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PETITIONER: RAM NATH & ORS.

       Vs.

RESPONDENT: UNION OF INDIA

DATE OF JUDGMENT25/04/1984

BENCH: DESAI, D.A. BENCH: DESAI, D.A. SEN, AMARENDRA NATH (J) MISRA, R.B. (J)

CITATION:  1984 AIR 1178            1984 SCR  (3) 572  1984 SCALE  (1)644

ACT:      Constitution  of   India-Art.   31-B-Scope   of-Whether protection under  Art. 31-B  to Acts  inserted in  the Ninth Schedule against violation of fundamental rights In Part III of the  Constitution extends  against  violation  of  rights under s. 299 of the Government of India Act 1935-Held yes.      Resettlement of-Displaced  Persons  (Land  Acquisition) Act; 1948-Two  provisions to  sub-cl.(e) of sub-s. (l) of s. 7-Validity of-Held valid.

HEADNOTE:      S.7 of  the Resettlement  of  Displaced  Persons  (Land Acquisition) Act,  1948  broadly  provided  for  payment  of compensation for  the land  to be  acquired for carrying out the purposes  of the  Act  and  the  manner  and  method  of computation of  compensation. Sub-clause  (a) of  sub-s  (1) provided for  determining the compensation having due regard to the  provisions of sub-section (1) of Sec. 23 of the Land Acquisition Act,  1894, that is the market price of the land on the  date of  acquisition. The two provisos carved out an exception. The  first part  of  the  first  proviso  was  in consonance with  ss. 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 under s.  4 of  the Land  Acquisition Act.  It is the second part  of   the  first   proviso  that  really  affected  the compensation, when  it said  that either  the  market  value referred to  in the  first clause  of Sub-s. (1) of s. 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 s. 3 or market value  of the land on the Ist day of September, 1939, with an  addition of  40% whichever  was  less.  The  second proviso catered  to the  situation where  land acquired  had been held  by the owner thereof under a purchase made before the Ist  day of  April,  1984  but  after  the  Ist  day  of September, 1939.      2. These  plots of land situated in Delhi and possessed by the  two appellants  were acquired  by the  respondent in 1950 under  the  Resettlement  of  Displaced  Persons  (Land Acquisition) Act,  1948.  An  arbitrator  was  appointed  as

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envisaged  by   s.  7(1)  (b)  of  the  Act  to  assess  the compensation. The appellants and the Union of India appeared before the arbitrator and the compensation was determined by the  arbitrator.   The  appellants  perferred  two  separate appeals against  the award  of the  arbitrator in  the  High Court. A  Division Bench  of  the  High  Court  following  a decision of  the Full  Bench of the High Court dismissed the appeals, but granted a certificate under Art. 133(1) (c). In these appeals the appellants contended that the two provisos to sub-clause  (e) of  sub-s.(1) of  s.7  of  the  Act  were violative of 573 s.299(2)  of   the  Government  of  India  Act,  1935  which guaranteed  a   fair  compensation  for  deprivation  and/or acquisition of property.      Dismissing the appeals, ^      HELD: 1.  The two  provisoes to  sub-clause (e) of sub- s.(1) of s. 7 of the Resettlement of Displaced Persons (Land Acquisition) Act 1948, are valid. [581 D]      2. The contention that reducing the compensation to the market value  plus 40%  as on  Ist day of September, 1939 is thoroughly irrelevant  to the  payment of  compensation  and arbitrarily selects  the date  much earlier  to the  date of acquisition and  ignores the escalation of price of the land is without much force. The choice of the date September Ist, 1939 does not appear to be arbitrary but has a real nexus to the object  sought to  be as the 1984 Act. The choice of the date as  Ist September  1939 is  very relevant and cannot be struck down  as arbitrary  because one  cannot overlook  the historical fact  that the  Second World  War was declared on September 2, 1939 and India was dragged into it by a foreign power on September 3, 1939 and the war situation contributed to the  escalation in  price of  the land. It is however not necessary to examine in depth this aspect. [577E-G]      3. Article  31-B of the Constitution which was added by the Constitution  (First Amendment)  Act, 1951 provides that once  an  Act  is  placed  in  the  Ninth  Schedule  to  the Constitution either  the Act  or any provision thereof shall not be  deemed to be void or ever to have become void on the ground  that   such  Act   or  any   provision  thereof   is inconsistent with,  or takes  away or  abridges any  of  the rights conferred  by  any  provision  of  part  III  of  the Constitution. The  protection under Article 31-B against the violation of  the fundamental  rights mentioned  in Part III must  extend   to  the  rights  under  section  299  of  the Government of  India Act, 1935 also which has been repealed, s. 299(2)  was in  substance a  fundamental right  which was lifted bodily  as it  was from  the Government of India Act, 1935 and  put into  Part III  of the  Constitution. The  Re- settlement of Displaced Persons (Land Acquisition) Act, 1948 is  admittedly   inserted  in  the  Ninth  Schedule  by  the Constitution (First Amendment) Act, 1951. Therefore this Act ecjoys the  umbrella of  protection of  Article 31-B  and is immuned from  the challenge of being violative of any of the rights under  s. 299 of the Government of India Act, 1935 or fundamental rights in Part III of the Constitution. [577G-H; 578A; C-D ;G-H]      Union of  India v.  Smt. Mohinder  Kaur, ILR 1969 Delhi 1154, upheld.      Dhirubha Devisingh Gohil v. State of Bombay, [1955] SCR 691; State  of Uttar  Pradesh  and  Others  v.  H.H.Maharaja Brijendre Singh,  [1961]  1  SCR  362;  N.B.  Jeejeebhoy  v. Assistant Collector,  Thana Prant,  Thana, [1965] 1 SCR 636; Rustom Cavasjee  Cooper v. Union of India, [1970] 3 SCR 530;

