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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1966 OF 2013 
THE STATE OF KARNATAKA & ANR. …APPELLANT(S)
VERSUS 
B.R. MURALIDHAR & ORS.  …RESPONDENT(S) 
WITH
CIVIL APPEAL NO…….…….. OF 2022
(ARISING OUT OF S.L.P. (C) NO. 18942 OF 2013)
J U D G M E N T
A.M. KHANWILKAR, J.
1. In   these   appeals,  the   subject   matter  is   the  notification   dated
23.6.2005   bearing   No.   HD   34   KOMAME   2004,   Bangalore   issued
under  Section  17 of  the  Karnataka  Slum  Areas (Improvement  and
Clearance)   Act,   1973 1
  by   the   Housing   Department   of   the   State   of
Karnataka and the constitutional validity of Section 20 of the 1973
1  for short, “the 1973 Act”

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Act.     The   persons   aggrieved   by   the   issue   of   the   impugned
notification   dated   23.6.2005   had   filed   Writ   Petition   No.22611   of
2005 2
, Writ Petition No.20955 of 2005 3
 and Writ Petition No.21192
of   2005   (GM­Slum) 4
  before   the   High   Court   of   Karnataka   at
Bangalore 5
.  
2. The challenge to the stated notification was twofold.  The first
is   that   the   impugned   notification   was   issued   without   adequately
considering   the   objections   taken   by   the   writ   petitioners   and   in
excess of the power vested in the authority.  The second was about
the lapsing of the acquisition which was in furtherance of the show
cause notice issued under the 1973 Act on 14.10.1982.  It was the
case  of  the  writ  petitioners  that   by   efflux   of  time,  the  stated  show
cause   notice   (preliminary   notification)   had   worked   out   and   no
acquisition in furtherance thereof after 23 years could be permitted
in   law.    As   regards  the   validity   of   Section   20   of   the   1973   Act,   the
2  filed by B.R. Muralidhar, respondent No.1 in Civil Appeal No.1966 of 2013
3  filed by V. Balasubramanya @ Balender Venkta, respondent No.3 in Civil Appeal No.1966 of
2013
4  filed by M/s. Chandra Spinning and Weaving Mills Private Limited, respondent No.4 in Civil
Appeal   No.1966   of   2013   and   also   appellant   in   the   companion   appeal   i.e.,   Civil   Appeal
No……..of 2022 @ S.L.P. (C) No.18942 of 2013
5  for short, “the High Court”

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challenge   was   essentially   about   the   method   of   determining
payment   predicated   therein   to   pay   amount   at   the   rate   of   three
hundred   times   the   property   tax   for   acquiring   the   land   under
Section   17   of   the   1973   Act   and   not   fair   market   value   of   the
property.  Whereas, the amount offered on the basis of property tax
is   inevitably   an   illusory   amount,   including   in   the   teeth   of   the
legislation   made   by   the   Parliament,   namely   the   Land   Acquisition
Act, 1894 6
.
3. Learned   Single   Judge   of   the   High   Court   of   Karnataka   vide
common judgment and order dated 20.9.2007 declared Section 20
of the 1973 Act as  ultra vires .  He, however, rejected the plea of the
writ   petitioners   that   the   acquisition   pursuant   to   preliminary
notification dated 14.10.1982 had lapsed on the finding that there
was no such provision in the 1973 Act analogous to the provisions
of the 1894 Act.  Learned Single Judge also rejected the plea taken
by   the   writ   petitioners   that   their   objections   were   not   adequately
considered.     Having   so   held,   the   learned   Single   Judge   did   not   set
aside   the   impugned   notification   dated   23.6.2005.     As   learned
6  for short, “the 1894 Act”

