RAl\1 NATH & ORS. v. UNION OF INDIA

A RAl\1 NATH & ORS. v.·

UNION OF INDIA April 25, 1984 B [D.A. DrsA1, AMARENDRA NATH SEN AND R.B. M1sRA, n:1 i ' · C1Jnstitution of Irtdia:_Art. 31-B-Scope of-Whether protection UtZder Art. 31-B to Acts inserted in the Ninth Schedule against l'iolation of fundame,n(al r.ights inPqrt 111 of the Cpnstiiution extends against violaiion of rights und~r C s. 299 of the Government of India Act .1935-He/a yes.

Re.settlenie_nt of-DisplacedPersolls (larid Acqufsitiun) Act, 1948-Two· pro· visons to sub-cl. (e) ofs•b-s. (/) ofs. 77Vq/idity of-Held, valid-

_S. 7 of lthe Reset.t_le'n1ent of Displaced Persons (Lacd A~qui~i_t_i~p) Act, 1948 broadly. p,rovided for payment, cf com_peos1tio11 for the land to be .D acquired for carrYin!J OUt the! purpose~ of tb-e Act aod the minner a~·d method of computation of compensation. Sub·clause. (a) of sub-s (I) . provided for determinirlg the compensation having due regard to the provi· sioils of sub-scc_tion (1) 9f Sec. 23 of· the- Land Acquisition Act, 18?4, that is the n1arkct price of the land on. the da.te -of acquisition. Tho ,two prOvisos ·carved out ao c:iccCption. The first~ 'part of .the first proviso "Was in cdnson1nc~ \.Vith ss. 4 and 6 or the Land Acquisition Act n1meJy that the m.irket valuc··shall be de'crn1ined as on the date of the public.Ltioo of tho notic\! under -section, 3. Notice under sectiOit 3 ser·ved the Purpo~e of a. ·11otificJtion under s. 4 of the Land Acquisition Act. f! is the second paft of the first' proviso that really affected the.compensation, when it said th1t. either the market value referred to Jn the firSt clau~e of Sub·s. (I) of s. 23 of the s:.iid Act shall be deemed to be the niark-:t value of such land on the ·date of .pubfii;;ition ~f the no.tice under s. 3 or rnar-ket VJ.Jue of the land on the Jst d:iy of Sepcemb,.::r, 1939, with an a~dition of 40% whichever was less. The 'iec~nd p.rcvisn catered to the situ·1tit>n wnere !::ind acquired had bee·n·h~ld by the owner thereof und::r a purchase made before the Ist'.day of April.; 1984 but 5!fter the rst day of September, 1939. . •

2Copy pinpoint2. · ·These J>lots of lari'H i>ituated in Delhi and possessed· by the two appellants were aCqulred by the respondent in 1950 under the Reseitlerncnt of Displaced Persons (Land Acq1Aisition) Act, 1948. Ari arbi.trator was appointed as envisaged bys. 7(1) (b) of ihe Act to assess the compensation. T_he appel"lants and the Union .of [ndia appeafed before th~· arbitr3.tor and the compensation was determi.ned by the arbitrator. The appellants perfcr.. • red two' separate appeals against the a~ard of the .ar~itrator in the High H Ccurt. A Div~sion .Bench Of the High Court fo-llow ing a decision of the Full Bench of the High Court dismissec:I the appeals, but gr'anted· a certificate under rt. 133( I) (c). .In these appeals-the appep ants contended that. the two provisos to sub-clause (e) of sub·s.(1) of s.7_of the Act were violative or

s.299(2) of the Government of India Act, 1935 which gdranteed a fair • A · compensation for deprivation and/or acquisition ·or propefty,

Dismissing the appeals,

2. The contention that reducing the compens3tion to the m1rkct '"' value plus 40% as on !st day of September, 1939 is thoroughly irrelevant to the payment of compensation_ and arbitrarily selects the date much earlier to the date of acq'uisiiion and ignores thC escalation Of price of the ~) had is without much force .. The choice of the date September !st, 1939 d.Oes not appear to be arbitrary but has a real. Dexus to the Object sought to e tie•• the 198.4 Act . . The choice of the date as !st .September 1939 is very ·relevant S.nd cannot be ~truck down as arbitrary bec~use on-o -cannot over~ loot the historical fact th~t thC Second ·World ·War· was declar'ed on September 2, 1939 and lndf~ was dragg~d intO it· by a foreign power ·on ._~eptem_ber 3,_ 1939 an~ t~e_wa( situation contributed .to the escalation in vrice _of the land .. It is however not neces~ary to examine iil depth this ': r; aspect. [577E;G] . D

