PETITIONER: UDAI RAM SHARMA AND OTHERS ETC. Vs. RESPONDENT: UNION OF INDIA AND OTHERS DATE OF JUDGMENT: 07/02/1968 BENCH: MITTER, G.K. BENCH: MITTER, G.K. WANCHOO, K.N. (CJ) BACHAWAT, R.S. SHELAT, J.M. VAIDYIALINGAM, C.A. CITATION: 1968 AIR 1138 1968 SCR (3) 41 CITATOR INFO : RF 1973 SC1150 (2) RF 1974 SC2077 (25) RF 1975 SC1699 (3) RF 1975 SC2299 (46,60) ACT: Land Acquisition (Amendment and Validation) Act, 13 of 1967, ss. 2, 3, 4, 5--Validity of Act--Validation of past invalid reports under s. 5-A of Land Acquisition Act 1894 and declarations under s. 6 without removal of lacuna in substantive law whether an encroachment on judicial power by the legislature--Amendment whether violates Arts. 14 and 31(2) of Constitution of India 1950. HEADNOTE: In the State of Madhya Pradesh v. V. P. Sharma, [1966] 3 S.C.R. 557 this Court held that once a declaration under s. 6 of the Land Acquisition Act 1894 was made the notification under s. 4(1) of the Act was exhausted and there could be no successive notifications under s. 6 with respect to land in a locality specified in one notification under s. 4(1). Relying on the above judgment the present writ petitions were filed in order to challenge successive notifications under s. 6 following a single notification under s. 4(1) in respect of land belonging to them. Meanwhile in order to meet the situation created by the judgment in V. P. Sharma's case the President of India promulgated the Land Acquisition (Amendment and Validation) Ordinance (1 of 1967). The Ordinance was later followed by the Land Acquisition (Amendment and Validation) Act 1967. Section 2 of this Act purported to amend s. 5-A of the principal Act by allowing the making of more than one report in respect of land which had been notified under s. 4(1). Section 3 purported to amend s. 6 of the principal Act by empowering different declarations to be made from time to time in respect of different parcels of land covered by the same notification under s. 4(1) irrespective of whether one report or different reports had been made under s. 5-A sub-s. (2). Section 4 of the Act purported to validate all acquisitions of land made or purporting to have been made under the principal Act before the commencement of the ordinance namely January 10, 1967, notwithstanding that more than one declaration under s. 6 had been made in pursuance of the same notification under s. 4(1), and notwithstanding any judgment, decree or order of any court to the contrary. The Amending Act also laid down time limits for declarations under s. 6 of the principal Act after the notification under s 4(1), had been issued in respect of notifications made after January 20. 1967 the time limit was three years; in respect of notification made before that date the time limit was to be two years after that date. Provision was also made for payment of interest on compensation due to persons in respect of whose land declarations under s. 6 had been delayed beyond a specified period; no interest was however, to be paid to those to whom compensation had already been paid. The petitioners by leave of Court amended their petitions to attack the validity of the. aforesaid Validating Act on the following main grounds : (1) By seeking to validate past transactions of a kind which had been declared invalid by this Court without retrospectively changing the substantive law under which the past transactions had been effected the legislature was encroaching over the domain of the judicial power vested by the Constitution in the judiciary exclusively; (ii) The Validating Act did not L4Sup. C.I.1684 42 revive the notification under s. 4 which had become exhausted after the first declaration under s. 6 and no acquisition following thereafter could be made without a fresh notification under s. 4; (iii) The Validating Act violated Art. 31(2) of the Constitution inasmuch as it purported to authorise acquisitions without fresh notifications under s. 4 thereby allowing compensation to be paid on the basis of the said . notification under s. 4 without allowing for increase in the value of land thereafter; (iv) The Validating Act violated Art. 14 of the Constitution in various ways. HELD: Per Wanchoo C.J., Bachawat & Mitter, JJ.- (i) The American doctrine of well defined separation of legislative and judicial powers has no application to India and it cannot be said that an Indian Statute which seeks to validate invalid actions' is bad if the invalidity has already been pronounced upon by a court of law. A.K. Gopalan v. State, [1950] S.C.R. 88, referred to. (ii) The absence of a provision in the amending Act to give retrospective operation to s. 3 of the Act does not affect the validity of s. 4. It was open to Parliament to adopt either course e.g. (a) to provide expressly for the retrospective operation of s. 3, or, (b) to lay down that no acquisition purporting to have been made and no action taken before the Land Acquisition (Amendment and Validation) Ordinance, 1967 shall be deemed to be invalid or even to have become invalid because, inter alia, of the making of more than one declaration under s. 6 of the Land Acquisition Act, notwithstanding any judgment decree or order to the contrary. Parliament was competent to validate such actions and transactions, its power in that behalf being only circumscribed by appropriate entries in the Lists of the Seventh Schedule and the fundamental rights set-forth in Part III of the Constitution. Section 4 of the Amending Act being within the legislative competence of Parliament, the provisions thereof are binding on all courts of law notwithstanding judgments, orders or decrees to the contrary rendered or made in the past. [67 C-F] Case-law referred to. (iii) The impugned Act does not violate Art. 31(2). The Act does not in express terms enact any law which directly affects compensation payable in respect of property acquired nor does it lay down any principles different from those which were already in the Land Acquisition Act of 1894. After the amendment of the Constitution in 1955 the question of compensation is not justiciable and it is enough if the law provides that a person expropriated must be given compensation for his property or lays down the principles therefor. [67 G-H] The Legislature might well have provided in the Act of 1894 that it would be open to the appropriate Government after issuing a notification under s. 4 to consider objections raised under s. 5 with regard to the different localities from time to time enabling different reports to fie made under s. 5-A with consequent adjustments in s. 6 providing for declarations to be made as and when each report under s. 5A was considered. By the validation of action taken under s. 6 more than once in respect of a single notification under s. 4, the original scheme of acquisition is not altered. The public purpose behind the notification remains the same. It is not as if a different public purpose and acquisition of land for such purpose were being interploated by means of the Validating Act. Only the shortcoming in the Act as to want to provision to enable more than one decla- ration under s. 6 are being removed. [68 D-F] 43 The date of valuation under the Validation Act is that of the issue of notification under s. 4(1), a principle which has held the field since 1923 Legislative competence to acquire land under the provisions of the Land Acquisition Act cannot be challenged because of constant appreciation of land values all over the country due to the prevalent abnormal inflation. There must be some time lag between the commencement and conclusion of land acquisition proceedings and in principle there is nothing wrong in accepting the said commencement as the date of valuation. Sections 4 and 23 of the Land Acquisition Act are protected by Art. 31(5) (a) of the Constitution. Only ss. 5-A and 6 of the Act have been amended. The amendment does not alter the principle of compensation fixed by the Act nor contravene Art. 31 of the Constitution in any way. [69 G-70 B] It cannot be said of the Validating Act that it was fixing an arbitrary date for the valuation of the property which bore no relation to the acquisition proceedings. The population in Indian cities especially in the capital is ever-increasing. The State has to plan the development of cities and it is not possible to take up all schemes in all directions at the same time. The resources of the State may not be sufficient to acquire all the area required by a scheme at the same time. Of necessity the area under the proposed acquisition would have to be carved into blocks and the development of one or more blocks at a time could only be taken up in consonance with the resources available. Even contiguous blocks could be developed gradually and systematically. In view of such factors it cannot be said that the principle of fixing compensation on the basis of the price prevailing on the date of the notification under s. 4(1) of the Land Acquisition Act was not a relevant principle which satisfied the requirements of Art. 31(2).[70 C-71 H] The State of West Bengal v. Mrs. Bela Banerjee, [1954] S.C.R. 558, State of Madras v. D. Namasivaya Mudaliar, [1964] 6 S.C.R. 936 and, P.V. Mudaliar v. Deputy Collector, [1965] 1 S.C.R. 614, considered. (iv) The validating Act was not violative of Art. 14. Whenever an Amending Act is passed there is bound to be some difference in treatment between transactions which have already taken place and those which are to take place in the future. That by itself will not attract the operation of Art. 14. Again, even with respect to transactions which may be completed in the future, a reasonable classification will not be struck down. [72 C] Jalan Trading Co. v. Mazdoor Union, [1967] 1 S.C.R. 15, relied on. It is not possible to say that because the Legislature thought of improving upon the Act of 1894 by prescribing certain limits of time as from 20th January 1967 the difference in treatment in cases covered by the notification before the said date and after the said date denies equal protection of laws because the transactions are not similarly circumstanced. Some of the notifications issued under s. 4 must have been made even more than 3 years before 20th January, 1967 and such cases obviously could not be treated in the same manner 'as notifications issued after that date. Art. 14 does not strike at differentiation caused by the enactment of a law between transactions governed thereby and those which are not so governed. [73 H-74 B] Hatisingh Manufacturing Co., Ltd. v. Union of India, [1960] 3 S.C.R. 528. No grievance can be made because interest is denied to persons who have already taken the compensation. Even here the classification is not unreasonable and cannot be said to be unrelated to the object of the Act. [74 E-F] 44 Per Shelat and Vaidialingam, JJ. (dissenting)- By validating the acquisition orders and declarations made on the basis of an exhausted notification under s. 4 the impugned Act saves government from having to issue a fresh notification and having to pay compensation calculated on the market value as on the date of such fresh notification and depriving the expropriated owner of the benefit of the appreciated value in the meantime. The real object of s. 4 of the impugned Act is thus to save the State from having to compensate for such appreciation under the device of validating all that is done under an exhausted s. 4 notification and thus in reality fixing an anterior date i.e. the date of such a dead s. 4 notification for fixing the compensation. The impugned Act thus suffers from a two fold vice : (i) that it purports to validate acquisitions orders and notifications without resuscicating the notification under s. 4 by any legislative provision on the basis of which alone the validated acquisitions, orders and declarations can properly be sustained and (ii) that its provisions are in derogation of Art. 31(2) as interpreted by this Court by fixing compensation on the basis of value on the date of notifications under s. 4 which had become exhausted and for keeping them alive no legislative provision is to be found in the impugned Act. It is therefore not possible to agree with the view that the purpose of s. 4 is to fill the lacuna pointed out in Sharma's case nor with the view that it raises a question of adequacy of compensation. The section under the guise of validating the acquisitions, orders and notifications camouflages the real object of enabling acquisitions by paying compensation on the basis of values frozen by notifications under s 4 which by part acquisitions thereunder had lost their efficacy and therefore required the rest of the land to be notified afresh and paying compensation on the date of such fresh notifications. The fact that neither s. 4 nor s. 23 of the principal Act are altered does not make any difference. [89 D-H, 85 H] Section 4 of the Amending Act must therefore be struck down as invalid. [90 A] JUDGMENT:
ORIGINAL JURISDICTION: Writ Petitions Nos. 114, 216, 223 and
252 of 1966 and 85 of 1967.
Petitions under Article 32 of the Constitution of India for
the enforcement of fundamental rights.
C.B. Agarwala and K. P. Gupta, for the petitioners (in W.P.s
Nos. 114, 216 and 252 of 1966 and 85 of 1967.)
R.V. S. Mani and K. P. Gupta for the petitioner (in W.P.
No. 223 of 1966).
Niren De, Solicitor-General, B. R. L. lyengar and R. N.
Sachthey for the respondents (in W.Ps. Nos. 114 and 216 of
1966).
Niren De, Solicitor-General, R. H. Dhebar and R. N. Sach-
they, for respondents Nos. 1 to 5 (in W.P. No. 223 of 1966
and the respondents (in W. P. No. 85 of 1967).
R. N. Sachthey, for respondent No. 9 (in W. P. No. 223 of
1966).
M. K. Ramamurthi, Vineet Kumar and Shyamala Pappu for
respondents Nos. 12(a) to 12(d) (in W.P. No. 223 of 1-966).
45
V. A . Seyid Muhammad and R. H. Dhebar and R. N. Sachthey,
for respondents Nos. 1 to 5 (in W. P. No. 252 of 1966).
P.C. Bhartari, for the intervener (in W.P. No. 114 of 1966).
The Judgment of WANCHOO, C.J., BACHAWAT and MITTER, JJ. was
delivered by MITTER, J. The dissenting opinion of SHELAT
and VAIDIALINGAM, JJ. was delivered by SHELAT, J.
Mitter, J. Ms is a group of five Writ Petitions under Art.
32 of the Constitution challenging in four cases the
validity of land acquisition proceedings started by a
notification dated November 13, 1959 under s. 4 of the Land
Acquisition Act and declarations contained in other
notifications dated March 18, 1966 onwards under s. 6 of the
said Act and for other incidental reliefs including the
issue of appropriate writs for the purpose. Various
persons. have joined as petitioners in three of the
applications. In Writ Petition No. 114 of 1966 the
petitioners number 61. They all own lands in village
Mandawali Fazilpur, on Patparganj Road within the union
territory of Delhi, the notification of the declaration
under, s. 6 having been made on March 18, 1966. in Writ
Petition No. 216 of 1966 there are 71 petitioners who also
own lands in the same village. Their complaint is based on
the same notification under s. 4 and a notification dated
July 12, 1966 under s. 6 of the Act. In Writ Petition No.
223 of 1966 the single petitioner is Pandit Lila Ram who
owned lands in villages Masjid Moth, Raipur Khurd and
Shahpur Jat respectively within the union territory of
Delhi. His complaint is based on a s. 4 notification dated
September 3, 1957, a notification dated April 15, 1961 under
s. 6 of the Act and several awards of Land Acquisition Col-
lector, Delhi made in 1961. In Writ Petition No. 252 of
1966, there are eight petitioners who owned lands in village
Kotla at Patparganj Road within the union territory of
Delhi. Their grievance is against s. 4 notification dated
November 13, 1959 and a notification dated June 14, 1961
under s. 6 of the Act. In Writ Petition No. 85 of 1967 the
sole petitioner is one Rai Bahadur Sohan Lal who owned land
in village Kilokri on the Delhi-Mathura Road within the
union territory of Delhi. His grievance is against s. 4
notification dated November 13, 1959, a notification dated
July 27, 1961 under s. 6 of the Act and an award dated
February 16, 1962.