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Single Judge took a view that Section 20 of the 1973 Act was  ultra
vires,   it   had   to   then   opine   that   vacuum   regarding   the   method   of
determination of amount to be paid to the land losers was created
and until a just method for determination of amount was replaced
by a law made by the State Legislature, the land losers ought to be
paid   amount   in   accordance   with   Sections   23   and   24   of   the   1894
Act.  
4. Against   the   decision   of   the   learned   Single   Judge,   cross
appeals were filed by the writ petitioners as well as by the State of
Karnataka.     Respondent   No.3   herein   (V.   Balasubramanya   @
Balender Venkta), however, later withdrew his appeal.   The appeal
filed   by   the   State   of   Karnataka   for   assailing   the   decision   of   the
learned   Single   Judge   declaring   Section   20   of   the   1973   Act   ultra
vires ,   came   to   be   disposed   of   vide   impugned   judgment   and   order
dated   28.8.2012   passed   in   Writ   Appeal   No.   918   of   2008   and   Writ
Appeal Nos. 1484­1485 of 2011 (GM­SLUM).  In view of withdrawal
of   the   cross   appeal   filed   by   the   writ   petitioner   (respondent   No.3
herein),   the   Division   Bench   was   not   required   to   examine   the
correctness of the finding  recorded by  the learned Single Judge in

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respect   of   plea   of   lapsing   of   acquisition   and   inadequate
consideration   of   the   objections   pressed   into   service   by   the   writ
petitioners   for   challenging   the   final   notification   dated   23.6.2005.
As   aforesaid,   the   Division   Bench   upheld   the   declaration   given   by
the   learned   Single   Judge   that   Section   20   of   the   1973   Act   was
unconstitutional.     However,   the   Division   Bench   modified   the
operative   direction   given   by   the   learned   Single   Judge   regarding
method   of   determining   the   amount   payable   to   the   land   losers   in
accordance with Sections 23 and 24 of the 1894 Act; and instead,
it   observed   that   such   a   direction   would   be   beyond   the   purview   of
the   Court’s   jurisdiction   and   that   it   is   always   open   to   the   State   to
bring suitable amendment to Section 20 of the 1973 Act.   Against
this decision of the Division Bench rendered in Writ Appeal No.918
of   2008,   the   State   of   Karnataka   has   filed   Civil   Appeal   No.1966   of
2013.  While granting leave, vide order dated 25.2.2013, this Court
has passed the following order:
“ SLP (C) No. 39936/2012
Leave granted.
Operation of the impugned order of the High Court
in   so   far   as   the   same   strikes   down   Section   20   of   the

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Karnataka   Slum   Areas   (Improvement   and   Clearance)
Act, 1973 [for short ‘the Act’] shall remain stayed, until
further orders from this Court. The petitioners shall be
free   to   determine   and   pay   compensation   to   the   land
owners   in   terms   of   Section   20   of   the   Act.   Any   such
determination   and   payment   shall   remain   subject   to
ultimate outcome of this appeal.”
5. Respondent No.4 (M/s. Chandra Spinning  and Weaving Mills
Private   Limited)   in   the   leading   appeal   filed   by   the   State   of
Karnataka,   as   aforesaid,   filed   an   independent   appeal   before   the
Division   Bench   being   Writ   Appeal   No.1492   of   2008   (GM­SLUM),
which came to be rejected on the ground of unexplained delay vide
impugned   judgment   and   order   dated   17.8.2012.     Against   the
decision   of   the   Division   Bench,   respondent   No.4   has   filed   cross
appeal   arising   from   S.L.P.   (C)   No.18942   of   2013,   essentially
questioning   the   decision   of   the   Division   Bench   of   the   High   Court
rejecting   the   cross   appeal   filed   by   the   Company   on   the   ground   of
laches and unexplained delay.
6. We   have   heard   Mr.   Nikhil   Goel,   learned   Additional   Advocate
General   for   the   State   of   Karnataka,   Mr.   Nikhil   Nayyar,   learned
senior   counsel   appearing   for   respondent   No.3   and   Mr.   Shyam
Divan, learned senior counsel appearing for respondent No.4.

