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CASE NO.: Appeal (civil)  5721-5725 of 2001

PETITIONER: State of Punjab and others

RESPONDENT: Sanjeet Singh Grewal and others

DATE OF JUDGMENT: 03/07/2007

BENCH: B.P. SINGH & ALTAMAS KABIR

JUDGMENT:

J U D G M E N T  

CIVIL APPEAL NOS. 5721-5725 OF 2001 State of Punjab and others                                    \005.Appellants                 Versus  Sanjeet Singh Grewal and others                                  \005.Respondents WITH CIVIL APPEAL NOS. 5727-5731 OF 2001 New Town Planning and Development                                              Authority for Anandgarh through Chief Administrator                                         \005.Appellant     Versus The Securities and Exchange                                  Board of India and others                                    \005.Respondents AND SPECIAL LEAVE PETITION (C ) NO.7946 OF 2002 State of Punjab and others                                    \005.Petitioners                 Versus  Jasmer Singh and others                                             \005.Respondents

B.P.SINGH, J.

       1.      In this batch of Civil Appeals by Special Leave the  common judgment and order of the High Court of Punjab and  Haryana at Chandigarh dated March 28, 2001 in Civil Writ Petition  Nos. 7291, 8708, 9047, 9143 and 16738 of 2000 has been impugned.   Civil Appeal Nos.5721 - 5725 of 2001 have been preferred by the  State of Punjab while Civil Appeal Nos.5727- 5731 of 2001 have been  preferred by the New Town Planning and Development Authority for  Anandgarh.  Special Leave Petition No.7946 of 2000 has been  preferred against the order of the High Court dated September 10,  2001 in Civil Writ Petition No.7050 of 2001 adjourning the writ  petition sine die awaiting the judgment of this Court in the aforesaid  Civil Appeals.  By this common judgment and order we proceed to  dispose of all the appeals before us as also the Special Leave Petition.

       2.      The facts of the case are not in dispute.  The State of  Punjab issued Notifications Exhibits P-1 to P-29 dated March 13,  2000 under Section 4 of the Land Acquisition Act, 1894 (hereinafter  referred to as ’the Act’) for acquisition of about 9354 acres of land in  29 villages of the district of Ropar.  The acquisition was proposed to  be made for "a public purpose namely for setting up of new town,  Anandgarh".  Objections were invited against the proposed  acquisition.  Several writ petitions were filed before the High Court  challenging the aforesaid Notifications alleging that the Notifications  had been issued in derogation of the provisions of the Punjab

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Regional and Town Planning and Development Act, 1995 (hereinafter  referred to as ’the Act of 1995’).  It was stated that to set up a new  town, the site had first to be selected by the Board constituted under  the Act of 1995.  The Board was thereafter required to designate a  planning agency.  This was not done.  The provisions of Sections 56,  57, 58 and 59 of the Act of 1995 were completely ignored.  Though  the New Town Planning and Development Authority for Anandgarh  was constituted by the Government on May 20, 1999 under Section 31  of the Act of 1995, in the absence of a decision of the Board under  Sections 56 and 57 of the Act of 1995, the aforesaid Special Town  Planning Authority for Anandgarh could not take up the planning and  development of the new township.  It was alleged that a large number  of influential persons including senior bureaucrats had bought land in  the area with a view to earn profit since the Government had  announced compensation at an exorbitant rate.  It was also submitted  that the provisions of the Punjab New Capital (Periphery) Control  Act, 1952 (hereinafter referred to as ’the Periphery Act’) and the rules  framed thereunder have been violated.  Apart from these legal  submissions it was also urged that the site was not suitable for a new  town.   

       3.      The appellants (respondents in the writ petitions)  contested the writ petitions and submitted that the State Government  having taken a decision to set up a new township Anandgarh, and  having appointed a Special Planning Authority under Section 31 of  the Act, the Board had no role to play in the matter and it was not  necessary that the Board should have first selected a site and  designated a planning agency before the Special Planning Authority  could take any action for planning and development of the new  township.  It was also submitted that the Periphery Act did not inhibit  the State of Punjab from acquiring land in the controlled area under  the Periphery Act for the purpose of setting up a township.   4.      Having regard to the submissions urged before it the  High Court formulated the following questions which fell for its  consideration:-

"(i) Are the provisions of the Punjab Regional and  Town Planning and Development Act, 1995  applicable to and attracted in the facts and  circumstances of the present case?

(ii)  If yes, have the provisions of the 1995 Act been  followed in the present case?  Does the selection of  the site for setting up the city of Anandgarh conform  to the requirements of the statute?

(iii) Have the respondents acted in violation of the  provisions of the Punjab New Capital (Periphery)  Control Act, 1952 and the Rules framed thereunder?

(iv)  Is the action of the respondents based on  extraneous considerations and vitiated by malafides?

(v)  Have the petitioners made out a case for  interference by this court under article 226 of the  Constitution of India?

5.      The High Court rejected the submission urged on behalf  of the State that the Act of 1995, particularly Section 56 thereof, was  not applicable when acquisition was made under the Land Acquisition  Act, since the two acts operated in two distinct and separate fields,  and that the provisions of the Act of 1995 were applicable only when  the Master Plan was sought to be implemented without acquisition of  land.  The High Court held that admittedly the Board under Section 56

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of the Act had not selected the site for the new township after  considering the objections and suggestionsas provided therein, nor did  the Government ever consult the Board in the matter.  It rejected the  argument of the State that the Act of 1995 was applicable only when  compensation was not payable.  It further held that the Government  itself proceeded on the basis that the Act of 1995 was applicable  inasmuch as it proceeded to implement its scheme through The New  Town Planning and Development Authority for Anandgarh  constituted under Section 31 of the Act of 1995 and it was on the  recommendation of the aforesaid authority that land was sought to be  acquired under Section 42 of the Act of 1995.  It therefore held that  the Act of 1995 was applicable.

