SOORARAM PRATAP REDDY & ORS. v. DISTRICT COLLECTOR, RANGA REDDY DISTT. & ORS

Citation: [2008] 13 S.C.R. 126

Court: Supreme Court of India

Bench: C.K. THAKKER, D.K. JAIN

Case summary

SOORARAM PRATAP REDDY & ORS. v. DISTRICT COLLECTOR, RANGA REDDY DISTT. & ORS.pdf

Judgment text

[2008] 13 S. C. R. 126 SOORARAM PRATAP REDDY & ORS. v. DISTRICT COLLECTOR, RANGA REDDY DISTT. & ORS. (Civil Appeal No. 5509 of 2008) SEPTEMBER 5, 2008 [C. K. THAKKER AND D. K. JAIN, JJ. ] Land Acquisition Act, 1894 - Part II, ss.

4 and 6 - Land acquisition - For development of infrastructure of city - The project for the development was integrated involving State agency as well as private company - Acquisition challenged as illegal, malafide and not meant for 'public purpose' - Held: Land acquisition proceedings were not illegal, or in colourable exercise ofpower - Government was right in forming an opinion as to public purpose - Development of infrastructure is legal 0 and legitimate 'public purpose' for exercising power of eminent ~ domain - An integrated and indivisible project has to be considered as a whole for determining whether it is a larger public interest - Involvement of a private company for the purpose, would not make the exercise of power of acquisition bad or malafide - Government is the best judge to decide as to what constitutes 'public purpose' - The Court, in exercise of jurisdiction under Articles 32, 136 or 226 cannot substitute its own judgment for the judgment of the Government in this regard - Constitution of India, 1950 -Articles 32, 136 and 226 - Andhra Pradesh Infrastructure Development Enabling Act, 2001.

Words and Phrases - 'Eminent domain' and 'Public purpose' - Meaning of in the context of Land acquisition act, 1894. The State Government, in the background of 'World Tourism Organization Report' and 'Vision 2020 Documents' took a policy decision for the development of the city of Hyderabad, and decided to establish an > COLLECTOR, RANGA REDDY DISTT. & ORS. Integrated Project to be implemented through its nodal agency Andhra Pradesh Infrastructure and Investment . Corporation (APllC) to make the city a world class ' business destination. The State Government acquired land for the purported development of 'Financial District ·1 and Allied Projects'. It also invoked urgency clause u/s 17 of Land Acquisition Act dispensing with procedure u/s 5A of the Act.

Appellants filed writ petitions challenging the ) acquisition on the grounds that the acquisition was not for public purpose, but the same was with ma/afide intention to transfer the same to a foreign company and :i few persons with vested interest; that the action has been taken in colourable exercise of power and in violation cf 1 ~ the Act as well as several other statutes. High Court ~ft( upheld the acquisition. However, it held the urgency 0 clause as illegal and hence directed to proceed by following the procedure u/s 5A. Wirt appeals were also filed which was dismissed by Division Bench of High Court. Hence the present appeals. ... ' Dismissing the appeals, the Court HELD: 1. 1. The proceedings initiated by the State for acquisition of land under the Lc:md Acquisition Act, 1894 are not illegal, unlawful, unwarranted, ma/a fide, fraud on .... statute or taken in colourable exercise of power. On the ...

' facts and in the circumstances of the present case, the Government was right in forming an opinion and reaching a satisfaction as to 'public purpose' and in initiating proceedings u/s 4 and 6 and in invoking Part II of the Act. [Paras 166 and 167] [198 C-F] 1. 2 Section 4 of the Act expressly authorizes the appropriate Government to issue preliminary notification for acquisition of land likely to be needed for any public purpose or 'for a company'. Likewise, Section 6 declares that when the appropriate Government is satisfied that particular land is needed for a public puipose or 'for a company', a declaration shall be made to that effect. It is thus clear that appropriate Government may acquire land if such land is needed for any public purpose or 'for a company'. If it is so, acquisition will be governed by Part II of the Act and the procedure laid down in the said Part has to be followed. Part VII, on the other hand, deals with acquisition of land for companies.

[Para 106] [176-C-E] Babu Barkya Thakur v. State ofBombay (now Maharashtra) and Ors. , 1961 (1) SCR 128; Pandit Jhandulal and Ors. v. State of Punjab and Ors. 1961 (2) SCR 459; R. L. Arora (I) v. State of Uttar Pradesh and Ors. , 1962 Supp (2) SCR 149; R. L. Arora (II) v. State of Uttar Pradesh and Ors. , 1964 (6) SCR 784; Arnold Rodricks vs. State of Maharashtra 1966 (3) SCR 885; Jage Ram and Ors. v. State of Haryana and Ors. 1971 (1) SCC 671; Aflatoon and Ors. v. Lieutenant Governor 1 of Delhi and Ors. 1975 (4) SCC 285 Ajay Krishan Singhal /. Union of India, 1996 (10) SCC 721; S. S. Darshan v. State of Karnataka and Ors. 1996 (7) SC 302; WB. Housing Board Etc. v. Brijendra Prasad Gupta (1997) 6 SCC 207; Pratibha Nema and Ors. v. State of Madhya Pradesh and Ors. 2003 (10) SCC 626; State of Karnataka amd Anr v. All India Manufacturers Organisation and Ors. 2006 (4) SCC 683; Srinivasa Cooperative House Building Society Ltd. v. Madam Gurumurthy Sastry and Ors.

1994 (4) sec 675 - relied on. Motibhai Vithalbhai Patel and Anr. v State of Gujarat and Anr AIR 1961 Guj 931 Amarnath Ashram Trust Society and Anr v. Governor of UP and Ors. , 1998 (1) sec 591; Oevinder Singh and Ors. , v. State of Punjab and Ors. 2008 (1) sec 728 - referred to. 1. 3 The expression 'public purpose' is of very wide amplitude. It is merely illustrative and not exhaustive. The inclusive definition does not restrict its ambit and scope. The expression is incapable of precise and comprehensive definition. And it is neither desirable nor advisable to attempt > COLLECTOR, RANGA REDDY DISTT. & ORS. · to define it. It is used in a generic sense of including any purpose wherein even a fraction of the community may be interested or by which it may be benefited. A 'public purpose' is thus wider than a 'public necessity'. Purpose is more pervasive than urgency. That which one sets "1 ' before him to accomplish, an end, intention, aim, object, plan or project, is purpose.

A need or necessity, on the other hand, is urgent, unavoidable, compulsive. Public purpose should be liberally construed, not whittled down by logomachy. [Paras 67, 86] [163-H; 164-A-B 169-A-B] , State of Bombay v. Bhanji Munji 1955 (1) SCR 777 followed. State of Bihar v. Kameshwar Singh 1952 SCR 889; State of Bombay v. Ali Gu/shan 1955 (2) SCR 867; State of Bombay v. R. S. Nanji 1956 SCR 18; Somawanti (Smt. ) and Ors. v. --. • State of Punjab and Ors. 1963 (2) SCR 774; Arnold Rodricks v. State o Maharashtra 1966 (3) SCR 885; Bhim Singhji v. Union of India and Ors. 1981 (1) SCC 166; Dau/at Singh Surana v. First Land Acquisition Collector 2007 (1) SCC 641; State of Kamataka and Anr. v. Ranganatha Reddy and Anr. 1977 (4) SCC 471; National Textile Workers' Union and Ors. v. PR. Ramakrishnan and Ors. 1983 (1) SCC 228 ·relied on. Hamabai Framjee Petit v. Secretary of State 1911 (13)Bom LR 1097; Veeraraghavachartar v.

