Supreme Court of India
SOORARAM PRATAP REDDY & ORS.versusDISTRICT COLLECTOR, RANGA REDDY DISTT. & ORS.
- Citation
- 2008 INSC 1017
- Decided
- 5 September 2008
- Disposal
- Dismissed
- Bench
- C K THAKKER
Holding
The acquisition was for a legitimate public purpose and the government's satisfaction and use of Part II procedures were proper; the proceedings were not illegal, mala fide, or a colourable exercise of power.
Summary
The Government of Andhra Pradesh acquired a large tract of land in Hyderabad for an integrated infrastructure project, the Financial District, to be implemented by the state nodal agency APllC in partnership with a private company, Emaar. Small landowners challenged the acquisition, alleging it was not for a public purpose, was mala fide, and that the urgency clause under Section 17 of the Land Acquisition Act, 1894 was improperly invoked. The High Court upheld the acquisition but struck down the urgency clause, directing compliance with Section 5A. On appeal, the Supreme Court held that the acquisition was a legitimate exercise of eminent domain for a public purpose, that the integrated project must be viewed as a whole, and that involvement of a private company does not render the acquisition illegal or colourable. The Court affirmed that the government's satisfaction on public purpose is generally not subject to judicial review unless there is fraud or mala fides, and dismissed all appeals.
Issues considered
- The acquisition under the Land Acquisition Act, 1894, whether it qualifies as a 'public purpose' despite involvement of a private company.
- Whether the procedure under Part II of the Act (Sections 4, 5A, 6) is applicable or Part VII (for companies) should have been followed.
- The validity of invoking the urgency clause under Section 17 without demonstrable urgency.
- The extent to which the government's satisfaction on public purpose is reviewable by courts.
- Whether the acquisition was undertaken in a mala fide or colourable manner.
Legislation cited
Subjects
land acquisitionpublic purposeeminent domaininfrastructure developmentprivate participationurgency clausePart II vs Part VIIjudicial reviewpolicy decisionintegrated project
Judgment
[2008] 13 S.C.R. 126
A SOORARAM PRATAP REDDY & ORS.
v.
DISTRICT COLLECTOR, RANGA REDDY DISTT. & ORS.
(Civil Appeal No. 5509 of 2008)
SEPTEMBER 5, 2008
B
[C.K. THAKKER AND D.K. JAIN, JJ.]
Land Acquisition Act, 1894 - Part II, ss. 4 and 6 - Land
acquisition - For development of infrastructure of city - The
c project for the development was integrated involving State
agency as well as private company - Acquisition challenged
as illegal, malafide and not meant for 'public purpose' - Held:
Land acquisition proceedings were not illegal, or in colourable
exercise of power - Government was right in forming an opinion
as to public purpose - Development of infrastructure is legal
0
and legitimate 'public purpose' for exercising power of eminent ~
domain - An integrated and indivisible project has to be
considered as a whole for determining whether it is a larger
public interest - Involvement of a private company for the
purpose, would not make the exercise of power of acquisition
E bad or malafide - Government is the best judge to decide as
to what constitutes 'public purpose' - The Court, in exercise of
jurisdiction under Articles 32, 136 or 226 cannot substitute its
own judgment for the judgment of the Government in this
regard - Constitution of India, 1950 -Articles 32, 136 and 226
F - Andhra Pradesh Infrastructure Development Enabling Act,
2001.
Words and Phrases - 'Eminent domain' and 'Public
purpose' - Meaning of in the context of Land acquisition act,
G 1894.
The State Government, in the background of 'World
Tourism Organization Report' and 'Vision 2020
Documents' took a policy decision for the development
of the city of Hyderabad, and decided to establish an
H 126
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 127
> COLLECTOR, RANGA REDDY DISTT. & ORS.
Integrated Project to be implemented through its nodal A
agency Andhra Pradesh Infrastructure and Investment
. Corporation (APllC) to make the city a world class
' business destination. The State Government acquired
land for the purported development of 'Financial District
·1 and Allied Projects'. It also invoked urgency clause u/s 17 B
of Land Acquisition Act dispensing with procedure u/s
5A of the Act.
) Appellants filed writ petitions challenging the
acquisition on the grounds that the acquisition was not
for public purpose, but the same was with ma/afide c
intention to transfer the same to a foreign company and
:i few persons with vested interest; that the action has been
taken in colourable exercise of power and in violation cf
1 the Act as well as several other statutes. High Court
~
~ft( upheld the acquisition. However, it held the urgency 0
clause as illegal and hence directed to proceed by
following the procedure u/s 5A. Wirt appeals were also
filed which was dismissed by Division Bench of High
Court. Hence the present appeals .
... E
' Dismissing the appeals, the Court
HELD: 1.1. The proceedings initiated by the State for
acquisition of land under the Lc:md Acquisition Act, 1894
are not illegal, unlawful, unwarranted, ma/a fide, fraud on
.... statute or taken in colourable exercise of power. On the ...
'
facts and in the circumstances of the present case, the
Government was right in forming an opinion and reaching
a satisfaction as to 'public purpose' and in initiating
proceedings u/s 4 and 6 and in invoking Part II of the Act.
[Paras 166 and 167] [198 C-F]
G
1.2 Section 4 of the Act expressly authorizes the
appropriate Government to issue preliminary notification
for acquisition of land likely to be needed for any public
purpose or 'for a company'. Likewise, Section 6 declares
that when the appropriate Government is satisfied that a H
128 SUPREME COURT REPORTS [2008] 13 S.C.R.
A particular land is needed for a public puipose or 'for a
company', a declaration shall be made to that effect. It is
thus clear that appropriate Government may acquire land
if such land is needed for any public purpose or 'for a
company'. If it is so, acquisition will be governed by Part
B II of the Act and the procedure laid down in the said Part
has to be followed. Part VII, on the other hand, deals with
acquisition of land for companies. [Para 106] [176-C-E]
Babu Barkya Thakur v. State of Bombay (now Maharashtra)
and Ors., 1961 (1) SCR 128; Pandit Jhandulal and Ors. v.
C State of Punjab and Ors. 1961 (2) SCR 459; R.L. Arora (I) v.
State of Uttar Pradesh and Ors., 1962 Supp (2) SCR 149;
R.L. Arora (II) v. State of Uttar Pradesh and Ors., 1964 (6)
SCR 784; Arnold Rodricks vs. State of Maharashtra 1966 (3)
SCR 885; Jage Ram and Ors. v. State of Haryana and Ors.
D 1971 (1) SCC 671; Aflatoon and Ors. v. Lieutenant Governor
of Delhi and Ors. 1975 (4) SCC 285 Ajay Krishan Singhal 1/.
Union of India, 1996 (10) SCC 721; S.S. Darshan v. State of
Karnataka and Ors. 1996 (7) SC 302; WB. Housing Board
Etc. v. Brijendra Prasad Gupta (1997) 6 SCC 207; Pratibha
E Nema and Ors. v. State of Madhya Pradesh and Ors. 2003
(10) SCC 626; State of Karnataka amd Anr v. All India
Manufacturers Organisation and Ors. 2006 (4) SCC 683;
Srinivasa Cooperative House Building Society Ltd. v. Madam
Gurumurthy Sastry and Ors. 1994 (4) sec 675 - relied on.
F Motibhai Vithalbhai Patel and Anr. v State of Gujarat
and Anr AIR 1961 Guj 931 Amarnath Ashram Trust Society
and Anr v. Governor of UP and Ors., 1998 (1) sec 591;
Oevinder Singh and Ors., v. State of Punjab and Ors. 2008 (1)
sec 728 - referred to.
G
1.3 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.
The expression is incapable of precise and comprehensive
definition. And it is neither desirable nor advisable to attempt
H
> SOORARAM PRATAP REDDY & ORS. v. DISTRICT 129
COLLECTOR, RANGA REDDY DISTT. & ORS.
· to define it. It is used in a generic sense of including any A
purpose wherein even a fraction of the community may be
interested or by which it may be benefited. A 'public
purpose' is thus wider than a 'public necessity'. Purpose
"1 is more pervasive than urgency. That which one sets
' before him to accomplish, an end, intention, aim, object, B
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. [Paras 67, 86] [163-H; 164-A-B 169-A-B]
-,
State of Bombay v. Bhanji Munji 1955 (1) SCR 777 - c
followed.
State of Bihar v. Kameshwar Singh 1952 SCR 889; State
of Bombay v. Ali Gu/shan 1955 (2) SCR 867; State of Bombay
--.• v. R.S. Nanji 1956 SCR 18; Somawanti (Smt.) and Ors. v.
D
State of Punjab and Ors. 1963 (2) SCR 77 4; Arnold Rodricks
v. State o Maharashtra 1966 (3) SCR 885; Bhim Singhji v.
Union of India and Ors. 1981 (1) SCC 166; Dau/at Singh
Surana v. First Land Acquisition Collector 2007 (1) SCC 641;
State of Kamataka and Anr. v. Ranganatha Reddy and Anr.
1977 (4) SCC 471; National Textile Workers' Union and Ors. E
v. PR. Ramakrishnan and Ors. 1983 (1) SCC 228 ·relied on.
Hamabai Framjee Petit v. Secretary of State 1911
- (13)Bom LR 1097; Veeraraghavachartar v. Secretary of State
1926 (49) Mad 237 : AIR 1925 Mad 837; Hamabai Framjee
Petit v. Secretary of State 1914 (42) IA 44 : AIR 1914 PC 20
- referred to.
F
Tenth Report of the Law Commission of India on "The
~ Law of Acquisition and Requisitioning of Land" - referred to.
G
1.4 It is inherent power of a governmental entity to
)o. take privately owned property, especially land and convert
it to pubHc ·use, subject to reasonable compensation for
the taking. 'Eminent domain' may be defined as the right
or power of a sovereign State to take private property for
H
130 SUPREME COURT REPORTS [2008] 13 S.C.R. ...
A public use without the owner's consent upon the payment
of just compensation. It means nothing more or less than
an inherent political right, founded on a common necessity
and interest of appropriating the property of individual
members of the community to the great necessities and
B common good of the whole society. The power of eminent
domain is merely a means to an end; viz. larger public
interest. The power does not depend for its existence on
a specific grant. It is inherent and exists in every sovereign
State without any recognition thereof in the Constitution
c or in any statute. It is founded on the law of necessity.
The power is inalienable. No Legislature can bind itself or
its successors not to exercise this power when public
necessity demands it. Nor it can be abridged or restricted
by agreement or contract. [Paras 36, 37, 40 and 41] [153-
C-F 154-D-F] .,,.
D
Charanjit Lal Chowdhury v. Union of India and Ors. 1950 (1)
SCR 869; Deputy Commissioner and Collector Kamrup and Ors.
v. Durganath Sarma (1968) 1 SCR 561; Coffee Board, Kamataka,
Bangalore v. Commissioner of Commercial Taxes, Kamataka
E and Ors. 1988 (3) SCC 263; Scindia Employees' Union v. State
of Maharashtra and Ors. 1996 (10) SCC 150; Sharda Devi v.
State of Bihar and Anr. 2003 (3) sec 128 - relied on.
Faflbrook Irrigation District v. Bradley 1896 (164) U.S.
112 : 41 Law Ed. 369; Rindge Co. v. Los Angles County 'r
F 1923 (262) US 700: 67; Law Ed 1186; New York City Housing
Authority v. Muller, 270 NYP 333: 105 ALR 905; Muray v. La
Guardia, 291 NY 320; Samuel Berman v Andrew Parker 1954
(348) US 26 : 99 L Ed 27 : 75 S Ct 98; Hawaii Housing
Authority v. Midkiff 467 US 229 : 81 L Ed 2d 186 : 104 S Ct
G 2321; Susette Keio v. City of New London 2005 (545) US 469
: 125 S Ct 2655 : 162 L Ed 439 - referred to.
American Jurisprudence, 2d, Volume 26, pp. 638-39,
para 1; Corpus Juris Secundum, Volume 29, p. 776, para 1;
Words & Phrases, Permanent Edition, Volume 14, pp. 468-
H
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 131
COLLECTOR, RANGA REDDY DISTT & ORS.
70; Advanced Law Lexicon by P Ramanatha Aiyar Volume A
2, page 1575; 'De Jure, Belli et Pacis' by Grotius; 'Eminent
Domain' by Nichols; 'Constitutional Limitations' by Cooley;
'Constitutional Law' by Willis - referred to.
1.5 Development· of infrastructure is legal and
legitimate 'public purpose' for exercising power of eminent B
domain. Simply because a Company has been chosen
for fulfillment of such public purpose does not mean that
the larger public interest has been sacrificed, ignored or
disregarded. It will also not make exercise of power bad,
ma/a fide or for collateral purpose vitiating the C
proceedings. [Para 168] [199-B-C]
1.6 In case of integrated and indivisible project, the
project has to be taken as a whole and must be judged
whether it is in the larger public interest. It cannot be split
0
into different components and to consider whether each
and every component will serve public good. A holistic
approach has to be adopted in such matters. If the project
taken as a whole is an attempt in the direction of bringing
foreign exchange, generating employment opportunities
and securing economic benefits to the State and the public E
at large, it will serve public. purpose. [Para 169] [199-C-E]
1.7 It is established in this case that the present
Infrastructure Development Project conceived by the
State and executed under the auspices of its F
instrumentality (APllC) is one covered by the Act. The
Joint Venture Mechanism for implementing the policy,
executing the project and achieving lawful public purpose
for realizing the goal of larger public good would neither
destroy the object nor vitiate the exercise of power of G
public purpose for development of infrastructure. [Para
170] [199-E-F]
2. Normally, a writ Court will not propel into the
unchartered ocean of Governmental Policy. In the instant
case, in deciding whether acquisition is for 'public H
132 SUPREME COURT REPORTS [2008] 13 S.C.R.
A purpose' or not, prima facie, Government is the best judge.
The entire amount of compensation is to be paid by State
agency (APllC) which also works as nodal agency for
execution of the project. It is primarily for the State to
decide whether there exists public purpose or not.
B Undoubtedly, the decision of the State is not beyond
judicial scrutiny. In appropriate cases, where such power
is exercised ma/a fide or for collateral purposes or the
purported action is de hors the Act, irrational or otherwise
unreasonable or the so-called purpose is 'no public
c purpose' at all and fraud on statute is apparent, a writ-
court can undoubtedly interfere. But except in such cases,
the declaration of the Government is not subject to judicial
review. A writ court, while exercising powers under Articles
32, 226 or 136 of the Constitution, cannot substitute its
own judgment for the judgment of the Government as to
0
what constitutes 'public purpose'.[Paras 99, 153 and 171]
[174-A-B; 194-E, 199-H 200-A-C]
Bennett Coleman and Co. v. Union of India 1972 (2)
SCC 788; Dhampur Sugar (Kashipur) Ltd. v. State of
E Uttaranchal and Ors. 2007 (8) SCC 418; Hamabai Framjee
Petit v. Secretary of State 1914 (42) IA 44 : AIR 1914 PC 20;
State of Bombay vs. R.S. Nanji 1956 SCR 18; Bajirao T. Kate
(dead) by LRs. and Anr. v. State of Maharashtra and Ors.
1995 (2) SCC 442; Laxman Rao Bapurao Jadhav v. State of
F Maharashtra 1997 (3) sec 493; Dau/at Singh surana vs.
First Land Acquisition Collector 2007(1) SCC 641 - relied on.
Somawanti (Smt.) and Ors. vs. state of Punjab and Ors.
1963 (2) SCR 774 - referred to.
