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TaxTMI 
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2023 (2) TMI 1245
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....s, Advs., Pradeep Kant, Sr. Adv., Rohit Kumar Singh, AOR, Kamini Jaiswal, Rani Mishra, Advs. and Omanakuttan K.K., AOR JUDGMENT Krishna Murari, J. 1. These appeals are directed against the judgment and order dated 30.03.2018 passed by a Full Bench of the High Court of Judicature at Allahabad (hereinafter referred to as 'the High Court'), The reference to Full Bench came to be made under the following circumstances: 1.1. Writ Petition No. 61449 of 2009, Smt. Madhuri Srivasatava v. State of U.P. and Ors. (2016) 6 SCC OnLine AII 2832 along with other connected petitions were filed by certain landholders whose land was acquired by NOIDA challenging the decision of the Board of Directors of NOIDA dated 07.01.1998 as also the approval granted to the said resolution by the State Government dated 02.03.2009 whereby a distinction was carved out in the matter of payment of compensation by creating a classification between "Pushtaini" and "Gair-pushtaini" landholders. The 'Pushtaini' landholders whose lands were acquired, were given additional compensation @ Rs. 3 per sq. yard along with 15% as rehabilitation bonus on the compensation already awarded, as also the 1....
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....n, for language, once adopted inside the realm of law, materializes itself a much more powerful being, one which must be understood in the right historical context. 7. The word 'Pushtaini' is a Persian word and finds its origin from the word 'Pusht', which means 'back'. The said word has been historically used in the context of ancestry. Any possession, tale or legend, that has roots to a particular ancestry, to denote it's significance to the said ancestry, the word 'Pushtaini' is used. As is obvious, since the word 'Gair' which finds its origin in Urdu language means 'other than', thus, 'Gair-Pushtaini' would mean one which is not 'Pushtaini'. 8. What we find most interesting however, is that ancestry as a concept, especially before times of modern private property ownership, had remained to be a tool for inclusivity and not exclusion. In such a context, the use of the word "Pushtaini" by the Authority, to exclude compensation might be a historically inaccurate interpretation. While this is not consequential to the merits of the case, it is in our opinion a worthwhile observation, for law has to power to le....
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....use Under Sections 17(1) read with Section 17(4) of the 1894 Act. The bunch of the said Writ Petitions came to be decided by the another Full Bench of the High Court titled as Gajraj v. State of U.P. (2011) SCC OnLine AII 1711. The High Court concluded that the urgency Clause was wrongly invoked, but saved the acquisition for the reason that much development had already taken place over the said land and the nature of land stands completely changed. The Full Bench further in order to compensate the landholders directed an additional compensation to be paid to the landholders at the rate of 64.70% of the already paid compensation and a further direction was issued to allot developed Abadi land to the extent of 10% of their acquired land, subject to a cap of Rs. 2,500/- square meter. The Full Bench never made any distinction between 'Pushtaini' and 'Gair-Pushtaini' farmers for payment of the additional compensation or allotment of land. The Full Bench also relying upon the decisions rendered in the case of Radheyshyam (Dead) through L.Rs. and Ors. v. State of U.P. and Ors. (2011) 5 SCC 553, Greater Noida Industrial Development Authority v. Devendra Kumar and Ors. (201....
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....tee submitted its report after making a recommendation for payment of the amount @ Rs. 310 per square metre on account of Ex-gratia to the Ancestral Agriculturists of the land situate in 8 Villages. 15. The report of the Committee dated 25.10.2008 is being reproduced hereunder for a ready reference: ANNEXURE P-4 25.10.2008 Recommendation of the Committee constituted in connection with making consideration on the demands of bonus/ex-gratia/compensation enhancement at the enhanced rate in connection with the land of Village Ghodi Bachheda and other Villages as per Order No. 4/4/1/2008 - C.X. (1) Lucknow dated 4.09.2008 of the Government of Uttar Pradesh Following Committee has been constituted in connection with making consideration on these types of demands and bonus/ex-gratia/compensation enhancement at the enhanced rate in connection with the land of Village Ghodi Bachheda and other Villages vide Order No. 4/4/1/2008 C.X. (1) Lucknow dated 4.09.2008 of the Government of Uttar Pradesh: 1. Shri Thakur Jaibir Singh, Hon'ble Minister, Rural Engineering Service, Agricultural Foreign Trade and Agriculture Export Chairman 2. Chief Executiv....
