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CASE NO.: Appeal (civil)  3703 of 2003

PETITIONER: M/S GIRNAR TRADERS

RESPONDENT: STATE OF MAHARASHTRA & ORS

DATE OF JUDGMENT: 27/08/2007

BENCH: B.N. Agrawal & P.K. Balasubramanyan & P.P. NAOLEKAR

JUDGMENT:

J U D G M E N T  WITH  

C.A. No. 3922 of 2007  (@ Special Leave Petition (Civil) No. 11446 of 2005)

P.K. BALASUBRAMANYAN, J.

1.              Leave granted in Special Leave Petition (Civil)  No. 11446 of 2005.

2.              Civil Appeal No. 3703 of 2003 is before us on  the basis of an order of reference dated 14.10.2004  reported as Girnar Traders Vs. State of Maharashtra &  Ors. [(2004) 8 S.C.C. 505.  Civil Appeal arising out of  Special Leave Petition (Civil) No. 11446 of 2005 is before  us by virtue of an order dated 11.7.2005 tagging the  same along with the Civil No. No. 3703 of 2003.  The  question in Civil Appeal No. 3703 of 2003 and one of the  questions in the Civil Appeal arising out of Special Leave  Petition (Civil) No. 11446 of 2005 as posed by the order  of reference is whether all the provisions of the Land  Acquisition Act, 1894 as amended by the Central Act 68  of 1984, can be read into the provisions under Chapter  VII of the Maharashtra Regional and Town Planning Act,  1966 (for short, \021the MRTP Act\022) for an acquisition under  that Act.  According to the order of reference, the  decision in State of Maharashtra & Anr. Vs. Sant  Joginder Singh Kishan Singh & Ors. [(1995) 2 S.C.R.  242] requires reconsideration.   In the second of the  appeals, this question arises along with a subsidiary  question on the interpretation of Section 127 of the  MRTP Act.  

3.              The MRTP Act as its preamble shows, is an act  to make provision for planning the development and use  of land in Regions established for that purpose and for  the constitution of Regional Planning Boards therefor; to  make better provisions for the preparation of  Development plans with a view to ensuring that town  planning schemes are made in a proper manner and  their execution is made effective; to provide for the  creation of new towns by means of Development  Authorities; to make provisions for the compulsory  acquisition of land required for public purposes in

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respect of the plans; and for purposes connected with  the matters aforesaid.  This legislation is a State  enactment and according to the learned counsel for the  State of Maharashtra, is covered by the Entries 5, 6, 10,  13, 14, 17, 18, 23, 24, 28, 33, 35 of List II and also by  Entries 17A, 20, 31 and 42 of List III of the Constitution.   In other words, the attempt is to show that the MRTP Act  is a legislation concerned with planning, local  development and regulation in various fields.  As is seen  from the preamble, the compulsory acquisitions of land  provided for by the Act are acquisitions of land required  for public purposes in respect of plans under the Town  Planning Scheme and not for acquisitions of lands for  other purposes or for public purpose as envisaged by the  Land Acquisition Act.   

4.              In Civil Appeal No. 3703 of 2003, revised Draft  Development Plan under the MRTP Act was prepared on  22.11.1983.  The revised Draft Development Plan was  published on 6.3.1987. The land in question was  reserved for the purpose of education.  The land was  agricultural land.  The appellant purchased the land only  on 24.2.1984, after the preparation of the revised draft  plan.  The appellant attempted to get permission to  develop the land but without success.   

5.              On 19.1.1989, the appellant issued a purchase  notice to the Government under Section 49 of the MRTP  Act.  Steps for acquisition of land were taken for the  purpose as envisaged by the Plan and a declaration  under Section 126 of the MRTP Act published on  15.10.1991. A draft award was also allegedly prepared.   At this stage, the appellant issued another purchase  notice under Section 49 of the MRTP Act on 22.3.1994.   The purchase notice was rejected.  That rejection was  challenged in the High Court by the appellant and the  High Court on 31.3.1997, directed the authorities to  initiate acquisition proceedings within one year failing  which the land should be deemed to be released.  Based  on the earlier initiation of acquisition proceedings, a final  award was passed on 10.2.1999 and the local authority  deposited the award amount on 15.2.1999.  Notice was  issued under Section 12(2) of the Land Acquisition Act to  the appellant. Then the appellant filed another Writ  Petition, No. 822 of 2000 praying for the issue of a writ of  certiorari to quash the proceedings on the ground that  Section 11A of the Land Acquisition Act, 1894 as  amended, had been violated by the award not being  passed within two years of the declaration under Section  6 of the Act, and for a writ of mandamus directing the  respondents in the Writ Petition to permit the appellant  to develop the reserved land for residential purposes.   The High Court dismissed the Writ Petition by the  impugned judgment.  It held, on a perusal of the  documents, that it was satisfied that the requisite steps  have been taken by the Special Land Acquisition Officer  after the earlier Writ Petition was disposed of and there  was no necessity to initiate fresh action by the Planning  Authority as contemplated under Section 126(1)(c) of the  MRTP Act and hence the relief sought could not be  granted.  It is this decision that was challenged before  this Court by way of a Petition for Special Leave to  Appeal and leave having been granted the matter is  before us as detailed earlier.

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6.              In the second of the appeals, the land involved  is situate in Carmichael Road, Malabar Hill Division,  Mumbai. The declaration under Section 4(1) of the  Bombay Town Planning Act, 1954 was made on  7.7.1958. A development plan in accordance with the  provisions of Section 3(1) of that Act was published on  9.1.1964.  On 8.7.1964, a modified development plan  was submitted to the Bombay Municipal Corporation to  the Government of Maharashtra for sanction.  On  6.1.1967, the Government of Maharashtra sanctioned  the development plan.  The property in question was  notified for development as open space and children\022s  park.  On 11.1.1967, the MRTP Act came into force.  The  Bombay Town Planning Act stood repealed. But  proceedings initiated or taken under that Act were saved  by Section 165 of the MRTP Act.  It was notified that  7.2.1967 would be the date on which the final  development plan shall come into force.

