RAJ HOMES PVT. LTD. & ANOTHER versus STATE OF MADHYA PRADESH & OTHERS

Citation: [2008] 12 S.C.R. 821 · Decided: 26-08-2008 · Supreme Court of India · Bench: DALVEER BHANDARI · Disposal: Dismissed
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Judgment (excerpt)

\. . 
(2008] 12 S.C.R. 821 
RAJ HOMES PVT. LTD. & ANOTHER 
v. 
STATE OF MADHYA PRADESH & OTHERS 
(Civil Appeal Nos. 7732-7733 of 2004) 
AUGUST 26, 2008 
[DALVEER BHANDARI AND LOKESHWAR SINGH 
PANTA, JJ.] 
Madhya Pradesh Land Revenue Code, 1959 - ss. 59 
A 
B 
(5) and 258 (iii) - Rule imposing premium - For diversion of c 
Land for non-agricultural use - Challanged as being in excess 
of the power granted for such imposition and in violation of 
Article 14 of the Constitution - Held: Imposition of premium 
was not in excess of the power - It is in consonance with the 
spirit and objects of the Code - Rule imposing the premium D 
or the Schedule thereof, is not violative of Article 14 of the 
Constitution since it is based on reasonable differntia -
Constitution of India, 1950 - Article 14. 
Appellants filed writ petitions contending that Rule 
14 regarding Imposition of premium u/s 59 (5) of Madhya E 
Pradesh Land Revenue Code, 1959 imposing flat rate of 
premium was in excess and violative of ss. 59 (5) and 258 
(iii) of the Code; and that it is violative of Article 14 of the 
Constitution. High Court dismissed the writ petitions. 
Hence the present appeals. 
F 
Dismissing the appeals, the Court 
HELD: 1.1 The premium is one time charge for 
diversion of land for better land use under rule 14 of Madhya 
Pradesh Land Revenue Code, 1959. The scheme of the G 
Act clearly reveals that the premium is charged only when 
land use is converted for betterment. In this view of the 
matter, the State is. fully justified in charging the premium 
and the same is in consonance with the spirit, objects and 
reasons of the Code. [Para 27] [842 A-B] 
H 
822 
SUPREME COURT REPORTS 
(2008] 12 S.C.R. 
--r-
A 
1.2 The State Government enjoys ample powers of 
not only to fix land revenue rates or to re-fix them upon 
conversion/diversion of the land for another use but also 
charges premium upon diversion of land for another use. 
[Para 27] [841 G-H] 
B 
2. In view of the entire scheme of the Act and the 
provisions of the Code, it cannot be said that Rule 14 is 
)-
violative of Article 14 of the Constitution. The classification 
of various cities in the State is determined as per the 
values of land in different cities, the extent of population 
c of those cities and the character .of those cities. The 
important cities of the State are classified differently from 
smaller cities and towns as also according to their 
population. Similarly, villages are also classified differently 
and rate of levying premium for conversion is accordingly 
D prescribed. The Schedule is based on reasonable 
differentia taking into account 31 relevant factors for the 
purpose, and it cannot be called arbitrary or discriminatory. 
).: 
[Para 27] [842 C-F] 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 
E 7732-7733 of 2004 
From the final Judgment and Order dated 26.08.2003 of 
the High Court of Judicature at Jabalpur (M.P.) in Writ Petition 
No. 27171 & 6269 of 2003 
F 
A.K. Sanghi for the Appellants. 
+· 
Vibha Datta Makhija for the Respondents. 
The Judgment of the Court was delivered by 
DALVEER BHANDARI, J. 1. The appellants aggrieved 
G by the order of the High Court of Judicature at Jabalpur dated 
+ 
26.8.2003 in Writ Petition Nos.6269 and 27171 of 2003 have 
. ..,. 
'f""" 
preferred this appeal with the prayer that the respondent State 
of Madhya Pradesh be restrained from imposing and collecting 
any premium under the impugned rule '14 of the Notification 
H dated 24.1.2002. 
·~· 
RAJ HOMES PVT. LTD. & ANOTHER v. STATE 
823 
OF MADHYA PRADESH & OTHERS [DALVEER BHANDARI, J.] 
-~ 
2. Brief facts giving rise to the present appeal are 
A 
recapi~ulated as under: 
The respondent State of Madhya Pradesh has imposed 
premium at flat rate irrespective of use and purpose of the 
diverted land or any relation whatsoever with the land revenue 
B 
imposed on the land. According to the appellants, the impugned 
-f 
rule 14 of the Madhya Pradesh Land Revenue Code, 1959 (for 
short "the Code") is arbitrary, unreasonable and as such violative 
of Article 14 of the Constitution of India. The imposition of 
premium under rule 14 has been assailed, therefore, it would c 
be imperative to refer to the relevant provisions regarding 
imposition of premium as under: 
"IMPOSITION OF PREMIUM 
13. When the land assessed for any non-agricultural D 
purpose is diverted to any agricultural purpose no premium 
• 
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shall be imposed under Sub-section (5) of Section 59 of 
_A
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