Facts:
i) The Kolkata Municipal Corporation (Appellant) acquired the property belonging to Mr. Bimal Kumar Shah (Respondent No. 1), located at Premises No. 106C, Narikeldanga North Road, Kolkata – 700011 (the Property), under the authority granted by Section 352 of the Kolkata Municipal Corporation Act, 1980. This section empowers the acquisition of lands and buildings for the development of public streets and parking areas. The property was subsequently transferred to Respondent No. 1 through a settlement deed after the death of his father.
ii) At the time of his father’s demise, Respondent No. 1 was still a minor, and his elder brother managed the Property. During this period, the elder brother leased the premises, measuring 2 bighas, 18 kathas, 6 chitaks, and 40 square feet, to M/s Arora Film Corporation.
iii) Upon reaching legal age, the Property was transferred in the name of Birinchi Shah in the assessment records of the appellant-Corporation.
iv) Respondent No. 1 consistently paid all municipal dues, including property taxes, which was verified by the Appellant in a letter dated 07.04.2000, confirming that there were no outstanding tax liabilities.
v) In 2009, the Appellant attempted to forcibly enter and occupy the Property, leading Respondent No. 1 to file Writ Petition No. 126 of 2009 in the Calcutta High Court, seeking an injunction to restrain the Appellant from proceeding with their actions.
vi) As there was no dispute over the ownership of the property and the Appellant did not file any affidavit-in-opposition, the High Court dismissed the Writ Petition on 17.09.2009. The court directed the Appellant to investigate any possible encroachments and ordered them to refrain from carrying out any construction on the Property.
vii) In 2010, Mr. Shah found that the Corporation had altered the official records by removing his name, leading him to file Writ Petition No. 981 of 2010, seeking correction of these erroneous entries. The Calcutta High Court granted relief by restraining the Corporation from interfering with Mr. Shah’s possession and blocking the enforcement of the incorrect entries.
viii) In an order dated 08.01.2015, the High Court ruled in favor of Mr. Shah, affirming his possession of the Property and directing the appellant-Corporation to reverse the wrongful changes made to the official records. Additionally, the Appellant was instructed to remove its agents and possessions from the Property within two weeks. The High Court found that the Appellant had failed to establish ownership over the Property.
ix) Dissatisfied with this decision, the Appellant filed Writ Appeal P.O. No. 51 of 2015, arguing that they could not submit their Affidavit-in-Opposition earlier due to misplaced records.
x) The Appellant brought up the issue of acquisition for the first time before the Division Bench, prompting the Bench to remand the case to the Learned Single Judge. Additionally, the Division Bench imposed a cost of Rs. 50,000/- on the Appellant.
xi) Following the remand of the case, the Appellant submitted an Affidavit-in-Opposition, asserting that the Property had been acquired. In light of these new developments, Birinchi Shah sought permission to withdraw the current Writ Petition with the option to file a new one. The High Court granted this request through an order dated 11.08.2016.
xii) Consequently, Respondent No. 1 filed Writ Petition No. 930 of 2016, challenging the validity of the alleged acquisition and seeking restoration of his name as the rightful owner in the official records.
xiii) The Learned Single Judge, in an order dated 14.09.2017, held that the Appellant’s acquisition of the Property under Section 352(a) of the Act was unlawful, as the section does not provide for compulsory acquisition. Consequently, the acquisition was set aside.
xiv) Both the Appellant and Respondent No. 1 challenged this decision in Writ Appeals APO No. 523 of 2017 and APO No. 210 of 2018, respectively.
xv) The Division Bench of the High Court affirmed the Single Judge’s order and resolved the appeals by directing the appellant-Corporation to either commence acquisition proceedings under Section 536 or 537 of the Act within five months or restore the name of the last recorded owner in the official records. (Section 536 relates to the acquisition of immovable property by agreement, and Section 537 outlines the process when such property cannot be acquired by agreement.)
xvi) Dissatisfied with the Division Bench’s order, the Appellant filed Civil Appeal No. 6466 of 2024 before the Supreme Court.
ISSUES RAISED:
- The scope and extent of the powers granted under Section 352 of the Kolkata Municipal Corporation Act, 1980, were questioned. Specifically, whether the section conferred the power of compulsory acquisition of land.
- The case examined whether the Corporation had adhered to the necessary procedural safeguards outlined in Article 300A of the Constitution, including the right to notice, the right to be heard, and the right to fair compensation.
Appellant’s Contentions: The Appellant argued that their actions were justified under Section 352 of the Kolkata Municipal Corporation Act, 1980, which empowers the Municipal Commissioner to acquire land for public purposes, such as developing parks or streets. They also referenced Section 363, which requires compensation when land is acquired under Section 352. Furthermore, the Appellant asserted that Section 537 is not the exclusive provision governing land acquisition under the Act, and that different sections may be applied for distinct purposes and projects without violating Article 14 of the Constitution (Right to Equality).