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....irections while enclosing them as per Authority letter No. 931/land-record/L.P./2008 dated 7.03.2008/903/land-record/LP/2008 dated 10.03.2008, Land Record/la/2008 dated 13.03.2008, 1038/land-record/L.A./2008 dated 29.04.2008, 1055/land-record/LA/2008 dated 5.05.2008/1069/land-record/LA/2008 dated 9.05.2008, 1113, 1115/land-record/LA/2008 dated 06.06.08. Thereafter, by Order dated 10.05.2008 of the Chairman and Chief Executive Officer, Greater Noida, for examination of the demand of compensation enhancement raised by the Agriculturists, a Committee of District Magistrate, Gautam Buddha Nagar, Chief Executive Officer, Deputy Chief Executive Officer, Greater Noida was constituted and in its report dated 21.07.2008, recommendation was made to make consideration for additional amount @ Rs. 175-200 square metre to the Agriculturists of the land acquired in the Financial Years 2006-2007 of the Village Ghodi Bachheda including other Villages. Such directions were given while making perusal of the Recommendation of the Committee in the 72nd Meeting dated 11.08.2008 of the Authority Board, that while making calculation of the situation of its financial source and its management, the case be ....
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.... 20. Mehndi Hassan, 21. Umesh, 22. Vikram Singh, 23. Satbir Pradhan, 24. Naresh Upadhyay, 25. Ajith Mukhiya, 26. Rampal Havaldar, 27. Nemvir, Pradhan, Garba and etc. etc. 3. Grounds of the demand and memo submitted by the Agriculturist - There records were received in support of detailed Memos and particulars in connection with the demands from the Villages in their meeting by the Committee. The agriculturist of the land acquired in the year of 2006-2007 of Village Ghodi Bachheda and including other Villages have collectively produced detailed and factual Memos including necessary records before the Committee and even grounds were also raised by the Agriculturists orally in support of their demand, wherein, main grounds are included, which are as under: 1. The farmers of questioned Villages have given value enhancement Memo on 2.04.2006, whereon, the Greater Noida Development Authority gave Assurance letter in written on 5.01.2007 after 10 days, that, after calling the rates of Tronica City and etc. in the GDA, till the last week of the February 2007, decision will be taken in connection with enhancing....
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.....10.2006 6. Dadha 215.6010 27.10.2006 7. Mathurapur 122.2699 27.10.2006 8. Daabra 111.8868 31.01.2007 Agriculturist organization, Agriculturists of these Villagers have also given a number of Memos for demanding enhancement of compensation at the time of constitution of the Committee under chairmanship of the Divisional Commissioner, Meerut vide Order dated 31.12.2007 of the Government and even prior to it. The copy of consent letter dated 5.01.2007 signed by the then Deputy Chief Executive Officer, Greater Noida and consideration and consultation made on the Memos submitted on 5.01.2007 in the matter by the Villagers with Member of Parliament Shri Ashok Pradhan and the then MLA Shri Nawab Singh Nagar was also provided to the agriculturists, wherein, it is mentioned that this decision has been taken in connection with enhancing the compensation of the acquired land that after calling the rates of compensation of the land being acquired by the Ghaziabad Development Authority and the land of Tronica City of Housing Development Board, till the last week of February, decision will be taken in connection with enhancing the compensati....
