R.A. Jahagirdar, J.
1. This petition under Article 226 of the Constitution raises a question as to the interpretation of the Bombay Provincial Municipal Corporation Act, 1949, hereinafter referred to as 'the Act'. The petitioner is the Pune Municipal Corporation while the respondents are the owners of a property, part of which has been acquired by the Municipal Corporation under circumstances mentioned in section 213 of the Act. Section 213 of the Act provides that the Municipal Commissioner may, after giving to the owner of the land or building not less than seven clear days' written notice of his intention to do so, take possession, on behalf of the Corporation of the said land with its enclosing wall, hedge or fence, if any, if such land is within the regular line of a public street. This is broadly called the process of straightening the contours of a road in a city. Provision has been made for payment of compensation under section 216 of the Act for any loss which is thus suffered by the owner of a building or land. Before we proceed to examine the relevant provisions of the Act and the contentions raised on behalf of the parties appearing before us, we may briefly indicate the circumstances in which this petition has been filed.
2. For the construction of a new bridge on river Mutha for the purpose of joining two areas known as Kasba Peth and Shivajinagar in Pune City, open land measuring 1619, 125 square feet belonging to the respondents was taken over by the Municipal Commissioner of Pune after following the procedure prescribed under section 213 of the Act. The Commissioner awarded what he regarded as the compensation to the respondents and this compensation amounted to Rs. 12,034.75 p. This consisted of cost of the land at the rate of Rs. 6 per square foot, cost of the structure at Rs. 750 and solatium at the rate of 15 per cent. The respondents preferred an appeal under section 391 of the Act to the Judge of the Court of Small Cause and in that appeal the Small Causes Court Judge enhanced the compensation to Rs 29,949.42 p., though the respondents had claimed even much higher compensation. The award passed by the Court of Small Causes is of 10th August, 1978 and is the subject-matter of challenge in this petition.
3. The petition as originally filed challenging the amount of compensation determined by the Court of Small Causes had contended that there was no basis for the award of the enhanced compensation made by the Small Causes Court. At the time of the hearing of this petition before us, an additional ground has been urged by the learned Advocate-General appearing in support of the petition and it is that under section 216 of the Act compensation in the manner in which compensation is awarded under the Land Acquisition Act cannot be awarded to any person who is deprived of his property under section 213 of the Act. Relying upon a judgment of a Division Bench of this Court in (Special Civil Application No. 999 of 1973 (with others) decided on 13th of December 1978)1, by Shah, J. (with Pendse J.), the learned Advocate-General also contended that in that judgment the award of compensation at one-third of the market value of the land acquired has been upheld by this Court and, therefore, that could be regarded as a reasonable compensation for the loss suffered by the owner of a property under section 216 of the Act. He has, therefore, proceeded to contend that the compensation awarded by the Court of Small Causes on the basis of the market value of the property is totally wrong and erroneous and deserves to be set aside. On the other hand, Mr. Naik, the learned Advocate appearing for the respondents, has contended that the Small Causes Court has determined the amount of compensation and that amount can be regarded as a measure of the loss suffered by the respondents and this Court in exercise of its jurisdiction under Article 226 of the Constitution need not interfere with the same.
4. We have heard both the learned Advocate-General and Mr. Naik in this regard and after going through the judgment of the Court below we are satisfied that the Court below has not proceeded to determine the amount of compensation as required by section 216 of the Act. It has proceeded on the basis that what the owner of the property is entitled to is compensation which is equivalent to the market value of the property of which he is deprived. This approach has vitiated the award passed by the Court of Small Causes and, therefore, it will have to be set aside for reasons which follow.
5. Section 216 (1) of the Act says that compensation shall be paid by the Commissioner to the owner of any building or land required for a public street under section 213, among others, for any loss which such owner may sustain in consequence of his building or land being so acquired and for any expense incurred by such owner in consequence of the order made by the Commissioner. In other words, section 216 of the Act does not provide for compensation at the market value of the land which has been acquired by the Municipal Commissioner under section 213 of the Act. What is provided is compensation for any loss which might have been suffered by the owner of the building or land. Determination of compensation for such loss on the basis of the market value of the property is, therefore, clearly not provided for under section 216 of the Act. In this connection, reliance has been placed by the learned Advocate-General on a judgment of the Privy Council in Colombo Municipality v. Letchiman A.I.R. 1947 P C 118. Delivering the judgment of the Court Sir John Beaumont, interpreting the relevant provisions of the law governing that case and the facts of that case, held that where a Municipal Council, in pursuance of a street broadening scheme, has acquired a portion of land abutting on a street and has enclosed it between street lines, the acquired strip cannot be valued as a building land. Proceeding further, Sir John Beaumont observed that this consideration did not render the land sterile and valueless, because it could be used for any purpose which does not involve erection of a building. In particular it was mentioned that in ascertaining the market value of the acquired strip Court cannot value the acquired strip as part of the rest of the land belonging to the owner. The value of the tenements, the wall and trees on the acquired strip should be included in the market value. The judgment itself does not rule out the possibility of considering the market value as a measure of the loss which might have been incurred by action taken under section 213 of the Act. What was being decided by the Privy Council in the case of Colombo Municipality was the determination of compensation under section 21 of the Ceylon Land Acquisition Ordinance. That provision had provided that in determining the amount of compensation to be awarded for land acquired under the Ordinance, the District Judge and assessors shall take into consideration (a) firstly, the market value at the time of awarding compensation for such land ; (b) secondly, the damage, if any, sustained by the person interested at the time of awarding compensation, by reason of severing such land from his own land; (c) thirdly, the damage, if any, sustained by the person interested at the time of awarding compensation, by reason of the acquisition injuriously affecting his other property, whether moveable or immovable, in any other manner, or his earnings; and (d) fourthly, if in consequence of the acquisition he is compelled to change his residence, the reasonable expenses, if any, incidental to such change. On the facts of that case it was found that in the property which had been acquired no building could have been constructed. Therefore, the question of determining the market value of the property acquired did not arise in the case of the Colombo Municipality. That itself, in our opinion, is not determinative of the question whether under section 216 of the Act the market value of the property acquired can be considered.
