Prakash Amichand Shah Vs. State of
Gujarat & Ors [1985] INSC 257 (20 December 1985)
VENKATARAMIAH, E.S. (J) VENKATARAMIAH, E.S.
(J) REDDY, O. CHINNAPPA (J) ERADI, V. BALAKRISHNA (J) MISRA, R.B. (J) KHALID,
V. (J)
CITATION: 1986 AIR 468 1985 SCR Supl. (3)1025
1986 SCC (1) 581 1985 SCALE (2)1437
CITATOR INFO: RF 1986 SC1466 (11) F 1987 SC
493 (3) D 1989 SC1796 (8)
ACT:
Bombay Town Planning Act, 1954 Sections 32
& 53 - Whether the Town Planning Scheme No. VIII (Umarwada) published under
the Act is violative of Articles 14, 19(1) (f) and 31 of the Constitution of
India.
Precedents, scope, nature and authority of -
Duty of a Constitution Bench to consider the effect of the precedent, explained
- The binding nature of Shantilal Mangaldas's case.
Statutes - Act not providing for an appeal
from some of the decisions under a particular section while providing an appeal
against some other decisions under the very same section Whether could be said
to be discriminatory and unconstitutional.
Town Planning Schemes under the Bombay Town
Planning Act of 1954 not providing for any solatium while such solatium is
available under the Land Acquisition Act - Whether for that reason it could be
said to be discriminatory.
HEADNOTE:
Land admeasuring in all 49 acres 22 gunthas
bearing Survey Nos. 75, 81, 83, 84 and 86 situated at Surat City in the State
of Gujarat originally belonged to one Ladli Begum.
She granted a lease in respect of the said
land in favour of a company called Nawab of Belha Spinning, Weaving and Manufacturing
Mills, Ltd. under a document dated November 15, 1882 for a period of 99 years
with effect from November 1, 1881 with a right for renewal for a further period
of 99 years. the company which had taken the land on lease executed a sub-lease
in respect of 38 acres 2 gunthas out of the entire plot of land on March 29,
1881 in favour of one Dr. Nassurwanji N. Khambata for the residuary period of
99 years without the right of renewal. This sub-lease was to expire on October
31, 1980. Under a document dated April 30, 1928 Surat Parsi Panchayat Board
acquired the lease in respect of the entire 38 acres 2 gunthas, from a lady who
was the daughter of one Rustamji who had acquired the rights of Dr. Nassurwanji
N. Khambata. On May 24, 1937 the appellant Prakash Amichand Shah 1026 purchased
the right, title ant interest of the head lessee, that is Nawab of Belha
Spinning, Weaving and Manufacturing Mills Ltd. in an auction sale held in the
course of liquidation proceeding of the said company. The appellant thus became
the head lessee of the entire plot of land with the rights specified in the
document dated November 15, 1882. Surat Parsi Panchsyat Board which had
Acquired the right of the sub-lessee in respect of 38 acres 2 gunthas created
sub-lease in respect of 34 acres 4 gunthas in Survey in Survey Nos. 75, 81 and
32 in favour of the Surat Municipal Corporation under a document dated March
30, 1963 relating the sub-lessee's right in the remaining land.
The Surat Borough Municipality passed a
resolution on August 2, 1963 to prepare a Draft Development Plan for the entire
area within the municipal limits of Surat city in accordance with the
Development Regulations issued by it with the object of checking haphazard
growth of he city.
Pursuant to the said resolution, a
notification was issued on April 3, 1965 under section 4 of the Land
Acquisition Act, 1894 to acquire a portion of the entire plot of land
admeasuring 34 acres 4 gunthas in Survey Nos. 75, 81 and 82 for the purpose of
setting up an industrial estate by the Surat Borough Municipality , Surat which
involved the shifting of Municipal Workshops and Central Stores. On June 22,
1965 the Surat Borough Municipality made a declaration declaring its intention
to prepare a Town Planning Scheme, being the Town Planning Scheme No. VIII of
Umarwada in respect of the locality called Umarwada under section 22 of the
L.A. Act. Since the Surat Municipality could not make and publish the draft
scheme even within the time allowed under the Bombay Town Planning Act, under
sub-section 2 of section 23 of the Act the Collector of Surat was authorised by
the State Government to make and publish the draft scheme dated July 4, 1967
the land admeasuring 1,37,961 sq. meters out of the aforesaid land of which the
appellant was the head lessee was shown as reserved for the Surat Municipality.
The appellant filed his objection to the proposed reservation pointing out
therein that he himself needed the land for expansion of his business and for
construction of homes for his employees. He also stated that the Surat
Municipality had acted mala fide in securing the reservation of such a large
piece of land in its favour. The Government of Gujarat after overruling the
objection ultimately granted sanction to the draft scheme prepared by the collector
of Surat b y its notification dated May 10, 1968. When one Mr. M.C. Makwana
appointed as the Town Planning Officer by the Government on February 28, 1969
entered upon his functions under section 32 of the Act, the appellant again
filed his objection to reservation of his 1027 land for the alleged purpose of
the Municipal Corporation.
In addition the appellant also claimed
compensation in respect of the said 38 acres 2 gunthas at the rate of Rs.50 per
sq. yard alleging that the land in the vicinity had been sold at that rate and
claimed towards his share two-thirds of the total compensation. Then on June
30, 1970 the Town Planning Officer issued a notice expressing his intention to
acquire the land in question admeasuring 1,37,961 per sq.
meter. Aggrieved by the said decision, the
appellant filed an appeal before the Board of appeal. The Board of Appeal held
that disputes regarding compensation of lands taken away for the purpose of the
scheme being not within the scope of section 33 (1) (xiii) of the Act the
decision of the Town Planning Officer on those questions was not appealable
under section 34 of the Act. Aggrieved by the decision of the Board the
appellant filed a writ petition before the High Court of Gujarat which was
dismissed. The Constitution questions raised in the writ petition could not be
decided by the High Court as emergency was then in force in the country and the
rights guaranteed under Articles 14, 19 and 31 of the Constitution of India on
which the appellant's contentions were based remained suspended at that time.
The High Court, however, referred to the decision of this Court in State of
Gujarat v. Shri Shantilal Mangaldas, [1969] 3 S.C.R. 341 in which the validity
of the Bombay Town Planning Act had been upheld . Aggrieved by the judgment of
the High Court the appellant filed this appeal by special leave. The appeal was
heard by a Bench of this Court consisting of A.C. Gupta and A.P. Sen JJ, which,
by its judgment dated July 24, 1981 reported as Prakash Amichand Shah v. State
of Gujarat. [1982] 1 S.C.R. 81, came to the conclusion that the High Court was
right in its finding that he decision of the Town Planning Officer determining
the amount of compensation in the appellant's case was not appealable. However,
the Court felt that the case should be placed before the Constitution Bench for
hearing the question relating to the constitutional validity of the Act. Hence
the appellant's case before the Constitution Bench.
Dismissing the appeal, the Court ^
HELD: 1.1 There is no constitutional
infirmity in the provision of the Bombay Town Planning Act, 1954 and there is
no ground to declare the Act which has been upheld in Shantilal Mangaldas's
about 17 years ago as unconstitutional now and to unsettle all settled
transactions drawing inspiration from certain vague observations made in game
subsequent decisions. [1056 D-E; 1060 B-C] 1028
1.2 The Bombay Town Planning Act is not bad
for not extending the procedure of the Land Acquisition Act, 1894 to the
proceedings under the Town Planning Scheme. It cannot be struck down on the
ground, that if the Land Acquisition Act, 1894 had been applied, the appellant
would have had the benefit of the machinery provided under section 18 and 54 of
the Acquisition Act ant since it is not available under the procedure
prescribed by the Act in the case of lands taken under section 53 thereof the
Act is discriminatory. [1057 D- E]
2.1 The object of the Bombay Town Planning
Act is not just acquiring a bit of land here or a bit of land there for some
public purpose. It consists of several activities which have as their ultimate
object the orderly development of an urban area. It envisages the preparation
of a development plan, allocation of land for various private and public uses,
preparation of a Town Planning Scheme and main provisions for future
development of the area in question.
On the final Town Planning Scheme coming into
force under section 53 of the Act there is an automatic vesting of all lands
required by the local authority. It is not a case where the provisions of the
Land Acquisition Act, 1894 have to be set in motion either by the Collector or
by the Government. The divesting of title takes place statutorily.
