Union of India Vs. Chajju Ram & Ors [2003] Insc 226 (16 April 2003)
Cji.,
R.C. Lahoti, B.N. Agrawal, S.B. Sinha, Ar Lakshmanan. S.B. Sinha, :
The
core question, involved in this batch of appeals which arise from the judgment
and order dated 13.09.1982 passed by the High Court of Punjab and Haryana,
relates to the constitutional validity of the Defence of India Act, 1971 (The
Act) on the premise that absence of any provision for payment of solatium and
interest therein for acquisition of land is hit by Article 14 of the
Constitution of India.
The
respondents were owners of several tracts of lands situated in or around the
town of Bhatinda in the State of Punjab. For the purpose of establishing a
military cantonment, the said lands were requisitioned by the District
Magistrate, Bhatinda in terms of the provisions of the Act in the year 1971.
On or
about 15.1.1975, proceedings were initiated for compulsory acquisition of the
said lands in terms of Section 30 of the Act. The competent authority
determined the amount of compensation payable for such acquisition on
28.7.1975. However, the respondents being dissatisfied with the amount of
compensation offered to them asked the competent authority to refer the matter
to an arbitrator in terms of Section 31 of the said Act. Allegedly, such
reference was not made.
Questioning
the validity of the Act on the ground that their claim of interest at the rate
of 6% and solatium at the rate of 15% had not been granted, writ petitions came
to be filed. The High Court by reason of the impugned judgment held that
Section 31 of the Act is ultra vires Article 14 of the Constitution of India,
as a result whereof the respondents became entitled to claim and recover from
the Central Government solatium at the rate of 15% on the amount of
compensation as also the interest thereupon at the rate of 6% per annum.
Several matters came up before this Court wherein acquisitions have been made
under the provisions of various Improvement Trust Acts and other Acts. A
question arose as to whether the provisions of the Land Acquisition Act as
regards solatium and interest are to be read into the other Acquisitioning Acts
or not. A question also arose in some appeals as to whether the provisions of
Section 28A of the Land Acquisition Act are to be read into the Act. A further
question arose as to whether in the event, it be held that the provisions of
Land Acquisition Act regarding payment of solatium and interest cannot be read
into the said Act, the same would be declared ultra vires Article 14 of the
Constitution of India.
A
Constitution Bench of this Court by an order dated 12.12.2001 while referring
back the matters to 3-Judge Bench as regards the first group and the second
group of cases thought it expedient to direct that these matters wherein the
question as to whether the said Act violates Article 14 of the Constitution of
India for the reason that it makes no provisions for solatium and interest
should remain before it awaiting decisions on the first and second group of
cases.
The
first group of cases wherein the question as to whether the provisions
regarding solatium and interest contained in the Land Acquisition Act are to be
read into the provisions of various Improvement Acts arose for consideration
has since been answered in the affirmative by a 3-Judge Bench of this Court in Nagpur
Improvement Trust etc. vs. Vasantrao and Others etc. [(2002) 7 SCC 657] (Second
Nagpur Improvement Trust).
The
second group of cases relating to the question as to whether the provisions of
the Land Acquisition Act are to be read into the Defence of India Act were
considered in Dayal Singh and Others vs. Union of India and Others [(2003) 2
SCC 593] wherein this Court held that the provisions of Section 28A of the Land
Acquisition Act cannot be read into the said Act.
The
question as regards the constitutionality of the Act on the touch- stone of
Article 14 of the Constitution of India is required to be considered by us in
the aforementioned backdrop.
Mr. Soli
J. Sorabjee, the learned Attorney General appearing on behalf of the appellant
submitted that the question is squarely covered by two decisions of this Court
in Union of India vs. Hari Krishan Khosla (Dead) by L.Rs. [(1993) Supp.2 SCC
149] and Union of India and Others vs. Dhanwanti Devi and Others [(1996) 6 SCC
44]. The learned Attorney General would contend that the respective schemes for
acquisition of the said Act and the Land Acquisition Act are absolutely
distinct and different.
Mr. Sorabjee
would urge that the provision for grant of solatium and interest in the Land
Acquisition Act, 1894 was inserted as great delay used to be caused in payment
of the amount of compensation determined on the basis of valuation of land from
an anterior date, namely the date of publication of notification under Section
4 thereof.
Mr.