Case Law Reference
G
,
1896 (164) U.S. 112 Referred to Para 45
(1923) 262 us 700 Referred to Para 47 ·
270 NYP 333 Referred to Para 48
H 291 NY 320 Referred to Para 49
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 133
~
COLLECTOR, RANGA REDDY DISTT. & ORS.
1954 (348) us 26 Referred to Para 51 A
467 us 229 Referred to Para 54
2005 (545) us 469 Referred to Para 55
1950 (1) SCR 869 Relied on Para 60
~. 1968 (1) SCR 561 Relied on Para 62 B
1988 (3) sec 263 Relied on Para 63
1996 (10) sec 150 Relied on Para 64
2003 (3) sec 128 Relied on Para 65
(1911) 13 Born LR 1097 Referred to Para 69 c
(1914) 42 IA 44 Referred to Paras 71
and 154
1926 (49) Mad 237 Referred to Para 72
1952 SCR 889 Relied on Para 73 D
1955 (2) SCR 867 Relied on Para 76
1955 (1) SCR 777 followed Para 77
1956 SCR 18 Relied on Paras 77
and 155 E
1963 (2) SCR 77 4 Relied on Paras 79
and 156
1966 (3) SCR 885 Relied on Para 82
1981 (1) SCC.166 Relied on Para 83
F
2001 (1) sec 641 Relied on Paras 84
and 164
1977 (4) sec 471 Relied on Para 87
1983 (1) sec 228 Relied on Para 88
G
1972 (2) sec 788 Relied on Para 99
2001 (8) sec 418 Relied on Para 100
>-' 1961 (1) SCR 128 Relied on Para 109
1961 (2) SCR 459 Relied on Para 112
H
134 SUPREME COURT r-<EPORTS [2008] 13 S.C.R.
A 1962 Supp (2) SCR 149 Relied on Para ·116
1964 (6) seR 784 Relied on Para 121
AIR 1961 Guj 93 Referred to Para 123
1911 (1) sec 671 Relied on Para 130
B 1975 (4) sec 285 Relied on Para 132
1996 (1 O) sec 121 Relied on Para 134
1996 (7) SC 302 Relied on Para 136
1997 (6) sec 201 Relied on Para 140
c 2003 (10) sec 626 Relied on Para 144
2006 (4) sec 683 Relied on Para 146
1998 (1) sec 591 Referred to Para 148
2008 (1) sec 728 Referred to Para 150
D 1994 (4) sec 675 Relied on Para 160
1995 (2) sec 442 Relied on Para 161
1997 (3) sec 493 Relied on Para 163
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 5509
E of 2008
From the final Judgment and Order dated 1.2.2005 of the
High Court of Andhra Pradesh at Hyderabad in Writ Appeal No.
44 of 2005
F WITH
C.A. Nos. 5510-5515 of 2008
Goolam E. Vahanwati, SG., Harish N. Salve, Ranjit Kumar,
P.S. Patwalia, Mahindra Anand, ATM Rangaramanujan, M.N.
G Rao, 1.V. Narayana, P.P. Rao, K.K. Veenugopal and RF Nariman,
G. Ramakrishna Prasad, Suyodhan Byrapaneni, G. Arun,
Siddharth Patnaik, Neelam Jain, ,;nna D.N. Rao, Rita Kumari
Gupta, Manjeet Kirpal, Paramjeet Singh (forT.N. Rao), V. Sridhar
Reddy, V.N. Raghupathy, Kcimal Gupta, S. Udaya Kumar Sagar,
H Nupur, Bina Madhuvan (for Mis. Lawyer's Knit & Co.), A.
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 135
/ COLLECTOR, RANGA REDDY DISTI. & ORS.
j
Ramesh, Anushman Ashok, K. Rajeev, P.S. Narasimha, Guntur A
Prabhakar, Devdath Karnath, G. Maloji Rao, M. Rao, Nikhil
Nayyar, Ankit Singhal, TVS Raghavendra Sreyas, Manoj
Saxena, Rahul Shukla, Ranjneesh Kr. Singh, TV. George,
Shireen Sethna Bana, Rahul Ravindran, R. Sudhinder, Nikhil
Shrivastava, S. Sravanthi, Ankur, Gaurav Srivastava, Ashok B
Mathur, P.S. Narasimha, M. Gireesh Kumar and K.H. Nobin
Singh for the appearing parties.
The Judgment of the Court was delivered by
C.K. THAKKER, J. 1. Leave granted. c
2. All these appeals are filed by the appellants being
aggrieved and dissatisfied with the judgment and order passed
by the High Court of Andhra Pradesh in various Letters Patent
Appeals as also in Writ Petitions. By the said orders, the High
Court rejected the prayer of the appellants for quashing D
proceedings under the Land Acquisition Act, 1894 (hereinafter
referred to as 'the Act') for acquisition of land being illegal, unlawful,
mala fide and in colourable exercise of power by the State.
Factual background
E
3. To appreciate the controversy in the present appeals,
it is appropriate to refer to the facts in the first matter i.e. Civil
Appeal arising out of SLP(C) No. 2239 of 2006 (Sooraram
Pratap Reddy & Ors. v Deputy Collector, Ranga Reddy &
Ors.). It was the case of the appellants before the High Court F
.-...., that the Government of Andhra Pradesh sought to acquire a
large chunk of land in the name of 'public purpose' for the
purported development of 'Financial District and Allied Projects'.
Accordi~g to the appellants, the action has been taken in
colourable exercise of power and in total violation of the Land
G
Acqusition Act, 1894 as well as several other statutes in force
in the State of Andhra Pradesh; such as, Andhra Pradesh Urban
Area Development Act, 1975; Zoning Regulations; Environment
(Protection) Act, 1986; Water (Prevention and Control of
Pollution) Act, 1974 etc. The action has been taken. alleged the
H
136 SUPREME COURT REPORTS [2008] 13 S.C.R .
.A. appellants, with mala fide intention and oblique motive to transfer
valuable land of small farmers to a foreign company and few
selected persons with vested interest.
4. A notification under Section 4 of the Act was published
in the State Government Gazette on July 17, 2002. The said
8 action was challenged and the validity of notification was
questioned in a writ petition in the High Court of Andhra Pradesh.
The High Court dismissed the petition following an earlier
decision in Writ Petition No. 21712 of 2002 by observing that
the writ petition involved similar issues. The High Court, however,
C directed that 'urgency clause' sought to be invoked by the
Government under Section 17 of the Act was illegal, unlawful
and unwarranted. That part of the notification was, therefore,
set aside and the Authorities were directed to proceed to hear
objections of the owners/interested persons by following
D procedure under Section 5A of the Act. According to the
appellants, the High Court was wholly wrong in dismissing the
writ petition relying on the judgment in Writ Petition No. 21712
of 2002 since in that case, the Court has considered only one
issue; viz. the acquisition was or was not for public purpose as
E the beneficiary was Andhra Pradesh Industrial Infrastructure
Corporation Limited ('APllC' for short). Really, the property has
been given in bounty to a foreign Company which was not lawful.
The High Court failed to consider and decide several important
and crucial issues raised by the small landowners.
F 5. Being aggrieved by the order passed in the writ petition,
the appellants preferred Writ Appeal which was also dismissed.
The appellants have, therefore, approached this Court by filing
the present appeal. Initially, notice was issued. Several matters
raising similar issues were also filed and all were ordered to be
G placed for hearing together.
6. We have heard learned counsel for thP. parties.
Submissions of appellants
7. The !earned counsel for the appellant;; contended that
H
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 137
COLLECTOR, RANGA REDDY DISTI. & ORS. [C.K. THAKKER, J.]
~
the High Court was wholly wrong in dismissing writ-petitions as A
also writ appeals. According to the appellants, land acquisition
proceedings were clearly unlawful, illegal, mala fide and violative
of the fundamental rights of the appellants. They were taken in
colourable exercise of power by the authorities. The appellants
are small land-holders and their only livelihood was dependant B
~. on land attempted to be acquired by the respondents. According
to the appellants, there was no 'public purpose' as defined in
the Act and the land is acquired for a private foreign company.
The acquisition was, therefore, bad in law and for a collateral
purpose, It was also submitted that even if it is assumed for the c
sake of argument that the land could be acquired for a public
purpose by a private Company, the procedure for acquisition of
land by a private company under Part VII of the Act ought to
have been followed and not the procedure under Part II providing
for acquisition of land by the State Authorities. It was urged that
D
in the era of globalization, if a foreign company wanted to
-y"
establish its business, it was required to follow the prescribed
procedure and parties must be left to settle their deal by entering
into mutual agreement for sale and purchase of properties. In
other words, according to the appellants, power of 'eminent
domain' has no application to such cases. The provisions of E
the Act must be strictly construed and judicial scrutiny in such
matters i.e. in the matters of acquisition of land by the State or
its instrumentality for a private party, namely, for use and
occupation of land by a foreign company should be very strict:
It was further submitted that proceedings were totally mala fide F
-(
which was clear from the fact that huge land owned and
possessed by influential persons such as, Smt. Vijay Nirmala,
a well-known actress and other persons in public life had been
excluded. Thus, rich landlords and politically patronage persons
have been excluded from acquisition of land and appellants G
and other persons who were small or marginal farmers earning
their bread were deprived of their property. Malicious action on
,._ the part of the State Authorities was also clear from the fact that
though the land was sought to be acquired for industrial policy
of the Government, initially, 'urgency clause' was applied and H
138 SUPREME COURT REPORTS [2008] 13 S.C.R.
A Section 17 was pressed in service. It was because of the High
Court's intervention that urgency clause was quashed and
authorities were directed to take action in accordance with law
and only thereafter notices were issued and procedure under
Section 5A of the Act was followed. On all these grounds, it was
B submitted that proceedings are liable to be quashed.
Submissions of respondents
8. The learned counsel for the respondents, on the other hand,
supported the orders passed by the High Courts. They submitted
C that the land was acquired under the Act for 'public purpose' after
following procedure laid down in the Act and the acquisition was
legal, lawful and in consonance with law and no interference is called
for by this Court under Article 136 of the Constitution.
9. Affidavits were filed by the contesting respondents. So
o far as the State Authorities are concerned, a counter-affidavit
was filed by Special Deputy Collector, Land Acquisition
(Industries), Hyderabad. In the said affidavit, it was, inter a/ia,
contended that appellants were not small land-holders or
marginal farmers. Most of them have converted agricultural lands
E unauthorizedly into housing plots and sold them to various
builders/ developers/property dealers/estate agents and they
were not cultivating the land. No doubt, there were certain small
land-owners/farmers also. But, it was contended by the State,
that because of industrial policy of the State Government, a
decision was taken to construct 'Information Technology Park',
F under the Information Technology and Hardware Industrial Policy
2005-10 and for the said purpose land was sought to be
acquired under the provisions of the Act. Proceedings were,
therefore, initiated and necessary notification was issued. There
was no illegality in the procedure contemplated under the Act
G for acquisition of land. APllC is an instrumentality of State which
was to pay the entire amount of compensation and such action
could not be said to be illegal or contrary to law. It was, therefore,
submitted that the appeals are liable to be dismissed.
10. APllC in its affidavit filed by the General Manager
H
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 139
~- COLLECTOR, RANGA REDDY DISTI. & ORS. [CK THAKKER, J.]
(Law), contended that it was wholly owned undertaking of the A
Government of State of Andhra Pradesh and has been
developing infrastructural projects in the State to facilitate socio-
economic progress. According to the deponent, large extent of
Government land in various villages of Ranga Reddy District in
the periphery of Hyderabad were handed over to_ the Corporation B
for the development of special projects like Software Lay Out,
Indian School of Business, Indian Institute of Information
Technology, Hitech City, National Games Village, Sports Stadia,
Integrated International Convention Centre, Golf Course,
Financial District, etc. Some of the projects have already taken c
shape and others are in various stages of development. It was
submitted that time was a critical factor for implementation of
those projects. In view of development of these special projects,
the respondent-Corporation would be improving facilities in the
round-about areas. It was for fulfillment of this industrial policy D
-., and completion of several projects that notifications under the
Act were issued by the State. The High Court was satisfied
about public purpose and hence rejected the ground put forward
by land-owners that acquisition was not for public purpose.
According to the High Court, however, the procedure laid down E
in the Act was required to be follow~d by issuing notices under
Section 5A and urgency clause under Section 17 of the Act
could not have been invoked. In several cases, awards were
made and possession of the land was also taken over. In some
other cases, award is not passed and the land is still in the
-~ F
possession of the land-owners. That, however, dbes not mean
that proceedings under the Act were illegal or unlawful.
11. According toAPllC, the Government of Andhra Pradesh
introduced Tourism Department which established a transparent
framework of enabling private sector and tourism sector in the G
State. The State had undertaken such projects under the name
and style of "Establishment of Hyderabad as a Business-cum-
r Liaison Destination" with a goal of transforming into world class
business destination, to be the leader in knowledge sector.
Pursuant to such project, Integrated Convention Centre Complex H
140 SUPREME COURT REPORTS (2008] 13 S.C.R.
A (ICCC) is being developed by the State Govem:nent on the
basis of "Public Private Partnership" (PPP) format. Under the
said project, International Convention Centre and business hotel
adjoining Hi-tech Business Centre were already established.
Similarly, International Golf Champion Course with multiuse
B development was sought to be set up.
12. The Government of Andhra Pradesh designated APllC
as Nodal Agency for development of Integrated Project. Emaar
Properties, PJSC, Dubai was selected in internation::'
competitive bidding for implementation of the project. The
C Government issued orders approving structure and
implementation of the project. A collaboration agreement was
entered into between APllC and Emaar Properties, Dubai to
implement the project. APllC was having 26% share while Emaar
Properties is having 74% share capital. Joint Venture companies
D were incorporated with the Registrar of Companies, Andhra
Pradesh, Hyderabad with registered office at Hyderabad for
taking different components of integrated project. Several
projects are about to be over. Some projects are going on and
some are to be undertaken. Total cost according to APllC
E excluding operating and financial course of the integrated project
is more than Rs.550 crores. It was submitted that considering
the project in its entirety, the High Court was wholly right and
fully justified in dismissing the petition and not interfering with
the land acquisition proceedings.
F
13. Emaar had also filed an afiid<ivit through General
Manager, denying allegations and controverting averments
made by the writ-petitioners contending that the petitions are
misconceived and ill-founded and the petitioners were not
entitled to any relief. It was stated that the Special Deputy
G Collector, Land Acquisition in its affidavit has rightly stated that
land-owners were not small farm2rs, small owners/marginal
farmers but they have illegally r::on•1erted agrjr;ultural land into
non-agricultural land and have ::;oic/ transferred/ allotted to
H builders/ developers/ real estate owners of properties.
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 141
COLLECTOR, RANGA REDDY DISTT & ORS. [C.K. THAKKER, J.]
Acquisition was for industrial policy of State and APllC was the A
\
(
Nodal Agency which was an 'instrumentality' of the 'State'. The
amount of compensation was to be paid by APllC and
acquisition was under power of 'eminent domain'. Acquisition
is not for foreign company or private party and the High Court
-1
was right in not insisting for following procedure laid down in B
Part VII of the Act as the case is covered by procedure
prescribed in Part II of the Act. Public purpose was precise,
perfect and lawful and the land was acquired in consonance
~
with the procedure laid down in the Act. It was only with a view
to delay the proceedings that petitions were filed by the c
petitioners which has resulted in gross injustice to Emaar which
has made large investments.
14. According to Emaar, the City of Hyderabad was sought
to be transformed into Business-cum-Liaison Destination as
"f envisaged 1by the Government and public and private sectors' D
participation investment had been thought proper through
Integrated Project under Industrial Policy of the State 2005-10.
