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Mohammad Amir Ahmad Khan and anr. Vs. the Nagar Mahapalika and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad High Court
Decided On
Case NumberWrit Petn. Nos. 128 and 129 of 1962
Judge
Reported inAIR1965All599
ActsUttar Pradesh Nagar Mahapalika Adhiniyam, 1959 - Sections 130, 365, 365(1), 365(2) and 366; Constitution of India - Article 31 and 31(2); Uttar Pradesh Town Improvement Act, 1919 - Sections 30, 31 and 32; Uttar Pradesh Nagar Mahapalika (Amendment) Adhiniyam, 1964; Land Acquisition Act
AppellantMohammad Amir Ahmad Khan and anr.
RespondentThe Nagar Mahapalika and anr.
Appellant AdvocateMohd. Naziruddin and ;Saghir Ahmad, Advs.
Respondent AdvocateR.N. Srivastava, Adv. for Opposite Party No. 1
DispositionPetitions allowed
Excerpt:
(i) property - market value - schedule ii, para 10 and clause 3 of u.p. nagar mahapalika adhiniyam, 1959 - market value of the land is value assessed on that particular day when value has been assessed - compensation paid on market value of land. (ii) extension of area by municipality - sections 30, 31 and 32 of u.p. town improvement act, 1919 - schemes for circular road challenged by petitioner - property of petitioner falling under scheme area - scheme launched under sections 30, 31 and 32 is to be launched within territorial limits of municipality - schemes launched under sections 30, 31 and 32 can not be launched within the territorial limits of municipal corporation. (iii) acquisition of land - sections 130 and 366 of u.p. nagar mahapalika adhiniyam, 1959 - mahapalika can not acquire.....jagdish sahai, j. 1. these two writ petitions raise common questions of law and fact (and for?) that reason are being disposed of by this common judgment. the property to which writ petition no. 128 of 1962 relates is owned by raja mohammad amir ahmad khan along with one sri mohd. sadiq and is bounded as below.east: khasra nos. 160 and 161 (houses) and khasra no. 163 pucca lane of municipal board. west: khasra nos. 158, 161, 182 and 167 gowyin road: north: mohalla bazar jhau lal, khasra no. 148, circular road of municipal board. south: mohalla bazar jhau lal, khasra no. 154, municipal lane and khasra no. 158 kothi sri masudu-hasan, advocate. this property is hereinafter described as 'property no. 1'. the property to which writ petition no. 129 of 1982 relates is owned by sri jamal rasul.....
Judgment:

Jagdish Sahai, J.

1. These two writ petitions raise common questions of law and fact (and for?) that reason are being disposed of by this common judgment. The property to which Writ Petition No. 128 of 1962 relates is owned by Raja Mohammad Amir Ahmad Khan along with one Sri Mohd. Sadiq and is bounded as below.

East: Khasra Nos. 160 and 161 (Houses) and Khasra No. 163 Pucca Lane of Municipal Board.

West: Khasra Nos. 158, 161, 182 and 167 Gowyin Road:

North: Mohalla Bazar Jhau Lal, Khasra No. 148, Circular Road of Municipal Board.

South: Mohalla Bazar Jhau Lal, Khasra No. 154, Municipal lane and Khasra No. 158 Kothi Sri Masudu-Hasan, Advocate.

This property is hereinafter described as 'property No. 1'. The property to which Writ Petition No. 129 of 1982 relates is owned by Sri Jamal Rasul Khan son of late Maharaja Sir Moharamad Ejaz Rasul Khan of Jahangirabad, and is described below:

Kothi No. 2, Barrow Road.

This property is hereafter 'called as 'property No. 2.'

