UDAI RAM SHARMA AND OTHERS ETC. versus UNION OF INDIA AND OTHERS

UDAI RAM SHARMA ANI) OTHERS ETC.

UNION OF INDIA &"ID OTHERS

February 1, 1968

(K. N. WANCHOO, CJ., R. S. BACRAWAT, G. K. MITTER AND C. A. VAIDIALINGAM, JJ.J .

Land Acquisition (Amendment and Vclidation) Act, 13 of 19~7, ss. 2, 3, 4, 5-Validity of Act-Validation of past invalid reports under s. 5-A of Lafrd Acquisition Act 1894 and declarations under s. 6 without removal of lacuna in substantive law wheth£r an encroachntent on judicial power by the legislature-Amendment whether violates Arts. 14 and 31 (2) of Constitution of India 1950.

In the Stal;, of Madhya Pradesh v. V. P. Sharma, [1966) 3 S.C.R. 557 is Court held that once declaration under s. 6 of the Land Acquisition Act 1894 was made the notification under s. 4(1) of the Act was exhaust-ed and there could be no 'Successive notifications under s. 6 with resocct to land in locality specified in one notification under s. 4(1). Relying on the above judgment the present writ petitions were filed in order to chal-lenie successive notifications under s. 6 following single notification under s. 4(1) in respect of land belonging to them. Meanwhile in order to meet the situation created by the judgment in V, P. Sharma' s case the President of India promulgated the Land Acquisition (Amendment and Validation) Ordinance (I of 1967). The Ordinance .was later followed by the Land Acquisition (Amendment and Validation) Act 1967. Section 2 of this Act purported to amend s. 5-A of the principal Act by allowing It the making of more than one report in .respect of land which had been notified under s. 4(1). Section 3 purported to amends. 6 of the principal Act' .hY emPQ__wering different declarations to be made from time to time in respect of different parcels of land covered by the samei notification under s. 4(1) irrespective of whether one report or different reports had been made under s. 5-A sub-s. (2). Section 4 of the Act purported to validate all acquisitions of land made or purporting to have been made under the principal Act before the commencement of the ordinance namely January 20, 1967, notwithstanding that more than one declaration under s. 6 had been made in pursuance of the same notification under s. 4(1), and not-withstanding any judgment, decree or order of any court to the contrary. The Amending Act also laid down time limits for declarations under s. 6 of the principal Act after the notification under s. 4( 1) had been issued in respect of notifications made after January 20, 1967 the ·time limit was three years; in respect' of notification made before that date the time limit was to be two years after that date. Provision was also made for pay· ment of interest on compensation due to persons in respect of whose land declarations under s. 6 had been delayed beyond specified period; no interest was however, to be paid to those to whom compensation h~d already been paid.

The petitioners by leave of Co'urt amended their petitions to attack the validity of t~e aforesai~ Validating Act pn the follo~ing m.ain grounds : ( 1) By seeking to validate past transactions of kind which had been declared invalid by this Court without retrospectively changing the subs-. tantive law. under which the past tr.:nsactions had been effected the legisla-ture Was encroaching over the domain of the judicial power vested by tho Constitution in the judiciary exclu.sively; (ii) The Validating Act did not L4Sup. C.1./68-4

SUPREME COURT lll!POllTS

revive the notification under s. 4 which had become exhausted after the first declaration under s. 6 and no acquisition following thereafter could be made without fresh notification under s. 4; (iii) The Validating Act violated Art. 31(2) of the Constitution inasmuch as it purported to authorise acqµisitions without fresh notifications under 5. 4 thereby allow· ing compensation to be paid on the basis of the said notification uruler s. 4 without allowing for increase in the value of land thereafter; (iv) The Validating Act violated Art. 14 of the Constitution in various ways.

HELD: Per Wanchoo C.J., Bachawat & Mitter, JJ.-(i) The American doctrine of well defined separation of legislative and judicial powen has no application to India and it cannot be said that an Indian Statute ,which seeks to validate invalid actions' is bad if the invalidify has already been pronounced upon by court of law.

A. K. Gopala11 v. Sir.le, [1950) S.C.R. 88, referred to.

(Ii) The absence of provision in the amending Act to give retrospec· tive operation to s. 3 of the Act does not affect the validity of s. 4. It was open to Parliament to adopt either course e.g. (a) to provide expressly for the retrospective operation of s. 3, or, (b) to Jay down that no acqui-sition purporting to have been made and no action taken before the Land Acquisition (Amendment and Validation) Ordinance, 1967 shall be deemed ro be invalid or even to have become invalid because, intn alia, of the lllllking of more than one declaration under s. 6 of the Land Acquisition Act, notwithstanding any judgment decree or order to the contrary. Parlia-ment was competent to validate such actions and transactions. its power in that behalf being only circumscribed by appropriate entries in the Lists of the Seventh Schedule and the fundamental rights set.(<ith in Part Ill of the Constitution. Section 4 of the Amending Act being within the legislative competence of Parliament, the provisions thereof are binding on all courts of law notwithstanding judgments, orders or decrees to the contrary rendered or made in tbe past. [67 C-F]

Case-1aw referred to.

(iii) The impugned Act does not violate Art. 31(2).

"fhe Act does not in express terms enact any law which directly affects compensation payable in respect. of property acqvired nor does it lay down r any principles different from those which were already in the Land AC'!Ui-sition Act of 1894. After the amendment of the Constitution in 1955 the quest.ion of compensation is not justiciable and it is enough if the law pro--vides that person expropriated must be given compensation for his· pro-perty or lays down the principks therefor. [67 G-H]

The Legislature might well have provided in the Act of 1894 that it would be open to the appropriate Government afte'r issuing notification under s. 4 to consider objections raised under s. 5 with regard to the different localities from time to time enabling different reports to be made under s. 5-A with consequent adjustments in s. 6 providing for declarations to be made as and when each report under •· SA was conside<ed. By the validation of action taken under s. 6 more than once in respect of single notification under s. 4, the original scheme of acquisition is not altered. The public purpose behind the notification remains the same. It is not as if different public purpose and acquisition of land for such purpose wer~ be~g interploated by means of t~~ Validating Act. Only the short· conungs 1n th.e Act as to want to prov1Sion to enable more than one decla-ration under s. 6 are being '.removed. [68 D-F]

'Ibo date of valuation under the Validation Act is that of the i~ue of notification Wlder s. 4(1), principle which has held the field since 1923. Legislative competence to acquire laud under the provisions of the Land Acquisition Act cannot be c:llallenged because of constant appreciation of laud values all over the country dUe to the prevalent abnormal inflation. There must be some time Jag between the commencement and conclusion of land acquisition proceedings and in principle there is nothing wrong in accepting the said commencement as the date of valuation. Sections 4 and 23 of the Land Acquisition Act are protected by Art. 31(5)(a) of the Constitution. Only ss. S-A and 6 of the Act have been amended. The amendment does not alter the principle of compensation fixed by the Act nor contlcavene Art 31 of the Constitution ill aoy way. [69 G-70 BJ

It cannot be said of the Validating Act that it was fixing an arbitrary date for the valuation of the property which bore no relation to the acqui-sition proceedings. The population in Indian cities especialJy in the capital is ever-increasing. 'Ibe State has to plan the development of cities and it is not ,possible to take up all schemes in all directions at the same time. 'Ibe "'80tl?ces of the State may not be sufficient to acquire all the area re-quired by scheme at the same time. Of necessity the area under the proposed acquisition would have to be carved into blocks and the develoP-ment of one or more blocks at time could only be taken up in consonance with the reoources available. Even contiguous blocks could be developed gradually and systematically. In view of such factors it cannot be said that the principle of fixing compenaation on the basis of the price prevailing on the date of the notification under s. 4(1) of the Land Acquisition Act was not relevant principle which satisfied the requirements of Art, 31(2). [70 C-71 HJ

The State of Wut Bengal v. MTS. Bela BlW!riee. [1954J , S.C.R. 558, State of Madras v. D. Namasivuya Muda/iar, ~1964J 6 , S.C.R. 936 and P. V. Mudalior v. Deputy Collector, [1965J 1 S.C.R. 614, considered.

(iv) The validating Act was not violative of Art. 14.

Whenever an Amending Act is passed there is bound to be some difference in matment between transactions which have already taken place and those which are to take place in the future. That by itself will not attract the operarion of Art. 14. Again, even with respect to transac'ions which may be completed in the future, reasonable classification will not be struck down. [72 CJ

lalan Trading Co. v. Mavloor Union, [1967] 1 S.C.R. 15, relied on.

It is not p<JSSiblc to say that because the Legislature thought of improv- , ing upon the Act of 1894, by prescribing certain limits of lime as from 20th January 1967 the difference in treatment in cases covered by the noti-fication before the said date and after the said date denies equal protection of laws because the transactions ate not similarly circumstanced. Some of the notifications issued under s. 4 must have been made even more than 3 years before 20th Janua'ry, 1967 and such cases obviously could not be treated in the same manner as notifications issued after that date. Art. 14 does not strike at. differentiation caused by the enactment of law between transactions governed thereby and those which are not so governed. [73 H-74 Bl

Hatisingh Manufacturing Co. Ltd. v. Union of Indid, [1960J 3 S.C.R. 528.

No grievance can be made because interest is denied to persons who have already taken the compensation. Even here the classification is not unreasonable and cannot be said to be unrelated to the object of the Act. [74 E-FJ

Per Shela! and. Vaidialingam, JJ. (dissenting)-

By validating .the acquisition orders and declarations made on the basis of an exhausted notification under s. 4 the impugned Act saves government from having to i .. ue fresh notification and having to pay compensation calculated on the market value as on the date of such fresh notification and depriving the expropriated owner of the benefit of the appreciated value in the meantime. 1be real object of s. 4 of the impugn· ed Act is thus to save the State from havmg to compensate for such appreciation under the de.vice of validating all that is done under an exhausted s. 4 notification and thus in reality fixing an an!e!rior date i.e. the date of such dead s. 4 notification for fixing the compensation. The impugned Act thus suffers from two fold vice : (i) that it purports to validate acquisitions orders and notifications without resuscicating the notification under i. 4 by any legisla.tive provision on the basls of which alone the validated acquisitions, orders and declarations .can properly be sustained and (ii) that its provisions are in derOgation of Art. 31(2) as interpreted by this Court by fixing compensation on the basis of value on the date of notifications under s. 4 which had become exhausted and for keeping them/ alive no legislative provision is to be found in the impugned Act. It is therefore not possible to agree with the view that the pUJ'P(lSe of s. 4 is to fill the lacuna pointed out in Shamuis case nor with the vieJIV that it raises question of adequacy of compensation. The section under the guise of validating the acquisitions, otders and notifications camouftages the real object of enabling acquisitions by paying compensation on the basis of values frozen by notifications under s. 4 which by Part acquisitions thereunder had lost their efficacy and therefore required the rest of the land to be notified afresh and paying compensation on the date of such fresh notificatiollJl. The fact that neither s. 4 nor s. 23 of the principal Act are altered does not make any difference. (89 D-H, 85 HJ

Section 4 of the Anlending Act must therefore be struck .down as invalid. [90 Al

ORIGINAL JURISDICTION: Writ Petitions Nos. 114, 216, 223 and 252 of 1966 and 85 of 1967.

Petitions under Article 32 of the Constitution of India for the enforcement of fundamental rights.

C. B. Agarwala and K. P. Gupca, for the petitioners' (in W.P.s Nos. 114, 216 and 252 of 1966 and 85 of 1967.)

R. V. S. Mani and K. P. Gupta for the petitioner (in W.P. No. 223 of 1966).

Niren De, Solicitor-General, B. R. L. Iyengar and R. N. Sach-they for the respondents (in W.Ps. Nos. 114 and 216 of 1966).

Niren De, Solicitor-General, R. H. Dhebar lll)d R. N. Sach-they, for respondents Nos. 1 to 5 (in W.P. No. 223 of 1966 and the respondents (in W. P. No. 85 of 1967).

R. N. Sachfhey, for respondent No. 9 (in W. P. No. 223 of 1966).

M. K. Ramamurthi, Vineet Kumar and Shyamala Pappu for respondents Nos. 12(a) to 12(d) (in W.P. No. 223 of 1966).

V. A. Seyid Muhammad and R.H. Dhebar and R. N. Sach-they, for respondents Nos. 1 to 5 (in w. P. No. 252 of 1966). P. C. Bhartari, for the intervener (in W.P. No. 114 of 1966). The Judgment of WANCHOO, C.J., BACHAWAT and MITTER, JJ. was ·delivered by MITTER, J. The dissenting opinion of SHELAT and VAIDIALINGAM, JJ. was delivered by Sm!LAT, ].

Mitter, J. This is group of five Writ Petitions under Art. 32 of the Constitution challenging in four cases the validity of land acquisition proceedings started by notification dated November 13, 1959 under s. 4 ofl the Land Acquisition Act and declarations contained in other notifications dated March 18, 1966 onwards under s. 6 of the said Act and for other incidental reliefs including the issue of appropriate writs for the purpose. Various persons have joined as petitioners in three of the applications. In Writ Petition No. 114 of 1966 the petitioners number 61. They all own lands in village Mandawali Fazilpur, on Patparganj Road within the union territory of Delhi, the notification of the declara-D tion under s. 6 having been made on March 18, 1966. In Writ Petition No. 216 of 1966 there are 71 petitioners who also own lands in the same village. Their complaint is based on the same notification under s. 4 and notification dated July 12, 1966 under s. 6 of the Act. In Writ Petition No. 223 of 1966 the single peti-tioner is Pandit Lila Ram who owned lands in villages Masjid Moth, Raipur Khurd and Shahpur Jat respectively withi.n the union territory of Delhi. His complaint is based on s. 4 notification dated September 3, 1957, notification dated April 15, 1961 under s. 6 of the Act and several awards of Land Acquisition Col-lector, Delhi made in 1961. In Writ Petition No. 252 of 1966, there are eight petitioners who owned lands in village Kotla at Patparganj Road within the union territory of Delhi. Their griev-F ance is against s. 4 notification dated November 13, 1959 and notification dated June 14, 1961 under s. 6 of the Act. In Writ Petition No. 85 of 1967 the sole petitioner is ·one Rai Bahadur Sohan Lal who owned land in village Kilokri on the Delhi-Mathura Road within the union territory of Delhi. His grievance is against s. 4 notification dated November 13, 1959, notification dated July 27. 1961 under s. 6 of the Act and an award dated February 16, 1962.

