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136

CHAPTER-IV

CONCEPT OF PUBLIC PURPOSE: ITS IMPORTANCE AND

USEFULNESS IN THE PRESENT SCENARIO

4.1 Introducton

It has always been recognized that the power of eminent domain is an

essential attribute of sovereignty. This power connotes the legal capacity of the state

to take the private property of individuals for public purposes.1

The importance of the

 power of eminent domain to the life of the state need hardly be emphasis. It is so

often necessary for the performance of governmental functions to take  private

 property for public use. The power is inalienable it is based on the two maxims that

1!  saluspopuliest supreme lex i.e." the interest and claim of the whole community is

always superior #!  Necessitapublic major est quam private i.e." public necessity is

greater than private interest and claim of an individual.

The power of eminent domain has three essential attribute of sovereignty.

$irst" the power of the state to take over private land% second" this power is to  be

exercised for public ground% and third" it is obligation on the &tate to compensate

those whose lands are taken over. 'ssentially it deals with power of the state to

expropriate lands of individuals who" are not willing sellers" it is based on the

 principle that interests of the whole community is greater than individual interest.

Thus property may be needed and ac(uired under this power for government offices"

libraries" slum clearance pro)ects" public schools" college and universities"  public

highways" public parks" railways" telephone and telegraph lines" dams" drainage"

severs and water systems and many other pro)ects of public interest convenience and

welfare.#

*idening the scope of public purpose was advocated citing globalisation that

in the absence of land ac(uisition" India will be remain a step back compared to other 

countries. The other argument was that new industrial units established by the

ac(uisition of land would generate a large number of employment. Thus logic seems

to be that industrial development leads to economic development and economic

1United States v. Jones, 1++3! #, 'd 1-" 1-,.

#/.0. &huklas 2Constitutional Law of India, ahendra 4. &ingh" revd. 'astern 5ook ompany"1#

thed. #--+! pp #7+877.

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development is national development. Thus industrial purpose is public  purpose.

9ence the :and ;c(uisition 5ill #--, seeks to amend the definition of public  purpose

to accommodate industrial purpose. Thus it is clear indication that the legislative

intent is to give wide interpretation to public purpose.

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4.! Int"r#r"t$ton o% Artc&" '(( A

;rticle 31 of the Indian onstitution deals with the eminent domain  power 

and clauses 1! and #! of the article 31 lay down three limitations sub)ected to which

state may exercise its eminent power. ;rticle 31 guarantees that a person cannot  be

deprived of his property by an executive order property right can be deprived onl

y through legislation!. &econdly" such deprivation can only be for public purpose and

thirdly" compensation for deprived property must be e(uivalent to the market value

the of the property ac(uired.

The word compensation used in the;rticle 31#! created a lot of problem% it

has been discussed in the previous chapter.'ven though government has sovereign

 power to ac(uire land" the word compensation used in the ;rticle31 created lot of 

obstruction to the government. *hen Fovernment sought to ac(uire land for  public

 purpose" immediately land owner were initiating and filing a writ petition either 

 before the &upreme ourt under ;rticle 3# or before 9igh ourt under article ##6" it

was great hurdle for the government. 9ence"to overcome the hurdles" there were

series of amendments brought to the onstitution and finally in 17,A by forty8fourth

amendment ;rticles 171!f! and 31 were repealed and ;rticle 3--8; was inserted.

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than provided under the :and ;c(uisition ;ct 1+7A7. ;ccording to the 5ombay 9igh

ourt" ade(uate compensation was an essential ingredient of 2:aw in article 3--;

and the law relating to the ac(uisition of property must satisfy ;rticle #1 of Indian

onstitution. The decision of the 9igh ourt was reversed by the &upreme ourt and

also been held that the states power of eminent domain or to ac(uire property is

sub)ect to common law re(uirement Goctrine eminent domain! of 2public  purpose

and 2ade(uate compensation but not sub)ect to the right to livelihood under ;rticle

#1. 9ence" state may ac(uire property notwithstanding the impact of ac(uisition on

the owners livelihood.1-

In +ilub$aiNanb$ai$ac$ar v. State of +ujarat "11

&upreme ourt has however 

held that because of controversial aspects of ;rticle 31" itwas deleted from the

onstitution and it should not be brought back by )udicial interpretation. The court

admitted the exercise of power of eminent domain recognized under ;rticle 3--;

re(uires existence of public purpose and payment of money for the property ac(uired"

amount need not be )ust e(uivalent to the property ac(uired but at the same time it

must not be illusory if" in any case law fails to satisfy the re(uirements of 2public

 purpose and 2ade(uate payment it may held to be invalid under ;rticle 3--;. In this

regard legislative decision shall be final" however" re(uisition and ac(uisition of 

 property may still be challenged on the ground whether a piece of property ac(uired

for public purpose or whether compensation paid is ade(uate or not.1#

4.' P)&o*o#)+ o% Pu,&c Pur#o*"

&ince independence land has been ac(uired from people" particularly from

farmers" for the purpose of expanding townscities by converting agricultural land

into non agricultural land. This has been going on and still goes on at a slow pace. In

the name of industrialization" larger portion of land has being ac(uired from  people

for 2public purpose and 2development and was later handed over to  private

companies.13

urrently" if the state ac(uires land on the ground of 2public interest in

a function of its eminent domain power" aggrieved parties have little )udicialrecourse.

7 -asantibai v. State of )a$aras$tra" ;I< 17+A 5om.366.

1-Supra note #" at 7-+87-7.

11177 &upp1! & 76% ;I< 177 & 1A#.

1#Supra note #" at 71-.

13Javier Ceyara)" 2 (n S/ wit$ a %ifference " + &ocial ;ction #,- Culy8&ept #--+!.

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1Supra note 13" at #,6.