2. The scheme which is challenged in Writ Petition No. 128 of 1982 is 'Circular Road Development and Housing Accommodation Scheme No. 95' (hereinafter described as Scheme No. 1). The one challenged in Writ Petition No. 129 of 1962 has been described as 'Street and Housing Accommodation. Scheme--Kothi Maharaja Jahangirabad at No. 2, Barrow Road, Khas Bazar, Lucknow' and hereinafter called as Scheme No. 2. Scheme No. 1 purports to have been framed under Sections 30 and 31 of the U. P. Town Improvement Act (hereinafter referred to as the Improvement Act) while Scheme No. 2 has been framed under Sections 28 and 31 of that Act. In both the cases notices contemplated by Section 36 of the Improvement Aet have been prepared and the notices or proposed acquisition of land have also been issued to the petitioners in both the writ petitions. All this happened before the U. P. Nagar Mahapalika Adhraiyam 1959 (hereinafter referred to as the Act) was enforced. The provisions of the Improvement Act have been repealed by virtue of the provisions of Section 581 of the Act and it is the admitted case of the parties that further proceedings in the cases would be governed by the provisions of the Act and not those of the Improvement Act.

3. In Writ Petition No. 128 of 1962 originally the following relief was claimed:

'Wherefore, it is most respectfully prayed that this Hon'ble Court may be pleased to issue a writ of mandamus restraining opposite parties Nos. 1 to 3from giving effect to the notification Annexure 3 and acquiring or taking possession of the petitioner's property under that notification. Any other writ or directions as may appear appropriate on the facts and circumstances of the case may be issued and this petition may be allowed with costs,'

By means of an application dated 15-12.1964 permission was sought to add the following relief:

'That by a writ of certiorari the entire proceedings of the Nagar Mahapalika, in respect of the property covered by this writ petition be quashed.'

That application was allowed and the relief has been amended. In Writ Petition No. 129 of 1962 the prayer is as follows:--

(a) That by a writ of certiorari the entire proceedings of the Nagar Mahapalika, Lucknow, from 31-1-1960 to 20.1.1962 be quashed.

(b) That a writ of mandamus, prohibition or other appropriate writ or direction be issued restraining the Nagar Mahapalika, Lucknow, from executing the scheme known as ''Street and Housing Accommodation Scheme Kothi No. 2, Barrow Road, Khas Bazar, Lucknow' and acquiring the petitioner's property thereunder.'

4. Mr. Nazir Uddin, who has appeared for the petitioners in both the cases has made the following three submissions before me:--

(1) That the provisions contained in paragraph 10 of Schedule II of the Act are ultra vires being violative of Article 31(2) of the Constitution of India.

(2) That the two schemes giving rise to these petitions could not have been legally framed by the improvement Trust, Lucknow, and cannot validly be continued by the Nagar Mahapalika, Lucknow, inasmuch as they do not pertain to an ''extended area'.

(3) That the two schemes not involving expenditure of Rs. 10 lacs or over did not require sanction of the State Government nor was any such sanction accorded by the State Government and for that reason they would not be covered by the provisions of Section 365 of the Act with the result that proceedings for acquisition of property to implement those schemes can only be taken by the State Government under the provisions of the Land Acquisition Act and the Nagar Mahapalika cannot resort to any provision in the Act for purposes of acquisition of properties to implement those schemes including property No. 1 and property No. 2.

In Writ Petition No. 129 Mr. Naziruddin has also made a fourth submission, the same being that the Nagar Mahapalika is acting mala fide and on that ground also the proceedings relating to the acquisition of the petitioners' land are liable to be quashed.

No other submission has been made before me.

5. I would deal with the submissions seriatim:

Article 31 of the Constitution, so far as relevant For our purposes, reads:--

''31 (1) No person shall be deprived of his property save by authority of law.

(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given; and no such law shall be called in question in any Court on the ground that the compensation provided by that law is not adequate.

(2A) .....'

Mr. Nazir Uddin contends that in the Act there is now provision fixing the amount of compensation and that: even though some sort of principles have been provided on which compensation can be determined those principles have no connection or relation with compensation and those provisions amount to a fraud on the Constitution. The only provision which deals with the matter of compensation or principles relating to compensation is contained in para. 10 of the IInd Schedule of the Act. That provision so far as relevant for our purposes reads:--

'10 (3) At the end of Section 23 of the said Act the following shall be deemed to be added namely-

(1) .....

(2) For the purpose of clause first of Sub-section (1) of this section-

(a) the market value of the land shall be the market value according to the use to which the land was put at the date with reference to which the market value is to be determined under that clause;

(b) .....

