OM PARKASH AND ANOTHER versus STATE OF U.P. AND ORS.

J .-This appeal by certificate against the judgment, dated March 19, 1968 of the Allahabad High Court raises questions about the constitutionality of certain modifications made in the Indian Land Acquisition Act, 1894 by the U. P. Nagar Mahapalika Adhini· yam, 1959 and the effect of the repeal of the U.P. Town Improvement Act, 1919 on the Mumfordganj Housing Scheme which had been notified under the repealed Act.

p. 732, margin G

Under s. 42 of the U. P. Town Improvement Act (Act 8 of 1919), scheme known as Mumfordganj Housing Scheme was published on I.

pp. 732–733, margin H

behalf of the Improvement Trust, Allahabad in the U. P. Government Gazette, dated June 17, 1944. Appellants' property known as Hanu· man Bagh, bearing Municipal No. 25/13, Katra Road, Allilhabad, was also inc1uded in lne area covered by this scheme.

p. 733

On September 6, 1955, notice under s. 9 of the Land Acquisition ll Act, 1894, was issued by the Collector to the appellants. Even before the appellants- had filed their claim, and before the Collector could make hill award under s. 11 of the Land Acquisition Act, 1894, U.P. Town Improvement Trust Act (No. 8 of.1918) was repealed and replaced· by U.P. Nagar Mahapalika Adhiniyam, 1959 (for short, the Adhini· yam) which came into force on February l, 1960. As a result of this

p. 733

change in law, the Town Improvement Trust was superseded by the c Nagar Mahapalika, Allahabad; which took further steps for implementation of the scheme in accordance with the provisions of the Adhiniyam. . ' Appellants filed their claim to compensation before the Collector who gave his award on April 13, 196L P01session of the disputed property. was taken and delivered by the Collector to the Mahapalika on November 16, 1961.

p. 733

Appellants did not accept the award, and on, their application . a reference under s.18 of the Land Acquisition Act, was made by the Collector to the Cour.t on January 3, 1962. The Court directed t)le appellants to deposit' Rs. 1500 I· as. security for costs. The time for

p. 733

depo&iting security was repeatedly extended and the appellants deposi·· ted the security in instalments. Subsequently, the Court returned the , .reference to the Collector and refunded the security, for the reason that the reference was addressed to the District Judge and not to the Tribunal. The. Collector, again made the reference to the Tribunal, which, purporting to act under 1.3 72, Proviso, asked the appellants to deposit Rs. 900/ • as security for costs. ·

p. 733

· Durina the pendency of tlie reference in the District Court, the ap· pellants filed writ petition No. 4473 of 1964 under Article 226 of 'the. Constitution in the Hi$h Court of Allahabad, challenging. the consti-

p. 733, margin E

tutionality of the provisions of ss.372, 376 and Schedule II of the Adhi· , niyam whereby s. 23 of the Land Acquisition Act, 1894 had been modified, on !he ground that .those mooifications were violative of Article 14 o( the Constitution. They also assailed the validity of the scheme on the ground that it had not been completed within the time-limit specified in a.365(4) of the Adhiniyam. The writ petition was opposed by the State .Government and the Mahapalika (Respondents 1 and 2 ~spectively ) ..

p. 733, margin E

. The Division Bench of the High Court negatived all the contentions canvassed before it and dismissed the petition with costs. The' Fench, however; granted a certificate of fitness of appeal to this Court under Article 133(1)(a) of the Constitution. That is how this appeal has come before us. Section 3 7 6 of the Adhiniyam provides :

pp. 733–734, margin E

"For the purpose of the acquisition of land for tTie"'.Maha· ,palika under the Land. Acquisition Act, 1894-whether under this Chapter or any other Chapter of this Ac~ (a) the said Act shall be subject to the modifications speci-

p. 734, margin A

fied in the Schedule to this Act; (b) "

p. 734, margin B

The modifications of the Land Acquisition Act, the validity of which is in question are :