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State of  Gujarat v. Shantilal Mangaldas and Others [1969] 3 SCR 541, referred to. 574

JUDGMENT:      CIVIL APPELLATE  JURISDICTION : 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/59 & 46-D/1960.      K.C. Dua for 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 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 appellant, who is  now dead took on lease a plot of land bearing No. 64 Block L,  Daryaganj, Delhi  admeasuring 590  sq. yards  from Delhi Improvement  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  rent in  the amount  of  Rs.  102-8-6 under the  agreed terms  and conditions  of  the  lease.  On payment of  Rs. 10,253,  the initial  payment, the appellant was put in possession.      In Re  Civil Appeal  No. 923/71  : Appellant  R.S.  Ram Pershad since  deceased took  on lease  two  plots  of  land bearing No.  66-67 in  Block L,  Daryaganj, Delhi  from  the Delhi Improvement Trust. The appellant executed a registered lease deed dated March 9, 1943 in respect of Plot No. 66 and with respect  to Plot No. 67, the transaction was through an oral sale  dated May 1, 1942. Each plot admeasured 590.1 sq. yards. The  appellant was  put in  possession  of  both  the plots.      The Chief Commissioner of Delhi issued the notification No. F. 6(3) 50 R & R dated December 15, 1950 under Section 3 of the  Resettlement of Displaced Persons (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(1)(b)  of the 1948 Act to assess the compensation. Both  the appellants  and the  Union of  India appeared before  the arbitrator  and  the  compensation  was determined by the arbitrator. 575      Boot the  appellants  preferred  two  separate  appeals against the  award of  the arbitrator in the then High Court of Punjab  at Delhi.  On the  formation of the High Court of Delhi both  the appeals came up before the Division Bench on two  different  dates.  The  Division  Bench  following  the decision of  the Full  Bench in  the Union  of India v. Smt. Mohinder  Kaur(1)   dismissed  the  appeals  but  granted  a certificate under  Art. 133(1)(c) of the Constitution. Hence both these appeals by certificate.      The only contention canvassed before the High Court was that Ist  and 2nd proviso to sub-clause (e) of sub-section 1 of Section 7 of the 1948 Act are violative of Sec. 299(2) of the Government  of India  Act, 1935 as it then stood and the compensation awarded  by the  arbitrator in  consonance with the provisoes  is illusory  and therefore both the provisoes are constitutionally invalid. A Full Bench of the High Court in  the   decision  hereinabove   noticed   negatived   this

