NAGPUR IMPROVEMENT TRUST AND ANOTHER v. VITHAL RAO AND OTHERS
Citation: [1973] 3 S.C.R. 39; 1972 INSC 295
Court: Supreme Court of India
Bench: S.M. SIKRI , J.M. SHELAT, A.N. RAY, I.D. DUA, D.G. PALEKAR, M. HAMEEDULLAH BEG, S.N. DWIVEDI
Judgment date:
Case summary
1972 INSC 295. Supreme Court of India judgment dated 1972-12-11. NAGPUR IMPROVEMENT TRUST AND ANOTHER v. VITHAL RAO AND OTHERS. Read the judgment and case...
Judgment text
40 SUPREME COURT REPORTS (1973] 3 S. C. R. A NAGPUR IMPROVEMENT TRUST AND ANOTHER v . .. VITHAL RAO AND OTHERS December 11, 1972 [S, M. SIKRI, C. J. , J. M. SHELAT, A. N. RAY, D. -0. PALEKAR, B M. H. BEG, S. N. DWIVEDI AND I. D. DUA, JJ. J . Nagpur Improvement Trust Act, 1936 and Land Requisition Act 1894 -Different terms of compensation for land acquired under the two Acts-Where and may be at its instance9 but nevertheless the acquisition is by the Government. If this is so, it enables the State Government to discriminate between one owner equally situated from another owner. [45G] It is now well-settled that the State can make a reasonable classification f? r the . purpose o_f the legisfation provided it is based on intelligible differen· tia hav. mg. a r~tiona! ~elation with the object sought to be achieved by the legislation in question. In this connection it must be borne in mind that the object itself should be lawful.
[47D] The legislature cannot lay down different princip~s of compensation for lands acquired say for a hospital or a school or a Government build· ing. All three objects are public purposes and so far as the owner is concerned it docs not matter to him whether it is one public purpose or the other. Art. 14 confers an individual right and in order to justify a classification there should be something which justifies a different treatment to this individual right. Ordinarily a classification based on the public purpose is not permissible under Art. 14 for the purpose of deter· mining compensation. [48A] Similarly different principles cannot be laid if the land is acquired for or by an Improvement Trust or Municipal C\Jrporation or Government because so far as the owner is concerned it does not matt.. °I' to him whether the land is acquired by one authority or the other.
[48D] It is equally immaterial whether it is one Acquisition Act or aoother Acquisition Act under which the land is acquired; if the existence of two Acts enables the State to give one owner different treatment from another equally situated the owner who is discriminated against can claim the protectiotn of Art. 14. [48E) To accede to the contention of the appellant and the intt:rvening states would be destructive of the protection afforded by Art. 14 of the Consti· tution. The States would only have to constitute separate acquiring bodii:s for each city, or Division or indeed to achieve one special public purpose and lay down diff. erent principles of compensation. [49D] Nandeshwar Prasad v. U. P. Govt. , A. LR. 1964 S. C. 1217, P. Vaira-velu Mudaliar v. Special Deputy Collector, Madras, (1965) 1 S. C. R. 614; 619 and Balammal & Ors. v. State of Madras, [1969) 1 S. C. R. 90, referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2139 of 1968.
Appeal by certificate from the judgment and order dated July 16, 17, 1968 of the Bombay High Court in S. C. A. No. 504 of 1967. V. M. Tarkunde, Y. R. Dandige and A. G. Ratnaparkhi, for appellant No. 1. S. V. Natu, K. K. Khamberker, P. Kesava Pillai and M. R. K. Pillai, for respondent No. 1. B. D. Sharma, for respondent No. 2. Y. S. Dharmadhjkari, Advocate-General, Madhya Pradesh and I. N. Shroff, for Advocate-General Madhya Pradesh {Intervener). 0, P. Rana, for Advocate-General U. P. (Intervener). NAGPUR IMPROVEMENT TRUST V. V, RAO (Sikri, C. J. ) ~ l D. Goburdhan, for Advocate-General, Bihar (Intervener). A. V. Rangam and A. Subhashini, for Advocate-General, Tamil Nadu (Intervener). K. M. Nair, for Advocate-General, Kerala (Intervener). 0. N. Tikku and Vineet Kumar, for Advocate-General, J. & K. (Intervener). The Jud&ment of the Court was delivered by SIKRI, C. J. This appeal by certificate of fitness granted °!? Y the High Court of Judicature at Bom~ay, Nag~ur ~ench\ .
