# 1 l S.C.R. 263 KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS

- **Citation:** [2016] 11 S.C.R. 263
- **Court:** Supreme Court of India
- **Decided:** 2016-08-31
- **Case number:** Civil Appeal No. 8438 of2016
- **Bench:** V. Gopala Gowda, Arun Mishra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1-l-s-c-r-263-kedar-nath-yadav-v-state-of-west-bengal-ors-31164
- **Pages:** 156

## Headnote

Land Acquisition Act, 1894:
Parts II and VII; ss. 3(j), 4, 6, 5A. 9 and 11 - Acquisition of
lancf - At the instance of a particular Company for its project -
Notification uls 4(1) stating therein that the land was likely to be
needed to be taken by the Government/Government Undertaking/
Development Authorities for a public purpose viz. employment
generation, socio-economic development by setting up an industrial
project of a particular Company - Objections u/s 5-A filed -
Objections were rejected by Land Acquisition Collector and stated
in its report that the acquisition by State Industrial Development
Corporation was for public purpose - Piirsuant thereto Notification
u/s. 6 issued - Award of compensation - The Corporation took
possession of the land - Lease Deed executed in favuur of the
Company - Acquisition proceedings challenged - High Court upheld
the acquisition - On appeal held: Pt;r V. Gopala Gowda, J.:
Acquisition in the present case was for 'a Company and hence not
covered under 'public purpose' - When the acquisition is for a
company, procedure to be adopted is laid down in Part VII r/w rules
framed thereunder - Since the procedure under Part VII was not
followed, the acquisition is grossly perverse, illegal and void ab
initio - The objections u/s 5-A have been rejected without assigning
any clear reason or application of mind rendering the report of the
Land Acquisition Collector invalid - The award of compensation is
also vitiated for non-compliance of provisions uls. 9 - Per Arun
Misltra, J.: There can be an acquisition for public purpose and
ultimately the land may go on lease or other mode of transfer 'to a
company in case the compensation is paid out of public revenue -
In the present case the State Industrial Development Corporation
i.e. a Govt. Authority was the acquiring body and compensation
paid by. it is to be treated out of public revenue - Therefore, the
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acquisition was for public purpose and hence procedure adopted
under Part II cannot be said to be impermissible - Non-compliance
of provisions under s.9 in awarding the compensation would also
not vitiate the Notifications ulss. 4 and 6 - However, there was no
objective consideration of objections u/s. 5-A at any stage - The
inquiry held uls. 5-A was a farce and therefore, the entire acquisition
stands vitiated -- Per Court: Acquisition of the land is illegal and
void - Directions to restore the possession of the land to respective
land-owners - Compensation which has already been paid, not to
be recovered - Land-owners who have not withdrawn the
compensation, permitted to withdraw the same.
Part-JI and Part VII-Distinction between-PerArun Mishra,
J.: Existence or non-existence of a public purpose is not a primary
distinguishing factor between the acquisition under Part II and that
under Part VII - The real point of distinction is the source of.funds
to cover the cost of acquisition - The second proviso to s.6(I) is the
main driving ground for the two types of acquisit:"ri.
Practice and Procedure:
Government litigant - Change in stand by subsequent
Government - Permissibility - Held: Per V. Gopa/a Gowda, J.:
Though rule of law cannot be sacrificed for the sake of fi1rthering
political agenda - However, the subsequent Government can change
the stand if there is material on record to show that the earlier action
by the Government was illegal or suffered from legal malafides or
colourable exercise of power.
Affidavits - Binding effect, on the Supreme Court - Held:
Per V. Gopala Gowda, J.: Supreme Court is not bound by affidavits
and counter affidavits filed by parties - The Court in exercise of its
power u/Art.136 can decide the legality of the issue on the basis of
the material on record - Constitution of IndiaArt.-136.
Doctrines/Principles:
Principles of stare decisis - Discussed.
Allowing the appeals, the Court
HELD: Per V. Gopala Gowda, J.
1.1 It cannot be said that the

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[2016] 1 l S.C.R. 263
KEDAR NATH YADAV
v.
STATE OF WEST BENGAL & ORS.
(Civil Appeal No. 8438 of2016)
AUGUST 31, 2016
[V. GOPALA GOWDA AND ARUN MISHRA, JJ.]