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contention but  granted the certificate under Act. 133(1)(c) on the  ground that  the decision  in Union of India v. Smt. Mohinder Kaur was pending in appeal before the Supreme Court and as  the High  Court in  rejecting  the  appeals  of  the presents appellants  followed  the  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. Mohinder  Kaur’s case which  enabled the  appellants to  obtain the requisite certificate under  Art. 133(1)(c).  There was  no  clear  or straight answer  to the  query and it appears that there was no such  appeal and  therefore  on  this  short  ground  the certificate could have been cancelled. But as even the other side was  not in  a position  to shed  light on the question whether any appeal at all was preferred against the decision of the  High Court  in Smt.  Mohinder Kaur’s  case and if so what fate  it met,  we persuaded ourselves not to cancel the certificate.      Mr. K.C.  Dua, learned  counsel, who  appeared for  the appellants in  both the  appeals, was  rather  on  uncertain ground when  he first  stated  that  he  does  not  wish  to challenge the  constitution validity of Section 7 and or the provisoes to  sec. 7(1)(e)  and then later on stated that he does challenge  the two  provisoes to sub-clause (e) of sub- sec. (1) of sec. 7 on the ground that these two pro- 576 visoes are  violative of Section 299(2) of the Government of India Act, 1935.      Sec. 7(1)(e) and the two provisoes read as under :           "7.(1) Where any land has been acquired under this      Act there  shall be  paid compensation,  the amount  of      which shall  be paid  compensation, the amount of which      shall be  determined 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 (1) of           section 23 of the Land Acquisition Act, 1894 (I of           1894);           Provided that  the  market-value  referred  to  in      clause first  of subsection  (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 :           Provided further  that where  such land  has  been      held by  the 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 between the aforesaid dates, the      compensation shall  be the  price actually  paid by the      purchaser or the amount on payment of which he may have      acquired the  land in the decree for pre-emption as the      case may be."      The  1948   Act  was   enacted  to   acquire  land  for resettlement 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.  Urgent necessity was to acquire the land and that too at reasonable price. In  order to circumvent the prolix and time-consuming procedure under  the Land  Acquisition Act,  1894, a special act was  enacted. Sec.  7 broadly  provides for  payment  of

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compensation for  the land  to be  acquired for carrying out the purposes  of the  Act  and  the  manner  and  method  of computation of  compensation. Sub-clause  (e)  provides  for determining the compen- 577 sation having  the due  regard to  the  provisions  of  sub- section (1)  of the  Land Acquisition Act, 1894, that is the market price of the land on the date of acquisition. The two provisoes carve  out an  exception. 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 under Sec. 4 of the Land Acquisition Act. It is  the second  part of  the first  proviso  that  really affects the  compensation, when  it  says  that  either  the market value  referred to in the first clause of sub-section (1) of  sec. 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 market  value of the land on the first day  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 Ist day of April, 1948 but  after the Ist day of April, 1948 but after the Ist 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 Ist day of September, 1939 is thoroughly irrelevant to the payment of compensation and arbitrarily selects the date much earlier to the date of acquisition and ignores the escalation 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 Ist, 1939 does not  appear to be arbitrary but has a real nexus to the object sought  to be achieved by the 1948 Act. We are of the opinion that  the 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 declared  on September  2, 1939 and India was dragged into  it by a foreign power on September 3, 1939 and the war  situation contributed to the escalation in price of the land.  It 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 simultaneously added Art. 31-B. The Act finds its place at  plecitum 16  in the Ninth Schedule. Once an act is placed in  the Ninth  Schedule, Article  31 B  provides that either the  act or any provision thereof shall not be deemed to be void or ever to have become void on the ground of such act or any provision thereof is inconsistent with, 578 or takes away or abridges any of the rights conferred by any provision of  Part III  of the Constitution. Once the act is brought under  the umbrella  of protection  of Art.  31-B by inserting it  in the  Ninth Schedule, the act is not open to the challenge  that it  as a  whole or any provision thereof violates  or  contravenes  any  of  the  fundamental  rights contained in  Part III  of the  Constitution. The allegation here is that the two provisoes violate the guarantee of fair compensation and  therefore it  constitutes  deprivation  of property without  just compensation,  a relic  of Art. 31(2) lifted from  Sec. 299(2)  of the  Government of  India  Act, 1935.

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    The 1948  Act is  a pre-Constitution  statute.  It  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  Government of India Act, 1935 and as it was void  ab initio,  it was  not an existing law within the meaning of  expression in  Article 366(10)  and therefore is not qualified for umbrella of protection enacted in Art. 31- B.      Sec. 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  Devi singh  Gohil v.  The State  of   Bombay(1)  while  upholding  the  constitutional validity of  the Bombay Talukdari Tenure Abolition Act, 1949 on the  ground that  it was  not covered  by the umbrella of protection of  Art. 31-B  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 the Government  of India Act, 1935 and put into the Part 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. 31-B does  not make  any difference  because what  Art. 31-B protects is  not a mere ’contravention of the provisions’ of Part III  of the  Constitution but  an attack on the grounds that the  impugned act  is ’inconsistent with, or takes away or abridges  any of the rights conferred by any provision of Part III.’  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 : 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 taken away      by an Act in violation of section 299 of the Government      of India  Act which has been repealed. The intention of      the Constitution  to protect  each and every one of the      Acts specified in the Ninth Schedule from any challenge      on the  ground of  violation of  any of the fundamental      rights secured  under Part  III  of  the  Constitution,      irrespective of  whether they  are pre-existing  or new      rights, is  placed beyond  any doubt or question by the      very emphatic  language of  article 31-B which declares      that 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 judgment,  decree or order of      any  court   or  tribunal."   That  intention  is  also      emphasised by  the positive  declaration that  "each of      the said  Acts or  Regulations shall,  subject  to  the      power of  any competent  Legislature to repeal or amend      it, continue in force."      This very question again surfaced in The State of Uttar Pradesh and  Others v.  H. H. Maharaja Brijendra Singh(1) in which constitutional  validity of  U.  P.  Land  Acquisition (Rehabilitation of  Refugees) Act,  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 with  a   view  to   acquire  power   to  acquire  land  for rehabilitation of refugees and that too in the same year. It may as well be mentioned that U. P. Act XXVI of 1948 is also inserted in  the Ninth Schedule. The entry just precedes the