6. Before proceeding further, we must mention that the judgment of Shah and Pendse, JJ., in Special Civil Application No. 999 of 1973, does not rule out the possibility of the market value of the property being considered as a measure of the compensation for the loss suffered for action taken under section 213 of the Act. The facts of the case before Shah and Pendse, JJ., disclosed that the Commissioner had awarded to the claimants before that Division Bench one-third of the market value by way of compensation. The Division Bench confirmed this award made by the Commissioner on the ground that the claimants had not discharged the burden, which undoubtedly lay upon them, of proving before the Court below that the compensation awarded by the Commissioner was inadequate. On that ground their claim for higher compensation was disallowed. Reference was also made by the Division Bench to the judgment of the Privy Council mentioned by us above.
7. Shah and Pendse, JJ., in that case also referred to a judgment of another Division Bench of this Court (Kamat and Mukhi, JJ.,) in (First Appeal No. 386 of 1968)3, with others decided on 7th August, 1974). We will refer to this judgment in a shortwhile. The Division Bench of Shah and Pendse, JJ., has stated as follows :---
'In other words, it would be impermissible to claim proportionate market value for such acquired piece of land on the basis of the market value of the entire plot which is valued as building site.'
While so holding the Division Bench naturally relied upon the observations of the Privy Council in the case of the Colombo Municipality. Explaining further, the Division Bench proceeded to say as follows :---
'This is so because the acquired portion of the plot has no use for building purpose. The claim for loss purely on the basis of the proportionate market value of the entire plot could, therefore, be not tenable. In order to justify the higher claim for compensation for loss, such a claim must be based on various other factors, such as (a) utility of such piece of land being used as a garden; (b) loss due to severance of such land from the entire plot; (c) injurious affection to the remaining plot; (d) reduction in floor index space in relation to the entire plot by reason of acquisition.........'
The factors mentioned above were illustrative and not exhaustive and it was held that there might be several other factors. For example, it was pointed out that in certain cases the acquired piece of land could have been used for parking purposes or stalls which are let on hire. Such use might contribute to the augmentation of the quantum of compensation. In our opinion, therefore, the judgment of Shah and Pendse, JJ., does not in the first place lay down that payment of compensation equivalent to one-third of the market value is a proper of correct compensation for the loss suffered by the owner of a property by the action taken by the Municipal Commissioner under section 213 of the Act and secondly, that the determination of the market value of the property was irrelevant while deciding the compensation that is to be awarded under section 216 of the Act. The market value of the acquired portion could not always be regarded as equivalent to the compensation that is to be awarded under section 216 of the Act.
8. We may now refer to the judgment in First Appeal No. 386 of 1968 referred to above. In this judgment, an exhaustive survey has been made of the law touching upon this subject by taking note of not only the relevant provisions of law but of the judgments of the Supreme Court. It is not necessary for us to cover the ground which has already been covered by the judgment in this case. Dealing with not only section 216 of the Act but also section 301 of the Bombay Municipal Corporation Act, which is analogous to the provision in the Bombay Provincial Municipal Corporations Act, the Division Bench deciding the said First Appeal held as follows :---
'In our opinion, consideration of floor space index is only an aspect of injurious affection but the compensation under section 301 of the Bombay Municipal Corporation Act has to be determined by taking into consideration the appropriate method of valuation so that the person who is deprived of the property is fully indemnified against the loss.'
Proceeding further, in paragraph 53 of the judgment, it was laid down as follows :---
'As we have stated, market value of the land acquired must form an ingredient and then by taking other factors, such as severance, injurious affection and the situation of the land, the Court will have to arrive at such compensation as can be said to provide for full indemnification for the loss suffered by the owner.'
The judgment has given some more instances of the manner in which the loss may be suffered by the owner of the property which is dealt with under section 213 of the Act. It is, therefore, clear that what is to be provided under section 216 of the Act is compensation for any loss which the owner might sustain in consequence of an action taken under section 213 of the Act and not compensation equivalent to the market value of the property though the latter factor may be an ingredient while determining the compensation to be given under section 216. The award of the Court of Small Cause below in proceeding to determine only the market value as compensation to be given under section 216 of the Act is, therefore, on an erroneous basis and will have to be set aside. This itself does not prompt us to set aside the award and restore the amount given by the Municipal Commissioner. We notice that all the parties before the authorities below proceeded on the basis that what is to be determined is the market value of the property which has been acquired. In the interests of justice, it will be necessary to remand the matter to the Court of Small Cause below to determine the amount of compensation in the light of the observations made by us in this judgment. It is for the claimants to prove before the Court below the loss they might have sustained as a result of the action taken by the Municipal Commissioner under section 213 of the Act. They are free to lead such evidence as they deem fit and prove to the satisfaction of the Court below the loss that is suffered by them and the amount of compensation that should be given to indemnify them for such loss.
9. In the result, this petition is partly allowed. The judgment and order dated 10th August, 1978 passed by the Court of Small Cause at Pune in Municipal Appeal No. 6 of 1974 are set aside and that appeal is restored to the file of that Court which will proceed to decide the same in the light of the directions given in this judgment.
There will be no order as to costs in this petition.