Secretary of State - 1926 (49) Mad 237 : AIR 1925 Mad 837; Hamabai Framjee Petit v. Secretary of State 1914 (42) IA 44 : AIR 1914 PC 20 - referred to. Tenth Report of the Law Commission of India on "The ~ Law of Acquisition and Requisitioning of Land" - referred to. 1. 4 It is inherent power of a governmental entity to )o. take privately owned property, especially land and convert it to pubHc ·use, subject to reasonable compensation for the taking. 'Eminent domain' may be defined as the right or power of a sovereign State to take private property for ... public use without the owner's consent upon the payment of just compensation. It means nothing more or less than an inherent political right, founded on a common necessity and interest of appropriating the property of individual members of the community to the great necessities and common good of the whole society. The power of eminent domain is merely a means to an end; viz. larger public interest.

The power does not depend for its existence on a specific grant. It is inherent and exists in every sovereign State without any recognition thereof in the Constitution or in any statute. It is founded on the law of necessity. The power is inalienable. No Legislature can bind itself or its successors not to exercise this power when public necessity demands it. Nor it can be abridged or restricted by agreement or contract. [Paras 36, 37, 40 and 41] [153- C-F 154-D-F] . ,,. Charanjit Lal Chowdhury v. Union of India and Ors. 1950 (1) SCR 869; Deputy Commissioner and Collector Kamrup and Ors. v. Durganath Sarma (1968) 1 SCR 561; Coffee Board, Kamataka, Bangalore v. Commissioner of Commercial Taxes, Kamataka and Ors. 1988 (3) SCC 263; Scindia Employees' Union v. State of Maharashtra and Ors. 1996 (10) SCC 150; Sharda Devi v. State of Bihar and Anr. 2003 (3) sec 128 - relied on. Faflbrook Irrigation District v. Bradley 1896 (164) U. S. 112 : 41 Law Ed. 369; Rindge Co. v.

Los Angles County 'r 1923 (262) US 700: 67; Law Ed 1186; New York City Housing Authority v. Muller, 270 NYP 333: 105 ALR 905; Muray v. La Guardia, 291 NY 320; Samuel Berman v Andrew Parker 1954 (348) US 26 : 99 L Ed 27 : 75 S Ct 98; Hawaii Housing Authority v. Midkiff 467 US 229 : 81 L Ed 2d 186 : 104 S Ct 2321; Susette Keio v. City of New London 2005 (545) US 469 : 125 S Ct 2655 : 162 L Ed 439 - referred to. American Jurisprudence, 2d, Volume 26, pp. 638-39, para 1; Corpus Juris Secundum, Volume 29, p. 776, para 1; Words & Phrases, Permanent Edition, Volume 14, pp. 468- COLLECTOR, RANGA REDDY DISTT & ORS. 70; Advanced Law Lexicon by P Ramanatha Aiyar Volume 2, page 1575; 'De Jure, Belli et Pacis' by Grotius; 'Eminent Domain' by Nichols; 'Constitutional Limitations' by Cooley; 'Constitutional Law' by Willis - referred to. 1. 5 Development· of infrastructure is legal and legitimate 'public purpose' for exercising power of eminent domain.

Simply because a Company has been chosen for fulfillment of such public purpose does not mean that the larger public interest has been sacrificed, ignored or disregarded. It will also not make exercise of power bad, ma/a fide or for collateral purpose vitiating the proceedings. [Para 168] [199-B-C] 1. 6 In case of integrated and indivisible project, the project has to be taken as a whole and must be judged whether it is in the larger public interest. It cannot be split 0 into different components and to consider whether each and every component will serve public good. A holistic approach has to be adopted in such matters. If the project taken as a whole is an attempt in the direction of bringing foreign exchange, generating employment opportunities and securing economic benefits to the State and the public at large, it will serve public. purpose. [Para 169] [199-C-E] 1.

7 It is established in this case that the present Infrastructure Development Project conceived by the State and executed under the auspices of its instrumentality (APllC) is one covered by the Act. The Joint Venture Mechanism for implementing the policy, executing the project and achieving lawful public purpose for realizing the goal of larger public good would neither destroy the object nor vitiate the exercise of power of public purpose for development of infrastructure. [Para 170] [199-E-F] 2. Normally, a writ Court will not propel into the unchartered ocean of Governmental Policy. In the instant case, in deciding whether acquisition is for 'public purpose' or not, prima facie, Government is the best judge. The entire amount of compensation is to be paid by State agency (APllC) which also works as nodal agency for execution of the project. It is primarily for the State to decide whether there exists public purpose or not.

Undoubtedly, the decision of the State is not beyond judicial scrutiny. In appropriate cases, where such power is exercised ma/a fide or for collateral purposes or the purported action is de hors the Act, irrational or otherwise unreasonable or the so-called purpose is 'no public purpose' at all and fraud on statute is apparent, a writcourt can undoubtedly interfere. But except in such cases, the declaration of the Government is not subject to judicial review. A writ court, while exercising powers under Articles 32, 226 or 136 of the Constitution, cannot substitute its own judgment for the judgment of the Government as to 0 what constitutes 'public purpose'. [Paras 99, 153 and 171] [174-A-B; 194-E, 199-H 200-A-C] Bennett Coleman and Co. v. Union of India 1972 (2) SCC 788; Dhampur Sugar (Kashipur) Ltd. v. State of Uttaranchal and Ors. 2007 (8) SCC 418; Hamabai Framjee Petit v. Secretary of State 1914 (42) IA 44 : AIR 1914 PC 20; State of Bombay vs. R. S. Nanji 1956 SCR 18; Bajirao T.

Kate (dead) by LRs. and Anr. v. State of Maharashtra and Ors. 1995 (2) SCC 442; Laxman Rao Bapurao Jadhav v. State of Maharashtra 1997 (3) sec 493; Dau/at Singh surana vs. First Land Acquisition Collector 2007(1) SCC 641 - relied on. Somawanti (Smt. ) and Ors. vs. state of Punjab and Ors. 1963 (2) SCR 774 - referred to. Case Law Reference , 1896 (164) U. S. 112 Referred to Para 45 (1923) 262 us 700 Referred to Para 47 · 270 NYP 333 Referred to Para 48 291 NY 320 Referred to Para 49 COLLECTOR, RANGA REDDY DISTT. & ORS. ~ 1954 (348) us 26 Referred to Para 51 467 us 229 Referred to Para 54 2005 (545) us 469 Referred to Para 55 1950 (1) SCR 869 Relied on Para 60 1968 (1) SCR 561 Relied on ~.

Para 62 1988 (3) sec 263 Relied on Para 63 1996 (10) sec 150 Relied on Para 64 2003 (3) sec 128 Relied on Para 65 (1911) 13 Born LR 1097 Referred to Para 69 (1914) 42 IA 44 Referred to Paras 71 and 154 1926 (49) Mad 237 Referred to Para 72 1952 SCR 889 Relied on Para 73 1955 (2) SCR 867 Relied on Para 76 1955 (1) SCR 777 followed Para 77 1956 SCR 18 Relied on Paras 77 and 155 1963 (2) SCR 774 Relied on Paras 79 and 156 1966 (3) SCR 885 Relied on Para 82 1981 (1) SCC. 166 Relied on Para 83 2001 (1) sec 641 Relied on Paras 84 and 164 1977 (4) sec 471 Relied on Para 87 1983 (1) sec 228 Relied on Para 88 1972 (2) sec 788 Relied on Para 99 2001 (8) sec 418 Relied on Para 100 >-' 1961 (1) SCR 128 Relied on Para 109 1961 (2) SCR 459 Relied on Para 112 134 SUPREME COURT r- - 4 of the Act was issued by the State Government on July 10, 2002 which was published in the Government Gazette on July 17, 2002.

