Karnataka High Court
State Of Karnataka vs Sri B R Muralidhar on 28 August, 2012
Author: K.L.Manjunath
Bench: K.L.Manjunath
1
R
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 28th DAY OF AUGUST, 2012
PRESENT
THE HON'BLE MR.JUSTICE K.L.MANJUNATH
AND
THE HON'BLE MR.JUSTICE V.SURI APPA RAO
WRIT APPEAL NOs.918/2008
& 1484-1485/2011(GM-SLUM)
BETWEEN
1 STATE OF KARNATAKA
BY THE SECRETARY
DEPARTMENT OF HOUSING
M.S.BUILDING
DR B R AMBEDKAR VEEDHI
BANGALORE-01
2 THE UNDER SECRETARY TO GOVT
HOUSING DEPARTMENT
M.S.BUILDING
DR B R AMBEDKAR VEEDHI
BANGALORE-01
... APPELLANTS
(By Sri : S. VIJAYSHANKAR, ADV. GENERAL ALONG
WITH SRI.P.V.RAVINDRANATH, AGA FOR
APPELLANTS)
AND :
1 SRI B R MURALIDHAR
S/O B.V. RATHAN KUMAR
AGED ABOUT 22 YEARS
R/A NO 175/193, 4TH MAIN
5TH CROSS, CHAMARAJAPET
BANGALORE-18
2
2 KARNATAKA SLUM CLEARANCE BOARD
BY ITS SECRETARY
NO 55, RESILDAR ROAD
SESHADRIPURAM
BANGALORE-20
3 SRI V BALASUBRAMANYA
@ BALENDER VENKATA
S/O LATE VENKATASUBBA RAO
AGED ABOUT 55 YEARS
R/A NO 362, 12TH CROSS MAIN
HIG, RMV II STAGE
BANGALORE-94
4 M/S CHANDRA SPINNING AND WEAVING MILLS
PRIVATE LIMITED, OFFICE AT 9TH CROSS,
5TH MAIN ROAD, CHAMARAJAPET,
BANGALORE-18
REP BY ITS DIRECTOR M MANOHAR
S/O LATE MADHAVA KRISHNAIAH, AGED
ABOUT 63 YEARS
... RESPONDENTS
(By Sri R.NATARAJ, ADV. APPEARING FOR SRI. M
SHIVAPRAKASH FOR R1;
SRI.V.J.KUMAR, ADV. FOR R2;
SRI.D.L.JAGADEESH, ADV. FOR R3;
SRI.D.N.NANJUNDA REDDY, SR. COUNSEL APPEARING
FOR SRI.L.N.CHIDANANDAIAH FOR R4)
THESE WRIT APPEALS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET
ASIDE THE ORDER PASSED IN THE WRIT PETITION
NO.22611/05 C/W 20955/2005 & 21192/2005 DATED
20/9/2007.
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THESE APPEALS COMING ON FOR HEARING THIS
DAY, MANJUNATH J, DELIVERED THE FOLLOWING:
JUDGMENT
The State of Karnataka is questioning the legality and correctness of the order passed in W.P.Nos.22611/05, 20955/05 and 21192/05 passed on 20th September 2007 by the learned Single Judge, wherein the learned Single Judge while upholding the acquisition of the properties of the Writ Petitioners as valid has striked down Sec.20 of the Karnataka Slum Areas (Improvement and Clearance) Act, as unconstitutional and in further directing the Government the manner in which compensation has to be paid by following the provisions of sections-23 and 24 of the Land Acquisition Act.
2. Heard Sri. Vijay Shankar, learned Advocate General for the State, Sri. Nanjunda Reddy, learned senior counsel appearing for one of the respondent and Sri.V.Y.Kumar, learned counsel for the Slum Clearance Board.
