REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs.1542-44 OF 2001
Ahmedabad Municipal Corporation & Anr. …Appellants
Versus
Ahmedabad Green Belt Khedut Mandal & Ors. …Respondent
WITH
CIVIL APPEAL NOs.1545-50 OF 2001
State of Gujarat …Appellant
Versus
Ahmedabad Green Belt Khedut Mandal & Ors. …Respondents
WITH
CIVIL APPEAL NOs.1551-56 OF 2001
Ahmedabad Urban Development Authority …Appellant
Versus
Ahmedabad Green Belt Khedut Mandal & Ors. …Respondents
WITH
CIVIL APPEAL NO. 1864 OF 2014
Vadodara Sheheri Sankulan Khedut Mandal & Ors. ..Petitioners
Versus
Vadodara Urban Development Authority & Anr. ..Respondents
WITH
TRANSFERRED CASE (C) NOS. 12-13 OF 2010
Bhikhubhai Vitthalbhai Patel & Ors. etc.
…Petitioners
Versus
The State of Gujarat & Ors. …Respondents
J U D G M E N T
Dr. B.S. CHAUHAN, J.
1. Civil Appeal Nos.1542-44 of 2001 have been preferred challenging
the impugned judgment and order dated 24.11.2000, passed in Special
Civil Application Nos.1189, 4494 and 4659 of 1998 by the High Court of
Gujarat at Ahmedabad, wherein the Writ Petition filed by the
respondents has been partly allowed holding that Section 40(3)(jj)(a)
of the Gujarat Town Planning and Urban Development Act, 1976
(hereinafter referred to as the ‘Act 1976’) would be operative for
the land other than the land covered by Section 20(2) of the Act 1976,
though upheld the validity of Section 40(3)(jj) of the Act 1976.
Civil Appeal Nos.1545-50 of 2001 have been preferred by the
State of Gujarat against the same judgment raising the grievance to
the same extent.
Civil Appeal Nos.1551-56 of 2001 have been filed by the
Ahmedabad Urban Development Authority (hereinafter referred to as
`AUDA’) against the same judgment passed in same cases alongwith
Special Civil Application Nos.4859, 5934, 7476 of 1998 and 4271 of
2000.
Civil Appeal No. 1864 of 2014 has been filed against the
impugned judgment and order dated 9.10.2009 passed by the High Court
of Gujarat at Ahmedabad in Special Civil Application No.10912 of 2009,
wherein the matter stood disposed of in terms of the subject matter in
appeals referred to above.
In Transferred Case (C) Nos.12-13 of 2010, Writ Petition
Nos.2879 and 2880 of 2009 had been filed by the tenure holders/
petitioners before the High Court of Gujarat and as the same factual
and legal issues are involved therein, the petitions stood transferred
to this court.
2. As similar factual and legal issues are involved in all the
cases for convenience T.P. (C) Nos. 12-13 of 2010 and Civil Appeal
Nos. 1542-44 of 2001 are taken to be the leading cases.
All these matters relate to the validity and issues of
interpretation of Section 40(3)(jj) of the Act 1976 and application
of certain statutory provisions of the Gujarat Town Planning and Urban
Development Rules, 1979 (hereinafter referred to as the ‘Rules 1979’).
The basic question that has been raised on behalf of the tenure-
holders (Association of land owners) is that whether the provisions
contained in Sections 40(3)(jj) of the Act 1976 are ultra-vires of
Articles 14, 19 and 300-A of the Constitution of India, 1950
(hereinafter referred to as the ‘Constitution’) and have also
challenged the action on the part of the Municipal Corporations
(Ahmedabad and Surat) for declaring the intention to frame town
planning schemes by issuing notifications, and further to hold that
the action of the Municipal Corporations to take away land of the
tenure-holders to the extent of 50% without paying any compensation
as ultra-vires and further challenged the respective resolutions of
the State Government in this regard.
The main contention of the respondents before the High Court was
that by way of the impugned legislation, the appellants have designed
a circuitous method to acquire land without paying any amount of
compensation. The ancillary ground urged is that the land which was
not acquired on payment of compensation under Section 20 of the Act
1976 cannot again be acquired indirectly and without payment of
compensation by introducing the impugned legislation enabling
Authority to prepare a town planning scheme and reserve the land to
the extent of specified percentage for public purposes like roads,
parks, play grounds, gardens and open spaces. Further, as per Section
40(3)(jj)(a)(iv) of the Act, 1976 the sale of land by the Appropriate
Authority for raising money for the purpose of providing
infrastructural facilities is beyond legislative competence being
outside the purview of Entry 18 of List-II and Entry 20 of the
concurrent list contained in 7th Schedule to the Constitution.
Moreover, compensation payable under Section 82 of the Act, 1976 in
respect of property or right injuriously affected by the scheme, on
the basis of market value calculated on the date of issue of intention
to frame a scheme, is not an adequate compensation. Further, it was
not justified under the town planning scheme or the urban development
to permit acquisition of certain percentage of properties of citizens
for its disposal in the hands of public authorities for the purpose of
raising its fund, even to be used for further development. Under the
Act 1976, Section 40(3)(j) as it originally stood, provided for
reserving only 10 per cent in the town planning scheme for providing
housing accommodation to the members of the weaker sections.
Therefore, the amendment by which the said area has been increased
from 10% to 15% is not only unwarranted but also illegal.
3. Facts and circumstances giving rise to these matters are as
under:
A. In 1963, Ahmedabad Municipal Corporation (hereinafter referred
to as the ‘AMC’) prepared and submitted a development plan under the
Bombay Town Planning Act, 1964 (hereinafter referred to as “Bombay
Act”) whereby the lands of the respondents known as the ‘green belt’
were kept for open space and recreation. On 21.8.1965, the State
Government sanctioned the development plan which came into force on
1.10.1965.
B. AMC prepared its revised development plan and published it on
15.1.1976 whereby lands of the respondents were reserved for “public
housing”.
C. The Bombay Act was replaced by the Act 1976 under which AUDA was
alone competent to draft development plan.
D. The State Government sanctioned the development plan on
2.11.1987 which came into force on 3.12.1987 whereby the area known as
‘green belt’ was reserved for “public housing for different government
organizations”.
E. The AUDA prepared draft revised development plan which was
published on 29.11.1997. The land reserved for “public housing for
different government organizations” was de-reserved and put under the
category as “restricted residential utility services and other uses
zones”.
F. The AUDA in exercise of the powers under Section 21 of the Act
1976 came out with a draft revised development plan in the year 1998.
G. The respondents herein filed a Writ Petition before the Gujarat
High Court challenging the draft revised development plan and for
direction to the appellants herein to acquire their lands as per the
plan of 1987 within a period of 6 months failing which the plan would
lapse.
H. The Act 1976 was amended on 1.5.1999 and Section 40(3)(jj) was
inserted. The writ petition was amended and the vires of Sections 12
and 40(3)(jj) of the Act 1976 were also challenged.
I. The AUDA vide its resolution dated 5.5.1999 approved the
proposed revised development plan. Declarations were made in the year
2000 for making town planning schemes covering “restricted residential
utility services and other uses zones”.
J. The writ petition was partly allowed by the High Court vide
impugned judgment and order dated 24.11.2000.
Hence, these appeals.
4. We have heard S/Shri C.A. Sundaram, Shirish H. Sanjanwala,
Suresh Shelat, Huzefa Ahmadi, learned senior counsel for the tenure-
holders or association of farmers and S/Shri Harish N. Salve, T.R.
Andhyarujina, learned senior counsel and Preetesh Kapur, learned
counsel for the State and statutory authorities.
5. All the submissions advanced by the counsel for the respective
parties are the same which had been agitated before the High Court and
reference thereof has already been made. Learned counsel appearing
for the tenure-holders have submitted that the judgment of the High
Court as far as the validity of the statutory provision is concerned,
does not require any interference whatsoever but earmarking of the
land to the extent of 50% without paying any compensation amounts to
expropriation and in all circumstances percentage fixed by the
statutory provisions is excessive.
6. On the contrary, learned counsel appearing for the state and
statutory authorities have submitted that the judgments impugned have
made the scheme unworkable as one tenure holder may get all
infrastructure facilities while the adjacent neighbour may not get any
facility at all. The area which can be taken away by the authority for
sale to the extent of 15% relates to the total area covered by the
scheme and not from each and every plot.
7. In order to properly understand the dispute herein, reference
has to be made to various provisions of the Act 1976. The Preamble of
the Act 1976 indicates that the purpose of the legislation is to
consolidate and amend the law relating to the making and execution of
development plans and town planning schemes in the State of Gujarat.
Section 12 of the Act 1976 provides for proposals and reservations to
be made in the development plan for the approval of the State
Government.
8. Clause (x) of Section 2 of the Act 1976 defines “development
plan” while clause (xxvi) thereof defines “scheme”.
Section 9 of the Act 1976 provides that the Development
Authority shall prepare and submit the development plan to the State
Government for the whole or any part of the development area in
accordance with the provisions of this Act. Section 10 thereof
requires that a copy of draft development plan is to be kept open for
public inspection.
Section 12 provides for the contents of draft development plan
generally providing the manner in which the use of land in the area
covered by it shall be regulated and also indicating the manner in
which the development therein shall be carried out. In particular, it
shall provide, so far as may be necessary, proposal for designating
the use of the land for residential, industrial, commercial,
agricultural and recreational purposes; for the reservation of land
for public purposes, such as schools, college and other educational
institutions, medical and public health institutions; proposals for
designation of areas for zoological gardens, green belts, natural
reserves and sanctuaries; transport and communications, such as roads,
highways, parkways, railways, waterways, canals and airport, including
their extension and development; proposals for water supply, drainage,
sewage disposal, other public utility amenities and service including
supply of electricity and gas; reservation of land for community
facilities and services, etc.
Section 20 of the Act reads as under:
“?(1) The area development authority or any other authority for
whose purpose land is designated in the final development plan
for any purpose specified in clause (b), clause (d), clause (f),
Clause (k), clause (n) or clause (0) of sub-section (2) of
section 12, may acquire the land either by agreement or under
the provisions of the land Acquisition Act, 1894.
(2) If the land referred to in sub-section (1) is not acquired
by agreement within a period of ten years from the date of the
coming into force of the final development plan or if
proceedings under the Land Acquisition Act,1894 (I of 1894), are
not commenced within such period, the owner or any person
interested in the land may serve a notice on the authority
concerned requiring it to acquire the land and if within six
months from the date of service of such notice the land is not
acquired or no steps are commenced for its acquisitions, the
designation of the land as aforesaid shall be deemed to have
lapsed”.
Section 40(3) (j) & (jj)(a) of the Act reads as under:
“(j) the reservation of land to the extent of ten percent; or
such percentage as near thereto as possible of the total area
covered under the scheme for the purpose of providing housing
accommodation to the members of socially and economically
backward classes of people.
(jj) (a) the allotment of land from the total area covered under
the scheme, to the extent of:
(i) Fifteen percent for roads;
(ii) Five percent for parks, playgrounds, garden and open space
(iii) Five percent for social infrastructure such as schools,
dispensary, fire brigade, public utility place as earmarked in
the Draft Town Planning Scheme.
(iv) Fifteen percent for sale by appropriate Authority for
residential, commercial or industrial use depending upon the
nature of development.
Provided that the percentage of the allotment of land specified
in paragraphs (i) to (iii) may be altered depending upon the
nature of development and for the reasons to be recorded in
writing;
(b) the proceeds from the Sale of land referred to in para (iv)
of sub-clause (a) shall be used for the purpose of providing
infrastructural facilities in the area covered under the scheme.
