TRANSFER OF PROPERTY ACT

PROJECT ON:

AN ANALYSIS OF RIGHT TO PROPERTY UNDER THE INDIAN

CONSTITUTION

SUBMITTED TO:

DR. DOLLY JABBAL (PROFESSOR OF LAW)

MS. RUJHITA MAM (ASST. PROFESSOR OF LAW)

SUBMITTED BY:

HEMANT PRAJAPATI

2014(R)/ BA.LLB./017

SEMESTER – VII

FOURTH (IV) YEAR

 TABLE OF CONTENTS

RESEARCH METHODOLOGY...............................................................................................3
THE CONCEPT OF RIGHT TO PROPERTY UNDER ARTICLE 300 A OF THE
CONSTITUTION......................................................................................................................4
THE DOCTRINE OF EMINENT DOMAIN AND THE PAYMENT OF COMPENSATION
....................................................................................................................................................6
INTERPRETATION OF PROPERTY UNDER THE CONSTITUTIONAL PROVISIONS. .8
EFFECTS OF 44TH AMENDMENT ON THE RIGHT OVER PROPERTY..........................11
AN ANALYSIS OF FAIR COMPENSATION UNDER THE LAND...................................13
ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013........................13
CONCLUSION........................................................................................................................15

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 RESEARCH METHODOLOGY

ABSTRACT
There has been much debate about the concept of right to property under the Indian
Constitution, especially after the 44th Constitutional Amendment pursuant to which the Right
to Property no longer remained a fundamental right. In addition to that, various questions
have been raised with regards to what is an adequate compensation under the land acquisition
and rehabilitation and settlement act, in consonance with the constitutional provisions with
regards to right to compensation which is a right accrued to any citizen whose land is being
taken away for public purposes. Through this project, an analysis would be made with regards
to what extent that right has been affected or not, taking into account the right to property
under the Constitution of India.

HYPOTHESIS

The author proposes that the constitutional provisions are not sufficient enough for
enforcement of rights over one’s own property.

RESEARCH QUESTIONS

1. Whether constitutional provisions are sufficient to provide just compensation for violation
of right to property by the state?

2. Whether rights over property have been drastically affected after the right was no longer a
fundamental right?

3. How to decide what is proper compensation when property is taken away by state?

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 THE CONCEPT OF RIGHT TO PROPERTY UNDER ARTICLE 300 A
OF THE CONSTITUTION

The right to enjoy one’s property which was earlier a fundamental right for many years after
the commencement of the constitution of India, has ceased to be a fundamental right within
the provisions of the Constitution of India. 1 It is no more a right which is absolute in nature,
rather the remedies and the liberties under the same are legal rights, but they cannot be
claimed as a matter of a fundamental right anymore. 2 The right to hold and enjoy property is
no more a part of the fundamental rights i.e. Part III of the Constitution of India, thereby
vitiating the right of an aggrieved person to take recourse under Article 32 and approach the
Honorable Supreme Court under its original writ jurisdiction and rather the constitutional
recourse to the same is to approach the High Courts of the country under the ambit of Article
226 as a matter of a legal right or as a matter of filing a civil suit. 3 Though, the right to
possess and enjoy right’s over one’s own property isn’t fundamental in nature anymore, yet
the law and the provisions of the constitution lay down the proposition that, for the
administration or any local authority to interfere with one’s right to enjoyment of property,
the interference has to be with consonance with the constitutional provisions and any other
law prevailing for that purpose.4

The nature and the rights accruing over property have been changed drastically pursuant to
the 44th amendment to the Constitution, wherein the fundamental right to hold and possess
property as a matter of a fundamental right under Article 19(1)(f) has been omitted from the
Constitution.5 Before this amendment took place, the right to possession of property was not
only a fundamental right under Article 19 but also under Article 31. 6 However, pursuant to
the amendment, there has been a repeal of the provision of compulsory acquisition of
property, though the state is within its powers and jurisdiction to acquire property for public
use i.e. to promote public interest over interest of the private individual. 7 The impact of the
amendment is as follows:

1 Art. 19(1) (f), The Constitution of India.

2 State of Maharashtra v. Chandrakant, AIR 1983 SC 803.
3 Bishamber v. State of U.P., AIR 1982 SC 33.
4 State of Mysore v. K.V. Adiga, AIR 1976 SC 863.
5 D.D. Basu, Commentary on the Constitution of India, 2647, (8th ed., 2008).
6 Art. 31, The Constitution of India.
7 Art. 300A (2), The Constitution of India.