Although there are some distinctive features in some of the petitions to be mentioned later, the common attack is based on the judgment of this Coun delivered on February 9, 1966 in State of Madhya Pradesh v. V. P. Sharma('). That case arose out of proceedings for acquisition of land in eleven villages in Madhya Pradesh for the steel plant at Rourkela. There notification had been issued under s. 4(1) of the Land Acquisition Act on May 16.

SUP&l!MB COUl.T UPOl.TS

1949 declaring that lands in eleven named vi~ages were .likely to be needed for a.. public_ purpose i.e., the erect.ion of an uon and steel plant. Thereafter, notifications were issue<;! under s. ~ fr<>!11 time to time and some lands in village Chhawam were acquued Ill the year 1956. In August 1960 fresh notification under s: 6 of the Act was issued proposing to acquire Ac. 486-~ 7 of land Ill the said village. Some owners of the land in the village who were affected by the notification filed writ petition challenging the validity of the notification under s. 6. The High Court accepted their contention whereuJ>On the State of Madhya Pradesh came up to this Court in appeal. It was held by this Court that ss. 4, 5~A and 6 of the Land Acquisition Act were integrally connected and that acquisition always began with notification under s. 4(1) followed by consideration of all objections thereto under s. 5-A and declaration under s. 6, According to this Court, once declaration under s. 6 was made the notification under s. 4(1) was exhausted and the latter section was not reservoir from which the Government might from time to time draw out land and make declaration with respect to it successively. The ultimate conclu-sion was that there could be no successive notifications under s. 6 with respect to land in locality specified in one notification under s. 4(1) and in the result, the appeal of the State was dismissed. The present Writ Petitions were all filed after the said judgment of this Court.

The omnibus notification under s. 4 in four of these cases dated November 13, 1959 covered an area of Ac. 34,070-00 marked as blocks Nos. to T and X in map enclosed with the notification excepting therefrom certain classes of lands, namely, (a) Govern-ment land and evacuee land, (b) land already notifi~ either under s. 4 or under s. 6 of the Act for any Government scheme, (c) land already notified either under s. 4 or under s. 6 for house building co-operative societies mentioned in annexure (iii) to the notification and the land under graveyards, tombs, shrines and those attached to religious institutions and wakf property. The notification stated that land was required by the Government at the public expense for public purpose, namely, the planned development of Delhi. As already noted, there were sevetl!l notifications under s. 6 made from time to time, the earliest one in this series of petitions being dated June 14, 1961. It is clear that on the basis of the judgment of this Court the validity of the notifications under s. 6 of the Act after, the first of the series could not be upheld in court of law.

On January 20, 1967 an Ordinance was promulgated by the President of India styled The Land Acquisition (Amendment and Validation) Ordinance (1 of 1967). The scheme of the Ordinance was that the Land Acquisition Act of 1894 was to have effect, subject to the amendments specified in ss. 3 and 4 of the Ordin-

ance. Section 3 purported to amend s. 5-A of the Land Acquisition Act (hereinafter-referred to as the principal Act) by enabling diffe-rent reports to be made in respect of different parcels of land under s. 5-A of the Act. Similarly, s. 4 of the Ordinance purported to amend s. 6 of the principal Act by enabling different declarations to be made from time to time in respect of different parcels of land covered by the same notification under s. 4. Section 5 of the Ordinance purported to validate all acquisitions of land made or purporting to have been made under the principal Act before the commencement of the Ordinance, notwithstanding any judgment, decree or order of any· court to the contrary.

On April 12, 1967 Parliament passed an Act (Act 13 of 1967) styled The Land Acquisition (Amendment and Short Title Valida-c tion) Act, 1967. Section 2 of this Act purported to amends. 5-A of the principal Act to allow the making of more than one report in respect of land which had been notified under s. 4(1). Section '3 similarly purported to amends. 6 of the principal Act by empower-ing different declarations to be made from time to time in respect of different parcels of land covered by the same notification under s. 4(1) irrespective of whether one report or different reports had been made under s. 5-A sub-s. (2). Clause (ii) of s. 3 inserted new proviso to s. 6(1) reading:

"Provided that no declaration in respect of any parti-cular land covered by notification under section 4, sub-section (1), published after the commencement of the Land Acquisition (Amendment and Validation) Ordin-ance, 1967, shall be made after the expiry of three years from the date of such publication."

As good deal of argument turns on the interpretation of s. 4 of the Amending Act, it is necessary to set the same out in extenso :

"4. (1) Notwithstanding any judgment, decree or order of any court to the contrary,-(a) no acquisition of land made or purporting to have been made under the principal Act before the com-mencement of the Land Acquisition (Amendment aaa Validation) Ordinance, 1967, and no action taken or thing done (including any order made, agreement enter-G ed into, or notification published) in connection with such acquisition shall be deemed to be invalid or ever to have become invalid merely on the ground-

(i) that one or more Colleciors have performed the functions of Collector under the principal Act in respect of the land covered by the same notification under sub-H section (1) of section 4 of the principal Act; (ii) that one or more reports have heen made under sub-se9tion (2) of section 5-A of the principal Act, whe-

ther in respect of the entire land, or different parcels thereof, covered by th6 same notification under sub-section (1) of section 4 of the principal Act;

(iii) that one or more declarations have been made under section 6 of the principal Act in respect of diffe-rent parcels of land covered by the same notification under sub-section (1) of section 4 of the principal Act;

(b) any acquisition in pursuance of any notification published under sub-section (1) of section 4 of the prin-cipal Act before the commencement of the Land Acqui-sition (Amendment artd Validation) Ordinance 1967. may be made after such commencement and no such acquisition and no action taken or thing done (including any order made, agreement entered into or notification published), whether before or after such commencement, in connection with such acquisition shall be deemed to be invalid merely on the ~rounds referred to in clause (a) or any of them.(2) Notwithstanding anything contained in clause (b) of sub-section (1), no declaration under section 6 of the principal Act in respect of any land which has been notified before the commencement of the Land Acquisi-tion (Amendment and Validation) Ordinance, 1967, under sub-section (1) of section 4 of the principal Act, shall be made after the expiry of two years from the com-mencement of the said Ordinance.

'(3) Where acquisition of any particular land covered by notification under sub-section ( 1) of section 4 of the principal Act, published before the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967, is or has been made in pursuance of any declaration under section 6 of the principal Act, whether made before or after such commencement, and such declaration is or has been made after the expiry of three years from the date of publication of such noti-fication, there shall be paid simple interest, calculated at the rate of six per cent per ;mnum on the market value of such land, as determined under section 23 of the principal Act, from the date of expiry of the said period of three years to the date of tender of payment of com-pensation awarded by the Collector for the acquisition of such land :

Provided that no such interest shall be payable for any period during which the proceedings for the acquisi-tion of any land were held up on account of stay or injunction by order of court :

Provided further that nothing in this sub-section shall apply to the acquisition of any land where the amount of compensation has been paid to the persons interested before the commencement of this Act."

Section 5 of the Amending Act repealed the Land Acquisition (Amendment and Validation) Ordinance, 1967 and further pro-B vided that notwithstanding such repeal, anything done or any action taken under the principal Act as amended by the said Ordi-nance shall be deemed to have been done or taken under the principal Act as amended by. this Ace as if this Act had come into force on the 20th January, 1967.

The petitions before us were amended by leave of the Court so that the Validation Act of 1967 could. be challenged. Mr. C. B. Agarwala who appeared for the petitioners in Writ Petitions Nos. 114, 216, 252 of 1966 and 85 of 1967 raised the following points in support of the petitions : (1) The Validation Act does not revive the notification under s. 4 which had become exhausted after the first declaration under s. 6 and no acquisition could be made without fresh notification under s. 4. (2) The Validation Act violated Art. 31(2) of the Constitution inasmuch as it pur-ported to authorise acquisitions without fresh notifications under s. 4 thereby allowing compensation to be paid on the basis of the dead notification under s. 4. It was argued that once notifica-tion under s. 4 was exhausted Government had. to make fresh one under the said section; as result thereof;compensation had to be assessed on different basis altogether. (3) The Validation Act vioiated Art. 14 of the Constitution in various ways :-

(a) It made discrimination inasmuch as notification under s. 4 made before the commencement of the Ordinance had to be followed by declaration under s. 6 within two years of the said date, whereas if notification um!er s. 4 was made after 20th January 1967 i.e. the date of the Ordinance, the declaration under s. 6 could be made within period of three years from th~ date of the notification under s. 4. The discrimination lay in the fact that whereas declaration under s. 6 had to be inade in respect of notification under s. 4 bearing date subsequent to 20th Janu-G ary 1967 within three years, much longer period of time might elapse between date of declaration under s. 6 and notification under s. 4 issued prior to the date of the Ordinance.(b) If notification under s. 4 was made after the date of the Ordinance, compensation had to be paid on the basis of such notification but if notification had been made under s. 4 of the· Act before the date of the Ordinance, compensation would be awarded on the basi~ of the exhausted notification under s. 4 however much time might have elapsed since the date of the dead notification.

SUPREME COUllT .REPORTS

(c) coi:p.yensati()n ha. not been paid before the Ordinance, interest at 6% had to be paid to the owner of the land on the .amount of compensatjon fixed, but if the owner had received.com-pensation before the date of the Ordinance, he had no clalDl to interest although the acquisiti!Jn in both cases flowed from the same notification under s. 4.

( d) It was open to Government to make fresh notification under s. 4 after the lapse of threo:> years from the date of the Ordi-nance and such notification might be issued after every period of thro:>e years in any case where acquistion was not completed. In such cases, owners of land would be substantially benefited by the new notification under s. 4. But if notification had been made before the date of the Ordinance, the owner of the land would receive compensation based on the old notification although period much longer than three years might elapse between the date of the notification under s. 4 and declaration under. s. 6, his only solatium being interest at 63 p.a. on the amount of the com-pensation. This would result in discrimination inasmuch as per-son affected by s. 4 notification prior to the date of the Ordin-:ance would be treated very differently from another person whose land was acquired in terms of notification made after the com-mencement of the Ordinance.

On the first point, it was argued by Mr.· Agarwala that ss. 2 and 3 of the Amending Act had no retrospective operation, that there was no law which purported to validate retrospectively any but the first report ma~e under s. 5-A of the principal Act or aey but the first declaration issued under s. 6 of the Act and con-sequently there was no legal basis for the validation of such past acts. by the operation of s. 4 of the Amending Act. It was there-fore argued that the defect in the principal Act as pointed out by this Court in V. P. Sharmcts case(') was not removed by s. 4 of the Amending ~ct. It was urged that Acts so:>eking to validate past transactions .~an only be effective if the amendment introduced had retrospective operatio11 so as to cure the lacuna in the enactment from date anterior .to that of the impugned transactions. If the Amenc,!jng Act had no retrospective opera-tion, it could not protect past traµsactions which would still have to be declared invalid inasmuch as the notification under s. 4 made on November 13, 1959 having exhausted itself after the first declaration under s. 6 was not resusciated by any provision of the Amending Act.

On the second point, the broad contention urged was that the amendment was hit by Art. 31(2) of the Constitution inasmuch as its whole purpose was to avoid payment of enhanced compen-sation which would be necessitated if fresh notification had to be issued under s. 4. The notification dated November 13, 1959

(1) [19661 3 S.C-R. 557.

having spent itself, fresh one in the normal course would have to be issued and compensation be paid not on the basis of valua-tion on November 13, 1959 but on that prevailing at least 8 or 9 years afterwards which would be substantially higher. . It was argued that acquisition on the basis of any declaration under s. 6 of the Act after the first one would in effect be providing for 8 compensation on the basis of notification under s. 4 which had no relation to the acquisition. In other words, the date of the earlier notification under s. 4 must be treated to be an arbitrary date divorced from and· completely alien to the acquisition sought to be made by subsequent declaration under s. 6. In such circumstances, the ratio of number of decisions of this Court starting from that of The State of West Bengal v. Mrs •. Bela Banerjee(') to .a recent judgment in Union of India v. ,Kamalabai Harjivandas Parekh and others(') would apply. It is not neces-sary to examine all these decisions in detail. The notable deci· sions to which reference was made at some length are P. V. Muda-liar v. Dy. Collector('), Jeejeebhoy .v. Asstt. Collector(') and State of Madras v. D. Namasivaya Muda/iar([6]). It was argued that though the Land Acquisition Acfwas saved by Art. 31(5)(a) of the Constitution, any amendment thereto after the coming into force of the Constitution had to pass the test of Art. 13 and Art. 31(2) would apply with full force to any amendment of the Land Acquisition Act if as result thereof person expropriated was being deprived of compensation, i.e., the just equivalent of the property acquired. TI\e point sought to be made was that the notification of November 13, 1959 having exhausted itself, the value of the property at or about that date would be illusory com-pensation in violation of Art. 31 (2) in respect of declaration under s. 6 made after the first one of the series. Reference was made to proceedings for compulsory acquisition of land in Eng-F land under the Lands Clauses Acts under which "once the under-takers or authority .are authorised to purchase, the next step in the normal course 1s to serve notice to treat"-see Halsbury's Laws of England, third edition, Vol. 10, page 60, Art. 97. - It is pointed out in Art. 102 of the said book that

"The effect of serving notice to treat is to estab-G lish relation analogous in some respects to that of purchaser and vendor, relation which binds the under-takers to take the land and binds the land-owner to give up the land subject to his being paid compensa-tion, but until the price is ascertained the land remains the property of the landowner. Both parties have the

(!) [1954) S.C.R. 558. (2) C.A. 1564/1966 decided on 7+1967, (3) (1965] 1 S.C.R. 614, (4) [i965] 1 s.c.R. 636. (5) [1964] 6 S.C.R. 936.

