Town-planning acquisition and compensation scheme upheld where statutory vesting, reconstituted plots, and uniform treatment met constitutional requirements.

Sections 53 and 67 of the Bombay Town Planning Act, 1955 were treated as provisions for compulsory acquisition through statutory vesting of land in the local authority, and were not saved by Article 31(5)(b)(ii) merely because the scheme served sanitation, health, or improvement objectives; that exception was confined to measures abating a public menace. The Act was nevertheless held to satisfy Article 31(2) because it laid down a compensatory scheme based on reconstituted plots, monetary adjustment, and market value at the relevant statutory date, and post-Fourth Amendment the adequacy of that principle was not justiciable. The Article 14 challenge also failed because the scheme applied uniformly to all lands covered by the town-planning scheme and had a rational relation to planned development.

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Issues: (i) whether sections 53 and 67 of the Bombay Town Planning Act, 1955 were protected by Article 31(5)(b)(ii) as a law for promotion of public health or prevention of danger to life or property; (ii) whether the Act specified principles for compensation so as to satisfy Article 31(2); and (iii) whether sections 53 and 67 offended Article 14.

Issue (i): whether sections 53 and 67 of the Bombay Town Planning Act, 1955 were protected by Article 31(5)(b)(ii) as a law for promotion of public health or prevention of danger to life or property.

Analysis: The Act provided for statutory vesting of lands required for the town-planning scheme in the local authority and therefore operated as a law for compulsory acquisition of property. A law of permanent acquisition is not saved by Article 31(5)(b)(ii) merely because its object is sanitation, health, or improvement of living conditions. That exception is confined to measures abating a public menace and not to permanent acquisition of property.

Conclusion: The challenge was rejected on the ground that the Act was saved by Article 31(5)(b)(ii); the Act was held not to fall within that exception.

Issue (ii): whether the Act specified principles for compensation so as to satisfy Article 31(2).

Analysis: Sections 53, 67 and 71 formed one integrated scheme. On the final scheme coming into force, original rights stood extinguished, reconstituted plots came into existence, and the difference between the value of the original plot and the reconstituted plot, assessed with reference to the date of declaration of intention to make the scheme, was adjusted towards compensation and contribution. The Court held that compensation under Article 31(2) need not be confined to cash payment and that a statute may validly provide a method of recompense by allotment of reconstituted land and monetary adjustment. The specification of market value at the relevant statutory date was a principle of compensation, and after the Fourth Amendment the adequacy of that principle was not open to challenge on the ground that it failed to yield a just equivalent.

Conclusion: The Act was held to specify valid principles of compensation and did not violate Article 31(2).

Issue (iii): whether sections 53 and 67 offended Article 14.

Analysis: The Act did not confer an option between two different acquisition regimes. Lands covered by a town-planning scheme could be dealt with only under the Act, and the statutory vesting and compensation mechanism applied uniformly to all lands within the scheme. The classification was therefore not discriminatory and had a rational relation to the object of planned development.

Conclusion: The Article 14 challenge failed.

Final Conclusion: The impugned provisions were upheld as constitutionally valid, the High Court's view striking them down was set aside, and the matter was sent back for consideration of the remaining grounds not examined by the High Court.

Ratio Decidendi: After the Constitution (Fourth Amendment) Act, a law of compulsory acquisition satisfies Article 31(2) if it provides a non-illusory compensatory scheme founded on specified principles, and the adequacy of that compensation or of the resulting equivalent is not justiciable.

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