# • • MUNICIPAL CORPORATION, INDORE v. SHRIK.N.PALSHIKAR,INDORE

- **Citation:** [1969] 2 S.C.R. 13
- **Court:** Supreme Court of India
- **Decided:** 1968-09-06
- **Case number:** Civil Appeals Nos. 1137 and 1138 of 1965
- **Bench:** S. M. Sikri, R. S. Bachawat, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/municipal-corporation-indore-v-shrik-n-palshikar-indore-4559
- **Pages:** 8

## Headnote

c
D
E
F
Madhya Bharat Municipal Corporation Act, 1956, ss. 305, 387, 392--
APplication for fixation of compensation for land acquired
lry
municipality--Soladum whether payable in
addition
to compensation-High
Court in revision whether can consider question of sufficiency of compe,..
sation as fixed by District Judge-Municipality whether can withdraw from
acquisition proceedings.
The appellant corporation in accordance with its
Road Widening
Scheme sought to acquire some of the land belonging to the respondent.
The respondent was not satisfied with the compensation offered by the
appellant or awarded by the arbitrators, and under s. 387(4) and (5) of
the Madhya Bharat Municipal Corporation Act, 1956 he filed an application for fixation of compensation in the Court of the District Judge,
Indore.
The appellant
in its reply
submitted
that the compensation
awarded by the arbitrator was too low.
The Additional District Judge
rejected an application filed by the appellant for withdrawing its claim
over a portion of the land in question. He fixed compensation for the
land at the rate of Rs. 30/- per sq. 'ft. with interest at 6% per annum
from the date of the delivery of the possession, and also awarded a solatium of 15 % to the respondent. The revision application filed against the
judgment of the Additional District Judge by the Corporation was dismissed by the High Court. On the question of compensation the High Court
held that it could not interfere with the order of the Additional District
Judge as he had committed no irregularity in the exercise df his jurisdiction.
By special leave the Corporation appealed to this Court. The questions that fell for consideration were ( i) whether the Corporation was
entitled under law to withdraw from acquisition proceedings, (ii) whether
the respondent was entitled under the Act to a solatium in addition to the
compensation, (iii) whether the High Court was right in refusing to go
into the~ question of sufficiency of compensation.
HELD : (i) There was no provision in the Act for enabling the
Corporation to withdraw from the acquisition proceedings. 1n fact there
is automatic vesting df land in the Corporation under s. 305 once the
requisite conditions were satisfied. [17 B-C]
(ii) The Additional District Judge was right in awarding 15% solatium. [19 E)
The Borough Municipality of Ahmedabad v. 'Javendra Vajubhai Divatis,
I.LR. [1937) Born. 632, approved and applied.
(iii) The High Court could not in a revision under s. 392 go into
q_uestions of fact and determine the amount of compensation and it was
nght in declining to go into the question.
Even if the powers under
s. 392 are wider than those under s. 115 of the Code of Civil Procedure
H
they do not extend to determining questions of fact. [19 G)

## Text

•
•
MUNICIPAL CORPORATION, INDORE
v.
SHRIK.N.PALSHIKAR,INDORE
September 6, 1968
B
[S. M. SIKRI, R. S. BACHAWAT AND K. S. HEGDE, JJ.]
c
D
E
F
Madhya Bharat Municipal Corporation Act, 1956, ss. 305, 387, 392--
APplication for fixation of compensation for land acquired
lry
municipality--Soladum whether payable in
addition
to compensation-High
Court in revision whether can consider question of sufficiency of compe,..
sation as fixed by District Judge-Municipality whether can withdraw from
acquisition proceedings.
The appellant corporation in accordance with its
Road Widening
Scheme sought to acquire some of the land belonging to the respondent.
The respondent was not satisfied with the compensation offered by the
appellant or awarded by the arbitrators, and under s. 387(4) and (5) of
the Madhya Bharat Municipal Corporation Act, 1956 he filed an application for fixation of compensation in the Court of the District Judge,
Indore.
