Holding

The Board constituted under Section 3 of the Punjab Regional and Town Planning and Development Act, 1995 is the sole authority to declare a planning area or site for a new town under Section 56, and failure to do so renders any land acquisition for that purpose invalid.

Summary

The Punjab Government issued notifications under Section 4 of the Land Acquisition Act to acquire 9,354 acres for the proposed new town of Anandgarh. Writ petitions challenged the acquisition, arguing that the Punjab Regional and Town Planning and Development Act, 1995 required the Board constituted under Section 3 to first declare the site as a planning area under Section 56, a step that was omitted. The Supreme Court held that only the Board can declare a planning area or site for a new town, must follow the statutory procedure of public notice and consideration of objections, and that the New Town Planning and Development Authority could not exercise that power. Because the Board’s declaration was never made, the acquisition under the Land Acquisition Act was invalid and Section 42 of the 1995 Act could not be invoked. The Court dismissed the appeals, upholding the High Court’s order quashing the acquisition notifications.

Issues considered

The Punjab Regional and Town Planning and Development Act, 1995, is applicable to the land acquisition in question.
Whether the Board under Section 3 of the 1995 Act must select and declare the site for a new town under Section 56.
Whether the New Town Planning and Development Authority can lawfully select the site without the Board’s declaration.
Whether acquisition under the Land Acquisition Act is valid without compliance with the 1995 Act’s procedure.
Whether the Punjab New Capital (Periphery) Control Act, 1952, was violated.

Legislation cited

Land Acquisition Act, 1894s. 4
Punjab New Capital (Periphery) Control Act, 1952s. 10
Punjab Regional and Town Planning and Development Act, 1995s. 14, s. 179, s. 28, s. 3, s. 31, s. 4, s. 42, s. 56, s. 57, s. 58, s. 61

Subjects

land acquisitionpublic purposeplanning areaPunjab Regional and Town Planning and Development ActSection 56Section 42eminent domainperiphery actnew townprocedural compliance

Judgment

STATE OF PUNJAB AND ORS. A
v.
SANJEET SINGH GREWAL AND ORS.

JULY 3, 2007

[B.P. SINGH AND AL TAMAS KABIR, JJ.] B

Purifab Regional and Town Planning and Development Act, 1995;

Section 56-Setting up of a new town-Acquisition of land therefor-
Scope explained-Section 4 of the Land Acquisition Act, 1894. C
The State of Punjab issued Notifications 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 D
namely for setting up of new town, Anandgarh". Objections were invited against
r the proposed acquisition. The aforesaid Notifications were challenged by way
of filing several writ petitions before the High Court alleging that the
Notifications had been issued in derogation of the 'provisions of the Punjab
Regionai and Town Planning and Development Act, 1995 (hereinafter referred
to as 'the Act of 1995'). The High Court Allowed the writ petitions. Hence, E
the appeal

It was contended by the appellant that 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 F
selection of a site could be challenged by any person not necessarily an owner
of land sought to be acquired. It was contended that 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 G
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

H
2 SUPREME COURT REPORTS [2007] 8 S.C.R.

A 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
B 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
c it could request the State Government to acquire lands as provided in Section
42 of the Act. It was 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
D
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;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
E issued t1nder Section 4 of the Land Acquisition Act on March i3, 2000. It
was also 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
F
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
G 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

H
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
'
. -'.'
STATEOFPUNJABv. SANJEETSINGHGREWAL

acquiring the land on the recommendation of the New Town Planning and A·
3

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
B
detailed plan complete in all respects must precede the acquisition under the
•
) Land Acquisition Act. He also emphasized the provisions ofSectiqn 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 It was also contended c
that 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
D
, 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. 'fhe 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 E
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 esignate land subject to acquisition for any public purpose. He, therefore,
...
submitted that the power of eminent domain under the Land Acquisition Act F
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 the compulsory acquisition route is followed the only G
procedure for acquisition is the one under the Land Acquisition.

I On the other hand, the respondent contended that 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 'e~' ''ital role to H
4 SUPREME COURT REPORTS (2007) 8 S.C.R.

