WP(C) 2948/2007 Page No.1 of 38 THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 09.08.2010 + WP(C) 2948/2007 ADIL SINGH ... Petitioner – versus – UOI & ORS ... Respondents Advocates who appeared in this case:- For the Petitioner : Mr Ajoy B. Kalia For the Respondent No.1 : Mr A. S. Chandhiok, ASG with Mr Sachin Datta, Ms Vibha Dhawan and Ms Madhu Panjwani For the Respondent No.2 : Mr Tarun Johri For the Respondent Nos.3-4 : Mr Chetan Sharma, Sr Advocate with Mr Ajit Singh For the Respondent No.5 : Mr Samit Khosla CORAM:- HON’BLE MR JUSTICE BADAR DURREZ AHMED HON’BLE MS JUSTICE VEENA BIRBAL 1. Whether Reporters of local papers may be allowed to see the judgment ? 2. To be referred to the Reporter or not ? 3. Whether the judgment should be reported in Digest ? BADAR DURREZ AHMED, J 1. The main question which arises for consideration in this writ petition is – whether the erstwhile owners of land, which was acquired for one particular public purpose but was not fully utilized for such purpose, can claim that the unused land be returned to them? 2. In the present case, the petitioner was the 50% owner of the perpetual leasehold rights in plot No. 2, Block No. 125 also known as 8 Jantar Mantar Road, admeasuring approximately 10,800 sq. mts. By a notification dated 31.03.2000 issued under Section 4(1) of the Land Acquisition Act, 1894 WP(C) 2948/2007 Page No.2 of 38 (hereinafter referred to as the „said Act‟) it was notified that the aforesaid 10,800 sq. mts. of land compromised in the said property was likely to be required to be taken by the Government at public expense for the public purpose of “traffic integration and intake shaft for underground metro at Patel Chowk, MRTS Station” and that the leasehold rights of land in the said property was likely to be acquired for the said purpose. The said notification also indicated that the Lieutenant Governor, Delhi was satisfied that the provisions of Section 17(1) of the said Act were applicable to the land in question and was further pleased to direct under Section 17(4) of the said Act that all the provisions of Section 5A of the said Act would not apply. 3. Thereafter, the declaration under Section 6 of the said Act was notified on 23.05.2000. In July, 2000 the petitioner herein along with the respondents 3 and 4 (who were co-owners) filed a writ petition being WP(C) 1850/2000 in this Court, challenging the said notifications. The main point of challenge was the invocation of Section 17 and the doing away with the provisions of Section 5A of the said Act. It is an admitted position that WP(C) 1850/2000 was sought to be withdrawn without any condition or liberty and the same was dismissed as withdrawn, as such, on 21.09.2000. Possession of the said land was taken by Delhi Metro Rail Corporation (DMRC) (respondent No. 2 herein) on 03.10.2000. The Land Acquisition Collector made his Award No. 13/2001-02 in respect of the said acquisition and directed the payment of compensation to the owners of the said land to the extent of Rs 27.86 crores. The petitioner along with the other co-owners, being dissatisfied with the amount of compensation WP(C) 2948/2007 Page No.3 of 38 awarded, filed reference petitions under Section 18 of the said Act for enhancement of compensation. Those references are yet to be decided. 4. In the meanwhile, on 02.04.2007, DMRC took out a tender notice which carried the heading – “Opportunity to Build & Operate Five Star Hotel in the Heart of Delhi – property development at 8, Jantar Mantar near Patel Chowk MRTS Station”. The tender notice stated that as a part of its ongoing efforts to generate resources for part financing the MRTS project, through property development, DMRC has identified a parcel of land at 8, Jantar Mantar adjacent to Patel Chowk MRTS Station measuring 10,800 sq. mts. (approximately) for commercial development as a five star / business hotel. Sealed bids/ tenders were invited from eligible developers or interested bidders for property development at 8, Jantar Mantar on concession basis for a period of 30 years. It was also indicated that the selected concessionaire would construct, operate and maintain a five star/ business hotel for the concession period of 30 years. The application procedure was that the interested and eligible applicants could obtain the “request for proposal” (RFP) document on payment of a non-refundable fee of Rs 10,000/- by demand draft/ pay order drawn on any scheduled commercial bank. The sale of the RFP document was to begin on 02.04.2007 and end on 25.04.2007. The last date for submission of queries in writing was to be 11.04.2007 and the pre-bid