ORDER
Chandrashekaraiah, J.
1. In all these petitions the petitioners have sought for striking down the provision of Section 32(5) of the Karnataka Urban Development Authority Act, 1987 (hereinafter referred to as the 'Act' 1987) and further sought for a declaration that the petitioners are the owners of the civic amenity sites and for further declaration that the Urban Development Authority has no right whatsoever to deal with the said property.
2. It is in the submission of the learned Counsel for the petitioners that Section 32(5) of the Act 1987 is liable to be struck down on the ground that the State is not competent to legislate the law and also on the ground that Section 32(5) of the Act 1987 is hit by Article 14 of the Constitution of India. In support of this submission, the learned Counsel Sri L. Govindraj, Sri Jaykumar S. Patil, Sri S.V. Prakash and others submitted that the Act, 1987 provides for acquisition of land for the purpose of development of major and important urban areas in the State of Karnataka. The legislative entry to enact such a law is entry 42 of List III of Schedule VII of the Constitution of India and therefore any law made by the State in the field in respect of which there is already a law by the Union, is to be reserved for the assent of the President. Therefore, it is submitted that as the Act 1987 has not been reserved for the assent of the President, it is invalid and unenforceable.
3. It is further contended that Section 32(5) of the Act 1987 compels the land owner to surrender civic amenity site free of cost which amounts to compulsory acquisition of land without compensation and therefore the said acquisition is illegal and without authority of law.
4. It is nextly contended that if the land is acquired under the Land Acquisition Act, the land owner is entitled to get market value as compensation whereas, in respect of a civic amenity site reserved for the benefit of the residents of the locality, the land owner is deprived of compensation and therefore according to the petitioners, there is discrimination between a land owner who is deprived of the property under the LA Act and the owner of the civic amenity site who is deprive of his right to own the said site under Section 32(5) of the Act 1987 and hence it is hit by Article 14 of the Constitution of India.
5. In reply to the said submissions, the learned Advocate General, Sri Basavaprabhu Patil, and others submitted that the Act 1987 has been enacted by the State for the purpose of development of major and important urban areas in the State of Karnataka, not under entry 42 of List III of the Constitution but under Entries 5, 6 and 17 of List II of the Constitution and therefore the State is competent to legislate the law under Article 246(2) of the Constitution of India.
6. Nextly, it is submitted that calling upon the person who formed the layout to surrender civic amenity site under Section 32(5) of the Act 1987 is for the purpose of discharging statutory obligation and duties as it has been earmarked as a civic amenity site in the layout and therefore there is no compulsion so as to say that there is a compulsory acquisition of land without authority of law.
7. Lastly, it is submitted that there is no discrimination in the matter of awarding compensation since the land owners who surrender civic amenity site will get the market value of the entire land utilised for formation of layout by selling the sites which will be equivalent or more than the market value of undeveloped land.
Even in case of acquisition of land under the L.A. act, while determining the market value on the basis of market value of developed land the normal rule is to deduct 53% from out of the market value of the developed land in order to determine the market value of undeveloped land. Accordingly, it is submitted that there is no substance in any of the contentions raised by the petitioners and therefore sought for dismissal of these petitions.
8. In order to appreciate the rival contentions, it is useful to refer to certain provisions of the Act, 1987. The preamble of the Act 1987 reads as follows :
'An Act to provide for the establishment of Urban Development Authorities for the planned development of major and important urban areas in the State and the areas adjacent thereto and for matters connected therewith.
Whereas it is expedient to provide for the establishment of Urban Development Authorities for the planned development of major and important urban areas in the State and the areas adjacent thereto and for matters connected therewith.'
