http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 27

PETITIONER:

PRAKASH AMICHAND SHAH

Vs.

RESPONDENT:

STATE OF GUJARAT & ORS.

DATE OF JUDGMENT20/12/1985

BENCH:

VENKATARAMIAH, E.S. (J)

BENCH:

VENKATARAMIAH, E.S. (J)

REDDY, O. CHINNAPPA (J)

ERADI, V. BALAKRISHNA (J)

MISRA, R.B. (J)

KHALID, V. (J)

CITATION:

1986 AIR 468 1985 SCR Supl. (3)1025

1986 SCC (1) 581 1985 SCALE (2)1437

CITATOR INFO :

RF 1986 SC1466 (11)

F 1987 SC 493 (3)

D 1989 SC1796 (8)

ACT:

Bombay Town Planning Act, 1954 Sections 32 & 53 -

Whether the Town Planning Scheme No. VIII (Umarwada)

published under the Act is violative of Articles 14, 19(1)

(f) and 31 of the Constitution of India.

Precedents, scope, nature and authority of - Duty of a

Constitution Bench to consider the effect of the precedent,

explained - The binding nature of Shantilal Mangaldas's

case.

Statutes - Act not providing for an appeal from some of

the decisions under a particular section while providing an

appeal against some other decisions under the very same

section Whether could be said to be discriminatory and

unconstitutional.

Town Planning Schemes under the Bombay Town Planning

Act of 1954 not providing for any solatium while such

solatium is available under the Land Acquisition Act -

Whether for that reason it could be said to be

discriminatory.

HEADNOTE:

Land admeasuring in all 49 acres 22 gunthas bearing

Survey Nos. 75, 81, 83, 84 and 86 situated at Surat City in

the State of Gujarat originally belonged to one Ladli Begum.

She granted a lease in respect of the said land in favour of

a company called Nawab of Belha Spinning, Weaving and

Manufacturing Mills, Ltd. under a document dated November

15, 1882 for a period of 99 years with effect from November

1, 1881 with a right for renewal for a further period of 99

years. the company which had taken the land on lease

executed a sub-lease in respect of 38 acres 2 gunthas out of

the entire plot of land on March 29, 1881 in favour of one

Dr. Nassurwanji N. Khambata for the residuary period of 99

years without the right of renewal. This sub-lease was to

expire on October 31, 1980. Under a document dated April 30,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 27

1928 Surat Parsi Panchayat Board acquired the lease in

respect of the entire 38 acres 2 gunthas, from a lady who

was the daughter of one Rustamji who had acquired the rights

of Dr. Nassurwanji N. Khambata. On May 24, 1937 the

appellant Prakash Amichand Shah

1026

purchased the right, title ant interest of the head lessee,

that is Nawab of Belha Spinning, Weaving and Manufacturing

Mills Ltd. in an auction sale held in the course of

liquidation proceeding of the said company. The appellant

thus became the head lessee of the entire plot of land with

the rights specified in the document dated November 15,

1882. Surat Parsi Panchsyat Board which had Acquired the

right of the sub-lessee in respect of 38 acres 2 gunthas

created sub-lease in respect of 34 acres 4 gunthas in Survey

in Survey Nos. 75, 81 and 32 in favour of the Surat

Municipal Corporation under a document dated March 30, 1963

relating the sub-lessee's right in the remaining land.

The Surat Borough Municipality passed a resolution on

August 2, 1963 to prepare a Draft Development Plan for the

entire area within the municipal limits of Surat city in

accordance with the Development Regulations issued by it

with the object of checking haphazard growth of he city.

Pursuant to the said resolution, a notification was issued

on April 3, 1965 under section 4 of the Land Acquisition

Act, 1894 to acquire a portion of the entire plot of land

admeasuring 34 acres 4 gunthas in Survey Nos. 75, 81 and 82

for the purpose of setting up an industrial estate by the

Surat Borough Municipality , Surat which involved the

shifting of Municipal Workshops and Central Stores. On June

22, 1965 the Surat Borough Municipality made a declaration

declaring its intention to prepare a Town Planning Scheme,

being the Town Planning Scheme No. VIII of Umarwada in

respect of the locality called Umarwada under section 22 of

the L.A. Act. Since the Surat Municipality could not make

and publish the draft scheme even within the time allowed

under the Bombay Town Planning Act, under sub-section 2 of

section 23 of the Act the Collector of Surat was authorised

by the State Government to make and publish the draft scheme

dated July 4, 1967 the land admeasuring 1,37,961 sq. meters

out of the aforesaid land of which the appellant was the

head lessee was shown as reserved for the Surat

Municipality. The appellant filed his objection to the

proposed reservation pointing out therein that he himself

needed the land for expansion of his business and for

construction of homes for his employees. He also stated that

the Surat Municipality had acted mala fide in securing the

reservation of such a large piece of land in its favour. The

Government of Gujarat after overruling the objection

ultimately granted sanction to the draft scheme prepared by

the collector of Surat b y its notification dated May 10,

1968. When one Mr. M.C. Makwana appointed as the Town

Planning Officer by the Government on February 28, 1969

entered upon his functions under section 32 of the Act, the

appellant again filed his objection to reservation of his

1027

land for the alleged purpose of the Municipal Corporation.

In addition the appellant also claimed compensation in

respect of the said 38 acres 2 gunthas at the rate of Rs.50

per sq. yard alleging that the land in the vicinity had been

sold at that rate and claimed towards his share two-thirds

of the total compensation. Then on June 30, 1970 the Town

Planning Officer issued a notice expressing his intention to

acquire the land in question admeasuring 1,37,961 per sq.

meter. Aggrieved by the said decision, the appellant filed

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 27

an appeal before the Board of appeal. The Board of Appeal

held that disputes regarding compensation of lands taken

away for the purpose of the scheme being not within the

scope of section 33 (1) (xiii) of the Act the decision of

the Town Planning Officer on those questions was not

appealable under section 34 of the Act. Aggrieved by the

decision of the Board the appellant filed a writ petition

before the High Court of Gujarat which was dismissed. The

Constitution questions raised in the writ petition could not

be decided by the High Court as emergency was then in force

in the country and the rights guaranteed under Articles 14,

19 and 31 of the Constitution of India on which the

appellant's contentions were based remained suspended at

that time. The High Court, however, referred to the decision

of this Court in State of Gujarat v. Shri Shantilal

Mangaldas, [1969] 3 S.C.R. 341 in which the validity of the

Bombay Town Planning Act had been upheld . Aggrieved by the

judgment of the High Court the appellant filed this appeal

by special leave. The appeal was heard by a Bench of this

Court consisting of A.C. Gupta and A.P. Sen JJ, which, by

its judgment dated July 24, 1981 reported as Prakash

Amichand Shah v. State of Gujarat. [1982] 1 S.C.R. 81, came

to the conclusion that the High Court was right in its

finding that he decision of the Town Planning Officer

determining the amount of compensation in the appellant's

case was not appealable. However, the Court felt that the

case should be placed before the Constitution Bench for

hearing the question relating to the constitutional validity

of the Act. Hence the appellant's case before the

Constitution Bench.

Dismissing the appeal, the Court

^

HELD: 1.1 There is no constitutional infirmity in the

provision of the Bombay Town Planning Act, 1954 and there is

no ground to declare the Act which has been upheld in

Shantilal Mangaldas's about 17 years ago as unconstitutional

now and to unsettle all settled transactions drawing

inspiration from certain vague observations made in game

subsequent decisions. [1056 D-E; 1060 B-C]

1028

1.2 The Bombay Town Planning Act is not bad for not

extending the procedure of the Land Acquisition Act, 1894 to

the proceedings under the Town Planning Scheme. It cannot be

struck down on the ground, that if the Land Acquisition Act,

1894 had been applied, the appellant would have had the

benefit of the machinery provided under section 18 and 54 of

the Acquisition Act ant since it is not available under the

procedure prescribed by the Act in the case of lands taken

under section 53 thereof the Act is discriminatory. [1057 D-

E]

2.1 The object of the Bombay Town Planning Act is not

just acquiring a bit of land here or a bit of land there for

some public purpose. It consists of several activities which

have as their ultimate object the orderly development of an

urban area. It envisages the preparation of a development

plan, allocation of land for various private and public

uses, preparation of a Town Planning Scheme and main

provisions for future development of the area in question.

