# NANO KISHORE GUPTA & ORS v. STATE OF U.P. & ORS

- **Citation:** [2010] 11 S.C.R. 356
- **Court:** Supreme Court of India
- **Decided:** 2010-09-08
- **Case number:** Civil Appeal No. 7468 of 2010
- **Bench:** V.S. Sirpurkar, Cyriac Joseph
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/nano-kishore-gupta-ors-v-state-of-u-p-ors-26371
- **Pages:** 48

## Headnote

Land Acquisition Act, 1894- s. 4(1) r!w. ss. 17(1) and (4);
s. 6(1) rlw ss. 17(1) and (4); s. 5A and Parts II and VII -
C Acquisition of land on urgent basis for a project of
development and construction of Expressway- Project granted
to a company -
Validity of acquisition under Part II and
validity of invoking urgency provision dispensing with enquiry
uls. 5A - Held: acquisition of the land under Part II was correct
o as the same was for the public purpose and was not for a
private company - In the facts and circumstances of the case,
the acquisition cannot be said to be a colourable exercise of
power -
The Government only used the company for
implementing its policy - Invocation of urgency provision ul
E
s. 17(1) and (4) and dispensing with enquiry uls. 5A was also
necessary in view of the facts of the case - Constitutionalism
- Colourable exercise of power.
F
In the year 2001 Taj Expressway Industrial
Development Authority [which was later named as
Yamuna Expressway Industrial Development Authority
(YEIDA)] was constituted under the U.P. Industrial Area
Development Act, 1976, with intent to develop the eastern
side of the river Yamuna by construction of a 6 lane
Expressway joining Noida and Agra. Tenders were
G
issued inviting bids from interested parties desirous of
implementing the project. Respondent No.5-company
(the successful bidder) was given the project work.
Concession Agreement was executed between the
H
parties in 2003. The project was challenged before High
356
NANO KISHORE GUPTA & ORS. v. STATE OF U.P. & 357
ORS.
Court in Public Interest Litigation. Commission of Enquiry
A
was also appointed by the State which submitted its
report. Ultimately, the PIL was dismissed by the High
Court.
Thereafter, the notification was issued by the State
8
Government u/s. 4(1) r/w. ss. 17 (1) and 17 (4) of the Land
• Acquisition Act, 1894 for the purpose of the C()nstruction
of the interchange under the Yamuna Expressway Project
through Yamuna Expressway Industrial Development
Authority. Ultimately, the State issued notification u/s. 6(1)
C
r/w. ss. 17(1) and 17(4) of the Act. Writ petitions were filed
challenging the acquisition. The High Court dismissed the
writ petitions.
In the instant appeals, the following were the main
questions which arose for consideration:
D
1.
The acquisition could not be said to be for the
public purpose:
(a)
as the object of the acquisition was not
covered by the definition of 'public purpose' in
E
Section 3(f) of the Land Acquisition Act, 1894;
(b)
the acquisition must be considered to be
under Part VII of the Act and not under Part II,
since it virtually amounted to acquisition of
F
land for a private person i.e. respondent No.5;
(c)
as the compensation for the land acquisition
was coming wholly from respondent No. 5 and
not from the Government or from YEIDA, it was
G
not an acquisition for public purpose;
(d)
the acquisition for the so-called interchange
was not at all necessary and it was actually a
colourable exercise of powers.
H
358
SUPREME COURT REPORTS
[2010] 11 S.C.R.
A
2.
Sections 17(1) and 17(4) of the Land
Acquisition Act were not applicable and,
therefore, the Government could not have
dispensed with the enquiry u/s. 5A of the Act.
B
Dismissing the appeals, the Court
HELD: 1.1. The High Court was right in holding that
the acquisition was made for the public purpose. The
High Court has considered the question of public purpose
keeping in mind the correct principles of law. Therefore,
C it cannot be said that the acquisition was not for the
public purpose. [Para 37) [396-A-C]
1.2. The High Court rightly found that the acquisition
was not for the Company but was for the public purpose.
0
The Expressway is a work of immense public importance.
The State gains advantages from the construction of an
Expressway and so does the general public. Creation of
a corridor for fast moving traffic resulting into curtailing
the traveling time, as also the transport of the goods,
E would be some factors

## Text

_Characters 0–39,998 of 98,073. This is a partial read: ask again with offset=39998 for what follows._

A
B
[2010] 11 S.C.R. 356
NANO KISHORE GUPTA & ORS.
v.
STATE OF U.P. & ORS.
(Civil Appeal No. 7468 of 2010)
SEPTEMBER 8, 2010
[V.S. SIRPURKAR AND CYRIAC JOSEPH, J.J.]
Land Acquisition Act, 1894- s. 4(1) r!w. ss. 17(1) and (4);
s. 6(1) rlw ss. 17(1) and (4); s. 5A and Parts II and VII -
C Acquisition of land on urgent basis for a project of
development and construction of Expressway- Project granted
to a company -
Validity of acquisition under Part II and
validity of invoking urgency provision dispensing with enquiry
uls. 5A - Held: acquisition of the land under Part II was correct
o as the same was for the public purpose and was not for a
private company - In the facts and circumstances of the case,
the acquisition cannot be said to be a colourable exercise of
power -
The Government only used the company for
implementing its policy - Invocation of urgency provision ul
E
s. 17(1) and (4) and dispensing with enquiry uls. 5A was also
necessary in view of the facts of the case - Constitutionalism
- Colourable exercise of power.
