Article 14 limits compensation classifications in land acquisition: status-based differential treatment and unequal ex gratia fail constitutional scrutiny.

An agreement under a compensation scheme did not waive landowners' right to challenge a later discriminatory revision in compensation, because the equality grievance arose only after the impugned classification came into existence. A distinction between Pushtaini and Gair-pushtaini landowners for compensation and ex gratia failed Article 14 scrutiny: it lacked a substantiated intelligible differentia, had no rational nexus with a lawful object, and was disproportionate. The note also records that differential compensation based on personal status or residence-linked labels is impermissible where the statute does not authorise it, and that the classification was inconsistent with the principle in Nagpur Improvement Trust.

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Issues: (i) Whether the landowners waived their right to seek revised compensation by signing the agreement under the compensation scheme; (ii) whether the differential treatment between Pushtaini and Gair-pushtaini landowners for payment of compensation and ex gratia was violative of Article 14; (iii) whether the classification upheld by the Full Bench was inconsistent with the law laid down in Nagpur Improvement Trust.

Issue (i): Whether the landowners waived their right to seek revised compensation by signing the agreement under the compensation scheme?

Analysis: The right to challenge the later grant of additional compensation arose only after the agreement had been entered into, when the impugned classification and ex gratia structure came into existence. A constitutional challenge based on equality could not be defeated merely because an agreement had earlier been signed, especially when the grievance was not against the agreed base compensation alone but against a subsequent discriminatory enhancement in favour of one class.

Conclusion: The signing of the agreement did not amount to waiver of the right to seek revised compensation. This issue was answered in favour of the appellants.

Issue (ii): Whether the differential treatment between Pushtaini and Gair-pushtaini landowners for payment of compensation and ex gratia was violative of Article 14?

Analysis: The classification was tested on the touchstone of reasonable classification, requiring intelligible differentia and a rational nexus with a lawful object. The stated object of rehabilitation of original residents could not sustain a cut-off based distinction in the absence of empirical support, because the acquisition and the need for rehabilitation could affect non-Pushtaini landowners in the same manner. The classification also failed the proportionality standard, since the statutory framework already addressed compensation factors under the land acquisition law and the executive distinction introduced an arbitrary and under-inclusive burden without adequate safeguards.

Conclusion: The classification was held to be arbitrary and violative of Article 14. This issue was answered in favour of the appellants.

Issue (iii): Whether the classification upheld by the Full Bench was inconsistent with the law laid down in Nagpur Improvement Trust?

Analysis: The governing principle is that land acquired for a public purpose cannot attract differential compensation based on the nature or status of the owner when the public purpose is equally served irrespective of ownership attributes. The impugned distinction between landowners was therefore contrary to the settled rule that compensation norms cannot rest on irrelevant personal classifications where the statute itself does not sanction such differentiation.

Conclusion: The Full Bench approach was found to be inconsistent with the binding law and could not be sustained. This issue was answered in favour of the appellants.

Final Conclusion: The impugned classification and the consequent denial of equal compensation were set aside, the writ petition before the High Court stood allowed, and the appellants were held entitled to the reliefs claimed.

Ratio Decidendi: Where the statute does not authorize differential compensation based on personal status or residence-linked labels, an executive classification governing land acquisition compensation must satisfy Article 14 by a real and substantiated intelligible differentia, a rational nexus with a lawful object, and proportional safeguards; otherwise it is invalid.

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