The appellant
in its reply
submitted
that the compensation
awarded by the arbitrator was too low.
The Additional District Judge
rejected an application filed by the appellant for withdrawing its claim
over a portion of the land in question. He fixed compensation for the
land at the rate of Rs. 30/- per sq. 'ft. with interest at 6% per annum
from the date of the delivery of the possession, and also awarded a solatium of 15 % to the respondent. The revision application filed against the
judgment of the Additional District Judge by the Corporation was dismissed by the High Court. On the question of compensation the High Court
held that it could not interfere with the order of the Additional District
Judge as he had committed no irregularity in the exercise df his jurisdiction.
By special leave the Corporation appealed to this Court. The questions that fell for consideration were ( i) whether the Corporation was
entitled under law to withdraw from acquisition proceedings, (ii) whether
the respondent was entitled under the Act to a solatium in addition to the
compensation, (iii) whether the High Court was right in refusing to go
into the~ question of sufficiency of compensation.
HELD : (i) There was no provision in the Act for enabling the
Corporation to withdraw from the acquisition proceedings. 1n fact there
is automatic vesting df land in the Corporation under s. 305 once the
requisite conditions were satisfied. [17 B-C]
(ii) The Additional District Judge was right in awarding 15% solatium. [19 E)
The Borough Municipality of Ahmedabad v. 'Javendra Vajubhai Divatis,
I.LR. [1937) Born. 632, approved and applied.
(iii) The High Court could not in a revision under s. 392 go into
q_uestions of fact and determine the amount of compensation and it was
nght in declining to go into the question.
Even if the powers under
s. 392 are wider than those under s. 115 of the Code of Civil Procedure
H
they do not extend to determining questions of fact. [19 G)
CIVIL APPELLATE JURISDICTION :
Civil Appeals Nos. 1137
and 1138 of 1965.
13
14
SUPREME COURT REPORTS
[1969] 2 S.C.R.
Appeals by special leave from the judgment and orders dated
O~tober 12, 1962 and December 19, 1962 of the Madhya Pradesh
High Court, Indore Bench in Civil Revision Nos. 195 and 497 of
1962 respectively.
B. P. Jhanjharia, and P. C. Bhartari, for the appellant (in
both the appeals) .
P. K. Saksena and A. G. Ratnaparkhi, for the respondent (in
both the appeals).
The Judgment of the Court was delivered by
Sikri, J. These appeals by special leave are directed against
the judgment oi' the Madhya Pradesh High Court in two Civil
Revisions, Civil Revision No. 195 of 1962 and Civil Revision No.
497 of 1962. These revisions came to be filed in the High Court
in the following circumstances.
On January 21, 1961, the respondent K. N.
Palshikarhereinafter referred to as the applicant-filed an application under
ss. 387 ( 4) and ( 5) of the Madhya Bharat Municipal Corporation
Act, 19 5 6-hereinafter referred to as the Act-in the Court of
District Judge, Indore.
He alleged that the Municipal Corporation by its memo No. 816 dated October 30, 1959, had informed
him that in accordance with the Road Widening Scheme a set
back of total area of 1455.1 sq. ft. had been cut down from his
land comprised in House No. 1 (New No. 38) on Road No. l,
Choti Gwaltoli No. 1, Indore, and that the Municipal Corporation
proposed to give him compensation only at the rate of Rs. 2-50
per sq.ft. which was not acceptable to him. He further alleged that
the arbitrators appointed by the parties had given an award which
was also not acceptable to him. The arbitrators had given
Rs. 50/- per sq. ft. while he demanded Rs. 145/- per sq. ft. The
Municipal Corporation in its reply dated February 28, 1961, submitted that the compensation given by the arbitrators was very
much in excess of the actual price of the land and prayed that the
application be dismissed.
Various issues were framed by the Additional District Judge,
Indore, but they were all directed to determining the fair amount
of compensation including interest.
