http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 21

PETITIONER:

WEST BENGAL HOUSING BOARD ETC.

Vs.

RESPONDENT:

BRIJENDRA PRASAD GUPTA & ORS. ETC.

DATE OF JUDGMENT: 09/07/1997

BENCH:

K. RAMASWAMY, D.P. WADHWA

ACT:

HEADNOTE:

JUDGMENT:

J U D G M E N T

D. P. Wadhwa, J.

Special leave granted.

These appeals are directed against the judgment dated

27th 29 March, 1996 of the Division Bench of the Calcutta

High Court setting aside the requisition and subsequent

acquisition of the certain piece of land under the

provisions of the West Bengal Land (Requisition and

Acquisition) Act, 1948 (PDS short `the Act') as amended

from time to time. The impugned judgment proceeded on the

basis (1) that there was no proper service of notice as

required under Section 3 of the Act and that (2) there was

no public purpose in requisitioning the land.

Subject matter of the land comprise in plot Nos. 444,

445 and 446 under Khatian Nos. 343, 256 and 135 respectively

in all measuring 1.82 acres in Mouza Mandalganthi within the

limits of Rajarhat Police Station, Rajarhat Municipality in

the district of 24 Parganas (North), West Bengal. This land

belonged to one Chandra Kala Parasrampuria and Ranjana

Kaushal and was recorded in their names in the revenue

Record of Rights. Respondents 1 and 6 to 18 (for short the

writ petitioners') purchased this land in the year 1988 and

on or about February 15, 1990 they applied for mutation of

the land in their names. Even after purchase of the land

they had paid rent of the land in the name of Chandra Kala

Parasrampuria and others, the original owners and were

granted receipts in the names of the original owners. It is

stated that it was on September 7, 1995 that a certificate

of mutation had been issued by the prescribed authority

under Section 50 of the West Bengal Land Reforms Act in

favour of the writ petitioners. Their names also appeared in

the revised settlement record where after they paid rent. We

are mentioning this fact as it was contended that the

application of the writ petitioners for mutation was

ultimately allowed. The writ petition in the High Court

itself came to be filed on March 27, 1995.

Before we examine as to how the land came to be

requisitioned and then acquired under provisions of the Act,

we may set out the relevant provisions of law. Sections 3

and 4 of the Act read as under:

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 21

"Power to requisition :- (1) If the

State Government is of the opinion

that it is necessary so to do for

maintaining supplies and services

essential to the life of the

community (or for increasing

employment opportunities for the

people by establishing commercial

estates and industrial estates in

different areas) or for providing

proper facilities for transport,

communication, irrigation or

drainage, or for the creation of

better living conditions in rural

or urban areas, not being an

industrial or other areas excluded

by the State Government by a

notification in this behalf, by the

construction or reconstruction of

dwelling places in such areas (or

for purposes connected therewith or

incidental thereto), the State

Government may, by order in

writing, requisition any land and

may make such further orders as

appears to it to be necessary or

expedient in connection with the

requisitioning:

Provided that no land used for

purpose of religious worship or

used by an educational or

charitable institution shall be

requisitioned under this section,

(1A) A Collector of a district, (an

Additional District Magistrate or

the First Land Acquisition

Collector, Calcutta) when

authorised by the State Government

in this behalf, may exercise

within his jurisdiction the powers

conferred by sub-section (1).

(2) An order under sub-section (1)

shall be served in the prescribed

manner on the owner of the land and

where the order relates to land in

occupation (of an occupier, not

being the owner of the land, also

on such occupied),

(3) If any person fails to comply

with an order made under sub-

section (1) the Collector or any

person authorised by him in writing

in this behalf shall execute the

order in such manner as he

considers expedient and may, -

(a) if he is a Magistrate, enforce

the delivery of possession of the

land in respect of which the order

has been made to himself, or

(b) if he is not a Magistrate,

apply to a Magistrate or, in

Calcutta as defined in clause (11)

of Section 5 of the Calcutta

Municipal Act, 1951, to the

Commissioner of Police, and such

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 21

Magistrate or Commissioner, as the

case may be, shall enforce the

delivery of possession of such land

to him."

"4. Acquisition of land - (1) Where

any land has been requisitioned

under Section 3, the State

Government may use or deal with

such land for any of the purpose

referred to in sub-section (1) of

Section 3 as may appear to it to be

expedient.

(1a) The State Government may

acquire any land requisitioned

under Section 3 by publishing a

notice in the Official Gazette that

such land is required for a public

purpose referred to in sub-section

(1) of Section 3.

(2) Where a notice as aforesaid is

published in the Official Gazette,

the requisitioned land shall, on

and from the beginning of the day

on which the notice is so

published, vest absolutely in the

(State Government free from all

incumbrances and the period of

requisition of such land shall

end."

Rule 3 of the West Bengal Land (Requisition &

Acquisition Rules, 1948 deals with manner of service of

orders and is an under:

"3. Manner of Service of Orders -

An order under sub-section (1) or

section 3 shall be served on the

owner of the land and where the

order relates to land in occupation

of an occupier not being the owner

of the land, also on such occupier.

(a) by delivering or tendering a

copy thereof, endorsed either by

the person authorised by the Act to

make the order or by the Collector,

to the person on whom the order is

to be served or his agent, or

(b) by fixing a copy thereof on the

outer door of some conclusions part

of the house in which the person on

whom the order is to be served

ordinarily resides or carriers on

business or personally works for

gain, or

(c) by sending the same to the

person on whom the order is to be

served by registered post with

acknowledgement due, or

(d) by fixing a copy thereof in

some conscious part of the land to

which the order relates and also in

some conspicuous place of the

office of the Collector."

When the writ petitioner was filed a learned single

Judge of the High Court directed maintenance of status quo.

