Reserved on 27.10.2009.Delivered on 04.12.2009.Civil Misc. Writ Petition No. 55578 of 2008.Pooran and others ...........PetitionersVersusState of U.P. and others ...........Respondents.withCivil Misc. Writ Petition No. 12834 of 2008.Ashok ...........PetitionerVersusState of U.P. and others ...........Respondents.(Group-I)Civil Misc. Writ Petition No. 14254 of 2008.Kanti ...........PetitionerVersusState of U.P. and others ...........RespondentsWithCivil Misc. Writ Petition No. 14251 of 2008.Jaspal Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12021 of 2008.Dhoom Singh and others ...........PetitionersVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14252 of 2008.Badri ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14247 of 2008.Jaiprakash ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14255 of 2008.Rajwati ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14250 of 2008.Naresh & another ..........PetitionersVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14245 of 2008.Omkar Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14258 of 2008.Munni ...........PetitionerVersus

State of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14259 of 2008.Krishan Pal and another ...........PetitionersVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12022 of 2008.Mangu Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12830 of 2008.Amarwati ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12839 of 2008.Jai Prakash ...........PetitionerVersusState of U.P. and others ...........Respondents.(Group-II)Civil Misc. Writ Petition No. 12014 of 2008.Babu Singh and others ...........PetitionersVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14248 of 2008.Mahipal Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12846 of 2008.Satish Kumar ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12844 of 2008.Babu Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14256 of 2008.Ram Bhool @ Boli ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14257 of 2008.Ram Kumar Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14253 of 2008.

Ranbir ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12018 of 2008.Mir Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12843 of 2008.Mukesh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12845 of 2008.Jagdish Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14249 of 2008.Nashib Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 14244 of 2008.Chetram ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12838 of 2008.Manoj Kumar ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12020 of 2008.Sipattar Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12019 of 2008.Rajinder Singh and others ...........PetitionersVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12836 of 2008.Ashok Rambhul ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12840 of 2008.Attar Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.

WithCivil Misc. Writ Petition No. 12887 of 2008.Har Pal Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12835 of 2008.Devi Sharan & othrs ...........PetitionersVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12850 of 2008.Sat Pal Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12848 of 2008.Sompal Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12017 of 2008.Mahinder Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12832 of 2008.Bani Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12842 of 2008.Sitaram ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12841 of 2008.Amar Singh ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12016 of 2008.Jaiveer Singh and others ...........PetitionersVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12847 of 2008.Anil ...........PetitionerVersusState of U.P. and others ...........Respondents.WithCivil Misc. Writ Petition No. 12849 of 2008.Puran Singh ...........Petitioner

VersusState of U.P. and others ...........Respondents.(Group-III)Civil Misc. Writ Petition (PIL) No. 8968 of 2008.Vishwanath Pratap Singh and another ...........PetitionersVersusState of U.P. and others ...........Respondents.(Group-IV):::::::::::

Hon'ble Ashok Bhushan, J.Hon’ble Sudhir Agarwal, J.

(Delivered by Hon’ble Ashok Bhushan, J.)These writ petitions (except Civil Misc. Writ Petition (PIL) No.8968 of 2008) have been filed by the farmers of district Ghaziabad, Stateof Uttar Pradesh challenging the acquisition of their good agricultural landby the State of Uttar Pradesh for a Company (respondent No.2). By twosuccessive acquisition proceedings, first by issuing notification dated 11thFebruary, 2004 under Section 4 of the Land Acquisition Act, 1894(hereinafter referred to as the Act) and second by issuing notificationdated 29th August, 2006 under Section 4 of the Act, huge area ofagricultural land measuring about 2500 acres was sought to be acquiredfor a power project to be established by the Company (respondent No.2).The above writ petitions can be categorises in four groups. Thefirst group of writ petitions are Writ Petition No.55578 of 2008 (Pooranand others vs. State of U.P. and others) and other connected writpetitions which challenge both the acquisition proceedings, i.e.,acquisition proceeding initiated by issuing notification dated 11thFebruary, 2004 under Section 4 of the Act and the acquisition proceedinginitiated by issuing notification dated 29th August, 2006 under Section 4 ofthe Act. The second group of writ petitions are Civil Misc. Writ PetitionNo. 14254 of 2008 (Kanti vs. State of U.P. and others) and otherconnected writ petitions, which challenge the land acquisition proceedinginitiated by issuing notification dated 11th February, 2004 under Section 4of the Act. The third group of writ petitions are Civil Misc. Writ PetitionNo. 12014 of 2008 (Babu Singh and others vs. State of U.P. and others)and other connected writ petitions which challenge the acquisitionproceeding initiated by issuing notification dated 29th August, 2006 underSection 4 of the Act and the declaration dated 20th February, 2007 issuedunder Section 6 of the Act. The fourth group of writ petition is Civil Misc.Writ Petition (PIL) No. 55548 of 2008 (Vishwanath Pratap Singh andothers vs. State of U.P. and others), which is a public interest litigationchallenging both the land acquisition proceedings initiated by issuingnotifications under Section 4 of the Act dated 11th February, 2004 and29th August, 2006.The background facts giving rise to these writ petitions, brieflynoted, are; Reliance Delhi Power Private Limited, a private registeredcompany within the meaning of Companies Act, 1956 made anapplication on on 19th January, 2004 to the Chief Secretary of the State ofU.P. expressing its interest in setting up of 3000-3500 MW Gas BasedThermal Power Station in Tahsil Hapur, District Ghaziabad. On the sameday another letter dated 19th January, 2004 was submitted before theCollector by the Reliance Delhi Power Private Limited praying acquisitionof 2500 acres of land in villages Baharmandpur, Jadonpur, Nand Lal Pur,Bajhera Khurd, Kakarana, Dhaulana and Dehra, Pargana Dasna, TahsilHapur, District Ghaziabad. The application was appended with relevantcertificates and declarations for acquisition. The Additional DistrictMagistrate submitted a report before the Collector, Ghaziabad forforwarding proposal of acquisition to the Director, Land Acquisition. Thereport noted that the Company has also deposited 10% acquisitioncharges and 10% estimated compensation. The Collector on 24th January,

2004 forwarded the acquisition proposal received from the Company tothe Director, Land Acquisition, Board of Revenue, Lucknow. The Directorafter examining the proposal received from the Collector wrote a letter tothe Principal Secretary (Energy) on 28th January, 2004 for taking steps forissuance of notification under Section 4(1) read with Section 17 of the Actaccording to the procedure prescribed in Part-VII and VIII (Sections 38 to55) of the Act. The letter of the Director, Land Acquisition was examinedby the Energy Department of the State and a note was submitted thatapproval of Bhumi Upyog Parishad be obtained. The Principal Secretary,Niyojan Vibhag submitted a proposal that Reliance Delhi Power Limitedbeing a private company, the proceedings of land acquisition be taken inaccordance of Part VII (Sections 38 to 44B) of the Act for acquisition of903.568 hectares of land, which was approved by the Chief Minister on31st January, 2004. After getting the approval of the RevenueDepartment, the notification under Section 4(1)/17 of the Act dated 11thFebruary, 2004 for acquisition of 903.449 hectares of land for a publicpurpose, namely, for setting up Gas Based Thermal Power Station andEnergy Research and Development Institution was issued. Section 17(4)was invoked for dispensing inquiry under Section 5A of the Act. A draftagreement under Section 41 of the Act was submitted by the RelianceDelhi Power Limited, which after the approval by the Hon’ble the ChiefMinister, was executed on 19th February, 2004 between the Governor ofU.P. and Reliance Delhi Power Private Limited. On 3rd March, 2004 anapplication by the Reliance Delhi Power Private Limited for additional landof 2500 acres for increasing the capacity of plant from 3000 MW to 7000-8000 MW was moved, however, subsequently the request for additionalacquisition of 2500 acres of land was given up. A draft State SupportAgreement was submitted by the Company to the Government in whichseveral concessions and demands were made by the Company from theState Government. The request made in draft State Support Agreementwas examined. A letter dated 2nd April, 2004 was written by the Collector,Ghaziabad stating that the acquisition proposal was sent to him on therequest of the Company who had also deposited 20% of compensationbut the notification issued under Section 4 of the Act by mistake does notmention the name of the Company, which may be examined. The SpecialSecretary (Energy) wrote that for acceding the demands made by theCompany the Power Policy of the State needs to be amended. Theamended Power Policy was approved by the Cabinet on 8th June, 2004which provided several further benefits to the Company including that theState shall bear 60% of cost of acquisition. The State Support Agreementwas executed on 16th June, 2004 incorporating several clauses beneficialto the Company including new concessions and benefits and sharing ofthe cost to the extent of 60% by the Government. After execution of theState Support Agreement the declaration under Section 6 was issued on25th June, 2004. In November, 2004 the State Government claimed tohave taken possession of the land. The farmers were asked to enter intoan agreement under the U.P. Land Acquisition (Determination ofCompensation and Declaration of Award by Agreement) Rules, 1997 andreceive compensation. Large number of farmers signed the agreementand received compensation. The compensation was offered at the rate ofRs.150/- per square yard.The State executed a conveyance deed on 23rd November, 2005transferring the acquired land in favour of the Company. In May, 2006 an

agitation was started by the farmers against the acquisition of the land.The farmers united under the leadership of late Vishwanath Pratap Singh,Ex-Prime Minister of India raising protest and demonstrations. On 17thAugust, 2006 a big rally was proposed in district Ghazaibad under theleadership of Ex-Prime Minister. The police administration issued orderunder Section 144 of Cr.P.C. for preventing any rally or demonstration. InAugust, 2006 in demonstrations and rallies several farmers were injuredand first information reports were lodged. On 29th August, 2006 anothernotification was issued under Section 4 of the Act for acquisition of53.236 hectares of land in the aforesaid villages. Section 17(4) of the Actwas also invoked dispensing with the inquiry. The declaration underSection 6 with regard to the aforesaid land was issued on 20th February,2007. On 20th December, 2007 the Additional District Magistrate, LandAcquisition wrote a letter to the Company that several farmers haveneither executed the agreement nor accepted compensation and thesame may be completed within three days.A writ petition being Writ Petition (Civil) No.680 of 2007 (SahyogSamiti vs. State of U.P. and others) was filed in Supreme Court inOctober, 2007 under Article 32 of the Constitution challenging the vires ofSections 3, 4 and 6 of the Act and further praying to quash notificationdated 11th February, 2004 issued under Section 4 of the Act of the abovementioned seven villages. The writ petition was taken up by the SupremeCourt on 8th February, 2008, which issued notices confining prayer (a)praying for declaration of Sections 3, 4 and 5 as ultra vires. Prayer (b)and (c) challenging the notification under Section 4 of the Act werepermitted to be deleted. The respondent No.2 (Company), which wasalso one of the parties in the writ petition was deleted. A writ petitionbeing Writ Petition (Civil) No.12 of 2008 was filed in the Supreme Courtby Ranbir Singh and others challenging the acquisition proceedinginitiated by notification dated 11th February, 2004 in which an order waspassed by the Supreme Court on 11th January, 2008 permittingwithdrawal of the writ petition with liberty to approach the High Court. On30th January, 2008 Writ Petition No.4992 of 2008 was filed by one SomvirSingh in the High Court in which a limited interim order was granted on27th February, 2008. The most of the writ petitions, which are up forconsideration were filed in February/March, 2008. The last writ petitionfiled is Writ Petition No.55578 of 2008 in October, 2008.As noted above, in some of the writ petitions both the notificationsissued in the year 2004 and 2006 under Section 4 of the Act werechallenged, in some of the writ petitions notification under Section 4issued in the year 2004 has been challenged and in some of the writpetitions notification under Section 4 issued in the year 2006 has beenchallenged. A comprehensive relief has been claimed in Writ PetitionNo.55578 of 2008 challenging both the acquisition proceedings of theyear 2004 and 2006. It is useful to reproduce the reliefs as claimed inWrit Petition No.55578 of 2008, which are as under:-“i) Issue an appropriate writ, order or directionthereby quashing the Notification bearing no.406 P-3-24-2004-4 (Land Acquisition) 2004 dt. 11.2.2004 U/s4 of the Land Acquisition Act (Annexure 3) and theconsequent proceedings arising thereform;ii) Issue an appropriate writ, order or directionthereby quashing the Notification bearing no. 1582-P-

3-24-2004-4 (Land Acquisition) 2004 dt. 25.6.2004U/s 6 of the Land Acquisition Act (Annexure 7) andthe consequent proceedings arising therefrom;iii) Issue an appropriate writ, order or directionthereby quashing the Notification bearingno.2770/24-P-3-2006-4 (Land Acquisition) 2004 dt.29.8.2006 U/s 4 of the Land Acquisition Act(Annexure 9) and the consequent proceedings arisingthereform;iv) Issue an appropriate writ, order or directionthereby quashing the Notification u/s 6 bearing15no.509/P-3-24-2007-4 (Land Acquisition) 2004 dt.20.2.2007 (Annexure 10) and the consequentproceedings arising thereform;v) Quash the Amendments made in the PowerPolicy on 08.06.2004 (Annexure 5) and declare thesame as null and void;vi) Quash the State Support Agreement dated16.06.2004 executed between respondent no.2 andrespondent State (Annexure 6) and the ConveyanceDeed dt. 23.11.2005 between the respondents no.1and 2 (Annexure__);vii) Issue any other or further writ, order ordirection which this Hon’ble Court may deem fit andproper in the facts and circumstances of the case;viii) Award the costs of the petition to thepetitioner.”The petitioners in all the above writ petitions have pleaded andclaimed that they are still in possession of their agricultural land and arecontinuing with their agriculture. The respondent No.2 has not startedany construction of the project, building or any other work exceptconstruction of boundary wall in some areas with a site office. At the timeof entertainment of the writ petition following was the interim orderpassed by this Court in most of the writ petitions:-“Till the next date of listing, the petitionersshall not be dispossessed from the land in question.However, this order will not give any right to re-enterif they have already been dispossessed.”The interim order granted was extended from time to time.We have heard Sri Shashi Nandan, Sri V.K. Singh learned SeniorAdvocates assisted by Sri Hari Pillai, Sri Ashish Pratap Singh, Sri VinaySingh and, Advocates for the petitioners, Sri Rakesh Dwivedi, learnedSenior Advocate assisted by Sri W.H. Khan, Senior Advocate, Sri M.K.Gupta, Sri Gaurav Bhatia, Sri Manish Tandon, Sri Shantanu Krishna andSri Prateek Dwivedi, Advocates for respondent No.2 and Sri Jafar Naiyer,Additional Advocate General assisted by Sri M.C. Tripathi and Sri P.K.Pandey for the State.By an earlier order dated 16th September, 2008 the AdditionalAdvocate General was directed to produce the entire original recordrelating to acquisition in question for perusal of the Court. The recordpertaining to Power Policy of 2003 and 2004 were also directed to beproduced. The learned Additional Advocate General has produced the

original record in the Court, which were also perused by the counsel forboth the parties. Learned counsels for both the parties have made theirsubmissions on the basis of pleadings on the record as well as on thebasis of original record pertaining to land acquisition as produced by thelearned Additional Advocate General under the orders of the Court.Challenging the land acquisition proceedings, learned counsel forthe petitioners submits that huge chunk of valuable agricultural land hasbeen handed over by the State on a platter to respondent No.2. Thesubmission of the petitioners’ counsel is that proceedings for acquisitionwere started on an application dated 19th January, 2004 of Reliance DelhiPower Private Limited, a private company registered under theCompanies Act. The Reliance Delhi Power Private Limited requestedacquisition for the Company after depositing 10% estimatedcompensation and 10% acquisition charges. It is submitted that theCollector after receipt of the application dated 19th January, 2004forwarded the proposal to the Director, Land Acquisition vide his letterdated 24th January, 2004 for issuing notification under Section 4(1)/17 ofthe Act as acquisition “for a company”. The Director, Land Acquisitionalso recommended acquisition “for a company” after compliance of Part17VII (Sections 39 to 44B) of the Act. The approval was also granted on thesaid recommendation by Hon’ble the Chief Minister on 31st January, 2004.However, notification under Section 4 was illegally issued withoutmentioning that the acquisition is “for a company”, rather the notificationmentioned the acquisition “for public purpose”. Even after thenotification under Section 4 of the Act, the agreement under Section 41of the Act between the Reliance Delhi Power Private Limited and theGovernor of U.P. was executed in which the company had undertaken tobear all cost of acquisition without there being any financial burden onthe State. In the agreement executed under Section 41 of the Act there isno clause that the State shall contribute any part towards expenses foracquisition. After execution of the agreement a request was receivedfrom the Company for granting several undue benefits including bearingof substantial part of cost of land acquisition by the State. It is contendedthat respondent No.2 being in good terms with the then Chief Minister, allthe request made on behalf of the Company, which burdened the Statewith huge financial liability and other liabilities was acceded. The PowerPolicy 2003, which do not contain any condition for bearing of expensesby the State, was amended at the instance of respondent No.2 and StateSupport Agreement was executed on 16th June, 2004 containing theterms and conditions, which were highly beneficial to the Company andunreasonably disregarding the views expressed by the RevenueDepartment of the State and other Departments that such conditions willnot be in the interest of the State and the State shall be burdened withunnecessary liability of more than Rs.800 crores. The State illegallyinvoked the power under Section 17 of the Act while issuing notificationunder Section 4 of the Act, which power was not available as theacquisition was for a company. The agricultural land of the petitioners aregood land on which the petitioners and their family depend for theirlivelihood. The petitioners have been deprived from their agricultural landin breach of the provisions of the Act. The acquisition being really anacquisition for a company, the procedure prescribed under the LandAcquisition (Companies) Rules, 1963 (Hereinafter referred to as 1963Rules) was required to be followed. The provisions of 1963 Rules

mandates fulfilment of various conditions precedent for acquisition for acompany including hearing to the land owners. The provisions of the1963 Rules require that where the land proposed to be acquired is a goodagricultural land, the acquisition of such land should be avoided. Theprovisions of Part-VII of the Act are mandatory to be complied withbefore acquisition for a company. The submission is that neither theprovisions of Part VII of the Act nor the provisions of the 1963 Rules havebeen followed by the State while proceeding with the acquisition infavour of respondent No.2 only with intent to give undue benefit torespondent No.2. It is submitted that petitioners being illiterateagriculturists were no match to stand up against the might of the Stateand might of respondent No.2 and were forced to accept the meagrecompensation offered by the Collector. It is submitted that camps wereheld in all villages and petitioners were asked to sign and receivecompensation. The submission is that petitioners did not accept thecompensation of their own freewill but forced to accept the same underthe circumstances. It is submitted that petitioners have started unitingand raising their voice against the acquisition of good agricultural landsince May, 2006 and subsequently their agitation was led by former PrimeMinister late Sri Vishwanath Pratap Singh. The petitioners were neithernegligent nor they have given up their rights although agitation againstthe first acquisition initiated by notification dated 11th February, 2004 wasstill going on when fresh notification was issued on 29th August, 2006 foracquiring 53.236 hectares of land, which was agitated too. It is submittedthat the farmers whose land was covered by second notification neitherentered into any agreement nor accepted any compensation andcontinued their protest against the acquisition of land. It is submitted thatthe acquisition was for a company, which is apparent from variouscorrespondences and reports on the original records including theagreement under Section 41 of the Act. The State Support Agreementwas subsequently executed at the instance of respondent No.2 by gettingthe power policy amended, which cannot change the nature ofacquisition. Relying on the judgment of the Apex Court in the case ofDevindra Singh vs. State of Punjab reported in A.I.R. 2008 S.C. 261= 2008(1) S.C.C. 728, it is contended that infusion of the State fundcannot be made after execution of the agreement under Section 41 of theAct. It is contended that after the amendment of the Act by Act No.68 of1984, the legislative scheme of the acquisition has gone sea change andacquisition for a company cannot be made in any other manner exceptafter compliance of Part VII of the Act. The amendments made inSections 3(f), 4, 6, 17 and 39 of the Act have been relied by counsel forthe petitioners. It is further submitted that there was no material forinvoking Section 17 of the Act. Further there was no application of mindnor any basis for dispensing with the inquiry under Section 5A of the Act.The acquisition in question is by way of colourable exercise of power,which vitiate the entire proceeding. The entire acquisition proceedings aretainted with fraud and collusion by the State Government and therespondent No.2, which makes the entire proceedings non-est and void.It is further submitted that Delhi Power Private Limited being a privatecompany, the acquisition at its instance could be made only for thepurposes mentioned in Clause (a) of sub section (1) of Section 40, hencethe entire proceeding is without jurisdiction. The respondent No.2 was aprivate company, which continued to be as such till 31st March, 2004

when incorporation was made certifying change of the company frombeing a private limited company to a public limited company, which wasintimated to the Government on 10th April, 2004. The land acquired ismuch in excess and there has been no appropriate inquiry regardingrequirement of the land. It is submitted that in the original records thereis noting by the Principal Secretary (Energy) that TATA’s have requestedfor only 120 acres of land for establishment of 1000 MW power project.The petitioners have been throughout in the possession of the agriculturalland and carrying on their agricultural activities. The project ofrespondent No.2 has not even started in all these period and according tothe respondents themselves only thing, which has been constructed, is aboundary wall and site office. The acquisition proceeding in favour ofrespondent No.2 (Company) ought not to have been continued whenthey resiled from their commitment that entire cost of acquisition shall beborne by them. The agreement under Section 41 of the Act was alsopublished in U.P. Gazette in September, 2004, which indicates thatagreement under Section 41 subsisted. It is also submitted that foracquisition for a company, compliance of Part VII of the Act is mandatoryand even if the State decided to contribute amount towards payment ofcompensation, they cannot change the nature and procedure ofacquisition for a company. The entire proceeding for acquisition beingtainted by fraud and being colourable exercise of power by the State tounduly benefit respondent No.2, is liable to be struck down by this Courtin exercise of writ jurisdiction. The facts and events as took place afterthe acquisition proceeding clearly indicate that petitioners were neithernegligent nor at any point of time have acquiesced to the illegalproceedings. The delay in filing the writ petition deserves to be ignored inthe interest of justice.Learned counsel for the petitioners has relied on variousjudgments of the Apex Court and different High Courts, which shall bereferred to hereinafter while considering the submissions in detail.Sri Rakesh Dwivedi, learned Senior Advocate, appearing forrespondent No.2 refuting the submissions of learned counsel for thepetitioners contends that petitioners are not entitled for any relief in thewrit petition. Sri Dwivedi contends that writ petitions have been filed afterlong delay of more than four years that too after majority of farmersincluding the petitioners have accepted the amount of compensation afterentering into agreement under the 1997 Rules. It is submitted that theground of laches and delay is not a technical ground, rather is asubstantive ground for dismissal of the writ petition. It is submitted thatpetitioners having acquiesced to the proceedings by not challenging thenotification within reasonable time, they are now estopped fromchallenging the land acquisition proceedings. It is submitted that in all5827 farmers were affected by acquisition proceedings, majority of thefarmers have accepted compensation and only 513 farmers areremaining, who have not accepted compensation. It is submitted that thepetitioners have no right to challenge the land acquisition proceedingafter accepting the compensation. It is also submitted that in certain writpetitions facts have been suppressed that compensation were acceptedby the petitioners. It is submitted that Chandrapal Singh had filed WritPetition No.6471 of 2006 in which notification dated 11th February, 2006was not challenged and only challenge was made that State be restrainedfrom taking forceful possession of their land without any proceeding. It is

submitted that in Writ Petition No.6471 of 2006 no challenge was madeof acquisition proceeding initiated by notification dated 11th February,2004, which indicated that petitioner of that case was not aggrieved by2004 acquisition. The writ petitions filed by the petitioners and itsprosecution by a battery of lawyers indicates that petitions are proxypetitions on behalf of the business rivals of respondent No.2 and are notbona fide writ petitions. In support of his submission that all the writpetitions are liable to be dismissed on the ground of delay and laches, SriDwivedi has placed reliance on number of judgments of the Apex Court,which shall be hereinafter referred to while considering the saidsubmission in detail.Sri Dwivedi submits that in the facts of the present case, it is notnecessary to consider various submissions raised by the petitionerschallenging the land acquisition proceeding. Sri Dwivedi, however, hasmade his submissions replying various arguments of the petitioners. SriDwivedi contends that even on merits the submissions of the petitionershave no legs to stand. Sri Dwivedi submitted that after the enforcementof the the Electricity Act, 2003 generation companies have to be given aboost to generate more and more power for serving the common good.He submits that on generation companies the State can exercise statutorycontrol. The Electricity Act, 2003 itself encourage private sector to comeup in generation of power. He submits that there is acute shortage ofpower generation in the State of U.P. and in view of the Power Policy2003 an application was submitted by respondent No.2 for establishing amega power project. The submission is that respondent No.2 has takenseveral power projects in different parts of the country and at presentthere are thirteen power projects, which are being established in differentparts of the country by respondent No.2. It is submitted that Power Policy2003 of the Government is a open ended policy. The issuance ofnotification under Section 4 dated 11th February, 2004 referring thepurpose of acquisition as public purpose was fully justified. It cannot bedenied that generation of power is in public interest and establishment ofa power project shall serve maximum public good. Even thoughapplication was given by respondent No.2 for acquisition, the State wasfully justified in issuing notification under Section 4 notifying the purposeas a public purpose. The State was required to provide land under thePower Policy 2003 for a project. The project of respondent No.2 was apublic purpose project and the State was within its right to issuenotification under Section 4 of the Act notifying it as public purpose. ThePart VII of the Act and the Land Acquisition (Companies) Rules, 1963 arenot applicable in the acquisition in question. The Power Policy havingbeen amended on 8th June, 2004 and the State Support Agreementhaving been executed on 16th June, 2004 infusing substantial fund by theState Government up to the extent of 60% of acquisition cost, theacquisition was under Part-II of the Act and declaration made underSection 6 on 26th June, 2004 that land is needed for public purpose isfully in accordance with the provisions of the Act and the law as laiddown by the Apex Court. It is contended that execution of the agreementunder Section 41 of the Act was erroneous exercise, which does notaffect in any manner the acquisition proceeding. Clause 3k of the StateSupport Agreement dated 16th June, 2004 has been referred to whichprovided that suitable amendment in agreement under Section 41 of theAct be made to give effect the State Support Agreement. The acquisition