Section 71 of the Act provides for payment of
compensation to the owner of an original plot who is not provided with a plot
in the final scheme, or if the contribution to be levied from him under section
66 of the Act is less than the total amount to be deducted there from under any
of the provisions of the Act. Section 73 of the Act provides for payment due to
be made to any person by the local authority by adjustment of account as
provided in the Act Section 32 of the Act lays down the various duties and
powers of the Town Planning Officer which he has to discharge and exercise for
the benefit of the whole community. All his functions are parts of the social
and economic planning undertaken and executed for the benefit of the community
at large and they cannot be done in isolation. When such functions happen to be
integral parts of a single plan which in this ca e happens to be an urban
development plan, they have to be viewed in their totality and not as
individual acts directed against a single person or a few persons. It is quite
possible that when statutory provisions are made for that purpose, there would
be some difference between their impact on rights of individuals at one stage
and their impact at another stage. [1046 C-H; 1047 A]
2.2 In this very Act, there are three types
of taking over of lands-first under section 11, secondly under section 53 and
1029 thirdly under section 84 of the Act, each being a part of a single scheme
but each one having a specific object and public purpose to be achieved. While
as regards the determination of compensation lt may be possible to apply the provisions
of the Land acquisition Act, 1894 with some modification as provided in the
Schedule to the Act in the case of lands acquired either under section 11 or
under section 84 of the Act, ii the case of lands which are needed for the
local authority under the owners Planning Scheme which authorises allotment of
reconstituted plots to persons from whom original plots are taken, it is
difficult to apply the provisions of the Land Acquisition Act, 1894. The
provisions of section 32 and the other financial provisions of the Act provide
for the determination of the cost of the scheme, the development charges to be
levied and contribution to be made by the local authority etc. It is only after
all that exercise is done the money will be paid to or demanded from the owners
of the original plots depending on the circumstances governing each case. If in
the above context, the Act has made special provision under section 67 to 71 of
the Act for determining compensation payable to the owners of original plots
who do not get the reconstituted plot 6 lt can not be said that there has been
any violation of Article 14 of the Constitution. Even there the market value of
the land taken 18 ¯ t lost sight of and hence no violation of Article 31(2) of
the Constitution either. [1047 A-E] State of Gujarat v. Shri Shantilal
Mangaldas & Ors., [1969] 3. S.C.R. 341., The Zandu Pharmaceutical Works
Ltd.
v. G.J. Desai & Ors. C.A.No. 1034 of 1967
decided ib 28th August 1969., Maneklal Chhotalal & Ors. v. M.G. Makwana
& Ors., [1967] 3 S.C.R. 65 explained an applied.
3.1 A decision ordinarily is a decision on
the case before the Court, while the principle underlying the decision would be
bindings as a precedent in a case which comes up for decision subsequently.
Hence, while applying the decision to a later case, the Court which 18 dealing
with lt should carefully try to certain the true principle laid down by the
previous decision. A decision often takes its colour from the questions
involved in the case in which it is rendered. The scope and authority of a
precedent should never be expanded unnecessarily beyond the needs of a given
situation. [1052 C-E]
3.2 Expressions like "virtually
overruled" or "in substance overruled" are expression of
inexactitude. In such circumstances, it is the duty of a Constitution Bench of
the Supreme Court which has to consider the effect of the precedent in question
to read 1030 it over again ant to form its own opinion instead of wholly
relying upon the gloss placed on it in some other decision.
An inappropriate purpose for which a
precedent is used at a later date does not take away its binding character as a
precedent. In such cases there is good reason to disregard the later decision.
Such occasions in judicial history are not rare. The history of the law
relating to the right of labourers to strike in a factory of one such instance.
[1055 E-F; H; 1056A]
3.3 Therefore, as long as the Bombay Town
Planning Act, 1954 which was upheld by the Supreme Court in Shantilal Mangal
das's has not been struck town by this Court in any subsequent decision it
would be wholly unjust to declare it inferentially as having been declared as
void in a subsequent decision which depends mostly on the reasons in Shantilal
Mangaldas's case for its survival. The decision in Shantilal Mangaldas's case
has not been overruled by the Bank Nationalisation case which has only
explained Shantilal MangalDas's case and does not overrule it particularly
after the Nation has first expressed itself in favour of the 25th Constitution
Amendment and then decided to delete Article 31 altogether from the
Constitution. [1056 B-E] R.C. Cooper v. Union of India [1970] 3 S.C.R. 530;
Kesvananda Bharati v. State of Kerala [1973]
Suppl. S.C.R. l; State of Karanataka & Anr. v. Rangnatha Reddy & Anr. [1978]
S.C.R. 641 explained.
Temperton v. Russell (1893) 1 Q.B. 715 (CA);
Allen v. Flood (1898) A.C.1; Quinn v. Leathem (1901) A.C. 495 referred to.
4. There is no rule that every decision of
every officer under a statute should be made appealable and if it is not 80
made appealable the statute should be struck down.
It may be salutary if an appeal is provided
against decisions on questions which are of great importance either to private
parties or to the members of the general public, but ordinarily on Such matters
the Legislature is the best judge. Unless the Court finds that the absence of
an appeal is likely to make the whole procedure oppressive and arbitrary, the
Court does not condemn it as unconstitutional. Considering the status of the
officer who is appointed as a Town Planning Officer, Section 32 of the Bombay
Town Planning Act cannot be said to confer uncanalised and arbitrary power on
the Town Planning Officer, merely because of the denial of the right of appeal
in some cases. [1056 F-H; 1057 A-B] M/s Babubbsi & Co. Ors. v. State of
Gujarat [1985] 2 S.C.C. 732 followed. 1031
5.1 It is wrong to contend that the denial of
the solatium of 15 per cent (or 30 per cent, as the law now is) of the market
value of the land in addition to the compensation payable for lands taken by
the local authority for purposes of the scheme makes the Bombay Town Planning
Act discriminatory. [1057 E-F; 1059 G]
5.2 It cannot also be said as a rule that the
State which has got to supply and maintain large public services at great cost
should always pay in addition to a reasonable compensation some amount by way
of solatium. The interest of the public is equally important. In any event it
is not shown that the compensation payable in the present case is illusory and
unreal. [1059 H; 1060 A-B] Nagpur Improvement Trust and Anr. v. Vithal Rao
& Ors., [1973] 3 S.C.R. 39; State of Kerala & Ors. v. T.N. Peter &
Anr.,[1980] 3 S.C.R. 290; P.C. Goswami v. Collector of Darrang,A.I.R. 1982 S.C.
1214 distinguished.
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
1224 of 1977.
From the Judgment and Order dated 3.9.1976 of
the Gujarat High Court in Special Civil Application No. 1501 of 1974.
R.F. Nariman, P.K. Manohar and P.H. Parekh
for the Appellants.
T.S. Krishnamoorthy Iyer, T.U. Mehta ,
Prashant Desai and S.C. Patel for the Respondents.
The Judgment of the Court was delivered by
VENKATARAMIAH, J. This appeal by special leave is preferred against the
judgment dated September 3, 1976 in Special Civil Application No. 1501 of 1976
on the file of the High Court of Gujarat filed under Article 226 of the
Constitution of India in which the appellant had challenged the constitutional
validity of the Town Planning Scheme No.
VIII (Umarwada) in respect of certain lands
situated at Surat City in the State of Gujarat, published under the provisions
of the Bombay Town Planning Act, 1954 (hereinafter referred to as 'the Act') in
so far as the said scheme pertained to the land of which the appellant was the
lessee, alleging inter alia that it was violative of Article 14, 19(1)(f) and
31 of the Constitution of India.
The land in question originally belonged to
one Ladli Begum. She granted a lease in respect of the said land in favour of a
1032 company called Nawab of Belha Spinning, Weaving and Manufacturing Mills
Ltd. under a document dated November 15, 1882 for a period of 99 years with
effect from November 1, 1881 with a right of renewal for a further period of 99
years. The land was described as the land bearing Survey Nos. 75, 81, 83, 84
and 86 measuring in all 49 acres 22 gunthas. The company which had taken the
land on lease executed a sub-lease in respect of 38 acres 2 gunthas out of the
entire plot of land on March 29, 1884 in favour of one Dr. Nassurwanju N.
Rhambata for the residuary period of 99 years without the right of renewal.
This sub-lease was to expire on October 31, 1980. Under a document dated April
30, 1928 Surat Parsi Panchayat Board required the lease in respect of the
entire 38 acres 2 gunthas, referred to above, from a lady who was the daughter
of one Rustamji who had acquired the rights of Dr. Nassurwanji N. Khambata. On
May 24, 1937 the appellant purchased the right, title and interest of the head
lessee, i.e., Nawab of Belha Spinning, Weaving and Manufacturing Mills Ltd. in
an auction sale held in the course of liquidation proceedings of the said
company. The appellant thus became the head lessee of the entire plot of land
with the rights specified in the documents dated November 15, 1882, referred to
above. Surat Parsi Panchayat Board which had acquired the right of the
sub-lessee in respect of 38 acres 2 gunthas created a further sub-lease in
respect of 34 acres 4 gunthas out of the 38 acres 2 gunthas in favour of the
Surat Municipal Corporation under a document dated March 30, 1963 retaining the
sub-lessee's right in the remaining land.
