Holding

The Supreme Court set aside the High Court’s declaration of unconstitutionality of Section 20 and remanded the cases, leaving Section 20 in force until the High Court re‑examines the issues.

Summary

The State of Karnataka issued a land acquisition notification under Section 17 of the Karnataka Slum Areas (Improvement and Clearance) Act, 1973. The petitioners challenged the notification on grounds of inadequate consideration of objections, alleged lapse of the acquisition process, and the constitutionality of Section 20, which fixes compensation at three hundred times the property tax. The High Court Single Judge held Section 20 ultra vires but did not set aside the notification; the Division Bench affirmed that view but limited the court's power to prescribe a compensation method. The Supreme Court set aside both High Court judgments, held that Section 20 has not been declared unconstitutional, and remanded the matters to the High Court for fresh consideration, allowing the parties to amend their pleadings. The Court also noted that issues of reasonable time, applicability of Section 17, and possible Article 31C immunity remain for the High Court to decide.

Issues considered

Whether Section 20 of the Karnataka Slum Areas (Improvement and Clearance) Act, 1973 is constitutionally valid.
Whether the land acquisition process under Section 17 has lapsed due to efflux of time.
Whether the compensation method prescribed in Section 20 violates Articles 14, 19(1)(f), 31, 300A of the Constitution.
Whether the 1973 Act enjoys protection under Article 31C despite being enacted before the 44th Amendment.
Whether the land in question falls within the definition of a slum area or slum clearance area under Section 17.

Legislation cited

Constitution of Indias. 14, s. 19(1)(f), s. 300A, s. 31, s. 31C, s. 39(b)
Karnataka Slum Areas (Improvement and Clearance) Act, 1973s. 17, s. 18, s. 20
Land Acquisition Act, 1894s. 23, s. 24

Subjects

land acquisitioncompensationconstitutional validityArticle 31Cslum clearanceSection 20property taxreasonable timeremand

Judgment

448 [2022]
SUPREME COURT 10 S.C.R. 448
REPORTS [2022] 10 S.C.R.

A THE STATE OF KARNATAKA & ANR.
v.
B. R. MURALIDHAR & ORS.
(Civil Appeal No. 1966 of 2013)
B JULY 28, 2022
[A. M. KHANWILKAR AND SANJIV KHANNA, JJ.]
Land Acquisition: Karnataka Slum Areas (Improvement and
Clearance) Act, 1973 – ss.17, 18, 20 – Constitutional validity of
s.20 of 1973 Act – Amount payable in respect of land acquired –
C
Acquisition notification u/s. 17 of 1973 Act issued by the Housing
Department of State in 2005 – Writ petition filed before High Court
contending that notification was issued without adequately
considering the objections taken by the writ petitioners and in excess
of the power vested in the authority and second plea was about the
D lapsing of the acquisition which was in furtherance of the show
cause notice issued under the 1973 Act – Single Judge did not set
aside the impugned notification, however, held that s.20 of the 1973
Act was ultra vires and opined that the method of determining the
amount to be paid to the land losers pursuant to acquisition of land
was not just and reasonable – It ought to be as per the prevailing
E
market value of the land; and not on the basis of “three hundred
times the property tax payable” in respect of such land, as per s.20
of the 1973 Act – And, until a just method for determination of
amount was replaced by a law made by the State Legislature, the
land losers ought to be paid amount in accordance with ss.23 and
F 24 of the 1894 Act – Division Bench upheld the declaration given
by the Single Judge about s.20 being unconstitutional, however,
modified the operative direction given regarding method of
determining the amount payable to the land losers and 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
G
amendment to s.20 – Division Bench noted that the 1973 Act cannot
get any immunity under Art. 31C of Constitution since the present
Act has been enacted prior to the 44th Amendment – On appeal,
held: High Court disposed of the assail to the validity of s.20 of the
1973 Act in a cryptic manner and more so without analysing all
H
448
THE STATE OF KARNATAKA & ANR. v. B. R. MURALIDHAR 449
& ORS.

