P.N. BHAGWATI

(1.) -These petitions raise an interesting question whether acquisition of land for construction of houses for members of a Co-operative. Housing Society can be said to be an acquisition for a public purpose. The facts giving rise to these petitions follow a common pattern and it would therefore be sufficient if we set out the facts of only one petition namely Special Civil Application No. 180 of 1965. The petitioner in this petition is the owner of a piece of land situate in Ahmedabad. There is a Society called Patel Baug Co-operative Housing Society Limited (hereinafter referred to as the Society) registered under the Bombay Cooperative Societies Act 1925 It is a Co-operative Housing Society formed with the object of enabling its members to construct houses. The petitioners land being well situate the Society moved the State Government to acquire the petitioners land for construction of houses by its members and the State Government accordingly issued a notification dated 13th April 1961 under sec. 4 stating that the petitioners land was likely to be needed for a public purpose namely for construction of houses for members of Shri Patel Baug Co-operative Housing Society Ltd. Ahmedabad. Within thirty days of the issue of this notification the petitioner filed his objections against the proposed acquisition of his land and the Collector after holding an inquiry made his report to the State Government under sec. 5A sub-sec. (2). The State Government after considering the report issued a notification dated 27th August 1964 under sec. 6 declaring that the petitioners land was needed to be acquired at the public expense for the purpose specified in column 4 of the Schedule namely for a housing scheme undertaken by Shri Patel Baug Co-operative Housing Society Ltd. Ahmedabad with the sanction of the Government. These words were obviously taken from the extended definition of public purpose introduced in sec. 3(f) by the Land Acquisition (Bombay Amendment) Act 1948 Though this statement of the public purpose in sec. 6 notification was worded slightly differently from that contained in sec. 4 notification the case of the respondents was that there was no difference in substance as the housing scheme referred to in sec. 6 notification was a housing scheme for the members of the Society and not for the public. The petitioner thereupon filed Special Civil Application No. 180 of 1965 challenging the validity of the acquisition sought to be made by the State Government. Similar petitions were also filed by other petitioners challenging the validity of the acquisitions sought to be made for other Co-operative Societies namely Malaya Co-operative Housing Society Limited in Special Civil Application No. 181 of 1965 Sanyojan Co-operative Housing Society Limited in Special Civil Application No. 635 of 1965 and Anupam Co-operative Housing Society Limited in Special Civil Application No. 845 of 1969.

(2.) Though several grounds were taken in the petitions for challenging the validity of the acquisitions only one was pressed at the time of arguments and that was that there was colourable exercise of power on the part of the State Government in issuing the impugned sec. 6 notifications since the purpose for which the acquisition was made in each cases namely construction of houses for members of the Society was ex facie a private purpose and what the State Government was satisfied about was therefore not a public purpose but a private purpose and the declaration contained in the impugned sec. 6 notifications was colourable as being outside the scope of the power conferred on the State Government under the Act. This ground was resisted by the respondents and a twofold answer was sought to be given to it. One was that the declaration in the impugned sec. 6 notifications that the purpose for which the acquisition was made was a public purpose was conclusive and it was not open to the petitioners to assert or establish to the contrary and the other was that in any event in the context of the facts set out in the affidavit-in-reply the purpose of construction of houses for members of a Co-operative Society was a public purpose and the acquisition in each case was therefore supported by a public purpose. These rival contentions we shall now proceed to consider.

(3.) It is well-settled law that once a declaration is made under sec. 6 sub-sec. (1) it is conclusive not only in regard to the question of need but also in regard to the question whether the purpose for which the land is needed is a public purpose. As pointed out by the Supreme Court in Somawanti v. State of Punjab A.I.R. 1963 S.C. 151:- It is the existence of the need for a public purpose which gives jurisdiction to the Government to make a declaration under sec. 6(1) and makes it the sole judge whether there is in fact a need and whether the purpose for which there is that need is a public purpose. The provisions of sub-sec. (3) preclude a Court from ascertaining whether either of these ingredients of the declaration exists. If the purpose for which the land is being acquired by the State is within the legislative competence of the State the declaration of the Government is conclusive and it is not open to the petitioner to contend that the purpose is not a public purpose. But this proposition is subject to one exception and that exception is to quote again from the decision of the Supreme Court in Somavantis case (supra) :-