The said notification read as under; THE ANDHRA PRADESH GAZETTE EXTRAORDINARY PUBLISHED BY AUTHORITY R. R. No. 25 HYDERABAD WEDNESDAY 17TH JULY2002 No. G1/7180/2000 Dated : 10-07-2002 FORM - 2 A DRAFT NOTIFICATION UNDER SECTION 4 OF 1894 IAS AMENDED BY ACT XXXVlll OF 1923 Whereas it appears to the the Land Acquisition Government of Andhra Amendment made by the Pradesh that the land LandAcquisitionActXXXlll of specified in the Schedule 1923, and the Governor of below and situated at Andhra Pradesh hereby Nanakram Guda Village, authorized Spl. Deputy Serilingampally Manda! , Collector, LA(lnd), Hyderabad, Ranga Reddy District is and his staff and workmen needed for Public purpose, to exercise the powers to wit for Development of conferred by section 4(2) of New Projects byAPllC Ltd. , the Act.

Under sub-section notice to that effect as (4) of Section 17 of the Act, hereby given to all whom it the Governor of Andhra may concern in Pradesh directs that in view accordance with the of the urgency of the case, provisions of section 4(1) the provisions of Section 5of the Land Acquisition Act, A of the Act, shall not apply 1 of 1894, as amended by to this case. SCHEDULE 16. It is thus clear that the land was proposed to be acquired for a public purpose, viz. for development of new projects by APllC. It is also apparent that urgency clause under Section 17 of the Act was applied and inquiry under Section 5-A was dispensed with. 17. A notification under Section 6 of the Act was also issued on the same day which was published in the Government Gazette on July 18, 2002. The said notification read as under; THE ANDHRA PRADESH GAZETTE EXTRAORDINARY PUBLISHED BY AUTHORITY 1 R. R. No. 26 HYDERABAD Thursday 18 h July 2002 No.

G1/7180/2000 · Dated : 10-07-2002 FORM - 5-A DRAFT DECLARATION UNDER SECTION 6 OF THE LA ACT Under Sec. (6) of the Land the Act and directed to take Acquisition Act, the Order for the acquisition of Governor of Andhra the land under Sub-Section Pradesh hereby declares (1)(2) of Section 17 of the that the land specified below Act, the Governor ofAndhra and measuring Ac. 80-35 Pradesh further directs that gts/acre be the same a little the possession of the said more or less is needed for land may be taken on the public purpose, wit for expiry of 15 days from the Development of New date of the publication of the Projects by APllC Limited. notice mentioned in section Under Sections 3 and 7 of 9(1) of the Act. A plan of the · the same Act, the Special land is kept in the Special Deputy Collector, L. A. Deputy Collector, L. A. (Ind), (Ind. ), Hyderabad, is Hyderabad, and may be appointed to perform the inspected at any time during functions of Collector under the office hours.

SCHEDULE Writ petitions in High Court 18. The validity of notifications under Sections 4 and 6 of the Act was challenged by some of the land owners by filing Writ Petition No. 21712 of 2002 in the High Court of Andhra Pradesh at Hyderabad. The learned Single Judge, vide a judgment and order dated April 25, 2003 partly allowed the petition. He held that in view of counter-affidavit filed by the authorities, it could not be said that the acquisition was illegal or unlawful and, therefore, was not sustainable. Acquisition of land was in exercise of power of eminent domain and was intended for public purpose, to wit, for development of New Projects by APllC Ltd. The acquisition was to enable the activities of APllC, which was an instrumentality of State operating in the area of industrial infrastructure. The purposes of APllC were demonstrably public purposes.

It was also held that the claim of the petitioners as being small farmers was not well-founded as no agricultural operations were being pursued by them as asserted by the authorities in the counter-affidavit 0 which was not denied. The availability of alternative land as pleaded by the petitioners was also not correct since the lands available were not contiguous to the existing developed areas and hence could not be said to be 'alternative'. 19. The Court, however, held that invocation of urgency clause under Section 17 of the Act and dispensing with enquiry as contemplated by Section 5-A of the Act was not legal. Section 5-A of the Act is a salutary provision which enables the persons whose land is proposed to be acquired to urge all grounds that may be available against the proposed acquisition at the enquiry. Unless real urgency is demonstrated, dispensing with the enquiry and invocation of urgency clause was irrational and arbitrary exercise of power by the State.

By such process, an enquiry under Section 5-A of the Act cannot be jettisoned on jejune grounds of irrational and unsubstantiated urgency. Since no such urgency could be demonstrated by the State, the action to the extent of dispensing with the enquiry was held to be bad. The petition was, therefore, partly allowed directing the authorities to issue notice to the landowners under Section 5-A of the Act and to take further proceedings in accordance with law. ~ COLLECTOR, RANGA REDDY DISTI. & ORS. [C. K. THAKKER, J. ] -{ 20. The Court finally stated; "However, it is clarified that the notice under section 4(1) of the Act is not interfered with". 21. Other petitions filed by other land owners were also ~ I partly allowed relying upon the decision in Writ Petition No. -i 21712 of 2002. ' I . Writ appeals 22. Being aggrieved by the orders passed by the learned Single Judge, Writ Appeals were instituted by both landowners as also byAPllC.

The Division Bench dismissed all the appeals holding that the land was needed for public purpose and the acquisition --4 could not be said to be contrary to law. Similarly, the learned single -1. Judge was also right in coming to the conclusion that on the facts 'II and in the circumstances of the case, urgency clause could not have been applied under Section 17 of the Act and enquiry could not have been dispensed with under Section 5-A of the Act. 23. The Division Bench stated; "The Financial District is a unique project being developed by the Corporation wherein the reputed financial institutions like Banks, Insurance etc. , set up their offices to serve the needs of the trade, commerce and industry. The --J. Corporation has already allotted land in the Financial District for Insurance Regulatory and Development __. , Authority of India (IRDA) and also to SBH Staff Training 1. Academy etc.

It is stated that in order to ensure compactness of the Financial District, the lands in question are under acquisition for public purpose and to utilize them for new projects being developed by the Corporation. >-' The lands in question were identified and notified for acquisition after examining the matter carefully. The lands in question are essential so as to ensure compactness of the Financial District Project being developed by the Corporation. It is stated that there is no prohibition to acquire lands belonging to small farmers under the due process of law, if it is inevitable.. The allegation of the appellants that there are vast extents of Government lands in the nearby villages and that there is absolutely no reason to acquire private patta lands is denied. The Government lands situated in the adjoining villages would not facilitate compactness of the Financial District Project being developed by the Corporation.

It is stated that the lands in question are under acquisition following the due process of law for utilizing the same for public purpose, i. e. development of Financial District Project and other projects being development by the Corporation. The development works for the proposed works wouid be taken up as soon as the lands are acquired under the Land Acquisition Act". 24. In pursuance of the order passed by the learned single Judge and confirmed by the Division Bench of the High Court, enquiry under Section 5-A of the Act had been held. Notices were issued to the land owners and persons interested, objections were invited, hearing was afforded and finally notification under Section 6 was issued on April 26, 2005 which was published on the next day, 1. e. April 27, 2005 in the Government Gazette. The said notification reads thus; THE ANDHRA PRADESH GAZETTE EXTRAORDINARY PUBLISHED BY AUTHORITY R. R. No. 85HYDERABAD WEDNESDAY 27th April 2005 No.