p. 734, margin B

(i) The Proviso added (vide para 10 of Schedule II) to s.23 (2) of the Land Acquisition Act, namely :

p. 734, margin C

Provided that this sub-section shall not apply to any land acquired under Chapter XI.V of the Uttar Pradesh Nagar Mahapalika Adhiniyam, 1959, except-

p. 734, margin C

(a) land acquired under sub-section (4) of s. 348 of that Adhiniyam, and

p. 734, margin C

(b) buildings in the actual occupation of the owner or occupied free of rent by a relative of the owner, and land appurtenant thereto, and

p. 734, margin C

(c) gardens not let to tenants but used by the owners as a place of resort."

p. 734, margin E

The effe>t of the addition of this Proviso to s. 23(2) of the Land Acquisition Act is that 15% solatium over the value assessed which is awarded when land is compulsorily acquired by the Government under the Land Acquisition Act, will not be admissible if land is so acquired for the purpose of a sclieme under Chapter XIV of the Adhiniyam.

p. 734, margin E

(ii) The new clause added (vide para 10(3) of Schedule II)

p. 734, margin F

the end of s. 23. Land Acquisition Act, namely :- "(2) for the purpose of clause first of sub-section (1) of this

p. 734, margin F

section- (a) the market-value of the land shall be the market value according to the use to wliich the land was put at, the date with reference to which the market-value is to

p. 734, margin F

be determined under that clause ........ .

p. 734, margin G

(b) to (g)

p. 734, margin G

The effect of this modification is that the potential value of the land e.g. as a building site, is to be ignored.

p. 734, margin H

A (ill) s. 3 72 ( 1) provides that "the Tribuul constituted undcc the A,dhiniyam shall perform the functions of the Court with reference to all acquisition of land for the Maha~· lika for the ~ of this Act under the Land acqws1-

p. 735

uon Act, 189-4 .

p. 735

Tite validity of the Proviso to this sub-section is in question. The ll Proviso reads :

p. 735

"Provided that no such claim shall be entertained by the Trii.unal, unless the claimant has depoeited in Court such sum, aot exceedina Rs. 7,000/· as the Tribunal may fix, as security, for the costs, which in the event of the claimants' failure .. y be awarded aaafilst hi•." ·

p. 735

Mr. Mehta, learned Counsel for the appellant, coptends that the modifteat.ion8 (i), (ii) and (iii) are covered and hit by the ratio of thio Court'8 decision in Natpur Improvement Tru.rt and 111101/ter v. Vlthol Rao and ors.(')

p. 735

On. the other hand, M/s. Dikshit and Ganpule, lenrned Counsel

p. 735

appearina for the State and the Mahapalika, respect.ively have tried to • distinguish Nagpur Improvement T1U$t's case on the ground that under the Naapur Improvement Trust Act, compulsory· acquisition of land for all purposes of the Trusi bad to be made by tho GoVenunent, whereas under the Adainiyam the Mahapalika has plenary powers to acquire , land for the piirpose of a scheme under Chapter XIV of the Adbiniyam.

p. 735

Stress has been laid on the fact that no prior permission of the State E Government is required for the issue of notificat.ions under s. 357 and 363 of the Adhiniyam for compulsory acquisition of land for a ~heme costing less than ten lakhs farmed under Cliaprer 'XIV of the Adhiniyam. FW'lher acquisition proceedings-it is argued-for determina· tion of compensation aro taken by the Collector, only as an agent ot the Mahapalika because after making the award, the Collector is bound under s. 17-A (added by para 6 in Schedule II) to the Land Acquisition Act) to make over the land acquired to the Mabapalika. It is further conceded that the modifications to the Land Acquisition Act in question in the Nagpur lmprovtment Trust case (supra) were identical with the modifications (i) and (ii) above, made by s. 376 read with