...if there is a colourable exercise of power the declaration will be open to challenge at the instance of the aggrieved party. The power committed to the Government by the Act is a limited power in the sense that it can be exercised only where there is a public purpose leaving aside for a moment the purpose of a company. If it appears that what the Government is satisfied about is not a public purpose but a private purpose or no purpose at all the action of the Government would be colourable as not being relatable to the power conferred upon it by the Act and its declaration will be a nullity If the purpose for which the acquisition is made is clearly and manifestly a private purpose the inference would be irresistible that in making the declaration the State Government has failed to apply its mind or misapprehended the true meaning and import of what is a public purpose or taken into account extraneous or irrelevant considerations for otherwise it could never have stated that the land is needed for a public purpose. The action of the Government in such a case would be colourable as not being relatable to the power conferred upon it under the Act and the acquisition would be bad. It is therefore clearly permissible to the petitioners notwithstanding the declaration to show if they can that the purpose of construction of houses for members of a Co-operative Society is not public purpose but a private purpose. As a matter of fact this inquiry is permissible also for another reason. The words in which the public purpose is expressed in the impugned sec. 6 notifications are borrowed verbatim from the extended definition of public purpose introduced by the Land Acquisition (Bombay Amendment) Act 1948 and the argument of the petitioners therefore was that it was by reason of this extended definition that the purpose for which acquisition was made was a public purpose. But this extended definition was ab initio void as the entire Land Acquisition (Bombay Amendment) Act 1948 was declared ultra vires by the Supreme Court in Jeejeebhoy v. Assistant Collector Thana A.I.R. 1966 S.C. 1096 and the satisfaction of the State Government was therefore vitiated and could not afford any foundation for issuing the impugned sec. 6 notifications. This argument was combated on behalf of the respondents and it was urged that the satisfaction of the State Government was not based on the extended definition of public purpose but the State Government was satisfied aliened and therefore even if the extended definition was void it did not affect the validity of the acquisition. Now it is evident that if the purpose of construction of houses for members of a Co-operative Society is manifestly not a public purpose it would considerably fortify the inference that the State Government must have relied on the extended definition of public purpose for the purpose of reaching the opinion that this purpose is a public purpose and that would greatly support the argument of the petitioners. It is therefore necessary for this reason also to inquire whether the purpose of construction of houses for members of a Co-operative Society can be said to be a public purpose.

(4.) That raises the question:- what is a public purpose The expression Public purpose as pointed out by Mahajan J. in State of Bihar v. Sir Kameshwar Singh A.I.R. 1952 S.C. 262 at page 311 is not capable of precise definition and has not a rigid meaning. It can only be defined by a process of judicial inclusion and exclusion. However a broad test has been formulated by judicial decisions and it is that whatever furthers the general interest of the community as opposed to the particular interest of the individual must be regarded as a public purpose. This test is by its very nature elastic and it is as well that it should be so. So diverse and varied can be the activities engagements and operation which may redound to the general benefit of the public and in which the general interest of the public can be said to be really involved that it is impossible to expect a definition exclusive or inclusive which will aptly meet every particular objective within the matrix of public purpose and yet not fail in some circumstances. But the basic concept underlying the expression public purpose is general interest of the community. Now in every field of economic activity individual interest in its ultimate consequence is necessarily related to the general interest of the community. Any economic activity which primarily serves individual interest would also ordinarily in its operation and effect tend to benefit the community. Take for example an individual who deals in textile goods for profit. His activity though carried on primarily and exclusively for his private benefit must inevitably result in benefit to the community as by such activity textile goods would become available to the members of the community and their need would be supplied. But that does not make the activity a public purpose. There must be something more-some characteristic which distinguishes a public purpose from a private purpose. The purpose to be a public purpose must be one which is primarily or predominantly for the general benefit of the community. It is not enough that it benefits the community incidentally for as stated above every economic activity is bound to have that effect. It must be mainly and primarily designed to serve public interest and though in its implementation it may incidentally benefit particular individuals such incidental benefit to private individuals would not convert it into private purpose. The test which has therefore to be applied is whether the purpose is one which is primarily and predominantly one for the general interest of the community or it is mainly or primarily to serve the interest of a few individuals. Is the emphasis on the general benefit of the community or is it on the benefit of some specified individuals If it is the former it would be a public purpose but not so if it is the latter. That is the only way in which a line can be drawn to distinguish a public purpose from a private purpose. The difference between the two can become recognizable and meaningful only if this interpretation is accepted. And this interpretation is clearly borne out by the classic statement of public purposes given by Batchelor J. and approved by the Privy Council in Hamabai Framjee Petit v. Secretary of State for India 42 Ind App. 44 where it was said that the phrase whatever else it may mean must include a purpose that is an object claim in which the general interest of the community as opposed to the particular interest of individuals is directly and vitally concerned. It may be noticed that the words used are directly and vitally concerned as distinguished from indirectly or incidentally concerned.

