"Reportable"
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7468 OF 2010
(Arising out of SLP (C) No. 33194 of 2009)
Nand Kishore Gupta & Ors. ... Appellants
Versus
State of U.P. & Ors. ...Respondents
WITH
CIVIL APPEAL NO. 7469 OF 2010
(Arising out of SLP (C) No. 33958 of 2009)
J.S. Horticulture Pvt. Ltd. ...Appellant
Versus
State of U.P. & Ors. ...Respondents
WITH
CIVIL APPEAL NO. 7470 OF 2010
(Arising out of SLP (C) No. 35336 of 2009)
Balbir Singh & Anr. ...Appellants
Versus
State of U.P. & Ors. ...Respondents
2
J U D G M E N T
V.S. SIRPURKAR, J.
1. This judgment will govern Special Leave Petition (Civil) Nos. 33194 of 2009, 33958 of 2009 and 35336 of 2009.
2. Leave granted in all the Special Leave Petitions.
3. In the first two Special Leave Petitions, judgment passed by the High Court of Judicature at Allahabad dated 30.11.2009, is in challenge while in the third Special Leave Petition, judgment dated 5.10.2009 on the same subject is impugned. By the impugned judgments, the Writ Petitions filed by the land owners challenging the notification under Sections 4 and 6 of the Land Acquisition Act, 1894 (hereinafter called `the Act' for short) relating to Yamuna Expressway Project, were dismissed by the High Court.In the Writ Petitions, directions were sought, firstly not to give effect to the notifications issued and further not to dispossess the landholders/ petitioners after demolishing their constructions on the lands which were proposed to be acquired. All the challenges were repelled by the High Court. The High Court, in the judgment dated 30.11.2009 passed in Civil Misc. Writ Petition No.31314 of 2009 (Nand Kishore Gupta & Ors. Vs. State of U.P. & Ors.), basically pointed out that out of 12,282 land owners, 11,397 had already received their compensation under the agreement and the challenge related only to 21.03 hectares out of 1,604 hectares of land.he High Court also took the view that the scales of justice must tilt towards the right to development of the millions who will be benefited from the road and the development of the area, as against the human rights of 35 petitioners therein, whose main complaint was that they were not heard before the declaration under Section 6 of the Act. The High Court also declined to give any direction to
the State Government to consider to exempt 21.03 hectares of land relating to the 35 petitioners therein on account of the fact that the construction of the road had to be made in an alignment and that alignment could not be changed.Identical view was taken in another Writ Petition filed by one Balbir Singh. The High Court
also expressed its concerns that any direction to exempt the land covered by the construction might seriously jeopardize the Project.The High Court also reiterated that the acquisition of the land for interchange of the
road was the essential part of the Project, as also the construction of bridges, culverts and interchanges,which were essential for the fast moving six lane Expressway.
4. Before we approach the arguments, it would be
interesting to see some facts of this litigation.
5. A notification dated 20.2.2009 was issued by the
Government of Uttar Pradesh under Section 4(1) read with
Sections 17(1) and 17(4) of the Act. Thereunder, the
lands described in the schedules appended thereto in
District Agra, Pargana Etmadpur, Tehsil Etmadpur,
Village Kuberpur were covered for a public purpose,
namely, the construction of the interchange under the
Yamuna Expressway Project in District Agra through
Yamuna Expressway Industrial Development Authority
(hereinafter called `YEIDA' for short). In fact, in the
year 2001 itself, the State Government had taken a
decision for the construction of Yamuna Expressway which
sometimes earlier was named as Taj Expressway, which was
to proceed from Greater Noida to Agra. This was to be
done on Build, Operate and Transfer (BOT) basis and the
builder was to get the rights to collect the tolls for a
period of 36 years from the date of commencement of
commercial operations. On account of the public outcry,
5
the State Government appointed a Commission of Enquiry
under the Chairmanship of Mr. Justice Siddheshwar Narain
(Retd.). A Public Interest Litigation was also filed.
The Project was cleared in the enquiry and the Public
Interest Litigation also ended in favour of the
Government of U.P. It is on the backdrop of this that
the State Government came up with a notification dated
20.2.2009, i.e. only after its way was cleared, which
itself took about 8 years. This was the reason given
for making applicable the urgency clause under Sections
17(1) and 17(4) of the Act. Legal notices were served
by those who were affected, but ultimately the State
came out with a notification dated 15.6.2009 under
Section 6(1) read with Sections 17(1) and 17(4) of the
Act. It is mainly the complaint of the appellants that
they had purchased the land long time back and their
names were duly mutated in the Revenue records and they
had thereafter raised constructions over the land in
question, and in those constructions, they were running
their business like shops, cold-storage etc. The
appellants also complained that the area which was
proposed to be cleared for the interchange, if acquired,
the appellants would suffer immensely. The appellants
very seriously challenged the application of urgency
6
under Sections 17(1) and 17(4) of the Act to these
acquisitions, thereby depriving the appellants of an
opportunity to be heard under Section 5A of the Act.
Even before us, that is the main thrust of the arguments
on behalf of the appellants.
6. The other major challenge opposing the acquisition
related to the concept of `public purpose'. It was
tried to be suggested that this was in fact an
acquisition without any public purpose for the Company-
J.P. Infratech Ltd.-respondent No.5 and would be covered
under Part VII of the Act. In that, the learned Counsel
appearing on behalf of the appellants urged that there
could be no dispensation with enquiry under Section 5A
of the Act. It was pointed out that the compensation
was payable by the private party under the scheme and,
therefore also, this could not be viewed as a public
purpose. It was also suggested that this was virtually
a perpetual lease in favour of the Company and,
therefore, the Company was getting deemed proprietary
rights.
7. In the two impugned judgments, the Allahabad High
Court has repelled all the challenges. In fact in the
earlier round of litigation that is in the Public
7
Interest Litigation itself the Division Bench of the
Allahabad High Court repelled the challenges to this
Project which was then known as Taj Expressway Project
and the land acquisition made therefor.
8. Before we approach the questions argued, it will be
better to refer to the judgment of the Allahabad High
Court in the Public Interest Litigation, which, in
itself, refers the enquiry held by Mr. Justice
Sidheshwar Narain (Retd.). In fact one of the prayers
in the Public Interest Litigation was for production of
the Report dated 12.10.2006 of the Commission headed by
Mr. Justice Narain. The other prayers were to initiate
de novo judicial enquiry by a sitting High Court Judge
and further to issue a Writ of Mandamus declaring the
alleged Enquiry Report as illegal, invalid and
ineffective and not enforceable in the eyes of law and
lastly to pass any other Writ, order or direction. This
Writ Petition was then amended and the Concession
Agreement dated 7.2.2003 entered between the Taj
Expressway Authority and the Jaiprakash Industries
(hereinafter called `the Company' for short) also came
to be challenged. This Taj Expressway Authority was
constituted under Section 3 of the U.P. Industrial Area
8
Development Act, 1996 which later on was named as Yamuna
Expressway Industrial Development Authority (YEIDA).
The petitioners prayed for a declaration that this
agreement was null and void.
9. Another prayer added by way of an amendment was for
investigation by the special investigation team into the
entire deal of Taj Expressway Project. The High Court
in its well considered judgment, took note of the three
challenges by the petitioners to the said Commission of
Enquiry Report. The said challenges were:
(1) that the award of contract to the Company was
activated by mala fides;
2) that the tender process itself was faulty; and
3) that the terms of contract were unconscionable and
against the public interest.
10. All the three challenges were refuted by the
Division Bench of the High Court by referring to the
Report itself which was filed before it at the instance
of the State Government. It recorded a finding that
there was no mala fide on the part of anybody. The
Commission had also come to the conclusion that the
Agreement with the Company was arrived at after proper
scrutiny on the part of the Government Officers and
there was no mala fide on the alleged connection of one
9
Shri Anup Mishra or his father with the Company. The
Division Bench affirmed this finding. The Division
Bench also recorded a finding that the petitioner
therein was not able to place any other material on
record to show that the process itself was faulty or
that the terms of contract were unconscionable and
against the public interest. While considering the
amendment made by the petitioner to the Writ Petition by
which fresh challenges were thrown against the Agreement
dated 7.2.2003, the Division Bench came to the
conclusion that there was no procedural infirmity in the
contract having been awarded to the Company. The
Division Bench then considered the other challenges
namely:
1) huge chunks of lands had been given to respondent
No.2 on lease for 90 years at a very nominal lease
rent.