Land Acquisition Act, 1894:
Parts II and VII; ss. 3(j), 4, 6, 5A. 9 and 11 - Acquisition of
lancf - At the instance of a particular Company for its project -
Notification uls 4(1) stating therein that the land was likely to be
needed to be taken by the Government/Government Undertaking/
Development Authorities for a public purpose viz. employment
generation, socio-economic development by setting up an industrial
project of a particular Company - Objections u/s 5-A filed -
Objections were rejected by Land Acquisition Collector and stated
in its report that the acquisition by State Industrial Development
Corporation was for public purpose - Piirsuant thereto Notification
u/s. 6 issued - Award of compensation - The Corporation took
possession of the land - Lease Deed executed in favuur of the
Company - Acquisition proceedings challenged - High Court upheld
the acquisition - On appeal held: Pt;r V. Gopala Gowda, J.:
Acquisition in the present case was for 'a Company and hence not
covered under 'public purpose' - When the acquisition is for a
company, procedure to be adopted is laid down in Part VII r/w rules
framed thereunder - Since the procedure under Part VII was not
followed, the acquisition is grossly perverse, illegal and void ab
initio - The objections u/s 5-A have been rejected without assigning
any clear reason or application of mind rendering the report of the
Land Acquisition Collector invalid - The award of compensation is
also vitiated for non-compliance of provisions uls. 9 - Per Arun
Misltra, J.: There can be an acquisition for public purpose and
ultimately the land may go on lease or other mode of transfer 'to a
company in case the compensation is paid out of public revenue -
In the present case the State Industrial Development Corporation
i.e. a Govt. Authority was the acquiring body and compensation
paid by. it is to be treated out of public revenue - Therefore, the
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acquisition was for public purpose and hence procedure adopted
under Part II cannot be said to be impermissible - Non-compliance
of provisions under s.9 in awarding the compensation would also
not vitiate the Notifications ulss. 4 and 6 - However, there was no
objective consideration of objections u/s. 5-A at any stage - The
inquiry held uls. 5-A was a farce and therefore, the entire acquisition
stands vitiated -- Per Court: Acquisition of the land is illegal and
void - Directions to restore the possession of the land to respective
land-owners - Compensation which has already been paid, not to
be recovered - Land-owners who have not withdrawn the
compensation, permitted to withdraw the same.
Part-JI and Part VII-Distinction between-PerArun Mishra,
J.: Existence or non-existence of a public purpose is not a primary
distinguishing factor between the acquisition under Part II and that
under Part VII - The real point of distinction is the source of.funds
to cover the cost of acquisition - The second proviso to s.6(I) is the
main driving ground for the two types of acquisit:"ri.
Practice and Procedure:
Government litigant - Change in stand by subsequent
Government - Permissibility - Held: Per V. Gopa/a Gowda, J.:
Though rule of law cannot be sacrificed for the sake of fi1rthering
political agenda - However, the subsequent Government can change
the stand if there is material on record to show that the earlier action
by the Government was illegal or suffered from legal malafides or
colourable exercise of power.
Affidavits - Binding effect, on the Supreme Court - Held:
Per V. Gopala Gowda, J.: Supreme Court is not bound by affidavits
and counter affidavits filed by parties - The Court in exercise of its
power u/Art.136 can decide the legality of the issue on the basis of
the material on record - Constitution of IndiaArt.-136.
Doctrines/Principles:
Principles of stare decisis - Discussed.
Allowing the appeals, the Court
HELD: Per V. Gopala Gowda, J.
1.1 It cannot be said that the State of West Bengal cannot
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS.
be allowed to resile from the position taken by them in their
pleadings, that Part VII of the Land Acquisition Act, 1894 has no
application in the instant case and the acquisition of land was one
which was done in the public interest,,,without even filing an
affidavit. While it is true that rule oflaw cannot be sacrificed for
the sake offurthering political agendas, it is also a well established
position of law that a stand taken by Jhe State Government can
be changed subsequently if there is material on record to show
that the earlier action of the acquisition of lands by the State
Government was illegal or suffers from legal malafides or
colourable exercise of power. [Paras 41, 47] [317-F-G; 320-C-D]
Jal Mahal Resort (P) Ltd. v. K.P. Sharma 2014 (11) SCR
765 : (2014) 8 SCC 804; Andhra Pradesh Dairy
Development Corpn. Federation v. B. Narasimha Reddy
2011 (14) SCR 1 : (2011) 9 SCC 286; Ml. Builders
Pvt. Ltd. v. Radhey Shyam Sahu & Ors. 1999 (3) SCR
1066 : (1999) 6 sec 464 - referred to.
1.2 It is also well settled position of law that this Court is
not bound by affidavits and counter affidavits filed by the parties.
In exercise of its power under Article 136 of the Constitution of
India, this Court can examine the material on record in order to
determine whether the action of the previous State Government
· in acquiring the lands in the instant case was in accordance with
law or not. In the instant case, the cabinet records, communication
between Tata Motors Ltd. and representative of the State
Government, the notifications published under Sections 4 and 6
of the Act are all on .record. The Court shall examine the same to
assess the validity of the acquisition of the lands in these
proceedings. [Para 48] [320-D-E; 321-A]
P.S:R. Sadanatham v. Arunachalam 1980 (2) SCR
873 : (1980) 3 sec 141 - followed.
2.1 When the acquisition of land is for a public purpose, it
is Part II of the' Act which would apply and where the acquisition
of land is at the instance of a Company, the procedure to be
adopted is laid down in Part VII of the Act. [Para 60] [327-D]
2.2 Section 3(f) of the Land Acquisition Act, which defines
what public purpose is for the purpose ofacquisition ofland, clearly
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f20161 11 S.C.R.
