The
State of Tamil Nadu & Ors Vs. Ananthi Ammal
& Ors [1994] INSC 595 (22 November 1994)
Bharucha
S.P. (J) Bharucha S.P. (J) Verma, Jagdish Saran (J) Paripoornan, K.S.(J)
CITATION:
1995 AIR 2114 1995 SCC (1) 519 JT 1995 (1) 247 1994 SCALE (4)1106
ACT:
HEAD NOTE:
1.
This appeal by special leave is filed by the State of Tamil Nadu against the judgment and order of
the High Court of Madras dated 9th September, 1981, whereby the Tamil Nadu Acquisition of Land for Harijan Welfare Schemes
Act, 1978, was struck down as being ultravirus the Constitution of India. The
High Court came to the conclusion that the said Act did not enjoy the
protection of Articles 31-C or 31 -A and that it was violative of articles 14,
19 and 300A of the Constitution.
2.
Learned counsel for the appellants submitted that the said act was not violative
of Articles 14 or 19 or 300A and that, in any event, it was protected by reason
of Article 3 1-A. Learned counsel for the respondents submitted that the said
Act was violative of Article 14 inasmuch as it was enacted to acquire lands for
a purpose which could as well be served by the provisions of the Land
Acquisition Act, 1894, and that comparison of the provisions of the said Act
with those of the Land Acquisition Act showed that the provision of the said
Act were far harsher insofar as the land owner was concerned. Learned counsel
for the respondents also submitted that the said Act did not enjoy the
protection conferred by Article 31C notwithstanding the declaration in that
behalf contained in Section 2 thereof
3. The
said Act contains in section 2 the declaration aforementioned, namely, that it
is enacted to give effect to the policy of the State towards securing the
principles laid down in Part IV and, in particular, Article 46 of the
Constitution. It is enacted to provide for acquisition of land for Harijan
Welfare Scheme.
4.
Section 3 of the said Act is the defines 'Court' to mean, in the City of
Madras, the Madras City Civil Court and elsewhere, the Subordinate Judge's
Court having jurisdiction, and if there is no such Subordinate Judge's Court,
the District Court having jurisdiction. a "Harijan Welfare Scheme" is
defined to mean any scheme for provision of house sites for Harijans, for
constructing, extending or improving any dwelling house for Harijans, for
providing any burial or burning ground for Harijans, for providing any pathway
leading to such dwelling house, burial or burning ground or for providing any
other 250 amenity for the benefit of Harijans. Sections 4,5,6 and 7 of the said
Act read thus:
"4.
Power to acquire land (1) Where the District Collector is satisfied that for
the purpose of any Harijan Welfare Scheme, it is necessary to acquire any land,
he may acquire the land by publishing in the District Gazette a notice to the
effect that he has decided to acquire the land in pursuance of this section.
(2)
Before publishing a notice under sub- section (1), the District Collector or
any officer authorised by the District Collector in this behalf, shall call
upon the owner or any other person. who, in the opinion of the District
Collector or the officer so authorised may be interested in such land to show
cause why it should not be acquired.
(3)
(a) The District Collector may, where he has himself called upon the owner or
other person to show cause under subsection (2), pass such orders as he may
deem fit on the cause, so shown;
(b)
Where any officer authorised by the District Collector has called upon the
owner or other person to show cause under sub- section (2), the officer so authorised
shall make a report to the the District Collector containing his
recommendations on the cause so shown for the decision of the District
Collector. After considering such report the District Collector may pass such
order as he may deem fit.
5.
Land acquired to vest in Government free from all encumbrances When a notice
under sub-section (1) of section 4 is published in the District Gazette, the
land to which the said notice relates shall, on and from the date on which the
notice is so published vest absolutely in the Government free from all
encumbrances.
6.
Right to receive amount Every person having any interest in any land acquired
under this Act shall be entitled to receive and be paid an amount as
hereinafter provided.
7.