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....tre on account of Ex gratia to the ancestral Agriculturists of the questioned land of 8 Villages detailed in Para No. 4 possession of which has been received in the financial year 2006-2007 and the Committee is hereby further recommended to submit the recommendation before the Greater Noida Authority Board for necessary proceedings. Sd/-, Shravan Kumar Sharma, District Magistrate, Gautam Buddha Nagar Sd/- (Pankaj Agarwal), Chief Executive Officer, Greater Noida Sd/- (Thakur Jaiveer Singh), Hon'ble Minister Rural Engineering Service Agriculture Foreign Trade and Agriculture Export, Uttar Pradesh 16. Based on the aforesaid report, a decision was taken in the 74th Board Meeting of Greater Noida for payment of additional compensation/ex-gratia @ Rs. 310 per square metre only to the 'Pushtaini' farmers of 8 villages. 17. The Minutes of the 74th Board Meeting of the Greater Noida Authority dated 03.11.2008 are being reproduced hereunder: ANNEXURE P-5 S. No. 1 - For approval of minutes of 74th Board Meeting of the authority 74th Board meeting of Authority was held on 03.11.2008. ....
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....ion enhancement of the enhanced rates in connection with the land of Village Ghodi Bachheda and other Villages. 1. Sri Thakur Jaiveer Singh Hon'ble Minister, Rural Engineering Service, Agriculture Foreign Trade and Agriculture export -Chairman 2. Chief Executive Officer, Greater Noida member 3. District Magistrate, Gautam Buddha Nagar - Member Coordinator The committee has submitted its recommendation on 25.10.2008, wherein, the recommendation has been made to make payment on account of ex-gratia @ Rs. 310 square metre to the ancestral agricultural of the land whose possession has been received in the Financial Year 2006-2007 of 1.04.2006 by the Greater Noida in respect of the land of Village Ghodi Bachheda and recommendation has been made to submit the matter with recommendation of the Committee before the Greater Noida Authority Board for necessary proceedings. The report dated 25.10.2008 of the Committee is enclosed and that it is a part of agenda. Overall Compensation Amount of Rs. 5522134695.00 (Rupees Five Arab fifty two crores twenty one lakhs thirty four thousand six hundred ninety five only), calculated @ Rs. 385 per square ....
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....he learned Counsel for the Appellants Contended that: I. Section 23 of the Land Acquisition Act does not allow for a discrimination between Pushtaini and Gair-pushtaini landowners in determination of compensation under the Land Acquisition Act. I. In light of the law laid down by this Court in the Nagpur Improvement Trust Case (Supra), no distinction between the abovementioned two sets of classes of landowners can be made on the basis of the date of purchase of the land and the date of establishment of G NOIDA. The Ld. Counsel argued that all the landowners whose land was acquired should stand on the same pedestal. II. The Land of both the classes of landowners have been acquired under the same procedure, for the same public purpose and having the same market value, and hence, any difference in the rate of compensation provided to any party is highly discriminatory and is violative of Article 14. III. Further, it has also been argued that merely by signing the agreement, the Appellants herein cannot be said to have waived their right to Appeal the compensation, especially since the fact that the ex-gratia payment granted to the Pushtaini landowne....
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.... I. Whether the Appellants, by signing the agreement, have waived their right to seek for revised compensation? II. 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 Constitution? III. 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 500? 23. We have heard, Shri Pradeep Kant, Learned Senior Counsel for the Appellants, Shri. Ravindra Kumar, learned Senior Counsel appearing for the Greater Noida and Shri Ravindra Kumar Raizada, learned Counsel for the State of U.P./A.A.G., at great length. 24. At the outset, we would like to clarify that in the present appeals, we are only concerned with the legality and validity of action of G. Noida paying an enhanced compensation to the landholders by carving out an artif....