Through APllC, the State undertook the Integrated Project for
establishing Hyderabad into world class business destination
and a leader in the knowledge sector. Such project would indeed E
develop the State which would be in the larger interest of general
public. It would enhance the value of Hyderabad into a Tourist-
cum-Business Destination for domestic as well as international
travellers. It was, therefore, submitted that the land acquisition
proceedings were in consonance with the law and no case has F
been made out for interference with such proceedings and the
appeals are liable to be dismissed.
Notifications
15. As already noted earlier, proceedings had been G
initiated by the authorities in 2002. A notification under Section
,i>- 4 of the Act was issued by the State Government on July 10,
2002 which was published in the Government Gazette on July
17, 2002. The said notification read as under;
H
142 SUPREME COURT REPORTS [2008] 13 S.C.R.
A THE ANDHRA PRADESH GAZETTE
EXTRAORDINARY
PUBLISHED BY AUTHORITY
R.R. No. 25 HYDERABAD WEDNESDAY 17TH JULY2002
B No.G1/7180/2000 Dated : 10-07-2002
FORM - 2 A
DRAFT NOTIFICATION UNDER SECTION 4 OF 1894
IAS AMENDED BY ACT XXXVlll OF 1923
c Whereas it appears to the the Land Acquisition
Government of Andhra Amendment made by the
Pradesh that the land LandAcquisitionActXXXlll of
specified in the Schedule 1923, and the Governor of
below and situated at Andhra Pradesh hereby
D Nanakram Guda Village, authorized Spl. Deputy
Serilingampally Manda!, Collector, LA(lnd), Hyderabad,
Ranga Reddy District is and his staff and workmen
needed for Public purpose, to exercise the powers
to wit for Development of conferred by section 4(2) of
E New Projects by APllC Ltd., the Act. Under sub-section
notice to that effect as (4) of Section 17 of the Act,
hereby given to all whom it the Governor of Andhra
may concern in Pradesh directs that in view
accordance with the of the urgency of the case,
F provisions of section 4(1) the provisions of Section 5-
of the Land Acquisition Act, A of the Act, shall not apply
1 of 1894, as amended by to this case.
SCHEDULE
G
16. It is thus clear that the land was proposed to be acquired
for a public purpose, viz. for development of new projects by
APllC. It is also apparent that urgency clause under Section 17
of the Act was applied and inquiry under Section 5-A was
H dispensed with.
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 143
COLLECTOR, RANGA REDDY DISTI. & ORS. [C.K. THAKKER, J]
17. A notification under Section 6 of the Act was also A
issued on the same day which was published in the Government
Gazette on July 18, 2002. The said notification read as under;
THE ANDHRA PRADESH GAZETTE
EXTRAORDINARY
PUBLISHED BY AUTHORITY B
R.R. No. 26 HYDERABAD Thursday 181h July 2002
No.G1/7180/2000 · Dated : 10-07-2002
FORM - 5-A c
DRAFT DECLARATION UNDER SECTION 6 OF THE
LA ACT
Under Sec. (6) of the Land the Act and directed to take
Acquisition Act, the Order for the acquisition of D
Governor of Andhra the land under Sub-Section
Pradesh hereby declares (1)(2) of Section 17 of the
that the land specified belowAct, the Governor of Andhra
and measuring Ac.80-35 Pradesh further directs that
gts/acre be the same a littlethe possession of the said E
more or less is needed for land may be taken on the
public purpose, wit for expiry of 15 days from the
Development of New date of the publication of the
Projects by APllC Limited. notice mentioned in section
Under Sections 3 and 7 of 9(1) of the Act. A plan of the ·
the same Act, the Special land is kept in the Special F
Deputy Collector, L.A. Deputy Collector, L.A. (Ind),
(Ind.), Hyderabad, is Hyderabad, and may be
appointed to perform the inspected at any time during
functions of Collector under the office hours.
G
SCHEDULE
Writ petitions in High Court
18. The validity of notifications under Sections 4 and 6 of H
144 SUPREME COURT REPORTS [2008] 13 S.C.R.
A the Act was challenged by some of the land owners by filing
Writ Petition No. 21712 of 2002 in the High Court of Andhra
Pradesh at Hyderabad. The learned Single Judge, vide a
judgment and order dated April 25, 2003 partly allowed the
petition. He held that in view of counter-affidavit filed by the
B authorities, it could not be said that the acquisition was illegal
or unlawful and, therefore, was not sustainable. Acquisition of
land was in exercise of power of eminent domain and was
intended for public purpose, to wit, for development of New
Projects by APllC Ltd. The acquisition was to enable the
c activities of APllC, which was an instrumentality of State
operating in the area of industrial infrastructure. The purposes
of APllC were demonstrably public purposes. It was also held
that the claim of the petitioners as being small farmers was not
well-founded as no agricultural operations were being pursued
0 by them as asserted by the authorities in the counter-affidavit
which was not denied. The availability of alternative land as
pleaded by the petitioners was also not correct since the lands
available were not contiguous to the existing developed areas
and hence could not be said to be 'alternative'.
E 19. The Court, however, held that invocation of urgency
clause under Section 17 of the Act and dispensing with enquiry
as contemplated by Section 5-A of the Act was not legal. Section
5-A of the Act is a salutary provision which enables the persons
whose land is proposed to be acquired to urge all grounds that
F may be available against the proposed acquisition at the enquiry.
Unless real urgency is demonstrated, dispensing with the enquiry
and invocation of urgency clause was irrational and arbitrary
exercise of power by the State. By such process, an enquiry
under Section 5-A of the Act cannot be jettisoned on jejune grounds
G of irrational and unsubstantiated urgency. Since no such urgency
could be demonstrated by the State, the action to the extent of
dispensing with the enquiry was held to be bad. The petition
was, therefore, partly allowed directing the authorities to issue
notice to the landowners under Section 5-A of the Act and to take
H further proceedings in accordance with law.
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 145
~
COLLECTOR, RANGA REDDY DISTI. & ORS. [C.K. THAKKER, J.]
-{
20. The Court finally stated; A
"However, it is clarified that the notice under section 4(1)
of the Act is not interfered with".
~
21. Other petitions filed by other land owners were also
I partly allowed relying upon the decision in Writ Petition No. B
-i
21712 of 2002.
'I .
Writ appeals
22. Being aggrieved by the orders passed by the learned
Single Judge, Writ Appeals were instituted by both landowners as c
also by APllC. The Division Bench dismissed all the appeals holding
that the land was needed for public purpose and the acquisition
--4
-1. could not be said to be contrary to law. Similarly, the learned single
Judge was also right in coming to the conclusion that on the facts
'II
and in the circumstances of the case, urgency clause could not D
have been applied under Section 17 of the Act and enquiry could
not have been dispensed with under Section 5-A of the Act.
23. The Division Bench stated;
"The Financial District is a unique project being developed E
by the Corporation wherein the reputed financial institutions
like Banks, Insurance etc., set up their offices to serve the
needs of the trade, commerce and industry. The
--J. Corporation has already allotted land in the Financial
District for Insurance Regulatory and Development F
__., Authority of India (IRDA) and also to SBH Staff Training
1.
Academy etc. It is stated that in order to ensure
compactness of the Financial District, the lands in question
i are under acquisition for public purpose and to utilize them
for new projects being developed by the Corporation.
G
>-' The lands in question were identified and notified for
acquisition after examining the matter carefully. The lands
in question are essential so as to ensure compactness of
the Financial District Project being developed by the H
146 SUPREME COURT REPORTS [2008] 13 S. C R.
A Corporation. It is stated that there is no prohibition to
acquire lands belonging to small farmers under the due
process of law, if it is inevitable .. The allegation of the
appellants that there are vast extents of Government lands
in the nearby villages and that there is absolutely no reason
B to acquire private patta lands is denied. The Government
lands situated in the adjoining villages would not facilitate
compactness of the Financial District Project being
developed by the Corporation. It is stated that the lands in
question are under acquisition following the due process
c of law for utilizing the same for public purpose, i.e.
development of Financial District Project and other projects
being development by the Corporation. The development
works for the proposed works wouid be taken up as soon
as the lands are acquired under the Land Acquisition Act".
D
24. In pursuance of the order passed by the learned single
Judge and confirmed by the Division Bench of the High Court,
enquiry under Section 5-A of the Act had been held. Notices
were issued to the land owners and persons interested,
E objections were invited, hearing was afforded and finally
notification under Section 6 was issued on April 26, 2005 which
was published on the next day, 1.e. April 27, 2005 in the
Government Gazette. The said notification reads thus;
THE ANDHRA PRADESH GAZETTE
F EXTRAORDINARY
PUBLISHED BY AUTHORITY
R.R. No. 85HYDERABAD WEDNESDAY 27th April 2005
No.G1 /7180/2000 Dated : 26-04-2005 t
G
FORM - 5-A •
DRAFT DECLARATION UNDER SECTION 6 OF THE
LAND ACQUISITION ACT
H
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 147
COLLECTOR, RANGA REDDY DISTI. & ORS. [C.K. THAKKER, J.]
Under Sec. (6) of the Land notice mentioned in section A
Acquisition Act, the 9(1) of the Act, a plan of the
Government of Andhra land is kept in the office of
Pradesh hereby declares the SPECIAL DEPUTY
that the land specified below COLLECTOR, Land
in the schedule below and acquisition (industries), B
measuring acres (80-35) Hyderabad, and may be
acres, be the little more or i~spected at any time du ring
less is needed for public the office hours.
purpose, wit for
NOTICE is hereby given
DEVELOPMENT OF NEW
under section 9(1) & 10 and C
PROJECTbyAPllC Limited,
under Sections 3 and 7 of
9(3) & 10 of the Land
Acquisition Act, that the
the same Act, THE SPECIAL
DEPUTY COLLECTOR, State Government proposed
LAND ACQUISITION to acquire the lands
(INDUSTRIES), mentioned in the schedule. D
Hyderabad, is appointed to All persons interested in the
perform the functions of lands are requested to
Collector, under the Act and appear in person or by
directed to take order for the authorized agent, before
acquisition of the said lands. the on SPECIAL DEPUTY E
Under sub-section (1) (2) of COLLECTOR, LAND
Section 17 of the Act, the ACQUISITION
Government of Andhra (INDUSTRIES), Hyderabad,
Pradesh further directs, that SNEHA SILVER JUBILEE
the possession of the said BHAVAN, Collectorate F
lands may be taken on the . premises, LAKDIKAPUL,
expiry of (15) d.ays from the HYDERABAD on 21.05.
date of the publication of the 2005 at 11-00 AM.
SCHEDULE
G
+ 25. The said notification thereafter was challenged by the
land owners in the High Court of Andhra Pradesh in the present
proceedings. As already observed earlier, the petitions were
H
148 SUPREME COURT REPORTS [2008] 13 S.C.R.
A dismissed and hence the property owners have challenged the
said decision in this Court.
Statutory provisions
26. Before we deal with the contentions of the parties, it
B is appropriate if we examine the relevant provisions of the Land
Acquisition Act, 1894. As the Preamble states, the Act has
been enacted for the purpose of enabling the State to acquire
land for public purposes as also for Companies. Section 3
defines various expressions. The expression 'Company' is
c defined in clause (e) to mean a Company as defined in the
Companies Act, 1956 (other than a Government Company).
Clause (ee) defines 'appropriate Government'. Clause (f)
defines 'public purpose'. The definition is inclusive in nature
and includes purposes mentioned in sub-clauses (i) to (viii).
D 27. Part 11 (Sections 4 to 17) relates to 'acquisition'. Section
4 confers power on the appropriate Government to issue
preliminary notification for acquisition of land needed or likely
to be needed for any public purpose or for a Company. The
proceedings for acquisition thus begin with issuance of
E notification under Section 4 which reads as under;
4. Publication of preliminary notification and powers of
officers thereupon-
(1) Whenever it appears to the appropriate Government
F that land in any locality is needed or is likely to be needed
for any public purpose or for a company a notification to
that effect shall be published in the Official Gazette and in
two daily newspapers circulating in that locality of which at
least one shall be in the regional language and the Collector
shall cause public notice of the substance of such
G
notification to be given at convenient places in the said
locality the last of the dates of such publication ancl the
giving of such public notice, being hereinafter referred to
as the date of publication of the notification.
H (2) Thereupon it shall be lawful for any officer, either,
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 149
COLLECTOR, RANGA REDDY DISTT & ORS. [C.K. THAKKER, J.]
>-
generally or specially authorised by such Government in A
this behalf, and for his servants and workmen, to enter
upon and survey and take levels of any land in such locality;
to dig or bore in the sub-soil;
to do all other acts necessary to ascertain whether the B
land is adapted for such purpose;
to set out the boundaries of the land proposed to be taken
and the intended line of the work (if any) proposed to be
made thereon;
c
to mark such levels, boundaries and line by placing marks
and cutting trenches,
and, where otherwise the' survey cannot be completed
and the levels taken and the boundaries and line marked,
tb cut down and clear away any part of any standing crop, D
fence or jungle:
Provided that no person shall enter into any building or
upon any enclosed court or garden attached to a dwelling-
house (unless with the consent of the occupier thereof)
E
without previously giving such occupier at least seven days'
notice in writing of his intention to do so.
28. Section 5A as inserted by the Land Acquisition
(Amendment) Act, 1923 (Act 38 of 1923) provides for hearing
of objections. It enacts that any person interested in any land F
- _;,,
which has been notified under Section 4 of the Act as being
needed or likely to be needed for a public purpose or for a
company may, within thirty days from the date of the publication
of the notification, object to the acquisition of the land. Such
objections can be made to the Collector in writing. The Collector
G
should grant the objector an opportunity of being heard in person
or by any person authorised by him in that behalf or by pleader
and should, after hearing all objections and after making such
·" further inquiry, if any, as he thinks necessary, either make a
report in respect of the land which has been notified under
H
150 SUPREME COURT REPORTS [2008] 13 S.C.R.
A Section 4 (1 ), or make diffe1ent reports in respect of different
parcels of such land, to the appropriate Government. containing
his recommendations on the objections, together with tr.e record
of the proceedings held by him. for the decision of that
Government. The section also declares that the decision of the
B Appropriate Government on the objections shall be 'final'.
29. Section 6 relates to "declaration that land is required
for a public purpose". The said section is material and may be
quoted in extenso.
C 6. Declaration that land is required for a public purpose.-
(1) Subject to the provisions of Part VII of this Act, when the
Appropriate Government is satisfied after considering the
report, if any, made under section 5A, sub-section (2), that
any particular land is needed for a public purpose, or for a
D company, a declaration shall be made to that effect under
the signature of a Secretary to such Government or of some
officer duly authorised to certify its orders an different
declarations may be made from time to time in respect of
different parcels of any land covered by the same notification
E under section 4, sub-section (1 ), irrespective of whether
one report or different reports has or have been made
(wherever required) under section 5-A, sub-section (2):
Provided that no declaration in respect of any particular land
covered by a notification under section 4, sub-section (1 ),-
F
(i) published after the commencement of the Land
Acquisition (Amendment and Validation) Ordinance, 1967
but before the commencement of the Land Acquisition
(Amendment) Act, 1984 shall be made after the expiry of
three years from the date of the publication of the
G
notification; or
(ii) published after the commencement of the Land
Acquisition (Amendment) Act. 1984, shall be made after
the expiry of one year from the date of the publication of
H the notification:
,
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 151
COLLECTOR, RANGA REDDY DISTT & ORS. [CK THAKKER, J]
Provided further that no such declaration shall be made unless A
the compensation to be awarded for such property is to be
paid by a company, or wholly or partly out of public revenues
or some fund controlled or managed by a local authority.