7.              On 6.1.1979, a declaration under Sections 126  (2) and 126(4) of the MRTP Act was made in respect of an  extent of 2593.36 square meters of land.  On 24.9.1984,  the Land Acquisition (Amendment) Act 68 of 1984 came  into force.  On 16.9.1991, the revised development plan  sanctioned by the State Government on 6.7.1991 came  into effect.  On 2.8.1993, the Municipal Commissioner,  Greater Bombay wrote to the Special Land Acquisition  Officer stating that the Bombay Municipal Corporation  has decided to give priority for acquiring the property in  question.  The letter also requested Land Acquisition  Officer to move the State Government for acquisition of  the property for the purposes envisaged by the MRTP  Act.  The Land Acquisition Officer asked for submission  of fresh proposals by taking a stand that an earlier  notification for acquisition of the property issued had  lapsed on 23.9.1986.  On 3.2.1998, the appellant issued  a purchase notice, inter alia, asking for re-notifying the  property and to pay compensation as per the prevailing  market rate or otherwise to release the property from  reservation and accord sanction for development of the  property.  The Municipal Commissioner thereupon wrote  to the State Government indicating that purchase notice  issued was invalid as 10 years have not expired since the  sanction of the revised development plan which came  into effect only on 16.9.1991.  On 18.10.2000, the  appellant again issued a purchase notice under Section  127 of the MRTP Act to the Municipal Commissioner.   Again, the appellant was informed that since 10 years  have not expired, the notice was invalid.  On 15.3.2002,  the appellant issued yet another purchase notice under  Section 127 of the Act calling upon the authority either  to acquire the land or to permit the appellant to develop  the same.  According to the Municipal Corporation, on  9.9.2002, it passed a resolution deciding to request the  State Government to acquire the land.  On 13.9.2002,  the request was sent to the State Government.  On  20.11.2002, a notification under Section 126(4) of the  MRTP Act read with Section 6 of the Land Acquisition  Act was issued declaring that the property in question  was needed for the purpose for which it has been  reserved.  The appellant filed a Writ Petition on  19.9.2003 seeking to have the notification dated  6.1.1967 and the declaration dated 6.1.1979 quashed  and for a mandamus directing the respondents to accord  sanction to the appellant for developing the property or

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in the alternative to re-notify the land and pay the  market value as compensation.  On 24.6.2004, the High  Court disposed of the Writ Petition leaving the appellant  to pursue the remedies that may be available in  accordance with law.  The appellant thereupon  submitted a revised plan for development of the property  purporting to be in the light of the direction of the High  Court in the Writ Petition.  The proposal was rejected.   Another Writ Petition was filed by the appellant seeking  permission to develop the land and for payment of  enhanced compensation and for quashing the  notification dated 20.11.2002 issued under Section  126(4) of the MRTP Act.  After the pleadings were  completed and the appellant sought and obtained an  amendment of the Writ Petition, ultimately the High  Court dismissed the Writ Petition relying on the decision  in State of Maharashtra & Anr. Vs. Sant Joginder  Singh Kishan Singh & Ors. [supra].  The appellant  thereupon approached this Court and got its Petition for  Special Leave to Appeal tagged to Civil Appeal No. 3703  of 2003.

8.              The main contention urged on behalf of the  appellants on the first aspect is that the MRTP Act has  adopted the Land Acquisition Act, 1894 by reference and  consequently, any amendment in the Land Acquisition  Act, 1894 would automatically be attracted in any  proceedings for acquisition under the MRTP Act.  Since  Section 11A introduced into the Land Acquisition Act by  Act 68 of 1984 provided that acquisition would lapse if  an award is not passed within two years of the  declaration under Section 6 of the Act, the entire  proceedings for acquisition in both these cases have  lapsed since awards were not rendered within two years  of the declaration.  On the second aspect arising in the  latter appeal, the contention is that on receipt of the  purchase notice, the proceeding for acquisition itself was  not started within six months of the receipt of the notice  and consequently the acquisition and the reservations  have lapsed under Section 127 of the MRTP Act.  The  further submission is that taking of some step like  writing to the Government for acquiring the land, is not a  step as contemplated by Section 127 of the MRTP Act  and the step must be a step under the Land Acquisition  Act, namely, issuance of a declaration under Section 6 of  that Act so as to enable the authority to acquire the land  in terms of the MRTP Act.   These contentions are met by  learned counsel for the State of Maharashtra and the  authorities by contending that there was no  incorporation by reference of the Land Acquisition Act of  1894 in the MRTP Act; that the MRTP Act had adopted  the Land Acquisition Act only for limited purposes and  since there was no provision in the MRTP Act for lapsing  of an acquisition as distinct from the lapsing of the  scheme itself, Section 11A of the Land Acquisition Act  had no application.  It is also contended that in any  event the amendment brought in by introduction of  Section 11A into the Land Acquisition Act by the  Amendment Act 68 of 1984 cannot be read into the  MRTP Act which adopted the Land Acquisition Act as it  then stood in the year 1966, on which date Section 11A  was not in the statute book and hence there was no  question of the acquisition lapsing in terms of Section  11A of the Land Acquisition Act.  It is submitted that the  decision of this Court in State of Maharashtra & Anr.

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Vs. Sant Joginder Singh Kishan Singh & Ors. [supra]  covers this question.  On the latter question, it is  submitted that what Section 127 of the Act contemplates  is only a step under the MRTP Act as distinct from the  Land Acquisition Act and the writing of the concerned  authority to the Government to acquire the land for the  purpose for which it has been reserved under the revised  plan within time would be a step in terms of Section 127  of the Act.  It is submitted that the High Court has  rightly relied upon the decision in Municipal  Coproration of Greater Bombay vs. Dr. Hakimwadi  Tenants\022 Association & Ors. (1988 (Suppl.) SCC 55 ) to  negative the plea.