On the final Town Planning Scheme coming into force under

section 53 of the Act there is an automatic vesting of all

lands required by the local authority. It is not a case

where the provisions of the Land Acquisition Act, 1894 have

to be set in motion either by the Collector or by the

Government. The divesting of title takes place statutorily.

Section 71 of the Act provides for payment of compensation

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 27

to the owner of an original plot who is not provided with a

plot in the final scheme, or if the contribution to be

levied from him under section 66 of the Act is less than the

total amount to be deducted therefrom under any of the

provisions of the Act. Section 73 of the Act provides for

payment due to be made to any person by the local authority

by adjustment of account as provided in the Act Section 32

of the Act lays down the various duties and powers of the

Town Planning Officer which he has to discharge and exercise

for the benefit of the whole community. 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 ca e

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. [1046 C-H; 1047 A]

2.2 In this very Act, there are three types of taking

over of lands-first under section 11, secondly under section

53 and

1029

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 lt 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, ii the case of lands which are needed

for the local authority under the owners 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 provision under

section 67 to 71 of the Act for determining compensation

payable to the owners of original plots who do not get the

reconstituted plot 6 lt can not be said that there has been

any violation of Article 14 of the Constitution. Even there

the market value of the land taken 18 ¯ t lost sight of and

hence no violation of Article 31(2) of the Constitution

either. [1047 A-E]

State of Gujarat v. Shri Shantilal Mangaldas & Ors.,

[1969] 3. S.C.R. 341., The Zandu Pharmaceutical Works Ltd.

v. G.J. Desai & Ors. C.A.No. 1034 of 1967 decided ib 28th

August 1969., Maneklal Chhotalal & Ors. v. M.G. Makwana &

Ors., [1967] 3 S.C.R. 65 explained an applied.

3.1 A decision ordinarily is a decision on the case

before the Court, while the principle underlying the

decision would be bindings as a precedent in a case which

comes up for decision subsequently. Hence, while applying

the decision to a later case, the Court which 18 dealing

with lt should carefully try to certain the true principle

laid down by the previous decision. A decision often takes

its colour from the questions involved in the case in which

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 27

it is rendered. The scope and authority of a precedent

should never be expanded unnecessarily beyond the needs of a

given situation. [1052 C-E]

3.2 Expressions like "virtually overruled" or "in

substance overruled" are expression of inexactitude. In such

circumstances, it is the duty of a Constitution Bench of the

Supreme Court which has to consider the effect of the

precedent in question to read

1030

it over again ant to form its own opinion instead of wholly

relying upon the gloss placed on it in some other decision.

An inappropriate purpose for which a precedent is used at a

later date does not take away its binding character as a

precedent. In such cases there is good reason to disregard

the later decision. Such occasions in judicial history are

not rare. The history of the law relating to the right of

labourers to strike in a factory of one such instance. [1055

E-F; H; 1056A]

3.3 Therefore, as long as the Bombay Town Planning Act,

1954 which was upheld by the Supreme Court in Shantilal

Mangal das's has not been struck town by this Court in any

subsequent decision it would be wholly unjust to declare it

inferentially as having been declared as void in a

subsequent decision which depends mostly on the reasons in

Shantilal Mangaldas's case for its survival. The decision in

Shantilal Mangaldas's case has not been overruled by the

Bank Nationalisation case which has only explained Shantilal

MangalDas's case and does not overrule it particularly after

the Nation has first expressed itself in favour of the 25th

Constitution Amendment and then decided to delete Article 31

altogether from the Constitution. [1056 B-E]

R.C. Cooper v. Union of India [1970] 3 S.C.R. 530;

Kesvananda Bharati v. State of Kerala [1973] Suppl. S.C.R.

l; State of Karanataka & Anr. v. Rangnatha Reddy & Anr.

[1978] S.C.R. 641 explained.

Temperton v. Russell (1893) 1 Q.B. 715 (CA); Allen v.

Flood (1898) A.C.1; Quinn v. Leathem (1901) A.C. 495

referred to.

4. There is no rule that every decision of every

officer under a statute should be made appealable and if it

is not 80 made appealable the statute should be struck down.

It may be salutary if an appeal is provided against

decisions on questions which are of great importance either

to private parties or to the members of the general public,

but ordinarily on Such matters the Legislature is the best

judge. Unless the Court finds that the absence of an appeal

is likely to make the whole procedure oppressive and

arbitrary, the Court does not condemn it as

unconstitutional. Considering the status of the officer who

is appointed as a Town Planning Officer, Section 32 of the

Bombay Town Planning Act cannot be said to confer

uncanalised and arbitrary power on the Town Planning

Officer, merely because of the denial of the right of appeal

in some cases. [1056 F-H; 1057 A-B]

M/s Babubbsi & Co. Ors. v. State of Gujarat [1985] 2

S.C.C. 732 followed.

1031

5.1 It is wrong to contend that the denial of the

solatium of 15 per cent (or 30 per cent, as the law now is)

of the market value of the land in addition to the

compensation payable for lands taken by the local authority

for purposes of the scheme makes the Bombay Town Planning

Act discriminatory. [1057 E-F; 1059 G]

5.2 It cannot also be said as a rule that the State

which has got to supply and maintain large public services

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 27

at great cost should always pay in addition to a reasonable

compensation some amount by way of solatium. The interest of

the public is equally important. In any event it is not

shown that the compensation payable in the present case is

illusory and unreal. [1059 H; 1060 A-B]

Nagpur Improvement Trust and Anr. v. Vithal Rao & Ors.,

[1973] 3 S.C.R. 39; State of Kerala & Ors. v. T.N. Peter &

Anr.,[1980] 3 S.C.R. 290; P.C. Goswami v. Collector of

Darrang,A.I.R. 1982 S.C. 1214 distinguished.

JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1224 of

1977.

From the Judgment and Order dated 3.9.1976 of the

Gujarat High Court in Special Civil Application No. 1501 of

1974.

R.F. Nariman, P.K. Manohar and P.H. Parekh for the

Appellants.

T.S. Krishnamoorthy Iyer, T.U. Mehta , Prashant Desai

and S.C. Patel for the Respondents.

The Judgment of the Court was delivered by

VENKATARAMIAH, J. This appeal by special leave is

preferred against the judgment dated September 3, 1976 in

Special Civil Application No. 1501 of 1976 on the file of

the High Court of Gujarat filed under Article 226 of the

Constitution of India in which the appellant had challenged

the constitutional validity of the Town Planning Scheme No.

VIII (Umarwada) in respect of certain lands situated at

Surat City in the State of Gujarat, published under the

provisions of the Bombay Town Planning Act, 1954

(hereinafter referred to as 'the Act') in so far as the said

scheme pertained to the land of which the appellant was the

lessee, alleging inter alia that it was violative of Article

14, 19(1)(f) and 31 of the Constitution of India.

The land in question originally belonged to one Ladli

Begum. She granted a lease in respect of the said land in

favour of a

1032

company called Nawab of Belha Spinning, Weaving and

Manufacturing Mills Ltd. under a document dated November 15,

1882 for a period of 99 years with effect from November 1,

1881 with a right of renewal for a further period of 99

years. The land was described as the land bearing Survey

Nos. 75, 81, 83, 84 and 86 measuring in all 49 acres 22

gunthas. The company which had taken the land on lease

executed a sub-lease in respect of 38 acres 2 gunthas out of

the entire plot of land on March 29, 1884 in favour of one

Dr. Nassurwanju N. Rhambata for the residuary period of 99

years without the right of renewal. This sub-lease was to

expire on October 31, 1980. Under a document dated April 30,

1928 Surat Parsi Panchayat Board required the lease in

respect of the entire 38 acres 2 gunthas, referred to above,

from a lady who was the daughter of one Rustamji who had

acquired the rights of Dr. Nassurwanji N. Khambata. On May

24, 1937 the appellant purchased the right, title and

interest of the head lessee, i.e., Nawab of Belha Spinning,

Weaving and Manufacturing Mills Ltd. in an auction sale held

in the course of liquidation proceedings of the said

company. The appellant thus became the head lessee of the

entire plot of land with the rights specified in the

documents dated November 15, 1882, referred to above. Surat

Parsi Panchayat Board which had acquired the right of the

sub-lessee in respect of 38 acres 2 gunthas created a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 27

further sub-lease in respect of 34 acres 4 gunthas out of

the 38 acres 2 gunthas in favour of the Surat Municipal

Corporation under a document dated March 30, 1963 retaining

the sub-lessee's right in the remaining land.

