Report No. 10

23. Constitutional limitations on the exercise of the power.-

The exercise of this power is subject to the limitations laid down by Article 31 of the Constitution as amended. Under this Article, there are two limitations imposed upon the exercise of the power. First, the compulsory acquisition or requisitioning of the property should be for a public purpose; secondly, the law enacted in that behalf should provide for compensation for the properties so acquired or requisitioned and should either fix the amount of the compensation or specify the principles on which and the manner in which the compensation is to be determined and given. No such law, however, can be called in question in any court on the ground that the compensation provided by that law is not adequate. If, therefore, the law complies with these requirements, the compensation will not be justiciable. The contrary view laid down by the Supreme Court in the State of West Bengal v. Bella Banerjee, AIR 1954 SC 170, has been superseded by the amendment of the Constitution.

24. The determination that a purpose is a 'public purpose' is no longer a matter for the subjective satisfaction of the appropriate Government. The existence of a public purpose is a necessary condition to the acquisition or requisitioning of property and that the existence of such a purpose must be established objectively has been settled by the decision of the Supreme Court in Bella Banerjee's, AIR 1954 SC 170, case and is still good law.

25. Sub-clause 5 (a) of Article 31, however, creates an exception in that it saves the provisions of any existing law other than a law to which the provisions of clause 6 of that Article apply. If the Land Acquisition Act, 1894 and other existing laws are allowed to continue in force without alteration, the provision in these Acts to the effect that the declaration by the Government that the land was required for a public purpose shall be conclusive evidence cannot be challenged.

The position would, however, be different if a consolidating Act is now enacted. The decision of the Government that a land is needed for a public purpose will not have the finality which it would have had, if Act I of 1894 and the other acts were left untouched. But that need not deter us from consolidating the law. The expression 'public purpose' is not restricted in its meaning by any definition and has been held to be of very wide import. We have accordingly proposed an inclusive definition of 'public purpose' keeping in view the principles laid down by the decisions of courts.