relevant aspects needed to be considered by a Constitutional Court A
to declare provisions enacted by the State Legislature as ultra vires
– High Court ought to have examined the scheme of the 1973 Act,
its objects and purposes and also whether the payment of amount
specified as three hundred times the property tax payable in respect
of such land on the date of publication would be a permissible
B
method of determination of the amount or is per se unjust, unfair or
unreasonable – Additionally, if the 1973 Act and the provisions are
ascribable to the objective predicated in Art. 39(b) of the
Constitution, then it would get protection or immunity from challenge
in terms of Arts. 14, 19 or 31 of the Constitution – Also even if the
High Court was right in observing that the 1973 Act came into force C
prior to coming into force of 44th Amendment to the Constitution
on 20.06.1979, it would make no difference as Art. 31C was already
in force with effect from 20.04.1972 to the extent it has been validated
by this Court in Keshavananda Bharti – Matter remitted to High Court
for reconsideration of writ petitions including question of
D
constitutional validity of s.20 of the 1973 Act – Land Acquisition
Act, 1894 – ss. 23, 24 – Constitution of India – Art.19(1)(f), 31C,
39(b).
Disposing of the appeals, the Court
HELD: 1. The High Court had held that in absence of an E
express provision regarding lapsing of acquisition in the 1973
Act unlike the 1894 or 2013 Act, it is not open to grant relief of
setting aside impugned notification dated 23.6.2005 on account
of efflux of time. In that, show cause notice (preliminary
notification) is ordinarily issued when the competent authority is
satisfied that for the purpose of executing any work of F
improvement in relation to any “slum area” or any building in
such area or for the purpose of redeveloping any “slum clearance
area”, or for the purpose of rehabilitating slum dwellers, it is
necessary to acquire any land and it has been so decided in
pursuance of the said provision. The need to develop the slum G
area and to rehabilitate the slum dwellers is a continuing obligation
of the State until it is fully discharged. The fact that there is some
time gap between the preliminary notice to show cause why the
land in question should not be acquired and in issuance of the
final notification under Section 17, by itself, cannot be a ground
H
450 SUPREME COURT REPORTS [2022] 10 S.C.R.

A to declare the process initiated by valid show cause notice as
having lapsed by efflux of time. It was, however, urged by the
writ petitioners that the stated power to effectuate a purpose has
to be exercised in a reasonable time frame. The exercise of power
in a reasonable manner inheres the concept of its exercise within
a reasonable time. What would be the length of reasonable time
B
must be then determined by the facts of the case in the context
of scheme of the Act and the nature of the power which is to be
exercised to prevent miscarriage of justice, misuse or abuse of
power. Even this plea will have to be examined by the High Court
in the first place. [Paras 20, 20A][462-B-G]
C 2. In the fact situation of the present case, it is appropriate
to relegate the parties before the High Court for reconsideration
of the writ petitions 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
D 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
E of Section 20 of the 1973 Act.[Para 21][462-G-H; 463-A-B]
3. It will be open to the Single Judge to await the decision
of the larger Bench of this Court in reference made in terms of
Property Owners’ Association, in the event it becomes necessary
to deal with the argument of the expanse of expression “material
F resources of the community” in Article 39(b) of the Constitution
and its applicability to the impugned provision of the 1973 Act.
As the High Court’s impugned decisions have been set aside, it
must follow that the declaration issued by the High Court
regarding Section 20 of the 1973 Act being ultra vires stands
G effaced and that provision be given full effect until further orders
of the High Court in the remanded petitions. [Paras 23, 24][463-
D-E; 464-A-B]
The Deputy Commissioner and Collector, Kamrup & Ors.
v. Durganath Sarma AIR 1968 SC 394 : [1968] 1 SCR
H
THE STATE OF KARNATAKA & ANR. v. B. R. MURALIDHAR 451
& ORS.

