Case: Sooraram Pratap Reddy  Vs. Distt. Collector, Ranga Reddy Dist

a decision ultimately. 164. We may, however, recall Daulat Singh once again at this state. There, referring to all leading cases and dealing with the ambit and scope of judicial review on the satisfaction by the State Government on ‘public purpose, this Court stated; "Public purpose is bound to vary with times and prevailing conditions in the community or locality and, therefore, the legislature has left it to the State (Government) to decide what is public purpose and also to declare the need of a given land for the purpose. The legislature has left the discretion to the Government regarding public purpose. The Government has the sole and absolute discretion in the matter". (emphasis supplied) 165. It was contended that the italicized portion quoted above (The Government has the sole and absolute discretion in the matter) is not in consonance with settled legal position or in accord with earlier decisions of this Court including decisions rendered by various Constitution Benches. We have already referred to R.S. Nanji wherein before more than half a century, Constitution Bench of this Court held that prima facie, the Government is the best judge to decide public purpose but it is not the sole judge. That was the view of the Privy Council in Hamabai. Again, in Somawanti, the Constitution Bench held that in case of colourable exercise of power by the State Government or fraud on statute, the declaration under Section 6 is open to challenge, notwithstanding the ‘finality clause under sub-section (3) of the said section.166. We would have indeed considered the contention of the learned counsel for the appellants closely in the light of earlier decisions of this Court. We are, however, of the view that on the facts and in the circumstances of the present case, the Government was right in forming an opinion and reaching a satisfaction as to ‘public purpose and in initiating proceedings under Sections 4 and 6 and in invoking Part II of the Act. We, therefore, refrain from undertaking further exercise. In our considered opinion, it is not necessary for us to enter into larger question in view of ‘fact situation in the instant case. Conclusions 167. Applying the aforesaid principles to the case on hand, in our considered opinion, it cannot be said that the proceedings initiated by the State for acquisition of land under the Land Acquisition Act, 1894 are illegal, unlawful, unwarranted, mala fide, fraud on statute or have been taken in colourable exercise of power.168. As already adverted to earlier, the State of Andhra Pradesh in the background of ‘World Tourism Organization Report and ‘Vision 2020 Document took a policy decision for the development of the City of Hyderabad. For the said purpose, it decided to establish an Integrated Project which would make Hyderabad a major Business-cum-Leisure Tourism Infrastructure Centre for the State. The project is both structurally as well as financially integrated. It is to be implemented through Andhra Pradesh Infrastructure and Investment Corporation (APIIC) which has taken all steps to make Hyderabad a world-class business destination. APIIC is an instrumentality of State and works as ‘Nodal Agency developing the project which would facilitate socio-economic progress of the State by generating revenues, weeding out unemployment and bringing new avenues and opportunities for public at large. Development of infrastructure is legal and legitimate ‘public purpose for exercising power of eminent domain. Simply because a Company has been chosen for fulfillment of such public purpose does not mean that the larger public interest has been sacrificed, ignored or disregarded. It will also not make exercise of power bad, mala fide or for collateral purpose vitiating the proceedings.169. In our judgment, the respondents are right in submitting that in case of integrated and indivisible project, the project has to be taken as a whole and must be judged whether it is in the larger public interest. It cannot be split into different components and to consider whether each and every component will serve public good. A holistic approach has to be adopted in such matters. If the project taken as a whole is an attempt in the direction of bringing foreign exchange, generating employment opportunities and securing economic benefits to the State and the public at large, it will serve public purpose.170. It is clearly established in this case that the Infrastructure Development Project conceived by the State and executed under the auspices of its instrumentality (APIIC) is one covered by the Act. The Joint Venture Mechanism for implementing the policy, executing the project and achieving lawful public purpose for realizing the goal of larger public good would neither destroy the object nor vitiate the exercise of power of public purpose for development of infrastructure. The concept of joint venture to tap resources of private sector for infrastructural development for fulfillment of public purpose has been recognized in foreign countries as also in India in several decisions of this Court.171. The entire amount of compensation is to be paid by State agency (APIIC) which also works as nodal agency for execution of the project. It is primarily for the State to decide whether there exists public purpose or not. Undoubtedly, the decision of the State is not beyond judicial scrutiny. In appropriate cases, where such power is exercised mala fide or for collateral purposes or the purported action is de hors the Act, irrational or otherwise unreasonable or the so-called purpose is ‘no public purpose at all and fraud on statute is apparent, a writ-court can undoubtedly interfere. But except in such cases, the declaration of the Government is not subject to judicial review. In other words, a writ court, while exercising powers under Articles 32, 226 or 136 of the Constitution, cannot substitute its own judgment for the judgment of the Government as to what constitutes ‘public purpose.172. Taking the facts in their entirety, we are of the view that the action of the State in initiating acquisition proceedings for establishing and developing infrastructure project cannot be held contrary to law or objectionable.