3Copy pinpoint3. Article ,31.B ·or the' Constitution which was added by the CODStitutioll (Firit Amendment) A.ct, '1951· provides that once. ao Act is placed iJl. the. Nint);l_ ~chedule to th~ Con~tlt:utioll -eithe_r the Act.or any .- P~c?''ision th~reOf shall not be de~med to be vo_id_ o_r <1,v.er to _have beCome ~9_id, ~n tli_e ~~o~-~~:that s!-lch Act_ or ~ny~ prQvis!oh· thereof is incon!t?Stent wilb, or takes away or abridges apy of the right! cottferred by any ,provi· E sion of part Jli of tho Constitution. The Protection under Article 31-B against the violation of the fum;lamental rights n1entiooed in Part III must ·exfend to the rights unaer srCtion 299 of the Government at' India Act', · 193S also which has Peen t_epealed~ s.299(2~ ,,-yas in suOStan.ce a fundamental risht which was Hfied :b_odily as it:w!)s from 'th_C Government of India, Act, I( 1935 and put into Part Ill of the Constitution. The Re·sdttlemen\ of Displaced Persons (Land Acqu;sition) Act, 1948 is admittedly in!erted in r the Ninth Schedule by the Constitution (Fir.st Amendment) Act, 1951. Therefore this Act' ecjoys the umbrella of protection of Article 31-B and is immuned from t~c cballer.ge of_beiog violative Qf any of the iig]its under s. 299 of the Oover'!lment of India Act, 1935 or !fundamental rights in Part III of the Constitution. (577G·H ; 578A; C-D ;G·H] ,, •·· , Union of India v. Sm/. Mohinder Kaur, !LR 1969 Delhi,1154, upheld. G

Dhirllbha Devisingh Gohil v. State of Bombay, [1935] SCR 691; State bf Uttar Pradesh and Othets v. H.H.Maharaja Brijendre Singh, [1961] 1 SCR 362; N.B. Jeejeebhoy v. Assistant Collector, Thona Prant, Thana, [196S] I SCR 636; Ru· tom Cavasjee Coojier v. Union of ~ndia, [1970) 3 SCR 530; ,, H Stpre of Gujarat v. Shanti/al Mongaldas 011d Others [1969] 3 SCR 541 1 1er~rre~ to, · ·

. 574 SUPREME COURT REPORTS . [1984] 3 s.c.R .

· C!vn. Arl'ELLATE JuRrsmcnoN : Civil Appeals Nos: 922-23 of 1971. · · . ·'

Appeals from the Judgment and Order dated the 16th ·December, 1969 of the Delhi High Court in F.A.O. No. 94-D/~9 &. 46-D/1960. · I . i ' K.C. Dua Co: the' Appellant. ' M.S. Gujaral and R.N. Poddar for the Respondent.

• The Judgment of the Court was delivered by \ DESAI, J. A hangover of the hey day of Article .31 permeates the controversy ,in these two appeals: The attempt is to salvage

D something from the debris of repealed.Art. 31 by the Constitution (Forty-fourth Amendment) Act, 1978. · .·

