Sri Sri Iswar Lakshmi Janardan Thakur Jew vs State of West Bengal

S.K. Chakravarti, J.—These ten appeals arise out of an award passed by the learned Land Acquisition Judge at Suri in the district of Birbhum. Different plots of CS. plots Nos. 271, 272 and 256 of mouza Shyambati were acquired under the West Bengal Act II of 1948 and the notification was published on October 22, 1953. At the time of this notification the lands were already in the possession of the State having been under requisition and so possession on the basis of acquisition had also been taken on October 22, 1953. All the ten cases, out of which these ten appeals arise, are covered by the some award of the learned Land Acquisition Judge and all these appeals have been heard together as common questions of law and facts are involved. The Appellants, who are the landlords, are entitled to get the entire compensation by virtue of the agreements with their tenants. The Collector''s award was on the basis of Rs. 425 per acre for puratan patit and Rs. 30 per acre for dahar and kandar lands. The owners were not satisfied with the same and prayed for references which were made. The learned Land Acquisition Judge accepted the contention of the owners that all these three plots of lands were utilised for all practical purposes as building sites and they should be valued as building sites and not as dahar or puratan patit lands. He, however, held that the compensation was to be paid on the basis of the price of land prevailing on December 31, 1946, and found that Rs. 2,940 per acre would be the rate prevalent on that date and directed payment of compensation on that basis. He overruled the contentions raised on behalf of the owners that the valuation was to be made on the basis of the prevalent price on the date of the notification as also that they are entitled to get the statutory allowance referred to in Section 23 of the Land Acquisition Act. Against this the owners have come up in appeal.

The first point that is pressed by Mr. Amarendra Nath Gupta, learned Advocate appearing on behalf of the Appellants, is to the effect that the learned Judge erred in valuing the plots at the rate of Rs. 2,940 per acre and that too as on the basis of December 31, 1946, Mr. Gupta''s contention is that it must be with reference to the date of the publication of the notice which, in this particular case, is October 22, 1953. On that date, prima facie, the second proviso to Sub-section (1) to Section 7 of the Act under which the valuation was to be determined with reference to December 31, 1946, would govern. But, it would appear that this proviso was struck down as void ab initio by this Court in State of West Bengal v. Muxari Mohan Biswas. (1958) 64 C.W.N. 714 and The State of West Bengal Vs. Bon Behari Mondal, as also in the Midnapore Zemindary Co, Ltd. v. State of West Bengal ILR (1960) Cal. 228. It may further be noted in this connection that this second proviso was deleted from this Act by the West Bengal Act VIII of 1954 which came into effect on March 30, 1954. The Appellants, prima facie, are not entitled to get benefit of this amendment inasmuch as the notification was published before that date. But when that proviso had been struck down by this Court ab initio, their rights would be governed under the first proviso to Sub-section (1) of Section 7 and under that proviso the market value is to be determined as on the date of publication of the notice or, in other words, which effect from October 27, 1953.

Now, as to the valuation of the lands on that date it would appear that the owners had filed a kobala which would show that the price in 1953 would be near about Rs. 10,000 per acre. On the other hand, there is Ex. 4 which is a judgment in another land acquisition case relating to this mouza, which would show that an award was passed at the rate of Rs. 1,200 per bigha or Rs. 3,600 per acre on the date of notification which was in 1950. The acquired lands are contiguous'' to Santiniketan, separated by road, and these three plots are situated side by side and have also been held to be fit for building purposes. In F.A. No. 212 of 1961, which we have disposed of in July last, we have valued 10.67 acres of lands in this mouza at the rate of Rs. 4,000 per acre and that date of notification is also. October 22, 1953. We have also to take into account the fact that larger the area the lesser would be the total value thereof. Keeping in mind all these facts and circumstances, we are of opinion that the compensation for the value of these lands as on October 22, 1953, should be worked out at the rate of Rs. 4,500 per acre.