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3. Under section 17 of the Karnataka Slum Areas (Improvement and Clearance) Act, 1973, (hereinafter referred to as 'Act') the lands of the Writ Petitioners were acquired under a preliminary notification dt.14.10.1982. Final notification was issued 23 years later on 23rd June 2005. The final notification was questioned by the Land owners. While questioning the legality and correctness of the preliminary and final notification, they also sought for a declaration to declare Sec.20 of the Act as ultra vires on the ground that the amount payable for acquisition of their lands u/s 20 of the Act, is illusory and virtually it is a nil compensation. The learned Single Judge considering the case put forth by both the parties held that the acquisition of the property was for public purpose and he declined to interfere with the acquisition proceedings. However, considering the provisions of Sec.20 of the Act, he came to the conclusion that the amount payable u/s 20 is illusory and depriving of a person to receive compensation, if the same property had been 5 acquired under any other provision of law and in such an event the land owners were entitled to receive the compensation under Sections-23 and 24 of the Land Acquisition Act which is equivalent to market value. Therefore, he has declared Sec.20 as unconstitutional.
4. The learned Advocate General taking us through the provisions of the Act and various provisions of the Constitution of India and several Judgments contends that the order of the learned Single Judge in striking down Section-20 of the Act is arbitrary and that the amount payable u/s 20 need not be a prevailing market value and the question of determining the market value based on the provisions of sections 23 and 24 of the Land Acquisition Act, is erroneous because the learned Single Judge did not consider the very intention and object of bringing a legislation to improve and clear the slums in the State. According to him, the Act was enacted by the State for the removal of un-hygienic and un-sanitary conditions prevailing in the slums for better 6 accommodation and improve the living conditions for slum dwellers for the promotion of public health and for the acquisition of land for the purpose of improving, developing or re-developing slum areas, clearance of slums and rehabilitation of slum dwellers. According to him, as per the Directive Principles of the State Policy, in order to improve the public health, the State has enacted the Act in question. In furtherance thereof, Sec.20 has been enacted to pay the amount in lieu of the compensation payable on account of the acquisition of the property.
5. Sec.20 of the Act reads as hereunder:
"20. Amount payable - (1) The amount payable in respect of any land acquired under this Act shall be three hundred times the property tax payable in respect of such land on the date of publication of the notice referred to in section 17, under the Municipal law applicable to such area and where no such property tax is payable in respect of such land, the property tax payable in respect of similar land adjacent thereto.
(2) The prescribed authority shall, after holding an enquiry in the prescribed manner, determine by order 7 the amount payable under sub-section (i) and publish the said order in the Official Gazettee. A copy of the said order shall be communicated to the owner of the land and every person interest therein. (3) Where the owner of the land and the owner of the building on such land are different, the prescribed authority shall apportion the amount between the owner of the land and the owner of the building (in the same proportion as the value of the land bears to the value of the building on the date of the acquisition)."
6. He further contends in view of 44th Amendment to the Constitution of India, Right to hold property is no more a fundamental right, it is only a Constitutional right and therefore, the Act has been enacted by the State pursuant to the Article 31-C of the Constitution of India. In view of deletion of Article- 19(1)(f), the learned Single Judge could not have declared sec.20 of the Act as unconstitutional. According to him, the amount payable u/s 20 is more or less analogous to the amount deposited in respect of various properties acquired by the State, namely, 8 Bangalore Palace under the Bangalore Palace Act, acquisition of Mysore Palace Act and Rorick Estate.
7. By relying upon the Judgment of RANGANATHA REDDY's case, he contends the amount fixed by the State under those enactment are up held by the Supreme Court and therefore the learned Single Judge has committed a serious error in striking down sec.20 of the Act. According to him, in view of Article 31-C and deletion of 19 (1)(f), when the Act in question has been enacted to give effect to the Directive principles of the State Policy as the Act is enacted under Entry 42 of List-III (Concurrent List) of the VII Schedule to the Constitution of India, in view of the receiving of ascent of the President under Article 254(2) of the Constitution of India, the present Act would prevail over the Central Act, i.e., the Land Acquisition Act 1894 and therefore, the learned Single Judge is not justified in striking down sec.20 of the Act.
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8. According to him, the amount fixed u/s 20 of the Act, also cannot be considered as illusory as the amount fixed would be three hundred times of the existing assessment of the property tax by the Municipality or other competent authority. Therefore, taking us through Sec.109 of the Karnataka Municipal Corporation Act, he contends that from time to time the assessment has to be revised taking into consideration the market value guidelines of the property published u/s 45(b) of the Karnataka Stamp Act and such value cannot be considered as illusory. In the circumstances, relying upon the Judgment in (2011) 9 SUPREME COURT CASES 1 in K.T.PLANTATION PRIVATE LIMITED AND ANOTHER VS. STATE OF KARNATAKA, he requests the court to set aside the order of the learned Single Judge and restore Sec.20 of the Act.
