Holding

The requisition notice was validly served on the recorded owners, and the acquisition for the housing scheme was a public purpose despite the profit element, so the appeal is allowed.

Summary

The West Bengal Housing Board, acting through a joint‑sector company, requisitioned and later acquired 1.82 acres of land to build a housing scheme for low‑ and middle‑income groups. The petitioners, who had purchased the land but whose names were not yet entered in the Record of Rights, claimed that the requisition notice was not validly served and that the acquisition was not for a public purpose. The Supreme Court held that service of notice on the owners recorded in the Record of Rights satisfied the statutory requirement and that the Collector was not obliged to make further inquiries. It further ruled that the housing project, even though it involved a profit motive, served a legitimate public purpose under the Act. Consequently, the Court set aside the Calcutta High Court judgment, dismissed the writ petitions and allowed the appeal.

Issues considered

The validity of service of requisition notice under Section 3(2) of the West Bengal Land (Requisition & Acquisition) Act, 1948 when served on owners recorded in the Record of Rights rather than on subsequent purchasers.
Whether the requisition and acquisition of land for a housing scheme implemented through a joint‑sector company qualifies as a public purpose within the meaning of the Act.
Whether the presence of a profit motive defeats the claim of public purpose.
Whether the court may interfere with the policy decision of the State in matters of land acquisition for housing.

Legislation cited

Bangalore Development Authority Act, 1976s. 17
Punjab Town Improvement Act, 1922s. 38
West Bengal Housing Board Act, 1972s. 17, s. 2(12A), s. 27A, s. 29
West Bengal Land Reforms Act, 1955s. 50, s. 51A
West Bengal Land (Requisition & Acquisition) Act, 1948s. 3, s. 4

Subjects

land acquisitionrequisitionpublic purposenotice servicejoint venturehousing schemejudicial reviewprofit motiveWest Bengal Housing Board

Judgment

A WEST BENGAL HOUSING BOARD AND ORS.
v.
BRIJENDRA PRASAD GUPTA AND ORS.

JULY 9, 1997

B (K. RAMASWAMY AND D.P. WADHWA, JJ.]

Land Acquisition :

West Bengal Land (Requisition & Acquisition) Act, 1948--Section
C 3(2)-West Bengal Requisition &Acquisition Rules, 1948-0rderfor requisi-
tion of land-Service of order of the State Govemment on a person recorded
as owner in Record of Rights though he had already sold the land to another
person prior to the requisition b!ft the name of person not yet entered in
Record of Rights despite his applying for mutation-Held, service of order
t
valid.
D
Sections 3( 1) and 4 read with West Bengal Housing Board Act·-Public
purpose for acquisition-Requisition and subsequent acquisition of land for ·
housing scheme for lower income and middle income groups of
people-Held, requisition/acquisition was for a public purpose.

E Tenancy and Land Laws :

West Bengal Land Reforms Act, 195~Section So-Record of
Right~~Held, Collector is not obliged to make a roving enqµily about owner-
ship of the land.

F Town Planning :
..
West Bengal Housing Board Act, 1972:-Sections 2(12A), 17, 27A &
29-Public pwpose-Eami11g of profits-Joi;1t sectors-Held, Cowts muo·t
shake off the myth that public pwpose is seryed only if 110 profit is eamed.
·• .

G P1ice fixation---Eaming of reasonable profits by joint sector company
engaged i11 building houses-Held, does not mitigate agai11st the public pur-
pose behind the requisition or acquisition.

Judicial Review :

H lnterference with Policy matter--Requisition/acquisition of ldnd for
22
WEST BENGAL HOUSING BOARD v. B.P. GUPTA 23

public purpose of providing houses to homeless-{Jn/ess action is unconstitu- A
tional or contrary to statutory provisions or arbitrary, irrational, or in abuse
of power, Court will not inte1fere with the policy matter.

Lands purchased by the respondents were shown in the name of the
erstwhile owner in the Record of Rights despite the application for muta-
tion in the name of the respondents. Therefore, order of requisition was B
served on the erstwhile {)wner under the Act. Subsequently, the lands were
acquired for constructing houses in urban areas mainly for lower income
and middle income groups of people. In view of shortage of resources, the
State constituted Housing Board under the provisions of the Housing
Board Act, to meet the challenge of providing houses to the people falling C
in low and middle income groups. However the Housing Board was unable
to meet the challenge. The Housing Board Act was, therefore, amended to
bring in the concept of joint ventures to tap the resources of the privat~
sector. Thus a joint venture was created for the same.

It was contended on behalf of the respondents that service of order D
of requisition was not served on them and that there was no public purpose
in requisitioning and acquiring the lands.

- On the other hand, it was contended on behalf of the State that any
scheme to solve the housing would promote a public purpose and that such E
a scheme need not be undertaken by the State directly but may well be
implemented through a joint sector company under the supervision, con-
trol and guidance of the State.

Allowing the appeal, this Court
F
HELD : 1. The provisions of service of notice stood complied when
notices were served on the persons recorded as owners in the Record of
Rights. Record of Rights is a statutory document maintained by the
prescribed authority under Section 50 of the West Bengal Land Reforms
Act and it is a notice to the public at large as to who are the owners of the
land in the records of the authorities. Section 3 of the W.B. Land Reforms G
Af:t, oyerrides other laws if there is anything inconsistent with what is
stated in the Act. Of course, the Collector could have asked for a report
of the prescribed authority concerned if any application for mutation of
the land was pending with him. But that would be expecting too much from
the Collector. It is no part of the duty of the Collector to make a roving H
24 SUPREME COURT REPORTS [1997] SUPP. 2S.C.R.

A inquiry into ownership of the persons. [30-D-E; 31-A-B]
Winky Dilawaii v. Anuitsar Improvement Tiust, [1996) 11 SCC 644;
Sureshchandra C. Mehta v. State of Kamataka, [1994) Supp. 2 SCC 511,
<
relied on.

B 2. It is not possible to accept the contention that the purpose for
which the requisition had been made was not a public purpose within the
Act or that the circumstances of the Act did not justify the invocation of
the provisions of the Act or that the exercise of power under that Act was
a colourable exercise of power. [41-A-B]

c H.D. Vora v. State of Maharashtra, AIR (1984) SC 866, relied on.