(5.) To apply this test let us see what is the purpose for which acquisition is made in the present cases. The purpose appearing on the face of the impugned sec. 6 notifications is construction of houses for members of a Co-operative Society. Prima facie this is a purpose for the benefit of a few private individuals who constitute members of the Society and therefore on an application of the above test it would appear that it is a private purpose and not a public purpose. But the respondents attempted to show by evidence of surrounding circumstances that this purpose for which acquisition was sought to be made was a public purpose. The respondents relied on the facts set out in paragraph 15 of the affidavit in-reply filed by T. B. Desai Under Secretary to Government of Gujarat Revenue Department in Special Civil Application No. 180 of 1965-which was also by common consent treated as an affidavit-in-reply in Special Civil Application No. 845 of 1969 namely :-

I submit that the public purpose varies with the times prevailing conditions of localities and in some towns like Ahmedabad the conditions are such that it is imperative that the State should do all it can do to increase the availability of residential sites. Though such residential sites will be ultimately allotted to certain members of the public and they would get individual benefit even then it is in the interest of the general community that those members of the public should be able to have sites to put up residential houses. The main idea in issuing the impugned notification is not to think of the private comforts or advantage of the members of the Society but the general public good. I submit that the welfare of a large number of persons living in Ahmedabad is a matter of public concern and the notification serves to enhance the welfare of this section of the community and therefore the acquisition of land in question is per se a public purpose I say that in the present case when there is acute shortage of residential accommodation the Government is solving such problems by various methods for example through the Housing Board the Co-operative Societies etc. I submit that there is nothing wrong if the public are provided the facilities of housing accommodation through the machinery of the Co-operative Housing Societies. I say that as a result of bifurcation of the former State of Bombay into two States viz. the State of Maharashtra and the State of Gujarat the demand for residential accommodation in the City of Ahmedabad has tremendously increased. 1 say that it was because of the establishment of Secretariat various other Government offices and an influx of Government servants and various business people and business institutions in the City of Ahmedabad as also establishment of various industries in and around the City that there is considerable increase in the population of the City of Ahmedabad. All such factors have created acute housing shortage. I say that in addition to the above various officer of the Central Government have also been located in the City of Ahmedabad. I say that inter alia with a view to solving the acute housing shortage the State Government has devised various schemes of increasing the residential accommodation. Some of such schemes are administered through the Gujarat Housing Board some by the Government itself some by the Ahmedabad Municipal Corporation for its staff. Furthermore the State Government has also devised subsidised housing schemes for residential purposes of similar other workers. As a part of the general scheme for easing the acute shortage of residential accommodation in the City of Ahmedabad the State Government is also encouraging the formation of Co-operative Housing Societies and assisting such Co-operative Housing Societies in various ways through financing agencies like Gujarat Co-operative Housing Finance Society Ltd. Central Co-operative Bank etc. If necessary I crave leave to produce the various reports published by the then Bombay Co-operative Housing Finance Society Ltd. till the year 1950 and of Gujarat Co-operative Housing Finance Society Ltd. on and from the years 1960 upto date showing the various figures of applications and the amounts of loans sanctioned for the establishment of the Co-operative Housing Societies etc. I say that such amounts of loan run into several crores of rupees. I say that the aforesaid Society is also to get the loan of 60% of the cost including cost of land from the said institution. Thus in effect 60% subsidy in shape of long term loan is made available to the said Society......I further submit that the acquisition of land for enabling groups in the community to build houses for them selves as a part of the general scheme to relieve the acute shortage of residential houses is a public purpose per se. I say that formation of the Co-operative Housing Societies would enable their members to avail themselves of various facilities and financial assistance on easy terms and such facilities and finances would not otherwise be available to them as individuals.....I submit that construction of more houses through the co-operative Housing Societies as a part of the general scheme to ease the acute shortage of residential accommodation in Ahmedabad is therefore a public purpose. I further submit that although the direct and immediate beneficiaries under the aforesaid scheme may be the individual members of such various