a company by A
articles of which the right to transfer its shares, if any, is restricted and
the numbers is limited to fifty, but not including some persons detailed
therein, and prohibits any invitation to the public to subscribe for any
shares in, or debentures of the company. In contrast, "Public Company"
residually means a company which is not a private company. "Government
Company" under Section 2(18) means Government company within the
                                                                              B
meaning of Section 617, which in turn says that a Government Company
means any company in which not less than 51 per cent of the paid-up
share capital is held by the Certral Government or by any State Govern-
ment or Governments or partly by the Central Government and partly by
one or more State Government and includes a company which is a               c
subsidiary of a Government Company as thus defined. So understood,
the society of which the appellants are members could never be a
Government company for no Government has subscribed to its share
capital. The society could not also be a private company for it has more
than 50 members, the figure of membership put at 400. Since the society D
is neither a Government Company nor a private company, the impediment
of Section 44-B towards confining the choice of acquisition for a private
company for one purpose is out. Since the society i.< not a private
company, by process of exclusion it becomes under Section 3 of the
Companies Act, a "public company" even though not formefi and
registered under,the said Act but only by the statutory inclusion in Section E
3( e) of the Land Acquisition Act bringing in a cooperative society
registered under a state law to be definedly a company as if a company
registered under the Companies Act. All the same, the society as a public
company would require to satisfy in an enquiry under Section 40 of the
Act that it requires that land for any of the purposes mentioned in clauses
(a), (aa) and (b) before it can obtain consent of the appropriate Govern-
                                                                              F
ment on the basis thereof and enter in to an agreement as envisage under
Section 41 before switching on to have the role of Section 6 onwards tiU
Section 37 of the Act played. The importance of such enquiry and report
as contemplated under Section 40, in the light of Section 41, is to serve
a double purpose as it may steer an acquisition if Section 5-A was G
dispensed with because of urgency under Section 17 and secondly to
provide a safe alternate should there be any fault in the conduct of
enquiry under Section 5-A of the Act. So one or the other must be kept
handy and if per chance one is defective, when both existing, the other
can be deployed to satisfy the requirement of law.
                                                                             H
    544                    SUPREME COURT REPORTS [1993] SUPP.1 S.C.R.

A          But that is not the be-all and end-all for the company. In order to
    approach the Government with a request for acquisition the company has
    to satisfy the provisions of the Rules also. Rule 4 enjoins as under:-

               "4. Appropriate Government to be satisfied with regard to
            certain matters before initiating acquisition proceedings: - (l)
B           Whenever a Company makes an application to the appropriate
            Government for acquisition of any land, that Government shall
            direct the Collector to submit a report to it on the following
            matters, namely -

            (i),   that the company has made its best endeavour to find out
c                  lands in the locality suitable for the purpose of acquisition;

            (ii) that the company has made all reasonable efforts to get such
                 lands by negotiations with the persons interested therein on
                 payment of reasonable price and such efforts have failed;
D           (i!i) that the land proposed to be acquired is suitable for the
                   purpose;

            (iv) that the area of land proposed to be acquired is not exces-
                   sive;

E           (v)    that the company 1s m a position to utilise the land ex-
                   ·expeditiouslyj and

            (vi) where the land proposed to be acquired is good agricultural
                 land, that no alternative suitable site, can be found so as to
                 avoid acquisition of that land.
F
               (2) The Collector shall, after giving the company a reasonable
            opportunity to make any representation in this behalf, hold an
            enquiry into the matters referred to in sub rule (1) and while
            holding such enquiry he shall -
G
            (i)    in any case where the land proposed to be acquired is agricul-
                   tural land consult the Senior Agricultura~ Officer of the
                   district whether or not such land is good agricultural land;

            (ii) determine, having regard to the provisions of Sections 23 and
H                24 .of the Act, the approximate amount of compensation likely
              S.N. PRASAD v. STATE OF BIHAR [PUNC!Ull, J. J                545

                to be payable in respect of the lan<l, which, in the opinion of   A
                the Collector, .,l10ul<l be acquired for the Company; an<l

        (iii) ascertain whether the company offered a reasonable price
              (not being less than the compensation so determined), to the
              persons interested in the land proposed to be acquired.
                                                                                  B
            Explanation - For the purpose of this rule "good agricultural
        land" means any land which, considering the level of agricultural
        production and the top pattern of the area in which it is situated,
       "is of average or above average productivity and includes a garden
        or grove land.
                                                                                  c
            (3) As soon as may be after holding the enquiry under sub-rule
        (2) the Collector shall submit a report to the appropriate Govern-
        ment and a copy of the same shall be forwarded by the Government
        to the Committee.
                                                                                  D
          (4) No declaration shall be made by the appropriate govern-
        ment under Section 6 of the Act unless-

        (i)     the appropriate Government has consulted that Committee
                and has considered the report submitted under this rule and
                the report, if any, submitted under section 5A of the Act; and    E

        (ii) the agreement under Section 41 of the Act has been executed
             by the company.