14

Indeed" several such challenges have already been dismissed by the ourts" including

ac(uisitions for sewage treatment plant"13 ;

 planned development for housing

scheme13 5

and for a co8operative society.13

'normous power available to the government under the doctrine eminent

Gomain :and ;c(uisition ;ct! state has led to many blatant abuses. $or example"

the *est 5engal Fovernment ac(uired fertile agricultural lands in *est edinapur 

for Tata ataliks in 177#" dispossessing small and marginal farmers" in preference to

undulating waste land" that available nearly. :ikewise in the case of the 6entur 

y Textiles" the &tate Fovernment ac(uired about # acres of land for a 4ig Iron

4lant in 1776. 9owever" company later decided that 4ig Iron production was no

longer profitable and refused to pay the compensation.&ingur in *est 5engal is

another recent example wherein government sought to ac(uire prime agricultural

land for private capitalist parties" i.e." for Tata otors. &tate governments have not

hesitated to take over the land even by employing draconian emergency powers

available under 

this ;ct.1A

The main philosophy behind the ;ct :and ;c(uisition ;ct 1+7A! is

eminent domain poweror sovereign power of the state. The state may directly own

lands through ac(uisition" purchase etc. or by default. That means all lands which are

not privately owned by the individuals are owned by the state but in respect of 

 privately owned lands the state has eminent domain power.

Hrigin of land ac(uisition goes back to 1+#A wherein the 5ritish colonial

government codified this undisguised forcible seizure of law. The 5engal regulation 1

of 1+#A" based on the principle of 2eminent domain" which empower the state to take

any private property for public use. This was extended to cover land ac(uisition for 

the railways in 1+- by the 5ritish regime. This draconian law unfortunately never 

defined the meaning of 2public purpose and it was enough for the state to declare it

so. ;fter the onstitution came into force ;rticle 3,# of the onstitution allows all

colonial laws continue to force unless repealed otherwise.1

There was anenormous

increase in infrastructure building and industrial activities by the state during the

 period immediately after independence as compared to the colonial period.  0umber 

13 ;;I< 1776 & 67,.

13 51776!, & A-.

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1Supra note 1A" at #,6.

14

13 ;I< 177, & -3.

1A

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1+Supra note 1A" at #66.

14

of dams" power plants" mines" steel and heavy engineering plants came up for which

land is ac(uired by using the 1+7A law.16

*ith the enactment of the &pecial 'conomic ?one ;ct" #-- the  political

 parties irrespective of their colour or ideology" industrialists" irrespective of their size

and global agents of privatization and liberalization have come together to ac(uire

land and use all their power and money to take the process of globalization to the next

level and alienate the people from their own natural resources. 5ut it has never  been

that easy for the state to ac(uire land. The country has witnessed the worst kind of 

 battles between people and state for last few years. The gory pictures of 0andi gram

 battle for months show clearly the division that exists between the state and the

 people. *hile there was an outright re)ection of cut idea of &'?.1,

4ublic sector and government pro)ects were not only purposes for which land

was forcibly ac(uired by the state even in the fifties and sixties" land had  been

ac(uired for private industry through state governments. 9owever" a landmark 

 )udgments in  " L (urora v. State of Uttar !rades$23 (

case wherein &upreme 6ourt

held that the government could not )ustify ac(uiring land for a textile machiner 

y manufacturer as a 2public purpose. It further declared that 2:and ;c(uisition ;ct

did not contemplate that the government should be made a general agent for 

companies to ac(uire lands for them for their private profit>. ;fter this case

government brought an amendment to the :and ;c(uisition ;ct in 176# i.e." :and;c(uisition ;mendment! ;ct" 176# it allowedto ac(uire land for a ompany

which is engaged in or taking steps for engaging in any industry or work for a public

 purpose.

$urther this amendment was applied with retrospective effectearlier to

&upreme ourt )udgment in this case!. Thus the state succeeded in preserving its

authority to ac(uiring land for private industry.1+

oncept of public purpose was

further diluted during the time of Indira Fandhis regime by the :and ;c(uisition

;mendment! ;ct 17+A" which included the ac(uisition of land for 2planned

16Supra note 1A" at #6,.

1,Supra note 13" at #,A E #,.

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1+Supra note 1" at #66.

14

1, ;;I< 176A & 1#3-.

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1A#

development and subse(uently sale to private enterprise. 9ence" it came as a  biggest

 blow to the ordinary farmers and land owners.17

&ubse(uently the decision of the &upreme ourt in " L (urora case" a variet y

of pro)ects by private entrepreneurs for divers purposes like houses for members of a

co8operative society" manufacture of alumina bricks" construction of a students home"

an electro chemical factory" a sugar factory" etc. were all held to promote the 2public

 purpose and land ac(uisition by the state for these enterprises upheld. *ith this" the

fatal blow for original possessors of land was completed and once the government set

eyes on someones land intended to ac(uire it" it mattered very little what the  purpose

was. 9owever" the main (uestion of clearly defining 2public purpose was not

addressed.#-

4.4 D"%nton o% Pu,&c Pur#o*"

The concept of 2public purpose is one of the most entrenched issues in the

legal field" what constitutes pubic purpose is an open (uestion sub)ect to

interpretation and use.#1

24ublic purpose is a condition for the exercise of states

 power of compulsory ac(uisition of private property but no definition of the  phrase

2public purpose is given either under repealed ;rticle 31#!"or under ;rticle 3--; or 

under repealed :and ;c(uisition ;ct 1+7A " nor any limitation prescribed. There are

number of cases which have considered the word =public purpose> but none of them

have proposed to lay down the definition or the extent of the expression. ## 5lacks

law dictionary defines the word 2public purpose as synonymous with governmental

 purpose.=; public purpose or public business> has for its ob)ective to promote  public

health" safety" morals" general welfare" security" prosperity and contentment of all the

inhabitants or residents within a given political division.#3

&ection 3f! of :and ;c(uisition ;mendment!" ;ct 17+A" gives an inclusive

definition of the phrase public purpose.#A

4ublic purpose thus includes provision for 

village sites" town planning" planned development of land from public funds and for 

further development of land for a corporation owned and controlled by the state

17Supra note 13" at #,A.

#-Supra note 1A" at #6, E #6+.

#1Supra note 13" at #,:

##Supra note #" at 31#.

#35lacks :aw Gictionary 1#A,,

thed."1777!.

#A4fficial (ssi&nee of -omba# v.5rom of C$andulalC$imanlal " ,61" 6,.

