The State of Bombay vs R. S. Nanji

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 235 of 1954

Decision Date: 17 January 1956

Coram: Syed Jaffer Imam, Natwarlal H. Bhagwati, B. Jagannadhadas, Bhuvneshwar P. Sinha

In this matter the State of Bombay filed a petition against R S Nanji. The judgment was delivered on 17 January 1956 by the Supreme Court of India. The bench that heard the case consisted of Justice Syed Jaffer Imam, Justice Natwarlal H. Bhagwati, Justice B. Jagannadhadas and Justice Bhuvneshwar P. Sinha. The petitioner was the State of Bombay and the respondent was R S Nanji. The decision is reported in the 1956 volume of the All India Reporter at page 294 and also in the Supreme Court Reports, volume 18. The statutory provision in issue was section 5(1) of the Bombay Land Requisition Act, 1948 (Bombay Act XXXIII of 1948), which authorises the government to requisition premises for a public purpose. The specific question was whether the requisition of premises by the Bombay Government, made by order dated 12 May 1952 for providing accommodation to an officer of the State Road Transport Corporation, satisfied the requirement of a “public purpose”. The case also required an interpretation of the phrase “public purpose” and an examination of section 19(1)(c) of the Road Transport Corporation Act, 1950 (Parliament Act LXIV of 1960), which empowers the corporation to provide living accommodation for its employees.

The Court held that, on the facts, the requisition was indeed for a public purpose and that the order of the Bombay High Court which had set aside the requisition was erroneous. The Court explained that the expression “public purpose” includes any objective that directly and vitally concerns the general interest of the community, as opposed to the private interests of individuals, and that the term cannot be defined with precision. Accordingly, each case must be examined by considering all relevant facts and circumstances to determine whether a public purpose exists. The Court further observed that the Road Transport Corporation, under section 19(1)(c) of the 1950 Act, has the authority to provide its employees with suitable conditions of service, including living accommodation, rest and recreation facilities, and other amenities. By reading the provisions of the Road Transport Corporation Act as a whole, the Court concluded that requisitioning the premises for the corporation would constitute a public purpose. Finally, the Court noted that the corporation functions as a public utility, and its operations affect the general public interest. Providing accommodation to its employees is a statutory function essential for the efficient operation of the road transport system, thereby satisfying the requirement of a public purpose under the Requisition Act.

In this matter the Court observed that the requisition of premises was intended to facilitate the efficient operation of the road-transport system, and consequently the order issued on 12 May 1952 was deemed to have been validly made under the Bombay Land Requisition Act, 1948. The Court referred to the authorities Hamabai Framjee Petit v. Secretary of State for India in Council ([1914] L.R. 42 I.A. 44), The State of Bombay v. Bhanji Munji and Another ([1955] 1 S.C.R. 777) and The State of Bombay v. Ali Gulshan ([1955] 2 S.C.R. 867). The judgment concerned Civil Appeal No. 235 of 1954, which was filed by special leave against the judgment and order dated 26 February 1953 of the Bombay High Court in Appeal No. 120 of 1952. That High Court judgment arose from an order dated 12 September 1952 rendered in Miscellaneous Application No. 216 of 1952 in the Court’s ordinary original jurisdiction. For the appellant, the Attorney-General of India appeared, assisted by counsel, while counsel for the respondent were also present. The Court’s judgment was delivered on 17 January 1956. By the order dated 12 May 1952, the Government of the State of Bombay exercised the power under sub-section (1) of section 5 of the Bombay Land Requisition Act, 1948 to requisition a specified part of a building for a public purpose, expressly stating that the purpose was to provide housing for an officer of the State Road Transport Corporation, which is a public-utility service. The respondent had filed a writ petition under Article 226 of the Constitution in the Bombay High Court; the petitioner, Tendulkar, J., set aside the requisition order. The Government appealed, and a Division Bench of that High Court affirmed Tendulkar, J.’s decision. The present appeal, therefore, challenged that judgment by special leave. The pivotal ground for setting aside the requisition order was that the requisition was not for a public purpose and thus could not be made under section 5 of the Requisition Act. Representing the appellant, the Attorney-General contended that, given the facts of the case, the requisition did serve a public purpose and that the High Court had erred in overturning the order. To support this argument, the Attorney-General relied on specific provisions of the Road Transport Corporations Act, 1950 and on the Privy Council decision in Hamabai Framjee Petit v. Secretary of State for India in Council, together with the Supreme Court’s rulings in The State of Bombay v. Bhanji Munji and Another and the related authorities.

The judgment in The State of Bombay v. Ali Gulshan, recorded as Civil Appeal No 229 of 1953 and delivered on the fourth day of October 1955, formed part of the factual backdrop of the present proceedings. The respondent, through counsel, put forward the contention that the requisition of a building for the purpose of providing accommodation to a single employee of the State Road Transport Corporation—hereinafter called the Corporation—could not be classified as a public purpose. The argument rested on the premise that the proposed use did not directly and vitally involve the general interest of the community. Counsel further submitted that, although the Privy Council had correctly endorsed the observations of Batchelor, J., concerning the meaning of the expression “public purpose,” it had erred in the decision rendered in Hamabai v. Secretary of State for India in Council. He emphasized that the case of Hamabai could be distinguished because the latter involved a scheme for constructing housing for government servants generally, whereas the present requisition sought residential accommodation for one particular individual only. The respondent also challenged the validity of the impugned order on the ground that no evidence had been produced to demonstrate that providing a dwelling for an officer of the Corporation would satisfy the needs or purposes of the Corporation, nor that it would enhance the efficiency of the officer concerned.