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7. Diverse grounds have been raised to question the correctness
of  the   view   taken   by   the   High   Court.     The   moot   question  in   these
appeals   is   about   the   constitutional   validity   of   Section   20   of   the
1973   Act.     While   dealing   with   the   relief   claimed   by   the   writ
petitioners in that regard, the learned Single Judge opined that the
method   of   determining   the   amount   to   be   paid   to   the   land   losers
pursuant   to   acquisition   of   land   was   not   just   and   reasonable.
According   to   the   learned   Single   Judge,   it   ought   to   be   as   per   the
prevailing  market  value  of  the   land;  and  not   on  the   basis  of  three
hundred times the property tax payable in respect of such land, as
predicated   in   Section   20   of   the   1973   Act.     This   method   of
determining   the   amount   on   the   basis   of   property   tax   payable   in
respect   of   the   acquired   land,   would   result   in   offering   illusory
amount   to   the   land   loser.     Besides   being   illusory,   it   would   be
arbitrary   and   discriminatory   as   the   land   loser   would   be   denied   of
the market value of the land as is provided for in Sections 23 and
24   of   the   1894   Act.     To   buttress   this   opinion,   the   learned   Single
Judge   took   note   of   the   decision   of   this   Court   in   The   Deputy
Commissioner   and   Collector,   Kamrup   &   Ors.   vs.   Durganath

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Sarma 7
  and   proceed   to   dispose   of   the   challenge   to   Section   20   of
the 1973 Act in a cryptic manner in the following words:
“18. Thus there has to be equal protection of law.
19. I am also not in a position to give acceptability to
the   submissions   advanced   by   Sri   Nagarajappa,   the
learned   counsel   for   the   respondent   No.3.     Just
because   the   lands   are   acquired   for   discharging   the
State’s   social   service   obligations,   proper
compensation   to   the   land   losers   cannot   be   denied.
The   land   losers   cannot   be   fastened   with   the   social
service obligations of the State .
20. In exercise of its eminent domain when the State
acquired   the   property   for   public   use,   but   without   the
owner’s consent, the same has to be upon paying just
compensation.     The   compensation   payable   must   be   a
just equivalent of what the owner is deprived of.  What
principles   will   guide   the   determination   of   the   amount
payable   fall   within   the   legislative   province.     But   the
same   have   to   meet   the   basic   requirement   of   full
indemnification   of   the   expropriated   owner.     The
compensation   scheme   under   the   Slum   Areas   Act   does
not   provide   for   the   payment   of   compensation
equivalent   to   the   market   value   of   the   land.     The   true
valuation   of   the   land   involves   both   computation   and
judgment.
21.  For the aforesaid reasons, I strike down Section 20
of   the   Slum   Areas   Act   as   unconstitutional.     But   the
question   is,   what   should   follow   it.     If   the   lands   are
acquired   under   the   Slum   Areas   Act,   how   the
compensation   is   to   be   determined.     It   is   for   the
legislature   to   decide   and   prescribe   the   reasonable
method   of   determining   the   market   value   for   the
purpose   of   paying   compensation   to   the   land   losers.
However until such time that some legislative provision
replaces   Section   20,   no   vacuum   should   be   created.
During   the   transition   between   today,   the   date   of
7   AIR 1968 SC 394 (5­Judge Bench)

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striking down of Section 20 of the Slum Areas Act and
the   commencement   of   the   necessary   legislative
amendment, the determination of the market value has
to be in accordance with Section 23 and 24 of the Land
Acquisition Act, 1894, as the provisions of the said Act
have withstood the test of time.”
(emphasis supplied)
8. When   the   matter   travelled   before   the   Division   Bench   of   the
High  Court,  the manner   in  which  the appeals have been disposed
of, in particular the issue of constitutional validity of Section 20 of
the   1973   Act,   is   no   different.     The   Division   Bench   noted   the
arguments   of   the   parties   and   of   the   State   in   particular   that   the
provisions   of   the   1973   Act   enjoyed   immunity   in   terms   of   Article
31C of the Constitution of India.  While dealing with the argument,
the   Division   Bench   noted   that   the   1973   Act   came   into   force   on
29.10.1974 8
  much  before  the  44 th
  Amendment  to   the  Constitution
concerning  Article 31C  —  on  which  date the provisions  of Articles
19(1)(f) and 31 were in force.  Having said that, the Division Bench
then articulated the question to be answered in the appeals before
it as follows:
“Whether the Judgment in K.T. PLANTATION PRIVATE
LIMITED 9
  can   be   applied   and   based   on   the   same,
8  The 1973 Act received the assent of the President on 1.10.1974
9   K.T.   Plantation   Private   Limited   &   Anr.   vs.   State   of   Karnataka,   (2011)   9   SCC   1   (5­Judge
Bench)

