THE STATE OF KARNATAKA & ANR versus B. R. MURALIDHAR & ORS. on 28 July 2022

SUPREME COURT REPORTS

[2022] 10 S.C.R.

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THE STATE OF KARNATAKA & ANR.

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B. R. MURALIDHAR & ORS.

(Civil Appeal No. 1966 of 2013)

BJULY 28, 2022

[A. M. KHANWILKAR AND SANJIV KHANNA, JJ.]

Land Acquisition: Karnataka Slum Areas (Improvement andClearance) Act, 1973 – ss.17, 18, 20 – Constitutional validity ofs.20 of 1973 Act – Amount payable in respect of land acquired –CAcquisition notification u/s. 17 of 1973 Act issued by the HousingDepartment of State in 2005 – Writ petition filed before High Courtcontending that notification was issued without adequatelyconsidering the objections taken by the writ petitioners and in excessof the power vested in the authority and second plea was about theDlapsing of the acquisition which was in furtherance of the showcause notice issued under the 1973 Act – Single Judge did not setaside the impugned notification, however, held that s.20 of the 1973Act was ultra vires and opined that the method of determining theamount to be paid to the land losers pursuant to acquisition of landwas not just and reasonable – It ought to be as per the prevailingEmarket value of the land; and not on the basis of “three hundredtimes the property tax payable” in respect of such land, as per s.20of the 1973 Act – And, until a just method for determination ofamount was replaced by a law made by the State Legislature, theland losers ought to be paid amount in accordance with ss.23 andF24 of the 1894 Act – Division Bench upheld the declaration givenby the Single Judge about s.20 being unconstitutional, however,modified the operative direction given regarding method ofdetermining the amount payable to the land losers and observedthat such a direction would be beyond the purview of the Court’sjurisdiction and that it is always open to the State to bring suitableGamendment to s.20 – Division Bench noted that the 1973 Act cannotget any immunity under Art. 31C of Constitution since the presentAct has been enacted prior to the 44th Amendment – On appeal,held: High Court disposed of the assail to the validity of s.20 of the1973 Act in a cryptic manner and more so without analysing allH

relevant aspects needed to be considered by a Constitutional Courtto declare provisions enacted by the State Legislature as ultra vires– High Court ought to have examined the scheme of the 1973 Act,its objects and purposes and also whether the payment of amountspecified as three hundred times the property tax payable in respectof such land on the date of publication would be a permissiblemethod of determination of the amount or is per se unjust, unfair orunreasonable – Additionally, if the 1973 Act and the provisions areascribable to the objective predicated in Art. 39(b) of theConstitution, then it would get protection or immunity from challengein terms of Arts. 14, 19 or 31 of the Constitution – Also even if theHigh Court was right in observing that the 1973 Act came into forceprior to coming into force of 44th Amendment to the Constitutionon 20.06.1979, it would make no difference as Art. 31C was alreadyin force with effect from 20.04.1972 to the extent it has been validatedby this Court in Keshavananda Bharti – Matter remitted to High Courtfor reconsideration of writ petitions including question ofconstitutional validity of s.20 of the 1973 Act – Land AcquisitionAct, 1894 – ss. 23, 24 – Constitution of India – Art.19(1)(f), 31C,39(b).

Disposing of the appeals, the Court

Conclusion

Disposing of the appeals, the Court

HELD: 1. The High Court had held that in absence of anexpress provision regarding lapsing of acquisition in the 1973Act unlike the 1894 or 2013 Act, it is not open to grant relief ofsetting aside impugned notification dated 23.6.2005 on accountof efflux of time. In that, show cause notice (preliminarynotification) is ordinarily issued when the competent authority issatisfied that for the purpose of executing any work ofimprovement in relation to any “slum area” or any building insuch area or for the purpose of redeveloping any “slum clearancearea”, or for the purpose of rehabilitating slum dwellers, it isnecessary to acquire any land and it has been so decided inpursuance of the said provision. The need to develop the slumarea and to rehabilitate the slum dwellers is a continuing obligationof the State until it is fully discharged. The fact that there is sometime gap between the preliminary notice to show cause why theland in question should not be acquired and in issuance of thefinal notification under Section 17, by itself, cannot be a ground AB