A 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
B 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. It was emphasised the O\'erriding 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
C 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, ifthe 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
D in accordance with the provisions of the Act of 1995. He id 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 und~r Section
E 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
F 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 entified 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 ofa site for a new town, and
preparation of plans for development of the selected site. The planning may be
G 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
H development could take place unless the site was first selected. He, therefore,
STATE OF PUNJAB v. SANJEET SINGH GREW AL 5
....... fully supported the findings of the High Court and submitted that in the A
absence of a validly selected site for a 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 declaratio~ ofa 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. B

Dismissing the appeals, the Court

HELD 1.1. The Board constituted under Section 3 of the Punjab Regional
and Town Planning and Development Act, 1995 is a high-powered authority
with the Chief Minister at its head. It may be called upon by the State
c
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 D
functions as the State Government, from time to time, assign to it. This,
:r
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, 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 E
with regard to the matters and functions which it is required to perform under
the Act. (Para 19) (19-H; 20-A-BI

1.2. The Board, in exercise of power conferred under Section 56 and
~
57 of the Act only can, by Notification in the Official Gazette, specify an area
F
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. Not only individuals but e\·en representatives G
of the departments of the State Government or the Central Government or a
local authority or any other institution may submit its objections or
/ suggestions relating to anything contained in the Notification. There is
nothing in Sections 56 and 57 to hold that the planning agency itself may
select the site for a new to·wn. (Para 21 ( (22-E-G; H; 23-AI
H
6 SUPREME COURT REPORTS (2007) 8 S.C.R.

A 1.3. Clause (I) ofsub-section (2) of Section 28 provides that the State -r-
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
B planning area though it is authorized to prepare and implement new township
plans. Therefore, it can 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
implement~tion of new township plans. (Para 231124-B-CI

c 1.4. 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. 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
D selected site. IPara 27and 371126-B-C; 31-CI

1.5. The Notification issued under sub-section (I) of Section S6 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
E all the necessary particulars as required under sub-section (I) of Section 56
and consider the objections thereto.
(Para 27and 351126-E-FI

1.6. The provisions of the Act of 1995 are clearly attracted to the
F acquisition in question, since the acquisition was for planning and development ,...
ofa planning area i.e. new town, under the Act of 1955.
tpara 281127-B-q

1.7. The submission that no acquisition of land is at all contemplated in
connection with schemes declared under Section 56 of the Act is not justified
G and very wide as 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 in\·oke 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. The Scheme
concerned, in the instant case, did involve acquisition of land and the
H
'•
.. STATE OF PUNJAB v. SANJEET SINGH GREWAL 1
...._
Government did in fact issue the impugned Notifications for acquisition of A
land for the purposes of the aforesaid New Town Scheme. IPara 291127-E-GI
1.8. The submission 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 B
land, is not acceptable, in the facts of 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.
IPara 311128-B-CI

Gandhi Groh Nirman Sahkari Samiti Ltd. & Ors. v. State of Rajasthan c
and Ors., 1199312 SCC 662; Pratap and Another Etc. Etc v. State of Rajasthan
and Ors. Etc. Etc., (199613 SCC I and Jaipur Development Aurhorityv. Sita
Ram and Ors., I 19971 3 SCC 522, referred to.

1.9. In specifying and declaring the site for new town for which the land
was sought to be acquired i.e. in specifying and declaring the planning area, D
r·
namely the site for a new town, the various provisions of the Act were not
complied with. IPara 341 IJO..fl

1.10. 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
E
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 as that would
be in the teeth of the mandatory provisions of Section 56 of the Act and it F
cannot be countenanced that the Gonrnment being the final authority was
not bound to consult the Board. !Para 391 (31-F-Gl

2.1. No doubt 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 G
•
~

particularization of the land in question needed for the public purpose. In the
,) instant case there did not exist any \'a lid 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. (Para 33 and 401130-C; 32-A-CJ
H
8 SUPREME COURT REPORTS (2007) 8 S.C.R.

