Municipal Corporation of The City of
Ahmadabad & Ors Vs. State of Gujarat & Ors [1972] INSC 94 (27 March
1972)
PALEKAR, D.G.
PALEKAR, D.G.
SIKRI, S.M. (CJ) GROVER, A.N.
RAY, A.N.
BEG, M. HAMEEDULLAH
CITATION: 1972 AIR 1730 1973 SCR (1) 1 1972
SCC (1) 802
ACT:
The Government of India Act, 1935-S.
299-Constitution of India Act, Art. 31-Compensation-Bombay Provincial Municipal
Corporation Act, 1949-Ss. 212, 216-Acquisition building or part of building
within "regular line of public" streetSection if prescribes the
principles and manner of -determination of compensation.
Bombay Provincial Municipal Corporation Act,
1949-Ss. 212, 216 Constitutionality of.
HEADNOTE:
Section 210 of the Bombay Provincial
Municipal Corporation Act, 1949 authorises the Municipal Commissioner to
prescribe the "regular line of a public street". If a building or a
part of building is within the regular line of a public street the Commissioner
may under s. 212 require the owner to pull down the building or part thereof,
which is within the regular line of the street. On this failure to do so, the
Commissioner is entitled to pull down the offending part of the building at the
cost of the owner. The land so vacated is to vest in the corporation. Section
216(i) lays down that compensation shall be paid by the Commissioner to the
owner "for any loss" which the owner may sustain and for "any
expense" incurred by such owner in consequence of the order made by the
Commissioner. Proviso (i) to section 216 prescribes that "any increase or
decrease in the value of the remainder ,of the property of which the building
or land so acquired formed part, likely to accrue from the setback to the
regular line of the street shall be taken into consideration and allowed for in
determining the amount of such compensation. Under proviso (ii) "if any
such increase in value exceeds the amount of loss sustained or expenses
incurred by the said owner, the Commissioner may recover from such owner half
the amount of such excess as betterment charge.". The Act gives the owner
who is aggrieved by the amount of compensation offered to him, the right to
appeal to the judge of the Small Causes Court and to the District judge in
second appeal.
Acting under s. 212 the Commissioner issued
notices to the respondents to pull down parts of their building lying within
the regular line of the street. The respondents filed writ petitions contending
that section 212 was unconstitutional in' so far as it violated the provisions
of section 299 of the Government of India Act, 1935, and also of article 31 of'
the Constitution. It was urged that the Act did not (i) provide for payment of
compensation for property acquired and (ii) specify the principles on which and
the manner in which the compensation was to be determined. The validity of
section 212 and other allied sections was also challenged on the ground that
they infringed articles 14 and 19 of the Constitution. The High Court,
upholding the challenge under s.299 of the Government of India Act, held that
the Act provided for payment of compensation 'out did not specify the
principles on which and the manner in which the compensation was to be
determined. In view of this finding the High Court did not consider the
challenge 'on 2 the other grounds. In this Court it was argued that the two
provisos to sub-section (i) of s. 216 if given effect to nullified the
direction in subsection (1) for payment of compensation and when reduced in the
Contingencies visualized in the provisos the compensation turned out to be
illusory.
Allowing the appeal,
HELD: that the order passed by the High Court
had to be set said and the proceedings transmitted to the High Court for
disposal in accordance with the law.
(i) The High Court was right in holding that
the Act provided for payment of. compensation for property acquired under s.
212. Section 216 and 389 read together make it clear that full indemnification
in terms of money for the loss caused is to be made to the owner of the
property or other interest affected by reason of the exercise of the power under
s. 212. That the compensation may in some rare contingencies be very much
reduced after taking into account the value of the benefit conferred on the
owner by reason the widening of the street is no adequate reason to hold that
the Act does not provide for payment of compensation.
Both the provisos come into play only after
the compensation for loss is determined under sub-section (i) of section 216
and since that subsection declares that full compensation must be paid for the
loss or deprivations suffered by the owner it must be held that the Act
provides for the payment of compensation for the property acquired. [9D11 F-G].
(ii) The Act specifies the principles on
which and the manner in which compensation is to be determined.