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indicates that the acquisition ofland for companies is not covered
within the public purpose. A perusal of the notification issued
under Section 4(1) of the Land Acquisition Act clearly shows that
the proposed lands in the notification are needed for the setting
up of the Tata Small Car project. The Cabinet Memo dated
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30.05.2006 mentioned acquisition of lands by West Bengal
Industrial Development Corporation (WBIDC) for the purpose
of setting up of the Tata Motor's 'Small Car Project' in the State
of West Bengal. [Paras 52, 53, 54] [323-B, C-E]
2.3 As is evident from the Notifications issued under the
Act and from the· cabinet memo, there is no mention about such
requisition being made by the Corporation (WBIDC) to.the State
Government regarding the proposed lands being required for
acquisition in favour of WBIDC for planned development of land
in pursuance of any .. scheme or policy of the Government. Even
from a perusal of the letter dated 29.08.2006, written by the Joi.ut ·
Secretary, Land and Land Reforms Department, Government of
West Bengal, it becomes clear that the State Government did
not apply its mind while considering the need of the land and
merely followed the document on which the Collector had signed.
[Para 55] [323-G-H; 324-A]
2,4 Even if it is accepted that it was the policy of the State
Government to generate employment and increas.e socioeconomic development in the State, the relevant policy iJocuments
are not forthcoming in the original acquisition files which were
made available for this Court. Thus, by no stretch of imagination
can the acquisition of lands in the instant case be said to be at the
instance of WBIDC, or for the fulfilment of some scheme of the
Corporation or the State Government. Thus, it cannot be said to
attract Section 3(f)(iii), (iv) or (vi) either. [Para 56] [324-E-F]
2.5 It is undisputed fact that the State Government has not
deposited the public money towards the cost of acquisition ofland to
G initiate the acquisition proceedings to show that the acquisition of
lands is for public purpose which is an essential requirement under
the provision of.Section 6 of the Act. The notification issued under
Section 6 of the Act merely provides tlfat the land is needed for the
setting up of the Tata Small Car project, which is a public purpose
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under the Act. [Para 56] [325-A~C)
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS.
2.6 There seems to be no application of mind either at the
stage of issuance of the notification under Section 4 of the Act, or
the report of Collector under Section 5-A (2) of the Act or the
issuance of the final notification under Section 6 of the Act. Such
an acquisition, if allowed to sustain, would lead to the attempt to
justify any and every acquisition of land of the most vulnerable
sections of the society in the name of 'public purpose' to promote
socio-economic development. Neither there is a scheme of the
Government, nor the funds have been derived from the public
revenue and that is why the acquisition in the instant case cannot
be said to be one for 'public purpose'. [Paras 56, 57) [325-G-H;
[326-A, DJ
2. 7 After the passing of the Land Acquisition Amendment
Act, 1984, acquisition of land for a company is no longer covered
under 'public purpose' in view of Section 3(f)(viii) of the Land
Acquisition Act. Apart from the above statutory provisions
inserted by way of an amendment, the Objects and Reasons for
such amendment that the mandatory procedure as laid down under
Part VII of the Act read with the rules framed thereunder was
not followed by t_he State Government bl.'fore the notifications
were published. [Para 58) [326-F-G)
2.8 Before land could be acquired, the procedure consistent
with the statutory provisions oflaw must be followed mandatorily.
There is nothing in law which would support the acquisition of
land for a particular Company under the guise of 'public purpose',
rendering the exception provided under Section 3(f)(viii) of the
Act useless and nugatory. [Para 59) [327-C]
2.9 In this day and age of fast paced development, it is
completely understandable for the State Government to want to
acquire lands to set up industrial units. What, however, cannot
be lost sight of is the fact that when the brunt of this 'development'
is borne by the weakest sections of the society, more so, poor
agricultural workers who have no means of raising a voice against
the action of the mighty State Government, as is the case·in the
instant fact situation, it is the onerous duty of the State
Government to ensure that the mandatory procedure laid down
under the Act and the Rules framed thereunder are followed
scrupulously otherwise the acquisition proceedings will be
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rendered void ab initio in law. Compliance with the provisions of
the Act cannot be treated as an empty formality by the State
Government, as that would be akin to handing over the eminent
domain power of State to the executive, which cannot be permitted
in a democratic country which is required to be governed by the
rule of law. It is also a well settled principle of law that if the
manner of doing a particular act is prescribed under any statute
the act must be done in that manner or not at all. [Para 63] (328E-G; 330-D]
2.10 In the instant case, what makes the acquisition
proceedings perverse is that the proper procedure as laid down
under Part VII of the Land Acquisition Act read with Rules was
not followed by the State Government. The acquisition of land for
and at th~ instance of the Company was sought to be disguised
as acquisition of land for 'public purpose' in order to circumvent
compliance with the mandatory provisions of Part VII of the Land
Acquisition Act. This action of the State Government "is grossly
perverse and illegal and void ab in~tio in law and such an exercise
of power by the State Government for acquisition of lands cannot
be allowed under any circumstance. If such acquisitions of lands
are permitted, it would render entire Part VII of the Land
Acquisition Act as nugl;ltory and redundant, as then virtually every
acquisition of land in favour of a Company could be justified as
one for a 'public purpose' on the ground that the setting up of
industry would generate employment and promote socio-economic
development in the State. That could not have been the intention
of the legislature in providing the provisions of Part VII read
with s.3(f) of the Land Acquisition Act. [Para 64] (331-A-D]
2.11 From a perusal of the materials on record it becomes
clear that in the instant case, the lands in question were acquired
by the State Government for a particular Company, at the instance
of that Company. Further, the exact location and site of the land
was also identified by Company. Even the notifications ,issued
under Sections 4 and 6 of the Act clearly state that the land in
question was being acquired for the 'Small Car Project' of the
Company. In view of the foregoing reasons, by no stretch of
imagination can such an acquisition of lands be held to be one for
'public purpose' and not for a Company. [Para 64] [331-D-F)
KEDAR NATH YADAV v. STATE OF WEST BENGAL' & ORS.
