Supreme Court of India
Union Of India vs Tarsem Singh on 19 September, 2019
Equivalent citations: AIR 2019 SUPREME COURT 4689, 2019 (9) SCC 304, AIRONLINE 2019 SC 1087, 2020 (1) ABR 140, (2019) 12 SCALE 648, (2019) 4 CURCC 100, (2019) 4 KER LT 739, (2019) 4 RECCIVR 431
Author: R.F. Nariman
Bench: Surya Kant, R.F. Nariman
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7064 OF 2019
(ARISING OUT OF SLP (C) NO.9599 OF 2019)
Union of India & Anr. … Appellants
Versus
Tarsem Singh & Ors. … Respondents
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Signature Not Verified With
Digitally signed by R
NATARAJAN
Date: 2019.09.19
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16:49:22 IST
Reason:
(D.NO.18425 OF 2019)
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4
JUDGMENT
R.F. NARIMAN, J.
1. Leave granted.
2. A batch of appeals before us by the Union of India question
the view of the Punjab and Haryana High Court which is that the
non-grant of solatium and interest to lands acquired under the
National Highways Act, which is available if lands are acquired
under the Land Acquisition Act, is bad in law, and consequently that
Section 3J of the National Highways Act, 1956 be struck down as
being violative of Article 14 of the Constitution of India to this extent.
3. The facts of one of these appeals may be taken up as
illustrative of the points for consideration in all these appeals. In
Union of India & Anr. v. Tarsem Singh & Ors. (Civil Appeal No. 7064
of 2019 @ SLP (C) No.9599 of 2019), a notification dated
24.12.2004 was issued under Section 3A of the National Highways
Act, 1956 (hereinafter referred to as “the Act”), intending to acquire
land belonging to the Respondents for the purpose of four-laning
National Highway No.1-A on certain stretches of the Jalandhar-
Pathankot section as well as the Pathankot-Jammu section falling
within the State of Punjab. On 11 th July, 2005, the said lands were
declared to have vested in the State pursuant to Section 3D(2) of
5
the said Act. On 5th October 2006, the competent authority under
the Act passed an Award in which compensation was calculated at
Rs.4,219/- per marla or Rs.6.75 lakhs per acre. As this Award was
disputed by the Respondents, an Arbitrator was appointed under the
Act, who then arrived at a figure of Rs.1.5 lakhs per marla as
compensation. It is important to note that as no solatium or interest
is provided by the Act, such solatium and interest was not awarded
by the learned Arbitrator. Meanwhile, a Section 34 application filed
under the Arbitration Act by the Union of India was dismissed on the
ground that it was hopelessly time-barred. On appeal to the
Division Bench of the High Court, it was found on facts that as the
amount of compensation awarded was not challenged in certain
cases, the National Highways Authority of India being “State” under
Article 12 of the Constitution cannot be permitted to pick and
choose between persons similarly situate, as a result of which the
appeal against valuation at the rate of 1.5 lakhs per marla was
rejected. However, the Court deleted the grant of severance and
18% interest if the awarded amount is not paid within six months,
following an earlier Division Bench judgment of the same Court. The
Court then went on to state that despite the fact that no appeal has
been filed against the learned Single Judge’s judgment by the
owners, yet compensation for acquired land being in the nature of
6
beneficial legislation, they would be bound by an earlier Division
Bench judgment which requires the National Highway Authority to
pay solatium and, therefore, directed payment of solatium at the
rate of 30%, as laid down in the said judgment.
4. Shri Shyam Divan, learned Senior Advocate appearing on
behalf of the Union of India and NHAI, took us through the relevant
provisions of the Land Acquisition Act, 1894 as well as the National
Highways Act. According to him, the National Highways Act is a
complete Code which expressly excluded the application of the
provisions of the Land Acquisition Act, and this being so, it is clear
that absent discrimination or manifest arbitrariness, the non-award
of solatium and interest that is awardable under the Land
Acquisition Act would not fall foul of Article 14 of the Constitution of
India. According to the learned Senior Advocate, it is not possible
to choose between one Acquisition Act and another, as the National
Highways Act alone would apply when land is acquired for the
purpose of National Highways. This being the case, all the
judgments that are cited by the Punjab and Haryana High Court in
M/s Golden Iron and Steel Forging vs. Union of India 2011 (4) RCR
(Civil) 375, would, therefore, not apply. According to him, the
Division Bench of the Rajasthan High Court in Banshilal Samariya
7
vs Union of India 2005-06 Supp RLW 559, correctly distinguished
this line of cases and equally correctly followed a line of judgments
under various state town planning Acts, the Requisitioning and
Acquisition of Immovable Property Act, 1952 and the Defence of
India Act, 1971 to arrive at the conclusion that solatium and interest
need not be paid in cases covered under the National Highways
Act. He further argued that given the fact that market value on the
date of publication of the Section 3A notification was to be given at
the full market rate, there could be no fundamental right violated as
solatium and interest that are granted are mere statutory rights
which can be awarded if the statute so enjoins, and equally need
not be awarded where a separate special statute expressly
excludes them. He also contended, somewhat feebly, that since
only strips of land adjoining the National Highways were required to
be acquired, in many cases, the landowners would have properties
which would not be subject to acquisition left with them, obviating
any need to pay solatium to them. Finally, he also referred to and
relied upon Article 31-C of the Constitution to argue that if at all
there was an infraction of Article 14, the Amendment Act of 1997 to
the National Highways Act, 1956, enacting Sections 3A to 3J, being
in furtherance of the Directive Principle contained in Article 39(b),
8
would be shielded from attack on the ground that Article 14 of the
Constitution has been violated.
5. Shri Amit Sibal, learned Senior Advocate, together with Shri
Neeraj Kumar Jain, defended the view of the Punjab and Haryana
High Court in M/s Golden Iron and Steel Forging (supra) by
pointing out that the object sought to be achieved by the 1997
Amendment Act to the National Highways Act, 1956 was far
removed from the Directive Principle contained in Article 39(b) and,
therefore, did not receive the protection of Article 31-C of the
Constitution of India. They argued that the main object of the
Amendment Act was the speedy implementation of Highway
projects, which could only be achieved by expediting the process of
land acquisition. This being the case, excluding solatium and
interest that is awardable under the Land Acquisition Act results in a
discrimination between persons who are similarly situate so far as
lands are acquired by the Union of India from them for the purpose
of national highways as opposed to other public purposes, having
no rational relation to the object of the 1997 amendment. They were
at pains to point out that “solatium” is awarded because of the
compulsory nature of acquisition, which is present whether the land
is acquired for the National Highways or for any other public
9
purpose. They, therefore, argued that solatium and interest are
integral parts of compensation that is awardable to persons whose
lands have been compulsorily expropriated. They took us through
the provisions of the Requisitioning and Acquisition of the
Immovable Property Act, 1952 and the Defence of India Act, 1971,
and stated that the judgments that were delivered under those Acts,
which upheld the non-grant of solatium, was because requisition
was first made of private property for public purposes under those
Acts, for which compensation was granted. Possession having
been taken by the State, such properties could be handed back
under those Acts once the purpose of requisitioning such properties
was over. Also, it was only in very limited circumstances that such
requisitioned property was to be acquired, which, therefore,
obviated payment of any solatium. They, therefore, relied upon the
line of authorities which struck down provisions of statutes which did
not grant solatium where land was acquired without first being
requisitioned. They also took us through the judgment of the
Division Bench of the Rajasthan High Court and pointed out that this
basic distinction between the two sets of applicable precedents was
not properly appreciated, leading the High Court to follow the wrong
line of authority. On merits, they argued that in some cases in the
Supreme Court itself, the then Solicitor General, Shri Ranjit Kumar,
10
expressly stated that solatium will be paid to some of the persons
who are covered by notifications under Section 3A of the National
Highways Act. This apart, as was correctly observed by the
Division Bench of the Punjab and Haryana High Court in the
impugned judgment, the National Highway Authority being “State”
under Article 12 of the Constitution of India, cannot file objections in
certain cases and accept arbitration awards in others. In any case,
no case has been made out under the limited jurisdiction to
challenge arbitral awards under Section 34 of the Arbitration and
Conciliation Act, 1996.
6. Having heard the learned counsel on both sides, it is
necessary to first mention that the National Highways Act, 1956, as
originally enacted, did not provide for acquisition of land. Thus, till
the National Highways Laws (Amendment) Act, 1997, all
acquisitions for the purpose of National Highways were made under
the Land Acquisition Act, and the owners were given, in addition to
market value, solatium as well as interest under the provisions of
that Act.
7. Coming to the Amendment Act of 1997, it is important to set
out the Objects and Reasons that led to the aforesaid amendment.
They are:
11
“1. In order to create an environment to promote private
investment in national highways, to speed up
construction of highways and to remove bottlenecks in
their proper management, it was considered necessary
to amend the National Highways Act, 1956 and the
National Highways Authority of India Act, 1988.
2. One of the impediments in the speedy implementation
of highways projects has been inordinate delay in the
acquisition of land. In order to expedite the process of
land acquisition, it is proposed that once the Central
Government declares that the land is required for public
purposes for development of a highway, that land will
vest in the Government and only the amount by way of
compensation is to be paid and any dispute relating to
compensation will be subject to adjudication through the
process of arbitration.
3. It was also felt necessary to ensure continuity of the
status of bypasses built through private investment. To
achieve this, it is proposed to amend the National
Highways Act, 1956 so as to include the highway
stretches situated within any municipal area as a part of
National Highway. Further, as the National Highways
Act, 1956 permits participation of the private sector in
the development of the National Highways, it became
imperative to amend the National Highways Authority of
India Act, 1988 so as to provide that the National
Highway Authority of India may seek the participation of
the private sector in respect of the highways vested in
the Authority.
4. With a view to provide adequate capital and loans to
the National Highways Authority of India by the Central
Government, it is proposed to make amendment in the
National Highways Authority of India Act, 1988.
5. With a view to achieve the above objectives and also
as both Houses of Parliament were not in session and
the President was satisfied that circumstances existed
which rendered it necessary for him to take immediate
12
action, the National Highways Laws (Amendment)
Ordinance, 1997 was promulgated by the President on
the 24th day of January, 1997.
6. The Bill seeks to replace the aforesaid Ordinance.”
8. Pursuant to this, the amendments that were made to the
National Highways Act, 1956 with which we are directly concerned,
are set out hereinbelow:
“3. Definitions. In this Act, unless the context otherwise
requires,-
(a) "competent authority" means any person or authority
authorised by the Central Government, by notification in
the Official Gazette, to perform the functions of the
competent authority for such area as may be specified in
the notification;
(b) "land" includes benefits to arise out of land and
things attached to the earth or permanently fastened to
anything attached to the earth.
3A. Power to acquire land, etc. - (1) Where the Central
Government is satisfied that for a public purpose any
land is required for the building, maintenance,
management or operation of a national highway or part
thereof, it may, by notification in the Official Gazette,
declare its intention to acquire such land.
(2) Every notification under sub-section (1) shall give a
brief description of the land.
(3) The competent authority shall cause the substance
of the notification to be published in two local
newspapers, one of which will be in a vernacular
language.
3B. Power to enter for survey, etc.- On the issue of a
notification under sub-section (1) of section 3A, it shall
13
be lawful for any person, authorised by the Central
Government in this behalf, to—
(a) make any inspection, survey, measurement,
valuation or enquiry;
(b) take levels;
(c) dig or bore into sub-soil;
(d) set out boundaries and intended lines of work;
(e) mark such levels, boundaries and lines placing
marks and cutting trenches; or
(f) do such other acts or things as may be laid down
by rules made in this behalf by that Government.
3C. Hearing of objections - (1) Any person interested in
the land may, within twenty-one days from the date of
publication of the notification under sub-section (1) of
section 3A, object to the use of the land for the purpose
or purposes mentioned in that sub-section.