The words 'of the said Act' occurring in Clause 3 of para. 10 obviously and admittedly refer to the Land Acquisition Act. The submission of Mr. Nazir Uddin is that in order to determine the value of a piece of land or compensation payable in respect of the same what has got to be seen is not the use to which the land is being put to but its money equivalent or market value at the date of the publication of the notification under Section 4, the damage sustained by the owner of persons entitled to compensation by reason of taking of any standing crops or trees, the damage if any sustained by him at the time of taking posses sion of the land by reason of severing such land from his other land, the damage if any sustained by him. at the time of the taking possession of the land by reason of the acquisition injuriously affecting his other propsrty; the circumstance that the person whose property is being acquired is compelled to change his residence or place of business, the damage if any resulting from the diminution of the profits of the land between the time of declaration under Section 6 and taking possession etc. In other words it is contended that the principles which can be relevant for the purposes of determining the compensation payable in respect of a piece of land are contained in Section 23 of the Land Acquisition Act. The learned counsel further submits that in order to determine the market value oi land its location, its size, the quality of the land, the rate at which the neighbouring piece of land has been sold and such other circumstances are relevant. it is pointed out that a very inferior quality of land situate in a very thinly populated and in a remote corner of the city of Lucknow may have been given out on a daily rent of Rs. 50/- to a mobile cinema while an equally big piece of land situate in the heart of the city, as for example in Hazratganj, may not be put to any use because of some unsurmountable difficulties in the way of the owner and if compensation were to be determined on the basis of use the result would be that the owner of the land situate in the thinly populated corner of the city of Lucknow would get much more compensation than the owner of the plot in Hazratganj. The submission of the learned counsel in other words is that there is no nexus between the use to which the land is put and the amount of compensation which the owner should receive. The question for consideration therefore, is as to what do the words 'the market value of the land shall be the market value according to the use to which the land was put at the date with reference to which the market value is to be determined' mean, Mr. B. K. Dhaon who has appeared for the respondent, the Nagar Mahapalika, has contended that all that this provision means is that full marketvalue as found to exist on the relevant date would be given but future potentialities would be excluded from consideration while determining the amount of compensation. He has strenuously contended that whatever may be the manner in which the provision has been drafted the idea is not to provide an irrational method of calculating or determining compensation or to confiscate the property but of confining the evaluation on the basis of the conditionsexisting on the relevant date but without considering its future potentialities. Under the provisions of Section 23 of the Land Acquisition Act along withother factors future potentialities of the land sought to be acquired have got to be taken into consideration. (See Har Kishen Das v. Satgur Prasad. and it seems to me that the Act has departed from that rule in enacting para. 10 of the Second Schedule. The provisions oi para. 10 (3) of the Act have been bodily lifted from the Improvement Act and have been reproduced verbatim in the Act. The provisions of the latter Act were alsoextended to the State of Punjab and have been considered by this Court, the Judicial Committee and the East Punjab High Court.

6. In Secy. of State v. Makhan Das : AIR1928All147 a Full Bench of this Court had to consider the effect of para. 10 (3) of the Schedule to the improvement Act. The interpretation of the paragraph was that the only factor that could be taken intoconsideration was the use to which the land was putwhich was an arbitrary rule and made the provision in some respects confiscatory in nature and that in some no compensation would be payable.

Lindsay J., who spoke for the Court observed as follows:--

'The language of the section is rigid. The governing words are 'according to the use to which the land was put, etc.' The determining factor is the actual use of the land at the date in question, and any use of the land prior to that date is to be disregarded. In view of this phraseology it appears to be impossible, for the purpose of assessing the market value to resort to any other facts such, for example, as the history of the land, its physical features or its situation; for while data of this nature might otherwise be of weight as indicating the value of the land to the owner, they could only be of service in estimating a potential value based upon the use to which the land might most profitably be put. But the section expressly excludes all consideration of potentialuse by laying down that the determining factor in the assessment of the market value is the actual use to which the land is beiug put on the date of the notification and from this the conclusion appears to be that either intentionally or through inadvertence the Legislature has declared that in certain conditions the market value of the land on the materialdate may be nil.'

