TMI Blog2022 (8) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... methods for valuation of property, including the method of capitalisation value. Further, it has to be considered as to whether it is an objective method and not illusory (as it is the case of the State that the amount determined under Section 20 is quite substantial, i.e., Rs.3.52 crore), in the present case. Additionally, if the 1973 Act and the provisions are ascribable to the objective predicated in Article 39(b) of the Constitution, then it would get protection or immunity from challenge in terms of Article 14, 19 or 31 of the Constitution. Furthermore, even if the High Court was right in observing that the 1973 Act came into force prior to coming into force of 44th Amendment to the Constitution on 20.6.1979, it would make no difference as Article 31C was already in force with effect from 20.4.1972 to the extent it has been validated by this Court in His Holiness Kesavananda Bharati Sripadagalvaru [ 1973 (4) TMI 114 - SUPREME COURT ]. The High Court had held that in absence of an express provision regarding lapsing of acquisition in the 1973 Act unlike the 1894 or 2013 Act, it is not open to grant relief of setting aside impugned notification dated 23.6.2005 on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct on 14.10.1982. It was the case of the writ petitioners that by efflux of time, the stated show cause notice (preliminary notification) had worked out and no acquisition in furtherance thereof after 23 years could be permitted in law. As regards the validity of Section 20 of the 1973 Act, the challenge was essentially about the method of determining payment predicated therein to pay amount at the rate of three hundred times the property tax for acquiring the land under Section 17 of the 1973 Act and not fair market value of the property. Whereas, the amount offered on the basis of property tax is inevitably an illusory amount, including in the teeth of the legislation made by the Parliament, namely the Land Acquisition Act, 1894 for short, the 1894 Act . 3. Learned Single Judge of the High Court of Karnataka vide common judgment and order dated 20.9.2007 declared Section 20 of the 1973 Act as ultra vires. He, however, rejected the plea of the writ petitioners that the acquisition pursuant to preliminary notification dated 14.10.1982 had lapsed on the finding that there was no such provision in the 1973 Act analogous to the provisions of the 1894 Act. Learned Single Judge also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Leave granted. Operation of the impugned order of the High Court in so far as the same strikes down Section 20 of the Karnataka Slum Areas (Improvement and Clearance) Act, 1973 [for short the Act ] shall remain stayed, until further orders from this Court. The petitioners shall be free to determine and pay compensation to the land owners in terms of Section 20 of the Act. Any such determination and payment shall remain subject to ultimate outcome of this appeal. 5. Respondent No.4 (M/s. Chandra Spinning and Weaving Mills Private Limited) in the leading appeal filed by the State of Karnataka, as aforesaid, filed an independent appeal before the Division Bench being Writ Appeal No.1492 of 2008 (GMSLUM), which came to be rejected on the ground of unexplained delay vide impugned judgment and order dated 17.8.2012. Against the decision of the Division Bench, respondent No.4 has filed cross appeal arising from S.L.P. (C) No.18942 of 2013, essentially questioning the decision of the Division Bench of the High Court rejecting the cross appeal filed by the Company on the ground of laches and unexplained delay. 6. We have heard Mr. Nikhil Goel, learned Additional Advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quirement 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 judgment. 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. (emphasis supplied) 8. When the matter travelled before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment fixed by the Municipality would be the reasonable compensation or very near to the market value. In such circumstances, we are of the view that if the learned Single Judge has held Sec.20 of the Act as unconstitutional, we cannot lightly interfere with the same. (emphasis supplied) This is the entire discussion regarding the validity of Section 20 of the 1973 Act. 10. In the appeals before this Court, both sides have extensively argued all aspects regarding issue of constitutional validity of Section 20 of the 1973 Act. For the nature of final order that we propose to pass, it is not necessary to dilate on the rival submissions in extenso. 