9. He further contends that the learned Single Judge has committed a further error in directing the Government, the manner in which compensation has 10 to be paid till the amendment is brought into Sec.20 of the Act, by applying the principles laid down under Sections-23 and 24 of the Land Acquisition Act. According to him, it is not for this Court the manner in which the State has to pay the compensation in view of striking down of Sec.20 of the Act and it is for the Government to consider the manner in which compensation has to be paid, in view of Article 31-C of the Constitution of India.
10. Per contra, Mr.Nanjunda Reddy, learned Senior counsel appearing for the contesting respondent submits that the arguments advanced by the learned Advocate General holds no water because the Act in question has come into existence pursuant to the ascent received by the President of India on 29.10.1974, on which date Article 19(1)(f) and Article 31 of the Constitution were in force. According to him, the argument of learned Advocate General could have been considered by this court, provided the Act in question had been enacted by the State, 11 subsequent to 44th Amendment to the Constitution of India. According to him, 44th Amendment has come into force w.e.f. 20th June 1979 nearly 4 years after the Act in question has been enacted by the State. Taking us through Article 300-A, he contends that the compensation payable to land loosers under the Act in question cannot be illusory and the word used amount as u/s 20 as three hundred times of the tax payable to the Municipality would be illusory, it will not be nearer to the market value, if the land has been acquired for public purpose under any other enactment. He further contends that the Judgment relied upon by the Advocate General is not concerning the facts involved in the present case as the said Judgment was rendered while considering Special enactment. The said Judgment has been delivered by Their Lordships holding that the properties were acquired by the State under a special statute to give effect to the provisions of Article 31-A(1)(a) of the Constitution and in the circumstances he contends that the Judgment in K.T.PLANTATION PRIVATE 12 LIMITED has no relevancy to the facts and circumstances of this case. According to him, the present Act in question does not get the protection under Article 31-C of the Constitution of India. In the circumstances, he requests the court to dismiss the appeal.
11. Having heard the counsel for the parties, we notice the following undisputed facts in the present appeal:
The learned counsel appearing for both the parties submit that in view of 44th Amendment, Right to hold the property is no more a fundamental rights, it is a Constitutional right given to a party. It is also not in dispute that the Act in question has been enacted by the State to give effect to Directive Principles of the State Policy, i.e. to provide better health to the general public. It is also not in dispute that the Act has come into force on 29.10.1974 much prior to the 44th amendment, on which date, the provisions of Articles 19(1)(f) and 31(3) were in force 13 and therefore what is to be considered in this appeal is:
" Whether the Judgment in K.T.PLANTATION PRIVATE LIMITED can be applied and based on the same, whether the order of the learned Single Judge is required to be interfered with or not."
12. In paras-189, 190 and 191 of the aforesaid Judgment, it is ruled that:
"189. Requirement of public purpose, for deprivation of a person of his property under Article 300-A, is a precondition, but no compensation or nil compensation or its illusiveness has to justified by the State on judicially justiciable standards. Measures designed to achieve greater social justice, may call for lesser compensation and such a limitation by itself will not make legislation invalid or unconstitutional or confiscatory. In other words, the right to claim compensation or the obligation to pay, though not expressly included in Article 300-A, it can be inferred in that article and it is for the State to justify its stand on justifiable grounds which may depend upon the legislative policy, object and purpose of the statute and host of other factors.
190. Article 300-A would be equally violated if the provisions of law authorizing deprivation of property have not been complied with. While enacting Article 300-A Parliament has only borrowed Article 31(1) (the "Rule of Law" doctrine) and not Article 31(2) (which had embodied the doctrine of eminent domain). Article 300-A enables the State to put restrictions on the right to property by law. That law has to be 14 reasonable. It must comply with other provisions of the constitution. The limitation or restriction should not be arbitrary or excessive or what is beyond what is required in public interest. The limitation or restriction must not be disproportionate to the situation or excessive.