By subsequent order it appears the interim order in terms of

prayer (d) of the writ petition was passed. An appeal was

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 21

filed against that order before the Division Bench which

directed that "construction in question need not be stopped

and may be proceeded with subject to the decision of this

application without prejudice to the rights and contentions

of the parties in this application". When again matter was

placed before the Division Bench, counsel for the parties

agreed that keeping in view the urgency of the matter the

entire writ applications be heard. As noted above, these

writ petitions were allowed by the Division Bench by the

judgment dated 27/29th March, 1996. Impugned notice

requisitioning the land was quashed and direction was issued

to the State authorities to hand over vacant possession of

the land to the writ petitioners. West Bengal Housing Board,

State of West Bengal and others and Bengal Peerless Housing

Development Company Ltd. have filed separate appeals before

this Court.

Admittedly names of the writ petitioners were not

recorded in the Record of Rights by the prescribed authority

under Section 50 of the WB Land Reforms Act though the

purchase of the land was made by the petitioners in 1988.

They had applied for mutation of the land in their names on

February 15, 1990 and certificate of mutation was granted by

the prescribed authority on September 7, 1995 much after

when the land had been acquired under Section 4 of the Act.

However, the Division Bench in the impugned judgment held

that even though the names of the writ petitioners had not

been recorded in the Record of Rights, they were

nevertheless entitled to notice under Section 3(2) of the

Act, as by virtue of their purchasing the land from the

original owners they were owners of the land and thus

entitled to notice. It was observed that the expression

"owner" occurring in the said section must be given the

meaning in which it is understood in common parlance and

that there was no warrant for importing the provisions of

the WB Land Reforms Act in construing the said expression.

The Division Bench also observed that it was incumbent upon

the authorities to make inquiries in order to ascertain who

were the owners and that the authorities must be deemed to

have constructive notice of the ownership of land by the

writ petitioners by reason of registration of their

respective sale deeds. It was thus held that non-service of

such notice on the writ petitioners rendered the whole

requisition order bad in law. The Division Bench further

held that the purpose for which the requisition had been

made, was not a public purpose within the meaning of the Act

and that the circumstances of the case did not justify the

invocation of the provisions of the Act which was intended

for a special purpose and the exercise by the authorities of

the powers under the Act was in fact a colourable exercise

or power. The Bench further held that the Act did not even

provide for the application of the principles of natural

justice and its provisions being of drastic measure, had to

be strictly complied which the authorities failed to do so.

The principal question that arises for consideration is

if it were the writ petitioners who were entitled to notice

under Section 3(2) of the Act or that this provision stood

complied by serving notice on the recorded owners of land in

the Record of Rights maintained under Section 50 of the WB

Land Reforms Act. We are of the view that the provisions of

service of notice stood complied when notices were served on

the persons recorded as owners in the Record of Rights

maintained under Section 50 of the WB Land Reforms Act. We

are of the view that the provisions of service of notice

stood complied when notices were served on the persons

recorded as owners in the Record of Rights. Record of Rights

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 21

is a statutory document maintained by the prescribed

authority under Section 50 of the Act and it is a notice to

the public at large as to who are the owners of the land in

the records of the authorities. That would be the reason as

to why writ petitioners themselves applied for mutation of

the lands in their names in the year 1990 when in fact they

had purchased the same in 1988. Under Section 3 of the West

Bengal Land Reforms Act, 1955, the Act overrides other laws

if there is anything inconsistent with what is stated in the

Act. Section 50 of the Act provides for maintenance of the

record-of-rights by the prescribed authority by

incorporating therein the changes on account of mutation of

names as a result of transfer or inheritance or partition,

exchange etc. Under sub-section (9) of Section 51A every

entry in the record-of-rights shall be presumed to be

correct, until it is proved that the entry in the record-of-

right is incorrect, proceedings for that, however, will have

to be initiated under the Act itself, Otherwise there s

every presumption about the correctness of the record-of-

rights. As noted above mutation was effected in September

1995. The Division Bench has observed that the Collector

would have been aware of the pendency of the applications of

the writ petitioners for mutation of lands in their names

when the same were pending in his office. The Bench in

effect observed that it was a case where the right hand did

not know what the left hand was doing. This observation

sounds goods, but knowing the working of the Government

offices it appears to have no place. Of course, the

Collector could have asked for a report from the prescribed

authority concerned if any application for mutation of the

land was pending with him. But that would be expecting too

much from the Collector. It is no part of the duty of the

Collector to make a roving inquiry into ownership of the

persons. We are of the opinion the requirements of the law

were met when notices were served upon the recorded owners

as per Record of Rights. Again we do not think in a case

like the present one, it is for the Collector to make

enquiries from registration office to find out if the land

had since been sold by the recorded owners. In Winky

Dilawari (Smt.) and another vs. Amritsar Improvement Trust,

Amritsar (1996 11 SCC 644) (infra) this Court observed that

the public authorities were not expected to go on making

enquiries in the Sub-Registrar's office as to who would be

the owner of the property. The Collector in the present case

was thus justified in relying on the official record being

the Record of Rights as to who were owners of the land

sought to be requisitioned and prudence did not require any

further enquiry to be made. We are therefore of the view

that notices were properly served under Section 3(2) of the

Act on the owners of the land.

