Published On: Sat, Aug 3rd, 2013

Acquisition of land for Re-development and Rehabilitation is prerogative of State govt: HC

By Accommodation Times News Service

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION NO. 2582 OF 2003

WITH

CHAMBER SUMMONS NO. 267 OF 2008

Sara Harry D’Mello .. Petitioner.

Vs.

State of Maharashtra & Ors. And Palatial Constructions .. Respondents.

WITH

WRIT PETITION NO. 91 OF 2002

WITH

CHAMBER SUMMONS NO. 129 OF 2002

The Reserve Bank Employees’ Snehadhara Co-op. Hsg. Soc. Ltd. .. Petitioner.

Vs.

State of Maharashtra & Ors. .. Respondents

WITH

CHAMBER SUMMONS NO. 54 OF 2002

The Reserve Bank Employees’ Snehadhara Co-op. Hsg. Soc. Ltd. .. Applicant.

Vs.

Dharam Bhakti S.R.A. Co-operative Housing Society Ltd. .. Respondents

WITH

WRIT PETITION NO. 608 OF 2009

Cyril Domnic Machado & Ors. .. Petitioners.

Vs.

State of Maharashtra & Ors. .. Respondents

WITH

WRIT PETITION NO. 1489 OF 2008

WITH

NOTICE OF MOTION NO. 377 OF 2012

WITH

CONTEMPT PETITION NO. 14 OF 2012

Nenshi Monji & Ors. .. Petitioners.

Vs.

State of Maharashtra & Ors. .. Respondents

WITH

WRIT PETITION NO. 2905 OF 2008

Smt. Mariyambai Nurmohamad & Anr. .. Petitioner.

Vs.

State of Maharashtra & Ors. .. Respondents

WITH

WRIT PETITION NO. 2906 OF 2008

Prakash Anant Rajput & Ors. .. Petitioner. Vs. State of Maharashtra & Ors. .. Respondents

WITH

WRIT PETITION NO. 2786 OF 2008

WITH

CHAMBER SUMMONS NO. 51 OF 2009

Sameer H. Kapadia .. Petitioner Vs. The Additional Collector, (Ench. And Removal) and Jawahar Tricumdas Kapadia & Ors. .. Respondents

WITH

CHAMBER SUMMONS NO. 53 OF 2009

Sameer H. Kapadia .. Applicant Vs. The Additional Collector, Mumbai Central Suburban District and Lamibaug Co-operative Housing Society .. Respondents

Dr. Virendra Tulzapurkar, Senior Advocate with Mr. Nikhil Sakhardande

and Ms. Kirtida Chandarana i/by Humranwala & Co. for the Petitioner in

Writ Petition No. 2582 of 2003.

Dr. Virendra Tulzapurkar, Senior Advocate with Mr. Sachin Kudalkar i/by

Madekar & Co. for the Petitioner in Writ Petition No. 1489 of 2008.

Mr. P.K. Dhakephalkar, Senior Advocate and Mr. J.G. Reddy for SRA in

Writ Petition Nos. 2905 and 2906 of 2008.

Mr. Zubin Beheramkamdin with Mr. Som Sinha i/by Vimla & Co. for the

Petitioners in Writ Petition Nos. 2905 and 2906 of 2008 and Writ Petition

No. 608 of 2009.

Mr. Ravi Kadam, Senior Advocate with Mr. Chirag Balsara with Mr. Akshay Pradeep Jadhav, Ms. Ritu Kothare, Ms. Sejal Solanki for Respondent No.7 in Writ Petition No. 1489 of 2008.

Mr. E.P. Bharucha, Senior Advocate with Mr. D.A. Nalawade, GP with Mr.

G.W. Mattos, AGP and Ms. Geeta Shastri, AGP and Mr. M.P. Jadhav, AGP

for the State IN Writ Petition No. 2582 of 2003.

Mr. Venkatesh Dhond, Senior Advocate with Mr. Beny Chaterjee and Mr.

Gunjan Shah i/by Mr. S.K. Srivastav for the applicants in Chamber

Summons No. 267 of 2008.

Mr. V.D. Patil for SRA in Writ Petition No. 1489 of 2008.

Mr. K.J. Presswalla, with Ms. K. Davierwala i/by Mulla and Mulla for the

Petitioners in Writ Petition No. 91 of 2002.

Mr. A.V. Anturkar a/w Mr. Ashwin Mishra, Mr. Dilip Mishra, Ms. Kalyani i/by Mr. Sameer Singh for Respondent No.5 in Writ Petition No. 1489 of 2008.

CORAM : MOHIT S. SHAH, C.J. AND ANOOP V. MOHTA, J.

DATE OF JUDGMENT: 10 MAY 2013

CAV JUDGMENT: (PER CHIEF JUSTICE)

This group of writ petitions challenges the constitutional validity of sections 14 and 17 of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 (“Slum Act”, for brevity).

2. In Mumbai city, otherwise known as the commercial capital of India, more than half the population resides in slums. While ordinarily we look at proliferation of slums as merely in terms of encroachments and unauthorised constructions, the draft National Slum Policy formulated by the Government of India in the Department of Urban Development and Poverty Alleviation recognises that slums are an integral part of urban areas and contribute significantly to their economy both through their labour market contributions and informal production activities. The draft policy, therefore, endorses an upgrading and improvement approach in all slums. The policy further acknowledges that cities without slums should be the goal and objective of all urban planning for social and economic development.

3. Long before formulation of the draft National Slum Policy, the Legislature in the State of Maharashtra enacted the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 to make better provision for the improvement and clearance of slum areas in the State and their redevelopment and for the protection of occupiers from eviction and distress warrants and for matters connected with the said purposes. Originally, the perspective was that a slum area is or may be source of danger to the health, safety or convenience of the public of that area or of its neighbourhood, the reason of the area having inadequate or basic amenities or being in insanitary, squalid and over-crowded and, therefore, unfit for human inhabitation. The Act, therefore, empowers the Competent Authority to declare such area to be a slum area. A person aggrieved by such declaration may file an appeal to the Slum Tribunal within 30 days after the date of such declaration in the official gazette.

4. After such declaration of an area as “slum area”, where the Competent Authority is satisfied that a slum area is capable of being improved at a reasonable expense so as not to be source of danger to the health, safety or convenience of the public of that area, it could call upon the owner/s and every mortgagee of the properties in that area or any part thereof, to submit their objections or suggestions, if any, to the Competent Authority to carry out necessary improvement works in the slum area and thereafter the Competent Authority may proceed to carry out the improvement work such as laying of water mains, sewers, storm water drains, provision of urinals, latrines, community bath and water taps, widening of existing roads, lanes, etc. and constructing new roads/lanes, etc. providing parks, playgrounds, welfare and community centres,

schools, dispensaries, etc. and demolition of obstructive or dilapidated buildings for the purpose of such improvement, the Competent Authority could call upon the occupiers in any area to vacate their premises, if possible, after offering alternative sites. Under section 5C, the Competent Authority could even call upon the owners of the buildings/lands in the area to execute works of improvement either within or outside the buildings or the area so as to make the buildings or the area fit for human habitation or free from such danger. If the owners of the buildings or the lands fail to execute the works of improvement as required by the Competent Authority within the time limits specified in the notice, the Competent Authority may do the improvement work with the costs to be paid by the owners of the buildings or the lands.

5. While the above scheme of slum improvement is contained in

Chapter III of the Slum Act, Chapter IV contains provisions for slum

clearance and redevelopment. Where upon a report from any of its officers

or other information in its possession, the Competent Authority is satisfied

in respect of any slum area that the most satisfactory method of dealing

with the conditions in the area is the demolition of all the buildings in the

area , it may declare such area as the clearance area after making an

attempt to provide alternative accommodation as enacted in section 11 of

the Slum Act. After such clearance order becomes operative, the owner of

the land is at liberty to redevelop the land in accordance with the plans

approved by the Competent Authority subject to such restrictions and

conditions as may be imposed by the Competent Authority including the

condition regarding time limit for completion of the redevelopment

project. This is the provision contained in section 12(10) of the Slum Act.

If the owner of the land does not redevelop the land or makes

redevelopment in contravention of the approved plans or commits breach

of the terms and conditions of redevelopment including the time limit for

completion, the Competent Authority may itself determine to redevelop

the land at its own costs. However, such determination can be made only

after giving a reasonable opportunity of hearing to the owner.

6. While the Slum Act, as originally enacted, only contained the

aforesaid provisions for improvement, clearance and redevelopment of an

individual slum area, the Legislature introduced the concept of slum

rehabilitation scheme by adding Chapter IA in the year 1996. An authority

called “Slum Rehabilitation Authority” has been constituted under the

Slum Act for preparing the General Slum Rehabilitation Scheme for such

area/s as may be specified in the government notification constituting the

Slum Rehabilitation Authority (hereinafter referred to as “SRA”). The

State Government or SRA with previous sanction of the State Government

shall prepare a General Rehabilitation Scheme for rehabilitation of slums

and hutment colonies in that area after inviting objections and suggestions,

laying down the parameters for declaration of any area as slum

rehabilitation area and the manner in which rehabilitation of such area shall

be carried out including provision for obligatory participation of the

landholders and occupants of the area declared as slum rehabilitation area

in the implementation of the slum rehabilitation scheme and also provision

for transit accommodation pending development of the slum rehabilitation

area and allotment of rehabilitation tenements to the occupants of such area

free of cost. While the scheme would give an option to the landholders

and occupants to undertake development of slum rehabilitation areas by

themselves or through a developer on the terms and conditions of such

development, the option is also given to SRA for taking up such

development in the event of non-participation of the landholders or

occupants. Such scheme could also provide for incentives to be made

available to the developer for development of the slum rehabilitation area

under such scheme.