being an acquisition for public purpose, the provisions of Section 17(1)and 17(4) were available and were rightly invoked by the State. It issubmitted that State Support Agreement stipulates that 40% of thegenerated power shall be given to the State of U.P. It is stated that therewas sufficient materials for invoking power under Section 17(1) and 17(4)of the Act, the implementation of power project being an urgent need. Nokind of fraud was practised on the petitioners in entering into theagreement under the 1997 Rules for accepting the compensation. Thereare no sufficient pleadings in the writ petition with regard to anyparticulars of fraud played on the petitioners. The allegations of fraudhave to be specifically pleaded and proved in which the petitioners haveutterly failed. It is not pleaded as to who put force on the petitioners toaccept the compensation at which place.Sri Dwivedi, learned counsel for respondent No.2, contends thatbasic test for determining as to whether acquisition was for publicpurpose or not even though it was initiated at the instance of respondentNo.2 is the factum of infusion of fund by the State. In the present casedecision having been taken by the State for infusion of fund to the extentof 60% of the acquisition cost, the acquisition is an acquisition for publicpurpose. It is submitted that it is open for the State to infuse the fundbefore declaration under Section 6 of the Act is issued and in the presentcase the declaration under Section 6 having been issued on 25th June,2004, the fact that it is a public purpose acquisition was fully justified andin accordance with law. The submission is that the petitioners were wellaware of Section 4 and Section 6 notifications and they having alsoaccepted the compensation, they cannot be heard in challenging theacquisition. The possession was taken by the State after issuance ofnotice under Section 9 of the Act. The conveyance deed has also beenexecuted in favour of respondent No.2 on 23rd November, 2005 and thename of respondent No.2 has already been entered into the revenuerecords. The case of the petitioners that they still continue in possessionof the agricultural land cannot be accepted. The respondent No.2 hasconstructed eight kilometres boundary wall for enclosing the acquiredland and the site office has also been constructed. Under the 1997 Rulesunder which the petitioners entered into the agreement and accepted thecompensation, no applications have been given by the petitioners tocancel the agreement, which clearly shows that petitioners have nogenuine grievance against the acquisition. In fact the petitioners‘grievance was with regard to amount of compensation since they hadclaimed before the Collector payment of compensation at the rate ofRs.300 per square yard. There is no colourable exercise of power by theState and there are no allegation in the writ petitions that any force wasused in payment of compensation to the farmers. The petitionersvoluntarily accepted the compensation and there being voluntariness theestopple, acquiescence shall automatically be applicable. None of thepetitioners have filed any document to show that market value of theland is considerably higher than Rs.150 per square yard. Sri Dwivedireplying the submissions of petitioners’ counsel regarding amendmentbrought in the Act by Act No.68 of 1984, contended that amendedprovisions have to be harmoniously construed. In case of acquisition forcompany Part VII shall be applicable only when the acquisition is anacquisition simplicitor, i.e., when there is no infusion of fund by the Statebut after infusion of fund by the State Part VII shall not be applicable.The exclusion as contained in Section 3(f) will cover those cases wherecompany wants land for its own purpose irrespective of any Governmentpolicy. Replying the submission raised by counsel for the petitionersregarding Section 44-B of the Act, it is submitted that Company was apublic limited company by purchase of share by another company,namely, Patal Ganga Public Limited. However, if the respondent No.2 istreated as private company, no acquisition can be made in its favourunder Part VII, which shall make Part VII inapplicable and only courseopen is to take recourse for acquisition under Part II of the Act.Learned counsel for respondent No.2 supported his varioussubmissions by referring to various judgments of the Supreme Court, thisCourt and other High Courts, which shall be referred to while considering

the submissions in detail.Sri Jafar Naiyer, learned Additional Advocate General made hissubmissions on behalf of the State. Sri Jafar Naiyer referring to thecounter affidavit of the State submitted that Government at that timeproceeded on the request of respondent No.2. It was further submittedthat amendments in the Power Policy were made solely at the behest ofrespondent No.2. He submits that it is difficult to deny that in theagreement, which was entered into on 19th February, 2004, the entirecost of acquisition was to be borne by the Company. However,subsequently by amending Power Policy a major chunk of the costbearing fell on the State. The Additional Advocate General submits that itis difficult to deny that State Support Agreement is prima facie beneficialto the Company and the State was burdened with various obligations.Referring to the original records, the Additional Advocate Generalsubmitted that while processing the request of respondent No.2 foracquisition of the land at various stages deviations were allowed from theprescribed procedure and need for the strict compliance of the procedureof the Land Acquisition Act/Rules were unfortunately given a go-bye.Learned Additional Advocate General submits that original recordspertaining to entire process of land acquisition have been placed beforethe Court for its perusal, which may be looked into.We have heard the learned counsel for the parties at length andhave perused the pleadings of the parties in the writ petition as well asthe original records pertaining to both the land acquisition proceedings.From the submissions of learned counsel for the parties followingissues arise for consideration in this writ petition:-(i) Whether the writ petitions are liable to be dismissed on theground of delay and laches?(ii) Whether the land acquisition proceedings for acquiring 2500acres of land at Tahsil Dasna, District Ghaziabad wereinitiated at the instance of respondent No.2 as anacquisition ‘for a company’ or acquisition proceedings wereinitiated by the State ‘for a public purpose’?(iii) Whether the notification issued under Section 4 dated 11thFebruary, 2004 and declaration issued under Section 6dated 25th June, 2004 declaring the land acquisition forpublic purpose is valid?(iv) If the application given by respondent No.2 was foracquisition ‘for a company’, whether Section 17 of the Actwas available for such acquisition?(v) What is the effect and consequence on the acquisition for acompany after amendment made in the Land AcquisitionAct by Act No.68 of 1984 in different sections of the Act?(vi) What is the stage up to which the State can infuse fund onan acquisition proceeding initiated by a company to makethe acquisition as a public purpose acquisition?(vii) Whether in facts and circumstances of the present case inimpugned acquisition proceedings initiated by notificationdated 11th February, 2004 compliance of Part VII of the Actwas mandatory?(viii) Whether for the acquisition in question, it was mandatory tocomply with the provisions of Land Acquisition (Companies)Rules, 1963?(ix) Whether for the 2006 acquisition initiated by notificationdated 29.8.2006 there was sufficient material andjustification for invoking Section 17(1) and 17(4) of the Act?(x) To what relief/benefit the petitioners are entitled in thepresent writ petitions?Before we proceed to examine various submissions raised bylearned counsel for the parties, it is necessary to look into necessaryfacts, which led to the impugned acquisition proceedings. One of theissues in the writ petitions being as to whether the impugned acquisitionproceedings are acquisition proceedings for a company or for publicpurpose, attending facts and circumstances and various decisions takenby the competent authority at the relevant time is to be ascertained. Forappreciating the issues between the parties the facts which led to theimpugned acquisition have to be noted in detail.

On 15th January, 2004 one Sri Satish Seth, Executive ViceChairman of B.S.E.S. Limited, a member of reliance group, wrote a letterto Hon’ble the Chief Minister, Government of Uttar Pradesh, Lucknowexpressing its interest to set-up a Gas Based Power Project of thecapacity of 3000 MW by investing Rs.10,000 crores. The letter furtherstated that applicants are exploring suitable location in the State forlocating their investment and have short listed few sites near Kanpur,Gautam Budh Nagar and Dadri. It is stated that the project neitherrequires any power purchase agreement nor payment securitymechanism nor State Government’s guarantee and thus the same wouldnot cause any burden on the financial position of the State. After fourdays another letter dated 19th January, 2004 was submitted by theReliance Delhi Power Private Limited, a private limited company, to theChief Secretary, Government of Uttar Pradesh expressing interestregarding setting up of 3000-3500 MW Gas Based Thermal Power Plantand Energy Research Institute in Uttar Pradesh. The copy of thememorandum, article of association and relevant Board resolutions weresubmitted along with the application. On the same day, i.e., 19th January,2004 the Reliance Delhi Power Private Limited submitted an application tothe Collector Ghaziabad praying for acquisition of 2500 acres of land forsetting up a 3000 MW Combined Cycle Gas Based Thermal Power Stationand Energy Research and Development Institute. The letter further statedthat the applicants have identified an area ad-measuring 2500 acres invillage Baharmandpur, Jadonpur, Nand Lal Pur, Bajhera Khurd,Kakarana, Dhaulana and Dehra, Pargana Dasna, Tahsil Hapur, DistrictGhaziabad. Along with the application article of association of theCompany, Board resolutions and various declarations given on behalf ofthe Company for acquisition of the required land was submitted. On theapplication dated 19th January, 2004 submitted by Reliance Delhi PowerPrivate Limited a report dated 24th January, 2004 was submitted by theAdditional District Magistrate, Land Acquisition stating that Reliance DelhiPower Private Limited has submitted a proposal for acquisition of the landproposed to be acquired with statement that a draft of 10% landacquisition expenses and 10% of the estimated compensation has alsobeen submitted. The request of the Company has been noticed thatCompany has prayed for invoking Section 17 of the Act. The report statedthat preliminary inquiry and spot inspection have been made and thereport has been obtained from Incharge Officer (Ceiling). The reportfurther stated that proposal for acquisition and for issuance of notificationunder Section 4(1) of the Government is to be made available throughDirector, Land Acquisition, Board of Revenue, U.P. The Collector on thesame day, i.e., 24th January, 2004 wrote a letter to the Director, LandAcquisition with regard to above mentioned villages separately requestingfor taking appropriate steps for issuing notification under Section 4(1)/17of the Act. The Director, Land Acquisition after receipt of the proposal ofacquisition from Collector sent the proposal to the Principal Secretary(Energy), Government of U.P., Lucknow stating that since Reliance DelhiPower Private Limited is a private company keeping in view the LandAcquisition (Companies) Rules, 1963, on the proposal proceeding beundertaken in accordance with Part VII and VIII (Sections 38 to 55) ofthe Act and the notification under Section 4(1)/17 can be issued onlythereafter. The letter dated 28th January, 2004 sent by the Director, LandAcquisition was examined and a note was put up on 30th January, 2004that before issuance of notification under Section 4(1)/17 of the Act anagreement is to be executed under Section 41 of the Act as the RelianceDelhi Power Private Limited is a private company. It was furtherrecommended that before taking permission of the Revenue Departmentfor invoking Section 17 of the Act, the proposal be got examined by theBhumi Upyog Parishad. The note was forwarded on the same day by thePrincipal Secretary to the Bhumi Upyog Parishad. The Kshetra Adhikari,Bhumi Upyog Parishad submitted a note that Reliance Delhi Power PrivateLimited being a private company Part VII and VIII of the Act are to betaken into consideration. The Additional Director, Land Acquisition put upa note on 31st January, 2004, which was forwarded by the PrincipalSecretary, Niyojan Vibhag and also signed by the Chief Minister on thesame day. The Secretary (Revenue) submitted a similar note on 3rdFebruary, 2004 recommending that before issuance of notification under

Section 4(1)/17 agreement meant for private company is to be executed.Certain queries were made by the Secretary (Energy) from the Collector,which was replied by the Collector vide his letter dated 6th February,2004. The Special Secretary (Energy) thereafter submitted his note dated6th February, 2004 proposing issuance of notification under Section4(1)/17 of the Act. The notification under Section 4(1)/17 was forwardedto the Collector Ghaziabad for publication in the newspaper and forsubmitting proposal for notification under Section 6. The proforma of theagreement was prepared, which was required to be executed inaccordance with Section 41 of the Act (in accordance with Form 14 of theLand Acquisition (Manual). A note was put up by Principal Secretary(Energy) to Hon’ble the Chief Minister for approval. The approval wasgranted on 19th February, 2004 by Hon’ble the Chief Minister and anagreement under Section 41 was executed on 19th February, 2004. Asnoted above, the format of the agreement to be executed under Section41 was examined by the Principal Secretary (Energy) and the PrincipalSecretary, Law Department, which were also approved by Hon’ble theChief Minister on 19th February, 2004, which is revealed from the originalrecord of the State Government. The agreement was entered intobetween the Governor of the Uttar Pradesh (first party) and RelianceDelhi Power Private Limited (second party). It is necessary to look intocertain clauses of the agreement, which was entered between the parties.The relevant portion of the agreement is extracted below:-“AN AGREEMENT made the 19th day ofFebruary, 2004 BETWEEN the Governor of UttarPradesh (hereinafter called ‘the First Party’) of theone part AND--“Reliance Delhi Power Private Limited a CompanyIncorporated under the Companies Act, 1956 andhaving its registered office at BSES House; Santacruz(East), Mumbai-400 055 (herein called ‘the SecondParty’) of the other part;WHEREAS the Second Party has made anapplication to the Government of Uttar Pradesh(hereinafter called the State Government) to acquirefor the purposes of the Second Party under theprovisions of the Land Acquisition Act, 1894, the landdescribed in Schedule I hereto (and delineated on theplan hereto annexed);AND WHEREAS the State Government issatisfied that the Second Party is a company withinthe meaning of Section 3(e) of the said LandAcquisition Act;AND WHEREAS under section 41 of the saidLand Acquisition Act, it is necessary that the SecondParty should enter into an agreement with the FirstParty regarding matters specified in the section readwith the Land Acquisition (Companies) Rules, 1963;NOW THAT it is hereby agreed declared asfollows:1. That the second party will pay to the StateGovernment or such person or persons as the StateGovernment may appoint in this behalf all such sumsof money as shall be awarded by the Collector underthe provisions of the Land Acquisition Act, 1894, or byCourt to which a reference under Part III of the saidAct may be made, or by the Court or Courts includingthe High Court or the Supreme Court to which anappeal from the award of the Court may be preferred,as compensation to any person or persons who maybe found on inquiry held under the provisions thereofto be interested in the said land.2. That the second party will pay to theState Government from its fund all costs, charges andexpenses of proceedings in the Courts or otherwiseincidental to the proposed acquisition or payable ininterest thereof under the provisions of the said Act

and in particular, upon a reference being made underSection 18 of the Land Acquisition Act, 1894, thesecond party shall, within seven days of receiving thedemand, deposit with the Collector all estimatedcosts, charges and expenses computed on thedifferential in the compensation claims made bypersons interested (including the counsel’s fee andother expenses incidental to the reference or payablein respect thereof), failing which the first party may,without prejudice, to any other remedy, recover theamount spent or the expenses incurred from thesecond party as arrears of land revenue and may alsorescind or withdraw from the proceedings inacquisition and all loss resulting therefrom shall beborne by and be to the account of the second party;Provided however that the second party may atits option, instead of making the aforesaid deposit incash furnish in whole or in part Bank Guarantee in likeamount to the satisfaction of the Collector but thisshall be subject always to the second party gettingthe guarantee extended from time to time till theproceedings including appeal under reference havebeen finally disposed of, failing which the sameconsequences shall be ensue as are providedhereinbefore in respect of default in deposit of theamounts mentioned hereinabove.3. ...........4. That upon the second party havingmade all payments incidental to the acquisition ofsuch land as mentioned in clauses 1, 2 and 3 hereofthe first party will forthwith but without prejudice tohis rights to recover from the second party enhancedcompensation, if any, awarded by any court in respectof the said land, convey and grant to the second partythe said land described in Schedule I hereto TO HOLDthe same unto the second party for every subject tothe conditions hereinafter setforth, namely:(1) that the second party, its successors,and assignees, will use the said land for the aforesaidpurpose and for no other purpose without theprevious sanction in writing of the State Government;(2) that the Second Party shall within threeyears of being put in possession of the said land erectand complete all work in accordance with theparticulars specified in Schedule II hereto undersupervision of the District Officer or an officeauthorized by him in this behalf. The District Officershall make half-yearly report to the State Governmentand the Land Acquisition Committee indicating theconditions, which have been or have not beencomplied with as well as on the progress of the workand on the amount of money spent progressively onthe work. If the State Government is satisfied aftersuch inquiry as it may deem necessary that thesecond party was prevented by reasons beyond itscontrol from erecting, providing, constructing orexecuting the said work within the said period ofthree years, the State Government may extend thetime for that purpose by a period not exceeding oneyear at a time so however that the total period ofextension shall not exceed three years and uponextension being granted, the second Party shall erect,provide, construct or execute the said work within theextended period;(3) ...........(4) ...........(5) ...........

(6) that in case of a breach by the SecondParty of any of the terms and conditions of thisagreement, the First Party shall be entitled to declarethe transfer of the land to the Second Party as nulland void whereupon the land shall revert back to theState Government and an amount equal to one-forthof the amount paid by the Second Party to the StateGovernment as the cost of acquisition under clauses1, 2 and 3 hereinbefore shall be forfeited to the StateGovernment as damages and the balance shall berefunded to the Second Party, and the order so madeby the State Government shall be final and binding onthe Second Party PROVIDED THAT the StateGovernment shall not make an order under this subclauseunless the Second Party has been given anopportunity of being heard in the matter.”The Reliance Delhi Power Private Limited sent a letter dated 27thFebruary, 2004 to the Chief Secretary forwarding a draft of State SupportAgreement. On 3rd March, 2004 a communication was addressed byReliance Delhi Power Private Limited to the Government requesting foracquisition of additional land of 2500 acres stating that capacity of theproject is proposed to be enhanced from 3000 MW to 7000-8000 MW.Hon’ble the Chief Minister ordered that Energy Department may act asNodal Agency for additional acquisition of 2500 acres of land. A letterdated 2nd April, 2004 was sent by the Collector that notification dated 11thFebruary, 2004 has omitted to mention the name of the Company forwhich the land is being proposed to be acquired, which may beconsidered. On the request made by the Company for additional land, anote was submitted by the Principal Secretary (Energy) to the ChiefSecretary of the State recommending that justification for minimumrequirement of land be got technically examined by Central RegulatoryElectricity Authority especially when the State is extending variousconcessions. On 11th May, 2004 the Chief Secretary approved theproposal for technical evaluation of minimum requirement of the land.Thereafter discussion was made with officials of the Company in whichdiscussion they did not press for additional acquisition. Thus the requestof additional acquisition of 2500 acres of land was given up when ChiefSecretary wrote for getting the minimum requirement technicallyexamined.As noticed above, the draft State Support Agreement wassubmitted by the Company and thereafter the same was sent to theRevenue Department of the State for its evaluation. At the level ofPrincipal Secretary (Energy) and the Chief Secretary of the State of U.P.several meetings were held in which it was realised that in case theCompany is extended any benefit other than those, which are permissibleunder the Power Policy 2003, the Power Policy 2003 needs to beamended. A detail note was submitted by the Special Secretary (Energy)dated 31st May, 2004 in this regard. It was decided to place the matterbefore the Cabinet for amendment of Power Policy 2003 to enable morebenefits to be given to the Company. The Cabinet approved theamendments in the Power Policy in its meeting dated 8th June, 2004. Theamended Power Policy provided for cost sharing in the acquisition to thefollowing extent:-“B. GOUP would acquire the required land forthe project and transfer the same to the project. Landfor the project would include land required for settingup the power plant and other associated facilities.GOUP would subsidise the cost of land and the cost ofresettlement of project affected families as follows.Capital cost between Rs.1000-2500 cr : 20% ofthe cost of land and 20% of the cost of resettlementof project affected families would be borne by GOUP.For coal thermal plants where land requirements arehigher 10% of the cost of land and 10% of the costof resettlement of project affected families would beborne by GOUP.Capital cost between Rs.2500-5000 cr : 40% of

the cost of land and 40% of the cost of resettlementof project affected families would be borne by GOUP.For coal thermal plants where land requirements arehigher 20% of the cost of land and 20% of the costof resettlement of project affected families would beborne by GOUP.Capital cost greater than Rs.5000 cr : 60% ofthe cost of land and 60% of the cost of resettlementof project affected families would be borne by GOUP.For coal thermal plants where land requirements arehigher 30% of the cost of land and 30% of the costof resettlement of project affected families would beborne by GOUP.The cost of land for the above computation willinclude acquisition price, administrative cost ofacquisition, stamp duty and registration expenses.Cost of resettlement of project affectedfamilies will include resettlement and rehabilitationexpenses incurred as provided in GOUP guidelines.”The amended Power Policy also contained several other benefitsand concessions including trade tax benefits.The State Support Agreement was executed on 16th June, 2004providing for various benefits and concessions in favour of the Companyand obligation on the State to share 60% of the land acquisition cost asper amended Power Policy. Although the agreement under Section 41 ofthe Act provided for erection and completion of all project within threeyears from giving of the possession of the land with extension of one yearat a time not exceeding three years, the State Support Agreementcontained a clause “the Company agrees to make best efforts tocommence commercial operation within seven years of signing thisagreement”. The State Support Agreement contained in Clause 3obligations of the parties. Clause 3.1 deals with obligations of theGovernment of Uttar Pradesh and Clause 3.2 deals with obligations of theCompany. Clauses 3.1(ii), 3.1(ix), 3.2(ii) and 3.2(iii), which are relevantfor the purpose, are quoted below:-

“3. OBLIGATIONS OF THE PARTIES

3.1 Obligations of GoUP...........3.1(ii) GoUP shall, within four weeks, appoint ahigh ranking Government official, who shall coordinate,facilitate, assist and oversee the approvalprocess, and shall act as GoUP’s representative forimplementing the obligations of GoUP under thisAgreement and shall act as “GoUP’s single windowagency” for all interactions between Company andGovernment Instrumentalities.......................3.1(ix)GoUP shall grant all the fiscal benefitsenvisaged under the Power Policy and Industrial37Policy including the exemption and/or deferment ofEntry tax, State trade taxes etc., exemption/remissionof stamp duty and registration charges on thegrant/transfer of land by GoUP to the Company or onthe mortgages, charges and encumbrances as mayhave to be created on the Project assets for procuringdebt finance for construction, maintenance andoperation of the Project. In addition to the benefitsprovided for in the Power Policy and the IndustrialPolicy, GoUP shall grant to the Project any tax,regulatory or other benefits which are normallyextended in relation to any other project in theenergy/gas sector or based on energy/gas excludingsmall capacity non-conventional energy projects;

established in the State of Uttar Pradesh to the extentthat such benefits are more favourable than similarbenefits granted, if any, pursuant to the Power Policyor the Industrial Policy.......................3.2 Obligations of the Company...........3.2(ii) The land acquired under Part VII of theLand Acquisition Act, 1894 pursuant to the agreemententered into between the Company and GoUP on 19thFebruary, 2004 shall be used for the purposes ofProject only.3.2(iii) The Company shall, (a) in response tocompetitive bids invited in line with Electricity Act,2003 and rules, regulations, guidelines & policies,framed and to be framed, thereunder for long termsupply of Base Load Power by the Governmentinstrumentalities engaged in the distribution ofelectricity in U.P. for ........................................ theState of U.P. or (b) under any other provision of theElectricity Act offer to make available from the Projectin aggregate 40% of the total net available sitecapacity of the Project then existing, in the line withthe terms and conditions of the respective powerpurchase agreements to be mutually discussed andentered into and subject to extension of suitablePayment Security Mechanism. The Company agreesthat the levelized fixed cost component of the bidtarifffor sale of power shall not exceed one rupeetwenty-five paisa (Rs.1.25) per kilo-watt hour (kwh)(“Ceiling Fixed Cost”) of power delivered at the busbarsof the Power Station. Such Ceiling Fixed Costshall be appropriately revised to reflect any changes,subsequent to signing of this Agreement, in the fiscal,financial and other policies as deemed relevant for itscomputation. In such an event, the Company wouldprovide relevant information to GoUP in support ofsuch revision and shall mutually discuss GoUP’scomments.”After execution of the State Support Agreement notification underSection 6 of the Act was issued on 25th June, 2004.The issue which needs to be considered first is, whether the writpetitions are liable to be dismissed on the ground of delay and laches.The submission of learned Counsel for the respondent is that writpetitions have been filed with delay of about four years. After issuance ofdeclaration under section 6 of the Land Acquisition Act, 1894 on25.6.2004, the steps were taken by the Collector for taking possession.The Additional Collector (Land Acquisition) Ghaziabad is said to havetaken possession of the land on 18.11.2004. The conveyance deed was39executed on 23.11.2005 in favour of respondent no. 2 transferring theland. On 4.1.2006 the name of the respondent no. 2 was entered intorevenue records. From September 4, 2004 payment of compensation tothe farmers started after they signed the agreement in accordance withU.P. Land Acquisition (Determination of Compensation and Declaration ofAward by Agreement) Rules, 1997 . In writ petition No. 8968 of 2008,Vishwanath Pratap Singh and others Vs. State of U.P. and others, variousdetails of protests and agitations undertaken by the farmers against theacquisition proceedings have been referred to and relied, which havebeen brought on record. A memorandum was given by the farmersstating that compensation be awarded at the rate of Rs. 300/- per squareyard and atleast one member of the family be also given employment. Itwas stated in the memorandum that district administration hadannounced compensation at the rate of Rs. 150/- per square yard andpressures were put on the peasants. The peasants started demonstrationraising their protest since May, 2006. The newspaper report dated