Before we further examine the rival contentions, we may

have a look as to how the land was requisitioned on April 2,

1992, acquired on July 22, 1994, transferred to the Housing

Board on December 8, 1994 and finally placed at the disposal

of the Bengal Peerless Development Company Ltd. If we refer

to the object of the Act, it will be see that it was enacted

to provide for the requisition and speedy acquisition of

land for certain purposes. It says:

"Whereas it is expedient to provide

for the requisition and speedy

acquisition of land for purposes of

maintaining supplies and services

essential to the life of the

community, increasing employment

opportunities for the people by

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 21

establishing commercial estates and

industrial estates in different

areas, providing proper facilities

for transport, communication,

irrigation or drainage and creating

better living condition sin urban

or rural areas by the construction

or reconstruction of dwelling

places in such areas or for

purposes connected therewith and

incidental thereto:"

With reference to the object with which the Act was

enacted we may now refer to the order under Section 3(1) of

the Act requisition the land. This can be extracted from

that order and it is as under:

"Whereas in my opinion it is

necessary for the purpose of

construction of Housing Complex by

Housing Development Govt. of WB

(Reg. Branch) maintaining supplies

and services essential to the life

of the community providing proper

facilities for

transport/communication/irrigation/

drainage, viz. for the purpose of

better living condition in rural or

urban areas by construction or

reconstruction of dwelling places

to requisition the land(s)

described in the schedule

below/overleaf."

We may also note that the Act was a temporary measure

and its validity had been extended from time to time. The

Amending Act, 1994 came into force on March 31, 1994, by

which the validity of the Act was extended till March 31,

1997 but the power of requisition of land under Section 3 of

the Act had been omitted with effect from April 1, 1994. It

was however provided that such omission would not affect the

previous operation of the said section or anything duly done

thereunder and any reference to the said section in any

other provisions of the principal Act should be construed as

if the said section had not been omitted. The Act was

further amended on October 8, 1996 by providing certain

procedure for warding compensation etc. In any event these

two amendments would have no application in the present case

inasmuch as the notice of requisition under Section 3(1) of

the Act was issued on April 2, 1992 and gazette notification

for requisition of the land was published on July 22, 1994.

It is submitted that the West Bengal Housing Board Act

(for short `the Housing Board Act') was enacted on October

13, 1972 with a view to solve the acute problem of shortage

of housing, which called for greater and quicker attention,

Mr. Gupta, learned senior counsel appearing for the Housing

Board submitted that it had not been possible for the State

to make the desired expeditious progress in regard to the

construction of houses because of inadequate resources and

also because of the prevailing rules and procedures which

was a time consuming process. He said the Housing Board was

in a better position to undertake housing and allied

projects on a much larger scale and would be able to secure

adequate funds by raising market loans or by obtaining

institutional finance, which a Government Department could

not do.

Again it would appear the Housing Board was also unable

to meet the challenge of constructing more houses to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 21

alleviate the sufferings of the people both in urban and

rural areas. In 1993 the West Bengal Housing Board Act was

amended and the concept of joint venture with private sector

was brought in. It will be instructive to refer to the

Statement of Objects and Reasons which led to introduction

of the West Bengal Housing Board (Amendment) Bill, 1993. It

is as under:

"1. It has been under the

consideration of the State

Government for some time past to

embark on joint venture to promote

housing activities on a large scale

for different categories of people

having different quantums of income

and particularly for Low Income

Group and Middle Income Group

people and to develop lands for

distribution to the general public

for the purpose of building

dwelling houses thereon. To tackle

the problem of hopelessness even in

a modest way, it is, however,

necessary to build at least 50,000

dwelling units in urban areas

during the next five years. The

Housing Department and the West

Bengal Housing Board are, of

course, doing their best within the

existing framework to make the

optimum utilisation of their

organisational capacity to build

the dwelling units as aforesaid.

But the dimension of the problem is

so large that it is not possible

for the Housing Department and the

West Bengal Housing Board to

achieve the target on their own.

2. In the circumstances as stated

above and after a careful

considering of the matter, it has

ben decided to constitute, in the

public interest, joint sector

company or companies for being

entrusted with housing schemes for

expeditious execution.

3. It has also been decided that

the dues of the West Bengal Housing

Board from any individual, firm,

company or association or body of

individuals, whether incorporated

or not, should be recovered as an

appears of land revenue in the

manner provided in the Bengal

Public Demands Recovery Act, 1913

(Ben. Act III of 1913).

4. The Bill has been framed with

the above objects in view."

Under sub-section (12A) of Section 2 of the Amending

Act "new joint sector company" means a joint sector company

formed and registered on or after the date of coming into

force of the Amending Act, 1993. Under Section 27A power has

been conferred on the Housing Board constituted under the

Act to entrust existing of new joint sector company with

housing schemes. This section 27A is as under:

"27A. Power to entrust existing, of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 21

new, joint sector company with

housing scheme. -- Notwithstanding

anything contained in this Act, the

Board may, if it considers PDS

necessary so to do in the public

interest and is s satisfied that an

existing, or new, joint sector

company is willing to comply, or

has complied. with such terms and

conditions as the State Government

may think fit to impose, entrust,

with the previous approval of the

State Government, any existing, or

new, joint sector company with any

housing scheme for execution, and

different existing, or new, joint

sector companies may be so

entrusted with different housing

scheme for execution."

It may be noted that under the Housing Board Act,

Housing Board (or Board) has been constituted which is a

body corporate having perpetual succession and a common seal

and may sue and be used in the corporate name and shall be

competent to acquire and hold property both movable and

immovable, enter into contract and do all thing necessary

for the purposes of this Act. Under Section 17 of the

Housing Board Act powers and duties of Board to undertake

housing scheme have been prescribed. Section 17, in so far

as it is relevant, is as under:

"27A. Power to entrust existing or

new, joint sector company with

housing scheme." Notwithstanding

anything contained in this Act, the

Board may, if it considers at

necessary so to do in the public

interest and is satisfied that an

existing, or new, joint sector

company is willing to comply, or

has compiled, with such terms and

conditions as the State Government

may think fit to impose, entrust,

with the previous approval of the

State Government, any housing

scheme for execution, and different

existing, or new, joint sector

companies may be so entrusted with

different housing schemes for

execution."