O.P. Sharma, learned Senior Counsel appearing on behalf of the respondents, on
the other hand, would submit that the classification so far as acquisition of
land under the Land Acquisition Act vis--vis the Act cannot be said to be rational
so far as the matter relating to payment of compensation is concerned, inasmuch
as the owner of the land is not at all concerned as regard the purpose of
acquisition. He would, therefore, submit that non-payment of solatium and
interest where acquisition is made under the Act would clearly be
discriminatory and, thus, violative of Article 14 of the Constitution of India.
The learned counsel would contend that even for the purpose of computing the
amount of compensation, when acquisition is made under the said Act, the
criteria therefor would also be as per the provisions of the Land Acquisition
Act. Strong reliance in this behalf has been placed by the learned counsel on Haji
Mohammad Ekramul Haq vs. The State of West Bengal [AIR 1959 SC 488] and Nagpur
Improvement Trust and Another vs. Vithal Rao and Others [(1973) 1 SCC 500]
(First Nagpur Improvement Trust).
Mr.
Sharma urged that having regard to the decision of this Court in the second Nagpur
Improvement Trust case (supra), there is absolutely no reason as to why the
provisions of the Land Acquisition Act for the purpose of payment of
compensation should not be read into the Act.
Mr.
Sharma would also submit that the decisions of this Court in Hari Krishan Khosla
(supra) and Dhanwanti Devi (supra) do not lay down the law correctly and, thus,
are required to be overruled.
Mr. Rajiv
Garg and other counsel appearing on behalf of the respondents in connected
appeals, inter alia, would submit that even if the constitutionality of the
said Act is upheld by this Court; equity demands that the amounts paid to the
respondents by way of solatium and interest about twenty years back should not
directed to be refunded.
The
said Act was enacted to provide for special measure to ensure the public safety
and interest, the defence of India and civil defence and the trial of certain
offences and for matters connected therewith. Chapter V of the said Act
provides for requisitioning and acquisition of immovable property.
Section
23 of the Act which begins with a non abstante clause enables the Central
Government or the State Government, as the case may be, to requisition any
immovable property and make such further orders, if in their opinion it is
expedient so to do, inter alia, for securing the defence of India and other
purposes engrafted therein. Section 24 of the said Act entitles the owner of
the property to receive compensation on requisitioning of the property; the
determination whereof is required to be made upon taking into consideration the
factors enumerated therein. In the event any person interested in the lands is
aggrieved by the amount of compensation so determined, he may make an
application within the prescribed time to the Central Government or the State
Government, as the case may be, for referring the matter to an arbitrator who
is empowered to determine the same. Section 29 provides for release from
requisition. Section 30 of the said Act provides for acquisition of
requisitioned property which reads thus :
"30.
Acquisition of requisitioned property.
(1)
Any immovable property which has been requisitioned under Section 23 may, in
the manner hereinafter provided, be acquired in the circumstances and by the
Government specified below, namely :-
(a)
where any works have, during the period of requisition, been constructed on, in
or over the property wholly or partly at the expense of any Government, the
property may be acquired by that Government if it decides that the value of or
the right to use, such works shall, by means of the acquisition of the property,
be preserved or secured for the purposes of any Government, or
(b)
where the cost to any Government of restoring the property to its condition at
the time of its requisition as aforesaid would, in the determination of that
Government, be excessive having regard to the value of the property at that
time, the property may be acquired by that Government.
(2)
When any Government as aforesaid decides to acquire any immovable property, it
shall serve on the owner thereof or where the owner is not readily traceable or
the ownership is in dispute, by publishing in the Official Gazette, a notice
stating that the Government has decided to acquire it in pursuance of this
section.
(3)
Where a notice of acquisition is served on the owner of the property or is
published in the Official Gazette, under sub-section (2), then, at the
beginning of the day on which the notice is so served or published, the
property shall vest in the Government free from any mortgage, pledge, lien or
other similar encumbrances and the period of requisition thereof shall come to
an end.
(4)
Any decision or determination of a Government under sub-section (1) shall be
final, and shall not be called in question in any court.
(5)
For the purposes of this section, "works" includes every description
of buildings, structures and improvements of the property." Section 31
provides for compensation for acquisition of requisitioned property. The
compensation payable for the acquisition of any property under Section 30 shall
be the price which the requisitioned property would have fetched in the open
market if it had remained in the same condition as it was at the time of
requisitioning and been sold on the date of acquisition.