4.5.2006 has been relied and referred to. In July, 2006, agitation turnedviolent and local police had lathicharged the peasants and firstinformation reports were also lodged against the peasants. LateVishwanath Pratap Singh, ex-Prime Minister took a lead in registering theprotest. The administration had to issue order under section 144 Cr.P.C. Arally was organised on 17.8.2006 under the leadership of ex-PrimeMinister. Several peasants were arrested. Police had to use mild force todisburse the agitating peasants. The agitation was under way whensecond notification dated 29.8.2006 under section 4 of the Act was issuedfor acquiring further 53.236 hectares of land in the above mentionedvillages. Declaration under section 6 in continuation of section 4notification dated 29.8.2006 was issued on 20.2.2007. A letter waswritten by the Collector to the respondent No. 2 on 20.12.2007 that thefarmers, whose names were mentioned in the letter in different villagesalong with their Khata numbers, have not yet taken compensation norhave entered into agreement and steps be taken for getting Panchnamaexecuted . On 15.12.2007 one Mohammad Arif of Village Masauri districtGhaziabad made an application under Right to Information Act to theCollector, Ghaziabad as to whether in the acquisition, the procedure asprescribed under the Land Acquisition (Companies) Rules 1963 wasfollowed or not. In October, 2007, the writ petition (Civil) No. 680 of 2007was filed in the apex Court by one Sahyog Samiti, praying that; (A)Section 34 and 6 be declared as ultravires to the Constitution of India (B)the notification dated 11.2.2004 and consequent acquisition proceedingsbe quashed (C) further acquisition proceedings consequent to thenotification dated 11.2.2004 be stayed.Hon'ble Supreme Court on 8.1.2008 issued notice confining toprayer “(A)”. The Company respondent No. 2 in the writ petition beforeus, was also arrayed as respondent No. 2 before the apex Court. Theapex Court deleted the respondent no. 2 from the array of the parties.Following was the order passed by the apex Court on 8.1.2008 :“Application for exemption from filing C.T. Isgranted.Issue notice confining to prayer A of the writpetition.Respondent No. 2 is deleted from the array ofparties and consequently prayers B and C aredeleted.Tag with W.P.(c) No. 224 of 2007 entitledKarnataka Landless Farmers Ass. & Ors. Vs. Unionof India.”Writ petition (Civil) No. 12 of 2008 was filed by Ranbir Singh andothers before the Supreme Court challenging the land acquisitionproceedings initiated by notification dated 11.2.2004. The writ petitionwas permitted to be withdrawn with liberty to approach the High Court.Following was the order passed by the Apex Court on 11.1.2008:“Learned Senior Counsel for the petitioner seekspermission to withdraw the writ petition with liberty toapproach the High Court. The permission is grantedfor doing so. The writ petition is dismissed aswithdrawn”In January, 2008 writ petition No. 4992 of 2008, Sombir Singh andothers was filed in the High Court challenging the acquisition proceedingsin which a limited interim order was granted by this Court to the effectthat till the next date of listing the petitioners shall not be dispossessedfrom the land in question. However, the order will not give any right ofre-entry, if they have already been dispossessed. Several writ petitionswere filed with similar prayers in February, and March, 2008 challengingthe acquisition. The writ petition of Puran Singh was filed with 389petitioners challenging the acquisition in October, 2008 in which writpetition also similar interim order was passed. From the aforesaid facts, itis clear that the first writ petition which was filed in this Court challengingthe land acquisition proceedings was in January, 2008 i.e. after three andhalf years from publication of notification under section 6 of the LandAcquisition Act, 1894 dated 25.6.2004. After January, other writ petitionswere filed as noted above.Sri Rakesh Dwivedi, learned Senior Advocate appearing for the

respondent No. 2 vehemently submitted that the delay in approaching theCourt is fatal specially when the petitioners accepted the compensation.He contended that had the farmers had any genuine grievance againstthe land acquisition, they ought to have challenged acquisition within areasonable time. He further contended that infact protest and agitationwhich were undertaken by the farmers after declaration made by theadministration that compensation shall be paid at the rate of Rs. 150/-per square yard was confined to enhancement of the compensation only.The farmers were not aggrieved by the acquisition proceedings butwanted only enhancement of the compensation.The submission of the petitioners on the other hand is that all thefarmers were very much aggrieved by the acquisition, they beingilliterate farmers did not know what were the appropriate proceedingswhich should be taken by them. It is submitted that right of objectionunder Section 5A was taken away by invoking section 17(4) of the Acthence, they had no opportunity to raise their objections. There waspressure from the administration to accept the compensation andPanchnama as declared by the administration. The farmers had no optionexcept to sign the Panchnama and accept whatever amount was offeredto them but the petitioners being aggrieved by the acquisition hadorganized themselves which took time and thereafter raised their protest.Some of them had approached the apex Court in the first week ofJanuary, 2008 which writ petition was permitted to be withdrawn withliberty to approach the High Court on 11.1.2008.Learned Counsel for the petitioner has further contended that theentire land acquisition proceedings were initiated by the State to giveundue benefit to the respondent No. 2 disregarding the mandatoryprocedure as provided under Part VII of the Act. Although it was therespondent no. 2 which prayed for acquisition of the land itself forestablishing a power project, the acquisition was given a colour asacquisition for public purpose by dispensing with the right of objectionsunder Section 5-A of the Act. The submission is that the acquisition wasin colourable exercise of power and the entire proceedings were void andtainted by fraud, which has now become apparent after inspection of theoriginal records pertaining to the land acquisition proceedings producedby the State. It is submitted that in view of the petitioner’s case to aboveeffect, the writ petitions be not thrown out on the ground of delay andlaches but the vital issues raised in the writ petition needs to beadjudicated in the cause of justice.Sri Rakesh Dwivedi, learned Counsel for the respondent no. 2 hasfurther pleaded that more than 90% farmers have taken compensationand out of 5827 farmers only 513 farmers have not taken compensation.It is further submitted that the land which is subject matter in these writpetitions is about 550 acres.Learned Counsel for the respondents has placed reliance onfollowing judgments of the apex court for the proposition that writ shallnot be issued if there is negligence and omission on the part of theapplicant to assert his right.AIR 1967 S.C. 1450 Moon Mills Ltd. Vs. R. Meher, AIR 1969S.C. 329 Maharashtra State Road Transport Corporation Vs.Balwant Regular Motor Services & Ors, (1975) 4 S.C.C. 285Aflatoon & others Vs. Lt. Governor of Delhi and others, (1975) 4S.C.C. 296 Indrapuri Griha Nirman Sahakari Samiti Ltd. Vs. TheState of Rajasthan & others, (1980) 2 SCC 83 Pt. GirdharanPrasad Missir & another Vs. State of Bihar, (1984) 2 SCC 624 HariSingh and others Vs. State of U.P. & others, (1986) 4 SCC 566State of M.P. and others Vs. Nandlal Jaiswal & others, 1993 Supp(2) SCC 20 Ramjas Foundation & others Vs. Union of India&others, (1994) 5 SCC 486 P. Chinnanna and others Vs. State ofA.P. and others, (1996) 11 SCC 698 Star Wire (India) Ltd. Vs. Stateof Haryana, 1996 (4) SCC 579, Reliance Petroleum Ltd. Vs. ZaverChand Popatlal Sumaria & others, (1996) 6 S.C.C. 445 State ofRajasthan & others Vs. D.R. Laxmi, (1996) 1 S.C.C. 501 MunicipalCorporation of Greater Bombay Vs. Industrial DevelopmentInvestments Co. Pvt. Ltd. & others, (1998) 4 S.C.C. 387 Larsen &Toubro Ltd. Vs. State of Gujrat & others, (2000) 8 SCC 262 NetaiBag & others Vs. State of West Bengal and others, (2002) 7 S.C.C.

712 Urban Improvement Trust, Udaipur Vs. Bheru Lal and others,(2003) 4 S.C.C.485 Tej Kaur Vs. State of Punjab& others, (2003) 1SCC 335 Northern Indian Glass Industries Vs. Jaswant Singh &others, (2005) 6 S.C.C. 493 Govt. of A. P. & others Vs. Kollutla ObiReddy & others, (2006) 11 SC.C. 464 U.P. Jal Nigam & another Vs.Jaswant Singh & another, (2003) 5 S.C.C. 1 M.T.W. TenzingNamgyal & others Vs. Motilal Lakotia and others, (2008) 4 SCC695, Swaika Properties (P) Ltd. and another Vs. State ofRajasthan & others.The apex Court in AIR 1967 S.C. 1450 Moon Mills Ltd. Vs. R.Meher had occasion to consider the scope of jurisdiction of the HighCourt under Article 226 of the Constitution of India. The apex Courtquoted with approval the principles as stated by Sir Barnes Peacock inLindsay Petroleum Company Vs. Prosper Armstrong Hurd. It isuseful to quote the observations of the apex Court as laid down inparagraph 6:“ In the circumstances of this case, we do notconsider that there is such acquiescence on thepart of the appellant as to disentitle it to a grant ofa writ under Art. 226 of the Constitution. It is truethat the issue of a writ of certiorari is largely amatter of sound discretion. It is also true that thewrit will not be granted if there is such negligenceor omission on the part of the applicant to asserthis right as, taken in conjunction with the lapse oftime and other circumstances, causes prejudice tothe adverse party. The principle is to a greatextent, though not identical with, similar to theexercise of discretion in the Court of Chancery.The principle has been clearly stated by Sir BarnesPeacock in Lindsay Petroleum Co. v. ProsperArmstrong Hurd, Abram Farewell, and John Kemp,(1874) 5 PC 221 at p. 239, as follows:-"Now the doctrine of laches in Courts of Equityis not an arbitrary or a technical doctrine. Where itwould be practically unjust to give a remedy,either because the party has, by his conduct, donethat which might fairly be regarded as equivalentto a waiver of it, or where by his conduct andneglect he has, though perhaps not waiving thatremedy, yet put the other party in a situation inwhich it would not be reasonable to place him ifthe remedy were afterwards to be asserted, ineither of these cases, lapse of time and delay aremost material. But in every case, if an argumentagainst relief, which otherwise would be just, isfounded upon mere delay, that delay of course notamounting to a bar by any statute of limitations,the validity of that defence must be tried uponprinciples substantially equitable. Twocircumstances, always important in such cases,are, the length of the delay and the nature of theacts done during the interval, which might affecteither party and cause a balance of justice orinjustice in taking the one course or the other, sofar as related to the remedy."In the present case, we are of opinion thatthere is no such negligence or laches oracquiescence on the part of the appellant as maydisentitle it to the grant of a writ.”In the case of Maharashtra State Road TransportCorporation Vs. Balwant Regular Motor Services & Ors (Supra),the above proposition was reiterated. The reliance has been placed onthe judgment of the apex Court in Aflatoon & others Vs. Lt. Governorof Delhi and others (supra) . In the said case notification was issued inthe year 1959 for acquisition of the land for planned development ofDelhi. Declaration under Section 6 was issued in March, 1966. Notice

under Section 9 (1) was issued in 1970. Writ petitions were filed in theyear 1972, challenging the acquisition proceedings. One of the grounds ofchallenge was that public purpose was not sufficiently specified in thenotification and the petitioners were prejudiced in effectively exercisingtheir right under Section 5-A. Following was laid down in paragraphs 10and 11:“ 10. That apart, the appellants did not contendbefore the High Court that as the particulars of thepublic purpose were not specified in thenotification issued under S.4, they were prejudicedin that they could not effectively exercise theirright under S.5A. As the plea was not raised by theappellants in the writ petitions filed before the HighCourt, we do not think that the appellants areentitled to have the plea considered in theseappeal.11. Nor do we think that the petitioners in thewrit petitions should be allowed to raise this pleain view of their conduct in not challenging thevalidity of the notification even after thepublication of the declaration under Section 6 in1966. Of the two writ petitions, one is filed by oneof the appellants. There was apparently no reasonwhy the writ petitioners should have waited till1972 to come to this Court for challenging thevalidity of the notification issued in 1959 on theground that the particulars of the public purposewere not specified. A valid notification under S.4 isa sine qua non for initiation of proceedings foracquisition of property. To have sat on the fenceand allowed the Government to complete theacquisition proceedings on the basis that thenotification under Section 4 and the declarationunder Section 6 were valid and then to attack thenotification on grounds which were available tothem at the time when the notification waspublished would be putting a premium on dilatorytactics. The writ petitions are liable to bedismissed on the ground of laches and delay onthe part of the petitioners (see TilockchandMotichand v. H. B. Munshi, (1969) 2 SCR 824 =(AIR 1970 SC 898) and Rabindranath Bose v.Union of india, (1970) 2 SCR 697 = (AIR 1970 SC470 = 1970 Lab IC 402).”In the above case challenge was that particulars of the publicpurpose was not specified in notification under Section 4 and further thesaid submission was not raised in the High Court. No reason was given asto why the writ petitioners waited till 1972 when the notification wasissued in the year 1959. The delay in the said case was more than 12years.In Indrapuri Griha Nirman Sahakari Samiti Ltd. Vs. TheState of Rajasthan & others (supra) again the delay was of nine yearsin challenging the declaration under Section 6. Following was laid down inparagraph 12“ 12. Land Acquisition proceedings commencewith the notification under Section 4 of the Act.Objections are invited under Section 5A of theAct. Therefore a declaration under Section 6 ofthe Act is made. Any challenge to a notificationunder Section 4 and a declaration under Sec.6 ofthe Act should be made within a reasonable timethereafter. The length of the delay is animportant circumstance because of the nature ofthe acts done during the interval on the basis ofthe notification and the declaration.”In Pt. Girdharan Prasad Missir & another Vs. State of Bihar,reported in (1980) 2 SCC 83, section 4 notification was issued on 22nd

May, 1956 and Section 6 was issued in December, 1958, the writ petitionwas filed in March, 1964 i.e. after about more than five and half years ofsection 6 notification. In Hari Singh and others Vs. State of U.P. &others reported in (1984) 2 SCC 624, the delay was of two and halfyears. The plea was taken that the petitioners were not aware of thenotification for acquisition. The apex Court did not accept the plea thatthey were not aware of the acquisition proceedings and dismissed thewrit petitions on the ground of laches. In paragraph 8 of the judgment,apex Court also observed that some photographs of the land wereproduced before the Court which showed that work of construction hadalready been commenced. In State of M.P. and others Vs. NandlalJaiswal & others reported in (1986) 4 SCC 566, the apex Court laiddown that issue of appropriate writ under Article 226 of the Constitutionof India is discretionary and High Court in exercise of its discretion doesnot ordinarily assist the tardy and indolent or the acquiescent and thelethargic. The Court held that rule of laches or delay is not a rigid rulewhich can be cast in a straitjacket formula. Following observations madein paragraph 24 being relevant is to be noticed“ 24. ...... Of course, this rule of laches or delayis not a rigid rule which can be cast in astraitjacket formula, for there may be cases wheredespite delay and creation of third party rights theHigh Court may still in the exercise of its discretioninterfere and grant relief to the petitioner. Butsuch cases where the demand of justice is socompelling that the High Court would be inclinedto interfere in spite of delay or creation of thirdparty rights would by their very nature be few andfar between. Ultimately it would be a matter withinthe discretion of the Court; ex hypothesis everydiscretion must be exercised fairly and justly so asto promote justice and not to defeat it.”Ramjas Foundation & others Vs. Union of India& othersreported in 1993 Supp (2) SCC 20 was a case where section 4 notificationwas issued in the year 1959. Section 6 notification was issued in the year1968-69. Writ petition was filed in the year 1973. The objections werefiled under Section 5-A by thousands of persons. The writ petitions werefiled in the year 1970, when notice under Section 9 was issued which writpetitions were dismissed. The appellants before the apex Court hadinitially filed a writ petition in the year 1973 which was permitted to bewithdrawn and thereafter fresh writ petitions were filed in the year 1978on identical grounds. In the above facts, the Court held that there is noexplanation for the delay and the writ petition was dismissed on theground of laches. P. Chinnanna and others Vs. State of A.P. andothers, (1994) 5 SCC 486 was a case where writ petition was filed afterseven years. Star Wire (India) Ltd. Vs. State of Haryana (1996) 11SCC 698 was a case where section 4 notification was issued in the year1976. Section 6 was issued in the year 1977 award was made in the year1981 and writ petition was filed in the year 1994. Writ petitioners weresubsequent purchasers after issue of notification under Section 4 of theAct. In the above fact, the Court dismissed the writ petition on theground that petitioners approached belatedly and their title was a voidtitle.Much reliance has been placed by the petitioners on the judgmentof the apex Court in Reliance Petroleum Ltd. Vs. Zaver ChandPopatlal Sumaria & others 1996 (4) SCC 579. In the said case, thenotification under Section 4 was issued in 1993. Declaration was made inthe year 1994 and the award was also made in December, 1994. In thesaid case when the matter was pending before the Land AcquisitionOfficer before an award was passed, the respondents for themselves andon behalf of others addressed a letter dated 25.10.1994 stating that theyhave no objection to the acquisition of the land but they wanted onlycompensation as demanded therein. The Court held that petitioners couldhave immediately filed the writ petition when the notification underSection 6 was issued. They took their chance in the award proceedingsand only when award was not in their favour, they filed the writ petition.50

The Court took the view that only object of the writ petitioner was to getthe maximum price for the land acquired. In the aforesaid facts, the apexCourt took the view that High Court committed an error in entertainingthe writ petition and exercising the discretionary jurisdiction to quash thesection 4 and section 6 notification and award. The apex Court did not setaside the order of the High Court on the ground that there wasunexplained laches. In the cases of State of Rajasthan & others Vs.D.R. Laxmi (supra), Municipal Corporation of Greater Bombay Vs.Industrial Development Investments Co. Pvt. Ltd. & others(supra) and Larsen & Toubro Ltd. Vs. State of Gujrat & others(supra), same proposition has been laid down by the apex Court.In (2000) 8 SCC 262 Netai Bag & others Vs. State of WestBengal and others , challenge was after three years of the lease. Theapex Court held that huge project had actually come into existence. Thechallenge was negatived. The judgement of the apex Court in UrbanImprovement Trust, Udaipur Vs. Bheru Lal and others (2002) 7S.C.C. 712 and Tej Kaur Vs. State of Punjab& others (2003) 4S.C.C.485, laid down similar propositions. In Northern Indian GlassIndustries Vs. Jaswant Singh & others (2003) 1 SCC 335, the writpetition was filed after 17 years of award. In the said case, the petitionershad sought for enhancement of compensation without challenging thenotification under Sections 4 and 6. Having sought for enhancement ofcompensation, they filed writ petition even three years after the appealwas disposed of by the High Court. Following was laid down in paragraph9:“ 9. Looking to the facts of the present case andconduct of the respondents 1-5, the High Courtwas not at all justified in ignoring the delay andlaches and granting relief to them. As alreadynoticed, the respondents 1-5 approached the HighCourt by filing writ petition almost after a period of17 years after finalization of the acquisitionproceedings. They accepted the compensationamount as per the award and sought forenhancement of the compensation amountwithout challenging the notification issued underSections 4 and 6. Having sought for enhancementof compensation only, they filed writ petition eventhree years after the appeals were disposed of bythe High Court in the matter of enhancement ofcompensation. There is no explanation whatsoeverfor the inordinate delay in filing the writ petitions.Merely because full enhanced compensationamount was not paid to the respondents, thatitself was not a ground to condone the delay andlaches in filing the writ petition. In our view, theHigh Court was also not right in orderingrestoration of land to the respondents on theground that the land acquired was not used forwhich it had been acquired. It is well-settledposition in law that after passing the award andtaking possession under Section 16 of the Act, theacquired land vests with the Government free fromall encumbrances. Even if the land is not used forthe purpose for which it is acquired, the landowner does not get any right to ask for revestingthe land in him and to ask for restitution of thepossession. This Court as early as in 1976 inGulam Mustafa and others v. The State ofMaharashtra and others ((1976) 1 SCC 800) inpara 5 has stated thus: AIR 1977 SC 448“U.P. Jal Nigam & another Vs. Jaswant Singh & another(2006) 11 SC.C. 464 was a case where an employee accepted the retirelbenefit and thereafter sought to challenge the retirement, in suchcircumstance, the challenge was not accepted. M.T.W. TenzingNamgyal & others Vs. Motilal Lakotia and others (2003) 5 S.C.C. 1was a case where owner of the land accepted the compensation without

any dimmer. It was held that in such circumstances, the owner as well asthe successor in interest held stopped and precluded from denying thevesting of the said land in Sikkim Darbar. The said case was on its ownfacts. Last case relied by the counsel for the petitioner is SwaikaProperties (P) Ltd. and another Vs. State of Rajasthan & others(2008) 4 SCC 695. In the above case, notice under Rajasthan UrbanImprovement Act, 1959 for acquisition was issued on 25.6.1975.Objection was filed which was rejected in the year 1984 and declarationwas issued after issuance of notice. A writ petition was filed by theappellant before the Calcutta High Court. Calcutta High Court granted aninterim order which was set aside by the apex Court vide its order dated8.4.1985 holding that Calcutta High Court had no territorial jurisdiction toentertain the writ petition. In 1987, the writ petition was filed in theRajasthan High Court which was withdrawn on 10.3.1989, praying forquashing of the notification dated 8.2.1984. Following was laid down inparagraph 14“ 14. We do not find any substance in thesubmissions of the counsel for the appellants. Nodoubt, the appellants had filed a writ petition beforethe Calcutta High Court challenging the acquisitionproceedings, but the said writ petition wasdismissed by this Court on 08th April, 1985 holdingthat the Calcutta High Court did not have theterritorial jurisdiction to entertain the writ petition.Thereafter, till 1987 the appellants did not challengethe acquisition proceedings and the writ petitionwas filed by it before the Rajasthan High Courtwhich had the territorial jurisdiction in the matterand the same was withdrawn which was again filedwithin the next four months thereof, meaningthereby, during the interregnum the appellants sleptover the matter. However, the appellants have notbeen able to give any explanation for the same.”Now the cases relied by counsel for the petitioners need to beconsidered. Reliance has been placed on AIR 1987 S.C. 1353 Collector,Land Acquisition, Anantnag and another Vs. Mst. Katiji & others.The apex Court was considering ambit and scope of condonation of delayunder Section 5 of the Limitation Act. The apex Court held thatexpression sufficient cause is adequately elastic to enable the Courts toapply the law in a meaningful manner which subserves the ends ofjustice. Following principles were laid down in paragraph 3 of thejudgment :“3. The legislature has conferred the power tocondone delay by enacting S. 51 of the IndianLimitation Act of 1963 in order to enable theCourts to do substantial justice to parties bydisposing of matters on 'merits'. The expression"sufficient cause" employed by the legislature isadequately elastic to enable the Courts to applythe law in a meaningful manner which subservesthe ends of justice that being the life-purpose forthe existence of the institution of Courts. It iscommon knowledge that this Court has beenmaking a justifiably liberal approach in matters,instituted in this Court. But the message does notappear to have percolated down to all the otherCourts in the hierarchy. And such a liberalapproach is adopted on principle as it is realizedthat :-1 "Any appeal or any application, other than anapplication under any of the provisions of 0. XXI ofthe Code of Civil Procedure, 1908, may beadmitted after the prescribed period if theappellant or the applicant satisfies the Court thathe had sufficient cause for not preferring theappeal or making the application within suchperiod."

1. Ordinarily a litigant does not stand to benefitby lodging an appeal late.2. Refusing to condone delay can result in ameritorious matter being thrown out at the verythreshold and cause of justice being defeated. Asagainst this when delay is condoned the highestthat can happen is that a cause would be decidedon merits after hearing the parties.3. "Every day's delay must be explained" doesnot mean that a pedantic approach should bemade. Why not every hour's delay. every second'sdelay ? The doctrine must be applied in a rationalcommon sense pragmatic manner.4. When substantial justice and technicalconsiderations are pitted against each other, causeof substantial justice deserves to be preferred forthe other side cannot claim to have vested right ininjustice being done because of a non-deliberatedelay.5. There is no presumption that delay isoccasioned deliberately, or on account of culpablenegligence, or on account of mala fides. A litigantdoes not stand to benefit by resorting to delay. Infact he runs a serious risk.6. It must be grasped that judiciary is respectednot on account of its power to legalize injustice ontechnical grounds but because it is capable ofremoving injustice and is expected to do so. “The principles which have been ennunciated by the apex Court forcondonation of delay under Section 5 of the Limitation Act can very wellbe utilized to decide as to whether a writ petition be thrown out on theground of delay and laches or entertained in exercise of its soundjurisdiction. Much reliance has been placed by the petitioners’ counsel onthe judgment of the apex Court in (2007) 9 SCC 304 VyaliKavalHousebuilding Coop. Society Vs. V. Chandrappa. In the said case,notification under Section 4 was issued on 22.12.1984, declaration underSection 6 was issued on 21.2.1986 and award was passed on 16.11.1987.The possession of land was taken on different dates up to the year 1992.The writ petitions were filed in the year 1998 challenging the landacquisition proceedings. An objection was taken by the society in whosefavour the land was acquired contending that writ petition was hopelesslybarred by time being delayed by 14 years from the date of the issue ofthe notification under Section 4. It was further contended that petitionershave participated in the inquiry under Section 5-A and have receivedsubstantial amount from the appellant society pursuant to the agreementexecuted in their favour. Learned Single Judge dismissed the writpetition on the ground of delay and on the ground that the petitionershave participated in the proceedings and they shall be treated to haveacquiesced. Appeal was filed by the respondents which was allowed bythe Division Bench. The Court held that acquisition was colourableexercise of the power therefore, the delay cannot be a good ground todismiss the writ petition. Against the Division Bench judgment, the societyfiled Civil Appeals challenging the Division Bench judgment. The ApexCourt upheld the judgment of the Karnataka High Court and dismissedthe appeal. The Apex Court laid down that when the acquisition wastotally malafide and not for bonafide purpose, the ground of delay andacquiescence had no substance. It is useful to quote the relevantobservations of the apex Court made in paragraphs 3,4 and 9“ 3. This writ petition was contested by theappellant-society as respondent and it was allegedthat it was hopelessly barred by time beingdelayed by 14 years and it was also submitted thatthe writ petitioners had participated in the inquiryunder Section 5A of the Act and have also receivedsubstantial amount from the appellant-societypursuant to the agreement executed in theirfavour. Learned Single Judge dismissed the writ