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whether   the   order   of   the   learned   Single   Judge   is
required to the interfered with or not.”
9. For   answering   this   question,   the   Division   Bench   first
reproduced the paragraphs 189, 190 to 193, 198, 201 and 209 of
the   K.T.   Plantation   Private   Limited 10
  and   disposed   of   the
question under consideration in the following words:
“15.     From   the   reading   of   the   aforesaid   paragraphs   of
the   Judgment,   we   are   of   the   opinion   that   it   is   for   the
State   to   demonstrate   before   the   Court   that   amount
fixed u/s 20 of the Act is not illusory and it is just and
reasonable compensation.
16.     The   present   Act   cannot   get   any   immunity
under   Article   31­C   of   the   Constitution   of   India,
since the present Act has been enacted prior to the
44 th
 Amendment .  If the present Act had been enacted
after the 44 th
 Amendment to the Constitution, we are of
the   view   that   the   Judgment   in   K.T.   PLANTATION
PRIVATE LIMITED Vs. STATE OF KARNATAKA 11
  would
squarely   applicable.     As   stated   supra,   the   present   Act
is   enacted   prior   to   the   44 th
  amendment.     In   such
circumstances, it is for the State that the amount fixed
u/s 20 of the Act is the market value and it is clear as
no land looser can be deprived of his property without
paying   the   reasonable   compensation.     But
unfortunately,   in   this   case,   State   has   not   made   any
efforts   before   us   to   show   that   three   hundred   times   of
the assessment fixed by the Municipality would be the
reasonable   compensation   or   very   near   to   the   market
value.   In such circumstances, we are of the view  that
if   the   learned  Single  Judge  has  held  Sec.20  of   the  Act
as   unconstitutional,   we   cannot   lightly   interfere   with
the same.”
(emphasis supplied)
10  supra at Footnote No.9
11  supra at Footnote No.9

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This is the entire discussion regarding the validity of Section 20 of
the 1973 Act.
10. In   the   appeals   before   this   Court,   both   sides   have   extensively
argued   all   aspects   regarding   issue   of   constitutional   validity   of
Section   20   of  the   1973   Act.   For   the   nature   of  final   order   that   we
propose   to   pass,   it   is   not   necessary   to   dilate   on   the   rival
submissions in  extenso.   
11. According   to   the   State,   the   1973   Act   and   the   provisions
therein, in particular Section 20, it ought to enjoy the protection of
Article 31C of the Constitution.   The fact that the 44 th
  Amendment
to the Constitution came into force with effect from 20.6.1979 and
the   1973   Act   came   into   force   much   before   that,   would   make   no
difference.  For, even at that relevant time Article 31C was available
as   it  had   come  into   effect   on   20.4.1972  to   the   extent,   it  has   been
upheld   by   the   Constitution   Bench   of   this   Court   in   His   Holiness
Kesavananda   Bharati   Sripadagalvaru   vs.   State   of   Kerala   &
Anr. 12
.     In   other   words,   the   expanse   of   Article   31C,   as   upheld   by
this   Court,   at   the   time   the   1973   Act   came   into   force   was   still
12  (1973) 4 SCC 225 (13­Judge Bench)

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available   to   give   protection   and   immunity   from   challenge   to   the
stated Act being  referrable to the tenet  enunciated in Article 39(b)
of the Constitution.   Hence, according to the appellant it was open
to   the   State   Legislature   to   prescribe   different   method   for
determination of amount payable to the land loser under the 1973
Act.  To buttress this submission, reliance has been placed also on
The State of Karnataka & Anr., etc. vs. Ranganatha Reddy &
Anr.,   etc.,   etc. 13
;   Maharao   Sahib   Shri   Bhim   Singhji   vs.   Union
of India & Ors. 14
;   Rajiv Sarin & Anr. vs. State of Uttarakhand
&   Ors. 15
;   and   K.T.   Plantation   Private   Limited 16
.     For   that,
learned   counsel   for   the   State   also   invited   our   attention   to   the
Statement   of   Objects   and   Reasons,   Preamble,   and   the   scheme   of
the different provisions of the 1973 Act, including Section 17 which
is to rehabilitate the slum dwellers from their existing squalid living
conditions   in   the   slum   area,   so   as   to   best   subserve   the   common
good by redeveloping the slum area or slum clearance area, as the
13   AIR 1978 SC 215 : (1977) 4 SCC 471 (7­Judge Bench)
14   (1981) 1 SCC 166 (5­Judge Bench)
15   (2011) 8 SCC 708 (5­Judge Bench)
16  supra at Footnote No.9