9.              We may first notice the scheme of the MRTP  Act.  We have already referred to the preamble of the  MRTP Act which indicates that the main object of the Act  is to make provisions for planning the development and  use of land in regions established for the purpose.   Different purposes are contemplated.  Provision is also  made for acquisition of land but as the preamble  suggests it is for compulsory acquisition of land required  for the purposes in respect of the plans and not merely a  public purpose as understood under the Land  Acquisition Act.  Thus, it is clear that the acquisition of  land under the MRTP Act is incidental to the main  objective of bringing about a planned development of the  different regions and areas in the State of Maharashtra  and the use of various lands reserved in the development  plan for the purpose for which it is reserved.  Chapter VII  deals with land acquisition.  Section 1‘25 provides for  any land required, reserved or designated in a Regional  plan, Development plan or town planning scheme for a  public purpose or purposes including plans for any areas  of comprehensive development or for any new town shall  be deemed to be land needed for a public purpose within  the meaning of the Land Acquisition Act.  In other words,  the moment a Regional development plan or town  planning had been notified, Section 125 would operate  as a notification corresponding to a notification under  Section 4(1) of the Land Acquisition Act.  Section 126  provides for acquisition of land so required in terms of  the plan and three modes are prescribed for such  acquisition.  One is by agreement by parties by paying  an amount agreed to, or by paying the compensation as  provided in clause (b) or by making an application to the  State Government for acquiring the land under the Land  Acquisition Act.  The acquisition under the Land  Acquisition Act is contemplated by the authority making  an application to the State Government for that purpose.   In other words, it is not the authority that has to take  steps for the acquiring of the land under the Land  Acquisition Act but it is to apply to the State Government  to make an acquisition under the Land Acquisition Act.   On receipt of such an application if the State  Government is satisfied that the land specified in the  application is needed for the specified public purpose or  that land is included in the plan and it is needed for any  public purpose indicated, it may make a declaration, in  the manner provided under Section 6 of the Land  Acquisition Act.  The declaration so published is deemed  to be a declaration duly made under Section 126 of the  MRTP Act.  The proviso indicates that declaration shall  be made before the expiry of one year from the date of  the draft regional plan, development plan or any other

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plan or the scheme.  On publication of the declaration  under Section 126, the Collector shall proceed to make  an order for acquisition of the land under the Land  Acquisition Act and the provisions of the Land  Acquisition shall apply to the acquisition of the said land  subject to the modification that the relevant date for  determining the market value to be paid as  compensation shall be the date of declaration under  Section 126 of the MRTP Act.  The section also provides  that if a declaration is not made within one year, the  State Government may make a fresh declaration for  acquiring the land subject to the modification that the  market value of the land is to be paid with reference to  the date of the subsequent declaration.  In other words,  on a declaration under Section 126 being made, the  authority under the MRTP Act has to apply to the  government to acquire the land.  The Government has to  issue a declaration as contemplated by Section 6 of the  Land Acquisition Act.  The compensation is to be paid  with reference to the date of such declaration.  A  declaration has to be made within one year of the  request for acquisition.  But in case it is not so made, a  fresh declaration would be made in which case the  compensation has to be adjudged with reference to the  market value on the date of the second declaration.   Section 126 of the MRTP Act does not provide for the  lapsing of the acquisition.  On the other hand, the  acquisition, notwithstanding the default to act in terms  of sub-section (2) of that Section can be proceeded with  by issuing a fresh declaration and the compensation has  to be determined with reference to the date of that fresh  declaration.  Section 127 provides for lapsing of  reservations.  Since interpretation of Section 127 is also  involved we think it proper to extract the said provision. \023127.        If any land reserved, allotted or  designated for any purpose specified in any  plan under this Act is not acquired by  agreement within ten years from the date on  which a final Regional plan, or final  Development plan comes into force or if  proceedings for the acquisition of such land  under this Act or under the Land Acquisition  Act, 1894, are not commenced within such  period, the owner or any person interested in  the land may serve notice on the Planning  Authority, Development Authority or as the  case may be, Appropriate Authority to that  effect; and if within six months from the date  of the service of notice of such notice, the land  is not acquired or no steps as aforesaid are  commenced for its acquisition, the  reservation, allotment or designation shall be  deemed to be released from such reservation,  allotment or designation and shall become  available to the owner for the purpose of  development as otherwise, permissible in the  case of adjacent land under the relevant plan.\024

10.             The reservations are provided by the Act for a  period of ten years.   If the land is not acquired within a  period of ten years by agreement of parties or if  proceedings for acquisition of the land are not  commenced within ten years, the owner could serve a

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notice on the planning authority or the development  authority and if within six months from the date of the  service of such notice the land is not acquired or no  steps are commenced for its acquisition, the reservation,  allotment or designation shall be deemed to have lapsed  and the land shall be deemed to be released from such  purpose, allotment or designation and shall become  available to the owner for the purpose of development as  permissible in the case of lands lying adjacent to the  land in question under the relevant plan.  In other  words, if the reservation lapses, the land owner could  use the land for the purposes for which the adjacent  lands are permitted to be used under the development  plan or revised plan.

11.             This section also does not appear to deal with  lapsing of any acquisition for which steps have been  taken in terms of Section 126 of the MRTP Act by  applying to the State Government for acquiring the land  for the purpose for which it is reserved in the plan.  But  this Section contemplates the lapsing of reservation itself    if the conditions laid down thereunder are not complied  with.  If no acquisition is made within 10 years of the  notification under Section 125 of the Act, the land owner  is given the right to issue a notice calling upon the  authority to acquire the land for the purpose for which it  is earmarked in the plan.  If on service of such a notice  no steps for acquisition are taken within six months, the  reservation would lapse.  This section also does not  contemplate a lapse of the acquisition as such.  Section  128 confers power on the State Government to acquire  land for a purpose other than the one for which it is  designated in any plan or scheme.  Section 129 confers  power to take possession of the land in case of urgency  at any time after the declaration under Section 126(2) of  the Act is notified, on condition that before taking  possession, the Collector has to offer to the person  interested, compensation as provided in that section.