The Surat Borough Municipality passed a resolution on

August 2, 1963 to prepare a Draft Development Plan for the

entire area within the municipal limits of Surat City in

accordance with the Development Regulations issued by it

with the object of checking haphazard growth of the city.

Pursuant to the said resolution, a notification was issued

on April 3, 1955 under section 4 of the Land Acquisition

Act, 1894 to acquire a portion of the entire plot of land

admeasuring 34 acres 4 gunthas in Survey Nos. 75, 81 and 82

for the purpose of setting up an industrial estate by the

Surat Borough Municipality, Surat which involved the

shifting of Municipal Workshops and Central Stores. On June

26, 1965 the Surat Borough Municipality made a declaration

declaring its intention to prepare a Town Planning Scheme,

being the Town Planning Scheme No. VIII of Umarwada in

respect of the locality called Umarwada under section 22 of

the Act. The Municipality however could not make and publish

the draft scheme within 12 months from the declaration of

its intention as

1033

required by section 23(1) of the Act. The State Government,

however, by its Notification dated August 31, 1966 in

exercise of its power under the proviso to section 23(1)

extended the period for making and publishing the draft

scheme by six months. The Municipality could not make and

publish the draft scheme even within that extended period of

six months. Then under sub-section (2) of section 23 of the

Act the Collector of Surat was authorised by the State

Government to make and publish the draft scheme within nine

months from December 26, 1966. Accordingly, the Collector of

Surat by Notification dated July 4, 1967 published a draft

scheme. In the draft scheme as made and published by the

Collector, the land admeasuring 1,37,961 sq. metres out of

the aforesaid land of which the appellant was the head

lessee was shown as reserved for the Surat Municipality. The

appellant filed his objection to the proposed reservation

pointing out therein that he himself needed the land for

expansion of his business and for construction of homes for

his employees. He also stated that the Surat Municipality

had acted mala fide in securing the reservation of such a

large piece of land in its favour. The Government of Gujarat

after overruling the objection ultimately granted sanction

to the draft scheme prepared by the Collector of Surat by

its Notification dated May 10, 1968. On June 7, 1968 one

Shri N.R. Bhambhani was appointed as the Town Planning

Officer to finalise the scheme. He was succeeded by Shri

M.G.Makwana who was appointed as the Town Planning Officer

by the Government on February 28, 1969. When the Town

Planning Officer entered upon his functions under section 32

of the Act, the appellant again filed his objection to the

reservation of his land for the alleged purpose of the

Municipal Corporation. In addition the appellant also

claimed compensation in respect of the said 38 acres 2

gunthas at the rate of Rs.50 per sq. yard alleging that the

land in the vicinity had been sold at that rate and claimed

towards his share two-thirds of the total compensation. Then

on June 30, 1970 the Town Planning Officer issued a notice

expressing his intention to acquire the land in question

admeasuring 1,37,961 sq. metres. On November 4, 1971 he

determined the compensation payable in respect of the said

land at the rate of Rs.2.40 paise per sq. metre. Aggrieved

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 27

by the said decision, the appellant filed an appeal before

the Board of Appeal. The Board of Appeal held that disputes

regarding compensation of lands taken away for the purpose

of the scheme being not within the scope of section

33(1)(xiii) of the Act the decision of the Town Planning

Officer on those questions was not appealable under section

34 of the Act. The Board of Appeal inter alia observed that

it was not for the Board to say anything regarding the

propriety of the action taken by the Town Planning

1034

Officer in reserving the entire plot of land admeasuring

1,37,961 sq. metres, in which the appellant was interested,

for the purpose of the Surat Municipality. It also held that

on the question of apportionment of the compensation no

appeal lay to it. Aggrieved by the decision of the Board,

the appellant filed a writ petition before the High Court of

Gujarat out of which this appeal arises.

The High Court dismissed the writ petition concurring

with the Board of Appeal that the appeal was incompetent.

The constitutional questions raised in the writ petition

could not be decided by the High Court as emergency was then

in force in the country and the rights guaranteed by

Articles 14,19 and 31 of the Constitution of India on which

the appellant's contentions were based remained suspended

at that time. The High Court however referred to the

decision of this Court in State of Gujarat v. Shri Shantilal

Mangaldas,[1969] 3 S.C.R. 341, in which the validity of the

Act had been upheld. Aggrieved by the judgment of the High

Court the appellant has filed this appeal by special leave.

This appeal was heard first by a bench of this Court

consisting of A.C. Gupta and A.P. Sen, JJ. On that occasion

the learned counsel for the appellant submitted that in case

the Court upheld that the appeal preferred by the appellant

before the Board of Appeal was maintainable he would not

press the grounds questioning the constitutional validity at

that stage and the matter should then go back to the Board

of Appeal for its decision on the adequacy of the

compensation. He further submitted that if the Court found

that the Board of Appeal was right in holding that the

appeal was not maintainable, he should be given leave to

urge the grounds challenging the validity of the Act. The

learned Judges who heard the appeal came to the conclusion

that the High Court was right in finding that the decision

of the Town Planning Officer determining the amount of

compensation in the appellant's case was not appealable by

its judgment dated July 24, 1981 which is reported as

Prakash Amitchand Shah v. State of Gujarat,[1982] 1 S.C.R.

81. In view of the above conclusion the court felt that the

case should be placed before Constitution Bench for hearing

the questions relating to the constitutional validity of the

Act. That is how the case is now before this Constitution

Bench to consider the said questions.

Before taking up for consideration the contentions

urged on behalf of the appellant, it is necessary to

understand the

1035

objects and the scheme of the Act. The principal objects of

any Town Planning legislation generally are to provide for

planning, the development and control of the use of land and

to confer on public authorities such as City Municipalities,

Municipal Boroughs, Town Municipalities, Town Panchayats

etc. powers in respect of the acquisition and development of

land for planning and other purposes. Such laws generally

provide for the preparation of schemes that might be made in

respect of the land with the general object of controlling

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 27

its development, securing proper sanitary conditions,

amenities and conveniences such as public parks, play

grounds, hospital areas etc., preserving existing buildings

or other objects of architectural, historic and artistic

interest and places of natural interest or beauty and

generally of protecting existing amenities. The Act is one

such piece of legislation. It was enacted in the place of an

earlier statute which was in force in the province of

Bombay, namely, the Bombay Town Planning Act, 1915. The Act

came into force on April 1, 1957 before the reorganisation

of the State of Bombay and it continued to be in force in

the State of Gujarat even after the Bombay Reorganisation

Act 1960 came into force. Under the Act every local

authority as defined under section 2(4) thereof was required

by section 3 of the Act to carry out a survey of the area

within its jurisdiction and not later than four years from

the date on which the Act came into force to prepare and

publish in the prescribed manner a development plan and to

submit it to the State Government for sanction. Before

carrying out a survey of the area referred to in sub-

sections (1) and (2) of section 3 of the Act for the purpose

of preparing the development plan for such area, a local

authority is required to make a declaration of its intention

to prepare the development plan and to despatch a copy

thereof to the State Government for publication in the

Official Gazette and to publish it in the prescribed manner

for inviting suggestions from the public within a period of

two months. Section 4 to 7 of the Act provide for the

declaration of intention of making development plan, the

manner of preparing a development plan, power of entry for

carrying out survey for preparing development plan and the

contents of a development plan. Section 7 of the Act which

deals with the contents of development plan states that

generally the development plan should indicate the manner in

which the development and improvement of the entire area

within the jurisdiction of the local authority are to be

carried out and regulated. The local authority is required

to indicate in the development plan its proposals with

regard to the following :

(a) proposals for designating the use of the land

for the purposes such as (1) residential (2)

industrial, (3) commercial, and (4) agricultural;

1036

(b) proposals for designation of land for public

purposes such as parks, play grounds, recreation

grounds, open spaces, schools, markets or medical,

public health or physical culture institutions;

(c) proposals for roads and highways;

(d) proposals for reservation of land for the

purposes of the Union, any State, any local

authority or any other authority established by

law in India; and

(e) such other proposals for public or other

purposes as may from time to time be approved by

the local authority or directed by the State

Government in this behalf.

By requiring a local authority to prepare a development

plan, the Act intends that the Town Planning Schemes should

form part of a single and cohesive plan for development of

the entire area over which the local authority has

jurisdiction. The local authority is required to submit the

development plan for the sanction of the State Government.

