Supreme Court of India
URMILA ROY & ORS.versusM/S.BENGAL PEERLESS HOUSING DEVELOPMENT COMPANY LTD. & ORS.
- Citation
- 2009 INSC 389
- Decided
- 23 March 2009
- Disposal
- Dismissed
- Bench
- TARUN CHATTERJEE
Holding
The acquisition was for a public purpose because substantial compensation was paid from State funds and the housing scheme, though executed by a joint‑sector company, was authorized under Section 27A with overall State control, rendering the appeal dismissible.
Summary
The appellants, who owned land intended for an international school and other projects, challenged the State's acquisition of their land for a housing scheme that was to be executed by a private joint‑sector company, Bengal Peerless. The High Court initially set aside the acquisition, but a Division Bench later upheld it, prompting the present appeal. The Supreme Court examined whether Part II or Part VII of the Land Acquisition Act applied, whether the scheme satisfied Section 27A of the West Bengal Housing Board Act, 1972, and whether the acquisition was a colourable exercise of power favouring the private company. It held that the compensation was substantially paid from State funds, the scheme was authorised under Section 27A with overall State control, and therefore the acquisition satisfied the public‑purpose test. Consequently, the appeals were dismissed.
Issues considered
- Whether Part II or Part VII of the Land Acquisition Act, 1894 governs the acquisition proceedings.
- Whether the housing scheme satisfies the requirements of Section 27A of the West Bengal Housing Board Act, 1972.
- Whether the acquisition and the scheme constitute a colourable exercise of power to unduly benefit Bengal Peerless.
Legislation cited
- Companies Act, 1956s. 617
- Land Acquisition Act, 1894s. 11-A, s. 3(cc), s. 4, s. 6
- West Bengal Housing Board Act, 1972s. 17, s. 18, s. 23, s. 27A, s. 28, s. 35
Subjects
land acquisitionpublic purposejoint sector companyhousing schemecompensationPart II vs Part VIIcolourable exercise of powerWest Bengal Housing Board Act
Judgment
[2009] 4 S.C.R. 834
A URMILA ROY & ORS.
v.
MIS.BENGAL PEERLESS HOUSING DEVELOPMENT
COMPANY LTD. & ORS.
Civil Appeal No. 1780-1781of 2009
B MARCH 23, 2009
[TARUN CHATTERJEE AND HARJIT SINGH BEDI, JJ.]
Land Acquisition Act, 1894 - ss. 4 and 6 - West Bengal
Housing Board Act, 1972- s. 27A- Notification for acquisition
C of land for public purpose - Case of land owners that land
acquired for Housing Scheme by private party - Challenge to
- Held: Test of acquisition for public purpose was satisfied -
Government retained overall control over the housing scheme
- Substantial part of compensation was paid by State
D Government or Housing Board -Scheme was prepared in
terms of 1972 Act and it provided for benefits of poor sections
of society - Also, land owners waived their right to challenge
acquisition - They acquiesced to the acquisition - Hence,
order of Division Bench of High Court that land was acquired
E for public purpose does not call for interference.
It is the case of the appellant that they purchased
land for a project and had been negotiating with the State
Housing Board. However, before the finalisation of the
project, the State Government issued a Notification for
F acquisition of the said land for a public purpose. The said
land was acquired for a Housing Scheme by a Housing
Development Company-private party. An award was
passed and the land owners were awarded
compensation. Appellants challenged the acquisition
G proceedings. The Single Judge of High Court allowed the
writ petition. However, the Division Bench of High Court
set aside the order of the Single Judge. Hence the present
appeals.
H 834
URMILA ROY & ORS. V. MIS.BENGAL PEERLESS 835
HOUSING DEV. CO. LTD. & ORS.
•
The question which arose for consideration in these A
appeals was whether Part II or Part VII of the Land
Acquisition Act is applicable to the acquisition
proceedings; that whether the Housing Scheme satisfied
the requirement of section 27A of the West Bengal
Housing Board Act, 1972; and whether the acquisition and B
the Scheme were a colourable exercise of power so as to
give undue benefit to the private party-BP.
Dismissing the appeals, the Court
HELD: 1.1 BP was not a Government Company, c
within the meaning of s. 3(cc) of the Land Acquisition Act,
1894 inasmuch as the Government did not hold 51% of
the paid-up share of the capital. However, s. 3(cc) is to be
read along with s. 6 explanation 2 appended therewith. A
perusal of the Second proviso and explanation 2 to s. 6
D
of the Act in particular reveals that if the compensation
awarded for the property is paid substantially out of the
funds of a Corporation owned or controlled by the State,
such compensation will be deemed to be paid out of
public funds and as such would satisfy the test of acqui-
sition for a public purpose. [Para 11,12] [848-C; 850-F] E
1.2 As per letter issued by the Land Acquisition
Collector on 13th ~ovember 2001 to the Housing Ministry
of the State Government, a request had been made that a
sum of Rs.3.00 Crores which represented about 50% of F
the compensation of the acquired land be deposited. This
memo had been forwarded by the State Government to
the Housing Board and on 23rd November 2001 a sum of
Rs.1.70 crores towards compensation had been sent by
~
BP to the Land Acquisition Collector through the Housing
G
Board. It appears that on 30th October 2003 the State
Government had requested the Housing Board to make
arrangements for the balance payment of compensation
of about Rs.82,04,138 and by a memorandum of 31st
October 2003 the Government of West Bengal had
H
836 SUPREME COURT REPORTS [2009] 4 S.C.R.
A directed the Housing Board to pay the additional balance
compensation which too was defrayed by an account
payee cheque dated 03rd November 2003 drawn on the
Bank of Maharashtra. The account statement of the Bank
of Maharashtra was produced for perusal and this
B statement supports the argument that the said amount
had, indeed, been paid from the funds of the Housing
Board which is completely owned and controlled by the
State Government. In their written submissions the
appellants doubted the accuracy of this statement, by
c asserting that they had not been able to verify its contents
as it had been produced for the first time in this Court.
Even if this objection is accepted and the statement ruled
out of consideration, the other evidence on record does
indicate that a substantial part of the compensation paid
by the State Government or by the Housing Board which
D
clearly satisfies the test of public purpose. The finding of
the Division Bench that the procedure envisaged in Part
II and not in Part VII of the Act would be applicable is
endorsed. This is precisely what has been done. [Paras
13 and 14] [850-G-H; 851-A-D; 853-E-F]
E
1.3 There is merit in the submission that the said Act
specifically provided for the transfer of the acquired land
to a Joint Sector Company for the purpose of the
execution of the Housing Scheme with the previous
F approval of the State Government and that the scheme
had indeed been framed under sections 17 and 18 and
thereafter entrusted for execution to the BP; and that
though BP had been entrusted with the execution of the
scheme the overall control remained with the Housing
G
Board which was, in fact, an extension of the State .
Government itself and the State Government a fortiori
retained overall control in the execution of the scheme.