2) Exemption of stamp duty has been given to
respondent No.2 causing loss of revenue to the
State exchequer.
11. The Division Bench in detail considered the nature
of lease and the nature of the transaction. For that it
went on to analyze the whole Project which had the three
objectives, namely:
1
(1) provide a fast moving corridor to minimize travel
time
(2) to connect the main township/ commercial centres on
the Eastern side of Yamuna
(3) to relieve the National Highway No.2 which was
already congested and ran through the heart of cities
like Faridabad, Ballabhgarh and Palwal."
12. The High Court then discussed the financial
ramifications resulting out of the Agreement and then
after referring various judgments of this Court, went on
to decide the question whether before finalizing the
contract in favour of respondent No. 2 Company, the
State Government or the Taj Expressway Authority had
undertaken the requisite research. It went on to record
a finding as found in the Commission of Enquiry that the
authorities had examined all the aspects of the matter
before issuing the bid document inviting offers. It also
recorded that there was proper publication of the Notice
Inviting Tender (NIT) in various national Dailies and
that 19 parties had responded to the NITs. The High
Court, therefore, recorded a finding that there was
nothing shady and the entire process was transparent.
The High Court also registered a finding that it could
not be said that undue concessions were given to the
Company in view of the fact that all such concessions
had already been spelt out in the bid document. Thus,
1
the High Court approved of the findings reached in the
Commission of Enquiry by Mr. Justice Siddheshwar Narain
(Retd.). Ultimately, the High Court dismissed the
Public Interest Litigation.
13. It is on this backdrop that number of Writ
Petitions came to be filed again giving rise to the two
impugned judgments.
Basically two questions emerge from the arguments
made at the Bar before us. They are:-
1. The acquisition itself cannot be said to be for the
public purpose:
(a) as the object of this acquisition is not
covered by the definition of `public
purpose' in Section 3 (f) of the Land
Acquisition Act.
(b) it cannot be said that this acquisition
would come under Part II of the Land
Acquisition Act and in fact it must be
considered to be under Part VII of the Act
since it virtually amounts to acquisition
of land for J.P. Infratech-a
company(respondent No.5).
(c) the compensation for the land acquisition is coming
wholly from the Jaypee Industries and not from the
1
Government or from YEIDA and, therefore, it is not an
acquisition for public purpose.
(d) the acquisition for so-called interchange is not at
all necessary and it is actually a colourable exercise of
powers.
2. The application of Sections 17 (1) and 17 (4) of the
Land Acquisition Act was wholly unnecessary and,
therefore, illegal,
(a) and, therefore, the Government could not have
dispensed with the enquiry under Section 5 A of the Act.
14. Learned Counsel appearing on behalf of the
appellants argued in support of the above two main and
the ancillary questions.
15. As against this, learned Counsel appearing for the
State as also for the Company and YEIDA supported the
acquisition and contended that it was futile to oppose
the acquisition, particularly, when the acquisition was
virtually accepted by all except a few, inasmuch as the
learned Counsel contended that majority of the landlords
have accepted the compensation also and have not
challenged the acquisition in any manner. It is only a
few extremely insignificant pockets which are now caught
in this litigation. The learned Counsel have
specifically averred that the whole process was extremely
1
transparent and that there was necessity of this land
considering the public purpose involved and that all care
was taken to safeguard the interests of the farmers and
that the creation of this Expressway and creation of five
townships would immensely help the general public
residing on the Eastern Bank of Yamuna particularly, and
the residents of UP generally. It is on these rival
contentions that we have to proceed now.
16. Since the land acquisition exercise is for the
Yamuna Expressway Project, it would be worthwhile to see
some factual background thereof. U.P. Industrial Area
Development Act, 1976 came into force on 1.4.1976.
Section 3 thereof provides for constituting an authority
by a notification. The object of this legislation is
planned development of certain notified areas in the
State by building up integrated industrial townships.
The State Government is empowered thereunder to declare
the industrial development area and this Act empowers the
authority to acquire the land by direct purchase or
through State (under the provisions of the Land
Acquisition Act, 1894). It also requires preparing a
Master Plan, to demarcate the sites into industrial,
commercial, institutional, residential and other land use
1
in accordance with the Master Plan. Under Section 7 of
the said Act, the authority is empowered to allot its
properties, by way of lease or otherwise, on such terms
and conditions as it may deem fit. An authority called
Taj Expressway Industrial Development Authority came to
be constituted under this Act by a Notification dated
24.4.2001. This Authority changed its nomenclature and
became Yamuna Expressway Industrial Development Authority
(`YEIDA' for short) vide Notification dated 11.7.2008.
This was with intent to develop the Eastern Side of the
river Yamuna by construction of a 6 lane Expressway
joining Noida to Agra and also for development of five
regions along the said Expressway into a planned
industrial development area for residential, industrial,
institutional or recreational purposes. The industrial
development area was also notified on 24.4.2001, which
then comprised of 8 villages. Later on, vide
notification dated 22.8.2001, as many as 63 No. of
villages including the village of some of the appellants
were also included. By further notifications, some more
villages were also notified as part of industrial
development area. The area was in 4 districts, namely,
Gautam Budh Nagar, Agra, Mathura and Aligarh.
1
17. After the constitution of the Authority (YEIDA),
public notices for global tenders were issued in 2001
inviting bids from interested parties desirous of
implementing the Project of the said 6 lane Expressway
and the building of the townships on Build, Operate and
Transfer model. This Project, however, did not proceed,
as there was no eligible bidder and ultimately, the
selection process was dropped. Subsequently, in
November, 2002, fresh bids were invited on the same
principles, but with an option either to enter into a
joint venture (JV) with the YEIDA or to implement the
said Project without any equity partition of the said
Authority. In the Bid Document, the necessity of the
major highway connecting New Delhi with Mathura and Agra
was reiterated with the objectives (i) to provide a fast
moving corridor to minimize the travel time, (ii) to
connect the main townships/commercial centres on the
Eastern Side of Yamuna, and (iii) to relieve NH-2 which
was already congested and ran through the heart of cities
like Faridabad, Ballabhgarh and Palwal. It was informed
to the interested parties that the proposed Expressway
was to be about 160 Kms. in length shortening the
distance between Noida and Agra with an estimated cost of
US $ 350 million. It was also informed that the
1
Expressway was to pass through virgin area along the
river Yamuna and that a band of 500 meters width of land
at five or more locations, of which one location was to
be in Noida or Greater Noida area along the Expressway,
would be offered on acquisition cost along the corridor
as an integral part of the Project. It was further
informed that in addition to the land for Expressway, 25
million square meters land along the same would be given
at acquisition cost for development of the same for
commercial, amusement, industrial, institutional and
residential purpose. Bids were invited from all the
interested parties having experience in the
construction/development of infrastructure Projects
including real estate development and it was informed
that the selected developer would be offered 25 millions
square meters of land for development on acquisition cost
on lease for a period of 90 years. It was also informed
that the concession period would be for 7 years from the
date of signing of the Concession Agreement and all the
assets related to the Expressway were to stand
transferred on the date of signing of the Concession
Agreement in favour of such a successful bidder. The Bid
Document also provided that the successful bidder would
have the right to levy, collect and retain toll from the
1
public using the Expressway during the concession period.
Tender of Jaiprakash Industries Ltd. was accepted and
thus they became the successful bidder as they had
claimed the lowest concession period of 36 years.
18. The Concession Agreement dated 7.2.2003 also came to
be executed between the parties. However, before the
work could start, the whole Project got stuck up in the
litigation, upon which the Enquiry Commission was
appointed by the State Government under the Chairmanship
of Mr. Justice Siddheshwar Narain (Retd.). Before that,
two Commissions of sub enquiries were constituted. While
the Report of the first Commission was quashed by the
Allahabad High Court, the second Commission of Enquiry
could not proceed at all, as the Members had resigned.
Ultimately, Mr. Justice Siddheshwar Narain (Retd.)
completed the enquiry and submitted his Report in
October, 2006. Thereafter, as has already been pointed
out earlier, a Public Interest Litigation came to be
filed by way of a Writ Petition before the Allahabad High
Court, which was dismissed by the Allahabad High Court.
It was thereafter that the process of land acquisition
commenced in September, 2007. In the first phase, land
for Expressway was acquired. Subsequently, the
1
acquisition process started for the land for development.