After the receipt of the sanction of the State Government of

the development plan, the local authority is authorised by

section 11(1) of the Act to acquire any land designated in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 27

the development plan for purposes specified in clauses

(b),(c),(d) & (e) of section 7 of the Act either by

agreement or under the Land Acquisition Act, 1894. Sub-

Section (2) of section 11 of the Act provides that the Land

Acquisition Act, 1894 as amended by the Schedule to the Act

would apply to the determination of the compensation for the

acquisition of such land.

Chapter III of the Act deals with the provisions

relating to the making of Town Planning Schemes. Section 18

of the Act provides that subject to the provisions of the

Act or any other law for the time being in force a local

authority may make one or more town planning schemes for the

area within its jurisdiction or any part thereof having

regard to the proposals in the final development plan. Every

such Town Planning Scheme may make provisions for any of the

matters such as the laying out or re-laying out of land,

either vacant or already built upon; the filling up or

reclamation of low-laying swamp or unhealthy areas or

levelling up of land; laying out of new streets or roads;

construction, diversion, extention, alteration, improvement

and stopping up of streets, roads and communications; the

1037

construction, alteration and removal of buildings, bridges

and other structures, the allotment or reservation of land

for roads, open spaces, gardens, recretion grounds, schools,

markets, green belts and dairies, transport facilities and

public purposes of all kinds; the preservation of objects of

historical or national interest or natural beauty and of

buildings actually used for religious purposes; the

imposition of conditions and restrictions in regard to the

open space to be maintained about buildings etc. Before

preparing a Town Planning Scheme the local authority having

jurisdiction over any such land as is referred to in Section

21 of the Act is required by section 22 of the Act to

declare its intention to make a Town Planning Scheme in

respect of the whole or any part of such land. Within 21

days from the date of such declaration the local authority

is required to publish its declaration of intention to make

a scheme in the prescribed manner. A copy of such

declaration is required to be sent to the State Government.

The local authority is also required to send a plan to the

State Government showing the area which it proposes to

include in the Town Planning Scheme. Under section 23(1)

within 12 months from the date of declaration of intention

to make a scheme the local authority shall prepare a draft

scheme. Under the proviso to section 23 of the Act however

the State Government may extend the time to do so by such

period specified not exceeding six months in all. Under sub-

section (2) of section 23 of the Act the State Government or

an officer authorised by the State Government in that behalf

may make and publish the draft scheme if the draft scheme is

not made and published by the local authority within the

period specified in sub-section (1) of section 23 of the Act

or within the period so extended under the proviso to sub-

section (1) of section 23 of the Act within a further period

of 9 months from the date of the expiry of the extended

period. If such declaration is not made by the State

Government within the further period specified in sub-

section (2) of section 23 of the Act, the declaration of

intention to make such scheme shall elapse and until aperiod

of three years has elapsed from the date of such declaration

it shall not be competent to the local authority to declare

its intention to make any Town Planning Scheme for the same

area or any part of it. Section 25 of the Act provides that

the draft scheme shall contain the following particulars :

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 27

(a) the area, ownership and tenure of each

original plot;

(b) the land allotted or reserved under sub-clause

(a) of clause (2) of section 18 with a general

indication

1038

of the uses to which such land is to be put and

the terms and conditions' subject to which such

land is to be put to such uses;

(c) the extent to which it is proposed to alter

the boundaries of original plots;

(d) an estimate of the net cost of the scheme to

be borne by the local authority;

(e) a full description of all details of the

scheme under such sub-clauses of clause (2) of

section 18 as may be applicable;

(f) the laying out or re-laying out of land either

vacant or already built upon;

(g) the filling up or reclamation of low-lying

swamp or unhealthy areas or levelling up of land;

and

(h) any other prescribed particulars.

Section 26 deals with reconstituted plots. In the draft

scheme the size and shape of every reconstituted plot shall

be determined, so far as may be, to render it suitable for

building purposes and where the plot is already built upon,

to ensure that the building; as far as possible, complies

with the provisions of the scheme as regards open spaces.

For the purpose of sub-section (1) of section 26 of the Act

the draft scheme may contain the following proposals :-

(a) to form a reconstituted plot by the alteration

of the boundaries of an original plot;

(b) to form a reconstituted plot by the transfer

wholly or partly of the adjoining lands;

(c) to provide with the consent of the owners that

two or more original plots each of which is held

in ownership in severality or in joint ownership

shall hereafter, with or without alteration of

boundaries, be held in ownership in common as

reconstituted plot;

(d) to allot a plot to any owner dispossessed of

land in furtherance of the scheme and;

1039

(e) to transfer the ownership of a plot from one

person to another.

Section 27 of the Act provides for representation to be made

by persons affected by such scheme. Section 28 of the Act

confers the powers on the State Government to grant sanction

to the scheme and to publish it. Within one month from the

date on which the sanction of the State Government to the

draft scheme is published in the Official Gazette the State

Government is required to appoint a Town Planning Officer

for the purpose of implementing the scheme. The duties of

the Town Planning Officer are set out in Section 32 of the

Act. It reads thus :

"32(1) In accordance with the prescribed procedure the

Town Planning Officer shall -

(i) after notice given by him in the prescribed

manner, define and demarcate the areas allotted

to, or reserved, for a public purpose or purpose

of the local authority and the reconstituted plots

;

(ii) after notice given by him in the prescribed

manner, determine, in the case in which a

reconstituted plot is to be allotted to persons in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 27

ownership in common, the shares of such persons;

(iii) fix the difference between the total of

values of the original plots and the total of the

values of the plots included in the final scheme,

in accordance with the provisions contained in

clause (f) of sub-section (1) of section 64;

(iv) determine whether the areas used, allotted or

reserved for a public purpose or purpose of the

local authority are beneficial wholly or partly to

the owners or residents within the area of the

scheme.

(v) estimate the portion of the sums payable as

compensation on each plot used, allotted or

reserved for a public purpose or purpose of the

local authority which is beneficial partly to the

owners or residents within the area of the scheme

and partly to the general public, which shall be

included in the costs of the scheme;

(vi) calculate the contribution to be levied on

each plot used, allotted or reserved for a public

purpose

1040

or purpose of the local authority which is

beneficial partly to the owners or residents

within the area of the scheme and partly to the

general public;

(vii) determine the amount of exemption, if any,

from the payment of the contribution that may be

granted in respect of plots exclusively occupied

for the religious or charitable purposes;

(viii) estimate the increment to accrue in respect

of each plot included in the final scheme in

accordance with the provisions contained in

section 65;

(ix) calculate the proportion in which the

increment of the plots included in the final

scheme shall be liable to contribution to the

costs of the scheme in accordance with the

provisions contained in section 66

(x) calculate the contribution to be levied on

each plot included in the final scheme

(xi) determine the amount to be deducted from, or

added to, as the case may be, the contribution

leviable from a person in accordance with the

provisions contained in section 67;

(xii) provide for the total or partial transfer of

any right in an original plot to a reconstituted

plot or provide for the extinction of any right in

an original plot in accordance with the provisions

contained in section 68;

(xiii) estimate in reference to claims made before

him, after the notice given by him in the

prescribed manner the compensation to be paid to

the owner of any property or right injuriously

affected by the making of a town-planning scheme

in accordance with the provisions contained in

section 69;

(xiv) draw in the prescribed form the final scheme

in accordance with the draft scheme;

Provided that---

(a) he may make variation from the draft scheme;

1041

(b) any variation estimated by him to involve an

increase of 10 per centum in the costs of the

scheme as is described in section 64 or rupees one

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 27

lakh, whichever is lower shall require the

sanction of the State Government :

Provided further that the Town Planning Officer

shall make no substantial variation and without

the consent of the local authority and without

hearing any objections which may be raised by the

owners concerned.

(2) If there is any difference of opinion between

the Town Planning Officer and the local authority

whether variation made by the Town Planning

Officer is substantial or not, the matter shall be

referred by the local authority to the State

Government whose decision shall be final and

conclusive.

(3) The Town Planning Officer appointed for any

draft scheme shall decide all matters referred to

in sub-section (1) within a period of twelve

months from the date of his appointment :

Provided that the State Government may from time to

time by order in writing extend the said period by such

further period as may be specified in the order."