(c) The land allotted for the purposes referred to in paragraphs
(ii) and (iii) of sub-clause (a) shall not be changed by
variation of schemes for the purpose other than public purpose.”
Section 48 of the Act 1976 defines the power of the State
Government to sanction draft scheme. Further, Section 48-A reads as
under:
“(1) Where a draft scheme has been sanctioned by the State
Government under sub-section (2) of section 48, (hereinafter in
this section, referred to as 'the sanctioned draft scheme'), all
lands required by the appropriate authority for the purposes
specified in clause (c), (f), (g), or (h) of sub-section (3) of
section 40 shall vest absolutely in the appropriate authority
free from all encumbrances.
(2) Nothing in sub-section (1) shall affect any right of the
owner of the land vesting in the appropriate authority under
that sub-section.”
Section 77 of the Act 1976 deals with cost of scheme, which also
includes all sums payable as compensation for land reserved or
designated for any public purpose or for the purposes of appropriate
authority which is solely beneficial to the owners of the land or
residents within the area of the scheme and also includes portion of
the sums payable as compensation for land reserved or designated for
any public purpose. It also includes legal expenses incurred by the
appropriate authority in making and in the execution of the scheme.
Clause (f) thereof reads as under:
(f) any amount by which the total amount of the values of the
original plots exceeds the total amount of the values of the
plots included in the final scheme, each of such plots being
estimated at its market value at the date of the declaration of
intention to make a scheme, with all the buildings and works
thereon at the said date and without reference to improvements
contemplated in the scheme other than improvements due to
alteration of its boundaries.
Clause (2) of Section 77 reads:
(2) If in any case the total amount of the values of the plots
included in the final scheme exceeds the total amount of the
values of the original plots, each of such plots being estimated
in the manner provided in clause (f) of sub-section (1), then
the amount of such excess shall be deducted in arriving at the
costs of the scheme as defined in sub-section (1).
Section 79 of the Act 1976 provides for contribution towards
costs of scheme.
Section 82 of the Act 1976 reads as under:
Compensation in respect of property or right injuriously
affected by scheme.
The owner of any property or right which is injuriously affected
by the making of a town planning scheme shall, if he makes a
claim before the Town Planning Officer within the prescribed
time, be entitled to be compensated in respect thereof by the
appropriate authority or by any person benefited or partly by
the appropriate authority and partly by such person as the Town
Planning Officer may in each case determine:
Provided that the value of such property or rights shall be
deemed to be its market value at the date of the declaration of
intention to make a scheme or the date of the notification
issued by the State Government under sub-section (1) of section
43 without reference to improvements contemplated in the scheme,
as the case may be.
Section 84 thereof deals with the cases in which amount payable
to owners exceeds amount due from him. As per the provisions of
Section 84, if the owner of an original plot is not provided with a
plot in the preliminary scheme or if the contribution to be levied
from him under Section 79 is less than the total amount to be deducted
therefrom, the net amount of his loss, shall be payable to him.
Section 85 of the Act 1976 deals with the cases in which the
value of the developed plot is less than the amount payable by the
owners. In case the amount which would be due to the appropriate
authority under the Act from the owner of a plot to be included in the
final scheme exceeds the value of such plot estimated on the
assumption that till scheme has been completed, the owner of such plot
has to make payment to authority of the amount of such excess within
the prescribed period.
Sub-Section (2) of Section 85 provides that on meeting certain
legal requirements, the plot included in the final scheme “shall
vest absolutely in the appropriate authority free from all
encumbrances but subject to the provisions of the Act”.
9. Rule 22 of the Rules 1979 reads as:
(1) The compensation payable under section 45 shall be
difference between the value of the property (inclusive of
structure) on the basis of the existing use and that on the
basis of permitted use both values being determined as on the
date of declaration of intention to prepare the scheme.
(2) In making the valuation on the basis of permitted use,
allowance shall be made for the expenses that may have to be
incurred in so converting the existing structures as to make
them suitable for permitted use.
(3) In case provision is made for continuance of the existing
use for a number of years taking into consideration the future
life of the structure the compensation payable shall be limited
to present value of the standing structure less value of
materials at the end of such period.
(4) X X X
10. Form H attached to the Rules 1979 is a Form to be filled by the
Town Planning Officer while preparing the draft planning scheme and it
clearly makes it evident that “any person who is injuriously affected
by the above town planning scheme, is entitled to claim the damages in
accordance with Section 82 of the Act 1976”.
11. Form K attached to the said Rules 1979 is also to be filled up
and sent by the Town Planning Officer while preparing the final draft
planning scheme as required under Section 52(3) and it puts him under
an obligation to determine and record as under:
“(i) The compensation payable to you under Section 80
(ii) Amount payable by you under Section 80
(iii) Estimated amount of the increment under Section 78
(iv) Amount of incremental contribution under Section 79
(v) The compensation under Section 82
(vi) Net amount of contribution
(vii) Net amount payable to you”
12. The aforesaid provisions read conjointly gives a clear picture
that the scheme is just like the consolidation proceedings as the
land, belonging to various persons, covered by the scheme first be put
into a pool and then the land be allocated for different purposes and,
in such a way, after having all deductions for the purpose of either
by way of acquisition of land under the Land Acquisition Act 1894
(hereinafter referred to as `Act 1894’) or the land taken under the
provisions of Section 40(3)(jj)(a) of the Act 1976, the loss and
profit of individual tenure holder is to be calculated. After
assessing the market value on the date of declaration of the intention
to frame a scheme and the value of the property after making all these
deductions, adjustments, improvements etc. and, therefore, if a person
has suffered any loss, his loss is to be made good from the funds of
the scheme and if a person has gained an amount equivalent to net
gain, is to be recovered from him.
13. The main issue involved herein is whether after the lapse of the
period for reservation as per Section 20(2) of the Act 1976, can the
said land be again acquired by resorting to the provisions of Section
40 of the Act 1976. In the present case, the State Government had
sanctioned a development plan on 2.11.1987 which came into force on
3.12.1987 wherein the area known as the “green belt” was reserved for
“public housing for different government organizations”. The said
area was deemed to be de-reserved by virtue of the provisions of
Section 20 after the expiry of a period of 10 years. Despite the
respondents having served the six months’ notice, the said land was
still not acquired by the government. It has been submitted on behalf
of the respondents that having regard to the provisions of Section 20
read with Section 40 of the Act 1976, the said land could not be re-
acquired/re-designated by framing a town planning scheme. Section 48-
A of the Act 1976 provides for vesting of land in the appropriate
authority. However, the said section does not cover the requirement
under Section 40(3)(jj)(a) of the Act. It has been further argued
that the other relevant provision is Section 107 of the Act 1976 which
provides that land needed for a town planning scheme shall be deemed
to be land needed for a public purpose within the meaning of the Act
1894. Therefore, without invoking the provisions of the Act 1894, the
said land could not be re-notified under Section 40 of the Act 1976.
14. After considering all the submissions of the parties, the High
Court has recorded the following conclusions:
I) The contention that prescribing of various percentage under
Section 40(3)(jj)(a) of the Act 1976 amounts to excessive legislation
is rejected. The unamended clause (jj) of Section 40 provided for
allotment of 10% of the land in the scheme or such percentage as near
thereto as possible for the purpose of sale for residential,
commercial and industrial use. The present provision as exists today
has now specified various percentage of the land to be set aside for
specific purpose, i.e. 15% for roads, 5% for parks, playgrounds etc.,
5% for social infrastructure and 15% for sale for providing
infrastructural facilities. There has only been an increase of 5% in
the percentage of land that could be sold of by the appropriate
authority as compared to an increase of 30% as contended by the
respondents. The current provision now only specifies specific
percentage of the land to be set aside for the specified purpose which
was already provided for in the Act 1976 and there is no further
reservation that is provided.
II) Entry 18 of List II of the Constitution provides for legislative
competence with respect to land i.e. rights in or over the land
including land improvement. Entry 20 of Concurrent List of the
Constitution deals with economic and social planning. Therefore, the
State Legislature was well within its competence to specify the
percentage of areas to be demarcated/used for the specified purpose.
Further, a mere increase of percentage of land to be demarcated for a
specific purpose can in no way said to be an excessive legislation.
Section 91 of the Act 1976 provides for establishment of funds for
utilization by the appropriate authority in order to meet expenditures
for the development of land, administration of the Act and such other
purpose as the State Government may direct. With the increase in cost
of construction, the requisite funds for development would naturally
increase and therefore, there does not seem to be any impediment in
prescribing a higher percentage of land that is to be sold for such
purposes.
III) The respondents` claim to the benefit under Article 300-A of the
Constitution which provides for a constitutional right to property is
also stood rejected. Each and every claim to property cannot be
termed as a right to property and any legislation prescribing a
reasonable restriction over the same is a valid exception to the said
Article.
IV) Even the contention of the respondents that the compensation
prescribed under Section 82 of the Act 1976 was inadequate stands
rejected.
15. The aforesaid findings have been challenged by the
State/statutory authorities as well as by the Association of land
owners to the extent the findings have been recorded against them.
16. It is in this backdrop that we have to test the submissions
advanced on behalf of the parties in the light of law declared by this
Court earlier on the issues involved herein.
In Jilubhai Nanbhai Khachar etc.etc. v. State of Gujarat & Anr.,
etc.etc., AIR 1995 SC 142, this Court held:
“…Though Articles 31 and 19(1)(f) of the Constitution
accorded to ‘property’ the status as a fundamental right, there
emerged conflict between the animation of the Founding Fathers
and the judicial interpretation on the word ‘compensation’ when
private property was expropriated to subserve common good or to
prevent common detriment…..Concomitantly legislature has power
to acquire the property of private person exercising the power
of eminent domain by a law for public purpose. The law may fix
an amount or which may be determined in accordance with such
principles as may be laid therein and given in such manner as
may be specified in such law. However, such law shall not be
questioned on the grounds that the amount so fixed or amount
determined is not adequate. The amount fixed must not be
illusory. The principles laid to determine the amount must be
relevant to the determination of the amount….. We are conscious
that Parliament omitted Article 31(2) altogether. However when
the State exercises its power of eminent domain and acquires the
property of private person or deprives him of his property for
public purpose, concomitantly fixation of the amount or its
determination be must in accordance with such principles as laid
therein and the amount given in such manner as may be specified
in such a law…..”
17. In Ashutosh Gupta v. State of Rajasthan & Ors., AIR 2002 SC
1533, this Court held:
“There must be proper pleadings and averments in the
substantive petition before the question of denial of equal
protection of infringement of fundamental right can be decided.
There is always a presumption in favour of the constitutionality
of enactment and the burden is upon him who attacks it to show
that there has been a clear transgression of the constitutional
principles. The presumption of constitutionality stems from the
wide power of classification which the legislature must, of
necessity possess in making laws operating differently as
regards different groups of persons in order to give effect to
policies. It must be presumed that the legislature understands
and correctly appreciates the need of its own people, that its
laws are directed to problems made manifest by experience.”
18. In Prakash Amichand Shah v. State of Gujarat & Ors., AIR 1986 SC
468, this Court relied upon the judgment of this Court in Zandu
Pharmaceutical Works Ltd. v. G.J. Desai, Civil Appeal No. 1034 of 1967
decided on August 28, 1969 dealing with the very provisions of the
Act, wherein this Court had observed :
“When the Town Planning Scheme comes into operation the land
needed by a local authority vests by virtue of Section 53(a) and
that vesting for purposes of the guarantee under Article 31(2)
is deemed compulsory acquisition for a public purpose. To lands
which are subject to the scheme, the provisions of Sections 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 Government, and the
other in which the statutory vesting of land operates as
acquisition for the purpose of town planning by the local
authority. The State Government can acquire the land under the
Land Acquisition Act, and the local 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. Hence the provisions of
Sections 53 and 67 are not invalid on the ground that they deny
equal protection of the laws or equality before the laws.”