The Surat Borough Municipality passed a
resolution on August 2, 1963 to prepare a Draft Development Plan for the entire
area within the municipal limits of Surat City in accordance with the
Development Regulations issued by it with the object of checking haphazard
growth of the city.
Pursuant to the said resolution, a
notification was issued on April 3, 1955 under section 4 of the Land
Acquisition Act, 1894 to acquire a portion of the entire plot of land
admeasuring 34 acres 4 gunthas in Survey Nos. 75, 81 and 82 for the purpose of
setting up an industrial estate by the Surat Borough Municipality, Surat which
involved the shifting of Municipal Workshops and Central Stores. On June 26,
1965 the Surat Borough Municipality made a declaration declaring its intention
to prepare a Town Planning Scheme, being the Town Planning Scheme No. VIII of
Umarwada in respect of the locality called Umarwada under section 22 of the
Act. The Municipality however could not make and publish the draft scheme
within 12 months from the declaration of its intention as 1033 required by
section 23(1) of the Act. The State Government, however, by its Notification
dated August 31, 1966 in exercise of its power under the proviso to section
23(1) extended the period for making and publishing the draft scheme by six
months. The Municipality could not make and publish the draft scheme even
within that extended period of six months. Then under sub-section (2) of
section 23 of the Act the Collector of Surat was authorised by the State
Government to make and publish the draft scheme within nine months from
December 26, 1966. Accordingly, the Collector of Surat by Notification dated
July 4, 1967 published a draft scheme. In the draft scheme as made and
published by the Collector, the land admeasuring 1,37,961 sq. metres out of the
aforesaid land of which the appellant was the head lessee was shown as reserved
for the Surat Municipality. The appellant filed his objection to the proposed
reservation pointing out therein that he himself needed the land for expansion
of his business and for construction of homes for his employees. He also stated
that the Surat Municipality had acted mala fide in securing the reservation of
such a large piece of land in its favour. The Government of Gujarat after
overruling the objection ultimately granted sanction to the draft scheme
prepared by the Collector of Surat by its Notification dated May 10, 1968. On
June 7, 1968 one Shri N.R. Bhambhani was appointed as the Town Planning Officer
to finalise the scheme. He was succeeded by Shri M.G.Makwana who was appointed
as the Town Planning Officer by the Government on February 28, 1969. When the
Town Planning Officer entered upon his functions under section 32 of the Act,
the appellant again filed his objection to the reservation of his land for the
alleged purpose of the Municipal Corporation. In addition the appellant also
claimed compensation in respect of the said 38 acres 2 gunthas at the rate of
Rs.50 per sq. yard alleging that the land in the vicinity had been sold at that
rate and claimed towards his share two-thirds of the total compensation. Then
on June 30, 1970 the Town Planning Officer issued a notice expressing his
intention to acquire the land in question admeasuring 1,37,961 sq. metres. On
November 4, 1971 he determined the compensation payable in respect of the said
land at the rate of Rs.2.40 paise per sq. metre. Aggrieved by the said
decision, the appellant filed an appeal before the Board of Appeal. The Board
of Appeal held that disputes regarding compensation of lands taken away for the
purpose of the scheme being not within the scope of section 33(1)(xiii) of the
Act the decision of the Town Planning Officer on those questions was not appealable
under section 34 of the Act. The Board of Appeal inter alia observed that it
was not for the Board to say anything regarding the propriety of the action
taken by the Town Planning 1034 Officer in reserving the entire plot of land
admeasuring 1,37,961 sq. metres, in which the appellant was interested, for the
purpose of the Surat Municipality. It also held that on the question of
apportionment of the compensation no appeal lay to it. Aggrieved by the
decision of the Board, the appellant filed a writ petition before the High
Court of Gujarat out of which this appeal arises.
The High Court dismissed the writ petition
concurring with the Board of Appeal that the appeal was incompetent.
The constitutional questions raised in the
writ petition could not be decided by the High Court as emergency was then in
force in the country and the rights guaranteed by Articles 14,19 and 31 of the
Constitution of India on which the appellant's contentions were based remained
suspended at that time. The High Court however referred to the decision of this
Court in State of Gujarat v. Shri Shantilal Mangaldas,[1969] 3 S.C.R. 341, in
which the validity of the Act had been upheld. Aggrieved by the judgment of the
High Court the appellant has filed this appeal by special leave.
This appeal was heard first by a bench of
this Court consisting of A.C. Gupta and A.P. Sen, JJ. On that occasion the
learned counsel for the appellant submitted that in case the Court upheld that
the appeal preferred by the appellant before the Board of Appeal was
maintainable he would not press the grounds questioning the constitutional
validity at that stage and the matter should then go back to the Board of
Appeal for its decision on the adequacy of the compensation. He further
submitted that if the Court found that the Board of Appeal was right in holding
that the appeal was not maintainable, he should be given leave to urge the
grounds challenging the validity of the Act. The learned Judges who heard the
appeal came to the conclusion that the High Court was right in finding that the
decision of the Town Planning Officer determining the amount of compensation in
the appellant's case was not appealable by its judgment dated July 24, 1981
which is reported as Prakash Amitchand Shah v. State of Gujarat,[1982] 1 S.C.R.
81. In view of the above conclusion the court
felt that the case should be placed before Constitution Bench for hearing the
questions relating to the constitutional validity of the Act. That is how the
case is now before this Constitution Bench to consider the said questions.
Before taking up for consideration the
contentions urged on behalf of the appellant, it is necessary to understand the
1035 objects and the scheme of the Act. The principal objects of any Town
Planning legislation generally are to provide for planning, the development and
control of the use of land and to confer on public authorities such as City
Municipalities, Municipal Boroughs, Town Municipalities, Town Panchayats etc.
powers in respect of the acquisition and development of land for planning and
other purposes. Such laws generally provide for the preparation of schemes that
might be made in respect of the land with the general object of controlling its
development, securing proper sanitary conditions, amenities and conveniences
such as public parks, play grounds, hospital areas etc., preserving existing
buildings or other objects of architectural, historic and artistic interest and
places of natural interest or beauty and generally of protecting existing
amenities. The Act is one such piece of legislation. It was enacted in the
place of an earlier statute which was in force in the province of Bombay,
namely, the Bombay Town Planning Act, 1915. The Act came into force on April 1,
1957 before the reorganisation of the State of Bombay and it continued to be in
force in the State of Gujarat even after the Bombay Reorganisation Act 1960
came into force. Under the Act every local authority as defined under section
2(4) thereof was required by section 3 of the Act to carry out a survey of the
area within its jurisdiction and not later than four years from the date on
which the Act came into force to prepare and publish in the prescribed manner a
development plan and to submit it to the State Government for sanction. Before
carrying out a survey of the area referred to in sub- sections (1) and (2) of
section 3 of the Act for the purpose of preparing the development plan for such
area, a local authority is required to make a declaration of its intention to
prepare the development plan and to despatch a copy thereof to the State
Government for publication in the Official Gazette and to publish it in the
prescribed manner for inviting suggestions from the public within a period of
two months. Section 4 to 7 of the Act provide for the declaration of intention
of making development plan, the manner of preparing a development plan, power
of entry for carrying out survey for preparing development plan and the
contents of a development plan. Section 7 of the Act which deals with the
contents of development plan states that generally the development plan should
indicate the manner in which the development and improvement of the entire area
within the jurisdiction of the local authority are to be carried out and
regulated. The local authority is required to indicate in the development plan
its proposals with regard to the following :
(a) proposals for designating the use of the
land for the purposes such as (1) residential (2) industrial, (3) commercial,
and (4) agricultural;
1036 (b) proposals for designation of land
for public purposes such as parks, play grounds, recreation grounds, open
spaces, schools, markets or medical, public health or physical culture
institutions;
(c) proposals for roads and highways;
(d) proposals for reservation of land for the
purposes of the Union, any State, any local authority or any other authority
established by law in India; and (e) such other proposals for public or other
purposes as may from time to time be approved by the local authority or
directed by the State Government in this behalf.
By requiring a local authority to prepare a
development plan, the Act intends that the Town Planning Schemes should form
part of a single and cohesive plan for development of the entire area over
which the local authority has jurisdiction. The local authority is required to
submit the development plan for the sanction of the State Government.
After the receipt of the sanction of the
State Government of the development plan, the local authority is authorised by
section 11(1) of the Act to acquire any land designated in the development plan
for purposes specified in clauses (b),(c),(d) & (e) of section 7 of the Act
either by agreement or under the Land Acquisition Act, 1894. Sub- Section (2)
of section 11 of the Act provides that the Land Acquisition Act, 1894 as
amended by the Schedule to the Act would apply to the determination of the
compensation for the acquisition of such land.
