{"id":216089,"date":"1994-05-03T00:00:00","date_gmt":"1994-05-02T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/srinivasa-coop-house-building-vs-madam-g-sastry-on-3-may-1994"},"modified":"2015-07-30T22:40:40","modified_gmt":"2015-07-30T17:10:40","slug":"srinivasa-coop-house-building-vs-madam-g-sastry-on-3-may-1994","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/srinivasa-coop-house-building-vs-madam-g-sastry-on-3-may-1994","title":{"rendered":"Srinivasa Coop. House Building … vs Madam G.Sastry on 3 May, 1994"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Srinivasa Coop. House Building … vs Madam G.Sastry on 3 May, 1994<\/div>\n
Equivalent citations: 1994 SCC (4) 675, \t JT 1994 (4)\t197<\/div>\n
Author: K Ramaswamy<\/div>\n
Bench: Ramaswamy, K.<\/div>\n
           PETITIONER:\nSRINIVASA  COOP.  HOUSE BUILDING SOCIETY LTD.\n\n\tVs.\n\nRESPONDENT:\nMADAM  G.SASTRY\n\nDATE OF JUDGMENT03\/05\/1994\n\nBENCH:\nRAMASWAMY, K.\nBENCH:\nRAMASWAMY, K.\nVENKATACHALA N. (J)\n\nCITATION:\n 1994 SCC  (4) 675\t  JT 1994 (4)\t197\n 1994 SCALE  (2)785\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
The Judgment of the Court was delivered by
\nK.RAMASWAMY,  J.-  Admittedly the appellant  was  registered
\nunder  the  Andhra Pradesh Cooperative Societies  Act.\t Its
\nobject\tappears\t to be to develop the land and\tallot  plots
\nthereof\t  to  its  members  for\t construction\tof   houses.
\nNotification under Section 4(1) of the Land Acquisition\t Act
\n1  of  1894 for short ‘the Act’ was published in  the  State
\nGazette\t on  8-2-1979, acquiring an extent of  71  acres  56
\ncents  of  land\t situated in Moolasagaram  near\t Nandyal  in
\nKurnool District for the aforesaid purpose.  A report  under
\nSection\t  5-A,\tof  the\t inquiry,  was\tsubmitted   to\t the
\nGovernment.   The appellant entered into an agreement  under
\nSection\t 41 of the Act dated 12-12-1981 with the  Government
\ntreating the appellant as a company and it was published  in
\nthe Gazette dated 4-2-1982.  But it was given up.  The State
\nthereafter  contributed Rs 100 for each acquisition and\t got
\ndeclarations under Section 6, published In the State Gazette
\non  4-2-1982 to an extent of 54 acres 66 cents and on  19-2-
\n1984  for  another extent of 16 acres 19 cents.\t It  is\t not
\nnecessary to mention the previous history of the  litigation
\nbut suffice to state that a Single Judge dismissed one\twrit
\npetition  and allowed other writ petitions on  9-12-1985  on
\nthe ground that the procedure prescribed in Part VII of\t the
\nAct  had not been followed holding when the acquisition\t was
\nfor  public purpose.  On appeals the Division Bench in\tWrit
\nAppeal\tNo.  316 of 1986 etc. by judgment  dated  6-12-1986,
\nquashed\t  the  notification  under  Section  4(1)  and\t the
\ndeclarations  under  Section 6, primarily  on  two  grounds,
\nnamely, (1) that the respondents are small farmers; (2)\t the
\nappellant-society  consists of members who could  afford  to
\nconstruct  houses by themselves, (3) acquiring the lands  of
\nthe  poor  small  farmers for the benefit  of  the  rich  is
\narbitrary  and\tthe  contribution  of Rs  100  each  by\t the
\nGovernment  is a colourable exercise of the power  to  avoid
\nthe  mandatory requirements in Chapter VII of the  Act.\t  In
\nthese appeals we are concerned with 40 acres of land,  since
\nother owners have not challenged the acquisition.\n<\/p>\n
2.   Shri  Sitaramiah,\tthe learned Senior Counsel  for\t the
\nappellant contended that once the Government contributed  Rs
\n200 from the public exchequer, the public purpose  envisaged
\nunder  Section\t3(f)  of  the  Act  is\tsatisfied  and\t the
\nrequirements envisaged in Chapter VII need not be  followed.