       6.      Considering the question whether the provisions of the  1995 Act were followed, it noticed the concession made by the State  that the matter with regard to the selection of site for the new  township was never referred to the Board.  The New Town Planning  and Development Authority for Anandgarh constituted under Section  31 of the Act had considered three sites and forwarded its  recommendation to the Chief Town Planner who after examination of  the matter selected the site in question.  The matter was placed before  the State Cabinet for its approval which was granted on January 12,  2000.  On February 24, 2000 the aforesaid development authority  requested the State Government to acquire the lands in question and  accordingly the impugned Notifications were issued on March 13,  2000 under Section 4 of the Land Acquisition Act.  The High Court  after considering the Scheme of the Act upheld the contention urged  on behalf of the writ petitioners that only the Board constituted under  Section 3 of the Act of 1995 could, in exercise of its authority under  Sections 14 and 56 of the Act read with Rule 22, take a decision  regarding the selection of the site for a new town.  Only thereafter  further action could be taken by the State for constituting a Special  Agency for the planning and development of the new town under  Section 31 of the Act and which Agency could take further action for  the said purpose as was considered necessary.  The High Court  recorded its findings as under:-

"On a cumulative consideration of the provisions of  the Act, it appears clear to us that the act entrusts the  task of selecting the site for a new town to the Board.   Thereafter, a Master Plan has to be prepared in  accordance with the prescribed procedure.  After the  Master Plan is ready, the government is competent to  constitute a special agency for the planning and  development of the new town.  At the asking of this  authority, the government can proceed to acquire the  land.  Thus despite the provision for the constitution  of a Special Authority, the Board cannot be by- passed.  The selection of site is the job assigned to the  Board.  This is so obviously because it has and can  associate experts.  It can get assistance from others".

7.      Accordingly, the High Court held that the State action  did not conform to the requirements of the Act of 1995 and thus could  not be sustained.   

       8.      The High Court held that the provisions of the Periphery  Act, 1952 had also been violated.  It concluded that though Section 10  did not affect the power of the Government or any other authority to  acquire land in the controlled area under any other law for the time  being in force, yet the bar contained in Section 5 prohibited the  erection or buildings or making of roads even under the garb of  establishing a new town without permission of the competent  authority under the Periphery Act.  No such permission had been

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taken by the Government and yet the land was sought to be acquired  for the purpose of setting up a new town.  On the question of mala  fide the High Court did not record a categoric finding and gave to the  State the benefit of doubt.

       9.      Lastly, the High Court held that in the facts and  circumstances of the case the writ petitioners were entitled to relief  under Article 226 of the Constitution of India.

       10.     In the end the High Court recorded its conclusions in the  following words:- "(i)    Nature is beautiful.   But it demands obedience  to its ordinances.  When violated, the earth erupts and  we have earthquakes.  Man cannot continue to ’pick  nature’s pocket’.  He cannot raise multi-storeyed  monsters of steel and cement at every place.  All  places cannot be suitable for a new city.

(ii)    Recognising the need for a multi-disciplinary  consideration, the legislature had enacted the "Punjab  Regional and Town Planning and Development Act,  1995" and provided for the constitution of the Board  and other Authorities.  The Board consists of persons  who have knowledge or experience in the fields of  engineering, housing, town planning and urban  development.  It can associate others for the efficient  performance of its onerous functions.

(iii)   While embarking upon the project of the new  town \026 ’Anandgarh’, the State has not shown even a  scant regard for the salutary provisions of the statute.   It has acted against the express letter and spirit of the  Act.  It has not allowed the Board to perform its  functions.  In particular, it has not let the Board ’select  the site’ for the new city.  It has acted in contravention  of the statute.

(iv)    In the process, the government has deprived the  citizen of the opportunity to put forth the objections/  suggestions and denied itself the benefit of good  advice.

(v)     The mere fact that the government finds the  procedure prescribed by the Act and the Rules to be  lengthy or cumbersome and such as can result in delay  cannot be a ground to avoid obedience to the  provisions of law.  The courts cannot allow ’time’  taken in complying with the provisions to become the  graveyard of good laws or peoples’ rights.  

(vi)    The State government has also failed to  consider the objections raised and the relevant  suggestions made by the Union Ministries of Defence  and Urban Development.  Its action is likely to finish  the farms and farmers who live in the periphery of  Chandigarh.  

(vii)   The State government has proceeded to acquire  land without obtaining permission from the competent  authority under the provisions of the Punjab New  Capital (Periphery) Control Act, 1952 and the Rules.   Thus, it has proceeded to acquire land without being  entitled to raise any construction or even lay any  roads.  The entire proceedings can prove to be an  exercise in futility.

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(viii)  The courts do not count heads.  The mere fact  that the petitioners are few in number or that their  holdings are small is no ground to deny them the  relief as prayed for in these petitions.  Even the poor  are the God’s children.

(ix) There is a suspicion surrounding the action of the  State Government in acquiring the land.   There is a  smell.  But not a stink. Suspicion is not enough to  uphold the plea of mala fides.  Thus, the respondents  are entitled to a benefit of doubt when the entire  acquisition is challenged on the ground of extraneous  considerations.

(x)     The State is undoubtedly trying to keep its head  up and the expenses down.  However, its ability to  gather the resources to pay for the land and to develop  it, is extremely suspect and it’s wisdom doubtful".

11.     The High Court therefore struck down the impugned  Notifications issued under Section 4 of the Land Acquisition Act and  allowed the writ petitions.

       12.     The learned Advocate General for the State of Punjab  assailing the impugned judgment and order of the High Court  submitted that the High Court committed a basic error in coming to  the conclusion that it was only the Board constituted under Section 3  of the Act of 1995 which could select the site for a new town and take  all necessary action in connection therewith, and further that the  selection of a site could be challenged by any person not necessarily  an owner of land sought to be acquired.  He took us to the scheme of  the Act of 1995 as also some provisions of the Periphery Act.  He  described the Act of 1995 as a futuristic legislation providing for  modern planning and urban development with multi level institutions.   According to him Section 14 of the Act which laid down the functions  of the Board did not mandate that the site of a new town must be  selected by the Board.  In fact there was no other provision in the Act  of 1995 to this effect.  Sections 56, 57 and 61 of the Act permitted the  Government to decide where the new township should be located and  the State Government was not compelled to confine its choice to  locations selected by any other authority under the Act.  The State  Government is not required mandatorily to entrust the duty of  selection of the site of a new town to the Board.   In fact under Section  28 of the Act the State Government or the Board may entrust any of  the authorities to do any work for carrying out the purposes of the Act.   The powers that could be entrusted to the PUDA under Section 28 of  the Act by the State Government and the Board could also be  entrusted to the New Town Planning and Development Authority  constituted under Section 31 of the Act.  Indeed the State Government  had constituted the New Town Planning and Development Authority  for Anandgarh under Section 31 of the Act and therefore it was for the  said Town Planning and Development Authority to select the site and  to plan and develop the new township.  For this purpose it could  request the State Government to acquire lands as provided in Section  42 of the Act.  He further emphasized that the power of the Board was  only advisory in nature.  The State Government could entrust any  work to any of the authorities under the Act.  Power of the State was  not fettered even in the matter of selection of site and planning and  development of a new township.  The Town Planning and  Development Authority for Anandgarh was actually entrusted to do  all this and there was, therefore, no need for the Board to be called  upon to select the site and take other steps.  In fact the New Town  Planning and Development Authority for Anandgarh  was constituted