       Under Rule 3, a Land Acquisition Committee is constituted for the
purpose of advising the appropriate Government in relation to acquisition F
of land under Part VII of the Act, which is required to tender it advice
within one month from the date of which it is constituted though the time
can be extended by two months. Here again the Collector is required to
hold an enquiry in a quasi·judicial sense and would give not only to the
company a reasonable opportunity to make good it representations in that
behalf but would also, to fulfil the needs of rules of natural justice, give G
sufficient opportunity to the land owners to refute the case of the company
at least in so far as the matter like negotiation of price is concerned, as
also on other relevant matters. That Rule 4 is mandatory and essential to
be complied with has been ruled by this Court i!l various decision"' Refer-
ence may be made to some of them being : State of Gujarat and another v. H
   546                   SUPREME COURT REPORTS [1993) SUPP.1 S.C.R.

A P11tel Clwtwbhi Narsibhai and others, [1975] 1 SCC 583; State of Gujarat
    wd others v. Ambala/ Haiderbhai and others, [1976] 3 SCC 495 (499) and
    General Govt. Servants Cooperative Housing Society Ltd. and others v. Sh.
    Wahab Uddin an others, [1981) 2 SCC 352.

          The High Court, in the facts and circumstances, has, however, held
B that no report of the enquiry under sub-Rule (2) of Rule 4 was forwarded
  by the State Government lo the Land Acquisition Committee and it
  consented to the acquisition in violation of the command of law. The High
  Court has also gone on to say that the consent of the State Government
  violated sub-Rule (3) of Rule 4. On the aspect of Section 40 of the Act,
C the High Court has even gone on to hold that the writ petitioners were not
  given opportunity to dispel the needs of the company by holding a proper
  enquiry. It seems innately to be entertaining the view that the Government
  would not have gone to give consent unless it could in the contemplated
  enquiry get a finding that the object of the acquisition was one of those as
D mentioned in Section 40. An lastly, the High Court has concluded that
  equiry under Section 5-A was vitiated inasmuch as interested persons were
  not sent personal notices of the notification a required under the law, those
  who received such notices and had objected, were not given proper oppor-
  tunity of being heard, the file of objection summoned revealed a casual
  observance of the procedure, no proper opportunity was given to the
E objectors to place material before the officer and that when the officer had
  himself obtained a report of spot inspection, he did not give opportunity .
  to the objectors to dispel his impressions thereon. Apart from that the
  High Court suspected certain interpolations in the file. Thus impelled, the
  High Court went on to remand on account of vitiation of the enquiry under
  Section 5-A of the Act and violation of the mandatory provision of Rule 4,
F
  and its compliance as a condition precedent to the employment of Section
  6 of the Land Acquisition Act.

        The picture will not be complete without the unconlroverted plea of
  the appellants being noted that by January 1984, after the agreement under
G Section 41 was signed and published on 4th March 1983, and after the
  issuance of the declaration under Section 6 on 18th March 1983, an award
  was prepared for Rs. 89,28,663 which sum stood deposited with the govern-
  ment by the society by January 1984. The society claims that the possession
  of the land was given to it on 2.8.84 and many plots stood distributed
H amongst its members by proper registered documents. On the latter aspect,
          S.N. PRASAD v. STATE OF BIHAR [PUNCHHJ.J. J                  547

there was a. dispute of fact. The writ petitioners who too were some          A
cooperative house building societies) original land-owners and transferees
of land, had been asserting that they were in possession, and some of them
had claimed to have either er~cted or be in the process of erecting
buildings. The High Court had, as an interim measure, ordered status quo
to be maintained. The High Court in its final verdict posed the question as   B
to which cooperative ·society could have dominance, as on both sides
cooperative societies were pitted against each other, both having the
avowed object of housing, and which one need be preferred was a baffling
question. Learned counsel for the parties, besides convessing their respec-
tive points of vie\V on law, ventured to show us documents about the
enquiry supposedly held to satisfy the requirements of Section 40 or/and
                                                                              c
of Rule 4 of the Rules as also of proceedings under Section 5-A of the Act,
for and against the governmental action. On the layers and layers of
common facts, leaving aside individual facts, the High Court steered a
common course to effect a remand. In the circumstances, v. e feel that it
                                                             1


was a possible view which the High Court could have taken but this view D
put settlement of the dispute beyond sight. Here the High Court seems to
have erred in not, at least, restricting the terms of the remand. Persons who
had not gone before the High Court in writ petitions need not have been
given relief. The remand should have been confined to the interests of
those who were the objector writ petitioners before the High Court. There E
should not have been a remand as wholesome as it is. The declaration
under Section 6 should have been allowed to be sustained pertaining to
land in other than the land of the writ petitioners, and so far as the writ
petition are concerned, their cases individually on both aspects need to
have been seen by the High Court itself. And delay, if any, in the facts and F
circumstances of each case, in approaching the High Court could have had
a determinative effect.

