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Article 300A of the Constitution and Compensation

59. After passing of the Constitution (Forty Forth) Amendment Act 1978 which deleted Article 19(1)(f) and Article 31 from the Constitution and introduced Article 300A in the Constitution, the Constitution (44th Amendment) Act inserted in Part XII, a new chapter: "Chapter IV - Right to Property" and inserted a new Article 300A, which reads as follows:-

"No person shall be deprived of property save by authority of law"

63. Under Indian Constitution, the field of legislation covering claim for compensation on deprivation of one's property can be traced to Entry 42 List III of the Seventh Schedule of the Constitution. The Constitution (7th Amendment) Act, 1956 deleted Entry 33 List I, Entry 36 List II and reworded Entry 42 List III relating to "acquisition and requisitioning of property". The right to property being no more a fundamental right, a legislation enacted under the authority of law as provided in Article 300A of the Constitution is not amenable to judicial review merely for alleged violation of Part III of the Constitution. Article 31A was inserted by the Constitutional (1st Amendment) Act, 1951 to protect the zamindari abolition laws. The right to challenge laws enacted in respect of subject matter enumerated under Article 31A (1) (a) to (g) of the Constitution on the ground of violation of Article 14 was also constitutionally excluded.

64. It has been contended by ld. senior counsel appearing for the appellants that the action taken by the respondents must satisfy the twin principles viz. public purpose and adequate compensation. It has been contended that whenever there is arbitrariness by the State in its action, the provisions of Article 14, 19 and 21 would get attracted and such action is liable to be struck down. It was submitted that the KUZALR Act does not provide for any principle or guidelines for the fixation of the compensation amount in a situation when no actual income is being derived from the property in question. It was further submitted that the inherent powers of public purpose and eminent domain are embodied in Article 300A, and Entry 42 List III, "Acquisition and Requisitioning of Property" which necessarily connotes that the acquisition and requisitioning of property will be for a public use and for compensation and whenever a person is deprived of his property, the limitations as implied in Article 300A as well as Entry 42 List III will come into the picture and the Court can always examine the legality and validity of the legislation in question. It was further submitted that awarding nil compensation is squarely amenable to judicial review under Articles 32 and 226 of the Constitution of India.

68. Article 31(2) of the Constitution has since been repealed by the Constitution (44th Amendment) Act 1978. It is to be noted that Article 300A was inserted by the Constitution (44th Amendment) Act, 1978 by practically reinserting Article 31(1) of the Constitution. Therefore, right to property is no longer a fundamental right but a right envisaged and conferred by the Constitution and that also by retaining only Article 31(1) of the Constitution and specifically deleting Article 31(2), as it stood. In view of the aforesaid position the entire concept to right to property has to be viewed with a different mindset than the mindset which was prevalent during the period when the concept of eminent domain was the embodied provision of fundamental rights. But even now as provided under Article 300A of the Constitution the State can proceed to acquire land for specified use but by enacting a law through State legislature or by Parliament and in the manner having force of law. When the State exercises the power of acquisition of a private property thereby depriving the private person of the property, provision is generally made in the statute to pay compensation to be fixed or determined according to the criteria laid down in the statute itself. It must be understood in this context that the acquisition of the property by the State in furtherance of the Directive Principles of State Policy was to distribute the material resources of the community including acquisition and taking possession of private property for public purpose. It does not require payment of market value or indemnification to the owner of the property expropriated. Payment of market value in lieu of acquired property is not a condition precedent or sine qua non for acquisition. It must be clearly understood that the acquisition and payment of amount are part of the same scheme and they cannot be separated. It is true that the adequacy of compensation cannot be questioned in a court of law, but at the same time the compensation cannot be illusory.