\nAlternatively it was contended that once the acquisition was
\nfound to be for providing house sites to the members of\t the
\nCooperative  Society,  it  was a public\t purpose  and  that,
\ntherefore,  mandatory  requirement of Chapter  VII  was\t not
\nrequired to be followed.  In either event, it was  contended
\nthat  the High Court was wrong in quashing the\tnotification
\nand  the declarations on the ground that the acquisition  of
\nthe  small  farmers inferentially offends  Articles  14\t and
\nproviso\t  to  Article  3  1  -A\t of  the   Constitution\t  is
\nunwarranted.\n<\/p>\n
3.   Section  3(e) of the Act defined ‘company’\t under\tpre-
\n1984 Amendment Act as meaning a company registered under the
\nIndian
\n 679<\/span>
\nCompanies  Act, 1882 … and included a\t society  registered
\nunder the Societies Registration Act, 1860, and a registered
\nsociety within the meaning of the Cooperative Societies Act,
\n1912, or any other law relating to cooperative societies for
\nthe time being in force in any State.  Section 3(f)  defined
\nthe expression ‘public purpose’ to include the provision  of
\nvillage-sites\tin  districts  in  which   the\t appropriate
\nGovernment  shall  have\t declared  by  notification  in\t the
\nOfficial Gazette that it is customary for the Government  to
\nmake such provision.  Chapter VII deals with the acquisition
\nof  land  for  companies.  Article 31  of  the\tConstitution
\n(preceding 44th Constitution Amendment Act, 1978)  prohibits
\ncompulsory  acquisition of the property for anything  except
\nfor  a\tpublic purpose.\t Public purpose is  not\t capable  of
\nprecise\t definition.  Each case has to be considered in\t the
\nlight  of the purpose for which acquisition is\tsought\tfor.
\nIt  is\tto serve the general interest of  the  community  as
\nopposed\t to  the  particular  interest\tof  the\t individual.
\nPublic purpose broadly speaking would include the purpose in
\nwhich the general interest of the society as opposed to\t the
\nparticular  interest  of  the  individual  is  directly\t and
\nvitally\t concerned.   Generally the executive would  be\t the
\nbest judge to determine whether or not the impugned  purpose
\nis  a public purpose.  Yet it is not beyond the\t purview  of
\njudicial scrutiny.  The interest of a section of the society
\nmay   be  public  purpose  when\t it  is\t benefited  by\t the
\nacquisition.  The acquisition in question must indicate that
\nit was towards the welfare of the people and not to  benefit
\na   private  individual\t or  group  of\tindividuals   joined
\ncollectively.  Therefore, acquisition for anything which  is
\nnot  for  a  public purpose  cannot  be\t done  compulsorily.
\nAdmittedly, there is no group housing scheme approved by the
\nState  Government.  On the other hand, housing\tschemes\t are
\nbeing executed by the A.P. Housing Board under the Act.\t  We
\nare  not concerned with the public purpose as amended  under
\nthe 1984 Act.\n<\/p>\n
4.   The Act recognises dichotomy, namely, acquisition for a
\npublic\tpurpose in Chapter 11 and acquisition for a  private
\npurpose\t of a type restricted in Chapter VII.  There  is  no
\nprovision in the Act to say that when a land is required for
\na company, it may also be for a public purpose.\t  Therefore,
\nif a company, namely a Cooperative Society registered  under
\nthe  Central or State Cooperative Societies  Act,  preceding
\n1984 Amendment Act, had to acquire the land it had to do  so
\nin  strict  compliance with Chapter VII.   If  the  company,
\n(Cooperative  Society) requires land for any  purpose  other
\nthan  those  mentioned\tin Section 40,\tthen  no  compulsory
\nacquisition  under  the Act is possible.  Part\tVII  nowhere
\nauthorises  the\t Government to apply the provision  of\tthat
\npart  to  private  acquisition.\t A.P.  State  Amendment\t Act
\nexpressly included acquisition for providing house sites for
\nthe poor; for the execution of any housing scheme under A.P.