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case may be.  Such rehabilitation of slum dwellers tantamounts to
distribution   of   the   material   resources   of   the   community   after   the
vesting   of   the   land   in   terms   of   Section   18   of   the   1973   Act,   in   the
State   free   from   all   encumbrances.     In   short,   the   provisions   of   the
1973   Act   are   referrable   to   the   expanse   of   Article   39(b)   of   the
Constitution; and Section 20 is only a provision (means) to achieve
that   goal   by   following   method   to   compensate   the   land   loser   —   by
offering amount of three hundred times the property tax payable in
respect of such land.   Reliance is also placed on  the exposition in
State of Maharashtra & Anr. vs. Basantibai Mohanlal Khetan
&   Ors. 17
  which   had   dealt   with   the   question   of   validity   of   the
Maharashtra Housing and Area Development Act, 1976 18
.  This Act
was   enacted   by   the   Maharashtra   State   Legislature   to   consolidate
the   Bombay   Housing   Board   Act,   1948,   in   the   Bombay   and
Hyderabad areas of the State, the Madhya Pradesh Housing Board
Act, 1950, the Bombay Building Repairs and Reconstruction Board
Act,   1969   and   “the   Maharashtra   Slum   Improvement   Board   Act,
1973”.     This   Court   upheld   the   validity   of   the   1976   Act   also   in
17  (1986) 2 SCC 516 (2­Judge Bench)
18  for short, “the 1976 Act”

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reference   to   Article   31C   of   the   Constitution   as   it   existed   at   the
relevant   time   (validated   by   the   decision   in   His   Holiness
Kesavananda   Bharati   Sripadagalvaru 19
),   as   can   be   discerned
from   the   discussion   in   paragraphs   13   to   15   of   the   reported
decision.     The   State   would   also   argue   that   while   considering   the
validity   of   Section   20   of   the   1973   Act,   it   may   be   necessary   to
consider   the   question   as   to   whether   the   expression   “material
resources   of   the   community”   would   include   private   property   and
this   question   has   already   been   referred   to   a   larger   Bench   (nine
Judges)   in   Property   Owners’   Association   &   Ors.   vs.   State   of
Maharashtra   &   Ors. 20
,   which   is   pending   consideration.
Therefore, these matters be tagged along with those cases.  
12. Further,   in   response   to   the   argument   canvassed   across   the
Bar by the learned counsel for the writ petitioners for the first time
before   this   Court   in   reference   to   the   purport   of   Section   17   of   the
1973   Act,   it   is   urged   by   the   State   that   the   same   ought   not   to   be
countenanced   without   there   being   any   pleading   in   that   regard
19  supra at Footnote No.12
20  (2013) 7 SCC 522 (7­Judge Bench)

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before   the   High   Court.     The   writ   petitioners,   however,   had
submitted that the land acquired in terms of impugned notification
was neither declared as a slum area under Section 3 nor as a slum
clearance   area   under   Section   11   of   the   1973   Act   and   as   such,   it
could not be acquired in terms of Section 17.  
13. The   learned   counsel   appearing   for   the   writ   petitioners   would
further   contend   that   the   issue   regarding   expanse   of   expression
“material resources of the community”, will not arise in the present
case.     In   that,   the   conclusion   recorded   by   the   High   Court
is that no protection of Article 31C is available to the provisions of
the   1973   Act,   in   particular   Section   20.     That   view   taken   by   the
High Court is unexceptionable.  At the same time, it has been fairly
accepted by respondent No.3, including in the written submissions
that the issue as to whether expression “material resources of the
community”   would   include   private   owned   resources,   is   pending
consideration   before   a   nine­Judge   Bench   of   this   Court   and   if   the
Court so intends, it may take up the matter for hearing along with
pending   cases   before   the   nine­Judge   Bench.     Learned   counsel   for