11. According to the State, the 1973 Act and the provisions therein, in particular Section 20, it ought to enjoy the protection of Article 31C of the Constitution. The fact that the 44th Amendment to the Constitution came into force with effect from 20.6.1979 and the 1973 Act came into force much before that, would make no difference. For, even at that relevant time Article 31C was available as it had come into effect on 20.4.1972 to the extent, it has been upheld by the Constitution Bench of this Court in His Holine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard Act, 1950, the Bombay Building Repairs and Reconstruction Board Act, 1969 and the Maharashtra Slum Improvement Board Act, 1973 . This Court upheld the validity of the 1976 Act also in reference to Article 31C of the Constitution as it existed at the relevant time (validated by the decision in His Holiness Kesavananda Bharati Sripadagalvaru supra at Footnote No.12 ), as can be discerned from the discussion in paragraphs 13 to 15 of the reported decision. The State would also argue that while considering the validity of Section 20 of the 1973 Act, it may be necessary to consider the question as to whether the expression material resources of the community would include private property and this question has already been referred to a larger Bench (nine Judges) in Property Owners Association Ors. vs. State of Maharashtra Ors. (2013) 7 SCC 522 (7Judge Bench) , which is pending consideration. Therefore, these matters be tagged along with those cases. 12. Further, in response to the argument canvassed across the Bar by the learned counsel for the writ petitioners for the first time before this Court in reference to the purport of Section 17 of the 1973 Act, it is urged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cated in Article 39(b) of the Constitution, then it would get protection or immunity from challenge in terms of Article 14, 19 or 31 of the Constitution. Furthermore, even if the High Court was right in observing that the 1973 Act came into force prior to coming into force of 44th Amendment to the Constitution on 20.6.1979, it would make no difference as Article 31C was already in force with effect from 20.4.1972 to the extent it has been validated by this Court in His Holiness Kesavananda Bharati Sripadagalvaru supra at Footnote No.12 . 15. It is indisputable that the State had defended Section 20 of the 1973 Act on the principle expounded in Article 31C of the Constitution as can be discerned from paragraph 19 of the judgment of the learned Single Judge and also of the Division Bench, in particular paragraph 16 reproduced hitherto. 16. Suffice it to observe that the High Court disposed of the assail to the validity of Section 20 of the 1973 Act in a cryptic manner and more so without analysing all relevant aspects needed to be considered by a Constitutional Court to declare provisions enacted by the State Legislature as ultra vires. For, there is a presumption about the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the High Court merely stated thus: 10. The compensation payable as per Section 20 of the Act is 300 times of the assessment is correct. The Act and its provisions are for the betterment of the poor and downtrodden slum dwellers as a social obligation. The compensation payable for such land acquired under Section 17 of the Act is only as per Section 20 of the Act. The respondents are having the obligation of providing shelter to several lakhs of slum dwellers and the respondents cannot acquire lands as per Land Acquisition Act and pay huge compensation as per the provisions of the said act i.e., as per the market value. Hence, the provisions of KSA (I C) Act, 1973 are applied to acquire the lands as per Section 17 and pay the compensation as per Section 20 of the Act. Hence, Article 300A of the Constitution of India is not violated. 19. As aforesaid, in addition to the challenge to Section 20 of the 1973 Act being unconstitutional, during the course of argument for the first time and then restated in the written submission, question regarding the applicability of Section 17 of the 1973 Act to the fact situation of the present case has been raised. There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce area. That question, if answered in favour of the writ petitioners, would go to the root of the matter and it may then not be necessary to even examine the question regarding the constitutional validity of Section 20 of the 1973 Act. 22. As a result, to do substantial justice to both the parties, we deem it appropriate to relegate the parties before the learned Single Judge of the High Court for reconsideration of the writ petitions afresh on its own merits and in accordance with law with liberty to both parties to amend the writ petition or file further better affidavit to defend the provisions in question and the action of acquisition, as the case may be. The parties may do so within six weeks from today. The matter after remand to proceed before the learned Single Judge of the High Court in the first week of September 2022 for hearing. 23. We need to clarify that it will be open to the learned Single Judge to await the decision of the larger Bench of this Court in reference made in terms of Property Owners Association supra at Footnote No.20 , in the event it becomes necessary to deal with the argument of the expanse of expression material resources of the community ..... X X X X Extracts X X X X X X X X Extracts X X X X
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