T. Ramaprasada Rao, J.
1. In this batch of writ petitions, a common question is raised. The facts in W.P. No. 514 of 1971 can be perused, for understanding the relevant facts arising in this batch. Under the provisions of the Madras Town Planning Act, 1920, (hereinafter referred to as the Act) the State of Tamil Nadu called upon the Mayuram Municipal Council, Under Section 12 of the Act to prepare, publish and submit for their sanction a draft scheme as respects lands in regard to which a town planning scheme may be made. This notification in the official Gazette was made on 2nd May, 1944 and the Municipal Council was granted time till 10th March, 1945, for such preparation and submission. The Municipal Council did not send up the draft scheme as mandated from time to time ; the Municipality requested for time to submit the draft scheme for the sanction of the State Government. As a matter of fact, several applications were made seeking for such extension during the years 1945, 1946, 1947, 1949, 1950, 1951, 1953,. 1954 and 1955. Some applications were made at a time when the last date fixed for the submission of such draft schemes and as notified by the Government had expired. Some applications, however, were made in time. The Government acting on such applications extended the time for the preparation, publication and submission of the draft scheme by the Municipality and the last order in which the final extension was made by the Government was on 13th June, 1956 under which the Municipality was to prepare and submit the draft town planning scheme by 31st December, 1956. This time the Municipality submitted such a scheme and after due observance of the formalities required Under Section 13, the State Government after considering the objections and suggestions in and over the draft scheme so submitted by the Municipality and after making such enquiry as they deemed fit, sanctioned, what is known as, 'Pattamangalam Extension Towns Planning Scheme, Mayuram '. Such a sanction was made Under Section 14 (3) of the Act on 23th January, 1961. Under the provisions of the scheme, which provided for the laying of roads and providing various amenities in the area comprised in the town planning scheme, a provision was made for the preference of claims for betterment contribution Under Section 23 of the Act. Originally, the period within which such claims, should be made was fixed at two years ; but it is common ground that the time for submission of such claims was extended by four years by the Government in exercise of their powers Under Section 15 of the Act. Under clause 22, the betterment contribution may be levied for a term of 10 years after the execution of the scheme at a uniform rate of 61/4 per cent of the increase in value calculated in accordance with the provisions of the Act. Such schemes were made by the Municipality and were filed before the statutory authority known as the arbitrator appointed for the purpose Under Section 27 of the Act. One of the functions of the arbitrator so appointed is to entertain such applications filed by the Municipality for the determination of the quantum of betterment contribution as also the nature of liability of landowners-inside the town planning scheme. Section 27 (1) (d) provides that an arbitrator appointed by the State Government has the power to determine, in reference to the claims made, the properties which are liable to the betterment contribution Under Section 20 and estimate and record their market value at the date of the notification Under Section 10 or Section 12, as the case may be, in accordance with the provisions of clause (a) of Section 24. Section 24 enumerates the principles under which the betterment contribution shall be levied. The arbitrator, who so entertained the claims, dismissed them on the ground that no property inside the scheme is liable to contribute towards betterment contribution and even if it becomes necessary for him to fix the value of the properties inside the scheme area Under Section 27 (1) (d) of the Act, the relevant date was 13th June, 1956 which is the last date on which the Government extended the time for the Municipality to submit the draft schemes and not 2nd May, 1944 which was the date when the State Government for the first time called upon the Municipality to prepare and publish a draft scheme under the Act. Ultimately, the arbitrator was of the view that no improvements in the area were effected by the Municipality after the scheme was finally sanctioned by the State Government, Under Section 14, clause (6) of the Act and held that none of the properties inside the scheme area were liable for betterment contribution and, therefore, dismissed the claims. As against this the Municipality appealed Under Section 29 (1) of the Act.
2. The learned District Judge found that it is not open to the landowners inside the scheme area to question the validity of the scheme or the due process adopted for its making, as it is conclusive in law. He also held that the date on which the market value of the properties should be fixed Under Section 12 of the Act was 2nd May, 1944 and not 13th June, 1956. After finding that the properties inside the scheme area did have a benefit by reason of the making of the scheme, the appellate authoritity set aside the award of the arbitrator ; but on the ground that there was no sufficient materials before him to estimate the market value of the properties as on the date of notification Under Section 12 of the Act he caused a remand of the subject-matter to the file of the arbitrator and made an observation that the Municipality should be directed to move the appropriate authority for the appointment of a fresh arbitrator for the purpose. It is as against this award of the appellate authority (the District Judge, East Thanjavur) that the present writ petitions have been filed.
