MUNICIPAL COUNCIL, KHURAIversusKRISHI UPAJ MANDI SAMITI, KHURAI AND ORS.

A                         MUNICIPAL COUNCIL, KHURAI
                                           v.
                KRISHI UPAJ MANDI SAMIT!, KHURAI AND ORS.

                                   AUGUST 6, 1998

B             [DR. A.S. ANAND, B.N. KIRPAL AND V.N. KHARE, JJ.]


          Madhya Pradesh Municipalities Act, 1961/Madhj;a Pradesh
                                                                                      <!
     Agricultural Produce Markets Act, 1960:

C·         S. 100(1) (g)ls. 14 (I) and (2) -Land acquired by Municipal Council
      under a gift for public purpose i.e. to establish grain market-Transferred to
      Market Committee-Before transfer also land being used by local authority
     for purposes of market-Municipal Council demanding compensation from
      Market Committee-Held, Municipal Council not entitled to receive any
D    compensation since no amount had been spent by it for acquisition of the
     land.                                                                                 -
             CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1884 of
     1994.

E         From the Judgment and Order dated 8.1.85 of the Madhya Pradesh High
     Court in Misc. Petition No. 1417of1981.

             Shiva Pujan Singh, Y.P. Dhingra and S.S. Khanduja for the Appellant.

         S.K. Gambhir, D.P. Chaturvedi, Sudhanshu and Satish K. Agnihotri for
     The Respondents.
F
             The following Order of the Court was delivered :

           This appeal by special leave is directed against the judgment and order
     of the High Court of Madhya Pradesh at Jabalpur dated 8th January, 1995.

G          The only question for consideration is whether the respondent/Market
     Committee was liable to pay any compensation to the Municipal Council for
     the land comprising in Khasra No. 412/2, which was transferred by the
     Municipal Council to the Market Committee since that land was earlier also
     being used for the purpose of the Market Committee by the Municipal Council.

H            The land in question is located in Khasra No.412/2 and measures about
                                            1042
           MUNICIPAL COUNCIL KHURAI. r. KR!SHI UPAJ MANDI SAMITI         1043

7 acres. It was acquired by the Municipal Council under a gift from Seth          A
Mohan Lal for a public purpose, namely - to establish a grain market in the
year 1912. This land, alongwith some other land and buildings was transferred
to the Market Committee. Appellant demanded compensation for the land and
buildings. The Market Committee challenged the demand through a writ
petition. The writ petition was allowed and the case remanded to the Collector    B
for determination of compensation. The Collector determined compensation
for the land and buildings including the land comprising in Khasra No. 412/
2. The order of the Collector was successfully challenged by the Market
Committee through a writ petition in the High Court.

      We have heard learned counsel for the parties and examined the record.      C
      Section 100(1) (g) of the Madhya Pradesh Municipalities Act, 1961
reads thus:-

       "JOO. Property vested in Council -(I) Subject to any special
       reservation made or to any special conditions imposed by the State         D
       Government, all property of the nature hereinafter in this section
       specified within the limits of the Municipality, shall vest in and be
       under the control of the Council and with all other property which
       has already vested, or may hereafter vest in the Councils shall be
       held and applied by it as trustees for the purposes of this Act, this      E
       is to say-

        (g) all lands and/or other property transferred to the Council by the
              State Government or acquired by gift, purchase or otherwise,
             for public purpose."
                                                                                  F
      Since, the land in question had been transferred to the Council by way
of a gift for a public purpose, that land would be deemed to have vested in
the Council by virtue of the aforesaid provisions of Section 100 of the
Madhya Pradesh Municipalities Act, 1961.

     Section 14(1) and (2) of the Madhya Pradesh Agricultural Produce             G
Markets Act, 1960 read thus :-

       "14. Vesting of the property of local authority in the market committee
       - (I) The Market committee may require a local authority to transfer
       any land or building belonging to the local authority, which is situated
       within the market yard and which immediately before the establishment      H
    1044                   SUPREME COURT REPORTS                    [1998] 3 S.C.R.

A          of the market was being used by the local authority for the purposes
           of the market, and the local authority shall, within one month of the
           receipt of the requisition, transfer, the land or building, as the case
           may be, to the market committee on such terms as may be agreed upon
           between them.

B          (2) Wbere within a period of thirty days from the date of receipt of
           requisition by the local authority under sub-section (1) no agreement
           is reached between the local authority and the market committee
           under the said sub-section, the land or building required by the market
           committee shall vest in the committee for the purposes of this Act
c          and the local authority shall be paid such compensation as may be
           determined by the Collector under sub-section (4) :

               Provided that no compensation shall be payable to a local authority
           in respect of any land or building which had vested in it by virtue of
           the provisions contained in the enactment relating to the constitution
D          of such local authority without payment of any amount whatsoever
           for such vesting;

               Provided further that any party aggrieved by the order of the
           Collector may, within thirty days from the date of such order, appeal
           to the State Government."
E
          A plain reading of the first proviso to sub-section (2) of Section 14 of
    the 1960 Act shows that no compensation is required to be paid to the local
    authority for transfer of any land or building which had vested in that local
    authority, by virtue of the provisions contained in the enactment relating to
F   the constitution of that local authority, without payment of any amount
    whatsoever for such vesting. The land comprising in Khasra No.412/2 was
    given as a gift to the local authority i.e. Municipal Council for a public
    purpose by operation of the provisions of Section I 00( I )(g) of the
    Municipalities Act (supra) and the same vested in the Council under the
G   enactment constituting the local authority. Under the proviso to Section 14(2)
    of the 1960 Act, the Municipal Council was not entitled to receive any
    compensation for transfer of such land to the Market Committee. It is not
    disputed that immediately before the establishment of the Market Committee,
    that very land was being used by the local authority for the purposes of the
    market. This being the fact situation, both on facts and in law, the High Court
H   was perfectly justified in holding that since the land comprising in Khasra
           MUNICIPAL COUNCIL KHURAI. v. KRISHI UPAJ MANDI SAMITI      1045
No.412/2 had vested in the appellant, it would not be entitled to receive any A
compensation, since no amount had been spent by the appellant for acquisition
of that land, which had been gifted to it for a public purpose. The judgment
of the High Court thus c_aUs for no interference. This appeal consequently
fails and is dismissed. No costs.

RP.                                                     Appeal di~missed.    B