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carrying out certain schemes of government like education" health" housing" slum

clearance any other scheme of development sponsored by government or for locating

any public office.#

:and for companies would not come under the purview of  public

 purpose in section 3f! of the ;ct.#6

; close scrutiny of this clause would reveal that except the provision for land

for corporations owned or controlled by state all the remaining broad classifications

are welfare functions of the state. Dnder section 3f! of the ;ct after the 17+A

;mendment the expression Kpublic purposeK includes L 

i. the provision of village8sites" or the extension" planned development or 

improvement of existing village sites%

ii. the provision of land for town or rural planning%

iii. the provision of land for planned development of land from public funds in

 pursuance of any scheme or policy of the government and subse(uent disposal

thereof in whole or in part in lease" assignment or outright sale worth the

ob)ect of securing further development as planned%

iv. the provision of land for a corporation owned or controlled b y the state%

v. the provision of land for residential purposes to the poor or landless or to

 persons residing in areas affected by natural calamities" or to  persons

displaced or affected by reason of the implementation of any scheme

undertaken by the Fovernment" any local authority or a corporation owned or 

controlled by the &tate%

vi. the provision of land for carrying out any educational" housing" health or slum

clearance scheme sponsored by government" or by any authority established

 by government for carrying out any such scheme" or" with the prior approval

of the appropriate government" by a local authority or a society registered

under the &ocieties

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vii. the provision of land for any other scheme of development sponsored  by

government or" with the prior approval of the appropriate government by a

local authority%

viii. the provision of any premises or building for locating a public office.

Thus" the ;ct did not define the expression 2public purpose" but it gives an

inclusive definition of the word 2public purpose. This has left the (uestion wide open

and sub)ect to interpretation and use. $urther" once the publication of declaration

under section 6 of the ;ctis deemed to be ade(uate proof that the land is needed for 

 public purpose and is final" no civil court can sit as a appellate forum on the (uestion

of 2public purpose" therefore" it could not be challenged in a ivil ourt#,

. 'xecutive

is the final arbiter on the (uestion of public purpose however" it is not the sole  )udge

the ourts have the )urisdiction to determine whether the ac(uisition is or is not for a public purpose. ourt could (uestion the )usticiability of the grounds for arriving the

decision of public purpose by ourts in proceedings under ;rticle ##6 of the

6onstitution.#+

Court* S"&%-#o*"d R"*tr$nt* on R""/ Po/"r

;lthough the power to determine what constitute public purpose is primarily

with the government ultimately ourt has the power to review such

decisions.9owever" in practice theourts have generally placed limitations on

themselves in Sooram!ratap "edd# and ot$ers v. %istrict Collector, "an&a  "edd#

 %ist and ot$ers,'6 (

&upreme ourt articulated the grounds of review as followsB

a. alaise exercise of power 

 b. ; public purpose that is only apparently public purpose but it is in realit 

y private purpose or other collateral  purpose.

c. ;n ac(uisition without following the procedure established under the ;ct

d. *hen the ac(uisition is unreasonable or irrational

e. *hen ac(uisition is not a public purpose at all and the fraud on the state is

apparent.

#,;run @umar 5arthakar" 0Civil Courts Jurisdiction in Land (cquisition , & 33#--1!%See also7 8ra v. Secretar# of State for Indian Council " , *< #A7% I:< 3# al. 6-.

#+State of -omba# v. -.S. Nanji"" ;I< 176 & #7A.

#+ ;#--+! 7 & #.

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This implies that power to determine public purpose is primarily with the

appropriate government. ;ppropriate government" at least in theory retains the power 

to (uestion the determination of )usticiability of 2public purpose.In  practice"

 )usticiability of public purpose is determined by ourts not merely on breach of 

 procedural fairness but also on substantive grounds. Though the &upreme ourt has

 been a remarkable constituent in upholding the primary determination of the

appropriate government. 0onetheless the door remains open for future litigants to

invite the ourts to review the (uestion on the aforementioned grounds.

4.0 Eo&uton o% Pu,&c Pur#o*" n Ind$

The 5engal

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##.

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&t. Feorge. The 5uilding ;ct JJ/III of 1+7 which extended the 1+- ;ct to the

then 5ombay and olaba" enabled the authorities to ac(uire land for construction or 

widening of roads" streets" or drain ways andor other thoroughfare. The ;ct JJII of 

1+63 authorised the Fovernor Feneral8in8ouncil to declare pro)ects dealing with

irrigation" navigation" and improvement of docks and harbours as work of  public

utilities.33

The preamble of the :and ;c(uisition ;ct" 1+,- maintained that the

ac(uisition of land would be for public purposes and for companies.

9owever due to widespread criticism of the 1+,- ;ct" need was felt to modify

the legislation. The main ob)ective behind framing the 1+7A ;ct was that ac(uisition

of land needed for public purpose and for companies and compensation determined

on account of such ac(uisition.3A

;nother interesting aspect was that in the year 173-

where the Coint ommittee on Indian onstitutional

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a provincial legislature shall have power to make any law authorizing the compulsory of ac(uisitions for public purposes of any land" or any commercial or industrial undertaking or interest in or in any company owning any commercial or industrial undertaking.

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5ombay presidencies as they had their statutes as early as in 1+,.3+Those

ac(uisitions were restricted only to what was known as works of public utility. *orks

of public utility means" works of the civil facilities" mostly to the employees and

servants of the 'ast India ompany. In order to suit the local need of community of 

India :and ;c(uisition ;ct" 1+7A came into force. &ection 3f! of the ;ct defined the

word public purpose in a inclusive manner" in various circumstances hence

government abused its eminent domain power. The word =4ublic purpose> is the  base

means! for exercising the eminent domain power or sovereign power. &o it is right

time transitively define the word 2public purpose without leaving any scope for 

abusing the power. To address solutions to all these problems colonial :and

;c(uisition ;ct" 1+7A repealed and replaced by the

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"n"r$& Int"r"*t o% t)" Count+

In  9amabai5ramjee !etit v. Secretar# of StateA-

4rivy council decision that

government had given certain land in 5ombay on lease. Dnder the terms of the lease

the government had the right to resume the possession" sub)ect to  paying

compensation" it is desired to use it for a public purpose. The government gave notice

of their intention to resume possession with the ob)ect of using the land for  providing

residential accommodation to government servants at reasonable rates. 4rivy council

held that the resumption of land was for a public purpose and therefore valid. C.