The Municipal Corporation also applied on January 19, 1961,
under s. 387 ( 4) of the Act praying that the price of the land be
settled as per s. 387 ( 4). In para 10 of this application it was
alleged that the memo regarding set back was issued on October
30, 1959, and therefore the price is to be settled at the rates prevailing on that date.
In his reply to this application the applicant, Palshikar,
accepted para 10 of the application.
A
B
c
D
E
F
•
G
H
A
B
c
D
E
F
•
G
H
MUNICIPAL CORP, v. PALSHIKAR (Sikri, /.)
15
The Additional District Judge on February 6, 1962, disposed
of both the applications by one order and he fixed the compensation of land in question at the rate of Rs. 30/- per sq. ft. with
interest at 6% per annum from the date of the delivery of the
possession.
He further ordered that the applicant shall be entitled
to 15 % so la ti um as decided by the award.
He also valued the
structure.
During the pendency of these applications
the Municipal
Corporation applied on August 1, 1961, to the Additional District
Judge for withdrawing the claim of the Corporation over a portion
of the land in question.
On February 2, 1962, the Additional
District Judge passed the following order
"The N.A. applied that the Improvement Board is
going to acquire portion of the land in question and
hence the N .A. shall not be compelled to acquire this
land.
At p~esent there is nothing to show that the
Improvement Trust is going to acquire the land.
Moreover, I have to fix the compensation in the case.
The
N.A. may or may not acquire the land at its own risk.
The application is rejected."
Against the common order of the Additional District Judge
three revisions, two by the Municipal Corporation and one by the
applicant, were filed.
Civil Revision No. 195 of 1962 was filed
by the Municipal Corporation alleging
that the compensation
awarded by the learned Additional District Judge was excessive
and praying that fair compensation be fixed.
The High Court held that the Additional District Judge had
given opportunity to the parties to lead evidence and determined
the amount of compensation after hearing the parties and in these
circumstances it could not be said that he was guilty of committing
irregularity in the exercise of his jurisdiction, even assuming that
the amount determined as payable was either too high or too low .
The High Court then dealt with the point raised by the learned
counsel for the Municipal Corporation that the Additional
District Judge had refused to permit the Corporation to withdraw
the acquisition proceedings anc! had thus refused to exercise jurisdiction.
The High Court held that in a proceeding under s.
387( 4) of the Act there was no provision to enable the Corporation to withdraw from any setback already given and no statutory
provision had been pointed out entitling the Court to permit the
Corporation to withdraw. In the result the High Court dismissed
the revision petition.
In the meantime the applicant filed an application under s. 388
of the Act for execution of the order of the Additional District
Judge dated February 6, 1962. The Corporation objected to the
16
SUPREME COURT REPORTS
[ 1969) 2 S.C.R.
execution on the ground that the applicant had not given possession of the disputed land to the Corporation nor had he executed
a sale deed with respect to it in its favour.
The applicant controverted these objections and submitted that demand of possession prior to deposit of the decretal amount was illegal and contrary to s. 3 87 ( 5) of the Act.
He further submitted that under
s. 305 of the Act the vesting of the property occurs immediately
when the rebuilding starts and, therefore, there is no necessity of
executing the sale deed.
The Corporation again filed an application for permission to withdraw from the acquisition proceedings
and in the alternative it was prayed that the money deposited in
Court against this execution case may be given to the applicant
only when he gives vacant possession of the land covered by the
set back scheme.
The Additional District Judge by his order dated October 31,
1962, repelled these contentions and allowed the applicant to
withdraw the money deposited by the Corporation. Against this
order the Corporation filed Civil Revision No. 497 of 1962 to the
High Court.
The High Court by its judgment dated December
19, 1962, held that "the terms of section 387(5) indicate that
taking of possession of the property has to follow the payment of
the amount of compensation determined by the Court.
In view
of the terms of this provision it is not correct to contend that the
opponent (applicant) ought first to secure vacant possession of
the property and then alone can claim to withdraw the compensation amount." The High Court noted in the order that the
applicant was willing to give such possession as he himself could.