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....agreement entered into by the Appellants. Similar agreements were also entered into with the Authority by such identically situated landholders who have been granted additional compensation subsequent to the agreement by carving out a distinction on the basis of period of residence/occupation of the land which was acquired by creating an artificial classification of 'Pushtaini' and 'Gair-Pushtaini' landholders. 28. Furthermore, since the issue of additional compensation by making an artificial classification of 'pushtaini' and 'Gair-pushtaini' was not in existence at the time of the agreement, there was no occasion to challenge the same. 29. Further, specifically in the context of the grant of ex-gratia payment, it is to be noted that the said payment granted to Pushtaini landowners through a separate notification, was assessed, and given, after the agreement was signed by both, Pushtaini and Gair-pushtaini Landowners. The Appellants herein, under those circumstances, could not have challenged the agreement vis a vis the ex-gratia payment on grounds of violation of Article 14, when no such violation existed at the time of the agreement. No man ....
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....incorporates these maxims. Acquisition of private property can be made by legislation, exercising powers Under Articles 245 and 246 of the Constitution. Subject "acquisition and requisition of property for the purposes of the Union" was mentioned as Entry No. 33 of List-I and "acquisition and requisition of property except for the purposes of the Union" was mentioned as Entry No. 36 of List-II of the Seventh Schedule of Constitution. By Section 26 of Constitution (Seventh Amendment) Act, 1956, Entry No. 33 of List-I and Entry No. 36 of List-II were deleted and Entry No. 42 of List-III of Seventh Schedule of the Constitution was amended as "acquisition and requisition of property". Acquisition of private parties can be made by exercise of executive power Under Article 298 of Constitution. Union of India and State Governments can acquire private property, exercising legislative or executive powers. While dealing with an issue pertaining to classification and its reasonability, we must also keep in mind that the governance is not a simple thing. It encounters and deals with the problems which come from persons in an infinite variety of relations. Classification is the recogni....
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....them irrespective of differences of circumstances [Charanjit Lal Chowdhury v. Union of India, 1950 SCR 869: 1950 SCC 833]. It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed [Old Dearborn Distributing Co. v. Seagram Distillers Corporation, 81 L Ed 109 : 299 US 183 (1936) 1936 SCC OnLine US SC 145]. Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards the subject matter of the legislation their position is substantially the same. This brings in the question of classification. As there is no infringement of the equal protection rule, if the law deals alike with all of a certain class, the legislature has the undoubted right of classifying persons and placing those whose conditions are substantially similar under the same Rule of law, while applying different Rules to persons differently situated. It is said that the entire problem under the equal protection Clause is one of classification or of drawing lines [Dowling: Cases on Constitutional Law, 4th Edn. 1139.]. In making the classification the legislature can....
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....ame reason I cannot agree with the learned Attorney General that in cases like these, we should enquire as to what was the dominant intention of the legislature in enacting the law and that the operation of Article 14 would be excluded if it is proved that the legislature had no intention to discriminate, though discrimination was the necessary consequence of the Act. When discrimination is alleged against officials in carrying out the law, a question of intention may be material in ascertaining whether the officer acted mala fide or not [Sunday Lake Iron Co. v. Wakefield, 62 L Ed 1154: 247 US 350 (1918) : 1918 SCC OnLine US SC 148]; but no question of intention can arise when discrimination follows or arises on the express terms of the law itself. 35. In the case of Rustom Cavasjee Cooper (Banks Nationalisation) v. Union of India (1970) 1 SCC 248, R.C. Cooper, who was the director of Central Bank of India filed a petition against the Union of India challenging the provisions of The Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969. The Court while deciding this case held that it cannot overlook the violation of fundamental rights of the citizens on me....