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the   writ   petitioners   have   filed   exhaustive   written   submissions   in
addition to oral argument canvassed before this Court.
14. We   are   of   the   considered   opinion   that   the   High   Court   has
dealt with the question of validity of Section 20 in a casual manner.
That   cannot   be   countenanced   inasmuch   as   the   Constitutional
Court   for   answering   the   assail   on   this   count,   in   the   first   place,
need   to   examine   the   scheme   of   the   1973   Act,   its   objects   and
purposes   as   also   the   question:   whether   the   payment   of   amount
specified  as three hundred  times the property  tax  payable in respect
of   such   land   on   the   date   of   publication   would   be   a   permissible
method  of   determination   of  the  amount   or  is   per  se   unjust,  unfair
or   unreasonable?     Concededly,   there   can   be   different   methods   for
valuation of property, including the method of capitalisation value.
Further,   it   has   to   be   considered   as   to   whether   it   is   an   objective
method   and   not   illusory   (as   it   is   the   case   of   the   State   that   the
amount   determined   under   Section   20   is   quite   substantial,   i.e.,
Rs.3.52   crore),   in   the   present   case.     Additionally,   if   the   1973   Act
and   the   provisions   are   ascribable   to   the   objective   predicated   in
Article   39(b)   of   the   Constitution,   then   it   would   get   protection   or

17
immunity   from   challenge   in   terms   of   Article   14,   19   or   31   of   the
Constitution.     Furthermore,   even   if   the   High   Court   was   right   in
observing   that   the   1973   Act   came   into   force   prior   to   coming   into
force of 44 th
 Amendment to the Constitution on 20.6.1979, it would
make   no   difference   as   Article   31C   was   already   in  force   with  effect
from 20.4.1972 to the extent it has been validated by this Court in
His Holiness Kesavananda Bharati Sripadagalvaru 21
.
15. It   is   indisputable   that   the   State   had   defended   Section   20   of
the   1973   Act   on   the   principle   expounded   in   Article   31C   of   the
Constitution   as   can   be   discerned   from   paragraph   19   of   the
judgment   of   the   learned   Single   Judge   and   also   of   the   Division
Bench, in particular paragraph 16 reproduced hitherto.
16. Suffice it to observe that the High Court disposed of the assail
to   the   validity   of   Section   20   of   the   1973   Act   in   a   cryptic   manner
and   more   so   without   analysing   all   relevant   aspects   needed   to   be
considered by a Constitutional Court to declare provisions enacted
by the State Legislature as  ultra vires .  For, there is a presumption
21  supra at Footnote No.12

18
about   the   constitutionality   of   the   law   made   by   the
Parliament/State Legislature.  
17. It   was   also   urged   by   the   learned   counsel   for   the   writ
petitioners   that   the   State   had   failed   to   explain   and   justify   the
method   of   determining   the   value   of   the   land   which   ought   to   be
equivalent   to   fair   market   value   and   not   illusory   amount.     As
regards   deficiency   in   the   pleadings   of   the   parties,   the   same
argument   can   be   used   against   both   sides.     We   say   so   because
constitutional   validity   has   been   raised   obviously   as   an   alternative
plea   in   the   writ   petition   being   the   last   ground   of   challenge   in
paragraphs 29 and 30 of the Writ Petition No.21192 of 2005 (GM­
SLUM) 22
 .  The same reads thus:
“ 29. Section   20   of   the   Act   provides   for   payment   of
amount   at   the   rate   of   300   times   the   property   tax
payable   in   respect   of   the   land   acquired.     Entry   42   of
List   III,   7 th
  Schedule   to   the   Constitution   provides   for
acquisition   and   requisition   of   property.     By   reason   of
the fact that  the said subject is in the concurrent list,
both   Centre   and   the   States   can   make   laws.     The
Parliament   having   enacted   the   Land   Acquisition   Act
has evinced interest on occupy the entire field relating
to acquisition including payment  of compensation and
the   field   is   therefore   completely   covered.     The   Land
Acquisition   Act   provides   for   payment   of   compensation
at the market value of the property.   The Act, which is
later in point of time, though has received the assent of
22   See  Footnote No.4