A Ajay Krishan Shinghal and Ors, v. Union of India & Ors. (19961 JO SCC
721, referred to.

3.1. 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 J
the mandatory provisions of the Act of 1995. That, however, does not justify
B the conclusion that the State had acted ma/a fide. Observations made by the
High Court in this regard set aside. (Para 44( (32-G-H; 33-A(

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 5721-5725 of
2001.·

C From the final Order/Judgment dated 28.3.2001 of the High Court of
Punjab and Haryana at Chandigarh in C.W.P. Nos. 7291: 8708, 9047, 9143 and
16738/2000.

WITH

D C.A. Nos. 5727-5731 of2001 and S.L.P. No. 7946 of2002.

R.S. Cheema, A.G. for Punjab, Sanjeev Sharma. A.A.G., Vikas Singh,
A.S.G., A.G. Choudhary, Ranjit Kumar, Sr. Advs., Rachna Joshi lssar, Sanjay
Jain, June Choudhary, Rishi Malhotra, Prem Malhotra, G.C. Garg Dhuriwala,
M.P. Jha, Ram Ekbal Roy, Harshvardhan Jha, Gaurav Garg Dhuriwala, Anil K.
E Chopra, Sudhir Walia, Priank, Mahinder Singh Dahiya, Yash Pal Dhingra,
Balbir Singh Gupta, Seeraj Bagga, Sureshta Bagga, Yakesh Anand, Amit Sethi,
Nishant Kumar, Sanjeev Anand, Keshav Kaushik, Dr. Kailash Chand, R.C.
Kohli, A.P. Mohanty, Arun K. Sinha, Vipin Gogia, G.P. Singh, K.K. Gogna.
Jaspreet Gogia and Madan Gopal Gupta for the Appellants.
F
J.S. Garewal, K. Amareswari, Sr. Adv., H.S. Garewal, Dhiraj, P.N. Puri.
Anjani Aiyagari, B. Ramana Murthy, S.N. Terdal, Kamini Jaiswal, Shomila
Bakshi, Rani Mishra, Atul Nanda, Rameeza Hakeem and Atishi Dipankar for
the Respond.ents.

G The Judgment of the Court was delivered by

8.P. SINGH, J. I. 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 of2000 has been impugned. Civil Appeal Nos.5721-5725 of
H 2001 have been preferred by the State of Punjab while Civil Appeal Nos.5727-
STA TE OF PUNJAB"· SANJEET SINGH GREWAL [B.P. SINGH. J.] 9
-~

"""' 5731 of 2001 have been preferred by the New Town Planning and Development A
Authority for Anandgarh. Special Leave Petition No. 7946 of 2000 has been
preferred against the order of the High Court dated September I0, 200 I in Civil
Writ Petition No. 7050 of 200 I 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.
B

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
c
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 Regional and Town Planning and
Development Act 1995 (hereinafter referred to as 'the Act of 1995'). It was D
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
E
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 F
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.
G
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 H
10 SUPREME COURT REPORTS (2007) 8 S.C.R.

A site and designated a plan,ning 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.

B 4. Having regard to the ~ubmissions 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?
c
(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
D 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 malajides?

E (v) Have the petit;oners 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
F 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 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
G 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
H Act of I Q95 and it was on the recommendation of the aforesaid authority that
STATEOFPUNJABv. SANJEETSINGHGREWAL [B.P. SINGH,J.] ll

fand was sought to be acquired under Section 42 of the Act of 1995. It A
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 B
Anandgarh constituted under Section 3 I 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 de_velopment authority requested the C
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 D
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:- E
"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 F
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". G
7. Accordingly, the High Court held that the State action did not confonn
to the requirements of the Act of 1995 and thus could not be sustained.

6. The High Court held that the provisions of the Periphery Act, 1952
had ·also been violated. It concluded that though Section l 0 did not affect the H
12 SUPREME COURT REPORTS [2007} 8 S.C.R.

A 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
B 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 ma/a 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
C case the writ petitioners were entitled to relief under Article 226 of the
Constitution of India.

