Supreme Court of India
PRAKASH AMICHAND SHAHversusSTAIE OF GUJARAT & ORS.
- Citation
- 1985 INSC 254
- Decided
- 20 December 1985
- Disposal
- Dismissed
- Bench
- O CHINNAPPA REDDY
Holding
The Bombay Town Planning Act, 1954 is constitutionally valid and its provisions, including the limited right of appeal and the compensation scheme without a solatium, do not violate Articles 14, 19(1)(f) or 31 of the Constitution.
Summary
The appellant, Prakash Amichand Shah, owned a leasehold interest in land in Surat and challenged the reservation of a portion of his land under Town Planning Scheme No. VIII (Umarwada) prepared under the Bombay Town Planning Act, 1954. He claimed the scheme violated Articles 14, 19(1)(f) and 31 of the Constitution because the Act did not provide an appeal against certain decisions of the Town Planning Officer, did not allow a solatium, and offered a less favourable compensation regime than the Land Acquisition Act, 1894. The Supreme Court examined the object and scheme of the Act, the statutory provisions for compensation (sections 67‑71), and the precedent set in State of Gujarat v. Shantilal Mangaldas. It held that the Act’s provisions are a valid exercise of legislative power, do not constitute discrimination, and the compensation methodology satisfies Article 31(2). The limitation on appeals was not found to be oppressive, and the lack of a solatium does not render the Act unconstitutional. Consequently, the appeal was dismissed.
Issues considered
- The constitutionality of the Bombay Town Planning Act, 1954 (sections 32, 33, 34, 53) vis‑à‑vis Articles 14, 19(1)(f) and 31 of the Constitution.
- Whether the denial of an appeal against certain decisions of the Town Planning Officer is discriminatory and violative of Article 14.
- Whether the absence of a solatium in compensation under the Act makes it discriminatory under Article 14.
- Whether the compensation formula prescribed in sections 67‑71 of the Act complies with the requirement of a just equivalent under Article 31(2).
- Whether the Act must be read in conjunction with the Land Acquisition Act, 1894 for lands taken under the scheme.
Legislation cited
- Bombay Town Planning Act, 1954s. 32, s. 33, s. 34, s. 53, s. 67, s. 71
- Constitution (Fourth Amendment) Act, 1955
- Constitution of Indias. Article 14, s. Article 19(1)(f), s. Article 31
- Land Acquisition Act, 1894s. 18, s. 4, s. 54
Subjects
Town Planning SchemeCompensationConstitutional validityEquality before lawProperty rightsAppealabilitySolatiumLand acquisitionStatutory interpretation
Judgment
1025
PllA1ASH AMICEAND SllAll A
V•
STAIE OF GUJARAT & ORS.
DECEMBEF 20, 1985
[O.CHINNAPPA REDDY, E.S. VENKATAFAMIAH, V. BALAKRISHNA ERADI, B
R.B. MISRA AND V. KHALID JJ.]
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 Consti-
tution of India. ·c
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 D
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 E
available under the Land Acquisition Act - whether for that
reason it could be said to be discriminatory.
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 F
Nawab of Belha Spinning, Weaving and Manufacturing Mills Ltd.
wider 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 company which bad taken the land
on lease executed a sub-lease in respect of 38 acres 2 gunthas
out of tbe entire plot of land on March 29, 1881 in favour of one G
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 s document dated April 30, 1928 Surat
Parsi P8DChayat Board acquired the lease in respect of the entire
38 acres 2 gunthas, from a lady who was the daughter of one
llustamji who had acquired the rights of Dr. Nassurwanji N.
Khambata· On May 24, 1937 the appellant Prakash Amichand Shah H
1026 SUPREHE COURT REPORTS [1985] SUPP. 3 s.c.R. ,-
purchased the right, title and interest of the head lessee, that
A
is Nawab of Belhs 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 spe<:ified in the document
dated November 15, 1882. Surat Parsi Panchayat Board which had
acquired the right of the sub-lessee in respect of 38 acres 2
B
gunthas created sub-lease in respect of 34 acres 4 gunthas
in Survey Nos. 75, 81 and 82 in fa~our of the Surat Municipal
Corporation under a document dated March 30, 1963 relating the
t
sub-lessee's right in the remaining land.