In Re Civil Appeal No. 922/71 ; Ramnath, the· appe1lant, who •- is now dead took on Jease a plot of land bearing No. 64 'Block L, Daryaganj,))elhi admeasuring 590 sq. yards from J)clhi Improve- ment Trust under Exh.· A-4 dated February :10, 1942. The period reserved under lease was 90 years. The. appellant paid Rs. 10,253 as initial premium and had to pay recurring half-yearly reut in the I amount of RS. 102-8-6 under the agreed terms an ct conditions oflthe le,ase. On payment of Rs. 10,253, the initial payment, the iippeliant. was put in"possession: · In.Re Civil Appeal No. 9 23/71 : Appellant R.S. Ram· Peishad , since deceased took on lease two plots of land bearing No. 66,67 in Block L, Darye . n', Delhi from the Delhi Improvement Trust. The appellant ex .u• .d o registered lease deed dated March 9, 194~ in respect of PLt 1·;0. 66 and with respect to Plot No. 67, 'the. transact'un wa> th;ough an oral sale dated May 1, 1942. Each plot a,dm~:isured 591.1 sq. yards. The appellant.was put in possession of both t:.e plo• '· G Tho Ci:tief Commissioner ofDelhi issued the nctitfication No. F. 6(3) SQ R & R dated December 15, 1950 under Section 3 of 1he ' Resettlement o( Displaced· Per>ons (Land Acquisition) Act, 1948 ('1948 Act' for, short) for acquiring the plots of both the appellants. An arbitrator was appointed as envisaged by Section. 7(I)(b) of: the .I Jf ·J948 ·Act to assess the compensation. Both the appellants and the Union of India appeared before the arbitrator and t.lie compensation I· was determined by.thC:arbitrat()f, ·

• ll.AM NATH v. UNION (Desai, J.) 575 Boot the appellants preferred two separate appeals against the :. award of the arbitrator in the then High Court of Punjab at Delhi. A On the formation of the High Court of Delhi both the appeals came up before the.Division Bench on two differe11t dates. The Division Bench following the decision of the Full Bench in the Union of Irrdia v. Smt. Mohinder Kaurl'i dismissed the appeals but . granted a certificate under Art 133(I)(c) of the Constitution. B Hence both these appeals by certificate. •

.. The only contention canvassed before' the High Court was that Ist and'2nd proviso to sub,;:lause (e) of sub-section 1 of Section· 7 of the.1948 Act are violatiye of S_ec. 2<l9(2) of the Government of· a India Act, 1935 .as it then·stood and the compensation awarded by the arbitr.ator in consonance with the provisoes is.illusory and there- fore both the proviso es are constitutionally. invalid. A Full Bench of the High Court in the ·deci1ion hereina~ove noticed negatived this contention but granted the certi.ficate under Act. 133(1}(c) on • the ground that the decision in Union of India v. Smt. Mohinder l D Jfaur .was pending in appeal before the Supreme Court 11nd as the ·,., ~ ,High Court in. rejecting the appeals of the presents appellants followed tqe same decision, it was imperative that the certificate should be granted. ·

When the appeals came up for hearing, we. enquired from Mr. ·' ...... K.C. Dua, learned counsel for.the appellants as to what happened to the appeal preferred in Smt. M()hinder Kaur's case which enabled . the appellents to obtain· the requisite certificate under Art. 133(I)(c): There was no clear or straight. answer to the querry and it. appears · that there was no such appeal and therefore on this .short ground ' F the certificate could have been canc.elled. But as even the other side was not in a position to shed light on tbe questjpn ~heiher any appeal at all was preferred against the decision of the High Court in Smt: Mohinder Kaur's case a~d if so what fate it' met, we persua- ded ourselves not to cancel the certificate. G Mr. K.C. Dua, learned counsel, who appeared f<;ir the .. , appellants in both the appeals; was rather on uncertain ground when he first stated ~hat he does not wish to challenge the constitution validity of Section 7 and or the provisoes to sec. 7(i)(e) and then: later on stated that he does challenge the two provisoes to sub-. , · ff clause (e) of sub-sec; (I) of~ec. 7.on the /.'round that these two pro-

576 SUPREME COURT REPORTS [1984] 3 s.c.R. r , .• ~ visoes are violative of Section 299(2) of the Government of India l\ct, 1935 .

. Sec. 7(1)(e) and the two provis~es r.ead as under:

"7. (1) Where any land has been acquired under this Act there shall be paid compensation, the am,ount of Y,'.hich !shall be paid compensation, the amount of which shall be deter- ·~ . mined in the manner and in accordance with the principles ' .hereinafter set out, that is to say,-

xx xx xx • xx xx xx .' (e) the arbitrator, in making his· award, shall have due regard to the provisions of sub-section (!) of section 23 of the Land Acquisition Act, 1894 (I ofl894) ;

D Provided that the market-value referred to in clause first of sub-section (1) of section 23 of the said Act shall be · deemed to be the market-value of'such land on the date of publication of the notice under section 3, or on the first day of September, 1939 with an addition of 40 per cent, whichever 'is less : · . I Provided further that where such land has been held by t11e owner thereof under a purchase made before the first day of April, 1948, but after the. first day of September, 1939, by a registered document, or a decree for pre-emption I between tbe aforesaid dates, the compensation shall be the price actually paid by the purchaser or th.e amount on pay- meni of which he may have acquired the land in the decree for pre-emption as the case may· be."

