PETITIONER:
PRAKASH AMICHAND SHAH
Vs.
RESPONDENT:
STATE OF GUJARAT & ORS.
DATE OF JUDGMENT20/12/1985
BENCH:
VENKATARAMIAH, E.S. (J)
BENCH:
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 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 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.
JUDGMENT:
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.
1061
PRAKASH AMICHAND SHAH
Vs.
RESPONDENT:
STATE OF GUJARAT & ORS.
DATE OF JUDGMENT20/12/1985
BENCH:
VENKATARAMIAH, E.S. (J)
BENCH:
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 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 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.
JUDGMENT:
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
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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
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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
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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
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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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