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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 Sec. 11 similarly worded as the two  provisoes to Sec. 7 (1) (e). Both the provisoes are in pari  materia with  the impugned  provisoes. This  Court, reversing the  decision of  the High Court and following the decision in  Dhirubha Devisingh Gohil’s case while upholding the  constitutional  validity  of  the  Act  held  that  the protection under  Art. 31B  against  the  violation  of  the fundamental rights  mentioned therein  must  extend  to  the rights under  Sec. 299  of the Government of India Act also. The reasons  which weighed  with the  Constitution Bench  of this Court  while upholding  the validity  of the U. P. Act. will 580 mutatis mutandis  apply here and we must uphold the validity of the two provisos on parity of reasoning.      It is  thus satisfactorily  established that in view of the insertion  of the  1948 Act  in Ninth Schedule it enjoys the umbrella  of protection of Art. 31-B and therefore it is immune from the challenge as violating any of the provisions in Part III 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 Collector, Thana Prant, Thana(1)  wherein this  Court struck  down  the  Land Acquisition (Bombay Amendment) Act, 1948 as constitutionally invalid would necessitate re-examination of the decisions in Dhirubha  Devisingh  Gohil’s  case  and  Maharaja  Brijendra Singh’s  case.   It  was  submitted  that  the  decision  in Jeejeebhoy’s case  comes later  in point of time both to the decision in  Dhirubha Gohil’s and Maharaja Brijendra Singh’s case, and  therefore the  later decision should prevail with this Court.  In Jeejeebhoy’s  case, this  Court repelled the contention that  the Amendment  Act is saved by Art. 31-A of the Constitution.  The  argument  of  the  learned  Attorney General that  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  in  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, 1935 was  disposed of  by merely observing that the argument is far  fetched. It  may however  be mentioned  that in this later decision,  the decisions  of the Constitution Bench in Dhirubha Devisingh  Gohil’s case  and the Maharaja Brijendra Singh’s case were merely referred to but not overruled. They were distinguished  on the ground that the statutes impugned in those  cases enjoyed the protection of Art. 31-B. 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 Jeejebhoy’s case is hardly of any assistance.      It was  lastly urged  that the  decision of  the larger Bench in  Rustom Cavasjee  Cooper v. Union of India(2) would clearly show that 581 the decision  of this Court in State of Gujarat v. Shantilal Mangaldas and Others is no more good law and therefore it is open to the Court to examine whether compensation offered by the  relevant  provisions  of  the  Statue  is  illusory  or prescribe principles  well-recognised for valuation of land. In our  opinion, this aspect is hardly relevant because once the impugned  statute or  the  impugned  provisions  of  the

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statute enjoy the protection of Art. 31-B, it is not open to the Court  to examine  whether the  principles for valuation therein  prescribed  are  relevant  to  the  land  valuation because that  question arises  where a  complaint as  to the contravention of  fundamental  rights  enacted  in  repealed Art.31 can  be entertained  and examined. That complaint has to be rejected at the threshold as soon as it is pointed 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  the  constitutional validity of  the two  provisoes to  Sec. 7(1)(e) of the 1948 Act. We  agree with  the view  taken by  the High  Court and upheld the same.      Constitutional  validity   of  the  provisoes  to  Sec. 7(1)(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 without  any  order  as  to costs.      In Civil  Appeal No.  922 of  1971 the  appellant  died pending the  appeal and substitution is sought by one Kumari Abha Gupta  basing her claim on the will dated July 27, 1980 of the  deceased. The  will has  neither been  probated  nor anywhere its validity is determined. 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 have been concluded by  this Court  granting the substitution. Subject to this condition, the substitution is granted. H.S.K.                                    Appeals dismissed. 582