(Emphasis added)
19. In Prakash Amichand Shah (Supra) this Court held:
“…..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 single person or a few persons. It 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. 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 achieved. While 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 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 charges
to be levied and contribution to be made by the local authority
etc. It is only after all that exercise is done the 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 Sections
67 to 71 of the Act for determining compensation payable to the
owners of original plots who do not get the reconstituted plots
it cannot be said that there has been any violation of Article
14 of the Constitution. It is seen that even there the market
value of the land taken is not lost sight of. The effect of the
provisions in Sections 67 to 71 of the Act has been explained by
this Court in Maneklal Chhotalal v. M.G. Makwana, AIR 1967 SC
1373, and in State of Gujarat v. Shantilal Mangaldas, AIR 1969
SC 634.
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 Shantilal Mangaldas
(supra). With great respect, we approve of the decision of the
court in this case…….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 time when the Act was enacted or
at any time thereafter.”
(Emphasis added)
20. This Court in the said case also explained the decision of this
Court in Nagpur Improvement Trust & Anr. v. Vithal Rao & Ors., AIR
1973 SC 689, wherein the High Court had held that as the acquisition
was by the State, in all cases where the property was required to be
acquired for the purposes of a scheme framed by the Trust and such
being the position, it was not open to the State to acquire any
property under the provisions of the Act 1894 as amended by the
Improvement Trust Act without paying compensation on the same
parameters and the solatium also. It was, therefore, held by the High
Court that the paras 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 Act 1894 were ultra vires as violating the guarantee of
Article 14 of the Constitution.
This Court further held:
“…..The development and planning carried out under the Act is
primarily for the benefit of public. The local authority is
under an obligation to function according to the Act. The local
authority has to bear a part of the expenses of development. It
is in one sense a package deal. The proceedings relating to the
scheme are not like acquisition proceedings under the Land
Acquisition Act, 1894. Nor are the provisions of the Land
Acquisition Act, 1894 made applicable either without or with
modifications as in the case of the Nagpur Improvement Trust
Act, 1936. We do not understand the decision in Nagpur
Improvement Trust case (supra) as laying down generally that
wherever land is taken away by the government under a separate
statute compensation should be paid under the Land Acquisition
Act, 1894 only and if there is any difference between the
compensation payable under the Land Acquisition Act, 1894 and
the compensation payable under the statute concerned the
acquisition under the statute would be discriminatory…..”
21. In Bhavnagar University v. Palitana Sugar Mill Pvt. Ltd. & Ors.,
AIR 2003 SC 511, this Court held:
“37. The words “so far as may be” indicate the intention
of the Legislature to the effect that by providing revision of
final development plan from time to time and at least once in
ten years, only the procedure or preparation thereof as provided
therein, is required to be followed. Such procedural
requirements must be followed so far as it is reasonably
possible. Section 21 of the Act, in our opinion, does not and
cannot mean that the substantial right conferred upon the owner
of the land or the person interested therein shall be taken
away. It is not and cannot be the intention of the Legislature
that which is given by one hand should be taken away by the
other.
38. Section 21 does not envisage that despite the fact that
in terms of sub-section (2) of S. 20, the designation of land
shall lapse, the same, only because a draft revised plan is
made, would automatically give rise to revival thereof. Section
20 does not manifest a legislative intent to curtail or take
away the right acquired by a land owner under S. 22 of getting
the land defreezed. In the event the submission of the learned
Solicitor General is accepted the same would completely render
the provisions of S. 20(2) otiose and redundant.
39. Sub-section (1) of S. 20, as noticed hereinbefore,
provides for an enabling provision in terms whereof the State
become entitled to acquire the land either by agreement or
taking recourse to the provisions of the Land Acquisition Act.
If by reason of a revised plan, any other area is sought to be
brought within the purview of the development plan, evidently in
relation thereto the State will be entitled to exercise its
jurisdiction under sub-section (1) of S. 20 but it will bear
repetition to state that the same would not confer any other or
further power upon the State to get the duration of designation
of land, which has been lapsed, extended. What is contemplated
under S. 21 is to meet the changed situation and contingencies
which might not have been contemplated while preparing the first
final development plan. The power of the State enumerated under
sub-section (1) of S. 20 does not become ipso facto applicable
in the event of issuance of a revised plan as the said provision
has been specifically mentioned therein so that the State may
use the same power in a changed situation.”
(See also: Chairman, Indore Vikas Pradhikaran v. M/s. Pure Industrial
Cock & Chem. Ltd. & Ors., AIR 2007 SC 2458; and Shrirampur Municipal
Council, Shrirampur v. Satyabhamabai Bhimaji Dawkher & Ors., (2013) 5
SCC 627)
22. In view of the provisions of the Act 1976 and particularly
Section 40 (3)(jj)(a)(iv), the question does arise as to whether
selling of land provided therein maximum to the extent of 15% is
illegal; and whether on lapsing of designation under the development
plan under Section 20, can there be any fresh reservation/designation
under the town planning scheme for the same land which is designated
and whether such land if acquired, can only be acquired independently
under the Act 1894.
23. As we have explained hereinabove that the town planning scheme
provides for pooling the entire land covered by the scheme and
thereafter re-shuffling and reconstituting of plots, the market value
of the original plots and final plots is to be assessed and authority
has to determine as to whether a land owner has suffered some injury
or has gained from such process. Re-constitution of plots is
permissible as provided under the scheme of the Act as is evident from
cogent reading of Section 45(2)(a)(b)(c) and Section 52(1)(iii) in
accordance with Section 81 of the Act 1976. By re-constitution of the
plots, if anybody suffers injury, the statutory provisions provide for
compensation under Section 67(b) read with Section 80 of the Act 1976.
By this re-constitution and readjustment of plots, there is no
vesting of land in the local authority and therefore, the Act provides
for payment of non-monetary compensation and such a mode has been
approved by the Constitution Bench of this Court in Shantilal
Mangaldas (supra), wherein this Court has held that when the scheme
comes into force all rights in the original plots are extinguished,
and simultaneously therewith ownership springs in the re-constituted
plots. It does not predicate ownership of the plots in the local
authority, and no process - actual or notional - of transfer is
contemplated in that appropriation. Under clause (a) of Section 53,
vesting of land in local authority takes place only on commencement of
scheme into force. The concept that lands vest in a local authority
when the intention to make a scheme is notified, is against the plain
intendment of the Act. Even steps taken by the State do not involve
application of the doctrine of eminent domain.
24. In Maneklal Chhotalal (supra), re-adjustment of plots has been
approved by this Court observing as under:
“Even if, an original plot owner is allotted smaller extent of
land in the final plot and has to pay certain amount as
contribution, having regard to the scheme and its objects, this
is inevitable and is not deprivation.”
25. Thus, it is evident that in case a land owner is not provided
with a final plot, amount of his loss would be payable to him as
required under Section 84 of the Act 1976. (It is agreed by learned
counsel for the parties that there is not a single instance herein
where the land owner is deprived of his land completely and has not
been given a re-constituted plot). However, it is suggested by learned
counsel for the State that in such an event, such tenure holder would
be entitled for market value of the land to be determined under the
Act 1976 and the provisions of the Act 1894 would not be applicable in
view of the judgment of this Court in Prakash Amichand Shah (supra).
Be that as it may, as there is no such instance where the land owner
is deprived completely of his land and does not get reconstituted
plots, we do not want to proceed further with an academic question.
26. In Shantilal Mangaldas (supra), this Court held:
“The provisions relating to payment of compensation and recovery
of contributions are vital to the successful implementation of
the scheme. The owner of the re-constituted plot who gets the
benefit of the scheme must make contribution towards the
expenses of the scheme; the owner who loses his property must
similarly be compensated.”
The aforesaid judgment is still a good law on this aspect.
27. In view of the commencement of the 44th Amendment of the
Constitution w.e.f. 20.6.1979, whereby Articles 31(2) and 19(1)(g)
have been deleted, we do not propose to go into the enquiry and
consider the judgments in State of West Bengal v. Mrs. Bella Banerjee
& Ors., AIR 1954 SC 170; and Rustom Cavasjee Cooper v. Union of India,
AIR 1970 SC 564. More so, the judgments in P. Vajravelu Mudaliar v.
The Special Deputy Collector for Land Acquisition, West Madras & Anr.,
AIR 1965 SC 1017; and Union of India v. The Metal Corporation of India
& Anr., AIR 1967 SC 637, have been over-ruled by this Court in
subsequent judgment. (See: Ishwari Khetan Sugar Mills (P) Ltd.
etc.etc. v. The State of U.P. & Ors., AIR 1980 SC 1955).
Thus, there is no fundamental right to hold property. But the
right to compensation on compulsory acquisition is still available
under the second proviso to Article 31A subject to the limitation as
specified therein. However, we need not elaborate the same as the said
averment is not argued before us.
28. Article 300-A of the Constitution though creates a human right
being a constitutional provision, but is not a fundamental right.
Article 300-A provides that no person can be deprived of his property
except by authority of law. The Town Planning Act is definitely an
authority of law by which a person is deprived of his property if we
assume that the town planning scheme deprives a person of his
property, though it is not so in view of the judgments of this Court
in Shantilal Mangaldas (supra) and Prakash Amichand Shah (supra).
29. So far as the question that upon lapsing of designation under
the development plan under Section 20 there cannot be any
reservation/designation under a town planning scheme for the same
land, is to be understood reading the provisions of the Act 1976
cogently. The development plan is prepared under Chapter II and town
planning scheme is made under Chapter V. Therefore, they are two
different things. The development plan is a macro plan for a vast area
wherein a town planning scheme is minor scheme within the town.
Section 40(1) simply provides that in the making of town planning
scheme the authority has to have regard to the final development of
the plan, if any. Thus, the words “having regard to the development
plan” in Section 40 means that town planning scheme cannot disregard
or ignore the designation/reservation made in the development plan.
Under Section 20 of the Act, it is provided that if an
acquisition does not take place by agreement or under the Act 1894, in
respect of certain lands designated in the final development plan for
the six purposes mentioned in sub-section (2) of Section 12 within a
period of 10 years from the coming into force of the final development
plan, the designation of the land under these clauses shall be deemed
to have lapsed. Therefore, the provision for lapsing of the
designation of the land does not take it out of the purview of town
planning scheme and such a provision does not prevent the making of a
provision in a town planning scheme for any reservation specified in
Section 40(3). If the judgment of the High Court on this issue is
approved, the town planning scheme would be impermissible. Thus, even
after the lapse of designation of the land under Section 20, a town
planning scheme will have to include the land for roads, open spaces,
gardens under Section 40(3)(e), reservation of land for accommodation
to members of socially and economically backward classes of people
under Clause 40(3)(j) but not for items mentioned in Section
40(3)(jj)(a) would lead to absurdity.
30. Section 40(3)(jj) only regulates discretion of the Area
Development Authority (ADA) while making the draft development plan.
The land acquired under Section 20 read with Section 12 of the Act
1976 would need infrastructural facility and the original plot which
is acquired would require to be re-constituted as a final plot and to
make a building site. The settled legal proposition in respect of
interpretation of statute is that the provisions of the Act have to be
read as a whole and therefore the provision of Section
40(3)(jj)(a)(iv) for sale has to be read inconsonance/conjointly with
the other statutory provisions and not in isolation. The sale upto the
extent of 15% is from the total area covered under the scheme and not
in respect of every plot of land. In order to generate financial
resources for the development of infrastructure, the saleable plot for
residential, commercial and industrial use are allotted by the
appropriate authority. Similarly, while re-constituting the plots,
final plot is offered to the original owner for its beneficial use.
