Research › Search › Judgment

Karnataka High Court · body

2007 DIGILAW 608 (KAR)

B. R. MURALIDHAR v. STATE OF KARNATAKA

2007-09-20

ASHOK B.HINCHIGERI

body2007
ASHOK B. HINCHIGERI, J. ( 1 ) THESE three writ petitions are clubbed together and are being disposed of by this common order, as the questions of facts and law involved are one and the same. The challenge in this petition is to the notification, dt. 23. 06. 2005, issued under Section 17 of the Karnataka slum Areas (Improvement and Clearance) Act, 1973 (hereinafter referred to as 'slum Areas Act' ). ( 2 ) THE following lands of the petitioners are acquired for the purpose of the third respondent, Karnataka Slum Clearance Board. SI. No. Writ Petition No. Survey No. (all of Gavipuram village) Extent 1. 22611 of ? 2005 64 29 guntas 2. 64 1 acre 12 guntas 3. 65/2 1 acre 10 guntas 4. 65/2 14 guntas SI. No. Writ Petition No. Municipal No. 44/1 & 75/1 (all of Devanatha -char Street ) Extent 1. 20955 of 2005 64 240 ft. x 252 ft. 2. 65/2 125 ft. x 316 ft. SI. No. Writ Petition No. Site No. Extent 1. 21192 of 2005 76,77 and 78 Survey No. of Extent not mentioned in the 2. Kethama-ranahalli 16 writ petition Extent 22 guntas 3. Survey No. (all of Gavipuram 65/2 65/2 Extent 1 acre 10 guntas 14 guntas ( 3 ) THE learned counsel for the petitioners, Sri L. M. Chidanandayya has urged the following contentions: i) The Government issued the preliminary notification under Section 17 of the Slum areas Act to acquire the lands on 14. 10. 1982. After a long lapse of 23 years, the Government had issued the final notification only on 23. 06. 2005. As the government has not exercised the power of issuing the final notification U/s. 17 of the Slum Areas Act within the reasonable time from the date of the issuance of the preliminary notification, it is a fit case in which this Court has to declare that the acquisition has lapsed. ii) The reasons shown by the petitioners as to why the lands should not be acquired is not considered by the respondents. As per the proviso to Section 17 of the Slum Areas act, the respondents are duty bound to consider the objections to the proposed acquisition and pass appropriate orders thereon. In the instant case, the petitioners have taken the specific objection that the lands in question are not required for rehabilitation. As per the proviso to Section 17 of the Slum Areas act, the respondents are duty bound to consider the objections to the proposed acquisition and pass appropriate orders thereon. In the instant case, the petitioners have taken the specific objection that the lands in question are not required for rehabilitation. Without showing any consideration to these particular objections, the respondents ought not to have proceeded to issue the notification u/s. 17 of the Slum Areas Act. iii) Sri Chidanandayya has also made an alternative prayer. He requests that if the impugned notification U/s. 17 of the Slum areas Act is not quashed, then Section 20 of the Act be declared as ultra vires of the constitution. Section 20 of the Slum Areas act is extracted hereinbelow: "20. Amount payable - (1) The amount payable in respect of any land acquired under this Act shall be three hundred times the property tax payable in respect of such land on the date of publication of the notice referred to in section 17, under the Municipal law applicable to such area and where no such property tax is pay able in respect of such land, the property tax payable in respect of similar land adjacent thereto. (2) The prescribed authority shall, after holding an enquiry in the prescribed manner, determine by order the amount payable under sub-section (1) and publish the said order in the Official Gazette. A copy of the said order shall be communicated to the owner of the land and every person interested therein. (3) Where the owner of the land and the owner of the building on such land are different, the prescribed authority shall apportion the amount between the owner of the land and the owner of the building (in the same proportion as the value of the land bears to the value of the building on the date of the acquisition ). " iv) He submits that whenever the State acquires the lands in exercise of its eminent domain, the State is liable to compensate the land losers by paying the market value for their property. v) The statutory prescription is that the compensation payable shall be three hundred times the property tax payable. He submits that this is extremely arbitrary. He gives the hypothetical example of a small site measuring 30 x40' in Bangalore, which may fetch the value of Rs. v) The statutory prescription is that the compensation payable shall be three hundred times the property tax payable. He submits that this is extremely arbitrary. He gives the hypothetical example of a small site measuring 30 x40' in Bangalore, which may fetch the value of Rs. 40 lakh in the market. But if the owners of these vacant lands have been paying Rs. 200/-towards the property tax, they would be entitled to Rs. 60,000/ -. Paying a compensation of Rs. 60,000/-as per the formula contained in Section 20 of the slum Areas Act even when the property otherwise fetches Rs. 40 lakh, is downright irrational and unreasonable. vi) In support of his argument, he has relied on a judgment of the Hon 'ble Supreme court in the case of STATE OF BIHAR and OTHERS vs PROJECT UCHCHA vidya, SIKSHAK SANGH, AND others' The relevant portions of the judgment are extracted hereinbelow: "65. The word "takeover" would mean that the Government had thought of taking over the properties and assets of the schools together with the teaching and non-teaching staff. Takeover of schools in the context of the policy decision of the State does not appear to be an expression of an intendment for complete takeover of the management of the school. In the former sense takeover of such schools would be violative of Article 300-A of the Constitution. Article 300-A embodies the "doctrine of eminent domain " which comprises two parts, (i) acquisition of property in public interest; and (ii) payment of reasonable compensation therefor. 