The Surat Borough Municipa1ity passed a resolution on
August 2, 1963 to prepare s Draft Develop111ent Plan for the entire
c ares within the municipal limits of Surat city in accordance with
the Developnent 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, 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
D
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 Umsrwada in
respect of the locality called Umarwada under section 22 of the
E
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
F
admeasuring 1,37, 961 sq. metres out of the aforesaid land of
which the appellant wu 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 Munici-
pality had acted mala fide in securing the reservation of such a
G
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 notifica-
tion dated May 10, 1968. When one Mr. M.G. Makwana appointed as
the Town Planning Officer by the Government on February 28, 1969
H
entered upon his functions under section 32 of the Act, the
appellant again filed his objection to the reservation of his
P.A.SHAR v. STATE 1027
land for the alleged purpose of the Municipal Corporation. In A
addition the appellant also claimed compensation in respect of
the said 38 acres 2 guntbas at the rate of Rs• 50 per sq• yard
alleging that the land in the vicinity bad been sold at that rate
8lld claimed towards his share two-thirds of the total
compensation. Then on June 30, 1970 the Tow Planning Officer
issued a notice expressing his intention to acquire the land in B
question admeasuring 1,37 ,961 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 compen-
sation of lands taken away for the purpose of the scheme being
not within the scope of section 33 (1) (xiii) of the Act the
deciaion of the Tow Planning Officer on those questions was not c
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 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 under Articles 14, 19 and 31 of the Cons ti tu- D
tion 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.
Shrl Sbantilal Mangaldss, [1969] 3 s.c.R. 341 in which the
validity of the Bombay Tow Planning Act bad been upheld.
Aggrieved by the judgment of the High Court the appellant filed E
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 Aoi1cJumd
Shah v. State of Gujarat, [1982) 1 s.c.R. 81, came to the conclu-
sion that the High Court was right in its finding that the
decision of the Tow Planning Officer determining the amount of
compensation in the appellant's case was not appealable. However, F
the Court felt that the case should be placed before the Consti-
tution Bench for hearing the questions relating to the constitu-
tional validity of the Act. Hence the appellant's case before the
Constitution Bench.
Dismissing the appeal, the Court G
BILD: 1.1 There is no constitutional infirmity in the
provision of the Bombay Tow Planning Act, 1954 and there is no
ground to declare the Act which bas been upheld in Sbantilal
Mangalda•'s cue about 17 years ago as unconstitutional now and
to unaettle all settled transactions drawing inspiration from
certain vague observations made in some subsequent decisions. H
[1056 D-E; 1060 B-C)
1028 SUPREME COURT REPORTS [1985] SUPP. 3 ·s.c.R. ,
A 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. lt 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
B and since it is not available under the procedure prescribed by
the Act in the case of lands taken under section 53 thereof the
Act ia discriminatory. (1057 !Hl]
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. lt consists of several activities which have as
c their ultimate object the orderly development of an urban area.
lt envisages the preparation of a development plan, allocation of
land for various private and public uses, preparation of a Town
Planning Scheme and making proviaions 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 autoJJ111tic
vesting of all lands required by the local authority. lt is not a
u 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
E section 66 of the Act is less than the total amolmt to be
declucted therefrom under any of the provisions of the Act.
Section 73 o1 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
F discharge and exercise for the benefit of the whole commnity.
All his functions are parts of the social and economic planning
undertaken and executed for the benefit of the commnity 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
G totality and not as individual acts directed against a single
person or a few persons. lt 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-il; 1047 A]
H 2.2 ln this very Act, there are three types of taking over
of lands - first under section 11, secondly under section 53 and
P.A.SHAll v. STATE 1029
thirdly under section 84 of the Act, each being a part of a
siDgle scheme but each one having a specific object and public A
purpose to be achieved. While as regards the determination of
compensatio'1 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 ll or under section 84 of the Act, in the case of
1llDds which are needed for the local authority under the Town B
Planning Scheme which authorises allotment of reconstituted plots
to persons from whom origins! plots are taken, it is difficult to
apply the provisions of the Land Acquisition Act, 1894. The
provisions of section 32 and the other financW provisions of
tbe Act provide for the determination of the cost of the scheme,
the development charges to be levied and contribution to be made c
by the local authority etc. It is only after all that exercise is
doue the money will be paid to or demanded from the owners of the
originsl plots depending on the circumstances govenl1Il8 each
case. If in the above context, the Act has made special provision
under section 67 to 7l of the Act for determining compensation
payable to the owners of origins! plots who do not get the D
reconstituted plots it cannot be said that there has been any
violation of Article 14 of the Constitution. Even there the
market value of the land taken is not lost sight of and hence no
violation of Article 31(2) of the Constitution either. [1047 A-E)
State of Gujarat v. Shr1 Sbantflal MangaJdas & Ors.,(1969] E
3 S.C.R. 341; 1'be Zaudu PMrwce1t1ca1 \H>rb Ltd. v. G.J. Desai &
0rs.,c.A.No. 1034 of 1967 decided on 28th August 1969; Maneklal
a.botalal & 0rs. v. K.G. MQwana & are., (1967] 3 s.c.R. 65
explained and applied.