561; K.T. Plantation Private Limited & Anr. v. State of A
Karnataka (2011) 9 SCC 1 : [2011] 13 SCR 636; His
Holiness Kesavananda Bharati Sripadagalvaru v State
of Kerala & Anr. (1973) 4 SCC 225 : [1973] 2 SCR
1089; The State of Karnataka & Anr., etc. v Ranganatha
Reddy & Anr., etc., etc. AIR 1978 SC 215 : (1977) 4
B
SCC 471 : [1978] 1 SCR 641; Maharao Sahib Shri
Bhim Singhji v Union of India & Ors. (1981) 1 SCC
166; Rajiv Sarin & Anr. v State of Uttarakhand & Ors.
(2011) 8 SCC 708 : [2011] 9 SCR 1012; State of
Maharashtra & Anr. v Basantibai Mohanlal Khetan &
Ors. (1986) 2 SCC 516 : [ 1986] 1 SCR 707; Property C
Owners’ Association & Ors. v State of Maharashtra &
Ors. (2013) 7 SCC 522 – referred to.
Case Law Reference
[1968] 1 SCR 561 referred to Para 7
D
[2011] 13 SCR 636 referred to Para 9
[1973] 2 SCR 1089 referred to Para 11
[1978] 1 SCR 641 referred to Para 11
(1981) 1 SCC 166 referred to Para 11
E
[2011] 9 SCR 1012 referred to Para 11
[1986] 1 SCR 707 referred to Para 11
(2013) 7 SCC 522 referred to Para 11
CIVIL APPELLATE JURISDICTION : Civil Appeal No.1966 F
of 2013.
From the Judgment and Order dated 28.08.2012 of the High Court
of Karnataka at Bangalore in Writ Appeal No.918 of 2008.
With
G
Civil Appeal No.4959 of 2022.
Nikhil Goel, AAG, Shyam Divan, Nikhil Nayyar, Sr. Advs., V. N.
Raghupathy, S. Udaya Kumar Sagar, Ms. Bina Madhavan, L. M.
Chidanandayya, P. Mohith Rao, Govind Manoharan for M/s Lawyer S
H
452 SUPREME COURT REPORTS [2022] 10 S.C.R.

A Knit & Co., Ms. Pritha Srikumar Iyer, Abhinav Ramanand, Dhananjay
Baijal, Ms. Neha Mathen, Ms. Mansi Binjrajka, Shubhranshu Padhi,
Ashish Yadav, Rakshit Jain, Vishal Banshal, Advs. for the appearing
parties.
The Judgment of the Court was delivered by
B A. M. KHANWILKAR, J.
1. In these appeals, the subject matter is the notification dated
23.6.2005 bearing No. HD 34 KOMAME 2004, Bangalore issued under
Section 17 of the Karnataka Slum Areas (Improvement and Clearance)
Act, 19731 by the Housing Department of the State of Karnataka and
C the constitutional validity of Section 20 of the 1973 Act. The persons
aggrieved by the issue of the impugned notification dated 23.6.2005 had
filed Writ Petition No.22611 of 20052, Writ Petition No.20955 of 20053
and Writ Petition No.21192 of 2005 (GM-Slum)4 before the High Court
of Karnataka at Bangalore5.

D 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
E 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
F 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 Act, 18946.
1
for short, “the 1973 Act”
2
G filed by B.R. Muralidhar, respondent No.1 in Civil Appeal No.1966 of 2013
3
filed by V. Balasubramanya @ Balender Venkta, respondent No.3 in Civil Appeal
No.1966 of 2013
4
filed by M/s. Chandra Spinning and Weaving Mills Private Limited, respondent No.4
in Civil Appeal No.1966 of 2013 and also appellant in the companion appeal i.e., Civil
Appeal No……..of 2022 @ S.L.P. (C) No.18942 of 2013
5
for short, “the High Court”
6
H for short, “the 1894 Act”
THE STATE OF KARNATAKA & ANR. v. B. R. MURALIDHAR 453
& ORS. [A. M. KHANWILKAR, J.]