Having regard to the fact that in' the course
of widening the street the Corporation may have to acquire very irregular,
shapeless and small pieces of land for the purpose. of the street,, a host of
principles may have to be employed to determine the compensation. This very
difficulty in specifying any known rule of compensation is responsible for the
wording of section 216 and section 3 $9 of the Act which gets over the
difficulty by providing full indemnification for the loss or deprivation
suffered by the owner of the building or other interests in the property. .,The
involvement of civil courts in finally determining compensation imports
judicial norms and since full indemnification in accordance with judicial norms
is the goal set by the Act,. it is, implicit in such a provision that the rules
for determination of compensation shall be appropriate, to the property
acquired and such as will achieve the goal of full indemnity against loss.
This, by itself, is a specification of a principle for the determination of
compensation. [13-A-D] State of Gujarat v. Shri Shantilal Mangaldas & Ors.,
[1969] (3) S.C.R. 341 at p. 357, referred to.
Under s. 390 the Commissioner or such other
officer as may be authorised by him shall hold such inquiry as he thinks fit
and determine the amount of compensation to be paid.
Since there is an appeal from such
determination to the judge of the small causes court and a second appeal to the
District court it is clear that the enquiry must be held on broad judicial
lines. There are no limitations placed on the powers of the appellate judges in
determining the loss in a just and appropriate manner; therefore, the
Commissioner or his authorised officer who holds the enquiry in, the first
instance,, will be guided by principles which meet with the approval of the
appellate authorities. [13E] 3
CIVIL APPELLATE JURISDICTION: C.A. Nos. 135
to, 149, 2091, 2092 and 2121 to 2122 of 1968, 41 and 42 and 574 of 1969.
Appeals from the judgment and Order dated the
5th December, 1966 of the Gujarat High Court in Special Civil Applications Nos.
1454 to 1456 of 1965 etc., etc.
M. C. Setalvad, V. B. Patel and I. N. Shroff,
for the appellants (In all the 'appeals).
B. D. Sharma for S. P. Nayar, for respondent
No. 1 (In all the appeals).
A. H. Mehta, S. K. Dholakia and Vineet Kumar,
for respondent No. 2 (In C.As. No. 135, 1379 138, 142, 143 of 1968) Respondent
Nos. 2 to 5 (In C.A. No. 140 of 1968.) S. S. Khunduja and Pramod Swarup for
respondent No. 2 (In C.A. No. 574 of 1969.) The Judgment of the Court was
delivered by Palekar, J.--These Civil Appeals by certificate arise out of 23
Writ Petitions filed by owners of lands and buildings within the, Municipal
limits of the City of Ahmedabad. The petitioners challenged section 212 and
some other allied sections of the Bombay Provincial Municipal Corporation Act,
1949, (hereinafter called the Corporations Act) and prayed for the issue of a
writ of mandamus directing the Municipal Corporation of the City of Ahmedabad
to treat the notice or notices issued to them under section 212 of the
Corporations Act as null and void and further directing the Municipal
authorities not to act upon the same or in furtherance of the said notice or
notices. Besides the Municipal Corporation, the Municipal Commissioners were
also made parties to the petitions. Since the validity of the provisions of the
Corporations Act was challenged the State of Gujarat was also made a
respondent. All the writ petitions raised the same questions and, therefore,
the High Court of Gujarat disposed of all the petitions by a common judgment.
As the decision was against the Municipal authorities they have now come in
appeal.
For the purposes of disposal of these appeals
it would be sufficient to refer to the allegations made in Special Civil,
Application No. 1454/1965 which is the subject matter of appeal in Civil Appeal
No. 135/1968 before us. The, petitioner Girdharlal Ganpatram was the owner of
Survey Nos.
4222, 4223, 4224/A-BC and 4225/A-B of
Jamalpur, Ward No. 2 Ahmadabad. On these survey numbers there is a, building belonging
to Girdharlal, on the ground floor of which there are shops occupied by
Girdharlal and his tenants.
4 The Corporations Act being Act No. LIX/1949
was enacted ,on December 29, 1949 and came into force on July 1, 1951. By this
Act, the previous statute namely the Bombay Municipal Boroughs Act, 1925, was
repealed.