Mr. Gupta''s next contention is that the owners are entitled to get 15 per cent as solatium u/s 23(2) of the Land Acquisition Act. He has referred to a number of decisions of the Supreme Court to show that Section 7(2) of the Act under which this statutory allowance was ruled out in such proceedings is ultra vires. We may note in this connection that the cases reported in Deputy Commissioner and Collector, Kamrup and Others Vs. Durga Nath Sarma, and in Balammal and Others Vs. State of Madras and Others, would indicate that this contention of Mr. Gupta has to be given effect to. In the latter case the Supreme Court was considering a similar provision in the. Madras City Improvement Trust Act of 1950 which deprived the owners of the statutory right to solatium at the rate of 15 % on the market value of the lands and held that this clause "is violative of the equality clause of the Constitution and is on that account void." In reality there is no nexus between the object of this Act and this particular provision by which the statutory allowance was ruled out. The object of the Act is--

It is expedient to provide for the requisition'' and speedy acquisition of land for the purpose of maintaining supplies and services essential to the life of the community and for providing proper facilities for transport communication, irrigation or drainage.

We fail to understand as to how the withholding of this statutory allowance would lead to a speedy acquisition of the lands. If the lands had been acquired under the Land Acquisition Act, the owners would be entitled to get this compensation, whereas if the same are acquired under this Act, this compensation would not have to be paid. There is no rational basis for this differentiation. The withholding of the statutory allowance under this particular Act would, therefore, be violative of Article 14 read with Article 13 of the Constitution, and. similar provisions in other Acts have already been declared ultra vires as referred to above. We would, therefore, hold that the withholding of this allowance in this case is ultra vires and the claimants are entitled to get this statutory allowance of 15 per cent.

Mr. Gupta, with his usual fairness, has further placed before us a decision of this Court in the Midnapore Zemindary Co.''s case (Supra) referred to above'' where this particular point came up for consideration before a Division Bench of this Court which, however, held that this portion of Clause (a) of Sub-section (2) of Section 7 of the Act was not ultra vires. With due respect to their Lordships we may say that we are not in a position to agree with the reasonings as laid out in that decision. It may, however, be noted that this decision was given at a time when the decisions of the Supreme Court referred to above were not available. Now, after the decisions by the Supreme Court referred to above, we are of the view that the decision of this Court in the Midnapore Zemindary Co.''s case (3) on this point has been impliedly overruled.

The last grievance which Mr. Gupta has urged before us is to the effect that the learned Judge erred in disallowing the claimants'' claim to the interest. Now, as the Act originally stood, there was no express provision for the grant of interest. It is only when the Act was amended in 1954 by the West Bengal Act VIII of 1954 that a proviso has been added to Clause (a) of Sub-section (2) of Section 7 providing for interest at the rate of 6 per cent per annum on the amount of compensation under the award from the date of the publication of the notice until final payment. As on the date of the publication of the notification in this particular case this proviso was not there, the claimants are not entitled to get the benefit thereof, and it may be noted that this proviso had also not been given any retrospective effect. But Mr. Gupta contends that as the Act originally stood under Sub-section (2) of Section 8 he was entitled to this interest. Sub-section (2) of Section 8, as it originally stood, runs as follows:

The provisions of the Land Acquisition Act, 1894, shall mutatis mutandis apply in respect of any reference made to the Court under Sub-section (1).

In Birendra Nath Ray Sarkar and Another Vs. Union of India (UOI) and Another, and Kajari Lal Agarwala v. Union of India (1955) 59 C.W.N. 935 it was held by this Court that this clause would apply only since the reference had been made to the Land Acquisition Judge.. So, on the basis of these two decisions it may be argued that the proviso regarding interest as in the Land Acquisition Act, namely Section 28, would also apply. Section 28 of the Land Acquisition Act is in pt. Ill and the heading of that part is the reference to Court and procedure thereon. Therefore, Section 28 would apply on the reference to Court. Moreover, it has been held by the Supreme Court in Kajari. Lal Agarwala v. Union of India AIR 1966 S.C 1538 that.

in the context, what the clause means is that the provisions of the Central Act shall mutatis mutandis apply in respect of any reference intended, proposed or asked to be made and not in respect of any reference already made. Having regard to the scheme of Section 8, considered in the light of the other provisions of the Act, it seems to us clear that the object of the Legislature in making the relevant provisions of the Central Act applicable to reference was to take in all the relevant provisions of the Central Act which had reference to the making of reference; and naturally, these provisions would begin with Section 18 of the Central Act which is the first section in Part III of the Central Act dealing with reference to Court and procedure thereon.

