Case: State of West Bengal and Another Vs. Surendra Nath Bhattacharya and Another

the products of the company and have stressed the fact that the articles produced by the company are used for the benefit of the people and as it saves lot of foreign exchange, it is unmistakably for the general good of the country particularly from the economic point of view. In these circumstances, it cannot be said that the object of the company in extending its operations by enlarging the area of its production was not for the public purpose of the company. Taking an overall picture of the nature of the products of the company, its various activities, the general public good that it seeks to achieve and the great benefit that the people derive, it cannot be said that the acquisition, in the present case, was not for a public purpose. According to the test laid down by this Court it is sufficient if it is shown that the building sought to be built or the work undertaken subserves the public purpose of the company which is completely fulfilled in this case. The High Court seems to have been impressed by the argument advanced before it that the land acquisition proceedings in the instant c ase are hit by s. 44B of the Act. The High Court, however, has failed to consider that s. 44B is purely prospective in character and has absolutely no application to acquisition proceedings taken before July 20, 1962, the date when the amendment wa s enacted.The High Court also seems to have accepted the argument of the first respondent that s. 40(aa) violates Art. 14 of the Constitution inasmuch as it permits acquisition of land for a company but not for an individual or a private company though these persons may also be engaged in an industry which was for a public purpose. This argument was repelled by this Court and it was held that s. 40(aa) was not violative of Art. 14. In this connection, this Court observed as follows:-"Therefore a distinction in the matter of acquisition of land between public companies and Government companies on the one hand and private individuals and private companies on the other is in our opinion justified, considering the object behind cl. (aa) as introduced into the Act. The contention under this head must therefore also fail."10. Some of the High Courts also have taken a similar view which has found favour with us in vie w of the second Arora case, referred to above. In the case of P. Girdharan Prasad Missir and Anr. v. State of Bihar &Anr. a Division Bench of the Patna High Court while dealing with this question observed as follows:-"Thirdly, it was urged that the acquisition was not for a public purpose but merely for the purpose of helping a person (here the company) to make profits. This argument, however, is no longer available. It is well known that sugar industry is one of the important industries of India engaged in the production of an essential commodity, and the fostering of the growth of that industry is undoubtedly for a public purpose. A company engaged in the manufacture of sugar would, therefore, come within the scope of clause (a) of sub-section (1) of section 40 of the Act."11. A Division Bench of the Gujarat High Court in Chhotubhai Babarbhai Patel v. State of Gujarat and Anr. while construing the second Arora case referred to above clearly held that s. 40(aa) contemplated that the building or work which the company intended to construct was to subserve the public purpose of the industry or work for which it was being constructed. In that case also, the company concerned was manufacturing caustic soda, dyes, chemicals, colours and drugs (caustic soda is one of the products of the company in the instant case also). Dwelling on the importance of the public purpose of the industry concerned in that case, Shelat, C. J., observed as follows:-"Taking all these factors into consideration, it is not possible to deny that the industry in which the second respondent company is already engaged and is about to be engaged in, and for the buildings or works for which the lands in question are being acquired is such that it will promote public purpose and will be in the interest of the public."12. We find ourselves in complete agreement with the aforesaid observations of the learned Chief Justice.Finally, even in the second Arora case, it would appear that the company in question was engaged in the production of textile machinery and its parts which were for the use of the general public. This was held by this Court to be a definite public purpose behind the acquisition. In this connection, this Court observed as follows:-"We are concerned here with acquisition for a public purpose, which is undisputed. This is not a case of a house of one person being requisitioned for another; this is a case of constructing some work which will be useful to the public and will subserve the public purpose of the production of textile machinery and its parts for the use of the general public. In the circumstances we are of opinion that there being a definite public purpose behind the acquisition in the present case, the acquisition would be justified under the Act irrespective of the intention of the previous owner of the land to use it for some other public purpose."13. The industrial venture in which respondent No. 2 was engaged was undoubtedly of much greater use than a company producing textile machinery because apart from being useful to the people at large and producing chemicals it has also resulted in saving lot of foreign exchange and thus improving the economy of our country so as to be an efficient instrument of economic benefit. We are satisfied that all the conditions of s. 7 of the Amending Act as also that of s. 40(aa) have been fulfilled in the instant case and the High Court was wrong in law in quashing the said proceedings.14.