31. The High Court has committed an error interpreting the
provisions under challenge as it failed to appreciate that the
provisions of the Town Planning Scheme in Chapter-V, no where indicate
that the lands under Section 20 cannot be subject matter of the Town
Planning Scheme. The interpretation given by the High Court
tantamounts to rewriting the provisions of the Act 1976 as the High
Court has held that the land under Section 20 cannot be the subject of
Section 40(3)(jj). Section 40(3)(jj)(a) only illustrates and provides
the guidance to the authority.
32. So far as the observation made by this Court in Bhavnagar
University (supra) is concerned, the court held that the land which
has been de-reserved under Section 20 cannot be subject matter of
revised development plan under Section 20(1). However, the issue
involved in that case was in respect of applicability of Section 40
while framing the scheme, and this court had not dealt with the
provisions of the scheme under Chapter-V of the Act.
33. A Constitution Bench of this Court in K.L. Gupta & Ors. v. The
Municipal Corporation of Greater Bombay & Ors., AIR 1968 SC 303 had
examined the validity of the provisions of Sections 9, 10, 11, 12 and
13 of the Bombay Town Planning Act, 1954 (hereinafter referred to as
the `Act 1954’) and held as under:
“With regard to the complaint that the period of ten years
fixed under s. 11(3) of the Act was too long, and an
unreasonable restriction on the rights of a land owner to deal
with his land as he pleased, it is enough to say that in view of
the immensity of the task of the local authorities to find funds
for the acquisition of lands for public purposes, a period of
ten years was not too long.
…………..No one can be heard to say that local authority after
making up its mind to acquire land for a public purpose must do
so within as short a period of time as possible. It would not be
reasonable to place such a restriction on the power of the local
authority which is out to create better living conditions for
millions of people in a vast area. The finances of a local
authority are not unlimited nor have they the power to execute
all schemes of proper utilisation of land set apart for public
purposes as expeditiously as one would like. They can only do
this by proceeding with their scheme gradually, by improving
portions of the area at a time, obtaining money from persons
whose lands had been improved and augmenting the same with their
own resources so as to be able to take up the improvement work
with regard to another area marked out for development. The
period of ten years fixed at first cannot therefore be taken to
be the ultimate length of time within which they had to complete
their work. The legislature fixed upon this period as being a
reasonable one in the circumstances obtaining at the time when
the statute was enacted. We cannot further overlook the fact
that modifications to the final development plan were not beyond
the range of possibility. We cannot therefore hold that the
limit of time fixed under s. 4 read with s. 11(3) forms an
unreasonable restriction on the rights of a person to hold his
property.” (Emphasis
added)
34. In Shantilal Mangaldas (supra), a Constitution Bench of this
Court examined the scheme under the Act 1954 which was applicable
earlier to the State of Gujarat wherein with respect of the land
situated therein, the Borough Municipality of Ahmedabad declared its
intention of making a town planning scheme vide resolution dated
18.4.1927 under the Bombay Town Planning Act, 1915, wherein the High
Court of Gujarat had allowed the writ petition filed by the tenure-
holders. This Court reversed the said judgment observing as under:
“22. The following principles emerge from an analysis of
Clauses (2) and (2A): compulsory acquisition or requisition may
be made for a public purpose alone, and must be made by
authority of law. Law which deprives a person of property but
does not transfer ownership of the property or right to
possession of the property to the State or a corporation owned
or controlled by the State is not a law for compulsory
acquisition or requisition. The law, under the authority of
which property is compulsorily acquired or requisitioned, must
either fix the amount of compensation or specify the principles
on which, and the manner in which, the compensation is to be
determined and given. If these conditions are fulfilled the
validity of the law cannot be questioned on the plea that it
does not provide adequate compensation to the owner…………….
The first contention urged by Mr. Bindra cannot, therefore,
be accepted……….
The principal argument which found favour with the High Court
in holding Section 53 ultra vires is that when a plot is
reconstituted and out of that plot a smaller area is given to
the owner and the remaining area is utilised for public purpose,
the area so utilised vests in the local authority for a public
purpose, and since the Act does not provide for giving
compensation which is a just equivalent of the land expropriated
at the date of extinction of interest, the guaranteed right
under Article 31(2) is infringed…………….
There is no vesting of the original plots in the local
authority nor transfer of the rights of the local authority in
the reconstituted plots. A part or even the whole plot belonging
to an owner may go to form a reconstituted plot which may be
allotted to another person, or may be appropriated to public
purposes under the scheme. The source of the power to
appropriate the whole or a part of the original plot in forming
a reconstituted plot is statutory. It does not predicate
ownership of the plot in the local authority, and no process-
actual or notional-of transfer is contemplated in that
appropriation. The lands covered by the scheme are subjected by
the Act to the power of the local authority to readjust titles,
but no reconstituted plot vests at any stage in the local
authority unless it is needed for a purpose of the authority.
Even Under Clause (a) of Section 53 the vesting in a local
authority of land required by it is on the coming into force of
the scheme. The concept that lands vest in the local authority
when the intention to make a scheme is notified is against the
plain intendment of the Act…………….
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 for
determination of compensation to be given within the meaning of
Article 31(2) ………….
On the second branch of the argument it was urged that a
provision for giving the value of land, not on the date of
extinction of interest of the owner, but on the footing of the
value prevailing at the date of the declaration of the intention
to make a scheme, is not a provision for payment of
compensation……………
……………The method of determining compensation in respect of
lands which are subject to the town-planning schemes is
prescribed in the Town Planning Act. There is no option under
that Act to acquire the land either under the Land Acquisition
Act or under the Town Planning Act. Once the draft town-planning
scheme is sanctioned, the land becomes subject to the provisions
of the Town Planning Act, and the final town-planning scheme
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 purposes of a town-planning scheme cannot be acquired
otherwise than under the Act, for it is settled rule of
interpretation of statutes that when power is given under a
statute to do a certain thing in a certain way the thing must be
done in that way or not at all………………” (Emphasis added)
35. Thus, we do not find any force in the submissions made on behalf
of the tenure-holders for the simple reason that after the judgment in
Bhikhubhai Vithalbhai Patel v. State of Gujarat & Anr., AIR 2008 SC
1771, it was not permissible for the statutory authorities to bring
any scheme whatsoever for the reason that as per that judgment also,
land could be used for residential purposes and the authority’s draft
scheme also provides for residential purposes. That does not mean that
it would be used exclusively for residential purpose and it cannot
have even small marketing place or a small dispensary.
36. Section 40 of the Act 1976 contains the words “regard being had”
and thus it suggests that while the condition specified therein are to
be taken into consideration they are only a guide and not fetters upon
the exercise of power.
37. It is a settled legal proposition that hardship of an individual
cannot be a ground to strike down a statutory provision for the reason
that a result flowing from a statutory provision is never an evil. It
is the duty of the court to give full effect to the statutory
provisions under all circumstances. Merely because a person suffers
from hardship cannot be a ground for not giving effective and
grammatical meaning to every word of the provisions if the language
used therein is unequivocal. (See: The Martin Burn Ltd. v. The
Corporation of Calcutta, AIR 1966 SC 529; Tata Power Company Ltd. v.
Reliance Energy Limited & Ors., (2009) 16 SCC 659; and Rohitash Kumar
& Ors. v. Om Prakash Sharma & Ors., AIR 2013 SC 30).
38. The interpretation given by the High Court runs contrary to the
intention under the scheme and may frustrate the scheme itself as in
the pockets left out in the scheme the basic amenities may not be
available. The result would be that a portion of the land would be
left without infrastructural facility while the adjacent area
belonging to neighbours would be provided infrastructural facility.
39. In view thereof, we are of the considered opinion that the High
Court has recorded an erroneous finding that if a designation lapses
under Section 20, the land cannot be again reserved in a town planning
scheme, and further if the land cannot be acquired under Section 20
for want of capacity to pay any compensation under the Act 1894, it
cannot be allowed to be acquired indirectly on lesser payment of
compensation as provided under the Act 1976. Thus, the judgment of the
High Court to that extent is not sustainable in the eyes of law.
40. In the transferred cases, the resolution dated 16.5.2008
providing the extent of taking over the land to 50% has been
challenged on the ground that in other similar schemes in Vadodara,
the maximum land taken by the State/Authority had been only upto 30%.
Therefore, the deduction to the extent of 50% of the total land of a
tenure-holder is illegal acquisition or amounts to expropriation and
not acquisition. It is further submitted by Shri Huzefa Ahmadi,
learned senior counsel appearing for the petitioners in transferred
cases that in case of non-agricultural land, the deduction may be upto
20% and for agricultural land it may be upto 30%. Shri Ahmadi has
placed a very heavy reliance on a chart filed by him showing that in
other similar cases, a very lesser area had been deducted by the
State/Authority and in the instant case 15% area had been proposed for
sale without drawing the balance sheet. In such a fact-situation, the
cases have to be allowed.
41. On the contrary, Shri Preetesh Kapur appearing for the
respondents has submitted that it is pre-mature to challenge the
resolution dated 16.5.2008 as it is a first step to initiate the
proceedings under the Act and the Rules. The draft scheme issued under
Section 48 of the Act 1976 empowers the State Government to sanction a
draft scheme and clause (3) thereof provides that if the State
Government sanctions the scheme, a notification shall be issued
stating at what place and time the draft scheme shall be open for the
inspection of the public after which the procedure prescribed under
Sections 50 and 51 would be followed. At that stage Rule 26 which
provides that for the purpose of preparing the preliminary scheme and
final scheme, the Town Planning Officer shall give notice in Form ‘H’
of the date on which he will commence his duties and shall state the
time as provided in Rule 37 within which the owner of any property or
right which is injuriously affected by the making of a scheme would be
entitled under Section 82 to make a claim before him. Such notice
should be published in the official gazette also and the law further
requires the filing of the objections and the personal hearing to such
person who would be adversely affected.
42. In the instant Transferred Case, as the authority is only
dealing with the issues at a draft stage and the applicants have ample
opportunity to file their objections and are entitled to personal
hearing as required under Rule 26 clause (4), the matter can be
adjudicated before the statutory authority.
Therefore, in view of the above, we are of the considered
opinion that the apprehensions raised by the applicants at this stage
are pre-mature. Admittedly, the applicants have filed their
objections raising their grievance and they had also been given the
personal hearing by the statutory authorities on all permissible,
factual and legal grounds. The learned counsel appearing for the
State/Authorities has submitted that in case the applicants are not
satisfied and make fresh objections within 30 days from today, they
would be provided a fresh opportunity of hearing. However, it is too
early to anticipate as what order would be passed on their objections.
In case, they are aggrieved by the order passed after hearing their
objections, they have a statutory right to approach the appropriate
forum challenging the same.
43. In view of the above, we do not think it proper to decide the
cases on merits at such a premature stage. More so, there is no
reason to believe that the authorities would act arbitrarily and would
not take into consideration the grievance raised by the applicants.
44. In view of the above, Civil Appeal Nos.1542-44 of 2001, 1545-50
of 2001 and 1551-56 of 2001 are allowed. The judgment impugned
therein are set aside to the extent hereinabove. Civil Appeal No.1864
of 2014 and Transferred Case (C) Nos.12-13 of 2010 are dismissed.
However, it is clarified that any observation made herein in the
transferred cases would not adversely affect either of the parties.
No order as to costs.
….....…….……………………..J.
(Dr. B.S. CHAUHAN)
.......……………………………J.
(J. CHELAMESWAR)
.......……………………………J.