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Ato declare the process initiated by valid show cause notice ashaving lapsed by efflux of time. It was, however, urged by thewrit petitioners that the stated power to effectuate a purpose hasto be exercised in a reasonable time frame. The exercise of powerin a reasonable manner inheres the concept of its exercise withina reasonable time. What would be the length of reasonable timeBmust be then determined by the facts of the case in the contextof scheme of the Act and the nature of the power which is to beexercised to prevent miscarriage of justice, misuse or abuse ofpower. Even this plea will have to be examined by the High Courtin the first place. [Paras 20, 20A][462-B-G]

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2. In the fact situation of the present case, it is appropriateto relegate the parties before the High Court for reconsiderationof the writ petitions afresh including in relation to the question ofconstitutional validity of Section 20 of the 1973 Act. In theremanded proceedings, it would then be open to the writDpetitioners to amend the writ petition to raise a new plea regardinginapplicability of Section 17 to the land in question — which hadnot been declared as slum area or slum clearance area. Thatquestion, if answered in favour of the writ petitioners, would goto the root of the matter and it may then not be necessary toeven examine the question regarding the constitutional validityEof Section 20 of the 1973 Act.[Para 21][462-G-H; 463-A-B]

3. It will be open to the Single Judge to await the decisionof the larger Bench of this Court in reference made in terms ofProperty Owners’ Association, in the event it becomes necessaryto deal with the argument of the expanse of expression “materialFresources of the community” in Article 39(b) of the Constitutionand its applicability to the impugned provision of the 1973 Act.As the High Court’s impugned decisions have been set aside, itmust follow that the declaration issued by the High Courtregarding Section 20 of the 1973 Act being ultra vires standsGeffaced and that provision be given full effect until further ordersof the High Court in the remanded petitions. [Paras 23, 24][463-D-E; 464-A-B]

The Deputy Commissioner and Collector, Kamrup & Ors.v. Durganath Sarma AIR 1968 SC 394 : [1968] 1 SCR

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THE STATE OF KARNATAKA & ANR. v. B. R. MURALIDHAR& ORS.

561; K.T. Plantation Private Limited & Anr. v. State ofKarnataka (2011) 9 SCC 1 : [2011] 13 SCR 636; HisHoliness Kesavananda Bharati Sripadagalvaru v Stateof Kerala & Anr. (1973) 4 SCC 225 : [1973] 2 SCR1089; The State of Karnataka & Anr., etc. v RanganathaReddy & Anr., etc., etc. AIR 1978 SC 215 : (1977) 4SCC 471 : [1978] 1 SCR 641; Maharao Sahib ShriBhim Singhji v Union of India & Ors. (1981) 1 SCC166; Rajiv Sarin & Anr. v State of Uttarakhand & Ors.(2011) 8 SCC 708 : [2011] 9 SCR 1012; State ofMaharashtra & Anr. v Basantibai Mohanlal Khetan &Ors. (1986) 2 SCC 516 : [ 1986] 1 SCR 707; PropertyOwners’ Association & Ors. v State of Maharashtra &Ors. (2013) 7 SCC 522 – referred to.

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Case Law Reference

CIVIL APPELLATE JURISDICTION : Civil Appeal No.1966of 2013.

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From the Judgment and Order dated 28.08.2012 of the High Courtof Karnataka at Bangalore in Writ Appeal No.918 of 2008.

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Civil Appeal No.4959 of 2022.

Nikhil Goel, AAG, Shyam Divan, Nikhil Nayyar, Sr. Advs., V. N.Raghupathy, S. Udaya Kumar Sagar, Ms. Bina Madhavan, L. M.Chidanandayya, P. Mohith Rao, Govind Manoharan for M/s Lawyer S

AKnit & Co., Ms. Pritha Srikumar Iyer, Abhinav Ramanand, DhananjayBaijal, Ms. Neha Mathen, Ms. Mansi Binjrajka, Shubhranshu Padhi,Ashish Yadav, Rakshit Jain, Vishal Banshal, Advs. for the appearingparties.

The Judgment of the Court was delivered byBA. M. KHANWILKAR, J.