19
the   President,   Section   20   in   so   far   as   it   provides   for
payment of amount 300 times the property tax payable
on   such   land   which   methodology   is   different   from   the
methodology   provided   for   under   the   Land   Acquisition
Act   is   therefore   beyond   the   competence   of   the   State
Legislature   and   is   therefore   liable   to   be   declared   as
void as being  in contravention  of the Land Acquisition
Act, 1894 read with Article 300A of the Constitution of
India.
30. Assuming, but not conceding that the impugned
action of the Government in acquiring lands is vitiated,
even  so  the  Government  is  liable  to pay  compensation
to   the   petitioner   at   the   market   value   of   the   property
and in accordance with the principles laid down under
the   Land   Acquisition   Act,   1894   and   not   at   300   times
the property as provided under Section 20 of the Act.”
18. As the focus before the High Court was essentially on the plea
that   the   acquisition   proceedings   had   lapsed,   even   the   State   in   its
response filed before the High Court merely stated thus:
“10. …The compensation payable as per Section 20 of
the Act is 300 times of the assessment is correct.   The
Act   and   its   provisions   are   for   the   betterment   of   the
poor   and   downtrodden   slum   dwellers   as   a   social
obligation.     The   compensation   payable   for   such   land
acquired   under   Section   17   of   the   Act   is   only   as   per
Section 20 of the Act.   The respondents are having the
obligation of providing shelter to several lakhs of slum
dwellers  and  the  respondents   cannot   acquire  lands   as
per   Land   Acquisition   Act   and   pay   huge   compensation
as   per   the   provisions   of   the   said   act   i.e.,   as   per   the
market value.  Hence, the provisions of KSA (I & C) Act,
1973 are applied to acquire the lands as per Section 17
and pay the compensation as per Section 20 of the Act.
Hence,  Article  300A  of  the  Constitution of  India   is  not
violated.”

20
19. As aforesaid, in addition to the challenge to Section 20 of the
1973 Act being unconstitutional, during the course of argument for
the first time and then restated in the written submission, question
regarding the applicability of Section 17 of the 1973 Act to the fact
situation of the present case has been raised.  There is no pleading
in the writ petitions in that regard.
20. Be that as it may, the High Court had held that in absence of
an   express   provision   regarding   lapsing   of   acquisition   in   the   1973
Act   unlike   the   1894   or   2013   Act,   it   is   not   open   to   grant   relief   of
setting aside impugned notification dated 23.6.2005 on account of
efflux of time.  In that, show cause notice (preliminary notification)
is ordinarily issued when the competent authority is satisfied that
for the purpose of executing any work of improvement in relation to
any “slum area” or any building in such area or for the purpose of
re­developing   any   “slum   clearance   area”,   or   for   the   purpose   of
rehabilitating   slum   dwellers,   it   is   necessary   to   acquire   any   land
and it has been so decided in pursuance of the said provision.  The
need to develop the slum area and to rehabilitate the slum dwellers

21
is   a   continuing   obligation   of   the   State   until   it   is   fully   discharged.
The fact that there is some time gap between the preliminary notice
to   show   cause   why   the   land   in   question   should   not   be   acquired
and in issuance of the final notification under Section 17, by itself,
cannot be a ground to declare the process initiated vide valid show
cause notice as having lapsed by efflux of time.  
20A.     It   is,   however,   urged   by   the   writ   petitioners   that   the   stated
power  to  effectuate  a   purpose   has  to  be  exercised   in  a   reasonable
time frame.  The exercise of power in a reasonable manner inheres
the concept of its exercise within a reasonable time. What would be
the length of reasonable time must be then determined by the facts
of   the   case   in   the   context   of   scheme   of   the   Act   and   the   nature   of
the power which is to be exercised to prevent miscarriage of justice,
misuse or abuse of power.  Even this plea will have to be examined
by the High Court in the first place.  
21. After cogitating over the matter and in the fact situation of the
present   case,   we   are   of   the   considered   opinion   that   it   would   be
appropriate   to   relegate   the   parties   before   the   High   Court   for