IO. In the end the High Court recorded its conclusions in the following
words:-"

(i) Nature is beautiful. But it demands obedience to its ordinance.s.
D 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
E 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.
F
(iii) While embarking upon the project of the new town-' 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
G 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.

H (v) The mere fact that the government finds the procedure prescribed
l'

STATE OF PUNJAB v. SANJEET SINGH GREWAL [B.P. SINGH, J.) 13
by the Act and the Rules to be lengthy or cumbersome and such as A
-- 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.
L~"
(vi) The State government has also failed to consider the objections B
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 c
provisions of the Punjab New Capital (Periphery) Control Ac·~. 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.

(viii) The courts do not count heads. The mere fact that the petitioners D
are few in number or that their holdings are small is no ground to deny
r -
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 E
not enough to uphold the plea of ma/a 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 F
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.
G

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 H
-1
14 SUPREME COURT REPORTS (2007) 8 S.C.R.

~A the site for a new town and take all necessary action in coMection therewith, I
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 onhe Periphery Act. He described
--
the Act of 1995 as a futuristic legislation providing for modem planning and
urban development with multi level institutions. According to him Section 14 ·-~
B 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
c 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
D Board could also be entrusted to the New Town Planning and DevelQpment
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
E 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 devel~pment of a new township. The Town Planning
F 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 under Section 31 of
the Act of 1995 on May 20, 1999 which recommended the acquisition of the
G 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 \

H
Section 28 of the Act could be entrusted to the Special Urban Planning and
Development Authority constituted under Section 29 and the New Town
"
STATEOFPUNJABv. SANJEETSINGHGREWAL [B.P. SINGH,J.] 15
Planning and Development Authority under Section 31 of the Act of 1995, the A
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 B
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 C
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 ifthe 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 D
authority beiac the Stale, its powers and authority must be interpreted in that
r
larger paspcctive. 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 A~isition Act. He also emphasized the provisions of Section
10 of the Petplt,icry Act and submitted that the State was not inhibited from E
acquiring lands which came within the controlled area under the Periphery
Act, and this was made explicit by Section I 0 of the Periphery Act.

14. Mr. Vikas Singh, learned Additional Solicitor General, appearing for
PUDA in SLP) No. 7946 of2002 submitted that the High Court adjourned the
matter sine die awaiting the judgment of this Court in view of the fact that F
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 G
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 H
16 SUPREME COURT REPORTS [2007] 8 S.C.R.

A 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
B 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 the compulsory acquisition route is followed the only A.
procedure for acquisition is the one under the Land Acquisition Act. He
C 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.

D 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
E 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~ 995, that must be done in accordance with
the procedure laid down for that purpose in the Act. He, therefore, submitted
F 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
G 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.
H However, if the land has to be acquired under Section 42 of the Act of 1995
STATE OF PUNJAB v. SANJEET SINGH GREWAL [B.P. SINGH, J.] 17
it must be acquired for the purpose of the authority under the Act. If the land A
·;..
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 ifthe 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 B
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 c
site for a new town. Thereafter it \Vas again the Board which could designate
the planning agency for that area for the purpose of performance of the
functioils 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 D
,. 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 E
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 new township by the Board, no planning and
-", · development work could be entrusted to any of the authorities under the Act. F
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 G
necessary to notice some of the salient provisions of the Act of 1996. The
Act purports to be:-
,.1 ..
1
LAn Act to make provision for better planning and regulating the
development and use of land in Planning areas delineated for that
H
/.
"
18 SUPREME COURT REPORTS [2007) 8 S.C.R.
...
A 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
plann~ng and development processes in the State; for the constitution
ofa St'1e Urban Planning and Development Authority. Special Urban
Planning and Development Authorities and New Town Planning and
-
B 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 : -
c
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."
D
Sections 2(z.a) 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
E 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
F 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:-

G "3. Establishment of the Board-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 called the \
Punjab Regional and Town Planning and Development Board".