3. Learned Single Judge of the High Court of Karnataka vide A
common judgment and order dated 20.9.2007 declared Section 20 of the
1973 Act as ultra vires. He, however, rejected the plea of the writ
petitioners that the acquisition pursuant to preliminary notification dated
14.10.1982 had lapsed on the finding that there was no such provision in
the 1973 Act analogous to the provisions of the 1894 Act. Learned Single
B
Judge also rejected the plea taken by the writ petitioners that their
objections were not adequately considered. Having so held, the learned
Single Judge did not set aside the impugned notification dated 23.6.2005.
As learned Single Judge took a view that Section 20 of the 1973 Act
was ultra vires, ithad to then opine that vacuum regarding the method
of determination of amount to be paid to the land losers was created and C
until a just method for determination of amount was replaced by a law
made by the State Legislature, the land losers ought to be paid amount in
accordance with Sections 23 and 24 of the 1894 Act.
4. Against the decision of the learned Single Judge, cross appeals
were filed by the writ petitioners as well as by the State of Karnataka. D
Respondent No.3 herein (V. Balasubramanya @ Balender Venkta),
however, later withdrew his appeal. The appeal filed by the State of
Karnataka for assailing the decision of the learned Single Judge declaring
Section 20 of the 1973 Act ultra vires, came to be disposed of vide
impugned judgment and order dated 28.8.2012 passed in Writ Appeal
No. 918 of 2008 and Writ Appeal Nos. 1484-1485 of 2011 (GM-SLUM). E
In view of withdrawal of the cross appeal filed by the writ petitioner
(respondent No.3 herein), the Division Bench was not required to examine
the correctness of the finding recorded by the learned Single Judge in
respect of plea of lapsing of acquisition and inadequate consideration of
the objections pressed into service by the writ petitioners for challenging F
the final notification dated 23.6.2005. As aforesaid, the Division Bench
upheld the declaration given by the learned Single Judge that Section 20
of the 1973 Act was unconstitutional. However, the Division Bench
modified the operative direction given by the learned Single Judge
regarding method of determining the amount payable to the land losers
in accordance with Sections 23 and 24 of the 1894 Act; and instead, it G
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
H
454 SUPREME COURT REPORTS [2022] 10 S.C.R.

A 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.
B 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
C 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
D Writ Appeal No.1492 of 2008 (GM-SLUM), which came to be rejected
on the ground of unexplained delay vide impugned judgment and order
dated 17.8.2012. Against the decision of the Division Bench, respondent
No.4 has filed cross appeal arising from S.L.P. (C) No.18942 of 2013,
essentially questioning the decision of the Division Bench of the High
E Court rejecting the cross appeal filed by the Company on the ground of
laches and unexplained delay.
6. We have heard Mr. Nikhil Goel, learned Additional Advocate
General for the State of Karnataka, Mr. Nikhil Nayyar, learned senior
counsel appearing for respondent No.3 and Mr. Shyam Divan, learned
F senior counsel appearing for respondent No.4.
7. Diverse grounds have been raised to question the correctness
of the view taken by the High Court. The moot question in these appeals
is about the constitutional validity of Section 20 of the 1973 Act. While
dealing with the relief claimed by the writ petitioners in that regard, the
learned Single Judge opined that the method of determining the amount
G
to be paid to the land losers pursuant to acquisition of land was not just
and reasonable. According to the learned Single Judge, it ought to be as
per the prevailing market value of the land; and not on the basis of three
hundred times the property tax payable in respect of such land, as
predicated in Section 20 of the 1973 Act. This method of determining
H the amount on the basis of property tax payable in respect of the acquired
THE STATE OF KARNATAKA & ANR. v. B. R. MURALIDHAR 455
& ORS. [A. M. KHANWILKAR, J.]