The first Writ Petition being Civil Misc. Writ Petition
No. 48978 of 2008 came to be filed by one Balbir Singh,
challenging the Notification dated 15.10.2007 issued
under Section 4 of the Act, as also the Notification
dated 4.1.2008 issued under Section 6 of the Act.
Status quo order was passed on the said Writ Petition.
On its heels, other Writ Petitions were filed, the main
Writ Petition being Civil Misc. Writ Petition No. 31314
of 2009 filed by one Nand Kishore Gupta. The status quo
orders were passed even in that Writ Petition.
Ultimately, the Writ Petition of Balbir Singh was
dismissed by a judgment dated 5.10.2009 and that of
others including Nand Kishore's came to be dismissed on
30.11.2009. It is on this historical backdrop that we
have now to consider the correctness or otherwise of
these two judgments, which pertain to, more or the less,
same subject, but with slight variation.
19. The Writ Petition filed by Balbir Singh proceeded,
inter alia, on the grounds that acquisition was a
colourable exercise of power and was one which should
have been accomplished by complying with the provisions
of Part VII of the Act as this was an acquisition for
1
company. By the judgment dated 5.10.2009, the High Court
dismissed the Writ Petition holding that (a) the entire
process of acquisition was in accordance with the
provisions of the Act and this was not a colourable
exercise of powers, (b) the land in instant case was
indeed acquired for public purpose, namely, construction
of Yamuna Expressway Project, (c) the land was not
acquired for company and as such the procedure under
Chapter VII was not applicable.
It was also urged in that case that the entire cost of
the acquisition was to be borne by the Company and the
Company had to pay the entire dues towards acquisition
cost and, therefore, there was no public purpose in this
acquisition and the so-called public purpose appearing in
the Notification was a camouflage. It was further urged
that since even a part of compensation was not coming
from the Government out of the public revenue or some
fund controlled by the local authority, this acquisition
was not for the public purpose. In Balbir Singh's case,
all these objections were dismissed.
20. More or the less, same contentions with some
difference were raised in Nand Kishore's case also, the
judgment which also disposed of the Civil Misc. Writ
2
Petition No. 50474 of 2009 (Rajo Devi & Ors. Vs. State of
U.P. & Ors.), Civil Misc. Writ Petition No. 35090 of 2009
(J.S. Horticulture Pvt. Ltd. Vs. State of U.P. & Ors.),
Civil Misc. Writ Petition No. 51537 of 2009 (Bhupendra
Singh & Ors. Vs. State of U.P. & Ors.), Civil Misc. Writ
Petition No. 51543 of 2009 (Mukesh Singh Vs. State of
U.P. & Ors.), Civil Misc. Writ Petition No. 51546 of 2009
(Vijay Singh & Anr. Vs. State of U.P. & Ors.), Civil
Misc. Writ Petition No. 51551 of 2009 (Jagvir Singh &
Ors. Vs. State of U.P. & Ors.), Civil Misc. Writ Petition
No. 60587 of 2009 (Kadival Infrastructure Pvt. Ltd. &
Anr. Vs. State of U.P. & Ors.) alongwith the main Writ
Petition being Civil Misc. Writ Petition No.31314 of 2009
(Nand Kishore Gupta & Ors. Vs. State of U.P. & Ors.).
The individual grievances raised in all these Writ
Petitions were dealt with and the challenges were
rejected. The two main points, as culled out by us, were
dealt with as in Balbir Singh's case.
21. Insofar as the individual grievances are concerned,
they were mostly in the nature of plea regarding the
constructions having been there in this land required for
interchange. For example, in Nand Kishore Gupta's case,
it was claimed that there was cold storage of the
2
petitioner No. 1 therein and shops in cold storage, a
temple in plot No. 139, a weigh bridge (Dharm Kanta) on
plot No. 122 and some of the plots were owned by Trishul
Awas Sahkari Awas Samiti. It was stated in Civil Misc.
Writ Petition No. 50474 of 2009 (Rajo Devi & Ors. Vs.
State of U.P. & Ors.) that the petitioners had a house
and a boundary wall on some Khasras and some
constructions on the others. In Civil Misc. Writ
Petition No. 35090 of 2009 (J.S. Horticulture Pvt. Ltd.
Vs. State of U.P. & Ors.), it was urged that there was a
10'X11' high boundary wall and constructed rooms inside a
`Goshala' and 3 tube wells with several trees. In Civil
Misc. Writ Petition No. 51537 of 2009 (Bhupendra Singh &
Ors. Vs. State of U.P. & Ors.), it was urged that this
was an agricultural land and the petitioners therein
depended on the same for their livelihood. In still
other Writ Petitions being Civil Misc. Writ Petition No.
51543 of 2009 (Mukesh Singh Vs. State of U.P. & Ors.),
Civil Misc. Writ Petition No. 51546 of 2009 (Vijay Singh
& Anr. Vs. State of U.P. & Ors.) and Civil Misc. Writ
Petition No. 51551 of 2009 (Jagvir Singh & Ors. Vs. State
of U.P. & Ors.), the same plea of cultivation was raised.
In Civil Misc. Writ Petition No. 60587 of 2009 (Kadival
Infrastructure Pvt. Ltd. & Anr. Vs. State of U.P. &
2
Ors.), the petitioners claimed that they had purchased 7
plots with the total area of 24060 sq. meters and they
were plots for industrial purposes and that the plot of
Yashoda Devi was a fertile land.
22. The High Court has refuted all these contentions by
giving good reasons. We will not go into these
individual cases once the High Court has decided not to
entertain these plea and, in our opinion, correctly.
After all, this was an acquisition for building up a
highway and the abovementioned Writ Petitions pertained
to the land required for interchange. It is obvious that
the alignment of the highway cannot be changed, as its
design has been prepared after consideration of so many
factors by the experts in building the road. Its
direction or alignment, therefore, cannot be changed,
with the result, the area which is required for
interchange, also cannot be changed. This is a typical
example of the individual having to sacrifice his land
for the public good. There can be no dispute that this
road would add to the betterment of the citizens of the
East Yamuna area in particular and Uttar Pradesh in
general. This is apart from the fact that the majority
of the persons whose lands have been acquired, have
2
either not objected to it or have accepted the
compensation without any demur. It will, therefore, not
be possible for us to go into these individual
grievances, which have been rightly rejected by the High
Court. In fact, in Balbir Singh's case, it was pointed
out that out of the 12,315 affected farmers in 133
villages over the total area of 1,638 hectares of the
Expressway, 11387 have already received compensation and
only 142 farmers have raised the issues. The High Court
has rightly held that the private interest is always
affected to some extent in such large schemes requiring
the acquisition of land. The High Court has rightly held
that a holistic view had to be taken to look for an all
round development without forgetting about our heritage,
culture and traditions. We also, therefore, would not
entertain the objections, feebly raised before us,
individually.
23. We have now to see as to whether the challenge posed
by the appellants herein about this acquisition not being
for public purpose is justified or not. Shri Ranjit
Kumar, Shri Debol Banerjee, learned Senior Counsel and
Ms. Meenakshi Arora, learned Counsel appearing on behalf
of the appellants, vehemently urged that this
2
acquisition, in the first place, is colourable exercise
of power. All the learned Counsel urged that the very
nature the whole transaction showed was that the whole
acquisition was tailor made for the respondent Company.
The learned Counsel further urged that it was meant only
for the benefit of the Company, inasmuch as, though the
acquisition should have been made under the provisions of
Part VII of the Act, it was carried out in terms of the
provisions of the Part II of the Act, citing this to be
an acquisition for public purpose. According to the
learned Counsel, there already existed a road which was a
functional road and Yamuna Expressway is only an excuse
to develop the feeder road to connect the five proposed
townships. The learned Counsel urged that the huge land
of 25 million square meters has virtually been handed
over to the respondent Company on a platter and,
therefore, all this exercise was clearly not for the
public purpose. It was further urged that the so-called
Concession Agreement dated 7.2.2003 was one-sided,
inasmuch as, even if it was terminated, the land which
was given to the Company for development, would have
remained unaffected. It was further urged that
considering the length of the lease period of 90 years,
the land was virtually given to the Company for ever, and
2
it was nothing but transferring the same in favour of the
Company. It was then pointed out that it was only the
Expressway which would revert back to the Government
after 36 years, but not the land measuring about 25
million square meters, which would be wholly managed by
the Company. In fact, the learned Counsel argued that
this cannot be said to be an integrated Project, as the
land for Expressway and the land for development have
been treated on an entirely different and unequal
footing. It was also pointed out that the present
purpose was not a public purpose as envisaged in Section
3(f) of the Act. The learned Counsel pointed out that
from the Agreement itself, it is clear that the entire
cost of the acquisition is going to be borne by the
Company and, therefore, there can be no doubt that the
acquisition is for the Company and not for the public
purpose. The learned Counsel argued that merely because
the Company has paid the entire cost of acquisition
alongwith Rs.100/- per hectare per year by way of
premium, it cannot be denied that it is only the private
respondent who is bearing the entire cost of the
acquisition and the State Government/YEIDA has not
contributed anything. Heavily relying on the decision in
Pratibha Nema & Ors. Vs. State of M.P. & Ors. [2003 (10)
2
SCC 626], the learned Counsel argued that this issue
needs to be addressed by this Court on the backdrop of
this case.
