Full Judgment Text
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PETITIONER:
SARDARMAL LALWANI
Vs.
RESPONDENT:
STATE OF MADHYA PRADESH & ORS.
DATE OF JUDGMENT11/12/1972
BENCH:
SIKRI, S.M. (CJ)
BENCH:
SIKRI, S.M. (CJ)
SHELAT, J.M.
RAY, A.N.
PALEKAR, D.G.
DUA, I.D.
BEG, M. HAMEEDULLAH
DWIVEDI, S.N.
CITATION:
1973 AIR 1383 1973 SCR (3) 52
1973 SCC (1) 599
ACT:
Land Acquisition Act, 1894 amended by Land Acquisition
(Madhya Pradesh Amendment) Act 5 of 1959-Compensation for
land in Bhopal area to be an basis of market value as on
October 1, 1955-Date found irrelevant-Section 3 Part C of
Act 5 of 1959, making provision for compensation in Bhopal,
area are discriminatory and violative of Art. 14 of
Constitution.
HEADNOTE:
The petitioner’s land situated in Bhopal area Was acquired
under the provisions of the Land Acquisition Act 1894 as
amended by the Land Acquisition (Madhya Pradesh Amendment)
Act 5 of 1959. The acquisition proceedings were commenced
in 1962 and the Land Acquisition Officer gave his award in
1963. By virtue of Section 3 of the 1959 Act the award was
given on the basis of the market value of the land as on
October, 1, 1955 plus 25% extra compensation, and not on the
basis of the market value of the land on or about the date
of acquisition. In a petition under Art. 32 of the
Constitution, the petitioner contended that the impugned Act
violated Art. 14 of the Constitution as there was no
rational classification on the basis of which the prices of
Bhopal area had not been determined by the principle by
which the market prices of other places would be determined.
HELD : The States Reorganisation Commission in its report
submitted on September 30, 1955 had recommended that
Jabalpur should be the capital of the new State of Madhya
Pradesh. Bhopal was made the capital on November 1, 1956.
There was no material to show that on October 1, 1955 it was
known that Bhopal may be the capital of the State or that
there was speculation in land because of this fact. In the
light of the judgment of this Court in Vithal Rao’s case s.
3 Part C of the impugned Act must be held to be violative of
Art. 14 and the petition must be allowed. [56D]
Satish Kumar v. State of M. P. , A.I.R. 1961 M.P. 880
referred to.
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Nagpur Improvement Trust v. Vithal Rao, [1973] 3 S.C.R. 39,
applied.
JUDGMENT:
ORIGINAL JURISDICTION : Writ Petition No. 646 of 1970.
(Under Article 32 of the Constitution of India for the
enforcement of fundamental rights.)
S. Banerjee and P. K. Ghosh, for the petitioner.
Y. S. Dharmadhikari and I. N. Shroff, for respondent No.
1.
Naunit Lal, for Advocate-General, Assam (Intervener).
Santosh Chatterjee and G. S. Chatterjee, for Advocate-
General, Orissa (Intervener).
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O. P. Rana, for Advocate-General, U.P. (Intervener).
A. V. Rangam and A. Subhashi, for Advocate-General, Tamil
Nadu (Intervener).
The Judgment of the Court was delivered by
Sikri, C.J. This petition was heard along with Civil Appeals
Nos. 2139-2140 of 1968. The facts are different but the
principles of law to be applied are the same which we have
laid down in our judgment in Civil Appeal No. 2139 of 1968.
The facts in this petition are that the Land Acquisition
Act, 1894 was amended by the Land Acquisition (Madhya
Pradesh Amendment) Act 1959 (Madhya Pradesh Act V of 1959)
hereinafter referred to as the impugned Act.
By section 3 of the impugned Act the Land Acquisition Act,
1894, in its application to Bhopal area, was amended as
follows;
1.After clause (g) of Sec. 3 of it he Act of 1894 a new
clause was added defining "Bhopal area".
2.A new section S. 17A, was inserted in the Land
Acquisition Act, 1894, giving to the Government the power to
issue a direction to the Collector that it is urgently
necessary to acquire immediate possession of
any building site situated in Bhopal area, and
providing that upon the issue of such a
direction the provisions of Sec. 17 would in
all respects apply in the case of such site as
they apply in the case of waste or arable
land.
3.A new proviso was added to the first clause of Sec.
23(1). The proviso runs thus
"Provided that when the market-value of any land situate in
Bhopal area, in respect of which the date of publication of
the notification aforesaid is after the commencement of the
Land Acquisition (Madhya Pradesh Amendment) Act, 1957 (21 of
1958), is in excess of its market-value as on
the 1st day of October, 1955, the market-value
thereof shall be deemed to be its market-value
as on the 1st day of October, 1955."
4.-A new sub-section (3) was inserted in S. 23 enjoining
the Court to award a further sum not exceeding twenty five
per cent of the market-value of the land acquired and an
additional sum provided under sub-sec. (2), as the Court may
think fit, "in consideration of the appreciation in the
price of the land concerned by reason of the location of the
capital at ’Bhopal, regard being had to the situation of
such land."
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The notification to acquire the land in question under s.
4(1) of the Land Acquisition Act, 1894, was published in the
Madhya Pradesh Rajpatra, dated October 3, 1962.