land, would result in offering illusory amount to the land loser. Besides A
being illusory, it would be arbitrary and discriminatory as the land loser
would be denied of the market value of the land as is provided for in
Sections 23 and 24 of the 1894 Act. To buttress this opinion, the learned
Single Judge took note of the decision of this Court in The Deputy
Commissioner and Collector, Kamrup & Ors. vs. Durganath Sarma7
B
and proceed to dispose of the challenge to Section 20 of the 1973 Act in
a cryptic manner in the following words:
“18. Thus there has to be equal protection of law.
19. I am also not in a position to give acceptability to the submissions
advanced by Sri Nagarajappa, the learned counsel for the C
respondent No.3. Just because the lands are acquired for
discharging the State’s social service obligations, proper
compensation to the land losers cannot be denied. The land
losers cannot be fastened with the social service obligations
of the State.
D
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 E
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. F
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 G
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 should be created. During the
transition between today, the date of striking down of Section 20
7
AIR 1968 SC 394 (5-Judge Bench)
H
456 SUPREME COURT REPORTS [2022] 10 S.C.R.

A of the Slum Areas Act and the commencement of the necessary
legislative amendment, the determination of the market value has
to be in accordance with Section 23 and 24 of the Land Acquisition
Act, 1894, as the provisions of the said Act have withstood the
test of time.”
B (emphasis supplied)
8. When the matter travelled before the Division Bench of the
High Court, the manner in which the appeals have been disposed of, in
particular the issue of constitutional validity of Section 20 of the 1973
Act, is no different. The Division Bench noted the arguments of the
C parties and of the State in particular that the provisions of the 1973 Act
enjoyed immunity in terms of Article 31C of the Constitution of India.
While dealing with the argument, the Division Bench noted that the 1973
Act came into force on 29.10.19748 much before the 44th Amendment
to the Constitution concerning Article 31C — on which date the provisions
of Articles 19(1)(f) and 31 were in force. Having said that, the Division
D Bench then articulated the question to be answered in the appeals before
it as follows:
“Whether the Judgment in K.T. PLANTATION PRIVATE
LIMITED9 can be applied and based on the same, whether the
order of the learned Single Judge is required to the interfered with
E or not.”
9. For answering this question, the Division Bench first reproduced
the paragraphs 189, 190 to 193, 198, 201 and 209 of the K.T. Plantation
Private Limited10 and disposed of the question under consideration in
the following words:
F
“15. From the reading of the aforesaid paragraphs of the Judgment,
we are of the opinion that it is for the State to demonstrate before
the Court that amount fixed u/s 20 of the Act is not illusory and it
is just and reasonable compensation.
16. The present Act cannot get any immunity under Article
G
31-C of the Constitution of India, since the present Act has
been enacted prior to the 44th Amendment. If the present
8
The 1973 Act received the assent of the President on 1.10.1974
9
K.T. Plantation Private Limited & Anr. vs. State of Karnataka, (2011) 9 SCC 1 (5-
Judge Bench)
10
H supra at Footnote No.9
THE STATE OF KARNATAKA & ANR. v. B. R. MURALIDHAR 457
& ORS. [A. M. KHANWILKAR, J.]

Act had been enacted after the 44th Amendment to the Constitution, A
we are of the view that the Judgment in K.T. PLANTATION
PRIVATE LIMITED Vs. STATE OF KARNATAKA11 would
squarely 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
B
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 C
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. D

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.
E
11. According to the State, the 1973 Act and the provisions therein,
in particular Section 20, it ought to enjoy the protection of Article 31C of
the Constitution. The fact that the 44th Amendment to the Constitution
came into force with effect from 20.6.1979 and the 1973 Act came into
force much before that, would make no difference. For, even at that
relevant time Article 31C was available as it had come into effect on F
20.4.1972 to the extent, it has been upheld by the Constitution Bench of
this Court in His Holiness Kesavananda Bharati Sripadagalvaru
vs. State of Kerala & Anr.12. In other words, the expanse of Article
31C, as upheld by this Court, at the time the 1973 Act came into force
was still available to give protection and immunity from challenge to the G
stated Act being referrable to the tenet enunciated in Article 39(b) of the
Constitution. Hence, according to the appellant it was open to the State
Legislature to prescribe different method for determination of amount
11
supra at Footnote No.9
12
(1973) 4 SCC 225 (13-Judge Bench)
H
458 SUPREME COURT REPORTS [2022] 10 S.C.R.