\nHousing Boards Act; godowns for a cooperative society as for
\npublic\tand urgent purposes.  By necessary  implication\t the
\nacquisition for a Private Cooperative House Building Society
\nto  construct  houses  for its members\tmust  be  a  private
\npurpose.\n<\/p>\n
680<\/span><\/p>\n
5.   Section 39 (preceding 1984 Amendment Act) provides that
\nthe provisions of Sections 6 to 37 both inclusive shall\t not
\nbe put into force in order to acquire land for any  company,
\nunless\t with  the  previous  consent  of  the\t appropriate
\nGovernment  or\tunless the company shall have  executed\t the
\nagreement  thereinafter mentioned.  Section 40 enjoins\tthat
\nsuch  consent  shall  not be given  unless  the\t appropriate
\nGovernment  be\tsatisfied,  either  on\tthe  report  of\t the
\nCollector  under  sub-section (2) of Section 5-A, or  by  an
\ninquiry held as hereinafter provided-\n<\/p>\n
\t      (a)that  the purpose of the acquisition  is
\n\t      to  obtain land for the erection\tof  dwelling
\n\t      houses for workmen employed by the company  or
\n\t      for   the\t provision  of\tamenities   directly
\n\t      connected therewith, or
\n\t      (aa)   that  such\t acquisition  is   for\t the
\n\t      construction  of some building or work  for  a
\n\t      company  which is engaged or is  taking  steps
\n\t      for  engaging itself in any industry  or\twork
\n\t      which is for a public purpose, or\n<\/p><\/blockquote>\n
\t      (b)that\tsuch  acquisition  is\tfor   the
\n\t      construction of some work, and that such\twork
\n\t      is likely to prove useful to the public.\n<\/p><\/blockquote>\n
6.   Under  Section  41, if the\t appropriate  Government  is
\nsatisfied,  after  considering the report, if  any,  of\t the
\nCollector  under sub-section (2) of Section 5-A, or  on\t the
\nreport\tof the officer making an inquiry under\tSection\t 40,
\nthat  the  proposed acquisition is for any of  the  purposes
\nreferred to in clauses (a) or (aa) or (b) of sub-section (1)
\nof Section 40, it shall require the company to enter into an
\nagreement with the appropriate Government, providing to\t the
\nsatisfaction of the appropriate Government for the following
\nmatters, namely,-\n<\/p>\n
\t      (1)the\tpayment\t  to   the    appropriate
\n\t      Government of the cost of the acquisition;
\n\t      (2)   the\t transfer, on such payment,  of\t the
\n\t      land to the company;\n<\/p>\n
\t      (3)   the\t terms\ton which the land  shall  be
\n\t      held by the company;\n<\/p>\n
\t      (4)   where the acquisition is for the purpose
\n\t      of  erecting dwelling houses or the  provision
\n\t      of  amenities  connected therewith,  the\ttime
\n\t      within which, the conditions on which and\t the
\n\t      manner   in  which  the  dwelling\t houses\t  or
\n\t      amenities shall be erected or provided;\n<\/p>\n
\t      (4-A)    where   acquisition   is\t  for\t the
\n\t      construction  of\tany building or work  for  a
\n\t      company  which is engaged or is  taking  steps
\n\t      for  engaging itself in any industry  or\twork
\n\t      which  is for public purpose, the time  within
\n\t      which,   and  the\t condition  on\twhich,\t the
\n\t      building\tor  work  shall\t be  constructed  or
\n\t      executed; and
\n\t      (5)where\t the  acquisition  is\tfor   the
\n\t      construction  of\tany  other  work,  the\ttime
\n\t      within which and the conditions on which,\t the
\n\t      work shall be executed and maintained, and the
\n\t      terms  on which the public is entitled to\t use
\n\t      the work.\n<\/p>\n
7.   Under Section 42, every such agreement shall as soon as
\nmay  be\t after its execution, be published in  the  Official
\nGazette and shall thereupon, so far as regards the terms  on
\nwhich the public shall be entitled to use the work,
\n 681<\/span>
\nhave  the same effect as if it had formed part of  the\tAct.
