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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

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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

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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

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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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