1967 Supreme(SC) 267

SUPREME COURT OF INDIA
K.N. WANCHOO, C.J.I., R.S. BACHAWAT, V. RAMASWAMI, G.K. MITTER AND K.S. HEGDE, JJ.
The Deputy Commissioner and Collector, Kamrup and others, Appellants
Versus
Durganath Sarma, Respondent.
Civil Appeal No. 1100 of 1966, D/- 15-9-1967.
Advocates Appeared
Mr. S. V. Gupte, Solicitor-General of India, (Mr. Naunit Lal, Advocate, with him), for Appellants; Mr. B. R. L. Iyengar, Senior Advocate, amicus curiae, for Respondent.

Permanent acquisition of property for public purposes requires just compensation; Article 31(5)(b)(ii) only protects emergency destruction or temporary taking. Arbitrary differentiation in compensation based on the specific public purpose of acquisition violates Article 14, and a validation act cannot cure an acquisition made under an unconstitutional law.

Headnote:(A) Constitution of India - Articles 14, 31(2), 31A, and 31(5)(b)(ii) - Land Acquisition - Compensation - Validity of State Acts - A law providing for the permanent acquisition of land for public purposes, such as flood control, is not protected by Article 31A unless it is a law concerning agrarian reform (Para 7). Article 31(5)(b)(ii) serves as a saving clause for laws promoting public health or preventing danger to life or property, but it protects only the destruction or temporary taking of property in cases of imminent peril; it does not exempt the State from the requirement to pay compensation for the permanent acquisition and appropriation of private property (Paras 13, 15).

(B) Constitution of India - Article 31(2) - Just Equivalent - The legislature has discretion in laying down principles for compensation, but such principles must ensure that the amount payable is a just equivalent of the property deprived. Compensation based on a fixed multiple of annual land revenue, which does not reflect the market value of the land at the date of acquisition, is illusory and inadequate, thereby violating Article 31(2) (Para 17).

(C) Constitution of India - Article 14 - Reasonable Classification - Differential treatment in compensation between land acquired for one public purpose under a general acquisition law and land acquired for another public purpose under a special State Act is impermissible if the classification has no reasonable relation to the object of acquisition. Such discrimination between similarly situated landowners is arbitrary and violative of Article 14 (Para 18).

(D) Validation Acts - A legislative provision that deems an acquisition made under a constitutionally invalid Act to be valid is itself invalid. The State legislature cannot validate an acquisition that was carried out under a law that has no legal existence due to unconstitutionality (Paras 20, 21).

Facts of the case:
The State took possession of land for the construction of an embankment. The State legislature passed an Act for the speedy acquisition of land for flood control and prevention of erosion, providing for compensation based on multiples of annual land revenue. Subsequently, a Validation Act was passed to deem previous acquisitions under the first Act as valid. The respondent challenged the validity of both Acts on the grounds that they contravened the constitutional guarantees of equality and the right to receive just compensation for acquired property.

Findings of Court:
The first Act was not an agrarian reform law and thus not protected by Article 31A. It was also not protected by Article 31(5)(b)(ii) as it provided for permanent acquisition rather than temporary emergency measures. The compensation scheme was found to be illusory and not a just equivalent of the land's value, violating Article 31(2). Furthermore, the Act created an arbitrary distinction between land acquired for flood control and land acquired for other public purposes, violating Article 14. Consequently, the Validation Act, which relied on the first Act, was also held to be invalid.

Issues: Whether the State Acts for land acquisition were protected by Article 31A or Article 31(5)(b)(ii); whether the compensation provided under the Acts violated Article 31(2); whether the Acts were discriminatory under Article 14; and whether a Validation Act could cure the invalidity of an acquisition made under an unconstitutional law.

Ratio Decidendi: Permanent acquisition of property for public purposes requires payment of a just equivalent of the property's value. Article 31(5)(b)(ii) only exempts the State from paying compensation for the destruction or temporary taking of property to abate a public menace. Any classification that results in nominal compensation for some public acquisitions and full market value for others, without a reasonable nexus to the object of acquisition, is discriminatory. A deeming provision in a later Act cannot validate an acquisition based on a void and unconstitutional statute.

Result: Appeal dismissed.