1. In these appeals, the subject matter is the notification dated23.6.2005 bearing No. HD 34 KOMAME 2004, Bangalore issued underSection 17 of the Karnataka Slum Areas (Improvement and Clearance)Act, 1973[1] by the Housing Department of the State of Karnataka andCthe constitutional validity of Section 20 of the 1973 Act. The personsaggrieved by the issue of the impugned notification dated 23.6.2005 hadfiled Writ Petition No.22611 of 2005[2], Writ Petition No.20955 of 2005[3]and Writ Petition No.21192 of 2005 (GM-Slum)[4] before the High Courtof Karnataka at Bangalore[5].

D2. The challenge to the stated notification was twofold. The firstis that the impugned notification was issued without adequatelyconsidering the objections taken by the writ petitioners and in excess ofthe power vested in the authority. The second was about the lapsing ofthe acquisition which was in furtherance of the show cause notice issuedunder the 1973 Act on 14.10.1982. It was the case of the writ petitionersEthat by efflux of time, the stated show cause notice (preliminarynotification) had worked out and no acquisition in furtherance thereofafter 23 years could be permitted in law. As regards the validity of Section20 of the 1973 Act, the challenge was essentially about the method ofdetermining payment predicated therein to pay amount at the rate ofthree hundred times the property tax for acquiring the land under SectionF17 of the 1973 Act and not fair market value of the property. Whereas,the amount offered on the basis of property tax is inevitably an illusoryamount, including in the teeth of the legislation made by the Parliament,namely the Land Acquisition Act, 1894[6].

1 for short, “the 1973 Act”G2 filed by B.R. Muralidhar, respondent No.1 in Civil Appeal No.1966 of 20133 filed by V. Balasubramanya @ Balender Venkta, respondent No.3 in Civil AppealNo.1966 of 20134 filed by M/s. Chandra Spinning and Weaving Mills Private Limited, respondent No.4in Civil Appeal No.1966 of 2013 and also appellant in the companion appeal i.e., CivilAppeal No……..of 2022 @ S.L.P. (C) No.18942 of 2013

5 for short, “the High Court”H6 for short, “the 1894 Act”

3. Learned Single Judge of the High Court of Karnataka videcommon judgment and order dated 20.9.2007 declared Section 20 of the1973 Act as ultra vires. He, however, rejected the plea of the writpetitioners that the acquisition pursuant to preliminary notification dated14.10.1982 had lapsed on the finding that there was no such provision inthe 1973 Act analogous to the provisions of the 1894 Act. Learned SingleJudge also rejected the plea taken by the writ petitioners that theirobjections were not adequately considered. Having so held, the learnedSingle Judge did not set aside the impugned notification dated 23.6.2005.As learned Single Judge took a view that Section 20 of the 1973 Actwas ultra vires, ithad to then opine that vacuum regarding the methodof determination of amount to be paid to the land losers was created anduntil a just method for determination of amount was replaced by a lawmade by the State Legislature, the land losers ought to be paid amount inaccordance with Sections 23 and 24 of the 1894 Act.

4. Against the decision of the learned Single Judge, cross appealswere filed by the writ petitioners as well as by the State of Karnataka.Respondent No.3 herein (V. Balasubramanya @ Balender Venkta),however, later withdrew his appeal. The appeal filed by the State ofKarnataka for assailing the decision of the learned Single Judge declaringSection 20 of the 1973 Act ultra vires, came to be disposed of videimpugned judgment and order dated 28.8.2012 passed in Writ AppealNo. 918 of 2008 and Writ Appeal Nos. 1484-1485 of 2011 (GM-SLUM).In view of withdrawal of the cross appeal filed by the writ petitioner(respondent No.3 herein), the Division Bench was not required to examinethe correctness of the finding recorded by the learned Single Judge inrespect of plea of lapsing of acquisition and inadequate consideration ofthe objections pressed into service by the writ petitioners for challengingthe final notification dated 23.6.2005. As aforesaid, the Division Benchupheld the declaration given by the learned Single Judge that Section 20of the 1973 Act was unconstitutional. However, the Division Benchmodified the operative direction given by the learned Single Judgeregarding method of determining the amount payable to the land losersin accordance with Sections 23 and 24 of the 1894 Act; and instead, itobserved that such a direction would be beyond the purview of the Court’sjurisdiction and that it is always open to the State to bring suitableamendment to Section 20 of the 1973 Act. Against this decision of theDivision Bench rendered in Writ Appeal No.918 of 2008, the State of A

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AKarnataka has filed Civil Appeal No.1966 of 2013. While granting leave,vide order dated 25.2.2013, this Court has passed the following order:

“SLP (C) No. 39936/2012

Leave granted.