24. As against this, the learned Counsel appearing on
behalf of the State, as also for the Company and YEIDA,
pointed out that this cannot be said to be a colourable
exercise of power. They also pointed out that there
cannot be any dispute about the utility of this Project
and its benefits to the public. They further pointed out
that the whole process has been extremely transparent.
They also pointed out that this acquisition cannot, under
any circumstances, come within Part VII of the Act. The
learned Counsel further pointed out that the five
developed parcels of the land were going to revert to the
acquiring body after 90 years, and the period of 90 years
cannot provide a permanency to the whole transaction.
The learned Counsel urged that the State ultimately was
going to receive a 6 lane Expressway which was 160
Kilometers long alongwith five developed parcels of land
on the Eastern Side of Yamuna river. The learned Counsel
also pointed out that all this was going to help the
industrialization and the overall development of that
area in particular and the State in general, apart from
2
the fact that this highway would reduce the traffic
congestion presently felt on N.H.-2. The learned Counsel
pointed out that it will also release the congestion, as
it exists in the cities and would help smooth movement of
people, goods and material.
25. The learned Counsel also urged that the creation of
five planned parcels of land under the Scheme would
immensely help the trading activities in the State and
would be extremely useful for the citizens. The learned
Counsel further pointed out that the land would be put to
the industrial, commercial, residential, amusement or
institutional purposes which would ultimately serve the
public purpose. Lastly, on this question, the learned
Counsel urged that it was a misnomer to say that the
compensation was coming only from the private coffers of
the Company. The learned Counsel also referred to the
nature of the agreement i.e. the BOT contract. The
contention raised was that a BOT contract, by its nature
cannot be equated to or with an acquisition for a
Company. According to the learned Counsel, all that the
Government was doing was merely choosing a third party
agency to implement the work of building, designing,
financing or running the Project, and that the Government
2
was utilizing the expertise and enterprise of a third
party.
26. Our attention was also invited to two decisions of
this Court concerning the BOT contracts and the
allegations made relating to them. The decisions were
State of Karnataka & Anr. Vs. All India Manufacturers
Organization & Ors. [2006 (4) SCC 683] and Sooraram
Pratap Reddy & Ors. Vs. District Collector, Ranga Reddy
District & Ors. etc. etc. [2008 (9) SCC 552].
27. The first and foremost thing which we must keep in
mind while deciding these matters is that at least in the
present two matters (Balbir Singh's case decided on
5.10.2009 and Nand Kishore's case decided on 30.11.2009),
the subject related only to the acquisition of few
hectares of land as compared to the acquisition of large
chunk which has not been challenged. Further, it is an
admitted position that majority of the acquisition
proceedings are over. In Balbir Singh's case also, the
persons who challenged the Project, were 9 in number,
owning about 7.09 hectares of land i.e. about 0.42% of
the total land. It has been strongly argued on behalf of
the State, the Company and YEIDA that the major activity
of land acquisition process is over. It has been noted
2
in Balbir Singh's case that out of the 12,315 affected
farmers in 133 villages over the total area of 1,638
hectares of the Expressway, 11387 have already received
compensation and only 142 farmers out of such a large
number of villages have raised the issues, leaving 139
farmers who had not taken the compensation. This is
apart from the fact that only 9 Writ Petitioners came in
that Writ Petition. The story in Nand Kishore's Writ
Petition which was disposed of by the High Court
alongwith other Writ Petitions is no different. The
learned Counsel appearing on behalf of the appellants
could not deny the fact that the total number of
petitioners concerned in these acquisition proceedings,
coming up before the High Court, was extremely
insignificant as compared to those who had accepted the
compensation. Of course, that by itself may not be the
only reason to hold against the appellants (petitioners),
however, that fact will have to be kept in mind while
deciding the issues which cover the whole acquisition
process, which acquisition is for the purpose of
development of 25 million square meters of land. The
High Court has also noticed this aspect. We have
mentioned this aspect only with a limited objective of
showing that the criticism against the whole scheme which
3
would invalidate the acquisition would be difficult to be
accepted, particularly in this case, in view of the fact
that majority of the land owners have parted with
possession, taken the compensation and thus, the whole
scheme has progressed to a substantial level, wherefrom
it will be extremely difficult now to turn back to square
one.
28. We must point out that at the time when the Project
conceived in 2001, the present Company was not in
existence. It came in existence only later on. This is
an admitted position also. Therefore, it cannot be said
that the whole Project was envisaged keeping this Company
in view. That would be the first reason to reject the
argument that the whole scheme was a result of colourable
exercise of power. We also cannot ignore the fact that a
full-fledged enquiry was got done by the State by
constituting a Commission of Enquiry under the
Chairmanship of Mr. Justice Sidheshwar Narain. The said
Commission of Enquiry submitted its Report in October,
2006 and it was duly accepted by both the Houses of the
Legislature of the State of Uttar Pradesh. Again, we
also cannot ignore that the aspects of the transparency
have been examined by the Division Bench of the Allahabad
3
High Court in a P.I.L., which was dismissed by a well-
considered judgment, which remained unchallenged. We
have already made reference to that judgment. Nobody has
so far argued that any specific partial treatment was
offered to the Company nor has it been pointed out at any
stage that there was anything amiss with the tendering
process or that the tender of contract to the Company
herein was a foregone conclusion. We, therefore, cannot
subscribe to the contention that this acquisition was a
colourable exercise of power. We must say that there was
a full transparency in the whole process and the whole
process was checked, rechecked and re-rechecked, leaving
no scope to infer any bias in favour of the Company.
29. It was pointed out that initially the award was
preceded by issuance of an advertisement in the leading
newspapers throughout the country. It was also pointed
out that the offers were invited on the basis of a global
tender and as many as 19 parties entered the fray, and
that it is only thereafter that the present respondent
Company was chosen for the award of the tender. Again,
the essential features of the transaction appear to be
that (i) Project was to be implemented on the Build
Operate and Transfer model, (ii) Project conceived of the
3
construction of the Expressway as well as development of
land parcels at five different locations and (iii) the
land for development was to be provided to the selected
bidder on a lease of 90 years upon payment of acquisition
cost and necessary lease rentals. There was, thus, a
complete transparency in the whole affair. It is also to
be seen that this was not a case where the exercise of
power of eminent domain by the State was for any of the
purposes set down in Section 40 of the Act. Further, it
is not as if the power of acquisition was exercised by
the State Government for the work or Project of the
Company. Lastly, it is not a case where the power of
exercise was exercised by the State Government so that
the acquired land was to belong or vest permanently in
the Company for its own purpose. It was pointed out that
the lease is going to be for 90 years after which the
whole land is going to revert back to the State
Government, so also the whole land acquired and used
actually for the purpose of the highway would also go
back to the State after the period of 36 years, during
which the Company would have the right to levy and
collect the toll. It is not as if a public purpose is
relevant in Part VII, where under Section 39, the
previous consent of appropriate Government is required
3
for execution of an agreement between the Government and
the Company. Section 40 of the Act then puts a specific
rider that the State Government shall not give the
consent unless it is satisfied of any of the
contingencies described in sub-Sections (a), (aa) and (b)
thereof, which are as under:-
40. Previous enquiry:- (1) Such consent shall not be
given unless the appropriate Government be satisfied,
either on the report of the Collector under Section 5A,
Sub-section (2), or by an enquiry held as hereinafter
provided,-
(a) that the purpose of the acquisition is to obtain
land for the erection of dwelling houses for workmen
employed by the Company or for the provision of amenities
directly connected therewith, or
(aa) that such acquisition is needed for the construction
of some building or work for a Company which is engaged
or is taking steps for engaging itself in any industry or
work which is for a public purpose, or
(b) that such acquisition is needed for the construction
of some work, and that such work is likely to prove
useful to the public.