\nExplanation engrafted in Section 43 is not material for\t the
\npurpose of the case.  Section 44-A provides that no  company
\nfor  which  any land is acquired under this  Part  shall  be
\nentitled  to transfer the said land or any part\t thereof  by
\nsale,  mortgage,  gift, lease or otherwise except  with\t the
\nprevious  sanction of the appropriate  Government.   Section
\n44-B  enjoins  that, notwithstanding anything  contained  in
\nthis  Act, no land shall be acquired under this Part  except
\nfor  the purpose mentioned in clause (a) of sub-section\t (1)
\nof  Section  40,  for a “private company”  which  is  not  a
\nGovernment company.\n<\/p>\n
8.   Explanation.-   ‘Private\tcompany’   and\t ‘Government
\ncompany’  shall have the meanings respectively\tassigned  to
\nthem  in  the  Companies Act, 1956 (1  of  1956).   A  plain
\nreading\t of  the  fascicule  of\t these\tprovisions   clearly
\nindicates  the distinction, statute has\t envisaged,  namely,
\nacquisition  for  a  public purpose and\t acquisition  for  a
\nprivate purpose.  Even the acquisition for a company, unless
\nutilisation of the land so acquired is integrally  connected
\nwith public use, resort to the compulsory acquisition  under
\nChapter\t VII  cannot  be had.  Even  when  Chapter  VII\t was
\ninvoked,  the requirements of Section 40 and Section 41\t are
\nmandatory  and\tshall  be strictly  complied  with.   It  is
\nclearly\t discernible  from  scheme  of\tthe  acquisition  in
\nChapter\t VII that the land can be acquired for the  erection
\nof  dwelling-houses for workmen employed by the\t company  or
\nfor the provisions of amenities directly connected therewith
\nor needed for the construction of some building or work\t for
\na  company which is engaged or is taking steps for  engaging
\nitself in any industry or work which is for a public purpose
\nor  is\tneeded for the construction of some  work  which  is
\nlikely\tto  prove  useful to  the  public.   Notwithstanding
\nanything contained in the Act, i.e., despite the  compliance
\nwith  Chapter VII, DO land should be acquired under  Chapter
\nVII  except for the purpose mentioned in clause (a) of\tsub-
\nsection\t (1) of Section 40, for a private company  which  is
\nnot a Government company and that such company shall not  be
\nentitled after the acquisition under Chapter VII to transfer
\nthe  said land or any part thereof by sale, mortgage,  gift,
\nlease or otherwise except with the previous sanction of\t the
\nappropriate Government.\t The object therefore, appears to be
\nthat the land acquired under Chapter VII shall always remain
\nto serve the public purpose, beneficial to the public, It is
\nnot open to the Government to waive any of the provisions in
\nPart  VII.  The provisions contained therein have  mandatory
\noperation.  The object of Sections 44-A and 44-B appears  to
\nbe  that  they\tintend to safeguard  public  interest.\t The
\ncompany\t acquiring the land for a public purpose in  Chapter
\nVII may, after the acquisition has become final, divert\t the
\nland  for  private profit motive,  defeating  the  purported
\npublic\tpurpose\t for which the acquisition  was\t made.\t The
\nGovernment company obviously does not alienate such property
\nfor  private gain since the profits merge into public  fund.
\nWhile\tthe  private  company  could  get  acquisition\t but
\nthereafter   become  free  to  dispose\tof   the   property.