Before Judge Tendolkar, two specific objections had been raised: first, that the enquiry mandated by section 5 of the Requisition Act had not been conducted; and second, that the order was invalid because the requisition was not for a public purpose. The tribunal resolved the first objection against the respondent, but it decided in the respondent’s favour on the second. On appeal, the first objection was not reiterated, as the Division Bench judgments contained no reference to it. Consequently, the only issue examined before this Court was whether the requisition fell within the meaning of a public purpose. Before addressing that issue, the Court found it necessary to set out the purpose for which the Corporation was established, its composition, and the extent of control exercised by the State Government over its affairs. It was undisputed that the Corporation is a public-utility concern governed by the Road Transport Corporations Act, 1950. Section 3 of that Act reveals that a State Government may establish a Road Transport Corporation in order to obtain advantages for the public, trade and industry through the development of road transport, to coordinate road transport with other modes of transport, to extend and improve road-transport facilities in any area, and to provide an efficient and economical system of road-transport service. The Corporation is constituted by a Chairman and other members who are appointed by, and removable at the pleasure of, the State Government. Where capital is subscribed through the issue of shares under section 23, the Act also provides for representation of shareholders and the manner of their election according to rules framed under the Act.

The Act required that shareholders of the Corporation be represented and that their election be conducted according to rules formulated under the Act. The State Government appointed the Corporation’s Chief Executive Officer or General Manager together with its Chief Accounts Officer. All other officers and servants were to be appointed by the Corporation itself, but the conditions of their appointment, terms of service and the scales of pay were to be fixed by regulations made under the Act, subject to section 34, which gave the State Government authority to issue directions and general instructions to the Corporation; such instructions could include matters relating to recruitment and conditions of service. Consequently, the Corporation functioned under the effective control of the State Government. Regarding capital, the Act allowed the Central and State Governments to supply funds in proportions agreed between them; if such capital was not supplied, the Corporation could, as authorized by the State Government, raise capital by issuing shares, and those shares were guaranteed by the Government. The Corporation’s annual budget had to be submitted to the State Government for approval, and its accounts were to be audited by an auditor appointed by that Government. After providing for the items specified in section 30 of the Act, the balance of the net profits was to be handed over to the State Government for the purpose of road development. The State Government possessed the power to supersede the Corporation, or, after an enquiry under section 36, to notify in the official Gazette a person authorized to take over the Corporation and to manage its affairs for the duration of the notification. The Corporation’s activities were extensive, and it bore a statutory duty to use its powers to provide, secure or promote an efficient, adequate, economical and properly coordinated system of road transport in the State, in any part of it, or in any extended area, as mandated by section 18 of the Act. The powers conferred upon the Corporation were enumerated in section 19; although the list was not exhaustive, it covered a broad field. It was necessary to refer specifically to certain powers. Section 19(1) granted, among other authorities, the power to provide its employees with suitable conditions of service, which included fair wages, the establishment of a provident fund, provision of living accommodation, places for rest and recreation, and other amenities. Section 19(2), disregarding the explanation to clause (a) and certain clauses not presently relevant, stipulated that, subject to the provisions of the Act, the powers described in subsection (1) also included the authority to manufacture, purchase, maintain and repair rolling stock, vehicles, appliances, plant, equipment or any other item required for the purposes of any activity of the Corporation referred to in subsection (1).

Section 19(2) authorises the Corporation, among other powers, to acquire and retain any movable or immovable property it considers necessary for any activity mentioned in subsection (1). The Corporation may also lease, sell or otherwise dispose of any property it holds. Further, the section permits the Corporation to purchase land by agreement, to take it on lease, or to obtain it under any tenancy, and to construct on that land such buildings as are required for the performance of its undertaking.

When the provisions of the Act are read as a whole, the Court concluded that, had the premises named in the impugned requisition order been taken for the Corporation, the requisition would necessarily have been for a public purpose. The High Court judges shared this view, and the counsel representing the petitioner did not dispute it. The opposing counsel, however, argued that in the present case the requisition was made not for the Corporation but for the personal convenience of one of its employees, and therefore could not be said to serve a public purpose.

The term “public purpose” has been examined in numerous decisions, and the Court found it unnecessary to cite all of them, referring only to the three cases highlighted by the Attorney-General. In Hamabai’s case, Batchelor, J. observed that general definitions should be avoided where possible and declined to give a precise meaning to the phrase “public purposes” in a lease. He indicated that, in his opinion, the phrase must denote a purpose or aim that directly and vitally concerns the general interest of the community, as opposed to the private interest of individuals. This observation was endorsed by the Privy Council.

