Land Acquisition Act, 1894– U.P. Land Acquisition (determination of compensation and declaration of award by agreement) Rules, 1997 – Payment of compensation – Classification of landholders as Pushtaini or Gair-Pushtaini – Impermissibility of – Held: Classification made by the GNOIDA authority for the purposes of awarding differential compensation is bad in law – Land Acquisition Act does not distinguish between classes of owners, and uniformly provides compensation to all class of landowners – Classification made between Pushtaini landowners and Gair-pushtaini landowners is violative of the law laid down in the Nagpur Trust case and Article 14 – Said classification made by the executive actions is bad in law, and is liable to be set aside – However, since the mischief lies only within the classification, it can be severed, and the remaining part of the executive actions that set out to grant compensation for the purpose of rehabilitation remains valid in law – Impugned judgment passed by the Full Bench of the High Court set aside – Appellants entitled to the reliefs claimed in the Writ Petition filed before the High Court – Constitution of India – Art.14. Constitution of India – Art.14 – Reasonable Classification Test, Wednesbury Principle and Proportionality Test – Discussed – Administrative Law.
Allowing the appeals, the Court
HELD: 1. Whether the Appellants are bound by the compensation as per the agreement under the Land Acquisition rules, and have waived off their right to seek enhanced compensation?
The Respondent Authority argued that since the agreement was consented to, no challenge could exist in the Court. This argument in the facts of the case, has been raised only to be rejected. The issue involved in adjudication is not in respect of an 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. Furthermore, since the issue of additional compensation by making an artificial classification of ‘pushtaini’ and ‘Gair-pushtani’ was not in existence at the time of the agreement, there was no occasion to challenge the same. Further, specifically in the context of the grant of exgratia 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 exgratia payment on grounds of violation of Article 14, when no such violation existed at the time of the agreement. No man can be expected to predict a future violation of their rights and file a pre-emptive appeal.The Appellants, because of their signing of the agreement, have not forfeited their right to seek revised compensation, because ,the cause of action accrued to them much after entering into the agreement. The issue no. 1 is answered accordingly in the negative and in favour of the Appellants.[Paras 27-30][448-D-H; 449-A-B,D]
2.1 Whether the classification made by and executive fiat between Pushtaini Landowners and Gair-pushtaini Landowners for payment of compensation at different rates is liable to be struck down as violative of Article 14 of the Constitution?
REASONABLE CLASSIFICATION TEST
For any classification to survive the test of Article 14, the classification must be based on intelligible differentia, and it must have a rational nexus to the object sought to be achieved by the law. The object sought to be achieved must also be lawful, and if the object of the law itself is found to be discriminatory, then such discrimination must be struck down. [Para 33][451-C-D]
2.2 While prima facie, the classification and the object sought to be achieved through the said classification seems reasonable, however, the devil lies in the details. The justification given by the GNOIDA Authority, and the Full-bench of the High Court assumes that only Pushtaini landowners permanently reside in the subject land or that the subject land is the primary source of income only for Pushtaini landowners, and this assumption has been backed by no empirical data produced by the authority. While the classification made by Greater Noida has been based on the object of giving fair compensation, however, such a laudable object of the classification would stand breached by the effects of such a classification, creating a dissonance between the object and its effect. Many Gair-pushtaini landholders, whose main area of residence or their main source of income is also the subject land, would be subject to great discrimination and injustice, if the same compensation that has been granted to the pushtaini landholders is not extended to them. [Paras 38, 39][455-F-H; 456-A-B]
2.3 WEDNESBURY PRINCIPLE
The classification made by GNOIDA does not find its footing in the Land Acquisition Act, or the UP-Land Acquisition Rules, and hence is contrary to law. The said classification also suffers from not taking into account relevant considerations. The Authority, without taking into account any empirical data, or calculating any possibility of Gair-pushtaini landowners being rendered landless or without a primary source of income, made the impugned classification. These relevant factors, by not being taken into account, can and would cause great injustice to Gairpushtaini landowners. Further, GNOIDA, by arbitrarily classifying 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. [Paras 44, 45][457-F-G; 458-A-B]
2.4 PROPORTIONALITY TEST
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. Coming 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
46 of the land or the land exists as their primary source of income and whether such measure was proportional to the object sought to be achieved. For this, it is pertinent to refer to Section 23 of the Act, which provides for matters to be taken into account while determining the compensation. A bare perusal of Section 23 would show that, the grounds for classification as purported by the GNOIDA authority, have already been covered by Section 23 of the Act. The fifth point of the said Section squarely covers the requirement of compensating for rehabilitation of the affected landowners. In the presence of an already existing provision in the act, the classification created by the GNOIDA authority, must exist in furtherance of the said Section, and not in contrast of. [Paras 52-54][465-B-D; 466-C-D]
2.5 The classification if allowed to exist, can lead to several Gair-pushtaini landowners who may also need to be rehabilitated, cannot rehabilitate themselves without compensation for the same. This circumstance alone besides being discriminatroy 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. 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. The impugned classification is liable to be struck down as violative of Article 14 of the Constitution of India. [Paras 55-57][466-D-H] State Of West Bengal Vs. Anwar Ali Sarkar (1952) AIR
75 : [1952] SCR 284; Rustom Cavasjee Cooper (Banks Nationalisation) v. Union of India (1970) 1 SCC 248 : [1970] 3 SCR 530; Navtej Singh Johar & Ors. Vs. Union of India Thr. Secretary, Ministry of Law and Justice (2018) 10 SCC 1 : [2018] 7 SCR 379; K. S. Puttaswamy & Anr. Vs. Union of India & Ors (2017) 10 SCC 1 : [2017] 10 SCR 569 – followed.
