Case: Makhan Lal Malhotra And Others Vs. The Union Of India

2. The petitioners are displaced persons from West Punjab which is now known as West Pakistan and have taken up their residences in different parts of India. They put forward certain claims in regard to village houses which they had left in West Pakistan and which were situated in different villages. The petitioners have in their petition set out their respective claims which were rejected by the Rehabilitation authorities. It is unnecessary to give details of the properties in the various villages in regard to which claims were made. It is sufficient to say that the claims were put forward and they were for amounts above Rs. 20,000 in the case of petitioners Nos. 1 and 2 and above Rs. 10,000 in the case of petitioner Nos. 3 to 63. The petitioners challenge the vires of two rules- Rule 5 underthe Displaced Persons (Claims) Supplementary Act,1954,(Act XII of 1954) and R. 65 of the Rules made under the Displaced Persons (Compensation and Rehabilitation Act), Act 44 of 1954. The challenge is on the ground of violation of Art. 14 of the Constitution.

Court's reasoning:
15. Under Art. 14 of the Constitution the State shall not deny to any person equality before the law or the equal protection of the laws within the territories of India By judicial decisions the doctrine of classification has been incorporated in the equality clause, but the classification cannot be arbitrary but must be based upon differences pertinent to the subject in respect of, the purpose for which it is made. There must be a reasonable nexus between the classification and the object sought to be achieved. The object of the impugned provisions, read with the relevant Acts, is to rehabilitate the evacuees on an equitable basis. To implement the scheme of rehabilitation the evacuee law has classified evacuees under different categories. Broadly speaking, the main division is between persons who were residing in Pakistan in rural areas with agriculture as their avocation and those persons who were residing in urban areas in Pakistan. Persons from rural areas have been divided into two categories, namely, persons who owned agricultural land with a building as part of the holding and persons who held agricultural land with an independent building which cannot be described as part of the holding. Separate treatment is given to rural areas and urban areas. In the rural areas, land with a building is treated as one unit, but when the building is of a substantial value it is put in a different category and separately compensated for. This classification has certainly a reasonable relation to the object of rehabilitation, for it cannot be denied that the three categories require separate treatments for the purpose of resettlement on new lands and for the payment of compensation16. It cannot be seriously disputed that a house in a rural area and that in an urban area cannot be treated alike, but the real grievance of the petitioners is in respect of the distinction between houses in rural areas. As to what is a substantial building has to be ascertained and a line must be drawn somewhere. Here the question arises whether the classification has been made arbitrarily and without any sound basis. It may perhaps appear odd to say that a property worth Rs. 9,999 in one case or a property worth Rs. 19,999 in another would be a building of unsubstantial character or that the extent of the land, namely, four acres in one case and above four acres in another have any relevant bearing on the substantiality of the building. This perhaps may lend support to the plea of discrimination but an unprecedented situation had to be faced and provision made for the rehabilitation of such a vast multitude of humanity who had been uprooted from their homes. This necessitated an equitable treatment for them all and an equal distribution of the available evacuee properties left in India. In order to lighten the heavy burden undertaken an Inter-Dominion adjustment became necessary and the two Dominions entered into an agreement presumably based upon the relevant circumstances in regard to the treatment of rural house property. The reasonableness of the classification must therefore be judged after taking these surrounding circumstances and the conditions then prevailing into consideration. The basis of the classification must be judged by the fact that compensation is given in every case. Rules 57 and 97 A framed under Act XLIV of 1954 afford a reasonable justification for the classification17. Under the Rules every displaced person who has settled in a rural area is allotted a house in addition to such land; if no house is available in the same village the allottee is given a site and a building grant. But where his claim for a house is rejected he is given a rehabilitation grant. But under the impugned provisions separate compensation is given for a rural house of value above a prescribed limit. It will, therefore, be seen that the classification is not arbitrary but is based upon sound principles and on equitable considerations. A distinction between a rural house which is part of a holding and one which is not a part of a holding but an independent unit is made and different principles of rehabilitation are applied to meet different situations. The hardship which the division into two categories must cause is diluted by providing to the claimant falling on the wrong side of the line a rural house or a rehabilitation grantAppendix XI of Land Resettlement Manual by Mr. Tarlok Singh illustrates the principles of allotment of rural evacuee houses and the elaborate system of marking which was done in order to either give houses to allottees of land or to give them building sites with subsidy to build houses and finally in R. 97 and R. 97A of the rules made under Act 44 of 1954 detailed provisions were made for rehabilitation grants including grants to those allottees of agricultural land whose claim for rural property had been rejected or who had refused to take land allotted to them. Similarly R. 57 which has been quoted above shows that a provision has been made for giving sites as well as subsidy for building houses. It cannot be said therefore that the rules suffer from any infirmity on the ground of discrimination.