Under section 210 of the Corporations Act the
Municipal Commissioner is entitled to prescribe what is known as the
"regular line of a public street." After following the necessary
formalities, the regular line of the public street was prescribed by the
Commissioner. Parts of the building of Girdharlal came within this regular line
and so on 3-41962 the Commissioner issued a show cause notice under section 212
( 1 ) (b) of the Corporations Act calling upon Girdharilal to show cause why
superstructure standing upon the aforesaid Survey numbers and lying within the
regular line of the street be not removed and the land thereunder be acquired
under the provisions of the Act for the purposes of .a street. Girdharlal filed
objections but they were over-ruled. Thereafter, with the approval of the
Standing Committee, the ,Commissioner acting under sub-section (2) of Section
212 of the Corporations Act issued final notices to Girdharlal requiring him to
pull down the building or parts thereof which offended against the, regular
line of the street within 7 days of the receipt of the notice. Certain
proceedings followed with which we are not now concerned and thereafter on
6-2-1965, Girdharlal filed the writ petition in the High Court for the relief
already referred to, His contention was that section 212 and certain other
allied sections of the Corporations Act were ultra vires and unconstitutional
and hence the notices issued under section 212 were illegal.
Section 212 which is found in Chapter XIV of
the Corporations Act deals with streets, their construction, maintenance and
improvement. Section 212 is one of the several sections devoted to this
subject. It is as follows :
212. (1) If any building or any part thereof
is within the regular line of a public street and if, in the opinion of the
Commissioner, it is necessary to set back the building to the regular line of
the street he may, if the provisions of section 211 do not apply, by written
notice(a) require the owner of such building to show cause within such period
as is specified in such notice by a statement in writing subscribed by him or
by an agent duly authorised by him in that behalf and addressed to the
Commissioner, why such building or any part thereof which is within the regular
line of the street shall not be pulled down and the land within the said line,
acquired by the Commissioner; or 5 (b) require the said owner on such day at
such time and place as shall be specified in such notice to attend personally
or by an agent duly authorised by him in that behalf and show cause why such
building or any part thereof which is within the regular line of the street
shall not be pulled down and the land within the said line acquired by the Commissioner.
(2) If such owner fails to show sufficient
cause to the satisfaction of the Commissioner why such building or any part
thereof, which is within the regular line of the street shall not be pulled
down and the land within the said line acquired as aforesaid the Commissioner
may, with the approval of the Standing Committee, require the owner by a
written notice, to pull down the building or the part thereof which is within
the regular line of the street (and where a part of a building is required to be
pulled down, to also enclose the remaining part by putting up a protecting
frontage wall) within such period as is prescribed in the notice.
(3) If within such period the owner of such
building fails to pull down such building or any part thereof coming within the
said line, the Commissioner may pull down the same (and where a part of a
building is pulled down, may also enclose, the remaining part by putting up a
protecting frontage wall) and all the expenses incurred in so doing shall be
paid by the owner.
(4) The Commissioner shall at once take
possession on behalf of the Corporation of the portion of the land within the
said line theretofore occupied by the said building, and such land shall thence
forward be deemed a part of the public street and shall vest as such in the
Corporation.
(5)...........................
It is common ground that the provisions of
section 211 do not apply. It is also not disputed that a part of the building
comes within the regular line of the public street and notices have been issued
by the Commissioner, as in his opinion, it was necessary to set back the
building to the regular line of the street. In pursuance of the power given to
him, the Commissioner required the owner of the building to show cause.
objections raised by the owner were considered and over-ruled. Thereafter under
section 212(2) the Commissioner required the owner Girdharlal to pull down the
building or the part thereof which was within the regular line of the street
within 7 days. It is obvious that on 6 his failure to do so, the Commissioner
was entitled under sub-section (3) of Section 212 to pull down the offending
part of the building at the cost of the owner. After such pulling down of the
building the land so vacated was to vest in the Corporation under sub-section
(4) of that section.
For the loss thus caused to the owner by the
action of the "Commissioner, provision was made for payment of
compensation ,under section 216 which is as follows :
216. (1) Compensation shall be paid by the
Commissioner to the owner of any building or land required for a public street
under section 211, 212, 213 or 214 for any loss which such owner may sustain in
consequence of his building or land being so. acquired and for any expense
incurred by such owner in consequence of the order made by the Commissioner
Provided that(i) any increase or decrease in the value of the remainder of the
property of which the building land so acquired formed part likely to accrue
from the set-back to the regular line of the street shall be taken into
consideration and allowed for in determining the amount of such compensation.