Co-operative Housing Societies the construction of houses by various Co-operative Housing Societies cases the general acute shortage of residential accommodation in the City of Ahmedabad to a considerable extent and is therefore a public purpose. and urged that in the context of these facts the purpose of construction of houses for members of a Co-operative Society must be held to be a public purpose. Mr. S. B. Vakil learned advocate appearing on behalf of the petitioners in the first two petitions objected against this line of approach. He contended that it was not open to the respondents to show that there was a general scheme for easing acute shortage of housing accommodation in the City of Ahmedabad and that the acquisition was made as a part of such scheme for carrying out this purpose which was a public purpose. He urged that the purpose for which the acquisition was made was required to be stated in sec. 6 notification and therefore it was only with reference to that purpose that the inquiry was to be made namely whether it was a public purpose or a private purpose. Now we agree with Mr. S. B. Vakil that the only question before the Court is whether the purpose stated in the impugned sec. 6 notifications namely construction of houses for members of a Co-operative Housing Society is a. public purpose. But in order to determine the nature and character of that purpose it is necessary to look into the surrounding circumstances. Whether a particular purpose is a public purpose or a private purpose cannot be decided in the abstract. What may be regarded as a private purpose in a particular set of circumstances may well acquire the character of a public purpose in the context of a different set of facts. It is therefore always open to the State Government to place before the Court facts which would show that the particular purpose stated in sec. 6 notification though ostensibly a private purpose is really and truly a public purpose. Consequently we must approach consideration of this question in the light of the facts placed before us on behalf of the respondents.

(6.) It is apparent on an analysis of the facts set out in paragraph 15 of the affidavit-in-reply which we have quoted above that there was acute shortage of housing accommodation in the City of Ahmedabad and as a part of the scheme for relieving this shortage the State Government inter alia decided to encourage the formation of Co-operative Housing Societies and to assist them in constructing houses for their members by financing them through agencies like Gujarat Co-operative Housing Finance Society Limited and other Co-operative Banks. The question is whether acquisition of land for construction of houses for members of a Cooperative Society as a part of the general scheme to relieve the acute shortage of residential houses could be said to be an acquisition for a public purpose. Now it is difficult to see how even in the context of acute shortage of housing accommodation construction of houses for a few specified individuals who are not homeless but who have no houses of their own would directly involve the general benefit of the community. How would any public advantage accrue by providing these specified individuals with land for construction of houses If it could be said that public benefit does accrue in such a case it would equally have to be held that even if the State Government acquires land for one private individual who is staying in a rented house and who has no house of his own it would be a public purpose. But this conclusion is patently and manifestly absurd. If land cannot be acquired for one private individual for construction of house by him equally it cannot be acquired for a few specified individuals for construction of their houses. The mere fact that a few private individuals have gathered together to form a Co-operative Society would not affect the nature of the purpose. It would not invest what is otherwise a private purpose with the character of a public purpose. A Co-operative Society merely constitutes the mechanics for carrying out the purpose of construction of houses for the members. It is a matter of their internal organization which has no bearing on the nature of the purpose. It may be that from asocial or economic point of view it would be a highly desirable form of association between individuals for carrying out any object as it is based on principles of Co-operation and eliminates exploitation of many by a few. But that circumstance is irrelevant to the question whether its purpose is a public purpose. Take by way of illustration a case where there is a Co-operative Society which is trading in goods for profit. Can an acquisition for construction of a godown for such a Co-operative Society be regarded as an acquisition for a public purpose Let us take a case of a Limited Liability Company which wants to construct houses for its shareholders. Obviously and indeed this was not disputed that this purpose would not be a public purpose. But then does it become a public purpose if instead of a Company it is a Co-operative Society which wants to construct houses for its members We should not allow our minds to be distracted from the real issue by protestations and declarations in regard to the highly commendable ideal of co-operation for catchwords and high sounding phrases have always a subtle and insidious appeal and they often tend to confuse the real issues.