petition on the ground of being hopelessly barredby time and the writ petitioners participated in theproceedings therefore they have acquiesced in thematter. Aggrieved against this order passed bylearned Single Judge, a writ appeal was filed bythe respondents which came to be allowed by theDivision Bench for the reasons mentioned inanother writ appeal decided by the same DivisionBench headed by the Chief Justice of the HighCourt on 17.1.2000. In that writ appeal theDivision Bench held that the entire acquisition onbehalf of the appellant-society was actuated withfraud as held in Narayana Reddy v. State ofKarnataka [ILR 1991 Kar 2248]. In that case it washeld as follows :"As seen from the findings of G.V.K.Rao InquiryReport, in respect of five respondent societies andthe report of the Joint Registrar in respect ofVualikaval House Building Co-operative Society,these Societies had indulged in enrolling largenumber of members illegally inclusive of ineligiblemembers and had also indulged in enrolling largenumber of bogus members. The only inferencethat is possible from this is that the office bearersof the societies had entered into unholy alliancewith the respective agents for the purpose ofmaking money, as submitted for the petitionersotherwise, there is no reason as to why such anAgreement should have been brought about by theoffice bearers of the Society and the agents.Unless these persons had the intention of makinghuge profits as alleged by the petitioners, theywould not have indulged in enrolment of ineligibleand bogus members. The circumstance thatwithout considering all these relevant materials theGovernment had accorded its approval, is sufficientto hold that the agents had prevailed upon theGovernment to take a decision to acquire the landswithout going into all those relevant facts. Theirresistible inference flowing from the facts andcircumstances of these cases is, whereas the poserconferred under the Land Acquisition Act is foracquiring lands for carrying out housing scheme bya housing society, in each of the cases theacquisition of lands is not for a bona fide housingscheme but is substantially for the purpose ofenabling the concerned office bearers ofrespondent- societies and their agents to indulge insale of sites in the guise of allotment of sites to theMembers/ Associate members of the society tomake money as alleged by the petitioners andtherefore it is a clear case of colourable exercise ofpower. Thus the decision of the Government toacquire the lands suffers from legal mala fides andtherefore the impugned Notifications are liable tobe struck down."4. In view of aforesaid observation, their Lordshipsof Division Bench held that since the acquisitionwas colourable exercise of the power, therefore,delay cannot be a good ground to dismiss the writpetition. The said judgment of the Division Benchof the High Court of Karnataka was affirmed bythis Court in Special Leave Petition Nos.(c)..CC525-532 of 1999 and Special Leave Petition Nos.(c)..CC 504-522 of 1999 decided on 14.7.1999 and itwas held that the appellant-society is a bogushouse building society and accordingly, the order

passed by the learned Single Judge was set asideby Division Bench. Against the order of the DivisionBench passed in Writ Appeal No.2294 of 1999 areview petition was filed which was dismissed on22.3.2002. Hence both these appeals.9. Learned counsel for the respondents has alsoinvited our attention that same notification was setaside by the High Court and the said order of theHigh Court was also upheld by this Court bydismissing the S.L.P.(C) No.6196 of 1998 on7.4.1998 and S.L.P.(c) ..CC 495-a498 of 1999 on14.7.1999 concerning the very same appellantsociety. In this background, when the acquisitionhas been found to be totally mala fide and not forbona fide purpose, the ground of delay andacquiescence in the present case has nosubstance. Learned counsel for the appellant triedto persuade us that as the amount in question hasbeen accepted by the respondents, it is not openfor them now to wriggle out from that agreement.It may be that the appellant might have tried tosettle out the acquisition but when the wholeacquisition emanates from the aforesaid taintednotification any settlement on the basis of thatnotification cannot be validated. The fact remainsthat when the basic notification under which thepresent land is sought to be acquired stood vitiatedthen whatever money that the appellant has paid,is at its own risk. Once the notification goes, nobenefit could be derived by the appellant. We aresatisfied that issue of notification was mala fideand it was not for public purpose, as has beenobserved by this Court, nothing turns on thequestion of delay and acquiescence. LearnedCounsel for respondents raised other pleas likedecree for partition was granted among brothersand they were not made parties, we are not goinginto those questions when we are satisfied thatwhen acquisition stand vitiated on account of malafide, nothing remains further.”In the above case the challenge to acquisition proceedings wascontested firstly on the ground that there is great delay in challenging theacquisition proceedings and secondly that the compensation has alreadybeen accepted by the land owners, hence the challenge is unsustainable.The Apex Court repelled both the objections and has laid down followingin paragraphs 9, “(i) ..... when the acquisition has been found to betotally malafide and not for bona fide purpose, the ground of delay andacquiescence in the present case has no substance.... and (ii) ..... learnedcounsel for the appellant tried to persuade us that as the amount inquestion has been accepted by the respondents, it is not open for themnow to wriggle out from that agreement. It may be that the appellantmight have tried to settle out the acquisition but when the wholeacquisition emanates from the aforesaid tainted notification anysettlement on the basis of that notification cannot be validated. The factremains that when the basic notification under which the present land issought to be acquired stood vitiated then whatever money that theappellant has paid, is at its own risk. Once the notification goes, nobenefit could be derived by the appellant”. The Apex Court in the abovecase (Vyalikaval Housebuilding Coop. Soceity vs. V. Chandrappa)approved the view of the Division Bench of the High Court that since theacquisition was in colourable exercise of the power, delay cannot be agood ground to dismiss the writ petition.To recapitulate, the submissions of the petitioners in these writpetitions are that land acquisition by the State in the present case was ina colourable exercise of power. The application was made by thecompany after depositing part of the compensation and no part of thecompensation was to be paid by the State Government when the

application had been moved by the company or till the agreement wasexecuted by the Company and State under Section 41 of the Act.Acquisition by the State as an acquisition for public purpose by invokingsection 17 was a colourable exercise of power. The acquisition beingacquisition for a company, part VII of the Act and Land Acquisition(Companies) Rules, 1963 were required to be adhered to. The State withan intention to byepass the statutory provisions and to unduly help therespondent no. 2 had proceeded to acquire the land as acquisition forpublic purposes.Thus, in the present case also, the challenge to the acquisition ison the ground of colourable exercise of power. The petitioners furthersubmission in all the writ petitions is that petitioners are in possession oftheir agricultural land inspite of the State having taken symbolicpossession in the year 2005, the petitioners are carrying out theiragricultural activities throughout. It has been specifically pleaded that noproject construction has at all taken on the spot nor any Step towardsconstruction of the project has been taken as yet although the time whichwas allowed in the agreement under Section 41 has long lapsed. In thiscontext, the submissions made by counsel for the respondent no. 2 arerelevant to be noticed. The case of the respondent no. 2 is thatpossession has been handed over to the State and conveyance deed hasalready been executed in favour of the company on 23.11.2005 and theallegation that farmers are still in possession is denied. In the counteraffidavit filed on behalf of respondent no. 2 in writ petition No. 55578 of2008 following has been stated in paragraph 27:“ The company had set up a barbed fencingwhich was broken later by farmers uponinstigation by political leaders. Thereafter thecompany had constructed a wall extending to 8Kms. The wall is stil there on the spot. The siteoffice of the company also exists on the land.However, even if some farmers unlawfullyencroached the land that will not indicate thatpossession was taken on paper only. In theinstant case, the land had duly vested in theState Government under section 16 of the LandAcquisition Act and, thereafter, the same hasbeen legally and duly transferred to thecompany.”From the own pleading of the respondent no. 2, it is clear thatcompany had initially set up a barbed fencing and thereafter constructeda wall extending to 8 Kms. It is further claimed that site office also existson the land. It is further alleged that even some farmers unlawfullyencroached the land that will not indicate that possession was taken onpapers only. Thus, on own showing of the respondent no. 2 no projectwork has yet started, no construction is even claimed apart from siteoffice and boundary wall.The acquisition in question was acquisition proceedings initiated byState by dispensing inquiry under Section 5-A denying opportunity offiling objections. It is true that petitioners have signed Kararnama andtaken whatever compensation was given by the respondents but it isclear that petitioners have been raising their protests and continued theiragitations. Agitation was started being noticed since May, 2006. Thecompulsory acquisition of land is a serious matter and the persons, whowere pitted against the petitioners were the mighty State and respondentno. 2 company, the petitioners being thousands in number, took time inapproaching the Court raising their grievance specially when the farmershad no opportunity and the inquiry under Section 5-A had been dispensedwith. It is relevant to quote the observations of the apex Court in (1980)2 SCC 471, State of Punjab Vs. Gurdial Singh & others followingwas laid down in paragraph 16:“…..It is fundamental that compulsory taking of aman’s property is serious matter and the smaller theman the more the serious matter. Hearing himbefore depriving him is both reasonable and preemptiveof arbitrariness and denial of thisadministration fairness is constitutional anathema

except for good reasons. ........”As noted above, when the second notification under Section 4was published on 29.8.2006 for acquisition of further land, full-fledgedagitation was already going on protesting the acquisition. The farmersneither accepted compensation nor executed any Kararnama with regardto the land which is subject matter of 2006 notification.Scattered number of farmers out of huge number of farmers couldstart knocking the doors of the Court, challenging the acquisition apartfrom a Public Interest Litigation which was filed in the apex Court inOctober, 2007 in which acquisition notification dated 11.2.2004 was alsochallenged. A writ petition by individual farmer was also filed in the apexCourt, which was dismissed as withdrawn on 11.1.2008 with liberty toapproach the High Court. Most of the writ petitions in the High Courtwere filed in January, 2008, February, 2008 and March, 2008, last havingbeen filed in October, 2008. It is admitted case of the respondents thatno inquiry under the Land Acquisition (Companies) Rules, 1963 has beentaken in the impugned acquisition proceedings nor part VII of the Acthas been complied. Rule 4 of the Land Acquisition (Companies) Rules,1963, provides a mandatory inquiry with regard to several subjectsincluding as to whether any alternative suitable site can be found, if theacquisition is for the good agricultural land. Rule 4 (1) of the LandAcquisition (Companies) Rules, 1963 is quoted as below:“ Appropriate Government to be satisfiedwith regard to certain matters beforeinitiating acquisition proceedings.4. (1) Whenever a company makes anapplication to the appropriate Government foracquisition of any land, that Government shalldirect the Collector to submit a report to it on thefollowing matters, namely :—(i) that the company has made its bestendeavour to find out lands in the locality suitablefor the purpose of the acquisition;(ii) that the company has made all reasonableefforts to get such lands by negotiation with theperson interested therein on payment ofreasonable price and such efforts have failed;(iii) that the land proposed to be acquired issuitable for the purpose;(iv) that the area of land proposed to be acquiredis not excessive;(v) that the company is in a position to utilisethe land expeditiously; and(vi) where the land proposed to be acquired isgood agricultural land, that no alternative suitablesite can be found so as to avoid acquisition of thatland.”There is no denial that 2500 acres of land which is sought to beacquired is good agricultural land.Taking into consideration over all facts and circumstances, we arenot inclined to throw the writ petitions on the ground of delay and laches.The writ petitioners have made out a case for consideration of variousissues by this Court which have arisen in these writ petitions. Thus, thesubmissions of learned counsel for the respondents that writ petitions bethrown out on the ground of delay and laches and other submissionsneed not be considered, does not merit acceptance.From the pleadings of the parties and examination of the originalrecords, following facts emerged with regard to impugned acquisitionproceedings;(1) an application dated 19.1.2004 was submitted by Reliance DelhiPower Private Ltd. to the Collector Ghaziabad as well as to theChief Secretary of the State of U.P. The Collector proceeded toinquire the proposal submitted by the respondent no. 2. Theproposal was submitted by the respondent No. 2 with deposit of10% of the acquisition costs and 10% of the estimatedcompensation (amount of Rs. 16 Crores). Acquisition proceedingswere not initiated pursuant to any decision of the State

Government or its any of the Departments.(2) the land measuring 2500 acres was identified and selected byReliance Delhi Power Pvt. Ltd. and in the application submitted tothe Collector, Ghaziabad, the name of seven villages werementioned by company. The site was neither selected by theState Government or its any of the Departments or by Collector,Ghaziabad for acquisition.(3) the Collector Ghaziabad after conducting the necessary inquirysent the proposal for acquisition to the Director Land AcquisitionDirectorate Board of Revenue U.P. Lucknow. In the letter dated24.1.2004 it was stated that the proposal for land acquisition hasbeen received from Reliance Delhi Power Pvt. Ltd. for acquisitionof land with regard to 735.45 acres of land of village KakarmaPargana Dasna, Tahsil Hapur. It was further stated that RelianceDelhi Power Pvt Ltd deposited the required 10% acquisition costand 10% of estimated compensation in the specified head. Theseparate letters dated 24.1.2004 were forwarded by the CollectorGhaziabad with regard to seven villages along with plot numbersand area sought to be acquired. A proposed notification undersection 4(1) also invoking the urgency provisions of Sub-section(1) of Section 17 and Sub-section (4) of setion 17 was submitted.After receipt of the letter by the Collector, Ghaziabad, DirectorLand Acquisition examined the proposal and forwarded it by letterdated 28.1.2004 to the Principal Secretary, Energy, State of U.P.Lucknow. Separate letters dated 28.1.2004 were issued fordifferent villages in question. In the letter dated 28.1.2004 it wasspecifically mentioned that Reliance Delhi Power Private Limited isa private Company hence taking into consideration LandAcquisition (Companies) Rules, 1963 and Part VII and Part IIISections 38 to 55 of the Land Acquisition Act and after getting theagreement executed, notification under section 4(1)/17 be issued.Collector thus completed the entire proceedings and forwardedthe proposal of the company for land acquisition for a companyafter following parts VII and VIII.(4) the proposal received from the Director Land Acquisition videletter dated 28.1.2004 was examined by the Department ofEnergy Government of U.P. and it was decided to obtainrecommendation of Bhumi Upyog Parishad. Bhumi Upyog Parishadsubmitted a note through Principal Secretary, Niyojan on31.1.2004 that the Reliance Delhi Power Pvt. Ltd. being a priviatecompany, keeping into consideration part VII of the LandAcquisition Act as amended according to the provisions ofSections 38 to 44-B proceedings be undertaken after takingapproval from the Department of Revenue and Law. Therecommendations were duly approved by the Chief Minister on31.1.2004. The Secretary, Revenue submitted a note that beforeissuance of section 4(1)/17 notification agreement be executed asrequired by paragraph 14 of the Land Acquisition Manual and theentire cost of acquisition shall be necessary to be got deposited.Subsequently although it was earlier recommended thatnotification under section 4(1)/17 be issued after execution of theagreement as required under section 41 but it was decided toissue notification under section 4(1) by invoking Section 17 andagreement be executed thereafter. After publication of thenotification under section 4(1)/17 the draft of the agreement ascontemplated under section 41 of the Act was approved byHon'ble the Chief Minister on 19.2.2004 and thereafter it wasexecuted. Under section 41, the entire cost of the acquisition wasto be born by the company and the State was not to bear anycost of acquisition.(5) the land acquisition proceedings were not initiated under anyproject/scheme submitted by Energy Department or any otherDepartment of the State nor the acquisition in question was toresult into any project of the State rather the agreementstipulated transfer of the land in favour of the respondent No. 2.(6) the decision to bear 60% costs of the acquisition was taken afteramendments in power policy was approved on 8.6.2004 and

accordingly, the State support agreement was executed on16.6.2004.From the aforesaid, it is fully established that the proceedings foracquisition were taken on an application of respondent no. 2 on19.1.2004 as acquisition for a company. When the notification was issuedunder section 4, the acquisition of the land was for the company and theacquisition being not acquisition initiated by the State under any of itsown projects or scheme, could not be treated as acquisition for publicpurpose.The above discussion answers the issue No. 2 that the acquisitionwas for a company.The rest of the issues as noticed above are interconnected and arebeing taken together. Before we proceed to consider the submissions anyfurther, it is necessary to notice the relevant provisions of the LandAcquisition Act, 1894 specially the amendments made in the LandAcquisition Act, 1894 by Act No. 68 of 1984.Firstly, the provisions of the Land Acquisition Act as it existedprior to the 1984 amendment need to be noticed. Section 3 of the Act isa definition clause which defines various expressions. Section 3(f) statedthat the “public purpose” includes the provisions of village-sites indistricts in which the appropriate government shall have declared bynotification in the official gazette. Section 4 provided that whenever itappears to the appropriate Government that the land in any locality isneeded for any public purpose a notification to that effect shall bepublished. Section 6 provided that subject to provisions of part VII of theAct when appropriate Government is satisfied after considering thereport, if any made under section 5-A, Sub-section (2), that anyparticular land is needed for any public purpose or for a company, adeclaration shall be made to that effect. Section 17 provided that in caseof urgency, whenever the appropriate Government so directs, theCollector though no such award has been made, may, on the expirationof 15 days, from the publication of the notice mentioned in Sub-section(1) of section 9 take possession of any waste or arable land needed forpublic purposes or for a company. Section 39 provided that provisions ofsections 6 to 37 shall not be put in force in order to acquire land for anycompany, unless the previous consent of the appropriate Governmenthas been taken and unless the Company has executed the agreement.The amendment in the Act was necessitated for the object andpurpose as specifically stated in the statements of object and reasons ofthe Amendment Act, 1984. It is useful to quote the relevant portion ofthe statement of objects and reasons herein below:“ Prefatory Note- Statement of Objects andReasons.- With the enormous expansion of theState's role in promoting public welfare andeconomic development since independence,acquisition of land for public purposes,industrialisation, building of institutions, etc., hasbecome far more numerous than ever before. Whilethis is inevitable, promotion of public purpose has tobe balanced with the rights of the individual whoseland is acquired, thereby often depriving him of hismeans of livelihood. Again, acquisition of land forprivate enterprises ought not to be placed on thesame footing as acquisition for the State or for anenterprise under it. The individual and institutionswho are unavoidably to be deprived of theirproperty rights in land need to be adequatelycompensated for the loss keeping in view thesacrifice they have to make for the larger interestsof the community. The pendency of acquisitionproceedings for long periods often causes hardshipsto the affected parties and renders unrealistic thescale of compensation offered to them.2. It is necessary, therefore, to restructure thelegislative framework for acquisition of land so thatit is more adequately informed by this objective ofserving the interests of the community in harmony

with the rights of the individual. Keeping the aboveobjects in view and considering therecommendations of the Law Commission, the LandAcquisition Review Committee as well as the StateGovernments, institutions and individuals, proposalsfor amendment to the Land Acquisition Act, wereformulated and a Bill for this purpose wasintroduced in the Lok Sabha on the 30th April, 1982.The same has not been passed by either House ofParliament. Since the introduction of the Bill, variousother proposals for amendment of the Act havebeen received and they have also been consideredin consultation with State Governments and otheragencies. It is now proposed to include all theseproposals in a fresh Bill after withdrawing thepending Bill. The main proposals for amendment areas follows:-(i) The definition of “public purpose” as contained inthe Act is proposed to be so amended as to includea longer illustrative list retaining, at the same time,the inclusive character of the definition.(ii) Acquisition of land for non-Governmentcompanies under the Act will henceforth be made inpursuance of Part VII of the Act in all cases.(iii) ...........”The Legislature noticed that with the enormous expansion of theState's role in promoting public welfare and economic developmentacquisition of land for public purpose has become far more numerousthan ever before, which is inevitable but the same is to be balanced withthe rights of the individual whose land is acquired, thereby oftendepriving him of his means of livelihood. It was further stated thatacquisition of land for private enterprises ought not to be placed on thesame footing as acquisition for the State or for an enterprise under it.One of the main proposals for amendment as noticed in the statement ofobjects and reasons was “.. acquisition of land for non- Governmentcompanies under the Act will henceforth be made in pursuanceof Part VII of the Act in all cases”.Consequently, the amendments were made in sections 3(f), 4,6,17and 39. Following is the tabular chart of unamended and amendedprovisions of the above sections:Before 1984 Amendment After 1984 amendment3 (f) the expression “publicpurpose” includes the provision ofvillage-sites in districts in which theappropriate Government shall havedeclared by notification in theOfficial Gazette that it is customaryfor the Government to make suchprovision; and3 (f) the expression “publicpurpose” includes-(i) the provision of village-sites, orthe extension, planneddevelopment or improvement ofexisting village-sites;(ii) the provision of land for town orrural planning;(iii) the provision of land forplanned development of land frompublic funds in pursuance of anyscheme or policy of Governmentand subsequent disposal thereof inwhole or in part by lease,assignment or outright sale withthe object of securing furtherdevelopment as planned;(iv) the provision of land for a

corporation owned or controlled bythe State;(v) the provision of land forresidential purposes to the poor orlandless or to persons residing inareas affected by naturalcalamities, or to persons displacedBefore 1984 Amendment After 1984 amendmentor affected by reason of theimplementation of any schemeundertaken by Government, anylocal authority or a corporationowned or controlled by the State;(vi) the provision of land forcarrying out any educational,housing, health or slum clearancescheme sponsored by Governmentor by any authority established byGovernment for carrying out anysuch scheme, or with the priorapproval of the appropriateGovernment, by a local authority,or a society registered under theSocieties Registration Act, 1860 (21of 1860), or under anycorresponding law for the timebeing in force in a state, or a cooperativesociety within themeaning of any law relating to cooperativesocieties for the timebeing in force in any State;(vii) the provision of land for anyother scheme of developmentsponsored by Government or withthe prior approval of theappropriate Government, by a localauthority;(viii) the provision of any premisesor building for locating a publicoffice,(but does not includeacquisition of land forcompanies);4 (1) Whenever it appears to the[appropriate Government] that landin any locality [is needed or] islikely to be needed for any publicpurpose, a notification to that effectshall be published in the OfficialGazette, and the Collector shallcause public notice of thesubstance of such notification to begiven at convenient places in thesaid locality.4 (1) Whenever it appears to theappropriate Government the land inany locality [is needed or] is likelyto be needed for any publicpurpose or for a company, anotification to that effect shall bepublished in the Official Gazette[and in two daily newspaperscirculating in that locality of whichat least one shall be in the regionallanguage], and the Collector shallcause public notice of theBefore 1984 Amendment After 1984 amendment

substance of such notification to begiven at convenient places in thesaid locality [(the last of the datesof such publication and the givingof such public notice , beinghereinafter referred to as the dateof the publication of thenotification).6. Declaration that land is requiredfor a public purpose. - (1) Subjectto the provision of Part VII of thisAct, [when the [appropriateGovernment] is satisfied, afterconsidering the report, if any, madeunder section 5A, sub-section (2)],that any particular land is neededfor public purpose, or for aCompany, a declaration shall bemade to that effect under thesignature of a Secretary to suchGovernment or of some officer dulyauthorized to certify its orders,[and different declarations may bemade from time to time in respectof different parcels of any landcovered by the same notificationunder section 4, sub-section (I)irrespective of whether one reportor different reports has or havebeen made (wherever required)under section 5A, sub-section (2)];[Provided that no declaration inrespect of any particular landcovered by a notification undersection 4, sub-section (1),published after the commencementof the Land Acquisition(Amendment and Validation)Ordinance, 1967 (1 of 1967), shallbe made after the expiry of threeyears from the date of suchpublication ;Provided further that no suchdeclaration shall be made unlessthe compensation to be awardedfor such property is to be paid by acompany, or wholly or partly out of6. Declaration that land is requiredfor a public purpose. - (1) Subjectto the provision of Part VII of thisAct, [appropriate Government] issatisfied, after considering thereport, if any, made under section5A, sub-section (2), that anyparticular land is needed for apublic purpose, or for a Company, adeclaration shall be made to thateffect under the signature of aSecretary to such Government or ofsome officer duly authorized tocertify its orders [and differentdeclarations may be made fromtime to time in respect of differentparcels of any land covered by thesame notification under section 4,sub-section (I) irrespective ofwhether one report or different

reports has or have been made(wherever required) under section5A, sub-section (2);Provided that no declaration inrespect of any particular landcovered by a notification undersection 4, sub-section (1)-(i) published after thecommencement of the LandAcquisition (Amendment andValidation) Ordinance, 1967 (1 of1967), but before thecommencement of the LandAcquisition (Amendment) Act, 1984(68 of 1984), shall be made afterthe expiry of three years from thedate of the publication of thenotification; orBefore 1984 Amendment After 1984 amendmentpublic revenues or some fundcontrolled or managed by a localauthority.(2) [Every declaration] shall bepublished in the Official Gazette,and shall state the district or otherterritorial division in which the landis situate, the purpose for which itis needed, its approximate area,and , where a plan shall have beenmade of the land, the place wheresuch plan may be inspected.(3) The said declaration shall beconclusive evidence that the land isneeded for a public purpose of fora Company, as the case may be;and after making such declaration,the [appropriate Government] mayacquire the land in mannerhereinafter appearing.(ii) published after thecommencement of the LandAcquisition (Amendment) Act, 1984(68 of 1984), shall be made afterthe expiry of one year from thedate of the publication of thenotification:17. Special powers in cases ofurgency. – (1) In cases of urgency,whenever the [appropriateGovernment], so directs, theCollector, though no such awardhas been made, may, on theexpiration of fifteen days from thepublication of the notice mentionedin section 9, sub-section 1), takepossession of any waste or arableland needed for public purposes orfor a Company. Such land shallthereupon [vest absolutely in the[Government], free from allencumbrances.(2) Whenever, owing to anysudden change in the channel ofany navigable river or otherunforeseen emergency, it becomesnecessary for any RailwayAdministration to acquire the

immediate possession of any landfor the maintenance of their trafficor for the purpose of makingthereon a river-side or ghat station,17. Special powers in case ofurgency. – (1) In cases of urgencywhenever the appropriateGovernment, so directs, theCollector, though no such awardhas been made, may, on theexpiration of fifteen days from thepublication of the notice mentionedin section 9, sub-section 1). [takepossession of any waste or arableland needed for a public purpose].Such land shall thereupon vestabsolutely in the Government, freefrom all encumbrances.Before 1984 Amendment After 1984 amendmentor of providing convenientconnection with or access to anysuch station, the Collector may,immediately after the publication ofthe notice mentioned in the subsection(1) and with the previoussanction of the [appropriateGovernment], enter upon and takepossession of such land, which shallthereupon [vest absolutely in the[Government]], free from allencumbrances:(3) In every case under either ofthe preceding sub-section theCollector shall at the time of takingpossession offer to the personsinterested compensation for thestanding crops and trees (if any) onsuch land and for any otherdamage sustained by them causedby such sudden dispossession andnot excepted in section 24; and, incase such offer is not accepted, thevalue of such crops and trees andthe amount of such other damageshall be allowed for in awardingcompensation for the land underthe provisions herein contained.[(4) In the case of any land towhich, in the opinion of the[appropriate Government], theprovisions of sub-section (1) orsub-section (2) are applicable, the[appropriate Government] maydirect that the provisions of section5A shall not apply, and, if it does sodirect, a declaration may be madeunder section 6 in respect of theland at any time after thepublication of the notification undersection 4, sub-section (1)].39. Previous consent of appropriateGovernment and execution ofagreement necessary.- Theprovisions of sections 6 to 37 (bothinclusive) and sections shall not beput in force in order to acquire landfor any company, unless with the