G1 /7180/2000 Dated : 26-04-2005 t FORM - 5-A • DRAFT DECLARATION UNDER SECTION 6 OF THE LAND ACQUISITION ACT Under Sec. (6) of the Land notice mentioned in section Acquisition Act, the 9(1) of the Act, a plan of the Government of Andhra land is kept in the office of Pradesh hereby declares the SPECIAL DEPUTY that the land specified below COLLECTOR, Land in the schedule below and acquisition (industries), measuring acres (80-35) Hyderabad, and may be acres, be the little more or i~spected at any time du ring less is needed for public the office hours. purpose, wit for NOTICE is hereby given DEVELOPMENT OF NEW under section 9(1) & 10 and PROJECTbyAPllC Limited, 9(3) & 10 of the Land under Sections 3 and 7 of Acquisition Act, that the the same Act, THE SPECIAL State Government proposed DEPUTY COLLECTOR, to acquire the lands LAND ACQUISITION mentioned in the schedule.

(INDUSTRIES), All persons interested in the Hyderabad, is appointed to lands are requested to perform the functions of appear in person or by Collector, under the Act and authorized agent, before directed to take order for the the on SPECIAL DEPUTY acquisition of the said lands. COLLECTOR, LAND Under sub-section (1) (2) of ACQUISITION Section 17 of the Act, the (INDUSTRIES), Hyderabad, Government of Andhra SNEHA SILVER JUBILEE Pradesh further directs, that BHAVAN, Collectorate the possession of the said lands may be taken on the . premises, LAKDIKAPUL, expiry of (15) d. ays from the HYDERABAD on 21. 05. date of the publication of the 2005 at 11-00 AM. SCHEDULE + 25. The said notification thereafter was challenged by the land owners in the High Court of Andhra Pradesh in the present proceedings. As already observed earlier, the petitions were dismissed and hence the property owners have challenged the said decision in this Court. Statutory provisions 26.

Before we deal with the contentions of the parties, it is appropriate if we examine the relevant provisions of the Land Acquisition Act, 1894. As the Preamble states, the Act has been enacted for the purpose of enabling the State to acquire land for public purposes as also for Companies. Section 3 defines various expressions. The expression 'Company' is defined in clause (e) to mean a Company as defined in the Companies Act, 1956 (other than a Government Company). Clause (ee) defines 'appropriate Government'. Clause (f) defines 'public purpose'. The definition is inclusive in nature and includes purposes mentioned in sub-clauses (i) to (viii). 27. Part 11 (Sections 4 to 17) relates to 'acquisition'. Section 4 confers power on the appropriate Government to issue preliminary notification for acquisition of land needed or likely to be needed for any public purpose or for a Company.

The proceedings for acquisition thus begin with issuance of notification under Section 4 which reads as under; 4. Publication of preliminary notification and powers of officers thereupon- (1) Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose or for a company a notification to that effect shall be published in the Official Gazette and in two daily newspapers circulating in that locality of which at least one shall be in the regional language and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality the last of the dates of such publication ancl the giving of such public notice, being hereinafter referred to as the date of publication of the notification. (2) Thereupon it shall be lawful for any officer, either, COLLECTOR, RANGA REDDY DISTT &ORS. [C. K. THAKKER, J.

] >generally or specially authorised by such Government in this behalf, and for his servants and workmen, to enter upon and survey and take levels of any land in such locality; to dig or bore in the sub-soil; to do all other acts necessary to ascertain whether the land is adapted for such purpose; to set out the boundaries of the land proposed to be taken and the intended line of the work (if any) proposed to be made thereon; to mark such levels, boundaries and line by placing marks and cutting trenches, and, where otherwise the' survey cannot be completed and the levels taken and the boundaries and line marked, tb cut down and clear away any part of any standing crop, fence or jungle: Provided that no person shall enter into any building or upon any enclosed court or garden attached to a dwellinghouse (unless with the consent of the occupier thereof) without previously giving such occupier at least seven days' notice in writing of his intention to do so. 28.

Section 5A as inserted by the Land Acquisition (Amendment) Act, 1923 (Act 38 of 1923) provides for hearing of objections. It enacts that any person interested in any land - _;,, which has been notified under Section 4 of the Act as being needed or likely to be needed for a public purpose or for a company may, within thirty days from the date of the publication of the notification, object to the acquisition of the land. Such objections can be made to the Collector in writing. The Collector should grant the objector an opportunity of being heard in person or by any person authorised by him in that behalf or by pleader and should, after hearing all objections and after making such ·" further inquiry, if any, as he thinks necessary, either make a report in respect of the land which has been notified under Section 4 (1 ), or make diffe1ent reports in respect of different parcels of such land, to the appropriate Government. containing his recommendations on the objections, together with tr.

e record of the proceedings held by him. for the decision of that Government. The section also declares that the decision of the Appropriate Government on the objections shall be 'final'. 29. Section 6 relates to "declaration that land is required for a public purpose". The said section is material and may be quoted in extenso. 6. Declaration that land is required for a public purpose.

- (1) Subject to the provisions of Part VII of this Act, when the Appropriate Government is satisfied after considering the report, if any, made under section 5A, sub-section (2), that any particular land is needed for a public purpose, or for a company, a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorised to certify its orders an different declarations may be made from time to time in respect of different parcels of any land covered by the same notification under section 4, sub-section (1 ), irrespective of whether one report or different reports has or have been made (wherever required) under section 5-A, sub-section (2): Provided that no declaration in respect of any particular land covered by a notification under section 4, sub-section (1 ),- (i) published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967 but before the commencement of the Land Acquisition (Amendment) Act, 1984 shall be made after the expiry of three years from the date of the publication of the notification; or (ii) published after the commencement of the Land Acquisition (Amendment) Act.

1984, shall be made after the expiry of one year from the date of the publication of the notification: , COLLECTOR, RANGA REDDY DISTT & ORS. [CK THAKKER, J] 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 authority. Explanation 1. -ln computing any of the periods referred to in the first proviso, the per. iod during which any action or proceeding to be taken in pursuance of the notification issued under Section 4, sub-section (1 ), is stayed by an ~ order of a Court shall be excluded. ,. ,,, Explanation 2. -Where the compensation to be awarded for such property is to be paid out of the funds of a corporation owned or controlled by the State, such compensation shall be deemed to be compensation paid out of public revenues.

(2) Every declaration shall be published in the Official Gazette, and in two daily newspapers circulating in the -( locality in which the land is situate of which at least one shall be in the regional language, and the Collector shall cause public notice of the substance of such declaration to be given at convenient places in the said locality (the last of the date of such. publication and the giving of such public notice, being hereinafter referred to as the date of publication of the declaration), and such declaration shall state the district or other territorial division in which the land is situate, the purpose for which it is needed, its approximate area, and where a plan shall have been made of the land, the place where such plan may be inspected.

(3) The said declaration shall be conclusive evidence that the land is needed for a public purpose or for Company, as the case may be; and, after making such declaration the Appropriate Government may acquire the land in manner hereinafter appearing. (emphasis supplied) 30. Once the declaration under Section 6 rJs been made, it shall be conclusive evidence that the land is needed for a public purpose. 31. Section 9 requires the Collector to issue notice to the person interested stating that the Government intends to take possession of the land, and that claims to compensation for all 8 interests in such land may be made to him. It also enumerates particulars to be mentioned in the notice. 32. Section 11 enjoins the Collector to proceed to enquire ) into the objections (if any) which any person interested had filed pursuant to the notice and the value of the land at the date of the publication of the notification under section 4(1 ), and to make an award.