A payable to the land loser under the 1973 Act. To buttress this submission,
reliance has been placed also on The State of Karnataka & Anr., etc.
vs. Ranganatha Reddy & Anr., etc., etc.13; Maharao Sahib Shri Bhim
Singhji vs. Union of India & Ors.14; Rajiv Sarin & Anr. vs. State of
Uttarakhand & Ors.15; and K.T. Plantation Private Limited16. For
that, learned counsel for the State also invited our attention to the
B
Statement of Objects and Reasons, Preamble, and the scheme of the
different provisions of the 1973 Act, including Section 17 which is to
rehabilitate the slum dwellers from their existing squalid living conditions
in the slum area, so as to best subserve the common good by redeveloping
the slum area or slum clearance area, as the case may be. Such
C rehabilitation of slum dwellers tantamounts to distribution of the material
resources of the community after the vesting of the land in terms of
Section 18 of the 1973 Act, in the State free from all encumbrances. In
short, the provisions of the 1973 Act are referrable to the expanse of
Article 39(b) of the Constitution; and Section 20 is only a provision
(means) to achieve that goal by following method to compensate the
D
land loser — by offering amount of three hundred times the property tax
payable in respect of such land. Reliance is also placed on the exposition
in State of Maharashtra & Anr. vs. Basantibai Mohanlal Khetan &
Ors.17 which had dealt with the question of validity of the Maharashtra
Housing and Area Development Act, 197618. This Act was enacted by
E 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
F
at the relevant time (validated by the decision in His Holiness
Kesavananda Bharati Sripadagalvaru 19), 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
G 13
AIR 1978 SC 215 : (1977) 4 SCC 471 (7-Judge Bench)
14
(1981) 1 SCC 166 (5-Judge Bench)
15
(2011) 8 SCC 708 (5-Judge Bench)
16
supra at Footnote No.9
17
(1986) 2 SCC 516 (2-Judge Bench)
18
for short, “the 1976 Act”
19
H supra at Footnote No.12
THE STATE OF KARNATAKA & ANR. v. B. R. MURALIDHAR 459
& ORS. [A. M. KHANWILKAR, J.]

expression “material resources of the community” would include private A
property and this question has already been referred to a larger Bench
(nine Judges) in Property Owners’ Association & Ors. vs. State of
Maharashtra & Ors.20, which is pending consideration. Therefore, these
matters be tagged along with those cases.
12. Further, in response to the argument canvassed across the B
Bar by the learned counsel for the writ petitioners for the first time
before this Court in reference to the purport of Section 17 of the 1973
Act, it is urged by the State that the same ought not to be countenanced
without there being any pleading in that regard before the High Court.
The writ petitioners, however, had submitted that the land acquired in
terms of impugned notification was neither declared as a slum area under C
Section 3 nor as a slum clearance area under Section 11 of the 1973 Act
and as such, it could not be acquired in terms of Section 17.
13. The learned counsel appearing for the writ petitioners would
further contend that the issue regarding expanse of expression “material
resources of the community”, will not arise in the present case. In that, D
the conclusion recorded by the High Court is that no protection of Article
31C is available to the provisions of the 1973 Act, in particular Section
20. That view taken by the High Court is unexceptionable. At the same
time, it has been fairly accepted by respondent No.3, including in the
written submissions that the issue as to whether expression “material E
resources of the community” would include private owned resources, is
pending consideration before a nine-Judge Bench of this Court and if
the Court so intends, it may take up the matter for hearing along with
pending cases before the nine-Judge Bench. Learned counsel for the
writ petitioners have filed exhaustive written submissions in addition to
oral argument canvassed before this Court. F

