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PETITIONER:

SARWAN SINGH ETC. ETC.

Vs.

RESPONDENT:

THE STATE OF PUNJAB & ORS. ETC.

DATE OF JUDGMENT12/12/1974

BENCH:

GOSWAMI, P.K.

BENCH:

GOSWAMI, P.K.

RAY, A.N. (CJ)

REDDY, P. JAGANMOHAN

KHANNA, HANS RAJ

CITATION:

1975 AIR 394 1975 SCR (2)1007

1975 SCC (1) 284

ACT:

Punjab Town Improvement Act, 1922-S. 59(a)-Constitutional

validity of--ultra vires Art. 14-Whether the Tribunal has

adopted any unreasonable principle in determining the

compensation.

HEADNOTE:

The appellants' land within the municipality was acquired

for a development scheme of the Improvement Trust. A

notification was issued under s. 36 of Punjab Town

Improvement Act. 1922. Aggrieved by the award of the Land

Acquisition Collector of the Improvement Trust and the

decision of the Tribunal constituted under the Improvement

Act the appellants challenged the order of the Tribunal in a

writ petition, which was dismissed by the High Court.

On appeal to this Court it was contended (i) that s. 59(a)

of the Punjab Town Improvement Act, 1922 was ultra vires

Art. 14 of the Constitution and (ii) that the Tribunal took

an absolutely wrong principle into consideration in determining

the compensation of the lands acquired.

Dismissing the appeals,

HELD : (1) (a) Acquisition of land under the Improvement Act

admits of a reasonable basis of classification and s. 59(a)

is not violative of Art. 14 of the Constitution. There

can be no complaint that there is no guideline in he

Improvement Act in determining the, compensation since

referentially the Principles under the Acquisition Act had

been adopted and such other principles ire also added as may

be appropriate in the nature of things. The object of the

lmprovement Act being improvement of the towns covers a

specific, though wide, field. Under' the Improvement Act

there is a statutory obligation upon the Trusts to frame

appropriate schemes in which case, the matter is likely to

take air and the public as well as the land owners may

benefit materially from knowledge of acquisition prior to

the actual notification under s. 36 as against a preliminary

notification under s. 4 of the Land Acquisition Act which

appears in the gazette all of a sudden. Although

acquisition under the Acquisition Act is also generally for

public purpose the character of the acquisition under the

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Improvement Act is different and the difference has a

definite and intimate nexus with the principal object of the

Act, namely. improvement of towns. No valid exception can

be taken to the adoption of the Acquisition Act with

modifications to suit the requirements of the Improvement

Act, and in particular, to the deletion of the provisions of

appeal under s. 54 of the Acquisition Adt. [1011 C; 1010

E-H]

(b) Denial of the right of appeal available under the

Acquisition Act does not make s. 59(a) ultra vires Art. 14

of the Constitution. The legislature, by making the order

of the Tribunal final under s. 59(d) seeks to avoid delay in

the course of litigation to defeat the purpose of the

scheme,, framed under the Act. Right of appeal is a

creature of the statute and mere denial or taking away of

such a right under the law cannot be considered as an

infringement of a person's fundamental right. [1011 D]

(2)The Tribunal has not adopted any unreasonable principles

in ignoring the sales that have taken place after the date

of notification under s. 36. The notification under s. 36

being of September 16, 1960. that is the material date which

should be reckoned for purposes of determining compensation.

The sale that takes place after the date of notification

under s. 36, as distinct from one under s. 4 of the Land

Acquisition Act, cannot be taken as a reasonable guide for

determination of compensation under s. 23 of the Acquisition

Act as amended by the Improvement Act. [ 1012 B-C]

10 08

JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 345 &

347 to 349 of 1971.

Appeals from the judgment and decree dated the February 5,

1970 of the Punjab & Haryana High Court,in C.W. Nos.

3627/68, 273, 274 and 1380 of 1969.

B. Sen, and R. L. Kohli, for the appellants.

B. P. Singh for respondents No.3 (In C.A.No.347/71) and

respondent No. 2 (In C.A. No. 345-348-349/71).

V C. Mahajan (In C.A. No. 245/71) Harbans Singh (In C.A No.

347/71) O. P. Sharma and N..K. Agarwala (In C.A. No. 345/71

for respondent No. 1 (In all the appeals.)

The Judgment of the Court was delivered by

GOSWAMI, J.--The questions that are raised in these appeals

by certificate by Mr. B. Sen on behalf of the appellants are

these :-

(1) Section 59(a) of the Punjab Town Improvement Act, 1222

(Punjab Act 4 of 1922) is ultra vires article 14 of the

Constitution.

(2) The Tribunal took absolutely a wrong principle into

consideration in determining the compensation of the lands

acquired.

(3) The Tribunal has not applied its own rule as to the

rate of compensation uniformly to the different appellants.