meeting was to be held on 10.04.2010. The last date for submission of completed and duly filled RFP document was 26.04.2007 at 1500 hrs IST and the technical bids were to be opened on 26.04.2007 at 1530 Hrs IST. WP(C) 2948/2007 Page No.4 of 38 5. The RFP document gave the details of the site in paragraph 1.3 thereof. Paragraph 1.3.1 of the said document indicates that the site is located at 8, Jantar Mantar, near Patel Chowk Metro Station. It is further stated that the site, flanked by the prominent metro stations of Rajiv Chowk and Central Secretariat, is close to the business hub at Connaught Place. Paragraph 1.3.2 of the RFP document further reveals that the site is located in the heart of the city and that the total area of the plot is 10,800 sq. mts. and the area identified for property development is 8386.6 sq. mts. 6. In paragraph 1.3.13 of the RFP document it is further indicated that the plot of land had been handed over to DMRC on 14.08.2003 and that, earlier, the property was a private property called 8, Jantar Mantar. It is further stated that the Government of National Capital Territory of Delhi had issued a general letter permitting DMRC to carry out property development in all lands allotted to it. It is also revealed that in terms of the approval letter dated 21.07.2003, DMRC had been permitted by the Ministry of Urban Development, Government of India to raise funds for phase-I of the Delhi Mass Rapid Transit System by undertaking property development in respect of the allotted lands. 7. Paragraph 1.3.22 of the RFP document sets out a table indicating the development parameters which needed to be followed by the bidders. In this table the extent of land acquired under the said Act was shown to be 10,800 sq. mts. and the total site area excluding existing structures on the WP(C) 2948/2007 Page No.5 of 38 surface was indicated to be 8386.6 sq. mts. This was the area available for property development. 8. According to the petitioner, the aforesaid tender notice and the RFP document clearly indicate that though the land acquired was to the extent of 10800 sq. mts. approximately, DMRC had used only 2413.4 sq. mts. for the purpose of traffic integration and intake shaft for underground metro at Patel Chowk, MRTS Station which was the avowed public purpose behind the acquisition. In other words, land to the extent of 8386.6 sq. mts. was not utilized for the said public purpose. 9. After the said tender notice dated 02.04.2007 was published in the newspapers, the petitioner filed the present writ petition, inter alia, seeking the quashing of the tender notice dated 02.04.2007 as also the letter dated 21.07.2003 whereby DMRC was permitted to commercially develop the property. A prayer was also made for quashing of the Section 4 notification under the said Act and the acquisition proceedings pursuant thereto relating to the unused area of 8386.6 sq. mts. A prayer has also been made for the issuance of a writ of mandamus directing DMRC (respondent No. 2) to handover physical possession of the unused portion of land measuring 4193.3 sq. mts. (being the 50% share of the petitioner in the unused land measuring 8386.6 sq. mts.) to the petitioner. An alternative prayer was also made that DMRC (respondent No.2) be directed to enter into the proposed concession agreement as indicated in the tender notice with the petitioner. WP(C) 2948/2007 Page No.6 of 38 10. Subsequent to the filing of the said writ petition and during its pendency, the proposal for the said five star hotel being established on the land in question was dropped by DMRC. The plea of the petitioner now is that only a small portion of land (approximately 2413.4 sq. mts.) was actually required by DMRC yet the entire land measuring 10800 sq. mts. was acquired from the petitioner and the other co-owners by the respondents 1 and 2 with the intent to defraud and cheat them by depriving them of their residential house with the object of commercially exploiting the same with private entrepreneurs and to earn huge profits. It was contended on behalf of the petitioner that the Union of India and DMRC had committed a fraud and breach of trust and had misrepresented to the petitioner and the other co-owners that the property in question was required for a public purpose when the actual intention was to use the same for a commercial purpose. It was also contended that land could be acquired under the said Act only for a public purpose and if land is acquired for reasons which do not fall within the ambit of a public purpose, the acquisition would, to that extent be void. Consequently, since land to the extent of 8386.6 