There cannot be any manner of doubt that the ratio of the Full Bench decision is that in determining compensation no other factor is to be taken into consideration even though operating on the relevant date, except the use to which the land was put by the owner thereof. If that is the meaning of words 'according to the use to which the land was put' there would be no difficulty in holding that it is not a principle on which compensation can be determined and that there is no nexus between that so-called principle and compensation. But that is not the viewthat was taken by the Judicial Committee in KailashChandra v. Secy. of State . Their Lordships held that all that the words 'according to the use to which the land was put' meant was that the ''purposes in the future must be disregarded.' in other words their Lordships held that full market value on the relevant date had to be given but whatwas excluded was the future potentiality. After quoting from the judgment of Lindsay J. In : AIR1928All147 (Supra) their Lordships observed as follows :

'Their Lordships are unable to assent to this view. On the true construction of Section 23, the former plot ought to be valued as a garden and the latter plot ought to be valued as agricultural land. The effect of Section 23(3)(a) of the Act of 1894 as so amended is that the possibility of the garden or agricultural plot being used (e.g.) for building purposes in the future must be disregarded. It is significant that Sub-clause (b) of that sub-section makes provision for the case of the owner having taken active steps and incurred expenditure to secure a more profitable use of the land. In such a case the owner may be paid 'further compensation based on his actual loss' Apart from such a case, only the present use of the land can be considered for the purpose of arriving at the market value.'

The ratio of the decision is that the words 'according to the use to which the land was put' stand in contradistinction to the market value of the land inclusive of its future potential value. In The Governor-General in Council v. Hafiz Ghias-ud Din AIR 1949 E P 160 a Division Bench of the East Punjab High Court had occasion to consider the provisions of our Improvement Act which, as already stated earlier had been extended to the State of East Punjab. Mahajan, J., who spoke for the Court considered the decision of our Court in : AIR1928All147 (Supra) and also the decision of the Privy Council in (Supra). Their Lordships also noticed a subsequent decision of this Court in Debi Din v. Secy. of State for India AIR 1942 All 186 where the rule enunciated by this Court in : AIR1928All147 (Supra) was followed. Mahajan, J. concluded:

'It is quite clear that their Lordships ot the Privy Council did not accept the view that had been expressed by the Full Bench of the Allahabad High Court as to the interpretation to be placed on Section 23, Land Acquisition Act, as amended by the United Provinces Town Improvement Act, 8 of 1919. As a result of the decision of their Lordships of the Privy Council, I am bound to hold that the market value of the land under the United Provinces Town Improvement Act, Section 23 has to be assessed according to the use to which the property is being put at the date of acquisition as distinguished from the use to which it is capable of being put in future. In other words, all ideas of potential value of the land have to be excluded when assessing the market value of the property.'

Having given the matter my anxious consideration I am of the opinion that the decision of the Judicial Committee in Babu Kailash Chandra's case leaves no manner of doubt that the expression 'according to the use to which the land was put' only means that the market value of the land on the relevant date but not inclusive of its future potentiality. In Manindra Chandra Nandi v. Secy. of State for India, ILR 41 Cal 967: (AIR 1914 Cal 193) a Division Bench of the Calcutta High Court had to interpret similar words occurring in Section 23 of the Land Acquisition Act as amended by the Bengal Act. The words were

'to be the market value according to the disposition of the land or building at the date of the publication of the declaration thereto under Section 6 of the said Land Acquisition Act.'

The learned Judges held that all that the provision meant was that the future potentiality had to be excluded and that full market value had to be given as existing or operating on the relevant date. For the reasons mentioned above I have come to the conclusion that the principle contained in Section 23 of the Land Acquisition Act as amended by paragraph 10 (3) of the Second Schedule to the Act is that fuli compensation shall be given of the land or property sought to be acquired but on the basis of the markat value as existing on the relevant date exclusive of future potentiality.

