Compulsory acquisition and compensation principles under town planning law upheld; adequacy of compensation not open to challenge.

The article explains that the Bombay Town Planning Act, 1955 was treated as a law of compulsory acquisition because it transferred ownership to the local authority, so it did not fall within the Article 31(5)(b)(ii) public health exception. It also states that Sections 53, 67 and 71 supplied valid compensation principles under amended Article 31(2) by using market value on the date of declaration, with adjustment for contributions, and that the adequacy of compensation was not open to challenge. The Act's vesting and compensation scheme was likewise held not to offend Article 14. The declaration of invalidity was therefore unsustainable, and the remaining grounds were remitted.

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Issues: (i) Whether the Town Planning Act, in so far as it provides for vesting of land in the local authority and associated acquisition for a town planning scheme, is saved by the public health exception in Article 31(5)(b)(ii) of the Constitution of India; (ii) whether Sections 53, 67 and 71 of the Bombay Town Planning Act, 1955 specify valid principles for compensation within Article 31(2) of the Constitution of India; (iii) whether the scheme of statutory vesting and compensation under the Act is violative of Article 14 of the Constitution of India.

Issue (i): Whether the Town Planning Act, in so far as it provides for vesting of land in the local authority and associated acquisition for a town planning scheme, is saved by the public health exception in Article 31(5)(b)(ii) of the Constitution of India.

Analysis: The Act was held to be a law for compulsory acquisition because it provided for transfer of ownership in land to the local authority. A law of permanent acquisition does not fall within the narrow exception for measures promoting public health or preventing danger to life or property. The public health object of the statute did not alter its character as an acquisition law for constitutional purposes.

Conclusion: The Act was not protected by Article 31(5)(b)(ii); it was a law for compulsory acquisition.

Issue (ii): Whether Sections 53, 67 and 71 of the Bombay Town Planning Act, 1955 specify valid principles for compensation within Article 31(2) of the Constitution of India.

Analysis: The amended Article 31(2) requires a law to provide for compensation and either fix the amount or specify the principles on which, and the manner in which, compensation is to be determined and given. The Court held that compensation need not necessarily be money and that the Act validly adopted a uniform principle based on market value as on the date of the declaration of intention to make the scheme, with adjustment against contributions. The principles were not irrelevant and the adequacy of the resulting compensation was not open to challenge. The earlier view that compensation must amount to a just equivalent was treated as no longer governing post-amendment acquisition laws, and the contrary precedent was overruled.

Conclusion: Sections 53, 67 and 71 specified valid principles of compensation and did not infringe Article 31(2).

Issue (iii): Whether the scheme of statutory vesting and compensation under the Act is violative of Article 14 of the Constitution of India.

Analysis: There was no arbitrary choice between competing acquisition statutes in the town planning setting. Once the scheme operated, the mode of acquisition and compensation was fixed by the Act itself. The distinction drawn by the Act was based on the statutory scheme and not on an irrational classification.

Conclusion: The challenge under Article 14 failed.

Final Conclusion: The High Court's declaration of invalidity could not be sustained, and the matter was sent back for consideration of the remaining grounds not examined earlier.

Ratio Decidendi: Under the amended Article 31(2), a statute authorising compulsory acquisition is valid if it provides a real compensation principle relevant to acquisition, and the adequacy of the compensation resulting from that principle is not justiciable.

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