Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7268 OF 2004
Mohanlal Nanabhai Choksi (Dead) by Lrs. ...Appellant(s)
- Versus -
State of Gujarat & Others ...Respondent(s)
J U D G M E N T
GANGULY, J.
1.
The appellants are the owners of the lands
bearing Survey Nos. 1587 to 1596, 1597-A-
Part, 1599 to 1601 of Ward No. 4 of Taluka
Choryasi of the city of Surat in Gujarat.
2.
On 22.08.1980, the Standing Committee of
the Surat Municipal Corporation
1
(hereinafter ‘SMC’), passed a resolution
with a proposal to the State Government,
under Section 78 of the Bombay Provincial
Municipal Corporations Act, 1949
(hereinafter ‘BPMC Act’), for initiating
land acquisition proceedings under the Land
Acquisition Act, 1894, for acquiring the
abovementioned land of the appellants. The
said land, admeasuring 7168.09 sq. mts.,
was to be acquired for the setting up of a
vegetable market. The said resolution was
approved and the proposal was sanctioned by
the State Government on 30.07.1981.
3.
On 3.03.1986, the first Development Plan
under the Gujarat Town Planning & Urban
Development Act, 1976 (hereinafter the
‘Development Act’) was under preparation
for the Surat Urban Development Authority
(hereinafter ‘SUDA’). During the pendency
of the said plan, the State Government
2
sanctioned the abovementioned proposal, and
therefore the land in question was kept
reserved for a vegetable market for SMC.
4.
On 9.2.1990, a notification was issued
under Section 4 of the Land Acquisition
Act, 1894 for acquiring the lands of the
appellants. The appellants, on 14.3.1990,
filed their objections under Section 5A of
the Land Acquisition Act. However the
objections were overruled and then followed
a notification under Section 6 of the said
Act on 8.02.1991.
5.
The appellants, on 16.3.1991, filed a
special civil application (No. 3435/1991)
before the Gujarat High Court, challenging
the notifications under Sections 4 and 6 of
the Land Acquisition Act.
6. In 1996-97, SUDA started revising the
Development Plan, and in its revision the
3
land was shown as reserved for the
vegetable market of SMC.
7.
On 17.05.2001, a notification was issued by
the State Government under Section 17 of
the Development Act, whereunder it was
proposed to de-reserve the lands that had
been reserved for the establishment of a
vegetable market by SMC and place them in
the residential zone. SMC objected to the
said proposal of de-reservation on
13.07.2001.
8.
The Gujarat High Court by the impugned
judgment dismissed the special civil
application (No.3435/1991) on 1.02.2002 and
allowed the acquisition of the lands of the
appellants for setting up a vegetable
market.
4
9. In the impugned judgment the Hon’ble High
Court, inter alia, held as follows:
a.
A major part of the land in question was open
land, the construction upon it was very old
th
and hardly 1/10 of the land was occupied by
structures.
b.
The land was required for a public purpose in
terms of Sections 78 of the BPMC Act, and 12
(2) (b) read with Section 20 of the
Development Act.
c.
The other markets, which the appellants claim
as very closeby, were actually quite far
away. SMC needs to provide a market close to
the people so that they do not have to move
far to purchase their daily necessities. A
vegetable market is required to be near the
people, especially in India, as in India
people buy their fresh vegetables daily.
d.
The notification dated 17.05.2001 made it
clear that it was a draft development plan,
and suggestions and objections were invited
from persons for modification of the said
Plan. Therefore, the notification dated
17.05.2001 was merely a proposal to modify
the draft Development Plan and did not
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reflect a decision to de-reserve the lands of
the appellants.
e.
A reading of Section 63(12) read with Section
66(42) of the BPMC Act made it clear that
there was an obligatory duty on SMC to
construct and maintain a public market, for
which it can take appropriate action as
required under the Act. Further the scheme of
the Act clearly indicated that SMC was
competent to establish a market.
f.The appellants had raised a contention that
SMC had no right to acquire the land and at
most the State Government could acquire land.