It may be noted that under the Housing Board Act,

Housing Board (or Board) has been constituted which is a

body corporate having perpetual succession and a common seal

and may sue and be sued in the corporate name and shall be

competent to acquire and hold property both movable and

immovable, enter into contract and do all things necessary

for the purposes of this Act. Under Section 17 of the

Housing Board Act powers and duties of Board to undertake

housing schemes have been prescribed. Section 17. in so far

as it is relevant, is as under ;

"17. Powers and duties of Board to

undertake housing schemes, (1)

Subject to the provisions of this

Act. the Board may, from time to

time. incur expending and undertake

works for the framing and execution

of such housing schemes as it may

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 21

consider necessary and such housing

schemes may include housing schemes

in relation to lands and building

vested in or in the possession of

the State Government.

(2) The State Government may, on

such terms and conditions as it may

think fit to impose entrust to the

Board the framing and execution of

whether provided for by this Act or

not and the Board shall thereupon

undertake the framing and execution

of such scheme."

Section 18 specifies the matters which a housing scheme

may provide.

On September 13. 1993 a Memorandum of Understanding was

drawn up between the Housing Board and the Peerless General

Finance & Investment Co. Ltd., a public limited company

under the Companies Act, 1956 to promote a joint sector

company and in accordance thereto the Bengal Peerless

Housing Development Company Limited was incorporated as the

existing joint sector company with 49.5% share-holding by

each of the Housing Board and the Peerless General Finance &

Investment Co. Ltd. and one per cent by he State of West-

Bengal.

By the order and notification dated July 22, 1994 made

under Section 4 of the Act, the State Government acquired

the aforesaid 1.82 acres of land for construction of housing

complex. The notification was duly published in the official

gazette and on and from the said date the lands vested

absolutely in the State Government under sub-section (2) of

Section 4 of the Act. By a subsequent notification dated

December 9, 1994 made under Section 29 (1) of the Housing

Board Act the State Government transferred 11 acres of land

which included land measuring 1.82 acres, subject matter of

the present proceedings, to the Housing Board. Under Section

29(1) of the Housing Board Act, the State Government is

empowered to transfer to the Housing Board all such assets

and liabilities of the State Government as if may decide so

to do which stand vested and transferred to the Housing

Board. On March 29, 1995 formal permissive possession of 11

acres of land which had now included 1.82 acres of land

which had now included 1.82 acres of the land in question

was handed over to the new joint sector company, i.e., the

Bengal Peerless Housing Development Company Limited by the

Housing Board to undertake construction of the housing

project with effect from April 3. 1995. As a matter of fact

the foundation stone for this housing project which was

named as "Anupama" was laid by the Chief Minister of the

Government of West Bengal on January 1, 1995. The housing

project was to be executed on 17 acres of land which

included 11 acres of land aforementioned. It is stated that

necessary work for the purpose of housing project in fact

started on the land by the Bengal Peerless Housing

Development Company Ltd. on January 10, 1995.

Mr. V.R. Reddy the learned Additional Solicitor General

who appeared for he State of West Bengal submitted that the

State Government acquired a total area of 29.23 acres of

land for the purpose of creating better living conditions in

rural and urban areas by construction or reconstruction of

dwelling units for the community. The land vested in the

State Government under Section 4 of the Act. He said 10.35

acres of land out of the land so acquired was released at

the request of the Ministry of Urban Development. Government

of India for the purpose of constructing Housing Project for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 21

Central Government Employees Welfare Organisation. Out of

remaining 18.99 acres of land subject matter of these

proceedings, were handed over to the Housing Board by

different notifications under Section 29 of the Housing

Board Act on certain terms and conditions relevant of which

would be : (1) the land hereby transferred shall be utilised

by the Housing Board solely for the purpose of houses and

(2) the Housing Board shall take all steps expeditiously for

sale of all houses/flats proposed to be built together with

the common areas and facilities comprised on the area of

land so transferred to eligible persons either by outright

sale or on hire-ourchase basis at a price considered by the

Housing Board as fair and reasonable.

In supplementary affidavit filed by the Joint

Secretary, Housing Board, Government of West Bengal, it has

been stated as under :

"I. The State Government duly held

negotiations and discussions with

different private sector companies

which submitted applications to the

Government for formation of Joint

sector companies in collaboration

with the West Bengal Housing Board.

On 3.9.93 State Government selected

4 private companies who were

willing to form joint sector

companies in collaboration with

West Bengal Housing Board and out

of the said 4 private companies,

the Committee appointed for the

said purpose by the State

Government selected two companies

one of them being Peerless General

Finance and Investment Co. Ltd, and

such selection was duly approved by

the State Government.

II. The joint sector company

namely Bengal Peerless Housing

Dev.Co. Ltd. is run by an

independent Board of Directors. The

Board of Directors consist of 7

(seven) Directors out of which 4

(four) Directors (two of them are

Ex-Secretaries, Housing Department,

Govt. of West Bengal and other two

are Ex-Commissioners of Housing

Board, who are still the Board

members of West Bengal Housing

Board) are nominated by the State

Government. The Chairmen of the

joint sector company is nominated

by the State Government and thereby

the State Government nominees are

in the majority in the Board.

III. The said joint sector company

has the overall responsibility for

the construction and implementation

of the housing project which shall

be within the policy frame work of

the Govt. of West Bengal. The

housing scheme shall be prepared

and executed as defined in the West

Bengal Housing Board Act. The

implementation of the project,

marketing and sale of the dwelling

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 21

units will be done by the joint and

control of State of West Bengal

Housing Board. The same shall be

implemented if and when required by

the Govt. of West Bengal and

Housing Board. Therefore, a joint

sector company has been constituted

in the name of Bengal Peerless

Housing Development Company

Limited, strictly to give effect to

the Government policy on serving

the public interest of providing

dwelling units to people under

schemes to be formulated and

implemented under the policy frame

work of the State Government of

West Bengal such schemes however

have to be implemented under the

overall guidance and control of the

West Bengal Housing Board.