F
In the year 2001 Taj Expressway Industrial
Development Authority [which was later named as
Yamuna Expressway Industrial Development Authority
(YEIDA)] was constituted under the U.P. Industrial Area
Development Act, 1976, with intent to develop the eastern
side of the river Yamuna by construction of a 6 lane
Expressway joining Noida and Agra. Tenders were
G
issued inviting bids from interested parties desirous of
implementing the project. Respondent No.5-company
(the successful bidder) was given the project work.
Concession Agreement was executed between the
H
parties in 2003. The project was challenged before High
356
NANO KISHORE GUPTA & ORS. v. STATE OF U.P. & 357
ORS.
Court in Public Interest Litigation. Commission of Enquiry
A
was also appointed by the State which submitted its
report. Ultimately, the PIL was dismissed by the High
Court.
Thereafter, the notification was issued by the State
8
Government u/s. 4(1) r/w. ss. 17 (1) and 17 (4) of the Land
• Acquisition Act, 1894 for the purpose of the C()nstruction
of the interchange under the Yamuna Expressway Project
through Yamuna Expressway Industrial Development
Authority. Ultimately, the State issued notification u/s. 6(1)
C
r/w. ss. 17(1) and 17(4) of the Act. Writ petitions were filed
challenging the acquisition. The High Court dismissed the
writ petitions.
In the instant appeals, the following were the main
questions which arose for consideration:
D
1.
The acquisition could not be said to be for the
public purpose:
(a)
as the object of the acquisition was not
covered by the definition of 'public purpose' in
E
Section 3(f) of the Land Acquisition Act, 1894;
(b)
the acquisition must be considered to be
under Part VII of the Act and not under Part II,
since it virtually amounted to acquisition of
F
land for a private person i.e. respondent No.5;
(c)
as the compensation for the land acquisition
was coming wholly from respondent No. 5 and
not from the Government or from YEIDA, it was
G
not an acquisition for public purpose;
(d)
the acquisition for the so-called interchange
was not at all necessary and it was actually a
colourable exercise of powers.
H
358
SUPREME COURT REPORTS
[2010] 11 S.C.R.
A
2.
Sections 17(1) and 17(4) of the Land
Acquisition Act were not applicable and,
therefore, the Government could not have
dispensed with the enquiry u/s. 5A of the Act.
B
Dismissing the appeals, the Court
HELD: 1.1. The High Court was right in holding that
the acquisition was made for the public purpose. The
High Court has considered the question of public purpose
keeping in mind the correct principles of law. Therefore,
C it cannot be said that the acquisition was not for the
public purpose. [Para 37) [396-A-C]
1.2. The High Court rightly found that the acquisition
was not for the Company but was for the public purpose.
0
The Expressway is a work of immense public importance.
The State gains advantages from the construction of an
Expressway and so does the general public. Creation of
a corridor for fast moving traffic resulting into curtailing
the traveling time, as also the transport of the goods,
E would be some factors which speak in favour of the
Project being for the public purpose. The creation of the
five zones for industry, residence, amusement etc., would
be complimentary to the creation of the Expressway. The
creation of land parcels would give impetus to the
F
industrial development of the State creating more jobs
and helping the economy and thereby helping the general
public. There can be no doubt that the implementation of
the Project would result in coming into existence of five
developed parcels/centers in the State for the use of the
citizens. There shall, thus, be the planned development
G of this otherwise industrially backward area. The creation
of these five parcels would certainly help the maximum
utilization of the Expressway and the existence of an
Expressway for the fast moving traffic would help the
industrial culture created in the five parcels. Thus, both
H
NANO KISHORE GUPTA & ORS. v. STATE OF U.P. & 359
ORS.
will be complimentary to each other and can be viewed
as parts of an integral scheme. Therefore, it cannot be
said that it is not a public purpose. [Para 30] [386-C-H;
387-A-B]
1.3. It is also to be seen that this was not a case
where the exercise of power of eminent domain by the
State was for any of the purposes set down in Section
40 of the Act. Further, it is not as if the power of
acquisition was exercised by the State Government for
the work or Project of the Company. Lastly, it is not a case
where the power of exercise was exercised by the State
Government so that the acquired land was to belong or
vest permanently in the Company for its own purpose.
The lease was going to be for 90 years after which the
whole land was going to revert back to the State
Government, so also the whole land acquired and used
actually for the purpose of the highway would also go
back to the State after the period of 36 years, during
which the Company would have the right to levy and
collect the toll. It is not as if a public purpose is relevant
in Part VII, where under Section 39, the previous consent
of appropriate Government is required for execution of
an agreement between the Government and the
Company. Section 40 of the Act then puts a specific rider
that the State Government shall not give the consent
unless it is satisfied of any of the contingencies
described in sub-Sections (a), (aa) and (b) thereof. Thus,
even when the acquisition is meant for a Company, the
concept of public purpose has to be at the back of mind
of the acquiring body like Government. [Para 29) [383-H;
384-A-D; 385-8)
1.4. In the instant case, there is no question of any
agreement with the Company as the three eventualities
described u/s. 40 of the Act are not available for the
simple reason that the basic idea for the acquisition under
A
B
c
D
E
F
G
H
360
SUPREME COURT REPORTS
[2010) 11 S.C.R.