7. I have found no good reason and none has been suggested by the learned counsel for the petitioners to conclude that this principle has no nexus with compensation. I have already extracted the provision of Article 31(1) and (2) of the Constitution. It is elementary that Sub-clause (2) of that Article as it stands today has been brought in by the fourth amendment of the Constitution and that adequacy of compensation is no longer Justiciable. If the impugn. ed law either fixes the amount of compensation or provides the principles on which the compensation has to be determined it would be a valid legislation notwithstanding the fact that the compensation when worked out may either be inadequate or may not be the full market value of the property acquired. There is a distinction between the full compensation not being paid and there being no principles at all in the impugned legislation for determining compensation. Whereas the former is not justiciable the latter is subject to scrutiny by Courts. It is not necessary to cite authorities in support of the proposition that after the fourth amendment introduced in 1955 the question of adequacy of compensation is no longer justiciable. That view has been taken by the Supreme Court in Kavalappara Kottarathil Kochuni v. States of Madras and Kerala : [1960]3SCR887 and M/s. Burrakur Coal Co. Ltd. v. Union of India : [1962]1SCR44 . It is true that Article 31 still speaks of compensation and normally compensation means the full market value of the property acquired but it is settled law that the word 'compensation' as now occurring in Article 31 has not been used in the sense of full market value. Mr. Nazir-Uddin placed reliance upon D. Namasivaya Mudaliar v. State of Madras : AIR1959Mad548 . In that case the market value was not to be determined on the basis of its value on the date of the notification under Section 4 of the Land Acquisition Act but on 28-4-1947 which was a much earlier date. The Madras High Court held that such a provision was violative of Article 31(2) of the Constitution of India. The point raised and decided in the Madras case does not arise before me and for that reason the case is clearly distinguishable for the reasons mentioned above. I am of opinion that the impugned provision is not hit by Article 31(2) of the Constitution of India.

8. While considering the next submission of Mr. Nazir-Uddin I would like to recall that Scheme No. 1 has been iramed under Section 30 read with Section 31 of the Improvement Act, and Scheme No. 2 has been framed under Section 28 read with Section 31 of that Act. Sections 28, 30 and 31 of that Act so far as relevant for our purposes read :--

''28. (1) Whenever the Trust is of opinion that, for the purpose of -

(a) providing building sites, or

(b) remedying defective ventilation, or

(c) creating new or improving existing means of communication and facilities for traffic, or

(d) affording better facilities for conservancy.

It is expedient to lay out new streets or alter existing streets (including bridges, causeways and culverts), the Trust may pass a resolution to that effect, and shall then proceed to frame a street scheme for such areas as it may think fit.

2. A street scheme may within the limits of the area comprised in the scheme provide for-

(a) the acquisition of any land which will, in the opinion of the Trust, be necessary for its execution;

(b) the re-laying out of all or any of the lands so acquired, including the construction and reconstruction of buildings by the Trust or by any other person and the laying out construction and alteration of streets and thorough-fares;

(c) the draining, water-supply, and lighting of streets and thorough-fares so framed or altered;

(d) the raising, lowering, or reclamation of any land vested in, or to be acquired by the Trust for the purposes of the scheme;

(e) the formation of open spaces for the better ventilation of the area comprised in the scheme;

(f) the acquisition of any land adjoining any street, thoroughfare, or open space to be formed under the scheme.

30. (1) in regard to any area to which this Act is extended, the Trust may, from time, prepare a scheme of proposed public streets with plans showing the direction of such streets, the streets alignment and building line on each side of them, their intended width and such other details as may appear desirable.

31. Whenever the Trust is of opinion that it is expedient and for the public advantage to provide housing accommodation for any class of the inhabitants of any area to which this Act is extended, the Trust may frame a scheme (to be called a 'housing accommodation scheme') for the purpose aforesaid.'