G The 1948 Act was enacted. to acquire land for re~ettlement of displaced persons. As an aftermath of the partition of India thousands of persons were uprooted from their habitats and, they had to be resettled. Urgen! necessity was to acquire the land at!d that too at reasonable price. In order to circumvent the prolix and time-consuming procedure under the Land Acquisition Act, 1894, B a special act was enacted. Sec. 7 broadly provides for payment of compensation for the land to be accquired for catrying out the purposes of the Act and tfre. manner and method of computation· of \)Ompensatioµ. Stib-cla11se (e) provides for determining the comenp:

RAM NATH v. UNION (De,·ai, J.) 577 . $aiion having the due regard to the provisions of sub-s~ction (l) of · the Land Acquisition Act, 1894, that is the market price of the land . on the date ofacquisltion. The two provisoes carve out au excep- tion. The first part of the first proviso ·is in consonance with Sections 4 and 6 of the Land Acquisition Act namely that the • market value shall be determined as on the date of the publication of the notice under section 3. Notice under section 3' served the purpose of a notification urider Sec. 4 of the Land Acquisition Act. It is the second part of the first proviso that really affects the com- pensation, when,it says that either the market value referred to in the first clause of sub-section (I) of sec. 23 of the said A~t shall be deemed to be the market value of such land on the date of publi- cation of the noticiMmder section 3 or market value of the land on the first da.y of September, 1939, with an addition of 40 per cent, whichever is less. The second proviso caters to the situation' where land acquired has been held by the owner thereof under a purchase made before the !st day of April, 1948 but after the !st day of April, 1948 but after the 1st day of September, 1939 which is not the question herein. . · ' Mr. Dua urged that reducing the compensation to the market value plus 40 per cent as on Is! day of September,1939 is thoroughly irrelevant to the.payment of ~ompensation and arbitra- rily .selects the date much earlier to the date of _acquisition and B: ignores the <scalation of price . of the land. It was urged that the situation is. not improved by adding 40 per cent to the market value as determined on Ist day of September ; 1939. The choice. of the date September !st, 1939 does not appear to be arbitrary but has a real nexus to the object sought to be achieved by F: the 1948 Act. We are of the opinion that tlte choice of the date as Ist September, 1939 is very relevant cannot be struck down as arbitrary because one can not overlook the historical fact that the Second World War was de·cJared on September 2, 1939 and India was dragged into it by a foreign powrr on September 3, 1939 and the· war situation contriouted to the escalation in price of the land. It J Q is however. not necessary to examine,in depth this aspect. ·

The 1948 Act is admittedly inserted in the Ninth Schedule by' the Constitution (First Amendment) Act, 1951 which also simulta- neously added Art. 31-B. The Act firds its place at plecitum 16 in the Ninth.Schedule. Once an act is. placed in the Ninth Schedule, H Article 31 B, provides that either the act or any provision thereof shall not be deemed to ·be void or ever to have becoine void.on the ground of such act or any provision thereof is inconsistent with,

578 SUPREME COURT REPORTS . [1984] 3 S.C.R.

or takes away or abridges any of the rights conferred by any pro- vision of Part III of the Constitut.ion. Once the act is brought under the umbrella of protection of Art. 31-B by inserting it in the Ninth Schedule, th~ act is not open to tqe challenge that it as a whole or any provision thereof violates or contravenes any of the fundamental riglits contain~d in J?art III of the Constitution. The ll allegation here is that the two pro\lisoes violate the guarantee of fair compensation and therefore it constitutes deprivation of pro- perty withontjust compensation, a relic of Art. 31(2) lilied from Sec. 29.9(2) of the Government of India Act, 1935.

The 1948 Act.is a pre-Cohstitution statute. /t was therefore urged that it does not qualify for the protection of Art. .31-B in as much as when enacted it was violative of Sec. 299(2) of the Govern- ment of India Act, 1935 and as it was void ab initio, it was not an· · exi>ting law within the meaning of expression in Article 366(10] and therefore is. not qualified for umbrella o( protection enacted in D Art. 31-B.