12.             On an analysis of the provisions in the context  of the questions that are before us, what emerges is that  the publication of the plan with the reservation therein  itself operates as a notification like the one under  Section 4(1) of the Land Acquisition Act, that a  declaration has to be made akin to a declaration under  Section 6 of the Land Acquisition Act, the compensation  has to be paid not with reference to the date of the  notification under Section 125 of the Act but with  reference to the date of declaration under Section 126 of  the MRTP Act and that a declaration under Section 126  of the Act had to be made within one year of the  application for acquisition made by the authority under  the MRTP Act.  But in case the declaration was not so  made, a fresh declaration has to be issued and  compensation has to be paid with reference to the date of  the fresh declaration and the authority had also the  power to take prior possession in case of urgency on the  conditions stipulated under Section 129 of the MRTP  Act.  The MRTP Act provides for lapsing of reservations  but does not provide for lapsing of the acquisition.  The  reservation lapses on the expiry of ten years and on the  expiry of six months after a purchase notice is issued by  the owner of the land unless steps are taken in the  meanwhile to proceed with the acquisition.  If there is no  agreement regarding compensation and acquisition then

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the State Government has to be approached \023for  acquiring such land under the Land Acquisition Act,  1894.\024

13.             Under the Land Acquisition Act, a notification  under Section 4(1) of the Act is followed by a declaration  under Section 6 of the Act.  The amendment introduced  by Act 68 of 1984 provides that no declaration under  Section 6 shall be made after the expiry of one year from  the date of publication of the notification under Section  4(1) of the Act.  It further provides that the Collector,  after the declaration is made, has to take an order for  acquisition, mark out the land available, issue notice to  persons interested in the land to be acquired and for,  passing an award containing the true area of the land  acquired, the compensation that should be allowed for  the land and the apportionment of the compensation  among the claimants, if there are more than one.   Section 11A introduced by Act 68 of 1984 provides that  the Collector shall make an award within a period of two  years from the date of publication of the declaration and  if no award is made within that period the entire  proceedings for the acquisition of the land shall stand  lapsed.  Thus, the Land Acquisition Act, as amended in  the year 1984 provides for two lapses of the acquisition;  one, in a case where a declaration under Section 6 is not  made within one year of the publication of the  notification under Section 4(1) of the Act and; two, the  award itself not being made within a period of two years  from the publication of the declaration.

14.             The question we are called upon to decide is  whether in spite of the MRTP Act not having provided for  the lapse of an acquisition and in spite of having adopted  a scheme for lapsing of the reservation itself, the  stipulation in Section 11A of the Land Acquisition could  be invoked to hold that an acquisition commenced after  a declaration under Section 126 of the MRTP Act would  lapse on the basis that the award had not been made  within a period of two years from the date of declaration.

15.             It is clear that when the MRTP Act was  enacted, the Land Acquisition Act that was referred was  the unamended Act of 1894.  That Act did not contain  either a provision for lapsing of the acquisition on the  non issue of a declaration under Section 6 of the Act  within one year of a notification under Section 4(1) of the  Act or by the award not being rendered within two years  of a declaration under Section 6 of the Act.  These two  time limits were prescribed by Act 68 of 1984.   Thereafter, the State Legislature amended the MRTP Act  by substituting the proviso to sub-Section (2) of Section  126 providing that a declaration shall not be made after  the expiry of one year from the date of notification under  Section 125 of the MRTP Act.  Simultaneously, sub- Section (4) was amended providing that notwithstanding  the fact that a declaration had not been made within one  year, the Government could make another declaration  under Section 126 of the MRTP Act in terms of the Land  Acquisition Act in the manner provided by sub-sections  (2) and (3) of Section 126 with the only consequence that  the compensation payable shall be the compensation as  on the date of the fresh declaration.   Significantly, the  State Legislature did not introduce any provision either  for the lapse of an acquisition or for lapsing of the

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proceedings for acquisition if an award is not made  within two years of the declaration under Section 126 of  the MRTP Act read with Section 6 of the Land  Acquisition Act.  According to learned counsel for the  State and the Authorities, this has significance in that  the MRTP Act did not intend the lapsing of an acquisition  at all, and consequently for non compliance with the  requirement of Section 11A of the Land Acquisition Act.   

16.             It is in this context that learned counsel for the  appellants contended that the Land Acquisition Act is  incorporated by reference in the MRTP Act and the  consequences of such incorporation by reference is to  make all subsequent amendments to the Land  Acquisition Act applicable to cases of acquisition under  the MRTP Act.  Learned counsel submitted that the  consequences of incorporation by reference cannot be  ignored while dealing with the contention raised on  behalf of the State.   

17.             Learned counsel for the State in answer  submitted that the MRTP Act was a legislation under the  State List and the Land Acquisition Act was a legislation  under the Union List.  In other words, one was State  Legislation and the other was a Parliamentary  Legislation.  Learned counsel submitted that the  invocation of the theory of incorporation of reference  when a State Act refers to a Central enactment and  applying the rules in that behalf, would mean that the  State Legislature would be taken to have surrendered its  right of legislation to the Parliament, a situation that  cannot be readily envisioned. According to him therefore,  every amendment to the Central Legislation cannot  automatically be adopted into the State Legislation in  view of such a grave consequence.  This is an aspect  which appears to warrant serious consideration.   

18.             We shall now deal with some of the decisions  that are germane to the issue.  The first of the decisions  is that of the Privy Council in Secretary of State Vs.  Hindustan Cooperative Insurance Societies Ltd. [AIR  1931 P.C. 149].  In that case, the provisions of the Land  Acquisition Act, 1894 were made applicable for  acquisition of land under the Improvement Act.  Under  the Land Acquisition Act, against an award an appeal lay  to the High Court under Section 54 of that Act.  The  Privy Council had held in Rangoon Botatoung  Company Vs. Collector of Rangoon [39 Indian Appeals  197] that under Section 54 of the Land Acquisition Act,  no further appeal lay to the Privy Council from the  decision of the High Court in an appeal under Section 54  of the Act.  The Land Acquisition Act was amended  providing that the award passed thereunder would be  deemed to be a decree.  The amendment was of the year  1921, after the Land Acquisition Act, 1894 had been  adopted by the Improvement Act.  The question before  the Privy Council was whether by virtue of the  amendment brought about in the year 1921 in the Land  Acquisition Act deeming an award to be a decree, a  further appeal would lie to the Privy Council from the  decision of the High Court in the case of an acquisition  under the Improvement Act.  It was argued before the  Privy Council that it was a case of incorporation by  reference and therefore the amendment would