3. The case of the Government and the Municipality who were obviously sailing together, is that the scheme having been sanctioned by the State Government in accordance with the provisions of the Act and the means adopted for such sanction were quite in accord with the prescribed mandates under the statute, this Court cannot at this stage and not even the appellate Court or the arbitrator, could go into the propriety or the means or process adopted by the Municipality or the State Government in the matter of the submissions or ultimate sanction of the town planning scheme, under the Act. They would hesitantly state that the relevant date for fixing the market value of the properties Under Section 12 of the Act should be 2nd May, 1944 and not 13th June, 1956 which is normally understood as the date of notification Under Section 12 whereby the Municipality has been directed to publish a draft scheme for the sanction of the State Government.
4. Elaborate contentions were raised and I shall deal with them seriatim. The competency, regularity, propriety and legality of the claims for betterment contribution made by the Mayuram Municipality against the owners of the properties inside the periphery of the Pattamangalam Extension Town Planning Scheme, Mayuram, submitted by the Municipality and sanctioned ultimately by the State Government under the provisions of the Madras Town Planning Act is the subject matter in these writ petitions. For proper appreciation of the contentions, the relevant sections of the Act and the provisions of the scheme may be looked into. Under Section 9, it is open to the Municipal Council which includes the City Corporation to prepare a town planning scheme in respect of any land within the Municipal area or in its vicinity outside such area, a draft scheme showing the development proposed in the area. Such a resolution is subject to the final acceptance by the State Government. In the alternative it is open to the State Government Under Section 12 to call upon the Municipality in a certain set of cases or circumstances to submit for their sanction a draft scheme as respects any land in regard to which a town planning scheme may be made. Such a draft scheme either emanating at the instance of the Municipality or at the mandate of the State Government shall contain particulars prescribed in Section 13 of the Act. The draft scheme is duly published as provided for in that section and it is open to the public who is affected by any of the term or terms of the draft scheme to object to its final approval by the State Government. This is provided for in Section 14 (1) of the Act. Ultimately, Under Section 14 (3), the State Government may sanction the scheme with or without modifications or refuse to sanction the scheme as the case may be. On certain occasions the State Government may send back the scheme for re-consideration to the respective Municipalities, if in their opinion, such a reconsideration was necessary. Ultimately, the State Government sanctions the scheme Under Section 14, clause (5) and such a sanction shall be published by notification in the ::gazette and the scheme thereafter is open to inspection by the public. Sub-Section 6 of Section 14 of the Act says that a notification published under Sub-section (5) shall be conclusive evidence that the scheme has been duly made and sanctioned. After the sanctioning of the scheme, the State Government has the right at any time to vary the same or revoke it by a subsequent scheme duly published and sanctioned in accordance with the Act. The proviso to Section 15 (1) contemplates the case where the municipal council could modify the scheme by an agreement entered into with the persons interested in the scheme and with the concurrence of the State Government. But Under Section 15 (2) it is made clear that a power to vary or revoke the sanctioned scheme in so far as the State Government is concerned, is not in any way fettered in time or otherwise. Thereafter Under Section 23 of the Act, if a scheme provides for the laying of claims for betterment contribution, then the Municipality can make a claim for the purpose and within the time limited by the scheme and shall be entitled to recover from the owner of the property within the town planning area an annual betterment contribution for such term of years and at such uniform percentage of the increase in value not exceeding ten per cent as may be fixed in the scheme. There is a proviso to the section fixing the maximum amount of contribution which could be claimed under this head. The principles governing the claim for the betterment contribution are in Section 23 of the Act and an arbitrator is appointed Under Section 27 of the Act by the State Government to entertain such claims and to determine them as already referred to by me. The arbitrator's award is subject to appeal. Under Section 29, the District Judge concerned in cases arising outside the City of Madras and the Chief Judge, Court of Small Causes, Madras, in cases arising in the City of Madras, are designated as the statutory authorities for dealing with the appeals. I have already referred to the scheme, Pattamangalam Extension Town-Planning Scheme. The provisions therein are duly indicative of the process by which the properties inside the town planning scheme could be developed. Several yard-sticks for uniform development are provided therein besides certain amenities which the area as such were not enjoying prior to the induction of the scheme into the area. On the basis of such a making of the scheme as detailed in the twon planning scheme in question, claims for betterment contribution are made Under Clause 22 therein. I have also referred to this in the opening of the case. Now, I shall take up the broad contentions of the parties, and deal with them.