(2) Every objection under sub-section (1) shall be made
to the competent authority in writing and shall set out the
grounds thereof and the competent authority shall give
the objector an opportunity of being heard, either in
person or by a legal practitioner, and may, after hearing
all such objections and after making such further
enquiry, it any, as the competent authority thinks
necessary, by order, either allow or disallow the
objections.
Explanation.--For the purposes of this sub-section, "legal
practitioner" has the same meaning as in clause (i) of
sub-section (1) of section 2 of the Advocates Act, 1961
(25 of 1961).
(3) Any order made by the competent authority under
sub-section (2) shall be final.
3D. Declaration of acquisition- (1) Where no objection
under sub-section (1) of section 3C has been made to
the competent authority within the period specified
14
therein or where the competent authority has disallowed
the objection under subsection (2) of that section, the
competent authority shall, as soon as may be, submit a
report accordingly to the Central Government and on
receipt of such report, the Central Government shall
declare, by notification in the Official Gazette, that the
land should be acquired for the purpose or purposes
mentioned in sub-section (1) of section 3A.
(2) On the publication of the declaration under sub-
section (1), the land shall vest absolutely in the Central
Government free from all encumbrances.
(3) Where in respect of any land, a notification has been
published under sub-section (1) of section 3A for its
acquisition but no declaration under sub-section (1) has
been published within a period of one year from the date
of publication of that notification, the said notification
shall cease to have any effect:
Provided that in computing the said period of one year,
the period or periods during which any action or
proceedings to be taken in pursuance of the notification
issued under sub-section (1) of section 3A is stayed by
an order of a court shall be excluded.
(4) A declaration made by the Central Government under
sub-section (1) shall not be called in question in any
court or by any other authority.
3E. Power to take possession.- (1) Where any land has
vested in the Central Government under sub-section (2)
of section 3D, and the amount determined by the
competent authority under section 3G with respect to
such land has been deposited under sub-section (1) of
section 3H, with the competent authority by the Central
Government, the competent authority may by notice in
writing direct the owner as well as any other person who
may be in possession of such land to surrender or
deliver possession thereof to the competent authority or
any person duly authorised by it in this behalf within sixty
days of the service of the notice.
15
(2) If any person refuses or fails to comply with any
direction made under sub-section (1), the competent
authority shall apply—
(a) in the case of any land situated in any area falling
within the metropolitan area, to the Commissioner of
Police;
(b) in case of any land situated in any area other than
the area referred to in clause (a), to the Collector of a
District,
and such Commissioner or Collector, as the case may
be, shall enforce the surrender of the land, to the
competent authority or to the person duly authorised by
it.
3F. Right to enter into the land where land has vested in
the Central Government. - Where the land has vested in
the Central Government under section 3D, it shall be
lawful for any person authorised by the Central
Government in this behalf, to enter and do other act
necessary upon the land for carrying out the building,
maintenance, management or operation of a national
highway or a part thereof, or any other work connected
therewith.
3G. Determination of amount payable as compensation.-
(1) Where any land is acquired under this Act, there shall
be paid an amount which shall be determined by an
order of the competent authority.
(2) Where the right of user or any right in the nature of
an easement on, any land is acquired under this Act,
there shall be paid an amount to the owner and any
other person whose right of enjoyment in that land has
been affected in any manner whatsoever by reason of
such acquisition an amount calculated at ten per cent, of
the amount determined under sub-section (1), for that
land.
(3) Before proceeding to determine the amount under
sub-section (1) or sub-section (2), the competent
16
authority shall give a public notice published in two local
newspapers, one of which will be in a vernacular
language inviting claims from all persons interested in
the land to be acquired.
(4) Such notice shall state the particulars of the land and
shall require all persons interested in such land to
appear in person or by an agent or by a legal practitioner
referred to in sub-section (2) of section 3C, before the
competent authority, at a time and place and to state the
nature of their respective interest in such land.
(5) If the amount determined by the competent authority
under sub-section (1) or sub-section (2) is not
acceptable to either of the parties, the amount shall, on
an application by either of the parties, be determined by
the arbitrator to be appointed by the Central
Government.
(6) Subject to the provisions of this Act, the provisions of
the Arbitration and Conciliation Act, 1996 (26 of 1996)
shall apply to every arbitration under this Act.
(7) The competent authority or the arbitrator while
determining the amount under sub-section (1) or sub-
section (5), as the case may be, shall take into
consideration—
(a) the market value of the land on the date of
publication of the notification under section 3A;
(b) the damage, if any, sustained by the person
interested at the time of taking possession of the land,
by reason of the severing of such land from other
land;
(c) the damage, if any, sustained by the person
interested at the time of taking possession of the land,
by reason of the acquisition injuriously affecting his
other immovable property in any manner, or his
earnings;
(d) if, in consequences of the acquisition of the land,
the person interested is compelled to change his
17
residence or place of business, the reasonable
expenses, if any, incidental to such change.
3H. Deposit and payment of amount. - (1) The amount
determined under section 3G shall be deposited by the
Central Government in such manner as may be laid
down by rules made in this behalf by that Government,
with the competent authority before taking possession of
the land.
(2) As soon as may be after the amount has been
deposited under sub-section (1), the competent authority
shall on behalf of the Central Government pay the
amount to the person or persons entitled thereto.
(3) Where several persons claim to be interested in the
amount deposited under sub-section (1), the competent
authority shall determine the persons who in its opinion
are entitled to receive the amount payable to each of
them.
(4) If any dispute arises as to the apportionment of the
amount or any part thereof or to any person to whom the
same or any part thereof is payable, the competent
authority shall refer the dispute to the decision of the
principal civil court of original jurisdiction within the limits
of whose jurisdiction the land is situated.
(5) Where the amount determined under section 3G by
the arbitrator is in excess of the amount determined by
the competent authority, the arbitrator may award
interest at nine per cent, per annum on such excess
amount from the date of taking possession under section
3D till the date of the actual deposit thereof.
(6) Where the amount determined by the arbitrator is in
excess of the amount determined by the competent
authority, the excess amount together with interest, if
any, awarded under sub-section (5) shall be deposited
by the Central Government in such manner as may be
laid down by rules made in this behalf by that
Government, with the competent authority and the
18
provisions of sub-sections (2) to (4) shall apply to such
deposit.
3-I. Competent authority to have certain powers of civil
court.- The competent authority shall have, for the
purposes of this Act, all the powers of a civil court while
trying a suit under the Code of Civil Procedure, 1908 (5
of 1908), in respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any
person and examining him on oath;
(b) requiring the discovery and production of any
document;
(c) reception of evidence on affidavits;
(d) requisitioning any public record from any court or
office;
(e) issuing commission for examination of witnesses.
3J. Land Acquisition Act 1 of 1894 not to apply.- Nothing
in the Land Acquisition Act, 1894 shall apply to an
acquisition under this Act.”
9. Keeping in view the object of reducing delay and speedy
implementation of highway projects, the amended National
Highways Act does away with any “award” by way of an offer to the
landowner. Post the notification under Section 3A, objections are
to be heard by the competent authority, whose order is then made
final. The moment the authority disallows the objections, a report is
submitted to the Central Government, and on receipt of such report,
the Central Government, by a declaration, states that the land
should be acquired for the purpose mentioned in Section 3A. The
19
important innovation made by the Amendment Act is that vesting is
not postponed to after an award is made by the Competent
Authority. Vesting takes place as soon as the Section 3D declaration
is made. One other important difference between the Amendment
Act and the Land Acquisition Act is that determination of
compensation is to be made by the competent authority under the
Amendment Act which, if not accepted by either party, is then to be
determined by an Arbitrator to be appointed by the Central
Government. Such arbitrator’s Award is then subject to challenge
under the Arbitration and Conciliation Act, 1996. Thus, delays in
references made to District Judges and appeals therefrom to the
High Court and Supreme Court have been obviated. Section 3G(7)
does not provide for grant of solatium, and Section 3H(5) awards
interest at the rate of 9% on the excess amount determined by the
arbitrator over what is determined by the competent authority
without the period of one year contained in the proviso to Section 28
of the Land Acquisition Act, after which interest is only awardable at
the rate of 15% per annum, if such payment is made beyond one
year.
10. Before embarking on a discussion as to the constitutional
validity of the Amendment Act, it is important to first understand
20
what is meant by the expression “solatium”. In Sunder vs Union of
India (2001) 7 SCC 211, a bench of 5 judges of this Court laid down
the nature of solatium as follows:
“21. It is apposite in this context to point out that during
the enquiry contemplated under Section 11 of the Act
the Collector has to consider the objections which any
person interested has stated pursuant to the notice
given to him. It may be possible that a person so
interested would advance objections for highlighting his
disinclination to part with the land acquired on account of
a variety of grounds, such as sentimental or religious or
psychological or traditional etc. Section 24 emphasises
that no amount on account of any disinclination of the
person interested to part with the land shall be granted
as compensation. That aspect is qualitatively different
from the solatium which the legislature wanted to
provide “in consideration of the compulsory nature of the
acquisition”.
22. Compulsory nature of acquisition is to be
distinguished from voluntary sale or transfer. In the latter,
the landowner has the widest advantage in finding out a
would-be buyer and in negotiating with him regarding the
sale price. Even in such negotiations or haggling,
normally no landowner would bargain for any amount in
consideration of his disinclination to part with the land.
The mere fact that he is negotiating for sale of the land
would show that he is willing to part with the land. The
owner is free to settle terms of transfer and choose the
buyer as also to appoint the point of time when he would
be receiving consideration and parting with his title and
possession over the land. But in the compulsory
acquisition the landowner is deprived of the right and
opportunity to negotiate and bargain for the sale price. It
depends on what the Collector or the court fixes as per
the provisions of the Act. The solatium envisaged in sub-
21
section (2) “in consideration of the compulsory nature of
the acquisition” is thus not the same as damages on
account of the disinclination to part with the land
acquired.”
Thus, the solatium that is paid to a landowner is on account of
the fact that a landowner, who may not be willing to part with his
land, has now to do so, and that too at a value fixed legislatively and
not through negotiation, by which, arguably, such land owner would
get the best price for the property to be sold. Once this is
understood in its correct perspective, it is clear that “solatium” is part
and parcel of compensation that is payable for compulsory
acquisition of land.
11. As has been stated by us hereinabove, solatium and interest
were awarded to landowners for compulsory acquisition of their
lands for the purpose of National Highways until the 1997
Amendment Act. Interestingly, after the Land Acquisition Act has
been repealed and The Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement
Act, 2013 has come into force, Section 105 of the said Act provides
as under:
“105. Provisions of this Act not to apply in certain cases
or to apply with certain modifications.- (1) Subject to
sub-section (3), the provisions of this Act shall not apply
22
to the enactments relating to land acquisition specified in
the Fourth Schedule.
(2) Subject to sub-section (2) of section 106, the Central
Government may, by notification, omit or add to any of
the enactments specified in the Fourth Schedule.
(3) The Central Government shall, by notification, within
one year from the date of commencement of this Act,
direct that any of the provisions of this Act relating to the
determination of compensation in accordance with the
First Schedule and rehabilitation and resettlement
specified in the Second and Third Schedules, being
beneficial to the affected families, shall apply to the
cases of land acquisition under the enactments specified
in the Fourth Schedule or shall apply with such
exceptions or modifications that do not reduce the
compensation or dilute the provisions of this Act relating
to compensation or rehabilitation and resettlement as
may be specified in the notification, as the case may be.
(4) A copy of every notification proposed to be issued
under sub-section (3), shall be laid in draft before each
House of Parliament, while it is in session, for a total
period of thirty days which may be comprised in one
session or in two or more successive sessions, and if,
before the expiry of the session immediately following
the session or the successive sessions aforesaid, both
Houses agree in disapproving the issue of the
notification or both Houses agree in making any
modification in the notification, the notification shall not
be issued or, as the case may be, shall be issued only in
such modified form as may be agreed upon by both the
Houses of Parliament.”