Explanation 1.-ln computing any of the periods referred to
in the first proviso, the per.iod during which any action or B
~
proceeding to be taken in pursuance of the notification
issued under Section 4, sub-section (1 ), is stayed by an
order of a Court shall be excluded.
,.,,, Explanation 2.-Where the compensation to be awarded c
for such property is to be paid out of the funds of a
corporation owned or controlled by the State, such
compensation shall be deemed to be compensation paid
out of public revenues.
(2) Every declaration shall be published in the Official D
-( Gazette, and in two daily newspapers circulating in the
locality in which the land is situate of which at least one
shall be in the regional language, and the Collector shall
cause public notice of the substance of such declaration
to be given at convenient places in the said locality (the E
last of the date of such.publication and the giving of such
public notice, being hereinafter referred to as the date of
publication of the declaration), and such declaration shall
state the district or other territorial division in which the
land is situate, the purpose for which it is needed, its F
approximate area, and where a plan shall have been made
of the land, the place where such plan may be inspected.
(3) The said declaration shall be conclusive evidence
that the land is needed for a public purpose or for a
Company, as the case may be; and, after making such G
declaration the Appropriate Government may acquire the
land in manner hereinafter appearing.
(emphasis supplied)
30. Once the declaration under Section 6 rJs been made, H
152 SUPREME COURT REPORTS [2008] 13S.C.R.
A it shall be conclusive evidence that the land is needed for a
public purpose.
31. Section 9 requires the Collector to issue notice to the
person interested stating that the Government intends to take
possession of the land, and that claims to compensation for all
8 interests in such land may be made to him. It also enumerates
)
particulars to be mentioned in the notice.
32. Section 11 enjoins the Collector to proceed to enquire
into the objections (if any) which any person interested had filed
c pursuant to the notice and the value of the land at the date of the
publication of the notification under section 4(1 ), and to make
an award. Section 11A prescribes period within which such
award shall be made by the Collector. Section 12 declares
award of Collector to be final subject to the provisions of the
Act. Section 16 empowers Collector after he has made the
0
award under section 11 to take possession of the land which
shall thereupon vest absolutely in the Government, free from all
encumbrances. Section 17 deals with cases of urgency.
33. Part Ill (Sections 18 to 28A) provides for reference to
E Court and procedure to be followed. Part IV (Sections 29 to 30)
deals with apportionment of compensation. Part V (Sections
31 to 34) relates to payment of compensation. Part VI (Sections
35 to 37) permits temporary occupation of land.
34. Part VII (Sections 38 to 448) is another important part
F dealing with acquisition of land for Companies. Sections 39
provides for previous consent of appropriate Government and
execution of agreement for such acquisition. Section 40
declares that no such consent can be given unless the
appropriate Government is satisfied either on the report of the
G Collector under Section 5A(2), or upon an enquiry conducted in
the manner laid down in Section 40 as to purpose of acquisition.
Section 41 provides for agreement between the Company and
appropriate Government in respect of the matters specified
therein. Section 42 requires publicaticn of agreement in Official
H Gazette. Section 44i-\ imocses a restriction on the Company
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 153
COLLECTOR, RANGA REDDY DISTI. & ORS. [C.K. THAKKER, J.]
f
for which any land is acquired under Part VII to trar1sfer the land A
or any part thereof by sale, mortgage, lease, gift or otherwise
except with the previous sanction of the appropriate
Government. Section 448 likewise prohibits acquisition of land
under Part VII except for purposes specified in Section 40 for
private Companies. B
~ 35. Part VIII (Sections 45 to 55) deals with miscellaneous
matters.
Eminent domain
36. 'Eminent domain' may be defined as the right or power c
of a sovereign State to take private property for public use
without the owner's consent upon the payment of just
compensation. It means nothing more or less than an inherent
political right, founded on a common necessity and interest of
appropriating the property of individual members of the D
community to the great necessities and common good of the
whole society. It embraces all cases where, by the authority of
the State and for the public good, the property of an individual
is taken without his consent to be devoted to some particular
use, by the State itself, by a Corporation, public or private or by
E
a private citizen for the· welfare of the public [American
Jurisprudence, 2d, Volume 26, pp. 638-39, para 1; Corpus
Juris Secundum, Volume 29, p. 776, para 1; Words & Phrases,
Permanent Edition, Volume 14, pp. 468-70].
37. 'Eminent domain' is thus inherent power of a F
governmental entity to take privately owned property, especially
land and convert it to public use, subject to reasonable
compensation for the taking [vide P. Ramanatha Aiyar's
Advanced Law Lexicon, Volume 2, page 1575].
38. The term 'eminent domain' is said to have originated G
by Grotius, legal scholar of the seventeenth century. He believed
that the State possessed the power to take or destroy property
for the benefit of the social unit, but he believed that when the
..)..
State so acted, it was obligated to compensate the injured
property owner for his losses. H
154 SUPREME COURT REPORTS [2008] 13 S.C.R
A 39. In his well known work De Jure, Belli et Pacis', the
learned author proclaimed;
"The property of subject is under the eminent domain of
the State, so that the State or he who acts for it may use,
alienate and even destroy such property, not only in the
B case of extreme necessity, in which even private person
have a right over the property of other, but for the ends of
public utility, to which ends those who founded civil society
must be supposed to have the intended the private ends
should give way".
c
40. Blackstone too believed that State had no general
power to take private property of land-owners, except on the
payment of a reasonable price. The right of the State or the
sovereign to its or his own property is absolute while that of the
subject or citizen to his property is only pa1 Jmount. The citizen
0
holds his property subject always to the right of the sovereign
to take it for a public purpose. The power of eminent domain is -,,
merely a means to an end; viz. larger public interest.
41. The power of eminent domain does not depend for its
E existence on a specific grant. It is inherent and exists in every
sovPreign State without any recognition thereof in the
Constitution or in any statute. It is founded on the law of necessity.
The power is inalienable. No Legislature can bind itself or its
successors not to exercise this power when public necessity
F demands it. Nor it can be abridged or restricted by agreement
or contract.
42. Nichols in his classic book 'Eminent Domain' defines
it (eminent domain) as "the power of sovereign to take property
for public use without the owner's consent".
G
43. Another constitutional expert (Cooley) in his treatise
on the 'Constitutional Limitations', states;
·'More accurately, it is the rightful authority ·which must rest
in every sovereignty to con.trol and regulate those rights of
H a public nature which pertain to its citizens in common
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 155
COLLECTOR, RANGA REDDY DISTI. & ORS. [C.K. THAKKER, J]
~
and to appropriate and controi'individual property for the A
public benefit, as the public safety, convenience or
necessity may demand".
44. Willis in his well known work 'Constitutional Law'
discusses two view points as to exercise of power of eminent
domain. The older and stricter view was that unless the property B
was dedicated for user by the public at large or a considerable
section thereof, it would not be for public use or for public
purpose. The modern and more liberal view, however, is that it
is not an essential condition of public use that the property
should be transferred to public ownership or for public user and c
it is sufficient that the public derives advantage from the scheme.
45. In Fallbrook Irrigation District v. Bradley, (1896) 164
U.S. 112 : 41 Law Ed. 369, an Act of California provided for the
acquisition of lands whenever 50 land-owners or a majority of
D
them in a particulo:r locality required it for construction of a
watercourse, the object of the legislation being to enable dry
lands to be brought under wet cultivation. The validity of the Act
was challenged on the ground that the acquisition would only
benefit particular land owners who could take water from the
channel and the public as such had no direct interest in the E
matter and consequently there was no public user. The contention
was right if narrow view was to be accepted but was not well-
founded if liberal view was to be adopted.
46. Rejecting the contention, the Court observed; . F
'To irrigate and thus bring into possible cultivation these
large masses of otherwise worthless lands would seem to
be a public purpose and a matter of public interest, not
confined to the land-owners, or even to anyone section of
the State. The fact that the use of the water is limited to the G
land-owner is not, therefore, a fatal objection to this
legislation. It is not essential that the entire community,
or even any considerable portion thereof, should directly
enjoy or participate in an improvement in order to
constitute a public use .... .It is not necessary in order that H
156 SliPREME COURT REPORTS (2008] ·13 s c ,;
A the use should be public that every resident in the district
should have the right to the use of the water"
(emphasis supplied)
47. The above statement of law was reiterated in
B subsequent cases. In Rindge Co. v. Los Angles County, (1923)
262 US 700 : 67 Law Ed 1186, the Court observed that "it is
not essential that the entire community or even a considerable
portion should directly enjoy or participate in an improvement
in order to constitute a public use."
C 48. In New York City Housing Authority v. Muller, 270
NYP 333: 105 ALR 905, certain lands were acquirec;l in
pursuance of a governmental project for clearing slums and
providing housing accommodation to persons with low income.
The validity of the acquisition was questioned on the ground
D that the use was private and not public. The Court, however,
rejected the contention and stated;
"Over many years and in a multitude of cases the courts
have vainly attempted to define comprehensively the
concept of a public use; and to formulate a universal test
E even though it were possible, would in an inevitably
changing world be unwise if not futile" ..... and holding that
those purposes were for the benefit of the public the court
went on to observe "It is also said that since the taking is
to provide apartments' to be rented to a class designated
F as persons of low income or to be leased or sold to limited
dividend corporations the use is private and not public.
This objection disregards the primary purpose of the
legislation. Use of a proposed structure, facility or service
by everybody and anybody is one of the abandoned,
G universal tests of a public use."
(emphasis supplied)
49. In Muray v. La Guardia, 291 NY 320, a Town
Corporation was formed for acquiring certain lands. It was
H financed by the Metropolitan Insurance Cori1pany which held all
. SOORARAM PRATAP REDDY & ORS. v. DISTRICT 157
COLLECTOR, RANGA REDDY DISTT & ORS. [C.K. THAKKER, J.]
the stocks of the Corporation. The owners of the lands contended A
that the scheme was to benefit only few individuals and the
Insurance Company which was a private Corporation and there
was no public use in the project. The Court, however, rejected
the argument.
1
50. Dealing with the contention that there was no public B
use in the project because the Insurance Company was
benefited, the Court observed:
"Nor do we find merit in the related argument that
unconstitutionality results from the fact that in the present
case the statute permits the city to exercise the power of
c
"Eminent domain" to accomplish a project from which
'Metropolitan' a private corporation may ultimately reap a
profit. If upon completion of the project the public good
is enhanced it does not matter tbat private interests may
¥ D
be benefited."
(emphasis supplied)
51. In Samuel Berman v. Andrew Parker, (1954) 348 US
26 : 99 L Ed 27 : 75 S Ct 98, owners instituted an action of
condemnation of their property under the District of Columbia E
Redevelopment Act, 1945. Plans were approved and the
Planning Commission certified them to the agency for execution.
The agency undertook the exercise of redevelopment of the
area. It was contended by the land owners that the project was
not public project and their property could not be acquired. F
52. Rejecting the contention, the Court observed that it
does not sit to determine whether a particular housing project·
is or is not desirable. The concept of the public welfare is broad
and inclusive. The values it represents are spiritual as well as G
physical, aesthetic as well as monetary. It is within the power of
the Legislature to determine that the community should be
beautiful as also healthy, spacious as also clean, well-balanced
as also carefully patrolled. According to the Court, the Congress
and its authorized agencies have made determinations that · H
158 SUPREME COURT REPORTS [2008] '13 S.C.R.
;\ take into account a wide va1iety of ·,;alues and it was not for the
Court to reappraise them. "If those who govern the District of
Columbia decide that the Nation's Capital should be beautiful
as well as sanitary, there is nothing in the Fifth Amendment
that stands in the way."
B (emphasis supplied)
53. Dealing with the contention that the project was
undertaken by one businessman for the benefit of another
businessman, the Court observed;
c "The public end may be as well or better served through
an agency of private enterprise than through a
depaftment of government-or so the Congress might
conclude. We cannot say that public ownership is the
sole method of promoting the public purposes of
D community redevelopment projects. VJhat we have said
also disposes of any contention concerning the fact that
certain property owners in the area may be permitted to
repurchase their properties for redevelopment in harrhony
with the overall plan. That, too, is a legitimate means which
E Congress and its agencies may adopt, if they choose".
(emphasis supplied)
54. In Hawaii Housing Authority v Midkiff, 467 US 229 :
81 L Ed 2d 186 : 104 S Ct 2321, the Court held that, no doubt
F there is a role for Courts to play in reviewing a Legislature's
judgment of what constitutes a public use, even when the
eminent domain power is equated with the police power. But
the Court in Berman made clear that it is "extremely narrow".
The Court emphasized that any departure from this judicial
r; restraint would result in courts deciding on what is and what is
not a governmental function and in their inva!idating legislation
on the basis of their view on that question. And the Court would
not substitute its judgment for a Legislature's judgment as to
what constitutes a public use "unless .the use !:le palpably without
reascnable foundation."
H
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 159
~ COLLECTOR, RANGA REDDY DiSTI. & ORS. [CK THAl<KER, J]
i
55. Recently, in Susette Keio v. City of New London, (2005) '
/"\
545 U.S 469 : 125 S Ct 2655 : 162 L Ed 439, the land owners
challenged the city's exercise of eminent domain power on the
ground that it was not for public use. The project in question
was a community project for economic revitalization of the City
of New London for which the land was acquired. B
56. It was submitted by the learned counsel for the
respondents that the facts in Keio were similar to the facts of
the present case. For that the counsel relied upon the Integrated
Development Project Dealing with the project, the Court stated;
c
"The Fort Trumbull area is situated on a peninsula that juts
o<, into the Thames River. The area comprises approximately
115 privately owned properties, as well as th'e 32 acres of
land formerly occupied by the naval facility (Trumbull State
Park now occupies 18 of those 32 acres). Parcel 1 is
~ D
designated for a waterfront conference hotel at the center
of a 'Small urban village" that will include restaurants and
shopping. This parcel will also have marinas for both
recreational and commercial uses. A pedestrian "riverwalk"
will originate here and continue down the coast, connecting
the waterfront areas of the development. Parcel 2 will be E
the site of approximately 80 new residences organized
into an urban neighbourhood and linked by public walkway
to the remainder of the development, including the state
-~ park. This parcel also includes space reserved for a new
U.S. Coast Guard Museum. Parcel 3: which is located · F
immediately north of the Pfizer facility, will contain at least
. 90,000 square feet of research and development office
space. Parcel 4A is a 2.4-acre site that will be used either
to support the adjacent state park, by providing parking or
retail services for visitors, or to support the nearby marina. G
_.. Parcel 48 will include a renovated marina, as well as the
final stretch of the riverwalk. Parcel;; 5, 6 and 7 will provide
land for office and retail space, parking, and water-
dependent commercial uses."
H
160 SUPREME COURT REPORTS [2008) 13 S.C.R
A 57. The Court also stated;
"Two polar propositions are perfectly clear. On the one
hand, it has long been accepted that the sovereign may
not take the property of A for the sole purpose of transferring
it to another private party 8, even though A is paid just
B
compensation. On the other hand, it is equally clear that a
State may transfer property from one private party to
another if future 'use by the public' is the purpose of the
taking; the condemnation of land for a railroad with
common-carrier duties is a familiar example".
c
58. The Court noted the contention of the petitioners that
'using eminent domain for economic development
imperrnissibly blurs the boundary between public and private
takings'. It also conceded that quite simply, the government's
pursuit of a public purpose might benefit individual private
0
parties. But rejected the argument by stating-
"When the Legislature's purpose is legitimate and its
means are not irrational, our cases make clear that
empirical debates over the wisdom of other kinds of socio-
E economic legislation are not to be carried out in the Federal
Courts."