Chapter III of the Act deals with the
provisions relating to the making of Town Planning Schemes. Section 18 of the
Act provides that subject to the provisions of the Act or any other law for the
time being in force a local authority may make one or more town planning
schemes for the area within its jurisdiction or any part thereof having regard
to the proposals in the final development plan. Every such Town Planning Scheme
may make provisions for any of the matters such as the laying out or re-laying
out of land, either vacant or already built upon; the filling up or reclamation
of low-laying swamp or unhealthy areas or levelling up of land; laying out of
new streets or roads;
construction, diversion, extention,
alteration, improvement and stopping up of streets, roads and communications;
the 1037 construction, alteration and removal of buildings, bridges and other
structures, the allotment or reservation of land for roads, open spaces,
gardens, recretion grounds, schools, markets, green belts and dairies,
transport facilities and public purposes of all kinds; the preservation of
objects of historical or national interest or natural beauty and of buildings
actually used for religious purposes; the imposition of conditions and
restrictions in regard to the open space to be maintained about buildings etc.
Before preparing a Town Planning Scheme the local authority having jurisdiction
over any such land as is referred to in Section 21 of the Act is required by
section 22 of the Act to declare its intention to make a Town Planning Scheme
in respect of the whole or any part of such land. Within 21 days from the date
of such declaration the local authority is required to publish its declaration
of intention to make a scheme in the prescribed manner. A copy of such
declaration is required to be sent to the State Government.
The local authority is also required to send
a plan to the State Government showing the area which it proposes to include in
the Town Planning Scheme. Under section 23(1) within 12 months from the date of
declaration of intention to make a scheme the local authority shall prepare a
draft scheme. Under the proviso to section 23 of the Act however the State
Government may extend the time to do so by such period specified not exceeding
six months in all. Under sub- section (2) of section 23 of the Act the State
Government or an officer authorised by the State Government in that behalf may
make and publish the draft scheme if the draft scheme is not made and published
by the local authority within the period specified in sub-section (1) of
section 23 of the Act or within the period so extended under the proviso to
sub- section (1) of section 23 of the Act within a further period of 9 months
from the date of the expiry of the extended period. If such declaration is not
made by the State Government within the further period specified in sub- section
(2) of section 23 of the Act, the declaration of intention to make such scheme
shall elapse and until aperiod of three years has elapsed from the date of such
declaration it shall not be competent to the local authority to declare its
intention to make any Town Planning Scheme for the same area or any part of it.
Section 25 of the Act provides that the draft scheme shall contain the
following particulars :
(a) the area, ownership and tenure of each
original plot;
(b) the land allotted or reserved under
sub-clause (a) of clause (2) of section 18 with a general indication 1038 of
the uses to which such land is to be put and the terms and conditions' subject
to which such land is to be put to such uses;
(c) the extent to which it is proposed to
alter the boundaries of original plots;
(d) an estimate of the net cost of the scheme
to be borne by the local authority;
(e) a full description of all details of the
scheme under such sub-clauses of clause (2) of section 18 as may be applicable;
(f) the laying out or re-laying out of land
either vacant or already built upon;
(g) the filling up or reclamation of
low-lying swamp or unhealthy areas or levelling up of land;
and (h) any other prescribed particulars.
Section 26 deals with reconstituted plots. In
the draft scheme the size and shape of every reconstituted plot shall be
determined, so far as may be, to render it suitable for building purposes and
where the plot is already built upon, to ensure that the building; as far as
possible, complies with the provisions of the scheme as regards open spaces.
For the purpose of sub-section (1) of section
26 of the Act the draft scheme may contain the following proposals :- (a) to
form a reconstituted plot by the alteration of the boundaries of an original
plot;
(b) to form a reconstituted plot by the
transfer wholly or partly of the adjoining lands;
(c) to provide with the consent of the owners
that two or more original plots each of which is held in ownership in
severality or in joint ownership shall hereafter, with or without alteration of
boundaries, be held in ownership in common as reconstituted plot;
(d) to allot a plot to any owner dispossessed
of land in furtherance of the scheme and;
1039 (e) to transfer the ownership of a plot
from one person to another.
Section 27 of the Act provides for
representation to be made by persons affected by such scheme. Section 28 of the
Act confers the powers on the State Government to grant sanction to the scheme
and to publish it. Within one month from the date on which the sanction of the
State Government to the draft scheme is published in the Official Gazette the
State Government is required to appoint a Town Planning Officer for the purpose
of implementing the scheme. The duties of the Town Planning Officer are set out
in Section 32 of the Act. It reads thus :
"32(1) In accordance with the prescribed
procedure the Town Planning Officer shall - (i) after notice given by him in
the prescribed manner, define and demarcate the areas allotted to, or reserved,
for a public purpose or purpose of the local authority and the reconstituted
plots ;
(ii) after notice given by him in the
prescribed manner, determine, in the case in which a reconstituted plot is to
be allotted to persons in ownership in common, the shares of such persons;
(iii) fix the difference between the total of
values of the original plots and the total of the values of the plots included
in the final scheme, in accordance with the provisions contained in clause (f)
of sub-section (1) of section 64;
(iv) determine whether the areas used,
allotted or reserved for a public purpose or purpose of the local authority are
beneficial wholly or partly to the owners or residents within the area of the
scheme.
(v) estimate the portion of the sums payable
as compensation on each plot used, allotted or reserved for a public purpose or
purpose of the local authority which is beneficial partly to the owners or
residents within the area of the scheme and partly to the general public, which
shall be included in the costs of the scheme;
(vi) calculate the contribution to be levied
on each plot used, allotted or reserved for a public purpose 1040 or purpose of
the local authority which is beneficial partly to the owners or residents
within the area of the scheme and partly to the general public;
(vii) determine the amount of exemption, if
any, from the payment of the contribution that may be granted in respect of
plots exclusively occupied for the religious or charitable purposes;
(viii) estimate the increment to accrue in respect
of each plot included in the final scheme in accordance with the provisions
contained in section 65;
(ix) calculate the proportion in which the
increment of the plots included in the final scheme shall be liable to
contribution to the costs of the scheme in accordance with the provisions
contained in section 66 (x) calculate the contribution to be levied on each
plot included in the final scheme (xi) determine the amount to be deducted
from, or added to, as the case may be, the contribution leviable from a person
in accordance with the provisions contained in section 67;
(xii) provide for the total or partial
transfer of any right in an original plot to a reconstituted plot or provide
for the extinction of any right in an original plot in accordance with the
provisions contained in section 68;
(xiii) estimate in reference to claims made
before him, after the notice given by him in the prescribed manner the
compensation to be paid to the owner of any property or right injuriously
affected by the making of a town-planning scheme in accordance with the
provisions contained in section 69;
(xiv) draw in the prescribed form the final
scheme in accordance with the draft scheme;
Provided that--- (a) he may make variation
from the draft scheme;
1041 (b) any variation estimated by him to
involve an increase of 10 per centum in the costs of the scheme as is described
in section 64 or rupees one lakh, whichever is lower shall require the sanction
of the State Government :
Provided further that the Town Planning
Officer shall make no substantial variation and without the consent of the
local authority and without hearing any objections which may be raised by the
owners concerned.
(2) If there is any difference of opinion
between the Town Planning Officer and the local authority whether variation
made by the Town Planning Officer is substantial or not, the matter shall be
referred by the local authority to the State Government whose decision shall be
final and conclusive.
(3) The Town Planning Officer appointed for
any draft scheme shall decide all matters referred to in sub-section (1) within
a period of twelve months from the date of his appointment :
Provided that the State Government may from
time to time by order in writing extend the said period by such further period
as may be specified in the order." Section 33 of the Act provides that
excepting in matters arising out of clauses (v), (vi), (viii), (ix), (x) and
(xiii) of sub-section (1) of section 32, every decision of the Town Planning
Officer shall be final and conclusive and binding on all persons. Section 34 of
the Act however provides for appeals being preferred against any decision of
the Town Planning Officer under clauses (v), (vi), (viii) (ix), (x) and (xiii)
of sub-section (1) of section 32 of the Act to the Board of Appeal constituted
under section 35 of the Act. Thereafter a final scheme should be prepared and
submitted to the State Government. The State Government is authorised to accord
sanction to such final scheme under section 51 of the Act. Thus it is seen that
the Town Planning Schemes are to be prepared in two distinct stages by two
different authorities. The first stage constitutes the preparation of draft
town planning scheme by the local authority and the second stage consists of
the scheme to be prepared by the Town Planning Officer. If the State Government
sanctions the final scheme under section 51 of the Act it shall state in the
1042 notification the place at which the final scheme is kept open for the
public inspection and a date which shall not be earlier than one month after
the date of the publication of the notification on which all the liabilities
created by the scheme shall take effect and the final scheme shall come into
force. On and after the date fixed in such notification a town planning scheme
shall have effect as if it had been enacted in the Act. The effect of final
schemes is set out in section 53 of the Act. Section 53 read thus :- "53.