IV. The State Government/West

Bengal Housing Board will have the

majority in the Board of Directors

of the Company. No activities can

be carried on by he joint sector

company without the approval of the

Government and without the consent

of the Government and without the

consent of the Government nominee

Directors. The whole purpose of

joint sector company of the joint

sector company is clearly for

effectuating the public interest of

providing dwelling accommodation

for the homeless people. As already

indicated, the substantial number

of dwelling units in the project

the for the Lower Income Group and

Middle Income Group. However, to

provide subsidised housing to the

Lower and Middle income groups the

joint sectors company has adopted a

suitable mix of housing of various

groups viz., LIG, MIG and HIG so as

to make the project economically

viable.

The whole policy with which the

joint sector company, the Bengal

Peerless Housing Development

Company limited, has been

functioning and has intended to

function is not to make more than

nominal profit.

V. LIG and MIG dwelling units

constitute 73% of the total units

that are proposed to be constructed

apart from the additional land

mentioned above which shows that

the preponderant object of the

schemes is to provide accommodation

to people belonging to the Lower

Income and Middle Income Groups at

very reasonable rates and such

rates are only possible because of

gross subsidy by sale of the units

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 21

of HIG which constitutes only 27%

of the total project.

VI. It is submitted respectfully

that the housing scheme which is

now being implemented is

predominantly and wholly for the

benefit of the common people and

preeminently for public purpose.

VII. From the facts, it will thus

clearly appear that the land for

which the project is being

constructed belongs to West Bengal

Housing Board and the joint sector

company have been entrusted only to

implement the housing project of

the Govt. of West Bengal and such

work is being done as per the

scheme framed under the West bengal

Housing Board Act approved by the

West Bengal Housing Board and under

the overall guidance and control of

the State Government/Housing Board.

Funds for the construction have

been provided for by Peerless

General Finance and Investment

Company Limited to the joint sector

company and also recovered advances

from the prospective allottees by

dwelling units. The only financial

contribution of the Government

through Housing Board is to the

acquisition of equity shares of the

joint sector company to the extent

of Rs. 10.0 lacs."

The supplementary affidavit aforesaid also sets out the

scheme of the Housing project and also the considerations

which were taken into account while framing the scheme.

These may also be set out as under :

"SCHEME OF THE HOUSING PROJECT

I. The types of flats and the

sale prices thereof have also been

settled and or fixed by the West

Bengal Housing Board and the terms

of sale provide that escalation of

sale price of the flat will not be

allowed, even if there are

additional expenditure as there in

fact has been. The project will

comprise of 912 flats for the

people of different income groups.

II. The eligibility criteria for

allotment of flats to public in

general has also been stipulated

and or specified by the West Bengal

Housing Board. The terms and

conditions as such are as follows

:-

(a) One member of the same family

which includes husband/wife,

dependent parents and dependent

children can submit one application

only (b) one dwelling unit will be

allotted to one person of the

family and (c) those person who

does not have any

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 21

house/flat/building plots of land

in Calcutta Metropolitan area are

only eligible to apply for

allotment of flat.

III. Procedure for allotment of

flats to the public in general has

also been guided by the West Bengal

Housing Board. Application for

allotment of flats was invited from

the public after wide publication

in the newspaper. About 4353 nos,

of applications were received

against 912 flats and thereafter a

lottery was held in a public place

under the guidance and supervision

of West Bengal Housing Board where

Sri. K.N. Sinha. Minister of State.

Sri. Sailen Manna (Padmashree)

alongwith the applicants were

present to witness the lottery.

Only those persons who were

successful in the lottery were

allotted their respective flats. As

a matter of fact, the mode of

allotment of flats was entirely

based upon the lottery and neither

the Housing Board nor the State

Government nor the joint venture

company had any role to play in the

matter of allotment of flats

according to their choice.

IV. In he said Housing complex as

has been directed by the West

Bengal Housing Board the joint

sector company will have to install

sewage treatment plant and 33 KV

electrical sub-station with the

technical help of the West bengal

State Electricity Board.

SCHEME WAS FRAMED TAKING INTO

CONSIDERATION THE FOLLOWING ASPECTS

I. At least 50% of the dwelling

units are to be planned for the Low

& Middle Income Group of people of

the society who are not in a

position to purchase any dwelling

unit within he urban area of

Calcutta from any other source

because of high price of such flats

which are beyond the reach of

common people. Accordingly, sale

price of the flats for the LIG &

MIG dwelling units were fixed at a

rate as low as Rs.349.00 and Rs.

509.00 per s.ft and market study

reveals that in no other

metropolis, even in Calcutta, flats

are provided at this rate when

market price of building materials

have gone high beyond expectation.

In this scheme 73% of such units

are planned for this section of

society.

II. No price escalation shall be

charged and flats are to be handed

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 21

over at a fixed price and within

the scheduled date.

III. The prices of the flats are on

the plinth area as per National

Building Code and not on Super

built-up area.

IV. The construction work started

in January, 1995 and substantial

progress has been made so that all

the flats can be handed over to the

respective allottees on or before

1998 as promised.

