Full Judgment Text
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PETITIONER:
THE STATE OF TAMIL NADU & ORS.
Vs.
RESPONDENT:
ANANTHI AMMAL & ORS.
DATE OF JUDGMENT22/11/1994
BENCH:
BHARUCHA S.P. (J)
BENCH:
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:
HEADNOTE:
JUDGMENT:
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
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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
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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:
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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
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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
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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
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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
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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 thereunder.
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
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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
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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
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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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