39. Previous consent of appropriateGovernment and execution ofagreement necessary. - Theprovisions of sections 6 to 16 (bothinclusive) and sections 18 to 37(both inclusive)] shall not be put inforce in order to acquire land forBefore 1984 Amendment After 1984 amendmentprevious consent of the appropriateGovernment, nor unless theCompany shall have executed theagreement hereinafter mentioned.any company under this Part,unless with the previous consent ofthe appropriate Government, norunless the Company shall haveexecuted the agreement hereinaftermentioned.Section 3(f) is a definition clause defining “public purpose”.Definition of “public purpose” is an inclusive definition, which is expansivedefinition. However, an exclusionary definition have been added insection 3(f) by amendment “excluding acquisition of land forCompanies ” .The acquisition of land under the Land Acquisition Act iscontemplated for public purpose and for companies. For companies alsothe acquisition is permissible in public good on the grounds which arealso for the public benefit as mentioned in section 40 of the Act.Amendment in section 4 of the Act has been made by adding after thewords “ any public purpose, the words “ or for a company”. Section 4prior to the amendment, had only used the expression “for any publicpurpose”. There was reason and rational for only using expression “forany public purpose”. The rational was that all acquisitions werecontemplated to be made for public purpose and acquisition for companywas also for the purposes which were limited public purposes permittedfor acquisition for company. The apex Court had laid down, whileinterpreting the provisions of the Land Acquisition Act prior to theamendment Act 1984, that acquisition for a company is also anacquisition for a limited public purpose in (1993) 4 SCC 255 ShyamNandan Prasad and Others Vs. State of Bihar& others followingwas laid down in paragraph 21:“21. Now here the distinction is made between apublic purpose and a purpose for the company.The acquisition of land for a company is insubstance for a public purpose as all thoseactivities mentioned in Section 40 such asconstructing dwelling houses and providingamenities for the benefits of workmen employedby it and construction of some work for publicutility etc. serve the public purpose. Theacquisition for the company and the purpose for it,can well be investigated under Section 5-A orSection 40, necessarily after the notification underSection 4. Reference may usefully be made toBabu Barkya Thakur v. State of Bombay (nowMaharashtra), AIR 1960 SC 1203. It was theconceded case before the High Court that therecould be no acquisition for the respondent-Societywithout provisions of Sec. 40 of the Act beinginvolved and complied with. In Babu Barkya's casesupra too, this Court has taken the view that asprovided in Section 39, the machinery of the LandAcquisition Act beginning with Section 6 andending with Sec. 37 shall not be put into operationunless two conditions precedent are fulfilled,namely, (i) the previous consent of the appropriateGovernment has been obtained and (ii) anagreement in terms of Section 41 has been

executed by the Company. Such consent could begiven if it was satisfied on the report of theenquiry envisaged by Section 5-A(2) or enquiryheld under Section 40 itself that the purpose of theacquisition is for purposes as envisaged in Section40. In this state of law, the plea set up on behalfof the appellants that when their Society could notbe treated either as a private or a Governmentcompany, was no company at all so as to remainbound to comply with Chapter VII of the Act, is ofno substance. The Society as a company is boundto satisfy the requirements of Section 40 beforetaking aid of Sections 6 to 37 of the Act topromote its needed acquisition.”Thus, section 4 before amendment used only expression “for anypublic purpose” whereas in section 6 both the expressions “for publicpurpose” or “for company” were used. The amendments made by 1984Amendment Act clearly separated the acquisition “for public purpose” andacquisition “for company” from the stage of issuance of notification underSection 4 itself. For acquisition for a company compliance of part VII aswell as compliance of Land Acquisition (Companies) Rules, 1963 wasmade necessary. The purpose of inquiry under the Land AcquisitionRules, 1963 and part VII has to be examined. The State having itselfundertaken numerous welfare activities, acquisitions for public purposeby State are increasing day by day. The land which is available speciallythe agricultural land is limited, more strict inquiry and rigorous procedurehas been envisaged and contemplated by 1984 Amendment. At thisjuncture, it is necessary to refer to Rules 4 and 5 of the Land Acquisition(Companies) Rules, 1963. Various requirements of Rule 4 indicate thatnormally the request of the company for acquisition is not to be acceptedunless it has made best endeavour to find out the land made allreasonable efforts to get such lands by negotiation on payment ofreasonable price. The area of land proposed to be acquired is notexcessive and if the land proposed to be acquired is a good agriculturalland , no alternative suitable site is to be found. The inquiry under Rule 4is envisaged with the object that no agricultural land be acquired if anysuitable site can be found. The obligation to find suitable site has beenplaced on the Government which shall obtain a report from the Collectoron the above mentioned issues.Another noticeable change which has been brought by 1984amendment is the amendment in section 17. In unamended Section 17 incases of urgency whenever the appropriate Government so directs, theCollector could have taken possession of any land needed for publicpurpose or for a company. After amendment, in Section 17, the words “orfor a Company” have been deleted. Thus, for an acquisition for acompany, Section 17 is no more available. The Legislative intent is thatfor acquisition for company urgency clause is not to be invoked. TheLegislature thus, does not treat the acquisition for a company as anurgent acquisition. The statement of objects and reasons give clearLegislative intendment for interpreting the amendments brought insection 3(f), 4, 6 and 17. The amendments in section 39 also re-enforcesthe Legislative intendment that in an acquisition for a company section 17is not available. Earlier Section 39 provided that provisions of sections 6to 37 shall not be put in force in order to acquire the land for anycompany unless the previous consent of the appropriate Government isobtained and an agreement is executed. Section 17 was included insection 39. Thus, before amendment section 17 was permissible to beused after previous consent of the Government is obtained and anagreement is executed but, deletion of section 17 from section 39 makesthe intention clear that Section 17 is not available for acquisition for acompany. The apex Court in 1973 A.I.R. S.C. 1016 Commissioner ofIncome Tax Gujrat V. Vadilal Lallubhai etc etc. laid down that inorder to find out the legislative intent, it has to be find out what was themischief that the legislature wanted to remedy. Following was laid downin paragraph 15:“ 15. In order to find out the legislative intent, wehave to find out what was the mischief that the

legislature wanted to remedy. The Act wasextensively amended in the year 1939, Section 44-F was not in the draft bill. That section wasrecommended by the Select Committee consistingof very eminent lawyers. It will not beinappropriate to find out the reasons whichpersuaded the Select Committee to recommendthe inclusion of Section 44-F, if the section isconsidered as ambiguous - See Commr. ofIncome-tax, Madhya Pradesh and Bhopal v. SodraDevi, 32 ITR 615 at p. 627 = (AIR 1957 SC 832).In recommending the inclusion of S. 44-F, this iswhat the Select Committee observed :"The new Sections 44-E and 44-F are designed toprevent avoidance of tax by what are known as"bond-washing" transactions, involving themanipulation of securities so that the securities willpass temporarily in the legal ownership of somesecond person who is either not liable at all orliable in a lesser degree to tax, under suchconditions that the interest on the securities is theincome of this second person. A common form ofthe process is the sale of securities cum interestwith a simultaneous contract to purchase them exinterest.Where foreign securities are concernedthis second person may be a foreigner residentabroad entitled to claim exemption from the tax onthe interest. More often a financial concern inIndia is utilised whose computation of profitsincludes the results of realising securities, so thatthe concern can profitably offer "bond-washing"facilities to the owner of securities bearing fixedinterest where the owner himself is not liable totaxation on the realisation of the securities."From the statement of object of the Act No.68 of 1984 and theamendment brought in the Act, it is apparent that legislature intendedthat acquisition for a company be no longer treated as acquisition forpublic purpose. For acquisition for a company more strict scrutiny andcompliance of the 1963 Rules and Part VII of the Act was mademandatory with clear intendment that acquisition for a company be nottreated as acquisition for public purpose and land be acquired forcompany only when mandatory requirement of Part VII of the Act andthe 1963 Rules are complied with. Due to above reason, Section 17 ofthe Act was made inapplicable for acquisition for companies as notedabove.Section 3(f) uses exclusionary clause in negative words. Negativewords used in section 3(f) are clearly prohibitory and in no case theacquisition for a company has to be treated as an acquisition for publicpropose for purpose of Sections, 4,6 and 17. The apex Court in (1997) 2SCC 424 Mannalal Khetan & others Vs. Kedar Nath Khetan laiddown that when Statute prohibites acquisition for company to be treatedas acquisition for public purpose, the same cannot be done indirectly.Another judgment which is relevant to be noticed interpreting theexclusionary clause is (2006) 6 S.C.C. 530 Falcon Tyres Ltd.,M/s Vs.State of Karnatka. In the above case agricultural produce was definedin section 2A(1) of Entry Tax Act. There was exclusionary definition in thedefinition clause. In second schedule Sub-section (3) of Section 6provided that no tax shall be levied under the Act on the goods specifiedin second Schedule or its entry into a local area. Serial No. 2 of thesecond schedule specifies Agriculture produce including tea, coffee andcotton (whether ginned or unginned) as exempt from the entry tax. Thearguments was raised that tea and coffee is to be included in theagricultural produce by virtue of second schedule. Rejecting thesubmissions following was laid down in paragraphs 10 and 13 :“10. We do not find any substance in the submissionof the learned counsel for the appellant that thesemicolon after the word cotton does not mean that

the first part of the Section is disjunctive from 'suchproduce' as has been subjected to any physical,chemical or other process. Section 2 (A) (1) is intwo parts, it excludes two types of food fromagricultural produce. According to us, the definitionof the agriculture and horticulture produce does notsay as to what would be included in the agricultureor horticulture produce, in substance it includes allagriculture or horticulture produce but excludes, (1)tea, coffee, rubber, cashew, cardamom, pepper andcotton from the definition of the agriculture orhorticulture produce though all these products asper dictionary meaning or in common parlancewould be understood as agricultural produce and (2)"such produce as has been subject to any physical,chemical or other process for being made fit forconsumption", meaning thereby that the agriculturalproduce other than what has been excluded, whichhas been subjected to any physical, chemical orother process for making it fit for consumptionwould also be excluded from the definition of theagriculture or horticulture produce except wheresuch agricultural produce is merely cleaned, graded,sorted or dried. For example, if the potatoes arecleaned, graded, sorted or dried, they will remainagricultural produce but in case raw potato issubjected to a process and converted into chips forhuman consumption it would cease to beagricultural produce for the purposes of the EntryTax Act. The words "such produce" in the secondpart does not refer to the produce which hasalready been excluded from the agricultural orhorticulture produce but refers to such otheragricultural produce which has been subjected toany physical, chemical or other process for beingmade fit for human consumption.13. In the definition clause of Section 2(A)(1) rubberis excluded from the agricultural produce, subsection(6) of Section 3 provides for exemption inrespect of goods specified in the Second Schedule.At Sl. No. 2 of the Second Schedule, only tea, coffeeand cotton (whether ginned or un-ginned) havebeen given exemption from payment of Entry Taxand not other items such as rubber, cashew,cardamom and pepper and such other agriculturalproduce which has been subjected to any processfor making it fit for human consumption. Intentionof the legislature is that though tea, coffee andcotton have been excluded in the definition clausefrom the agricultural produce but for the purposesof the Entry Tax Act tea, coffee and cotton areexempted from payment of Entry Tax. This is anexception created by the legislature. If thelegislature intended to create exception for rubberalso it could have done it but it chose not to do it.Simply because the legislature has included tea,coffee and cotton in the Second Schedule exemptingit from payment of Entry Tax does not mean that allother agricultural produce items which have beenexcluded from the definition of the agriculturalproduce would stand included in the SecondSchedule to the Act exempting them from paymentof Entry Tax. This would be doing violation to theAct as well as acting contrary to the intent of thelegislature. “The above view of ours finds full support from the Division Benchjudgment of Madhya Pradesh High Court in the case of Chaitram Verma

and others vs. Land Acquisition Officer, Raipur and othersreported in A.I.R. 1994 Madhya Pradesh 74. In the above case Section 4notification was issued for acquisition of land for “public purpose”. Therespondent No.4 in the above case, which was a company, made anapplication for making available the land for construction of railway siding.The application of Section 17(1) was approved by the Commissioner. Thesubmission before the High Court by the land owners was to the effectthat acquisition of their land is in colourable exercise of power under theAct inasmuch as though the land is needed for respondent No.4 (a publiclimited company), the notification under Section 4(1) and declarationunder Section 6 of the Act mention the acquisition for public purpose witha view to avoid application of Chapter VII of the Act and to deny statutorybenefits to the petitioners. The Division Bench noticed the amendmentsmade by Act No.68 of 1984 in Section 3 and laid down following inparagraphs 11 and 12 of the said judgment:-11. ........... The last part of the definitioni.e. "it does not include acquisition of land forCompanies" is important and brings out the obviousfact that even though a "public purpose" may beserved by acquiring land for companies, theexpression "public purpose" as used in the Act doesnot include such acquisition. It is true that thedefinition is inclusive and therefore, it is possible tohold that it includes many other purposes, whichwould otherwise not be included within it. But the useof exclusionary sentence as the end would make thedifference and indicate that except for acquisitions forcompanies which cannot be treated as acquisition forpublic purpose, all other purposes are included withinit. It is, therefore, a case where the definition is bothinclusive and exclusive, the exclusion being of alimited nature suggesting that other categories ofacquisitions which are not excluded fall within theinclusive definition. This method in relation to adefinition clause is not natural and had receivedattention of the Supreme Court in Purshottam H.Judye v. V. B. Potdar, AIR 1966 SC 856 and Commr.of Income-tax, Gujarat v. Vidilal Lallubhai, AIR 1973SC 1016. Under the circumstances whatever may beextent of purpose included within the definition of"public purpose", acquisition for company is excludedfrom it. Clearly therefore, an acquisition for acompany is to be distinguished from acquisition for apublic purpose, and an acquisition for a companyeven though serving public purpose, cannot, in thecontext of S. 3(i) of the Act, be accepted as anapplication for a public purpose.12. Legal position was different before theamendment of the definition in 1984 by Act No. 68 of1984. The definition of "public purpose" in S. 3(f) ofthe Act before this amendment did not have anyexclusionary clause and was inclusive. Similarly, S.4(1) of the Act permitted issue of notification only fora "public purpose". It was therefore possible to thensubmit that if 'public purpose' is served by acompany, there would be no illegality in theacquisition for a company on the basis of notification,mentioning acquisition for a public purpose. In thisconnection the decision of the Supreme Court inBarkya Thakur v. State of Bombay, AIR 1960 SC1203, may be profitably read. The law declared bythis decision has, however, become irrelevantbecause of the amendment not only of the definitionof 'public purpose' in Section 3(f) but also Section4(1) of the Act. Under the circumstances, thesubmission that the public purpose being served bythe respondent No. 4, notification mentioning

acquisition as for public purpose is legal, cannot beaccepted.”The Division Bench further held that provisions of Section 17(1)were not attracted in such acquisition. In the said case an agreement wasalso entered under Section 41 of the Act even before issuance ofnotification under Section 4. In the present case although agreementunder Section 41 was executed after issuance of notification underSection 4 but in the recommendations made by the Director, LandAcquisition on 28th January, 2004 and the noting of the variousDepartments it was mentioned that for acquisition in favour of respondentNo.2 agreement is to be executed as required under Section 41 of theAct. The Division Bench of the Madhya Pradesh High Court held that sinceauthorities issuing notification under Section 4 knew about the agreementunder Section 41, the acquisition mentioning for public purpose was incolourable exercise of power. Following was laid down in paragraph 14 ofthe said judgment:-“14. ..... It is, therefore, possible to hold thatthe authority issuing notification under Section 4 ofthe Act was aware of the agreements under Section41 of the Act and knowingly issued the notificationmentioning acquisition for public purpose. Could theauthority getting the agreement under Section 41 ofthe Act reasonably notify that acquisition wasintended to be for a public purpose and not for thecompany? The answer, in the opinion if this Court, isan emphatic No. It is difficult to believe that theRespondent No. 1 did not know the law on thesubject. Under the circumstances, the only legitimateinference is that the Respondent No. 1 wanted to byepassthe provisions of Chapter VII of the Act bymaking the notification for public purpose. It is,therefore, possible to allege lack of bona fide on thepart of the respondent No. 1 while issuing thenotification. For the same reason, the notificationunder Section 4 of the Act must be held to have beenissued in colourable exercise of power. Thenotification under Section 4 of the Act (Annexure-A) isthus, vitiated.”The Division Bench further held that Section 17 was inapplicable insuch acquisition. It also held that there was no justification for invokingurgency clause under Section 17(1) even if Section 17(1) was applicable.Following was laid down in paragraph 16 of the said judgment:-“16. A perusal of the notification underSection 4 of the Act would indicate that therespondent No. 1 has dispensed with enquiry underSection 5A as, according to the said respondent,provisions under Section 17(1) of the Act areapplicable in the instant case. Order-sheets (Ann. D, Eand F) show that this order was passed by theCommissioner and notified by the respondent No. 1.Order-sheets however, do not indicate any orderunder Section 17(4) of the Act dispensing withenquiry under Section 5 A of the Act. Section 17(1) asit originally stood, included acquisition for thecompany but the said provision has been amended byAct No. 68 of 1984 and is no longer applicable tocases of acquisition for a company. If Section 17(1) or17(2) of the Act be inapplicable, there would be noscope for invoking urgency provision in the case ofacquisition for a company. For the same reason, therewould be no authority with the respondent No. 1 todispense with the enquiry under Section 5 A of theAct. Even if Section 17(1) of the Act was applicable,this Court would have found no justification fordispensing with the enquiry under Section 5 A of theAct. It has been clearly held in The State of Punjab v.Gurdial Singh, AIR 1980 SC 319 that the urgency

should be real and not merely a clock for denyingbenefits of the provision to the claimants. This is alsothe decision of the Supreme Court in Narayan GovindGavate v. State of Maharashtra, AIR 1977 SC 183wherein it was clearly specified that not only theurgency within the meaning of Section 17(1) of theAct should be real but the authority must alsoconsider whether the urgency is of a type as to justifydispensing with the enquiry under Section 5 A of theAct. If the facts of the present case are considered inview of the aforesaid law, there would be nojustification for invoking the urgency provision underSection 17(1) of the Act. Notification under Section 4of the Act was issued on 4-7-1991 and published inM.P. Rajpatra, on 19-7-1991. The plant of therespondent No. 4 was to go in production only inOctober, 1992, as noticed earlier. Apparently,therefore, atleast 16 months were available beforestarting of production for which the siding wasrequired. It is not the case of the respondents that ifimmediate acquisition was not made, commissioningof plant and railway siding may not have been donetogether. If it was to be so, it was the obligation ofthe respondents to place material on record forappreciation of this Court. In the absence of any suchdata or material it is not possible to hold that therewas any urgency in the matter. Then, the impressiongathered by this Court during the hearing of thispetition is that the cement plant has not gone intoproduction so far. Affidavit of Shri Raj Singh, ResidentManager of the respondent-company indicates thatwork for establishing the plant had started atleast in1986 i.e. before the Railway Board was moved for noobjection certificate for constructing the railwaysiding. If the matter could hang on so long for somany formalities, acquisition proceedings could havebeen arranged in a manner as not to deprive thepetitioners of their valuable legal right of participationin the enquiry. These facts would justify theconclusion that there was no justification for invokingurgency clause under Section 17(1) of the Act. Theurgency as held earlier must be real and bona fideand not a mere excuse to deny owners of the lands oftheir right to participate in the enquiry.Sri Rakesh Dwivedi, learned Senior Advocate, appearing for therespondent no. 2 submits that exclusionary clause in section 3(f) is notabsolute. Elaborating his submissions Sri Dwivedi contends that infollowing three situations exclusionary clause shall not be applicable:-(i) A situation where the acquisition for the company comes in themain part of the definition of section 3(f).(ii) If acquisition comes within a express provision excludingapplicability of part VII of the Act.(iii) Acquisition for a company in which public fund is infused by theGovernment. Reliance has been placed on second proviso tosection 6 of the Act.The first situation where exclusionary clause shall not beapplicable as contended by Sri Dwivedi is when purpose of the companyis covered in the main definition of public purpose given under section3(f). The arguments of the respondent no. 2 is to be tested by referringto various express public purpose mentioned in section 3(f). Muchemphasis has been laid down by Sri Dwivedi on Section 3(f) (vi), which isbeing quoted below:“(vi) the provision of land for carrying out anyeducational, housing, health or slum clearancescheme sponsored by Government or by anyauthority established by Government for carryingout any such scheme, or with the prior approval of

the appropriate Government, by a local authority,or a society registered under the SocietiesRegistration Act, 1860 (21 of 1860), or under anycorresponding law for the time being in force in astate, or a co-operative society within the meaningof any law relating to co-operative societies for thetime being in force in any State;”The public purpose as envisaged in clause (vi) is for carrying outany educational, housing, health or slum clearance scheme sponsored byGovernment or by any authority established by Government for carryingout any such scheme, or, with the prior approval of the appropriateGovernment. However, the carrying out above scheme is contemplatedonly by following.(a) A local Authority(b) A society registered under the Societies Registration Act,1860(c) A Cooperative Society within the meaning of any lawrelating to cooperative Society.Confining of carrying out the scheme by above three categoriesclearly indicates that a company is excluded even for carrying out such ascheme . Company like the respondent No. 2 which is registered underthe Companies Act, 1956 is excluded for carrying out such scheme. It isrelevant to note the expression 'companies' as has been defined insection 3(e) is to the following effect :“ (e) the expression “Company” means -(i) a company as defined in section 3 of theCompanies Act, 1956 (1 of 1956), other than aGovernment company referred to in clause (cc);(ii) a society registered under the SocietiesRegistration Act, 1860 (21 of 1860), or under anycorresponding law for the time being in force in aState, other than a society referred to in clause(cc);(iii) a co-operative society within the meaning ofany law relating to co-operative societies for thetime being in force in any State, other than a cooperativesociety referred to in clause (cc);”The definition clause section 3 begins with “...unless there issomething repugnant in the subject or context ...” Thus, the expression“Company” wherever used in the Act shall have the meaning as given insection 3(e) unless there is something repugnant in the subject orcontext. In clause 3(f) (vi) when a registered society and cooperativesociety has been specifically included for carrying out such scheme, theexclusion of registered company under the Companies Act, 1956 is forpurpose and object. Section 3(f) (vi) thus, clearly contemplates thateducational, housing, health or slum clearance scheme although is apublic purpose while carrying out any scheme sponsored by theGovernment or any authority but the registered company is excludedfrom said clause which has purpose and object. Another clause, i.e.,Clause (vii) of Section 3(f) is to be looked into. Clause (vii) provides thatpublic purpose includes the provisions of land for any other scheme ordevelopment sponsored by Government or with the prior approval of theGovernment by a local authority. The present is not a case where theproject has been sponsored by the Government or by any local authoritywith the prior approval of the Government. In any view of the matter theexclusionary clause shall take out acquisition for a company from a publicpurpose acquisition. Thus, the submission of Sri Dwivedi that acquisitionfor a public purpose, if it is covered by main definition of section 3(f), theexclusionary clause excluding the acquisition of land for company shallnot apply, cannot be accepted.According to Sri Dwivedi, the second category which shall not becovered by exclusionary clause is the category which is expresslyexcluded from part VII. Learned Counsel has referred to section 44-Bparticularly. The submission of the respondent No.2 is that Reliance DelhiPower Private Ltd. Company is a private company, the said privateCompany is expressly excluded by virtue of section 44-B hence acquisitionfor such company has necessarily to be made under part II. It is relevant

to have a look on section 44-B of the Act, which is quoted as below:“ Land not to be acquired under this Partexcept for certain purpose for privatecompanies other than Governmentcompanies.44B. Notwithstanding anything contained in thisAct, no land shall be acquired under this Part,except for the purpose mentioned in clause (a) ofsub-section (1) of section 40, for a privatecompany which is not a Government company.Explanation: “Private company” and “Governmentcompany” shall have the meanings respectivelyassigned to them in the Companies Act, 1956 (1 of1956).”The submission of the respondent No.2 is that for an acquisitionfor a private company for the purpose other than those mentioned inclause (a) of Sub-section (1) of Section 40 exclusionary clause shall notbe applicable. Section 44-B and the exclusionary clause contained inSection 3(f) are fully in consonance with each other. Section 44-B beginswith the word “Notwithstanding anything contained in this Act”. Thus,section 44B is couched in a negative prohibitory term. Section 44Bprovides that “...no land shall be acquired under this Part except for thepurpose mentioned in clause (a) of Sub-section (1) of Section 40, for aprivate company..” Acquisition for a private company for purposes otherthan those mentioned in section 40(1)(a) is impermissible. Section 44Bwas added by Act No. 31 of 1962. The object clearly was to close thedoor for private company praying for acquisition of land from theGovernment exercising its power of eminent domain for any purposeother than acquisition of land for erection of dwelling house for workmenemployed by the company or for the provision of amenities directlyconnected therewith. The object and purpose of section 44B is clear andloud. The apex Court had occasion to consider section 44B in AIR 1964S.C. 1230 R.L. Arora Vs. State of U.P. & others. Before the SupremeCourt, the amendments made in sections 40 and 41 of the Act by Act No.31 of 1962 was under challenge. In the above context, a submission wasmade before the apex Court that there is a discrimination between thepublic company and private company. It was contended that acquisitionfor a private company can be made only for purpose as mentioned insection 40 (1)(a) whereas acquisition can be made for other companyfor purpose as mentioned in clause (aa) as inserted under section 40(1)by Amendment Act. Repealling the submissions, the apex Court held thatacquisition between a public company/Government company on onehand and a private company on the other hand has a reasonable nexuswith the object sought to be achieved. It was held that intention of theLegislature is clear that private individual and private company could nothave advantage of acquiring the land even though they may be intendingto engage in some industry or work which may have a public purpose.Following was laid down in paragraph 17.“ 17. .......It is true that acquisition for the purposeof cl. (aa) can only be made for a Governmentcompany or a public company and cannot be madefor a private company or an individual; but there isin our opinion a clear classification between apublic company and a Government company on theone hand and a private company and an individualon the other, which has reasonable nexus with theobjects to be achieved under the law. The intentionof the legislature clearly is that private individualsand private companies which really consist of a fewprivate individuals banded together should nothave the advantage of acquiring land even thoughthey may be intending to engage in some industryor work which may be for a public purposeinasmuch the enrichment consequent on such workgoes to private individuals or to a group of themwho have formed themselves into a privatecompany. Public companies on the other hand are