Bee. 299 of the Government of India Act, 1935 is almost in pari materia with repealed Art. 31(2) .. ·A Constitution .Bench of this Court in Dhirubha IJ.evisinglz Gohil v. The State of Bombay<'> .E while' upholding the constitutional validity of the Bombay T)llukdari Tenure Abolition Act, 1949 on the ground that it was not covered by the umbrella of protection of Art. 31-)3 and the Ninth Schedule held that Sec. 299(2) of the . Government of India Act was in substance a fundamental right which.was lifted bodily as it was from 'fl< the Go-;ernment of India Act, 1935 and put into the Patt III of the · Constitution. Accordingly repelling the contention that the Bombay Act violated Sec. 299(2) and was not qualified for the protection of Art,. 31-B; it was held that the marginal difference in the language of Sec. 299 and Art. 3l'B does not make any difference because what Art. 31-B protects is. not a mere 'contravention of the provi- />--· sions' of Part Ill of the Constitution but an attack on the grounds that. the impugned act is 'inconsistent with, or takes away . or abridges any o.f the rights conferred by any provision o[ Part HI.' It was accordingly held that even though the Bombay Talukdari Tenure Abolition. Act, 1949 was a pre-Constitution statute, it would )

nonetheless be covered by the umbrella of protection of Art. 31-B. In this connection it was observed as under :

(I) [l955] S.C.R. 691.

'· RAM NATH v. UNION (Desai, J.) 579 "It will be illogical to construe article 31-B as affording 'Protection only so far as these rights are taken away by an .Act in.violation of the provisions of the new Constitution but not when they are taxen away .bl( an Act in vio~tion of sec- tion 299 of the Government of India Act which has been ·npealed. The intention of the Constitution to protect each and every one of the Acts specified in the Ninth Schedule B from any d1allenge on the ground of violation of any -0f the fundamental rights secured under Part III of the Constitution, irrespective of whether they are p_re-existing or new rights, is placed beyond any doubt or quest.ion by the very emphatic .language of article 31-B which cleclares that c none of the provisions of the specified Acts shall be deemed to be void or ever to have become ·void on the . ~ground of the alleged violation of- the rights indicated and "notwithstanding any j~gment, decree or order of any court or tribunal." That intention is also ~phasised by the positive declaration that "each of the said Acts. or Regulations shall, subjecl to· the power of any competent ~egislature to repeal or amend it, continue in force." . This very· question again surfaced in The State of Uttar Prade~li and Others v. II. H. Maharaja Brijendra Singhli) in which .constitutional validity of U; P. La.nd Acquisition (Rehabilitation of ·Refugees) Ac!, 1948 was questioned. The title of the Act impugned in that case clearly shows that it was in pari materia with the Act, 1948 both being enacted wi\h a view to acquire power to acquire land for .rehabilitation of refu"gees and that too in· the same year. It· may as ·well be ment.ioned that U. J>. Act XXVI of 1948 is also inserted in· the Ninth Schedu!e. The entry just precedes the 1948 Act. The High Court while upholding the validity of Sec. 11 which is in pari materia with Sec. 7 of 1948. Act struck down the two provisoes to Bee. 11 similarly worded as the two provisoes to Sec. 7 (I) (e). Both :the provisoes are in pari materia wit!i the impugned ptovisoes. This G ,Court, reversing the decision of the High Court ahd following the -decision in Dhirubha Derisingh Gohil's case while upholding the constitutional vafidity of the Act held that the protection under Art. 31B against the vio4tion of the fundamental rights m~ntioned therein 1DUSt extend to the rights under Sec. 299 of the Government of India Act also. The reasons which weighed with the Con.stitution Bench of this Court while upholding the validity of the U. P. Act. will

{I) (1961) I SCR 362.

. sso: SUl'!i.iiMB .totJRT· REPORTS [1984] 3 s.c.Jt,

mutatis mutandis appply here and we must uphold the' validity of th<). two provisos on parity of reasoning. . . !t is thus satisfactorily established that in view of the imertfom of the 1948 Act in Ninth Schedule it e~joys the umbrella of protec- tion of Art. 31-B and therefore it is immune from .the chailenge as. B. violating any of the provisions in Part Ill of the Constitution. In· fact this should end the controversy.

