Case: Union Of India Vs. Kamlabhai Harjiwandas Parekh &amp; Others

On May 2, 1942 a plot of land bearing S. No. NA-29-A of Juhu, Bombay, was requisitioned for the purposes of the Union of India under R. 75-A (1) of the Defence of India Rules for military purposes. It is common case that this plot of land was acquired for the construction of a road leading to a military aerodrome at Juhu during the last war. The land originally belonged to the husband of the first respondent who claims to have succeeded to it by virtue of a will. The owner of the plot was receiving compensation for the requisition until December 29, 1952 when a notification was issued under S. 7 (1) of the Requisitioning and Acquisition of Immovable Property Act enacted on March 14, 1952, hereinafter referred to as the Act. The notification was to the effect that the land was being acquired by the Government of India, Ministry of Works, Housing and Supply, that it would vest in the Government from the date of the notification and there was a declaration of vesting in the notification itself. As a result of the notification, the owner of the land became entitled to claim compensation. The second respondent, hereinafter referred to as the Collector of Bombay, offered compensation at the rate of Rs. 11/- per sq. yard on February 20, 1961. The petitioner, the first respondent herein, claimed at the rate of Rs. 100/- per sq. yard plus the usual l5% solatium for compulsory acquisition. In the absence of an agreement between the, parties the Chief Judge, Court of Small Causes, Bombay was appointed as arbitrator under S. 8 of the Act. The arbitrator gave notice to the petitioner to put in her claim and also to the Government of India to put in its statement of valuation. The petitioner claimed compensation at the rate of Rs. 75/- per sq. yard plus 15% solatium for compulsory acquisition while the offer of the State was only Rs. 11/- per sq. yard without any solatium. Before the arbitrator could make much headway in the matter, the first respondent preferred a petition in the High Court of Bombay on September 18, 1962 wherein the main prayers were (1) a declaration that the provisions of S. 8 (3) of the Act were unconstitutional as infringing Arts. 31(2), 19 (1) (f) and 14 of the Constitution of India, and (2) the issue of an appropriate writ directing the arbitrator to forbear from awarding compensation on the principles laid down in S. 8 (3) of the Act and commanding him to award just and proper compensation in accordance with law.        3. The Union of India filed an affidavit in opposition affirmed by an Executive Engineer of the Bombay Aviation Division wherein many and diverse objections were raised to the petition. Before the High Court, counsel for the petitioner confined the challenge to the validity of S. 8 (3) of the Act to d. (b) only. The arguments advanced on behalf of the Union of India were: (1) that S. 8 (3) of the Act did not infringe any of the Articles of the Constitution mentioned in the petition and (2) that the petitioner was entitled to no relief because of the delay in presentation of the petition to the High Court.        4. The High Court negatived the contentions put forward on behalf of the Union Of India and allowed the petition holding that cl. (b) including the words "whichever is lass of sub-s. (3) S. 8 of the Act was ultra vires Art. 31 of the Constitution and as such void. The court gave a direction that the assessment of compensation would have to be made subject to this declaration. Hence the appeal.

Court's reasoning:
7. The Act was passed before the Fourth Amendment Act of the Constitution in 1955. Its vires is to be decided on the anvil of the Constitution as it stood before the said amendment. Several decisions of this Court have laid down the principles for testing the vires of State Acts providing for compensation for acquisition of land for public purposes17. Inassessing the just equivalent of the value of the property at twice the price which the requisitioned property would have fetched in the open market if it had been sold on the date of requisition, the arbitrator would be acting arbitrarily inasmuch as he would be proceeding on a formula for which there is no rational basisThis case cannot be compared with the case of West Ramnad Electric Distribution Co. v. State of Madras, 1963-2 SCR 747   = (AIR 1962 SC 1753  ) where the person to be compensated was given the right to choose among several methods of valuation prescribed by Section 5 of the Madras Electricity Supply Undertakings (Acquisition) Act of 1954. In that case also, the validity of the Madras Act had to be examined with reference to Article 31 (2) before its amendment in 1955. Section 5 of the Madras Act provided that the compensation payable to a licensee on whom an order had been served under Section 4 or whose undertaking had been taken over before the commencement of the Act, would be determined under any of the Bases A, B and C specified by the Section as might be chosen under Section 8The argument on behalf of the appellant that the basis did not provide for the payment of just equivalent could not be accepted by this Court because of the fact that the appellant had produced no material on which its plea could be sustained. In this case, however, there is no such difficulty.Clause (a) of Section 8 (3) lays down a principle aimed at giving the owner of the land something which approximates its just equivalent on the date of acquisition. Clause (b) however directs the arbitrator to measure the price arrived at in terms of Clause (a) with twice the amount of money which the requisitioned property would have fetched if it had been sold on the date of requisition and to ignore the excess of the price computed in terms of clause (a) over that in terms of clause (b).The position bears a close similarity with the facts in Bela Banerjees case, 1954 SCR 558  : (AIR 1954 SC 170  ) (supra) where the legislature directed that the excess of the value of the land arrived at in terms of the Land Acquisition Act over the value as on the 31st December, 1946 was to be ignored. The basis provided by Clause (b) has nothing to do with the just equivalent of the land on the date of acquisition nor is there any principle for such a basis. We cannot therefore accept the proposition that the impugned clause satisfies the requirements of Article 31 (2) of the ConstitutionThe only other contention which remains to be noted is that the High Court should have refused relief on the ground of delay in making the application under Article 226 of the Constitution. This was turned down by the High Court and it was pointed out that although the original acquisition was made on 4th April 1953, so far as compensation was concerned, the arbitrator was appointed on 21st June, 1961. We were informed that the Collector assessed the compensation on July 2, 1962 and the petitioner approached the Court on September 18, 1962. It was held by the High Court that in the case of an infringement of a fundamental right under the Constitution, mere delay would hardly affect the maintainability of the petition. The High Court was not satisfied that there was delay and said :In any case haying regard to the importance of the points raised and, assuming that there was delay, we would certainly condone the delay."In appeal we do not feel disposed to take a different view. If the High Court had any discretion in the matter- and it is not suggested that it had not-the exercise of such discretion ought not to be overruled by us unless we are satisfied that the High Court had "acted on some wrong principle or committed some error of law or ailed to consider matters which demand consideration". This is the principle which the House of Lords in England have always followed as observed by Viscount Simonds inZacharia v. Republic of Cyprus, 1963 AC 634   at p. 661and nothing has been shown to us as to why we should adopt a different principle.