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Notification under s. 6(1) of the said Act was published in
the Madhya Pradesh Rajpatra datead November 23, 1962.
Thereafter, the notice under S. 9(1) was published for
general information and notices under s. 9(3) were issued to
the individual interested parties. Ultimately, the Land
Acquisition Officer gave his award in the Land Acquisition
Case No. 51/LA/62 on March 25, 1969. The award was given on
the basis of market value of :the land as on October 1, 1955
plus 25% extra compensation, and not on the basis of the
market value of the land on or about the date of
acquisition, by virtue of the provisions of S. 3 of the Land
Acquisition (M.P. Amendment) Act, 1959.
It is alleged inter alia that Bhopal was made Capital of
Madhya Pradesh on November 1, 1956. We were referred to the
report of the States Reorganisation Commission, 1956.
"486. The new State, which can appropriately be described
as Madhya Pradesh will be a compact unit. It will bring
almost the whole of Bundalkhand and Baghelkhand under one
administration. Jabalpur will be situated at a central
place in this unit and has or will soon have some important
facilities like water supply and availability of electrical
power. It will, in our opinion, be a suitable capital."
This report was submitted on September 30, 955. It is quite
clear from this para that on the date of the report the
proposed capital was Jabalpur and there could thus be no
speculation in land in Bhopal before the announcement of
Bhopal as capital.
In view of these facts, it is submitted in ground (viii) of
the petition that "the impugned Act violates Art. 14 of the
Constitution as there is no rational classification on the
basis of which the prices of Bhopal area have not been
determined by the principle by which the market prices of
other places would be determined." It is further submitted
that "there can be no rational basis to differentiate
between Bhopal and other areas for award of compensation
merely because Bhopal was made Capital. The theory that in
view of Capital, there was speculative prices at Bhopal and
the prices at any given time might not reflect the real
price, is neither rational nor reasonable." It is also
alleged that the date, October 1, 1955, is an arbitrary date
for the purpose of fixing the market value.
The only reply given to this ground is contained in para 21
of the counter affidavit on behalf of the State wherein it
is stated
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"With reference to ground (viii), of the petition, I deny-
that the Amendment Act infringes any- fundamental right of
the petitioner and in particular Article 14 of of the
Constitution."
The learned Advocate General was unable to point out to us
any material to show that there was any expectation or
speculation on or about the 1st October, 1955 that Bhopal
would be the Capital of Madhya Pradesh. If this fact had
been established, it may have been reasonable to have fixed
the date for the purpose of determining the market value as
1st October 1955.
But this does not mean that for all time to come for any
land acquired by the State for a capital, the date of
announcement of the Capital would be the relevant date. In
this case, the acquisition was in 1962 and prices may have
risen not only because of speculative dealings but because
of general increase in prices throughout the State.
In Satish Kumar v. State of M.P.(1) the Madhya Pradesh High
Court upheld the validity of the impugned Act. The High
Court justified the basis to differentiate the land located
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in Bhopal area thus :
"In support of this difference, it has been averred in the
return filed by the, State that in the reorganisation of the
States, which was a political exigency, the fixation of the
Capital at Bhopal was "an accident" not due to any economic
or industrial reasons; that when it was decided to
locate the Capital of the State in the underdeveloped town,
there was heavy speculation in land prices; and that,
therefore, these artificially inflated prices could not be
taken as a proper basis for fixing the real market-value
of the property. The amendments themselves indicate that
it was because of the location of the Capital at Bhopal
that they had to be made. Now, it cannot be denied that
whenever a capital or a big industry is located in a town or
even in a city, land values are suddenly pushed up G by
prospective sellers and the increase in them during the
interregnum between the date when it is known that the town
will become more important and the date of acquisition of
land may not represent its real value. The prospect of
acquisition of vast areas of private lands in connection,
with a capital or industrial project in town always gives
rise to speculative dealings in lands in the town. When
such speculative dealings
(1) A.I.R. 1961 M.P. 280.
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occur it is not unreasonable and improper to compute the
market-value of the land with reference to a date proximate
to the date of acquisition so as to exclude, speculative
rise in determining the market value of the land.
On the material on record, it is impossible for us to hold
that in this case there has been a discrimination in the
matter of compensation between land acquired in Bhopal area
and other areas in the State. The classification between
land in Bhopal area and other parts of the State is with
reason and reasonable, and is for the purpose of enabling
the State to acquire land at a reasonable price in Bhopal
for the construction of the Capital. In our view, the
amendments are not hit by Article 14 of the Constitution."
With respect, the High Court has not examined the question
of the validity of the reason for fixing the relevant date
as October 1, 1955. There is no material on the record to
show that on October 1, 1955, it was known that Bhopal may
be the Capital of the State or that there was speculation in
land because of this fact.
We have in the judgment delivered in Nagpur movement Trust
v. Vithal Rao(1) examined Art. 14 and its implications as
far as land acquisition is concerned. In our view, in the
light of that judgment, the petition must be allowed.
In the result, the petition is allowed with costs and it is
declared that section 3 part C of the impugned Act is hit by
the provisions of Art. 14 of the Constitution.
G.C.
Petition allowed.
(1) [1973] 3 S.C.R. 39.
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