(1968] 3 S.CR.

right to have the price ascertained and the purchase completed in manner provided by the Lands- Clauses Acts."

It was said that the English procedure ensured the payment of just equivalent of the property to the person who was deprived of it and that issue of declaration under s. 6 made years after the notification under s. 4 the date· of which alone was to be con-sidered for fixing the value of the property, ignored the rights of the person to the lawful compensation aimed at by Art. 31 (2) of the Constitution. Reference was made to the judgment of the Judicial Committee of the Privy Council in Ezra v. Secretary of State for India(') where ori reference to the sections of the Land Acquisition Act as they then stood,< it was observed :"that the expert official charged with the duty of fix-ing value shouldl>e possessed of all the information in the hands of the department, and should at the same tiine avail himself of all that is offered at the enquiry, his ultimate duty being not to conclude the owner by his so-called award, but to fix the sum, which in his best judgment is the value and should be offered."

On the question of violation of Art. 14 of the Constitution, besides the general argument already referred to, it was urged that in Writ Petition No. 85 of 1967 there was further point as to discrimination. The facts laid in this petition are as follows. · The petitioner was the owner of land measuring. Ac. 10--62 in village Kilokri. He wanted to develop the land by establishing residential colony and selling the same out in plots. For this purpose; he had spent good deal of money and taken enormous trouble and divided the area after development into 78 residential plots. In 1956 he had submitted lay out plan of the land in question for necessary sanction to the Delhi Deve-lopment Provisional Authority. On June 18, 1956 he was in-formed by the Delhi Development Provisional Authority that the final lay out plan had becen approved by the said authority. In September 1957 the said authority demanded from the petitioner security for Rs. 12,850-25 ,as guarantee for carrying out the development of the colony in accordance with the approved standards and this sum was duly deposited by the petitioner.. On September 15, 1958 the petitioner submitted service plans in respect df his colony and these were dllly checked and found to be in order : the case was ordered. to be placed before the Stand-ing Committee of the Municipal Corporation for approval. By December 24, 1958 the Standing Committee referred the case

UDAI RAM .SHARMA v. UNION (Mitter, J.)

back to the Town Planner for scrutiny Qf the ownership docu-ments. . The question relating to the proof of ownership was settled on March 19, 1961. In the meantime, the notification dated November 13, 1959 had been issued under s. 4(1) of the Act. The petitioner duly filed his objections under s. 5-A of the Act. By notification dated July 1, 1960 published by the Delhi Administration the Chief . Commissioner, Delhi, withdrew the land of 16 .. colonies from the acquisition out of the area covered by the notification of November 13, ·1959 on the ground that their lay out plan had been sanctioned by the Delhi Municipal Corporation and as per general decision of the Standing Com• mittee, Delhi Municipal Corporation, the petitioner was asked by the Town Planner by letter dated April 16, 1960 to submit de-notification certificate. to the effect that the land comprising the. proposed lay out of his colony was excluded from the purview of the notification issued under s. 4 of the Act. On June 14, 1961 the Deputy Housing Commissioner, Delhi Administration, issued the first notification under s. 6 of the Act in respect of 97 bighas and 4 biswas of land in village Kilokri as required by the Governmenf for public purpose at the public expense, namely, the planned development of Delhi. The petitioner's land was not covered by this notification. The Deputy Housing Com-missioner, Delhi Administration, purported to. issue another noti-fication dated 26/27th July, 1961 under s. 6 of the Act declaring that land specified therein in village Kilokri was reqajred to be taken by the Government at public expense for public purpose. This notification covered·the. petitioner's land in question in village Kilokri. On January 9, 1962 the petitioner was informed by letter issued by the office of the Town Planner, Municipal Cor-poration, Delhi,, that the. Standing Committee of the Municipal Corporation by its resolution No. 1190 dated December 18, 1961 had rejected the lay out plan of the petitioner's colony. Accord-ing to the petitioner, this resolution went to show that his land was sought to be acquired because it had not been de-notified along with the land of the other colonies on the ground that the Standing Committee. had rejected the lay out plan of his colony. Thereafter the Land Acquisition Collector, De]hi, made an award No. 1276 dated February 16, 1962 with respect to the petitioner's said land. In March 1965 the petitioner learnt about the notifi-cation issued by the Delhi Administration 0n July 1, 1960 under s. 48(1) of the Act withdrawing the land of the 16 colonies men-. tioned therein from the acquisition out of the area covered by the notification dated November 13, 1959 on the ground that their lay. out plan had bee.n sanctioned by the Delhi Municipal Corporation. By letter dated March 10, 1965 the petitioner asked the Deputy H~using Commissioner, Delhi Administration, for restoration of his land on the same basis because liis lay out plan

had been sanctioned before the s. 4 notification. This request was however turned down by letter dated May 14, 1965 on the ground that the petitioner's land had already been acquired and could not be released. According to the petitioner, there was no basis for treating his land in manner different from that of the 16 colonies. This differential treatment has resulted in violation of Art. 14 of the Constitution so far as the petitioner's colony is con-cerned.

Mr. Agarwala also tried to make subsidiary point in this connection and urged that acquisition of petitioner's land was colourable exercise of the power under the Act inasmuch as the petitioner was out to do the same thing as was sought to be achieved by proceedings under Land Acquisition 'Act,_ the only difference being that whereas the sales effected by him were at reasonable rates, those fetched at auction of lands acquired under the Act were for much higher figures and the State was really making revenue out of such acquisitions.

Mr. R. V. S. Mani who appeared for the petitioner in Writ Petition No. 223 of 1966 adopted the arguments of Mr. Agarwala in general but sought to make · special point of his own. In substance the additional_ ground urged by him was that by the Validating Act the Legislature had sought to encroach into the domain of the Judiciary. Mr. Mani contended that although there was no clear sep_3!ation of legislative and judicial powers in our Constitution, nevertheless the Constitution did not confer un-limited powers on the fogislature and it was for the Judiciary to declare the limits of the legislative powers enshrined in the Con-stitution. To quote Mr. Mani's words : ·

"The Legislature exercises judicial power if its legis-lative action retroacts1 on past controversies and over-rides or reverses the decisions of the Judiciary."

Such an act, argued Mr. Mani, had to be struck down in courts of Jaw.

Mr. Mani's main argument was that inasmuch as ss. 2 and 3 of the Amending Act l!ad not been given retrospective effect, the validation sought to be effected by s. 4 with respect to the past transactions was of no avail as the impugned actions, i.e., the subsequent declarations under s. 6 of the Act, had no legal basis.

In our opinion no useful purpose will be served by referring to the clear demarcation between the judicial powers and Jegisfa-tive powers in America and attempt to engraft the said principle in the working of· our Constitution. This development of the

law, as pointed out in A. K. Gopalan v. State([1]) was due to histori· i;al reasons. In that case it was pointed out by Das, J. (see at p. 286) that

"the Supreme Court of the United States, under the leadership of Chief Justice Marshall, assumed the power to declare any law unconstitutional on the ground of its not being in "due process of law,'' . . . It is thus th11t the Supreme Court established its own supremacy over the executive and the Congress. In India the position of the Judiciary is somewhere in between the Courts ill England and the United States. While in the main leav-ing our Parliament and the_ State Legislatures supreme in .their respective legislative fields, our Constitution has, by some of the articles, put upon the Legislature certain specified limitations . . . . . Our Constitution, unlike the English Constitution, recognises the Court's supre-macy over the legislative authority, but such supremacy is very limited one, for it is confined to the field where the legislative power is circumscribed by limitations put upoh it by the Constitution itself. Within this restricted field the Court niay, on scrutiny of the law made by the Legislature, declare it void if it is found to have transgressed the constitutional limitations."It will not serve any useful purpose to note the decisions of this Court where reference has been made to the distinction bet-ween the Indian Constitutional law and the American Constitu-tional law on this subject. Mr. Mani sought to rely on state-ment of the law made by Cooley in his Constitutional Limita-tions, 7th ed., p. 137, as quoted in Willoughby's Constitution of the United States, second edition, Vol. 3, at page 1651 that: "If the legislature would prescribe different rule for the future from that which the courts enforce, it must be done by statute, and cannot be done by mandate to the courts which leaves the law unchanged, but seeks to compel the courts to construe and apply it not accord-G ing to the judicial, but ac~ording to the legislative judg-ment . . . . . If ~he legislature cannot thus indirectly control ~e action of the courts, by requiring. of them construction of the law according to its own views it is ':ery plain it cannot. do so directly, by setting aside' their 1udgment~, compelhng them to grant new trials, order-mg the discharge of offenders, or directing what parti-H ~ula'. steps shall be taken in the progress of judicial mquiry.".

(l) [1950] $.C.R. 88 at 198.

According to Willoughby,

"Retroactive legislation which does not impair vested rights, or violate express constitutional prohibi· ti ons, is valid, and therefore, particular legru remedies, and, to certain extent, rules of evidence may be changed and, as changed, made applicable to past tran-sactions, . . . . . But substantial rights may not thµs be interfered with."

Willoughby seeks to fortify his statement quoting from Cooley· again:

"The legislature does, or may, prescribe the rules under which the judicial power is exercised by the courts; and in doing so it may dispense with any of those formalities which are not essentiaf to the jurisdiction of the court; and whatever it may dispense with by statute anterior to the proceedings, we believe it may also dis-pense with by statute after the proceedings have been taken, if the court has. failed to observe any of those formalities. But it would not be competent for 1he legislature to authorize court to-proceed and adjudicate upon the rights of parties, without giving them an oppor-tunity to be heard before it and, for the same reason it would be incompetent for it, by retrospective legislation, to make valid any proceedings which had been had in the courts, but which were void for want of jurisdiction over the parties."

Relying on the above Mr. Mani proceeded to argue that the wording of s. 4 of the Amending Act was not question of mere form and that it was decree purporting to operate as such. According to him unless s. 3 was retrospective, s. 4 would be meaningless and should be struck down. Mr. Mani relied par· . ticularly on the decision of the Federal Court in Basanta Chandra Ghose v. King Emperor(') where it was held by this Court that Ordinance No. III of 1944 did not take away the power of the court to investigate and interfere with orders of detention or deprive the court of its power to pass orders under s. 491 of the Criminal Procedure Code and the court was still at liberty to investigate whether an order purporting to have been made under r. 26 of 1he Defence of India Rules and deemcil to be made under the Ordinance or new order purporting to be made under the Ordinance was in fact validly made, in exactly the same way as immediately before the promulgation of the Ordinance; and if on consideration the Courf came to the conclusion that it was not

validly made on any ground other than the ground that r. 26 of the Defence of India Rules was ultra vfres, ,s. 10 of the Ordi-nance would no more prevent it from so finding than s. 16 of the Defence of India Act did. We shall deal with the argument based on this cas" later on. The learned Solicitor General first dealt with the question as

The learned Solicitor General first dealt with the question as to whether Parliament was competent to pass the Validating Act and whether s. 4 of the Amending Act could be given effect to unless the legislature gave retrospective operation to section 3. According to the Solicitor General-and that is undoubtedly the position in law-the legislative competence of Parliament is only circumscribed by the scope of the entries in the appropriate Li11ts under the Seventh Schedule and the fundamental rights enshrined in Part III of the Constitutio1.1. The power of Parliament to make laws for the whole or any part of the territory of India is dealt with by the Constitution in Arts. 245 to 250, 252 and 253. Acqui-~ition and requisitioning of property is an entry in List III and Parliament is competent to make laws enumerated in that List under Art. 246(2) of the Constitution. As early as in the year 1878 it was pointed out by the Judicial Committee of the Privy Council in The Queen v. Burah(') that the Indian Legislature when acting within the limiis prescribed (by the Act of the Im-perial Parliament which created it) had plenary powers of legis-lation as much, and of the same nature as those of Parliament itself and

"If what has been done is legislation, within the general scope of the affirmative words which give the power, and if it violates no express condition or restric-tion by which that power is limited (in which category would, of course, be included any Act of the Imperial Parliament at variance with it), it is not for any Court of Justice to inquire further, or to enlarge constructive-ly those conditions and restrictions."

In that case the question 'oefore tlie Judicial Committee was whether Act XXII of 1869 of the Indian Legislature which ex-cluded the jurisdiction of the High Court within certain specified districts was not inconsistent wiih the Indian High Courts Act or with the Charter of the High Court and so in its general scope within the legislative power of the Governor-General in Council. Under _s. 4 of that Act the territory known as Garo Hills was removed from the jurisdiction of the Courts of Civil and Crimi-nal Judicature and from the control .of the officers of revenue, constituted by the regulations of the Bengal Code and the Acts passed by any Legislature established in British India as well ns

[1968] 3 S.C.R.