1s directed against the judgment of the High Court m Wnt Petltion No. 504 of 1967 filed under arts. 226 and 227 of the Constitution, by Vithal Rao, respondent before us, hereinafter referrd to as the petitioner. The petitioner was a tenant of some fields in village Binakhi in Petwari Circle No. 10, Nagpur. He had applied to the Agricultural Lands Tribunal under a local act for fixing the purchase price of the said fields. On May 3, 1962, a notice was issued under s. 39 of the Nagpur Improvement Trust Act, 1936-hereinafter referred to as the Improvement Act. Section 39 of this Act deals with the preparation, publication and transmission of notice as to improvement schemes. and supply of documents to applicants. On November 17, 1961 the Improvement Trust applied for sanction of its scheme by the Government, and on January 9, 1965, the Government sanctioned the scheme under s. 45 of the Improvement Act.
On February 28, · 1966 proceedings were started before the Land Acquisition Officer and on June 12, 1967 an award was passed by the Land Acquisition Officer fixing the II compensation at Rs. 45,910/- for 44. 19 acres of land acquired. On June 15, 1967 the petitioner filed the writ petition under arts. 226 and 227 of the Constitution. In this petition the validity of the Improvement Act was challenged on various grounds, one of the grounds being that the Improvement Act was in violation of Art. 14 of the Constitution inasmuch as it empowered the acquisition of lands at prices lower than those which would have been payable if they had been acquired under the Land Acquisition Act, 1894. The High Court held that as the acquisition is by the State in all cases where the property is required to be acquired for the P~s . of. a scheme ! I°l!
Illed ~y the Trust and such beinit the po&1tlon, 1t IS not penruss1ble without v10Iating the guarantee under Article 14 of the Constitution for the State to acquire any property under the provisions of the Land Acquisition Act as amended by the Improvement Trust Act in so far as they relate to the basis of ~. determination and payment of compensation. It must, therefore, be held that the provisions of paragraphs 10(2) and 10(3) in so \ far as they add a new Clause ( 3) (a) to Section 23 and a proviso to Sub-section (2) of Section 23 of the Land Acquisition Act are ultra vires as violating the guarantee of Article 14 of the Constitution. In the result the petition was allowed, the award set aside, and the matter was remanded to the Land Acquisition Officer for determination of compensation aceording to the law and in the light of the decision by the High Court. As the case was important, the High Court granted a certificate under art. 132(1) and art. ! 31(1)(c) of the Constitution.
Before we deal with the contentions of the learned counsel for the appellant we· may briefly examine the relevant provisions of the Improvemell'I Act. This Act came into force on December 25, 1936. It was passed before the Government of India Act, 1935 came into force. The Preamble states : "Whereas it is expedient to make provision for the in1-provement and expansion of the Town of Nagpur in the manner hereinafter provided .... " Section 3 of the Act creates the Nagpur Improvement Trust as a body corporate. Chapter IV of the Act deals with the Improvement schemes. Section 26 provides for the matters which may be included in an improvement scheme. One of the matters is "the acquisition by purchase, exchange, or otherwise of any property necessary for or affected by the execution of the scheme. " Section 27 describes various types of inlprovement schemes.
They are (a) a general improvement scheme, (b) a re-building scheme; (c) a re-housing scheme; ( d) a street scheme; ( e) a deferred street scheme (f) a development scheme; (g) a housing accommodation scheme; (h) a future expansion or improvement scheme and (i) a drainage or drainage including sewage disposal scheme. The scheme in pursuance ol' which the lands in the present case were acquired was a housing accommodation scheme. Section 39, as stated above, provides for the issue of a notice after an improvement scheme has been framed. Under s. 41, the Trust is obliged to serve a notice of the proposed acquisition of land on certain persons. Section 43 enables the Improvement Trust to abandon an improvement scheme, ·after considering any objection, representation or statement of dissent received and after hearing all persons, or to apply to the State Government for sanction to NAGPUR IMPROVEMENT TRUST V. V. RAO (Sikri, C. J.