191. The legislation providing for deprivation of property under Article 300-A must be "just, fair and reasonable" as understood in terms of Articles 14, 19(1)(g), 26(b), 301, etc. Thus in each case, courts will have to examine the scheme of the impugned Act, its object, purpose as also the question whether payment of nil compensation or nominal compensation would make the impugned law unjust, unfair or unreasonable in terms of other provisions of the Constitution as indicated above.
13. In view of para-191 this court has to examine the scheme of the impugned Act and its object and purpose so also the question whether the payment of nil compensation or nominal compensation would make the impugned law unjust, unfair or unreasonable in terms of other provisions of the Constitution as indicated above.
14. Again in para 192, 193 and 198, 201 and 209, Their Lordships have stated as hereunder
192. At this stage, we may clarify that there is a difference between "no" compensation and "nil" compensation. A law seeking to acquire private property for public purpose cannot say that "no 15 compensation shall be paid". However, there could be a law awarding "nil" compensation in cases where the State undertakes to discharge the liabilities charged on the property under acquisition and onus is on the Government to establish validity of such law. In the latter case, the Court in exercise of judicial review will test such a law keeping in mind the above parameters.
193. Right to property no more remains an overarching guarantee in our Constitution, then is it the law, that such a legislation enacted under the authority of law as provided in Article 300-A is immune from challenge before a constitutional court for violation of Articles 14, 21 or the overarching principle of the rule of law, a basic feature of our Constitution, especially when such a right is not specifically incorporated in Article 300-A, unlike Article 30(1-A) and the second proviso to Article 31-A(1).
198. Article 300-A, unlike Articles 31-A(1) and 31-C has not made the legislation depriving a person of his property immune from challenge on the ground of violation of Article 14 or Article 21 of the Constitution of India, but let us first examine whether Article 21 as such is available to challenge a statute providing for no or illusory compensation and, hence, expropriatory.
201. This Court in Jilubhai Nanbhai Khachar case took the view that the principle of unfairness of procedure attracting Article 21 does not apply to the acquisition or deprivation of property under Article 300-A.
209. Statutes are many which though deprive a person of his property, have the protection of Article 30(1-A), Articles 31-A, 31-B, 31-C and hence are immune from challenge under Article 19 or Article 14. On deletion of Article 19(1)(f) the available grounds of challenge are Article 14, the basic structure and the rule of law, apart from the ground of legislative 16 competence. In I.R.Coelho case the basic structure was defined in terms of fundamental rights as reflected under Articles 14, 15, 19, 20, 21 and 32. In that case the Court held that statutes mentioned in Schedule IX are immune from challenge on the ground of violation of fundamental rights, but if such laws violate the basic structure, they no longer enjoy the immunity offered by Schedule IX.
15. From the reading of the aforesaid paragraphs of the Judgment, we are of the opinion that it is for the State to demonstrate before the Court that amount fixed u/s 20 of the Act is not illusory and it is just and reasonable compensation.
16. The present Act cannot get any immunity under Article 31-C of the Constitution of India, since the present Act has been enacted prior to the 44th Amendment. If the present Act had been enacted after the 44th Amendment to the Constitution, we are of the view that the Judgment in K.T.PLANTATION PRIVATE LIMITED Vs. STATE OF KARNATAKA would squarely applicable. As stated supra, the present Act is enacted prior to the 44th amendment. In such circumstances, it is for the State that the amount 17 fixed u/s 20 of the Act is the market value and it is clear as no land looser can be deprived of his property without paying the reasonable compensation. But unfortunately, in this case, State has not made any efforts before us to show that three hundred times of the assessment fixed by the Municipality would be the reasonable compensation or very near to the market value. In such circumstances, we are of the view that if the learned Single Judge has held Sec.20 of the Act as unconstitutional, we cannot lightly interfere with the same.
17. Accordingly to the extent of holding Sec.20 of the Act, as unconstitutional, we have to affirm the decision of the learned Single Judge. So far as the direction issued by the learned Single Judge, in directing the State Government to pay compensation by following provisions of sections 23 and 24 of the Land Acquisition Act, we are of the view, it is beyond the purview of this court, the manner in which the compensation has to be paid to a person when his 18 land is acquired. In the circumstances, we are of the opinion, it is always open for the State to bring suitable amendment to section 20 of the Act.
18. With the above observations, these appeals are disposed of.
Sd/-
JUDGE Sd/-
JUDGE Ak