Although there are some distinctive features in some of the
petitions to be mentioned later, the common attack is based
on the judgment of this Court delivered on February 9, 1966
in State .of Madhya Pradesh v. V. P. Sharma(1). That case
arose out of proceedings for acquisition of land in eleven
villages in Madhya Pradesh for the steel plant at Rourkela.
There a notification had been issued under s. 4(1) of the
Land- Acquisition Act on May 16,
(1) [1966] 3 S.C.R. 557.
46
1949 declaring that lands in eleven named villages were
likely to be needed for a, public purpose i.e., the erection
of an iron and steel plant. Thereafter, notifications were
issued under s. 6 from time to time and some lands in
village Chhawani were acquired in the year 1956. In August
1960 a fresh notification under s. 6 of the Act was issued
proposing to acquire, Ac. 486-17 of land in the said
village. Some owners of the land in the village who were
affected by the notification filed ‘a writ petition
challenging the validity of the notification under s. 6. The
High Court accepted their contention whereupon the State of
Madhya Pradesh came up to this Court in appeal. It was held
by this Court that ss. 4, 5-A and 6 of the Land Acquisition
Act were integrally connected and that acquisition always
began with a notification under s. 4(1) followed by
consideration of all objections thereto under s. 5-A and a
declaration under s. 6. According to this Court, once a
declaration under s. 6 was made the notification under s.
4(1) was exhausted and the latter section was not a
reservoir from which the Government might from time to time
draw out land and make declaration with respect to it
successively. The ultimate conclusion was that there could
be no successive notifications under s. 6 with respect to
land in a locality specified in one notification under s.
4(1) and in the result, the appeal of the State was
dismissed. The present Writ Petitions were all filed after
the said judgment of this Court.
The omnibus notification under s. 4 in four of these cases
dated November 13, 1959 covered an area of Ac. 34,070-00
marked as blocks Nos. A to T and X in a map enclosed with
the notification excepting therefrom certain classes of
lands, namely, (a) Government land and evacuee land, (b)
land already notified either under s. 4 or under s. 6 of the
Act for any Government scheme, (c) land already notified
either under S. 4 or under s. 6 for house building co-
operative societies mentioned in annexure (iii) to the
notification and the land under graveyards, tombs, shrine-,
and those attached to religious institutions and wakf
property, The notification stated that land was required by
the Government at the public expense for a public purpose,
namely, the planned development of Delhi. As already noted,
there were several notifications under s. 6 made from time
to time, the earliest one in this series of petitions being
dated June 14, 1961. It is clear that on the basis of the
judgment of this Court the validity of the notifications
under s. 6 of the Act after the first of the series could
not be upheld in A court of law.
On January 20, 1967 an Ordinance was promulgated by the
President of India styled The Land Acquisition (Amendment
and Validation) Ordinance (1 of 1967). The scheme of the
Ordinance was that the Land Acquisition Act of 1894 was to
have effect, subject to the amendments specified in ss. 3
and 4 of the Ordin-
47
ance. Section 3 purported to amend s. 5-A of the Land
Acquisition Act (hereinafter referred to as the principal
Act) by enabling different reports to be made in respect of
different parcels of land under s. 5-A of the Act.
Similarly, s. 4 of the Ordinance purported to amend s. 6 of
the principal Act by enabling different declarations to be
made from time to time in respect of different parcels of
land covered by the same notification under s. 4. Section 5
of the Ordinance purported to validate all acquisitions of
land made or purporting to have been made under the
principal Act before the commencement of the Ordinance,
notwithstanding any judgment, decree or order of any court
to the contrary.
On April 12, 1967 Parliament passed an Act (Act 13 of 1967)
styled The Land Acquisition (Amendment and Short Title
Validation) Act, 1967. Section 2 of this Act purported to
amend S. 5-A of the principal Act to allow the making of
more than one report in respect of land which had been
notified under s. 4(1). Section 3 similarly purported to
amend s. 6 of the principal Act by empowering different
declarations to be made from time to time in respect of
different parcels of land covered by the same notification
under s. 4(1) irrespective of whether one report or
different reports had been made under s. 5-A sub-s. (2).
Clause (ii) of s. 3 inserted a new proviso to s. 6(1)
reading.:
“Provided that no declaration in respect of
any particular land covered by a notification
under section 4, sub-section (1), published
after the commencement of the Land Acquisition
(Amendment and Validation) Ordinance, 1967,
shall be made after the expiry of three years
from the date of such publication.”
As a. good deal of argument turns on the interpretation of
s. 4 of the Amending Act, it is necessary to set the same
out in extenso :
“4. (1) Notwithstanding any judgment, decree or order of any
court to the contrary,-
(a) no acquisition of land made or purporting to have been
made under the principal Act before the commencement of the
Land Acquisition (Amendment and Validation) Ordinance, 1967,
and no action taken or thing done (including any order made,
agreement entered into, or notification published) in
connection With such acquisition shall be deemed to be
invalid or ever to have become invalid merely on the ground-
(i) that one or more Collectors have performed the functions
of Collector under the principal Act in respect of the land
covered by the same notification under sub-section (1) of
section 4 of the principal Act;
(ii)that one or more reports have been made under sub-
section (2) of section 5-A of the principal Act, whe-
48
ther in respect of the entire land, or different parcels
thereof, covered by the same notification under sub-section
(1) of section 4 of the principal Act;
(iii) that one or more declarations have been made under
section 6 of the principal Act in respect of different
parcels of land covered by the same notification under sub-
section (1) of section 4 of the principal Act;
(b) any acquisition in pursuance of any notification
published under sub-section (1) of section 4 of the prin-
cipal Act before the commencement of the Land Acquisition
(Amendment and Validation) Ordinance 1967, may be made after
such commencement and no such acquisition and no action
taken or thing done (including any order made, agreement
entered into or notification published), whether before or
after such commencement, in connection with such acquisition
shall be deemed to be invalid merely on the grounds referred
to in clause. (a) or any of them.
(2) Notwithstanding anything contained in clause (b) of
sub-section (1), no declaration under section 6 of the
principal Act in respect of any land which has been notified
before the commencement of the Land Acquisition (Amendment
and Validation) Ordinance, 1967, under sub-section (1) of
section 4 of the principal Act, shall be made after the
expiry of two years from the commencement of the said
Ordinance.
(3)Where acquisition of any particular land covered by a
notification under sub-section (1) of section 4 of the
principal Act, published before the commencement of the Land
Acquisition (Amendment and Validation) Ordinance, 1967, is
or has been made in pursuance of any declaration under
section 6 of the principal Act, whether made before or after
such commencement, and such declaration is or has been made
after the expiry of three years from the date of publication
of such notification, there shall be paid simple interest,
calculated at the rate of six per cent per annum on the
market value of such land, as determined under section 23 of
the principal Act, from the date of expiry of the said
period of three years to the date of tender of payment of
compensation awarded by the Collector for the acquisition of
such land :
Provided that no such interest shall be payable for any
period during which the proceedings for the acquisition of
any land were held up on account of stay or injunction by
order of a court
49
Provided further that nothing in this sub-
section shall apply to the acquisition of any
land where the amount of compensation has been
paid to the persons interested before the
commencement of this Act.”
Section 5 of the Amending Act repealed the Land Acquisition,
(Amendment and Validation) Ordinance, 1967 and further pro-
vided that notwithstanding such repeal, anything done or any
action taken under the principal Act as amended by the said
Ordinance shall be deemed to have been done or taken under
the principal Act as amended by,_this Act as it this Act had
come into force on the 20th January, 1967.
The petitions before us were amended by leave of the Court
so that the Validation Act of 1967 could. be challenged.
Mr. C. B. Agarwala who appeared for the petitioners in Writ
Petitions Nos. 114, 216, 252 of 1966 and 85 of 1967 raised
the following points in support of the petitions : (1) The
Validation Act does not revive the notification under s. 4
which had become exhausted. after the first declaration
under s. 6 and no acquisition could be made without a fresh
notification under s. 4. (2) The Validation Act violated
Art. 31( 2) of the Constitution inasmuch as it purported to
authorise acquisitions without fresh notifications under s.
4 thereby allowing compensation to be paid on the basis of
the dead notification under s. 4. It was argued that once a
notification under s. 4 was exhausted Government had to make
a fresh one under the said section; as a result thereof
compensation had to be assessed on a different basis
altogether. (3) The Validation Act violated Art. 14 of the
Constitution in various ways –
(a) It- made discrimination inasmuch as a notification
under-s. 4 made before the commencement of the Ordinance
had to be followed by a declaration under s. 6 within two
years of the said’ date, whereas if a notification under s.
4 was made after 20th January 1967 i.e. the date of the
Ordinance, the declaration under s. 6 could be made within a
period of three years from the date of the notification
under s. 4. The discrimination lay in the fact that whereas
a declaration under s. 6 had to be made in respect of a
notification under s. 4 bearing date subsequent to 20th
January 1967 within three years, a much longer period of
time might elapse between a date of declaration under s. 6
and a notification under s. 4 issued prior to the date of
the Ordinance.
(b) If a notification under s. 4 was made after the date of
the Ordinance, compensation had to be paid on the basis of
such notification but if a notification had been made under
s. 4 of the Act before the date of the Ordinance,
compensation would be awarded on the basis, of the exhausted
notification under s. 4 however much time might have elapsed
since the date of the dead notification.
50
(c)If compensation had not been paid before the Ordinance,
interest at 6% had to be paid to the owner of the land on
the ,amount of compensation fixed, but if the owner had
received compensation before the date of the Ordinance, he
had no claim to interest although the acquisition in both
cases flowed from the same notification under s. 4.
(d) It was open to Government to make a fresh notification
under s. 4 after the lapse of three years from the date of
the Ordinance and such notification might be issued after
every period of three years in any case where acquistion was
not completed. In such cases, owners of land would be
substantially benefited by the new notification under s. 4.
But if a notification had been made before the date of the
Ordinance, the owner of the land would receive compensation
based on the old notification although a period much longer
than three years might elapse between the date of the
notification under s. 4 and a declaration under s. 6, his
only solatium being interest at 6% p.a. on the amount of the
compensation. This would result in discrimination inasmuch
as a person affected by a s. 4 notification prior to the
date of the Ordinance would be treated. very differently
from another person whose land was acquired in terms of a
notification made after the commencement of the Ordinance.
On the first point, it was argued by Mr. Agarwala that ss. 2
:and 3 of the Amending Act had no retrospective operation,
that there was no law which purported to validate
retrospectively any but the first report made under s. 5-A
of the principal Act or any but the first declaration issued
under S. 6 of the Act and consequently there was no legal
basis for the validation of such past acts by the operation
of s.-4 of the Amending Act. It was therefore argued that
the defect in the principal Act as pointed out by this Court
in V. P. Sharma’s case(1) was not removed by s. 4 of the
Amending Act. It was urged that Acts seeking to validate
past transactions can only be effective if the amendment
introduced had retrospective operation so as to cure the
lacuna ‘in the enactment from a date anterior to that of the
impugned transactions. If the Amending Act had no
retrospective operation, it could not protect past
transactions which would still have to be declared invalid
inasmuch as the notification under S. 4 made on November 13,
1959 having exhausted itself after the first declaration
under S. 6 was not resusciated by any provision ,of the
Amending Act.
On the second point, the broad contention urged was that the
amendment was hit by Art. 31(2) of the Constitution inasmuch
as its whole purpose was to avoid payment of enhanced
compensation which would be necessitated if a fresh
notification had to be issued under s. 4. The notification
dated November 13, 1959
(1) [1966] 3 S.C.R. 557.
51
having spent itself, a fresh one in the normal course would
have to be issued and compensation be paid not on the basis
of valuation on November 13, 1959 but on that prevailing at
least 8 or 9 years afterwards which would be substantially
higher. It was argued that acquisition on the basis of any
declaration under S. 6 of the Act after the first one would
in effect be providing for compensation on the basis of a
notification under s. 4 which had no relation to the
acquisition. In other words, the date of the earlier
notification under s. 4 must be treated to be an arbitrary
date divorced, from and completely alien to the acquisition
sought to be made by a subsequent declaration under S. 6. In
such circumstances, the ratio of a number of decisions of
this Court starting from that of The State of West Bengal v.
Mrs. Bela Banerjee(1) to a recent judgment in Union of India
v.Kamalabai Harjivandas Parekh and others(2) would apply.
It is not necessary to examine all these decisions in
detail. The notable decisions to which reference was made
at some length are P. V. Mudaliar v. Dy. Collector(3),,
Jeejeebhoy v. Asstt. Collector(4)and State of Madras v. D.
Namasivaya Mudaliar(5). It was argued that though the Land
Acquisition Act was saved by Art. 31(5) (a) of the
Constitution, any amendment thereto after the coming
into force of the Constitution had to pass the test of Art.
13 and Art. 31(2) would apply with full force to any
amendment of the Land Acquisition Act if as a result thereof
a person expropriated was being deprived of compensation,
i.e., the just equivalent of the property acquired. The
point sought to be made was that the notification of
November 13, 1959, having exhausted itself, the value of the
property at or about that date would be illusory com-
pensation in violation of Art. 31(2) in respect of a
declaration under S. 6 made after the first one of the
series. Reference was made to proceedings for compulsory
acquisition of land in England under the Lands Clauses Acts
under which “once the undertakers or authority are
authorised to purchase, the next step in the normal course
is to serve a notice to treat”-see Halsbury’s Laws of
England, third edition, Vol. 10, page 60, Art. 97.
It is pointed out in Art. 102 of the said book that
“The effect of serving a notice to treat is to
establish a relation analogous in some
respects to that of a purchaser and vendor, a
relation which binds the undertakers to take
the land and binds the, land-owner to give up
the land subject to his being paid compensa-
tion, but until the price is ascertained the
land remains the property of the l
andowner.