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]APIIC was having 26% share while Emaar Properties is having 74% share capital. Joint Venture companies were incorporated with the Registrar of Companies, Andhra Pradesh, Hyderabad with registered office at Hyderabad for taking different components of integrated project. Several projects are about to be over. Some projects are going on and some are to be undertaken. Total cost according to APIIC excluding operating and financial course of the integrated project is more than Rs.550 crores. It was submitted that considering the project in its entirety, the High Court was wholly right and fully justified in dismissing the petition and not interfering with the land acquisition proceedings.According to Emaar, the City of Hyderabad was sought to be transformed intoDestination as envisaged by the Government and public and private sectors participation investment had been thought proper through Integrated Project under Industrial Policy of the StateThrough APIIC, the State undertook the Integrated Project for establishing Hyderabad into world class business destination and a leader in the knowledge sector. Such project would indeed develop the State which would be in the larger interest of general public. It would enhance the value of Hyderabad into aDestination for domestic as well as international travellers. It was, therefore, submitted that the land acquisition proceedings were in consonance with the law and no case has been made out for interference with such proceedings and the appeals are liable to be dismissed.It is thus clear that the land was proposed to be acquired for a public purpose, viz. for development of new projects by APIIC. It is also apparent that urgency clause under Section 17 of the Act was applied and inquiry under SectionThe acquisition was to enable the activities of APIIC, which was an instrumentality of State operating in the area of industrial infrastructure. The purposes of APIIC were demonstrably public purposes. It was also held that the claim of the petitioners as being small farmers was notas no agricultural operations were being pursued by them as asserted by the authorities in thewhich was not denied. The availability of alternative land as pleaded by the petitioners was also not correct since the lands available were not contiguous to the existing developed areas and hence could not be said to be ‘alternative.19. The Court, however, held that invocation of urgency clause under Section 17 of the Act and dispensing with enquiry as contemplated by Section5A of the Act wasnot legal. Section5A of the Actis a salutary provision which enables the persons whose land is proposed to be acquired to urge all grounds that may be available against the proposed acquisition at the enquiry. Unless real urgency is demonstrated, dispensing with the enquiry and invocation of urgency clause was irrational and arbitrary exercise of power by the State. By such process, an enquiry under Section5A of the Actcannot be jettisoned on jejune grounds of irrational and unsubstantiated urgency. Since no such urgency could be demonstrated by the State, the action to the extent of dispensing with the enquiry was held to be bad. The petition was, therefore, partly allowed directing the authorities to issue notice to the landowners under Section5A of the Actand to take further proceedings in accordance with law.Once the declaration under Section 6 has been made, it shall be conclusive evidence that the land is needed for a public purpose.31. Section 9 requires the Collector to issue notice to the person interested stating that the Government intends to take possession of the land, and that claims to compensation for all interests in such land may be made to him. It also enumerates particulars to be mentioned in the notice.32. Section 11 enjoins the Collector to proceed to enquire into the objections (if any) which any person interested had filed pursuant to the notice and the value of the land at the date of the publication of the notification under section 4(1), and to make an award. Section 11A prescribes period within which such award shall be made by the Collector. Section 12 declares award of Collector to be final subject to the provisions of the Act. Section 16 empowers Collector after he has made the award under section 11 to take possession of the land which shall thereupon vest absolutely in the Government, free from all encumbrances.The power of eminent domain does not depend for its existence on a specific grant. It is inherent and exists in every sovereign State without any recognition thereof in the Constitution or in any statute. It is founded on the law of necessity. The power is inalienable. No Legislature can bind itself or its successors not to exercise this power when public necessity demands it. Nor it can be abridged or restricted by agreement or contract.The Court noted the contention of the petitioners that `using eminent domain for economic development impermissibly blurs the boundary between public and private takings. It also conceded that quite simply, the governments pursuit of a public purpose might benefit individual private parties.The expression (‘public purpose) is of very wide amplitude. It is merely illustrative and not exhaustive. The inclusive definition does not restrict its ambit and scope. Really, the expression is incapable of precise and comprehensive definition. And it is neither desirable nor advisable to attempt to define it. It is used in a generic sense of including any purpose wherein even a fraction of the community may be interested or by which