BOperation of the impugned order of the High Court in sofar as the same strikes down Section 20 of the Karnataka SlumAreas (Improvement and Clearance) Act, 1973 [for short ‘theAct’] shall remain stayed, until further orders from this Court.The petitioners shall be free to determine and pay compensationto the land owners in terms of Section 20 of the Act. Any suchCdetermination and payment shall remain subject to ultimate outcomeof this appeal.”

5. Respondent No.4 (M/s. Chandra Spinning and Weaving MillsPrivate Limited) in the leading appeal filed by the State of Karnataka, asaforesaid, filed an independent appeal before the Division Bench beingDWrit Appeal No.1492 of 2008 (GM-SLUM), which came to be rejectedon the ground of unexplained delay vide impugned judgment and orderdated 17.8.2012. Against the decision of the Division Bench, respondentNo.4 has filed cross appeal arising from S.L.P. (C) No.18942 of 2013,essentially questioning the decision of the Division Bench of the HighECourt rejecting the cross appeal filed by the Company on the ground oflaches and unexplained delay.

6. We have heard Mr. Nikhil Goel, learned Additional AdvocateGeneral for the State of Karnataka, Mr. Nikhil Nayyar, learned seniorcounsel appearing for respondent No.3 and Mr. Shyam Divan, learnedFsenior counsel appearing for respondent No.4.

7. Diverse grounds have been raised to question the correctnessof the view taken by the High Court. The moot question in these appealsis about the constitutional validity of Section 20 of the 1973 Act. Whiledealing with the relief claimed by the writ petitioners in that regard, thelearned Single Judge opined that the method of determining the amountGto be paid to the land losers pursuant to acquisition of land was not justand reasonable. According to the learned Single Judge, it ought to be asper the prevailing market value of the land; and not on the basis of threehundred times the property tax payable in respect of such land, aspredicated in Section 20 of the 1973 Act. This method of determiningHthe amount on the basis of property tax payable in respect of the acquired land, would result in offering illusory amount to the land loser. Besidesbeing illusory, it would be arbitrary and discriminatory as the land loserwould be denied of the market value of the land as is provided for inSections 23 and 24 of the 1894 Act. To buttress this opinion, the learnedSingle Judge took note of the decision of this Court in The DeputyCommissioner and Collector, Kamrup & Ors. vs. Durganath Sarma[7]and proceed to dispose of the challenge to Section 20 of the 1973 Act ina cryptic manner in the following words:

“18. Thus there has to be equal protection of law.

19. I am also not in a position to give acceptability to the submissionsadvanced by Sri Nagarajappa, the learned counsel for therespondent No.3. Just because the lands are acquired fordischarging the State’s social service obligations, propercompensation to the land losers cannot be denied. The landlosers cannot be fastened with the social service obligationsof the State.

20. In exercise of its eminent domain when the State acquired theproperty for public use, but without the owner’s consent, the samehas to be upon paying just compensation. The compensationpayable must be a just equivalent of what the owner is deprivedof. What principles will guide the determination of the amountpayable fall within the legislative province. But the same have tomeet the basic requirement of full indemnification of theexpropriated owner. The compensation scheme under the SlumAreas Act does not provide for the payment of compensationequivalent to the market value of the land. The true valuation ofthe land involves both computation and judgment.

21. For the aforesaid reasons, I strike down Section 20 of theSlum Areas Act as unconstitutional. But the question is, what shouldfollow it. If the lands are acquired under the Slum Areas Act, howthe compensation is to be determined. It is for the legislature todecide and prescribe the reasonable method of determining themarket value for the purpose of paying compensation to the landlosers. However until such time that some legislative provisionreplaces Section 20, no vacuum should be created. During thetransition between today, the date of striking down of Section 20

7 AIR 1968 SC 394 (5-Judge Bench)

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Aof the Slum Areas Act and the commencement of the necessarylegislative amendment, the determination of the market value hasto be in accordance with Section 23 and 24 of the Land AcquisitionAct, 1894, as the provisions of the said Act have withstood thetest of time.”