Section 33 of the Act provides that excepting in

matters arising out of clauses (v), (vi), (viii), (ix), (x)

and (xiii) of sub-section (1) of section 32, every decision

of the Town Planning Officer shall be final and conclusive

and binding on all persons. Section 34 of the Act however

provides for appeals being preferred against any decision of

the Town Planning Officer under clauses (v), (vi), (viii)

(ix), (x) and (xiii) of sub-section (1) of section 32 of the

Act to the Board of Appeal constituted under section 35 of

the Act. Thereafter a final scheme should be prepared and

submitted to the State Government. The State Government is

authorised to accord sanction to such final scheme under

section 51 of the Act. Thus it is seen that the Town

Planning Schemes are to be prepared in two distinct stages

by two different authorities. The first stage constitutes

the preparation of draft town planning scheme by the local

authority and the second stage consists of the scheme to be

prepared by the Town Planning Officer. If the State

Government sanctions the final scheme under section 51 of

the Act it shall state in the

1042

notification the place at which the final scheme is kept

open for the public inspection and a date which shall not be

earlier than one month after the date of the publication of

the notification on which all the liabilities created by the

scheme shall take effect and the final scheme shall come

into force. On and after the date fixed in such notification

a town planning scheme shall have effect as if it had been

enacted in the Act. The effect of final schemes is set out

in section 53 of the Act. Section 53 read thus :-

"53. On the day on which the final scheme comes

into force,-

(a) all lands required by the local authority

shall, unless it is otherwise determined in such

scheme, vest absolutely in the local authority

free from all encumbrances;

(b) all rights in the original plots which have

been re-constituted shall determine and the re-

constituted plots shall become subject to the

rights settled by the Town Planning Officer."

Section 64 of the Act specifies what sums should be

considered as costs of a town planning scheme. Under the

provisions of the statute the costs of the town planning

scheme is to be partly met from the contribution from the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 27

plot-owners and partly from the funds of the local

authorities. There are provisions in section 66 of the Act

relating to the contribution towards costs of scheme.

Section 66 reads thus:-

"66. (1) The costs of the scheme shall be met

wholly or in part by a contribution to be levied

by the local authority on each plot included in

the final scheme calculated in proportion to the

increment which is estimated to accrue in respect

of such plot by the Town Planning Officer :

Provided that -

(i) no such contribution shall exceed half the

increment estimated by the Town Planning Officer

to accrue in respect of such plot;

(ii) where a plot is subject to a mortgage with

possession or to a lease the Town Planning Officer

1043

shall determine in what proportion the mortgages

or lessee on the one hand and the mortgagor or

lessor on the other hand shall pay such

contribution;

(iii) no such contribution shall be levied on a

plot used, allotted or reserved for a public

purpose or purpose of the local authority which is

solely for the benefit of owners or residents

within the area of the scheme; and

(iv) the contribution levied on a plot used,

allotted or reserved for a public purpose or

purpose of the local authority which is beneficial

partly to the owners or residents within the area

of the scheme and partly to the gneneral public

shall be calculated in proportion to the benefit

estimated to accrue to the general public from

such use, allotment or reservation.

(2) The owner of each plot included in the final

scheme shall be primarily liable for the payment

of the contribution leviable in respect of such

plot.

Section 67 of the Act makes provisions for certain

adjustments and it reads thus:-

"67. The amount by which the total value of the

plots included in the final scheme with all the

buildings and works thereon allotted to a person

falls short of or exceeds the total value of the

original plots with all the buildings and works

thereon of such person shall be deducted from or

added to, as the case may be, the contribution

leviable from such person, each of such plots

being estimated at its market value at the date of

the declaration of intention to make a scheme or

the date of a notification under sub-section (1)

of section 24 and without reference to

improvements contemplated in the scheme other than

improvements due to the alteration of its

boundaries."

Where the cost of the scheme does not exceed half the

increment, the cost shall be wholly met by the contribution

of the plot-holders but where it exceeds half the increment,

to the extent of half the increment it shall be met by the

contribution from plot-holders and the excess shall be borne

by the local

1044

authority. The rules for levying incremental contribution

are set out on section 66 of the Act, referred to above. It

is seen that the valuation of the land is done in three

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 27

stages :-

(i) Original value of the land as on the date of

the first notification which does not take into

account any of the effects of the improvement

scheme that is to follow.

(ii) Semi-final value, that is the value of the

reconstituted plots allotted in their new size and

shape but in their original condition, ignoring

the benefit from the scheme.

(ii) Final value, that is the enhanced value of

the reconstituted plots due to the scheme.

The difference between the first two is the

compensation that is due to the owner. The difference

between the second and third is the increment of the value

of the reconstituted plots that remain with the owner on the

completion of the scheme and only 50 per cent of the

increment can be recovered from the owner as his increment

contribution towards the cost of the scheme and no more. Any

excess incurred will have to be met by the local authority

from its funds.

Section 84 of the Act provides that if at any time the

State Government is of the opinion that any land included in

a town planning scheme is needed for a public purpose other

than that for which it is included in the scheme it may make

a declaration to that effect in the Official Gazette in the

manner provided in section 6 of the Land Acquisition Act,

1894 and on the publication of such declaration the

Collector shall proceed to take order for the acquisition of

the land and the provisions of the Land Acquisition Act,

1894, as amended by the Schedule to the Act, as far as may

be, shall apply to the acquisition of the said land. Thus it

is seen that there are three methods of acquisition of land

under the Act which are as under:-

(i) acquisition of land provided in section 11 of

the Act for development purposes specified in

clauses (b), (c), (d) and (e) of section 7 of the

Act for which compensation is payable under the

provisions of the Land Acquisition Act, 1894 as

amended by the provisions contained in the

Schedule to the Act ;

1045

(ii) transfer of lands that takes place on the

coming into force of the final scheme under

section 53 of the Act for which compensation is

payable in accordance with section 67 of the Act;

and

(iii) acquisition of land under section 84 of the

Act which empowers the State Government to acquire

land included in the town planning scheme at a

subsequent stage where again compensation is

payable in accordance with the provisions of the

Land Acquisition Act, 1894 as amended by the

Schedule to the Act.

These are broadly the features of the Act.

The first contention urged by the learned counsel for

the appellant is that it being possible in this instant case

to acquire the land of the appellant either under the Land

Acquisition Act, 1894 which is more favourable to the owner

of the land both from the point of view of the procedural

safeguards and from the point of view of the quantum of

compensation payable for the land which includes solatium

payable under section 23(2) thereof than the Act which does

not provide for appeals against many of the orders passed by

the Town Planning Officer under section 32 of the Act and

does not authorise payment of solatium in addition to the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 27

market value of the land, the acquisition of the land under

the Town Planning Scheme under section 53 of the Act is

discriminatory and violative of Article 14 of the

Constitution which guarantees equality before law and equal

protection of the laws. This question is no longer res

integra. In The Zandu Pharmaceutical Works Ltd. v. G.J.

Desai and Ors., Civil Appeal No. 1034 of 1967 decided on

28th August, 1969, dealing with the very provisions of the

Act this Court observed thus :

"When the Town Planning Scheme comes into

operation the land needed by a local authority

vests by virtue of s.53(a) and that vesting for

purposes of the guarantee under Art. 31(2) is

deemed compulsory acquisition for a public

purpose. To lands which are subject to the scheme,

the provisions of ss.53 and 67 apply, and the

compensation is determined only in the manner

prescribed by the Act. There are therefore two

separate provisions one for acquisition by the

State Government, and the other in which the

statutory vesting of land operates as acquisition

for the

1046

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

ss.53 and 67 are not invalid on the ground that

they deny equal protection of the laws or equality

before the laws."

In order to appreciate the contentions of the appellant

it is necessary to look at the object of the legislation in

question as a whole. The object of the Act is not just

acquiring a bit of land here or a bit of land there for some

public purpose. It consists of several activities which have

as their ultimate object the orderly development of an urban

area. It envisages the preparation of a development plan,

allocation of land for various private and public uses,

preparation of a Town Planning Scheme and making provisions

for future development of the area in question. The various

aspects of a Town Planning Scheme have already been set out.

On the final Town Planning Scheme coming into force under

section 53 of the Act there is an automatic vesting of all

lands required by the local authority, unless otherwise

provided, in the local authority. It is not a case where the

provisions of the Land Acquisition Act, 1894 have to be set

in motion either by the Collector or by the Government.