) 43 A the scheme with such modifications, if any, as the Trust may con-sider necessary. The decision would be that of the Improvement Trust. Section 44 gives wide powers to the Government to sanction with or without modification or to refuse a sanction or to re f determining compensation if the object o{ the legislation is to compulsorily acquire land for public purposes ? It would not be disputed that different principles of compensation cannot be formulated for lands acquired on the basis that the owner is old or young, healthy or ill, tall or short, or whether the owner has inherited the property or built it with his own efforts, or whether the owner is a politician or an advocate. Why is this sort of classification not sustainable ? Because the object being to compulsorily acquire for a public purpose, the object is equally achieved whether the land belongs to one type or another type. Can classification be made on the hp.
sis of the public purpose for the purpose of compensation for which land is acquired ? In (I) A. l. R. 1964 S. C. 1217. (1) [1965] I S. C. R. 614, 619. other words can the legislature lay down different principles •Of compensation for lands acquired say for a hospital or a school or a Government building ? Can the legislature say that for a hospital land will be acquired at 50% of the market value, for a school at 60% of the value. and for a Government building at 70% oi the market value ? All three objects are public purposes and as far as the owner is concerned it does not matter to him whether it is one 8 public purpose or other. Art. 14 confers an individual right and in order to justify a classification there should be something which justifies a different treatment to this individual right. It seems to us that ordinarily a classification based on the public purpose is not permissible under Art 14 for the purpose of determining compensation.
The position is different when the owner of the land himself is the recipient of benefits from an improvement scheme, and the benefit to him is taken into consideration in fixing compensation. Can classification be made on the basis of the authority acquiring the land ? In other words can different principles of compensation be laid if the land is acquired for or by an Improvement Trust or Municipal Corporation or the Government ? It seems to us that the answer is in the negative because as far as the owner is concerned it does not matter to him whether the land is acquired by one authority or the other. It is equally immaterial whether it is one Acquisition Act or another Acquisiton Act under which the land is acquired. If the existence of two Acts enables the State to give one owner different treatment from another equally· situated the owner who is discriminated against, can claim the protection of Art. 14.
It was said that if this is the true position the state would find it impossible to clear slums, to do various other laudable things, If this argument were to be accepted it would be totally destructive of the protection given by Art. 14. It would enable the State to have one law for acquirin_g lands for hospital, one law for acquiring lands for schools, one law acquiring lands for clearing slums, another for acquiring lands for Government buildings; one for acquiring lands in New Delhi and another for acquiring lands in Old Delhi. It was said that in many cases, the value of the land has increased not because of any effort by the owner but because of the general development of the city in which the land is situated. There is no doubt that this is so, but Art. 14 prohibits the expropriation of the unearned increment of one owner while leaving his neighbaur un-touched. This neighbour could sell his land reap the unearned increment.
If the object of the legislation is to tax unearned increment it should be done throughout the State. The State cannot achieve this object piece-meal by compulsory acquisition of land of some owners leaving others alone. If the object is to clear / NAGPUR IMPROVEMENT TRUST V. V. RAO (Sikri, C. /. ) 49 slums it cannot be done at the expense of the owners whose lands are acquired, unless as we have said the owner are directly benefited by the scheme. If the objeot is to build hospitals it cannot. be done at the expense of the owners of the land which is acquired. The hospital, schools etc. must be built at the expense of the whole community. It will not be denied that a statute cannot tax some owners of land leaving untaxed others equally situated. If the owners of the land cannot be taxed differently how can some owners be in-directly taxed by way of compulsory acquisition ? It is urged that if this were the law it. will tie the hands of the State in under-taking social reforms.
We do not agree. There is nothing in the Constitution which debars the State from bettering the lot of millions of our citizens. For instance there is nothing to bar the State from taxing unearned increment if the object is to deny owners the full benefit of increase of value due to development of a town. It seems to us, as we have already said, that to accede to the contentions of the appellant and the States would be destructive of the protection afforded by Art. 14 of the Constitution. The States would only have to constitute separate acquiring bodies for each city, or Division or indeed to achieve one special public purpose and l_ay down different principles of compensation. In P. Vajrave/u Mudaliar v. Special Deputy Collector, Madras(') there were two Acts under which the land of an owner could be acquired.
The land could have be~ acquired for various schemes under the Land Acquisition Act, referred to as the Principal Act, in the judgment, and the Amending Act (The Land Acquisition (Madras Amendment) Act, 1961). This Court observed: - "The land could have been acquired for all the said purposes under the Principal Act after paying the r market value of the land. The Amending Act em-powers the State to acquire land for housing scheme at a price lower than that the State has to pay if the same was acquired under the Principal Act. " The Court examined various justifications for the classi-fications which were put forth by the State, and then con-cluded:- "From whatever aspect the matter is looked at, the alleged differences have no reasonable relation to the object sought to be achieved. It is said that the object of the Amendine; Aot in itself may project the differences in the lands sought to be acquired under the two Acts. This argument puts the cart before the horse.