Determination of amount (1) The amount payable in respect of any land acquired
under this Act shall be the market value of such land on the date of
publication of the notice under sub-section (1) of section 4.
Section
8 sets out the matters that are to be ignored in determining the amount under
section 7. Section 9 entities any person who does not agree with the amount
determined by the prescribed authority under section 7(2) to prefer an appeal
to the "Court" within such period as may be prescribed. Sub-section (1)
of section 10 requires the prescribed authority to determine who, in his
opinion, are entitled to receive the amount where several persons claim to be
interested therein and what is payable to each of them. Sub-section (2) states
that where a dispute arises in this behalf the prescribed authority may refer
it for the decision of the court and the court must in deciding such dispute,
follow the provisions of Part III of the Land Acquisition Act, Section 11 reads
thus:
"11.
Payment of amount (1) After the amount has been determined, the prescribed
authority shall tender payment of the amount to the persons entitled thereto
and shall pay it to them - (i) in a lump-sum in a case, where it does not
exceed two thousand rupees, and (ii) in all other cases, in such number of
equal annual instalments not exceeding five as may be determined by the
prescribed authority and the amount of each such annual instalment shall not be
less than two thousand rupees:
251
Provided that where the balance of the amount due in any instalment is less
than two thousand rupees, only the actual amount so due shall be paid.
(2) If
the persons entitled to the amount do not consent to receive it or if there be
no person competent to alienate the land, or if there by any dispute as to the
title to receive the amount or as to the apportionment of it, the prescribed
authority shall deposit the amount in the Court, and the Court shall deal with
the amount so deposited in the manner laid down in sections 32 and 33 of the
Land Acquisition Act, 1894 (Central Act1 of 1894)".
Section
12 provides for payment of interest. It says that when the compensation amount
is not paid or deposited on or before taking possession of the land, the
prescribed authority shall pay it with interest at the rate of 6% per annum
from the time of taking possession until payment.
Section
13 reads thus:
"
13. Appeal to High Court Subject to the provisions of the Code of Civil
Procedure, 1908 (Central Act V of 1908) applicable to appeals from original
decrees, and notwithstanding anything to the contrary in any enactment for the
time being in force, a second appeal shall lie to the High Court from any
decision of the Court under this Act, if the amount as determined by the
prescribed authority exceeds such sum as may be prescribed.
Sections
10 states that the provisions of the Land Acquisition Act, 1894, save as
provided in the said Act, shall cease to apply to any land which is required
for the purpose specified in section 4(1) and such land shall be acquired only
in accordance with the provisions of the said Act. Section 22 reads thus:
"22.
Application of the act to certain pending cases of acquisition (1) The pro-
visions of this Act shall apply also to any case or cases in which proceedings
have been started before the commencement of this Act for the acquisition of
any land for the Harijan Welfare Scheme under the Land Acquisition Act, 1894
(Central Act 1 of 1894) (hereinafter in this section referred to as th e said
Act) but no award has been made by the Collector under section 11 of the said
Act before such commencement, as if
(i) the
notification published under sub- section (1) of section 4 of the said Act, or
(ii) the
declaration made under section 6 of the said Act, or
(iii) the
notice given under sub-section (1) of section 9 of the said Act, were a notice
to show-cause against the acquisition of the land served under sub- section (2)
of section 4 of this Act.
(2)
Nothing contained in sub-section (1) shall apply in relation to any land unless
and until after the District Collector has published a notice in the District
Gazette to the effect that the said land is required for the purpose specified
in sub-section (1) of section 4 of this Act.
5. It
was submitted by learned counsel for the respondents that no enquiry by section
5 of the Land Acquisition Act was contemplated by the said Act. whereas it was
the Government which was required to consider objections and the need for
acquisition and make a declaration thereafter that the land was required for a
public purpose under the Land Acquisition Act. It was, under the said Act, left
to the District Collector to be satisfied that the land was required for the
purpose of a Harijan 252 Welfare Scheme. No enquiry into the value of the land
was contemplated under the said Act inasmuch as a provision equivalent to
section 11 of the Land Acquisition Act was not to be found in the said Act.