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automatically be attracted and consequently the award  would be a decree and an appeal lay to the Privy Council.   The Privy Council negatived the said contention thus:   

\023But their Lordships think that there are  other and perhaps more cogent objections  to this contention of the Secretary of State,  and their Lordships are not prepared to  hold that the sub-section in question,  which was not enacted till 1921, can be  regarded as incorporated in the local Act of  1911.  It was not part of the Land  Acquisition Act when the local Act was  passed, nor in adopting the provisions of  the Land Acquisition Act is there anything  to suggest that the Bengal Legislature  intended to bind themselves to any future  additions which might be made to that Act.   It is at least conceivable that new  provisions might have been added to the  Land Acquisition Act which would be wholly  unsuitable to the local code.  Nor, again,  does Act 19 of 1921 contain any provision  that the amendments enacted by it are to  be treated as in any way retrospective, are  to be regarded as affecting any other  enactment than the Land Acquisition Act  itself.  Their Lordships regard the local Act  as doing nothing more than incorporating  certain provisions from an existing Act, and  for convenience of drafting doing so by  reference to that Act, instead of setting out  for itself at length the provisions which it  was desired to adopt.                  Their Lordships have not been referred  to anything in the General Rules of  Construction embodied in the General  Clauses Act, 1897, which supports the  contention of the Secretary of State, nor to  any authority which favours it.  In this  country it is accepted that where a statute  is incorporated by reference into a second  statute, the repeal of the first statute does  not affect the second: see the cases  collected in \023Craies on Statute Law,\024 Edn.  3, pp. 349-50.  This doctrine finds  expression in a common form section which  regularly appears in the Amending and  Repealing Acts which are passed from time  to time in India.  The section runs,  

       \021The repeal by this Act of any  enactment shall not affect any Act . . . in  which such enactment has been applied,  incorporated or referred to:\024

       The independent existence of the two  Acts is therefore recognised; despite the  death of the parent Act, its offsprinig  survives in the incorporating Act.  Though  no such saving clause appears in the  General Clauses Act, their Lordships think  that the principle involved is as applicable  in India as it is in this country.

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       It seems to be no less logical to hold  that where certain provisions from an  existing Act have been incorporated into a  subsequent Act, no addition to the former  Act, which is not expressly made applicable  to the subsequent Act, can be deemed to be  incorporated in it, at all events if it is  possible for the subsequent Act to function  effectually without the addition.  So Lord  Westbury says in Ex parte St. Sepulchre  (1864) 33 L.J. Ch. 372:

       \021If the particular Act gives in itself a  complete rule on this subject matter, the  expression of that rule would undoubtedly  amount to an exception of the subject  matter of the rule out of the general Act:\022  see also London, Chatham and Dover  Railway V. Wandsworth Board of Works (8  C.P. 185).\024 (emphasis supplied)

19.             As we understand this decision, their  Lordships have indicated that in the absence of anything  to suggest that the State Legislature intended to bind  themselves to any future additions, which might be  made in the Central Act, it would not be proper to infer  that all amendments subsequent to the adoption would  automatically apply.  Their Lordships have also indicated  that in such a situation, it would only be a case of a  State Act incorporating certain provisions of an existing  Central Act and nothing more.  These reasons, we  consider weighty.  In Chairman of the Municipal  Commissioners of Howrah Vs. Shalimar Wood  Products & Anr. [(1963) 1 S.C.R. 47], this Court quoted  with approval the concerned observations.  In Ujagar  Prints & ors. Vs. Union of India & ors. [(1989) 3 S.C.C.  488, this Court observed: \023Referential legislation is of two types.  One is  where an earlier Act or some of its provisions  are incorporated by reference into a later Act.   In this event, the provisions of the earlier Act  or those so incorporated, as they stand in the  earlier Act at the time of incorporation, will be  read into the later Act.  Subsequent changes in  the earlier Act or the incorporated provisions  will have to be ignored because, for all practical  purposes, the existing provisions of the earlier  Act have been re-enacted by such reference  into the later one, rendering irrelevant what  happens to the earlier statute thereafter.   Examples of this can be seen in Secretary of  State V. Hindustan Cooperative Insurance  Society (AIR 1931 PC 149), Bolani Ores Ltd. V.  State of Orissa [(1947) 2 S.C.C. 777], Mahindra  and Mahindra Ltd. V. Union of India [(1979) 2  S.C.C. 529].  On the other hand, the later  statute may not incorporate the earlier  provisions.  It may only make a reference of a  broad nature as to the law on a subject  generally, as in Bhajiya V. Gopikabai [(1978) 2  S.C.C. 542], or contain a general reference to  the terms of an earlier statute which are to be  made applicable.  In this case any  modification, repeal or re-enactment of the

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earlier statute will also be carried into in the  later, for here, the idea is that certain  provisions of an earlier statute which become  applicable in certain circumstances are to be  made use of for the purpose of the later Act  also.  Examples of this type of legislation are to  be seen in Collector of Customs V. Nathella  Sampathu Chetty [(1962) 3 S.C.R. 786], New  Central Jute Mills Co. Ltd. V. Assistant  Collector of Central Excise [(1970) 2 S.C.C.  820] and Special Land Acquisition Officer V.  City Improvement Trust [(1976) 4 S.C.C. 697].   Whether a particular statute falls into the first  or second category is always a question of  construction.\024

20.             A three judge Bench of this Court in U.P. Awas  Evam Vikas Parishad Vs. Jainul Islam & Ors. [(1998) 2  SCC 467] after referring to and quoting from the decision  of the Privy Council in Secretary of State Vs.  Hindustan Cooperative Insurance Societies Ltd.  (supra) held that the provisions of Section 55 of the  concerned Adhiniyam were on the same lines as those  contained in the Calcutta Improvement Act, 1911 and  the principles laid down by the Privy Council are equally  applicable to that case.  This Court stated: \023The amendments introduced in the Land  Acquisition Act by the 1984 Act were not part  of the Land Acquisition Act as applicable in the  State of Uttar Pradesh, at the time of passing of  the Adhiniyam.  The provisions of the Land  Acquisition Act, as amended in its application  to U.P., with the modifications specified in the  Schedule to the Adhiniyam, have, therefore, to  be treated to have been incorporated by  reference into the Adhiniyam and became an  integral part of the Adhiniyam and the said  provisions would remain unaffected by any  subsequent repeal or amendment in the Land  Acquisition Act unless any of the exceptional  situations indicated in State of M.P. V. M.V.  Narasimhan can be attracted.\024