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....uals. Though the legislature is fully empowered to enact laws applicable to a particular class, as in the case at hand in which Section 377 applies to citizens who indulge in carnal intercourse, yet the classification, including the one made Under Section 377 Indian Penal Code, has to satisfy the twin conditions to the effect that the classification must be founded on an intelligible differentia and the said differentia must have a rational nexus with the object sought to be achieved by the provision, that is, Section 377 Indian Penal Code. Section 377 has consigned a group of citizens to the margins. It has been destructive of their identities. By imposing the sanctions of the law on consenting adults involved in a sexual relationship, it has lent the authority of the State to perpetuate social stereotypes and encourage discrimination. Gays, lesbians, bisexuals and transgenders have been relegated to the anguish of closeted identities. Sexual orientation has become a target for exploitation, if not blackmail, in a networked and digital age. The impact of Section 377 has travelled far beyond the punishment of an offence. It has been destructive of an identity which is cruc....
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....Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 223, the King's Bench Division was tasked with the question of under what circumstances can the Court interfere in cases of administrative law making. While dealing with this, the Court held that interference in administrative decisions was permissible, only if (i) the order was contrary to law (ii) or relevant factors were not considered, or (iii) irrelevant factors were considered or, (iv) or the decision was such that no other authority under similar circumstances would have come to this conclusion. The relevant paragraph of the judgment are reproduced herein: In the result, this appeal must be dismissed. I do not wish to repeat myself but I will summarize once again the principle applicable. The Court is entitled to investigate the action of the local authority with a view to seeing whether they have taken into account matters which they ought not to take into account, or, conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the local authority, it may be still possible to say that, althou....
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....sifying the landowners as Pushtaini and Gair-pushtaini on the basis of a cut-off date, have taken into account an irrelevant factor. The cut-off date by itself, without any context of the landowners on ground, is not indicative of who the most adversely affected landowners are. By not complying with these three factors while making the classification, this Court must strike down such a classification. 46. While the Wednesbury principle has been used as a guiding principle of interpretation, the Indian Court have now adopted a much more rigorous test, i.e., is proportionality test, to see whether an administrative action can survive the rigours of Article 14. PROPORTIONALITY TEST 47. In the case of Om Kumar (Supra), this Court held that the administrative measure must not be more drastic than is necessary for attaining the desired result. This was the first formal introduction of the Proportionality test to Indian Jurisprudence, however the Court pointed out that the proportionality test has been used by the Indian Courts even before this judgment. The relevant paragraphs from the said report reads as under: 27. The principle originated in Prussia in the nineteenth....
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.... from the disability similar to the one experienced by English Courts for declaring as unconstitutional legislation on the principle of proportionality or reading them in a manner consistent with the charter of rights. Ever since 1950, the principle of "proportionality" has indeed been applied vigorously to legislative (and administrative) action in India. While dealing with the validity of legislation infringing fundamental freedoms enumerated in Article 19(1) of the Constitution of India -- such as freedom of speech and expression, freedom to assemble peaceably, freedom to form associations and unions, freedom to move freely throughout the territory of India, freedom to reside and settle in any part of India, -- this Court has occasion to consider whether the restrictions imposed by legislation were disproportionate to the situation and were not the least restrictive of the choices. The burden of proof to show that the restriction was reasonable lay on the State. "Reasonable restrictions" Under Articles 19(2) to (6) could be imposed on these freedoms only by legislation and Courts had occasion throughout to consider the proportionality of the restrictions. In numerous judgments o....
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....A.P. v. McDowell and Co. [(1996) 3 SCC 709]. 33. In Australia and Canada, the principle of proportionality has been applied to test the validity of statutes [see Cunliffe v. Commonwealth [(1994) 58 Aust LJ 791] Aust LJ (at 827, 839) (799, 810, 821)]. In R. v. Oakes [(1986) 26 DLR (4th) 200] Dickson, C.J. of the Canadian Supreme Court has observed that there are three important components of the proportionality test. First, the measures adopted must be carefully designed to achieve the objective in question. They must not be arbitrary, unfair or based on irrational considerations. In short, they must be rationally connected to the objective. Secondly, the means, must not only be rationally connected to the objective in the first sense, but should impair as little as possible the right to freedom in question. Thirdly, there must be "proportionality" between the effects of the measures and the objective. See also Ross v. Brunswick School Dishut No. 15 [(1996) 1 SCR 825] (SCR at p. 872) referring to proportionality. English Courts had no occasion to apply this principle to legislation. The aggrieved parties had to go to the European Court at Strasbourg for a declaration. ....