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

Explanation:
1[ds]The High Court undoubtedly referred to the "first Arora case" as also to the "second Arora case" but, with due respect, we might observe that the High Court relied mainly on the observations made in the "first Arora case" and has not correctly interpreted the later decision of this Court and the effect of the amendment which completely superseded the "first Arora case". The argument of the learned counsel before us centered round the interpretation of s. 40(aa) as amended by the amendment as also s. 7 of the Amending Act. In order to understand the scope of the argument it may be necessary to extract both s. 40(a a) and s. 7 of the Amending Act, which runValidation of certain acquisitions Notwithstanding any judgment, decree or order of any court, every acquisition of land for a company made or purporting to have been made under Part VII of the principal Act before the 20th day of July 1962, shall, in so far as such acquisition is not for any of the purposes mentioned in clause (a) or clause (b) of sub- section (1) of section 40 of the principal Act, be deemed to have been made for the purpose mentioned in clause (aa) of the said sub-section, and accordingly every such acquisition and any proceeding, order, agreement or action in connection with such acquisition shall be, and shall be deemed always to have been, as valid as if the provisions of sections 40 and 41 of the principal Act, as amended by this Act, were in force at all material times when such acquisition was made or proceeding was held or order was made or agreement was entered into or action wasthis aspect of the matter, the view taken by this Court in the "second Arora case" was followed in a recent decision of this Court in Himalayan Tiles and Marbles v. Francis Victor Coutinho (dead) by Lrs. In the instant case, it is not disputed that the proceedings for acquisition were started long before July 20, 1962, that is to say, as early as December 9, 1954 when notification under s. 6 of the Act was issued. Secondly, it is also not disputed that after inviting objections, etc., an Award was made by the Collector on October 14, 1957 and after the property in dispute fully vested in the Government, the Collector then delivered the same to the company-respondent No. 2 on October 23, 1957. For these reasons, the facts of the present case squarely fall within the ambit of the conditions laid down by s. 7 of the Amending Act and hence the challenge on the ground of the constitutional validity of the acquisition must necessarilywe have to see whether the provision in cl. (aa) bears another construction also in the setting in which it appears and in the circumstances in which it was put on the statute book and also in view of the language used in the clause. The circumstances in which the amendment came to be made have already been mentioned by us and the intention of Parliament clearly was to fill up the lacuna in the Act which became evident on the decision of this Court in R. L. Aroras case (1962 Supp. 2 SCR 149)...... It was only for such a company that land was to be acquired compulsorily and the acquisition was for the construction of some building or work for such a company, i.e., a company engaged or about to be engaged in some industry or work which is for a public purpose. In this setting it seems to us reasonable to hold that the intention of Parliament could only have been that land should be acquired for such building or work for a company as would subserve the public purpose of the company; it could not have been intended, considering the setting in which cl. (aa) was introduced, that land could be acquired for a building or work which would not subserve the public purpose of the company....Further, acquisition is for the construction of some building or work for a company a nd the nature of that company is that it is engaged or is taking steps for engaging itself in any industry or work which is for a public purpose. When therefore the building or work is for such a company it seems to us that it is reasonable to hold that the nature of the building or work to be constructed takes colour from the nature of the company for which it is to be constructed. We are therefore of opinion that the literal and mechanical construction for which the petitioner contends is neither the only nor the true construction of cl. (aa) and that when cl. (aa) provides for acquisition of land needed for construction of some building or work it implicitly intends that the building or work which is to be constructed must be such as to subserve the public purpose of the industry or work in which the company is engaged or is about to be engaged. In short, the words "building or work" used in cl. (aa) take their colour from the adjectival clause which governs the company for which the building or work is being constructed.... It is only in these cases where the company is engaged in an industry or work of that kind and where the building or work is also constructed for a purpose of that kind, which is a public purpose, that acquisition can be made under cl. (aa). As we read the clause we are of opinion that the public purpose of the company for which acquisition is to be made cannot be divorced from the purpose of the building or work and it is not open for such a company to acquire land under cl. (aa) for a building or work which will not subserve the public purpose of the company." (Emphasiseffect of the observations made above leads to the irresistible conclusion that the words public purpose are not to be interpreted in a restricted sense but take colour fro m the nature of the industry itself, the articles that it manufactures and the benefit to the people that it subserves. This Court clearly indicated that the land should be acquired for building or work which would serve the public purpose of the company and not public purpose as it is generally understood. In the instant case, we have also set out the nature of the products of the company and have stressed the fact that the articles produced by the company are used for the benefit of the people and as it saves lot of foreign exchange, it is unmistakably for the general good of the country particularly from the economic point of view. In these circumstances, it cannot be said that the object of the company in extending its operations by enlarging the area of its production was not for the public purpose of the company. Taking an overall picture of the nature of the products of the company, its various activities, the general public good that it seeks to achieve and the great benefit that the people derive, it cannot be said that the acquisition, in the present case, was not for a public purpose. According to the test laid down by this Court it is sufficient if it is shown that the building sought to be built or the work undertaken subserves the public purpose of the company which is completely fulfilled in this case. The High Court seems to have been impressed by the argument advanced before it that the land acquisition proceedings in the instant c ase are hit by s. 44B of the Act. The High Court, however, has failed to consider that s. 44B is purely prospective in character and has absolutely no application to acquisition proceedings taken before July 20, 1962, the date when the amendment wa s enacted.The High Court also seems to have accepted the argument of the first respondent that s. 40(aa) violates Art. 14 of the Constitution inasmuch as it permits acquisition of land for a company but not for an individual or a private company though these persons may also be engaged in an industry which was for a public purpose. This argument was repelled by this Court and it was held that s. 40(aa) was not violative of Art.find ourselves in complete agreement with the aforesaid observations of the learned Chief Justice.Finally, even in the second Arora case, it would appear that the company in question was engaged in the production of textile machinery and its parts which were for the use of the general public. This was held by this Court to be a definite public purpose behind theindustrial venture in which respondent No. 2 was engaged was undoubtedly of much greater use than a company producing textile machinery because apart from being useful to the people at large and producing chemicals it has also resulted in saving lot of foreign exchange and thus improving the economy of our country so as to be an efficient instrument of economic benefit. We are satisfied that all the conditions of s. 7 of the Amending Act as also that of s. 40(aa) have been fulfilled in the instant case and the High Court was wrong in law in quashing the said proceedings.