12. The First Schedule to the said Act provides that solatium
equivalent to 100% of the market value multiplied by various factors,
23
depending on whether the land is situated in a rural or urban area,
constitutes minimum compensation package to be given to those
whose land is acquired. The Fourth Schedule to this Act, to be read
along with Section 105, expressly includes under Item 7, the
National Highways Act, 1956. In Item 9, this Schedule also includes
The Requisitioning and Acquisition of Immovable Property Act,
1952. By a notification dated 28 th August, 2015 issued under
Section 105 read with Section 113 of the 2013 Act, it is provided
that the 2013 Act compensation provisions will apply to acquisitions
that take place under the National Highways Act. The result is that
both before the 1997 Amendment Act and after the coming into
force of the 2013 Act, solatium and interest is payable to
landowners whose property is compulsorily acquired for purposes of
National Highways. This is one other very important circumstance
to be borne in mind when judging the constitutional validity of the
1997 Amendment Act for the interregnum period from 1997 to 2015.
Article 31-C
13. Articles 31-C and 39(b) of the Constitution of India read as
under:
24
“31C. Saving of laws giving effect to certain directive
principles.- Notwithstanding anything contained in article
13, no law giving effect to the policy of the State towards
securing all or any of the principles laid down in Part IV
shall be deemed to be void on the ground that it is
inconsistent with, or takes away or abridges any of the
rights conferred by article 14 or article 19 and no law
containing a declaration that it is for giving effect to such
policy shall be called in question in any court on the
ground that it does not give effect to such policy:
Provided that where such law is made by the Legislature
of a State, the provisions of this article shall not apply
thereto unless such law, having been reserved for the
consideration of the President, has received his assent.”
“39. Certain principles of policy to be followed by the
State.– The State shall, in particular, direct its policy
towards securing -
xxx xxx xxx
(b) that the ownership and control of the material
resources of the community are so distributed as best to
subserve the common good;
xxx xxx xxx”
An interesting discussion is contained in Sanjeev Coke
Manufacturing Company vs Bharat Coking Coal Ltd. & Anr (1983) 1
SCR 1000 at pages 1023 to 1025, on the scope of the expression
“material resources of the community” and the expression
“distribute” that are used in Article 39(b). Finally, the Court held:
25
“We hold that the expression ‘Material resources of the
community’ is not confined to natural resources; it is not
confined to resources owned by the public; it means and
includes all resources, natural and man-made, public
and private-owned.” (at page 1026)
However, we were referred to three judgments in Property Owners’
Association v. State of Maharashtra. In the first of these
judgments reported in (1996) 4 SCC 49, this Court has referred the
matter to five learned Judges on the vexed question as to whether
Article 31-C survived at all in view of the declaration contained in
Minerva Mills v. Union of India 1981 (1) SCR 206 to the effect that
the amended Article 31-C was constitutionally invalid. As the
aforesaid declaration would not revive the original Article 31-C, the
Article became a dead letter. When the same case travelled to five
learned Judges reported in (2001) 4 SCC 455, this Court was of the
opinion that the views expressed in Sanjeev Coke (supra) require
reconsideration in view of the fact that Sanjeev Coke (supra)
adopted the reasoning of Krishna Iyer, J. in State of Karnataka vs
Shri Ranganatha Reddy (1977) 4 SCC 471 and not the reasoning of
the majority judgment of Untwalai, J. who stated that he must not be
understood to agree with all that has been said by Krishna Iyer, J.
in his judgment. The Court, therefore, referred the matter to seven
learned Judges. When the matter came up before the seven
26
learned Judges, reported in (2013) 7 SCC 522, this Court held that
the statement made in Sanjeev Coke (supra), followed by several
other judgments, that the “material resources of the community”
would include privately owned resources, would be prima facie
incorrect and hence the matter was referred to nine learned Judges
of this Court, which reference is still pending. We have not deemed
it necessary to refer this case to be tagged along with the reference
to nine learned Judges, as we will assume for the purpose of this
case that Article 31-C, as originally enacted, continues to exist and
that the “material resources of the community” would include private
property as well.
14. Shri Divan next referred us to State of Tamil Nadu vs L. Abu
Kavur Bai (1984) 1 SCC 515, which held that the Tamil Nadu Stage
Carriage and Contract Carriages (Acquisition) Act, 1973 was
protected by Article 31-C of the Constitution of India. This was held
on the footing that a nationalisation measure would fall within Article
39(b) as the word “distribution” is a word of extremely wide import,
which would include nationalisation of transport as a distributive
process for the good of the community. This situation is far
removed from the Amendment Act to the National Highways Act in
the present case, which is not a nationalisation measure at all, but is
a measure to speed up the acquisition process. Shri Divan then
27
relied upon this Court’s judgment in Maharashtra SEB vs Thana
Electric Supply Co. (1989) 3 SCC 616, in which the Indian Electricity
(Maharashtra Amendment) Act, 1976 was engrafted on to the
Electricity Act, 1910, the effect of which was to substitute market
value of the undertaking that was compulsorily acquired, with the
concept of an “amount”, which was the book value of the
undertaking at the time of its delivery. Even as per this Act, by
virtue of the compulsory acquisition of the undertaking, the licensee
was given a solatium of 10% of such book value. Importantly, this
Court, after holding that nationalisation would come within the
expression “distribution” for the purposes of Article 39(b), engrafted
another test when legislation claims the protection of Article 31-C.
The Court held that the protection of Article 31-C is accorded only to
those provisions which are basically and essentially necessary for
giving effect to the objects of Article 39(b) – See paragraph 43. This
case is again distinguishable for the same reason as pointed out
qua State of Tamil Nadu v. L. Abu Kavur Bai (supra) as this is a
nationalisation measure far removed from the object of the 1997
Amendment Act to the National Highways Act. It is interesting to
note that despite the fact that a challenge under Articles 14 and 31
were bound to fail in view of the protective umbrella of Article 31-C,
yet the Amendment Act had still provided for 10% solatium as the
28
legislature had correctly appreciated that solatium is a part of
compensation given for the compulsory nature of acquisition of
property.
15. Shri Divan then referred us to Tinsukhia Electric Supply Co.
Ltd. vs State of Assam (1989) 3 SCC 709, in which the Indian
Electricity (Assam Amendment) Act, 1973 and the Tinsukhia and
Dibrugarh Electric Supply Undertakings (Acquisition) Act, 1973 were
challenged. These being nationalisation measures, this Court held
that these enactments were entitled to the protection of Article 31-C.
This nationalisation statute, again, is very far removed from the
Amendment Act, 1997 to the National Highways Act.
16. It is well-settled that in order that a law avail of the protection
of Article 31-C, it is not necessary that any declaration be made in
that behalf. (See State of Maharashtra vs Basantibai Mohanlal
Khetan (1986) 2 SCC 516 at 530). It is also important to remember
that in order that a law be shielded by Article 31-C, the said law
must have a direct and rational nexus with the principles contained
in Article 39(b). (See Assam Sillimanite Ltd. vs Union of India 1991
Supp 3 SCR 273 at 290)
29
17. An example of a law which claimed the benefit of Article 31-
C, but was denied such benefit is set out in Dr K. R. Lakshmanan vs
State of Tamil Nadu (1996) 2 SCC 226 as follows:
“44. The main object for which the Club was established
is to carry on the business of race-club, in particular the
running of horse-races, steeplechases or races of any
other kind and for any kind of athletic sports and for
playing their own games of cricket, bowls, golf, lawn
tennis, polo or any other kind of games or amusement,
recreation, sport or entertainment etc. In the earlier part
of this judgment, we have noticed the working of the
Club which shows that apart from 5% commission from
the totalizator and the bookmakers no part of the betting-
money comes to the Club. The Club does not own or
control any material resources of the community which
are to be distributed in terms of Article 39(b) of the
Constitution of India. There are two aspects of the
functioning of the Club. One is the betting by the punters
at the totalizator and with the bookies. The Club does
not earn any income from the betting-money except 5%
commission. There is no question whatsoever of the
Club owning or controlling the material resources of the
community or in any manner contributing towards the
operation of the economic system resulting in the
concentration of wealth and means of production to the
common detriment. The second aspect is the conduct of
horse-races by the Club. Horse-racing is a game of skill,
the horse which wins the race is given a prize by the
Club. It is a simple game of horse-racing where the
winning horses are given prizes. Neither the “material
resources of the community” nor “to subserve the
common good” has any relevance to the twin functioning
of the Club. Similarly, the operation of the Club has no
relation or effect on the “operation of the economic
system”. There is no question whatsoever of attracting
the Directive Principles contained in Article 39(b) and (c)
of the Constitution. The declaration in Section 2 of the
Act and the recital containing aims and objectives totally
30
betray the scope and purpose of Article 39(b) and (c) of
the Constitution. While Article 39(b) refers to “material
resources of the community”, the aims and objects of the
Act refer to “the material resources of the Madras Race
Club”. It is difficult to understand what exactly are the
material resources of the race-club which are sought to
be distributed so as to subserve the common good
within the meaning of the Directive Principles. Equally,
the reference to Article 39(c) is wholly misplaced. While
Article 39(c) relates to “the operation of the economic
system … to the common detriment”, the aims and
objectives of the Act refer to “the economic system of
the Madras Race Club”. What is meant by the economic
system of the Madras Race Club is not known. Even if it
is assumed that betting by the punters at the totalizator
and with the bookmakers is part of the economic system
of the Madras Race Club, it has no relevance to the
objectives specified in Article 39(b) and (c). We are,
therefore, of the view that reference to Article 39(b) and
(c) in the aims and objects and in Section 2 of the Act is
nothing but a mechanical reproduction of constitutional
provisions in a totally inappropriate context. There is no
nexus so far as the provisions of the 1986 Act are
concerned with the objectives contained in Article 39(b)
and (c) of the Constitution. We, therefore, hold that the
protection under Article 31-C of the Constitution cannot
be extended to the 1986 Act.”
This is despite the fact that the impugned enactment, namely, the
Madras Race Club (Acquisition and Transfer of Undertaking) Act,
1986 contained a declaration that it was enacted to give effect to the
policy of the State under Article 39(b) and (c).
18. When we examine the Objects and Reasons which led to the
1997 amendment of the National Highways Act, we do not find
mentioned therein any object relating to distribution of the material
31
resources of the community. The object of the Amendment Act has
no relationship whatsoever to the Directive Principle contained in
Article 39(b), inasmuch as its limited object is to expedite the
process of land acquisition by avoiding inordinate delays therein.
The object of the Amendment Act was not to acquire land for the
purpose of national highways as, pre-amendment, the Land
Acquisition Act provided for this. The object of the Amendment Act
was fulfilled by providing a scheme different from that contained in
the Land Acquisition Act, making it clear that the stage of offer of an
amount by way of compensation is removed altogether; vesting
takes place as soon as the Section 3D notification is issued; and
most importantly, the tardy Court process is replaced by arbitration.
Obviously, these objects have no direct and rational nexus with the
Directive Principle contained in Article 39(b). Article 31-C is,
therefore, out of harm’s way. Even otherwise, on the assumption
that Article 31-C is attracted to the facts of this case, yet, as was
held by Bhagwati, J. in Minerva Mills Ltd. v. Union of India 1981
(1) SCR 206,
“…it is not every provision of a statute, which has been
enacted with the dominant object of giving effect to a
directive principle, that it entitled to protection, but only
those provisions of the statute which are basically and
essentially necessary for giving effect to the directive
32
principle are protected under the amended Article 31-C”
(at page 338-339)
This passage was specifically referred to in Tinsukhia Electric
Supply Co. Ltd. vs State of Assam (1989) 3 SCC 709 at 735. Also,
in Maharashtra State Electricity Board vs Thana Electric Supply Co.