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under Section 31 of the Act of 1995 on May 20, 1999 which  recommended the acquisition of the lands in question pursuant to  which Notifications were issued under Section 4 of the Land  Acquisition Act on March 13, 2000.    

13.     Shri Sanjiv Sharma, learned Additional Advocate  General, in his supplementing arguments submitted that since the  functions of PUDA under Section 28 of the Act could be entrusted to  the Special Urban Planning and Development Authority constituted  under Section 29 and the New Town Planning and Development  Authority under Section 31 of the Act of 1995, the Board constituted  under Section 3 of the Act did not come into the picture at all.  He  also emphasized the fact that the challenge was to the Notifications  issued under Section 4 of the Land Acquisition Act asking not for a  writ of mandamus but for quashing the Notifications on the ground  that there existed no valid and legal public purpose for which the  acquisition was purported to be made.  According to him the scheme  of the Act left no room for doubt that the powers of the State  Government were wide enough to include selection of the site for a  new town.  Indeed the Board had no mechanism for selecting an  appropriate site for a new town and, therefore, the State Government  followed the route of Sections 28, 38 and 42 of the Act of 1995 i.e. by  conferring on the New Town Planning and Development Authority  constituted under Section 31 of the Act the powers and functions of  PUDA under section 28 of the Act, and then acquiring the land on the  recommendation of the New Town Planning and Development  Authority under Section 42 of the Act of 1995.  He further submitted  that if the High Court was right in its opinion the State would be  compelled to first move the Board for the purpose of selection of site.   This was wholly unnecessary because in all cases the sanctioning  authority being the State, its powers and authority must be interpreted  in that larger perspective.  He also submitted that there was no  requirement in law that a detailed plan complete in all respects must  precede the acquisition under the Land Acquisition Act.  He also  emphasized the provisions of Section 10 of the Perphiery Act and  submitted that the State was not inhibited from acquiring lands which  came within the controlled area under the Periphery Act, and this was  made explicit by Section 10 of the Periphery Act.   

14.     Mr. Vikas Singh, learned Additional Solicitor General,  appearing for PUDA in SLP ) No. 7946 of 2002 submitted that the  High Court adjourned the matter sine die awaiting the judgment of  this Court in view of the fact that it found certain common questions  arising in the Writ Petition.  However, he also made his submission on  merit since the principles laid down in this batch of appeals may apply  to the matter pending before the High Court. According to him the  acquisition is sought to be made under the Land Acquisition Act.   Section 56 does not at all contemplate compulsory acquisition.  The  High Court proceeded on the erroneous basis that the scheme should  first be formulated and only thereafter the acquisition of land could be  made.  This completely ignored the State’s power of eminent domain.    The State is not denuded of its power to acquire land merely because  under the scheme of some other Act a Board is constituted to select  the site for setting up a new town.  He referred to the Scheme of  Chapter XI of the Act of 1995 and submitted that the State may be  compelled to acquire land under Section 84 of the Act.  In this  connection he also referred to Section 71(3)(f) of the Act of 1995  which provides that the Draft Comprehensive Master Plan may  designate land subject to acquisition for any public purpose.  He,  therefore, submitted that the power of eminent domain under the Land  Acquisition Act cannot be curtailed by the Act of 1995 or any other  Act.  According to him after the selection of site for a new town under  Section 56 of the Act of 1995 there is no provision for compulsory  acquisition of land.  The site may be selected by the State as well as  by the Board constituted under Section 3 of the Act of 1995.  Where

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the compulsory acquisition route is followed the only procedure for  acquisition is the one under the Land Acquisition Act.  He buttressed  his submission by emphasizing that in case the Board did not act to  select the site, the State will be rendered powerless.  The price of land  may go up to such an extent that it may become practically impossible  to acquire land for the said purpose.  He also cited authorities in  support of his submissions which we shall consider later in this  judgment.

15.     Mr. J.S. Grewal, learned Senior Counsel, appearing on  behalf of the respondents referred to the background in which the Act  of 1995 was enacted.  He submitted that under the old Punjab Housing  Development Board Act 1952 the Board did not include any Minister  or public figure.  The Board consisted of officials of the State  Government.  Under the Act of 1995 the Board is a high power Board  presided over by the Chief Minister of the State.  He submitted that  the planning area as well as the planning agency has to be declared  and designated by the Board.  The Board has a very vital role to play  since it is the apex authority under the Act.  He submitted that if any  land is to be acquired under the Act of 1995, that must be done in  accordance with the procedure laid down for that purpose in the Act.   He, therefore, submitted that when any land is acquired for the  purpose of any authority under the Act of 1995, the State Government  may at the request of the authority concerned proceed to acquire land  under the provisions of the Land Acquisition Act.  On payment by the  authority of compensation awarded under the Land Acquisition Act  and of any other charges incurred in acquiring the land, the land shall  vest in the authority.  He emphasised the overriding effect of the Act  of 1995 and referred to Section 179 thereof.   He contended that for  setting up a new township provisions are made only in the Act of  1995 and, therefore, the provisions of the special Act must be  scrupulously followed.  He did not dispute the State’s power of  eminent domain and submitted that in appropriate cases the State may  acquire lands for public purposes.  However, if the land has to be  acquired under Section 42 of the Act of 1995 it must be acquired for  the purpose of the authority under the Act.  If the land is to be  acquired to set up a new town as stated  in the impugned notifications  the site must be selected in accordance with the provisions of the Act  of 1995.  He did not dispute that if the Government proposes to  acquire any land under the Land Acquisition Act for any purpose not  covered by the Act of 1995, the provisions thereof will not be  attracted.  In the instant case, he submitted that the site was in fact  selected by the New Town Planning Development Authority  constituted under Section 31 of the Act and not by the Board.  This  was clearly contrary to the provisions of Section 56 which in terms  provided that it was the Board which was authorized to declare its  intention by issuance of Notification in the Official Gazette to specify  any area in the State to be a regional planning area, a local planning  area or the site for a new town.  Thereafter it was again the Board  which could designate the planning agency for that area for the  purpose of performance of the functions assigned to it. Thus, so far as  the selection of site for a new town is concerned, the site has to be  identified by the Board and after hearing objections the Board could  declare the site for a new town.  He further drew a distinction between  the selection of a site for a new town, and preparation of plans for  development of the selected site.  The planning may be entrusted by  the Board to any of the authorities under the Act who may be called  upon by the State Government or the Board to take up the work in  connection with the preparation and implementation of regional plans,  master plans, new township plans, schemes etc.  According to him  before any of the authorities could be called upon to do so, in the case  of setting up of a new town, the existence of a selected site was a pre- condition because no development could take place unless the site was  first selected.  He, therefore, fully supported the findings of the High  Court and submitted that in the absence of a validly selected site for a