(ii) if any such increase in value exceeds
the amount of loss sustained or expenses incurred by the said owner the
Commissioner may recover from such owner half the amount of such excess as a
betterment charge.;" Chapter XXIV of the Act deals with the subject of
compensation generally. Section 329(1) provides as follows :
389. (1) "In the exercise of the powers
tinder the following provisions of this Act by Commissioner ,or any other
municipal officer or servant, or any other person authorized by Or under this
Act to execute any work, as little damage as can be shall be done and
compensation assessed in the manner prescribed by or under this Act shall be
paid to any person who sustains damage in consequence of the, exercise of such
power, namely......... ............................
(f) acquiring any building or land required
for a public street-under section 216." 7 Section 390 is as follows
"Subject to the provisions of this Act, the Commissioner or such other
officer as may be authorised by him in this behalf shall, after holding such
inquiry as he thinks fit, determine the amount of compensation to be paid under
section 389." This determination, however, is not final because two
appeals are provided. Under section 391 it is provided as under :
"Any person aggrieved by the decision of
the Commissioner or other officer under section 390 may within a period of one
month, appeal to the Judge in accordance with the provisions of Chapter
XXVI." "the Judge" means under section 2 clause (29) the Judge
of the Court of Small Causes in the City of Ahmadabad. Section 411 provides for
a second appeal to the, District Court. It says "An appeal shall lie to
the District Court (aa) from a decision of the Judge in an appeal under section
391 against an assessment of compensation under clause (f) of subsection (1) of
section 389." As regards the procedure to be followed in respect of these
appeals, provision is made in section 434 sub-section (1) whereof is "Save
as expressly provided by this Chapter (Chapter XXVI) the provisions of the Code
of Civil Procedure, 1908, relating to appeals from original decrees shall apply
to appeals to the Judge from the orders of the Commissioner and relating to
appeals from appellate decrees shall apply to appeals to the District
Court".
These relevant provisions which have been
quoted above at one place show that where the Commissioner acquires land for
the purposes of the street by asking the owner of the land to pull down his
building or part of it, the owner is entitled to be paid compensation for the
loss suffered by him. The compensation must, in the first instance, be
determined by the Commissioner or an Officer authorised by him in that behalf
and if, on determination of such compensation, the owner of the building who
loses any part of the land to the street is aggrieved by the amount of
compensation offered to him, he is entitled to appeal to the Judge of the Small
Causes Court and to the District Court in second appeal. It is obvious that if
the owner is not sufficiently compensated for the loss suffered by him by the
Commissioner or his authorised Officer, the Judge in the Court of Small Causes
or the District Judge, as the case may be, would be entitled to determine the
proper compensation to be paid to him.
The complaint of the owner in the Writ
Petition took various forms. But the principal attack was on the ground that
the 8 provisions with regard to acquisition in section 212 were unconstitutional
for several reasons. The Corporations Act was passed before the Constitution
came into force. when the Government of India Act, 1935 was in force.
Subsections (1) and (2) of section 299 of the Government of India Act, 1935,
which are roughly similar in content to clauses (1) and (2) of Article 31 of
the Constitution, both before and after the Constitution 4th Amendment Act,
1955, required that the law authorising compulsory acquisition for a public
purpose, (1) should provide for the payment of compensation for the property
acquired; (2) fix the amount of compensation; or (3) specify the principles on
which and the manner in which it is to be determined. It is common ground that
the Corporations Act is a law which by itself does not fix the amount of
compensation. While the submission of the Municipal Corporation is that it
provides for the payment of compensation for the property acquired and also
specifies the principles on which and the manner in which it is to be
determined, the contention of the petitioners is that it does neither.
Therefore, the petitioners, contended that section 212 of the Corporations Act
was unconstitutional in so far as it violated the provisions of section 299 of
the Government of India Act, 1935 and also of Article 31 of the Constitution.