H 18. Section 4 provides for the constitution of the Board which shall
STATE Of PUNJAB v. SANJEET SINGH GREWAL [B.P. SINGH, J.] 19

- consist of a Chainnan, Vice Chainnan, 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
A

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 Chainnan
B
and the Vice-Chainnan of the Board. The functions of the Board are contained
in Section 14 which provides as under :-

"14. Functions of the Board:-{ I) 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
c
agencies, with respect to matters relating to the planning, development
and use of urban and rural land in the State, and to perfonn 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
D
provisions, the Board may and shall, if required by the State
., Government . -

(a) detennine the regions, cities, towns, or a part of a city or a
site for new town or preparation of Regional Plans or Master
Plans;
E
(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 F
development programme ;

(d) collect, maintain and publish statistics and monographs on
regional and town planning and perfonn 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." G
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 H
20 SUPREME COURT REPORTS (2007) 8 S.C.R.

A 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
B by the State Government altogether. It may be that the advice tendered by
the Board may not be acceptable to the State Government, 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
C 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
D 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. (I) The Board may, from time to
E time, by notification in the Official Gazette, declare its intention to
specify any area in the State to be a regfonal 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 (I) the Board may
F
take into consideration such matters as may be prescribed.

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

(4) Any person including representative of a Department of the State
G 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 (I), 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.
STATE OF PUNJAB v. SANJEET SINGH GREWAL [B.P. SINGH,J.] 21

- (5) After the expiry of two months from the date of publication of the
notification under sub-section (l) and after considering objections
and suggestions, if any, received under sub-section (4), the Board
A

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 B
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
c
or construction in any area comprised in abadi-deh of any village
falling inside its !al lakir or phimi, 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 Section 75, as the case may be, institute or change the D
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 E
section, alter the limits of any regional planning area, local planning
area or the site for a new town.

57. Designation of Planning Agencies.-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 F
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 G
has been authorized to declare its i.ntention to specify any area in the State:-

1111 ) (i) to be a regional planning area;

(ii) a local planning area ; and
H
~r

22 SUPREME COURT REPORTS [2007] 8 S.C.R.

A (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
B 56. Before making a declaration of its intention to specify a planning area
under sub-section (I) 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
c 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 f\lrther required to specify the name of the planning area
so declared. Having done so, the Board is required to designate the planning
D agency for that tirea 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
.Jt 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
F
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 Central Government or a local authority or any other
G 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
H
ST ATE OF PUNJAB v. SANJEET SINGH GREWAL [B.P. SINGH. J.] 23

-,z
Sections 56 and 57 which can persuade us to hold that the planning agency A
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 B
local authority. The Minister-in-Charge of Housing and Urban Development
is its Chairman. The functions of the authority are enumerated in Section 28
'r which reads as follows :-
"28. Objects and functions of the Authority-{ I) The objects of the
Authority shall be to promote and secure better planning and c
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 D
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.
E
(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 F
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. G
(iii) promote research, development ofnew techniques of planning,
land development and house construction and manufacture of
l building material;

(iv) promote companies, associations and other bodies for carrying
H
24 SUPREME COURT REPORTS (2007) 8 S.C.R.

A 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 which may be prescribed".

23. Clause (I) of sub-section (2) of Section 28 is significant. It provides
B 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
c 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.
;c

D 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
E
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 fun~tions of PUDA relating to development and redevelopment
of that area under the Act sha'l be exercised and performed by the Special
Authority so constituted. Section 29, therefore, enables the State Government
F 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
G a IC'cal authority as Special Urban Planning and Development Authority and
confer upon it all the powers and functions of PUDA.
I
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
H
STATEOFPUNJABv. SANJEETSINGHGREWAL[B.P. SINGH,J.] 25
.,
........,_
31 reads as follows:- A
31. "New Town Planning and Development Authority: (l) 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 B
a Special Authority for that site to be called the New Town Planning
and Development Authority and thereupon, all the powers and the
'r 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.
c
(2)A New Town Planning and Development Authority constituted
under sub-section (I), 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,
D
both movable and immovable and to contract, and by the said name
sue and be sued.

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

(i) a Chairman, E
(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 F
State Government.