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new township by the Board, no planning and development work could  be entrusted to any of the authorities under the Act.  The selection of  site which amounted to declaration of a planning area was entrusted to  the Board under Section 56 of the Act and the authority constituted  under Section 31 for the development of the township could not be  entrusted with the task of selecting the site and declaring a planning  area.  16.     To appreciate the submissions urged on behalf of the  parties it is necessary to notice some of the salient provisions of the  Act of 1996.  The Act purports to be:-

"An Act to make provision for better planning and  regulating the development and use of land in  Planning areas delineated for that purpose, for  preparation of Regional Plans and Master Plans and  implementation thereof; for the constitution of a State  Regional and Town Planning and Development  Board, for guiding and directing the planning and  development processes in the State; for the  constitution of a State Urban Planning and  Development Authority.  Special Urban Planning and  Development Authorities and New Town Planning  and Development Authorities, for the effective and  planned development of planning areas; and for  undertaking urban development and housing  programmes and schemes for establishing new towns;  and for matters connected therewith or incidental  thereto".

       "Authority" has been defined as follows :-   2(d)    "Authority" means the Punjab Urban Planning  and Development Authority constituted under Section  17 or a Special Urban Planning and Development  Authority constituted under Section 29 or a New  Town Planning and Development Authority  constituted under Section 31."

       Sections 2(za) and 2(zb) define the "planning agency" and the  "planning area":-

"2(za)  "Planning Agency" means the Punjab Urban  Planning and Development Authority, a Special  Urban Planning and Development Authority, a New  Town Planning and Development Authority, a local  authority or the Town and Country Planning Wing of  the Department of Housing and Urban Development,  designated as such by the Board under Section 57 of  this Act for a planning area.

2(zb)   "planning area" means a regional planning area,  a local planning area or a site for a new town declared  as such under Section 56 of this Act."           

17.     The Punjab Regional and Town Planning and  Development Board is established under Section 3 of the Act of 1995.   Section 3 reads as under:-

"3.     Establishment of the Board. \026 As soon as may  be, after the commencement of this Act, the State  Government shall, by notification in the Official  Gazette, establish for the purposes of carrying out the  functions assigned to it under this Act, a Board to be

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called the Punjab Regional and Town Planning and  Development Board".

       18.     Section 4 provides for the constitution of the Board  which shall consist of a Chairman, Vice Chairman, a Member  Secretary , not more than 12 ex officio members to be nominated by  the State Government from amongst the Ministers including the  Minister-in-charge of Housing and Urban Development and Local  Government and the Secretaries to Government of Punjab etc. and not  more than three non-official members to be nominated by the State  Government.  The Chief Minister of Punjab and the Minister-in- Charge of Housing and Urban Development shall be respectively the  Chairman and the Vice-Chairman of the Board.  The functions of the  Board are contained in Section 14 which provides as under :-  

"14.    Functions of the Board:- (1)  Subject to the  provisions of the Act and rules framed thereunder, the  functions of the Board shall be to advise the State  Government and to guide and direct the planning  agencies, with respect to matters relating to the  planning, development and use of urban and rural land  in the State, and to perform such other functions as the  State Government, from time to time, assign to it".

(2)      In particular and without prejudice to the  generality of the foregoing provisions, the Board may  and shall, if required by the State Government .-

(a)     determine the regions, cities, towns, or a  part of a city or a site for new town or  preparation of Regional Plans or Master  Plans ;

(b)     direct the preparation of Regional Plans  or Master Plans or other documents  necessary therefor to be prepared by any  of the Planning Agencies ;

(c)      undertake, direct or advise on all matters  pertaining to the coordination in the  planning and implementation of physical  development programme ;

(d)     collect, maintain and publish statistics  and monographs on regional and town  planning and perform any other functions  which are supplemental, incidental or  consequential to any of the functions  referred to in this sub-section or which  may be prescribed."  

19.     It would thus be seen that the Board constituted under  Section 3 of the Act is a high-powered authority with the Chief  Minister at its head.  It is no doubt true that the Board may be called  upon by the State Government to do certain things as are enumerated  in sub-section (2) of Section 14, but it is equally true that even without  the directions of the State Government the Board may itself perform  those functions.  Section 14 does say that the functions of the Board  shall be to advise the State Government and to guide and direct the  planning agencies and to perform such other functions as the State  Government, from time to time, assign to it.  This, however, should  not lead to the conclusion that the Board, a statutory authority, can be  ignored by the State Government altogether.  It may be that the advice  tendered by the Board may not be acceptable to the State Government,

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but that is quite different from suggesting that having regard to the  overriding powers of the State Government the Board may not be  consulted at all even with regard to the matters and functions which it  is required to perform under the Act.   It is also worth noticing that the  matters referred to in Clause (a) include the determination by the  Board of a site for new town.  While the Board may under Clause (b)  direct the other planning agencies to prepare the Regional Plans or  Master Plans, determination of a site for new town cannot be  delegated by the Board to the planning agencies.  The functions to be  performed by the Board as enumerated in Section 14 are not  exhaustive, and cannot be, by the very nature of the functions to be  performed by the Board.  Section 14 should not be read in isolation.  The other provisions of the Act have also to be read to understand the  powers and authority of the Board, and one such provision is Section  56 of the Act.  It is useful at this stage to notice the provisions of  Sections 56 and 57, which are as under:-   

"56.    Declaration of Planning Areas. \026 (1) The Board  may, from time to time, by notification in the Official  Gazette, declare its intention to specify any area in the  State to be a regional planning area, a local planning  area or the site for a new town (hereinafter referred to  as the planning area).