269
2.12 Admittedly, the procedure for acquisition as
contemplated under Sections 39, 40 and 41 of Part VII of the Act
read with Rules 3, 4 and 5 of the Land Acquisition (Companies)
Rules, 1963 has not been followed, as the acquisition was sought
to be guised as one for 'public purpose' under Sections 3(f) (iii),
(iv) and (vii) of the Act. The acquisition of land in the instant case
in favour of the Company is thus, improper for not following the
mandatory procedure prescribed under Part VII of the Act and
Rules and therefore the acquisition proceedings are liable to be
quashed. [Para 65) [332-A-B]
S. Pratap Singh v. State of Punjab AIR 1964 SC 72 :
1964 SCR 733 - followed.
Devender Pal Singh v. State. of Punjab 2007 (11)
SCR 475 : (2008) 1 sec 728; R. L. Arora V. State of
U.P. AIR 1962 SC 764 : 1962. Suppl. SCR 149;
Valjibhai Muljibhai Soneji v. State of Bombay & Ors.
AIR 1963 SC 1890 : 1964 SCR 686; Calcutta State
Road Transport Corporation v. Commissioner of Income
Tax, West Bengal 1996 (3) SCR 50 : (1996) 8 SCC
758; S. Sundaram Pillai & Ors. v. R. Pattabiraman &
Ors. 1985 (2) SCR 643 : (1985) 1 SCC 591; Royal
Orchid Hotels Ltd. v. G. Jayaram Reddy & Ors. 2011 .
(11) SCR 701 : (2011) 10 SCC 608; Raghubir Singh
Sherawat v. State of Haryana and O:s. 2011 (14) SCR
1113 : (2012) 1 SCC 792; Surinder Singh Brar & Ors.
v. Union of India 2012 (12) SCR 1077 : (2013) 1 SCC
403; State of Punjab v. Gurdial Singh 1974 AIR 1871:
1974 (3) SCR 657; Babu Verghese & Ors. v. Bar
Council Of Gerald & Ors. 1999 (1) SCR 1121: (1999)
3 sec 422 - relied on.
Pandit Jhandu Lal v. State of Punjab (1961) 2 SCR
459; Somawanti v. State of Punjab AIR 1963 SC 151 :
1963 SCR 774; Jage Ram v. State of Haryana 1971 (3)
SCR 871 : 1971 (1) SCC 71; Ajlatoon v. Lt. Governor
of Delhi 1975 (1) SCR 802 : (1975) 4 sec 285;
Pratibha Nema v. State of M.P. 2003 (1) Suppl.
SCR 890 : {2003) 10 SCC 626 ..- distinguished.
Amarnath Ashram Trust Society & Anr. v. Governor of ·
U.P. & Ors. 1997 (6) Suppl. SCR 143: (1998) 1 SCC
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591; Chaitram Verma and Ors. v. Land Acquisition
Officer, Raipur and Ors. A.I.R. 1994 MP 74; Pooran
and Ors. v. State of U.P. and Ors. 2010 Supp All. L.J.
1; Mandir Shree Sita Ramji v. Land Acquisition Collector
& Ors. 2005 (2) Suppl. SCR 969 : (2005) 6 SCC 745;
Usha Stud and Agricultural Farms Pvt. Ltd. v. State of
Haryana & Ors. 2013 (5) SCR 645 : (2013) 4 SCC
210 - referred to.
3.1 From a perusal of the materials on record and original
acquisition files, it is evident that a large number of objections
were filed by the land owners before the notification was issued
under Section 4 of the Act. The same were not considered
properly under Section 5-A (2) of the Act. Notices were issued to
the objectors individually but the same could not be served upon
the owners/cultivators of the proposed lands to be acquired. [Para
68] [333-C-D]
3.2 Even though the land owners/cultivators did not appear
before the Land Acquisition Collector, the objections filed by them
ought to have been considered objectively by him as required
under Section 5-A (2) of the Act. Additionally, seven objections
were filed under Section 5-A itself and some of the objections
pertained to persons who were already running industrial units.
[Para 68] [333-F-G]
3.3 Some of these objectors were not given the opportunity
to be heard as required under Section 5-A (2) of the Act. The
same ought to have been given to them as required both under
the statutory provisions of the Act as well as the principles of
natural justice, as the acquisition of lands of the objectors would
entail a serious civil consequence. [Para 69) [334-B-C]
Mandir Shri Sita Ramji v. Lt. Governor of Delhi 1975
(1) SCR 597 : (1975) 4 SCC 298 - followed.