Respondent’s Contentions: The Respondent contended that the Appellant’s interpretation was incorrect, arguing that compulsory land acquisition must adhere to the procedure specified in Section 537 (Procedure when immovable property cannot be acquired by agreement) of the Act. This section guarantees a fair legal process for determining compensation and confirming that the acquisition serves a public purpose. The Respondent also argued that the use of Section 352 along with Section 363 is illegal and violates Article 300A of the Constitution of India, which safeguards individuals from being deprived of their property except through lawful means.
Rationale: The Supreme Court rejected the Appellant’s appeal, filed under SLP (C) No. 4504 of 2021, which challenged the judgment of the Calcutta High Court. The court directed the Appellant to pay Rs. 5,00,000/- as costs to Respondent No. 1 within sixty days from 16.05.2024. The Supreme Court clarified that Section 352 of the Kolkata Municipal Corporation Act only grants the Municipal Commissioner the authority to identify land for purposes such as opening, widening, or extending streets, parks, squares, and other public facilities. However, it does not outline the procedure for acquiring land. Section 352 allows for consideration of which land might be needed for public use but does not authorize compulsory acquisition.
The Court further held that any legislation involving compulsory acquisition of property must ensure a fair and reasonable process for acquisition, and merely providing compensation is insufficient to meet the procedural safeguards required under Article 300A of the Constitution.
The Court highlighted that although the 44th Constitutional Amendment downgraded the right to property from a fundamental right to a constitutional right under Part XII, this change did not remove the protection against arbitrary and unfair property acquisition. A compensation mechanism alone is inadequate to protect against unconstitutional acquisition.
The Supreme Court outlined seven procedural sub-rights that must be adhered to in property acquisition:
- Right to Notice:
Individuals must receive prior notice if the State intends to deprive them of property rights. This right is an extension of the right to information under Article 19(1)(a). Any notice regarding property acquisition must be clear, precise, and meaningful. - Right to be Heard:
Property owners have the right to be heard and to express opposition to the proposed acquisition. This right must be substantive, not merely procedural, ensuring the concerns of the affected party are genuinely considered. - Right to a Reasoned Decision:
A reasoned decision ensures that the authority has duly considered the objections and arguments raised by the property owner. The authority must issue an informed decision and communicate it effectively to the person involved. - Duty to Acquire for Public Purpose:
The acquisition must be for a legitimate public purpose, which acts as a constraint on the authority’s discretion. This requirement must align with the constitutional goals of welfare and distributive justice. - Right to Restitution or Fair Compensation:
The right to hold and enjoy property is safeguarded under Article 300A. Any deprivation of this right must be accompanied by adequate restitution, whether through monetary compensation, rehabilitation, or other forms of relief. Fair compensation is a core element of the acquisition process. - Right to an Efficient and Expeditious Process:
The State must conduct the acquisition process efficiently and within a reasonable timeframe. Completing the process promptly is essential to the rights protected under Article 300A. - Right to Conclusion:
The obligation to conclude the acquisition process is also a right under Article 300A. The process is not deemed complete until the State has taken actual physical possession of the land.
Key Legal Defects:
- Lack of Authority to Acquire Under Section 352:
The Corporation attempted to acquire the property by invoking Section 352 of the Kolkata Municipal Corporation Act, 1980. However, the Supreme Court ruled that this section only authorizes the identification of land for public purposes such as streets and parks but does not grant the power to compulsorily acquire land. - Failure to Follow Procedural Requirements:
Even if the Corporation had the authority, it failed to adhere to the proper procedures set out in the Act and the Land Acquisition Act of 1894. These procedures include giving adequate notice to the property owner, conducting a public inquiry, and ensuring fair compensation. Following the view of the Calcutta High Court, the Supreme Court pointed out that Section 352 only allows for the identification of land for public purposes and does not specify the procedure for acquiring land. - Violation of Constitutional Rights:
The Corporation’s actions were found to infringe upon the property owner’s constitutional rights under Article 300A. The Supreme Court stressed that, while the right to property is no longer a fundamental right, any acquisition must still be conducted in a fair, just, and lawful manner, respecting the owner’s interests.
INFERENCE:
In conclusion, the Supreme Court’s judgment in this case has respected the constitutional principles governing property rights and emphasised the importance of ensuring that any acquisition of property is carried out in a lawful and fair manner. This important decision emphasises the importance of procedural safeguards to protect property rights under Article 300A. This serves as a reminder to state authorities of their responsibility to adhere to the provisions of the Constitution during the process of property acquisition.By outlining these seven sub-rights, the Supreme Court has established a strong framework to ensure that acquisition of immovable property is lawful, fair and transparent. Unless due process is established or observed before depriving a person of their rights to their property, evictions are unconstitutional. Overall, this decision strengthens the protections afforded to Indian landowners and sets a precedent for future land acquisition litigation.
Mahi Jain
Government Law College, Mumbai.