[Para 16] [854-A-C]
1.4 The record indicates that as a consequence of a
H Memorandum of Understanding, a Joint Sector Company
URMILA ROY & ORS. V. MIS.BENGAL PEERLESS 837
HOUSING DEV. CO. LTD. & ORS.
for the execution of the housing scheme had been created A
and it was provided that 49.5% of the shares capital would
be held by each of the two i.e. the Housing Board and BP
and the balance 1% would be held by the public and the
company would be run independently by nine Directors,
of whom five including the Chairman were to be B
nominated by the State Government. It is also relevant that
the scheme had, in fact, been prepared by the State
Government after due deliberation and had been initiated
as per the provisions of the West Bengal Housing Board
Act, 1972 by virtue of a meeting held on 17th May 2000 in C
the Office of the Secretary, Housing Department, the
Commissioner of the Housing Board, the Land Acquisition
Collector and several other senior officials and the
proposal had been mooted for the acquisition of the land
for the purpose of a scheme for weaker sections of society
0
and others with modest incomes. The scheme also
provided for the construction of 1800 dwelling units o'f
various categories with at least 50% to be earmarked for
the lower and middle income groups with the price
subsidized for the former and all flats for the middle
income group to be provided on 'no profit no loss' basis, E
and for facilities for schools, roads etc. for the benefit of
those who were ultimately to reside in the dwelling units.
Significantly also, the scheme provided that there would
be no escalation on account of any reason whatsoever
for the price charged for the dwelling units and that the F
allotment of the dwelling units would be on the basis of a
lottery. [Para 16] [854-C-H; 855-A)
1.5 Section 27-A specifically authorizes the Housing
Board in public interest to entrust a housing scheme to a G
Joint Sector Company with the previous approval of the
State Government. There is no warrant for the proposition
that unless a budgetary provision is made by the Housing
Board or that a final scheme is prepared in accordance
with section 23 of the 1972 Act, no land can be acquired
H
838 SUPREME COURT REPORTS [2009] 4 S.C.R.
A for the purpose of execution of a housing scheme. Section
17 of the 1972 Act itself gives the power to the Housing
Board to make a scheme and that section 27 A further
authorizes the Board in public interest to entrust a
housing scheme to a Joint Sector Company for execution
B and for that purpose section 28(2) of the Act further
authorizes the Housing Board to take steps for compul-
sory acquisition of any land required for the purpose of a
housing scheme. [Para 18] [857-F-H; 858-A-B] ,
1.6 Though the execution of the housing scheme has
c been entrusted to a Joint Sector Company, the overall
control over the project has been retained by the
Government controlled Board of Directors, full details of
the scheme have been provided with large provisions for
the benefit of the poorer sections of society, with the
D allotment of tenements either on a subsidized price or on
"no profit no loss" basis for the low and middle income
groups respectively, allotment by draw of lots to avoid
any arbitrariness and a complete freeze on the price of
residential accommodation with no escalation whatsoever
E for whatever reason and the provision of facilities for
effective and comfortable living such as schools, roads,
sewage etc. Therefore, the housing scheme fully satisfies
the tests of public purposes. [Para 20] [862-G-H; 863-A-B]
West Bengal Housing Board and Ors. vs. Brijendra
F Prasad Gupta and Ors. 1997 (6) SCC 207; State of Tamil Nadu
vs. L. Krishnan (1996) 1 SCC 250 - relied on.
1.7 The appellants had not filed any objection to the
acquisition on the plea that some assurance had been
held out that they too would be allowed to participate in
G
the housing scheme. This fact has been denied by the
.
respondents and it has been emphasized that as per letter
dated 8th March 2001 the land-owners had, in fact, waived
their right to challenge the acquisition. [Para 21] [863-C-D]
H 1.8 It is significant that the letter written on behalf of
URMILA ROY & ORS. V MIS.BENGAL PEERLESS 839
HOUSING DEV CO LTD. & ORS.
all the land owners spells out that the owners had in fact A
been willing to negotiate the price for the land at the time
when the acquisition were still incomplete as only the
Notification under section 4 of the.Act had, at that stage,
been issued (4th December 2000). It is also significant that
the declaration under section 6 had been issued on 29th B
November 2001 and the award rendered on 27th
December 2003. Therefore, it is evident that the land
owners had, in fact, acquiesced to the acquisition and
cannot now turn around to say that the acquisition was
bad in law.[Para 22] [865-E-F]
c
State of Gujarat and Anr vs. Sankalchand Khodidas Pawl·
(0) 1977 (4) SCC 590; Pratibha Nema and Ors. Vs. State of
MP and Ors. (2003) 10 SCC 626; Manubhai Jehtalal Patel
vs. State of Gujarat (1983) 4 SCC 553 - referred to.
D
Case Law Reference
1s11 (4) sec 590 Referred to. Para 5
(2003) 1o sec 626 Referred to. Para 5
(1983) 4 sec 553 Referred to. Para 5 E
(1996) 1 sec 250 Relied on. Para 18
.... 1997 (6) sec 201 Relied on. Para 19
.....
CIVIL APPELLATE JURISDICTION : Civil Appeal
Nos ... 1780-1781 of 2009 F
From the Judgement and Order dated 02.07.2007 of the
Hon'ble High Court of Calcutta in FMA No. 671 of 2004 and
FMA 672 of 2004.
..:. Debashish Kunda, Soumitra Ghose Chaudhuri, Subhash G
Bhattacharyya, Subhasis Chakraborty, G. Ramakrishna Prasad,
for the Appellants.
Altaf Ahmed, Prasanjit Basu, A.N. Banerjee, H.K. Puri,
Priya Puri, V.M. Chauhan, for the Respondents.
H
840 SUPREME COURT REPORTS [2009} 4 S.C.R.
A The Judgement of the Court was delivered by
HARJIT SINGH BEDI, J.
1. Leave granted.
2. This judgment will dispose of civil appeals arising out of
B judgment dated 2nd July, 2007 rendered by a Division Bench of
the Calcutta High Court.
3. The facts are as under: Appellant Urmila Roy and others
in W.P No.1002 (W) of 2002 were the writ petitioners before
c the Single Bench of the Calcutta High Court. As per the facts,
6.78 acres of land had been purchased by them avowedly for
putting up an International School, a cultural centre, an l.T. Park
and a Housing Complex and for this purpose they had been in
negotiations with the West Bengal Housing Board (hereinafter
D referred to as "The Housing Board"). It appears, however, that
before the project could be finalized, the State Government
issued a Notification under Section 4(1) of the Land Acquisition
Act. 1894 (hereinafter referred to as "the Act") on 4th December,
2000 seeking to acquire in all 12.67 acres (including 6.78 acres
belonging to the writ petitioners) for a housing scheme. The land
E owner appellants were allegedly given to understand by the
Housing Board that in the event that they did not object to the
acquisition, they too would be permitted to participate in the
proposed project. It is the case of the land owners that on
account of this assurance, they did not raise any serious
F objection to the acquisition, where after a declaration under
Section 6 (1) of the Act dated 29th November, 2001 has issued
and published in the Asian Age on 4th December, 2001. It is
further the case of the land owners that they realized later that
they had been cheated as the land had been acquired for the
G development and implementation of a housing scheme by the
Housing Development Co. Ltd. (hereinafter referred to as "The
Bengal Peerless"). The Collector subsequently i.e. on 22"d
December, 2003 passed an Award determining the
compensation payable and it is the case of the land owners
H that they first came to know of the award on receipt of a notice
URMILA ROY & ORS. V MIS.BENGAL PEERLESS 841
HOUSING DEV CO LTD. & ORS. [HARJIT SINGH BEDI, J.]