Both parties have the
(1) [1954] S.C.R. 558.
(2) C.A. 1564/1966 decided on 7-9-1967.
(3) [1965] 1 S.C.R. 614.
(4) [1965] 1 S.C.R. 636.
(5) [1964] 6 S.C.R. 936.
52
right to have the price ascertained and the
purchase completed in manner provided by the
Lands Clauses Acts.”
It was said that the English procedure ensured the payment
of just equivalent of the property to the person who was
deprived of it and that issue of a declaration under s. 6
made years after the notification under s. 4 the date of
which alone was to be considered for fixing the value of the
property, ignored the rights of the person to the lawful
compensation aimed at by Art. 31(2) of the Constitution.
Reference was made to the judgment of the Judicial Committee
of the Privy Council in Ezra v. Secretary of State for
India(1) where on a reference to the sections of the Land
Acquisition Act as they then stood, it was observed :
“that the expert official charged with the
duty of fixing a value should-be possessed of
all the information in the hands of the
department, and should at the same time avail
himself of all that is offered at the enquiry,
his ultimate duty being not to conclude the
owner by his so-called award, but to fix the
sum, which in Ms best judgment is the value
and should be offered.”
On the question of violation of Art. 14 of the Constitution,
besides the general argument already referred to, it was
urged that in Writ Petition No. 85 of 1967 there was a
further point as to discrimination. The facts laid in this
petition are as follows. The petitioner was the owner of
land measuring Ac. 10-62 in village Kilokri. He wanted to
develop the land by establishing a residential colony and
selling the same out in plots. For this purpose, he had
spent a good deal of money and taken enormous trouble and
divided the area after development into 78 residential
plots. In 1956 he had submitted a lay out plan of the land
in question for necessary, sanction to the Delhi Development
Provisional Authority. On June 18, 1956 he was informed by
the Delhi Development Provisional Authority that the, final
lay out plan had been approved by the said authority. In
September 1957 the said authority demanded from the
petitioner a security for Rs. 12,850-25 as a guarantee for
carrying out the development of the colony in accordance
with the approved standards and this sum was duly deposited
by the petitioner. On September 15, 1958 the petitioner
submitted service plans in respect of his colony and these
were duly checked and found to be in order : the case was
ordered to be Placed before the Standing Committee of the
Municipal Corporation for approval. By December 24, 1958
the Standing Committee’referred the case
R. 32 Calcutta 605 at 629.
53
back to the Town Planner for a scrutiny of the ownership
documents. The question relating to the proof of ownership
was settled on March 19, 1961. In the meantime, the
notification dated November 13, 1959 had been issued under
s. 4(1) of the Act. The petitioner duly filed his
objections under s. 5-A of the Act. By a notification dated
July 1, 1960 published by the Delhi Administration the Chief
Commissioner, Delhi, withdrew the land of 16 colonies from
the acquisition out of the area covered by the notification
of November 13, 1959 on the ground that their lay out plan
had been sanctioned by the Delhi Municipal Corporation and
as per general decision of the Standing Committee, Delhi
Municipal Corporation, the petitioner was asked by the Town
Planner by letter dated April 16, 1960 to submit a de-
notification certificate to the effect that the land
comprising the proposed lay out of his colony was excluded
from the purview of the notification issued under s. 4 of
the Act. On June 14, 1961 the Deputy Housing Commissioner,
Delhi Administration, issued the first notification under s.
6 of the Act in respect of 97 bighas and 4 biswas of land in
village Kilokri as required by the Government for a public
purpose at the public expense, namely, the planned
development of Delhi. The petitioners land was not covered
by this notification. The Deputy Housing Commissioner,
Delhi Administration, purported to issue another noti-
fication dated 26/27th July, 1961 under s. 6 of the Act
declaring that land specified therein in village Kilokri was
required to be taken by the Government at public expense for
a public purpose. This notification covered the petitioners
land in question in village Kilokri. On January 9, 1962 the
petitioner was informed by a letter issued by the office of
the Town Planner, Municipal Corporation, Delhi, that the
Standing Committee of the Municipal Corporation by its
resolution No. 1190 dated December 18, 1961 had rejected the
lay out plan of the petitioner’s colony. According to the
petitioner, this resolution went to show that his land was
sought to be acquired because it had not been de-notified
along with the land of the other colonies on the ground that
the Standing Committee had rejected the lay out plan of his
colony. Thereafter the Land Acquisition Collector, Delhi,
made an award No. 1276 dated February 16, 1962 with respect
to the petitioner’s said land. In March 1965 the petitioner
learnt about the notification issued by the Delhi
Administration on July 1, 1960 under s. 48(1) of the Act
withdrawing the land of the 16 colonies mentioned therein
from the acquisition out of the area covered by the
notification dated November 13, 1959 on the ground that
their lay out plan had been sanctioned by the Delhi
Municipal Corporation. By letter dated March 10, 1965 the
petitioner asked the Deputy Housing Commissioner, Delhi
Administration, for restoration of his land on the same
basis because his lay out plan
54
had been sanctioned before the s. 4 notification. This
request was however turned down by letter dated May 14, 1965
on the ground that the petitioner’s land had already been
acquired and could not be released. According to the
petitioner, there was no basis for treating his land in a
manner different from that of the 16 colonies. This
differential treatment has resulted in violation of Art. 14
of the Constitution so far as the petitioner’s colony is
concerned.
Mr. Agarwala also tried to make a subsidiary point in this
connection and urged that acquisition of petitioner’s land
was a colourable exercise of the power under the Act
inasmuch as the petitioner was out to do the same thing as
was sought to be achieved by proceedings under Land
Acquisition Act, the only difference being that whereas the
sales effected by him were at reasonable rates, those
fetched at auction of lands acquired under the Act were for
much higher figures and the State was really making revenue
out of such acquisitions.
Mr. R. V. S. Mani who appeared for the petitioner in Writ
Petition No. 223 of 1966 adopted the arguments of Mr.
Agarwala in general but sought to make a special point of
his own. In substance the additional ground urged by him
was that by the Validating Act the Legislature had sought to
encroach into the domain of the Judiciary. Mr. Mani
contended that although there was no clear separation of
legislative and judicial powers in our Constitution,
nevertheless the Constitution did not confer unlimited
powers on the legislature and it was for the Judiciary to
declare the limits of the legislative powers enshrined in
the Constitution. To quote Mr. Mani’s words :
“The Legislature exercises judicial power if
its legislative action retroacts on past
controversies and overrides or reverses the
decisions of the Judiciary.”
Such an act, argued Mr. Mani, bad to be struck down in
courts of law.
Mr. Mani’s main argument was that inasmuch as ss. 2 and 3 of
the Amending Act had not been given retrospective effect,
the validation sought to be effected by s. 4 with respect to
the past transactions was of no avail as the impugned
actions, i.e., the subsequent declarations under s. 6 of the
Act, had no legal basis.
In our opinion no useful purpose will be served by referring
to the clear demarcation between the judicial powers and
legislative powers in America and attempt to engraft the
said principle in the working of our Constitution. This
development of the
55
law, as pointed out in A. K. Gopalan v. State(“) was due to
historical reasons. In that case it was pointed out by Das,
J. (see, at p. 286) that
“the Supreme Court of the United States, under
the leadership of Chief Justice Marshall,
assumed the power to declare
any law
unconstitutional on the ground of its not
being in “due process of law,” It is thus that
the Supreme Court established its own
supremacy over the executive and the Congress.
In India the position of the Judiciary is
somewhere in between the Courts in England and
the United States. While in the main leaving
our Parliament and the State Legislatures
supreme in their respective legislative
fields, our Constitution has, by some of the
articles, put upon the Legislature certain
specified limitations……… Our
Constitution, unlike the English Constitution,
recognises the Court’s supremacy over the
legislative authority, but such supremacy is a
very limited one, for it is confined to the
field where the legislative power is
circumscribed by limitations put upon it by
the Constitution itself. Within this
restricted field the Court may, on a scrutiny
of the law made by the Legislature, declare it
void if it is found to have transgressed the
constitutional limitations.”
It will not serve any useful purpose to note the decisions
of this Court where reference has been made to the
distinction between, the Indian Constitutional law and the
American Constitutional law on this subject. Mr. Mani
sought to rely on a statement of the law made by Cooley in
his Constitutional Limitations, 7th ed., p. 137, as quoted
in Willoughby’s Constitution of the United States, second
edition, Vol. 3, at page 1651 that
“If the legislature would prescribe a
different rule for the future from that which
the courts enforce, it must be done by
statute, and cannot be done by a mandate to
the courts which leaves the law unchanged, but
seeks to compel the courts to construe and
apply it not according to the judicial, but
according to the legislative judgment………
If the legislature cannot thus indirectly
control the action of the courts, by requiring
of them a construction of the law according to
its own views, it is very plain it cannot do
so directly, by setting aside their judgments’
compelling them to grant new trials, ordering
the discharge of offenders, or directing what
particular steps shall be taken in the
progress of a judicial. inquiry.
(1) [1950] S.C.R. 88 at 198.
56
According to Willoughby,
“Retroactive legislation, which does not
impair vested rights, or violate express
constitutional prohibitions, is valid, and
therefore, particular legal remedies, and, to
a certain extent, rules of evidence may be
changed and, as changed, made appli
cable to
past transactions,…… But substantial
rights may not thus be interfered with.”
Willoughby seeks to fortify his statement quoting from
Cooley again :
“The legislature does, or may, prescribe the
rules under which the judicial power is
exercised by the courts; and in doing so it
may dispense, with any of those formalities
which are not essential to the jurisdiction of
the court; and whatever it may dispense with
by statute anterior to the proceedings, we
believe it may also dispense with by statute
after the proceedings have been taken, if the
court has failed to observe any of those
formalities. But it would not be competent
for the legislature to authorize a court to
proceed and adjudicate upon the rights of
parties, without giving them an opportunity to
be heard before it and, for the same reason it
would be incompetent for it, by retrospective
legislation, to make valid any proceedings
which had been had in the courts, but which
were void for want of jurisdiction over the
parties.”
Relying on the above Mr. Mani proceeded to argue that the
wording of s. 4 of the Amending Act was not a question of
mere form and that it was a decree purporting to operate as
such. According to him unless s. 3 was’ retrospective, s. 4
would be meaningless and should be struck down. Mr. Mani
relied particularly on the decision of the Federal Court in
Basanta Chandra Ghose v. King Emperor(1) where it was held
by this Court that Ordinance No. III of 1944 did not take
away the power of the court to investigate and interfere
with orders of detention or deprive the court of its power
to pass orders under s. 491 of the Criminal Procedure Code
and the court was still at liberty to investigate whether an
order purporting to, have been made under r. 26 of the
Defence of India Rules and deemed to be made under .the
Ordinance or a new order purporting to be made under the
,Ordinance was in fact validly made, in exactly the same way
as immediately before the promulgation of the Ordinance; and
if on a consideration the Court came to the conclusion that
it was not
(1) [1944] F.C.R. 295.
57
validly made on any ground other than the ground that r. 26
of the Defence of India Rules was ultra vires s. 10 of the
Ordinance would no more prevent it from so finding than S.
16 of the Defence of India Act did. We shall deal with the
argument based on this case later on.
The learned Solicitor General first dealt with the question
as to whether Parliament was competent to pass the
Validating Act and whether s. 4 of the Amending Act could be
given effect to unless the legislature gave retrospective
operation to section 3. According to the Solicitor General-
and that is undoubtedly the position in law-the legislative
competence of Parliament is only circumscribed by the scope
of the entries in the appropriate Lists under the Seventh
Schedule and the fundamental rights enshrined in Part III of
the Constitution. The power of Parliament to make laws for
the whole or any part of the territory of India is dealt
with by the Constitution in Arts. 245 to 250, 252 and 253.
Acquisition and requisitioning of property is an entry in
List III and Parliament is competent to make laws enumerated
in that list under Art. 246(2) of the Constitution. As
early as in the year 1878 it was pointed out by the Judicial
Committee of the Privy Council in The Queen v. Burah(1) that
the Indian Legislature when acting within the limits
prescribed (by the Act of the Imperial Parliament which
created it) had plenary powers of legislation as much, and
of the same nature as those of Parliament itself and
“If what has been done is legislation, within
the general scope of the affirmative words
which give the power, and if it violates no
express condition or restriction by which that
power is limited (in which category would, of
course, be included any Act of the Imperial
Parliament at variance with it), it is not for
any Court of Justice to inquire further, or to
enlarge constructively those conditions and
restrictions.”
In that case the question before the Judicial Committee was
whether Act XXII of 1869 of the Indian Legislature which ex-
cluded the jurisdiction of the High Court within certain
specified districts was not inconsistent with the Indian
High Courts Act or with the Charter of the High Court and so
in its general scope within the legislative power of the
Governor-General in Council. Under s. 4 of that Act the
territory known as Garo Hills was removed from the
jurisdiction of the Courts of Civil and Criminal Judicature
and from the control of the officers of revenue, constituted
by the regulations. of the Bengal Code and the Acts passed
by any Legislature established in British India as well ,is
(1) L.R. 5 I.A. 178 at 194.