sq. mts. was admittedly available for development as indicated in the said tender notice, land to that extent was not utilized for the public purpose for which it was said to have been acquired. Therefore, it was contended that the said land measuring 8386.6 sq. mts. be returned to the petitioner and the co-owners. An offer was also made by the petitioner that it was willing to buy-back the said land at the rate of compensation awarded by the Land Acquisition Collector. It was also contended on behalf of the petitioner that in terms of Section 40 of WP(C) 2948/2007 Page No.7 of 38 the said Act land cannot be acquired for a company unless and until any one of the conditions given in the said Section are met. In this context, it was submitted that in the present case, none of the conditions specified in Section 40 have been satisfied and, therefore, the acquisition in respect of the unused 8386.6 sq. mts. of land was clearly bad and the property was liable to be returned to the petitioner and the co-owners. The learned counsel for the petitioner placed reliance on the following decisions:- (1) State of Punjab & Anr v. Gurdial Singh & Ors: (1980) 2 SCC 471; (2) Vyalikaval Housebuilding Coop. Society v. V. Chandrappa & Ors : (2007) 9 SCC 304; (3) Collector (District Magistrate) Allahabad & Anr v. Raja Ram Jaiswal: (1985) 3 SCC 1; (4) Essco Fabs Private Limited and Ors v. State of Haryana and Anr: (2009) 2 SCC 377; and (5) Hindustan Petroleum Corporation Ltd v. Darius Shapur Chenai and Ors: (2005) 7 SCC 627. These decisions were cited by the learned counsel for the petitioner in support of the propositions that if there is a fraud on power, the order passed in exercise of the power would be vitiated. In the context of land acquisition, a fraudulent exercise of power would vitiate the acquisition. It was also contended that public purpose cannot be used as a cloak for private satisfaction and that an acquisition, if it is tainted, cannot be validated even if there was delay in approaching the court or acquiescence on the part of the owners. It was also contended that power conferred for a particular purpose can be exercised only for that purpose and none other. In other words, it was submitted that where the acquisition was for a particular WP(C) 2948/2007 Page No.8 of 38 purpose, the exercise of power for acquisition would be valid only to the extent of the said purpose. The acquisition would be invalid in respect of any other purpose. It was also contended that the existence of a public purpose was an essential condition for acquisition of land. This was, of course, coupled with the other requirement that when land is acquired, the erstwhile owner is reasonably compensated for the same. It was also submitted that the State is not the sole judge of what is or what is not a public purpose and the determination of public purpose is always subject to judicial review. 11. On the other hand, the learned counsel appearing on behalf of DMRC submitted, in the first instance, that the petitioner cannot be allowed to re-agitate an issue which he had willfully given up. This submission was made in the context of the earlier writ petition [WP(C) 1850/2007] which was dismissed as withdrawn on 21.09.2000 and no liberty was granted to the petitioner to file any other writ petition or proceeding. It was contended that the allegations contained in the earlier writ petition were almost the same as those in the present writ petition. There were allegations that DMRC intended to construct a multi-storied commercial complex in the property and that the government actually intends to exploit the property for commercial purpose. It was also alleged in the earlier writ petition that there was no public purpose behind the acquisition and it was only for raising revenues. Allegations of colourbale exercise of power as well as mala fides had also been levelled in that writ petition. It was thus contended by the learned counsel for the respondent No. 2 (DMRC) that the earlier writ WP(C) 2948/2007 Page No.9 of 38 petition was not only directed against the order under Section 17 of the said Act and the doing away with the applicability of the provisions of Section 5A of the said Act but was also against the alleged colourable exercise of power, which is the very same plea taken in the present writ petition. It is in this background that the learned counsel for DMRC submitted that once the earlier writ petition had been dismissed as withdrawn on 21.09.2000, the petitioner cannot be permitted to re-agitate those very issues in the present petition. 