7. In short, while Chapter II empowers the Competent Authority

to declare an area as a slum area, Chapter III empowers the Competent

Authority to undertake the improvement works, Chapter IV empowers the

Competent Authority to declare any slum clearance area from which all the

buildings unfit for human habitation or dangerous or injurious to health

would be demolished, and while permitting the owner of the land to

redevelop the area, in the event of failure of the owner to undertake such

redevelopment or failure to comply with the terms and conditions of the

scheme, the Competent Authority is given powers to undertake the

redevelopment of the area on its own.

So also the newly inserted Chapter IA while allowing the

owners and occupants of the slum areas to undertake the slum

rehabilitation scheme, also authorizes SRA to undertake and implement the

rehabilitation scheme by itself. The Competent Authority or SRA would

not be in a position to exercise the above powers of carrying out

improvement works or redevelopment of slum area or undertake and

implement the slum rehabilitation scheme, if the land in the slum area or

adjoining land or land surrounded by slum area continues to belong to and

remain with the owner/mortgagee of the land. Chapter V of the Slum Act,

therefore, makes provision for compulsory acquisition of such lands.

Section 14 confers powers upon the State Government to acquire the land

after following the procedure laid down therein. Section 14 confers

powers on the Collector to take over possession of such land. Sections 16

to 21 provide for payment of compensation for compulsory acquisition of

the land under the Slum Act. The amount of compensation may be

determined by the agreement between the State Government/Collector and

the person having any interest in the land. Where no such agreement can

be reached, the amount payable as compensation shall be “an amount equal

to sixty times the net average monthly income actually derived from such

land during the period of five consecutive years immediately preceding the

date of publication of the notice for acquisition of the land under section

14”. The principles for calculation of the net average monthly income are

set out in the First Schedule to the Slum Act. The determination of

compensation has to be made after giving an opportunity of hearing to the

owner of the land. Right of appeal has also been conferred upon the

owner/person interested in the land to prefer an appeal to the Tribunal

against the order of determination of compensation.

8. The petitioners in this group of petitions, who are owners of

lands which came to be declared as slum areas under section 4 of the Slum

Act between the years 1977 and 1998, have challenged the notices for

acquisition of the lands issued under section 14 of the Slum Act between

the years 1997 and 2007 and the final notifications issued between the

years 2000 and 2007. The petitioners have also challenged constitutional

validity of the provisions of section 14 under which the notices and

notifications for acquisition of their lands were issued. The petitioners have

further challenged the constitutional validity of the provisions of section 17

of the Slum Act providing for determination of compensation.

9. The challenges raised by Dr. Virendra Tulzapurkar, learned counsel for the petitioners, may first be broadly set out to indicate the canvas for the debate.

I. The acquisition of slum lands i.e. land which are notified as slums cannot be made under the provisions of Sections 14 and 17 of the Slum Act, because these provisions are only applicable to the lands adjoining or surrounding the slums and not the lands covered by slums themselves.

II. In the alternative, it is submitted that Section 14 of the Slum Act confers unfettered powers on the executive to take action. The provisions are therefore arbitrary in the absence of the following safeguards:-

(A) there is no provision for hearing;

(B) there is no requirement for the authority to pass a reasoned order, and

(C) no appeal is provided to any judicial or quasi judicial authority.

III. Over and above the contentions based on the facts of specified

cases, Dr.Tulzapurkar has also submitted that the principles for

compensation provided in section 17 read with the Schedule to the Act

are completely arbitrary as compared to the principles for compensation

contained in the provisions of the Land Acquisition Act, 1894. It is

submitted that compensation for slum lands also must be computed on the

basis of the principles contained in Sections 23 and 24 of the Land

Acquisition Act, 1894.

IV. Dr.Tulzapurkar for the petitioners has also referred to the

following figures of compensation to buttress his challenge to

constitutional validity of Section 17 of the Slum Act on the ground that the

compensation being offered to the owners of the lands under the siad

provision is illusory :

Sr.

No   WP Petition No. and

Name of Parties Total area of property and village Declaration of

Slum under  Sec.4 Notice under

Sec.14

Amount

Awarded

1 WP No.2582/03

Sara Harry D’Mello

1575 sq.mtrs.

Village Bandra Tal. Andheri.

a) 30.05.1986

b) 30.05.1986

c) 27.10.1995

21.9.1998 Rs.2,16,000/-

2 WP No.1489/08

Nensi Monji

(a) 3741 sq.mtrs., Parel

(b) 2691 sq.mtrs., Parel

Total-6438 sq.mtrs.

(a) 31.8.77

(b) 22.6.94

21.12.04 Rs. 34,992/-

3 WP No.2906/08

Prakash Anant

Rajput

103. sq.mtrs., Banpnala,

Andheri,

27.10.1977 16.6.2006 Rs. 21,600/-

4 WP No.2905/08

Mariambai Noor

Mohd.

487 sq.mtrs., Banpnala,

Andheri

27.10.1977 16.6.06 Rs. 97,200/-

5 WP No.2786/08

Samir Kapadia

10917 sq.mtrs., Ghatkopar a) 30.10.78

b) 30.09.94

9.9.08 NA

6 WP No.91/02 RBI Snehdara CHS Ltd. 4074 sq. mtrs., Village Vile Parle, Tal. Andheri, Dist. MSD

07/09/93 28.7.1997

26.8.1997

Rs. 30,960/-

7 WP No. 1338/12 J.S.Housing Corpn.

5094 sq.mtrs., Village

Bapnala, Tal. Andheri

1977 16.6.06 NA

8 WP No.608/09 390 sq.mtrs., Village

Bapnala, Taluka Andheri,

1977 16.6.06 NA

10. Now we will take up each of these challenges and consider the

elaborate submissions made by learned counsel for the parties.

Contention – I : Are sections 14 and 17 applicable to slum lands?

11. Section 14 before amendment read as under :-

“14. Power of State Government to acquire land. (1) Where on

any representation from the Competent Authority it appears to the

State Government that, in order to enable the Authority to execute

any work of improvement in relation to any slum area or any

building in such area or to redevelop any clearance area, it is

necessary that any land within adjoining or surrounded by any

such area should be acquired, the State Government may acquire

the land by publishing in the Official Gazette, a notice to the effect

that the State Government has decided to acquire the land in

pursuance of this section:

…. …. …..”

(emphasis supplied)

Section 14 after amendment reads as under :-

“14. Power of State Government to acquire land. (1) Where on

any representation from the Competent Authority it appears to the

State Government that, in order to enable the Authority to execute

any work of improvement or to redevelop any slum area or any

structure in such area, it is necessary that such area, or any land

within adjoining or surrounded by any such area should be

acquired, the State Government may acquire the land by

publishing in the Official Gazette, a notice to the effect that the

State Government has decided to acquire the land in pursuance of

this section :

….. ….. …..”

(emphasis supplied)

12. It is submitted that on a plain reading of Section 14 of the Act,

it is clear that the power of acquisition can be exercised only in regard to

lands which are within the adjoining area and surrounding lands, but the

power of acquisition is not available in regard to lands which are declared

as slum areas and such lands which are declared as slum areas under the

Act have to be acquired under the provisions of the Land Acquisition Act,

1894 under which the compensation is to be paid on the basis of the market

value and in addition thereto solatium and interest is also to be paid.

It is submitted by Counsel for the petitioner that before

amendment in 2011 the section used the words “ any land within adjoining

or surrounded by any such area should be acquired”. Counsel has

submitted that this would mean that the land “within adjoining area” could

only be acquired, and not the slum area itself.

13. Learned Counsel for petitioners submit that this interpretation

of Section 14 has been accepted by this Court in Anil Gulabdas Shah Vs.

State of Maharashtra & Ors., 2010 (112) Bom.LR. 4864. Further Section

14 has now been amended in 2011 and the amended section now expressly

empowers acquisition of even slum areas under the provisions of Section

14 of the Slum Act- which establishes beyond doubt that prior to such

amendment, there was no power to acquire slum areas under Section 14 of

the Slum Act and the same was unavailable. Hence all the matters and

notifications under Section 14 of the Slum Act prior to amendment may be

struck down as without any authority of law.

14. Learned counsel for the respondents submit that the

amendment to section 14 made in 2011 is merely clarificatory in nature

and was possibly necessitated by the discordant note in Anil Shah’s case

not following the Akhtar Rizvi’s case. The amendment was thus not

prospective. The Respondents rely on Zile Singh v Haryana (2004) 8 SCC

1 paragraph 13 and 14 page 8. Reliance is also placed on the Central Act -

“The Slum Areas (Improvement & Clearance) Act, 1956 on which the

Maharashtra Act is based.

15. Having heard the learned counsel for the parties, we find that

the Maharashtra Slum Act is based on a Central Act, the Slum Areas

(Improvement and Clearance) Act, 1956, (the Central Act) Clause 3 of the

Statement of Objects & Reasons of the Maharashtra Act reads as under:-

(3) Slum dwellers are also harassed by eviction by

landlords. Provision is necessary to prevent such eviction.

Section 12 of the Central Act reads as under :-

“12. Power of Central Government to acquire

land. (1) Where on any representation from the competent

authority it appears to the Central Government that in

order to enable the authority to execute any work of

improvement in relation to any building in a slum area or

to re-develop any clearance area it is necessary that land

within, adjoining or surrounded by any such area should

be acquired, the Central Government may acquire the land

by publishing in the Official Gazette a notice to the effect

that the Central Government has decided to acquire the

land in pursuance of this section:

Provided that ……….”

(emphasis supplied)

16. Section 12 of the Central Act which is virtually in pari materia

with the impugned Section 14 of the Maharashtra Act contains a comma

between the words “within” and “adjoining” which clearly shows that the

intention of the legislature could never have been to restrict the

Government’s power to acquire only land adjoining a slum. It is also

necessary to note that the constitutional validity of the Central Act has

been upheld by the Supreme Court in Jyoti Pershad v/s Union Territory

of Delhi, AIR 1961 SC 1602.