Their Lordships also observed that the Adhiniyam  contains provisions regarding acquisition of land which  are complete and self contained.  Nor can the provisions  in the Adhiniyam be said to be in pari materia with the  Land Acquisition Act because the Adhiniyam also deals  with matters which do not fall within the ambit of the  Land Acquisition Act.  It cannot also be said that the Act  68 of 1984, expressly or by necessary intendment,  applies the said amendments to the Adhiniyam.   In  Nagpur Improvement Trust Vs. Vasantrao & Ors.  [(2002) 7 S.C.C. 657, yet another three Judge Bench of  this Court after quoting the observations of the Privy  Council held that subsequent amendments to Section 6  of the Land Acquisition Act by Act 68 of 1984 have no  effect on acquisitions under the State Acts of Uttar  Pradesh, Punjab and Nagpur and that only the benefits  conferred by Act 68 of 1984 relating to quantification of  compensation alone would be applicable in the case of  acquisition under the Town Planning Acts.  Their  Lordships repeated that it was also well settled that the  question as to whether a particular legislation falls in the  category of referential legislation or legislation by

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incorporation depends upon the language used in the  statute in which the reference is made to the earlier  decisions and other relevant circumstances.  This  decision is a clear authority for the position that  amendments brought about in the Land Acquisition Act,  1894, subsequent to the incorporation thereof by the  State Act, could not apply to acquisitions under the State  Act.   

21.             But, both in U.P. Awas Evam Vikas Parishad  Vs. Jainul Islam & Ors. (supra) and Nagpur  Improvement Trust Vs. Vasantrao & Ors.(supra), this  Court has taken the view that the Compensation payable  has to be calculated in terms of the Land Acquisition Act  as amended by Act 68 of 1984.  If the amendment has  not to be taken to be incorporated, would this conclusion  be justified, is one aspect to be considered.    

22.             But then, the Court in Nagpur Improvement  Trust and Another Vs. Vithal Rao & Others.  (1973(1)  SCC 500) had upheld the decision of the Bombay High  Court which had struck down certain provisions relating  to the payment of compensation for acquisition of land  under the Improvement Trust Act.  This Court  summarised the decision of the High Court thus: \023The High Court held that as the acquisition is  by the State in all cases where the property is  required to be acquired for the purpose of  scheme framed by the Trust and such being  the position, it is not permissible without  violating the guarantee under Article 14 of the  Constitution for the State to acquire any  property under the provisions of the Land  Acquisition Act as amended by the  Improvement Trust Act insofar as they relate to  the basis of determination and payment of  compensation.  It must, therefore, be held that  the provisions of Paragraph 10(2) and 10(3)  insofar as they add a new clause (3)(a) to  Section 23 and a proviso to sub-section (2) of  Section 23 of the Land Acquisition Act are ultra  vires as violating the guarantee of Article 14 of  the Constitution.\024

This Court stated: \023\005\005\005\005\005.It seems to us that ordinarily a  classification based on the public purpose  is not permissible under Article 14 for the  purpose of determining compensation.  The  position is different when the owner of the  land himself is the recipient of benefits from  an improviement scheme, and the benefit to  him is taken into consideration in fixing  compensation.  Can classification be made  on the basis of the authority acquiring the  land?  In other words can different  principles of compensation be laid if  the  land is acquired for or by an Improvement  Trust or Municipal Corporation or the  Government?  It seems to us that the  answer is in the negative because as far as  the owner is concerned it does not matter to  him whether the land is acquired by one  authority or the other.

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       It is equally immaterial whether it is  one Acquisition Act or another Acquisition  Act under which the land is acquired.  If  the existence of two Acts could enable the  State to give one owner different treatment  from another equally situated the owner  who is discriminated against, can claim the  protection of Article 14.\024

Thus, it was held that differing compensations could not  be paid for acquisition of land.  It is relevant to notice  that the decision was not based on a theory of legislation  by reference but based on discrimination.  The  implication of this decision might justify the approach  made in the earlier two cited decisions.

23.             The decision in State of Kerala & ors. Vs.  T.M. Peter & ors. [(1980) 3 S.C.C. 554], saved the  relevant provision by reading into it a provision for  payment of solatium.  There, this Court was dealing with  the Town Planning Act, 1932 (originally Travancore Act 4  of 1108 ME) and the Kerala Land Acquisition Act, 1961.  The High Court had struck down Section 34(1) and  Section 34(2A) of the Town Planning Act and the appeal  was against that decision.  This Court stated:

       \023We regard this grievance as mythical, not  real, for more than one reason. The scheme  is for improvement of a town and, therefore,  has a sense of urgency implicit in it.  Government is aware of this import and it  is fanciful apprehension to imagine that  lazy insouciance will make Government  slumber over the draft scheme for long  years. Expeditious despatch is writ large on  the process and that is an in-built guideline  in the statute. At the same time, taking a  pragmatic view, no precise time scale can  be fixed in the Act because of the myriad  factors which are to be considered by  Government before granting sanction to a  scheme in its original form or after  modification. Section 12 and the other  provisions give us some idea of the difficulty  of a rigid time-frame being written into the  statute especially when schemes may be  small or big, simple or complex, demanding  enquiries or provoking discontent. The  many exercises, the differences of scale, the  diverse consequences, the overall  implications of developmental schemes and  projects and the plurality of considerations,  expert techniques and frequent  consultations, hearings and other factors,  precedent to according sanction are such  that the many-sided dimension of the  sanctioning process makes fixation of rigid  time limits by the statute an impractical  prescription. As pointed out earlier, city  improvement schemes have facets which  mark them out from other land acquisition  proposals. To miss the massive import and  specialised nature of improvement schemes  is to expose one’s innocence of the  dynamics of urban development. Shri

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Raghavan fairly pointed out that, in other  stages, the Act provides for limitation in  time (for example, Section 33 which fixes a  period of three years between the date of  notification and the actual acquisiton). Only  in one minimal area where time-limit may  not be workable, it has not been  specified.The statute has left it to  Government to deal expeditiously with the  scheme and we see sufficient guideline in  the Act not to make the gap between the  draft scheme and governmental sanction  too procrastinatory to be arbitrary. We need  hardly say, that the court is not powerless  to quash and grant relief where, arbitrary  protraction or mala fide inaction of  authorities injures an owner.\024

While upsetting the decision of the High Court and  upholding the validity of the provisions, this Court held  that even then, solatium also will be payable to the land  owners as provided under the Land Acquisition Act, even  though the acquisition is under the Improvement Act.   