Mr. Naziruddin has contended that the expression 'in regard to any area to which this Act is extended' relates to such area which is situated outside the limits of the Municipality but to which the provisions of the Act had been extended. In order to arrive at that conclusion he has placed reliance upon Section 32 of the Improvement Act and has brought to my notice the words 'to control and provide for the future expansion of a municipality in any area to which this Act is extended'. Learned counsel contends that the words 'future expansion of a municipality' obviously mean expansion in the territorial sense or in the sense of enlargement of area by adding portions to it. He also submits that in as much as such a scheme is described as a town expansion scheme in the Improvement Act it is obvious that the idea is to add something to the already existing town. He has also placed reliance upon the circumstance that other provisions of the Act which deal With schemes, as for example, Section 25 of the Act which deals with the general improvement scheme, Section 26 of the Act which deals with rebuilding scheme, Section 27 which deals with rehousing scheme, Section 28 which deals with street scheme and Section 29 which deals with a deferred street scheme, do not have in them the words 'any area to which this Act is extended'. It has been strenuously urged that the omission in other sections than Sections 30, 31 and 32 dealing with schemes of the words 'any area to which this Act is extended' not purely accidental or inadvertent but deliberate on the part of the Legislature. The submission is that this is due to the fact that whereas schemes covered by Sections 25 to 29, both inclusive, are intended for purposes of an existing town or a municipality, schemes contained in Sections 30 to 32, both inclusive, by their very nature are meant only for the purpose of areas which are adjacent to a municipality and do not form part of it but to which the provisions of the Improvement Act have been extended. Having given the matter my anxious consideration, I am of opinion that these submissions of Mr. Naziruddin are well founded. It is clear from the provisions of Section 32 as also from the scheme of Ch. IV of the Improvement Act that the expression 'any area to which this Act is extended' relates to areas situated outside butadjacent to a municipality and to which the provisions of the Improvement Act have been extended. In this connection reference may be made to S. 1 Clause (3) of the Improvement Act which provides that

'The Act shall come into operation in the whole or any part of any municipality and in any area adjacent thereto on such date as may be specified in such notification.'

It appears to me that it is areas adjacent to a municipality which have been referred to in the expression 'to any area to which this Act is extended' and do not include the municipal town to which the Act has been extended. This is also revealed by the circumstance that the development scheme, the housing accommodation scheme and the town expansion scheme envisaged and provided for by Sections 30, 31 and 32 respectively are such schemes which can only appropriately be launched in a new area and one which is not developed and which does not form part of a municipality. Section 32 clearly points to the conclusion that the town expansion scheme is designed for the purpose of expanding an already existing municipality. I am, therefore, of the opinion that schemes contemplated and provided for by Sections 30, 31 and 32 of the Improvement Act could not be launched in the city of Lucknow i. e. within the territorial limits of the Municipal Corporation.

9. In the present case scheme No. 1 has been framed under the provisions of Sections 30 and 31 of the Improvement Act while scheme No. 2 has been framed under Sections 28 and 31 of the Act. Admittedly, both these schemes are to operate within the limits of the Municipal Corporation of Lucknow (the erstwhile Municipality of Lucknow). It is also a matter of admission that in areas adjacent to the city of Lucknow the provisions of the Act have not been extended. In view of my finding that a scheme under Section 30 or 31 of the Improvement Act can be launched only in an area which is outside the municipality and to which the previsions of the Improvement Act have been extended, scheme No. 1 could not have been validly launched for the city of Lucknow. The scheme itselt shows that it is to operate round about the Circular Road which admittedly lies within the Corporation of Lucknow. It is true that scheme No. 2 purports to have been framed both under Sections 28 and 31 of the Act. It is, however, clear that what is provided therein will be fully covered by the provisions of Section 28 of the Act and the mention of Section 31 of the Improvement Act is superfluous. Merely because it was mistakenly believed that the scheme No. 2 could be launched under Section 31 and ior that reason reference to that section was also made, that scheme which is covered and protected by Section 28 of the Improvement Act cannot be invalidated. In other words if the scheme could be launched or saved by Section 28 of the Act it is wholly immaterial that Section 31 has also been mentioned in the notification. That being the position, 1 am of the opinion that whereas Scheme No. 1 could not have been validly launched there is no defect in scheme No. 2 and its validity is beyond any question.