It is respectfully submitted that

any scheme to solve the housing

problem would promote a public

purpose. Such a scheme need not be

undertaken by the State directly

but may well be implemented under

the supervision, control and

guidance of the State. Such purpose

may be achieved also through a

joint sector company. It is

becoming increasingly necessary to

induce private enterprise to co-

operate with the State Government

in particular sector of the economy

for providing relief as early as

possible. In the context of Act II

of 1948, the Hon'ble High Court at

Calcutta has uniformly taken this

view that the State can invoke the

provision of Act II of the 1948

where the State required to deal

with any of the purposes covered

under the said Act through some

other agency including a Company."

It was submitted that any scheme to solve the housing

problem would promote a public purpose and that such a

scheme need not be undertaken by the State directly but may

well be implemented under the supervision, control and

guidance of the State and that such a purpose may be

achieved also through a joint sector company. Mr. Reddy

submitted that it was becoming increasingly necessary to

induce private enterprise to cooperate with the State

Government in particular sector of the economy for providing

relief as early as possible.

In this background it is difficult for us to accept the

submissions of the writ petitioners that the purpose for

which the requisition had been made was not a public purpose

within the meaning of the Act or that the circumstances of

the case did not justify the invocation of the provisions of

the Act or that the exercise of powers under that Act was a

colourable exercise of power.

At this stage we may also notice some of the judgments

cited at the bar.

In Sureshchanora C. Mehta vs. State of Karnataka and

Others (1994 Supp (2) SCC 511) Section 17 (5) of the

Bangalore Development Authority Act, 1976 was considered

which provided that every person whose name appeared in the

assessment list of the local authority or land revenue

recorded shall be served with a notice so that he could make

necessary objection to the notification published under sub-

section (1) of Section 17 of that Act. Sub-section (5) of

Section 17 provided as under :

"During the thirty days next

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 21

following the day on which such

notification is published in the

official Gazette the Authority

shall serve a notice on every

person whose name appears in the

assessment list of the local

authority or in the land revenue

register as being primarily liable

to pay the property tax or land

revenue assessment on any building

or land which is proposed to be

acquired in executing the scheme or

in regard to which the authority

proposes to recover betterment tax

requiring such person to show cause

within thirty days form the date of

the receipt of the notice why such

acquisition of the building or land

and the recovery of betterment tax

should not be made."

The objection of the appellant in that case was that

since his name was entered in the revenue record he had a

right to the notice. It appeared when notice under sub-

section (1) of Section 17 was issued the name of the

appellant was not found entered in the assessment list of

the local authority or in the land revenue register making

him primarily responsible to pay land revenue. The Court

observed that existence of the name of such person in the

concerned record before publication of the notification

under Section 17(1) was a condition precedent and the

authority was not required to make a roving inquiry as to

who is the person entitled to a notice. The Court agreed

with the judgment of the karnataka High Court rejecting the

contention of the appellant that the authority the

contention of he appellant that the authority had requisite

knowledge as to who was the owner of the property in

question and it held that sub-section (5), of Section 17

made it clear that notice was required to be served on the

person whose name was found in the revenue register and who

was primarily responsible for the payment of the land

revenue. The High Court had also held that the knowledge of

the authority by any other process could not be treated as

making it responsible for serving notice in terms of sub-

section (5) of Section 17 that the knowledge of ownership or

interest in collateral proceedings was not the deciding

criteria. The Court had held that one who was responsible

for the payment of land revenue or property tax would alone

be entitled to the notice under Section 17 (5) of the Act.

The Calcutta High Court in the impugned judgment

distinguished this judgment of the Supreme Court in

Sureshchanora C. Mehta's case on he ground that in that case

the law itself prescribed notice to be served on a person

whose name was entered in the revenue record. But the

observations of the Supreme Court in that case that "the

authority is not required to make a roving inquiry as to who

is the person entitled to a notice" is quite apt and has to

be given due weight and consideration.

In Winky Dilawari (Smt.) and another vs. Amritsar

Improvement Trust, Amritsar (1996 11 SCC 644) Section 38 of

the Punjab Town Improvement Act, 1922 envisaged issue of

notice of proposed acquisition of lamb. The section is as

under :

"38, Notice of proposed acquisition

of land. -(1) During the thirty

days next following the first day

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 21

on which nay notice is published

under Section 36 in respect of any

scheme under this Act the trust

shall serve a notice on -

(i) every person whom the trust

has reason to believe after due

enquiry to be the owner of any

immovable property which it is

proposed to acquire in executing

the scheme.

(ii) the occupier (who need not be

named) or such premises is the

trust proposes to acquire in

executing the Scheme.

(2) Such notice shall -

(a) state that the trust proposes

to acquire such property for the

purposes of carrying out a scheme

under this Act, and

(b) require such person, if he

objects to such acquisition, to

state his reasons in writing within

a period of sixty days from the

service of the notice.

(3) Every such notice shall be

signed by, or by the order of the

chairman."

In that case the disputed property was a vacant site

and the appellant had purchased the same on January 24,

1985. Amritsar Improvement Trust had framed a scheme under

Section 36 of the Act which was given due publicity and

objections invited. Thereafter proceedings were taken up for

acquisition of the land proposed to be acquired under the

scheme. The scheme was approved by the Government on March

19, 1985. After the purchase was made by the appellant his

name was not mutated in the records of the Municipality and

the question before the Suoreme Court was whether the

failure to serve the notice on the appellant vitiated the

approved scheme. Facts are not quite clear from the judgment

as to whom notice had been served but one can safely assume

that in had been served on the person who was the erstwhile

owner of the property before it was purchased by the

appellant. The Court held that in these circumstances

failure to serve notice on the appellant did not vitiate the

approved scheme. The Court also observed that the principle

that the registration of sale was constructive notice had no

application to such a situation. The court on the argument

of he appellant that registration of a document in the

Office of the Sub-Registrar was a notice as envisaged under

the Registration Act, 1908 observed as under :

"But the question is whether the

public authorities are expected to

go on making enquiries in the Sub-

Registrar's office as to who would

be the owner of the property?