66 to 68. xxx xxx xxx 69. The right to manage an institution is also a right to property. In view of a decision of an eleven-Judge Bench of this Court in t. M. A. Pai Foundation vs State of Karnataka establishment and management of an educational institution has been held to be a part of fundamental right being a right of occupation as envisaged under Article 19 (l) (g) of the Constitution. A citizen cannot be deprived of the said right except in accordance with law. The requirement of law for the purpose of clause (6) of Article 19 of the Constitution can by no stretch of imagination be achieved by issuing a circular or a policy decision in terms of Article 162 of the Constitution or otherwise. Such a law, it is trite, must be one enacted by the legislature. The requirement of law for the purpose of clause (6) of Article 19 of the Constitution can by no stretch of imagination be achieved by issuing a circular or a policy decision in terms of Article 162 of the Constitution or otherwise. Such a law, it is trite, must be one enacted by the legislature. " vii) Nextly, Sri Chidanandayya drew support from a judgment of the Hon 'ble Supreme court in the case of JILUBHAI NANBHAI khachar AND OTHERS vs STATE OF gujarat AND ANOTHER. The relevant portion of the said judgment is extracted hereinbelow: "52. . . . The law may fix an amount or which may be determined in accordance with such principles as may be laid therein and given in such manner as may be specified in such law. However, such law shall not be questioned on the grounds that the amount so fixed or amount determined is not adequate. The amount fixed must not be illusory. The principles laid to determine the amount must be relevant to the determination of the amount. The doctrine of illusory amount or fixation of the principles to be arbitrary were evolved drawing support from the language originally couched in the unamended Entry 42 of List III which stood amended by the Constitution 7th Amendment act with the words merely "acquisition and requisition of Property ". Nevertheless even thereafter this Court reiterated the same principles. Therefore, the amendment to entry 42 of List III has little bearing on the validity of those principles. We are conscious that Parliament omitted Article 31 (2)altogether. However when the State exercises its power of eminent domain and acquires the property of private person or deprives him of his property for public purpose, concomitantly fixation of the amount or its determination be must in accordance with such principles as laid therein and the amount given in such manner as may be specified in such a law. However when the State exercises its power of eminent domain and acquires the property of private person or deprives him of his property for public purpose, concomitantly fixation of the amount or its determination be must in accordance with such principles as laid therein and the amount given in such manner as may be specified in such a law. However judicial interpretation should not be a tool to reinduct the doctrine of compensation as concomitance to acquisition or deprivation of property under Article 300-A. This would be manifest from two related relevant provisions of the Constitution itself- Article 30 (1-A) and second proviso to Article 31-A as exceptions to the other type of acquisition or deprivation of the property under Article 300-A. " ( 4 ) SRI M. Shivaprakash, the learned counsel for the petitioner in Writ Petition No. 22611/2005, has adopted the submissions of sri Chidanandayya. ( 5 ) SRI R. B. Sathyanarayana Singh, the learned Government pleader appearing for the respondents No. 1 and 2 submits that the slum Areas Act does not describe any period of limitation within which final notification has to be issued from the date of issuance of the preliminary notification. Without prejudice to this submission, he submits that on account of the pendency of a series of litigations, the matter could not be finalised. ( 6 ) IN response to Sri Chidanandayya's second submission, he brings to my notice that all the tenable objections raised by the petitioners are adequately considered by the respondents. In this regard, he brings to my notice the relevant paragraph of the first respondent's order, dt. 13. 03. 