L4Sup. C.I./68-5
58
from the law prescribed for such courts or officers by the
Regulations and Acts aforesaid. This section further
provided that no Act thereafter passed by the Council of the
Governor-General for making laws and regulations shall be
deemed to extend to any part of the said territory unless
the same was specially named therein. Under s. 9 of the Act
the Lieutenant-Governor was authorised by notification in
the Calcutta Gazette to extend mutatis mutandis all or any
of the provisions contained in the other sections of the Act
to the Jaintia Hills, the Naga Hills, and such portion of
the Khasi Hills as might for the time being form part of
British India. The Lieutenant-Governor of Bengal, acting
under powers conferred by s. 9, extended the provisions of
Act XXII of 1869 to the territory of Khasi and Jaintia Hills
and excluded therefrom the jurisdiction of the courts of
civil and criminal judicature. The High Court of Calcutta
held that the 9th section was not legislation but was a
delegation of ‘legislative power. This was not accepted by
the Judicial Committee and it was observed (at p. 195) :
“……it is a fallacy to speak of the powers
thus conferred upon the Lieutenant-Governor
(large as they undoubtedly are) as if, when
they were exercised, the efficacy of the acts
done under them would be due to any other
legislative authority than that of the
GovernorGeneral in Council. Their whole
operation is, directly and immediately, under
and by virtue of this Act (XXII of 1869)
itself.”
Reference was made by counsel to the case of Abeyesekra v.
Jayatilake(1). The question there arose as to whether an
Order in Council of 1928 amending another of 1923 making
provision that the action of a common informer brought to
recover penalties under the Order in Council of 1923 be
dismissed and further amending the 1923 Order so as to
except the office held by the respondent from its operation
was valid and constituted all effective defence to the
action although it was retrospective in operation. In
upholding the validity of 1928 Order, it was observed by the
Judicial Committee that legislators “have certainly the
right to prevent, alter or reverse the consequences of their
own decrees.”
The effect and validity of retrospective legislation has had
to be considered by the Federal Court of India and this
Court on a number of occasions. In the case of The United
Provinces, V. Atiqa Begum(2) a question arose as to whether,
the Regularisation of Remissions Act, 1938 of the United
Provinces Legislature
(1) [1932] A.C. 261.
(2) [1940] F.C.R. 110.
59
was within its competence. There was an Act in force,
namely, the Agra Tenancy Act, 1926 the purpose whereof was
to consolidate and amend the law relating to agricultural
tenancy and certain other matters. Section 73 of that Act
provided that “when for any cause the Local Government or
any authority empowered by it, remitted or suspended for any
period the whole or any part of the revenue payable in
respect of any land, a Collector might order that the rents
of the tenants should be remitted or suspended to an amount
which shall bear the same proportion to the whole of the
amount payable in respect of the land as the revenue of
which the payment has been so remitted or suspended bears to
the whole of the revenue payable in respect of such land.”
In 1931 there was a catastrophic fall in agricultural prices
followed by threats on the part of tenants to withhold rent
on a large scale. The Government of the United Provinces
devised a scheme for the systematic reduction of rents,
varying with the circumstances of the different districts,
followed later by consequential adjustments in land revenue.
The Allahabad High Court had held in Muhammad Abdul Qaiyum
v. Secretary of State for India(1)that remissions made in
pursuance of the orders of Government had no legal effect.
In 1938 the Provincial Legislature passed the Regularisation
of Remissions Act which precluded any question as to the
validity of the orders of remission being raised in the
courts of law. The Allahabad High Court took the view that
the Act was contrary to the provisions of s. 292 of the Gov-
ernment of India Act, 1935 because it amounted to an attempt
to legislate retrospectively. Section 2 of the Act of 1938
provided that
“notwithstanding anything in the Agra Tenancy
Act, 1926……….. or in any other law for
the time being in force where rent has been
remitted on account of any fall in the price
of agricultural produce which took place
before the commencement of this Act, under the
order of the Provincial Government or any
authority empowered by it in that behalf, such
order, whether passed before or after the
commencement of this Act, shall not be called
in question in any civil or revenue court.”
Referring to the case of Queen v. Burah(2) Gwyer, C.J., said
that there was nothing in s. 292 which suggested any
intention on the part of Parliament to impose a fetter
against retrospective legislation. According to the learned
Chief Justice, the impugned Act was an Act with respect to
“remission of rents” although it might also be an act with
respect to something else, that is to say, the validation of
doubtful executive orders. The learned Chief Justice said :
(1) I.L.R. 1938 Allahabad , 114.
(2) L.R.I.A. 178.
60
“It is true that “Validation of executive
orders” or any entry even remotely analogous
to it is not to be found in any of the three
Lists; but I am clear that legislation for
that purpose must necessarily be regarded as
subsidiary or ancillary to the power of
legislating on the particular subjects in
respect of which the executive orders may have
been issued.”
His Lordship further opined that powers of the court were
not affected merely because certain executive orders were
not allowed to be questioned in any court.
In Piare Dusadh & others v. The Kink Emperor(1) one of the
questions raised was whether it was competent for the
Legislature by retrospective legislation to make valid any
proceedings which had been had in the courts but which were
void for want of jurisdiction over the parties. In this
case the facts were as follows. The appellants had been
convicted by courts functioning under the Special Criminal
Courts Ordinance (Ordinance No. 11 of 1942). On 4th June,
1943, the Federal Court held that the courts constituted
under that Ordinance had not been duty invested with
jurisdiction, in view of the nature of the provisions
contained in ss. 5, 10 and 16 of that Ordinance. The next
day, the Governor-General made and promulgated another Ordi-
nance (Ordinance No- XIX of 1943) whereby Ordinance No. 11
of 1942 was repealed and certain provisions were made in
respect of sentences which had been passed by the special
courts and in respect of cases which were pending before
them on that date. By sub-s. (2) of s. 3 of the new
Ordinance, a right of appeal against sentences which had
already been passed by the special courts was given and
appeals were accordingly preferred to the High Court in some
cases. In certain other cases applications for a writ in
the nature of habeas corpus were made. In both sets of
cases, it was contended on behalf of the accused that the
new Ordinance did not, and in any event could not, give
validity on the sentences which had been passed by the
special courts, and it was claimed that the sentences should
be treated as void or set aside. Section 4 of the new
Ordinance provided that
“Where the trial of any case pending before a
court constituted under the said Ordinance has
not concluded before the date of the
commencement of this Ordinance, the
proceedings of such court in the case shall be
void and the case shall be deemed to be
transferred”
to the ordinary criminal courts for enquiry or trial in
accordance with the Code of Criminal Procedure. Section 3
of the Ordinance provided as follows
(1) [1944] F.C.R. 61.
61
.lm15
“(a)Any sentence passed by a Special Judge, a Special
Magistrate or a Summary Court in exercise of jurisdiction
conferred or purporting to have been conferred by or under
the said Ordinance shall have effect, and subject to the
succeeding provisions of this section shall continue to have
effect, as if the trial at which it was passed had been held
in accordance with the Code of Criminal Procedure, 1898 by a
Sessions Judge, an Assistant Sessions Judge or a Magistrate,
of the first class respectively, exercising competent
jurisdiction under the said Code.
(2)Notwithstanding anything contained in any other law, any
such sentence as is referred to in sub-section (1) shall,
whether or not the proceedings in which the sentence was
passed were submitted for review under section 8, and
whether or not the sentence was the subject of an appeal
under Section 13 or Section 19, of the said Ordinance, be
subject to such rights of appeal as would have accrued, and
to such powers of revision as would have been exercisable
under the said Code if the sentence had at a trial so held
been passed on the date of the commencement of this
Ordinance.
(3)Where any such sentence as aforesaid has been altered in
the course of review or on appeal under the said Ordinance,
the sentence as so altered shall for the purpose of this
section be deemed to have been passed by the Court which
passed the original sentence.”
Learned counsel for the accused conceded that the principle
of validation by subsequent legislation was quite applicable
to judicial as to ministerial proceedings but relying on
Cooley’s Constitutional Limitations, 8th ed., p. 205 and
also pp. 773-776, they contended–
(a)that while such legislation might seek to aid and support
judicial proceedings, the legislature could not under the
guise of legislation be permitted to exercise judicial
power, and
(b) that it was not competent to the legislature by
retrospectivelegislation to make valid any proceedings
which had been held inthe courts, but which were void for
want of jurisdiction over the parties.
Spens, C. J., observed (see at p. 100):
“As a general proposition, it may be true enough to say
that the legislative function belongs to the legisla-
62
ture and the judicial function to the
judiciary. , Such differentiation of functions
and distribution of powers are in a sense part
of the Indian law as of the American law. But
an examination of the American authorities
will show that the development of the results
of this distribution in America has been
influenced not merely by the simple fact of
distribution of functions, but by the
assumption that the Constitution was intended
to reproduce the provision that had already
existed in many of the State Constitutions
positively forbidding the legislature from,
exercising judicial powers . . . . One result
of the application of this rule in the United
States has been to hold that “legislative
action cannot be made to retroact upon past
controversies and to reverse decisions which
the courts in the exercise of their undoubted
authority have made.” The reason given is that
“this would not only be the exercise of
judicial power, but it would be its exercise
in the most objectionable and offensive form,
since the legislature would in effect sit as a
court of review to which parties might appeal
when dissatisfied with the ruling of the
courts……… In India, however’, the
legislature has more than once enacted laws
providing that suits which had been dismissed
on a particular view of the law must be
restored and retried.”
The learned Chief Justice referred to the Australian case,
Federal Commissioner of Taxation v. Munro(1) where a Board
of Appeal constituted under an Act of 1922 had given certain
decisions in appeals in income-tax matters. The law courts
declared that the Australian Parliament had no power to
invest this Board of Appeal with judicial power. A later
Act established what was described as a Board of Review and
assigned to it functions which were held to be different in
character from those assigned to the former Board of Appeal.
This Act however went on to provide that decisions which had
already been pronounced by the Board of Appeal “should be
deemed to be and at all times to have been decisions of a
Board of Review given in pursuance of the provisions of the
later Act.” This later Act was challenged as vesting
judicial power in the Board of Review, but this contention
was overruled. Reference may be made to the judgment of
Starke, J. quoted by Spens, C.J. that
“Parliament simply takes up certain
determinations which exist in fact, though
made without authority, and prescribes not
that they shall be acts done by a Board
(1) 38 Com. L. R. 153.
63
of Review, but that they shall be treated as
they would be treated if they were- such acts.
The sections, no doubt, apply retrospectively
but they do not constitute an exercise of the
judicial power on the part of the Parliament.”
The learned Chief Justice observed that this aptly described
what had happened in the case before the Federal Court and
answered the argument that it was an impossible feat to
convert what was not a trial under the Code of Criminal
Procedure into a trial under the Code:
According to the learned Chief Justice, the real question
was, whether the Ordinance was covered by any of the entries
in the Seventh Schedule to the Constitution Act. “It was
not contended said the Chief Justice “that the mere absence
of a specific provision about validating laws” was by itself
of much significance.” As observed by this Court in Atiqa
Begum’s case(1), “the power of validation must be taken to
be ancillary or subsidiary to the power to deal with the
particular subjects specified in the Lists.”
There is nothing in Basanta Chandra Ghose’s case ( 2 ) which
detracts from the propositions of law laid down in Atiqa
Begum’s case(1) or Piare Dusadh’s case(3). In Basant
Chandra Ghose’s case(2) Cl. (2) of s. 10 provided :
“If at the commencement of this Ordinance
there is pending in any Court any proceeding
by which the validity of an order having
effect by virtue of section 6 as if it had
been made under this Ordinance is called in
question, that proceeding is hereby
discharged.
Spens, C.J. said with regard to this clause
that
“here there has been no investigation or
decision by any Tribunal which the legislating
authority can be deemed to have given effect
to. It is a direct disposal of cases by the
legislature itself.” (see at p. 309).
It was pointed out that the nature of the provision
considered in Piare Dusadh’s case(3) was essentially
different from cl. (2) of s. 10 of the impugned Ordinance.
The question has engaged the attention of this Court in a
number of cases and we may refer to the case of West Ramnad
Electric Distribution Co. Ltd. v. State of Madras (4) by
way of
(1) [1940] F.C.R. 110. (2) [1944] F.C.R. 295
(3) [1944] F.C.R. 61. (4) [1963] 2 S.C.R.747
64
illustration. In that case, the Madras Legislature had
passed an Act (43 of 1949) on January 24, 1950 for the
acquisition of undertakings supplying electricity in the
Province of Madras. In pursuance of S. 4(1) of the Act the
State of Madras passed an order on May 17, 1951 declaring
that the appellant undertaking shall vest in the respondent
from September 21, 1951. The Chief Electrical Inspector
took over possession of the appellant and all its records
etc. The State paid to the appellant Rs. 8,34,000 and odd
as compensation. According to the appellant, about Rs.
1,00,000 still remained to be paid. Some of the electrical
undertakings in Madras which had’ been taken over filed writ
petitions in the High Court which upheld the validity of the
impugned Act in so far as it related to the licencees other
than municipalities. In Rajahmundry Electric Supply
Corporation Ltd. v. The State of Madras(1) this Court had
held that the impugned Act of 1949 was ultra vires on the
ground that it went beyond the legislative competence of the
Madras Legislature inasmuch as there was no entry in any of
the three Lists of the Seventh Schedule of the Government of
India Act, 1935 relating to compulsory acquisition of any
commercial or industrial undertaking. After the decision in
this case, the Madras Legislature passed Act XXIX of 1954
which received the assent of the President on 9th October,
1954. This Act incorporated the main provisions of the
earlier Act and purported to validate action taken under the
earlier Act. The appellant then filed a writ petition
alleging that to the extent to which the Act purported to
validate acts done under the earlier Act of 1949 it was
ultra vires. It was further urged that the three bases of
compensation as laid down by the Act were inconsistent with
the requirement of Art. 31 of the Constitution. Section 24
of the Act ran as follows
“Orders made, decisions or directions given,
notifications issued, proceedings taken and
acts or things done, in relation to any-
undertaking taken over, if they would have
been validly made, given, issued, taken or
done, had the Madras Electricity Supply
Undertakings (Acquisition) Act, 1949 (Madras
Act XLIII of 1949), and the rules made
thereunder been in force on the date on which
the said orders, decisions or directions,
notifications, proceedings, acts or things,
were made, given, issued, taken or done are
hereby declared to have been validly made,
given, issued, taken or done, as the case may
be, except to the extent to which the said
orders, decisions, directions, notifications,
proceedings, acts or things are repugnant to
the provisions of this Act.”