On the day on which the final scheme comes into force,- (a) all lands required
by the local authority shall, unless it is otherwise determined in such scheme,
vest absolutely in the local authority free from all encumbrances;
(b) all rights in the original plots which
have been re-constituted shall determine and the re- constituted plots shall
become subject to the rights settled by the Town Planning Officer."
Section 64 of the Act specifies what sums should be considered as costs of a
town planning scheme. Under the provisions of the statute the costs of the town
planning scheme is to be partly met from the contribution from the plot-owners
and partly from the funds of the local authorities. There are provisions in
section 66 of the Act relating to the contribution towards costs of scheme.
Section 66 reads thus:- "66. (1) The
costs of the scheme shall be met wholly or in part by a contribution to be
levied by the local authority on each plot included in the final scheme
calculated in proportion to the increment which is estimated to accrue in
respect of such plot by the Town Planning Officer :
Provided that - (i) no such contribution
shall exceed half the increment estimated by the Town Planning Officer to
accrue in respect of such plot;
(ii) where a plot is subject to a mortgage
with possession or to a lease the Town Planning Officer 1043 shall determine in
what proportion the mortgages or lessee on the one hand and the mortgagor or
lessor on the other hand shall pay such contribution;
(iii) no such contribution shall be levied on
a plot used, allotted or reserved for a public purpose or purpose of the local
authority which is solely for the benefit of owners or residents within the
area of the scheme; and (iv) the contribution levied on a plot used, allotted
or reserved for a public purpose or purpose of the local authority which is beneficial
partly to the owners or residents within the area of the scheme and partly to
the gneneral public shall be calculated in proportion to the benefit estimated
to accrue to the general public from such use, allotment or reservation.
(2) The owner of each plot included in the
final scheme shall be primarily liable for the payment of the contribution
leviable in respect of such plot.
Section 67 of the Act makes provisions for
certain adjustments and it reads thus:- "67. The amount by which the total
value of the plots included in the final scheme with all the buildings and
works thereon allotted to a person falls short of or exceeds the total value of
the original plots with all the buildings and works thereon of such person
shall be deducted from or added to, as the case may be, the contribution
leviable from such person, each of such plots being estimated at its market
value at the date of the declaration of intention to make a scheme or the date
of a notification under sub-section (1) of section 24 and without reference to
improvements contemplated in the scheme other than improvements due to the
alteration of its boundaries." Where the cost of the scheme does not
exceed half the increment, the cost shall be wholly met by the contribution of the
plot-holders but where it exceeds half the increment, to the extent of half the
increment it shall be met by the contribution from plot-holders and the excess
shall be borne by the local 1044 authority. The rules for levying incremental
contribution are set out on section 66 of the Act, referred to above. It is
seen that the valuation of the land is done in three stages :- (i) Original
value of the land as on the date of the first notification which does not take
into account any of the effects of the improvement scheme that is to follow.
(ii) Semi-final value, that is the value of
the reconstituted plots allotted in their new size and shape but in their
original condition, ignoring the benefit from the scheme.
(ii) Final value, that is the enhanced value
of the reconstituted plots due to the scheme.
The difference between the first two is the
compensation that is due to the owner. The difference between the second and
third is the increment of the value of the reconstituted plots that remain with
the owner on the completion of the scheme and only 50 per cent of the increment
can be recovered from the owner as his increment contribution towards the cost
of the scheme and no more. Any excess incurred will have to be met by the local
authority from its funds.
Section 84 of the Act provides that if at any
time the State Government is of the opinion that any land included in a town
planning scheme is needed for a public purpose other than that for which it is
included in the scheme it may make a declaration to that effect in the Official
Gazette in the manner provided in section 6 of the Land Acquisition Act, 1894
and on the publication of such declaration the Collector shall proceed to take
order for the acquisition of the land and the provisions of the Land Acquisition
Act, 1894, as amended by the Schedule to the Act, as far as may be, shall apply
to the acquisition of the said land. Thus it is seen that there are three
methods of acquisition of land under the Act which are as under:- (i)
acquisition of land provided in section 11 of the Act for development purposes
specified in clauses (b), (c), (d) and (e) of section 7 of the Act for which
compensation is payable under the provisions of the Land Acquisition Act, 1894
as amended by the provisions contained in the Schedule to the Act ;
1045 (ii) transfer of lands that takes place
on the coming into force of the final scheme under section 53 of the Act for
which compensation is payable in accordance with section 67 of the Act;
and (iii) acquisition of land under section
84 of the Act which empowers the State Government to acquire land included in
the town planning scheme at a subsequent stage where again compensation is
payable in accordance with the provisions of the Land Acquisition Act, 1894 as
amended by the Schedule to the Act.
These are broadly the features of the Act.
The first contention urged by the learned
counsel for the appellant is that it being possible in this instant case to
acquire the land of the appellant either under the Land Acquisition Act, 1894
which is more favourable to the owner of the land both from the point of view
of the procedural safeguards and from the point of view of the quantum of
compensation payable for the land which includes solatium payable under section
23(2) thereof than the Act which does not provide for appeals against many of
the orders passed by the Town Planning Officer under section 32 of the Act and
does not authorise payment of solatium in addition to the market value of the
land, the acquisition of the land under the Town Planning Scheme under section
53 of the Act is discriminatory and violative of Article 14 of the Constitution
which guarantees equality before law and equal protection of the laws. This
question is no longer res integra. In The Zandu Pharmaceutical Works Ltd. v.
G.J.
Desai and Ors., Civil Appeal No. 1034 of 1967
decided on 28th August, 1969, dealing with the very provisions of the Act this
Court observed thus :
"When the Town Planning Scheme comes
into operation the land needed by a local authority vests by virtue of s.53(a)
and that vesting for purposes of the guarantee under Art. 31(2) is deemed
compulsory acquisition for a public purpose. To lands which are subject to the
scheme, the provisions of ss.53 and 67 apply, and the compensation is determined
only in the manner prescribed by the Act. There are therefore two separate
provisions one for acquisition by the State Government, and the other in which
the statutory vesting of land operates as acquisition for the 1046 purpose of
town planning by the local authority.
The State Government can acquire the land
under the Land Acquisition Act, and the local authority only under the Bombay
Town Planning Act. There is no option to the local authority to resort to one
or the other of the alternative methods which result in acquisition. Hence the
provisions of ss.53 and 67 are not invalid on the ground that they deny equal
protection of the laws or equality before the laws." In order to
appreciate the contentions of the appellant it is necessary to look at the
object of the legislation in question as a whole. The object of the Act is not
just acquiring a bit of land here or a bit of land there for some public
purpose. It consists of several activities which have as their ultimate object
the orderly development of an urban area. It envisages the preparation of a
development plan, allocation of land for various private and public uses,
preparation of a Town Planning Scheme and making provisions for future
development of the area in question. The various aspects of a Town Planning
Scheme have already been set out.
On the final Town Planning Scheme coming into
force under section 53 of the Act there is an automatic vesting of all lands
required by the local authority, unless otherwise provided, in the local authority.
It is not a case where the provisions of the Land Acquisition Act, 1894 have to
be set in motion either by the Collector or by the Government.
The divesting of title takes place
statutorily. Section 71 of the Act provides for payment of compensation to the
owner of an original plot who is not provided with a plot in the final scheme,
or if the contribution to be levied from him under section 66 of the Act is
less than the total amount to be deducted therefrom under any of the provisions
of the Act. Section 73 of the Act provides for payment due to be made to any
person by the local authority by adjustment of account as provided in the Act.
Section 32 of the Act lays down the various duties and powers of the Town
Planning Officer which he has to discharge and exercise for the benefit of the
whole community. All his functions are parts of the social and economic
planning undertaken and executed for the benefit of the community at large and
they cannot be done in isolation. When such functions happen to be integral
parts of a single plan which in this case happens to be an urban development
plan, they have to be viewed in their totality and not as individual acts
directed against a single person or a few persons. It is quite possible that
when 1047 statutory provisions are made for that purpose, there would be some
difference between their impact on rights of individuals at one stage and their
impact at another stage.