Reasonable belief, after due

enquiry, contemplated under Section

38 (1) (1) would envisage that the

persons who are reputed to be known

as owners of the immovable property

which was proposed to be acquired

after the Scheme was approved by

the Government, are the actual

owners of the property. It is now

settled law that public functions

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 21

are to be discharged through its

officers and if there is

dereliction on their part in the

performance thereof and the public

inconvenience is enormous, the

Court always considers the

procedure to be directory. It has

always considered, by a catena of

decisions of his Court such a

procedure to be directory. If it

were a case where a reduced owner

whose name has already been entered

in the municipal takes over a paid

the municipal takes over a period

to the Municipality or the Gram

Panchayat, as the case may be,

necessarily there would be scope

for the authorities to reasonably

believe, after due enquiry, that he

would be the owner. If they

derelict in making such necessarily

it may be held that its failure to

get the notice served on the owner,

who was believed to be the owner of

the property, for the proposed

acquisition, vitiates the

acquisition made under the Schedule

read with Section 59 of the Act.

but if in a short interregnum there

were successive sales and transfer

of the land, the public authorities

are not expected to go on making

enquiries in the Sub-Registrar's

office as to who would be the owner

of the immovable property proposed

to be acquired. The principle

proposed to be acquired. The

principle notice has no

application to such a situation."

Constitutional validity of the West Bengal Land

(Requisition and Acquisition) Act. 1948 was upheld by the

Supreme Court in S.M. Nandy & Ors. vs. State of West Bengal

and Ors. (1971 3 SCR 791). The Court held as under :

"We are, therefore, of the opinion

that it is difficult to hold that

restrictions imposed by the PDS Act

are unreasonable. Fair compensation

has been provided for

requisitioning, which is,

determinable by a Civil Court and

ultimately by the High Court or the

Supreme Court, Regarding the

necessity for requisitioning it

must necessarily be left to the

State Government. It is true that

there is no express provision to

make a representation against an

order of requisition but there is

no bar to a representation being

made after an order is served under

s. 3(2) of the Act."

In H.D. Vora vs. State of Maharashtra and others. (AIR

1984 SC 866) relying on the earlier judgment of the Court in

State of Bombay vs. Bhanji Munji (1955 1 SCR 777: (AIR 1955

SC 41) which was a case under the Bombay Land Requisition

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 21

Act, 1948, the Court observed that it was not necessary that

the order of requisition must explicitly set out the public

purpose for which it was made and that the only requirement

of the law was that the requisitioning must be made for a

public purpose and that so long as there was a public

purpose for which an order of requisition was made, it would

be valid, irrespective of whether such public purpose was

recited in the order of requisition or not. But then the

State Government has to show that the order of requisition

was made for a public purpose and that necessary facts

showing the public purpose for which the order of

requisition was made would have to be established by the

State Government from its record to the satisfaction of the

Court. In that case the Court held that the order was not

made for public purpose and further that the requisition

could not be for an indefinite period. The Court was of the

view that the order of requisition even though valid ceased

to be valid and effective after the expiration of the

reasonable period of time but at the same time the Court

observed that if was not necessary for it to decide what

period of time might be regarded as reasonable for the

continuance of an order of requisition in a given case

because ultimately the answer to that question case because

ultimately the answer to that question must depend on the

facts and circumstances of each case. This judgment in our

view is of no help to decide the issue now raised before us.

It is a matter of common knowledge that there is acute

shortage of housing accommodation both in rural and urban

areas of the country. Since late the rural and urban areas

of the country. Since late the prices of the real estate

have sky-rocketed making it beyond the reach of low income

and middle income people. State has a duty to perform to

give shelter to homeless people specially to people in the

low income group. In the present case State was unable to

meet this gigantic task. In the background of shortage of

resources which the State has the legislature enacted the

Housing Board Act and constituted the Housing Board to meal

the challenge. Housing Board Act was amended to bring in the

concept of joint venture in order to tag the resources of

the private sector. Thus, a joint feature came into being as

disclosed in the supplementary affidavit of the State as to

how the process of starting of joint venture had gone into

and how the Board of Directors of the joint sector company

had been constituted and how the State and Housing Board

exercise control over this joint sector enterprise.

Simply because there is an element of profit could not

make the whole scheme illegal. A private entrepreneur will

certainly look to some profit but to see that the profit

motive does not lead to exploitation even of the rich and

that the houses are available to the poor people and to

middle class people at nominal o affordable prices, or even

on no profit no loss basis, the Housing Board exercises the

necessary control. It is certainly a public purpose to

provide houses to the community especially to poor people

for whom the prices are beyond their means and they would

otherwise be never able to acquire a house.

What has been done in the present case is that the

profit earned on sale of flats of HIG have been pumped into

to subsidise the prices of the houses failing in LIG and in

this there would certainly be element of profit both for the

Housing Board as well as the private company in the joint

venture for selling flats of HIG. We fail to see how public

purpose is not being served in the present case.

Court must shake off its myth that public purpose is

served only if the State, or the Housing Board or the joint

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 21

sector company does not earn any profit. There cannot be any

better authority than the State or the statutory corporation

to supervise or monitor the functions of the joint venture

company. Courts will certainly step in if the public purpose

is sought to be frustrated.

In the present case Directors appointed by the Housing

Board/State on the Board of Directors of he Joint Venture

Company would certainly see that no run away profit is

earned and that sale price of HIG houses is guided by market

forces but there is no exploitation. Every section of the

society needs protection from exploitation. It is however

not possible nor desirable to lay down any principle as to

how this to be done in a particular case.