(1989) 3 SCC 616, at para 43, this Court said:
“43. The idea of nationalisation of a material resource of
the community cannot be divorced from the idea of
distribution of that resource in the community in a
manner which advances common good. The cognate
and sequential question would be whether the provisions
of the Amending Act, 1976, had a reasonable and direct
nexus with the objects of Article 39(b). It is true, the
protection of Article 31-C is accorded only to those
provisions which are basically and essentially
necessary for giving effect to the objects of Article 39(b).
The High Court from the trend of its reasoning in the
judgment, appears to take the view that while the
provision for the takeover in the principal Act might
amount to a power to acquire, however, the objects of
the Amending Act of 1976, which merely sought to beat
down the price could not be said to be part of that power
and was, therefore, incapable of establishing any nexus
with Article 39(b). There is, we say so with respect, a
fallacy in this reasoning.”
The test of Article 31-C’s protection being accorded only to those
provisions which are basically and essentially necessary for giving
effect to the objects of Article 39(b) is lifted from Akadasi Padhan vs
State of Orissa 1963 Supp. (2) SCR 691, where this Court held, with
reference to Article 19(6), that qua laws passed creating a State
33
monopoly, it is only those essential and basic provisions which are
protected by the latter part of Article 19(6). This Court stated the
test thus:
“17. In dealing with the question about the precise
denotation of the clause “a law relating to”, it is
necessary to bear in mind that this clause occurs in
Article 19(6) which is, in a sense, an exception to the
main provision of Article 19(1)(g). Laws protected by
Article 19(6) are regarded as valid even though they
impinge upon the fundamental right guaranteed under
Article 19(1)(g). That is the effect of the scheme
contained in Article 19(1) read with Clauses (2) to (6) of
the said Article. That being so, it would be unreasonable
to place upon the relevant clause an unduly wide and
liberal construction. “A law relating to” a State monopoly
cannot, in the context, include all the provisions
contained in the said law whether they have direct
relation with the creation of the monopoly or not. In our
opinion, the said expression should be construed to
mean the law relating to the monopoly in its absolutely
essential features. If a law is passed creating a State
monopoly, the Court should enquire what are the
provisions of the said law which are basically and
essentially necessary for creating the State monopoly. It
is only those essential and basic provisions which are
protected by the latter part of Article 19(6). If there are
other provisions made by the Act which are subsidiary,
incidental or helpful to the operation of the monopoly,
they do not fall under the said part and their validity must
be judged under the first part of Article 19(6). In other
words, the effect of the amendment made in Article 19(6)
is to protect the law relating to the creation of monopoly
and that means that it is only the provisions of the law
which are integrally and essentially connected with the
creation of the monopoly that are protected. The rest of
the provisions which may be incidental do not fall under
the latter part of Article 19(6) and would inevitably have
to satisfy the test of the first part of Article 19(6).” (at
page 707)
34
Even if the Amendment Act, 1997 be regarded as an Act to carry out
the purposes of Article 39(b), the object of the Amendment Act is not
served by removing solatium and interest from compensation to be
awarded. It is obvious, therefore, that the grant of compensation
without solatium and interest is not basically and essentially
necessary to carry out the object of the Amendment Act, 1997, even
if it is to be considered as an acquisition Act pure and simple, for the
object of the said Amendment Act as we have seen is to obviate
delays in the acquisition process of acquiring land for National
Highways. On application of this test as well, it is clear that the
grant of compensation without solatium and interest, not being
basically and essentially necessary to carry out the object of the
Amendment Act, would not receive the protective umbrella of Article
31-C and, therefore, any infraction of Article 14 can be inquired into
by the Court.
Article 14 - Discrimination
19. The sheet anchor of the case of the Respondents is the
Constitution Bench judgment in P. Vajravelu Mudaliar vs Special
Deputy Collector for Land Acquisition (1965) 1 SCR 614 and
Nagpur Improvement Trust vs Vithal Rao (1973) 1 SCC 500. It is,
35
therefore, most important to advert to these two decisions in some
detail.
20. In P. Vajravelu Mudaliar (supra), the Madras Legislature
amended the Land Acquisition Act providing for acquisition of land
for housing schemes by laying down principles for fixing
compensation different from those prescribed in the principal Act.
These differences are set out in the judgment as follows:
“The next question is whether the amending Act was
made in contravention of Article 31(2) of the
Constitution. The amending Act prescribes the principles
for ascertaining the value of the property acquired. It
was passed to amend the Land Acquisition Act, 1894, in
the State of Madras for the purpose of enabling the
State to acquire lands for housing schemes. “Housing
scheme” is defined to mean “any State Government
scheme the purpose of which is increasing house
accommodation” and under Section 3 of the amending
Act, Section 23 of the principal Act is made applicable to
such acquisition with certain modifications. In Section 23
of the principal Act, in sub-section (1) for clause first, the
following clause is substituted:
“first, the market value of the land at the date of
the publication of the notification under Section
4, sub-section (1) or an amount equal to the
average market value of the land during the five
years immediately preceding such date,
whichever is less.”
After clause sixthly, the following clause was added:
“seventhly, the use to which the land was put at
the date of the publication of the notification
under Section 4, sub-section (1).”
36
Sub-section (2) of Section 23 of the principal Act was
amended by substituting the words, in respect of
solatium, “fifteen per centum” by the words “five per
centum”. In Section 24 of the principal Act after the
clause seventhly the following clause was added:
“eighthly, any increase to the value of the land
acquired by reason of its suitability or
adaptability for any use other than the use to
which the land was put at the date of the
publication of the notification under Section 4,
sub-section (1).”
Under Section 4 of the amending Act, the provisions of
Section 3 thereof shall apply to every case in which
proceedings have been started before the
commencement of the said Act and are pending. The
result of the amending Act is that if the State
Government acquires a land for a housing purpose, the
claimant gets only the value of the land at the date of the
publication of the notification under Section 4(1) of the
principal Act or an amount equal to the average market
value of the land during the five years immediately
preceding such date, whichever is less. He will get a
solatium of only 5 per centum of such value instead of
15 per centum under the principal Act. He will not get
any compensation by reason of the suitability of the land
for any use other than the use for which it was put on the
date of publication of the notification.” (at page 629 &
630)
A challenge made to the said Amendment Act on the ground
that it is hit by Article 14 succeeded, the Court holding:
“Now what are the differences between persons owning
lands in the Madras city or between the lands acquired
which have a reasonable relation to the said object. It is
suggested that the differences between people owning
lands rested on the extent, quality and the suitability of
the lands acquired for the said object. The differences
37
based upon the said criteria have no relevance to the
object of the Amending Act. To illustrate: the extent of
the land depends upon the magnitude of the scheme
undertaken by the State. A large extent of land may be
acquired for a university or for a network of hospitals
under the provisions of the principal Act and also for a
housing scheme under the Amending Act. So too, if the
housing scheme is a limited one, the land acquired may
not be as big as that required for a big university. If
waste land is good for a housing scheme under the
amending Act, it will equally be suitable for a hospital or
a school for which the said land may be acquired under
the principal Act. Nor the financial position or the number
of persons owning the land has any relevance, for in
both the cases land can be acquired from rich or poor,
from one individual or from a number of persons. Out of
adjacent lands of the same quality and value, one may
be acquired for a housing scheme under the amending
Act and the other for a hospital under the principal Act;
out of two adjacent plots belonging to the same
individual and of the same quality and value, one may
be acquired under the principal Act and the other under
the Amending Act. From whatever aspect the matter is
looked at, the alleged differences have no reasonable
relation to the object sought to be achieved. It is said
that the object of the amending Act in itself may project
the differences in the lands sought to be acquired under
the two Acts. This argument puts the cart before the
horse. It is one thing to say that the existing differences
between persons and properties have a reasonable
relation to the object sought to be achieved and it is
totally a different thing to say that the object of the Act
itself created the differences. Assuming that the said
proposition is sound, we cannot discover any differences
in the people owning lands or in the lands on the basis
of the object. The object is to acquire lands for housing
schemes at a low price. For achieving that object, any
land falling in any of the said categories can be acquired
under the amending Act. So too, for a public purpose
any such land can be acquired under the principal Act.
We, therefore, hold that discrimination is writ large on
the amending Act and it cannot be sustained on the
principle of reasonable classification. We, therefore, hold
38
that the amending Act clearly infringes Article 14 of the
Constitution and is void.” (at page 634 & 635)
(Emphasis supplied)
21. In Nagpur Improvement Trust (supra), this Court referred to
the Nagpur Improvement Trust Act, under which lands were to be
acquired with reference to the Land Acquisition Act, as modified.
We are concerned in this case with the modification that has to do
with acquisition for the purposes of the Improvement Act, which did
not provide for solatium of 15% that would have been obtained
under the Land Acquisition Act. A Seven-Judge Bench of this Court
examined the matter in some detail, and followed P. Vajravelu
Mudaliar (supra) together with another judgment, Balammal vs
State of Madras (1969) 1 SCR 90. The Court held:
“27. What can be reasonable classification for the
purpose of determining compensation if the object of the
legislation is to compulsorily acquire land for public
purposes?
28. It would not be disputed that different principles of
compensation cannot be formulated for lands acquired
on the basis that the owner is old or young, healthy or ill,
tall or short, or whether the owner has inherited the
property or built it with his own efforts, or whether the
owner is politician or an advocate. Why is this sort of
classification not sustainable? Because the object being
to compulsorily acquire for a public purpose, the object
is equally achieved whether the land belongs to one type
of owner or another type.
39
29. Can classification be made on the basis of the public
purpose for the purpose of compensation for which land
is acquired? In other words can the Legislature lay down
different principles of compensation for lands acquired
say for a hospital or a school or a Government building?
Can the Legislature say that for a hospital land will be
acquired at 50% of the market value, for a school at 60%
of the value and for a Government building at 70% of the
market value? All three objects are public purposes and
as far as the owner is concerned it does not matter to
him whether it is one public purpose or the other. Article
14 confers an individual right and in order to justify a
classification there should be something which justifies a
different treatment to this individual right. It seems to us
that ordinarily a classification based on the public
purpose is not permissible under Article 14 for the
purpose of determining compensation. The position is
different when the owner of the land himself is the
recipient of benefits from an improvement scheme, and
the benefit to him is taken into consideration in fixing
compensation. Can classification be made on the basis
of the authority acquiring the land? In other words can
different principles of compensation be laid if the land is
acquired for or by an Improvement Trust or Municipal
Corporation or the Government? It seems to us that the
answer is in the negative because as far as the owner is
concerned it does not matter to him whether the land is
acquired by one authority or the other.
30. It is equally immaterial whether it is one Acquisition
Act or another Acquisition Act under which the land is
acquired. If the existence of two Acts could enable the
State to give one owner different treatment from another
equally situated the owner who is discriminated against,
can claim the protection of Article 14.”
22. Both, P. Vajravelu Mudaliar (supra) and Nagpur
Improvement Trust (supra) clinch the issue in favour of the
Respondents, as has been correctly held by the Punjab and
40
Haryana High Court in M/s Golden Iron and Steel Forging (supra).
First and foremost, it is important to note that, as has been seen
hereinabove, the object of the 1997 Amendment was to speed up
the process of acquiring lands for National Highways. This object
has been achieved in the manner set out hereinabove. It will be
noticed that the awarding of solatium and interest has nothing to do
with achieving this object, as it is nobody’s case that land
acquisition for the purpose of national highways slows down as a
result of award of solatium and interest. Thus, a classification made
between different sets of landowners whose lands happen to be
acquired for the purpose of National Highways and landowners
whose lands are acquired for other public purposes has no rational
relation to the object sought to be achieved by the Amendment Act,
i.e. speedy acquisition of lands for the purpose of National
Highways. On this ground alone, the Amendment Act falls foul of
Article 14.