3.l A decision ordinarily is a decision on the case before
the Court, while the principle underlying the decision would be F
billding as a precedent in a case which comes up for decision
subsequently. Bence, 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 G
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
bas to consider the effect of the precedent in question to read H
1030 SUPREME COURT REPORTS (1985] SUPP. 3 s.c.R.
A it over again and 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
B 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 Sbantilal llangal-
chlS'a has not been struck down by this Court in any subsequent
decision it would be wholly unjust to declare it inferentially as
c having been declared as void in a subsequent decision which
depends mostly on the reasons in Shantilal Hangaldaa•a case for
its survival. The decision in Sbantilal HangalchlS's case has not
been overruled by the Bank Nationalisation case which has only
explained Sbantilal HangaJdaa'a 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
D delete Article 31 altogether from the Constitution. (1056 B-1!]
LC. Cooper v. Union of India (1970] 3 s.c.R. 530;
JCesvananda llbarati v. State of Kera.la (1973] Suppl. .s.c.R. l;
State of Iaranataka & Anr. V• l!enganatha Keddy & Anr. (1978] l
S.C.R. 641 explained.
E
Teoiperton v. llusaell (1893) l Q.B. 715 (CA); Allen v. Flood
(1898) A.C.l; ~ v. ~thell (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 so
F made appealable the statute should be struck down. It may be
salutory 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
G 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-ti;
H 1057 A-BJ
H/s Babubhai & Co. & Ora. v. State of Gujarat [1985] 2
s.c.c. 732 followed.
P.A.SHAH v. STATE [VENKATARAMIAH, J.] 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 A
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 saiJ 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
B
compensation payable in the present case is illusory and unreal.
[1059 H; 1060 A-BJ c
Nagpur Improvement Trust and Anr. v. Vithal Rao & Ors.,
[1973) 3 s.c.R. 39; State of Kerala & Ors. v. I.Ji, Peter & Anr~,
[1980) 3 s.c.R. 290; p.c. Goswmoi v. Collector of Darnmg,A.I.R.
1982 s.c. 1214 distinguished.
D
CIVIL, APPELLATE JURISDICTION Civil Appeal No. 1224 of
1977.
From the Jud&lllent and Order dated 3.9.1976 of the Gujarat
High Court in Special Civil Application No. 1501 of 1974.
E
R.F. Nariman, P.K. Manohar and P.R. Parekh for the
Appellants.
T.s. Krishnamoo,rthy Iyer, T.U. hehta , Prashant Desai
and s.c. Patel for the Respondents.
F
The Judgment of the Court was delivered by
111!NKATARAMIAH, J, 1his 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
G
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,
H
19(l)(f) and 31 of the Constitution of India.
The land in question originally belonged to ~ne Ladli Begum.
She granted a iease in respect of the said land in favour of a
1032 SUPREME COURT REPORTS [1985] SUPP. 3 S.C.R.
A company called ~awab of Eelha Spinning, Weaving and ~Janufacturing
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
B on lease executed a sub-lease in respect of 38 acres 2 gunthas
out of the entire plot of land on ~larch 29, 1884 in favour of one ~
Dr. Nassurwanju N. Khambata for the residuary period of 99 years 1
without the right of renewal. This sub-lease was to expire on
October 31, 1980. Under a documeqt dated April 30, 1928 Surat
Parsi Panchayat Board required the lease in respect of the entire
38 acres 2 i:;unthas, referred to above, from a lady who was the
C daughter of one Rustamji who had acquired the rights of Dr.
Nassurwanji ~. 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 J
entire plot of land with the rights specified in the documents ~j
D 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
E land.