Section 14 of the Act 1987 reads as follows:
'14. Objects of the Authority. The objects of the Authority shall be planning and promoting and securing the development of the urban area and for those purposes the Authority shall have the power to acquire, hold, manage and dispose of the moveable and immovable property, whether within or outside the urban area under its jurisdiction to carry out building, engineering and other operations, and generally to do all such things necessary or expedient for the purpose of such development and for purposes incidental thereto.'Chapter III of the Act 1987 provides for Development Schemes. Section 17 of the Act provides for procedure on completion of scheme. Section 18 provides for sanction of scheme by the Government. Section 19 provides for publication of the scheme declaring that the land proposed to be acquired as notified under Section 17 is required for a public purpose. Thereafter, for the purpose of implementation of the scheme the land will be acquired under the provisions of the LA Act, as provided under Section 36 of the Act. From a reading of the abovesaid sections, it is clear that the Act 1987 provides for declaration only to the limited purpose of declaring that the land is required for a public purpose. Thereafter, the acquisition of the land is under the provisions of the LA Act. In this background what is to be seen is whether the Act is enacted by the State by virtue of entry 42 of List III of the Constitution or under any other entry of List II of the Constitution. Entry 42 of List III of Schedule VII reads as follows :
'42. Acquisition and requisitioning of property' Entries 5, 6 and 17 of List II Schedule VII read as follows :
'5. Local Government, that is to say, the Constitution and powers of municipal corporations, improvement trusts, district boards, mining settlement authorities and other local authorities for the purpose of local self-government or village administration.
6. Public health and sanitation; hospital and dispensaries.
17. Water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power subject to the provisions of Entry 56 of List I.'
8a. Part IV of the Constitution provides for directive principles of state policy. It is useful to refer to Article 47 and 48A of the Constitution which read as follows :
'47. The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.'
'48A. The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country.'
9. Act 1987 is enacted for the purpose of orderly and planned development of major and important urban areas keeping in view Articles 47 and 48A of the directive principles of the state policy. Under Entry 5, the State can legislate the law in the matter of improvement trust. Similarly Entry 6 covers the field relating to public health and sanitation, hospital and dispensaries. Entry 17 covers the field relating to drainage and embankments. As stated earlier, Act 1987 does not provide for any acquisition of land and it only provides for declaration whether the land is required for a public purpose or not. Ultimately, the acquisition is under the provisions of the LA Act as provided under Section 36 of Act 1987. Therefore, the law that has been made by the state is only by virtue of the power conferred under Article 246(2) of the Constitution read with Entries 5, 6 and 17 of List II of Schedule VII of the Constitution. Therefore, the Act 1987 is within the legislative competence of the State.
10. The Supreme Court in the case of STATE OF ANDHRA PRADESH AND ORS. ETC. v. McDOWELL AND CO. AND ORS., : [1996]3SCR721 . ETC. has held as follows:
'A law made by the Parliament or the Legislature can be struck down by Courts on two grounds and two grounds alone, viz (1) lack of legislative competence and (2) violation of any of the fundamental rights guaranteed in Part III of the Constitution or of any other constitutional provision.'In view of the law declared by the Supreme Court as stated above, the Act 1987 is a law made by virtue of Entries 5, 6, and 17 of List II of Schedule VII of the Constitution and therefore it cannot be said that the State has no legislative competence to legislate the Act, 1987.
11. The next point that arises for consideration is whether Act 1987, is hit by any of the fundamental rights guaranteed in Part III of the Constitution or any other constitutional provisions.
12. The learned Counsel for the petitioners contended that Section 32(5) of the Act, 1987 is hit by Article 14 of the Constitution on the ground that there is a discrimination in the matter of awarding compensation in respect of the land acquired one under the LA Act and another under Section 32(5) of the Act 1987. In reply to the said contentions, the learned Advocate General submitted that there is no discrimination as such in the matter of compensation so as to hold that Section 32(5) of the Act 1987 is hit by Article 14 of the Constitution.
13. According to the learned Counsel for the petitioners, if the land is acquired under the LA Act, the petitioner is entitled for compensation in respect of the entire land acquired, whereas in case of a civic amenity site which is required to be surrendered by virtue of Section 32(5), no compensation is paid to the land owner. If the land is acquired under the LA Act, no doubt the market value of the land will be determined under the provisions of the LA Act. If an undeveloped land is acquired for the purpose of formation of the layout and in respect of which if the market value is to be determined on the basis of the value of the developed land, 53% of the market value of a developed land will be deducted for the purpose of determining the market value of the undeveloped land. Development includes formation of roads, drainage, civic amenity sites, parks and so on. If that is so, it cannot be said that the person, who forms the private layout who is required to reserve the area as civic amenity site, is deprived of the value of the said site as he would get the appreciated value of the sites by selling it to private persons. Therefore, there is no discrimination as contended by the learned Counsel for the petitioners in the matter of payment of compensation. Even assuming that no market value is paid to the civic amenity site the petitioners cannot plead that there is discrimination as they voluntarily ask for permission to form a private layout knowing fully well that one of the conditions to be imposed on the person who intends to form a private layout is to reserve certain area for civic amenity. The reservation of the area in the layout for civic amenity is not for the benefit of the land owner but it is for the benefit of the residents who may ultimately reside in that area. Therefore, it cannot be said that there is any such discrimination so as to hold that Section 32(5) of the Act 1987 is hit by Article 14 of the Constitution. Further, the petitioners also are not able to point out that Act 1987 is ultra vires of any of the Constitutional rights. Hence, it is a valid piece of legislation.