(emphasis supplied)

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8. When the matter travelled before the Division Bench of theHigh Court, the manner in which the appeals have been disposed of, inparticular the issue of constitutional validity of Section 20 of the 1973Act, is no different. The Division Bench noted the arguments of theCparties and of the State in particular that the provisions of the 1973 Actenjoyed immunity in terms of Article 31C of the Constitution of India.While dealing with the argument, the Division Bench noted that the 1973Act came into force on 29.10.1974[8] much before the 44[th] Amendmentto the Constitution concerning Article 31C — on which date the provisionsof Articles 19(1)(f) and 31 were in force. Having said that, the DivisionDBench then articulated the question to be answered in the appeals beforeit as follows:

“Whether the Judgment in K.T. PLANTATION PRIVATELIMITED[9] can be applied and based on the same, whether theorder of the learned Single Judge is required to the interfered withEor not.”

9. For answering this question, the Division Bench first reproducedthe paragraphs 189, 190 to 193, 198, 201 and 209 of the K.T. PlantationPrivate Limited[10]and disposed of the question under consideration inthe following words:F

“15. From the reading of the aforesaid paragraphs of the Judgment,we are of the opinion that it is for the State to demonstrate beforethe Court that amount fixed u/s 20 of the Act is not illusory and itis just and reasonable compensation.

16. The present Act cannot get any immunity under ArticleG31-C of the Constitution of India, since the present Act hasbeen enacted prior to the 44[th] Amendment. If the present 8 The 1973 Act received the assent of the President on 1.10.19749 K.T. Plantation Private Limited & Anr. vs. State of Karnataka, (2011) 9 SCC 1 (5-Judge Bench)H10 supra at Footnote No.9

Act had been enacted after the 44[th] Amendment to the Constitution,we are of the view that the Judgment in K.T. PLANTATIONPRIVATE LIMITED Vs. STATE OF KARNATAKA[11] wouldsquarely applicable. As stated supra, the present Act is enactedprior to the 44[th] amendment. In such circumstances, it is for theState that the amount fixed u/s 20 of the Act is the market valueand it is clear as no land looser can be deprived of his propertywithout paying the reasonable compensation. But unfortunately,in this case, State has not made any efforts before us to show thatthree hundred times of the assessment fixed by the Municipalitywould be the reasonable compensation or very near to the marketvalue. In such circumstances, we are of the view that if the learnedSingle Judge has held Sec.20 of the Act as unconstitutional, wecannot lightly interfere with the same.”

(emphasis supplied)

This is the entire discussion regarding the validity of Section 20 ofthe 1973 Act.

10. In the appeals before this Court, both sides have extensivelyargued all aspects regarding issue of constitutional validity of Section 20of the 1973 Act. For the nature of final order that we propose to pass, itis not necessary to dilate on the rival submissions in extenso.

11. According to the State, the 1973 Act and the provisions therein,in particular Section 20, it ought to enjoy the protection of Article 31C ofthe Constitution. The fact that the 44[th] Amendment to the Constitutioncame into force with effect from 20.6.1979 and the 1973 Act came intoforce much before that, would make no difference. For, even at thatrelevant time Article 31C was available as it had come into effect on20.4.1972 to the extent, it has been upheld by the Constitution Bench ofthis Court in His Holiness Kesavananda Bharati Sripadagalvaruvs. State of Kerala & Anr.[12]. In other words, the expanse of Article31C, as upheld by this Court, at the time the 1973 Act came into forcewas still available to give protection and immunity from challenge to thestated Act being referrable to the tenet enunciated in Article 39(b) of theConstitution. Hence, according to the appellant it was open to the StateLegislature to prescribe different method for determination of amount 11 supra at Footnote No.9

12 (1973) 4 SCC 225 (13-Judge Bench)