22
reconsideration of the writ petitions afresh including in relation to
the question of constitutional validity of Section 20 of the 1973 Act.
In   the   remanded   proceedings,   it   would   then   be   open   to   the   writ
petitioners to amend the writ petition to raise a new plea regarding
inapplicability   of   Section   17   to   the   land   in   question   —   which   had
not   been   declared   as   slum   area   or   slum   clearance   area.     That
question, if answered in favour of the writ petitioners, would go to
the   root   of   the   matter   and   it   may   then   not   be   necessary   to   even
examine   the   question   regarding   the   constitutional   validity   of
Section 20 of the 1973 Act.
22. As   a   result,   to   do   substantial   justice   to   both   the   parties,   we
deem it appropriate to relegate the parties before the learned Single
Judge   of   the   High   Court   for   reconsideration   of   the   writ   petitions
afresh on its own merits and in accordance with law with liberty to
both   parties   to   amend   the   writ   petition   or   file   further   better
affidavit   to   defend   the   provisions   in   question   and   the   action   of
acquisition, as the case may be.   The parties may do so within six
weeks from  today.   The matter after  remand to proceed before the

23
learned   Single   Judge   of   the   High   Court   in   the   first   week   of
September 2022 for hearing.  
23. We   need   to   clarify   that   it   will   be   open   to   the   learned   Single
Judge   to   await   the   decision   of   the   larger   Bench   of   this   Court   in
reference   made   in   terms   of   Property   Owners’   Association 23
,   in
the   event   it   becomes   necessary   to   deal   with   the   argument   of   the
expanse   of   expression   “material   resources   of   the   community”   in
Article   39(b)   of   the   Constitution   and   its   applicability   to   the
impugned provision of the 1973 Act.  Ordinarily, to observe judicial
propriety   we   would   have   opted   to   keep   these   appeals   pending
before  this   Court   and   to   be   heard   along   with   the   connected  cases
before the larger Bench of this Court.  However, in that eventuality,
the   parties   may   have   to   amend   their   pleadings,   if   they   intend   to
urge further grounds of challenge or by way of defence, as the case
may   be.     That   exercise,   therefore,   can   be   undertaken   in   the   first
instance   before   the   High   Court,   where   both   sides   will   get   full
opportunity to plead and argue their case.
23  supra at Footnote No.20

24
24. In   view   of   the   above,   we   set   aside   the   impugned   judgment(s)
and order(s) dated 17.8.2012 and 28.8.2012 of the Division Bench
of   the   High   Court   as   well   as   the   common   judgment   dated
20.9.2007   rendered   by   the   learned   Single   Judge   and   restore   the
Writ Petition No.22611 of 2005 24
, Writ Petition No.20955 of 2005 25
and   Writ   Petition   No.21192  of   2005 26
  to   the  file  of   the   High   Court
for   being   proceeded   afresh   in   accordance   with   law   after   giving
liberty to the parties to amend the pleadings or file better affidavit
to  defend the  impugned provisions  and  the action  of the  State, as
the   case   may   be.     As   the   High   Court’s   impugned   decisions   have
been   set   aside,   it   must   follow   that   the   declaration   issued   by   the
High   Court   regarding   Section   20   of   the   1973   Act   being   ultra   vires
stands   effaced   and   that   provision   be   given   full   effect   until   further
orders of the High Court in the remanded petitions. 
25. All   contentions   available   to   both   sides   are   left   open.     The
matter   may   appear   before   the   learned   Single   Judge   of   the   High
Court of Karnataka in the first week of September 2022.  The High
24   See  Footnote No.2
25   See  Footnote No.3
26   See  Footnote No.4

25
Court   may   endeavour   to   dispose   of   the   petitions   expeditiously,   in
accordance with law.
The appeals are disposed of accordingly.  No order as to costs.
Pending application(s), if any, are also disposed of.
……………………………J.
(A.M. Khanwilkar)
……………………………J.
  (Sanjiv Khanna)
New Delhi;
July 28, 2022.