Section 11A prescribes period within which such award shall be made by the Collector. Section 12 declares award of Collector to be final subject to the provisions of the Act. Section 16 empowers Collector after he has made the 0 award under section 11 to take possession of the land which shall thereupon vest absolutely in the Government, free from all encumbrances. Section 17 deals with cases of urgency. 33. Part Ill (Sections 18 to 28A) provides for reference to Court and procedure to be followed. Part IV (Sections 29 to 30) deals with apportionment of compensation. Part V (Sections 31 to 34) relates to payment of compensation. Part VI (Sections 35 to 37) permits temporary occupation of land. 34. Part VII (Sections 38 to 448) is another important part dealing with acquisition of land for Companies. Sections 39 provides for previous consent of appropriate Government and execution of agreement for such acquisition.

Section 40 declares that no such consent can be given unless the appropriate Government is satisfied either on the report of the Collector under Section 5A(2), or upon an enquiry conducted in the manner laid down in Section 40 as to purpose of acquisition. Section 41 provides for agreement between the Company and appropriate Government in respect of the matters specified therein. Section 42 requires publicaticn of agreement in Official Gazette. Section 44i-\ imocses a restriction on the Company f for which any land is acquired under Part VII to trar1sfer the land or any part thereof by sale, mortgage, lease, gift or otherwise except with the previous sanction of the appropriate Government. Section 448 likewise prohibits acquisition of land under Part VII except for purposes specified in Section 40 for private Companies. ~ 35. Part VIII (Sections 45 to 55) deals with miscellaneous matters. Eminent domain 36.

'Eminent domain' may be defined as the right or power of a sovereign State to take private property for public use without the owner's consent upon the payment of just compensation. It means nothing more or less than an inherent political right, founded on a common necessity and interest of appropriating the property of individual members of the community to the great necessities and common good of the whole society. It embraces all cases where, by the authority of the State and for the public good, the property of an individual is taken without his consent to be devoted to some particular use, by the State itself, by a Corporation, public or private or by a private citizen for the· welfare of the public [American Jurisprudence, 2d, Volume 26, pp. 638-39, para 1; Corpus Juris Secundum, Volume 29, p. 776, para 1; Words & Phrases, Permanent Edition, Volume 14, pp. 468-70]. 37.

'Eminent domain' is thus inherent power of governmental entity to take privately owned property, especially land and convert it to public use, subject to reasonable compensation for the taking [vide P. Ramanatha Aiyar's Advanced Law Lexicon, Volume 2, page 1575]. 38. The term 'eminent domain' is said to have originated by Grotius, legal scholar of the seventeenth century. He believed that the State possessed the power to take or destroy property for the benefit of the social unit, but he believed that when the .. ).. State so acted, it was obligated to compensate the injured property owner for his losses. 39.

In his well known work De Jure, Belli et Pacis', the learned author proclaimed; "The property of subject is under the eminent domain of the State, so that the State or he who acts for it may use, alienate and even destroy such property, not only in the case of extreme necessity, in which even private person have a right over the property of other, but for the ends of public utility, to which ends those who founded civil society must be supposed to have the intended the private ends should give way". 40. Blackstone too believed that State had no general power to take private property of land-owners, except on the payment of a reasonable price. The right of the State or the sovereign to its or his own property is absolute while that of the subject or citizen to his property is only pa1 Jmount. The citizen 0 holds his property subject always to the right of the sovereign to take it for a public purpose. The power of eminent domain is -,, merely a means to an end; viz.

larger public interest. 41. The power of eminent domain does not depend for its existence on a specific grant. It is inherent and exists in every sovPreign State without any recognition thereof in the Constitution or in any statute. It is founded on the law of necessity. The power is inalienable. No Legislature can bind itself or its successors not to exercise this power when public necessity demands it. Nor it can be abridged or restricted by agreement or contract. 42. Nichols in his classic book 'Eminent Domain' defines it (eminent domain) as "the power of sovereign to take property for public use without the owner's consent". 43. Another constitutional expert (Cooley) in his treatise on the 'Constitutional Limitations', states; ·'More accurately, it is the rightful authority ·which must rest in every sovereignty to con.

trol and regulate those rights of a public nature which pertain to its citizens in common ~ and to appropriate and controi'individual property for the public benefit, as the public safety, convenience or necessity may demand". 44. Willis in his well known work 'Constitutional Law' discusses two view points as to exercise of power of eminent domain. The older and stricter view was that unless the property was dedicated for user by the public at large or a considerable section thereof, it would not be for public use or for public purpose. The modern and more liberal view, however, is that it is not an essential condition of public use that the property should be transferred to public ownership or for public user and it is sufficient that the public derives advantage from the scheme. 45. In Fallbrook Irrigation District v. Bradley, (1896) 164 U. S. 112 : 41 Law Ed.

369, an Act of California provided for the acquisition of lands whenever 50 land-owners or a majority of them in a particulo:r locality required it for construction of watercourse, the object of the legislation being to enable dry lands to be brought under wet cultivation. The validity of the Act was challenged on the ground that the acquisition would only benefit particular land owners who could take water from the channel and the public as such had no direct interest in the matter and consequently there was no public user. The contention was right if narrow view was to be accepted but was not wellfounded if liberal view was to be adopted. 46. Rejecting the contention, the Court observed; . 'To irrigate and thus bring into possible cultivation these large masses of otherwise worthless lands would seem to be a public purpose and a matter of public interest, not confined to the land-owners, or even to anyone section of the State.

The fact that the use of the water is limited to the land-owner is not, therefore, a fatal objection to this legislation. It is not essential that the entire community, or even any considerable portion thereof, should directly enjoy or participate in an improvement in order to constitute a public use.... . It is not necessary in order that 156 SliPREME COURT REPORTS (2008] ·13 s c ,; the use should be public that every resident in the district should have the right to the use of the water" (emphasis supplied) 47. The above statement of law was reiterated in subsequent cases. In Rindge Co. v. Los Angles County, (1923) 262 US 700 : 67 Law Ed 1186, the Court observed that "it is not essential that the entire community or even a considerable portion should directly enjoy or participate in an improvement in order to constitute a public use. " 48. In New York City Housing Authority v.

Muller, 270 NYP 333: 105 ALR 905, certain lands were acquirec;l in pursuance of a governmental project for clearing slums and providing housing accommodation to persons with low income. The validity of the acquisition was questioned on the ground that the use was private and not public. The Court, however, rejected the contention and stated; "Over many years and in a multitude of cases the courts have vainly attempted to define comprehensively the concept of a public use; and to formulate a universal test even though it were possible, would in an inevitably changing world be unwise if not futile"..... and holding that those purposes were for the benefit of the public the court went on to observe "It is also said that since the taking is to provide apartments' to be rented to a class designated as persons of low income or to be leased or sold to limited dividend corporations the use is private and not public. This objection disregards the primary purpose of the legislation.

Use of a proposed structure, facility or service by everybody and anybody is one of the abandoned, universal tests of a public use. " (emphasis supplied) 49. In Muray v. La Guardia, 291 NY 320, a Town Corporation was formed for acquiring certain lands. It was financed by the Metropolitan Insurance Cori1pany which held all SOORARAM PRATAP REDDY & ORS. v. DISTRICT 157 .. COLLECTOR, RANGA REDDY DISTT &ORS. [C. K. THAKKER, J. ] the stocks of the Corporation. The owners of the lands contended that the scheme was to benefit only few individuals and the Insurance Company which was a private Corporation and there was no public use in the project. The Court, however, rejected the argument. 1 50.

