TaxTMI 
TaxTMI 
1992 (9) TMI 375
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....te, Patiala, dated 17th March, 1967. The order of requisition was made under Section 29(1) of the Defence of India Act, 1962. The requisitioned land included 157 Bighas and 6 biswas belonging to Diwan Hari Krishan Khosla who died during the pendency of the proceedings in the High Court. His sons Avtar Krishan Khosla and Chand Khosla were impleaded as his legal representatives by an order dated 6th May, 1974. Later on, these lands were acquired by the Central Government under Section 7(1) of the Act. The Competent Authority, Jullundur, determined the compensation at Rs. 1,62,109.37/-. An offer of payment was made to Hari Krishan Khosla who was called upon to communicate his acceptance. By his written reply dated 22nd July, 1971 he requested that the payment be made to him under protest. At the same time, he objected to the inadequacy of the amount awarded to him. He wanted an arbitrator to be appointed and claimed interest of the rate of 6 percent per annum. The Competent Authority refused to pay even the amount of compensation determined. Aggrieved by the said refusal, Hari Krishan Khosla filed a writ petition. 5. When the matter came up before the learned Single Judge he direct....
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....Act stands on a different footing since there is no option to the local authority to resort to one or other of the alternative methods which resulted in acquisition. Therefore, the cases cited in this behalf are clearly distinguishable. (iv) The classification between requisitioned and non-requisitioned land for the purpose of paying less compensation to one and more to the other is not founded on any intelligible differentia. Nor is there any rational nexus to the object of acquisition of property for a public purpose. (v) The liability to pay interest is totally absent under the Act while there is a specific provision concerning the same under the Land Acquisition Act. Thus, Civil Appeal No. 1130-31 of 1975 are directed against the judgment and order dated 30th May, 1974 of the Punjab and Haryana High Court in Civil Writ Nos. 1572 and 1574 of 1972, questioning its correctness. 8. Mr. N.N. Goswamy, learned Counsel, appearing for the Union of India submits that. Section 8(1) of the Act lays down the principles and the method of determining compensation and under Clause (e) of Sub-section (1) of the said section the Arbitrator is enjoined to determin....
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....that the said Act was not discriminatory in juxtaposition to Land Acquisition Act. In this ruling, the scope of Nagpur Improvement Trust (supra) was explained. It is the ratio of this judgment which squarely applies to this case. 13. Without prejudice to the above submissions, learned Counsel for the appellant argues that in any event the Act had come to be included in the 9th Schedule of the Constitution with effect from 10th August, 1975 as Item 89. The effect of such inclusion will be; the protection under Article 31B of the Constitution will be available. The said Article forbids an attack on any one of the legislations included in the 9th Schedule as violative of Articles 14 and 19 of the Constitution. This will be so, notwithstanding the impugned judgments of the High Court as though the said provision was valid from the beginning. That exactly is the ratio in Jagannath etc. etc. v. The Authorised Officer, Land Reforms and Ors. etc. [1972]1SCR1055 . 14. There is one other case to which reference has to be made where this Court upheld the grant of solatium under the Assam Requisitioning Act. That turned on the language of Section 4(3) of the Act. Therefore, that ca....
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....Defence of India Act, 1962 where the Act provided no solatium this Court has upheld the award of solatium in Civil Appeal No. 3058 of 1983 on 31st January, 1983. These authorities fully support the stand of learned Counsel for the respondent. From this point of view the judgment of the High Court should be upheld. 19. Mr. Harish N. Salve, learned Counsel appearing on behalf of respondents in SLP (C) No. 1780 of 1991 submits that the Arbitrator in November 1977 award 15 per cent solatium and 6 percent interest on the enhanced compensation. It is that which is questioned. Therefore, should the Court agree that the appellant's only this part of the award will go while the rest would remain 20. In Civil Appeal Nos. 4688-94 of 1989 for 16 years no Arbitrator was appointed. Under exactly similar situation this Court in Civil Appeal Nos. 470 and 471 of 1985 dated 11th February, 1985 took the view that the award does not call for any interference. 21. In Civil Appeal No. 995 of 1992, Mr. O.P. Sharma, learned Counsel for the respondents urged that should the arguments of the appellants prevail, it is only the enhanced compensation that could be interfered with. 22. Mr. D.V. ....
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.... Before we proceed to determine the questions, it is necessary to set out the circumstances in which the Act came to be enacted. During the World War, lands and buildings were requisitioned under the Defence of India Act, 1939 and the rules made thereunder. Those properties continued to be subject to requisition under the Requisitioned Land (Continuance of Powers) Act, 1947 (XVII of 1947). However, this Act was to expire on 31st of March, 1952. With regard to the property outside the Delhi area Government of India had no power to requisition. In some cases, the States were asked to requisition the property for the purpose of Union. A judicial decision held that the exercise of the State power for the purpose of Union would not be proper. Finding that a large number of" houses in the various cities of India had been requisitioned for Central Government purposes it was considered necessary to have an Act empowering the Central Government to requisition and acquisition. For this purpose, Requisitioning and Acquisition of Immovable Property Ordinance, 1952 (III of 1952) was promulgated. This Ordinance was replaced by the Act. 29. In the above background, we will proceed to consider ....