5. The scheme of the Act is reflective of the legislative purpose. It is intended to achieve economic and social planning and further orderly conjoint and coordinated development of an ill-developed or under-developed or a developing township or area. The purpose of the Act is to project a mini-master-plan for the prescribed areas in a municipality or a Corporation and involuntarily develop the properties within the boundaries of a sanctioned scheme partly with the help of the owners and residents inside the scheme area. The expenses to develop the scheme area are estimated and the estimate is budgeted for. One such budgeted item of income as per the scheme itself is the amount realisable from private persons by way of betterment contribution. The betterment contribution therefore, is a contribution or a levy made on the owners of the properties in the scheme for the common purpose of economic and social development of the inside and outside area. By reason of such a making of the scheme, the market value of the property within the scheme is bound to increase or in any event, there is a likelihood of its increase. It is from this unearned increment in the market value of the properties, a claim is raised by the Municipality for betterment contribution in accordance with the various percentages prescribed in the scheme itself, as provided for in the Act. The competency of the said Legislature to enact such an act is beyond dispute. As a matter of fact under items 5 and 6 of list 2 of the VII Schedule to the Constitution, the State has the power to legislate on matters relating to the administration and improvement of a Corporation or Municipality. The Madras Town Planning Act is undoubtedly one such legislation. This Act can also be justified as a piece of legislation which is well within the competence of the State Legislature as economic and social planning is one of the items in list 3 (concurrent list) of the VII schedule which undoubtedly enables all the State Legislatures to take up measures involving such advancement in the interests of the society at large. Mr. Vedantachari says that the betterment contribution is like a tax on income or wealth which is again beyond the power of the State Legislature. When the reality of the situation is borne in mind, the claim for betterment contribution is nothing more than a sanctioned legal exaction in lieu of works, improvements and planning done to a specified area, known as the Town Planning scheme area which, under the Act, is not intended to be done gratuitously. To subserve public interest and achieve a common purpose, the scheme is ushered in, sometimes at the instance of the Municipality concerned and at other times at the mandate of the State Government. The scheme obviously has to be financed. To recoup the expenses which has to be spent for all the improvements contemplated under the scheme, a right is given to the Municipality to demand contribution for such a public cause from the owners of properties inside the scheme. The betterment contribution effectually is to reimburse the Corporation or the Municipality towards the expenses which obviously it has to incur in the making of the scheme. Subba Rao, J., as he then was in Chengalvaroya Chetti v. Special Deputy Collector : AIR1953Mad348 , held that a notification published under Sub-section (5) is conclusive evidence that the scheme has been duly made and sanctioned. The foundational concept of the levy is not a fee or a tax as it is ordinarily understood. It is not a fee because it is not periodical nor is it referable to any periodical services to be rendered by the Corporation or the Municipality to the property owners. It is not a tax because all the citizens are not called upon to suffer the charge. It is a peculiar demand veiled in social economy and characterised by practical development. It is a contribution for a common purpose demanded by a statutory agency created under the Act. I have already justified the demand on the ground that it is in any event a demand arising from legislative mandate and which legislation has to be sustained at any rate under the concurrent list -- item 20 therein. The Supreme Court in Maneklal Chottalal v. M. G. Makwana : 3SCR65 , had occasion to consider the vires of a similar enactment of the State of Bombay. The Supreme Court sustained the Bombay Town Planning Act, 1954 on the ground that it is an enactment which the State Government could undertake under entry 20 of list 3. Again the Supreme Court, while discountenancing the contention that the betterment contribution is neither a tax nor a fee, said:
The amount that the petitioners have been asked to contribute is only towards the cost of the Scheme, which has to be incurred by the local authority. As to how exactly the contribution is to be worked out and the proportion in which the plots are to bear that burden, have all been indicated in the Act. Therefore, the liability of the petitioners to pay contribution has to be upheld once we come to the conclusion that the act, as a whole, will have to be sustained.
