Supreme Court: In a batch of appeals, exercising their appellate jurisdiction, the division bench of Krishna Murari* and S. Ravindra Bhar, J.J., held that creating an artificial classification of ‘pushtaini’ and ‘gair-pushtaini’ landholders was bad in law and created a dissonance between the object and the effect of the Land Acquisition Act, 1894 (‘Act of 1894’).
In the matter at hand, the appellants challenged the judgment passed by a full bench of Allahabad High Court which upheld the view taken by the Supreme Court division bench in the case Madhuri Srivasatava v. State of U.P., 2016 SCC OnLine All 2832 and dismissed the petitions stating that nothing remained to be decided in the petitions filed by the appellants.
To accommodate massive economic growth in Delhi, the government planned development of residential areas in Gurgaon and Noida and for the said planned development, Noida authority acquired land within its territorial area under the provisions of Act of 1894. In that connection, two notifications in 2005 and 2006 respectively were issued under Section 4 (1) and Section 6 (1) of Act of 1894 for acquiring land in different villages which also included the land of the appellants. The appellants challenged the said acquisition on the ground of arbitrarily invoking urgency clause under Section 17 (1) read with Section 17 (4) of the Act of 1894.
The High Court concluded that the urgency clause was wrongly invoked but saved the acquisition for the reason that much development had already taken place over the said land and the nature of land stood completely changed. In order to compensate the landholders, the High Court directed an additional compensation to be paid to them and a further direction was issued to allot developed Abadi land to the extent of 10% of their acquired land. The Court, however, had made no distinction between the ‘pushtaini’ and ‘gair-pushtaini’ farmers for payment of additional compensation.
Greater Noida authority had classified landholders for the purpose of payment of compensation for acquisition of their land as ‘pushtaini’ and ‘gair-pushtaini’ wherein the ‘pushtaini’ landholder were to receive a higher amount. Accordingly, the state government granted its approval for payment of enhanced compensation to the ‘pushtaini’ landholders.
Issue for consideration
I. Whether the appellants were bound by the compensation as per the agreement under the Land Acquisition rules and, by signing the agreement, have waived their right to seek enhanced compensation?
II. Whether the classification made under the Act of 1894, and the UP-Land Acquisition Rules, 1997 between ‘pushtaini’ landowners and ‘gair-pushtaini’ landowners for the payment of compensation at different rates was liable to be struck down as violative of Article 14 of the Constitution?
III. Whether the classification made by the full-bench between ‘pushtaini’ landowners and ‘gair-pushtaini’ landowners is in contravention to the law laid down by Supreme Court in the case of Nagpur Improvement Trust v. Vithal Rao, (1973) 1 SCC 500 (‘Nagpur Improvement Trust’)?
The bench clarified that they were only concerned with the legality and validity of action of Greater Noida authority paying an enhanced compensation to the landholders by carving out an artificial class of ‘pushtaini’ landholders from among the same class of landholders whose land was acquired by the same notification for the same purpose. There is no challenge to the validity of the acquisition itself as the same stood settled by the Supreme Court.
The Court stated that previously similar agreements were entered into with the authority by such identically situated landholders who had been granted additional compensation subsequent to the agreement by carving out a distinction on the basis of period of residence or occupation of the land. However, the issue of additional compensation by making an artificial classification of ‘pushtaini’ and ‘gair-pushtaini’ was not in existence at the time of the agreement, thus, no occasion arose to challenge the same.
With this observation, the Court answered issue 1 in negative and in favour of the appellants by stating that appellants could not have forfeited their right to seek revised compensation due to signing of agreement as the cause of action accrued to them much after entering into agreement.
The bench pointed out to the fact that the High Court had upheld the classification between ‘pushtaini’ and ‘gair-pushtaini’ landholders and negated the challenge made to the said classification.
The bench was of the view that the impugned classification must be put through the rigours of Article 14 to assess its validity. The Full Bench held that the classification between ‘pushtaini and ‘gair-pushtaini’ landholders was based on one class of landholders being sons of the soil, while the other class being mere landowners, who were not directly attached to the land. The object of such a classification was to rehabilitate the original residents who were likely to become landless due to the acquisition of their land.
However, the bench was of the view that the justification that ‘pushtaini’ landholders permanently resided in the subject land or that the subject land was the primary source of income was not backed by empirical data produced by the authority. Such a justification created a dissonance between the object and its effect which was creating discrimination and injustice if the same compensation that had been granted to the ‘pushtaini’ landholders was not extended to them.
The bench stated that Greater Noida authority had arbitrarily classified the landholders as ‘pushtaini’ and ‘gair-pushtaini’ landholders on the basis of a cut-off date which was an irrelevant factor. The Court was of the view that if the persisting classification was allowed to exist, it could lead to several ‘gair-pushtaini’ landholders without rehabilitation and would accordingly nullify the purpose of the Act of 1894, thus, was liable to be struck down.
With this observation, issue 2 was answered in affirmative and in favour of appellant and held that the impugned classification was liable to be struck down as violative of Article 14 of the Constitution.
The bench stated that the Supreme Court in Nagpur Improvement Trust had held that the authority, while acquiring land, could not distinguish between types of owners. Therefore, such a classification was bad in law.
The Court opined that when the purpose of the acquisition of the land was for the benefit of the public at large, then the nature of the owner of the said land was inconsequential to the purpose. If such a classification was allowed, then on the same grounds, there might be a possibility in future where powerholding members of the society may get away with a larger compensation, and the marginalized may get lesser compensation.
The Court, therefore, opined that even if such a classification had a rational nexus to the objective of the notification, the classification must also be legitimized by the parent statute. If the parent statute does not allow for such a classification, despite it passing the test of Article 14, it would still be liable to struck down. Thus, the said classification was bad in law and was liable to be set aside.
With the above stated observation, the Supreme Court set aside the judgment of the full bench of Allahabad High Court and held that the appellants were entitled to the reliefs claimed.
[Ramesh Chandra Sharma v State of U.P., 2023 SCC OnLine SC 162, decided on 20-02-2023]
Judgment authored by Justice Krishna Murari
Advocates who appeared in this case:
For the petitioner- Advocate Rohit Kumar Singh;
For the respondent- Advocate Anuvrat Sharma and Advocate Binay Kumar Das.