23. Even otherwise, in P. Vajravelu Mudaliar (supra), despite
the fact that the object of the Amendment Act was to acquire lands
for housing schemes at a low price, yet the Amendment Act was
struck down when it provided for solatium at the rate of 5% instead
of 15%, that was provided in the Land Acquisition Act, the Court
41
holding that whether adjacent lands of the same quality and value
are acquired for a housing scheme or some other public purpose
such as a hospital is a differentiation between two sets of
landowners having no reasonable relation to the object sought to be
achieved. More pertinently, another example is given – out of two
adjacent plots belonging to the same individual one may be
acquired under the principal Act for a particular public purpose and
one acquired under the Amending Act for a housing scheme, which,
when looked at from the point of view of the landowner, would be
discriminatory, having no rational relation to the object sought to be
achieved, which is compulsory acquisition of property for public
purposes.
24. Nagpur Improvement Trust (supra) has clearly held that
ordinarily a classification based on public purpose is not permissible
under Article 14 for the purpose of determining compensation. Also,
in para 30, the Seven-Judge Bench unequivocally states that it is
immaterial whether it is one Acquisition Act or another Acquisition
Act under which the land is acquired, as, if the existence of these
two Acts would enable the State to give one owner different
treatment from another who is similarly situated, Article 14 would be
infracted. In the facts of these cases, it is clear that from the point
42
of view of the landowner it is immaterial that his land is acquired
under the National Highways Act and not the Land Acquisition Act,
as solatium cannot be denied on account of this fact alone.
25. A contention was taken by Shri Divan in that Article 31-A
second proviso would make it clear that compensation at a rate
which shall not be less than the market value would be payable only
in the circumstances mentioned therein and not otherwise. For this
reason, the Nagpur Improvement Trust case is distinguishable, as
one of the instances given therein is that it would not be possible to
discriminate between landowners who are similarly situate by giving
one landowner compensation at let us say 60% of the market value
and the other owner 100% of the market value.
26. The Nagpur Improvement Trust case has to be read as a
whole. Merely emphasising one example from the passages that
have been extracted above (supra) will not make the ratio of the
said judgment inapplicable. Besides, the second proviso to Article
31-A deals with persons whose lands are acquired when such
person is cultivating the same personally. The reason for awarding
compensation at a rate which is not less than market value is in
order that a farmer, who is cultivating the land personally, gets other
land of equivalent value, which he can then cultivate personally. As
such farmer is at the centre of agrarian reform legislation, such
43
legislation would be turned on its head if lands were to be acquired
without adequately compensating him instead of from absentee
landlords whose lands are then to be given to the landless and to
such persons if they personally cultivate lands less than the ceiling
area under State Agricultural Ceiling Acts. We think that any
reference to the second proviso of Article 31-A is wholly irrelevant to
the question before us and cannot under any circumstance be used
in order to distinguish a judgment which otherwise applies on all
fours.
27. However, it was argued that a line of judgments have
distinguished P. Vajravelu Mudaliar (supra) and Nagpur
Improvement Trust (supra) and that this line of judgments should
be followed in preference to the aforesaid two judgments.
28. In Union of India vs Hari Krishnan Khosla 1993 Supp (2)
SCC 149, this Court upheld the Requisitioning and Acquisition of
Immovable Property Act, 1952 and stated that non-grant of solatium
and interest which were otherwise grantable under the Land
Acquisition Act would not render the 1952 Act constitutionally infirm.
The Court undertook a minute distinction between the Land
Acquisition Act on the one hand and the 1952 Act on the other.
Thus, the Court stated:
44
“43. Coming to dissimilarities, in the case of requisition,
one of the important rights in the bundle of rights
emanating from ownership, namely, the right to
possession and enjoyment has been deprived of, when
the property was requisitioned. It is minus that right for
which, as stated above, the compensation is provided
under Section 8(2), the remaining rights come to be
acquired.
44. In contradistinction under the Land Acquisition Act,
as stated above, the sum total of the rights, namely, the
ownership itself comes to be acquired. We may usefully
quote from Salmond on Jurisprudence (1966) 12th Edn.,
Chapter 8 at pages 246-247:
“Ownership denotes the relation between a
person and an object forming the subject-matter of his
ownership. It consists in a complex of rights, all of
which are rights in rem, being good against all the
world and not merely against specific persons.
Though in certain situations some of these rights may
be absent, the normal case of ownership can be
expected to exhibit the following incidents.
First, the owner will have a right to possess the thing
which he owns….
Secondly, the owner normally has the right to use and
enjoy the thing owned: the right to manage it, i.e., the
right to decide how it shall be used; and the right to
the income from it ….
* * *
Fifthly, ownership has a residuary character. If, for
example, a landowner gives a lease of his property
to A, an easement to B and some other right such as
a profit to C, his ownership now consists of the
residual rights, i.e., the rights remaining when all
these lesser rights have been given away ….”
45. Then again, under the Act, the acquisition even
though it is for a public purpose is restricted to the two
clauses of Section 7(3) of the Act to which we have
45
already made a reference. Thus two clauses of Section
7(3) constitute statutory embargo.
46. Under the Land Acquisition Act, the power of
eminent domain could be exercised without any
embargo so long as there is an underlying public
purpose. In our considered view, these vital distinctions
will have to be kept in mind while dealing with the
question of violation of Article 14 of the Constitution. We
may, at once, state, when examined in this light, the
reasonings of the High Court to make out a case of
discrimination, seem to be incorrect.
xxx xxx xxx
58. We are of the firm view that cases of acquisition of
land stand on a different footing than those where such
property is subject to a prior requisition before
acquisition.
59. Therefore, the cases relating to acquisition
like Vajravelu Mudaliar case [(1965) 1 SCR 614 : AIR
1965 SC 1017], Balammal case [(1969) 1 SCR 90 : AIR
1968 SC 1425], Nagpur Improvement Trust case [(1973)
1 SCC 500] and Peter case [(1980) 3 SCC 554] are not
helpful in deciding the point in issue
here. Goverdhan v. Union of India (Civil Appeal No. 3058
of 1983, allowed by this Court on January 31, 1983) no
doubt was a case of acquisition under the Defence of
India Act, 1962 but it contains no discussion. It has
already been noticed that the award of solatium is not a
must in every case as laid down in Prakash Amichand
Shah case [(1986) 1 SCC 581]”
29. Similarly, in Union of India vs Chajju Ram (2003) 5 SCC 568,
a case which arose under the Defence of India Act, 1971, this Court
followed Hari Krishnan Khosla (supra), finding that the provisions
of the Defence of India Act were in pari materia to those of the 1952
Act. The Court, therefore, held:
46
“25. Here it is not a case where existence of the
Acquisition Act enables the State to give one owner
different treatment from another equally situated owner
on which ground Article 14 was sought to be invoked
in First Nagpur Improvement Trust case [(1973) 1 SCC
500]. The purposes for which the provisions of the said
Act can be invoked are absolutely different and distinct
from which the provision of the Land Acquisition Act can
be invoked for acquisition of land. In terms of the
provisions of the said Act, the requisition of the land was
made. During the period of requisition the owner of the
land is to be compensated therefor. Section 30 of the
said Act, as referred to hereinbefore, clearly postulates
the circumstances which would be attracted for
acquisitioning of the requisitioned land.
26. The purposes for which the requisitioning and
consequent acquisition of land under the said Act can be
made, are limited. Such acquisitions, inter alia, can be
made only when works have been constructed during
the period of requisition or where the costs to any
Government of restoring the property to its condition at
the time of its requisition would be excessive having
regard to the value of the property at the relevant time.
27. One of the principles for determination of the amount
of compensation for acquisition of land would be the
willingness of an informed buyer to offer the price
therefor. In terms of the provisions of the said Act
acquisition of the property would be in relation to the
property which has been under requisition during which
period the owner of the land would remain out of
possession. The Government during the period of
requisition would be in possession and full enjoyment of
the property.
28. It is beyond any cavil that the price of the land which
a willing and informed buyer would offer would be
different in the cases where the owner is in possession
and enjoyment of the property and in the cases where
he is not. The formulation of the criteria for payment of
compensation in terms of Section 31 of the Act was
clearly made having regard to the said factor, which
cannot be said to be arbitrary or unreasonable.
47
Parliament while making the provisions for payment of
compensation must have also taken into consideration
the fact that the owner of the property would have
received compensation for remaining out of possession
during the period when the property was under
acquisition.
29. The learned Attorney-General appears to be correct
in his submission that the provision for grant of solatium
was inserted in the Land Acquisition Act by Parliament
having regard to the fact that the amount of
compensation awarded to the owner of the land is to be
determined on the basis of the value thereof as on the
date of issuance of the notification under Section 4 of
the Act. It has been noticed that the process takes a long
time. Taking into consideration the deficiencies in the
Act, the Land Acquisition Act was further amended in the
year 1984. In terms of sub-section (2) of Section 23 of
the Land Acquisition Act, therefore, solatium is paid in
addition to the amount of market value of the land.
30. We are, therefore, of the opinion that the
classification sought to be made for determination of the
amount of compensation for acquisition of the land
under the said Act vis-à-vis the Land Acquisition Act is a
reasonable and valid one. The said classification is
founded on intelligible differentia and has a rational
relation with the object sought to be achieved by the
legislation in question.”
30. We may hasten to add that a Division Bench of this Court in
H. V. Low and Company Private Ltd. vs. State of West Bengal
(2016) 12 SCC 699 has found on a prima facie examination that the
case of Chajju Ram (supra) requires reconsideration.
31. For our purposes, it is enough to state that the line of
judgments under the 1952 Act and the Defence of India Act, 1971,
48
which contained a two-step process, namely, requisition which may
be followed by acquisition, are wholly distinguishable for the
reasons stated in those judgments. As was stated in Chajju Ram
(supra), the object of a Requisition Act is completely different from
an Acquisition Act. In a Requisition Act, private property is taken for
public purposes only temporarily – when the reason for requisition
ends, ordinarily the property is handed back to the owner. This
being the case, in requisition statutes handing back of the property
is the rule and acquisition of the property the exception, as property
can only be acquired for the two reasons set out in Section 7 of the
1952 Act and Section 30 of the Defence of India Act, 1971. Also, as
has been pointed out in Hari Krishnan Khosla (supra), what gets
acquired is only rights as to ownership, possession having been
taken over by requisition. In addition, the owner has already
received compensation for remaining out of possession during the
period when the property is under requisition. For all these reasons,
the aforesaid judgments are wholly distinguishable from the
acquisition measure in this case.
32. The next judgment relied upon by the learned counsel on
behalf of the Appellants is Prakash Amichand Shah vs State of
Gujarat (1986) 1 SCC 581. This judgment contained a challenge to
49
the Bombay Town Planning Act. The Nagpur Improvement Trust
(supra) judgment was distinguished in this judgment by stating that
the scheme of the Bombay Town Planning Act is wholly different
from the scheme of the Land Acquisition Act. In particular, the Court
held:
“34. … Under Section 53 of the Act all rights of the
private owners in the original plots would determine and
certain consequential rights in favour of the owners
would arise therefrom. If in the scheme, reconstituted or
final plots are allotted to them they become owners of
such final plots subject to the rights settled by the Town
Planning Officer in the final scheme. In some cases the
original plot of an owner might completely be allotted to
the local authority for a public purpose. Such private
owner may be paid compensation or a reconstituted plot
in some other place. It may be a smaller or a bigger plot.