broad based and Government companies are reallyin a sense no different from Government, thoughfor convenience of administration a Governmentcompany may be formed, which thus becomes aseparate legal entity. Thus in one case theacquisition results in private enrichment while inthe other it is the public which gains in every way.Therefore a distinction in the matter of acquisitionof land between public companies and Governmentcompanies on the one hand and private individualsand private companies on the other is in ouropinion justified, considering the object behind cl.(aa) as introduced into the Act. The contentionunder this head must therefore also fail.”From the above, it is clear that both the submissions of Sri Dwivedii.e. firstly exclusionary clause in Section 3(f) shall not be attracted forthose acquisition which are expressly excluded from part VII andsecondly for a private company acquisition can be made for a publicpurpose disregarding the provisions of part VII, have to be rejected. Weare of the clear view that in view of Section 44B, no acquisition forprivate company can be made for any purpose other than thosementioned in section 40(1)(a) i.e. for the erection of dwelling house forworkmen employed by the company or for the provision of amenitiesdirectly connected therewith. We shall further refer to the submissions ofthe petitioner based on Section 44B a little later.Now the next submission of Sri Dwivedi is that exclusionary clauseshall be inapplicable when State infuses public fund for an acquisition fora company as contemplated in second proviso of section 6 of the Act.The second provision to section 6 is to the following effect:“ Provided further that no such declaration shallbe made unless the compensation to be awardedfor such property is to be paid by a Company, orwholly or partly out of public revenues or somefund controlled or managed by a local authority.”The submission of Sri Dwivedi is that although initially there wasno decision of the State Government to infuse public fund for theacquisition in question but after amendment of power policy on 8.6.2004and after execution of the State support agreement on 16.6.2004, theState was to bear 60% of the costs of the acquisition. The acquisition isto be treated as an execution for public purpose. He contends that byinfusion of public fund, the course of acquisition can be changed. SriDwivedi in this regard has placed reliance on various judgment of theSupreme Court, which we proceed to consider hereinafter. One moresubmission connected with this very submission made by Sri Dwivedi isthat decision to infuse public fund by Government can be taken by theState at any stage before publication under section 6 and in the presentcase since decision to infuse public fund was taken before the declarationunder section 6, the acquisition is to be treated as an acquisition forpublic purpose.In AIR 1960 S.C.1203 Babu Barkya Thakur Vs. State ofBombay, acquisition proceedings were initiated for M/s Mukund Iron andSteel Works Ltd. a registered company for its factory building etc. TheConstitutionality of the provisions was challenged before the apex Courtby a writ petition. The challenge was made relying on Article 31(2) of theConstitution of India (as it existed then). It was submitted that sinceacquisition was for a company it violated Article 31(2). Repealling thesubmissions following was held in paragraph 10:-“ ......These requirements indicate that theacquisition for a Company also is in substance fora public purpose inasmuch as it cannot beseriously contended that constructing dwellinghouses, and providing amenities for the benefit ofthe workmen employed by it and construction ofsome work of public utility do not serve a publicpurpose.....”The judgment of the apex Court in AIR 1961 S.C. 343 PanditJhandu Lal & others Vs. The State of Punjab and another has

been relied. In the above case, the acquisition proceedings were initiatedfor a public purpose namely; for construction of Labour Colony under theGovernment sponsored housing scheme for industrial workers of ThaparIndustries Cooperative Housing Society Ltd. One of the issues before theapex Court was as to whether acquisition proceedings have been vitiatedby reason of the admitted fact that there was no attempt made by theGovernment to comply with the requirement of part VII of the Act. In thesaid case, the apex Court laid down that acquisition for company can bemade otherwise than under provisions of part VII, if costs or portion ofthe costs of the acquisition is to come out from a public fund. Followingwas laid down in paragraph 8:“8. ........Section 6 is in terms, made subject to theprovisions of Part VII of the Act. The provisions ofPart VII, read with S. 6 of the Act, lead to thisresult that the declaration for the acquisition for aCompany shall not be made unless thecompensation to be awarded for the property is tobe paid by a company. The declaration for theacquisition for a public purpose, similarly, cannotbe made unless the compensation, wholly orpartly, is to be paid out of public funds. Therefore,in the case of an acquisition for a Companysimpliciter, the declaration cannot be madewithout satisfying the requirements of Part VII.But, that does not necessarily mean that anacquisition for a Company for a public purposecannot be made otherwise, than under theprovisions of Part VII, if the cost or a portion ofthe cost of the acquisition is to come out of publicfunds. In other words, the essential condition foracquisition for a public purpose is that the cost ofacquisition should be borne, wholly or in part, outof public funds. Hence, an acquisition for aCompany may also be made for a public purpose,within the meaning of the Act, if a part or thewhole of the cost of acquisition is met by publicfunds. If, on the other hand, the acquisition for aCompany is to be made at the cost entirely of theCompany itself, such an acquisition comes underthe provisions of Part VII.....”Again in AIR 1962 S.C. 764 R.L. Arora Vs. The State of U.P.and others, the second proviso of section 6 was considered. Followingwas laid down in paragraph 5:“ 5. .......Though therefore this distinction is therewhere the acquisition is either for a public purposeor, for a company, there is not a completedichotomy between acquisitions for the twopurposes and it cannot be maintained that wherethe acquisition is primarily for a company it mustalways be preceded by action under Part VII andcompensation must always be paid wholly by thecompany. A third class of cases is possible wherethe acquisition may be primarily for a company butit may also be at the same time or a publicpurpose and the whole or part of compensationmay be paid out of public revenues or some fundcontrolled or managed by a local authority. In sucha case though the acquisition may look as if it isprimarily for a company it will be covered by thatpart of S. 6 which lays down that acquisition maybe made for a public purpose if the whole part ofthe compensation is to be paid out of the publicrevenues or some fund controlled or managed by alocal authority. Such was the case in Pandit JhanduLal v. State of Punjab AIR 1961 SC 343. In thatcase the acquisition was for the construction of alabour colony under the Government sponsored

housing scheme for the industrial workers of theThapar Industries Co-operative Housing SocietyLimited and part of the compensation was to bepaid out of the public funds. In such a case thisCourt held that "an acquisition for a company mayalso be made for a public purpose with in themeaning of the Act, if a part or the whole of thecost of acquisition is met by public funds" andtherefore it was not necessary to go through theprocedure prescribed by Part VII. It is only wherethe acquisition is for a company and its cost is tobe met entirely by the company itself that theprovisions of Part VII apply. In the present case itis not the case of the respondents that any part ofthe compensation is to be paid out of what may becalled public funds. It is not in dispute that theentire compensation is to be paid by the Worksand therefore the provisions of Part VII wouldapply to the present case; and it is in thisbackground that we have to consider thecontention raised on behalf of the appellant.”The judgment of the Constitution Bench in AIR 1963 S.C. 151Smt. Somawanti & others Vs. The State of Punjab& others was acase, where Section 4 notification was issued by the Government ofPunjab for acquisition on public expenses for public purpose namely; forsetting up a factory for manufacturing various ranges of refrigerators ,compressors and ancillary equipments. The acquisition was challenged. Itwas contended that acquisition in question was merely for the benefit ofa company and the action of the Government was only a colourableexercise by it. It was contended that before making a declaration underSub-section (1) of Section 6, the Government ought to have taken adecision that it will contribute towards the acquisition. The Governmentdecided to contribute Rs. 100/- only. Financial sanction of Rs. 100/- wasaccorded by the Finance Department on September 29, 1961 that tooafter filing of the writ petition in the apex Court. Rejecting thesubmission that infusion of fund was a colourable exercise of powerfollowing was laid down in paragraph 43:“ 43. It is no doubt true that the financial sanctionfor the contribution of Rs. 100 as part of theexpenses for acquisition was accorded by theFinance Department on September 29, 1961. Nodoubt also that a day prior to the according ofsanction this petition had been admitted by thisCourt and a stay order issued. But from these twocircumstances, it would not be reasonable to drawthe inference that the declaration made by theGovernment was a colourable exercise of itspower. The provisions of sub-sec. (1) of S. 6,however, do not require that the notification madethereunder must set out the fact that theGovernment had decided to pay a part of theexpenses of acquisition or even to state the extentto which the Government is prepared to make apart contribution to the cost of acquisition.”Learned Advocate General had contended before the apex Courtthat Scheme of establishment of refrigeration factory at Punjab wasexamined at various stages and it was then decided to make a partcontribution from public fund and as required by Financial Rules, theconsent of the Finance Department was to be obtained for this purposewhich stage occupied considerable time and that is why delay was therein according sanction. Following was stated in paragraph 44 of thejudgment :“44. .....It was stated at the bar by the learnedAdvocate-General that the entire scheme ofestablishing a refrigeration factory in Punjab wasexamined at various stages and at different levelsof Government a well as by different ministries and

it was then decided to make a part contributiontowards the cost of acquisition from public funds.As required by the Financial Rules the consent ofthe Finance Department had to be obtained for thispurpose. This particular stage occupiedconsiderable time and that is why there was adelay in according sanction. The statement of thelearned Advocate-General was not challenged onbehalf of the petitioner. Moreover the declarationunder sub-sec. (1) 6 is clear on the point that theland is being acquired at public expense, and theprovisions of sub-sec. (3) of S. 6 preclude a Courtfrom going behind such a declaration unless it isshown that the Government has in fact decided notto contribute any funds out of the public revenuesfor that purpose. For, if the Government had in facttaken a decision of that kind then the exercise ofthe power to make an acquisition would be open tochallenge as being colourable.”The statements made by Advocate General as noted above wasnot contested by the petitioners. Thus, in the above case, decision wastaken to contribue fund much earlier, only financial sanction was receivedwith delay. It has not come in the judgment when the decision was takento contribute fund. The apex Court did not lay down any proposition as towhen and as to which stage decision should be taken regardingcontribution of fund. The apex Court in the facts of that case held thatthere was no colourable exercise by the State. It is also relevant to notethat even section 4 notification in the said case mentioned that the landis to be acquired at public expense for a public purpose.Much reliance has been placed on the judgment of the apexCourt in (2003)10 SCC 626 Pratibha Nema & others Vs. State ofM.P. & others The facts in the case of Pratibha Nema are required tobe noticed in detail as well as the proposition laid down in the said case.In Pratibha Nema's case Section 4 notification was issued for the publicpurpose of “establishment of diamond park”. The inquiry under section 5-A was dispensed with. The notification was issued for acquisition of 73.3hectare of dry land. Following was noticed in paragraph 1 of thejudgment:“ 1..........The said extent of land was notified foracquisition under Section 4(1) of the LandAcquisition Act (hereinafter referred to as 'Act') forthe alleged public purpose of 'establishment ofdiamond park'. This parcel of land together with anextent of 44.8 hectares of Government land wasmeant to be placed at the disposal of theIndustries Department and/or Madhya PradeshAudyogik Kendra Vikas Nigam Ltd. (hereinafterreferred to as 'the Nigam') for the purpose ofallotting the same to various industrial units - theforemost among them being the 9th respondentcompany,for setting up diamond cutting andpolishing units with modern technology. Theproposal in this regard emanated from the GeneralManager of District Industries Centre, on theinitiative taken by the 9th Respondent. After theland was located by a joint inspection committee ofofficials, the Government of Madhya Pradesh(Commerce and Industries Department) had givensanction 'in principle' for the acquisition.Notification under section 4 was issued on 30.1.1996 anddeclaration under section 6 was issued on 9.2.1996. The writ petitionswere filed challenging the acquisition. The writ petitions and letterspatent appeals were dismissed. The matter was taken up to the apexCourt where the State of M.P. made statements that notification undersection 6 shall be withdrawn and procedure under section 5-A will befollowed. The Special Leave Petition was disposed of accordingly.Thereafter notification under section 6 was withdrawn and an inquiry was

held under section 5-A and the report was submitted overruling theobjections and fresh notification was issued under Section 6 on 3.1.1997.Four contentions were urged before the apex Court which are as follows:“ 5. Broadly, four contentions have been urgedbefore us. They are :1. Acquisition is not for a public purpose. The entireacquisition is a subterfuge to hand over the acquiredland to the company in the guise of acquisition for apublic purpose. Even the amount paid towardscompensation was not out of public revenues, butout of the money provided by the Company for thespecific purpose of compensation. 2. The publicpurpose stated in the Notifications under Sections 4and 6 is vague. 3. The area of the land proposed tobe acquired is far in excess of reasonablerequirements and. 4. Environmental considerationswere not kept in view while taking a decision toacquire the land for industrial purpose.”The apex Court proceeded to consider the provisions of the Act and hadalso noticed the definition of public purpose as given in section 3(f) asamended by Act No. 68 of 1984. Following was observed in paragraphs 6and 9:“ 6. In order to appreciate the contentions set outabove in proper perspective, it would be appropriateto advert to certain basic provisions of the Act andrecapitulate the well settled principles relating topublic purpose and acquisition of land under Part IIand Part VII of the Act. Section 4(1) which occurs inPart II of the Act contemplates a notification to bepublished in the official gazette etc., whenever itappears to the appropriate Government that land inany locality is needed for any public purpose or for acompany. Thereupon, various steps enumerated insub-section (2) could be undertaken by theauthorized officer. There is an inclusive definition of'public purpose' in clause (f) of Section 3. Thisclause was inserted by Central Act 68 of 1984. Manyinstances of public purpose specified therein wouldhave perhaps been embraced within the fold ofpublic purpose as generally understood. May be, byway of abundant caution or to give quietus to legalcontroversies, the inclusive definition has beenadded. One thing which deserves particular notice isthe rider at the end of clause (f) by which theacquisition of land for Companies is excluded fromthe purview of the expression 'public purpose'.However, notwithstanding this dichotomy, speakingfrom the point of view of public purpose, theprovisions of Part II and Part VII are not mutuallyexclusive as elaborated later.9. We may now advert to Section 6. It provides fora declaration to be made by the Government or itsduly authorized officer that a particular land isneeded for a public purpose or for a company whenthe Government is satisfied after considering thereport if any made under Section 5-A(2). It isexplicitly made clear that such declaration shall besubject to the provisions of Part VII of the Actwhich bears the chapter heading 'Acquisition ofLand for Companies'. Thus, Section 6 reiterates theapparent distinction between acquisition for a publicpurpose and acquisition for a company. There is animportant and crucial proviso to Section 6 whichhas a bearing on the question whether theacquisition is for a public purpose or for aCompany. The second proviso lays down that "nosuch declaration shall be made unless the

compensation to be awarded for such property is tobe paid by a Company, wholly or partly, out ofpublic revenues or some fund controlled ormanaged by local authority". Explanation 2 thenmakes it clear that where the compensation to beawarded is to be paid out of the funds of aCorporation owned or controlled by the State, suchcompensation shall be deemed to be compensationpaid out of public revenues. Thus, a provision forpayment of compensation, wholly or partly, out ofpublic revenues or some fund controlled ormanaged by a local authority is sine qua non formaking a declaration to the effect that a particularland is needed for a public purpose. Even if thepublic purpose is behind the acquisition for acompany, it shall not be deemed to be anacquisition for a public purpose unless at least partof the compensation is payable out of publicrevenues which includes the fund of a localauthority or the funds of a Corporation owned orcontrolled by the State. However, it was laid downin Somavanti's case that the notification underSection 6(1) need not explicitly set out the fact thatthe Government had decided to pay a part of theexpenses of the acquisition or even to state that theGovernment is prepared to make a part ofcontribution to the cost of acquisition.......”The apex Court in the said judgment in paragraphs 21 and 22 haslaid down that real point of distinction between an acquisition under partII and part VII is a source of fund to cover the costs of acquisition.Following was laid down in paragraphs 21 and 22:21. .........Thus, it is seen that even in a case ofacquisition for a Company, public purpose is noteschewed. It follows, therefore, that the existenceor non-existence of a public purpose is not aprimary distinguishing factor between theacquisition under Part II and acquisition under PartVII. The real point of distinction seems to be thesource of funds to cover the cost of acquisition. Inother words, the second proviso to Section 6(1) isthe main dividing ground for the two types ofacquisition. This point has been stressed by thisCourt in Srinivasa Co-operative House BuildingSociety Limited v. Madam G. Sastry ((1994) 4 SCCpage 675) at paragraph 12 :".....In the case of an acquisition for a companysimpliciter, the declaration cannot be made withoutsatisfying the requirements of Part VII. But thatdoes not necessarily mean that an acquisition for acompany for a public purpose cannot be madeotherwise than under the provisions of Part VII, ifthe cost or a portion of the cost of the acquisitionis to come out of public funds. In other words, theessential condition for acquisition is for a publicpurpose and that the cost of acquisition should beborne, wholly or in part, out of public funds...."22. Thus the distinction between public purposeacquisition and Part VII acquisition has got blurredunder the impact of judicial interpretation ofrelevant provisions. The main and perhaps thedecisive distinction lies in the fact whether cost ofacquisition comes out of public funds wholly orpartly. Here again, even a token or nominalcontribution by the Government was held to besufficient compliance with the second proviso toSection 6 as held in a catena of decisions. The netresult is that by contributing even a trifling sum,

the character and pattern of acquisition could bechanged by the Government. In ultimate analysis,what is considered to be an acquisition forfacilitating the setting up of an industry in privatesector could get imbued with the character ofpublic purpose acquisition if only the Governmentcomes forward to sanction the payment of anominal sum towards compensation. In thepresent State of law, that seems to be the realposition.”As noted above , the apex Court noticed the amended definition ofsection 3 (f) excluding company for public purposes and has also placedreliance on the judgment of the apex Court in Srinivasa Coop. HouseBuilding Society Ltd. V. Madam Gurumurthy Sastry (1994) 4 SCC675. At this stage, it is relevant to note that in Srinivasa HousingCooperative Vs. Madam Gurumurthy Sastry, the apex Court wasconsidering a definition of “public purpose” as it existed before 1984Amendment and in paragraph 3 of the judgment it was observed- “Weare not concerned with the public purpose as amended under 1984 Act”.Learned Counsel for the petitioner has contended that in PratibhaNema's case although amended definition of section 3(f) was noticed butthe consequence of amendment specially the amendments made insections 4, 6, 17 and 39 have not been considered and the said judgmentcannot be said to be an authority for the proposition that even afteramendment of the definition of “public purpose” by Act No. 68 of 1984,by infusion of public fund in an acquisition for a company, the saidacquisition shall become acquisition for public purposes. The apex Courtin Pratibha Nema's case has noted the amended definition of section3(f) in paragraph 6 and has clearly laid down in paragraphs 21 and 22that real point of distinction seems to be source of fund to cover the costof acquisition. We feel ourselves bound by the above pronouncementmade by the apex Court. Thus, for the purpose of this case, we proceedon the premise that infusion of public fund by the Government make theacquisition for company as acquisition for public purpose.At this juncture, it is relevant to notice certain distinguishingfeatures of the present case with that of Pratibha Nema's case. InPratibha Nema's case land was meant to be placed at the disposal ofIndustries Department or M.P. Audyogik Kendra Vikas Nigam Ltd. for thepurpose of allotting the same to various units as noted in paragraph 1 ofthe judgment itself . The respondent No. 9, the company which wantedto establish diamond industry was one of the companies to whom theland was to be allowed. Following are the distinguishing features of thepresent case with that of Pratibha Nema's case:-Pratibha Nema's Case Present Case1. The proposal emanated from theGeneral Manager of D.I.C., oninitiative taken by 9th respondent.After the land was located by ajoint inspection committee ofofficials, the Govt. had givensanction (Para 1)1. The application was given byCompany. No proposal by anyGovernment department.Land identified by the Companyitself.2. The land together withGovernment land was meant to beplaced at the disposal of theindustries department/Nigam forthe purpose of allotting to variousindustrial units.2. The land was to be transferredto Company after acquisition.3. The amount was paid by Nigamby cheque3. In agreement under Section 41

entire payment was to be made byCompany.4. The public purpose was todevelop a diamond park complex –for industries based on diamondcutting.4. No such project.5. Record proved that land was tobe allotted to 12 industrial unitsapart from 2 with whomGovernment entered into MOU5. Land was to be transferred toCompany and was actuallytransferred.Pratibha Nema's Case Present Case(Para 31)6. MOU in ultimate analysis wasonly directed towards the end ofsetting up of an industrial complexunder the name of “diamond park”which benefits the public at largeand incidently benefits the privateentrepreneurs6. The object was to acquire forCompany and give it to theCompany.Following was laid down in paragraph 31:“31. .....The State Government by itscommunication dated 18-1-1996 accordedsanction in principle for acquiring the private landmeasuring 73 hectares in Rangwasa village 'forindustrial purpose' in order to set up a diamondpark. Thus, the considerations of industrial policyand development weighed prominently with allthe concerned authorities while processing theproposals. It is clear from the stand taken by theNigam in the counter-affidavit and the enquiryreport of the Land Acquisition Collector that AKILtd. and Rosy Blue of Antwerp are not the onlyentrepreneurs who would get the land in theproposed diamond park area. In the report of theLand Acquisition Officer, it is specificallymentioned that the land is proposed to be allottedto 12 industrial units after being satisfied abouttheir capacity and bona fides. Our attention hasbeen drawn by the learned Advocate-General tothe layout plan in which 12 plots covering an areaof 57 hectares are laid out. The remaining area isearmarked for green belt, housing, commonfacilities and other amenities. Even the MOUentered into between the Nigam and the twoCompanies do not give us a different picture. It isspecifically stated therein that the Commerce andIndustries Department will hand over the land toNigam for the development of diamond park andthe Nigam in its turn will allot the land requiredfor setting up the units for cutting and polishingdiamonds on leasehold basis to the twoCompanies as well as other Companies. The sitehas been selected by a team of Governmentofficials after visiting various places. The fact thatAKI Ltd. also requested for allotment of suitableland near Indore and ultimately the land close toIndore was selected, does not necessarily meanthat the official team was acting at the dictates ofthe said Company. Having regard to the strategiclocation and importance of the Indore city, the

choice of site near Indore cannot be said to bevitiated by any extraneous considerations.Entering into MOU with the two Companies andthereafter initiating requisite steps for theacquisition of the land does not, in our view,detract from the public purpose character ofacquisition, MOU, in ultimate analysis, is in themutual interest of both the parties and was onlydirected towards the end of setting up of anindustrial complex under the name of 'diamondpark' which benefits the public at large andincidentally benefits the private entrepreneurs. “Thus, in the said judgment, the apex court took the view thatacquisition was not for AKI Ltd. , a company but acquisition was madethrough M.P. Audyogik Kendra Vikas Nigam (State GovernmentCorporation), which has submitted the proposal and AKI Ltd. was one ofthe entrepreneurs who were to be allotted. In Pratibha Nema's caseissue as to at what stage infusion of fund is to take place by the Statewas not under consideration since the acquisition was routed by theNigam and all funds were to be born by the Nigam. Amount which waspaid by AKI Ltd. by cheque to the Nigam was held to be advancepayment towards lease amount as per the terms of MOU.With regard to infusion of fund by the State, submission of ShriRakesh Dwivedi, learned Senior Counsel appearing for the respondentno.2 is that such infusion of fund can be made by the State at any stageprior to issuance of declaration under Section 6 of the Act. Reliance hasbeen placed on the judgments in M. Venkatapathi Raju Vs. State ofAndhra Pradesh & Anr., AIR 1957, A.P. 686, Mrs. R.D. Chand & AnrVs. State of Andhra Pradesh & Ors., AIR 1963 A.P. 383, Kali PadaBanerjee Vs. State of West Bengal; AIR 1966 Calcutta, 480,, AIR1983 Alld, 136, Luxmichand & Ors Vs. State of U.P. & Ors., andSree Raja Kandregula Srinivasa Jagannadha Rao PantuluBahaddur Vs. State of Andhra Pradesh, AIR 1960 Andhra Pradesh,343 .In Venkatpathi Raju’s case, learned Single Judge of Andhrapradesh High Court laid down following:“That although it is not necessary that thedeposit of compensation should precede thenotification under section 6 or that the declarationneed not ex facie show the intention of theGovernment as envisaged in the proviso, thedeclaration of intention of the Government to pay, apart of the compensation out of public funds shouldprecede the notification under section 6. It is notnecessary to repeat the reasoning in support of thisconclusion. The Government have not statedanywhere that the intention was made manifest priorto the notification, nor even an attempt made in thatbehalf.”In Mrs. R.D. Chand & Anr (supra) the same proposition wasrepeated that the Government must decide regarding the payment ofcompensation from public revenue before issuance of notification underSection 6.In Kali Pada Banerji’s case (supra) the Division Bench of theCalcutta High Court held that the decision to contribute out of public fundneed not be mentioned in the notification. Such a statement however,has to be made in the declaration under Section 6(1).In Luxmichand’s case (supra) the Division Bench of this Courtlaid down that the second proviso to Section 6 does not require actualdeposit of the compensation.In Raja Kandregula Srinivasas case (supra) the sameproposition was laid down by the Andhra Pradesh High Court that theintention of the Government to pay a part of the compensation out ofpublic revenue must be made manifest before the publication of thedeclaration under Section 6. However, it is not necessary that such anamount must be paid before the notification.The question as to in what stage decision to contribute public fund

is to be taken has been considered and answered in Devinder Singh’scase. Learned counsel for the petitioners has placed heavy reliance onthe judgment of the Apex Court in Devinder Singh Vs. State ofPunjab & Ors, (2008) 1 SCC 728. The facts of Devinder Singh’s caseand the proposition as laid down by the Apex Court after considering theearlier judgments of this Court needs to be noted in detail. Section 4notification issued in the said case provided that the land is likely to berequired to be taken by the Government “at the public expense”, for apublic purpose, namely for setting up of a Ganesha Project, M/s Nationaltraders Ltd at Village Chak Gujran, Tehsil & Distt. Hoshiarpur. Objectionswere filed under Section 5-A. An agreement under Section 41 of the Actwas entered into between the Company and the Sate. Notification underSection 6 was also published on the same date i.e. 27/2/2003. The landowners challenged the notification issued under Sections 4 and 6. Duringthe pendency of the writ petition a sum of Rs. 100/- was deposited by theState as a token amount for acquisition of the said land. The writ petitionwas dismissed by the High Court. Following reasons were given by theHigh Court in dismissing the writ petition:-“(i) The acquisition was for a public purpose in viewof the report submitted under the Act, relevant portionwhereof is as under :In case of M/s. International Tractors Ltd. thecompany has entered into an agreement with a Frenchcompany named M/s. Renault Agriculture France formanufacture of latest technology tractors. M/s.Renault Agriculture France holds 20% equity in thecompany. Production of these latest technologytractors will boost export, which will contribute to thegeneral welfare and prosperity of the wholecommunity.Therefore, in view of the facts and the relevant lawas mentioned above, it is proved beyond doubt thatthe profits have actually gone to the general public......(ii) Acquisition of the lands in question was not acolourable exercise of power.(iii) Acquisition was made in terms of the provisionscontained in Part II of the Act and not Part VIIthereof, as the State had also contributed a sum ofRs.100/- for the purpose of acquisition of lands.(iv) Execution of the agreement with RespondentNo.5-Company and declaration made under Section 6of the Act although were made on the same day, thesame did not suffer from the vice of non-application ofmind.(v) Respondent No. 5 being not a private company,statutory limitations contained in Section 44B of theAct are not attracted.(vi) Rule 4 of the Land Acquisition (Companies)Rules, 1963 (for short, 'the Companies Rules') beingdirectory in nature, it was not necessary to complywith the provisions thereof.”Before the Apex Court the judgment of the High Court waschallenged contending that the High Court erred in taking the view thatthe land can be compulsorily acquired for a company in accordance withthe provisions of Part 2. It was further contended that in view of insertionof Clause viii of sub section”f” in Section 3 by Act 68/84, provisions ofpart 2 were not available for acquisition of land for companies. TheSupreme Court noticed the definition of Corporation owned or controlledby the State under Section 3 (cc), company under Section 3(e) and publicpurpose under Section 3(f). Following was laid down by the Apex Court inparagraph 16 which is quoted below:“16.When a request is made by any wing of theState or a Government company for acquisition ofland for a public purpose, different procedures areadopted. Where, however, an application is filed foracquisition of land at the instance of a 'company', theprocedures to be adopted therefor are laid down in