R. Hillingdon L.B. C., exp Puhlhofer, (1986) 1 AC 484, referred to.

Reg. Secret my of State for Environment, Ex parte Nottinghamshire
D County Council (1986) A.C. 240, cited.
3. Simply because there is an element of profit, it could not make the
whole scheme illegal. A private entrepreneur will certainly look to some
profit but to see that the profit motive does not lead to exploitation even
of the rich and that the houses are available to the poor people and the
E middle class people at nominal or affordable prices, or even no 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. [46-A-B]

F 4. 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 corporation to supervise or monitor the functions of the joint ven-
ture company. Courts will certainly step in if purpose is sought to be
G frustrated. What has been done in the present case is that the profit earned
on the sale offlats of HIG have been pumped in to subsidise 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. Directors appointed by the Housing
Board/State on the Board of Directors of the joint venture company would
H certainly see that no runaway profit is earned and that sale price of ffiG
WEST BENGAL HOUSING BOARD v. B.P. GUPTA 25

houses is guided by market forces but there is no exploitation. Every section A
of the society needs protection from exploitation. It is however not possible
nor desirable to lay down any principle as to how this is done in a particular
case. It is not possible to see how public purpose is not being served in the
present case. [46-C·F]

5. There is acute shortage of housing accommodation both in rural B
and urban areas of the country. Since late the prices of real estate have
sky-rocketed making it beyond the reach of low income and middle income
people. The State has a duty to perform to give shelter to homeless people
especially to the people in the low income group. The Housing Board acts as
regulatory body and the State Government oversees the housing projects C
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 is in any way arbitrary 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. The impugned action is also within the purview of law and D
is valid. [45-E-F; 49-C-D]

6. The Courts normally do not interfere in the policy matter of the
State. If, however, the policy so formulated is against the mandate of the
Constitution or any statutory provision it can certainly be tested on the
principles of judicial review. When an act falls within the policy of the State E
which has been formulated for the benefit for the poor and needy and
which policy cannot be faulted, courts should stay its hands and need not
examine the details minutely with a magnifying glass to find some fault
here and there unless there are allegations of mala jides. An over all view
is to be taken of the matter and this potent weapon of judicial review F
cannot be used indiscriminately. [48-D-F]

CIVIL APPELLATE iURISDICTION : Civil Appeal No. 4333 of
1997.

From the Judgment and order dated 27/29.3.96 of the Calcutta High G
Court in F.M.A.T. No. 2894 of 1995.

V.R. Reddy, Additional Solicitor General, D.P. Gupta, T.C. Ray, Dr.
Shankar Ghose, N.K. Poddar, Rajesh Srivastava, Ujjawal Banerjee, P.
Basu, H.K. Puri, M.C. Dhingra, Ms. Laxmi Arvind, Sanjay Bansal, G.K. H
26 SUPREME COURT REPORTS (1997) SUPP. 2 S.C.R.

A Bansal, Arvind Kumar, Ms. Radha Rangaswamy and Ms. Zoya Hadke for
the appearing parties.

The Judgment of the Court wad delivered by

D.P. WADHWA, J. Special leave granted.
B
These appeals are directed against the judgment dated 27/29 March,
1996 of the Division Bench of the Calcutta High Court setting aside the
requisition and subsequent acquisition of the certain piece of land under
the provisions of the West Bengal Land (Requisition and Acquisition) Act,
C 1948 (for short 'the Act') as amended from time to time. The impugned
judgment proceeded on the basis (1) that there was no proper service of
notice as required under Section 3 of the Act and that (2) there was no
public purpose in requisitioning •he land.

Subject matter of the land comprise in plot Nos. 444, 445 and 446
D under Khatian Nos. 343, 256 and 135 respectively in all measuring 1.82
acres in Monza Mandalganthi within the limits of Rajarhat Police Station.
Rajarhat Municipality in the district of 24 Parganas (North), West Bengal.
This land belonged to one Chandra Kala Parasrampuria and Ranjana
Kaushal and was recorded in their names in the revenue Record of Rights.
Respondents 1 and 6 to 18 (for short the 'writ petitioners') purchased this
E land in the year 1988 and on or about February 15, 1990 they applied for
mutation of the land in their names. Even after purchase of the land they
had paid rent of the land in the name of Chandra Kala Parasrampuria and
others, the original owners and were granted receipts in the names of the
original owners. It is stated that it was on September 7, 1995 that a
certificate of mutation had been issued by the prescribed authority under
F Section 50 of the West Bengal Land Reforms Act in favour of the writ
petitioners. Their names also appeared in the revised settlement records
whereafter they paid rent. We are mentioning this fact as it was contended
that the application of the writ petitioners for mutation was ultimately
allowed. The writ petition in the High Court itself came to be filed on
G March 27, 1995.
Before we examine as to how the land came to be requisitioned and (
then acquired under provisions of the Act, we may set out the relevant
provisions of law. Sections 3 and 4 of the Act read as under :

H "Power to requisition : (1) If the State Government is of the opinion
WEST BENGAL HOUSING BOARD 11. B.P.GUPTA[D.P. WADHWA,J.] 27

that it is necessary so to do for maintaining supplies and services A
essential to the life of the community (or for increasing employ-
ment opportunities for the people by establishing commercial
estates and industrial estates in different areas) or for providing
proper facilities for transport, communication, irrigation or
drainage, or for the creation of better living conditions in rural or B
urban areas, not being an industrial or other areas excluded by the
State Government by a notification in this behalf, by the construc-
tion or re-construction of dwelling places in such areas (or for
purposes connected therewith or incidental thereto), the State
Government may, by order in writing, requisition any land and may
make such further orders as appear to it to be necessary or C
expedient in connection with the requisitioning :

Provided that no land used for purpose or religious worship
or used by an educational or charitable institution shall be
requisitioned under this section.
D
(lA) A Collector of a district, (an Additional District Magistrate
or the First Land Acquisition Collector, Calcutta) when authorised
by the State Government in this behalf, may exercise within his
jurisdiction the powers conferred by sub-section (1),
E
(2) An order under sub-section (1) shall be served in the
prescribed manner on the owner of the land and where the order
relates to land in occupation (of an occupier, not being the owner
of the land, also on such occupied),

(3) If any person fails to comply with an order made under F
·sub-section (1) the Collector or any person authorised by him in
writing in this behalf shall execute the order in such manner as he
considers expedient and may, -

(a) if he is a Magistrate, enforce the delivery of possession of G
the land in respect of which the order has been made to himself,
or

(b) if he is not a magistrate, apply to a Magistrate or, in Calcutta
as defined in clause (11) of section 5 of the Calcutta Municipal
Act, 1951, to the Commissioner of Police, and such Magistrate or H
28 SUPREME COURT REPORTS [1997] SUPP. 2 S.C.R.

A Commissioner, as the case may be, shall enforce the delivery of
possession of such land to him."
<
"4. Acquisition of land - (1) Where any land has been requisi-
tioned under Section 3, the State Government may use or deal with
such land for any of the purposes referred to in sub- section (1)
B of Section 3 as may appear to it to be expedient.