Certain other challenges were also made in
the petitions to the validity of section 212 and some other allied sections of
the Corporations Act on the ground that they infringed the constitutional
safeguards embodied in Articles 14 and 19 of the Constitution. The High Court
rejected the challenge under Article 19 (1) (g). It did not think it necessary
to consider the challenge under other heads in view of its finding that the
challenge under section 299 of the Government of India Act, 1935 was
successful. Learned counsel for the respondents before us did not press the
challenge under Article 19(1)(g). Therefore, the only question which survives
for consideration is whether the High Court was right in holding that section
212 of the Corporations Act is unconstitutional on the ground of its alleged
violation of the provisions of section 299 of the Government of India Act or
Article 31 of the Constitution.
If the view of the High Court in this respect
is not upheld, it is obvious that the case will have to go back to the High
Court for the consideration of points not finally decided for the purpose of
the disposal of the petitions.
The contention on behalf of the property
owners was that the Corporations Act did not provide (1) for the payment of
compensation for the property acquired and (2) did not specify the principles
on which and the manner in which it is to be determined. The High Court only
partially accepted this contention. It did not agree with the contention that
the Corporations Act 9 did not provide for the payment of compensation for the
property acquired. On the second question, however, the High Court agreed that
the Act neither specified the principles of compensation nor the manner in
which it was to be determined.
We are in agreement with the view of the High
Court that the Corporations Act does provide for the payment of compensation
for the property acquired. We have only to refer to section 216 and section 389
of the Act for this purpose. Section 216(1) clearly lays down that compensation
shall be paid by the Commissioner to the owner of any building or land required
for public street under sections 211, 212, 213 and 214 for any loss which such
owner may sustain in consequence of his building or land being so acquired, and
for any expense, incurred by such owner in consequence of the order made by the
Commissioner. Then section 389 (1) provides that compensation assessed in the
manner prescribed by or under the Act shall be paid to any person who sustains
damage in consequence of the exercise of such power, namely, "(f)
acquiring any building or land required for a public street Under section
216." The two sections read together make it clear that full
indemnification in terms of money for the loss caused is to be made to the
owner of the property or other interests ,affected by reason of the exercise of
power under section 212. Under the latter section what is acquired for the
purposes of the street is the land of the owner which falls within the regular
line of the street. Several provisions are made in Chapter XIV for the widening
of streets within the limits of the Corporation. With the enormous increase in
traffic in the more congested parts of a growing City, Municipal authorities
are constantly under pressure to widen the, streets and one of the several
methods prescribed in Chapter XIV is contained in section 212. The regular line
of the street as prescribed under section 210 often passes through the
'properties of owners abutting on the streets and it is impossible to widen the
streets unless parts of lands belonging to the owners are acquired. Sometimes a
building or a structure or part of it stands on such land and unless that
portion of the building which falls within the line is removed the, acquisition
of the land for the purpose of the street is not possible. Therefore, in the
first instance the section requires that the Commissioner shall issue a show
cause notice why the buildings or a part of the building which falls within the
line of street should not be pulled down with a view to release the underneath
fur the purposes of the, street. If after hearing the owner the Commissioner is
of the opinion that the building or part thereof should be pulled down, he must
obtain the, approval of the Standing Committee and then serve a notice on the
owner to pull down the offending building or part of building within a 1208
Sup. CI/72 certain time. If the owner cooperates, he will himself remove the
offending structure and release the land underneath it for being absorbed in the
street. If he does not, the Commissioner is empowered to pull down the
offending structure at the cost of the owner. Then subsection (4) of section
212 provides that the Commissioner shall at once take possession on behalf of
the Corporation of the portion of the land within the said line (line of the
public street) theretofore occupied by the said building, and such land shall
thence forward be deemed a part of the public street and shall vest as such in
the Corporation.
The provisions of section 212, therefore,
clearly declare that what is acquired under that section is the land lying
within the line of the public street. The technical question as to whether
there is acquisition of the building when the owner himself does not pull down
the. offending part of the structure but the Commissioner does it at the
owner's expense is not necessary for the disposal of the question whether the
Act provides for the payment of compensation. Since every kind of loss is
required to be compensated as a, consequence of the order passed by the
Commissioner under section 216 of the Act, the question whether the Act need
have provided for compensation as on the acquisition of the building or a part
of the building which is pulled down under section 212, does not survive.
The owner. has to be compensated for every
deprivation or loss and, therefore, prima facie 'it must be held that the
Corporations Act provides for the payment of compensation for the property
acquired.