This would suggest that even when the acquisition is
meant for the Company, the concept of public purpose has
to be at the back of mind of the acquiring body like
Government. Here, of course, there is no question of any
agreement with the Company as the three eventualities
described under Section 40 of the Act are not available
for the simple reason that the basic idea for the
acquisition under Part VII of the Act is the total
3
transfer of the ownership of the acquiring land in favour
of the Company. That is obviously not present here. We
do not see any factual background for holding that any
agreement was contemplated in between the State
Government and the Company or for that matter, YEIDA and
the Company, as envisaged in Sections 39, 40 and 41 of
the Act. It was tried to be canvassed before us that
there would be a difference in concepts of a public
purpose and the work useful to the public. We are not
much impressed by this argument in view of the fact that
there is absolutely no evidence to suggest that this is
an acquisition for the Company, basically on account of
the fact that the acquired land is not to vest with the
Company. This was clearly a Project conceived and
justified by the State Government, while the
concessionaire was to be chosen only to implement the
Project. The Project was going to be implemented on the
basis of principles of BOT. Therefore, after the
operating period is over, the assets of the Project were
to be transferred to the State Government. There was
going to be no vesting of land as in case that if the
acquisition was being effected under Part VII of the Act.
We, therefore, do not accept the argument that this was
either a colourable exercise of power or was meant for
3
the Company. We are not impressed by the argument that
this was an acquisition for the Company. The High Court,
in Balbir Singh's judgment, has correctly come to the
conclusion that this acquisition was not meant only for
the Company and on that count, it could not be said that
this is not for the public purpose. The learned Counsel,
however, vehemently argued that the whole compensation
had come from the Company and, therefore, this
acquisition cannot be said to be for a public purpose.
We shall tackle this point a little later. However,
before we proceed to do that, we must express on the
utility of the Expressway, which was conceived, as also
the development of five parcels of land.
30. During the debate, our attention was invited to
Section 3(f) of the Act, which contains a definition for
`public purpose'. It was pointed out that where the
acquisition is for the Company, it cannot amount to a
public purpose. There can be no dispute about this
proposition that where the acquisition of land is for the
companies, it cannot amount to a public purpose. It was,
therefore, our endeavour to find out whether this land
was for the Company and we are quite satisfied with a
finding recorded by the High Court that this acquisition
3
was not for the Company but was for the public purpose.
The Expressway is a work of immense public importance.
The State gains advantages from the construction of an
Expressway and so does the general public. Creation of a
corridor for fast moving traffic resulting into
curtailing the traveling time, as also the transport of
the goods, would be some factors which speak in favour of
the Project being for the public purpose. Much was
stated about the 25 million square meters of land being
acquired for the five parcels of land. In fact, in our
opinion, as has rightly been commented upon by the High
Court, the creation of the five zones for industry,
residence, amusement etc., would be complimentary to the
creation of the Expressway. It cannot be forgotten that
the creation of land parcels would give impetus to the
industrial development of the State creating more jobs
and helping the economy and thereby helping the general
public. There can be no doubt that the implementation of
the Project would result in coming into existence of five
developed parcels/centers in the State for the use of the
citizens. There shall, thus, be the planned development
of this otherwise industrially backward area. The
creation of these five parcels will certainly help the
maximum utilization of the Expressway and the existence
3
of an Expressway for the fast moving traffic would help
the industrial culture created in the five parcels.
Thus, both will be complimentary to each other and can be
viewed as parts of an integral scheme. Therefore, it
cannot be said that it is not a public purpose.
31. We must, at this stage, take into account the
argument that the whole compensation is coming wholly
from the Company and not from the Government or from
YEIDA. The appellants invited our attention to Clause
4.1(d) of the Concession Agreement. On that basis, it
was argued that the Company has paid the compensation
cost and, therefore, the acquisition is clearly covered
under Part VII of the Act, and there may be no public
purpose if the acquisition is made for the Company and it
is the Company who has to shell out the whole
compensation. Now, this argument is clearly incorrect.
Even if we accept for the sake of argument that all this
compensation is coming from the Company, we must firstly
bear it in mind that the Company gets no proprietary or
ownership rights over the Project assets. Now, if it is
presumed that the compensation is coming from the
Company, then it will have to be held that the whole
assets would go to the Company. At least that is
3
envisaged in Part VII of the Act. Here, that is not the
case. The assets are to revert back to the acquiring
body or, as the case may be, the Government. Even the
lands which are utilized for the construction of the
Expressway are to go back to the Government barely after
36 years i.e. after the Company has utilized its rights
to recover the toll on the Expressway. Secondly, it must
be borne in mind that the Concession Agreement has been
executed in February, 2003, whereas the acquisition
process started somewhere in the month of September,
2007. When the Concession Agreement was executed, the
cost factor was not known. The acquiring body was only
to make available the land to the concessionaire to
implement the Project. There would be number of
difficulties arising, as for example, it would be clearly
not contemplated that the land would be made available
without any value or that there would no scheme for the
State Government for recovering the expenses that it
would incur in obtaining the land. The learned Counsel
appearing for the State as also for the Company and YEIDA
argued that in order to overcome and iron out such
difficulties, the Agreement provides that the land would
be leased on a premium equivalent to the acquisition
cost. This argument proceeds on the basis of Clause 4.3
3
C of the Concession Agreement. It is to be noted then
that the premium of the land was not going to be just the
acquisition cost, but also the lease rent of Rs.100/- per
hectare. Therefore, the State Government was to earn
Rs.100/- per hectare for the total acquired land, which
was about 25 million square meters over and above the
compensation to be decided. The mention of the
compensation amount in addition to the lease money of
Rs.100/- per hectare would clearly provide that the whole
compensation was not going to be paid by the Company
alone. This is apart from the fact that through this
agreement, only the extent of the compensation payable by
the Company to YEIDA was decided. However, once all the
amounts went to the coffers of YEIDA, it would lose its
independent character as a premium. When it goes into
the coffers of YEIDA, it is the YEIDA who would make the
payments of the estimated compensation and thereby it
would be as if the compensation is paid not by the
Company, but by YEIDA. The respondents have relied on
the law laid down in Pratibha Nema's Case [cited supra],
more particularly, paragraphs 24 and 25 therein. The
respondents also argued relying upon the decision in
Naihati Municipality & Ors. Vs. Chinmoyee Mukherjee &
Ors. [1996 (10) SCC 632]. The respondents argued that
4
the law laid down in Pratibha Nema's Case (cited supra)
emanates from the judgment in Naihati Municipality & Ors.
Vs. Chinmoyee Mukherjee & Ors. (cited supra).
32. Two judgments in State of Karnataka & Ors. Vs. All
India Manufacturers Organization & Ors. [cited supra] and
Sooraram Pratap Reddy & Ors. Vs. District Collector,
Ranga Reddy District & Ors. etc. etc. (cited supra) were
pressed in service by the respondents.
33. The first judgment in State of Karnataka & Ors. Vs.
All India Manufacturers Organization & Ors. (cited supra)
pertain to Bangalore-Mysore Infrastructure Corridor
Project). While considering what the public purpose was,
this Court in paragraphs 76, 77, 78 and 79 took stock of
the contention, whereby it was suggested that land far
away from the actual alignment of the road and periphery
had been acquired and, therefore, even if the
implementation of the highway Project was assumed to be
for the public purpose, the acquisition of the land far
away therefrom would not amount to a public purpose nor
would it be covered by the provisions of the Karnataka
Industrial Areas Development Act, 1966 (KIAD Act). In
the present case also, it was argued that the lands which
are being acquired for the interchange would not at all
4
be necessary. Further, it was argued that the five
parcels of land which is being acquired for the
development of five industrial townships, could not be
said for the public purpose nor could it be said to be a
part of the present integrated scheme. This Court had
refuted this argument holding that even in case of
Bangalore-Mysore highway Project, the lands even little
away from the main alignment of the road, had to be a
part of this Project and the Project was an integrated
infrastructure development Project and not merely a
highway Project. It was conceived originally as the
Bangalore-Mysore Infrastructure Corridor Project, which
conceived of the development of roads between Bangalore
and Mysore, for which there were several interchanges in
and around the periphery of the city of Bangalore,
together with numerous developmental infrastructure
activities alongwith the highway at several points. The
situation is no different in the present case.
Therefore, the contention that this acquisition was not
for public purpose, is rejected.
