Article 14 and land acquisition compensation: discriminatory exclusion of solatium severed, while the scheme largely survived.

A compensation scheme under the Town Planning Act was treated as a special acquisition class for development and town-improvement purposes, but the exclusion of solatium by disapplying Section 25 of the Land Acquisition Act was held to lack a rational nexus with the object of compensation and was therefore violative of Article 14. The invalidity was confined to the offending exclusionary portion of Section 34(1); applying severability, the remaining acquisition scheme was allowed to stand, with compensation to be worked out on the basis that the omitted provision continued to apply.

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Issues: (i) Whether the differential treatment in compensation under the Town Planning Act, as compared with the Land Acquisition Act, violated Article 14 of the Constitution of India. (ii) Whether the invalidity, if any, required striking down the whole of Section 34(1) of the Town Planning Act or only the offending part excluding Section 25 of the Land Acquisition Act.

Issue (i): Whether the differential treatment in compensation under the Town Planning Act, as compared with the Land Acquisition Act, violated Article 14 of the Constitution of India.

Analysis: The acquisition scheme under the Town Planning Act was held to form a special class, distinct from ordinary land acquisition, because it served a developmental and town-improvement purpose and operated through a structured, time-bound scheme-making process. However, when the statute denied solatium by excluding Section 25 of the Land Acquisition Act, the classification in the matter of compensation had no rational relation to the object sought to be achieved. Compensation could not be varied merely because the acquisition was for a different public purpose, unless the distinction had a legitimate nexus with the compensation scheme.

Conclusion: The exclusion of solatium-based treatment was unconstitutional as violative of Article 14.

Issue (ii): Whether the invalidity, if any, required striking down the whole of Section 34(1) of the Town Planning Act or only the offending part excluding Section 25 of the Land Acquisition Act.

Analysis: The discriminatory element was confined to the portion of Section 34(1) that excluded the application of Section 25 of the Land Acquisition Act. The remaining scheme of acquisition and compensation could operate without that exclusion. The court applied severability and declined to destroy the entire provision where the vice could be cured by excising the offending words and restoring parity with the Land Acquisition Act as to solatium.

Conclusion: Only the exclusion of Section 25 of the Land Acquisition Act was struck down and severed; Section 34(1) otherwise survived.

Final Conclusion: The appeal succeeded in part. The Town Planning Act was upheld generally, but the discriminatory exclusion of solatium was removed, with compensation to be worked out on the footing that the omitted provision would still apply.

Ratio Decidendi: A classification for compensation under an acquisition statute is unconstitutional under Article 14 if the difference in treatment rests solely on the public purpose and has no rational nexus with the object of compensation, and the offending part may be severed where the remainder of the provision can operate independently.

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