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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. 1