As we have seen in this very Act there are
three types of taking over of lands- first under section 11, secondly under
section 53 and thirdly under section 84 of the Act, each being a part of a
single scheme but each one having a specific object and public purpose to be
achieved. While as regards the determination of compensation it may be possible
to apply the provisions of the Land Acquisition Act, 1894 with some
modification as provided in the Schedule to the Act in the case of lands
acquired either under section 11 or under section 84 of the Act, in the case of
lands which are needed for the local authority under the Town Planning Scheme
which authorises allotment of reconstituted plots to persons from whom original
plots are taken, it is difficult to apply the provisions of the Land
Acquisition Act, 1894.
The provisions of section 32 and the other
financial provisions of the Act provide for the determination of the cost of
the scheme, the development charges to be levied and contribution to be made by
the local authority etc. It is only after all that exercise is done the money
will be paid to or demanded from the owners of the original plots depending on
the circumstances governing each case. If in the above context the Act has made
special provisions under section 67 to 71 of the Act for determining
compensation payable to the owners of original plots who do not get the
reconstituted plots it cannot be said that there has been any violation of
Article 14 of the Constitution. It is seen that even there the market value of
the land taken is not lost sight of. The effect of the provisions in sections
67 to 71 of the Act has been explained by this Court in Maneklal Chhotalal
& Ors. v. M.G. Makwana & Ors., [1967] 3 S.C.R. 65 and in State of
Gujarat v. Shri Shantilal Mangaldas & Ors. (supra).
Justice Shah (as he then was) speaking on
behalf of the Constitution Bench of this Court in State of Gujarat v. Shri
Shantilal Mangaldas & Ors. (supra) while dealing with the very Act the very
Act observed at page 357 thus ;- "The object of s.67 is to set out the
method of adjustment of contribution against compensation receivable by an
owner of land. By that section the difference between the total value of the
plots included in the final scheme with all the buildings and works thereon
allotted to a person and the total value of the original plot with all the
buildings and works thereon must be estimated on the basis of the 1048 market
value at the date of the declaration of intention to make a scheme, and the
difference between the two must be adjusted towards contribution payable by the
owner of the plot included in the scheme. In other words, s.67 provides that
the difference between the market value of the plot with all the buildings and
works thereon at the date of the declaration of intention to make a scheme and
the market value of the plot as reconstituted on the same date and without
reference to the improvements contemplated in the scheme is to be the
compensation due to the owner. Section 71 which is a corollary to s.67
provides, inter alia, that if the owner of the original land is not allotted a
plot at all, he shall be paid the value of the original plot at the date of the
declaration of intention to make a scheme".
Proceeding further the learned Judge said on
the question whether the Act violated clause (2) of Article 31 of the
Constitution at pages 357 and 358 thus :- "The question that falls then to
be considered is whether the scheme of the Act which provides for adjustment of
the market value of land at the date of the declaration of intention of making
a scheme against market value of the land which goes to form the reconstituted
plot, if any, specifies a principle for determination of compensation to be
given within the meaning of Art. 31(2). Two arguments were urged on behalf of
the first respondent - (1) that the Act specifies no principles on which the
compensation is to be determined and given; and (2) that the scheme for
recompense for loss is not a scheme providing for compensation. It is true that
under the Act the market value of the land at the date of declaration of
intention to make a scheme determines the amount to be adjusted, and that is
the guiding rule in respect of all lands covered by the scheme. The High Court
was, in our judgment, right in holding that enactment of a rule determining
payment or adjustment of price of land of which the owner was deprived by the
scheme estimated on the market value on the date of declaration of the
intention to make a scheme amounted to specification or a principle of
compensation within the meaning of Art. 31(2).
Specification of principles 1049 means laying
down general guiding rules applicable to all persons or transanctions 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 the Act. That is a specification of
principle.
Compensation determined on the basis of
market value prevailing on a date anterior to the date of extinction of
interest is still determined on a principle specified. Whether an owner of land
is given a reconstituted plot or not, the rule for determining what is to be
given as recompense remains the same. It is a principle applicable to all cases
in which by virtue of the operation of the Town Planning Act a person is
deprived of his land whether in whole or in part." Rejecting the second
branch of the argument that the provision for giving the value of land not on
the date of extinction of interest of the owner, but on the basis of the value
prevailing at the date of the declaration of the intention to make a scheme was
not a provision for payment of compensation as stated in Article 31(2) of the
Constitution Shah, J. observed at pages 365 and 366 thus:- "Reverting to
the amendment made in cl.(2) of Art.
31 by the Constitution (Fourth Amendment)
Act, 1955, it is clear that adequacy of compensation fixed by the Legislature
or awarded according to the principles specified by the Legislature for
determination is not justiciable. It clearly follows from the terms of Art.
31(2) as amended that the amount of compensation payable, if fixed by the
Legislature, is not justiciable, because the challenge in such a case apart
from a plea of abuse of Legislative power, would be only a challenge to the
adequacy of compensation. If compensation fixed by the Legislature - and by the
use of the expression "compensation" we mean what the Legislature
justly regards as proper and fair recompense for compulsory expropriation of
property and not something which by abuse of legislative power though called
compensation is not a recompense at all or is something illusory - is not
justiciable, on the plea that it is not a just equivalent of the property
compulsorily acquired, is it open to the Courts to enter upon an enquiry
whether the principles which are specified by the Legislature for determining
compen- 1050 sation do not award to the expropriated owner a just equivalent ?
In our view, such an enquiry is not open to the Courts under the statutes
enacted after the amendments made in the Constitution by the Constitution
(Fourth Amendment) Act. If the quantum of compensation fixed by the Legislature
is not liable to be canvassed before the Court on the ground that it is not a
just equivalent, the principles specified for determination of compensation
will also not be open to challenge on the plea that the compensation determined
by the application of those principles is not a just equivalent. The right
declared by the Constitution guarantees that compensation shall be given before
a person is compulsorily expropriated of his property for a public purpose.
What is fixed as compensation by statute, or by the application of principles
specified for determination of compensation is guaranteed: it does not mean
however that something fixed or determined by the application of specified
principles which is illusory or can in no sense be regarded as compensation
must be upheld by the Courts for, to do so, would be to grant a charter of
arbitrariness, and permit a device to defeat the constitutional guarantee. But
compensation fixed or determined on principles specified by the Legislature can
not be permitted to be challenged on the somewhat indefinite plea that it is
not a just or fair equivalent. Principles may be challenged on the ground that
they are irrelevant to the determination of compensation, but not on the plea
that what is awarded as a result of the application of those principles is not
just or fair compensation. A challenge to a statute that the principles
specified by it do not award a just equivalent will be in clear violation of
the constitutional declaration that inadequacy of compensation provided is not
justiciable." The learned Judge also rejected the contention based on
Article 14 of the Constitution. Justice Shah observed at pages 371 and 372 thus
:- "One more contention which was apparently not raised on behalf of the
first respondent before the High Court may be briefly referred to. Counsel
contends that ss.53 and 67 in any event infringe Art.14 of the 1051
Constitution and were on that account void.
Counsel relies principally upon that part of
the judgment in P. Vajravelu Mudaliar's case [1965] 1 S.C.R. 614, which deals
with the infringement of the equality clause of the Constitution by the
impugned Madras Act. Counsel submit that it is always open to the State
Government to acquire lands for a public purpose of a local authority and after
acquiring the lands to vest them in the local authority. If that be done,
compensation will be payable under the Land Acquisition Act, 1894, but says
counsel, when land is acquired for a public purpose of a local authority under
the provision of the Bombay Town Planning Act the compensation which is payable
is determine at a rate prevailing many years before the date on which the
notification under s.4 of the Land Acquisition Act is issued. The argument is
based on no solid foundation. The method of determining compensation in respect
of lands which are subject to the Town Planning Schemes is prescribed in the
Town Planning Act. There is no option under that act to acquire the land either
under the Land Acquisition Act or under the Town Planning Act.
Once the draft town planning scheme is
sanction ed, the land becomes subject to the provisions of the Town Planning
Act, and the final town planning scheme being sanctioned, by statutory
operation the title of the various owners is readjusted and the lands needed
for a public purpose vest in the local authority. Land required for any of the
purpose of a Town Planning Scheme cannot be acquired otherwise than under the
Act, for it is settled rule of interpretation of statues that when power is
given under a statute to do a certain thing in a certain way the thing must be
done in that way or not that all: Taylor v.
Taylor, (1875) 1 Ch.D. 426. Again it cannot
be said that because it is possible for the State, if so minded, to acquire
lands for a public purpose of a local authority, the statutory effect given to
a town-planning scheme results in discrimination between persons similarly
circumstanced." Thus it is seen that all the arguments based on Article 14
and Article 31(2) of the Constitution against the Act were of repelled by the
Constitution Bench in the State of Guajart v. Shri Shntilal Mangaldas Ors.