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Apayable to the land loser under the 1973 Act. To buttress this submission,reliance has been placed also on The State of Karnataka & Anr., etc.vs. Ranganatha Reddy & Anr., etc., etc.[13]; Maharao Sahib Shri BhimSinghji vs. Union of India & Ors.[14]; Rajiv Sarin & Anr. vs. State ofUttarakhand & Ors.[15]; and K.T. Plantation Private Limited[16]. Forthat, learned counsel for the State also invited our attention to theBStatement of Objects and Reasons, Preamble, and the scheme of thedifferent provisions of the 1973 Act, including Section 17 which is torehabilitate the slum dwellers from their existing squalid living conditionsin the slum area, so as to best subserve the common good by redevelopingthe slum area or slum clearance area, as the case may be. SuchCrehabilitation of slum dwellers tantamounts to distribution of the materialresources of the community after the vesting of the land in terms ofSection 18 of the 1973 Act, in the State free from all encumbrances. Inshort, the provisions of the 1973 Act are referrable to the expanse ofArticle 39(b) of the Constitution; and Section 20 is only a provision(means) to achieve that goal by following method to compensate theDland loser — by offering amount of three hundred times the property taxpayable in respect of such land. Reliance is also placed on the expositionin State of Maharashtra & Anr. vs. Basantibai Mohanlal Khetan &Ors.[17] which had dealt with the question of validity of the MaharashtraHousing and Area Development Act, 1976[18]. This Act was enacted byEthe Maharashtra State Legislature to consolidate the Bombay HousingBoard Act, 1948, in the Bombay and Hyderabad areas of the State, theMadhya Pradesh Housing Board Act, 1950, the Bombay Building Repairsand Reconstruction Board Act, 1969 and “the Maharashtra SlumImprovement Board Act, 1973”. This Court upheld the validity of the1976 Act also in reference to Article 31C of the Constitution as it existedFat the relevant time (validated by the decision in His HolinessKesavananda Bharati Sripadagalvaru[19]), as can be discerned fromthe discussion in paragraphs 13 to 15 of the reported decision. The Statewould also argue that while considering the validity of Section 20 of the1973 Act, it may be necessary to consider the question as to whether theG13 AIR 1978 SC 215 : (1977) 4 SCC 471 (7-Judge Bench)14 (1981) 1 SCC 166 (5-Judge Bench)15 (2011) 8 SCC 708 (5-Judge Bench)16 supra at Footnote No.917 (1986) 2 SCC 516 (2-Judge Bench)

18 for short, “the 1976 Act”H19 supra at Footnote No.12

18 for short, “the 1976 Act”H19 supra at Footnote No.12

expression “material resources of the community” would include privateproperty and this question has already been referred to a larger Bench(nine Judges) in Property Owners’ Association & Ors. vs. State ofMaharashtra & Ors.[20], which is pending consideration. Therefore, thesematters be tagged along with those cases.

12. Further, in response to the argument canvassed across theBar by the learned counsel for the writ petitioners for the first timebefore this Court in reference to the purport of Section 17 of the 1973Act, it is urged by the State that the same ought not to be countenancedwithout there being any pleading in that regard before the High Court.The writ petitioners, however, had submitted that the land acquired interms of impugned notification was neither declared as a slum area underSection 3 nor as a slum clearance area under Section 11 of the 1973 Actand as such, it could not be acquired in terms of Section 17.

13. The learned counsel appearing for the writ petitioners wouldfurther contend that the issue regarding expanse of expression “materialresources of the community”, will not arise in the present case. In that,the conclusion recorded by the High Court is that no protection of Article31C is available to the provisions of the 1973 Act, in particular Section20. That view taken by the High Court is unexceptionable. At the sametime, it has been fairly accepted by respondent No.3, including in thewritten submissions that the issue as to whether expression “materialresources of the community” would include private owned resources, ispending consideration before a nine-Judge Bench of this Court and ifthe Court so intends, it may take up the matter for hearing along withpending cases before the nine-Judge Bench. Learned counsel for thewrit petitioners have filed exhaustive written submissions in addition tooral argument canvassed before this Court.

14. We are of the considered opinion that the High Court hasdealt with the question of validity of Section 20 in a casual manner. Thatcannot be countenanced inasmuch as the Constitutional Court foranswering the assail on this count, in the first place, need to examine thescheme of the 1973 Act, its objects and purposes as also the question:whether the payment of amount specified as three hundred times theproperty tax payable in respect of such land on the date of publicationwould be a permissible method of determination of the amount or is per 20 (2013) 7 SCC 522 (7-Judge Bench)

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Ase unjust, unfair or unreasonable? Concededly, there can be differentmethods for valuation of property, including the method of capitalisationvalue. Further, it has to be considered as to whether it is an objectivemethod and not illusory (as it is the case of the State that the amountdetermined under Section 20 is quite substantial, i.e., Rs.3.52 crore), inthe present case. Additionally, if the 1973 Act and the provisions areBascribable to the objective predicated in Article 39(b) of the Constitution,then it would get protection or immunity from challenge in terms of Article14, 19 or 31 of the Constitution. Furthermore, even if the High Courtwas right in observing that the 1973 Act came into force prior to cominginto force of 44[th] Amendment to the Constitution on 20.6.1979, it wouldCmake no difference as Article 31C was already in force with effectfrom 20.4.1972 to the extent it has been validated by this Court in HisHoliness Kesavananda Bharati Sripadagalvaru[21].