It would appear from the observations of the Supreme Court quoted above that all the provisions of chap. Ill of the Land Acquisition Act would apply in view of Sub-section (2) of Section 8 of this Act. Accordingly, Section 28 which gives a discretion to the Court to pay interest on the excess amount would also apply to the facts of the present case and whether the Appellants would be entitled to get interest would be at the discretion of the Court. The learned Judge was in error in holding that they were not entitled to any interest on the reading of the Act.

The property had been acquired about seventeen years back and the Appellants have been deprived of the usufruct thereon since then. There is absolutely no reason, therefore, why they should not get the interest on the excess amount in accordance with Section 28 of the Land Acquisition Act. In view of the decision of the Supreme Court in Ragkubans Narain Singh v. Uttar Pradesh Government AIR 1967 S.C. 465 the interest, for the Judge to use his discretion, cannot be less than 6 per cent. We, therefore, hold that the Appellants are entitled to get interest at 6 per cent per annum on the excess.

To conclude, we therefore allow these appeals in part and modify the judgment and decrees passed by the learned Land Acquisition Judge and direct that compensation be paid to the Appellants on the basis of Rs. 4,500 per acre. The learned Judge in the Court below will work out the compensation on this basis and we also direct that he shall add to this sum 15 per cent of the value of the lands and shall pay interest on the excess over the Collector''s award at the rate of 6 per cent per annum from October 22, 1953, to the date of payment of such excess in Court. If any amount had already been paid over and above the Collector''s or the Judge''s award, that will also be taken into account and will be deducted from the compensation payable now and the interest will run at the rate of 6 per cent per annum on the outstanding upto the date of payment. The State will deposit the excess amount in the Court of the learned Land Acquisition Judge below within six months from date.

There will be no order as to costs in these appeals.

S.K. Datia, J.: I agree that the appeals should be allowed to the extent and in the manner provided in the judgment of my Lord just pronounced. I would, however, like to add a few words on the points of law involved.

The lands in these proceedings, it appears, were under requisition under the West Bengal Land (Requisition and Acquisition) Act, 1948 (W.B. II of 1948), and subsequently a notification was published on October 22, 1953, for acquisition of the said lands u/s 4 of the said Act. On the publication of such notice the lands vested absolutely on the State Government.

On the proceedings arising from the said acquisition the Collector awarded compensation at the rate of Rs. 425 per acre for puratan palit lands and Rs. 30 per acre for dahar lands. On reference, the District Judge of Birbhum, in all the ten references heard together, by the same judgment raised the value of all lands to Rs. 2,940 per acre on the basis of price prevailing in December 1946. The claim for statutory allowance of 15 % on the amount of compensation and also for interest on the amount of compensation was, however, rejected by the District Judge and ten decrees were passed accordingly. The ten appeals against the said ten decrees have been preferred by the claimants landlords who, there is no dispute, are alone entitled to the same, and they have been heard together before us.

Act II of 1948 provided in its Sub-section (1) of Section 7 that compensation shall be payable for the acquisition of land the amount whereof is to be determined in accordance with provisions of Section 23(1) of the Land Acquisition Act, i.e. the market value on the date of notification for acquisition. The words ''so far as they may be applicable'' were added to the said Sub-section by the West Bengal Act VII of 1951, with effect from March 21, 1951. There is a reservation by a second proviso attached thereto in the Act as originally enacted that if such market value exceeds by any amount the market value of the land on December 31, 1946, on the assumption that the land had been at that date in the same state in which it, in fact, was on the date of the publication of the notification, the amount of such excess shall not be taken in consideration. This provision was, however, omitted by the West Bengal Act VIII of 1954 with effect from March 30, 1954, in view of the judicial decisions referred to later. In Sub-section (2)-Of Section 7 of the Act it is provided that the Collector shall make an award in accordance with the principles set out in Section 11 of the Land Acquisition Act, 1894, but no amount referred to in Sub-section (2) of Section 23 of that Act shall be included in the award. In the original Act there was no express provision for payment of interest, but by the Amending Act VIII of 1954 a proviso was added to that Sub-section renumbered as Clause (a) to Sub-section (2) of Section 7, providing for interest on the amount of compensation under the award at the rate of 6% per annum from the date of publication of notification until payment. This provision, came into force on March 30, 1954, and was not made retrospective. It is also provided in Sub-section (2) of Section 8 that the provisions of the Land Acquisition Act, 1894, shall mutatis mutandis apply in respect of any reference made to the Court against an award u/s 8(1).