5achelor approved the following observation in this )udgment. The 4hase 2public

 purpose means general interest of the community as opposed to the particular interest

of individuals is directly and vitally concerned.In Somavat$i v. State of  !unjab,A-

;&upreme ourt saidB=5roadly speaking" the expression 2public purpose would

however include a purpose in which the general interest of the community as opposed

to the particular interest of the individuals" is directly and vitally concerned>.

In ams$war Sin&$ v. State of -i$ar,A- 5

aha)an " C. observed that the phrase

2public purpose has to be construed according to the spirit of the times in which the

 particular legislation is enacted. 24ublic 4urpose is bound to vary with the times

and the prevailing conditions in a given locality. That the meaning is elastic and a

change with time is nowhere better illustrated than in the interpretation of the phrase

2pubic

use in ;merica.A1 The power of &tate to ac(uire private property for public  purpose

is referred in ;merica as eminent domain. The re(uirements of eminent domain are

1! authority of law ii! public use and iii! )ust compensation in lieu thereof.

;ccording to the earlier view any purpose relating to functions of government

would be a public use provided public have the direct benefit from the  property

ac(uired thereof. ;ccording to the newer view point there is a public use if the thing

taken is useful to the public. In case of ac(uisition of land for manufacture of salt has

 been held to be an ac(uisition for a public purpose.A#

The ac(uisition of land

A-171A! :.

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A# )unicipal Corporation v. Sind, ;I< 17A, &ind 67.

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forhousing of a minister is a public purpose as he cannot give his best to the state.A3

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it off to another set of individuals after development. The ourt refused the

contention of the petitioners. &ikri" C." speaking for the ma)ority" saidB

;!ublic purpose varies wit$ t$e time and t$e prevailin& conditions in

localities< and in some towns like 5ombay the conditions are such that it is

imperative for the state should do all it can to increase the availability of residential

and industrial sites. The main idea in issuing the impugned notification for 

ac(uisitions of land was not to think of the private comfort or advantage of the

members of the public but the general public good. In other view" the welfare of large

 proposition of persons living in 5ombay is a matter of public concern and the

notifications served to enhance the welfare of this section of the community is  public

 purpose.A

In =en*atamma v. Cit# Improvement of :rust -oard, )#sore,

an

improvement scheme was drawn on the basis of several merchants to deposit the costs

of ac(uisition for shopping sites. It was held that even if the scheme was that the

shopping sites would be let out to provide individuals who would erect shops thereon"

it cannot be contended that the land for shopping sites was not being ac(uired for a

 public purpose. ;ny purpose" which directly benefits the public or a section of the

 people is a public purpose" moreover" development dealing with the improvement of 

cities in this country. &o long as the ob)ect is development and the land is made fit for 

the purpose for which it is ac(uired there is no reason why the state should not  be

 permitted to see that further development of the land takes place in the directions for 

which the land is ac(uired even though it may be through private agencies. The

 )udicial trend discernible from these cases has been that even a purpose which

 benefits individuals does not lose the character of public purpose" if such individuals

are benefited not as individuals but in furtherance of some scheme or plan aiming at

welfare or utility.6

&ince the existence of 2public purpose was essential condition for ac(uiring

or re(uisitioning property under eminent domain power" a law enacted for the

 purpose" but having no 2public purpose to support it" was constitutional" whether a

ASupra note #" at 31#.

17,3!1 & 1++% ;I< 17,# & #6+3.

6Supra note #" at 31.

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 public purpose existed or not was a )usticiable matter.,

;s stated by the &upreme

ourt in State of -omba# v. Nanji,+

 prime facie the Fovernment is the best )udge as

to whether 2public purpose is served by issuing a re(uisition order" but it is not the

sole )udge. The ourts have )urisdiction and it is their duty to determine the matter 

whenever (uestion is raised whether a re(uisition order is or not for a 2public

 purpose. The ourts" however" adopted a very liberal attitude on the (uestion of 

 public purpose" and it was rare indeed for a ourt to hold that an ac(uisition of land

was not for public purpose.

4.5 6u*tc$,&t+ o% Pu,&c Pur#o*"

The right of the government to ac(uire land for public purpose under the

 power of eminent domain is undisputed. The government is said to have sole and

absolute 8discretion with respect to the (uestion of )usticiability of the public  purpose.In  8ra v. Secretar# of State for India>in>Council "

7the 4rivy ouncil held that it is

only the government which would be the sole )udge as to the (uestion of  public

 purpose. The necessary (ualification in this respect is that existence of a  paramount

reason and such reason must be shown before ac(uisition. The general interest of the

community is said to be the touchstone of public purpose. ;ccording to the 4rivac

y ouncil" public purpose means" the interest of the community as a whole or part

as

opposed to particular interest of the individual who is directly and vitally concerned.6-

In "am umar v. State of ?est -en&al "61

the &upreme ourt held that public  purpose

in section 3 f! would include a purpose in which the general welfare of the

community as opposed to the particular interest of the individuals is directly and

vitally involved. In "atilalS$an*arabai v. State of +ujarat "6#

the &upreme ourt held

that" as per section 63! of the :and ;c(uisition ;ct" 1+7A" the declaration under 

section 6 by the appropriate government shall be the conclusive proof as to the

 purpose of the proposed ac(uisition of any land. In the absence of the restrictive

definition" the government is re(uired to be satisfied in its best )udgment about the

 purpose of ac(uisition.

,Supra note 3#" at 1A71.

+;I< 176 & #7A% 176 &< 1+.

717-!#3 1; 734!% 1 :C ##,% 7*0 AA4!.

6- 9emabai5ram8i v. Secretar# of State" ;I< 171A 4 #-.

61;I< 1763 al. 3A% 6, ;:. *.0. 3+,% See alsoSomawanti v. State of !unjab" 1763! # &< ,,A.

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6#;I< 17,- & 7+A.

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In State of -omba# v. ".S. Nanji"63

the &upreme ourt held that" though the

government is generally considered to be the sole )udge of )usticiability of  public

 purpose" )urisdiction still vest with the ourts and under ;rticle ##6 of the

onstitution ourts is duly determined whether or not there exists any public  purpose

in an ac(uisition.6A

The circumstances in which the ourts can interfere is disputed

even though statute gives the power to the executive to declare and determine the

 purpose of the ac(uisition" the )urisdiction of ourts are not barred.6

5ut this has not

 been applied uniformly. In certain cases it has been held that the ourt has to accept

the legislative decisions as 2public purpose.66

The (uestion whether there can be a

compulsory ac(uisition for private purpose will have to be answered in the negative.