Part VII of the Act. Although it may not be decisivebut the conduct of the State as to how it intended todeal with such a requisition, is a relevant factor.”The Apex Court also considered the provisions of Rule 4 of LandAcquisition “Companies Rule 1963” hereinafter called the “Rule 1963”.Rule 4 sub-rule 1 (vi) as noted above provides that if the land proposedto be acquired is a good agricultural land the acquisition is to be avoidedand there has to be inquiry as to whether any alternative suitable site canbe found. Rule 4 sub-rule 2(1) further mandates that in case the land isproposed to be acquired is an agricultural land, Senior Agricultural Officerof the District is to be consulted. In para 18 of the judgement the ApexCourt has emphasised that the State must form an opinion that the landswhich are going to be acquired are not good agricultural land. Followingwas laid down in para 18 which is quoted below:“18. The State is also enjoined with a duty tomake an inquiry wherefor an opportunity of hearing tothe company is required to be given. When the Stateintends to proceed with the acquisition of land it mustform an opinion that the lands which are going to beacquired are not good agricultural lands. The rules byand large lay down a statutory policy in that behalfand question of ignoring the same by the State doesnot arise.“The Apex Court in Devinder Singh’s case also referred to thejudgment of the Apex Court in Pratibha Nema’s case (supra) speciallythe proposition that in case the acquisition for a public company publicpurpose is not to be assumed and point of distinction between theacquisition of land in Part II and Part VII would be source of fund tocover the cost of acquisition. In paragraph 3 of the judgment followingwas laid down:“3. Objections having been called for, the appellantsherein filed their objections in terms of Section 5A ofthe Act, inter alia, stating :"5. That the proposed acquisition by the PunjabGovernment is unconstitutional, uncalled for andagainst law and fact of the case, just in order to causeloss to the objectors and to give unlawful gain to otherparty, i.e., the proposed Ganesha Project M/s.International Tractor Ltd.7. That the acquisition of the proposed land belongingto the objectors is against the interest of the objectorskeeping in view the policies of the State. The land inquestion is cultivable fertile land and the proposedproject if any can be shifted some where else at somebarren land as well as in the industrial zone accordingto Industries Master Plan and in this way, it is in theinterest of the Pollution Control Department.9. That the objectors are cultivating the land for thelast over 25 years, it is consolidated at one place wherein the objector has installed electric motors and plantedpopular trees around the fields. The objectors do notwant that the land in question be acquired since it isagainst their interest and objectors are dependent onthis Acquisition land. The Agriculturist/Farmer isentirely dependent on his land for his livelihood. Thereare various projects in the name of Escorts Tractors,Mohindra Tractors, Massy Furgon Tractors and so manyother tractors companies/industries fulfilling the needsof the public and as such there is no need at all of theproposed industry to be set up in the lands of theobjectors.10. That in any way the proposed acquisition is againstthe rules of the acquisition and the act itself keeping inview the interest of the objectors thus causing wrongfulloss to the objectors and causing wrongful gain to theproposed objectors".The Supreme Court in Devinder Singh’s case also considered the

effect of contribution of sum Rs. 100/- by the State. In paragraph 37, theApex Court held that ordinarily the Court could not have gone into thequestion regarding contribution by the State, but the agreement providedfor payment of entire compensation by the Company. The Apex Courtfurther held that decision of infusion of fund has to be taken prior toentering into the agreement. Following was laid down in paragraphs 37and 38:“37. In this case we may notice that purportedcontribution had been made only after the writpetitions were filed. Ordinarily, this Court would nothave gone into the said question but the agreementprovides for payment of entire compensation by thecompany. We do not know as to at what stage theState thought it fit to meet a part of the expenses foracquisition of land. Such an opinion on the part of theState having regard to the statutory scheme shouldhave been formed prior to entering into theagreement itself. The agreement does not mentionabout any payment of a part of compensation by theState. We, in absence of any other material on record,must hold that the State had not formed any opinionin that behalf at least when the agreement wasexecuted. The wisdom in all probabilities dawned onthe officers of the State at a later stage.38. Satisfaction on the part of the State required to bearrived at upon formation of opinion on the basis ofmaterials brought on records for the purpose of Part IIof the Act are different from that of Part VII. Once theappropriate Government arrives at a decision that theland sought to be acquired is needed for a publicpurpose, the court would not go behind it, as thesame may furnish a valid argument for upholding anacquisition under Part II. But when an acquisition ismade under Part VII, the conditions precedentstherefor as contained in the Companies Rules must besatisfied. On the face of record, if it can be shown thatthe Government had ignored the mandatory provisionsof the Act, the acquisition would have to be struckdown. ”In the case in hand also the agreement under Section 41 wasexecuted by the State and the Company which specifically provided thatthe entire cost has to be borne by the Company. There being agreementbetween the parties that the entire fund shall be borne by the Companythe law as laid down in paragraph 37 as quoted above applies with fullforce in the facts of the present case. In paragraph 41 of the judgmentit was further held as under:“41. A declaration is to be made either for a publicpurpose or for a company. It cannot be for both.”The Apex Court further proceeded to examine as to whether Rule4 of the Rule 63 are mandatory or directory. The Apex Court afterconsidering the earlier decisions held that compliance of Rule 4 ismandatory.Shri Rakesh Dwivedi, learned Senior Counsel appearing for therespondent no.2 has given much emphasis on paragraph 52 of DevinderSingh’s case (supra). In paragraph 52, the Apex Court observed that thedecision of this Court in Somawanti’s case that the stage on which rule4 is required to be complied with is not the stage prior to issuingnotification under Section 4 of the Act, but declaration under Section 6,does not appear to be correct. For taking the above view reliance was118placed in paragraph 52 on two judgments of the Apex Court namely Stateof Gujarat & Anr Vs. Patel Chaturbhai Narsibhai & Ors., AIR, 1974 SC 629,and General Government Servants Co-operative Housing Society Vs.Smt.Wahabuddin & Ors. 1981 (2) SCC 352.In the case of State of Gujrat (supra) AIR 1974 SC 629, the threeJudges’ Bench of the Apex Court had the occasion to consider Rule 4 ofthe Rule, 1963. The Apex Court in the said case held that the owners of

the land are entitled to opportunity of being heard in an inquiry underRule 4. The inquiry in the said case was held prior to Section 4notification which was subsequently cancelled. The second case relied bythe Supreme Court was General Government Servants Co-operativeHousing Society (supra). The said case was also a judgment by threeJudges. Rule 4 also came up for consideration in the said judgment. Inparagraph 13 of the judgment it was held by the three Judges’ Benchthat compliance of Rule 4 precedes the notification under Section 4 aswell as compliance of Section 6 of the Act. Paragraph 13 is quotedbelow:“13.Sub-rule (1) requires the Government todirect the Collector to submit a report to it on thematters enumerated in clauses (i) to (vi) of sub-rule(1) which is for the benefit of the Company. Thepurpose is to avoid acquisition of land not suitable fora company. Clause (ii) of sub-rule (1) requires thatthe company has to make all reasonable efforts to getsuch lands by negotiation with the person interestedtherein on payment of reasonable prices and thatsuch efforts have failed. The purpose of clause (ii)seems to be to avoid unnecessary land acquisitionproceedings and payment of exorbitant prices. Thepurpose of clauses (iii), (iv) and (v) are obvious. Thepurpose of clause (vi) is to avoid acquisition of goodagricultural land, when other alternative land isavailable for the purpose. Sub-rule (2) of Rule 4119requires the Collector to give reasonable opportunityto the company so that the Collector may hold aninquiry into the matters referred to in sub-r. (1). TheCollector has to comply with cls. (i), (ii) and (iii) ofsub-rule (2) during the course of the inquiry undersub-rule (1). The Collector under sub-r. (3) then hasto send a copy of his report of the inquiry to theappropriate Government and a copy of the report hasto be forwarded by the Government to the LandAcquisition Committee constituted under Rule 3 forthe purpose of advising the Government in relation toacquisition of land under Part VII of the Act, the dutyof the Committee being to advise the Government onall matters relating to or arising out of acquisition ofland under Part VII of the Act (sub-rule (5) of Rule 3).No declaration shall be made by the appropriateGovernment under Section 6 of the Act unless theCommittee has been consulted by the Governmentand has considered the report submitted by theCollector under Section 5A of the Act. In addition,under clause (ii) of sub-rule (4) of Rule 4, theCompany has to execute an agreement under Section41 of the Act. The above consideration shows thatRule 4 is, mandatory; its compliance is no idleformality, unless the directions enjoined by Rule 4 arecomplied with, the notification under Section 6 will beinvalid. A consideration of Rule 4 also shows that itscompliance precedes the notification under Section 4as well as compliance of Section 6 of the Act.”In paragraph 48 of Devinder Singh’s case the Apex Court hasnoticed another three Judge judgment in M/s Fomento Resorts andHotels Ltd Vs. Gustavo Ranato Da Cruz Pinto & Ors, 1985 (2) SCC 152. InFomento Resorts and Hotels Ltd (supra) compliance of Rule 4 of Rule 63120came up for consideration before Three Judges Bench interpreting Rule 4it laid down that an inquiry under Rule 4 might be made before issuanceof notification under Section 4 of the Act, but it is not a sine-qua non forissuance of notification under Section 4. Following was laid down inparagraph 13 which is quoted below:“13. To complete the acquisition proceedings,

notification under S. 6 of the Act is required. Section 6of the Act enjoins that the government has to besatisfied that the land is needed for public purpose orfor a Company and after declaration is made theacquisition is complete after the award is made andpossession of the land is taken when the land vestsunder S. 16 in the government free fromencumbrances. Section. 4 does not require as suchthis satisfaction of the government. The governmentmight initiate acquisition proceedings "if it appears" tothe government that land is needed either for publicpurpose or for a Company. That might appear to thegovernment by enquiry aliunde or on a petition orapplication made by any Company. Whether the needis proper or genuine that can be found by thegovernment subsequently after notice under S. 4 ofthe Act. An enquiry under S. 4 might be made beforeissuance of the notification under section 4 of the Actbut it is not a sine qua non for the issuance of thenotification under section 4 to have an enquiry underR. 4 of the Rules. The scheme and the language ofthe Act and the Rules do not indicate that. As notedbefore, S. 4 does not require government to besatisfied; it is sufficient if it appears to thegovernment that land is needed either for publicpurpose or for a Company. It may so appear to thegovernment either by independent enquiry or from121reports and information received by the governmentor even from an application by the companyconcerned.”In the judgment of Fomento Resorts and Hotels Ltd (supra) theApex Court had noticed its earlier judgment in General GovernmentServants Co-operative Housing Society the Court made followingobservations:“24. It appears to us that the reference to R. 4in the context in which it was made was inadvertent.What perhaps the Court wanted to convey was theneed of compliance of entering into agreement underS. 41 before the Issuance of notification under S. 6 ofthe Act. Otherwise it appears that there was noenquiry under R. 4 of the Rules before issuance of thenotification under S. 4 yet the notification under S. 4was not quashed. The observation then in any event isobiter.”It is to be noticed that in Somawanti’s case Rule 4 of Rule 1963was neither under consideration nor could have been considered sincewhen Somawanti’s case was decided Rule 1963 had not even beenframed. (Judgment of Somawanti’s case is dated 02/5/1962). Thus, thereference of Somawanti’s case in paragraph 52 is a slip of pen and theApex Court in fact was referring to Fomento Resorts and Hotels Ltd whichwas considered in paragraph 48 of the judgment. In any view of thematter in the present case the question as to when inquiry under Rule 4of the Rule 63 is to be made is not in issue and nothing turns out on theobservations made in paragraph 52. In the present case, inquiry underRule 4 of the Rule 63 has not been held at any stage. There is on recordthe letter of the Collector dated 11th January, 2008 that no inquiry underRule 4 was held.We, again revert to the issue as to at what stage the decision toinfuse public fund by the State has been taken in the present case.In the present case, agreement has already been entered betweenthe Company and the State on 17/2/2004 under Section 41 of the Act,1894, which provided that the entire cost shall be borne by the Company.The law as laid down by the Supreme Court in the case of DevenderSingh in paragraph 37 for decision to infuse the fund be taken beforeentering into the agreement under Section 41 fully covers the issue andin the present case since the agreement was executed on 17/2/2004 and

the decision to infuse the fund can be at best said to have taken on08/6/2004 or 16/6/2004, the course of the acquisition which had actuallystarted as acquisition for a Company could not have been changed andthe acquisition proceedings ought to have proceeded with aftercompliance of Part VII and Rule 1963. Two more judgments relied by ShriRakesh Dwivedi, learned counsel for the the respondent no.2 needs to bementioned in this context i.e. Sooraram Pratap Reddy & Ors. Vs.District Collector Ranga Reddy, & Ors (2008) 9 SCC 552 andUrmila Roy & Ors. Vs. M/s Bengal Peerless Housing DevelopmentCompany Ltd & Ors, (2009) 5 SCC 242.Sooraram’s case was a case where Section 4 notification wasissued for public purpose for the development of “Financial District andAllied Projects”. In the said case the project was to be implemented byAndhra Pradesh Industrial Infrastructure Corporation Ltd which was theCorporation of the Government. The project was to be implemented byAPIIC. It was contended that the acquisition proceedings were taken withmalafide to transfer valuable land of small farmers to foreign companiesand few selected persons. The Apex Court in the said case held that theentire amount of compensation was to be paid by APIIC which was towork as nodal agency for the execution of the project. It was held thatthe acquisition was thus for public purpose. Following was laid down inparagraphs 132 and 133.“132. It is clearly established in this case thatthe infrastructure development project conceived bythe State and executed under the auspices of itsinstrumentality (APIIC) is one covered by the Act. Thejoint venture mechanism for implementing the policy,executing the project and achieving lawful publicpurpose for realising the goal of larger public goodwould neither destroy the object nor vitiate theexercise of power of public purpose for developmentof infrastructure. The concept of joint venture to tapresources of private sector for infrastructuraldevelopment for fulfilment of public purpose hasbeen recognised in foreign countries s also in India inseveral decisions of this Court.133. The entire amount of compensation isto be paid by State agency (APIIC) which also worksas nodal agency for execution of the project. it isprimarily for the State to decide whether there existspublic purpose or not. Undoubtedly, the decision ofthe State is not beyond judicial scrutiny. Inappropriate cases, where such power is exercisedmala fide or for collateral purposes or the purportedaction is dehors the Act, irrational or otherwiseunreasonable or the so-called purpose is “no publicpurpose” at all and fraud on statute is apparent, awrit court can undoubtedly interfere. But except insuch cases, the declaration of the Government is notsubject to judicial review. In other words, a writcourt, while exercising powers under Articles 32, 226or 136 of the Constitution, cannot substitute its ownjudgment for the judgment of the as to whatconstitutes” public purpose.”124The above case is thus clearly distinguishable from the presentcase. In the above case, the entire fund was to be paid by APIIC and theacquisition was for public purpose. Section 4 notification clearly mentionsthat the project was to be developed by APIIC and the acquisition wasnot proposed nor initiated on a request of any Company nor the land wasto be transferred to any Company.Urmila Roy’s case (supra) was a case where Section 4notification was issued for acquisition of land for a Housing Scheme. Theargument raised before the Apex Court was that the land had beenacquired under the garb of public purpose whereas it was intended tobenefit the Bengal Peerless, a private party and an attempt had beenmade to camouflage the identity of the beneficiary as it has not been

specified in the notification under Sections 4 and 6 of the Act. Theacquisition was alleged to be an acquisition in colourable exercise ofpower.In Urmila Roy’s case (supra) following was laid down inparagraphs 44 and 57 which is quoted below:“44.In the present case, as already mentioned above,we find that a substantial part of the compensationhas, indeed, been paid by the State Government or bythe Housing Board which clearly satisfies the test ofpublic purpose. In this background, we endorse thefinding of the Division Bench that the procedureenvisaged in Part II and not in Part VII of the Actwould be applicable. This is precisely what has beendone.57.In view of what has been observed above, and inthe background of the present case, it becomes125crystal clear that though the execution of the housingscheme has been entrusted to a joint sector company,the overall control over the project has been retainedby the Government-controlled Board of Directors, fulldetails of the scheme have been provided with largeprovisions for the benefit of the poorer sections ofsociety, with the allotment of tenements either on asubsidised price or on “no-profit-no-loss” basis for thelow and middle income groups respectively, allotmentby draw of lots to avoid any arbitrariness and acomplete freeze on the price of residentialaccommodation with no escalation whatsoever forwhatever reason and the provision of facilities foreffective and comfortable living such as schools,roads, sewage, etc. We are, therefore, of the opinionthat the housing scheme fully satisfies the tests laiddown by the Supreme Court in the two cases citedimmediately above.”Thus, the judgment in Urmila Roys’ case is also distinguishableand not applicable in the present case. In Urmila Roy’s case theacquisition was for Housing Scheme which was to be implemented by theHousing Board and the Housing Scheme was entrusted to a joint sectorcompany, but the overall control over the project was of the GovernmentControlled Board of Directors.We have already noticed the relevant facts pertaining to theacquisition proceedings which emerge from the pleadings of the partiesand the original records placed before the Court. We have already heldthat the entire process for acquisition was initiated on application dated19/1/2004 submitted by the Reliance Delhi Power Private Ltd before theCollector, Ghaziabad. The Collector examined the proposal which was alsosupported by the deposit of Rs. 16 crores and wrote to the Director Land126Acquisition that the proposal has been received for land acquisition fromReliance Delhi Power Ltd. The Director vide its letter dated 28/1/2004 hasrecommended for taking steps for notification under Section 4(1)/17 inaccordance with Part VII and Part VIII of the Act and after followingSections 38 to 55 thus both the proposal and recommendation wasacquisition for Company. The State of its own has never decided toproceed with any acquisition proceedings for public purpose. As notedabove, the land was identified by Company itself. The original recordsproduced by the State clearly indicates that the proposal submitted by theDirector, Land Acquisition was examined and approved by the BhoomiUpyog Parishad which recommended for proceedings with the landacquisition with the condition that Part VII of the Act be complied with.The said recommendation dated 31/1/2004 has been approved by theHon’ble The Chief Minister. In the record, neither there was anyrecommendation nor any decision to proceed with the acquisition as apublic purpose acquisition, but the notification which was issued underSection 4 did not mention acquisition for a Company, but mentionsacquisition for public purpose. It is undisputed that till 08/6/2004 there

was no decision of the State Government to infuse public fund foracquisition which was initiated by the Company. Thus, on the date whennotification under Section 4 was issued, acquisition could not have beensaid to be acquisition for public purpose. The acquisition was clearly anacquisition for Company in which acquisition Section 17 was not availableas has already been observed above. Thus, we are of the opinion thatinvocation of Sections 17 (1) and 17 (4) were invalid.There is one more reason due to which dispensation of inquiryunder Section 5A of the Act by invoking Section 17(4) has to be heldunjustified. For invocation of power under Section 17 the principles andgrounds are well settled. The Apex Court in the case of Union of Indiaand others vs. Mukesh Hans reported in (2004)8 S.C.C. 14 hadconsidered the question of dispensation of inquiry under Section 5A byinvoking Section 17(4). The Apex Court in the said case has laid downthat mere existence of urgency or unforeseen emergency though is a127condition precedent for invoking Section 17(4), that by itself is notsufficient to direct the dispensation of the Section 5A inquiry. It has beenheld that opinion is to be formed by the Government that along withexistence of such urgency or unforeseen urgency there is also a need fordispensation of Section 5A inquiry. Following was laid down in paragraphs32 and 33 of the said judgment:-“32. A careful perusal of this provision which isan exception to the normal mode of acquisitioncontemplated under the Act shows mere existence ofurgency or unforeseen emergency though is acondition precedent for invoking Section 17(4) that byitself is not sufficient to direct the dispensation of 5Ainquiry. It requires an opinion to be formed by theconcerned government that along with the existenceof such urgency or unforeseen emergency there isalso a need for dispensing with 5A inquiry whichindicates that the Legislature intended that theappropriate government to apply its mind beforedispensing with 5A inquiry. It also indicates the mereexistence of an urgency under Section 17 (1) orunforeseen emergency under Section 17(2) would notby themselves be sufficient for dispensing with 5Ainquiry. If that was not the intention of theLegislature then the latter part of sub-section (4) ofSection 17 would not have been necessary and theLegislature in Section 17(1) and (2) itself could haveincorporated that in such situation of existence ofurgency or unforeseen emergency automatically 5Ainquiry will be dispensed with. But then that is notlanguage of the Section which in our opinion requiresthe appropriate Government to further consider theneed for dispensing with 5A inquiry in spite of theexistence of unforeseen emergency. This128understanding of ours as to the requirement of anapplication of mind by the appropriate Governmentwhile dispensing with 5A inquiry does not mean thatin and every case when there is an urgencycontemplated under Section 17(1) and unforeseenemergency contemplated under Section 17(2) existsthat by itself would not contain the need fordispensing with 5A inquiry. It is possible in a givencase the urgency noticed by the appropriateGovernment under Section 17(1) or the unforeseenemergency under Section 17(2) itself may be of suchdegree that it could require the appropriateGovernment on that very basis to dispense with theinquiry under Section 5A but then there is a need forapplication of mind by the appropriate Governmentthat such an urgency for dispensation of the 5Ainquiry is inherent in the two types of urgencies

contemplated under Section 17(1) and (2) of the Act.33. An argument was sought to be advanced onbehalf of the appellants that once the appropriateGovernment comes to the conclusion that there is anurgency or unforeseen emergency under Section17(1) and (2), the dispensation of enquiry underSection 5A becomes automatic and the same can bedone by a composite order meaning thereby thatthere no need for the appropriate Government toseparately apply its mind for any further emergencyfor dispensation with an inquiry under Section 5A. Weare unable to agree with the above argument becausesub-section (4) of Section 17 itself indicates that the"government may direct that provisions of Section 5Ashall not apply" which makes it clear that not in everycase where the appropriate Government has come to129the conclusion that there is urgency and under subsection(1) or unforeseen emergency under subsection(2) of Section 17 the Government will ipsofacto have to direct the dispensation of inquiry. Forthis we do find support from a judgment of this Courtin the case of Nandeshwar Prasad and another vs.The State of U.P. and others (1964 (3) SCR 425)wherein considering the language of Section 17 of theAct which was then referable to waste or arable landand the U.P. Amendment to the said section heldthus: AIR 1964 SC 1217, Para 11"It will be seen that S.17(1) gives power to theGovernment to direct the Collector, though no awardhas been made under section 11, to take possessionof any waste or arable land needed for public purposeand such land thereupon vests absolutely in theGovernment free from all encumbrances. If action istaken under section 17(1), taking possession andvesting which are provided in section 16 after theaward under section 11 are accelerated and cane takeplace fifteen days after the publication of the noticeunder section 9. Then comes section 17(4) whichprovides that in case of any land to which theprovisions of sub-section (1) are applicable theGovernment may direct that the provisions of section5-A shall not apply and if it does so direct, adeclaration may be made under section 6 in respectof the land at any time after the publication of thenotification under section 4(1). It will be seen that itis not necessary even where the Government makes adirection under section 17(1) that it should also makea direction under section 17(4). If the Governmentmakes a direction only under section 17(1) the130procedure under section 5-A would still have to befollowed before a notification under section 6 isissued, though after that procedure has been followedand a notification under section 6 is issued theCollector gets the power to take possession of theland after the notice under section 9 without waitingfor the award and on such taking possession the landshall vest absolutely in Government free from allencumbrances. It is only when the Government alsomakes a declaration under section 17(4) that itbecomes unnecessary to take action under Section 5-A and make a report thereunder. It may be thatgenerally where an order is made under section17(1), an order under section 17(4) is also passed;but in law it is not necessary that this should be so. Itwill also be seen that under the Land Acquisition Act