(la) The State Government may acquire any land requisitioned
under Section 3 by publishing a notice in the Official Gazette that
such land is required for a public purpose referred to in sub-sec-
tion (1) of Section 3.
c
(2) Where a notice as aforesaid is published in the Official
Gazette, the requisitioned land shall, on and from the beginning
of the day on which the notice is so published, vest absolutely in
the (State) Government free from all incumbrances and the period
D of requisition of such land shall end."

Rule 3 of the West Bengal Land (Requisition & Acquisition) Rules, 1948
deals with manner of service of orders and is as under :

"3. Manner of Service of Orders - An order under sub-section
E (1) of section 3 shall be served on the owner of the land and where
the order relates to land in occupation of an occupier not being
the owner of the land, also on such occupier.

(a) by delivering or tendering a copy thereof, endorsed either by (
the person authorised by the Act to make the order cir by the
F Collector, to the person on whom the order is to be served or his
agent, or

(b) by fixing a copy thereof on the outer door of some con-
spicuous part of the house in which the person on whom the order
G is to be served ordinarily resides or carries on business or per-
sonally works for gain, or

(c) by sending the same to the person on whom the order is to
be served by registered post with acknowledgment due, or

H (d) by fixing a copy thereof in some conspicuous part of the
WEST BENGAL HOUSING BOARD v. B.P.GUPTA[D.P. WADHWA,J.] 29

- land to which the order relates and also in some conspicuous place
of the office of the Collector."

When the writ petition was filed a learned single Judge of the High
Court directed maintenance of status quo. By subsequent order it appears
A

the interim order in terms or prayer (d) of the writ petition was passed. B
An appeal was filed against that order before the Division Bench which
directed that "construction in question need not be stopped and may be
proceeded with subject to the decision of this application without prejudice
to the rights and contentions of the parties in this application". When again
matter was placed before the Division Bench, counsel for the parties
agreed that keeping in view the urgency of the matter the entire writ C
applications be heard. As noted above, these writ petitions were allowed
by the Division Bench by the judgment dated 27/29th March, 1996. Im-
pugned notice requisitioning the land was quashed and direction was
issued to the State authorities to hand over vacant possession of the land
to the writ petitioners. West Bengal Housing Board, State of West Bengal D
and others and Bengal Peerless Housing Development Company Ltd. have
filed separate appeals before this Court.

Admittedly names of the writ petitioners were not recorded in the
Record of Rights by the prescribed authority under Section 50 of the WB
Land Reforms Act though the purchase of the Land was made by the E
petitioners in 1988. They had applied for mutation of the land in their
names on February 15, 1990 and certificate of mutation was granted by
the pres¢ribed authority on September 7, 1995 much after when the land
had been acquired under Section 4 of the Act. However, the Division
Bench in the impugned judgment held that even though the names of the F
writ petitioners had not been recorded in the Record of Rights, they were
nevertheless entitled to notice under Section 3(2) of the Act, as by virtue
of their purchasing the land from the original owners they were owners of
the land and thus entitled to notice. It was observed that the expression
"owner" occurring in the said section must be given the meaning in which G
it is understood in common parlance and that there was no warrant for
importing the provisions of the WB Land Reforms Act in construing the
said expression. The Division Bench also observed that it was incumbent
upon the authorities to make enquiries in order to ascertain who were the
owners and that the authorities must be deemed to have constructive notice
of the ownership of land by the writ petitioners by reason of registration H
30 SUPREME COURT REPORTS (1997) SUPP. 2 S.C.R.

A of their respective sale deeds. It was thus held that non-servic..; of such
notice on the writ petitioners rendered the whole requisition order bad in
law. The Division Bench further held that the purpose for which the
requisition had been made, was not a public purpose within the meaning
of the Act and that the circumstances of the case did not justify the
B invocation of the provisions of the Act which was intended for a special
purpose and the exercise by the authorities of the powers under the Act
was in fact a colourable exercise of power. The Bench further held that the
Act did not even provide for the application of the principles of natural
justice and its provisions being of drastic measure, had to be strictly
complied which the authorities failed to do so.
c
The principal question that arises for consideration is if it were the
writ petitioners who were entitled to notice under Section 3(2) of the Act
or that this provision stood complied by serving notice on the recorded
owners of land in the Record of Rights maintained under Section 50 of
D the WB Land Reforms Act, we are of the view that the provisions of service
of notice stood complied when notices were served on the persons
recorded as owners in the Record of Rights. Record of Rights is a statutory
document maintained by the prescribed authority under Section 50 of the
Act and it is a notice to the public at large as to who are the owners of the
land in the records of the authorities. That would be the reason as to why
E writ petitioners themselves applied for mutation of the lands in their names
in the year 1990 when in fact they had purchased the same in 1988. Under
Section 3 of the West Bengal Land Reforms Act, 1955, the Act overrides
other laws if there is anything inconsistent with what is stated in the Act.
Section 50 of the Act provides for maintenance of the record-of-rights by
the prescribed authority by incorporating therein the changes on account
F of mutation of names as a result of transfer or inheritance or partition,
exchange etc. Under sub-section (9) of Section 51A every entry in the
record-of-rights shall be presumed to be correct, until it is proved that the
entry in the record-of-right is incorrect, proceedings for that, however, will
have to be initiated under the Act itself. Otherwise there is every presump-
G tion about the correctness of the record-of-rights. As noted above mutation
was effected in September, 1995. The Division Bench has observed that the
Collector would have been aware of the pendency of the applications of
the writ petitioners for mutation of lands in their names when the same
were pending in his office. The Bench in effect observed that it was a case
where the right hand did not know what the left hand was doing. This
H observation sounds good, but knowing the working of the Government
WESTBENGALHOUSINGBOARD v. B.P.GUPTA[D.P.WADHWA,J.] 31

offices it appears to have no place. Of course, the Collector could have A
asked for a report from the prescribed authority concerned if any applica-
tion for mutation of the land was pending with him. But that would be
expecting too much from the Collector. It is no part of the duty of the
Collector to make a roving inquiry into ownership of the persons. We are
of the opinion the requirements of the law were met when notices were
served upon the recorded owners as per Record of Rights. Again we do B

- not think in a case like the present one, it is for the Collector to make
enquiries from registration office to find out if the land had since been sold
by the recorded owners. In Winky Dilawari (Smt.) and Another v. Amritsar
Improvement Tntst, Amritsar, (1996) 11 SCC 644 (infra) this Court observed
that the public authorities were not expected to go on making enquiries in C
the Sub-Registrar's office as to who would be the owner of the property.
The Collector in the present case was thus justified in relying on the official
record being the Record of Rights as to who were owners of the land
sought to be requisitioned and prudence did not require any further
enquiry to be made. We are therefore of the view that notices were
properly served under Section 3(2) of the Act on the owners of the land. D

Before we further examine the rival contentions, we may have a look
as to how the land was requisitioned on April 2, 1992, acquired on July 22,
1994, transferred to the Housing Board on December 8, 1994 and finally
placed at the disposal of the Bengal Peerless Development Company Ltd.
If we refer to the object of the Act, it will be seen that it was enacted to E
provide for requisition and speedy acquisition of land for certain purposes.
It says :

"Whereas it is expedient to provide for the requisition and
speedy acquisition of land for purposes of maintaining supplies F
and services essential to the life of the community, increasing
employment opportunities for the people by establishing commer-
cial estates and industrial estates in different areas, providing
proper facilities for transport, communication, irrigation or
drainage and creating better living conditions in urban or rural G
areas by the construction or reconstruction of dwelling places in
such areas or for purposes connected therewith and incidental
thereto :"

With reference to the object \vith which the Act was enacted we may now
refer to the order under Section 3(1) of the Act requisitioning the land. H
32 SUPREM:E COURT REPORTS [1997] SUPP. 2 S.C.R.