Mr. Dua however urged·that in view of the decision of this-. ·court in N.B. Jeejeebhoy v. Assistant Col/eccor, Thana Pi'ant, Thanal')• wherei~ this Court struck .down tJ:ie Land .Acquisition (Bombay' Amendment) Act, 1.948 as constitutionally invalid, would necessitate re,examination of the decisions in Dhirubha Dev/singh Gohil's case and Maharaja Brijendra Singh's case. It \\as submitted that the· decision in Jeejeebhoy's case comes later .in point of time both to .the decision in Dhirub}ja Gohil's and flaharaja Brijendra Sing)i's Di case, and therefore the later decision should prevail with this Court_ In J.eejeebhoy's :ase, this. (Oourt repelled the conten.tion·that t!)e Amendment Act 1s saved by Art. 31-A of t.he Const1tut1on. The argument of the 'learned Attorney· General th?t Sec. 299 ·of the Government of India Act, 1935 declared a fundamental right of a citizen', that it is bodily lifted and introduced by the Constitution ilh Art. 31(2)thereof and that if Art. 31-A saved an attack against the Amending Act on the ground that it infringed Art. 31(2) thereof, it would equally save the attack based on the infringement of Sec. 299(2) of the Government of India Act, 193 5 was disposed of b)( .F, · merely observing that the argument is far fetchetl. It may however be mc;ntioned that in this later decision, the decisions of the Consti- tution Bench in Dhirubhi Devisingh Gohil's case 3Dd the Maharaja. Brijendra Singh's case were merely referred to but riot overruled. They were distinguished on the ground that the statutes impugned in those cases enjoyed the protection of Art. 31-13. That is a fact. and would make all the difference. The impugned Act in Jeejeebhoy's case did not enjoy the protection of the Ninth Schedule and Art. 31-B, and therefore the decision in Jeejeebhoy's case is hardly of any assistance. .

It was lastly urged that the deci.sion of the larger Bench iO: , . n· &stom Cavasjee Cooper v. Union of India(') would clearly sl;tow that, r• •• :; - (Jl , [l965ll S,C.R. 616, (2) [1970] 3 S.C.R. 530, ' j

1t AM NATH v. UNION (Desai, J.) 581~.

the decision of this Court in State of Gujarat v. Shanti/al Mangaldas <ind Others(') is no more good law and therefore it ·is open to the ·Court to examine whether compensation ·offered _by the rel~vant pro- ·visions of the Statute is illusory . or prescribe principles well-recog- :nised for valuation of land. · In our . opinion, this aspect is hardly irelevant because once the impugned statute or the impugned provi- oSions of the statute enjoy th~ protection of Art. 31-B, it is not open to the Court to cxam.ine whether the principles for valuation therein J?rescribed are -relevant to the land valuation 'because that' question ,arises where a complaint as to the contravention of fundament11! csights enaeted in repealed A rt.31 can be entertained and examined. !hat complaint has to be rejected at the thereshold as soon as it is 0 . i'Ointed out ·that the impugned statute or the impugned provisions -.of statute enjoy the protection of Art. 31-B. It may be mentioned that in Smt. Mohinder Kaur's case, a Full Bench of Delhi-High Court 'examined and upheld tlie ~onstitutfonal validity of the two provi- iloes to Sec. 7(l)(c) of the 1948 Act. We agree with the view taken by the High Court and upheld the same. · D . I

Constitutional validity of the provisoes to Sec. 7(l)(e) 'of the 1948 Act was the 'only point canvassed in these two appeals and· as . .: 'there is no merit in it, both the appeals fail and are dismissed with- . -out any order as .to costs. · E ' In Civil Appea I No. 922 of 1971 the appellant died pending ihe appeal and substitution is sought by one Kumari Abha Gupta basing her claim ou the will dated July 27, 1980 of the deceased. 'The will has neither beeri probated nor anywhere its validity is de- iermined. It is.not necessary for us to undertake this exercise here. We grant the substitution limited'to the purposes of the appeal but if in any appropriate proceeding, the question of the validity of the -will arises, the same could not be said to h·ave been concluded by this Court granting thy subs,titution. Subject to this condition, the 1lubstitutWn. is granted.

• Appeals dismissed•

. (1) [1969] 3S.C,R. 341.