58 SUPREMB COURT llBPOll.TS

from the Jaw prescribed for such courts or officers by the Regu· Jations and Acts aforesaid. This section further provided that no Act thereafter passed by the Council of the Governor-General for making laws and regulations shall be deemed to e~tend to any part of th_!: said territory unless the· s~e was specially named therein. Under s. 9 of the Act the Lieutenant-Governor was authorised by notification in the Calc:U!ta Gazett~ to. ~xtend mutatis mutandis all or any of the prov1S1ons contained 1n the other sections of the Act to the Jaintia Hills, the Naga Hills, and such portion of the Khasi. Hills as might for the lime being form part of British India. The Lieutenant-Governor of Bengal, acting under powers conferred by s. 9, extended the provisions of Act XXII of 1869 to the territory of Khasi and Jaintia Hiils and excluded therefrom the jurisdiction of the courts of civil and criminal judicature. The High_ Court of Calcutta held that the 9th section was not legislation but was delegation of legislative power. This was not accepted by the Judicial Committee and it was observed (at p. 195) :

". . . . . it is fallacy to speak of the powers thus

. . . . conferred upon the Lieutenant-Governor .(large as they undoubtedly are) as if, when they were exercised, the efficacy of the acts done under them would be due to any other legislative authority than that of the Governor~ General in Council. Their whole operation is, directly and immediately, under and by virtue of this Act (XXII of 1869) itself."

Reference was made by counsel to the case of Abeyesekra v. Jayatilake('). The question there arose as to whether .m Order in Council of 1928 amending another of 1923 making provision that the action of common informer brought to rccllver penal-:ics under the Order in Council of 1923 be dismissed a11d further amending the 1923 Order so as to except the office held by the respondent from its operation was valid and c.onstitutcd an effec-tive defence to the action although it was retrospective in opera-tion. In upholding the validity of 1928 Order, it wa~ observed ~y the Judicial Committee that legislators "have certainly the nght to prevent, alter or reverse the consequences of their own decrees.''

The effect and validity of retrospective legislation has had to be considered by the Federal· Court of India and this Court on number of occasions. In the case of The United Provinces v. Atlqa Begum(') question arose as to whether the Regularisa-ti on of Remissions Act, 193 8 of the United Provinces Legislature

(l) [1932] A.C. 26J. (2) 11943! F.C.R. 110.

was within its competence. There was an Act in force, namely, the Agra Tenancy A,ct, 1926 the purpose whereof was to con-solidate and amend the Jaw relating to agricultural tenancy and certain other matters. Section 73 of that Act provided that "when for any cause the Local Government or any authority empowered by it, remitted or suspended for any period the whole or any part of the revenue payable in respect of any land, Collector might order that the rents of the tenants should be remitted or suspended to an amount which shall bear the same proportion tc the ·whole of the amount payable in respect of the land as the revenue of which the payment has been so remitted or suspended bears to the whole of the revenue payable in respect of such land." In 1931 there was catastrophic fall in agricultural prices followed by threats on the part of tenants to withhold rent on large scale. The Government of the United Provinces devised scheme for the systematic reduction of rents, varying with the circumstances of the different districts, followed later by consequential adjust-ments in land revenue. The Allahabad High Court had held iri Muhammad Abdul Qaiyum v. Secretary of State for India(') that remissions made in pursuance of the orders of Government had no legal effect. In 1938 the Provincial Legislature passed the Regularisation of Remissions Act which precluded any ques-tion as to the validity of the orders of remission being raised in the courts of Jaw. The Allahabad liigh Court took the view that the Act was contrary to the provisions of s. 292 of the Gov-E ernment of India Act, 1935 because it amounted to an attempt to legislate retrospectively. Section 2 of the Act of 1938 provided that"notwithstanding anything in the Agra Tenancy Act, 1926, . . . . . or in any other Jaw for the time being in force where rent has been remitted on account of any fall in the price of agricultural produce which took place before the commencement of this Act, under the order of the Provincial Government or any authority empowered by it in that behalf, s1tch order, whether passed before or after the commencement of this Act, shall not be called in question in any civil or revenue court." Referring to the case of Queen v. Burah(') Gwyer, C.J., said that there was nothing in s. 292 which suggested any intention on the part of Parliament to impose fetter against retrospective legislation. According to the learned Chief Justice, the impugned Act was an Act with respect to "remission of rents" although it might also be an act with respect to something else, that is to say, the validation of doubtful executive orders. The learned Chief Justice said : (I) I.L.R. 19:J8 Allahabad, 114. (2) L.R.I.A. 178,

"It is true that "Validation of execntive orders" or any entry even remotely analogous to it is not to ~e found in any of the three Lists; but I am clear that legis-lation for that purpose must necessarily be regard~d as subsidiary or ancillary to the power of legislating on the particular subjects in respect of which the executive orders may have been issued."

His Lordship further opined that powers of the court were not affected merely because certain executive orders were not allowed to be questioned in any court.

In Piare Dusadh & others v.IT!ze King Emperor(') one of the questions raised was whether it was competent for the Legislature by retrospective legislation to make valid any proceedings which had been had in the courts but which were void for want of. juris-diction over the parties. In this case the facts were as follows. The appellants had been convicted by courts functioning under the~ "Special Criminal Courts Ordinance (Ordinance No. II of 1942). On 4L'1 June, 1943, the Federal Court hela that the courts constituted under that Ordinance had not been duly invested with jurisdiction, in view of the nature of the provi-sions contained in ss. 5, IO and 16 of that Ordinance. The next day, the Governor-General made and promulgated another Ordi-nance (Ordinance No· XIX of 1943) whereby Ordinance No. II of 1942 was repealed and certain provisions were made in res-pect of sentences which had been passed by. the special courts and in respect of cases which were pending before them on that date. By sub-s. (2) of s. 3 of the new Ordinance, right of appeal against sentences which had already been passed by the special courts was . given and appeals were accordingly preferred to the High Court in some cases. In certain other cases applications for writ in the nature of habeas corpus were made. In both sets of cases, it was contended on behalf of the accused that the new Ordinance did not, and in any event could not, give validity o the sentences which had been passed by the special courts, and it was claimed that the sentences should be treated as void or set aside. Section 4 of the new Ordinance provided that :

"Where the trial of any case pen~ing before court constituted under the said Ordinance has not concluded before the date of the commencement of this Ordinance, the proceedings of such court in the case shall be void and· the case shall be deemed to be transferred"

to the ordinary criminal courts for enquiry or trial in accordance with the Code of Criminal Procedure. Section 3 of the Ordinance provided as follows :

(I) [1944] F.C.R. 61.

"(a) Any $entence passed by Special Judge, Special Magistrate or Summary Court in exercise of jurisdiction conferred or purporting to have been con-ferred by or under the said Ordirianpe shall have effect, and subject to the succeeding provisions of this section shall continue to have effect, as if the trial at which it was passed had been held in accordance with the Code of Crimi.nal Procedure, 1898 by Sessions Judge, an Assistant Sessions Judge or Magistrate of the first class respectively, exercising competent jurisdiction under the said Code.

(2) Notwithstanding anything contained in any other law, any such sentence as is referred to in sub-section (I) shall, whether or. not the proceedings in which the sentence was passed were submitted for re-view under section 8, and· ·whether or not the sentence was the subject of an appeal under Section 13 or Sec-tion 19, of the said Ordinance, be subject to such rights of appeal as would have accrued, .and to such powers of revision as would have been exercisable under the said Code if the sentence had at trial so held been passed on the date of the commencement of this Ordinance.

( 3) Where any such sentence as aforesaid has . been altered in the course of review or on appeal under the said Ordinance, ·the sentence as so altered shall for the purpose of this section be deemed to have been passed by the Court which passed the original sentence."

Learned counsel for .the accused conceded that the principle of validation by subsequent legislation was quite applicable to judi-cial as to ministerial proceedings but relying on Cooley's Consti-tutional Limitations, 8th ed., p. 205 and also pp. 773-776, they contended-

. . (_a) that w!J!le such legi~lation might seek to aid and support 1ud1cial proceedmgs, the legislature could not under the guise of legislation be permitted to exercise judicial power, and

(b) that it was not competent to the legislature by retros-pective legislation to make valid any proceedings which had been held in the courts, but which were void for want of jurisdiction over the parties.

Spens, C. J., observed (see at p. 100):

"As general proposition, it may be true enough to say that the legislative function bek>ngs to the legisla-

[1968] 3 S.C.R.

SUPREME COURT RilPORTS •

ture and the judicial function to the judiciary. Such differentiation of functions and distribution of powers are in sense part ofrthe Indian law as of the American law. But an examination of the American authorities will show that the development of the results of this distribution in America has been influenced not merely by the simple fact of distributioll of functions, but by the assumption that the Constitution was intended to reproduce the provision that bad already · existed in many of the State Constitutions positively forbidding the legislature from exercising judicial powers . . . . One result of the application of this rule in the United States has been to bold that "legislative action cannot be made to retroact upon past controversies • and to reverse decisions whfoh the courts in the exercise of their undoubted authority have made.'' The reason given is that "this would not only be the exercise of judicial power, but it would be its exercise in the most objectionable and offensive form, since the legislature would in effect sit as court of review to which parties might appeal when dissatisfied with the ruling of the courts. . . . . In India, however, the legislature has more than once enacted laws providing that suits which bad been dismissed on particular view of the law must be· restored and retried.''The learned Chief Justice referred to the Australian case, Federal Commissioner of Taxation v. Munro(') where Board of Appeal constituted under an Act of 1922 bad given certain decisions in appeals in income-tax matters. The law cpurts declared" that the Australian Parliament had no power to invest this Board of Appeal with judicial power. later Act established what was described as Board of Review and assigned to it functions which were held to be different in character from those assigned to the former Board of Appeal. This Act however went on to provide that decisions which bad already been pronounced by the Board of Appeal "should be deemed to be and at all times to have been decisions of . Board of 'Review given in pursuance of the provisions of the later Act." This later Act was challenged as vesting judicial power in the Board of Review, but this conten-tion was overruled. Reference may be made to the judgment of Starke, J. quoted by Spens; ··c.J. that

"Parliament simply takes up certain determinations which exist in fact, though made without authority, and prescribes not that they shall be acts done by Board

of Review, but that they shall be treated as they would be treated if they were such acts. The sections, no doubt, apply reltospectively, but they do not constitute an exercise of the judicial power on the part of the Par-liament."

B. The learned Chief Justice observed that this apt!)' described what had happened in the case before the Federal Court and answered the argument that it was an impossible feat to convert what was not trial under the Code of Criminal Procedure into trial under the Code;

According to the learned Chief Justice, the real question was, whether the Ordinance was covered by any of the entries in the Seventh Schedule to the Constitution Act. "It was not contended said the Chief Justice "that the mere absence of specific provi-sion about validating laws" was by its.elf of much significance." As observed by this Court in Atiqa Begum's case('), "the power of validation must be taken to be ancillary or subsidiary to the power to deal with the particular subjects specified in the Lists."

There is nothing in Basanta Chandra Ghose's case(') which deltacts from the propositions of law laid down in Atiqa Begum's case(') or Ffiare Dusadh's case('). In Basant Chandra Ghose'< case(') cl. (2) of s. 10 provided :

"If at the commencement of this Ordinance ther" is pending in any Court any proceeding by which the validity of an order having effect by virtue of section 6 as if it had been made un<ier this Ordinance is called in question, that proceeding is hereby dischorP.erl"

Spens, C.J. said with regard to this clause that :

"here there has been no jnvestigatioii or decision by any Tribunal which the legislating authority can be deemed to have given effect to. . It is direct disposal of cases by the legislature itself." (see at p. 309).

was pointed out that tile nature of the provision considered in Piare Dusadh's case(') was essentially different from cl. (2) of s. 10 of the impugned Ordinance.

The question has engaged the attention of this Court in number of cases and we .may refer to tlie case of West Ramnad Electric Distribution Co. Ltd. v. State of Madras(') by way of

(1} (1940] F.C.R. 110.

(2) (1944] F.C.R. 295 (4) [1963] 2 S.C.R.747

. (3) [1944] F.C.R. 61

illustration. In that case, the Madras Legislature had passed an Act ( 43 of 1949) on January 24, 1950 for the acquisition of undertakings supplying electricity in the Province of Madras. In pursuance of s. 4 ( 1) of the Act the State of Madras passed an order on Mav 17, 1951 declaring that the appellant undertaking shall vest iii' the respondent from September. 21, 1951. The Chief Electrical Inspector took over possession of the appellant and all its records etc. The State paid to the appellant Rs. 8,34,000 and odd as compensation. According to the appellant, about Rs. 1,00,000 still remained to be paid. Some of the electrical undertakings in Madras which had' been taken over filed writ petitions in the High Court which upheld the validity of the im-pugned Act in so far as it related to the licencees other than municipaji\ies. In Rajahmundry Electric Supply Corporation Ltd. v. The State of Madras(') this Court had held that the impugned Act of 1949 was ultra vires on the ground that it went beyond the legislative competence of the Madras Legislature inasmuch as there was no entry in any of the three Lists of the Seventh Schedule of the Government of India Act, l 935 relating to compulsory acquisition of any commercial or industrial undertaking. After the decision in this case, the Madras Legislature passed Act XXIX of 1954 which received the assent of the President on 9th October, 1954. This Act incorporated the main provisions of the earlier Act and purported to validate action taken under the earlier Act. The appellant then filed writ petition alleging that to the extent to which the Act purported to validate acts done under the earlier Act of 1949 it was ultra vires. It was further urged . that the three bases of compensation as laid down by the Act were in-consistent with the requirement of Art. 31 of the Constitution. Section 24 of the Act ran as follows :

. "Orders made, decisions or directions given, notifi-cations issued, proceedings taken and acts or things done, in relation to any undertaking taken over, if they would have been validly made, given, issued, taken or done, had the Madras Electricity Supply Undertakings (Acquisition) Act, 1949 (Madras Act XLIII of 1949), and the rules made thereunder been in force on the date on which the said orders, decisions or directions, notifi-cations, proceedings, acts or things, were made, given, issued, taken or done are hereby declared to have been validly made, given, issued, taken or done, as the case may be, except to the extent to Which the said orders, decisions, directions, notifications, proceedings, acts or ·things are repugnant to the provisions of this Act."