(supra). With great respect, we approve of the decision of the Court in this
case.
1052 But the learned counsel for the
appellant however drew our attention to certain subsequent decisions of this
Court to persuade us to differ from the above view. First he referred us to the
decision of this Court in R.C. Cooper v.
Union of India, [1970] 3 S.C.R. 530 which is
popularly known as the Bank Nationlisation Case, in which again the majority
judgment was written by Shah, J. Then the learned counsel referred us to the
decision in Kesvaoanda Bharati v. State of Kerala, [1973] Suppl. S.C.R. 1 and
to the decision in State of Karnataka & Anr. v. Ranganatha Redy & Anr.,
[1978] 1 S.C.R. 641 in support of his plea that the decision in Shantilal
Mangaldas's case (supra) stood overruled. We have gone through these decisions
carefully. Before embarking upon the examination of these decisions we should
bear in mind that what is under consideration is no a statute of a legislation
but a decision of the Court. A decision ordinarily is a decision on the case
before the court while the principle underlying the decision would be binding
as a precedent in a case which comes up for decision subsequently. Hence while
applying the decision to a later case, the Court which is dealing with it
should carefully try to ascertain the true principle laid down by the previous
decision. A decision often takes its colour from the questions involved in the
case in which it is rendered.
The scope and authority of a precedent should
never be expanded unnecessarily beyond the needs of a given situation. We have
earlier seen what Justice Shah has laid down in Shantilal Mangaldas's case
(supra). The very same Judge delivered the majority judgment in the Bank
Nationalisation Case (supra) in which he observed at pages 303 & 304 thus
:- "There was apparently no dispute that Article 31(2) before and after it
was amended guaranteed a right to compensation for compulsory acquisition of
property and that by giving to the owner, for compulsory acquisition of his
property, compensation which was illusory, or determined by the application of
principles which were irrelevant, the constitutional guarantee of compensation
was not complied with. There was difference of opinion on the matter between
the decisions in P. Vajravelu Mudaliar's case (supra) and Shantilal Mangaldas's
case (supra). In the former case it was observed that the constitutional
guarantee was satisfied only if a just equivalent of the property was given to
the owner : in the latter case it was held that "compensation , being
itself incapable of any precise determination, no definite connotation 1053
could be attached thereto by calling it just equivalent or full indemnification
, and under Acts enacted after the amendment of Article 31(2) it is not open to
the Court to call in question the law providing for compensation on the ground
that it is inadequate, whether the amount of compensation is fixed by the law
or is to be determined according to principles specified therein. It was
observed in the judgment in Shantilal Mangalda's case (supra) at p.651 :
'Whatever may have been the meaning of the
expression compensation" under the unamended Article 31(2), when the
Parliament has expressly encated under the amended clause that 'no such law
shall be called in question in any court on the ground that the compensation
provided by that law is not adequate', it was intended clearly to exclude from
the jurisdiction of the court an enquiry that which is fixed or determined by
the application of the principles specified as compensation does not award to
the owner a just equivalent of what he is deprived.
That after discussing the decision in P.
Vajravelu Mudaliar's case Shah, J. observed thus :- "The compensation
provided by the Madras Act, according to the principles specified was not the
full market vale at the date of acquisition. It did not amount to full indmnification
of the owner : the Court still held that the law did not offend the guarantee
under article 31(2) as amended, because the objection was only as to be
adequacy of compensation. In Shantilal Mangldas's case (supra), the Court held
that (after) the constitution (Fourth Amendment) Act, Article 31(2) guarantees
a right to receive compensation for loss of property compulsorily acquired, but
compensation does not mean a just equivalent of the property. If compensation
is provided by law to be paid and the compensation is not a illusory or is not
determinable by the application of irrelevant principles, the law is not open
to challenge on the ground that compensation fixed or determine to be paid is
inadequate.
Both the lines of thought which converge in
the ultimate results, support the view that the principles 1054 specified by
the law for determination of compensation is behind the pale of challenge, if
it is relevant to the determination of compensation and is a recognised
principle applicable in the determination of compensation for property
compulsorily acquired and the principle is appropriate in determining the value
of the class of property sought to be acquired. On the application of the view
expressed in P. Vajravelu Mudliars's case (supra) or in Shantilal Mangaldas's
case (supra), the Act, in our judgment, is liable to be struck down as it face
to provide to the expropriated banks compensation determined according to
relevant principles.
It is seen that Shah, J. relied on the
decision in Shantilal Mangalda's case (supra) also in deciding the Bank
Nationalisation Case. The learned Judge does not say that the earlier decision
rendered by him in Shantilal Mangadas's case stood overruled. In Kesvananda
Bharati's case (supra) no doubt Shantilal Mangaldas's case was discussed and
considered in the serveral judgments delivered in that case.
But it is seen that the said decision was not
overruled. It is true that in some of the judgments Kesvananda Bharati's case
(supra) there are observations to the effect that the case of Shantilal
Mangaldas (supra) was virtually overruled or in substance overruled in the Bank
Nationalisation case.
(supra). Some of the observations are:
"In State of Gujarat v. Shantilal
Mangaladas and Ors. [1969] 3 S.C.R. 341, the decision in Metal Corporation of
India [1967] 1 S.C.R. 255 was overruled which itself was virtually overruled by
R.C. Cooper v. Union of India, [1970] 3 S.C.R. 530 (Per Shelat and Grover, J.
P.282).
"In the Bank Nationalisation case the
majority decision virtually overruled the decision in Guajart v. Shantilal.
(Per Methew J. P.845).
"But soon thereafter came the majority
decision in R.C. Cooper v. Union of India, [1970] 3 S.C.R.
530. Cooper in substance overruled Shantilal
Mangaldas and restored the old position . (Per Dwivedi, J. P.929).
But Hegde and Mukherjee, JJ. observed at page
336 thus :
"Then came the Bank Nationalisation
case. The majority judgment in that case was delivered by Shah, J. (as he 1055
then was). In that judgment he referred somewhat extensively to the decision in
Shantilal Mangalda's case and other cases rendered by this Court. He did not
propose to deviate from the rule laid down in Shantilal case. (Per Hegde &
Mukherjee, JJ P.336) In the State of Karnataka v. Ranganatha Reddy (supra) also
there are observations made by Untwalia J. to the following effect at page 652
:- "Then came the decision in State of Gujarat v.
Shri Shantilal Mangaldas Ors. where Shah, J.,
as he then was in his leading judgment to which was appended a short concurring
note by Hidayatullah C.J., made a conspicuous departure from the views
expressed in Vajravelu's case and the case of the Metal Corporation (supra) and
the said decisions were overruled. Thereafter came the decision of 11 Judges of
this court the leading judgment being of Shah, J. on behalf of himself and 9
others in what is known as the Bank Nationalisation case in Rustom Cavasjee
Cooper v. Union of India. Although in terms the decision of this Court in the
case of Shantilal Mangaldas (supra) was merely explained, in substance it was
over-ruled.
Expressions like 'virtually overruled' or 'in
substance overruled' are expressions of inexactitude. In such circumstances, it
is the duty of a Constitution Bench of this Court which has to consider the effect
of the precedent in question to read it over again and to form its own opinion
instead of wholly relying upon the gloss placed on it in some other decisions.
It is significant that none of the learned Judges was decided the subsequent
cases has held that the Act had become void on account of any constitutional
informity. They allowed the Act to remain in force and the State Governments
concerned have continued to implement the provisions of the Act. What cannot be
overlooked is that the decision in Shantilal Mangaldas's case (supra) was
quoted in extenso with approval and relied on by the very same judge while
deciding the Bank Nationalistion case (supra). He may have arrived at an
incorrect or contradictory conclusion in striking down the Bank Nationalisation
Act. The result achieved by him in the subsequent case may be wholly wrong but
it cannot have any effect of the efficacy of the decision in Shantilal
Mangaldas case (supra). An inappropriate purpose for which a precedent is used
at a later date does not take away its binding character as a precedent. In
1056 such cases there is good reason to disregard the later decision. Such
occasions in judicial history are not rare.
The history of the law relating to the right
of labourers to strike in a factory is one such instance. Temperton v.
Russell, [1893] 1 Q.B. 715 (C.A.), Allen v.