A Part VII of the Act is the total transfer of the ownership of
the acquiring land in favour of the Company. That is
obviously not present. There is no factual background for
holding that any agreement was contemplated in
between the State Government and the Company or for
B that matter, YEIDA and the Company, as envisaged in
Sections 39, 40 and 41 of the Act. There is absolutely no
evidence to suggest that this is an acquisition for the
Company, basically on account of the fact that the
acquired land is not to vest with the Company. This was
C clearly a Project conceived and justified by the State
Government, while the concessionaire was to be chosen
only to implement the Project. The Project was going to
be implemented on the basis of principles of BOT.
Therefore, after the operating period was over, the assets
D of the Project were to be transferred to the State
Government. There was going to be no vesting of land
as in case that if the acquisition was being effected under
Part VII of the Act. The High Court, has correctly come to
the conclusion that the acquisition was not meant only
E for the Company and on that count, it could not be said
that this is not for the public purpose. [Para 29) [385-8H]
1.5. It is not correct to say that the Company has paid
the compensation cost and, therefore, the acquisition is
F clearly covered under Part VII of the Act, and there may
be no public purpose if the acquisition is made for the
Company and it is the Company who has to shell out the
whole compensation. Even if it is accepted that all this
compensation is coming from the Company, it should be
G borne in mind that the Company gets no proprietary or
ownership rights over the Project assets. If it is presumed
that the compensation is coming from the Company, then
it will have to be held that the whole assets would go to
the Company. At least that is envisaged in Part VII of the
H Act. In the instant case, that is not the case. The assets
NANO KISHORE GUPTA & ORS. v. STATE OF U.P. & 361
ORS.
are to revert back to the acquiring body or, as the case
A
may be, the Government. Even the lands which are utilized
for the construction of the Expressway are to go back to
the Government barely after 36 years i.e. after the
Company has utilized its rights to recover the toll on the
Expressway. Secondly, it must be, borne in mind that the
B
Concession Agreement has been ·executed in February,
2003, whereas the acquisitio'n process started
somewhere in the month of September, 2007. When the
Concession Agreement was executed, the cost factor was
not known. The acquiring body was only to make c
available the land to the concessionaire to implement the
Project. The State Government was to earn Rs.100/- per
hectare for the total acquired land, which was about 25
million square meters over and above the compensation
to be decided. The mention of the compensation amount 0
in addition to the lease money of Rs.100/- per hectare
would clearly provide that the whole compensation was
not going to be paid by the Company alone. This is apart
from the fact that through this agreement, only the extent
of the compensation payable by the Company to YEIDA
E
was decided. However, once all the amounts went to the
coffers of YEIDA, it would lose its independent character
as a premium. When it goes into the coffers of YEIDA, it
is the YEIDA who would make the payments of the
estimated compensation and thereby it would be as if the
compensation is paid not by the Company, but by YEIDA.
[Para 31] [387-C-H; 388-A-F]
F
1.6. At the time when the Project conceived in 2001,
the present Company was not in existence. It came in
existence only later on. This is an admitted position also. G
Therefore, it cannot be said that the whole Project was
envisaged keeping this Company in view. Besides, and
the fact that a full-fledged enquiry was got done by the
State by constituting a Commission of Enquiry also
cannot be ignored. The said Commission of Enquiry H
362
SUPREME COURT REPORTS
(2010] 11 S.C.R.
A submitted its Report in October, 2006 and it was duly
accepted by both the Houses of the Legislature of the
State of Uttar Pradesh. Again, the aspects of the
transparency have been examined by the Division Bench
of the High Court in a P.1.L., which was dismissed by a
B well-considered
judgment,
which
remained
unchallenged. Nobody has so far argued that any
specific partial treatment was offered to the Company nor
has it been pointed out at any stage that there was
anything amiss with the tendering process or that the
c tender of contract to the Company was a foregone
conclusion. Therefore, it cannot be said that this
acquisition was a colourable exercise of power. There
was a full transparency in the whole process and the
whole process was checked, rechecked and reD rechecked, leaving no scope to infer any bias in favour
of the Company. [Para 28] [382-G-H; 383-A-D]
State of Karnataka and Anr. vs. All India Manufacturers
Organizationand Ors. 2006 (4) SCC 683; Sooraram Pratap
Reddy and Ors. vs. District Collector, Ranga Reddy District
E and Ors. etc. etc. 2008 (9) sec 552; Pratibha Nema and Ors.
vs. State of M.P. and Ors. 2003 (10) sec 626, relied on.
Smt. Somavanti and Ors. vs. The State of Punjab and
Ors. AIR 1963 SC 151, distinguished.
Naihati Municipality and Ors. vs. Chinmoyee Mukherjee
and Ors. 1996 (10) SCC 632; Dhampur Sugar (Kashipur) Ltd.
vs. State of Uttaranchal and Ors. 2007 (8) SCC 418; Babu
Barkya Thakur vs. State of Bombay AIR 1960 SC 1203;
Pandit Jhandu Lal vs. State of Punjab AIR 1961 SC 343;
G Devinder Singh and Ors. vs. State of Punjab and Ors. 2008(1)
SCC 728; Jage Ram and Ors. vs. State of Haryana and Ors.