New Delhi, (M.Y. EQBAL)
May 9, 2014
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs.1542-44 OF 2001
Ahmedabad Municipal Corporation & Anr. …Appellants
Versus
Ahmedabad Green Belt Khedut Mandal & Ors. …Respondent
WITH
CIVIL APPEAL NOs.1545-50 OF 2001
State of Gujarat …Appellant
Versus
Ahmedabad Green Belt Khedut Mandal & Ors. …Respondents
WITH
CIVIL APPEAL NOs.1551-56 OF 2001
Ahmedabad Urban Development Authority …Appellant
Versus
Ahmedabad Green Belt Khedut Mandal & Ors. …Respondents
WITH
CIVIL APPEAL NO. 1864 OF 2014
Vadodara Sheheri Sankulan Khedut Mandal & Ors. ..Petitioners
Versus
Vadodara Urban Development Authority & Anr. ..Respondents
WITH
TRANSFERRED CASE (C) NOS. 12-13 OF 2010
Bhikhubhai Vitthalbhai Patel & Ors. etc.
…Petitioners
Versus
The State of Gujarat & Ors. …Respondents
J U D G M E N T
Dr. B.S. CHAUHAN, J.
1. Civil Appeal Nos.1542-44 of 2001 have been preferred challenging
the impugned judgment and order dated 24.11.2000, passed in Special
Civil Application Nos.1189, 4494 and 4659 of 1998 by the High Court of
Gujarat at Ahmedabad, wherein the Writ Petition filed by the
respondents has been partly allowed holding that Section 40(3)(jj)(a)
of the Gujarat Town Planning and Urban Development Act, 1976
(hereinafter referred to as the ‘Act 1976’) would be operative for
the land other than the land covered by Section 20(2) of the Act 1976,
though upheld the validity of Section 40(3)(jj) of the Act 1976.
Civil Appeal Nos.1545-50 of 2001 have been preferred by the
State of Gujarat against the same judgment raising the grievance to
the same extent.
Civil Appeal Nos.1551-56 of 2001 have been filed by the
Ahmedabad Urban Development Authority (hereinafter referred to as
`AUDA’) against the same judgment passed in same cases alongwith
Special Civil Application Nos.4859, 5934, 7476 of 1998 and 4271 of
2000.
Civil Appeal No. 1864 of 2014 has been filed against the
impugned judgment and order dated 9.10.2009 passed by the High Court
of Gujarat at Ahmedabad in Special Civil Application No.10912 of 2009,
wherein the matter stood disposed of in terms of the subject matter in
appeals referred to above.
In Transferred Case (C) Nos.12-13 of 2010, Writ Petition
Nos.2879 and 2880 of 2009 had been filed by the tenure holders/
petitioners before the High Court of Gujarat and as the same factual
and legal issues are involved therein, the petitions stood transferred
to this court.
2. As similar factual and legal issues are involved in all the
cases for convenience T.P. (C) Nos. 12-13 of 2010 and Civil Appeal
Nos. 1542-44 of 2001 are taken to be the leading cases.
All these matters relate to the validity and issues of
interpretation of Section 40(3)(jj) of the Act 1976 and application
of certain statutory provisions of the Gujarat Town Planning and Urban
Development Rules, 1979 (hereinafter referred to as the ‘Rules 1979’).
The basic question that has been raised on behalf of the tenure-
holders (Association of land owners) is that whether the provisions
contained in Sections 40(3)(jj) of the Act 1976 are ultra-vires of
Articles 14, 19 and 300-A of the Constitution of India, 1950
(hereinafter referred to as the ‘Constitution’) and have also
challenged the action on the part of the Municipal Corporations
(Ahmedabad and Surat) for declaring the intention to frame town
planning schemes by issuing notifications, and further to hold that
the action of the Municipal Corporations to take away land of the
tenure-holders to the extent of 50% without paying any compensation
as ultra-vires and further challenged the respective resolutions of
the State Government in this regard.
The main contention of the respondents before the High Court was
that by way of the impugned legislation, the appellants have designed
a circuitous method to acquire land without paying any amount of
compensation. The ancillary ground urged is that the land which was
not acquired on payment of compensation under Section 20 of the Act
1976 cannot again be acquired indirectly and without payment of
compensation by introducing the impugned legislation enabling
Authority to prepare a town planning scheme and reserve the land to
the extent of specified percentage for public purposes like roads,
parks, play grounds, gardens and open spaces. Further, as per Section
40(3)(jj)(a)(iv) of the Act, 1976 the sale of land by the Appropriate
Authority for raising money for the purpose of providing
infrastructural facilities is beyond legislative competence being
outside the purview of Entry 18 of List-II and Entry 20 of the
concurrent list contained in 7th Schedule to the Constitution.
Moreover, compensation payable under Section 82 of the Act, 1976 in
respect of property or right injuriously affected by the scheme, on
the basis of market value calculated on the date of issue of intention
to frame a scheme, is not an adequate compensation. Further, it was
not justified under the town planning scheme or the urban development
to permit acquisition of certain percentage of properties of citizens
for its disposal in the hands of public authorities for the purpose of
raising its fund, even to be used for further development. Under the
Act 1976, Section 40(3)(j) as it originally stood, provided for
reserving only 10 per cent in the town planning scheme for providing
housing accommodation to the members of the weaker sections.
Therefore, the amendment by which the said area has been increased
from 10% to 15% is not only unwarranted but also illegal.
3. Facts and circumstances giving rise to these matters are as
under:
A. In 1963, Ahmedabad Municipal Corporation (hereinafter referred
to as the ‘AMC’) prepared and submitted a development plan under the
Bombay Town Planning Act, 1964 (hereinafter referred to as “Bombay
Act”) whereby the lands of the respondents known as the ‘green belt’
were kept for open space and recreation. On 21.8.1965, the State
Government sanctioned the development plan which came into force on
1.10.1965.
B. AMC prepared its revised development plan and published it on
15.1.1976 whereby lands of the respondents were reserved for “public
housing”.
C. The Bombay Act was replaced by the Act 1976 under which AUDA was
alone competent to draft development plan.
D. The State Government sanctioned the development plan on
2.11.1987 which came into force on 3.12.1987 whereby the area known as
‘green belt’ was reserved for “public housing for different government
organizations”.
E. The AUDA prepared draft revised development plan which was
published on 29.11.1997. The land reserved for “public housing for
different government organizations” was de-reserved and put under the
category as “restricted residential utility services and other uses
zones”.
F. The AUDA in exercise of the powers under Section 21 of the Act
1976 came out with a draft revised development plan in the year 1998.
G. The respondents herein filed a Writ Petition before the Gujarat
High Court challenging the draft revised development plan and for
direction to the appellants herein to acquire their lands as per the
plan of 1987 within a period of 6 months failing which the plan would
lapse.
H. The Act 1976 was amended on 1.5.1999 and Section 40(3)(jj) was
inserted. The writ petition was amended and the vires of Sections 12
and 40(3)(jj) of the Act 1976 were also challenged.
I. The AUDA vide its resolution dated 5.5.1999 approved the
proposed revised development plan. Declarations were made in the year
2000 for making town planning schemes covering “restricted residential
utility services and other uses zones”.
J. The writ petition was partly allowed by the High Court vide
impugned judgment and order dated 24.11.2000.
Hence, these appeals.
4. We have heard S/Shri C.A. Sundaram, Shirish H. Sanjanwala,
Suresh Shelat, Huzefa Ahmadi, learned senior counsel for the tenure-
holders or association of farmers and S/Shri Harish N. Salve, T.R.
Andhyarujina, learned senior counsel and Preetesh Kapur, learned
counsel for the State and statutory authorities.
5. All the submissions advanced by the counsel for the respective
parties are the same which had been agitated before the High Court and
reference thereof has already been made. Learned counsel appearing
for the tenure-holders have submitted that the judgment of the High
Court as far as the validity of the statutory provision is concerned,
does not require any interference whatsoever but earmarking of the
land to the extent of 50% without paying any compensation amounts to
expropriation and in all circumstances percentage fixed by the
statutory provisions is excessive.
6. On the contrary, learned counsel appearing for the state and
statutory authorities have submitted that the judgments impugned have
made the scheme unworkable as one tenure holder may get all
infrastructure facilities while the adjacent neighbour may not get any
facility at all. The area which can be taken away by the authority for
sale to the extent of 15% relates to the total area covered by the
scheme and not from each and every plot.
7. In order to properly understand the dispute herein, reference
has to be made to various provisions of the Act 1976. The Preamble of
the Act 1976 indicates that the purpose of the legislation is to
consolidate and amend the law relating to the making and execution of
development plans and town planning schemes in the State of Gujarat.
Section 12 of the Act 1976 provides for proposals and reservations to
be made in the development plan for the approval of the State
Government.
8. Clause (x) of Section 2 of the Act 1976 defines “development
plan” while clause (xxvi) thereof defines “scheme”.
Section 9 of the Act 1976 provides that the Development
Authority shall prepare and submit the development plan to the State
Government for the whole or any part of the development area in
accordance with the provisions of this Act. Section 10 thereof
requires that a copy of draft development plan is to be kept open for
public inspection.
Section 12 provides for the contents of draft development plan
generally providing the manner in which the use of land in the area
covered by it shall be regulated and also indicating the manner in
which the development therein shall be carried out. In particular, it
shall provide, so far as may be necessary, proposal for designating
the use of the land for residential, industrial, commercial,
agricultural and recreational purposes; for the reservation of land
for public purposes, such as schools, college and other educational
institutions, medical and public health institutions; proposals for
designation of areas for zoological gardens, green belts, natural
reserves and sanctuaries; transport and communications, such as roads,
highways, parkways, railways, waterways, canals and airport, including
their extension and development; proposals for water supply, drainage,
sewage disposal, other public utility amenities and service including
supply of electricity and gas; reservation of land for community
facilities and services, etc.
Section 20 of the Act reads as under:
“?(1) The area development authority or any other authority for
whose purpose land is designated in the final development plan
for any purpose specified in clause (b), clause (d), clause (f),
Clause (k), clause (n) or clause (0) of sub-section (2) of
section 12, may acquire the land either by agreement or under
the provisions of the land Acquisition Act, 1894.
(2) If the land referred to in sub-section (1) is not acquired
by agreement within a period of ten years from the date of the
coming into force of the final development plan or if
proceedings under the Land Acquisition Act,1894 (I of 1894), are
not commenced within such period, the owner or any person
interested in the land may serve a notice on the authority
concerned requiring it to acquire the land and if within six
months from the date of service of such notice the land is not
acquired or no steps are commenced for its acquisitions, the
designation of the land as aforesaid shall be deemed to have
lapsed”.
Section 40(3) (j) & (jj)(a) of the Act reads as under:
“(j) the reservation of land to the extent of ten percent; or
such percentage as near thereto as possible of the total area
covered under the scheme for the purpose of providing housing
accommodation to the members of socially and economically
backward classes of people.
(jj) (a) the allotment of land from the total area covered under
the scheme, to the extent of:
(i) Fifteen percent for roads;
(ii) Five percent for parks, playgrounds, garden and open space
(iii) Five percent for social infrastructure such as schools,
dispensary, fire brigade, public utility place as earmarked in
the Draft Town Planning Scheme.
(iv) Fifteen percent for sale by appropriate Authority for
residential, commercial or industrial use depending upon the
nature of development.
Provided that the percentage of the allotment of land specified
in paragraphs (i) to (iii) may be altered depending upon the
nature of development and for the reasons to be recorded in
writing;
(b) the proceeds from the Sale of land referred to in para (iv)
of sub-clause (a) shall be used for the purpose of providing
infrastructural facilities in the area covered under the scheme.