12. The next plea taken by the learned counsel for DMRC was that, in any event, after the passing of the Award and handing over of possession, the property had vested in the State and there could be no challenge to the acquisition. There was also no question of the property reverting to the previous owners from whom the same had been acquired after following the due procedure established under the said Act. 13. The third plea was that the public purpose of acquisition had been adequately met and the future use of the said land was also for a public purpose inasmuch as it was permissible for DMRC to raise revenues from property development in order to finance the metro rail project. Consequently, it was submitted that the property development in this case would fall within the ambit of „public purpose‟. It was also contended that, in any event, the proposal for developing a five star hotel on the land in question had been dropped. WP(C) 2948/2007 Page No.10 of 38 14. The learned counsel for DMRC placed reliance on the following decisions:- (1) Gulam Mustafa & Ors v. The State of Maharashtra & Ors: (1976) 1 SCC 800; (2) Govt. of A.P and Anr v. Syed Akbar: (2005) 1 SCC 558; (3) Union of India & Ors v. Jaswant Rai Kochhar & Ors: (1996) 3 SCC 491; (4) Ram Lal Sethi & Anr v. State of Haryana & Ors.: (1990) Supp. SCC 11; (5) Municipal Corporation of Greater Bombay v. Industrial Development Investment Co. Private Ltd: (1996) 11 SCC 501; (6) Bangalore Development Authority & Ors v. R. Hanumaiah & Ors: VII (2005) SLT 595; (7) Pratibha Nema & Ors v. State of M.P. & Ors: (2003) 10 SCC 626; and (8) Forward Construction Co. and Ors v. Prabhat Mandal: (1986) 1 SCC 100. 15. These decisions were relied upon by the learned counsel in support of his contentions that once the original acquisition is valid and title has vested in the acquiring authority, the manner in which the excess land is used thereafter is of no concern of the original owner and, in any event, cannot be the basis for invalidating the acquisition. It was also submitted that after a public purpose is achieved and there is still some land left over, the same can be used for another public purpose and such a change of use would not invalidate the acquisition. It was also contended that once possession has been taken and the land has vested in the State, even the State cannot direct a re-conveyance of the property to the original owner. In WP(C) 2948/2007 Page No.11 of 38 the context of a distinction between an acquisition under Part II and part VII of the said Act, it was submitted that acquisition under both the parts would be for a public purpose and the real distinction was only in the source of funds. It is only where the acquisition was for a company and its cost was to be met entirely by the company itself that the provisions of part VII would apply and not otherwise. In other words, it was submitted that where an acquisition was even partly funded by the State, it would not be an acquisition under part VII of the said Act. In this backdrop it was submitted that in the present case the acquisition was funded by the State, therefore, the provisions of part VII, which were relied upon by the learned counsel for the petitioner, would not apply. It was also contended that the present acquisition was not for a company but for the metro rail system. 16. Mr Chetan Sharma, the learned senior counsel appearing on behalf of the respondents 3 and 4 (co-owners), supported the petition and the contentions raised by the counsel for the petitioner. 17. The learned counsel for the Union of India supported the acquisition and made the further submission that the petitioner and the other co-owners merely had leasehold rights and that the moment the notifications under Sections 4 and 6 of the said Act were issued, the lease stood determined. The arguments of the learned counsel for DMRC were adopted by the learned counsel for the Union of India in support of the acquisition. 18. An additional affidavit of Mr N.P. Singh, General Manager / Legal dated 03.11.2009 was filed on behalf of DMRC. In the said affidavit, WP(C) 2948/2007 Page No.12 of 38 it was stated that the land in question was acquired for the traffic integration and construction of intake shaft of the Metro Patel Chowk Station and that the said land was utilized for the said purpose and an underground station had been constructed beneath the land in question alongwith underground tunnels. It is further stated that during the construction phase, almost the whole of the land in question was required for the digging process, tunneling process, for mobilization of the machinery at the site, for setting up of the batching