The Surat Borough hunicipality passed a resolution on
August 2, 1963 to prepare a Draft Developn.ent Plan for the entire
area within the municipal limits of Surat City in accordance with
the Develoyment Regulations issued by it with the object of
F checking haphazard growth of the city. Pursuant to the said
resolution, a notificaton 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 adfueasuring 34 acres 4 gunthas in
Survey Nos. 75, 81 and 82 for the purpose of setting up an indus-
trial estate by the Surat Borough Municipality, Surat which
G involved the shifting of ~lunicipal Workshops and Central Stores.
On June 26, 1965 the Surat Borough hunicipality msde a declara-
tion declaring its intention to prepare a Town Planning Scheme,
being the Town Planning Scheme No. VIII of Umarwada in respect of
the locality called Umsrwada under section 22 of the Act .The
Municipality however could not make and publish the draft scheme '
H within 12 months from the declaration of its intention as
P .A.SRAH v. STATE [\lfiljllTARAMIAI!, J. J 1033
required by section 23(1) of the Act. The State Government, how-
ever, by its Notification dated August 31, 1966 in exercise of A
its power under the proviso to section 23(1) extended the period
for makillf, 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 autho-
rised by the State Government to make and publish the draft B
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 c
appellant filed his objection to the proposed reservation point-
ing 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 reservatton of such a large piece of landlilits
favour. The Government of Gujarat after overrulillf, the objection D
ultimately granted sanction to the draft scheme prepared by the
Collector of Surat by its Notification dated ~.ay 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 E
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 compen- F
sation. Then on June 30, 1970 the .Town Planning Officer issued a
notice ~xpressing his intention to acquire the land in question
admeasuring 1,37 ,961 sq. me.tres. On November 4, 1971 he deter-
mined 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 G
Appeal. The Board of Appeal held that disputes regarding compen-
sation of lands taken away for the purpose of the scheme being
not within the scope of section 33(l)(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
H
regarding the propriety of the action taken by the Town Planning
1034 SUPREME COURT REPORTS (1985) SUPP. 3 s.c.R.
Officer in reserving the entire plot of land admeasuring 1,37,961
A 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 liigh Court of Gujarat out of which this
appeal arises.
B
The High Court aismissed 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
c based remained suspended at that time. The High Court however
referred to the decision of this Court in State of Gujarat v.
Sbri Sbantilal 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.
D 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 tc 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
F conclusion that the High Court was right in finding that the
decisioil·of the Town Planning Officer determining the amount of
compensation in the appellant's case was not appeslable by its
judgment dated July 24, 1981 which is reported as Prakash Ami-
chand 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
G placed before Constitution Bench for hearing the questions relat-
ing 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
H behalf of the appellant, i t is necessary to understand the
P.A.SllAH v. STATE (VENKATARAMIAH, J,] 1035
A
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 1and 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 B
and other purposes. Such laws generally provide for the prepara-
tion 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 c
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
fo~ce on April 1, 1957 before the reorganisation of the State of
D
Bombay and it continued to be in force in· the State of Gujarat
even after the llombay 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 E
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 F
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 G
development plan. Section 7 of the Act which deals with the
contents of development plan states that generally the develop-
ment plan should indicate th~ 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 : H
(a) proposals for designating the use of the land for
the purposes such as (1) residential (2) industrial,
(3) commercial, and (4) agricultural;
1036 SUPIIDIE COURT REPORTS [1985] SUPP. 3 s.c.R.
A (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;
B
(d) proposals for reservation of land for the pur-
poses of the Union, any State, any local authority or
any other authority established by law in lndia; and
(e) such other proposals for public or other purposes
as may from time to time be approved by the local
C 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
D 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
E 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 acquisi-
tion of such land.
F 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
G 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
H stopping up of streets, roads and c9mnunications; the
P.A.SllAH v. STATE [VENKATARAMIAll, J • J 1037
construction, alteration and removal of buildings, bridges and
other structures, the allotment or reservation of land for roads, A
open spaces, gardens, recretion grounds, schools, markets, green
belts and dairies, transport facilitl.es 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. B
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 IDBke 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 c
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 D
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 IDBke and E
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- F
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
G
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 H
'
1038 SUPREME COURT REPORTS [1985] SUPP. 3 s.c.R. ('
of the uses to which such land is to be put and the
A 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;
B (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;
c (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.
