Town planning law may use a special vesting and compensation scheme without mirroring land acquisition safeguards, if not arbitrary.

A comprehensive town planning statute may create its own scheme for vesting, compensation, reservation and financial adjustment as part of planned urban development, and it is not unconstitutional merely because it differs from the Land Acquisition Act, 1894. The absence of a universal appeal, solatium, or the full land acquisition machinery does not by itself amount to discrimination or arbitrariness, provided the statutory scheme is coherent and not illusory. The earlier Constitution Bench view sustaining the Act was reaffirmed and later decisions were read as explaining, not overruling, that position.

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Issues: (i) whether the Bombay Town Planning Act, 1954 was unconstitutional on the ground that land needed for a town planning scheme could be acquired under that Act on terms less favourable than those under the Land Acquisition Act, 1894, thereby offending Articles 14 and 31(2) of the Constitution of India; (ii) whether the Act was discriminatory and arbitrary because it denied an appeal from every decision of the Town Planning Officer and did not apply the full machinery of the Land Acquisition Act, 1894, including solatium and appellate safeguards; and (iii) whether the earlier Constitution Bench decision upholding the Act had been overruled by later decisions.

Issue (i): whether the Bombay Town Planning Act, 1954 was unconstitutional on the ground that land needed for a town planning scheme could be acquired under that Act on terms less favourable than those under the Land Acquisition Act, 1894, thereby offending Articles 14 and 31(2) of the Constitution of India.

Analysis: The Act was held to be a comprehensive town planning code aimed at orderly urban development, with acquisition, reconstitution, reservation, compensation and contribution forming parts of a single statutory scheme. The Court treated vesting under the final scheme as statutory acquisition within a special planning framework, not as an optional acquisition regime comparable to the Land Acquisition Act, 1894. Compensation under the Act was linked to market value on the relevant statutory date and adjusted through the scheme's financial provisions. The earlier Constitution Bench ruling upholding the Act was followed and reaffirmed.

Conclusion: The challenge under Articles 14 and 31(2) failed; the Act was not unconstitutional on this ground.

Issue (ii): whether the Act was discriminatory and arbitrary because it denied an appeal from every decision of the Town Planning Officer and did not apply the full machinery of the Land Acquisition Act, 1894, including solatium and appellate safeguards.

Analysis: The Court held that the Legislature is not bound to provide an appeal against every administrative or quasi-judicial determination under a statute. The selective provision of appeals under the Act was not shown to be oppressive or arbitrary, and judicial review under Article 226 remained available. The Court also held that the absence of solatium or of the full Land Acquisition Act procedure did not by itself create unconstitutional discrimination, because the town planning scheme operated under a distinct statutory method of adjustment and compensation.

Conclusion: The challenge based on denial of appeal, exclusion of the Land Acquisition Act procedure, and non-payment of solatium failed.

Issue (iii): whether the earlier Constitution Bench decision upholding the Act had been overruled by later decisions.

Analysis: The Court read the later decisions as explaining or applying the earlier ruling rather than expressly overruling it. It emphasised that inferential overruling should not be assumed, especially when the later cases did not strike down the Act and the earlier decision had remained in force and been acted upon for many years.

Conclusion: The earlier decision remained binding and was not overruled.

Final Conclusion: The statutory town planning scheme was upheld as constitutionally valid, the special compensation and vesting mechanism was sustained, and the appeal was rejected.

Ratio Decidendi: A town planning law that forms part of a comprehensive scheme for planned urban development may prescribe its own method of statutory vesting, compensation and financial adjustment, and such a scheme is not unconstitutional merely because it differs from the Land Acquisition Act, 1894 or does not provide the same appellate or solatium benefits, so long as the scheme is not arbitrary or illusory.

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