p. 735

Schedule II of the Adhiniyam. G Thus the first question for decision is : who is the acquiring authority if the land is compulsorily acquired for the purpose of a Scheme under Chapter XIV or for any other purpose of the Mahapalika under s. 130 of the .Adhiniyam? The answer must be obviously be that in either case it is the State Government who acquires the land. The mere fact that where the land is to be conl.pulsorily acquired for a Scheme costing less

p. 735

thnn Rupees 10/- lakhs under Chapter XIV, no prior permission of the H State is required for issuing the necessary notifications under ss. 35'7 and 353 of the Adhiniyam (which take the place of notifications under '" 4 and 6 of the Land Acquisition Act), does not mean that in such

p. 735

(I) ft973J sec soo. 7-L 748SuP.Cl/74 CllCi, acquiriDa authority is the Mahapalika lllld not the State Gov· ernmcnt. The. matter has been put beyond doubt by para 6 of Schedule U, wlllch ft&ds :

pp. 735–736

"6. Transfer of Land to Mahapalika-After section 17 of the Land Acquisition Act, the following shall be deemed to be inserted, namely :

p. 736, margin A

17-A. In every case referred to in sectoin 16 or section · 17, the Collector shall, upon payment of the cost of acquisition, made over cbarae of the. land to the Mukbaya Nagar Adbikari; and the land shall tb«eupon vest in the MabaJ>Blika. subject to the liability of the Mahapalika to pay any lurtber COltl which may be mcurred on account of its acqu1Sition."

p. 736, margin B

The caption of this para read along with its contents sbowa that land bu first to be acquired by the Collector for the Government tlra•after it is transfe"ed by the Government to the Mabapalika, on payment of its coats. In this connection It is Important to recall pnmaiona of s. 16 of the Land A!:'l.uisition Act, 1894, which has m any way been modilied by the Adbinlya.n. According tO s. 16 "wjtcn tho Collector bas made bis award under s. 11, be may tako posseuion of the land which shall thereupon Vest absolutely In the GOvernttie11t froe from all encumbrances." Thus,. it is clear beyond all manner doubt that whenever land is to be compulsorily acquired for the Mahapallk.-be it for a purpose of the Scheme under ChapterXIV or any other purpose under s. 130-tbe acquiring authority is the GOvernmcat. There is no material difference between the Impugned provisions of the Adbiniyam and those which were in question before this Court Na1pMT Improvement Trust's case. (supra). The ratio of the aforesaid case therefore will apply fully to the impugned provisions mentioned (i), (ii) aad (Iii). ·

p. 736, margin C

Thero can be no dispute that the Government can acquire foe a public purpose including that of the Mabapalika or other body, either under the unmodified Land Acquisition Act, 1894, under that Act· as modified by the Adhiniyam. If it chooses the coune, then the land-owners concerned will be entitled to better. pensation, including 1S% solatium; the potential value of the land nor will there be anJh!pcdiJnent or hurdle-such as that enacted s.372(1) of the A · 'yam-in ~ way of such land-owners, satisfied by the ·Collector's award, to approach the Court under of that Act. If the Government, for the same purpose, resorts to Land Acquisition Act as modified by tho Adhinlyam, the land-<>wner(s) coni:erned will sufier from all the disabilities or restrictions envisaged by tho modifications. In this way, the impugned legislation enables Government to discriminate in the matter of acquiring land betweeri similarly situated land-owners.

p. 736, margin E

The impugned modifications do not satisfy the well known tests reasonable classification which is permissible for the purpose of legislation. It is not founded on arty mtelligible differentia, n6r has this renti11 rational nexus With the object sought to be achieved, namely, A compulsory BC4uisition of land for a public purpo9C. It is not necessary to dilate further on this point as this matter stands concluded by this Court's decision in Nagpur Improvement Trust's case by the ratio of which we are bound. It will be sufficient to close the discussion by extracting here what Sikri C.J., speaking for the Court in Nagpur Improvement Trust's case said:

pp. 736–737, margin H

"Can the Legislature say that for a hospital land will be acquired at 50% of the market value, for a school at 60% of the value and for a Gonmment building at 70% of the market value ? All three objects are public purposes and. as far as the owner is concerned it does not matter to him whe· ther 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 diJferent treatment to this individual right. It seems to us that ordinarily a classification based on the public purpose is not permissible under Article 1'4 for the purpose of determining compensation. The position is difierent when the owner of the land himself is the recipient of benefits from an improvement scheme, and tho

p. 737

benefit to him is taken into consideration in fixing compemation. Can classifications be made on the basis of authority acquiring the land ? In other words can differe11t principles ol compensation be laid if the land is BC4uired for or by an Im· provement Trust or Municipal Corporation or the Government? It seems to us that the an.swer is in the negative because as far as the owner is concerned it does not matter

p. 737

to him whether the land is acquired by one authority or the other.

p. 737, margin D

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 could enable the State to give one owner different treatment from another equally situated the owner who is discriminated against, can claim the protection of Article 14." ·

p. 737, margin E

It may, however, be noted that the impugned modification (iii) that is, the Proviso added to s. 23(2) was deleted by the U.P. Amendment A.ct 23 of 196! which came into force on September 7, 1961.

p. 737, margin E

Mr. Mehta contends that since the Collector'~ award, in the present case, was made when this Proviso was in 'i~rce; the appellants

p. 737, margin E

ivill continue to suffer under the liability that bl#:! arisen under the G Proviso despite its deletion, even in proceedings before the Tribunal.

p. 737, margin E

On the other hand, learned Counsel for the respondents maintain that the effect of the repeal of this Proviso is to obliterate it alto' gether as if it never kad existed.

p. 737, margin E

To us, the appremension expressed by Mr. Mehta appears to-be

p. 737, margin E

unfounded. H The Proviso in question created only a disability. The effect of the repeal is to remove that disability or restriction on the landowners' right to receive 15 per cent solatium under s. 23(2) of the Land

p. 737, margin E

Acquisition Act. Further, the assessment of compensation is not a -t matter past and closed. It is still pendins in reference before the Tribunal: The repeal is final and conditional. There is nothing in the repealing Act which saves such pending references from its operation. The Tribunal, therefore, will have to· take cognizance of the repeal and for the purpose of disposing of the reference, treat the Proviso as having never existed. Thus, the validity or otherwise of modification (i) has become, more or less, academic.

pp. 737–738, margin E

The last. contention of Mr. Mehta is that by virtue of s. 577 of th" Adhiniyam, the provisions of s. 365(4) which ~eremptorily requires· a Scheme to be completed up to the date of the award, within a period of five years, had become applicable to the Mumfordganj Hcusing Scheme, also. Since this Scheme-proceeds the argumenthas not been .completed within the requisite time-limit it has come to an end by 9pcration of law, with consequent release of the appcl- Ja11t>' proper!)'.

p. 738, margin A

;,rr. Dikshit contends that s. 365( 4) cannot apply to this Scheme, b~c;1use. the U.P. Town Improvement Act, 1919 under which it was initiated had· no such provision. The point pressed into argument is that so tong as this Scheme is not superseded by any notification or orucr·undcr clau.se (a) to s. 577, it will continue to be in force without any time lirilit.

p. 738, margin C

Mr_ Ganpplc, appearing· for the Mahapalika, has, in the alternative chosen to steer a middle course. His stand is that even if s. 365(4), applies to this Scheme, then also the time limit of five years will start running from the date of the ccmmcncemcnt of the Adhi- , ni)'am i.e. February 1, 1960.

p. 738, margin D

In order to appreciate the contentions canvassed, it will be protit"ble to set out the material parts of s. 365 ( 4) and s. 577. as they stood at the relevant time hereunder :

p. 738, margin D

"365( !)