an order under section 17(1) or section 17(4) canonly be passed with respect to waste or arable landand it cannot be passed with respect to land which isnot waste or arable and on which buildings stand."The original records, which were produced before the Court,reveals following with regard to invocation of Sections 17(1) and 17(4) ofthe Act:-“(i) The Collector in his letter dated 24th January, 2004 hasobserved that for acquisition it is necessary to take proceedings underSection 17 of the Act (It is relevant to note that there was no specificrecommendation for dispensation of inquiry under Section 5A of the Actby invoking Section 17(4).(ii) The Director, Land Acquisition in his recommendation dated28th January, 2004 to the State Government observed that notificationunder Section 4(1)/17 of the Act be issued after completion of proceeding131of agreement (It is to be noted that there is no independentconsideration or recommendation for dispensation of inquiry underSection 5A of the Act).(iii) In the note of the Revenue Department dated 3rd February,2004 it was noticed that note with regard to justification of applyingSection 17 has not been made available by the administrativedepartment. It was further stated in the recommendation that specificopinion from the Law Department be obtained before giving permissionfor issuance of notification under Section 4(1)/17 of the Act as to whetherit is not necessary to get the entire compensation deposited looking toapplicability of urgency clause and for immediate taking possession of theland. The Law Department of the State on the same day, i.e., 3rdFebruary, 2004 gave its opinion that under Section 4/17 of the Act theCollector after taking possession shall transfer the land to the acquiringbody during which the agreement under Section 41 of the Act can beexecuted. It was further opined that deposit of the compensation isnecessary.(iv) There is also a note of the Revenue Department on therecord dated 8th February, 2004, which noticed that note of the EnergyDepartment is based merely on the report of the Collector dated 24thJanuary, 2004 whereas departmental urgency has not been specificallymentioned but the note of the Collector be relied for the purpose.(v) The Revenue Department gave its concurrence for issuanceof notification under Section 4(1)/17 of the Act on 11th February, 2004.From a perusal of the original records, it is clear that neither therewas any specificrecommendation for dispensation of inquiry under Section5A by invoking Section 17(4) of the Act nor in any report or note anyreason or material was mentioned for dispensation of inquiry. The land ofthousand of farmers was being sought to be acquired on the application132of respondent No.2 measuring 2500 acres. The farmers were dependenton the land for their livelihood, the necessity of establishment of powerproject was being felt in the State for decades, hence there has to besome special reason for dispensing with the inquiry. The Apex Court inthe case of State of Punjab vs. Gurdial Singh reported in (1980)2S.C.C. 471, while considering the question of dispensation of inquiryunder Section 5A had laid down “....compulsory taking of a man’sproperty is a serious matter and the smaller the man the more seriousthe matter. Hearing him before depriving him is both reasonable and preemptiveof arbitrariness, and denial of this administrative fairness isconstitutional anathema except for good reasons.....”. There being noapplication of mind regarding necessity of dispensation of inquiry underSection 5A of the Act by invoking Section 17(4), the dispensation ofinquiry under Section 5A cannot be sustained. This is thus an additionalreason for disapproving the dispensation of inquiry under Section 5A.At this stage one more aspect of the matter needs to be noted.When there is large scale acquisition of agricultural land of farmers, whoalong with their family are dependent for livelihood on the land, there hasto be very strong reason for dispensation of inquiry under Section 5A ofthe Act especially when the urgency is not of that magnitude that bygiving opportunity under Section 5A the purpose and object shall be

frustrated. Non giving of opportunity under Section 5A to large number ofpersons generates anger, protest and disruption of a public peace, whichcannot be ignored especially by the Government which is duty bound tomaintain peace and harmony in the society. There being norecommendation for dispensation of inquiry under Section 5A, there beingno application of mind by the Collector or any Governmental departmentand no reason having been placed before the Court by the State as wellas by respondent No.2 for dispensation of inquiry under Section 5A, weare fully satisfied that dispensation of inquiry under Section 5A of the Actwas fully unjustified and cannot be sustained.The submission of the learned counsel for the petitioners further is133that notification under Section 4 was in colourable exercise of power. Thedoctrine of colourable exercise implies that when authority attempts toindirectly achieve a purpose which it cannot achieve directly. Colourbleexercise was explained by Krishna Iyer, J in State of Punjab Vs.Gurdial Singh’s case (supra).Following was laid down in paragraph 9 which is quoted below:“9. Pithily put, bad faith which invalidates theexercise of power - sometimes called colourableexercise or fraud on power and oftentimes overlapsmotives, passions and satisfaction - is the attainmentof ends beyond the sanctioned purposes of power bysimulation or pretension of gaining a legitimate goal.If the use of the power is for the fulfilment of alegitimate object the actuation or catalysation bymalice is not legicidal. The action is bad where thetrue object is to reach an end different from the onefor which the power is entrusted, goaded byextraneous considerations, good or bad, but irrelevantto the entrustment. When the custodian of power isinfluenced in its exercise by considerations outsidethose for promotion of which the power is vested thecourt calls it a colourable exercise and is undeceivedby illusion. In a broad, blurred sense, BenjaminDisraeli was not off the mark even in law when hestated. "I repeat..... that all power is a trust- that weare accountable for its exercise that, from the people,and for the people, all springs, and all must exist."Fraud on power voids the order if it is not exercisedbona fide for the end designed.”In Smt. Somawanti’s case (supra) the Hon’ble Supreme Courtheld that purpose for which the land is needed is a public purpose or not134is for the State Government to be satisfied which is with one exceptionthat if there is a colourble exercise of power the declaration will be opento challenge at the instance of the aggrieved party. Following was laiddown in paragraph 36:“36. Now whether in a particular case thepurpose for which land is needed is a public purposeor not is for the State Government to be satisfiedabout. If the purpose for which the land is beingacquired by the State is within the legislativecompetence of the State the declaration of theGovernment will be final subject, however, to oneexception. That exception is that if there is acolourable exercise of power the declaration will beopen to challenge at the instance of the aggrievedparty. The power committed to the Government by theAct is a limited power in the sense that it can beexercised only where there is a public purpose, leavingaside for a moment the purpose of a company. If itappears that what the Government is satisfied about isnot a public purpose but a private purpose or nopurpose at all the action of the Government would becolourable as not being relatable to the powerconferred upon it by the Act and its declaration will be

a nullity. Subject to this exception the declaration ofthe Government will be final.”From the facts and discussions as noted above, it is clear that theacquisition in question in the present case was an acquisition for a“Company” and there was a clear recommendation by every authoritythat acquisition be undertaken after compliance of Part VII. Theacquisition could not be treated as an acquisition for “public purpose”specially after the amendment of Section 3(f) by Act No.68/84. The Stateinvoked Sections 17(1) and 17(4) which was not available for acquisition135for a company, thus, in the notification dated 11.2.2004 under Section 4invocation of Sections 17(1) and 17(4) and notifying the acquisition as forpublic purpose was colourable exercise of power.Now remains one more submission raised by the learned counselfor the petitioners based on Section 43 of the Act. Section 43 of the Act isquoted below:“43.Sections 39 to 42 not to apply whereGovernment bound by agreement to provide land forCompanies.- The provisions of sections 39 to 42, bothinclusive, shall not apply and the correspondingsections of the Land Acquisition Act, 1870 (10 of1870), shall be deemed never to have applied, to theacquisition of land for any Railway or other Company,for the purposes of which, under any agreement withsuch Company, the Secretary of State for India inCouncil, the Secretary of State, The CentralGovernment or any State Government is or was boundto provide land. ”The submissions of Shri Rakesh Dwivedi, learned counselappearing for the respondent no. 2 is that the State Support Agreementwas executed on 16/6/2004 between the respondent no.1 and 2 whichagreement falls within the meaning of Section 43, consequently Sections39 to 42 are not applicable. It is contended that the State Supportagreement had come into existence before issuance of Section 6notification, hence the State is bound to provide land. It is furthersubmitted that Section 43 uses the word “shall not apply” hence oncethere is an agreement as contemplated under Section 43, Sections 39 to42 would mandatorily and automatically become inapplicable.136Section 43 of the Act provides for acquisition of land for Railway orfor other Company for the purpose by which under any agreement withsuch company Central Government or any other State Government is orwas to be bound to provide land. The agreement which is contemplatedunder Section 43 is not an agreement which is to be entered intobetween the State Government and the Company after issuance ofSection 4 notification. The agreement contemplated is a pre-existingagreement which obliges the State to provide land for any Railway orother Company. The agreement dated 16/6/2004 i.e. State SupportAgreement executed between the Company and the State cannot be saidto be an agreement which is contemplated under Section 43 of the Actand the submissions of Shri Rakesh Dwivedi, learned Senior Counselappearing for the respondent no.2 based on Section 43 of the Act, cannotbe accepted.By accepting the interpretation as put by Shri Rakesh Dwivedi,learned Senior Counsel appearing for the respondent no.2 the provisionsof the Act, specially the provisions of Part VII can be easily defeated byentering into such agreement to provide land. Provisions of Section 43cannot be read in a manner so as to defeat the very object and purposeof the Act. The statement of object by Amendment Act 68/1984 asextracted above clearly provide that the acquisition of land for nongovernmentcompanies under the Act shall henceforth be made inpursuance of Part VII of the Act in all the cases. In case the StateSupport Agreement dated 16/6/2004, is treated to be an agreementwithin the meaning of Section 43, the very purpose and object of theAmendment Act 68/1984 shall be defeated and the State Governmentand other interested parties can easily defeat the statutory requirementof Part VII by just entering into an agreement. It is well settled that

interpretation of the provisions of an Act which defeats the very purposeand object of the Act has to be avoided.One of the submissions of the petitioners as noted above is that137acquisition proceedings at the instance of Reliance Delhi Power Pvt Ltd, itbeing a private Company was prohibited under Section 44B. Thepetitioners’ case is that the said Company was a Private Ltd Companywhich continued as such till 31/3/2004 when it was registered as a PublicCompany. The submissions of Shri Rakesh Dwivedi, learned counselappearing for the respondent no.2 is that the Reliance Delhi PowerPrivate Ltd was a subsidiary of M/s. Reliance Patal Ganga Private Limiteda Public Company which Company held 67 percent equity in RelianceDelhi Power Private Ltd. Petitioners reply is that it is revealed from theirown documents of the respondent no.2 that M/s Reliance Patal GangaPower Ltd. held 1700 shares representing only 17 percent of the totalequity till 19/1/2004. It is emphatically submitted that on the date ofapplication dated 19/1/2004 and the date of execution of the agreementdated 19/2/2004, Reliance Delhi Power Private Ltd was a privateCompany and its application was hit by prohibition under Section 44B. Itis submitted that it was only on 31/3/2004 that the certificate ofincorporation was made certifying change of the Company from a PrivateLimited Company to a Public Ltd Company which was intimated to theGovernment on 10/4/2004.Learned counsel for the parties have referred to variousdocuments filed in support of their respective claim. Admittedly,according to own case of the petitioners, the Company had subsequentlybecome Public Ltd. Company. We do not find it necessary to enter intothe question as to whether the Reliance Delhi Power Pvt. Ltd can betreated as subsidiary company of M/s Reliance Patal Ganga Ltd,subsequent change of the company from Private Ltd. to Public LimitedCompany having taken place, we leave the matter here without enteringinto any further discussion.Now the challenge by the petitioners to the acquisition of the year2006 i.e. notification dated 29/8/2006 needs to be considered.Submission of the petitioners is that the invocation of Urgency Clause17(1) and dispensation of the inquiry under Section 17(4) was unjustified.138There was no material with the State Government to form any opinionthat there are sufficient ground for invoking Sections 17(1) and 17(4).Reliance has been placed by the learned counsel for the petitioners onthe judgment of the Supreme Court reported in Union of India & Ors Vs.Krishan Lal Arneja & Ors, 2004 (8) SCC 453. After considering theprovisions of Sections 4, 5A and 17 following was laid down by the ApexCourt in paragraphs 15 and 16 which are quoted below:“15. These provisions clearly provide protection to aperson whose land is to be acquired by providing rightto object to the proposed acquisition of any landnotified under Section 4; opportunity of hearing is alsoprovided to show that the proposal to acquire the landwas unwarranted; such opportunity available underSection 5A cannot be denied except in case ofurgency.16. Section 17 confers extraordinary powers on theauthorities under which it can dispense with thenormal procedure laid down under Section 5A of theAct in exceptional case of urgency. Such powerscannot be lightly resorted to except in case of realurgency enabling the Government to take immediatepossession of the land proposed to be acquired forpublic purpose. A public purpose, however laudable itmay be by itself is not sufficient to take aid of Section17 to use this extraordinary power as use of suchpower deprives a land owner of his right in relation toimmovable property to file objections for the proposedacquisition and it also dispenses with the inquiryunder Section 5A of the Act. The Authority must havesubjective satisfaction of the need for invoking

urgency clause under Section 17 keeping in mind thenature of the public purpose, real urgency that thesituation demands and the time factor i.e. whether139taking possession of the property can wait for aminimum period within which the objections could bereceived from the land owners and the inquiry undersection 5A of the Act could be completed. In otherwords, if power under section 17 is not exercised, thevery purpose for which the land is being acquiredurgently would be frustrated or defeated. Normallyurgency to acquire a land for public purpose does notarise suddenly or overnight but sometimes suchurgency may arise unexpectedly, exceptionally orextraordinarily depending on situations such as due toearthquake, flood or some specific time bound projectwhere the delay is likely to render the purposenugatory or infructuous. A citizen's property can beacquired in accordance with law but in the absence ofreal and genuine urgency, it may not be appropriateto deprive an aggrieved party of a fair and justopportunity of putting forth its objections for dueconsideration of the acquiring authority, whileapplying the urgency clause, the State should indeedact with due care and responsibility. Invoking urgencyclause cannot be a substitute or support for the laxity,lethargy or lack of care on the part of the StateAdministration.”The notification of acquisition of land was already issued on11/2/2004, which was followed by declaration under Section 6 dated25/6/2004. The case of the respondent no.2 was that possession wastaken by the State and conveyance deed was executed in favour of theCompany on 23/11/2005. The Company claimed possession of the land,but from the pleadings of the parties it is established that no work withregard to project in question had commenced even after more than 2years of declaration under Section 6 on 25/6/2004.140As noticed above, the Apex Court in the case of Union of Indiaand others vs. Mukesh Hans has laid down that inquiry under Section5A can be dispensed with only after the appropriate Government formsan opinion that along with the existence of urgency under Section 17(1)or unforeseen urgency under Section 17(2), there was also a need todispense with Section 5A inquiry.It is thus to be examined as to whether before issuing notificationunder Section 4 read with Section 17(1) and (17(4) there was sufficientmaterial for formation of opinion that dispensation of inquiry underSection 5A is necessary. The original records pertaining to 2006acquisition indicates that the proceedings for additional acquisition of landwas initiated on the request of Reliance Energy Generation that certainland has been left to be acquired. The Collector was asked by theGovernment to submit proposal. The State Government wrote to theCollector for submitting proposal as to how much additional land isrequired. The Collector wrote letter dated 8th July, 2005 proposing toacquire 92.52 acres additional land, which falls within the limits of theproject. From the original records submitted by the Government it doesnot appear that there was any recommendation or materials fordispensation of inquiry under Section 5A for issuance of notification underSection 4 read with Section 17(1) and 17(4).The 2006 acquisition was connected and in furtherance of 2004acquisition. After the notification under Section 6 dated 24th June, 2004the possession was claimed to have been taken by the State andconveyance deed was executed on 23rd November, 2005. The Companyclaimed possession of the land but from the pleadings of the parties it isestablished that no work with regard to project in question hascommenced even after more than two years of declaration under Section6. The case of the respondent No.2, as noted above, was to the effectthat a barbed fencing was erected by the Company, which was damaged

and thereafter a eight kilometres boundary wall was constructed by theCompany. No construction of project apart from construction of a site141office is claimed by the Company. The farmers had already startedagitating much before issuance of notification under Section 4 on 29thAugust, 2006. Thus we are of the view that there was no material on therecord nor there was any application of mind by the State fordispensation of inquiry under Section 5A before issuance of notificationunder Section 4 read with Section 17(1) and 17(4) dated 29th August,2006. Thus the invocation of Sections 17(1) and 17(4) in the notificationdated 29th August, 2006 is clearly invalid. The farmers were entitled forhearing in inquiry under Section 5A of the Act. It is also to be noted thatin consequence of 2006 notifications under Sections 4 and 6, the farmersneither executed any Kararnama with regard to compensation noraccepted compensation for the land sought to be acquired by 2006notification.There is one more reason for not sustaining the invocation ofSection 17(4) of the Act in notification dated 29th August, 2006. The 2006acquisition is connected with and consequent to the acquisitionundertaken by notification dated 11th February, 2004. With regard to2004 acquisition, we have already held that invocation of Sections 17(1)and 17(4) of the Act was unjustified and the farmers were entitled forhearing in proceeding under Section 5A of the Act. When hearing is to begiven to the farmers with regard to main acquisition proceedings of 2004,denying the hearing with regard to connected and consequentialacquisition proceedings of 2006 is unjustified. Thus dispensation ofinquiry under Section 5A by the notification dated 29th August, 2006 isliable to be struck down.In view of the above, we are of the view that invocation ofSections 17(1) and 17(4) in the notification dated 29th August, 2006 isunjustified and is clearly unsustainable.Now remains the Civil Misc. Writ Petition (PIL) No. 8968 of 2008(Vishwanath Pratap Singh and another vs. State of U.P. and others). Thefarmers whose land has been acquired having themselves come up in this142Court by filing various writ petitions, which we have proceeded toconsider and decide, we see no justification for considering the issuesraised in this public interest litigation. No decision is needed in publicinterest litigation. The public interest litigation is dismissed accordingly.In view of the foregoing discussion, we arrive at followingconclusions:1. The proceedings for acquisition of land was initiated by applicationdated 19/1/2004 by Reliance Delhi Power Pvt. Ltd afteridentification of the land measuring 2500 acres. The applicationwas made after payment of 10 percent of the acquisition cost and10 percent of the estimated compensation .2. The Collector processed the application submitted by the RelianceDelhi Power Pvt. Ltd on 19/1/2004 and forwarded the proposal tothe Director, Land Acquisition Directorate, Board of Revenue, U.P.Lucknow vide letter dated 24/1/2004. The letter stated that theproposal for acquisition has been received from Reliance DelhiPower Pvt. Ltd, Mumbai. It was also stated that the required 10percent amount of the land acquisition cost and 10 percent of theestimated cost has already been deposited by the Company.3. The Director, Land Acquisition vide recommendation dated28/1/2004, wrote to the Principal Secretary Energy, U.P. Lucknowstating that notification under Section 4(i)/17 be issued inaccordance with the provisions of Part VII and Part VIII of the Act(Sections 38 to 55).4. The recommendation of the Director, Land Acquisition dated28/1/2004, was examined by Energy Department of the State andthe matter was referred to the Bhoomi Upyog Parishad for itsrecommendation. Bhoomi Upyog Parishad through PrincipalSecretary (Niyojan) submitted the recommendation on 31/1/2004143recommending for proceeding with the land acquisition subject tocondition that acquisition be undertaken after compliance of Part

VII. The recommendation of Bhoomi Upyog Parishad wasendorsed by the Hon’ble The Chief Minister who has signed therecommendation on the same date i.e. 31/1/2004.5. The Secretary Revenue whose recommendations were alsoconsidered submitted recommendation on 03/2/2004 that beforeissuance of notification Section 4 (1)/17, the agreement underSection 41 with the company be got executed. According to para59 to 65 of the Land Acquisition Manual it was recommended thatthe entire cost of compensation be got deposited as per para 65 ofthe Land Acquisition Manual.6. There is no material on record that State at any point of timebefore issuing notification under Section 4 on 11/2/2004 identifiedany land or decided to acquire land for any power project. TheState having never decided to acquire any land for power project,all actions taken leading to issuance of notification under Section4(1) were on the basis of the proposal submitted by the Companyfor acquisition for a company. Thus, the acquisition in questioncannot be termed acquisition for public purpose.7. The acquisition proceeding initiated on application of the Companydated 19th January, 2004 being acquisition for a company, Section17 of the Act was no more available after the amendment broughtin the Act by Act No.68 of 1984. The invocation of Section 17(1)and 17(4) in the notification dated 11th February, 2004 was clearlyimpermissible. Even otherwise, there was no material on therecord nor there was any application of mind for dispensation ofinquiry under Section 5A of the Act.8. The invocation of Section 17(1) and 17(4) in the notification dated11th February, 2004 being illegal, the entire proceedings144subsequent there on is vitiated including issuance of notificationunder Section 6 dated 25th June, 2004.9. According to Section 44B of the Act no acquisition in favour of aprivate company can be made for a purpose other than thepurpose as provided under Section 40(1)(a) of the Act.10.In the acquisition, which was initiated by the Company byapplication dated 19th January, 2004, although there was clearrecommendation of Director, Land Acquisition and subsequentapproval of Hon’ble the Chief Minister dated 31st January, 2004that acquisition be proceeded after compliance of Part VII of theAct, there has been no compliance of Part VII of the Act in theacquisition in issue.11.For acquisition for a Company compliance of provisions of LandAcquisition (Companies) Rules, 1963 is mandatory, which was notat all done in the present case.12.The issuance of notification under Section 4 referring theacquisition as acquisition for public purpose although theacquisition was for a company, was in colourable exercise ofpower by the State Government with object to bye pass theprovisions of Part-VII of the Act and the Land Acquisition(Companies) Rules, 1963.13.The invocation of Section 17(1) and 17(4) in the notification dated29th August, 2006 was unjustified and unsustainable consequentlyall subsequent proceedings thereon is vitiated.Now, remains the last issue as to what relief the petitioners areentitled. For considering the issue of relief we have to look into the factsand events which have taken place consequent to acquisitionproceedings. The total land which has been acquired under 2004145notification is 2250 Acres.Shri Rakesh Dwivedi, learned counsel appearing for therespondent no.2 has placed much stress on two facts, firstly, sufficientnumber of farmers have not come up before this Court and total landwhich is a subject matter now in these writ petitions is much less ascompared to the land acquired and, secondly, more than 90 percent offarmers have accepted compensation after execution of Kararnama. Inthe writ petition of Pooran Singh it is claimed that the petitioners whowere 389 in numbers represent 800 acres of land (certain petitioners out

of 389 were permitted to be deleted also). The respondent no.2 in thecounter affidavit has stated that the land represented by the petitionersin Pooran Singh is not more than 550 acres. Apart from writ petition ofPooran Singh there are 42 other writ petitions in which substantial areaof land which has been acquired is in issue. It cannot be said that onlyhandful of farmers have come to this Court challenging the acquisition ofthe land which is subject matter of acquisition or number of petitioners isinsignificant as compared to the total area of land. With regard to 2006acquisition, it has come on record that neither possession has been takenby the Company nor farmers have executed Kararnama nor accepted anycompensation. Large number of farmers have accepted compensationand have come up before this Court challenging the acquisitionproceedings. The question has rightly been posed by Shri Rakesh Dwivedithat what will happen to acquisition qua the land which is not underchallenge. We have to balance the equities of the parties.After taking into consideration overall facts and circumstances, weare of the view that all the writ petitions (except Civil Misc. Writ Petition(PIL) No. 8968 of 2008 (Vishwanath Pratap Singh and another vs. Stateof U.P. and others) deserve to be and are hereby partly allowed withfollowing directions:-1. The notification dated 11th February, 2004 under Section 4 of theAct is partly quashed to the extent it invokes Section 17(1)/17(4)146and mentions the acquisition as an acquisition for “publicpurpose”. All subsequent proceedings consequent to thenotification dated 11th February, 2004 including the notificationunder Section 6 dated 25th June, 2004 are quashed.2. The Collector shall proceed with the inquiry under Section 5A incontinuation of the notification dated 11th February, 2004 andproceed with the proceedings in accordance with the provisions ofthe Act. The notice be issued by the Collector inviting objectionunder Section 5A of the Act in newspaper having wide circulationby not giving less than 30 days period for filing objection.3. The notification under Section 4 dated 29th August, 2006 is partlyquashed insofar as it invokes Section 17(1) and 17(4) of the Act.All subsequent proceedings consequent to the notification dated29th August, 2006 including the notification under Section 6 dated20th February, 2007 are quashed.4. The Collector shall proceed with the inquiry under Section 5A incontinuation of the notification dated 29th August, 2006 andproceed with the proceedings in accordance with the provisions ofthe Act. The notice be issued by the Collector inviting objectionunder Section 5A of the Act in newspaper having wide circulationby not giving less than 30 days period for filing objection.5. As a result of quashing of the notification dated 25th June, 2004and 20th February, 2007, the petitioners are liable to refund thecompensation received from the respondents. However, weprovide that it shall be open for those tenure holders, who have noobjection to the acquisition, to indicate so in their objection to befiled under Section 5A in which event they may seek exemptionfrom the Collector for refunding the compensation. The Collectorshall proceed to decide the objection under Section 5A of the Actof only those tenure holders who have refunded the compensation147received by them.6. The Collector may recover the compensation as arrears of landrevenue from the tenure holders who before the Collector do notin writing indicate their no objection with the acquisition.7. The Collector in the proceedings for acquisition and hearing of theobjection under Section 5A of the Act shall be entitled to pass suchorders and take such proceedings as may be necessary withregard to refund/deposit of the compensation.8. We further direct the Collector to get the substance of this orderpublished in all the leading newspapers, both in English and Hindi,for information to all concerned.Before we conclude, we record our appreciation for valuableassistance rendered by counsel for the parties, especially Sri Rakesh

Dwivedi, Senior Advocate, whose assistance has made our task easy indeciding the important issues, which had arisen in these writ petitions.In result all the writ petitions (except Civil Misc. Writ Petition (PIL)No. 8968 of 2008 (Vishwanath Pratap Singh and another vs. State of U.P.and others) are partly allowed and Writ Petition (PIL) No.8968 of 2008 isdismissed.Parties shall bear their own costs.Dated: December 4, 2009.LA/Rakesh/SB