Dealing with the contention that there was no public use in the project because the Insurance Company was benefited, the Court observed: "Nor do we find merit in the related argument that unconstitutionality results from the fact that in the present case the statute permits the city to exercise the power of "Eminent domain" to accomplish a project from which 'Metropolitan' a private corporation may ultimately reap a profit. If upon completion of the project the public good is enhanced it does not matter tbat private interests may ¥ be benefited. " (emphasis supplied) 51. In Samuel Berman v. Andrew Parker, (1954) 348 US 26 : 99 L Ed 27 : 75 S Ct 98, owners instituted an action of condemnation of their property under the District of Columbia Redevelopment Act, 1945. Plans were approved and the Planning Commission certified them to the agency for execution. The agency undertook the exercise of redevelopment of the area.

It was contended by the land owners that the project was not public project and their property could not be acquired. 52. Rejecting the contention, the Court observed that it does not sit to determine whether a particular housing project· is or is not desirable. The concept of the public welfare is broad and inclusive. The values it represents are spiritual as well as physical, aesthetic as well as monetary. It is within the power of the Legislature to determine that the community should be beautiful as also healthy, spacious as also clean, well-balanced as also carefully patrolled. According to the Court, the Congress and its authorized agencies have made determinations that · ;\ take into account a wide va1iety of ·,;alues and it was not for the Court to reappraise them. "If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way. " (emphasis supplied) 53.

Dealing with the contention that the project was undertaken by one businessman for the benefit of another businessman, the Court observed; "The public end may be as well or better served through an agency of private enterprise than through a depaftment of government-or so the Congress might conclude. We cannot say that public ownership is the sole method of promoting the public purposes of community redevelopment projects. VJhat we have said also disposes of any contention concerning the fact that certain property owners in the area may be permitted to repurchase their properties for redevelopment in harrhony with the overall plan. That, too, is a legitimate means which Congress and its agencies may adopt, if they choose". (emphasis supplied) 54.

In Hawaii Housing Authority v Midkiff, 467 US 229 : 81 L Ed 2d 186 : 104 S Ct 2321, the Court held that, no doubt there is a role for Courts to play in reviewing a Legislature's judgment of what constitutes a public use, even when the eminent domain power is equated with the police power. But the Court in Berman made clear that it is "extremely narrow". The Court emphasized that any departure from this judicial r; restraint would result in courts deciding on what is and what is not a governmental function and in their inva! idating legislation on the basis of their view on that question. And the Court would not substitute its judgment for a Legislature's judgment as to what constitutes a public use "unless . the use ! :le palpably without reascnable foundation. " ~ COLLECTOR, RANGA REDDY DiSTI. & ORS. [CK THAl I of the same we are of the opinion that the land in dispute is needed for a public purpose as contended by the respondents.

We may add that the Notifications under Sections 4 and 6 are not defective on any of the grounds urged before us on behalf of the petitioner as held by us and the declaration under Section 6 is conclusive evidence that the land in dispute is needed for a public purpose". 129. In Arnod Rodricks, Wanchoo, J. (as His Lordship ~ then was) stated that there is no reason why the State or local authority should have no power to get further development done through private agencies by lease, assignment or sale of acquired land. 130. In Jage Ram & Ors. V State of Haryana & Ors. (1971) 1 SCC 671, a Notification under Section 4 of the Act was issued for acquisition of land for public purpose, namely, 8 for setting up of a factory for the manufacture of China-ware and Porcelain-ware. Urgency clause under Section 17 of the Act was also applied by dispensing with enquiry under Section 5A of the Act. The action was challenged by the land owners. 131.

Rejecting the contention, upholding the acquisition and following Somawanti, the Court held that so long as it is not established that the acquisition is sought to be made for some collateral purpose, the declaration of Government that it is made for a public purpose is final, conclusive and not open to challenge. 132. In Aflatoon & Ors. v. Lieutenant Governor of Delhi & Ors. (1975) 4 sec 285, land was sought to be acquired for "Planned Development of Delhi''. Neither the Master Plan nor the Zonal Plan was ready. The question before this Court was whether acquisition proceedings could have been initiated in the absence of Master Plan or Zonal Plan. 133. Considering the relevant provisions of the Delhi Development Act, 1957, the Court held that the proceedings did not get vitiated in the absence of such Plan. The Court observed that acquisition generally precedes development.

If for proper development, land is sought to be acquired, such action could not be said to be illegal, unlawful or in colourable exercise of power. 134. It was also contended that the acquisition was for Company inasmuch as after acquisition, the Government proposed to hand over the property or a portion thereof to Cooperative Housing Societies and since procedure in Part VII of the Act was not followed, the acquisition was not valid. 135. Even the said contention was negatived by the Court )- observing that merely because the Government allotted a portion of the property to Cooperative Societies, Part VII did not get attracted and the acquisition could not be held invalid [See also Ajay Krishan Singhal v Union of India, (1996) 10 SCC 721]. 136. In S. S. Darshan v. State of Karnataka & Ors. (1996) -1 7 SC 302, land was sought to be acquired under the Act for • 'I public purpose, namely, for setting up Information Technological Park.

Challenging the acquisition, it was contended by the petitioners that the acquisition was ma/a fide and in colourable exercise of power since primarily the acquisition was for a Private Limited Company and not for the State. I ... 137. The relevant part of the Notification read thus: -l . ,. "The lands shown in the annexed index are required for a public purpose, that is, to establish information ·< _. , technological park through Karnataka Industrial Areas Development Board. " (emphasis supplied) _, 138. Emphasizing the fact that the acquisition was through Board, this Court ruled that acquisition was for a public purpose. The notification stated about public purpose of establishment of information technological park through the Board. 139.

Considering various clauses in the Joint Venture Agreement, the Court held that the cumulative effect of all went "( to show that acquisition was for the public purpose of setting up technological park by Government of Karnataka through Karnataka Industrial Areas Development Board and was, therefore, valid. 140. In W. B. Housing Board Etc. v. Brijendra Prasad Gupta (1997) 6 SCC 207, land was acquired for providing houses to poor people. The action was challenged, inter alia, .... on the ground that the Housing Board was to earn profit and hence it could not have been said to be a public purpose. 141. Refuting the contention and upholding the acquisition, the Court took note of the fact that it was a matter of common knowledge that there is acute shortage of housing accommodation both in rural and urban areas of the country. The Court also stated that since late the prices of real estate have sky-rocketed making it beyond the reach of low income and middle income group of people.

Hence, the State has a duty to give shelter to homeless people, specially, to the people of the low income group. If for that purpose it sought to acquire land, it could not be said that acquisition was illegal or unlawful. 142. Regarding earning of profit, the Court stated: "Simply because there is an element of profit, it could not make the whole scheme illegal. A private entrepreneur wttl certainly look to some profit but to see that the profit motive does not lead to exploitation even of the rich and that the houses are available to the poor people and to middle class people at nominal or affordable prices, or even on no-profit-no-loss basis, the Housing Board exercises the necessary control. It is certainly a public purpose to provide houses to the community especially to poor people for whom the prices are beyond their means and they would otherwise never be able to acquire a house. " 143.