A This can be extracted from that order and it is as under :

"Whereas in my opinion it is necessary for the purpose of
construction of Housing Complex by Housing Development Govt.
ofWB (Reg. branch) maintaining by supplies and services essential
to the life of the community providing proper facilities for
B transport/communication/irrigation/drainage, viz. for the purpose
of better living condition in rural or urban areas by construction
or reconstruction of dwelling places to requisition the land( s)
described in the schedule below/overleaf."

C We may also note that the Act was a temporary measure and its
validity had been extended from time to time. The Amending Act, 1994
came into force on March 31, 1994, by which the validity of the Act was
extended till March 31, 1997 but the power of requisition of land under
Section 3 of the Act had been omitted with effect from April 1, 1994. It
D was however provided that such omission would not affect the previous
operation of the said section or anything duly done thereunder and any
reference to the said section in any other provisions of the principal Act
should be construed as if the said section had not been omitted. The Act
'
was further amended on October 8, 1996 by providing certain procedure
for awarding compensation etc. In any event these two amendments would
E have no application in the present case inasmuch as the notice of
requisition under section 3( 1) of the Act was issued on April 2, 1992 and
gazette notification for requisition of the land was published on July 22,
1994.

F It is submitted that the West Bengal Housing Board Act (for short
'the Housing Board Act') was enacted on October 13, 1972 with a view to
solve the acute problem of shortage of housing, which called for greater
and quicker attention. Mr. Gupta, learned senior counsel appearing for the
Housing Board submitted that it had not been possible for the State to
make the desired expeditious progress in regard to the construction of
G houses because of inadequate resources and also because of the prevailing
rules and procedures which was a time consuming process. He said the
Housing Board was in a better position to undertake housing and allied
projects on a much larger scale and would be able to secure adequate funds
by raising market loans or by obtaining institutional finance, which a
H Government Department could not do.
WEST BENGAL HOUSING BOARD v. B.P.GUPTA[D.P. WADHWA,J.) 33

Again it would appear the Housing Board was also unable to meet A
the challenge of constructing more houses to alleviate the sufferings of the
people both in urban and rural areas. In 1993 the West Bengal Housing
Board Act was amended and the concept of joint venture with ,private
sector was brought in. It will be instructive to refer to the Statement of
Object and Reasons which led to introduction of the West Bengal Housing B
Board (Amend~ent) Bill, 1993. It is as under :

"1. It has been under the consideration of the State Government
for some time past to embark on joint venture to promote housing
activities on a large scale for different categories of people having
different quantums of income and particularly for Low Income C
Group and Middle Income Group people and to develop lands
for distribution to the general public for the purpose of building
dwelling houses thereon. To tackle the problem of homelessness
even in a modest way, it is, however, necessary to build at least
50,000 dwelling units in urban areas during the next five years. The D
Housing Department and that West Bengal Housing Board are,
of course, doing their best within the existing framework to make
the optimum utilization of their organisational capacity to build
the dwelling units as aforesaid. But the dimension of the problem
is so large that it is not possible for the Housing Department and
the West Bengal Housing Board to achieve the target on their own. E

2. Jn! the circumstances as stated above and after a careful con-
sideration of the matter, it has been decided to constitute, in the
public interest, joint sector company or companies for being
entrusted with housing scheme for expeditious execution.
F
3. It has also been decided that the dues of the West Bengal Housing
Board from any individual, firm, company or association or body
of individuals, whether incorporated or not, should be recovered
as an arrears of land revenue in the manner provided in the Bengal
Public Demands Recovery Act, 1913 (Ben. Act III of 1913). G
4. The Bill has been framed with the above objects in view."

Under sub-section (12A) of Section 2 of the Amending Act "new
joint sector company" means a joint sector company formed and registered
on or after the date of coming into force of the Amending Act, 1993. Under H
34 SUPREME COURT REPORTS [1997] SUPP. 2 S.C.R.

A Section 27A power has been conferred on the Housing Board constituted ./
under the Act to entrust existing or new joint sector company with housing
schemes. This section 27A is as under :

"27A. Power to entrust existing, or new, joint sector company with
housing scheme. - Notwithstanding anything contained in this Act,
B the Board may, if it considers it necessary so to do in the public
interest and is satisfied that an existing, or new, joint sector
company is willing to 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
c existing, or new, joint sector company with any housing scheme for
execution, and different existing, or new, joint sector companies
may be so entrusted with different housing schemes for execution."

It may be noted that under the Housing Board Act, Housing Board (or
D Board) has been constituted which is a body corporate having perpetual
succession and a common seal and may sue and be sued in the corporate
name and shall be competent to acquire and hold property both movable
and immovable, enter into contract and do all things necessary for the
purposes of this Act. Under Section 17 of the Housing Board Act powers
and duties of Board to undertake housing schemes have been prescribed.
E Section 17, in so far as it is relevant, is as under :

"17. Powers and duties of Board to undertake housing schemes.
(1) Subject to the provisions of this Act, the Board may, from time
to time, incur expenditure and undertake works for the framing
F and execution of such housing schemes as it may consider neces-
sary and such housing schemes may include housing schemes in
relation to lands and buildings vested in or in the possession of
the State Government.

(2) The State Government may, on such terms and conditions
G as it may think fit to impose entrust to the Board the framing and
execution of whether provided for by this Act or not and the Board
shall thereupon undertake the framing and execution of such
scheme."

H Section 18 specifies the matters which a housing scheme may provide.
WESTBENGALHOUSINGBOARD v. B.P.GUPTA[D.P.WADHWA,J.] 35

-- ~- On September 13, 1993 a Memorandum of Understanding was A
drawn up between the Housing Board and the Peerless General Finance
& Investment Co. Ltd., a public limited company under the Companies
Act, 1956 to promote a joint sector company and in accordance thereto
the Bengal Peerless Housing Development Company Limited was incor-
porated as the existing joint sector company with 49.5% share-holding by B
each of the Housing Board and the Peerless General Finance & Investment
Co. Ltd. and one per cent by the State of West Bengal.