Whereas the Land Acquisition Act set out the matters that were required to be
considered for the purposes of award of compensation there was no such
provision in the said Act. The said Act did not provide for a reference to the
court in regard to a claim for enhancement of compensation in the manner of
section 18 of the land Acquisition Act; it provided only for an appeal to the
court and, having regard to the terms of section 9, that appeal was restricted
to the amount of solatium payable under section 7(2) of the said Act. Section
11 of the said Act provided for the payment of the compensation amount in instalments
in the event that the amount thereof exceeded Rs.2,000/-. Section 13 of the
said Act provided for a second appeal to the High Court only if the amount as
determined by the prescribed authority exceeded such sum as might be
prescribed. This sum, it may be mentioned, was at the relevant time Rs.
50,000/-, which was the amount prescribed for the purpose of all second appeals
to the High Court under the rules for the purpose.
6. In
The State of Madhya Pradesh v. G.C. Mandawar, (1955) 1 S.C.R. 599, a
Constitution Bench held that Article 14 does not authorise the striking down of
the law of one State on the ground that, in contrast with the law of another
State on the same subject, its provisions are discriminatory, nor does it
contemplate the law of the Center or of a State dealing with similar subjects
being held to be un- constitutional by a process of comparative study of the
provisions of the two. The sources of authority for the two being different,
Article 14 can have no application. In Sant Lal Bharti v. State of Punjab. (1988) 2 S.C.R. 107, this was
reiterated.
7.
When a statute is impugned under Article14 what the court has to decide is
whether the statute is so arbitrary or unreasonable that it must be struck
down. At best, a statute upon a similar subject which derives its authority
from another source can be referred to, if its provisions have been held to be
reasonable or have stood the test of time, only for the purpose of indicating
what may be said to be reasonable in the context. We proceed to examine the
provisions of the said Act upon this basis.
8.
Sub-section (1) of section 4 empowers the District Collector, if he is
satisfied that it is necessary to acquire some land for the purpose of an Harijan
Welfare Scheme, to acquire that land by publishing in the District Gazette a
notice to the effect that he has decided to acquire it in pursuance of section
4. Sub-section (2) of section 4 obliges the District Collector or any officer authorised
by him in this behalf to call upon the owner or any other person who, in the opinion
of the District Collector or the officer so authorised, is interested in such
land to show cause why it should not be acquired.
Where
the District Collector has called upon the owner or other person to show cause
under subsection (2), clause (a) of sub-section (3) requires him to pass orders
on the cause so shown. Where an officer authorised by the district Collector
has called upon the owner or other person to show cause under sub-section (2),
clause (b) of section 3 requires that officer to report to the District
Collector his recommendations on the 253 cause so shown and the District
Collector is required to pass such orders as he may deem fit after considering
the report. Sub section (2) of section 4, therefore, obliges the acquiring
authority to serve notice upon the land owner and other persons interested in
the land to shown cause why it should not be acquired. By reason of sub-section
(3) of section 4, such cause has to be taken into account and orders passed in
respect thereof It is only thereafter that the acquiring authority can arrive
at the satisfaction that it is necessary to acquire the land. The provisions of
sec- tion 4, therefore, substantially encapsulate the provisions of section 4
to 6 of the Land Acquisition Act, the only major difference being that, under
the said Act, it is the District Collector and not the State Government who
must be satisfied that the land is-required to be acquired. It does not appear
to us that this is a provision which is unreasonable or arbitrary.
9.By reason
of section 5, the land in respect of which notice under section 4(1) is
published vests absolutely in the State Government on and from the date of such
publication. Every person having an interest in such land is, by reason of
section 6, entitled to receive compensation. Section 12 says that where the
amount thereof is not paid or deposited on or before the taking of possession
of the land, interest thereon is payable at the rate of 6% per annum from the
time of taking of possession until payment or deposit.