\nTherefore, the acquisition for a private company get limited
\nonly  for  purposes  envisaged under  Section  40(1)(a)\t and
\nthereby the public
\n682<\/span>
\npurposes  envisaged therein get safeguarded  and  protected.
\nThe   dominant\tpurpose\t of  public  utility  pervades\t the
\nprovisions in Chapter VII of the Act.\n<\/p>\n
9.   A\tprivate company is defined under the Companies\tAct,
\n1956.\tThe private Cooperative House Building Society\tdoes
\nnot  become a private company under Section 44-A of the\t Act
\nand  Section 44-B prohibits transfer by way of sale etc.  of
\nthe land so acquired under Part VII.  Therefore, the Private
\nCooperative  Housing  Society  registered  under  the\tA.P.
\nCooperative  Societies\tAct is not a company  under  Section
\n3(e)  of  the  Act entitling to\t invoke\t the  provisions  in
\nChapter VII.\n<\/p>\n
10.The question, therefore, is whether the contribution of
\nRs 100 for each declaration from the public exchequer  would
\nmake  the private purpose “a public purpose”  under  Section
\n3(f) of the Act.\n<\/p>\n
11.In  Somavanti  Smt v. State of Punjab, the<\/a>  facts  were
\nthat  the Government of Punjab issued a\t notification  under
\nSection\t 4(1) acquiring the petitioners’ land for a  private
\ncompany to set up a factory to manufacture various ranges of
\nrefrigeration  compressors  and\t ancillary  equipment.\t  An
\ninquiry\t  under\t Section  5-A  was  dispensed  with  and   a
\ndeclaration  under Section 6 was published.  The  Government
\ncontributed  Rs\t 100  from public exchequer.   When  it\t was
\nquestioned  by a petitioner under Article 32, this Court  at
\np.  805 and p. 818 held that it is for the State  Government
\nto decide about a public purpose.  If the purpose is  within
\nthe   legislative   competence,\t the  declaration   of\t the
\nGovernment in that behalf will be final, however, subject to
\none exception, being that if there is a colourable  exercise
\nof  power, the declaration will be open to challenge at\t the
\ninstance of the aggrieved party.  It was contended that when
\nthe Government contributed a token money and when the entire
\ncompensation  of  the  land  was to be\tmet  by\t a  company,
\ndeclaration  under Section 6 would be a colourable  exercise
\nof  the power and thereby the acquisition was mala fide\t and
\ninvalid.   In  that  context,  this  Court  considered\t the
\nquestion and laid at p. 817 that:\n<\/p>\n
\t      “We  would, however, guard  ourselves  against
\n\t      being   understood   to  say  that   a   token
\n\t      contribution by the State towards the cost  of
\n\t      acquisition will be sufficient compliance with
\n\t      the law in each and every case.  Whether\tsuch
\n\t      contribution  meets  the\trequirement  of\t law
\n\t      would  depend  upon the facts of\tevery  case.
\n\t      Indeed the fact that the State’s\tcontribution
\n\t      is  nominal may well indicate,  in  particular
\n\t      circumstances that the action of the State was
\n\t      a\t colourable  exercise  of  power.   In\t our
\n\t      opinion,\t‘part’ does not necessarily  mean  a
\n\t      substantial part, and that it would be open to
\n\t      the Court in every case which comes up  before
\n\t      it to examine whether the contribution made by
\n\t      the State satisfies the requirement of law.”\n<\/p><\/blockquote>\n
In  that  case\tit  was\t found\tthat  the  company  was\t  to
\nmanufacture  refrigeration  equipment  and  its\t accessories
\nwhich  would save substantial part of foreign  exchange\t and
\nconstruction  of  the quarters for workmen would also  be  a
\npublic\tpurpose.   Accordingly it was held that\t though\t the
\ncompany was a
\n1  (1963) 2 SCR 774 : AIR 1963 SC 151 : (1963) 33  Comp\t Cas
\n745<\/span>
\n 683<\/span>
\nprivate company, acquisition was not a colourable device  to
\navoid  the  rigour  of\tPart VII.  In  that  behalf  it\t was
\namplified that if
\n\t      “[T]he  concern could acquire land for such  a
\n\t      purpose  (private) only after  complying\twith
\n\t      the provisions of Part VII and that the use of
\n\t      the  provisions  of Section 6(1) is  merely  a
\n\t      colourable device to enable respondent 6 to do
\n\t      something, which under terms of Section  6(1),
\n\t      could not be done.”\n<\/p>\n
In  view  of  the  finding that\t the  manufacturing  of\t the
\narticles  was for the benefit of the community and  to\tsave
\nsubstantial  part of foreign exchange and staff quarters  to
\nworkmen it was held that acquisition was for public purpose.