By the order and notification dated July 22, 1994 made under Section
4 of the Act, the State Government acquired the aforesaid 1.82 acres of
land for construction of housing complex. The notification was duly pub- C
lished in the official gazette and on and from the said date, the lands vested
absolutely in the State Government under sub-section (2) of Section 4 of
the Act. By a subsequent notification dated December 8, 1994 made under
Section 29(1) of the Housing Board Act the State Government transferred
11 acres of land which included land measuring 1.82 acres, subject matter D
of the present proceedings, to the Housing Board. Under Section 29(1) of
the Housing Board Act, the State Government is empowered to transfer
to the Housing Board all such assets and liabilities of the State Government
as it may decide so to do which stand vested and transferred to the Housing
Board. On March 29, 1995 formal permissive possession of 11 acres of land
which had now included 1.82 acres of the land in question was handed over E
to the new joint sector company, i.e., the Bengal Peerless Housing
Development Company Limited by the Housing Board· to undertake con-
struction of the housing project with effect from April 3, 1995. As a matter
of fact the foundation stone for this housing project which was named as
"Anupama" was laid by the Chief Minister of the Government of West F
Bengal on January 1, 1995. The housing project was to be executed on 17
acres of land which included 11 acres of land aforementioned. It is stated
that necessary work for the purpose of housing project in fact started on
the land by the Bengal Peerless Housing Development Company Ltd. on
January 10, 1995.
G
Mr. V.R. Reddy the learned Additional Solicitor General who ap-
peared for the State of West Bengal submitted that the State Government
acquired a total area of 29.23 acres of land for the purpose of creating
better living conditions in rural and urban areas by construction or
reconstruction of dwelling units for the community. The land vested in the H
36 SUPREME COURT REPORTS (1997) SUPP. 2 S.C.R.

A State Government under Section 4 of the Act. He said 10.35 acres of land
out of the land so acquired was released at the request of the Ministry of
Urban Development, Government of India for the purpose of construction
Housing Project for Central Government Employees Welfare Organisa-
tion. Out of remaining 18.88 acres of land, 11 acres of land, which included
1.82 acres of land subject matter of these proceedings, were handed over
B to the Housing Board by different notifications under Section 29 of the
Housing Board Act on certain terms and conditions relevant of which
would be : (1) the land hereby transferred shall be utilised by the Housing
Board solely for the purpose of houses (2) the Housing Board shall take
all steps expeditiously for sale of all houses/flats proposed to be built
C together with the common areas and facilities comprised on the area of
land so transferred to eligible persons either by out-right sale or on
hire-purchase·basis at a price considered by the Housing Board as fair and
reasonable.

In supplementary affidavit filed by the Joint Secretary, Housing
D Board, Government of West Bengal, it has been stated as under:

"1. The State Government duly held negotiations and discussions
with different private sector companies which submitted applica-
tions to the Government for formation of joint sector companies
E in collaboration with the West Bengal Housing Board. On 3.9.93
State Government selected 4 private companies who were willing
to form joint sector companies in collaboration with West Bengal
Housing Board and out of the said 4 private companies, the
Committee appointed for the said purpose by the State Govern-
F ment selected two companies one of them being Peerless General
Finance and Investment Co. Ltd. and such selection was duly
approved by the State Government.

II. The joint sector company namely Bengal Peerless Housing Dev.
Co. Ltd. is run by an independent Board of Directors. The Board
G of Directors consist of 7 (seven) Directors out of which 4 (four)
Directors (two of them are Ex-Secretaries, Housing Department,
Govt. of West Bengal and other two are Ex-Commissioners of
Housing Board, who are still the Board members of West Bengal
Housing Board) are nominated by the State Government. The
H Chairman of the joint sector company is nominated by the State
WEST BENGAL HOUSING BOARD v. B.P. GUPTA(D.P. WADHWA,J.] 37

- "-
Government and thereby the State Government nominees are in
the majority in the Board.
A

III. The said joint sector company has the overall responsibility for
the construction and implementation of the housing project which
shall be within the policy frame work of the Govt. of West Bengal. B
The housing scheme shall be prepared and executed as defined in
the West Bengal Housing Board Act. The implementation of the
project, marketing and sale of the dwelling units will be done by
the joint sector company under the guidance and control of State
of West Bengal/Housing Board. The same shall be implemented
if and when required by the Govt. of West Bengal and Housing C
Board. Therefore, a joint sector company has been constituted in
the name of Bengal Peerless Housing Development Company
Limited, strictly to give effect to the Government policy on serving
the public interest of providing dwelling units to people under
schemes to be formulated and implemented under the policy frame D
work of the State Government. As contemplated by Government
of West Bengal such schemes however have to be implemented
under the overall guidance and control of the West Bengal Housing
Board.

IV. The State Government/West Bengal Housing Board will have E
the majority in the Board of Directors of the Company. No ac-
tivities can be carried on by the joint sector company without the
approval of the Government and without the consent of the
.> Government nominee Directors. The whole purpose of the joint
sector company is clearly for effectuating the public interest of p
providing dwelling accommodation for the homeless people. As
already indicated, the substantial number of dwelling units in the
project are for the Lower Income Group and Middle Income
Group. However, to provide subsidised housing to the Lower and
Middle income groups the joint sector company, has adopted a

-
suitable mix of housing of various groups viz., LIG, MIG and HIG G
so as to make the project economically viable.

The whole policy with which the joint sector company, the
Bengal Peerless Housing Development Company Limited, has
been functioning and has intended to function is not to make mor~ H
38 SUPREME COURT REPORTS [1997) SUPP. 2 S.C.R.

A than nominal profit.

V. LIG and MIG dwelling units constitute 73% of the total units
that are proposed to be constructed apart from the additional land
mentioned above which shows that the preponderant object of the
scheme is to provide accommodation to people belonging to the
B Lower Income and Middle Income Groups at very reasonable rates
and such rates are only possible because of gross subsidy by sale
of the units of HIG which constitutes only 27% of the total project.

VI. It is submitted respectfully that the housing scheme which is
now being implemented is predominantly and wholly for the
c benefit of the common people and pre-eminently for public pur- •
pose.