10.Section
7 states that the amount payable in respect of land that is acquired under the
said Act "Shall be the market value of such land on the date of
publication of the notice under sub-section (1) of section 4". What is
payable as compensation is the market value of the land and it is to be
determined as on the date on which the notice under section 4(1) is published.
To that extent the provisions of the said Act are more favorable than those of
the Land Acquisition Act for, under that statute, market value as on the date
of the Section 4 notification is payable, not on the date of the Section 6
notification.
11.It
is true that the said Act provides for matters which are to be ignored in
determining the amount under section 8 but does not make provision, as the Land
Acquisition Act does, in determining the amount. It has, however, to be realised
that the concept of market value and how it is to be determined is well
established.
In
State of Gujarat v. Shantilal Mangaldas & Ors.
(1969) 3 S.C.R. 341, this Court said, "Specification of principles within
the meaning of Article 31(2) as it then read means laying down general guiding
rules applicable to all persons or transactions governed thereby. Under the
Land Acquisition Act compensation is determined on the basis of "market
value" of the land on the date of the notification under section 4(1) of
the Act. That is a specification of principle.
Compensation
determined on the basis of market value prevailing on a date anterior to the
date of extinction of interest is still determined on a principle
specified". It is, therefore, of no great consequence that the said Act
does not go on to specify what is to be taken into account in determining the
amount payable as compensation for land that is acquired there under.
12.Sub-section
(1) of section 7, as aforesaid, states that the amount payable in respect of
the land that is acquired under the said Act shall be its market value 254 on
the date of publication of the notice under section 4(1).
Sub-section
(2) of section 7 states that, in addition to the market value of the land, the
prescribed authority shall in every case award a sum of 15 per centum on such
market value as solatium in consideration of the compulsory nature of the
acquisition. Sub-section (3) of Section 7 states that the prescribed manner,
determine by order the amount payable un- der sub-section (1) and a copy of the
said order shall be communicated to the owner of such land and every person
interested therein. The purport of section 7, read as a whole, is that the
market value of the land is payable as compensation and subsection (3) states
that the market value shall be determined after holding an inquiry contemplates
notice to the owner and other person interested in the land and consideration
of their claims for compensation and the basis thereof, namely, the evidence
they adduce. Upon determination of the market value of the land after inquiry,
the prescribed authority is obliged under sub-section (2) of section 7 to award
as compensation for the acquisition the market value and as additional 13% as solatium.
13.An
appeal is prescribed under section 9 to the court by any person who does not
agree with the amount determined by the prescribed authority "under
sub-section (7) of section 7". It was argued that the appeal was limited
to the award of solatium and that, therefore, there was no appeal against the
determination of market value and no reference to the court in that behalf in
the manner of section 18 of the Land Acquisition Act. We do not think sections
7 and 9 may be so read as to render section 9 an absurdity. As aforesaid, it is
the obligation of the prescribed authority under sub- section (2) of section 7
to award the market value of the land plus 15% as solatium. The appeal contemplated
by section 9 is, therefore in respect of the award in respect of the land which
comprises its market value and solatium.
14.
That no reference as in Section 18 of the Land Acquisition Act in regard to the
amount of compensation for land that is acquired is provided for does not, in
our view, make the said Act unreasonable. Under the provisions of the Land
Acquisition Act the award is no more than an offer. If the land owner of other
person interested in the land does not accept the offer, section 18 gives him
the right of having the compensation amount decided by the court (See Raja Harish
Chandra Raj Singh v. The Deputy Land Acquisition Officer. (1962) 1 S.C.R. 676.)
