Compulsory acquisition unconstitutional if proper procedure is not established: The 7 Rights

KOLKATA MUNICIPAL CORPORATION & ANR. V. BIMAL KUMAR SHAH & ORS. 

FACTS OF THE CASE

• The property in question, Premises No. 106C, situated at Narikeldanga North Road, Kolkata – 7000111[1], belongs to Mr. Birinchi Bihari Shah having succeeded it through a deed of settlement executed by his father.
• As Birinchi Shah was minor at the time when his father passed away, his elder brother managed and administered the Property.
• Upon attaining majority, the Property was mutated in the name of Birinchi Shah in the assessment book of the appellant-Corporation.
• It is also stated that the appellant Corporation acknowledged the same and by its letter dated 07.04.2000 admitting that there are no outstanding dues with respect to property tax.
• In the year 2009, when an attempt was made by the appellant-Corporation to forcefully enter and occupy the Property, Birinchi Shah filed a writ petition being W.P. No. 126 of 2009 before the High Court seeking a restraint order against the appellant-Corporation. As there was no real contest about the title in the Property and the appellant-Corporation having not filed any affidavit-in opposition, the High Court disposed of the writ petition by an order dated 17.09.2009 directing that the appellant Corporation must hold an enquiry about the encroachments. The High Court further directed the appellant-Corporation not to make any construction over the Property.
•  In July 2010, Birinchi Shah received information that the appellant-Corporation had deleted his name from the category of owner and had inserted its own name in the official records. Aggrieved, he approached the High Court by filing a writ petition.
• The writ petition was disposed of restraining the appellant-Corporation from interfering with the possession of Birinchi Shah and also injuncted them from giving effect to the wrongful recording of its name in the official records. The appellant-Corporation was also directed to remove its men and material from the Property within two weeks from the date of the said order.
• Aggrieved by this decision the appellant Corporation approached the Hon’ble Supreme Court.

CONTENTION RAISED BY THE COUNCELS

• Mr. Jaideep Gupta, learned senior counsel, representing the appellant-Corporation, submitted that the appellant-Corporation had the requisite statutory power to acquire a property under Section 352 of the Kolkata Municipal Corporation Act, 1980 [2]for the purposes of constructing a park, as was the case here. He referred to Section 363 of the Act provisioning compensation for acquisitions made under Section 352 of the Act and submitted that acquisition under this chapter was therefore complete and stands on its own footing.

• Mr. Mukul Rohatgi and Mr. Huzefa Ahmadi, learned senior counsels, appearing for the respondents, submitted that the power of acquisition is only in Section 537 of the Act and that invocation of Section 352 read with Section 363 is illegal and violative of Article 300A of the Constitution.

DECISION OF THE HON’BLE COURT

The scheme of the Act made it clear that Section 352 empowers the Municipal Commissioner to identify the land required for the purpose of opening of public street, square, park, etc. and under Section 537, the Municipal Commissioner has to apply to the Government to compulsorily acquire the land. Upon such an application, the Government may, in its own discretion, order proceedings to be taken for acquiring the land. Section 352 is therefore, not the power of acquisition. The court rejected the submission on behalf of the appellant-Corporation that Section 352 enables the Municipal Commissioner to acquire land.

It was further observed that even though Section 363 of the Act provides for compensation, compulsory acquisition would still be unconstitutional if proper procedure is not established or followed before depriving a person of their right to property. To assume that constitutional protection gets constricted to the mandate of a fair compensation would be a disingenuous reading of the text and, shall we say, offensive to the egalitarian spirit of the Constitution.

The court laid down seven rights which are foundational components of a law that is in tune with Article 300A, and the absence of one of these or some of them would render the law susceptible to challenge. These are as follows-

1. Right to notice– A prior notice informing the bearer of the right that the State intends to deprive them of the right to property is a right in itself; a linear extension of the right to know embedded in Article 19(1)(a).
2. Right to be heard– Following the right to a meaningful and effective prior notice of acquisition, is the right of the property-bearer to communicate his objections and concerns to the authority acquiring the property. This right to be heard against the proposed acquisition must be meaningful and not a sham.
3. Right to a reasoned decision– That the authorities have heard and considered the objections is evidenced only through a reasoned order. It is incumbent upon the authority to take an informed decision and communicate the same to the objector.
4. Duty to acquire only for public purpose-That the acquisition must be for a public purpose is inherent and an important fetter on the discretion of the authorities to acquire. This requirement, which conditions the purpose of acquisition must stand to reason with the larger constitutional goals of a welfare state and distributive justice.
5. Right of restitution or fair compensation– A person’s right to hold and enjoy property is an integral part to the constitutional right under Article 300A. Deprivation or extinguishment of that right is permissible only upon restitution, be it in the form of monetary compensation, rehabilitation or other similar means. Compensation has always been considered to be an integral part of the process of acquisition.
6. Right to an efficient and expeditious process– The acquisition process is traumatic for more than one reason. The administrative delays in identifying the land, conducting the enquiry and evaluating the objections, leading to a final declaration, consume time and energy. Further, passing of the award, payment of compensation and taking over the possession are equally time consuming. It is necessary for the administration to be efficient in concluding the process and within a reasonable time. This obligation must necessarily form part of Article 300A.
7. Right of conclusion– Upon conclusion of process of acquisition and payment of compensation, the State takes possession of the property in normal circumstances. The culmination of an acquisition process is not in the payment of compensation, but also in taking over the actual physical possession of the land. If possession is not taken, acquisition is not complete. With the taking over of actual possession after the normal procedures of acquisition, the private holding is divested and the right, title and interest in the property, along-with possession is vested in the State. Without final vesting, the State’s, or its beneficiary’s right, title and interest in the property is inconclusive and causes lot of difficulties. The obligation to conclude and complete the process of acquisition is also part of Article 300A.

These sub-rights of procedure have been synchronously incorporated in laws concerning compulsory acquisition and are also recognised by our constitutional courts while reviewing administrative actions for compulsory acquisition of private property.

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[1] Hereinafter, referred to as the “Property”.

[2] Hereinafter, referred to as the “Act”.

[3] Constitution (Forty-Fourth Amendment) Act, 1978.