1971 (1) SCC 671; Shyam Behari and
Ors.vs. State of
Madhya Pradesh and Ors. AIR 1965SC 427, referred to.
·H
2.1. The challenge by the appellants on the ground
NANO KISHORE GUPTA & ORS. v. STATE OF U.P. & 363
ORS.
that there was no urgency and, therefore, the enquiry ul
A
s. 5-A of the Act should not have been dispensed with,
cannot be accepted. The High Court has taken meticulous
care in examining as to whether there was material
before the State Government to dispense with the enquiry
uls. 5A of the Act. In the instant Project, considering the
B
various reasons like enormousness of the Project,
likelihood of the encroachments, number of appellants
who would have required to be heard and the time taken
for that purpose, and the fact that the Project had lingered
already from 2001 till 2008, there was necessity to c
dispense with the enquiry uls. 5A of the Act. There is no
reason to take a different view than what is taken by the
High Court. [Paras 39 and 41] [401-F-H; 402-A-D; 403-C]
Tika Ram and Ors. etc. etc. vs. State of UP. and Ors.
etc. etc 2009 (10) sec 689, relied on.
Sheikhar Hotels Gulmohar Enclave and Anr. vs. State of
UttarPradesh and Ors. 2008 (14) SCC 716; First Land
Acquisition Collector and Ors. vs. Nirodhi Prakash Gangoli
and Anr. 2002 (4) SCC 160; State of Punjab and Anr. vs.
Gurdial Singh and Ors. 1980 (2) SCC 471; Om Prakash and
Anr. vs. State of U.P. and Ors. 1998 (6) SCC 1; Babu Ram
and Anr. vs. Sate of Haryana and Anr. 2009 (10) SCC 115;
Manju Lata Agrawal vs. State of UP. and Ors. 2007(9) ADJ
447 (DB); Sudhir Chandra Agrawal vs. State of UP. 2 0 0 8
(3) ADJ 289 (DB); Munshi Singh vs. State of UP. 2009 (8)
ADJ 360 (DB); Essco Fabs Pvt. Ltd. and Anr. vs. State of
Haryana and Anr. etc. etc. 2009 (2) SCC 377; Mahender Pal
and Ors. vs. Stateof Haryana and Ors.2009 (14) SCC 281 -
referred to.
2.2. It is not correct to say that the encroachment
issue was not a relevant factor for dispensing with
enquiry uls. 5A of the Act. In the instant case, the area to
be acquired for the Expressway alone was more than
D
E
F
G
H
364
SUPREME COURT REPORTS
(201 OJ 11 S.C.R.
A 1,600 hectares. This is apart from the 25 million square
meters of land which was liable to be acquired for the
purposes of development of 5 land parcels. There was
interlinking between the acquisition of land for the
highway and the acquisition of land for establishing the
B 5 townships. However, this was not the only factor
considered by the State Government and even the High
Court has not held the same to be the only factor for
dispensing with the enquiry. [Para 40) [402-F-H; 403-A-B]
Om Prakash and Anr. vs. State of UP. and Ors. 1998 (6)
c sec 1, distinguished
Case Law Reference:
2003 (1 O) sec 626
Referred to.
Para 31
D
1996 (1 O) sec 632
Referred to.
Para 31
2006 (4) sec 683
Relied on.
Para 33
2008 (9) sec 552
Relied on.
Para 34
E
2001 (8) sec 418
Referred to.
Para 34
AIR 1960 SC 1203
Referred to.
Para 34
AIR 1961 SC 343
Referred to.
Para 35
AIR 1963 SC 151
Distinguished.
Para 37
F
2003 (1 O) sec 626
Referred to.
Para 37
2008(1 > sec 728
Referred to.
Para 37
1911 (1) sec 671
Referred to.
Para 37
G
AIR 1965SC 427
Referred to.
Para 37
2008 (14) sec 716
Referred to.
Para 39
2002 (4) sec 160
Referred to.
Para 39
H
NANO KISHORE GUPTA & ORS. v. STATE OF U.P. & 365
ORS.
1980 (2) sec 471
Referred to.
Para 39
1998 (6) sec 1
Referred to.
Para 39
2009 (10) sec 11s
Referred to.
Para 39
2007(9) ADJ 447 (DB) Referred to.
Para 39
2008 (3) ADJ 289 (DB) Referred to.
Para 39
2009 (8) ADJ 360 (DB) Referred to.
Para 39
2009 (2) sec 377
Referred to.
Para 39
2009 (14) sec 281
Referred to.
Para 39
2009 (1 O) sec 689
Relied on.
Para 39
1998 (6) sec 1
Distinguished.
Para 40
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7468 of 2010.
From the Judgment & Order dated 30.11.2009 of the High
Court of Judicature at Allahabad in Civil Misc. Writ Petition No.
A
8
c
D
31314 of 2009.
E
WITH
C.A. Nos. 7469-7470 of 2010.
