Case Note & Summary
These civil appeals by certificate arose from 23 writ petitions filed by owners of lands and buildings within the municipal limits of Ahmedabad challenging the constitutionality of Section 212 and allied sections of the Bombay Provincial Municipal Corporation Act, 1949. The petitioners sought a writ of mandamus to treat notices issued under Section 212 as null and void. The Municipal Corporation of the City of Ahmedabad and its Commissioners were appellants, while the State of Gujarat and the owners were respondents. The High Court of Gujarat had disposed of all petitions by a common judgment dated 5 December 1966. Under Section 210 of the Act, the Commissioner prescribed the regular line of a public street. Parts of the building of petitioner Girdharlal Ganpatram fell within this line, and on 3 April 1962 a show cause notice was issued under Section 212(1)(b), followed by final notices after objections were overruled. The owners challenged the provisions on grounds that they violated Section 299 of the Government of India Act, 1935 and Article 31 of the Constitution, as well as Articles 14 and 19. The core questions were whether the Act provided for payment of compensation for property acquired under Section 212, and whether it specified the principles on which and the manner in which compensation was to be determined. The appellants contended that Section 216(1) read with Section 389 ensured full indemnification and that the provisos did not nullify compensation. The respondents argued that the provisos rendered compensation illusory and that no principles or manner were specified. The Court observed that Section 216(1) and Section 389 together required full indemnification in terms of money for loss caused by exercise of power under Section 212. The provisos came into play only after compensation for loss was determined and allowed for increase or decrease in value of the remainder property; any excess betterment could be recovered by the Commissioner, but this did not mean compensation was not payable. The Court further held that because of the irregular and small pieces of land involved in street widening, a host of principles might be needed; the Act got over this difficulty by providing full indemnification. The involvement of civil courts in determining compensation imported judicial norms, and the goal of full indemnity implied appropriate rules for determination. Section 390 required the Commissioner to hold an inquiry and determine compensation, with appeals to the Small Causes Court and District Court, ensuring judicial oversight. The Court referred to State of Gujarat v. Shri Shantilal Mangaldas & Ors., [1969] 3 S.C.R. 341. The Supreme Court allowed the appeals, set aside the High Court order, and transmitted the proceedings to the High Court for disposal in accordance with law. It held that the Act provided for compensation and specified principles and manner of determination, thus not violating Section 299 of the Government of India Act, 1935 or Article 31.
Headnote
A) Constitutional Law - Compulsory Acquisition - Requirement of Compensation - Bombay Provincial Municipal Corporation Act, 1949, Sections 212, 216, 389 - The High Court held that the Act provided for payment of compensation but did not specify principles and manner; the Supreme Court found that Section 216(1) read with Section 389 required full indemnification in money for loss caused by acquisition under Section 212. The provisos to Section 216(1) could reduce compensation in rare contingencies by accounting for betterment but did not nullify the statutory duty to pay compensation. Held that the Act provided for payment of compensation as required by Section 299 of the Government of India Act, 1935 (Paras 9-11). B) Constitutional Law - Principles and Manner of Compensation - Specification through Judicial Norms - Bombay Provincial Municipal Corporation Act, 1949, Sections 216, 389, 390 - The Act prescribed full indemnification for loss and involved civil courts in final determination through appeals to the Small Causes Court and District Court; this importation of judicial norms constituted a specification of principles and manner of determining compensation. Held that the Act satisfied the constitutional requirement of specifying principles and manner of compensation, and the High Court's contrary finding was set aside (Para 13).
Issue of Consideration
Whether Bombay Provincial Municipal Corporation Act, 1949 provided for payment of compensation for property acquired under Section 212 and specified the principles and manner of determination as required by Section 299 of Government of India Act, 1935 and Article 31 of Constitution of India
Final Decision
Appeals allowed; High Court order set aside; proceedings transmitted to High Court for disposal in accordance with law; Sections 212 and allied provisions held not unconstitutional on grounds of compensation
Law Points
- Section 216(1) read with Section 389 provides full indemnification for loss caused by acquisition under Section 212
- Provisos to Section 216(1) do not nullify compensation and operate only after determination of loss
- Involvement of civil courts imports judicial norms and constitutes specification of principles for compensation
- Full indemnification is implicit specification of appropriate rules for determination of compensation
- Compensation may be reduced by betterment but not rendered illusory