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a) Article 32 is no more the remedy or the appropriate manner to approach the
Honorable Supreme Court as a forum for availing a remedy in relation to encroachment of
property and rights associated with it by the state.8

b) A confusion has also been created i.e. a situation has been created wherein the denial
of compensation is not liable to be challenged under a competent court of law if the state by
acting within the powers vested upon it under the laws prevailing deprived a person of his
land or property without making an appropriate payment of compensation.9

Considering the fact that Part III of the Constitution no longer encompasses the right over
one’s enjoyment over land or property, it can no longer be claimed as a fundamental right
within the ambit of Article 32 of the Constitution of India, 10 a legal right in the form of a civil
suit can be undertaken under Article 226.11

8 State of Maharashtra v. Chandrabhan Tarey, AIR 1983 SC 803.

9 Dharam Dutt v. Union of India, (2007) 1 SCC 719.
10 Supra, Note 8.
11 Supra, Note 9.

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 THE DOCTRINE OF EMINENT DOMAIN AND THE PAYMENT OF
COMPENSATION

Under the provisions of the Constitution of India, the “doctrine of eminent domain”
essentially has two major areas:

(I) Public interest preceding private interest as the general rule and therefore property
being acquired for the same purpose i.e. for any public related work

(II) The availability of just and fair compensation during the acquisition of land or
property therein which lays down the fact that the land so acquired has to be used properly
within the given amount of time,12 and for this purpose it is essential that the procedure
therein must be strictly adhered to with as the doctrine of eminent domain envisages the legal
proposition that the power of land or property acquisition should be given to the authority
concerned only within the period under which acquisition can take place and no local
authority can be given unfettered powers to carry on acquisition of property for an indefinite
period of time.13

The authority of taking over control over individual property for the benefit of the general
people was vested with state subject to the fact that a just and fair remuneration was paid to
the individual or the person who was being deprived of his right of enjoyment over his
property.14 There was a duty imposed upon a state with regards to exercising its powers of
taking over the property i.e. exercise of this power was based upon the condition of provision
of just and fair compensation.14

Various amendments to the constitution have to a great extent exonerated the state from the
liability of payment of compensation to the aggrieved persons disposed of their lands or
property.15 The apex court has propounded the concept of “just and fair compensation” 17, by
laying down the proposition that it should be in consonance with the value at market price
when the said property was acquired by the state for any public purpose. 16 The state while

12 State of Bihar v. Project Uccha Vidya, Sikshak Sangh, (2007) 4 SCC 647.
13 D.D. Basu, Commentary on the Constitution of India, 2614 (8th ed., 2008).
14
D.D. Basu, Commentary on the Constitution of India, 2619 (8th ed., 2008).
14 Ibid.
15 H.M. Seervai, Constitutional Law of India, 1942 (5th ed., 2013)
17
Article 31(2), The Constitution of India.
16 Keshavananda Bharati v. State of Kerala, AIR 1976 SC 1462.

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acquiring property is to make good loss incurred for taking away the property and the amount
should be in consonance with the amount of loss that has been so incurred. 17 It was later
realized by the state that paucity of financial resources and capital was a hindrance to the
payment of full compensation and which in turn was an impediment to the progress and
economic development of the country as unnecessary road blocks were imposed upon land
acquisition which was sought to be acquired for a developmental purpose. 18 Pursuant to this, a
law was enacted by the legislature by virtue of which the government was not to be held
liable for not paying an amount of compensation which was equal to the market value or
actual loss suffered by the person whose land had been acquired by the state.21

Before an amendment was made to the constitution, the apex court reiterated the proposition
that, the term “compensation” meant value which was full value of the property acquired by
the state from an individual for any developmental purpose.19 The court further observed that
the constitution guaranteed a right to compensation after property was taken over and
deprivation of fair amount of compensation was against the constitutional right of the
individual.20 Though subsequently the concept of compensation at exactly the market value
was done away with, however the apex court and other courts have held that though
compensation may not be the exact amount of the property taken away but it’s price should
be reasonable and fair and should not be irrational.21