17. In Akhtar Hasan Rizvi v/s. The Additional Collector (enc.) and

Controller of slums & ors., decided on 3 October 2000, a Division Bench

of this Court, speaking through Chief Justice B.P.Singh (as His Lordship

then was) dealt with the identical contention that under Section 14(1) of

the Slum Act, only that land can be acquired which is adjoining or

surrounded by the slum area but not the slum area itself (or, in other words,

the land over which the slum exists). This Court observed:-

“The words “within adjoining” do not convey any sense,

unless a comma (,) is inserted between the words `within’

and `adjoining’. Apparently, there may be a printing error,

and that is the reason why the comma is not found in the

text of the Slum Act. So read, it would mean that any land

which is within, adjoining or surrounded by any such area

may be acquired under Section 14(1) of the Slum Act. If

the section is read to mean what Counsel for the petitioner

says it means, then the entire Act would become

unworkable.

“A plain reading of Section 11 would show that the area

over which the slum is situate really comes within the

scope of Section 11(1), and consequently under Section

14(1). Section 12 provides for the clearance order in

relation to the slum area by ordering the demolition of

each of the buildings specified therein, and requiring each

such building to be vacated within such time as may be

specified in the clearance order.

“A conjoint reading of Sections 4, 11, 12 and 14, therefore,

leaves no room for doubt that the land over which the slum is situate may

be acquired under the provisions of the Slum Act. In fact, without

acquiring the slum area properly, in accordance with law, it would be

impossible to give effect to any scheme under the Slum Act. We are,

therefore, of the considered view that under Section 14(1), the State

Government may acquire the land on which the slum exists, and the

section must be so read to include any land within, adjoining or surrounded

by slum area.”

18. In Anil Gulabdas Shah vs. State of Maharashtra, 2011 (2)

Bom. C.R. 93, another Division Bench of this Court held in para 10 that

under section 14(1) of the Slum Act, the acquisition of land contemplated

is not from the slum rehabilitation area, but any land within the adjoining

or surrounded by any such area. Thus, the Act does not contemplate

acquisition of land under section 14(1) from the slum rehabilitation area

and it contemplates such acquisition only in respect of such land within

the adjoining land or surrounded by any such area. It appears that the

binding decision of this Court in Akhtar Hassan Rizvi’s case was not

brought to the notice of the Division Bench in Anil Gulabdas Shah’s case.

19. We find considerable substance in the submission made by

learned counsel for the respondent that it was in order to take care of

discordant note in Anil Gulabdas Shah v/s. State of Maharashtra that the

State Legislature introduced the amendment to section 14 of the Slum Act

in the year 2011 by adding words “such area or” before words “ any land

within adjoining or surrounded by any such area should be acquired”. The

Legislature could, of course, have rested content with adding a comma

after words “any land within” and before words “adjoining or surrounded

by such any area”. However, out of abundant caution the Legislature has

added words “such area” i.e. slum area.

20. Reliance placed by the learned counsel for the petitioners

upon Learned counsel for petitioners, however, relied upon the decision of

the Supreme Court in Mohd. Shabir vs. State of Maharashtra, (1979) 1

SCC 569, in support of the contention that absence of any comma would

indicate legislative intent as attributed by him is of no avail, as the Court

relied more on the objection of the concerned Act.

21. In view of the objects of the Slum Act and in view of the

decision of this Court in Akhtar Hasan Rizvi’s case (supra) even prior to

amendment, Section 14 of the Act has to be read as empowering the State

Government to acquire land within, adjoining or surrounded by a slum area.

Contention II – Is Section 14 violative of Articles 14 and

300A?

22. Learned counsel for the petitioners submitted that Section 14

of the Slum Act is violative of Article 14 and 300-A of the Constitution,

because it confers arbitrary and unfettered powers on the Executive to

make acquisition of the land.

Contention I I(a) – No proper opportunity of hearin g .

23. The first plank of the attack is that there is no proper

opportunity given to the owner of the land before the Government acquires

the land. It is submitted that the steps contemplated by Section 14 are as

follows:

(i) a representation is made by the Competent Authority to the State.

(ii) show cause notice is issued to the owner.

(iii) objections of the owners are sent to the Government along with a report of the Collector.

(iv) order is passed by the Government acquiring the property.

It is submitted that in the aforesaid steps, no opportunity of hearing is provided -

(i) before the Competent Authority makes representation to the State Government;

(ii) by the Collector before making a report; and

(iii) by the Government before acting on the basis of the report and passing the order of acquisition.

It is also submitted that there is no provision for giving a copy of the

representation made by the Competent Authority to the Government and

the Collector’s report which is submitted to the Government. It is also

submitted that at no stage opportunity of personal hearing is provided to

the owner of mortgagee of the land.

24. In Balraj Tulsidas Pillai vs. State of Maharashtra, 2004 (3)

Bom. C.R. 466, a learned Single Judge of this Court (Khandeparkar

R.M.S., J.) read the principles of natural justice into section 14(1) of the

Slum Act in the following manner:

“6. Plain reading of the above referred provisions of law

from the said Act would disclose that, the powers under

Section 14(1) of the said Act can be exercised by the State

Government pursuant to the receipt of the representation by

the competent authority expressing the need of such land so

as to enable the authority to execute any work of

improvement in relation to any slum area or any building in

such area or to redevelop any clearance area. Needless to

say that the competent authority would not be able to arrive

at any such decision unless the persons who are going to be

affected by the decision to acquire the land are heard in the

matter. It is well settled that nobody can be deprived of his

immovable property without following procedure of law an

without complying with the basic principles of natural

justice. Being so, even though the provisions of law

contained in Section 14(1) do not provide for any prior

notice to the interested parties, such a provision will have

to be read in Section 14(1). That being also the requirement

for compliance of basic principles of natural justice, even

though there is no specific provision contained in Section

14(1) for issuance of such notice, it will be necessary either

for the competent authority or the State Government to hear

the interested parties before taking final decision regarding

the acquisition of the land.

(emphasis supplied)

Again in Ramkali Sitaram Kushawaha vs. Deputy Collector

(Encroachment) & Competent Authority, 2004 (3) Bom. C.R. 14, the same

learned Single Judge held as under:

“9. Section 14 of the said Act deals with the powers of

the State Government to acquire the land. However, it

empowers the Government to acquire the land only when it

is found necessary to do so for the purpose specified in the

said provision of law. The purpose specified in the said

provision of law is either to execute any work of

improvement in the slum area or any building in such area

or to redevelop any clearance area. In other words, it is

only when the land would be required for one of the

purposes specified in section 14(1) that the acquisition of

land could be justified under the said provision of law.

10. …… The requirement of representation is not an

empty formality but it is necessary to invoke powers of

acquisition of land. It is pertinent to note that the

acquisition under section 14(1) cannot be done without

proper show cause notice in that regard to the persons

concerned. Obviously, the notice should disclose the

representation by the competent authority having

represented about the need of the land for improvement or

redevelopment, so that the addressee of the notice can

effectively putforth his say in the matter. It is the

constitutional requirement that nobody can be deprived of

his immoveable property without following the procedure

prescribed by law. The procedure to be followed for

acquisition of land under section 14(1) having been

incorporated in the said provision itself and it apparently

discloses certain pre-requisites for exercise of such power

by the State Government, it is needless to say that the

acquisition of land under section 14(1) has to be in due

compliance of such procedure, otherwise, the decision and

consequently the acquisition would stand vitiated.”

(emphasis supplied)

25. In Om Sai Darshan Co-operative Housing Society v/s State of

Maharashtra [2007 (1) BCR 476 (at para 9), it was held by this Court that

“…on publication of slum rehabilitation scheme under sub-Section (1) of

Section 3B certain provisions of the Slum Act which are incorporated in

the said Section will apply to any area declared as a slum rehabilitation

area. The Section provides that Chapters II and III of the slum Act will not

apply to such area”.

26. The substantive part of sub-section (1) of Section 14 before

and after amendment is already quoted in paragraph 11 hereinabove.

Section 14 in entirety as it stood prior to amendment of 2012 (vide

Maharashtra Act No.11 of 2012 in force from 19 June 2012) including the

proviso laying down the procedure for acquisition reads as under :

“14. Power of State Government to acquire land. (1) Where on

any representation from the Competent Authority it appears to the

State Government that, in order to enable the Authority to execute

any work of improvement in relation to any slum area or any

building in such area or to redevelop any clearance area, it is

necessary that any land within adjoining or surrounded by any

such area should be acquired, the State Government may acquire

the land by publishing in the Official Gazette, a notice to the effect

that the State Government has decided to acquire the land in

pursuance of this section:

Provided that, before publishing such notice, the State

Government, or as the case may be, the Collector [Competent

Authority] may call upon by notice the owner of, or any other

person who, in its or his opinion may be interested in, such land to

show cause in writing why the land should not be acquired with

reasons therefore, to the Collector [Competent Authority] within

the period specified in the notice; and the Collector [Competent

Authority] shall, with all reasonable dispatch, forward any

objections so submitted together with his report in respect thereof

to the State Government and on considering the report and the

objections, if any, the State Government may pass such order as it

deems fit.

(1A) The acquisition of land for any purpose mentioned in

sub-section (1) shall be deemed to be a public purpose.

(2) When a notice as aforesaid is published in the

Official Gazette, the land shall on and from the date on which the

notice is so published vest absolutely in the State Government free

from all encumbrances.”