It was held by this Court that this was "a saving and validating provision and it clearly intends to validate actions taken under the relevant provisions of the earlier Act which was invalid from the start. The fact that s. 24 does not use the usual phraseology that the notifications issued under the earlier Act shall be deemed to have been issued under the Act, does not alter the position that the second part of the section has and is intended to have/ the same effect."

The contention that the impugned notification contravened Art. 31 ( 1) because of want of existence of an antecedent law depriv-ing the citizen of his Jl_roperty was turned down with the observa-c tion:

"In our opinion, this argument is not well-founded. If the Act is retrospective in operation and s. 24 has been enacted for the purpose of retrospectively validat-ing actions taken under the provisions of the earlier Act, it must follow by the v_ery retrospective operation of the relevant provisions that at the time when the impugned notification was issued, these provisions were in exist-ence. That is the plain and obvious effect of the retros-pective operation of the sfatute. "·

Reference was made to the case of the United Provinces v. Mst. Atiqa Begum('), Piare Dusadh v. The King Emperor(') ·and also to the decision in Union of India v. Madan Gopal Kabra([8 ]) and it was finally said (at p. 766) :

" .... there is no doubt about the competence of the Legislature to enact law and make it retrospective in operation in regard to topics included within the relevant Schedules of the Constitution."

Reference may also be made to the case of Rai Ramkrishna v. The State of Bihar(').

All these decisions lay down that the power to legislate for validating actions taken under statute which were not sufficiently comprehensive for the purpose is only anciliary or subsidiary to legislate on any subject within the competence of the legislature and such Validating Acts cannot be struck down merely because courts of law have declared actions taken earlier to be invalid for want of jurisdiction. Nor is there any reason to hold that in order to validate action without legislative support the Validat-H ing Act must enact provisions to cure the defect for the future

(1) [19401 F.C.R. 110. (J) [1954] S.C.R. 541 at 544.

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66 SUPREME COURT REPOl!.TS

and also provide that all actions taken or notifications issued must be deemed to have been taken or issued under the new provisions so as to give them full retrospective effect _ !"o doubt legislatures often resort to such practice but it is not absolutely necessary that they should do so so as to give full scope .and effect to the Validat-ing Acts. By way of illustration reference may be made to the following Acts. ( 1) The Professions Tax Limitation (Amend-ment and Validation) Act, 1949 where s. 3(i) provided that

"Notwithstanding anything to the contrary in any other law for the time being in force,-

(i) no tax on circumstances and property imposed before the commencement of this Act under clause (Ix) of sub-section (1) of section 128 of the United Provinces Municipalities Act, 1916, or clause (b) of section 108 of the United Provinces District Boards Act, 1922, shall be deemed to be, or ever to have been invalid merely on the ground that the tax imposed exceeded the limit of Rs. 50/ • per annum prescribed by the said Act, and the validity of the imposition of any such tax shall not be called in question in any Court;"

(2) The Hindu Marriages (Validation of Proceedings) Act, 1960 (Act 19 of 1960) was passed to obviate the shortcomings in the Hindu Marriage Act pointed out by the Punjab ~ Court in Janak Dulari v. Narain Das (A.I.R. 1959 Punjab 50). There the High Court held that the court of an additional Judge cannot be regarded as principal court of civil jurisdiction within the mean-ing of the Hindu Marriage Act and that District Judge to whom petition under the Act. is presented cannot transfer it to an addi-tional Judge for trial. The object of the Validation Act was to validate all proceedings taken and decrees and orders passed by any of the Courts specified in cl. (2) exercising or purporting to exercise jurisdiction under the Hindu Marriage Act. Section 2( 1) ran as follows :-

"All proceedings taken and decrees and orders passed before the commencement. of this Act by any of the Courts referred to in sub-section (2) exercising or pur-porting to exercise jurisdiction under the Hindu Mar -riage Act, 1955 shall, notwithstanding any judgment, decree or order of any court, be deemed to be as good and valid in law as if the court exercising or purporting ·.to exercise such jurisdiction had been district court within the meaning of the said Act."

The courts referred to in sub-section (1) are: the court of an additional Judge, additional district Judge, etc. ·

In our opinion the contentions raised about the invalidity of the Amending Act on the ground that s. 3 thereof was not ~ade expressly retrospective or that it encroached upon the domam of the judiciary by seeking to nullify judicial decisions ca~ot be sustained. The American doctrine of well-defined separation of legislative and judicial powers has no a~lication to Indi.a and. it cannot be said that an Indian Statute which seeks to validate in-B valid actions is bad if the invalidity has already been pronounced upon by court of law.

In view of the decisions of the Judicial Committee, the Federal Court and this Court referred to above, it must be held that the absence of provision in the Amending Act to give retro-c spective operation to s. 3 of the Act does not affect the validity of s. 4 as contended for. It was open to Parliament to adopt either course, e.g. (a) to provide expressly for the retrospective opera· tion of s. 3, or, (b) to lay down that no acquisition purporting to have been made and no action taken before the Land Acquisi-tion (Amendment and Validation) Ordinance, 1967 shall be deem· ed to be invalid or ever to have become invalid because inter <!Ila of the making of more than one report under s. 5-A or more than one declaration under s. 6 of the Land Acquisition Act, not-withstanding any judgment, decree or order to the contrary. Parliament was competent to validate such actions and transac-tions, its power in that behalf being only circumscribed by the appropriate entries in the Lists of the Seventh Schedule and the fundamental rights setforth in Pan ill of the Constitution. As shown above, there have been instances where the latter course had been adopted by the Indian Parliament in the past.

Section 4 of the Amending Act being within the legislative competence of Parliainent, the provisions thereof are binding on all courts of law notwithstanding judgments, orders or decrees to the conrtary rendered or made in the past.

We find ourselves unable to accept the contention about the violation of Art. 31 (2) of the Amending Act. It is not suggested that the Validating Act in express words enacts any law which dir~y affects compensation payable in respect of the property acqmred or lays down any principles different from those which were already in the Land Acquisition Act of 1894. After the amendment of the Constitution in 1955 the question of adequacy of C?mpensation is not justiciable and it is enough if the Jaw,, provi~es that person expropriated must be given compensation for his property or Jays down the principles for the determination th~f._ There is not ~ word about "compensation" in s. 4 of the Validating Act. , lndtrectly however, it would affect person's right to compensation, inasmuch as but fot the Validating Act the notification under s. 4 issued on 13th November 1959 couldnot be resorted to for the purpose of making more than one dec-laration under s. 6 of the Act. Schemes of the magnitude of the plan for the development of Delhi or for the establishment of an iron and steel plant did not have to be considered in pre-Constitution days. The Land Acquisition Act of 1894 contained sufficient measures to allow acquisition of small parcels of property for the different schemes of the extent and magnitude which had to be considered in the past. Even then, the law with regard to compensation did not remain static from the days of the Act of 1870 to 1923. In the Act of 1894 the date of declaration under s. 6 w.as made to take the place of the date in s. 24 of the Act of 1870. Under the Act of 1870 the market value of the land at the time of awarding compensation was the criterion. The date for the assessment of compensation was further shifted to the date of the notification under s. 4 only in 1923.

The Legi~lature might well ha','.e provided in the Act of 1894 that it would·be open to the appropriate government after issuing notification under s. 4 to consider objections raised under s. 5 with regard to different localities from time to time enabling dif-ferent reports to be made under s. 5-A with consequent adjust-ments in s. 6 providing for declarations to be made as and when each report under s. 5-A was considered. By the validation of actions taken under s. 6 more than once in respect of single notification under s. 4, the original scheme of acquisition is not altered. The public purpose behind the notification under s. 4 remains the same. It is not as if different public purpose and acquisition of land for such purpose were being interpolated by means of the Validating Act. The principle of compensation re-mains the same under the Validatmg Act as it did under the principal Act of 1894. Only the shortcomings in the Act as to want of provision to enable more than one declaration under s. 6 are being removed. In our opinion, the Validating Act does not fall within the mischief pointed out by this Court in various deci-sions starting from the State of West Bengal v. Mrs. Bela Bancr-;ee(') :

Entry 42 in List III of the Seventh Schedule before its amend-ment read:

"Principles on which compensation for property acquired or requisitioned for the purposes of the Union or of State or for any other public purpose is to be determined, and the forms and the manner in which such compensation is to be given."

In Mrs. Bela Banerjee's case(') s. 8 of the impugned West Bengal Land Development and Planning Act 1948 provided that the com-Jll [i954] S.C.R. 558.

UDAI RAM SHARMA v. UNION (Mitter, J.)

pensation to be awarded for acquisition of land was not to exceed the market value thereof on December 31, 1946. This provision was held to be arbitrary by this Court .inasmuch as it fixed the ceiling on compensation by reference to the market value of the land on the above-mentioned date no matter when and how long afterwards the acquisition took place. Similarly in dismissing the appeal of the State in State of Madras v. D. Namasivaya Muda-liar (1) where the Madras Act XI of 1953 provided that compen-sation was payable on the basis of the valuation of the land on Apnl 28, 194 7 together with some improvements made thereon up to the date of notification under s. 4(1) of the Land Acquisition Act because of the discovery of the presence of lignite in certain taluks in 194 7 and the announcement by Government by press note that it proposed to undertake legislation to compel persons pur-chasing such lands after date to be prescribed in 1947, it was held that "a law which authorises acquisition of land not for its true value, but for value frozen on some date anterior to the acquisition, on the assumption that all appreciation in its value since that date is attributable to purposes for which the State may use the land at some time in future, must be regarded as infring-ing the fundamental right" and "there was no true relation bet-ween the acquisition of the land .... and the fixation of compen-sation based on their value on the market rate prevailing o.n April 28, 1947." Referring to the provision in the Land Acqui-sition Act for assessment of compensation on the basis of the market value of the land not on the date on which the interest of the owner was extinguislied under section 16 but to the date of the notification under S; 4(1) it was observed that "any princi-ple for determination of compensation denying to the owner all increments in value between fixed date and the date of issue of the notifications under s. 4(1) must prima facie be regarded as denying to him the true equivalent of the land which is expro-priated.

In our opinion, the Amending Act cannot be said to lay down any principle which suffers from the vice of the Act struck down in the. above decisions. The date of valuation is that of the issue of notification under s. 4(1 )-a principle which has held the field since 1923. It is tru~ that the underlying principle of the Act of 1894 was that all mcrements due to the settina on foot of the acquisition proceedings were to be ignored wh~reas ·due to the ever spiralling of all prices all over India land values are 11'.o.1mting up all the time i.n all the States, specially round about big c1t1es-an occurrence qmte unconnected with th~ issue of noti-fication under s. 4(1)-but it cannot be said that because owners of land are to be deprived of all the increments due to the latter phei:om~non it must be held that. there is violation of Art. 31 (2). Legislative competence to acquire land under the provisions of (I) [1964] 6 S.C.R. 936.

the Land Acquisition Act cannot be challenged because of cons-tant appreciation of land values all over the country due to the prevalent abnormal inflation. There must be some time lag bet-ween the start and conclusion of land acquisition proceedings and in principle there is nothing wrong in accepting the said start as the date for valuation. Sections 4 and 23 of the Land Acquisition Act are protected by Art. 31(5)(a) of the Constitution. Only sections 5-A and 6 of the Act have been amended. The amend-ments do not alter the principle of compensation fixed by the Act nor contravene Art. 31 of the Constitution in any way.

The Amending Act does not really derogate from the princi-ple that the valuation on the date of issne of notification affords the criterion for determining compensation of all lands to be ac-quired. It only keeps alive the said notification for sustaining more than one declaration under s. 6 to meet the exigencies of the situation where it was not possible to make one comprehensive declaration under s. 6 and where the State has been obliged to validate actions which could not be supported under the principal Act. It cannot be said of the Validating Act that it was fixing an arbitrary date for the .valuation of the i>roperty which bore no relation to the acquisition proceedings. At the same time when the notification under s. 4 was issued on 13th November 1959, the State had cqnsidered that very huge area round about Delhi would have to be acquired so that the development of the city could proceed in an orderly manner step by step not only to meet the immediate needs of the then population of the city but with an eye to the ever-increasing demands of the exploding population in all cities in India and specially in iis capi-tal. It was before November 1959 that the State had to consider the acquisition of large tract of land for the purposes of deve-lopment of Delhi but it was not possible to take up simultaneously all schemes for the future development of the city. It was also not practically possible to take up all schemes in all directions at the same time. The resources of the State were not adequate to take up the schemes for improvement of the city by the acquisition of an area like Ac. 34,000,00, at the same time keeping in mind not only the need of land for housing purposes but also for other purposes like education, industry and manufacture not to speak of amenities for recreation, entertainment etc. Of necessity, the area under the proposed acquisition would have to be carved into blocks and the development of one or more blocks at time could only be taken up in consonance with the resources available. Even contiguous blocks could be developed gradually and sys-tematically. If particular area, say block 'A' was meant to provide lands for building houses for residential purposes onlv block contiguous thereto, say block 'B' might be set apart for industrial purooses. There may be nothing common between

" Block and Block although both the Blocks would form to require their simultaneous development part of composite whol(}-to serve the needs of growing city. Can it be said that acquisi-tion of lands for Block and Block must be made simulta-neously and is the law to be struck down because it enables declaration under s. 6 with respect to Block to be made some 8 time after similar declaration in respect of Block 7 In such case, it would be inc<ingruous to award compensation for lands acquired in Block on basis different from that in respect of lands in Block covered by an earlier declaration under s. 6. The scope of Art. 31 (2) as amended was considered by this .coun in P. V •. Mudaliar v. Deputy Collector('). It was there pomted out that after the amendment "what is excluded from the courts' jurisdiction is that the said law cannot be questioned on the ground that the compensation provided by that law is not adequate;" and "if law lays down principles which are not relevant to the properly acquired or to the value of the property at or about the time it is acquired, it may be said that they are not principles con-templated by Art. 31(2) of the Constitution." In that case it was also observed by this Court that "in the context of continuous rise in land prices from year to year depending upon abnormal circumstances it cannot be said that fixation of average price of over five years is not principle for ascertaining the price of the land in or about the date of acquisition." The decision is also an authority for the proposition that the omission of one of the elements that should properly be taken into account in fixing the compensation might result in the inadequacy of compensation but such omission in itself did not constitute fraud on power. It is also to be noted that in this case this Court upheld the Land Acquisition (Madras Amendment) Act, 1961 although the said Act substituted new clause for the first clause in s. 23 ( 1) of the Land Acquisition Act. The substituted clause provided for pay-ment of compensation on the basis of the market value of the land at the date of the publication of the notification under s. 4( 1) or an amount equal to the average market value of the land during the five years immediately preceding such date, which-ever was less. It is significant that the Act which was post-~ourth Constitution Amendment Act,· was upheld although by its own terms and independently of the Land Acquisition Act it provided for payment of compensation on the basis of the market value of the land at the date of the publication of the notification under s. 4(1). It may therefore be inferred that in upholdinll the Land Acquisition (Madras Amendment) Act, 1961, this Court was. of the vie~ that th~ yrinciple of fixing com pei;isation on the basis of the pnce prevailmg on the date of the notification under s. 4(1) of the Land Acquisition Act was relevant principle. Jn

(0 [19651 l S.C.R. 614.

the result the court turned down the contention about the viola-tion of Art. 31(2) because of the modification of some of the principles for assessing compensation laid down in s. 23 of the Act.