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Babu Ram v. State of Haryana 2009 (14) SCR 1111 :
(2009) 10 sec 115 - relied on.
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3.4 From a perusal of the proceedings before the Collector,
which are made available to this C011rt, it becomes clear that the
same have been rejected without assigning any clear reasons or
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS.
271
application of mind. Thus, the report of the Collector is not a
valid report in the eyes of law. The State Government has
mechanically accepted the same without application of mind
independently before issuing notification under Section 6 of the
Land Acquisition Act declaring that the lands are required for
establishment of automobile industry by the Company. [Paras 70,
71) [335-D-F)
4.1 After issuing the notifications under Section 6 of the
Land Acquisition Act declaring that the lands have been acquired
for the purpose of industrial development, a statutory duty is cast
upon the Collector to issue notice to the land owners/cultivators,
as required under Section 9 of the Land Acquistion Act, to
determine the market value of the acquired land and award
compensation as required under Section U of the Land Acquistion
Act which is mandatory for taking possession of the land by the
State Government. [Para 72) [335-G]
4.2 It is evident from material on record that no individual
notices were served upon the land owners/cultivators. A joint
inquiry appears to have been conducted by the Land Acquisition
Collector without giving them an adequate opportunity to
establish their claim for determination of reasonable
compensation for acquisition of lands by presenting true and
correct market value of the lands. The determination of market
value of lands by clubbing a number of cases together and passing
a composite award is no award in the eyes of law. The inquiry, as
contemplated under Section 11 of the Land Acquistion Act, is a
quasi judicial exercise of power on the part of the Collector in
awarding just and reasonable compensation to the landowners/
cultivators. That has not been done in the instant case. Further,
the proviso to Section 11(1) of the Land Acquistion Act provides
that no award shall be made by the collector without the previous
approval of either the appropriate Government or such officer
authorised by it for the above purpose. It was also brought to
the notice of this Court that supplementary awards were also
passed which is not legally permissible in law. For non-compliance
of the above provisions of the Land Acquistion Act, the composite
awards are vitiated in law and therefore, the same are also liable
to be quashed. [Para 73) [336-A-D)
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Per ARUN MISHRA, J: (Partly concurring) HELD: 1.1
"Public purpose" has been defined in section 3(1) of the Land
Acquisition Act. The definition is inclusive and the Amendment
Act, 1984 excludes the acquisition for Company from the definition
of "public purpose". Acquisition of land for Company has been -
dealt with under Part VII of the Act. Under section 39 previous
consent of the appropriate Government and execution of
agreement is necessary for acquiring land for a Company. Both
sections 6 to 16 and sections 18 to 37 shall not be used to acquire
land for any Company under Part VII unless the previous consent
of the appropriate Government has been obtained and Company ·
has executed the agreement as provided in section 41 of the Act.
Section 41 further provides that in the case of acquisition for a
Company the payment of the cost of acquisition has to be borne
by the Company and other matters as specified in section 41 are
also to be provided in the agreement. Such an agreement is
required to .be published in the Official Gazette and a statutory
force is given to its terms on which the public shall be entitled to
use the work. [Para 4] [336-H; 337-A-C]
1.2 Section 3(f) though excludes the acquisition for a
Company. However, at the same time it is inclusive definition
and it is provided in section 3(1) that it includes the provision for
development ofland from public funds in pursuance of any scheme
or policy of the Government and subsequent disposal thereof in
whole or in part by lease, assignment or outright sale with the
object of securing further development as planned. Public purpose
in section 3(iv) also includes the provision ofland for a corporation '
owned or controlled by the State. The West Bengal Industrial
Development Corporation is established by the State. [Para 5]
[337-D]
1.3 Public purpose has to be adjudged in the background
of the facts of the instant case and the State of West Bengal
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decided to make effort to establish manufacturing industries with
a view to attract more private sector investment and foreign
direct investment for industrialization at par with the model
adopted by other progressive States. It has considered the offer
of Company - manufacturer of Nano car - as an opportunity for
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establishing manufacturing industry so as to further grab attention
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS.
of automobile industry in the State of West Bengal to boost its
economy for creating job opportunities, direct and indirect impact
on secondary employment in the associated services. The
proceedings were initiated under the Act and the West Bengal
Industrial Development Corporation (WBIDC) was the acquiring
body which bore the entire cost of acquisition. [Para 6) [337-E-G]
1.4 It is apparent from the provisions contained in second
proviso to section 6 that declaration under section 6 shall not be
made unless the compensation to be awarded for such property
is to be paid by a Company either wholly or partly out of public
revenues or some fund controlled or managed by a local authority.
The Explanation second to section 6(1) of the Act makes it clear
that where the compensation awarded for the property is to be
paid out of funds of a corporation owned or controlled by the
State, such compensation shall be deemed to be compensation
paid out of public revenue. Thus Explanation second makes it
clear that when corporation pays the funds for acquisition of the
property that such compensation shall be deemed to be paid out
of public revenue. Therefore, the acquisition for a corporation is
indeed within the public purpose as defined in section 3(t)(iv).