The Court concluded: "The Court must shake off its myth that public purpose is served only if the State or the Housing Board or the joint sector company does not earn any profit. There cannot be any better authority that the State or the statutory corporation to supervise or monitor the functions of the joint venture company. Courts will certainly step in if the public purpose is sought to be frustrated". (emphasis supplied) 144. Reference was also made to Pratibha Nema & Ors. _. v. State of Madhya Pradesh & Ors (2003] 10 SCC 626. There, a piece of dry land of the appellants and others was notified for acquisition under Section 4 of the Act for public purpose, namely, for establishment of 'Diamond Park'. The acquisition was challenged on the ground that it was not for public purpose but was meant only to benefit a Company and its associates, and as such it was in colourable exercise of power and ultra vires the Act. -.. t \ 145.

Referring to earlier decisions of this Court and drawing distinction between acquisition by State for 'public purpose' covered by Part II and acquisition for a 'Company' under Part ~ VII, the Court stated; "Thus the distinction between public purpose acquisition ' and Part VII acquisition has got blurred under the impact ~ ofjudicial interpretation of relevant provisions. The main 1 and perhaps the deceive distinction lies in the fact whether \ cost of acquisition comes out of public funds wholly or partly Here again, even a token or nominal contribution 1 by the Government was held to be sufficient compliance "'' with the second proviso to Section 6 as held in a catena of decisions. The net result is that by contributing even a trifling sum, the character and pattern of acquisition could { ~ be changed by the Government.

In ultimate analysis, what :\ is considered to be an acquisition for facilitating the setting up of an industry in private sector could get imbued with the character of public purpose acquisition if only the Government comes forward to sanction the payment of nominal sum towards compensation. In the present state _,,,_ of law, that seems to be the real position''. (emphasis supplied) 146. Reliance was also placed on State of Kamataka & Anr. v. All India Manufacturers Organisation & Ors. , (2006) 4 SCC 683. In that case, the Government of Karnataka undertook i a mega project for developing its transport and communication '. system. A Memorandum of Understanding was entered into ... between State Government and a Company for implementation of the project and lands were acquired. A Public Interest Litigation (PIL) was filed in the High Court alleging that the land was not needed for public purpose and yet excess land was acquired and had been given to a Company.

The action was, therefore, illegal, unlawful and mala fide. 147. Negativing the contention and upholding the action, this Court observed that the project was an integrated infrastructure development and not merely a highway project. As an integrated project, it required acquisition and transfer of lands even away from the main alignment of the road. Acquisition of land and giving it to the Company was, therefore, legal and lawful and did not suffer from mala fide. 148. The counsel for the appellants referred to Amarnath Ashram Trust Society & Anr. v. Governor of U. P & Ors. , (1998) 1 sec 591. In that case, land was sought to be acquired for play ground for students of Amarnath Vidya Ashram (public school), Mathura. Notification under Section 4 of the Act was issued stating that the land was to be acquired for 'public purpose'.

The land-owner challenged the acquisition contending that the land was acquired for a Society and since procedure prescribed in Part Vil was not followed, the acquisition was bad in law. 149. Upholding the contention, quashing the proceedings and referring to Pandit Jhandu Lal, this Court observed; "It is now well established that if the cost of acquisition is borne either wholly or partly by the Government, the acquisition can be said to be for a public purpose within ,. the meaning of the Act. But if the cost is entirely borne by the company then it is an acquisition for a company under Part VII of the Act. Admittedly, in the present case the entire cost of acquisition is to be borne by the appellant society and, therefore, it is ~ an acquisition for a company and not for a public purpose. That is also borne out by the notification issued under 1-1 Section 6 of the Act which states that "the land mentioned COLLECTOR, RANGA REDDY DISTT & ORS. [C. K. THAKKER, J.

] in the schedule below is needed for the construction of play-ground for students of Amar Nath Vidya Ashram (public school), Mathura in district Mathura by the Amar , Nath Ashram Trust, Mathura". Therefore, simply because in the notification issued Under Section 4 of the Act it was stated that the land was needed for a public purpose, "i namely, for a play- ground for students of Amar Nath Vidya Ashram (public school), Mathura, it cannot be said that the acquisition is for a public purpose and not under Chapter (Part) VII for the appellant-society in view of subsequent events and the declaration made Under Section 6". (emphasis supplied) 150. Finally, reference was made to a recent decision of this Court in Devi(lder Singh & Ors. , v. State of Punjab & Ors. , (2008) 1 SCC 728. In DevinderSingh, land was sought to be -i acquired by the State to set up 'Ganesha Project', a Company registered under the Companies Act, 1956.

The acquisition ~ was challenged on the ground that though land was sought to be acquired for a Company, procedure was followed under Part II and not under Part VII and hence it was bad in law. The record revealed that the payment of entire amount of compensation was to be made by the Company. It was, therefore, incumbent to follow procedure laid down in Part VII. During the pendency of the writ petition, however, it was ~. contended by the State that it would be contributing Rs. 100/and hence it was covered by Part II and the acquisition was legal and valid. 151. Observing that the acquisition was for a Company and not by the State for a 'public purpose', the Court held that the procedure laid down in Part VII was required to be followed. Since it was not done, the acquisition was bad in law. ~ ,I.. 152. Negativing the contention that the acquisition was .

by the State, this Court said; "In this case we may notice that purported contribution had been made only after the writ petitions were filed. Ordinarily, this Court would not have gone into the said question but the agreement provides for payment of entire compensation by the company. We do not know as to at what stage the State thought it fit to meet a part of the expenses for acquisition of land. Such an opinion on the part of the State having regard to the statutory scheme should have been formed prior to entering into the agreement itself. The agreement does not mention about any payment of a part of compensation by the State. We, in absence of any other material on record, must hold that the State had not formed any opinion in that behalf at least when the agreement was executed. The wisdom in all probabilities dawned on the officers of the State at a later stage". (emphasis supplied) Satisfaction of Government and Judicial Review 153.

In our judgment, in deciding whether acquisition is for 'public purpose' or not, prima facie, Government is the best judge. Normally, in such matters, a writ Court will not interfere by substituting its judgment for the judgment of the Government. 154. In Hamabai, the Judicial Committee of Privy Council stated; "All that remains is to determine whether the purpose here is a purpose in which the general interest of the community is concerned. Prima facie the Government are good judges of that. They are not absolute judges. They cannot say: 'Sic volo sic jubeo' but at least a Court would not easily hold them to be wrong". (emphasis supplied) ' 155. This Court, in R. S. Nanji, reiterated the principle laid down by the Privy Council. The Constitution Bench observed; COLLECTOR, RANGA REDDY DISTT & ORS. [C. K. THAKKER, J. ] ~ "Prima facie the Government is the best judge as to whether 'public purpose' is served by issuing a requisition order, but it is not the sole judge.

The courts have the jurisdiction and it is their duty to determine the matter whenever a question is raised whether a requisition order is or is not for a 'public purpose"'. --1 (emphasis supplied) 156. In Somawanti, this Court interpreted sub-section (3) of Section 6 of the Act and held that the declaration made under Section 6 of the Act is 'conclusive evidence' that the land is needed for public purpose. 157. It was contended that the declaration can be made by the Government arbitrarily and if such declaration is irrational, unreasonable, mala fide or de hors the Act, it should be open to a Court to decide the question . . J 158. Dealing with the submission, the majority stated; "Now whether in a particular case the purpose for which land is needed is a public purpose or not is for the State Government to be satisfied about.

If the purpose for which the land is being acquired by the State is within the legislative competence of the State the declaration of the Government will be final subject, however, to one exception. That exception is that if there is a colourable exercise of power the declaration will be open to challenge at the ·~ instance of the aggrieved party. The power committed to the Government by the Act is a limited power in the sense that it can be exercised only where there is a public purpose, leaving aside for a moment the purpose of a company. Ifit appears that what the Government is satisfied about is not a public purpose but a private purpose or no purpose at all the action of the Government would be colourable as not being relatable to the power confirmed upon it by the Act and its declaration will be, a nullity". (emphasis supplied) 159.