59. The Court reiterated; 'The public end may be as well
or better served through an agency of private enterprise than
through a department of government - or so the Congress
F might conclude. We cannot say that public ownership is the
sole method of promoting the public purposes of community
redevelopment projects".
(emphasis supplied)
G 60. The above principles have been accepted and applied
in India also. Immediately after the Constitution came into force,
this Court had an occasion to consider the power of eminent
domain in the leading case of Charanjit Lal Chowdhwy v.
Union of India & Ors., (1950) 1 SCR 869.
H
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 161
COLLECTOR, RANGA REDDY DISTT & ORS. [C.K. THAKKER, J.]
61. Referring to the doctrine of eminent domain in A
American Legal system, Mukherjea, J. (as His Lordship then .
was) stated;
"It is a right inherent in every sovereign to take and
appropriate private property belonging to individual citizens
for public use. This right, which is described as eminent B
domain in American law, is like the power of taxation, an
offspring of political necessity, and it is supposed to be
based upon an implied reservation by Government that
private property acquired by its citizens under its protection
may be taken or its use controlled for public benefit c
irrespective of the wishes of the owner".
62. In Deputy Commissioner & Collector, Kamrup & Ors.
v. Durganath Sarma, (1968) 1 SCR 561; drawing distinction
between police power and power of eminent domain, this Court
1 D
observed;
"In the exercise of its eminent domain power, the State
may take any property from the owner and may appropriate
it for public purposes. The police and eminent domain
powers are essentially distinct. Under the police power E
many restrictions may be imposed and the property may
even be destroyed without compensation being given,
whereas under the power of eminent domain, the property
may be appropriated to public use on payment of
compensation only". F
63. In Coffee Board, Kamataka, Bangalore v. Commissioner
of Commercial Taxes, Karnataka & Ors., (1988) 3 SCC 263,
referring to American authorities, Mukharji, J. (as His Lordship
then was) stated;
G
· "It is trite knowledge that eminent domain is an essential
attribute of sovereignty of every state and authorities are
"" universal in support of the definition of eminent domain as
the power of the sovereign to take property for public use
without the owner's consent upon making just compensation".
H
''
162 SUPREME COURT REPORTS [2008) 13 S.C.R.
A 64. In Scindia Employees' Union v. State of Maharashtra
& Ors., (1996) 10 SCC 150, this Court observed;
"The very object of compulsory acquisition is in exercise
of the power of eminent domain by the State against the
wishes or willingness of the owner or person interested in
B the land. Therefore, so long as the public purpose subsists
the exercise of the power of eminent domain cannot be
questioned. Publication of declaration under Section 6 is
conclusive evidence of public purpose. In view of the finding
that it is a question of expansion of dockyard for defence
c purpose, it is a public purpose".
65. In Sharda Devi v. State of Bihar & Anr, (2003) 3 SCC
128, this Court said;
"The power to acquire by State the land owned by its subjects
D hails from the right of eminent domain vesting in the State
which is essentially an attribute of sovereign power of the
State. So long as the public purpose subsists the exercise
of the power by the State to acquire the land of its subjects
without regard to the wishes or willingness of the owner or
E person interested in the land cannot be questioned".
Public Purpose
66. There is no dispute that an appropriate Government
may acquire land for any 'public purpose'. The expression 'public
F purpose' is defined in clause (f) of Section 3 of the Act. As
already noted earlier, the definition is inclusive in nature and
reads thus:
(f) The expression "public purpose" includes-
G
(i) the provision of village-sites or the extension, planned
development or improvement of existing village-sites;
(ii) the provision of land for town or rural planning;
(iii) the provision of land for planned development of land
from public funds in pursuance of any scheme or
H
•
'
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 163
COLLECTOR, RANGA REDDY DISTI. & ORS. [C.K. THAKKER, J.]
~
policy of Government and subsequent disposal A
thereof in whole or in part by lease, assignment or
outright sale with the object of securing further
development as planned;
(iv) the provision of land for a corporation owned or
1 B
controlled by the State;
(v) the provision of land for residential purposes to the
poor or landless or to persons residing in areas
affected by natural calamities, or to persons is placed
or affected by reason of the implementation of any c
scheme undertaken by Government, any local
authority or a corporation owned or controlled by the
•' State;
(vi) the provision of land for carrying out any educational,
housing, health or slum clearance scheme sponsored D
''t
by Government, or by any authority established by
Government for carrying out any such scheme, or,
with the prior approval of the appropriate Government,
by a local authority, or a society registered under the
Societies Registration Act, 1860 (21 of 1860), or E
under any corresponding law for the time being in
force in a State, or a co-operative society within the
meaning of any law relating to co-operative societies
for the time being in force in any State;
--, (vii) the provision of land for any other scheme of
development sponsored by Government or, with the
F
prior approval of the appropriate Government, by a
local authority;
(viii) the provision of any premises or building for locating G
a public office,
-but does not include acquisition of land for companies;
(emphasis supplied)
67. The expression ('public purpose') is of very wide H
164 SUPREME COURT REPORTS [2008] 13 S.C.R.
A amplitude. It is merely illustrative and no: exhaustive. The
inclusive definition does not restrict its ambit and scope. Really,
the expression is incapable of precise and comprehensive
definition. And it is neither desirable nor advisable to attempt
to define it. It is used in a generic sense of including any purpose
B wherein even a fraction 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 Courts.
69. Before about a century, in Hamabai Framjee Petit v.
C Secretary of State, (1911) 13 Born LR 1097, certain lands were
sought to be acquired for erecting buildings for the use of
Government Officials. The action was challenged in the High
Court of Judicature at Bombay contending that the purpose of
acquisition could not be said to be 'public purpose'.
D
70. Negativing the arguments and upholding the
acquisition, Batchelor, J. observed;
"General definitions are, I think, rather to be avoided where
the avoidance is possible, and I make no attempt to define
E precisely the extent of the phrase 'public purpose' in the
lease; it is enough to say that, in my opinion, the phrase,
whatever else it may mean, must include a purpose, that
is, an object or aim, in which the general interest of the
community, as opposed to the particular interest of
individuals, is directly and vttal!y concerned".
F
(emphasis supplied)
71. The aggrieved appellant approachad the Privy Council.
The Council in Hamabai Framjee Petit v. Secretar; of State,
(1914) 42 IA 44 : A.IR 1914 PC 20 approved 1He above
G observations of Batchelor, J. Speaking for tbe Judicial
Committee, Lord Dunedin stated;
"All !:hat remains is to determine whether the purpose here
is a purpose in which the general interest of the community
is concerned. Prim::i fac1e the Government are 9ood judges
H
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 165
~- COLLECTOR, RANGA REDDY DISTI. & ORS. [C.K. THAKKER, J.]
of that. They are not absolute judges. They cannot say: A
'Sic volo sic jubeo' but at least a Court would not easily
hold them to be wrong. But here, so far from holding them
to be wrong, the whole of the learned Judges, who are
thoroughly conversant with the conditions of Indian life,
i say that they are satisfied that the scheme is one which B
will redound to public benefit by helping the Government
to maintain the efficiency of its servants. From such a
conclusion their Lordships would be, slow to differ, and
upon its own statement it commends itself to their
judgment". c
(emphasis supplied)
72. In Veeraraghavachartar v. Secretary of State, (1926)
49 Mad 237 : Al R 1925 Mad 837, certain vacant sites were
acquired for enabling Panchamas to build houses. It was argued
_.,, D
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. E
73. In State of Bihar v. Kameshwar Singh, 1952 SCR
889, a Constitution 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 F
(as then stood). The constitutional validity was challenged on
the ground that the Act failed to provide for compensation and
there was lack of public purpose.
74. The Court, however, negatived the contention. As to
'public purpose', Mahajan, J. (as His Lordship then was), G
observed;
"The expression 'public purpose' is not capable of a
precise definition and has not a rigid meaning. It can only
be defined by a process of judicial inclusion and exclusion.
H
166 SUPREME COURT REPORTS [2008] 13 S. C.R.
A In other words, the definition of the expression is elastic
and takes its colour from the statute in which it occurs, the
concept varying with the time and state of society and its
needs. The point to be determined in each case is
whether the acquisition is in the general interest of the
B community as distinguished from the private interest of
an individuaf'.
(emphasis supplied)
75. In the concurring judgment, S.R. Das, J. (as His
c Lordship then was) stated;
"From what I have stated so far, it follows that whatever
furthers the general interests of the community as opposed
to the particular interest of the individual must be regarded
as a public purpose. With the onward march of civilisation
D our notions as to the scope of the general interest of the
community are fast changing and widening with the result
that our old and narrower notions as to the sanctity of the
private interest of the individual can no longer stem the
forward flowing tide of time and must necessarily give
E way to the broader notions of the general interest of the
community. The emphasis is unmistakably shifting from
the individual to the community This modem trend in
the social and political philosophy is well reflected and
given expression to in our Constitution."
F (emphasis supplied)
76. In State of Bombay v. Ali Gulshan, (1955) 2 SCR 867,
a Constitution Bench of this Court considered vires of the
Bombay Land Requisition Act, 1948 (Act 23of1948). Interpreting
G provisions of the Constitution 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 is a public purpose but there may be acquisition or
H requisition which is neither for the State nor for the Union and
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 167
t- COLLECTOR, RANGA REDDY DISTT & ORS. [C.K. THAKKER, J.]
yet it may be for a 'public pu~pose'; for instance, acquisition for A
construction of hospital or educational institution by a private
individual or institution.
77. In State of Bombay v. R. S. Nanji, 1956 SCR 18, land
was requisitioned for accommodating employees of Road
i B
Transport Corporation. It was contended that there was no
'public purpose' and hence the action was illegal. Referring to
Hamabai, Ali Gu/shan and State of Bombay v. Bhanji Munji,
(1955) 1 SCR 777, the Constitution Bench stated that the
expression 'public purpose' must be decided in each case
examining closely all the facts and circumstances of the case. c
78. On the facts of the case, it was held that a break down
in the organization of the Corporation, leading to dislocation of
the road transport system would create a chaotic condition to
the detriment of the interest of the community. Providing living
D
-{ 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'.
E
79. In the leading case of Somawanti (Smt.) & Ors., v.
State of Punjab & Ors., (1963) 2 SCR 774, certain lands were
acquired by the Government for public purpose, viz. for setting
up a factory for manufacturing various ranges of refrigeration
·-< compressors and ancillary equipments. It was contended that F
acquisition was not for 'public purpose' and hence it was
unlawful.
80. Interpreting inclusive definition of 'public purpose' in
the Act, Mudholkar, J. stated;
G
"This is an inclusive definition and a compendious one
and therefore, does not assist us very much in ascertaining
the ambit of the expression 'public purpose'. Broadly
speaking the expression 'public purpose' would, however,
include a purpose in which the general interest of the
H
168 SUPREME COURT REPORTS [2008] 13 S.C.R
A community, as opposed to the particular interest of
individuals, is directly and vitally concerned".
81. 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 be a practical proposition
8 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.
c 82. In Arnold Rodricks v. State of Maharashtra, (1966) 3
SCR 885, this Court held that the phrase 'public purpose' has
no static connotation, which is fixed for all times. It is also not
possible to lay down a definition of what public purpose is, as
the concept of public purpose may change from time to time.
It, however, involves in it an element of general interest of the
0
community which should be regarded as a public purpose.
83. In Bhim Singhji v. Union of India & Ors., (1981) 1
SCC 166, this Court held that the concept of public purpose
implies that acquisition or requisition of property is in the interest
E of general public and the purpose for which such acquisition or
requisition is made directly and vitally subserves public interest.
84. Recently, in Dau/at Singh Surana v. First Land
Acquisition Collector, (2007) 1 SCC 641, land was sought to
be acquired for construction of office of Deputy Commissioner
F .of Police (Security Control). It was contended that there was no
element of public purpose and hence the acquisition was not in
accordance with law.
85. Negativing the contention and upholding the acquisition,
G the Court held that the expression 'public purpose' includes a
public purpose in which greatest interest of the community as
opposed to a particular interest of an individual is directly
concerned. The concept is not static but changes with the
passage of time. Power of eminent domain can, therefore, be
H exercised by the State in public interest.
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 169
COLLECTOR, RANGA REDDY DISTI & ORS. [C.K. THAKKER, J]
t-
86. A 'public purpose' is thus wider than a 'public neyessity'. A
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". B
i
(emphasis supplied)
87. In State of Kamataka & Anr v. Ranganatha Reddy &
Anr, (1977) 4 SCC 471; Krishna Iyer, J. stated;
"rhere may be many processes of satisfying a public c
purpose. A wide range of choices may exist. The State
may walk into the open market and buy the items, movable
and immovable, to fulfill the public purpose; or it may
compulsorily acquire from some private person's '
possession and ownership the articles needed to meet D
--<( the public purpose; it may requisition, instead of resorting
to acquisition; it may take on loan or on hire or itself
manufacture or produce. All these steps are various
alternative means to meet the public purpose. The State
may need chalk or cheese, pins, pens or planes, boats, E
buses or buildings, carts, cars, or eating houses or any
other of the innumerable items to run a welfare-oriented
administration or a public corporation or answer a
community requirement. If the purpose is for servicing the
public, as governmental purposes ordinarily are, then F
everything desiderated for subserving such public purpose
falls under the broad and expanding rubric. The nexus
between the taking of property and the public purpose
springs necessarily into existence if the former is capable
of answering the latter. On the other hand, if the purpose
G
is a private or non-public one, the mere fact that the hand
that acquires or requires is Government or a public
.... corporation, does not make the purpose automatically a
public purpose. Let us illustrate. If a fleet of cars is desired
for conveyance of public officers, the purpose is a public
H
170 SUPREME COURT REPORTS [2008] 13 S.C.R.
A one. If the same fleet of cars is sought for fulfilling the
tourist appetite of friends and relations of the same public
officers, it is a private purpose. If bread is 'seized' for
feeding a starving section of the community, it is a public
purpose that is met but, if the same bread is desired for
B the private dinner of a political maharajah who may pro
tern fill a public office, it is a private purpose. Of course,
the thing taken must be capable of serving the object of
the taking. If you want to run bus transport you cannot
take buffaloes".
C (emphasis supplied)
88. As observed by Bhagwati, J. (as His Lordship then
was) in National Textile Workers' Union & Ors. v. PR.
Ramakrishnan & Ors., (1983) 1 SCC 228, the law must adapt
itself with the changing socio-economic context.
0
89. His Lordship said;
"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
E the bark that protects the tree fails to grow and expand
alongwith the tree, it will either choke the tree or if it is a
living, tree, it will shed that bark and grow a new living bark
for itself. Similarly, if the law fails to respond to the needs
of changing society, then either it will stifle the growth of
F the society and choke its progress or if the society is
vigorous enough, it will cast away the law which stands in
the way of its growth. Law must therefore constantly be
on the move adopting itself to the fast changing society
and not lag behind''.
G
(emphasis supplied)
90. Finally, we may refer to Tenth Report of the Law
Commission of India on "The Law of Acquisition and
Requisitioning of Land" wherein the Law Commission
H considering the meaning of 'public purpose' under the Act, stated;
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 171
)- COLLECTOR, RANGA REDDY DISTT & ORS. [C.K. THAKKER, J.]
"37. (a)Public purpose.-Public purpose is not defined in 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 received by us urging that we B
should clearly and exhaustively define the term 'public
purpose'. In an ever changing world, the connotation of
the expression 'public purpose' must necessarily change.