(emphasis supplied)

27. It is clear that acquisition of land under Section 14(1) of the

Act is to be preceded by a show cause notice to the owner/mortgagee of

the land with an opportunity to respond to such show cause notice. The

section itself, thus, provides for an opportunity of hearing to the owner/

mortgagee of the land. We are not impressed by the contention of the

learned counsel for the petitioners that such opportunity of hearing must

include supplying the owner/mortgagee of the land with a copy of the

representation made by the Competent Authority to the Government or

copy of the Collector’s report to the Government. As per the settled legal

position, principles of natural justice are not to be put in a straight jacket

formula. The scope of hearing to satisfy the principles of natural justice

would vary depending on the legislative provisions and object of the

inquiry. As rightly submitted by learned counsel for respondents, persons

to be affected by acquisition and redevelopment of the land are not merely

land owners, but also numerous persons residing in sub-human conditions

in a slum area. The Legislature, in its wisdom, has therefore not provided

for the kind of inquiry which may be provided in a disciplinary

proceeding. The object of acquisition of land is not to punish the land

lower but to enable large masses residing in sub-human conditions in a

slum area to come out from such conditions and to be provided with

decent housing.

28. It is true that , as observed in the judgment of the learned

Single Judge of this Court in Ramkali Sitaram Kushawaha vs. Deputy

Collector (Encroachment) & Competent Authority (supra), a show cause

notice under Section 14(1) should disclose the representation made by the

competent authority about need of the land for improvement or

redevelopment. But this would not mean that the representation made by

the competent authority to the Government must be supplied to the

owner/mortgagee of the land alongwith the show cause notice. If show

cause notice indicates the representation made by the competent authority

about the need of the land for improvement or redevelopment and the

owner/mortgagee of the land is given an opportunity to show cause why

the land should not be acquired for the aforesaid purpose, that would be

sufficient compliance with principles of natural justice. For the same

reasons, hearing before the Collector or supplying land owner with a copy

of the Collector’s report to the Government cannot be considered as prerequisites to the exercise of the power by the Government under section 14(1) of the Act.

29. Mr. E.P. Bharucha, learned Senior counsel appearing for the

State Government and Additional Collector (Encroachment) and Controller

of Slums, Mumbai Suburban Districts, Deputy Collector (Encroachment &

Removal) as well as competent authorities under the Slum Act has

submitted that the acquisition of a slum area to carry out works of

improvement or redevelopment partakes of legislative character which

necessarily excludes a personal hearing as such acquisition affects a large

number of persons. In Laxmi Khandsari v/s State of U.P. [(1981) 2 SCC

600 at paragraph 79] the Supreme Court while dealing with a notification

restricting the use of power crushers for sugar cane prior to a notified date

held that since “the notification is impressed with a legislative character,

the question of hearing does not arise. It may be true that despite the fact

that there is no necessity of hearing, the Government could have evolved

some method of giving a very short notice to the Association and taking its

views. But the omission to do so would not vitiate the notification

impugned. It is well settled that possibility of an alternative scheme which

might have been but has not been designed, would not be sufficient to

make a restriction unreasonable”.

30. Numerous persons residing in sub-human conditions in a slum

area are going to benefit by the acquisition and redevelopment of the land.

After issuance of notice to land owner and after filing his reply, if the land

owner were held to be entitled to personal hearing before the Collector or

the Government, the slum dwellers would also claim personal hearing in

support of the notice for acquisition of the land for redevelopment and

rehabilitation of the slum dwellers. Giving a personal hearing to each of

such a large number of concerned persons would in fact delay and,

therefore, frustrates the object of the Act viz. to improve, clear and redevelop

slum areas. Keeping in mind the intended goal of the Act, the

Legislature in its wisdom has, therefore, not provided and could not have

provided for personal hearing when it comes to acquisition of slum land. A

personal hearing is not a necessary requirement of the principles of natural

justice in every case. In Section 14 the express provisions of giving of

notice, inviting objections and consideration of those objections by the

Government by necessary intendment indicates that the Legislature did not

intend to provide for personal hearing.

31. In Carborandum Universal Ltd. v/s Central Board of Direct

Taxes 1989 Supp (2) SCC 462 (para 6), the Supreme Court held that a

“Personal hearing in every situation is not necessary and there can be

compliance of the requirements of natural justice of hearing when a right

to represent is given and the decision is made on a consideration thereof.”

32. We may now briefly refer to decisions relied upon by

Dr.Tulzapurkar for the petitioners.

Dr. Tulzapurkar relied upon the decision of the Supreme Court

in Biecco Lawrie Ltd. vs. State of West Bengal, (2009) 10 SCC 32. In para

24 of the said decision, the Supreme Court observed as under:-

“24. …. One of the essential ingredients of fair hearing is

that a person should be served with a proper notice, i.e., a

person has a right to notice. Notice should be clear and

precise so as to give the other party adequate information of

the case he has to meet and make an effective defence.

Denial of notice and opportunity to respond result in

making the administrative decision as vitiated.

25. The adequacy of notice is a relative term and must be

decided with reference to each case. But generally a notice

to be adequate must contain the following:

(a) time, place and nature of hearing;

(b) legal authority under which hearing is to be held;

(c) statement of specific charges which a person has to meet.

26. However in State of Karnataka v. Mangalore

University Non-Teaching Employee’s Association [(2002) 3

SCC 302] the requirement of notice will not be insisted

upon as a mere technical formality when the party

concerned clearly knows the case against him and is not

thereby prejudiced in any manner in putting up an effective

defence, then violation of the principle of natural justice

cannot be insisted upon.”

31. A proper hearing must always take in its ambit a fair

opportunity to those who are parties in the controversy for

correcting or contradicting anything that is prejudicial to

their view. Lord Denning has observed the following in

Kanda v. Government of Malaya, 1962 AC 322 (p. 337):

“If the right to be heard is to be a real right

which is worth anything, it must carry with it a

right in the accused man to know the case which

is made against him. He must know what

evidence has been given and what statements

have been made affecting him and then he must

be given a fair opportunity to correct or

contradict him.”

32. Thus every person before the administrative

authority exercising adjudicatory powers has the right to

know the evidence to be used and this was firmly

established in the case of Dhakeshwari Cotton Mills Ltd. v .

Commissioner of Income Tax [AIR 1955 SC 65].

33. It is, however, very well accepted principle that

supply of the adverse material need not be, unless the law

otherwise provides, in its original form and it is sufficient if

the summary of the contents of the material is supplied

provided it is not misleading. Thus, what is essential is

substantial fairness and this may be in many situations be

adequately addressed and achieved by telling the affected

party the substance of the case that he has to meet, without

precisely discussing the precise evidence or the sources of information.”

33. The above observations were made in a case where the

respondent was charge-sheeted for major misconduct, namely, instigation,

insubordination and using of abusive and filthy languages against his

superiors and dilatory tactics. The Court held that the the Enquiry Officer

had sent due notice and postponed the date of hearing various times with

an intention to permit the respondent to present his case, but the

respondent did not present himself except on three days and ultimately the

Enquiry Officer conducted the inquiry exparte. The Court, however, made

the following observations:

“41. Assuming but not admitting that there has been a

denial of the principles of natural justice to the respondent

to the extent that he did not know the specifications of the

charges leveled, was denied a right to engage a lawyer and

not furnished with the copies of the documents and list of

witnesses to be relied upon by the management, even then,

we are of the firm opinion that observance of the principles

of natural justice to the respondent would be a useless

formality which is an exception to the rationale underlying

the principles of natural justice.

42. In S.L. Kapoor v. Jagmohan, [(1980) 4 SCC 379],

this Court under similar circumstances dealing with the

denial of the principles of natural justice held that:

‘It is yet another exception to the application of

the principles of natural justice. Where on the

admitted or undisputed facts only one

conclusion is possible and under the law only

one penalty is permissible, the court may not

insist on the observance of the principles of

natural justice because it would be futile to

order its observance’.”

(emphasis supplied)

34. In Natwar Singh vs. Director of Enforcement, (2010) 3 SCC,

255, the Supreme Court observed as under:

“26. Even in the application of the doctrine of fair play

there must be real flexibility. There must also have been

caused some real prejudice to the complainant; there

is no such thing as a merely technical infringement

of natural justice. The requirements of natural justice

must depend on the circumstances of the case, the

nature of the inquiry, the rules under which the

tribunal is acting, the subject matter to be dealt with and

so forth. Can the Courts supplement the statutory

procedures with requirements over and above those

specified? In order to ensure a fair hearing, Courts

can insist and require additional steps as long a such

steps would not frustrate the apparent purpose of the

legislation.

27. In Lloyd vs. McMahon, 1987 AC 625, Lord Bridge observed:

“”My Lords, the so-called rules of

natural justice are not engraved on tablets of

stone. To use the phrase which better

expresses the underlying concept, what the

requirements of fairness demand when any

body, domestic, administrative or judicial, has

to make a decision which will affect the

rights of individuals depends on the character

of the decision-making body, the kind of

decision it has to make and the statutory

or other framework in which it operates. In

particular, it is well-established that when a

statute has conferred on any body the power to

make decisions affecting individuals, the

courts will not only require the procedure

prescribed by the statute to be followed,

but will readily imply so much and no

more to be introduced by way of

additional procedural safeguards as will

ensure the attainment of fairness”.

28. As Lord Reid said in Wiseman Vs. Boardman, 1971 AC 297:

“”For a long time the courts have,

without objection from Parliament,

supplemented Procedure laid down in

legislation where they have found that to be

necessary for this purpose.”

29. It is thus clear that the extent of

applicability of principles of natural justice depends

upon the nature of inquiry, the consequences that

may visit a person after such inquiry from out of

the decision pursuant to such inquiry.”

35. Learned counsel for the petitioners also relied upon the

observations made by the Supreme Court in paragraphs 30 to 35 of the above

decision in support of the contention that all material relied upon by the

decision making authority must be brought to the notice of the petitioners.

The noticee is always entitled to satisfy an authority that those very

documents upon which reliance has been placed do not make out even a

prima facie case.