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....ation was mentioned in the Act itself. In this case it is not so mentioned but such date is dependent on the original requisition. In any case it does not give the person to be compensated a just equivalent of the property he was losing at the date of acquisition. 33. Again at page 474 it is observed: The argument on behalf of the appellant that the basis did not provide for the payment of just equivalent could not be accepted by this Court because of the fact that the appellant had produced no material on which its plea could be sustained. In this case, however, there is no such difficulty. Clause (a) of Section 8(3) lays down a principle aimed at giving the owner of the land something which approximates its just equivalent on the date of acquisition. Clause (b) however directs the arbitrator to measure the price arrived at in terms of Clause (a) with twice the amount of money which the requisitioned property would have fetched if it had been sold on the date of requisition and to ignore the excess of the price computed in terms of Clause (a) over that in terms of Clause (b). The position bears a close similarity with the facts in Bela Banerjee's case, where ....
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....bove, the compensation is provided under Section 8(2), the remaining rights come to be. acquired. 39. In contra-distinction under the Land Acquisition Act, as stated above, the sum total of the rights, namely, the ownership itself comes to be acquired. We may usefully quote from Salmond on Jurisprudence 1966 Twelfth Edition Chapter 8 at page 246-247: Ownership denotes the relation between a person an object forming the subject-matter of his ownership. It consists in a complex of rights, all of which are rights in rem, being good against all the world and not merely against specific persons (a). Though in certain situations some of these rights may be absent, the normal case of ownership can be expected to exhibit the following incidents (b). First, the owner will have a right to possess the thing which he owns. Secondly, the owner normally has the right to use and enjoy the thing owned: the right to manage it, i.e., the right to decide how it shall be used; and the right to the income from it.... 40. Then again, under the Act, the acquisition even though it is for a public purpose is restricted to the two clauses of Section 7(3) of....
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....as the owner is concerned it does not matter to him whether it is one public purpose or the other. Article 14 confers an individual right and in order to justify a classification there should be something which justifies a different treatment to this individual right. It seems to us that ordinarily a classification based on the public purpose is not permissible under Article 14 for the purpose of determining compensation. The position is different when the owner of the land himself is the recipient of benefits from an improvement scheme, and the benefit to him is taken into consideration in fixing compensation. Can classification be made on the basis of the authority acquiring the land? In other words can different principles of compensation be laid if the land is acquired for or by an Improvement Trust or Municipal Corporation or the Government? It seems to us that the answer is in the negative because as far as the owner is concerned it does not matter to him whether the land is acquired by one authority or the other. It is equally immaterial whether it is one Acquisition Act or another Acquisition Act under which the land is acquired. If the existence of two Acts ....
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....t under given circumstances differentiation even in the scale of compensation may comfortably comport with Article 14. No such circumstances are present here nor pressed. The decision in P.C. Goswami v. Collector of Darrang AIR1982SC1214 both of which are again distinguishable from the present one. It cannot also be said as a rule that the State which has got a supply and maintain large public services at great cost should always pay in addition to a reasonable compensation some amount by way of solatium. The interest of the public is equally important. In any event it is not shown that the compensation payable in this case is illusory and unreal. This ruling is an authority for the proposition that solatium is not a must in every case disregardful of the circumstances. Mr. Goswami, learned Counsel for the Union of India is justified in placing reliance on this ruling to advance his contention that the provision in question is not discriminatory. 46. The next case that could be usefully referred to is T.M. Peter's case (supra). This case ; arose under Town Planning Act, 1932 (Travancore Act 4 of 1108). This was a case of acquisition. The cont....
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....nd in the light of what we have just decided Section 25(2) will also apply and "in addition to the market value of the land as above provided, the court shall in every case award a sum of fifteen per centum on such market value in consideration of the compulsory nature of the acquisition. 48. In Narain Das Jain (since deceased) by Lrs. v. Agra Nagar Mahapalika, Agra [1991]1SCR389 where the property was acquired by the Agra Town Improvement Trust under the provisions of U.P. Town Improvement (Appeals) Act, 1920 (3 of 1920), the question arose whether the award of solatium should be made. In paragraph 7 at page 215 it was stated thus: The importance of the award of solatium cannot be undermined by any procedural blockades. It follows automatically the market value of the land acquired, as a shadow leaves no discretion with the court in not awarding it in some cases and awarding in others. Since the award of solatium is in consideration of the compulsory nature of acquisition, it is a hanging mandate for the court to award and supply the omission at any stage where the court gets occasion to amend or rectify. This is the spirit of the provision, wherever made. ....