       Instantly the Notification under Section 4 is couched in terms that
land is required to be taken over by the Government for a public purpose,
that is, for the Bihar Finance Service Housing Construction Cooperative G
Society, on the cost of Society. Though Section 4 above-quoted requires
the appropriate government to notify its intention to acquire land which is
needed or is likely to be needed for any public purpose, it nowhere makes
it incumbent at that stage to specify as to whether the public purpose
would be achieved by some activity of the government or would it be passed H
    548                  SUPREME COURT REPORTS [1993] SUPP. 1 S.C.R.

A over to a company. Now here the intention of the government, as ex-
  pressed, was lo achieve the public purpose for providing the Society, at the
  cost of the Society, land for its avowed purposes. The interested persons
  moving objections under Section 5-A were made alive to the nature of the
  acquisition. Finally while issuing Section 6 notification, 'declaration was
B made to acquire land for the same public purpose. This declaration was in          l
  consonance with sub-section (1) of Section 6 as substituledly applicable in
  Bihar, which is as follows:-

                '"(I) Subject to the provisions of Part VII of the Act, where the
            appropriate Government is satisfied after considering the
c           Collector's report, if any, under the proviso to sub-section (2) of
            Section 5-A or the Collector is satisfied after hearing the objection,
            if any, under Section 5-A, particular land is needed for a public
            purpose, or for Company, a declaration shall be made by the
            appropriate Government or the Collector, as the case may be, to
            that effect in writing:
D
               Provided that no such declaration shall be made unless the
            compensation to be awarded for such property is to be paid by the
            Company or wholly or partly out of the Consolidated Fund of the
            State or some fund controlled or managed by a local authority."
E
                                                                                         $
          Now here the distinction is made between a public purpose and a
    purpose for tM· company. The acquisition of land for a company is in
                                                                                         r•
    substance for a public purpose as all those activities mentioned in Section
    40 such as constructing dwelling houses and providing amenities for the
                                                                                          •
F   benefits of workmen employed by il and construction of some work for
    public utility etc. serve the public purpose. The acquisition for the company
    and the purpose for it, can well be investigated under Section 5-A or
    Section 40, necessarily after the notification under Section 4. Reference
    may usefully be made to Babu Barkya Thakur v. State of Bombay (now
    Maharashtra) and othm·, AIR (1960) SC 1203. It was the conceded case
G   before the High Court that there could be no acqui~ition for the respon-
    dent-Society without provisions of Section 40 of the Act being involved and
    complied with. In Babu Barkya's case supra loo, this Court has taken the
    view that as provided in Section 39, the machinery of the Land Acquisition
    Act beginning with Section 6 and ending, with Section 37 shall not be put
H   into operation unless two conditions precedent are fulfilled, namely, (i) the
           S.N.PRASAD v. STATEOFBIHAR[PUNCHHl,J.J                         549

  prl'vious consent of the appropriate government has been obtained and (ii) A
  an' agreement in terms of Section 41 has been executed by the Company.
  Such consent could be given if it was satisfied on the report of the enquiry
  enyipged by Section 5-A (2) or enquiry held under Section 40 itself that
  the purpose of the acquisition is for purposes as envisaged in Section 40.
  In lhis state of law, the plea set up on behalf of the appellants that when
                                                                               B
  th!lir Society could not be treated either as a private or a government
'    '
  company, was no company at all so as to remain bound to comply with
  Chapter VII of the Act, is of no substance. The Society as a company is
  bound to satisfy the requirements of Section 40 before taking aid of
  Sections 6 to 37 of the Act to promote its needed acquisition.

      Having thus clarified the law governing the field; we would open
                                                                                 c
doors for streams of equities and discretions to enter in the exercise of
power by the High Court under Article 226 of the Constitution. As ob-
served earlier, we are of the view that the High Court should not have
upset the notification under Section 6 of the Act as a whole and should
have individualised justice vis- a-vis each writ petitioner before it, having    D
regard to the equities interplaying in each case and to the regulation of its
discretion keeping in view host of other factors which weigh with the High
Court to deny, grant or mould relief even when illegalities in procedure
keep staring. Thus for the view afore-expressed, we allow these appeals set
aside the impugned orders of the High Court and remit all these matters          E
back to it with the request that though it may take them up as a_ batch, it
may give individual attention to each case, view the illegalities pointed by
the writ petitioner in its right perspective having regard to the,.time factor
and confine the relief, if due, lo him separately. We shall not be taken to
have controlled the discretion of the High Court in administering in-
dividualised justice and amongst others if may, with the cooperation of the      F
Society and of the Stale Government, as also the writ petitioners examine
the possibility of an equitable solution so that the first of law and the
discretion of the Court do not hurt unbearably. We thus remit the matters
to the High Court without any or.dcr as to costs.

S.P.S.                                                      Appeals allowed.