(1) [1954] S.C.R. 779.
65
It was held by this Court that this was
“a saving and validating provision and it
clearly intends to validate actions taken
under the relevant provisions of the earlier
Act which was invalid from the start. The
fact that s. 24 does not use the usual
phraseology that the notifications issued
under the earlier Act shall be deemed to have
been issued under the Act, does not alter the
position that the second part of the section
has and is intended to have the same effect.”
The contention that the impugned notification contravened
Art. 31(1) because of want of existence of an-antecedent law
depriving the citizen of his property was turned down with
the observation
“In our opinion, this argument is not well-
founded. If the Act is retrospective in
operation and s. 24 has been enacted for the
purpose of retrospectively validating actions
taken under the provisions of the earlier Act,
it must follow by the very retrospective
operation of the relevant provisions that at
the time when the impugned notification was
issued, these provisions were in existence.
That is the plain and obvious effect of the
retrospective operation of the statute.”
Reference was made to the cast of the United Provinces v.
Mst. Atiqa Begum(1), Piare Dusadh v. The King Emperor(2) and
also to the decision in Union of India v. Madan Gopal
Kabra(3) and it was finally said (at p. 766)
“……there is no doubt about the competence
of the Legislature to enact a law and make it
retrospective in operation in regard to topics
included within the relevant Schedules of the
Constitution.”
Reference may also be made to the case of Rai Ramkrishna
v.The State of Bihar(4).
All these decisions lay down that the power to legislate for
validating actions taken under statute which were not
sufficiently comprehensive for the purpose is only ancillary
or subsidiary to legislate on any subject within the
competence of the legislature and such Validating Acts
cannot be struck down merely because courts of law have
declared actions taken earlier to be invalid for want of
jurisdiction. Nor is there any reason to hold that in order
to validate action without legislative support the Validat-
ing Act must enact provisions to cure the defect for the
future
(1) [1940] F.C.R. 110. (2) [1944] F.C.R. 61.
(3) [1954] S.C.R. 541 at 544. (4) [1964] 1 S.C.R. 897.
66
and also provide that all actions taken or notifications
issued must be deemed to have been taken or issued under the
new provisions so as to give them full retrospective effect.
No doubt legislatures often resort to such practice but it
is not absolutely necessary that they should do so so as to
give full scope and effect to the Validating Acts. By way
of illustration reference may be made to the following Acts.
(1) The Professions Tax Limitation (Amendment and
Validation) ‘Act, 1949 where s. 3(i) provided that
“Notwithstanding anything to the contrary in
any other law for the time being in force,-
(i) no tax on circumstances and property
imposed before the commencement of this Act
under clause (ix) of sub-section (1) of
section 128 of the United Provinces
Municipalities Act, 1916, or, clause (b) of
section 108 of the United Provinces District
Boards Act, 1922, shall be deemed to be, or
ever to have been invalid merely on the ground
that the tax imposed exceeded the limit of Rs.
50/- per annum prescribed by the said Act, and
the validity of the imposition of any such tax
shall not be called in question in any Court;”
(2)The Hindu Marriages (Validation of Proceedings) Act, 1960
(Act 19 of 1960) was passed to obviate the short comings in
the Hindu Marriage Act pointed out by the Punjab High Court
in Janak Dulari v. Narain Das (A.I.R. 1959 Punjab 50).
There the High Court held that the court of an additional
Judge cannot be regarded as a principal court of civil
jurisdiction within the meaning of the Hindu Marriage Act
and that a District Judge to whom a petition under the Act
is presented cannot transfer it to an additional Judge for
trial. The object of the Validation Act was to validate all
proceedings taken and decrees and orders passed by any of
the Courts specified in cl. (2) exercising or purporting to
exercise jurisdiction under the Hindu Marriage Act. Section
2(1) ran as follows :-
“All proceedings taken and decrees and orders
passed before the commencement of this Act by
any of the Courts referred to in sub-section
(2) exercising or purporting to exercise
jurisdiction under the Hindu Marriage Act,
1955 shall, notwithstanding any judgment,
decree or order of any court, be deemed to be
as good and valid in law as if the court
exercising or purporting to, exercise such
jurisdiction had been a district court within
the meaning of the said Act.”
The courts referred to in sub-section (1) are : the court of
an additional Judge, additional district Judge, etc.
67
In our opinion the contentions raised about the invalidity
of the Amending Act on the ground that s. 3 thereof was not
made expressly retrospective or that it encroached upon the
domain of the judiciary by seeking to nullify judicial
decisions cannot be sustained. The American doctrine of
well-defined separation of legislative and judicial powers
has no application to India and it cannot be said that an
Indian Statute which seeks to validate invalid actions is
bad if the invalidity has already been pronounced upon by a
court of law.
In view of the decisions of the Judicial Committee, the
Federal Court and this Court referred to above, it must be
held that the absence of a provision in the Amending Act to
give retrospective operation to s. 3 of the Act does not
affect the validity of s. 4 as contended for. It was open
to Parliament to adopt either course, e.g. (a) to provide
expressly for the retrospective operation of s. 3, or, (b)
to lay down that no acquisition purporting to have been made
and no action taken before the Land Acquisition (Amendment
and Validation) Ordinance, 1967 shall be deemed to be
invalid or ever to have become invalid because inter alia of
the making of more than one report under s. 5-A or more than
one declaration under s. 6 of the Land Acquisition Act, not-
withstanding any judgment, decree or order to the contrary.
Parliament was competent to validate such actions and
transactions, its power in. that behalf being only
circumscribed by the appropriate entries in the Lists of the
Seventh Schedule and the fundamental rights setforth in Part
III of the Constitution. As shown above, there have been
instances where the latter course had been adopted by the
Indian Parliament in the past.
Section 4 of the Amending Act being within the legislative
competence of Parliament, the provisions thereof are binding
on all courts of law notwithstanding judgments, orders or
decrees to the contrary rendered or made in the past.
We find ourselves unable to accept the contention about the
violation of Art. 31(2) of the Amending Act. It is not
suggested that the Validating Act in express words enacts.
any law which directly affects compensation payable in
respect of the property acquired or lays down any principles
different from those which were already in the Land
Acquisition Act of 1894. After the amendment of the
Constitution in 1955 the question of adequacy of
compensation is not justiciable and it is enough if the law
provides that a person expropriated must be given
compensation for his property or lays down the principles
for the determination thereof. There is not a word about
“compensation” in s. 4 of the Validating Act. Indirectly
however, it would affect a person’s right to compensation,,
inasmuch as but for the Validating Act the notification
under s. 4 issued on 13th November 1959 could
68
not be resorted to for the purpose of making more than one
declaration under s. 6 of the Act. Schemes of the magnitude
of the plan for the development of Delhi or for the
establishment of an iron and steel plant did not have to be
considered in pre-Constitution days. The Land Acquisition
Act of 1894 contained sufficient measures to allow
acquisition of small parcels of property for the different
schemes of the extent and magnitude which had to be
considered in the past. Even then, the law with regard to
compensation did not remain static from the days of the Act
of 1870 to 1923. In the Act of 1894 the date of declaration
under Is. 6 was made to take the place of the date in s. 24
of the Act of 1870. Under the Act of 1870 the market value
of the land at the time of awarding compensation was the
criterion. The date for the assessment of compensation was
further shifted to the date of the notification under S. 4
only in 1923.
The Legilature might well have provided in the Act of 1894
that it would be open to the appropriate government after
issuing a notification under S. 4 to consider objections
raised under S. 5 with regard to different localities from
time to time enabling different reports to be made under S.
5-A with consequent adjustments in S. 6 providing for
declarations to be made as and when each report under s. 5-A
was considered. By the validation of actions taken under S.
6 more than once in respect of a single notification under
s. 4, the original scheme of acquisition is not altered.
The public purpose behind the notification under s. 4
remains the same. It is not as if a different public
purpose and acquisition of land for such purpose were being
interpolated by means of the Validating Act. The principle
of compensation remains the same under the Validating Act as
it did under the principal Act of 1894. Only the
shortcomings in the Act as to want of provision to enable
more than one declaration under S. 6 are being removed. In
our opinion, the Validating Act does not fall within the
mischief pointed out by this Court in various decisions
starting from the State of West Bengal v. Mrs. Bela Baner-
jee(1) :
Entry 42 in List III of the Seventh Schedule before its
amendment read
“Principles on which compensation for property
acquired or requisitioned for the purposes of
the Union or of a State or for any other
public purpose is to be determined, and the
forms and the manner in which such
compensation is to be given.”
In Mrs. Bela Banerjee’s case(1) s. 8 of the impugned West
Bengal Land Development and Planning Act 1948 provided that
the com-
(1) [1954] S.C.R. 558.
69
pensation to be awarded for acquisition of land was not to
exceed the market value thereof on December 31, 1946. This
provision was held to be arbitrary by this Court inasmuch as
it fixed the ceiling on compensation by reference to the
market value of the land on the above-mentioned date no
matter when and how long afterwards the acquisition took
place. Similarly in dismissing the appeal of the State in
State of Madras v. D. Namasivaya Mudaliar (1) where the
Madras Act XI of 1953 provided that compensation was payable
on the basis of the valuation of the land on April 28, 1947
together with some improvements made thereon up to the date
of notification under s. 4(1) of the Land Acquisition Act
because of the discovery of the presence of lignite in
certain taluks in 1947 and the announcement by Government by
a press note that it proposed to undertake legislation to
compel persons purchasing such lands after a date to be
prescribed in 1947, it was held that “a law which authorises
acquisition of land not for its true, value, but for value
frozen on some date anterior to the acquisition, on the
assumption that all appreciation in its value since that
date is attributable to purposes for which the State may use
the land at some time in future, must be regarded as
infringing the fundamental right” and “there was no true
relation between the acquisition of the land…. and the
fixation of compensation based on their value on the market
rate prevailing on April 28, 1947.” Referring to the
provision in the Land Acquisition Act for assessment of
compensation on the basis of the market value of the land
not on the date on which the interest of the owner was
extinguished under section 16 but to the date of the
notification under s. 4(1) it was observed that “any princi-
ple for determination of compensation denying to the owner
all increments in value between a fixed date and the date of
issue of the notifications under s. 4(1) must prima facie be
regarded as denying to him the true equivalent of the land
which is expropriated.
In our opinion, the Amending Act cannot be said to lay down
any principle which suffers from the vice of the Act struck
down in the above decisions. The date of valuation is that
of the issue of notification under s. 4(1)-a principle which
has held the field since 1923. It is true that the
underlying principle of the Act of 1894 was that all
increments due to the setting on foot of the acquisition
proceedings were to be ignored whereas due to the ever
spiralling of all prices all over India land values are
mounting up all the time in all the States, specially round
about big cities-an occurrence quite unconnected with the
issue of a notification under s. 4(1)-but it cannot be said
that because owners of land are to be deprived of all the
increments due to the latter phenomenon it must be held that
there is a Violation of Art. 31(2). Legislative competence
to acquire land under the provisions of
(1) [1964] 6 S.C.R. 936.
70
the Land Acquisition Act cannot be challenged because of
constant appreciation of land values all over the country
due to the prevalent abnormal inflation. There must be some
time lag between the start and conclusion of land
acquisition proceedings and in principle there is nothing
wrong in accepting the said start as the date for valuation.
Sections 4 and 23 of the Land Acquisition Act are protected
by Art. 31(5) (a) of the Constitution.. Only sections 5-A
and 6 of the Act have been amended. The amendments do not
alter the principle of compensation fixed by the Act nor
contravene Art. 31 of the Constitution in any way.
The Amending Act does not really derogate from the principle
that the valuation on the date of issue of notification
affords the criterion for determining compensation of all
lands to be acquired. It only keeps alive the said
notification for sustaining more than one declaration under
s. 6 to meet the exigencies of the situation where it was
not possible to make one comprehensive declaration under s.
6 and where the State has been obliged to validate actions
which could not be supported under the principal Act. It
cannot be said of the Validating Act that it was fixing an
arbitrary date for the valuation of the property which bore
no relation to the acquisition proceedings. At the same
time when the notification under s. 4 was issued on 13th
November 1959, the State had considered that a very large
area round about Delhi-would have to be acquired so that the
development of the city could proceed in an orderly manner
step by step not only ‘Lo meet the immediate needs of the
then. population of the city but with an eye to the ever-
increasing demands of the exploding population in all cities
in India and specially in its capital. It was before,
November 1959 that the State had to consider the,
acquisition of a large tract of land for the purposes of
development of Delhi but it was not possible to take up
simultaneously all schemes for the future development of the
city. It was also not practically possible to take up all
schemes in all directions at the same time. The resources
of the State were not adequate to take up the schemes for
improvement of the city by the acquisition of an area like
Ac. 34,000,00, at the same time keeping in, mind not only
the need of land for housing purposes but also for, other
purposes like education, industry and manufacture not to
speak of amenities for recreation, entertainment etc. Of
necessity,, the area under the proposed acquisition would
have to be carved into blocks and the development of one or
more blocks at a time could only be taken up in consonance
with the resources available. Even contiguous blocks could
be developed gradually and systematically. If a particular
area, say block ‘A’ was meant to provide lands for building
houses for residential purposes only a block contiguous
thereto, say block ‘B’ might be set apart for industrial
purposes. There may be nothing common between
71
Block A and Block B to require their simultaneous
development .although both the Blocks would form part of a
composite whole–to serve the needs of a growing city. Can
it be said that acquisition of lands for Block A and Block B
must be made simultaneously and is the law to be struck down
because it enables a declaration under s. 6 with respect to
Block B to be made some time after a similar declaration in
respect of Block A ? In such a case, it would be incongruous
to award compensation for lands acquired in Block B on a
basis different from that in respect of lands in Block A
covered by an earlier declaration under s. 6. The scope of
Art. 31(2) as amended was considered by this Court in P. V.