Thus the concept of funds in section 6 as amended in 1984 comes
into play in the case of acquisition of a land for a corporation and
it is not necessary that the State Government itself should bear
the cost of acquisition so as to make it expenditure out of public
revenue even expenditure by the corporation owned or controlled
by the State for acquisition shall be deemed to be made out of
public revenues and when the land had been acquired for a
corporation the land is to be vested in the Corporation though
lease of the land has been granted to the Company for its aforesaid
project. It would remain acquisition for a public purpose as
provided in section 3(t) of the Act.
[Para 6) [339-D-H]
1.5 Acquisition of land for establishing such an industry
would ultimately benefit the people and the very purpose of
industrialization, generating job opportunities hence it would be
open to the State Government to invoke the provisions of Part II
of the Act. When Government wants to attract the investment,
create job opportunities and aims at the development of the State
and secondary development, job opportunities, such acquisition
is permissible for public purpose. [Para 7] [340-A-B)
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Somawanti v. State of Punjab AIR 1963 SC 151: 1963
SCR 774; Jage Ram & Ors. v. State of Haryana & Ors.
(1971) 1 SCC 671 : 1971 (3) SCR 871; Narayan
Govind Gavate v. State of Maharashtra (1977) 1 SCC
133 : 1977 (1) SCR 763; Arnold Rodricks v. State of
Maharashtra (1966) 3 SCR 885; Sooraram Pratap
Reddy & Ors. v. District Collector, Ranga Reddy District
& Ors. (2008) 9 sec 552 : 2008 (13) SCR 126;
National Textile Workers' Union v. P R. Ramakrishnan
& Ors. (1983) 1 SCC 228 : 1983 (1) SCR 922; Nand
Kishore Gupta v. State of Uttar Pradesh and Ors. (2010)
10 SCC 282 : 2010 (11) SCR 356 - relied on.
State of Bombay v. Ali Gu/shall' AIR 1955 SC 810 :
1955 SCR 867; Dau/at Singh Surana & Ors. v. First
Land Acquisition Collector & Ors. (2007) 1 SCC 641 :
2006 (8) Suppl. SCR 1076; Pandit JhanduLal v. State
of Punjab AIR 1961 SC 343 : 1961 SCR 459- referred
to.
Susette Keio v. City of New London 162 L.Ed 439 =
545 US 469; Samuel Berman v. Andrew Parker, 99 L.Ed
27 - referred to.
1.6 A conjoint reading of the provisions contained in
sections 3(t), 6, other provisions of Part II and the provisions
contained in Part VII of the Act makes it Clear that there can be
an acquisition for public purpose and ultimately land may go on
lease or other mode of transfer to a company and in case the
p
compensation is paid out of public revenue, it would be an
a~quisitiOJ! for a public purpose under Part n and ig. case
compensation is borne as per the agreement provided in section
41, it would be an acquisition under Part VII of the Act. Though
acquisition for public purpos,, can also be for the purpose of
industrialization or for a company in case setting up of the company
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has a public purpose behind it as provided in section 3(t) and
payment of compensation for acquisition of land is made out of
. public revenue as per the provisions of section 6 as amended in
1984. [Para 15) [365-G-H; 366-A-BJ
Babu Barkya Thakur v. State of Bombay, AIR (1960)
H
SC 1203; Pandit Jhandu Lal v. State of Punjab, AIR
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS.
275
(1961) SC 343 : 1961 SCR 459; RL. Arora v. State of
Uttar Pradesh (1962) Supp. 2 SCR 149; Somawanti v.
State of Punjab (1963) 2 SCR 774; Jage Ram & Ors. v.
State of Haryana & Ors. (1971) 1 sec' 671 : 1971 (3)
SCR 871; Indrajeet C. Parekh v. State of Gujarat
(1975) 1 SCC 824; Aflatoon v. Lt. Governor of Delhi
_(1975) 4 SCC 285 : 1975 (1) SCR 802; Bai Malimabu
v. State of Gujarat & Ors. (1978) 2 SCC 373; Manubhai
Jethalal Patel v. State of Gujarat (1983) 4 SCC 553;
Srinivasa Cooperative House Building Society Ltd.- v.
Madam Gurumurthy Sastry & Ors. (1994) 4 SCC 675;
Mandir Sita Ramji v. Land Acquisition Collector & Ors.,
(2005) 6 SCC 745 : 2005 (2) Suppl. SCR 969; Amarnath
Ashram Trust Society & Am: v. Governor of UP. & Ors.
(1998) 1 SCC 591 : 1997 (6) Suppl. SCR 143; Pratibha
Nema & Ors. v. State of MP. & Ors. (2003) 10 SCC
626 : 2003 (1) Suppl. SCR 890 - relied on.
1.7 The existence or non-existence of a public purpose is
not a primary distinguishing factor between the acquisition under
Part II and acquisition finder Part VII. The real point of distinction
seems to be the source of funds to cover the cost of acquisition.