\nAcquisition without resort to Part VII did not constitute  a
\nfraud  on  State’s  power  to  acquire\tland  and  was\t not
\ncolourable  exercise of such powers.  In Indrajit C.  Parekh
\nv.  State  of  Gujarat2 nine proposals were  sent  by  E.S.I
\nCorporation,   a  company  incorporated\t under\tthe   Indian
\nCompanies Act to acquire certain plots of land in Dariyapur-
\nKazipur\t area  of  the city  of\t Ahmedabad  bearing  certain
\nnumbers\t to  establish\ta dispensary  for  Employees’  State
\nInsurance  Scheme at Ahmedabad.\t The Government\t contributed
\none rupee to each of the proposals and passed resolution  to
\nacquire\t the  private plots of land for the  above  purpose.
\nAfter receipt of the report under Section 5-A a\t declaration
\nunder  Section 6 was published.\t When they were\t challenged,
\nthe High Court dismissed the writ petition.  On appeal, this
\nCourt held that the public purpose of the E.S.I. Scheme\t was
\nnot disputed.  The only question was whether publication  of
\ndeclaration under Section 6 is a colourable exercise of\t the
\npower by the State Government.\tIn the light of those  facts
\nit  was held that the exercise of the power under Section  6
\ncould  not be held to be colourable exercise of\t the  power.
\nIn Bai Malimabu v. State of Gujarat3 for the construction of
\nstaff  quarters for employees and of the dispensary etc.  of
\nE.S.I.\tafter  Section\t4(1)  notification  followed  by  an
\ninquiry under Section 5-A and a declaration under Section  6
\nof the Act were published, the Government contributing Re  1
\ntowards\t the cost of acquisition.  This Court negatived\t the
\ncontention  that  contribution\tof  Re\t1  from\t the  public
\nexchequer for the purpose of acquisition of the land for the
\nuse  of E.S.I. Corporation was a colourable exercise of\t the
\npower.\t  In  Land  Acquisition\t Collector  v.\tDurga\tPada
\nMukherjee4  the\t Government<\/a> published a\t notification  under
\nSection\t 4(1)  of the Act that the lands  specified  therein
\nwere  needed  for  a public purpose,  namely,  expansion  of
\nfactory of the company at the expense of the company.\tWhen
\nit was objected to another notification was issued that\t the
\nland was needed for industrial development at public expense
\ncontributing token money.  It was contended that it was\t for
\nthe private purpose, namely, for the benefit of the company.