34. In Sooraram Pratap Reddy & Ors. Vs. District
Collector, Ranga Reddy District & Ors. etc. etc. (cited
supra), same question cropped up which has been mentioned
4
in Paragraphs 9, 10 and 11 of the judgment suggesting
that there was no public purpose and in fact, it was an
acquisition for a private Company under Part VII of the
Act and, therefore, the power of eminent domain would
have no application to such case. The contentions raised
in that judgment in paragraphs 16, 17 and 18 are almost
similar to the contentions raised herein. The Court has
extensively dealt with the question of public purpose in
paragraph 66 and has taken stock of practically all the
cases till paragraph 109 therein. It will not be
necessary for us to repeat all the case law and the
questions raised and considered in these paragraphs, such
as industrial policy of the State, acquisition for
Company etc. In fact, while considering the contention
regarding the industrial policy of the State, the Court
has taken into consideration the oft-quoted case of
Dhampur Sugar (Kashipur) Ltd. Vs. State of Uttaranchal &
Ors. [2007 (8) SCC 418], where this Court has come to the
conclusion that in the absence of illegality or violation
of law, a Court of law will not interfere in the policy
matters. Similar is the case here, where the development
of the industrial infrastructure along the Expressway for
the overall betterment of the region and further for the
industrialization of the otherwise backward region of
4
Uttar Pradesh, was considered as a policy. In this
judgment again, the Court has extensively considered the
question as to whether and under what circumstances, the
acquisition could be said to be the acquisition for the
Company. In that, the Court has also considered the
decision in Babu Barkya Thakur Vs. State of Bombay [AIR
1960 SC 1203]. The Court quoted the observations in the
aforementioned decision in Babu Barkya Thakur Vs. State
of Bombay (cited supra) to the following effect:-
"These requirements indicate that the
acquisition for a Company also is in substance
for a public purpose inasmuch as it cannot be
seriously contended that constructing dwelling
houses, and providing amenities for the benefit
of the workmen employed by it and construction
of some work of public utility do not serve a
public purpose."
We have already considered this question that in the
present case, there is nothing to indicate that the
acquisition is for the Company i.e. for Jaiprakash
Industries Ltd. It is only, therefore, that we are at
pains to point out that the Government was only using the
Company for implementing its policy.
35. In the aforementioned judgment of Sooraram Pratap
Reddy & Ors. Vs. District Collector, Ranga Reddy District
& Ors. etc. etc. (cited supra), Hon'ble Thakker, J. has
also referred to the decision in Pandit Jhandu Lal Vs.
4
State of Punjab [AIR 1961 SC 343], where the acquisition
was for construction of houses by members of Thapar
Industries Cooperative Housing Society Ltd., Yamuna
Nagar. The challenge was that there was non-compliance
of the provisions of Part VII of the Act, though the
acquisition was for the Company under Part VII of the
Act. The High Court, in that case, held that the
acquisition was for a public purpose and there was no
need to comply with the provisions of Part VII of the
Act. In fact, practically all the decisions on the
subject of acquisition for the Company and public purpose
have been considered in this judgment of Sooraram Pratap
Reddy & Ors. Vs. District Collector, Ranga Reddy District
& Ors. etc. etc. (cited supra), which itself is a locus
classicus. Ultimately, this Court came to the conclusion
that the acquisition made by the State of Andhra Pradesh
could not be faulted, as it was in pursuance of policy
decision for development of the city of Hyderabad and in
pursuance of that policy, an integrated Project was taken
up for development of the city of Hyderabad into a
business-cum-leisure tourism infrastructure centre. The
Court also came to the conclusion that the Andhra Pradesh
Infrastructure and Investment Corporation (APIIC) in the
reported decision was a nodal agency like YEIDA in the
4
present case which was to generate the revenue and help
the development of infrastructure for industrialization
of the area. The Court also recognized that such
instrumentality of State would have the power of eminent
domain. Like the present case, the Court held the
Project to be an integrated and indivisible Project. We
have no doubt that in the present case also, the
Expressway as well as the five parcels which are to be
developed are part of an integrated and indivisible
Project. In the reported judgment of Sooraram Pratap
Reddy & Ors. Vs. District Collector, Ranga Reddy District
& Ors. etc. etc. (cited supra), it has also been found
that the entire amount of the compensation was to be paid
by the State agency APIIC, just like in the present case,
where the entire amount is to be paid by YEIDA, which
agency is working as a nodal agency for the execution of
the Project. The Court has also found that where the
power of eminent domain is exercised mala fide or for
collateral purposes and de hors the Act or in an
irrational or unreasonable manner or when the purpose is
`no public purpose' and the fraud on statute is apparent,
a Writ Court can undoubtedly interfere. It has been
found very specifically here that the present matter is
not suffering from the above defects. In this judgment,
4
the subject of eminent domain has been discussed and
considered with thoroughness and all the ramifications of
the principle of eminent domain have been discussed. We
have already culled out the principles emanating from
this decision in the earlier part of this judgment and
even at the cost of repetition, we may say that this
judgment is practically, the law setter on the subject of
eminent domain, as also on the other allied subjects of
acquisition. The judgment has also explained the concept
of `public purpose', which has been held to be wider than
`public necessity'. The judgment proceeds on a basis
that merely because the benefit goes to a particular
section of the society, the acquisition does not cease to
be for the public purpose. It has been specifically held
that where the State is satisfied about the existence of
a public purpose, the acquisition would be governed by
Part II of the Act, as has happened in the present
matter. The judgment in Sooraram Pratap Reddy & Ors. Vs.
District Collector, Ranga Reddy District & Ors. etc. etc.
(cited supra) is an authoritative pronouncement on the
mode of payment, as also on the construction of Sections
40 and 41 of the Act. In fact, this judgment is a
complete answer to the argument of the appellants that
this acquisition is not for public purpose.
4
36. The respondents then fall back upon the nature of
the transaction, saying that since the whole transaction
is on the BOT basis, the Government has merely chosen a
third party agency to implement the Project instead of
taking up itself the task of building, designing,
financing or running the Project. It was pointed out
that in such contracts, the assets did not go to the
private enterprise which was chosen by the Government.
On the other hand, the assets revert to the Government
and, therefore, the BOT Project can never be akin to the
acquisition of land for a Company under Part VII of the
Act, where the land and the assets vest and belong to the
Company. The respondents argued that when a BOT contract
is tested in the light of the provisions of Part VII of
the Act, as also the Land Acquisition (Companies) Rules,
1963, it would come out that there has to be an agreement
between the State and the Company, which necessarily
provides for the payment of cost of acquisition to the
Government. It must entail the transfer of such land to
the Company. Similarly, under Rule 5 of the Rules of
1963, the agreement must itself make provision that the
land will be utilized only for the purposes for which it
was acquired and if the Company commits breach of any
condition of the agreement, the Government would be
4
entitled to declare the transfer of land to it to be null
and void, so also if the Company fails to utilize the
entire land acquired, the unutilized portion would revert
to the Government. The respondents argued that in a BOT
contract, the land is only leased to a third party agency
for the purposes of implementation of the Project. There
is no occasion for declaring the transfer of land to be
null and void. There would also be no occasion for
reversion of the utilized land of the State Government.
The respondents, therefore, argued that a BOT contract
can never be contemplated as falling under Part VII of
the Act.
37. Some other decisions which were pressed in service
by the appellants are Smt. Somavanti & Ors. Vs. The State
of Punjab & Ors. [AIR 1963 SC 151], more particularly,
the observations in paragraph 40 therein, where the
Constitution Bench of this Court observed that if the
purpose of acquisition is not related 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 on it by the
Act. We have already discussed the factual situation
here for pointing out that this acquisition was indeed
4
for the public purpose and cannot be held to be for
respondent Company. In that view, the criticism is not
justified. The decision in Pandit Jhandu Lal Vs. State
of Punjab (cited supra) was also referred to and, more
particularly, the observations in Paragraph 8 therein.
There can be no dispute about the principles laid down;
however, as we have already pointed out, this case has
been thoroughly considered in Sooraram Pratap Reddy &
Ors. Vs. District Collector, Ranga Reddy District & Ors.
etc. etc. (cited supra). We have already returned a
finding that the compensation in this case does not come
from the respondent Company alone. We approve of the
finding returned by the High Court in that behalf.
During the debate, the decision in Devinder Singh & Ors.