Ranjit Kumar, Ratnakar Dash, S.8. Upadhyay, Altaf
F
Ahmad, Anurag Sharma, Parshant Kumar, (for AP & J
Chambers, Meenakshi Arora, Poli Kataki, Mohit T.N. Singh,
S.K. Dwivedi, Rajeev K. Dubey, Kamlendra Mishra, Pawan
Upadhyay, Param mishra (for Sharmila Upadhyay), Ravindra
Kumar for the appearing parties.
G
The Judgment of the Court was delivered by
V.S. SIRPURKAR, J. 1. This judgment will govern Special
Leave Petition (Civil) Nos. 33194 of 2009, 33958 of 2009 and
35336 of 2009.
H
366
SUPREME COURT REPORTS
[201 OJ 11 S.C.R.
A
2. Leave granted in all the Special Leave Petitions.
3. In the first two Special Leave Petitions, judgment passed
by the High Court of Judicature at Allahabad dated 30.11.2009,
is in challenge while in the third Special Leave Petition,
B judgment dated 5.10.2009 on the same subject is impugned.
By the impugned judgments, the Writ Petitions filed by the land
owners challenging the notification under Sections 4 and 6 of
the Land Acquisition Act, 1894 (hereinafter called 'the Act' for
short) relating to Yamuna Expressway Project, were dismissed
C by the High Court. In the Writ Petitions, directions were sought,
firstly not to give effect to the notifications issued and further
not to dispossess the landholders/ petitioners after demolishing
their constructions on the lands. which were proposed to be
acquired. All the challenges were repelled by the High Court.
The High Court, in the judgment dated 30.11.2009 passed in
D Civil Misc. Writ Petition No.31314 of 2009 (Nand Kishore
Gupta & Ors. Vs. State of U.P. & Ors.), basically pointed out
that out of 12,282 land owners, 11,397 had already received
their compensation under the agreement and the challenge
related only to 21.03 hectares out of 1,604 hectares of land.
E The High Court also took the view that the scales of justice must
tilt towards the right to development of the millions who will be
benefited from the road and the development of the area, as
against the human rights of 35 petitioners therein, whose main
complaint was that they were not heard before the declaration
F under Section 6 of the Act. The High Court also declined to give
any direction to the State Government to consider to exempt
21.03 hectares of land relating to the 35 petitioners therein on
account of the fact that the construction of the road had to bemade in an alignment and that alignment could not be changed.
G Identical view was taken in another Writ Petition filed by one
Balbir Singh. The High Court also expressed its concerns that
any direction to exempt the land covered by the construction
might seriously jeopardize the Project. The High Court also
reiterated that the acquisition of the land for interchange of the.
H road was the essential part of the Project, as also the
NANO KISHORE GUPTA & ORS. v. STATE OF U.P. & 367
ORS. [V.S. SIRPURKAR, J.]
construction of bridges, culverts and interchanges, which were
A
essential for the fast moving six lane Expressway.
4. Before we approach the arguments, it would be
interesting to see some facts of this litigation.
B
5. A notification dated 20.2.2009 was issued by the
Government of Uttar Pradesh under Section 4(1) read with
Sections 17(1) and 17(4) of the Act. Thereunder, the lands
described in the schedules appended thereto in District Agra,
Pargana Etmadpur, Tehsil Etmadpur, Village Kuberpur were
covered for a public purpose, namely, the construction of the
C
interchange under the Yamuna Expressway Project in District
Agra through Yamuna Expressway Industrial Development
Authority (hereinafter called 'YEIDA' for short). In fact, in the year
2001 itself, the State Government had taken a decision for the
construction of Yamuna Expressway which sometimes earlier
D
was named as Taj Expressway, which was to proceed from
Greater Neida to Agra. This was to be done on Build, Operate
and Transfer (BOT) basis and the builder was to get the rights
to collect the tolls for a period of 36 years from the date of
commencement of commercial operations. On account of the
public outcry, the State Government appointed a Commission
of Enquiry under the Chairmanship of Mr. Justice Siddheshwar
Narain (Retd.). A Public Interest Litigation was also filed. The
Project was cleared in the enquiry and the Public Interest
Litigation also ended in favour of the Government of U.P. It is
on the backdrop of this that the State Government came up with
E
F
/a notification dated 20.2.2009, i.e. only after its way was
cleared, which itself took about 8 years. This was the reason
given for making applicable the urgency clause under Sections .
17(1) and 17(4) of the Act. Legal notices were served by those
G
who were affected, but ultimately the State came out with a
notification dated 15.6.2009 under Section 6(1) read with
Sections 17(1) and 17(4) of the Act. It is mainly the complaint
of the appellants that they had purchased the land long time
back and their names were duly mutated in the Revenue records
H
368
SUPREME COURT REPORTS
[2010] 11 S.C.R.
A and they had thereafter raised constructions over the land in
question, and in those constructions, they were running their
business like shops, cold-storage etc. The appellants also
complained that the area which was proposed to be cleared
for the interchange, if acquired, the appellants would suffer
B immensely. The appellants very seriously challenged the
application of urgency under Sections 17(1) and 17(4) of the
Act to these acquisitions, thereby depriving the appellant& of
an opportunity to be heard under Section 5A of the Act. Even
before us, that is the main thrust of the arguments on behalf of
c the appellants.