\nA Single Judge dismissed the writ petition but the  Division
\nBench allowed the appeal
\n2 (1975) 1 SCC 824
\n3    (1978) 2 SCC 373
\n4 (1980) 4 SCC 271 : (198 1) 1 SCR 573
\n684<\/span>
\nholding\t that there was no evidence produced that  the\tland
\nwas needed for public purpose and not for the benefit of the
\ncompany.   On  appeal this Court allowed and held  that\t the
\npublic purpose was for the industrial development which\t was
\na  public  purpose  and\t declaration  under  Section  6\t was
\nconclusive.  The person impugning on the ground of mala fide
\nor   colourable\t  exercise   of\t  the\tpower\tmust   prove
\naffirmatively.\t Even  in  the\tabsence\t of  production\t  of
\ndocumentary  evidence by the State, the onus does not  shift
\nthe burden that it is a mala fide or colourable exercise  of
\npower on the part of the State.\n<\/p>\n
12.In  Manubhai Jehtalal Patel v. State of  Gujarat5,  the
\nnotification issued under Section 4(1) and published in\t the
\nState  Gazette followed by an inquiry under Section 5-A\t and
\ndeclaration  under Section 6 for acquiring the land for\t the
\nState  Road Transport Corporation with a  contribution\tfrom
\nthe Gujarat State Revenue was impugned as being ultra  vires
\nof the power.  This Court held that the contribution of Re 1
\nfrom  the  State  Revenue  was adequate\t to  hold  that\t the
\nacquisition  was for public purpose with the State fund\t and
\nit was not illusory so as to invalidate the acquisition.  In
\nJhandulal  v. State of Punjab6, this Court held\t that  where
\nacquisition  is\t made  for a public  purpose,  the  cost  of
\nacquisition  for  payment  of compensation has\tto  be\tpaid
\nwholly\tor  partly  out of Public  Revenues,  or  some\tfund
\ncontrolled  or managed by a local authority.  On  the  other
\nhand,  in  the\tcase of an acquisition for  a  company,\t the
\ncompensation has to be paid by the company.  In such a\tcase
\nthere  can be an agreement under Section 41 for transfer  of
\nthe  land  acquired  by the Government\tto  the\t company  on
\npayment\t of the cost of acquisition, as also other  matters.
\nThe  agreement contemplated by Section 41 is to\t be  entered
\ninto between the company and the appropriate Government only
\nafter  the  latter  is satisfied about the  purpose  of\t the
\nproposed acquisition, and subject to the condition precedent
\nthat the previous consent of the appropriate Government\t has
\nbeen given to the acquisition.\tSection 6 is in terms,\tmade
\nsubject\t to  the  provisions of Part VII of  the  Act.\t The
\ndeclaration for acquisition for a company shall not be\tmade
\nunless the compensation to be awarded for the property is to
\nbe  paid by a company.\tIn the case of an acquisition for  a
\ncompany simipliciter, the declaration cannot be made without
\nsatisfying the requirements of Part VII.  But that does\t not
\nnecessarily  mean  that an acquisition for a company  for  a
\npublic\tpurpose\t cannot\t be made otherwise  than  under\t the
\nprovisions of Part VII, if the cost or a portion of the cost
\nof the acquisition is to come out of public funds.  In other
\nwords,\tthe  essential condition for acquisition  is  for  a
\npublic\tpurpose and that the cost of acquisition  should  be
\nborne,\twholly\tor in part, out of public funds.   Hence  an
\nacquisition  for  a company may also be made  for  a  public
\npurpose,  within  the meaning of the Act, if a part  or\t the
\nwhole  of  the cost of acquisition is met by  public  funds.
\nIf, on the other hand, the acquisition, for a company is  to
\nbe made at the cost entirely of the company itself, such  an
\nacquisition comes under the provisions of Part VII.  In that
\ncase the Government have sponsored
\n5  (1983) 4 SCC 553
\n6 AIR 1961 SC 343 : (1961) 2 SCR 459
\n 685<\/span>
\nthe Housing Scheme and substantial amount has been  extended
\non  the scheme out of the Government revenue in the form  of
\nsubsidies  and\tloans.\t The acquisition was  also  for\t the
\nconstruction  of  the  quarters for the\t workmen  under\t the
\nGovernment sponsoring Housing Scheme for industrial workers.