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....rinciple into a four-pronged test, the Bench held: ...The action must be sanctioned by law; The proposed action must be necessary in a democratic society for a legitimate aim; The extent of such interference must be proportionate to the need for such interference; There must be procedural guarantees against abuse of such interference. 50. In the case of Gujrat Mazdoor Sabha (Supra) during covid-19, the Central Government had passed a notification severely affecting the pay of unskilled workers, on the grounds of national emergency. This notification was challenged on grounds of violation of Article 14, specifically in violation of the principle of proportionality. The Court held that, in order to determine the validity of state action that could infringe on fundamental rights, it must pass the following conditions, namely, (i) The interfering with the fundamental rights must have a state purpose, (ii) the said rights infringing measure must be based on a rational nexus between the interference and the state aim, (iii) the measures bust be necessary to achieve the state aim, (iv) the restrictions must be necessary to protect the legitimate obje....
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....ndemic, if the factories producing medical equipment such as life-saving drugs, personal protective equipment or sanitisers, would be exempted by way of Section 65(2), while justly compensating the workers for supplying their valuable labour in a time of urgent need. However, a blanket notification of exemption to all factories, irrespective of the manufactured product, while denying overtime to the workers, is indicative of the intention to capitalize on the pandemic to force an already worn down class of society, into the chains of servitude. 52. We have already in the discussion for the reasonable classification test held that the interfering law, i.e. the impugned notification that creates the classification, does not have a rational nexus to the object sought to be achieved, and thus, violates the first two prongs of the proportionality test. 53. We then come to the third and fourth prong of the proportionality test, i.e. whether the classification created by the Authority was a necessity to achieve the state aim of compensating those landowners that are either direct residents of the land or the land exists as their primary source of income and whether such measure was ....
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....ion for the same. This circumstance alone besides being discriminatory pits the said classification against Section 23 of the Act, causing an insubordination to the 1894 Act. Such a mischief, if allowed to exist, would not only nullify the purpose of the Act, but also violate the third and fourth principle of the proportionality test, and hence is liable to be struck down. 56. Further, it is also important to note that the classification, even if allowed to exist, does not come with any safeguards against its potential abuse. As mentioned above, the said notification by way of its classification creates disastrous mischief, and the notification does nothing to remedy such potential abuse. No guidelines for the said classification exist, nor are there any bars placed. If such classification is left unchecked, it may lead to bad precedence, and disastrous ramifications in the future. This lack of substantive guidelines also violates the fifth prong of the proportionality test. 57. On the basis of the abovementioned discussions emerging from the settled principles, Issue No. 2 is answered in affirmative and in favour of the Appellants herein, and the impugned classification is l....
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....te. Why is this sort of classification not sustainable? Because the object being to compulsorily acquire for a public purpose, the object is equally achieved whether the land belongs to one type of owner or another type. 59. In our opinion, a bare reading of the abovementioned judgment makes it amply clear that the classification made by the GNOIDA authority for the purposes of awarding differential compensation is bad in law, and it is precisely this kind of classification that has been barred. When the purpose of the acquisition of the land is for the benefit of the public at large, then the nature of the owner of the said land is inconsequential to the purpose. If such a classification on the basis of the nature of owner is allowed, then on the same grounds, there might be a possibility of future classifications where powerholding members of the society may get away with a larger compensation, and the marginalized may get lesser compensation. This is precisely what this Court in the abovementioned judgment predicted, and to preempt such arbitrary classification, clarified the position in law. 60. The Land Acquisition Act does not distinguish between classes of owners, and ....