The divesting of title takes place statutorily. Section

71 of the Act provides for payment of compensation to the

owner of an original plot who is not provided with a plot in

the final scheme, or if the contribution to be levied from

him under section 66 of the Act is less than the total

amount to be deducted therefrom under any of the provisions

of the Act. Section 73 of the Act provides for payment due

to be made to any person by the local authority by

adjustment of account as provided in the Act. Section 32 of

the Act lays down the various duties and powers of the Town

Planning Officer which he has to discharge and exercise for

the benefit of the whole community. 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 27

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

1047

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

section 67 to 71 of the Act for determining compensation

payable to the owners of original plots who do not get the

reconstituted plots it cannot be said that there has been

any violation of Article 14 of the Constitution. It is seen

that even there the market value of the land taken is not

lost sight of. The effect of the provisions in sections 67

to 71 of the Act has been explained by this Court in

Maneklal Chhotalal & Ors. v. M.G. Makwana & Ors., [1967] 3

S.C.R. 65 and in State of Gujarat v. Shri Shantilal

Mangaldas & Ors. (supra).

Justice Shah (as he then was) speaking on behalf of the

Constitution Bench of this Court in State of Gujarat v. Shri

Shantilal Mangaldas & Ors. (supra) while dealing with the

very Act the very Act observed at page 357 thus ;-

"The object of s.67 is to set out the method of

adjustment of contribution against compensation

receivable by an owner of land. By that section

the difference between the total value of the

plots included in the final scheme with all the

buildings and works thereon allotted to a person

and the total value of the original plot with all

the buildings and works thereon must be estimated

on the basis of the

1048

market value at the date of the declaration of

intention to make a scheme, and the difference

between the two must be adjusted towards

contribution payable by the owner of the plot

included in the scheme. In other words, s.67

provides that the difference between the market

value of the plot with all the buildings and works

thereon at the date of the declaration of

intention to make a scheme and the market value of

the plot as reconstituted on the same date and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 27

without reference to the improvements contemplated

in the scheme is to be the compensation due to the

owner. Section 71 which is a corollary to s.67

provides, inter alia, that if the owner of the

original land is not allotted a plot at all, he

shall be paid the value of the original plot at

the date of the declaration of intention to make a

scheme".

Proceeding further the learned Judge said on the

question whether the Act violated clause (2) of Article 31

of the Constitution at pages 357 and 358 thus :-

"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 Art. 31(2). Two

arguments were urged on behalf of the first

respondent - (1) that the Act specifies no

principles on which the compensation is to be

determined and given; and (2) that the scheme for

recompense for loss is not a scheme providing for

compensation. It is true that under the Act the

market value of the land at the date of

declaration of intention to make a scheme

determines the amount to be adjusted, and that is

the guiding rule in respect of all lands covered

by the scheme. The High Court was, in our

judgment, right in holding that enactment of a

rule determining payment or adjustment of price of

land of which the owner was deprived by the scheme

estimated on the market value on the date of

declaration of the intention to make a scheme

amounted to specification or a principle of

compensation within the meaning of Art. 31(2).

Specification of principles

1049

means laying down general guiding rules applicable

to all persons or transanctions governed thereby.

Under the Land Acquisition Act compensation is

determined on the basis of "market value" of the

land on the date of the notification under s.4(1)

of the Act. That is a specification of principle.

Compensation determined on the basis of market

value prevailing on a date anterior to the date of

extinction of interest is still determined on a

principle specified. Whether an owner of land is

given a reconstituted plot or not, the rule for

determining what is to be given as recompense

remains the same. It is a principle applicable to

all cases in which by virtue of the operation of

the Town Planning Act a person is deprived of his

land whether in whole or in part."

Rejecting the second branch of the argument that the

provision for giving the value of land not on the date of

extinction of interest of the owner, but on the basis of the

value prevailing at the date of the declaration of the

intention to make a scheme was not a provision for payment

of compensation as stated in Article 31(2) of the

Constitution Shah, J. observed at pages 365 and 366 thus:-

"Reverting to the amendment made in cl.(2) of Art.

31 by the Constitution (Fourth Amendment) Act,

1955, it is clear that adequacy of compensation

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 27

fixed by the Legislature or awarded according to

the principles specified by the Legislature for

determination is not justiciable. It clearly

follows from the terms of Art. 31(2) as amended

that the amount of compensation payable, if fixed

by the Legislature, is not justiciable, because

the challenge in such a case apart from a plea of

abuse of Legislative power, would be only a

challenge to the adequacy of compensation. If

compensation fixed by the Legislature - and by the

use of the expression "compensation" we mean what

the Legislature justly regards as proper and fair

recompense for compulsory expropriation of

property and not something which by abuse of

legislative power though called compensation is

not a recompense at all or is something illusory -

is not justiciable, on the plea that it is not a

just equivalent of the property compulsorily

acquired, is it open to the Courts to enter upon

an enquiry whether the principles which are

specified by the Legislature for determining

compen-

1050

sation do not award to the expropriated owner a

just equivalent ? In our view, such an enquiry is

not open to the Courts under the statutes enacted

after the amendments made in the Constitution by

the Constitution (Fourth Amendment) Act. If the

quantum of compensation fixed by the Legislature

is not liable to be canvassed before the Court on

the ground that it is not a just equivalent, the

principles specified for determination of

compensation will also not be open to challenge on

the plea that the compensation determined by the

application of those principles is not a just

equivalent. The right declared by the Constitution

guarantees that compensation shall be given before

a person is compulsorily expropriated of his

property for a public purpose. What is fixed as

compensation by statute, or by the application of

principles specified for determination of

compensation is guaranteed: it does not mean

however that something fixed or determined by the

application of specified principles which is

illusory or can in no sense be regarded as

compensation must be upheld by the Courts for, to

do so, would be to grant a charter of

arbitrariness, and permit a device to defeat the

constitutional guarantee. But compensation fixed

or determined on principles specified by the

Legislature can not be permitted to be challenged

on the somewhat indefinite plea that it is not a

just or fair equivalent. Principles may be

challenged on the ground that they are irrelevant

to the determination of compensation, but not on

the plea that what is awarded as a result of the

application of those principles is not just or

fair compensation. A challenge to a statute that

the principles specified by it do not award a just

equivalent will be in clear violation of the

constitutional declaration that inadequacy of

compensation provided is not justiciable."

The learned Judge also rejected the contention based on

Article 14 of the Constitution. Justice Shah observed at

pages 371 and 372 thus :-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 20 of 27

"One more contention which was apparently not

raised on behalf of the first respondent before

the High Court may be briefly referred to. Counsel

contends that ss.53 and 67 in any event infringe

Art.14 of the

1051

Constitution and were on that account void.

Counsel relies principally upon that part of the

judgment in P. Vajravelu Mudaliar's case [1965] 1

S.C.R. 614, which deals with the infringement of

the equality clause of the Constitution by the

impugned Madras Act. Counsel submit that it is

always open to the State Government to acquire

lands for a public purpose of a local authority

and after acquiring the lands to vest them in the

local authority. If that be done, compensation

will be payable under the Land Acquisition Act,

1894, but says counsel, when land is acquired for

a public purpose of a local authority under the

provision of the Bombay Town Planning Act the

compensation which is payable is determine at a

rate prevailing many years before the date on

which the notification under s.4 of the Land

Acquisition Act is issued. The argument is based

on no solid foundation. 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 sanction

ed, 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

purpose of a Town Planning Scheme cannot be

acquired otherwise than under the Act, for it is

settled rule of interpretation of statues that

when power is given under a statute to do a

certain thing in a certain way the thing must be

done in that way or not that all: Taylor v.

Taylor, (1875) 1 Ch.D. 426. Again it cannot be

said that because it is possible for the State, if

so minded, to acquire lands for a public purpose

of a local authority, the statutory effect given

to a town-planning scheme results in

discrimination between persons similarly

circumstanced."

Thus it is seen that all the arguments based on Article

14 and Article 31(2) of the Constitution against the Act

were of repelled by the Constitution Bench in the State of

Guajart v. Shri Shntilal Mangaldas Ors. (supra). With great

respect, we approve of the decision of the Court in this

case.

1052

But the learned counsel for the appellant however drew

our attention to certain subsequent decisions of this Court

to persuade us to differ from the above view. First he

referred us to the decision of this Court in R.C. Cooper v.