In the present case, there has been no variation of the law formulated in s. 23 of the Act. As ·such, in our opinion, there has been no violation of Art. 31 ( 2) merely because the actions already taken have been sought' to be validated. Nor are we satisfied that there has l>een any colourable or fraudulent exercise of legislative power.

With regard to the question as to discrimination violative of Art. 14, it goes without saying that whenever an Amending Act is passed, there is bound to be some difference in treatment ·bet-ween transactions which have alread:wtaken place and those which are to take place in the future. That by itself will not attract the operation of .Art. 14. Again, even with respect to transactions which may be completed in the future, reasonable classification will not be, struck down as was held b)' this Court in Jalan Trad-ing Co. v. Mazdoor Un{on(').

"If the classification is not patently arbitrary, the Court will not rule it discriminatory. merely because it involves hardship or inequality of burden. With view to secure particular object scheme may be selected by the Legislature wisdom whereof may be open to de-bate; it may even be demonstrated that the scheme is not the best in the circumstances and the choice of the Legislature may be shown to be erroneous, but unless the enactment fails to satisfy the dual test of intelligible classification and rationality of the relation with the ob-ject of the law, it will not be subject to judicial inter-ference under Art. 14. Invalidity of legislation is not established by merely finding faults with the scheme adopted by the Legislature to achieve the purpose it has in view."

Before scrutinising the provhions of the Amending Act, we must examine the objects of the Act. They may be summed up as follows:-

(a) To amend the Act for the future by empowering the making of more than one declaration under s. 6.

(b) To validate completed acquisitions on the basis of more than one declaration under that section.

(c) To authorise more than one declaration under the said section in cases where there is already in existence notification tinder s. 4.

(I} [1%71 l S.C.R. 15 at 36.

U11AI 11AM SBADL\ v. UNION (Mitter, I.)

(d) To prescribe time limit for future acquisitions as also pending proceeAingo> not yet completed; and

. (e) To provide additional compensation by way of interest in all cases where acquisition has not yet been completed and where declaration under s. 6 is issued more than three years after the notification under s. 4.

There is nothing arbitrary or irrational about the said objects. It is well known that in some cases there has been unusual delay in the issue of declaration under s. 6 after notification under s. 4. The Amending Act puts an end to this harsh treatment by providing that in respect of notifications under s. 4 made before the date of the Ordinance i.e. 20th January 1967, declaration under s. 6 must be made within two years after that date. If such declaration is not m~, then it will not. be open to Government to make use of the old s. 4 notification and the State would be obliged to issue fresh notification under s. 4. The Act also limits the time within which declaration under s. 6 may be made when notification under s. 4 is issued after 20th January, 1967. This period is limited to three years there having been no time limit in tho past. We are not impressed by the argument that person whose land may be covered by notifica-tion under s. 4 issued more than one year lieforc 20th January 1967 would seemingly be treat.eel differently from person wliose land comes under the notification under s. '4 after that date. The Legislature has sought to improve upon the existing provisions of the Land Acquisition Act and there is no discriminatory treat-ment which should be struck down as violative of Art. 14. The Legislature in its wisdom thought that some time limit should be fixed in respect of s. 4 notificalions :SSued before 20th January, 1967 and that time limit should also be fixed for acquisition where such notification is issued after that date. No fault can be found with the Legislature because it has provided tor period of two years in one case and three years in the other. As was pointed out in la[an Trading Co. v. Mal.doors Union('). ''Equal protection of the laws is denied if in achiev-ing· certain object persons, objects or transactions similarly circumstanced are differently treated by law and the principle underlying that different treatment has no rational relation to the object sought to be achieved by the law."

It is not possible to say that because the legislature thought of . improving upon the Act of 1894 by prescribing certain limits o( time as from 20th January 1967 the difference in treatnient in cases covered by notification before the said date and after the said date denies equal protection of laws because the transac-tions are not similarly circumstanced. Some of the notifications

(I) (1967] I S.C.R. IS.

IA Sup. C.1./68-lj

issued under s. 4 must have been made even more than 3 years before 20th January 1967 and such cases obviously could not be treated in the same manner as .notifications issued after that date. Art. 14 does not strike at differentiation caused by the enact-ment of law between transactions governed thereby and those which are not so governed. As was pointed out by this Court in Hatisingh Manufacturing Co. Ltd. v. Union of India(').

"When Parliament enacts law imposing liability as flowing from certain transactions prospectively, it evidently makes distinction between those transactions which ·are covered by the Act and those which are not covered by the Act, because they were completed be-fore the date on which the Act was enacted."

With respect, the dictum can also be applied as between cases where the transaction was in the course of completion and those which had to be started after particular date. On the whole the Amending Act seeks ta improve the legislation wruch covered the field of acquisition of land. The Legislature might have made more liberal provisions for improvement but it is not fQr thiS court to strike down piece of legislation because the improvement falls short of the expectation of the litigants.

Witl, rpgard to the provision · for payment of interest, in addition to compensation or by way of additional compensation no grievance can be made in that interest is not 'allowed in res-pect of transactions which have been already completed and compensation taken. The Legislature felt that because there has been unreasonable delay in the payment of compensation, interest should be allowable where the period of three years has already expired or may expire between the date of s. 4 notification and the date of declaration under s. 6. No grievance can be made because interest is denied to persons who have already taken the compensation. Even here the classification is not unreasonable and cannot be said to be unrelated to the object of the Act.

As regards violation of Art.14, in the case of Sohan Lal who filed Writ Petition No. 85 of 1967 the learned Solicitor General drew our attention to few facts which are not clearly brought out in the affidavit in opposition and will be referred to presently. Here the attack is on an executive act, namely, the differential treatment meted out to 16 colonies whose lands were covered by the notification dated 13th November, 1959 but· in respect of which de-notification orders were issued subsequently. It would appear that some of the letters which were received by Sohan L3I did not bring out the full facts and the policy underlying the ap-parent discrimination in this case. It is pointed out in paragraph 3 6 of the affidavit in opposition :

(I) (1960) 3 S.C.R. 528 at 543.

"After the issue of the notification No.F.15(Ill)/59-LSG dated 13-11-1959, it was decided by the Govern-ment that the colonies in respect of . which the layout and. service plans had been sanction before the d11te of notification viz., 13-11-1959, may be released from the purview ot acquisition. . .................. . The petitioner's colony known as Kanwal Park could not be released from the purview of acquisition because in i~ case only the. layout plans had been sanctioned and not the service plans."

This policy is corroborated by the records of the Land and Housing Department, Delhi Administration which were made available to us at the hearing. It appears from that record that after the notification of 13th November 1959 private owners of land who wanted to lay out colonies and had taken steps in respect thereof by making some arrangement and, spent money-threon had approached the Administration for' release of their lands from the notification and proposal for de'notification of the colonies was considered' at ·a high level. It appears that meeting was held on 29th June 1960 at which were present nlimber of per-· sons including the Chief Secretary, Vice Chairman, Delhi Dewlop. ment Authority, Engineer-Member,. Architect, Town Planning Organisation, Deputy Commissioner, Delhi Municipal Corpora-tion, Architects of Delhi Municipal Corporation, Secretary, Local Self Government and Under Secretary to the State Government. The records show that the case of each notified colony was consi-dered separately and it was felt tl\at cases in which the layout and service plans had been finltlly approved in all respects before 13th November, 1959 should be recommended for de-notification. On 1st of July, 1960, the Commission, Delhi Municipal Corpora-tion went into the matter ;md recommended that :

"All those colonies in respect of which both lay-ont plans and service plans had been approved by the Delhi Development Provisional Authority the Delhi Develop-ment Authority or the Delhi Municipal Corporation may be de-notified irrespective of whether security was demanded or not and whether the time limit for com-G pletion of development .was imposed or not and irrespec-tive of whether security has been paid or not and whether development bas been completed or not."

According to this recommendation, 16 colonies named tberem f~IJ in this category. Soban Lal's colony was not one of those sui:teen.

· It is unfortunate that the petitioner who submitted the Jay out plan of the colony as early as June 18, 1956 had not the service plan approved before 13th November, 1959. It is clear from

76 SUPllEME COUltT lll!POllTS

the annexures to the petition that the details of the lay-out of the colony were submitted on 30th August, 1956. The petitioner submitted service plans on 15th September, 1959. There was nothing wrong with the plans intrinsically except that there were more than one small pocket of land within the colony to which the petitioner ci>uld not prt>ve ·his ownership statisfactorily. Mr. Agarwala appearing for the petitioner submitted that the only diffi-culty was that in respect of the small pockets they were owned not by the petitioner alone but in c0:0wnership with others and the pe_titioner subsequently excluded these pockets from the pur-view of his lay-out plan: but this was done only on March 19, 1961, The petitioner's subsequent efforts to have his colony denotified were of no avail even though he had excluded these pockets on 20th January, 1960. On these facts, we cannot hold that the petitioner was subjected to any discrimination. There was policy behind the de-notification and it ·has not been suggested that the policy was vitiated by any mil!3fides on the part of the authorities.

All the points urged by the petitioners, therefore, fail and the petitions will stand dismissed. There will be no order as to costs.

Shelat J.-The facts .in these five writ petitions have been sufficiently set out by our learned brother Mitter J. in his judgment and therefore need not be repeated here. Though they differ in some particulars, the contentions raised by Counsel for the peti-tioners are common except the additional contentions raised by Mr. Mani in Writ Petition 223 of 1966 and by Mr. Agarwala in Writ Petition 85 of 1967.

These writ petition arise as result of and challenge inter a/ia the villidity of the following notifications. No November 13, 1959 the Chief Commissioner, Delhi,· issued notification under sec. 4-of the Land Acquisition Act I of 1894 (hereafter referred to as the Pr'incipal Act) notifying that land meiisuring 34070 acres marked in blocks to T and X in the map enclosed there with was required by the Delhi Administration for the planned development of Delhi. In pursuance of that notification, the Delhi Administration issued sec. 6 notification dated June 14, 1961 in respect of the land situate in village .Ki!kori measuring 97 bighas 14 biswas only from out of the said notified area. The notification directed the Collector to take order for its acquisition under s. 7 of the Act. The Collector thereafter made his award on August 31, 1961 in respect . of the said 97 bighas of land at Rs. 2500 bigha, the total amount including the solatium award-ed being Rs. 2,80,887.50. Nothing thereafter was done till March 18, 1966 when another notification under sec. 6 was issued in

respect of lJ52.2 bighas of land situated in Mandawali Fazilpur, Khuraj Khas and Shakarpur Khas. . On Febr~ary 9, 1966 this Court delivered its judgment in · M. P. State v. V. P. Sharma (') where facts were similar to the facts in the present cases and where the land was required for the erection of steel plant in public sector. In that case the notification under sec. 4 covering land in eleven villages was issued in May 1949. This was followed by several notifications under sec. 6, the last of them being in 1960. After examining the provisions of secs. 4, 5A and 6 oCthe Act, thi~ Court declared as follows :-·

"At the stage of sec. 4, the land is not particularised but only the locality is mentioned; at the stage of s. 6 the land in the locality. is particularised and thereafter the notification under s. 4( 1) having served its purpose exhausts itself. The sequence of events from notifi-cation of the intention to acquire under s. 4. to the dec-laration under sec. 6, leads to the conclusion that once declaration under s. 6 particularising the area is is-sued, the remaining non-particularised area in the noti-fication under s. 4 ( 1 ) stands automatically released. The intention of the legislature was that one notifica-tion under s. 4( 1) should be followed by survey under s. 4(2), objections under s. 5A heard, and thereafter, one declaration under sec. 6 issued. If the Government requires more land in that locality, there is nothing ti> prevent it from issuing another notification under s..4(1) making further survey if necessary, hearing objec-tions and then making another declaration under s. 6, whereas there is likely to be prejudice to the owner of the land if there is great delay between the notifications under s. 4(1) and s. 6."One of the ~ontentions urged in that case was that where the land is required for small project and the area is not large the government may be able to make up its mind once for all what land it needs but where, land is required for large project re-quiring large area of land, government may not be able to make up its mind at once. This contention was rejected on the ground that even if it. be so there is nothing to prevent the gov-ernment from issuing another notification under sec. 4 followed by notification unde.r sec. 6, that the government's power to acquire land in particular locality is not eXhausted by issuing one notification under sec. 4 (1) followed by notification under s. .6 ~nd that it . can proceed to do so by · fresh not1ficatton under Sectton 4 ( 1) and fresh declaration under sec. 6 and that such procedure would be fair to all concerned.

