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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 the principles for determining compensation. 4. Alleged violation of Article 14 of the Constitution. 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 insofar as they authorize the local authority to acquire lands under a town-planning scheme. The Supreme Court analyzed the legislative intent behind the Act, which aimed at planned and controlled development in urban areas to provide better living conditions. The Court noted that the Act was modeled on the Bombay Town Planning Act, 1915, with significant improvements. Sections 53 and 67 were designed to ensure that lands required by the local authority for public purposes vest absolutely in the local authority free from all encumbrances, and to make financial adjustments for reconstituted plots. 2. Adequacy of Compensation under Article 31(2) of the Constitution The High Court held that the Act violated Article 31(2) because the compensation was not a "just equivalent" of the property acquired, as it was based on market value at the date of the declaration of intention to make a scheme, not at the date of acquisition. The Supreme Court, however, clarified that after the Fourth Amendment of the Constitution, the adequacy of compensation could not be questioned. The Court emphasized that compensation need not be in terms of money alone and could include other forms of recompense. The Act specified principles for determining compensation, which were deemed sufficient under Article 31(2). 3. Relevance of the Principles for Determining Compensation The Supreme Court examined whether the principles laid down in Sections 67 and 71 of the Act were relevant for determining compensation. The Court found that the principles were indeed relevant and not arbitrary. The Act provided a method for adjusting the market value of the original plot against the reconstituted plot, ensuring that the owner received fair compensation. The Court overruled the previous decision in the Metal Corporation case, which had held that the principles were irrelevant. 4. Alleged Violation of Article 14 of the Constitution The respondent contended that Sections 53 and 67 violated Article 14 because the State could acquire land under the Land Acquisition Act, 1894, or the Town Planning Act, leading to different compensation outcomes. The Supreme Court rejected this argument, noting that the Town Planning Act provided a specific method for acquiring land for town-planning purposes, distinct from the Land Acquisition Act. There was no option for the local authority to choose between the two Acts, thereby eliminating any potential for arbitrary discrimination. Conclusion The Supreme Court set aside the High Court's order declaring Sections 53 and 67 ultra vires and remanded the case for further consideration of other contentions raised by the respondent. The appeal was allowed, and the order of costs passed by the High Court was set aside, with no order as to costs in the Supreme Court.
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