D
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
E the scheme as regards open spaces. For the purpose of sub-section
{l) 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;
F
(b) to form a reconstituted plot by the transfer
wholly or partly of the adjoining lands;
I
(c) to provide with the consent of the owners that two
or more original plots each of which is held in
G ownership in severality or in joint ownership shall
hereaiter, with or without alteration of boundaries,
be held in ownership in connnon as reconstituted plot;
(d) to allot a plot to any owner dispossessed of land
in furtherance of the scheme and;
H
P.A. SllAH v. STATE [VENKATARAhlAH, J • ] 1039
(e) to transfer the ownership of a plot from one
person to another. A
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 B
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( l) In accordance with the prescribed procedure the Town C
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 ; D
(ii) after notice given by him in the prescribed
marmer, determine, in the case in which a reconsti-
tuted plot is to be allotted to persons in ownership
in common, the shares of such persons;
E
(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 (l) of section 64;
(iv) determine whether the areas used, allotted or F
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 G
for a public purpose or purpose of the local authority
which is beneficisl 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
cf the scheme;
(vi) calculate the contribution to be levied on each H
plot used, allotted or reserved for a public purpose
1040 SUPREME COURT REPORTS [1985] SUPP. 3 s.c.R.
..
A
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
B 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 ;
c (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
D
(xi) determine the amount to be deducted from, or
added to, as the case may be, the contribution levi-
able from a person in accordance with the provisions
contained in section 67;
E (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;
F (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; I
G
(xiv) draw in the prescribed form the final scheme in
accordance with the draft scheme:
Provided that--
H (a) he may make variation from the draft scheme;
P.A.SHAll v. STATE [VENKATARAMIAH, J.] 1041
•
A
(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 :
B
Provided further that the Town Planning Officer shall
make no substantial variation and without the consent
of the local authority snd without hearing any
objections wl\ich may be raised by the owners
concerned.
c
(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 i~
substantial or not, the matter shall be referred by
the local authority to the State Government whose
decision shall be final snd conclusive. D
(3) The Town Planning Officer appointed for any draft
scheme shall decide all matters referred to in
sub-section (l) within a period of twelve mnths from
the date of his appointment :
E
Provided that the State Government may from time to time by
order in writing extend the .aid 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) snd (xiii) of
sub-section (1) of section 32, every decision of the Town F
Planning Officer shall be final and conclusive and binding on all
persons. Section 34 of the Act however provides for appeals being
pref erred 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 G
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 tne
preparation of draft town planning scheme by the local authority
and the second stage consists of the scheme to be prepared by the H
Town Planning Officer. If the State Government sanctions the
final scheme under section 51 of the Act it shall state in the
1042 SUPREME COURT REPORTS [1985] SUPP. 3 s.c.R. ,
A
notification the plac~ 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
B
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,
c unless it is otherwise determined in such scheme, vest
absolutely in the local authority free from all
enclD!lbrances;
(b) all rights in the original plots which have been
re-constituted shall determine and the re-constituted
IJ
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. (l) The costs of the scheme shall be met wholly
or in part by a contribution to be levied by the
F
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 ioortgage with
H
possession or to a lease the Town Planning Officer
P.A. SHAH v. STAIE [VENKATARAMlAI!, J •I 1043
shall determine in what proportion the 1110rtgagee or A
lessee on the one hand and the 1110rtgagor 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 ih solely for the B
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, c
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.
l)
(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 provisiona for certain
adjustments and it reads thus:- E
"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 F
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 G
improvements due to the alteration of its boundaries."
Where the cost of the scheme does not exceed half the
inerement, 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 Ii
1044 SUPREME COURT REPORTS [1985] SUPP. 3 S.C.R. •
A
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
B 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
c 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
D 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 ex_cess 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
F 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
G 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
H Land Acquisition Act, 1894 as amended by the
provisions contained in the Schedule to the Act ;
P.A.S!Wi v. STATE [VENKATARAMIAH, J.] 1045
•
(ii) transfer of lands that takes place on the coming A
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 B
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. c
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 D
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 solatiu:n
in addition to the mark.et value of the land, the acquisition of E
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 'Die Zaodu l'bazmaceutical 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 F
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 G
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
Govermnent, and the other in which the statutory
vesting of land operates as acquisition for the H
1046 SUPREME COURT REPORTS [1985) SUPP, 3 S.C.R.
A purpose of town planning by the locsl authority. The
State Government can acquire the land under the Land
Acquisition Act, and the locsl 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.
