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TMI Blog2022 (8) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... P. (C) No.18942 of 2013 before the High Court of Karnataka at Bangalore for short, "the High Court". 2. The challenge to the stated notification was twofold. The first is that the impugned notification was issued without adequately considering the objections taken by the writ petitioners and in excess of the power vested in the authority. The second was about the lapsing of the acquisition which was in furtherance of the show cause notice issued under the 1973 Act on 14.10.1982. It was the case of the writ petitioners that by efflux of time, the stated show cause notice (preliminary notification) had worked out and no acquisition in furtherance thereof after 23 years could be permitted in law. As regards the validity of Section 20 of the 1973 Act, the challenge was essentially about the method of determining payment predicated therein to pay amount at the rate of three hundred times the property tax for acquiring the land under Section 17 of the 1973 Act and not fair market value of the property. Whereas, the amount offered on the basis of property tax is inevitably an illusory amount, including in the teeth of the legislation made by the Parliament, namely the Land Acquisition Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tead, it observed that such a direction would be beyond the purview of the Court's jurisdiction and that it is always open to the State to bring suitable amendment to Section 20 of the 1973 Act. Against this decision of the Division Bench rendered in Writ Appeal No.918 of 2008, the State of Karnataka has filed Civil Appeal No.1966 of 2013. While granting leave, vide order dated 25.2.2013, this Court has passed the following order: "SLP (C) No. 39936/2012 Leave granted. Operation of the impugned order of the High Court in so far as the same strikes down Section 20 of the Karnataka Slum Areas (Improvement and Clearance) Act, 1973 [for short 'the Act'] shall remain stayed, until further orders from this Court. The petitioners shall be free to determine and pay compensation to the land owners in terms of Section 20 of the Act. Any such determination and payment shall remain subject to ultimate outcome of this appeal." 5. Respondent No.4 (M/s. Chandra Spinning and Weaving Mills Private Limited) in the leading appeal filed by the State of Karnataka, as aforesaid, filed an independent appeal before the Division Bench being Writ Appeal No.1492 of 2008 (GMSLUM), which came to be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice obligations of the State. 20. In exercise of its eminent domain when the State acquired the property for public use, but without the owner's consent, the same has to be upon paying just compensation. The compensation payable must be a just equivalent of what the owner is deprived of. What principles will guide the determination of the amount payable fall within the legislative province. But the same have to meet the basic requirement of full indemnification of the expropriated owner. The compensation scheme under the Slum Areas Act does not provide for the payment of compensation equivalent to the market value of the land. The true valuation of the land involves both computation and judgment. 21. For the aforesaid reasons, I strike down Section 20 of the Slum Areas Act as unconstitutional. But the question is, what should follow it. If the lands are acquired under the Slum Areas Act, how the compensation is to be determined. It is for the legislature to decide and prescribe the reasonable method of determining the market value for the purpose of paying compensation to the land losers. However until such time that some legislative provision replaces Section 20, no vacuum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely applicable. As stated supra, the present Act is enacted prior to the 44th amendment. In such circumstances, it is for the State that the amount fixed u/s 20 of the Act is the market value and it is clear as no land looser can be deprived of his property without paying the reasonable compensation. But unfortunately, in this case, State has not made any efforts before us to show that three hundred times of the assessment fixed by the Municipality would be the reasonable compensation or very near to the market value. In such circumstances, we are of the view that if the learned Single Judge has held Sec.20 of the Act as unconstitutional, we cannot lightly interfere with the same." (emphasis supplied) This is the entire discussion regarding the validity of Section 20 of the 1973 Act. 10. In the appeals before this Court, both sides have extensively argued all aspects regarding issue of constitutional validity of Section 20 of the 1973 Act. For the nature of final order that we propose to pass, it is not necessary to dilate on the rival submissions in extenso. 