Supreme Court Declares Kolkata Municipal Corporation’s Land Acquisition Under Section 352 Invalid, Emphasizes Procedural Safeguards Under Article 300A

Seven Constitutive Sub-Rights Essential for Valid Compulsory Acquisition; Mere Power and Compensation Insufficient — Landmark Judgment Upholds Property Rights and Due Process

In a significant judgment delivered on May 16, 2024, the Supreme Court of India dismissed the appeal filed by Kolkata Municipal Corporation (KMC), ruling that the purported acquisition of private property under Section 352 of the Kolkata Municipal Corporation Act, 1980, was illegal and unconstitutional. The apex court upheld the concurrent findings of the Calcutta High Court that Section 352 does not confer a valid power of compulsory acquisition and that the process lacked essential procedural safeguards mandated under Article 300A of the Constitution.

The dispute arose when KMC claimed to have acquired a property owned by respondent Birinchi Bihari Shah for the purpose of constructing a park and a ward office. The Corporation relied on Section 352, which permits the Municipal Commissioner to acquire land required for opening or widening public streets, parks, or squares. However, the Court noted that Section 352 merely authorizes the Municipal Commissioner to identify land for acquisition but does not itself provide the procedure or authority for compulsory acquisition.

The Court carefully analyzed the Kolkata Municipal Corporation Act and clarified that the actual power to acquire immovable property compulsorily lies with the State Government under Section 537 of the Act, exercised on the application of the Municipal Commissioner. Sections 535 to 537 of the Act together form the proper legal framework for acquisition, including acquisition by agreement (Section 536) or compulsory acquisition (Section 537). Compensation provisions under Section 363 apply only to acquisitions by agreement, not compulsory acquisitions.

Beyond statutory interpretation, the Supreme Court elaborated on the constitutional dimensions of the right to property under Article 300A. While the constitutional right to property was shifted from Part III to Part XII of the Constitution post the 44th Amendment, Article 300A continues to protect citizens from arbitrary deprivation of property, mandating “authority of law” for such deprivation. The Court emphasized that the power to acquire and pay compensation alone does not suffice.

The Court identified seven fundamental sub-rights—intersecting procedural and substantive safeguards—that collectively constitute the minimum content of the constitutional right to property and must be incorporated in any law enabling compulsory acquisition:

1. Right to Notice: The State must inform the property owner of its intention to acquire the property through a clear and meaningful notice, ensuring no acquisition “by ambush.”

2. Right to be Heard: The owner has a genuine opportunity to raise objections and present their case before acquisition proceeds.

3. Right to a Reasoned Decision: The authority must communicate a reasoned and informed decision regarding acquisition, demonstrating consideration of objections.

4. Duty to Acquire Only for Public Purpose: Acquisition must demonstrably serve a public purpose consistent with constitutional values and distributive justice.

5. Right to Restitution or Fair Compensation: The owner is entitled to just and adequate compensation or rehabilitation.

6. Right to an Efficient and Expeditious Process: The acquisition process must be conducted within prescribed timelines to avoid undue delay and hardship.

7. Right of Conclusion: The acquisition process must culminate in the lawful vesting of ownership and possession, completing the divestiture in a non-arbitrary manner.

The Court highlighted that these sub-rights are not mere procedural formalities but the core constitutional fabric that ensures fairness and legality in compulsory acquisition. The absence of any of these sub-rights renders the acquisition process constitutionally vulnerable.

Applying these principles, the Court held that Section 352 of the KMC Act, which lacks any procedural mechanism or safeguards, cannot be construed as conferring a valid power of compulsory acquisition. The Corporation’s attempt to acquire the property under this provision was therefore void. Additionally, the Court found that the Corporation acted in blatant violation of statutory provisions and failed to pay compensation or follow due process, causing grave injustice to the property owner.

The judgment reinforces the need for statutory compliance with procedural safeguards in acquisition laws and underscores the constitutional protection of property rights beyond mere compensation. The Supreme Court directed the KMC either to initiate acquisition proceedings under the correct statutory provisions (Section 536 or 537) or restore the ownership records in favor of the respondents.

The appeal was dismissed with costs of Rs. 5,00,000 to be paid to the respondent within 60 days. This decision serves as a landmark precedent emphasizing the sanctity of property rights and the necessity of procedural fairness in compulsory acquisition under Indian law.

Statutory provisions

Kolkata Municipal Corporation Act, 1980 - Sections 352, 363, 535, 536, 537;

Constitution of India - Article 300A;

Land Acquisition Act, 1894 (referenced for procedural principles)

Kolkata Municipal Corporation v. Bimal Kumar Shah, (SC) : Law Finder Doc Id # 2580512