B 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 app•eciate 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
c 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
D already been set out. On the final Town Planning Scheme coming
into force under section 53 of the A<!t 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 A<!quisition 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 A<!t 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 contributi,>n to be levied from him under
section 66 of the Act is less than the total amount to be
F deducted therefrom under any of the provisions of the A<!t.
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 A<!t 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.
G 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 ,.-
H single person or a few persons. It is quite possible that when
P.A.SHAH v. STATE [VENKATARAhlAli, J.] 1047
statutory provisions are made for that purpose, there would be A
some difference between their impact on rights of individuals at
one st•ge 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 B
achieved. \.ihile 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 c
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
I charges to be levied and contribl'tion to be made by the local
authority etc. It is only after all that. exercise is done the
D
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 E
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 Maneklel Cibotalal & Ors. v. M.G.
Mabana & Ors., [1967] 3 s.c.R. 65 and in State of Gujarat v,
Sbri Sl!antilal Hangaldas & Ors. (supra). F
Justice Shah (as he then was) speaking on behalf of the .
Constitution Bench of this Court in State of Gujarat V• Sbri
Sbantilal Maugiilclas & Ors. (supra) while dealing with the very
'
Act the very Act observed at page 357 thus :-
G
"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
differ.ence 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 H
works thereon mUst be estimated on the basis of the
1048 SUPREME COURT REPORTS [1985] SUPP. 3 s.c.R. ,
market value at the date of the declaration of
A 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 . ,
B intention to make a er.heme 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
c 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 1
whether the Act violated clause (2) of Article 31 of the 1
Conatitution at pages 357 and 358 th11S :-
D "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
E for determination of compensation to be given within
the meaning of Art. 31(2). lwo arguments were urged on
behalf of the first respondent - (1) that the Act
specifies no principles on which the compenaation is
to be determined and given; and (2) that the scheme
for recompense for loss is not a scheme providing for
F
compensation. It is true that under the Act the market
value of the land at the date of declaration of inten-
tion 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. lhe High Court was,
in our judgment, right in holding that enactment of a
G 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 declara-
tion 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
H
P, A. SHAH v. STATE [VENKATARAMIA!i, J • ] 1049
means laying down general guiding rules applicable to
A
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
B
anterior to the date of extinction of interest is
still determined on a principle specified. Whether an
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 appli-
cable to all cases in which by virtue of the operation
of the Town Planning Act a person is deprived of his ' c
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
D
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
E
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 pay-
able, if fhed by the Legislature, is not justiciable,
F
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 compen-
sation fixed by the Legislature - and by the use of
'
the expression "compensation" we mean what the Legis-
lature justly regards as proper and fair recompense
G
for compulsory expropriation of property and not some-
thing 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 i t open to the Courts to
enter upon an enquiry whether the principles which are H
specified by the Legislature for determining compen-
1050 SUPRalE COURT REPORTS [1985) SUPP. 3 s.c.R.
A 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 Constitu-
tion (Fourth Amendment) Act. If the quantum of compen-
sation fixed by the Legislature is not liable to be
B 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
c person is compulsorily expropriated of his property
for a public purpose. What is fixed as compensation
by statute, or by the application of principles speci-
fied for determination of compensation is guaranteed:
it does not meJn however that something fixed or
determined by the application of specified principles
which is illusory or can in no sense be regarded as
D 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 conatitutional
guarantee. But compensation fixed or determined on
principles specified by the Legislature can not be
permitted to be challenged on the somewhat indefinite
E plea that it is not a just or fair equivalent. Princi-
ples 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
F principles specified by it do not award a just
equivalent will be in clear violation of the consti-
tutional declaration that inadequacy of compensation
provided is not justiciable.•·
The learned Judge also rejected the contention based on
G 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
H that ss.53 and 67 in any event infringe Art.14 of the
!'.A.SHAii v. STATE [VENKATARAMIAI!, J.J 1051
Constitution and were on that account void. Counsel A
relies principally upon that part of the judgment in
P. Vajravelu Mudaliar's case [1965] l 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 B
local authority and after acquiring the lands to vest
them in the local authority. lf that be done, compen-
sation 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 compen- c
sation 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 arguwent is based on no solid foundation.
The method of determining compensation in respect of
lands which are subject to the Town Planning Schemes D
is prescribed in the Town Planning Act • There is no
option under that act to acqui<e 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 E
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 F
a certain thing in a certain way the thing must be
done in that way or not that all: Taylor v. Taylor,
(1875) l 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 autho-
rity, the statutory effect given to a town-planning G
scheme results in discrimination between persons simi-
larly circumstanced."