VII. From the facts, it will thus clearly appear that the land for
which the project is being constructed belongs to West Bengal
Housing Board and the joint sector company have been entrusted
D only to implement the housing project of the Govt. of West Bengal
and such work is being done as per the scheme framed under the
West Bengal Housing Board Act approved by the West Bengal
Housing Board and. under the overall guidance and control of the
State Government/Housing Board. Funds for the construction have
E been provided for by Peerless General Finance and Investment
Company Limited to the joint sector company and also recovered
advances from the prospective allottees by dwelling units. The only
financial contribution of the Government through Housing Board
is to the acquisition of equity shares of the joint sector company
to the extent of Rs. 10.0 lacs."
F
The supplementary affidavit aforesaid also sets out the scheme of the
Housing Project and also the considerations which are taken into account
while framing the scheme. These may also be set out as under :

"SCHEME OF THE HOUSING PROJECT
G
I. The types of flats and the sale prices thereof have also been
settled and or fixed by the West Bengal Housing Board and the
terms of sale provide that escalation of sale price of the flat will
not be allowed, even if there are additional expenditure as there
H in fact has been. The project will comprise of 912 flats for the
WEST BENGAL HOUSING BOARD v. B.P. GUPTA(D.P. WADHWA,J.] 39

people of different income groups. A
·\._

II. The eligibility criteria for allotment of flats to public in general
has also been stipulated and or specified by the West Bengal
Housing Board. The terms and conditions as such are as
follows :
B
(a) One member of the same family which includes hus-
band/wife, dependent parents and dependent children can submit
one application only (b) one dwelling unit will be allotted to one
person ·of the family and (c) those persons who do not have any
house/flat/building plots of land in Calcutta Metropolitan area are c
only eligible to apply for allotment of flat.

III. Procedure for allotment of flats to the public in general has
also been guided by the West Bengal Housing Board. Application
for allotment of flats was invited from the public after wide pub-
lication in the newspaper. About 4353 nos. of applications were D
received against 912 flats and thereafter a lottery was held in a
public place under the guidance and supervision of West Bengal
Housing Board where Sri. KN. Sinha, Minister of State, Sri s·ailen

... Manna (Padmashree) alongwith the applicants were present to
witness the lottery. Only those persons who were successful in the E
lottery were allotted their respective flats. As a matter of fact, the
mode of allotment of flats was entirely based upon the lottery and
neither the Housing Board nor the State Government nor the joint
venture company had any role to play in the matter of allotment
of flats according to their choice.
F
IV. In the said Housing complex, as has been directed by the West
Bengal Housing Board, the joint sector company will have to install
sewage treatment plant and 33 KV electrical sub- section with the
technical help of the West Bengal State Electricity Board.
G
SCHEME WAS FRAMED TAKING INTO CONSIDERATION
THE FOLLOWING ASPECTS

1. At least 50% of the dwelling units are to be planned for the
Low & Middle Income Group of people of the society who are
not in a position to purpose any dwelling unit within the urban H
40 SUPREME COURT REPORTS (1997) SUPP. 2 S.C.R.

A area of Calcutta from any other source because of high price of
such flats which are beyond the reach of common people. Accord- ,[

ingly, sale price of the flats for the LIG & MIG dwelling units were
fixed at a rate as low as Rs. 349 .00 and Rs. 509 .00 per s.ft and
market study reveals that in no other metropolis, even in Calcutta,
flats are provided at this rate when market price of building
B materials have gone high· beyond expectation. In this scheme 73%
of such units are planned for this section of society.

Il. No price escalation shall be charged and flats are to be
t
handed over at a fixed price and within the scheduled date.
c III. The prices of the flats are on the plinth area as per National
Building Code and not on Super built-up area. l·

IV. The construction work started in January, 1995 and sub-
stantial progress has been made so that all the flats can be handed
D over to the respective allottees on or before 1998 as promised.

It is respectfully submitted that any scheme to solve the housing
problem would promote a public purpose. Such a scheme need
not be undertaken by the State directly but may well be imple-
mented under the supervision, control and guidance of the State.
E Such purpose may be achieved also through a joint sector com-
pany. It is becoming increasingly necessary to induce private
enterprise to co-operate with the State Government in particular
sector of the economy for providing relief as early as possible. In
the context of Act II of 1948, the Hon'ble High Court at Calcutta
F has uniformly taken this view that the State can invoke the
provision of the Act II of 1948 where the State required to deal
with any of the purposes covered under the said Act through some
other agency including a Company."

It was submitted that any scheme to solve the housing problem would
a
G promote public purpose and that such a scheme need not be undertaken
by the State directly but may well be implemented under the supervision,
control and guidance of the State and that such a purpose may be achieved
also through a joint sector company. Mr. Reddy submitted that it was
becoming increasingly necessary to induce private enterprise to cooperate
H with the State Government in particular sector of the economy for provid-
WEST BENGAL HOUSING BOARD v. B.P.GUPTA[D.P. WADHWA,J.] 41

ing relief as early as possible. A
-,
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 case did not justify the invocation of the provisions of
the act or that the exercise of powers under that Act was a colourable B
exercise of power.

At this stage we may also notice some of the judgments cited at the
bar.

In Sureshchandra C. Mehta v. State of Kamataka and Others, [1994)
c
Supp. 2 SCC 511 Section 17(5) of the Bangalore Development Authority
Act, 1976 was considered which provided that every person whose name
appeared in the assessment list of the local authority or land revenue
record shall be served with a .notice so that he could make necessary
objections to the notification published under sub-section (1) of Section 17 D
of that Act. Sub-section (5) of Section 17 provided as under :

"During the thirty days next following the day on which such
notification is published in the Official Gazette the Authority shall
:::::::,. serve a notice on every person whose name appears in the assess-
ment list of the local authority or in the land revenue register as
E
being primarily liable to pay the property tax or land revenue
assessment on any building or land which is proposed to be
acquired in executing the scheme or in regard to which the
authority proposes to recover betterment tax requiring such person
to show cause within thirty days from the date of the receipt of F
the notice why such acquisition of the building or land and the
recovery of betterment tax should not be made."

~,~
The objection of the appellant in that case was that since his name was
entered in the revenue record he had a right to the notice. It appeared
when notice under sub-section (1) of Section 17 was issued the name of G
the appellant was not found entered in the assessment list of the local
auth9rity or in the land revenue register making him primarily responsible
to pay land revenue. The Court observed that existence of the name of such
person in the concerned record before publication of the notification under
Section 17(1) was a condition precedent and the authority was not required H
42 SUPREME COURT REPORTS [1997] SUPP. 2 S.C.R.