p. 738, margin D

(2) (3);;; .... " .. ( 4 ).'~I (!lcquisition of land and interest in land for an~·· ilnprovement scheme authorised under this Ch pter shall be completed at least upto the stage of aking of awards w;thin a period of five years froth the date of the notification of the .scheme under section 363 and anv land in respect of \Vhich the acquisition is nOt so coinpk:teU and the owner and occupier thereof shall cease to be

p. 738, margin F

subject to any liabilities under this Chapter :

p. 738, margin G

Provided that the State Government may in any particular case before the expiry of such period and for rc.asons to b.: recorded in v;riting cxtcn,~ tllc !'Criod by one year . . ,~ Section 577 :

pp. 738–739, margin H

"Continuation of appointments, taxes, buJgct, estimate, assessment etc.-Savc as expressly provided by the provisions of this Chapter or by a notification issued under sec~ tion 579- (a) any appolntment, delegation, notification, notice, tax, order, direction, scheme, licence, permission. registration, rule, bye-law, regulation, forni madr, issued, imposed or granted under ...... the U.P. Town Improvement Act, _1919 . , ....•... is so far as it is not inconsistent with the provisions of this Act continue in force until it is superseded by any appointment, delegation, notification, noti«~ tax, order, direction, schc1nc, licence, permission. regist~ ration, rule, bye-law, or form made, issued, imposed or granted under this Act or any other law as afore-

p. 739

said, as the case 1nny be; (b) any notice or notification or s:inction of any improvement scheme for the area included in the City issued under the U.P. Town Improvement Act, 1919 .... . . . . shall be deemed to have been issued under this Act, and all further proceedings in furtherance of

p. 739, margin C

such scheme may be taken ~ccordingly; (c) all proceedings for acquisition of land whether ia pursuance of any scheme of improvement or otherwise initiated under the U.P. Town .Improvement Act, 1919 ............ may be continued as if they

p. 739, margin D

had been initiated under this Act; (d) to (g)

p. 739, margin E

... . .

p. 739, margin E

The interpretation suggested by Mr. Dikshit is possible, only if we read clause (a) of s. 577 in isolation and do not give full effect to the words "in so far as it is not inconsistent with the provisions of this Act" occurring in that clause. Such an interpre~ation. we think, with respect, will lead to manifest contradiction and absurdity. It will mean that while fresh Schemes initiated under the Adhiniyam must be completed with speed within the prescribed time-limit, far older schemes commenced under the repealed Act,-wbere the need for expeditious disposal is the greatest-can continue indefinitely for .any length of time. Thi~ whimsical construction can be avoided if we read clause (a) along with clauses (b) and (c) of the s"me s,,;:tion, and give it r. reasonable meaning with the aid of the legal fictic)1 int· plicit in those clauses. Thus construed, the Scheme in the instJ!lt case, though notified under s. 42 of the repealed Act in 1944. \l'onld. in view of the deeming provision in clause (b) of s. 577, be d•-:mcd to have been notified under' s. 363 of tl1e Adhiniyam, on the date on which the Adhiniyam came . .into force i.e. on February 1, 1960. The five-year period specified in s. 365 ( 4) therefore, will be deem~d to have commenced from February J, 1960. The Collector had made his award on April 13, 1961, much within the time-limit prescribed by s. 365(4).

pp. 739–740, margin F

Jn the above view of the matter, we negative the contention of Mr. Mehta.

p. 740, margin A

For the foregoing reasons, we hold that the impu~11cd modifica· lions (i), .(ii) and (iii) suffer from the vice of discrimination and a' such, contravene the guarantee of equal protection of law~ enshrined in Article 14 of the Constitution.

p. 740, margin A

Jn the result, we partly allow this appeal and quash the impugned modifications of the Land Acquisition Act, 1894. The appellant shall be entitled to proportionate costs from the respondents. The case heing very old the. Tribunal shall do well to dispose of the reference pending before it, with utmost expedition. V.P.S. Appeal partly allowed.

p. 740, margin B