The facts of one appeal (Civil Appeal No. 435 of 1971) may

be sufficient for our purpose. Land measuring 165 acres

including the appellant's land measuring 6 bighas, 4 biswas

and 17 biswasi, comprised in various khasra numbers situated

in the revenue estate of Piru Banda within the municipal

limits of Ludhiana Municipal Committee, was acquired for a

development scheme of the Ludhiana Improvement Trust

(hereinafter called the Trust) styled as Model Town

Extension Scheme No.1. A notification under section 36 of

the Punjab Town Improvement Act (hereinafter called the

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Improvement Act), which is analogous to section 4 of the

Land Acquisition Act, 1894 (hereinafter called the

Acquisition Act) was published on September 16, 1960. The

present appeal relates to the acquisition of the appellant's

land in village Piru Banda only. The Land Acquisition

Collector, Improvement Trust, Ludhiana, made his award on

March 31, 1964, with regard to the said land. Aggrieved by

the said award the appellant and other land owners made

separate applications under section 18 of the Acquisition

Act for making a reference to the Tribunal constituted under

the Improvement Act (hereinafter respondent No. 2). The

cases were then referred to the Tribunal. The second

respondent took up all the references together and delivered

a common Judgment on October 16, 1968. The Collector had

earlier classified the land acquired under three categories,

namely, belt 'A', 'B' and 'C' fixing the price for valuation

at the rate of Rs. 60/- Rs. 40/- and Rs. 20,/-

100 9

per square yard respectively. The, Tribunal in the case of

the appellant in Civil Appeal No. 345 of 1971 under

discussion, modified the award to the extent that the price

of the land comprised in belt 'C' was raised from Rs. 20/-

to Rs. 30/- per square yard while the price for the area

covered by belt 'B' was upheld. The appellant challenged

the order of the Tribunal by a writ petition in the High

Court of Punjab and Haryana. The High Court following an

earlier decision dismissed the writ petition. The High

Court, however, granted a certificate to appeal to this

Court under article 133(1) (a) of the Constitution.

With regard to the first point, it is submitted that there

is no guideline in the Improvement Act itself for

determining compensation. However, it is admitted that by

section 59 of the Improvement Act the Acquisition Act is

made applicable with certain modifications for the purpose

of acquiring land for the Trust. It is pointed out that by

section 59(a) of the Improvement Act the Tribunal is not

deemed to be the court under the Acquisition ' Act for the

purpose of section 54 of the latter Act and under section

59(d) the award of the Tribunal is deemed to be the award of

the court under the Acquisition Act and shall also be final.

It is, therefore, contended that the two rights of appeal,

which are available under section 54 of the Acquisition Act,

are denied when land is acquired under the Improvement Act.

Right of appeal being denied in cases of acquisition by the

Improvement Trust, section 59(a) is ultra vires article 14

of the Constitution. It is submitted that the land acquired

for the Trust is as much for public purpose as acquisition

of the same for public purpose under the Acquisition Act.

There is, according to counsel a clear discrimination when

land is chosen to be acquired under the Improvement Act when

it could have been done under the Acquisition Act. It is

submitted that there is, therefore, an infringement of

fundamental right of the appellants guaranteed under article

14 of the Constitution in denying the right of appeal.

The Improvement Act was passed in the year 1922. The state-

ment of objects and reasons shows that "the object of the

Act is to make provision for the improvement and expansion

of towns, by the creation of Trusts vested with statutory

powers to enable them to acquire land and carry out such

improvements and extensions as may be found requisite".

Section 3 of the Improvement Act provides for creation( and

incorporation of trusts. Section 22 to 44 in Chapter IV

make detailed provisions for schemes under the Improvement

Act. By section 36 when a scheme under this Act has been

framed, the Trust shall prepare a notice stating various

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particulars mentioned therein and publish the name. This

section is a substitute for section 4 of the Acquisition

Act. Section, 42 provides for notification of sanction of

every scheme and under sub-section (2) thereof the noti-

fication under sub-section (1) in respect of any scheme

shall be conclusive evidence that the scheme has been duly

framed and sanctioned. The section again is a substitute

for section 6 of the Acquisition Act. Chapter V details the

powers and duties of the Trusts where a scheme has been

sanctioned. Section 59 of which clause (a) is impugned

reads as under :-

1010

"For the purpose of acquiring land under the

Land

Acquisition Act, 1894 (1 of 1894), for the

trust-

(a) the Tribunal shall (except for the

purposes of section 54 of the said Act) be

deemed to be the Court, and the President of

the Tribunal shall be deemed to be the Judge,

under the said Act;

(b) the said Act shall be subject to the

further modifications indicated in the

Schedule to this Act;

(c) x x x

x

(d) the ward of a Tribunal shall be deemed

to be the award of the Court under the Land

Acquisition Act, 1894, (1 of 1894), and shall

be final".

Under section 60 the Tribunal shall consist of a President

and two assessors land the President shall be a person

qualified for appointment as a Judge of the High Court of

Punjab and Haryana. In the Schedule attached to the

Improvement Act, further modifications in the Acquisition

Act have been introduced as provided for in section 59. Para

10 of the Schedule provides for amendment of section 23 of

the Acquisition Act and prescribes, inter alia, some

supplemental principles for determining the market value of

the land according to use to which the land was put at the

material date.