It may be that in some cases it may not be possible to
allot a final plot at all. Sections 67 to 71 of the Act
provide for certain financial adjustments regarding
payment of money to the local authority or to the owners
of the original plots. The development and planning
carried out under the Act is primarily for the benefit of
public. The local authority is under an obligation to
function according to the Act. The local authority has to
bear a part of the expenses of development. It is in one
sense a package deal. The proceedings relating to the
scheme are not like acquisition proceedings under the
Land Acquisition Act, 1894. Nor are the provisions of the
Land Acquisition Act, 1894 made applicable either
without or with modifications as in the case of the
Nagpur Improvement Trust Act, 1936. We do not
understand the decision in Nagpur Improvement Trust
case [(1973) 1 SCC 500 : AIR 1973 SC 689 : (1973) 3
SCR 39] as laying down generally that wherever land is
taken away by the government under a separate statute
compensation should be paid under the Land Acquisition
Act, 1894 only and if there is any difference between the
50
compensation payable under the Land Acquisition Act,
1894 and the compensation payable under the statute
concerned the acquisition under the statute would be
discriminatory. That case is distinguishable from the
present case. In State of Kerala v. T.M. Peter [(1980) 3
SCC 554 : AIR 1980 SC 1438 : (1980) 3 SCR 290] also
Section 34 of the Cochin Town Planning Act which came
up for consideration was of the same pattern as the
provision in the Nagpur Improvement Trust Act, 1936
and for that reason the court followed the decision in
the Nagpur Improvement Trust case [(1973) 1 SCC 500 :
AIR 1973 SC 689 : (1973) 3 SCR 39] . But in that
decision itself the court observed at pp. 302 and 303
thus: (SCC p. 564, para 21)
“We are not to be understood to mean that the rate of
compensation may not vary or must be uniform in all
cases. We need not investigate this question further
as it does not arise here although we are clear in our
mind that under given circumstances differentiation
even in the scale of compensation may comfortably
comport with Article 14. No such circumstances are
present here nor pressed.”
33. This judgment is again distinguishable in that it was found,
having regard to the Bombay Town Planning Act, that the person
from whom the land was expropriated gets a package deal in that
he may be allotted other lands in the final Town Planning Scheme,
apart from compensation that is payable. However, it is worthy of
comment that State of Kerala vs T. M. Peter (1980) 3 SCC 554,
which was relied upon in this case, expressly followed Nagpur
Improvement Trust (supra), holding:
51
“20. Is it rational to pay different scales of compensation,
as pointed out by Sikri, C.J., in Nagpur Improvement
Trust case [Nagpur Improvement Trust v. Vithal Rao,
(1973) 1 SCC 500 : AIR 1973 SC 689 : (1973) 3 SCR
39], depending on whether you acquire for housing or
hospital, irrigation scheme or town improvement, school
building or police station? The amount of compensation
payable has no bearing on this distinction, although it is
conceivable that classification for purposes of
compensation may exist and in such cases the statute
may be good. We are unable to discern any valid
discrimen in the Town Planning Act vis-a-vis the Land
Acquisition Act warranting a classification in the matter
of denial of solatium.
21. We uphold the Act in other respects but not when it
deals invidiously between two owners based on an
irrelevant criterion viz. the acquisition being for an
improvement scheme. We are not to be understood to
mean that the rate of compensation may not vary or
must be uniform in all cases. We need not investigate
this question further as it does not arise here although
we are clear in our minds that under given
circumstances differentiation even in the scale of
compensation may comfortably comport with Article 14.
No such circumstances are present here nor pressed.
Indeed, the State, realising the force of this facet of
discrimination, offered, expiratory fashion, both before
the High Court and before us, to pay 15%, solatium to
obliterate the hostile distinction.
22. The core question now arises. What is the effect
even if we read a discrimination design in Section 34? Is
plastic surgery permissible or demolition of the section
inevitable? Assuming that there is an untenable
discrimination in the matter of compensation does the
whole of Section 34 have to be liquidated or several
portions voided? In our opinion, scuttling the section, the
course the High Court has chosen, should be the last
step. The court uses its writ power with a constructive
design, an affirmative slant and a sustaining bent. Even
when by compulsions of inseverability, a destructive
stroke becomes necessary the court minimises the injury
52
by an intelligent containment. Law keeps alive and
“operation pull down” is de mode. Viewed from this
perspective, so far as we are able to see, the only
discriminatory factor as between Section 34 of the Act
and Section 25 of the Land Acquisition Act vis-à-vis
quantification of compensation is the nonpayment of
solatium in the former case because of the provision in
Section 34(1) that Section 25 of the Land Acquisition Act
shall have no application. Thus, to achieve the virtue of
equality and to eliminate the vice of inequality what is
needed is the obliteration of Section 25 of the Land
Acquisition Act from Section 34(1) of the Town Planning
Act. The whole of Section 34(1) does not have to be
struck down. Once we exclude the discriminatory and,
therefore, void part in Section 34(1) of the Act, equality is
restored. The owner will then be entitled to the same
compensation, including solatium, that he may be
eligible for under the Land Acquisition Act. What is
rendered void by Article 13 is only “to the extent of the
contravention” of Article 14. The lancet of the court may
remove the offending words and restore to constitutional
health the rest of the provision.
23. We hold that the exclusion of Section 25 of the Land
Acquisition Act from Section 34 of the Act is
unconstitutional but it is severable and we sever it. The
necessary consequence is that Section 34(1) will be
read omitting the words “and Section 25”. What follows
then? Section 32 obligates the State to act under the
Land Acquisition Act but we have struck down that part
which excludes Section 25, of the Land Acquisition Act
and so, the “modification” no longer covers Section 25. It
continues to apply to the acquisition of property under
the Town Planning Act. Section 34(2) provides for
compensation exactly like Section 25(1) of the Land
Acquisition Act and in the light of what we have just
decided Section 25(2) will also apply and “in addition to
the market value of the land as above provided, the
court shall in every case award a sum of fifteen per
centum on such market value in consideration of the
compulsory nature of the acquisition”.
53
34. One more judgment needs to be referred to, namely, Girnar
Traders (3) vs State of Maharashtra (2011) 3 SCC 1, which was
relied upon by Shri Divan to argue that, like Chapter VII of the
Maharashtra Regional and Town Planning Act, the amendment to
the National Highways Act is a complete self-contained code and
must, therefore, be followed on its own terms. This judgment dealt
with whether Section 11-A introduced by the 1984 amendment to
the Land Acquisition Act could be said to apply to acquisitions made
under the Maharashtra Regional Town Planning Act. The answer to
this question was that Section 11-A could not be so applied as the
Maharashtra Regional Town Planning Act referred to the Land
Acquisition Act as legislation by way of incorporation and not
legislation by way of reference. In the present case, the Land
Acquisition Act, by virtue of Section 3J of the National Highways Act,
does not apply at all. The controversy in the present case does not,
in any manner, involve whether the Land Acquisition Act applies by
way of incorporation or reference. This case is also, therefore,
wholly distinguishable. Further, the ‘self-contained code’ argument
based on this judgment cannot be used as a discriminatory tool to
deny benefits available to landowners merely because land has to
be acquired under a different Act, as has been held in Nagpur
Improvement Trust (supra).
54
35. Shri Mukul Rohatgi, learned Senior Advocate appearing on
behalf of the Union of India and NHAI, has stated that under Section
3G(2) of the National Highways Act, where the right of user or any
right in the nature of an easement on land is acquired under the Act,
there shall be paid to the owner and any other person whose right is
so affected, an amount calculated at 10% of the amount that is
determined as payable by the order of the competent authority.
According to the learned Senior Advocate, this amount is not
payable under the Land Acquisition Act, 1894, and that this being
the case, it is clear that what is given by way of compensation under
the National Highways Act being more than what is given under the
Land Acquisition Act in certain respects, the Scheme of the Acts,
therefore, being different, the non-giving of solatium and interest
under the National Highways Act is justified. Even otherwise,
persons should not be given compensation under Section 3G(2) as
a matter of course, but would have to submit proof that a right of
easement or a right of user has been acquired for which
compensation ought to be paid. Shri Amit Sibal, learned Senior
Advocate, on the other hand, has argued, referring to Sections 3(b),
9 and 31(1) of the Land Acquisition Act that easementary rights are
compensated even under the Land Acquisition Act and in point of
fact the sum of 10% payable under Section 3G(2) of the National
55
Highways Act is really in the nature of a cap beyond which no
further compensation can be granted. Even otherwise, according
to the learned Senior Advocate, granting of compensation under
Section 3G(2) would have no bearing on interest and solatium that
is payable under the Land Acquisition Act and not under the
National Highways Act.
36. Section 3G(2) makes it clear that rights of user and rights in
the nature of easement being valuable property rights,
compensation must be payable therefor. It is obvious that there is
no double payment to the owner on this score as the owner and/or
any other person has to prove that a right in the nature of an
easement has also been taken away. Obviously, the right of user
being subsumed in acquisition of ownership, the owner cannot get a
double benefit on this score. The right of user is, therefore,
referable only to persons other than the owner, who may have
tenancy rights, and other rights of license on land which is acquired
under the National Highways Act.
37. Insofar as easementary rights under the Land Acquisition Act
are concerned, three Sections are relevant and need to be quoted:
“3. Definitions.— In this Act, unless there is something
repugnant in the subject or context,—
56
xxx xxx
(b) the expression “person interested” includes all
persons claiming an interest in compensation to be
made on account of the acquisition of land under this
Act; and a person shall be deemed to be interested in
land if he is interested in an easement affecting the land;
xxx xxx
9. Notice to persons interested.— (1) The Collector shall
then cause public notice to be given at convenient
places on or near the land to be taken, stating that the
Government intends to take possession of the land, and
that claims to compensation for all interests in such land
may be made to him.
(2) Such notice shall state the particulars of the land so
needed, and shall require all persons interested in the
land to appear personally or by agent before the
Collector at a time and place therein mentioned (such
time not being earlier than fifteen days after the date of
publication of the notice), and to state the nature of their
respective interests in the land and the amount and
particulars of their claims to compensation for such
interests, and their objections (if any) to the
measurements made under section 8. The Collector
may in any case require such statement to be made in
writing and signed by the party or his agent.
(3) The Collector shall also serve notice to the same
effect on the occupier (if any) of such land and on all
such persons known or believed to be interested therein,
or to be entitled to act for persons so interested, as
reside or have agents authorised to receive service on
their behalf, within the revenue district in which the land
is situate.
(4) In case any person so interested resides elsewhere,
and has no such agent the notice shall be sent to him by
post in a letter addressed to him at his last known
residence, address or place of business and registered
under sections 28 and 29 of the Indian Post Office Act,
1898 (6 of 1898).
57
xxx xxx
31. Payment of compensation or deposit of same in
Court.— (1) On making an award under section 11, the
Collector shall tender payment of the compensation
awarded by him to the persons interested entitled
thereto according to the award, and shall pay it to them
unless prevented by some one or more of the
contingencies mentioned in the next sub-section.
xxx xxx”
A reading of these Sections shows that a person who is interested
in an easement affecting land can claim compensation therefor
under the aforesaid provisions of the Land Acquisition Act. Under
both the Land Acquisition Act and the National Highways Act, such
claims have to be proved in accordance with law, the difference
being that under the Land Acquisition Act actuals are payable,
whereas under the National Highways Act, a fixed amount of 10% of
the amount determined by the competent authority is payable. It is,
therefore, wholly incorrect to state that extra amounts are payable to
the owner under the National Highways Act, which are not so
payable under the Land Acquisition Act. Also, both Acts
contemplate payment of compensation to persons whose
easementary rights have been affected by the acquisition. In any
event, this contention cannot possibly answer non-payment of
solatium and interest under the National Highways Act, which has
been dealt with in extenso in this judgment.