15. It is indisputable that the State had defended Section 20 of the1973 Act on the principle expounded in Article 31C of the ConstitutionDas can be discerned from paragraph 19 of the judgment of the learnedSingle Judge and also of the Division Bench, in particular paragraph 16reproduced hitherto.

16. Suffice it to observe that the High Court disposed of the assailto the validity of Section 20 of the 1973 Act in a cryptic manner andEmore so without analysing all relevant aspects needed to be consideredby a Constitutional Court to declare provisions enacted by the StateLegislature as ultra vires. For, there is a presumption about theconstitutionality of the law made by the Parliament/State Legislature.

17. It was also urged by the learned counsel for the writ petitionersFthat the State had failed to explain and justify the method of determiningthe value of the land which ought to be equivalent to fair market valueand not illusory amount. As regards deficiency in the pleadings of theparties, the same argument can be used against both sides. We say sobecause constitutional validity has been raised obviously as an alternativeplea in the writ petition being the last ground of challenge in paragraphsG29 and 30 of the Writ Petition No.21192 of 2005 (GM-SLUM)[22] . Thesame reads thus:

“29. Section 20 of the Act provides for payment of amount at therate of 300 times the property tax payable in respect of the land 21 supra at Footnote No.12H22 See Footnote No.4

acquired. Entry 42 of List III, 7[th] Schedule to the Constitutionprovides for acquisition and requisition of property. By reason ofthe fact that the said subject is in the concurrent list, both Centreand the States can make laws. The Parliament having enactedthe Land Acquisition Act has evinced interest on occupy the entirefield relating to acquisition including payment of compensationand the field is therefore completely covered. The Land AcquisitionAct provides for payment of compensation at the market value ofthe property. The Act, which is later in point of time, though hasreceived the assent of the President, Section 20 in so far as itprovides for payment of amount 300 times the property tax payableon such land which methodology is different from the methodologyprovided for under the Land Acquisition Act is therefore beyondthe competence of the State Legislature and is therefore liable tobe declared as void as being in contravention of the LandAcquisition Act, 1894 read with Article 300A of the Constitutionof India.

30. Assuming, but not conceding that the impugned action of theGovernment in acquiring lands is vitiated, even so the Governmentis liable to pay compensation to the petitioner at the market valueof the property and in accordance with the principles laid downunder the Land Acquisition Act, 1894 and not at 300 times theproperty as provided under Section 20 of the Act.”

18. As the focus before the High Court was essentially on theplea that the acquisition proceedings had lapsed, even the State in itsresponse filed before the High Court merely stated thus:

“10.…The compensation payable as per Section 20 of theAct is 300 times of the assessment is correct. The Act and itsprovisions are for the betterment of the poor and downtroddenslum dwellers as a social obligation. The compensation payablefor such land acquired under Section 17 of the Act is only as perSection 20 of the Act. The respondents are having the obligationof providing shelter to several lakhs of slum dwellers and therespondents cannot acquire lands as per Land Acquisition Actand pay huge compensation as per the provisions of the said acti.e., as per the market value. Hence, the provisions of KSA (I &C) Act, 1973 are applied to acquire the lands as per Section 17and pay the compensation as per Section 20 of the Act. Hence,Article 300A of the Constitution of India is not violated.”

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A19. As aforesaid, in addition to the challenge to Section 20 of the1973 Act being unconstitutional, during the course of argument for thefirst time and then restated in the written submission, question regardingthe applicability of Section 17 of the 1973 Act to the fact situation of thepresent case has been raised. There is no pleading in the writ petitions inthat regard.B

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20. Be that as it may, the High Court had held that in absence ofan express provision regarding lapsing of acquisition in the 1973 Actunlike the 1894 or 2013 Act, it is not open to grant relief of setting asideimpugned notification dated 23.6.2005 on account of efflux of time. Inthat, show cause notice (preliminary notification) is ordinarily issued whenCthe competent authority is satisfied that for the purpose of executing anywork of improvement in relation to any “slum area” or any building insuch area or for the purpose of re-developing any “slum clearance area”,or for the purpose of rehabilitating slum dwellers, it is necessary to acquireany land and it has been so decided in pursuance of the said provision.

