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TMI Blog1985 (12) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 967 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 Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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; (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ; (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id 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 compensat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hah, 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 Manga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end 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 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 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovide 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovement Trust Act, 1936 on various grounds one of the grounds being that the said 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. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 mu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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