Union of India, [1970] 3 S.C.R. 530 which is popularly known

as the Bank Nationlisation Case, in which again the majority

judgment was written by Shah, J. Then the learned counsel

referred us to the decision in Kesvaoanda Bharati v. State

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 21 of 27

of Kerala, [1973] Suppl. S.C.R. 1 and to the decision in

State of Karnataka & Anr. v. Ranganatha Redy & Anr., [1978]

1 S.C.R. 641 in support of his plea that the decision in

Shantilal Mangaldas's case (supra) stood overruled. We have

gone through these decisions carefully. Before embarking

upon the examination of these decisions we should bear in

mind that what is under consideration is no a statute of a

legislation but a decision of the Court. A decision

ordinarily is a decision on the case before the court while

the principle underlying the decision would be binding as a

precedent in a case which comes up for decision

subsequently. Hence while applying the decision to a later

case, the Court which is dealing with it should carefully

try to ascertain the true principle laid down by the

previous decision. A decision often takes its colour from

the questions involved in the case in which it is rendered.

The scope and authority of a precedent should never be

expanded unnecessarily beyond the needs of a given

situation. We have earlier seen what Justice Shah has laid

down in Shantilal Mangaldas's case (supra). The very same

Judge delivered the majority judgment in the Bank

Nationalisation Case (supra) in which he observed at pages

303 & 304 thus :-

"There was apparently no dispute that Article

31(2) before and after it was amended guaranteed a

right to compensation for compulsory acquisition

of property and that by giving to the owner, for

compulsory acquisition of his property,

compensation which was illusory, or determined by

the application of principles which were

irrelevant, the constitutional guarantee of

compensation was not complied with. There was

difference of opinion on the matter between the

decisions in P. Vajravelu Mudaliar's case (supra)

and Shantilal Mangaldas's case (supra). In the

former case it was observed that the

constitutional guarantee was satisfied only if a

just equivalent of the property was given to the

owner : in the latter case it was held that

"compensation , being itself incapable of any

precise determination, no definite connotation

1053

could be attached thereto by calling it just

equivalent or full indemnification , and under

Acts enacted after the amendment of Article 31(2)

it is not open to the Court to call in question

the law providing for compensation on the ground

that it is inadequate, whether the amount of

compensation is fixed by the law or is to be

determined according to principles specified

therein. It was observed in the judgment in

Shantilal Mangalda's case (supra) at p.651 :

'Whatever may have been the meaning of the

expression compensation" under the unamended

Article 31(2), when the Parliament has expressly

encated under the amended clause that 'no such law

shall be called in question in any court on the

ground that the compensation provided by that law

is not adequate', it was intended clearly to

exclude from the jurisdiction of the court an

enquiry that which is fixed or determined by the

application of the principles specified as

compensation does not award to the owner a just

equivalent of what he is deprived.

That after discussing the decision in P. Vajravelu

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 22 of 27

Mudaliar's case Shah, J. observed thus :-

"The compensation provided by the Madras Act,

according to the principles specified was not the

full market vale at the date of acquisition. It

did not amount to full indmnification of the owner

: the Court still held that the law did not offend

the guarantee under article 31(2) as amended,

because the objection was only as to be adequacy

of compensation. In Shantilal Mangldas's case

(supra), the Court held that (after) the

constitution (Fourth Amendment) Act, Article 31(2)

guarantees a right to receive compensation for

loss of property compulsorily acquired, but

compensation does not mean a just equivalent of

the property. If compensation is provided by law

to be paid and the compensation is not a illusory

or is not determinable by the application of

irrelevant principles, the law is not open to

challenge on the ground that compensation fixed or

determine to be paid is inadequate.

Both the lines of thought which converge in the

ultimate results, support the view that the

principles

1054

specified by the law for determination of

compensation is behind the pale of challenge, if

it is relevant to the determination of

compensation and is a recognised principle

applicable in the determination of compensation

for property compulsorily acquired and the

principle is appropriate in determining the value

of the class of property sought to be acquired. On

the application of the view expressed in P.

Vajravelu Mudliars's case (supra) or in Shantilal

Mangaldas's case (supra), the Act, in our

judgment, is liable to be struck down as it face

to provide to the expropriated banks compensation

determined according to relevant principles.

It is seen that Shah, J. relied on the decision in

Shantilal Mangalda's case (supra) also in deciding the Bank

Nationalisation Case. The learned Judge does not say that

the earlier decision rendered by him in Shantilal Mangadas's

case stood overruled. In Kesvananda Bharati's case (supra)

no doubt Shantilal Mangaldas's case was discussed and

considered in the serveral judgments delivered in that case.

But it is seen that the said decision was not overruled. It

is true that in some of the judgments Kesvananda Bharati's

case (supra) there are observations to the effect that the

case of Shantilal Mangaldas (supra) was virtually overruled

or in substance overruled in the Bank Nationalisation case.

(supra). Some of the observations are:

"In State of Gujarat v. Shantilal Mangaladas and

Ors. [1969] 3 S.C.R. 341, the decision in Metal

Corporation of India [1967] 1 S.C.R. 255 was

overruled which itself was virtually overruled by

R.C. Cooper v. Union of India, [1970] 3 S.C.R. 530

(Per Shelat and Grover, J. P.282).

"In the Bank Nationalisation case the majority

decision virtually overruled the decision in

Guajart v. Shantilal. (Per Methew J. P.845).

"But soon thereafter came the majority decision in

R.C. Cooper v. Union of India, [1970] 3 S.C.R.

530. Cooper in substance overruled Shantilal

Mangaldas and restored the old position . (Per

Dwivedi, J. P.929).

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 23 of 27

But Hegde and Mukherjee, JJ. observed at page 336 thus

:

"Then came the Bank Nationalisation case. The

majority judgment in that case was delivered by

Shah, J. (as he

1055

then was). In that judgment he referred somewhat

extensively to the decision in Shantilal

Mangalda's case and other cases rendered by this

Court. He did not propose to deviate from the rule

laid down in Shantilal case. (Per Hegde &

Mukherjee, JJ P.336)

In the State of Karnataka v. Ranganatha Reddy (supra)

also there are observations made by Untwalia J. to the

following effect at page 652 :-

"Then came the decision in State of Gujarat v.

Shri Shantilal Mangaldas Ors. where Shah, J., as

he then was in his leading judgment to which was

appended a short concurring note by Hidayatullah

C.J., made a conspicuous departure from the views

expressed in Vajravelu's case and the case of the

Metal Corporation (supra) and the said decisions

were overruled. Thereafter came the decision of 11

Judges of this court the leading judgment being of

Shah, J. on behalf of himself and 9 others in what

is known as the Bank Nationalisation case in

Rustom Cavasjee Cooper v. Union of India. Although

in terms the decision of this Court in the case of

Shantilal Mangaldas (supra) was merely explained,

in substance it was over-ruled.

Expressions like 'virtually overruled' or 'in substance

overruled' are expressions of inexactitude. In such

circumstances, it is the duty of a Constitution Bench of

this Court which has to consider the effect of the precedent

in question to read it over again and to form its own

opinion instead of wholly relying upon the gloss placed on

it in some other decisions. It is significant that none of

the learned Judges was decided the subsequent cases has held

that the Act had become void on account of any

constitutional informity. They allowed the Act to remain in

force and the State Governments concerned have continued to

implement the provisions of the Act. What cannot be

overlooked is that the decision in Shantilal Mangaldas's

case (supra) was quoted in extenso with approval and relied

on by the very same judge while deciding the Bank

Nationalistion case (supra). He may have arrived at an

incorrect or contradictory conclusion in striking down the

Bank Nationalisation Act. The result achieved by him in the

subsequent case may be wholly wrong but it cannot have any

effect of the efficacy of the decision in Shantilal

Mangaldas case (supra). An inappropriate purpose for which a

precedent is used at a later date does not take away its

binding character as a precedent. In

1056

such cases there is good reason to disregard the later

decision. Such occasions in judicial history are not rare.

The history of the law relating to the right of labourers to

strike in a factory is one such instance. Temperton v.