The majority concluded; 'Though we are of the opinion that the courts are not entitled to go behind the declaration of the Government to the effect that a particular purpose for which the land is being acquired is a public purpose we must emphasise that the declaration of the Government must be relatable to a public purpose as distinct from a purely private purpose. If the purpose for which the acquisition is being made is not relatable to a public purpose then a question may well arise whether in making the declaration there has been, on the part of the Government a fraud on the power conferred upon it by the Act. In other words the question would then arise whether that declaration was merely a colourable exercise of the power conferred by the Act, and, therefore, the declaration is open to challenge at the instance of the party aggrieved. To such a declaration the protection of s. 6 (3) will not extend. For, the question whether a particular action was the result -..

of a fraud or not is always justiciable, provisions such as S. 6(3) notwithstanding". (emphasis supplied) 160. In Srinivasa Cooperative House Building Society Ltd. v. Madam Gurumurthy Sastry & Ors, (1994) 4 SCC 675, this Court held that a token contribution from public revenue cannot ipso facto be treated as colourable exercise of power by the State in acquisition of land. Each case must furnish its backdrop whether the action is for public purpose or for a private purpose. 161. In Bajirao T Kate (dead) by LRs. & Anr. v. State of Maharashtra & Ors. , (1995) 2 SCC 442, this Court held that satisfaction of the State Government regarding existence of public purpose is not open to judicial scrutiny unless there is ma/a fide or colourable exercise of power. 162. The Court stated; "It is primarily for the State Government to decide whether there exists public purpose or not, and it is not for this ~ COLLECTOR, RANGA REDDY DISTT & ORS. [C. K. THAKKER, J.

] Court or the High Courts to evaluate the evidence and come to its own conclusion whether or not there is public purpose unless it comes to the conclusion that itis a mala fide or colourable exercise of the power. In other words the exercise of the power serves no public purpose or it . __, serves a private purpose". (emphasis supplied) · 163. In Laxman Rao Bapurao Jadhav v. State of Maharashtra, (1997) 3 SCC 493, this Court held that it is for ·the State Government to decide whether the land is needed or is likely to be needed for a public purpose and whether it is suitable or adaptable for the purpose for which the acquisition was sought. The mere fact of empowering the authorized officer to inspect and find out whether the land would be adaptable for the public purpose does not take away the power of the Government to take a decision ultimately. "' 164. We may, however, recall Dau/at Singh once again at this state.

There, referring to all leading cases and dealing with the ambit and scope ofjudicial review on the satisfaction by the State Government on 'public purpose', this Court stated; . E "Public purpose is bound to vary with times and prevailing conditions in the community or locality and, therefore, the legislature has left it to the State (Government) to decide what is public purpose and also to de·clare the need of a -\ given land for the purpose. The legislature has left the discretion to the Government regarding public purpose. The Government has the sole and absolute discretion in the matter'. -\ (emphasis supplied) 165. It was contended that the italicized portion quoted ,.... above (The Government has the sole and absolute discretion in the matter) is not in consonance with settled legal position or in accord with earlier decisions of this Court including decisions rendered by various Constitution Benches. We have " already referred to R. S.

Nanji wherein before more than half a century, Constitution Bench of this Court held that prima facie, the Government is the best judge to decide public purpose but it is not the sole judge. That was the view of the Privy Council in Hamabai. Again, in Somawanti, the Constitution Bench held that in case of colourable exercise of power by the State Government or fraud on statute, the declaration under Section 6 is open to challenge, notwithstanding the 'finality clause' under sub-section (3) of the said section. 166. We would have indeed considered the contention of the learned counsel for the appellants closely in the light of earlier decisions of this Court. We are, however, of the view that on the facts and in the circumstances of the present case, the Government was right in forming an opinion and reaching a satisfaction as to 'public purpose' and in initiating proceedings under Sections 4 and 6 and in invoking Part II of the Act.

'Ne, therefore, refrain from undertaking further exercise. In our considered opinion, it is not necessary for us to enter into larger question in view of 'fact situation' in the instant case. Conclusions 167. Applying the aforesaid principles to the case on hand, in our considered opinion, it cannot be said that the proceedings initiated by the State for acquisition of land under the Land Acquisition Act, 1894 are illegal, unlawful, unwarranted, mala fide, fraud on statute or have been taken in colourable exercise of power. 168. As already adverted to earlier, the State of Andhra Pradesh in the background of 'World Tourism Organization Report' and 'Vision 2020 Document' took a policy decision for the development of the City of Hyderabad. For the said purpose, it decided to establish an Integrated Project which would make Hyderabad a major Business-cum-Leisure Tourism Infrastructure Centre for the State. The project is both structurally -"" as well as financially integrated.

It is to be implemented through Andhra Pradesh Infrastructure and Investment Corporation (APllC) which has taken all steps to make Hyderabad a world- class business destination. APllC is an instrumentality of State and works as 'Nodal Agency' developing the project which would facilitate socio-economic progress of the State by generating ·revenues, weeding out unemployment and bringing new avenues and opportunities for public at large. Development of infrastructure is legal and legitimate 'public purpose' for exercising power of eminent domain. Simply because Company has been chosen for fulfillment of such public purpose does not mean that the larger public interest has been sacrificed, r ignored or disregarded. It will also not make exercise of power bad, mala fide or for collateral purpose vitiating the proceedings. 169.

In our judgment, the respondents are right in submitting that in case of integrated and indivisible project, the project has to be taken as a whole and must be judged whether it is in the larger public interest. It cannot be split into different components and to consider whether each and every component will serve public good. A holistic approach has to be adopted in such matters. If the project taken as a whole is an attempt in the direction of bringing foreign exchange, generating employment opportunities and securing economic benefits to the State and the public at large, it will serve public purpose. 170. It is clearly established in this case that the Infrastructure Development Project conceived by the State and executed under the auspices of its instrumentality (A~llC) is one covered by the Act.

The Joint Venture Mechanism for -"\ implementing the policy, executing the project and achieving lawful public purpose for realizing the goal of larger public good would neither destroy the object nor vitiate the exercise of power of public purpose for development of infrastructure. The concept of joint venture to tap resources ofprivate sector for infrastructural development for fulfillment of public purpose has been recognized in foreign countries as also in India in several decisions of this Court. 171. The entire amount of compensation is to be paid by State agency (APllC) which also works as nodal agency for execution of the project. It is primarily for the State to decide whether there exists public purpose or not. Undoubtedly, the decision of the State is not beyond judicial scrutiny.

In appropriate cases, where such power is exercised mala fide or for collateral purposes or the purported action is de hors the Act, irrational or otherwise unreasonable or the so-called purpose is 'no public purpose' at all and fraud on statute is apparent, a writ-court can undoubtedly interfere. But except in such cases, the declaration of the Government is not subject to judicial review. In other words, a writ court, while exercising powers under Articles 32, 226 or 136 of the Constitution, cannot substitute its own judgment for the judgment ofthe Government as to what constitutes 'public purpose'. 172. Taking the facts in their entirety, we are of the view that the action of the State in initiating acquisition proceedings for establishing and developing infrastructure project cannot be held contrary to law or objectionable. The High Court was, therefore, right in dismissing writ petitions as also writ appeals and we find no infirmity therein.

All the appeals, therefore, are liable to be dismissed and are accordingly dismissed, however, leaving the parties to bear their own costs. K. K. T. Appeals dismissed.