11. According to the State, the 1973 Act and the provisions therein, in particular Section 20, it ought to enjoy the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Basantibai Mohanlal Khetan & Ors. (1986) 2 SCC 516 (2Judge Bench) which had dealt with the question of validity of the Maharashtra Housing and Area Development Act, 1976 for short, "the 1976 Act". This Act was enacted by the Maharashtra State Legislature to consolidate the Bombay Housing Board Act, 1948, in the Bombay and Hyderabad areas of the State, the Madhya Pradesh Housing Board Act, 1950, the Bombay Building Repairs and Reconstruction Board Act, 1969 and "the Maharashtra Slum Improvement Board Act, 1973". This Court upheld the validity of the 1976 Act also in reference to Article 31C of the Constitution as it existed at the relevant time (validated by the decision in His Holiness Kesavananda Bharati Sripadagalvaru supra at Footnote No.12 ), as can be discerned from the discussion in paragraphs 13 to 15 of the reported decision. The State would also argue that while considering the validity of Section 20 of the 1973 Act, it may be necessary to consider the question as to whether the expression "material resources of the community" would include private property and this question has already been referred to a larger Bench (nine Judges) in Property Owners' Association & Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of property, including the method of capitalisation value. Further, it has to be considered as to whether it is an objective method and not illusory (as it is the case of the State that the amount determined under Section 20 is quite substantial, i.e., Rs.3.52 crore), in the present case. Additionally, if the 1973 Act and the provisions are ascribable to the objective predicated in Article 39(b) of the Constitution, then it would get protection or immunity from challenge in terms of Article 14, 19 or 31 of the Constitution. Furthermore, even if the High Court was right in observing that the 1973 Act came into force prior to coming into force of 44th Amendment to the Constitution on 20.6.1979, it would make no difference as Article 31C was already in force with effect from 20.4.1972 to the extent it has been validated by this Court in His Holiness Kesavananda Bharati Sripadagalvaru supra at Footnote No.12. 15. It is indisputable that the State had defended Section 20 of the 1973 Act on the principle expounded in Article 31C of the Constitution as can be discerned from paragraph 19 of the judgment of the learned Single Judge and also of the Division Bench, in particular paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner at the market value of the property and in accordance with the principles laid down under the Land Acquisition Act, 1894 and not at 300 times the property as provided under Section 20 of the Act." 18. As the focus before the High Court was essentially on the plea that the acquisition proceedings had lapsed, even the State in its response filed before the High Court merely stated thus: "10. ...The compensation payable as per Section 20 of the Act is 300 times of the assessment is correct. The Act and its provisions are for the betterment of the poor and downtrodden slum dwellers as a social obligation. The compensation payable for such land acquired under Section 17 of the Act is only as per Section 20 of the Act. The respondents are having the obligation of providing shelter to several lakhs of slum dwellers and the respondents cannot acquire lands as per Land Acquisition Act and pay huge compensation as per the provisions of the said act i.e., as per the market value. Hence, the provisions of KSA (I & C) Act, 1973 are applied to acquire the lands as per Section 17 and pay the compensation as per Section 20 of the Act. Hence, Article 300A of the Constitution of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons afresh including in relation to the question of constitutional validity of Section 20 of the 1973 Act. In the remanded proceedings, it would then be open to the writ petitioners to amend the writ petition to raise a new plea regarding inapplicability of Section 17 to the land in question - which had not been declared as slum area or slum clearance area. That question, if answered in favour of the writ petitioners, would go to the root of the matter and it may then not be necessary to even examine the question regarding the constitutional validity of Section 20 of the 1973 Act. 22. As a result, to do substantial justice to both the parties, we deem it appropriate to relegate the parties before the learned Single Judge of the High Court for reconsideration of the writ petitions afresh on its own merits and in accordance with law with liberty to both parties to amend the writ petition or file further better affidavit to defend the provisions in question and the action of acquisition, as the case may be. The parties may do so within six weeks from today. The matter after remand to proceed before the learned Single Judge of the High Court in the first week of September 2022 for hea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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