In the reference court compensation has to be established. (See Periyar and Pareekanni
Rubbers Ltd. v. State of Kerala. (1991) 4 S.C.C. 195.) The record before the
Collector does not ipso facto become the record of the reference court. In the
case of the said Act an appeal is provided under section 9 from the award, that
is,the market value of the land and solatium, under section 7. The market value
is required to be determined. by reason of sub-section (3) of section 7, upon
an enquiry as hereinabove explained. The land owner or other person interested
in the land has, therefore, the opportunity to establish its market value
before the pre- scribed authority. Such evidence as he places before the
prescribed authority becomes a part of the record of the court in appeal under
section 5. The court in appeal under section 9 would also, in appropriate
cases, have the right to call for additional evidence.
15.
The provisions of section 13 of the 255 Act provide for a second appeal to the
High Court. The second appeal lies only if to amount as determined by the
prescribed authority exceeds such sum as may be prescribed The sum prescribed
appears to be the sum which is otherwise prescribed in regard to all second
appeals. There is no obligation to provide for a second appeal in all cases and
there is, therefore, no unreasonableness in this behalf 16.In the event that
the court in appeal under section 9 or the High Court in second appeal under
section 13 enhances the compensation amount the power to award interest as
prescribed in section 12 is implicit.
17.Section
11 has already been quoted. By reason of sub- section (1) thereof, payment of
the compensation amount can be made in a lump sum only where it does not exceed
Rs.2000/. In all other cases it must be made in equal annual instalments not
exceeding five, but so that the amount of each annual instalment is not less
than Rs.2,000/-. In our view, the provision in regard to the payment of the
compensation amount by instalments in this manner is wholly unreasonable. the
owner of the land or another person interested therein would require compensation
in lieu of the land forth with to re-establish himself whether in a new
residence or another piece of agricultural land or other- wise. The provisions
of the section in this behalf are clearly severable. The said Act can stand
even when the provisions in regard to the payment of the compensation amount by
instalment excised. To the extent that section11 provides for payment of
compensation by instalments it is ultravirus Article 14. The provisions of
section 11(1) subsequent to the words "in a lump-sum" must,
therefore, be struck down.
18.Section
20 of the said Act states that the provisions of the land Acquisition Act, save
as expressly provided in the said Act, shall cease to apply to any land which
is required for the purpose specified in section 4(1) and such land shall be
acquired only 'in accordance with the provisions of the said Act. Consequently,
section 22 makes the provisions of the said Act applicable also to cases in
which proceed- ings have been started before the commencement of the said Act
under the Land Acquisition Act for the purpose of Harijan Welfare Schemes,
provided that judgment under appeal striking down the said Act was delivered no
award have been made under the Land Acquisition Act. We see no unreasonableness
in this provision, particularly having regard to the terms of section 20. We
must, however, take account the fact that the judgment under appeal striking
down the said Act was delivered as far as back as September , 198 1, and no
stay thereof, was obtained from the court.
It is
likely, therefore, that in cases where proceedings under the Land Acquisition
Act had already been started to acquires lands for Harijan Welfare Schemes,
they might have been revived and completed in the interregnum. We, therefore,
make it clear that the provisions of section 22 shall have no effect in such
cases where awards have been made.
19. In
the result, we do not find the provisions of the said Act, except for the
provision as to instalments in section 11. violative of the provisions of Article
14 of the Constitution of India, It is, therefore, unnecessary to consider
whether or not the said Act has the protection of article 256 31-C of the
Constitution.
20.The
appeal is allowed in part. The judgment and order under appeal is set aside. Except
for the provision of Section 11 (1) of the said Act insofar as they provide for
payment of the compensation amount in instalments, the said Act is intra vires
the constitution. Section 11 (1) is valid only to this extent:
"11.
Payment of amount- (1) After the amount has been determined, the prescribed
authority shall tender payment of the amount to the person entitled there to
and shall pay it them- (1) in a lump-sum." The rest of Section 11 (1) is
ultra vires the Constitution.
Civil
Appeal 4461 of 1964 3978-4302 of 1990 & 2114 of 1991.