In Reg. v. Hillingdon L.B.C., Ex p. Punlhofer

(H.L.(E.)) (1986 1 AC 484) the court was considering the

power of the housing authority constituted under the Housing

(Homeless Persons) Act 1977 in refusing an application that

the applicants were neither homeless nor threatened with

hopelessness. The applicants. A married couple, lived with

two young children in on room at a guest house where no

cooking or laundry facilities were available in the premises

and no meals except breakfasts were provided. Subsequently

the housing authority reconsidered the application, but

having taken into account the housing conditions prevailing

in their area, they confirmed their original decision. The

applicants applied for judicial review of the housing

authority's decision. Hodgson, J. granted the relief,

holding that the accommodation to be available for a person

and his family had to be appropriate to the needs of the

family and that no reasonable housing authority could have

come to the conclusion that the accommodation in question

was appropriate. On appeal to the Court of Appeal by the

housing authority the same was allowed. Further appeal by

the applicants to the House of Lords was dismissed. The

following observations of Lord Brightman who spoke for the

Court would be relevant :

"In the instant case, the bona

fides of the borough is not in

dispute. On the facts in evidence,

it is in my opinion plain that the

council were entitled to find that

the applicants were not homeless

for the purposes of the Homeless

Persons Act because they had

accommodation within the ordinary

meaning of that expression.

My Lords, I and troubled at the

prolific use of challenging the

their functions under the Act of

1977. Parliament intended the local

authority to be the judge of fact.

The Act abounds with the formula

when, or if, the housing authority

are satisfied as to this, or that,

or have reason to believe this, or

that. Although the action or

inaction of a local authority is

clearly susceptible to judicial

review where they have misconstrued

the Act, or abused perversely, I

think that great restraint should

be exercised in giving leave to

process by judicial review. The

plight of the homeless is a

desperate one, and the plight of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 20 of 21

the applicants in the present case

commands the deepest sympathy. But

it is not, in my opinion,

appropriate that the remedy of

judicial review, which is a

discretionary remedy, should be

made use of to monitor the actions

of local authorities under the Act

save in the exceptional case. The

ground the exercise of an

administrative discretion is abuse

of power - e.g. bad faith, a

mistake in construing the limits of

the power, a procedural

irregularity, or unreasonableness

in the Wednesbury sense -

unreasonableness verging on an

absurdity : see the speech of Lord

Scarman in Reg. Secretary of State

for the Environment, Ex parte

Nottinghamshire County Council

(1986) A.C. 240, 247-248. Where the

existence or non-existence of a

fact is left to the judgment and

discretion of a public body and

that fact involves a broad spectrum

ranging from the obvious to the

debatable to the just conceivable,

it is the duty of the court to

leave the decision of that fact to

the public body to whom Parliament

power save in a case where it is

obvious that the public body,

consciously or unconsciously, are

acting perversely."

In L. Chandra Kumar vs. Union of India (AIR 1997 SC

1125) the Court held that power of judicial review over

legislative action vested in the High Court under Article

226 and in the Supreme Court under Article 32 is an integral

and essential feature of the Constitution, constituting part

of its basic structure. Ordinarily, therefore, the power of

the High Courts and Supreme Court to test the constitutional

validity of legislations can never be ousted or excluded. No

doubt under the Constitution power of judicial review of the

action State or its authorities is unfettered but restraint

should however be the hallmark of judicial review.

The Courts normally do not interfere in the policy

matters of the State. If, however, the policy so formulated

is against the mandate of the Constitution or any statutory

provision it can certainly be tested on the principles of

judicial review. When an act falls within the policy of the

State which has been formulated for the benefit of the poor

and needy and which policy cannot be faulted, court should

stay its hands and need not examine the details minutely

with a hands and need not examine the details minutely with

a magnifying glass to find some fault here and there

magnifying glass to find some fault here and there unless

there are allegations of mala-fides. An overall view is to

be taken of the matter and this potent weapon of judicial

review cannot be used indiscriminately.

We find in the present back-drop the inability of the

State Government and the Housing Board to meet the challenge

to achieve the target of even constructing 50,000 dwelling

units in urban areas to tackle the acute problem of

homelessness for different categories of people particularly

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 21 of 21

those falling in Lower Income Group (LIG) and Middle Income

Group (MIG) ; he State legislature amending the Housing

Board Act and providing for incorporation of a joint sector

company for executing the housing scheme on the terms and

conditions to be approved by the State Government ;

selection of the private entrepreneur for incorporation of

the joint sector company with the Housing Board ; the

Constitution of the Board of Directors of the joint sector

company ; the control of the Housing Board and the State

Government over the joint sector company to execute the

scheme of the housing project ; control on the fixation of

precise of the flats to be constructed by the joint sector

company ; relevant factors taken into consideration for

execution of the housing project and all these to tackle the

urgent and growing need of providing shelter to the LIG and

MIG people when it is not possible for these people to

acquire a house of their own with escalating real estate

prices ; it cannot be said that the public purpose is not

being served or the incorporation of the joint sector

company viz. Bengal Peerless Housing Development Company

Ltd. and the execution of the housing project "Anupama" by

this joint sector company, in the given circumstances, on

the land in question which is part of the bigger piece of

land is not in public interest. The Housing Board acts as

regulatory body and the State Government overseas the

housing project and has also imposed certain terms and

conditions. No ulterior purpose has been alleged and it

cannot be said that the power exercised by the State

authorities are in any way arbitrary or irrational or there

is any abuse of power. Rather the legal compulsion of the

State and the Housing Board to get the housing project

executed through a joint sector company is quite

understandable. We also find the impugned action is within

the purview of law and is valid.

Accordingly, these appeals are allowed, judgment of the

Division Bench of the Calcutta High Court is set aside and

the writ petitions filed by the respondents are dismissed.

However, there will be no order as to costs.