If a precise definition is enacted, it would become rigid
and leave no room for alteration in the light of changing c
circumstances. It would leave no room for the courts to
adjust the meaning of the expression according to the
needs of the times".
(emphasis supplied)
D
91. Referring to leading authorities on 'eminent domain'
and 'public purpose', the Commission observed;
"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 E
proposed acquisition or requisition should tend to promote
the w1:1lfare of the community as distinct from the benefit
conferred upon an individual. The mere fact that the
immediate use is to benefit a particular individual would
--.\ not prevent the purpose being a public one, if in the F
result it is conducive to the welfare of the community.
The question is exhaustively discussed in Thambiran
Padayachi v. State of Madras, AIR 1952 Mad 756, by
Venatarama Aiyar, J. All that can, therefore, be attempted
in a legislation of this kind is to provide an inclusive G
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".
(emphasis supplied) H
172 SUPREME COURT REPORTS [2008] 13 S.C.R.
A Industrial policy of State
92. Learned counsel for the respondents invited our
attention to Industrial Policy, 2000-05 adopted by the State of
Andhra Pradesh. Reference was also made to G.O. Ms. No.427
dated 13th December, 2000 under which the Government
8 decided to undertake Mega Infrastructure Projects in the State
to attract industries in the State and for the overall development
of the State. The policy laid down guidelines for attracting and
facilitating private investment in infrastructure. It provided for
infrastructure projects implementation in Private-Public
C Partnership (PPP) requiring Government support. The Policy
envisaged the need for a special legislation called Infrastructure
Development Act ('IDA') supported by rules, guidelines and
sectorial policies. While IDA was to constitute a Special
Infrastructure Promotion Authority (IPA) having quasi judicial
D functions, the Task Force was to undertake executive functions
outlined in JOA. The intention behind the integrated project was
to establish Hyderabad as a major business-cum-leisure
tourism infrastructure asset for the State. It was also stated that
in the background of 'World Tourism Organisation Report on
E the State of Andhra Pradesh in 2000' and in the light of the
'Vision 2000 Document' prepared in mid 1990s highlighting
the need for tourism as an important economic driver for the
State, the State Government initiated a Project Development
exercise in 2000-01 for an international standard convention
F centre complex integrated with other components.
93. In pursuance of the above policy, the Andhra Pradesh
Infrastructure Development Enabling Act, 2001 (Act No. 36 of
2001) has been enacted.
94. The Preamble of the Act states;
G
"An Act to provide for the rapid development of physical
and social infrastructure in the State and attract private
sector participation in the designing, financing,
construction, operation and maintenance of infrastructure
H projects in the State and provide a comprehensive
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 173
~ COLLECTOR, RANGA REDDY DISTI & ORS. [C.K. THAKKER, J.]
legislation for reducing administrative and procedural A
delays, identifying generic project risks, detailing various
incentives, detailing the project delivery process,
procedures for reconciliation of disputes and also to
provide for other ancillary and incidental matters thereto
-; with a view to presenting bankable projects to the private B
sector and improving level of infrastructure in the state of
Andhra Pradesh and for matters connected therein or
incidental thereto."
95. Sub-section (iii) of Section 1 enacts that the Act will
apply to all infrastructure projects implemented through public- c
private partnership in the sectors enumerated in Schedule Ill of
the Act and to such other sectors as may be notified by the
Government under the Act from time to time. Detailed provisions
have been made for infrastructure project to be undertaken
---!
under the Act. D
96. It was, therefore, submitted by the learned counsel for
the respondents that a policy decision was taken by the State
to develop information technology and telecommunications,
industrial knowledge, tourism, trade, conventions and exhibition
centres, etc. It was also provided that if the Government land is E
not available, APllC would acquire land for the Project.
97. The respondents also referred to a Memorandum of
Understanding (MoU) between APllC and Emaar Properties. It
was submitted that in pursuance of the policy decision and F
MoU, Integrated Project was to be undertaken by the
respondents which was a 'public purpose' under Sections 4
and 6 of the Act.
98. It wa~ contended by the learned counsel for the
respondents that a policy decision was taken by the State to G
.. acquire land pursuant to 'industrial policy' of the State. It was
,... submitted that as per settled law, it is open to public authorities
to formulate policy, to change or rechange it and normally a writ
Court will not interfere in such matters.
H
174 SUPREME COURT REPORTS [2008] 13S.C.R.
i
A 99. In this connection, our attention has been invited to
several decisions of this Court. It is, however, not necessary for
us to refer to all the decisions. Normally, a writ Court will not
propel into the unchartered ocean of Governmental Policy [vide
Bennett Coleman & Co. v. Union of India, (1972) 2 SCC 788].
B 100. Recently, in Dhampur Sugar (Kashipur) Ltd. v. State
of Uttaranchal & Ors., (2007) 8 SCC 418, one of us (C.K.
Thakker, J.) considered the issue in detail and observed;
"In our judgment, it is well-settled that public authorities
c must have liberty and freedom in framing policies. No
doubt, the discretion is not absolute, unqualified, unfettered
or uncanalised and judiciary has control over all executive
actions. At the same time, however, it is well-established
that courts are ill- equipped to deal with these matters. In
complex social, economic and commercial matters,
D
decisions have to be taken by governmental authorities
keeping in view several factors, and it is not possible for
courts to consider competing claims and conflicting
interests and to conclude which way the balance tilts. There
are no objective, justiciable or manageable standards
E to judge the issues nor such questions can be decided
on 'a priori' considerations".
(emphasis supplied)
101. It is, therefore, a settled proposition of law that in
F absence of illegality or violation of law, a Court of law will not
interfere in policy matters.
Acquisition for Company: Whether public purpose?
102. The main contention of the learned counsel for the
G appellants in all these cases is that the land is sought to be
acquired by the Government for a private Company. In
accordance with the provisions of the Act, therefore, procedure
laid down by the Legislature in Part VII was required to be
followed. According to the counsel, since the acquisition is not
H in accordance with Part VII of the Act, the entire acquisition is
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 175
~ COLLECTOR, RANGA REDDY DISTI & ORS. [CK THAKKER, J]
~
vitiated being contrary to law. It is, therefore, liable to be quashed A
and set aside.
103. The submission on behalf of the respondents, on the
other hand, is that the acquisition is by the State for its
instrumentality i.e. APllC. Such acquisition was, therefore, for
~
'public purpose'. The entire compensation was to be paid by B
i APllC and hence procedure, which was required to be followed,
• was under Part II and not under Part VII as contended by the writ
1
I petitioners. Admittedly, the said procedure has been followed
and hence it cannot be said that the acquisition was not in
consonance with law. It was also submitted that in earlier c
proceedings, this contention had been expressly raised by the
cl
writ petitioners before the High Court. The learned Single Judge
,
specifically negatived it holding that the land was needed for
'public purpose'. The said order was confirmed even by the
Division Bench. Hence, so far as acquisition by the 'State' under
D
-.,, Part II of the Act for public purpose is concerned, the earlier
order has attained finality. The High Court held that the
appropriate Government was not justified in invoking urgency
clause under Section 17 of the Act and no urgency could
I.
demonstrably be shown to exist, the declaration as to urgency
I
and dispensing with the inquiry under Section 5-A of the Act E
was held unlawful. The State Government was, therefore, directed
to follow procedure under Section 5A of the Act by issuing
notice to the land owners by inviting objections and affording
opportunity of being heard to the persons interested in the land.
. ....; The said exercise was thereafter undertaken by the authorities F
and final notification under Section 6 of the Act was issued
which does not call for interference and the High Court was
justified ·in dismissing the appeals.
104. Now the term 'Company' is defined in Clause (e) of
Section 6 thus: G
"(e) the expression 'Company' means-
.....
(i) a company as defined in Section 3 of the Companies
Act, 1956 (1 of 1956), other than a Government
company referred to in clause (cc); H
176 SUPREME COURT REPORTS [2008] 13 S.C.R
A (ii) a society registered under the Societies Registration
Act, 1860 (21of1860), or under any corresponding
law for the time being in force in a State, other than
a society referred to in clause (cc);
(iii) a co-operative society within the meaning of any law
B r
relating to co-operative societies for the time being
in force in any State, other than a co-operative society
referred to in clause (cc).
105. The above definition makes it clear that a 'company'
c is as defined under the Companies Act, 1956, or a society
registered under the Societies Registration Act, 1860 or a
cooperative society under any State law.
106. Section 4 of the Act expressly authorizes the
appropriate Government to issue preliminary notification for
D acquisition of land likely to be needed for any public purpose r
or 'for a company'. Likewise, Section 6 declares that when the
appropriate Government is satisfied that a particular land is
needed for a public purpose or 'for a company', a declaration
shall be made to that effect. It is thus clear that appropriate
E Government may acquire iand if such land is needed for any
public purpose or 'for a company'. If it is so, acquisition will be
governed by Part II of the Act and the procedure laid down in the
said Part has to be followed. Part VII, on the other hand, deals
with acquisition of land for companies. In such cases, previous
F consent of appropriate Government and execution of agreement
for transfer of land is necessary and procedure laid down in that
Part is sine qua non for the acquisition.
107. Whereas the contention of the appellants is that the
so-called acquisition is for a private company and hence it
G 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 APllC and the entire ,...
amount of compensation was to be paid by APllC and as such
the acquisition is covered by Part II of the Act.
H
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 177
COLLECTOR, RANGA REDDY DISTI. & ORS. [C.K. THAKKER, J.]
108. Our attention has been invited by the learned counsel A
for both the parties to some of the decisions on this issue.
-I
'
109. Babu Barkya Thakur v. State of Bombay (now
Maharashtra) & Ors., (1961) 1 SCR 128 was probably the first
leading decision of this Court on the point. In that case, a
Notification was issued by the erstwhile State of Bombay on B
" April 3, 1959 under Section 4 of the Act wherein it was stated
that the lands specified in the schedule attached to the
Notification were likely to be needed for the purpose of M/s
Mukund Iron & Steel Works Ltd., a Company registered under
the Indian Companies Act, 1913. The petitioner lodged c
objections chailenging the Notification on the ground that the
lands were not required for 'public purpose' and the proceedings
were vexatious and malicious. In the counter-affidavit filed by
.., the Special Land Acquisition Officer, it was denied that the
acquisition of the land was not for the public purpose and the D
--.r proceedings were, therefore, vitiated.
_.,, 110. The Court, after referring the Preamble and the
relevant provisions of the Act, held that acquisition for Company
under the Act was for a 'public purpose' inasmuch as
constructing dwelling houses and providing amenities for the E
benefit of workmen employed by the Company would serve
public purpose.
111. The Court observed;
"Further, though it may appear on the words of the Act F
"""" contained in Part II, which contains the operative portions
of the proceedings leading up to acquisition by the
Collector that acquisition for a Company may or may not
be for a public purpose, the provisions of Part VII make it
clear that the appropriate Government cannot permit the G
bringing into operation the effective machinery of the Act
unless it is satisfied as aforesaid, namely, that the purpose
~ of acquisition is to enable the Company to erect dwelling
houses for workmen employed by it or for the provision of
amenities directly connected with the Company or that the H
178 SUPREME COURT REPORTS [2008] 13 S.C.R
A 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
B 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)
c 112. In Pandit Jhandulal & Ors. v. State of Punjab & Ors.,
(1961) 2 SCR 459, the land of the appellant was sought to be
acquired for construction of houses by members of the Thapar
Industries Co-operative Housing Society Ltd., Yamuna Nagar.
Procedings were, therefore, initiated for acquisition of land
under Part II of the Act. The action was challenged, inter alia,
0
on the ground that there was non-compliance with the provisions
of Part VII of the Act and the proceedings were liable to be
quashed as the said procedure had not been followed. The
High Court held that the land was acquired for a public purpose
and there was no need to comply with the provisions of Part VII,
E even though the Company was to pay the entire amount of
compensation (which according to this Court was not factually
correct). The aggrieved land owner approached this Court.
113. According to this Court, the main point for
F determination was whether or not the acquisition proceedings
had been vitiated by reason of the admitted fact ttiat there was
no attempt made by the Government to comply with the
requirement of Part VII of the Act. Referring to Babu Barkya,
this Court held that the conclusion arrived at by the High Court
G was 'entirely correct', though the process of reasoning by which
it had reached the conclusion was erroneous. The Court
observed that the Act contemplates acquisition for (i) a public
purpose, and (ii) for a Company; thus, conveying the idea that
acquisition for a Company, is not for a public purpose. It was
also observed that the purposes of public utility, referred to in
H
SOORARAM PRATAP REDDY & ORS. v. DISTRICT :179
COLLECTOR, RANGA REDDY OISTT & ORS. [C.K. THAKKER, J.]
Sections 40 and 41 of the Act were akin to public purpose. A
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. B
114. Considering the ambit and scope of Sections 6 and
39 to 41 and referring to Babu Barkya, the Court observed;
"There is no doubt that, as pointed out in the recent
decision of this Court, the Act contemplates for a public • c
purpose and for a Company, thus conveying the idea that
acquisition for a Company is not for a public purpose. It
has been held by this Court in that decision that the
purposes of public utility, referred to in Ss. 40-41 of th·e
Act, are akin to public purpose. Hence, acquisition for a
0
public purpose as also acquisitions for a company are
. governed by considerations of public utility. But the
procedure for the two kinds of acquisitions is different, in
so far as Part VII has made substantive provisions for
acquisitions of land for Companies. Where acquisition is
made for a public purpose, the cost of acquisition for E
payment of compensation has to be paid wholly or partly
out of Public Revenues, or some fund controlled or
managed by a locarauthority 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, F
there has to be an agreement, under S. 41, for the transfer
of the land acquired by the Government to the Company
on payment of the cost of acquisition, as also other matters~
not material to our present purpose. The agreement
contemplated by S.41 is to be entered into between the G
Company and the appropriate Government only after the
latter is satisfied about the purpose of the proposed
acquisition, and subject to the condition precedent that
the previous consent of the appropriate Government has
been given to the acquisition. The 'previous consent' itself H
180 SUPREME COURT REPORTS [2008] 13 S.C.R.
A of the appropriate Government is made to depend upon
the satisfaction of that government that the purpose of the
acquisition was as laid down in S.40. It is, thus, clear that
the provisions of Ss. 39-41 lay down conditions precedent
to the application of the machinery of the Land Acquisition
B Act, if the acquisition is meant for a company."
(emphasis supplied)
115. The Court then dealt with the extent and applicability
of Section 6 of the Act and stated:
c "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 compensation to be awarded for the property is to be
D paid by a company. The declaration for the acquisition for
a public purpose, similarly, cannot be made unless the
compensation, wholly or partly, is to be paid out of public
funds. Therefore, in the case of an acquisition for a
Company simpliciter, the declaration cannot be made
E without satisfying the requirements of Part VII. But, that
does riot necessarily mean that an acquisition of a
Company for a public purpose cannot be made otherwise
than under the provisions of Part VII, if the cost or a portion
of the cost of the acquisition is to come out of public funds.
F In other words, the essential condition for acquisition for
a public purpose is that the cost of the acquisition should
be borne, wholly or in part, out of public funds. Hence, an
acquisition for a Company may also be made for a public
purpose, within the meaning of the Act, if a part or the
whole of the cost of acquisition is met by public funds. If,
G
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
H
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 181
COLLECTOR, RANGA REDDY DISTT & ORS. [C.K. THAKKER, J.]
eventually from out of public revenues, it must be held that A
the acquisition is not for a Company simpliciter. It was not,
therefore, necessary to go through the procedure prescribed
by Part VII. We, therefore, agree with the conclusion of the
High Court, though not for the same reasons".