Vs. State of Punjab & Ors. [2008(1) SCC 728] was also
referred to. It was urged that there was a conflict in
this decision and the decision in Pratibha Nema's Case
(cited supra). This was a case where the petitioners who
were the owner of the agricultural lands, had challenged
the acquisition of lands for M/s. International Tractors
Ltd. It was claimed that the land was being acquired for
public purpose i.e. setting up the Ganesha Project of
M/s. International Tractors Ltd. at various villages.
The High Court had held that the land acquisition was for
5
public purpose. This Court explained the public purpose
as defined in Section 3(f) of the Act and noted that the
aforementioned Ganesha Project was not a Project of the
State, but the one undertaken by the Company M/s.
International Tractors Ltd. The Court then went on to
consider Sections 40 and 41 of the Act alongwith Rule 4
of the Land Acquisition (Companies) Rules, 1963 and came
to the conclusion that the same could not be a public
purpose as the whole compensation was coming from the
coffers of the Company. In that view, the Court further
came to the conclusion that the State not having followed
the provisions of Sections 40 and 41 of the Act, the
whole process had suffered illegality. The Court also
considered the decision in Pratibha Nema's Case (cited
supra) and distinguished the same by making a comment to
the following effect:-
"But we must hasten to add that the Bench did
not have any occasion to consider the question
as to whether the State is entitled to take
recourse to the provisions of both Part II and
Part VII of the Act simultaneously."
The Court, however, refused to go into the nicety of the
question and observed that in a case of acquisition for a
public Company, public purpose is not to be assumed and
the point of distinction between acquisition of lands
5
under Part II and Part VII of the Act would be the source
of funds to cover the cost of acquisition. The Court
also considered the judgment of this Court in Smt.
Somavanti & Ors. Vs. The State of Punjab & Ors. (cited
supra), Jage Ram & Ors. Vs. State of Haryana & Ors. [1971
(1) SCC 671] and Shyam Behari & Ors. Vs. State of Madhya
Pradesh & Ors. [AIR 1965 SC 427]. Ultimately, the Court
came to the conclusion that the necessary provisions not
having been found, the view of the High Court was not
correct, whereby it had upheld the land acquisition,
holding it to be for the public purpose. We have closely
seen the judgment; however, the factual situation in the
judgment is quite different. In our opinion, the
judgment will not help the appellants to contend that the
present land acquisition is not for public purpose. We
also do not think that there is any serious conflict
between the decision in Pratibha Nema's Case (cited
supra) and the decision in Devinder Singh & Ors. Vs.
State of Punjab & Ors. (cited supra), so as to require a
reference to the larger Bench. In our opinion, the
decision in Pratibha Nema's Case (cited supra) applies to
the fact situation in this case. Therefore, considering
the overall factual situation, we are of the opinion that
the High Court was right in holding that the acquisition
5
was made for the public purpose. We find from the order
of the High Court that the High Court has considered the
question of public purpose keeping in mind the correct
principles of law. We are, therefore, of the opinion
that the contention raised by the learned Counsel for the
appellants that this acquisition was not for the public
purpose for various reasons which we have discussed, is
not correct.
38. This takes us to the next point pertaining to the
application of Sections 17(1) and 17(4) of the Act. The
learned Counsel for the appellants have vociferously
urged that there was no necessity whatsoever to apply the
urgency clause to these acquisitions and further to avoid
the enquiry under Section 5A of the Act. According to
the learned Counsel, this dispensation of Section 5A
enquiry was not only unjust, but added to the sufferings
of the appellants who had lost their fertile land. It
was pointed out that this Project was slumbering since
2001 and it was in order to infuse fictitious urgency
that a reference to the Commonwealth Games was made.
According to the appellants, Right to be heard was akin
to the Fundamental Rights and its breach has rendered the
whole acquisition exercise illegal. Numbers of
5
authorities were relied upon by the appellants. The
respondents, on the other hand, argued that there was
material available before the Government justifying the
invocation of the urgency clause. The respondents argued
that, in fact, the High Court has returned the finding
that there was material before the State Government for
dispensing with the enquiry under Section 5A of the Act
and that finding was based on the examination by the High
Court of the records of the State Government. It was
pointed out that going through the ordinary procedure for
acquisition of land would have taken years for disposal
of the objections while land was urgently required for
public purpose, in this case, the construction of
interchange under the Yamuna Expressway Project, which
was absolutely essential for the purposes of running the
highway. It was also pointed out by the respondents that
because of the unnecessary litigation in the enquiries,
the Project was hopelessly delayed and the cost had gone
up from Rs.1,700 crores to whopping Rs.9,700 crores. It
was also further pointed out that any waste of time would
have invited the encroachments on the land, which would
have added to the further trouble. The enormousness of
the Project which required acquisition of 1,604 hectares
of land involving 12,283 farmers, would have taken years
5
if the enquiry under Section 5A was permitted and
thereby, the cost would have still further soared up.
Numbers of authorities were relied upon by the parties.
39. Before considering the issue, we must take stock of
the finding returned by the High Court. In the judgment
in Nand Kishore Gupta & Ors. Vs. State of U.P. & Ors.
(Civil Misc. Writ Petition No.31314 of 2009), the High
Court took stock of the allegations regarding malafides
and dispensing with the enquiry under Section 5A of the
Act by referring to Paragraph Nos. 20, 21, 28, 29, 30, 31
and 32 of the Reply filed on behalf of the State
Government through an affidavit of one Shri Vinod Kumar
Singh, ADM, Land Acquisition, Agra, wherein it was
pointed out that the Project was on the mammoth scale and
there was a great deal of possibility of encroachments if
the Project was allowed to linger. The High Court took
note of the contention that YEIDA deposited 70% of the
estimated compensation on 29.5.2009 itself, since 10% of
the estimated compensation was already deposited by the
acquiring body (YEIDA). The High Court then referred to
the various clauses of the Concession Agreement like
Clause Nos. 2.1, 2.2, 3.1, 3.2, 3.6 and 4.1 (a), (b), (c)
& (d) to know about the exact nature of the job which was
5
required to be done for building the Expressway. It was
after this that the High Court had recorded a finding
that the integrated Project was to cover a large area of
land and the requirement was of 25 million square meters
of land to be acquired. The High Court, therefore, noted
the plea raised to the effect that the State Government
took correct decision to invoke the urgency clause, as on
an enquiry into disposal of individual objections as
contemplated under Section 5A of the Act, the Project
itself would have lost all value and efficacy. The High
Court also noted the plea raised by YEIDA and the State
Government about the likelihood of encroachment. The
High Court then referred to the two decisions of this
Court in Sheikhar Hotels Gulmohar Enclave & Anr. Vs.
State of Uttar Pradesh & Ors. [2008(14) SCC 716] and
First Land Acquisition Collector & Ors. Vs. Nirodhi
Prakash Gangoli & Anr. [2002 (4) SCC 160]. The High
Court also referred to the counter affidavit of one Shri
V.C. Srivastava, Addl. General Manager, Jaypee Infratech
Ltd. (owned by Jaiprakash Industries Ltd.). The High
Court then took stock of the plea raised on behalf of the
respondents on the basis of more than 25 judgments of
this Court. The High Court then referred to the decision
of this Court in State of Punjab & Anr. Vs. Gurdial Singh
5
& Ors. [1980 (2) SCC 471] and Om Prakash & Anr. Vs. State
of U.P. & Ors. [1998 (6) SCC 1], as also Babu Ram & Anr.
Vs. State of Haryana & Anr. [2009 (10) SCC 115]. The
High Court also referred to the decision in Manju Lata
Agrawal Vs. State of U.P. & Ors. [2007(9) ADJ 447 (DB)],
Sudhir Chandra Agrawal Vs. State of U.P. [2008 (3) ADJ
289 (DB)] and Munshi Singh Vs. State of U.P. [2009 (8)
ADJ 360 (DB)], which all were the decisions of the
Allahabad High Court itself. The Court then referred to
the delay on account of the litigations from 2001 till
2008 and referred to the contention raised on behalf of
the appellants relying on the judgment in Essco Fabs Pvt.