6. The next contention of Mr. Vedantachari is that the Government has no power to grant time to the Municipality, from time to time, to enable it to submit a draft town planning scheme for their ultimate sanction. The argument is that once a date is fixed for the submission of a scheme and if it is not so submitted neither the Municipality can ask for further time nor the Government has the power to extend the time. Section 12 of the Act vests in the Government an original power which is incapable of exhaustion. The sanctioning authority is the Government; the agency to provide material for such sanction is the Municipality. The Municipality does provide the hypothesis at the behest of the Government Under Section 12 of the Act. The primary mover of the process is the Government. As the Government is vested with the ultimate power to sanction draft schemes and equally call upon the Municipality to submit draft schemes, no question of extinguishment of such a power arises at any time. Every time the Government extends the time for the Municipality to submit a draft scheme, it literally means, they call upon the Municipality to place before them a scheme for the purpose of scrutiny and sanction. Whether the Municipality seeks for extension within or without the time limit fixed by the Government in their call for submission of a draft scheme, will not make any difference because on each occasion, when the Government acts and extends the time, they act as original authorities and by necessary implication call upon the Municipality to submit a draft town planning scheme Under Section 12 for their sanction. In Radhakrishna Chettiar v. State of Madras (1956) 2 M.L.J. 2791 : I.L.R (1958) Mad, 95, Rajagopala Ayyangar, J., held that the State Government have the competence to exercise power in them Under Section 12 from time to time and this is so Under Section 13 of the General Clauses Act. After referring to Section 13 of the General Clauses Act, the learned Judge held:
If Under Section 13, there is a power to require a council to submit a scheme before a date and the State Government have a right to fix any date they considered proper, in my judgment they have a power to alter that date. The theory that when once a date had been fixed, their power becomes exhausted does not appeal to me as sound.
In Chengalvaroya Chetty v. State of Madras : (1958)1MLJ253 , a Bench of our High Court took a similar view and held that it is no doubt true that the State Government has the power to extend by notification the time originally fixed Under Section 12 of the Madras Town Planning Act for purposes of land acquisition as this is only a simpler form of issuing fresh notification which power they undoubtedly possess and if the Government resorts to any extension of the time originally fixed, then the market value of the property sought to be acquired has to be decided for purposes of ascertaining the compensation as on the date of the last order of extension and not the date originally fixed. The decision of the Division Bench is an answer to the contention of the learned Government Pleader and the counsel for the Municipality as to what ought to be the date which has to be adopted for the purpose of evaluation of the market value of the properties for reckoning the betterment contribution payable. That the date which has to be adopted in the instant case is 13th June, 1956, cannot be disputed at all. The Division Bench has also expressed a similar view. I have also to add that the Government, while extending the time for the submission of a draft town planning scheme exercises its original power and if the situation is viewed in that light, then every such occasion should be understood as a due exercise of power by the Government Under Section 12 of the Act. Thus understood the last date of the order under which the Government extended the time for the preparation and submission of the scheme by the Municipality should be the relevant date for all purposes including the date for the fixation of the market value of the properties for claiming betterment contribution Under Section 23 of the Act read with clause 22 of the Scheme.
7. The next argument is settled by a decision of our High Court. It is against the competence of the State Government to amend, and vary a scheme after it has been sanctioned Under Section 14 clause (5) of the Act. The argument is that Under Clause 22 as it is originally understood, a time limit of two years was provided for, for making a claim for betterment contribution which time limit has been extended to four years by an amendment of the Scheme. The regularity or the propriety of such an amendment is questioned. When a similar question came up before Beach, C.J., in Ranganathan v. Krishnayya : AIR1946Mad504 , speaking for the Bench, held that the Provincial Government (as it was then called) had the power to extend the period in which the betterment contribution could be claimed as it is expressly provided for in Section 15 (2) of the Act. The power of the State Government to vary or revoke is entirely unrestricted except that before acting it shall give the persons affected an opportunity of preferring objections. Ultimately, the Court held that at any stage the Provincial Government had power to amend the scheme by enlarging the time for submission of claims for contribution.