The second proviso to section 6-(1) is the main driving ground
for the two types of acquisitions. The amendment made in 1984
in section 6 does not deal with the concept of token consideration
for such acquisition paid out of the public revenues. The second
provision to section 6(1) makes it clear that where the
compensation to be awarded for such property is to be paid out
of the funds of the corporation, it is deemed to be compensation
paid ouf of public revenue. Section 6 requires compensation
determined to be paid out of the funds of the corporation then it
would be deemed to be expenditure out of public revenue to
make it acqui_sition under Part II. In the instant case corporation
has paid entire compensation. It is not a case of token amount
paid out of public revenue. [Para 20) [380-C-E]
Devinder Singh & Ors. v. State of Punjab & Ors. (2008)
1 SCC 728 : 2007 (11) SCR 475 - referred to.
1.8 When an application is filed by a company for acquisition
bu~ the decision of the State has to be seen how -it intended to
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deal with sucJ. a prayer, is a relevant factor. In case of public
purpose the ilCquisition could be made at public expense.
Therefore, evidently the provisions made in Part II shall be
resorted to. On the other hand if the State forms an opinion that
acquisition may not be for public purpose then the State would
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not bear the expenses and then the procedure laid down in .Part
VII shall be resorted to. [Para 21] [380-F-G]
Sooraram Pratap Reddy & Ors. v. _District Collector,
Ranga Reddy District & Ors. (2008) 9 SCC 552 : 2008
(13) SCR 126; Urmila Roy & Ors. v. Bengal Peerless
Housing Development Co. Ltd. & ·ors. (2009) 5 SCC
242 : 2009 (4) SCR 834; Nand Kishore Gupta & Ors.
v. State of U.P. & Ors. (2010) 10 SCC 282 : 2010 (11)
SCR 356 - relied on.
1.9 For the purpose of acquiring land in the instant case it
was not necessary to have recourse to the provisions contained
in Chapter VII of the Act. The proposal submitted to the Cabinet
ou 30.5.2006 indicates that the West Bengal Industrial
Development Corporation (WBIDC) was the acquiriug body. Thus
the Cabinet has approved the said proposal. WBIDC was
associated with the project right from the begiuning and was
instrumental iu getting the land identified by the Company for
the purpose of selection. The memo for the Standiug Committee
of the Cabinet on Industry dated 26.7.2006 contains the decision
of acquisition of land for public purpose under Land Acquisition
Act. Notification under section 4 of the Act was published in the
Gazette on 21. 7.2006 in which it was mentioned that the land is
likely to be needed by the Government/Government undertaking/
Development Authorities at the public expense for public
purpose, viz., employment generation and socio-economic
development of the area by setting up small car project. Though
it was not specifically mentioned that the WBIDC is to be the
G acquiring body but a decision had already been taken in this regard
and the aforesaid expression Government Undertaking/
Development authorities would include acquisition by WBIDC
as the Government has decided to treat it as a public purpose as
it was to generate direct employment to 1800 persons and by
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direct employment through vendors and through other service
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS.
277
providers to 4700 persons approi. [Para 25] [398-E-F; 399-D-F]
A
1.10 Similar is the position with respect to declaration under
section 6 of the Act. As the Government has treated the
acquisition for a public purpose and the entire money has been
paid by WBIDC consequently by mere mention that the land was
required for the small car project of the Company would not make
it an acquisition for a company under Part VII. Non-mention of
WBIDC cannot be taken to be an illegality impinging the validity
of the notification under section 4 of the Act. The fact that the
application was filed by the Company indicating its willingness
for setting up the industry would not also make it an acquisition
for a company but how the State has dealt with the same, would
be the decisive factor. Since WBIDC was involved right from the
beginning by the State Government and a decision was taken by
the State Government that WBIDC would be the acquiring
authority and WBIDC was involved in identification of the land
and the reports were submitted by it to the Government, the
acquisition was for WBIDC is apparent as the land was to vest in
the WBIDC and it has paid the compensation. Payment of premium
amount as per the conditions of lease agreement fastened upon
the Company would also not make it a compensation paid by the
Company. It was not necessary for the State Government to
deposit the amount of compensation as compensation paid by
the corporation is also to be treated out of public revenue. [Para
25] [399-F-H; 400-A-C]
1.11 The aims and objects of the amendment of section
3(f) when taken into consideration would not alter the aforesaid
position of law. Acquisition of land for a company or for
industrialization if it is for public purpose would be covered under
section 3(f) as amended and when corporation is the acquiring
authority and amount of compensation is borne by it in entirety
and land has been ultimately leased out to the Company for its
project by it the acquisition would remain for a public purpose
under section 3(t) attracting Part II of the Act. The procedure
adopted under Part II cannot be said to be impermissible. It
cannot be said to be acquisition under guise of public purpose so
as to violate the intendment of exclusion of the company from
section 3(f) as amended. [Para 26] [400-C-E]
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2. Various decisions rendered by this Court in postamendment period are binding on a Co-ordinate Bench and there
is no reason to take a different view on merits. Even otherwise
the Court is bound by the principle of stare decisis in view of the
consistent decisions of this Court. The rule of stare decisis requires
that it is unnecessary to enquire or determine as to what was the
rationale of the earlier decision which is said to operate as stare
tlecisis. The doctrine of binding precedent has the merit of
promoting certainty and consistency in judicial decisions. The
doctrine is based on 'public policy' and should be adhered to
subserve the ends of justice. The doctrine has the merit of
promoting certainty and consistency in judicial decisions, and
enables ·an organic development of the law, besides providing
assurance to the individual as to the consequence of transactions
forming part of daily affairs. The view which has held the field for
a long time should not be disturbed only because another view is
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possible. The decision of two Judges is binding on another
Division Bench of two Judges. A Co-ordinate Bench should not
disturb the decision on an identical question. The rationale of
this rule is the need for continuity, certainty and predictability in
the administration of justice. It is necessary to inculcate confidence
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in the administration of justice. It cannot be referred to a larger
Bench unless there is an error apparent on its face or that a
particular earlier· decision was not noticed, which has a direct
bearing or has taken a contrary view. In reviewing and revising
its earlier decision, in the interests of the public good or for any
other valid and compulsive reasons, it must be the constant
endeavour and concern of this Court to introduce and maintain
an element of certainty and continuity in the interpretation of
law.
