The Court held that the modifications made to Section 23 of the Land Acquisition Act by Section 59 of the Improvement Act were ultra vires Article 14 of the Constitution as they resulted in discrimination in the determination of compensation for land acquired for town improvement purposes.

BAL RAJ TULI, J.

1. This Bench has been constituted to decide whether the mode of determining compensation prescribed by the amendment in the provisions of Section 23 of the Land Acquisition Act, 1894 (hereinafter referred to as the Acquisition Act), by Section 59 of the Punjab Town Improvement Act (hereinafter referred to as the Improvement Act), results in discrimination where the land of a citizen is acquired for the purposes of the Improvement Act. Another point for consideration is whether the non-provision of a right of appeal against the award of the Tribunal under the Improvement Act amounts to discrimination because under the Acquisition Act right of appeal has been provided against the award of the District Judge to the High Court. Reference to the Full Bench has been made by order dated January 7, 1971, passed by a Division Bench consisting of D. K. Mahajan and Gopal Singh, JJ. Previously, eight of these writ petitions came up for hearing before Suri, J., and he was informed that C. W. No. 2391 of 1970, in which the questions involved were the same as in the writ petitions before him, had been admitted direct to a Division Bench and was on the daily list of the III Division Bench. The learned Judge directed that the eight writ petitions before him should also be placed before that Bench. Thus nine writ petitions (Nos. 3276 of 1969, 2319, 2474, 2523, 2609, 2611, 2612, 2629 and 3013 of 1970) came up for hearing before the Bench consisting of D. K. Mahajan and Gopal Singh, JJ. L. P. A. Nos. 771 of 1970 and 30 and 33 of 1971 were also directed to be heard with this reference by the Division Bench hearing those appeals.

2. The land for a Town Improvement Trust is acquired under the Acquisition Act and Section 59 of the Improvement Act has made certain modifications in the provisions of the Acquisition Act. These modifications are contained in the Schedule to the Improvement Act, para 10 of which mentions the amendments made to Section 23 of the Acquisition Act and reads as under :-

"10. (1) In clause first and clause sixthly of sub-section (1) of S. 23 of the said Act, for the words publication of the declaration relating thereto under Section 6 and the words publication of the declaration under Section 6 shall be deemed to be substituted - (a) if the land is being acquired under subsection (3) of S. 32 of this Act the words issue of the notice under subsection (3) of S. 32 of the Punjab Town Improvement Act, 1922 ; and

(b) in any other case, the words first publication of the notification under S. 36 of the Punjab Town Improvement Act, 1922 .

(2) The fullstop at the end of sub-section (2) of S. 23 of the said Act shall be deemed to be changed to a colon and the following proviso shall be deemed to be added : Provided that this sub-section shall not apply to any land acquired under the Punjab Town Improvement Act, 1922 .

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

(3) For the purposes of clause first of sub-section (1) of this section, 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 ; (a) if it be shown that before such date, the owner of the land had in good faith taken active steps and incurred expenditure to secure a more profitable use of the same, further compensation based on his actual loss may be paid to him ;

(b) if any person without the permission of the trust required by sub-section (1) of Sec.31 of the Punjab Town Improvement Act, 1922 , has elected, re-erected, added to or altered any building or wall go as to make the same project beyond a street alignment or building line duly prescribed by the trust, then any increase in the market-value resulting from such erection, re-erection, addition or alteration shall be disregarded ;

(c) if the market-value has been increased by means of any improvement made