It was, however, argued that the two provisos
to sub-section (1) of section 216 when given effect to may not only nullify the
direction given in sub-section (1) for payment of compensation but also in
certain contingencies compel the owner to pay the Corporation something out of
his own pocket. When sub-section (1) provides for payment of compensation for
the loss suffered it provides for adequate indemnification or compensation.
When such compensation is reduced in the contingencies visualized in the two
provisos the compensation, it was submitted, may turn out to be illusory and
the provision for the payment of compensation an empty assurance. Proviso (1)
prescribes that "any increase or decrease in the value of the remainder of
the property of which the building or land so acquired formed part likely to
accrue from the set-back to the regular line of the street shall be taken into
consideration and allowed for in determining the amount of such
compensation." Proviso (ii) states that "if any such increase in the
value exceeds the amount of loss sustained or expenses incurred by ,he said
owner, the Commissioner may recover from such owner half the amount of such
excess as a betterment charge." Proviso (i) implies that the compensation
payable under subsection (1) is liable to be increased or reduced 11 after 'the
set-back. It envisages that by reason of the set-back or the widening of the
street the Property which still remained with the owner is likely, on account
of the new situation, either to increase or decrease, in value. If that
happens, that is to be taken into consideration and the amount determined under
sub--section (1) will have to be adjusted accordingly. The High Court is of the
view that proviso (1) is unobjectionable as it is a principle governing the
determination of compensation and can be rightly employed in determining the
compensation for the property acquired. The High Court, however, was not
inclined to hold that proviso (ii) lays down any principle for determination of
compensation payable for the property acquired. It held, nevertheless, that the
proviso was severable from the main part of the section and did not affect the
provisions of sub-section (1) for payment of compensation. It is obvious that
it is only in very rare contingencies that proviso (ii) may become operative.
But in considering the question as to whether,.the Act provides for
compensation for acquisition or not there can be little doubt that it does so
in sub-section (1) of section 216.
That it may in some rare contingencies be
very much reduced after taking into account the value of the benefit conferred
on the owner by reason of the widening of the street is no adequate reason to
hold that the Act, does not provide for payment of compensation. As a matter of
fact in an actual enquiry for determining the amount of compensation to be paid
the authority charged with the duty will have to assess, in the first instance,
the value of the total loss or deprivation actually suffered. The provisos may
in some rare contingencies go to reduce the amount so determined.
Proviso (ii) envisages a situation where the
widening of the street has so much benefited the owner that the value of the
benefit even exceeds the actual loss suffered by him. In such a case instead of
getting any compensation for the loss the owner might have to pay out of his
own pocket. As to whether proviso (ii) prescribes any principle for
determination of compensation or not is not relevant for our present purpose.
Both the provisos come into play only after the compensation for loss is
determined under subsection (1) of section 216 and since that sub-section
declares that full compensation must be paid for the loss or deprivation
suffered by the owner it will be incorrect to say that the Act does not make
provision for the payment of compensation for the property acquired. We have,
therefore, no hesitation in agreeing with the High Court that the Corporations
Act provides for the payment of compensation for the property acquired under
section 212.
The next question is whether the Act
specifies the principles on which and the manner in which compensation is to be
determined. The High Court has been of the view that neither principles for
determination of compensation nor the manner of its 12 determination has been
specified and that is the ground on which it has held that the provisions of
section 212 are unconstitutional. We are unable to agree. with that view.
What is meant by specification of principles
for determining compensation ? In the State of Gujarat v. Shri Shantilal
Mangaldas & Ors.(1) this Court observed:-"Specification of principles
means laying down general guiding rules applicable to all persons or
transactions governed thereby.
Under the Land Acquisition Act compensation, is
determined on the basis of "market value" of the land on the date of
the notification under s 4(1) of that Act. That is a specification of
principle." At a later stage the Court again observed at page, 362
"Rules enunciated by the courts for determining compensation for
compulsory acquisition under the Land Acquisition Act vary according to the
nature of the land acquired. For properties which are not marketable
commodities, such as lands, buildings and incorporeal rights, valuation has to
be made on the application of different rules. Principle of capitalisation of
net rent at the current market rate on guilt-edged securities, principle of
reinstatement, principle of determination of original value less depreciation,
determination of break-up value in certain types of property which have
out-grown their utility, and a host of other so-called principles are employed
for determination of compensation payable for acquisition of lands, houses,
incorporeal rights, etc." The Land Acquisition Act makes market value at a
certain date the basis for the determination of compensation. But there is no
one sure way of applying the principle. As is well-known when set-back is
imposed by the line of the street, the land actually acquired by the
Corporation may be in some cases a few sq. yards or even a few sq. inches.