This is the second judgment of the High Court against which the
Coilrt gave leave to appeal.
The learned counsel for the Corporation contends :
( l) that approval of the site plan will not divest
the applicant of the ownership and, therefore, it was
possible for the Corporation to withdraw from
the
acquisition proceedings;
(2) when the projecting portion is the main building no compensation is payable unless the rebuilding
starts and the portion is cleared;
(3) that the Act provides only for compensation
and not for solatium; and
( 4) that the amount of compensation is excessive.
The learned counsel for the applicant, Palshikar, made a
statement before us that he was willing to deposit Rs. 6,000/- in
the District Court within four months in respect of the area which
is in possession of the tenants and that he will be entitled to withA
B
c
D
E
F
G
H
A
B
c
'
E
•
MUNICIPAL CORP, V. PALSHIKAR (Sikri, J.)
U1
draw this amount once the possession is given to the Corporation
and not before. In view of this undertaking it is not necessary
to determine point No. 2.
The point is not free from doubt and
we hesitate to express our opinion when the point has become
academic in view of the undertaking given by the learned counsel
for the applicant, Palshikar.
Regarding point No. I, we agree with the High Court that
there is no provision in the Act for enabling the Corporation to
withdraw from the acquisition proceedings.
In fact, it seems
to us that there is automatic vesting of the land in the Corporation under s. 305 once the requisite conditions are satisfied.
Section 305 reads as follows :
"305. Power to regulate line of buildings.-
( I) If any part of a building projects beyond the
regular line of a public street, either as existing or as
determined for the future or beyond the front of immediately adjoining buildings the Corporation may-
( a) if the projecting part is a verandah, step or
some other structure external to the main
building,
then at any time, or
(b) if the projecting part is not such external
structure as aforesaid, then whenever the greater portion of such building or whenever any material portion
of such projecting part has been taken down
or
burned down or has fallen down, ·
require by notice either that the part or some portion
of the part projecting beyond the regular line or beyond
the front of the immediate adjoining building, shall be
removed, or that such building when being rebuilt shall
be set back to or towards the said line or front; and the
portion of land added to the street by such setting back
or removal shall henceforth be deemed to be part of the
public street and shall vest in the Corporation :
Provided that the Corporation shall make reasonable
compensation to the owner for any damage or loss he
may sustain in consequence of his building or any part
thereof being set back.
(2) The Corporation may, on· such terms
as it
thinks fit, allow any building to be set forward for the
improvement of the line of the street."
In this case it is not necessary to determine whether land
affected by a notice vests when the notice is given or when the
·part or some portion of the part projecting beyond the regular
'line or beyond the front o4' the immediately adjoining building
iis .removed, or when the building when being rebuilt is set back,
18
SUPR.EME COURT REPORTS
[1969) 2 S.C.R.
because it seems to have been common ground between the parties
that the date for the determination of compensation in this case
is the date of the memo, i.e., October 30, 1959.
Coming to the third point, the relevant section which requires
interpretation is s. 387 (3) which reads :
"387. Arbitration in cases of compensation, etc.
( 3) In the event of the Panchayat not giving a
decision within one month or such other longer period
as may be agreed to by both the parties from the date
of the selection of Sarpanch or of the appointment by
the District Court of such members as may be necessary
to constitute the Panchayat, the matter shall, on application by either party be determined by the District
Court which shall, in cases in which the compensation
is claimed in respect of land, follow as far as may be
the procedure provided by the Land Acquisition Act,
1894, for proceedings in matters referred for the determination of the Court;
Provided that-
( a) no application to the Collector for a reference
shall be necessary, and
(b) the court shall have full power to give and
apportion the costs of all the proceedings in manner it
thinks fit."
The learned counsel for the applicant relies on the decision of the
Bombay High Court in The Borough Municipality of Ahmedabad
v. ]avendra Vajubhai Divatia('). In that case Beaumont, C.J.,
interpreting s. 198 of the Bombay Municipal Boroughs Act (Born.