78 SUPREME COUllT llBPOllTS

Sark:ar J. who delivered separate judgment also repelled the con-tention by observing that he could not

"imagine government which has V3J!t reso~rces not being able to make complete plan of its. pro1ect at time. Indeed, I think, when plan is made it is com-plete~ plan. I should supp()se that before the governm~nt sta~ts acquisition pr_oceedings b:( the issue of n?tiJ!-cation under sec. 4 1t has made its plan for otherwise 1t cannot state in the notification, as it has to do, that the land is likely to be needed. Even if it had not then completed its plan it would have enough time before the making of declaratio.n under section 6 to do so. I think therefore that the difficulty of the government, even if there is one, does not lead to the conclusion that the Act contemplates the making of number of dec-larations under sec. 6." -

In the view taken Shanna's case(') sec. 6 notification dated March 18, 1966 was invalid as sec. 4 notification dated Nov-ember 13, 1959 on which it was founded ceased to be efficacious and became exhausted after sec. 6 notification dated June 14, 1961 was issued and tire rest of the land not covered by it became. as result released from acquisition. Depending on the declaration of law made in this decision the petitioners filed these writ petition in April 1966 and thereafter.

Realising that if the view taken in Shanna's case(') were to stand the government would have to issue fresh sec. 4 notifica-tion and would have to pay compensation on the basis of the market value of the land on the date of such new notification instead of on November 13, 1959, the government promulgated an Ordinance dated January 20, 1967 called the Land Acqui-sition (Amendment and Validation) Ordinance 1 of 1967. · It is not necessary to set out the provisions of the Ordinance as it has been substituted by Land Acquisition (Amendment and Valida-tion) Act, 13 of 1967 (hereafter referred to as the Amendment Act) passed on April 12, 1967. There can be no manner of doubt that the Ordinance and the Amendment Act were enacted with the object of setting at naught the decision in Sharma's case(').

Section 2 of the Amendment Act substituted the. following words in sec. SA (2), viz.,

"Submit the case for the decision of an appropriate government together with the record of the proceedings held by him and report containing his recommenda-tions on the objections." by the following words viz.,

(I) [1966] 3 S.C.R. SS1.

UDAI ltAM SHARMA v. UNION (Shelat, I.)

"either make report in respect of the land which has been notified under sec. 4 sub-sec. (1) or make different reports in respect of different parcels of such land."

Section 3 added the following words in sec. 6( 1) after the words 'certify its orders', viz.,

"and different declaration may be made from time to time in respect of different parcels of any land covered by the same notification under sec. 4 sub-sec. (1) ir-respective of whether one report or different reports has or have been made (wherever required) under sec. SA sub-section (2)." Section 3 also substituted the existing proviso to sec. 6 ( 1) by the following :-

"provided that no declaration in respect of any par-ticular land covered by notification under sec. 4(1) published after the commencement of the said ordinance (after 20-1-1967) shall be made after the expiry of three years from the date of such publication."

Sec. 4(1) of the Amendment Act is validating provision. By clause (a) it provides that no acquisition purporting to have been made before the commencement of the said Ordinance (i.e., be-fore 20-1-67) and no action taken or thing done including any notification published in connection with such acquisition shall be deemed to be invalid or ever to have become invalid on the ground that

(i) one or more collectors have performed the func-tions of collector in respect of the entire land covered by s. 4 notification.

(ii) one or more reports have been made under s. 5A(2) whether in respect of the entire land or different parcels thereof covered by the same notification, and

(iii) that more than one declaration are made under sec. 6 in respect of different parcels of land covered by the same notification under sec. 4(1).

Clause (b) of sec. 4(1) provides that any ·acquisition in pursuance of sec. 4 notification published before 20-1-67 may be made after that date and no such acquisition and no action taken or thing done including any order, agreement or notification made or published whether before or after 20-1-67 in connection with such acquisition shall be deemed to be invalid merely on the said grounds mentioneii in clause (a).

Sub-sec. (2) .of sec. 4 provides that no declaration under sec. 6 shall be made in respect of land covered by sec. 4 notification published before 20-1-67 after the expiry of two years from that

date, that is, 20-1-69. Sec. 4(3) provides for payment of interest in the circumstances set out therein.

The result of the Amendment Act clearly is that an area of land notified tinder sec. 4(1) can be acquired piecemeal at any time, the only restriction being that under sec. 3 in the case of land covered by sec. 4 notification published after 20-1-67, sec. 6 notification can be issued withiu 3 years from the date of such notification and in respect of land notified under sec. 4(1) before 20-1-67 within two years after 20-1-67. The direct consequence of the Amendment Act is that the unitary character of ·acquisition by single inql!iry, single report, single declaration and single award under the Pr111cipal Act is done away with. The government can freeu an area by issuing sec. 4 notification and can, subject to the lirilitations in sec. 3 and sec. 4(2) of the Amend-ment Act, go on acquiring parcels of such area at its convenience irrespective of the time when it makes up its mind to acquire and ·pay compensation on the basis of the value at the date of sec. 4 notification. In the case of land notified under sec. 4(1) after 20-1-6 7 the owner is deprived of appreciation in the value of his land during. three years by reason of limitation_ prescribed in sec . .3 but in the case of land notified before 20-1-67 such depri-vation can be for an uncertain period from the date of ·sec. 4 notification up to two years from 20-1-67 i.e., up to 20-1-69 depending upon when its acquisition is made. As has happened in the instant cases the entire area of 34070 acres was frozen for the purpose of computation of compensation as from Nov. 13, 1959 portons of that area were acquired as late as 1966 and the remain-ing. area can still be acquired until 20-1-69, each owner being thus deprived of the appreciation in value of his land depending upon when during all this long period the government decides to acquire it. Thus, if the land is notified in 1959 and is acquired in 1960, the loss of appreciation in value is only of one year. But the owner of another plot even. if it is contiguous to it, if the government decides to acquire it in 1969, would be deprived of the appreciation in va!ue which has taken place right from 1959 to 1969. The entire area is in the meantime frozen both for the purpose of compensati<m and as poinred out in Shanna's Case(') from its full beneficial enjoyment, the owner not knowing until government chooses to make sec. 6 declaration whether it will ultimately be acquired or not. Under the Princi-pal Act as construed in ShMma',r Case(') once sec. 6 nOtifi-cation is issued sec. 4 notification would become exhausred ana the land not declared as needed thereunder would be reliev-ed from acquisition. If government then desires to acqujre any land in addition to the one so declared it would have to be noti-fied ari.h and the government would be obliged to pay compen-(1)]1966] 3 S.C.R. 5'7.

UDAI RAM SHARMA V. UNION (Shela!, J.)

sation at the market rate prevailing on such date. The practical effect of the Amendment Act is that by keeping alive sec. 4 notification and by declaring the declarations made after the first declaration valid, the legislature. dated back the basis of com-pensation which would have been, put for this validation, tke rate prevailing at the date of sec. 4 notification howsoever belated-B cessary. The real purpose of enacting sec. 4 is thus to enable government to freeze an unlimited area by. first notifying it under sec. 4 w1d then to acquire bit by bit and pay compensation· at the rate pre1niling at the date of sec. 4 notification howsoever belated-ly it ma:3 choose to acquire such bits provided it does so before 20-1-69 where the land is notified before 20-1-67 and before the expiry of t~ years where s. 4 notification is issued after 20-1-67 and thus avoid compensating the appreciation in value in the mean-time to which the owner would have been entitled to. Though in form ti\e Amendment Act purports to valida,te acquisitions in-cluding orders and declarations made ther~for, the real purpose of enacting the Amendment Act is to avoid having otherwise to compensate for the appreciation in the land vallle during the in-D tervening period. It is well-settled principle that in determin-ing the constitutionality of provision impugned on the ground of its being an invasion on fundamental right the court must weigh not its form which may apparently look innocuous but its real effect and impact on such fundamental right. (cf. Re Kera/a Education Bill('); Gajapati Dea. v. State of Orissa([2]).

It will be seen that secs. 2 and ·3 which· enable piecemeal and multiple inquiries and reports of Collector or Collectors under s. 5A, diverse declarations, and awards in respect of different parcels of land covered by sec. 4 notification are prospective. It is only sec. 4 which is made retrospective. But it merely seeks to nullify the decision in Sharmds Case(') and purports to keep alive sec. 4 notifications which would have otherwise lost their efficacy and validates acquisitions including orders and sec. 6 declarations purported to have been made on the ba'sis of such sec. 4 notifications. Section 4, however, does not contain :\DY provision retrospectively amending sec. 4 or sec. 5A or sec. 6 and merely seeks to .revitalise sec. 4 notifications already exhausted. The section does not also provide that an acquisition or an order or declaration under sec. 6 •made on the basis of such exhausted notification will be deemed to have been made or issued under secs. 2 and 3 of the Amendment' Act and as if the Amendment Act was in force at that date as is usually done in such validating Acts. notification under sec. 4 having exhausted itself after declaration under sec. 6 in respect of part of the land covered . by it and the r8lit of the land being relieved from acquisition,

(I) [1959] s.c.R. 995. .

(2) [1953] S.C.R. 357.

(3) iJ966] 3 S.C.R. 557.

SUPIU!MB COURT llBPOllTS

there would be prima facie no basis for ·a sec. 6 declaration or acquisition unless such notification is retrospectively validated by supporting amendment of sec. 4 of the Principal Act or by malting secs. 2 and 3 of the Amendment Act retrospective and by fiction deeming it to have been made under such amending provision.

Counsel for the petitioners raised the following conte!l· tions :-

(1) that Act 13 of 1967 does not revive sec. 4 notification dated November 13, 1959 ·which became exhausted after the first sec. 6 declaration in 1961 was made and therefore no acqui-sition in respect of the rest of the land could be made without fresh sec. 4 notification. Tue contention was that secs. 2 and 3 being prospective they did not resuscitate the sec.' 4 notification though subsequent acquisitions including orders and declarations under sec. 6 -are validated and that such validation has no effi-cacy as there would be no basis by "way of sec. 4 notification for such acquisition or order or declaration.

(2) that Act13 of 1967 is in derogation of the requirements of Art. 31(2) as it purports to authorise acquisition without fresh sec. 4 notification thereby allowing compensation to be paid on the basis of an exhausted sec. 4 notification and on the value of the laud prevailing on the date of such exhausted notifica-tion.

(3) that the Amendment Act is in violation of Art. 14 in that

(a) where sec. 4 notification is made before 20-1-1967, sec. 6 declaration can be made within 2 years from the said date, I.e., on or before 20-1-69. But where the land is notified after 20-1-67 sec. 6 declaration would have to be made within 3 years from the date of such notification. In the former case much longer period is provided for sec. 6 declaration than in the latter cas~;

(b) where sec. 4 notification is made after 20-1-67 compen-sation would be fixed on the basis of the value on that date but where sec. 4 notification is made before 20-1-67 compensation would be on the basis of the value on the date of the exhausted notification howsoever long period has elapsed since such noti-fication;

(c) if compensation has not been paid before 20-1-67 interest has to be paid on the compensation amount, but if compensa-tion _h~ be~n paid before 20-1-~7 no interest is payable though acqumt10n m both the cases springs from the same sec. 4 notifi-cation;

(d) in the case of sec. 4 notification issued after 20-1-67 if Sec. 6 declaration is not made within three years fresh sec. 4 notification is necessary and compensation would be on the basis of the value on the date of such fresh notification but where s. 4 notification is' issued before 20-1-67 there is no defined period and sec. 6 declaration can be made until 20-1-69. Therefore the owner gets compensation on the value at the date of s. 4 notifi-cation howsoever long the intervening period may be. person affected by sec. 4 notification issued after 20-1-67 is thus dilferent-lY. treated than the one who is affected by such notification issued· before 20-1-67. In Writ Petition No. 85 of 1967 an additional point was raised, viz., that though 16 colonies in village Kilkori were denotified under s. 48, the land of the petitioner though situate witnin the same notified area was not denotified thus wrongly discriminating him. In Writ Petition No. 223 of 1966, Mr. Mani contended that the Amendment Act merely seeks to reverse the decision of this Court, that the Act is not legislative but judicial act and that though the Constitution has not brought about separation of powers nonetheless it does not confer un-D limited powers on the legislature to encroach upon the judicial power. In other words, the legislature seeks to control the courts' function by requiring of them construction of law according to its views. The legislative action cannot be made to retroact upon 'past transactions and controversies and reverse decisions which the courts in exercise of their undoubted authority have made,. for, that would mean not only exercise of judicial function but in effect to sit as court of review to which the past transac-tions and controversies are referred to. The question as formu-lated by him is whether statute which simply validates acts and orders pronounced upon by court as invalid is sustainable without retrospective law providing that such acts and orders are deemed to have been made under the validating Act and as if such validating Act was in existence at the date of such acts and orders.

On the question whether the Amendment Act is in deroga-tion of the requirements of Art. 31(2), the contention of the Solicitor-General was that it is not the law contemplated by Art. 3 I (2) as it merely amends ss. SA and 6 of the Principal Act and does not touch either s. 4 or s. 23 which deal with compensation, that it amends only the procedural provisions and that sec. 4 thereof merely validates acquisitions including orders and notifi-cations purported to have been. made or passed to get over the diffi-culty create by Sharma' s Case(').