(7.) It is no doubt true that the State Government as a matter of policy has decided to encourage formation of Co-operative Societies in its efforts to solve the acute shortage of housing accommodation in the City of Ahmedabad and with that end in view the State Government is making financial assistance available to Co-operative Societies for construction of houses for their members but that does not make the acquisition for construction of houses for members of a particular Co-operative Society an acquisition for a public purpose. There is no scheme of acquisition of land for Co-operative Societies pursuant to which or in implementation of which a particular acquisition is made by the State Government. Every acquisition is an ad hoc acquisition on its own merits. When the State Government makes acquisition for a particular Co-operative Society it has in mind only the need of the members of that Society. The accent is on the need of the members of that particular Society and not on the general interest of the community. A brooding omnipresence of public welfare cannot convert an isolated act of acquisition into one for a public purpose. The position:-.would have been different if there were a scheme of acquisition of land for Co-operative Societies. The scheme would have provided that as a matter of policy the State would acquire lands for Cooperative Societies of a particular class. The benefit of such a scheme would have been open to all and if any particular Society fell within the specified category it would be able to have land acquired for construction of houses for its members but in such a case it would come in incidentally in implementation of the scheme which is for a public purpose. The acquisition for such a Co-operative Society would be really an acquisition in implementation of the public purpose. When such an acquisition is made the accent would be on the general interest of the community sought to be served by the Scheme and not on the benefit to the members of a particular Co-operative Society. The question is really one of emphasis and it is this emphasis which constitutes the dividing line between a public purpose and a private purpose. The dividing line is thin but it exists and is vital and any obliteration of it in a welfare State like ours would enable the State to expropriate land for a private purpose in the garb of a public purpose for every action of the State would in the ultimate analysis be motivated by a public purpose. Moreover it may also be noticed that if there is no scheme of acquisition of land for Co-operative Societies but acquisitions are permitted to be made on an ad hoc basis merely on the ground that if formation of Co-operative Societies is encouraged and they construct houses for their members acute shortage of housing accommodation would be relieved that would introduce a large element of arbitrariness. The State Government may acquire land for one Co-operative Society and not for another. There will be no common standard or yardstick to govern the acquisition in case of Co-operative Societies which would necessarily be there if there is a scheme for acquisition. We must of course concede that this is not a consideration which is directly germane to the question before us but it does emphasize that in one case where there is a scheme for acquisition of land for Co-operative Societies there is accent on the general interest of the community and the particular Co-operative Society comes in only incidentally while in the other case where acquisitions for Co-operative Societies are made on an ad hoc basis there is accent on the particular Co-operative Society and the general interest of the community comes in only incidentally.

(8.) We may take two or three illustrations to bring out clearly and forcibly the point we are making. These examples would show that absurd consequences would arise if the contention urged on behalf of the respondents were accepted. Suppose the Government with a view to relieving acute housing shortage decides to encourage construction of houses by individuals and for that purpose persuades the Life Insurance Corporation to give loans to individuals for construction of houses. We are told that in fact as a matter of policy of Government loans are granted by Life Insurance Corporation to policy-holders for construction of houses. Car it be said in such a case that an acquisition of land by Government for construction of house by an individual who has been given a loan by the Life Insurance Corporation is an acquisition for a public purpose. A fortiori an acquisition of land for construction of houses for members of a particular Co-operative Society cannot be said to be an acquisition for a public purpose merely because the Government as a matter of policy is encouraging the formation of Co-operative Societies and providing them financial assistance with a view to relieving acute housing shortage.