Ltd. & Anr. Vs. State of Haryana & Anr. etc. etc. [2009
(2) SCC 377], Mahender Pal & Ors. Vs. State of Haryana &
Ors. [2009 (14) SCC 281] and Babu Ram & Anr. Vs. State of
Haryana & Anr. (cited supra). It then recorded a finding
in the following words:-
"In order to verify whether there was any material with
the State Government to form an opinion and to exercise
its powers under Section 17(1) and Section 17(4) of the
Act, dispensing with enquiry under Section 5A of the Act,
and that the State Government had applied its mind on such
material, we summoned the records of the three concerned
notifications. Shri Satish Chaturvedi, Addl. Advocate
General assisted by Shri M.C. Tripathi, Addl. Chief
Standing Counsel has produced the records alongwith the
material collected by the Collectors/District Magistrate
and placed before the State Government for forming an
opinion. He has taken us through the various documents and
5
forms on which the Collectors have recommended on Forms X
alongwith justification of their recommendations as well
as its summary given in the office note placed before the
State Government. The three files produced before us
relate to village Kuberpur, district Agra, village Malupur
Pargana Atmadpur, district Agra and village Tappal
district Aligarh for construction of interchange.
The notification under Section 4(1)/17 of the Act for
proposing acquisition of land of village Kuberpur was made
on 20.2.2009 and was published in two newspapers 'Amar
Ujala' and 'Dainik Jagran' on 27.7.2009. The munadi was
made on 7.3.2009. The notification under Section 6(1)/17
was issued on 15.6.2009 and was published in the two
newspapers on 18.6.2009. The notice under Section 9 was
sent on 20.6.2009 and possession was taken on 8.7.2009. In
the recommendation sent by the District Magistrate,
considered by the State Government on 11.2.2009 before
publication of notification under Section 4, the District
Magistrate had after giving details of land proposed to be
acquired, had forwarded the Form-X alongwith justification
referred to in para 3 of the noting of the State
Government. The Collector, Agra recommended that in order
to acquire the land for Y.E.I.D.A. established under the
U.P. Industrial Area Development Act, 1976 the preparation
of plan, identification of land for units for industrial
development, infrastructural facilities, the lease or sale
of the land, the construction of building and for
industrial units. Y.E.I.D.A. has been given the regulating
powers. The village Kuberpur is in the notified area of
Y.E.I.D.A. and which urgently requires the proposed land
for construction of interchange' for Y.E.I.D.A. In case of
any delay there is a strong possibility of encroachment on
the land, which will affect the Project of Y.E.I.D.A. in
public interest. In para 4 it was stated that hearing of
oral and written objections will take several years
causing indefinite delay in construction of interchange.
The proposal was forwarded with recommendation signed by
the Under Secretary, Industrial Development, Government of
U.P., Special Secretary, Industrial Development ; Shri
Arun Kumar Sinha, Secretary, Rehabilitation and Industrial
Development Department; Government of U.P.; Shri V.N.
Garg, Principal Secretary, Rehabilitation and Development,
Government of U.P. on 12.2.2009 and by Shri Shailesh
Krishna, the Principal Secretary to Chief Minister on
18.2.2009.
5
As regard the acquisition of land for Y.E.I.D.A. for
interchange in village Malupur for construction of Yamuna
Expressway, Pargana Atmadpur, district Agra for
acquisition of 4.5322 hects. of land the proposal with
recommendation of District Magistrate, Agra on Form-X and
the justification similar to and in the same language as
in the case of village Kuberpur, district Agra was placed
before the State Government alongwith the notings. The
proposal bears recommendations and signature of Under
Secretary, Industrial Development Department, Government
of U.P. on 23.10.2008 ; Special Secretary, Industrial
Development, Government of U.P. on 24.10.2008; Principal
Secretary, Industrial Development and Commissioner on
30.11.2008 ; Special Secretary, Industrial Development on
10.12.2008 and the Secretary to Chief Minister on
15.12.2008.
For village Tappal in Tehsil Khair, district Aligarh
proposal for acquisition of 48.572 hect. of land for
Y.E.I.D.A. for construction of Yamuna Expressway with the
recommendation of the District Magistrate and
justification for invoking urgency clause was placed
before the State Government and was recommended and signed
by the Under Secretary and Special Secretary, Industrial
Development Department on 16.1.2009 ; Secretary,
Rehabilitation and Industrial Development, Department of
Government of U.P. on 16.1.2009 ; Principal Secretary,
Industrial Development on 16.1.2009 and by the Secretary
to the Chief Minister on the same day on 16.1.2009. The
proposals were accepted by the State Government for
acquisition and for invoking urgency clause for
construction of Yamuna Expressway by Y.E.I.D.A."
Ultimately, the High Court wrote a finding in the
following words:-
"The record produced before us by the State Government
enclosing the material of invoking urgency clause and the
satisfaction of the State Government on the said material,
has satisfied us that the State Government had sufficient
material and had applied its mind to record its opinion
that there was urgency to acquire the land to dispense
with the enquiry under Section 5A of the Act."
5
We have deliberately quoted the above part of the
High Court judgment only to show the meticulous care
taken by the High Court in examining as to whether there
was material before the State Government to dispense with
the enquiry under Section 5A of the Act. We are
completely convinced that there was necessity in this
Project considering the various reasons like enormousness
of the Project, likelihood of the encroachments, number
of appellants who would have required to be heard and the
time taken for that purpose, and the fact that the
Project had lingered already from 2001 till 2008. We do
not see any reason why we should take a different view
than what is taken by the High Court. The law on this
subject was thoroughly discussed in Tika Ram & Ors. etc.
etc. Vs. State of U.P. & Ors. etc. etc. [2009 (10) SCC
689], to which one of us (V.S. Sirpurkar) was a party.
In that decision also, we had reiterated that the
satisfaction required on the part of Executive in
dispensing with the enquiry under Section 5A is a matter
subject to satisfaction and can be assailed only on the
ground that there was no sufficient material to dispense
with the enquiry or that the order suffered from malice.
It was also found on facts in Tika Ram & Ors. etc. etc.
Vs. State of U.P. & Ors. etc. etc. (cited supra) that
6
there was no charge of malafide levelled against the
exercise of power and there was material available in
support of the satisfaction on the part of the Executive
justifying the invocation of the provisions of Section
17. The position is no different in the present case.
The High Court in the present matter went a step ahead
and examined the bulky original record itself to find
that there was full material available.
40. We are not impressed by the argument that the
encroachment issue was not a relevant factor. This
argument was based on the reported decision in Om Prakash
& Anr. Vs. State of U.P. & Ors. (cited supra). It must
be said that the actual scenario in that case was
different. In that case, the Court was considering the
acquisition of area of about 500 acres comprising of 437
plots, whereas, in the present case, the area to be
acquired for the Expressway alone was more than 1,600
hectares. This is apart from the 25 million square
meters of land which was liable to be acquired for the
purposes of development of 5 land parcels. There was
interlinking between the acquisition of land for the
highway and the acquisition of land for establishing the
5 townships. In Om Prakash & Anr. Vs. State of U.P. &
6
Ors. (cited supra), there was unexplained delay after
issuance of Section 4 notification, which is not the case
here. Therefore, we do not think that what has been said
in Om Prakash & Anr. Vs. State of U.P. & Ors. (cited
supra) would be apposite here. Every case has to be
decided on its own facts. This is apart from the fact
that it is not specifically laid down in Om Prakash &
Anr. Vs. State of U.P. & Ors. (cited supra) that the
encroachment was never a relevant factor for dispensing
with the enquiry under Section 5A. Again we hasten to
add that this was not the only factor considered by the
State Government and even the High Court has not held the
same to be the only factor for dispensing with the
enquiry.
41. In view of the law laid down in the last judgment on
this issue i.e. Tika Ram & Ors. etc. etc. Vs. State of
U.P. & Ors. etc. etc. (cited supra), we are of the clear
opinion that the challenge by the appellants on the
ground that there was no urgency and, therefore, the
enquiry under Section 5-A of the Act should not have been
dispensed with, cannot be accepted. We hold accordingly.
42. No other point was canvassed before us.
6
43. There is no merit in the appeals. They are
dismissed. The two impugned judgments of the High Court
i.e. Civil Misc. Writ Petition No. 48978 of 2008 (Balbir
Singh & Anr. Vs. State of U.P. & Ors.) decided on
5.10.2009 and Civil Misc. Writ Petition No. 31314 of 2009
(Nand Kishore Gupta & Ors. Vs. State of U.P. & Ors.)
decided on 30.11.2009 are confirmed. There shall be no
costs.
............................J.
[V.S. Sirpurkar]
.............................J.
[Cyriac Joseph]
New Delhi;
September 8, 2010
6
Thursday, September 16, 2010
Nand Kishore Gupta & Ors V/S State of U.P. & Ors.(Arising out of SLP (C) No. 33194 of 2009) September 8, 2010
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