The High Court dismissed the said contention
holding once a notification was published
under Section 6 after complying with the
provisions of the Land Acquisition Act, it
was conclusive evidence that the land was
required for a public purpose and the Court
could not go behind the said notification.
g.
The appellants were neither agriculturalists
nor producers of agricultural produce, nor
dealers or office bearers of the Surat
Agricultural Produce Market Committee, and as
such they had no right to question the
authority of SMC to initiate acquisition
proceedings for a vegetable market.
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h.
The 1963 Act applied only to bulk sales and
not retail sales. The SMC was providing a
market so that the retailers and consumers
have no difficulty in the sale/purchase of
commodities. Retailers were excluded from the
purview of the 1963 Act and Rules framed
thereunder. Thus, the SMC could set up the
vegetable market as it was doing the same for
retailers. The 1963 Act had been enforced to
regulate transactions between traders and
agriculturalists, in order to prevent
exploitation of the latter by the former.
Thus, a market for agriculturalists and
traders could only be set up under the
provisions of the 1963 Act, but the same did
not and would not apply to retailers dealing
in small quantities. There was nothing in the
1963 act to indicate that transactions
between the ultimate consumers and the
vendors was controlled or that the local
authority was prohibited from setting up a
vegetable market for the same.
10.
The appellants on 19.3.1992 filed an SLP
(No.7559/2002), before this Court raising,
inter alia, the following main contentions:
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a.
SMC, acting under the provisions of the BPMC
Act, had no authority to establish the
vegetable market as there was a later and
special Act passed by the Gujarat government,
namely the Gujarat Agricultural Produce
Market Act, 1963 (hereinafter the ‘1963 Act’)
and under 1963 Act a vegetable market could
only be established by a Market Committee
constituted under the 1963 Act.
b.
There were markets already established within
a radius of 1 and 1/2 kms, and thus there was
no need to establish a vegetable market. It
was also contended that there was no
mandatory duty on the SMC to establish the
said market, and that establishing such a
market would only lead to traffic problems as
the area was a congested area in the middle
of the city. The appellants also stated that
the area sought to be acquired was occupied
by many tenants with many superstructures on
it.
c.
The lands in question had been reserved in
the Final Development Plan of SUDA, but there
was a proposal to de-reserve the said lands
(by notification dated 17.05.2001), and thus
8
the notifications under Sections 4 and 6 of
the Land Acquisition Act would not survive.
11.
On 2.09.2004, the State Government issued a
notification under Section 17(1)(c) of the
Development Act sanctioning the revised
Development Plan (called the revised Final
Development Plan). In the said plan, the
State Government, due to the objections
raised by SMC, did not accept the proposal
for de-reservation of the appellants’
lands. Thus, the reservation of the lands
for a vegetable market for SMC was
continued.
12.
On 22.04.2002, this Court in the pending
SLP stayed further steps regarding the
proposed acquisition of land and the
interim order of stay was continued on
5.11.2004.
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13. This Court is of the view that among the
contentions which have been raised by the
appellants herein, the one relating to non-
applicability of BPMC Act, to initiate an
acquisition by the State for establishment of a
vegetable market in the context of enactment of a
later and a special Act, namely, the 1963 Act, is
of some substance.
14. Admittedly, from the resolution of SMC, it is
clear that it was relying on Section 78 of the BPMC
Act for initiating its proposal of acquisition of
land for the establishment of a vegetable market.
Section 78 of the BPMC Act runs as under:
“ 78. Procedure when immovable property
cannot be acquired by agreement.-
(1) Whenever the Commissioner is unable
under section 77 to acquire by agreement
any immovable property or any easement
affecting any immovable property vested in
the Corporation or whenever any immovable
property or any easement affecting any
immovable property vested in the
Corporation is required for the purposes
10
of this Act, the State Government may, in
its discretion, upon the application of
the Commissioner made with the approval of
the Standing Committee and subject to the
other provisions of this Act, order
proceedings to be taken for acquiring the
same on behalf of the Corporation, as if
such property or easement were land needed
for a public purpose within the meaning of
the Land Acquisition Act, 1894 (1 of
1894).
