Compulsory acquisition compensation must reflect just equivalent value; anterior-date formula invalid and delay did not bar Article 226 relief.

A compensation formula for compulsory acquisition must provide a just equivalent of the property taken; pegging compensation to the lesser of market value on acquisition and twice the value on requisition was arbitrary because it froze value by an anterior date and ignored later appreciation. Section 8(3)(b) therefore failed Article 31(2) and was invalid. Relief under Article 226 was also not barred by delay, because the petition raised an alleged infringement of a fundamental right and no sufficient basis was shown to refuse discretionary relief. The challenge accordingly succeeded on both grounds.

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Issues: (i) Whether section 8(3)(b) of the Requisitioning and Acquisition of Immovable Property Act, 1952, by pegging compensation to the lesser of the market value on the date of acquisition and twice the market value on the date of requisition, satisfied the requirement of just compensation under Article 31(2) of the Constitution of India. (ii) Whether relief under Article 226 of the Constitution of India should be refused on the ground of delay.

Issue (i): Whether section 8(3)(b) of the Requisitioning and Acquisition of Immovable Property Act, 1952, by pegging compensation to the lesser of the market value on the date of acquisition and twice the market value on the date of requisition, satisfied the requirement of just compensation under Article 31(2) of the Constitution of India.

Analysis: The governing principle under Article 31(2), as applied in the earlier compensation cases, is that the owner must receive a just equivalent of the property taken. A statutory formula that freezes compensation by reference to an anterior date, without a rational connection to the value at acquisition, is arbitrary if it excludes real appreciation and does not reflect the true value of the property taken. The impugned clause compelled the arbitrator to ignore the higher figure otherwise arrived at and to adopt the lower figure tied to the date of requisition, although acquisition could occur many years later. That method did not permit assessment of the true equivalent of the property on the date of acquisition.

Conclusion: Section 8(3)(b) did not satisfy Article 31(2) and was invalid; the conclusion was in favour of the respondent.

Issue (ii): Whether relief under Article 226 of the Constitution of India should be refused on the ground of delay.

Analysis: The petition was filed after the compensation process had progressed, but the High Court treated the alleged delay as not sufficient to defeat a complaint alleging infringement of a fundamental right. The discretionary refusal of relief for delay required a clear basis, and none was shown to warrant interference with the High Court's view.

Conclusion: Relief was not barred by delay; the conclusion was in favour of the respondent.

Final Conclusion: The appeal failed because the compensation formula in section 8(3)(b) was unconstitutional and the challenge was not defeated by delay.

Ratio Decidendi: A compensation formula for compulsory acquisition is unconstitutional if it fixes the amount by an arbitrary anterior-date basis that is not a just equivalent of the property taken at the time of acquisition.

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