Sections 305, 306 and 387 of the Madhya Pradesh Municipal Corporation Act, 1956 are reasonable and consistent with Article 300-A of the Constitution

Supreme Court: Stating that sections 305, 306 and 387 of the Madhya Pradesh Municipal Corporation Act, 1956 are quite reasonable, the Court said that reasonable compensation is payable by the Corporation for building or part thereof excluding the land under proviso to section 305(1) and compensation for inclusion of land in public street is payable under section 306(3) of the Act. Rejecting the contention that no time period was prescribed for payment of compensation, the Court said that law envisages speedy action without unreasonable delay and that is what is expected of the concerned authorities, in respect of the obligation imposed on them to be discharged. Due to this, the provision cannot be struck down as arbitrary nor can it be said to be confiscatory in nature. The Court was hearing the matter relating to ‘Bus Rapid Transit System Corridor’ where the land was being acquired for widening of roads.

The Court further explained that after the abolition of ‘the right to property’ as a fundamental right, the provisions are quite consistent with Article 300A of the Constitution and reasonable compensation is paid under sections 305 and 306 which if not acceptable, the remedy of arbitration and approaching the District Court under section 387 is available to seek the compensation which has to be on the basis of procedure prescribed in the Land Acquisition Act. Article 300A of the Constitution enables the State to put restrictions on the right by law but the same should not be arbitrary or excessive or beyond what is required in public interest. The imposition of restriction must not be disproportionate to a situation or statute. Legislation providing for deprivation of property under Article 300A must be just, fair and reasonable. Thus, it cannot be said that illusory compensation is provided under section 306 read with section 387 of the Act.

The bench of Jagdish Singh Khehar and Arun Mishra, JJ said that there is restriction put on the ownership rights and in the area no construction can be raised derogatory to the development plan/master plan. When the property vests is clearly culled out in section 305, however the property is held by owner once a development plan is prepared, subject to that use and it is not necessary to acquire the land for the purposes mentioned under section 305. Section 305 is otherwise also a reasonable method of acquisition of the property and it follows a detailed procedure for preparation of development plan/master plan or a town improvement scheme, as the case may be, which involves adjudicatory process and once action is taken under section 305, reasonable compensation follows, special procedure as prescribed, is a complete Code in itself and even if a person is not satisfied, he can claim adjudication under section 387 of the Act where the procedure of the Land Acquisition Act, 1894 is applicable.

The Court also said that development plan itself is binding and has to be implemented by the Corporation not only under the provisions of section 292 but also under the provisions of section 66(1)(y) of the Act of 1956 which mandates a duty upon the Corporation for fulfilling any obligation imposed by the Act or under any other law for the time being in force. [Ravindra Ramchandra Waghmare v. Indore Municipal Corporation, 2016 SCC OnLine SC 1405, decided on 29.11.2016]

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