(2)     Before making the declaration under sub- section (1) the Board may take into consideration such  matters as may be prescribed.

(3)     Every notification published under sub-section  (1) shall define the limits of the area to which it  relates.

(4)     Any person including representative of a  Department of the State Government or the Central  Government or a local authority or any other  institution may, within sixty days from the date of the  publication of the notification under sub-section (1),  submit any objections or suggestions in writing  relating to anything contained in that notification, to  the Board and the Board shall consider all such  objections and suggestions.

(5)     After the expiry of two months from the date of  publication of the notification under sub-section (1)  and after considering objections and suggestions, if  any, received under sub-section (4), the Board may,  by notification in the Official Gazette,-

(a)     declare the area with or without any  modification to be a regional planning  area, a local planning area or a site for a  new town, as the case may be ; and

(b)     specify the name of the regional planning  area or the local planning area or a site  for the new town, as the case may be.

(6)     Except in such class or category of cases which  the Board may in its regulation exempt and except in  the case of operational construction or construction in  any area comprised in abadi-deh of any village falling  inside its lal lakir or phirni, no person shall, on or after  publication of public notice under sub-section (5) and  till the date the Regional Plan or the Master Plan  comes into operation under Section 64 or under

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Section 75, as the case may be, institute or change the  use of land for any purpose or carry out any  development in respect of any land without the  previous permission of the Competent Authority and  the provisions of Sections 67 and 68 mutatis mutandis  shall apply to the grant of such permission.

(7)     The Board may, after following the procedure  as laid down in this section, alter the limits of any  regional planning area, local planning area or the site  for a new town.  

57.     Designation of Planning Agencies. \026 As soon as  may be after declaration of a regional planning area, a  local planning area or a site for new town, the Board  may for the purpose of the performance of the  functions assigned to it, designate planning agency for  that area :.   

Provided that more than one planning agencies  may be designated to perform different  functions."

20.     A mere perusal of these provisions amply clarifies that  the Board has been authorized to declare its intention to specify any  area in the State :- (i)     to be a regional planning area ; (ii)    a local planning area ; and  (ii)    a site for a new town.     

An area so specified is referred to as "the planning area".  Thus what  applies to a planning area such as a site for a new town, also applies to  a regional planning area or a local planning area.  The planning area  undoubtedly has to be declared by the Board after following the  procedure laid down in Section 56.  Before making a declaration of its  intention to specify a planning area under sub-section (1) the Board  has to consider such matters as may be prescribed under the rules.   The limits of the specified area have to be clearly defined and a  Notification published in the Official Gazette declaring the intention  of the Board to specify a planning area.  Under sub-section (4) of  Section 56 objections and/or suggestions may be made which have to  be considered by the Board, whereafter the Board may by Notification  in the Official Gazette declare the area with or without any  modification to be a regional planning area, a local planning area or a  site for a new town, as the case may be.  It is further required to  specify the name of the planning area so declared.  Having done so,  the Board is required to designate the planning agency for that area for  the purpose of performance of the functions assigned to it.   

       21.     On a perusal of Sections 56 and 57 of the Act of 1995 we  entertain no doubt that it is the Board which has to, by Notification in  the Official Gazette, specify an area as a regional planning area, a  local planning area or a site for a new town clearly defining the limits  of the area.  After considering the objections and suggestions that may  be received by it the Board may with or without modifications declare  the area to be a planning area by Notification in the Official Gazette,  and thereafter appoint a planning agency for performance of the  functions related thereto.   No provision of the Act has been shown to  us which authorizes any other agency or authority under the Act to  declare a planning area which includes the site for a new town.  This  function has to be performed only by the Board and that too after  entertaining objections and suggestions and considering them in  accordance with the Act and the Rules.  Not only individuals but even  representatives of the departments of the State Government or the

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Central Government or a local authority or any other institution may  submit its objections or suggestions relating to anything contained in  the Notification.  So construed, in the case of setting up of a new  township, the first step to be taken by the Board is to declare a  planning area viz. select a site for the new town after entertaining  objections and considering the same.  Thereafter the Board may  designate the planning agency for the purposes of performance of the  functions assigned to it.  There is nothing in Sections 56 and 57 which  can persuade us to hold that the planning agency itself may select the  site for a new town.  This would become apparent after we consider  some of the other provisions of the Act.    

       22.     Section 17 provides for the establishment and  constitution of the Authority to be known as the Punjab Urban  Planning and Development Authority (PUDA for short).  The  authority is a body corporate as well as a local authority.  The  Minister-in-Charge of Housing and Urban Development is its  Chairman.  The functions of the authority are enumerated in Section  28 which reads as follows :-  

"28.  Objects and functions of the Authority \026 (1) The  objects of the Authority shall be to promote and  secure better planning and development of any area of  the State and for that purpose the Authority shall have  the powers to acquire by way of purchase, transfer,  exchange or gift or to hold, manage, plan develop and  mortgage or otherwise dispose of land or other  property or to carry out itself or in collaboration with  any other agency or through any other agency on its  behalf, building, engineering, mining and other  operations to execute works in connection with supply  of water, disposal of sewerage, control of pollution  and other services and amenities and generally to do  anything with the prior approval or on direction of the  State Government, for carrying out the purposes of  this Act.

(2)     In particular and without prejudice to the  generality of the foregoing provisions, the Authority  itself or in collaboration with any other agency or  through any other agency on its behalf. -

(i)     if so required by the State Government or  the Board, take up the works in connection with  the preparation and implementation of Regional  Plans, Master Plans and New Township Plans,  and town improvement schemes;

(ii)    undertake the work relating to the  amenities and services to be provided in the  urban areas, urban estates, promotion of urban  development as well as construction of houses.