24.             In State of Maharashtra & Anr. Vs. Sant  Joginder Singh Kishan Singh & Ors. (supra), this  Court was dealing with the MRTP Act and two learned  judges of this Court after referring the distinction  between legislation by incorporation and adoption by  reference proceeded to hold that Section 11A of the Land  Acquisition Act on which reliance is placed before us was  not applicable to acquisitions under the MRTP Act.  Of  course, it is the correctness of this decision that has  been doubted by the Bench referring the matter to a  larger Bench since their Lordships were not inclined to  agree with the position adopted in State of Maharashtra  & Anr. Vs. Sant Joginder Singh Kishan Singh & Ors.  (supra) that Section 11A is only a procedural provision  and the same introduced by Act 68 of 1984 cannot be  read into the MRTP Act which adopted the Land  Acquisition Act prior to the said amendment.  Suffice it  to notice that this decision is directly concerned with the  MRTP Act.  

25.             Learned counsel for the appellants commended  to us the reasons given in the order of reference for  overturning the decision in State of Maharashtra &  Anr. Vs. Sant Joginder Singh Kishan Singh & Ors.  (supra).  Of course, we could consider or reconsider the  correctness of the decision in State of Maharashtra &  Anr. Vs. Sant Joginder Singh Kishan Singh & Ors.  (supra) because that was rendered only by two learned  judges.  But, we find from the various arguments raised  that there are at least two, three Judges Bench decisions  which have recognised principles which may have to be  considered or reconsidered while considering the aspects  posed by the order of reference.  In that context, we  think that the whole question requires to be looked into  considering the impact the answer to the questions may  have on various City and Town Improvement Acts  governing the planning of cities and towns and  incidentally dealing with acquisitions of lands for the  purpose for which the land is earmarked in the finalised

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plan or town planning scheme.  We also feel that the  question whether anything turns on the fact that one is a  State enactment and the other a Parliamentary  legislation as noticed by the Privy Council while  considering whether a subsequent amendment to the  parliamentary legislation can be read into the State  enactment by invoking the theory of legislation by  reference has to be authoritatively considered.  If one  were to hold that the subsequent amendment would not  be applicable, then how far one would be justified in  importing the provisions as amended, for determination  and payment of compensation, may also have to be  considered.  In this context, we also think that the  propositions enunciated in The State of Madhya  Pradesh Vs. M.V. Narasimhan [(1975) 2 S.C.C. 377]  may also have to be examined afresh so as to  authoritatively pronounce upon the principles to be  settled for application of the theory of incorporation by  reference and importing into the original law the  amendments made to the Act that is incorporated by  reference.  We also think that the question is of general  importance and it will be appropriate if the gamut of  questions rising is settled by an authoritative  pronouncement of a Constitution Bench.

26.             Under our Constitution, there is a distribution  of legislative powers between the Parliament and the  legislatures of States.  Under Article 246 (1) of the  Constitution, Parliament has exclusive power to make  laws with respect to any of the matters enumerated in  List I of the Seventh Schedule to the Constitution.   Under Article 246 (3) of the Constitution, State has  exclusive power to make laws for the State with respect  to any of the matters enumerated in List II in the  Seventh Schedule to the Constitution.   Of course, under  Article 246(2) of the Constitution, in respect of matters  enumerated in List III in the Seventh Schedule to the  Constitution, both the Parliament and the State  Legislatures have the power to make laws.  The  legislative fields thus are well defined subject to some  overlapping here and there.  Therefore, in the context of  the Indian Constitution and what can be called the  separation of legislative powers, the question arises as to  how far it is open to adopt the theory of legislation by  reference and to adopt the consequences flowing  therefrom.  No doubt, as on that day, the legislature had  chosen to adopt the parliamentary legislation.   Actually,  when a State Legislature incorporates the provisions of a  parliamentary enactment as part of its own legislation, it  is enacting it as on that day as its own legislation.  The  effect thereof can be conceived to be a case of the  legislature re-enacting the parliamentary enactment in  respect of a subject matter which is exclusively within its  legislative field.   As stated in Craies on Statute Law, 7th  Edn., page 223,  \023The effect of bringing into a later Act by  reference, Sections of an earlier Act is to  introduce incorporated Sections of the  earlier Act into the later Act as if they had  been enacted in it for the first time.\024                                                         (emphasis supplied) One possible view is that you cannot incorporate as your  own a Section that did not exist as on the day of  incorporating another Act by reference. In that context,

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can it be said that, if there is a future amendment to the  Parliamentary enactment that has been incorporated by  the State Legislature, those amendments would also  automatically become applicable in the case of the State  enactment?  This would be postulating a position of  surrender of its legislative function or legislative power  by the State Legislature to Parliament.  In the context of  the Indian Constitution, is such a position permissible?   Is it open to the court to readily accept a surrender of its  legislative power by the State Legislature in such  circumstances by construing the enactment as a  legislation by reference?  In our view, it cannot be readily  inferred that the State Legislature has made such a  surrender of its legislative powers when it adopts a  parliamentary enactment as on the date it existed, by  referring to it in its enactment or by incorporating it in  its enactment.  With respect, we think that this aspect  requires consideration by a Constitution Bench  considering that it also involves an interpretation of the  Constitution and the Constitutional Scheme of  Legislation.  