It is one thing to say that the existing differ- (! ) [1965] I S. C. R. 614. S-L631 Supreme Court/73 ences between persons and properties have a reasonable relation to the object sought to be achieved and it is totally a different thing to say that the object of the Act itself creat-,,d the differences. Assuming that the said proposition is sound, we cannot discover any differences in the people owning lands or in the lands on tho~ basis of the object. The object is to acquire lands for housing schemes at a low price. For achieving that object, any land falling in any of the said catei:ori·~s can be acquired under the Amending Act. So, too, for a public purpose any such land can be acquired under the principal Act. We, therefore, hold that discrimination is writ large on the Amending Act and it cannot be sustained on the principal of reasonable classification. We, therefore, hold that the Amending Act clearly infringes Art. 14 of the Constitution and is void". In Balammal & Ors. v.
State of Madras(') in which the facts are substantially similar, the Board constitured under the Madras City Improvement Trust Act, (Madras Act 16 of 1945) was authorised by virtue of sec. 71, with the previous sanction of the Government, to acquire land under the provisions of the Land Acquisition Act, 1894 for carrying out any of the purposes of the Act which included Town Expansion Scheme (This sec. 71 is equivalent to sec. 59 of the Improvement Act). For the purpose of acquiring land for the Board under the Land Acquisition Act, 1894 sec. 73 provided inter alia, that the said Act shall be subjected to the modifications specified in the Schedule (This section 73 corresponds to sec. 61 of the Improvement Act). The Schedule to the Act provided for modification in the Land Acquisition Act for certain specific purposes.
The Madras Act of 1945 as replaced by the Madras City Improvement Trust Act (Madras Act 37 of 1950) made an important change inasmuch as the result was that by the change persons whose lands were compulsorily acquired under the Madras Act 37 of 1950 were deprived of the right to the solatiwn which would be awardable if the lands were acquired under the Land Acquisition Act. In this connection this Court observed : "But, in our judgment, counsel for the owners is right in contending that sub-cl. (2) of cl. 6 of the Schedule to Act 37 of 1950, insofar as it depriwd the owners of the lands of the statutory addition to the market-value of the lands under s. 23(2) of :ile Land Acquisition Act is violative of the equality clause of the Constitutjon, and is on that account void. If the (I) [1969] l S. C. R. 90. NAGPUR IMPROVEMENT TRUST v. V. RAO (Sikri, C. J.
) 51 State had accquired the lands for improvement of the town under the Land Acquisition Act, the acquiring authority was bound to award in addition to the market-value 15% statutory under s. 23(2) of the Land Acquisition Act. But by acquiring the lands under the Land Acquisition Act as modified by the Schedule to the Madras City Improvement Trust Act 37 of 1950 for the Improvement Trust which is also a public purpose lhe owners are, it is claimed, deprived of the right to that statutory addition. An owner of land is ordinarily entitled to receive the solatium in addition to the market-value for compulsory acquisition of his land, if it is acquired under the Land Acquisition Act, but not if it is acquired under the Madras City Improvement Trust Act. A clear case of discrimination which infringes the guarantee of equal protection of t1ie law arises, and the owners of the lands which are compul· sori! y acquired must on 'he decisions of ;this Court, be deemed invalid".
After reviewing some ,_,... -lier cases, the Court held : "We, therefore, hold that cl. 6 sub-cl. (2) of the Schedule read with s. 73 of Madras Act 37 of 1950 which deprives the owners of the statutory right to solatium at the rate of 15 % on the market-value of the lands, is invalid, and the owners of the lands are -entitled to the statutory solatium under s. 23(2) of the Land Acquisition Act in consideration of compulsory acquisition of their land. " The learned counsel was not able to satisfy us that the above case was distingttishable. We are of the opinion that the case was rightly dcx:ided and must govern this case. In this view of the matter, it -is not necessll! Y to refer to all the cases referred to us at the Bar. We may mention that Mr. Tarkunde also placed reliance on Art. 31(A)(l)(a) of the Constitution. It is now well settled that Art. 31 (A~ (1 )(a) has relevance to agrarian reforms and development.
· It has nothing to do with acquisition of land for building of a capital of a State. In the result the appeal fails and is dismissed with costs. G. C Appeal dismissed.
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