A to make a roving inquiry as to who is the person entitled to a notice. The
Court agreed with the judgment of the Karnataka High Court rejecting the
contention of the appellant that the authority had requisite knowledge as
to who was the owner of the property in question and it held that sub-sec-
tion (5) of Section 17 made it clear that notice was required to be served
on the person whose name was found in the revenue register and who was
B primarily responsible for the payment of the land revenue. The High Court
had also held that the knowledge of the authority by any other process
could not be treated as making it responsible for serving notice in terms
of sub-section (5) of Section 17 and that the knowledge of ownership or
interest in collateral proceedings was not the deciding criteria. The Court
c
C had held that one who was responsible for the payment of land revenue or
property tax would alone be entitled to the notice under Section 17(5) of
the Act. The Calcutta High Court in the impugned judgment distinguished
this judgment of the Supreme Court in Sureshchandra C. Melita's case on
the ground that in that case the law itself prescribed notice to be served
D on a person whose name was entered in the revenue record. But the
observations of the Supreme Court in that case that "the authority is not
required to make a roving inquiry as to who is the person entitled to a
notice" is quite apt and has to be given due weight and consideration.,

In Wink)1 Dilawmi (Smt.) and Another v. Anuitsar Improvement Trnst,
E A1111itsm; [1996] 11 SCC 644 Section 38 of the Punjab Town Improvement
Act, 1922 envisaged issue of notice of proposed acquisition of land. The
section is as under :

"38. Notice of proposed acquisition of land. - (1) During the
thirty days next following the first day on which any notice is
[
F
published under Section 36 in respect of any scheme under this
Act the trust shall serve a notice on -

(i) every person whom the trust has reason to believe after due
enquiry to be the owner of any immovable property which it is
G proposed to acquire in executing the scheme.

(ii) the occupier (who need not be named) of such premises is
the trust proposes to acquire in executing the Scheme.

H (2) Such notice shall -
WEST BENGAL HOUSING BOARD v. B.P. GUPTA [D.P. WADHWA,J.] 43

(a) state that the trust proposes to acquire such property for A
the purposes of carrying out a scheme under this Act. and

(b) require such person, if he objects to such acquisition, to
state his reasons in writing within a period of sixty days from the
service of the notice.
B
(3) Every such notice shall be signed by, or by the order of the
chairman."

In that case the disputed property was a vacant site and the appellant had
purchased the same on January 24, 1985. Amritsar Improvement Trust had C
framed a scheme under Section 36 of the Act which was given due publicity
and objections invited. Thereafter proceedings were taken up for acquisi-
tion of the land proposed to be acquired under the scheme. The scheme
was approved by the Government on March 19, 1985. After the purchase
was made by the appellant his name was not mutated in the records of the
Municipality and the question before the Supreme Court was whether the D
failure to serve the notice on the appellant vitiated the approved scheme.
Facts are not quite clear from the judgment as to whom notice had been
served but one can safely assume that it had been served on the person
- who was the erstwhile owner of the property before it was purchased by
the appellant. The Court held that in these circumstances failure to serve E
notice on the appellant did not vitiate the approved scheme. The Court
also observed that the principle that the registration of sale was construc-
tive notice had no application to such a situation. The court on the
argument of the appellant that registration of a document in the Office of
the Sub-Registrar was a notice as envisaged under the Registration Act, p
1908 observed as under :

"But the question is whether the public authorities are expected
to go on making enquiries in the Sub-Registrar's office as to who
would be the owner of the property? Reasonable belief, after due
enquiry, contemplated under Section 38(1)(i) would envisage that G
the persons who are reputed to be known as owners of the
immovable property which was proposed to be acquired after the
Scheme was approved by the Government, are the actual owners
of the property. It is now settled law that public functions are to
be discharged through its officers and if there is dereliction on H
44 SUPREME COURT REPORTS [1997] SUPP. 2 S.C.R.

A their part in the performance thereof and the public inconvenience
is enormous, the Court always considers the procedure to be
directory. It has always considered, by a catena of decisions of this
Court, such a procedure to be directory. If it were a case where a
reputed owner whose name has already been entered in the
municipal records and has paid the municipal taxes over a period
B
to the Municipality or the Gram Panchayat, as the case may be,
necessarily there would be scope for the authorities to reasonably
believe, after due enquiry, that he would be the owner. If they
derelict in making such enquiry or serving the notice, necessarily
it may be held that its failure to get the notice served on the owner,
c who was believed to be the owner of the property, for the proposed
acquisition, vitiates the acquisition made under the Schedule read
with Section 59 of the Act. But if in a short interregnum there were
successive sales and transfer of the land, the public authorities are
not expected to go on making enquiries in the Sub-Registrar's
D office as to who would be the owner of the immovable property
proposed to be acquired. The principle that registration is con-
structive notice has no application to 5Uch a situation."

Constitutional validity of the West Bengal Land (Requisition and
E Acquisition) Act, 1948 was upheld by the Supreme Court in S.M. Nandy &
Ors. v. State of West Bengal and Ors., [1971] 3 SCR 791. The Court held as
under:

"We are, therefore, of the opinion that it is difficult to hold that
restrictions imposed by the impugned Act are unreasonable. Fair
F compensation has been provided for requisitioning, which is, deter-
minable by a Civil Court and ultimately by the High Court or the
Supreme Court. Regarding the necessity for requisitioning it must
necessarily be left to the State Government. It is true that there is
no express provision to make a representation against an order of
G requisition but there is no bar to a representation being made after
an order is served under s. 3(2) of the Act."

In H.D. Vora v. State of Maharashtra and Others., AIR (1984) SC 866
relying on the earlier judgment of the Court in State of Bombay v. Bhanji
H Munji, [1955) 1 SCR 777: AIR (1955) SC 41 which was a case under the
•
WEST BENGAL HOUSING BOARD v. B.P.GUPTA[D.P. WADHWA,J.) 45

--... Bombay Land Requisition Act, 1948, the Court observed that it was not A
necessary that the order of requisition must explicitly set out the public
purpose for which it was made and that the only requirement of the law
was that the requisitioning must be made for a public purpose and that so
long as there was a public purpose for which an order of requisition was
made, it· would be valid, irrespective of whether such public purpose was B
recited in the order of requisition or not. But then the State Government
has to show that the order of requisition was made for a public purpose
and that necessary facts showing the public purpose for which the order of
requisition was made would have to be established by the State Govern-
ment from its record to the satisfaction of the Court. In that case the Court
held that the order was not made for public purpose and further that the C
requisition could not be for an indefmite period. The Court was of the
view that the order of requisition even though valid ·ceased to be valid and
effective after the expiration of the reasonable period of time but at the
same time the Court observed that it was not necessary for it to decide
what period of time might be regarded as reasonable for the continuance D
of an order of requisition in a given case because ultimately the answer to
that question must depend on the facts and circumstances of each case.
This judgment in our view is of no help to decide the issue now raised

- before us.