If the public benefit resulting from an action of a person or of a company is not direct

 but is incidental to personal gain of an individual or of a company" then it is not

considered as public purpose.6,

Custiciability as to the purpose of ac(uisition may be challenged before the

ourts" if prima8facie evidence is available on the grounds6+

inter alia" thatB

1. ;c(uisition is mala8fide" since the purpose as disclosed in the section A of 

:and ;c(uisition ;ct" 1+7A notification is not really a public purpose.

#. The power exercised by the Fovernment in ac(uisition of a land is colourable

in nature.

3. The intended ac(uisition is to benefit a particular individual" firm or a

company.

A. The notification is vague and does not either disclose the purpose or is not

clear about the purpose of ac(uisition

. 4rovisions of part /II are not complied with as per the ;ct.

6. The activities of the agency on whose behalf the ac(uisition is sought are not

really related to public purpose.

63;I< 176 & #7A% See also ).!. uttapparup v. Sub>collector " C$en&annur,;I< 176# @er ##%

 amalamma v. State,;I< 176- @er 3#1.6A Jilub$aiNanb$ai$ac$ar v. State of +ujarat " 177 &upp 1! & 76% ;I< 177 & 1A#.

6 )o$ammed Noo$u v. State of :ravancore and ot$ers" ;I< 17# T ##% See also ?.-. S.. Co>op

Cr. Societ# v. )rs. -ella -anerjee, ;I< 17# al. A.66

;I< 177 4un) AA" A7% &ee also ;I< 176 ;ll 3AA It was held that where the land to be ac(uiredis necessary for public purpose" the government is the sole )udge. It is not for the court to submitits view on basis of the availability of land!% 17,+ 1! ad. :.C. ##3 The government need only toacton its sub)ective satisfaction!.

6,=eera"a&$avac$ariar v. Secretar# of State" +6 Indas A+.

6+Supra note 3#" at 31#.

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,. Gelegates excessive and improper powers on collector.

+. Geprives the petitioner means of livelihood.

any of the above mentioned grounds are based on the  procedural

irregularities and only few grounds like deprivation of livelihood or the stated

 purpose not being public purpose are substantial in nature. In respect of the

deprivation of livelihood of the petitioner" the cases decided by the )udiciary more

often rely on compensation" citing the developmental concerns. Hn the ground that

the stated purpose not being a public purpose" in case of ac(uisition for companies"

the ourts have expressed different opinions and at times in conflict with one another.

In this regard" the )udicial interpretation of the &upreme ourt in  Jandu Lai v.

Union of India,67

may throw some light. In this case proviso to the sub8section 1! of 

section 6 of the :and ;c(uisition ;ct" 1+7A has been interpreted in regard to

ac(uisition of land for companies. The ourt held that if part of the compensation or 

cost of ac(uisition comes from public revenue" ac(uisition of land for company is

under public purpose as per the said proviso. It is submitted that this provision" which

was originally leant for a specific situation" was extended wrongly to serve  private

interests. It is further submitted that the plain reading of the section would make it

clear that such an interpretation would run counter to the intention of the legislators.

oreover" the (uestion part of compensation or cost of ac(uisition coming from

 public revenue is totally relevant in the light of the facts of the  Jandu Lai case.,-

$rom the public revenue usage perspective,1

it must be a limitation to identify the

ambit of public purpose but unfortunately it is being used to make every other 

 purpose as public purpose. The legislators seemingly have placed a trust on the

executive that it will respect and respond to the rights of the underprivileged too. The

following legal provisions give enough scope for the executive to act  )udiciously.

&ection 37 of :and ;c(uisition ;ct" 1+7A re(uires previous consent of the

government for an agreement to be executed between the government and the

company. &ection A- of the ;ct elaborates previous consent while" agreement in

(uestion is being dealt with in the section A1. ;s per section A1" firstly" the

appropriate government must satisfy itself regarding the purpose for which the

67;I< 1761 & 3A3.

,- Ibid.

,1:.Thaddeu" 2 ( Necessar# %ifference between !ublic !urpose and !ublic Use in conomic %evelopment " 6

&yracuse :.

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,,#--3! 1- & 6#6.

1A

ac(uisition is made" and secondly" the company has to enter into an agreement for the

matters including"

1. the payment to the appropriate government of the cost of the

ac(uisition

#. the transfer" on such payment" of the land to the company and

3. the terms on which the land shall be held by the company.

;ccording to section A# of the ;ct" the agreement so entered must  be

 published as soon as possible after its execution. In case of ac(uisition for companies"

it is necessary to follow the special procedure enunciated in part /II as explained

above. 9owever" the provisions of this part were never followed in letter and sprit

thus necessitating )udicial interventions. In the first  ". L. (rora@s case,#

" sections A-

and A1 came before the &upreme ourt for interpretation. The ourt held that the

work must be useful or likely to prove useful to the public directly and an agreement

 between the appropriate government and the company is must for a valid ac(uisition

under part /II of the ;ct.,3

Dnder section A- 1! b! two conditions must be fulfilled.

The work must be useful for public. &econdly" the terms! on which the public is

entitled to use it as a right also has to clearly find a place in the said agreement.

In the absence of fulfilment of these two conditions" the ac(uisition is not

legally valid.,A

In Somavanti v. State of !unjab,,

the ourt concluded that the

construction of factory for manufacturing the refrigerator machine parts to be a public purpose on the ground that a part of compensation has come from public revenue.

,6In

 !ratib$aNema and ot$ers v. State of )ad$#a !rades$ and ot$ers,,,

the &upreme

ourt held that the establishment of Giamond 4ark as public purpose" since part of the

compensation is paid from the public revenue and the contention of mala8fide

intention on the part of government was re)ected by the 6ourt.

&ince part /II provisions are not followed in their true spirit" the accusation of 

mala8fides intention of government becomes relevant. $or example" it was observed

,# ".L. (rora and ot$ers v. State of Uttar !rades$ and ot$ers" ;I< 176# & ,6A.