(2) Whenever an application is made under
sub-section (1) for the acquisition of
land for the purpose of providing a new
street or for widening or improving an
existing street it shall be lawful for the
Commissioner to apply for the acquisition
of such additional land immediately
adjoining the land to be occupied by such
new street or existing street as is
required for the sites of buildings to be
erected on either side of the street, and
such additional land shall be deemed to be
required for the purposes of this Act.
(3) The amount of compensation awarded and
all other charges incurred in the
acquisition of any such property shall,
subject to all other provisions of this
Act, be forthwith paid by the Commissioner
and thereupon the said property shall vest
in the Corporation.”
15. A perusal of Sub-section(1) of Section 78 shows
that the State Government may, in its discretion,
upon application of the Commissioner, order
11
proceedings to be taken for acquiring the land in
question if the SMC needs it for the purposes of
this Act. Section 63 of the BPMC Act provides for
certain categories of matters in respect of which
SMC is competent to take steps and one such step is
provided under Section 63(12). Under Sub-section 12
of Section 63, SMC can take steps for:
“63. (12) the construction or acquisition
and maintenance of public
markets and slaughter-houses and
tunneries and the regulation of
all markets and slaughter-houses
and tunneries;"
16. Section 2(33) of BPMC Act defines a ‘market’.
The said definition is very broad and is set out
herein below:
”2. (33) "market" includes any place
where persons assembly for the
sale of, or for the purpose of
exposing for sale, live-stock or
food for live-stock or meat,
fish, fruit, vegetables, animals
intended for human food or any
other articles of human food
whatsoever with or without the
consent of the owner of such
place, notwithstanding that
there may be no common
regulation of the concourse of
buyers and sellers and whether
or not any control is exercised
over the business of or the
persons frequenting the market
12
by the owner of the place or any
other person;”
17. Relying on these provisions of BPMC Act, it has
been argued by the learned counsel for the
appellants that a Municipal Commissioner is
authorized to set up a market within the meaning of
Section 2(33) of BPMC Act. Such a market is much
wider than a vegetable market.
18. The learned counsel for the appellants
buttressed the argument by further reference to the
1963 Act. Referring to the Statement of Objects and
Reasons of the 1963 Act, learned counsel urged that
the said 1963 Act has been enacted to consolidate
and amend the law relating to buying and selling of
agricultural produce and the establishment of
markets for agricultural produce in the State of
Gujarat. The Statement of Objects and Reasons of
the 1963 Act, in the Gujarat Government Gazette
Extraordinary dated March 22, 1963 is as follows:
13
“ STATEMENT OF OBJECTS AND REASONS .
As regards the regulation of sales and
purchases of agricultural produce, there
is in force, in the Bombay area of the
State, the Bombay Agricultural Produce
Markets Act, 1939, and in the Saurashtra
area of the State, the Saurashtra
Agricultural Produce Markets Act, 1955.
There is no corresponding law in force in
the Kutch area of the State.
2. The aforesaid Bombay Act is on the
statute book for the last 23 years and
during that period it has undergone
various changes from time to time to suit
the development and growth of regulated
agricultural produce markets.
3. Government had appointed a Committee
under the Chairmanship of Shri
Jashvantlal Shah, the then Deputy
Minister for Co-operation, to review the
entire position of agricultural produce
markets in the light of the experience
gained in the day-to-day working thereof
and to suggest amendments, if any, to
the existing Law. Accordingly the
Committee has suggested various
amendments. In pursuance of the policy of
the State to bring about uniformity in
the laws in force in the State, it is
proposed to consolidate and amend the law
relating to the regulation of buying and
selling of agricultural produce in the
whole of the State Of Gujarat. The
present Bill seeks to achieve that
object. The Bill mainly follows the
Bombay Agricultural Produce Markets Act,
1939 (hereinafter referred to as "the
existing Act'). Various amendments
suggested by the Committee have also been
incorporated in the Bill.”