[Paras 27, 28) (400-F-H; 401-A-D, F-H; 402-A)
Waman Rao v. Union of India (1981) 2 SCC 362 : 1981
(2) S~R 1; Union of India v. Raghubir Singh (1989) 2
SCC 754 : 1989 (3) SCR 316; Krishena Kumar v. Union
of India (1990) 4 SCC 207 : 1990 (3) SCR 352; lvlishri
Lal V. Dhirendra Nath (1999) 4 sec 11 : 1999
(2) SCR 453; Central Board of Dawoodi Bohra
Community v. State of Maharashtra (2005) 2 SCC 673
: 2004 (6) Suppl. SCR 1054; Shanker Raju v. Union of
India (2011) 2 SCC 132 : 2011 (2) SCR 1; Fida Hussain
KEDAR NATH YADAV v. STATE OF WEST BENGAL & ORS.
v. Moradabad Development Authority & Am: (2011)
12 SCC 615 : 2011 (9) SCR 290; Union of India v.
Paras Laminates (P) Ltd. (1990) 4 SCC 453; Joint
Commissioner of Income Tax, Surat v. Saheli Leasing
and Industries Ltd. (2010) 6 SCC 384 : 2010
(6) SCR 747; The Keshav Mills Co. Ltd. v. CIT, AIR
1965 SC 1636 : 1965 SCR 908 - relied on.
3.1 Even before issuance of notification under section 4 of
the Act decision has been taken to acquire the land in question.
The notification under section 4 is an introductory measure. [Para
31) [402-C-D]
3.2 It is apparent from section 4(2) that after notification is
issued it shall be lawful for any officer to enter upon and survey
and to do all the acts which are necessary to ascertain whether
land is adapted for such purpose. The notification is of exploratory
character and it does not proprio motu result in acquisition. The
proposal for acquisition in any particular locality ripens into
definite proceedings where Government is satisfied how land is
needed for public purpose. Section 4(1) does not require land to
be defined or identified but requires locality to be stated so as to
file objection under section 5 of the Act. In the instant case the
Cabinet has taken a decision to acquire the said land beforehand
for which a notification has ultimately been issued under sections
4 followed by declaration under section 6 of the Act. The right
under section SA of the Act is a valuable right. [Para 32) [403-DE]
Raghubir Singh Sherawat v. State of Haryana & Ors.
(2012) 1 SCC 792 : 2011 (14) SCR 1113; Surfnder
Singh Brar & Ors. v. Union of India & Ors. (2013) 1
SCC 403 : 2012 (12) SCR 1077; (}ojer Brothers Private
Ltd. & Anr. v. State of West Bengal & Ors. (2013) 16
· SCC 660 : 2013 (12) SCR 489; Usha Stud &
Agricultural Farms (P) Ltd. v. State of Haryana (2013)
0
4 SCC 210 : 2013 (5) SCR 645; Sharma Agro Industries
v. State of Haryana & Ors. (2015) 3 SCC 341; Vinod
Kumar v. State of Haryana & Ors. '(2014) 3 SCC 203;
Gurbinder Kaur Brar & Anr. v. Unioil of India & Ors.
(2013) 11 · sec 228 - relied on.
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3.3 In the instant case it is apparent from the report that
there is no objective consideration of objections at any stage.
The inquiry held and ~he report sent under section 5A of the Act
was clearly influenced by the decision of the Cabinet taken before
issuance of notification under section 4 of the Act to acquire land
in certain J L numbers in particular mouza's as per the choice of
location by the Company which has prevailed whereas in the
matter of acquisition of such vast area comparative fertility aspect
of chunk of land to be selected ought to have been considered
and land which is more or less barren ought to have been
p,referred which exercise has not been resorted to. Though the
State Government could have taken decision before issuance of
notification under section 4 for setting up of project however it
could not have taken decision to acquire particular land in various
mouza 's before survey is undertaken as authorized by the
provisions contained in section 4 of the Act, the action of the
State has the effect of frustrating very purpose of holding inquiry
under section 5A. The inquiry_ held under section 5A is a farce
and an eyewash neither the Collector nor State Government
considered the matter with objectivity as mandated.