27.             The second of the questions, of course, relate  to the interpretation of Section 127 of the MRTP Act.   The question has to be considered in the light of the  decision in Municipal Corporation of Greater Bombay  Vs. Dr. Hakimwadi Tenants\022 Association & ors. [supra]  and the expression used in Section 127 of the Act which  speaks of the land not being acquired or no steps as  stated earlier are commenced for its acquisition.   Obviously, under the MRTP Act, in a case where it is not  acquired by negotiation, the authority can only request  the State Government to acquire the lands.  In the  context of Sections 126 and 127, the question is whether  it is not sufficient if the authority within six months of  receipt of the purchase notice issued by the owner,  applies to a State Government for acquiring the land as a  step contemplated by Section 127 of the MRTP Act.  This  is also a question which is of considerable importance in  the context of the Town Planning Acts and the lapsing of  schemes as distinct from the lapsing of acquisition.  I  feel that this is also an important question which  requires an authoritative pronouncement, in the context  of the argument on behalf of the appellant that the step  contemplated by Section 127 of the Act is a step under  the Land Acquisition Act and not a step under the MRTP  Act.

28.             But I find that my learned brothers are inclined  to decide this question here and now.  I find it difficult to  appreciate why we should do so when the main issue  involved herein also is being referred to a Constitution  Bench.  But since my learned Brothers have chosen to  pronounce on it, I have necessarily to express my views.   I find myself unable to agree with the view taken by them  on the interpretation of Section 127 of the MRTP Act.   Under Section 126(1) of the Act the authority under the  MRTP Act can only make an application to the State  Government for acquiring the concerned land under the  Land Acquisition Act, 1894.  This is clear from Section  126(1)(c).  And clause (c) applies, when the acquisition  cannot be made in terms of clauses (a) and (b) of Section  126(1).  What I want to emphasise here is that the

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authority under the MRTP Act cannot be set in motion  proceeding under the Land Acquisition Act while acting  under Section 126(1) of the MRTP Act.   It can only  request the State Government to acquire the land and  the State Government initiates steps to acquire it when it  is satisfied that the land, the acquisition of which is  sought for, is needed for the public purpose specified in  the application made by the authority under the MRTP  Act.  It is not as if the authority under the MRTP Act can  issue a declaration in the manner provided for under  Section 6 of the Land Acquisition Act read with Section  126(2) of the MRTP Act.

29.             When we interpret Section 127 of the Act, it is  not possible to forget the impact of Section 126(1) of the  Act.  Obviously, the provisions have to be read  harmoniously.  The court can only postulate the  question whether the authority under the MRTP Act has  done which it possibly could, in terms of the statute.   Therefore, while reading Section 127, we have to take  note of the fact that the authority under the MRTP Act  can only make an application for acquisition under the  Land Acquisition Act and nothing more.  Therefore, when  Section 127 of the MRTP Act says that \023if within six  months from the date of the service of such notice, the  land is not acquired or no steps as aforesaid are  commenced for its acquisition\024 the reservation shall be  deemed to lapse.  We have to see what the Authority  under MRTP Act has done.  The first part of the provision  above quoted is unambiguous and that is a case where  the land is actually acquired.  Or, in other words, the  acquisition is complete.  The second limb above quoted  shows that it is possible to avert the lapse of the scheme  if steps as aforesaid are commenced for its acquisition.   The step that the authority under the MRTP Act can  commence, is the step of applying to the State  Government to acquire such land under the Land  Acquisition Act.  After all, the legislature has given the  authority a locus poenitentiae for invoking the  machinery for acquisition under the Land Acquisition  Act.  Therefore, when a purchase notice is received by it,  in all reasonableness, what it can do is to make an  application to the State Government to make the  acquisition within six months of the receipt of the  purchase notice.  Is it necessary or proper to whittle  down the locus poenitentiae given to ensure that even at  the last moment the lapsing of the scheme can be  averted by the authority under the MRTP Act or even  after ten years it can seek the acquisition of the land on  the receipt of the purchase notice?  It is in that context  that in Municipal Coproration of Greater Bombay vs.  Dr. Hakimwadi Tenants\022 Association & Ors. (supra)  this Court approved the view of the Bombay High Court  that it is enough if the application is made by the  Authority for acquisition of the land. Suppose,  immediately on receipt of a purchase notice, the  authority under the MRTP Act makes an application to  the Government to acquire the land and for  administrative reasons or otherwise it takes the  Government time to initiate the proceeding and the six  months expire in between, can it be postulated that the  reservation has lapsed?  In that case we will be  compelling the authority under the MRTP Act to do  something that it has no power to do.  According to me

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such an interpretation of the provision would be  unreasonable and should be avoided.  Here, the  application has been made according to the respondents  by the Chief Engineer as authorised by the local  authority and to say that the letter written by him is  unauthorised or is not adequate compliance of Section  127 of the MRTP Act appears to me to be unwarranted  especially when we keep in mind the laudable objects of  the MRTP Act.

30.             The MRTP Act serves a great social purpose  and the approach of the court to an interpretation must  be to see to it that the social purpose is not defeated as  far as possible.  Therefore, a purposive interpretation of  Section 127 of the Act so as to achieve the object of the  MRTP Act is called for.

31.             I would, therefore, hold that there has been  sufficient compliance with the requirement of Section  127 of the MRTP Act by the authority under the Act by  the acquisition initiated against the appellant in the  appeal arising out of SLP(C) No.11446 of 2005 and the  reservation in respect of the land involved therein does  not lapse by the operation of Section 127 of the Act.  But  since on the main question in agreement with my  learned Brothers I have referred the matter for decision  by a Constitution Bench, I would not pass any final  orders in this appeal merely based on my conclusion on  the aspect relating to Section 127 of the MRTP Act.  The  said question also would stand referred to the larger  Bench.

32.             I therefore refer these appeals to a larger Bench  for decision.  It is for the larger Bench to consider  whether it would not be appropriate to hear the various  States also on this question considering the impact of a  decision on the relevant questions.  The papers be placed  before the Hon\022ble Chief Justice for appropriate orders.