(c) The land allotted for the purposes referred to in paragraphs
(ii) and (iii) of sub-clause (a) shall not be changed by
variation of schemes for the purpose other than public purpose.”
Section 48 of the Act 1976 defines the power of the State
Government to sanction draft scheme. Further, Section 48-A reads as
under:
“(1) Where a draft scheme has been sanctioned by the State
Government under sub-section (2) of section 48, (hereinafter in
this section, referred to as 'the sanctioned draft scheme'), all
lands required by the appropriate authority for the purposes
specified in clause (c), (f), (g), or (h) of sub-section (3) of
section 40 shall vest absolutely in the appropriate authority
free from all encumbrances.
(2) Nothing in sub-section (1) shall affect any right of the
owner of the land vesting in the appropriate authority under
that sub-section.”
Section 77 of the Act 1976 deals with cost of scheme, which also
includes all sums payable as compensation for land reserved or
designated for any public purpose or for the purposes of appropriate
authority which is solely beneficial to the owners of the land or
residents within the area of the scheme and also includes portion of
the sums payable as compensation for land reserved or designated for
any public purpose. It also includes legal expenses incurred by the
appropriate authority in making and in the execution of the scheme.
Clause (f) thereof reads as under:
(f) any amount by which the total amount of the values of the
original plots exceeds the total amount of the values of the
plots included in the final scheme, each of such plots being
estimated at its market value at the date of the declaration of
intention to make a scheme, with all the buildings and works
thereon at the said date and without reference to improvements
contemplated in the scheme other than improvements due to
alteration of its boundaries.
Clause (2) of Section 77 reads:
(2) If in any case the total amount of the values of the plots
included in the final scheme exceeds the total amount of the
values of the original plots, each of such plots being estimated
in the manner provided in clause (f) of sub-section (1), then
the amount of such excess shall be deducted in arriving at the
costs of the scheme as defined in sub-section (1).
Section 79 of the Act 1976 provides for contribution towards
costs of scheme.
Section 82 of the Act 1976 reads as under:
Compensation in respect of property or right injuriously
affected by scheme.
The owner of any property or right which is injuriously affected
by the making of a town planning scheme shall, if he makes a
claim before the Town Planning Officer within the prescribed
time, be entitled to be compensated in respect thereof by the
appropriate authority or by any person benefited or partly by
the appropriate authority and partly by such person as the Town
Planning Officer may in each case determine:
Provided that the value of such property or rights shall be
deemed to be its market value at the date of the declaration of
intention to make a scheme or the date of the notification
issued by the State Government under sub-section (1) of section
43 without reference to improvements contemplated in the scheme,
as the case may be.
Section 84 thereof deals with the cases in which amount payable
to owners exceeds amount due from him. As per the provisions of
Section 84, if the owner of an original plot is not provided with a
plot in the preliminary scheme or if the contribution to be levied
from him under Section 79 is less than the total amount to be deducted
therefrom, the net amount of his loss, shall be payable to him.
Section 85 of the Act 1976 deals with the cases in which the
value of the developed plot is less than the amount payable by the
owners. In case the amount which would be due to the appropriate
authority under the Act from the owner of a plot to be included in the
final scheme exceeds the value of such plot estimated on the
assumption that till scheme has been completed, the owner of such plot
has to make payment to authority of the amount of such excess within
the prescribed period.
Sub-Section (2) of Section 85 provides that on meeting certain
legal requirements, the plot included in the final scheme “shall
vest absolutely in the appropriate authority free from all
encumbrances but subject to the provisions of the Act”.
9. Rule 22 of the Rules 1979 reads as:
(1) The compensation payable under section 45 shall be
difference between the value of the property (inclusive of
structure) on the basis of the existing use and that on the
basis of permitted use both values being determined as on the
date of declaration of intention to prepare the scheme.
(2) In making the valuation on the basis of permitted use,
allowance shall be made for the expenses that may have to be
incurred in so converting the existing structures as to make
them suitable for permitted use.
(3) In case provision is made for continuance of the existing
use for a number of years taking into consideration the future
life of the structure the compensation payable shall be limited
to present value of the standing structure less value of
materials at the end of such period.
(4) X X X
10. Form H attached to the Rules 1979 is a Form to be filled by the
Town Planning Officer while preparing the draft planning scheme and it
clearly makes it evident that “any person who is injuriously affected
by the above town planning scheme, is entitled to claim the damages in
accordance with Section 82 of the Act 1976”.
11. Form K attached to the said Rules 1979 is also to be filled up
and sent by the Town Planning Officer while preparing the final draft
planning scheme as required under Section 52(3) and it puts him under
an obligation to determine and record as under:
“(i) The compensation payable to you under Section 80
(ii) Amount payable by you under Section 80
(iii) Estimated amount of the increment under Section 78
(iv) Amount of incremental contribution under Section 79
(v) The compensation under Section 82
(vi) Net amount of contribution
(vii) Net amount payable to you”
12. The aforesaid provisions read conjointly gives a clear picture
that the scheme is just like the consolidation proceedings as the
land, belonging to various persons, covered by the scheme first be put
into a pool and then the land be allocated for different purposes and,
in such a way, after having all deductions for the purpose of either
by way of acquisition of land under the Land Acquisition Act 1894
(hereinafter referred to as `Act 1894’) or the land taken under the
provisions of Section 40(3)(jj)(a) of the Act 1976, the loss and
profit of individual tenure holder is to be calculated. After
assessing the market value on the date of declaration of the intention
to frame a scheme and the value of the property after making all these
deductions, adjustments, improvements etc. and, therefore, if a person
has suffered any loss, his loss is to be made good from the funds of
the scheme and if a person has gained an amount equivalent to net
gain, is to be recovered from him.
13. The main issue involved herein is whether after the lapse of the
period for reservation as per Section 20(2) of the Act 1976, can the
said land be again acquired by resorting to the provisions of Section
40 of the Act 1976. In the present case, the State Government had
sanctioned a development plan on 2.11.1987 which came into force on
3.12.1987 wherein the area known as the “green belt” was reserved for
“public housing for different government organizations”. The said
area was deemed to be de-reserved by virtue of the provisions of
Section 20 after the expiry of a period of 10 years. Despite the
respondents having served the six months’ notice, the said land was
still not acquired by the government. It has been submitted on behalf
of the respondents that having regard to the provisions of Section 20
read with Section 40 of the Act 1976, the said land could not be re-
acquired/re-designated by framing a town planning scheme. Section 48-
A of the Act 1976 provides for vesting of land in the appropriate
authority. However, the said section does not cover the requirement
under Section 40(3)(jj)(a) of the Act. It has been further argued
that the other relevant provision is Section 107 of the Act 1976 which
provides that land needed for a town planning scheme shall be deemed
to be land needed for a public purpose within the meaning of the Act
1894. Therefore, without invoking the provisions of the Act 1894, the
said land could not be re-notified under Section 40 of the Act 1976.
14. After considering all the submissions of the parties, the High
Court has recorded the following conclusions:
I) The contention that prescribing of various percentage under
Section 40(3)(jj)(a) of the Act 1976 amounts to excessive legislation
is rejected. The unamended clause (jj) of Section 40 provided for
allotment of 10% of the land in the scheme or such percentage as near
thereto as possible for the purpose of sale for residential,
commercial and industrial use. The present provision as exists today
has now specified various percentage of the land to be set aside for
specific purpose, i.e. 15% for roads, 5% for parks, playgrounds etc.,
5% for social infrastructure and 15% for sale for providing
infrastructural facilities. There has only been an increase of 5% in
the percentage of land that could be sold of by the appropriate
authority as compared to an increase of 30% as contended by the
respondents. The current provision now only specifies specific
percentage of the land to be set aside for the specified purpose which
was already provided for in the Act 1976 and there is no further
reservation that is provided.
II) Entry 18 of List II of the Constitution provides for legislative
competence with respect to land i.e. rights in or over the land
including land improvement. Entry 20 of Concurrent List of the
Constitution deals with economic and social planning. Therefore, the
State Legislature was well within its competence to specify the
percentage of areas to be demarcated/used for the specified purpose.
Further, a mere increase of percentage of land to be demarcated for a
specific purpose can in no way said to be an excessive legislation.
Section 91 of the Act 1976 provides for establishment of funds for
utilization by the appropriate authority in order to meet expenditures
for the development of land, administration of the Act and such other
purpose as the State Government may direct. With the increase in cost
of construction, the requisite funds for development would naturally
increase and therefore, there does not seem to be any impediment in
prescribing a higher percentage of land that is to be sold for such
purposes.
III) The respondents` claim to the benefit under Article 300-A of the
Constitution which provides for a constitutional right to property is
also stood rejected. Each and every claim to property cannot be
termed as a right to property and any legislation prescribing a
reasonable restriction over the same is a valid exception to the said
Article.
IV) Even the contention of the respondents that the compensation
prescribed under Section 82 of the Act 1976 was inadequate stands
rejected.
15. The aforesaid findings have been challenged by the
State/statutory authorities as well as by the Association of land
owners to the extent the findings have been recorded against them.
16. It is in this backdrop that we have to test the submissions
advanced on behalf of the parties in the light of law declared by this
Court earlier on the issues involved herein.
In Jilubhai Nanbhai Khachar etc.etc. v. State of Gujarat & Anr.,
etc.etc., AIR 1995 SC 142, this Court held:
“…Though Articles 31 and 19(1)(f) of the Constitution
accorded to ‘property’ the status as a fundamental right, there
emerged conflict between the animation of the Founding Fathers
and the judicial interpretation on the word ‘compensation’ when
private property was expropriated to subserve common good or to
prevent common detriment…..Concomitantly legislature has power
to acquire the property of private person exercising the power
of eminent domain by a law for public purpose. The law may fix
an amount or which may be determined in accordance with such
principles as may be laid therein and given in such manner as
may be specified in such law. However, such law shall not be
questioned on the grounds that the amount so fixed or amount
determined is not adequate. The amount fixed must not be
illusory. The principles laid to determine the amount must be
relevant to the determination of the amount….. We are conscious
that Parliament omitted Article 31(2) altogether. However when
the State exercises its power of eminent domain and acquires the
property of private person or deprives him of his property for
public purpose, concomitantly fixation of the amount or its
determination be must in accordance with such principles as laid
therein and the amount given in such manner as may be specified
in such a law…..”
17. In Ashutosh Gupta v. State of Rajasthan & Ors., AIR 2002 SC
1533, this Court held:
“There must be proper pleadings and averments in the
substantive petition before the question of denial of equal
protection of infringement of fundamental right can be decided.
There is always a presumption in favour of the constitutionality
of enactment and the burden is upon him who attacks it to show
that there has been a clear transgression of the constitutional
principles. The presumption of constitutionality stems from the
wide power of classification which the legislature must, of
necessity possess in making laws operating differently as
regards different groups of persons in order to give effect to
policies. It must be presumed that the legislature understands
and correctly appreciates the need of its own people, that its
laws are directed to problems made manifest by experience.”
18. In Prakash Amichand Shah v. State of Gujarat & Ors., AIR 1986 SC
468, this Court relied upon the judgment of this Court in Zandu
Pharmaceutical Works Ltd. v. G.J. Desai, Civil Appeal No. 1034 of 1967
decided on August 28, 1969 dealing with the very provisions of the
Act, wherein this Court had observed :
“When the Town Planning Scheme comes into operation the land
needed by a local authority vests by virtue of Section 53(a) and
that vesting for purposes of the guarantee under Article 31(2)
is deemed compulsory acquisition for a public purpose. To lands
which are subject to the scheme, the provisions of Sections 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 Government, and the
other in which the statutory vesting of land operates as
acquisition for the purpose of town planning by the local
authority. The State Government can acquire the land under the
Land Acquisition Act, and the local 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. Hence the provisions of
Sections 53 and 67 are not invalid on the ground that they deny
equal protection of the laws or equality before the laws.”