The
said Act is a self-contained code. It lays down the procedure as well as
machinery for determining the amount of compensation. It is not in dispute that
the provisions for payment of compensation under the Land Acquisition Act would
not ipso facto apply to the acquisition made under the said Act. The provisions
of the two Acts do not also provide for the same scheme for acquisition.
In Hari
Krishan Khosla (supra), a Bench of 3-Judges of this Court while considering the
provisions of the Requisitioning and Acquisition of Immovable Property Act,
1952 clearly held that the provisions for grant of solatium and interest under
the Land Acquisition Act cannot be read into the provisions of the said Act.
Having regard to the provision of Section 8(3) of the 1952 Act, this Court
opined that that the provisions thereof should be aimed at for giving the owner
just compensation on the acquisition of his land whereas under the Land
Acquisition Act, lands can be acquired in terms of the doctrine of Eminent
Domain so long there exists an underlying purpose therefor and in that view of
the matter the factors for determination of compensation thereunder need not be
similar.
In Dhanwanti
Devi's case (supra), a Bench of this Court agreeing with Hari Krishnan Khosla
(supra), stated the law thus:
"The
question, therefore, emerges whether it is necessary for the State legislature
to expressly specify that interest or solatium shall not be payable for the
lands or property acquired under Section 7(1) of the Act. Sub silentio is
eloquent.
It
would further be seen that Section 8 of the Central Act equally does not
provide for payment of solatium and interest. The Act was passed in the year
1968 while the Central Act was passed in 1952. It would, therefore, be
reasonable to conclude that the State legislature was cognizant of the express
provisions for payment of interest and solatium available in the Acquisition
Act. The Act omitted similar provisions for payment of interest and solatium as
part or component of compensation, obviously to fall in line with the Central
Act." In First Nagpur Improvement Trust (supra) the question which arose
therein was as to whether the State Government being the acquiring authority
for the acquisition of lands, be it under the Improvement Trust Act or the Kanpur
Urban Development Act, or the Land Acquisition Act, any discrimination can be
made as regards formulation of different principles of compensation and such
classification would be violative of Article 14 of the Constitution of India.
It was held:
"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."
(Emphasis Supplied) Sikri, C.J., speaking for the Bench, however, observed that
the State can make a reasonable classification for the purpose of legislation.
The learned Chief Justice held that that the classification in order to be
reasonable must satisfy two tests :
(i) the
classification must be founded on intelligible differentia and
(ii) the
differentia must have a rational relation with the object sought to be achieved
by the legislation in question.
However,
he hastened to add that the object therefor itself must be lawful and cannot be
discriminatory.
This
Court in the second Nagpur Improvement Trust (supra) came to the conclusion
that all the statutes providing for acquisition of land lay down a common
scheme and pattern as the state legislation relate to the town planning and
development and in terms of which the provisions of the Land Acquisition Act
were made applicable with certain modifications, the provisions relating to solatium
and interest contained therein shall be read into the State Acts.
In the
second Nagpur Trust's case (supra), having regard to the scheme of acquisition
sought to be achieved, it was held :
"It
may be noticed that in U.P. Avas Evam Vikas Prashad vs. Jainul Islam, this
Court highlighted the fact that though under the Land Acquisition Act as
amended in its application to the State of U.P. there was no provision for
grant of solatium, by the U.P. Act such solatium was provided for. The
intention of the legislature was apparent that it wanted to confer the benefit
of solatium by modifying Section 23(2), which benefit was not available under
the provisions of the Land Acquisition Act as it was applicable in the State of
U.P. at the time of enactment of the U.P. Act. So far as the Punjab Act and the
Nagpur Act are concerned, the schedules do not modify the provisions of Section
23(2) of the Land Acquisition Act which provides for payment of solatium.
However, a proviso was added to the effect that sub-section (2) shall not apply
to any land acquired under the State Acts in question.
