Just compensation in land acquisition fails where compensation is fixed by an arbitrary earlier date, rendering the amendment void ab initio.

A pre-Constitution amendment to the Land Acquisition Act, 1894 was held to fail the requirement of just compensation under section 299 of the Government of India Act, 1935 because it fixed compensation by reference to an arbitrary earlier date unconnected with the value at acquisition and excluded solatium. The Court treated section 299 and the constitutional compensation principle as pari materia and held the amendment void ab initio. It further held that article 31(5) could not revive a law void from inception, and that articles 31-A and 31-B did not apply to validate a dead pre-Constitution law. Compensation therefore had to be determined under the Land Acquisition Act, 1894.

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Issues: Whether the Land Acquisition (Bombay Amendment) Act, 1948 was void for failure to provide compensation amounting to a just equivalent under section 299 of the Government of India Act, 1935, and whether it was saved by article 31(5), article 31-A or article 31-B of the Constitution.

Analysis: The Act, though a pre-Constitution enactment, altered the Land Acquisition Act, 1894 so that compensation for housing-scheme acquisitions was determined with reference to an earlier date and without solatium. Section 299(2) of the Government of India Act, 1935 conditioned legislative power to compulsory acquisition on a law providing compensation for the property acquired and the principles for determining it. The governing principle, drawn from the earlier constitutional interpretation of compensation, was that compensation must be a just equivalent of what the owner was deprived of, and an anterior valuation date unconnected with the acquisition could be arbitrary. The Court treated the two provisions as pari materia for this purpose and held that the Bombay amendment did not satisfy the statutory requirement because the dating back to 1 January 1948 bore no relevant relation to the value at acquisition. The Court further held that article 31(5) did not resuscitate a law void from inception, article 31-A did not apply to a law that never had legal existence, and article 31-B could not be used by analogy to validate a dead pre-Constitution law.

Conclusion: The Act was void ab initio, was not saved by article 31(5), article 31-A or article 31-B, and the acquisition compensation had to be determined under the Land Acquisition Act, 1894.

Final Conclusion: The appeals succeeded on the validity issue, the High Court's decree was set aside, and the matters were sent back for fresh disposal in accordance with law on the basis that the impugned amendment had no legal force.

Ratio Decidendi: Where a pre-Constitution acquisition statute fixes compensation by an arbitrary anterior date unconnected with the value of the property at acquisition, it fails the requirement of just compensation under section 299 of the Government of India Act, 1935 and is void from inception, incapable of being revived by constitutional saving provisions applicable only to existing valid laws.

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