58
38. It is worthy of note that even in acquisitions that take place
under the National Highways Act and the 1952 Act, the notification
of 2015 under the new Acquisition Act of 2013 makes solatium and
interest payable in cases covered by both Acts. In fact, with effect
from 1st January, 2015, an Amendment Ordinance No.9 of 2014 was
promulgated amending the 2013 Act. Section 10 of the said
amendment Ordinance states as follows:
“10. In the principal Act, in section 105,-
(i) for sub-section (3), the following sub-section shall be
substituted, namely:-
“(3) The provisions of this Act relating to the
determination of compensation in accordance
with the First Schedule, rehabilitation and
resettlement in accordance with the Second
Schedule and infrastructure amenities in
accordance with the Third Schedule shall apply
to the enactments relating to land acquisition
specified in the Fourth Schedule with effect from
1st January, 2015.”;
(ii) sub-section (4) shall be omitted.”
It is only when this Ordinance lapsed that the notification dated 28 th
August, 2015 was then made under Section 113 of the 2013 Act.
This notification is important and states as follows:
“MINISTRY OF RURAL DEVELOPMENT
ORDER
59
New Delhi, the 28th August, 2015 S.O. 2368(E).— Whereas, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013) (hereinafter referred to as the RFCTLARR Act) came into effect from 1st January, 2014;
And whereas, sub-section (3) of Section 105 of the RFCLTARR Act provided for issuing of notification to make the provisions of the Act relating to the determination of the compensation, rehabilitation and resettlement applicable to cases of land acquisition under the enactments specified in the Fourth Schedule to the RFCTLARR Act;
And whereas, the notification envisaged under sub- section (3) of Section 105 of RFCTLARR Act was not issued, and the RFCTLARR (Amendment) Ordinance, 2014 (9 of 2014) was promulgated on 31st December, 2014, thereby, inter-alia, amending Section 105 of the RFCTLARR Act to extend the provisions of the Act relating to the determination of the compensation and rehabilitation and resettlement to cases of land acquisition under the enactments specified in the Fourth Schedule to the RFCTLARR Act;
And whereas, the RFCTLARR (Amendment) Ordinance, 2015 (4 of 2015) was promulgated on 3rd April, 2015 to give continuity to the provisions of the RFCTLARR (Amendment) Ordinance, 2014;
And whereas, the RFCTLARR (Amendment) Second Ordinance, 2015 (5 of 2015) was promulgated on 30th May, 2015 to give continuity to the provisions of the RFCTLARR (Amendment) Ordinance, 2015 (4 of 2015); And whereas, the replacement Bill relating to the RFCTLARR (Amendment) Ordinance, 2015 (4 of 2015) was referred to the Joint Committee of the Houses for examination and report and the same is pending with the Joint Committee;
As whereas, as per the provisions of article 123 of the Constitution, the RFCTLARR (Amendment) Second 60 Ordinance, 2015 (5 of 2015) shall lapse on the 31st day of August, 2015 and thereby placing the land owners at the disadvantageous position, resulting in denial of benefits of enhanced compensation and rehabilitation and resettlement to the cases of land acquisition under the 13 Acts specified in the Fourth Schedule to the RFCTLARR Act as extended to the land owners under the said Ordinance;
And whereas, the Central Government considers it necessary to extend the benefits available to the land owners under the RFCTLARR Act to similarly placed land owners whose lands are acquired under the 13 enactments specified in the Fourth Schedule; and accordingly the Central Government keeping in view the aforesaid difficulties has decided to extend the beneficial advantage to the land owners and uniformly apply the beneficial provisions of the RFCTLARR Act, relating to the determination of compensation and rehabilitation and resettlement as were made applicable to cases of land acquisition under the said enactments in the interest of the land owners;
Now, therefore, in exercise of the powers conferred by sub-section (1) of Section 113 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013), the Central Government hereby makes the following Order to remove the aforesaid difficulties, namely;-
1. (1) This Order may be called the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Removal of Difficulties) Order, 2015.
(2) It shall come into force with effect from the 1st day of September, 2015.
2. The provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure 61 amenities in accordance with the Third Schedule shall apply to all cases of land acquisition under the enactments specified in the Fourth Schedule to the said Act.
[F.No. 13011/01/2014-LRD] K. P. KRISHNAN, Addl. Secy.” It is thus clear that the Ordinance as well as the notification have applied the principle contained in Nagpur Improvement Trust (supra), as the Central Government has considered it necessary to extend the benefits available to landowners generally under the 2013 Act to similarly placed landowners whose lands are acquired under the 13 enactments specified in the Fourth Schedule, the National Highways Act being one of the aforesaid enactments. This being the case, it is clear that the Government has itself accepted that the principle of Nagpur Improvement Trust (supra) would apply to acquisitions which take place under the National Highways Act, and that solatium and interest would be payable under the 2013 Act to persons whose lands are acquired for the purpose of National Highways as they are similarly placed to those landowners whose lands have been acquired for other public purposes under the 2013 Act. This being the case, it is clear that even the Government is of the view that it is not possible to discriminate between landowners covered by the 2013 Act and 62 landowners covered by the National Highways Act, when it comes to compensation to be paid for lands acquired under either of the enactments. The judgments delivered under the 1952 Act as well as the Defence of India Act, 1971, may, therefore, require a re-look in the light of this development. 1 In any case, as has been pointed out hereinabove, the case of Chajju Ram (supra), has been referred to a larger Bench. In this view of the matter, we are of the view that the view of the Punjab and Haryana High Court is correct, whereas the view of the Rajasthan High Court is not correct.
39. We were also referred to the judgment of a learned Single Judge of the Karnataka High Court reported as Lalita vs Union of India AIR 2003 Karnataka 165, as well as a judgment of the Division Bench of the Madras High Court in T. Chakrapani vs Union of India, both of which distinguished the Requisition Act cases and relied upon Nagpur Improvement Trust (supra) in order to reach the same conclusion as the Punjab and Haryana High Court. Both these judgments are also correct.
1 The Defence of India Act, 1971, was a temporary statute which remained in force only during the period of operation of a proclamation of emergency and for a period of six months thereafter – vide Section 1(3) of the Act. As this Act has since expired, it is not included in the Fourth Schedule of the 2013 Act. 63
40. One more argument was raised by learned counsel appearing on behalf of the Respondents, which is that nothing survives in these mattes in view of orders passed by this Court in Union of India v. T. Chakrapani – the Division Bench judgment of the Madras High Court having come before this Court. This order is quoted by us in full :
“In view of the statement made by Shri Ranjit Kumar, learned Solicitor General of India on an earlier date of the hearing that solatium in terms of the impugned order of the High Court would be granted for the instant acquisitions made under the provisions of the National Highways Act, 1956, no subsisting issue remains in the present appeals as also in the special leave petition. The appeals as also the special leave petition are accordingly closed. The respondents – writ petitioners be paid solatium as due in terms of the impugned order(s) along with interest thereon.” We were also referred to an order in Sunita Mehra v. Union of India (2016) SCC OnLine 1128, in which this Court held :
“6. The only point agitated before us by the learned Solicitor General is that in paragraph 23 of the impugned judgment of the High Court, it has been held that land- owners would “henceforth” be entitled to solatium and interest as envisaged by the provisions of Sections 23 and 28 of the Land Acquisition Act, 1894. In the ultimate paragraph of the impugned judgment it has, however, been mentioned that in respect of all acquisitions made under the National Highways Act, 1956, solatium and interest in terms similar to those contained in Sections 23(2) and 28 of the Land Acquisition Act, 1894 will have to be paid.64
7. Learned Solicitor General has pointed out that there is an apparent inconsistency in the judgment, which needs to be clarified. It has also been submitted by the learned Solicitor General that the order of the High Court should be clarified to mean that the issue of grant of interest and solatium should not be allowed to be reopened without any restriction or reference to time. Learned Solicitor General has particularly submitted that to understand the order of the High Court in any other manner would not only seriously burden the public exchequer but would also amount to overlooking the delay that may have occurred on the part of the land-
owner(s) in approaching the Court and may open floodgates for en masse litigation on the issue.
8. We have considered the submissions advanced. In Gurpreet Singh v. Union of India, (2006) 8 SCC 457, this Court, though in a different context, had restricted the operation of the judgment of this Court in Sunder v. Union of India, (2001) 7 SCC 211 and had granted the benefit of interest on solatium only in respect of pending proceedings. We are of the view that a similar course should be adopted in the present case also. Accordingly, it is directed that the award of solatium and interest on solatium should be made effective only to proceedings pending on the date of the High Court order in Golden Iron & Steel Forgins v. Union of India i.e. 28.03.2008. Concluded cases should not be opened. As for future proceedings, the position would be covered by the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (came into force on 01.01.2014), which Act has been made applicable to acquisitions under the National Highways Act, 1956 by virtue of notification/order issued under the provisions of the Act of 2013.”
41. There is no doubt that the learned Solicitor General, in the aforesaid two orders, has conceded the issue raised in these cases. 65 This assumes importance in view of the plea of Shri Divan that the impugned judgments should be set aside on the ground that when the arbitral awards did not provide for solatium or interest, no Section 34 petition having been filed by the landowners on this score, the Division Bench judgments that are impugned before us ought not to have allowed solatium and/or interest. Ordinarily, we would have acceded to this plea, but given the fact that the Government itself is of the view that solatium and interest should be granted even in cases that arise between 1997 and 2015, in the interest of justice we decline to interfere with such orders, given our discretionary jurisdiction under Article 136 of the Constitution of India. We therefore declare that the provisions of the Land Acquisition Act relating to solatium and interest contained in Section 23(1A) and (2) and interest payable in terms of section 28 proviso will apply to acquisitions made under the National Highways Act. Consequently, the provision of Section 3J is, to this extent, violative of Article 14 of the Constitution of India and, therefore, declared to be unconstitutional. Accordingly, Appeal @ SLP (C) No. 9599/2019 is dismissed.
42. Coming to the individual appeals in the case, Shri Mukul Rohatgi has raised essentially 11 grounds, which, according to him, 66 require the Court’s attention. We will deal with each of these grounds seriatim hereinbelow:
Ground 1: That the acquired land was treated as commercial land, ignoring Section 143 of The Punjab Regional and Town Planning and Development Act, 1995, due to which construction is restricted upto 50m on either side of the National Highway. SLP (C) No. 15478/2019; SLP (C) No. 15482/2019; SLP (C) No. 15472/2019; SLP (C) No. 15470/2019; SLP (C) No. 15442- 15443/2019; SLP (C) No. 15488/2019; SLP (C) No. 15444- 15445/2019; SLP (C) No. 15487/2019; SLP (C) No.15479/2019; SLP (C) No. 15477/2019; SLP (C) No. 15485/2019; SLP (C) No. 15474/2019; SLP (C) No. 15466/2019; SLP (C) No. 15446/2019; SLP (C) No. 15447/2019; SLP (C) No. 15448/2019; SLP (C) No. 21690/2019; SLP (C) No. 14491/2019; SLP (C) No. 21662/2019; SLP (C) No. 21696/2019; SLP (C) No. 21657/2019; SLP (C) No. 21664/2019; SLP (C) No. 21666/2019; SLP (C) No. 21671/2019; SLP (C) No. 21670/2019; SLP (C) No. 21673/2019; SLP (C) No. 21663/2019; SLP (C) No. 21695/2019; SLP (C) No. 21692/2019; SLP (C) No. 21693/2019; SLP (C) No. 9602/2019; SLP (C) No. 9600/2019; SLP (C) No. 21687/2019; SLP (C) No. 21689/2019; SLP (C) No. 9604/2019; SLP (C) No. 10210/2019 67 In these matters, this ground has been raised and argued sometimes at the Section 34 stage, sometimes at the Section 37 stage, and sometimes at both stages. The burden to prove that the land in question is within 50m of the National Highway, and that it does not have commercial potentiality, is on the NHAI but, on facts, has never been discharged. This being the case in all these appeals, they stand dismissed.