(4) The provisi<;ms 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 G
Development Authority shall be construed as references to a New
Town Planning and Development Authority".
I
/ 27. It is under this provision that the State Government proceeded to
constitute the New Town Planning and Development Authority for Anandgarh
H
26 SUPREME COURT REPORTS [2007) 8 S.C.R.

A 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
B 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
C 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
D 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 (I)
of Section 56 declaring the intention of the Board to specify an area as the
E site for a new town must defir1e 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 (I) 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
F 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.
G 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,
H the impugned Notifications were issued at the behest of the Special Planning
STATEOFPUSJABv. SANJEETSINGHGREWAL[B.P. SINGH.J.) 27

Agency constituted under Section 31 of the Act of 1995 invoking Section 42 A
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. B
In this factual background it is futile to contend that the provisions of Act
of 1995 are not applicable to the acqui~ition in question. We agree with the
r 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 l 955. C
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 D
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 ~ay 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 E
56 of the Act. Depending on the nature of scheme framed for implementation,
the planning authority may require land for its purposes and may, therefore1
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 F
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 Sclieme 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.
G
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 1:-e bad on the ground that a detailed scheme had not been prepared, but H
28 SUPREME COURT REPORTS (2007) 8 S.C.R.

A 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
B 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
piOcedure laid down in the Act of 1995 had to be followed. The learned
C 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
D 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 & Ors. v. State of Rajasthan and Ors., (1993] 2
E 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
F 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:-
G
"Under the scheme of the Act the improvement of the urban area can
be undertaken by the Trust and also by any of the depanments 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
H
}
I

STATE OF PUNJAB v. SANJEET SINGH GREWAL [B.P. SINGH, J.] 29

the Act and in that case it would not be necessary for the Government A
-.(.
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
B
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
y 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 c
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 D
may acquire land on a representation from the Trust, or even otherwise, if it
'r 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.-{l) When any land other than the land E
owned by the Central Government is required for the purposes of the
Authority under this 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 F
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"
G
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, H
30 SUPREME COURT REPORTS [2007] 8 S.C.R.

A 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
B Section 42 of the Act of I 995. The same view was reiterated in Pratap and
Another Etc. Etc. v. State of Rajasthan and Others Etc. Etc., [1996) 3 SCC
I and Jaipur Development Authority v. Sita Ram and Ors., [I 997) 3 SCC 522.

33. Reliance was also placed on the judgment of this Court in Ajay
Krishan Shinghal and Ors. v. Union of India & Ors., [ 1996) I 0 SCC 72 I
C 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
ID 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,
E 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
p 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
G 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
H limits. This is mandatory since objections and suggestions in relation thereto
STATE OF PUNJAB\'. SANJEET SINGH GREWAL lB.P. SINGH. J.) 31
have to be considered by the Board. The submission of objections and A
suggestions in response to the Notification published under Section 56 (I)
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 int~rest.

36. The Board, before notifying a planning area under Section 56(5) by B
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( I) declaring its intention to specify any area as a piano ing area.

37. None of the other authorities constituted under Sections 28. 29 and C
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 D
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 E
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
t
bound to consult the Board cannot be countenanced since that is in the teeth f
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 G
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
H
32 SUPREME COURT REPORTS (2007) 8 S.C.R.

A 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
deci~red 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 Sectiof! 42 came into operation only when land was required for the
purposes of the authority .undC!r the Act of 1995, and not for any other
C 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
D maner. 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
E Anandgarh exercising its powers under Section 34 read with Section 40( I) and
49(2) of the Act of I 995 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.
F
43. Special Leave Petition (C) No.7946 of2002 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
G as the question of ma/a-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 ma/a
H fide. The material on record does not justify even the observations made by
ST ATE OF Pt;NJAB v. SANJEET SINGH GREWAL (B.P. SINGH. J. J 33
...
·< the High Court in this regard and we. therefore. set aside those observations. A
45. In the result, we find no merit in the appeals and they are accordingly
dismissed without any order as to costs.

B.K. Appeals Clismissed.

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J
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