The law in this regard has been further modified and it has been held that acquisition of land
or property will not be unjustified if it is in violation of any of the fundamental rights under
Article 14, 19 and 21.22 The reason for doing the same was to do away with the hindrances
which occurred in acquiring property for promoting agricultural and economic development
of the country.23 The present position of law is that, neither can an acquisition policy be
challenged for a violation of fundamental right, nor can the government be held answerable if
in any case, the compensation amount is less than the market value of land acquired.27

17 Supra, Note 16.

18 Supra, Note 14.
21
Supra, Note 17.
19 R.C. Cooper v. Union of India, AIR 1970 SC 564.
20 Article 31(2), The Constitution of India.
21 M.P. Jain, The Constitution of India, 579 (9th ed., 2013).
22 Art. 31A, The Constitution of India.
23 V.N. Shukla, The Constitution of India, 325 (7th ed., 2012).
27
Ibid.

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INTERPRETATION OF PROPERTY UNDER THE CONSTITUTIONAL
PROVISIONS

Property as per the constitutional provisions and transfer of property laws refers to any
tangible entity by virtue whose value can be reasonably determined in terms of money value
and which provides people of the country, i.e. citizens the right of possession in consonance
with the provisions of the law.24

The concept of “property” has been essentially circumscribed into the following categories in
pursuance of the judgments laid down by the Honorable Supreme Court of India and courts of
the country in the following manner.

1. An interest in the form of a mortgage or lease which is either permanent or interim in

nature.25

2. Any document in the literary form which provides particulars about recordings in
electronic devices in a tangible form is termed as property.26

3. It can also include any sum of money27 or any kind of salary gratuity28 or other
allowances which are paid by the state.

4. Not only movable and immovable property which is physically available but also any
form of IP protection can constitute property within the ambit of the law if there is a certain
tangible value attached to the same.29

5. Until and unless the interest created in a property have a intent for generation of
profit, the power or authority to run an establishment 30, even if a right which is
inherited35gives the authority to manage such an establishment.

24 M.P. Jain, Constitution of India, 897 (7th ed., 2011).

25 Suryakant v. State of Uttar Pradesh, 1958 (SCR) 1059.
26 Huddson v. Central Risk Informations Ltd. (1977) 2 All ER 1022.
27 Bombay Dyeing Co. v. State of Bombay, AIR 1959 SC 329.
28 Ibid.
29 Shridhur Mutt v. Commissioner of Income Tax, (1954) 1 MLJ 677 (981).
30 Raghubir v. Court of Wards, AIR 1953 SC 373. 35
Kakinada Samajam v. Commissioner, AIR 1971 SC 891
36
Ujjam Bai. v. State Of U.P., AIR 1962 SC 1621.

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Rights to generate income in the form of revenue, 36 or purchasing a particular land31, or
collect forest produce will not constitute property within the ambit of the law.

To hold a land acquisition enforceable, irrespective of the intention, the administrative

authority has to justify the same in accordance with the law and it cannot act in an unjustified
manner without authority of law.32 When an individual has been deprived of his property by
virtue of him being disposed of the property in contravention to any legal provision, he has
the right to approach the High Court of appropriate jurisdiction seeking a remedy against the
state.39

Unless a contractual obligation is not against the laws of contract, money or particular amount
cannot be recovered even if the deprivation of the same is against the principles of law. 40
Acquisition of land or property by breach of contractual terms will not be sufficient enough to
attract a remedy under the law.41

Even if the law was valid, but acquisition through statute made by legislature having no
competence33 or is in violation of the rights under Part III34 or any constitutional or legal
provision35 will amount to an invalid acquisition.36

The rights guaranteed under the constitution can be used as a remedy if and only if the land
which is being acquired from an individual is done by the state or by any of its
instrumentalities and not by mere citizens or individuals. 37 Any claim that has been made by
him with regards to land acquired should establish tangibly that it is “property” within the
ambit of the legal provisions.38

31 Swami Motor Transport v. Sankaraswamingal Mutt, AIR 1963 SC 864.

32 Ram Jawaya v. State of Punjab, (1955) 2 SCR
225. 39 Wazir v. State of H.P., (1955) 1 SCR 408. 40
Hassanji v. State of M.P., AIR 1965 SC 470 41
Article 300A, The Constitution of India.
33 Manoel v. Collector AIR 1984 Bom 461
34 Jagannath v. State of UP, AIR 1962 SC 1563.
35 West Ramnad Co. v. State of Madras, AIR 1962 SC 1763.
36 Article 300A, The Constitution of India.
37 Paika v. Pindika, AIR 1958 Ori 15.
38 Audh Bihari v. Gajadhar, (1955) 1 SCR 70.