Russell, [1893] 1 Q.B. 715 (C.A.), Allen v. Flood [1898]

A.C. 1, Quinn v. Leathem, [1901] A.C. 495 and other cases

belonging to that group show the ambivalence in the

attitudes of courts with regard to certain matters which

vitally affect society. As long as the Act, i.e., the Bombay

Town Planning Act, 1954 which was upheld by this Court in

Shantilal Mangaldas case has not been struck down by this

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 24 of 27

Court in any subsequent decision it would be wholly unjust

to declare it inferentially as having been declared as void

in a subsequent decision which depends mostly on the reasons

in Shantilal Mangaldas's case for its survival. With great

respect to the learned Judges who decided Kesavananda

Bharati's case and the case State of Karnataka v. Ranganatha

Reddy, we are not prepared to hold that the decision in

Shantilal Mangaldas's case is overruled by the Bank

Nationalisation case which has only explained Shantilal

Mangaldas's case but does not overrule it particularly after

the nation has first expressed itself in favour of the 25th

(Constitution) Amendment and then decided to delete Art.31

altogether from the Constitution. We cannot upset the

Constitution Bench decision in Shantilal Mangaldas's case

when no subsequent Constitution Bench has expressly

overruled it. We do not therefore find any substance in the

contention that the Act violated Article 31(2) of the

Constitution as it stood at the time when the Act was

enacted or at any time thereafter.

Then it is contended that the Act which does not

provide for an appeal from some of the decision of the Town

Planning Officer taken under section 32 of the Act, while it

has provided appeal to the Board of Appeal against some

other decisions taken under the very same section was

discriminatory. There is no rule that every decision of

every officer under a statute should be made appealable and

if it is not so made appealable the statute should be struck

down. It may be salutary if an appeal is provided against

decisions on questions which are of great importance either

to private parties or to the members of the general public,

but ordinarily on such matters the Legislature is the best

judge. Unless the Court finds that the absence of an appeal

is likely to make the whole procedure oppressive and

arbitrary, the Court does not condemn it as

unconstitutional. On going through the provisions of section

32 and other cognate provisions of the Act and considering

the status of the officer who is appointed as a Town

Planning Officer, we are of the view

1057

that it is not possible to hold that section 32 of the Act

is a provision which confers uncanalised and arbitrary power

on the Town Planning Officer merely because of the denial

of the right of appeal in some cases. Dealing with a similar

contention advanced against section 54 of the Act and Rule

27 of the Bombay Town Planning Rules, 1955 framed under the

Act which authorised summary eviction of the occupants of

land vesting in the local authority under section 53 of the

Act, this Court has held in M/s Babubbai & Co. Ors. v. State

of Gujarat, [1985] 2 S.C.C. 732, that the absence of a

corrective machinery by way of an appeal does not always

make a provision unreasonable. We agree with the above view.

In any event the remedy under Article 226 of the

Constitution of India is avaliable to a person aggrieved by

such orders.

We do not also find any substance in the allied

contention that if the Land Acquisition Act, 1894 had been

applied, the appellant would have had the benefit of the

machinery provided under section 18 and 54 of the Land

Acquisition Act, 1894 and since it is not available under

the procedure prescribed by the Act is the case of lands

taken under section 53 thereof the Act is discriminatory. If

the Land Acquisition Act, 1894 had been applicable, then all

the procedural and substantive provisions would have no

doubt become applicable. We have already held that the Act

is not bad for not extending the procedure of the Land

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 25 of 27

Acquisition Act, 1894 to the proceedings under the Town

Planning Scheme. For the reasons already given above in this

judgment we do not find it possible to strike down the

scheme on this ground.

It was next contended that the denial of the solatium

of 15 per cent (or 30 per cent, as the law now is) of the

market value of the land in addition to the compensation

payable for lands taken by the local authority for purposes

of the Scheme makes the Act discriminatory. Reliance is

placed on the decision of this Court in Nagpur Improvement

Trust and Anr. v. Vithal Rao Ors., [1973] 3 S.C.R. 39, in

which it is held that the different terms of compensation

for land acquired under two Acts would be discriminatory. In

that case the petitioner was a tenant of some field in a

village. He had applied to the Agricultural Land Tribunal

under a local Act for fixing the purchase prise of the said

field. The land in question however was acquired under the

Nagpur Improvement Trust Act, 1936. Aggrieved by the said

acquisition he filed a Writ Petition in the High Court of

Bombay, Nagpur Bench, challenging the validity of the Nagpur

Improvement Trust Act, 1936 on various grounds one of the

grounds being that the said

1058

Act empowered the acquisition of the land at prices lower

than those payable under the Land Acquisition Act, 1894. He

urged that the denial of the solatium at 15 per cent of the

market value was discriminatory. The High Court held that as

the acquisition was by the State in all cases where the

property was required to be acquired for the purposes of a

scheme framed by the Trust and such being the position, it

was not open to the State to acquire any property under the

provisions of the Land Acquisition Act, 1894 as amended by

the Improvement Trust Act without paying the solatium also.

It was therefore held by the High Court that the paragraphs

10(2) and 10(3) insofar as they added a new clause 3(a) to

section 23 and a proviso to subs-section (2) of section 23

of the Land Acquisition Act, 1894 were ultra vires as

violating the guarantee of Article 14 of the Constitution.

On appeal the judgment of the High Court was affirmed by

this Court by the above decision. The provision under

consideration in the above decision corresponds to section

11 and to section 84 of the Act, which we are now

considering. Section 59 of the Nagpur Improvement Trust Act,

1936 provided that the Trust might, with the previous

sanction of the State Government acquire land under the

provisions of the Land Acquisition Act, 1894 as modified by

the provisions of the said Act for carrying out any of the

purposes of the said Act. But the provisions which are

questioned before us are of a different pattern altogether.

They deal with the preparation of a scheme for the

development of the land. On the final scheme coming into

force the lands affected by the scheme which are needed for

the local authority for purposes of the scheme automatically

vest in the local authority. There is no need to set in

motion the provisions of the Land Acquisition Act, 1894

either as it is or as modified in the case of acquisition

under section 11 or section 84 of the Act. Then the Town

Planning Officer is authorised to determine whether any

reconstituted plot can be given to a person whose land is

affected by the scheme. Under section 51(3) of the Act the

final scheme as sanctioned by the government has the same

effect as if it were enacted in the Act. The scheme has to

be read as part of the Act. Under Section 53 of the Act all

rights of the private owners in the original plots would

determine and certain consequential rights in favour of the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 26 of 27

owners would arise therefrom. If in the scheme,

reconstituted or final plots are allotted to them they

become owners of such final plots subject to the rights

settled by the Town Planning Officer in the final Scheme. In

some cases the original plot of an owner might completely be

allotted to the local authority for a public Purpose. Such

private owner may be paid compensation or a reconstituted

plot in some other place. It may be a smaller or a bigger

plot. It may be that in some cases it

1059

may not be possible to allot a final plot at all. Sections

67 to 71 of the Act provide for certain financial

adjustments regarding payment of money to the local

authority or to the owners of the original plots. The

development and planning carried out under the Act is

primarily for the benefit of public. The local 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's case

(supra) as laying down generally that wherever land is taken

away by the Government under a separate statute compensation

should be paid under the Land Acquisition Act, 1894 only and

if there is any difference between the compensation payable

under the Land Acquisition Act, 1894 and the Compensation

payable under the statute concerned the acquisition under

the statute would be discriminatory. That case is

distinguishable from the present case. In State of Kerala

and Ors. v. T.N. Peter & Anr., [1980] 3 S.C.R. 290, also

section 34 of the Cochin Town Planning Act which came up for

consideration was of the same pattern as the provisions in

the Nagpur Improvement Trust Act, 1936 and for that reason

the Court followed the decision in the Nagpur Improvement

Trust s case (supra). But in that decision itself the Court

observed at pages 302 & 303 thus :-

"We are not to be understood to mean that the rate

of compensation may not vary or must be uniform in

all cases. We need not investigate this question

further as it does not arise here although we are

clear in our mind that under given circumstances

differentiation even in the scale of compensation

may comfortably comfort with Article 14. No such

circumstances are present here nor pressed."

The decision in P.C. Goswami v. Collector of Darrange,

A.I.R. 1982 S.C. 1214, also belongs to the category of State

of Kerala & Ors. v. T.N. Peter and Anr., (supra) both of

which are again distinguishable from the present one.

It cannot also be said as a rule that the State which

has got to supply and maintain large public services at

great cost should always pay in addition to a reasonable

compensation some

1060

amount by way of solatium. The interest of the public is

equally important. In any event it is not shown that the

compensation payable in this case is illusory and unreal.

We do not find any constitutional infirmity in the

provisions under challenge before us. There is no ground to

declare the Act which has been upheld in Shantilal

Mangaldas's case (supra) about 17 years ago as

unconstitutional now and to unsettle all settled

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 27 of 27

transactions drawing inspiration from certain vague

observations made in some subsequent decisions.

In the result, this appeal fails and it is dismissed

but without any order as to costs.

S.R. Appeal dismissed.

1061