,3;I< 176 & 77" 1--#.

,AI:

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+1#--3! A & ,37.

1

in Somavanti v. State of !unjab,+

" that the mala8fide intention on the part of the

government is an important test on which the purpose of ac(uisition has to be tested

for its validity. This is one amongst the very few exceptions to the general rule that

the declaration by the government as to the ac(uisition of land for public purpose is

conclusive and final.

$urther" in State of (nd$ra !rades$ and ot$ers v. +ovard$anlal!itti,7

" the

(uestion of malice in law and malice in fact was differentiated by the &upreme 6ourt.

The ourt explained the concept of legal mala8fide" by referring words and  phrases

legally defined.+-

The ourt stated thusB

;:$e le&al meanin& of malice is ill>will or spite towards a part# and an#

indirect or improper motive in ta*in& an action. :$is is sometimes described as

malice in fact. Le&al malice or malice in law means 0somet$in& done wit$out 

lawful excuse. In ot$er words, it is an act done wron&full# and wilfull# wit$out 

reasonable or probable cause, and not necessaril# an act done from ill  feelin& 

and spite. It is a deliberate act in disre&ard of t$e ri&$ts of ot$ers

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+71 D& 36,.

16

how this term over a period of time has been interpreted in broad sense which now

encompasses within its ambit even the ac(uisition for economic development. The

$ifth ;mendment to the D& onstitution employs the term =public  purpose>

moreover it is well established (uestion as to what is public purpose in a  )udicial

one.+#

Throughout the terms history" this term has been sub)ected to varied

interpretations by ourt. &ometimes the ourts have interpreted the term  broadly

thereby interpreting ac(uisition for economic development to be in public  purpose.

;nd sometimes the ourts have accorded narrow interpretation and thereby

disallowed ac(uisition which brings forth mere economic development.

The earlier interpretation of the clause 2public purpose was very restrictive.

In Calder v. -ull "+3

the &upreme ourt held that =a law that takes property from ;

and gives it to 5 is against all reasons of )ustice.> In ?ili*inson v. Leland +A

" Custice

&tory said thatB

;we *now of no cases in w$ic$ le&islative act to transfer of t$e

 propert# from ( to - wit$out $is consent $as been $eld a constitutional 

exercise of le&islative power in an# state or in Union<

In o$l et al v. United States+

the ourt observed that" the proper view of the

right of eminent domain seems to be" that it is a right belonging to a sovereignty to

take private property for its own public uses" and not for those of another. 5eyond

that" there exists no necessity% which alone is the foundation of the right. Thus"  o$ls

decision allowed condemnation of land but the ourt had interpreted the term 2public

use in narrow and limited sense. oreover" the purpose for which the property was

to be ac(uired should have close nexus with the ob)ect which is sought to be served.

9owever later on the ourts approach towards interpreting 2public purpose  became

liberal and ourts started giving greater deference to the legislative decisions and

reduced the scrutiny which the ourts traditionally used to conduct to in(uire  public

 purpose in the act of the legislature.

+#Cincinativ. =aster,#+1 D& A37" AA6. The court observed" it is well established that" in considering theapplication of the $ourteenth ;mendment to cases of expropriation of private property" the (uestion what is a

 public use is a )udicial one. In deciding such a (uestion" the ourt has appropriate regard to the diversity of local conditions" and considers with great respect legislative declarations" and" in particular" the )udgments of state courts as to the uses considered to be public in the light of local exigencies. 5ut the (uestion remains a )udicial one which this ourt must decide i n performing its duty of enforcing the provisions of the federalonstitution.

+33 D& 3+6.

+A#, D& 6#,.

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+7A D& A67.

1,

The case of  -erman v. !ar*er,+6

signalled a decline in the significance of the

 public use doctrine. In this case the onstitutionality of the 2Gistrict of olumbia

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&upreme ourt of onnecticut found that the use of eminent domain for economic

development did not violate the public use clauses of the state and federal

constitutions. The onnecticut ourt found that if an economic pro)ect creates new

 )obs" increases tax and other city revenues" and revitalizes a depressed even if not

 blighted! urban area" it does (ualify as a public use. The ourt also found that

government delegation of eminent domain power to a private entity was

constitutional.

This case became the focus of vigorous discussion and attracted numerous

supporters on both sides. Hn #3 Cune #--" the &upreme ourt" in a 8A decision ruled

in favour of the ity of 0ew :ondon" allowing the ac(uisition for the private entity.

*hile the decision was controversial" it was not the first time 2public use had  been

interpreted by the &upreme ourt as 2public purpose. Gissenting )udges7-

feared that

after this ruling" ac(uisitions which take away resources from the poor and give it to

the rich would become a norm rather than an exception.'very home" every church

and every small business is now up for grabs to the highest bidder. Today the mere

 possibility that private property might mooches more money when put to another use

is reason enough for the government to take it away. The well pass lobbyists of 

developers and municipalities will chain that the decision doesnt affect

Texas.&ubse(uent to the ourt decision in the  elo case" there was wide spread out

rage across the D&; and multitude of states introduced laws destructing the use of 

eminent domain.

Texas was the first state to pass legislation in response to the D& &upreme

ourtdecision in  elos case. Texas should ban the taking of private property that

conveys ownership or control of the property from one private person to another 

except in very limited circumstances. &econdly" a condemner should have to prove  b

y clear and convincing evidence that the contemplated use of taken property is

truly public and necessary. $inally" property that is not used for the purpose for 

which it was condemned should be offered back to the original owner at the price atwhich it was taken.

Texas legislation & 5 ,! included several key provisions including the followingB

7- elo v. Cit# of New London" Custice &andra Gay HOonnor wrote the principal dissent" )oined by hief Custice

*illiam

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• 4rohibited the use of eminent domain when the taking confers a  private

 benefit on a particular private party through the use of the property.

• 4rohibited the use of eminent of domain when it is for economic development

 purposes.