SLP (C) No. 21688/2019; SLP (C) No. 15471/2019; SLP (C) No. 15450/2019; SLP (C) No. 21675/2019; SLP (C) No. 21683/2019 In these matters, this ground has not been taken or argued in the Section 34 petition. Therefore, these appeals stand dismissed. Ground 2: That the arbitrator conducted the spot visit five years after the Section 3A notification was issued, based on which compensation was determined.
SLP (C) No. 15478/2019; SLP (C) No. 15482/2019; SLP (C) No. 15472/2019; SLP (C) No. 15470/2019; SLP (C) No. 15442- 15443/2019; SLP (C) No. 15488/2019; SLP (C) No. 15444- 15445/2019; SLP (C) No. 15487/2019; SLP (C) No. 15479/2019; SLP (C) No. 15477/2019; SLP (C) No. 15485/2019; SLP (C) No. 15474/2019; SLP (C) No. 15466/2019; SLP (C) No. 15446/2019; 68 SLP (C) No. 15447/2019; SLP (C) No. 21688/2019; SLP (C) No. 15471/2019; SLP (C) No. 15448/2019; SLP (C) No. 15450/2019; SLP (C) No. 21690/2019; SLP (C) No. 15486/2019; SLP (C) No. 14491/2019; SLP (C) No. 21662/2019; SLP (C) No. 21696/2019; SLP (C) No. 21657/2019; SLP (C) No. 21664/2019; SLP (C) No. 21666/2019; SLP (C) No. 21671/2019; SLP (C) No. 21682/2019; SLP (C) No. 21675/2019; SLP (C) No. 21670/2019; SLP (C) No. 21673/2019; SLP (C) No. 21663/2019; SLP (C) No. 21695/2019; SLP (C) No. 21691/2019; SLP (C) No. 21692/2019; SLP (C) No. 21693/2019; SLP (C) No. 10210/2019 In these matters, this ground has not been taken and argued in the Section 34 petitions filed in these cases. Further, assessment, in any case, of the land in question, relates to the date of the original notification. Therefore, these appeals stand dismissed. Ground 3: That exemplars of faraway villages in other districts were relied upon to enhance compensation.
SLP (C) No. 15478/2019; SLP (C) No. 15482/2019; SLP (C) No. 15472/2019; SLP (C) No. 15470/2019; SLP (C) No. 15442- 15443/2019; SLP (C) No. 15488/2019; SLP (C) No. 15444- 15445/2019; SLP (C) No. 15487/2019; SLP (C) No. 15479/2019; SLP (C) No. 15477/2019; SLP (C) No. 15485/2019; SLP (C) 69 No.15474/2019; SLP (C) No. 15446/2019; SLP (C) No. 15447/2019; SLP (C) No. 21688/2019; SLP (C) No.15471/2019; SLP (C) No. 15448/2019; SLP (C) No. 15450/2019; SLP (C) No. 21690/2019; SLP (C) No. 15486/2019; SLP (C) No. 14491/2019; SLP (C) No. 21662/2019; SLP (C) No. 21696/2019; SLP (C) No. 21657/2019; SLP (C) No. 21664/2019; SLP (C) No. 21666/2019; SLP (C) No. 21671/2019; SLP (C) No. 21682/2019; SLP (C) No. 21675/2019; SLP (C) No. 21670/2019; SLP (C) No. 21673/2019; SLP (C) No. 21663/2019; SLP (C) No. 21695/2019; SLP (C) No. 21691/2019; SLP (C) No. 21692/2019; SLP (C) No. 21693/2019; SLP (C) No. 9602/2019; SLP (C) No. 9600/2019; SLP (C) No. 21687/2019; SLP (C) No. 21683/2019; SLP (C) No. 21689/2019; SLP (C) No. 9604/2019; SLP (C) No. 10210/2019 In these matters, this ground has not been taken and argued in any of the Section 34 petitions. Therefore, these appeals stand dismissed.
Ground 4: That the Arbitrator relied upon the Collector Rate of the year 2011-13/ 2012-13.
SLP (C) No. 15478/2019; SLP (C) No. 15472/2019; SLP (C) No. 15470/2019; SLP (C) No. 15488/2019; SLP (C) No. 15444- 15445/2019; SLP (C) No. 15487/2019; SLP (C) No. 15479/2019; 70 SLP (C) No. 15477/2019; SLP (C) No. 15474/2019; SLP (C) No. 15466/2019; SLP (C) No. 15446/2019; SLP (C) No. 15447/2019; SLP (C) No. 15450/2019; SLP (C) No. 21688/2019; SLP (C) No. 15486/2019; SLP (C) No. 21696/2019; SLP (C) No. 21664/2019; SLP (C) No. 21671/2019; SLP (C) No. 21682/2019; SLP (C) No. 21675/2019; SLP (C) No. 21670/2019; SLP (C) No. 21695/2019; SLP (C) No. 21693/2019; SLP (C) No. 9604/2019; SLP (C) No. 15485/2019;
In these matters, this ground has not been taken and argued in any of the Section 34 petitions. Therefore, these appeals stand dismissed.
SLP (C) No. 15471/2019 In this matter, this ground has been taken up in the Section 34 petition, however, the High Court has rightly dismissed this appeal in terms of the Punjab & Haryana High Court order dated 15.02.17, in FAO No. 6522 of 2016, titled ‘Mangal Dass vs. Govt. of India’, wherein compensation of Rs. 7,00,000 per marla, which was calculated based on the collector rate of 2011, was held to be not justified, and was reduced to Rs. 4,50,000 per marla. Therefore, this appeal also stands dismissed.
71 Ground 5: That compensation on account of loss of structure was awarded.
SLP (C) No. 15470/2019; SLP (C) No. 15444-15445/2019; SLP (C) No. 15485/2019;
In these matters, this ground has not been taken and argued in any of the Section 34 petitions. Therefore, these appeals stand dismissed.
SLP (C) No. 15472/2019 In this matter, this ground has not been taken in the Section 37 appeal. Therefore, this appeal also stands dismissed. SLP (C) No. 15478/2019 In this matter, this ground has been taken up in the Section 34 petition, and the High Court, noting that the landowner gave up his claim on loss of structure awarded at the rate of Rs. 50,000 by the Arbitrator, held that no further adjudication is necessary on this point. Therefore, no interference is required, and this appeal also stands dismissed.
SLP (C) No. 15482/2019; SLP (C) No. 15487/2019; SLP (C) No. 15479/2019; SLP (C) No. 15477/2019; SLP (C) No. 15474/2019; 72 SLP (C) No. 15466/2019; SLP (C) No. 15446/2019; SLP (C) No. 15447/2019; SLP (C) No. 21688/2019; SLP (C) No. 15471/2019; SLP (C) No. 15448/2019; SLP (C) No. 15450/2019; SLP (C) No. 21690/2019; SLP (C) No. 15486/2019; SLP (C) No. 21662/2019; SLP (C) No. 21691/2019 In these matters, though this ground has been argued in the Section 34 petition, as this ground is factual, no patent illegality arises.
Therefore, these appeals stand dismissed. Ground 6: That compensation for shifting expenses was granted SLP (C) No. 15478/2019; SLP (C) No. 15477/2019 In these matters, this ground has not been taken and argued in any of the Section 34 petitions. Therefore, these appeals stand dismissed.
SLP (C) No. 15442-15443/2019; SLP (C) No. 15487/2019; SLP (C) No. 15479/2019; SLP (C) No. 21662/2019 In these matters, though this ground has been argued in the Section 34 petition, as this ground is factual, no patent illegality arises. Therefore, these appeals stand dismissed. Ground 7: That arbitration costs were awarded 73 SLP (C) No. 15442-15443/2019; SLP (C) No. 15487/2019; SLP (C) No. 15477/2019; SLP (C) No. 15474/2019; SLP (C) No. 14491/2019; SLP (C) No. 21657/2019; SLP (C) No. 9600/2019; SLP (C) No. 10210/2019; SLP (C) No. 15466/2019; SLP (C) No. 21690/2019; SLP (C) No. 21662/2019; SLP (C) No. 21691/2019 In these matters, this ground has not been taken and argued in any of in the Section 34 petitions. Therefore, these appeals stand dismissed.
SLP (C) No. 15479/2019; SLP (C) No. 21682/2019; SLP (C) No. 9602/2019; SLP (C) No. 21687/2019; SLP (C) No. 21683/2019; SLP (C) No. 9604/2019; SLP (C) No. 15446/2019; SLP (C) No. 15448/2019; SLP (C) No. 15450/2019 In these matters, this ground has not been taken and argued in any of the Section 37 appeals. Therefore, these appeals also stand dismissed.
SLP (C) No. 15478/2019; SLP (C) No. 15482/2019; SLP (C) No. 15470/2019; SLP (C) No. 21675/2019; SLP (C) No. 21673/2019; SLP (C) No. 15485/2019; SLP (C) No. 15447/2019; SLP (C) No. 21692/2019 74 In these matters, this ground has not been taken up in any of the Special Leave Petitions. Therefore, these appeals stand dismissed. Ground 8: That compensation was awarded based on post- notification sale deed SLP (C) No. 15470/2019; SLP (C) No. 15444-15445/2019; SLP (C) No. 14491/2019; SLP (C) No. 21664/2019; SLP (C) No. 21671/2019; SLP (C) No. 21670/2019; SLP (C) No. 21663/2019; SLP (C) No. 21695/2019; SLP (C) No. 21693/2019; SLP (C) No. 9602/2019; SLP (C) No. 9600/2019; SLP (C) No. 21687/2019; SLP (C) No. 21683/2019; SLP (C) No. 21689/2019; SLP (C) No. 9604/2019; SLP (C) No. 21696/2019; SLP (C) No. 21666/2019 In these matters, this ground has not been taken and argued in any of the Section 34 petitions. Therefore, these appeals stand dismissed.
Ground 9: That compensation was awarded based on sale deeds of smaller plots of land SLP (C) No. 15470/2019; SLP (C) No. 21666/2019; SLP (C) No. 21671/2019; SLP (C) No. 21670/2019; SLP (C) No. 21663/2019; SLP (C) No. 9602/2019; SLP (C) No. 21687/2019; SLP (C) No. 75 21683/2019; SLP (C) No. 21689/2019; SLP (C) No. 9604/2019; SLP (C) No. 21696/2019 In these matters, this ground has not been taken and argued in any of the Section 34 petitions. Therefore, these appeals stand dismissed.
Ground 10: That compensation on account of severance of land was awarded SLP (C) No. 15470/2019; SLP (C) No. 15479/2019; SLP (C) No. 15471/2019 In these matters, this ground has not been taken and argued in any of the Section 34 petitions. Therefore, these appeals stand dismissed.
SLP (C) No. 10210/2019 In this matter, this ground has not been taken in the Special Leave Petitions. Therefore, this appeal stands dismissed. SLP (C) No. 15485/2019; SLP (C) No. 15474/2019; SLP (C) No. 15447/2019; SLP (C) No. 15486/2019; SLP (C) No. 21691/2019 76 In these matters, though this ground has been taken in the Section 34 petition, no patent illegality arises. Therefore, these appeals stand dismissed.
Ground 11: That compensation on account of loss of business was awarded SLP (C) No. 15487/2019; SLP (C) No. 21675/2019 In these matters, this ground has not been taken and argued in any of the Section 34 petitions. Therefore, these appeals stand dismissed.
SLP (C) No. 15477/2019; SLP (C) No. 15474/2019; SLP (C) No. 15466/2019; SLP (C) No. 15446/2019; SLP (C) No. 15447/2019; SLP (C) No. 21688/2019; SLP (C) No. 15471/2019; SLP (C) No. 15450/2019; SLP (C) No. 21690/2019; SLP (C) No. 21691/2019; SLP (C) No. 21692/2019 In these matters, though this ground has been argued in the Section 34 petition, no patent illegality arises. Therefore, these appeals stand dismissed.
…………………………J.
(R.F. Nariman)
…………………………J.
New Delhi (Surya Kant)
September 19, 2019.
77