Then again the land acquired may be of no
significant use to an body except, to the Corporation as a part of the street.
The land acquired may be wedge-shaped,
sometimes irregular in contour and often shapeless. If the principle, of a
willing seller and a willing buyer is applied there can possibly be no market
at all for the property acquired. It is not suggested that in every case of
acquisition of land for the street this principle will break down. But having
regard to the fact that in the course of widening the street the Corporation
may have to acquire very irregular, shapeless and small pieces of land for the
purposes of the street, a host of principles may have to be employed to
determine the compensation. We asked learned counsel for the respondents (1)
[1969](3) S.C.R. 341 at p. 357.
what one general principle of determination
of compensation in such cases could have, been appropriately specified.
"We did not get any satisfactory reply. It appears to us that this very
difficulty in specifying any known rule of compensation is responsible for the
wording of section 216 and section 389 of the Act which, in our opinion, gets
over the difficulty by providing full indemnification for the loss or
deprivation suffered by the owner of the building. or other interests in the
property.
We have referred to the provisions with
regard to appeals.
The first appeal lies to the Judge of the
Small Causes courts and a second appeal to the District Judge. , The
involvement of Civil Courts in finally determining compensation imports
judicial norms. Since full indemnification in accordance with judicial norms is
the? goal set by the Act it is implicit in such a provision that the rules for
determination of compensation shall be appropriate to the property acquired and
such as will achieve the goal of full indemnity against loss. In other words,
the Act provides for compensation to be determined in accordance with judicial
principles by the employment of appropriate methods of valuation so that the
person who is deprived of property is fully indemnified against the loss.
This, by itself, in' our opinion, is a
specification of a principle for the determination of compensation.
As regards the manner of determination of
compensation, it is provided in section 390 of the Corporations, Act. Under
that section the Commissioner or such other officer as may be authorised by him
shall hold such enquiry as he thinks fit and determine the amount of
compensation to be paid.
Either the Commissioner or an Officer
authorised by him has to hold an appropriate enquiry before determining the
amount of compensation. Since, as already seen, there is an appeal from such
determination to the Judge of the small Causes Court under section 391 and a
second appeal to the District Court under section 411 it is clear that the
enquiry must be made on broad judicial lines.. Any arbitrary determination is
bound to be set aside in appeal because the Judges in appeal will be chiefly
concerned to see whether the enquiry is made in accordance with normal judicial
procedures for evaluating the loss by the application of methods of valuation
appropriate to the particular acquisition before them. Since no limitations are
placed on the powers of the Appellate Judges 'in determining the loss in a just
and appropriate manner, it is expected that the Commissioner or his authorised
officer, who holds the enquiry in the first instance, will be guided by
principles which meet with the approval of the Appellate authorities. In our
opinion, therefore. the manner of the determination of compensation is also
specified by the Act.
It is conceded before us that if this Court
holds that the Corporations Act has provided for the payment of compensation
and 14 also specified the principle on which, and the manner in which
compensation is to be determined, it would not be possible to say that the Act
is either in violation of the provisions of section 299 of the Government of
India Act, 1935 or Article 31 of the Constitution.
Since the High Court had not considered the
challenge to the validity of section 212 and the allied sections of the Act on
the ground of infringement of fundamental rights under Article 14 and partially
under Article 19 of the Constitution, and the learned counsel for both sides
agree that the cases should be remanded to the High Court for disposal after
considering the points raised in that regard, we send down the cases
accordingly for disposal.
The appeals are allowed. The order passed by
the High Court is set aside and the proceedings are ordered to be transmitted
to the High Court for disposal in accordance with the law after hearing the
parties on points kept open and undecided by the High Court in its Judgment
dated 5-121966. The appellants shall get one set of costs from the respondents
other thin the I State of K.B.N.
Appeals allowed.
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