1
dated 16 h February, 2004 whereby they were informed that as A
the ownership of the acquired land could not be ascertained,
the compensation had been deposited with the Reference Court
under Section 31 (2) of the Act. The land owners thereupon filed
Writ Petition No. 10051 (W) of 2004 challenging the acquisition
proceedings pleading inter-alia that the said proceedings had B
lapsed by efflux of time under Section 11-A of the Act as the
declaration under Section 6 of the Act had been as published
~ ~
,. on 29 November, 2001 and the Award had been made on 22
December, 2003. It was also pleaded that the declaration under
Section 6(2) of the Act had not been published in the manner c
provided. It was further pleaded that the land had been acquired
under the garb of a public purpose whereas it was intended to
benefit the Bengal Peerless, a private party and an attempt had
been made to camouflage the identity of the beneficiary as it
had not been specified in the Notifications issued under
D
Sections 4 and 6 of the Act and had been brought out for the
first time in the Notification under Section 9 and in this view of
the matter, the land owners had been deprived of their rights to
file appropriate objections. Cumulatively, it was submitted that
in view of the facts, the acquisition itself was a colourable
exercise of power at the instance of the State. E
4. These matters were considered by a learned Single
~ Judge of the Culcutta High Court, who, by his Judgment dated
1
16 h September, 2003 concluded that the Notifications under
Sections 4 and 6 had been properly published as required by F
law, that the land had been acquired for a public purpose, as
detailed in the Notification under Section 4 of the Act and that
the State Government was authorized to entrust the housing
project to a Joint Sector Company to execute the housing
scheme with the sanction of the State Government under Section
G
27A of the West Bengal Housing Board Act, 1972 (hereinafter
referred to as "the 1972 Act"). The Learned Judge, however,
observed that the proposal for the housing scheme had been
initiated by the Bengal Peerless without tile approval of the State
Government and the fact that the entrustment to the Bengal
H
842 SUPREME COURT REPORTS [2009] 4 S.C.R
A Peerless was in public interest had not been examined by the
State Government, and as the scheme itself did not disclose
the budget or detail adequately the residential accommodation
that was to be constructed for the low and middle income groups,
the scheme itself was faulty and finally concluded that it appeared
s from the record that the intention of the Government was to
enable Bengal Peerless to make huge profits and as such the
acquisition was not for a public purpose and was, therefore,
malafide. The learned Single Jud~e accordingly allowed the writ
1 •
petition vide judgment dated 18 May, 2004.
C 5. The matter was thereafter taken before a Division Bench
in FMA No. 671 of 2004 (Bengal Peerless Housing
Development Co.Ltd. vs.Urmila Roy & Ors. ), FMA 672 of 2004
(State of West Segal & Ors. Vs.Urmila Roy & three Ors.) and
FMA 790 of 2006 (Smt. Krishna Majumdar & Ors. Vs. State of
D West Bengal & Ors.) and was argued at length over several
days. The Division Bench by its judgment dated 2"d July 2007,
accepted the argument of the Advocate General appearing for
the State appellant based on several judgments of this Court
that a challenge to an acquisition should not be permitted after
E the award had been rendered, and that in any case, the challenge
even if permissible, had been made belatedly.. The Division
Bench then went on to the facts of the case and observed that
the conclusion of the learned Single Judge that the whole
process of acquisition was malafide, was based on a
F misconception, more particularly as several documents which
were relevant had been ignored, that in the face of these
documents, the finding of the learned Single Judge that the
housing scheme had not been prepared with the approval of
the State Government was erroneous, and that the evidence
G revealed that a substantial part of the compensation for the
acquired land had been paid by the Government or its agencies.
..
The Division Bench further observed that from a perusal of the
record that the acquisition proceedings themselves were
transparent in nature and merely because the name of Bengal
Peerless as the ultimate beneficiary had come up for the first
H
URMILA ROY & ORS. V. MIS.BENGAL PEERLESS 843
HOUSING DEV. CO. LTD: & ORS. [HARJIT SINGH BEDI, J.]
time in the Notification under Section 9 of the Act could not lead A
to the conclusion that the acquisition proceedings were a
colourable exercise of power. The Court then examined the
purpose behind the enactment of the 1972 Act and opined that
the Housing Board had been established under governmental
control with a view to alleviating the shortage of housing and in B
particular referred to Sections 17 to 21 to highlight that all its
members were appointed by the State Government and the
,,, Chairman was, in fact, the Minister of In-charge of the Housing
in the State Government. The Division Bench also held that
Section 27 A which had been inserted in the parent act by an c
amendment of 1993 was for the specific purpose of authorizing
the Housing Board to entrust the execution of a housing scheme
to a joint sector company if it was felt.that it V:Jas unable to perform
its duties on account offinancial limitations. The Division Bench
then observed that a Memorandum of Understanding had been
signed on 2nd May 1994 providing that the Housin_g Board and D
the Bengal Peerless would have an equal share capital of 49.5%
each and the balance 1% would be held by the public and that
the company would be run by a nine member independent Board
of Directors of whom five, including the Chairman, were to be
nominated by the State Government with the result that the State E
Government was, in effect, in complete control of the
management of Bengal Peerless. It was finally concluded that
"' in view of this feature and the fact that as per record a substantial
part of the compensation had been paid out of public funds by
the Housing Board, a State Government undertaking, it was not F
open to the land owners to argue that the land had been acquired
to benefit a purely private company. The Division Bench also
relied upon the judgment in State of Gujarat & Anr vs. ·
Sankalchand Khodidas Patel (D) (1977) 4 SCC 590 and
.;. Pratibha Nema & Ors. Vs. State of MP & Ors. (2003) 10 SCC G
626 to draw a distinction between acquisition for a public
purpose and acquisition for a company and observed that as
some part of the compensation had been paid by the Housing
Board, the fact that the procedure for acquisition for a public
purpose had been adopted was justified on the facts of the case H
844 SUPREME COURT REPORTS [2009] 4 S.C.R.
A and relying further on Manubhai Jehtalal Patel vs. State of
Gujarat (1983) 4 SCC 553 further held that even a contribution
of Re.1/- from the State Revenues could, in certain
circumstances, be held adequate to hold that the acquisition
was for a public purpose. The Division Bench finally observed
B thus:
"From the above it becomes crystal clear that the
contribution to be made by the State need not be substantial
and even a token contribution of Rs.100 would satisfy the
requirement that the compensation has been paid out of
C public funds."