(Emphasis added)
19. In Prakash Amichand Shah (Supra) this Court held:
“…..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 single person or a few persons. It 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. 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 achieved. While 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 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 charges
to be levied and contribution to be made by the local authority
etc. It is only after all that exercise is done the 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 Sections
67 to 71 of the Act for determining compensation payable to the
owners of original plots who do not get the reconstituted plots
it cannot be said that there has been any violation of Article
14 of the Constitution. It is seen that even there the market
value of the land taken is not lost sight of. The effect of the
provisions in Sections 67 to 71 of the Act has been explained by
this Court in Maneklal Chhotalal v. M.G. Makwana, AIR 1967 SC
1373, and in State of Gujarat v. Shantilal Mangaldas, AIR 1969
SC 634.
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 Shantilal Mangaldas
(supra). With great respect, we approve of the decision of the
court in this case…….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 time when the Act was enacted or
at any time thereafter.”
(Emphasis added)
20. This Court in the said case also explained the decision of this
Court in Nagpur Improvement Trust & Anr. v. Vithal Rao & Ors., AIR
1973 SC 689, wherein the High Court had held that as the acquisition
was by the State, in all cases where the property was required to be
acquired for the purposes of a scheme framed by the Trust and such
being the position, it was not open to the State to acquire any
property under the provisions of the Act 1894 as amended by the
Improvement Trust Act without paying compensation on the same
parameters and the solatium also. It was, therefore, held by the High
Court that the paras 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 Act 1894 were ultra vires as violating the guarantee of
Article 14 of the Constitution.
This Court further held:
“…..The development and planning carried out under the Act is
primarily for the benefit of public. The local authority is
under an obligation to function according to the Act. The local
authority has to bear a part of the expenses of development. It
is in one sense a package deal. The proceedings relating to the
scheme are not like acquisition proceedings under the Land
Acquisition Act, 1894. Nor are the provisions of the Land
Acquisition Act, 1894 made applicable either without or with
modifications as in the case of the Nagpur Improvement Trust
Act, 1936. We do not understand the decision in Nagpur
Improvement Trust case (supra) as laying down generally that
wherever land is taken away by the government under a separate
statute compensation should be paid under the Land Acquisition
Act, 1894 only and if there is any difference between the
compensation payable under the Land Acquisition Act, 1894 and
the compensation payable under the statute concerned the
acquisition under the statute would be discriminatory…..”
21. In Bhavnagar University v. Palitana Sugar Mill Pvt. Ltd. & Ors.,
AIR 2003 SC 511, this Court held:
“37. The words “so far as may be” indicate the intention
of the Legislature to the effect that by providing revision of
final development plan from time to time and at least once in
ten years, only the procedure or preparation thereof as provided
therein, is required to be followed. Such procedural
requirements must be followed so far as it is reasonably
possible. Section 21 of the Act, in our opinion, does not and
cannot mean that the substantial right conferred upon the owner
of the land or the person interested therein shall be taken
away. It is not and cannot be the intention of the Legislature
that which is given by one hand should be taken away by the
other.
38. Section 21 does not envisage that despite the fact that
in terms of sub-section (2) of S. 20, the designation of land
shall lapse, the same, only because a draft revised plan is
made, would automatically give rise to revival thereof. Section
20 does not manifest a legislative intent to curtail or take
away the right acquired by a land owner under S. 22 of getting
the land defreezed. In the event the submission of the learned
Solicitor General is accepted the same would completely render
the provisions of S. 20(2) otiose and redundant.
39. Sub-section (1) of S. 20, as noticed hereinbefore,
provides for an enabling provision in terms whereof the State
become entitled to acquire the land either by agreement or
taking recourse to the provisions of the Land Acquisition Act.
If by reason of a revised plan, any other area is sought to be
brought within the purview of the development plan, evidently in
relation thereto the State will be entitled to exercise its
jurisdiction under sub-section (1) of S. 20 but it will bear
repetition to state that the same would not confer any other or
further power upon the State to get the duration of designation
of land, which has been lapsed, extended. What is contemplated
under S. 21 is to meet the changed situation and contingencies
which might not have been contemplated while preparing the first
final development plan. The power of the State enumerated under
sub-section (1) of S. 20 does not become ipso facto applicable
in the event of issuance of a revised plan as the said provision
has been specifically mentioned therein so that the State may
use the same power in a changed situation.”
(See also: Chairman, Indore Vikas Pradhikaran v. M/s. Pure Industrial
Cock & Chem. Ltd. & Ors., AIR 2007 SC 2458; and Shrirampur Municipal
Council, Shrirampur v. Satyabhamabai Bhimaji Dawkher & Ors., (2013) 5
SCC 627)
22. In view of the provisions of the Act 1976 and particularly
Section 40 (3)(jj)(a)(iv), the question does arise as to whether
selling of land provided therein maximum to the extent of 15% is
illegal; and whether on lapsing of designation under the development
plan under Section 20, can there be any fresh reservation/designation
under the town planning scheme for the same land which is designated
and whether such land if acquired, can only be acquired independently
under the Act 1894.
23. As we have explained hereinabove that the town planning scheme
provides for pooling the entire land covered by the scheme and
thereafter re-shuffling and reconstituting of plots, the market value
of the original plots and final plots is to be assessed and authority
has to determine as to whether a land owner has suffered some injury
or has gained from such process. Re-constitution of plots is
permissible as provided under the scheme of the Act as is evident from
cogent reading of Section 45(2)(a)(b)(c) and Section 52(1)(iii) in
accordance with Section 81 of the Act 1976. By re-constitution of the
plots, if anybody suffers injury, the statutory provisions provide for
compensation under Section 67(b) read with Section 80 of the Act 1976.
By this re-constitution and readjustment of plots, there is no
vesting of land in the local authority and therefore, the Act provides
for payment of non-monetary compensation and such a mode has been
approved by the Constitution Bench of this Court in Shantilal
Mangaldas (supra), wherein this Court has held that when the scheme
comes into force all rights in the original plots are extinguished,
and simultaneously therewith ownership springs in the re-constituted
plots. It does not predicate ownership of the plots in the local
authority, and no process - actual or notional - of transfer is
contemplated in that appropriation. Under clause (a) of Section 53,
vesting of land in local authority takes place only on commencement of
scheme into force. The concept that lands vest in a local authority
when the intention to make a scheme is notified, is against the plain
intendment of the Act. Even steps taken by the State do not involve
application of the doctrine of eminent domain.
24. In Maneklal Chhotalal (supra), re-adjustment of plots has been
approved by this Court observing as under:
“Even if, an original plot owner is allotted smaller extent of
land in the final plot and has to pay certain amount as
contribution, having regard to the scheme and its objects, this
is inevitable and is not deprivation.”
25. Thus, it is evident that in case a land owner is not provided
with a final plot, amount of his loss would be payable to him as
required under Section 84 of the Act 1976. (It is agreed by learned
counsel for the parties that there is not a single instance herein
where the land owner is deprived of his land completely and has not
been given a re-constituted plot). However, it is suggested by learned
counsel for the State that in such an event, such tenure holder would
be entitled for market value of the land to be determined under the
Act 1976 and the provisions of the Act 1894 would not be applicable in
view of the judgment of this Court in Prakash Amichand Shah (supra).
Be that as it may, as there is no such instance where the land owner
is deprived completely of his land and does not get reconstituted
plots, we do not want to proceed further with an academic question.
26. In Shantilal Mangaldas (supra), this Court held:
“The provisions relating to payment of compensation and recovery
of contributions are vital to the successful implementation of
the scheme. The owner of the re-constituted plot who gets the
benefit of the scheme must make contribution towards the
expenses of the scheme; the owner who loses his property must
similarly be compensated.”
The aforesaid judgment is still a good law on this aspect.
27. In view of the commencement of the 44th Amendment of the
Constitution w.e.f. 20.6.1979, whereby Articles 31(2) and 19(1)(g)
have been deleted, we do not propose to go into the enquiry and
consider the judgments in State of West Bengal v. Mrs. Bella Banerjee
& Ors., AIR 1954 SC 170; and Rustom Cavasjee Cooper v. Union of India,
AIR 1970 SC 564. More so, the judgments in P. Vajravelu Mudaliar v.
The Special Deputy Collector for Land Acquisition, West Madras & Anr.,
AIR 1965 SC 1017; and Union of India v. The Metal Corporation of India
& Anr., AIR 1967 SC 637, have been over-ruled by this Court in
subsequent judgment. (See: Ishwari Khetan Sugar Mills (P) Ltd.
etc.etc. v. The State of U.P. & Ors., AIR 1980 SC 1955).
Thus, there is no fundamental right to hold property. But the
right to compensation on compulsory acquisition is still available
under the second proviso to Article 31A subject to the limitation as
specified therein. However, we need not elaborate the same as the said
averment is not argued before us.
28. Article 300-A of the Constitution though creates a human right
being a constitutional provision, but is not a fundamental right.
Article 300-A provides that no person can be deprived of his property
except by authority of law. The Town Planning Act is definitely an
authority of law by which a person is deprived of his property if we
assume that the town planning scheme deprives a person of his
property, though it is not so in view of the judgments of this Court
in Shantilal Mangaldas (supra) and Prakash Amichand Shah (supra).
29. So far as the question that upon lapsing of designation under
the development plan under Section 20 there cannot be any
reservation/designation under a town planning scheme for the same
land, is to be understood reading the provisions of the Act 1976
cogently. The development plan is prepared under Chapter II and town
planning scheme is made under Chapter V. Therefore, they are two
different things. The development plan is a macro plan for a vast area
wherein a town planning scheme is minor scheme within the town.
Section 40(1) simply provides that in the making of town planning
scheme the authority has to have regard to the final development of
the plan, if any. Thus, the words “having regard to the development
plan” in Section 40 means that town planning scheme cannot disregard
or ignore the designation/reservation made in the development plan.
Under Section 20 of the Act, it is provided that if an
acquisition does not take place by agreement or under the Act 1894, in
respect of certain lands designated in the final development plan for
the six purposes mentioned in sub-section (2) of Section 12 within a
period of 10 years from the coming into force of the final development
plan, the designation of the land under these clauses shall be deemed
to have lapsed. Therefore, the provision for lapsing of the
designation of the land does not take it out of the purview of town
planning scheme and such a provision does not prevent the making of a
provision in a town planning scheme for any reservation specified in
Section 40(3). If the judgment of the High Court on this issue is
approved, the town planning scheme would be impermissible. Thus, even
after the lapse of designation of the land under Section 20, a town
planning scheme will have to include the land for roads, open spaces,
gardens under Section 40(3)(e), reservation of land for accommodation
to members of socially and economically backward classes of people
under Clause 40(3)(j) but not for items mentioned in Section
40(3)(jj)(a) would lead to absurdity.
30. Section 40(3)(jj) only regulates discretion of the Area
Development Authority (ADA) while making the draft development plan.
The land acquired under Section 20 read with Section 12 of the Act
1976 would need infrastructural facility and the original plot which
is acquired would require to be re-constituted as a final plot and to
make a building site. The settled legal proposition in respect of
interpretation of statute is that the provisions of the Act have to be
read as a whole and therefore the provision of Section
40(3)(jj)(a)(iv) for sale has to be read inconsonance/conjointly with
the other statutory provisions and not in isolation. The sale upto the
extent of 15% is from the total area covered under the scheme and not
in respect of every plot of land. In order to generate financial
resources for the development of infrastructure, the saleable plot for
residential, commercial and industrial use are allotted by the
appropriate authority. Similarly, while re-constituting the plots,
final plot is offered to the original owner for its beneficial use.
