Section 352 of Kolkata Municipal Corporation Act Cannot Operate as an Independent Compulsory Acquisition Power: Supreme Court

Overview of the Supreme Court’s Decision

In Kolkata Municipal Corporation & Anr. Vs Bimal Kumar Shah & Ors. (Supreme Court of India), the Supreme Court upheld the judgment of the Calcutta High Court and dismissed the appeal filed by Kolkata Municipal Corporation (KMC). The core issue was whether Section 352 of the Kolkata Municipal Corporation Act, 1980 independently authorises compulsory acquisition of immovable property, or whether acquisition must proceed only through the structured mechanism contained in Section 536 and Section 537.

The Court conclusively held that:

  • Section 352 does not itself create a standalone power of compulsory acquisition.
  • It merely permits the Municipal Commissioner to identify and propose land required for public streets, squares, parks, gardens, or parking places.
  • Actual compulsory acquisition must be carried out only under the acquisition provisions contained in Section 536 and Section 537, read with the applicable land acquisition law.

The Supreme Court also rejected KMC’s attempt to rely on Section 363 (compensation provision) to justify compulsory acquisition under Section 352, clarifying that payment of compensation alone does not amount to sufficient “authority of law” for deprivation of property under Article 300A of the Constitution.

The Court went further and elaborated the constitutional content of the right to property under Article 300A, outlining a non-exhaustive bundle of seven interrelated procedural sub-rights. It held that a law which deprives a person of property must, in substance, respect these safeguards, failing which the deprivation would be unconstitutional.

KMC’s purported acquisition of the concerned property under Section 352 was held to be illegal, and the appeal was dismissed with costs of ₹5 lakh directed to be paid to respondent no. 1 within sixty days.

Factual Background

  • The property in dispute, Premises No. 106C, Narikeldanga North Road, Kolkata – 700011, originally belonged to Mr. Birinchi Bihari Shah, who derived title through a deed of settlement executed by his father.
  • As Birinchi Shah was a minor on his father’s demise, his elder brother managed the property and leased it out to M/s Arora Film Corporation.
  • On attaining majority, the property was mutated in the name of Birinchi Shah in KMC’s assessment records. Municipal taxes and dues were stated to have been paid regularly, and KMC, by letter dated 07.04.2000, confirmed that no property tax arrears existed.

First Round of Litigation

  • In 2009, KMC attempted to forcibly enter and occupy the property.
  • Birinchi Shah filed W.P. No. 126 of 2009 before the Calcutta High Court to restrain KMC from such interference.
  • Since there was no serious contest on title and KMC did not file an affidavit-in-opposition, the High Court, by order dated 17.09.2009, directed KMC:
    • To conduct an enquiry regarding alleged encroachments, and
    • Not to raise any construction on the property.

Alteration of Ownership Entry and Second Writ

  • In July 2010, Birinchi Shah discovered that KMC had removed his name as owner in its records and substituted its own name.
  • He then filed W.P. No. 981 of 2010 seeking:
    • Correction of the ownership entries, and
    • Restraint on KMC from disturbing his peaceful possession.
  • On 08.01.2015, the learned single Judge recorded that KMC was unable to dispute the averments regarding ownership. The Court:
    • Restrained KMC from interfering with his possession,
    • Injuncted KMC from acting upon the wrongful mutation in its favour, and
    • Directed KMC to remove its men and materials from the property within two weeks.

This categorical finding that KMC failed to establish any title in the property was treated by the Supreme Court as a significant aspect of the case history.

Appeal, New Plea of Acquisition and Remand

  • KMC challenged the single Judge’s order by filing A.P.O. No. 51 of 2015, claiming its affidavit could not be filed earlier due to misplaced records.
  • In this appeal, KMC put forward for the first time the plea that the land had been acquired.
  • The Division Bench remanded the matter to the single Judge, imposing costs of ₹50,000/- on KMC, thereby allowing KMC to place its acquisition contention on record.

Fresh Proceedings and Challenge to Alleged Acquisition

  • Following remand, KMC filed an affidavit-in-opposition asserting that the land had been acquired.
  • Due to this changed stance, Birinchi Shah sought to withdraw the pending writ with liberty to file a fresh petition. This was allowed on 11.08.2016.
  • Thereafter, W.P. No. 930 of 2016 was instituted by respondent no. 1 (as executor to the estate of Birinchi Shah) seeking:
    • Quashing of the alleged acquisition as illegal, and
    • Restoration of the original ownership entry in KMC’s records.

Findings of the High Court

Single Judge’s Decision

  • The single Judge’s order dated 14.09.2017 framed two main issues:

    1. Maintainability of the writ petition (answered in favour of the writ petitioner – no dispute before Supreme Court).
    2. Validity of KMC’s attempt to acquire the property via Section 352 of the Kolkata Municipal Corporation Act, 1980.

  • The Court held that:

    • KMC purported to rely on Section 352(a) as a source of compulsory acquisition power.
    • Section 352(a) does not confer any such power.
    • The alleged acquisition was therefore unsustainable and was quashed.

Division Bench’s Judgment