6. The other major challenge opposing the acquisition
related to the concept of 'public purpose'. It was tried to be
suggested that this was in fact an acquisition without any public
purpose for the Company-J.P. lnfratech Ltd.-respondent No.5
D and would be covered under Part VII of the Act. In that, the
learned Counsel appearing on behalf of the appellants urged
that there could be no dispensation with enquiry under Section
5A of the Act. It was pointed out that the compensation was
payable by the private party under the scheme and, therefore
E also, this could not be viewed as a public purpose. It was also
suggested that this was virtually a perpetual lease in favour of
the Company and, therefore, the Company was getting deemed
proprietary rights.
F
7. In the two impugned judgments, the Allahabad High
Court has repelled all the challenges. In fact in the earlier round
of litigation that is in the Public Interest Litigation itself the
Division Bench of the Allahabad High Court repelled the
challenges to this Project which was then known as Taj
G Expressway Project and the land acquisition made therefor.
8. Before we approach the questions argued, it will be
better to refer to the judgment of the Allahabad High Court in
the Public Interest Litigation, which, in itself, refers the enquiry
held by Mr. Justice Sidheshwar Narain (Retd.). In fact one of
H the prayers in the Public Interest Litigation was for production
NANO KISHORE GUPTA & ORS. v. STATE OF U.P. &369
ORS. [V.S. SIRPURKAR, J.]
of the Report dated 12.10.2006 of the Commission headed by
A
Mr. Justice Narain. The other prayers were to initiate de novo
judicial enquiry by a sitting High Court Judge and further to issue
a Writ of Mandamus declaring the alleged Enquiry Report as
illegal, invalid and ineffective and not enforceable in the eyes
of law and lastly to pass any other Writ, order or direction. This
B
Writ Petition- was then amended and the Concession
Agreement dated 7 .2.2003 entered between the Taj
Expressway Authority and the Jaiprakash Industries (hereinafter
called 'the Company' for short) also came to be challenged.
This Taj Expressway Authority was constituted under Section c
3 of the U.P. Industrial Area Development Act, 1996 which later
on was named as Yamuna Expressway Industrial Development
Authority (YEIDA). The petitioners prayed for a declaration that
this agreement was null and void.
9. Another prayer added by way of an amendment was for D
investigation by the special investigation team into the entire
deal of Taj Expressway Project. The High Court in its well
considered judgment, took note of the three challenges by the
petitioners to the said Commission of Enquiry Report. The said
challenges were:
E
(1)
that the award of contract to the Company was
activated by ma/a fides;
. (2)
that the tender process itself was faulty; and
(3)
that the terms of contract were unconscionable and
against the public interest.
F
10. All the three challenges were refuted by the Division
Bench of the High Court by referring to the, Report itself which G
was filed before it at the instance of the State Government. It
recorded a finding that there was no ma/a fide on the part of
anybody. The Commission had also come to the conclusion
that the Agreement with the Company was arFived at after
proper scrutiny on the part of the Government Officers and there
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SUPREME COURT REPORTS
[2010] 11 S.C.R.
A
was no ma/a fide on the alleged connection of one Shri Anup
Mishra or his father with the Company. The Division Bench
affirmed this finding. The Division Bench also recorded a
finding that the petitioner therein was not able to place any other
material on record to show that the process itself was faulty or
B
that the terms of contract were unconscionable and against the
public interest. While considering the amendment made by the
petitioner to the Writ Petition by which fresh challenges were
thrown against the Agreement dated 7.2.2003, the Division
Bench came to the conclusion that there was no procedural
C
infirmity in the contract having been awarded to the Company.
D
E
The Division Bench then considered the other challenges
namely:
(1)
huge chunks of lands had been given to respondent
No.2 on lease for 90 years at a very nominal lease
rent.
(2)
Exemption of stamp duty has been given to
respondent No.2 causing loss of revenue to the
State exchequer.
11. The Division Bench in detail considered the nature of
lease and the nature of the transaction. For that it went on to
analyze the whole Project which had the three objectives,
namely:
F
(1)
provide a fast moving corridor to minimize travel
G
time
(2)
to connect the main township/ commercial centres
on the Eastern side of Yamuna
(3)
to relieve the National Highway No.2 which was
already congested and ran through the heart of
cities like Faridabad, Ballabhgarh and Palwal."
12. The High Court then discussed the financial
H
ramifications resulting out of the Agreement and then after
NAND KISHORE GUPTA & ORS. v. STATE OF U.P. & 371
ORS. [V.S. SIRPURKAR, J.]
referring various judgments of this Court, went on to decide the A
question whether before finalizing the contract in favour of
respondent No. 2 Company, the State Government or the Taj
Expressway Authority had· undertaken the requisite research.
It went on to record a finding as found in the Commission of
Enquiry that the authorities had examined all the aspects of the
B
matter before issuing the bid document inviting offers. It also
recorded that there was proper publication of the Notice Inviting
Tender (NIT) in various national Dailies and that 19 parties had
responded to the NITs. The High Court, therefore, recorded a
finding that there was nothing shady and the entire process was c
transparent. The High Court also registered a finding that it
could not be1 said that undue concessions were given to the
Company in view of the fact that all such concessions had
already been spelt out in the bid document. Thus, the High Court
approved of the findings reached in the Commission of Enquiry 0
by Mr. Justice Siddheshwar Narain (Retd.). Ultimately, the High
Court dismissed the Public Interest Litigation.