31. The High Court has committed an error interpreting the
provisions under challenge as it failed to appreciate that the
provisions of the Town Planning Scheme in Chapter-V, no where indicate
that the lands under Section 20 cannot be subject matter of the Town
Planning Scheme. The interpretation given by the High Court
tantamounts to rewriting the provisions of the Act 1976 as the High
Court has held that the land under Section 20 cannot be the subject of
Section 40(3)(jj). Section 40(3)(jj)(a) only illustrates and provides
the guidance to the authority.
32. So far as the observation made by this Court in Bhavnagar
University (supra) is concerned, the court held that the land which
has been de-reserved under Section 20 cannot be subject matter of
revised development plan under Section 20(1). However, the issue
involved in that case was in respect of applicability of Section 40
while framing the scheme, and this court had not dealt with the
provisions of the scheme under Chapter-V of the Act.
33. A Constitution Bench of this Court in K.L. Gupta & Ors. v. The
Municipal Corporation of Greater Bombay & Ors., AIR 1968 SC 303 had
examined the validity of the provisions of Sections 9, 10, 11, 12 and
13 of the Bombay Town Planning Act, 1954 (hereinafter referred to as
the `Act 1954’) and held as under:
“With regard to the complaint that the period of ten years
fixed under s. 11(3) of the Act was too long, and an
unreasonable restriction on the rights of a land owner to deal
with his land as he pleased, it is enough to say that in view of
the immensity of the task of the local authorities to find funds
for the acquisition of lands for public purposes, a period of
ten years was not too long.
…………..No one can be heard to say that local authority after
making up its mind to acquire land for a public purpose must do
so within as short a period of time as possible. It would not be
reasonable to place such a restriction on the power of the local
authority which is out to create better living conditions for
millions of people in a vast area. The finances of a local
authority are not unlimited nor have they the power to execute
all schemes of proper utilisation of land set apart for public
purposes as expeditiously as one would like. They can only do
this by proceeding with their scheme gradually, by improving
portions of the area at a time, obtaining money from persons
whose lands had been improved and augmenting the same with their
own resources so as to be able to take up the improvement work
with regard to another area marked out for development. The
period of ten years fixed at first cannot therefore be taken to
be the ultimate length of time within which they had to complete
their work. The legislature fixed upon this period as being a
reasonable one in the circumstances obtaining at the time when
the statute was enacted. We cannot further overlook the fact
that modifications to the final development plan were not beyond
the range of possibility. We cannot therefore hold that the
limit of time fixed under s. 4 read with s. 11(3) forms an
unreasonable restriction on the rights of a person to hold his
property.” (Emphasis
added)
34. In Shantilal Mangaldas (supra), a Constitution Bench of this
Court examined the scheme under the Act 1954 which was applicable
earlier to the State of Gujarat wherein with respect of the land
situated therein, the Borough Municipality of Ahmedabad declared its
intention of making a town planning scheme vide resolution dated
18.4.1927 under the Bombay Town Planning Act, 1915, wherein the High
Court of Gujarat had allowed the writ petition filed by the tenure-
holders. This Court reversed the said judgment observing as under:
“22. The following principles emerge from an analysis of
Clauses (2) and (2A): compulsory acquisition or requisition may
be made for a public purpose alone, and must be made by
authority of law. Law which deprives a person of property but
does not transfer ownership of the property or right to
possession of the property to the State or a corporation owned
or controlled by the State is not a law for compulsory
acquisition or requisition. The law, under the authority of
which property is compulsorily acquired or requisitioned, must
either fix the amount of compensation or specify the principles
on which, and the manner in which, the compensation is to be
determined and given. If these conditions are fulfilled the
validity of the law cannot be questioned on the plea that it
does not provide adequate compensation to the owner…………….
The first contention urged by Mr. Bindra cannot, therefore,
be accepted……….
The principal argument which found favour with the High Court
in holding Section 53 ultra vires is that when a plot is
reconstituted and out of that plot a smaller area is given to
the owner and the remaining area is utilised for public purpose,
the area so utilised vests in the local authority for a public
purpose, and since the Act does not provide for giving
compensation which is a just equivalent of the land expropriated
at the date of extinction of interest, the guaranteed right
under Article 31(2) is infringed…………….
There is no vesting of the original plots in the local
authority nor transfer of the rights of the local authority in
the reconstituted plots. A part or even the whole plot belonging
to an owner may go to form a reconstituted plot which may be
allotted to another person, or may be appropriated to public
purposes under the scheme. The source of the power to
appropriate the whole or a part of the original plot in forming
a reconstituted plot is statutory. It does not predicate
ownership of the plot in the local authority, and no process-
actual or notional-of transfer is contemplated in that
appropriation. The lands covered by the scheme are subjected by
the Act to the power of the local authority to readjust titles,
but no reconstituted plot vests at any stage in the local
authority unless it is needed for a purpose of the authority.
Even Under Clause (a) of Section 53 the vesting in a local
authority of land required by it is on the coming into force of
the scheme. The concept that lands vest in the local authority
when the intention to make a scheme is notified is against the
plain intendment of the Act…………….
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 for
determination of compensation to be given within the meaning of
Article 31(2) ………….
On the second branch of the argument it was urged that a
provision for giving the value of land, not on the date of
extinction of interest of the owner, but on the footing of the
value prevailing at the date of the declaration of the intention
to make a scheme, is not a provision for payment of
compensation……………
……………The method of determining compensation in respect of
lands which are subject to the town-planning schemes is
prescribed in the Town Planning Act. There is no option under
that Act to acquire the land either under the Land Acquisition
Act or under the Town Planning Act. Once the draft town-planning
scheme is sanctioned, the land becomes subject to the provisions
of the Town Planning Act, and the final town-planning scheme
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 purposes of a town-planning scheme cannot be acquired
otherwise than under the Act, for it is settled rule of
interpretation of statutes that when power is given under a
statute to do a certain thing in a certain way the thing must be
done in that way or not at all………………” (Emphasis added)
35. Thus, we do not find any force in the submissions made on behalf
of the tenure-holders for the simple reason that after the judgment in
Bhikhubhai Vithalbhai Patel v. State of Gujarat & Anr., AIR 2008 SC
1771, it was not permissible for the statutory authorities to bring
any scheme whatsoever for the reason that as per that judgment also,
land could be used for residential purposes and the authority’s draft
scheme also provides for residential purposes. That does not mean that
it would be used exclusively for residential purpose and it cannot
have even small marketing place or a small dispensary.
36. Section 40 of the Act 1976 contains the words “regard being had”
and thus it suggests that while the condition specified therein are to
be taken into consideration they are only a guide and not fetters upon
the exercise of power.
37. It is a settled legal proposition that hardship of an individual
cannot be a ground to strike down a statutory provision for the reason
that a result flowing from a statutory provision is never an evil. It
is the duty of the court to give full effect to the statutory
provisions under all circumstances. Merely because a person suffers
from hardship cannot be a ground for not giving effective and
grammatical meaning to every word of the provisions if the language
used therein is unequivocal. (See: The Martin Burn Ltd. v. The
Corporation of Calcutta, AIR 1966 SC 529; Tata Power Company Ltd. v.
Reliance Energy Limited & Ors., (2009) 16 SCC 659; and Rohitash Kumar
& Ors. v. Om Prakash Sharma & Ors., AIR 2013 SC 30).
38. The interpretation given by the High Court runs contrary to the
intention under the scheme and may frustrate the scheme itself as in
the pockets left out in the scheme the basic amenities may not be
available. The result would be that a portion of the land would be
left without infrastructural facility while the adjacent area
belonging to neighbours would be provided infrastructural facility.
39. In view thereof, we are of the considered opinion that the High
Court has recorded an erroneous finding that if a designation lapses
under Section 20, the land cannot be again reserved in a town planning
scheme, and further if the land cannot be acquired under Section 20
for want of capacity to pay any compensation under the Act 1894, it
cannot be allowed to be acquired indirectly on lesser payment of
compensation as provided under the Act 1976. Thus, the judgment of the
High Court to that extent is not sustainable in the eyes of law.
40. In the transferred cases, the resolution dated 16.5.2008
providing the extent of taking over the land to 50% has been
challenged on the ground that in other similar schemes in Vadodara,
the maximum land taken by the State/Authority had been only upto 30%.
Therefore, the deduction to the extent of 50% of the total land of a
tenure-holder is illegal acquisition or amounts to expropriation and
not acquisition. It is further submitted by Shri Huzefa Ahmadi,
learned senior counsel appearing for the petitioners in transferred
cases that in case of non-agricultural land, the deduction may be upto
20% and for agricultural land it may be upto 30%. Shri Ahmadi has
placed a very heavy reliance on a chart filed by him showing that in
other similar cases, a very lesser area had been deducted by the
State/Authority and in the instant case 15% area had been proposed for
sale without drawing the balance sheet. In such a fact-situation, the
cases have to be allowed.
41. On the contrary, Shri Preetesh Kapur appearing for the
respondents has submitted that it is pre-mature to challenge the
resolution dated 16.5.2008 as it is a first step to initiate the
proceedings under the Act and the Rules. The draft scheme issued under
Section 48 of the Act 1976 empowers the State Government to sanction a
draft scheme and clause (3) thereof provides that if the State
Government sanctions the scheme, a notification shall be issued
stating at what place and time the draft scheme shall be open for the
inspection of the public after which the procedure prescribed under
Sections 50 and 51 would be followed. At that stage Rule 26 which
provides that for the purpose of preparing the preliminary scheme and
final scheme, the Town Planning Officer shall give notice in Form ‘H’
of the date on which he will commence his duties and shall state the
time as provided in Rule 37 within which the owner of any property or
right which is injuriously affected by the making of a scheme would be
entitled under Section 82 to make a claim before him. Such notice
should be published in the official gazette also and the law further
requires the filing of the objections and the personal hearing to such
person who would be adversely affected.
42. In the instant Transferred Case, as the authority is only
dealing with the issues at a draft stage and the applicants have ample
opportunity to file their objections and are entitled to personal
hearing as required under Rule 26 clause (4), the matter can be
adjudicated before the statutory authority.
Therefore, in view of the above, we are of the considered
opinion that the apprehensions raised by the applicants at this stage
are pre-mature. Admittedly, the applicants have filed their
objections raising their grievance and they had also been given the
personal hearing by the statutory authorities on all permissible,
factual and legal grounds. The learned counsel appearing for the
State/Authorities has submitted that in case the applicants are not
satisfied and make fresh objections within 30 days from today, they
would be provided a fresh opportunity of hearing. However, it is too
early to anticipate as what order would be passed on their objections.
In case, they are aggrieved by the order passed after hearing their
objections, they have a statutory right to approach the appropriate
forum challenging the same.
43. In view of the above, we do not think it proper to decide the
cases on merits at such a premature stage. More so, there is no
reason to believe that the authorities would act arbitrarily and would
not take into consideration the grievance raised by the applicants.
44. In view of the above, Civil Appeal Nos.1542-44 of 2001, 1545-50
of 2001 and 1551-56 of 2001 are allowed. The judgment impugned
therein are set aside to the extent hereinabove. Civil Appeal No.1864
of 2014 and Transferred Case (C) Nos.12-13 of 2010 are dismissed.
However, it is clarified that any observation made herein in the
transferred cases would not adversely affect either of the parties.
No order as to costs.
….....…….……………………..J.
(Dr. B.S. CHAUHAN)
.......……………………………J.
(J. CHELAMESWAR)
.......……………………………J.
New Delhi, (M.Y. EQBAL)
May 9, 2014
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