14. We are of the considered opinion that the High Court has
dealt with the question of validity of Section 20 in a casual manner. That
cannot be countenanced inasmuch as the Constitutional Court for
answering the assail on this count, in the first place, need to examine the
scheme of the 1973 Act, its objects and purposes as also the question: G
whether the payment of amount specified as three hundred times the
property tax payable in respect of such land on the date of publication
would be a permissible method of determination of the amount or is per
20
(2013) 7 SCC 522 (7-Judge Bench)
H
460 SUPREME COURT REPORTS [2022] 10 S.C.R.

A se unjust, unfair or unreasonable? Concededly, there can be different
methods for valuation 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
B
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
C 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 Sripadagalvaru21.
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
D as can be discerned from paragraph 19 of the judgment of the learned
Single Judge and also of the Division Bench, in particular paragraph 16
reproduced hitherto.
16. Suffice it to observe that the High Court disposed of the assail
to the validity of Section 20 of the 1973 Act in a cryptic manner and
E more so without analysing all relevant aspects needed to be considered
by a Constitutional Court to declare provisions enacted by the State
Legislature as ultra vires. For, there is a presumption about the
constitutionality of the law made by the Parliament/State Legislature.
17. It was also urged by the learned counsel for the writ petitioners
F that the State had failed to explain and justify the method of determining
the value of the land which ought to be equivalent to fair market value
and not illusory amount. As regards deficiency in the pleadings of the
parties, the same argument can be used against both sides. We say so
because constitutional validity has been raised obviously as an alternative
plea in the writ petition being the last ground of challenge in paragraphs
G 29 and 30 of the Writ Petition No.21192 of 2005 (GM-SLUM)22 . The
same reads thus:
“29. Section 20 of the Act provides for payment of amount at the
rate of 300 times the property tax payable in respect of the land
21
supra at Footnote No.12
H 22
See Footnote No.4
THE STATE OF KARNATAKA & ANR. v. B. R. MURALIDHAR 461
& ORS. [A. M. KHANWILKAR, J.]

acquired. Entry 42 of List III, 7th Schedule to the Constitution A
provides for acquisition and requisition of property. By reason of
the fact that the said subject is in the concurrent list, both Centre
and the States can make laws. The Parliament having enacted
the Land Acquisition Act has evinced interest on occupy the entire
field relating to acquisition including payment of compensation
B
and the field is therefore completely covered. The Land Acquisition
Act provides for payment of compensation at the market value of
the property. The Act, which is later in point of time, though has
received the assent of the President, Section 20 in so far as it
provides for payment of amount 300 times the property tax payable
on such land which methodology is different from the methodology C
provided for under the Land Acquisition Act is therefore beyond
the competence of the State Legislature and is therefore liable to
be declared as void as being in contravention of the Land
Acquisition Act, 1894 read with Article 300A of the Constitution
of India.
D
30. Assuming, but not conceding that the impugned action of the
Government in acquiring lands is vitiated, even so the Government
is liable to pay compensation to the 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.” E
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 F
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
G
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 India is not violated.” H
462 SUPREME COURT REPORTS [2022] 10 S.C.R.

