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Issues Involved:
1. Validity of Sections 53 and 67 of the Bombay Town Planning Act, 1955. 2. Adequacy of compensation under Article 31(2) of the Constitution. 3. Relevance of Article 31(5)(b)(ii) concerning public health and sanitation. 4. Justiciability of compensation principles under Article 31(2). 5. Alleged violation of Article 14 (Equality before the law). Issue-Wise Detailed Analysis: 1. Validity of Sections 53 and 67 of the Bombay Town Planning Act, 1955: The High Court of Gujarat declared Sections 53 and 67 of the Bombay Town Planning Act, 1955, ultra vires, as they authorized the local authority to acquire lands under a town-planning scheme, violating Article 31(2) of the Constitution. The Supreme Court, however, found that the Act specified principles for determining compensation, which were neither irrelevant nor illusory. Therefore, the Act did not infringe Article 31(2), and the sections were valid. 2. Adequacy of Compensation under Article 31(2) of the Constitution: The High Court held that the compensation provided under the Act was not a just equivalent of the property expropriated, as it was based on the market value at the date of the declaration of intention to make a scheme, not the date of acquisition. The Supreme Court clarified that Article 31(2) as amended by the Constitution (Fourth Amendment) Act, 1955, precludes judicial review of the adequacy of compensation. The principles specified for determining compensation under the Act were deemed sufficient, and the Act was not invalid on this ground. 3. Relevance of Article 31(5)(b)(ii) Concerning Public Health and Sanitation: The State argued that the Act fell under Article 31(5)(b)(ii) as it promoted public health and sanitation, thus exempt from Article 31(2). The Supreme Court rejected this contention, referencing the precedent in Deputy Commissioner & Collector, Kamrup v. Durga Nath Sharma, which held that laws for permanent acquisition of property do not fall under the exception in Article 31(5)(b)(ii). 4. Justiciability of Compensation Principles under Article 31(2): The Supreme Court emphasized that post the Fourth Amendment, the adequacy of compensation is not justiciable. The principles specified in the Act for determining compensation were valid and not arbitrary. The Court overruled the decision in Union of India v. Metal Corporation of India Ltd., which had previously held that the principles laid down for compensation were irrelevant. 5. Alleged Violation of Article 14 (Equality Before the Law): The respondent contended that Sections 53 and 67 violated Article 14, as they allowed different compensation methods for land acquired under the Town Planning Act and the Land Acquisition Act. The Supreme Court found no merit in this argument, noting that the Town Planning Act provided a specific method for acquiring land for town-planning purposes, and there was no arbitrary choice between different methods of acquisition. The provisions were not discriminatory and did not violate Article 14. Conclusion: The Supreme Court allowed the appeal, setting aside the High Court's order declaring Sections 53 and 67 ultra vires. The case was remanded to the High Court for further consideration of other contentions. The Supreme Court clarified that the principles for determining compensation under the Act were valid and not subject to judicial review for adequacy. The Act did not violate Articles 31(2) or 14 of the Constitution.
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