The impugned Act does not frankly deal with compensation. But as already stated it is not the form of statute under

\ [1]) [l966] 3 S.C.R. 557.

challenge which matters but its substance and the direct impact it has on the constitutional requirements. Though secs. 2 and 3 amend ss. SA and 6 of the Principal Act enabling multiple inqµi-ries, reports and declarations in respect of different parcels of land notified under s. 4, the validating provisions of s. 4 have direct impact on the question of compensation payable under the Act. Where sec. 4 notification has been issued at any time before 20-1-67, as has happened ill the instant cases,. large area can be notified ·under sec. 4, say, in 1959, and yet sec. 6 declarations can be made by reason of s. 4 of the impugned Act at different times and as late as 1969. Yet, the compensation would be on the value in 1959 irrespective of the fact that such value has appreciated in the meantime due to the general spiral-c ling of prices and not as consequence of its having been notified under sec. 4. It is manifest that but for the validating provisions of s. 4 of the Amendment Act government would have had either to proceed with the acquisition of the whole bf the notified land or to proceed with part of it and thus exhaust the sec. 4 notifica-tion and release the rest of the land from acquisition. If further land is subsequently needed fresh notification under s. 4 would have been necessary and compensation would have to be paid on the basis of the value on that date. The impugned Act enables government to acquire the land once it is notified under sec. 4 in different parcels and if the notification is of date prior to 20, 1-67 pay the same compensation depriving the owner of the appreciation of value during the intervening period. Such appre-E ciation would have had to be compensated for but for ·sec. 4 of' the impugned Act. Each parcel of land in an area notified under sec. 4 would thus be deal~ with differently depending on at what· point of time it is acquired. piece of land would fetch compensation at X amount even though its market value has doubled by the time sec. 6 declaration in respect of it is made. Another piece of the very same land would be awarded the same compensation even if the appreciation in its value is four-fold only because government can now acquire it at subsequent date. The deprivation of the appreciated value to different owners or to the same owner if both the parcels of land belong to the same would vary depending upon when government chooses to acquire each of such parcels. Therefore, from the mere fact that the impugned Act does .not amend sec. 4 or sec. 23 it is not possible to say that it is not an Act dealing with or affecting compensation. Besides, by amending secs. SA and 6 and validating acquisitions, orders and declarations the Amendment Act brings about changes of fundamental character in the Act by converting the unitary character of an acquisition into diversified one, in that instead of one inquiry and one report )>y the same officer, one declaration under sec. 6 and one award, it pemtits several inquiries and several reports by different officers, several declarations and even

several awards thus altering the very structure of the Principal Act. It is thus impossible to say that the impugned Act is not the law of acquisition contemplated by Art. 31(2).

It was, however, contended that even so, (1) the impugned Act does not alter the principle in s. 23 of the Act that compen-B sation is to be fixed on the basis of market value at the date of s. 4 notification and that. such mode of compensation is based on long standing principle that the owner is not entitled to any in-crease in value as result of the land having been notified; · and (2) that the basis of compensation emerging from the Amend-ment Act has bearing on the adequacy of compensation and hence the court is barred under the amended Art. 31 (2) from making any scrutiny.The principle on which compensation is to be ascertained has undergone changes from time to time. In the Act of 1870, s. 24 provided that it should be fixed on the basis of the value at the time of paying compensation. That was changed in the Act of 1894 under which the date· of s. 6 notification was made the crucial date for ascertaining compensation. This was changed in 1923 when the market value on the date of s. 4 notification was made the measure of compensation. This was done as s. SA was then introduced for the first time in the Act. It ·was felt that the insertion of s. SA would create time gap between the notification under s. 4 and the actual acquisition. The date .of s. 4. notification was accepted as the crucial date on the principle that in calculating compensation it was fair to exclude appre-ciation due to the land having been notified for scheme for . which it was sought to be acquired. The principle on which appreciation in value after the issuance of s. 4 notification was excluded· is no longer valid or in accord with the present day realities for it is notorious fact that prices of properties have been continuously rising for rea~ons into which it is neither ne-cessary nor relevant to go into. The principle excluding appre-ciation as result of s. 4 notification has been there for long time. But the argument that s. 23 is not altered by the. Amend-ment Act does not lead us any further, for, the inquiry is what is the impact of the impugned Act on the question of compensa-tion payable to the expropriated owner. If the impugned Act had not nullified the decision in Sharma's Case(') and had not ruled that s. 4 notification would not become exhausted, fresh notification under s. 4 would have become necessary and higher • compensation would have become payable than now. The fact that neither s. 4 nor s. 23 is altered therefore does not make any difference.

(I} [1966] 3 s.c.R. ss1.

The impugned Act being legislation after the 4th Consti-A tution amendment of 1955 the question as to the adequacy of compensation is no longer amenable to judicial scrutiny but the amendment of Art. 31(2) in 1955 has not affected the constitu-tional requirement that no property can be compulsorily acquired except under law providing for compensation or which pro-vides principles fixing such compensation. As to what the term "compensation" in Art. 31 means has been the subject-matter of several decisions of this Court and the term has as result ac-quired well settled interpretation. In Bela Banerjee's Case(') Patanjalj Sastri C.J. in repelling the contention that compensa-tion in Entry 42 of List III could not mean full cash equivalent laid stress on the distinction between the word "compensation" in Art. 31 and the said Entry and the words "the acquisition of property on just terms" in s. 51 (XXXI) of the Australian Con-stitution Act and held that compensation meant just equivalent and the principles which should govern the determination of com-pensation amount to be given to the expropriated owner must ensure that what is determined must be such compensation, i.e., just equivalent. In striking down the proviso to s. 8 of the West Bengal Land Development and Planning Act, XXI of 1948 he observed that the fixing of ad anterior date which has no relation to the value of the land when it is acquired, may be many years later, cannot but be regarded as arbitrary. Similarly in Namasiwz:;a Mudaliar's Case(') this Court held, following Bela Banerjee's Case('), that any principle for determination of com-E pensation denying the owner all increments in value between fixed date and the date of s. 4 notification must be regarded as denying to the owner the true equivalent of the land which is expropriated and that it is for the State to show that fixation of compensation on the market value on an anterior date does not constitute violation of the constitutional guarantee. This deci-F sion was in respect of law before the 1955 amendment and the court expressed no opinion on the question whether it was pos-sible by enact~g legislation after the 1955 amendment to provide that compensat10n may be fixed on the basis of value prevailing on certain anterior date. (cf. Jeejeebhai v. Assist. Co1/ector($)

It was thus well settled· before the amendment of .j\.rt. 31(2) in 1955 that there could not be valid acquisition unleSs the law authorising it provided compens~tion, i.e.; just equivalent or principles fixing such compensation, i.e., just equivale~ of what the owner is deprived of. The question as to the impact of the 1955 amendment of Art. 31 (2) on this principle arose in

(I) [1954) s.C.R. 558. at p. 563-64.

(2) [1964] 6 SiC.R. 936.

(3) [1965] l S.C.R. 636.

P. Vajravelu Mudaliar v. Deputy Collector('). This decision laid down the following propositions :-

(i) whether the principles laid down in an impugned Act take into account all the elements to make up the true value of the property and exclude matters which are to be included is justici-able issue; 8

'(ii) that the law fixing compensation or laying down princi-

ples governing its fixation cannot be questioned on the ground of inadequacy;

(iii) that the connotation of "compensation" and the question

of justiciability are distinct concepts and should be. ~ept apart while considering the validity of the impugned provision;

(iv) that the fact that the amended Article uses the same

words, viz., "compensation" and "principles"-shows that Par-liament used them in the sense in which they were construed by this Court, and

(v) that the legislature must provide for just equivalent or lay down principles fixing such just equivalent and if that is done, such law cannot be ·questioned on the ground of inadequacy of compensation.

As to how and in what manner the question of . adequacy would a,rise was illustrated by giving various examples. Article 31(2) as amended means therefore that if the impugned Act either fixes just equivalent as compensation or lays _down principles for fixing such just equivalent it cannot be impeached on the ground that such compensation is inadequate or that when working out those principles the resultant compensation is inadequate. But this does not mean that the amendment permitted the legislature to fix inadequate compensation or to lay down principles fixing compensation which is not just equivalent. Such theory attri-butes an intention to the legislature to enact law in terms of contradiction, for, compensation which is not just equivalent is no compensation as interpreted by this Court and understood when Art: 31 (2) was amended and giving any such meaning to that Article would be contrary to the well settled principle of cons-G truction that where the legislature uses in an Act legal term which has. received judicial interpretation it must be assumed that it is used in the si;nse i~ which it has been judicially interpreted unless contrary mtentton appears. At p. 629 of the report if has clearly been laid down that ·

. "If the legislature though ex facie purports to pro-vide for compensation or indicates the principles for as: certaining the same but in effect and substance takes

(I) il96Sl I S.C.R. 614.

away property without paying compensation for it, it · 'will be exercising ,power which it does not po~s. If the legislature makes law for acquiring proiiertY by providing fqr an illusory compensation . or by indicating the principles for ascertain~g the compensation which do riot relate to the pro-perty acquired or to the value of such property at or within reasonable proximity of the date of ' acquisi-tion or ,the principles are so designed and so arbitrary that they do not provide for compensation at all one can easily hold that the legislature made .the Jaw in fraud of its powers."

Following this decision this Court held in the Union of India v. Metal Corporation of India(') that the principles Jaid down in the impugned ~ct were not in accord with Art. 3!(2) and that an acquisition Jaw "to justify itself has to provide for the pay-ment of just equivalent to the property acquired qr lay down principles which are not arbitrary: but which are relevant ro the fixation of compensation. It is only when the ·principles stand this test that the adequacy of the resultant compensation ·falls outside the judicial scrutiny under the second limb of Art. 31(2)."It is true that in Va;ravelu's Case(') it was held that in the context of the continuous rise in land prices, fixation of an average price over 5 years amounted to ascertaining 1 the price of the land in or about the date of acquisition and that omission of one of the elements which should properly be taken into ac~ count for fixing compensation though resulting in inadequacy of compensation . would . not constitute fraud· on power.. But there is no analogy between the· provisions of the impugned Act in that case and the instant cases. Though that Act varied the method of ascertainment of compensation provided by s. 23 of the Principal Act it provided for taking the average· of prices prevailing during the 5 years in or about the date of acquisition. By striking the. average of prices during those 5 year8 the Act actually. took into account the appreciation in value during the S years preceding the acquisition for fixing the compensation. The position in the instant cases is quite different. · The impugned Act does. not provide for any such average ·price as was ·done ·in Vairavelu's Case.(') Though s. 4 apparently validates , acqui-siticins, orders and notifications made on the· basis of s; 4 notifi" cation issued before 20-1-67, in effect and substance it seeks to treat such notification under s. 4 which had Jost its efficacy and' had become exhausted where s. 6 declaration has been made I (1) (1967] 1 S.C.R. 2SS (2) (1965] I S.C.R. 614.

for part of the land covered by such s. 4 notification as still out-standing. This is sought to be done without any legislative pro-vision in the impugned Act revitalising the notification .which had become dead and inefficacious. Such thing could not be done by merely validating acquisitions, orders and declarations with-out revitalising by some provision the notifications under s. 4 which had become exhausted and on which such acquisitions in-cluding orders and declarations are founded. Nor could it vali-date inquiries and reports under s. 5A and declarations under s. 6, all of which are made on the basis of notification which was no longer alive except by retrospectively amending s. 4 and declaring such s. 4 notification as having been made under such amended s. 4. Not having so done, the direct result of ·the vali-dating provisions of s. 4 of the impugned Act is to fix compen-sation on the basis of the market value existing on the date of s. 4 notification which had exhausted itself. By validating the acquisitions, orders and declarations made on the basis of such an . exhausted notification the impugned Act saves government from having to issue fresh s. 4 notification and having to pay compensation calculated on the market value as on the date of such fresh notification and depriving the expropriated owner the benefit of the appreciated value in the meantime. The real object of s. 4 of the impugned Act is thus to save the State from having to compensate for such appreciation under the device of validat-ing all that is done under an exhausted s. 4 notification and thus in reality fixing an anterior date, i.e., the date of such dead s. 4 notification for fixing the compensation. We apprehend that s. 4 of the impugned Act suffers from two-fold vice : (i) that it purports to validate acquisitions, orders and notifications without resuscitating the notification tinder s. 4 by any legislative provi-sion on the basis of which alone the validated acquisitions, orders and declarations can properly be sustained and (2) that its provi-sions ate in derogation of Art. 31 (2) as interpreted by this Court by fixing compensation on the basis of value on the date of noti-fications under s. 4 which had become exhausted and for keeping them alive no ·1egislative provision is to be.found in the impugned Act It is therefore not possible to agree with the view that the purpose of s. 4 is to fill in the lacuna pointed out in Shanna's Case(') nor with the view that it raises question of adequacy of compensation. · The section under the guise of validating the acquisitions, orders and notifications camouflages the real object of enabling acquisitions by paying compensation on the basis of ".alues frozen· by notification~ u.nder s; 4 which by part acquisi-Uons there~der had lost their efficacy and therefore required the rest of the land to be notified afresh and paying compensation on the date of such fresh notifications.

(I} (19661 3 S.C.R. 557.

L4Sup.C. 1/68-7

In this view, it is not necessary to go into the other questions raised by the petitioners and we refrain from expressing any opi-nion on them. We would declare s. 4 as invalid and allow the petitions with costs.

ORDER

In accordance with the opinion of the majority the petitions are dismissed. No order as to costs.