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....rdhan and Ors. v. Union of India and Anr. (Civil Appeal No. 3058 of 1983, allowed by this Court on 31.1.83) no doubt was a case of acquisition under the Defence of India Act, 1962 but it contains no discussion. It has already been noticed that the award of solatium is not a must in every case as laid down in Prakash Amichand Shah's case (supra). One more authority requires to be referred to. In P.C. Goswami v. Collector of Darrang AIR1982SC1214 it has been held as under: There is, however, one contention advanced by Mr. Nandy which, in our opinion, deserves to be accepted. He contends that in the matter of payment of solatium, no discrimination can be made between acquisitions under the Assam Act and those made under the Land Acquisition Act. Section 4(3) of the Assam Act itself says that if a land is acquired under that Act, the State Government shall be empowered to apply to such land any of the provisions of the Land Acquisition Act, 1894. In a judgment (State of Kerala v. T.M. Peter, [1980]3SCR290 given by this Court very recently, to which Mr. Nandy has drawn our attention, it was held that there is no justification for discriminating between an acquis....
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....oned property was getting compensation does not make any difference, is not correct. Equally, to hold, as the High Court does, that the property requisitioned under the Act can be acquired under the Land Acquisition Act, does not seem to be correct. We have already pointed out how the power of Eminent Domain comes to be exercised under the Land Acquisition Act and how an acquisition under this Act is subject to the statutory embargo unless there is a derequisitioning of the immovable property and separate proceedings are taken under the Land Acquisition Act, there is no possibility of acquiring the property under the Land Acquisition Act. 56. Reference should also be made to Section 8(1)(e) of the Act. That refers to three things: (i) The amount of compensation which appears to be just; (ii) the circumstances of each case; and (iii) the provisions of Sub-sections (2) and (3). The effect of this classification, in our opinion, is that the Arbitrator must determine the amount of compensation which appears to him to be just but he must have regard to Sub-sections (2) and (3) of Section 8. Therefore, where, a property which was subject....
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....was held to be valid. 59. In the result, we hold that the failure to provide solatium at 15% or interest at 6% under Section 8(3)(a) of the Act does not make it discriminatory. 60. Thus we answer Question No. 1 that Section 8(3)(a) is not, in any way, violative of Article 14. Question No. 2: What is the effect of the inclusion of the Act in the 9th Schedule of the Constitution of India? 61. This Act came to be included in the 9th Schedule as Item No. 89 with effect from 10.8.75. The effect of such inclusion of the Madras Land Reforms (Fixation of Ceiling on Land) Act, 1961 which was declared void by this Court came up for consideration in Jagannath etc. etc. v. The Authorised Officer, Land Reforms and Ors. etc. [1972]1SCR1055 . Paragraphs 15 and 16 are extracted as below: On behalf of some of the respondents and the intervener, the Attorney-General of India, it was argued that no re-enactment of the Act was necessary. Our attention was drawn to the wide scope of Article 31-B which sought to cure the defect, if any, in the Acts specified in the Ninth Schedule on the ground that any such Act or any provision thereof was inconsistent with or took away ....
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....said (see at p. 719): ...the High Court was right in holding that Article 31-B does protect the impugned Act from challenge on the ground of violation of fundamental rights. There is no doubt that Article 31-B should be interpreted strictly. But even interpreting it strictly, the only requirement which is laid down by Article 31-B is that the Act should be specified in the Ninth Schedule. Section 28 of the Act which was the main target of attack and which the High Court had finally found as violating Article 14 of the Constitution was held to be protected under Article B from the ground of attack based on infringement of Article. 62. Upholding these contentions it was observed in paragraph 23: Apart from the question as to whether fundamental rights originally enshrined in the Constitution were subject to the mandatory process of Article 368 it must now be held that Article 31-B and the Ninth Schedule have cured the defect, if any, in the various Acts mentioned in the said Schedule as regards any unconstitutionality alleged on the ground of infringement of fundamental rights, and by the express words of Article 31-B such curing of the defect took....
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....rticle 31-B. Those laws and regulations will not be open to challenge on the ground that they are inconsistent with or take away or abridge 3 any of the rights conferred by any of the provisions of Part III of the Constitution. Act and Regulations, which are or will be included in the Ninth Schedule on or after April, 1973 will not receive the protection of Article 31-B for the plain reason that in the face of the judgment in Kesavananda Bharati, there was no justification for making additions to the Ninth Schedule with a view to conferring a blanket protection on the laws included therein. The various constitutional amendments, by which additions were made to the Ninth Schedule on or after April 24, 1973 will be valid only if they do not damage or destroy the basic structure of the Constitution. 65. On this basis, it is contended that Article 14 is the basic structure and since Section 8(3)(a) offends that Article it damages or destroys the basic structure of the Constitution. We have already held in answer to Question No. 1 that there is no violation of Article 14. If this be so, the ratio of Jagannath's case (supra) would squarely apply. 66. In the result, these appeal....