However, the observations in the said decision regarding duty

of adequate disclosure were made in the context of the complaint made

against the appellants for violation of the Foreign Exchange Management

Act, 1999. The proceedings under the Act exposed the appellants not only

to civil consequences but also to penal consequences and the proceedings

required the adjudicating authority to form the opinion whether an inquiry

shall be held into the allegations made in the complaint.

36. Dr. Tulzapurkar also relied upon the decision of the Supreme

Court in Nagarjuna Construction Company Ltd. vs. Government of Andhra

Pradesh, (2008) 16 SCC 276. In paras 26 and 31, the Supreme Court

observed as under:

“26. Additionally, it is noticed the High Court has relied

on certain records which purportedly contain the inspection

notes of the sites from where the appellants had excavated

the material. It is to be noted that for the first time before

the High Court these records were produced. Since there

was no reference to the so called inspection notes at any

point of time the question of the appellant pleading

prejudice because of non-supply of the same does not arise.

The High Court observed that since the appellant had not

demanded for the inspection notes during hearing of the

revision there was no question of any prejudice. The

approach is clearly wrong. At no point of time, not even at

the time of hearing of revision petition or in the revisional

order there is any reference to the so called inspection notes.

Added to that, the High Court did not consider the effect of

the stand taken by the Government earlier.

31. The basic principles of natural justice seem to have

been disregarded by the State Government while revising

the order. It acted on materials which were not supplied to

the appellants. Additionally the High Court for

the first time made reference to the report/inspection notes

which was not even referred to by the State Government

while exercising revisional power.”

37. That was a case of breach of principle of natural justice as

there was no opportunity provided. We are not concerned with such

situation here. The basic principle of natural justice has to be tested on the

basis of the order so passed by the judicial or quasi judicial authority. We

are here concerned with the constitutional validity of the provisions by

which State/Competent Authorities are authorized to acquire the property

and grant the reasonable compensation. This judgment, therefore, is also

of no assistance.

38. Dr. Tulzapurkar for the petitioners placed strong reliance on

the following observations of the Supreme Court in State of Punjab vs.

Gurdial Singh, (1980) 2 SCC 471 (para 16) :

“16. The fourth point about the use of emergency power

is well taken. Without referring to supportive case-law, it is

fundamental that compulsory taking of a man’s property is

a serious matter and the smaller the man the more serious

the matter. Hearing him before depriving him is both

reasonable and preemptive of arbitrariness, and denial of

this administrative fairness is constitutional anathema

except for good reasons. Save in real urgency where public

interest does not brook even the minimum time needed to

give a hearing land acquisition authorities should not,

having regard to Arts. 14 (and 19), burke an enquiry under

Sec. 17 of the Act. Here a slumbering process, pending for

years and suddenly exciting itself into immediate forcible

taking, makes a travesty of emergency power.”

39. That was a case where a piece of land was selected as the best

suitable place for building a Mandi. Hence, notification under section 4

and declaration under section 6 of the Land Acquisition Act was issued and

even foundation stone of the building was laid. But the very next year, the

proceedings were de-notified and instead notifications for acquiring the

land of respondent nos.1 to 21 were issued. The aggrieved respondents

approached the High Court alleging malafides on the ground that fresh

notifications were issued as a result of influence wielded by a Minister

(respondent no.22) who was related to the owner of the land which was

initially sought to be acquired. The High Court struck down the impugned

notifications on the ground of malafides, but after several years the State

once again sought to acquire the land of respondent nos.1 to 21 by

invoking emergency power under section 17 of the Land Acquisition Act.

The High Court for the second time also struck down the said action. The

State Government then challenged this decision of the High Court before

the Supreme Court. Respondent no.22, despite service of notice, did not

enter appearance before the High Court nor did he respond to the notice

issued by the Supreme Court giving him a fresh chance to deny the

allegations made against him. Only counter-affidavit was filed on behalf

of the State. It was in this factual background that the Supreme Court

made the following observations:

“The indefensible resort to Sec. 17 is evidence of the length

to which the executive would go to come to terms with men

wielding political power. No reason exists for us to grant

leave in the case where factually the High Court has found

improper attempt to take a citizen’s land.”

40. Having examined the statutory provisions, decisions cited at

the bar and the rival submissions, we have no hesitation in coming to the

conclusion that provisions of Section 14(1) of the Maharashtra Slum Act

cannot be said to be arbitrary or violative of the provisions of Article 14 of

the Constitution. Provisions of Section 14(1) of the Slum Act do provide

for an opportunity of hearing to be given to the owner/mortgagee of the

land before notification for acquisition is issued under Section 14(1).

Contention II(b) – No requirement of passing a reasoned order

41. It is contended by learned counsel for the petitioners that there

is no provision for passing a reasoned order by the Government.

42. Dr. Tulzapurkar for the petitioners has placed heavy reliance

on the following observations of the Supreme Court in Union of India vs.

Mohan Lal Capoor, (1973) 2 SCC 836 (para 28):

“28. ….. Reasons are the links ‘between the materials on

which certain conclusions are based and the actual

conclusions. They disclose how the mind is applied to the

subject matter for a decision whether it is purely

administrative or quasi-judicial. They should reveal a

rational nexus between the facts considered and the

conclusions reached. Only in this way can opinions or

decisions recorded be shown to be manifestly just and

reasonable.”

43. In the above case, the Court was considering the provisions of

Regulation 5(5) of the Indian Administrative Service (Appointment by

Promotion) Regulation, 1955 imposing mandatory duty upon the selection

committee in the following terms:

“If in the process of selection, review or revision it is

proposed to supersede any member of the State Civil

Police Service the Committee shall record its reasons for

the proposed supersession.”

(emphasis supplied)

The Court held that mandatory provisions of Regulation 5(5)

were not complied with by the selection committee because stating in each

case that the record of the officer concerned was not such as to justify his

appointment “at this stage in preference to those selected” was a confusion

and not as reason in support of the decision to supersede him. True, that it

is not expected that the selection committee should give anything

approaching the judgment of a Court, but it must at least state, as briefly as

it may, why it came to the conclusion that the officer concerned was found

to be not suitable for inclusion in the select list.

44. Reliance was also placed on Asst. Commissioner vs. Shukla &

Bros., (2010) 4 SCC 785, in support of the contention that recording of

reasons in dispensation of justice is a must. There cannot be any dispute

with regard to this proposition. However, unreasoned order may have to

be tested on the merits of the matter by the Court and/or the Appellate

Court. Therefore, mere absence of a provision to give reason by itself

cannot be the justification to declare validly enacted provision as

unconstitutional.

45. Dr. Tulzapurkar also relied upon a decision in Ravi Yashwant

Bhoir vs. District Collector, Raigad, (2012) 4 SCC 407 (paras 42 to 46).

Again, the Court reiterated the above principles and reiterated the

following observations in Krishna Swami vs. Union of India, (1992) 4 SCC

605 (para 47):

“47. Reasons are the links between the material, the

foundation for their erection and the actual conclusions.

They would also demonstrate how the mind of the maker

was activated and actuated and their rational nexus and

synthesis with the facts considered and the conclusions

reached. Lest it would be arbitrary, unfair and unjust,

violating Article 14 or unfair procedure offending Article

21.”

The Court also quoted from the decision in Sant Lal Gupta v. Modern

Coop. Group Housing Society Ltd., (2010) 13 SCC 336:

“The reason is the heartbeat of every conclusion. It

introduces clarity in an order and without the same, the

order becomes lifeless. Reasons substitute subjectivity with

objectivity. The absence of reasons renders an order

indefensible/unsustainable particularly when the order is

subject to further challenge before a higher forum.

Recording of reasons is principle of natural justice and

every judicial order must be supported by reasons recorded

in writing. It ensures transparency and fairness in decision

making. The person who is adversely affected must know

why his application has been rejected.”

The Court in terms held that emphasis on recording reasons is

that if the decision reveals the `inscrutable face of the sphinx’, it can by its

silence, render it virtually impossible for the courts to perform their

appellate function or exercise the power of judicial review in adjudging the

validity of the decision. Hence, spelling out reasons for the orders is

considered as one of the solitary requirements of natural justice.

46. We are of the view that since the reasons for acquisition of the

land are already indicated in the show cause notice and the impugned

notification also refers to the purpose of acquisition of land, the

notification is not required to contain detailed reasons for acquisition,

unlike a judicial order.

47. We also find considerable substance in the following

submissions made by the learned counsel for the respondents:-

(i) There is a clear distinction between (a) existence of the

reasons which support an administrative action (b) recording of the reasons

in the order itself (c) communication of the reasons to the petitioner and (d)

sufficiency of reasons to arrive at the decision. The petitioner is mixing

these four concepts.

In many cases if the highest Authority of the State

Government after careful perusal of the representation submitted by the

Competent Authority, the land owner’s objections and the District

Collector’s Report, takes the decision for acquisition, then the reasons in

support of the decision can be located in acceptance of the report, and the

contemporary correspondence etc. It may not be necessary in such

circumstances to actually record the reasons or to communicate the

recording of the reasons to the petitioner.

(ii) Whether a notification for acquisition impugned in a particular

case is supported by valid reasons cannot be a ground for challenging the

constitutional validity of the legislative provisions conferring such power

of acquisition.

Contention II(c) – Absence of provision for appeal

48. The third plank of the petitioner’s attack to the constitutional

validity of Section 14 is that there is no provision for appeal against

notification for acquisition.

49. We do not find any substance in the above contention. A

legislative provision conferring power of acquisition cannot be considered

as constitutionally invalid or arbitrary merely because there is no provision

for appeal. Absence of an Appeal provision in the section would not render

it constitutionality invalid. The Supreme Court in A.P. v/s N. Ramanaiah

(2009) 7 SCC 165 (para 33) has restated the well settled legal proposition

that no appeal lies to a higher authority as a matter of right unless provided

for by law. In Sarwan Singh v/s State of Punjab, (1975) 1 SCC 284 (para

7), while dealing with a case involving land acquisition, the Supreme

Court held that denial of the right of appeal available in the case of

acquisition did not make that particular section ultra vires Article 14 of the

Constitution. Further, the Supreme Court has held that the right of appeal

was a creature of statute and mere denial or even taking away of such a

right under the law could not be considered an infringement of a person’s

fundamental right.