It is clear there can be no complaint that there is no

guideline in the Improvement Act for determining

compensation since referentially the principles under the

Acquisition Act have been adopted and such other principles

are also added as may be appropriate in the nature of

things. Land acquired for the Trusts under the Improvement

Act, as will be shown below, can be reasonably placed under

a well-defined category in view of the scheme underlying the

detailed provisions in the said Act. It is well settled

that article 14 does not abhor a reasonable classification

provided the basis of the classification has a rational

relation to the object to be achieved by the Act. Here the

object of the Improvement Act being improvement of the towns

covers a specific, though a wide, field as may be evidenced

by the elaborate provisions for preparation and

implementation of schemes by the Trust under the said Act.

Leaving aside the case of companies, which are dealt with

under different provisions, the Government under the Acqui-

sition Act acquires land for public purposes without the

preliminary requirements of any schemes for utilisation of

the particular land. On the other hand, under the

Improvement Act there is a statutory obligation upon the

trusts first to frame appropriate schemes in which case the

matter is likely to take air and the public as well as the

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land owners may benefit materially from knowledge of

acquisition prior to the actual notification under section

36 as against a preliminary notification under section 4 of

the Acquisition Act which appears in the gazette a11 of a

sudden. This pre-acquisition difference of proccdure is

1011

significant as the material date for determination of

compensation ill either case is the publication of the

notification under section 36 and section 4 respectively.

This fact is of great relevance as the real grievance in

these appeals is against the denial of a right of appeal

against the decision of the Tribunal appertaining to the

domain of possibility of enhancement of compensation in

appeals. Although acquisition under the Acquisition Act is

also generally for public purpose, the character of the

acquisition under the Improvement Act is different and the

difference has a definite and intimate nexus with the

principal object of the Act, namely, improvement of towns

which is the dominant purpose. No valid exception can,

therefore, be taken to adoptation of the Acquisition Act

with modifications to suit the requirements of the

Improvement Act and in particular to the deletion of the

provisions of appeal under section 54 of the Acquisition

Act. Acquisition of land under the Improvement Act admits

of a reasonable basis of classification and section 59(a)

is, therefore, not violative of article 14 of the

Constitution.

Again denial of the right of appeal available in the case of

acquisition under the Acquisition Act does not make section

59 (a) ultra vires article 14 of the Constitution. The

Improvement Act constitutes a Tribunal with two assessor,,

unlike in the Acquisition Act. The President of the

Tribunal shall be a person qualified for appointment as a

Judge of the High Court. One of the assessors is appointed

bY the State Government and the Other assessor is appointed

by the Municipal Committee and on failure to do so by the

Committee, by the State Government. The legislature by

making the order of the Tribunal final under section 59(d)

seeks to avoid delay in the course of litigation to defeat

the purpose of the schemes framed udder the Act. Right of

appeal is a creature of the statute and mere denial or

taking away of such a right under the law cannot be

considered as an infringement of a person's fundamental

right. The first submission of the learned counsel cannot,

therefore, be accepted.

With regard to the second submission, Mr. Sen submits that

the Tribunal has taken into account only the sale deeds that

have been produced in, the cases executed prior to the date

of the notification under section 36, namely, September 16,

1960. ',According to counsel the Tribunal also took into

account sale deeds executed within five years before that

date but refused to take into consideration the sale deeds

executed after the said date of notification. This, says

the learned counsel, is absolutely unreasonable and is a

wrong principle which the Tribunal has adopted in

determining compensation under the Act. We are unable to

accept this submission. Under section 23 of the Acquisation

Act, as amended in 1923, the court has to take into

consideration the market value of the land at the date of

publication of the notification under section 4, sub-section

(1) of that Act. Under para 10 of the Schedule to the

Improvement Act, the court has to take into consideration

under section 23)1) of the Acquisition Act the market value

of the land at the date of the publication of the

notification under section 36 of the Improvement Act, in The

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present case, which is not one of acquisition under section

32 of the Improvement Act. The notification under section

36 in the pre-

1 0 12

sent case being of September 16, 1960, that is the material

date which should be reckoned for purposes of determining

compensation. It is well-known that once a notification for

acquisition is published people start upon various

speculations and the future potentiality of the land becomes

very important and that affects the price of the land sold

in the area sought to be acquired or in close proximity to

it and this rise in potential value has a definite

connection with the issuance of the notification for

acquisition of the land. The sale that takes place after

the date of a notification under section 36, as distinct

from one under section 4 of the Acquisition Act, cannot be

taken as a reasonable guide for determination of

compensation under section 23 of the Acquisition Act as

amended by the Improvement Act. The Tribunal has,

therefore, not adopted any unreasonable principles in

ignoring the sales that have taken place after the date of

notification under section 36. The second submission of the

learned counsel also fails.

With regard to the third and last submission of the

appellants we are unable to interfere with the quantum of

compensation when no case of gross injustice and

discrimination has been made out on the facts and

circumstances taken into account by the Tribunal.

In the result all the appeals are dismissed but we make no

order as to costs.

P.B.R. Appeals dismissed.

L346SupCI/74 -2500 - 29-10-75- GIPF.

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