it may be benefited.On the facts of the case, it was held that a break down in the organization of the Corporation, leading to dislocation of the road transport system would create a chaotic condition to the detriment of the interest of the community. Providing living accommodation for its employees is a statutory activity of the Corporation and it is essential for the Corporation to provide such accommodation in order to ensure an efficient working of the road transport system and it must, therefore, be held to be ‘public purpose.It was also observed that ‘public purpose is bound to vary with the times and the prevailing conditions in a given locality and, therefore, it would not be a practical proposition even to attempt a comprehensive definition of it. It is because of this that the Legislature has left it to the Government to say what is a public purpose and also to declare the need of a given land for a public purpose.Negativing the contention and upholding the acquisition, the Court held that the expression ‘public purpose includes a public purpose in which greatest interest of the community as opposed to a particular interest of an individual is directly concerned. The concept is not static but changes with the passage of time. Power of eminent domain can, therefore, be exercised by the State in public interest.86. A ‘public purpose is thus wider than a ‘public necessity. Purpose is more pervasive than urgency. That which one sets before him to accomplish, an end, intention, aim, object, plan or project, is purpose. A need or necessity, on the other hand, is urgent, unavoidable, compulsive. "Public purpose should be liberally construed, not whittled down byIDA was to constitute a Special Infrastructure Promotion Authority (IPA) having quasi judicial functions, the Task Force was to undertake executive functions outlined in IDA. The intention behind the integrated project was to establish Hyderabad as a majortourism infrastructure asset for the State. It was also stated that in the background of ‘World Tourism Organisation Report on the State of Andhra Pradesh in 2000 and in the light of the ‘Vision 2000 Document prepared in mid 1990s highlighting the need for tourism as an important economic driver for the State, the State Government initiated a Project Development exercise infor an international standard convention center complex integrated with other components.It is, therefore, a settled proposition of law that in absence of illegality or violation of law, a Court of law will not interfere in policyto the counsel, since the acquisition is not in accordance with Part VII of the Act, the entire acquisition is vitiated being contrary to law. It is, therefore, liable to be quashed and setthe said procedure has been followed and hence it cannot be said that the acquisition was not in consonance with law. It was also submitted that in earlier proceedings, this contention had been expressly raised by the writ petitioners before the High Court. The learned Single Judge specifically negatived it holding that the land was needed for ‘public purpose. The said order was confirmed even by the Division Bench. Hence, so far as acquisition by the ‘State under Part II of the Act for public purpose is concerned, the earlier order has attained finality. The High Court held that the appropriate Government was not justified in invoking urgency clause under Section 17 of the Act and no urgency could demonstrably be shown to exist, the declaration as to urgency and dispensing with the inquiry under Section5A of the Actwas held unlawful. The State Government was, therefore, directed to follow procedure under Section5A of the Actby issuing notice to the land owners by inviting objections and affording opportunity of being heard to the persons interested in the land. The said exercise was thereafter undertaken by the authorities and final notification under Section 6 of the Act was issued which does not call for interference and the High Court was justified in dismissing theto Babu Barkya, this Court held that the conclusion arrived at by the High Court was ‘entirely correct, though the process of reasoning by which it had reached the conclusion was erroneous. The Court observed that the Act contemplates acquisition for (i) a public purpose, and (ii) for a Company; thus, conveying the idea that acquisition for a Company, is not for a public purpose. It was also observed that the purposes of public utility, referred to in Sections 40 and 41 of the Act were akin to public purpose. Hence, acquisition for a public purpose as also acquisition for a Company are governed by considerations of public utility. But the procedure for the two kinds of acquisitions is different and if it is for a Company, then acquisition has to be effected in accordance with the procedure laid down in Part VII.The Court, keeping in view the Land Acquisition (Amendment) Act, 1962 (Act 31 of 1962), held that clause (aa) of(1) of Section 40 as inserted by Act 31 of 1962 did not contravene Article 31 (2) or Article 19 (1) (f) of the Constitution. Accordingly the acquisition was held legal and valid.123. A special reference may be made to a decision of the Division Bench of the High Court of Gujarat in Motibhai Vithalbhai Patel & Anr. V. State of Gujarat & Anr., AIR 1961 Guj 93 . In Motibhai, land was sought to be acquired for a Company, namely, Sarabhai Chemicals for its expansion. It was contended that acquisition was not for public purpose under Section 4 of the Act and it was bad in law.124. Considering the relevant provisions of the Act as also leading cases on the point, the Court held that even if the acquisition of land is for a private concern whose sole aim is to make profit, the intended acquisition of land would materially help in saving foreign exchange in which the public is also vitally concerned in our economic system. It can, therefore, be said to be a public purpose and would not be