&ince the  elos decision 3- other states have also passed similar type of 

legislation relating to eminent domain reform. Thus" the traditional interpretation of 

the term 2public purpose has been very narrow but in the @elocase decision" the

ourt signalled broader interpretation to public purpose. The verdict in the @elo

case71

only fortified the later assumptions of the &upreme 6ourt.7#

4.9 D"%nton o% Pu,&c Pur#o*" n Po*t-nd"#"nd"nc" P"rod

&ince independence" the :and ;c(uisition ;ct" 1+7A continued to be in force

 by virtue of ;rticle 3,# of the onstitution73

with necessary modifications according

to the provisions of the onstitution. The original ;rticle 31#! of the 6onstitution

was clear in that context it stipulated that when and how private property could  be

ac(uired.7A

Though ;rticle 31 of the onstitution of India has been repealed"7

the

 public purpose limitation has been read in by the &upreme ourt as part of the right to

 property under ;rticle 3--;.76

;round this period" at least in three instances" the

state enactments have introduced new meaning to the term public purpose. In 17A7"

entral 4rovinces and 5erar was the first province to substitute a new clause for  public purpose" namelyB8

&ection 3f! the expression public purpose includes the provision of land for 

agriculture or for residential" business or industrial purpose or for any  purpose

71#--3! A & ,37.

7#&ubse(uent to the ourt decision on the @elocase" there was widespread outrage across the D&; anda multitude of states introduced laws restricting the use of eminent domain.

73;rticle 3,#B ontinuance in force of existing laws and their adaptation.1! 0otwithstanding the repeal by this onstitution of the enactments referred to in ;rticle 37 butsub)ect to the other provisions of this onstitution" all the laws in force in the territory of Indiaimmediately before the commencement of this onstitution shall continue in force therein until

altered or repealed or amended by a competent authority.7A

;rticle 31#! provided that no property shall be compulsorily ac(uired or re(uisitioned save for a public purpose and save by authority of law which provides for compensation for the property soac(uired or re(uisitioned and either fixes the amount of the compensation or specifies the

 principles on which the manner in which the compensation is to be determined and given% andno such law shall be called in (uestion in any ourt on the ground that the compensation provided

 by the law isnot ade(uate.

7Supra note 3+" at 66A.

76Supr a note 3#" at A+7 E A7.

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incidental to any of these with a view to resettlement and rehabilitation of 

displacement of persons.7,

In 173" the state of 5ombay added a new sub8clause after renumbering

the original clause f! of section 3 as sub8clause 1!. It read thusB =the ac(uisition of 

land for purposes of development of areas from public revenues or some fund

controlled or managed by a local authority and subse(uent disposal thereof in whole

or in part of lease" assignment or sale" with the ob)ect of securing further 

development>.7+

Dttar 4radesh )oined this foray by the introduction of section #f! and

&chedule% 4aragraph 1 of the Dttar 4radesh ;ct JJII of 17A" readB

The expression public purposeO includes provision for or in connection with8

a. sanitary improvements of any kind" including reclamation%

 b. the layout of village sites" townships or the extension" planned development or 

improvement of existing village sites or townships%

c. the settlements of land for agriculture with the other sections of the people.77

5ihar substituted the public purpose clause with a new clause in 177. It was

identical to the first two sub8clauses of the above mentioned D.4. definition.1--

4.9.1 D"%nton o% Pu,&c Pur#o*" und"r L$nd Ac8u*ton A"nd"nt; Act<

1974

In the pre independence period government limited itself to government

functions" town planning and infrastructure. In the post8independence period since the

government entered many areas including commercial activities such as trade and

manufacturing etc" therefore the scope of compulsory ac(uisitions increased greatly.

$urthermore the greater pace of growth and the deep diversification of the econom

y that took place under planning greatly increased compulsory ac(uisition.

Dnlike in other countries" practice of compulsory takings in India the fair 

value is typically decided by the taker government! this is like" I cut the cake and

7,&ec. 3 read with para 1 to the schedule of the entral provinces and 5erar ;ct JJ or 17A7.

7+&ec.##! of the 5ombay ;ct JJJ/ of 173.

77&ec. # with para 1 of the &chedule of the Dttar 4radesh ;ct JJII of 17A.

1--&ec. #ii! of the 5ihar ;ct JJJI/ of 177. It reads thusB f! the expression public purpose includes

 provision for or in connection with L i! sanitary improvements of any kind" including reclamation.

ii!the laying out of village sites" ownerships or the extension planned development or improvement of existing village sites or townships.

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chock the piece too" which is clearly unfair to the person whose land is being taken.

In many countriesthe valuations of ac(uired land determined by independent licensed

valuators and in some other countries the valuation can be determined by both  parties

as a result of convergence. The 2public purpose in compulsory takings in India today

is in effect any purpose the government of the day choose to use the land. &ince the

act of ac(uisition cannot be normally challenged only the compensation can  be

debate! there is no recourse from the government today choosing to interpret  public

 purposes in an all8encompassing manner that including every possible 2economic and

non8economic activity.

The &tatement of Hb)ects and

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 bank upon the government to ac(uire land for them irrespective of the purpose for 

which they re(uire the land.

&ome innovative measures have been put forwarded by the government too.

has not been defined. 9ence" necessity of 

defining the word =public purpose>" to restrict the scope of ac(uisition of land.

4rovision of the bill provides for ac(uisition of land for strategic purposes vital to the

state" and for infrastructure pro)ects where the benefits accrue to the general public is

essential.

It also states the ac(uisition of land for companies not to be done by using the

 provisions of the :and ;c(uisition ;ct" 1+7A. It reasons that the land for companies

could be arranged by the companies themselves on a willing seller and a willing

 buyer basis. It proposes to omit the provisions for the ac(uisition of land for 

companies under the ;ct but not to omit the ac(uisition" as the Hb)ects and

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/II of the :and ;c(uisition ;ct" 1+7A1-1

while at the same time the government

reserves its right to ac(uire certain lands for public  purpose.

The relevant portion" &ub8clause v! of clause of the 5ill readsB

f! the expression public purpose includes"P 

a. the provision of land for strategic purposes relating to naval" military and air 

force works or any other work vital to the &tate%

 b. the provision of land for infrastructure pro)ects of the appropriate

Fovernment" where the benefits accrue to the general public% and

c. the provision of land for any other purpose useful to the general public" for 

which land has been purchased by a person under lawful contract to the extent

of seventy per cent but the remaining thirty per cent of the total area of land

re(uired for the pro)ect is yet to be re(uired.