6. The Division Bench thereafter examined the issue as to
whether the housing scheme had been prepared in accordance
with the provisions of the 1972 Act and once again differed from
D the findings of the learned Single Judge that the provisions had
been ignored, as a perusal of the record revealed that the
scheme had been framed by the State Government pursuant to
ih
a meeting held on 1 May 2000 in the Office of the Secretary
Housing in the presence of the Commissioner and the Land
Acquisition Officer of the Housing Board and the agenda
E circulated for the meeting established that it had been called to
discuss the suitability of the scheme which had been designed
to benefit the weaker sections of society and others with modest
means, as it envisaged the construction of about 1800 dwelling
.
units of three categories, namely the low, the middle and the
F higher income groups and that at least 50% of the aforesaid
units were to be reserved for the first two groups with the price
for the former category being substantially subsidized and the
flats for the middle income group to be provided on "no profit no
loss basis" and, significantly, it was specified that the price once
G determined by the Housing Board before the start of the project ..
would remain firm and that no escalation on any account was to
be made for any of the dwelling units of any category. The
aforesaid information led the Division Bench to conclude that
the non-escalation Clause in particular, indicated thatthe scheme
H was not motivated by profiteering alone but was in fact for the
URMILA ROY & ORS. V MIS.BENGAL PEERLESS 845
HOUSING DEV CO. LTD. & ORS. [HARJIT SINGH BEDI, J.]
benefit of poorer sections, and that if any further evidence was A
required to prove the bonafides of Bengal Peerless, the scheme
also provided that distribution of plots was subject to the
reservation of plots as per the policy of the Housing Board and
allotments were to be made by a lottery system and that scheme
was to be completed within 5 years from the date of the B
commencement of the work. Finally, the Division Bench
observed as under:
" "In our opinion, these observations of the Supreme Court
are fully applicable to the facts and circumstances of the
present case. The facts narrated above make it abundantly C
clear that Housing Scheme has been prepared by the
Government, after due consideration and it could not be
said to have been initiated at the instance of the Bengal
Peerless. Therefore, the learned Single Judge has
erroneously held that the acquisition proceedings were D
null and void."
7. The Division Bench also repelled the argument raised
on behalf of the land owners that as they too were in the process
of setting up a global village in the land the acquisition was
1
untenable by observing that the letter dated 8 h May 2001 written E
by Urmila Roy respondent on which primary reliance had been
made by the land owners with respect to the aforesaid plea
... was not acceptable at this belated stage as the land owners
had not raised any objection to the acquisition of the land by the
State Government, and further that no such plea had not been F
raised in the writ petition. The Court then observed that Writ
Petition No.10002 (W) of 2002 filed by some other land owners
seeking to challenge the same acq,uisition had been dismissed
by Justice Chattopadhyay on 16 September 2003 and the
., issues raised in the present appeal had also been raised before G
the said Judge and had been repelled and it had been
specifically observed that the land had, indeed, been acquired
for a public purpose and not for a private company, as alleged.
The Division Bench, accordingly, allowed the appeal leading to
the present matters before this Court. H
846 SUPREME COURT REPORTS [2009] 4 S.C.R.
A 8. The learned counsel for the appellants has raised
several issues before us. It has been submitted that the Bengal
Peerless was not a Corporation within the meaning of Section
3 (cc) of the Act, inasmuch as 51% of the share capital in the
said company was not held by the State Government or any
B Central Government or State Government Undertaking as only
49.5% of the shareholding was held by the Housing Board. It
has been submitted that Bengal Peerless was also not a
company within the meaning of section 617 of the Companies ..
Act, 1956 and was therefore a company within the meaning of
C Section 3(e) of the Land Acquisition Act, and as such Part VII of
the Act was applicable and not Part 11 thereof. It has also been
submitted that the housing scheme Annexure P3 was not a
housing scheme. as envisaged under the 1972 Act but was
merely a proposal that too an incomplete one. Reliance for this
D submission has been placed on Sections 17, 18, 19,23 27 and
27(A) of the 1972 Act. As a corollary, it has been argued that
the finding that Bengal Peerless had been entrusted with the
execution of the housing scheme was incorrect, as no terms
and conditions of such entrustment had been agreed upon as
was a pre-requisite for the execution of a housing project by a
E Joint Sector Company under section 27-A of the 1972 Act. It
has also been urged that the entire amount of the acquisition
money deposited prior to the publication of the declaration under
~
Section 6 of the Land Acquisition Act had been paid by Bengal
Peerless and no part thereof had been paid by the Government
F of West Bengal or the Housing Board, and further the finding of
the Single Bench as also of the Division Bench of the High Court
to the effect that the acquisition proceedings had been set in
motion after the scheme had been duly prepared was incorrect.
It has accordingly been argued that the observation of the
G Division Bench in the State of Tamil Nadu vs.L.Krishnan (1996) ...
1 sec 250 were not applicable to the facts of the case and that
in any event the Tamil Nadu Act which was under consideration
in that matter did not contain a provision analogous to Section
27 A of the 1972 Act and as a necessary consequence, even
H
URMILA ROY & ORS. V. MIS.BENGAL PEERLESS 847
HOUSING DEV. CO. LTD. & ORS. [HARJIT SINGH BEDI, J.]
assuming for a moment that a housing scheme was in fact in A
existence when the Notification under Section 4 of the Land
Acquisition Act has been issued, the said scheme had not been
formalized in terms of Section 27-A of the 1972 Act. It has been
submitted that from the facts writ large that the purpose of the
acquisition and the entrustment to the Bengal Peerless of the B
development of the project was with the intention of giving huge
financial benefits to the Bengal Peerless which was not a public
purpose and was in any case unacceptable in terms of the
purpose of a housing scheme envisaged under the 1972 Act.
9. Jhe arguments of the learned counsel forthe appellants C
have been controverted by the respondent State of West Bengal.
It has been pointed out that the housing scheme had been
designed in terms of the 1972 Act and all the relevant provisions
had been complied with and that in any case by virtue of sub-
section (2) of Section 17 thereof it was open to the .State D
Government to entrust the framing and execution of a Housing
scheme to the Housing Board on such terms and conditions as
it think fit, and that the scope of a similar provision, Section 35
of the Tamil Nadu State Housing .Board Act 1961 had been
examined by this Court in L.Krishnan's case (supra). It has E
also been argued that acquisition of the land for the purpose of
the execution of the housing scheme was a public purpose with
little or no element of profiteering as the bare reading of the
scheme would show, and that, in any case, the middle and lower
income groups were to have subsidized housing on "no profit F
no loss" basis and to ensure that the conditions of the scheme
were scrupulously observed the State Government had retained
complete control over the activities of Bengal Peerless. It has
also been submitted that as the appellants land owners had not
filed objections under Section 5-A of the Land Acquisition Act, G
they were preduded from· challenging the acquisition, more
particularly after the award had been rendered.·
10. We have heard the learned counsel forthe pa~ie~ and·
gone through the record very carefully. We find thaMh_[ee basic.
issues arise for consideration in this matter. They are, i) as to H
848 SUPREME COURT REPORTS [2009] 4 S.C.R.
A whether Part II or Part VII of the Act is applicable to the present
acquisition proceedings, ii) whether the Housing Scheme was
one that satisfied the requirement of Section 27A of the 1972
Act and, iii) whether the acquisition and the Scheme were a
colourable exercise of power so as to give undue benefit to
B Bengal Peerless. We now take up the three issues cumulatively.