Gujarat Mazdoor Sabha & Anr. Vs. State of Gujarat (2020) 10 SCC 459 – relied on.
Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 223 – referred to.
3. 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 another vs. Vithal Rao and others (1973) 1 SCC 500?
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. The Land Acquisition Act does not distinguish between classes of owners, and uniformly provides compensation to all class of landowners. The classification made between Pushtaini landowners and Gair-pushtaini landowners, on the basis of the reasoning mentioned above, is violative of the law laid down in the Nagpur Trust case and Article 14 of the Constitution. [Para 59, 60][468-B-F]
Nagpur Improvement Trust and Another Vs. Vithal Rao and Ors. (1973) 1 SCC 500 : [1973] 3 SCR 39 – relied on.
4.1 The classification made by both the executive actions is bad in law, and is liable to be set aside. The Land Acquisition Act does not envisage any differential compensation on the basis of such classification, and hence, this Court must infer the compensation to be provided by the executive actions within the confines of Section 23 of the Act. Section 23 of the Land Acquisition Act states out the grounds for granting compensation in cases of acquisition of land under the Act. One such reason for the grant of compensation is rehabilitation, and it is this need for granting compensation for rehabilitation under the Act that is echoed by the impugned notification. A bare reading of both the executive actions in consonance with the Act would show that the need for giving compensation for rehabilitation is valid in law and is backed by the parent statute. The mischief then, is only limited to the arbitrary classification made by such actions. In such a case, since the mischief lies only within the classification, it can be severed, and the remaining part of the executive actions that sets out to grant compensation for the purpose of rehabilitation remains valid in law. Once the classification is removed, and the executive actions are read in consonance with the parent act, it would be seen that since the Act, and now even the executive actions do not discriminate in terms of compensation, the ex gratia payment and the increased base amount, as enunciated by the executive actions, must be given to all landowners in the subject area. [Paras 62, 63][468-H; 469A-C]
4.2 Further, in cases of administrative action, even if the classification has a rational nexus to the objective of the notification, the classification must also be legitimized by the parent statute. If the parent statute does not allow for a classification, then, even if the classification vis-à-vis the notification is able to pass the tests of Article 14, it would still be liable to struck down if the parent statute does not allow for the same. The impugned judgment passed by the Full Bench of the High Court is not liable to be sustained and stands set aside. As a consequence, the Writ Petition filed by the appellants before the High Court stands allowed and the appellants are held entitled to the reliefs claimed in the said Writ Petition. [Paras 65, 67][469F-H; 470-A-B] Om Kumar & Ors. Vs. Union Of India (2001) 2 SCC
386 : [2000] 4 Suppl. SCR 693; Smt. Madhuri
Srivasatava Vs. State of U.P. & Ors. (2016) 6 SCC OnLine AII 2832; Gajraj Vs. State of U.P (2011) SCC OnLine AII 1711; Radheyshyam (Dead) through L.Rs & Ors. Vs. State Of UP & Ors. (2011) 5 SCC 553 : [2011] 8 SCR 359; Greater Noida Industrial
Development Authority Vs. Devendra Kumar & Ors. (2011) 12 SCC 375; Savitri Devi Vs. State of U.P. & Ors. (2015) 7 SCC 21 : [2015] 7 SCR 512 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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