MUNICIPAL COUNCIL, KHURAI versus KRISHI UPAJ MANDI SAMITI, KHURAI AND ORS.

Citation: [1998] 3 S.C.R. 1042 · Decided: 06-08-1998 · Supreme Court of India · Bench: A.S. ANAND, B.N. KIRPAL, V.N. KHARE · Disposal: Dismissed
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Judgment (excerpt)

A 
B 
MUNICIPAL COUNCIL, KHURAI 
v. 
KRISHI UPAJ MANDI SAMIT!, KHURAI AND ORS. 
AUGUST 6, 1998 
[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. 
F 
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. 
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 
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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." 
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. 
F 
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 
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SUPREME COURT REPORTS 
[1998] 3 S.C.R. 
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. 
(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
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