IMPORTANT POINT
Absence of any provision for payment of solatium and interest therein for acquisition of land is not hit by Article 14 of the Constitution.

Headnote:Defence of India Act, 1971-Sections 30 and 31-Compensation for acquisition of requisitioned property-Absence of any provision for payment of solatium and interest therein-Whether hit by Article 14 of the Constitution?-(No)-Provisions for payment of compensation under Land Acquisition Act would not ipso facto apply to acquisitions made under Defence of India Act-Whether amount of solatium and interest which appellant has paid to respondents should be directed to be refunded?-(No)-Land Acquisition Act, 1894-Sections 23, 28A.
       Held : Section 31 provides for compensation for acquisition of requisitioned property. The compensation payable for the acquisition of any property under Section 30 shall be the price which the requisitioned property would have fetched in the open market if it had remained in the same condition as it was at the time of requisitioning and been sold on the date of acquisition. The said Act is a self-contained code. It lays down the procedure as well as machinery for determining the amount of compensation. It is not in dispute that the provisions for payment of compensation under the Land Acquisition Act would not ipso facto apply to the acquisition made under the said Act. The provisions of the two Acts do not also provide for the same scheme for acquisition. (Paras 15 & 16)
       One of the principles for determination of the amount of compensation for acquisition of land would be the willingness of an informed buyer to offer the price therefor. In terms of the provisions of the said Act acquisition of the property would be in relation to the property which has been under requisition during which period the owner of the land would remain out of possession. The Government during the period of requisition would be in possession and full enjoyment of the property. It is beyond any cavil that the price of the land which a willing and informed buyer would offer would be different in the cases where the owner is in possession and enjoyment of the property and in the cases where he is not. The formulation of the criteria for payment of compensation in terms of Section 31 of the Act was clearly made having regard to the said factor, which cannot be said to be arbitrary or unreasonable. The Parliament while making the provisions for payment of compensation must have also taken into consideration the fact that the owner of the property would have received compensation for remaining out of possession during the period when the property was under acquisition. (Paras 27 & 28)
       The classification sought to be made for determination of the amount of compensation for acquisition of the land under the said Act vis-a-vis the Land Acquisition Act is a reasonable and valid one. The said classification is founded on intelligible differentia and has a rational relation with the object sought to be achieved by the legislation in question. (Para 30)

JUDGMENT

S.B. Sinha, J.-The core question, involved in this batch of appeals which arise from the judgment and order dated 13.09.1982 passed by the High Court of Punjab and Haryana, relates to the constitutional validity of the Defence of India Act, 1971 (The Act) on the premise that absence of any provision for payment of solatium and interest therein for acquisition of land is hit by Article 14 of the Constitution of India.

2. The respondents were owners of several tracts of lands situated in or around the town of Bhatinda in the State of Punjab. For the purpose of establishing a military cantonment, the said lands were requisitioned by the District Magistrate, Bhatinda in terms of the provisions of the Act in the year 1971.

3. On or about 15.1.1975, proceedings were initiated for compulsory acquisition of the said lands in terms of Section 30 of the Act. The competent authority determined the amount of compensation payable for such acquisition on 28.7.1975. However, the respondents being dissatisfied with the amount of compensation offered to them asked the competent authority to refer the matter to an arbitrator in terms of Section 31 of the said Act. -Allegedly, such reference was not made.

4. Questioning the validity of the Act on the ground that their claim of interest at the rate of 6% and solatium at the rate of 15% had not been granted, writ petitions came to be filed. The High Court by reason of the impugned judgment held that Section 31 of the Act is ultra vires Article 14 of the Constitution of India, as a result whereof the respondents became entitled to claim and recover from the Central Government solatium at the rate of 15% on the amount of compensation as also the interest thereupon at the rate of 6% per annum. Several matters came up before this Court wherein acquisitions have been made under the provisions of various Improvement Trust Acts and other Acts. A question arose as to whether the provisions of the Land Acquisition Act as regards solatium and interest are to be read into the other Acquisitioning Acts or not. A question also arose in some appeals as to whether the provisions of Section 28A of the Land Acquisition Act are to be read into the Act. A further question arose as to whether in the event, it be held that the provisions of Land Acquisition Act regarding payment of solatium and interest cannot be read into the said Act, the same would be declared ultra vires Article 14 of the Constitution of India.

5. A Constitution Bench of this Court by an order dated 12.12.2001 while referring back the matters to 3-Judge Bench as regards the first group and the second group of cases thought it expedient to direct that these matters wherein the question as to whether the said Act violates Article 14 of the Constitution of India for the reason that it makes no provisions for solatium and interest should remain before it awaiting decisions on the first and second group of cases.

6. The first group of cases wherein the question as to whether the provisions regarding solatium and interest contained in the Land Acquisition Act are to be read into the provisions of various Improvement Acts arose for consideration has since been answered in the affirmative by a 3-Judge Bench of this Court in Nagpur Improvement Trust etc. vs. Vasantrao and Others etc. [(2002) 7 SCC 657] (Second Nagpur Improvement Trust).

7. The second group of cases relating to the question as to whether the provisions of the Land Acquisition Act are to be read into the Defence of India Act were considered in Dayal Singh and Others vs. Union of India and Others [(2003) 2 SCC 593] wherein this Court held that the provisions of Section 28A of the Land Acquisition Act cannot be read into the said Act.

8. The question as regards the constitutionality of the Act on the touch-stone of Article 14 of the Constitution of India is required to be considered by us in the aforementioned backdrop.

9. Mr. Soli J. Sorabjee, the learned Attorney General appearing on behalf

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2003 Supreme(SC) 465

IMPORTANT POINTAbsence of any provision for payment of solatium and interest therein for acquisition of land is not hit by Article 14 of the Constitution.

Cases Referred (6)

IMPORTANT POINT
Absence of any provision for payment of solatium and interest therein for acquisition of land is not hit by Article 14 of the Constitution.