Act XVIII of 1925), which section is, in terms, similar to s. 387
of the Act, observed as follows :
"There is no express provision in the Bombay Municipal Boroughs Act allowing for such addition to the
compensation, but under the Land Acquisition Act fifteen
per cent is allowed in respect of the compulsory nature
of the acquisition, and the question
is whether that
provision in the Land Acquisition Act can be treated
as incorporated into section 198 of the Bombay Municipal Boroughs Act as being part of the procedure
provided by the Land Acquisition Act.
I agree that,
prima facie, a provision of this sort, adding to the
compensation to be payable for the value of the land, is
not aptly described as Procedure, but still one has to
look at the Land Acquisition Act and note the phraseo-
.,.---
(I) I.LR. [1937] Born. 632.
A
B
c
D
'
E
F
G
H
A
B
•
c
D
E
•
•
F
G
H
MUNICIPAL CORP. V. PALSHIKAR (Sikri, /.)
19'
logy adopted.
One finds Part III headed "Reference to
Court and Procedure thereon ... "
Then he referred to ss. 23, 24 and 25 of the Land Acquisition
Act and concluded :
"It seems to me tha~ sections 23, 24 and 25 of the
Act constitute a code laying down the principles on
which the District Court is to act in arriving at the
compensation to be paid, and it is quite impossible to
leave out of that code sub-section (2) of section 23,
as Mr. Shah has invited me to do.
His contention is
that the fifteen per cent is an allowance of something in
addition to the value of the land, which has to be paid
for under the Municipal Act.
But the truth is that the
sections determine the basis on which the value of the
land is to be ascertained on compulsory purchase and
the allowance of the fifteen per cent must be set off
against matters disallowed under section 24. These provisions in the Land Acquisition Act are contained in a
Chapter entitled "Reference to Court and Procedure
thereon" and I think that they must be treated as appli·
cable to proceedings in the District Court under section
198 of the Bombay Municipal Boroughs Act."
The learned counsel for the Corporation was not able to cite
any authority which has dissented from this view.
We agree with
the reasoning of the learned Chief Justice and hold that the Additional District Judge was right in awarding 15 per cent solatium .
Coming to the fourth point, the revision to the High Court
was filed under s. 392 of the Act which provides that "notwith·
standing anything to the contrary in any other law for the time
being in force, the District Court shall exercise all the powers and
jurisdiction expressly conferred on or vested in it by the provisions
of this Act, and unless it is otherwise expressly provided by this
Act, its decision sha!I be subject to revision by the High Court."
The High Court could not, in a revision under s. 392, go into
questions of fact and determine the amount of compensation, and
the High Court was right in declining to deal with this question.
It is not necessary to determine whether the powers of revision
under s. 392 are the same as under s. 115, C.P.C., because even
if the powers under s. 392 of the Act are wider than that under
s. 115, C.P.C., they do not extend to determining questions of
fact.
In view of this conclusion this point cannot be agitated
before us.
In the result the appeals fail, but the applicant-Shri Palshikar
-shall deposit the amount of Rs. 6,000/- in the Court of the
Additional District Judge within four months, as stated by his
SUPREME COURT REPORTS
(1969] 2 S.C.R.
<:aunsel, and he shall be entitled to withdraw this amount once
A
vacant possession is given of the land in dispute to the Corporation. If so requested by the applicant, Shri Palshikar, the Corporation should join as co-plaintiff in a suit or proceeding to be
filed by him against the tenants for securing possession. If it
refuses to do so within 3 months from the date the applicant
requires it to join as co-plaintiff the respondent may withdraw t!1is
B
Rs. 6,000/- deposited by him.
The Corporation shall also gi~e
such further assistance as may be required by the applicant m
.accordance with law.
The applicant shall be entitled to costs; one hearing fee.
<J.C.
Appeals dismissed.
•
·-
•