(iii)   promote research, development of new  techniques of planning, land development and  house construction and manufacture of building  material;

(iv)    promote companies, associations and other  bodies for carrying out the purposes of the Act;  and

(v)     perform any other functions which are  supplemental, incidental or consequential to any  of the functions referred to in this sub-section or

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which may be prescribed".   

23.     Clause  (1) of sub-section (2) of Section 28 is significant.   It provides that the State Government or the Board may require the  authority (PUDA) to take up the works in connection with the  preparation and implementation of Regional Plans, Master Plans and  New Township Plans, and town improvement schemes.  It does not  empower PUDA to declare the site for a new town as a planning area  though it is authorized to prepare and implement new township plans.   It can, therefore, be safely concluded that after a site for a new town is  selected by the Board and declared as a planning area in exercise of its  powers under Section 56 of the Act, the authority designated as the  planning agency for that area, can take up the works in connection  with the preparation and implementation of new township plans.   24.     Section 29 provides for the constitution of Special Urban  Planning and Development Authorities.  The Special Authority is  constituted if the State Government is of the opinion that the object of  proper development of any area or group of areas together with such  adjacent areas as may be considered necessary will be best served by  entrusting the work of development or redevelopment thereto to a  Special Authority, instead of PUDA.   Where the State Government is  so satisfied it may, by Notification, constitute such a Special  Authority for that area and thereupon, all the powers and functions of  PUDA relating to development and redevelopment of that area under  the Act shall be exercised and performed by the Special Authority so  constituted.  Section 29, therefore, enables the State Government to  constitute a Special Urban Planning and Development Authority for  the proper development of an area or a group of areas.  The Special  Authority so constituted has all the powers of PUDA relating to  development and redevelopment of that area.                 25.     Under Section 30 it is also open to the State Government  to designate a local authority as Special Urban Planning and  Development Authority and confer upon it all the powers and  functions of PUDA.

       26.     Apart from PUDA and Special Urban Planning and  Development Authority, Section 31 provides for the constitution of a  special authority described as the New Town Planning and  Development Authority.   Sections 31 reads as follows :-         

31.     "New Town Planning and Development  Authority:  (1) Where the State Government is of  opinion that object of proper planning and  development of a site of a new town will be best  served by entrusting the work of development thereof  to a Special Authority, instead to the Punjab Urban  Planning Authority, it may, by notification, constitute  a Special Authority for that site to be called the New  Town Planning and Development Authority and  thereupon, all the powers and the functions of the  Punjab Urban Planning and Development Authority  relating to the development of that site of the new  town under this Act shall be exercised and performed  by such New Town Planning and Development  Authority.

(2)     A New Town Planning and Development  Authority constituted under sub-section (1), shall be a  body corporate as well as local authority by the name  aforesaid having perpetual succession and a common  seal, with power to acquire, hold and dispose of  property, both movable and immovable and to  contract, and by the said name sue and be sued.

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(3)     A New Town Planning and Development  Authority will consist of the following members,  namely :-

(i)     a Chairman,

(ii)    a Chief Administrator who shall be  appointed amongst the officers of the  Government of Punjab having such  qualifications and experience as may be  prescribed; and

(iii)   other members not exceeding ten to be  appointed by the State Government.

(4)     The provisions of this shall mutatis mutandis  apply to a New Town Planning and Development  authority as they apply in relation to the Punjab  Urban Planning and Development Authority, with the  modification that references to the Punjab Urban  Planning and Development Authority shall be  construed as references to a New Town Planning and  Development Authority".

27.     It is under this provision that the State Government  proceeded to constitute the New Town Planning and Development  Authority for Anandgarh on May 20, 1999.  A reading of the  provision clarifies that the New Town Planning and Development  Authority is constituted with the object of proper planning and  development of a site for new town.  It is with this in view that  Section 32 entrusts the New Town Planning and Development  Authority with the duty to plan and develop the site of a new town.  It  is for this purpose that all the powers and functions of PUDA relating  to the development of the site of a new town are to be exercised and  performed by the said New Town Planning and Development  Authority.  The fact that it is entrusted with the task of proper  planning and development of a site of a new town itself pre-supposes  the existence of a selected site.  Neither the PUDA nor the authority  constituted under Section 17 nor the New Town Planning and  Development Authority constituted under Section 31 is vested with  the power to declare a planning area such as a site of a new town.  On  the other hand Section 56 clearly vests the power to declare a planning  area in the Board, and the site of a new town is one such planning  area, apart from regional planning area and local planning area. This  has to be done, as we have earlier noticed, after considering the  objections to the Notification declaring an intention to specify an area  as a site for a new town defining its limits.  Sub-section (e) of Section  56 mandates that every Notification declaring the Board’s intention to  specify an area as the site for a new town must define the limits of the  area to which it relates.  Obviously, therefore, the Notification issued  under sub-section (1) of Section 56 declaring the intention of the  Board to specify an area as the site for a new town must define the  limits of the area to which it relates meaning thereby that the Board  must while declaring its intention to specify an area as a planning area  give all the necessary particulars as required under sub-section (1) of  Section 56 and consider the objections thereto.  From the very scheme  of the Act of 1995, and having regard to the clear provisions of  Section 56 thereof, there can be no doubt that the planning area has to  be declared by the Board with specificity and only after considering  the objections and suggestions made. One of the authorities may be  entrusted with the task of planning and developing that area which  may involve preparation of master plans, zonal plans etc. The role of a  planning agency commences only after a planning area is declared by  the Board.

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28.     Having considered some of the important provisions of  the Act of 1995 we shall now consider the submission urged on behalf  of the appellants that the provisions of the Act of 1995 were not at all  applicable to the acquisition in question.  This submission must be  rejected.  It is not disputed that the land was sought to be acquired for  setting up a new town.  Admittedly, the impugned Notifications were  issued at the behest of the Special Planning Agency constituted under  Section 31 of the Act of 1995 invoking Section 42 of the Act which  provides for acquisition of land for the purposes of the authority under  the Act.  The State Government exercising its power under Section 31  of the Act of 1995 constituted the New Town Planning and  Development Authority, Anandgarh.  It was this authority which  made its recommendation to the State Government which was  approved by the State Government.  For the acquisition Section 42 of  the Act of 1995 was invoked.  In this factual background it is futile to  contend that the provisions of Act of 1995 are not applicable to the  acquisition in question.  We agree with the High Court that the  provisions of the Act of 1995 are clearly attracted to the acquisition in  question, since the acquisition was for planning and development of a  planning area under the Act of 1955.   