13. It is on this backdrop that number of Writ Petitions
came to be filed again giving rise to the two impugned
judgments.
E
Basically two questions emerge from the arguments made
at the Bar before us. They are:-
The acquisition itself cannot be said to be for the public
F
purpose:
(a)
as the object of this acquisition is not covered by
the definition of 'public purpose' in Section 3 (f) of
the Land Acquisition Act.
(b)
it cannot be said that this acquisition would come
under Part II of the Land Acquisition Act and in fact
it must be considered to be under Part VII of the
Act since it virtually amounts to acquisition of land
for J.P. lnfratech-a company(respondent No.5).
G
H
A
B
c
D
372
SUPREME COURT REPORTS
(2010) 11 S.C.R.
(c)
the compensation for the land acquisition is coming
wholly from the Jaypee Industries and not from the
Government or from YEIDA and, therefore, it is not
an acquisition for public purpose.
(d)
the acquisition for so-called interchange is not at all
necessary and it is actually a colourable ·exercise
of powers.
2.
The application of Sections 17 ( 1 ) and 17 ( 4) of the
Land Acquisition Act was wholly unnecessary and,
th~refore, illegal,
(a)
and, therefore, the Government could not have
dispensed with the enquiry under Section 5 A of the
Aci.
.
14. Learned Counsel appearing on behalf of the appellants
argued in support of the above two main and the ancillary
questions.
15. As against this, learned Counsel appearing for the
E
State as also for the Company and YEIDA supported the
acquisition and contended that it was futile to oppose the
acquisition, particularly, when the acquisition was virtually
accepted by all except a few, inasmuch as the learned Counsel
contended that majority of the landlords have ae!'cepted the
F
compensation also and have not challenged th~ acquisition in
any manner. It is only a few extremely insignificant pockets
which are now caught in this litigation. The learned Counsel
have specifically averred that the whole process was extremely
transparent and that there was necessity of this land considering
G the public purpose involved and that all care was taken to
safeguard the interests of the farmers and that the creation of
this Expressway and creation of five townships would
immensely help the general public residing on the Eastern Bank
of Yamuna particularly, and the residents of UP generally. It is
H
on these rival contentions that we have to proceed now.
NANO KISHORE GUPTA & ORS. v. STATE OF U.P. & 373
ORS. [V.S. SIRPURKAR, J.]
16. Since the land acquisition exercise is for the Yamuna
A
Expressway Project, it would be worthwhile to see some factual
background thereof. U.P. Industrial Area Development Act,
1976 came into force on 1.4.1976. Section 3 thereof provides
for constituting an authority by a notification. The object of this'
legislation is planned development of certain notified areas in
B
the State by building up integrated industrial townships. The
State Government is empowered thereunder to declare the
industrial development area and this Act empowers the
authority to acquire the land by direct purchase or through State
(under the provisions of the Land Acquisition Act, 1894). It also c
requires preparing a Master Plan, to demarcate the sites into
industrial, commercial, institutional, residential and other land
use in accordance with the Master Plan. Under Section 7 of
the said Act, the authority is empowered to allot its properties,
by way of lease br otherwise, on such terms and conditions as
0
it may deem flt. An authority called Taj Expressway Industrial
Development Authority came to be constituted under this Act
by a Notification dated 24.4.2001. This Authority changed its
nomenclature and became Yamuna Expressway Industrial
Development Authority ('YEIDA' for short) vide Notification
dated 11.7.2008. This was with intent to develop the Eastern
Side of the river Yamuna by construction of a 6 lane
Expressway joining Noida to Agra and also for development
of five regions along the said Expressway into a planned
industrial development area for residential, industrial,
institutional or recreational purposes. The industrial
development area was also notified on 24.4.2001, which then
comprised of 8 villages. Later on, vide notification dated
22.8.2001, as many as 63 No. of villages including the village
E
F
of some of the appellants were also included. By further
notifications, some more villages were also notified as part of G
industrial development area. The area was in 4 districts,
namely, Gautam Budh Nagar, Agra, Mathura and Aligarh.
17. After the constitution of the Authority (YEIDA), public
notices for global tenders were issued in 2001 inviting bids from
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SUPREME COURT REPORTS
[2010] 11 S.C.R.
A interested parties desirous of implementing the Project of the
said 6 lane Expressway and the building of the townships on
Build, Operate and Transfer model. This Project, however, did
not proceed, as there was no eligible bidder and ultimately, the
selection process was dropped. Subsequently, in November,
B 2002, fresh bids were invited on the same principles, but with
an option either to enter into a joint venture (JV) with the YEIDA
or to implement the said Project without any equity partition of
the said Authority. In the Bid Document, the necessity of the
major highway connecting New Delhi with Mathura and Agra
c was reiterated with the objectives {i) to provide a fast moving
corridor to minimize the travel time, (ii) to connect the main
townships/commercial centres on the Eastern Side of Yamuna,
and (iii) to relieve NH-2 which was already congested and ran
through the heart of cities like Faridabad, Ballabhgarh and
D Palwal. It was informed to the interested parties that the
proposed Expressway was to be about 160 Kms. in length
shortening the distance between Noida and Agra with an
estimated cost of US $ 350 million. It was also informed that
the Expressway was to pass through virgin area along the river
Yamuna and that a band of 500 meters width of land at five or
E more locations, of which one location was to be in Noida or
Greater Noida area along the Expressway, would be offered
on acquisition cost along the corridor as an integral part of the
Project. It was further informed that in addition to the land for
Expressway, 25 million square meters land along the same
F would be given at acquisition cost for development of the same
for commercial, amusement, industrial, institutional and
residential purpose. Bids were invited from all the interested
parties having experience in the construction/development of
infrastructure Projects including real estate development and
G it was informed that the selected developer would be offered
25 millions square meters of land for development on
acquisition cost on lease for a period of 90 years. It was also
informed that the concession period would be for 7 years from
the date of signing of the Concession Agreement and all the
H assets related to the Expressway were to stand transferred on
NANO KISHORE GUPTA & ORS. v. STATE OF U.P. & 375
ORS. [V.S. SIRPURKAR, J.]