10. The submission that now remains to be considered is whether for the acquisition of properties Nos. 1 and 2 the provisions of Section 365 of the Act would be applicable or it is necessary for the Mahapalika to make a request to the State Government to acquire those properties under the provisions of the Land Acquisition Act read with Section 130 of the Act. Section 365 as it stood at the relevant time (i.e. before the amendment) reads :--

'365. Acquisition of land acquired for Improve, ment Scheme--(1). Upon the sanction of an improvement scheme by the State Government, the Mukhya Nagar Adhikari may enter into an agreement with any person for the purchase, leasing or exchange by the Mahapalika from such person of any land which the Mahapalika is authorised to acquire for an improvement scheme or any interest is such land.

2. The Mahapalika may for the purposes of an improvement scheme sanctioned by Government acquire land or interest in land under the provisions of the Land Acquisition Act, 1894, as modified by the provisions of this Chapter.

3. The Mukhya Nagar Adhikari may for the purposes of an improvement scheme exercise any of the powers conferred upon him under Sub-section (2) of Section 273 and Section 290.

4. All acquisition of land and interest in land for an improvement scheme authorised under this Chapter shall be completed at least upto the stage making of awards within a period of five years from the date of the notification of the Scheme under Section 363 and any land in respect of which the acquisition is not so completed and the owner and occupier thereof shall cease to be subject to any liabilities under this Chapter;

Provided that the State Government may in any particular case before the expiry of such period and tor reason to be recorded in writing extend the period by one year.'

The provision is divided in four sub-sections. Sub-section (1) authorises the Mukhya Nagar Adhikari to obtain land or any interest therein by private negotiations and agreements for the purposes of improvement scheme. Sub-section (2) empowers the Mahapalika to invoke the provisions of the Land Acquisition Act as modified by the provisions of the Act in order to acquire land with a view to implement its schemes. Sub-section (3) confers on the Mukhya Nagar Adhikari certain powers and Sub-section (4) provides the period during which the scheme is to be completed. It is only under Sub-section (1) and (2) that the Mahapalika gets the authority or jurisdiction to acquire land by private negotiations or by itself utilizing the provisions of the Land Acquisition Act for the purpose of implementing the scheme. At the relevant time those sub-sections were confined in their operation to schemes sanctioned by the State Government i. e., those valued at over Rs. 10,00,000. By the amendment introduced in 1964 the words ''by the State Government' occurring in Sub-section (1) of section 365 have bean substituted by the words 'under this Chapter' and in Sub-section (2) the words ''by Government' have been substituted by the words 'under this Chapter' but the schemes admittedly have been launched several years before the amendments were introduced is Section 365 of the Act, actually before the Act was enforced. We are therefore not concerned with the amended Section 365 of the Act. The circumstance that the legislature thought it necessary to amend the section and did amend it by substituting the words 'by the State Government' by the words 'under this Chapter' in Sub-section (1) and the words 'by the Government' by the words 'under this Chapter' in Sub-seetion (2) clearly shows that the idea was to enlarge the scope of Section 385 and not to keep it confined to schemes above Rs. 10 lacs. There is no provision under the Act analogous to Sub-sections (1) and (2) of Section 365 under which property can be acquired either by private negotiations or through process of law in respect of the schemes below Rs. 10 lacs i. e., those for which sanction of the State Government was not necessary. Section 130 of the Act reads:--

'130. Procedure when immovable property cannot be acquired by agreement--(1) Whenever the Mukhya Nagar Adhikari is unable under Section 127 to acquire by agreement any immovable property or any easement affecting any immovable propertyvested in the Mahapalika or whenever any immovable property or any easement affecting aay immovable property vested in the Mahapalika is required for the purposes of this Act, the State Government may in its discretion upon the application of the Mukhya Nagar Adhikari, made with the approval of the Executive Committee and subject to the other provisions of this Act, 'order proceedings to be taken for acquiring the same on behalf of the Mahapalika' as if such property or easement were needed for a public purpose within the meaning of the Land Acquisition Act, 1894 or other law which may be applicable to the case.