It is a matter of common knowledge that there is acute shortage of E
, housing accommodation both in rural and urban areas of the country. Since
late the prices of the real estate have sky-rocketed making it beyond the
reach of low income and middle income people. State has a duty to
perform to give shelter to homeless people specially to people in the low
income group. In the present case State was unable to meet this gigantic F
task. In the background of shortage of resources which the State has the
legislature 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 Housing Board was unable to
meet the challenge. Housing Board Act was amended to bring in the G
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 joint venture
had gone into and how the Board of Directors of the joint sector
company had been constituted and how the State and Housing Board
exercise control over this joint sector enterprise. H
..
46 SUPREME COURT REPORTS (1997) SUPP. 2 S.C.R.

A Simply because there is an element of profit could not make the
whole scheme illegal. A private entrepreneur will certainly look to some .
profit but to see that the profit motive does not lead to exploitation even
of the rich and that the houses are available to the poor people and to
middle class people at nominal or affordable prices, or even on no profit
B 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 be never able to acquire a house.

What has been done in the present case is that the profit earned on
C sale of flats of HIG have been pumped into to subsidise 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 public purpose is
not being served in the present case.

D 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

E
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.

In the present case Directors appointed by the Housing Board/State
-
on the Board of Directors of the Joint Venture Company would certainly
see that no run away profit is earned and that sale price of HIG houses is
guided by market forces but there is no exploitation. Every section of the
F society needs protection from exploitation. It is however not possible nor
desirable to lay down any principle as to how this to be done in a particular
case.

In Reg. v. Hillingdon L.B.C., Exp. Puhlhofer (H.L. (E.), (1986) 1 AC
484 the court was considering the power of the housing authority con-
G stituted under the Housing (Homeless Persons) Act 1977 in refusing an
application that the applicants were neither homeless nor threatened with
homelessness. The applicants, a married couple, lived with two young
children in one room at a guest house where no cooking or laundry
facilities were available in the premises and no meals except breakfasts
H were provided. Subsequently the housing authority reconsidered the ap-
WEST BENGAL HOUSING BOARD v. B.P.GUPTA[D.P. WADHWA,J.) 47

plication, but having taken into account the housing conditions prevailing A
in their area, they confirmed their original decision. The applicants applied
for judicial review of the housing authority's decision. Hodgson, J. granted
the relief, holding that the accommodation to be available for a person and
his family had to be appropriate to the needs of the family and that no
reasonable housing authority c~iild have come to the conclusion that the B
accommodation in question was appropriate. On appeal to the Court of
Appeal by the housing authority the same was allowed. Further appeal by
the applicants to the House of Lords was dismissed. The following obser-
vations of Lord Brightman who spoke for the Court would be relevant:

"In the instant case, the bona fides of the borough is not in dispute. C
On the facts in evidence, it is in my opinion plain that the council
were entitled to find the applicants were not homeless for the
purposes of the Homeless Persons Act because they had accom-
modation within the ordinary meaning of that expression.
D
My Lords, I am troubled at the prolific use of judicial review
for the purpose of c):tallenging the performance by local authorities
of their functions under the Act of 1977. Parliament intended the
local authority to be the judge of fact. The Act abounds with the
formula when, or if, the housing authority are satisfied as to this,
t or that, or have reason to believe this, or that. Although the action E
or inaction of a local authority is clearly susceptible to judicial
review where they have misconstrued the Act, or abused their
powers or otherwise acted perversely. I think that great restraint
should be exercised in giving leave to proceed by judicial review.
The plight of the hom~ess is a desperate one, and the plight of F
the applicants in the prerent case commands the deepest sympathy.
But it is not, in my opinion, appropriate that the remedy of judicial
review, which is a discretionary remedy, should be made use of to
monitor the actions of local authorities under the Act save in the
exceptional case. The ground the exercise of an administrative
J
' discretion is abuse of power - e.g. bed faith, a mistake in construing G
......
the limits of the power, a procedural irregularity, or unreasonable-
ness in the Wednesbury sense - unreasonableness verging on an
absurdity : see the speech of Lord Scarman in Reg. Secretwy of
State for the Environment, Ex pwte Nottinghamshire County Council
( 1986) A.C. 240, 247-248. Where the existence or non,existence nf H
- .,.,: \

48 SUPREME COURT REPORTS [1997] SUPP. 2 S.C.R.

A a fact is left to the judgment and discretion of a public body and
that fact involves a board spectrum ranging from the obvious to
the debatable to the just conceivable, it is the duty of the court to ' '

leave the decision of that fact to the public body to whom Parlia-
ment has entrusted the decision-making power save in the case
where it is obvious that the public body, consciously or uncon-
B sciously, are acting perversely."

In L. Chandra Kumar v. Union of India, AIR (1997) SC 1125 the
Court held that power of judicial review over legislative action vested in
the High Court under Article 226 and in the Supreme Court under Article
C 32 is an integral and essential feature of the Constitution, constituting part
of its basic structure. Ordinarily, therefore, the power of the High Courts
and Supreme Court to test the constitutional validity of legislations can
never be ousted or excluded. No doubt under the Constitution power of
judicial review of the action of the State or its authorities is unfettered but
D restraint should however be the hallmark of judicial review.

The Courts normally do not interfere in the policy matters of the
State. If, however, the policy so formulated is against the mandate of the
Constitution or any statutory provision it can certainly be tested on the
principles of judicial review. When an act falls within the policy of the State
E which has been formulated for the benefit of the poor and needy and which
policy cannot be faulted, court should stay its hands and need not examine
the details minutely with a magnifying glass to find some fault here and
there unless there are allegations of mala-fides. An overall view is to be
taken of the matter and this potent weapon of judicial review cannot be
F used indiscriminately.

We find in the present back-drop the inability of the State Govern-
ment and the Housing Board to meet the challenge to achieve the target
of even constructing 50,000 dwelling units in urban areas to tackle the acute
problem of homelessness for different categories of people particularly
G those falling in Lower Income Group (LIG) and Middle Income Group
(MIG); the State legislature amending the Housing Board Act and provid-
ing for incorporation of a joint sector company for executing the housing
scheme on the terms and conditions to be approved by the State GC>Vern-
ments selection of the private entrepreneur for incorporation of the joint
H sector company with the Housing Board; the Constitution of the Board of
WEST BENGAL HOUSING BOA,RD v. B.P. GUPTA [D.P. WADHWA,J.) 49

Directors of the joint sector company; the control of the Housing Board A
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 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
B
people when it is not possible for these people to acquire a house of their
own with escalating real estate prices; it cannot be said that the public
purpose. is not being served or the incorporation of the joint sector com-
pany viz. Bengal Peerless Housing Development Company 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 a part of the ;C
bigger piece of land is not in public interest. The Housing Board acts as
regulatory body and the State Government overseas 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 or irrational or there is any abuse of D
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
the law and is valid.

Accordingly, these appeals are allowed, judgment of the Division E
Bench of the Calcutta High Court is set aside and the writ petitions filed
by the respondents are dismissed. However, there will be no order as to
costs.

R.K.S. Appeals allowed.