11. It has been submitted at the very outset that Bengal
Peerless was not a Government Company, as understood by
Section 3(cc) of the Act as the Government did not hold 51 % of
the paid-up share of the capital. We find, however, that Section
C 3(cc) is to be read along with Section 6 more particularly
Explanation 2 appended therewith. The aforesaid provisions
are reproduced hereunder:
"3(cc).the expression "corporation owned or controlled by
the State" means anybody corporation established by or
D
under a Central, Provincial or State Act, and includes a
Government company as defined in Section 617 of the
CompaniesAct, 1956 (1 of 1956), a society registered
under the Societies Registration Act,1860 (21 of 1860),
or under any corresponding law for the time being in force
E in a State, being a society established or administered by
Government and a co-operative society within the meaning
of any law relating to co-operative societies for the time
being in force in any State, being a co-operative society
in which not less than fifty-one per centum of the paid-up
F share capital is held by the Central Government, or by any
State Government or Governments, or partly by the Central
Government and partly by one or more State
Governments."
Section 6 - Declaration that land is required for a
G
public purpose.- (1) Subject to the provisions of Part VII
of this Act, when the Appropriate Government is satisfied
after considering the report, if any, made under section 5
A, sub-section (2), that any particular land is needed for a
public purpose, or for a company, a declaration shall be
H
URMILA ROY & ORS. V. MIS.BENGAL PEERLESS 849
HOUSING DEV CO LTD. & ORS. [HARJIT SINGH BEDI, J]
made to that effect under the signature of a Secretary to A
such Government or of some officer duly authorized to
certify its orders and different declarations may be made
from time to time in respect of different parcels of any land
covered by the same notification under section 4, sub-
section (1 ), irrespective of whether one report or different B
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) ,- c
(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
D
after the expiry of three years from the date of the
publication of the notification; or
(ii) published after the commencement of the Land
Acquisition (Amendment) Act, 1984 shall be made
after the expiry of one year from the date of the E
publication of the notification :
Provided further that no such declaration shall be made
unless the compensation to be awarded for such property
is to be paid by a company, or wholly or partly out of public
revenues or some fund controlled or managed by a local F
authority.
[Explanation 1. - In computing any of the periods referred
to in the first proviso, the period during which any action
or proceeding to be taken in pursuance of the notification
.;
G
issued under Section 4, sub-section (1 ),is stayed by an
order of a Court shall be excluded.
Explanation 2.- Where the compensation to be awarded
for such property is to be paid out of the funds of a
corporation owned or controlled by the State, such H
850 SUPREME COURT REPORTS (2009] 4 S.C.R.
A compensation shall be deemed to be compensation paid
out of public revenues].
(2) Every declaration shall be published in the Official
Gazette, [and in two daily newspapers circulating in the
locality in which the land is situate of which at least one
B shall be in the regional language, and the Collector shall
cause public notice of the substance of such declaration
to be given at convenient places in the said locality (the
last of the date of such publication and the giving of such •
public notice, being hereinafter referred to as the date of
c publication of the declaration), and such declaration shall
state], the district or other territorial division in which the
land is situate, the purpose for which it is needed, its
approximate area, and where a plan shall have been made
of the land, the place where such plan may be inspected.
D
(3) The said declaration shall be conclusive evidence that
the land is needed for a public purpose or for a company,
as the case may be; and, after making such declaration
the Appropriate Government may acquire the land in a
manner hereinafter appearing.
E
12. A perusal of the Second proviso and Explanation 2 in
particular reveals that if the compensation awarded for the
property is paid substantially out of the funds of a Corporation
owned or controlled by the State, such compensation will be
F deemed to be paid out of public funds and as such would satisfy
the test of acquisition for a public purpose.
13. We see from the record that as per letter issued by the
1
Land Acquisition Collector on 13 h November 2001 to the
Housing Ministry of the State Government, a request had been
G made that a sum of Rs.3.00 Crores which represented about ..
50% of the compensation of the acquired land be deposited.
This memo had been forwarded by the State Government to
the Housing Board and on 23rd November 2001 a sum of Rs.1. 70
crores towards compensation had been sent by Bengal
H Peerless to the Land Acquisition Collector through the Housing
URMILA ROY & ORS. V. MIS.BENGAL PEERLESS 851
HOUSING DEV. CO. LTD. & ORS. [HARJIT SINGH BEDI, J.]
th
Board. It appears that on 30 · October 2003 the State A
Government had requested the Housing Board to make
arrangements for the balance payment of compensation of
st
about Rs.82,04,138 and by a memorandum of 31 October
2003 the Government of West Bengal had directed the Housing
Board to pay the additional balance compensation which too B
rd
was defrayed by an account payee cheque dated 03 November
2003 drawn on the Bank of Maharashtra. The account statement
of the Bank of Maharashtra was produced before us for perusal
and this statement supports the argument that the aforesaid
amount had, indeed, been paid from the funds of the Housing C
Board which is completely owned and controlled by the State
Government. In their written submissions the appellants have
doubted the accuracy of this statement. by asserting that they
had not been able to verify its contents as it had been produced
for the first time in this Court. We find that even if this objection D
is accepted and the statement ruled out of consideration, the
other evidence on record does indicate that a substantial part
of the compensation had been paid from Government funds. In
Pratibha Nema case (supra). that is what this Court had to say:
We may now advert to Section 6. It provides for a E
declaration to be made by the Government or its duly
authorized officer that a particular land is needed for a
public purpose or for a company when the Government is
satisfied after considering the report, if any, made under
Section 5-A(2). It is explicitly made clear that such F
declaration shall be subject to the provisions of Part VII of
the Act which bears the chapter heading "Acquisition of
Land for Companies". Thus, Section 6 reiterates the
apparent distinction between acquisition for a public
purpose and acquisition for a company. There is an G
important and crucial proviso to Section 6 which has a
bearing on the question whether the acquisition is for a
public purpose or for a company. The second proviso lays
down that"no such declaration shall be made unless the
compensation to be awarded for such property is to be
H
852 SUPREME COURT REPORTS [2009] 4 S.C R
A paid by a company, or wholly or partly out of public revenues
or some fund controlled or managed by a local authority".
Explanation 2 then makes it clear that where the
compensation to be awarded is to be paid out of the
funds of a corporation owned or controlled by the State,
B such compensation shall be deemed to be compensation
paid out of public revenues. Thus, a provision for payment
of compensation, wholly or partly, out of public revenues
or some fund controlled or managed by a local authority
is sine qua non for making a declaration to the effect that
c a particular land is needed for a public purpose. Even if
a public purpose is behind the acquisition for a company,
it shall not be deemed to be an acquisition for a public
purpose unless at least part of the compensation is payable
out of public revenues which includes the fund of a local
D authority or the funds of a corporation owned or controlled
by the State. However, it was laid down in Somawanti
case that the notification under Section 6(1) need not
explicitly set out the fact that the Government had decided
to pay a part of the expenses of the acquisition or even to
E state that the Government is prepared to make a part of
contribution to the cost of acquisition. It was further clarified
that the absence of a provision in the budget in respect of
the cost of acquisition, whole or part, cannot affect the
validity of the declaration. The majority Judges of the
F Constitution Bench also clarified that a contribution to be
made by the State need not be substantial and even the
token contribution of Rs. 100 which was made in that case
satisfied the requirements of the proviso to Section 6(1 ).