2001. Itreads as follows: " Regarding necessity for acquisition it is seen that a slum exists in the portion shown as slum area in the sketch. There are also some slum houses near college building. The slum is very congested. It is necessary to rehabilitate slum dwellers by providing them more space where they can build proper houses or Karnataka Slum Clearance Board can construct the houses. Further it is reported by the Secretary, K. S. C. B. that the slum dwellers of nearby slums can also be rehabilitated in this area. Hence acquisition of said land is necessary. " ( 7 ) SRI Nagarajappa, the learned counsel for the respondent no. Further it is reported by the Secretary, K. S. C. B. that the slum dwellers of nearby slums can also be rehabilitated in this area. Hence acquisition of said land is necessary. " ( 7 ) SRI Nagarajappa, the learned counsel for the respondent no. 3 adopts the arguments of Sri Sathyanarayana Singh, as far as they pertain to submissions (i) and (ii) urged on behalf of the petitioners. In addition thereto, he submits that the acquisition of the lands is not for any business or commercial purpose. They are being acquired for the social purpose of rehabilitating the slum-dwellers. Viewed in this perspective, the legislative prescription of their entitlement of compensation to 300 times of the property tax that they have been paying, has been working well till now. It has withstood the test of time. Therefore he submits that it need not be interfered with. He has also relied on a judgment in the case of STATE OF ANDHRA pradesh AND OTHERS ETC. vs Mcdowell and CO. AND others ETC. wherein it is held that it is permissible to strike down the legislation only on two grounds- (a) lack of legislative competence, (b) violation of fundamental rights or other constitutional provision. These two enumerated circumstances are not present in the instant case. ( 8 ) SRI Udaya Holla, the learned Advocate General made elaborate submissions in response to the challenge to the constitutional validity to Section 20 of the Slum Areas Act. He brings to my notice, the judgment of the Hon'ble Supreme Court in the case of MAHARAO saheb SHRI BHIM SINGHJI AND OTHERS vs UNION OF india AND OTHERS, wherein the compensation of two lakh rupees for the acquisition of the excess lands was held to be not illusory. The validity of Section 11 (6) of the Urban Land (Ceiling and regulation) Act, 1976 was upheld. ( 9 ) NEXTLY, he brings to my notice the decision of the Apex court in the case of JILUBHAI NANBHAI KHACHAR AND others (supra) wherein it is held that compulsory acquisition of lands does not require payment of just compensation or indemnification to the owner of the property expropriated. Payment of market value in lieu of acquired property is not sine quo non of acquisition. The apex Court further held that the adequacy of the resultant amoun2t can not be questioned in any court of law. Payment of market value in lieu of acquired property is not sine quo non of acquisition. The apex Court further held that the adequacy of the resultant amoun2t can not be questioned in any court of law. ( 10 ) THE learned Advocate General also sought to draw support from a Division Bench judgment of the Calcutta High Court in the case of BIHAR STATE ELECTRICITY BOARD AND OTHERS vs patna ELECTRIC SUPPLY CO. LTD. AND ANOTHER. The division Bench has taken the considered view that acquisition law cannot be called into question on the ground of the compensation being inadequate. He submits that the land acquisition is in exercise of eminent domain. Therefore power to acquire exists independently of article 300-A. ( 11 ) THE submissions of the learned counsel have received my anxious consideration. The first contention urged on behalf of the petitioner that the acquisition is bad, in view of the long gap between the issuance of the preliminary notification and final notification, is devoid of merit because in the Slum Areas Act,no limitation period is prescribed for issuing the final notification after the issuance of the preliminary notification. The legislature, in exercise of its wisdom, has thought it fit not to prescribe any period of limitation. That is why certain provisions found in the Land Acquisition Act, 1894 are not there in the Slum areas Act. Proviso (ii) to Section 6 ( 1) of the Land Acquisition Act reads as follows: "6 (1) (i) xxx xxx xxx provided that no declaration in respect of any particular land covered by a notification under Section 4, sub-section (1 ).- (i) xxx xxx xxx (ii) published after the commencement of the Land Acquisition (Amendment) Act, 1984, shall be made after the expiry of one year from the date of the publication of the notification ". Thus, between the preliminary notification and final notification (declaration), a maximum time-limit of one year is provided for. ( 12 ) SECTION 11-Aofthelandacquisitionactreadsasfollows: " 11-A. Period within which an award shall be made - The Collector shall make an award under Section 11 within a period of two years from the date of the publication of the declaration and if no award is made within that period, the entire proceedings, for the acquisition of the land shall lapse. ( 12 ) SECTION 11-Aofthelandacquisitionactreadsasfollows: " 11-A. Period within which an award shall be made - The Collector shall make an award under Section 11 within a period of two years from the date of the publication of the declaration and if no award is made within that period, the entire proceedings, for the acquisition of the land shall lapse. " ( 13 ) SLUM Areas Act contains no such provisions; they can not be read into the Act. I therefore negative the prayer for a declaration that the acquisition has lapsed. ( 14 ) THE second contention urged on behalf of the petitioner also fails in view of the consideration of their objections, as is evident from the order considering the objections. The relevant portion of the said order extracted hereinabove clearly shows that the petitioners' objections are adequately considered. 