2. Whenever an application is made under Sub-section (1) for the acquisition of land for the purpose of providing a new street or for widening or improving an existing street it shall be lawful ior the Mukhya Nagar Adhikari to apply for the acquisition of such additional land immediately adjoining the laad to be occupied by such new street or existing street as is required for the sites of buildings to be erected on either side of the street, and such additional land shall be deemed to be required for the purposes of this Act.

3. 'This section does not apply to the acquisition under Chapter 14.'

(underlined {here into ' ') by me).

The words underlined (here into ' ') in Subsection (1) of Section 130 clearly show that the normal rule which the provisions of Section 365 are an exception is that when property is required to be acquired for the purposes oE implementing a scheme by a Mahapalika the latter has to approach the State Government and the State Government may for the benefit of the Mahapalika acquire the property as if it was acquiring it for itself and for a public purpose. The words underlined (here in ' ') in Sub-section (3) clearly take the provisions of Chapter 14 out of the scope of Section 130 of the Act. Mr. Dhaon who has appeared for the Mahapalika has not brought to my notice any other provision of the Act and I am not aware of any myself which deals with the matter relating to the acquisition of property tor the benefit of the Mahapalika in order to enable it to implement its schemes. Reading the provisions of Section 130 along with Section 365 of the Act the inevitable result is as follows:--

1. That Section 365 is an exception to section 130 of the Act.

2. That Section 130 provides the manner in which the land or property for the benefit of Mahapalika can be acquired in order to enable it to implement its schemes.

3. That the Mahapalika has no right as such to directly have recourse to the acquisition of land in schemes below Rs. 10,00,000.

4. That in schemes above Rs. 10,00,000/- which have all got to be sanctioned by the State Government the Mahapalika can directly acquire the property by private negotiations under Sub-section (1) and by the process of law (Land Acquisition Act as modified by the Act) directly under Sub-section (2) of Section 365, of the Act. I have already noticed earlier that in the present case admittedly both the schemes are below Rs. l0,00,000/-. Consequently, it is clear that the properties belonging to the petitioners in both the cases can only be acquired in the manner provided by Section 130 of the Act. Mr. Dhaon has placed reliance upon Section: 366 of the Act. In my judgment it is wholly irrelevant for the decision of the point which I am called upon to decide. That provision does not confer on the Mahapalika the right nor does it provide the procedure under which laud or property can be acquired in order to implement a scheme. It only provides for the provisions of the Land Acquisition Act being read modified by the context of the Act. It is obvious that in the Land Acquisition Act many words have been used which cannot apply to a Mahapalika and it is is order to harmonise the two that the provisions of Section 360 have been enacted.

11. In my judgment there is no substance in submission of Mr. Naziruddin that the Improvement Trust has acted mala fide in launching the scheme No. 2 and the Mahapalika in implementing it. The only ground on which the complaint of mala fide is made is that simultaneously several properties of the petitioner of Writ Petition No. 129 of 1962 are being acquired. That can hardly be a ground for adjudging the action of the respondents mala fide. The submission must consequently fail.

12. The result, therefore, is that scheme No. 1 being invalid and unauthorised in law cannot be implemented. Scheme No. 2, however, can be implemented but the property of the petitioner cannot be acquired except by having recourse to legal proceedings. I, therefore, allow Writ Petition No. 128 of 1962 in its entirety. The proceedings relating thereto are quashed. It has been contended by Mr. Dhaon that in view of the circumstance that the property has not yet been acquired and the provisions of Section 365 have already been amended so as to make all the schemes whether they are above Rs. 10,00,000/- or below it amenable to the provisions of Section 365 of the Act, the result is that the Nagar Mahapalika can in future proceed under the provisions of Section 365 of the Act even with regard to Scheme No. 2. The submission is well founded and if fresh notifications are issued under the amended section, I see no difficulty in the property No. 2 being acquired. But the Corporation had already issued notices for the acquisition of that land before Section 365 was amended and they have not founded their notices on the amended provision. I, therefore, quash the notices dated 22-2.1960 and 31-3-1960. I do not however quash the scheme No. 2. The Mahapalika may implement it and also acquire property No. 2 by issuing fresh notices in accordance with law.

13. In the circumstances of the case the parties shall bear their own costs in both the cases.


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