Contention II(d) – Cumulative effect of three grounds of challenge

50. Learned counsel for the petitioners have submitted that even if

each of the above three planks of attack fails individually, the cumulative

effect of the three grounds of challenge to the constitutional validity of

Section 14 and absence of any control over the action of the executive has

the effect of rendering provisions of Section 14 arbitrary and thus violative

of Article 14 of Constitution of India. There is no control at all over the

action of the Government which results in divesting the citizen of his

rights. It is submitted that there are other provisions like Section 4, Section

12 and Section 13 of the Slum Act where reasonable opportunity is given

or appeal is provided for. Where appeal is provided to the Tribunal the

entire material relied upon by the authorities comes before the quasi

judicial Tribunal and hence there is a check and balance on the powers

exercised by the authorities under these Sections. As against this, it is

submitted that Section 14 is bereft of the safeguards as a result of which

the executive enjoys unfettered power.

It is submitted that the aforesaid safeguards are facets of the

rule of law which is enshrined in Article 14 of Constitution of India.

51. We are not impressed by the submissions made by the learned

counsel for petitioners. It is well-settled that there is always a presumption

in favour of constitutionality of a statute and the burden is upon him who

attacks the statute to show that there has been a clear violation of the

constitutional principles. In Government of A.P. v/s. P. Laxmi Devi [(2008)

4 SCC 720 at paragraph 68] the Supreme Court held that “The court must,

therefore, make every effort to uphold the constitutional validity of a

statute, even if that requires giving the statutory provision a strained

meaning, or narrower or wider meaning, than what appears on the face of

it. It is only when all the efforts to do so fail should the court declare a

statute to be unconstitutional”.

Further, the Government is presumed to act bona fide and

merely because a discretionary power exists does not mean that it will be

exercised discriminatorily. As was held by the Supreme Court in V. C.

Shukla v/s State (Delhi Administration), (1980) Supp SCC 249 (para 41),

“It is well settled that discretionary power is not the same thing as power

to discriminate nor can the constitutional validity of a law be tested on the

assumption that where a discretionary power is conferred on a high

authority, the same may or would be exercised in a discriminatory

manner.”

53. In Jyoti Pershad v/s Union Territory of Delhi [AIR 1961 SC

1602 at paragraph 13] the Supreme Court while upholding the

constitutional validity of Section 19 of the Slum Areas (Improvement and

Clearance) Act 1956 held that guidance may be “obtained from or

afforded by the preamble read in the light of the surrounding

circumstances which necessitated the legislation, taken in conjunction

with well-known facts of which the court might take judicial notice”.

53. Section 14 of the Act is in consonance with the Act’s

Preamble, Long title and Statement of Objects and Reasons and does not

confer any naked or unguided power on the executive. The Preamble of

the Act states that it is an “An act to make better provision for the

improvement and clearance of slum areas in the State and their

redevelopment and for the protection of occupiers from eviction and

distress warrants.”

The Act’s Long Title viz. The Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 also emphasizes redevelopment.

The Act’s Statement of Objects and Reasons states that the

purpose of the Act is “to make better provisions for the clearance of slum

areas in the whole of the State and their re-development”. Clause 3 of the

Statement of Objects and Reasons states that the Act is based on the

Central Slum Act viz. the Slum Areas (Improvement and Clearance) Act,

1956. The impugned Section 14 of the Act is in pari materia with Section

12 of the Central Act, which is already quoted in para 15 hereinabove..

54. In view of the above discussion, we have no hesitation in

rejecting the petitioners’ challenge to the constitutional validity of Section

14 of the Slum Act.

Contention III – Is section 17 of the Slum Act unconstitutional?

55. Section 17 of the Slum Act reads as under:-

“17. (1) Where any land is acquired and vested in the State

Government under this Chapter, the State Government shall

pay for such acquisition compensation, the amount of which

shall be determined in accordance with the provisions of

this section.

(2) Where the amount of compensation has been

determined by agreement between the State Government or

as the case may be, the Collector and the person to be

compensated, it shall be determined in accordance with

such agreement,

(3) Where no such agreement can be reached, the

amount payable as compensation in respect of any land

acquired shall be an amount equal to sixty times the net

average monthly income actually derived from such land

during the period of the five consecutive years immediately

preceding the date of publication of the notice referred to in

section 14,

(4) The net average monthly income referred to in subsection

(3) shall be calculated in the manner and in

accordance with the principles set out in the First Schedule;

(5) The Competent Authority shall, after holding an

inquiry in the prescribed manner, determine in accordance

with the provisions of sub-section (4) the net average

monthly income actually derived from the land, and publish

a notice in a conspicuous place on the land and serve it in

the manner provided in section 36 and calling upon the

owner of the land and every person interested therein, to

intimate to it, before a date specified in the notice, whether

such owner or person agrees to the amount so determined

and if he does not so agree, what amount he claims to be the

net average monthly income actually derived from the land;

(6) Any person who does not agree to the amount of the

net average monthly income determined by the Competent

Authority under sub-section (5), and claims a sum in excess

of that amount may prefer an appeal to the Tribunal within

thirty days from the date specified in the notice referred to

in that sub-section.

(7) On appeal, the Tribunal shall, after hearing the

appellant, determine the net average monthly income and

its determination shall be final and shall not be questioned

in any court of law;

(8) Where there is any building on the land in respect of

which the net average monthly income has been determined,

no separate compensation shall be paid in respect of such

building:

Provided that, where the owner of the land and the owner of

the building on such land are different, the Competent

Authority shall apportion the amount of compensation

between the owner of the land and the owner of the building

in the same proportion as the market price of the land bears

to the market price of the building on the date of the

acquisition. ”

(emphasis supplied)

56. The First Schedule to the Act reads as under :

“Principles for determination of the net average monthly

income

1. The Competent Authority shall first determine the

gross rent actually derived by the owner of the land

acquired including any building on such land during the

period of five consecutive years referred to in sub-section

(4) of section 17.

2. For such determination the Competent Authority

may hold any local inquiry and obtain, if necessary,

certified copies of extracts from the property tax assessment

books of the local authority concerned showing the rental

value of such land.

3. The net average monthly income referred to in subsection

(4) of section 17 shall be sixty per cent of the

average monthly gross rent which shall be one-sixtieth of

the gross rent during the five consecutive years as

determined by the Competent Authority under paragraph 1.

4. Forty per cent of the gross monthly rental referred to

above shall not be taken into consideration in determining

the net average monthly income but shall be deducted in

lieu of the expenditure which the owner of the land would

normally incur for payment of any property tax to the local

authority, for collection charges, income-tax or bad debts

as well as for works of repair and maintenance of the

buildings, if any, on the land.

5. Where the land or any portion thereof has been

unoccupied or the owner has not been in receipt of any rent

for the occupation of the land during the whole or any part

of the said period of five years, the gross rent shall be taken

to be the income which the owner would in fact have

derived if the land had been leased out for rent during the

said period, and for this purpose the rent actually derived

from the land during a period prior or subsequent to the

period during which it remained vacant or from similar

land in the vicinity shall be taken into account.”

57. Dr. Tulzapurkar, learned Senior counsel for petitioners raised

following contentions in support of the challenge to the constitutional

validity of Section 17 of the Slum Act:-

(i) It is submitted that the Slum Act confers powers on the

Government to acquire property and provides for payment of

compensation in Section 17. The compensation fixed therein is illusory

and virtually no compensation at all. It is not the petitioner’s contention

that the compensation has to be equal to the market value of the property

which is acquired, but it is certainly the submission of the petitioner that

the compensation has to have some relation to the market value of the

property that is acquired. Section 17 was enacted in the year 1971. The

value of the property has gone up so much over the years that the quantum

fixed in Section 17 renders the compensation illusory.

(ii) It is submitted that the Government is acquiring the property

and for acquiring the property the owner of the property is required to be

compensated. Such compensation must be reasonable having regard to the

market value of the property. The quantum of compensation fixed in sub

section (3) of Section 17 is the amount equal to 60 times the net average

monthly income actually derived during the period of 5 consecutive years

immediately preceding the date of publication of notice. The said quantum

in the present context is totally illusory. In this connection, reliance is

placed on the decisions in Rajiv Sarin Vs. State of Uttarkhand, (2011) 8

SCC 708 (para 78) and Malpe Vishwanath Acharya Vs. State of

Maharashtra, AIR 1998 SC 602.

58. Dr. Tulzapurkar has vehemently submitted that compensation

awarded to the land owner is absolutely illusory because the market value

of the same lands shown in ready reckoner is more than 100 times higher

than the rate at which compensation has been awarded to the land owners.

It is further submitted that after the lands are acquired by the

Government under Sections 14 and 17, lands have been allotted by the

Government to co-operative societies of slum dwellers and developers for

the purpose of rehabilitation scheme or redevelopment scheme and the

developer gets FSI of 2.5 as distinguished from the normal FSI of 1 or 1.3.

Hence, for granting such FSI the Government also gets substantial amount

of premium from the developer. Hence, compensation amounts

determined without taking into account the market value reflected in the

ready reckoner and without taking into consideration such benefits made

available to a private developer must be treated as illusory and without

taking into account the relevant principles.

59. Mr. E.P. Bharucha, Senior counsel appearing for State

Government has made the following submissions in relation to

constitutional validity of Section 17 of the Slum Act:-

(i) The land acquisition is for housing slum dwellers who live in

squalid conditions and is, therefore, a public purpose. Payment of market

value of the land to the owners who have allowed the land to become a

slum would defeat the very purpose of the said Act. At the same time,

Section 17 of the Act does not provide for “illusory” compensation as

submitted by the Petitioners.