Mr. Amarendra Nath Gupta, learned Counsel for the Appellants, in all these appeals has contended that the Appellants are entitled to compensation calculated on the basis of the market value of the lands acquired prevailing at the time of the notification for acquisition together with 15 % statutory allowance on such market value as may be determined. In addition, the compensation shall include interest at the rate of 6 % per annum from the date of acquisition until payment. It was pointed out that though by the Amending Act VIII of 1954, which came in force on -March 30, 1954, the second proviso to Section 7(1) was omitted, the provision therein was not made retrospective. None the less, the said proviso was held to be void since inception being violative of Article 31(2) of the Constitution and it is also void being violative of Article 14 of the Constitution. As to statutory allowance, Mr. Gupta in the light of the Supreme Court decisions contended that the original Sub-section (2) of Section 7 renumbered in the principal Act as Clause (a) of Sub-section (2) of the section by the Amending Act VIII of 1954, regarding statutory allowance, was void being violative of Article 14 of the Constitution. As to interest, Mr. Gupta contended that though the provision for interest was inserted without retrospective effect by the Amending Act VIII of 1954 after acquisition, the Appellants were entitled to interest on principles of equity and law u/s 28 of the Act I of 1894.

The second proviso to Section 7 of the Act came up for consideration in State of West Bengal v. Murari Mohan Biswas (Supra) and following the interpretation given to the word ''compensation'' in The State of West Bengal Vs. Bela Banerjee and Others, it was held:

...the market value in December 1946, no matter when the acquisition is made, that is without reference to the time of acquisition which, in the present case, as the year 1949, would not be compensation within the meaning of either Section 299(2) of the Government of India Act, 1935, or Article 31(2) of the Constitution. The impugned proviso to Section 7(1) of the West Bengal Act II of 1948 would, therefore, be invalid prior to the Constitution and would remain so after the Constitution also unless validated by some other provision.

It was further held that Clause (5) of Article 31 would give no validity or protection to the impugned proviso, which is otherwise plainly invalid in view of Section 299(2) of the Government of India Act, 1935, as no Legislature had the power to make a law contrary to its terms and the provincial Legislative had no power to enact the impugned proviso. In State of West Bengal v. Bon Behari Mondal (Supra), following the above case, it was held that the second proviso to Section 7(1) of the West Bengal, Act II of 1948 was void from its very inception and the West Bengal Legislature did the right thing in omitting this void provision from the statute by the Act VIII of 1954 which came into force on March 30, 1954.

The lands in the present proceeding were acquired on October 22, 1953, and as such were not affected by the amendment by Act VIII of 1964: none the less in view of the above decisions, as the second proviso to Section 7(1), which would otherwise govern the proceeding, was void since its inception, the claimants were entitled to the market value as prevailing on the date of publication of the notification for acquisition. It may be noted here that in the above caves the impugned proviso was struck down as having violated the provisions of Article 31(2) of the Constitution as it stood before the fourth amendment which came into force on April 27, 1955.

Apart from the fact that the impugned proviso is violative of Article 31(2) of the Constitution before the fourth amendment it is now to be considered as to whether it is violative of Article 14 of the Constitution which guarantees that all persons should be treated alike in like circumstances. The Article, however, permits reasonable classification and differential treatment-based on substantial difference having reasonable relation to the objects sought to be achieved. In P. Vajravelu Mudaliar Vs. Special Deputy Collector, Madras and Another, and C.A. 396...the Court was concerned with the validity of the. provisions of the Land Acquisition (Madras-Amendment) Act, 1961, which provided a compensation for lands acquired under it, calculated at the market rate prevailing on the date of notification or the average market value of land during five years immediately preceding such date whichever is less. Though the potential value of the land, as a method of ascertaining compensation, was excluded in the said Act, which resulted in the inadequacy of compensation none the less the Amending Act was held not to have violated Article 31(2) of the Constitution as it was held not to be a fraud on the powers of the Legislature providing illusory compensation or principles irrelevant to the value of the property at about the time of acquisition. As to Article 14 it was seen that the object of the Amending Act was to acquire land for housing schemes which again could have been done by the principal Act after paying the market value of the land. It has also held that the differences between people owing lands or lands themselves had no reasonable relation to the objects of the Amending Act. It was observed as follows:

The object of the Amending Act is to acquire lands for housing scheme at a low price. For achieving that object any land falling in any of the said categories can be acquired under the Amending Act. So, too, for a public purpose any such land can be acquired under the principal Act. We, therefore, hold that discrimination is writ large on the Amending Act and it cannot be sustained on the principle of reasonable classification. We, therefore, hold that the Amending Act clearly infringes Article 14 of the Constitution and is void.