19. The learned counsel for the appellants further
urged that the Act of 1963 is a later and a special
14
law for establishment of a market for agricultural
produce in the State. The learned counsel also
referred to the definition of ‘agricultural
produce’ under Section 2(i) of the 1963 Act and
argued that vegetables definitely come within the
definition of ‘agricultural produce’. He also
referred to the definition of ‘market’ under
Section 2(xii) of the 1963 Act to mean ‘a market
declared or deemed to be declared under the Act’;
as also to the definition of a ‘market area’ under
Section 2(xiii), which means ‘any area declared or
deemed to be declared to be a market area under
this Act.’
20. Reference was also made to ‘retail sale’ under
Section 2(xviii) of the 1963 Act, whereunder
‘retail sale’ means:
”2. (xviii) “retail sale” means a sale
of any agricultural produce
not exceeding such quantity
as a market committee may by
bye-laws determine to be a
retail sale in respect of
such agricultural produce;”
15
21. This Court notes that sale and purchase in the
market area is controlled under Section 6(1) and
(2). Section 6(3) carves out an exception in the
following terms:
”6. (3) Nothing in sub-section (2)
shall apply to the purchase
or sale of any such
agricultural produce, if its
producer is himself its
seller and the purchaser
purchases it for his own
private consumption.”
22. The learned counsel for the appellants, relying
on these provisions urged that the establishment of
a vegetable market falls solely and squarely within
the provisions of the 1963 Act.
23. Under Chapter IX and section 49 of the 1963
Act, the State Government is authorized to acquire
any land within a market area if it is needed for
the purposes of this Act, i.e. the 1963 Act. Such
acquisition can be made under the provisions of the
Land Acquisition Act, 1894 or any other
16
corresponding law for the time being in force.
Section 49 (1) and (2) are set out below:
“49. (1) The State Government may acquire
any land within a market area, which in
its opinion is needed for the purposes of
this Act, under the provisions of the
Land Acquisition Act, 1894 or any other
corresponding law, for the time being in
force.
(2) Such land shall be transferred by the
State Government to the market committee
on payment by the market committee of the
compensation awarded under the Land
Acquisition Act, 1894, or any other
corresponding law for the time being in
force and of all other charges incurred
by the State Government on account of the
acquisition, within such period and in
such manner as the State Government may,
by general or special order, determine
and on such transfer the land shall vest
in the market committee.”
24. The learned counsel for the appellants strongly
relied on Section 63 of the 1963 Act, which
excludes the application of Bombay Markets and
Fairs Act, 1862 or any other law for the time being
in force relating to the establishment, maintenance
and regulation of a market. Section 63 runs as
under:
17
“63. Nothing contained in the Bombay
Markets and Fairs Act, 1862, or in any
law for the time being in force relating
to the establishment, maintenance or
regulation of a market shall apply to any
market area or affect in any way the
powers of a market committee or the
rights of a holder of a licence granted
under this Act to set up, establish or
continue any place for the purchase or
sale of any agricultural produce notified
under sub-section (1) of section 6 in
such area.”
25. The main argument of the learned counsel for
the appellants on the basis of the aforesaid
statutory framework is that if the State Government
wants to acquire any land for the establishment of
a vegetable market, the State Government must take
steps under the later and the special Act, which is
the 1963 Act. In other words, the State Government
cannot, in view of specific later legislative
enactment, i.e. the 1963 Act and Section 63
thereof, initiate acquisition proceedings to
establish a vegetable market on the basis of
resolution of SMC under Section 78 of BPMC Act.
26. The learned counsel for the respondents opposed
the aforesaid contentions and took us through the
18
judgment of the High Court and submitted that the
1963 Act is meant for the cultivators and traders
and is not meant for common man. The learned
counsel also relied on various provisions of the
Gujarat Town Planning and Urban Development Act and
also urged that in view of sections 63(12) and 78
of the BPMC Act, the impugned action of SMC, which
has been affirmed by the High Court, is valid in
law and this Court may dismiss the special leave
petition.