bad.Considering various clauses in the Joint Venture Agreement, the Court held that the cumulative effect of all went to show that acquisition was for the public purpose of setting up technological park by Government of Karnataka through Karnataka Industrial Areas Development Board and was, therefore, valid.153. In our judgment, in deciding whether acquisition is for `public purpose or not, prima facie, Government is the best judge. Normally, in such matters, a writ Court will not interfere by substituting its judgment for the judgment of the Government.It was contended that the italicized portion quoted above (The Government has the sole and absolute discretion in the matter) is not in consonance with settled legal position or in accord with earlier decisions of this Court including decisions rendered by various Constitution Benches. We have already referred to R.S. Nanji wherein before more than half a century, Constitution Bench of this Court held that prima facie, the Government is the best judge to decide public purpose but it is not the sole judge. That was the view of the Privy Council in Hamabai. Again, in Somawanti, the Constitution Bench held that in case of colourable exercise of power by the State Government or fraud on statute, the declaration under Section 6 is open to challenge, notwithstanding the ‘finality clause under(3) of the said section.166. We would have indeed considered the contention of the learned counsel for the appellants closely in the light of earlier decisions of this Court. We are, however, of the view that on the facts and in the circumstances of the present case, the Government was right in forming an opinion and reaching a satisfaction as to ‘public purpose and in initiating proceedings under Sections 4 and 6 and in invoking Part II of the Act. We, therefore, refrain from undertaking further exercise. In our considered opinion, it is not necessary for us to enter into larger question in view of ‘fact situation in the instant case.Applying the aforesaid principles to the case on hand, in our considered opinion, it cannot be said that the proceedings initiated by the State for acquisition of land under the Land Acquisition Act, 1894 are illegal, unlawful, unwarranted, mala fide, fraud on statute or have been taken in colourable exercise of power.168. As already adverted to earlier, the State of Andhra Pradesh in the background of ‘World Tourism Organization Report and ‘Vision 2020 Document took a policy decision for the development of the City of Hyderabad. For the said purpose, it decided to establish an Integrated Project which would make Hyderabad a majorTourism Infrastructure Centre for the State. The project is both structurally as well as financially integrated. It is to be implemented through Andhra Pradesh Infrastructure and Investment Corporation (APIIC) which has taken all steps to make Hyderabad abusiness destination. APIIC is an instrumentality of State and works as ‘Nodal Agency developing the project which would facilitateprogress of the State by generating revenues, weeding out unemployment and bringing new avenues and opportunities for public at large. Development of infrastructure is legal and legitimate ‘public purpose for exercising power of eminent domain. Simply because a Company has been chosen for fulfillment of such public purpose does not mean that the larger public interest has been sacrificed, ignored or disregarded. It will also not make exercise of power bad, mala fide or for collateral purpose vitiating the proceedings.169. In our judgment, the respondents are right in submitting that in case of integrated and indivisible project, the project has to be taken as a whole and must be judged whether it is in the larger public interest. It cannot be split into different components and to consider whether each and every component will serve public good. A holistic approach has to be adopted in such matters. If the project taken as a whole is an attempt in the direction of bringing foreign exchange, generating employment opportunities and securing economic benefits to the State and the public at large, it will serve public purpose.170. It is clearly established in this case that the Infrastructure Development Project conceived by the State and executed under the auspices of its instrumentality (APIIC) is one covered by the Act. The Joint Venture Mechanism for implementing the policy, executing the project and achieving lawful public purpose for realizing the goal of larger public good would neither destroy the object nor vitiate the exercise of power of public purpose for development of infrastructure. The concept of joint venture to tap resources of private sector for infrastructural development for fulfillment of public purpose has been recognized in foreign countries as also in India in several decisions of this Court.171. The entire amount of compensation is to be paid by State agency (APIIC) which also works as nodal agency for execution of the project. It is primarily for the State to decide whether there exists public purpose or not. Undoubtedly, the decision of the State is not beyond judicial scrutiny. In appropriate cases, where such power is exercised mala fide or for collateral purposes or the purported action is de hors the Act, irrational or otherwise unreasonable or thepurpose is ‘no public purpose at all and fraud on statute is apparent, acan undoubtedly interfere. But except in such cases, the declaration of the Government is not subject to judicial review. In other words, a writ court, while exercising powers under Articles 32, 226 or 136 of the Constitution, cannot substitute its own judgment for the judgment of the Government as to what constitutes ‘public purpose.172. Taking the facts in their entirety, we are of the view that the action of the State in initiating acquisition proceedings for establishing and developing infrastructure project cannot be held contrary to law or objectionable.