plant, for excavation work etc. which was carried out on the land in question for a period of more than three years. The affidavit further indicates that a large portion of the land in question had been directly used for the construction of the service building of the Patel Chowk MRTS Station and a substantial portion of the underground station itself occupies almost half the length of the land. It is also stated that the metro tunnels pass below the land surface and run right across it. Furthermore, parking of commuter cars is also done on a substantial part of the land. More importantly, it was stated that the land in question was almost entirely excavated to a depth of 15 metres for lowering of the tunnel boring machines and tunneling operations between the year 2002 to 2005 and thereafter the excavation was back-folded. The said affidavit further reveals that DMRC is proposing to build a commercial / office building, as permissible under the prevailing building bye-laws, and that part of the floor space thus constructed would be utilized by DMRC for its operational requirements and the balance floor space is proposed to be rented out commercially for earning revenue for the Mass Rapid Transport System WP(C) 2948/2007 Page No.13 of 38 (MRTS) project. The additional affidavit goes on to state that in the event DMRC is not able to raise revenues through property development, the project funds would fall short to that extent and would have to be provided by the government / public exchequer. It is further stated that deprivation of the recurring income would affect DMRC‟s operations and fare structure adversely and could compel DMRC to increase the fares charged from commuters. 19. In the said affidavit, it is further stated that the Government, while sanctioning Phase-I of the DMRC project, had also mandated use of the property development revenue for supplementing the regular income of the fare box collections with the objective to keep the fare structure at an affordable level for the public. It was also stated that 65% of the cost of Phase-I had been provided through borrowed funds and DMRC is required to pay the debt amounting to Rs 6861 crores from the total income generated from all the activities and that the income from property development activities would also be utilized for the purposes of repayment of the said debt. It was also stated in the said affidavit that the funding of the metro rail system through property development of the area acquired and handed over to the DMRC is by itself a public purpose as it would facilitate the construction and operation of an environment friendly and economic means of transport for the general public. 20. Finally, in the said affidavit, it was stated that a Presidential order / sanction had been issued by the Ministry of Urban Development on WP(C) 2948/2007 Page No.14 of 38 30.03.2009 stating that property development by DMRC on acquired land shall also be considered as part of the project and that the word „project‟ would also include “property development”. On the basis of the facts stated in the aforesaid affidavit, it was contended on behalf of DMRC that utilization of the balance land for the purposes of constructing a commercial office building was itself a public purpose and that by virtue of the Presidential order / sanction, property development by DMRC on acquired land was, in any event, to be considered as part of the project. It was, therefore, submitted that the land in question was acquired for a public purpose and, though the nature of the public purpose may have changed in respect of a portion of the land, it is still being utilized for a public purpose and there was no illegality in this. 21. Since a reference to the Presidential order / sanction dated 30.03.2009 has been made in the said affidavit, it would be necessary to set out the relevant portions thereof hereinbelow:- “No.K-14011/8/2000-MRTS Government of India Ministry of Urban Development (M.R.T.S. Cell) Nirman Bhawan, New Delhi Dated, 30th March, 2009 ORDER Sanction of the President was earlier accorded for investment approval in Delhi Mass Rapid Transit System (MRTS) Phase I and subsequently in Delhi MRTS Phase II vide orders dated 12.11.1996 and 30.03.1996 respectively, which inter alia provided for property development by Delhi Metro Rail Corporation (DMRC) Ltd. As one of the accepted modes of resource WP(C) 2948/2007 Page No.15 of 38 mobilization towards capital cost as well as sustainable operations. 2. Property Development by Metro projects is in line with the global examples as Metros are highly capital intensive projects and the only