~ (emphasis supplied) B
116. Reference was also made to R.L. Arora(/) v. State
of Uttar Pradesh & Ors., (1962) Supp (2) SCR 149. In that
case, land was sought to be acquired by the Defence
Department of the Government of India for the construction of c
textile machinery parts factory by Lakshmi Ratan Engineering
Works Limited, Kanpur. Notifications were issued under the
Act applying 'urgency' clause. Admittedly, no procedure laid
down under Part VII of the Act was followed. A writ petition was,
therefore, filed praying for quashing of Notifications and land
_.., D
acquisition proceedings. The main ground in support of the
petition was that procedure under Part VII (Sections 38 to 42)
of the Act had not been complied with.
117. Referring to the relevant provisions of the Act and
Babu Barkya and Pandit Jhandulal, Wanchoo, J. (as His E
Lordship then was) for the majority stated;
"Therefore, though the words 'public purpose' in Sections
4 and 6 have the same meaning, they have to be read in
the restricted sense in accordance with s. 40 when the
-~- acquisition is for a company under s. 6. In one case, the F
Notification under s. 6 will say that the acquisition is for a
public purpose, in the other case the Notification will say
that it is for a company. The proviso to s. 6(1) shows that
where the acquisition is for a public purpose, the
compensation has to be paid wholly or partly out of public G
revenues or some fund controlled or managed by a local
authority. Where however the acquisition is either for a
company, the compensation would be paid wholly by the
company. Though therefore this distinction is there where ·
~
the acquisition is either for a public purpose or for a H
182 SUPREME COURT REPORTS [2008] 13 S.C.R.
A company, there is not a complete dichotomy between
acquisitions for the two purposes and it cannot be
maintained that where the acquisition is primarily for a
company it must always be preceded by action under
Part VII and compensation must always be paid wholly by
B the company. A third class of cases is possible where the
acquisition may be primarily for a company but it may
also be at the same time for a public purpose and the
whole or part of compensation may be paid out of public
revenues or some fund controlled or managed by a local
authority. In such a case though the acquisition may
c look as if it is primarily for a company it will be covered
by that part of s. 6 which lays down that acquisition may
be made for a public purpose if the whole or part of the
compensation is to be paid out of the public revenues or
some fund controlled or managed by a local authority.
D Such was the case in Pandit Jhandu Lal v. State of
Punjab. In that case the acquisition was for the construction
of a labour colony under the Government sponsored
housing scheme for the industrial workers of the Thapar
Industries Co-operative Housing Society Limited and part
of the compensation was to be paid out of the public funds.
E
In such a case this Court held that "an acquisition for a
company may also be made for a public purpose within
the meaning of the Act, if a part or the whole of the cost of
acquisition is met by public funds" and therefore it was not
necessary to go through the procedure prescribed by Part
F VII. It is only where the acquisition is for a company and ,..
its cost is to be met entirely by the company itself that
the provisions of Part VII apply. In the present case it is
not the case of the respondents that any part of the
compensation is to be paid out of what may be called
G public funds. It is not in dispute that the entire compensation
is to be paid by the Works and therefore the provision of
Part VII would apply to the present case; and it is in this
background that we have to consider the contention raised
on behalf of the appellant".
H ,
(emphasis supplied)
"
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 183
COLLECTOR, RANGA REDDY DISTT & ORS. [C.K. THAKKER, J.]
118. Construing Sections 40 and 41 of the Act, the majority A
conceded that it is no doubt true that it is for the Government to
be satisfied that the work is likely to prove useful to the public. It
is also true that it is for the Government to be satisfied that the
terms in the agreement should provide that public shall be entitled
-'I' to use the work. That does not, however, mean that ·it is B
Government which has the right to interpret the words used in
Section 40(1) (b) or clause (5) of Section 41. It is the Court which
has to interpret what those words mean. It is only after the Court
has interpreted the words that it is the Government which has to
carry out the object of Sections 40 and 41 to its satisfaction.
c
119. The majority declared;
"The Government cannot say that Ss.40 and 41 mean this
and further say that they are satisfied that the meaning
they have given to the relevant words in these sections
has been carried out in the terms of the agreement provided D
by them. It is for the Court to say what the words in Ss. 40
and 41 mean though it is for the Government to decide
whether the work is useful to the public and whether the
terms contain provisions for the manner in which the public
shall be entitled to use the work. It is only in this latter part E
that the Government's satisfaction comes in and if the
Government is satisfied, that satisfaction may not be open
to challenge; but the satisfaction of the Government must
be based on the meaning given to the relevant words in
Ss. 40 and 41 by the Court. The Government cannot
.....
both give meaning to the words and also say that they F
are satisfied on the meaning given by them. The meaning
has to be given by the court and it is only thereafter that
the Government's satisfaction may not be open to
challenge if they have carried out the meaning given to
the relevant words by the Court." G
(emphasis supplied)
,,,.._
120. Sarkar, J. (as His Lordship then was}, in a dissenting
judgment expressed regret in agreeing with the majority. His·
r
I Lordship stated: H
184 SUPREME COURT REPORTS [2008] 13 S.C.R
A "I am unable to accept the appellant's reading of S. 41 (1)
(b) as correct. The words "such work is likely to prove
useful to the public" read by themselves seem to me plainly
to imply a work the construction of which results in some
benefit which the public would enjoy. They do not
B contemplate only a work which itself can be put by the ..,.-
public to its use. For example, a work producing electricity
for supply to the public is a work which is useful to the
public. So also a work producing any commodity like say,
medicines or cloth would be a work which would be useful
c to the pubic. Again, I feel no doubt that a radio broadcasting
station would be work which would be useful to the public.
Take another case, namely, a post-graduate college turning
out a small number of highly qualified medical doctors.
There can be no doubt that the building for the college can
be said to be a work useful to the public. It would be so not
D
because the public would have a chance of getting training
there and a small number of members of the public would
after the training be able to make a good livelihood, but
because an institution of this kind is useful to the public as
it turns out men who give very useful service to the public.
E In all the illustrations given the works would be useful to the
public though the public might have no access to the works
or any right to use them directly. I think it would be unduly
restricting the meaning of the word 'useful' to say that a
work is useful to the public only when it can directly be
F used by the public. The words are not "work which the
public can use", in which case it might with some justification
have been said that the work must be such as the public
could use. In the Shorter Oxford Dictionary, among the
meanings of 'useful' appear, '"having the qualities to bring
G about good or advantage", "helpful in effecting a purpose''.
I {ind no reason not to apply these meanings to the word
'useful' in the section that I am considering."
.....
(emphasis supplied)
~1
,' 121. In R.L. Arora (II) V. State of Uttar Pradesh & Ors.,
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 185
~ COLLECTOR, RANGA REDDY DISTT & ORS. [CK THAKKER, J]
(1964) 6 SCR 784, this Court held that in view of the amendment A
made in the Act, even if the acquisition did not satisfy conditions
laid down under clause (a) and clause (b) of sub-sectio,. '1) of
Section 40 of the Act, it would be valid, if they satisfy conditions
in clause (aa) introduced by the amendment Act. It was also held
·1 that once the Government decided to acquire land for public B
purpose, such acquisition cannot be challenged on the ground
that procedure laid down in Part VII had not been followed.
122. The Court, keeping in view the Land Acquisition
(Amendment) Act, 1962 (Act 31 of 1962), held that clause (aa)
of sub-section (1) of Section 40 as inserted by Act 31 of 1962 c
did not contravene Article 31 (2) or Article 19 (1) (f) of the
Constitution. Accordingly the acquisition was held legal and valid.
123. A special reference may be made to a decision of
the Division Bench of the High Court of Gujarat in Motibhai
D
Vithalbhai Patel & Anr V State of Gujarat & Anr, AIR 1961 Guj
93. In Motibhai, land was sought to be acquired for a Company,
namely, Sarabhai Chemicals for its expansion. It was contended
that acquisition was not for public purpose under Section 4 of
the Act and it was bad in law.
.E
124. Considering the relevant provisions of the Act as
also leading cases on the point, the Court held that even if the
acquisition of land is for a private concern whose sole aim is
to make profit, the intended acquisition of land would materially
-'( help in saving foreign exchange in which the public is also F
vitally concerned in our economic system. It can, therefore, be
said to be a public purpose and would not be bad.
125. The Court stated;
"This is just as well. So diverse and varied can he the
G
activities, engagements and operations which may
redound to the general benefit of the public and in which
the general interest of the public can be said to he really
involved that it is Impossible to expect a definition exclusive
or inclusive which will aptly meet every particular objective
H
186 SUPREME COURT REPORTS [2008] 13 S.C.R
A 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
B and fighting issues and give rise to different problems for
adjudication".
126. It was also observed:
"Public purpose is not a constant. The scope of an
c 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 and economic theorist may
contend for an extremely wida application of this concept
D
of public purpose and over-emphasise the element of the
general interest of the public. The reactionary on the other
hand may strive for stringent restraints on its shifting
boundaries and oppose any shift in emphasis. The true
rule of the matter would seem to lie midway. The Court will
E 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
F affected with public interest. The application of the rule
must rest on the modem economic system of a welfare
state having its own requirements and problems. The
application of the rule would not be governed by right
distinctions nor would the economic principle be allowed
G to be blurred by the blending of forms and interests".
(emphasis supplied)
127. The Court proceeded to state;
"In the field of economic progress and interest of the public
H
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 187
COLLECTOR, RANGA REDDY DISTI & ORS. [C.K. THAKKER, J]
~
the application of the rule would include operations which A
are more or less indispensable to the community. The
very lack of definitiveness of the expression pubiir,
purpose, somewhat paradoxical though it may seem
requires that the field of its coverage must extend to
concerns which are fit to serve the common welfare. That B
coverage can include activities open to the initiative of
both private enterprise and public administration for private
enterprise is certainly amenable to public control and can
be an efficient instrument of economic benefit".
128. Upholding the acquisition, the Court concluded; c
"It cannot be ignored that Respondent No. 2 Company is
a scheduled industry controlled by the provision of the
Industries Development and Regulation Act, 1951. The
price of its products is subject to these controls. We are
D
1f
also satisfied that the public is vitally concerned in the
saving of foreign exchange in our present economic
situation and that this is an aspect of the matter which has
to be borne in mind. We are satisfied that the respondents
are correct in their submission that the intended acquisition
of lands in dispute would materially help in the saving of E
such exchange. We have to consider together all the
aspects of the case which redound to and result in the
benefit of the public and on an assessment of all the facts
and circumstances of the case and the cumulative effect
->I of the same we are of the opinion that the land in dispute F
is needed for a public purpose as contended by the
respondents. We may add that the Notifications under
Sections 4 and 6 are not defective on any of the grounds
urged before us on behalf of the petitioner as held by us
and the declaration under Section 6 is conclusive evidence G
that the land in dispute is needed for a public purpose".
~
129. In Arnod Rodricks, Wanchoo, J. (as His Lordship
I
then was) stated that there is no reason why the State or local
authority should have no power to get further development done
H
188 SUPREME COURT REPORTS (2008] 13 S.C.R.
A through private agencies by lease, assignment or sale of
acquired land.
130. In Jage Ram & Ors. V State of Haryana & Ors.
(1971) 1 SCC 671, a Notification under Section 4 of the Act
was issued for acquisition of land for public purpose, namely,
8 for setting up of a factory for the manufacture of China-ware
and Porcelain-ware. Urgency clause under Section 17 of the
Act was also applied by dispensing with enquiry under Section
5A of the Act. The action was challenged by the land owners.
c 131. Rejecting the contention, upholding the acquisition
and following Somawanti, the Court held that so long as it is not
established that the acquisition is sought to be made for some
collateral purpose, the declaration of Government that it is made
for a public purpose is final, conclusive and not open to
D challenge.
132. In Aflatoon & Ors. v. Lieutenant Governor of Delhi &
Ors. (1975) 4 sec 285, land was sought to be acquired for
"Planned Development of Delhi''. Neither the Master Plan nor
the Zonal Plan was ready. The question before this Court was
E whether acquisition proceedings could have been initiated in
the absence of Master Plan or Zonal Plan.
133. Considering the relevant provisions of the Delhi
Development Act, 1957, the Court held that the proceedings
did not get vitiated in the absence of such Plan. The Court
F observed that acquisition generally precedes development. If
for proper development, land is sought to be acquired, such
action could not be said to be illegal, unlawful or in colourable
exercise of power.
134. It was also contended that the acquisition was for
G Company inasmuch as after acquisition, the Government
proposed to hand over the property or a portion thereof to
Cooperative Housing Societies and since procedure in Part
VII of the Act was not followed, the acquisition was not valid.
H 135. Even the said contention was negatived by the Court
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 189
)- COLLECTOR, RANGA REDDY DISTI & ORS. [C.K. THAKKER, J.]
observing that merely because the Government allotted a portion A
of the property to Cooperative Societies, Part VII did not get
attracted and the acquisition could not be held invalid [See also
Ajay Krishan Singhal v Union of India, (1996) 10 SCC 721].
-1 136. In S.S. Darshan v. State of Karnataka & Ors. (1996)
•'I 7 SC 302, land was sought to be acquired under the Act for B
public purpose, namely, for setting up Information Technological
Park. Challenging the acquisition, it was contended by the
petitioners that the acquisition was ma/a fide and in colourable
exercise of power since primarily the acquisition was for a
I
Private Limited Company and not for the State. c
...
137. The relevant part of the Notification read thus:
.,.-l
"The lands shown in the annexed index are required for a
public purpose, that is, to establish information
·< _., technological park through Karnataka Industrial Areas D
Development Board."
_, (emphasis supplied)
138. Emphasizing the fact that the acquisition was through
Board, this Court ruled that acquisition was for a public purpose.
E
The notification stated about public purpose of establishment
of information technological park through the Board.
139. Considering various clauses in the Joint Venture
Agreement, the Court held that the cumulative effect of all went
t "(
to show that acquisition was for the public purpose of setting up F
~
' technological park by Government of Karnataka through
Karnataka Industrial Areas Development Board and was,
therefore, valid.
140. In W.B. Housing Board Etc. v. Brijendra Prasad
.J
' Gupta (1997) 6 SCC 207, land was acquired for providing G
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.
141. Refuting the contention and upholding the acquisition,
H
190 SUPREME COURT REPORTS [2008] 13 S.C.R.
A 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
B and middle income group 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.
142. Regarding earning of profit, the Court stated:
c
"Simply because there is an element of profit, it could not
make the whole scheme illegal. A private entrepreneur wttl
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
D
class people at nominal or affordable prices, or even on
no-profit-no-loss basis, the Housing Board exercises the
necessary control. It is certainly a public purpose to provide
houses to the community especially to poor people for
whom the prices are beyond their means and they would
E otherwise never be able to acquire a house."
143. The Court concluded:
"The Court must shake off its myth that public purpose is
served only if the State or the Housing Board or the joint
F sector company does not earn any profit. There cannot be
any better authority that the State or the statutory
corporation to supervise or monitor the functions of the
joint venture company. Courts will certainly step in if the
public purpose is sought to be frustrated".
G
(emphasis supplied)
144. Reference was also made to Pratibha Nema & Ors. _.
v. State of Madhya Pradesh & Ors (2003] 10 SCC 626. There,
a piece of dry land of the appellants and others was notified for
H acquisition under Section 4 of the Act for public purpose, namely,
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 191
COLLECTOR, RANGA REDDY DISTI & ORS. [C.K. THAKKER, J.]
for establishment of 'Diamond Park'. The acquisition was A
challenged on the ground that it was not for public purpose but
was meant only to benefit a Company and its associates, and
as such it was in colourable exercise of power and ultra vires
the Act.