Flood [1898] A.C. 1, Quinn v. Leathem, [1901] A.C. 495 and other cases
belonging to that group show the ambivalence in the attitudes of courts with
regard to certain matters which vitally affect society. As long as the Act,
i.e., the Bombay Town Planning Act, 1954 which was upheld by this Court in
Shantilal Mangaldas case has not been struck down by this Court in any
subsequent decision it would be wholly unjust to declare it inferentially as
having been declared as void in a subsequent decision which depends mostly on
the reasons in Shantilal Mangaldas's case for its survival. With great respect
to the learned Judges who decided Kesavananda Bharati's case and the case State
of Karnataka v. Ranganatha Reddy, we are not prepared to hold that the decision
in Shantilal Mangaldas's case is overruled by the Bank Nationalisation case
which has only explained Shantilal Mangaldas's case but does not overrule it
particularly after the nation has first expressed itself in favour of the 25th
(Constitution) Amendment and then decided to delete Art.31 altogether from the
Constitution. We cannot upset the Constitution Bench decision in Shantilal
Mangaldas's case when no subsequent Constitution Bench has expressly overruled
it. We do not therefore find any substance in the contention that the Act
violated Article 31(2) of the Constitution as it stood at the time when the Act
was enacted or at any time thereafter.
Then it is contended that the Act which does
not provide for an appeal from some of the decision of the Town Planning
Officer taken under section 32 of the Act, while it has provided appeal to the
Board of Appeal against some other decisions taken under the very same section
was discriminatory. There is no rule that every decision of every officer under
a statute should be made appealable and if it is not so made appealable the
statute should be struck down. It may be salutary if an appeal is provided
against decisions on questions which are of great importance either to private
parties or to the members of the general public, but ordinarily on such matters
the Legislature is the best judge. Unless the Court finds that the absence of
an appeal is likely to make the whole procedure oppressive and arbitrary, the
Court does not condemn it as unconstitutional. On going through the provisions
of section 32 and other cognate provisions of the Act and considering the
status of the officer who is appointed as a Town Planning Officer, we are of the
view 1057 that it is not possible to hold that section 32 of the Act is a
provision which confers uncanalised and arbitrary power on the Town Planning
Officer merely because of the denial of the right of appeal in some cases.
Dealing with a similar contention advanced against section 54 of the Act and
Rule 27 of the Bombay Town Planning Rules, 1955 framed under the Act which
authorised summary eviction of the occupants of land vesting in the local
authority under section 53 of the Act, this Court has held in M/s Babubbai
& Co. Ors. v. State of Gujarat, [1985] 2 S.C.C. 732, that the absence of a
corrective machinery by way of an appeal does not always make a provision
unreasonable. We agree with the above view.
In any event the remedy under Article 226 of
the Constitution of India is avaliable to a person aggrieved by such orders.
We do not also find any substance in the
allied contention that if the Land Acquisition Act, 1894 had been applied, the
appellant would have had the benefit of the machinery provided under section 18
and 54 of the Land Acquisition Act, 1894 and since it is not available under
the procedure prescribed by the Act is the case of lands taken under section 53
thereof the Act is discriminatory. If the Land Acquisition Act, 1894 had been
applicable, then all the procedural and substantive provisions would have no
doubt become applicable. We have already held that the Act is not bad for not
extending the procedure of the Land Acquisition Act, 1894 to the proceedings
under the Town Planning Scheme. For the reasons already given above in this
judgment we do not find it possible to strike down the scheme on this ground.
It was next contended that the denial of the
solatium of 15 per cent (or 30 per cent, as the law now is) of the market value
of the land in addition to the compensation payable for lands taken by the
local authority for purposes of the Scheme makes the Act discriminatory.
Reliance is placed on the decision of this Court in Nagpur Improvement Trust
and Anr. v. Vithal Rao Ors., [1973] 3 S.C.R. 39, in which it is held that the
different terms of compensation for land acquired under two Acts would be
discriminatory. In that case the petitioner was a tenant of some field in a
village. He had applied to the Agricultural Land Tribunal under a local Act for
fixing the purchase prise of the said field. The land in question however was
acquired under the Nagpur Improvement Trust Act, 1936. Aggrieved by the said
acquisition he filed a Writ Petition in the High Court of Bombay, Nagpur Bench,
challenging the validity of the Nagpur Improvement Trust Act, 1936 on various
grounds one of the grounds being that the said 1058 Act empowered the
acquisition of the land at prices lower than those payable under the Land
Acquisition Act, 1894. He urged that the denial of the solatium at 15 per cent
of the market value was discriminatory. The High Court held that as the
acquisition was by the State in all cases where the property was required to be
acquired for the purposes of a scheme framed by the Trust and such being the
position, it was not open to the State to acquire any property under the
provisions of the Land Acquisition Act, 1894 as amended by the Improvement
Trust Act without paying the solatium also.
It was therefore held by the High Court that
the paragraphs 10(2) and 10(3) insofar as they added a new clause 3(a) to
section 23 and a proviso to subs-section (2) of section 23 of the Land
Acquisition Act, 1894 were ultra vires as violating the guarantee of Article 14
of the Constitution.
On appeal the judgment of the High Court was
affirmed by this Court by the above decision. The provision under consideration
in the above decision corresponds to section 11 and to section 84 of the Act,
which we are now considering. Section 59 of the Nagpur Improvement Trust Act,
1936 provided that the Trust might, with the previous sanction of the State
Government acquire land under the provisions of the Land Acquisition Act, 1894
as modified by the provisions of the said Act for carrying out any of the
purposes of the said Act. But the provisions which are questioned before us are
of a different pattern altogether.
They deal with the preparation of a scheme
for the development of the land. On the final scheme coming into force the
lands affected by the scheme which are needed for the local authority for
purposes of the scheme automatically vest in the local authority. There is no
need to set in motion the provisions of the Land Acquisition Act, 1894 either
as it is or as modified in the case of acquisition under section 11 or section
84 of the Act. Then the Town Planning Officer is authorised to determine
whether any reconstituted plot can be given to a person whose land is affected
by the scheme. Under section 51(3) of the Act the final scheme as sanctioned by
the government has the same effect as if it were enacted in the Act. The scheme
has to be read as part of the Act. Under Section 53 of the Act all rights of
the private owners in the original plots would determine and certain
consequential rights in favour of the owners would arise therefrom. If in the
scheme, reconstituted or final plots are allotted to them they become owners of
such final plots subject to the rights settled by the Town Planning Officer in
the final Scheme. In some cases the original plot of an owner might completely
be allotted to the local authority for a public Purpose. Such private owner may
be paid compensation or a reconstituted plot in some other place. It may be a
smaller or a bigger plot. It may be that in some cases it 1059 may not be
possible to allot a final plot at all. Sections 67 to 71 of the Act provide for
certain financial adjustments regarding payment of money to the local authority
or to the owners of the original plots. The development and planning carried
out under the Act is primarily for the benefit of public. The local authority
is under an obligation to function according to the Act. The local authority
has to bear a part of the expenses of development. It is in one sense a package
deal. The proceedings relating to the scheme are not like acquisition
proceedings under the Land Acquisition Act, 1894. Nor are the provisions of the
Land Acquisition Act, 1894 made applicable either without or with modifications
as in the case of the Nagpur Improvement Trust Act, 1936. We do not understand
the decision in Nagpur Improvement Trust's case (supra) as laying down
generally that wherever land is taken away by the Government under a separate
statute compensation should be paid under the Land Acquisition Act, 1894 only
and if there is any difference between the compensation payable under the Land
Acquisition Act, 1894 and the Compensation payable under the statute concerned
the acquisition under the statute would be discriminatory. That case is
distinguishable from the present case. In State of Kerala and Ors. v. T.N.
Peter & Anr., [1980] 3 S.C.R. 290, also section 34 of the Cochin Town
Planning Act which came up for consideration was of the same pattern as the
provisions in the Nagpur Improvement Trust Act, 1936 and for that reason the
Court followed the decision in the Nagpur Improvement Trust s case (supra). But
in that decision itself the Court observed at pages 302 & 303 thus :-
"We are not to be understood to mean that the rate of compensation may not
vary or must be uniform in all cases. We need not investigate this question
further as it does not arise here although we are clear in our mind that under
given circumstances differentiation even in the scale of compensation may
comfortably comfort with Article 14. No such circumstances are present here nor
pressed." The decision in P.C. Goswami v. Collector of Darrange, A.I.R.
1982 S.C. 1214, also belongs to the category of State of Kerala & Ors. v.
T.N. Peter and Anr., (supra) both of which are again distinguishable from the
present one.
It cannot also be said as a rule that the
State which has got to supply and maintain large public services at great cost
should always pay in addition to a reasonable compensation some 1060 amount by
way of solatium. The interest of the public is equally important. In any event
it is not shown that the compensation payable in this case is illusory and
unreal.
We do not find any constitutional infirmity
in the provisions under challenge before us. There is no ground to declare the
Act which has been upheld in Shantilal Mangaldas's case (supra) about 17 years
ago as unconstitutional now and to unsettle all settled transactions drawing
inspiration from certain vague observations made in some subsequent decisions.
In the result, this appeal fails and it is
dismissed but without any order as to costs.
S.R. Appeal dismissed.
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