Thus it is seen that all the arguments based on Article 14
and Article 31(2) of the Constitution against the Act were
repelled by the Constitution Bench in the State of Gujarat v.
Shr1. Sbantilal Mangaldae & Ore. (supra). With great respect, we H
approve of the decision of the Court in this case.
1052 SUPREME COURT REPORTS [1985] SUFP. 3 s.c.R. -.·
A 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
Rationalisation Case, in which again the major! ty judgment was
B written by Shah, J. Then the learned counsel referred us to the
decision in iesvananda Bbarati v. State of Eerala, [1973] Suppl.
s.c.R. 1 and to the decision in State of Karnataka & Aor. v.
Hanganatha Reddy & Aor., [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
C 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 decisiion 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
D 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 Sbantila1
Mangaldas's case (supra). The very same Judge delivered the
E 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
F 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
G decisions .. in P. Vajravelu ,.,v!aliar'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
H any precise determination, no definite connotation
P .A.SHAii v. STATE [VENKA'.IARA!IIAH, J • J 1053
could be attached thereto by calling it "just
A
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 B
principles specified therein. It was observed in the
judgment in Shantilal Mangaldas•s case (supra) at
p.651 :
'Whatever may h;!ve been the meaning of the expression
"compensation" under the unamended Article 31(2), c
when the Parliament hss 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 D
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
Mndelfar's case Shah, J. observed thus :-
E
"The "compenaation provided by the Ymdras Act,
according to the principles specified was not the full
market value at the date of acquisition. It did not
amount to "full indemnification" of "the owner the
Court still held that the law did not offend the
guarantee under article 31(2) as amended, becauae the F
objection was only as to be adequacy of compensation.
In Sbantilal Mangaldas•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 G
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 applicatioa,
of irrelevant principles, the law is not open to
challenge on the ground that compensation fixed or
determine to be paid is inadequate.
11
Both the lines of thought which converge in the
ultimate results, support the view that the principles
1054 SUPREME COURT l<EPORTS [1985] SUPP. 3 s.c.R. ""
A
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
B
of the class of property sought to"be acquired. On the ·,
application of the view expressed in p. Yaj1'aftln
1'Ulllars's case (supra) or in Shantflal Hangaldpe 1a
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."
c
It is seen that Shah, J. relied on the decision in Sbantilal
Mengaldas•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 Mengaldas's case
stood overruled. In Kesvananda Bbarati 's case (supra) no doubt
Shantilal llaogaldas 's case was discussed and considered in the
D 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 Bbarati 's case (supra) there are
observations to the effect that the case of Shant11al Mangaldas
(supra) was virtually overruled or in substance overruled in the
Bank Hac1onalisation c;;is<!• (supra). Some of the observations are:
E
"In State of Gujarat v. Shantilal Hangaldas 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 I:odia, [1970] 3 s.c.R. 530" (Per Shelat and
F Grover, J. P.282).
"In the Bank Nationalisation case the majority
decision virtually overruled the decision in Gujarat
v. Sbantilal." (Per Methew J. P.845).
G "But soon thereafter came the majority decision in
a.c. Cooper v. Union of I:odia, [1970] 3 s.c.R. 530.
Cooper in substance overruled Sbantilal Jtangaldas and
restored the old position". (Per Dwivedi, J. P.929).
But Hegde and Mukherjee, JJ. observed at page 336 thus :
H
"Then caine the Bank Nationalisation case. The majority
judgment in that case was delivered by Shah, J. (as he
P.a. SHAH v. STATE [VllNKATARAMlAH, J. J 1055
then was). In that judgment· he referred somewhat
extensively to the decision in Sbantilal Hangaldaa•e A
case and other cases rendered by this Court. He did
not propose to deviate from the rule laid down in
Shantilal's case. (Per Hegde & Mukherjee, JJ P.336)
In the State of lamataka v. Kaoganatha ll&!ddy (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
Sbant1lal Hangaldas& 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 . viewa expressed in
Vsjravelu's case and the case of the Metal Corporation
. . J'
(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 D
llatiooalisation case in Hustaa Cavasjee Cooper v.
Union of IDdia. Although in terms the decision of this
Court in the case of Shagt-tlal Hangaldas (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 Govermnents
concerned have continued to implement the provisions of the-Act.