DThe need to develop the slum area and to rehabilitate the slum dwellersis a continuing obligation of the State until it is fully discharged. The factthat there is some time gap between the preliminary notice to showcause why the land in question should not be acquired and in issuance ofthe final notification under Section 17, by itself, cannot be a ground todeclare the process initiated vide valid show cause notice as havingElapsed by efflux of time.

20A. It is, however, urged by the writ petitioners that the statedpower to effectuate a purpose has to be exercised in a reasonable timeframe. The exercise of power in a reasonable manner inheres the conceptof its exercise within a reasonable time. What would be the length ofFreasonable time must be then determined by the facts of the case in thecontext of scheme of the Act and the nature of the power which is to beexercised to prevent miscarriage of justice, misuse or abuse of power.Even this plea will have to be examined by the High Court in the firstplace.

21. After cogitating over the matter and in the fact situation of theGpresent case, we are of the considered opinion that it would be appropriateto relegate the parties before the High Court for reconsideration of thewrit petitions afresh including in relation to the question of constitutionalvalidity of Section 20 of the 1973 Act. In the remanded proceedings, itwould then be open to the writ petitioners to amend the writ petition toH

raise a new plea regarding inapplicability of Section 17 to the land inquestion — which had not been declared as slum area or slum clearancearea. That question, if answered in favour of the writ petitioners, wouldgo to the root of the matter and it may then not be necessary to evenexamine the question regarding the constitutional validity of Section 20of the 1973 Act.

22. As a result, to do substantial justice to both the parties, wedeem it appropriate to relegate the parties before the learned SingleJudge of the High Court for reconsideration of the writ petitions afreshon its own merits and in accordance with law with liberty to both partiesto amend the writ petition or file further better affidavit to defend theprovisions in question and the action of acquisition, as the case may be.The parties may do so within six weeks from today. The matter afterremand to proceed before the learned Single Judge of the High Court inthe first week of September 2022 for hearing.

23. We need to clarify that it will be open to the learned SingleJudge to await the decision of the larger Bench of this Court in referencemade in terms of Property Owners’ Association[23], in the event itbecomes necessary to deal with the argument of the expanse ofexpression “material resources of the community” in Article 39(b) ofthe Constitution and its applicability to the impugned provision of the1973 Act. Ordinarily, to observe judicial propriety we would have optedto keep these appeals pending before this Court and to be heard alongwith the connected cases before the larger Bench of this Court. However,in that eventuality, the parties may have to amend their pleadings, if theyintend to urge further grounds of challenge or by way of defence, as thecase may be. That exercise, therefore, can be undertaken in the firstinstance before the High Court, where both sides will get full opportunityto plead and argue their case.

24. In view of the above, we set aside the impugned judgment(s)and order(s) dated 17.8.2012 and 28.8.2012 of the Division Bench ofthe High Court as well as the common judgment dated 20.9.2007 renderedby the learned Single Judge and restore the Writ Petition No.22611 of2005[24], Writ Petition No.20955 of 2005[25] and Writ Petition No.21192 of2005[26] to the file of the High Court for being proceeded afresh in 23 supra at Footnote No.20

24 See Footnote No.2

25 See Footnote No.3

26 See Footnote No.4

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Aaccordance with law after giving liberty to the parties to amend thepleadings or file better affidavit to defend the impugned provisions andthe action of the State, as the case may be. As the High Court’s impugneddecisions have been set aside, it must follow that the declaration issuedby the High Court regarding Section 20 of the 1973 Act being ultravires stands effaced and that provision be given full effect until furtherBorders of the High Court in the remanded petitions.

25. All contentions available to both sides are left open. The mattermay appear before the learned Single Judge of the High Court ofKarnataka in the first week of September 2022. The High Court mayendeavour to dispose of the petitions expeditiously, in accordance withClaw.

The appeals are disposed of accordingly. No order as to costs.Pending application(s), if any, are also disposed of.

DDevika Gujral

(Assisted by : Roopanshi Virang, LCRA)

Appeals disposed of.

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