21.There
civil appeals arise out of orders of the Madras High Court that, following the
judgment dated 9th September, 1981, aforementioned, struck down the said Act.
Having regard to the discussion set out above, we have held the said Act to be
valid legislation, except in so far as the provisions of Section 11 (1) thereof
require the payment of the compensation amount in instalments. For the same rea-
sons, these appeals are set aside. Except for the provisions of section 11 (1)
of the said Act in so far as they provide for payment of the compensation
amount in instalments, the said Act is intra vires the constitution.
Section
11(1) is valid only to this extent:
"11.
Payment of amount (1) After the amount has been determined, the prescribed
authority shall tender payment of the amount to the persons entitled thereto
and shall pay it to them- (1) in a lump sum." The rest of Section 11 (1)
is intra vires the Constitution.
Civil appeal(Nos.)
7886-7891 of 1994 (Arising out of S.L.P. (c) Nos. 16729- 34 of 1983.
22.
Leave granted.
23.
The judgment and order of the Madras High Court under appeal in these civil
appeals, following the aforementioned judgment dated 9th September, 1981,
struck down the provisions of chapter VI of the Tamil Nadu Slum clearance.
The
provision of chapter VI are substantially similar to the provisions of the said
Act, that is to say the Tamil Nadu Acquisition of Land for Harijan Welfare
Scheme Act, 1978 except that by reason of Section 21, no solatium is payable to
the land owner whose land is acquired. The Madras High Court, relying on the
judgment dated 9th September, 1981 in relation to the said Act, found the
provisions of chapter VI to be violative of Article 14 of the Constitution and
struck them own.
24. We
have held the provisions of the said Act to be intra vires the Constitution,
except in regard to the provision for payment of the compensation amount in instalments.
The Slum Clearance Act does not provide for payment of the compensation amount
in instalments.
25.
That no solatium is payable under the Slum Clearance act does not, in our view,
make any substantial difference.
In Prakash
Amichand Shah v. State of 257 Gujarat & Ors. (1985) Suppl. 3 SCR 1025, a
Constitution Bench held that it could not be said as a rule that the State,
which has to supply and maintain large public ser- vices at great cost, should
always pay, in addition to reasonable compensation for acquired land, some
amount by way of solatium: the interest of the public was equally important. It
is, to our mind, not unreasonable that the State should not have to pay solatium
in consideration of the compulsory nature of the acquisition of land that is
slum land.
26. In
the result, the appeals are allowed and the provisions of Chapter VI of the
Slum Clearance Act are held to be intra vires the Constitution.
Civil
Appeal No. 7885 of 1994 (Arising out of &L.P. (C) No. 16989 of 1991:
27.
Leave granted.
28.
This is an appeal by the owner of land whose land was sought to be acquired
under the provisions of the Land Acquisition Act for the purpose of a Harijan
Welfare Scheme after the coming into force of the said Act, that is the Tamil Nadu
Acquisition of Lands for Harijan Welfare Scheme Act, 1978 the appellant filed a
writ petition in the Madras High Court for a direction to the State to for bear
from continuing with the proceedings under the Land Acquisition Act having
regard to the provisions of Section 20 of the said Act which required that for
such purpose land could be acquired only in accordance with the provisions of
the said Act. The learned single Judge dismissed the writ petition and the
Division Bench the appeal filed therefrom, both on the ground that said Act,
had been struck down as unconstitutional. Hence this appeal.
29. We
have held the provisions of the said Act to be valid legislation except in so
far as they provide for payment of the compensation amount in instalments. The
said Act being valid legislation,its provisions preclude the State from
acquiring land for the purpose of a Harijan Welfare Scheme under the Land
Acquisition Act. The appeal is allowed and the proceedings under the Land
Acquisition Act to acquire the appellant's land for the purpose of a Harijan
Welfare Scheme are, therefore, quashed and set aside.
30. In
all these civil appeals each party shall bear and pay its own costs.
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