In the proposed new definition" =public purpose> would now include strategic

 purposes vital to the state" or infrastructure pro)ects where benefits accrue to the

general public.

'xplanationB The word person shall include any company or association or 

 body of individuals" whether incorporated or not.1-#

;ccording to the explanation the

word person includes any company or association or body of individuals" whether 

incorporated or not. This would include a family business" a partnership" a  private

company" a public company or a government company. In case of public compan

y  both listed and non8listed companies would come within the purview of this

section. &o the phrase 2any other purpose together with the explanation of person

means that

a government can go for ac(uisition for almost any and every purpose.1-3

In India

scope of the power of ac(uisition is widened to all possible extent.The glaring

omission in the 5ill is the failure on the part of the legislature to make public  purpose

a )usticiable issue. This assumes significance in the light of the fact that  post8

independence ;c(uisition ;cts of some states has already done so.

1-A

$inally" the proposed amendments do not re(uire the government for its infrastructure  pro)ect

first try and ac(uire land using market negotiation route" before invoking eminent

domain power under :and ;c(uisition legislation this may not be )ustifiable when the

1-1See lause #1 of the Graft :and ;c(uisition ;mendment! 5ill #--,.

1-#Seelause v! of the Graft :and ;c(uisition ;mendment! 5ill"#--+.

1-3@.. Cain" 2 Land (cquisition A(mendmentB -ill '3 " #&#-11!.

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1-A@arnataka Industrial ;rea Gevelopment ;ct.

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 pro)ect in (uestion is in competition with private pro)ects. The proposed changes to

 public purpose in the :and ;c(uisition ;mendment 5ill #--, is a step in the right

direction although" some more thinking is necessary to make the proposed reforms

easier to implement.

;nalysis1-of the proposed reforms relating to public purpose shows that in

addition to restricting the scope of public purpose" the most distinctive feature of the

 proposed amendment is that only after ,- per cent. or more of the re(uired land is

ac(uired through market negotiation then only company be eligible to accessthe state

eminent domain power. The point to note that the proposed amendment re(uired that

market route is exhausted by companies is a legally prescribed way before make use

of eminent domain power. This is clearly a reflection of the new government

thinking that market rout failure due to hold out hold out problem arise which some

 persons are refuse to sell their land" without which a pro)ect cannot be materialized in

such cases market solutions are not possible and coercive powers of the government

 become necessary! then it should call for the use of eminent domain. ,- per cent. of 

the re(uired land for private company obtained through the market route rule would

create not only incentive for companies to reduce their demand for land" but also help

in better discovery of market price of land. The ,-B3- rule was significant

improvement over the system recognised under the colonial :and ac(uisition ;ct"

1+7A. The attempt by the government to pass the :and ;c(uisition ;mendment! 5ill

#--, aimed at introducing reforms in this area one seeking to amend the :;; is

failed in $ebruary #--7.

4.1( D"%nton o% Pu,&c Pur#o*" und"r t)" Pr"*"nt Act

'ven after the onstitution came into force the :and ;c(uisition ;ct"1+7A

continued to be in force till Gecember 31st

#-13" now it is repealed and replaced  b

y the

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1- 0irmalohnty" 2 minent %omain !owers "ationale, (buse and ?a# 5orwardunpublished manuscript filed with on author!

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 propert# save b# aut$orit# law

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to be taken and the focus must be on ensuring maximum benefit to the largest number 

of people. ;ny attempt by the state to ac(uire land by promoting a public purpose to

 benefit a particular interest at the cost of the interest of a large section of  people

especially of the common people defeats the very concept of public purpose. 6oncept

of public purpose introduced by the pro8constitutional legislation" its application must

 be consistent with the constitutional ethics. Custice &ingh also remarked that =in

recent years" the country has witnessed new phenomena. :arge tracts of land have

 been ac(uired in rural parts of the country in the name of development and transferred

to private entrepreneurs" who have utilized the same for construction of multi storied

complexes" commercial centres and for setting up industrial units. In the light of such

 phenomena" Custice &inghvi seems to be entering a new thicket of )udicial executive

relations B In still more recent case" in )DS. "o#al 4rc$id 9otels Ltd 1(nr v +.

 Ja#arama "edd# 14rs1-+

" Custice &inghvi and Custice ukhopadhyayacategorically

affirmed that no state having ac(uired land for public purpose in this case for golf 

cum hotel resort! could subse(uently transfer the land to private entities for  private

use% that this amounted to 2diversification of public purpose% and that public  purpose

cannot be over stretched to legitimize a patently illegal and fraudulent exercise

undertaken.

Goes the

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1-+;I< #-11 & 1++

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The

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 (uroras case1-7

itself" the &upreme ourt held that 2state is empowered to

compulsorily ac(uire land for companies which specify the definition of  being

engaged in an industry which is essential to the life of a community whether or not

the purpose for which the company ac(uires land is a public purpose. The as the expression was not

strictly construed and it is an inclusive definition therefore" from time to time the

ourts have held different purposes to be public purpose. It is not possible to give an

exact and all8embracing definition of public purpose. The law of :and ;c(uisition

 )eopardises the private interest for public purpose. 9ence" it denies an individual

right to property. It overrides the right of a person to own a property" so the law in

general

should be strictly construed. The strict construction of the law of :and ;c(uisition

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1-7 ".L. (rora and ot$ers v. State of Uttar !rades$ and 4t$ers, ;I< 176# & ,6A.

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has been emphasised by the ourt for the last 6A years as it did not hold the  person

whose property has been taken. The owner of the property has no bargaining  power 

with the state in such circumstances nor does he has say in compensation% so it is

inevitable in the interest of e(uity that the law should be strictly improve to  provides

for various checks and balances. ompulsory ac(uisition will be effective only a

humane" participative" informed and transparent process followed. 9ence" ;c(uisition

;ct" 1+7A is an inroad into citizens right to property. Hn this matter the established

law is that if for the purpose for which land is ac(uired" it is apparent on the face of 

ac(uisition" it is not a for a public purpose and there can be no two arguments to

construe it otherwise" means the act of the government is ultra vires. 9ence"  public

 purpose is )ustifiable" ourts can be look into the matter. The