the date of signing of the Concession Agreement in favour of
A
such a successful bidder. The Bid Document also provided that
the successful bidder would have the right to levy, collect and
retain toll from the public using the Expressway during the
concession period. Tender of Jaiprakash Industries Ltd. was
accepted and thus they became the successful bidder as they
B
had claimed the lowest concession period of 36 years.
18. The Concession Agreement dated 7.2.2003 also came
to be executed between the parties. However, before the work
could start, the whole Project got stuck up in the litigation, upon
C
which the Enquiry Commission was appointed by the State
Government under the Chairmanship of Mr. Justice
Siddheshwar Narain (Retd.). Before that, two Commissions of
sub enquiries were constituted. While the Report of the first
Commission was quashed by the Allahabad High Court, the
second Commission of Enquiry could not proceed at all, as the
Members had resigned. Ultimately, Mr. Justice Siddheshwar
Narain (Retd.) completed the enquiry and submitted his Report
in October, 2006. Thereafter, as has already been pointed out
earlier, a Public Interest Litigation came to be filed by way of a
Writ Petition before the Allahabad High Court, which was
dismissed by the Allahabad High Court. It was thereafter that
D
E
F
the process of land acquisition commenced in September,
2007. In the first phase, land for Expressway was acquired.
Subsequently, the acquisition process started for the land for
development. The first Writ Petition being Civil Misc. Writ
Petition No. 48978 of 2008 came to be filed by one Balbir
Singh, challenging the Notification dated 15.10.2007 issued
under Section 4 of the Act, as also the Notification dated
4.1.2008 issued under Section 6 of the Act. Status quo order
was passed on the said Writ Petition. On its heels, other Writ
G
Petitions were filed, the main Writ Petition being Civil Misc. Writ
Petition No. 31314 of 2009 filed by one Nand Kishore Gupta.
The status quo orders were passed even in that Writ Petition.
Ultimately, the Writ Petition of Balbir Singh was dismissed by
a judgment dated 5.10.2009 and that of others including Nand
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376
SUPREME COURT REPORTS
[2010] 11 S.C.R.
A Kishore's came to be dismissed on 30.11.2009. It is on this
historical backdrop that we have now to consider the
correctness or otherwise of these two judgments, which pertain
to, more or the less, same subject, but with slight variation.
8
19. The Writ Petition filed by Balbir Singh proceeded, inter
alia, on the grounds that acquisition was a colourable exercise
of power and was one which should have been accomplished
by complying with the provisions of Part VII of the Act as this
was an acquisition for company. By the judgment dated
C 5.10.2009, the High Court dismissed the Writ Petition holding
that (a) the entire process of acquisition was in accordance
with the provisions of the Act and this was not a colourable
exercise of powers, {b) the land in instant case was indeed
acquired for public purpose, namely, construction of Yamuna
Expressway Project, (c) the land was not acquired for company
D and as such the procedure under Chapter VII was not
applicable.
It was also urged in that case that the entire cost of the
acquisition was to be borne by the Company and the Company
E had to pay the entire dues towards acquisition cost and,
therefore, there was no public purpose in this acquisition and
the so-called public purpose appearing in the Notification was
a camouflage. It was further urged that since even a part of
compensation was not coming from the Government out of the
F public revenue or some fund controlled by the local authority,
this acquisition was not for the public purpose. In Balbir Singh's
case, all these objections were dismissed.
20. More or the less, same contentions with some
difference were raised in Nand Kishore's case also, the
G judgment which also disposed of the Civil Misc. Writ Petition
No. 50474 of 2009 (Raja Devi & Ors. Vs. State of U.P. & Ors.),
Civil Misc. Writ Petition No. 35090 of 2009 (J.S. Horticulture
Pvt. Ltd. Vs. State of U.P. & Ors.), Civil Misc. Writ Petition No.
51537 of 2009 (Bhupendra Singh & Ors. Vs. State of U.P. &
H Ors.), Civil Misc. Writ Petition No. 51543 of 2009 (Mukesh
NANO KISHORE GUPTA & ORS. v. STATE OF U.P. & 377
ORS. [V.S. SIRPURKAR, J.]
Singh Vs. State of U.P. & Ors.), Civil Misc. Writ Petition No.
A
51546 of 2009 (Vijay Singh & Anr. Vs. State of U.P. & Ors.),
Civil Misc.