1964 (8) TMI 91 - HC - Indian Laws

Invalidation of Compensation Clause Based on Arbitrary Date

Kamalabai Harjivandas Pareka Versus T.B. Desaid And Anr.

The court declared Clause (b) of Section 8(3) of the Requisitioning and Acquisition of Immovable Property Act, 1952, including the words 'whichever is ... - Issues Involved:1. Ownership of the land.2. Requisition and acquisition of the land.3. Compensation for the land.4. Constitutionality of the Requisitioning and Acquisition of Immovable Property Act, 1952.Detailed Analysis:1. Ownership of the Land:The petitioner claimed to be the owner of a piece of land measuring 2 Gunthas 5 annas out of S. No. 29A at Juhu, which originally belonged to her husband. After his death, she claimed to have succeeded to it by virtue of a will. The respondents did not admit her title, but the court noted that this issue was hardly material to the points raised in the present petition.2. Requisition and Acquisition of the Land:On May 2, 1942, the land was requisitioned for military purposes under Rule 75A(1) of the then-existing Defense of India Rules. The owner received compensation until December 29, 1952, when a notification under Section 7 of the Requisitioning and Acquisition of Immovable Property Act, 1952, was issued. This notification declared the land to have vested in the Central Government.3. Compensation for the Land:The petitioner was offered compensation at the rate of Rs. 11 per sq. yard, totaling Rs. 3080, but she claimed a higher rate of Rs. 100 per sq. yard plus the usual 15% solatium for compulsory acquisition. As there was no agreement, the Chief Judge of the Small Causes Court, Bombay, was appointed as the arbitrator under Section 7. The arbitrator was to determine the amount of compensation, but before the matter could proceed further, the petitioner filed the present miscellaneous petition.4. Constitutionality of the Requisitioning and Acquisition of Immovable Property Act, 1952:The petitioner challenged the provisions of the Act regarding the assessment of compensation. The court examined the Act and its amendments, focusing on the principles and manner of determining compensation as set out in Section 8.- Section 8(1): This section outlines the procedure for determining compensation, including the appointment of an arbitrator and the involvement of experts and assessors.- Section 8(2): Specifies the components of compensation for requisitioned property, including recurring payments and sums for pecuniary loss, vacating expenses, re-occupying expenses, and damages.- Section 8(3): Crucially, this section provides two modes of ascertaining compensation for acquired property:- Clause (a): The market value on the date of acquisition, assuming the property remained in the same condition as at the time of requisition.- Clause (b): Twice the market value on the date of requisition, with the compensation to be whichever is less.The petitioner argued that Clause (b) of Section 8(3) was ultra vires of Article 31 of the Constitution, which requires just and fair compensation equivalent to the market value of the property at the time of acquisition. The court agreed, citing precedents such as the State of West Bengal v. Mrs. Bela Banerjee and subsequent cases, which established that compensation must be the fair market value at the time of acquisition and not based on an arbitrary anterior date.The court held that Clause (b) of Section 8(3), which allowed for compensation based on an arbitrary date (the date of requisition), was unconstitutional. The provision for 'whichever is less' further confirmed that the law did not ensure just compensation.Conclusion:The court declared Clause (b) of Section 8(3) of the Requisitioning and Acquisition of Immovable Property Act, 1952, including the words 'whichever is less,' to be ultra vires of Article 31 of the Constitution and therefore void. The assessment of compensation would henceforth be made without reference to this clause. The petitioner was awarded costs of Rs. 500.