The contribution of a small fraction of the total probable
cost of the acquisition does not necessarily vitiate the
G
declaration on the ground of colourable exercise of power,
according to the ruling in the said case. Following
Somawanti, the same approach was adopted in Jage
Ram v. State of Haryana. The question, whether the
contribution of a nominal amount from the public exchequer
H
URMILA ROY & ORS. V MIS.BENGAL PEERLESS 853
HOUSING DEV. CO. LTD. & ORS. [HARJIT SINGH BED!, J)
would meet the requirements of the proviso to Section 6, A
had again come up for consideration in Manubhai Jehtala/
Patel v. State of Gujarat. D.A Desai, J. after referring to
Somawanti, speaking for the three-Judge Bench observed
thus: (SCC p. 555, para 4)
"It is not correct to determine the validity of acquisition B
keeping in view the amount of contribution but the
motivation for making the contribution would help in
determining the bona tides of acquisition. Further in
Malimabu case contribution of Re 1 from the State revenue
was held adequate to hold that acquisition was for public c
purpose with State fund. Therefore, the contribution of Re
1 from public exchequer cannot be dubbed as illusory so
as to invalidate the acquisition."
14. In lnderjeet Parekh Vs State of Gujarat in which a
v
D
somewhat restricted meaning has been given to the extremely
broad parameters laid down in Pratibha Nema's case (Supra),
but it has nonetheless been observed that if a reasonable
amount of compensation had been drawn out Government
funds, it would satisfy the requirement of a public purpose as
per the Act In the present case, as already mentioned above, E
we find that a substantial part of the compensation has, indeed,
been paid by the State Government or by the Housing Board
which clearly satisfies the test of public purpose. In this
background, we endorse the finding of the Division Bench that
the procedure envisaged in Part II and not in Part VII of the Act F
would be applicable. This is precisely what has been done.
15. The learned Counsel for the Appellants has also
contended that as the housing scheme had not been prepared
in terms of the 1972-Act it had no valid sanction. It has been
G
highlighted that the entire scheme had been designed to help
Bengal Peerless to make undue profits and the very purpose of
1972 Act had, thus, been frustrated.
16. The learned counsel for the respondent has on the
contrary referred us to Sections 17, 18 and 27 A of the 1972 Act H
854 SUPREME COURT REPORTS [2009] 4 S.C.R.
A to submit that the said Act specifically provided for the transfer
of the acquired land to a Joint Sector Company for the purpose
of the execution of the Housing Scheme with the previous
approval of the State Government and that the scheme had
indeed been framed under Sections 17 and 18 and thereafter
B entrusted for execution to the Bengal Peerless. It has been
submitted that though Bengal Peerless had been entrusted with
the execution of the scheme the overall control remained with
the Housing Board which was, in fact, an extension of the State
Government itself and the State Government a fortiori retained
c overall control in the execution of the scheme. We find merit in
this submission. The record indicates that as a consequence
of a Memorandum of Understanding dated 13th September
1993 a Joint Sector Company for the execution of the housing
scheme had been created on 2a1h May 1994 and it was provided
that 49.5% of the shares capital would be held by each of the
0
two i.e. the Housing Board and Bengal Peerless and the balance
1% would be held by the public and the company would be run
independently by nine Directors, of whom five including the
Chairman were to be nominated by the State Government. It is
also relevant that the scheme had, in fact, been prepared by the
E State Government after due deliberation and had been initiated
as per the provisions of the 1972 Act by virtue of a meeting held
on 1ih May 2000 in the Office of the Secretary, Housing
Department, the Commissioner of the Housing Board, the Land
..
Acquisition Collector and several other senior officials and the
F proposal had been mooted for the acquisition of the land for the
purpose of a scheme for weaker sections of society and others
with modest incomes. The scheme also provided for the
construction of 1800 dwelling units of various categories with at
least 50% to be earmarked for the lower and middle income
G . groups with the price subsidized for the former and all flats for
the middle income group to be provided on "no profit no loss"
basis, and for facilities for schools, roads etc. for the benefit of
those who were ultimately to reside in the dwelling units.
Significantly also, the scheme provided that there would be no
H escalation on account of any reason whatsoever for the price
URMILA ROY & ORS. V MIS.BENGAL PEERLESS 855
.tJOUSING DEV CO. LTD. & ORS. [HARJIT SINGH BEDI, J]
... charged for the dwelling units and tbat the allotment of the A
dwelling units would be on the basis of a lottery. Section.18 of
the 1972 Act which deals with the matters to be provided for by
housing schemes is reproduced below:
"Sec.18. Matters to be provided for by housing
schemes. - Notwithstanding anything contained in any B
other law for the time being in force, a housing sch_eme
may provide for all or any of the following matters, namely:-
...
(a) the acquisition by purchase, exchange or otherwise of
any property necessary for the scheme; c
(b) the construction and reconstruction of buildings;
(c) the sale, letting out or exchange of any property included
in the scheme;
(d) roads, drainage, water-supply, lighting, schools, D
hospitals, dispensaries, marketplaces, parks, playgrounds
and open spaces within a housing scheme;
(e) the reclamation or reservation of lands for markets,
gardens.schools, dispensaries, hospitals and other
amenities in a housing scheme; E
(f) the letting out.management and use, of the Board
premises;
(g) accommodation for any class of inhabitants;
F
(h) the advancing of money for the purpose of the scheme;
(i) the collection of such information and statistics as may
be neces~ary for successful implementation of the
scheme;
•• (ia) development of any urban or rural area for successful
G
implementation of housing schemes and for purposes
ancillary or incidental thereto;
0) any other matter for which, in the opinion of the Board
or the State Government, it is expedient to make provision H
856 SUPREME COURT REPORTS [2009] 4 S.C.R
A with a view to providing housing accommodation and to
improving or developing of any area included in a housing
scheme."
17. We find that the scheme as laid fully satisfies the tests
laid down in this provision. Sections 17, 27A and 28 of the 1972
B Act read as under:
" 17. Powers and duties of Board to undertake
housing schemes.-
(i) Subject to the provisions of this Act the Board may,
C from time to time, incur expenditure and undertake works
for the framing and execution of such housing schemes
as it may consider necessary and such housing schemes
may include housing schemes in relation to lands and
buildings vested in or in the possession of the State
D Government.
~1
(2) The State Government may, on such terms and '
conditions as it may think fit to impose, entrust to the Board
the framing and execution of any housing scheme [,whether
provided for by this Act or not,] and the Board shall
E thereupon undertake the framing and execution of such
scheme.
(3) The Board may, on such terms and conditions as may
be agreed upon and with the previous approval of the
State Government, take over for execution any housing
F
scheme, on behalf of a local authority or co-operative
society, or on behalf of an employer, for building houses
mainly for the residence of the employees of such local
authority, co-operative society or employer, as the case
may be [or for the residence of the members of such co-
G
operative society]. .. '
27 A. Power to entrust existing, or new, joint sector
'
company with housing scheme.- Notwithstanding
anything contained in this Act, the Board may, if it considers
H it necessary so to do in the public interest and is satisfied
URMILA ROY & ORS. V MIS.BENGAL PEERLESS 857
HOUSING DEV CO. LTD. & ORS. [HARJIT SINGH BEDI, J.]
that an existing, or new, joint sector company is willing to A
comply, or has complied, with such terms and conditions
as the State Government may think fit to impose,entrust,
· with the previous approval of the State Government,any
existing, or new, joint sector company with any housing
scheme for execution, and different existing, or new, joint B
sector companies may be so entrusted with different
housing schemes for execution.
