1953 Supreme(SC) 120

SUPREME COURT OF INDIA
11th December, 1953
M. PATANJALI SASTRI, CJI., MAHAJAN, S.R. DAS, GHULAM HASAN AND JAGANNADHA DAS, JJ.
State of W.B.
Versus
Mrs. Bella Banerjee and others, Respondents.
Civil Appeal No. 123 of 1952.
Advocates appeared
Shri M. C. Setalvad, Attorney-General for India and Shri N. C. Chaterjee, Senior Advocate (Shri B. Sen, Advocate, with them), instructed by Shri P. K. Bose, Agent, for the State; Shri Atul Chandra, Senior Advocate (Shri S. P. Ghosh, Advocate, with them), instructed by Shri S. C. Banerjee, Agent, for Respondents (Nos. 1, 2 and 3); Shri M. C. Setalvad, Attorney-General for India (Shri G. N. Joshi, Advocate, with him), instructed by Shri G. H. Rajadhyaksha, Agent, for Intervener (The Union of India).

Headnote:Articles 31 (2), (5) and (6)-West Bengal Land Development and Planning Act (XXI of 1948), S. 8 and proviso (b) to S. 8- Validity.

       The West Bengal Land Development and Planning Act (XXI of 1948) was passed on October 1, 1948. primarily for the settlement of immigrants who had migrated into the Province of West Bengal due to communal disturbances in East Bengal, and it provided for the acquisition and development of land for public purposes including the purpose aforesaid. The validity of this Act was challenged in a suit and the Calcutta High Court held that the impugned Act as a whole was not unconstitutional or void save as regards two of the provisions contained in S. 8 which, so far as it is material ran as follows:

       "A declaration under S. 6 shall be conclusive evidence that the land in respect of which the declaration is made is needed for a public purpose and, after making such declaration, the Provincial Government may acquire the land and thereupon the provisions of the Land Acquisition Act. 1894 (hereinafter in this section referred to as the said Act), so far as may be, apply:

       1. K.C.G. Narayan Deo v. State of Orissa. A.I.R. 1953 S.C. 375 followed.

       2. See State of Bihar v. Maharajadhiraj Sir Kameshwar Singh of Darbhanga and Other (1952) S.C.R. 889 Cited at p. 491 ante.

       Provided that. * * * *

       (b) in determining the amount of compensation to be awarded for land acquired in pursuance of this Act the market value referred to in clause first of sub-section (I) of S. 23 of the said Act shall be deemed to be the market value of the land on the date of publication of the notification under sub-section (1) of S. 4 for the notified area in which the land is included subject to the following condition, that is to say-

       if such market value exceeds by any amount the market value of the land on the 31st day of December 1946, on the assumption that the land had been at that date in the state in which it in fact was on the date of publication of the said notification, the amount of such excess shall not be taken into consideration. "

       The provision making the declaration of the Government conclusive as to the public nature of the purpose of the acquisition and the limitation of the amount of compensation so as not to exceed the market value of the land on, December 31, 1946, was declared ultra vires the Constitution and void.1

       Held (dismissing the appeal) : (1) Article 31 (6) is intended to save a State law enacted within 18 months before the commencement of the Constitution provided the same was certified by the President, while Art. 31 (5) saves all existing laws passed more than 18 months before the commencement of the Constitution. Reading the two clauses together, the intention is clear that an existing law passed within 18 months before January 26, 1950 is not to be saved unless it was submitted to the President within three months from such date for his certification and was certified by him. The argument that the impugned Act having been passed within 18 months before the commencement of the Constitution and not having been submitted to the President for his certification, it was a law to which the provisionl1 of clause (6) did not apply and, therefore, as an existing law the impugned Act was not affected by clause (2) of that article, could not therefore be accepted.

       Accordingly, inasmuch as Art. 31 (2) made the existence of a public purpose a necessary condition of acquisition, the existence of such a purpose as a fact must be established objectively, and the provision in S. 8 relating to the conclusiveness• of the declaration of Government as to the nature of the purpose of the acquisition must be held unconstitutional.

       (2) While it is true that the legislature is given the discretionary power of laying down the principles which should govern the determination of the amount to be given to the owner for the property appropriated, such principles must ensure that what is determined as payable must be compensation that is, a just equivalent of what the owner has been deprived of. Within the limit of this basic requirement of full indemnification of the expropriated owner, the Constitution allows free play to the legislative judgment as to what principles should guide the determination of the amount payable. Whether such principles take into account all the elements which make up the true value of the property appropriated and exclude matters which are to be neglected, is a justiciable issue to be adjudicated by the Court.

       1. W.B.S.K. Co-op. Society v. Bella, A.I.R. 1951 Cal. 111.

       W.B S.K. Co-lip; Credit Society v. Mrs. Banerjee A.I.R. 1952 Cal. 554.

       (3) Considering that the impugned Act is a permanent enactment and lands may be acquired under it many years after it came into force, the fixing of the market value on December 31, 1946 as the ceiling on compensation, without reference to the value of the land at the time of the acquisition is arbitrary and cannot be regarded as due compliance in letter and spirit with the requirement of Art. 31(2). The fixing of an anterior date for the ascertainment of value may not, in certain circumstances, be a violation of the constitutional requirement as, for instance, when the proposed scheme of acquisition becomes known before it is launched and prices rise sharply in anticipation of the benefits to be derived under it, but the fixing of an anterior date, which might have no relation to the value of the land when it is acquired, may be, many years later, cannot but be regarded as arbitrary. Any principle for determining compensation which denies to the owner increment in value cannot result in the ascertainment of the true equivalent of the land appropriated. The latter part of proviso (b) to S. 8 of the impugned Act which fixes the market value on December 31,1946 as the maximum compensation for land acquired under it offends against the provisions of Art. 31 (2) and is unconstitutional and void. - West Bengal Land Development and Planning Act (XXI of 1948)-Validity.