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EFFECTS OF 44TH AMENDMENT ON THE RIGHT OVER PROPERTY

Though, the justification of removal of right to property as a fundamental right was the
hindrance to the economic progress and also the fact that the government was bound to give
an explanation for every acquisition made, 39 even if it is said to be wrong by many people as
it deprives one over his right over something which he has inherited by birth and wrongly
denies him to possess the land in majority of the cases. 40 The amendment has therefore
restricted the rights of a citizen to seek remedy over the property, by prohibiting him/her from
going to the Supreme Court directly, even if the matter requires urgent intervention of the
Honorable Supreme Court.41 Though the High courts are vested with more powers in
comparison to the apex court,42 to provide a remedy under all forms of remedies sought, but
no person is entitled to approach the apex court directly for any land or property taken over.43
Acquisition of land or similar immovable property by virtue of a non-existent law or illegal
provision or if according to laws or rules made by incompetent authorities, can be no more
challenged by virtue of invalidity of legislation or legislative competence.44

Though, the concept of fundamental rights in matters of land or property acquisition has
become almost non-existent, yet certain high courts have stated that the same can be
challenged if they are done in a manner not justifiable within Article 1945, and they can be
therefore be challenged under the constitution in the said manner.46 However, the justification
behind removal of the same has not been discussed by the apex court or the other courts of
the country47, and the effect of removal of the same as widely inferred is the restriction of
rights and remedies to a person deprived of his land or property.48
39 Art 19(1)(f), The Constitution of India.
40 Ibid.
41 Art. 32, The Constitution of India.
42 Art. 226, The Constitution of India.
43 Supra, Note 50.
44 Supra, Note 5.
45 State of West Bengal v. Union of India, AIR 1963 SC 1241
46 H.M. Seervai, Commentary on the Constitution of India, 789 (4th ed., 2010).
47 Chiranjitlal v. UOI, AIR 1951 SC 41.
48 Maneka Gandhi v. Union of India, AIR 1978 SC 597.

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 AN ANALYSIS OF FAIR COMPENSATION UNDER THE LAND
ACQUISITION, REHABILITATION AND RESETTLEMENT ACT,
2013

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The DPSP’s enunciate that wealth acquired should be for promoting public interest and not
for accumulation of money or financial resources. 49 The purpose of land acquisition is for the
progress of the country and for which it becomes essential for the government to take away
the property for such a purpose.50

Private entities or individuals can also acquire property which will also require them to pay
adequate compensation and would be deemed to be acquisition by the state, within the ambit
of land acquisition for public purpose, in the following cases:

a) If acquisition is beyond a certain value that has been laid down by the government or
even more than the said value.51

b) If land acquired for a limited extent to promote any use of the general people or the
public at large.52

While acquisition of the land is important for any public purpose but before the same is done
the social or negative impacts of the same have to be ascertained before the same is done. 53
Before any compensation is provided it is essential to find out the degree of loss suffered by
families on a social and financial front and to what extent they were affected by the
procurement of their land by the state. 54 However, the same can be discarded if no public
purpose is fulfilled or environmental and social impacts are more than the benefits of the
same.64 The acquisition of tribal or scheduled areas 55, has to be done by informed consent 56 of
the people at large.67

49 Article, 39(a), The Constitution of India.

50 The Land Acquisition, Act, 1894.
51 S. 46, The Land Acquisition Act, 2013.
52 S. 3(2), The Land Acquisition Act, 2013.
53 S. 4(6), The Land Acquisition Act, 2013.
54 S. 7(2), The Land Acquisition Act, 2013.
64
S. 9(6), The Land Acquisition Act, 2013.
55 S. 44(1), The Land Acquisition Act, 2013.
56 S. 42(1), The Land Acquisition Act, 2013.
67
Ibid.

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 CONCLUSION

It can be said that, the 44th amendment has restricted the rights over one’s property by not
allowing a person to approach the apex court directly. Though the constitutional provisions
aim at fair acquisition, yet the state is generally not answerable for any acquisition done
against the law as in common parlance. The land acquisition Act of 2013, is a welcome step

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in this regard of providing adequate compensation and remuneration for acquisition of land or
property.

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