1 therefore decline to quash the impugned notification. The challenge to the notification issued u/s. 17 of the Slum Areas Act fails. ( 15 ) THE last submission urged on behalf of the petitioner merits serious consideration. It is trite position in law that anything that is arbitrary is also unconstitutional. When the State acquires the land from private individuals in exercise of its eminent domain, the land losers are entitled to be compensated in terms of money and the compensation cannot be illusory. It has to be as per the prevailing market value. The Hon'ble Supreme Court in any number of cases has held that the market value means the price a willing purchaser would pay to a willing seller. ( 16 ) I also do not see any nexus between the payment of property tax and the determination of market value. The market value of the property has gone up phenomenally high. As per the hypothetical illustration given by Sri Chidanandayya, the computation of the compensation amount as per the formula contained in Section 20 of the Slum Areas Act would be Rs. 60,000/-, whereas its real market value is around Rs. 40 lakh. Paying the compensation based on the property tax is absolutely unjustified. Therefore it does not pass the test of reasonableness. It offends Article 14 of the Constitution of india. 60,000/-, whereas its real market value is around Rs. 40 lakh. Paying the compensation based on the property tax is absolutely unjustified. Therefore it does not pass the test of reasonableness. It offends Article 14 of the Constitution of india. ( 17 ) ANOTHER thing that cannot be lost sight of is that if the same land is acquired for another public purpose under a different enactment, the land loser is entitled to get the market value determined as per the provisions contained under Section 23 and 24 of the Land Acquisition act, 1894 and if the land is acquired under the Slum Areas Act, he is entitled to get amount equivalent to 300 times of the property tax. This creates a situation of unfair discrimination. In this regard, it is profitable to refer to the Constitution Bench judgment of the Hon'ble supreme Court in the case of DEPUTY COMMISSIONER AND collector, KAMRUP AND OTHERS VS. DURGANATH sarma. Head note (G) of the said judgment is extracted hereinbelow: " (G) In the State of Assam some land may be taken under Assam Act No. 6 of 1955 for the purpose of works and other measures in connection with flood control and prevention of erosion on payment of nominal compensation while an adjoining land may be taken for other public purposes under the land Acquisition Act, 1894 on payment of adequate compensation. This differential treatment of land acquired under the two Acts is not permissible under Article 14. The constitutional guarantee of Article 14 requires that all persons shall be treated alike in like circumstances and conditions. The Article permits reasonable classification and differential treatment based on substantial differences having reasonable relation to the objects sought to be achieved. The classification of land required for works and other measures in connection with flood control and prevention of erosion and land required for other public purposes has no reasonable relation to the object sought to be achieved, viz. , acquisition of the land by the state. In either case, the owner loses his land and in his place, the State becomes the owner. There is unjust discrimination between owners of land similarly situated by the mere accident of some land being required for purposes mentioned in Assam Act No. 6 of 1955 and some land being required for other purposes. Assam Act No. 6 of 1955 is violative of A rticle 14. There is unjust discrimination between owners of land similarly situated by the mere accident of some land being required for purposes mentioned in Assam Act No. 6 of 1955 and some land being required for other purposes. Assam Act No. 6 of 1955 is violative of A rticle 14. AIR 1965 SC 1017 Rel. on. " ( 18 ) THUS there has to be equal protection of law. ( 19 ) I am also not in a position to give acceptability to the submissions advanced by Sri Nagarajappa, the learned counsel for the respondent No. 3. Just because the lands are acquired for discharging the State's social service obligations, proper compensation to the land losers cannot be denied. The land losers cannot be fastened with the social service obligations of the State. ( 20 ) IN exercise of its eminent domain when the State acquired the property for public use, but without the owner's consent, the same has to be upon paying just compensation. The compensation payable must be a just equivalent of what the owner is deprived of. What principles will guide the determination of the amount payable fall within the legislative province. But the same have to meet the basic requirement of full indemnification of the expropriated owner. The compensation scheme under the Slum Areas Act does not provide for the payment of compensation equivalent to the market value of the land. The true valuation of the land involves both computation and judgement. ( 21 ) FOR the aforesaid reasons, I strike down Section 20 of the slum Areas Act as unconstitutional. But the question is, what should follow it. If the lands are acquired under the Slum Areas Act, how the compensation is to be determined. It is for the legislature to decide and prescribe the reasonable method of determining the market value for the purpose of paying compensation to the land losers. However until such time that some legislative provision replaces Section 20, no vacuum should be created. During the transition between today, the date of striking down of Section 20 of the Slum Areas Act and the commencement of the necessary legislative amendment, the determination of the market value has to be in accordance with Section 23 and 24 of the Land Acquisition Act, 1894, as the provisions of the said Act have withstood the test of time. ( 22 ) IN the result, these writ petitions are allowed in part. No order as to costs.