Supreme Court strikes down discriminatory compensation based on Pushtaini and Gair-Pushtaini classification in land acquisition cases

SC set aside HC Full Bench judgment regarding Greater Noida Authority's discriminatory compensation payment based on Pushtaini and Gair-Pushtaini landholder classification during land acquisition. Court found the classification constituted impermissible discrimination against landholders whose property was acquired for city development. The writ petition was allowed, granting appellants the reliefs sought and directing equal treatment in compensation payment regardless of landholder status. Appeal succeeded.

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Issues Involved:
1. Whether the Appellants, by signing the agreement, have waived their right to seek revised compensationRs.
2. Whether the classification made under the Land Acquisition Act, and the UP Land Acquisition Rules, 1997 between Pushtaini Landowners and Gair-pushtaini Landowners for the payment of compensation at different rates is liable to be struck down as violative of Article 14 of the ConstitutionRs.
3. Whether the classification made by the Full-Bench of the High Court between Pushtaini landowners and Gair-pushtaini landowners is in contravention to the law laid down by this Hon'ble Court in the case of Nagpur Improvement Trust and Anr. v. Vithal Rao and Ors. (1973) 1 SCC 500Rs.

Issue-wise Detailed Analysis:

1. Waiver of Right to Seek Revised Compensation:
The Court examined whether the Appellants, by signing the agreement, waived their right to seek revised compensation. It was argued that the Appellants did not exhaust their remedy under Section 18 of the Land Acquisition Act, which allows for objections to the award. However, the Court noted that the challenge was based on a violation of Article 14, a fundamental right, which cannot be barred by procedural requirements. The issue of additional compensation due to the classification of 'Pushtaini' and 'Gair-Pushtaini' landholders arose after the agreement, and thus, the Appellants could not have foreseen this at the time of signing. The Court concluded that the Appellants did not forfeit their right to seek revised compensation because the cause of action accrued after the agreement. Therefore, this issue was answered in the negative and in favor of the Appellants.

2. Classification under the Land Acquisition Act and UP Land Acquisition Rules:
The Court scrutinized whether the classification between 'Pushtaini' and 'Gair-Pushtaini' landowners for compensation was reasonable and not violative of Article 14. The Full Bench of the High Court upheld the classification, stating it was reasonable and had an intelligible differentia. However, the Supreme Court applied the reasonable classification test, which requires the classification to be based on intelligible differentia and have a rational nexus to the object sought to be achieved. The Court found that the classification assumed only 'Pushtaini' landowners permanently resided on the land, without empirical data to support this. The classification was deemed arbitrary and not based on relevant considerations, failing both the reasonable classification test and the Wednesbury Principle. The classification also did not meet the proportionality test, as it was not necessary or proportional to the objective of compensating affected landowners. The Court held that the classification was discriminatory and struck it down as violative of Article 14.

3. Contravention to the Law Laid Down in Nagpur Improvement Trust Case:
The Court examined whether the classification contravened the precedent set in Nagpur Improvement Trust, where it was held that the authority cannot distinguish between types of owners for compensation purposes. The Supreme Court reiterated that the Land Acquisition Act does not distinguish between classes of owners and uniformly provides compensation. The classification between 'Pushtaini' and 'Gair-Pushtaini' landowners was found to be in violation of the law laid down in the Nagpur Improvement Trust case and Article 14. The Court emphasized that the object of land acquisition for public purposes is equally achieved regardless of the type of owner, and any such classification is impermissible.

Conclusion:
The Supreme Court set aside the Full Bench judgment of the High Court, holding that the classification made by the executive actions was bad in law. The Land Acquisition Act does not envisage differential compensation based on such classification. The Court severed the mischief of the arbitrary classification from the executive actions, maintaining the validity of compensation for rehabilitation under Section 23 of the Act. The ex-gratia payment and increased base amount must be given to all landowners in the subject area without discrimination. The appeals were allowed, and the Appellants were entitled to the reliefs claimed in their Writ Petition.

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