14. It is in the submission of learned Counsel for the petitioners that under Section 32(5) of the Act 1987, the petitioners are required to transfer civic amenity site in favour of the Board which amounts to depriving the right of the land owner to hold the property even though there is no law authorising the authority to compel the land owners to surrender civic amenity site. It is further contended that any transfer of land under Section 32(5) of the Act, in favour of the Board, amounts to compulsorily acquiring the land without payment of any compensation and therefore, Section 32(5) of the Act 1987 is illegal and invalid as it is opposed to Article 300-A of the Constitution. In support of these contentions, the learned Counsel relied on the decisions in the cases of YOGENDRA PAL AND ORS. v. MUNICIPALITY, BHATINDA AND ORS, : AIR1994SC2550 . AND PT. CHET RAMVASHIST by L.Rs. v. MUNICIPAL CORPORATION OF DELHI, : AIR1995SC430 .
15. In order to appreciate the above said contentions it is useful to extract Section 32 of the Act 1987 :
'32. Formation of new extension or layouts or making new, private streets.-
(1) Notwithstanding anything to the contrary in any law for the time being in force, no person shall form or attempt to form any extension or layout for the purpose of constructing building thereon without the express sanction in writing of the Authority and except in accordance with such conditions as the Authority may specify:
Provided that where any such extension or layout lies within the local limits of a local authority, the Authority shall not sanction the formation of such extension or layout without the concurrence of the local authority.
Provided further that where the local authority and the Authority do not agree on the formation of or the conditions relating to the extension or layout, the matter shall be referred to the Government whose decision thereon shall be final.
2) Any person intending to form an extension or layout, or to make a new private street shall send to the Commissioner a written application with plans and sections showing the following particulars:
a) the laying out of the sites of the area upon streets, lands or open spaces;
b) the intended level, direction and width of the street;
c) the street alignment and the building line and the proposed sites abutting the streets;
d) the arrangement to be made for levelling, paving, metalling flagging, chanelling, sewering, draining, conserving and lighting the streets and for adequate drinking water supply.
3) The provisions of this Act and any rules or bye laws made under it as to the level and width of streets and the height of buildings abutting thereon shall apply also in the case of streets referred to in Sub-section (2) and all the particulars referred to in that sub-section shall be subject to the approval of the Authority.
4) Within six months after the receipt of any application under Sub-section (2), the Authority shall either sanction the forming of the extension or layout to be in conformity with the guidelines to be issued by the Government or making of street on such conditions as it may think fit or disallow it or ask for further information with respect to it.
5) The authority may require the applicant to deposit, before sanctioning the application, the sums necessary for meeting the expenditure for making roads, side drains culverts, underground drainage and water supply and lighting and the charges for such other purpose as such applicant may be called upon by the Authority, provided the applicant also agrees to transfer the ownership of the roads, drains, water supply mains, parks and open spaces, civic amenity areas, laid out by him to the Authority permanently without claiming any compensation thereof.
6) Such sanction may be refused -
i) if the proposed street would conflict with any arrangements which have been made or which in the opinion of the Authority is likely to be made for carrying out any general scheme of street improvement or other schemes of development or expansion by the Authority;
ii) if the proposed street does not conform to the provisions of the Act, rules and Bye-laws referred to in Sub-section (3); or
iii) if the proposed street is not designed so as to connect one end with a street which is already open; or
iv) if the layout in the opinion of the Authority cannot be fitted with any existing or proposed expansion or development schemes of the Authority.
7) No person shall form a layout or make any new private street without the sanction of or otherwise than in conformity with the conditions imposed by the Authority. If the Authority requires further information from the applicant no steps shall be taken by him to form the layout or make the street until orders have been passed by the Authority after the receipt of such information.