29.     We may also consider the submissions urged by the  learned Additional Solicitor General at this stage.  He submitted that  the acquisition was sought to be made under the provisions of the  Land Acquisition Act.  According to him Section 56 of the Act of  1995 does not contemplate compulsory acquisition of land.  The  submission overlooks the fact that the various schemes contemplated  by the Act of 1995 may, for their implementation, involve acquisition  of land.  It may be that some of the schemes within the contemplation  of the Act of 1995 may not involve acquisition of land.  This,  however, does not justify the very wide submission that no acquisition  of land is at all contemplated in connection with schemes declared  under Section 56 of the Act.  Depending on the nature of scheme  framed for implementation, the planning authority may require land  for its purposes and may, therefore, request the Government to invoke  Section 42 of the Act which provides for acquisition of land for the  purposes of the authority under the Act applying the provisions of the  Land Acquisition Act.  In this case admittedly the Planning Authority  constituted under Section 31 of the Act requested the Government to  acquire the lands in question by invoking Section 42 of the Act, for  the purpose of setting up a new town, Anandgarh.  The Scheme with  which we are concerned in the instant case, therefore did involve  acquisition of land and the Government did in fact issue the impugned  Notifications for acquisition of land for the purposes of the aforesaid  New Town Scheme.

30.     The learned Additional Solicitor General also submitted  that the High Court proceeded on the erroneous basis that a Scheme  should first be formulated in detail before acquisition of land.  We do  not find that the High Court has committed such error.  The High  Court did not hold the acquisition to be bad on the ground that a  detailed scheme had not been prepared, but on the ground that there  was no valid scheme at all, and consequently no valid public purpose  justifying the acquisition.   

31.     It was then contended that the State in exercise of its  power of eminent domain may acquire lands under Section 4 of the  Land Acquisition Act and it is not denuded of its power to acquire  land merely because under the Scheme of some other Act a certain  procedure had been prescribed for acquisition of land.  In the facts of  this case we are not persuaded to accept this submission.  In the  instant case, the lands were sought to be acquired for the purpose of  implementation of a New Town Scheme and, therefore, the procedure  laid down in the Act of 1995 had to be followed.  The learned

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Additional Solicitor General submitted that if this be the correct legal  position the State may be powerless in case the Board under the Act  of 1995 did not select a site for a new town.  This submission also has  no force because under sub-section (2) of Section 14 of the Act of  1995, if required by the State Government the Board is bound to  select a site for a new town.  In the instant case, the State never called  upon the Board to select a site, and instead a New Town Planning and  Development Authority was constituted under Section 31 of the Act  which arrogated to itself the powers and functions of the Board to  select a site and make a recommendation to the State Government.

32.     Reliance was placed on the decision of this Court in  Gandhi Grah Nirman Sahkari Samiti Ltd. & Others Vs. State of  Rajasthan and Others : (1993) 2 SCC 662.  In that case this Court  considered Section 52 of the Rajasthan Urban Improvement Act, 1959  which provided for compulsory acquisition of land.  The submission  urged before this Court was that the framing of a scheme by the Trust  under Chapter V of the Act was a sine qua non for invoking the  provisions of Section 52 of the Act.  The State Government had no  authority to acquire land under Section 52 of the Act unless the same  was required for the execution of a scheme framed and sanctioned  under Chapter V of the Act.  This Court noticed the crux of the  argument that the improvement in the urban area could only be carried  out by executing the scheme framed under the Act and in no other  way.  This Court repelled the submission in the following words:-

"Under the scheme of the Act the improvement of the  urban area can be undertaken by the Trust and also by  any of the departments of the Government.  The  framing of the scheme becomes mandatory only when  the work is undertaken by the Trust.  The State  Government, in any of its departments, may decide to  develop the urban area under the Act and in that case  it would not be necessary for the Government to have  a scheme framed under Chapter V of the Act.  The  power of the State Government to acquire land under  the Act has been designed to meet the scheme of the  Act.  Under Section 52 of the Act the land can be  acquired by the State Government at the instance of  the Trust, or a department of the Government or any  prescribed authority.  The plain language of Section  52(1) of the Act negates the contention raised by Mr.  Shanti Bhushan.  Where on a representation from the  Trust or otherwise it appears to the State Government  that any land is required for the purpose of  improvement or for any other purpose under the Act it  can acquire such land by issuing a notification under  Section 52(1) of the Act.  It is, thus, clear that the  State Government has the power to acquire land either  for the execution of the schemes framed by the Trust  under Chapter V of the Act or for any other public  purpose under the Act".

It will thus be seen that the decision rests on the interpretation of  Section 52 of the Rajasthan Act which provided that the State  Government may acquire land on a representation from the Trust, or  even otherwise, if it appeared to the State Government that the land  was required for the purpose of improvement or for any other purpose  under the Act.   So far as Section 42 of the Act of 1995 is concerned it  provides as under:-                  "42. Acquisition of Land.- (1) When any land other  than the land owned by the Central Government is  required for the purposes of the Authority under this

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Act, the State Government may, at the request of the  Authority, proceed to acquire it under the provisions  of Land Acquisition Act, 1894, and on payment by the  Authority of the compensation awarded under that Act  and of any other charges incurred in acquiring the  land, the land shall vest in the Authority.

