The Bench of Justice AM Khanwilkar and Justice Sanjiv Khanna has observed, "The need to develop the slum area and to rehabilitate the slum dwellers is a continuing obligation of the State until it is fully discharged."

In this case, the subject matter was the notification issued by the Housing Department of the State of Karnataka under Section 17 of the Karnataka Slum Areas (Improvement and Clearance) Act, 1973 (1973 Act) and the constitutional validity of Section 20 of the said Act.

The challenge to the said notification was two-fold. The first was that the 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.

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 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.

The Single Judge of the High Court of Karnataka 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 had lapsed on the finding that there was no such provision in the 1973 Act analogous to the provisions of the 1894 Act.

The Division Bench upheld the declaration given by the Single Judge that Section 20 of the 1973 Act was unconstitutional. However, the Division Bench modified the operative direction given by the 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.

Nikhil Goel, Additional Advocate General appeared for the State of Karnataka, Senior Advocates Nikhil Nayyar and Shyam Divan, appeared for respondent No.3 and 4.

The Court noted that the moot question in the appeals was about the constitutional validity of Section 20 of the 1973 Act.

The Court observed that the High Court had dealt with the question of validity of Section 20 in a casual manner.

The Court held thus "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 immunity from challenge in terms of Article 14, 19 or 31 of the Constitution."

The Court further observed that "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 about the constitutionality of the law made by the Parliament/State Legislature."

The Court found it appropriate to relegate the parties before the High Court for reconsideration of the writ petitions afresh including in relation to the question of constitutional validity of Section 20 of the 1973 Act with liberty to both parties to amend the writ petition or file further better affidavit.

Therefore the Court set aside the order of the Division Bench of the High Court and the common judgment rendered by the Single Judge.

"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.", the Court held before parting with the Judgment.

Cause Title- State of Karnataka & Anr. v. B.R. Muralidhar & Ors.

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