27. After considering the rival submissions of the
parties, this court is of the opinion that the
contentions raised by the learned counsel for the
appellants deserved serious consideration by the
High Court.
28. However, the High Court in the impugned
judgment, with great respect, proceeded on various
issues but has not at all touched the questions
discussed above. In fact in paragraph 18 of the
impugned judgment, the High Court refused to answer
19
this question, inter alia, on the ground that the
appellants are neither agriculturalists nor the
purchasers of agricultural produces as specified in
the schedule nor dealers in such commodities nor
office bearers of Surat Agricultural Produce Market
Committee, nor have any right to make grievance on
behalf of Surat Agricultural Produce Market
Committee.
29. We are of the considered view that the High
Court was clearly in error in refusing to deal with
the aforesaid question on the grounds mentioned in
paragraph 18.
30. This court is further of the opinion that since
the property of the appellants is taken away as a
result of the aforesaid acquisition proceedings,
the appellants are entitled to raise the question
of non-applicability of the BPMC Act to initiate an
acquisition proceedings for establishing a
vegetable market, in view of the clear provisions
20
of the 1963 Act, which is a special and a later
Act.
31. The right of property, may no longer be a
fundamental right, but it enjoys the protection of
Article 300A of the Constitution to the extent that
there can be no deprivation of property save by
authority of law. Authority of law would obviously
mean valid authority of law. In a case of
deprivation of property by acquisition, ultimately
by Land Acquisition Act, 1894, which is a drastic
and expropriatory piece of legislation, the owners
of property, the appellants herein, are admittedly
entitled to raise all legally permissible
objections to the legality of an acquisition
proceeding.
32.
Here as the High Court has proceeded on an
erroneous approach, its judgment cannot be
sustained in as much as the High Court refused
to examine the validity of the main challenge
raised by the appellants on a ground of their
21
lack of locus. This approach of the High Court,
with great respect, goes to the root of the
issue and makes its judgment very vulnerable.
33.
For the reasons aforesaid, this Court cannot
sustain the impugned judgment of the High
Court, which is accordingly set aside. The
matter is remitted to the High Court for
decision of the writ petition afresh on the
questions discussed above and are specifically
formulated below.
34.
The High Court may deal with all issues but
specifically the two following questions:
(i)
Whether the 1963 Act, a later and a special
Act as compared to the 1949 Act would
prevail over the 1949 Act or whether a
harmonious construction is possible between
the 1963 Act and the 1949 Act on the
22
footing that they seem to govern two
distinct and separate spheres of markets.
(ii) The impugned acquisition proceeds under
Section 78 of the BPMC Act. Section 78
peculiarly uses the term “property vested
in the corporation”. A plain reading of
the term seem to prima facie imply that the
SMC can only acquire property vested in it
and not private property. Thus, High Court
may decide the scope and extent of the said
expression in Section 78 of the BPMC Act
and determine issue of validity of the
impugned acquisition.
35.
Since considerable time has elapsed, the High
Court is requested to take steps to hear out
the writ petition in light of the observations
made above, as early as possible, but
definitely within a period of 6 months from the
date of the production of this order before the
23
High Court. However, the High Court is free to
decide the questions without being in any way
inhibited by any observation made in this
judgment, save and except its finding on two
issues. They are (i) the 1963 Act is a later
and special statute dealing with agricultural
produce and agricultural market, and (ii) the
appellants have, in view of the provisions of
Article 300A and the drastic provision of Land
Acquisition Act, the locus to challenge the
acquisition proceeding.
36.
It is, however, made clear that it is open to
the parties to raise all legally permissible
contentions before the High Court. The appeal
is allowed to the extent indicated above.
37. No order as to costs.
.......................J.
(G.S. SINGHVI)
24
.......................J.
New Delhi (ASOK KUMAR GANGULY)
October 4, 2010
25