A 19. As aforesaid, in addition to the challenge to Section 20 of the
1973 Act being unconstitutional, during the course of argument for the
first time and then restated in the written submission, question regarding
the applicability of Section 17 of the 1973 Act to the fact situation of the
present case has been raised. There is no pleading in the writ petitions in
that regard.
B
20. Be that as it may, the High Court had held that in absence of
an express provision regarding lapsing of acquisition in the 1973 Act
unlike the 1894 or 2013 Act, it is not open to grant relief of setting aside
impugned notification dated 23.6.2005 on account of efflux of time. In
that, show cause notice (preliminary notification) is ordinarily issued when
C the competent authority is satisfied that for the purpose of executing any
work of improvement in relation to any “slum area” or any building in
such area or for the purpose of re-developing any “slum clearance area”,
or for the purpose of rehabilitating slum dwellers, it is necessary to acquire
any land and it has been so decided in pursuance of the said provision.
D The need to develop the slum area and to rehabilitate the slum dwellers
is a continuing obligation of the State until it is fully discharged. The fact
that there is some time gap between the preliminary notice to show
cause why the land in question should not be acquired and in issuance of
the final notification under Section 17, by itself, cannot be a ground to
declare the process initiated vide valid show cause notice as having
E lapsed by efflux of time.
20A. It is, however, urged by the writ petitioners that the stated
power to effectuate a purpose has to be exercised in a reasonable time
frame. The exercise of power in a reasonable manner inheres the concept
of its exercise within a reasonable time. What would be the length of
F reasonable time must be then determined by the facts of the case in the
context of scheme of the Act and the nature of the power which is to be
exercised to prevent miscarriage of justice, misuse or abuse of power.
Even this plea will have to be examined by the High Court in the first
place.
21. After cogitating over the matter and in the fact situation of the
G
present case, we are of the considered opinion that it would be appropriate
to relegate the parties before the High Court for reconsideration of the
writ petitions 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
H
THE STATE OF KARNATAKA & ANR. v. B. R. MURALIDHAR 463
& ORS. [A. M. KHANWILKAR, J.]

raise a new plea regarding inapplicability of Section 17 to the land in A
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.
B
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. C
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 hearing.
23. We need to clarify that it will be open to the learned Single
Judge to await the decision of the larger Bench of this Court in reference D
made in terms of Property Owners’ Association 23, in the event it
becomes necessary to deal with the argument of the expanse of
expression “material resources of the community” in Article 39(b) of
the Constitution and its applicability to the impugned provision of the
1973 Act. Ordinarily, to observe judicial propriety we would have opted
to keep these appeals pending before this Court and to be heard along E
with the connected cases before the larger Bench of this Court. However,
in that eventuality, the parties may have to amend their pleadings, if they
intend to urge further grounds of challenge or by way of defence, as the
case may be. That exercise, therefore, can be undertaken in the first
instance before the High Court, where both sides will get full opportunity F
to plead and argue their case.
24. In view of the above, we set aside the impugned judgment(s)
and order(s) dated 17.8.2012 and 28.8.2012 of the Division Bench of
the High Court as well as the common judgment dated 20.9.2007 rendered
by the learned Single Judge and restore the Writ Petition No.22611 of
G
200524, Writ Petition No.20955 of 200525 and Writ Petition No.21192 of
200526 to the file of the High Court for being proceeded afresh in
23
supra at Footnote No.20
24
See Footnote No.2
25
See Footnote No.3
26
See Footnote No.4 H
464 SUPREME COURT REPORTS [2022] 10 S.C.R.

A accordance with law after giving liberty to the parties to amend the
pleadings or file better affidavit to defend the impugned provisions and
the action of the State, as the case may be. As the High Court’s impugned
decisions have been set aside, it must follow that the declaration issued
by the High Court regarding Section 20 of the 1973 Act being ultra
vires stands effaced and that provision be given full effect until further
B
orders of the High Court in the remanded petitions.
25. All contentions available to both sides are left open. The matter
may appear before the learned Single Judge of the High Court of
Karnataka in the first week of September 2022. The High Court may
endeavour to dispose of the petitions expeditiously, in accordance with
C law.
The appeals are disposed of accordingly. No order as to costs.
Pending application(s), if any, are also disposed of.

D Devika Gujral Appeals disposed of.
(Assisted by : Roopanshi Virang, LCRA)

E

F

G

H