Madras High Court strikes down NHAI Land Acquisition Provision

              Shubhojit Ghosh                                                                                     April 27, 2011

T.Chakrapani v. Union of India

Available at http://www.indiankanoon.org/doc/1177053/

Background

The National Highways Laws (Amendment) Act, 1997 (the “Act”) amended the National Highways Act, 1956 and the National Highways Authorities Act, 1958, with the object “to create an environment to promote private investment in national highways, to speed up construction of highways and to remove bottlenecks in their proper management.” Among the various sections inserted by the Act into the National Highways Act, 1956 and the National Highways Authorities Act, 1958, was the insertion of Section 3J to the National Highways Act, 1956, which stated that “Nothing in the Land Acquisition Act, 1894, shall apply to an acquisition under this Act.”

Petitioners Contentions

The Petitioners challenged the Act on the ground that the Parliament has no power to enact a law, diametrically opposite to the Land Acquisition Act, 1894 (the “Land Acquisition Act”) to acquire land.

First Contention: The primary contention of the Petitioners was that while the other sections inserted into the National Highways Act, namely Sections 3A, 3C, 3D, 3E and 3G were similar to the analogous sections of the Land Acquisition Act, the insertion of Section 3J has excluded the application of the Land Acquisition Act, with the sole object to deny solatium and interest payable under the Land Acquisition Act for compulsory acquisition and also to deny the right of appeal against the compensation determined by the competent authority. The challenge was that Section 3J would be hit by Article 14 of the Constitution of India, as it discriminates with regard to payment of compensation, in the case oof ascuisition under two different Acts. In support of this contention, the Petitioners placed reliance on the judgement of the Supreme Court in the case of State of Madhya Pradesh v. G.C. Mandawar, AIR 1954 SC 493, wherein it was held that, “On those provisions, the position is that when a law is impugned under Article 13, what the Court has to decide is whether “that” law contravenes any of the provisions of Part III. If it decides that it does, it has to declare it void, if it decides that it does not, it has to uphold it. It is conceivable that when the same legislature enacts two different laws, but in substance they form one legislation, it might be open to the Court to disregard the form and treat them as one law and strike it down; If in their conjunction they result in discrimination.”

Second Contention: The jurisdiction of the Government under the doctrine of “emenint domain” is based on two Latin maxims. (i) Isulus populi supremaest (The regard for public welfare is the highest law) (ii) Necessitis publica majorest quam private (Public necessity is greater than private necessity). The contention was that in the absence of public purpose, no law can be enacted, to acquire the land of a private person. The contention was based on the ground that public purpose has not been defined in the Act.

Third Contention: The third contention was that the absence of a right to appeal a determination of compensation determined by the competent authority and that the aggrieved party can only approach the Arbitrator appointed by the Central Government was ultra-vires the Constitution of India.

Judgment

Hon’ble Justice Sharma, rejected the Plaintiffs’ contention that in the absence of public purpose, no law can be enacted, to acquire the land of a private person (Second Contention) stating that, as by way of amendment to the National Highways Authority of India Act, 1988, in Section 13, it has been made clear, that any land required by the authority for discharging its function under this Act, shall be deemed to be the land needed for public purpose, and that the land may be acquired by the authorities under the provisions of National Highways Act, 1956 and that it cannot, therefore, be said that there is no public purpose, in acquisition of the land under the Act.

The Plaintiffs’ contention was that the absence of a right to appeal a determination of compensation determined by the competent authority and that the aggrieved party can only approach the Arbitrator appointed by the Central Government was ultra-vires the Constitution of India (Third Contention) was also rejected by Justice Sharma for the reason that it is well settled law, that right of appeal is only a right created under the statute, merely because right of appeal is not provided under a statute, it cannot make a provision to be ultra vires the Constitution of India, specially when the remedy is provided to challenge the determination of the market value.

First Contention: Relying on State of Madhya Pradesh vs. G. C. Mandawar (supra) Hon’ble Justice Sharma stated that, when the proposition that when the same Legislature enacts two different laws, but in substance, they form one legislation, then it is open to the Court to discard the form and treat them as one law, and strike it down if in their conjunction, they result in discrimination, is applied, it leaves no manner of doubt that Section 3-J results in discrimination to the land owners whose land is acquired under this Act with those land owners where land is acquired for public purpose, under the Land Acquisition Act, therefore, Section 3-J on the face of it, is violative of the Constitution, as it does not satisfy the well known test of reasonable classification, permissible for enacting the legislation.

The discrimination is also not based on any intelligible differentia, nor this differential has a rational nexus with the object sought to be achieved, namely, compulsory acquisition of land for a public purpose.

Justice Sharma also rejected the contention of the learned Advocate General that it is open to the State to make laws, to deprive a person of the property by payment of compensation would not include payment of solatium, observing that it is only in cases where in order to achieve the directive principles under the Constitution, that the laws are made for benefit of class of people like Ceiling Act etc., that the courts have upheld the laws, because of their inclusion under Schedule-9 of the Constitution, therefore, it cannot be said that the Act is not open to challenge merely because of Article 31-A of the Constitution of India, when it is not open to same Legislature to frame different laws dealing with same subject.

Decision

It was held that Section 3-J of the National Highways Act does not satisfy the test of reasonable classification permission for the purpose of legislation to acquire land under the Acquisition Act and under the Act, for public purpose, specially when the Act is also framed by the same Legislature, therefore, it is not permissible to discriminate between persons with regard to payment of compensation.

All the writ petitions were allowed, while upholding other provisions of the Act, Section 3-J of the Highways Act was held to be unconstitutional, being hit by Article 14 of the Constitution of India, being in excess of legislative competence