28. Power to acquire.- (1) Where any land is needed for
the purpose of a housing scheme or for performing any
other duties or functions of the Board, the Board may C
enter into an agreement with any person for the acquisition
by purchase, lease or exchange, of his rights and interests
in such land either wholly or in part, on payment of an
amount proportionate to the loss or deprivation caused to
the enjoyment of the land. D
(2) The Board may also take steps for the compulsory
acquisition of any land or any interest therein required for
the execution of a housing scheme or for performing any
other duties or functions of the Board and such acquisition
of any land or any interest therein shall be deemed to be E
acquisition for a public purpose within the meaning of the
Land Acquisition Act. "
18. We observe that Section 27-A specifically authorizes
the Housing Board in public interest to entrust a housing scheme F
to a Joint Sector Company with the previous approval of the
State Government. We find that there is no warrant for the
proposition that unless a budgetary provision is made by the
Housing Board or that a final scheme is prepared in accordance
with Section 23 of the 1972 Act, no land can be acquired for the G
purpose of execution of a housing scheme. It is significant that
Section 17 of the 1972 Act itself gives the power-to the Housing
Board to make a scheme and that Section 27A further authorizes
the Board in public interest to entrust a housing scheme tci a
Joint Sector Company for execution and for that purpose H
858 SUPREME COURT REPORTS [2009] 4 S.C.R.
A Section 28(2) of the Act further authorizes the Housing Board to
take steps for compulsory acquisition of any land required for
the purpose of a housing scheme. While dealing with Section
35 of the Tamil Nadu Housing Board Act, 1961 which is akin to
Section 17 of the 1972 Act, this is what this Court had to say in
B L. Krishanan Case (supra):
" ...... The Housing Board is under an obligation to carry
out certain other schemes also as are provided in these
sections. Sub-section (2) of Section 35 states that the
Government may on such terms and conditions as they
c may think fit to impose, transfer to the Board the execution
of any housing or improvement scheme not provided for
by the Act. On such transfer, the Board is under obligation
to undertake the execution of such scheme as if such
scheme has been provided for by the Housing Board Act."
D
Para 15. These provisions make it abundantly clear that
the duty of the Housing Board is not merely the execution
of the housing or improvement scheme prepared and
published by it under the Act but extends to executing
other schemes as well, as are made over to it or agreed
E to be undertaken by it. Now, when Section 35(2) speaks
of transfer to the Board the execution of any housing or
improvement scheme not provided for by this Act, it certainly
cannot mean a scheme prepared in accordance with the
provisions of the Housing Board Act. Moreover, while
F transferring the scheme to the Housing or improvement
scheme prepared in accordance with the Housing Board
Act. Here again, the taking over the scheme by the Housing
Board is subject to such terms and conditions as may be
agreed upon by both. Section 36 indeed discloses that
G what is entrusted to the Housing Board is the job of ..,
clearance or improvement of any slum area. The
Government while directing the Board to undertake the
clearance or improvement of a particular area can also
direct the Board to frame and execute "such housing or
H improvement scheme under this Act as the Government
URMILA ROY & ORS. V MIS.BENGAL PEERLESS 859
HOUSING DEV CO. LTD. & ORS. [HARJIT SINGH BEDI, J.]
may specify" and the Board is obliged to execute such A
scheme as if such scheme is prepared by the Act."
Para 16. In such circumstances, it would not be right to
contend that unless a final and effective scheme prepared
in accordance with the provisions of Chapter VII of the
Housing Board Act is in existence, the Government cannot B
issue a notification under section 4 of the Land Acquisition
Act for acquiring the land required for execution of the
schemes by the Housing Board. To repeat, the Housing
Board is obliged to execute not only the housing or
improvement schemes prepared under the said Chapter c
but also certain other schemes referred to in Sections 35
and 36. For example the Government may conceive a
particular scheme and ask the Housing Board to execute
on such terms and conditions as the Government may
{
specify. In such a situation, there is no question of preparing D
a housing or improvement scheme by the Housing Board
in accordance with the provisions of Housing Board over
again. So far as the scheme framed by the Government
is concerned, there is no enactment governing it. It can,
therefore, be a scheme as ordinarily understood. Similar E
would be the case where the scheme undertaken by a
local authority is made over the Housing Board by mutual
agreement."
19. In West Bengal Housing Board & Ors. vs. Brijendra
Prasad Gupta & Ors. (1997) 6 sec 207 while taking an overall F
view of the entire matter and also dealing with the submission
that some profit motive could be involved in favour of a Joint
Sector Company executing a housing scheme, this is what this
Court had to say:
,,.. G
"Para 19. In this background it is difficult for us to accept
the submissions of the Writ Petitioners that the purpose
for which the requisition had been made was not a public
purpose within the meaning of the Act or that the
circumstances of the cases did not justify the invocation of
H
860 SUPREME COURT REPORTS [2009] 4 S.C.R.
A the provisions of the Act or that the exercise of powers
under that Act was colourable exercise of power.
Para 25. It is a matter of common knowledge that there is
acute shortage of housing accommodation both in rural
and urban areas of the country. Since late the prices of the
B rea1 estate have sky-rocketed making it beyond the reach
of low income and middle income people. The State has
duty to perform to give shelter to homeless people specially
to people in the income group. In the present case the
State was unable to meet this gigantic task. In the
..
c background of shortage of resources which the State has
the legislative enacted the Housing Board Act and
constituted the Housing Board to meet this challenge of
providing houses to the people falling in the low income
group and to others. Again the Housing Board was unable
D to meet the challenge. The Housing Board Act was
amended to bring in the concept of joint venture in order
to tap the resources of the private sector. Thus a joint
venture came into being as disclosed in the supplementary
affidavit of the State as to how the process of starting of
E joint venture had been gone into and how the Board of
Directors of the joint sector company has been constituted
and how the State and Housing Board exercise control
over this joint sector enterprise.
26. Simply because there is an element of profit. it could
F not make the whole scheme illegal. A private entrepreneur
will certainly look to some profit but to see that the profit
motive does not lead to exploitation even of the rich and
that the houses are available to the poor people and to
middle class people at nominal or affordable prices. or
G even on no-profit-no-loss basis, the Housing Board
exercises the necessary control. It is certainly a public . "
purpose to provide houses to the community especially to
poor people for whom the prices are beyond their means
and they would otherwise never be able to acquire a house.
H
URMILA ROY ~ ORS. V. MIS.BENGAL PEERLESS 861
HOUSING DEV CO. LTD. & ORS. [HARJIT SINGH BED!, J.]
27. What has been done in the present case is that the A
profit earned on sale of flats of HIG have been pumped in
to subsidize the prices of the houses falling in LIG and in
this there would certainly be an element of profit both for
the Housing Board as well as the private company in the
joint venture for selling flats of HIG. We fail to see how B
public purpose is not being served in the present case.