Provided that the passing of such orders shall not, in any case, be delayed for more than six months after the Authority has received all the information which it considers necessary to enable it to deal finally with the said application.
8) If the Authority does not refuse sanction within six months from the date of the application under Sub-section (2) or from the date of receipt of all information asked for under Sub-section (7), such sanction shall be deemed to have been granted and the applicant may proceed to form the extension or layout or to make the street, not so as to contravene any of the provisions of this Act and the rules or bye laws made under it.
9) Any person who forms or attempts to form any extension or layout in contravention of the provisions of Sub-section (1) or makes any street without or otherwise than in conformity with the orders of the Authority under this Section, shall be liable on conviction, to fine which may extend to ten thousand rupees.'
16. Chapter III of the Act 1987 provides for development schemes. Section 16 of the Act, provides for particulars to be provided for in a development scheme drawn under Section 15 of the Act. Section 16(1) Clause (d) of the Act reads as follows:
'Every development scheme under Section 15(1) shall within the limits of the area comprised in the scheme, provide for -
'(d) the reservation of not less than fifteen per cent of the total area of the layout for public parks and playgrounds and an additional area of not less than ten percent of the total area of the layout for civic amenities.'
Under the above said clause, in every layout to be formed not less than 10 per cent of the total area is to be reserved for civic amenity.
17. Section 2(h) of the Act 1987 defines the word 'civic amenity' as follows:
'Civic Amenity means a market, a post office, a bank, a fair price shop, a milk booth, a school, a dispensary, a maternity home, a child care centre, a library, a gymnasium, a recreation centre run by the Government or local authority, a police station, an area office or a service station of the local authority or the Karnataka Urban Water Supply and. Drainage Board or the Karnataka Electricity Board and such other amenity as the Government may be notification specify.'
18. Section 19 of the Act, 1987 provides for declaration by a notification giving particulars of the land to be acquired for a public purpose after obtaining necessary sanction of the Government under Section 18 of the Act. Sub-section (8) of Section 19 of the Act of 1987 reads as follows:
'8) The Authority shall not allot any land to any individual, organisation or authority, the civic amenity area earmarked in the Scheme without the orders of the Government.'
19. From the abovesaid provisions it is clear that in every layout certain percentage of land is to be reserved for a civic amenity, whether the layout is formed by the Urban Development Authority or by a private person as provided under Section 32 of the Act 1987. This reservation of land for a civic amenity is for the benefit of the public in general and for the benefit of the residents of the locality in particular. The maintenance of the civic amenity for the general public is by the Authority or by the Local Authority such as Municipality or Municipal Corporation. This reservation results in creating a fiduciary relationship in the nature of trust, since the land owner ceases to have an interest in the land earmarked for a civic amenity site as it has been reserved for the beneficial enjoyment of the general public. Therefore, in order to discharge the statutory obligation by the Authority if the land owner is asked to transfer the ownership of the said land, in my view, it cannot be said to be an acquisition of land by compulsion.
20. If any land or an interest in land is taken under statutory powers without the agreement of the owner, it is said to have been compulsorily acquired. In these cases the land owners have come forward to form a layout on their own under Section 32 of the Act. Under Sub-section (2) of Section 32 of the Act 1987 any person intending to form an extension or layout shall send to the Commissioner a written application with plans and sections showing the particulars enumerated therein. Section 16 of the Act 1987 provides for reservation of 10 per cent of the total area for providing civic amenity. Sub-section (5) of Section 32 of the Act 1987 requires the applicant to deposit certain amount before sanctioning the application for meeting the expenditure for making roads, side drains, culverts, underground drainage and water supply and lighting and the charges for such other purpose. Further, the applicant also agrees to transfer the ownership of the roads, drains, water supply mains, and open spaces, civic amenity areas laid out by him to the authority without claiming any compensation. The applicant knowing fully well that he is required to deposit certain money and also to surrender ownership of certain area reserved for roads, drains, civic amenity etc., makes an application for the purpose of formation of the layout. This shows that the land owner knowing fully went that he is required to surrender or transfer the ownership of the abovesaid land makes an application for the purpose of formation of the layout. Therefore, there is no compulsion so as to say that the land owner is compelled to transfer the land referred to above. Hence, in my opinion there is no substance in the contention of the learned Counsel for the petitioners that the petitioners are called upon to surrender the land amounts to compulsory acquisition of land.