\nUnder  those circumstances it was held that the\t acquisition
\nfor  the  company was for public purpose.  We  may  make  it
\nclear at once that a token contribution from public revenue,
\nunder\tall  circumstances  cannot  be\tconsidered   to\t  be
\ncolourable  exercise of power.\tEach case must\tfurnish\t its
\nbackdrop  whether the acquisition is for public\t purpose  or
\nfor  a\tprivate purpose.  The facts and\t circumstances\tmust
\ncarefully be scrutinised to reach a finding.\n<\/p>\n
13.This Court in Virupaxappa Veerappa Kadampur v. State of
\nMysore7 construing Section 161(1) of the Police Act and\t the
\nwords (under the colour of duty) interpreted to include acts
\ndone  under the cloak of duty, even though not by virtue  of
\nthe duty, when the police officer prepares a false panchnama
\nor a false report, he is clearly using the existence of\t his
\nlegal duty as a cloak for his corrupt action or as a veil of
\nhis  falsehood.\t  The acts thus done in dereliction  of\t his
\nduty  must  be held to have been done under  colour  of\t the
\nduty.\tIn Stroud’s Judicial Dictionary, “Colour of  office”
\nwas  defined  as  is always taken in  the  worst  part,\t and
\nsignifies an act evil done by the countenance of an  office,
\nand it bears a dissembling face of the right of the  office,
\nwhereas\t the office is but a veil to the falsehood, and\t the
\nthing  is grounded upon vice, and the office is as a  shadow
\nto  it.\t In Blacks Law Dictionary, “under color of any\tlaw”
\nof  a  State include not only acts done by  State  officials
\nwithin\tthe bounds on limits of their lawful authority,\t but
\nalso acts done without and beyond the bounds of their lawful
\nauthority;  provided that, in order for unlawful acts of  an
\nofficial  to be done under colour of any law,  the  unlawful
\nacts  must  be\tdone while such official  is  purporting  or
\npretending to act in the performance of his official duties;
\nthat  is to say, the unlawful acts must consist in an  abuse
\nor  misuse of power which is possessed by the official\tonly
\nbecause he is an official; and the unlawful acts must be  of
\nsuch  a\t nature or character, and be  committed\t under\tsuch
\ncircumstances, that they would not have occurred but for the
\nfact  that the person committing them was an  official\tthen
\nand there exercising his official powers outside the  bounds
\nof  lawful authority.  It would thus be clear that  when  an
\nact is done by the State under colour of authority of law it
\nmust be for the lawful purpose envisaged under the Act.\t  If
\nthe purpose, namely, public purpose envisaged under the\t Act
\nis  not\t served\t then  the exercise  of\t the  power  of\t the
\ndeclaration  under Section 6 must be held to  be  colourable
\nexercise  of the power, though not with evil motive.  It  is
\nseen  that the appellant is a private society and it is\t not
\nfor  any  of the purposes under Section\t 40(1)(a)  or  under
\nSection\t 3(e)  of the Act.  It is for the  transfer  of\t the
\nacquired  land to the members of the society who are now  as
\nper the record
\n7 AIR 1963 SC 849 : 1963 Supp 2 SCR 6 : (1963) 1 Cri LJ 814
\n686<\/span>
\nplaced\tin  this  Court appear to  be  Advocates,  Chartered
\nAccountants, Businessmen and alleged to be possessed of more
\nthan  one  house.  The Government does not  appear  to\thave
\nbestowed its thought to these aspects while considering\t the
\nreport\t under\tSection\t 5-A  in  this\tperspective   before
\naccepting  the report and contributing a sum of Rs 100\teach
\nfrom  the public exchequer within the teeth of Sections\t 40;
\n41; 44-A and 44-B of the Act.  Thus it must be held that the
\nacquisition  and declaration published under Section 6 is  a
\ncolourable exercise of the power.\n<\/p>\n
14.The\t appeals  are  accordingly  dismissed  with   cost
\nquantified at Rs 10,000.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Srinivasa Coop. House Building … vs Madam G.Sastry on 3 May, 1994 Equivalent citations: 1994 SCC (4) 675, JT 1994 (4) 197 Author: K Ramaswamy Bench: Ramaswamy, K. PETITIONER: SRINIVASA COOP. HOUSE BUILDING SOCIETY LTD. Vs. RESPONDENT: MADAM G.SASTRY DATE OF JUDGMENT03\/05\/1994 BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. VENKATACHALA N. (J) […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-216089","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nSrinivasa Coop. 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