       (2) For the purposes of the Land Acquisition  Act, 1894, and any other law for the time being in  force, the Authority shall be deemed to be a local  authority"

The acquisition of land by invoking Section 42 is permitted only if a  request is made by the authority to do so for purposes of the authority  under this Act.  The important words "or otherwise" found in the  Rajasthan Act are missing in Section 42 of the Act of 1995. On a  reading of the Section as a whole it appears that the State Government  can proceed to acquire land under the provision of the Land  Acquisition Act only at the request of the authority, that too for the  purposes of the authority under the Act.  There is nothing in the  Section which may lead us to hold, as in the Rajasthan Case, that the  State on its own satisfaction could acquire land for the purposes of  any other scheme under the Act.  The powers conferred by Section 52  of the Rajasthan Act are wider than the powers conferred on the State  Government under Section 42 of the Act of 1995.  The same view was  reiterated in Pratap and Another Etc. Etc Vs. State of Rajasthan and  Others Etc. Etc. : (1996) 3 SCC 1 and Jaipur Development Authority  Vs. Sita Ram and Others : (1997) 3 SCC 522.                  33.     Reliance was also placed on the judgment of this Court in  Ajay Krishan Shinghal  and Others Vs. Union of India & Others :  (1996) 10 SCC 721 submitting that the acquisition for planned  development is a public purpose.  Once a public purpose has been  specified by the Government, the Notification under Section 4(1) of  the Land Acquisition Act is not vitiated on account of the fact that  planned development was not specified with particularization of the  land in question needed for the public purpose.  In the instant case the  issue is quite different.  The land has been acquired on the request of  the New Town Planning Authority constituted under Section 31 of the  Act for development of the new town of Anandgarh.  The High Court  has quashed the Notification not on the ground that the detailed  scheme had not been specified in the Notification, but on the ground  that they there did not exist any valid public purpose in the absence of  a validly declared planning area, namely a site for a new town, by the  competent authority by Notification in the Official Gazette under  Section 56 of the Act of 1995.  

       34.     The next important finding recorded by the High Court is  that the provisions of the Act of 1995 were not followed in specifying  and declaring the site for new town for which the land was sought to  be acquired.  We have earlier considered the various provisions of the  Act of 1995 and we concur with the finding of the High Court that in  specifying and declaring the planning area, namely the site for a new  town, the various provisions of the Act were not complied with.

       35.     The power to declare a planning area, site for a new town  being one of them, vests in the Board under Section 56 which power  cannot be delegated by the Board to the authorities constituted under  Sections 17, 29 or 31 of the Act of 1995.  While notifying its intention  to specify any area as a planning area, the Board must define the  limits of the area to which it relates, meaning thereby that the area  must be identifiable by reference to the definition of its limits.  This is  mandatory since objections and suggestions in relation thereto have to  be considered by the Board.  The submission of objections and  suggestions in response to the Notification published under Section 56

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(1) is not an empty formality and is mandatory in nature.  The  legislature advisedly incorporated such a provision since declaration  of a planning area is a subject of public interest.

       36.     The Board, before notifying a planning area under  Section 56(5) by Notification in the Official Gazette, must consider  the objections and suggestions received by it in response to the  Notification issued by it under Section 56(1) declaring its intention to  specify any area as a planning area.

       37.     None of the other authorities constituted under Sections  28, 29 and 31 are vested with power to declare a planning area by  Notification in the Official Gazette, but they may be authorized to  function as a Planning Agency for the planning and development of  the planning area by drawing up Schemes, Master Plans, Regional  Plans and other documents.         38.     In the instant case admittedly, the provisions of Section  56 were completely ignored and without declaring the planning area  by Notification in the Official Gazette, and without following the  procedure laid down therein, which included consideration of  objections and suggestions from the public apart from Government  departments, authorities and institutions, the authority constituted  under Section 31 without authority of law selected a site for a new  town and made its recommendation to the Government for its  approval, and later moved the Government for acquisition of land  under Section 42 of the Act of 1995.  All these actions were in  complete breach of the mandatory provisions of Section 56 of the Act,  and therefore void.         39.     The argument that the Government is the final authority  and was not bound to consult the Board cannot be countenanced since  that is in the teeth of the mandatory provisions of Section 56 of the  Act.  The Legislature having enacted a statute and expressly provided  a procedure for declaration of a planning area, which involved  consideration of objections and suggestions from the public and  publication of the declaration in the Official Gazette, the State could  not have adopted a different procedure in breach of express  provisions, completely ignoring the existence of the Board, the apex  authority under the Act, and obliterating the provision for public  participation in the matter of declaring a planning area.         40.     We have, therefore, no hesitation in holding that the  declaration of the planning area, a site for a new town, was never  validly made by the competent authority after following the  prescribed procedure and, therefore, there was in law no validly  selected site for a new town, nor a validly declared planning area.  Consequently, there was no justification for acquisition of land to set  up a new town.  The public purpose stated in the impugned  Notifications was non-existent in view of the fact that there was no  planning area validly declared by the competent authority for the  development of which any land was required. Section 42 which  provided for acquisition of land under the provisions of the Land  Acquisition Act could not, therefore, be invoked, since Section 42  came into operation only when land was required for the purposes of  the authority under the Act of 1995, and not for any other purpose.           41.     The High Court has found that the acquisition was sought  to be made in breach of the provisions of the Periphery Act of 1952.   In view of the findings recorded by us earlier in this judgment, it is  not necessary to go into this question and we, therefore, refrain from  expressing any opinion in the matter.  May be, in an appropriate case  the question may have to be decided.         42.     It was brought to our notice that a Notification dated  February 21, 2002 was issued by the State Government (after the  judgment was pronounced by the High Court), whereby the State  Government decided to drop the project and dissolve the New Town  Planning and Development Authority for Anandgarh exercising its  powers under Section 34 read with Section 40(1) and 49(2) of the Act

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of 1995 and transferring the assets and liabilities to PUDA with effect  from February 15, 2002.  We do not consider it necessary to express  any opinion in this regard, since it does not relate to the questions that  arise for consideration in these appeals.          43.     Special Leave Petition (C) No.7946 of 2002 is dismissed.   The High Court shall now proceed to dispose of the writ petition in  accordance with law.         44.     The High Court has given to the State the benefit of  doubt so far as the question of mala-fide is concerned.   The High  Court has, however, made certain observations.  We have considered  the material on record and find no justification for those observations.  It may be that the State Government in its anxiety to set up the new  town of Anandgarh acted with haste and in the process lost sight of  some of the mandatory provisions of the Act of 1995.  That however,  does not justify the conclusion that the State had acted mala fide.  The  material on record does not justify even the observations made by the  High Court in this regard and we, therefore, set aside those  observations.         45.     In the result, we find no merit in the appeals and they are  accordingly dismissed without any order as to costs.