21. Under the scheme of the Act, it is the duty of the Development Authority to execute the work such as making roads, side drains, culverts, etc., including the development of civic amenity site. In order to execute the said work the Authority may call upon the applicant to deposit certain amounts even before sanctioning the layout plan. This shows that there is an obligation on the statutory body like Development Authority to carry out the works to discharge the statutory duties. Therefore, the Authority under Section 32(5) of the Act 1987 called upon the land owner to agree to transfer the ownership of the said land to the Authority. Any transfer of land pursuant to the agreement entered into prior to the sanction of the layout is a voluntary act of the land owner and therefore it is not an acquisition of land by compulsion so as to say that the petitioners are deprived of their property without authority of law. Therefore, there is no substance in the contention of the learned Counsel for the petitioners that the petitioners are made to lose their property without authority of law.
22. The right to property is deleted from Article 19 of the Constitution and further Article 31(2) is also omitted. In view of this the person who is deprived of his property under a Statute may not be entitled to get compensation if it is not provided under the very statute. The ownership of land which was required to be surrendered as required under Section 32(5) of the Act, 1987 is for the benefit of the general public. Private interest shall always yield to the public interest. Any land reserved or earmarked for civic amenity in the layout is for the benefit of the general public. The land owner who formed the layout has no right whatsoever to use that property for his personal benefit. If that is so, if the law provides for the land owner to transfer the ownership of the said land in order to develop for the benefit of the general public, it does not in any way affect the interest of the land owner.
23. In the case of Yogendra Pal (supra), the Supreme Court has held that the provisions of Section 192(1)(c) of the Punjab Municipal Act, 1911 and Section 203(1)(c) of the Haryana Municipal Act, 1973 are violative of Article 14 of the Constitution and are void on the ground of discrimination that Section 192(1)(c) of the said Act, provides that the land owner who surrendered less than 25 per cent of his land is not entitled for compensation and if it exceeds more than 25 per cent, there is an obligation on the part of the Authority to pay compensation to the land owner. In the case on hand, there is no such discrimination as found by the Supreme Court in the above said decision. Therefore, the abovesaid decision has no application to the facts of these cases.
24. The other decision in the case of Pt. Chet Ram Vashist (supra) is also of no assistance to the petitioners. While considering Section 313 of the Delhi Municipal Corporations Act, it is observed by the Supreme Court that there is no provision under the act, calling upon the land owner to surrender the land free of cost. In the said view of the matter, the Supreme Court held that in the absence of any sanction under law, the Authority was not right in calling upon the land owner to transfer the land in its favour. In these cases, Section 32(5) of the Act, 1987 specifically provides for the land owner to agree for transfer of the ownership before obtaining the sanction to form the layout. Pursuant to the said agreement, it is open for the Authority to call upon the land owner to transfer the ownership of the land. Therefore, any demand made by the Authority calling upon the petitioners to transfer the ownership is because of the sanction as provided under Section 32(5) of the Act 1987.
25. Section 16 of the Act 1987, provides 10 per cent of the area is to be reserved in any layout for civic amenities, Section 19(8) of the Act 1987 provides that the Authority has no power to allot civic amenity site to any individual without the orders of the Government. The Government has framed the Rules called the Karnataka Urban Development Authorities (Allotment of Civic Amenity Site) Rules 1991. Under these Rules, the Authorities are required to follow certain norms while alloting civic amenity sites. These provisions clearly show that the Authority cannot arbitrarily deal with the civic amenity site while allotting the same in favour of third persons. Under the provisions of the Act, and Rules sufficient safeguards are provided in order to develop the civic amenity site.
26. In most of the petitions, the petitioners have already surrendered civic amenity sites in favour of the Authority. Now they have come forward for a direction to restore the civic amenity sites in their favour. In many of the cases, civic amenity sites have already been allotted to some third parties with a direction to develop the same as provided under the Act, 1987 and Rules 1991. As the petitioners have agreed to transfer the civic amenity site before obtaining sanction to form the layout and accordingly have transferred the same, they have no right to demand for restoration of the civic amenity sites in their favour or to prevent the Authority from allotting the civic amenity sites to any third parties under the Rules framed by the government.
27. For the reasons stated above, there is no substance in any of the contentions raised by the petitioners in these petitions. Accordingly the writ petitions are dismissed. Rule is discharged.