Mudaliar v. Deputy Collector(1). It was there, pointed out
that after the amendment “what is excluded from the courts’
jurisdiction is that the said law cannot be questioned on
the ground, that the compensation provided by that law is
not adequate;” and “if a law lays down principles which are
not relevant to the property acquired or to the value of the
property at or about the time it is acquired, it may be said
that they are not principles contemplated by Art. 31(2) of
the Constitution.” In that case it was also observed by this
Court that “in the context of continuous rise in land prices
from year to year depending upon abnormal circumstances it
cannot be said that fixation of average price of over five
years is not a principle for ascertaining the price of the
land in or about the date of acquisition.” The decision is
also an authority for the proposition that the omission of
one of the elements that should properly be taken into
account in fixing the compensation might result in the
inadequacy of compensation but such omission in itself did
not constitute fraud on power. it is also to be noted that
in this case this Court upheld the Land Acquisition (Madras
Amendment) Act, 1961 although the said Act substituted a new
clause for the first clause in s. 23 ( 1 ) of the Land
Acquisition Act. The substituted clause provided for pay-
ment of compensation on the basis of the market value of the
land at the date of the publication of the notification
under s. 4(1) or an amount equal to the average market value
of the. land during the five years immediately preceding
such date, whichever was less. It is significant that the
Act which was a postFourth Constitution Amendment Act, was
upheld although by its own terms and independently of the
Land Acquisition Act it provided for payment of compensation
on the basis of the market value of the land at the date of
the publication of the notification under s. 4(1). It may
therefore be inferred that in upholding the Land Acquisition
(Madras Amendment) Act, 1961, this Court was of the view
that the principle of fixing compensation on the basis of
the price prevailing on the date of the notification under
s. 4(1) of the Land Acquisition Act was a relevant
principle. In
(1) [1965] 1 S.C.R. 614.
72
the result the court turned down the contention about the
violation. of Art. 31(2) because of the modification of some
of the principles for assessing compensation laid down in s.
23 of the Act.
In the present case, there has been no variation of the law
formulated in s. 23 of the Act. As such, in our opinion,
there has been no violation of Art. 31(2) merely because the
actions already taken have been sought to be ‘validated.
Nor are we satisfied that there has been any colourable or
fraudulent exercise of legislative power.
With regard to the question as to discrimination violative
of Art. 14, it goes without saying that whenever an Amending
Act is passed, there is bound to be some difference in
treatment between transactions which have already taken
place and those which are to take place in the future. That
by itself will not attract the operation of Art. 14. Again,
even with respect to transactions which may be completed in
the future, a reasonable classification will not be struck
down as was held by this Court in Jalan Trading Co. v.
Mazdoor Union(1).
“If the classification is not patently
arbitrary, the Court will not rule it
discriminatory merely because it involves
hardship or inequality of burden. With a view
to secure a particular object a scheme may be
selected by the Legislature wisdom whereof may
be open to debate; it may even be demonstrated
that the scheme is not the best in the
circumstances and the choice of the
Legislature may be shown to be erroneous, but
unless the enactment fails to satisfy the dual
test of intelligible classification and
rationality of the relation with the object of
the law, it will not be subject to judicial
interference under Art. 14. Invalidity of
legislation is not established by merely
finding faults with the scheme adopted by the
Legislature to achieve the purpose it has in
view.”
Before scrutinising the provisions of the Amending Act, we
must examine the objects of the Act., They may be summed up
as follows :-
(a) To amend the Act for the future by empowering the making
of more than one declaration under s. 6.
(b) To validate completed acquisitions on the basis of more
than one declaration under that section.
(c) To authorise more than one declaration under the said
section in cases where there is already in existence a
notification under s. 4.
(1)[1967] 1 S.C.R. 15 at 36.
73
(d)To prescribe a time limit for future acquisitions as also
pending proceedings not yet completed; and
(e) To provide additional compensation by way of interest in
all cases where acquisition has not yet been completed and
where a declaration under s. 6 is issued more than three
years after the notification under s. 4.
There is nothing arbitrary or irrational about the said
objects. It is well known that in some cases there has
been unusual delay in the issue of declaration under s. 6
after a notification under s. 4. The Amending Act puts an
end to this harsh treatment by providing that in respect of
notifications under s. 4 made before the date of the
Ordinance i.e. 20th January 1967, a declaration under s’ 6
must be made within two years after that date. If such a
declaration is not made, then it will not be open to
Government to make use of the old s. 4 notification and the
State would be obliged to issue a fresh notification under
s. 4. The Act also limits the time within which a
declaration under s. 6 may be made when a notification under
s. 4 is issued after 20th January, 1967. This period is
limited to three years there having been no time limit in
the past. We are not impressed by the argument that a
person whose land may be covered by a notification under s.
4 issued more than one year before 20th January 1967 would
seemingly be treated differently from a person whose land
comes under the notification under s. 4 after that date.
The Legislature has sought to improve upon the existing
provisions of the Land Acquisition Act and there is no
discriminatory treatment which should be struck down as
violative of Art. 14. The Legislature in its wisdom thought
that some time limit should be fixed in respect of s. 4
notifications issued before 20th January, 1967 and that a
time limit should also be fixed for acquisition where such a
notification is issued after that date. No fault can be
found with the Legislature because it has provided for a
period of two years in one case and three years in the
other. As was pointed out in Jalan Trading Co. v. Mazdoors
Union(1).
“Equal protection of the laws is denied if in
achieving a certain object persons, objects or
transactions similarly circumstanced are
differently treated by law no rational
relation to the object sought to be achieved
by the law.”
It is not possible to say that because the legislature
thought of improving upon the Act of 1894 by prescribing
certain limits of time as from 20th January 1967 the
difference in treatment in cases covered by notification
before the said date and after the said date denies equal
protection of laws because the transactions are not
similarly circumstanced. Some of the notifications
(1) [1967] 1 S.C.R. 15.
LA Sup. C.I./68-6
74
issued under s. 4 must have been made even more than 3 years
before 20th January 1967 and such cases obviously could not
be treated in the same manner as notifications issued
after,that date. Art. 14 does not strike at a
differentiation caused by the enactment of a law between
transactions governed thereby and those which are not so
governed. As was pointed out by this Court in Hatisingh
Manufacturing Co. Ltd. v. Union of India(1).
“When Parliament enacts a law imposing a
liability as flowing from certain transactions
prospectively, it evidently makes a
distinction between those transactions which
are covered by the Act and those which are not
covered by the Act, because they were
completed before the date on which the Act was
enacted.”
With respect, the dictum can also be applied as between
cases where the transaction was in the course of completion
and those which had to be started after a particular date.
On the whole the Amending Act seeks to improve the
legislation which covered the field of acquisition of land.
The Legislature might have made more liberal provisions for
improvement but it is not for this court to strike down a
piece of legislation because the improvement falls short of
the expectation of the litigants.
With regard to the provision for payment of interest, in
addition to compensation or by way of additional
compensation no grievance can be made in that interest is
not allowed in respect of transactions which have been
already completed and compensation taken. The Legislature
felt that because there has been unreasonable delay in the
payment of compensation, interest should be, allowable where
the period of three years has already expired or may expire
between the date of s. 4 notification and the date of
declaration under s. 6. No grievance can be made because
interest is denied to persons who have already taken the
compensation. Even here the classification is ‘not
unreasonable and cannot be said to be unrelated to the
object of the Act.
As regards violation of Art.14, in the case of Sohan Lal who
filed Writ Petition No. 85 of 1967 the learned solicitor
drew our attention to a few facts which are not clearly
brought out in the affidavit in opposition and will be
referred to presently. Here the attack is on an executive
act, namely, the differential treatment meted out to 16
colonies whose lands were covered by the notification dated
13th November, 1959 but in respect of which de-notification
orders were issued subsequently. It would appear that some
of the letters which were received by Sohan Lal did not
bring out the full facts and the policy underlying the ap-
parent discrimination in this case. It is pointed out in
paragraph 36 of the affidavit in opposition:
(1) [1960] 3 S.C.R. 528 at 543.
75
“After the issue of the notification
No.F.15(111)/59LSG dated 13-11-1959, it was
decided by the Government that the colonies in
respect of which the layout and service plans
had been sanction before the date of
notification viz., 13-11-1959, may be released
from the purview of acquisition………..The
petitioner’s colony known as Kanwal Park could
not be released from the purview of
acquisition because in its case only the
layout plans had been sanctioned and not the
service plans.”
This policy is corroborated by the records of the Land and
Housing Department, Delhi Administration which were made
available to us at the hearing. It appears from that record
that after the notification of 13th November 1959 private
owners of land who wanted to lay out colonies and had taken
steps in respect thereof by making some arrangement and
spent money–threon had approached the Administration for
release of their lands from the notification and a proposal
for de-notification of the colonies was considered at a high
level. It appears that a meeting ‘was held on 29th June
1960 at which were present a number of persons including the
Chief Secretary, Vice Chairman, Delhi Development Authority,
Engineer-Member, Architect, Town Planning Organisation,
Deputy Commissioner, Delhi Municipal Corporation, Architects
of Delhi Municipal Corporation, Secretary, Local Self
Government and Under Secretary to the State Government. The
records show that the case of each notified colony was
considered separately and it was felt that cases in which
the layout and service plans had been finally approved in
all respects before 13th November, 1959 should be
recommended for de-notification. On 1st of July, 1960, the
Commission, Delhi Municipal Corporation went into the matter
and recommended that
“All those colonies in respect of which both
lay-out plans and service plans h
ad been
approved by the Delhi Development Provisional
Authority the Delhi Development, Authority or
the Delhi Municipal Corporation may be de-
notified irrespective of whether security was
demanded or not and whether the time limit for
completion of development was imposed or not
and irrespective of whether security has been
paid or not and’ whether development has been
completed or not.”
According to this recommendation, 16 colonies named therein’
fell in this category. Sohan Lal’s colony was not one of
those sixteen.
It is unfortunate that the petitioner who submitted the lay
out plan of the colony as early as June 18, 1956 had not the
service plan approved before 13th November, 1959. It is
clear from
76
the annexures to the petition that the details of the lay-
out of the colony were submitted on 30th August, 1956. The
petitioner submitted service plans on 15th September, 1959.
There was nothing wrong with the plans intrinsically except
that there were more than one small pocket of land within
the colony to which the petitioner could not prove his,
ownership statisfactorily. Mr. Agarwala appearing for the
petitioner submitted that the only difficulty was that in
respect of the small pockets they were owned not by the
petitioner alone but in co-ownership with others and the
petitioner subsequently excluded these pockets from the pur-
view of his lay-out plan: but this was done only on March
19, 1961, The petitioner’s subsequent efforts to have his
colony denotified were of no avail even though he had
excluded these pockets on 20th January, 1960. On these
facts, we cannot hold that the petitioner was subjected to
any discrimination. There was a policy behind the de-
notification and it has not been suggested that the policy
was vitiated by any malafides on the part of the
authorities.
All the points urged by the petitioners, therefore, fail and
the petitions will stand dismissed. There Will be no order
as to costs.
Shelat J.-The facts in these five writ petitions have been
sufficiently set out by our learned brother Mitter J.in his
judgment and therefore need not be repeated here. Though
they differ in some particulars, the contentions raised by
Counsel for the petitioners are common except the additional
contentions raised by Mr. Mani in Writ Petition 223 of 1966
and by Mr. Agarwala in Writ Petition 85 of 1967.
These writ petition arise as a result of and challenge inter
alia the validity of the following notifications. No
November 13, 1959 the Chief Commissioner, Delhi, issued a
notification under sec. 4 of the Land Acquisition Act 1, of
1894 (hereafter referred to as the Principal Act) notifying
that land measuring 34070 acres marked in blocks A to T and
X in the map enclosed there with was required by the Delhi
Administration for the planned development of Delhi. In
pursuance of that notification, the Delhi Administration
issued sec. 6 notification dated June 14, 1961 in respect of
the land situate in village Kilkori measuring 97 bighas 14
biswas only from out of the said notified area. The
notification directed the Collector to take order for its
acquisition under s. 7 of the Act. The Collector thereafter
made his award on August 31, 1961 in respect of the said 97
bighas of land at Rs. 2500 a bigha, the total amount
including the solatium awarded being Rs. 2,80,887.50.
Nothing thereafter was done till March 18; 1966 when another
notification under sec. 6 was issued in
77
respect of 1752.2 bighas of land situated in Mandawali
Fazilpur, Khuraj Khas and Shakarpur Khas.
On February 9, 1966 this Court delivered its judgment in M.
P. State v. V. P. Sharma (1) where facts were similar to the
facts in the present cases and where the land was required
for the erection of a steel plant in public sector. In that
case the notification under sec. 4 covering land in eleven
villages was issued in May 1949. This was followed by
several notifications under sec. 6, the last of them being
in. 1960. After examining the provisions of secs. 4, 5A and
6 of the Act, this Court declared as follows :-
“At the stage of sec. 4, the land is not
particularised but only the locality is
mentioned; at the stage of s. 6 the land in
the locality is. particularised and thereafter
the notification under s. 4(1) having served
its purpose exhausts itself. The sequence of
events from a notification of the intention to
acquire under s. 4 to the declaration under
sec. 6, leads to the conclusion that once a
declaration under s. 6 particularising the
area is issued, the remaining non-
particularised area in the notification under
s. 4(1) stands automatically released. The
intention of the legislature was that one
notification under s. 4(1) should be followed
by survey under. s. 4(2), objections under s..
5A heard, and thereafter, one declaration
under sec. 6 issued. If the Government
requires more land in that locality, there is
nothing to prevent it from issuing another
notification under s. 4(1) making a further
survey if necessary, hearing objections and
then making another declaration under s. 6,
whereas there is likely to be prejudice to the
owner of the land if there is great delay
between the notifications under s. 4(1) and s.
6.”