(9.) Take another case where the Government is anxious to promote industrial development in the State and with a view to attracting industrialists to put up industries in the State it arranges for financial assistance and other facilities being given to them either by itself or by statutory Corporations controlled by it such as the Gujarat State Financial Corporation or the Gujarat Industrial Development Corporation and the like. If in this situation the Government acquires land for a particular industrialist with a view to enabling him to put up an industry which does not of itself redound to the general benefit of the community can it be said that the acquisition is for a public purpose merely because the scheme or policy of the Government is to encourage industrial development and to provide financial assistance and other amenities to industrialists The answer is obviously No. The acquisition for a particular industrialist would clearly be an acquisition for a private purpose unless of course as pointed out the industry itself is of such a nature that it serves public interest as did the industry in Sarabhai Chemicals case reported in Motilal Patel v. State (1961) II G.L.R. 1. But if on the other hand acquisition of land is made for development of an industrial site or estate and thereafter plots of land are given to industrialists for the purpose of putting up industries it would clearly be an acquisition for a public purpose. Vide Arnold Rodericks v. State of Maharashtra A.I.R. 1966 S.C. 1788. In such a case an industrialist who is allotted a plot gets the benefit in implementation of the scheme which is for public benefit. He is not the person primarily intended to be benefited. He comes in only incidentally because he is the person who qualifies for getting the So also if there is a scheme for acquisition of land for Co-operative Societies and in implementation of the scheme acquisition is made for a particular Co-operative Society the acquisition would be for the public purpose intended to be served by the scheme and the particular Co-operative Society would come in only incidentally as a part of the implementation of the scheme. But where the acquisition for a particular Co-operative Society is not made as a part of the scheme for acquisition of land for Co-operative Societies but on an ad hoc basis on its own merits it cannon be said to be an acquisition nor a public purpose merely because it is the policy or scheme of the Government with view to relieving acute shortage of housing accommodation to encourage formation of Co-operative Societies and to provide financial assistance to them.

(10.) B fore we part with this point we must refer to a decision of the Supreme Court in State of Bombay v. Bhanji Manji A.I.R. 1955 5.C. 41. The question raised in this case was whether an order of requisition made by the State Government was for a public purpose. The purpose for which the premises were requisitioned was not set out in the impugned order of requisition. But a detailed affidavit was made by the Government showing the purpose of requisition and the controversy between the parties centered round the question whether it was a public purpose. The requisition was made pursuant to a scheme or policy of the Government to requisition premises for homeless persons and to allot them to those homeless persons who brought the vacancies to the notice of the Government. When any particular premises were requisitioned and allotted to a particular informant it was done in implementation of a scheme or policy which was intended to serve the general welfare of the community and the particular informant was the recipient of the benefit only incidentally as he fell within the category of homeless persons. The purpose of requisition was therefore not the purpose of an individual. It was a public purpose where the individual came in only incidentally in implementation of that purpose. This decision of the Supreme Court clearly supports the view we are taking as regards the correct approach to be adopted in determining whether a particular purpose is a public purpose or not.

(11.) We are therefore of the view that the purpose of construction of houses for members of a Co-operative Society is not per se a public purpose. Of course there may be circumstances in which even such a purpose may be a public purpose as for example which the Co-operative Society is formed of persons belonging to Scheduled Caste or Backward Class whose welfare in the context of the prevailing socio-economic conditions is a matter of serious concern to the entire community. But we are not concerned here with any such case. It must therefore be held that the purpose for which the acquisition was made in each of these cases was clearly and manifestly not a public purpose and the acquisition must be struck down as being outside the scope of the power conferred on the State Government under the Act.

(12.) We therefore allow the petitions and make the Rule issued in each petition absolute by issuing a writ of mandamus quashing and setting aside the notification under sec. 6 impugned in each petition. The respondents will pay the costs of the petitioner in each petition. Petitions allowed.