(ii) Section 17(3) of the Act provides for payment of

compensation to the owner of the land at sixty times the net average

monthly income derived from the land over the five consecutive years

immediately preceding the date of publication of notice referred to in

section 14. Section 17(4) provides that the net average monthly income

referred to in sub-section (3) shall be calculated in the manner and in

accordance with the principles set out in the First Schedule to the Act. This

amount is not illusory as the Schedule takes into account even situations

where a land owner has not earned income from the slum and provides for

the same.

60. Mr. P.K. Dhakhephalkar, learned Senior counsel appearing on

behalf of SRA, Mr.Ravi Kadam, learned Senior counsel appearing for

respondent no.7 developers and Mr. A.V. Anturkar, learned counsel for the

co-operative housing societies of slum dwellers, have further submitted

that the petitioners cannot challenge in a Writ Petition challenging the

constitutional validity of Section 17, the determination of compensation in

individual cases. It is submitted that the petitioners can only challenge the

principles specified by the Legislature for determination of compensation.

It is also submitted that determination of compensation in individual cases

cannot be challenged by comparing it with market value as specified in the

Ready Reckoner prepared by the State Government for determining stamp

duty payable on execution of documents for conveyance of property.

Ready Reckoner is only an internal guideline for the Stamp Act authorities

for fiscal purposes. Prasadnagar Co-operative Hsg. Soc. Ltd. v/s. State of

Maharashtra, 2005 (2) Mh.L.J. 310 (paras 8 to 11) and Suresh V/s. Ferrani

Hotels (P) Ltd. 2011 (2) Mh.L.J. 507 (para 10).

It is, therefore, submitted that the Ready Reckoner cannot be

treated as reflecting the true market value for the purposes of acquisition of

property. In any case, the valuation showed in the Ready Reckoner of the

lands in question is only of the open land on which there is no

encumbrance. Hence, the valuation in Ready Reckoner cannot be treated

as valuation of land which is already encroached upon i.e. land covered by

slums.

As regards the premium paid to the Government for granting

additional FSI, it is submitted that it is a subsequent development.

Additional FSI i.e. FSI of 2.5 as distinguished from the normal FSI of 1 or

1.3, it is a subsequent development after acquisition and, therefore, wholly

irrelevant consideration for the purpose of determining value of the land.

In any case, the amendment for payment of such premium to the State

Government was made only in the year 2008, but in all the Writ Petitions

being argued here, the acquisition and passing off the award took place

much prior to the date of such amendment and, therefore, also that aspect

is wholly irrelevant for the purposes of determining the value of the land.

61. The learned counsel for the respondents have also submitted

that Sections 14 and 17 of the Slum Act are enacted for securing

implementation of the Directive Principles of State Policy contained in

Article 39(b) and (c), reads as under :

“39. The State shall, in particular, direct its policy towards

securing—

(b ) that the ownership and control of the material

resources of the community are so distributed as best to

subserve the common good;

(c) that the operation of the economic system does not

result in the concentration of wealth and means of

production to the common detriment.”

62. At one stage, it was also further contended that the challenges

raised by the petitioners cannot be entertained in view of the provisions of

Article 31C of the Constitution, which read as under:-

“31C. Notwithstanding anything contained in article 13,

no law giving effect to the policy of the State towards

securing all or any of the principles laid down in Part IV

shall be deemed to be void on the ground that it is

inconsistent with, or takes away or abridges any of the

rights conferred by article 14 or article 19 and no law

containing a declaration that it is for giving effect to such

policy shall be called in question in any court on the ground

that it does not give effect to such policy:

Provided that where such law is made by the

Legislature of a State, the provisions of this article shall not

apply thereto unless such law, having been reserved for the

consideration of the President, has received his assent.”

(underlined words struck down by Supreme Court in

Keshwanand Bharti case).

63. Article 31C was for the first time inserted into the

Constitution by Constitution (Twenty-fifth Amendment) Act, 1971 with

effect from 20 April 1972. On the other hand, the Maharashtra Slum

Areas (Improvement, Clearance and Redevelopment) Act was enacted in

1971 upon having received assent of the President on 3 August 1971 and

published in the Official Gazette on 11 August 1971. Thus, apart from the

fact that the above Act was enacted before coming into force of Article

31C, the respondents have not shown that any of the amendments to the

Act were reserved for consideration of the President and that hence assent

was received under Article 31C of the Constitution. In view of the above

factual aspects, it is not possible to accept the argument of learned counsel

for the respondents that the Slum Act of 1971 which came into force on 11

August 1971 is covered by the immunity granted by Article 3C of the

Constitution which came into force from 20 April 1972.

64. We may now refer to the relevant decisions.

65. In Rajiv Sarin Vs State of Uttarakhand, (2011) 8 SCC 708, a

Constitution Bench of the Supreme Court has laid down the law on the

subject in the following terms:

69. With regard to claiming compensation, all

modern constitutions which are invariably of

democratic character provide for payment of

compensation as the condition to exercise the right

of expropriation. Commonwealth of Australia Act, a

French Civil Code (Article 545), the 5th Amendment

of the Constitution of U.S.A. and the Italian

Constitution provided principles of “just terms”,

“just indemnity”, “just compensation” as

reimbursement for the property taken, have been

provided for.

70. ….. The right to property being no more a

fundamental right, a legislation enacted under the

authority of law as provided in Article 300A of

the Constitution is not amenable to judicial review

merely for alleged violation of Part III of the Constitution.

76. The Government is empowered to acquire

land by exercising its various statutory powers.

Acquisition of land and thereby deprivation of

property is possible and permissible in accordance

with the statutory framework enacted. Acquisition is

also permissible upon exercise of police power of the

State. It is also possible and permissible to acquire such

land by exercising the power vested under the

Land Acquisition Act.

78. Article 31(2) of the Constitution has since

been repealed by the Constitution (44th Amendment) Act

1978. It is to be noted that Article 300A was inserted by the

Constitution (44th Amendment) Act, 1978 by

practically reinserting Article 31(1) of the

Constitution. Therefore, right to property is no

longer a fundamental right but a right envisaged

and conferred by the Constitution and that also by

retaining only Article 31(1) of the Constitution and

specifically deleting Article 31(2), as it stood. In view of

the aforesaid position the entire concept to right to

property has to be viewed with a different mindset

than the mindset which was prevalent during the

period when the concept of eminent domain was

the embodied provision of fundamental rights. But even

now as provided under Article 300A of the

Constitution the State can proceed to acquire land for

specified use but by enacting a law through State

legislature or by Parliament and in the manner

having force of law. When the State exercises

the power of acquisition of a private property

thereby depriving the private person of the property,

provision is generally made in the statute to pay

compensation to be fixed or determined according to the

criteria laid down in the statute itself. It must be

understood in this context that the acquisition of

the property by the State in furtherance of the Directive

Principles of State Policy was to distribute the material

resources of the community including acquisition and

taking possession of private property for public

purpose. It does not require payment of market

value or indemnification to the owner of the

property expropriated. Payment of market value in lieu of

acquired property is not a condition precedent or

sine qua non for acquisition. It must be clearly

understood that the acquisition and payment of

amount are part of the same scheme and they

cannot be separated. It is true that the adequacy of

compensation cannot be questioned in a court of law, but

at the same time the compensation cannot be

illusory.

(emphasis supplied)

66. In K.T. Plantation Pvt. Ltd. v/s State of Karnataka, (2011) 9

SCC 1 (para 189) a case where for nearly 140 acres of land, the

compensation payable for acquisition by the Government would be only

Rs.2 lakhs, the Supreme Court held that “requirement of public purpose,

for deprivation of a person of his property under Article 300-A, is a

precondition, but no compensation or nil compensation or its illusiveness

has to be justified by the State on judicially justiciable standards.

Measures designed to achieve greater social justice, may call for lesser

compensation and such a limitation by itself will not make legislation

invalid or unconstitutional or confiscatory.”

67. In Oriental Gas co. Ltd. Vs. State of West Bengal, AIR 1979

SC 248, the Supreme Court has held that what is to be scrutinized by the

Court in judicial review is not the amount of compensation but principles

specified by the Legislature for determining compensation. The Court held

as under :

“…… The right declared by the Constitution guarantees

that compensation shall be given before a person is

compulsorily expropriated of his property for a public

purpose. What is fixed as compensation by statute, or by

the application of principles specified for determination

of compensation is guaranteed: it does not mean however

that something fixed or determined by the application of

specified principles which is illusory or can in no sense

be regarded as compensation must be upheld by the

Courts, for, to do so, would be to grant a charter of

arbitrariness, and permit a device to defeat the

constitutional guarantee. But compensation fixed or

determined on principles specified by the Legislature

cannot be permitted to be challenged on the somewhat

indefinite plea that it is not a just or fair equivalent.

Principles may be challenged on the ground that they are

irrelevant to the determination of compensation, but not

on the plea that what is awarded as a result of the

application of those principles is not just or fair

compensation. A challenge to a statute that the principles

specified by it do not award a just equivalent will be in

clear violation of the constitutional declaration that

inadequacy of compensation provided is not justiciable.”

(emphasis supplied)

68. In view of the above settled legal position, we find

considerable substance in the submission made by learned counsel for the

respondents that the expression “illusory”, is required to be interpreted to

mean that when principles of the valuation are unreasonable or unscientific

then the product of implementation of such unreasonable/unscientific

principles of the valuation, result in the valuation which can be described

as illusory valuation. Therefore, to find out, whether the valuation is

illusory or not, we cannot go on case to case basis and attempt to ascertain

factually whether the amount is illusory or not. This is because, if

factually the amount is illusory, the remedy by way of Appeal is always

there, to get the amount corrected. Even if the Appellate Authority decides

in the Appeal against the land owner, it would be open for him to file the

writ petition and challenge it before the Writ Court.