One of the contentions urged in that case was that where the
land is required for a small project and the area is not
large the government may be able to make up its mind once
for all what land it needs but where, land is required for a
large project requiring a large area of land, government may
not be able to make up its mind at once. This contention
was rejected on the ground that even if it be so there is
nothing to prevent the government from issuing another
notification under sec. 4 followed by a notification under
sec. 6, that the government’s power to acquire land in a
particular locality is not exhausted by issuing one
notification under sec. 4(1) followed by a notification
under s.6 and that it can proceed to do so by a fresh
notification under Section 4(1) and a fresh declaration
under sec. 6 and that such a procedure would be fair to all
concerned.
(1) [1966] 3 S.C.R. 557.
78
Sarkar J. who delivered a separate judgment also repelled
the contention by observing that he could not
“imagine a government which has vast
resources not being able to make a complete
plan of its project, at a time. Indeed, I
think, when a plan is made it is a complete
plan. I should suppose that before the
government starts acquisition proceedings by
the issue of a notification under sec. 4 it
has made its plan for otherwise it cannot
state in the notification, as it has to do,
that the land is likely to be needed. Even if
it had not then completed its plan it would
have enough time before the making of a
declaration under section 6 to do so. I think
therefore that the difficulty of the
government, even if there is one, does not
lead to the conclusion that the Act
contemplates the making of a number of dec-
larations under sec. 6.”
In the view taken Sharma’s case(1) sec. 6 notification dated
March 18, 1966 was invalid as sec. 4 notification dated Nov-
ember 13, 1959 on which it was founded ceased to be
efficacious and became exhausted after sec. 6 notification
dated June 14, 1961 wag issued and the rest of the land not
covered by it became as a result released from acquisition.
Depending on the declaration of law made in this decision
the petitioners filed these writ petition in April 1966 and
thereafter.
Realising that if the view taken in Sharma’s case(1) were to
stand the government would have to issue a fresh sec. 4
notification and would have to pay compensation on the basis
of the market value of the land on the date of such new
notification instead of on November 13, 1959, the government
promulgated an Ordinance dated January 20, 1967 called the
Land Acquisition (Amendment and Validation) Ordinance 1 of
1967. It is not necessary to set out the provisions of the
Ordinance as it has been substituted by Land Acquisition
(Amendment and Validation) Act, 13 of 1967 (hereafter
referred to as the Amendment Act) passed on April 12, 1967.
There can be no manner of doubt that the Ordinance and the
Amendment Act were enacted with the object of setting at
naught the decision in Sharma’s case(1).
Section 2 of the Amendment Act substituted the following
words in sec. 5A (2), viz.,
“Submit the case for the decision of an
appropriate government together with the
record of the proceedings held by him and a
report containing his recommendations on the
objections.” by the following words viz.,
(1) [1663] S.C.R. 557.
79
“either make a report in respect of the land
which has been notified under sec. 4 sub-sec.
(1) or make different reports in respect of
different parcels of such land.”
Section 3 added the following words in sec. 6(1) after the
words ‘certify its orders’, viz.,
“and different declaration may be made from
time to time in respect of different parcels
of any land covered by the same notification
under sec. 4 sub-sec. (1) irrespective of
whether one report or different reports has or
have been made (wherever required) under sec.
5A sub-section (2).”
Section 3 also substituted the existing proviso to sec. 6(1)
by the following :-
” provided that no declaration in respect of
any particular land covered by a notification
under sec. 4(1) published after the
commencement of the said ordinance (after
20-1-1967) shall be made after the expiry of
three years from the date of such
publication.”
Sec. 4(1) of the Amendment Act is a validating provision.
By clause (a) it provides that no acquisition purporting to
have been made before the commencement of the said Ordinance
(i.e., before 20-1-67) and no action taken or thing done
including any notification published in connection with such
acquisition shall be deemed to be invalid or ever to have
become invalid on the ground that
(i)one or more collectors have performed
the functions of collector in respect of the
entire land covered by s. 4 notification.
(ii) one or more reports have been made under
s.5A(2) whether in respect of the entire land
or different parcels thereof covered by the
same notification, and
(iii) that more than one declaration are made
under sec . 6 in respect of different parcels
of land covered by the same notification under
sec. 4(1).
Clause (b) of sec. 4(1) provides that any acquisition in
pursuance ,of a sec. 4 notification published before 20-1-67
may be made after that date and no such acquisition and no
action taken or thing done including any order, agreement or
notification made or published whether before or after 20-1-
67 in connection with such acquisition shall be deemed to be
invalid merely on the said grounds mentioned in clause (a).
Sub-sec. (2) of, sec. 4. provides that no declaration under
sec. 6 shall be made in respect of land covered by sec. 4
notification published before 20-1-67 after the expiry of
two years from that
80
date, that is, 20-1-69. Sec. 4(3) provides for payment of
interest in the circumstances set out therein.
The result of the Amendment Act clearly is that an area of
land notified under sec. 4(1) can be acquired piecemeal at
any time the only restriction being that under sec. 3 in the
case of land covered by a sec. 4 notification published
after 20-1-67, sec. 6 notification can be issued within 3
years from the date of such notification and in respect of
land notified under sec. 4(.1) before 20-1-67 within two
years after 20-1-67. The direct consequence of the
Amendment Act is that the unitary character of acquisition
by a single inquiry, a single report,’ a single declaration
and a single award under the Principal Act is done away
with. The government can freeze an area by issuing a sec. 4
notification and can, subject to the limitations in sec. 3
and sec. 4 (2) of the Amendment Act, go on acquiring parcels
of such area at its convenience irrespective of the time
when it makes up its mind to acquire and pay, compensation
on the basis of the ‘Value at the date of sec. 4
notification. In the case of land notified under sec. 4(1)
after 20-1-67 the owner is deprived of appreciation-in the
value of his land during three years by reason of limitation
prescribed in sec. 3 but in the case of land notified before
20-1-67 such deprivation’ can be for an uncertain period
from the date of sec. 4 notification up to two years from
20-1-67 i.e., up to 20-1-69 depending upon when its
acquisition is made. As has happened in the instant cases
the entire area of 34070 acres was frozen for the purpose of
computation of compensation as from Nov. 13, 1959 portons of
that area were acquired as late as 1966 and the remaining
area can still be acquired until 20-1 769, each owner being
thus deprived of the appreciation in value of his land
depending upon when during all this long period the
government decides to acquire it. Thus, if the land is
notified in 1959 and is acquired in 1960, the loss of
appreciation in value is only of one year. But the owner of
another plot even if it is contiguous to it, if the
government decides to acquire it in 1969, would be deprived
of the appreciation in value which has taken place right
from 1959 to 1969. The entire area is in the meantime
frozen both for the purpose of compensation and as pointed
out in Sharma’s. Case(1) from its full beneficial enjoyment,
the owner not knowing until government chooses to make sec.
6 declaration Whether it will ultimately be acquired or not.
Under the Principal Act as construed in Sharma’s Case(1)
once a sec. 6 notification is issued sec., 4 notification
would become exhausted and the land not declared as needed
thereunder would be relieved from acquisition. If
government then desires to acquire any land in addition to.
the one so declared it would have to be notified a fresh and
the government would be obliged to pay compen-
(1)[1966] 3 S.C.R. 557.
81
sation at the market rate prevailing on such date. The
practical effect of the Amendment Act is that by keeping
alive sec. 4 notification and by declaring the declarations
made after the first declaration valid, the legislature
dated back the basis of compensation which would have been,
put for this validation, the rate prevailing at the date of
sec. 4 notification howsoever belatedcessary. The real
purpose of enacting sec.4 is thus to enable government to
freeze an unlimited area by first notifying it under sec. 4
and then to acquire bit by bit and pay compensation at the
rate prevailing at the date of sec. 4 notification-
howsoever belatedly it may choose to acquire such bits,
provided it does so before 20-1-69 where the land is
notified before 20-1-67 and before the expiry of three years
where s. 4 notification is issued after 20-1-67 and thus
avoid compensating the appreciation in value in the meantime
to which the owner would have been entitled to. Though in
form the Amendment Act purports to validate acquisitions in-
cluding orders and declarations made therefor, the real
purpose of enacting the Amendment Act is to, avoid having
otherwise to compensate for the appreciation in the land
value during the intervening period. It is a well-settled
principle that in determining the constitutionality of a
provision impugned, on the ground of its being. an invasion
on a fundamental right the court must weigh not its form
which may apparently look innocuous but its real effect and
impact on such fundamental right. (cf. Re Kerala Education
Bill(1); Gajapati Deo v. State of Orissa (2)
It will be seen that. secs. 2 and 3 which enable piecemeal
and multiple inquiries and reports of a Collector or
Collectors under s, 5A. diverse declarations, and awards in
respect of different ‘Parcels of land covered by sec. 4
notification are prospective. It is only sec. 4 which is
made retrospective. But it merely seeks to nullify the
decision in Sharma’s Case(3) and purports to keep alive sec.
4 notifications which would have otherwise lost their
efficacy and validates acquisitions including orders and
see. 6 declarations purported to have been made on the basis
of such sec. 4 notifications. Section 4, however, does not
contain any provision retrospectively amending sec. 4 or
sec. 5A or sec. 6 and merely seeks to revitalise sec. 4
notifications already exhausted. The section does not also
provide that an acquisition or an order or declaration under
sec. 6 made on the basis of such exhausted notification will
be deemed to have been made or issued under secs. 2 and 3 of
the Amendment Act and as if the Amendment Act was in force
at that date as, is usually done in such validating Acts. A
notification under sec. 4 having exhausted itself after a
declaration under sec. 6 in respect of a part of the land
covered by it and the rest of the land being relieved from
acquisition,
(1) [1959] S.C.R. 995. (2) [1953] S.C.R. 357.
(3) [1966] 3 S.C.R. 557.
82
there would be prima facie no basis for a sec. 6 declaration
or acquisition unless such notification is retrospectively
validated by a supporting amendment of sec. 4 of the
Principal Act or by making secs. 2 and 3 of the Amendment
Act retrospective. and by a fiction deeming it to have been
made under such amending provision.
Counsel for the petitioners raised the following conten-
tions:–
(1) that Act 13 of 1967 does not revive sec. 4 notification
dated November 13, 1959 which became exhausted after the
first sec. 6 declaration in 1961 was made and therefore no
acquisition in respect of the rest of the land could be made
without a fresh sec. 4 notification. The contention was
that secs. 2 and 3 being prospective they did not
resuscitate the sec. 4 notification though subsequent
acquisitions including orders and declarations under sec. 6
are validated and that such validation has no efficacy as
there would be no basis by way of a sec. 4 notification for
such acquisition or order or declaration.
(2) that Act 13 of 1967 is in derogation of the requirements
of Art. 31(2) as it purports to authorise acquisition
without a fresh sec. 4 notification thereby allowing
compensation to be paid on the basis of an exhausted sec. 4
notification and on the value of the land prevailing on the
date of such exhausted notification.
(3) that the Amendment Act is in violation of Art. 14 in
that
(a) where a sec. 4 notification is made before 20-1-1967,
sec. 6 declaration can be made within 2 years from the said
date, i.e., on or before 20-1-69. But where the land is
notified after 20-1-67 sec. 6 declaration would have to be
made within 3 years from the date of such notification. In
the former case a much longer period is provided for a sec.
6 declaration than in the latter case;
(b) where a sec. 4 notification is made after 20-1-67
compensation would be fixed on the basis of the value on
that date but where a sec. 4 notification is made before 20-
1-67 compensation would be on the basis of the value on the
date of the exhausted notification howsoever long a period
has elapsed since such notification;
(c)if compensation has not been paid before 20-1-67 interest
has to be paid on the compensation amount, but if compensa-
tion has been paid before 20-1-67 no interest is payable
though acquisition in both the cases springs from the same
sec. 4 notification;
83
(d)in the case of sec. 4 notification issued after 20-1-67
if Sec. 6 declaration is not made within three years a fresh
sec. 4notification is necessary and compensation would be on
the basis of the value on the date of such fresh
notification but where a s. 4 notification is issued before
20-1-67 there is no defined period and sec. 6 declaration
can be made until 20-1-69. Therefore the owner gets
compensation on the value at the date of s. 4 notification
howsoever long the intervening period may be. A person
affected by see. 4 notification issued after 20-1-67 is thus
differently treated than the one who is affected by such a
notification issued’ before 20-1-67. In Writ Petition No. 85
of 1967 an additional point was raised, viz., that though 16
colonies in village Kilkori were denotified under s. 48, the
land of the petitioner though, situate within the same
notified area was not denotified thus.wrongly discriminating
him. In Writ Petition No. 223 of 1966,Mr. Mani contended
that the Amendment Act merely seeks to reverse the decision
of this Court, that the Act is not a legislative but a
judicial act and that though the Constitution has not
brought about separation of powers nonetheless it does not
confer unlimited powers on the legislature to encroach upon
the judicial power. In other words, the legislature seeks to
control the courts’function by requiring of them a
construction of law according to its views. The legislative
action cannot be made to retroact upon past transactions and
controversies and reverse decisions which the courts in
exercise of their undoubted authority have made,.for, that
would mean not only exercise of a judicial function but in
effect to sit as a court of review to which the past
transactions and controversies are referred to. The question
as formulated by him is whether a statute which simply
validates acts and orders pronounced upon by a court as
invalid is sustainable without a retrospective law providing
that such acts and orders are deemed to have been made under
the validating Act and as, if such validating Act was in
existence at the date of such acts and orders.
On the question whether the Amendment Act is in derogation
of the requirements of Art. 31(2), the contention of the
Solicitor-General was that it is not the law contemplated by
Art.31(2) as it merely amends ss. 5A and 6 of the Principal
Act and does not touch either s. 4 or s. 23 which deal with
compensation,.that it amends only the procedural provisions
and that sec. 4 thereof merely validates acquisitions
including orders and notifications purported to have been
made or passed to get over the difficulty create by Sharma’s
Case(1).The impugned Act does not frankly deal with
compensation.But as already stated it is not the form of a
statute under
(1) [19661 3 S.C.R. 557.