The
added proviso is identical in both the State Acts. This clearly implies that
where acquisition was made under the provisions of the Land Acquisition Act, as
modified, the legislature did not intend to deprive the claimants of solatium
as provided under the Land Acquisition Act. But solatium was not payable in
cases of acquisition under the State Acts. There are provisions in both the
State Acts which permit the State to acquire lands for the purposes of the
scheme without resorting to the provisions of the Land Acquisition Act such as
acquisition by purchase, lease, exchange, or otherwise, or acquisitions
contemplated under deferred street scheme, development scheme and expansion
scheme. In respect of such acquisitions solatium is not payable. Such cases are
similar to the acquisitions under Section 53 of the Bombay Town Planning Act
which was considered by this Court in Prakash Amichand Shah vs. State of
Gujarat. In these circumstances with a view to save the law from the vice of
the arbitrary and hostile discrimination, the provisions must be construed to
mean, in the absence of anything to the contrary, that the provisions of the
Land Acquisition Act as amended by the 1984 Act relating to determination and
payment of compensation would apply to acquisition of land for the purposes of
the State Acts. It must, therefore, be held that while incorporating the
provisions of the Land Acquisition Act in the State Acts, the intention of the
legislature was that amendments in the Land Acquisition Act relating to
determination and payment of compensation would be applicable to acquisition of
lands for the purposes of the State Acts. Consequently, the claimants are
entitled to the benefits conferred by Section 23(1-A), if applicable, and
Sections 23(2) and 28 of the Land Acquisition Act as amended by the 1984 Act
for acquisition of land for the purposes of the State Acts under Section 59 of
both the Nagpur and Punjab Acts." (Emphasis Supplied) It is now
well-settled that a decision is an authority for what it decides and not what
can logically be deduced therefrom. It is equally well-settled that a little
difference in facts or additional facts may lead to a different conclusion.
The
question, therefore, which arises would be, as to whether the owners of the
lands sought to be acquired under the Act vis-a-vis Land Acquisition Act are
similarly situated? 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
the first Nagpur Improvement Trust's case (supra). The purposes for which the
provisions of the said Act can be invoked are absolutely different and distinct
from which the provision of 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.
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.
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.
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. The 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.
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 the
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.
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--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.
It may
be true that in Haji Mohammad Ekramul Haq's case (supra), this Court observed
while considering the provisions of the Defence of India Act, 1939, that the
principles on which the compensation was to be ascertained under Section 19 of
the Defence of India Act were the same as those provided in Section 23(1) of
the Land Acquisition Act. Even the principles of ascertaining the amount of
compensation, as it then stood, did not provide for any payment of solatium.
The said decision, however, having regard to the provisions contained in
Section 31 of the Act which lays down the criteria for determination of the
amount of compensation cannot be said to have any application whatsoever in the
instant case.
In Dayal
Singh's case (supra) this court held :
"The
right to get the amount of compensation re-determined must expressly be
provided by the statute. Such a right being a substantive one cannot be sought
to be found out by implication nor can the same be read therewith.
The
appellants, thus, cannot invoke a right by reading the same into a statute
although admittedly there exists none." We do not agree with the
submission of Mr. Sharma that Hari Krishan Khosla (supra) and Dhanwanti Devi
(supra) have wrongly been decided.
We
are, therefore, of the opinion that the impugned judgments cannot be sustained
and are, therefore, liable to be set aside.
The
question, however, which remains for consideration is as to whether the amount
of solatium and interest which the appellant has paid to the respondents should
be directed to be refunded. We think not. Even in Hari Krishan Khosla (supra)
this Court noticed :
"This
is the case in which for 16 years no arbitrator was appointed. We think it is
just and proper to apply the principle laid down in Harbans Singh Shanni Devi
vs. Union of India [C.A. Nos. 470 and 471 of 1985 disposed
of by this Court on February
11, 1985]. The Court
held as under :- "Having regard to the peculiar facts and circumstances of
the present case and particularly in view of the fact that the appointment of
the arbitrator was not made by the Union of India for a period of 16 years, we
think this is a fit case in which solatium at the rate of 30 per cent of the
amount of compensation and interest at the rate of 9 per cent per annum should
be awarded to the appellants. We are making this order having regard to the
fact that the law has in the meanwhile been amended with a view to providing solatium
at the rate of 30 per cent and interest at the rate of 9 per cent per
annum."
"In
these cases also, it is said that the arbitrators have not yet been appointed
despite the demand made in this behalf by the respondents. The amount of solatium
at the rate of 15% per annum and the interest thereupon had been paid in early
eighties when the Punjab and Haryana High Court declared the
said Act ultra vires Article 14 of the Constitution of India.
In the
peculiar fact situation obtaining in these cases and inasmuch as the amounts
sought to be recovered are small which were paid to the respondents decades
back, we are of the opinion that interest of justice shall be met if the
appellants are directed not to recover the amount of compensation from the
respondents pursuant to or in furtherance of this judgment. However, we hasten
to add that this direction shall be not treated as a precedent.
These
appeals are allowed with the aforementioned observations and directions. No
costs.
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