What cannot be overlooked is that the decision in Shentilal
Mangaldas's case (supra) was quoted in ex.tense with approval and
relied on by the very same judge while deciding the Baolt G
Natiooalistion case (supra). He may have arrived at an incorrect
or contradictory conclusion in · striking down the Hank
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 Shentilal Mangaldas•s case (supra).
An inappropriate purpose for which a precedent is used at a later
date does not_tak.e away its binding character as a precedent. In H
1056 SUPREME COURT REPORTS [1985] SUPP. 3 s.c.R.
A 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. llu.ssell, [1893] l Q.B. 715
(C.A.), All.en y, Flood (1898] A.C. 1, ~ V• Leatbem, (1901]
A.C. 495 and other cases belonging to that group show the
B 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 Shmtflal Hangaldas 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
c Sbantilal Mangalda•'s case for its survival. With great respect
to the learned Judges who decided Kesavananda Bbarati's case and
the case State of Ismstska v. RsngaMtha Reddy, we are not
prepared to hold that the decision in Shantilal Mangaldas's case
is overruled by the Banlt llstlooalisstion case which has only
D
explained Sbantilal Mangaldss's case but does not overrrule 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 Shantilsl Mangsldas'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
E 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
F 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
G 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 .-
H who is appointed as a Town Planning Officer, we are of the view
P.A.SHA!l v. STATE [VENKATARAMIA!!, J.] 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 A
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 B
BPh.Nia1 & 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 available to a person aggrieved by such
orders. c
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 D
Act in 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
·Acqisition Act, 1894 to the proceedings under the Town Planning E
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 F
Act discriminatory. Reliance is placed on the decision of this
Court in Nagpur llllprovement Trust 8lld Am:. v. Vithal llBo & 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 discri-
minatory. In that case the petitioner was a tenant of some field
in a village. He had applied to the Agricultural Land Tribunal G
under a local Act for fixing the purchase price 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
H
1058 SUPBEME COURT REPORTS [1985] SUPP. 3 S.C.R. y
Act empowered the acquisition of the land at prices lower than
A 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. '.!he 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 ¥
B any property under the provisions of the Land Acquisition Act,
1894 as amended by the Improvement Trust Act without paying the
solatium also. lt 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 sub-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
c judgment of the High Court was affirmed by this Court by the
above decision. '.!he provision under consideration in the above
decision corresponds to section 11 and to section 84 of tee Act,
which we are now considering. Section 59 of the Nagpur Improve-
ment 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
D 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 scheILe coming into force the lands affected by the scheme
E
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. '.!hen 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.
F
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 scherue, reconsti-
G
tuted 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 autho-
rity for a public purpose. Such privaLe owner may be paid •
compensation or a reconstituted plot in some other place. It may
H
be a smaller or a bigger plot. It may be that in some cases it
F .A.ShAR v. STATE [VEM<ATARAHIAH, J.] 1059
may not be possible to allot a final plot at all. Sections 67 to A
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 autho-
rity is under an obligation to function according to the Act. The
local author! ty has to bear a part of the expenses of develop- B
ment. It is in one sense a package deal. The proceedin5s relating
to the scheffie are not like acquisition proceedings under the Land
Acquisition Act, 1894. ~or are the provisions of the Land
Acquisition Act, 1894 n.ade applicable either without or with
modifications as in the case of the Nagpur Improvement Trust Act,
1936. we do not understand the decision in liagpia Improvement: c
Trust's case (supra) as laying down generally that wherever land
, is taken away by the Government under a separate statute compen-
sation should be paid under the Land Acquisiton Act, 1894 only
and if there is any difference between the compensation payable
under the Land Acquisiton 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. '.l:.N. Peter & Anr.,
D
[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 E
Improvement Trust's case (supra). But in that decsion 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 ILust be uniform in all
cases. We need not investigate this question further
as it does not arise here although we are clear in our F
IL.ind that under given circumstances differentiation
even in the scale of compensation may comfortably
comfort with Article 14. ~o such circumstances are
present here nor pressed."
The decision in P.C. Goswami v. Collector of Darr81J8e, G
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 H
-·
1060 SUPREME COURT REPORTS [1985] SUPP. 3 s.c.R. .....
A amount by way of solatiwn. 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
B declare the Act which has been upheld in Sbantilal Mmgaldas'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.
c 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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