Shah, J. - (1.) (After stating facts and dealing with matters not material for reporting his Lordship proceeded): The next question, which falls to be determined, is whether the claiman's are entitled to compensation at the market rate prevailing on 28th May 1948, the date on which the notification under section 4 of the Land Acquisition Act was issued, or at the rate prevailing on 1st January 1948, and whether the claimants are entitled to the 15 per cent solatium in addition to the market value of the lands. By Bombay Act IV of 1948 the Bombay Legislature has amended section 23 of the Land Acquisition Act 1894. Section 3 of Bombay Act IV of 1948 provides by the first sub-section: "Where during the continuance of this Act and land is required under the Land Acquisition Act, 1894........ for the prupose of a housing scheme the said Act shall have effect in relation to such acquisition as if- (a) in clause (f) of section 3 after the words "such provision" the words and brackets 'and a housing scheme as defined in the Land Acquisition (Bombay Amendment) Act, 1948" had been inserted; * * * * * * (c) in section 23- (i) in the first clause of sub-section (1), after the words, brackets and figures "section 4, sub-section(1)" the words "or at the relevant date, which ever is less" had been inserted; and (ii) sub-section (2) had been omitted." The expression "relevant date" is defined, in section 2(ii) as meaning the first day of January 1948, and the expression housing scheme" is defined in section 2(i) as meaning "any housing scheme which the Government may from time to time undertake for the purpose of increasing accommodation for housing periods and shall include any such scheme undertaken from time to time with the previous sanction of the State Government by a local authority or company." Evidently the effect of section 3 of Bombay Act IV of 1948 is to deny to the owners of the lands compulsorily acquired the 15 per cent solatium awardable under section 23(2) of the Land Acquisition Act and the market value which is to be awarded under section 23; and in determining the amount of compensation the Court must ascertain the market value of the land at the date of the publication of the notification under section 4 and the market value on 1st January 1948 and to award to the owner of the land, the smaller of the two amounts. In this case, there is no dispute that the land values in the locality were rising before 1st January 1948 and continued to rise even thereafter. If Bombay Act IV of 1948 applies, the claimants will be entitled to compensation without the additional solatium, and the prevailing market rate on 1st January 1948 and not on 28th May 1948. The land Acquisition Officer and the learned trial Judge have awarded compensation to the claimants on the market value prevailing on 1st January 1948, and they have not awarded to the claimants the 15 per cent, solatium.
(2.) In this Court, the competence of the Bombay legislature to enact Bombay Act IV of 1948 is challenged. In the trial Court, on behalf of the claimants in Reference No. 49 of 1953 it was submitted that Bombay Act IV of 1948 was "illegaal and ultra vires" the Bombay Legislature. The contention was, however not pressed in the arguments, and the learned Judge held that the Act was not ultra vires the Bombay Legislature. In this court, however, all the claimants, who have either appealled or have sought to support the awards made by the Land Acquisition Officer in appeals filed by that Officer, have supporte the contention that Bombay Act IV of 1948 is ultra vires the Bombay Legislature. We have issued notice to the advocate General under Order 27 of the Civil Procedure Code to appear and to assist us in the determination of this question, and the learned Government Pleader has appeared before us on behalf of the Advocate- General.
(3.) The argument in support of the contention that Bombay Act IV of 1948 was ultraa vires, was sought to be founded upon the terms of section 299 of the Government of India Act, 1935. By sub-section(1) of section 299 of the Government of India Act, it was provided that "no" person shall be deprived of his property save by authority of law". By the second sub-section, on which strong reliance was placed, it was provided: "Neither the Dominion Legislature nor a Provincial Legislature shall have power to make any law authorising the compulsory acquisition for public purposes of any land, or any commercial or industrial undertaking, or any interest, in, or in any company owning, any commercial or industrial undertaking, unless the law provides for the payment of compensation for the property acquired and either fixes the amount of the compensation, or specifies the principles on which , and the manner in which it is to be determined". Evidently, the form in which sub-section (2) is enacted imposes a fetter upon the power of the Legislature. The Parliament restricted the exercise of the Legislature power of the Dominion Legislature and the Provincial Legislature to enact laws authorising compulsory acquisition for public purposes of any land or commercial or industrial undertaking or any interest therein, without providing for payment of compensation for the property acquired and without fixing either the amount of the compensation or the principles on which, and the manner in which, it is to be determined. This provision was intended to strike at any attempt to enact expropriatory or confiscatory legislation denying to owners of land or commercial or industrial undertakings their right to compensation. It is clear, therefore, that, though in form this was a fetter upon the legislative power, it was in substance an attempt at enacting a constitutional guarantee against ex-propriation of property otherwise than for public purposes and without payment of compensation. Legislation, which sought compulsorily to acquire for public purposes any land, or commercial or industrial undertaking, had, therefore, to make provision for payment of compensation and either to fix the amount of compensation or the principles on which, and the manner in which, the compensation was to be determined. That the Land Acquisition Act, 1894 even as amended by Bombay Act IV of 1948 provides for payment of compensation for compulsory acquisition of property and also specifies the principles on which, and the manner in which, the compensation has to be determined, is undisputed. But it is urged that the expression "compensation" as used in sub-section(2) of section 299 of the Government of India Act must mean full indemnity for loss suffered by an owner of land or commercial or industrial undertaking by reason of the compulsory acquisition for public purposes, and that such full indemnity can only be given if the owner is given the prevailing market value of the property compulsorily acquired at the date of acquisition. The vires of a statute can be adjudged only in the light of the authority of the Legislature which enacts that statute. The Central and the State Legislatures under the Government of India Act were, within the ambit of their authority, sovereign legislatures, The question raised in this case being question of legislature competence and not of enforecement of precautionary safeguards for the benefit of the citizens the Court has to ascertain whether the Provincial Legislature has contravened the restrictions imposed by s. 299(2) of the Government of India Act that the intention of the parliament in enacting section 299 of the Government of India Act was to guarantee the right to property is, as we have already observed, evident. But in ascertaining whether the Legislature of the Bombay State was competent to enact Act IV of 1948 the primary question to be determined is whether the Bombay Legislature was competent, under the Government of India Act to so amend the Land Acquisition Act as to enable the State to acquire land on payment of compensation which was less than the market value of the land acquired. By 9th item in the second list in the 7th Schedule to the Government of India, Act, the Provincial Legislature was competent to enact legislation for compulsory acquisition of land. There was no restriction placed upon the power of the Legislature by the 9th itme in the second legislative list. The legislation in connection with compulsory acquisition of land was, therefore, clearly within the competence of the Bombay Legislature.;