28. The Court must shake off its myth that public purpose
is served only if the State or the Housing Board or the joint
sector company does not earn any profit. There cannot be
any better authority than the State or the statutory C
corporation to supervise or monitor the functions of the
joint venture company. Courts will certainly step in if the
public purpose is sought to be frustrated.
29. In the present case Directors appointed by the Housing
0
Board/State on the Board of Directors of the joint venture
company would certainly see that no runaway profit is
earned and that sale price of HIG houses is guided by
market forces but there is no exploitation. Every section of
the society needs protection from exploitation. It is however
not possible nor desirable to lay down any principle as to E
how this is to be done.
33. We find in the present backdrop the inability of the
State Government and the Housing Board to meet the
challenge to achieve the target of even constructing F
50,000dwelling units in urban areas to tackle the acute
problem of homelessness for different categories of
people particularly those falling in Lower Income Group
(LIG) and Middle Income Group (MIG); the State Legislatur~
amending the Housing Board Act and providing for G
incorporation of a joint sector company for executing the
housing scheme on the terms and conditions to be
approved by the Government; selection of the private
entrepreneur for incorporation of the joint sector company
with the Housing Board; the constitution of the Board of H
862 SUPREME COURT REPORTS [2009] 4 S.C.R.
A Directors of the joint sector company; the control of the
Housing Board and the State Government over the joint
sector company to execute the scheme of the housing
project; control on the fixation of prices of the flats to be
constructed by the joint sector company; relevant factors
B taken into consideration for execution of the housing project
and all these to tackle the urgent and growing need of
providing shelter to the LIG and MIG people when it is not
possible for those people to acquire a house of their own
with escalating real estate prices; it cannot be said that
c the public purpose is not being served or the incorporation
of the joint sector company, viz. Bengal Peerless Housing
Development Co.Ltd. and the execution of the housing
project "Anupama" by this joint sector company, in the
given circumstances, on the land in question which is part
of the bigger piece of land is not in public interest. The
D
Housing Board acts as regulatory body and the State >
Government oversees the housing project and has also
imposed certain terms and conditions. No ulterior purpose
has been alleged and it cannot be said that the power
exercised by the State authorities are in any way arbitrary
E or irrational or there is any abuse of power. Rather the
legal compulsion of the State and the Housing Board to
get the housing project executed through a-joint sector
company is quite understandable. We also find the
impugned action is within the purview of law and is valid."
F
20. In view of what has been observed above, and in the
background of the present case, it becomes crystal clear
that though the execution of the housing scheme has been
entrusted to a Joint Sector Company, the overall control
over the project has been retained by the Government
G
controlled Board of Directors, full details of the scheme
have been provided with large provisions for the benefit of
the poorer sections of society, with the allotment of
tenements either on a subsidized price or on "no profit no
loss" basis for the low and middle income groups
H
URMILA ROY & ORS. V. MIS.BENGAL PEERLESS 863
HOUSING DEV. CO. LTD. & ORS. [HARJIT SINGH BEDI, J]
respectively, allotment by draw of lots to avoid any A
-<(
arbitrariness and a complete freeze on the price of
residential accommodation with no escalation whatsoever
for whatever reason and the provision of facilities for
effective and comfortable living such as schools, roads, ·
sewage etc. We are, therefore, of the opinion that the B
housing scheme fully satisfies the tests laid down by the
Supreme Court in the two cases cited immediately above.
· 21. There is yet another aspect which needs to be dealt
with. It appears from the record, and it was so pointed out during
the course of arguments, that the appellants had not filed any c
objection to the acquisition on the plea that some assurance
had been held out that they too would be allowed to participate
in the housing scheme. This fact has been denied by the
respondents and it has been emphasized that as per letter dated
8th March 2001 the land-owners had, in fact, waived their right D
to challenge the acquisition. This letter is. reproduced hereunder
in extenso:
th
"To Date:8 March 2001
The Special Land Acquisition Officer, E
th
South 24 - Parganas, 5 Floor,
.. New Treasury Buildings,
Alipore,Kolkata - 700027.
F
Sir,
Re: Barakhola Mouza J.L.No.21 P.S.Kasba
This has reference to your acquisition notice dated
12.1.2001for12.67 acres land in Plot No.125 & 126 of the G
... subject mouza .
In this connection, I would like to subrT]it that I am the Power
of Attorney (Registered) t'fb1der of the successors of late Abhay
Pad a Pain who was the owner of the aforesaid plots as evident
from the ROR.Acopy of the PIA is enclosed for your kind perusal. H
864 SUPREME COURT REPORTS [2009) 4 S.C.R.
A Incidentally Plot No.126 was duly demarcated showing the
vested portions and the retained portions by the District
Authorities as per copy of the Map enclosed along with a copy
of the Minutes of the meetings held in Chamber of the then ADM
& L.R.O.South 24 - Parganas on 20.3.1996.
B Subsequently 13.56 acres of land was sold to the following
parties and registered under section 41 on 25.6.1999 of
which deed copies are enclosed. Since the tax has not
been assessed, as yet for value to ascertain additional •
stamp duty, the same have not been paid so far. However,
c enquiries are under way, but in the meantime Khazna has
been paid up -to - date as per copies of receipts
dt.18.1.2001 enclosed herewith.
The transfers are:-
D a) Sri Debabrata Choudhary
b) Sri Shreekanta Ray : 6.00 acres
c) Mis. Anarean Estate Co.Ltd.
d) Sri Swadesh Ghosh
E
e) Sri Swapan Dey
f) Smt.lla Dey : 6.58 acres
g) Sri Saptashi Dey
F h) Smt.Basanti Ghosh
The aforesaid transferees did not raise any objection to
govt. acquiring. The land for housing, in face, I had moved
an idea to West Bengal Housing Board and willing to
G negotiate along with the transferees' price for your
·~
acquisition.
Please do let me known for any further information and
clarification /assistance, a may be required.
Thanking you. I am
H
URMILA ROY & ORS. V. MIS.BENGAL PEERLESS 865
HOUSING DEV. CO. LTD. & ORS. [HARJIT SINGH BEDI, J.)
Yours faithfully A
Sd/-Urmila Ray
Constituted Attorney of
Smt. Lily Paul
Smt. Dolly Paul
Smt. Mira Rani Basu B
Enclosed
a) Copies of 8 nos.deed
• b) Copy of power of attorney
c) Copy of witness by ADM,DL,LRO c
d) Copy of Minutes of meeting dt. 26.3.96
e) Copy of Khana receipts
C 735407 dt.Rs.32,277/-
D
C 735408 dt.18.1.01 for Rs.2709"
22. It is significant that this letter written by the Attorney
Urmila Roy, on behalf of all the land owners spells out that the
owners had in fact been willing to negotiate the price for the
land at the time when the acquisition were still incomplete as E
only the Notification under Section 4 of the Act had, at that stage,
been issued (4th December 2000). It is also significant that the
declaration under Section 6 had been issued on 29th November
2001 and the award rendered on 2ih December 2003. It is,
therefore, evident that the land owners had, in fact, acquiesced F
to the acquisition and cannot now turn around to say that the
acquisition was bad in law.
23. In view of the above findings, we are of the opinion that
no further discussion on the other marginal issues that have been G
• raised, needs to be made. The appeals are, accordingly,
dismissed.
N.J. Appeal dismissed.
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