84
challenge which matters but its substance, and the direct
impact it has on the constitutional requirements. Though
sees. 2 and 3 amend ss. 5A and 6 of the Principal Act
enabling multiple inquiries, reports and declarations in
respect of different parcels of land notified under S. 4,
the validating provisions of s. 4 have a direct, impact on
the question of compensation payable under the Act. Where a
sec. 4 notification has been issued at any time before 20-1-
67, as has happened in the instant cases, a large area can
be notified under sec. 4, say, in 1959, and yet sec. 6
declarations can be made by reason of s. 4 of the impugned
Act at different times and as late as 1969. Yet, the
compensation would be on the value in 1959 irrespective of
the fact that such value has appreciated in the meantime due
to the general spiralling of prices and not as a consequence
of its having been notified under sec. 4. It is manifest
that but for the validating provisions of S. 4 of the
Amendment Act government would have had either to proceed
with the acquisition of the whole of the notified land or to
proceed with part of it and thus exhaust the sec. 4
notification and release the rest of the land-from
acquisition. If further land-is subsequently needed a fresh
notification under s. 4 would have-been-necessary and
compensation would have to be paid on the basis of the value
on that date. The impugned Act enables government to
acquire the land once it is notified under sec. 4 in
different parcels and if the notification is of a date prior
to 20-1-67 pay the same compensation depriving the owner of
the appreciation of value during the intervening period.
Such appreciation would have had to be compensated for but
for sec. 4 of the impugned Act-. Each parcel of land in an
area notified under sec. 4 would thus be dealt with
differently depending on at what point of time it is
acquired. A piece of land would fetch compensation at X
amount even though its market value has doubled by the time
sec. 6 declaration in respect of it is made. Another piece
of the very same land would be awarded the same compensation
even if the appreciation “in its value is four-fold only
because government can now acquire it at a subsequent date.
The deprivation of the appreciated value to different owners
or to the same owner if both the parcels of land belong to
the same would vary depending upon when government chooses
to acquire each of such parcels. Therefore, from the mere
fact that the impugned Act does not amend sec. 4 or sec. 23
it is not possible to say that it is not an Act dealing with
or affecting compensation. Besides, by amending sees. 5A
and 6 and validating acquisitions, orders and declarations
the Amendment Act brings about changes of a fundamental
character in the Act by converting the unitary character of
an acquisition into a diversified one, in that instead of
one inquiry and one report by the same officer,. one
declaration under sec. 6 and one award, it permits several
inquiries and several reports by different officers, several
declarations and even
85
several awards thus altering the very structure of the
Principal Act. It is thus impossible to say that the
impugned Act is not the law of acquisition contemplated by
Art. 31(2).,
It was, however, contended that even so, (1) the impugned
Act does not alter the principle in s. 23 of the Act that
compensation is to be fixed on the basis of market value at
the date of s. 4 notification and that such mode of
compensation is based on a long standing principle that the
owner is not entitled to any increase in value as a result
of the land having, been notified; and (2) that the basis of
compensation emerging from the Amendment Act has a bearing
on the adequacy of compensation and hence the court is
barred under the amended Art. 31(2) from making any
scrutiny.
The principle on which compensation is to be ascertained
has., undergone changes from time to time. In the Act of
1870, s. 24 provided that it should be fixed on the basis of
the value at the time of paying compensation. That was
changed in the Act of 1894 under which the date of s. 6
notification was made,.the crucial date for ascertaining
compensation. This was changed in 1923 when the market
value on the date of s. 4 notification was made the measure
of compensation. This was done as s. 5A was then introduced
for the first time in the Act. It was felt that the
insertion of s. 5A would create, a time. gap between the
notification under s. 4 and the actual acquisition. The
date of s. 4 notification was accepted as the crucial date
on the principle that in calculating compensation it was
fair to exclude appreciation due, to the land having been
notified for a scheme for which ‘it was sought to be
acquired. The, principle on which appreciation in value
after the issuance of s. 4 notification was. excluded is no
longer valid or in accord with the present day realities for
it is a notorious fact that prices of properties have, been
continuously rising for reasons into which it is neither ne-
cessary nor relevant to go into. The principle excluding
appreciation as a result of s. 4 notification has been there
for a long time. But the argument that s. 23 is not altered
by the Amendment Act does not lead us any further, for, the
inquiry is what is the impact of the impugned Act on the
question of compensation payable to the expropriated owner.-
If the impugned Act had not nullified the decision in
Sharma’s Case(1) and had not ruled that s. 4 notification
would not become exhausted, fresh notification under s. 4
Would have become necessary and higher compensation would
have become payable than now. The fact that neither s. 4
nor s. 23 is altered therefore does not make any difference.
(1) [1966] 3 S.C.R. 557.
86
The impugned Act being a legislation after the 4th Consti-
tution amendment of 1955 the question as to the adequacy of
compensation is no longer amenable to judicial scrutiny but
the amendment of Art. 31(2) in 1955 has not affected the
constitutional requirement that no property can be
compulsorily acquired except under a law providing for
compensation or which provides principles fixing such
compensation. As to what the term “compensation” in Art. 31
means has been the subject-matter of several decisions of
this Court and the term has as a result acquired a well
settled interpretation. In Bela Banerjee’s Case(1)
Patanjali Sastri C.J. in repelling the contention that
compensation ‘in Entry 42 of List III could not mean full
cash equivalent laid stress on the distinction between the
word “compensation’ in Art. 31 and the said Entry and the
words “the acquisition of property on just terms” in s. 51
(XXXI) of the Australian Constitution Act and held that
compensation meant just equivalent and the principles which
should govern the determination of compensation amount to be
given to the expropriated owner must ensure that what is
determined must be such compensation, i.e., just equivalent.
In striking down the proviso to s. 8 of the West Bengal Land
Development and Planning Act, XXI of 1948 he observed that
the fixing of an anterior date which has no relation to the
value of the land when it is acquired, may be many years
later, cannot but be regarded as arbitrary. Similarly in
Namasivaya Mudaliar’s Case (2) this Court held, following
Bela Banerjee’s Case(1), that any principle for
determination of compensation denying the owner all
increments in’ value between a fixed date and the date of s.
4 notification must be regarded as denying to the owner the
true equivalent of the land which is ,expropriated and that
it is for the State to show that fixation of compensation on
the market value on an anterior date does not constitute
violation of the constitutional guarantee. This decision
was in respect of a law before the 1955 amendment and the
court expressed no opinion on the question whether it was
possible by enacting legislation after the 1955 amendment to
provide that compensation may be fixed on the basis of value
prevailing on a certain anterior date. (cf. Jeejeebhai v.
Assist. Collector(3).
It was thus well settled before the amendment of Art. 31(2)
in 1955 that there could not be a valid acquisition unless
the law authorising it provided. compensation, i.e., just
equivalent or principles fixing such compensation, i.e.,
just equivalent of what the owner is deprived of., The
question as to the impact of the 1955 amendment of Art.
31(2) on this principle arose in
(1) [1954] S.C.R. 558. at p. 563-64.
(3) [1965] 1 S.C.R. 636.
(2) [1964] 6 S.C.R. 936.
87
P. Vajravelu Mudaliar v. Deputy Collector(1). This decision
laid down the following propositions :-
(i) whether the principles laid down in an impugned Act take
into account all the elements to make up the true value of
the property and exclude matters which are to be included is
a justiciable issue;
(ii) that the law fixing compensation or laying down princi-
ples governing its fixation cannot be questioned on the
ground of inadequacy;
(iii)that the connotation of “compensation” and the question
of justiciability are distinct concepts and should be kept
apart while considering the validity of the impugned
provision;
(iv) that the fact that the amended Article uses the same
words, viz., “compensation” and “principles” -shows that
Parliament used them in the sense in which they were
construed by this Court, and
(v) that the legislature must provide for a just equivalent
or lay down principles fixing such just equivalent and if
that is done, such a law cannot be questioned on the ground
of inadequacy of compensation.
As to how and in what manner the question of adequacy would
arise was illustrated by giving various examples. Article
31(2) as amended means therefore that if the impugned Act
either fixes just equivalent as compensation or lays down
principles for fixing such just equivalent it cannot be
impeached on the ground that such compensation is inadequate
or that when working out those principles the resultant
compensation is inadequate. But this does not mean that the
amendment permitted the legislature, to fix inadequate
compensation or to lay down principles fixing compensation
which is not just equivalent. Such a theory attributes an
intention to the legislature to enact a law in terms of.
contradiction, for, compensation which, is not just
equivalent is no compensation as interpreted by this Court
and understood when Art. 31(2) was amended and giving any
such meaning to that Article would be contrary to the well
settled principle of construction that where the legislature
uses in an Act a legal term which has received judicial
interpretation it must be assumed that it is used in the
sense in which it has been judicially interpreted unless a’
contrary intention appears. At p. 629 of the report it has
clearly been laid down that
“If the legislature though ex facie purports
to provide for compensation or indicates the
principles for ascertaining the same but in
effect and substance takes
(1) [1965] 1 S.C.R. 614.
88
away a property without paying compensation
for it, it will be exercising power which it
does not possess. If the legislature makes a
law for acquiring a property by ,providing for
an illusory compensation or by indicating the
principles for ascertaining the compensation
which do not relate to the property acquired
or to the value of such property at or within
a reasonable proximity Of the date of
acquisition or the principles are so designed
and so arbitrary that they do not provide for
compensation at all one can easily hold that
the legislature made the law in fraud of its
powers.”
Following this decision this Court held in the Union of
India v. Metal Corporation of India(1) that the principles
laid down in the impugned Act were not in accord with Art.
31(2) and that an acquisition law “to justify itself has to
provide for the payment of a just equivalent to the property
acquired or lay down principles which are not arbitrary but
which are relevant to the fixation of compensation. It is
only when the principles stand this test that the adequacy
of the resultant compensation falls outside the judicial
scrutiny under the second limb of Art. 31(2).”
It is true that in Vajravelu’s Case(2) it was held that in
the context of the continuous rise in land prices, fixation
of an average price over 5 years amounted to ascertaining-
the price of the land in or about the date of acquisition
and that omission of one of the elements which should
properly be taken into account for fixing compensation
though resulting in inadequacy of compensation would not
constitute fraud on power. But there is no analogy between
the provisions of the impugned Act in that case and’ the
instant cases. Though that Act varied the method of
ascertainment of compensation provided by s. 23 of the
Principal Act it provided for taking the average of prices
prevailing during the 5 years in or about the date of
acquisition. By striking the average of prices during those
5 years the Act actually took into account the appreciation
in value during the 5 years preceding the acquisition for
fixing the compensation. The position in the instant cases
is quite different. The impugned Act does not provide for
any such average price as was done in Vajravelu’s Case.(2)
Though s. 4 apparently validates’ acquisitions, orders and
notifications made on the basis of s. 4 notification issued
before 20-1-67, in effect and substance it seeks to treat
such a notification under s. 4 which had lost its efficacy
and had become exhausted where s. 6 declaration has been
made
(1) [1967] 1 S.C.R. 255,
(2) [1965] 1 S.C.R. 614.
89
for a part of the land covered by such s. 4 notification as
still outstanding. This is sought to be done without any
legislative provision in the impugned Act revitalising the
notification which had become dead and inefficacious. Such
a thing could not be done by merely validating acquisitions,
orders and declarations without revitalising by some
provision the notifications under s. 4 which had become
exhausted and on which such acquisitions including orders
and declarations are founded. Nor could it validate
inquiries and reports under s. 5A and declarations under s.
6, all of which are made on the basis of a notification
which was no longer alive except by retrospectively amending
s. 4 and declaring such s. 4 notification as having been
made under such amended s. 4. Not having so done, the direct
result of the validating provisions of s. 4 of the impugned
Act is to fix compensation on the basis of the market value
existing on the date of s. 4 notification which had
exhausted itself. By validating the acquisitions, orders
and declarations made on the basis of such an exhausted
notification the impugned Act saves government from having
to issue a fresh s. 4 notification and having to pay
compensation calculated on the market value as on the date
of such fresh notification and depriving the expropriated
owner the benefit of the appreciated value in the meantime.
The real object of s. 4 of the impugned Act is thus to save
the State from having to compensate for such appreciation
under the device of validating all that is done under an
exhausted s. 4 notification and thus in reality fixing an
anterior date, i.e., the date of such a dead s.4
notification for fixing the compensation. We apprehend that
s. 4 of the impugned Act suffers from a two-told vice :
(i) that it purports to validate acquisitions, orders and
notifications without resuscitating the notification under
s. 4 by any legislative provision on the basis of which
alone the validated acquisitions, orders and declarations
can properly be sustained and (2) that its provisions are in
derogation of Art. 31(2) as interpreted by this Court by
fixing compensation on the basis of value on the date of
notifications under s. 4 which had become exhausted and for
keeping them alive no legislative provision is to be found
in the impugned Act. It is therefore not possible to agree
with the view that the purpose of s. 4 is to fill in the
lacuna pointed out in Sharma’s Case(1) nor with the view
that it raises a question of adequacy of compensation. The
section under the guise of validating the acquisitions,
orders and notifications camouflages the real object of
enabling acquisitions by paying compensation on the basis of
values frozen by notifications under s. 4 which by part
acquisitions thereunder had lost their efficacy and
therefore required the Test of the land to be notified
afresh and paying compensation on the date of such fresh
notifications.
(1) [1966] 3 S.C.R. 557.
L4Sup.C.I/68-7
90
In this view, it is not necessary to go into the other
questions raised by the petitioners and we refrain from
expressing any opinion on them. We would declare s. 4 as
invalid and allow the petitions with costs.
ORDER
In accordance with the opinion of the majority the petitions
are dismissed. No order as to costs.
G.C.
91