In Deputy Commissioner, Kamnip v. Durgmath (Supra) the Court noticed. that while the Land Acquisition Act, 1894, was in force in Assam, the State Legislature passed the Assam Acquisition of Land for Flood Control and Prevention of Erosion Act (Assam VI of 1955) with effect from April 11, 1955, which provided for acquisition of land for public purposes on payment of compensation assessed on the basis of a multiple of annual land revenue. It was laid down as follows:

In our opinion, the classification of land required for works and other measures in connection with flood control and prevention of erosion and land required for other public purposes has no reasonable relation to the object sought to be achieved, viz. acquisition of land by the State. In either case, the owner loses his land and in his place the State becomes the owner. There is unjust discrimination between the owners of land similarly situated by mere accident of some land being required for purposes mentioned in Assam" Act VI of 1955 and some land being required for other purposes. We hold that Assam Act VI of 1955 is violative of Article 14.

Again, in Balammal v. The State of Madras (Supra ) it was held that Sub-clause (2) of d. 6 of the Madras City Improvement Trust Act (XXXVII of 1950) insofar as it deprived the owners of the lands of the statutory addition to the market value of lands u/s 23(2) of the Land Acquisition Act is violative of the equality clause of the Constitution and is on that account void. It was observed as follows:

Compensation awardable for compulsory acquisition of property must be a just equivalent of the value of the land of which a person is deprived. When compensation payable to the owner is to be based on the market value prevailing on different dates, according as it is awardable under the land Acquisition Act or under some special provisions or when the compensation awardable to the owners of the lands under the Land Acquisition Act is" reduced by a special provision unless the distinction is supported by any rational classification having reasonable relation to the subject-matter or to the object sought to be achieved by the special provision and is founded on some intelligible differentia the special provision must be held to be void as infringing the guarantee under Article 14.

In State of Gujarat Vs. Shantilal Mangaldas and Others, the Court observed that the acquisition was struck down in P. Vajravelu Mudaliar''s case (Supra )

because the State Government could resort to one of the two methods acquisition, the Land Acquisition Act, 1894, and the Land Acquisition (Madras Amendment), 1961--and no guidance was given by the Legislature about the statute which should be resorted to in a given case of acquisition for a housing scheme. Power to choose could, therefore, be exercised arbitrarily.

The Bombay Town Planning Act was upheld as constitutional as there was no option to the local authority to resort to one or the mother of the alternative methods which resulted in acquisition.

On a consideration of the provisions of the Act II of 1948, I have no doubt in my mind that the impugned provisions of the Act II of 1948 insofar as it provides for compensation at rates lesser than the Land Acquisition Act, 1894, and does not provide at all for statutory allowance u/s 23(2) are discriminatory and violative of Article 14 of the Constitution. The Act II of 1948 is for requisition and speedy acquisition of land for the purposes of maintaining supplies and services essential to the life of the community and for providing proper facilities for transport, communication, irrigation or drainage. Acquisition for the aforesaid, purposes could as well be done by the Land Acquisition Act, 1894, and for speedy acquisition, there are adequate provisions u/s 17 of the said Act. The classification of lands required for the purposes of Act II of 1948 and of lands for other public purposes has no reasonable relation to the object sought to be achieved by the Act, viz. the acquisition of lands by the State. As was held in the case of Assam Act VI of 1955, in either case the ''owner loses his land and the State in ''Iris place becomes its owner. There is thus an unjust discrimination between the owners of land similarly situated by mere accident of some land being acquired under the West Bengal Act II of 1948 and some land acquired for under the Land Acquisition Act and no guidance was given by the Legislature about the statute which should be resorted to in a given case of acquisition, such power to choose being open to arbitrary exercise of power. We do not find that the differential treatment of the two categories of acquisition of lands is based on any substantial difference having reasonable relation to the object sought to be achieved by the Act, viz. the acquisition of land.