The Privy Council, however, rejected the argument that land taken for a public purpose must be made available to the public at large. That argument had arisen because the Government had resumed lands that were subject to a lease containing a clause allowing resumption for any public purpose, with the intention of erecting dwelling houses for Government officials to occupy as private residences on adequate rent. The Court quoted the concluding part of the Privy Council’s judgment, which affirmed that the scheme would benefit the public by enabling the Government to maintain the efficiency of its servants, and that such a conclusion should be respected by the judges.

The decision also referenced Bhanji Munji’s case, noting its relevance to the discussion of what constitutes a public purpose, although the citation was incomplete in the record.

In the case of Hamabai the requisition was made to provide housing for a person who had no accommodation. After reviewing the affidavits and the surrounding facts, Justice Bose observed that the Constitution permits a requisition when it serves a public purpose, and that furnishing a dwelling to a homeless individual satisfied that purpose. In the case of Ali Gulshan the requisition was intended to house a member of the staff of a foreign consulate. The Court held that the requisition furthered a State purpose, which necessarily qualifies as a public purpose. These decisions, together with other authorities, lead to the conclusion that the expression “public purpose” cannot be defined in precise terms. Instead, each case must be examined on its own facts and circumstances to determine whether a public purpose has been established. While the Government is normally the first authority to assess whether a requisition serves a public purpose, it is not the only judge. The courts possess jurisdiction and the duty to decide the question whenever a challenge is raised as to whether a requisition order is, or is not, for a public purpose. The decisions in Hamabai, Bhan Munji and Ali Gulshan are illustrative of this principle. In Hamabai the court found that the community’s interest was directly concerned with the efficiency of government servants, making accommodation for them a public purpose. In Bhan Munji the court emphasized that preventing lawlessness and disease by housing the homeless served the community’s general interest. In Ali Gulshan the court held that the State’s interest in its own trade and the efficient performance of duties by a foreign consul also satisfied a public purpose.

Applying this reasoning to the present matter, the impugned order can be understood as a requisition made on behalf of the Municipal Corporation, because the order does not identify any specific individual for whom the premises are being requisitioned. In other words, the premises were placed at the disposal of the Corporation to accommodate one of its officers, whose name was to be assigned later. Moreover, the Corporation possesses a statutory power under section 19(1)(c) of the relevant Act to provide living accommodation for its employees. Consequently, the requisition aligns with the Corporation’s statutory function of furnishing housing for its staff and therefore satisfies the requirement of a public purpose.

The Corporation, pursuant to section 14 of the Act, appoints the number of officers and servants it deems necessary for the efficient performance of its functions. It is therefore reasonable to infer that the Corporation selects only those officers whose presence is required for the effective discharge of its duties, and that the State Government was asked to requisition premises as living accommodation for one such officer whose posting in Bombay was essential. The affidavit submitted by Mr Nadkarni, the Accommodation Officer of the Government of Bombay, confirms that the Corporation officer in question must carry out his duties in Bombay. Consequently, in view of sections 19(2)(a) and (b), the power of the Corporation to provide living accommodation to its employees qualifies as a statutory activity under section 19(1). The term “acquire” is understood to include purchase by agreement and is sufficiently broad to permit the Corporation to request the State Government to acquire property under the Land Acquisition Act of 1947 for the purpose of furnishing living accommodation for its staff.

The functions performed by the Corporation under section 19(1) are intimately connected with its successful operation as a Road Transport Corporation, and any requisitioning or acquisition of property intended to further those functions must be regarded as serving a public purpose. Merely establishing the Corporation would be inadequate; it must possess an adequate and efficient staff, and providing housing for that staff is an absolute necessity. The efficiency of the Corporation’s officers directly affects the operation of the road-transport system on which the public depends, making the provision of accommodation for employees a matter of vital public interest. Although one might suggest drawing a definitive line to limit the extent of governmental requisition powers, the appropriate approach is to resolve each case on its particular facts and circumstances. In the present matter, the Corporation functions as a public-utility concern, and the community’s general interest is directly and vitally linked to its activities. A disruption in the Corporation’s organisation would destabilise the road-transport system and create chaos detrimental to the public. Because furnishing living accommodation for its employees is a statutory activity essential to the efficient operation of the transport system, the impugned order was validly issued under the Requisition Act. Accordingly, the appeal was allowed, the High Court’s decision was set aside, and costs of the appeal were awarded to the respondent as directed by the order granting Special Leave, while each party will bear its own costs in the High Court.

The Court directed that each party shall bear his own costs in the High Court. This means that the expenses each side incurred while litigating before the High Court will be paid by that side alone, and no party will be required to reimburse the other for those expenditures. The direction was given in addition to the earlier order that the appellant should pay the respondent’s costs in this appeal as directed by the order granting Special Leave. Accordingly, the Court clarified that the cost liability for the High Court stage remains separate and is to be borne individually by the parties concerned. This instruction applies solely to the costs of the High Court proceedings and does not alter any other cost orders made in the present appeal. The Court’s direction follows the principle that when parties have acted independently in a prior proceeding, each is responsible for its own legal expenses incurred in that proceeding.