-..t 145. Referring to earlier decisions of this Court and drawing B
\
distinction between acquisition by State for 'public purpose'
~ covered by Part II and acquisition for a 'Company' under Part
VII, the Court stated;
'
"Thus the distinction between public purpose acquisition c
~
and Part VII acquisition has got blurred under the impact
of judicial interpretation of relevant provisions. The main
1
\ and perhaps the deceive distinction lies in the fact whether
cost of acquisition comes out of public funds wholly or
partly Here again, even a token or nominal contribution
D
1 by the Government was held to be sufficient compliance
"'' with the second proviso to Section 6 as held in a catena
of decisions. The net result is that by contributing even a
trifling sum, the character and pattern of acquisition could
{ be changed by the Government. In ultimate analysis, what
~
:\ is considered to be an acquisition for facilitating the setting E
up of an industry in private sector could get imbued with
the character of public purpose acquisition if only the
Government comes forward to sanction the payment of a
nominal sum towards compensation. In the present state
_,,,_ of law, that seems to be the real position''. F
(emphasis supplied)
146. Reliance was also placed on State of Kamataka &
Anr. v. All India Manufacturers Organisation & Ors., (2006) 4
SCC 683. In that case, the Government of Karnataka undertook G
i a mega project for developing its transport and communication
'.
system. A Memorandum of Understanding was entered into
... between State Government and a Company for implementation
of the project and lands were acquired. A Public Interest
Litigation (PIL) was filed in the High Court alleging that the land H
192 SUPREME COURT REPORTS (2008] 13 S.C.R.
A was not needed for public purpose and yet excess land was
acquired and had been given to a Company. The action was,
therefore, illegal, unlawful and mala fide.
147. Negativing the contention and upholding the action,
this Court observed that the project was an integrated
B infrastructure development and not merely a highway project.
As an integrated project, it required acquisition and transfer of
lands even away from the main alignment of the road. Acquisition
of land and giving it to the Company was, therefore, legal and
lawful and did not suffer from mala fide.
c
148. The counsel for the appellants referred to Amarnath
Ashram Trust Society & Anr. v. Governor of U. P & Ors., (1998)
1 sec 591. In that case, land was sought to be acquired for
play ground for students of Amarnath Vidya Ashram (public
school), Mathura. Notification under Section 4 of the Act was
D
issued stating that the land was to be acquired for 'public
purpose'. The land-owner challenged the acquisition contending
that the land was acquired for a Society and since procedure
prescribed in Part Vil was not followed, the acquisition was bad
in law.
E
149. Upholding the contention, quashing the proceedings
and referring to Pandit Jhandu Lal, this Court observed;
"It is now well established that if the cost of acquisition is
borne either wholly or partly by the Government, the
F 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.
G
Admittedly, in the present case the entire cost of acquisition
is to be borne by the appellant society and, therefore, it is
~
an acquisition for a company and not for a public purpose.
That is also borne out by the notification issued under
1-1 Section 6 of the Act which states that "the land mentioned
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 193
COLLECTOR, RANGA REDDY DISTT & ORS. [C.K. THAKKER, J.]
in the schedule below is needed for the construction of A
play-ground for students of Amar Nath Vidya Ashram
(public school), Mathura in district Mathura by the Amar
, Nath Ashram Trust, Mathura". Therefore, simply because
in the notification issued Under Section 4 of the Act it was
"i stated that the land was needed for a public purpose, B
namely, for a play- ground for students of Amar Nath Vidya
Ashram (public school), Mathura, it cannot be said that
the acquisition is for a public purpose and not under
Chapter (Part) VII for the appellant-society in view of
subsequent events and the declaration made Under c
Section 6".
(emphasis supplied)
150. Finally, reference was made to a recent decision of
this Court in Devi(lder Singh & Ors., v. State of Punjab & Ors.,
D
-i (2008) 1 SCC 728. In DevinderSingh, land was sought to be
acquired by the State to set up 'Ganesha Project', a Company
registered under the Companies Act, 1956. The acquisition
~
was challenged on the ground that though land was sought to
be acquired for a Company, procedure was followed under
Part II and not under Part VII and hence it was bad in law. The E
record revealed that the payment of entire amount of
compensation was to be made by the Company. It was,
therefore, incumbent to follow procedure laid down in Part VII.
During the pendency of the writ petition, however, it was
~. contended by the State that it would be contributing Rs.100/- F
and hence it was covered by Part II and the acquisition was
legal and valid.
151. Observing that the acquisition was for a Company
and not by the State for a 'public purpose', the Court held that
G
the procedure laid down in Part VII was required to be followed.
~ Since it was not done, the acquisition was bad in law.
,I..
152. Negativing the contention that the acquisition was .by
the State, this Court said;
H
194 SUPREME COURT REPORTS (2008] 13 S.C.R.
A "In this case we may notice that purported contribution
had been made only after the writ petitions were filed.
Ordinarily, this Court would not have gone into the said
question but the agreement provides for payment of entire
compensation by the company. We do not know as to at
B what stage the State thought it fit to meet a part of the
expenses for acquisition of land. Such an opinion on the
part of the State having regard to the statutory scheme
should have been formed prior to entering into the
agreement itself. The agreement does not mention about
c any payment of a part of compensation by the State. We,
in absence of any other material on record, must hold that
the State had not formed any opinion in that behalf at least
when the agreement was executed. The wisdom in all
probabilities dawned on the officers of the State at a later
stage".
D
(emphasis supplied)
Satisfaction of Government and Judicial Review
153. In our judgment, in deciding whether acquisition is
E for 'public purpose' or not, prima facie, Government is the best
judge. Normally, in such matters, a writ Court will not interfere
by substituting its judgment for the judgment of the Government.
154. In Hamabai, the Judicial Committee of Privy Council
stated;
F
"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 sic jubeo' but at least a Court would not
G
easily hold them to be wrong".
(emphasis supplied) '
155. This Court, in R.S. Nanji, reiterated the principle laid
H down by the Privy Council. The Constitution Bench observed;
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 195
~ COLLECTOR, RANGA REDDY DISTT & ORS. [C.K. THAKKER, J.]
"Prima facie the Government is the best judge as to A
whether 'public purpose' is served by issuing a requisition
order, but it is not the sole judge. The courts have the
jurisdiction and it is their duty to determine the matter
whenever a question is raised whether a requisition order
--1
is or is not for a 'public purpose"'. B
(emphasis supplied)
156. In Somawanti, this Court interpreted sub-section (3)
of Section 6 of the Act and held that the declaration made under
Section 6 of the Act is 'conclusive evidence' that the land is c
needed for public purpose.
157. It was contended that the declaration can be made
by the Government arbitrarily and if such declaration is irrational,
unreasonable, mala fide or de hors the Act, it should be open
to a Court to decide the question . D
.J
158. Dealing with the submission, the majority stated;
"Now whether in a particular case the purpose for which
land is needed is a public purpose or not is for the State
Government to be satisfied about. If the purpose for which E
the land is being acquired by the State is within the
legislative competence of the State the declaration of the
Government will be final subject, however, to one exception.
That exception is that if there is a colourable exercise of
power the declaration will be open to challenge at the F
·~
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
G
a public purpose but a private purpose or no purpose at
all the action of the Government would be colourable as
not being relatable to the power confirmed upon it by the
Act and its declaration will be, a nullity".
(emphasis supplied) H
196 SUPREME COURT REPORTS [2008] 13 S.C.R.
A 159. The majority concluded;
'Though we are of the opinion that the courts are not entitled
to go behind the declaration of the Government to the effect
that a particular purpose for which the land is being acquired
is a public purpose we must emphasise that the declaration
B of the Government must be relatable to a public purpose as
distinct from a purely private purpose. If the purpose for
which the acquisition is being made is not relatable to a
public purpose then a question may well arise whether in
making the declaration there has been, on the part of the
c Government a fraud on the power conferred upon it by the
Act. In other words the question would then arise whether
that declaration was merely a colourable exercise of the
power conferred by the Act, and, therefore, the declaration
is open to challenge at the instance of the party aggrieved.
D To such a declaration the protection of s. 6 (3) will not extend.
For, the question whether a particular action was the result -..
of a fraud or not is always justiciable, provisions such as
S. 6(3) notwithstanding".
(emphasis supplied)
E
160. In Srinivasa Cooperative House Building Society
Ltd. v. Madam Gurumurthy Sastry & Ors, (1994) 4 SCC 675,
this Court held that a token contribution from public revenue cannot
ipso facto be treated as colourable exercise of power by the
F State in acquisition of land. Each case must furnish its backdrop
whether the action is for public purpose or for a private purpose.
161. In Bajirao T Kate (dead) by LRs. & Anr. v. State of
Maharashtra & Ors., (1995) 2 SCC 442, this Court held that
satisfaction of the State Government regarding existence of
G public purpose is not open to judicial scrutiny unless there is
ma/a fide or colourable exercise of power.
162. The Court stated;
"It is primarily for the State Government to decide whether
H there exists public purpose or not, and it is not for this
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 197
~ COLLECTOR, RANGA REDDY DISTT & ORS. [C.K. THAKKER, J.]
Court or the High Courts to evaluate the evidence and A
come to its own conclusion whether or not there is public
purpose unless it comes to the conclusion that itis a mala
fide or colourable exercise of the power. In other words
the exercise of the power serves no public purpose or it
.__,
serves a private purpose". B
(emphasis supplied) ·
163. In Laxman Rao Bapurao Jadhav v. State of
Maharashtra, (1997) 3 SCC 493, this Court held that it is for
·the State Government to decide whether the land is needed or
is likely to be needed for a public purpose and whether it is
c
suitable or adaptable for the purpose for which the acquisition
was sought. The mere fact of empowering the authorized officer
to inspect and find out whether the land would be adaptable for
the public purpose does not take away the power of the
D
"' Government to take a decision ultimately.
164. We may, however, recall Dau/at Singh once again at
this state. There, referring to all leading cases and dealing with
the ambit and scope of judicial review on the satisfaction by the
State Government on 'public purpose', this Court stated; .E
"Public purpose is bound to vary with times and prevailing
conditions in the community or locality and, therefore, the
legislature has left it to the State (Government) to decide
what is public purpose and also to de·clare the need of a
-\
given land for the purpose. The legislature has left the F -
discretion to the Government regarding public purpose.
The Government has the sole and absolute discretion in
the matter'. -\
(emphasis supplied)
G
165. It was contended that the italicized portion quoted
,.... above (The Government has the sole and absolute discretion
in the matter) is not in consonance with settled legal position
or in accord with earlier decisions of this Court including
decisions rendered by various Constitution Benches. We have H
"
198 SUPREME COURT REPORTS [2008] 13 S.C.R.
A already referred to R. S. Nanji wherein before more than half a
century, Constitution Bench of this Court held that prima facie,
the Government is the best judge to decide public purpose but
it is not the sole judge. That was the view of the Privy Council
in Hamabai. Again, in Somawanti, the Constitution Bench held
B that in case of colourable exercise of power by the State
Government or fraud on statute, the declaration under Section
6 is open to challenge, notwithstanding the 'finality clause' under
sub-section (3) of the said section.
166. We would have indeed considered the contention of
C the learned counsel for the appellants closely in the light of
earlier decisions of this Court. We are, however, of the view
that on the facts and in the circumstances of the present case,
the Government was right in forming an opinion and reaching
a satisfaction as to 'public purpose' and in initiating proceedings
D under Sections 4 and 6 and in invoking Part II of the Act. 'Ne,
therefore, refrain from undertaking further exercise. In our
considered opinion, it is not necessary for us to enter into larger
question in view of 'fact situation' in the instant case.
Conclusions
E
167. Applying the aforesaid principles to the case on hand, in
our considered opinion, it cannot be said that the proceedings
initiated by the State for acquisition of land under the Land Acquisition
Act, 1894 are illegal, unlawful, unwarranted, mala fide, fraud on
F statute or have been taken in colourable exercise of power.
168. As already adverted to earlier, the State of Andhra
Pradesh in the background of 'World Tourism Organization
Report' and 'Vision 2020 Document' took a policy decision for
the development of the City of Hyderabad. For the said purpose,
G it decided to establish an Integrated Project which would make
Hyderabad a major Business-cum-Leisure Tourism
Infrastructure Centre for the State. The project is both structurally
-""
as well as financially integrated. It is to be implemented through
Andhra Pradesh Infrastructure and Investment Corporation
H (APllC) which has taken all steps to make Hyderabad a world-
SOORARAM PRATAP REDDY & ORS. v. DISTRICT 199
COLLECTOR, RANGA REDDY DISTI. & ORS. [C.K. THAKKER, J.]
class business destination. APllC is an instrumentality of State A
and works as 'Nodal Agency' developing the project which would
facilitate socio-economic progress of the State by generating
·revenues, weeding out unemployment and bringing new
avenues and opportunities for public at large. Development of
infrastructure is legal and legitimate 'public purpose' for B
exercising power of eminent domain. Simply because a
Company has been chosen for fulfillment of such public purpose
does not mean that the larger public interest has been sacrificed,
r ignored or disregarded. It will also not make exercise of power
bad, ma la fide or for collateral purpose vitiating the proceedings. c
169. In our judgment, the respondents are right in
submitting that in case of integrated and indivisible project, the
project has to be taken as a whole and must be judged whether
it is in the larger public interest. It cannot be split into different
components and to consider whether each and every component D
will serve public good. A holistic approach has to be adopted
in such matters. If the project taken as a whole is an attempt in
the direction of bringing foreign exchange, generating
employment opportunities and securing economic benefits to
the State and the public at large, it will serve public purpose. E
170. It is clearly established in this case that the
Infrastructure Development Project conceived by the State and
executed under the auspices of its instrumentality (A~llC) is
one covered by the Act. The Joint Venture Mechanism for
-"\
implementing the policy, executing the project and achieving F
lawful public purpose for realizing the goal of larger public good
would neither destroy the object nor vitiate the exercise of power
of public purpose for development of infrastructure. The concept
of joint venture to tap resources of private sector for infrastructural
development for fulfillment of public purpose has been G
recognized in foreign countries as also in India in several
decisions of this Court.
171. The entire amount of compensation is to be paid by
State agency (APllC) which also works as nodal agency for
H
200 SUPREME COURT REPORTS [2008] 13 S.C.R.
A execution of the project. It is primarily for the State to decide
whether there exists public purpose or not. Undoubtedly, the
decision of the State is not beyond judicial scrutiny. In appropriate
cases, where such power is exercised mala fide or for collateral
purposes or the purported action is de hors the Act, irrational or
B otherwise unreasonable or the so-called purpose is 'no public
purpose' at all and fraud on statute is apparent, a writ-court can
undoubtedly interfere. But except in such cases, the declaration of
the Government is not subject to judicial review. In other words, a
writ court, while exercising powers under Articles 32, 226 or 136
c of the Constitution, cannot substitute its own judgment for the
judgment of the Government as to what constitutes 'public purpose'.
172. Taking the facts in their entirety, we are of the view
that the action of the State in initiating acquisition proceedings
for establishing and developing infrastructure project cannot be
D held contrary to law or objectionable. The High Court was,
therefore, right in dismissing writ petitions as also writ appeals
and we find no infirmity therein. All the appeals, therefore, are
liable to be dismissed and are accordingly dismissed, however,
leaving the parties to bear their own costs.
E K.K.T. Appeals dismissed.
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