69. In view of the above settled legal position, we must now turn

to the petitioners’ challenge to the provisions of Section 17 of the Slum

Act read with the First Schedule to the said Act which lays down

principles for determination of the net average monthly income.

Section 17(3) of the Slum Act provides that where no

agreement is reached between the Government and the land owner, the

amount payable as compensation in respect of any land acquired shall be

“an amount equal to sixty times the net average monthly income actually

derived from such land during the period of five consecutive years

immediately preceding the date of publication of the notice referred to in

Section 14”.

Section 17(4) read with the First Schedule to the Slum Act

provides that for such determination, the Competent Authority may hold

any local inquiry and obtain, if necessary, certified copies of extracts from

the property tax assessment books of the local authority concerned

showing the rental value of such lands. After such gross rent actually

derived by the owner of the land is ascertained, forty per cent of the gross

monthly rental is to be deducted in lieu of the expenditure which the

owner of the land would normally incur for payment of any property tax to

the local authority, for collecting charges, for works of repairs and

maintenance of buildings, if any, on the lands, etc.

Paragraph 5 of the First Schedule provides that where the land

has been unoccupied or the owner has not received any rent for occupation

of the land during the whole year or any part of the period of five years

preceding the date of notice under Section 14, the gross rent shall be taken

to be the income the owner would have derived if the land would have

been leased out for rent during the said period. For this purpose, the rent

actually derived from the land during a period prior or subsequent to the

period during which it remained vacant or from similar land in the vicinity

shall be taken into account.

70. However, when one considers that paragraphs 3 and 4 of the

principles for determination of net average monthly income laid down in

First Schedule to the Slum Act provide for further deduction of forty per

cent of the gross monthly rental actually derived or derivable rent by the

owner of the land, the amount of compensation would work out to thirty

six times the gross average monthly income actually derived or derivable

by the owner of the land i.e. only three times the amount of average gross

annual income.

71. Our attention has been invited to the various decisions of the

Supreme Court where the amount of compensation to be paid for

acquisition was an amount equal to eight times the amount of average

annual income. In Rajiv Sarin (supra) under Section 19(1)(b) of the

Kumaun & Uuttarakhand Zamindari Abolitation and Land Reforms Act,

1960, compensation provided was eight times the amount of average

annual income which would mean an amount equal to ninety six times the

average monthly income from the land.

In view of the above decision, though the amount of

compensation equal to sixty times the net average monthly income

actually derived or derivable from such land during the period of five

consecutive years immediately preceding the date of publication of notice

referred in Section 14 i.e. an amount equal to five times the net average

annual income is less than the amount equal to eight times the average

annual income upheld by the Supreme Court in Rajiv Sarin’s case

(supra), but in view of the other decisions referred to hereinafter, it is not

possible to hold that Section 17(3) of the Slum Act may be struck down as

laying down principles for illusory amount for acquiring private property.

72. In Jilubhai Nanbhai Khachar vs State of Gujarat, 1995 Suppl.

(1) SCC 596, a two Judge Bench of the Supreme Court upheld the

constitutional validity of the Bombay Land Revenue Code and Land

Tenure Abolition Laws (Gujrat Amendment) Act, 1971, providing for

compensation “an amount equivalent to the average of the net annual

income received by the occupant in respect of the mines and mineral

products during the three years immediately preceding the date of

vesting.”. The Court relied upon the decision of the Constitution Bench in

Bhim Singhji Vs Union of India, (1981) 1 SCC 166, and further held as

under :

“55. It would thus be clear that acquisition of the property

by law laid in furtherance of the Directive Principles of State

Policy was to distribute the material resources of the

community including acquisition and taking possession of

private property for public purpose. It does not require

payment of just compensation or indemnification to the

owner of the property expropriated. It is the very negation of

effectuating the public purpose. Payment of market value in

lieu of acquired property is not sine qua non for acquisition.

Acquisition and payment of amount are part of the scheme

and they cannot be dissected. However, fixation of the

amount or specification of the principles and the manner in

which the amount is to be determined must be relevant to the

fixation of amount. The amount determined need not bear

reasonable relationship. In other words, it is not illusory.

The adequacy of the resultant amount cannot be questioned

in a court of law. However, the validity of irrelevant

principles are amenable to judicial scrutiny.”

73. In Maharao Sahib Shri Bhim Singhi v/s Union of India,

(1981) 1 SCC 166 (para 4), a Constitution Bench of the Supreme Court

held that the maximum compensation of Rs.2 lakhs specified in “Section

11(6) of the Urban Land (Ceiling and Regulation) Act, 1976… is valid.

The amount thus payable, is not illusory and the provision is not

confiscatory Rupees two lakhs is not like a farthing even if the excess land

may be a fortune”. The Court (in para 12) went on to “repudiate the

proposition that payment of a sum of Rs. 2 lakhs, whatever the total value of the property in the market may be is so fictitious and flimsy as to be a farthing.”

74. In view of the above settled legal position, we are unable to

accept the petitioners’ challenge to the constitutional validity of Section 17

of the Slum Act read with the First Schedule thereto, because Sections 14

and 17 of the Slum Act and the provisions of the Act are in furtherance of

the goals set out in Article 39(b) and (c) of the Constitution. In U.P. State

Electricity Board and another Vs Hari Shankar Jain and others, AIR 1979

SC 65, the Apex Court has made the following pertinent observations :

“4A. Before examining the rival contentions, we remind

ourselves that the Constitution has expressed a deep

concern for the welfare of workers and has provided in

Art. 42 that the State shall make provision for securing

just and humane conditions of work and in Art. 43 that

the State shall endeavour to secure, by suitable

legislation or economic organisation or in any other way,

to all workers agricultural, industrial or otherwise, work,

a living wage, conditions of work ensuring a decent

standard of life and full enjoyment of leisure etc. These

are among the “Directive Principles of State Policy.”

The mandate of Art. 37 of the Constitution is that while

the Directive Principles of State Policy shall not be

enforceable by any Court, the principles are ‘nevertheless

fundamental in the governance of the country’ and ‘it

shall be the duty of the State to apply these principles in

making laws’. Addressed to Courts, what the injunction

means is that while Courts are not free to direct the

making of legislation, Courts are bound to evolve, affirm

and adopt principles of interpretation which will further

and not hinder the goals set out in the Directive

Principles of State Policy. This command of the

Constitution must be ever present in the minds of Judges

when interpreting statutes which concern themselves

directly or indirectly with matters set out in the Directive

Principles of State Policy.” (emphasis supplied)

75. Acquisition of slum lands under the provisions of the Slum

Act are not merely for the benefit of a large number of persons residing in

sub-human conditions in slums but also to ensure that improvement of

their living conditions will lead to improvement of the urban economy

which is very much dependent upon the labour force being supplied by the

occupants of hutments in the slums. As per the settled legal position,

scope of judicial review in such cases is to find out whether the principles

for valuation set out in the legislation are relevant to the principles for

determination of value of the land and since we find that the principles are

relevant, the scope of the judicial review stops here and we are not

concerned with the final outcome or the actual amount of compensation

arrived at by the Competent Authority.

76. However, even while declining the petitioners’ prayers for

striking down the provisions of Sections 14 and 17(3) and (4) of the Slum

Act as unconstitutional, we are inclined to grant one more opportunity to

the aggrieved land owners to challenge the fixation of compensation in

individual cases by filing appeal within thirty days from the date of the

judgment, if not already filed. Section 17(6) and (7) of the Maharashtra

Slum Areas (Improvement, Clearance & Development) Act, 1971, provide

for Appeal in the following terms:

“17. (1) to (5) ……

(6) Any person who does not agree to the amount of

the net average monthly income determined by the

Competent Authority under sub-section (5), and claims a

sum in excess of that amount may prefer an appeal to the

Tribunal within thirty days from the date specified in the

notice referred to in that sub-section.

(7) On appeal, the Tribunal shall, after hearing the

appellant, determine the net average monthly income and

its determination shall be final and shall not be

questioned in any court of law,”

77. Resultantly, the following order :

O R D E R

(A) The challenge to the constitutional validity of

Sections 14 and 17 of the Maharashtra Slum Areas

(Improvement, Clearance & Development) Act, 1971

(the Slum Act) is rejected. We hold that the

provisions of Section 14 and 17 of the said Act are

intra vires the provisions of the Constitution of India.

(B) It is declared that before and after the amendment of

Section 14(1) of the Slum Act by Maharashtra Act

No.11 of 2012, the State Government or the

Competent Authority is empowered to acquire the

land within a slum area and also the lands adjoining

or surrounded by a slum area.

(C) The petitioners/land owners/aggrieved persons will

be at liberty to file appeals under section 17(6) of the

Slum Act against the amounts determined by the

Competent Authority under Section 17(5) thereof,

within 30 days from the date of this judgment. If such

appeals are filed within 30 days from today, the

appeals shall be treated as filed within the period of

limitation.

(D) The appeals shall be heard and decided on merits and

in pending appeals also, the parties will be at liberty

to file additional pleadings and/or documents in

support of their case for higher compensation. The

Appellate Authority shall redetermine the

compensation in accordance with law after giving

full opportunities to the parties.

(E) All the Writ Petitions be placed before the

appropriate Bench for final orders and for other

prayers, if any, on 11th June 2013.

CHIEF JUSTICE

ANOOP V. MOHTA, J.

After the judgment is pronounced, learned counsel for the

petitioners pray that the ad-interim / interim stay operating during the

pendency of these petitions may be continued for some time in order to

enable the parties to have further recourse in accordance with law. The prayer is opposed by learned counsel for the respondents.

Since the ad-interim / interim stay has been operating for quite

some time, the ad-interim / interim stay granted during pendency of these

petitions shall stand extended till 3rd July 2013.

CHIEF JUSTICE

ANOOP V. MOHTA, J.

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