URMILA ROY & ORS. versus M/S.BENGAL PEERLESS HOUSING DEVELOPMENT COMPANY LTD. & ORS.

Citation: [2009] 4 S.C.R. 834 · Decided: 23-03-2009 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Dismissed

Judgment (excerpt)

A 
B 
[2009] 4 S.C.R. 834 
URMILA ROY & ORS. 
v. 
MIS.BENGAL PEERLESS HOUSING DEVELOPMENT 
COMPANY LTD. & ORS. 
Civil Appeal No. 1780-1781of 2009 
MARCH 23, 2009 
[TARUN CHATTERJEE AND HARJIT SINGH BEDI, JJ.] 
Land Acquisition Act, 1894 - ss. 4 and 6 - West Bengal 
Housing Board Act, 1972- s. 27A- Notification for acquisition 
C of land for public purpose - Case of land owners that land 
acquired for Housing Scheme by private party - Challenge to 
- Held: Test of acquisition for public purpose was satisfied -
Government retained overall control over the housing scheme 
-
Substantial part of compensation was paid by State 
D Government or Housing Board -Scheme was prepared in 
terms of 1972 Act and it provided for benefits of poor sections 
of society - Also, land owners waived their right to challenge 
acquisition - They acquiesced to the acquisition - Hence, 
order of Division Bench of High Court that land was acquired 
E for public purpose does not call for interference. 
It is the case of the appellant that they purchased 
land for a project and had been negotiating with the State 
Housing Board. However, before the finalisation of the 
project, the State Government issued a Notification for 
F 
acquisition of the said land for a public purpose. The said 
land was acquired for a Housing Scheme by a Housing 
Development Company-private party. An award was 
passed 
and 
the 
land 
owners 
were 
awarded 
compensation. Appellants challenged the acquisition 
G proceedings. The Single Judge of High Court allowed the 
writ petition. However, the Division Bench of High Court 
set aside the order of the Single Judge. Hence the present 
appeals. 
H 
834 
URMILA ROY & ORS. V. MIS.BENGAL PEERLESS 
835 
HOUSING DEV. CO. LTD. & ORS. 
• 
The question which arose for consideration in these A 
appeals was whether Part II or Part VII of the Land 
Acquisition Act is applicable to the acquisition 
proceedings; that whether the Housing Scheme satisfied 
the requirement of section 27A of the West Bengal 
Housing Board Act, 1972; and whether the acquisition and B 
the Scheme were a colourable exercise of power so as to 
give undue benefit to the private party-BP. 
Dismissing the appeals, the Court 
HELD: 1.1 BP was not a Government Company, c 
within the meaning of s. 3(cc) of the Land Acquisition Act, 
1894 inasmuch as the Government did not hold 51% of 
the paid-up share of the capital. However, s. 3(cc) is to be 
read along with s. 6 explanation 2 appended therewith. A 
perusal of the Second proviso and explanation 2 to s. 6 D 
of the Act in particular reveals that if the compensation 
awarded for the property is paid substantially out of the 
funds of a Corporation owned or controlled by the State, 
such compensation will be deemed to be paid out of 
public funds and as such would satisfy the test of acqui-
E 
sition for a public purpose. [Para 11,12] [848-C; 850-F] 
1.2 As per letter issued by the Land Acquisition 
Collector on 13th ~ovember 2001 to the Housing Ministry 
of the State Government, a request had been made that a 
sum of Rs.3.00 Crores which represented about 50% of F 
the compensation of the acquired land be deposited. This 
memo had been forwarded by the State Government to 
the Housing Board and on 23rd November 2001 a sum of 
Rs.1.70 crores towards compensation had been sent by 
~ 
BP to the Land Acquisition Collector through the Housing G 
Board. It appears that on 30th October 2003 the State 
Government had requested the Housing Board to make 
arrangements for the balance payment of compensation 
of about Rs.82,04,138 and by a memorandum of 31st 
October 2003 the Government of West Bengal had H 
836 
SUPREME COURT REPORTS 
[2009] 4 S.C.R. 
A 
directed the Housing Board to pay the additional balance 
compensation which too was defrayed by an account 
payee cheque dated 03rd November 2003 drawn on the 
Bank of Maharashtra. The account statement of the Bank 
of Maharashtra was produced for perusal and this 
B statement supports the argument that the said amount 
had, indeed, been paid from the funds of the Housing 
Board which is completely owned and controlled by the 
State Government. In their written submissions the 
appellants doubted the accuracy of this statement, by 
c asserting that they had not been able to verify its contents 
as it had been produced for the first time in this Court. 
Even if this objection is accepted and the statement ruled 
out of consideration, the other evidence on record does 
indica

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