If that is the position in law, the onerous provisions in the 1948 Act depriving the expropriated owners of the market value of land at the time of notification as provided in second proviso to Section 7 (since deleted) as also of the 15 % additional allowance on the market, value of land as provided in Sub-section (2) of Section 7 must be held as void being violative of Article 14 of the Constitution.

In the Midnapore Zemindary Co. Ltd. v. State of West Bengal (Supra ),placed before us by Mr. Gupta which according to him has been overruled, it was held that in view of the object and purpose of the statute which was for requisition and speedy acquisition of land for the purposes mentioned in the statute, the omission of the statutory allowance of 15% considered by the. Legislature as necessary and expedient, satisfied the requisite tests of a reasonable differentiation bearing a rational relation to the object and purpose of the statute. In the decisions, however, referred to above, which were subsequent to the decision in the Midnapore Zemindary case (Supra ), it was held as noted already that if the State Government could resort to one of the two methods of acquisition, which is really the objects of either statute in absence of any guidance consistent with the objects and purposes of the particular statute, it would not be said that there is any reasonable differentiation between the lands or their owners bearing a rational relation to the objects and purpose of the statute. There is no escape from the conclusion as a consequence that in such circumstances there will be unjust discrimination between the owners of land similarly situated by mere accident of some lands being acquired under the West Bengal Act II of 1948 while some others being acquired under the Act I of 1894, and as such, the provision regarding compensation for acquisition in the Act II of 1948 being more onerous, must be held to be violative of Article 14 of the Constitution. The decision in the Midnapore. Zemindary case ( Supra) must, therefore, be held to be overruled by implication by the above decisions of the. Supreme Court and we feel no longer bound by the said decision.

As a result, the contentions of Mr. Gupta must prevail and, accordingly, it is held that the Appellants in the connected appeals will be entitled to compensation calculated at the market value of the lands; prevailing on the date of notification for acquisition together with the statutory allowance thereof so provided in Section 23(2) of the Act I of 1894. It must also be held that Clause (a) of Sub-section (2) of Section 7 of the West Bengal Act II of 1948, providing, for omission of the statutory allowance of 15 % from the compensation payable for the acquisition is void as being violative of Article 14 of the Constitution.

As to the claim for interest the Appellants contended that they are entitled to interest on the excess amount awarded by the Court as compensation for the lands acquired. The Act as it originally stood made no provision for interest though by the Amending Act of 1954 express provision for interest was made by insertion of a proviso to Section 7(2)(a) of the Act as thereby amended. The provision for inclusion of interest from the date of publication of notification for acquisition till payment was made in the said proviso, following the principle as it appears, laid down in Satinder Singh and Others Vs. Amrao Singh and Others, . The Appellants, however, cannot take any benefit of this proviso as it came into effect after the acquisition in these proceedings. Mr. Gupta, in support of his claim for interest of the excess amount awarded over the amount awarded by the Collector, relied on Section 28 of the Land Acquisition Act, 1894, which was included within pt. Ill dealing with reference to Court and procedure therein. In Kajari Lai v. Union of India ( Supra) the Supreme Court, in effect, held that by reason of Sub-section (2) of Section 8 of the Bengal Act II of 1948 all sections from 18 to 28 of pt. III of the Land Acquisition Act, 1894, are applicable to a reference made or proposed to be made to Court in acquisition proceedings under the said Act. Section 28 gives a discretion to the Court for directing the Collector to award interest at the rate of 6% per annum on the excess amount as may be awarded. There is no reason why the discretion should not be exercised in favour of the Appellants when they have been kept away from due compensation for a long period of about 17 years. In Raghubans Narain Singh v. Uttar Pradesh Government AIR 1967 S.C. 465 it is held that where the Court exercises its discretion and grants interest, the interest has to be at the rate of 6 % per annum. The Appellants are, therefore, entitled to interest at the rate of 6 % per annum on the excess outstanding amount over the Collector''s award as claimed.

I agree with the valuation of land arrived at by my learned brother, as also the statutory allowance thereon and interest as provided in the judgment. I agree that the appeals should be allowed without any order as to costs in this Court as proposed.