8. The next contention is, whether the totality of the increase in the market value of the properties inside the town planning area is attributable to the town planning scheme and the projects contemplated therein. In other words, if there is an increase in the market value of the properties inside the town planing scheme, can it be said, it is invariably due to the scheme. In may be due to the scheme and other surrounding circumstances such as inflation, general rise in prices etc. So, it is contended that no part of the increase in the price, is relatable to the making of a town planning scheme; it may be that the general influence of the economic factors set out above might have an impact on the market value of the properties. But by the making of the scheme by providing several amenities inside the scheme area such as roads providing easy access to the neighbourhood, play grounds, parks etc., the market value is likely to increase, if not, bound to increase by reason thereof. It is this phenomenon, which was borne in mind, by the Legislature, when it provided for a claim for betterment contribution and fix a definite percentage of such unearned increment as the contribution to be paid by all the property owners inside the scheme area benefited by such amenities provided under the scheme. As a matter of fact our High Court in Balakrishna Mehta v. Corporation of Madras : AIR1962Mad7 observed..
The underlying implication of the provision in this regard found in Section 24 is that any increase in value subsequent to the making of the scheme is attributable to the scheme and on that basis the levy of betterment contribution is provided. There is to our minds what amounts to a statutory declaration that such an increase is due to the making of a scheme and that being so provided by the Legislature, it seems to us that it is not open to a. party to claim that any part of the increase is attributable to reasons other than the making of the scheme. If any citizen is aggrieved with such a statutory declaration, unless he could attack it on constitutional grounds, his remedy does not lie in the Courts but elsewhere.
The learned Counsel for the petitioners were unable to prompt me to say that the legislation in question anyway offends the provisions of the Constitution. Therefore, the declaration contained in the scheme resulting in the call for the payment of betterment contribution has to be sustained.
9. The final argument of the learned Counsel for the petitioners is that the appellate authority, should not only find that the properties are liable for betterment contribution but is obliged Under Section 27 of the Act to reckon the market value on the date of the notification Under Section 12 of the properties within the scheme area. The appellate authority did, no doubt, find that by reason of the making of the scheme, the properties inside the scheme area are liable for contribution. But after having expressed that the properties are so liable, he found as a fact that there were no materials before him to find the market value of the properties as on 2nd May, 1944 and for that purpose he remanded the subject-matter in the manner already expressed. The argument is that as the appellate authority is a persona designata he has no power of remand at all. That it is so, is settled by a decision of Subba Rao, J., in Municipal Council, Nellore v. Veerabhadra Rao 1956 A.W. R. 1158 : (1956) A. L.T. 774.. Considering the very same provisions and in particular Section 29 of the Madras Town Planning Act, the learned Judge held that the District Judge while dealing with the appeals as against the awards of the Arbitrators Under Section 27 of the Act, is a persona designata and not a civil Court and, therefore, he has no inherent power to remand the matter to ;the arbitrator. I respectfully agree with this view. It, therefore, follows that in so far as the order of remit contained in the order challenged is concerned, it poses an error apparent, for, the learned District Judge as the appellate authority, had no [jurisdiction to remand the same.
10. Whilst, therefore, making the rule nisi partly absolute and allowing the writ petitions in part, I make it clear that the findings of the appellate authority in all other respects are confirmed and the subject-matter is remitted back to the file of the District Judge, East Thanjavur, as an appellate authority Under Section 29 of the Act to record, the market value of the properties within the town planning scheme in question as on the date of notification Under Section 12 and in accordance with the provisions of clause (a) of Section 24 of the Act. The appellate authority shall bear in mind that the relevant date for the purpose of such evaluation is 13th June, 1956. The parties are at liberty to adduce such evidence as they deem fit on the aspect which is still to be decided and which has to be disposed of in the light of this judgment by the appellate authority. There will be no order as to costs in all the petitions.